OFFERING MEMORANDUM PRECISION METAL WORKS (LOUISVILLE KY)

OFFERING MEMORANDUM PRECISION METAL WORKS (LOUISVILLE KY)

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E Non-Endorsements 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. Disclaimer THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â 2017 Marcus & Millichap. All rights reserved.

N E T L E A S E D D I S C L A I M E R 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. #

INVESTMENT OVERVIEW

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INVESTMENT OVERVIEW INVESTMENT OVERVIEW Marcus & Millichap is pleased to present Precision Metal Works in Louisville, Kentucky. The subject property is a 157,520 square-foot, single-tenant industrial building on approximately 9.79 acres. In 2014 the tenant signed a twenty year Absolute Triple Net (NNN) lease with 1.5% annual rental increases, there are more than sixteen years remaining. The property is well-positioned in the southside of the Louisville market, offering Precision Metal Works a premier corner location with close access from Interstates-65 and 265. The Property is located within three miles of Louisville International Airport, a Ford Truck Assembly plant, that has been open since 1955 and the 1,000 acre General Electric/Haier Industrial Park, which has over 6,000 employees. The property has exceptional positioning and 313 feet of frontage along Preston Highway, a major corridor with over 25,500 vehicles per day. The location provides excellent demographics with over 677,000 residents, more than 793,000 employees and 284,000 households within ten miles. Average Household Incomes exceed $65,000 within ten miles. This location is Mission Critical for the tenant, as evidenced by two expansions. First in 1999, the tenant added over 28,700 square-feet and in 2005, the second addition included over 29,500 square-feet. In 2016, Bartell Global purchased Precision Metal Works to diversify and grow their global operations and services. This investment offers a long term income stream with a built-in hedge against inflation. DEMOGRAPHICS 3-Miles 7-Miles 10-Miles 2022 Estimate Population 59,948 412,551 695,350 2017 Census Population 58,820 402,825 677,289 2022 Estimate Households 24,452 173,848 294,338 2017 Census Households 23,659 168,274 284,061 Daytime Population 85,357 418,320 793,283 Average HH Income $51,302 $63,153 $65,066 INVESTMENT HIGHLIGHTS Absolute Triple Net (NNN) Lease with 16+ Years Remaining Annual 1.5% Rental Increases During Primary Term Inflation Hedge Mission Critical Facility with Long Term Historical Occupancy 157,520 SF on +/- 9.79-Acre Corner Lot 28-54 Height Strong Demographics Exceeding 677,200 Residents within Ten Miles More than 793,200 Employees and Over $65,000 AHHI within Ten Miles Well Positioned along Preston Highway, Over 25,500 VPD 9 Loading Docs, 5 Direct Access Overhead Doors, Drive-Thru Truck Scale Nearby 1,000 Acre Haier/GE Industrial Park with Over 6,000 Employees Nearby 3.15M SF Ford Truck Assembly Plant, with 4,600 Employees Nearby Louisville International Airport 3.2M+ Passengers, 2.85M Tons of Cargo Quick Access to Major Interstates, Downtown, Airport and Railroads #

INVESTMENT OVERVIEW PROPERTY HIGHLIGHTS Mission Critical Facility with Long Term Historical Occupancy and Investment by Tenant Efficiently Insulated Steel Buildings with versatile clearance heights ranging from 28 to 54 feet High Capacity Work Flow with 16 Overhead Doors, 9 Total Dock Height Doors, 5 with mechanical pit levelers and seals Variable space uses, currently 60% production, 35% warehouse and 5% office space Property encompasses 9.79-Acres with ample parking available, 134 parking spaces Adaptable to Varying Processes with 5 Overhead Cranes, varying capacities: 5-Ton (1), 10-Ton (3) and One 30-Ton (1) Tenant expanded in 1999 and 2005, adding over 58,000 Square Feet Zoned: Enterprise Zone 1, Commercial and Industrial Use 8

PROPERTY PHOTOS 9

TENANT OVERVIEW

TENANT SUMMARY Like many American stamping companies, Precision Metal Works (nth/works) was founded by a returning World War II veteran. George Lenz, entrepreneurial to the core and a Louisville native, bought his first screw machine and put it in his garage. One machine led to two, then four and so on. Screw machines ultimately morphed into stamping presses as the business grew and prospered. In the 1970 s, the first generation of Lenzs gave way to the second. By the early 1990 s, nth/works was a $40 million business with two plants focused mainly on the appliance industry. The Lenz family decided that they needed to diversify beyond appliance manufacturing. Precision Metal Works (nth/works) took its appliance experience and expertise and began targeting automotive clients. A new finishing line was built to meet the Class A finishing requirements for the automotive industry. The move to automotive was highly successful; by 1998, sales were in the $60 million range. Things were looking great for us. By the 1990s, our focus on manufacturing commoditized parts for appliance industry became a liability. Many appliance manufacturers began outsourcing production overseas. nth/works needed a new way of doing business. In late 2001, nth/works hired Tom Hudson to reposition the company for the future. Tom knew that in order for nth/works to succeed, it had to move away from commoditized parts and focus on projects with a heavy engineering focus. Tom s new management team restructured nth/works to manufacture complex, cosmetic parts with tight tolerances. Tom began by opening a new plant on Allmond Ave in Louisville with Class A paint line capabilities. He also implemented in-house printing by developing the world s largest appliance pad printing operation. nth/works now had the infrastructure and equipment to build its reputation as a world-class supplier of complex parts. SUCCESS DURING A TURBULENT RECESSION By 2005, Precision Metal Works (nth/works) had transitioned to an Employee Stock Ownership Plan (ESOP) model; every employee now had an equity interest in the company. A major innovation was nth/works investment in the application of sensor technology. nth/works patented die sensor technology allows much greater precision and mitigates defective parts. The die sensor has evolved into sophisticated in-press measurement and tool adjustment. The second major investment has been in the implementation of the Toyota Production System, a manufacturing process that focuses on continuous improvement. The one constant in the new millennium has been the total dedication of all nth/works owner associates to providing our customers with world-class solutions and our team with an environment where they can learn and grow. (pmw.bartellglobal.com)

TENANT SUMMARY BARTELL GLOBAL Bartell was founded by Art Bartell in 1946 as a machine tool and die GENERAL INFORMATION shop. Bartell began to manufacture concrete finishing power trowels Website https://pmw.bartellglobal.com/ for the local construction industry in the mid 1960 s and quickly Parent Company Bartell Global became the dominant supplier to the Canadian market. Headquartered Mississauga, Ontario Canada Rentable Square Feet 157,520 SF Today, Bartell Percentage of RBA 100.00% rentpropertyname1 continues to be a market leader in concreterentpropertyname1 finishing rentpropertyname1 Lease Commencement 9/30/2014 equipment, as well as other construction equipment products such Lease Expiration 9/30/2034 as compaction, concrete buggies and many others. No. of Locations 6 Bartell Global is made up of six premium brands that have rich histories in the concrete finishing, site prep, surface prep, and an expanding further into the metal forming industry. These brands are leaders in developing innovative and industry leading products. The Bartell Global brands work together to create a unified manufacturing company that creates high-quality products for the construction, automotive, appliance and electrical industries. Their aim is to continually push the envelope when it comes to innovation and customer service. Bartell has operations throughout North America as well rentpropertyaddress1 as Europe and Asia. rentpropertyaddress1 rentpropertyaddress1 Long standing Louisville manufacturing company, Precision Metals Works was purchased by Bartell Global in 2016 after many years of working with companies such as General Electric (GE) and Ford.

PRICING DETAILS & OPERATING DATA PRICING DETAIL & OPERATING DATA Address: 6901-6903 Preston Highway, Louisville, KY 40229 Price $6,530,00 Cap 7.25% Price/SF $41.46 Net Operating Income $473,556 Built / (Expanded) 1979 / (1999/2005) Gross Leasable Area (GLA) 157,520 SF Lot Size +/- 9.79 Acres Zoning EZ-1 Ownership Fee Simple LEASE SUMMARY Property Subtype Net Lease Industrial Tenant Single Tenant Industrial Rent Increases 1.5 Percent Each Year Guarantor Precision Tool & Die Lease Commencement Absolute Net Rent Commencement September 30, 2014 Lease Expiration September 30, 2034 Lease Term Twenty-Years Terms Remaining Sixteen-Years Eight-Months Renewal Options None Landlord Responsibility No Responsibility Tenant Responsibility CAM Ins. Utilities Real Estate Taxes Right of Refusal No RENT SCHEDULE YEAR ANNUAL RENT MONTHLY RENT RENT/SF Current $473,556 $39,463 $3.01 October 1, 2018 $480,660 $40,055 $3.05 October 1, 2019 $487,870 $40,656 $3.10 October 1, 2020 $495,188 $41,266 $3.14 October 1, 2021 $502,615 $41,885 $3.19 October 1, 2022 $510,155 $42,513 $3.24 October 1, 2023 $517,807 $43,151 $3.29 October 1, 2024 $525,574 $43,798 $3.34 October 1, 2025 $533,457 $44,455 $3.39 October 1, 2026 $541,460 $45,122 $3.44 October 1, 2027 $549,582 $45,798 $3.49 October 1, 2028 $557,825 $46,485 $3.54 October 1, 2029 $566,192 $47,183 $3.59 October 1, 2030 $574,685 $47,890 $6.65 October 1, 2031 $583,306 $48,609 $3.70 October 1, 2032 $592,055 $49,338 $3.76 13

MARKET COMPARABLES

COMPARABLE 405 CAPITOL STREET SALES 6901-6903 PRESTON HIGHWAY (SUBJECT) 1 Arvato Digital Services 2 Challenger Lifts 3 Veolia North America 4 5 Norwood Submarket 4 GKN Aerospace 6 Old Louisville Submarket 5 1 SALES COMPARABLES 15

COMPARABLE PROPERTY 405 CAPITOL NAME STREET SALES SALES COMPARABLES SALES COMPS AVG Average Cap Rate 9.0 8.1 7.2 Avg. 6.97% 6.3 5.4 4.5 3.6 2.7 1.8 0.9 0.0 6901 Preston Highway Arvato Digital Services Challenger Lifts Veolia North America Norwood Submarket GKN Aerospace Old Louisville Submarket Average Price Per Square Foot $200.00 $180.00 $160.00 $140.00 $120.00 $100.00 Avg. $76.58 $80.00 $60.00 $40.00 $20.00 $0.00 6901 Preston Highway Arvato Digital Services Challenger Lifts Veolia North America Norwood Submarket GKN Aerospace Old Louisville Submarket

COMPARABLE SALES SALES COMPARABLES 6901 PRESTON HIGHWAY 6901 Preston Highway, Louisville, KY, 40229 ARVATO DIGITAL SERVICES 2500 Export Dr, Louisville, KY, 40219 1 CHALLENGER LIFTS 2311 S Park Rd, Louisville, KY, 40219 2 rentpropertyname1 rentpropertyname1 rentpropertyname1 SUBJECT PROPERTY Asking Price $6,530,000 Price/SF $41.46 CAP Rate 7.25% GLA 157,520 SF Lot Size 9.79 acre(s) Year Built 1979 Lease Term Remaining 16.7 Years Close Of Escrow 3/23/2017 Sales Price $42,300,000 Price/SF $65.50 CAP Rate 6.15% GLA 645,840 SF Year Built 2016 Lease Term Remaining 5 Years Close Of Escrow 6/30/2016 Sales Price $11,304,000 Price/SF $82.21 CAP Rate 7.38% GLA 137,500 SF Year Built 2016 Lease Term Remaining 10 Years rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

COMPARABLE SALES SALES COMPARABLES VEOLIA NORTH AMERICA 913 Industrial Park Dr, Vandalia, OH, 45377 3 NORWOOD SUBMARKET 1115 Regina Graeter Way, Cincinnati, OH, 45216 4 GKN AEROSPACE 11495 Deerfield Rd, Blue Ash, OH, 45242 5 rentpropertyname1 rentpropertyname1 rentpropertyname1 Close of Escrow 2/26/2015 Sales Price $6,996,000 Rentable SF 70,000 Price/SF $99.94 CAP Rate 7.46% Year Built 2010 Close of Escrow 9/23/2015 Sales Price $6,800,000 Rentable SF 63,840 Price/SF $106.52 CAP Rate 7.06% Year Built 2014 Close of Escrow 10/28/2018 Sales Price $5,247,577 Rentable SF 97,864 Price/SF $53.62 CAP Rate 7.18% Year Built 1977 rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

COMPARABLE SALES SALES COMPARABLES OLD LOUISVILLE SUBMARKET 1126 W Breckinridge St, Louisville, KY, 40210 6 rentpropertyname1 rentpropertyname1 Close of Escrow 4/13/2016 Sales Price $4,151,459 Rentable SF 47,824 Price/SF $86.81 CAP Rate 6.33% Year Built 2010 rentpropertyaddress1 rentpropertyaddress1

MARKET OVERVIEW

MARKET OVERVIEW LOUISVILLE OVERVIEW The Louisville metro is composed of Indiana s Harrison, Washington, Clark, Floyd and Scott counties, as well as Kentucky s Jefferson, Spencer, Oldham, Trimble, Shelby, Bullitt and Henry counties. Louisville in Kentucky is the region s most populous city with more than 618,100 citizens, followed by Jeffersonville, Indiana, which has 46,600 residents. The Ohio River cuts through the region and was an important player in the region s development. METRO HIGHLIGHTS CENTRALIZED LOCATION Approximately 60 percent of U.S. cities are within a one-day drive of the metro, providing access to large economic centers. MAJOR DISTRIBUTION CENTER Louisville s strategic location in the country has made it a hub for the logistics and distribution industries. MARKETING DEMOGRAPHICS TEAM THE DERBY Every year, attention is focused on Louisville when it hosts the Kentucky Derby, the most acclaimed horse-racing event in the world. 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 UPS Worldport global air-freight hub at Louisville International Airport makes the region an important player in global shipping and logistics. The metropolitan area is headquarters to three Fortune 500 companies: Humana, Yum Brands and Kindred Healthcare. DEMOGRAPHICS 2016 POPULATION: 1.3M Growth 2016-2021*: 4% 2016 HOUSEHOLDS: 515K Growth 2016-2021*: 4.6% 2016 MEDIAN AGE: 38.8 U.S. Median: 37.7 2016 MEDIAN HOUSEHOLD INCOME: $50,500 U.S. Median: $57,200 * Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody s Analytics; U.S. Census Bureau

DEMOGRAPHICS Created on January 2018 POPULATION 3 Miles 7 Miles 10 Miles 2022 Projection Total Population 59,948 412,551 695,350 2017 Estimate Total Population 58,820 402,825 677,289 2010 Census Total Population 57,239 388,660 653,559 2000 Census Total Population 56,331 372,873 625,363 Daytime Population 2017 Estimate 85,357 418,320 793,283 HOUSEHOLDS 3 Miles 7 Miles 10 Miles 2022 Projection Total Households 24,452 173,848 294,338 2017 Estimate Total Households 23,659 168,274 284,061 Average (Mean) Household Size 2.47 2.35 2.33 2010 Census Total Households 22,994 162,595 274,568 2000 Census Total Households 22,514 155,756 261,330 MARKETING DEMOGRAPHICS TEAM HOUSEHOLDS BY INCOME 3 Miles 7 Miles 10 Miles 2017 Estimate $200,000 or More 0.81% 2.18% 2.73% $150,000 - $199,000 1.35% 3.05% 3.20% $100,000 - $149,000 7.02% 10.60% 10.79% $75,000 - $99,999 11.41% 12.19% 11.88% $50,000 - $74,999 19.89% 19.91% 19.10% $35,000 - $49,999 17.37% 15.15% 14.71% $25,000 - $34,999 13.24% 11.24% 10.88% $15,000 - $24,999 13.83% 12.00% 11.95% Under $15,000 15.08% 13.69% 14.76% Average Household Income $51,302 $63,153 $65,066 Median Household Income $41,034 $47,513 $47,206 Per Capita Income $20,724 $26,594 $27,534 POPULATION PROFILE 3 Miles 7 Miles 10 Miles Population By Age 2017 Estimate Total Population 58,820 402,825 677,289 Under 20 26.60% 24.59% 24.48% 20 to 34 Years 21.74% 22.68% 21.91% 35 to 39 Years 6.44% 6.60% 6.50% 40 to 49 Years 12.56% 12.33% 12.30% 50 to 64 Years 18.42% 19.67% 20.20% Age 65+ 14.23% 14.10% 14.63% Median Age 36.25 36.99 37.74 Population 25+ by Education Level 2017 Estimate Population Age 25+ 39,118 274,824 465,498 Elementary (0-8) 4.56% 3.06% 2.96% Some High School (9-11) 11.53% 8.52% 8.73% High School Graduate (12) 38.75% 30.40% 29.88% Some College (13-15) 22.62% 22.61% 22.96% Associate Degree Only 8.05% 7.79% 7.49% Bachelors Degree Only 8.81% 16.06% 16.39% Graduate Degree 4.20% 10.53% 10.67% Time Travel to Work Average Travel Time in Minutes 23 23 23

DEMOGRAPHICS MARKETING DEMOGRAPHICS TEAM Population In 2017, the population in your selected geography is 677,289. The population has changed by 8.30% since 2000. It is estimated that the population in your area will be 695,350.00 five years from now, which represents a change of 2.67% from the current year. The current population is 48.42% male and 51.58% female. The median age of the population in your area is 37.74, compare this to the US average which is 37.83. The population density in your area is 2,153.59 people per square mile. Race and Ethnicity The current year racial makeup of your selected area is as follows: 71.04% White, 21.93% Black, 0.04% Native American and 2.14% Asian/Pacific Islander. Compare these to US averages which are: 70.42% White, 12.85% Black, 0.19% Native American and 5.53% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 5.19% of the current year population in your selected area. Compare this to the US average of 17.88%. Households There are currently 284,061 households in your selected geography. The number of households has changed by 8.70% since 2000. It is estimated that the number of households in your area will be 294,338 five years from now, which represents a change of 3.62% from the current year. The average household size in your area is 2.33 persons. Housing The median housing value in your area was $155,333 in 2017, compare this to the US average of $193,953. In 2000, there were 164,888 owner occupied housing units in your area and there were 96,442 renter occupied housing units in your area. The median rent at the time was $424. Income In 2017, the current year average household income in your area is $65,066, compare this to the US average which is $81,217. The median household income for your selected geography is $47,206, compare this to the US average which is currently $56,286. The median household income for your area has changed by 25.39% since 2000. It is estimated that the median household income in your area will be $56,832 five years from now, which represents a change of 20.39% from the current year. Employment In 2017, there are 793,283 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 59.56% of employees are employed in white-collar occupations in this geography, and 40.50% are employed in blue-collar occupations. In 2017, unemployment in this area is 5.55%. In 2000, the average time traveled to work was 23.00 minutes. The current year per capita income in your area is $27,534, compare this to the US average, which is $30,982. Source: 2017 Experian

P R E S E N T E D B Y : Darpan Patel Senior Associate Associate Director - Net Leased Properties Group Cincinnati Office Tel: (513) 878-7723 Fax: (513) 878-7710 Darpan.Patel@marcusmillichap.com License: OH SAL 2012000748 Sal Ramundo Associate Office/Industrial Investment Associate Net Leased Properties Group Office and Industrial Cincinnati Office Tel: (513) 878-7736 Fax: (513) 878-7710 Sal.Ramundo@marcusmillichap.com Licenses: KY 239856 www.marcusmillichap.com