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URBAN INVESTMENT ADVISORS

EXCLUSIVE LISTING | Offering Memorandum 5185 MacArthur Blvd NW | Washington, DC

Actual Site

ANDREW FALLONEXECUTIVE MANAGING DIRECTOR(703) 787-4733 [email protected]

RICK FERNANDEZSENIOR MANAGING DIRECTOR(703) 787-4732 [email protected]

CALKAIN.COM

http://calkain.com

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5185 MacArthur Blvd NW | Washington, DC Offering Memorandum

Investment Overview

T H E O F F E R I N G

MacArthur Retail & Professional CenterOffered for sale is the MacArthur Retail & Professional Center located at 5185 MacArthur Boulevard, in the prestigious Palisades neighborhood of NW Washington, DC. The 43,543 SF commercial building is 90% leased to retailers and corporate office tenants, and includes substantial surface and structured parking, totaling 71 parking spaces. The property is a 3-story building with ground floor retail, two floors of office above, and one floor below ground. The NNN retail is 100% leased, anchored by long-term tenants including Starbucks and the UPS Store.

The MacArthur Retail & Professional center is a unique opportunity for the successful buyer to acquire prominent Washington, DC real estate in a high barrier to entry and supply constrained sub-market. The mixed-use nature of the

Center provides cash flow stability and the potential for income appreciation.

T H E LO C AT I O N

Palisades - MacArthur Blvd, NWA truly urban infill location, the MacArthur Retail & Professional Center is located along the heart of the MacArthur Boulevard corridor and commercial district of the affluent Palisades neighborhood. Palisades is known as an affluent neighborhood enclave, just north of Georgetown, and MacArthur Boulevard is a critical commuting corridor from the Key Bridge and Chain Bridge Road to points across Washington, DC. The location is unique in that it offers fast and convenient access to/from downtown DC, Bethesda and Northern Virginia, but it also is a “Main Street” amenity rich, walkable destination for a neighborhood that has an average household income of $266,000 within 1 mile.

Location Highlights • Outstanding Vehicular Access - 21,500+ VPD, direct access from

Northern VA via Chain Bridge and Key Bridge, MacArthur Blvd is a critical commuter artery

• Affluent Demographic Profile - Average HH income $266,000+ within 1 mile, dense population within 3 miles (204,000+)

• High Barriers to Entry - limited future development and scarcity of comparable property type in trade area

Investment Highlights • Generational Investment in Washington, DC - Long-term tenancy, high

barriers to entry, supply constrained sub-market, substantial income appreciation

• Mixed-Use Urban Infill Property - 43,543 SF building with ground floor retail and structured parking

• 100% Leased NNN Retail - Starbucks has anchored this retail for more than 20 years

• Outstanding Location - Affluent NW DC neighborhood & MacArthur commercial corridor, unique access & critical commuting route, strong & dense demographics

G E O R G E T O W N

VIRGINIA

DISTRICT OF COLUMBIA

Subject Site

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5185 MacArthur Blvd NW | Washington, DC

MacArthur Blvd 21,600 VPD

Highlights

• Generational mixed-use real estate anchored to highly affluent community

• High barriers to entry within this neighborhood

• Stabilized tenancy and strong annual income growth

• Convenient walkable access and abundant structured parking

• Minutes from Georgetown, downtown DC and the Capital Beltway (I-495)

• Highly adaptable retail and office floor plans

• Major tenants: Starbucks, UPS, The Webster Group

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Financial Summary

5185 MacArthur Blvd NW | Washington, DC *

Asking Price $16,889,471 | Cap Rate 7.00%

NOI (On in-Place Income) $1,182,263

NOI/Month $98,522

Average Rent $/SF $32.98

Rentable Square Feet 43,543+/- SF

Land Area 0.52+/- Acres

Investment Highlights

• Generational mixed-use real estate anchored to highly affluent community

• High barriers to entry within this neighborhood

• Stabilized tenancy and strong annual income growth

• Convenient walkable access and abundant structured parking

• Minutes from Georgetown, downtown DC and the Capital Beltway (I-495)

• Highly adaptable retail and office floor plans

• Major tenants: Starbucks, UPS, The Webster Group

*Debt Assumption Requirement

Assumable Financing matures in July 2024 (interest-only payments through July 2019). The financing is extremely accretive relative to currently achievable financing terms for the asset and offers multiple years of interest-only payments. The loan terms are:

• The note is dated June 12, 2014

• The loan is non recourse

• The first payment was August of 2014

• The original loan amount was $11,625,000

• Interest rate 4.66%

• There are 7 years remaining on the term of which 2 years are interest only

• There is a 1% assumption fee

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Financial SummaryRent Roll

Rent Roll

Suite Tenant SF Pro RataShare

Lease Start Date

Lease End Date Increase NOI Monthly

RentRent $/SF

108 Candace Sheppard Dance Academy 1,526 3.50% Sep-16 Aug-19 2% Annually $38,913 $3,243 $25.50

109 Ideal Body Wellness 1,272 2.92% Jan-13 Oct-18 3% Annualy $40,793 $3,399 $32.07

104C John I Haas 321 0.74% Feb-11 Jul-21 None $8,752 $729 $27.26

300 John I Haas 5,445 12.50% Aug-10 Jul-21 3% Annualy $217,256 $18,105 $39.90

2 Mac Market & Deli 1,770 4.06% Feb-05 Jan-25 14% Feb 2020 $70,800 $5,900 $40.00

101 Metzger Gilbert 1,765 4.05% Dec-16 Nov-21 3% Annualy $50,585 $4,215 $28.66

350 Mosaic Legal Group 1,241 2.85% Sep-15 Aug-19 3% Annualy $50,682 $4,224 $40.84

210 Pailsades Chriropractic 1,230 2.82% Jun-17 May-23 3% Annualy $47,355 $3,946 $38.50

5 Palisades Nai l& Spa 1,883 4.32% Jan-14 Dec-24 3% Annualy $74,190 $6,183 $39.40

200 Palisades Suites 6,193 14.22% Oct-16 Sep-18 N/A $267,909 $22,326 $43.26

1 Payless Cleaners 1,096 2.52% Dec-09 Nov-19 3% Annualy $55,534 $4,628 $50.67

7 Pharmacy 1,800 4.13% Aug-09 Nov-19 3% Annualy $72,972 $6,081 $40.54

6 Potomac Pilates 1,654 3.80% Sep-12 Feb-20 3% Annualy $68,873 $5,739 $41.64

220 Setty & Associates 1,234 2.83% May-13 Jun-19 3% Annualy $68,203 $5,684 $55.27

S1 Starbucks (Storage) 630 1.45% Apr-99 Dec-22 10% Jan 2018 $6,930 $578 $11.00

4 Starbucks (Store) 1,130 2.60% Jun-97 Dec-22 10% Jan 2018 $57,890 $4,824 $51.23

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Financial SummaryRent Roll (Continued)

Rent Roll

Suite Tenant SF Pro RataShare

Lease Start Date

Lease End Date Increase NOI Monthly

RentRent $/SF

102 The Current Newspapers 2,253 5.17% Apr-15 Oct-19 3% Annualy $72,186 $6,016 $32.04

3 The UPS Store 1,062 2.44% Feb-04 Jan-20 14% Jan 2020 $48,459 $4,038 $45.63

104A The UPS Store (Storage) 321 0.74% Feb-11 Dec-24 15% Jan 2020 $6,000 $500 $18.69

250 The Webster Group 2,972 6.83% Nov-16 Oct-19 3% Annualy $125,953 $10,496 $42.38

370 Tlalim Tours 2,536 5.82% Feb-17 Jan-20 3% Annualy $93,832 $7,819 $37.00

103 Available 1,121 2.57% 3% Annualy $34,639 $2,887 $30.90

100 Available 735 1.69% 3% Annualy $22,712 $1,893 $30.90

104B Available 321 0.74% 3% Annualy $3,968 $331 $12.36

115 Available 1,049 2.41% 3% Annualy $32,414 $2,701 $30.90

260 Available 892 2.05% 3% Annualy $38,129 $3,177 $42.75

S3 Available 53 0.12% 3% Annualy $655 $55 $12.36

S2 Building Storage 38 0.09% 3% Annualy $631 $53 $16.61

Total Available 4,209 9.65%

Total Leased 29,013 66.52% In-Place Income $1,544,067

Retail 10,395 23.83% Parking Revenue $33,810

TOTAL 43,617 100% Reimbursements $260,582

Expenses $(656,196)

NOI $1,182,263

Available - Proforma Income $133,148

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Financial SummaryProperty Description

Address 5185 MacArthur Blvd, NW, Washington, DC 20016

Land Area 0.52+/- acres

Size 43,543+/- SF

Year Built 1968

Normal Business HoursMonday – Friday: 8:00 a.m. – 6:00 p.m.

Saturday: 9:00 a.m. – 1:00 p.m. Tenant access 24/7

Stories1st floor retail and lobby, two floors of

above grade office space, one floor of below grade office space

Electric 1600 Amp main switchboard; tighten down in 2014

HVACSplit Systems (lower level- 30 ton,

2nd/3rd floors – 40 tons each, lobby – 3 ton)

Water/Sewer DC Water and Sewer Authority

Electricity Pepco

Building Construction Reinforced concrete

Exterior Precast concrete and glass

Interior Main Lobby

Situated centrally between the retail stores. One story in height with natural stone flooring and

walls constructed of textured drywall and wood paneling

Ceiling Height 8’0” to 10’0” on office floors

Loading Dock

Loading dock accessed by service hallway behind retail tenants and exterior double doors. Area in

front of loading dock also includes trash and recycle containers

RoofConcrete deck with built up membrane system,

parapet walls, and asphalt parking on top

Parking

71 spaces; 21 on the surface lot for retail customers and 50 on the roof deck. 1.65/1000.

Rooftop parking spaces rented to tenants at $105/month

LavatoriesRestroom finishes consist of ceramic tile floors

with painted drywall, wall-mounted vitreous china toilets, and stainless steel toilet partitions

Fire and Life Safety

The building is monitored by Datawatch Systems with a Notifier AFP-200 fire alarm

panel and has an automatic wet-pipe fire sprinkler system and a standpipe system served by the fire

sprinkler system

Emergency PowerBattery packs and 2X4 light fixtures with

emergency ballasts

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Tenant Overviews

John I. Haas, IncMacArthur Professional Center is the headquarters for

John I Hass, North America’s leading hops supplier. As

a member of the Barth-Haas group– the world’s largest

supplier of hops, hop products and services – Haas and

the Barth-Haas group has the global reach to offer the

products, tools, services and supply assurance to brew successful beers.

The Webster GroupThe Webster Group is one of the top event planning

companies. Woman owned, global event planning,

production and fundrasing agency providing award-

winning, innovative and cost-effective solutions to

corporate, non-profit and government clients. Their

portfolio includes over 600 events attended by US presidents and first ladies,

foreign heads of state and ambassadors, government and political figures,

military leaders and CEOs of Fortune 500 companies.

Starbucks CoffeeStarbucks Corporation is an American coffee company

and coffeehouse chain. The chain was founded in Seattle,

Washington in 1971; it operates 23,450 locations in 68

countries. Starbucks locations serve hot and cold drinks,

whole-bean coffee, microground instant coffee known as VIA,

espresso, caffe latte, full- and loose-leaf teas including Teavana tea products,

Evolution Fresh juices, Frappuccino beverages, pastries, and snacks; some

offerings (including their Pumpkin Spice Latte) are seasonal or specific to the

locality of the store.

UPSUnited Parcel Service (UPS) is the world’s largest package delivery

company and a provider of supply chain management solutions.

UPS delivers more than 15 million packages per day to more than

7.9 million customers in more than 220 countries and territories

around the world.

Tlalim GroupFor over a quarter of a century, the Tlalim Yiftach

Company has been a pioneer in the organized tourism

market. It eventually became the holdings company for a group of six companies

and is now called The Tlalim Group.

All of their companies are involved in internal and incoming tourism to Israel

– operations, education, culture, information and entertainment. One of the

companies is also spearheading the next generation of visitor centers and

organizing events and exhibitions in Israel and abroad.

Each group has its own operating structure and independence, while enjoying

the synergy inspired by the other groups and the advantages of centralized

financial management.

The Current NewspapersThe Current Newspapers edit and publish four

different community/ neighborhood newspapers

serving the Washington, DC market: The

Georgetown Current, The Dupont Current, The Northwest Current – Ward 3,

and The Northwest Current – Ward 4. The company strives to provide

exceptionally well-educated communities in Washington with a serious

newspaper containing news that affects these communities. The issues are

published weekly and serve over 50,000 loyal readers.

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Site Plan

Floor Plan - 1st Floor

Floor Plan - 2nd Floor

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Site Plan

Floor Plan - 3rd Floor

Floor Plan - Lower Level

Palisades Spray Park

The Field School

Æ BlackSalt Fish Market & Restaurant

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Highlights

• Proximate to affluent, decision-maker housing

• Outstanding vehicular access

• Rich, walkable amenity base

• Maximum leasing flexibility

• 204,251 people within 3 miles of property

• Average HH income of $266,277 within 1 mile


Location Overview

Whitehaven Pkwy NW

Subject Site

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Site Plan


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Site PhotosSite Photos

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Site Photos

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Demographics

Radius 1 Mile 3 Miles 5 MilesPopulation2016 Population 12,480 204,251 624,276

2021 Population 13,171 218,163 672,070

2010-2016 Annual Rate 0.73% 1.08% 1.27%

2016-2021 Annual Rate 1.08% 1.33% 1.49%

2016 Male Population 45.7% 47.0% 48.8%

2016 Female Population 54.3% 53.0% 51.2%

2016 Median Age 32.3 35.3 35.2

Households2016 Total Households 3,402 93,462 280,902

2021 Total Households 3,608 99,698 302,415

2010-2016 Annual Rate 0.58% 0.89% 1.13%

2016-2021 Annual Rate 1.18% 1.30% 1.49%

2016 Average Household Size 2.79 2.06 2.12

Median Household Income2016 Median Household Income $200,001 $120,573 $103,474

2021 Median Household Income $200,001 $130,928 $111,928

2016-2021 Annual Rate 0.00% 1.66% 1.58%

Average Household Income2016 Average Household Income $266,277 $173,061 $148,259

2021 Average Household Income $282,443 $186,124 $159,289

2016-2021 Annual Rate 1.19% 1.47% 1.45%

Per Capita Income2016 Per Capita Income $82,020 $79,674 $67,353

2021 Per Capita Income $87,290 $85,480 $72,265

2016-2021 Annual Rate 1.25% 1.42% 1.42%

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Market Overview

Palisades NeighborhoodThe DC neighborhood of Palisades, is a quiet community northwest of

Georgetown University. It is an area that many residents have called home for

decades, a place that hosts a July 4th parade that would not be out of place in

Mayberry with a main drag that now touts some high quality restaurants to

accompany other retail staples. For these reasons, it is not surprising that its

prideful residents refer to it as “a small town in a big city.” Palisades’ southeast

border really runs from the intersection of Foxhall Road and MacArthur

Boulevard to the Potomac River and the neighborhood then moves north and

west in a skinny line bordered by MacArthur and the Potomac River all the way

to the District line near Sibley Hospital. Initially connected to Georgetown by

the Great Falls Electric Railway that ran from 36th and Prospect Streets out to

Glen Echo, Palisades is a community that is slightly older than others nearby.

Most of the homes, though, were built in the early 20th century and represent a

wide range of styles. In addition to a number of charming bungalows, the area is

filled with Cape Cods, Colonials, and even a few surprisingly modern creations.

Families have decided to settle in Palisades for a variety of reasons over the

years including the library, the rec center and the green space around the C&O

canal.

The MacArthur Commercial CorridorThe small commercial strip along MacArthur Boulevard is home to services

like dry cleaners, convenience stores, a CVS Pharmacy housed in a former

iconic movie theater, and a Safeway. There is Black Salt, half seafood market/

half high-end restaurant with a strong following outside the neighborhood;

Makoto, a traditional Japanese restaurant that serves an excellent tasting menu

with an accompanying lofty price tag; and Et Voila and Sur La Place, two Belgian

restaurants not far from each other, which have both received good reviews

from diners.

There are also some neighborhood mainstays, like Listrani’s, which offers homey

albeit average Italian fare, and the Palisades Pizzeria and Clam Bar.

17



$11.5 Billion in Closed Transactions

$350 Million

in Active Listings

Who Are We? We are a national commercial real estate firm that provides consulting and brokerage services to both private and institutional clientele with an expertise on triple net lease investments. We pride ourselves on being a world class leader by providing our clients a full array of commercial real estate investment brokerage and asset management solutions, including advisory, research, estate planning and wealth management.

We have built solid relationships throughout our decades of experience and innovation, implementing long-term allocation within the context of each client’s particular risk tolerance and identifying how best to acquire and dispose of income producing properties for each entities’ specific set of investment criterion. At Calkain, our foresight and past performance are leading the net lease investment industry.

Our HistoryLike most success stories, Calkain was formulated from humble beginnings. Jonathan W. Hipp, President and CEO, took the initiative to build upon his decades of experience and performance and left a large international brokerage firm to become an independent and innovative leader within the triple net lease investment community. Armed with a sole employee and a single office, the firm has grown exponentially since its infancy in 2005.

With the growth in staff, seasoned professionals have been attracted to Calkain’s model of innovation, entrepreneurship and the fostering of long-lasting and meaningful relationships. Industry experts have joined Calkain in the hopes of implementing the skills they have honed in complementary aspects of real estate investment.

Through a tremendous endeavor, tireless hours have been committed to continually prove that Calkain is America’s Net Lease Company®. Its countless accolades received from the world’s leading business publications, including Forbes™, Fortune™ and the New York Times™ have confirmed that Calkain is a true leader in triple net lease investing services.

Client Testimonial“USRA has worked with Calkain on numerous occasions. They have always been meticulous in their work ethic, providing superior service and extremely prompt attention to our needs. I highly recommend them.

–Jack Genende, Partner | U.S. Realty Advisors, LLC. (USRA)

About Us

C A L K A I N .C O MC A L K A I N .C O MANDREW FALLONEXECUTIVE MANAGING DIRECTOR(703) 787-4733 [email protected]

RICK FERNANDEZSENIOR MANAGING DIRECTOR(703) 787-4732 [email protected]

DISCLAIMER: The information contained in this document is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Calkain and its subsidiaries, and should not be made available to any other person or entity without the written consent of Calkain. This document has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property(s). The information contained herein is not a substitute for a thorough due diligence investigation. Calkain and its subsidiaries have not made any investigation, and make no warranty or representation, with respect to the income or expenses for the subject property(s), the future projected financial performance of the property, the size and square footage of the property(s) 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(s). The information contained in this document has been obtained from sources we believe to be reliable; however neither Calkain and its subsidiaries nor the Seller have verified, and will not verify, any of the information contained herein, nor has Calkain and its subsidiaries or the Seller conducted any investigation regarding these matters and make 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.

Corporate Headquarters Washington, DC12930 Worldgate Drive | Suite 150 Herndon, VA 20170 T: (703) 787-4714 • F: (703) 787-4783

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