±3,000 SF SINGLE TENANT ABSOLUTE NNN INVESTMENT PRICE: $582,000 CAP RATE: 7.52%

O F F E R I N G M E M O R A N D U MPEP BOYS3 7 0 4 G A R T H R O A D | B AY T O W N , T E X A S | 7 7 5 2 1

TIM WESTFALLManaging Director

602 952 3822 | twestfall@ngkf.com

AFFILIATED BUSINESS DISCLOSURE

Newmark Knight Frank (the “Agent”) has been engaged as the exclusive sales representative for the sale of 3704 Garth Road, Baytown, Texas, 77521 (the ”Property”) by ‘Ownership’ (the “Seller”).

This Memorandum does not constitute a representation that the business or affairs of the Property or Seller since the date of preparation (8/10/2020) of this Memorandum have remained the same. Analysis and verification of the information contained in this Memorandum are solely the responsibility of the prospective purchaser.

Additional information and an opportunity to inspect the Property will be made available upon written request of interested and qualified prospective purchasers. Seller and Agent each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the Property, and/or terminate discussions with any party at any time with or without notice. Seller reserves the right to change the timing and procedures for the Offering process at any time in Seller’s sole discretion. Seller shall have no legal commitment or obligations to any party reviewing this Memorandum, or making an offer to purchase the Property, unless and until such offer is approved by Seller, and a written agreement for the purchase of the Property has been fully executed and delivered by Seller and the Purchaser thereunder.

This Memorandum and the contents, except such information which is a matter of public record or is provided in sources available to the public, are of a confidential nature. By accepting this Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not forward, photocopy or duplicate it, that you will not disclose this Memorandum or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Seller or Agent, and that you will not use this Memorandum or any of the contents in any fashion or manner detrimental to the interest of Seller or Agent.

PREPARED BY

2398 East Camelback Road, Suite 950Phoenix, AZ 85016

RYAN MORONEYDirector

602 952 3820 | rmoroney@ngkf.com 01 EXECUTIVE SUMMARY

02 FINANCIAL & LEASE SUMMARY

03 TENANT PROFILE

04 AREA OVERVIEW

C O N T E N T S

JACK MCANDREWAssociate

602 952 3821 | jack.mcandrew@ngkf.com

Broker of Record:

EVA HORTON Managing Director 713 599 5188 | ehorton@ngkf.com License #: 714610

01 EXECUTIVE SUMMARY

THE OFFERING

Newmark Knight Frank (NKF), as exclusive advisor, is pleased to present the

opportunity to acquire the Pep Boys (the Property) absolute net lease offering,

a 3,000-square-foot auto parts and service center facility in Baytown, Texas

(Houston MSA).

This single-story building is located on ±0.41 acres with frontage on one of

Baytown’s busiest arterials, Garth Road (±26,633 VPD).

The Pep Boys on this main arterial is just minutes from Downtown Baytown and

has convenient access to the Interstate 10, the 4th longest interstate in the US.

The Property’s location in a dense retail trade area, surrounded by national brands

like Lowe’s Home Improvement, Walmart, Target, Home Depot and Smart Shop

is attractive to the 104,833 people within a 5-mile radius with its own tremendous

brand recognition.

PROPERTY NAME Pep Boys

BUILDING ADDRESS

3704 Garth RoadBaytown, Texas 77521

TENANT Pep Boys Auto Parts and Service

YEAR BUILT 1990, Renovated in 2016

TOTAL BUILDING AREA ±3,000 SF

LAND AREA ±0.41 AC

OFFERING HIGHLIGHTS

• Less than 1 year of term remaining with one five-year option which would result in a 10% rent bump

• Attractive going-in yield of a 7.52% CAP and low basis ($194/SF)

• Below market rent – Pep Boys is paying just over $14/SF, which is approximately 35% below market helping overall unit-level profitability

• Baytown is part of the Houston, TX MSA (25 miles East of Downtown Houston) and currently the 5th largest MSA in the U.S.

• Located directly on Garth Road, which is one of Baytown’s busiest arterials that sees 26,633 VPD

• Proximity to a long list of major retailers including Smart Shop, 24 Hour Fitness, Target, Best Buy, Lowe’s, Home Depot & Walmart all at the nearest intersection

• Building was recently renovated in 2016 and consists of 6 automotive bays and prime monument signage on Garth Road

• Close proximity to major traffic drivers including the Exxon Mobil Baytown Plant (7,000+ employees) and Houston Methodist Hospital (257 beds & 1,497 employees)

• Texas is an income tax free state

• Absolute NNN deal structure with zero landlord responsibilities under a corporate-guaranteed lease (950+ locations)

GART

H RO

AD V

PD: ±

26,6

33

GART

H RO

AD V

PD: ±

26,6

33

257 Beds1,497 Employees

GARTH ROAD VPD: ±26,633

GARTH ROAD VPD: ±26,633

Baytown Plant 7,000+ Employees

HOUSTON METROHOUSTON METRO

02 FINANCIAL & LEASE SUMMARY

PRICE $582,000

CAP RATE 7.52%

NOI / ANNUALLY $43,800

FINANCING Free & Clear

FINANCIAL SUMMARY

FINANCIAL & LEASE SUMMARY

LEASE SUMMARY

TENANT Pep Boys

LEASE GUARANTOR

The Pep Boys - Manny, Moe, and Jack, a Pennsylvania Corporation (Corporate)

LEASE TYPE Absolute NNN Lease

NOI / ANNUALLY $43,800

RENT PER SF $14.60

TENANT RESPONSIBILITY

Tenant shall keep and maintain the Premises and Premises’ Improvements, including maintenance of interior and exterior building, all maintenance/repair of HVAC, plumbing and electrical systems.

LANDLORD RESPONSIBILITY None

LEASE EXPIRATION June 30, 2021

ORIGINAL LEASE TERM 5 Years

REMAINING TERM 1 Year

LEASE OPTIONS One 5-Year Option to Renew

RENTAL INCREASES 10% Increase at Renewal

RIGHT OF FIRST REFUSAL NoneThe corporate-guaranteed absolute NNN lease has 1 1

year ryear remaining on its original 5-yearoriginal 5-year term. There is one 5-year option to renew which would result in a 10% rent increase.

GARTH ROAD VPD: ±26,633GARTH ROAD VPD: ±26,633

03 TENANT PROFILE

Pep Boys is an American automotive

aftermarket retail and service chain.

Originally named Pep Auto Supply

Company, the Company was founded

in Philadelphia, Pennsylvania in 1921 by

Emanuel (Manny) Rosenfeld, Maurice L.

(Moe) Strauss, W. Graham (Jack) Jackson,

and Moe Radavitz.

Headquartered in the Philadelphia

neighborhood of East Falls, Pep Boys

provides name-brand tires; automotive

maintenance and repair; parts and expert

advice for the Do-It-Yourselfer; commercial

auto parts delivery; and fleet maintenance

and repair to customers across the

U.S. with Just Brakes, a wholly owned

subsidiary of The Pep Boys – Manny, Moe

& Jack, Pep Boys operates more than

8,300 service bays in over 930 locations in

35 states and Puerto Rico.

TENANT TRADE NAME Pep Boys

OWNERSHIPOwned subsidiary of Icahn Enterpriseacquired in 2016

TENANT Pep Boys

LEASE GUARANTORThe Pep Boys - Manny, Moe, and Jack, a Pennsylvania Corporation (Corporate)

LEASE EXPIRATION June 30, 2021

PEP BOYS LOCATIONS 930+ in 35 states and Puerto Rico

www.pepboys.com

04 AREA OVERVIEW

Cross over the scenic Fred Hartman Bridge and you’ll find Baytown, Texas. Located just 30 miles east of

downtown Houston, Baytown is the third largest city in Harris County, and is easily accessible via Interstate

10, Highway 146, and the Grand Parkway (Hwy 99).

The city’s strategic location has encouraged a successful and diverse blend of employment opportunities

and recreational activities centered on the area’s waterways. Located in the Texas Independence Trail region,

Baytown is rich in history. General Sam Houston was an early resident, and the area played a significant role

in the Battle of San Jacinto in 1836. The region was also home to the Karankawa Indians; their artifacts can

still be found at the Baytown Nature Center.

Major employers include Exxon Mobil, Goose Creek Consolidated Independent School District, and San

Jacinto Methodist Hospital.

With a booming economy, Baytown is experiencing unprecedented growth in industry, retail and housing. The

city has maintained high quality of life while becoming a major center for economic growth in the Sugarland-

Houston-Baytown metropolitan area.

5-MILE DEMOSAREA OVERVIEW | BAYTOWN-HOUSTON MSA

104,833 POPULATION

35,609HOUSEHOLDS

33.5MEDIAN AGE

$74,985AVERAGE HH INCOME

• Baytown Refinery is the 2nd largest crude oil refinery in the United States

• Baytown is located 30 minutes east of the largest port in the Gulf Coast - Port of Houston - accounting for

52% of the Gulf Coast’s cargo

• Pep Boys is in close proximity to Exxon Mobil’s Baytown Olefins Plant (±7,000 employees), one of the

largest ethylene plants in the world

• Houston MSA is the 2nd fastest growing in the United States

• Houston MSA is 2nd in the country for job growth

FUN FACTS

RYAN MORONEYDirector

+1 602 952 3820rmoroney@ngkf.com

TIM WESTFALLManaging Director+1 602 952 3822

twestfall@ngkf.com

PREPARED BY

2398 East Camelback Road, Suite 950Phoenix, AZ 85016

Newmark Knight Frank (the “Agent”) has been engaged as the exclusive sales representative for the sale of 3704 Garth Road (the ”Property”) by ‘Ownership’ (the “Seller”). The information contained herein has been obtained from sources deemed reliable but has not been verified and no guarantee, warranty or representation, either express or implied, is made with respect to such information. Terms of sale or lease and availability are subject to change or withdrawal without notice.

JACK MCANDREWAssociate

+1 602 952 3821jack.mcandrew@ngkf.com

Broker of Record:

EVA HORTON Managing Director 713 599 5188 | ehorton@ngkf.com