Wilson Center Mall - Strip Center

ACO Commercial Realty, Inc. • 2502 N. Clark Street • Suite 200 • Chicago, IL 60614O: 312-638-9950 • F: 312-546-4776 www.acocommercial.com

419 W. Lincoln Highway, Chicago Heights, Illinois

OFFERING MEMORANDUM

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INVESTMENT SUMMARY

MARKET OVERVIEW AND LOCATOR MAP

AREA HIGHLIGHTS AND RETAIL MAP

PROPERTY DESCRIPTION

AERIAL MAP

CURRENT RENT ROLL

CURRENT INCOME STATEMENT

PROFORMA INCOME STATEMENT

SALES COMPARABLES

COSTS TO STABILIZE

VALUE MATRICES

DEMOGRAPHIC INFORMATION

CONFIDENTIALITY AGREEMENT

ACO Commercial is pleased to offer, for sale, 419 W. Lincoln Highway in Chicago Heights, Illinois, a retail center comprised of two improved buildings that contain a total of 29,670 Square feet of Gross Leaseable Area (GLA), set on a land site totaling 98,931 SF. The two buildings were constructed in 1975, and are separated by a large, paved parking lot. The center is currently 57% occupied by a total of nine tenants. The site is zoned B-2 – Limited Business Service District, and is located approximately 24 miles south of the Chicago CBD. Currently the property is secure and professionally managed. This lender-owned asset has high vacancy and deferred maintenance.

AGENCY DISCLOSURE: Prospective purchasers are hereby notified that ACO Commercial Realty, Inc., through Edward Bluemel, is acting as an agent of the seller of the property, and any information given by prospective purchasers to ACO Commercial Realty, Inc. may be disclosed to the seller.©2018 ACO Commercial Realty, Inc. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

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419 W. LINCOLN HIGHWAY

TA B L E O F C O N T E N T S

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The Subject property consists of two freestanding buildings: one single-story building and one two-story building, situated on a two-acre site which includes an asphalt parking lot containing 113 spaces. The buildings are divided into 14 tenant suites ranging from 1,130 SF to 4,100 SF, and are constructed of concrete block and aluminum siding.

Building #1 is a one-story building constructed on a concrete slab consisting of 9,987 SF. Building #2 is a partial one-story and partial two-story building constructed on a concrete slab consisting of 23,502 SF.

The subject property is being offered at a 6.42% cap rate on current income and at a 10.48% cap rate on projected proforma net operating income. As current lease rents escalate and with the execution of new leases, a buyer can expect annual returns to exceed 12.0%.


I N V E S T M E N T S U M M A R YOffering Summary

Price $1,295,000

Current NOI $83,097

Current Cap Rate 6.42%

Gross Leasable Area (GLA) 29,670

Price/SF $43.65

Proforma NOI $181,463

Costs to Stabilize $435,738

Total Cost Basis $1,730,738

Proforma Cap Rate 10.48%

Year Built 1975

Parking 3.8/1,000 SF of GLA

Lot Size 2.27 Acres

Stabilized FinancingLoan Amount $1,211,516

Down Payment $519,221

Loan Type Proposed New

Interest Rate 5.25%

Term 7 Years

Amortization 25 Years

Loan to Value 70%

DSCR 2.08x

Investment Highlights• 10.48% Proforma Cap Rate (6.42% In Place)

• 57% occupancy provides upside through lease up of vacant space

• Many recent capital improvements

• Several long-term tenants (15+ years)

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Located approximately 24 miles from the Chicago Loop, Chicago Heights in well-positioned on IL Route 30/Lincoln Highway, the area’s only east-west thoroughfare for 10 miles. The area is served by two major expressways, Interstate 57 and IL Route 394, each two miles away.

Chicago Heights and its adjacent submarkets have seen very few relevant transactions take place over the last 24 months. Risk appetite is improving for similarly situated properties. There is a shift from almost exclusively REO inventory to stabilized market rate sales transactions. As financing continues to be more attainable for Class C, multi-tenant retail, we have begun to see more stabilized assets enter the market for sale.

The Chicago Heights submarket was hit particularly hard by the economic downturn. Absorption rates in the far-south suburbs of Chicago have been slow to recover from the recession. Vacancy rates in these submarkets remain double those of the Chicago MSA at 14.3%. As a result, occupancy rates remain flat, and competition for tenants among shopping-center owners has put downward pressure on market rents. The vacancy in the subject property is common for similarly situated assets in this market.

M A R K E T O V E R V I E W

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AREA HIGHLIGHTS

• 79,549 residents within 3 miles.

• Over 30,000 vehicles per day pass Subject property along Lincoln Highway.

• Annual consumer spending exceeds $640 million in 3-mile radius trade area.

• Conveniently located one-half mile from IL Route 1 and equidistant from I-57 and IL Route 394 (2 miles)


R E TA I L M A P

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P R O P E R T Y D E S C R I P T I O N

Address 419 W. Lincoln Highway, Chicago Heights, IL 60411

Site Size 2.27 acres

Offering Type Neighborhood strip center

Ingress/Egress Three total curb cuts located on Lincoln Hwy.

Signage Pylon sign on Lincoln Highway.

Frontage 100% frontage on Lincoln Hwy.

PIN Number(s)

32-19-209-006-0000, 32-19-209-007-0000,32-19-209-008-0000, 32-19-210-005-0000,32-19-210-006-0000, 32-19-210-007-0000,32-19-210-008-0000

Real Estate Taxes (2017) $84,903.69

Zoning B-2, Limited Service Business District

Construction Concrete and steel

Year Built 1975

GLA 29,670 SF

Parking 113 Surface Spaces - 3.8 Spaces/1,000 SF of GLA

Utilities All utilities are in place and available to the site.

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A E R I A L M A P

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R E N T R O L L

Rent Roll

Tenant Unit #(s) SF Base Rent Annual Rent Rent/SF Pro Rata Percentage

Lease Type

LeaseCommencement

Lease Expiration

R&L Management Co. 1 1,300 $2,250 $27,000 $20.77 4.38% Gross 1997 2021Laundromat 2, 3, 4 3,200 $2,000 $24,000 $7.50 10.79% Gross 2017 2027Big Boy Subs 405 1,500 $2,450 $29,400 $19.60 5.06% Gross 1997 2020

Showtime Barber Shop 7 1,980 $1,822 $21,864 $11.04 6.67% Gross 2004 MTMPremium and Enhance Marketing 22-25 2,600 $1,800 $21,600 $8.31 8.76% Gross 1999 MTM

Shane’s Pawn Shop 411-413 2,120 $3,049 $36,588 $17.26 7.15% Gross 1997 2033First Choice Loans/QC Financial

Service 407 1,410 $1,630 $19,560 $13.87 4.75% Gross 2007 MTM

Nail City 409 1,320 $1,175 $14,100 $10.68 4.45% Gross 2006 2023Taste of Orient 415 1,450 $950 $11,400 $7.86 4.89% Gross 2014 MTM

VACANT 5 1,130 $0.00 $0.00 $0.00 3.81% N/AVACANT 8 2,180 $0.00 $0.00 $0.00 7.35% N/AVACANT 21 3,065 $0.00 $0.00 $0.00 10.33% N/AVACANT 6 4,100 $0.00 $0.00 $0.00 13.82% N/AVACANT 417-419 2,315 $0.00 $0.00 $0.00 7.80% N/A

Total 29,670 $17,126 $205,512 $7.51 100%

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C U R R E N T I N C O M E S TAT E M E N T

Real Estate Tax Detail - 201732-19-209-006-0000 $7,048.03

32-19-209-007-0000 $7,971.44

32-19-209-008-0000 $22,873.76

32-19-210-005-0000 $2,210.72

32-19-210-006-0000 $9,880.59

32-19-210-007-0000 $10,459.51

32-19-210-008-0000 $24,459.64

TOTAL $84,903.69

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Proforma Income Statement

Tenant SF of GLA Pro Rata % Rent PSF Monthly Rent

Annual Rent

Big Boy Subs 1,500 5.06% $19.60 $2,450 $29,400 1

First Choice Loans 1,410 4.75% $13.87 $1,630 $19,560 1

Nail City 1,320 4.45% $10.68 $1,175 $14,100 1

Shane's Pawn Shop 2,120 7.15% $17.26 $3,049 $36,588 1

Taste of Orient 1,450 4.89% $7.86 $950 $11,400 1

Showtime Barber Shop 1,980 6.67% $11.04 $1,822 $21,864 1

Laundromat 3,200 10.79% $9.38 $2,500 $30,000 1

R&L Management Co. 1,300 4.38% $20.77 $2,250 $27,000 1

Premium and Enhance Marketing 2,600 8.76% $8.31 $1,800 $21,600 1

NEW TENANT 4,100 13.82% $12.50 $4,271 $51,250 2

NEW TENANT 1,130 3.81% $12.50 $1,177 $14,125 2

NEW TENANT 2,180 7.35% $12.50 $2,271 $27,250 2

NEW TENANT 3,065 10.33% $12.50 $3,193 $38,313 2

NEW TENANT 2,315 7.80% $12.50 $2,411 $28,938 2

Total/Average 29,670 100% $12.52 $17,373 $371,387

Adjustments to Gross Potential IncomeVacancy/Collection Loss 15.00% ($55,708) 2

Effective Gross Income $10.64 $315,679ExpensesReal Estate Taxes ($2.86) ($84,904) 3

Electric ($0.13) ($3,955) 1

Water and Sewer ($0.19) ($5,562) 1

Insurance ($0.38) ($11,269) 1

Repairs and Maintenance ($0.17) ($5,000) 2

Snow Removal ($0.06) ($1,800) 2

Management Fee 5.00% ($0.63) ($18,569) 2

Reserves/Replacements 1.00% ($0.11) ($3,157) 2

TOTAL EXPENSES ($4.52) ($134,216)

NET OPERATING INCOME $181,463

1. Actual figures from owner increased by 3.0%2. ACO Commercial Estimate based on market averages for comparable properties.3. From County website


P R O F O R M A I N C O M E S TAT E M E N T

Proforma Cash FlowGross Potential Income $371,387

Vacancy/Collection Loss ($55,708)

Effective Gross Income $315,679

Total Expenses ($134,216)

Net Operating Income $181,463

Debt Service $87,120

Debt Coverage Ratio 2.08

Net Cash Flow After Debt Service $94,343

Net Cash Flow After Debt Service % 25.40%

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Address 3353-3359 S. Chicago Road, South Chicago Heights

18100-18130 S. Halsted Street, Homewood, IL

1401 Western Ave., Chicago Heights, IL

Sale Date 6/9/17 6/15/16 5/1/18

Sale Price $1,000,000 $1,230,000 $1,250,000

Gross Leasable Area (SF) 16,224 21,000 13,943

Price/SF $61.64 $58.57 $89.65

Cap Rate 8.00% N/A 0.00%

Occupancy 71.0% 52.4% 0.0%

Lot Size (SF) 37,801 54,406 47,480

Year Built / Renovated N/A 1972 1997

Anchor Tenants Aaron’s, Hair Cuttery, and P’s Nail Salon Endodontic and Periodontics Dentists N/A

Description

The buyer was a private real estate investment partnership based in New York City and Los Angeles. Includes 43

parking spaces.

The buyer will occupy 10,000 square feet of the building with their Beauty and Cosmetic store and the expected open date was October 2016. The re-maining 11,000 square feet will continue to be used

by the long term tenant Endodontic and Periodontics Dentists. Includes 63 parking spaces.

Former Walgreens location; includes 66 parking spaces.


C O M PA R A B L E S A L E S

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C O S T S TO S TA B I L I Z E

Occupied 16,880 56.89%Vacant 12,790 43.11%Total 29,670 100.00%

Current Occupancy

Rate Years SF Cost$1.25 5 12,790 $79,938$20.00 12,790 $255,800

$100,000$435,738

Leasing CommissionsTenant Improvement AllowanceRoof / Façade Repairs

Stabilization Costs

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VA LU E M AT R I C E S

Net Operating Income: $181,463

Cap Stabilized Stabilized Costs to Adjusted Adjusted As-‐IsRate Value Value Per Stabilize As-‐Is Value Value Per

Square Foot Square Foot9.07% $2,000,000 $67.41 $435,738 $1,564,330 $52.72

Acquisition Acquisition Costs to Total Cost Total Cost Basis Equity Down Mortgage Debt Service Cash Cash/CashPrice Price Per Stabilize Basis At Per Square Creation Payment (5 Years) 25 YRS Flow Return

Square Foot Stabilization Foot 30% 70% 5.25%$1,400,000 $47.19 $435,738 $1,835,738 $61.87 $164,263 $550,721 $1,285,016 ($92,405) $89,058 16.17%$1,300,000 $43.82 $435,738 $1,735,738 $58.50 $264,263 $520,721 $1,215,016 ($87,371) $94,092 18.07%$1,200,000 $40.44 $435,738 $1,635,738 $55.13 $364,263 $490,721 $1,145,016 ($82,338) $99,125 20.20%$1,100,000 $37.07 $435,738 $1,535,738 $51.76 $464,263 $460,721 $1,075,016 ($77,304) $104,159 22.61%

Value Matrix -‐ Based on Current Leases and Pro Forma NOI

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DEMOGRAPHIC INFORMATION

Radius 1 Mile 3 Mile 5 MilePopulation:2023 Projection 14,597 78,509 173,300

2018 Estimate 14,633 79,200 174,262

2010 Census 14,342 80,618 175,438

White 6,772 39,310 72,994

Black 7,263 36,170 93,812

American Indian and Alaska Native 203 598 885

Asian 82 1,090 2,345

Native Hawaiian and Pacific Islander 10 50 103

Other 303 1,984 4,123

2018 Population by Hispanic Origin 4,335 16,040 22,704

Households:2023 Projection 4,536 28,377 62,889

2018 Estimate 4,549 28,630 63,253

2010 Census 4,468 29,182 63,767

Owner Occupied 2,830 19,547 45,751

Renter Occupied 1,719 9,083 17,501

2018 Avg Household Income $55,767 $71,178 $75,283

2018 Med Household Income $44,888 $53,958 $58,444

2018 Households by Household Inc:Income less than $25,000 1,429 7,433 13,929

Income $25,000 - $50,000 1,182 5,936 13,442

Income $50,000 - $75,000 830 5,070 11,327

Income $75,000 - $100,000 436 3,680 8,794

Income $100,000 - $125,000 411 2,647 5,743

Income $125,000 - $150,000 101 1,284 3,460

Income $150,000 - $200,000 52 1,385 4,003

Income $200,00 + 108 1,195 2,556

Source: CoStar

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This is a confidential memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of 419 W. Lincoln Highway, Chicago Heights, Illinois. This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Owner or the Property, to be all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and ACO Commercial Realty, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. Neither the Owner nor ACO Commercial Realty, Inc., nor any of their respective directors, officers, affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents.

The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived.

By your acceptance and review of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or ACO Commercial Realty, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or ACO Commercial Realty, Inc.

In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner.

If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to ACO Commercial Realty, Inc.

©2018 ACO Commercial Realty, Inc. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

CONFIDENTIALITY AGREEMENTF O R M O R E I N F O R M AT I O N

P L E A S E C O N TA C T:

Edward BluemelVice President312-638-9950 x [email protected]

ACO Commercial Realty, Inc.2502 N. Clark Street Suite 200Chicago, IL 60614O: 312-638-9950www.acocommercial.com

A C O C O M M E R C I A L R E A L T Y , I N C . | 2 5 0 2 N . C L A R K S U I T E 2 0 0 | C H I C A G O , I L 6 0 6 1 4

Wilson Center Mall - Strip Center

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