NET LEASE INVESTMENT OFFERING SHOPKO W 41st Street Sioux Falls, SD 57105

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1 SHOPKO 1601 W 41st Street Sioux Falls, SD 57105

2 TABLE OF CONTENTS TABLE OF CONTENTS I. Executive Profile Executive Summary Investment Highlights Property Overview II. Location Overview Photographs Aerial Site Plan Map III. Market & Tenant Overview Demographic Report Market Overview Tenant Overview

3 DISCLAIMER STATEMENT DISCLAIMER STATEMENT: The information contained in the following Offering Memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from The Boulder Group and should not be made available to any other person or entity without the written consent of The Boulder Group. This Offering Memorandum 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. The Boulder Group has not made any investigation, and makes no warranty or representation. The information contained in this Offering Memorandum has been obtained from sources we believe to be reliable; however, The Boulder Group has not verified, and will not verify, any of the information contained herein, nor has The Boulder Group 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.

4 EXECUTIVE SUMMARY EXECUTIVE SUMMARY: The Boulder Group is pleased to exclusively market for sale the fee simple interest in a single tenant absolute triple net leased Shopko property located in Sioux Falls, South Dakota. The property is strategically located at a signalized intersection in the regions dominant retail corridor. Shopko is committed to this location as evidenced by their long operating history at this location (since 1987). There are over 17 years remaining on the Shopko lease that features a low rent per square foot ($10.27), annual rental escalations and two 10-year renewal option periods. In addition, South Dakota is an income tax free state. Shopko is a privately owned retailer with more than 360 stores in 24 states. The 90,585 square foot building is well located within the primary regional trade area at a signalized intersection along 41st Street. 41st Street is the primary east-west thoroughfare in the area with traffic counts of 27,300 vehicles per day. The Shopko property is surrounded by a number of big box retailers including Walmart Supercenter, Target, Costco, Sam s Club, Menards, Best Buy, Hy-Vee, Hobby Lobby and Office Depot. Roughly one-mile from the property is The Empire Mall, a 1,341,202 square foot mall with over 180 stores. The Empire Mall anchors the regional trade area and is a huge tourist attraction in South Dakota, with more than seven million visitors annually. Retailers located within the mall include JCPenney, Macy s, Sears, Dick s Sporting Goods, Coach, Disney, lululemon and NIKE to name a few. There are over 91,590 people living within a three mile radius of the property earning average annual household incomes of $73,646 per year. There are over 17 years remaining on the lease that expires December 31, The triple net lease features annual rental escalations and two 10-year renewal option periods. Shopko operates more than 360 stores in 24 states throughout the Central, Western and Pacific Northwest regions. The company was founded in 1962 and is headquartered in Green Bay, Wisconsin.

5 INVESTMENT HIGHLIGHTS INVESTMENT HIGHLIGHTS: Located in Sioux Falls, the most populous city in South Dakota Income tax free state Long term lease with over 17 years remaining Absolute triple net lease with no landlord responsibilities Annual rental escalations in primary terms and renewal option periods 31 year operating history at this location Low rent per square foot ($10.27) Exceptional visibility and access to 27,300 vehicles per day Abundant parking with over 350 parking spaces Retailers in the immediate area include Walmart Supercenter, Target, Costco, Sam s Club, JCPenney, Macy s, Dick s Sporting Goods, Menards and Hy-Vee Over 91,590 people living within a three mile radius earning an average annual household incomes in excess of $73,600 per year Tenant is a privately held $3 billion retailer that operates over 360 locations in 24 states

6 PROPERTY OVERVIEW PROPERTY OVERVIEW: Price: $12,005,000 Cap Rate: 7.75% Net Operating Income: $930,245 Rental Escalations: 1.95% Annually* Renewal Options: Two 10-Year Lease Commencement Date: May 31, 2006 Lease Expiration Date: December 31, 2035 Tenant: ShopKo Stores Operating Co., LLC Year Built: 1987 Lease Type: Absolute Triple-Net (NNN) Parking: 350+ Spaces Rentable Square Feet 90,585 SF Lot Size: 8.40 Acres Property Address: 1601 W 41st Street, Sioux Falls, SD * The Base Rent increases by the lesser of: (i) 1.25 multiplied by the product of (A) the Base Rent in effect and (B) the CPI Increase or (ii) 1.95% of the Base Rent.

7 PHOTOGRAPHS

8 AERIAL

9 AERIAL

10 SITE PLAN

11 MAP

12 DEMOGRAPHIC REPORT DEMOGRAPHIC REPORT: Population 3-Mile 5-Mile 7-Mile Total Population 91, , ,667 Total Households 39,070 69,692 76,574 Income 3-Mile 5-Mile 7-Mile Median Household Income $51,427 $55,079 $56,909 Average Household Income $73,646 $73,750 $75,375

13 MARKET OVERVIEW MARKET OVERVIEW: Sioux Falls, South Dakota Sioux Falls is the most populous city in South Dakota. It is the county seat of Minnehaha County and also extends into Lincoln County to the south. It is the 47th fastest-growing city in the United States and the fastest-growing metro area in South Dakota, with a population increase of 22% between 2000 and As of 2018, Sioux Falls had an estimated population of 183,200 people. The metropolitan population of 251,854 people accounts for 29% of South Dakota s population. It is also the primary city of the Sioux Falls-Sioux City Designated Market Area, a larger media market region that covers parts of four states and has a population of 1,043,450. Chartered in 1856 on the banks of the Big Sioux River, the city is situated in the rolling hills at the junction of Interstate 90 and Interstate 29. Originally centered on quarrying and agriculturally based industries, the economy of Sioux Falls has become diversified and more service-based over the last half-century, making the city a location for financial services, health care, and retail trade. South Dakota is devoid of personal property tax, inheritance tax and has no corporate income tax, which has led to many businesses relocating or expanding their workforce in Sioux Falls. Sioux Falls is the home of a number of financial companies. The largest employers among these are Wells Fargo and Citigroup. Other important financial service companies located in Sioux Falls include Great Western Bank, Western Surety Company (CNA Surety), Total Card Inc., Capital Card Services, Midland National Life Insurance Company, MetaBank, and First Premier Bank. Sioux Falls is a significant regional health care center. There are four major hospitals in Sioux Falls: Sanford Health (formerly Sioux Valley), Avera McKennan Hospital, the South Dakota Veterans Affairs Hospital, and the Avera Heart Hospital of South Dakota. Sanford Health and Avera Health are the largest and second largest employers in the city, respectively. Sioux Falls is one of the safest cities in America. It s a bold statement, but the crime statistics back it up on average, people here experience less violent and non-violent crimes than in other similarly-sized cities.

14 TENANT OVERVIEW TENANT OVERVIEW: Shopko Shopko Stores Operating Co., LLC operates a chain of general merchandise stores in the United States. Its stores comprise jewelry and watches, home, kitchen and dining, furniture, electronics, toys, sports and team shop, health and beauty, and patio and seasonal departments; clothing and accessories for men, women, kids, and babies, as well as nursery furniture. The company s stores also include in-store pharmacies and optical centers. It also serves customers online. Shopko Stores Operating Co., LLC was formerly known as ShopKo Stores, Inc. The company was founded in 1962 and is headquartered in Green Bay, Wisconsin. It has distribution centers in DePere, Wisconsin; Boise, Idaho; Omaha, Nebraska; and Lebanon, Indiana. Shopko operates more than 360 stores in 24 states throughout the Central, Western and Pacific Northwest regions. Retail formats include more than 130 Shopko stores, providing quality name-brand merchandise, great values, pharmacy and optical services in small to mid-sized cities; 5 Shopko Express Rx stores, a convenient neighborhood drugstore concept; 5 Shopko Pharmacy locations; and more than 220 Shopko Hometown stores, a smaller concept store developed to meet the needs of smaller communities. Shopko Stores Operating Co., LLC is an affiliate of Sun Capital Partners, Inc., a leading private investment firm focused on leverage buyouts, equity, debt, and other investments in market-leading companies that can benefit from its in-house operating professionals and experience. Sun Capital affiliates have invested in and managed more than 340 companies worldwide. Sun Capital has offices in Boca Raton, Los Angeles, and New York, and affiliates with offices in London, Tokyo, and Shenzhen, China. Website: Founded: 1962 Number of Locations: 360+ Number of Employees: 16,900+ Headquarters: Green Bay, Wisconsin Parent Company: Sun Capital Partners, Inc.

15 Randy Blankstein President Jimmy Goodman Partner Lake Avenue, Suite 203 Wilmette, IL