Forest Ridge Square - Schertz, TX

FOREST RIDGE SQUARE 4825 FM 3009 S a n A n t o n i o , Te x a s 7 8 1 5 4

:: offering memorandum

Capital Markets | Investment Properties

TA B L E O F C O N T E N T S 1 Executive Summary....................................3 Investment Profile Property Overview Highlights & Features

2 Market and Asset Overview....................7 Property Summary Tenant Summaries Location Map Aerials Site Plan Rent Comparables Demographics

3 Financials....................................................17

Rent Roll Estimated Reimbursement Revenue Tenant Notes Income & Expense Analysis Expiration Schedule

EXECUTIVE SUMMARY

FOREST RIDGE SQUARE

INVESTMENT PROFILE

PRICE:

$4,600,000

PRICE PSF:

$466

NOI:

$291,000

CAP RATE:

6.33%

OCCUPANCY:

100%

GLA:

± 9,875

LAND AREA:

± 2.097 acres

YEAR BUILT:

2015

EXISTING DEBT:

Free and Clear

4

FOREST RIDGE SQUARE

PROPERTY OVERVIEW Pierson Retail Advisors is pleased to offer Forest Ridge Square (“Property”), a 9,875 square foot retail center shadow to HEBplus! in the high growth city of Schertz, Texas. Strategically located within the San Antonio metropolitan area, the premier city of Schertz benefits from its location at the northeast gateway to Austin.

With construction completed in the fourth quarter 2015, the Forest Ridge Square is of high quality design, architecture, and construction which will benefit a future owner with minimal capital improvements in the near future. Furthermore, the Property has direct access to HEBplus! and Lowe’s Home Improvement via a shared entrance road adjacent to the Property.

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FOREST RIDGE SQUARE

HIGHLIGHTS & FEATURES NNN Leases with Built-in Escalations: Both tenants recently commenced their NNN structured leases which benefit an owner by limiting expense leakage. Additionally, both leases include scheduled base rent escalations virtually assuring revenue growth over the next several years.

Solid Tenant Line-up: Forest Ridge Square is occupied by two tenants: AT&T and Schertz Cibolo Emergency Clinic. The AT&T lease is with one of the largest AT&T Authorized Retailers with nearly 350 stores in 16 states.

Schertz Cibolo Emergency Clinic is an Arete Urgent Care provider, and is a growing urgent care facility operator with seven existing locations and two opening soon.

Premier Retail Destination: Together with the surrounding consumer traffic generators including HEBplus! Lowe’s Home Improvement, Walmart and Garden Ridge, the Property combines specialty retail and service tenants generating steady traffic and promoting cross-shopping.

Brand New, Quality Construction: The Property was just completed in December 2015. The Property is aesthetically appealing with a contemporary design, high quality architecture and construction. These updates and new roof benefit an investor as the Property is likely to require minimal capital improvements in the near future.

Access & Visibility: The Property was designed in a straight-line configuration providing maximum exposure to more than 31,600 vehicles per day along FM 3009. Additionally, Forest Ridge Square benefits from more than 147,400 cars along Interstate 35, a major artery through Texas. Furthermore, the Property can be accessed directly from FM 3009 as well as from the shared drive to HEBplus!

Centrally Located: The City of Schertz is located in South-Central Texas along the Interstate 35 corridor. The stretch of Interstate 35 between San Antonio and Austin is one of the fastest growing corridors in the United

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FOREST RIDGE SQUARE

States. Schertz has a wide range of business and industries that proudly call Schertz home due to location, reputation, educated workforce, history of private sector investment, as well as competitive tax rates.

Tremendous Growth & Population Densities: Forest Ridge Square is certain to benefit from the tremendous growth in its trade area.

Schertz has experienced explosive growth over the last five years with 20.32%, 33.25% and 29.59% growth within one, three, and five miles of the Property. Furthermore, this pattern is expected to continue with the trade area projected to experience an additional 13.68% growth on average over the next five years. Currently, there are 59,625 residents within a three mile radius of the Property increasing to 115,999 residents within five miles. Additionally, annual average incomes for the surrounding areas are $105,185, $94,541, and $86,125 within their respective one, three and five mile radius.

MARKET & ASSET OVERVIEW

FOREST RIDGE SQUARE

PROPERTY SUMMARY ADDRESS:

4825 FM 3009 San Antonio, Texas 78154 Guadalupe County

LEGAL DESCRIPTION:

Lot 9R, Block 1, Forrest Ridge Commercial II

BUILDING AREA:

± 9,875 square feet

LAND AREA:

± 2.097 acres or ± 91,345 square feet

YEAR BUILT:

2015

PARKING:

± 50 Surface Spaces

PARKING RATIO:

± 5.06 per 1,000 SF

CONFIGURATION:

One, single story building

INGRESS / EGRESS:

One direct entry point from both FM 3009 and Forest Ridge Parkway, as well as a shared access road with HEBplus!

STRUCTURE:

Tilt wall

AGE OF ROOF:

2015

ROOF COMMENTS:

Flat built-up roofing system

HVAC:

Individual roof mounted HVAC units

TRAFFIC COUNTS:

FM 3009: ± 33,204 vpd Interstate 35: ± 154,817 vpd (source CoStar)

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FOREST RIDGE SQUARE

TENANT SUMMARIES

Entity on Lease DBA Corporate or Franchise Locations

Wireless Mission, LP AT&T Authorized Retailer Wireless Mission LP is one of the largest authorized retailers with 347 locations nationwide

Website

http://www.att.com/

Financials

AT&T Corporate revenue in 2014: $132.45 Billion

Line of Business

A multi-national telecommunications corporation providing wireless, fixed telephone service as well as broadband subscription television and internet services.

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FOREST RIDGE SQUARE

Entity on Lease DBA Guarantor Corporate or Franchise Locations

Website Financials Line of Business

Arete Urgent Care, PLLC Schertz Cibolo Emergency Clinic Joel Kay Corporate Arete Urgent Care has 7 locations in San Antonio, Floresville and Midlothian under various DBA's, with two locations opening soon.

N/A N/A - Private A full-service, emergency center facility offering diagnosis and medical treatment to individuals and families of all ages.

LOCATION MAP

Forest Ridge Square

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FOREST RIDGE SQUARE

Wie d

ers

tein

Roa

d

AERIAL

11

FOREST RIDGE SQUARE

AERIAL

12

FOREST RIDGE SQUARE

SITE PLAN

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FOREST RIDGE SQUARE

Tenant

Suite

Size

AT&T

100

1,500

Schertz Cibolo Clinic

200

7,500

RENT COMPARABLES Property Forest Ridge Square ï‚« 4825 FM 3009 Schertz, Texas

Forest Ridge Shopping Center 1 17460 I-35 N

Verde Plaza 2 I-35 & Mid-Cities Parkway

14

GLA

Year Built/ Renovated

Current Occupancy

9,875

2015

100.0%

Available SF

Asking Rates

NNN

HEBplus! (shadow), AT&T, Schertz Cibolo Emergency Clinic

0

$27.00 - $30.00

$8.04

0

$22.00 - $30.00

$5.25

Major Tenants

95,600

1985

100.0%

HEBplus! (shadow), Massage Envy, The UPS Store, Baskin Robbins, Natural Nails & Spa, Fantastic Sams

24,277

2015

17.8%

Chicago Title, The Bank of San Antonio

19,954

$28.00 $30.00

$7.25

3

Four Oaks 6032 FM 3009

29,568

2008

94.9%

Walmart (shadow), WingStop, Quality Urgent Care, Mathnasium, Cut N' Style, Goomba's Italian

1,500

$28.00 - $32.00

$9.54

4

Schertz Retail Plaza 5580 FM 3009

12,000

2006

75.0%

Walmart (shadow), CATO, Sally Beauty, Cricket Wirelsess, SupCuts

3,000

$21.00 $23.00

$8.25

5

Dollar Tree Center 6051 FM 3009

40,583

2007

98.1%

Dollar Tree, Advance America, Pinot's Pallet, Liberty Tax, MedCom

789

$20.00 $24.00

$5.36

FOREST RIDGE SQUARE

RENT COMPARABLES

3

Forest Ridge Square 1

Forest Ridge SC

2

Verde Plaza

3

Four Oaks Plaza

4

Schertz Retail Plaza

5

Dollar Tree Center

1

3 4

5

1 2

2

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FOREST RIDGE SQUARE

DEMOGRAPHICS Radius

1 Mile

3 Mile

5 Mile

11,524 10,213 8,494 12.84% 20.24% 2,525

68,993 60,365 44,875 14.29% 34.52% 16,333

133,377 117,826 89,482 13.20% 31.68% 36,045

8,193 1,254 64 306 20 377 214

48,693 7,150 489 1,750 149 2,133 1,347

95,543 13,134 1,106 3,675 372 3,995 2,712

3,943 3,492 2,916 12.92% 19.75% 2,973 519 $104,551 $89,280

24,219 21,178 15,771 14.36% 34.28% 16,875 4,303 $96,407 $84,012

48,437 42,833 32,809 13.08% 30.55% 31,216 11,617 $87,190 $74,635

200 332 841 653 672 335 176 283

1,836 3,483 3,848 3,943 3,504 2,036 1,240 1,287

5,042 8,356 8,131 7,732 5,993 3,154 2,389 2,036

Population: 2021 Projection 2016 Estimate 2010 Census Growth 2016-2021 Growth 2010-2016 2016 Population Hispanic Origin

2016 Population by Race: White Black Am. Indian & Alaskan Asian Hawaiian & Pacific Island Other U.S. Armed Forces

Households: 2021 Projection 2016 Estimate 2010 Census Growth 2016 - 2021 Growth 2010 - 2016 Owner Occupied Renter Occupied 2016 Avg Household Income 2016 Med Household Income 2016 Households by Household Inc: <$25,000 $25,000 - $50,000 $50,000 - $75,000 $75,000 - $100,000 $100,000 - $125,000 $125,000 - $150,000 $150,000 - $200,000 $200,000+

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FOREST RIDGE SQUARE

FINANCIALS

FOREST RIDGE SQUARE

Forest Ridge Square

RENT ROLL

Rent Roll

Tenant

%

Lease Dates Start End

Suite

GLA

Cibolo Emergency Clinic

1

7,625

77.22% 12/15 12/25

AT&T

2

2,250

22.78% 03/16 02/21

Total Count / GLA

2

9,875

100%

Occupied

2

9,875

100.0%

Available

0

0

Total Avg Rent / GLA

29.47

9,875

0.0% 100.0%

Notes: [1] Static analysis information obtained from RR dated 2/17/2016

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FOREST RIDGE SQUARE

Totals

Minimum Rent Annual Monthly

PSF

Recoveries Annual PSF

$232,500 $19,375

$30.49

$56,333

$7.39

$288,833

79.36%

$26.00

$16,623

$7.39

$75,123

20.64%

$363,956

100.00%

$58,500 $291,000

$4,875

$72,956

Total Revenue

% of Rev

Forest Ridge Square

ESTIMATED REIMBURSEMENT REVENUE Tenant

Estimated Reimbursement Revenue Management Fee Monthly PSF

Insurance Monthly PSF

GLA

Cibolo Emergency Clinic

1

7,625

77.22%

$873

$1.37

$463

$0.73

$450

AT&T

2

2,250

22.78%

$258

$1.37

$137

$0.73

$133

9,875

100%

$1,131

Totals

%

CAM Monthly PSF

Suite

$600

$583

Real Estate Taxes Monthly PSF

Total Recovery Monthly PSF

$0.71

$2,908

$4.58

$4,694

$7.39

$0.71

$858

$4.58

$1,385

$7.39

$3,766

Notes: [1] Analysis assumes all tenants reimburse net of CAM, Real Estate Taxes, Insurance, and Management. AT&T has a 5% cap on controllable CAM.

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FOREST RIDGE SQUARE

$6,080

TENANT NOTES Tenant

Suite

GLA

Base Rental Increases Date PSF

Option Notes Renewal

Notes

Cibolo Emergency Clinic

1

7,625

03/21

$33.54

Two 5-year renewal options. 1st @ 36.30 psf/yr; 2nd @ $39.30 psf/yr

Tenant: Arete Urgent Care, PLLC. Guarantor: Joel Kay

AT&T

2

2,250

03/19

$27.00

Two 5-year renewal options. 1st @ 29.70 psf/yr; 2nd @ $32.67 psf/yr

Tenant: Wireless Mission LP Tenant has 5% cap on CAM

Totals

20

Tenant Notes

Forest Ridge Square

FOREST RIDGE SQUARE

9,875

INCOME AND EXPENSE ANALYSIS In-place Pro-forma

% of EGR

PSF

INCOME Base Rent Percentage Rent Total Rental Revenue

$291,000 $0 $291,000

$29.47 $0.00 $29.47

80.0% 0.0% 80.0%

$13,572 $7,200 $6,992 $45,192 $72,956

$1.37 $0.73 $0.71 $4.58 $7.39

3.7% 2.0% 1.9% 12.4% 20.0%

$363,956

$36.86

100.0%

Common Area Maintenance Landscape Utilities Waste Total Common Area Maintenance

$6,495 $5,252 $1,826 $13,572

$0.66 $0.53 $0.18 $1.37

1.8% 1.4% 0.5% 3.7%

Management Fee Total Insurance Total Real Estate Taxes Total Recoverable Expenses

$7,200 $6,992 $45,192 $72,956

$0.73 $0.71 $4.58 $7.39

2.0% 1.9% 12.4% 20.0%

$72,956 $291,000

$7.39 $29.47

20.0% 80.0%

Expense Reimbursements CAM Recoveries Management Fee Recoveries Insurance Recoveries Real Estate Tax Recoveries Total Expense Reimbursements Effective Gross Revenue (EGR) OPERATING EXPENSES

Total Operating Expenses Net Operating Income Capitalization Rate Notes: [1] Expense Source Owner provided 2016 Budget

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FOREST RIDGE SQUARE

6.33%

Forest Ridge Square EXPIRATION SCHEDULE Suite Tenant

Expiration

2

AT&T

02/21

1

Cibolo Emergency Clinic

12/25

Total Expiration Area Percent of Total Center

22

EXPIRATION SCHEDULE

FOREST RIDGE SQUARE

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2,250 7,625 2,250

0

22.78%

0.00%

For more information, please contact: : : Jennifer Pierson

: : Beth Pierson

President and CEO

Vice President Operations

: : Debora Haught Client Services Director

: : Will Meachum Business Development

214-354-6820 C

214-855-2951 O

214-855-2959 O

214-540-0524 O

jp@PiersonRetailAdvisors.com

214-208-4545 C

Debora@PiersonRetailAdvisors.com

Will@PiersonRetailAdvisors.com

Beth@PiersonRetailAdvisors.com

: : Ron Sweedyk

: : Nicole Maser

Financial Analyst 214-855-2954 O Ron@PiersonRetailAdvisors.com

Senior Analyst

: : Reena Rana

Graphic Designer

: : Kasey Haught Comps Analyst

214-855-2954 O

214-855-2954 O

214-855-2954 O

Nicole@PiersonRetailAdvisors.com

Reena@PiersonRetailAdvisors.com

Kasey@PiersonRetailAdvisors.com

Retail Investment Sales This is a confidential Offering Memorandum has been prepared by Pierson Retail Advisors, Inc. and is intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property.

This Offering Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the owner of the Property (the “Owner”), to be all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and Pierson Retail Advisors, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. In this Offering Memorandum, certain documents, including leases and other materials, are described in summary form.

These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Offering Memorandum in any manner.

Neither the Owner or Pierson Retail Advisors, Inc, nor any representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property.

C a p i t a lCM a irtkael t s t sPt rmoepnetr tP i er so p e r t i e s ap M a| rIknevtess t|mI e nn ve

The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/ or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived.

By receipt of this Offering Memorandum, you agree that this Offering Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Offering Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or Pierson Retail Advisors, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or Pierson Retail Advisors, Inc. If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to Pierson Retail Advisors, Inc. © 2016 Pierson Retail Advisors, Inc. The information contained in this document has been obtained from sources believed reliable. While Pierson Retail Advisors, Inc. does not doubt its accuracy, Pierson Retail Advisors, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.