offering memorandum cbre capital markets walnut …€¦ · ice cream shops serve as places where...

OFFER ING MEMORANDUM

C B R E C A P I TA L M A R K E T S

668 S . WALNUT AVENUE | NEW BRAUNFELS , TX 78130

WA L N U T S Q UA R E

668 S. WALNUT AVENUE | NEW BRAUNFELS, TX 78130

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NET OPERATING INCOME $1,076,584

PRICE PER SQ FT $144.84

GROSS LEASABLE AREA 86,303 SF

OCCUPANCY 92.39%

LAND AREA 11.93 ACRES

YEAR BUILT 1974/1985/1996

OFFERING SUMMARY

$Offering Price:$12,500,000

%Cap Rate:

8.61%

EXCLUSIVE MARKETING ADVISORS: M ICHAEL AUSTRYVICE PRES IDENT+1 214 252 1115michae l .aus t r y@cbre . com

JARED AUBREYSENIOR V ICE PRES IDENT+1 214 252 1031ja red .aub rey@cbre . com


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+ New Braunfels is One of the Fastest Growing Cities in the US – Ranked as the second fastest growing City in the Nation, Comal County and New Braunfels are experiencing an unprecedented growth rate – growing at an average of 4% per year, a 58% increase in the last decade.

+ Complementary Mix of “Internet-Resistant” Tenants - The center has retail, medical, restaurant and service tenants creating a diverse, balanced mix of tenants that are affected less by the internet’s impact on the retail market.

+ Stabilized Center with Staggered Lease Rollovers – Opportunity for an investor to acquire a 90% occupied center with staggered lease expirations, reducing investor risk.

+ Shadowed Anchored by a Brand New At Home Superstore – Completely remodeled to fit their requirement and prototype.

+ Excellent Access, Huge Traffic Counts & Highway Visibility – Multiple ingress/egress points with direct access and visibility to Interstate 35 with over 104,000 vehicles per day.

+ Densely Developed Residential Market with Strong Demographics - There are over 210,000 residents within a seven mile radius of the location and an average household income exceeding $82,000, considerably higher than the national average.

+ Texas has No State Income Tax.

+ Strategic Location with Booming Tourist Activity - Almost equal distance between the seventh largest city in the U.S. (San Antonio) and the State Capital (Austin), New Braunfels has easy access to major highways with IH-35 running through the city’s center, a major NAFTA artery New Braunfels is expected to keep pace with in the next 10-15 years. Each year, more than 3-million visitors come to New Braunfels to explore the shopping and recreational activities steeped in German culture and heritage.

+ Located in a Dense Major Retail Corridor Across from a Strong Performing H-E-B with Reported sales in excess of $80 million* - Retailers in the immediate area include H-E-B, Wal-Mart, Lowe’s, PetsMart, at Home, Chick-fil-A, McDonald’s, Walgreens, Taco Bell, Verizon, Mattress Firm and many more.(©2017 CBRE. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. 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. Source:Infogroup.)

INVESTMENT HIGHLIGHTS


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TENANTS SQUAREFEET GLA %

LEASECOMMENCEMENT

LEASEEXPIRATION

ANNUAL BASERENT TOTAL

LEASETYPE

FRED LOYA INSURANCE 1,500 1.74% DECEMBER 2010 NOVEMBER 2020 $37,500 NNN

WINGSTOP 1,760 2.04% JUNE 2011 JUNE 2021 $44,000 NNN

CHECK’N’GO 1,000 1.16% SEPTEMBER 2003 SEPTEMBER 2019 $22,285 NNN

BOOST MOBILE 1,250 1.45% OCTOBER 2017 DECEMBER 2022 $23,750 NNN

SHIPLEY’S DONUTS 1,250 1.45% OCTOBER 2003 SEPTEMBER 2018 $30,000 NNN

TITLEMAX 1,500 1.74% JANUARY 2014 JANUARY 2019 $30,000 NNN

PAYLESS SHOESOURCE 5,500 6.37% MARCH 2006 FEBRUARY 2020 $57,750 NNN

URBAN AIR ADVENTURE PARK 31,422 36.41% MARCH 2018 APRIL 2028 $282,798 NNN

BONZAI SUSHI & SAKE 5,280 6.12% FEBRUARY 2012 FEBRUARY 2022 $101,640 NNN

BASKIN ROBBINS 1,260 1.46% OCTOBER 2011 JULY 2022 $30,555 NNN

TGF HAIRCUTTERS 1,260 1.46% APRIL 2008 MARCH 2023 $29,925 NNN

PAPA MURPHY’S PIZZA 1,260 1.46% JANUARY 2008 JANUARY 2023 $29,925 NNN

DOLLAR TREE 9,680 11.22% JULY 2001 JULY 2026 $113,740 NNN

TENANT ROSTER


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TENANT ROSTER

TENANTS SQUAREFEET GLA %

LEASECOMMENCEMENT

LEASEEXPIRATION

ANNUAL BASERENT TOTAL

LEASETYPE

AFFORDABLE DENTURES 4,920 5.70% APRIL 2012 APRIL 2022 $73,505 NNN

HEALTH TEXAS 3,370 3.90% JANUARY 2016 JANUARY 2021 $87,620 NNN

MASTER TAILOR 830 0.96% OCTOBER 2008 SEPTEMBER 2018 $17,430 NNN

US NAILS 2,000 2.32% MAY 2010 APRIL 2020 $27,000 NNN

MAGNOLIA DRY CLEANERS 2,500 2.60% JUNE 2003 MAY 2026 $48,750 NNN

UNCONVENTIONAL PERFORMANCE 2,194 2.54% AUGUST 2018 JULY 2021 $26,328 NNN

AVAILABLE 6,567 7.61% - - - -

TOTAL VACANT 6,567 SF 7.61%

TOTAL OCCUPIED 79,736 SF 92.39%

TOTAL 86,303 SF 100.00%


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PROPERTY AERIAL


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PROPERTY AERIAL | 2 MILE VIEW


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PROPERTY AERIAL | 1/2 MILE VIEW


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PROPERTY OBLIQUE AERIAL | SOUTHWEST VIEW


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PROPERTY OBLIQUE AERIAL | EAST VIEW


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PROPERTY SURVEY


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KEY TENANT INFORMATION

TYPE Franchise

YEARS IN BUSINESS 72

NO. OF LOCATIONS 7,300+

HEADQUARTERS Canton, MA

WEBSITE www.baskinrobbins.com

SQUARE FOOTAGE 1,260 SF

% OF CENTER 1.31%

Baskin-Robbins is the world’s largest chain of ice cream specialty shop restaurants. The brand was founded by two ice cream enthusiasts whose passion for ice cream led to the creation of many iconic ice cream flavors including Pralines ‘n Cream, Jamoca® Almond Fudge and Very Berry Strawberry. Today, Baskin-Robbins has more than 1,300 ice creams in its flavor library, and also offers custom ice cream cakes, frozen beverages and the Polar Pizza™ Ice Cream Treat. Its franchised ice cream shops serve as places where people can connect and create special memories while they explore a wide array of flavors, including a new Flavor of the Month every month.

TYPE Private


NO. OF LOCATIONS 1

HEADQUARTERS New Braunfels, TX

WEBSITE www.bonzainewbraunfels.com


% OF CENTER 5.49%

Bonzai offers a wide variety of sushi dishes that include sashimi, nigiri, maki rolls and our already famous in-house Specialty roll. The combination of the entertaining hibachi chefs and mouthwatering sushi is guaranteed not to leave any customer wanting. The bar offers a great selection of premium sakes and imported Asian beers along with an excellent list of top-shelf liquors.


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TYPE Public


NO. OF LOCATIONS 13,600

HEADQUARTERS Chesapeake, VA

WEBSITE www.dollartree.com


% OF CENTER 10.07%

Dollar Tree, Inc. is an American chain of discount variety stores that sells items for $1 or less. Dollar Tree competes in the dollar store and low-end retail markets. Each Dollar Tree stocks a variety of products including national, regional, and private-label brands. Departments found in a Dollar Tree store include health and beauty, food and snacks, party, seasonal décor, housewares, glassware, dinnerware, household cleaning supplies, candy, toys, gifts, gift bags and wrap, stationery, craft supplies, teaching supplies, automotive, electronics, pet supplies, and books. Most Dollar Tree stores also sell frozen foods and dairy items such as milk, eggs, pizza, ice cream, frozen dinners, and pre-made baked goods.

TYPE Private


NO. OF LOCATIONS 700+

HEADQUARTERS El Paso, TX

WEBSITE www.fredloya.com


% OF CENTER 1.56%

Fred Loya Insurance is a Texas based Hispanic 500 car insurance company. Fred Loya is committed to providing fast, dependable service and competitive rates for general auto insurance. At Loya Insurance Group, there are over 200 adjusters who handle all claims for the company, over 100 staff appraisers distributed throughout service areas to provide customers and claimants local customer service.


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TYPE Franchise


NO. OF LOCATIONS 1,500+

HEADQUARTERS Vancouver, WA

WEBSITE www.papamurphys.com


% OF CENTER 1.31%

Papa Murphy’s is a take-and-bake pizza company. and is the fifth largest pizza chain in the United States. Orders are available by walk-in, order online, or call-in. Some stores have a drive-thru window where customers can pick up call-in orders. Unlike regular pizza establishments, the pizza is made at the store but is not baked there. Instead, consumers bake the pizzas at their homes. Papa Murphy’s also offers salads, chocolate chip cookie dough, cheesy bread, cinnamon wheels, smores dessert pizzas, and soft drinks in various sizes.

TYPE Private



HEADQUARTERS Topeka, KS

WEBSITE www.payless.com


% OF CENTER 5.72%

Payless ShoeSource is the largest specialty family footwear retailer in the Western Hemisphere, offering a trend-right and comprehensive range of everyday and special occasion shoes and accessory items at affordable prices for every member of the family. The company’s mission is simple: To be the Go To, Get More, Pay Less shoe store for our target customers. Payless offers various styles of footwear for women, men, and children as well as accessories.


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TYPE Franchise


NO. OF LOCATIONS 300+

HEADQUARTERS Houston, TX

WEBSITE www.shipleydonuts.com


% OF CENTER 1.30%

Shipley Do-Nuts is an American doughnut chain offering over 60 varieties of donuts. Shipley Do-Nuts strives to delight customers of all ages by delivering the finest Do-Nuts and kolaches in the business. Shipley Do-Nuts is a gourmet product made fresh daily. The company offers excellent customer service, clean stores and friendly employees.

TYPE Private



HEADQUARTERS Dallas, TX

WEBSITE www.titlemax.com


% OF CENTER 1.56%

TitleMax is a title lending business serving individuals who generally have limited access to consumer credit from banks, thrift instituions, credit card lenders an dother traditional sources of consumer credit. TitleMax offers title loan and title pawn products which allows customers to meet their liquidity needs by borrowing against the value of their vehicles while retaining use of their vehicle during the term of the loan.


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TYPE Franchise



HEADQUARTERS Dallas, TX

WEBSITE www.wingstop.com


% OF CENTER 1.83%

Wingstop is a chain of nostalgic, aviation-themed restaurants where the sole focus is on chicken wings. Wingstop locations are decorated following a 1930s and 1940s “pre-jet” aviation theme. Wingstop Inc. is the destination when you crave fresh never faked wings, hand-cut seasoned fries and any of our famous sides. For people who demand flavor in everything they do, there’s only Wingstop Inc. – because it’s more than a meal, it’s a flavor experience. The menu consists of wings, boneless wings, and chicken strips. The sides include vegetable sticks, fresh-baked yeast rolls, coleslaw, potato salad, baked beans, and fries. Dips are ranch, blue cheese, hot cheddar cheese sauce, honey mustard, and the sauces for the flavors.

TYPE Franchise

YEARS IN BUSINESS 5

NO. OF LOCATIONS 89

HEADQUARTERS Grapevine, TX

WEBSITE www.urbanairtrampolinepark.com


% OF CENTER 36.41%

Urban Air is an Adventure Park offering safe, fun, clean and affordable attractions to a wide range of customers.

Urban Air Trampoline Parks are suitable for all ages and fitness levels and offer guests a wide variety of physical activities across its wall-to-wall trampoline arenas, trampoline runway, foam pit, slam dunk track, and trampoline dodgeball arena.

Take your next birthday party to new heights at a kids birthday party place that defies gravity. Parties at Urban Air are perfect for kids of any age!



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EXECUTIVE SUMMARY

PROPERTY DESCRIPTION

Property Type Retail Size of Improvements 86,303 SFCurrently Vacant as of 8/1/18 6,567 SF

Property Address 604 S Walnut Ave Projected Occupancy as of 8/1/18 92.39%New Braunfels, TX Weighted Average Remaining Lease Term (in Years) 6.28

Net Operating Income CAGR 2.56%

ACQUISITION AND RESIDUAL SUMMARY LEVERAGE SUMMARY [1]

MARKET LOANPurchase Pr ice as of August 1, 2018 $145 PSF $12,500,000 Initial Loan Funding (as of Aug-18) $8,125,000

In-Place Cap Rate 8.61% Loan-To-Value Ratio (Initial Funding) 65.00%In-Place NOI $1,076,584 Funding Date Aug-18

Maturity Date Jul-28Year 1 Year 2 Year 3 Remaining Loan Term During Analysis 10.0 Years

Capitalization Rate 8.51% 9.29% 9.45% Amortization Period 30 YearsCash Return 8.21% 7.75% 9.06% Initial Interest Only Period (If Any) -Leveraged Cash Return 11.95% 10.65% 14.33% Interest Rate 4.50%

Loan Constant 6.08%3-Year 5-Year 7-Year Origination Fee on Initial Loan Funding 1.00%

Average Capitalization Rate 9.08% 9.32% 9.52%Average Cash Return 8.34% 8.73% 8.94% Debt Service Coverage Ratio (NOI) 2.15xAverage Leveraged Cash Return 12.31% 13.39% 13.98% Debt Service Coverage Ratio (CF) 2.08x

Net Residual Value as of July 31, 2028 $15,684,000 Purchase Price as of August 1, 2018 $12,500,000Net Residual Per Square Foot $182 Total Initial Loan Principal (8,125,000)Residual Capitalization Rate 8.82% Total Initial Loan Fees 81,250Residual Cost of Sale 2.00% Initial Equity $4,456,250

ALL CASH IRR 10.63% LEVERAGED IRR 18.42%

[1] Leveraged analysis is based on financing that a particular investor may or may not be able to obtain.

© 2012 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee,


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ASSUMPTIONS

GLOBAL VACANT SPACE LEASING SECOND GENERATION LEASING

Analysis Per iod Occupancy and Absorption Anchor ShopCommencement Date Aug 1, 2018 Projected Vacant at 8/1/18 6,567 SF Retention Ratio 75% 75%End Date Jul 31, 2028 Percentage Vacant at 8/1/18 7.61% Financial TermsTerm 10 Years Absorption Period 12 Month(s) 2018 Annual Market Rent $9.00 PSF $11.00-$26.00

Absorption Period Start Date Aug 1, 2018 Rent Adjustment 10% in Month 61 NoneArea Measures First Absorption Occurs On Aug 1, 2019 Lease Term 10 Years 5 Years

Building Square Feet (NRSF) 86,303 SF Last Absorption Occurs On Aug 1, 2019 Expense Reimbursement Type NNN NNN

Growth Rates F inancial Terms Shop Tenanting CostsConsumer Price Index (CPI) 3.00% 2018 Annual Market Rent $15.00 PSF Rent Abatements None NoneOther Income Growth Rate 3.00% Rent Adjustment NoneOperating Expenses 3.00% Lease Term 5 Years Tenant Improvements ($/NRSF)Real Estate Taxes 3.00% Expense Reimbursement Type NNN New $25.00 PSF $15.00 PSFMarket Rent Growth Rent Abatements None Renewal $0.00 PSF $0.00 PSF

CY 2019 - 3.00% Tenant Improvements ($/NRSF) $15.00 PSF Weighted Average $6.25 PSF $3.75 PSFCY 2020 - 3.00% Commissions (Base Rent Only) 6.00%CY 2021 - 3.00% Commissions (Base Rent Only)CY 2022 - 3.00% OPERATING EXPENSES [2] New 6.00% 6.00%CY 2023 - 3.00% Renewal 0.00% 0.00%

CY 2024+ - 3.00% Operating Expense Source 2016 Actuals Grown 6.09% Weighted Average 1.50% 1.50%

General Vacancy Loss 5.00% [1] Management Fee (% of EGR) 4.00% DowntimeNew 12 Month(s) 6 Month(s)

Capital Reserves (CY 2018 Value) $0.20 PSF Real Estate Taxes Reassessed No Weighted Average 3 Month(s) 2 Month(s)

Notes:All market rent rates are stated on calendar-year basis.[1] General Vacancy Loss factor includes losses attributable to projected lease-up, rollover downtime, and fixturing downtime.

The following tenants are excluded from this loss factor for current lease terms only: Urban Air Adventure Park.[2] Miscellaneous Revenue:

a) Analysis includes Signage Revenue of $840 /Yr from Payless ShoeSource and Magnolia Dry Cleaners, assumed to remain flat through the hold period.Operating Expenses:

c) Analysis does not factor in the Texas Margin Tax and assumes a buyer will consult with their tax advisor to evaluate their exposure to this expense.

a) The 2016 Actuals are based on 96,103 SF which includes suites 602 and 690 totaling 9,800 SF. These suites are not part of the transaction. Thus, all operating expenses are reduced by 9,800 / 96,103, or 10.2%, to account for the exclusion of these suites.b) Real Estate Taxes in CY2018 are based on the 2017 value and the 2017 millage rate of 2.185241%, with an increase to parcel #560215000600 to the average assessment of the other parcels on a per sq. ft. basis in order to account for the new Urban Air Adventure Park lease, which was not contemplated in the 2017 assessment. Analysis assumes taxes grow 3% annually beginning in CY2019.


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CASH FLOWFiscal Year Ending - July 31 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Physical Occupancy 91.70% 98.36% 99.06% 99.05% 99.27% 99.31% 97.28% 98.21% 97.91% 98.55% 99.31%

Overall Economic Occupancy [1] 92.83% 96.34% 96.32% 96.31% 96.31% 96.31% 96.31% 96.30% 96.29% 96.28% 96.28%

Weighted Average Market Rent $14.51 $14.95 $15.40 $15.86 $16.34 $16.83 $17.33 $17.85 $18.39 $18.94 $19.51

Weighted Average In P lace Rent [2] $13.96 $14.34 $14.42 $14.77 $14.89 $15.19 $15.67 $15.82 $16.45 $16.98 $17.29

Total Operating Expenses PSF Per Year $4.72 $4.89 $5.03 $5.17 $5.32 $5.47 $5.63 $5.79 $5.97 $6.15 $6.33

[3]FY 2019

REVENUES $/SF/YRScheduled Base Rent

Anchor Gross Potential Rent [4] $3.28 $282,798 $282,798 $282,798 $282,798 $284,212 $289,868 $295,602 $301,573 $307,543 $313,591 $319,876Anchor Absorption & Turnover Vacancy 0.00 0 0 0 0 0 0 0 0 0 0 0Shop Gross Potential Rent 10.84 935,271 954,460 972,508 993,687 1,007,444 1,027,704 1,059,243 1,084,229 1,124,492 1,163,096 1,180,375Shop Absorption & Turnover Vacancy (1.32) (113,630) (19,778) (22,687) (13,844) (16,105) (15,679) (39,523) (44,506) (42,395) (32,902) (18,344)

Total Scheduled Base Rent 12.80 1,104,439 1,217,480 1,232,619 1,262,641 1,275,551 1,301,893 1,315,322 1,341,296 1,389,640 1,443,785 1,481,907

CAM Reimbursement 0.98 84,285 93,575 97,140 100,070 103,460 106,762 107,782 112,249 115,433 119,887 124,641MGT Reimbursement 0.56 48,143 54,637 56,773 57,689 58,952 60,162 60,736 62,777 64,050 66,927 68,724INS Reimbursement 0.30 26,038 28,758 29,839 30,728 31,723 32,688 32,984 34,293 35,213 36,515 37,890RET Reimbursement 2.40 206,955 228,396 236,923 243,989 251,896 259,547 261,973 272,308 279,651 289,941 300,864Signage Revenue 0.01 840 840 840 840 840 840 840 840 840 840 840

TOTAL GROSS REVENUE 17.04 1,470,700 1,623,686 1,654,134 1,695,957 1,722,422 1,761,892 1,779,637 1,823,763 1,884,827 1,957,895 2,014,866General Vacancy Loss 0.00 0 (40,443) (38,966) (49,233) (48,102) (49,954) (27,636) (24,549) (29,039) (41,112) (57,198)

EFFECTIVE GROSS REVENUE 17.04 1,470,700 1,583,243 1,615,168 1,646,724 1,674,320 1,711,938 1,752,001 1,799,214 1,855,788 1,916,783 1,957,668

OPERATING EXPENSESCommon Area Maintenance (1.12) (97,086) (99,999) (102,998) (106,086) (109,273) (112,551) (115,924) (119,405) (122,985) (126,675) (130,475)Management Fee (0.68) (58,828) (63,330) (64,607) (65,869) (66,973) (68,478) (70,080) (71,969) (74,232) (76,671) (78,307)Insurance (0.33) (28,393) (29,245) (30,122) (31,026) (31,957) (32,916) (33,903) (34,920) (35,968) (37,047) (38,158)Real Estate Taxes (2.58) (222,637) (229,316) (236,196) (243,281) (250,580) (258,098) (265,841) (273,815) (282,030) (290,492) (299,206)

TOTAL OPERATING EXPENSES (4.72) (406,944) (421,890) (433,923) (446,262) (458,783) (472,043) (485,748) (500,109) (515,215) (530,885) (546,146)

NET OPERATING INCOME 12.33 1,063,756 1,161,353 1,181,245 1,200,462 1,215,537 1,239,895 1,266,253 1,299,105 1,340,573 1,385,898 1,411,522

CAPITAL COSTSTenant Improvements (0.16) (13,595) (135,161) (19,956) (20,766) (16,230) (16,030) (59,383) (32,359) (56,494) (42,888) (17,147)Leasing Commissions (0.07) (6,032) (39,338) (10,254) (6,230) (7,247) (7,121) (16,432) (14,655) (22,224) (15,369) (8,188)Capital Reserves (0.20) (17,563) (18,090) (18,632) (19,191) (19,767) (20,360) (20,971) (21,600) (22,248) (22,915) (23,603)

TOTAL CAPITAL COSTS (0.43) (37,190) (192,589) (48,842) (46,187) (43,244) (43,511) (96,786) (68,614) (100,966) (81,172) (48,938)

OPERATING CASH FLOW $11.89 $1,026,566 $968,764 $1,132,403 $1,154,275 $1,172,293 $1,196,384 $1,169,467 $1,230,491 $1,239,607 $1,304,726 $1,362,584

ACQUISIT ION & RESIDUAL SALEAcquisition Cost ($12,500,000) 0 0 0 0 0 0 0 0 0 0 All CashNet Residual Value [5] 0 0 0 0 0 0 0 0 0 0 15,683,578 IRR

CASH FLOW BEFORE DEBT ($12,500,000) $1,026,566 $968,764 $1,132,403 $1,154,275 $1,172,293 $1,196,384 $1,169,467 $1,230,491 $1,239,607 $16,988,304 10.63%

MARKET LOAN [6]Loan Funding / Payoff 8,125,000 0 0 0 0 0 0 0 0 0 (6,507,267)Loan Fees (81,250) 0 0 0 0 0 0 0 0 0 0 LeveragedAnnual Debt Service 0 (494,018) (494,018) (494,018) (494,018) (494,018) (494,018) (494,018) (494,018) (494,018) (494,018) IRR

CASH FLOW AFTER DEBT ($4,456,250) $532,548 $474,746 $638,385 $660,257 $678,275 $702,366 $675,449 $736,473 $745,589 $9,987,019 18.42%

NOI Return 8.51% 9.29% 9.45% 9.60% 9.72% 9.92% 10.13% 10.39% 10.72% 11.09%Cumulative Average NOI Return - 8.90% 9.08% 9.21% 9.32% 9.42% 9.52% 9.63% 9.75% 9.88%

UNLEVERAGED Cash Return 8.21% 7.75% 9.06% 9.23% 9.38% 9.57% 9.36% 9.84% 9.92% 10.44%Cumulative Average UNLEVERAGED Cash Return - 7.98% 8.34% 8.56% 8.73% 8.87% 8.94% 9.05% 9.15% 9.28%

LEVERAGED Cash Return 11.95% 10.65% 14.33% 14.82% 15.22% 15.76% 15.16% 16.53% 16.73% 18.19%Cumulative Average LEVERAGED Cash Return - 11.30% 12.31% 12.94% 13.39% 13.79% 13.98% 14.30% 14.57% 14.93%

Debt Service Coverage Ratio (NOI) 2.15x 2.35x 2.39x 2.43x 2.46x 2.51x 2.56x 2.63x 2.71x 2.81xDebt Service Coverage Ratio (CF) 2.08x 1.96x 2.29x 2.34x 2.37x 2.42x 2.37x 2.49x 2.51x 2.64x

Rolling - All Cash IRR 11.44% 10.37% 10.33% 10.24% 10.31% 10.38% 10.44% 10.56% 10.65% 10.63%Rolling - Leveraged IRR 22.13% 19.65% 19.42% 18.98% 18.92% 18.83% 18.72% 18.72% 18.66% 18.42%

[1] This figure takes into account vacancy/credit loss, absorption vacancy, turnover vacancy, and base rent abatements.[2] This figure does not include any amount related to expense reimbursements. Only Scheduled Base Rent and Fixed/CPI Increases are included in this calculation, which is based on the weighted-average physical occupancy during each fiscal year.[3] Based on 86,303 square feet.[4] Anchor Gross Potential Rent includes the following tenant(s): Urban Air Adventure Park.[5] Net Residual Value is calculated by dividing Year 11 NOI by the Residual Cap Rate of 8.82% and applying a 2.00% Cost of Sale.[6] Market Debt based on 65% Loan-to-Value, 4.50% Interest Rate, 30-Year Amortization, and 1.00% Loan Fee.


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IN-PLACE VS PROJECTED NOI

In-P lace NOI Pro Forma NOIAug-18 to Jul-19 $ PSF Aug-18 to Jul-19 $ PSF

Size of Improvements 86,303 SF 86,303 SF

REVENUESScheduled Base Rent

Anchor Gross Potential Rent $282,798 $3.28 $282,798 $3.28Anchor Absorption & Turnover Vacancy 0 0.00 0 0.00Shop Gross Potential Rent 933,089 10.81 935,271 10.84Shop Absorption & Turnover Vacancy (100,229) (1.16) (113,630) (1.32)

Total Scheduled Base Rent 1,115,658 12.93 1,104,439 12.80

CAM Reimbursement 84,953 0.98 84,285 0.98MGT Reimbursement 47,891 0.55 48,143 0.56INS Reimbursement 26,233 0.30 26,038 0.30RET Reimbursement 208,488 2.42 206,955 2.40Signage Revenue 840 0.01 840 0.01

TOTAL GROSS REVENUE 1,484,063 [1] 17.20 1,470,700 17.04General Vacancy Loss 0 0.00 0 0.00

EFFECTIVE GROSS REVENUE 1,484,063 17.20 1,470,700 17.04

OPERATING EXPENSESCommon Area Maintenance (97,086) (1.12) (97,086) (1.12)Management Fee (59,363) (0.69) (58,828) (0.68)Insurance (28,393) (0.33) (28,393) (0.33)Real Estate Taxes (222,637) (2.58) (222,637) (2.58)

TOTAL OPERATING EXPENSES (407,479) (4.72) (406,944) (4.72)

NET OPERATING INCOME $1,076,584 $12.47 $1,063,756 $12.33

Capitalization Rate 8.61% 8.51%

PURCHASE PRICE AS OF AUGUST 1, 2018 $12,500,000 $144.84 $12,500,000 $144.84

In-P lace Occupancy (At Star t of Analysis With No Vacant Lease-Up) 92.39% 92.39%

Average Occupancy ( Includes Vacant Lease-Up and Rollover ) - 91.70%

Notes:

[1] In-Place Net Operating Income is calculated using contractual rents and expense reimbursements from Aug-18 to Jul-19 (less a 5.00% General Vacancy Loss).In-Place NOI does not include vacant lease-up revenue or downtime due to near-term expirations, but does include future rent increases for existing tenants.Leases that are scheduled to expire within the first fiscal year of the analysis are assumed to continue in place at current rent.Leases with renewal options that expire within the first fiscal year of the analysis are assumed to roll to the option rents with no downtime.


21

WALNUT SQUARE

VACANT SPACE

Square Lease Initial Coupon Rent Lease Rent Tenant LeasingSuite Tenant Feet Start Market Rent [1] Adjustment Term Abatements Improvements Commissions

Vacant Space

670 Available 6,567 Aug-19 $15.00 PSF NNN None 5 Years None $15.00 PSF 6.00%

Total Vacant Space 6,567

[1] Calendar year 2018 value. Actual starting contract rent depends on the year in which vacant lease-up tenant begins.


22

WALNUT SQUARE

EXISTING VERSUS MARKET COMPARISON

PercentageSquare Lease Lease Existing Rent Market Rent Above/(Below)

Suite Tenant at August 1, 2018 Feet Star t End as of Aug 1, 2018 as of Aug 1, 2018 Market Rent [1]

Ex ist ing Tenant s

100 Fred Loya Insurance 1,500 Dec-10 Nov-20 $25.00 PSF NNN $25.00 PSF NNN 0.00%130 Wingstop 1,760 Jun-11 Jun-21 $25.00 PSF NNN $24.00 PSF NNN 4.17%200 Check 'N Go 1,000 Sep-03 Sep-19 $22.29 PSF NNN $22.00 PSF NNN 1.32%300 Boost Mobile 1,250 Oct-17 Dec-22 $19.00 PSF NNN $19.00 PSF NNN 0.00%400 Shipley's Donuts 1,250 Oct-03 Sep-18 $24.00 PSF NNN $25.00 PSF NNN -4.00%500 TitleMax 1,500 Jan-14 Jan-19 $20.00 PSF NNN $20.00 PSF NNN 0.00%604 Payless ShoeSource 5,500 Mar-06 Feb-20 $10.50 PSF NNN $11.00 PSF NNN -4.55%604B Urban Air Adventure Park 31,422 Mar-18 Apr-28 $9.00 PSF NNN $9.00 PSF NNN 0.00%606 Bonzai Japanese Steakhouse 5,280 Feb-12 Feb-22 $19.25 PSF NNN $20.00 PSF NNN -3.75%608 Baskin Robbins 1,260 Oct-11 Jul-22 $24.25 PSF NNN $24.00 PSF NNN 1.04%609 TGF Haircutters 1,260 Apr-08 Mar-23 $23.75 PSF NNN $24.00 PSF NNN -1.04%610 Papa Murphy's Pizza 1,260 Jan-08 Jan-23 $22.00 PSF NNN $22.00 PSF NNN 0.00%612 Dollar Tree 9,680 Jul-01 Jul-26 $11.75 PSF NNN $12.00 PSF NNN -2.08%614 Affordable Dentures 4,920 Apr-12 Apr-22 $14.94 PSF NNN $15.00 PSF NNN -0.40%651 Health Texas 3,370 Jan-16 Jan-21 $26.00 PSF NNN $26.00 PSF NNN 0.00%664 Master Tailor 830 Oct-08 Sep-18 $21.00 PSF NNN $22.00 PSF NNN -4.55%680 Unconventional Performance 2,194 Aug-18 Jul-21 $12.00 PSF NNN $15.00 PSF NNN -20.00%688 US Nails 2,000 May-10 Apr-20 $13.50 PSF NNN $15.00 PSF NNN -10.00%692 Magnolia Dry Cleaners 2,500 Jun-03 May-26 $19.50 PSF NNN $20.00 PSF NNN -2.50%

Total Existing Square Feet 79,736 $13.95 $14.20 -1.79%

[1] The calculation of total "Percentage Above/(Below) Market Rent" only includes existing tenants as noted in this schedule.


23

WALNUT SQUARE

EXISTING LEASE EXPIRATIONS

Suite Tenant End 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Thereafter Available400 Shipley's Donuts Sep-18 1,250664 Master Tailor Sep-18 830500 TitleMax Jan-19 1,500200 Check 'N Go Sep-19 1,000604 Payless ShoeSource Feb-20 5,500688 US Nails Apr-20 2,000100 Fred Loya Insurance Nov-20 1,500651 Health Texas Jan-21 3,370130 Wingstop Jun-21 1,760680 Unconventional Performance Jul-21 2,194606 Bonzai Japanese Steakhouse Feb-22 5,280614 Affordable Dentures Apr-22 4,920608 Baskin Robbins Jul-22 1,260300 Boost Mobile Dec-22 1,250610 Papa Murphy's Pizza Jan-23 1,260609 TGF Haircutters Mar-23 1,260692 Magnolia Dry Cleaners May-26 2,500612 Dollar Tree Jul-26 9,680

604B Urban Air Adventure Park Apr-28 31,422670 Available NA 6,567

Totals: 2,080 2,500 9,000 7,324 12,710 2,520 0 0 12,180 0 31,422 6,567Percent: 2% 3% 10% 8% 15% 3% 0% 0% 14% 0% 36% 8%Count: 2 2 3 3 4 2 0 0 2 0 1 1

Cumulative SF: 2,080 4,580 13,580 20,904 33,614 36,134 36,134 36,134 48,314 48,314 79,736 86,303Cumulative %: 2% 5% 16% 24% 39% 42% 42% 42% 56% 56% 92% 100%

Summary of Lease Expirations

Year Leases SF Percent Cumu. SF Cumu. %

2018 2 2,080 2% 2,080 2%

2019 2 2,500 3% 4,580 5%

2020 3 9,000 10% 13,580 16%

2021 3 7,324 8% 20,904 24%

2022 4 12,710 15% 33,614 39%

2023 2 2,520 3% 36,134 42%

2024 0 0 0% 36,134 42%

2025 0 0 0% 36,134 42%

2026 2 12,180 14% 48,314 56%

2027 0 0 0% 48,314 56%

Thereafter 1 31,422 36% 79,736 92%

Available 1 6,567 8% 86,303 100%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

Ther

eaft

er

Ava

ilabl

e

Annual Cumulative


24

WALNUT SQUARE

RENT ROLL AS OF 8/1/2018 Market

Square % of Lease Term Rental Rates Recovery Tenant Leasing Assumption /

Suite Tenant Name Feet Proper ty Begin End Begin Monthly Annually PSF Type ImprovementsCommissions Market Rent Comments/Options

100 Fred Loya Insurance 1,500 1.74% Dec-2010 Nov-2020 Current $3,125 $37,500 $25.00 - - Market

130 Wingstop 1,760 2.04% Jun-2011 Jun-2021 Current $3,667 $44,000 $25.00 - - Option

200 Check 'N Go 1,000 1.16% Sep-2003 Sep-2019 Current $1,857 $22,285 $22.29 - - Market

300 Boost Mobile 1,250 1.45% Oct-2017 Dec-2022 Current $1,979 $23,750 $19.00 - - Market Jan-2019 $2,031 $24,375 $19.50 Jan-2020 $2,083 $25,000 $20.00 Jan-2021 $2,135 $25,625 $20.50 Jan-2022 $2,188 $26,250 $21.00

400 Shipley 's Donuts 1,250 1.45% Oct-2003 Sep-2018 Current $2,500 $30,000 $24.00 - - Market

500 TitleMax 1,500 1.74% Jan-2014 Jan-2019 Current $2,500 $30,000 $20.00 - - Market

604 Payless ShoeSource 5,500 6.37% Mar-2006 Feb-2020 Current $4,813 $57,750 $10.50 - - Market

604B Urban Air Adventure Park 31,422 36.41% Mar-2018 Apr-2028 Current $23,567 $282,798 $9.00 - - Option May-2023 $24,038 $288,454 $9.18 May-2024 $24,509 $294,110 $9.36 May-2025 $25,007 $300,080 $9.55 May-2026 $25,504 $306,050 $9.74 May-2027 $26,002 $312,020 $9.93

606 Bonzai Japanese Steakhouse 5,280 6.12% Feb-2012 Feb-2022 Current $8,470 $101,640 $19.25 - - Option NNN+MGT One 5 year renewal option @ $21.00 /sf/yr. Analysis takes option. $20.00 NNN [Shop]

NNN+MGT (Urban Air)

Analysis assumes a rent commencement date of 05/18 with the seller crediting the gap in base rent and reimbursements in 03/18 and 04/18. Analysis assumes an 86,303 SF denominator for CAM, MGT, and INS with tenant paying toward the full property expenses for those items. Actual reimbursement will be based on a 51,522 SF denominator and an expense pool that includes only the expenses allocated to that area. Two 5 year renewal options @ $10.13 /sf/yr and $11.19 /sf/yr, each with 2% annual increases. Analysis takes one option. 5% cap on prior year CAM excluding SEC, SNOW, MGT, UTIL, INS, and RET. MGT may not exceed 4% of gross revenues.

$9.00 NNN [Anchor]

NNN+MGT $11.00 NNN [Shop]

NNN+MGT SPEC RENEW - Analysis assumes tenant will exercise its renewal option from 02/18-01/19 at the indicated terms with the seller paying all leasing costs.

$20.00 NNN [Shop]


NNN+MGT Two 5 year renewal options @ FMV. 5% cap on prior year CAM excluding SEC, SNOW, UTIL, INS, and RET.

$19.00 NNN [Shop]

NNN+MGT Rent as of 10/18. Termination option with 60 days notice available if tenant is unable to conduct its business due to government action.

$22.00 NNN [Shop]

NNN+MGT One 5 year renewal option @ $27.00 /sf/yr (1-2) and $29.00 /sf/yr (3-5). Analysis takes option.

$24.00 NNN [Shop]

NNN+MGT 5% cumulative compounding cap on CAM excluding MGT, INS, and RET. MGT may not exceed 6% of gross revenues.

$25.00 NNN [Shop]


25

WALNUT SQUARE

RENT ROLL AS OF 8/1/2018 Market

Square % of Lease Term Rental Rates Recovery Tenant Leasing Assumption /

Suite Tenant Name Feet Proper ty Begin End Begin Monthly Annually PSF Type ImprovementsCommissions Market Rent Comments/Options

100 Fred Loya Insurance 1,500 1.74% Dec-2010 Nov-2020 Current $3,125 $37,500 $25.00 - - Market

130 Wingstop 1,760 2.04% Jun-2011 Jun-2021 Current $3,667 $44,000 $25.00 - - Option

200 Check 'N Go 1,000 1.16% Sep-2003 Sep-2019 Current $1,857 $22,285 $22.29 - - Market

300 Boost Mobile 1,250 1.45% Oct-2017 Dec-2022 Current $1,979 $23,750 $19.00 - - Market Jan-2019 $2,031 $24,375 $19.50 Jan-2020 $2,083 $25,000 $20.00 Jan-2021 $2,135 $25,625 $20.50 Jan-2022 $2,188 $26,250 $21.00

400 Shipley 's Donuts 1,250 1.45% Oct-2003 Sep-2018 Current $2,500 $30,000 $24.00 - - Market

500 TitleMax 1,500 1.74% Jan-2014 Jan-2019 Current $2,500 $30,000 $20.00 - - Market

604 Payless ShoeSource 5,500 6.37% Mar-2006 Feb-2020 Current $4,813 $57,750 $10.50 - - Market

604B Urban Air Adventure Park 31,422 36.41% Mar-2018 Apr-2028 Current $23,567 $282,798 $9.00 - - Option May-2023 $24,038 $288,454 $9.18 May-2024 $24,509 $294,110 $9.36 May-2025 $25,007 $300,080 $9.55 May-2026 $25,504 $306,050 $9.74 May-2027 $26,002 $312,020 $9.93

606 Bonzai Japanese Steakhouse 5,280 6.12% Feb-2012 Feb-2022 Current $8,470 $101,640 $19.25 - - Option NNN+MGT One 5 year renewal option @ $21.00 /sf/yr. Analysis takes option. $20.00 NNN [Shop]

NNN+MGT (Urban Air)

Analysis assumes a rent commencement date of 05/18 with the seller crediting the gap in base rent and reimbursements in 03/18 and 04/18. Analysis assumes an 86,303 SF denominator for CAM, MGT, and INS with tenant paying toward the full property expenses for those items. Actual reimbursement will be based on a 51,522 SF denominator and an expense pool that includes only the expenses allocated to that area. Two 5 year renewal options @ $10.13 /sf/yr and $11.19 /sf/yr, each with 2% annual increases. Analysis takes one option. 5% cap on prior year CAM excluding SEC, SNOW, MGT, UTIL, INS, and RET. MGT may not exceed 4% of gross revenues.

$9.00 NNN [Anchor]


NNN+MGT SPEC RENEW - Analysis assumes tenant will exercise its renewal option from 02/18-01/19 at the indicated terms with the seller paying all leasing costs.

$20.00 NNN [Shop]


NNN+MGT Two 5 year renewal options @ FMV. 5% cap on prior year CAM excluding SEC, SNOW, UTIL, INS, and RET.

$19.00 NNN [Shop]

NNN+MGT Rent as of 10/18. Termination option with 60 days notice available if tenant is unable to conduct its business due to government action.

$22.00 NNN [Shop]

NNN+MGT One 5 year renewal option @ $27.00 /sf/yr (1-2) and $29.00 /sf/yr (3-5). Analysis takes option.

$24.00 NNN [Shop]

NNN+MGT 5% cumulative compounding cap on CAM excluding MGT, INS, and RET. MGT may not exceed 6% of gross revenues.

$25.00 NNN [Shop]

609 TGF Haircutters 1,260 1.46% Apr-2008 Mar-2023 Current $2,494 $29,925 $23.75 - - Market Apr-2019 $2,544 $30,530 $24.23 Apr-2020 $2,595 $31,135 $24.71 Apr-2021 $2,646 $31,752 $25.20 Apr-2022 $2,700 $32,395 $25.71

610 Papa Murphy 's P izza 1,260 1.46% Jan-2008 Jan-2023 Current $2,310 $27,720 $22.00 - - Option

612 Dollar Tree 9,680 11.22% Jul-2001 Jul-2026 Current $9,478 $113,740 $11.75 - - Option Aug-2021 $9,882 $118,580 $12.25

614 Affordable Dentures 4,920 5.70% Apr-2012 Apr-2022 Current $6,125 $73,505 $14.94 - - Market May-2019 $6,429 $77,146 $15.68 May-2020 $6,556 $78,671 $15.99 May-2021 $6,814 $81,770 $16.62

651 Health Texas 3,370 3.90% Jan-2016 Jan-2021 Current $7,302 $87,620 $26.00 - - Market Feb-2019 $7,442 $89,305 $26.50 Feb-2020 $7,583 $90,990 $27.00

664 Master Tailor 830 0.96% Oct-2008 Sep-2018 Current $1,453 $17,430 $21.00 - - Market

670 Available 6,567 7.61% Aug-2019 Jul-2024 Aug-2019 $8,455 $101,460 $15.45 $15.45 $4.63 Market$101,460 $30,438

6.00%

680 Unconventional Per formance 2,194 2.54% Aug-2018 Jul-2021 Current $2,194 $26,328 $12.00 - - Option Aug-2019 $2,285 $27,425 $12.50 Aug-2020 $2,377 $28,522 $13.00

688 US Nails 2,000 2.32% May-2010 Apr-2020 Current $2,250 $27,000 $13.50 - - Market

692 Magnolia Dry Cleaners 2,500 2.90% Jun-2003 May-2026 Current $4,063 $48,750 $19.50 - - Market Jun-2019 $4,583 $55,000 $22.00 Jun-2023 $5,000 $60,000 $24.00 Jun-2024 $5,150 $61,800 $24.72 Jun-2025 $5,304 $63,650 $25.46

TOTALS / AVERAGES 86,303 $92,691 $1,112,296 $13.95

OCCUPIED SqFt 79,736 92.4%VACANT SqFt 6,567 7.6%

TOTAL SqFt 86,303 100.0%

NNN+MGT Two 5 year renewal options @ FMV, not less than prior rent. $20.00 NNN [Shop]

NNN+MGT MGT may not exceed 6% of gross revenues. $15.00 NNN [Shop]

NNN+MGT Analysis assumes tenant's lease will commence in 08/18 with the seller paying all leasing costs. One 5 year renewal option @ $13.50 /sf/yr with $0.50 /sf/yr annual increases. Analysis takes option. MGT may not exceed 4% of gross revenues.

$15.00 NNN [Shop]



NNN+MGT (Health) One 5 year renewal option @ FMV, not less than prior rent. ROFO on adjacent space. 10% cumulative compounding cap on CAM excluding SEC, SNOW, UTIL, INS, and RET.

$26.00 NNN [Shop]


NNN+15%AF, 5%C (Dollar)

One 5 year renewal option @ $12.75 /sf/yr. Analysis takes option. 5% cap on prior year CAM excluding INS and RET with an estimated CY2018 basis of $0.5988 PSF.

$12.00 NNN [Shop]

NNN+MGT One 5 year renewal option @ $24.00 /sf/yr. Analysis takes option. $22.00 NNN [Shop]

NNN+MGT Rent as of 04/18. MGT may not exceed 6% of gross revenues. $24.00 NNN [Shop]


26

WALNUT SQUARE

SALES ANALYSIS

TenantSuiteSqFt

Sales Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

SalesPSF % Increase

HealthRatio [1]

Baskin Robbins 2017 29,164 31,166 41,490 39,050 40,825 43,361 T12: $415,543 $329.80 1.85% 8.76%Suite 608 2016 26,829 31,718 37,910 37,780 41,195 42,076 44,527 37,558 31,701 30,845 23,567 22,288 $407,994 $323.80 8.92%1,260 SqFt 2015 30,829 23,117 22,747

2014

TGF Haircutters 2017 20,811 20,244 23,158 24,039 21,932 T12: $268,143 $212.81 -4.82% 13.34%Suite 609 2016 22,884 25,812 27,469 24,670 22,924 23,338 23,539 24,948 20,401 22,598 21,351 21,783 $281,718 $223.59 12.69%1,260 SqFt 2015

2014

[1] Tenant health ratio calculations are based on annualized August 2018 base rent and reimbursement calculations. See the rent roll for details.


27

WALNUT SQUARE

7 MI

3 MI

1 MI

5 MI

SITE DEMOGRAPHICS

50,000 25,000 075,000

WALNUT AVE

POPULATION

210,015 33,518

20,000

104,595

29,341

20,303

3,593

$66,192

$77,664

$79,649

$81,982

110,298

47,700

15,251

50,000 10,000100,000 20,000150,000 30,000200,000 40,0000 0

HOUSEHOLDS

AVERAGE HOUSEHOLD INCOME TRAFFIC COUNTS (2016)

I-35

7 MI

3 MI

1 MI

5 MI

7 MI

3 MI

1 MI

5 MI

25,000 50,000 75,0000 100,000

7,040 ELLIOTT KNOX BLVD100,000


28

WALNUT SQUARE

WHY NEW BRAUNFELS?

CENTERED BETWEEN AUSTIN & SAN ANTONIO Each year, more than three million visitors come to New Braunfels to explore the shopping and recreational activities steeped in German and Hispanic culture and heritage. The city’s strategic location has created opportunities for growth in the global market and an ability to satisfy the needs of the international shopper. Located almost equal distance between the Alamo (San Antonio) and the State Capitol (Austin), New Braunfels has easy access to major highways with IH-35 (a major NAFTA artery) running through the city’s center, and IH-10 only 10 minutes east. New Braunfels’ strategic location is 15 minutes from a new Caterpillar manufacturing plant, 45 minutes from a Toyota manufacturing plant and only a three-hour drive to trade gateways into Mexico, Central and South America. Additionally, New Braunfels is close to nearby air, rail and bus services.

HIGHWAYS SERVING AREA Located on Interstate 35 (north-south system) and nine miles from Inter-state 10 (east-west system)—connected by State Highway 46. Loop 337 circles the city, connecting IH-35 north and south. A proposed SH-130 connector is being assessed by local officials to accommodate future traffic con-gestion from San Antonio to Austin.

BUS Greyhound/Trailways – seven northbound and six southbound daily

MOTOR FREIGHT CARRIERS Central, Consolidated and Roadway Express serve the city. Southeastern has a local terminal. FedEx has a large terminal servicing the New Braunfels and Comal County area.

RAILROADS Union Pacific — 36 daily freight trains (18 northbound and 18 southbound) with a local switch

AIR SERVICE Non-commercial jet service is available at New Braunfels Regional Airport. Commercial service is available at San Antonio International Airport, only a 25-minute drive, served by most major carriers (11). Austin-Bergstrom International Airport is 45 minutes north and is served by 16 major carriers.

NEW BRAUNFELS REGIONAL AIRPORT The extension of FM 306 near a new retail development, Town Center at Creekside, has paved the way for easier access to the New Braunfels Regional Airport (BAZ). The Airport Master Plan gives a targeted direction to increase airport traffic and business development. Complete with $25 million in improvements in t-hangars, runways, drainage, signage, an Air Traffic Control Tower and a 5,000 sq. ft. termi-nal building, the New Braunfels Regional Airport continues to provide a safe and efficient portal with upscale, quality service.

DISTANCE TOMAJOR CITIESNew Braunfels is within a four-hour drive of over 12 million people

San Antonio 30

Austin 45

Houston 178

Corpus Christi 176

Laredo 196

Dallas 245

Monterrey 431

Mexico City 781

Los Angeles 1,383

New York 1,786


29

WALNUT SQUARE

MAJOR EMPLOYERS SOURCE: NBEDC

Employer - Product or Service Employees

Comal ISD School District 2,588

Schlitterbahn Waterpark 1,689

Wal-Mart Distribution Center 1,218

New Braunfels ISD 1,040

Sysco 864

IBEX Corporation 750

Hunter Industries, Ltd. 705

Comal County 683

Resolute Health 593

City of New Braunfels 550

HD Supply Facilities Maintenance 516

Christus Santa Rosa - New Braunfels 460

GE Oil & Gas 400

Buc-ees 342

Rush Enterprises, Inc. 330

WHY NEW BRAUNFELS?

SKILLED, RELIABLE WORKFORCE The center of a well-trained available work-force, New Braunfels touts a strong work ethic among its population. The diverse industry sector employs workers in a variety of professions including: aerospace, automotive, construction, engineering, finance, healthcare and manufacturing. In the last nine years, the workforce has increased 44% and new primary jobs doubled since 2003, averaging 982 primary jobs per year.

AVAILABLE WORKFORCE SOURCE: TWX MAY 2016

COMALCOUNTY

NEWBRAUNFELS

CLF 61,905 34,172

EMPLOYED 59,813 33,275

UNEMPLOYED 2,092 897

RATE 3.4% 2.6%

TEXAS UNEMPLOYMENT RATE 4.2%

500,000+ WORKFORCE within a 30 minute commute

COMMUTE TO WORKSOURCE: (CENSUS.GOV, 2010-2014 ACS)

MEAN TRAVEL TO WORK (MINUTES) 24.4

CAR, TRUCK, OR VAN - DROVE ALONE 79.6%

CAR, TRUCK, OR VAN - CARPOOLED 12.6%

WALKED 0.8%

OTHER MEANS 1.5%

WORKED AT HOME 5.3%

COMAL COUNTY WAGE RATES

$16.00

$17.00

$18.00

$19.00

$20.00

$21.00

$22.00

Ave

rag

e H

our

ly W

ag

e Ra

te

COMAL COUNTY WAGE RATES

2015 2ND QTR$18.12/HOUR

2015 3RD QTR$18.88/HOUR

2015 4TH QTR$21.60/HOUR

GROWING POPULATION 2015 POPULATION: CITY: 70,543 | COUNTY: 129,048Ranked as the fifth fastest-growing county and second fastest-growing city in the nation, Comal County and New Braunfels are experiencing an unprecedent-ed growth rate – growing at an average of 4-5% per year; a 58% increase in the last decade. The city’s population surpassed 70,000 in 2015 and is pro-jected to reach 85,000 by 2021. Founded in 1845 by German settlers, New Braunfels’ population includes many German and Hispanic descendants. The Median age for New Braunfels is 37; Average Family Size is 3.18.

SOURCE: San Antonio Economic Development, 2016 Demographic Profile


30

WALNUT SQUARE

WHY NEW BRAUNFELS?

AFFORDABLE COST OF LIVING, UNIQUE QUALITY OF LIFE An affordable cost of living is enhanced by low city, county and school district taxes to create a composite cost of living score 15% below the national average. Average home prices are 30% lower than the national average. New Braunfels is considered a great place to live, work and play.

MEDIAN HOME VALUE

$50,000 $100,000 $150,000 $200,000

New Braunfels ISD, $196,520

City of New Braunfels, $181,110

Tri-County Area, $204,404

SOURCE: Comal Appraisal District, Four Rivers Association of Realtors

UTILITIES

ELECTRICITY WATER/WASTEWATER NATURAL GAS

Supplier: Multiple ERCOT Sources Wells, Surface Water/Aquifer

Enterprise Products Partners

Distributor: NBU NBU CenterPoint Energy

Average Monthly Bill: Residential:$10.19/1,300 kwh

Residential:$16,24/8,484 gallonsCommercial:$58.24/28,725 gallons

Residential:$21.21;Commercial:contracts available

MAKING ROOM FOR FUTURE GENERATIONS New Braunfels and Comal County have two school districts: New Braunfels ISD (NBISD) and Comal ISD (CISD). New Braunfels ISD is primarily within the city limits while Comal ISD spans 589 miles of Central Texas and includes parts of five Central Texas counties: Comal, Bexar, Hays, Kendall, and Guadalupe. Employing more than 930 workers, NBISD encompasses 13 cam-puses. CISD is one of Texas’ fastest-growing districts, with 28 schools, and gains between 800 new students a year. Both school districts are Academ-ically Acceptable by TEA ratings. Higher Education has also grown in New Braunfels. In 2012, Howard Payne University announced plans to build a university campus in the planned Veramendi development, and are currently offering MBA classes to the community. The New Braunfels Mayor’s Higher Education Task Force continues to develop a plan for higher education offerings in New Braunfels and Comal County. By working closely with Alamo Colleges/CTTC, Howard Payne University, Texas Lutheran University, and Wayland Baptist University, they aim to provide current and future diverse curriculum to meet the needs of our community.

SEPT. 2015ENROLLMENT

STUDENT/TEACHERRATIO

MAY 2015GRADUATES

ATTENDANCERATE

New Braunfels ISD 8,441 1/17.2 662 96%

Comal ISD 20,264 1/16.7 1,400 95.9%



31

WALNUT SQUARE

WHY SAN ANTONIO?

18 SAN ANTONIO FIRMSNAMED IN 2017 EDITION OF THE INC. 5,000 LIST

OF FASTEST-GROWING PRIVATE COMPANIES IN AMERICA

714 Vighter Medical Group 2275 Dilligas

774 Silotech Group 2830 Inspired eLearning***

871 Stability Staffing and Consulting 2909 CE Group

962 TopBox Solutions 2924 Pax Financial Group

1526 TAVHealth 3051 KFW Engineers & Surveying

1980 Aventine Hill CFO 3146 TeleQuality Communications***

1943 Texas Utility Engineering 4045 The Gents Place

2102 Galaxy Builders 4657 Massage Heights Franchising

2009 Synergyst Research*** 4993 Cox Manufacturing Co

WHERE SAN ANTONIO RANKS

13,497JOBS ADDED

JULY 2016 - JULY 2017


3.7%UNEMPLOYMENT

RATE

$214,000SINGLE FAMILY HOME

MEDIAN PRICE

87.2 COST OF LIVING INDEX12.8 BELOW THE NATIONAL AVERAGECOST OF LIVING

RANKED 3RDAMONG U.S. CITIES THAT RECORDED THE LARGEST NUMERIC INCREASES IN POPULATION IN 2016

DFW GDP

9 out of 10 of the major industry supersectors make up 17% or less of the total metro economy

DALLAS/FORT WORTH HAS THE MOST DIVERSE ECONOMY IN TEXAS

$485.7BILLION

CURRENT GDPIN 2015

Source: Bureau of Economic Analysis, September 2016.

INFO

TECHNOLOGY

WHEN COMPARING JOBS ADDED TO DEGREES AWARDED

#2 MARKETFOR TECH “BRAIN GAIN”

• 5th largest concentration of technology-related employees in the U.S. (162,060 tech talent total)

• 46 coworking spaces

• 26 incubators/accelerators

Source: CBRE Research, 2016; Dallas Regional Chamber, 2017.

• Office and Administrative

• Sales

• Food Preparation and Service

• Transportation and Material Moving

• Production

• Business and Financial Operations

LABOR FORCE

Source: Bureau of Labor Statistics, May 2017.

TRADE, TRANSPORTATION, + UTILITIES

PROFESSIONAL + BUSINESS SERVICES

EDUCATION + HEALTH SERVICES

GOVERNMENT

LEISURE + HOSPITALITY

FINANCIAL ACTIVITIES

MANUFACTURING

MINING, LOGGING, + CONSTRUCTION

OTHER SERVICES

6th

9th

1/3

IN THENATION

OF THE STATE’SGDP

DFW MAKES

UP

IF DFW WAS A STATE

LARGEST GDP

IF DFW WAS A COUNTRY

23rd

LARGEST GDP AND RANK JUST BELOW TAIWAN

• Education, Training, and Library

• Healthcare Practitioners and

Technical

• Installation, Maintenance, and

Repair

• Management

• Computer and Mathematical

• Construction and Extraction

• Personal Care and Service

• Building, Grounds Cleaning and

Maintenance

• Healthcare Support

• Protective Service

• Architecture and Engineering

• Arts, Design, Entertainment, Sports,

and Media

• Community and Social Service

• Legal

• Life, Physical, and Social Science

• Farming, Fishing, and Forestry

CBRE3 WHYDFW? | CBREQ117

7th

LARGEST US CITYDFW GDP

9 out of 10 of the major industry supersectors make up 17% or less of the total metro economy

DALLAS/FORT WORTH HAS THE MOST DIVERSE ECONOMY IN TEXAS

$485.7BILLION

CURRENT GDPIN 2015

Source: Bureau of Economic Analysis, September 2016.

INFO

TECHNOLOGY

WHEN COMPARING JOBS ADDED TO DEGREES AWARDED

#2 MARKETFOR TECH “BRAIN GAIN”

• 5th largest concentration of technology-related employees in the U.S. (162,060 tech talent total)

• 46 coworking spaces

• 26 incubators/accelerators

Source: CBRE Research, 2016; Dallas Regional Chamber, 2017.

• Office and Administrative

• Sales

• Food Preparation and Service

• Transportation and Material Moving

• Production

• Business and Financial Operations

LABOR FORCE

Source: Bureau of Labor Statistics, May 2017.

TRADE, TRANSPORTATION, + UTILITIES

PROFESSIONAL + BUSINESS SERVICES

EDUCATION + HEALTH SERVICES

GOVERNMENT

LEISURE + HOSPITALITY

FINANCIAL ACTIVITIES

MANUFACTURING

MINING, LOGGING, + CONSTRUCTION

OTHER SERVICES

6th

9th

1/3

IN THENATION

OF THE STATE’SGDP

DFW MAKES

UP

IF DFW WAS A STATE

LARGEST GDP

IF DFW WAS A COUNTRY

23rd

LARGEST GDP AND RANK JUST BELOW TAIWAN

• Education, Training, and Library

• Healthcare Practitioners and

Technical

• Installation, Maintenance, and

Repair

• Management

• Computer and Mathematical

• Construction and Extraction

• Personal Care and Service

• Building, Grounds Cleaning and

Maintenance

• Healthcare Support

• Protective Service

• Architecture and Engineering

• Arts, Design, Entertainment, Sports,

and Media

• Community and Social Service

• Legal

• Life, Physical, and Social Science

• Farming, Fishing, and Forestry

CBRE3 WHYDFW? | CBREQ117

2nd

LARGEST CITY IN TEXAS


32

WALNUT SQUARE

CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing interests in the same transaction. For example, this Memorandum may be received by our Af-filiates, including CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the “Property”) may submit an offer to purchase the Property and may be the success-ful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will act in the best interest of the client(s) it represents in the transaction described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a man-ner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum.

This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property.

This 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 own-er 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, mar-ket conditions, competition and other factors beyond the control of the Owner and CBRE, 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 qual-ified prospective purchasers. In this 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 Memorandum in any manner.

Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, Affil-iates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Mem-orandum 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.

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 discus-sions 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 obli-gation to any entity reviewing this 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 Memorandum, you agree that this 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 Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, 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 CBRE, Inc.

If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc.

DISCLAIMERS


33

WALNUT SQUARE

Before working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner’s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer’s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you. A broker is obligated by law to treat you honestly.

IF THE BROKER REPRESENTS THE OWNER:The broker becomes the owner’s agent by entering into an agreement with the owner, usually through a written - listing agreement, or by agreeing to act as a subagent by accepting an offer of subagency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can as-sist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner’s agent anything the buyer would not want the owner to know because an owner’s agent must disclose to the owner any material information known to the agent.

IF THE BROKER REPRESENTS THE BUYER:The broker becomes the buyer’s agent by entering into an agreement to repre-sent the buyer, usually through a written buyer representation agreement. A buy-er’s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer’s agent anything the owner would not want the buyer to know because a buyer’s agent must disclose to the buyer any material information known to the agent.

IF THE BROKER ACTS AS AN INTERMEDIARY:A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written con-sent of each party to the transaction to act as an intermediary.

Approved by the Texas Real Estate Commission for Voluntary UseTexas law requires all real estate licensees to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords.

The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction:

(1) shall treat all parties honestly;

(2) may not disclose that the owner will accept a price less than the asking price unless authorized in writing to do so by the owner;

(3) may not disclose that the buyer will pay a price greater than the price sub-mitted in a written offer unless authorized in writing to do so by the buyer; and

(4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property.

With the parties’ consent, a broker acting as an intermediary between the par-ties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out in-structions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party.

If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker’s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding.

Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee’s records.

INFORMATION ON BROKERAGE SERVICES

EXCLUSIVE MARKETING ADVISORS

OFFER ING MEMORANDUM

WA L N U T S Q UA R EC B R E C A P I TA L M A R K E T SJARED AUBREY

SENIOR V ICE PRES IDENT+1 214 252 1031ja red .aub rey@cbre . com

M ICHAEL AUSTRYVICE PRES IDENT+1 214 252 1115michae l .aus t r y@cbre . com

668 S . WALNUT AVENUE | NEW BRAUNFELS , TX 78130

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