L AKE E LINORE S CITY CENTER - Jesse Lee Grape St Lake...LAKE ELSINORE CITY CENTER 6 OFFERING SUMMARY LOCATION Lake Elsinore City Center 31500-31660 & 31760-31800 Grape Street Lake

Lake Elsinore, CALa k e eL s i n o r e Ci t y Ce n t e r

Southern California Grocery Anchored Shopping Center

• • • O P E N T O N E W F I N A N C I N G | D E L I V E R E D F R E E & C L E A R O F E X I S T I N G D E B T • • •

LAKE ELSINORE, CALIFORNIAOFFERING MEMORANDUM

2LAKE ELSINORE CITY CENTER

Ed Hanley | [email protected]

949.585.7677BRE License # 01118569

EXCLUSIVELY LISTED BY:

www.hanleyinvestment.com

Bill Asher | Executive Vice [email protected]

949.585.7684BRE License # 01318078

Lake Elsinore, CALa k e eL s i n o r e Ci t y Ce n t e r

Southern California Grocery Anchored Shopping Center

• • • O P E N T O N E W F I N A N C I N G | D E L I V E R E D F R E E & C L E A R O F E X I S T I N G D E B T • • •

The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 3

The information contained herein does not purport to provide a complete or fully accurate summary of the Property or any of the documents related thereto, nor does it purport to be all-inclusive or to contain all of the information which prospective buyers may need or desire. All financial projections are based on assumptions relating to the general economy, competition, and other factors beyond the control of the Owner and Broker and, therefore, are subject to material variation. This Marketing Package does not constitute an indication that there has been no change in the business or affairs of the Property or the Owner since the date of preparation of the information herein. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective buyers.

Neither Owner nor Broker nor any of their respective officers, Agents or principals has made or will make any representations or warranties, express or implied, as to the accuracy or completeness of this Marketing Package or any of its contents, and no legal commitment or obligation shall arise by reason of the Marketing Package or its contents. Analysis and verification of the information contained in the Marketing Package is solely the responsibility of the prospective buyer, with the Property to be sold on an as is, where-is basis without any representations as to the physical, financial or environmental condition of the Property.

Owner and Broker expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the Property and/or terminate discussions with any entity at any time with or without notice. Owner has no legal commitment or obligations to any entity reviewing this Marketing Package or making an offer to purchase the Property unless and until such sale of the Property is approved by Owner in its sole discretion, a written agreement for purchase of the Property has been fully delivered, and approved by Owner, its legal counsel and any conditions to the Owner’s obligations thereunder have been satisfied or waived.

This Marketing Package and its contents, except such information which is a matter of public record or is provided in sources available to the public (such contents as so limited herein called the “Contents”), are of a confidential nature. By accepting this Marketing Package, you unconditionally agree that you will hold and treat the Marketing Package and the Contents in the strictest confidence, that you will not photocopy or duplicate the Marketing Package or any part thereof, that you will not disclose the Marketing Package or any of the Contents to any other entity (except in the case of a principal, who shall be permitted to disclose to your employees, contractors, investors and outside advisors retained by you, or to third-party institutional lenders for financing sought by you, if necessary, in your opinion, to assist in your determination of whether or not to make a proposal) without the prior authorization of the Owner or Broker, and that you will not use the Marketing Package or any of the Contents in any fashion or manner detrimental to the interest of the Owner or Broker.

CONFIDENTIAL OFFERING


TABLE OF CONTENTS

SECTION I

OFFERING SUMMARY Offering Summary 6

Investment Highlights 8

Rent Roll 11

Income & Expense 14

Financing Summary 15

10-Year Cash Flow Analysis 17

10-Year Cash Flow Assumptions 18

Site Plan 20

Parcel Map 21

Aerial Overviews 22

SECTION II

INVESTMENT OVERVIEW Regional Map 27

Tenant Profiles 28

Area Overviews 33

Demographics 37

The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 5SECTION I - OFFERING SUMMARY


OFFERING SUMMARY

LOCATION

Lake Elsinore City Center31500-31660 & 31760-31800 Grape StreetLake Elsinore, CA 92532

OFFERING SUMMARY

Price: $26,280,000

Down Payment: 30% $7,884,000

Net Operating Income: $1,576,777

Capitalization Rate: 6.00%

Cash-on-Cash Return: 9.50%

Net Rentable Area (NRA): 116,801

Price per Square Foot (NRA): $225

Year Built: 1994

Lot Size (Acres): 18.15

FINANCING SUMMARY (SEE PAGE 15 FOR MORE INFORMATION)

The Property will be delivered free and clear of any existing financing. Please see page 15 for more information on available new financing.

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INVESTMENT HIGHLIGHTS

yy Open to New Financing; Delivered Free and Clear of Existing Financing. Excellent Opportunity to Obtain Historically Low 10-Year Fixed Rate Financing.

yy Grocery Anchored Shopping Center: The Subject Property is a 116,801 Square Foot Shopping Center Anchored by Vons (A Division of Safeway, Inc.) Which Represents 43% of the Offering Square Footage. yο Vons has Occupied Space at the Property since 1993 (22 Years) and has 13+ Years Remaining on their Current Lease Term.

yο The Owner of Boise-Based Albertsons (AB Acquisition LLC) Acquired Safeway, Inc. in January 2015 Making the Newly Merged Company the Second Largest Supermarket Chain in North America with more than 2,200 Stores and 250,000 Employees Nationwide.

yο The Merged Company Will Operate Grocery Store Locations Under the Banners of Safeway, Vons, Pavilions, Albertsons, Randalls, Tom Thumb, Carrs, ACME, Jewel-Osco, Lucky, Shaw’s, Star Market, Super Saver, United Supermarkets, Market Street and Amigos.

yy 84% National/Regional Tenant Mix: 84% of the Occupied Square Footage is Leased to National/Regional Credit Tenants Including Vons, Denny’s, El Pollo Loco, Goodwill, O’Reilly Auto Parts, Starbucks and Wells Fargo.

yy 100% Occupied with Strong Historical Occupancy: 76% of the Current Tenancy has Occupied Space at the Property for More than 10 Years and 53% of the Current Tenancy has More than Five Years Remaining on their Current Lease Term.

yy Interstate 15 Freeway Location: The Subject Property is Located at the Intersection of Grape Street and Railroad Canyon Road (53,000 Cars Per Day) and is Immediately Adjacent and Visible to Interstate 15 (140,000 Cars Per Day), a Major California Interstate that Runs Through Lake Elsinore and Connects to Riverside County (20 Miles North) and Temecula Valley (7 Miles South).


INVESTMENT HIGHLIGHTS

yy 3rd Fastest Growing City in California: The Population of Lake Elsinore Grew More than 83% Between 2000-2012 and the City Projects Population Growth in Excess of 200% Over the Next Ten Years.

yy Strong Trade Area Location Evidenced by Nearby National/Regional Tenants: Tenants located in the Immediate Trade Area Include Walmart, Stater Bros, Cardenas, Big Lots, AutoZone, Big O Tires, In-N-Out Burger, Subway, Holiday Inn and the Lake Elsinore Casino.

yy More than 102,500 People within a 5-Mile Radius with an Average Household Income in Excess of $70,000.yy Close Proximity to Four (4) Major Recreational Areas Which are Primarily Accessed by Railroad Canyon Road and Interstate 15.

yο Lake Elsinore: Lake Elsinore is the Largest Natural Freshwater Lake in Southern California (3,300 Surface Acres). Lake Elsinore is ideal for Water Sports such as Boating, Waterskiing, Kayaking and Fishing. The Lake Hosts Multiple Public Beaches with both Picnic and Parking Areas, a Three Mile Levee for Hiking, Nature Watching and a Tournament Channel for Professional Ski Instruction.

yο Canyon Lake Reservoir: Originally formed in 1927 after Railroad Canyon Dam was Built, the Lake Covers 525 Surface Acres and has 15 Miles of Shoreline. Lake Recreation Includes Catch and Release Fishing, Camping and Public Day-Use Areas.

yο Lake Elsinore Diamond Stadium: Built in 1994, Diamond Stadium is a State of the Art Minor League Baseball Stadium (14,000 Seat Capacity) that is also used for Concerts, Boxing Matches and Local Educational Events.

yο Lake Elsinore Hotel & Casino: Lake Elsinore Hotel and Casino was the First Poker House in California and Offers 16 Poker Tables, Blackjack, Slot Machines, a Variety of Popular Table Games and a Full Service Hotel.


·|}þ74

%&'(15

Horsethief Canyon

Alberhill

El Cariso

Lakeland Village

Lake ElsinoreCanyon Hills

Ramsgate

Tuscany Hills

North Peak

East Lake

Canyon Lake

Wildomar

Sedco Hills·|}þ74

%&'(15

North Peak1,200 RUB/O 10 yrs

Ramsgate1,400 RU

1/4 built; B/O 10 yrsTuscany Hills

2,000 RU3/4 built, B/O 3 yrs

Canyon Hills4,275 RU

1/2 built, B/O 5-7 yrs

Canyon Estates302 RU

East Lake7,189 RU

25% in 5 yrs

Diamond600 RU

Elsinore City Center299 RU

Canyon Creek1,116 RU

Spyglass Ranch550 RU

B/O 10 yrs

The Village at Lakeshore146 RU

Cottage Lane48 RU

Lakeshore Village300 RU

La Laguna Estates760 RU

3/4 built; B/O 3 yrs

Alberhill Villages1,400 RU

Cape of Good Hope369 RU

Murdock Alberhill 1,449 RU

B/O 7-10 yrs (180 units built)

Alberhill Ranch2,735 RU

B/O 10 yrs

North Alberhill856 RU

B/O 10 yrs

GRAND AVE

ORT

EGA

HWY

BUNDY CANYON RD

LAKESHORE DRRIVERSID

E DR

SCOTT RD

GRAPE ST

RAILROAD CANYON RD

MACHADO ST

NEWPORT RD

MAI

N ST

CORYDON ST

CHANEY ST

SUMNER AVEGRAHAM AVE

DEXTER AVE

FRANKLIN ST

GO

ETZ RD

GRA

ND

AVE

NEWPORT RD

LAKESHORE DR

DEXTER AVE

FRANKLIN ST

0 2 4 Miles

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RU - Residential Units

City Boundary

LAKE ELSINORE DEMOGRAPHICSPopulation in 2000 28,930Population in 2012 53,024Population Growth (2000-2012) 83.3%Est. Population Growth (2012-2016) 215%Average Household Income $74,241

“The City of Lake Elsinore Projects a Population Growth in Excess of 200% over the Next 10 Years”

This information has been sourced from the City of Lake Elsinore. Please contact the City or click on the link for further details. City of Lake Elsinore Planning Division

LAKE ELSINORE RESIDENTIAL DEVELOPMENT

SUBJECTPROPERTY


RENT ROLL

TENANT SUITE SQUARE FOOTAGE

LEASE START

LEASE END

JANUARY 2016 RENT/SF

JANUARY 2016 MONTHLY RENT INCREASES LEASE

TYPE OPTIONS

VONS ANCHORED BUILDING

Goodwill Industries 2 14,188 03/09/12 03/31/17 $1.10 $15,607 None NNNTwo 5-Year @ 12% Increase Each Option

Payless Shoesource 3 3,003 11/03/99 11/30/20 $1.45 $4,354 None NNNTwo 5-Year @

Option1: $4,740 Option 2: $5,308

Fashion Today 4 7,562 05/01/99 01/31/19 $1.45 $10,9652/16 - $11,343 2/17 - $11,721 2/18 - $12,099

NNN

One 5-Year @ FMV Followed By $.05/SF/YR

Annual Increases

O'Reilly Auto Parts 5 7,034 12/30/98 12/31/18 $1.34 $9,425 None NNN One 5-Year @ 12% Increase

Vons (1) 6 50,605 12/15/93 12/31/28 $0.34 $16,958 1/24 - $18,654NNN

Ground Lease

Seven 5-Year @ 10% Increases Every 10

Years Starting 1/34

PAD BUILDING (SUITES 7-15)

Sushi Zen 7 1,950 05/01/04 06/30/18 $2.46 $4,794 7/16 - $4,938 7/17 - $5,086 NNN

One 5-Year @ FMV Followed by

3% Annual Increases

Sally Beauty Supply 8 1,300 10/01/10 09/30/20 $2.08 $2,708 None NNN Two 5-Year @ FMV

The UPS Store 9 1,170 08/01/97 07/31/17 $2.40 $2,813 8/16 - $2,897 NNNOne 5-Year @

FMV Followed by 3% Annual Increases

Magdy Faltas Dry Cleaning (2) 10 1,430 05/01/12 04/30/17 $1.05 $1,500 None Gross None

RENT ROLL



LEASE START

LEASE END

JANUARY 2016 RENT/SF

JANUARY 2016 MONTHLY RENT INCREASES LEASE

TYPE OPTIONS

GNC 11 1,170 07/31/97 07/31/17 $2.12 $2,482.51 CPI Annually NNN None

The Smoke Shop 12 1,105 04/05/98 01/31/16 $2.23 $2,461.82 CPI (Not to Exceed 5%) Annually NNN None

LA Nails & Spa 13A 1,105 06/08/09 06/30/19 $2.39 $2,6397/16 - $2,718 7/17 - $2,800 7/18 - $2,884

NNNTwo 5-Year @


Vizion Hair Salon 13B 1,040 01/01/12 12/31/16 $1.98 $2,055 1/17 - $2,288 NNNOne 5-Year @


Diamond Dental & Orthodontics 14 2,975 07/31/01 07/31/16 $2.03 $6,027 None NNNOne 5-Year @


Basic 21 (3) 15 3,789 07/13/06 07/31/16 $1.92 $7,267 None Gross None

EL POLLO LOCO PAD

El Pollo Loco 16 2,700 06/01/98 03/31/28 $3.70 $10,000 4/18 - $11,200 4/23 - $12,544 NNN

Four 5-Year @ 12% Increases Each Option

WELLS FARGO PAD

Wells Fargo 17 3,500 09/01/97 08/31/17 $2.27 $7,961 None NNN

Five 5-Year @ Option 1: 90% of FMV

Option 2-5: 12% Increase Each Option

RENT ROLL


RENT ROLL


LEASE START

LEASE END

JANUAR 2016 RENT/SF

JANUAR 2016 MONTHLY RENT INCREASES LEASE

TYPE OPTIONS

DENNY'S PAD

Denny's 18 4,700 08/01/96 02/29/28 $2.35 $11,040

3/16 - $11,280 3/17 - $11,376 3/18 - $12,741 3/23 - $14,270

NNNFour 5-Year @ 12% Increases Each Option

STARBUCKS ANCHORED PAD

Starbucks 19 1,500 04/14/03 04/30/23 $3.50 $5,250 5/18 - $5,775 NNN One 5-Year @ $6,350

Verizon Wireless 20 2,496 06/01/11 05/31/16 $2.55 $6,365 None NNN One 5-Year @ 3% Increases Annually

Sport Clips 21 1,119 07/01/15 06/30/20 $2.47 $2,763 3% Annually NNNTwo 5-Year @


Jersey Mikes 22 1,360 08/01/13 07/31/23 $2.50 $3,400 8/18 - $3,808 NNNTwo 5-Year @

Greater of FMV or 15% Each Option

WALMART (NAP)

Walmart (NAP) 1

TOTAL SQUARE FOOTAGE: 116,801

TOTAL AVAILABLE: 0 0% Vacancy

TOTAL OCCUPIED: 116,801 100% Occupancy

(1) Tenant's lease is a ground lease. Tenant leases the land and owns their own building improvements.

(2) Tenant is currently paying a reduced rent. Per their lease, their rent is $2,574 per month plus NNN expense reimbursements.

(3) Tenant is currently paying a reduced rent. Per their lease, their rent is $10,519 per month plus NNN expense reimbursements.


INCOME & EXPENSE

ANNUALIZED OPERATING DATA

Jan. 2016

Scheduled Gross Income (SGI): $1,674,982

Expense Reimbursement: $457,008

Total Operating Income: $2,131,990

Vacancy: (1) ($36,619)

Gross Operating Income: $2,095,371

Total Operating Expenses: ($518,594)

Net Operating Income (NOI): $1,576,777 6.00% Capitalization Rate

(1) Vacancy Factor = 5% Excluding Denny’s, El Pollo Loco, Goodwill, O’Reilly Auto Parts, Sally Beauty Supply, Starbucks, Verizon Wireless, Vons, and Wells Fargo.

OPERATING EXPENSES

Amount $/SF

Taxes (1.63%): (2) $222,300 $1.90

Liability Insurance: (3) $18,236 $0.16

CAM: $219,434 $1.88

Management (3.5% of SGI): $58,624 $0.50

Total Expenses: $518,594 $4.44 Annually Per SF

$0.37 Monthly Per SF(2) Excludes Vons as Vons pays their taxes directly to the taxing authority. (3) Excludes Vons, El Pollo Loco, Denny’s and Wells Fargo as they pay their own insurance directly to their billing authorities.


FINANCING SUMMARY

NEW FINANCING SUMMARY

Loan Type: 10-Year Fixed Interest Rate (Interest Only First 5 Years)

Loan Amount: 70% $18,396,000

Down Payment: 30% $7,884,000

Interest Rate: 4.50%

Amortization (Years): 30

Interest Only Period (Years 1-5):

Net Operating Income: $1,576,777

Annual Debt Service: ($827,820)

Pre-Tax Cash Flow: $748,957

Cash on Cash Return: 9.50%

Principal & Interest Period (Years 6-10):

Net Operating Income: (1) $1,936,106

Annual Debt Service: ($1,118,518)

Pre-Tax Cash Flow: $817,588

Cash on Cash Return: 10.37%

(1) Year 6 Net Operating Income is an estimate only. Please see 10-Year Cash Flow Analysis on page 17. Contact the listing broker for further details.


10-YEAR CASH FLOW ANALYSIS

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

For the Years Ending Dec-2016 Dec-2017 Dec-2018 Dec-2019 Dec-2020 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025

Potential Gross Revenue

Base Rental Revenue $1,674,982 $1,787,590 $1,871,202 $1,943,876 $1,976,905 $2,018,108 $2,048,072 $2,132,033 $2,265,013 $2,305,049

Absorption & Turnover Vacancy $0 ($41,722) ($5,172) ($17,480) ($6,933) ($7,523) ($35,832) ($10,345) ($35,856) ($8,037)

Total Reimbursement Revenue $457,008 $496,224 $520,807 $538,380 $558,738 $578,710 $594,533 $617,707 $641,512 $667,724

Total Potential Gross Revenue $2,131,990 $2,242,092 $2,386,837 $2,464,776 $2,528,710 $2,589,295 $2,606,773 $2,739,395 $2,870,669 $2,964,736

General Vacancy ($36,619) ($11,207) ($38,610) ($28,764) ($47,821) ($49,321) ($14,458) ($41,604) ($33,221) ($55,235)

Effective Gross Revenue $2,095,371 $2,230,885 $2,348,227 $2,436,012 $2,480,889 $2,539,974 $2,592,315 $2,697,791 $2,837,448 $2,909,501

Operating Expenses

CAM $219,434 $226,017 $232,799 $239,783 $246,974 $254,385 $262,016 $269,877 $277,973 $286,311

Taxes $222,300 $228,969 $235,839 $242,914 $250,201 $257,708 $265,438 $273,401 $281,604 $290,052

Insurance $18,236 $18,783 $19,347 $19,927 $20,525 $21,141 $21,775 $22,428 $23,101 $23,794

Management $58,624 $62,566 $65,492 $68,036 $69,192 $70,634 $71,683 $74,621 $79,275 $80,677

Total Operating Expenses $518,594 $536,335 $553,477 $570,660 $586,892 $603,868 $620,912 $640,327 $661,953 $680,834

Net Operating Income (1) $1,576,777 $1,694,550 $1,794,750 $1,865,352 $1,893,997 $1,936,106 $1,971,403 $2,057,464 $2,175,495 $2,228,667

(1) 41% Growth in Net Operating Income Estimated Over the Next 10 Years


10-YEAR CASH FLOW ASSUMPTIONS

ASSUMPTIONS TO CASH FLOW ANALYSIS

Analysis Period – Start Date: (1) 1/1/2016 Market Rents: $1.75 NNN - $3.75 NNN

General Vacancy: (2) 5% Down Time 3 Months

Year 1 Occupancy Level: 100% Term: 5 - 10 Years

Operating Expense Source: 2014 Income Statement Tenant Improvements New/Renewal: $5 / $0

Effective Tax Rate: 1.63% Leasing Commissions New/Renewal: 5% / 0%

Projected CPI Growth Rate: 3.00% Renewal Probability: (3) 80%

Management Fee: 3.50%

NOTES

(1) Assumes that all tenants whose lease expires before the end of the first year of the analysis (July 31, 2016) will continue to pay rent at the same terms and conditions until that date.

(2) Excludes Denny’s, El Pollo Loco, Goodwill, O’Reilly Auto Parts, Sally Beauty Supply, Starbucks, Verizon Wireless, Vons, and Wells Fargo.

(3) Assumes that all tenants with fixed options will exercise them per the language in their options.


GRAPE STREET

RAILROAD CANYON ROAD

SIGNSIGNSIGNSIGN

SIGN

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7

20 2122 1918

1716

2 3 4 5

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89

101112

13A13B

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15

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SIGN

SITE PLAN

SUITE TENANT SF1 Walmart 2 Goodwill Industries 14,1883 Payless Shoesource 3,0034 Fashion Today 7,5625 O’Reilly Auto Parts 7,0346 Vons 50,6057 Sushi Zen 1,9508 Sally Beauty Supply 1,3009 The UPS Store 1,170

10 Dry Cleaner 1,43011 GNC 1,17012 The Smoke Shop 1,105

13A LA Nails & Spa 1,10513B Vizion Hair Salon 1,04014 Elsinore Hills Family Dental 2,97515 Basic 21 3,78916 El Pollo Loco 2,70017 Wells Fargo 3,50018 Denny’s 4,70019 Starbucks 1,50020 Verizon Wireless 2,49621 Sport Clips 1,11922 Jersey Mikes 1,360

N

SUBJECT PROPERTY NOT A PART


GRAPE STREET


SIGNSIGNSIGNSIGN

SIGN

SIGN

SIGN

SUBJECT PROPERTY

APNs: 363-530-004363-530-005363-530-007363-530-008363-530-011363-530-012363-530-019

N

PARCEL MAP

363-530-005 363-530-004

363-530-019

363-530-008

363-530-007

363-530-012 363-530-011

* Parcel map is not drawn to scale.


AERIAL OVERVIEW

36,000 CPD

N

140,000 CPD

DEL REYAT LAKE ELSINORE

-230 RESIDENTIAL UNITS-


GRAPE STREET 17,000 CPD

SUBJECT PROPERTY

RAILROAD CANYON ROAD EXIT


AERIAL OVERVIEW

2015 DEMOGRAPHICS

Population:One Mile Radius 3,970Three Mile Radius 41,450Five Mile Radius 102,713

Household Income:One Mile Radius $68,155Three Mile Radius $71,714Five Mile Radius $70,032

140,000 CPD

N



MURRIETA100,000 POPULATION

WILDOMAR32,000 POPULATION

DIAMOND 8 CINEMA


53,000 CPD- INTERSECTION -

GRAPE STREET

EAST LAKERESIDENTIAL

DEVELOPMENT- 7,200 RESIDENTIAL UNITS -

THE DIAMOND- 75,000 SFMIXED-USE

DEVELOPMENT -

LAKE ELSINORE TOWN CENTER

SUBJECT PROPERTY

AERIAL OVERVIEW

24LAKE ELSINORE CENTER



RAILROAD CANYONELEMENTARY SCHOOL

LAKE ELSINORE-3,300 SURFACE ACRES-

N

LAKE ELSINORE TOWN CENTER

THE DIAMOND

-75,000 SF DEVELOPMENT

MIXED USE-

DIAMOND 8 CINEMA

FUTURE PLANNED RESIDENTIAL-13,700+ UNITS-

EAST LAKERESIDENTIAL DEVELOPMENT

-7,200 RESIDENTIAL UNITS OVER NEXT 15 YEARS-

RAMSGATE-1,400 RESIDENTIAL UNITS

OVER NEXT 10 YEARS-25% COMPLETE

SPYGLASS RANCH-490 FUTURE

RESIDENTIAL UNITS-

DIAMOND DRIVE

140,000 CPD


SUMMERHILL DRIVE

GRAPE STREET

RAILRO

AD

CAN

YON

ROAD

LAKE ELSINORE DIAMOND PARK-14,000 CAPACITY-

SUBJECT PROPERTY


AERIAL OVERVIEW

GRAPE STREET

N



126 RESIDENTIAL UNITS

CANYON LAKE RESERVOIR

-525 SURFACE ACRES-

CANYON LAKE-11,000 POPULATION-

TUSCANY HILLS(2,000 HOMES)

140,000 CPD


SUMMERHILL DRIVE

RAILROAD CANYON ROAD SUBJECT PROPERTY

CANYON HILLS-4,275 RESIDENTIAL UNITS

OVER NEXT 7 YEARS-50% COMPLETE

26LAKE ELSINORE CITY CENTER SECTION II - INVESTMENT OVERVIEW


P A CI F

I C

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EA

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S A N P E D R OC H A N N E L

SaltonSea

SANTA CATALINAISLAND

SAN CLEMENTEISLAND

T WENT Y-NINEPALMS

C AMP PENDLE TONMARINE CORPS BASE

SAN BERNARDINO NATIONAL FOREST

SAN BERNARDINONATIONAL

FOREST

CLEVELANDNATIONAL

FOREST

ANGELES NATIONAL FOREST

JOSHUA TREENATIONAL PARK

CLEVELANDNATIONAL

FOREST

ANZA-BORREGODESERT STATE PARK

CLEVELANDNATIONAL

FOREST

LOS ANGELES

SAN DIEGO

G U L F O FS A N T A C A T A L I N A

LAKE ELSINORE

LakeMatthews

DiamondValley Lake

LakePerris

LakeHenshaw

205

20210

60

1

1

205

205

2015

2015

2015

2010

2010

60

20215

208

208

SAN BERNARDINO

LONG BEACH

COACHELLA

PALM SPRINGS

PALMDESERT

YUCCAVALLEY

HEMET

TEMECULA

BEAUMONTRIVERSIDE

OCEANSIDE

SAN CLEMENTE

MISSIONVIEJO

NEWPORTBEACH

HUNTINGTON BEACH

ANAHEIM

CHINO

POMONAHOLLYWOOD

GLENDALE

PASADENA

WEST COVINA

LYNNWOOD

IRVINE

CORONA

FONTANA

RANCHOCUCAMONGA

MALIBU

BRAWLEY

EL CENTRO

CARMEL

LA JOLLA

ESCONDIDO

WILDOMAR

RAMONA

78

7986 111

74

62

RIVERSIDE COUNTY

SAN DIEGO COUNTY

ORANGECOUNTY

LOS ANGELES COUNTYSAN BERNARDINO COUNTY

IMPERIAL COUNTY

LOS ANGELESINTERNATIONAL

AIRPORT

SAN DIEGOINTERNATIONAL

AIRPORT

MENIFEEJOHN WAYNE AIRPORT

REGIONAL MAP

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SUBJECTPROPERTY


TENANT PROFILES

Vons is a Southern California and Southern Nevada supermarket chain and a division of Safeway, Inc. The company began in 1906 when Charles Von der Ahe opened a 20-foot wide neighborhood Groceteria in Los Angeles, California. He pioneered a “cash and carry” service as an alternative to “charge and delivery”, which proved so successful, that by 1928, Vons had expanded to 87 stores. With the introduction of pre-packaged perishables, Vons was able to offer some of the first self-service produce, meat and deli departments, which proved to be the milestone marking the advent of the first true supermarkets as we know them today. The most explosive growth occurred for Vons during the 1970’s when they branched out to 159 stores with 16,000 employees, making it the #1 grocery retailer in Southern California.

In 1986, Vons introduced Pavilions, a “combination store” concept which offered a wider variety of upscale products as well as pharmacy and other non-food products and services. Additionally, Vons has rebranded itself with “lifestyle format” stores, offering a warmer ambiance, a Starbucks kiosk, and convenient cupholders in each cart. Today, Vons stretches from San Diego to Fresno, and from Clark County, Nevada to the Pacific Ocean, serving millions of customers every day.

In 1996, Safeway Inc. acquired a 35% stake in Vons, and then shortly thereafter in 1997, the two companies fully merged. In March 2014, AB Acquisition (controlled by Cerberus Capital Management whom also owns Albertsons grocery chain) agreed to terms to purchase Safeway, Inc. for approximately $8 billion. The acquisition was successfully completed in January 2015 making the newly merged company the 2nd largest supermarket chain in North America with more than 2,200 store locations and 250,000 employees nationwide. The merged company will operate grocery store locations under the banners of Safeway, Vons, Pavilions, Albertsons, Randalls, Tom Thumb, Carrs, ACME, Jewel-Osco, Lucky, Shaw’s, Star Market, Super Saver, United Supermarkets, Market Street and Amigos.

Company Type: Private Locations: 325Websites: www.vons.com

A Division of Safeway, Inc.


TENANT PROFILES

Goodwill is a nonprofit organization that works to enhance quality of life of individuals and families by helping people in need reach their full potential through learning and the power of work. Their network of 165 independent community-based Goodwills in the U.S. and Canada offers customized job training, employment placement and other services. Goodwill sells donated goods and household items in more than 2,700 stores and on their online auction website. Goodwill spends approximately 81% of its $4.9 billion revenue on education, career services and critical community programs. In 2013, Forbes ranked #6 on its list of “The 50 Largest U.S. Charities.”

www.goodwill.org | Company Type: Not for Profit | Locations: 2,700

Denny’s is a full-service pancake house, coffee shop and casual family restaurant chain operating more than 1,600 locations in the U.S., Puerto Rico, Canada, Dominican Republic, El Salvador, Curaçao, Costa Rica, Venezuela, Honduras, Japan, Mexico, New Zealand, Qatar, and the United Arab Emirates. For more than 50 years, Denny’s has been serving up real breakfast 24/7. Home of the famous “Grand Slam” breakfasts, Denny’s provides a variety of flavorful food and beverage choices. Denny’s started franchising in 1963, and, today, most Denny’s restaurants are franchisee-owned.

www.dennys.com | Company Type: Public (NASDAQ: DENN) | Locations: 1,600

GNC provides an extensive list of health and wellness products including vitamins, minerals, proteins, herbal supplements, sports nutrition, diet products and much more. GNC Holdings, Inc., headquartered in Pittsburgh, Pennsylvania, is a leading global retailer of vitamins and diet supplements in the United States. The company has 8,700 locations in 50 countries. Currently, 6,500 are retail locations in the United States, 1,050 are franchises and 2,232 are Rite Aid franchise store-within-a-store locations.

www.gnc.com | Company Type: Public (NYSE: GNC) | Locations: 8,700

In 1980, El Pollo Loco opened its first location in Los Angeles and recently became a public company on July 24, 2014. El Pollo Loco specializes in fire-grilling fresh, citrus-marinated chicken prepared in front of their guests by a highly skilled Grill Master. Only the freshest ingredients, they are a healthier alternative to traditional fast food. El Pollo Loco offers franchise opportunities to qualified franchisees and currently has about 400 company and franchise-owned restaurants nationally.

www.elpolloloco.com | Company Type: Public (NASDAQ: LOCO) | Locations: 400


TENANT PROFILES

Jersey Mike’s is a sub sandwich franchise with approximately 750 stores open and under development nationwide in over 30 states. Started at the Jersey Shore in 1956, Jersey Mike’s serves authentic Northeast style subs on fresh baked bread - the same recipe it started with over 50 years ago. The company’s mission is to bring its customers the highest quality, freshest made sub in the industry and give back to the communities in which it operates. Jersey Mike’s is ranked #33 in Entrepreneur Magazine’s 2013 Fastest-Growing Franchise Rankings and #68 in Entrepreneur Magazine’s Franchise 500.

www.jerseymikes.com | Company Type: Private | Locations: 750

Payless ShoeSource offers shoes and accessories for the entire family at affordable prices and is the largest specialty family footwear retailer in the Western Hemisphere with over 4,400 locations in over 30 countries. Payless was founded in 1956 and currently headquarters in Topeka, Kansas and became an independent publicly held company in 2004. They currently employ more than 25,000 associates worldwide, including stores in St. Lucia, Barbados, Jamaica, Philippines, Indonesia, Singapore and Malaysia. Payless is a privately held company owned by Golden Gate Capital and Blum Capital Partners.

www.payless.com | Company Type: Private | Locations: 4,400

O’Reilly Auto Parts, a dominant auto parts retailer, began in Springfield, Missouri as a single store in 1957 and has since expanded to 4,311, locations. The company continues to plan for and execute growth and expansion for the addition of 200 new locations in 2014. Their mission statement is “to direct O’Reilly Automotive, Inc. in achieving dominance in all of its market areas through conscientious adherence to the highest standard of business practices, with the focus of maximizing shareholder value.”

www.oreillyauto.com | Company Type: Public (NASDAQ: ORLY); S&P BBB | Locations: 4,311


TENANT PROFILES

Sally Beauty Holdings, Inc. is an international specialty retailer and distributor of professional beauty supplies with annual revenues of $3.5 billion. The company operates primarily through two business units, Sally Beauty Supply and Beauty Systems Group. Over 4,500 stores throughout the United States and Puerto Rico, the United Kingdom, Belgium, Canada, Chile, Mexico, France, Ireland, Spain, Germany and the Netherlands operate as Sally Beauty Supply and Beauty Systems Group. Sally Beauty Supply was founded in New Orleans, Louisiana in 1964.

www.sallybeauty.com | Company Type: Public (NYSE: SBH) | Locations: 4,500

Starbucks, first established in 1971 in Seattle’s historic Pike Place Market, is the premier roaster and retailer of specialty coffee in the World. Starbucks has been the premier roaster and retailer of specialty coffee in the world with 23,187 retail stores in over 60 countries and approximately 182,000 employees. Starbucks offers exceptional products that can be enjoyed in-store, on-the-go or at home, which include coffee, handcrafted beverages, merchandise, fresh food and consumer products. In February 2014, Fortune magazine named Starbucks the 5th Most Admired Company in the World (1st in Food Services) and is ranked #208 in the 2013 Fortune 500.

www.starbucks.com | Company Type: Public (NASDAQ: SBUX; S&P: A-) | Locations: 23,187

Sport Clips is headquartered in Georgetown, Texas and was established in 1993 and later franchised in 1995 by founder and CEO Gordon Logan. SportClips is the first sports-themed haircutting franchise, specializing in haircuts for men and boys. It was ranked by Entrepreneur Magazine as one of the top 20 “Fastest-Growing Franchises,” and in the top 10 percent of the “Franchise 500.” The company boasts 1,000 stores in about 40 states. Sport Clips’ “Help A Hero” campaign has raised more than $2 million to help deployed and hospitalized U.S. service members. They also offer a 20% discount on the fees to qualified veterans interested in owning a franchise.

www.sportclips.com | Company Type: Private | Locations: 1,000


TENANT PROFILES

The UPS Store, a wholly owned subsidiary of United Parcel Service (UPS) of America, is the world’s largest franchisor of retail shipping, postal, printing and business service centers. The UPS Store and Mail Boxes Etc. (acquired in 2001) together comprise nearly 4,700 locations in the United States, Puerto Rico and Canada. With more than a century of experience in transportation and logistics, UPS is a leading global trade expert equipped with a broad portfolio of solutions. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories providing convenient value-added business services to the small-office/home-office (SOHO) market, corporate, and consumers.

www.theupsstore.com | Company Type: Public (NYSE: UPS) | Locations: 4,700

Verizon Wireless, headquartered in Basking Ridge, New Jersey, is a wholly owned subsidiary of Verizon Communications, Inc. offering a large menu of mobile technology and devices. With over 123.5 million subscribers. Verizon Wireless employs 74,000 people in over 1,700 retail locations. Boasting $81 billion in revenue in 2013, Verizon Wireless is the nation’s largest 4G LTE network in the United States. Verizon’s commitment to its people has earned them multiple awards for their workplace excellence.

www.verizonwireless.com | Company Type: Public (NYSE (VZ)) | Locations: 1,700

Wells Fargo & Company is a nationwide, diversified, community-based financial services company with $1.5 trillion in assets. Founded in 1852, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores and over 12,000 ATMs across North America and internationally. The Wall Street Journal named Wells Fargo the largest bank in the world by market capitalization in 2013 at $237 billion.

www.wellsfargo.com | Company Type: Public (NYSE: WFC; S&P: A+) | Locations: 9,000


AREA OVERVIEW

Lake Elsinore established in 1888, has become one of the fastest growing cities in Southern California and is situated in western Riverside County

just north of Wildomar and Murrieta along Interstate 15. With a population in excess of 50,000, the state of California ranked Lake Elsinore as the 3rd fastest growing city in California in 2013 with a population growth of more than 83% between the year 2000 and 2012 and the city of Lake Elsinore is projecting a population growth in excess of 200% over the next 10 years.

Lake Elsinore is situated in a strategic location with more than 1,100 acres of freeway frontage available for new commercial and industrial park development, lower housing and land costs and close proximity to skilled labor and universities. Excellent public service programs exist for continued infrastructure improvements, street improvement, landscape and park maintenance, ample water supplies and sewer requirements. Commercial transportation needs are met by four international airports and easy central freeway access to Southern California’s Pacific Rim ports and railroad distribution hubs, as well as the Riverside Transit Agency (RTA) for local public transportation. Job creation is encouraged by expanding local industries such as tourism, electronics, computer animation, machining, telecommunications, aerosports, wood and building products.

Lake Elsinore is popular for all kinds of recreation and outdoor activities and city is ideally located in close proximity to the following major recreational areas:

• Lake Elsinore: Lake Elsinore is the Largest Natural Freshwater Lake in Southern California (3,300 Surface Acres). Lake Elsinore is ideal for Water Sports such as Boating, Waterskiing, Kayaking and Fishing. The Lake Hosts Multiple Public Beaches with both Picnic and Parking Areas, a Three Mile Levee for Hiking, Nature Watching, and a Tournament Channel for Professional Ski Instruction.

• Canyon Lake Reservoir: Originally formed in 1927 after Railroad Canyon Dam was Built, the Lake Covers 525 Surface Acres and has 15 Miles of Shoreline. Lake Recreation Includes Catch and Release Fishing, Camping, and Public Day-Use Areas.

• Lake Elsinore Diamond Stadium: Built in 1994, Diamond Stadium is a State of the Art Minor League Baseball Stadium (14,000 Seat Capacity) that is also used for Concerts, Boxing Matches, and Local Educational Events.

• Lake Elsinore Hotel & Casino: Lake Elsinore Hotel and Casino was the First Poker House in California and Offers 16 Poker Tables, Blackjack, Slot Machines, a Variety of Popular Table Games and a Full Service Hotel.

DIAMOND STADIUM

WATER SPORTS

LAKE ELSINORE


AREA OVERVIEW

Temecula Valley is situated in the southwest sector of Riverside County spanning 32-square miles and is conveniently located near San Diego,

Orange County and Los Angeles. The Temecula Valley is made up of three cities: Wildomar, Murrieta and Temecula and is easily accessible by interstates 15 and 215 as well as highway 79. Perhaps most known for its title as “Southern California’s Wine Country,” the Temecula Valley is home to 30 wineries, a variety of fine dining, musical events, golf courses and more. The Temecula Valley has become a popular destination for many people in and out-of-state, with extravagant wineries and wine tasting to attract wine enthusiasts from all parts. In addition to being approximately 20 miles from the Pacific Ocean, the Temecula Valley offers beautiful views of Mount San Jacinto, Palomar Mountain and Mount San Bernardino. The temperate warm summers and relatively dry winters of Temecula Valley has made it one of southern California’s most popular destinations to visit and start a family.

TEMECULATemecula is an affluent community situated along interstates 15 and 215, south of both Murrieta and Wildomar. With a population of approximately 105,000 residents, Temecula is the 2nd largest of the three cities. Temecula is the nucleus of the Temecula Valley and offers attractions and events such as the Temecula Valley Balloon and Wine Festival (40,000+ attendees annually) and the Temecula Valley International Film Festival (20,000+ attendees annually).

Downtown Old Town Temecula sits tucked beneath Temecula’s hillside and is the center of Temecula’s entertainment-dining-shopping district. Comprised of 12 blocks, Old Town Temecula is made up of a collection of historic 1890’s buildings, antique stores, fine dining, gift shops, exciting night-life, musical entertainment as well as premium wine tasting rooms. It is also home to car shows, western days and the Temecula Museum, which features exhibits featuring the local Native American tribe, local history and city development. Downtown Old Town Temecula is a large part of the city’s thriving economy, attracting thousands of visitors and boosting the economy and media attention to the thriving area.

Pechanga Resort and Casino is a 400+ acre, AAA Four Diamond resort and the largest Casino in the Western US. It is home to over 3000 Vegas-Style slots, 130 table games and a state-of-the-art 54 table private poker room for the devoted players. As well as being California’s most popular casino destination, it is home to Arthur-Hills Journey at Pechanga golf course, an 18-hole golfing masterpiece. Pechanga is recognized as one of Southern California’s premier entertainment venues, headlining popular summer acts, outdoor concerts and much more. Pechanga is one of the largest employers in the Temecula Valley and instrumental in the rapid growth of the region.

PECHANGA GOLF COURSE

TEMECULA VALLEY WINE

DOWNTOWN TEMECULA


AREA OVERVIEW

MURRIETAMurrieta sits in between Temecula to the south and Wildomar to the north. It is easily accessible to surrounding communities via interstates 15 and 215 as well as highway 79. In 2012, Murrieta’s population was 106,000, a 233% population increase from the 2000 census, making Murrieta one of the fastest growing cities in the entire state and the largest within the Temecula Valley. Typically considered a commuter town, most Murrieta residents commute to jobs in San Diego County, Orange County, Los Angeles County and Temecula. In 2013, the FBI ranked Murrieta as the nation’s 2nd safest city to live in with populations over 100,000 residents.

Bear Creek Golf Club & Community (immediately adjacent to the Subject Property) sits nestled in the Murrieta hillside. Bear Creek is a private community comprised of a collection of 620 single family and townhome-style residences as well as the Jack Nicklaus designed Bear Creek Golf Course. Members of the community have access to amenities such as bocce courts, clay and concrete tennis courts, weight room, cardio room and spa. The community provides an Olympic-sized swimming pool, private meeting rooms and offices for residents. With private streets and a guarded gate, Bear Creek Community is a relaxed, safe and well-priced community with easy access to Interstate 15. The Bear Creek Golf Course is an 18-hole golf course created by world-famous professional golfer Jack Nicklaus. It is a private golf course offering unparalleled service, fine cuisine, private events and a 26,000 square foot clubhouse showcasing a notable collection of fine art.

WILDOMARKnown for its rich history of families, ranches and growth, Wildomar is a fast growing city that straddles Interstate 15 north of Murrieta and south of Lake Elsinore. Wildomar was an unincorporated area until 2008 when residents voted and decided to incorporate it, making it the 25th City in Riverside County. One of the fastest growing cities in California, Wildomar has more than doubled its population since the 2000 census. Largely community based, 99% of residents living in Wildomar live in households. This housing growth can be accredited to the growth of the region, specifically the Temecula Valley, with population escalations due to increased job opportunities, commercial trade and developments. Wildomar benefits from being centrally located, giving residents easy access to popular destinations like Lake Elsinore, the Temecula Wine Country, Pechanga Resort and Casino, the acclaimed Bear Creek Golf Course and much more. Wildomar is widely chosen for its new residential communities that are less congested but within driving distance of commerce in the Inland Empire, Los Angeles, Orange and San Diego Counties.

PECHANGA RESORT & CASINO

TEMECULA - BALLOON FESTIVAL

BEAR CREEK GOLF CLUB


AREA OVERVIEW

Riverside County has a population of approximately 2.2 million and is California’s 4th largest county by population. According

to the California Department of Finance’s new population projection reports released in 2013, Riverside County will have the largest growth (approximately 2 million) of any county in the state. Riverside will become the second most populated county in the state at 4.2 million, following behind Los Angeles County at 11.6 million. The population’s rapid growth has often been credited to the development of affordable housing in Riverside County compared to the more expensive Orange and San Diego counties.

Riverside County’s boundaries stretch from Orange County to the Colorado River, which is the border between California and Arizona. The County is roughly the size of the State of New Jersey, spanning 180 miles. Riverside County is home to 28 cities, 48 unincorporated communities and 12 Indian reservations.

The County’s location in the heart of Southern California makes it easily accessible. Interstate 10 runs through the entire County from east to west. Interstate 15 and 215 connect Riverside with San Diego and San Bernardino Counties. The 60 and 91 Freeways link Riverside to Los Angeles and Orange Counties. Metrolink, the rail service, provides a large number of commuters from Riverside to Los Angeles, Orange and San Bernardino Counties. The County is currently served by 17 airports including the rapidly expanding Ontario International Airport, Palm Springs International Airport and San Bernardino International Airport. The March Inland Port plans to address the rising need for economical air cargo services. Shipping into and out of the Ports of Los Angeles, Long Beach and San Diego are easily accessible from Riverside County.

Riverside County is home to year-round entertainment including numerous music festivals such as the Coachella Music and Arts Festival and Coachella Valley Stagecoach Country Festival, bringing in over 55,000 people per day. Palm Springs, a major vacation destination within the County, generated $4 billion in direct tourism sales in 2011. Several events such as the Palm Springs International Shortfest and the Palm Springs International Film Festival are held in the desert resort city. Another prominent City within Riverside County is Temecula, well known for its Wine Country, Balloon Festivals, championship golf courses and resorts.

PALM SPRINGS

RIVERSIDE COUNTY

COACHELLA MUSIC & ARTS FESTIVAL


DEMOGRAPHICS

1-Mile 3-Mile 5-MilePopulation 2020 Projection 4,325 44,263 109,413 2015 Estimate 3,970 41,450 102,713 2010 Census 3,591 38,441 95,577 2000 Census 1,867 24,276 62,889 Growth 2000 - 2010 92.38% 58.35% 51.98% Growth 2010 - 2015 10.56% 7.83% 7.47% Growth 2015 - 2020 8.93% 6.79% 6.52%

Households 2020 Projection 1,253 13,171 32,904 2015 Estimate 1,157 12,395 31,068 2010 Census 1,070 11,691 29,362 2000 Census 647 7,898 20,585 Growth 2000 - 2010 65.27% 48.03% 42.64% Growth 2010 - 2015 8.17% 6.02% 5.81% Growth 2015 - 2020 8.33% 6.26% 5.91%

2015 Est. Population by Single-Classification Race 3,970 41,450 102,713 White Alone 2,268 26,687 67,057 Black or African American Alone 227 1,739 4,153 American Indian and Alaska Native Alone 38 460 1,039 Asian Alone 250 2,130 4,838 Native Hawaiian and Other Pacific Islander Alone 13 106 260 Some Other Race Alone 921 8,116 19,457 Two or More Races 252 2,211 5,908

2015 Est. Population by Ethnicity (Hispanic or Latino) 3,970 41,450 102,713 Hispanic or Latino 1,975 18,339 44,815 Not Hispanic or Latino 1,995 23,111 57,898

2015 Est. Average Household Income $68,155 $71,714 $70,032

Documents

L AKE E LINORE S CITY CENTER - Jesse Lee Grape St Lake...LAKE ELSINORE CITY CENTER 6 OFFERING SUMMARY LOCATION Lake Elsinore City Center 31500-31660 & 31760-31800 Grape Street Lake