o’reilly auto parts center · rent roll company overview tenant: o’reilly auto parts...

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O’Reilly Auto Parts Center4056-4070 Meridian St, Bellingham, WA 98226

OFFERING MEMORANDUM

This Marketing Brochure contains select information pertaining to the business and affairs of O’Reilly Auto Parts Center located at 4056-4070 Meridian St, Bellingham, WA 98226 hereto referred to as “Property”. Information in this Marketing Brochure is confidential and provided solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose and may not be made available to any other person without the written consent of the Seller or Matthews Retail Group, Inc.

This Marketing Brochure has been prepared by Matthews Retail Group, Inc. (also known as Matthews Retail Advisors) based in part upon information supplied by the Seller and in part upon financial information obtained from sources deemed reliable by Matthews Retail Group, Inc. However, Matthews Retail Group, Inc. has not and will not verify any of this information, nor has Matthews Retail Group, Inc. conducted any investigation regarding these matters. Matthews Retail Group, Inc. makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.

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 the Buyer’s thorough due diligence investigation of this investment opportunity. Matthews Retail Group, Inc. expressly denies any obligation to conduct a due diligence examination of this Property for the 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 the Buyer depends on factors that should be evaluated by the Buyer and their tax, financial and legal advisors. Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any property to determine to their satisfaction the suitability of the Property for their investment goals.

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 performance.

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 the Seller and Matthews Retail Group, Inc. of any and all liability and hold the parties harmless from any kind of claim, cost, or expense arising out of your investigation and/or purchase of this Property.

NON-ENDORSEMENT NOTICEMatthews Retail Group, Inc. is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this Marketing Brochure. 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 Matthews Retail Group, Inc., its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Matthews Retail Group, Inc., and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

CONFIDENTIALITY & DISCLAIMER STATEMENT

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PRICING AND FINANCIAL ANALYSISInvestment Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Financial Overview - Aggregate . . . . . . . . . . . . . . . . . . . . . . . 3Rent Roll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Company Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Lease Abstract - O’Reilly Auto Parts . . . . . . . . . . . . . . . . . . . . . 6Lease Abstract - O’Reilly Auto Parts . . . . . . . . . . . . . . . . . . . . . 7Company Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Lease Abstract - Jiffy Lube . . . . . . . . . . . . . . . . . . . . . . . . . . 9Lease Abstract - Jiffy Lube . . . . . . . . . . . . . . . . . . . . . . . . . . 10Lease Abstract - West Coast Oriental Grocer . . . . . . . . . . . . . . . . 11Lease Abstract - West Coast Oriental Grocer . . . . . . . . . . . . . . . . 12

PROPERTY DESCRIPTIONProperty Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Bird’s Eye . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Tenant Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Regional Map. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

DEMOGRAPHICSDemographics Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19City Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

TABLE OF CONTENTS

PRESENTED BY:

Conrad SarrealAssociate

License No. 01982875O 310.919.5760M [email protected]

Chad KurzSVP & National Director


Brandon BurrowesAssociate Vice President

O 425.455.9976M [email protected]

Robert WallaceBroker of Record

License No. 13414

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PRICING & FINANCIAL ANALYSIS

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WEST COAST

ORIENTAL GROCER

INVESTMENT HIGHLIGHTS

PROPERTY DETAILS• O’Reilly Auto Parts exercised its first two five-year options

simultaneously in 2014 and added three more options showing strong commitment to the location

• Jiffy Lube is on an absolute NNN ground lease and has been operating at this location since 1991 after excercising its first two options

• Excellent access and visibility from main thoroughfare• Each tenant has an adequate amount of designated parking as

well as shared spaces• Attractive rental increase - Chan Ly’s rental amount is scheduled to

increase by 30% in 2017• Minimal landlord responsibilities - tenants cover insurance, taxes,

HVAC, and roof

LOCATION• Washington is an income tax-free state• Within immediate vicinity of the ±770,000 SF Bellis Fair Mall with

strong anchor tenants that includes Target, Macy’s, Kohl’s, Sports Authority, and JCPenny

• Located on an extremely dense retail corridor with other national retailers such as Walmart, Costco Wholesale, Winco Foods, The Home Depot, PetSmart, Petco, Best Buy, Bed Bath & Beyond, Barnes & Noble, Walgreens, Bevmo!, Ross, Burlington Coat Factory, and many more

• Meridian St has a high traffic count of ±35,000 vehicles per day that can be accessed off of the I-5, which sees ±80,000 vehicles per day

• Rapid growth within a 1-mile radius - population grew by ±80% from 2000 - 2010 and is expected to grow by ±10% over the next 5 years

TENANT• Center is anchored by O’Reilly Auto Parts that has an investment

grade S&P rating of BBB+ and a market cap of $26.67 Billion• Jiffy Lube lease is corporately backed by Jiffy Lube International,

Inc. which is a wholly owned subsidiary of Shell Oil Company

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Investment Overview

EXECUTIVE SUMMARY4056-4070 Meridian St Bellingham, WA 98226List Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,006,000Gross Leasable Area . . . . . . . . . . . . . . . . . . . . . . . . ±12,211 SFNOI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $202,925CAP Rate - Current. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.75%Year Built . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1990/1991Lot Size . . . . . . . . . . . . . . . . . . . . . . . . ±1.50 Acres (65,340 SF)

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Financial Overview - Aggregate

ANNUALIZED OPERATING DATAIncome Current

Gross Potential Rent $210,127

Expense Reimbursements $71,320

Total Gross Potential Gross Rev. $281,447

Effective Gross Revenue $281,447

Taxes $16,900

CAM $50,356

Insurance $2,826

Management Fees (3%) $8,440

Total Operating Expenses $78,522

Net Operating Income $202,925

Tenant Name SF %SF Lease Type Mo. Rent Annual rent Rent/SF Deposits

O’Reilly Auto Parts 8,000 65.0% NN+ Current - 5/31/2020 $11,453.41 $137,440.92 $17.18 N/A

6/1/2020 - 5/31/2025 CPI CPI -

Option 1 CPI or 12% CPI or 12% -



Chan Ly 3,071 25.1% NN+ Current - 8/14/17 $2,559.17 $30,710.04 $10.00 $7,677.50

8/15/17 - 8/14/20 $3,326.92 $39,923.04 $13.00

Option 1 $3,426.73* $41,120.73* $13.39

Jiffy Lube 1,140 9.3% NNN Ground Current - 5/15/18 $3,498.00 $41,976.00 $36.82 N/A

5/16/18 - 5/15/19 $3,665.86 $43,990.32 $38.59

5/16/19 - 5/15/20 $3,841.86 $46,102.32 $40.44

5/16/20 - 5/16/21 $4,023.00 $48,276.00 $42.35

Option 1 $4,626.00 $55,512.00 $48.69

Option 2 $5,320.00 $63,840.00 $56.00

RENT ROLL

*Assuming market rent is 3% higher than rental amount in 2020Note: NN+ lease structure holds landlord responsible for structural portions of the roof, which does not include repair/replacement of the roof membrane

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Rent Roll

Property Name O’Reilly Auto Parts

Property Type Net Leased Auto Parts Store

Parent Company Trade Name O’Reilly Auto Parts, Inc.

Ownership Public

Credit Rating BBB+

Rating Agency Standard & Poor’s

Revenue ±8.1 Billion

Net Income ±$712 Million

Stock Symbol ORLY

Board NYSE

No. of Locations ±4,400

No. of Employees ±71,621

Headquartered Springfield, MO

Web Site www.oreillyauto.com

Year Founded 1957

O’Reilly Automotive, Inc. officially started in the auto parts business in Springfield, Missouri, in November 1957. The company’s history began with Charles Francis O’Reilly, a traveling salesman for Fred Campbell Auto Supply in St. Louis, Missouri. By 1924 Charles had become familiar with the Springfield area, having traveled by train to sell auto parts throughout the territory. He recognized the region as an area of growth and opportunity, and asked to be transferred there. By 1932 he had become manager of Link Motor Supply in Springfield. One of his sons, Charles H. “Chub” O’Reilly, had also joined the company. Together they provided the leadership and management that made Link the predominant auto parts store in the area. The fast-growing company sells automotive aftermarket parts (both new and remanufactured), maintenance supplies, professional service equipment, tools, and accessories through some 4,400 stores in 40-plus states and online. Many O’Reilly Automotive stores also offer customers a range of services, including oil and battery recycling, battery testing, paint mixing, and tool rental. The company wheels and deals with automotive professionals, as well as do-it-yourself customers.

Sources: www.coporate.oreillyauto.com and www.hoovers.com

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Rent Roll Company Overview

Tenant: O’Reilly Auto Parts Enterprises, LLC, a Delaware limited liability company, formerly known as CSK Auto, Inc.

Address: 4056 Meridian St, Bellingham WA 98226

Size: 8,000 square feet (approximately)

Date Of Lease: May 10, 1989

Lease Commencement: April 1, 1990

Lease Expiration: May 31, 2025

Lease Term: Ten (10) Years

Renewal Options: Three (3), Five (5) Year

Current Rent: $137,440.92

Rent Increases:The rent due during any such extensions shall be the rent paid during the year prior to commencement of the extension, adjusted based on the 75% change in the CPI during the previous five-year period. In no event shall adjusted rent for any extension period exceed the rent paid during the previous period by more than 35%.

Option Rent: Lesser of CPI or 12% Every 5 Years.

Real Estate Taxes:Tenant shall pay Tenant’s proportionate Share (as defined in Section 10.2) of the real property taxes and installments of assessments (excluding any assessments arising from the development or re-development of the Property) on the Property applicable to the term of the Lease.

Maintenance by TenantTenant shall maintain all other portions of the Premises in reasonable repair during the term if this Lease and will replace any glass of windows and doors that may become cracked or broken.

Maintenance by LandlordLandlord shall, at Landlord’s expense, keep and maintain the foundation, the exterior walls and structural portions of the roof of the Premises in reasonable repair during the term of the Lease.

HVAC Tenant, at its own expense, maintain and repair HVAC throughout duration of this Lease.

Utilities:Landlord shall provide for separate metering of all the utilities to the Premises. Tenant shall pay, prior to delinquency, all charges for utilities used in the Premises during the term of this Lease. Tenant will pay pro rata share in manner prescribed in Paragraph 10.2 hereof

Use of Common AreasLandlord shall provide and maintain the common areas shown on the Plot Plan (the “common areas”), including the parking areas, sidewalks, landscaped areas and vehicular circulation areas, which shall be paved, marked and adequately lighted during the term thereof. During the term of this Lease, Tenant, its employees and invitees shall have a nonexclusive easement to use such Common areas for parking and ingress and egress to and from Premises.

Common Area Costs (10.2)

Tenant agrees to pay upon receipt of invoice Tenant’s Proportionate share of Landlord’s actual costs incurred in the maintenance and lighting of Common Areas, including sweeping, striping, cleaning, and clearing ice and snow from the common areas; provided, however, such costs shall not include any management fee and Landlord shall not make or authorize any single expenditure regarding the maintenance or lighting of the common areas exceeding $3,000 without obtaining the prior written consent of Tenant. Tenant’s proportionate share shall not exceed 65%. Notwithstanding any other provision of this lease, the amount of Tenant’s proportionate share shall not exceed the greater of (i) 110% of the amount paid in the prior year, or (ii) the amount paid in the prior increased by the increase in the CPI during that year.

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Lease Abstract - O’Reilly Auto Parts

Insurance

Tenant shall carry, at is sole expense and during the Lease Term a policy or policies of insurance as follows: (i) fire and extended coverage insurance insuring Tenant’s interest in its improvements to the Premises and any and all furniture, equipment, supplies, and other property owned, leased, held or possessed by Tenant and contained within the Premises, such insurance coverage to be in an amount equal to the full replacement value of such improvements and property. (ii) worker’s compensation insurance (iii) commercial general liability insurance insuring Tenant and Landlord against any and all liability for injury to or death of a person or persons and for damage to property occasioned by or arising out of the condition, use or occupancy of the Premises, or occasioned by or arising out of activities or negligence of Tenant, its agents, employees guests, or licensees in the Premises, the limits of such policy or policies to be in the amounts not less than One Million and no/100 dollars ($1,000,000) with respect to any one casualty or occurrence.

Tenant Assignment and Subletting

Tenant may, at any time and from time to time, (i) sublet the Premises or any portion thereof (ii) and if not in default hereunder, assign this lease, provided that (a) each assignee undertakes and agrees to keep and perform all terms of this Lease, and (b) such assignment or subletting shall not release Tenant from any of its obligations.

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Lease Abstract - O’Reilly Auto Parts

Property Name Jiffy Lube

Property Type Net Leased Auto Service

Parent Company Trade Name Jiffy Lube International, Inc.

Ownership Private

No. of Locations ±2,100

Headquartered Houston, TX

Web Site www.jiffylube.com

Year Founded 1979

A leading provider of oil changes, Jiffy Lube doesn’t expect to see its customers every day -- but about every three months or 3,000 miles. The company boasts more than 2,100 outlets throughout North America that are mostly franchised. The rest of its locations are company-owned and operated. Besides oil changes, Jiffy Lube facilities provide maintenance services for air conditioning, fuel systems, and transmissions. At some of its locations, it also performs inspections and emissions testing, repairs windshields, and rotates tires. The company serves vehicle fleet operators, as well as individual consumers. Jiffy Lube, which is a subsidiary of Shell Oil Company, was founded in 1979.

Source: Google Finance

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Company Overview

Tenant: Jiffy Lube International, Inc. A Delaware corporation and successor by merger to Quaker State Minit-Lube, Inc

Address: 4070 Meridian St, Bellingham WA 98226


Date Of Lease: October 30, 1989

Lease Commencement: June 12, 1991

Lease Expiration: May 16, 2021

Original Lease Term: Twenty (20) Years

Renewal Options: Two (2), Five (5) Year

Current Rent: $41,976

Rent Increases: $43,990.32 in Year 3, $46,102.32 in year 4, $48,276 in Year 5

Option Rent: 15% in Each Option

Real Estate Taxes:

Tenant will pay all real estate taxes and assessments levied or assessed against the Real Property during the term hereof. Such taxes payable during the first and last years of this Lease shall be prorated based on the tax year of the taxing jurisdiction(s). The term “real estate taxes” as used herein shall mean all ad valorem taxes (or taxes in lieu thereof) and assessments imposed or assed upon or against the Real Property by appropriate public authority. Landlord will provide to Tenant or its agent, real estate tax bills and assessments due on the Real Property at least forty-five (45) days prior to the delinquency date. In the event the Real Property is part of a larger parcel, Landlord shall make every effort to have Tenant’s portion separately assessed. Landlord grants Tenant or its agent right to protest the governing authority any taxes or assessment it deems unreasonable or improper

Maintenance and RepairsTenant covenants and agrees at its sole cost and expense at all times during the term of this Lease to maintain and keep the Real Property in an orderly condition and in a state of good repair

Utilities Tenant agrees to pay all charges for water, gas, electricity, or other public utilities incurred by Tenant in connection with the Real Property.

Common Areas

“Common Area Maintenance Costs” includes all costs incurred by Landlord in operating, managing, repairing and maintaining the Common Areas, including without limitation: landscaping services; the cost of public liability and property damage insurance; repairs and resurfacing of parking and driveway areas; lighting; trash and refuse removal; property management fees not to exceed five percent (5%) of the total Common Area Maintenance Costs; reasonable reserves for repairs and replacements.

Payment of Pro Rata Share

Tenant shall pay its pro rata share of Common Area Maintenance Costs. Tenant’s pro rata share shall be equal to a fraction, the numerator of which is the rentable square footage of the building included in the Real Property, as verified by Tenant’s architect and approved by Landlord, which is estimated to be 1,140 square feet, and the denominator, which is the total rentable building square footage in the Retail Center which shall be 12,211 square feet. Landlord, shall, prior to commencement of the term and thereafter prior to commencement of each calendar year, prepare an estimated budget of Common Area Maintenance Costs for the succeeding calendar year and deliver notice thereof to Tenant, together with the monthly pro rata share of Tenant.

Insurance

Tenant hereby covenants and agrees at all times during the term hereof to obtain and maintain in force for the mutual benefit of Landlord and Tenant general public liability insurance in the amount of $500,000 combined single limit against claims for personal injury, death or property damage occurring in, on or about the Real Property. Tenant will, at its own cost and expense, maintain fire insurance with extended coverage endorsement for the benefit of Tenant on all buildings erected upon the Real Property in an amount equal to at least eighty percent (80%) of the full insurable value thereof, excluding foundation and excavating costs. Tenant may, at its option, bring its obligations to insure under this Article within the coverage of any blanket policy or policies of insurance which it may now or hereafter carry by appropriate amendment, rider, endorsement, or otherwise; provided however, that the interests of Landlord shall thereby be as fully protected as they would be otherwise if this option of Tenant to use blanket policies were not permitted.

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Lease Abstract - Jiffy Lube

Assignment and Subletting

Tenant may assign this Lease or its rights hereunder, or sublet all or any part of the Real Property at any time, from time to time, during the term of this Lease with Landlord’s prior written consent, which shall not be unreasonably withheld. Notwithstanding the above, Tenant reserves the unrestricted right to sublease or assign Tenant’s franchisee, parent corporation or subsidiary, at any time during the initial and option period terms of the Lease. However, in the event of such an assignment or subletting Tenant shall remain liable for the payment of all rents required to be paid hereunder and for the performance of all terms, covenants, and conditions herein undertaken by Tenant.

Reaffirmation of Consent to Sublease

Landlord hereby acknowledges that Tenant subleases the Premises to OIL EXPRESS INC. (“Subtenant”) and does hereby reaffirm its consent to Tenant’s subleasing of the Premises to Subtenant. Notwithstanding the foregoing, nothing contained herein shall be deemed to increase, diminish or otherwise alter Landlord’s consent or approval right under the Lease.

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Lease Abstract - Jiffy Lube

Tenant: Chan Ly, a single woman

Address: 4060-4064 Meridian St, Bellingham WA 98226


Date Of Lease: March 18, 2015

Lease Commencement: June 15, 2015

Lease Expiration: August 14, 2020

Lease Term: Five (5) Years

Renewal Options: One (1), Five (5) Year

Current Rent: $30,710.04

Rent Increases: 30% increase in year 2

Option Rent: Market rent at renewal

Real Estate Taxes:Tenant shall at its sole cost, keep the Premises in first-class appearance, in a condition at least equal to that which existed when Tenant initially opened the Premises for business

Maintenance by TenantTenant shall maintain all other portions of the Premises in reasonable repair during the term if this Lease and will replace any glass of windows and doors that may become cracked or broken.

HVAC

In the event Landlord does not elect to inspect the HVAC system pursuant to Paragraph 8.1 above, Tenant must furnish proof of maintenance of the HVAC system to Landlord on semi-annual basis. In the event that Tenant tails to comply with the obligations set forth in Paragraph 8.2, Landlord may, but shall not be obligated to, perform any such obligation on behalf of, and for the account of the Tenant, and Tenant shall reimburse Landlord for all costs and expenses paid or incurred on behalf of Tenant in connection with performing the obligations set forth herein, plus fifteen (15%) of such costs for Landlord’s overhead within 30 days of receipt of Landlord’s invoice hereof.

Maintenance by Landlord:

Landlord at its sole cost and expense, shall make all necessary repairs to the structural portions and exterior of the building in which the Premises is located, including but not limited to, repairs to the structural portion of the roof (excluding penetrations by Tenant), exterior or other load-bearing walls (excluding glass), foundations and floor construction. In addition to the foregoing, Landlord may, at its election, employ qualified companies to provide regular inspection, maintenance and repair of the roof, fire sprinklers and HVAC system, the costs of which shall be included in Common Area expenses. If Landlord, in its sole discretion, determines any such repairs are necessitated by the negligent acts to omissions of the Tenant, its agents, employees or invitees, the cost of such repairs shall be paid by Tenant to Landlord upon demand.

Utilities:In addition to all other sums Tenant is required to pay pursuant to this Lease, Tenant shall be solely responsible for and shall pay as additional rent prior to delinquency all charges for electricity, telephone, water, gas, heat and any other utilities used or consumed on the Premises from and after the date Tenant first takes possession of the Premises.

Assignment and Sublease Tenant shall not assign this Lease or any interest herein or any right or privilege hereto without prior written consent by Landlord.

Percentage RentNo percentage rent shall be charged, however Tenant shall deliver to Landlord, within sixty (60) days after the end of each year of the lease term, a monthly statement of gross sales for the preceding year or copies of Tenant’s Sales Tax Return. Landlord agrees to treat Tenant’s sales and operating data in confidential manner, but may share such information with shopping center’s current or potential mortgagees and/or owners.

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Lease Abstract - West Coast Oriental Grocer

Common Area Expenses

Costs and expenses shall include, but not limited to the costs of (1) cleaning, painting, inspecting, pylon sign and repair & maintenance, storm drain and sewer repair and maintenance, landscaping security, trash removal, repairs, painting, parking lot resurfacing, repair maintenance and striping, parking lot monitoring, parking enforcement, lighting, roof repair, roof replacement, roof maintenance, sanitary control and snow and debris removal at the Shopping Center (2) all utility costs not separately metered or otherwise billed to tenants of the Shopping Center (3) amortization of all machinery and equipment located in or used in connection with the Common Areas (4) repairs to building canopies, fascia and support columns (5) management fees (6) labor costs personnel performing services in connection with the operation, repair and maintenance of the Common Area or Shopping Center and the payroll taxes and benefits related thereto, rental of or cost of tools, machinery, and equipment used in connection with managing and maintaining the Common Area (7) insurance and deductibles and claims not covered by insurance (8) all real property and personal property taxes and assessments levied or assessed against Shopping Center or the Common Area, including the costs of contesting such if Landlord, in its sole discretion, deems it prudent to do so; and (9) a fee to Landlord for administration of the Common Area in an amount equal to fifteen percent (15%) of the expenses incurred by Landlord pursuant to this Paragraph 5.3. Costs of a capital nature, including without limitation capital improvements, capital replacements, capital repairs, capital equipment and/or capital tools, Tenant’s share of which costs exceed Five Thousand and No/100 Dollars ($5,000), shall be amortized over the useful life thereof.

Common Area ExpensesLiability Insurance

Tenant shall, during the Lease term, at its sole expense, maintain in full force a policy or policies of Commercial general liability (CGL) insurance including contractual liability endorsement, on an occurrence basis, with coverage at lease as broad as the most commonly available ISO Commercial General Liability policy CG 00 01, at least Two Million Dollars ($2,000,000) per occurrence limit, Two Million Dollars ($2,000,000) general aggregate.

Tenant shall at all times maintain worker’s compensation insurance in compliance with federal, state and local law including Employer’s Liability coverage in the amount of $1,000,000

Landlord shall pay for and shall maintain in full force and effect during the term of this Lease such property insurance as Landlord deems necessary for the Shopping Center. Tenant shall pay pro rata share for the costs incurred by Landlord for such insurance .

Tenant shall pay for and shall maintain in full force and effect during the term of this Lease property an amount not less than one hundred percent (100%) insurable replacement value.

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Lease Abstract - West Coast Oriental Grocer

PROPERTY DESCRIPTION

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WEST COAST

ORIENTAL GROCER

THE OFFERINGProperty Name . . . . . . . . . . . . . . . . . . . O’Reilly Auto Parts CenterProperty Address . . . . . . . . . . . . . . . . . . 4056-4070 Meridian St Bellingham, WA 98226Assessor’s Parcel Number . . . . . . . . . . . . . . 380318-022527-0000Zoning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PC

SITE DESCRIPTIONNumber of Stories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OneYear Built . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1990/1991Gross Leasable Area (GLA) . . . . . . . . . . . . . . . . . . . . . ±12,211 SFLot Size . . . . . . . . . . . . . . . . . . . . . . . . ±1.50 Acres (65,340 SF)Parking . . . . . . . . . . . . . . . . . . . . . . . . . . ±50 Surface SpacesParking Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . ±4.09 : 1000 SFLandscaping . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProfessionalTopography. . . . . . . . . . . . . . . . . . . . . . . . . . . Generally Level

CONSTRUCTIONFoundation . . . . . . . . . . . . . . . . . . . . . . . . . . . .Concrete SlabFraming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .WoodParking Surface . . . . . . . . . . . . . . . . . . . . . . . . . . . . .AsphaltRoof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Flat


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Property Overview


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Bird’s Eye

Meridian St +35,000 VPD

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Tenant Map


Meridian St +35,000 VPD

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Regional Map

DEMOGRAPHICS

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WEST COAST

ORIENTAL GROCER

Population 1-Mile 3-Mile 5-Mile

2021 Projection 9,892 53,040 103,759

2016 Estimate 8,994 50,324 99,007

2010 Census 7,922 47,566 94,412

2000 Census 4,396 37,024 78,129

Growth 2016-2021 9.98% 5.40% 4.80%

Growth 2010-2016 13.54% 5.80% 4.87%

Growth 2000-2010 80.22% 28.47% 20.84%

Households

2021 Projection 4,454 23,554 43,803

2016 Estimate 4,079 22,290 41,625

2010 Census 3,649 20,958 39,402

2000 Census 1,949 15,762 31,664

Growth 2016-2021 9.18% 5.67% 5.23%

Growth 2010-2016 11.79% 6.35% 5.64%

Growth 2000-2010 87.18% 32.96% 24.44%

Income

$0 - $15,000 20.68% 19.16% 18.10%

$15,000 - $24,999 13.61% 12.72% 11.59%

$25,000 - $34,999 9.99% 11.57% 11.10%

$35,000 - $49,999 12.62% 13.44% 13.06%

$50,000 - $74,999 17.94% 17.22% 15.87%

$75,000 - $99,999 15.65% 12.94% 11.71%

$100,000 - $124,999 6.54% 7.05% 8.06%

$125,000 - $149,999 1.88% 2.76% 4.43%

$150,000 - $199,999 0.69% 2.06% 3.32%

$200,000 - $249,999 0.20% 0.59% 1.21%

$250,000 - $499,999 0.12% 0.39% 1.21%

$500,000+ 0.09% 0.09% 0.33%

2016 Est. Average Household In-come

$49,751 $53,586 $62,022

2016 Est. Median Household In-come

$41,805 $42,307 $45,580

19 DEMOGRAPHICS

Demographics Report

™20

City Overview

BELLINGHAM, WAOn the shores of Bellingham Bay with Mount Baker as its backdrop, Bellingham is the last major city before the Washington coastline meets the Canadian border. The City of Bellingham, which serves as the county seat of Whatcom County, is at the center of a uniquely picturesque area offering a rich variety of recreational, cultural, educational and economic activities.

It is the seventh-largest city in the state, with 114,473 residents at the 2015 US Census, or fifth-largest by metropolitan area after Seattle-Tacoma, Spokane, the northern side of the Portland metropolitan area,and the Tri-Cities. The boundaries of the city encompass the former towns of Fairhaven, Whatcom, Sehome, and Bellingham.

The scenic splendor of Bellingham and Whatcom County is appreciated by residents and tourists. Whatcom Falls Park is a 241-acre large public park encompassing the Whatcom Creek gorge, running directly through the heart of the city. It has four sets of waterfalls and several miles of walking trails, and is a hub of outdoor activity connecting and defining several different neighborhoods of Bellingham. Popular activities during warmer weather include swimming, fishing, and strolling along the numerous walking trails. About 31 mi east of Bellingham the Mount Baker Ski Area is home to many of the world’s first snowboarding champions, and it holds the world record for the greatest amount of snowfall in one season. During most years the depth of accumulated snow exceeds 12 ft.

TOP EMPLOYERSEmployer # of Employees

PeaceHealth St. Joseph Medical Center 2,750

Western Washington University 1,072

Bellingham School District 946

City of Bellingham 813

BP Cherry Point Refinery 779

City of Whatcom 774

Lummi Nation 760

Aramark 620

Zodiac Interiors 600

Alcoa Intalco Works 579

841 Apollo Street, Suite 150 | El Segundo, CA 90245 | www.matthews.com™

O’Reilly Auto Parts Center4056-4070 Meridian St, Bellingham, WA 98226

OFFERING MEMORANDUM

Robert WallaceBroker of Record

License No. 13414

Conrad SarrealAssociate


Chad KurzSVP & National Director


Brandon BurrowesAssociate Vice President

O 425.455.9976M [email protected]

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