NNN JCPENNEY17610 EAST 39TH ST SINDEPENDENCE, MO 64055

OFFERING MEMORANDUM

Capital Markets | Investment Proper ties

AFFILIATED BUSINESS DISCLOSURE AND CONFIDENTIALITY AGREEMENT

CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing interests in the same transaction. For example, this Memorandum may be received by our Affiliates, including CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the “Property”) may submit an offer to purchase the Property and may be the successful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will act in the best interest of the client(s) it represents in the transaction described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum.

This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property.

This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the owner of the Property (the “Owner”), to be all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner.

Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, Affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your

receipt of this Memorandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property.

The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived.

By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc.

If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc.

© 2015 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.

Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited.

J C P E N N E Y

CONTACT US

TABLE OF CONTENTS

MICHAEL KAIDERNNN SpecialistFirst Vice President+1 630 573 7015michael.kaider@cbre.com

DEBT & STRUCTURED FINANCE:Geoffrey Harris+1 602 735 5615geoffrey.harris@cbre.com

LOCAL LICENSEE:Brad Cottam+1 816 968 5810brad.cottam@cbre.com

04 EXECUTIVE SUMMARY

07 FINANCIAL SUMMARY

08 TENANT OVERVIEW

09 MARKET OVERVIEW

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THE OFFERING

CBRE is pleased to present for sale the fee interest in this NNN JCPenney store located in Independence, Missouri. The original 16 year lease has just over 5 years of term remaining, has a below market rent, very solid co-tenancy with Dicks Sporting Goods and Target, and zero landlord responsibilities. The lease includes two options to extend for ten years each and four options to extend for five additional years each.

The asset is located in the heart of one of metropolitan Kansas City’s most established and successful retail corridors. Primary developments in the corridor collectively encompass approximately 4 million square feet of GLA in attractive, regional mall, power, community, and single tenant formats. The opportunity’s exceptional location is

highly visible along East 39th Street and located northwest of Interstate 70 and Interstate 470/Route 291, a heavily trafficked full access interchange that enjoys over 160,000 vehicles passing per day.

JCPenney is one of the largest department store and e-commerce retailers in the U.S. and operates over 1,000 department stores in 49 states and Puerto Rico, with Sephora shops in nearly 500 locations. JCPenney stores offer a wide assortment of national, private and exclusive brands for men, women, and children. Women’s apparel and accessories comprise 35% of JCPenney’s merchandise mix, followed by men’s apparel and accessories (22%), children’s apparel (11%), and home (11%).

J C P E N N E Y

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INVESTMENT HIGHLIGHTS

+ This is a tremendous opportunity to acquire fee interest in a NNN JCPenney store with zero landlord responsibilities located immediately west of Interstate 470/Route 291 off of the East 39th Street South exit in Independence, Missouri.

+ The original 16 year lease has just over 5 years of term remaining, has a below market rent, very solid co-tenancy with Dicks Sporting Goods and Target, and zero landlord responsibilities.

+ The asset is located in the heart of one of metropolitan Kansas City’s most established and successful retail corridors. The size and scope as well as the prominence of the surrounding retail developments give it a destination status. National retailers within the area include Kohl’s, Best Buy, AMC Theatres, Marshalls, Jo-Ann Fabrics, Wal-mart Supercenter, and Sam’s Club among many others.

+ Primary developments in the retail corridor collectively encompass approximately 4 million square feet of GLA in attractive, regional mall, power, community, and single tenant formats; all within a one-mile radius of the subject property.

+ Independence Center is a regional shopping center that features approximately 1.1 million square feet and over 130 stores. It is situated less than one mile southeast of JCPenney, creating a significant draw to the area with notable tenants including Macy’s, Sears, Dillard’s, Sephora, Bath & Body Works, Victoria’s Secret, and Coach.

+ The development is located just northwest of Interstate 70 and Interstate 470/Route 291, a heavily trafficked full access interchange that enjoys over 160,000 vehicles passing per day.

+ JCPenney serves a primary trade area that includes 55,576 residents with an average household income of 64,285 within a three mile radius. Within a five-mile radius there are 141,228 residents with an average household income of 61,601.

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SITE PLAN

JCPenney Flood Zone Disclosure: According to flood hazard maps published by the FEMA the site is within Zone X as indicated on Community Map Panel

No. 29095C0186F, dated September 29, 2006, an area determined to be outside the 500-year floodplain determined to be outside the 1% and 0.2% annual chance floodplain.

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AERIAL VIEWParcel outlines are approximate

8

FINANCIAL OVERVIEW

Rent Increases Annual Monthly

Current - 1/31/2021 $600,113.04 $50,009.42

Option 1 Years 16 through 20 $661,349.04 $55,112.42

Option 1 Years 21 through 25 $691,967.04 $57,663.92

Option 2 Years 26 through 30 $722,585.04 $60,215.42

Option 2 Years 31 through 35 $753,203.04 $62,766.92

Option 3 $783,821.04 $65,318.42

Option 4 $814,439.04 $67,869.92

Option 5 $845,057.04 $70,421.42

Option 6 $875.675.04 $72,972.92

JCPenney ended fiscal

year 2014 on a high

note and is on a path

to profitable growth for

2015 to 2017.

Offering Price $7,500,000

Cap Rate 8.00%

Rent $600,113

Rent PSF $4.87

Lease Structure NNN

Building Size 123,289 SF

Year Built 1999

Parcel Size 6.003 acres +/-

Tenant J.C. Penney Corporation, Inc.

Guarantee Corporate Guarantee

Original Lease Term 16 years

Term Remaining 5+ years

Lease Commencement January 10, 2005

Lease Expiration January 31, 2021

Renewal Options6 Options

Option 1 through 2 - 10 years eachOption 3 through 6 - 5 years each

Rental Increases5% every 5 years in option 14% every 5 years in option 24% in options 3 through 4

Landlord Responsibilities None

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TENANT OVERVIEW

One of the largest department store and e-commerce retailers in the US, J. C. Penney

Corp. operates some 1,060 JCPenney department stores in 49 states and Puerto Rico,

with Sephora shops in nearly 500 locations. JCPenney stores offer a wide assortment of

national, private and exclusive brands for men, women and children. Women’s apparel

and accessories comprise 35% of JCPenney’s merchandise mix, followed by men’s

apparel and accessories (22%), children’s apparel (11%) and home (11%). The company

also operates the jcpenney.com website, which is optimized for tablet and mobile devices,

and offers an Apple iOS and Android app. The company, headquartered in Plano, TX, is

ranked #235 on the Fortune 500 list. Annual sales for fiscal year ending January 31,

2015 for JCPenney (NYSE: JCP) were $12.2 billion.

JCPenney Corporate Overview

Tenant Name J.C. Penney Corporation, Inc.

Tenant Ownership Status Public (NYSE: JCP)

Tenant Corporate Store

Locations 1,060+

Stock Symbol JCP

Board NYSE

Corporate Headquarters Plano, Texas

TRADE AREA DEMOGRAPHICS 1 MILE 3 MILES 5 MILES

Population

2015 Population 6,890 55,576 141,228

2020 Population 7,054 57,069 144,120

2010 Population 6,742 54,175 138,714

2000 Population 6,151 47,406 129,767

Percent Pop Change: 2010 to 2015 2.2% 2.6% 1.8%

Percent Pop Change: 2015 to 2020 2.4% 2.7% 2.1%

Age

2015 Median Age 39.7 41.5 39.7

2015 Average Age 40.7 41.4 40.1

Households

2015 Households 2,856 23,668 58,419

2020 Households 2,937 24,324 59,715

2010 Households 2,771 23,091 57,262

2000 Households 2,500 19,688 53,093

Percent HH Change: 2010 to 2015 3.1% 2.5% 2.0%

Percent HH Change: 2015 to 2020 2.8% 2.8% 2.2%

Average Household Size 2.3 2.3 2.4

Income

2015 Median Household Income $50,994 $52,058 $48,639

2015 Average Household Income $60,839 $64,285 $61,601

2015 Per Capita Income $25,223 $27,377 $25,482

Housing Units

2015 Housing Units 3,047 25,378 63,713

Occupied Units 2,856 23,668 58,419

Vacant Housing Units 191 1,710 5,294

2015 Owner-Occupied Housing Units 1,905 16,177 39,894

2015 Renter-Occupied Housing Units 951 7,491 18,525

Education

2015 Population Age 25 and Over 4,870 39,127 96,723

High School thru Associates 71.1% 66.8% 67.5%

Bachelor's Degree 14.4% 15.6% 14.2%

Graduate Degree 6.6% 9.5% 8.4%

Place of Work

Total Businesses 364 2,585 5,561

Daytime Employment (Total Employees) 5,626 28,027 53,231

MARKET OVERVIEW

JCPenney is located in the city of Independence, Missouri, approximately 13 miles east of downtown Kansas City. Kansas City is the fourth largest city in Missouri and is one of the county seats of Jackson County, which has a total population of 683,300. Jackson County accounts for 33% of the metro area’s population base of more than 2 million, and is the second most populous county in the state of Missouri, after St. Louis County.

Independence is adjacent to Kansas City’s eastern border. Communities in proximity to Independence include Sugar Creek and Liberty to the north, Rayton and Lees Summit to the south, and Blue Springs to the southeast. Independence is easily accessible from all points in the Kansas City MSA. The city is served by Interstate 70 and 470 and Missouri Route 291.

Primary Trade Area Characteristics

JCPenney is located in the retail corridor that surrounds the area where I-470 comes up from the south and joins with I-70. North of I-70, I-470 changes to Highway 291 that continues north as the primary artery.

The retail developments serving the east side of Jackson County, including Independence, are concentrated around the intersection of I-70 and I-470/Route 291 where the subject property is located. The corridor is anchored by the 1.1 million square foot regional mall, Independence Center, which is located directly across 39th Street from the subject property. The mall has been owned by Simon since 1994 and is anchored by Dillard’s, Macy’s, and Sears. Independence Center is a fortress regional mall and one of the Kansas City MSA’s leading retail developments with a history of strong and high occupancy. In addition to Independence Center, there are several community/power centers within a one-mile radius of the property that include national tenants such as Sam’s Club, Walmart, Target, Dick’s Sporting Goods, Costco, Lowe’s, PetSmart, and Hobby Lobby.

JCPenney’s trade area has an attractive demographic profile with over 55,500 and 141,000 residents within a three and five mile radius, respectively. Within a three mile radius, there are 23,668 households with an average household income over $64,000. Within a five mile radius, there are 58,419 households with an average household income of nearly $62,000. The percentage of owner-occupied housing units is 68% within both a three and five mile radius.

MARKET OVERVIEW

Kansas City MSA Overview

The bi-state, 15-county Kansas City Metropolitan Statistical Area (MSA) is the most centrally located of any principal U.S. city and has a population in excess of 2 million. Kansas City is situated within 250 miles of both the geographic and population centers of the United States. The 15 counties that comprise the MSA are Franklin, Johnson, Leavenworth, Linn, Miami, Wyandotte, Bates, Caldwell, Cass, Clay, Clinton, Jackson, Lafayette, Platte, and Ray Counties in Kansas.

The Kansas City MSA is an affluent and growing region. The MSA is home to more than 2 million residents, and the population is projected to increase 3% over the next five years. Residents earn an average household income of $73,853 and the average home value is over $210,000. Residents of Kansas City MSA are well educated, with 90.9% of residents aged 25+ having earned their high school diploma and 33.3% having earned at least a bachelor’s degree as compared to the national averages of 86.1% and 28.8%, respectively.

The largest employers in Kansas City are Sprint Nextel Corporation, DST Systems, Inc., Ford Motor Company, Hallmark Cards, Inc., HCA Midwest Health System, St. Luke’s Health Systems, Honeywell International Inc., Black & Veatch, AT&T, and Children’s Mercy Hospital.

The Kansas City metropolitan area is a major international transportation hub, with excellent access by highway, rail, and air. Kansas City has more freeway miles than any other metropolitan area in the nation, and is one of only five U.S. cities in which three interstates intersect. Interstates 29, 35 and 70 converge in Kansas City. Interstate 35 is the primary north/south artery and runs between Duluth, Minnesota and Laredo, Texas. Interstate 70 is the primary east/west artery and runs between Denver, Colorado and Baltimore, Maryland. Interstate 29 is a secondary north/south artery between Kansas City and the Canadian border. In addition, there are four interstate linkages (I-435, I-470, I-635, I-670) that loop throughout and around the metropolitan area.

Kansas City International Airport (MCI) offers approximately non-stop service to 51 cities in U.S., Canada, and Mexico. Served by 15 major commercial airlines and their connection partners, MCI is consistently ranked among the top-five airports by the North America Airport Satisfaction Study by J.D. Power and Associates.

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PROPERTY MAPS

J C P E N N E Y

AERIAL VIEW

Parcel outlines are approximate

CONTACT US

MICHAEL KAIDERNNN SpecialistFirst Vice President+1 630 573 7015michael.kaider@cbre.com

CBRE700 Commerce DriveSuite 550Oak Brook, IL 60523

DEBT & STRUCTURED

FINANCE:Geoffrey Harris+1 602 735 5615geoffrey.harris@cbre.com

LOCAL LICENSEE:Brad Cottam+1 816 968 5810brad.cottam@cbre.com

Capital Markets | Investment Proper ties