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OFFERING MEMORANDUM

KOHL’S3 3 0 1 3 2 n d A v e S o u t h G r a n d F o r k s , N D 5 8 2 0 1

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South Columbia O�ce Development

±21,000 ADT

Lindsay TsumpesAVP & DirectorLindsay.Tsumpes@matthews.comDIR 949.873.0270 MOB 310.880.8418 Lic. No. 01954256 (CA)

For mor information contact:El WarnerEVP & National DirectorEl.Warner@matthews.comDIR 949.873.0507MOB 858.752.3078Lic No. 01890271 (CA)

Blake KrabsethWatne Realtorsblake@minothomes.com408 N Broadway, Minot, ND 58073DIR (701) 852-1156MOB (701) 720-1786LIC # 7047 (ND)

Kyle MatthewsChairman & CEOKyle.Matthews@matthews.comDIR 310.919.5757MOB 310.622.3161Lic No. 01469842 (CA)

S u b j e c t P r o p e r t y

KOHL’STABLE OF CONTENTS

3 3 0 1 3 2 n d A v e S o u t h G r a n d F o r k s , N D 5 8 2 0 1

04 I n v e s t m e n t O v e r v i e w

10 P r o p e r t y D e t a i l s

12 A r e a O v e r v i e w

16 Te n a n t O v e r v i e w

Blake KrabsethWatne Realtorsblake@minothomes.com408 N Broadway, Minot, ND 58073DIR (701) 852-1156MOB (701) 720-1786LIC # 7047 (ND)

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InvestmentOverview

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OFFERING SUMMARY Matthews Real Estate Investment Services is pleased to present the fee simple sale of a single-tenant Kohl’s, located in the city of Grand Forks, North Dakota on the southeast corner of 32nd Avenue South and South 34th Street.

The property is strategically located along a strong retail corridor only three miles from the University of North Dakota, which serves over 14,600 students. The oldest university in the state, University of North Dakota is a nationally ranked public research university offering over 200 fields of study and competing in Division I of the National Collegiate Athletic Association (NCAA).

This property is an excellent opportunity for an investor to acquire a publicly traded investment grade tenant (NYSE: KSS), 100% leased to Kohl’s with minimal landlord responsibility. Kohl’s is shadow anchored by both Hobby Lobby and Ashley Furniture HomeStore, which bring in additional consumers to the shopping center. This property is an ideal exchange candidate that provides stability in a trade area poised for growth.

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INVESTMENT HIGHLIGHTS• Nationally recognized investment grade tenant:

Lease is guaranteed by Kohl’s Corporation (Standard & Poor’s: BBB-; Moody’s: Baa2)

• Ease of Management: Ground lease with minimal landlord responsibilities

• Optimal Footprint: At ±68,890 SF, the smaller format is aligned with Kohl’s preferred size and strategy moving forward

• Signalized Intersection: Great access and visibility with multiple points of ingress and egress

• Located in Shopping Center with National Anchors: Shadow anchored by Hobby Lobby and Ashley Furniture HomeStore along with other food and service oriented tenants, which increase consumer draw and foot traffic to the shopping center

• Growing Community: Double digit population growth over the past 10 years and a projected increase in population of approximately 5% in the next 5 years in a 1-mile radius

• Strong Demographics: Average household income of nearly $69,000 and a population of approximately 52,000 in a 3-mile radius

• Situated Along Retail Corridor: Strong neighboring tenants in the trade area include Lowe’s, Target, Menards, Walmart Supercenter, Sam’s Club, CVS, Columbia Mall, and more

• Provided Free and Clear of Debt: Ability to take advantage of low financing costs

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M o n t h l y R e n t A n n u a l R e n t R e n t / S F

Lease Years 1-10: 10/5/2006-1/31/2017 $47,704 $572,450.00 $8.31

Lease Years 11-20: 2/1/2017 - 1/31/2027 $50,089 $601,072.50 $8.73

Option 1: 2/1/2027 - 1/31/2032 $52,594 $631,126.13 $9.16

Option 2: 2/1/2032 - 1/31/2037 $55,224 $662,682.43 $9.62

Option 3: 2/1/2037 - 1/31/2042 $57,985 $695,816.55 $10.10

Option 4: 2/1/2042 - 1/31/2047 $60,884 $730,607.38 $10.61

Option 5: 2/1/2047 - 1/31/2052 $63,928 $767,137.75 $11.14

Option 6: 2/1/2052 - 1/31/2057 $67,125 $805,494.64 $11.69

Option 7: 2/1/2057 - 1/31/2062 $70,481 $845,769.37 $12.28

Option 8: 2/1/2062 - 1/31/2067 $74,005 $888,057.84 $12.89

ANNUALIZED OPERATING DATAList Price

Cap Rate

Gross Leasable Area

Lot Size

Year Built

$8,300,000

7.25%

± 68,890 SF

±284, 280 SF (±6.53 Acres)

2006

EXECUTIVE SUMMARY

Tenant Kohl's Illinois, Inc.

Tenant Trade Name Kohl's

Guarantor Kohl's Department Stores, Inc.

Type of Ownership Leased Fee

Lease Type Ground Lease

Landlord Responsibility Roof and Structure

Lease Date 11/29/05

Rent Commencement Date 10/5/06

Lease Expiration Date 1/31/27

Term Remaining on Lease ±9.30 Yrs

Increases 5% Every Option Period

Options Eight 5-Year Options

TENANT SUMMARY

FINANCIALS

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Market Debt Quote

Principle Loan Amount $5,395,000

Loan to Value 65%

Interest Rate 4.40%

Term 7 Years

Amortization 25 Years

Annual Debt Service $356,181

Loan quote provided by Brian Krebs of Barrington Capital based on market conditions at this point in time. Actual rates and terms will vary based on market conditions at closing. Please contact Brian at the information below:

Phone: (310) 844-9361

Email: brian.krebs@barringtoncapcorp.com

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LEASE ABSTRACTTenant: Kohl's Illinois, Inc.

Tenant Trade Name: Kohl's

Guarantor: Kohl's Department Stores, Inc.

Address: 3301 32nd Ave. South Grand Forks, ND 58201

Size: ±68,890

Lease Date: 11/29/05

Rent Commencement: 10/5/06

Lease Expiration: 1/31/27

Renewal Options: 8 (Eight) 5 (Five) Year Options

Required Advance Notice of Exercise Options: Six (6) months prior to the end of the initial Term or then current extended term

Current Rent: $601,072.50

Rent Increases: 5% Every 10 Years and 5% in Each Option Term

Real Estate Taxes: Tenant responsible to pay real estate taxes

Insurance: Tenant responsible to pay insurance costs

Utilities: Tenant responsible to pay utilities

Repair and Maintenance: Tenant responsible for repair and maintenance of the Building. Landlord responsible for roof and structure.

Common Areas: Tenant shall, at its sole cost and expense, operate, maintain and repair the Common Areas on Tenant's Tract in accordance with the REA. The REA shall provide that Land Owner shall, at its sole cost and expense, operate, maintain and repair the balance of the Common Areas and the Shopping Center in accordance with the REA.

Operation of Shopping Center: Land Owner required to maintain the balance of the shopping center exclusive of the premises in accordance with the terms of the REA.

Tenant Assignment and Subletting:Tenant shall have the right, at any time, to grant licenses or subleases of departments or concessions for the sale of merchandise and services in or from the portions of the Premises

covered by such departments or licenses or assign this Lease or sublet all or any portion of the Premises. If assignee has a tangible net worth equal to or greater than $100,000,000 and assumption by such assignee of Tenant's obligations under the lease, Tenant and Guarantor shall be released from all further liability.

Alterations: At its own expense, Tenant may make alterations, changes, additions and improvements to the Building as long as the structural integrity of the Building is not adversely affected.

Holdover Tenancy: Month-to-Month tenancy at 1.5 times minimum rent payable during last month of then current term.

Exclusive Use: No space within the Shopping Center, other than the Premises, shall be used by any occupant to operate a department store with over 40,000 square feet of Floor Area of which no more than twenty percent (20%) of the Floor Area of such business is used for the sale of apparel.

Right of First Offer: Landlord shall offer Tenant the right to purchase the First Offer Interest by sending to Tenant a written notice of the specific terms of an offer to sell prior to offering to sell the Premises to a proposed purchaser.

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PropertyDetails

S u b j e c t P r o p e r t y

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Property Name Kohl's

Address 3301 32nd Ave. South

Location Grand Forks, ND 58201

Cross Street South 34th St.

Square Footage (GLA) ±68,890

Land Area ±284,280 SF (±6.53 Acres)

APN 44-2610-002-06

Year Built 2006

Type of Ownership Fee Simple

Zoning Planned Unit Development (PUD)

Number of Stories One

Parking ±345 Surface Spaces

Parking Ratio ±5.01:1,000 SF

PROPERTY INFORMATION PARCEL MAP

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AreaOverview

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GRAND FORKS AT A GLANCE

3RD LARGEST CITY IN THE STATE

TOTAL POPULATION

3

$5.5B GROSS METRO PRODUCT

63,000

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CITY OVERVIEWThe City of Grand Forks is North Dakota’s 3rd largest city. Located along the Red River of the North, Grand Forks has a population of over 63,000. Grand Forks, along with its twin city of East Grand Forks, Minnesota, forms the center of the Grand Forks, ND-MN Metropolitan Statistical Area, which is often called Greater Grand Forks or The Grand Cities.

Historically dependent on local agriculture, the city’s economy now encompasses higher education, defense, health care, manufacturing, food processing, and scientific research. Grand Forks is served by Grand Forks International Airport and Grand Forks Air Force Base. Located in Grand Forks, theUniversity of North Dakota is the oldest institution of higher education in the state. The Alerus Center and Ralph Engelstad Arena host athletic and other events, while the North Dakota Museum of Art, and Chester Fritz Auditorium are the city’s largest cultural venues.

HOME TO THE UNIVERSITY OF NORTH DAKOTA

REGIONAL MAP

S U B J E C T P R O P E R T Y

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UNIVERSITY OF NORTH DAKOTAThe University offers a variety of professional and specialized programs, including the only schools of law and medicine in the state of North Dakota. Its best-known college is perhaps its John D. Odegard School of Aerospace Sciences, which is the first in the country to offer a degree in unmanned aircraft systems operations and is competitively ranked as one of the world’s top schools of aviation and aerospace. UND is classified by the Carnegie Foundation as having high research activity and is considered one of the top academic and research institutions in the northern Midwest. UND is widely regarded as the top university in the American Northern Plains region.

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15,000Students

17NCAA Division 1 athletics teams

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GRAND FORKS AIR FORCE BASEGrand Forks Air Force Base is a United States Air Force installation in northeastern North Dakota, located north of Emerado and 16 miles west of Grand Forks. Opened 60 years ago in early 1957, the base’s current host unit is the 319th Air Base Wing (319 ABW) assigned to the Expeditionary Center of the Air Mobility Command (AMC). During the Cold War, GFAFB was a major installation of the Strategic Air Command (SAC), with B-52 bombers, KC-135 tankers, and Minuteman intercontinental ballistic missiles.

ECONOMIC DEVELOPMENTCommunity leaders have long seen UND as an “economic engine” for the city. Besides its regular faculty, it also has business-like components such as the Energy and Environmental Research Center. UND hosts a technology incubator called the Center for Innovation. More recently, the University has been working to commercialize its research. A major thrust in that direction is the construction of a research park on the western fringes of the campus. Another potential economic opportunity for the city is the addition of the unmanned aerial vehicle (UAV) mission to Grand Forks Air Force Base.

The retail and service sector is also an important part of the economy. The historic center of shopping in Grand Forks was the downtown area. Today, downtown is home to small shops and restaurants and south Grand Forks has become the major retail district in the city. Grand Forks has three large shopping centers. The oldest, Grand Cities Mall, is on South Washington Street and contains mainly small, locally owned stores as well as a Kmart. With about 80 stores, the area’s largest indoor mall is Columbia Mall which is anchored by Scheels, Sears, J.C. Penney, and a small food court. The newest major shopping center in the city is the Grand Forks Marketplace power center mall which features Super Target, Best Buy, Lowe’s, Gordmans, and several smaller stores.

DEMOGRAPHICSPopulation 1-Mile 3-Mile 5-Mile2022 Projection 6,430 45,038 58,7212017 Estimate 7,658 48,274 63,1412010 Census 8,583 52,037 67,5842000 Census 9,042 53,887 69,925Growth 2017 to 2022 5.35% 3.56% 3.46%Growth 2010 to 2017 12.08% 7.79% 7.04%Growth 2000 to 2010 19.10% 7.18% 7.53%

Households 1-Mile 3-Mile 5-Mile2022 Projection 4,486 23,380 30,1862017 Estimate 4,238 22,324 28,8652010 Census 3,740 20,186 26,3292000 Census 2,932 17,783 23,214Growth 2017 to 2022 27.56% 13.51% 13.42%Growth 2010 to 2017 13.32% 10.59% 9.63%Growth 2000 to 2010 5.85% 4.73% 4.58%

Income 1-Mile 3-Mile 5-Mile2017 Est. Average Household Income $64,265 $68,890 $68,649 2017 Est. Median Household Income $45,076 $47,751 $48,961

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TenantOverview

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T E N A N T R E P O R TParent Company Trade Name Kohl’s Department Store, Inc. (NYSE: KSS)

Ownership Public

Credit Rating (S&P’s) BBB-

Revenue $19.023 B

No. of Locations ± 1,162

No. of Employees ± 32,000

Headquartered Menomonee Falls, WI

Website www.kohls.com

Year Founded 1962

KOHL’S OVERVIEWKohl’s operates about 1,158 discount department stores in 49 states. Nearly half of its stores are in the Midwest and West, where Kohl’s continues to grow while rapidly expanding into other markets. Moderately priced name-brand and private-label apparel, shoes, accessories, and housewares are sold through centrally located cash registers, designed to speed checkout and keep staff costs down. Kohl’s competes with discount and mid-level department stores. Merchandising relationships allow Kohl’s to carry top brands (NIKE, Levi’s, OshKosh B’Gosh) not typically available to discounters. To support its brick-and-mortar and online businesses, Wisconsin-based Kohl’s maintains a network of more than a dozen distribution centers nationwide. During the important holiday selling season, the apparel chain ships selected online orders from its store distribution centers rather than its e-commerce fulfillment centers. The company also operates design studios in New York City and in Santa Monica, California.

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CONFIDENTIALITY & DISCLAIMER STATEMENT:This Offering Memorandum contains select information pertaining to the business and affairs of Kohl’s located at 3301 32nd Ave South, Olathe, KS 58201 (“Property”). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum for the Property, you agree:

1 . The Offering Memorandum and its contents are confidential;2. You will hold it and treat it in the strictest of confidence; and3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest

of the Seller.

Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketingor sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.

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Lindsay TsumpesAVP & DirectorLindsay.Tsumpes@matthews.comDIR 949.873.0270 MOB 310.880.8418 Lic. No. 01954256

For more information contact:Blake KrabsethWatne Realtorsblake@minothomes.com408 N Broadway, Minot, ND 58073DIR (701) 852-1156MOB (701) 720-1786LIC # 7047

El WarnerEVP & National DirectorEl.Warner@matthews.comDIR 949.873.0507MOB 858.752.3078Lic No. 01890271

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KOHL’S3 3 0 1 3 2 n d A v e S o u t h G r a n d F o r k s , N D 5 8 2 0 1

Kyle MatthewsChairman & CEOKyle.Matthews@matthews.comDIR 310.919.5757MOB 310.622.3161Lic No. 01469842 (CA)