$11,300, % Cap Rate. Rent Increases in the Lease! Extremely Rare for Walgreens. DeerfieldPartners

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1 Rent Increases in the Lease! Extremely Rare for Walgreens Walgreens Pharmacy #12067 Orange County, New York $11,300, % Cap Rate 21+ Year NNN with extremely rare rent increases in primary term Store is well positioned at a high traffic crossroads known as the Five Corners intersection of NY 32 and NY 94; over 30,000 cars per day Neighboring tenants include: McDonalds, AutoZone, Advance Auto, Dunkin Donuts, Wendy s, Bank of America, First Niagra Bank, and others... True NNN lease with no management responsibilities Walgreens corporate, investment grade credit guarantees the rent

2 Investment Summary Price $11,300,000 CAP Rate 5.10% Avg. Annual Income $576,399 Years Guaranteed 21+ years Demographic Snapshot Residents Average Income 1 Mile Radius 5,177 $71,197 3 Mile Radius 31,730 $90,148 5 Mile Radius 75,115 $79,367 This is a rare opportunity for an investor to acquire a Walgreens drugstore property with rent increases scheduled in the lease. While 99 out of 100 Walgreens leases are flat for the life of the lease, this deal provides rent increases and some hedge against future inflation. See below for the scheduled rent increases. Rent Schedule (Guaranteed Years) Starts Ends Years Remain Annual NNN Rent Percentage Increase 10/1/2016 9/30/ $552,000 10/1/2017 9/30/ $552,000 10/1/2018 9/30/ $552,000 10/1/2019 9/30/ $552,000 10/1/2020 9/30/ $552,000 10/1/2021 9/30/ $552,000 10/1/2022 9/30/ $578, % 10/1/2023 9/30/ $578,610 10/1/2024 9/30/ $578,610 10/1/2025 9/30/ $578,610 10/1/2026 9/30/ $578,610 10/1/2027 9/30/ $578,610 10/1/2028 9/30/ $578,610 10/1/2029 9/30/ $578,610 10/1/2030 9/30/ $578,610 10/1/2031 9/30/ $578,610 10/1/2032 9/30/ $601, % 10/1/2033 9/30/ $601,257 10/1/2034 9/30/ $601,257 10/1/2035 9/30/ $601,257 10/1/2036 9/30/ $601, Year Avg. Annual Rent $576,399 Asking CAP on Average Rent 5.10% Asking Price $11,300,000 CAP Rate on 2022 Rent 5.12% CAP Rate on 2032 Rent 5.32%

3 Additional Detail on Scheduled Rent Increases Complete Rent Schedule With Option Periods Starts Ends Years Annual NNN Rent Percent Increase Effective CAP Rate Today /1/2016 9/30/ $552, /1/2022 9/30/ $578, % /1/2032 9/30/ $601, % 5.10% Option 1 10/1/2037 9/30/ $625, % 5.13% Option 2 10/1/2042 9/30/ $650, % 5.22% Option 3 10/1/2047 9/30/ $678, % 5.31% Option 4 10/1/2052 9/30/ $708, % 5.42% Option 5 10/1/2057 9/30/ $740, % 5.53% Option 6 10/1/2062 9/30/ $775, % 5.65% Option 7 10/1/2067 9/30/ $813, % 5.78% Option 8 10/1/2072 9/30/ $853, % 5.91% Option 9 10/1/2077 9/30/ $897, % 6.06% Option 10 10/1/2082 9/30/ $957, % 6.23% 71 Year Avg. Annual Rent $703,519 Yield on 71 Year Rent 6.23% Asking Price $11,300,000 Today Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Option 7 Option 8 Option 9 NNN Rent Growth Over 71 Years $552,000 $578,610 $601,257 $625,017 $650,677 $678,391 $708,322 $740,647 $775,558 $813,262 $853,983 $897,961 Option 10 $957,331

4 Property Details and Lease Summary Address 416 Windsor Highway, Vails Gate, NY Year Built 2012 Building Size 14,550 Square Feet Lot Size 1.75 acres Tenant Walgreens (NASDAQ:WBA) Rent Start Date October 15, 2012 Lease End Date October 31, 2087 Options to Terminate Tenant may terminate every five (5) years, with 12 months notice, after the 300th month (October 31, 2037). Store is well positioned amidst retail on high-traffic arterial road

5 Limited Drugstore Competition in Vails Gate With Walgreens pending acquisition of Rite Aid, investors are looking closely at the competitive landscape in each local market prior to making purchase decisions. In this case, an investor can confidently presume that the subject Walgreens will remain open and operating. Looking at the map below, you can see that the subject Walgreens is a superior location to the Rite Aid down the street. In fact, the Rite Aid isn t even a corner location. We d expect the Rite Aid to be closed in this market.

6 Store Front Five Corners Intersection

7 Photos of Neighboring Retailers

8 Site Plan

9 About Walgreens Boots Alliance Walgreens Boots Alliance is the first global pharmacy-led, health and wellbeing enterprise in the world. Our purpose is to help people across the world lead healthier and happier lives. Walgreens Boots Alliance was created through the combination of Walgreens and Alliance Boots in December This transaction brought together two leading companies with iconic brands, complementary geographic footprints, shared values and a heritage of trusted healthcare services through pharmaceutical wholesaling and community pharmacy care, dating back more than 100 years. The Company, with a presence in more than 25 countries, employs over 370,000 people and is the largest retail pharmacy, health and daily living destination in the USA and Europe. The Company s size, scale, and expertise will help us to expand the supply, and address the rising cost of, prescription drugs in the USA and worldwide. By leveraging these advantages and opportunities, as well as the full benefit of our best practices and expertise, Walgreens Boots Alliance will be positioned to create substantial incremental efficiency, synergy and growth opportunities. The creation of Walgreens Boots Alliance provides an opportunity to further accelerate the development of a fully integrated, global platform for the future to provide innovative ways to address health and wellness challenges. Our Company is well positioned to expand customer offerings in existing markets and become the health and wellbeing partner of choice in emerging markets.

10 Walgreens Boots Alliance -- Segment Structure Walgreens Boots Alliance Segment Structure A leading drugstore chain in the USA The largest retail pharmacy chain in Europe A leading global pharmaceutical wholesaler and distributor The first global pharmacy-led, health and wellbeing enterprise in the world 8

11 Walgreens Boots Alliance -- Retail Pharmacy USA Division The Retail Pharmacy USA Division s principal retail pharmacy brands are Walgreens and Duane Reade. Together, they form the largest drugstore chain in the USA. This Division operates 8,240 drugstores in 50 states, the District of Columbia, Puerto Rico and the US Virgin Islands. As of August 2014, approximately 76% of the population of the USA lives within five miles of a Walgreens. The company sells prescription and non-prescription drugs, as well as general merchandise, including household items, convenience and fresh foods, personal care, beauty care, photofinishing and candy. They provide customers with convenient, omni-channel access to consumer goods and services, pharmacy, and health and wellness services in communities across America. The company s websites, which include Walgreens.com and drugstore.com, receive an average of approximately 60 million visits per month. Integrated with an e-commerce platform, the Walgreens mobile application allows customers to refill prescriptions through scan technology, receive text messages alerting when a refill is due and other front-end functionality, such as photo and shopping features. Prescription drugs account for 64 percent of sales, while retail products are 36 percent. Overall, WBA filled approximately 699 million prescriptions in Q15 Financial Performance Retail Pharmacy U 3Q15 Financial Performance Retail Pharmacy USA GAAP $ million Total Sales $20,425 Gross Profit $5,527 SG&A $4,494 Operating Income $1,033 Operating Margin 5.1% Non-GAAP* $ million Adjusted Gross Profit $5,596 Adjusted SG&A $4,268 Adjusted Operating Income $1,328 Adjusted Operating Margin 6.5%

12 Item 1B. Unresolved Staff Comments There are no unresolved written comments that were received from the SEC Staff 180 days or more before the end of our fiscal year relating to our periodic or current reports under the Securities Exchange Act of Walgreens Properties Nationwide Item 2. Properties The Company s locations, including drugstores, infusion and respiratory service facilities, specialty pharmacies and mail service facilities at August 31, 2014 and 2013 are listed below Alabama Louisiana Oklahoma Alaska 8 7 Maine Oregon Arizona Maryland Pennsylvania Arkansas Massachusetts Rhode Island California Michigan South Carolina Colorado Minnesota South Dakota Connecticut Mississippi Tennessee Delaware Missouri Texas District of Columbia 6 5 Montana Utah Florida Nebraska Vermont 3 4 Georgia Nevada Virginia Hawaii New Hampshire Washington Idaho New Jersey West Virginia Illinois New Mexico Wisconsin Indiana New York Wyoming Iowa North Carolina Guam 0 1 Kansas North Dakota 1 1 Puerto Rico Kentucky Ohio U.S. Virgin Islands 1 0 TOTAL 8,309 8,582 The Company owned approximately 20% of its retail drugstore locations and leased the remaining locations at August 31, The leases are for various terms and periods. See Note 3 to the Company s Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. Net retail selling space remained consistent at 89 million square feet at August 31, 2014 and Approximately 20% of Company stores have been opened or remodeled during the past five years, including our Well Experience store format in over 700 locations, including a market-wide transformation in the Indianapolis area and new flagship stores in select markets including Boston, Chicago, Los Angeles, New York City, San Francisco, Washington, D.C., Las Vegas and Puerto Rico. As of August 31, 2014: The Company s retail store operations were supported by 19 major distribution centers with a total of approximately 11 million square feet of space, of which 13 locations are owned. The remaining space is leased. All distribution centers are served by modern systems for order processing control and rapid merchandise delivery to stores. In addition, the Company uses public warehouses and third party wholesalers to handle certain distribution needs. As of August 31, 2014, AmerisourceBergen distributed substantially all of the Company s branded and generic pharmaceutical products. The Company operated 34 principal office facilities containing approximately three million square feet, of which 13 locations were owned. The Company operated two mail service facilities containing approximately 237 thousand square feet, one of which was owned. The Company owned 16 strip shopping malls containing approximately 500 thousand square feet.

13 Income Statements Trailing 5 Years

14 Demographics - 1 Mile Radius Trends Demographic and Income Profile Prepared by Esri Ring: 1 mile radius Latitude: Longitude: Annual Rate (in percent) Population Households Families Owner HHs Median HH Income Area State USA Population by Age Percent Household Income 2015 Population by Race $35K - $49K 16.2% $50K - $74K 17.6% $75K - $99K 15.2% $25K - $34K 11.7% $15K - $24K 11.7% <$15K 5.7% $200K+ 2.9% $150K - $199K 3.5% $100K - $149K 15.3% Percent White Black Am. Ind. Asian Pacific Other Two Percent Hispanic Origin: 25.4% Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and March 07, Esri Page 2 of 6

15 Demographics - 1 Mile Radius Demographic and Income Profile Prepared by Esri Ring: 1 mile radius Latitude: Longitude: Summary Census Population 4,967 5,177 5,390 Households 2,022 2,108 2,195 Families 1,271 1,315 1,364 Average Household Size Owner Occupied Housing Units 1,106 1,154 1,208 Renter Occupied Housing Units Median Age Trends: Annual Rate Area State National Population 0.81% 0.42% 0.75% Households 0.81% 0.46% 0.77% Families 0.73% 0.39% 0.69% Owner HHs 0.92% 0.19% 0.70% Median Household Income 2.81% 2.84% 2.66% Households by Income Number Percent Number Percent <$15, % % $15,000 - $24, % % $25,000 - $34, % % $35,000 - $49, % % $50,000 - $74, % % $75,000 - $99, % % $100,000 - $149, % % $150,000 - $199, % % $200, % % Median Household Income $54,842 $62,984 Average Household Income $71,197 $79,854 Per Capita Income $28,326 $31,791 Census Population by Age Number Percent Number Percent Number Percent % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % Census Race and Ethnicity Number Percent Number Percent Number Percent White Alone 3, % 3, % 3, % Black Alone % % % American Indian Alone % % % Asian Alone % % % Pacific Islander Alone 2 0.0% 3 0.1% 3 0.1% Some Other Race Alone % % % Two or More Races % % % Hispanic Origin (Any Race) 1, % 1, % 1, % Data Note: Income is expressed in current dollars. Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and March 07, Esri Page 1 of 6

16 Demographics - 3 Mile Radius Trends Demographic and Income Profile Prepared by Esri Ring: 3 mile radius Latitude: Longitude: Annual Rate (in percent) Population Households Families Owner HHs Median HH Income Area State USA Population by Age Percent Household Income 2015 Population by Race $50K - $74K 17.2% $75K - $99K 15.5% $35K - $49K 12.1% $25K - $34K 8.0% $15K - $24K 6.7% <$15K 5.6% $200K+ 5.4% $150K - $199K 8.4% Percent $100K - $149K 21.0% 0 White Black Am. Ind. Asian Pacific Other Two Percent Hispanic Origin: 18.8% Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and March 07, Esri Page 4 of 6

17 Demographics - 3 Mile Radius Demographic and Income Profile Prepared by Esri Ring: 3 mile radius Latitude: Longitude: Summary Census Population 31,192 31,730 32,514 Households 11,811 12,063 12,381 Families 8,201 8,326 8,519 Average Household Size Owner Occupied Housing Units 8,582 8,669 8,848 Renter Occupied Housing Units 3,229 3,394 3,534 Median Age Trends: Annual Rate Area State National Population 0.49% 0.42% 0.75% Households 0.52% 0.46% 0.77% Families 0.46% 0.39% 0.69% Owner HHs 0.41% 0.19% 0.70% Median Household Income 2.15% 2.84% 2.66% Households by Income Number Percent Number Percent <$15, % % $15,000 - $24, % % $25,000 - $34, % % $35,000 - $49,999 1, % 1, % $50,000 - $74,999 2, % 1, % $75,000 - $99,999 1, % 2, % $100,000 - $149,999 2, % 2, % $150,000 - $199,999 1, % 1, % $200, % % Median Household Income $75,341 $83,777 Average Household Income $90,148 $102,107 Per Capita Income $34,238 $38,822 Census Population by Age Number Percent Number Percent Number Percent 0-4 1, % 1, % 1, % 5-9 2, % 2, % 1, % , % 2, % 2, % , % 2, % 1, % , % 1, % 1, % , % 3, % 4, % , % 4, % 4, % , % 4, % 4, % , % 4, % 4, % , % 2, % 3, % , % 1, % 1, % % % % Census Race and Ethnicity Number Percent Number Percent Number Percent White Alone 24, % 24, % 23, % Black Alone 2, % 3, % 3, % American Indian Alone % % % Asian Alone % 1, % 1, % Pacific Islander Alone % % % Some Other Race Alone 1, % 1, % 2, % Two or More Races 1, % 1, % 1, % Hispanic Origin (Any Race) 5, % 5, % 7, % Data Note: Income is expressed in current dollars. Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and March 07, Esri Page 3 of 6

18 Demographics - 5 Mile Radius Trends Demographic and Income Profile Prepared by Esri Ring: 5 mile radius Latitude: Longitude: Annual Rate (in percent) Population Households Families Owner HHs Median HH Income Area State USA Population by Age Percent Household Income $50K - $74K 17.7% $35K - $49K 12.2% $25K - $34K 9.3% $15K - $24K 8.4% $75K - $99K 13.5% $100K - $149K 17.1% <$15K 10.4% $200K+ 4.5% $150K - $199K 6.9% 2015 Population by Race Percent White Black Am. Ind. Asian Pacific Other Two Percent Hispanic Origin: 30.8% Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and March 07, Esri Page 6 of 6

19 Demographics - 5 Mile Radius Demographic and Income Profile Prepared by Esri Ring: 5 mile radius Latitude: Longitude: Summary Census Population 74,362 75,115 76,550 Households 25,725 26,021 26,549 Families 18,121 18,226 18,538 Average Household Size Owner Occupied Housing Units 15,560 15,567 15,778 Renter Occupied Housing Units 10,165 10,455 10,771 Median Age Trends: Annual Rate Area State National Population 0.38% 0.42% 0.75% Households 0.40% 0.46% 0.77% Families 0.34% 0.39% 0.69% Owner HHs 0.27% 0.19% 0.70% Median Household Income 3.12% 2.84% 2.66% Households by Income Number Percent Number Percent <$15,000 2, % 2, % $15,000 - $24,999 2, % 1, % $25,000 - $34,999 2, % 2, % $35,000 - $49,999 3, % 3, % $50,000 - $74,999 4, % 4, % $75,000 - $99,999 3, % 3, % $100,000 - $149,999 4, % 5, % $150,000 - $199,999 1, % 2, % $200,000+ 1, % 1, % Median Household Income $61,216 $71,373 Average Household Income $79,367 $90,213 Per Capita Income $27,698 $31,484 Census Population by Age Number Percent Number Percent Number Percent 0-4 5, % 5, % 5, % 5-9 5, % 5, % 5, % , % 5, % 5, % , % 5, % 5, % , % 5, % 4, % , % 9, % 10, % , % 9, % 10, % , % 10, % 9, % , % 8, % 9, % , % 5, % 6, % , % 2, % 3, % 85+ 1, % 1, % 1, % Census Race and Ethnicity Number Percent Number Percent Number Percent White Alone 47, % 46, % 45, % Black Alone 12, % 13, % 14, % American Indian Alone % % % Asian Alone 1, % 1, % 1, % Pacific Islander Alone % % % Some Other Race Alone 8, % 9, % 10, % Two or More Races 2, % 3, % 3, % Hispanic Origin (Any Race) 21, % 23, % 25, % Data Note: Income is expressed in current dollars. Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and March 07, Esri Page 5 of 6