Offering Memorandum. Petsense Brand New Build-Out and 10-Year Corporate Lease Rufe Snow Dr. North Richland Hills (Fort Worth), TX

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1 Subject Property Petsense Brand New Build-Out and 10-Year Corporate Lease 5615 Rufe Snow Dr. North Richland Hills (Fort Worth), TX Offering Memorandum THE NET LEASE AUTHORITY New York Atlanta Chicago Houston Los Angeles Phoenix San Francisco Tulsa

2 Confidential Disclaimer This Confidential Memorandum has been prepared by Stan Johnson Company ( SJC ) and is being furnished to you solely for the purpose of your review of the commercial property located at 5615 Rufe Snow Drive, North Richland Hills, TX (the Property ). The material contained in this Offering Memorandum shall be used for the purposes of evaluating the Property for acquisition and shall not be used for any purpose or made available to any other person without the express written consent of Stan Johnson Company ( Broker ). By accepting the Confidential Memorandum, you acknowledge and agree that: (1) all of the information contained herein and any other information you will be receiving in connection with this transaction, whether oral, written or in any other form (collectively, the Materials ), is confidential; (2) you will not reproduce the Confidential Memorandum in whole or in part; (3) if you do not wish to pursue this matter, you will return this Confidential Memorandum to SJC as soon as practicable together with all other materials relating to the Property which you may have received from SJC; and (4) any proposed actions by you which are inconsistent in any manner with the foregoing agreements will require the prior written consent of SJC. This Confidential Memorandum has been prepared by SJC, based upon certain information pertaining to the Property and any information obtained from SJC to assist interested parties in making their own evaluation of the Property is offered on a no representation or warranty provision other than customary warranties of title and is sold on an as-is, where-is basis and with all faults. The material and transaction does not purport to be all inclusive. This Confidential Memorandum contains descriptive materials, financial information and other data compiled for the convenience of parties interested in the Property. The Materials are being delivered by SJC to prospective investors with the understanding that it is not all inclusive and that it is qualified in its entirety by independent investigation by prospective investors of those matters which they deem appropriate in evaluating this offering without reliance upon SJC, the Broker or any of their respective affiliates or any of the information set out in the Materials. Neither SJC, the Broker, nor any of their respective affiliates have independently verified any of the information contained herein or in any of the Materials, and no representations or warranties as to the accuracy or completeness thereof or of any other kind whatsoever are made or intended and none should be inferred. SJC, for itself and its affiliates of the Property, expressly disclaim any and all liability for statements or representations, express or implied, contained herein or for omissions from the Materials or for any other written, oral or other format of communication transmitted to a prospective investor in the course of its evaluation of the proposed transaction. All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual documents and/or financial statements, which upon request may be made available. The terms and conditions described herein are subject to change without notice. This Confidential Memorandum does not constitute an offer to accept any investment proposal but is merely a solicitation of interest with respect to the investment described herein. The Confidential Memorandum does not constitute an offer of security. The investment described herein may be financed or withdrawn from the market, without prior notice. By accepting this Confidential Memorandum you agree to release SJC and hold it harmless from any kind of claim, expense, or liability arising out of your discovery or purchase of the Property. SJC reserves the right to request the return of the Materials at any time. Ownership of the Property reserves the right to negotiate with one or more prospective investors at any time. Offered Exclusively By Scott Scurich Associate Director sscurich@stanjohnsonco.com Camille Renshaw, CCIM Senior Director crenshaw@stanjohnsonco.com Christopher Guida Associate cguida@stanjohnsonco.com Stewart Riggs Associate sriggs@stanjohnsonco.com In Association with Brett Butler TX Lic # Stan Johnson Company 180 Madison Ave Suite 1500 New York, NY P: F: Page 2

Fast Growth Retailer Petsense is a rapidly growing national retail pet supply and pet service provider.

Corporate Guarantee - The Petsense lease is backed by a corporate guarantee. Premium Retail Location - The subject property is 0.5 miles from US Route 820 with a VPD of +161,000.

National retailers in this corridor include Long John Silvers, Starbucks, Chipotle, Chick-fil-A, Walmart, Sam s Club, Hobby Lobby, Burlington Coat Factory, The Home Depot, Applebee s, and Taco Cabana.

3 Asking Price: $1,775,000 Cap Rate: 6.75% Excellent Visibility Stan Johnson Company is pleased to offer for sale to qualified investors a retail property 100% leased to Petsense located at 5615 Rufe Snow Drive, North Richland Hills, Texas. Investment Highlights Brand New 10-Year Lease - Ten (10) year primary term with two (2), five (5) year renewal options. NNN Lease - Minimal landlord responsibilities. Attractive Rent Increases There is an 8% rent escalation in Year 6 and 10% escalations in both option periods. Fast Growth Retailer Petsense is a rapidly growing national retail pet supply and pet service provider. Since 2012, Petsense expanded their footprint by 88%, currently operating 117 stores, with more due to open in the following months, and a total goal of opening 20 new stores by Corporate Guarantee - The Petsense lease is backed by a corporate guarantee. Premium Retail Location - The subject property is 0.5 miles from US Route 820 with a VPD of +161,000. Rufe Snow Drive has a VPD of +/- 37,000. National retailers in this corridor include Long John Silvers, Starbucks, Chipotle, Chick-fil-A, Walmart, Sam s Club, Hobby Lobby, Burlington Coat Factory, The Home Depot, Applebee s, and Taco Cabana. Significant Nearby Retail Development Along with the brand new Petsense, WinCo Foods, Chipotle, Dairy Queen, Taco Cabana, and QuikTrip have all recently built stores on Rufe Snow Dr. Great Demographics - Within a 5 mile radius, there is a population of over 278,000 with an average household income over $81,000. Experienced Corporate Leadership Petsense is led by an experienced executive team that helped oversee the growth of national retailers like PetSmart and PETCO. Tax Free State - Texas is one of the rare tax free states, which has no state income tax and no state estate or inheritance taxes. Previous Pet Grooming Location - The subject property was previously a pet grooming store. The current tenant is expected to pick up the pre-existing business at this site and expand sales with a selection of pet supplies. Subject Property Location Photos Property Interior Page 3

9134 AC Building SF +/- 8,558 SF Property Type Retail Year Built/Renovated

Years I-820 (+/- 161,735 VPD) RUFE SNOW DR (36,903 VPD) Renewal Options Lease

parking lot and roof ), repair, insurance, and taxes.

Fee-Simple RUFE SNOW DR (+/- 36,903 VPD) Guarantor Corporate Years Annual Rent

4 Lease Abstract 5615 Rufe Snow Dr. North Richland Hills, TX Land Area (Acres) +/ AC Building SF +/- 8,558 SF Property Type Retail Year Built/Renovated 1993/2015 Lease Start 1/26/2015 Lease Expiration 1/25/2025 Lease Term Ten (10) Years I-820 (+/- 161,735 VPD) RUFE SNOW DR (36,903 VPD) Renewal Options Lease Type Rent Escalations Two (2), Five (5) years NNN 8% in year 6, 10% each option Annual Rent $119,812 Rent per SF $14.00 Expenses Ownership Interest Tenant is responsible for maintenance (including parking lot and roof ), repair, insurance, and taxes. Landlord is responsible for material repairs or replacement of the roof. Fee-Simple RUFE SNOW DR (+/- 36,903 VPD) Guarantor Corporate Years Annual Rent Escalations Years 1-5 $119, Years 6-10 $129, % First Renewal $142, % Second Renewal $156, % N LEGEND NEW DEVELOPMENT Mile Demographics Average Household Income 2014 Average Household Income $81,739 Page 4

Tenant Overview Since 2005, Petsense has been The Place for Pet Lovers from coast to coast in towns across America.

Petsense now operates 117 locations in 28 states with the corporate headquarters located in Scottsdale, Arizona.

Petsense offers quality pet products at competitive prices, made possible by purchasing direct from their vendor partners.

5 Tenant Overview Since 2005, Petsense has been The Place for Pet Lovers from coast to coast in towns across America. Established by PetSmart founder Jim Dougherty, Petsense has experienced rapid growth into rural markets throughout the country. Petsense now operates 117 locations in 28 states with the corporate headquarters located in Scottsdale, Arizona. Their mission is to operate stores that are exciting and fun, staffed with friendly, knowledgeable associates passionate about making the pet lover s shopping, a world class experience. Petsense offers quality pet products at competitive prices, made possible by purchasing direct from their vendor partners. In addition, Petsense offers a variety of professional pet services to improve the pet s well-being. They operate their business at a level of integrity beyond reproach and promote responsible pet ownership through pet adoptions, community involvement and education. The President & CEO of Petsense, Bob Angstead, has over 30 years of retail management experience that includes overseeing PetSmart s growth from seven to over 500 stores as VP of Store Operations. Angstead s 9 year career included PetSmart s initial public offering and store concept additions. Since 2012, Petsense grew their footprint 88%, currently operating 117 stores, with more due to open in the following months, and a goal of opening a total of twenty stores by Tenant Summary Tenant Name Petsense, LLC Year Founded 2005 Number of Locations 117 Total Revenue Contact Broker Net Worth Contact Broker Tenant Business Retail/Pet Store Headquarters Scottsdale, AZ Website Petsense Locations - 28 States Representative Photo Pet Supplies - Grooming - Natural Pet Food 116 EXISTING U.S. LOCATIONS Representative Photo Page 5

6 Subject Property Page 6

7 Subject Property Store Interior Page 7

8 Subject Property Floor Plan Page 8

LEGEND 2014 Household owns any pet (%) by Block Groups 0 to 40.85%% 40.85 to 48.85% 48.86 to 55.11%% 55.12 to 61.03% 61.04 to 70.

The emerging trend of pet parents has commanded high demand for premium pet products and services.

9 LEGEND 2014 Household owns any pet (%) by Block Groups 0 to 40.85%% to 48.85% to 55.11%% to 61.03% to 70.08% N Percentage of 2014 Households Who Own Pets Pet Store Market Overview The pet store market generates $16.5 billion in revenue with an annual growth of 3.2% from 2009 through Industry revenue is forecasted to rise to a total of $18.9 billion in National brand specialty stores enjoy larger revenue growth due to product variety and cost savings from scale. This format also provides premium products, a factor that has caused external competition for mom and pop shops. The emerging trend of pet parents has commanded high demand for premium pet products and services. Pet services go beyond the traditional grooming, dog walking and training to include pet therapy sessions and pet-only flights. This is the case particularly for dog and cat owners. These positive trends, combined with rising sales, have increased profit margins for industry players in the five years to While purchasing a pet is generally discretionary, a large proportion of expenditure on a pet is nondiscretionary; these include food and medicine. Sales volatility is low. Pet food makes up 51% of industry revenue and pet supplies and medicine account for 32%. Rising Number of Pets Year Millions % Change Note: 2015 through 2019 figures are forecasted by IBISWorld Page 9

Location Overview North Richland Hills, Texas is a city in Tarrant County and a suburb of Fort Worth. The population was 63,343 at the 2010 census, making it the third largest city in Tarrant County.

North Richland Hills has 720 acres of park land, 19 miles of paved hike and bike trails, the award winning NRH2O Family Water Park, the Richland Tennis Center and the new NRH Centre that includes

Area businesses and residents are attracted to NRH s central location, excellent access, competitive property values and proximity to all levels of workforce.

The Dallas Fort Worth Arlington, TX Metropolitan Statistical Area, encompasses 12 counties within the U.S. state of Texas.

10 Location Overview North Richland Hills, Texas is a city in Tarrant County and a suburb of Fort Worth. The population was 63,343 at the 2010 census, making it the third largest city in Tarrant County. In 2006, North Richland Hills was selected as one of the Top 100 Best Places to live in America according to Money magazine. North Richland Hills has 720 acres of park land, 19 miles of paved hike and bike trails, the award winning NRH2O Family Water Park, the Richland Tennis Center and the new NRH Centre that includes state of the art fitness equipment and indoor aquatics. The City is also the proud owner of Iron Horse Golf Course, the Fort Worth Star-Telegram s eight-time choice for best public golf course. Area businesses and residents are attracted to NRH s central location, excellent access, competitive property values and proximity to all levels of workforce. Over 40% of those employed in NRH live in the cities of Fort Worth, Arlington, Dallas or Irving; demonstrating NRH s central location for employers in DFW. The Dallas Fort Worth Arlington, TX Metropolitan Statistical Area, encompasses 12 counties within the U.S. state of Texas. The area is divided into two distinct metropolitan divisions: Dallas Plano Irving and Fort Worth Arlington. Residents of the area informally refer to it as the Dallas/Fort Worth Metroplex, DFW, or The Metroplex. It is the economic and cultural hub of the region commonly called North Texas or North Central Texas and is the largest land-locked metropolitan area in the United States. Fort Worth Retail Market 2015 Q1 Existing Buildings +/- 4,005 Existing SF +/- 47,220,000 SF 12 Mo. Absorption SF +/- 629,000 SF Vacancy Rate 5.60% The 2013 official estimate U.S. Census has the Dallas Fort Worth Metroplex at 6,810,913, making it the largest metropolitan area in the South. The cities of Dallas and Fort Worth are the two central cities of the Metroplex. Dallas and its suburbs have one of the highest concentrations of corporate headquarters in the United States. Interstate highways 30, 20, 35W, and 820 all pass through the city limits. U.S. Route 377 runs south through the northern suburbs of Haltom City and Keller through the central business district. In 2013, the Fort Worth community began construction on the Tarrant Express a $2.5 billion, 10-mile project. The massive task will expand capacity by rebuilding the general purpose main lanes and adding two managed toll lanes in each direction. Construction north of the I-820/I-35W interchange is expected to be complete in late The 10-mile radius, which includes a section that is ranked fourth on the state s most congested roadway list, will experience a dramatic increase in number of vehicles per day beneficial information for retail properties of North Richland Hills. NRH2O Family Water Park North Richland Hills Parkland Dallas, TX Fort Worth, TX Page 10

11 NRH20 FAMILY WATER PARK TARRANT COUNTY COLLEGE - NORTHEAST CAMPUS I-820 (+/- 161,735 VPD) RUFE SNOW DR (+/- 36,903 VPD) NORTH HILLS HOSPITAL ST HWY 121 (+/- 170,502 VPD) NORTH EAST MALL NORTH EAST MALL 5-Mile Demographics Population 2014 Population 278,186 Average Household Income 2014 Average Household Income $81,739 N Page 11

Demographics 5615 Rufe Snow Dr, North Richland Hills, Texas, 76180 0-1 mile 0-3 miles 0-5 miles Population 2010 Population 12,023 116,327 266,688 2014 Population 12,431 119,349 278,186 2019

1% 6.2% 2014 American Indian/Alaska Native Alone 0.9% 0.7% 0.7% 2014 Asian Alone 5.0% 5.2% 5.8% 2014 Pacific Islander Alone 0.1% 0.2% 0.2% 2014 Other Race 5.6% 8.4% 7.

7% Households 2010 Households 4,818 44,255 98,063 2014 Total Households 4,999 45,434 102,239 2019 Total Households 5,270 47,557 108,211 2010-2014 Annual Rate 0.87% 0.62% 0.

12 Demographics 5615 Rufe Snow Dr, North Richland Hills, Texas, mile 0-3 miles 0-5 miles Population 2010 Population 12, , , Population 12, , , Population 13, , , Annual Rate 0.79% 0.61% 1.00% Annual Rate 1.02% 0.91% 1.15% Race and Ethnicity 2014 White Alone 79.4% 76.0% 75.9% 2014 Black Alone 6.1% 6.1% 6.2% 2014 American Indian/Alaska Native Alone 0.9% 0.7% 0.7% 2014 Asian Alone 5.0% 5.2% 5.8% 2014 Pacific Islander Alone 0.1% 0.2% 0.2% 2014 Other Race 5.6% 8.4% 7.9% 2014 Two or More Races 2.8% 3.4% 3.4% 2014 Hispanic Origin (Any Race) 21.5% 23.4% 22.7% Households 2010 Households 4,818 44,255 98, Total Households 4,999 45, , Total Households 5,270 47, , Annual Rate 0.87% 0.62% 0.99% Annual Rate 1.06% 0.92% 1.14% Median Household Income 2014 Median Household Income $54,630 $56,651 $63, Median Household Income $63,663 $65,998 $75,966 Average Household Income 2014 Average Household Income $66,378 $69,977 $81, Average Household Income $76,558 $80,216 $94,340 Fort Worth North Richland Hills N Page 12

13 Scott Scurich Associate Director Camille Renshaw, CCIM Senior Director Christopher Guida Associate Stewart Riggs Associate In Association with Brett Butler TX Lic # Stan Johnson Company 180 Madison Ave Suite 1500 New York, NY P: F:

14 Approved by the Texas Real Estate Commission for Voluntary Use Texas law requires all real estate licensees to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords. Information About Brokerage Services efore working with a real estate broker, you should Bknow that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you. A broker is obligated by law to treat you honestly. IF THE BROKER REPRESENTS THE OWNER: The broker becomes the owner s agent by entering into an agreement with the owner, usually through a written - listing agreement, or by agreeing to act as a subagent by accepting an offer of subagency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner s agent anything the buyer would not want the owner to know because an owner s agent must disclose to the owner any material information known to the agent. IF THE BROKER REPRESENTS THE BUYER: The broker becomes the buyer s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer s agent anything the owner would not want the buyer to know because a buyer s agent must disclose to the buyer any material information known to the agent. IF THE BROKER ACTS AS AN INTERMEDIARY: A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written consent of each party to the transaction to act as an intermediary. The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction: (1) shall treat all parties honestly; (2) may not disclose that the owner will accept a price less than the asking price unless authorized in writing to do so by the owner; (3) may not disclose that the buyer will pay a price greater than the price submitted in a written offer unless authorized in writing to do so by the buyer; and (4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property. With the parties consent, a broker acting as an intermediary between the parties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out instructions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party. If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding. Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee s records. Buyer, Seller, Landlord or Tenant Date Texas Real Estate Brokers and Salespersons are licensed and regulated by the Texas Real Estate Commission (TREC). If you have a question or complaint regarding a real estate licensee, you should contact TREC at P.O. Box 12188, Austin, Texas or EQUAL HOUSING OPPORTUNITY 01A TREC No. OP-K

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