Boston Sports Club - LoopNetimages1.loopnet.com/d2/YMM14hC4esLw3pp71...million in 2016 representing a 3.19% increase . • Town Sports has made recent investment in digital platforming

Conf iden t i a l Of fe r ing Memorandum400 Pre s iden t i a l WayWoburn , MA 01801

Boston Sports Club12+ Years Remaining | Corporate Guarantee | Boston MSA

2Boston Sports Club – Woburn, MA

Investment HighlightsStrategic Retail Location Directly off I-93Situated within one of Boston’s densest suburban retail corridors, the Asset is strategically positioned just off Interstate 93, which boasts traffic counts of approximately 193,000 vehicles per day. The immediate area is also home to many corporate office headquarters.

Long Term Lease with Rental Increases in Base Term and OptionsThe Tenant’s in-place contractual lease term has over 12 years remaining and rental increases every five years. Additionally, the tenant has three, five-year option periods with rental increases built into each option.

Large Guarantor with Strong Earnings GrowthTown Sports International reported an improvement in its earnings from $72.9 million in 2015 to $75.2 million in 2016 representing a 3.19% increase.

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Executive SummaryExecutive Summary

The OfferingJones Lang LaSalle (“JLL”), on behalf of Ownership as its exclusive advisor, is pleased to offer for sale the fee simple interest in the Boston Sports Club (the “Property” or the “Offering”) located in Woburn, MA just 10miles north of Boston. The Property is subject to a net lease to TSI Woburn, LLC (the “Tenant”), the largest owner and operator of fitness clubs in the Northeast and Mid-Atlantic Region. The 33,159 square foot Propertyserves as one of 25 Boston Sports Club locations in the Greater Boston Area and Rhode Island. Set along a prominent office corridor, the Property is in prime position to capture the local employee population, thecommuter traffic driven by the nearby Amtrak station, and the dense local residential population. Positioned on an approximately 9.75-acre parcel just off of Interstate 93, the Property is located within 1 mile of over 1.85million square feet of occupied office space. This Offering represents a truly rare opportunity to purchase a very well-located class A fitness center located within the Greater Boston Area.


RENT SCHEDULE

PERIODANNUAL

RENTANNUALRENT PSF

Percent Increase

8/1/2014 – 7/31/2019 $1,017,445 $30.68 -

8/1/2019 – 7/31/2024 $1,130,483 $34.09 11.11%

8/1/2024 – 8/31/2029 $1,300,056 $39.21 15%

RENEWAL OPTIONS

Option Period 19/1/2029 – 8/31/2034 $1,430,061 $43.13 10%

Option Period 29/1/2034 – 8/31/2039 $1,573,067 $47.44 10%

Option Period 39/1/2039 – 8/31/2044 $1,730,374 $52.18 10%

*Rental Increases are based on lesser of fixed percentage or CPI

Desirable Lease StructureThe Property features a net lease structure with minimal landlord obligations and favorable rental escalations throughout the primary and renewaloption periods.

Strong Area DemographicsThe surrounding demographics are affluent and dense with a population of over 190,000 residents earning an average household income of$116,000 within a five mile radius. Additionally, the population growth rate is projected at 4% over the next five years.

Free & Clear of Existing DebtThe Property will be delivered free and clear of existing debt, enabling future ownership to take advantage of today’s attractive debt markets.

PROPERTY AND LEASE SUMMARY

Location 400 Presidential WayWoburn, MA 01801

Purchase Price $13,566,000Cap Rate 7.50%Admin. Fee 5% of all On Premises Maintenance ExpensesAnnual Rent / PSF $1,017,445 / $30.68Building Size 33,159 SFYear Built 2008Parcel Size 9.77 ACParking 195 spacesOwnership Interest Fee-SimpleTenant TSI Woburn, LLCGuarantor Town Sports International, LLCLandlord Responsibilities

1) Roof, structure and foundation2) Any capital repairs in last 5 years of lease

Remaining LeaseTerm* 12 years

Lease Expiration 8/31/2029

Rent Escalations Yes – Lesser of CPI factor or fixed percentage every five years

Renewal Options 3 x 5-year options

*As of 8/1/2017

Executive Summary


Boston Sports Club Overview Town Sports International (NASDAQ: CLUB), doing business as Boston Sports Club, is the largest owner and operator of

fitness clubs in the Northeast and Mid-Atlantic region and the third largest in the United States.

Town Sports was incorporated in 1973 and serves four U.S. regions including Boston, New York, Washington, andPhiladelphia. The Company has 148 total locations with 29 in Boston and over 544,000 total memberships.

Key Business Highlights

• Overall memberships increased by 3,000 members in 2016 and the company plans to continue making pricingadjustments in order to increase revenue while also driving membership growth.

• Despite recent earning losses, the Company reported an improvement in its EBITDA from $72.9 million in 2015 to 75.2million in 2016 representing a 3.19% increase.

• Town Sports has made recent investment in digital platforming for in-club experiences for its members, designed toenhance customer engagement and better pair with recent trends in fitness technology and wearables.

COMPANY OVERVIEWTenant Town Sports InternationalIndustry Fitness Centers

Ownership Type Public

Stock Ticker NASDAQ: CLUB

Market Cap (as of 3/28/2017) $98.46 million

Revenue $397 millionNo. of Locations 148

Employees 7,600+

Founded 1969

Headquarters New York, NY

Website www.mysportsclubs.com

Tenant Overview

Membership Fees, 60.4%

Athletic Instruction, 2.7%Food & Drink,

2.2%

Merchandise, 2.0%

Spa Services, 1.7%

Guest Admission Sales, 2.9%

Personal Training, 8.2%

Other, 19.9%

Fitness Center Industry Revenue Segmentation*Figure’s based on Company’s 10-K form dated 2/22/2017


Aerial and Retail Map

Retailer Map

The Woburn area is rich in retail, office, and industrial space which exceeds a combined 763 properties totaling 12.8 million square feet within a three mile radius. The Woburn-Anderson Amtrak Station is within walking distance of the Asset and has 30 commuter-rail departures to Boston each weekday.


Office Map

The Asset is positioned proximate to a large office corridor. Within 1 mile of the Asset there are over 1.85 million square feet of occupied space, notably, the Raytheon Woburn Office which houses approximately 340 employees. The extensive office corridor helps inject an impressive daytime population of 90,122 people within 3 miles of the Asset, providing a valuable stream of customers to Boston Sports Club.

Aerial and Office Map


Local Competition

Local Competition Map

1-mile


Woburn OverviewThe Property is located in an affluent neighborhood of Woburn where average household income within a 1-mile radius of the Assetexceeds the national average by nearly threefold. The city is located between Route 128 and 93 which allows for a 10 minutecommute to downtown Boston. The city is also serviced by the Woburn Amtrak Station which is walking distance from the Property.The station provides daily services to Boston’s South Station and Back Bay Station, as well as five round-trip routes between Bostonand Portland, Maine. The city is rich in retail and office space which exceeds a combined 12 million square feet within a three mileradius of the Property.Woburn was originally settled in 1629 just nine years after the Pilgrims founded Plymouth Colony. It was originally an expansion ofCharlestown as a result of a territory land grand by the Great and General Court of Massachusetts Bay Colony. Present day Woburnhas a large corporate presence including Raytheon, Marshall’s, Boston Acoustics, Monotype, and Skyworks Solutions among manyothers.Woburn has seen a great deal of local development activity including a $35 million expansion for the Woburn Library which will helpto increase community engagement and preserve it as an historic landmark with energy efficiency and environmental sustainability.

Location HighlightsHigh Traffic Location The Property lies just off of Interstate 93, a major commercial thoroughfare in the New England region that sees traffic counts of approximately 193,000 vehicles per day.

Strong Retail LocationThe Property is located within a highly trafficked commercial thoroughfare and is surrounded by the nation’s leading retail tenants, whichinclude Target, Kohl’s, Lowe’s, TJ Maxx, Petco and CVS, amongst many others.

Excellent Quality LocationWoburn, MA has been regarded as a top 10 suburb in Boston by Movoto.com. The city has more amenities per capita than any otherBoston suburb. It also has the shortest commute time to downtown Boston due to its location between Route 128 and 93.

DEMOGRAPHICS

1-MILERADIUS

3-MILERADIUS

5-MILERADIUS

POPULATION2021 Projection 4,494 72,691 198,0262016 Estimate 4,393 69,626 190,1422016 Number of Households 1,666 26,826 72,7132016 - 2021 Projected Growth 2.2% 4.2% 4.0%

Age 0 - 14 19.8% 18.1% 16.7%Age 15 - 24 10.3% 10.8% 10.9%Age 25 - 44 28.0% 25.0% 24.2%Age 45 - 64 27.9% 29.1% 19.8%Age 65+ 14.0% 15.0% 17.2%

ESTIMATED HH INCOMELess than $35,000 6.3% 17.3% 16.4%$35,000 - $49,999 6.2% 9.5% 8.6%$50,000 - $74,999 13.0% 13.6% 14.3%$75,000 - $99,999 14.8% 12.3% 13.2%More than $100,000 58.8% 47.3% 37.6%Average Estimated HH Income $148,586 $114,161 $115,823Median HH Income $110,769 $93,190 $94,320

Location Overview

Woburn Library Expansion


Boston Retail MarketBoston’s retail market has continued to show significant signs of improvement year-over-year. Tightening vacancy and positive absorption has caused the rental rate (NNN)for single tenant retail buildings to remain steady from Q3 2016 to approximately $17.32per square foot. Over the past four quarters, the market has seen an overall decrease inthe vacancy rate, with the rate going from 2.8% in the first quarter 2016, toapproximately 2.5% in Q4 2016. One major recent development in the market includesthe Lakeway Commons in Shrewsberry which includes approximately 100,000 squarefeet of retail and over 160 residential units.

Burl ington / Woburn Retai l SubmarketComprised of 383 buildings totaling 7.26 million square feet, the Burlington / WoburnRetail Submarket is one of Boston’s leading retail districts. The Woburn Submarketvacancy rates are well below Boston at large, demonstrating the highlydesirable nature of this submarket.

Notable tenants within the Woburn area less than 3 miles from the Property include:

FREESTANDING RETAIL MARKET STATISTICS(As of 4Q2016)

MARKET SUBMARKET

BostonBurlington /

Woburn # of Buildings 27,739 383Total Inventory (SF) 337,235,358 7,256,184Total Vacancy 3.1% 1.3%YTD Net Absorption (SF) 2,911,728 122,147

Source: CoStar

Greater Boston AreaWoburn, Massachusetts falls within the Greater Boston region, one of the largest metropolitan areas in the United States withapproximately 4.5 million residents. With an array of vibrant communities, an extensive public transit network and a number of world-class amenities, Greater Boston ranks as one of the wealthiest regions as well as one of the most desirable areas to live and work inthe United States. Greater Boston maintains a high quality of life, a diversified employment base and a well-developed infrastructure. AsBoston continues to attract global talent due to its high paying labor market, the city’s housing market has expanded rapidly to supportpopulation growth and ever-changing demographic dynamics.

Boston continues to rank among the top U.S. cities for business, education and housing. The city’s diverse economy includes strong-performing industries such as education and health services, retail trade, leisure and hospitality, professional and technical services andfinancial services, which have hedged volatility during economic downturns and promoted steady future growth. With 54 institutions ofhigher education in metropolitan Boston, the city is home to some of the world’s leading universities including Harvard, MIT, Tufts, andBoston College. Boston’s subway system, the MBTA, has 65.5 miles of track on four lines and operates the fourth-busiest subwaysystem in the United States. The Boston economy continues to expand and prosper as information technology and telecommunicationsrebound and biotechnology employment continues to flourish. The city is home to 12 companies on the Fortune 500 list, includingBoston Scientific, Biogen, Staples, and Raytheon. Boston has long been considered one of the most innovative areas in the world witha healthy, resilient economy, and an excellent infrastructure and education system.

Boston, MA

• Super Stop & Shop• Staples• Market Basket• Dollar Tree• Pier 1 Imports

• Target• Lowe’s• TJ Maxx• Kohl’s• PetSmart

Market overview

http://www.jllexchange.com

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Your Resource for Net Lease Investment Offerings

Primary Sales Contacts:

JONES LANG LASALLE AMERICAS, INC.

The material in this Offering Memorandum is confidential, furnished solely for the purpose of considering the “AS IS” acquisition of Boston Sports Club – Woburn, MA (the “Property” or “Asset”) located in the State of Massachusetts. The information is not to be used for any other purpose or to be made available to any other person without the express written consent of Agent on behalf of Owner. The material is based, in part, uponinformation supplied by Owner and, in part, upon information obtained by Agent from sources they deem to be reliable. Summaries contained herein of any legal 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. No warranty or representation, expressed or implied, is made by Owner, Agent or any of their respectiverelated agents or entities as to the accuracy or completeness of the information contained herein. Prospective investors should make their own investigations, projections and conclusions regarding the Property. It is expected that prospective investors will conduct their own independent due diligence concerning the Asset, including such engineering and environmental inspections as they deem necessary to determine the condition of theProperty and the existence or absence of any potentially hazardous materials used in the construction or maintenance of the Asset. No representations, expressed or implied, are made as to the foregoing matters by the Owner, Agent or any of their respective officers, employees, affiliates and/or agents.

Matthew Berres+1 424 901 [email protected]

Scott Bailey+1 424 901 [email protected]

Alex Sands+1 312 228 [email protected]

Adam Friedlander+1 424 901 [email protected]

Local Market Expert:Nat Heald+1 617 316 [email protected]

Documents

Boston Sports Club - LoopNetimages1.loopnet.com/d2/YMM14hC4esLw3pp71...million in 2016 representing a 3.19% increase . • Town Sports has made recent investment in digital platforming