600 MAIN STREET MOUNT PLEASANT, PA

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1 Actual Property Photo OFFERING MEMORANDUM 600 MAIN STREET MOUNT PLEASANT, PA

2 EXCLUSIVE MARKETING ADVISORS MARC MANDEL STEVE SCHRENK COLER YOAKAM CLAUDIA STEEB BRANDON CHAVOYA Managing Director Director Senior Managing Director Managing Director Managing Director Investment Advisory Investment Advisory Investment Advisory Investment/Financing Advisory Financing Advisor PHILADELPHIA 1700 Market Street Suite 3232 Philadelphia, PA DALLAS 2323 Victory Avenue Suite 1200 Dallas, TX PITTSBURGH 301 Grant Street Suite 1100 Pittsburgh, PA Holliday Fenoglio Fowler, L.P. ( HFF ) has been engaged by the owner of Art Van Furniture to market Perry Hwy, Wexford PA for sale. Information concerning the property described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.

3 CLICK HERE TO VIEW PROPERTY VIDEO EXECUTIVE SUMMARY 01 INVESTMENT HIGHLIGHTS 02 LEASE ABSTRACT 03 TENANT PROFILE 05 INVESTMENT MERITS 07 LOCATION OVERVIEW 08

4 EXECUTIVE SUMMARY Holliday Fenoglio Fowler, L.P. ( HFF ), on behalf of Art Van Furniture (the Tenant ) and Thomas H. Lee Partners ( Thomas H. Lee or Sponsor ), is pleased to present an outstanding opportunity for the saleleaseback of 600 Main Street retail location currently branded as Levin Furniture, located in Mount Pleasant, PA (the Property ). The Property is being offered by Art Van Furniture, as a result of its November Mid-Atlantic store acquisition of Wolf Furniture and Levin Furniture bringing its total store count to 176. Actual Property Photo INVESTMENT SUMMARY Location 600 Main Street, Mount Pleasant PA Branded As Art Van Furniture Site Area 0.49 Acres Building Size 34,500 SF Lease Type NNN Rent Commencement Lease Expiration NOI $251,850 Annual Rent Increase Options At closing tenant to execute new 20 year lease 20 years after settlement Lesser of (i) 2% or (ii) 1.25 times the change in the Price index 1x5 year 1x4 year 11 months Art Van Furniture to execute a 20 year primary lease upon close of escrow showing a long term commitment to the location. Art Van Furniture will operate the store with their proven commitment to high-quality and immense value that has allowed the brand to grow and become the #1 furniture and mattress retailer in the Midwest. TENANT REVENUE: ~$1.3 BN TENANT EBITDA: GREATER THAN $70MM Art Van Furniture Mount Pleasant, PA 1

5 INVESTMENT HIGHLIGHTS Art Van Furniture Mount Pleasant, PA 2

6 LEASE ABSTRACT ART VAN FURNITURE Lessee Branded As Guarantor Building Size Lot Area Art Van Furniture AVF Parent, LLC Levin Furniture 34,500 SF.39 Acres Year Built 1924 NOI $251,850 Annual Rent Increase Lease Type Rent Commencement Lease Term Lease Expiration Remaining Options Lesser of 2% or 1.25 times the change in the Price index NNN Close of escrow 20 years 20 years from close of escrow One (1), Five (5) Year Option One (1), Four (4) Year Eleven (11) Month Option Actual Property Photo Representative Photo RENT SCHEDULE DESCRIPTION DATES ANNUAL RENT INCREASE Base Term Year 1 Year 1 $251,850 2% Base Term Year 2 Year 2 $256,887 2% Base Term Year 3 Year 3 $262,025 2% Base Term Year 4 Year 4 $267,265 2% Base Term Year 5 Year 5 $272,611 2% Base Term Year 6 Year 6 $278,063 2% Base Term Year 7 Year 7 $283,624 2% Base Term Year 8 Year 8 $289,296 2% Base Term Year 9 Year 9 $295,082 2% Base Term Year 10 Year 10 $300,984 2% Base Term Year 11 Year 11 $307,004 2% Base Term Year 12 Year 12 $313,144 2% Base Term Year 13 Year 13 $319,407 2% Base Term Year 14 Year 14 $325,795 2% Base Term Year 15 Year 15 $332,311 2% Base Term Year 16 Year 16 $338,957 2% Base Term Year 17 Year 17 $345,736 2% Base Term Year 18 Year 18 $352,651 2% Base Term Year 19 Year 19 $359,704 2% Base Term Year 20 Year 20 $366,898 2% First Option- Year 1 Year 21 $374,236 2% First Option- Year 2 Year 22 $381,721 2% First Option- Year 3 Year 23 $389,355 2% First Option- Year 4 Year 24 $397,142 2% First Option- Year 5 Year 25 $405,085 2% Second Option- Year 1 Year 26 $413,187 2% Second Option- Year 2 Year 27 $421,450 2% Second Option- Year 3 Year 28 $429,879 2% Second Option- Year 4 Year 29 $438,477 2% ** Annual Rental Adjustment: The lesser of (i) 2% or (ii) 1.25 times the change in the Price index Art Van Furniture Mount Pleasant, PA 3

7 LEASE ABSTRACT THE SCOTTDALE BANK & TRUST CO HERBALICIOUS 14 PARKING SPACES INCLUDED ON SITE KEY BANK JOE S POOLS & SPAS W MAIN STREET (TRAFFIC COUNT: 10,285 VPD) SPOOKED WHEELZ HAYDEN S PHARMACY TENANT RESPONSIBILITY DETAIL Maintenance Utilities Taxes Insurance Lessee, at its sole cost and expense is responsible for keeping all of the building, structures and improvements on the property in good order and repair. Lessee shall make all necessary structural, non-structural, exterior and interior repairs and replacements to the building. Lessee shall contract, in its own name, for and pay when due all charges for the connection and use of water, gas, electricity, telephone, garbage collection, sewer use and all other utilities supplied to the premises. Lessee shall pay all taxes and assessnents of every type imposed upon the property. Lessee, at Lessee's expense, at all times during the Term of the Lease, will procure, maintain and keep in force commercial general liability insurance, a cause of loss (special form insurance), workers' compensation and employers liability insurance, business interruption insurance, automobile liability insurance, and comprehensive boiler and machinery insurance. Art Van Furniture Mount Pleasant, PA 4

8 TENANT PROFILE Representative Photo Art Van Furniture ( AVF ) was founded in 1959 in Detroit by Mr. Van Elslander. His founding philosophy was to provide the community with quality furniture at great prices, with always high standards of customer service. Art Van Furniture transitioned to private equity sponsorship in March 2017 through Thomas H. Lee Partners ( THL ) investment. With 61 full-line showrooms, including 15 franchised locations, plus operates across the consumer value spectrum and through multiple store formats, including a deep discount format called the Clearance Center and a premium store-within-a-store. In November of 2017 Art Van Furniture acquired Levin and Wolf Furniture making them one of the top ten furniture retailers in the country and added 35 stores to its brand. With this acquisition, Art Van now operates 176 stores, including 18 franchise stores in nine states with $1.3 billion in expected annual sales. The companies will add 1,900 new employees to Art Van s current 3,600 employees to bring the total to 5,500. Art Van Furniture Mount Pleasant, PA 5

9 Thomas H. Lee Partners ( THL ) founded in 1974 is one of the world s oldest and most experienced private equity firms. Since THL was founded they have raised over $22 billion of equity capital and invested in more than 140 portfolio companies with an aggregate value of over $150 billion. THL invests in growth oriented businesses that are headquartered primarily in North America and specialize in four sectors: Business & Financial Services Consumer & Retail Healthcare & Media Information Services & Technology THL partners with portfolio company management to identify and implement operational and strategic improvements to accelerate sustainable revenue and profit growth. They strive to build great companies of lasting value and generate superior investment returns. Representative Photo THL s deep industry knowledge and relationships allow them to make informed decisions quickly and contribute as owner/operators, not just passive capital providers. They seek to support portfolio company management teams with financing, merger & acquisitions and structuring capabilities as well as operational expertise. Their investor base includes some of the world s leading public and corporate pension funds, sovereign wealth funds, financial institutions, endowments and high net worth families. Representative Photo THL views the long-standing relationships they have with their investors as an important cornerstone of their business model. In the last eight years, THL s investors have committed more than $2.1 billion in co-investments, and their principals have committed $335 million of their own capital to invest alongside THL s limited partners in their last two funds. Art Van Furniture Mount Pleasant, PA 6

10 INVESTMENT MERITS Actual Property Photo ATTRACTIVE PRICING AVF also uses its scale advantages to negotiate attractive discounts with suppliers, which it will pass on to Levin and Wolf customers in the form of highly competitive prices, driving sales. MULTIPLE IN-STORE FORMATS AVF segments its stores between Showroom, Clearance Center, PureSleep bedding aisle, Art Van Flooring, and the high-end Scott Shuptrine Interiors. AVF also advertises these different formats separately; allowing the brand to reach multiple audiences. ECOMMERCE SALES AVF is developing a world-class ecommerce platform and digital in-store support. AVF will leverage this investment in Levin and Wolf markets, which will drive traffic to their stores and enhance their ability to compete across multiple channels. CONTIGUOUS GEOGRAPHIC EXPANSION Opportunity to accelerate AVF s plans for contiguous geographic expansion in new markets by partnering with market leaders in the Mid-Atlantic, and simultaneously expand into attractive new markets to eliminate strong competitors. AVF HAS SUBSTANTIAL SCALE IN THE MIDWEST, RANKING #1 IN FURNITURE STORES, WHICH IT USES TO SUPPORT A LARGE, BEST-IN- CLASS IN-STOCK ASSORTMENT AND NEXT-DAY DELIVERY. Art Van Furniture Art Van Furniture Mount Pleasant, Wexford PA 7

11 LOCATION OVERVIEW NORTH FAYETTE PITTSBURGH CBD 376 DELMONT MOUNT LEBANON MILES GREENSBURG MCMURRAY 43 ELIZABETH NEW STANTON 12 MILES SETON HILL UNIVERSITY ENROLLMENT: 1,500 + EMPLOYEES: 3, Located approximately 40 miles west of Pittsburgh, Mt. Pleasant enjoys superior access to major highways such as the Pennsylvania Turnpike allowing convenient access to major MSAs on the East Coast. Additionally, Mt. Pleasant is located within 30 miles from three Amtrak stations and 60 miles from Pittsburgh International Airport which provides national transit. 5 MILE RADIUS DEMOGRAPHICS 2010 Population Census 29, Population Estimate 28, Average Household Income $60,378 The Property is located on Main Street, the main thoroughfare in the town and is located within three miles off the PA Turnpike. Mt. Pleasant is located approximately 12 miles from Seton Hill University which has a student body of 1,500 students and offers 80 undergraduate degree programs and is one of the largest employers in the area Median Household Income $49,327 Art Van Furniture Mount Pleasant, PA 8

12 IMMEDIATE TRADE AREA W MO REW OO T DS MA IN ST R T REE EET (T R AFF IC C OU NT : 10,28 5V PD ) RAMSAY ELEMENTARY SCHOOL EXCELA HEALTH FRICK HOSPITAL A r t Va n F u r n i t u r e M o u n t P l e a s a n t, PA 9

13 MARKET AERIAL MILE RADIUS A r t Va n F u r n i t u r e M o u n t P l e a s a n t, PA 10

14 DEMOGRAPHICS Actual Property Photo POPULATION BY RACE 1 MILE 3 MILE 5 MILE White 96.70% 96.62% 97.24% Black/African American 1.36% 1.10% 0.79% American Indian/ Alaskan Native 0.12% 0.13% 0.11% Asian 0.36% 0.47% 0.35% Native Hawaiian/ Pacific Islander 0.02% 0.03% 0.02% Some Other Race 0.26% 0.23% 0.24% Two or More Races 1.19% 1.43% 1.26% POPULATION GROWTH Historical Growth: 2010 to 2017 Projected Growth: 2017 to 2022 POPULATION 1 MILE 3 MILE 5 MILE -1.51% -2.32% -2.72% -0.85% -1.27% -1.38% 1 MILE 3 MILE 5 MILE 2010 Census 6,547 12,324 29, Estimate 6,448 12,038 28, Projection 6,393 11,885 27,852 HOUSEHOLDS 1 MILE 3 MILE 5 MILE 2010 Census 2,924 5,378 12, Estimate 2,960 5,376 12, Projection 2,968 5,359 12,307 HOUSEHOLD GROWTH Historical Growth: 2010 to 2017 Projected Growth: 2017 to 2022 HOUSEHOLD INCOME 2017 Average Income 2017 Median Income 1 MILE 3 MILE 5 MILE 1.23% -0.04% -0.52% 0.27% -0.32% -0.41% 1 MILE 3 MILE 5 MILE $58,979 $60,684 $60,378 $48,460 $49,854 $49,327 AGE BY GENDER 1 MILE 3 MILE 5 MILE Male 3,077 5,763 13,687 Female 3,371 6,275 14,555 Actual Property Photo Art Van Furniture Mount Pleasant, PA 11

15 EXCLUSIVE MARKETING ADVISORS MARC MANDEL STEVE SCHRENK COLER YOAKAM CLAUDIA STEEB BRANDON CHAVOYA Managing Director Director Senior Managing Director Managing Director Managing Director Investment Advisory Investment Advisory Investment Advisory Investment/Financing Advisory Financing Advisor PHILADELPHIA 1700 Market Street Suite 3232 Philadelphia, PA DALLAS 2323 Victory Avenue Suite 1200 Dallas, TX PITTSBURGH 301 Grant Street Suite 1100 Pittsburgh, PA 15219