FOR SALE Multi-Tenant Retail with Upside Potential · Bellevue Reporter, 2015's "Best Salon, Lash Extensions & Place to Buy Beauty Products," by 425 Magazine, 2015's "Best Salon for

Multi-Tenant Retail with Upside Potential6007 244TH STREET SW, MOUNTLAKE TERRACE, WA 98043

FOR SALE

Offering MemorandumCapital Markets | Investment Properties www.gateway-place.com

CBRE, Inc. operates within a global family of companies with many subsidiaries and related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates, including CBRE Global Investors, Inc. or Trammell Crow Company, may have or represent clients who have competing interests in the same transaction. For example, Affiliates or their clients may have or express an interest in the property described in this Memorandum (the “Property”), and may be the successful bidder for the Property. Your receipt of this Memorandum constitutes your acknowledgement of that possibility and your agreement that neither CBRE, Inc. nor any Affiliate has an obligation to disclose to you such Affiliates’ interest or involvement in the sale or purchase of the Property. In all instances, however, CBRE, Inc. and its Affiliates will act in the best interest of their respective client(s), at arms’ length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and its Affiliates will conduct their respective businesses in a manner consistent with the law and all fiduciary duties owed to their respective client(s).

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 the Property.

This Memorandum contains select information pertaining to the Property and the Owner, and does not purport to be all-inclusive or contain all or part of the information which prospective investors may require to evaluate a purchase of the Property. The information contained in this Memorandum has been obtained from sources believed to be reliable, but has not been verified for accuracy, completeness, or fitness for any particular purpose. All information is presented “as is” without representation or warranty of any kind. Such information includes estimates based on forward-looking assumptions relating to the general economy, market conditions, competition and other factors which are subject to uncertainty

and may not represent the current or future performance of the Property. All references to acreages, square footages, and other measurements are approximations. This Memorandum describes certain documents, including leases and other materials, in summary form. These summaries may not be complete nor accurate descriptions of the full agreements referenced. Additional information and an opportunity to inspect the Property may be made available to qualified prospective purchasers. You are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent legal and financial advisors, and carefully investigate the economics of this transaction and Property’s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK.

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 at any time with or without notice to you. All offers, counteroffers, and negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have any legal commitment or obligation except as set forth in a fully executed, definitive purchase and sale agreement delivered by the Owner.

Your receipt of this Memorandum constitutes your acknowledgement that (i) it is a confidential Memorandum solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property, (ii) you will hold it in the strictest confidence, (iii) you will not disclose it or its contents to any third party without the prior written authorization of the owner of the Property (“Owner”) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any manner detrimental to the Owner or CBRE, Inc.

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

AFILIATED BUSINESS DISCLOSURE AND CONFIDENTIALITY AGREEMENT

© 2018 CBRE, Inc. All Rights Reserved.

G a t e w a y P l a c e

CONTACT USConstance WildeVice President+1 206 292 [email protected]

TABLE OF CONTENTS

04 Executive Summary

07 Property Description

09 Tenant Highlights

15 Area Overview

21 Financial Overview

25 Sales Comps www.gateway-place.com

EXECUTIVE SUMMARY

O F F E R I N G M E M O R A N D U M 5

G A T E W A Y P L A C E

THE OFFERING91.7% OCCUPIED MIXED COMMERCIAL USE ASSETPresenting the opportunity to acquire a three-tenant retail building. Locatedin Mountlake Terrace, Washington with easy access to Interstate 5 andregional Sound Transit hub.

The building, constructed in 1994, is currently 91.7% leased to GeneJuarez Academy, Juicy Power Yoga and Axis Pharmacy. There are nineyears left on the Gene Juarez lease, and nine and one-half years on theAxis Pharmacy lease. Juicy Power Yoga has a full ten years on their brandnew lease.

OFFERING PRICE $8,895,000

Cap Rate 6.5%

Building Size 32,630 RSF

Year Built 1994

Ownership Fee Simple

Percentage Leased 91.7%

NOI (July 2018 – June 2019) $578,190



+ Recession resistant tenantsGene Juarez Academy thrives in an expanding economyand downturns.Axis Pharmacy provides critical medications to groupfacilities and compounded pharmaceuticals on a dailybasis for customers.Juicy Power Yoga offers warm power yoga classes andstandard yoga classes.

INVESTMENT HIGHLIGHTS

+ Escalating rents in all leasesGene Juarez lease escalates 9% every three years.Shiraz, dba Axis Pharmacy, lease escalates 2.5% annually.Juicy Power Yoga will increase 2% annually.

+ Advantageous LocationLocated at the county line of King and Snohomish Counties with direct access to/from I-5, the main north-south freeway for the PugetSound region.The new Mountlake Terrace Transit Center is estimated to host +557,000 departures and arrivals monthly; and provide parking for900 vehicles. Drivers can pick up buses and light rail that serves Everett to Sea-Tac Airport.

+ Outstanding DemographicsWithin 15 minutes drive time, there are over 468,000 well-educated, upper-middle class residents. Average income of this affluent customer base is $96,041. Additionally there are 172,077 daytime employees.

Available

PROPERTY DESCRIPTION59th Ave W

Studio 6

NE 20

5thSt



PROPERTY SUMMARY

Gateway Place Association

There is a parking and management agreement as part of the original binding siteplan creating the parcels for retail and office uses that is currently administered bythe owners of each parcel. Full management agreement is available in the duediligence folder.

ADDRESS 6607 244th Street SWMountlake Terrace, WA 98026

Total Square Feet 32,630 Rentable Sq. Ft.

Year Built 1994

Construction One-story concrete block, steel frame building

Parking±139 stalls

Over 4 per 1,000 Sq. Ft. rentable area

Acreage ±3.32 Acres (±144,619 Sq. Ft.)

Real Estate Taxes (2018) $72,577.33

Parcel Number 00520500100501

Address per Snohomish County

6007 244th Street. SWMountlake Terrace, WA 98043-5400

Zoning

FT, Freeway Tourist, City of Mountlake Terrace. This allows for a mix of primarily retail, office, and service use with a focus on regionally scaled uses.

Multi-family is allowed as part of a mixed-use development. The property is located in District B, an

area geared toward mixed-uses.

PRICE $8,895,000

Capitalization Rate 6.5%

Price Per Foot $273.00

IRR (leveraged) 13.71%

Gateway Place – approximate parcel line

TENANT HIGHLIGHTS

O F F E R I N G M E M O R A N D U M 1 0


TENANTSGENE JUAREZ ACADEMYGene Juarez Salon & Spas has ten locations throughout the Puget Soundregion. The first Gene Juarez Salon was opened by Mr. Juarez 46 yearsago in 1971 as Seattle’s first fashion salon serving best of class services,artistry and innovative haircutting techniques. Gene Juarez Salon & Spasalso operates two state of the art cosmetology schools. Since 1987Gene Juarez Academy has trained more successful cosmetologyprofessionals than any other school in the Pacific Northwest. GeneJuarez Academy at Gateway Place serves students in the northern part ofthe region and the second location in Federal Way serves the southernoriented students. The Academy which is accredited by the NationalAccrediting Commission of Career Arts and Sciences allows students toapply for Federal and State funding. Some students may go on to workat one of the Gene Juarez Salons.

Voted 2016's "Best Hairstylist" by readers of Seattle magazine, "BestFacial" in KING 5's Best of Western Washington, "Best Salon, and BestManicure and Pedicure," by 425 Magazine, 2016's "Best Salon" by theBellevue Reporter, 2015's "Best Salon, Lash Extensions & Place to BuyBeauty Products," by 425 Magazine, 2015's "Best Salon for Cuts," bySeattle magazine, 2012, 2013 and 2014's "Best Hair Color and 2015'sBest Hair Salon," by KING 5 News viewers, Modern Salon Magazine's"Salon of the Year," "Best Hair Salon in Seattle," by Allure Magazine andInStyle Magazine's "Top Spas in the United States.

Gene Juarez interior photos



Gene Juarez interior photos

GENE JUAREZ ACADEMY



TENANTSJUICY POWER YOGAJuicy Power Yoga is an exciting new addition to the tenant mix and isvery complimentary to the Gene Juarez Academy. They chose thislocation because of the easy access from I-5 and Edmonds. The owner/operator has been a yoga teacher for many years.

She and her husband are a dynamite entrepreneur couple. They alsobuilt and operate two successful restaurants: Azul in Mill Creek TownCenter and Opal in Lynnwood.



Juicy Power Yoga conceptual drawings

JUICY POWER YOGA



TENANTSSHIRAZ, DBA AXIS PHARMACYFor more than a decade Axis Pharmacy has been a trusted communitypharmacy for Long-Term Care, Specialty Pharmaceutical Compoundingand full-service retail products. Axis utilizes specialized packaging knownas “bubble packs” which can assist caregivers in the physician directeddistribution of medications. With multiple options to choose fromincluding our most popular DisPill, singles, weekly, monthly and strippackaging. www.axispharmacynw.com.

Axis Pharmacy interior photos



Axis Pharmacy interior photos

SHIRAZ, DBA AXIS PHARMACY

AREA OVERVIEW

NE 205th StLake Ballinger Way NE (WA 104)

To Lynnwood

To Seattle

Mountlake Terrace

Cinebarre

Transit Station & Future Light Rail Station

Studio 6

Extension of Gateway Blvd. to 236th St SW

Rite Aid

Umpqua Bank

Starbucks

Thriftway

24 HourFitness

56 thAve W

236th St SW236th St SW

The future Terrace Station,a mixed-use retail &

apartment developmentLake

Ballinger



LOCATION HIGHLIGHTSREGIONThe Puget Sound Region is shored up by a diversity of industries andemployers. Manufacturing is still a major contributor to the economicengine. Washington State exports more than any other state. Exportationof airplanes, software and agricultural/lumber products are the primaryproducts and total over $28 billion in state-originated exports. The Portsof Seattle and Tacoma combine to make the Region the second largestUS harbor for container traffic. The Region’s MSA has an estimated 3million people living in King, Pierce and Snohomish Counties.

COUNTYSnohomish County is home to over 18,500 businesses, ranging fromsmall family farms specializing in organic foods, to the world’s largestadvanced manufacturing facility producing state-of art aerospaceequipment. The fifty largest employers account for over 100,000 jobs, orabout 40% of the County’s total employment.

MOUNTLAKE TERRACEA Sound Location - Mountlake Terrace is a small city with big connections.Nestled in the Seattle metropolitan region, the city is a transportation hubwith access to three transit lines. Interstate 5 runs right through the heartof our city giving access to downtown Seattle in 20 minutes or SeaTacInternational Airport in 35 minutes. With so many local amenities andeasy access to those in the surrounding area, Mountlake Terracecontinues to increase in value and attraction in the Puget Sound region.Mountlake Terrace offers urban center access with suburban centervalues.

MOUNTLAKE TERRACE 2017 MAJOR EMPLOYERS

Employer Product/ServiceNumber of Employees

Premera Blue Cross Health Insurance 2,600

Edmonds School District Education 275

City of Mountlake Terrace Government 261

Umpqua Bank Banking 165

Note: This information is from City of Mountlake Terrace website: www.cityofmlt.com

TERRACE STATIONThe new transit-oriented development to be built just north of GatewayPlace has begun preliminary construction on Phase 1 of the project toinclude 60,000 SF of retail and 200± apartment units. Once completethe entire project will have 100,000 SF of retail and up to 600 apartmentunits.



LOCATION HIGHLIGHTSMONTLAKE TERRACE TRANSIT CENTERThe Mountlake Terrace Transit Center opened in 2009. It connects local,commuter, and regional busses serving about 40,000 passengers a day.With capacity for over 1,000 cars, the Transit Center features a five-levelparking garage with 900 spaces, glass elevator, covered bus shelters,bike lockers and racks, ample lighting and closed circuit cameras.

The Mountlake Terrace Transit Center connects via covered pedestrianbridge over the freeway to Sound Transit's Freeway Station located in themedian of Interstate 5.

FREEWAY STATIONThe Sound Transit Freeway Station, located in the Interstate 5 median at236th Street SW, opened for service on Sunday, March 20, 2011.

The facility serves as a connection with the third floor of the MountlakeTerrace Transit Center garage with a covered, concrete pedestrian bridgethat crosses the northbound lanes of I-5. The station features includedirect-access bus bays for northbound and southbound routes; fullyaccessible, weather-protected passenger platforms; attractive benches;and art-enhanced glass walls to minimize freeway noise.

Sound Transit’s Express buses serve Seattle seven days a week. Thestation's unique design allows swift transit access from the freeway to thefacility, enabling transit agencies to run more frequent morning andafternoon peak, and midday and evening, service. Some CommunityTransit routes use the facility, and other Community Transit routes willcontinue to use the agency's adjacent transit center, which housespassenger drop-off areas, bicycle racks and lockers.

LYNNWOOD LINK LIGHT RAIL PROJECTIn November, 2015, the Sound Transit Board of Directors approved theLynnwood Link Extension to bring light rail service to Mountlake Terrace in2023.

Schedule Overview

Early 2016 Final design begins

Mid 2016 Station design public meeting start

Mid 2016-2017 Additional property acquisition confirmed, property owners notifies

2018 Construction begins

Late 2023 Opens for serviceNote: This information is from City of Mountlake Terrace website: www.cityofmlt.com



NE 20

5thSt

To Lynnwood

Extension of Gateway Blvd. to 236th St SW

Transit Station & Future Light Rail Station

236th

St SW

236th

St SW

56th Ave W

Mountlake Terrace

56th Ave W

Umpqua Bank Cinebarre

Studio 6

NE 20

5thSt

Rite Aid

Terrace Station - Phase 1 is 60,000 SF retail and ±200 apartments



REGIONAL RETAIL LOCATIONS



DEMOGRAPHICS3-Mile Radius 15-Minute Drive Time

POPULATION

2017 Estimated Population 135,959 468,989

2022 Projected Population 143,866 502,198

Growth 2017-2022 1.14% 1.38%

Daytime Worker Population 46,595 172,077

INCOME

2017 Est. Average Household Income $93,824 $96,041

2022 Proj. Average Household Income $105,940 $109,158

2017 Per Capita Income $38,410 $39,990

2017 Median Age 41.70 39.10

HOUSING

Average Value of Owner Occupied Units $410,632 $442,255

1 Unit Detached 34,433 107,348

White Collar 47,580 168,484

Blue Collar 11,411 37,498

Services 13,370 43,810

EDUCATION

2017 Estimated Population over 25 98,651 337,988

Bachelor’s Degree and Higher (%) 42.3% 46.1%

Associates Degree and Some College (%) 32.0% 30.5%

High School Diploma (%) 14.9% 14.1%

FINANCIAL OVERVIEW


G A T E W A Y P L A C ERENT ROLL

You are solely responsible for independently verifying the information in this Memorandum. ANY RELIANCE ON IT IS SOLELY AT YOUR OWN RISK.

Market

Square % of Lease Term Rental Rates Recovery Rent Abatements Tenant Leasing Assumption /

Suite Tenant Name Feet Proper ty Begin End Begin Monthly PSF Annually PSF Type Month #% Abated Improvements Commissions Market Rent

A2 SShiraz Specialty Pharmacy 9,202 28.20% Apr-2016 Sep-2026 Current $9,805 $1.07 $117,658 $12.79 - - - - MarketApr-2019 $10,053 $1.09 $120,638 $13.11 Apr-2020 $10,299 $1.12 $123,583 $13.43 Apr-2021 $10,559 $1.15 $126,712 $13.77 Apr-2022 $10,820 $1.18 $129,840 $14.11 Apr-2023 $11,096 $1.21 $133,153 $14.47 Apr-2024 $11,372 $1.24 $136,466 $14.83 Apr-2025 $11,656 $1.27 $139,870 $15.20

A4 GGene Juarez Academy 16,082 49.29% Jun-2012 Dec-2027 Current $28,050 $1.74 $336,596 $20.93 - - - - MarketJan-2019 $30,569 $1.90 $366,830 $22.81 Jan-2022 $33,317 $2.07 $399,799 $24.86 Jan-2025 $36,319 $2.26 $435,822 $27.10

A6 GGene Juarez Academy (Office) 1,304 4.00% Jan-2013 Dec-2027 Current $2,274 $1.74 $27,293 $20.93 - - - - MarketJan-2019 $2,479 $1.90 $29,744 $22.81 Jan-2022 $2,701 $2.07 $32,417 $24.86 Jan-2025 $2,945 $2.26 $35,338 $27.10

B-1 JJuice Power Yoga 3,336 10.22% Jul-2018 Jun-2028 Current $6,950 $2.08 $83,400 $25.00 1-6 50% - - OptionASSUMED Jul-2019 $7,089 $2.13 $85,068 $25.50

Jul-2020 $7,231 $2.17 $86,769 $26.01 Jul-2021 $7,375 $2.21 $88,504 $26.53 Jul-2022 $7,523 $2.26 $90,272 $27.06 Jul-2023 $7,673 $2.30 $92,074 $27.60 Jul-2024 $7,826 $2.35 $93,908 $28.15 Jul-2025 $7,984 $2.39 $95,810 $28.72 Jul-2026 $8,143 $2.44 $97,711 $29.29 Jul-2027 $8,307 $2.49 $99,680 $29.88

Assumes tenant is in-place as of analysis star t with seller to credit any outstanding downtime, leasing costs and free rent. Tenant has two (2) - f ive (5) year options at continued 2% annual increases and FMV, no less than pr ior rent, respectively.

B-1 JJuice Power Yoga 3,336 10.22% Jul-2028 Jun-2033 FUTURE $8,472 $2.54 $101,664 $30.47 - - - - MarketOPTION Jul-2029 $8,640 $2.59 $103,683 $31.08

Jul-2030 $8,815 $2.64 $105,785 $31.71 Jul-2031 $8,991 $2.70 $107,886 $32.34 Jul-2032 $9,171 $2.75 $110,055 $32.99

Notes:Assumes tenant exercises one (1) - f ive (5) year option with no leasing costs.

B-2 VVACANT (B-2) 2,706 8.29% Feb-2019 Jan-2024 Feb-2019 $5,807 $2.15 $69,680 $25.75 - - - - Market $25.00 NNN (B

TOTALS / AVERAGES 32,630 $47,079 $1.57 $564,947 $18.88

OCCUPIED SqFt 29,924 91.7%VACANT SqFt 2,706 8.3%

TOTAL SqFt 32,630 100.0%

WEIGHTED-AVERAGE LEASE TERM REMAINING: 9.17 YearsWEIGHTED-AVERAGE LEASE TERM LAPSED: 4.20 YearsWEIGHTED-AVERAGE LEASE TERM FROM INCEPTION 13.37 Years

$22.00 NNN (Anchor A6)

NNN (Pharmacy) $18.00 NNN

(Medical)

NNN (VACANT)

NNN (Yoga) 4% BR $25.00 NNN (B

Suites)

NNN (Yoga) 4% BR $25.00 NNN (B

Suites)

NNN (Gene Juarez - Academy) $22.00 NNN

(Anchor A4)

NNN (Gene Juarez Office)


G A T E W A Y P L A C ECASH FLOW PROJECTIONS


F iscal Year Ending - June 30 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Physical Occupancy 95.16% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Overall Economic Occupancy [1] 91.22% 100.00% 100.00% 100.00% 100.00% 99.90% 100.00% 100.00% 99.84% 100.00% 99.90%

Weighted Average Market Rent $19.22 $19.80 $20.39 $21.00 $21.63 $22.28 $22.95 $23.64 $24.35 $25.08 $25.83

Weighted Average In P lace Rent [2] $18.45 $20.63 $20.82 $21.56 $22.30 $22.52 $23.43 $24.21 $24.26 $24.61 $25.10

Total Operating Expenses PSF Per Year $7.09 $7.39 $7.59 $7.83 $8.06 $8.29 $8.55 $8.81 $9.05 $9.30 $9.39

[3]FY 2019

REVENUES $/SF/YRScheduled Base Rent

Gross Potential Rent $19.94 $650,689 $673,255 $679,395 $703,495 $727,735 $735,901 $764,361 $789,898 $793,493 $803,162 $820,286Absorption & Turnover Vacancy (1.21) (39,632) 0 0 0 0 0 0 0 0 0 0Base Rent Abatements (1.17) (38,270) 0 0 0 0 (1,010) 0 0 (1,749) 0 (1,171)

Total Scheduled Base Rent 17.55 572,787 673,255 679,395 703,495 727,735 734,891 764,361 789,898 791,744 803,162 819,115

Expense Reimbursements 6.62 216,022 237,990 243,502 250,895 258,482 265,748 273,875 282,125 289,917 296,088 298,672Free Rent Seller Guarantee 0.64 20,850 0 0 0 0 0 0 0 0 0 0

TOTAL GROSS REVENUE 24.81 809,659 911,245 922,897 954,390 986,217 1,000,639 1,038,236 1,072,023 1,081,661 1,099,250 1,117,787General Vacancy Loss 0.00 0 0 0 0 0 0 0 0 0 0 0

EFFECTIVE GROSS REVENUE 24.81 809,659 911,245 922,897 954,390 986,217 1,000,639 1,038,236 1,072,023 1,081,661 1,099,250 1,117,787

OPERATING EXPENSESCommon Area Expenses (0.78) (25,541) (26,308) (27,099) (27,912) (28,748) (29,610) (30,498) (31,414) (32,356) (33,327) (34,327)Association CAM Expense (0.31) (10,224) (10,531) (10,847) (11,172) (11,507) (11,853) (12,208) (12,574) (12,952) (13,340) (13,740)Repairs & Maintenance (0.49) (16,044) (16,526) (17,021) (17,531) (18,058) (18,600) (19,158) (19,732) (20,324) (20,934) (21,562)Utilities (1.22) (39,736) (40,928) (42,157) (43,421) (44,724) (46,065) (47,447) (48,870) (50,336) (51,847) (53,402)Management Fee (0.87) (28,338) (31,894) (32,301) (33,404) (34,518) (35,022) (36,338) (37,521) (37,858) (38,474) (39,123)Insurance (0.34) (11,036) (11,367) (11,708) (12,059) (12,421) (12,794) (13,178) (13,573) (13,980) (14,400) (14,832)Real Estate Taxes (2.95) (96,335) (99,225) (102,202) (105,268) (108,426) (111,679) (115,029) (118,480) (122,034) (125,695) (123,687)HVAC Maintenance (NR) (0.13) (4,215) (4,342) (4,472) (4,606) (4,744) (4,887) (5,033) (5,184) (5,340) (5,500) (5,665)

TOTAL OPERATING EXPENSES (7.09) (231,469) (241,121) (247,807) (255,373) (263,146) (270,510) (278,889) (287,348) (295,180) (303,517) (306,338)

NET OPERATING INCOME 17.72 578,190 670,124 675,090 699,017 723,071 730,129 759,347 784,675 786,481 795,733 811,449

CAPITAL COSTSTenant Improvements (1.71) (55,744) 0 0 0 0 (18,579) 0 0 (67,027) (116,826) (21,538)Leasing Commissions (0.63) (20,712) 0 0 0 0 (13,210) 0 0 (22,875) (74,781) (15,314)Capital Reserves (0.20) (6,624) (6,823) (7,027) (7,238) (7,455) (7,679) (7,909) (8,147) (8,391) (8,643) (8,902)

TOTAL CAPITAL COSTS (2.55) (83,080) (6,823) (7,027) (7,238) (7,455) (39,468) (7,909) (8,147) (98,293) (200,250) (45,754)

OPERATING CASH FLOW $15.17 $495,110 $663,301 $668,063 $691,779 $715,616 $690,661 $751,438 $776,528 $688,188 $595,483 $765,695

ACQUISITION & RESIDUAL SALEAcquisition Cost ($8,895,231) 0 0 0 0 0 0 0 0 0 0 AAll CashNet Residual Value [[4] 0 0 0 0 0 0 0 0 0 0 10,780,680 IIRR

CASH FLOW BEFORE DEBT ($8,895,231) $495,110 $663,301 $668,063 $691,779 $715,616 $690,661 $751,438 $776,528 $688,188 $11,376,163 8.88%

MARKET LOAN [5 ]Loan Funding / Payoff 5,781,900 0 0 0 0 0 0 0 0 0 (4,237,884)Loan Fees (86,729) 0 0 0 0 0 0 0 0 0 0 LLeveragedAnnual Debt Service 0 (395,563) (395,563) (395,563) (395,563) (395,563) (395,563) (395,563) (395,563) (395,563) (395,563) IIRR

CASH FLOW AFTER DEBT ($3,200,059) $99,547 $267,738 $272,500 $296,216 $320,053 $295,098 $355,875 $380,965 $292,625 $6,742,715 13.71%

NOI Return 6.50% 7.53% 7.59% 7.86% 8.13% 8.21% 8.54% 8.82% 8.84% 8.95%

UNLEVERAGED Cash Return 5.57% 7.46% 7.51% 7.78% 8.04% 7.76% 8.45% 8.73% 7.74% 6.69%

LEVERAGED Cash Return 3.11% 8.37% 8.52% 9.26% 10.00% 9.22% 11.12% 11.90% 9.14% 6.25%

Debt Service Coverage Ratio (NOI) 1.46x 1.69x 1.71x 1.77x 1.83x 1.85x 1.92x 1.98x 1.99x 2.01xDebt Service Coverage Ratio (CF) 1.25x 1.68x 1.69x 1.75x 1.81x 1.75x 1.90x 1.96x 1.74x 1.51x

Rolling - All Cash IRR 5.65% 6.88% 8.15% 8.76% 8.70% 9.04% 9.24% 9.08% 8.97% 8.88%Rolling - Leveraged IRR 4.51% 9.21% 12.82% 14.30% 14.06% 14.64% 14.88% 14.41% 14.04% 13.71%

[1] This figure takes into account vacancy/credit loss, absorption vacancy, turnover vacancy, and base rent abatements.[2] This figure does not include any amount related to expense reimbursements. Only Scheduled Base Rent and Fixed/CPI Increases are included in this calculation, which is based on the weighted-average physical occupancy during each fiscal year.[3] Based on 32,630 square feet.[4] Net Residual Value is calculated by dividing Year 11 NOI by the Residual Cap Rate of 7.00% and applying a 7.00% Cost of Sale.[5] Market Debt based on 65% Loan-to-Value, 4.75% Interest Rate, 25-Year Amortization, and 1.50% Loan Fee.



FINANCIAL INFOPROPOSED LOAN SUMMARY

Loan Amount Up to 65% LTV

Amortization 25 Years

Term 10 Years

Interest Rate Range 4.75%

Source Bank or Life Co

CONTACT INFORMATIONDavid StinebaughSenior Vice PresidentCBRE Capital Markets1420 5th Avenue, Floor 17Seattle, WA 98101

+1 206 [email protected]

59th Ave W

Studio 6


SALES COMPSProperty Bldg. Size

Land SizeDate Sold

AgeQuality/

ConditionPrice/

Price Per SFCap Rate Comments

1.Fairwood Shopping Center14230-14276 SE 176th StreetRenton, WA 98058

22,253 SF(2.35 Acres)

1/9/201830 years

Very Good$8,104,867

$364.21Retail (Community Center) building.100% occupied with seven tenants.

2. Andover Plaza200 Andover Park ETukwila, WA 98188

32,116 SF(2.62 Acres)

1/15/201620 years

Good$7,732,250

$240.76Freestanding (Strip Center) building. Renovated in 1975.100% occupied with six tenants.

3.Northgate Retail823-835 NE Northgate WaySeattle, WA 98125

16,450 SF(1.03 Acres)

7/29/201661 Years

Good$8,500,000

$477.204.11%

Freestanding (Strip Center) building. Renovated in 2002.100% occupied with 11 tenants.

4.La Plaza Midway23311-23313 Pacific Hwy SKent, WA 98032

33,613,SF(1.97 Acres)

5/10/201623 years

Excellent$8,759,130

$260.59Two-tenant retail center with Goodwill & Ramirez Brothers Grocery.

5.12475 Totem Lake Blvd NEKirkland, WA 98034

7,600 SF(0.54 Acres)

10/12/2017<1 year

Excellent$9,0500,000$1,190.79

5.40% Tenants include Mattress Firm & MultiCare.

6.Mill Creek Town Center15130 Main StreetMill Creek, WA 98012

15,579 SF(0.70 Acres)

10/24/201613 years

Very Good$7,000,000

$449.325.00%

Retail Storefront (Lifestyle Center) building.100% occupied with four tenants.



SALE COMPS

Property

1.FairwoodShopping Center

2. Andover Plaza

3.Northgate Retail

4.La Plaza Midway

512475 Totem Lake Blvd NE

6.Mill Creek Town Center

2

4

6

1

3 5

Gateway Place6007 244TH STREET SW, MOUNTLAKE TERRACE, WA 98043

FOR SALE

Offering MemorandumCapital Markets | Investment Properties

© 2018 CBRE, Inc. The information contained in this document has been obtained from sources believedreliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes noguarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracyand completeness. Any projections, opinions, assumptions or estimates used are for example only and donot represent the current or future performance of the property. The value of this transaction to you dependson tax and other factors which should be evaluated by your tax, financial and legal advisors. You and youradvisors should conduct a careful, independent investigation of the property to determine to yoursatisfaction the suitability of the property for your needs. Photos herein are the property of their respectiveowners and use of these images without the express written consent of the owner is prohibited. CBRE andthe CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United Statesand other countries. All other marks displayed on this document are the property of their respective owners.

CONTACT US

Constance WildeVice President+1 206 292 [email protected]

www.gateway-place.com

Documents

FOR SALE Multi-Tenant Retail with Upside Potential · Bellevue Reporter, 2015's "Best Salon, Lash Extensions & Place to Buy Beauty Products," by 425 Magazine, 2015's "Best Salon for