CVS Absolute NNN LOUISVILLE, KY OFFERING MEMORANDUM

OFFERING MEMORANDUM

CONFIDENTIALITY AND DISCLAIMER The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. NON-ENDORSEMENT NOTICE Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

NET LEASED DISCLAIMER Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a net leased property, it is the Buyer s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs. Like all real estate investments, this investment carries significant risks. Buyer and Buyer s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer s legal ability to make alternate use of the property. By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.

TABLE OF CONTENTS Section 1 PROPERTY DESCRIPTION Section 2 PRICING AND FINANCIAL ANALYSIS Section 3 DEMOGRAPHIC ANALYSIS Section 4 MARKET OVERVIEW

PROPERTY DESCRIPTION CVS Absolute NNN

PROPERTY DESCRIPTION INVESTMENT OVERVIEW Investment Highlights 20 Year Absolute NNN CVS with Three and a Half Years Remaining on Lease Priced at 9.09 Percent Cap Based on Current NOI; 7.5 Percent Cap on Option Rents Eight, Five-Year Option Periods CVS Corporate Guarantee (S&P BBB+/Stable) Three Miles From Downtown Louisville, Kentucky Located Next Door to Kroger and Near McDonald's and Speedway Heavy Infill Demographics: Nearly 240,000 People Within Five Miles, 13,334 People Within One Mile Marcus & Millichap is pleased to present a freestanding CVS drugstore located in Louisville, Kentucky. The property is situated just three miles from downtown Louisville and is next door to a Kroger location and down the street from McDonald's and Speedway. Louisville is the largest city in Kentucky and the county seat of Jefferson County. The Louisville metro area is the 43rd largest metro in the country with a population of approximately 1.27 million. The demographics surrounding this CVS are very strong with nearly 240,000 people living within five miles and an average household income of over $62,000. The building was constructed in 1998 at which time a 20 year absolute triple net lease was put into effect. The lease is corporately guaranteed by CVS Corporation. CVS (NYSE: CVS, S&P BBB+/Stable) is a publically traded Fortune 500 Company (#12) with annual revenues exceeding $139 billion (2014). There are eight, five-year option periods. The property is priced at a 7.5 percent cap rate based on those option periods. Per the lease, the current rent is higher than the option period rent so an investor will recognize a 9.09 percent return based on the current net operating income. 1

PROPERTY DESCRIPTION PROPERTY SUMMARY The Offering Property Property Address Assessor's Parcel Number Zoning CVS Absolute NNN 2106 Brownsboro Road Louisville, KY 40206 069F00010000 Retail Site Description Number of Stories 1 Year Built 1998 Rentable Square Feet 10,135 Lot Size 1.364 Acres Type of Ownership Fee Simple Parking Surface Lot Parking Ratio 4.54 : 1,000SF Landscaping Minimal Grass & Shrubbery Topography Flat Construction Foundation Exterior Parking Surface Roof Concrete Brick Asphalt Rubber Membrane Mechanical HVAC Fire Protection Utilities Roof Mounted To Code City Services 2

PROPERTY DESCRIPTION AREA MAPS Local Map Regional Map 4

PROPERTY DESCRIPTION AERIAL PHOTO the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any 5

PRICING AND FINANCIAL ANALYSIS CVS Absolute NNN

PRICING AND FINANCIAL ANALYSIS TENANT OVERVIEW Property Name CVS Absolute NNN Property Address 2106 Brownsboro Road Louisville, KY 40206 Property Type Net Leased Drug Store Rentable Square Feet 10,135 Tenant Trade Name Ownership Tenant Sales Volume Lease Guarantor Stock Symbol CVS Public Corporate Store $139.367 Billion Corporate Guarantee NYSE: CVS Lease Commencement Date 12/1/1998 Rent Commencement Date 12/1/1998 Lease Expiration Date 1/31/2020 Term Remaining on Lease 3.5 Years Lease Type Absolute Net Roof and Structure Tenant Responsible Lease Term 20 Year Year 1 Net Operating Income $248,961 Increases None Options to Renew Options to Terminate Options to Purchase First Right of Refusal (8) 5 Year None Yes Yes: Only in Option Periods No. of Locations 7,600 Headquartered Woonsocket, Rhode Island Web Site www.cvs.com 8

PRICING AND FINANCIAL ANALYSIS FINANCIAL OVERVIEW Location 2106 Brownsboro Road Louisville, KY 40206 Annualized Operating Data Rent Increases Annual Rent Monthly Rent Price $2,740,000 Down Payment 100% / $2,740,000 Rentable Square Feet 10,135 Price/SF 2106 Louisville, Down Rentable Price/SF CAP Year Lot Type $2,740,000 100% 10,135 $270.35 9.09% 1998 1.364 Fee Size Simple Rate Built of Brownsboro Payment Acres / Ownership $2,740,000 Square KY 40206 $270.35 Feet Road Current CAP Rate 9.09% Option Period CAP Rate 7.51% Year Built 1998 Lot Size 1.364 Acres Type of Ownership Fee Simple Tenant Summary Current - 1/31/2020 $248,961.00 $20,746.75 2/1/2020-1/31/2025 $205,745.60 $17,145.47 2/1/2025-1/31/2030 $205,745.60 $17,145.47 2/1/2030-1/31/2035 $205,745.60 $17,145.47 2/1/2035-1/31/2040 $205,745.60 $17,145.47 2/1/2040-1/31/2045 $205,745.60 $17,145.47 2/1/2045-1/31/2050 $205,745.60 $17,145.47 2/1/2050-1/31/2055 $205,745.60 $17,145.47 2/1/2055-1/31/2060 $205,745.60 $17,145.47 Base Rent ($24.56/SF) $248,961 Net Operating Income $248,961 Total Return 9.09% / $248,961 Tenant Trade Name Ownership Tenant Lease Guarantor Lease Type Roof and Structure Lease Term CVS Public Corporate Store Corporate Guarantee Absolute Net Tenant Responsible 20 Year Lease Commencement Date 12/1/1998 Rent Commencement Date 12/1/1998 Lease Expiration Date 1/31/2020 Term Remaining on Lease Increases Options 3.5 Years None (8) 5 Year 9

DEMOGRAPHIC ANALYSIS CVS Absolute NNN

DEMOGRAPHIC ANALYSIS DEMOGRAPHIC REPORT 1 Mile 3 Miles 5 Miles 2000 Population 12,964 88,667 238,314 2010 Population 13,065 86,219 235,306 2014 Population 13,334 87,845 239,821 2019 Population 13,349 87,376 239,702 2000 Households 6,772 41,353 106,776 2010 Households 6,917 40,749 106,223 2014 Households 7,075 41,656 108,643 2019 Households 7,143 41,748 109,391 2014 Average Household Size 1.83 2.00 2.11 2014 Daytime Population 5,746 76,774 189,000 2000 Owner Occupied Housing Units 39.89% 50.45% 51.26% 2000 Renter Occupied Housing Units 52.96% 42.52% 41.20% 2000 Vacant 7.16% 7.03% 7.54% 2014 Owner Occupied Housing Units 44.39% 54.01% 53.71% 2014 Renter Occupied Housing Units 55.61% 45.99% 46.29% 2014 Vacant 7.20% 7.59% 8.78% 2019 Owner Occupied Housing Units 44.58% 54.04% 53.65% 2019 Renter Occupied Housing Units 55.42% 45.96% 46.35% 2019 Vacant 7.18% 7.68% 8.93% $ 0 - $14,999 17.8% 17.8% 19.7% $ 15,000 - $24,999 15.2% 12.7% 13.2% $ 25,000 - $34,999 13.2% 10.7% 11.1% $ 35,000 - $49,999 17.2% 14.0% 14.0% $ 50,000 - $74,999 17.2% 17.0% 16.7% $ 75,000 - $99,999 8.3% 10.0% 9.8% $100,000 - $124,999 5.2% 6.6% 6.1% $125,000 - $149,999 2.7% 3.8% 3.4% $150,000 - $199,999 1.5% 3.1% 2.8% $200,000 - $249,999 0.7% 1.7% 1.3% $250,000 + 1.0% 2.7% 2.0% 2014 Median Household Income $38,091 $43,612 $40,867 2014 Per Capita Income $28,331 $33,090 $28,645 2014 Average Household Income $52,678 $68,311 $62,082 Demographic data 2012 by Experian. 11

DEMOGRAPHIC ANALYSIS SUMMARY REPORT Geography: 5 miles Population In 2014, the population in your selected geography is 239,820. The population has changed by 0.63% since 2000. It is estimated that the population in your area will be 239,702 five years from now, which represents a change of 0.04% from the current year. The current population is 48.93% male and 51.06% female. The median age of the population in your area is 37.0, compare this to the Entire US average which is 37.3. The population density in your area is 3,050.17 people per square mile. Households There are currently 108,643 households in your selected geography. The number of households has changed by 1.74% since 2000. It is estimated that the number of households in your area will be 109,391 five years from now, which represents a change of 0.68% from the current year. The average household size in your area is 2.10 persons. Income In 2014, the median household income for your selected geography is $40,866, compare this to the Entire US average which is currently $51,972. The median household income for your area has changed by 18.54% since 2000. It is estimated that the median household income in your area will be $46,867 five years from now, which represents a change of 14.68% from the current year. The current year per capita income in your area is $28,644, compare this to the Entire US average, which is $28,599. The current year average household income in your area is $62,082, compare this to the Entire US average which is $74,533. Race & Ethnicity The current year racial makeup of your selected area is as follows: 74.06% White, 20.27% Black, 0.05% Native American and 1.62% Asian/Pacific Islander. Compare these to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% Native American and 5.02% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 3.28% of the current year population in your selected area. Compare this to the Entire US average of 17.13%. Housing In 2000, there were 59,202 owner occupied housing units in your area and there were 47,573 renter occupied housing units in your area. The median rent at the time was $413. Employment In 2014, there are 189,000 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 64.70% of employees are employed in white-collar occupations in this geography, and 35.28% are employed in blue-collar occupations. In 2014, unemployment in this area is 8.06%. In 2000, the average time traveled to work was 20.5 minutes. Demographic data 2012 by Experian. 12

DEMOGRAPHIC ANALYSIS POPULATION DENSITY Demographic data 2012 by Experian. Number of people living in a given area per square mile. 13

DEMOGRAPHIC ANALYSIS EMPLOYMENT DENSITY Demographic data 2012 by Experian. The number of people employed in a given area per square mile. 14

DEMOGRAPHIC ANALYSIS AVERAGE HOUSEHOLD INCOME Demographic data 2012 by Experian. Average income of all the people 15 years and older occupying a single housing unit. 15

DEMOGRAPHIC ANALYSIS TRAFFIC COUNTS Two-way, average daily traffic volumes. the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any 16

MARKET OVERVIEW CVS Absolute NNN

MARKET OVERVIEW LOUISVILLE Market Highlights Centralized location Approximately 60 percent of U.S. cities are within a one-day drive of the metro. Major distribution center Louisville s strategic location in the country has made it a hub for the logistics and distribution industries. The Derby Every year, attention is focused on Louisville when it hosts the Kentucky Derby, the most acclaimed horse-racing event in the world. Geography The Louisville metro comprises seven counties in northcentral Kentucky and five in southern Indiana. The Ohio River passes through the region, providing a wide and vast flood plain, surrounded by hilly terrain at the metro s perimeter. The Knobs region, in southern Louisville, hosts the Jefferson Memorial Forest and is largely undeveloped. With few natural barriers to limit outward expansion, the metro has recorded approximately 30 percent population growth since 1990. Louisville Metro 18

MARKET OVERVIEW LOUISVILLE Metro Louisville is home to nearly 1.3 million residents residing within Indiana s Harrison, Washington, Clark, Floyd and Scott counties, as well as Kentucky s Jefferson, Spencer, Oldham, Trimble, Meade, Nelson, Shelby, Hardin, Larue, Bullitt, and Henry counties. Louisville in Kentucky is the region s largest city with more than 600,000 citizens, followed by Jeffersonville, Indiana. Largest Cities in Metro by Population Infrastructure Interstates 64 and 65 run through Louisville, while I-71 has its southern terminus there. All three of these highways intersect just east of downtown, in an area commonly referred to as Spaghetti Junction. I-264 and I-265 are beltways for Louisville motorists, and construction has recently begun on more bridges to span the Ohio River and link the cities of Louisville and Jeffersonville. Most air traffic in Louisville is handled at Louisville International Airport, which houses the UPS Worldport global air hub. Additional air service is provided by Bowman Field and Clark Regional Airport. CSX, Norfolk Southern and regional carriers operate freight rail service. On the Ohio River, the McAlpine Locks and Dam assist maritime shipping. More than 50 million tons of cargo pass through the locks annually. Regional transportation in and around Louisville is offered by the Transit Authority of River City (TARC), which operates the area's bus network. Louisville 611,200 Jeffersonville 45,500 New Albany 36,900 Jeffersontown 27,300 Clarksville 21,900 St. Matthews 17,800 Airports Louisville International Airport Bowman Field, Clark Regional Airport Major Roadways I-64, I-65, I-71, I-264, I-265 US 31, US 42, US 60, US 150 Rail Freight - CSX and Norfolk Southern Regional Freight - Paducah and Louisville Railway, Louisville and Indiana Railroad Port Port of Louisville The Louisville Metro is: 100 miles from Cincinnati 115 miles from Indianapolis 175 miles from Nashville 260 miles from St. Louis * Forecast Sources: Marcus & Millichap Research Services, U.S. Census Bureau, Experian 19

MARKET OVERVIEW LOUISVILLE Economy Although the region s economy has been historically dominated by the shipping and rail industries, contemporary Louisville boasts a well-diversified economy focused on advanced manufacturing, logistics, life sciences and healthcare, among other industry sectors. The metropolitan area is headquarters to three Fortune 500 companies, including Humana, Yum Brands and Kindred Healthcare. In recent decades, the area has attracted numerous medical and healthcare organizations. Louisville s downtown medical research campus recently completed an $88 million rehabilitation center, which attracts some of the nation s top medical talent. In line with the metropolitan area s legacy in the transportation industry, Louisville s economy still benefits from being centrally located in the United States and is within a one-day drive of 60 percent of U.S. cities. The UPS Worldport global air-freight hub at Louisville International Airport makes the region an important player in global shipping and logistics. Automotive and appliance manufacturing are also part of Louisville s economic fabric, as is the spirits industry. Roughly one-third of all bourbon is produced in the area. The Louisville economy is accelerating, with the region s gross metropolitan product on the rise. GMP is forecast to grow by approximately 3.3 percent this year. Regional retail sales will continue to increase this year, expanding by 5.8 percent, slightly above the national average. Port of Louisville Quick Facts A Foreign-Trade Zone Intermodal transportation transfer to rail, truck or barge Bulk commodity transfer terminal Can handle more than 4 million tons of dry bulk commodities a year On-site warehousing * Forecast Sources: Marcus & Millichap Research Services, Bureau of Economic Analysis, Moody's Analytics, U.S. Census Bureau, Port of Louisville 20

MARKET OVERVIEW LOUISVILLE Labor The Louisville metropolitan area provides a total of 642,200 jobs and over the last five years, nonfarm employment grew at an annual pace of 1.7 percent. Through 2019, annual employment gains are expected to slow slightly to 1.2 percent. Trade, transportation and utilities is the largest major employment sector in Louisville, accounting for 21 percent of all jobs, or more than 136,000 positions. This segment of employment is expected to grow 0.9 percent annually through 2019. Education and health services comprise the second-biggest share of regional jobs with 88,100 positions, or 14 percent of total regional employment. Jobs in this field are forecast to increase 2.6 percent annually over the next five years. The professional and business services, and the government sectors, each contribute another 13 percent of employment. Louisville is also a major manufacturer of both automotive components and electrical appliances. Jobs in manufacturing represent 12 percent of regional payrolls. Throughout 2019, jobs in construction are projected to post the most robust growth of any major employment sector, at an average of 2.8 percent expansion each year. All employment sectors are forecast to grow over the next five years and half of them will grow in excess of 1.0 percent annually during this time. * Forecast Sources: Marcus & Millichap Research Services, BLS, Moody's Analytics 21

MARKET OVERVIEW LOUISVILLE Employers Louisville has evolved from a transportation and logistics dominated employment landscape to a more diversified economy. Still, some of the most important employers in the metropolitan area are in transportation services. UPS central hub at Louisville International Airport provides a dynamic shipping and distribution industry to the region. UPS alone employs more than 20,000 workers. Additionally, Amazon is rapidly expanding operations in the Louisville metro. The metropolitan area s lively healthcare industry is also a major source of Louisville residents income. Numerous private hospitals and health insurance providers abound in the region. Humana, Northern Healthcare, KentuckyOne Health and the Baptist Healthcare System comprise some of the largest local names in these industries. Humana itself provides more than 11,000 regional jobs. The continued expansion of Louisville s downtown medical research campus will likely attract an even greater presence of healthcare firms into the area. Major Private Sector Employers United Parcel Services Humana, Inc. Norton Healthcare, Inc. KentuckyOne Health, Inc. Ford Motor Co. GE Appliances The Kroger Co. Baptist Healthcare System, Inc. Catholic Archdiocese of Louisville LG&E and KU Energy LLC Among the metro s 77,300 jobs in manufacturing, many stem from automotive and household appliance fabrication. Ford Motor Co. employs approximately 8,500 workers at its Kentucky Truck Plant and Louisville Assembly Plant. Meanwhile, another 6,000 local manufacturing jobs are provided by GE Appliances in Louisville, which has recently been purchased by Electrolux. * Forecast Sources: Marcus & Millichap Research Services, BLS, Moody's Analytics, Experian 22

MARKET OVERVIEW LOUISVILLE Demographics The Louisville metro has a population of nearly 1.3 million residents, a figure that grew roughly 10 percent from 2000 to 2010. Over the next five years, the metro population is expected to expand at a pace of 0.7 percent annually, adding a total of nearly 50,000 people. The population in Louisville is slightly older than the national level. The metro s median age, at 38.6 years, is above the U.S. median of 37.4 years. This older and more settled workforce has helped boost Louisville s homeownership rate above the national average. In the metro, roughly 68 percent of residents own their own homes, compared with just 64 percent nationally. The Louisville median household income stands at $52,700 annually, slightly above the U.S. median of $52,000 per year. That said, the metro median income is rising. By 2018, the Louisville median income level is forecast to be more than $60,000 per year. Although Louisville s education attainment levels fall below the national average, these figures are trending higher. Currently, 26.3 percent of residents 25 or older have earned at least a bachelor s degree, and 10 percent have earned a graduate or professional degree. The continued attraction of young professionals to Louisville s medical community will help boost these numbers in the coming years. * Forecast Sources: Marcus & Millichap Research Services, AGS, Experian, Moody's Analytics, U.S. Census Bureau 23

MARKET OVERVIEW LOUISVILLE Quality Of Life The Louisville metro offers residents a wide array of entertainment and cultural amenities. The most famous is the Kentucky Derby, which annually attracts horseracing enthusiasts and visitors from all over the world. The Derby itself plays a large part in Louisville s culture, and both Churchill Downs and the Kentucky Derby Museum are open to the public year-round. Other popular museums in the metro include the Louisville Slugger Museum and Factory and the Frazier History Museum. Visual arts can be found at the Speed Art Museum, which houses works by some of the world s most famous painters. Louisville is also home to a number of renowned estates and historical houses. Louisville Palace, Conrad s Castle, Locust Grove and the Belle of Louisville steamboat are all popular attractions. The metro also provides a multitude of performing arts options. The Louisville Ballet, Louisville Orchestra, Bourbon Baroque, the Kentucky Opera and other organizations stage events across the city, from the Actors Theatre of Louisville to the Kentucky Center and Brown Theatre. The metro also has a vast independent music scene. The Louisville Zoo and Renaissance Fun Park are both popular attractions for children. Additionally, nature lovers can spelunk in the region s widely popular Louisville Mega Cavern, and hike or bike the many miles of trails. Louisville prides itself as one of the best college sports towns in the world. The NCAA s University of Louisville Cardinals are a major source of entertainment for residents, and the metro s other sports options include teams in minor league baseball to indoor soccer. * Forecast Sources: Marcus & Millichap Research Services, National Association of Realtors, Moody's Analytics, U.S. Census Bureau The information contained in the market overview comes from sources deemed to be reliable, however, no representation, warranty or guarantee, express or implied, may be made as to the accuracy or reliability of the information contained herein. The most timely data available at time of production, including estimates and forecasts, were used and may be subject to revision. 24

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