WALGREENS 9976 Jefferson Avenue • Newport News, VA 23605

Offering Memorandum

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and Disclaimer The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to

be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other

person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to

provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of

interest in the subject property. The information contained herein is not a substitute for a thorough due diligence

investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with

respect to the income or expenses for the subject property, the future projected financial performance of the

property, the size and square footage of the property and improvements, the presence or absence of contaminating

substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the

improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or

intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure

has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not

verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding

these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the

information provided. All potential buyers must take appropriate measures to verify all of the information set forth

herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017

Marcus & Millichap. All rights reserved.

Non-Endorsement Notice Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in

this marketing package. 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 Marcus & Millichap, its affiliates or

subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for

the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

WALGREENS

Newport News, VA

ACT ID Y0140750

N E T L E A S E D D I S C L A I M E R

Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will

not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee,

warranty or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a net leased property, 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 your thorough due diligence investigation of this investment opportunity. Marcus &

Millichap expressly denies any obligation to conduct a due diligence examination of this Property for 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 you depends on factors that should be evaluated by you and your tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to

your satisfaction with the suitability of the property for your needs.

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 success. 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 Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost,

expense, or liability arising out of your investigation and/or purchase of this net leased property.

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WALGREENS

PROPERTY PHOTOS

ACTUAL PROPERTY

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EXECUTIVE SUMMARY

OFFERING SUMMARY

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WALGREENS

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WALGREENS

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OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

*

Newport News Shipbuilding 18,001

Huntington Ingalls Inc 8,245

City of Newport News 5,219

City Line Apts 3,900

Riverside Regional Medical Ctr 2,972

RIVERSIDE HEALTH SYSTEM 2,962

Northrop Grumman Systems Corp 1,907

Canon Virginia Inc 1,500

Futrell & Holt Inc 1,300

Thomas Jefferson National 1,200

UPS 1,027

Lockheed Martin Corporation 1,018

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2016 Estimate Pop 12,479 70,005 169,472

2016 Census Pop 12,309 69,263 166,080

2016 Estimate HH 5,105 27,822 68,220

2016 Census HH 5,052 27,756 67,503

Median HH Income $47,645 $48,069 $47,275

Per Capita Income $26,805 $25,204 $25,222

Average HH Income $64,444 $62,444 $61,439

* # of Employees based on 5 mile radius

OFFERING SUMMARY

Price $4,485,000

Capitalization Rate 7.00%

Price / SF $324.44

Lease Type NN

Gross Leasable Area 13,824 SF

Year Built / Renovated 2000

Lot Size 1.84 acre(s)

NOI $314,000

Tenant Walgreens

Lease Commencement 4/1/2000

Lease Expiration 3/31/2060

Right to Cancel 2020 & Every Five Years Thereafter

Renewal Options None

Tenant Responsibility Property Tax, Insurance & Maintenance

Landlord Responsibility Roof & Structure

Right of First Refusal/Offer Yes

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WALGREENS

PROPERTY PHOTOS

Subject Property at Bottom Looking at Opposing Corner Looking North Along Jefferson Avenue (Highway 17)

Looking North-East Along Main Street Looking South Along Jefferson Avenue (Highway 17)

ACTUAL PROPERTY

WALGREENS

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INVESTMENT OVERVIEW INVESTMENT OVERVIEW

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Investment Grade Tenant (NYSE:WAG). S&P “BBB” Credit Rating.

Property Lies on 1.841 +/- Acres

60 Year Walgreens Corporate Double-Net Lease. Tenant has the Right to Cancel in 2020 and

Every Five Years Thereafter .

The Strength of this Location Bodes Well for Walgreens Long Term Occupancy:

• Signalized Corner (NEC) of Jefferson Avenue and Main Street

• Jefferson Avenue is a Six Lane Highway and Also US Route 17

• Ten Traffic Lanes and 50,000 +/- Cars Per Day

• Excellent Visibility From Four Directions

• Entrances From Three Different Streets

• Drive Thru Feature Provides Ease and Convenience

• Liquor License

• Average Household Income of $60,000+

• Highly Constrained Urban Infill Market

Newport News is Home to and the Subject Property to an Area Roughly Between Newport

News Shipbuilding, Naval Station Norfolk, Langley Airforce Base, Fort Eustis Army Base and

Newport News Williamsburg International Airport.

Outstanding Demographics in a Five Mile Radius: 165,000 Population Count and $60,000

Dollars Plus Household Income.

INVESTMENT HIGHLIGHTS

WALGREENS

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INVESTMENT OVERVIEW

The subject property is a 13,842 +/- square foot freestanding Walgreens located in Newport News, Virginia. The subject property is located at the signalized intersection of Jefferson Avenue and Main Street. The property was built in 2000 and lies on an oversized lot of 1.841 +/- acres, an 18 percent coverage ratio. The tenant, Walgreen Co., signed a 60-year lease that commenced on 4/1/2000 and expires on 3/31/2060. The tenant has the right to terminate the lease after the 240th month and every five years thereafter. However, it is hard to imagine Walgreens would not occupy for many years to come even with the right to cancel in 2020. With a 17-year operating history this store has proven integral to Walgreens coverage of the Newport News submarket. The strength of this location: on a signalized corner of two major thoroughfares, ten traffic lanes and 50,000+ cars, excellent visibility from four directions, entrances from three (3) different streets, a pharmacy drive-through, a liquor license, an average household income of $60,000+ in a highly constrained urban infill market. This double net lease requires Walgreens to pay for property taxes, insurance and maintenance. The Landlord is responsible for structure and roof. The lease is guaranteed by Walgreen Co., the nation's largest drug store chain that ranks 19th in the Fortune 500 (2016) with a current annual rent of $314,000.00 dollars. Primary access to the subject is via Jefferson Avenue. There are three driveways that provide ingress/egress to the property. They are located at Jefferson Avenue, Main Street, and Village Parkway. Overall, access to the property is good from both a neighborhood (local) perspective, as well as a macro (regional) perspective. Visibility to the subject is considered very good as well. The subject property sits roughly between Langley Air Force Base, Naval Station Norfolk, Fort Eustis Army Base and the areas largest employer, Newport News Shipbuilding. Jefferson Avenue is one of two thorough-fares that run the length of the Virginia Peninsula, from Williamsburg to the mouth of the James River at the Chesapeake Bay. This particular stretch of Jefferson is six lanes, with turning lanes in the median, making it eight lanes at times. A couple miles north and south of the pharmacy, along Jefferson, are many independent car lots, appliance shops, small businesses, and stoplights at every block, with roads that turn off into small neighborhoods. Area retailers include: Big Al's Mufflers and Brakes, a local retail strip center, Burger King, Pizza Hut, Best Value Inn, BP Gas, Eckerd, Wachovia Bank, 7-Eleven, Super 8 Motel, and McDonald's. The traffic count on Jefferson Avenue and Main Street was reported at 46,000 +/- ADT in 2002.

INVESTMENT OVERVIEW (Continue)

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WALGREENS

AREA OVERVIEW

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WALGREENS

AREA OVERVIEW

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9976 Jefferson Avenue, Newport News, VA 23605

LOCATION OVERVIEW TENANT SUMMARY PRICING AND VALUATION MATRIX

PROPERTY NAME WALGREENS

PRICING AND VALUATION MATRIX

PROPERTY NAME

WALGREENS

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LOCATION OVERVIEW

• Newport News Shipbuilding is the Largest Industrial Employer in Virginia. It is a Sole Designer, Builder and Re-Fueler of U.S. Navy Aircraft Nuclear-Powered Carriers and One of Two Providers of U.S. Submarines.

• Langley Air Force Base Houses the

Following: 633rd Air Base, 480th Intelligence, Surveillance and Reconnaissance Wing, 192nd Fighter Wing (Virginia Air National Guard), Global Cyberspace Integration Center Field Operating Agency, Headquarters Air Combat Command (ACC) and F-22 Raptor Demo Team.

• Naval Station Norfolk is the World's Largest Naval Station. The Installation Occupies About Four Miles of Waterfront Space and 11 Miles of Pier and Wharf Space With the Largest Concentration of U.S. Navy Forces Through 75 Ships Alongside 14 Piers and With 134 Aircraft and 11 Aircraft.

• Fort Eustis Army Base is Home to the United States Army Training and Doctrine Command, the U.S. Army Aviation Logistics School and the 7th Transportation Brigade.

AERIAL PHOTO

WALGREENS

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PROPERTY SUMMARY

OFFERING SUMMARY

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WALGREENS

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OFFERING SUMMARY

LEASE SUMMARY

Tenant Walgreens

Rent Increases None

Guarantor Corporate Guarantee

Lease Type NN

Lease Commencement 4/1/2000

Lease Expiration 3/31/2060

Lease Term (Years) 60

Term Remaining on Lease (Years) 42.7

Right to Cancel 2020 & Every Five Years

Thereafter

Renewal Options None

Landlord Responsibility Roof & Structure

Tenant Responsibility Property Tax, Insurance &

Maintenance

Right of First Refusal/Offer Yes

PROPERTY DESCRIPTION

Year Built / Renovated 2000

Gross Leasable Area 13,824 SF

Zoning C1

Type of Ownership Fee Simple

THE OFFERING

Property Walgreens Co.

Property Address 9976 Jefferson Avenue

Newport News, VA 23605

Price $4,485,000

Capitalization Rate 7.00%

Price/SF $324.44

ANNUALIZED OPERATING INFORMATION

Net Operating Income $314,000

RENT SCHEDULE

YEAR ANNUAL RENT MO. RENT RENT/SF

Current $314,000 $26,167 $22.71

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TENANT PROFILES

WALGREENS

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Walgreens Co.

Founded in 1901, Walgreens Boot Alliance, Inc. is the nation’s largest drugstore chain. Charles

R. Walgreen built the chain from a single drugstore where he created his own drug products.

By 1919 there were 20 stores, and in 1927 the Company went public. Three years later, the

store count was well over 500. Today, Walgreen operates over 8,200 stores in all 50 states,

DC, Puerto Rico and the U.S. Virgin Islands. More than 400 of its stores offer medical services

through its Healthcare Clinics. Additionally, the Company operates digital businesses that

include Walgreens.com, drugstore.com, Beauty.com, SkinStore.com and VisionDirect.com.

In December 2014, Walgreen acquired the remaining 55 percent of European retailer and

wholesaler Alliance Boots, and reorganized under a holding company called Walgreens Boots

Alliance, Inc., headquartered in Chicago. The Walgreen chain now constitutes the Retail

Pharmacy USA Division of Walgreens Boot Alliance, Inc.

In October 2015, Walgreens Boots Alliance announced an agreement to acquire all

outstanding shares of Rite Aid for 9.00 dollars per share in cash, for a total enterprise value of

about 17.20 billion dollars, including acquired net debt. The transaction is expected to close in

the second half of 2017. Upon completion of the merger, Rite Aid will be a wholly owned

subsidiary of Walgreens Boot Alliance, and is expected to initially operate under its existing

brand name. Working together, decisions will be made over time regarding the integration of

the two companies. Once the acquisition closes, Walgreens Boot Alliance plans to further

transform Rite Aid’s stores to better meet consumer needs.

TENANT PROFILE

TENANT TRADE Walgreen Co.

OWNERSHIP Public

TENANT Corporate Store

LEASE GUARANTOR Corporate Guarantee

NUMBER OF LOCATIONS 8,200+

HEADQUARTERED Deerfield, IL

WEB SITE www.walgreens.com

SALES VOLUME $117.3 Billion (2016)

NET WORTH $30.2 Billion (2016)

STOCK SYMBOL WBA

BOARD New York Stock Exchange (NYSE)

CREDIT RATING BBB

RATING AGENCY S&P

MARCUS & MILLICHAP CAPITAL CORPORATION

CAPABILITIES

MMCC—our fully integrated, dedicated financing arm—is committed to

providing superior capital market expertise, precisely managed execution, and

unparalleled access to capital sources providing the most competitive rates and

terms.

We leverage our prominent capital market relationships with commercial banks,

life insurance companies, CMBS, private and public debt/equity funds, Fannie

Mae, Freddie Mac and HUD to provide our clients with the greatest range of

financing options.

Our dedicated, knowledgeable experts understand the challenges of financing

and work tirelessly to resolve all potential issues to the benefit of our clients.

National platform

operating

within the firm’s

brokerage

offices

$5.1 billion

total national

volume in 2016

Access to

more capital

sources than

any other firm

in the industry

Optimum financing solutions

to enhance value

Our ability to enhance

buyer pool by expanding

finance options

Our ability to enhance

seller control

• Through buyer

qualification support

• Our ability to manage buyers

finance expectations

• Ability to monitor and

manage buyer/lender

progress, insuring timely,

predictable closings

• By relying on a world class

set of debt/equity sources

and presenting a tightly

underwritten credit file

WHY MMCC?

Closed 1,651

debt and equity

financings

in 2016

ACQUISITION FINANCING

WALGREENS

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MARKETING TEAM

Source: © 2015 Experian

PROPERTY NAME

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CREATED ON AUGUST 14, 2017

LOCATION OVERVIEW TENANT SUMMARY PRICING AND VALUATION MATRIX

PROPERTY NAME WALGREENS

PRICING AND VALUATION MATRIX

PROPERTY NAME

WALGREENS

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DEMOGRAPHICS

1 Miles 3 Miles 5 Miles

POPULATION

2021 Projection 12,333 69,947 172,594

2016 Estimate 12,479 70,005 169,472

2010 Census 12,309 69,263 166,080

2000 Census 12,183 68,976 163,027

INCOME

Average $64,444 $62,444 $61,439

Median $47,645 $48,069 $47,275

Per Capita $26,805 $25,204 $25,222

HOUSEHOLDS

2021 Projection 5,068 27,925 69,990

2016 Estimate 5,105 27,822 68,220

2010 Census 5,052 27,756 67,503

2000 Census 4,893 27,594 65,533

HOUSING

2016 $185,149 $182,547 $188,677

EMPLOYMENT 2016 Daytime Population

16,934 86,496 204,806

2016 Unemployment

5.53% 4.43% 5.23%

2016 Median Time Traveled

24 24 24

RACE & ETHNICITY

White 52.52% 50.57% 44.62%

Native American 0.11% 0.13% 0.13%

African American 38.84% 40.56% 45.81%

Asian/Pacific Islander

1.95% 2.23% 2.83%