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344 E. 63RD STREET | Chicago, IL

OFFERING MEMORANDUM

Save-A-Lot

PRESENTED BY:

Eric SuffolettoSenior AssociateDIRECT +1 847 384 2842EMAIL [email protected]

Peter BlockExecutive Vice PresidentDIRECT +1 847 384 2840 EMAIL [email protected]

Justin KaufmannAssociateDIRECT +1 847 384 2821 EMAIL [email protected]

COLLIERS INTERNATIONAL P. 2

ERIC M SUFFOLETTOSenior AssociateDIRECT +1 847 384 2842EMAIL [email protected]

PETER BLOCKExecutive Vice PresidentDIRECT +1 847 384 2840 EMAIL [email protected]

JUSTIN R KAUFMANNAssociateDIRECT +1 847 384 2821 EMAIL [email protected]

EXECUTIVE SUMMARY

Colliers International is pleased to present for sale a freestanding Save-A-Lot grocery store located in Chicago, Illinois. The property is occupied by Save-A-Lot on a net-leased basis (NN). Save-A-Lot is a national discount grocer with more than 1,300 locations nationwide and is a wholly owned subsidiary of Supervalu, Inc. There are more than six years remaining on Save-A-Lot’s original ten-year term which runs through January 31, 2021.

The offering is located at 344 E. 63rd Street in Chicago, IL (in the Washington Park community) less than seven miles south of downtown Chicago. The property features a recently renovated 16,290 square foot building – completely rehabbed in 2011 – and dedicated off-street parking lot. The offering is also located in a “Food Desert” – an area that lacks access to affordable fruits, vegetables, whole grains, and other foods that make up the full range of a healthy diet.

The property’s positioning benefits from the area’s significant population density, high traffic counts, and steady foot traffic from multiple Chicago Transit Authority (CTA) stops – both train and multiple bus stops – adjacent to the site. The property is situated less than a half mile from Interstates I-90 and I-94, which provide a steady traffic flow to the area.

The property sits across the street from the Dulles School of Excellence (a local Elementary & Middle School) and the submarket is also home to McDonald’s and Walgreen’s, among many other local service-oriented retail tenants.

OFFERING SUMMARY

INVESTMENT OPPORTUNITY

ASKING PRICE: $2,355,657CAP RATE: 8.75%NOI: $206,120LEASE EXPIRATION: 1/31/21

INVESTMENT HIGHLIGHTS

» 6+ years remaining on initial 10-year lease term » Operating under NN lease » Newly renovated 16,290 SF building (completed in 2011) » Dense, in-fill urban location less than a quarter mile

from two major interstates and situated immediately adjacent to CTA Green Line station

» Features 34 dedicated parking spaces with additional access to street parking

» Four 5-year renewal options with escalations at option periods

Save-A-Lot features more than 1,300 locations across the country and is also a subsidiary of Supervalu Inc., which was recently purchased by private equity firm Cerberus Capital Management. Following the acquisition, Cerebus announced that it will continue to operate and license the Save-A-Lot format with a focus on also growing the brand nationwide.





EXECUTIVE SUMMARY

PROPERTY AND FINANCIAL OVERVIEW

» NOI$206,120

» BUILDING SIZE 16,290 SF

» LAND SIZE 33,132 SF

» YOC2011 (full rehab of existing

building)

» PRICE $2,355,657

» CAP RATE 8.75%

» LEASE TYPE NN

» TENANTMoran Foods, Inc. (dba Save-A-Lot)

» PARKINGDedicated parking lot with 34 spaces and access to street parking

» LEASE COMMENCEMENT DATE2/1/2011

» LEASE EXPIRATION DATE 1/31/2021

» RENEWAL OPTIONSFour, 5-year options

» RENEWAL RENT$222,410 - February 1, 2021$238,700 - February 1, 2026$254,990 - February 1, 2031$271,281 - February 1, 2036

» NEARBY RETAILERSWalgreens, McDonald’s, Chase

344 E. 63rd St., Chicago, IL





TENANT OVERVIEW

Save-A-Lot Overview

Save-A-Lot is an extreme value discount grocer with more than 1,300 locations nationwide. Originally founded in 1977 by Bill Moran and Chase Gabbard, Save-A-Lot is currently a wholly owned subsidiary of SUPERVALU INC. and has been so since 1992. With stores in a wide spectrum of neighborhoods, including urban, rural, and suburban, Save-A-Lot services nearly 4 million shoppers each week. More than two-thirds of the stores are licensed to franchisees while the remainder are company owned and operated. 52 stores were added in 2012, increasing Save-A-Lot’s reach to 38 states.

Save-A-Lot’s patent company, Supervalu, is a Fortune 100 company headquartered in Eden Prairie, Minnesota that employs just over 130,000 people. The company recorded revenues of roughly $36 billion in 2012 and currently conducts its retail operations under 12 different banners, including Jewel-Osco and Albertsons. In addition to food retailing, Supervalu also provides supply chain services in the form of wholesale distribution. By the end of the 2010 fiscal year, the company recorded a total cost savings of $340 million and reduced total outstanding debt by over $500 million (2012).

In early 2013, an investor group led by Cerberus Capital Management agreed to acquire five Supervalu chains, including Acme, Albertsons, Jewel-Osco, Shaw’s, and Star Market, in a transaction valued at $3.3 billion. The tender offer and subsequent stock issuance made the Cerberus-led group Supervalu’s largest shareholder, with 21.2 percent of total outstanding common shares. As a result, the “new” Supervalu will consist of three business units: Independent business, a food wholesaler that serves nearly 2,000 stores across the country; Save-A-Lot, the discount grocery chain with more than 1,300 stores in the United States; and regional banners Cub Foods, Farm Fresh, Shoppers, Shop ‘n’ Save, and Hornbacher’s.





LOCATION

Site Plan

NET LEASED INVESTMENT OFFERING

www.bouldergroup.com

SITE PLAN

SITE PLAN





AREA MAP

NORTH

Location Map





LOCATION

Area OverviewsWASHINGTON PARK

Located only 7 miles from the loop, the Washington Park neighborhood is one of Chicago’s most historic and well-defined communities. A distinct mixture of ethnicities and classes makes this area a prime example of local diversity. Expansion of transportation routes during the early nineteenth century increased ease of access to the city’s central business district, making the area prime for suburban development. The area now houses one of the highest concentrations of public housing in the United States. During the 1920s, the University of Chicago created the community area system of this city subdivision with names that continue to be used today.

Washington Park itself, the community’s focal point, stretches 372 acres west from Cottage Grove Avenue between 51st and 60th streets. Named for President George Washington in 1880, this park serves as home to a wide variety of nationally recognized historic landmarks, including the DuSable Museum of African American History. In the summer months, the park stands as the social center of the city’s South Side. Thousands of residents visit each year to attend festivals and participate in various sports leagues and related events.

PUBLIC TRANSPORTATION OVERVIEW

Save-A-Lot is located less than a block west of the King Drive Chicago Transit Authority Station, one of Chicago’s largest and most heavily traveled public transportation centers. Nearly 196,000 people board the Green line at King Drive per year alone, with thousands more simply entering or passing by the station. Combined, the E. 63rd Street and King Drive bus routes record over 13.7 million passengers per year, with Save-A-Lot located at the intersection of the two. Ridership in this area for both the bus and rail are up multiple percentage points from previous years and are expected to continue growing. With over a dozen bus stops located within a mile radius of the subject location, the local foot traffic that the CTA provides has a remarkable impact on the visibility and profitability of the Save-A-Lot store.

STRATEGIC LOCATION

Save-a-Lot is strategically positioned to serve the residents of the Washington park area and surrounding communities. Specifically, the subject property’s location benefits from two key drivers, the first of which being the area’s urban population density and immediate proximity to public transportation. Approximately 35,000 residents live within a 1-mile radius of the site with nearly 300,000 living within a 3-mile radius. The property is nearly adjacent to the King Drive Rail Station, one of the Chicago Transit Authority’s highest volume transport hubs at just over 7 million riders annually. In addition to the tremendous foot traffic generated by the train and bus routes, an estimated 20,000 vehicles pass through the 63rd & Calumet intersection daily.

This close proximity to public transportation hubs, along with the absence of any major discount grocers, gives Save-A-Lot a unique competitive advantage. As a well-established brand on Chicago’s South Side, Save-A-Lot leverages its operations and supply chain to satisfy the shopping needs of local consumers. Nearby retail property is heavily occupied by small, independent food and liquor marts, creating a barrier to entry for same size competitors. Another distinct competitive advantage stems from the area’s traditional labeling as a “food desert,” which characterizes a community as lacking access to fresh sources of produce, dairy products, and meats, among other items. Through offering a variety of popularly branded food items at low prices, Save-A-Lot captures business from not only the local community, but also from area travelers who frequently pass through the area on their way to and from work.





AREA MAP

CTA Ridership Map

Figures include all stops along the labeled routes (i.e. all stops along East 63rd Street)

Rail – number captures the number of boardings per line at that location per period

Bus – number of boardings as recorded by the fare box

NOTE: Entries are entries into the stations themselves, whereas the information above is line specific





AREA MAP

Retail Maps

299,200 VPDSave-A-Lot 344 E. 63rd St. Chicago, Il

Save-A-Lot 344 E. 63rd St. Chicago, Il

MACRO VIEW

MICRO VIEW





AREA MAP

Save-A-Lot 344 E. 63rd St. Chicago, Il

Amarr Foods

King Drive Grocery

Parkway Super Market

Freshway Foods

Farmers Food Basket

Rana Foods

67th Street Food Market

This Save-A-Lot location lacks any true competitors in the submarket and is thereby situated in a “Food Desert”, which is technically defined as “an area that lacks access to affordable fruits, vegetables, whole grains, and other foods that make up the full range of a healthy diet.” Each of the local grocery stores in the immediate vicinity are local, privately owned, convenience store-oriented concepts. The only notable, national competitor in the area is Aldi, which is located more than a mile southeast of Save-A-Lot.

Area Grocer Map





DEMOGRAPHICS

Pop-Facts: Demographic Quick Facts 2014 Report

Radius 1: 344 E 63RD ST, CHICAGO, IL 60637-3155, aggregateRadius 2: 344 E 63RD ST, CHICAGO, IL 60637-3155, aggregateRadius 3: 344 E 63RD ST, CHICAGO, IL 60637-3155, aggregate

Radius 3Radius 20.00 - 3.00 miles0.00 - 2.00 miles0.00 - 1.00 miles

% % %Radius 1Description

Population

294,508131,54632,213 2019 Projection297,002133,93132,989 2014 Estimate299,612136,41933,788 2010 Census356,397162,28040,523 2000 Census

-15.93%-15.94%-16.62% Growth 2000 - 2010-0.87%-1.82%-2.36% Growth 2010 - 2014-0.84%-1.78%-2.35% Growth 2014 - 2019

Households

121,24352,97612,343 2019 Projection120,93253,49712,619 2014 Estimate120,42353,99312,886 2010 Census132,36760,49214,807 2000 Census

-9.02%-10.74%-12.97% Growth 2000 - 20100.42%-0.92%-2.07% Growth 2010 - 20140.26%-0.97%-2.19% Growth 2014 - 2019

2014 Est. Population by Single Classification Race 133,931 297,00232,989

29,359 9.8911.5615,4851,519 White Alone 4.60246,815 83.1081.95109,76230,172 Black or African American Alone 91.46

819 0.280.2330358 American Indian and Alaska Native Alone 0.186,333 2.132.833,788490 Asian Alone 1.49

78 0.030.02297 Native Hawaiian and Other Pacific Islander Alone 0.026,713 2.260.871,161139 Some Other Race Alone 0.426,885 2.322.543,403603 Two or More Races 1.83

2014 Est. Population Hispanic or Latino 133,931 297,00232,989

15,257 5.142.843,803616 Hispanic or Latino 1.87281,745 94.8697.16130,12832,373 Not Hispanic or Latino 98.13

2014 Tenure of Occupied Housing Units 53,497 120,93212,619

38,501 31.8428.4415,2162,582 Owner Occupied 20.4682,431 68.1671.5638,28110,038 Renter Occupied 79.55

2014 Average Household Size 2.41 2.402.54

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Wed Jul 23, 2014Prepared On:





DEMOGRAPHICS

Pop-Facts: Demographic Quick Facts 2014 Report

Radius 1: 344 E 63RD ST, CHICAGO, IL 60637-3155, aggregateRadius 2: 344 E 63RD ST, CHICAGO, IL 60637-3155, aggregateRadius 3: 344 E 63RD ST, CHICAGO, IL 60637-3155, aggregate

Radius 3Radius 20.00 - 3.00 miles0.00 - 2.00 miles0.00 - 1.00 miles

% % %Radius 1Description

2014 Est. Households by Household Income 53,497 120,93212,619

36,848 30.4732.9917,6474,791 CY HHs, Inc < $15,000 37.9719,688 16.2816.088,6032,311 CY HHs, Inc $15,000 - $24,999 18.3114,083 11.6510.945,8501,450 CY HHs, Inc $25,000 - $34,999 11.4915,185 12.5612.056,4461,335 CY HHs, Inc $35,000 - $49,999 10.5816,626 13.7513.237,0771,255 CY HHs, Inc $50,000 - $74,999 9.95

7,916 6.556.393,420766 CY HHs, Inc $75,000 - $99,999 6.074,317 3.573.331,779368 CY HHs, Inc $100,000 - $124,999 2.921,978 1.641.59850172 CY HHs, Inc $125,000 - $149,999 1.362,199 1.821.60855106 CY HHs, Inc $150,000 - $199,999 0.84

667 0.550.5227824 CY HHs, Inc $200,000 - $249,999 0.191,037 0.860.9148733 CY HHs, Inc $250,000 - $499,999 0.26

388 0.320.382058 CY HHs, Inc $500,000+ 0.06

2014 Est. Average Household Income $42,471 $43,570$33,904

2014 Est. Median Household Income $25,852 $27,791$21,571

2014 Median HH Inc by Single Race Class or Ethn

47,02046,40438,700 White Alone25,16823,28120,853 Black or African American Alone44,78844,23144,375 American Indian and Alaska Native Alone34,21431,53883,077 Asian Alone46,294103,190112,500 Native Hawaiian and Other Pacific Islander Alone39,95135,01739,383 Some Other Race Alone42,48743,88641,062 Two or More Races

33,92430,32539,953 Hispanic or Latino27,46425,67921,349 Not Hispanic or Latino

Nielsen Solution Center 1 800 866 6511

Prepared By:

Prepared For:

32 OfPage

© 2014 The Nielsen Company. All rights reserved.

Wed Jul 23, 2014Prepared On:

CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offering Memorandum contains select information pertaining to the business and affairs of the property at Save-A-Lot, 344 E. 63rd St., Chicago, IL. It has been prepared by Colliers International. 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 Colliers International. The material is based in part upon information supplied by the Seller and in part upon financial information obtained by Peter Block 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 or 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 from Colliers International, you agree:

1) The Offering Memorandum and its contents are confidential;

2) You will hold it and treat it in the strictest of confidence; and

3) 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 Colliers International 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 Save-A-Lot, 344 E. 63rd St., Chicago, IL. 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 Colliers International or any of their affiliates or any of their respective officers, Directors, sharehold-ers, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or 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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