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6900 GRAND MISSION BLVD, RICHMOND, TX 77407CVS

Offering Memorandum

OFFERING MEMORANDUM

2 | CVS

CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of CVS located at 6900 Grand Mission Blvd, Richmond, TX 77407 (“Property”) . I t has been prepared by Matthews Retai l Advisors . This Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property. I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Retai l Advisors . The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the Property, you agree:

1 . The Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion or manner detr imental to the interest of the Sel ler.

Owner and Matthews Retai l Advisors expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Offer ing Memorandum.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Retai l Advisors or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Offer ing Memorandum.

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TABLE OF CONTENTS

04. Investment Overv iew

05. Investment Hig l ights

06. Execut ive Summary

09. Property Overv iew

14. Tenant Overv iew

15. Area Overv iew

CVS6900 GRAND MISSION BLVD, RICHMOND, TX 77407

Mark CohenBroker of Record License No. 447509

Bill PedersenNational Drug Store Specialist

License No. 01975700O 310.919.5799M 831.246.0646bill.pedersen@matthews.com

4 | CVS

Investment Overview

Bill Pedersen of Matthews Retail Advisors are pleased to exclusively offer for sale to qualified investors a prime NNN CVS in the Houston MSA.

The subject property is a prototype CVS store format with a beautiful brick facade located in Richmond, TX. Richmond, located in Fort Bend County, is a highly affluent suburb located just 30 miles southwest of downtown Houston. Richmond has had positive population growth over the last ten years. Additionally, Texas is one of the few income tax free states in the country.

The store was built in 2008, at which time CVS signed a twenty-five (25) year lease. There are just under eighteen (18) years remaining. The lease is absolute NNN with zero landlord responsibilities and is fully guaranteed by CVS Caremark Corporation. While store sales are not reported, this is an ideal location for CVS - strategically positioned on a signalized corner with traffic counts above 21,000 CPD.

This is an ideal 1031 exchange property - a long term, absolute NNN lease, in an income tax free state, with one of the strongest retail tenants in the country. CVS has investment grade credit (S&P rated BBB+ | Moody’s rated Baa1) and is the largest retailer of prescription drugs in the country. The subject property is conveniently located to serve the affluent Richmond community.

Location:

Property:

Tenant:

• Texas is a income tax free state• Located in the Houston MSA - just 30 miles southwest of

downtown Houston• Highly affluent community with phenomenal demographics • Over 11,000 people within a 1-mile radius, with average HH

income of $115,000 • Over 82,000 people within a 3-mile radius, with average HH

income of $123,000• Over 260,000 people within a 5-mile radius, with average HH

income of $120,000• Just off the Westpark Tollway with over 21,000 CPD - a major

thoroughfare to downtown Houston• Growing community - positive population growth over the last

10 years

• Investment grade credit tenant | S&P Rated BBB+ | Moody’s Baa1

• Second largest retail pharmacy in the US with over 9,600 locations

• Fortune 500 company - Ranked #10 in 2015• CVS Health is the largest retailer of prescription drugs and the

second-largest pharmacy benefits manager in the U.S.

• Long term lease providing long term passive income and security - just under eighteen (18) years remaining

• Absolute NNN - zero landlord responsibilities• Attractive new prototype CVS store format - standalone

building, on a signalized corner, with a drive-thru pharmacy• Attractive 9.5% rent increases every five (5) years in renewal

options - strong hedge against inflation

Investment Highlights

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Executive Summary

CVS6900 Grand Mission Blvd.Richmond, TX 77407

List Price ................................................................................$6,473,455

CAP Rate.....................................................................................................5.50%CVS Store Number .................................................................................................5484Gross Leasable Area .....................................................................................12,900 SF Lot Size ................................................................................................................. 1.70 AC Year Built ................................................................................................................... 2008

Annualized Operating DataMonthly Rent Annual Rent Increases CAP Rate

Current thru 1/31/2034 $29,670.00 $356,040.00 $27.32 5.50%

Option 1 $31,153.50 $373,842.00 $28.69 5.78%

Option 2 $32,711.18 $392,534.10 $30.12 6.06%

Option 3 $34,346.73 $412,160.81 $31.63 6.37%

Option 4 $36,064.07 $432,768.85 $33.21 6.69%

Option 5 $37,867.27 $454,407.29 $34.87 7.02%

Option 6 $39,760.64 $477,127.65 $36.61 7.37%

Tenant Summary

Tenant Trade Name CVS

Type of Ownership Fee Simple

Lease Guarantor CVS Caremark Corporation

Lease Type NNN

Landlord Responsibility None

Original Lease Term 25 Years

Lease Commencement Date October 13, 2008

Rent Commencement Date November 2, 2008

Lease Expiration Date January 31, 2034

Term Remaining on Lease ± 17.75 Years

Increases In options

Options Six (6) five (5) year options

Drive-Thru Pharmacy Yes

*Broker unable to verify - buyer to verify exact rent commencement date in DD period.

7 | CVS

Tenant: CVS Pharmacy, Inc.

Guarantor:CVS Caremark Corporation,

a Delaware Corporation

Address:One CVS Drive

Woonsocket, RI 02895

Woonsocket, RI 02895 None

Size: 12,900 SF

Date of Lease: April 2, 2008

Lease Commencement: October 13, 2008

Lease Expiration: January 31, 2034

Original Lease Term:Twenty-five (25) years from the “Date of Rent Commencement” plus any months necessary to have the term expire on the next

January 31st

Renewal Options: Six (6) extension periods of five (5) years each

Required Advance Notice of Exercise of Renewal OptionsOne hundred eighty (180) days prior to the expiration of the then

current term

Current Rent: $356,040.00 (Fixed)

Rent Increases:In Renewal Options (Fixed) [Approx. 9.5% increases per extension

period]

Net LeaseThis lease is a triple net lease and all costs, expenses, and obliga-

tions relating to the Premises shall be paid by Tenant.

Real Estate Taxes:Tenant to pay all Tax authorities, all real estate taxes and all assess-

ments which may be levied against the Shopping Center

Common Area Maintenance: Tenant reimburses any CAM costs

Insurance:

Tenant shall maintain All-Risk insurance for the building for at least ninety (90%) of its reasonable replacement value and shall name

Landlord as an additional insured. Tenant shall also maintain General Liability coverage, including Broad Form Endorsement,

on an occurrence basis, in combined policy limits of not less than $2,000,000 and not in excess of $5,000,000 for bodily injury and

for property damage with respect to the Premises.

Utilities: Tenant to pay for all utilities consumed by it in the Premises

Tenant Assignment and Subletting:Tenant shall have the right to assign the Lease, or to sublet the whole or any part of the Premises provided Landlord’s consent

Right of First Refusal None

Lease Abstract

8 | CVS

PROPERTY OVERVIEWPROPERTY OVERVIEW

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Physical Description

Property Name CVS

Property Address 6900 Grand Mission Blvd. Richmond, TX 77407

Assessor’s Parcel Number 0451-00-000-0102-901

Site Description

Number of Stories One

Year Built 2007

Gross Leasable Area (GLA) 12,900 SF

Lot Size 1.70 AC

Type of Ownership Fee Simple

Parking 70 Surface Spaces

Parking Ratio 5.42 : 1000 SF

Landscaping Professional

Topography Generally Level

Construction

Foundation Concrete Slab

Exterior Masonry

Parking Surface Asphalt

Roof Flat

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Bird’s Eye

Westpark Tollway CPD: ±21,000

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Regional Map

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Tenant Map

TENANT OVERVIEW

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Property Name CVS

Property Type Net Leased Drug Store

Parent Company Trade Name CVS Health Corporation

Ownership Public

Credit Rating BBB+

Rating Agency Standard & Poor’s

Revenue $143 Billion

Net Income $4.71 Billion

Stock Symbol CVS

Board NYSE

No. of Locations ±7,800

No. of Employees ±137,800

Headquartered Woonsocket, RI

Web Site www.cvs.com

Year Founded 1892

CVS Health Corporation, together with its subsidiaries, provides integrated pharmacy health care services in the United States. The company operates through Pharmacy Services and Retail Pharmacy segments. The Pharmacy Services segment offers pharmacy benefit management services, such as plan design and administration, formulary management, Medicare Part D services, mail order and specialty pharmacy services, retail pharmacy network management services, prescription management systems, clinical services, disease management programs, and medical pharmacy management services. The Retail Pharmacy segment sells prescription drugs, over-the-counter drugs, beauty products and cosmetics, personal care products, convenience foods, seasonal merchandise, and greeting cards, as well as provides photo finishing services. As of December 31, 2014, it operated 7,822 retail drugstores, 860 health care clinics, 17 onsite pharmacy stores, 27 retail specialty pharmacy stores, 11 specialty mail order pharmacies, 4 mail service dispensing pharmacies, and 86 branches, as well as 6 centers of excellence for infusion and enteral services. The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. Source: Yahoo! Finance

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AREA OVERVIEW

The economy of the nation’s fourth most populous city has a broad industrial base in energy, manu-facturing, aeronautics and transportation. Only New York City is home to more large public compa-nies than Houston. The city is also home of the Texas Medical Center, the world’s largest concentra-tion of health care and research institutions, and NASA’s Johnson Space Center, where the Mission Control Center is located. The Port of Houston ranks first in the U.S. in international waterborne tonnage handled and second in total cargo tonnage handled. Houston has many cultural institutions and exhibits, which attract more than 7 million visitors a year to the Houston Museum District.

A Booming Economy

• Houston is the No. 1 city for job creation in the U.S. • Houston is home to more Fortune 500 company headquarters than anywhere in America

except for New York.• Houston rates first among the nation’s 10 most populous cities in total acreage of parkland

and third behind only San Diego and Dallas in park acreage per capita

Nationally Ranked Quality of Living

Richmond, TXRichmond, the county seat of Fort Bend County, is on the Brazos River fifteen miles southwest of Houston. The city’s transportation links include U.S. highways 90A and 59, the Southern Pacific Railroad, and the Atchison, Topeka, and Santa Fe Railway. Historic points of interest in Richmond include the Morton Cemetery, the 1883 John Moore Home, the Long-Smith Cottage, the McFarlane Visitors Center, the historic county courthouse, many historic homes, a Confederate Museum, and the Fort Bend Historical Museum.

Houston, TX - MSA Houston exudes a cosmopolitan and down-home vibe. The style-savvy residents of the country’s fourth-largest city and third-largest county know that there’s no place quite like Houston. With more than 2.2 million residents, the city attracts visitors and transplants with a wonderful mix of world-class arts, booming business, pro sports and award-winning cuisine. Just last year, the city landed on several “best of” lists, including the Travel + Leisure roundup of America’s Favorite Cities and the Hotwire.com index of most affordable U.S. vacation destinations.

Not surprisingly, businesses also recognize the allure of Houston’s offerings. Twenty-five companies on the Fortune 500 list call the Energy Capital of the World home. Aeronautic research is unsurpassed at NASA headquarters and Texas Medical Center remains the largest in the world with 47 highly lauded research and treatment institutions. With more than 4.4 million square feet of convention space, metro Houston ranks at the top of American cities when comparing convention venues. In 2014, Houston hosted 364 conventions, events and shows that drew 774,152 attendees to Houston, translating into an economic impact of $485 million, based on attendance.

The city is also set to host the NCAA Final Four in 2016 and the NFL’s Super Bowl LI in 2017.

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Top Employers

# Employer

1Memorial Hermann Healthcare System

2 Continental Airline, Inc

3The University of Texas M.D Anderson Cancer Center

4 ExxonMobil

5 Shell Oil Company

Once dominated by oil-related jobs, Houston’s economy has diversified as new, core industries join energy in the regional employment mix. These diversifying sectors account for 71 percent of the net job growth since 1986, according to calculations made by the Greater Houston Partnership based on the University of Houston’s Institute of Regional Forecasting data. The Greater Houston Partnership and Workforce Solutions implemented an innovative approach to meet employers’ skill shortages through an initiative to align the region’s education and training offerings with employers’ immediate needs. One major element of this initiative has focused on the shortage of registered nurses in the Gulf Coast region. The coalition’s Health Services Steering Committee was recognized with a national award in 2001 as an exemplary partnership. Also, the Texas Workforce Commission awarded the Workforce Solutions a grant to expand the model program at the University of Texas Medical Branch at Galveston for upgrading staff to registered nurse positions, including six area hospitals that chose to participate. That initiative resulted in a 20 percent increase in local nursing school enrollment and a corresponding increase in the number of nursing school facilities.

# Employer6 Kroger Company

7 National Oilwell Varco

8 The Methodist Hospital

9The University of Texas Medical Branch at Galveston

10 Avaya

Houston is known as a world capital of the oil and gas industry with over 5,000 energy firms doing business in the region. The city is a leading domestic and international center for virtually every segment of the oil and gas industry - exploration, production, transmission, marketing, service, supply, offshore drilling, and technology. Houston dominates U.S. oil and gas exploration and production. The city remains unrivaled as a center for the American energy industry. Houston is headquarters for 17 energy-related Fortune 500 companies and is home to more than 3,600 energy-related establishments. Houston is home to 13 of the nation’s 20 largest natural gas transmission companies, 600 exploration and production firms and more than 170 pipeline operators. Oil and gas exploration and production has increased in reaction to high energy prices and a reduced worldwide surplus oil production capacity.

A World Capital of Oil

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Demographics

Population 1-Mile 3-Mile 5-Mile

2021 Projection 11,492 82,776 260,443

2016 Estimate 9,864 72,350 233,333

2010 Census 6,948 55,362 193,902

2000 Census 1,281 18,759 105,875

Growth 2016 - 2021 3.29% 4.21% 4.48%

Growth 2010 - 2016 2.49% 3.85% 4.38%

Growth 2000 - 2010 -0.09% 0.14% -1.54%

Households 1-Mile 3-Mile 5-Mile

2021 Projection 3,608 25,298 80,775

2016 Estimate 3,090 22,152 72,599

2010 Census 2,165 17,046 61,136

2000 Census 427 5,693 33,056

Growth 2016 - 2021 3.45% 4.30% 4.94%

Growth 2010 - 2016 2.62% 4.09% 5.33%

Growth 2000 - 2010 -1.35% -0.77% -1.19%

Income 1-Mile 3-Mile 5-Mile

Income < $15,000 162 1,064 3,853

Income $15,000 - $24,999 76 678 3,437

Income $25,000 - $34,999 70 883 4,092

Income $35,000 - $49,999 226 1,868 7,562

Income $50,000 - $74,999 582 3,524 11,355

Income $75,000 - $99,999 455 2,866 9,239

Income $100,000 - $124,999 469 3,037 8,686

Income $125,000 - $149,999 362 2,454 6,304

Income $150,000 - $199,999 338 2,623 7,607

Income $200,000 - $249,999 165 1,301 3,616

Income $250,000 - $499,999 141 1,279 4,495

Income $500,000+ 43 574 2,353

2016 Est. Average Household Income $115,551 $123,828 $120,414

2016 Est. Median Household Income $98,517 $101,591 $91,238

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Mark CohenBroker of Record License No. 447509

Bill PedersenNational Drug Store Specialist

License No. 01975700O 310.919.5799M 831.246.0646bill.pedersen@matthews.com