23 ACRES HEART OF THE BAKKEN. Williston, ND. Offering Memorandum Investment Opportunity NNN Leased Highway 2 Frontage Additional Development Land

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1 Offering Memorandum Investment Opportunity NNN Leased Highway 2 Frontage Additional Development Land Williston, ND 23 ACRES HEART OF THE BAKKEN MATT OLSON - ASSOC. BROKER, CCIM, SIOR Property Resources Group Phone: matt@prgcommercial.com STEVE MICHEL - PRESIDENT, BROKER Michel Commercial Real Estate International Phone: smichel@michelcommercialre.com

2 TABLE OF CONTENTS INVESTMENT SUMMARY Offering Process... 3 Investment Details... 4 Area Demographics... 5 Maps... 6 PROPERTY PHOTOGRAPHS Property Photographs... 8 FINANCIAL OVERVIEW Executive Summary...12 Investment Details Cash Flow Analysis Investment Return Analysis Cumulative Analysis DISCLAIMER *All information contained herein is believed to be true but should be verified to the buyer s satisfaction in case of error, typographical or otherwise. All information is subject to change without further notice. P. 2

3 OFFERING PROCESS OFFERING PROCESS All offers must consist of a Letter of Intent and include the debt/equity structure and source of funds. Seller reserves the right to remove the property from the market at any time. Seller expressly reserves the right, in its sole and absolute discretion, to reject any and all proposals or expressions of interest in the Property, to terminate discussions with any party at any time, or to extend the deadlines previously set forth. Upon receipt of an acceptable Letter of Intent, the successful Offeror will be supplied a Purchase Agreement. All communications, inquiries and requests should be addressed to Michel Commercial Real Estate International, Inc. or Property Resources Group, as the exclusive representatives of the Seller. The management of the Property should not be contacted directly. To schedule a tour or for property inquiries, please contact one of the representatives below: Matt Olson Steve Michel Neither the Seller nor Michel Commercial Real Estate International, Inc. or Property Resources Group make any representations or warranties, expressed or implied, as to the accuracy or completeness of the information contained in the marketing materials or their contents and all Purchasers are advised to independently verify any information they deem important. Purchasers should not rely upon the information provided by or through Seller without independent verification. The marketing materials do not purport to contain all of the information that a Purchaser may desire and Purchasers are urged to conduct their own investigation and analysis. P. 3

4 INVESTMENT SUMMARY INVESTMENT DETAILS 5560, 5572 HIGHWAY 85 AND ND AVE W, WILLISTON, ND There are acres of land available with five steel buildings and man camp with a land lease. * Approximately 4 acres available for development. * Leases available upon request Offering Price: $4,650, NOI: $531, Site Size: Acres 2014 Taxes: $25, *All information contained herein is believed to be true but should be verified to the buyer s satisfaction in case of error, typographical or otherwise. All information is subject to change without further notice. P. 4

5 AREA DEMOGRAPHICS OIL The Williston area is located at the center of the drilling activity for the Bakken Formation. Tremendous oil reserves are being estimated for the Williston Basin/Bakken Formation. The total estimates on the amount of oil production could increase dramatically in the future, as drilling companies are now not only drilling in the Bakken Formation, but also into the Three Forks Formation, which is directly below the Bakken. NORTH DAKOTA The State of North Dakota is the 2ND LARGEST OIL PRODUCER IN THE US, recently surpassing California and Alaska. #1 is North Dakota s current national rand according to the Bloomberg Economic Evaluation of States Index. WILLISTON Williston continues to be the fastest-growing micropolitan area in the United States, according to Census Bureau estimates. The city topped $470 million last year in construction and remodel permit valuations and has added a dozen new hotels since The city will likely triple in size. Population and household growth in Williams County and the City of Williston has been strong. In 2013, Williams County has an estimated population of 36,227 persons. Similarly, the CITY OF WILLISTON IS THE FASTEST GROWING AREA IN THE STATE. Williston s population grew from 26,744 to 29,595 between July 2012 and July 2013, an increase of 10.7 percent. The City of Williston is actively embracing growth and is investing over $182 million in capital improvements for the rapidly expanding population. Several international energy companies now have major operations in the Williston area and is home to over 380 oil field service companies. Many of the area roads are filled with traffic and there is a continuous flurry of activity at area retailers and restaurants. Daily traffic counts on the Williston bypass have increased from approximately 9,000 vehicles per day in 2008 to over 28,000 vehicles per day in 2011 and rising! Williston continues to top the list of North Dakota cities in taxable sales & purchase revenue with $28,332,637 total and a 23.18% change from 2012 to Williston had the highest percentage increase. P. 5

6 AREA MAP Williston, North Dakota SITE P. 6

7 LOCATION MAPS Williston, North Dakota P. 7

8 PHOTOGRAPHS Williston, North Dakota P. 8

9 PHOTOGRAPHS Williston, North Dakota P. 9

10 PHOTOGRAPHS Williston, North Dakota P. 10

11 PHOTOGRAPHS Williston, North Dakota P. 11

12 FINANCIAL OVERVIEW Proforma 24 acres Williston, ND Executive Summary Matt Olson, CCIM, SIOR ACQUISITION COSTS Purchase Price, Points and Closing Costs $4,650,000 Investment - Cash $1,162,500 First Loan $3,487,500 INVESTMENT INFORMATION Purchase Price $4,650,000 Price per Tenant $4,650,000 Price per Sq. Ft. NA INCOME, EXPENSES & CASH FLOW Gross Scheduled Income $541,200 Total Vacancy and Credits $0 Operating Expenses ($10,000) Net Operating Income $531,200 Debt Service ($330,947) Cash Flow Before Taxes $200,253 FINANCIAL INDICATORS Cash on Cash Return Before Taxes 17.23% Debt Coverage Ratio 1.61 Capitalization Rate 11.42% Gross Income / Square Feet $0.00 Gross Expenses / Square Feet $0.00 Operating Expense Ratio 1.85% P. 12

13 FINANCIAL OVERVIEW Proforma Real Estate Investment Details ANALYSIS Analysis Date December 2014 PROPERTY Property Property Address acres Williston, ND PURCHASE INFORMATION Property Type Commercial Purchase Price $4,650,000 Tenants 1 Total Rentable Sq. Ft. 0 Resale Valuation 10.0% (capitalization of noi) Resale Expenses 5.0% FINANCIAL INFORMATION Down Payment $1,162,500 LOANS Debt Term Amortization Rate Payment LO Costs Fixed $3,487, years 15 years 5.0% $27,579 INCOME & EXPENSES Gross Operating Income $541,200 Monthly GOI $45,100 Total Annual Expenses ($10,000) Monthly Expenses ($833) CONTACT INFORMATION Matt Olson, CCIM, SIOR matt@prgcommercial.com The calculations and data presented are deemed to be accurate, but not guaranteed. They are intended for the purpose of illustrative projections and analysis. The information provided is not intended to replace or serve as substitute for any legal, accounting, investment, real estate, tax or other professional advice, consultation or service. The user of this software should consult with a professional in the respective legal, accounting, tax or other professional area before making any decisions. P. 13

14 FINANCIAL OVERVIEW Proforma 24 acres Williston, ND Cash Flow Analysis Matt Olson, CCIM, SIOR Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 GROSS SCHEDULED INCOME $541,200 $552,024 $563,064 $574,326 $585,812 $597,529 $609,479 $621,669 $634,102 $646,784 Total Operating Expenses ($10,000) ($10,200) ($10,404) ($10,612) ($10,824) ($11,041) ($11,262) ($11,487) ($11,717) ($11,951) NET OPERATING INCOME $531,200 $541,824 $552,660 $563,714 $574,988 $586,488 $598,217 $610,182 $622,385 $634,833 Loan Payment ($330,947) ($330,947) ($330,947) ($330,947) ($330,947) ($330,947) ($330,947) ($330,947) ($330,947) ($330,947) NET CASH FLOW (b/t) $200,253 $210,877 $221,713 $232,767 $244,041 $255,541 $267,270 $279,235 $291,438 $303,886 Cash On Cash Return b/t 17.23% 18.14% 19.07% 20.02% 20.99% 21.98% 22.99% 24.02% 25.07% 26.14% Footnotes: b/t = before taxes;a/t = after taxes P. 14

15 FINANCIAL OVERVIEW Proforma 24 acres Williston, ND Cash Flow Analysis Matt Olson, CCIM, SIOR Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 GROSS SCHEDULED INCOME $659,720 $672,914 $686,372 $700,100 $714,102 $728,384 $742,952 $757,811 $772,967 $788,426 Total Operating Expenses ($12,190) ($12,434) ($12,682) ($12,936) ($13,195) ($13,459) ($13,728) ($14,002) ($14,282) ($14,568) NET OPERATING INCOME $647,530 $660,480 $673,690 $687,164 $700,907 $714,925 $729,224 $743,808 $758,684 $773,858 Loan Payment ($330,947) ($330,947) ($330,947) ($330,947) ($330,947) $0 $0 $0 $0 $0 NET CASH FLOW (b/t) $316,583 $329,533 $342,743 $356,217 $369,960 $714,925 $729,224 $743,808 $758,684 $773,858 Cash On Cash Return b/t 27.23% 28.35% 29.48% 30.64% 31.82% 61.50% 62.73% 63.98% 65.26% 66.57% Footnotes: b/t = before taxes;a/t = after taxes P. 15

16 FINANCIAL OVERVIEW Proforma 24 acres Williston, ND Investment Return Analysis Matt Olson, CCIM, SIOR Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Cash Flow - To Date $200,253 $411,130 $632,843 $865,610 $1,109,650 $1,365,191 $1,632,461 $1,911,696 $2,203,134 $2,507,020 Net Resale Proceeds $1,791,476 $2,033,023 $2,285,245 $2,548,625 $2,823,666 $3,110,900 $3,410,882 $3,724,194 $4,051,448 $4,393,285 Invested Capital ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) Net Return on Investment $829,229 $1,281,653 $1,755,589 $2,251,734 $2,770,817 $3,313,591 $3,880,843 $4,473,390 $5,092,083 $5,737,806 Internal Rate of Return 71.33% 47.81% 40.08% 36.00% 33.38% 31.50% 30.08% 28.95% 28.03% 27.25% Modified IRR 71.33% 45.00% 35.90% 30.91% 27.61% 25.19% 23.32% 21.81% 20.56% 19.49% NPV (cash flow + reversion) $829,229 $1,281,653 $1,755,589 $2,251,734 $2,770,817 $3,313,591 $3,880,843 $4,473,390 $5,092,083 $5,737,806 PV (NOI + reversion) $5,678,528 $6,323,299 $6,980,965 $7,651,784 $8,336,019 $9,033,940 $9,745,819 $10,471,935 $11,212,574 $11,968,025 Footnotes: a/t = after taxes; Modified IRR = Modified Internal Rate of Return; PV = Present Value; NPV = Net Present Value; NOI = Net Operating Income Reversion = Amount received from the resale; Net Return on Investment = Cash Flow (a/t To Date) + Net Proceeds from Resale - Invested Capital. P. 16

17 Proforma 24 acres Williston, ND Investment Return Analysis Matt Olson, CCIM, SIOR Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Cash Flow - To Date $2,823,603 $3,153,136 $3,495,879 $3,852,096 $4,222,056 $4,936,981 $5,666,205 $6,410,013 $7,168,698 $7,942,556 Net Resale Proceeds $4,750,378 $5,123,431 $5,513,185 $5,920,415 $6,345,936 $6,451,966 $6,560,712 $6,672,229 $6,786,572 $6,758,010 Invested Capital ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) Net Return on Investment $6,411,481 $7,114,067 $7,846,564 $8,610,011 $9,405,492 $10,226,447 $11,064,417 $11,919,742 $12,792,770 $13,538,065 Internal Rate of Return 26.60% 26.04% 25.55% 25.12% 24.75% 24.42% 24.15% 23.93% 23.75% 23.57% Modified IRR 18.58% 17.77% 17.06% 16.42% 15.85% 15.33% 14.85% 14.39% 13.97% 13.53% NPV (cash flow + reversion) $6,411,481 $7,114,067 $7,846,564 $8,610,011 $9,405,492 $10,226,447 $11,064,417 $11,919,742 $12,792,770 $13,538,065 PV (NOI + reversion) $12,738,586 $13,524,557 $14,326,249 $15,143,974 $15,978,053 $16,828,814 $17,696,590 $18,581,722 $19,484,557 $20,258,415 Footnotes: a/t = after taxes; Modified IRR = Modified Internal Rate of Return; PV = Present Value; NPV = Net Present Value; NOI = Net Operating Income Reversion = Amount received from the resale; Net Return on Investment = Cash Flow (a/t To Date) + Net Proceeds from Resale - Invested Capital. P. 17

18 Proforma 24 acres Williston, ND Cumulative Analysis Matt Olson, CCIM, SIOR Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Equity (appreciation) $768,240 $876,605 $987,137 $1,099,880 $1,214,877 $1,332,175 $1,451,818 $1,573,855 $1,698,332 $1,825,298 Equity (loan reduction) $160,211 $328,618 $505,641 $691,721 $887,321 $1,092,929 $1,309,056 $1,536,240 $1,775,048 $2,026,073 CASH FLOW (a/t) $200,253 $411,130 $632,843 $865,610 $1,109,650 $1,365,191 $1,632,461 $1,911,696 $2,203,134 $2,507,020 Totals - To Date $1,128,703 $1,616,352 $2,125,621 $2,657,210 $3,211,849 $3,790,295 $4,393,336 $5,021,791 $5,676,514 $6,358,392 Invested Capital ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ROIC - To Date 97.09% % % % % % % % % % Footnotes: a/t = after taxes; ROIC = Return On Invested Capital P. 18

19 Proforma 24 acres Williston, ND Cumulative Analysis Matt Olson, CCIM, SIOR Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Equity (appreciation) $1,954,804 $2,086,900 $2,221,638 $2,359,071 $2,499,253 $2,642,238 $2,788,082 $2,936,844 $3,088,581 $3,088,581 Equity (loan reduction) $2,289,941 $2,567,310 $2,858,869 $3,165,344 $3,487,500 $3,487,500 $3,487,500 $3,487,500 $3,487,500 $3,487,500 CASH FLOW (a/t) $2,823,603 $3,153,136 $3,495,879 $3,852,096 $4,222,056 $4,936,981 $5,666,205 $6,410,013 $7,168,698 $7,942,556 Totals - To Date $7,068,349 $7,807,347 $8,576,387 $9,376,512 $10,208,809 $11,066,719 $11,941,788 $12,834,357 $13,744,779 $14,518,637 Invested Capital ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ($1,162,500) ROIC - To Date % % % % % % % % % % Footnotes: a/t = after taxes; ROIC = Return On Invested Capital P. 19

20 DISCLAIMER *All information contained herein is believed to be true but should be verified to the buyer s satisfaction in case of error, typographical or otherwise. All information is subject to change without further notice. P. 20