Est st Street - ERRIIE INIANA offering memorandum

Starbucks

725 West 81st Street - MERRILLVILLE, INDIANA 46410

offering memorandum

ARTIST REPRESENTATION

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of ? 2016 Marcus & Millichap. Activity ID # X0332302

Investment Overview

725 West 81st Street - MERRILLVILLE, INDIANA 46410

? New Construction Starbucks with "Evenings" Concept and Drive-Thru | Will be Delivered in May 2017

? Pad Site to Meijer Grocery | Signalized, Hard-Corner that Sees Nearly 62,000 Vehicles Per Day

? New 10-Year Lease With 10 Percent Rent Increases Every Five Years in Base Term and in Option Periods

? Lease Guaranteed by the Starbucks Corporation | S&P ACredit Rating

? Less than Two Miles from the Methodist Hospital | 634 Bed Facility | One of Chicago Tribune's Top 100 Workplaces in 2014

? Less than Two Miles from NiSource, Inc (NYSE: NI) Corporate Headquarters | Fortune 500 Company

? Less than Two Miles from the Southlake Mall | 1.3 Million-Square Foot Mega Mall

ARTIST REPRESENTATION

Marcus & Millichap is pleased to present this newly constructed Starbucks located in Merrillville, Indiana. This location will feature the Starbucks Evenings concept which consists of a menu of wine and beer as well as a selection of a few light, savory bites available after 4pm. The subject property is situated on a signalized, hardcorner intersection directly in front of a 237,000-square foot Meijer grocery store. This highly trafficked corner sees nearly 62,000 vehicles per day. The newly constructed building will be delivered May 2017.

Starbucks (NASDAQ: SBUX) signed a 10-year doublenet (NN) lease that features 10 percent rent escalations every five years in the base term, and in the four, fiveyear option periods. There is no termination clause in this lease. Additionally, the lease is guaranteed by the Starbucks Corporation (S&P A- Credit Rating). In 2015, the Company did $19.16 billion in sales across their 23,000 locations.

Less than two miles from the asset is the Methodist Hospital, a 634-bed facility that was named one of the Chicago Tribune's Top 100 Workplaces in 2014. Also, less than two miles is the corporate headquarters of NiSource, Incorporated (NYSE:NI), a Fortune 500 company.

The Southlake Mall is less than two miles from this asset. The mall is a 1.3 million-square foot center with retailers such as Kohl's, Macy's, J.C. Penney, Sears, Dick's Sporting Goods, Forever 21, and H&M. Other major tenants in the vicinity include Walgreens, Bed Bath & Beyond, PNC Bank, Marriott, Costco, Lowes, Home Depot, McDonald's, Walmart, and Panera.

Starbucks locations serve hot and cold drinks, wholebean coffee, microground instant coffee known as VIA, espresso, caffe latte, full- and loose-leaf teas including Teavana tea products, Evolution Fresh juices, Frappuccino beverages, pastries, and snacks. Many stores sell pre-packaged food items, hot and cold sandwiches, and drinkware including mugs and tumblers; select "Starbucks Evenings" locations offer beer, wine, and appetizers. Starbucks-brand coffee, ice cream and bottled cold coffee drinks are also sold at grocery stores.

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of ? 2016 Marcus & Millichap. Activity ID # X0332302

Financial Overview

725 West 81st Street - MERRILLVILLE, INDIANA 46410

Offering Summary

PRICE

$1,899,657

CAP RATE

5.25%

NOI

$99,732

PRICE PER SQUARE FOOT

$920.38

RENT PER SQUARE FOOT

$48.32

YEAR BUILT

2016

LOT SIZE

.93 Acres

GROSS LEASEABLE AREA

2,064 Square Feet

TYPE OF OWNERSHIP

Public

LEASE GURANTOR

Corporate Guarantee

LEASE TYPE

Double-Net (NN)

ROOF AND STRUCTURE

Landlord Responsible

Lease Summary

LEASE COMMENCEMENT DATE July 30, 2017

LEASE EXPIRATION DATE

July 31 2027

LEASE TERM

10 Years

TERM REMAINING

10 Years

INCREASES

10 %, Every 5 Years

OPTIONS TO RENEW

4, 5-Year Options

OPTIONS TO TERMINATE

None

OPTIONS TO PURCHASE

None

FIRST RIGHT OF REFUSAL

None

ARTIST REPRESENTATION

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of ? 2016 Marcus & Millichap. Activity ID # X0332302

Tenant Overview - Starbucks

725 West 81st Street - MERRILLVILLE, INDIANA 46410

Wake up and smell the coffee -- Starbucks is everywhere. The world's #1 specialty coffee retailer, Starbucks has more than 22,700 coffee shops in about 60 countries. The outlets offer coffee drinks and food items, as well as roasted beans, coffee accessories, and teas. Starbucks operates more than 10,700 of its own shops, which are located mostly in the United States, while licensees and franchisees operate roughly 10,600 units worldwide (including many locations in shopping centers and airports). In addition, Starbucks markets its coffee through grocery stores, food service customers, and licenses its brand for other food and beverage products.

Starbucks ranks #187 in Fortune 500 and is traded on the NASDAQ under the symbol "SBUX". In 2015 Starbucks had sales of $19.16 billion and a net worth of $5.82 billion.

TENANT PROFILE

GUARANTOR ENTITY Starbucks Corporation

OWNERSHIP

Public

TENANT

Starbucks

LEASE GUARANTOR

Corporate Guarantee

NUMBER OF LOCATIONS 22,700+

HEADQUARTERED

Seattle, WA

WEB SITE



ARTIST REPRESENTATION

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of ? 2016 Marcus & Millichap. Activity ID # X0332302

Concept Overview - Starbucks Evenings

725 West 81st Street - MERRILLVILLE, INDIANA 46410

The Starbucks Evening program, which initially launched in Seattle, Washington in October 2010, consists of a menu of wine and beer as well as a selection of a few light, savory bites available after 4pm. The wine options are available by the glass or bottle and the beer is sold in bottles only. In the U.S., the wine menu varies by location and offers a mix of local and international wines from both small and large wineries.

The Starbucks Evenings program also commands certain premium details to enhance the high-end feel of the menu. The food items are served on elegant flatware and with silverware instead of plastic utensils, wine is served in contemporary stem-less goblets and beer is served in custom glassware. Starbucks Evenings locations are also selling the wine goblets which are branded with the Starbucks name printed with a selection of four unique phrases on them. The wine glasses are manufactured by Riedel, a high-end brand of glassware.

As with regular orders at the store locations, food and beverage orders during the Starbucks Evenings are also placed with the barista, unlike full restaurant service. The regular coffee menu is also still available during the evenings.

According to the Seattle Times, Starbucks hopes to roll the Starbucks Evenings menu out to up to a quarter of its 12,000 U.S. store locations. This is all part of a five-year-plan to nearly double its yearly revenue to $30 billion. Just by offering these small plates, executives estimate that they'll double food revenue alone to $4 billion.

Representative Photo

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of ? 2016 Marcus & Millichap. Activity ID # X0332302

Aerial Overview

725 West 81st Street - MERRILLVILLE, INDIANA 46410

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of ? 2016 Marcus & Millichap. Activity ID # X0332302

Area Overview & Demographics

725 West 81st Street - MERRILLVILLE, INDIANA 46410

Lansing Munster

Glenwood

83

394

Lynwood

Ford Heights 30

Black Oak

94

Highland

6

65 New Chicago

Liverpool

6

Griffith

Ross

41

55

53

65

Hobart

130

Dyer Sauk Village

30

New Elliott

Schererville 30

394

Willowbrook

41 St John

Kreitzburg

231

5 MILE RADIUS 3 MILE RADIUS MILE

SITE

Ainsworth Merrillville Green Acres

30

1

55

53

65

Crown Point

Winfield Deer Creek

6 149

Wheeler

130

30 Westhill

2 Aberdeen

Population 2000 Population 2010 Population 2016 Population 2021 Population

41 Brunswick

55

Palmer

2

231

1-Mile

3,245 5,088 5,240 5,245

3-Mile 5-Mile

33,169 41,348 41,335 41,110

87,902 99,783 100,149 99,687

Households 2000 Households 2010 Households 2016 Households 2021 Households

1-Mile 3-Mile 5-Mile

1,375 2,329 2,387 2,386

12,603 16,039 16,049 15,964

32,209 37,700 37,892 37,729

1-Mile Household (HH) Incomes 2016 Average HH Income $55,127 2016 Median HH Income $47,348 2016 Per Capita Income $25,112

3-Mile

$65,296 $55,107 $25,352

5-Mile

$69,027 $56,607 $26,117

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of ? 2016 Marcus & Millichap. Activity ID # X0332302

Market Overview - Merrillville, Indiana

725 West 81st Street - MERRILLVILLE, INDIANA 46410

Merrillville, Indiana, in Lake county, is seven miles south of Gary, Indiana and 30 miles southeast of Chicago, Illinois. The town is included in the Gary Metropolitan Area. Known as "Downtown Northwest Indiana," the town of Merrillville is known for its many restaurants, banks, malls, and businesses typical of American suburbia. The town is centered on the intersection of Interstate 65 and US Route 30, which is also known as Lincoln Highway/81st Ave. The US Route 30 Corridor in Merrillville is a hub for retail trade in Northwest Indiana. Merrillville is home to the corporate headquarters of NiSource, Incorporated (NYSE:NI), a fortune 500 company (2015). One of the largest utility companies in the United States, NiSource serves over 3.5 million national gas customers and 500,000 electric customers across seven states and employs 7,000 people. In 2015, the company did $4.65 billion in sales.

The town has many outdoor and indoor facilities for recreation. Merrillville has a large concentration of hotels, big box retailers, restaurants, and automobile dealerships. The city also has several parks with excellent amenities. There are a number of golf courses and forest preserves around the area as well.

Neighboring Retailers and Corporate Complex in Merrillville, Indiana

Mr. Josh Caruana Vice President/Regional Manager Marcus & Millichap Real Estate Investment Services | Brokerage Josh.Caruana@ | Indianapolis Office | 600 E. 96th Street | Suite 500 | Indianapolis, IN 46240 | Office: (317) 218-5300

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of ? 2016 Marcus & Millichap. Activity ID # X0332302

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