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Offering Memorandum Strong Corporate Guaranty | Absolute Net Lease | Serves > 25,000+ University Population Academy Sports + Outdoors 2409 N Perkins Road | Stillwater, Oklahoma 74075

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Page 1: Offering Memorandum Academy Sports + Outdoors€¦ · – Academy Sports + Outdoors is a nationally recognized, best-in-class sporting goods retailer with $4.65 billion in annual

Offering Memorandum

Strong Corporate Guaranty | Absolute Net Lease | Serves > 25,000+ University Population

Academy Sports + Outdoors2409 N Perkins Road | Stillwater, Oklahoma 74075

Page 2: Offering Memorandum Academy Sports + Outdoors€¦ · – Academy Sports + Outdoors is a nationally recognized, best-in-class sporting goods retailer with $4.65 billion in annual

Confidentiality and Restricted Use AgreementThis Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for

your consideration of the opportunity to acquire the commercial property described herein (the “Property”).

This COM may be used only as stated herein and shall not be used for any other purpose, or in any other

manner, without prior written authorization and consent of SJC.

This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This

COM contains descriptive materials, financial information and other data compiled by SJC for the convenience

of parties who may be interested in the Property. Such information is not all inclusive and is not represented

to include all information that may be material to an evaluation of the acquisition opportunity presented.

SJC has not independently verified any of the information contained herein and makes no representations

or warranties of any kind concerning the accuracy or completeness thereof. All summaries and discussions

of documentation and/or financial information contained herein are qualified in their entirety by reference to

the actual documents and/or financial statements, which upon request may be made available. An interested

party must conduct its own independent investigation and verification of any information the party deems

material to consideration of the opportunity, or otherwise appropriate, without reliance upon SJC.

The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the

right to negotiate with any number of interested parties at any time. The Property is offered and sold by its

owner(s) as is, where is, and with all faults, without representation or warranty of any kind except for any

customary warranties of title.

BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information

you have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any

other form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and

claim as your own without attribution to SJC, all or any part of this COM or the Information; (3) upon request

by SJC at any time, you will return and/or certify your complete destruction of all copies of this COM and the

Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals,

you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees,

representatives, agents and principals, from and with respect to any and all claims and liabilities arising from

or related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you

will not provide this COM or any of the Information to any other party unless you first obtain such party’s

acceptance and approval of all terms, conditions, limitations and agreements set forth herein, as being

applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy

for a violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to,

injunctive relief and specific performance, in connection with such a violation and shall not be required to post

a bond when obtaining such relief.

Ryan ButlerSenior [email protected] OK Broker #145949

Brad [email protected]

Anne PerraultAssociate [email protected]

Kaleb [email protected]

Adrian [email protected]

Stan Johnson Company6120 South Yale Avenue | Suite 300Tulsa, Oklahoma 74136 P: 918.494.2690

stanjohnsonco.com

Offered Exclusively by

Page 3: Offering Memorandum Academy Sports + Outdoors€¦ · – Academy Sports + Outdoors is a nationally recognized, best-in-class sporting goods retailer with $4.65 billion in annual

Academy Sports + Outdoors • Stillwater, Oklahoma 3

The OfferingStan Johnson Company is pleased to offer for sale to qualified investors

the opportunity to acquire an Academy Sports + Outdoors in Stillwater,

Oklahoma.

Academy Sports + Outdoors is operating under a 15-year base lease term,

with four (4), five (5) year renewal options. There are scheduled rental

increases every five (5) years during the primary term and all renewal

options. Landlord has zero responsibility with the absolute net lease

structure.

Academy Sports + Outdoors is one of the leading full-line sporting goods

retailers in the United States with annual sales of $4.65 billion. Academy’s

unique assortment and value proposition allow it to compete against

full-line sporting goods retailers as well as mass merchants. The company

currently operates over 225 retail locations in 16 states in the South,

Southeast and Mid-South.

The Property is located at the signalized intersection of Perkins Road

(19,579 VPD) and Lakeview Road. Located approximately 2 miles from

Oklahoma State University, the University is home to more than 25,000

students and over 6,000 employees. Other national tenants surrounding

the property include Walmart Neighborhood Market, Best Buy, Olive

Garden, Lowe’s, and many more.

Investment HighlightsIndustry Leading Tenant – Academy Sports + Outdoors is a nationally

recognized, best-in-class sporting goods retailer with $4.65 billion in annual

sales and sales per square foot in excess of $300, far surpassing that of its

closest competitor in the sporting goods sector.

New Construction, 15-Year Lease – Brand new 15-year lease that

commenced in May 2015.

Absolute Net Lease Structure – Zero landlord responsibility throughout the

base lease or option periods.

Attractive Rental Increases – $0.50 rent per square foot increases every

five years, during primary term and renewal options.

Dense Retail Corridor – Surrounding retailers include Walmart

Neighborhood Market, Best Buy, Atwoods, Petco, Belk, Lowe's and many

more.

Core University Location Serves 25,000+ Students – The Property is

approximately two miles from Oklahoma State University, which has over

25,000 students and 6,000 employees.

Excellent Retail Trade Area – Property benefits from numerous positive

attributes, including new construction, good positioning/visibility on Perkins

Street, quality of the Lakeview Pointe development and proximity of other

national retailers.

Market Rents – Starting rent per SF of $8.95 is slightly below or in-line with

average market rents. Average rent per SF in the area is in the $8-$13 range

on a NNN basis.

Purchase Price: $9,022,602 Cap Rate: 6.25%

TBU

Page 4: Offering Memorandum Academy Sports + Outdoors€¦ · – Academy Sports + Outdoors is a nationally recognized, best-in-class sporting goods retailer with $4.65 billion in annual

Academy Sports + Outdoors • Stillwater, Oklahoma 4

6th Ave

Lease AbstractAddress: 2409 N Perkins Rd

Stillwater, Oklahoma

Tenant: Academy, Ltd.

Ownership Type: Fee Simple

Year Built: 2015

Square Footage: +/- 63,007 SF

Land Area: +/- 4.434 acres

Annual Rent: $563,912.65

Rent Commencement Date:

May 15, 2015

Base Lease Term: Fifteen (15) Years

Rental Increases: $0.50/SF every five years

Renewal Options: Four (4), Five (5) Year Options

Expenses: NNN

Rent ScheduleLease Years Annual Rent

Years 1 - 5 $563,912.65

Years 6 - 10 $595,416.15

Years 11 - 15 $626,919.65

Option 1 $658,423.15

Option 2 $689,926.65

Option 3 $721,430.15

Option 4 $752,933.65

Hall of Fame Ave

McElroy Rd

Per

kins

Rd

Lakeview Rd

DowntownStillwater

(+/- 2.6 miles)

University of Oklahoma25,800+ students

+/- 6,069 employees+/- 2.2 miles

Boomer Lake

Stillwater Regional Airport

Stillwater Medical Center117-bed; 1,200 employees

+/- 3.4 miles

Page 5: Offering Memorandum Academy Sports + Outdoors€¦ · – Academy Sports + Outdoors is a nationally recognized, best-in-class sporting goods retailer with $4.65 billion in annual

Site Plan

N

Lakeview Rd

Per

kins

Rd

Har

tfo

rd S

t

Common Area ParcelsWalmart Parcels

Outparcel 1

Outparcel 3

Outparcel 2

Fuel Pad

Proposed Wendy's

Proposed Aspen Dental

Page 6: Offering Memorandum Academy Sports + Outdoors€¦ · – Academy Sports + Outdoors is a nationally recognized, best-in-class sporting goods retailer with $4.65 billion in annual

Academy Sports + Outdoors • Stillwater, Oklahoma 6

Tenant Overview

Academy, Ltd. (together with its wholly owned subsidiaries, the “Company” or “Academy”) is one of the leading full-line sporting goods retailers in the United States in terms of net sales. Academy is a premier sports, outdoor and lifestyle retailer with a unique assortment of quality hunting, fishing and camping equipment and gear along with sports and leisure products, footwear, apparel, patio sets, barbecue grills and much more.

The Company seeks to meet the recreational, athletic and lifestyle needs of the entire family. Academy has a value-based, unique, diverse assortment of recognized brand names and private label merchandise tailored to the taste of the local markets they serve. Academy also adheres to an Every Day Low Price strategy, which drives significant customer traffic to the retail stores and has insulated them during turbulent economic times. Another cornerstone of the Academy philosophy is active community support and grassroots involvement throughout its footprint. The company has a history of giving back to local communities through partnerships with sports teams, youth organizations, and outdoor conservation programs. As a result, they have successfully built strong customer loyalty and brand awareness.

Academy currently operates over 225 “Academy Sports + Outdoors” retail locations throughout Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee and Texas. The Company also operates two distribution centers, one in Katy, Texas and one in Twiggs County, Georgia, that receive, store and ship merchandise to the stores. In April 2011, the Company launched an e-commerce business to sell merchandise to customers across the United States via the www.academy.com website.

On August 3, 2011, Allstar LLC, an investment entity controlled by affiliates of Kohlberg Kravis Roberts & Co. L.P. (“KKR”) acquired a majority interest in New Academy Holding Company LLC, the parent of the Company. Founded in 1976, KKR is a leading global investment firm with $126 billion in assets under management as of March 31, 2016. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active

oversight and monitoring of its investments.

KKR invests in high quality franchises across multiple industries, including current and previous retail and consumer investments such as Sealy, Dollar General, Toys “R” Us, Pets at Home, Maxeda, Duracell, Gillette, RJR Nabisco, and Safeway. KKR is publicly traded on the New York Stock Exchange (NYSE: KKR). For additional information and a complete list of KKR’s private equity investments, please visit KKR’s website at www.KKR.com.

Financial Highlights

Academy’s unique assortment and value proposition allow it to compete against full-line sporting goods retailers as well as mass merchants. The Company’s stores generate industry-leading sales per square foot of approximately $300 compared to its closest competitor at $207(1). On a per store basis, Academy’s average store generates $22.0 million in sales. The Company opened 20 new stores in 2015 and has 19 additional stores set to open during 2016.

As of April 30, 2016, Academy had total assets of $3.31 billion, a net worth of $706 million and annual revenues of $4.65 billion (FY 2015). As a result of its highly productive store base, Academy generates sufficient cash flows to not only grow its store base but to pay down debt. (1) Comparable store sales information based upon analyst guidance for FY2014

Page 7: Offering Memorandum Academy Sports + Outdoors€¦ · – Academy Sports + Outdoors is a nationally recognized, best-in-class sporting goods retailer with $4.65 billion in annual

Location OverviewStillwater is a city in north-central Oklahoma at the intersection of U.S.

177 and State Highway 51. It is the county seat of Payne County. As

of the 2010 census, the city population was 45,688. Stillwater is the

principal city of the Stillwater Micropolitan Statistical Area which had a

population of 77,350 according to the 2010 census. Stillwater is home to

Oklahoma State University, Northern Oklahoma College/OSU Gateway,

Meridian Technology Center and the Oklahoma Department of Career and

Technology Education.

Stillwater is home to a diverse mix of business and industry, from

manufacturing to advanced technology. Among its export industries are

printing and publishing, floor covering, wire products, software, food and

kindred products, and research. Stillwater has several economic clusters.

These clusters are: aerospace, agribusiness, bioindustry, optoelectronics

(sensors, lasers, etc.), printing and publishing, software and standard

manufacturing.

Oklahoma State University plays a significant part of Stillwater’s overall

economy with more than 25,800 students, 6,069 personnel and a focus

on research and technology.

Stillwater is often called one of America's "most livable" cities, and for

good reasons. Quality neighborhoods, excellent schools and low crime

rates are hallmarks of the community, as well as recreational and cultural

opportunities that you will only find in a university city. In 2011 Forbes

Magazine named Stillwater the 6th fastest growing small cities in the

United States.

With its cost of living being 10% below the national average, Stillwater is

consistently ranked among the nation's top small cities for quality of life. In

2010 Money Magazine named Stillwater as on to the 100 best places to live

because of its quality of life.

Stillwater Medical Center, centrally located for easy access from

surrounding communities, is also an integral part of the community with

more than a dozen medical facilities under its umbrella that enhance the

medical center’s service offering to the entire region.

Downtown Stillwater

Page 8: Offering Memorandum Academy Sports + Outdoors€¦ · – Academy Sports + Outdoors is a nationally recognized, best-in-class sporting goods retailer with $4.65 billion in annual

Founded on Christmas Day in 1890, Oklahoma State University (OSU) is one of the oldest universities in the state and attracts over $495 million annually in research and other programs. Though there are several campuses throughout the state, Stillwater is home to OSU and its 26,000 students. Hosting thousands of students from around the globe, OSU is the heartbeat of the Stillwater community and is the top employer in town with over 6,000 employees. As one of the finest higher learning institutions in the state, Oklahoma State University has ten different colleges educating students in business engineering, architecture, agriculture and many other subjects.

Page 9: Offering Memorandum Academy Sports + Outdoors€¦ · – Academy Sports + Outdoors is a nationally recognized, best-in-class sporting goods retailer with $4.65 billion in annual

McElroy Rd

Lakeview Rd

Per

kins

Rd

(19

,579

VP

D)

Stillwater Junior High

School

Stillwater High School

Will Rogers Elementary

25,800+ students+/- 6,069 employees

Boomer Rd/M

ain St

Bradford Plaza Pioneer

Square

Lakeview Pointe

Page 10: Offering Memorandum Academy Sports + Outdoors€¦ · – Academy Sports + Outdoors is a nationally recognized, best-in-class sporting goods retailer with $4.65 billion in annual

Academy Sports + Outdoors • Stillwater, Oklahoma 10

5 miles

3 miles

1 m ile

Demographics2409 N Perkins Rd | Stillwater, OK 74075 0-1 mi. 0-3 mi. 0-5 mi.

Population

2010 Population 7,506 37,243 46,858

2016 Population 8,448 39,358 49,832

2021 Population 9,008 40,969 52,184

2010-2016 Annual Rate 1.91% 0.89% 0.99%

2016-2021 Annual Rate 1.29% 0.81% 0.93%

Households

2010 Households 3,560 14,487 18,397

2016 Total Households 3,996 15,629 19,944

2021 Total Households 4,282 16,473 21,119

2010-2016 Annual Rate 1.87% 1.22% 1.30%

2016-2021 Annual Rate 1.39% 1.06% 1.15%

2016 Race and Ethnicity

White Alone 75.30% 75.50% 76.90%

Black Alone 7.50% 5.60% 5.00%

American Indian/Alaska Native Alone 4.80% 4.60% 4.40%

Asian Alone 3.60% 6.80% 6.30%

Pacific Islander Alone 0.10% 0.10% 0.10%

Other Race 1.80% 1.50% 1.50%

Two or More Races 6.90% 5.90% 5.80%

Hispanic Origin (Any Race) 6.50% 5.50% 5.40%

2016 Average Household Income $48,064 $44,966 $53,436

Page 11: Offering Memorandum Academy Sports + Outdoors€¦ · – Academy Sports + Outdoors is a nationally recognized, best-in-class sporting goods retailer with $4.65 billion in annual

Academy Sports + Outdoors • Stillwater, Oklahoma 11

going beyond

The information contained herein was obtained from sources believed reliable, however, Stan Johnson Company makes no guaranties, warranties or representations as to the completeness thereof. The presentation of this property for sale, rent or exchange is submitted subject to errors, omissions, change of price or conditions, or withdrawal without notices.

Stan Johnson Company6120 South Yale Avenue | Suite 300Tulsa, Oklahoma 74136 P: 918.494.2690

stanjohnsonco.com

Ryan ButlerSenior [email protected] OK Broker #145949

Brad [email protected]

Anne PerraultAssociate [email protected]

Kaleb [email protected]

Adrian [email protected]