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Flowers Foods3800 S County Rd 1276, Midland, TX 79706

OFFERING MEMORANDUM

CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Flowers Foods located at 3800 S County Rd 1276, Midland, TX 79706 (“Property”) . I t has been prepared by Matthews Retai l Advisors . This Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property. I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Retai l Advisors . The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the Property, you agree:

1 . The Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion or manner detr imental to the interest of the Sel ler.

Owner and Matthews Retai l Advisors expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Offer ing Memorandum.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Retai l Advisors or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Offer ing Memorandum.

PRICING AND FINANCIAL ANALYSISInvestment Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Financial Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Company Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

PROPERTY DESCRIPTIONProperty Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Bird’s Eye . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Tenant Map - Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Tenant Map - Industrial Companies . . . . . . . . . . . . . . . . . . . . . 9Regional Map. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

DEMOGRAPHICSDemographics Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12City Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

TABLE OF CONTENTS

PRESENTED BY

Kyle Matthews Broker of Record

License No. 678067

Josh BishopVP & Director

License No. 01940394O 310.919.5823M 315.730.6228josh.bishop@matthews.com

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™PRICING AND FINANCIAL ANALYSIS

Investment Highlights

• 15-Year NN+ lease with ± 14 Years Remaining

• Building was renovated for Flowers Foods in 2015

• 1% Annual rent increase during base term & 1.5% annual rent increases during option periods

• Seller will provide buyer with a 10-year roof warranty that will commence at the close of escrow

• Very minimal Landlord responsibility: Landlord responsible for roof and structure only

• Tenant responsible for parking lot, HVAC, CAM, taxes, and insurance

• Subject property is in a major industrial sector of Midland, TX and is 3 miles from Midland International Airport

• Midland is located 20 miles east of Odessa and has an estimated population of 132,950 residents

• Flowers Foods, Inc. has strong investment grade credit, S&P rated BBB- & Moody’s rated Baa2

• The property is 100% leased to Flowers Baking Co. of Tuscaloosa, LLC, a wholly owned subsidiary of Flowers Foods Inc.

• Flowers Foods is the second-largest producer and marketer of packaged bakery foods, serving over 90% of the United States population with baked goods

• Flowers Foods operates over 47 bakeries in 16 states, producing fresh baked products for some of the top brands including Hostess, Nature’s Own, White Wheat, Bunny Bread, Sunbeam, Wonder Bread, Tastykake, Mary Jane, Holsum, Hattie’s and more

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Investment Overview

EXECUTIVE SUMMARY3800 S County Rd 1276 Midland, TX 79706List Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,294,602Gross Leasable Area . . . . . . . . . . . . . . . . . . . . . . . .± 13,581 SFCAP Rate - Current. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50%Year Built / Renovated . . . . . . . . . . . . . . . . . . . . . . . 1983 / 2015Lot Size . . . . . . . . . . . . . . . . . . . . . . . ± 2.33 Acres (101,495 SF)

ANNUALIZED OPERATING DATAMonthly Rent Annual Rent Increases CAP Rate

Current - 11/30/2017 $7,012.43.00 $84,149.16 $6.19 6.50%

Years 3 - 151% Annual Increases

Two (2), Five (5) Year Options

1.5% Annual Increases

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Financial Overview

TENANT SUMMARYTenant Trade Name Flowers Foods

Type of Ownership Fee Simple

Lease Type NN+

Roof and Structure 10 Year Warranty

Original Lease Term 15 Years

Rent Commencement Date 11/5/2015

Lease Expiration Date 11/30/2030

Term Remaining on Lease ± 14.00 Years

Increases1% Annual Increases in the Base Term; 1.5% Annual

Increases in Options

Options Two (2), Five (5) Year Options

Property Name Flowers Foods

Property Type Net Leased Distribution Center

Parent Company Trade Name Flowers Foods, Inc. (NYSE: FLO)

Ownership Public

Credit Rating (S&P) BBB-

Revenue $3.77 B

Net Income $189 M

No. of Locations ± 46

No. of Employees ± 10,900

Headquartered Thomasville, Georgia

Website www.flowersfoods.com

Year Founded 1919

TENANT OVERVIEWAs one of the largest wholesale bakeries in the US, Flowers Foods’ flour products business is flourishing. Flowers Foods bakes, markets, and distributes fresh breads, buns, rolls, corn and flour tortillas, and sweet bakery goodies to retail food and foodservice customers in the western, southern, and northeastern US. The company’s brand names include Cobblestone Mill, Nature’s Own, Tastykake, and Whitewheat. Flowers Foods makes snack cakes, pastries, donuts, and frozen bread products for retail, vending, and co-pack customers nationwide. It also rolls out hamburger buns for national fast-food chains. Flowers Foods bought several bread brands, including Wonder, and about 20 bakeries from Hostess Brands.

GEOGRAPHIC OUTREACH

Flowers Foods operates in 18 states in US Southeast, Mid-Atlantic, New England, Southwest, California and select markets in Nevada, the Midwest, and the Pacific Northwest.

STRATEGY

The company focuses on developing new and core markets through new customers, new products, strong brands, and acquisitions. From its stronghold in the Southeast, Flowers Foods has been expanding its retail and wholesale reach, moving north and west Flowers Foods in 2014 opened the Knoxville, Tennessee plant that was acquired as a part of the Hostess Brands deal in 2013. Acquisitive Flowers Foods purchases other businesses to grow and enter new markets. The company has completed more than 100 acquisitions during the past 40 years.

SALES & MARKETING

As a leading US baker, the company’s products are available to consumers through traditional supermarkets and their in-store deli/bakeries, food service distributors, convenience stores, mass merchandisers, club stores, wholesalers, casual dining and quick-serve restaurants, schools, hospitals, dollar stores, and vending machines. Flowers Foods’ direct-store-delivery system is comprised of 5,100 independent distributors who own the rights to distribute certain brands of the company’s fresh packaged bakery foods in their geographic territories. Also, Flowers Foods has about 600 company-owned distributors and distributorships available for sale. The warehouse segment’s fresh snack cakes and frozen breads and rolls are sold nationally direct to customers’ warehouses by frozen and non-frozen contract carriers.

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Company Overview

™PROPERTY DESCRIPTION

THE OFFERINGProperty Name . . . . . . . . . . . . . . . . . . . . . . . . . Flowers FoodsProperty Address . . . . . . . . . . . . . . . . . . 3800 S County Rd 1276 Midland, TX 79706Assessor’s Parcel Number . . . . . . . . . . . . . . . 0049800.003.0050Zoning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-3

SITE DESCRIPTIONNumber of Stories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OneYear Built . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1983Gross Leasable Area (GLA) . . . . . . . . . . . . . . . . . . . . ± 13,581 SFLot Size . . . . . . . . . . . . . . . . . . . . . . . ± 2.33 Acres (101,495 SF)Type of Ownership. . . . . . . . . . . . . . . . . . . . . . . . . Fee SimpleLandscaping . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProfessionalTopography. . . . . . . . . . . . . . . . . . . . . . . . . . . Generally Level

CONSTRUCTIONFoundation . . . . . . . . . . . . . . . . . . . . . . . . . . . .Concrete SlabFraming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SteelExterior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MetalParking Surface . . . . . . . . . . . . . . . . . . . . . . . . . . . . .AsphaltRoof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Pitched

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Property Overview

PROPERTY DESCRIPTION

I-20 Blvd E ± 16,000 ADT

W Industrial Ave

S County Rd 1276

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Bird’s Eye

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Tenant Map - Retail Tenants

PROPERTY DESCRIPTION

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Tenant Map - Industrial Companies

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Regional Map

PROPERTY DESCRIPTION

™DEMOGRAPHICS

Population 3-Mile 5-Mile 10-Mile

2021 Projection 919 7,751 195,982

2016 Estimate 810 6,812 178,938

2010 Census 634 5,281 154,377

2000 Census 420 3,488 133,637

Growth 2016-2021 13.43% 13.79% 9.53%

Growth 2010-2016 27.72% 29.00% 15.91%

Growth 2000-2010 51.13% 51.39% 15.52%

Households

2021 Projection 357 3,148 75,121

2016 Estimate 313 2,760 68,598

2010 Census 242 2,128 59,237

2000 Census 152 1,261 51,885

Growth 2016-2021 14.12% 14.06% 9.51%

Growth 2010-2016 29.43% 29.71% 15.80%

Growth 2000-2010 59.03% 68.69% 14.17%

Income

$0 - $15,000 4.87% 5.46% 5.89%

$15,000 - $24,999 8.75% 7.41% 7.23%

$25,000 - $34,999 8.01% 6.80% 8.06%

$35,000 - $49,999 10.37% 9.13% 12.85%

$50,000 - $74,999 16.95% 16.48% 17.35%

$75,000 - $99,999 14.17% 13.75% 13.39%

$100,000 - $124,999 12.10% 13.36% 11.48%

$125,000 - $149,999 7.63% 7.72% 7.79%

$150,000 - $199,999 7.22% 8.16% 6.72%

$200,000 - $249,999 3.39% 4.05% 3.26%

$250,000 - $499,999 4.67% 5.43% 3.98%

$500,000+ 1.87% 2.24% 2.00%

2016 Est. Average Household Income $101,038 $108,329 $98,433

2016 Est. Median Household Income $76,846 $83,560 $73,013

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Demographics Report

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City Overview

MIDLAND, TEXASAt the midpoint between Dallas and El Paso in the heart of the Permian Basin, Midland is a city that achieves a balance between traditional charm and modern amenities. It is the county seat of Midland County and a commercial center of the region.

With the lowest unemployment rate in the United States, Midland has a community that is active in its economic development. It is this engagement that has ensured continued prosperity for the region. Midland’s economic base is concentrated mainly in the oil and gas industry; however, ranching and agriculture, health care, retirement and transportation contribute to the stability and diversity of the economy.

Largely due to the availability of post-secondary and higher education resources within the Midland area, the community’s work force is well-educated and proactive. Access to this hard-working labor pool is essential in a competitive global environment, giving the surrounding businesses an advantage. The University of Texas Permian Basin campus brings 3,500 students to the area in addition to a health science center run by Texas Tech.

Health care services have continued to expand to meet the needs of the growing populace, which has exceeded 100,000. Community support has enabled Midland to offer medical services rivaling those in the largest cities.

A low cost of living, affordable housing and award winning health care services have made Midland an ideal home for families and retirees. Oil money brought an attractive skyscraper-centered downtown, which is teeming with cultural and recreational opportunities from unique museums and delicious food to exciting music and nightlife.

TOP EMPLOYERS - MIDLAND, TEXAS1. Midland Independent School District

2. Dawson Geophysical

3. Midland Memorial Hospital and Medical Center

4. Walmart

5. City of Midland

841 Apollo Street, Suite 150 | El Segundo, CA 90245 | www.matthews.com™

Flowers Foods3800 S County Rd 1276, Midland, TX 79706

OFFERING MEMORANDUM

Kyle Matthews Broker of Record

License No. 678067

Josh BishopVP & Director

License No. 01940394O 310.919.5823M 315.730.6228josh.bishop@matthews.com