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BEAR CREEK CROSSINGS2160-2180 ANDERSON ROAD | PETOSKEY, MI 49770

O F F E R I N G M E M O R A N D U MCAPITAL MARKETS | INVESTMENT PROPERTIES

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.

Your receipt of this Memorandum constitutes your acknowledgement that (i) it is a confidential Memorandum solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property, (ii) you will hold it in the strictest confidence, (iii) you will not disclose it or its contents to any third party without the prior written authorization of the owner of the Property (“Owner”) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any manner detrimental to the Owner or CBRE, Inc.

CBRE, Inc. © 2018 All Rights Reserved.

TABLE OF CONTENTS

EXECUTIVE SUMMARY

PROPERTY DESCRIPTION

SALE COMPARABLES

LEASE COMPARABLES

FINANCIAL OVERVIEW

MARKET OVERVIEW

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EXECUTIVE SUMMARY

5 | BEAR CREEK CROSSINGS | PETOSKEY, MI

INVESTMENT HIGHLIGHTS

Asking Price: Cap Rate: Price PSF:

$8,392,000 8.50% $183

LOCATED IN THE RETAIL HUB OF PETOSKEY, MICHIGANThe Property is in a great location in the main retail corridor of Petoskey, Michigan. Other major retailers nearby include Lowe’s, Home Depot, Aldi, Marshalls, Bed Bath and Beyond, Hobby Lobby, Meijer and many others.

NEWER CONSTRUCTIONThe buildings were constructed between 2007 and 2009 and are in excellent condition.

GREAT LOCATIONThe asset has excellent accessibility and visibility along Anderson Road amidst a primary retail corridor in close proximity to US-131 and at the entrance to the Odawa Casino and Hotel, as well as Bay Harbor Resort.

STABLE ASSETThe Property is 85% occupied by 12 tenants with lease terms ranging from 5 to 14 years with increasing base rents and triple net reimbursements. Strong historical occupancy and increasing NOI.

STRONG DEMOGRAPHICSThe Property is located within a strong demographic and high growth market with an average household income of $76,309 within a five-mile radius.


INVESTMENT OVERVIEW

Bear Creek Crossings is a three-building, multi-tenant shopping center that was constructed between 2007 and 2009 and contains 45,857 square feet. Anchor tenants include Pet Supplies Plus, Buffalo Wild Wings and Anytime Fitness. The center is shadow-anchored by Lowe’s, ALDI, the Regional Odawa Indian Casino, Meijer and Wal-Mart Supercenter. The Asset is adjacent to a 10-screen cineplex, Home Depot and is located at the entrance to a newer $200M casino/convention resort that is located directly behind this site. The site covers 7.38 acres at the southwest quadrant of Anderson and Lears Roads, just west of US-131. It is noted that there may be access easements located across this parcel as part of the larger shopping center development. It is recommended that a complete title survey is reviewed to define the existence of these easements.

The Property is currently 85% occupied by 12 tenants on varying lease expirations and terms. Pet Supplies Plus and Buffalo Wild Wings collectively occupy over 30% of the center. Both tenants have recently signed lease extensions through 2023 and 2028 respectively. Pet Supplies Plus includes annual rent increases over the term of the lease and each tenant has renewal options that include rent increases. Buffalo Wild Wings pays an annual percentage rent of 4% of gross sales in excess of $2M. Both renewal options include rent increases. The remaining tenants are national, local and regional in nature; and many are long-standing tenants in the center.

The Property is located in the city of Petoskey in northwestern Michigan, roughly 30 miles north of Traverse City. Petoskey, Michigan is a four-season lakeside community located on the shores of Lake Michigan’s beautiful Little Traverse Bay in the northern tip of Michigan’s Lower Peninsula. Petoskey is approximately 350 miles from Chicago, 250 miles from Detroit and 180 miles from Grand Rapids. Petoskey boasts economic diversity in which tourism is a

CBRE, Inc. has been retained by the property owner as the exclusive marketing advisor for the disposition of the multi-tenant shopping center, Bear Creek Crossings (the “Property”) located at 2160-2180 Anderson Rd., Petoskey, Michigan, 49770

THE OFFERING

major contributor to the local community. They also have many sophisticated professional service representatives in the real estate, legal and financial sectors along with light-manufacturing facilities supporting the plastics, automobile supply chain, aeronautics, robotics and wood products industries. The largest employer in the area is McLaren Northern Michigan, a 202-bed, regional health care facility employing 1,700+ professionals.

PROPERTY DESCRIPTION


PROPERTY OVERVIEW

PROPERTY ADDRESS

Bear Creek Crossings2160-2180 Anderson Road

Petoskey, MI 49770

COUNTY Emmet County

PARCEL NUMBER 01-19-18-100-050

TYPE OF OWNERSHIP Fee Simple

PROPERTY TYPE Multi Tenant Retail

OCCUPANCY 85%

NUMBER OF TENANTS 12

YEAR BUILT/RENOVATED 2007-2009

PARCEL SIZE 7.38 Acres

TOTAL SIZE 45,857 Square Feet

ZONING Commercial

PARKING Surface parking lot - 475 spaces

FOUNDATION Concrete

FIRE PROTECTION To code

HVAC Roof mounted units


SITE OUTLINE


SITE PLANS

BEAR CREEK CROSSINGS RETAIL DEVELOPMENT

BEAR CREEK CROSSINGS RETAIL DEVELOPMENT - BUILDING #3

BEAR CREEK CROSSINGS RETAIL DEVELOPMENT - BUILDING #4

SALES COMPARABLES


SALE COMPARABLES

FINANCIAL OVERVIEW


FINANCIAL OVERVIEW

Asking Price: Cap Rate: Price PSF:

$8,392,000 8.50% $183


INCOME & EXPENSE ESTIMATES

INCOME ESTIMATES

SCHEDULED BASE RENT

The year one income is based on the current rental income (and any potential rental escalations) for the first year of ownership (6/1/2018 - 5/30/2019). It is noted that any vacant space at the start of the analysis term is assumed to remain vacant for the entirety of year one. Similarly, any tenants with expiration dates during year one are assumed to remain tenants for the entirety of year one at their current rental rate and reimbursement method.

ABSORPTION AND TURNOVER VACANCY

The year one absorption and turnover vacancy is estimated based on the current vacant space of 6,689 square feet. All vacant space is assumed to remain vacant for the first year of the analysis.

EXPENSE REIMBURSEMENT

The analysis reflects tenants on varying reimbursement structures. Please refer to the rent roll for each tenant’s detailed reimbursement method.

VACANCY

The subject is currently 15% vacant. Due to the current vacancy of 5.6% in the city of Petoskey, no additional vacancy factor has been applied.


INCOME & EXPENSE ESTIMATES

EXPENSE ESTIMATES

REAL ESTATE TAXES

This analysis estimates the real estate taxes based on the 2017 SEV of $2,137,000 (which compares to the 2017 taxable value of $1,946,010) and the current non-homestead millage rate of 43.40, which equates to $92,739, or $2.02 per square foot.

COMMON AREA MAINTENANCE

Estimated based on the 2016 - 2017 actual expenses provided.

MANAGEMENT FEE

The analysis has included a management fee of 5% of EGI, which is in-line with the historical management expense at the property.

MISCELLANEOUS/NON-REIMBURSABLE EXPENSES

Miscellaneous non-reimbursable repairs and maintenance expenses and expenses that are non-reimbursable such as utilities on the 4,525 square feet of vacant area have been estimated at $0.30 per square foot based on the historical income and operating expenses provided.

PROPERTY INSURANCE

The historical income statements indicate an insurance expense of $0.09 per square foot for 2016 and $0.06 per square foot for 2017. However, these reflect a blanket insurance policy. Therefore, based on market expense comparables, this expense is estimated to be $0.15 per square foot.

REPLACEMENT RESERVES

The analysis has assumed replacement reserves of $0.20 per square foot above the NOI line.


YEAR ONE CASH FLOW ESTIMATES

PRICE:

$8,392,000

RENTABLE SQUARE FOOTAGE:

45,857

PRICE PER SQUARE FOOT:

$183

CAP RATE:

8.50%

Net Operating Income $713,298 $15.55

Bear Creek Crossings Shopping Center Year One Cash Flow Estimates


RENT ROLL AS OF JUNE 2018

MARKET OVERVIEW


MARKET OVERVIEW

PETOSKEY OVERVIEW

The total existing amount of retail space in the Petoskey market is approximately 3,339,799 square feet. Currently, there are no new retail developments in the works.

Petoskey is an upscale, four-season, lakeside community located on the shores of Lake Michigan’s beautiful Little Traverse Bay in the northern tip of Michigan’s Lower Peninsula. Petoskey is a highly sought-after community characterized by high-incomes and economic diversity in which tourism and the vacation home real estate market is a major contributor to the local community. They also have many sophisticated professional service representatives in the real estate, legal and financial sectors along with light-manufacturing facilities supporting the plastics, automobile supply chain, aeronautics, robotics and wood products industries. The largest employer in the area is McLaren Northern Michigan, a 202-bed, regional health care facility employing 1,700+ professionals.

For the past five years, cap rates have been averaging 8.0%. In 2015, average cap rates were at 5.0%. The average sale price per square foot is $192, up from the five year average of $62.

ECONOMIC OVERVIEW

Emmet County is the county seat and home to North Central Michigan College, where enrollment is approximately 2,600 students. The county’s close proximity to the water makes this area a very desirable place to live in.

The employment trend in Emmet County has been steadily increasing over the past five years. In September 2015, the employment rate was 95.5%. With the increases in technology, more people are moving to Northern Michigan in search of a higher quality of life.

EMPLOYMENT

McLaren Northern Michigan Hospital is the largest employer in Emmet County, making healthcare and social assistance the largest industry in the area. The second largest industry in this area is casino/resort. Moeller Aerospace Technology also provides for over 240 jobs in the area. In 2017, the unemployment rate was 4.8% with job growth of 1.44%.

Source: Emmet County Census Profile

Major EmployersCOMPANY NAME INDUSTRY

McLaren Northern Michigan Hospital Health Care

LTBB Gaming Adminstration Casino/Resort

Moeller Aerospace Technology Aircraft Engines & Parts Manufacturing

Bay Harbor Co. Inc. Land Development

Home Depot Inc. Lumber, Building Materials

Walmart Stores, Inc. Department Store

Circuit Controls Corp. Manufacturing Connectors; Terminals

Bay Bluffs Medical Care Facility Medical Care Facility

Lowe’s Home Center Inc. Lumber; Building Materials


MARKET OVERVIEW

AREA ATTRACTIONS AND DEMOGRAPHIC DRIVERS

Odawa Casino Resort

Greater Petoskey Area Attractions Attraction Distance from Property

Odawa Casino Resort Adjacent to the property

McLaren Northern Michigan Hospital 2 miles

Bay Harbor Yacht Club 2 miles

Downtown Bay Harbor - Retail District 2 miles

Petoskey Gaslight District 2 miles

Bay Harbor Equestrian Center 2 miles

Harbor Springs Tourism Area 5 miles

Tunnel of Trees 6 miles

Charlevoix Tourism Area 20 miles

Northern Michigan Wine Tours 20 miles

Boyne Mountain Resort 20 miles

Downtown Petoskey, Michigan is one of the most treasured downtowns in the United States. Nestled on the shores of Little Traverse Bay on Lake Michigan, residents and tourists enjoy over 170 unique shops and fine restaurants in the nationally recognized historic Gaslight Shopping District located two miles from the subject property. The downtown area of Petoskey, Michigan serves as a hub for resorters from Bay Harbor, Bay View, Harbor Springs, Walloon Lake, and the surrounding Emmet County region.

Other major attractions include Odawa Casino Resort, Bay Harbor Equestrian Center, Bay Harbor Yacht Club, and a wide variety of the finest golf courses, ski resorts, and wineries within a twenty mile radius of the Bear Creek Crossings Shopping Center.

Bay Harbor Yacht Club


LOCATION MAP

BEAR CREEKCROSSINGS


REGIONAL MAP

© 2018 CBRE Limited. Data © TeleAtlas, Google, AerialExpress, DigitalGlobe, Landiscor, USGS, i-cubed. The information contained herein (the “Information”) is intended for informational purposes only and should not be relied upon by recipients hereof. Although the Information is believed to be correct, its accuracy, correctness or completeness cannot be guaranteed and has not been verified byeither CBRE Limited or any of its affiliates (CBRE Limited and its affiliates are collectively referred to herein as “CBRE”). CBRE neither guarantees, warrants nor assumes any responsibility or liability of any kind with respect to the accuracy, correctness, completeness, or suitability of, or decisions based upon or in connection with, the Information. The recipient of the Information should take such stepsas the recipient may deem appropriate with respect to using the Information. The Information may change and any property described herein may be withdrawn from the market at any time without notice or obligation of any kind on the part of CBRE. The Information is protected by copyright and shall be fully enforced. Layout ID: L09 MapId: 5150332

SITE

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DEMOGRAPHIC BRIEF

2180 ANDERSON RD

NAME LATITUDE LONGITUDE

2180 ANDERSON RD 45.3457976156464 -84.9709743248554

©2018 CBRE. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are forexample only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the propertyfor your needs. Source: Esri ProjectID:292631

5 MILES

3 MILES

1 MILE

DEMOGRAPHICSDEMOGRAPHIC BRIEF

2180 ANDERSON RD

1 MILE 3 MILES 5 MILES

2017 Population - Current Year Estimate 1,757 10,458 13,958

2022 Population - Five Year Projection 1,828 10,682 14,255

2010 Population - Census 1,649 10,130 13,508

2000 Population - Census 1,262 9,649 12,870

2010-2017 Annual Population Growth Rate 0.88% 0.44% 0.45%

2017-2022 Annual Population Growth Rate 0.80% 0.42% 0.42%

2017 Households - Current Year Estimate 874 4,530 5,879

2022 Households - Five Year Projection 908 4,620 5,996

2010 Households - Census 822 4,409 5,721

2000 Households - Census 557 4,045 5,233

2010-2017 Annual Household Growth Rate 0.85% 0.37% 0.38%

2017-2022 Annual Household Growth Rate 0.77% 0.39% 0.39%

2017 Average Household Size 2.00 2.24 2.32

2017 Average Household Income $52,850 $71,339 $76,309

2022 Average Household Income $59,224 $81,095 $87,054

2017 Median Household Income $36,806 $51,811 $56,101

2022 Median Household Income $40,962 $54,589 $59,313

2017 Per Capita Income $27,068 $31,500 $32,471

2022 Per Capita Income $30,279 $35,682 $36,930

2017 Housing Units 1 ,076 5 ,755 8 ,411

2017 Vacant Housing Units 202 18.8% 1,225 21.3% 2,532 30.1%

2017 Occupied Housing Units 873 81.1% 4,530 78.7% 5,879 69.9%

2017 Owner Occupied Housing Units 322 29.9% 2,482 43.1% 3,612 42.9%

2017 Renter Occupied Housing Units 551 51.2% 2,048 35.6% 2,267 27.0%

2017 Population 25 and Over 1 ,293 7 ,333 9 ,787

HS and Associates Degrees 709 54.8% 3,988 54.4% 5,397 55.1%

Bachelor's Degree or Higher 517 40.0% 3,045 41.5% 3,999 40.9%

2017 Businesses 128 949 1,195

2017 Employees 5,567 15,791 18,232

©2018 CBRE. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are forexample only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the propertyfor your needs. Source: Esri Page 1 ProjectID:292631

POPULAT ION

HOUSEHOLDS

HOUSEHOLD INCOME

HOUS ING UN ITS

EDUCAT ION

PLACE OF WORK

FOR MORE INFORMATION PLEASE CONTACT:

BILL O’CONNORSenior Vice President+1 248 351 [email protected]

DAVID HESANOVice President+1 248 351 [email protected]

SHELLIE JAKSENSenior Financial Analyst+1 248 351 [email protected]

OFFERING MEMORANDUM

CAPITAL MARKETS | INVESTMENT PROPERTIES

ADDISON WILLIAMSAssociate+1 248 351 [email protected]

CBRE © 2018 All Rights Reserved. All information included in this letter/proposal pertaining to CBRE—including but not limited to its operations, employees, technology and clients—are proprietary and confidential, and are supplied with the understanding that they will be held in confidence and not disclosed to third parties without the prior written consent of CBRE. This letter/proposal is intended solely as a preliminary expression of general intentions and is to be used for discussion purposes only. The parties intend that neither shall have any contractual obligations to the other with respect to the matters referred herein unless and until a definitive agreement has been fully executed and delivered by the parties. The parties agree that this letter/proposal is not intended to create any agreement or obligation by either party to negotiate a definitive lease/purchase and sale agreement and imposes no duty whatsoever on either party to continue negotiations, including without limitation any obligation to negotiate in good faith or in any way other than at arm’s length. Prior to delivery of a definitive executed agreement, and without any liability to the other party, either party may (1) propose different terms from those summarized herein, (2) enter into negotiations with other parties and/or (3) unilaterally terminate all negotiations with the other party hereto.

This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. 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.

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