OM Harbor Central CW JULY.2017.001 · River Delta. It is directly west of Sacramento, the State Capital of California, and northeast of the Bay Area counties of Solano and Napa. The

OFFERING MEMORANDUM HARBOR CENTRAL

SEC HARBOR BOULEVARD & WEST CAPITOL AVE - WEST SACRAMENTO, CA 95691

Erik NeeseDirector916-329-1545 [email protected] #01243960

Shaun Morrow, CCIMSenior Director916-617-4242 [email protected] #00548078

400 Capitol Mall,Suite 1800 Sacramento, CA 95814

ph: 916-288-4800 fx: 916-446-0024

www.cushmanwakefield.com

Confidential Offering Memorandum

HARBOR CENTRAL, WEST SACRAMENTO, CA

TABLE OF CONTENTS:

Confidentiality Agreement 3 Executive Summary 4

Property Overview 6

Area Overview 10

Market Analysis 13

Tenant Summary 15

Financial Analysis 19

Addendum 22

Erik NeeseDirector916-329-1545 [email protected] #01243960

Shaun Morrow, CCIMSenior Director916-617-4242 [email protected] #00548078

400 Capitol Mall,Suite 1800 Sacramento, CA 95814

ph: 916-288-4800 fx: 916-446-0024

www.cushmanwakefield.com

Confidential Offering Memorandum

HARBOR CENTRAL, WEST SACRAMENTO, CA

CONFIDENTIALITY & DISCLAIMER

The information contained in this marketing brochure (“Materials”) is proprietary and confidential. It is intended to be re-

viewed only by the person or entity receiving it from Cushman & Wakefield (“Agent”). The Materials are intended to be used

for the sole purpose of preliminary evaluation of the subject property (“Property”) for potential purchase.

The Materials have been prepared to provide unverified summary financial, physical, and market information to prospective

buyers to enable them to establish a preliminary level of interest in potential purchase of the Property. The Materials are not

to be considered fact. The information contained in the Materials is not a substitute for thorough investigation of the financial,

physical, and market conditions relating to the Property.

The information contained in the Materials has been obtained by Agent from sources believed to be reliable, however, no

representation or warranty is made regarding the accuracy or completeness of the Materials. Agent makes no representation

or warranty regarding the Property, including but not limited to income, expenses, or financial performance (past, present, or

future); size, square footage, condition, or quality of the land and improvements; presence or absence of contaminating sub-

stances (PCB’s, asbestos, mold, etc.); Compliance with laws and regulations (local, state, and federal); or, financial condition

or business prospects of any tenant (tenant’s intentions regarding continued occupancy, payment of rent, etc). Any prospec-

tive buyer must independently investigate and verify all of the information set forth in the Materials. Any prospective buyer is

solely responsible for any and all costs and expenses incurred in reviewing the Materials and/or investigating and evaluating

the Property.

By receiving the Materials you are agreeing to the Confidentiality and Disclaimer set forth herein.

All Property showings are by appointment only and must be coordinated through the Agent.

HARBOR CENTRAL Executive Summary

/4SEC HARBOR BLVD & WEST CAPITOL AVE

WEST SACRAMENTO, CALIFORNIA

The ownership has retained Cushman and Wakefield as their

exclusive agents for the disposition of their interest in Harbor

Central. Harbor Central is a quality retail center located in West

Sacramento, California. The property is being offered for a price

of $5,700,000. Qualified prospective purchasers will be given an

opportunity to inspect the Property prior to making an offer.

Harbor Central is an attractive retail center located at the inter-

section of Harbor Boulevard and West Capitol Avenue in West

Sacramento. Developed by the ownership starting in the 80’s,

the property has served its intended purpose well with this por-

tion built in 1992.

The property consists of ±22,198 square feet of retail space

situated on two parcels totaling approximately 1.61 acres. The

property is the main retail component of the shopping center

that includes a McDonald’s stand alone pad on the corner and a

Meineke Car Care Center and UC Davis Medical Clinic which are

both owned separately and not part of this sale. The Property

is located at the south east corner of the intersection of Harbor

Boulevard and West Capitol Avenues in West Sacramento. The

property is conveniently located near the new IKEA/Home

Depot/Super Wal-Mart development in West Sacramento and

the property benefits from strong traffic counts and easy access

to Downtown Sacramento, Southport and the Highway 50/

Interstate 80 freeways.

W Capitol Avenue

Ha

rbo

r Bo

uleva

rd

N

PROPERTY

DRIVETIME POPULATION5 Minutes 10 Minutes

Population 12,987 112,869

Daytime Work Population 13,344 154,811

Daytime Population 21,273 211,677

TRAFFIC COUNTS

Harbor Blvd @ West Capitol Ave 20,437 adt

Highway 50 @ Harbor Blvd 200,000 adt

The Offering

The Property

HARBOR CENTRAL Executive Summary



The Offering, continued

Sacramento Valley Economy

The Greater Sacramento Area’s now stabilizing economy can be credited in

large part to its ever growing and highly educated labor pool. Sacramento’s

broad-based and diversified work force encompasses professional and technical

arenas, as well as manufacturing, transportation and service occupations. The

Sacramento Valley employment has now stabilized despite modest declines in

the manufacturing, communications and public utilities sectors since mid-2002.

Recently, the region has posted positive job growth numbers.

West Sacramento Retail Market

At the submarket level there were no big winners or losers during the fourth

quarter; occupancy gains and losses were minimal across the board. The West

Sacramento submarket contains over 1.8M square feet of retail with no space

listed for sublease. The submarket has one of the lowest retail vacancy rates of

any submarket in the region with overall vacancy at 3.1%. The current average

asking rate for retail space in this market is $21.59 per square foot. The market

will continue its pattern of falling vacancy throughout 2017. While rents for

first-tier centers have returned to slow growth mode, this is not yet the case

for the rest of the marketplace. But they are beginning to stabilize for second-

tier projects in the region. That being said, price competition remains fierce for

third-tier product in the region and this will not change any time soon. Harbor

Central is well positioned to take advantage of these market conditions.

Analysis Summary

The financial analysis projects a 6.72% cap rate the first year. The first year cash

on cash return of 7.22%.

For the ten-year analysis period including a sale at the end of the tenth year

based upon the NOI in the eleventh year, we find that the cap rate at that time

would be a projected 9.28%, the un-leveraged annual IRR based upon the asking

price is projected to be 8.93% and the leveraged annual IRR should be 15.6%.



HARBOR CENTRAL Property Overview

Property Overview

Address: 805-831 Harbor BoulevardWest Sacramento, California 95691

Year of Construction: 1992

Building Size: 1-story retail building with an approximate 22,198 square feet

Site Size: Approx. 1.61 acres (approximately 70,131 square feet)

Parcel Numbers: 067-120-055, 067-120-056 & 067-120-057

County Use: Shopping Center Comm Area (151)

Access: Private vehicles can access through driveway access on both Harbor Boulevard & West Capitol Avenue

Utilities: Water: City of West SacramentoElectricity: Pacifi c Gas & ElectricGas: Pacifi c Gas & Electric

Flood Hazard: Subject property is located in Zone X: Area of minimal fl ood hazard, usually depicted of FIRMS as above the 500-year fl ood level (per FEMA)

Seismic Hazard: This site is not located in a Special Study Zone as established by the Alquist-Priolo Geological Hazards Act

Parking: Shared non-exclusive common area parking for all parcels



HARBOR CENTRAL

WEST CAPITOL AVE

HAR

BO

R B

LVD

NOT A PART

MCDONALD’S

NOT A PARTRIVER CITY

MEDICAL GROUP

RAKU SUSHI

CH

ECK

IN

TO

CA

SH

CR

ICK

ET

NAIL

SA

LON

SU

BW

AY

DO

MIN

O’S

HARBORDENTALU

PS

NO

T A PA

RT

MEIN

EK

E C

AR

CA

RE

KELLYMOORE

Site Plan

Property Overview



HARBOR CENTRAL

Location Aerial

U S

50

WEST CAPITOL AVE - 13,597 ADT (2013)

HA

RBOR BLV

D - 20,437 A

DT (2013)

EVERGREEN AVE

HWY 50 @ HARBOR BLVD - 200,000 ADT (2013)

PROPERTY

Property Overview



HARBOR CENTRAL

Retail Aerial - City of West Sacramento

SITE80

5STATE CAPITOL

BUILDING

SOUTHPORTBUSINESS PARK

GOLDEN 1 ARENA 80

Property Overview

U S

50

Area Overview



HARBOR CENTRAL

Yolo County Overview

Yolo County which consists of 1,021 square miles (653,549 acres) is located in

the rich agricultural regions of California’s Central Valley and the Sacramento

River Delta. It is directly west of Sacramento, the State Capital of California, and

northeast of the Bay Area counties of Solano and Napa. The eastern two-thirds

of the county consists of nearly level alluvial fans, flat plains and basins, while

the western third is largely composed of rolling terraces and steep uplands

used for dry-farmed grain and range. The elevation ranges from slightly below

sea level near the Sacramento River around Clarksburg to 3,000 feet along the

ridge of the western mountains. It is home to the Port of Sacramento which

ships out 1 million tons of some of Yolo County’s many agricultural products,

such as rice, wheat, and safflower seed, to worldwide markets. Outside the San

Francisco seismic area, Yolo County is bounded by the Sacramento River on

the east; Putah Creek on the south; Colusa County on the north; and the Coast

Ranges (Little Blue Ridge and Vaca Mountain Range) on the west.

West Sacramento Overview

The area of West Sacramento was permanently settled in 1844 when two broth-

ers founded a salmon fishery along the river and began farming and raising

livestock. In 1846, a man named James McDowell bought 600 acres from the

brothers and a land surveyor was hired to map out 160 acres which was then

divided into forty one blocks in 1849. The lots within this platted area, named

the “Town of Washington”, were then sold, the first for $500. During its first ten

years, the rural Town of Washington went through a significant increase in busi-

ness development and shipping activity.

While Sacramento began to urbanize on the other side of the river, early West

Sacramento found its hand at agricultural development. Salmon, sturgeon, cat-

fish, eel, crayfish, and clams proved to be lucrative in this region. The river settle-

ment was flourishing, stocking fish markets not only in Sacramento, but in San

Francisco as well. In addition, the rich soil of the valley produced abundantly.

One of the area’s most well known dairy farmers was Mike Bryte. Bryte came

to California in 1849. When the California Steam Navigation Company came to

Washington, Bryte used the steamships to carry his dairy products to various

markets within the region. Bryte’s property was divided and became known as

the community of Bryte.

In time, the region began to develop. The Town of Washington was renamed

Broderick in honor of U. S. Senator Broderick. After 1900, the three communities

known as Bryte, Broderick and West Sacramento were cumulatively known as

“East Yolo”. From 1900 to 1920, the population of this area doubled from 1,398

to 2,638. The West Sacramento post office opened in 1915. Officially incorpo-

rated as a city in 1987, these communities are what the City of West Sacramento

is based upon.

Just west of the state capitol, across the Sacramento River, West Sacramento

is a now a vibrant city of about 50,000 residents that is recognized regionally

and statewide for its innovative, business-friendly government, quality of life, and

central location.

Major Yolo Firms Number of EmployeesUniversity of California, Davis 12,650Yolo County 1,270Cache Creek Indian Casino & Resort 2,200State of CA 2,500PG&E 1,750

Area Overview



HARBOR CENTRAL

West Sacramento’s residential offerings range from quaint, historic Queen Anne

cottages along the river to established neighborhoods on tree-lined streets.

Southport offers residential villages linked to some of the city’s 22 neighborhood

parks, miles of recreational trails, neighborhood schools and retail services.

Eight public schools and several private schools serve West Sacramento. Higher

education is within easy reach with four community colleges located nearby,

including the West Sacramento Center of Sacramento City College. Additionally,

five universities and numerous private colleges offer specialized degree and

occupational training programs. Transportation

People, products and produce move to and from the West Sacramento region by all

major transportation modes. Well-planned state routes, including I-5 and I-80 pro-

vide access to the interstate network, and California Northern

Railroad provides freight service to a number of Woodland’s

industrial plants. Amtrak carries passengers from its Davis

stop and Yolo Bus connects West Sacramento to Sacramento.

YoloBus serves local transporta-

tion needs within the county and parts of Solano County,

from Cache Creek Casino & Resort in the Capay Valley to

Sacramento and the Sacramento International Airport,

where major international airlines offer hundreds of

daily flights for passengers and freight.

In June 1963, the Port of Sacramento was opened to deep sea traffic with the

completion of the Deep Water Ship Channel. The project had been authorized

by Congress in 1946 and construction commenced in 1949. West Sacramento

assumed responsibilities for the daily operations of the port in 2006.

The Port of West Sacramento, lying 79 nautical miles from the San Francisco Bay,

connects the entire Northern California region to the Pacific Rim. Currently, 16

intrastate and interstate carriers and 100 independent trucking contractors carry

freight daily to and from the West Sacramento area.

Recreation

Recreation thrives in the Sacramento Area. The American

River Parkway offers 5,000 acres of recreation area along

both sides of the river for 30 miles. Access to bike trails,

white water rafting, hiking and fishing are available at

many points along the American River.

Dozens of parks, some developed, others left in their natural state, are located

throughout the region. Baseball and softball diamonds, soccer fields, basketball

and volleyball courts, tennis courts and swimming pools are available for sports

enthusiasts. Regional Museums

Museums and cultural attractions just minutes from West Sacramento in the down-

town Sacramento Area include the California Railroad Museum, Crocker Art Museum,

the historic Governor’s Mansion, Sutter’s Fort State Historic Park, the California

State Indian Museum, the California Military Museum and

the Leland Stanford Jr. Museum. The downtown area also

features the Discovery Museum, The Sacramento Zoo, the

Wells Fargo Museum, the California State Capitol Museum,

and the California Vietnam Veterans Memorial.

Area Overview, continued

Area Overview



HARBOR CENTRAL

Area Overview, continuedThe major league sports team calls the Sacramento region home; the Kings of the National Basketball Association. West Sacramento is the home of the AAA baseball team, the River Cats, and a state-of-the-art, multi-use baseball complex, Raley Field. The River Cats are the minor league affiliate of Major League Baseball’s San Francisco Giants.

NBUSINESS

80LOOP

BUSINESS

80LOOP

PROPERTY

SOUTHPORT

RIVER CITYHIGH

SCHOOL

DEEP WATER CHANNEL

PORT OF SACRAMENTO

SA

CR

AM

EN

TO

RIV

ER

CHPACADEMY

DOWNTOWNSACRAMENTO

Market Analysis



HARBOR CENTRAL

The overall vacancy rate across the region dropped to 9.5%, which is 60 BPS lower

than the first quarter of 2016. Each type of shopping center in the Sacramento Region

had vacancy levels drop over the last year. Strip centers declined the most in terms of

vacancy, reaching 11.2% across all submarkets, which is 260 BPS lower than Q1-2016.

Power and regional center vacancy only dropped 30 BPS since last year to 8.5%, but

this still indicates that there is still plenty of life left in bricks-and-mortar retail, despite

some recent news about more major retailers, like Sears for instance, nearing bank-

ruptcy. Evidence of Sacramento’s strength can be attributed by the solid performance

in net absorption for the quarter, resulting in just under 490,000 SF.

The regional average asking rent (on an annual triple net basis) grew, but only margin-

ally over the last year, rising $0.01 per-squarefoot (PSF) settling at $20.39 PSF at the

close of the first quarter. Lifestyle centers continued to command the highest rents in

the Region at $39.48 PSF, although this is nearly 20% lower than one year ago when

lifestyle center rents were at $49.45 PSF, due to the delivery and subsequent leasing

of new centers.

As mentioned earlier, net absorption in Q1-2017 was a robust 490,000 SF. This even

ore significant when compared to the negative net absorption in Q1-2016, which was

–142,000 SF. 2017 is off to a much stronger start, with most submarkets in positive net

absorption territory. Neighborhood and community centers made up the lion’s share

of occupancy change with 335,000 SF of net absorption—more than double that of

power and regional centers, at 106,000 SF.

Two new leases were signed in the first quarter at Rocklin Crossings—a power/regional

center—for 21,000 SF each. The tenants will be TJ Maxx and Sierra Trading Post, once

the two speculative properties complete construction later in 2017. The existing ten-

ants at Rocklin Crossings include Bass Pro Shops, Green Acres Nursery, PetSmart, and

a Wal-Mart Super Center. As for the top sale of the quarter, Country Gables (neigh-

borhood/community center) in Granite Bay was sold by Kimco/Prudential to Merlone

Geier Partners JV for $22M or $157 PSF as part of a five property portfolio.

The top retail story remains Downtown Commons (DOCO) in the heart of the Sacramento

Central Business District (CBD). The long -awaited 294,650 square-foot (SF) lifestyle

center is slated for completion in late 2017. It will include the 20 story (Kimpton)

Sawyer Hotel, along with an office component in what will truly be a mixed-use devel-

opment adjacent to the new Golden 1 Center. Also under construction in the nearby

Midtown neighborhood is The Ice Blocks, with the 7,520 SF Ice Shed component going

up at 1700-1704 R

Street. While the

most unique retail

projects were under

construction in the

CBD and Midtown,

there were plenty of

additional new prop-

erties being built

in the Non-CBD.

The largest of these is the over 700k SF Delta Shores Center on Beach Lake Road at

Interstate 5 in the South Sacramento submarket, by developer Merlone Geier Partners.

Delta Shores will add a Wal-Mart Super Center, an RC Willey furniture store, and many

other big box players to the formerly vacant section of land between Elk Grove and

South Sacramento.

MARKETBEAT

Sacramento Region Retail Q1 2017

cushmanwakefield.com | 1

$18

$19

$20

$21

$22

$23

$24

0

100

200

300

400

2011 2012 2013 2014 2015 2016 2017

Net Absorption (Thousands) Asking Rent, $ PSF

59%

17%

16%

8%

Neighborhood &Community

Strip

Power & Regional Mall

Lifestyle

5.9MSquare Feet

Q1 16 Q1 17 12-Month Forecast

GDP Growth 1.6% 2.0% CPI Growth 1.1% 2.4% Consumer Spending Growth 2.4% 3.1%* Retail Sales Growth 2.5% 5.2%

Regional


Median HH Income $64,889 $66,519 Population Growth 1.1% 0.9% Unemployment 5.5% 5.0%

ECONOMIC INDICATORS

National

Economy Job growth in the first quarter of 2017 was strong on both the national and regional fronts. The U.S. unemployment rate dropped to 4.8%, which is 10 basis points (BPS) lower than one year ago and the lowest national unemployment has been since the fourth quarter of 2007. In the Sacramento Region, the unemployment rate dropped to 5.0%, down 50 BPS since the first quarter of 2016, as total nonfarm employment rose by 1.9%, or 18,000 jobs, totaling 957k employment. Regional household income maintained an upward trajectory, growing by 2.5% year-over-year (YoY) to a median of $66,519. U.S. Gross domestic product (GDP) and consumer spending growth on the national level all posted positive growth in the first quarter, as well, supporting the fact that consumers, overall, are in a better financial position to spend on retail goods than over the last few years. In summary, employment in the Region remains strong and should continue recording modest growth throughout 2017.

Market Overview The overall vacancy rate across the region dropped to 9.5%, which is 60 BPS lower than the first quarter of 2016. Each type of shopping center in the Sacramento Region had vacancy levels drop over the last year. Strip centers declined the most in terms of vacancy, reaching 11.2% across all submarkets, which is 260 BPS lower than Q1-2016. Power and regional center vacancy only dropped 30 BPS since last year to 8.5%, but this still indicates that there is still plenty of life left in bricks-and-mortar retail, despite some recent news about more major retailers, like Sears for instance, nearing bankruptcy. Evidence of Sacramento’s strength can be attributed by the solid performance in net absorption for the quarter, resulting in just under 490,000 SF.

The regional average asking rent (on an annual triple net basis) grew, but only marginally over the last year, rising $0.01 per-square-foot (PSF) settling at $20.39 PSF at the close of the first quarter. Lifestyle centers continued to command the highest rents in the Region at $39.48 PSF, although this is nearly 20% lower than one year ago when lifestyle center rents were at $49.45 PSF, due to the delivery and subsequent leasing of new centers.

As mentioned earlier, net absorption in Q1-2017 was a robust 490,000 SF. This even more significant when compared to the negative net absorption in Q1-2016, which was –142,000 SF. 2017 is off to a much stronger start, with most submarkets in positive net absorption territory. Neighborhood and community centers made up the lion’s share of occupancy change with 335,000 SF of net absorption—more than double that of power and regional centers, at 106,000 SF.

Availability by Type

*Forecast by Cushman & Wakefield

*Source: Moody’s Analytics

Overall Net Absorption/Overall Asking Rent 4-QTR TRAILING AVERAGE

Sacramento Region Retail Market

MARKETBEAT



$28.

01

$27.

45

$25.

95

$25.

05

$24.

83

$23.

95

$23.

31

$21.

59

$20.

85

$20.

75

$19.

65

$18.

19

$16.

48

$16.

11

$15.

06

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

DA

V

FOL

ED

DTM

T

EG

NA

T

ALL

WS

AC RR

AH

W

CO

CH

SSA

C

HW

Y50

RLN

H

WL

$15

$20

$25

$30

$35

$40

$45

$50

$55

2011 2012 2013 2014 2015 2016 2017

Neighborhood & Community StripPower & Regional Lifestyle

Two new leases were signed in the first quarter at Rocklin Crossings—a power/regional center—for 21,000 SF each. The tenants will be TJ Maxx and Sierra Trading Post, once the two speculative properties complete construction later in 2017. The existing tenants at Rocklin Crossings include Bass Pro Shops, Green Acres Nursery, PetSmart, and a Wal-Mart Super Center. As for the top sale of the quarter, Country Gables (neighborhood/community center) in Granite Bay was sold by Kimco/Prudential to Merlone Geier Partners JV for $22M or $157 PSF as part of a five property portfolio.

The top retail story remains Downtown Commons (DOCO) in the heart of the Sacramento Central Business District (CBD). The long-awaited 294,650 square-foot (SF) lifestyle center is slated for completion in late 2017. It will include the 20 story (Kimpton) Sawyer Hotel, along with an office component in what will truly be a mixed-use development adjacent to the new Golden 1 Center. Also under construction in the nearby Midtown neighborhood is The Ice Blocks, with the 7,520 SF Ice Shed component going up at 1700-1704 R Street. While the most unique retail projects were under construction in the CBD and Midtown, there were plenty of additional new properties being built in the Non-CBD. The largest of these is the over 700k SF Delta Shores Center on Beach Lake Road at Interstate 5 in the South Sacramento submarket, by developer Merlone Geier Partners. Delta Shores will add a Wal-Mart Super Center, an RC Willey furniture store, and many other big box players to the formerly vacant section of land between Elk Grove and South Sacramento.

Market Indicators STRONG NET ABSORPTION, STABLE RENTS

Average Asking Rate by Market (NNN) CBD RENTS CONTINUED TO GROW STEADILY

Average Asking Rate by Type (NNN) ALL CENTER TYPES SHOWED RENT DROPS IN THE FIRST QUARTER

Outlook Demand for retail space will remain strong, despite the

current pipeline of properties under construction and proposed.

DOCO and The Ice Blocks will bring a higher level of attention to the urban core of Sacramento, demonstrating the shifting focus of the Region from the suburbs to the lifestyle options in the CBD.

Food and fitness users continue to be the most active in leasing space.

STRONG NET ABSORPTION & DECLINING VACANCY IN THE FIRST QUARTER PROVE THERE IS STILL PLENTY OF LIFE LEFT IN REGIONAL BRICKS-AND-MORTAR RETAIL.

Q1 16 Q1 17 % Growth (1 Year) 12-Month

Forecast Overall Vacancy 10.1% 9.5% -60 BPS Net Absorption (SF) -142.1k 489.6k +445% Under Construction (SF) 511.6k 484.8k -5.5% Average Asking Rent (NNN) $20.38 $20.39 +0.05%

Market Analysis



HARBOR CENTRAL

West Sacramento Retail Market

At the submarket level there were no big winners or losers during the first quarter;

occupancy gains and losses were minimal across the board. The West Sacramento

submarket contains over 1.8M square feet of retail with no space listed for sublease.

The submarket has one of the lowest retail vacancy rates of any submarket in the

region with overall vacancy at 3.1%. The current average asking rate for retail space

in this market is $21.59 per square foot. The market will continue its pattern of fall-

ing vacancy throughout 2017. While rents for first-tier centers have returned to

slow growth mode, this is not yet the case for the rest of the marketplace. But they

are beginning to stabilize for second-tier projects in the region. That being said,

price competition remains fierce for third-tier product in the region and this will

not change any time soon. Harbor Central is well positioned to take advantage of

these market conditions.

MARKETBEAT



SUBMARKET TOTAL BLDGS INVENTORY (SF) OVERALL

VACANCY RATE CURRENT OVERALL NET ABSORPTION

(SF) OVERALL YTD NET

ABSORPTION (SF) UNDER CNSTR (SF) OVERALL

AVERAGE ASKING RENT (NNN)

Downtown/Midtown/East Sacramento 74 1,420,828 2.8% 2,716 2,716 294,380 $25.05 Arden/Howe/Watt 288 5,977,294 15.8% 63,937 63,937 56,546 $20.75 Auburn/Loomis/Lincoln 170 3,051,795 5.4% 33,845 33,845 0 $23.31 Carmichael/Orangevale/Citrus Heights 360 6,638,680 12.4% 124,011 124,011 3,470 $19.65 Davis 37 1,055,589 6.5% -24,872 -24,872 0 $28.01 El Dorado Hills 134 2,458,861 8.1% -10,335 -10,335 0 $25.95 Elk Grove 220 4,284,095 4.5% 4,304 4,304 0 $24.83 Folsom 191 4,106,948 7.2% 4,175 4,175 0 $27.45 Highway 50/Rancho Cordova 156 3,213,349 13.6% 142,139 142,139 87,855 $16.48 Natomas 153 3,106,348 8.5% 11,845 11,845 36,496 $23.95 Rio Linda/North Highlands 179 2,909,466 12.7% 15,088 15,088 0 $16.11 Roseville/Rocklin 488 10,130,443 7.9% 120,534 120,534 7,000 $20.85 South Sacramento 351 7,392,608 10.9% 895 895 0 $18.19 West Sacramento 59 1,789,882 3.1% -4,402 -4,402 0 $21.59 Woodland 80 2,259,770 9.7% 5,713 5,713 0 $15.06 SACRAMENTO TOTALS 2,940 59,795,956 9.5% 489,593 489,593 485,747 $20.39 *Rental rates reflect Triple Net asking $psf/year SHOPPING CENTERS BY TYPE TOTAL BLDGS INVENTORY

(SF) OVERALL VACANCY RATE CURRENT OVERALL

NET ABSORPTION (SF)

OVERALL YTD NET

ABSORPTION (SF) UNDER CNSTR (SF) OVERALL

AVERAGE ASKING RENT (NNN)

Neighborhood & Community 1,652 36,702,962 9.4% 335,173 335,173 184,367 $21.05 Strip 885 8,927,401 11.2% 42,087 42,087 21,520 $21.02 Power & Regional 342 12,343,714 8.5% 106,204 106,204 0 $18.37 Lifestyle 61 1,821,879 9.7% 6,129 6,129 279,860 $39.48

Key Lease Transactions Q1 2017 PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET 5440 Crossings Drive 21,000 TJ Maxx New Roseville/Rocklin 5446 Crossings Drive 21,000 Sierra Trading Post New Roseville/Rocklin 3261-3269 Stanford Ranch Road 15,000 Undisclosed New Roseville/Rocklin 11415 Folsom Boulevard 14,689 Comfort Furniture Renewal Highway 50/Rancho Cordova

Key Sales Transactions Q1 2017 PROPERTY SF SELLER/BUYER PRICE / $PSF SUBMARKET Country Gables 140,184 Kimco JV Prudential/Merlone Geier $22,000,000 / $157 Placer County 7477 Watt Avenue 121,618 Westwood Financial/Ethan Conrad $10,000,000 / $82 Rio Linda/North Highlands Marketplace Shopping Center 113,000 Equity One/Regency Centers $24,700,000 / $218 Davis Wal-Mart Super Center, Orangevale 98,000 Evergreen Commercial/

Frank Bommarito $13,500,000 / $138 Carmichael/Orangevale/ Citrus Heights

MARKETBEAT



$18

$19

$20

$21

$22

$23

$24

0

100

200

300

400

2011 2012 2013 2014 2015 2016 2017

Net Absorption (Thousands) Asking Rent, $ PSF

59%

17%

16%

8%

Neighborhood &Community

Strip

Power & Regional Mall

Lifestyle

5.9MSquare Feet


GDP Growth 1.6% 2.0% CPI Growth 1.1% 2.4% Consumer Spending Growth 2.4% 3.1%* Retail Sales Growth 2.5% 5.2%

Regional


Median HH Income $64,889 $66,519 Population Growth 1.1% 0.9% Unemployment 5.5% 5.0%

ECONOMIC INDICATORS

National

Economy Job growth in the first quarter of 2017 was strong on both the national and regional fronts. The U.S. unemployment rate dropped to 4.8%, which is 10 basis points (BPS) lower than one year ago and the lowest national unemployment has been since the fourth quarter of 2007. In the Sacramento Region, the unemployment rate dropped to 5.0%, down 50 BPS since the first quarter of 2016, as total nonfarm employment rose by 1.9%, or 18,000 jobs, totaling 957k employment. Regional household income maintained an upward trajectory, growing by 2.5% year-over-year (YoY) to a median of $66,519. U.S. Gross domestic product (GDP) and consumer spending growth on the national level all posted positive growth in the first quarter, as well, supporting the fact that consumers, overall, are in a better financial position to spend on retail goods than over the last few years. In summary, employment in the Region remains strong and should continue recording modest growth throughout 2017.

Market Overview The overall vacancy rate across the region dropped to 9.5%, which is 60 BPS lower than the first quarter of 2016. Each type of shopping center in the Sacramento Region had vacancy levels drop over the last year. Strip centers declined the most in terms of vacancy, reaching 11.2% across all submarkets, which is 260 BPS lower than Q1-2016. Power and regional center vacancy only dropped 30 BPS since last year to 8.5%, but this still indicates that there is still plenty of life left in bricks-and-mortar retail, despite some recent news about more major retailers, like Sears for instance, nearing bankruptcy. Evidence of Sacramento’s strength can be attributed by the solid performance in net absorption for the quarter, resulting in just under 490,000 SF.

The regional average asking rent (on an annual triple net basis) grew, but only marginally over the last year, rising $0.01 per-square-foot (PSF) settling at $20.39 PSF at the close of the first quarter. Lifestyle centers continued to command the highest rents in the Region at $39.48 PSF, although this is nearly 20% lower than one year ago when lifestyle center rents were at $49.45 PSF, due to the delivery and subsequent leasing of new centers.

As mentioned earlier, net absorption in Q1-2017 was a robust 490,000 SF. This even more significant when compared to the negative net absorption in Q1-2016, which was –142,000 SF. 2017 is off to a much stronger start, with most submarkets in positive net absorption territory. Neighborhood and community centers made up the lion’s share of occupancy change with 335,000 SF of net absorption—more than double that of power and regional centers, at 106,000 SF.

Availability by Type

*Forecast by Cushman & Wakefield

*Source: Moody’s Analytics

Overall Net Absorption/Overall Asking Rent 4-QTR TRAILING AVERAGE

Tenant Summary



HARBOR CENTRAL

Headquartered in San Carlos, Calif., Kelly-Moore is one of the largest employee-

owned paint companies in the United States. Each employee-owner is commit-

ted to offering quality paint products and exceptional customer service.

A leader and innovator of waterborne coating technology, Kelly-Moore was

the first major paint company to offer recycled paints along with the large selection of colors and decorative sheens.

Trusted and preferred by professionals since 1946 as the “Painter’s Paint Store” for its high quality, performance

and consistency, Kelly-Moore’s paints are safe and easy to use for everyone.

Back in 1965, Fred DeLuca set out to fulfill his dream of becoming a medical doc-

tor. Searching for a way to help pay for his education, a family friend suggested

he open a submarine sandwich shop. Today, the SUBWAY® brand is the world’s

largest submarine sandwich chain with more than 34,000 locations around the world. We’ve become the leading

choice for people seeking quick, nutritious meals that the whole family can enjoy. From the beginning, Fred has

had a clear vision for the future of the SUBWAY® brand. As we continue to grow, we are guided by his passion for

delighting customers by serving fresh, delicious, made-to-order sandwiches.

Raku Sushi is a new addition to Harbor Central, specializing in sushi, teryaki and

other japanese cuisine. They are a well-established landmark in West Sacramento,

moving to Harbor Central to expand their restaurant space and visibility.

Domino’s is the recognized world leader in pizza delivery operating a network of company and

franchise owned stores around the world. Like most corporate success stories, Domino’s started

out small – with just one store in 1960. However, in 1978 the 200th Domino’s store opened, and

things really began to cook. By 1983 there were 1,000 Domino’s stores and 5,000 in 1989.

Today, there are over 13,800 stores – including more than 5,000 outside the United States.

Tenant Summary



HARBOR CENTRAL

Check Into Cash is a national leader in aff ordable short-term credit solu-tion. They provide payday advances, in-store cash advances, online pay-day loans, title loans, title pawns,check cashing, Western Union®, walk-in bill pay, reloadable prepaid U.S. Money Cards, and ATMs in their centers

nationwide. Check Into Cash is truly your one-stop money shop. Founded in 1993 by business entrepreneur and philanthropist W. Allan Jones in Cleveland, Tennessee, Check Into Cash has grown to more than 1000 branch locations in 30 states. The fi nancial products they off er are also available online in a number of states. Check Into Cash is considered to be the pioneer of the payday advance industry.

Cricket Wireless is a prepaid wireless service provider in the United States. Cricket Wireless off ers voice, text, and data and is a wholly owned sub-sidiary of AT&T. Cricket Wireless was founded in 1999 by Leap Wireless

International, Inc. On July 12, 2013, AT&T Inc. agreed to acquire Cricket’s parent company Leap Wireless International for $1.2 billion. The merger was approved by the Federal Communications Commission on March 13, 2014, and later that same day, Leap Wireless announced the comple-tion of its acquisition by AT&T

Tenant Summary

Mail Boxes Etc., Inc. (MBE), a wholly owned subsidiary of United Parcel Service (“UPS”) of America, Inc., is the world’s largest franchisor of retail shipping, postal, printing and business service centers. The UPS Store® and Mail Boxes Etc.® together comprise nearly 4,700 independently owned locations in the U.S., Puerto Rico and Canada, providing convenient and value-added business services to the small-offi ce/home-offi ce (SOHO) market, corporate "road warriors," and consumers.

Tenant Summary



HARBOR CENTRAL

Rent Roll

Tenant Name Rate Per YearSuite Number Amount Per Year Rent Rent RentLease Dates Rate Per Month Changes On Changes To Changes ToLease Term Amount Per Month Date $/SF-Annual $/SF-Monthly

1. Check Into Cash $23.64 Dec-2008 $23.64 $1.97Suite: 809 $23,640.00

9/27/2004 - 11/30/2018 $1.9714 Years 2 Months 4 Days $1,970.00

2. Check Into Cash (Option 1) $25.72Suite: 809 $25,716.00




4. Harbor Dental $21.17 Sep-2016 $20.75 $1.73Suite: 825 $63,679.36 Sep-2017 $21.17 $1.76

1/24/1994 - 9/30/2020 $1.76 Sep-2018 $21.59 $1.8026 Years 8 Months 8 Days $5,294.08 Sep-2019 $22.02 $1.84

5. Harbor Dental (Option 1) $22.46 Oct-2021 $22.91 $1.91Suite: 825 $67,570.00 Oct-2022 $23.37 $1.95

10/1/2020 - 9/30/2025 $1.87 Oct-2023 $23.84 $1.995 Years $5,631.00 Oct-2024 $24.32 $2.03

6. Harbor Nail & Spa $15.45 Nov-2016 $15.45 $1.29Suite: 815 $18,540.00 Nov-2017 $15.91 $1.33

5/1/2015 - 10/31/2020 $1.29 Nov-2018 $16.39 $1.375 Years 6 Months $1,548.00 Nov-2019 $16.88 $1.41

7. Harbor Nail & Spa (Option 1) $16.88 Nov-2021 $17.39 $1.45Suite: 815 $20,259.00 Nov-2022 $17.91 $1.49

11/1/2020 - 10/31/2023 $1.413 Years $1,688.00

8. Kelly-Moore Paints $24.60 Aug-2017 $24.60 $2.05Suite: 831 $147,600.00 Aug-2018 $25.20 $2.10

6/15/2006 - 7/31/2021 $2.05 Aug-2019 $25.80 $2.1515 Years 1 Month 17 Days $12,300.00 Aug-2020 $26.40 $2.20

9. Subway $21.00 Mar-2017 $21.00 $1.75Suite: 817 $25,200.00 Mar-2018 $21.60 $1.80

7/19/1991 - 3/22/2022 $1.75 Mar-2019 $22.20 $1.8530 Years 8 Months 4 Days $2,100.00 Mar-2020 $22.80 $1.90

Mar-2021 $23.40 $1.95

10. Subway (Option 1) $24.00 Mar-2024 $25.20 $2.10Suite: 817 $28,800.00

3/23/2022 - 3/22/2027 $2.005 Years $2,400.00


3/23/2027 - 3/22/2032 $2.255 Years $2,700.00

12. Cricket Wireless $22.22 Aug-2017 $22.22 $1.85Suite: 811 $26,664.00 May-2020 $23.40 $1.95

5/1/2017 - 4/30/2022 $1.855 Years $2,220.00

13. Cricket Wireless (Option 1) $24.60 May-2024 $25.80 $2.15Suite: 811 $29,520.00 May-2026 $27.70 $2.31

5/1/2022 - 4/30/2027 $2.055 Years $2,460.00

14. UPS $15.00Suite: 813 $30,000.00


15. UPS (Option 1) $16.88Suite: 813 $33,750.00

5/1/2022 - 4/30/2027 $1.415 Years $2,813.00

16. Raku Sushi $15.60 Apr-2021 $17.16 $1.43Suite: 805 $56,004.00 Apr-2022 $17.50 $1.46

4/6/2016 - 3/31/2026 $1.30 Apr-2023 $17.85 $1.499 Years 11 Months 26 Days $4,667.00 Apr-2024 $18.21 $1.52

Apr-2025 $18.57 $1.55

17. Raku Sushi (Option 1) $18.57 Apr-2027 $18.95 $1.58Suite: 805 $66,683.00 Apr-2028 $19.32 $1.61

4/1/2026 - 3/31/2031 $1.55 Apr-2029 $19.71 $1.645 Years $5,557.00 Apr-2030 $20.11 $1.68

19. Domino's Pizza $9.60 Jul-2022 $10.56 $0.88Suite: 829 $28,800.00

7/1/2017 - 6/30/2027 $0.8010 Years $2,400.00

Option

Renewal AssumptionMarket

Renewal AssumptionOption


Market


Market

Market


Option

Renewal Assumption


Market


Market

Rent Details Renewal Assumption

Market

Option

Option

Option

Market

3,59016.17%

3,00013.51%

3,59016.17%

2,0009.01%

General Tenant Information

2,0009.01%

1,2005.41%

1,2005.41%

5.41%

1,2005.41%

1,2005.41%

1,200

1,2005.41%

6,00027.03%

4.50%

3,00813.55%


1,0004.50%

1,000


Initial AreaBuilding Share %

1,0004.50%

Rent Details

General Tenant Information Rent Details


Rent Details





3,00813.55%

1,2005.41%

Tenant Summary



HARBOR CENTRAL

Rent Roll continued

Tenant Name Rate Per YearSuite Number Amount Per Year Rent Rent RentLease Dates Rate Per Month Changes On Changes To Changes ToLease Term Amount Per Month Date $/SF-Annual $/SF-Monthly

1. Check Into Cash $23.64 Dec-2008 $23.64 $1.97Suite: 809 $23,640.00






4. Harbor Dental $21.17 Sep-2016 $20.75 $1.73Suite: 825 $63,679.36 Sep-2017 $21.17 $1.76

1/24/1994 - 9/30/2020 $1.76 Sep-2018 $21.59 $1.8026 Years 8 Months 8 Days $5,294.08 Sep-2019 $22.02 $1.84

5. Harbor Dental (Option 1) $22.46 Oct-2021 $22.91 $1.91Suite: 825 $67,570.00 Oct-2022 $23.37 $1.95

10/1/2020 - 9/30/2025 $1.87 Oct-2023 $23.84 $1.995 Years $5,631.00 Oct-2024 $24.32 $2.03

6. Harbor Nail & Spa $15.45 Nov-2016 $15.45 $1.29Suite: 815 $18,540.00 Nov-2017 $15.91 $1.33

5/1/2015 - 10/31/2020 $1.29 Nov-2018 $16.39 $1.375 Years 6 Months $1,548.00 Nov-2019 $16.88 $1.41

7. Harbor Nail & Spa (Option 1) $16.88 Nov-2021 $17.39 $1.45Suite: 815 $20,259.00 Nov-2022 $17.91 $1.49

11/1/2020 - 10/31/2023 $1.413 Years $1,688.00

8. Kelly-Moore Paints $24.60 Aug-2017 $24.60 $2.05Suite: 831 $147,600.00 Aug-2018 $25.20 $2.10

6/15/2006 - 7/31/2021 $2.05 Aug-2019 $25.80 $2.1515 Years 1 Month 17 Days $12,300.00 Aug-2020 $26.40 $2.20

9. Subway $21.00 Mar-2017 $21.00 $1.75Suite: 817 $25,200.00 Mar-2018 $21.60 $1.80

7/19/1991 - 3/22/2022 $1.75 Mar-2019 $22.20 $1.8530 Years 8 Months 4 Days $2,100.00 Mar-2020 $22.80 $1.90

Mar-2021 $23.40 $1.95


3/23/2022 - 3/22/2027 $2.005 Years $2,400.00


3/23/2027 - 3/22/2032 $2.255 Years $2,700.00

12. Cricket Wireless $22.22 Aug-2017 $22.22 $1.85Suite: 811 $26,664.00 May-2020 $23.40 $1.95

5/1/2017 - 4/30/2022 $1.855 Years $2,220.00

13. Cricket Wireless (Option 1) $24.60 May-2024 $25.80 $2.15Suite: 811 $29,520.00 May-2026 $27.70 $2.31

5/1/2022 - 4/30/2027 $2.055 Years $2,460.00

14. UPS $15.00Suite: 813 $30,000.00


15. UPS (Option 1) $16.88Suite: 813 $33,750.00

5/1/2022 - 4/30/2027 $1.415 Years $2,813.00

16. Raku Sushi $15.60 Apr-2021 $17.16 $1.43Suite: 805 $56,004.00 Apr-2022 $17.50 $1.46

4/6/2016 - 3/31/2026 $1.30 Apr-2023 $17.85 $1.499 Years 11 Months 26 Days $4,667.00 Apr-2024 $18.21 $1.52

Apr-2025 $18.57 $1.55

17. Raku Sushi (Option 1) $18.57 Apr-2027 $18.95 $1.58Suite: 805 $66,683.00 Apr-2028 $19.32 $1.61

4/1/2026 - 3/31/2031 $1.55 Apr-2029 $19.71 $1.645 Years $5,557.00 Apr-2030 $20.11 $1.68

19. Domino's Pizza $9.60 Jul-2022 $10.56 $0.88Suite: 829 $28,800.00

7/1/2017 - 6/30/2027 $0.8010 Years $2,400.00

Option

Renewal AssumptionMarket



Market


Market

Market


Option

Renewal Assumption


Market


Market

Rent Details Renewal Assumption

Market

Option

Option

Option

Market

3,59016.17%

3,00013.51%

3,59016.17%

2,0009.01%


2,0009.01%

1,2005.41%

1,2005.41%

5.41%

1,2005.41%

1,2005.41%

1,200

1,2005.41%

6,00027.03%

4.50%

3,00813.55%


1,0004.50%

1,000


Initial AreaBuilding Share %

1,0004.50%

Rent Details



Rent Details





3,00813.55%

1,2005.41%

Pending

Financial Analysis



HARBOR CENTRAL

Overview

Harbor Central is an attractive retail center located at the intersection of Harbor Boulevard and West Capitol Avenue in West Sacramento. Developed by the ownership in the 80’s, the property has served its intended purpose well. Conveniently located near the new IKEA/Home Depot/Super Wal-Mart development in West Sacramento, the property benefits from strong traffic counts and easy access to Downtown Sacramento, Southport and the Highway 50/Interstate 80 freeways.

The property and has been well maintained and updated offering the investor peace of mind. Harbor Central offers an investor a good tenant mix with long track records.

Methodology

Harbor Central is being offered on an all cash basis. This Financial Analysis section contains a ten-year cash flow study based upon a set of assumptions that have been made relating to the market rents as well as the costs of potentially re-leasing the space in the future and the expenses associated with the operation of the property. A vacancy factor of 8% was used throughout the hold period. The sale in the tenth year is based upon the net operating income projected for the eleventh year and uses an 7% exit cap. The detail of assumptions is found on the following page.

Projected Returns

This investment provides the potential investor with an excellent opportunity to acquire an established retail center that boasts an excellent mix of tenants. These tenants help to insulate the ownership from any one given industry. In addition, there are no tenants with expirations until the second year of the hold period. The investment is expected to produce an actual first year cap rate of 6.72% and a cash on cash return of 7.22%. The ten year unleveraged IRR is projected to be 8.93% and the leveraged IRR is projected to be 15.6%.

Analysis Summary

In summary, this is a perfect long term investment for the investor looking for secure, stable returns with the ability to capture future rent growth.

Financial Analysis



HARBOR CENTRAL

Financial Analysis - Assumptions & Value Indicators

Analysis Period Suggested List Price $5,700,000 Raku Sushi NNN $1.30Commencement Date October 1, 2017 Actual Cap Rate 6.72% Check Into Cash NNN $1.97End Date September 30, 2026 Cricket Wireless NNN $1.85Term 10 Years 1st year NOI $383,012 UPS Store NNN $1.25

Price per foot $256.78 PSF Domino's Pizza NNN $0.85Area Measures Nail Salon NNN $1.29

Retail (not verified) 22,198 Unleveraged Present Value $6,559,552 Subway NNN $1.75TOTAL RSF 22,198 Leveraged Present Value $7,554,133 Harbor Dental NNN $1.75

Kelly Moore Paint NNN $2.05Growth / Vacancy Rates 10 Year Hold Returns

General Inflation Rate 2.75% Calculated Resale $8,662,246Operating Expenses 2.75% Exit Cap Rate 7.00% Lease Terms RetailProperty Taxes 2.0% Unleveraged IRR 8.93% Starting Rents (FY 2017) $1.50 PSFMarket Rent Growth (compounded monthly) Leveraged IRR 15.60% Annual Rent Escalations 3.00%

FY ending September 2018 Starting Rent Lease Expires 5 YearsFY ending September 2019 3.0% Expense Reimbursement NNNFY ending September 2021 4.0% Management Fee: 4.00% Rent Abatements 6 monthsFY ending September 2022+ 5.0% 2016-2017 Millage Rate: 1.0900% Renewal Probability 70%

Direct Levies $3,648General Vacancy Rate 8.0% Insurance $13,000 Tenant Improvements ($/RSF) Office

Maint/Repairs/Supplies $28,500 New $10.00 PSFLandscaping $8,500 Renewal $0.00 PSF

Loan Amount $3,813,832 Parking Lot & Com. Area $15,000 Weighted Average $3.00 PSFInterest Rate 4.25% Utilities and Contract Services $35,750 Leasing CommissionsTerm $25.00 PSF General & Admin $6,500 New 6.00%LTV 70% Renewal 3.00%

Weighted Average 3.90%Downtime

1 New 2 MonthsRenewal 0 MonthsWeighted Average 0.6 Months

The information contained herein has been given to us by the owner of the property or other sources we deem reliable. We have no reason to doubt its accuracy, but we do not guarantee it. All information should be verified prior to purchase or lease.

Market rent for renewals uses current rents

New Loan Terms

Current Lease TermsGlobal Property Values

General Renewal Leasing Assumptions (1)

Annual Operating Expenses

Financial Assumptions Notes

Investment Summary - Harbor Central, West Sacramento CA

Capital MarketsCassidy Turley Northern Californiawww.ctbt.com

Erik Neese and Shaun Morrow | 916.375.1500

Lic#01243960 - Lic#00548078

Financial Analysis



HARBOR CENTRAL

Financial Analysis - Prospective Cash FlowYear 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11

For the Years Ending Sep-2019 Sep-2020 Sep-2021 Sep-2022 Sep-2023 Sep-2024 Sep-2025 Sep-2026 Sep-2027 Sep-2028

Rental Revenue Potential Base Rent 429,611 436,646 440,374 423,376 436,439 450,849 461,099 484,373 519,810 586,128 Absorption & Turnover Vacancy 0 0 -19,860 0 -4,217 -4,598 0 -14,825 -29,276 -6,210 Free Rent 0 0 0 -6,256 -1,460 -1,379 0 -4,448 -8,783 -1,863 Scheduled Base Rent 429,611 436,646 420,514 417,120 430,763 444,872 461,099 465,100 481,752 578,055Total Rental Revenue 429,611 436,646 420,514 417,120 430,763 444,872 461,099 465,100 481,752 578,055

Other Tenant Revenue Total Expense Recoveries 193,303 198,003 192,489 206,318 210,165 215,636 222,335 223,941 225,150 246,044Total Other Tenant Revenue 193,303 198,003 192,489 206,318 210,165 215,636 222,335 223,941 225,150 246,044

Total Tenant Revenue 622,914 634,649 613,003 623,438 640,927 660,507 683,433 689,041 706,902 824,099

Other Revenue Meinike Reimburesment 2,466 2,534 2,603 2,675 2,749 2,824 2,902 2,982 3,064 3,148Total Other Revenue 2,466 2,534 2,603 2,675 2,749 2,824 2,902 2,982 3,064 3,148

Potential Gross Revenue 625,380 637,183 615,607 626,113 643,676 663,332 686,335 692,023 709,966 827,247

Vacancy & Credit Loss Vacancy Allowance -34,369 -34,932 -15,370 -33,370 -30,581 -31,359 -36,888 -23,569 -11,606 -40,531Total Vacancy & Credit Loss -34,369 -34,932 -15,370 -33,370 -30,581 -31,359 -36,888 -23,569 -11,606 -40,531

Effective Gross Revenue 591,011 602,251 600,237 592,743 613,094 631,972 649,447 668,454 698,359 786,716

Operating Expenses Managment Fee 23,640 24,090 24,009 23,710 24,524 25,279 25,978 26,738 27,934 31,469 Property Tax 63,373 64,640 65,933 67,252 68,597 69,968 71,368 72,795 74,251 82,340 Direct Levies 3,648 3,648 3,648 3,648 3,648 3,648 3,648 3,648 3,648 3,648 Insurance 13,358 13,725 14,102 14,490 14,889 15,298 15,719 16,151 16,595 17,051 Maint/Repairs/Supplies 29,284 30,089 30,917 31,767 32,640 33,538 34,460 35,408 36,382 37,382 Landscaping 8,734 8,974 9,221 9,474 9,735 10,003 10,278 10,560 10,851 11,149 Parking Lot & Com Area 15,413 15,836 16,272 16,719 17,179 17,652 18,137 18,636 19,148 19,675 Utilities & Contract Services 36,733 37,743 38,781 39,848 40,944 42,069 43,226 44,415 45,637 46,892 General & Admin 6,663 6,829 7,000 7,175 7,354 7,538 7,726 7,920 8,118 8,321Total Operating Expenses 200,844 205,575 209,883 214,082 219,509 224,993 230,540 236,271 242,563 257,926

Net Operating Income 390,167 396,677 390,354 378,661 393,585 406,979 418,907 432,183 455,796 528,789

Leasing Costs Tenant Improvements 0 0 0 10,032 1,718 2,118 0 11,211 11,872 1,967 Leasing Commissions 0 0 0 55,695 5,988 5,659 0 18,244 36,028 7,642 Total Leasing Costs 0 0 0 65,727 7,706 7,777 0 29,456 47,900 9,610

Total Leasing & Capital Costs 0 0 0 65,727 7,706 7,777 0 29,456 47,900 9,610

Cash Flow Before Debt Service 390,167 396,677 390,354 312,934 385,880 399,202 418,907 402,727 407,896 519,180

Debt Service Interest New First 163,095 158,974 154,673 150,185 145,504 140,620 135,523 130,206 124,659 0 Total Interest 163,095 158,974 154,673 150,185 145,504 140,620 135,523 130,206 124,659 0

Principal New First 95,117 99,239 103,539 108,027 112,708 117,593 122,689 128,006 133,553 0 Total Principal 95,117 99,239 103,539 108,027 112,708 117,593 122,689 128,006 133,553 0

Total Debt Service 258,212 258,213 258,212 258,212 258,212 258,213 258,212 258,212 258,212 0

Cash Flow After Debt Service 131,955 138,464 132,142 54,722 127,668 140,989 160,695 144,515 149,684 519,180

258,212

124,800

000

0

383,012

167,047167,047

91,16591,165

3,64813,00028,500

8,50015,00035,7506,500

196,197

383,012

Year 1

Sep-2018

421,71400

421,714421,714

188,831188,831

610,545

2,4002,400

62,130

612,945

-33,737-33,737

579,208

23,168

Financial Analysis



HARBOR CENTRAL

Financial Analysis - Cash Flow Continued

Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11

For the Years Ending Sep-2019 Sep-2020 Sep-2021 Sep-2022 Sep-2023 Sep-2024 Sep-2025 Sep-2026 Sep-2027 Sep-2028

Rental Revenue Potential Base Rent 429,611 436,646 440,374 423,376 436,439 450,849 461,099 484,373 519,810 586,128 Absorption & Turnover Vacancy 0 0 -19,860 0 -4,217 -4,598 0 -14,825 -29,276 -6,210 Free Rent 0 0 0 -6,256 -1,460 -1,379 0 -4,448 -8,783 -1,863 Scheduled Base Rent 429,611 436,646 420,514 417,120 430,763 444,872 461,099 465,100 481,752 578,055Total Rental Revenue 429,611 436,646 420,514 417,120 430,763 444,872 461,099 465,100 481,752 578,055

Other Tenant Revenue Total Expense Recoveries 193,303 198,003 192,489 206,318 210,165 215,636 222,335 223,941 225,150 246,044Total Other Tenant Revenue 193,303 198,003 192,489 206,318 210,165 215,636 222,335 223,941 225,150 246,044

Total Tenant Revenue 622,914 634,649 613,003 623,438 640,927 660,507 683,433 689,041 706,902 824,099

Other Revenue Meinike Reimburesment 2,466 2,534 2,603 2,675 2,749 2,824 2,902 2,982 3,064 3,148Total Other Revenue 2,466 2,534 2,603 2,675 2,749 2,824 2,902 2,982 3,064 3,148

Potential Gross Revenue 625,380 637,183 615,607 626,113 643,676 663,332 686,335 692,023 709,966 827,247

Vacancy & Credit Loss Vacancy Allowance -34,369 -34,932 -15,370 -33,370 -30,581 -31,359 -36,888 -23,569 -11,606 -40,531Total Vacancy & Credit Loss -34,369 -34,932 -15,370 -33,370 -30,581 -31,359 -36,888 -23,569 -11,606 -40,531

Effective Gross Revenue 591,011 602,251 600,237 592,743 613,094 631,972 649,447 668,454 698,359 786,716

Operating Expenses Managment Fee 23,640 24,090 24,009 23,710 24,524 25,279 25,978 26,738 27,934 31,469 Property Tax 63,373 64,640 65,933 67,252 68,597 69,968 71,368 72,795 74,251 82,340 Direct Levies 3,648 3,648 3,648 3,648 3,648 3,648 3,648 3,648 3,648 3,648 Insurance 13,358 13,725 14,102 14,490 14,889 15,298 15,719 16,151 16,595 17,051 Maint/Repairs/Supplies 29,284 30,089 30,917 31,767 32,640 33,538 34,460 35,408 36,382 37,382 Landscaping 8,734 8,974 9,221 9,474 9,735 10,003 10,278 10,560 10,851 11,149 Parking Lot & Com Area 15,413 15,836 16,272 16,719 17,179 17,652 18,137 18,636 19,148 19,675 Utilities & Contract Services 36,733 37,743 38,781 39,848 40,944 42,069 43,226 44,415 45,637 46,892 General & Admin 6,663 6,829 7,000 7,175 7,354 7,538 7,726 7,920 8,118 8,321Total Operating Expenses 200,844 205,575 209,883 214,082 219,509 224,993 230,540 236,271 242,563 257,926

Net Operating Income 390,167 396,677 390,354 378,661 393,585 406,979 418,907 432,183 455,796 528,789

Leasing Costs Tenant Improvements 0 0 0 10,032 1,718 2,118 0 11,211 11,872 1,967 Leasing Commissions 0 0 0 55,695 5,988 5,659 0 18,244 36,028 7,642 Total Leasing Costs 0 0 0 65,727 7,706 7,777 0 29,456 47,900 9,610

Total Leasing & Capital Costs 0 0 0 65,727 7,706 7,777 0 29,456 47,900 9,610

Cash Flow Before Debt Service 390,167 396,677 390,354 312,934 385,880 399,202 418,907 402,727 407,896 519,180

Debt Service Interest New First 163,095 158,974 154,673 150,185 145,504 140,620 135,523 130,206 124,659 0 Total Interest 163,095 158,974 154,673 150,185 145,504 140,620 135,523 130,206 124,659 0

Principal New First 95,117 99,239 103,539 108,027 112,708 117,593 122,689 128,006 133,553 0 Total Principal 95,117 99,239 103,539 108,027 112,708 117,593 122,689 128,006 133,553 0

Total Debt Service 258,212 258,213 258,212 258,212 258,212 258,213 258,212 258,212 258,212 0

Cash Flow After Debt Service 131,955 138,464 132,142 54,722 127,668 140,989 160,695 144,515 149,684 519,180

258,212

124,800

000

0

383,012

167,047167,047

91,16591,165

3,64813,00028,500

8,50015,00035,7506,500

196,197

383,012

Year 1

Sep-2018

421,71400

421,714421,714

188,831188,831

610,545

2,4002,400

62,130

612,945

-33,737-33,737

579,208

23,168

Addendum



HARBOR CENTRAL

Sale Procedures

All investors should base their offers and pricing on the “As-Is, Where-Is” condition of the property, assuming the current debt. Qualified prospective investors will have the oppor-tunity to inspect the property. Each prospective investor is to rely upon its own investiga-tion, evaluation and judgment as to the condition of the property.

Inquiries regarding Harbor Central should be directed to either of the following:

Harbor Dental

Since 1992, Harbor Dental Group and its associates have taken great pleasure in serving the Sacramento community. Dr. Alex Vilderman, along with his attentive and courte-ous team, take pride in treating each patient like their own family. Harbor Dental Group specializes in dental implants, crowns, bridges, root canals, partials, dentures, Invisalign®, inlays and onlays, sealants, veneers and Periodontal treatments.

Erik NeeseDirectorCapital Markets [email protected] #01243960

Shaun Morrow, CCIMSenior DirectorRetail [email protected] #00548078

400 Capitol Mall, Suite 1800Sacramento, California 95814

ph: 916-288-4800fx: 916-446-0024

Cushman & Wakefi eldwww.cushmanwakefi eld.com

Documents

OM Harbor Central CW JULY.2017.001 · River Delta. It is directly west of Sacramento, the State Capital of California, and northeast of the Bay Area counties of Solano and Napa. The