OFFERING MEMORANDUM HERTZ NW - PASCO 2520 W COURT STREET PASCO, WA BROKER CONTACTS JIM LEWIS GARY GRIFF 503-279-1743503-279-1756 jim.lewis@cushwake.com gary.griff@cushwake.com EXECUTIVE SUMMARY INVESTMENT OVERVIEW Hertz NW-PASCO represents an opportunity to acquire a single tenant absolute NNN leased property located on a major commercial corridor in fast growing Pasco, Washington.The Property is a 9,286 square feet building situated on 1.18 acres of land. Hertz NW, an independent licensee of Hertz Global Holdings, Inc. (NYSE: HTZ) operates car rental service and vehicle sales at the Property. HIGHLIGHTS • 12-year absolute NNN lease • 6% rent increase Year 6 • Located on W Court Street with traffic counts in excess of 19,000 ADT • 300 lineal feet of frontage on N 26th Avenue and 180 lineal feet of frontage on W Court Street • Hertz NW – 34 years in business with 11 locations in Oregon and Washington 1 PROPERTY SUMMARY Address 2520 W. Court Street, Pasco, WA Price $1,914,921 Cap Rate 7.75% Building Area 9,286 Square Feet 1.18 Acres Use Auto Rental and Vehicle Sales Year Built 2002 N 24T H AV ENUE N 26TH AVENU E Site Size W COURT STRE 19,000+ AD ET T N 2 LOCATION OVERVIEW City of Pasco Franklin County Washington State Tri-Cities Population: 264,133 (2010) Pasco Population: 65,398 (2012) 2520 W Court St US POST OFFICE Tri-Cities Mitsubishi McCurley Integrity Chevrolet Legacy Ford Pasco Speck Hyundai Bill Robertson Nissan 3 FINANCIAL INFORMATION OVERVIEW Property Size Price 9,286 SF $1,914,921 Price Per Square Foot Capitalization Rate $206.22 7.75% INCOME / EXPENSES SF 9,286 Net Rental Income: Hertz NW - Pasco Less Expenses $/SF/Month $1.33 $/SF/Year $15.98 Total $148,406 0 Net Operating Income (NOI) $148,406 Rent Roll tENANT SF % OF pREMISES lEASE fROM West One Automotive Group, Inc. dba Hertz NW 9,286 100.0% Close of Escrow Total 9,286 100.0% lEASE tO cURRENT SECURITY TERM DEPOSIT BASE RENT 144 12 Years $ -$12,367.20 Months Thereafter Notes: Four 5-year renewal options at fair market value $ -- 4 $12,367.20 BASE RENT $/SF LEASE TYPE RENTAL INCREASES $1.33 Absolute Net 6% Year 6 $1.33 AREA OVERVIEW PASCO, WASHINGTON Pasco is the county seat of Franklin County, Washington. It is one of three cities that make up the Tri-Cities located in the Columbia Basin of southeastern Washington at the confluence of the Columbia, Snake and Yakima Rivers. The TriCities is a mid-sized metropolitan area of approximately 264,133 people that also includes the cities of Kennewick and Richland. Pasco is located in Southeastern Washington 136 miles southwest of Spokane, WA, 216 miles from Portland, Oregon, and 229 miles from Seattle, WA. Highway 395 runs north/south through the city and is the primary connection to I-90 to the north and I-84 to the south. Running east/west is Highway 12/I-182 which connects Hwy 395 to I-82 and Yakima, WA 83 miles to the west. The massive Columbia River borders the south side of the city separating it from the neighboring Benton County and the cities of Richland and Kennewick. Historically, the area has experienced economic cycles tied to the Hanford Nuclear Reservation. Beginning in 2002 and continuing through 2007, the regions experienced tremendous growth stimulated by construction of a new plant at Hanford. Kennewick is actually the largest of the three cities and until the last decade, Pasco was the smallest of the three. But within the past 10 years, Pasco’s population has exceeded Richland’s by over 10,000. Pasco is home to the Tri-Cities Airport a regional commercial and private airport. The Tri-Cities Airport is the only commercial airport in the Tri-Cities area and is served by several major airlines with direct flights to Seattle, Denver, Salt Lake City, Las Vegas, Minneapolis, Los Angeles, Phoenix/Mesa and San Francisco. It is also where the local Amtrak station is located since 1970, when the national rail passenger service was established. Before this, the Northern Pacific operated the depot and passenger trains in and out of Pasco. Additional commercial transportation is also done through extensive barge traffic on the Columbia and Snake rivers. The railroad transport is done through the BNSF Railway and trucking via Interstate 182, and to a lesser extent through U.S. Route 395. Some of the biggest Pasco employers include Hanford nuclear facility, Burlington Northern, Lamb Weston, Boise Cascade, Tyson Foods, Energy Northwest, Fluor Hanford Inc., Bechtel National Inc., and Battelle Pacific Northwest National Laboratories Located in the rain shadow of the Cascade Range, Pasco receives little precipitation throughout the year. Hot summers, warm springs, and cold winters provide stark contrast to other areas of the state. 5 DEMOGRAPHICS PASCO DEMOGRAPHIC OVERVIEW 1-Mile 3-Mile 5-Mile 2013 Estimated Total Population 15,668 68,925 138,028 2018 Forecast Total Population 17,280 76,963 154,746 Population Growth 2010 to 2013 6.58% 8.36% 8.92% Forecast Population Growth 2013-2018 10.29% 11.66% 12.11% 2013 Estimated Median Household Income $32,362 $37,860 $47,324 2013 Estimated Average Household Income $41,676 $47,628 $57,477 © 2013, Claritas. All Rights Reserved. Report generated on Thursday, 25 July 2013. © 2013 Alteryx, Inc., Irvine CA | 888-836-4274 | www.demographicsnow.com | Powered by Alteryx® 6 TENANT PROFILE hERTZ gLOBAL hOLDINGS, iNC. (htz) - nyse Website: http://www.hertz.com Hertz Global Holdings, Inc., through its subsidiaries, engages in the car and equipment rental businesses worldwide. The company operates in two segments, Car Rental and Equipment Rental. Under these two segments, Hertz is involved with various businesses including car rental, truck and van rental, equipment rental, car sales, and entertainment services. About Hertz Hertz operates its car rental business through the Hertz, Dollar and Thrifty brands from approximately 10,400 corporate, licensee and franchise locations in approximately 150 countries. The company was founded in 1918 and has grown to approximately 30,200 employees worldwide. In November 2012, Hertz completed its acquisition of Dollar Thrifty Automotive Group, Inc.. with Dollar Thrifty becoming a wholly owned subsidiary of Hertz and giving the company two additional brands to compete against multiple market segments. • Market Cap (intraday): 9.92B • Revenue (ttm): 9.50B hERTZ NW Website: http://www.hertznorthwest.com West One Automotive Group, Inc., dba Hertz NW, is an independent licensee of Hertz Global Holdings, Inc. Hertz NW operates 11 locations throughout Oregon and Washington, offering car rental services, used car sales, and automotive maintenance and repair. The car rental fleet, which turns over often, offers Hertz NW access to a high quality inventory of used cars that it offers for sale.The licensing agreement with Hertz offers access to the Hertz brand and rental reservation system. Car sale locations include Albany, Bend, Eugene, Medford and Salem in Oregon and Pasco, Washington. Car rental locations include Remond, Medford and Bend in Oregon and Pasco and Moses Lake in Washington. Hertz NW has been in business 34 years. The business is 50% owned by JELD-WEN and 50% owned by management. The company had 2012 revenues of $56.5 million and EBIDTA of $1.8 million. The company is on track for 2013 revenue of approximately $61.6 million and EBIDTA of $3.2 million. 7