Pieology & Restaurants at Rio Rancho Towne Center II Rancho Valley Dr Pomona C… · County Fair, and the NHRA Auto Club Raceway at Pomona (formerly known as Pomona Raceway) home

Pieology & Restaurants at Rio Rancho Towne Center II2051 RANCHO VALLEY DRIVE, POMONA, CALIFORNIA 91766

CAPITAL MARKETS | NATIONAL RETAIL PARTNERS | OFFERING MEMORANDUM

Exclusively Marketed by

INVESTMENT ADVISORS

JOHN READ + 1 949 725 8606Lic. 01359444 [email protected]

MEGAN WOOD + 1 949 725 8423Lic. 01516027 [email protected]

CBRE-Newport Beach 3501 Jamboree Rd., Ste 100Newport Beach, CA 92660F + 1 949 725 8545www.cbre.com/nrpwest

JIMMY SLUSHER + 1 949 725 8507 Lic. 01857569 [email protected]

PHILIP D. VOORHEES + 1 949 725 8521Lic. 01252096 [email protected]

KIRK BRUMMER + 1 949 725 8418Lic. [email protected]

NRP-WEST TEAM

Todd GoodmanPreston FetrowKirk Brummer

Philip D. VoorheesJohn Read

Megan Wood

Jimmy SlusherMatt BursonJames Tyrrell

For all of our available listings, please visit:www.cbre.com/nrpwest

INVESTMENT SUMMARYInvestment Highlights

1AREA OVERVIEWCity Overview

County Overview

4PROPERTY OVERVIEW

Parcel MapSite Plan

14TENANT PROFILES

18FINANCIALS

AssumptionsCash FlowRent Roll

20

AERIAL

OWNED BY WATER DISTRICT (M

WD)

RIO RANCHO TOWNE CENTER

MARTIN LUTHER KING JR.MEMORIAL PARK

LEXINGTON ELEMENTARY

FUTURE HOTEL

FUTURE RETAIL±6,300 SF

S. PARK AVENUE

W. LEXINGTON AVENUEWELLSFARGO

LEE NAILSAND SPA

PAMPER NAIL AND SPA

¨

RANCHO VALLEY DRIVE

S. WHIT

E AVENUE

STATE R

OU

TE 71

(63,000 CP

D)

RIO RANCHO ROADRIO RANCHO TOWNE CENTER II

GAREY HIGH SCHOOL (1,674 STUDENTS)

FUTURE RESIDENTIAL DEVELOPMENT

Traffic Counts (CPD Daily Averages)

Interstate 10(at State Route 57)

240,000State Route 57(at Interstate 10)

154,000State Route 60 (at State Route 71)

212,000

PIEOLOGY & RESTAURANTS AT RIO RANCHO TOWNE CENTER II

100% LEASED, LONG TERM STABILITY

• Stable Income with Improving Returns – Net Operating Income is

projected to increase more than $69,000 (26%) over the anticipated hold

period, providing a strong hedge against inflation

• NNN and Admin Fees – Pieology & Restaurants at Rio Rancho Towne

Center II feature NNN leases plus 10% administrative fee recapture,

resulting in few, if any capital responsibilities – Operating costs reside with

the property’s tenants, not the landlord

HIGH IDENTITY LOCATION WITHIN A NEWLY CONSTRUCTED TARGET-SHADOW ANCHORED SHOPPING CENTER

• Central Location – Rio Rancho Towne Center is centrally located along

State Route 71 (63,000 cars per day), serving the communities of

Pomona and Phillips Ranch, in addition to parts of Chino Hills, Diamond

Bar and Chino

• Point of Destination – Located across Rancho Valley Drive from the

recently constructed Rio Rancho Towne Center, a 335,000 SF Target and

Ross Dress for Less-anchored community center spread across 31.85

acres

• Retail Hub – Synergistic surrounding tenant mix satisfies daytime and

evening customer demands. Surrounding tenants include: Target, Ross

Dress for Less, Citiwear, GNC, Panda Express, Golden Corral, Chipotle,

Flame Broiler, Carl’s Jr./Green Burrito, Del Taco, Jersey Mike’s,

T-Mobile, UPS Store, Planet Fitness, Wing Stop and others

Investment Highlights

OWNED BY WATER DISTRICT (M

WD)


MARTIN LUTHER KING JR.MEMORIAL PARK

LEXINGTON ELEMENTARY

FUTURE HOTEL


S. PARK AVENUE

W. LEXINGTON AVENUEWELLSFARGO

LEE NAILSAND SPA

PAMPER NAIL AND SPA

¨

RANCHO VALLEY DRIVE

S. WHIT

E AVENUE

STATE R

OU

TE 71

(63,000 CP

D)

RIO RANCHO ROADRIO RANCHO TOWNE CENTER II

GAREY HIGH SCHOOL (1,674 STUDENTS)

FUTURE RESIDENTIAL DEVELOPMENT

Investment Summary

OFFERING PRICE $5,130,000

CAP RATE 5.25%

NOI $269,346

TOTAL BUILDING AREA 7,875 SF

TOTAL LAND AREA 1.26 Acres (54,885 SF )

LAND COVERAGE RATIO 14.34%

OCCUPANCY 100%

PROPERTY WEBSITE www.nrpwest.com/pieologyrestaurants

I N V E S T M E N T H I G H L I G H T S

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AFFLUENT, LOS ANGELES COUNTY DEMOGRAPHICS

• More than 18,700 people in a 1-mile radius, with an Average

Household Income exceeding $80,000 per year





PRIDE OF OWNERSHIP ASSET AND IDEAL 1031 EXCHANGE UPLEG

• Recent Construction – Newly built Los Angeles County retail property

• Coupon Clipper – Long term, NNN leased investment, plus

administrative recapture provides for minimal management and out of

pocket obligations

• Pride of Ownership, Internet Resistant Asset – You cannot eat a

custom pizza or freshly baked pastry online!

• No Existing Financing – Delivered free and clear of debt permitting an

investor to purchase for cash or obtain new financing at desired LTV

and terms

INTERNET RESISTANT TENANCY

• 100% Restaurant Uses – “Quick Casual” and take out restaurants

like Pieology, Little Caesar’s and Corky’s provide a strong bulwark

against internet competition. Dining experiences cannot be

replicated online, and benefit from internet delivery services like

DoorDash and GrubHub

• You Cannot Do This Online! – The property’s location in Rio Rancho

Towne Center provides a retail experience, featuring dining, fitness,

beverage and service options

LOW MANAGEMENT HASSLE

• High Quality NNN Asset – New Construction (2016) strip center with

NNN leases provide for limited management obligation

• Long Term Leases – Recent, long term leases (Corky’s - 10 years;

Pieology – 10 years) plus options, eliminating near term leasing

responsibility

• Recently Constructed, High Quality Asset – High quality, newly built

retail center with no deferred maintenance, limiting an investor’s

near term capital requirements

Investment Highlights (CONTINUED)


CAPITAL MARKETS/NATIONAL RETAIL PARTNERS2



3

The city of Pomona is located on the eastern border of Los

Angeles County and encompasses approximately 22 square

miles. Located in the heart of the Greater Los Angeles Basin,

Pomona is bordered by the San Gabriel Valley and the Inland

Empire. Of the 88 incorporated cities in Los Angeles County,

Pomona ranks as the fifth largest city with just over 154,000

residents. Incorporated in 1888, Pomona is connected to

downtown Los Angeles and downtown Riverside by the

Metrolink as well as the 10, 57, 60, 71 and 210 Freeways.

Pomona is serviced by Ontario Airport which is located just 12

miles from the city center and is also proximate to John Wayne

Airport, Long Beach Airport and Los Angeles International

Airport (LAX).

Pomona is the site of the Fairplex, which hosts the L.A.

County Fair, and the NHRA Auto Club Raceway at Pomona

(formerly known as Pomona Raceway) home to the Circle K

Winternationals, Auto Club Finals and other races including

the O’Reilly Street Machine and Muscle Car Nationals and the

NMCA Flowmaster West Street Car Series. The L.A. County

Fair is the fourth largest fair in the US (per visitors) and the

largest in California, attracting more than 1.4 million people

annually, additionally the facility is used year-round to host

a variety of educational, commercial, and entertainment

City Overview

A R E A O V E R V I E W



shows such as trade and consumer shows, conventions, and

sporting events. These events include Barretts horse sales,

the Grand National Roadster Show, L.A. Roadster Show, the

Pomona Swap Meet & Classic Car Show 7 times per year and

the year-round home to the Wally Parks NHRA Museum.

POMONA TOP EMPLOYERS

Rank Employer # of Employees

1 Pomona Valley Hospital 3,078

2 Pomona Unified School District 2,902

3 California State Polytechnic University 2,612

4 Fairplex 954

5 Casa Colina Rehabilitation Center 817

6 City of Pomona 689

7 Verizon 596

8 County of Los Angeles Department of Social Services 400

9 First Transit 348

10 Inland Valley Care & Rehab 339

Source: Comprehensive Financial Report, Pomona

LA County Fair


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Pomona is home to a number of colleges and universities

including: California State Polytechnic University (Cal-Poly),

and Western University of Health Sciences. Cal-Poly Pomona

is one of only two polytechnic universities in the 23 California

State University campus system. The Western University

of Health Sciences main campus in Southern California is

among the most thriving enterprises in the Pomona and

San Gabriel Valleys. The Pomona campus helped transform

downtown Pomona into a thriving mix of retail, commercial,

and educational enterprises.

City Overview (CONTINUED)

Source: Esri

Pomona California

2016 Estimated Population 154,345 38,986,171

2020 Projected Population 159,523 40,718,391

2010 Census Population 149,058 37,253,956

2010-2016 Annual Population Growth Rate 0.56% 0.73%

2016-2021 Annual Population Growth Rate 0.66% 0.87%

2016 Estimated Median Age 30.30 35.80

2016 Estimated Households 39,532 13,029,292

2021 Projected Households 40,744 13,549,437

2010 Census Households 38,477 12,577,498

2010-2016 Annual Household Growth Rate 0.43% 0.57%

2016-2021 Annual Household Growth Rate 0.61% 0.79%

2016 Estimated Average Housing Value $348,563 $518,280

2016 Estimated Households 39,532 13,029,292

2016 Estimated Average Household Income $65,154 $90,812

2021 Estimated Average Household Income $70,398 $98,876

POMONA DEMOGRAPHICS

Cal-Poly Pomona




AERIAL

LOCAL MAP


7

Los Angeles County is the most populous county in the country

with over 18 million people spread over a land area the size

of Maine. Thirty of LA’s suburbs have populations of 80,000 or

more. Los Angeles County is home to one of the most educated

labor pools in the country, offering a labor force of more than

5 million. Los Angeles County’s continued economic growth,

in contrast to other areas of the state and nation, is due to its

growing population, diverse economy and abundant, well-trained

workforce.

Los Angeles County is served by one of the largest freeway

networks in the country, providing direct access to the five

neighboring counties of Orange, Riverside, San Bernardino, Kern,

and Ventura. Los Angeles County’s extensive freeway network

facilitates the movement of people and freight throughout the

region, the state, and the nation.

Los Angeles International Airport (LAX) serves Los Angeles

County and is the seventh busiest passenger airport in the

world and third busiest in the US serving nearly 74.9 million

passengers per year. Along with its 742 daily flights, LAX ranks

14th in the world and fifth in the US in air cargo processed. It is

supplemented by its proximity to Ontario International Airport in

the City of Ontario (San Bernardino County), Burbank Airport in

Burbank (Los Angeles County), John Wayne Airport in Santa Ana

(Orange County), and Long Beach Airport (Los Angeles County).

County Overview

Santa Monica

LA County Fair

J. Paul Getty Museum




Located on the southern coast of California, Los Angeles County

covers 4,084 square miles and includes San Clemente and Santa

Catalina islands. The county is comprised of approximately 88

vibrant and diverse cities hosting more than 244,000 business

establishments—the greatest concentration in the state.

County Overview (CONTINUED)

Perishing Square

Source: Esri

LOS ANGELES COUNTY DEMOGRAPHICS

2016 Estimated Population 10,147,765

2020 Projected Population 10,479,488

2010 Census Population 9,818,605

2010-2016 Annual Population Growth Rate 0.53%

2016-2021 Annual Population Growth Rate 0.65%

2016 Estimated Median Age 35.40

2016 Estimated Households 3,321,508

2021 Projected Households 3,416,966

2010 Census Households 3,241,204

2010-2016 Annual Household Growth Rate 0.39%

2016-2021 Annual Household Growth Rate 0.57%

2016 Estimated Average Housing Value $576,890

2016 Estimated Households 3,321,508

2016 Estimated Average Household Income $85,730

2021 Estimated Average Household Income $93,392


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Los Angeles County has a Gross Domestic Product (GPD) of

approximately $544 billion, placing it among the top 20 economies

in the world–higher than Switzerland, Sweden, and Saudi Arabia. Of

its 244,000 businesses, there are more minority and women-owned

businesses than any other county in the nation. Los Angeles County

is also the nation’s top international trade and manufacturing center.

Los Angeles is recognized worldwide as a leader in entertainment,

health sciences, business services, aerospace, and international

trade. While Hollywood and the Southern California beach culture

are part of the collective image of Los Angeles, the city also boasts

more museums than any other city in the US and some of the best

hotels in the world.

Los Angeles County possesses a diverse economic base,

boasting a number of Fortune 500 companies headquartered

in the county, including the Walt Disney Company, Edison

International, Health Net, and Jacobs Engineering Group to name

a few (see chart on page 13). Key factors positively influencing

the region’s economic position include increased local media

production by the entertainment industry, a continuing expansion

of import flows, and growth in aerospace, homeland security,

and in the private business sector. Los Angeles County’s well

educated labor pool, numerous universities, appealing climate,

and world-class infrastructure will enable Greater Los Angeles to

continue to be a world leader in economic and cultural influence.

County Overview (CONTINUED) KEY JOBS IN LOS ANGELES COUNTY

ENTERTAINMENT

162,850

EDUCATION

91,730

BUSINESS SERVICES

162,850

FINANCE SERVICES

55,180

TRADE

163,600

HOSPITALITY & TOURISM

63,750

FASHION

65,510

Downtown LA

Port of Los Angeles

Union Station

Source: www.chooselacounty.com




INTERESTING FACTS ABOUT LOS ANGELES COUNTY

• Los Angeles County has more than 80 stage theaters and

300 museums.

• The Port of Los Angeles is the busiest in the US and one of

the busiest in the world.

• The Los Angeles five-county region, which includes Los

Angeles, Riverside, Ventura, Orange, and San Bernardino

counties has a population of over 18 million.

• If the five-county Los Angeles area were a state it would be

the fourth largest in the United States.

• If Los Angeles County were a nation, it would have the 19th

largest economy in the world.

• Los Angeles is regarded as the entrepreneurial capital of the

world with nearly twice as many small businesses than any

other similarly-sized region of the United States.

County Overview (CONTINUED)

Warner Brothers StudiosUniversity City Walk

Dolby Theatre

Magic Mountain


11

Rodeo Drive

Madame Tussauds

Griffith Observatory

California Science Center

12


CAPITAL MARKETS/NATIONAL RETAIL PARTNERS


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1

REGIONAL MAP

COMPANY LOCATION RANK

1 The Walt Disney Company Burbank 61

2 DirecTV El Segundo 98

3 Occidental Petroleum Corporation Los Angeles 116

4 Amgen Inc. Thousand Oaks 154

5 Edison International Rosemead 222

6 Jacobs Engineering Group Inc. Pasadena 237

7 Health Net, Inc. Woodland Hills 254

8 Reliance Steel & Aluminum Los Angeles 299

9 AECOM Technology Corporation Los Angeles 332

10 Oaktree Capital Group, LLC Los Angeles 354

11 CBRE, Inc. Los Angeles 363

12 Molina Healthcare, Inc. Long Beach 393

13 Avery Dennison Corporation Glendale 398

14 Mattel, Inc. El Segundo 403

15 Live Nation Entertainment Beverly Hills 404

FORTUNE 500 COMPANIES IN LOS ANGELES COUNTY

Source: http://fortune.com/fortune500

EMPLOYER REVENUE

The Walt Disney Co $48B

Ingram Micro Inc. $44B

DirecTV $32B

Qualcomm Inc. $26B

Amgen Inc. $19B

TOP EMPLOYERS IN LOS ANGELES COUNTY (BY REVENUE)

Source: http://www.latimes.com/business/la-fi-mo-biggest-socal-companies-20130514-photogal-lery.html

REGIONAL MAP


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LOCATION2051 Rancho Valley Drive

Pomona, California 91766

LAND AREAThe subject site consists of 54,885

SF of land area (1.26 Acres).

BUILDING AREAThe subject site consists of 7,875 SF

of building area.

FRONTAGE & ACCESSThe subject is visible from State

Route 71 and accessed through

one (1) access point on Rio Rancho

Road and three (3) access points on

Rancho Valley Drive.

ADJACENT PROPERTIES

North: Rio Rancho Towne Center

II is bordered to the north

by Rio Rancho Towne

Center Phase I.

East: Rio Rancho Towne Center

II is bordered to the east by

the remaining portions of

Rio Rancho Towne Center

and Pomona AutoCenter

beyond that.

South: Rio Rancho Towne Center

II is bordered to the south

by SR-71.

West: Rio Rancho Towne Center

II is bordered to the west

by SR-71 and adjacent

future developments.

BUILTThe subject was constructed in

2016.

FREEWAY TRAFFIC COUNTSInterstate 10

(at State Route 57) .......................240,000

State Route 57

(at Interstate 10) ..............................154,000

State Route 60

(at State Route 71) .........................212,000

State Route 71 ....................................63,000

ZONINGAccording to the city of Pomona the

subject site is currently zoned as

C-4 highway commercial.

Property Overview (CONTINUED)

P R O P E R T Y O V E R V I E W


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PARCEL MAP


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OWNED BY WATER DISTRICT (MWD)



FUTURE HOTEL

STATE ROUTE 71 (63,000 CPD)

RIO RANCHO ROAD

RANCHO VALLEY DRIVE

PAMPER NAIL AND SPA

¨

W. LEXIN

GTO

N

AVENU

E

WELLSFARGO

LEE NAILSAND SPA

RIO RANCHO TOWNE CENTER II

FUTURE RESIDENTIAL

DEVELOPMENT

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RIO

RA

NC

HO

RO

AD

CORONA FREEWAY ROUTE 71

S WH

ITE AVEN

UE

FUTURE RETAIL6,300 SF

FUTURE HOTEL

RANCHO VALLEY DRIVE

SITE PLAN

¨

Target is located adjacent toRio Rancho Towne Center Phase II

PAMPER NAIL AND SPA


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CORKY’S KITCHEN & BAKERYCorky’s is a Southern California based homestyle

American cuisine, full-service restaurant chain that

has 10 locations in the Inland Empire and Riverside

County. With memories of his Grandmother “Corky”,

Mike Towles and his wife Jennifer, have re-created

those same memories with homestyle breakfast,

lunch and dinner. Corky’s proudly features

homemade pies, baked fresh daily with the

finest ingredients and flaky crust. The restaurant

also offers an assortment of fresh baked goods,

including cookies, muffins and other homemade

desserts.

Website: www.corkyskitchenandbakery.com

Ownership: Private

Locations: 10

Headquarters: Alta Loma, CA

PIEOLOGYPieology is an artisan-style, casually upscale,

build-your-own pizza parlor that has endless

combinations of pies. Customers get the option to

choose from three different kinds of crusts, seven

sauces, six cheese options, seven meats, and

sixteen veggie toppings, which can be finished

with an option of five drizzles, such as pesto or fiery

buffalo sauce. in 2015, Pieology was named the

country’s fastest-growing restaurant chain by food

consultancy Technomic.

Website: www.pieology.com

Ownership: Private

Locations: 137

Headquarters: Rancho Santa Margarita, CA

LITTLE CAESARSLittle Caesars Pizza, known for its HOT-N-

READY pizza and famed Crazy Bread, is

the largest carryout-only pizza chain in the

world with locations in all 50 states and 18

countries and territories worldwide. Named

“Best Value in America” for the eighth year in

a row, Little Caesars products are made with

quality ingredients, such as fresh, never frozen,

mozzarella and Muenster cheese, dough made

fresh daily in every store and sauce made from

farm fresh crushed tomatoes.

Website: www.littlecaesars.com

Ownership: Private

Locations: 4,301

Headquarters: Detroit, MI

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T E N A N T O V E R V I E W

CAPITAL MARKETS/NATIONAL RETAIL PARTNERS

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T E N A N T O V E R V I E W

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F I N A N C I A L S


Assumptions

Notes: All market rent rates are stated on calendar-year basis.

[1] General Vacancy Loss factor includes losses attributable to projected lease-up, rollover downtime, and fixturing downtime. The following tenants are excluded from this loss factor for current and option terms only: Little Caesars.

[2] Capital Reserves do not inflate during the term of the analysis.

[3] Operating Expenses are based on the 2017 Budget, less any owner-specific expenses. Assumes a 15% OEA Administrative Fee.

[4] Real Estate Taxes have been reassessed at the estimated purchase price based on a millage rate of 1.171179% plus special assessments of $5,000.

[5] Rent Abatement includes NNN charges as well as base rent.

GLOBAL AVAILABLE SPACE LEASING SECOND GENERATION LEASING

Analysis Period Occupancy and Absorption Retention Ratio 75%

Commencement Date September 1, 2017 Projected Available at 9/1/17 0 SF

End Date August 31, 2027 Currently Available as of 6/1/17 0 SF Financial Terms

Term 10 Years Percentage Available at 6/1/17 0.00% 2017 Monthly Market Rent $3.00 - $3.40 PSF

Rent Adjustment 3.00% Annually

Area Measures Lease Term 5 Years

Building Square Feet (SF) 7,875 SF EXPENSES Expense Reimbursement Type NNN (No Mgmt) + 10% Ad

Growth Rates Operating Expense Source 2017 Budget [3] Tenanting Costs

Consumer Price Index (CPI) 3.00% Rent Abatements [5]

Other Income Growth Rate 3.00% Management Fee (% of EGR) 4.00% New 3 Month(s)

Operating Expenses 3.00% Renewal 0 Month(s)

Real Estate Taxes 2.00% Real Estate Taxes Reassessed Yes [4] Weighted Average 0.75 Month(s)

Market Rent Growth Millage Rate 1.171179%

CY 2018 - 3.00% Special Assessments (Estimated) $5,000 Tenant Improvements ($/SF)

CY 2019 - 3.00% New $30.00 PSF

CY 2020 - 3.00% Renewal $6.00 PSF

CY 2021 - 3.00% Weighted Average $12.00 PSF

CY 2022 - 3.00%

CY 2023 - 3.00% Commissions [5]

CY 2024 - 3.00% New 6.00%

CY 2025 - 3.00% Renewal 1.20%

CY 2026 - 3.00% Weighted Average 2.40%

CY 2027+ - 3.00%

Downtime

General Vacancy Loss 5.00% [1] New 6 Month(s)

Weighted Average 2 Month(s)

Capital Reserves (CY 2017 Value) $0.25 PSF [2]

Bruce Francis + 1 602 735 1781 Lic. BK-0018505 [email protected]

Shaun Moothart +1 949 509 2111Lic. [email protected]

CBRE Debt & Equity Finance (DEF) is a division of CBRE Inc. In the US, DEF represents approximately 300 lenders including: banks, life insurance companies, pension funds, CMBS lenders and a variety of other lending sources. DEF also acts as a correspondent for over 200 life insurance companies. The Quote above is an approximation of available terms.

For customized Debt Quotations, please contact:

FINANCING

MARKET LOAN

Loan Funding (as of Jul-17) $3,078,000

Loan-To-Price 60.00%

Funding Date Sep-17

Maturity Date Aug-27

Loan Term 10.0 Years

Amortization Period 30 Years

Initial Interest Only Period (If Any) 24 Months

Interest Rate 4.25%

Origination Fee on Initial Loan Funding 1.00%


F I N A N C I A L S

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F I N A N C I A L S


Cash FlowFiscal Year 9/17-8/18 9/18-8/19 9/19-8/20 9/20-8/21 9/21-8/22 9/22-8/23 9/23-8/24 9/24-8/25 9/25-8/26 9/26-8/27 9/27-8/28

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

Overall Economic Occupancy [1] 95.80% 95.80% 95.80% 95.76% 95.80% 95.80% 95.80% 95.80% 95.76% 95.80% 95.80%

Total Operating Expenses PSF Per Year $18.65 $19.07 $19.50 $20.03 $20.55 $21.02 $21.49 $21.98 $22.58 $23.17 $22.64

REVENUES CY 2018$/SF/MO [2]

Scheduled Base Rent

Gross Potential Rent $3.11 $294,154 $294,154 $294,154 $314,548 $328,977 $328,977 $328,977 $328,977 $351,879 $368,025 $368,025

Absorption & Turnover Vacancy 0.00 0 0 0 0 0 0 0 0 0 0 0

Base Rent Abatements 0.00 0 0 0 0 0 0 0 0 0 0 0

Total Scheduled Base Rent 3.11 294,154 294,154 294,154 314,548 328,977 328,977 328,977 328,977 351,879 368,025 368,025

Expense Reimbursements 1.49 140,349 143,721 147,188 150,741 154,383 158,126 161,966 165,903 169,948 172,349 171,479

TOTAL GROSS REVENUE 4.60 434,503 437,875 441,342 465,289 483,360 487,103 490,943 494,880 521,827 540,374 539,504

General Vacancy Loss (0.19) (18,260) (18,403) (18,551) (19,721) (20,310) (20,469) (20,633) (20,800) (22,117) (22,701) (22,663)

EFFECTIVE GROSS REVENUE 4.40 416,243 419,472 422,791 445,568 463,050 466,634 470,310 474,080 499,710 517,673 516,841

OPERATING EXPENSES

CAM (0.66) (62,410) (64,282) (66,211) (68,197) (70,244) (72,350) (74,520) (76,756) (79,058) (81,431) (83,873)

Management Fee (NR) (0.18) (16,650) (16,779) (16,912) (17,823) (18,522) (18,665) (18,812) (18,963) (19,988) (20,707) (20,674)

Insurance (0.02) (1,950) (2,008) (2,069) (2,131) (2,195) (2,260) (2,329) (2,399) (2,470) (2,545) (2,621)

Real Estate Taxes (0.70) (65,887) (67,105) (68,347) (69,614) (70,906) (72,224) (73,569) (74,940) (76,339) (77,766) (71,090)

TOTAL OPERATING EXPENSES (1.55) (146,897) (150,174) (153,539) (157,765) (161,867) (165,499) (169,230) (173,058) (177,855) (182,449) (178,258)

NET OPERATING INCOME 2.85 269,346 269,298 269,252 287,803 301,183 301,135 301,080 301,022 321,855 335,224 338,583

CAPITAL COSTS

Tenant Improvements 0.00 0 0 0 0 0 0 0 0 0 0 0

Leasing Commissions 0.00 0 0 0 0 0 0 0 0 0 0 0

Capital Reserves (0.02) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969)

TOTAL CAPITAL COSTS (0.02) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969) (1,969)

OPERATING CASH FLOW $2.83 $267,377 $267,329 $267,283 $285,834 $299,214 $299,166 $299,111 $299,053 $319,886 $333,255 $336,614

[1] This figure takes into account vacancy/credit loss, absorption vacancy, turnover vacancy, and base rent abatements.

[2] Based on 7,875 square feet.


F I N A N C I A L S

23

Cash Flow (CONTINUED)

Fiscal Year 9/17-8/18 9/18-8/19 9/19-8/20 9/20-8/21 9/21-8/22 9/22-8/23 9/23-8/24 9/24-8/25 9/25-8/26 9/26-8/27 9/27-8/28

ACQUISITION & RESIDUAL SALE

Purchase Price ($5,130,000) 0 0 0 0 0 0 0 0 0 0

Tenant Improvements 0 0 0 0 0 0 0 0 0 0 0

Leasing Commissions 0 0 0 0 0 0 0 0 0 0 0 All CashIRRNet Residual Value [3] 0 0 0 0 0 0 0 0 0 0 5,389,113

CASH FLOW BEFORE DEBT ($5,130,000) $267,377 $267,329 $267,283 $285,834 $299,214 $299,166 $299,111 $299,053 $319,886 $5,722,368 6.04%

MARKET LOAN [4]

Loan Funding / Payoff 3,078,000 0 0 0 0 0 0 0 0 0 (2,594,141)

Loan Fees (30,780) 0 0 0 0 0 0 0 0 0 0 LeveragedIRRAnnual Debt Service 0 (130,815) (130,815) (181,703) (181,703) (181,703) (181,703) (181,703) (181,703) (181,703) (181,703)

CASH FLOW AFTER DEBT ($2,082,780) $136,562 $136,514 $85,580 $104,131 $117,511 $117,463 $117,408 $117,350 $138,183 $2,946,524 8.16%

NOI Return 5.25% 5.25% 5.25% 5.61% 5.87% 5.87% 5.87% 5.87% 6.27% 6.53%

UNLEVERAGED Cash Return 5.21% 5.21% 5.21% 5.57% 5.83% 5.83% 5.83% 5.83% 6.24% 6.50%

LEVERAGED Cash Return [5] 6.65% 6.65% 4.20% 5.09% 5.74% 5.73% 5.73% 5.73% 6.73% 7.37%

Rolling - All Cash IRR N/M N/M 1.70% 3.75% 4.19% 4.48% 4.69% 5.52% 5.94% 6.04%

Rolling - Leveraged IRR N/M N/M N/M 2.56% 3.77% 4.56% 5.11% 7.07% 7.98% 8.16%

[3] Net Residual Value is calculated by dividing Year 11 NOI by the Residual Cap Rate of 6.00% and applying a 4.50% Cost of Sale.

[4] Market Debt based on 60% Loan-to-Value, 4.25% Interest Rate, 30-Year Amortization, 24 Months Interest Only and 1.00% Loan Fee.

[5] Leveraged Cash Return is based on NOI less debt service divided by equity including costs to stabilize.

F I N A N C I A L S


Rent RollSquare

Feet% of

Property

Lease Term Rental Rates RecoveryType

Market Assumption /Market RentSuite Tenant Name Begin End Begin Monthly PSF Annually PSF

2051-200A Little Caesars 1,260 16.00% Aug-2016 Aug-2021 Current $4,032 $3.20 $48,384 $38.40 NNN (No Mgmt) Option+ 10% Ad $3.20 NNN (Restaurant)

Notes:Tenant has three (3) - five (5) year options at 12% increase over prior rent for each of the first two (2) options and FMV for the 3rd option (two modeled below). Tenant has a 5% cap on controllables (assumed not hitting, not modeled).

Sep-2021 Aug-2031 FUTURE $4,511 $3.58 $54,130 $42.96 NNN (No Mgmt) MarketOPTION Sep-2026 $5,053 $4.01 $60,631 $48.12 + 10% Ad $3.20 NNN (Restaurant)

Notes:Assumed tenant exercises two (2) - five (5) year options with no leasing costs.

2051-200B Pieology 1,612 20.47% May-2016 May-2026 Current $5,481 $3.40 $65,770 $40.80 NNN(No Mgmt) Option Jun-2021 $6,029 $3.74 $72,347 $44.88 +10% Ad (95%) PIE $3.40 NNN (Restaurant)

Notes:Tenant has two (2) - five (5) year options at 10% increase over prior rent and FMV, respectively (first option modeled below). Tenant has a 5% cap on controllables (not hitting, not modeled).

Jun-2026 May-2031 FUTURE $6,632 $4.11 $79,581 $49.37 NNN(No Mgmt) MarketOPTION +10% Ad (95%) PIE $3.40 NNN (Restaurant)

Notes:Assumed tenant exercises one (1) - five (5) year option with no leasing costs.

2051-230 Corky’s Kitchen 5,003 63.53% Nov-2015 Oct-2025 Current $15,000 $3.00 $180,000 $35.98 NNN(No Mgmt) Option& Bakery Nov-2020 $16,877 $3.37 $202,521 $40.48 +10% Ad (95% GLA) $3.00 NNN (Restaurant)

Notes:Tenant has four (4) - five (5) year options at 12.5% increase over prior rent for each option (modeled below). Tenant has a 5% cap on controllables (assumed not hitting, not modeled).

Nov-2025 Oct-2045 FUTURE $18,984 $3.79 $227,813 $45.54 NNN(No Mgmt) MarketOPTION Nov-2030 $21,359 $4.27 $256,304 $51.23 +10% Ad (95% GLA) $3.00 NNN (Restaurant)

Nov-2035 $24,027 $4.80 $288,323 $57.63 Nov-2040 $27,029 $5.40 $324,344 $64.83

Notes:Assumed tenant exercises four (4) - five (5) year options with no leasing costs.

TOTALS / AVERAGES 7,875 $24,513 $3.11 $294,154 $37.35 OCCUPIED SF 7,875 100.0%AVAILABLE SF 0 0.0%TOTAL SF 7,875 100.0%


D I S C L A I M E R

25

AFFILIATED BUSINESS DISCLOSURE

CBRE operates within a global family of companies with many subsidiaries and/or related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage service s, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing interests in the same transaction. For example, this Memorandum may be received by our Affiliates, including CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the “Property”) may submit an offer to purchase the Property and may be the successful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE Inc. will act in the best interest of the client(s) it represents in the transaction described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum.

CONFIDENTIALITY AGREEMENT

This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property.

This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the property or the owner of all Property (the”Owner”), to be all-inclusive or to contain all or part of the information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors being the control of the Owner and CBRE,Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner. Neither the Owner or CBRE, Inc., nor any of their respectful directors, officers, Affiliates or representatives make an representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property. The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived. By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc. If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc.

DISCLAIMER

© 2017 CBRE, Inc. The information containing in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property, The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

Pricing in this Offering Memorandum may not be accurate at any given point in time as market conditions including capitalization rates and other value indicators change frequently. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property.

Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited.

CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the Property of their respective owners.

© 2017 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

CBRE, and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.

Exclusively Marketed by

INVESTMENT ADVISORS

JOHN READ + 1 949 725 8606Lic. 01359444 [email protected]

KIRK BRUMMER + 1 949 725 8418Lic. [email protected]

CBRE-Newport Beach | 3501 Jamboree Rd., Ste 100 | Newport Beach, CA 92660 | F + 1 949 725 8545 | www.cbre.com/nrpwest

JIMMY SLUSHER + 1 949 725 8507 Lic. 01857569 [email protected]

MEGAN WOOD + 1 949 725 8423Lic. 01516027 [email protected]

PHILIP D. VOORHEES + 1 949 725 8521Lic. 01252096 [email protected]

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