walgreens corporate net lease 24 hour...

214.915.8890

BOB MOORHEAD

[email protected]

JOE CAPUTO

[email protected]

RUSELL SMITH

[email protected]

NEW OFFERING | $7,745,000 – 5.25% CAP

WALGREENS – CORPORATE NET LEASE – 24 Hour Location

200 W. Commerce st, Brownwood, TX

Property. 14,820+ SF of building area on 1.62+ acre site.

Tenant. Walgreens is the #1 pharmacy in America, operating 8,309 stores in all 50 states, DC, Puerto Rico, and U.S. Virgin Islands. Net sales for the fiscal year

ended August 31, 2014 were $76.4 billion.

Lease structure. Initial 75-year lease commenced October 2008, with standard options to terminate after year 25, leaving 18+ years remaining of firm term.

Location. Walgreen’s is located along W. Commerce St. ”Hwy 84” (25,000 Cars / Day). W. Commerce is a main arterial road that serves Brownwood and the

immediate trade area. This location provides great access to nearby Brownwood Lake residents and to travelers throughout the region. The property is surrounded

by notable national credit tenants such as Walmart, Home Depot, Kroger, Staples, CVS, Sally Beauty Supply, Cato, Hibbett Sports, Beal's, O’Reilly, Firestone,

AutoZone, Tractor Supply, Dollar General, Chili’s, Buffalo Wild Wings, CiCi’s, McDonald's, Taco Bell, Whataburger, Sonic, and many more. Centrally located in the

state of Texas, Brownwood provides easy access to markets across the state and the large emerging markets in Mexico. The city is located approximately 135

miles northwest of Austin, 120 miles southwest of Fort Worth, 75 miles southeast of Abilene and 95 miles east of San Angelo. Brownwood resides in Brown

County, whose 2010 population is estimated to be 38,106.

REPRESENTATIVE PHOTO

Trivanta (“Agent”) has been engaged as an agent for the sale of the property located at 200

W. Commerce St. by the owner of the Property (“Seller”). The Property is being offered for

sale in an “as-is, where-is” condition and Seller and Agent make no representations or

warranties as to the accuracy of the information contained in this Offering Memorandum.

The enclosed materials include highly confidential information and are being furnished

solely for the purpose of review by prospective purchasers of the interest described herein.

The enclosed materials are being provided solely to facilitate the prospective investor’s own

due diligence for which it shall be fully and solely responsible. The material contained herein

is based on information and sources deemed to be reliable, but no representation or

warranty, express or implied, is being made by Agent or Seller or any of their respective

representatives, affiliates, officers, employees, shareholders, partners and directors, as to

the accuracy or completeness of the information contained herein. Summaries contained

herein of any legal or other documents are not intended to be comprehensive statements of

the terms of such documents, but rather only outlines of some of the principal provisions

contained therein. Neither the Agent nor the Seller shall have any liability whatsoever for

the accuracy or completeness of the information contained herein or any other written or

oral communication or information transmitted or made available or any action taken or

decision made by the recipient with respect to the Property. Interested parties are to make

their own investigations, projections and conclusions without reliance upon the material

contained herein. Seller reserves the right, at its sole and absolute discretion, to withdraw

the Property from being marketed for sale at any time and for any reason. Seller and Agent

each expressly reserves the right, at their sole and absolute discretion, to reject any and all

expressions of interest or offers regarding the Property and/or to terminate discussions with

any entity at any time, with or without notice. This offering is made subject to omissions,

correction of errors, change of price or other terms, prior sale or withdrawal from the market

without notice. Agent is not authorized to make any representations or agreements on

behalf of Seller. Seller shall have no legal commitment or obligation to any interested party

reviewing the enclosed materials, performing additional investigation and/or making an offer

to purchase the Property unless and until a binding written agreement for the purchase of

the Property has been fully executed, delivered, and approved by Seller and any conditions

to Seller’s obligations hereunder have been satisfied or waived. By taking possession of

and reviewing the information contained herein, the recipient agrees that (a) the enclosed

materials and their contents are of a highly confidential nature and will be held and treated

in the strictest confidence and shall be returned to Agent or Seller promptly upon request;

and (b) the recipient shall not contact employees or tenants of the Property directly or

indirectly regarding any aspect of the enclosed materials or the Property without the prior

written approval of the Seller or Agent; and (c) no portion of the enclosed materials may be

copied or otherwise reproduced without the prior written authorization of Seller and Agent.

PAGE 3: INVESTMENT | TENANT | LEASE OVERVIEW

PAGE 1: COVER

PAGE 2: TABLE OF CONTENTS | DISCLAIMER

PAGE 11: DEMOGRAPHICS

Table of contents | Disclaimer WALGREENS – CORPORATE NET LEASE


PAGE 8: LOCATION OVERVIEW

PAGE 9-10: LOCATION MAPS

Disclaimer

PAGE 5-6: AERIAL PHOTOS

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PAGE 4: TENANT OVERVIEW CONTINUED

PAGE 7: SITE PLAN

Percentage Rent: 2% of gross sales (excluding food and prescription),

and .5% of food & prescription sales items (excluding

Third Party Prescription Plans).

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SUBJECT PROPERTY PRIOR TO PANDA EXPRESS EXPANSION

WALGREENS | www.walgreens.com | S&P Rating: BBB

Walgreens is the #1 pharmacy in America by any measure. Walgreens provides the most convenient access to consumer goods and services, and pharmacy,

health and wellness services, in America. They sell prescription and non-prescription drugs as well as general merchandise, including convenience and fresh

foods, household items, personal care, photofinishing and beauty care. Their pharmacy, health and wellness services include retail, specialty, infusion and

respiratory services, mail service, convenient care clinics and wellness centers. These services help improve health outcomes for patients and manage costs for

payers including employers, managed care organizations, health systems, pharmacy benefit managers and the public sector.

The company has recorded 34 consecutive years of record sales and earnings, a track record matched by only one other Fortune 500 company. Founded in 1901,

and traded on the New York Stock Exchange (NYSE:WAG), Walgreens operates 8,309 stores in all 50 states, DC, Puerto Rico, and U.S. Virgin Islands (as of Aug.

31, 2014), . In 2014, the Company opened or acquired 268 locations. Acquisitions included Kerr Drug, which contributed 76 drugstore locations as well as a

specialty pharmacy and a distribution center. Net sales for the fiscal year ended August 31, 2014 were $76.4 billion.

As of August 2014, approximately 76% of the United States population lived within five miles of a Walgreens and an average of 6.2 million shoppers visited their

stores daily in fiscal 2014. In addition to store traffic, their websites, including Walgreens.com and drugstore.com, received an average of approximately 59.7

million visits per month in fiscal 2014. Walgreens is widely regarded as the safest, most secure single-tenant NNN leased investment property because of its

strong balance sheet and market capitalization

Link to 2014 10-K Annual Report: http://www.walgreensbootsalliance.com/newsroom/news/walgreens-boots-alliance-2014-10ka-annual-report.htm

PRICE: $7,745,000

CAP RATE: 5.25%

NET OPERATING INCOME $406,593

TOTAL BUILDING AREA: 14,820+ Square Feet

LAND AREA: 1.62+ Acres

LANDLORD RESPONSIBILITY: None

YEAR BUILT: 2008

OWNERSHIP: Fee Simple Interest

OCCUPANCY: 100%

Tenant overview

Investment |TENANT | LEASE overviewWALGREENS – CORPORATE NET LEASE


Tenant: WALGREEN CO., an Illinois corporation

Lease Expiration: October 2083

Rent Commencement: October 2008

Lease Term: 75 Years

Current Rent: $406,593

Lease Type: Absolute NNN

Lease overview

Termination Option: Anytime after October 2033 w/ 12 Months Notice

Right of First Refusal: Yes, tenant has option within 20 days of receipt

Rent Increases: None

Term Remaining on Lease: 18+ Years

http://www.walgreensbootsalliance.com/newsroom/news/walgreens-boots-alliance-2014-10ka-annual-report.htm

2014 MILESTONESWalgreens is the nation’s largest drugstore chain, with fiscal 2014 net sales of $76.4 billion

and net earnings of $1.9 billion. The company has 251,000 employees, and 8,309 locations.

Cash flow from operations for fiscal 2014 was $3.9 billion, with record free cash flow of $2.8

billion.

The company continued to return significant cash to shareholders, with $1.2 billion in

dividends.

On 31 December 2014, Walgreens Boots Alliance became the successor of Walgreen Co.

pursuant to a merger designed to effect a reorganization of Walgreens into a holding

company structure. Walgreens became a wholly-owned subsidiary of Walgreens Boots

Alliance, a newly-formed Delaware corporation whose common stock trades on the Nasdaq

Stock Market under the trading symbol WBA.

Walgreens Boots Alliance, Inc., has a presence in more than 25 countries, employs over

370,000 people and is the largest retail pharmacy, health and daily living destination in the

USA and Europe, and (including equity method investments):

• The global leader in pharmacy-led, health and wellbeing retail with over 12,800 stores in

11 countries;

• The largest global pharmaceutical wholesale and distribution network with over 340

distribution centers delivering to more than 180,000 pharmacies, doctors, health centers

and hospitals each year in 19 countries; and

• The world’s largest purchaser of prescription drugs and many other health and wellbeing

products.

2013 MILESTONES

Walgreens stabilized its commercial book of pharmacy business through multiyear

agreements reach with Express Scripts Inc., Caremark and other leading commercial players.

Walgreens introduced its Healthcare Clinic at select Walgreens as the new branding for

nearly 400 in-store retail clinics, replacing the former Take Care Clinic name that has stood

since the brand’s inception in 2004.

RANKINGS & RATINGS

Fortune magazine World’s Most Admired CompaniesPublished March 2014

Walgreens ranked No. 5 among food & drugstores and is listed for the 21st consecutive year.

Fortune magazine 500 Largest U.S.-Based CompaniesPublished May 2013

Walgreens ranked 37th overall in revenue, third among food and drugstores.

Fortune magazine Global 500 Largest CompaniesPublished July 2013

Walgreens ranked 120th overall in revenue.

Forbes Global 2000Published April 2013

Walgreens ranked 203rd on this list of the 2000 largest public companies worldwide.

Fast Company magazine “Fast 50” issuePublished February 2013

Walgreens ranked as the 7th most innovative health care company for its leadership in

redefining the role of the pharmacy. The magazine cited new mobile app features that help

patients manage their medications as well as the company's partnerships with the CDC and

the Department of Health and Human Services to expand in-store HIV testing, which created

a new standard for the patient-pharmacy relationship.

Fortune magazine Global Most Admired CompaniesPublished March 17, 2008

Walgreens ranked seventh among food and drugstores and No. 36 among the 50 most

admired companies.

Fortune magazine 40 Best Stocks To Retire OnPublished June 23, 2008

Walgreens made the list of recommended Bargain Growth stocks.

Forbes Platinum 400 ListPublished January 12, 2009

Walgreens again made this list of the best performing big companies in the United States.

TENANT OVERVIEW CONTINUEDWALGREENS – CORPORATE NET LEASE


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Aerial photoWALGREENS – CORPORATE NET LEASE


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Riverside

Park

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Pet Clinic

General Power

Western Bank

Mix-Use

Commercial

Donut Palace

Cash

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La Botana



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IMMEDIATE TRADE AREA

Walgreen’s is located along W. Commerce St. ”Hwy 84” (25,000 Cars / Day).

W. Commerce is a main arterial road that serves Brownwood and the

immediate trade area. This location provides great access to nearby

Brownwood Lake residents and to travelers throughout the region. The

property is surrounded by notable national credit tenants such as Walmart,

Home Depot, Kroger, Staples, CVS, Sally Beauty Supply, Cato, Hibbett Sports,

Beal's, O’Reilly, Firestone, AutoZone, Tractor Supply, Dollar General, Chili’s,

Buffalo Wild Wings, CiCi’s, McDonald's, Taco Bell, Whataburger, Sonic, and

many more.

BROWNWOOD, TX

Centrally located in the state of Texas, Brownwood provides easy access to

markets across the state and the large emerging markets in Mexico. The city is

located approximately 135 miles northwest of Austin, 120 miles southwest of

Fort Worth, 75 miles southeast of Abilene and 95 miles east of San Angelo.

Brownwood resides in Brown County, whose 2010 population is estimated to

be 38,106. The City of Brownwood is a dominant part of the population of

Brown County, with an estimated population of about 20,000.

Brownwood is the hub of an eight county market for retail, employment,

medical care and entertainment. The local economy boasts international

industries alongside regional and hometown businesses. The work-force is

strong and employment remains higher than state and national trends.

Brownwood has award-winning schools and multiple higher education

opportunities. Brownwood's eight county retail trade area offers well over

100,000 total population of potential customers and workforce. This includes

Brown, Callahan, Eastland, Coleman, Comanche, Mills, McCulloch, and San

Saba counties. The largest three industries by employment in Brown County

are Health Services & Private Education (23% of jobs), Manufacturing (19%),

and Government (19%). Trade, Transportation, & Utilities, which includes retail,

is a close fourth with 17% of county jobs. These four industry sectors comprise

a vast majority (77%) of the county’s employment.

Brownwood is less than 50 miles from I-20 and approximately 100 miles from I-

10 & I-35. BNSF Railway also serves Brownwood. BNSF is a critical link that

connects consumers with the global marketplace. For more than 160 years,

BNSF has played a vital role in building and sustaining this nation's economy.

BNSF Railway is the product of nearly 400 different railroad lines that merged

or were acquired over the course of 160 years.

Location overviewWALGREENS – CORPORATE NET LEASE


Brownwood Regional Airport is located on U.S. 183, five miles north of

Brownwood. The airport has two large commercial hangers, three "T" hangars,

a patio-type hangar, a terminal, and a FedEx facility. Lake Brownwood State

Park is a treasure of the Hill Country with 537 acres of lush grounds

surrounded by Lake Brownwood, a 7,300 surface-acre-reservoir. Many

structures in use today were constructed by the Civilian Conservation Corps

(CCC) in the early 1930's, from the timber and native rock found in the park.

BROWN COUNTY, TX

Brown County’s population growth rate has been modest compared to the

State of Texas and its large metros, but is actually more robust than most rural

Texas counties over the past century. Over the past decade, Brown County

averaged population growth of 0.1% per year, with higher gains in the mid

2000’s, compared to a growth rate of approximately 0.9% in the US and rapid

average annual growth of 1.9% in Texas.

Manufacturing is both Brown County’s largest and most concentrated private-

sector industry cluster. Primary manufacturing industries include: printing,

fabricated metal product manufacturing, and machinery manufacturing.

The majority of manufacturing jobs in Brown County, approximately 2,400, do

not have their subsectors disclosed in recent government data, but are most

likely employed at the 3M, Kohler, and Superior Essex facilities in Brownwood.

One of Brownwood’s unique advantages is its significant presence of national

manufacturers and emerging local firms supplying oil field operations, wind,

and other energy businesses. Brownwood is a hub of business activity in Mid-

West and West Texas that will continue to strengthen as energy markets propel

forward.

3M Brownwood was constructed in 1964 and manufactures materials for

highway signs, license plates, and protective clothing. The 816,000 square foot

3M facility operates a lean manufacturing station, requiring a diverse range of

highly skilled engineers, technical workers, and other positions.

Kohler Co. - like 3M - is a longstanding anchor of Brownwood's economy and

has an active presence in local initiatives. The multinational corporation

operates a manufacturing facility for its Kitchen & Bath division in Brownwood.

Superior Essex Inc. is a global manufacturer of wire and cable products,

operating one of their communication cable manufacturing facilities in

Brownwood. The Brownwood plant was the first to receive fiber optic cable

because it is the most productive plant in the company.

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Location mapWALGREENS – CORPORATE NET LEASE


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Location mapWALGREENS – CORPORATE NET LEASE


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2015 Estimated Population 2,705 17,279 24,389

2020 Projected Population 2,705 17,250 24,323

2010 Census Population 2,532 17,056 24,227

2000 Census Population 2,927 17,149 24,244

Projected Annual Growth 2015 to 2020 - - -0.1%

Historical Annual Growth 2000 to 2015 -0.5% 0.1% -

2015 Estimated Households 944 6,888 9,580

2020 Projected Households 962 7,005 9,734

2010 Census Households 853 6,594 9,215

2000 Census Households 969 6,572 9,048

Projected Annual Growth 2015 to 2020 0.4% 0.3% 0.3%

Historical Annual Growth 2000 to 2015 -0.2% 0.3% 0.4%

2015 Est. Population Under 10 Years 11.4% 13.7% 13.2%

2015 Est. Population 10 to 19 Years 19.2% 15.1% 14.7%





2015 Est. Population 75 Years or Over 5.3% 7.0% 8.3%

2015 Est. Median Age 31.1 34.0 35.9

2015 Est. Male Population 50.1% 48.9% 48.5%

2015 Est. Female Population 49.9% 51.1% 51.5%

2015 Est. Never Married 38.3% 26.0% 25.7%

2015 Est. Now Married 26.3% 43.3% 44.2%

2015 Est. Separated or Divorced 22.9% 20.8% 20.5%

2015 Est. Widowed 12.5% 9.9% 9.6%

2015 Est. HH Income $200,000 or More 1.6% 1.2% 1.8%

2015 Est. HH Income $150,000 to $199,999 - 1.0% 1.2%

2015 Est. HH Income $100,000 to $149,999 0.8% 5.8% 7.4%

2015 Est. HH Income $75,000 to $99,999 1.7% 9.0% 10.7%

2015 Est. HH Income $50,000 to $74,999 7.2% 13.1% 14.5%

2015 Est. HH Income $35,000 to $49,999 12.7% 15.9% 15.9%

2015 Est. HH Income $25,000 to $34,999 9.9% 15.5% 14.3%

2015 Est. HH Income $15,000 to $24,999 20.0% 17.4% 16.0%

2015 Est. HH Income Under $15,000 46.0% 21.1% 18.2%

2015 Est. Average Household Income $31,197 $44,542 $50,823

2015 Est. Median Household Income $19,893 $36,041 $40,848

2015 Est. Per Capita Income $11,704 $17,937 $20,279

2015 Est. Total Businesses 533 1,045 1,439

2015 Est. Total Employees 5,057 9,712 15,947

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200 W Commerce St1 mi radius 3 mi radius 5 mi radius

Brownwood, TX 76801-1806

2015 Est. Labor Population Age 16 Years or Over 2,232 13,478 19,192

2015 Est. Civilian Employed 35.5% 51.0% 51.1%

2015 Est. Civilian Unemployed 1.7% 1.5% 1.5%

2015 Est. in Armed Forces - 0.1% 0.2%

2015 Est. not in Labor Force 62.8% 47.4% 47.2%

2015 Labor Force Males 49.6% 48.3% 47.8%

2015 Labor Force Females 50.4% 51.7% 52.2%

2010 Occupation: Population Age 16 Years or Over 826 6,671 9,827

2010 Mgmt, Business, & Financial Operations 5.2% 8.9% 8.6%

2010 Professional, Related 7.9% 15.9% 18.3%

2010 Service 28.4% 22.6% 21.7%

2010 Sales, Office 28.2% 24.6% 23.1%

2010 Farming, Fishing, Forestry - 0.8% 0.8%

2010 Construction, Extraction, Maintenance 7.1% 8.9% 9.2%

2010 Production, Transport, Material Moving 23.3% 18.2% 18.4%

2010 White Collar Workers 41.3% 49.5% 50.0%

2010 Blue Collar Workers 58.7% 50.5% 50.0%

2010 Drive to Work Alone 67.8% 83.6% 83.4%

2010 Drive to Work in Carpool 11.3% 9.7% 9.2%

2010 Travel to Work by Public Transportation 0.1% 0.3% 0.2%

2010 Drive to Work on Motorcycle 0.3% 0.4% 0.2%

2010 Walk or Bicycle to Work 14.3% 3.1% 2.6%

2010 Other Means 5.0% 1.1% 1.7%

2010 Work at Home 1.2% 1.8% 2.5%

2010 Travel to Work in 14 Minutes or Less 63.9% 69.9% 66.6%

2010 Travel to Work in 15 to 29 Minutes 26.0% 21.8% 25.1%

2010 Travel to Work in 30 to 59 Minutes 8.1% 6.2% 5.8%

2010 Travel to Work in 60 Minutes or More 2.0% 2.1% 2.4%

2010 Average Travel Time to Work 12.3 11.7 12.0

2015 Est. Total Household Expenditure $30.7 M $279 M $422 M

2015 Est. Apparel $1.06 M $9.59 M $14.5 M

2015 Est. Contributions, Gifts $1.77 M $16.7 M $25.8 M

2015 Est. Education, Reading $1.10 M $9.47 M $14.5 M

2015 Est. Entertainment $1.63 M $15.2 M $23.2 M

2015 Est. Food, Beverages, Tobacco $5.01 M $44.4 M $66.7 M

2015 Est. Furnishings, Equipment $926 K $8.94 M $13.8 M

2015 Est. Health Care, Insurance $2.93 M $25.9 M $38.8 M

2015 Est. Household Operations, Shelter, Utilities $9.78 M $87.2 M $132 M

2015 Est. Miscellaneous Expenses $472 K $4.22 M $6.37 M

2015 Est. Personal Care $402 K $3.63 M $5.49 M

2015 Est. Transportation $5.65 M $53.3 M $80.9 M

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Brownwood, TX 76801-1806

DemographicsWALGREENS – CORPORATE NET LEASE


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