OFFERING MEMORANDUM

At the Gate of the Air Force’s Largest Installation Base

SAN ANTONIO TEXAS

Walgreens

CONFIDENTIALITY AND DISCLAIMERThe 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.

NON-ENDORSEMENT NOTICEMarcus & Millichap Real Estate Investment Services, Inc. (“M&M”) 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 w, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of M&M, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

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 YOURMARCUS & MILLICHAP AGENT FOR MORE DETAILS.

Walgreens

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Lake Charles

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Pasadena

Waco

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Baytown

Brownsville

Galveston

Grand Prairie

Laredo

Longview

McAllen

MidlandOdessa

Plano

Port Arthur

Richardson

San Angelo

Tyler

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Wichita Falls

Matamoros

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Albuquerque

Tulsa

Shreveport

Corpus Christi

Dallas

El Paso

Fort Worth

Houston

San Antonio

Santa Fe

Oklahoma City

Austin

Chihuahua

Monterrey

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Arkansas

Louisiana

New Mexico

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TEXAS

Mexico

Investment Summary .........................................1Investment Highlights.........................................2Aerial Map .........................................................6Tenant Summary ................................................7Site Plan ..........................................................11Area Map .........................................................13 Location Overview ............................................15Location Highlights ...........................................17Demographics ..................................................18Contact Information .........................................20

TABLE OF CONTENTS

Walgreens

Walgreens

O V E R V I E WPrice $6,428,571

Gross Leasable Area (GLA) 14,820 SF

Lot Size (approx.) 2.09 Acres

Net Operating Income $360,000

CAP Rate 5.60%

Year Built / Renovated 2008

L E A S E A B S T R A C TLease Type NNN

Lease Term Remaining 14.5 Years

Lease Start 1/7/2008

Lease Expiration 1/6/2033

Renewal Options 50x1

Increases Flat

Roof & Structure Tenant Responsible

502 NEW VALLEY HI DRIVE, SAN ANTONIO, TX 78227

PRICE: $6,428,571 CAP: 5.60% RENT: $360,000

INVESTMENT SUMMARY

A N N U A L I Z E D O P E R AT I N G D ATA

Lease Term Annual Rent

Current Term $360,000

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INVESTMENT HIGHLIGHTSThe subject site is most influenced by: Lackland Air Force Base is home to more than 120 Department of Defense and associate organizations, including the 37th Training Wing, the largest training wing in the U.S. Air Force. Lackland is the Air Force's only site for enlisted basic military training, and also offers professional and technical skills, and English language training for members of the U.S. Air Force, other military services, government agencies, and allies. Its four primary training functions graduate more than 86,000 students annually. In 2005, Lackland was recommended for joint basing for the three major installations around the city: Fort Sam Houston, Lackland AFB and Randolph AFB. In 2009, all 3 bases were included into Lackland AFB.

NNN25 year true NNN lease

with fifty years in options and a Prescription

approved drive thru

Features excellent visibility: Daily traffic counts exceed

14,771 vehicles per day passing directly in front

of the site and over 104,870 on I-410

Newer construction, built in 2008, on an

oversized 2.09 acre lot

Located at the gate to Lackland Air Force Base, the largest Air Force Base installation in the Country

Near Wilford Hall Medical Center, a $418 mil

682,000 SF Air Force Flagship Medical Campus

Limited national competition with the nearest drug store more than 2.8 miles from

the subject site

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Lackland Air Force Base

U.S. 90

INTERSTATE 410Walgreens

Wilford Hall Medical Center

3

WalgreensWalgreens

INVESTMENT HIGHLIGHTS t Located at the gate of Lackland Air Force Base, the

Country’s largest Air Force training center

t Barriers to entry due to military presence occupying more than 7,000 acres

t Corner of oversized 2.09 acre lot, offers future ease in redevelopment

t Site has Prescription approved drive thru

t Congested traffic counts that exceed 94,000 vehicles per day

t Limited national competition with the nearest drug store more than 2.8 miles from the subject site

104,870 VPD

181,911TOTAL POPULATION WITHIN 5-MILE RADIUS

$53,077AVERAGE HOUSEHOLD INCOME WITHIN 7-MILE RADIUS

- INTERSTATE 410

6,469 VPD - RAY ELLISON ROAD

8,302 VPD - NEW VALLEY HI DRIVE

Walgreens

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5

NEW VALLEY HI DR – 8,302 VPD

RAY ELLISON

RD – 6,469 VPD

INTERSTATE 410 – 104,870 VPD

McDonald’s

tm

Walgreens

Burger King

Lackland Air Force Base

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Walgreens

TENANT SUMMARYWALGREENSWalgreens Boots Alliance, Inc. operates as a pharmacy led health and well being company. The company operates through three segments: Retail Pharmacy USA, Retail Pharmacy International, and Pharmaceutical Wholesale. The Retail Pharmacy USA segment sells prescription drugs and an assortment of general merchandise, convenience foods, and more through its retail drugstores and convenient care clinics. It also provides specialty pharmacy services; and manages in-store clinics under the brand Healthcare Clinic. As of August 31, 2016, this segment operated over 13,700 retail stores under the Walgreens and Duane Reade brands in the United States; 7 specialty pharmacy locations; managed approximately 400 Healthcare Clinics. The Retail Pharmacy International segment sells prescription drugs; and health, beauty, toiletry, and other consumer products through its pharmacy led health and beauty stores, as well as through boots.com and BootsWebMD.com. The Boots segment operated 4,673 retail stores under the No. 7, Boots Pharmaceuticals, Botanics, Liz Earle, Soap & Glory, and only at Boots brand names in the United Kingdom, Mexico, Chile, Thailand, Norway, the Republic of Ireland, the Netherlands, and Lithuania; and 636 optical practices in the United Kingdom. Walgreens Boots Alliance, Inc. was founded in 1901 and is based in Deerfield, Illinois.

RANKINGS t Ranked #19 Fortune 500

t Ranked #177 Forbes Global 2000

t Standard & Poor’s Rated BBB

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DEERFIELD, ILHEADQUARTERS

OWNERSHIP Tenant Trade Name

LOCATIONSGUARANTOR

WALGREENS BOOTS ALLIANCE, INC.

13,700 +/-CORPORATE

PUBLIC

REVENUE

$103.44(BIL)ANNUAL SALES

$30.86(BIL)

WALGREENS

WEBSITE

WWW.WALGREENS.COM

9

Walgreens

10

Walgreens

I-410 AC

CESS R

D (SW

LOO

P 410)NEW VALLEY HI DRIVE

RAVENSROAD DRIVE

SITE PLAN

Walgreens

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12

San Antonio

Leon ValleyAlamo Heights

Terrell Hills

China Grove

Cibolo

Cross Mountain

AtascosaElmendorf

Selma

Windcrest

Helotes

Universal City

Walgreens

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Walgreens

SAN ANTONIO, TEXASSan Antonio is the seventh most populous city in the United States and the second most populous city in both Texas and the Southern United States. San Antonio’s notable attraction includes the River Walk, the Tower of the Americas, SeaWorld, the Alamo Bowl, and Marriage Island. Commercial entertainment includes Six Flags Fiesta Texas and Morgan’s Wonderland amusement parks. According to the San Antonio Convention and Visitors Bureau, the city is visited by about 32 million tourists a year. It is home to the five-time NBA champion San Antonio Spurs, and hosts the annual San Antonio Stock Show & Rodeo, one of the largest such events in the United States.

The U.S. Armed Forces have numerous facilities in and around San Antonio; Fort Sam Houston is the only one within the city limits. Lackland Air Force Base, Randolph Air Force Base, Lackland AFB/Kelly Field Annex, Camp Bullis, and Camp Stanley are outside the city limits. Kelly Air Force Base operated out of San Antonio until 2001, when the airfield was transferred to Lackland AFB. The remaining parts of the base were developed as Port San Antonio, an industrial/business park and aerospace complex. San Antonio is home to six Fortune 500 companies and the South Texas Medical Center, the only medical research and care provider in the South Texas region.

The subject site is most influenced by: Lackland Air Force Base is home to more than 120 Department of Defense and associate organizations, including the 37th Training Wing, the largest training wing in the U.S. Air Force. Lackland is the Air Force’s only site for enlisted basic military training, and also offers professional and technical skills, and English language training for members of the U.S. Air Force, other military services, government agencies, and allies. Its four primary training functions graduate more than 86,000 students annually. In 2005, Lackland was recommended for joint basing for the three major installations around the city: Fort Sam Houston, Lackland AFB and Randolph AFB. In 2009, all 3 bases were included into Lackland AFB.

San Antonio has a diversified economy with a gross domestic product (GDP) of approximately $96.8 billion. This ranks the city fourth in Texas and 38th in the United States. San Antonio’s economy focuses primarily on military, health care, government-civil service, financial services, oil and gas, and tourism. Within the past twenty years, the city has become a significant location for American-based call centers and has added a sizable manufacturing sector centered around automobiles.

Located about 10 miles northwest of Downtown is South Texas Medical Center, a conglomerate of various hospitals, clinics, and research (Southwest Research Institute and Texas Biomedical Research Institute) and higher educational institutions.

LOCATION OVERVIEW

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Walgreens

Over twenty million tourists visit the city and its attractions every year, contributing substantially to its economy, primarily due to The Alamo and the River Walk. The Henry B. Gonzalez Convention Center alone hosts over 300 events annually with more than 750,000 convention delegates from around the world. Tourism provided over 130,000 jobs, and it had an economic impact of $13.6 billion in the local economy. The City of San Antonio received $195 million in the same year from the hospitality industry, with revenues from hotel occupancy tax, sales taxes and others.

San Antonio is the headquarters of six Fortune 500 companies: Valero Energy, Andeavor (formerly Tesoro Corp), USAA, iHeartMedia, NuStar Energy, and CST Brands, Inc., H-E-B, the 13th-largest private company in the US is also based in San Antonio. Other companies headquartered in the city include Bill Miller Bar-B-Q Enterprises, Carenet Healthcare Services, Security Service Federal Credit Union, Visionworks of America, Frost Bank, Harte Hanks, Kinetic Concepts, SWBC, NewTek, Rackspace, Taco Cabana, Broadway Bank, Zachry Holdings/Zachry Construction Company, Randolph-Brooks Federal Credit Union, SAS, and Whataburger. The North American Development Bank, a development institution jointly held by the governments of the U.S. and Mexico, is headquartered in San Antonio as well. Other notable companies that maintain sizable presences in the city include Hulu, OCI, Kaco New Energy, Silver Spring Networks, Toyota, Argo Group, EOG Resources, Microsoft, Cogeco Peer1, and Boeing.

In 2015, San Antonio was ranked at No. 50 by Forbes magazine on their list of the Best Places for Business and Careers, while being listed as the 15th best market for job growth.

The subject Walgreens: located at 502 New Valley Hi Dr, San Antonio TX 78227 is in the epicenter and surrounded by the off-shoots of Lackland AFB. The main gate can be seen from the site. The Veterinary Treatment Facility, US Renal Care-Gateway, Texas Health and Human Services Commission, and H-E-B Pharmacy are all surrounding the site. Additionally, it is near well-known nationwide companies such as Wells Fargo, Enterprise Rent-A-Car, and Dollar Tree. In the surrounding area there are also popular chain restaurants such as Burger King, Pizza Hut, Little Caesars Pizza, McDonald’s, and Sonic Drive-In.

Given its proximity to Lackland and the surrounding retail, it is no mystery that the site is performing well above the national average in store sales.

LOCATION OVERVIEW (CONTINUED)

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San Antonio

Leon ValleyAlamo Heights

Terrell Hills

China Grove

Cibolo

Cross Mountain

AtascosaElmendorf

Selma

Windcrest

Helotes

Universal City

M A J O R E M P L O Y E R S : 2 0 1 7S A N A N T O N I O , T X

Joint Base San Antonio (JBSA) 75,972

H.E.B. Food Stores 22,000

USAA 17,163

Northside Independent School District 13,969

City of San Antonio 12,231

North East Independent School District 9,292

Methodist Health Care System 8,960

San Antonio Independent School District 7,374

Baptist Health Systems 6,432

Wells Fargo 5,010

LOCATION HIGHLIGHTS

Congested Traffic Counts exceed 94,000

Vehicles Per day

Nearest National Competition is

2.8 Miles from Site

SAN ANTONIO, TXAT THE GATE OF LACKLAND AIR FORCE BASE

Located at the Gate of the Country’s

largest Air Force Base Training Center

Located just 5 Miles from Downtown

San Antonio

5 Miles from Downtown San Antonio

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181,911Total Population Within 5-Mile Radius

$53,077Average Household Income

Within 5-Mile Radius

$44,042Median Household Income

Within 5-Mile Radius

51,131Total Households in 5-Mile Radius

46.83% From 2000

DEMOGRAPHICS / SAN ANTONIO, TX

Walgreens

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POPULATION 1 MILE 3 MILES 5 MILES2022 Projection

Total Population 14,102 83,906 194,6532017 Estimate

Total Population 13,360 80,782 181,9112010 Census

Total Population 11,980 72,697 162,0952000 Census

Total Population 10,235 59,290 121,875Current Daytime Population

2017 Estimate 14,143 84,431 154,403

HOUSEHOLDS 1 MILE 3 MILES 5 MILES2022 Projection

Total Households 3,403 23,634 57,1782017 Estimate

Total Households 3,082 21,797 51,131

Average (Mean) Household Size 3.3 3.16 3.232010 Census

Total Households 2,807 19,912 46,3322000 Census

Total Households 2,360 16,377 34,822Occupied Units

2022 Projection 3,403 23,634 57,1782017 Estimate 3,172 22,594 52,627

HOUSEHOLDS BY INCOME 1 MILE 3 MILES 5 MILES2017 Estimate

$150,000 or More 2.89% 1.45% 2.04%

$100,000 - $149,000 7.09% 6.60% 7.84%$75,000 - $99,999 12.49% 10.05% 11.25%$50,000 - $74,999 21.52% 21.03% 23.12%$35,000 - $49,999 17.47% 17.41% 16.57%Under $35,000 38.54% 43.45% 39.17%

Average Household Income $54,915 $48,935 $53,077

Median Household Income $44,401 $40,129 $44,042

Per Capita Income $13,181 $14,724 $15,756

HOUSEHOLDS BY EXPENDITURE 1 MILE 3 MILES 5 MILESTotal Average Household Retail Expenditure $57,154 $52,524 $56,113

Consumer Expenditure Top 10 Categories 0.0694 $15,149 $14,061 $14,889 Shelter $11,250 $10,643 $11,494 Transportation $8,085 $7,522 $7,959 Food $6,286 $5,743 $6,182 Personal Insurance and Pensions $4,343 $3,795 $4,325 Health Care $3,756 $3,548 $3,722 Utilities $3,595 $3,348 $3,546 Apparel $2,000 $1,813 $1,959 Entertainment $1,657 $1,492 $1,610 Household Operations $1,506 $1,380 $1,463

POPULATION PROFILE 1 MILE 3 MILES 5 MILESPopulation By Age

2017 Estimate Total Population 13,360 80,782 181,911Under 20 34.15% 33.65% 34.21%20 to 34 Years 31.83% 30.87% 28.01%35 to 39 Years 5.94% 6.17% 6.91%40 to 49 Years 9.12% 9.78% 11.02%50 to 64 Years 9.71% 11.11% 12.16%Age 65+ 9.26% 8.42% 7.70%

Median Age 25.85 26.48 27.97Population 25+ by Education Level

2017 Estimate Population Age 25+ 6,923 42,904 101,095Elementary (0-8) 10.34% 9.03% 9.06%Some High School (9-11) 10.61% 13.03% 12.98%High School Graduate (12) 29.72% 32.83% 31.45%Some College (13-15) 25.51% 25.32% 25.56%Associate Degree Only 7.40% 6.67% 7.00%Bachelors Degree Only 10.26% 8.58% 8.90%Graduate Degree 4.84% 2.87% 3.11%

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SAN ANTONIO TEXAS

Walgreens

LIOR REGENSTREIFSENIOR MANAGING DIRECTOR INVESTMENTS

SENIOR DIRECTOR, NET LEASED PROPERTIES GROUPENCINO OFFICE

Tel: (818) 212-2730Fax: (818) 212-2710

Lior.Regenstreif@marcusmillichap.comLicense: CA 01267761