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OFFERING MEMORANDUM

Armory Plaza1311 ARMORY DRIVE, FRANKLIN, VA 23851

Senior Vice PresidentRetail Sales & [email protected]

Vice PresidentInvestment [email protected]

GEORGE FOX

INVESTMENT ADVISORS

JASON OLIVER, CCIM

TABLE OF CONTENTS

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Executive Summary

Location

Financials

Site Plan

Rent Roll

Demographics

Competition Map

Market Overview

Offering Memorandum 3

Divaris Real Estate, Inc. is pleased to exclusively offer for sale the fee simple interest in Armory Plaza, a 71,985 square foot neighborhood shopping center located in Franklin, Virginia.

The Property is currently 63% leased, with tremendous value creation potential through the lease up of 26,953 square feet of vacant space. Two of the center’s most longstanding tenants, Franklin Bowling

(27,300 sf, exp. July ‘28) and BMA Dialysis (4,800 sf, exp. June ‘23) provide stable cash flow, accounting for over $105,000 in rental income. Franklin Bowling, a mainstay in the local community, has been a tenant at Armory Plaza for over 20 years. BMA Dialysis, a major provider of dialysis services with over 16,000 employees nationwide, has been in the center for over 18 years.

EXECUTIVE SUMMARY1311 ARMORY DRIVE, FRANKLIN, VA 23851

PROPERTY OVERVIEWOffering Price $1,800,000Size 71,985 SFPrice per SF $25.00Year 1 NOI $180,861Cap Rate 10.05%Land Area 7.357 AcresOccupancy 62.55%Year Built 1989Zoning B-3 General BusinessParking 455 SpacesRoof Steel joist, pandecking and tar/gravelWall Height 12’ - 20’

HIGHLIGHTS c Immediate opportunity to increase NOI by leasing 8 suites

totaling 26,953 sf

c Vacancy factor significantly above competing centers in the retail corridor.

c Neighboring retailers include Wal-Mart, Lowe’s, Food Lion, Belk, and Tractor Supply

c Long term historical occupancy by anchor and existing small shop tenants.


The Property is strategically located in the central retail corridor of the Franklin submarket, and the tenant lineup is composed of a well balanced mix of local, regional, and national retailers and medical users. The Property greatly benefits from the traffic counts along the highly traveled Armory Drive and enjoys excellent ingress/egress from the lighted intersection.

LOCATION


Armory PlazaFranklin,VA

SUMMARY OF FINANCIAL ASSUMPTIONS

GLOBAL SECOND GENERATION LEASING

Analysis Period 75%Commencement DateEnd Date 5 YearsTerm

January 1, 2020 December 31, 2030

10 Years 3 Month(s)

Area Measures $10.00 PSFBuilding Square Footage (RSF) 71,985 SF

Vacancy and Credit Loss $7.50 PSF$6.50 PSF$4.50 PSF

0.00% Annually

REVENUES

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Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11For the Years Ending Dec-2020 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025 Dec-2026 Dec-2027 Dec-2028 Dec-2029 Dec-2030 Total

Rental Revenue Potential Base Rent 452,738 440,788 429,672 434,775 447,374 461,898 470,972 481,161 518,136 564,156 581,081 5,282,749 Absorption & Turnover Vacancy -185,715 -147,946 -107,732 -47,153 0 -4,416 -45,043 -10,147 -76,470 0 0 -624,621 Free Rent -4,000 -40,797 -9,163 -36,669 0 0 -42,790 -12,707 -46,516 -34,447 0 -227,088 Scheduled Base Rent 263,023 252,046 312,777 350,953 447,374 457,481 383,139 458,307 395,150 529,709 581,081 4,431,040Total Rental Revenue 263,023 252,046 312,777 350,953 447,374 457,481 383,139 458,307 395,150 529,709 581,081 4,431,040

Other Tenant Revenue Total Expense Recoveries 30,798 40,313 49,546 68,563 85,252 86,588 80,181 89,989 83,190 96,529 98,992 809,939Total Other Tenant Revenue 30,798 40,313 49,546 68,563 85,252 86,588 80,181 89,989 83,190 96,529 98,992 809,939

Total Tenant Revenue 293,821 292,359 362,323 419,516 532,626 544,069 463,319 548,296 478,340 626,238 680,072 5,240,979

Other Revenue Storage Income 1,100 1,133 1,167 1,202 1,238 1,275 1,313 1,353 1,393 1,435 1,478 14,089Total Other Revenue 1,100 1,133 1,167 1,202 1,238 1,275 1,313 1,353 1,393 1,435 1,478 14,089

Potential Gross Revenue 294,921 293,492 363,490 420,718 533,864 545,344 464,633 549,649 479,734 627,673 681,550 5,255,067

Vacancy & Credit Loss Vacancy Allowance 0 0 0 -7,737 -37,370 -34,067 -5,488 -29,039 -8,771 -43,937 -47,709 -214,118Total Vacancy & Credit Loss 0 0 0 -7,737 -37,370 -34,067 -5,488 -29,039 -8,771 -43,937 -47,709 -214,118

Effective Gross Revenue 294,921 293,492 363,490 412,981 496,493 511,277 459,145 520,610 470,962 583,736 633,842 5,040,950

Operating Expenses Postage 60 62 64 66 68 70 72 74 76 78 81 768 MGMT Fee 20,400 20,400 20,400 20,400 20,400 20,400 20,400 20,400 20,400 20,400 20,400 224,400 Property Insurance 17,387 17,909 18,446 18,999 19,569 20,156 20,761 21,384 22,025 22,686 23,367 222,689

CASH FLOW


Liability Insurance 2,650 2,730 2,812 2,896 2,983 3,073 3,165 3,260 3,357 3,458 3,562 33,946 Fire-Life Safety 675 695 716 738 760 783 806 830 855 881 907 8,645 Landscaping - Contract 9,600 9,888 10,185 10,490 10,805 11,129 11,463 11,807 12,161 12,526 12,902 122,955 Landscaping - Supplies 3,785 3,899 4,016 4,136 4,260 4,388 4,519 4,655 4,795 4,939 5,087 48,478 Parking Lot Cleaning 8,892 9,159 9,434 9,717 10,008 10,308 10,618 10,936 11,264 11,602 11,950 113,887 Electrical R&M 500 515 530 546 563 580 597 615 633 652 672 6,404 Building Exterior 2,200 2,266 2,334 2,404 2,476 2,550 2,627 2,706 2,787 2,871 2,957 28,177 HVAC R&M (Non-CAM) 1,500 1,545 1,591 1,639 1,688 1,739 1,791 1,845 1,900 1,957 2,016 19,212 Roof Repairs 9,600 9,888 10,185 10,490 10,805 11,129 11,463 11,807 12,161 12,526 12,902 122,955 Parking Lot Repair & Striping 2,700 2,781 2,864 2,950 3,039 3,130 3,224 3,321 3,420 3,523 3,629 34,581 Snow Removal 1,200 1,236 1,273 1,311 1,351 1,391 1,433 1,476 1,520 1,566 1,613 15,369 Real Estate Taxes 19,999 20,599 21,217 21,853 22,509 23,184 23,879 24,596 25,334 26,094 26,877 256,139 Electric 11,280 11,618 11,967 12,326 12,696 13,077 13,469 13,873 14,289 14,718 15,159 144,472 Electric (Non-CAM) 780 803 828 852 878 904 931 959 988 1,018 1,048 9,990 Water & Sewer 852 878 904 931 959 988 1,017 1,048 1,079 1,112 1,145 10,912Total Operating Expenses 114,060 116,870 119,764 122,745 125,815 128,978 132,235 135,590 139,046 142,605 146,271 1,423,979

Net Operating Income 180,861 176,622 243,726 290,236 370,678 382,300 326,910 385,020 331,916 441,131 487,571 3,616,970

Leasing Costs Tenant Improvements 16,000 111,580 19,096 187,435 0 0 60,097 11,684 136,979 15,657 0 558,528 Leasing Commissions 4,857 39,887 7,579 38,725 0 0 37,030 8,281 47,361 10,883 0 194,603 Total Leasing Costs 20,857 151,467 26,676 226,160 0 0 97,127 19,965 184,340 26,540 0 753,131

Capital Expenditures Capital Reserves 17,996 18,536 19,092 19,665 20,255 20,863 21,488 22,133 22,797 23,481 24,185 230,492 Total Capital Expenditures 17,996 18,536 19,092 19,665 20,255 20,863 21,488 22,133 22,797 23,481 24,185 230,492

Total Leasing & Capital Costs 38,853 170,003 45,768 245,825 20,255 20,863 118,615 42,098 207,137 50,021 24,185 983,624

Cash Flow Before Debt Service 142,008 6,619 197,958 44,411 350,423 361,437 208,295 342,922 124,779 391,110 463,385 2,633,347

Cash Flow Available for Distribution 142,008 6,619 197,958 44,411 350,423 463,385 2,633,347361,437 208,295 342,922 124,779 391,110

CASH FLOW (continued from last page)


Armory PlazaFranklin,VA

y

TotalPOTENTIAL GROSS REVENUE

Total Scheduled Base Rental Revenue $263,023Total Base Rental Abatement $0

Total Expense Reimbursement Revenue $30,798Total Other Income $1,100

EFFECTIVE GROSS REVENUE $$229944,,992211

Operating Expenses($9,600)($3,785)($8,892)

($1,200)($675)

($6,900)($9,600)($11,280)

($852)($60)

($20,400)($19,999)

Landscaping Contract Landscaping Supplies Parking Lot Sweeping Snow Removal Security - Sprinkler System R&M General Roof R&MElectricityElectricity (Non-CAM)Water/Sewer - Utility Admin Expenses Management Fee Property Taxes Property Insurance ($17,387)

Total Operating Expenses ($114,060)

NET OPERATING INCOME $$118800,,886611

PROJECTED IN-PLACE NET OPERATING INCOME

FOR PERIOD OF March 2018-February 2019

This page is part of a package and is subject to the disclaimer on the Executive Summary.CB Richard Ellis Financial Consulting Group

3/7/2018 9:04 AM4

($780)

2020 PROJECTED IN-PLACE NOI


1

2

3

6

87 11 12 13 1415

18 19 20 24

SITE PLAN


# Tenant Type Area Lease End

Term (Months)

Rent Per Month

AnnualRent

AnnualRec.

1 Subway R.E. Corp #3584 NNN 1,600 sf 04/30/2022 180 $2,948.00 $35,376.00 $2,791.00

2 Great Wall China NNN 1,355 sf 02/28/2021 162 $2,110.41 $25,324.92 $2,307.00

6 Franklin Bowling Gross 27,300 sf 07/31/2028 244 $5,000.00 $60,000.00 $0.00

8-10 Bio Medical Applications of VA NNN 4,800 sf 06/30/2023 216 $3,812.00 $45,744.00 $8,171.00

14 Mid Atlantic Dairy Queen LLC NNN 1,800 sf 11/30/2020 193 $1,525.00 $18,300.00 $2,727.00

18 Red Fish NNN 1,777 sf 03/31/2021 37 $2,783.97 $33,407.64 $3,173.21

20-23 Peninsula Institute for Com. Health NNN 6,400 sf 04/30/2021 65 $3,733.33 $44,799.96 $10,932.00

3-5 VACANT 4,800 sf 0 $0.00 $0.00 $0.00

7 VACANT 1,600 sf 0 $0.00 $0.00 $0.00

11 VACANT 1,600 sf 0 $0.00 $0.00 $0.00

12 VACANT 1,600 sf 0 $0.00 $0.00 $0.00

13 VACANT 1,400 sf 0 $0.00 $0.00 $0.00

15-17 VACANT 5,300 sf 0 $0.00 $0.00 $0.00

19 VACANT 1,423 sf 0 $0.00 $0.00 $0.00

24 VACANT 9,230 sf 0 $0.00 $0.00 $0.00

TOTAL 71,985 sf 21,912.71 $262,952.52 $29,513.85

RENT ROLL ARMORY PLAZA


DEMOGRAPHIC PROFILE AND STATISTICS

Radius Population Households Median AgeAverage

HH Income

10 Min 9,675 3,877 41.3 $66,234

15 Min 15,646 6,263 43.3 $70,192

20 Min 21,590 8,580 44.0 $71,061


COMPETITION MAP

MARKET OVERVIEWHampton Roads/Franklin

Hampton Roads is the 37th largest market in the United States.

The region is characterized by the Norfolk Naval Base, the world’s

largest; the Virginia Beach Oceanfront; Huntington Ingalls Industries

(Newport News Shipbuilding), Virginia’s largest private employer;

NASA Langley and Langley Air Force Base in Hampton; and the

historic triangle of Jamestown, Yorktown, and Colonial Williamsburg.

Projections show the population in Hampton Roads is expected to

remain stable over the next five years. Tourism adds another 15

million visitors to the population in the summer spending well over

$5 billion in expenditures which generates $415 million in state

and local taxes. The combination of high average family income

(approximately $90,000), a young median age of 36.7 years, and an

average of 2.55 persons-per-household provides the region with a

strong retail base.

Location and TransportationFranklin is a one hour drive to Norfolk International Airport, which

offers 2,000+ monthly departures and serves approximately 3.66

million passengers annually. The city is well positioned along US-

58, allowing access to I-85, I-95 and the I-64 region and beyond.

Interstate 64 extends to Richmond, while the Chesapeake Bay Bridge

Tunnel, I-85 and I-95 connect Hampton Roads to the Northeast and


Southeast markets. Virginia has one of the finest highway systems in the

U.S. The constantly expanding and upgrading network of highways in

Hampton Roads totals more than 120 miles and the average commute

time is under 25 minutes. Two dozen bridges and the Chesapeake

Bay Bridge-Tunnel and Hampton Roads Bridge-Tunnel are in the

process of expanding and upgrading over and under the waterways of

Hampton Roads to ensure the shortest possible travel time. Most of

the construction will occur by 2025.

Economy and BusinessHampton Roads has a vibrant and diverse economy whose different

elements provide stability during national economic slowdowns and

genuine opportunities during expansions. Major employers include

Sentara Healthcare, STIHL Incorporated, GEICO, Amerigroup, and

Navy Exchange Service Command. The region’s military bases employ

165,227 active duty and civilian personnel.

The cost of living in the region is much lower than that of the nearby Mid-Atlantic city of Washington, D.C., and the Northeastern cities of

Philadelphia and New York. In addition, the cost of groceries, transportation and housing are below the national average. At only $.99 per

$100 of assessed value, the real estate tax in Franklin is among the lowest in the region.

Franklin City has over 1.5 million square feet of retail space, mostly in neighborhood centers (629,483 square feet) and general or

freestanding retail (876,701 square feet). The average market rent in Franklin ranges from $12.19/sf for Neighborhood Centers to $10.24/

sf for strip centers. The vacancy rate for retail in Franklin City is 8.9 percent. Southampton Memorial Hospital is the city’s largest employer.


The City of FranklinThe population in Franklin/Southampton County exceeds 26,700.

The City of Franklin sits 40 miles west of Norfolk and nine miles

north of the North Carolina border. Within an hour’s drive to the

east is Virginia Beach’s famous oceanfront resort area. An hour the

northwest is the state capitol of Richmond. An hour to the south is

the fishing and resort area on the Outer Banks of North Carolina.

An hour to the north is the famous Colonial Williamsburg. Franklin

is only four hours from Washington, DC.

The City, at the head of the navigable portion of the Blackwater

River, lies in the highly agricultural Coastal Plain. Situated on the

eastern edge of Southampton County, adjacent to Isle of Wight

County, it has always been a center of trade and transportation for

the surrounding countryside. Water transportation has played a

large part in Franklin’s development. Franklin has also become an

important rail point between the City of Norfolk and the Western

Roanoke Basin.

The City serves as the major retail, wholesale, service trades and

marketing center for the surrounding area and as a manufacturing

center for native forest projects. There is a wide array of commercial

establishments in Franklin including contractors, clothing, grocery,

furniture/appliance, hardware, and jewelry stores, restaurants,

car dealers, florists and beauty salons. Recreational opportunities

are plentiful in the city. A full-service YMCA, The Cypress Cove

Country Club, and 11 recreational areas for football, basketball,

soccer, softball, bowling and tennis.


Senior Vice PresidentRetail Sales & [email protected]

Vice PresidentInvestment [email protected]

GEORGE FOX

INVESTMENT ADVISORS

JASON OLIVER, CCIM

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