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Offering Memorandum

ADVANCE AUTO PARTSADVANCE AUTO PARTS2201 Hamilton Blvd • Sioux City, IA 511042201 Hamilton Blvd • Sioux City, IA 51104

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

ADVANCE AUTO PARTSSioux City, IAACT ID ZAA0011085

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

Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.

Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.

By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.

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TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01 Offering Summary Investment Description Location Overview Regional and Local Map Parcel Map Aerial Photo

Property Photos

FINANCIAL ANALYSIS 02 Offering Summary

Tenant Overview

Sales Comparables

MARKET OVERVIEW 03 Market Analysis

Demographic Analysis

ADVANCE AUTO PARTS

4

ADVANCE AUTO PARTS

5

INVESTMENT

OVERVIEW

OFFERING SUMMARY

Price $1,230,000

Net Operating Income $101,500

Capitalization Rate – Current 8.25%

Price / SF $175.71

Rent / SF $14.50

Lease Type NNN

Gross Leasable Area 7,000 SF

Year Built / Renovated 2002

Lot Size 0.53 acre(s)

#

EXECUTIVE SUMMARY

OFFERING SUMMARY

#

FINANCING

Down Payment All Cash

Net Cash Flow 8.25% / $101,500

Cash on Cash Return 8.25%

Total Return 8.25% / $101,500

ADVANCE AUTO PARTS

6

ADVANCE AUTO PARTS

6

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES *

Tyson 2,100

Northwest Iowa Hospital 1,300

Hy-Vee Gas 1,202

Andersons The 1,102

City Managers Office 800

Curlys Foods Inc 750

1st Financial Bank USA 625

Interbake Foods LLC 560

Western Iowa 525

Great West Casualty Company 510

Boys and Girls Home Residenti 500

Walmart 500

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2018 Estimate Pop 15,708 56,731 96,587

2010 Census Pop 15,509 56,253 95,293

2018 Estimate HH 5,746 21,083 36,369

2010 Census HH 5,641 20,774 35,630

Median HH Income $47,791 $48,798 $52,503

Per Capita Income $21,860 $23,764 $25,719

Average HH Income $59,365 $63,188 $67,431

* # of Employees based on 5 mile radius

7

year operating history at its current location. Situated north of downtown Sioux City, it has excellent frontage on Hamilton

Boulevard, which serves as a major retail corridor with a reported 25,000 daily car count.

There are a little over three years remaining on the corporate guaranteed lease with a 7.5% rent increase at each of the two

remaining five-year option periods. The original 10-year lease began in 2002, and the tenant has executed the first two lease option

periods, with the current lease term ending 12/31/2022. Advance Auto Parts (NYSE: AAP) has more than 5,000 other locations

across the United States.

Constructed in 2002, the +/‐ 7,000 square foot auto parts store is situated on +/‐0.53 acres of land with abundant on‐site

parking. The property is surrounded by other national auto retailers, including Discount Tires and AutoZone, also located along

Hamilton Boulevard. Other national retailers on Hamilton Blvd. include: HyVee Grocery Store, Bomgaars Department Store, Petco,

Starbucks, Qdoba, Burger King, Taco Bell, Walgreen’s, Pizza Hut, Culver’s, Papa John’s, Jimmy John’s, Subway, and more.

ADVANCE AUTO PARTS

INVESTMENT DESCRIPTION

7

The subject property is an Advance Auto Parts store situated at the corner

of a signalized intersection in Sioux City, Iowa. The store has a nearly 20-

Located just half a mile from the subject property is Bishop Heelan Memorial Field, shared by the

Briar Cliff University football team and Bishop Heelan Catholic High School. Briar Cliff University sits

just one and a half miles from the subject property, and is home to over 1,100 students. Additionally,

located just behind the subject property is Center Street Park, a six-acre park with picnic areas,

playground equipment, and three baseball diamonds.

Sioux City has a reported city population of 82,514, with an Average Household Income of $63,188 within a three-mile radius of

the subject property.

#

CLOSE PROXIMITY TO:

2201 Hamilton Blvd, Sioux City, IA 51104

§ Corporate Guaranteed Lease

§ Seasoned Location for Tenant

§ Located on Main Commercial Thoroughfare (25,000 Daily Car Count)

§ Surrounded by Other National Retailers

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX

PROPERTY NAMEADVANCE AUTO PARTS

PRICING AND VALUATION MATRIX

PROPERTY NAME

ADVANCE AUTO PARTS

8

LOCATION OVERVIEW

Retail Parks and Recreation

#

2201 Hamilton Blvd, Sioux City, IA 51104

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX

PROPERTY NAMEADVANCE AUTO PARTS

PRICING AND VALUATION MATRIX

PROPERTY NAME

ADVANCE AUTO PARTS

9

REGIONAL AND LOCAL MAP

10

10

ADVANCE AUTO PARTS

PARCEL MAP

NOT TO SCALE

AERIAL PHOTO

ADVANCE AUTO PARTS

11

PROPERTY PHOTOS

12

PROPERTY PHOTOS

ADVANCE AUTO PARTS

ADVANCE AUTO PARTS

13

FINANCIAL

ANALYSIS

#

PROPERTY SUMMARY

OFFERING SUMMARY

#

NOTES

Tenant required to give landlord 90-day notice to exercise last remaining lease option.

ADVANCE AUTO PARTS

14

OFFERING SUMMARY

15

Advance Auto Parts, Inc.COMPANY NAME

1932YEAR FOUNDED

Raleigh, NCHEADQUARTERS

AutoINDUSTRY

PublicOWNERSHIP

Advance Auto Parts

(NYSE: AAP) has taken

the lead in the race to

become the #1

provider of automotive

aftermarket parts in

North America. Serving

both the do-it-yourself

(DIY) and professional

installer markets, AAP

operates over 5,000

stores under the5,062

LOCATIONS$9,664,337,000

TTM SALES70,000+

EMPLOYEES

Advance Auto Parts, Autopart International (AI),

Carquest, and Worldpac banners in the US and

Canada. Its stores carry brand-name and private-label replacement parts, batteries, maintenance items, and automotive chemicals for

individual car and truck owners. AAP's Carquest, AI, and Worldpac stores cater to commercial customers, including garages, service

stations, and auto dealers.

ADVANCE AUTO PARTS

TENANT OVERVIEW

ADVANCE AUTO PARTS

COMPARABLES MAP

16

ADVANCE AUTO PARTS(SUBJECT)

Dollar Tree

Napa Auto Parts

Burger King

O'Reilly Auto Parts

SALES COMPARABLES

ON MARKET COMPARABLES

1

2

3

4

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PROPERTY NAME

ADVANCE AUTO PARTS

SALES COMPARABLES

AdvanceAuto Parts

Dollar Tree Napa AutoParts

Burger King O'ReillyAuto Parts

0.0

0.9

1.8

2.7

3.6

4.5

5.4

6.3

7.2

8.1

9.0

Avg. 7.60%

Avg. 6.85%

Average Cap Rate

AdvanceAuto Parts

Dollar Tree Napa AutoParts

Burger King O'ReillyAuto Parts

$0.00

$30.00

$60.00

$90.00

$120.00

$150.00

$180.00

$210.00

$240.00

$270.00

$300.00

Avg. $206.35

Avg. $126.72

Average Price Per Square Foot

SALES COMPARABLES

ON MARKET COMPARABLES

SALES COMPS AVG

ON MARKET COMPS AVG

PROPERTY NAME

MARKETING TEAM

ADVANCE AUTO PARTS

SALES COMPARABLES

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


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SALES COMPARABLES ON MARKET COMPARABLES

SUBJECT PROPERTY

Asking Price $1,230,000

Price/SF $175.71

CAP Rate 8.25%

GLA 7,000 SF


Year Built 2002

Lease Term Remaining 3.1 Years

ADVANCE AUTO PARTS2201 Hamilton Blvd, Sioux City, IA, 51104

1

NOTESApproximately six years remaining on the NNN corporate lease. $0.50 per square foot rent increase in year six and at each of the two, five-year renewal options.

Close Of Escrow 9/30/2019

Sales Price $1,217,000

Price/SF $135.22

CAP Rate 7.95%

GLA 9,000 SF


Year Built 2015

DOLLAR TREE1103 13th St. SW, Spencer, IA, 51301

2

NOTESApproximately six years remaining on the NNN corporate lease. 7.50% rent increase every five years and four, five-year renewal options.



Price/SF $211.66

CAP Rate 6.58%

GLA 7,772 SF


Year Built 1997

NAPA AUTO PARTS2680 100th St. , Urbandale, IA, 50322

PROPERTY NAME

MARKETING TEAM

ADVANCE AUTO PARTS

SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


19

SALES COMPARABLES ON MARKET COMPARABLES

3

NOTESApproximately six years remaining on the NNN corporate lease. 1.5% annual rent increases and two, five-year renewal options.



Price/SF $272.16

CAP Rate 8.26%

GLA 4,828 SF


Year Built 1996

BURGER KING3161 Joliet Ave, Missouri Valley, IA, 51555

4

NOTESApproximately eight years remaining on the modified NNN corporate lease. There is one, five-year option remaining with an 8.33% rent increase. Property has been on the market for 263 days.

On Market

List Price $736,000

Price/SF $126.72

CAP Rate 6.85%

GLA 5,808 SF


Year Built 1966

O'REILLY AUTO PARTS1006 West Platt Street, Maquoketa, IA, 52060

ADVANCE AUTO PARTS

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MARKET

OVERVIEW

MARKET OVERVIEW

OVERVIEWDES MOINES

DEMOGRAPHICS

ECONOMY

METRO HIGHLIGHTS

* Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

ADVANCE AUTO PARTS

Home to roughly 655,000 people, the Des Moines metro is the largest in

the state of Iowa and consists of Dallas, Guthrie, Madison, Polk and

Warren counties. The market is approximately 195 miles northeast of

Kansas City and 330 miles west of Chicago. The population is expanding

far quicker than the national average, with roughly 40,000 additional

people expected over the next five years. Incomes are also above the

national average, supporting growth in goods and services.

AFFORDABLE COST OF LIVINGThe cost of living in the metro is also below the national average, providing higher disposable incomes.

ACTIVE FINANCIAL SERVICES BASEThe mortgage headquarters for Wells Fargo and the national headquarters of Principal Financial Group provide a broad base of financial services jobs.

AGRICULTURE CENTERAccess to fertile farmland and its status as a top producer of corn, soybeans, pork and eggs nationally underpin the metro’s diverse agricultural industry.

§ Boosted by the diverse agriculture and research environment, John Deere and DuPont Pioneer employ more than 5,000 people combined. There are also several other smaller supply-chain firms.

§ Hy-Vee, a regional retail grocery and drugstore chain, is headquartered in West Des Moines. The company employs roughly 6,400 people.

§ In addition to Wells Fargo and Principal Financial Group, who together employ more than 20,000 workers, Nationwide provides thousands of jobs in Des Moines.

§ Major tech companies Facebook and Microsoft have invested more than $3.5 billion in five data center sites. Several other technology firms also have data center facilities in the metro.

655K2018

POPULATION:

258K2018

HOUSEHOLDS:

35.72018

MEDIAN AGE:

$67,5002018 MEDIAN

HOUSEHOLD INCOME:

U.S. Median:

38.0U.S. Median:

$58,8007.1%

Growth2018-2023*:

6.1%

Growth2018-2023*:

21

MARKET OVERVIEW

PROPERTY NAME

MARKETING TEAM

ADVANCE AUTO PARTS

DEMOGRAPHICS

Source: © 2018 Experian

Created on November 2019

POPULATION 1 Miles 3 Miles 5 Miles§ 2023 Projection

Total Population 15,147 55,737 95,583

§ 2018 Estimate


§ 2010 Census


§ 2000 Census


§ Current Daytime Population

2018 Estimate 14,837 63,363 103,765

HOUSEHOLDS 1 Miles 3 Miles 5 Miles§ 2023 Projection

Total Households 5,602 21,037 36,476

§ 2018 Estimate


Average (Mean) Household Size 2.70 2.63 2.60

§ 2010 Census


§ 2000 Census


§ Occupied Units

2023 Projection 5,602 21,037 36,476

2018 Estimate 6,191 22,261 38,409

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles§ 2018 Estimate

$150,000 or More 4.49% 5.73% 6.25%

$100,000 - $149,000 9.75% 9.95% 10.59%

$75,000 - $99,999 12.20% 11.92% 13.36%

$50,000 - $74,999 21.52% 21.37% 22.18%

$35,000 - $49,999 14.77% 13.41% 13.52%

Under $35,000 37.27% 37.61% 34.10%

Average Household Income $59,365 $63,188 $67,431

Median Household Income $47,791 $48,798 $52,503

Per Capita Income $21,860 $23,764 $25,719

HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 MilesTotal Average Household Retail Expenditure $58,736 $59,385 $62,337

§ Consumer Expenditure Top 10 Categories

Housing $14,882 $15,064 $15,729

Transportation $10,347 $10,511 $11,006

Shelter $8,485 $8,571 $8,952

Food $6,048 $6,123 $6,394

Personal Insurance and Pensions $5,351 $5,523 $5,954

Health Care $4,172 $4,317 $4,561

Utilities $3,449 $3,476 $3,597

Entertainment $2,462 $2,502 $2,628

Cash Contributions $1,470 $1,534 $1,622

Apparel $1,444 $1,446 $1,519

POPULATION PROFILE 1 Miles 3 Miles 5 Miles§ Population By Age

2018 Estimate Total Population 15,708 56,731 96,587

Under 20 31.82% 30.80% 30.27%

20 to 34 Years 21.58% 21.46% 21.51%

35 to 39 Years 6.87% 6.46% 6.37%

40 to 49 Years 11.74% 11.51% 11.39%

50 to 64 Years 16.88% 17.36% 17.58%

Age 65+ 11.12% 12.39% 12.88%

Median Age 32.59 33.31 33.67

§ Population 25+ by Education Level

2018 Estimate Population Age 25+ 9,543 34,969 59,935

Elementary (0-8) 9.59% 8.34% 6.83%

Some High School (9-11) 9.98% 10.71% 9.23%

High School Graduate (12) 31.59% 31.98% 32.54%

Some College (13-15) 20.28% 20.16% 21.46%

Associate Degree Only 7.40% 7.33% 7.96%

Bachelors Degree Only 12.16% 13.19% 13.54%

Graduate Degree 6.00% 6.16% 6.60%

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IncomeIn 2018, the median household income for your selected geography is $47,791, compare this to the US average which is currently $58,754. The median household income for your area has changed by 39.23% since 2000. It is estimated that the median household income in your area will be $55,250 five years from now, which represents a change of 15.61% from the current year. The current year per capita income in your area is $21,860, compare this to the US average, which is $32,356. The current year average household income in your area is $59,365, compare this to the US average which is $84,609.

PopulationIn 2018, the population in your selected geography is 15,708. The population has changed by -3.70% since 2000. It is estimated that the population in your area will be 15,147.00 five years from now, which represents a change of -3.57% from the current year. The current population is 50.09% male and 49.91% female. The median age of the population in your area is 32.59, compare this to the US average which is 37.95. The population density in your area is 4,989.71 people per square mile.

HouseholdsThere are currently 5,746 households in your selected geography. The number of households has changed by -4.22% since 2000. It is estimated that the number of households in your area will be 5,602 five years from now, which represents a change of -2.51% from the current year. The average household size in your area is 2.70 persons.

EmploymentIn 2018, there are 6,745 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 49.12% of employees are employed in white-collar occupations in this geography, and 52.23% are employed in blue-collar occupations. In 2018, unemployment in this area is 4.26%. In 2000, the average time traveled to work was 18.00 minutes.

Race and EthnicityThe current year racial makeup of your selected area is as follows: 63.67% White, 7.22% Black, 0.32% Native American and 5.71% Asian/Pacific Islander. Compare these to US averages which are: 70.20% White, 12.89% Black, 0.19% Native American and 5.59% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 28.82% of the current year population in your selected area. Compare this to the US average of 18.01%.

PROPERTY NAME

MARKETING TEAM

ADVANCE AUTO PARTS

HousingThe median housing value in your area was $93,430 in 2018, compare this to the US average of $201,842. In 2000, there were 3,477 owner occupied housing units in your area and there were 2,521 renter occupied housing units in your area. The median rent at the time was $375.

Source: © 2018 Experian

DEMOGRAPHICS

23

www.MarcusMillichap.com

Jon Ruzicka

Broker

Minneapolis OfficeTel: (952) 852-9700Fax: (952) 852-9710

[email protected]

License: IA B63379000

P R E S E N T E D B Y

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