OFFERING MEMORANDUM

KOHL’S STRIP CENTERGALESBURG, ILLINOIS

ACTUAL PHOTO

Price $7,894,000

Cap Rate 7.00%

Gross Leasable Area 48,809 SF

Current Occupancy 100%

Year Built 2016

Lot Size 4.60 +/- Acres

Rent Roll

ADDRESS:2470-2474 Veterans Drive, Galesburg, IL 61401

TENANT GLA % OF GLA

ANNUALRENT RENT/SF RENT

COMMENCEMENTLEASE

EXPIRATION OPTIONS CHANGES ON CHANGES TO

Kohl’s 36,309 74.39% $381,413 $10.50 10/1/2016 1/31/2032 Six, 5-Year Year 6Year 11

Option 1Option 2Option 3Option 4Option 5Option 6

$419,553$461,508$484,583$508,813$534,253$560,965$589,013$618,463

Pet Supplies Plus 7,500 15.37% $112,500 $15.00 11/4/2016 11/30/2026 Four, 5-Year Year 6Option 1Option 2Option 3Option 4

$120,000$127,500$135,000$142,500$150,000

Shoe Carnival* 5,000 10.24% $70,000 $14.00 11/14/2016 11/30/2026 Three, 5-Year Year 6Option 1Option 2Option 3

$75,000$80,000$85,000$90,000

TOTAL 48,809 100.00% $563,913

INCOME

Base Rent $563,913

Management Fee (2% of Base Rent) ($11,278)

NET OPERATING INCOME $552,635

*In the event Shoe Carnival’s gross receipts do not exceed $700,000 during the 4th lease year (the measuring period), Shoe Carnival may terminate the lease. Said notice shall be given within 6 months after the end of the measuring period and shall be effective on the last day of the 5th lease year.

Demographics• 100% Occupied by Kohl’s, Pet Supplies Plus, and Shoe Carnival

• 15 and 10-Year Leases with Increases Every 5 Years

• Kohl’s Occupies New Smaller Prototype Store, Accounts for 74% of the GLA

• 2016 High-Quality Construction

• Outparcel to Walmart Supercenter and Adjacent to New Menards and Aldi

• Across from OSF St. Mary’s Medical Campus Serving 7 Counties

• 1.5 Miles to Galesburg Cottage Hospital, a 173-Bed Full-Service Facility

• Close Proximity to 4,800 Students at Carl Sandburg and Knox Colleges

• Hard Corner Location at Signalized Intersection

• Excellent Access to Hwy. 34 and I-74 with 28,300 Cars/Day

• 45 Miles Northwest of Peoria

Investment HighlightsPOPULATION 3-MILES 5-MILES 7-MILES

2010 Population 28,580 34,834 39,869

2016 Population 28,106 34,256 39,182

2021 Population 27,858 33,914 38,783

HOUSEHOLDS

2010 Households 12,184 14,107 16,134

2016 Households 11,903 13,772 15,752

2021 Households 11,897 13,740 15,705

INCOME

2016 Median Household Income $37,451 $37,672 $39,405

2016 Per Capita Income $23,110 $22,227 $22,519

2016 Average Household Income $51,573 $51,652 $52,768

Population within a 5-Mile Radius

13,772Households within

a 5-Mile Radius

$51,652Average Household Income

within a 5-Mile Radius

34,256

Tenant OverviewThe Kohl’s Corporation is an American department store retailing chain. The first Kohl’s store was a corner grocery store opened in Milwaukee, Wisconsin in 1927 by Maxwell Kohl. The company’s first department store opened in September 1962. British American Tobacco Company took a controlling interest in the company in 1972, and in 1979, the Kohl family left the management of the company. A group of investors purchased the company in 1986 from British-American Tobacco and took it public in 1992. Kohl’s is the second-largest department store by retail sales in the United States. The company is headquartered in the Milwaukee suburb of Menomonee Falls, Wisconsin, operating 1,155 stores in 49 states. Kohl’s is America’s largest department store chain by the number of stores as of February 2013. In 1998, it entered the S&P 500 list, and is also listed in the Fortune 500 (#146 in 2012). The chain was the 20th-largest retailer in the United States in 2013 in terms of revenue. As of 2013, Kohl’s was the second largest U.S. department store company by retail sales.

1,155+LOCATIONS

HEADQUARTERED INMenomonee Falls, WI

MORE THANFOUNDED

1962 140,000TEAM MEMBERS

$18.686 Billion

SALES VOLUME

STOCK SYMBOL

KSSNYSE: STANDARD & POOR’S

CREDIT RATING

BBB-

OWNERSHIP:PUBLIC

TENANT:CORPORATE

WEBSITE:www.kohls.com

REPRESENTATIVE PHOTO

LANDLORD RESPONSIBILITIES

Landlord shall, at Landlord’s sole expense, keep the foundation, HVAC, roof joists, roof decking, roof membrane, exterior and all structural components of the building in good condition and shall be responsible for any and all maintenance, repairs and/or replacements thereof. Landlord shall, at Landlord’s sole expense, make all necessary replacements to the Common Areas, including the replacement/repaving of parking areas and access drives. All repairs and replacements made pursuant to this Section shall be at least equal in quality and workmanship to the original work.

TENANTRESPONSIBILITIES

Tenant shall, at its sole expense, keep the Building in good condition and repair and shall be responsible for any and all maintenance and repairs thereto, ordinary wear and tear excepted.

CAM Tenant shall operate, maintain and repair the common areas and Landlord shall pay Tenant an annual charge representing Landlord’s contribution towards CAM. Landlord shall pay Tenant a fixed amount equal to $1.00 per square foot of the total floor area of the shopping center less the floor area of the building. CAM Charges shall increase 3% annually.

TAXES Tenant shall reimburse Landlord for its pro rata share of taxes.

INSURANCE Tenant shall purchase and maintain property insurance and commercial general liability insurance. Landlord shall purchase and maintain commercial general liability insurance and all-risk property insurance. Tenant shall reimburse Landlord for its pro rata share of the cost of Landlord’s all-risk property insurance.

ASSIGNMENT & SUBLETTING

Tenant may assign or sublet the lease but shall only be released from its lease obligations should the lease be assigned to an entity with a net worth of at least $100,000,000.

ESTOPPEL Tenant shall have 20 Business Days from receipt of request to provide an executed estoppel.

Lease Summary

Tenant OverviewPet Supplies Plus, founded in 1988 in Redford, Michigan in the United States, is a privately held pet supply retailing corporation with a major presence in the US. As of 2005, it was the third largest specialty pet food retailer in the US. The company began adding franchise locations in the Midwest, expanding into the northeastern and southern states during the late 1990’s. Today, Pet Supplies Plus store locations consisted of over 385 stores in 25 states.

The chain’s founders, Harry Shallop and Jack Berry, sought to bring grocery store convenience into the pet supply world. The chain’s stores are owned by independent franchisees and company stores. Measuring about 10,000 square feet, the stores are focused on being neighborhood pet supply “supermarkets,” stocking a very wide selection of pet food and supplies. The stores also have limited livestock departments, and some have also recently added grooming services and self-serve dog washes. The stores make it a point to welcome dogs, cats and other pets to its stores. Pet Supplies Plus considers themselves to be “Americas Favorite Neighborhood Pet Store” In keeping with the neighborly feel, it displays biscuits at “nose level” so dogs can take samples while shopping with their owners. Many locations sponsor adoption events with local animal rescue and humane groups. Pet Supplies Plus currently has their own brand of natural dog food called Redford Naturals, comparable in quality to Blue Buffalo, but sold at a cheaper price.

OWNERSHIP:PRIVATE

TENANT:CORPORATE

WEBSITE:www.petsuppliesplus.com

385+LOCATIONS

HEADQUARTERED IN

Livonia, MI

FOUNDED

1988RANKED #1 IN

PET INDUSTRY BY ENTREPRENEUR

MAGAZINE’ TOP 500

REPRESENTATIVE PHOTO

LANDLORD RESPONSIBILITIES

Landlord shall maintain the shopping center including the common areas and the roof, outer walls and structural components of the building containing the premises, and all utility facilities and alarm and fire safety systems serving the premises to the point the same enter the premises and any utility lines under the floor or embedded in walls (unless the utility lines were installed by Tenant as part of Tenant’s Work in which event Tenant shall maintain same), in good order, condition and repair and first-class appearance. Landlord shall also maintain and repair in first-class appearance, condition and function, any pylon or monument signage installed by Landlord.

TENANTRESPONSIBILITIES

Tenant shall maintain and repair those remaining portions of the premises which Landlord is not obligated to maintain and repair in good order, condition and repair, reasonable wear and tear and damage by casualty and condemnation excepted. Without limiting the generality of the foregoing, Tenant shall be responsible for routine periodic maintenance and minor repairs of the HVAC equipment exclusively serving the premises and Tenant shall maintain a service contract on such HVAC equipment, providing for routine periodic maintenance of such HVAC equipment.

CAM Tenant’s fixed contribution to CAM shall be $1.00 per square foot of its GLA, which shall increase 3% annually.

TAXES Tenant shall reimburse Landlord for its pro rata share of taxes.

INSURANCE Tenant shall purchase and maintain commercial general liability insurance. Landlord shall purchase and maintain commercial general liability insurance and all-risk property insurance. Tenant shall reimburse Landlord for its pro rata share of the cost of Landlord’s insurance.

EXCLUSIVE USE Landlord shall not enter into a lease which permits another store in the shopping center to be used for the pet use except on an incidental base. Use shall be incidental if less than the lesser of (i) 50 square-feet or (ii) 5% of floor area is used for the pet use.

CO-TENANCY If Kohl’s ceases to operate, Tenant shall pay only 50% of the minimum rent until the ongoing co-tenancy failure is cured. Should this occur for 12 months, Tenant may terminate the lease by giving written notice to Landlord.

ASSIGNMENT & SUBLETTING

Tenant may assign or sublet the lease but shall only be released from its lease obligations should the lease be assigned to an entity with a net worth of at least $25,000,000.

ESTOPPEL Tenant shall have 30 Days from receipt of request to provide an executed estoppel.

Lease Summary

Tenant OverviewShoe Carnival is an American retailer of family footwear. The company operates 419 stores throughout the midwest, south, and southeast regions. It was founded by David Russell in 1978 and is headquartered in Evansville, Indiana.

The company sells men’s, women’s, children’s, and athletic footwear through its retail stores. Its stores also offer accessories such as handbags, wallets, shoe care items, and socks. The main difference in Shoe Carnival stores is its concept. The Shoe Carnival Concept is creating an urgency to buy through limited time promotions and the microphone. The mic person announces “specials” over the microphone. These specials include discount, product information, and fun specials which encourage customers to make a purchase.

In 2006 the company began construction on a $40 million corporate headquarters and distribution center. Shoe Carnival’s headquarters are now located in a new 60,000-square-foot building at Cross Pointe Commerce Center on the city’s east side. The company’s 410,000-square-foot distribution center was built on Indiana 57 just north of the city.

In 2007, the retailer announced record sales and plans to open 25 additional stores. In 2011, the company announced that it would be offering online shopping to customers.

419+LOCATIONS

HEADQUARTERED IN

Evansville, IN

FOUNDED

1978$1

BillionSALES VOLUME

STOCK SYMBOL

SCVLNASDAQ:

OWNERSHIP:PUBLIC

TENANT:CORPORATE

WEBSITE:www.shoecarnival.com

REPRESENTATIVE PHOTO

LANDLORD RESPONSIBILITIES

Landlord shall maintain the buildings in the shopping center, including the following: A) foundation, concrete pad (slab), exterior walls, fascia, parapet, storefront (excluding doors and windows), shell and all structural components; B) any sprinkler, fire protection, detection, safety or other suppression system or equipment, including the monitoring and testing thereof C) roof, canopy, downspouts, awnings, and gutters; D) utility lines, conduit and metering devices to the point of connection to the premises; E) electrical and mechanical equipment, electrical transformers and related equipment, unless located within the interior and; F) pipes, plumbing, conduits and ducts, unless located within the interior.

TENANTRESPONSIBILITIES

Tenant shall maintain the following components of the premises: the exterior and interior portions of all doors, windows and plate glass in the premises; any electrical equipment within the interior of the Premises; plumbing and sewage facilities within the interior of the Premises; drop downs and sprinkler heads of any sprinkler system within and exclusively serving the premises, but no other portion; interior fixtures; interior walls; interior floors, but not slab; ceilings; signs (including storefront sign); interior building appliances and equipment; and all other non-structural portions of the interior of the premises. Tenant shall also maintain, repair and replace the HVAC and shall maintain a quarterly service contract. Tenant shall also contract for a trash removal service for the premises.

CAM During the base year, Tenant’s fixed contribution to CAM shall be $1.00 per square foot of its GLA. For each successive calendar year, commencing January 1 of such year, Tenant’s fixed contribution to CAM Charges shall increase at the fixed rate of 3% annually.

TAXES Tenant shall reimburse Landlord for its pro rata share of taxes.

INSURANCE Tenant shall purchase and maintain commercial general liability insurance (naming Landlord as additionally insured) and casualty insurance. Landlord shall purchase and maintain commercial general liability insurance and property insurance. Tenant shall reimburse Landlord for its pro rata share of the cost of Landlord’s insurance

EARLY TERMINATION

In the event Tenant’s gross receipts do not exceed $700,000 during the 4th lease year (the measuring period), Tenant may terminate the lease. Said notice shall be given within 6 months after the end of the measuring period and shall be effective on the last day of the 5th lease year.

EXCLUSIVE USE Tenant shall have the exclusive right to sell footwear in the shopping center and the exclusive use shall not apply to the existing Kohl’s or Pet Supplies Plus. In addition, the exclusive use shall not apply to any future department store operating in the premises currently occupied by Kohl’s and shall not prohibit the incidental sales of footwear by tenants occupying at least 20,000 square-feet or tenants operating principally and primarily for the sale of fashion and apparel merchandise.

CO-TENANCY At all times during the lease term, Kohl’s shall be occupying 35,000 square-feet and must be open and operating from its premises fully stocked and staffed. If at any time during the lease term the co-tenancy requirement is not satisfied, Tenant shall have the right to pay alternate rent (alternate rent shall mean a monthly rental amount equal to the lesser of 3% of gross receipts for such month or 50% of the base rent plus CAM). If Tenant shall have paid alternate rent for a period of 18 consecutive months and the co-tenancy requirement has not been satisfied, Tenant shall have the right to terminate the lease.

ASSIGNMENT & SUBLETTING

Tenant may assign or sublet the lease but shall only be released from its lease obligations should the lease be assigned to an entity with a net worth of at least $50,000,000.

ESTOPPEL Tenant shall have 30 Days from receipt of request to provide an executed estoppel.

Shoe Carnival Lease Summary

Aerial Photo

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CHURCHILL JUNIORHIGH SCHOOL890 STUDENTS

BNSF RAILWAY

STEELEELEMENTARY SCHOOL427 STUDENTS

GALESBURGHIGH SCHOOL1,346 STUDENTS

LOMBARD JUNIORHIGH SCHOOL485 STUDENTS

KINGELEMENTARY SCHOOL383 STUDENTS KATHERINE NIELSON

ELEMENTARY SCHOOL420 STUDENTS

SILAS WILLARDELEMENTARY SCHOOL447 STUDENTS

1,420 STUDENTS

SUBJECT PROPERTY

SANDBURG MALL &

SHOPPING CENTER

GALESBURG COTTAGE HOSPITAL

OSF ST. MARYMEDICAL CENTER

34

SOANGETAHACOUNTRY CLUB

N SEMINARY STREET

N HENDERSON STREET

22,000 DAILY

15,400 DAILY12,900 DAILY

RESIDENTIALCOMMUNITIES34,256 RESIDENTS IN TRADE AREA

150

E CARL SANDBURG DRIVE

VETERANS DRIVE

N SEMINARY STREET

9,600 DAILY

RESIDENTIALCOMMUNITIES34,256 RESIDENTS IN TRADE AREA

SUBJECT PROPERTY

OSF ST. MARYMEDICAL CENTER

99-BED ACUTE CARE HOSPITAL

VETERANS DRIVE

E CA

RL S

ANDB

URG

DRIV

ESUBJECT

PROPERTY

N SEMINARY STREET

SANDBURG MALL &

SHOPPING CENTER

RESIDENTIALCOMMUNITIES34,256 RESIDENTS IN TRADE AREA

9,600 DAILY

Site Plan

SIGN

SIGNSIGN

DU

MPSTER

DU

MPSTER

VETERANS DRIVE

CARL SAND

BURG

DRIVE

FUTURE EXPANSION

AREA

VETERANSDRIVE

2470-2474

T O L O C A L A T T R A C T I O N SPROXIMITY

2 M I L E SDowntownGalesburg

5 M I L E SGalesburg Muni

Airport

3 M I L E SKnox

College

4 M I L E SCarl Sandburg

College

Galesburg is a city in Knox County, Illinois, United States. This city is forty-five miles northwest of Peoria. It is the county seat of Knox County. Galesburg is home to Knox College, a private four-year liberal arts college, and Carl Sandburg College, a two-year community college. Galesburg City Township is an active township that is coterminous with the city. Galesburg is the principal city of the Galesburg Micropolitan Statistical Area, which includes all of Knox and Warren counties.

The City of Galesburg is located on Interstate 74 in Northwest Illinois and is approximately 50 miles east of the Mississippi River. The Illinois General Assembly organized the City under the provisions of “an Act to Incorporate the City of Galesburg” on February 14, 1857. The City is a home rule municipality and has operated under the Council-Manager form of government since 1956. The City Council is comprised of seven Councilmembers and a Mayor. The Councilmembers are elected, for four-year staggered terms, from defined wards. All city residents elect the Mayor for a four-year term. Some of Galesburg’s major employers include; BNSF Railway, OSF St. Mary’s Medical Center, Galesburg Cottage Hospital, Blick Art Materials, Carl Sandburg College and Knox College.

Galesburg, IL

CONFIDENTIALITY & 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.

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.

NET-LEASED DISCLAIMER

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.

Phil SambazisSenior Managing Director

SAN DIEGOTel: (858) 373-3174 phil.sambazis@marcusmillichap.com License: CA 01474991

exclusive offeringThomas LadtSenior Associate

SAN DIEGOTel: (858) 373-3175 thomas.ladt@marcusmillichap.com License: CA 01803956

Steven WeinstockBroker of Record

OAK BROOKLicense: 471.011175