Freestanding, Absolute Net Leased Property

Firestone Automotive Service Center

3880 John Gordon Lane, Deep River

High Point, North Carolina 27265

James P. Houser, Jr., CCIM Compass Rose Associates, Inc. PO Box 49588 Charlotte, North Carolina 28277 Phone 704-347-5000 - Fax 704-338-9594 www.compassroseassociates.com jphouser@compassroseassociates.com

The investment opportunity: Compass Rose Associates, Inc., a commercial real estate development and investment firm located in Charlotte, North Carolina, is pleased to offer for sale this freestanding Firestone store located just south of Greensboro, North Carolina in the upscale Deep River community. This store, developed by Compass Rose in 2003, is part of the Deep River commercial development in High Point, North Carolina. High Point is part of the Greensboro - Winston-Salem - High Point CSA which has a population of 1,600,000. This store serves the needs of residents in the newly developing areas between High Point and Greensboro. The store operation is seasoned and serves as the focal point for not only tire service but also for auto repair in the area. Since auto repair zoning is not easy to obtain in this area, there are barriers to entry for new competition. Brick construction represents Firestone’s image as the upscale auto repair convenient to surrounding upscale offices and neighborhoods. The property is leased by the US subsidiary of Bridgestone Corporation, which operates the Firestone brand name. The lease is absolute triple-net , which requires no day to day involvement by the landlord. The current net rental is $176,150 per year but will increase to $202,583 on September 1, 2013 and $232,971 on September 1, 2018. Assuming a 7.5% cash on cash return on the average of the next 5 year rentals, the offering price is $2,490,000.

Location: The property is located in central North Carolina

More specifically, the property is located between Greensboro and High Point, North Carolina:

Central North Carolina

The Piedmont “Triad” area of North Carolina

The Piedmont “Triad” is located in the north-central region of North Carolina. It is called the “Triad” by locals due to the close proximity of three larger cities: Greensboro, Winston-Salem, and High Point. The Triad is represented economically as the Greensboro - Winston-Salem - High Point CSA and is not to be confused with the "Triangle" region (Raleigh / Durham / Chapel Hill) directly to the east. The metropolitan area is connected by Interstates 40, 85, 73, & 74 and is served by the Piedmont Triad International Airport. Because of great interstate access and a willing and largely non-unionized workforce, the area has a well developed economic base centered on manufacturing and distribution. The Piedmont Triad has a population of over 1,600,000 making it the 30th largest CSA in the United States. The Firestone store is located in the northern quadrant of High Point, North Carolina and only several miles from the city limits of Greensboro. High Point is located in the Piedmont Triad region of North Carolina and is known for its furniture, textiles, and bus manufacturing. Some regard the city as the "Furniture Capital of the World" and it is called "North Carolina's International City" due to the semi-annual High Point Market that attracts 100,000 exhibitors and buyers from around the world. The focal point for the Market is over 3,000,000 square feet of furniture display space in downtown High Point.

High Point has a total population of over 100,000 making it the eighth-largest municipality in North Carolina.

To the northeast of High Point is the larger and more prominent city of Greensboro, North Carolina. Greensboro is North Carolina’s the third-largest city with over 250,000 residents.

Greensboro was named for Major General Nathanael Greene, commander of the American forces at the Battle of Guilford Court House on March 15, 1781.

Greensboro’s economic base is similar to that of High Point but with a higher emphasis on business and government. It has been the headquarters of Jefferson Standard and Pilot life insurance companies which were merged into Lincoln National Life in the late 1990’s. It is the seat of Guilford County and a regional center for both federal and state government.

In 1998, FedEx announced it would build a $300 million mid-Atlantic air-cargo and sorting hub at Piedmont Triad International Airport just west of Greensboro (see map above). The facility opened in 2009 and immediately put the Greensboro – High Point on the map as a distribution and logistics hub in the Southeast and middle Atlantic regions. This directly influenced Dell computer to develop a manufacturing facility near the airport.

The airport was instrumental in attracting the development of a new multi-million dollar jet airplane manufacturing facility and world headquarters for Honda Aircraft Company. This Honda subsidiary will build the new HondaJet at the site, and the first planes are planned to roll off the assembly line in 2010. The first test flight for the jet took place at the airport in 2001.

The airport, the Dell manufacturing plant and the Honda aircraft facility are within easy driving distance of the Firestone store.

In addition to Dell and Honda, there are a number of notable companies headquartered in the Greensboro – High Point area including Lorillard Tobacco Company, VF Corporation, Syngenta Crop Protection, Mack Trucks, Volvo Trucks of North America, RF Micro Devices, the International Textile Group, NewBridge Bank, Cook Out and Gilbarco Veeder-Root. Greensboro is also a "center of operations" for the insurance company Lincoln Financial Group. Nearby Winston-Salem hosts the headquarters of the Nation’s tenth largest bank, BB&T. O'Reilly Auto Parts has recently opened a large regional distribution center that employs 500.

Although traditionally associated with the textile and tobacco industries, central and eastern North Carolina is rapidly becoming a high tech center focusing on computer science and bio-technology. The Raleigh, Durham, Chapel Hill area to the east of the Triad is know as the “Silicon Valley of the East” and a new bio tech park owned by David Murdock , owner of Dole Food,is under development in nearby Kannapolis, North Carolina. These efforts are well supported by research programs at the University of North Carolina, North Carolina State University, Duke University, and Wake Forest University. The University of North Carolina at Greensboro and North Carolina A&T State University have opened a joint research park, Gateway University Research Park in 2008. They established The Joint School of Nanoscience & Nanoengineering at that facility.

There are nine business parks between the Firestone store and the Airport.

Because of its location between Greensboro and High Point, direct access to the Piedmont Triad International Airport, close proximity to and interstate highways I-40, I-73, I-74 and I-85, the numerous business parks and employers such as Dell, Honda, and FedEx, the Deep River community has become a focal point for upscale middle income residents as well as manufacturing and office facilities. The Firestone store is located just south of Piedmont Centre, an 1,100 acre corporate park (“H” on the above map.)

The Firestone store attracts customers from the industrial and office areas to the north but also from the numerous residential neighborhoods in the area. Note the residential streets on the map above and the residential subdivisions and apartments on the aerial below. Approximately 10,000 new upper middle class homes have been built in the area since 1990. Oak Hollow Lake is favored by local residents who desire the beauty and recreational advantages of lake living.

Aerial Photo shows the location of the Firestone Store in the Deep River commercial area.

Surrounding uses.

Close up view of the Firestone Store.

Firestone store as viewed from John Gordon Lane.

Looking North along John Gordon Lane, apartments in the background.

Looking South along John Gordon Lane, K&S Cafeteria and Bruster’s in the background.

Daily activity in the Deep River Firestone Store.

Investment Summary Investment Type: Absolute Net Leased Free-Standing Automotive

Service Facility Property Name: Firestone Automotive Service Center Property Location: 3880 John Gordon Lane High Point, NC 27265 Year Built: 2003 Construction Type: Brick on steel frame Building Size: 4,877 SF Site Size: 1.005 Acres Tenant: BFS Retail & Commercial Operations, LLC, a wholly-owned subsidiary of Bridgestone Corporation. Lease Term: 20 years with three 5-year options. The initial term is from

September 1, 2003 until August 31, 2023. The options extend the term until 2038.

Rent: Base rent started at $153,182.07 per year and is now $ 176,159.38

per year. See the year-by-year rent schedule below. Rent increases 15% every five years (lease years 6, 11, 16, 21, and every five years thereafter).

Landlord Responsibility: None, the lease is written on an absolute triple net basis (tenant

pays all expenses.) Sales Price: $2,490,000 Return on Equity: On an un-leveraged basis the return is 7% based on average 5 year

forward triple net income (7.00% overall capitalization rate). The return over the remaining initial term of the lease is 8.1%

Terms: All cash

Years Average Rent Investment Return

2010 – 2015 (5 years) 186,728.94 7.50% 2010 – 2019 (10 years) 200,733.62 8.1% 2010 – 2023 (14 years) 215,231.19 8.6%

Building Specifications FOUNDATION: Reinforced concrete footings FLOOR SLAB: Poured concrete FRAME: Masonry bearing walls with steel supporting columns. EXTERIOR WALLS: Brick veneer. ROOF: Pitched steel web bar joist covered with insulated EPDM roof over

a metal deck. HVAC: Electric package units. Office is air conditioned. Garage is not air

conditioned. FLOOR FINISH: Carpet and/or vinyl in office area, sealed concrete in automotive

bays. EXTERIOR DOORS: 1/4” plate glass in aluminum frame. INTERIOR WALLS: Gypsum wall board on metal studs in the office/customer waiting

area. CEILING FINISH: Open in automotive repair areas; suspended acoustical tile ceiling

with recessed fluorescent light fixtures in the office/customer waiting area.

Tenant Bridgestone Corporation’s acquisition of Firestone Tire in 1988 catapulted Bridgestone into the top three in the global tire industry. Bridgestone Corporation leases Firestone locations nationwide through its wholly-owned US Consolidated Subsidiary, BFS Retail & Commercial Operations, LLC. This lease is written on an absolute triple net basis for a term of twenty years. BFS operates over 2,000 automotive service centers in the USA and Canada. The US subsidiary is not rated. Parent is rated investment grade by Moody’s and Standard and Poor’s. Please see http://www.bridgestone.com/corporate/index.html for current information on the tenant’s parent company. A current annual report on Bridgestone Corporation is available at http://www.bridgestone.co.jp/english/ir/financialdata/.

Rent Schedule:

Year Lease Years Ownership Years Rent

Lease Year Begins

September 1

Investment begins Sept 1, 2010

Paid monthly On an absolute Triple- net basis

2003 1 153,182.07 2004 2 153,182.07 2005 3 153,182.07 2006 4 153,182.07 2007 5 153,182.07 2008 6 176,159.38 2009 7 176,159.38 2010 8 1 176,159.38 2011 9 2 176,159.38 2012 10 3 176,159.38 2013 11 4 202,583.29 2014 12 5 202,583.29 2015 13 6 202,583.29 2016 14 7 202,583.29 2017 15 8 202,583.29 2018 16 9 232,970.78 2019 17 10 232,970.78 2020 18 11 232,970.78 2021 19 12 232,970.78 2022 20 13 232,970.78 2023 21 14 267,916.40 2024 22 15 267,916.40 2025 23 16 267,916.40 2026 24 17 267,916.40 2027 25 18 267,916.40 2028 26 19 308,103.86