Subject Property Dollar General 2828 Central Avenue Lake Station, IN 46405 Premier Investment Grade Retail Asset (NYSE: DG) Chicago MSA Location Updated Block-Base Construction Ideal Dollar-Store Demographics Highly Visible, Easily Accessible Location
Confidential Disclaimer Offered Exclusively by 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 2828 Central Avenue, Lake Station, IN 46405 (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. Brandon Duff Regional Director bduff@stanjohnsonco.com P: +1 312.240.0162 Brad Feller Senior Director bfeller@stanjohnsonco.com P: +1 312.240.0194 IN Lic # RB14036515 Isaiah Harf Associate Director iharf@stanjohnsonco.com P: +1 312.777.2437 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. Stan Johnson Company 303 East Wacker Drive Suite 1111 Chicago, IL 60601 P: +1 312.240.0127 F: +1 312.240.0158 stanjohnsonco.com
Table of Contents Section 1 - Investment Summary The Offering...5 Investment Highlights...6 Pricing and Property Overview...7 Lease Abstract & Rent Schedule...8 Site Plan...9 Tenant Overview...10 Section 2 - Location Overview Location Overview...12 Strip Map... 13 Subject Property Photos...14 Surrounding Retail...15 Demographics... 16
Section One Investment Summary NW Subject Property
The Offering Stan Johnson Company is pleased to exclusively offer for sale to qualified investors, the opportunity to purchase a fee-simple interest in the Dollar General property located at 2828 Central Avenue in Lake Station, IN (the Property ). The Property is located on busy Central Avenue, Lake Station s main artery, and is approximately 30 miles from Chicago- Proper and dense Chicago Neighborhoods. Built in 2010, the Property is 9,014 square feet on 1.27 acres with 30 parking spaces. Dollar General is currently operating under a 15 year lease with nine years of base lease term remaining, immediately followed by four, fiveyear option periods. There is a three-percent (3.0%) rental escalation beginning in year 11 of the base lease term, which occurs in less than four years, as well as ten-percent (10.0%) rental escalations at the beginning of each renewal option period. Additionally, the lease is NNN, with landlord responsibilities limited to capital expenditures for the roof, structure, and parking lot (fixed reimbursement). Positioned on Central Avenue and near multiple modes of transportation, including I-94, I-65, and I-80/90, the Property benefits from combined daily traffic counts of 144,561 VPD. The asset is surrounded by dense residential neighborhoods and ideal demographics for dollar stores, with population in excess of 49,637 and average household income of approximately $52,402 within three miles. Dollar General s lease is corporately guaranteed by Dollar General Corporation, a publicly traded entity on the New York Stock Exchange under ticker symbol DG. Dollar General currently has reported total revenues of $20.37 billion, a net income of $1.17 billion, and a net worth in excess of $5.38 billion. Dollar General currently holds a Standard & Poor s credit rating of BBB/Stable. W Subject Property Section 1 Dollar General Lake Station, IN 5
Investment Highlights 9 Years of Base Lease Term Remaining Dollar General is operating under a 15 year base lease term which expires March 31, 2025, followed by four, five-year renewal options Rental Escalations Lease features a three-percent (3.0%) rental increase beginning in year 11, which occurs in less than four years, as well as ten-percent (10.0%) rental escalations at the beginning of each renewal option period Corporate Guarantee Lease guaranteed by Dollar General Corporation, an S&P BBB/Stable rated corporation with total revenues of $20.37 billion, a net income of $1.17 billion, and a net worth in excess of $5.38 billion NNN Lease w/limited LL Responsibility Lease is NNN in nature, with Landlord responsibilities limited to capital expenses to roof, structure and parking lot (fixed reimbursement) Chicago MSA Acquisition Opportunity Property is located approximately 30 miles from Chicago-Proper and dense Chicago Neighborhoods, offering excellent exposure Excellent Access & Transportation Property near multiple modes of transportation, including I-90, I-65, and I-80/94 with combined daily traffic counts of 144,561 VPD Ideal Dollar-Store Demographics The Property benefits from a population in excess of 49,637 with average household income of approximately $52,402 within a 3-mile radius Subject Property Photos Section 1 Dollar General Lake Station, IN 6
Pricing Overview Dollar General Offering Price: $1,169,729 Offering Cap Rate: 7.00% Annual Rent: $81,881 Tenant: Guarantor: Property Type: Dolgencorp, LLC (d/b/a Dollar General) Dollar General Corporation (S&P: BBB/ Stable) Dollar Store Property Overview 2828 Central Avenue Lake Station, IN 46405 Total Building Size (SF): Lot Size (Acres): 9,014 SF 1.27 Acres Year Built: 2010 Property ID: 45-09-17-256-017.000-021 Encumbrances: None, Delivered Free & Clear N Parking: 30+ Spaces Section 1 Dollar General Lake Station, IN 7
Lease Abstract Tenant: Lease Guarantor: Dolgencorp, LLC (d/b/a Dollar General) Dollar General Corporation (S&P: BBB/Stable) Address: 2828 Central Avenue, Lake Station, IN 46405 Building Size (SF): Lot Size (Acres): 9,014 SF 1.27 acres Year Built: 2010 Lease/Rent Commencement: March 29, 2010 Lease/Rent Expiration: March 31, 2025 Base Lease Term: Base Lease Term Remaining: 15 years 9 years Annual Base Rent: $81,881 Annual Base Rent PSF: $9.08 PSF Rental Increase: 3% beginning year 11 Renewal Options: 4, 5-year renewal options Renewal Notice: 6 months Subject Property Rent Schedule Renewal Option Increases: 10% at the beginning of each option Years Dates Annual Rent Monthly Rent Rent PSF Increase Lease Type: Landlord Responsibilities: ROFR: NNN Roof, structure, parking lot (fixed reimbursement) None 1-10 3/29/2010 3/31/2020 $81,881 $6,823.42 $9.08 11-15 4/1/2020 3/31/2025 $84,337 $7,028.08 $9.36 3.0% 16-20 (Option 1) 4/1/2025 3/31/2030 $92,771 $7,730.92 $10.29 10.0% Parking: +/- 30 spaces Property ID: 45-09-17-256-017.000-021 Ownership Interest: Fee-simple Encumbrances: None, delivered free & clear 21-25 (Option 2) 4/1/2030 3/31/2035 $102,048 $8,504.00 $11.32 10.0% 26-30 (Option 3) 4/1/2035 3/31/2040 $112,253 $9,354.42 $12.45 10.0% 31-35 (Option 4) 4/1/2040 3/31/2045 $123,478 $10,289.83 $13.70 10.0% Section 1 Dollar General Lake Station, IN 8
Site Plan 18'x59.5' CONCRETE PAD 18'x18' (MIN.) DUMPSTER PAD (PROVIDE 18'x12' DUMPSTER ENCLOSURE IF REQUIRED) AREA FOR (2) STD DUMPSTERS TY /I... DOLLAR GENERAL 9,100 SFT I I z 0:: in I < < ID 31:z I ::E I I U) IJ.J Q '\ n I I I I I CENTRAL AVE (10,379 VPD) 1- t-! U) z IJ.J z N Section 1 Dollar General Lake Station, IN 9
Tenant Overview Dollar General is a U.S. chain of variety stores headquartered in Goodlettsville, Tennessee. Dollar General was founded in 1939 by Cal Turner in Scottsville, Kentucky as J.L. Turner & Son, Inc. In 1968 the business changed its name to Dollar General Corporation. In 2007 the company was acquired by the private equity firm Kohlberg Kravis Roberts & Co. (KKR), which took the company public in 2009. Dollar General offers both name-brand and generic merchandise including off-brand goods and closeouts of name-brand items in the same store, often on the same shelf. Although it has the word dollar in the name, Dollar General is not a dollar store. Many of its offerings are priced at more than one dollar. However, goods are usually sold at set price points of penny items and up to the range of 50 to 60 dollars. Dollar General has thrived during the economic recovery of the last several years and their stock has increased 16.37% in the past 12 months. They have reported a twenty-sixth consecutive year of same-store sales growth in FY 2015 and overall sales grew by 7.7%. As of February 26, 2016, it operated 12,575 stores located in 43 states. Citing Dollar General s positive operating momentum, healthy sales and expected cash flow growth, the company currently holds an investment grade rating of BBB/ Stable with Standard & Poor s. For Fiscal Year 2015, ended January 29, 2016, Dollar General Corporation (NYSE: DG) reported annual total revenues of $20.37 billion, a net income of $1.17 billion, and a net worth in excess of $5.38 billion. Tenant Credit Summary Company: Dollar General Corp. Number of Locations: 12,575 Credit Rating: S&P: BBB/Stable Stock Symbol: DG Exchange: NYSE FY 2015 Total Revenue: $20.37 billion FY 2015 Net Income: $1.17 billion FY 2015 Net Worth: $5.38 billion Tenant Business Discount, Variety store Founded: 1939 Headquartered Goodlettsville, Tennessee Website: www.dg.com Section 2 Dollar General Lake Station, IN 10
Section Two Location Overview W Subject Property
Location Overview Locally known as the crossroads of America due to the easy access to Interstate I-80/94, the Indiana Toll Road and Lake Michigan, Lake Station is a residential community with a population of approximately 14,000 people. The city is focusing on its positives and building the future. They are making the kinds of infrastructure and revitalization investments that will help future development. Water and sewer line upgrades are in the works and many road projects are coming to fruition. New residential housing located on Old Hobart Road has begun with Phase I which will include lots 73 to 146. The development will provide housing for residents and newcomers. Downtown Lake Station, IN Some major employers are the Sun Engineering Company and Pro-Chem- Co, Inc. However, the area has a strong railroad industry. Lake Station s busiest rail line is CSX Transportation s Porter Subdivision. The Chicago, Fort Wayne and Eastern Railroad also runs through Lake Station, crossing at Liverpool Road. Lake Station is five (5) miles east of Gary, IN and is approximately thirty (30) miles from Chicago s South Side. Lake Station, IN Section 2 Dollar General Lake Station, IN 12
EAST DUNES HWY (20,177 VPD) I-90 INDIANA EAST-WEST TOLL RD (32,883 VPD) I-94/I-80 (82,826 VPD) I-65 (30,794 VPD) CENTRAL AVE (10,379 VPD) GRAND BLVD (7,187 VPD) RIPLEY ST (22.978 VPD) E RANDOLPH ST (15,804 VPD) Section 3 Dollar General Lake Station, IN 13 N
Subject Property Photos Section 2 Dollar General Lake Station, IN 14
Surrounding Retail Photos Section 2 Dollar General Lake Station, IN 15
Demographics 2828 Central Avenue Lake Station, IN 46405 0-1 mi. 0-3 mi. 0-5 mi. Population 2015 Population 3,984 49,637 104,827 2020 Population 4,026 49,498 104,227 2000-2010 Annual Rate -0.57% -0.68% -0.72% 2010-2015 Annual Rate 0.26% -0.20% -0.34% 2015-2020 Annual Rate 0.21% -0.06% -0.11% 2015 Median Age 38.0 37.6 37.9 Households 2015 Total Households 1,479 19,280 40,832 2020 Total Households 1,497 19,273 40,670 2000-2010 Annual Rate -0.32% -0.55% -0.52% 2010-2015 Annual Rate 0.30% -0.11% -0.26% 2015-2020 Annual Rate 0.24% -0.01% -0.08% 2015 Average Household Income $51,949 $52,402 $53,185 N Section 2 Dollar General Lake Station, IN 16
Offered Exclusively by Brandon Duff Regional Director bduff@stanjohnsonco.com +1 312.240.0162 going beyond Brad Feller Senior Director bfeller@stanjohnsonco.com +1 312.240.0194 IN Lic #RB14036515 Isaiah Harf Associate Director iharf@stanjohnsonco.com +1 312.777.2437 Stan Johnson Company 303 East Wacker Drive Suite 1111 Chicago, IL 60601 P: +1 312.240.0127 F: +1 312.240.0158 stanjohnsonco.com The information contained herein was obtained from sources believed reliable, however, Stan Johnson Company makes no guaranties, warranties or representations as to the completeness thereof. The presentation of this property for sale, rent or exchange is submitted subject to errors, omissions, change of price or conditions, or withdrawal without notices.