™

R E T A I L A D V I S O R SOFFERING MEMORANDUM

PEP BOYS 1421 S DAIRY ASHFORD RD, HOUSTON, TX 77077

Matthews Retail Advisors

CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Pep Boys located at 1421 S Dairy Ashford Rd, Houston, TX 77077 (“Property”) . I t has been prepared by Matthews Retai l Advisors . This Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property. I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Retai l Advisors . The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the Property, you agree:

1 . The Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion or manner detr imental to the interest of the Sel ler.

Owner and Matthews Retai l Advisors expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Offer ing Memorandum.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Retai l Advisors or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Offer ing Memorandum.

EXCLUSIVELY LISTED BY:

Table of ContentsPRICING & FINANCIAL ANALYSIS

INVESTMENT OVERVIEW ............................................................ 2INVESTMENT HIGHLIGHTS ......................................................... 2EXECUTIVE SUMMARY .................................................................3COMPANY OVERVIEW ...................................................................4

PROPERTY DESCRIPTIONPHYSICAL DESCRIPTION ..............................................................7BIRDS EYE ........................................................................................ 8REGIONAL MAP .............................................................................. 9TENANT MAP .................................................................................10

DEMOGRAPHICSCITY OVERVIEW | HOUSTON, TX ............................................. 12DEMOGRAPHICS REPORT ......................................................... 13

Mark CohenBroker of Record License No. 447509

Braden CrockettSenior Associate DIRECT +1.310.919.5814 MOBILE +1.714.345.6206 braden.crockett@matthews.com License No. 01946071

Matthews Retail Advisors

™

Pricing & Financial Analysis

Offering Memorandum | Pep BoysP. 2 Matthews Retail Advisors

INVESTMENT OVERVIEW

Investments Highlights• RecentlyAnnouncedthatPepBoysisgoingtobeacquiredandthusundernewmanagement.

• AskingPrice:$2,112,000

• AnnualRent:$132,000

• CapRate:6.25%(Jumpstoa6.88%onJuly18th,2017)

• 5,461buildingonalmosta1AcreLot

• LeaseExpiration:July17th,2022(+6.5YearsRemaining)

• Options:2–5YearOptionwith10%increasesineachoption

• LeaseType:AbsoluteNNN-Nolandlordresponsibilities

• Increases:10%every5thyear

• AverageIncomesExceed$90,000inthe1-MileRadiusand3-MileRadius

• RightbehindaKrogerGroceryStore

• 34,000VehiclesPerDayonSouthDairyAshfordRd

Matthews Retail Advisors P. 3Pep Boys | Offering Memorandum

PRICING ANALYSISEXECUTIVE SUMMARY

PEP BOYS1421 S DAIRY ASHFORD RD HOUSTON, TX 77077

List Price .............................................................................................$2,112,000CAP Rate - Current ...................................................................................6.25%Gross Leasable Area ......................................................................... 5,461 SFLot Size .....................................................................0.97Acres(42,264SF)Year Built ........................................................................................................1997

Annualized Operating DataMonthly Rent Annual Rent Rent/SF CAP Rate

Current - 7/17/2017 $11,000.00 $132,000.00 $24.17 6.25%

Increase 1 - 7/17/2022 $12,100.00 $145,200.00 $26.59 6.88%

Option 1 - 7/17/2027 $13,310.00 $159,720.00 $29.25 7.56%

Option 2 - 7/17/2032 $14,641.00 $175,692.00 $32.17 8.32%

Tenant Summary

Tenant Trade Name Pep Boys

Type of Ownership Fee Simple

Lease Guarantor Corporate

Lease Type NNN

Roof and Structure Tenant Responsible

Original Lease Term 10 years

Lease Commencement Date 7/18/2012

Rent Commencement Date 7/18/2012

Lease Expiration Date 7/17/2022

Term Remaining on Lease +/- 6.5 Yearrs

Increases 10%EveryFiveYears

Options Two(2)-Five(5)YearOptions

Offering Memorandum | Pep BoysP. 4 Matthews Retail Advisors

COMPANY OVERVIEW

ThePepBoys:Manny,Moe&Jack,(brandedasandcommonlyabbreviated as Pep Boys) is a full-service and tire automotiveaftermarket chain.The first store, originally named Pep Auto Supplies, was founded in Philadelphia, Pennsylvania in 1921 by Emanuel(Manny)Rosenfeld,MauriceL.(Moe)Strauss,W.Graham(Jack) Jackson, andMoeRadavitz.Currently headquartered inthe Allegheny West section of Philadelphia, Pep Boys operates more than 800 stores and approximately 7,000 service bays in 35 states and Puerto Rico. Along with its full-service vehicle maintenance and repair capabilities, the company also serves the commercial auto parts delivery market. It is one of the leading sellers of replacement tires in the United States, and in 2005 was named one of the 500 fastest-growing U.S. companies. It operates service locations that offer a range of automotive maintenance and repair services; and install tires, parts, and accessories. The company sells new and remanufactured parts for vehicles; chemicals and maintenance items; fashion, electronic, and performance accessories; and nonautomotive merchandise.

Property Name Pep Boys

Gross Leasable Area 5,461 SF

Property Type Net Leased Auto Service

Parent Company Trade Name Pep Boys

Ownership Public

Credit Rating B

Rating Agency Standard & Poor’s

Revenue $2.09Billiom

Net Income $13.16Million

Stock Symbol PBY

Board NYSE

No. of Locations 800+

No. of Employees 18,000

Headquartered Philadelphia, PA

Web Site www. pepboys.com

Year Founded 1921

Property Description™

Offering Memorandum | Pep BoysP. 6 Matthews Retail Advisors

Matthews Retail Advisors P. 7Pep Boys | Offering Memorandum

PROPERTY DESCRIPTIONPHYSICAL DESCRIPTION

THE OFFERING

Property Name .........................................................................................Pep Boys

Property Address ......................................................... 1421 S Dairy Ashford Rd

Houston, TX 77077

Assessor’s Parcel Number ....................................................118-283-001-0005

SITE DESCRIPTION

Number of Stories .............................................................................................One

Year Built ............................................................................................................. 1997

GrossLeasableArea(GLA) .....................................................................5,461 SF

Lot Size..............................................................................0.97Acres(42,264SF)

Type of Ownership ...............................................................................Fee Simple

Parking ..................................................................................... 44 Surface Spaces

Parking Ratio.................................................................................. 8.06 : 1,000 SF

Landscaping ........................................................................................Professional

Topography ................................................................................... Generally Level

CONSTRUCTION

Foundation .......................................................................................Concrete Slab

Framing .............................................................................................................Wood

Exterior ............................................................................................................... Brick

Parking Surface ............................................................................................Asphalt

Roof ........................................................................................................................Flat

Offering Memorandum | Pep BoysP. 8 Matthews Retail Advisors

BIRDS EYE

S Dairy A

shford Rd CPD

: 36,00

0

Matthews Retail Advisors P. 9Pep Boys | Offering Memorandum

PROPERTY DESCRIPTIONREGIONAL MAP

Offering Memorandum | Pep BoysP. 10 Matthews Retail Advisors

TENANT MAP

3-mileAverageHouseholdIncome:$9l,000+

Demographics™

Offering Memorandum | Pep BoysP. 12 Matthews Retail Advisors

DEMOGRAPHIC ANALYSISCITY OVERVIEW | Houston, TX

Houston exudes a cosmopolitan and down-home vibe. The style-savvy residents of the country’s fourth-largest city and third-largest county know that there’s no place quite like Houston. With more than 2.2 million residents, the city attracts visitors and transplants with a wonderful mix of world-class arts,boomingbusiness,prosportsandaward-winningcuisine.Justlastyear,thecitylandedonsev-eral “best of” lists, including the Travel + Leisure roundup of America’s Favorite Cities and the Hotwire.com index of most affordable U.S. vacation destinations.

Take the food, for example. Countless cutting-edge chefs have made a home in Houston, where diners eat out more than residents of any other city. Houston is considered to have one of the best culinary scenes in the country, with cuisine from around the world. There are more than 10,000 restau-rants in the Houston area with culinary choices that represent more than 70 countries and American regions.Here,you’llfindJamesBeardAwardwinnersandinternationallyrenownedchefsservingupinnova-tive cuisine that frequently catches the attention of foodies in Bon Appetit, Food & Wine and Saveur.

But the stylish dining scene is only a slice of Houston’s epicurean offerings—a fact that the city’s cu-linary masterminds intend to prove with the Houston Culinary Tours. Each of the intimate, 16-person, chef-led tours aim at showing the underbelly of the city’s food scene—one taco truck and ethnic mar-ket at a time.

Not surprisingly, businesses also recognize the allure of Houston’s offerings. Twenty-five companies on the Fortune 500 list call the Energy Capital of the World home. Aeronautic research is unsur-passed at NASA headquarters and Texas Medical Center remains the largest in the world with 47 highly lauded research and treatment institutions. With more than 4.4 million square feet of conven-tion space, metro Houston ranks at the top of American cities when comparing convention venues. In 2014, Houston hosted 364 conventions, events and shows that drew 774,152 attendees to Houston, translatingintoaneconomicimpactof$485million,basedonattendance.

The city is also set to host the NCAA Final Four in 2016 and the NFL’s Super Bowl LI in 2017.

Matthews Retail Advisors P. 13Pep Boys | Offering Memorandum

DEMOGRAPHIC ANALYSISDEMOGRAPHICS REPORT

Population 1-Mile 3-Mile 5-Mile2020 Projection 21,900 161,022 365,1882015 Estimate 20,835 150,977 343,2292010 Census 19,815 140,933 321,3582000 Census 17,911 122,934 281,986Growth 2000-2010 10.63% 14.64% 13.96%Growth 2010-2015 5.15% 7.13% 6.81%Growth 2015-2020 5.11% 6.65% 6.40%

Households 1-Mile 3-Mile 5-Mile2020 Projection 10,508 71,006 144,7672015 Estimate 9,945 66,531 136,0342010 Census 9,397 62,065 127,4532000 Census 8,498 54,714 114,300Growth 2000-2010 10.59% 13.44% 11.51%Growth 2010-2015 5.82% 7.20% 6.73%Growth 2015-2020 5.67% 6.73% 6.42%

Income 1-Mile 3-Mile 5-Mile$0-$15,000 9.52% 10.04% 11.93%$15,000-$24,999 9.47% 9.40% 10.76%$25,000-$34,999 9.90% 9.81% 11.87%$35,000-$49,999 12.84% 13.32% 14.99%$50,000-$74,999 15.94% 16.92% 16.55%$75,000-$99,999 13.17% 10.88% 10.02%$100,000-$124,999 8.42% 7.74% 6.73%$125,000-$149,999 5.56% 5.70% 4.47%$150,000-$199,999 6.31% 6.54% 4.84%$200,000-$249,999 2.75% 2.96% 2.15%$250,000-$499,999 4.38% 4.75% 3.74%$500,000+ 1.74% 1.96% 1.95%

2015 Est. Average Household Income $89,991 $91,548 $81,386

2015 Est. Median Household Income $62,964 $60,986 $50,690

Matthews Retail Advisors | 841 Apollo Street, Suite 150 | El Segundo, CA 90245 | www.Matthews.com

PEP BOYS1421 S Dairy Ashford RdHouston, TX 77077Offering Memorandum

™

Mark CohenBroker of Record License No. 447509

Braden CrockettSenior Associate DIRECT +1.310.919.5814 MOBILE +1.714.345.6206 braden.crockett@matthews.com License No. 01946071