OFFERING MEMORANDUM HERTZ NW - MEDFORD 3976 CRATER LAKE AVENUE MEDFORD, OR 97504 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-MEDFORD represents an opportunity to acquire a single tenant absolute NNN leased property located on a major commercial corridor in fast growing Medford, Oregon.The Property is 12,375 square feet and situated on 3.66 acres of land. Hertz NW, an independent licensee of Hertz Global Holdings, Inc. (NYSE: HTZ) operates vehicle sales, and automotive service, at the Property. HIGHLIGHTS • 12-year absolute NNN lease • 6% rent increase Year 6 • Located just off of the Crater Lake Highway with traffic counts approximately 25,000 ADT • 800 lineal feet of frontage along Crater Lake Avenue and Coker-Butte Road • Hertz NW – 34 years in business with 11 locations in Oregon and Washington 1 Address 3976 Crater Lake Ave Medford, Oregon Price $2,234,075 ER-BUTTE R OAD PROPERTY SUMMARY Cap Rate 7.75% Site Size 3.66 Acres Use Vehicle Sales and Service CR ROAD Year Built 2001 C OK Total 12,375 SF Bldg Area E COKER L AK -BUTTE R ATE E AV CRATER L AKE HIGH N WAY 25,000 AD T (2011) N 2 62 U E LOCATION OVERVIEW City of Medford Lithia Chrysler Jeep Dodge COKER-BUTTE RD Jackson County Medford Population: 76,462 (2012) CRATER LAKE HWY Kawasaki & Honda of Medford ROGUE VALLEY INTERNATIONAL MEDFORD AIRPORT LA KE RO 3976 Crater Lake Ave OWENS RD DT Mercedes Benz of Medford 35 ,00 0A Southern OR Subaru Volvo Mitsubishi Airport Chevrolet 3 COKER-BUTTE ROAD CRAT E R Metro Population: 207,010 (2012) AD Oregon State FINANCIAL INFORMATION OVERVIEW Property Size Price 12,375 SF (8,250 SF Showroom, and 4,125 SF Service Center) on 3.66 acres $2,234,075 Price Per Square Foot Capitalization Rate $180.53 7.75% INCOME / EXPENSES SF 12,375 Net Rental Income: Hertz NW - Medford Less Expenses $/SF/Month $1.17 $/SF/Year $13.99 Total $173,141 0 Net Operating Income (NOI) $173,141 Rent Roll tENANT SF West One Automotive Group, Inc. 12,375 dba Hertz NW Total 12,375 % OF pREMISES lEASE fROM 100.0% Close of Escrow lEASE tO cURRENT SECURITY TERM DEPOSIT BASE RENT 144 12 Years $ -$14,428.80 Months Thereafter Notes: Four 5-year renewal options at fair market value 100.0% $ -- 4 $14,428.80 BASE RENT $/SF LEASE TYPE RENTAL INCREASES $1.17 Absolute Net 6% Year 6 $1.17 AREA OVERVIEW MEDFORD, OREGON Medford is the county seat for Jackson, County, Oregon with a total population of 76,462 (July 1, 2012) and a metropolitan area population of 207,010 making the Medford MSA the 4th largest metro area in Oregon. It is located along I-5 approximately 275 miles south of Portland, Oregon and 150 miles north of Redding, California. The nearby Rogue Valley International-Medford Airport located just across the Crater Lake Highway is the third busiest airport in Oregon with 42,053 aircraft operations in 2011, an average of 115 per day. Currently 12% of flights are commercial with destinations including Seattle/Tacoma, Portland, San Francisco, Los Angeles, Denver, and Las Vegas. In 1967, Interstate 5 was completed immediately adjacent to downtown Medford to replace the Oregon Pacific Highway. It has been blamed for the decline of small businesses in downtown Medford since its completion, but nevertheless remains an important route for commuters wishing to travel across the city. In fact, a study completed in 1999 found that 45% of vehicles entering I-5 from north Medford heading south exited in south Medford, just three miles (5 km) away. The high volume of traffic on Interstate 5 led to the completion of a new north Medford interchange in 2006. The project, which cost about $36 million, improved traffic flow between I-5 and Crater Lake Highway. Since the 1990s, Medford has dedicated an appreciable amount of resources to urban renewal in an attempt to revitalize the downtown area. Several old buildings have been restored, including the Craterian Ginger Rogers Theater and the Prohibition era Cooley-Neff Warehouse, now operating as Pallet Wine Company, an urban winery. Streets have been realigned, new sidewalks, traffic signals, and bicycle lanes were installed, and two new parking garages have been built. Downtown Medford also received a new library building to replace the historic Medford Carnegie Library and now boasts satellite campuses for both Rogue Community College and Southern Oregon University. Benefiting from the Medford presence of the headquarters for Lithia Motors, Inc. (the seventh largest automotive retailer in the United States with six locations in Medford including one just north of the Subject Site), a collaboration between the city of Medford and Lithia Motors called The Commons was conceived. It is one of the largest projects undertaken in downtown in recent years and aims to provide more parking, recreation, and commerce to the area. Economic problems in 2008 and 2009 put a hold on the project, but before the work stopped, the Greyhound Bus depot was moved and $850,000 was spent replacing water lines. The Commons is anchored by the new corporate headquarters building for Lithia Motors, Inc. which houses 300 employees. Included in The Commons are two public park blocks slated to be informal public gathering areas as well as an area for special events such as the farmer’s market. Ground breaking for the project was April 22, 2011, with a Phase 1 completion date of 2012. 5 DEMOGRAPHICS MEDFORD DEMOGRAPHIC OVERVIEW 1-Mile 3-Mile 5-Mile 2013 Estimated Total Population 1,917 44,727 106,983 2018 Forecast Total Population 2,025 45,841 111,108 Population Growth 2010 to 2013 3.36% 1.21% 2.21% Forecast Population Growth 2013-2018 5.62% 2.49% 3.86% 2013 Estimated Median Household Income $41,625 $39,325 $39,923 2013 Estimated Average Household Income $52,381 $50,054 $53,953 © 2013, Claritas. All Rights Reserved. Report generated on Thursday, 1 August 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 Redmond, 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