Credit Anchored Commercial Property - Riverside

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Major Tenants

Darrell R. Levonian

Executive Managing Officer

310-996-2200, direct line

[email protected]

Lic # 00751756

Fred A. Sheriff Executive Managing Director

310-492-8407, direct line

[email protected]

Lic # 004049094

Tanel Harunzade

Managing Director Investment Services Group 310-996-2217, direct line

[email protected]

Lic # 01218676

CHARLES DUNN COMPANY, INC. 1925 Century Park East, Suite 2350 Los Angeles, CA 90067 310.312.1800, main line 310.312.1801, fax www.charlesdunn.com Lic # 004049094

CREDIT- ANCHORED COMMERCIAL PROPERTY

150,719+/- Square Feet on 9.37+/- Acres

Southeast Corner of Magnolia Avenue & La Sierra Avenue

Riverside, CA 92505

Just off the Riverside (I-91) Freeway

EXCLUSIVE INVESTMENT OFFERING Credit-Anchored Commercial Property / 150,719+/- Square Feet on 9.37+/- Acres

SEC of Magnolia Avenue and La Sierra Avenue, Riverside, CA 92505

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TABLE OF CONTENTS

Section Page

I. CONFIDENTIALITY AND DISCLAIMER 3

II. OVERVIEW AND EXECUTIVE SUMMARY

•••• The Offering 4

•••• Property Location 4

•••• Property Description 4

•••• Tenants 4

•••• Investment Offering Summary 5

•••• Market and Area Highlights 6

•••• Offering Procedure 6

III. PROPERTY OVERVIEW

•••• Property Description 8

•••• Property Pictures 11

•••• Regional Map and Area Map 14

•••• Aerial of the Property and Traffic Count 15

•••• Recorded Parcel Map 17

•••• Site Plan and Surrounding Area Activity 18

•••• Strengths of the Property 19

IV. MARKET OVERVIEW

•••• Riverside County Overview 20

•••• City of Riverside Overview 22

•••• Demographic Profile of the Area 24

V. FINANCIAL OVERVIEW

•••• Rent Roll and Lease Summary 25

•••• Annual Income and Expenses 27

•••• Financial Scenario and Return on Equity 29

•••• Financial Summary 30

•••• Profile of Tenants 31



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SECTION I. Confidentiality and Disclaimer The information contained in this EXCLUSIVE INVESTMENT OFFERING is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it on behalf of the Ownership from the Charles Dunn Company. It should not be made available to any other person or entity without the written consent of the Charles Dunn Company. This EXCLUSIVE INVESTMENT OFFERING has been prepared to provide summary, unverified information to prospective purchasers about the Property. Further, it is intended to establish only a preliminary level of interest in the Property. The information contained herein is not a substitute for a thorough and independent due diligence investigation by prospective purchasers and/or their representatives. The information contained in this EXCLUSIVE INVESTMENT OFFERING has been obtained from sources we believe to be reliable. These materials are based on information and content provided by others, which we believe, are accurate. No guarantee, warranty, or representation is made by the Charles Dunn Company or its personnel, and all interested parties must independently verify the accuracy and completeness of the provided information. Any projections, assumptions, opinion, or estimates are used for example only and do not represent the current or future performance of the Property. Prospective purchasers should have their tax, financial, legal, and toxic substance advisors conduct a careful investigation of the Property and its suitability for their needs, including land use limitations. The Property is subject to prior lease, sale, change in price, or withdrawal from the market without notice. The Charles Dunn Company has not made any investigation, has not verified, and will not verify, any of the information contained herein, and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided with respect to the following:

•••• The income or expenses for the Property.

•••• The future projected financial performance of the Property.

•••• The size and square footage of the Property (land and improvements).

•••• The presence or absence of contaminating substances, including PCB or asbestos.

•••• The compliance with City, County, State, and Federal regulations.

•••• The physical condition of the improvements on the Property.

•••• The financial condition or business prospects of any tenant in the Property.

•••• Any tenant's plans or intentions to continue its occupancy of the Property.

All prospective purchasers must take appropriate and independent measures to verify all of the information set forth hereinabove.

NOTE: Prior to the beginning of due diligence by a buyer whose offer has been accepted, the buyer and their broker (if any) will be required to sign a document that affirms this Confidentiality Agreement and Disclaimer, and further states that their decision to buy the Property does not and will not rely on any information contained in this EXCLUSIVE INVESTMENT OFFERING or any information that is provided to them by Charles Dunn Company that is not specifically from the property’s owner and deemed a part the official due diligence material.



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SECTION II. Overview and Executive Summary The Offering The EXCLUSIVE INVESTMENT OFFERING is for a credit-anchored commercial investment property consisting of two buildings and

land that are leased to nine tenants. Based on potential financing, the Cash-on-Cash return is projected at 19.1+%.

Property Location The general location of the property is the southeast corner of the 11000 block of Magnolia Avenue and the 3700 block of La Sierra Avenue, Riverside, CA 92505 (“Property”). Each building has a separate address. The major bordering streets are: north of the Riverside Freeway (91), south of Magnolia Avenue, east of La Sierra Avenue, and west of Park Sierra Drive. Magnolia Avenue is a major east/west thoroughfare, and La Sierra Avenue provides direct access to the Riverside Freeway (91). The City of Riverside is the County Seat of Riverside County and is located approximately 60 miles east of downtown Los Angeles. It is the largest city in Riverside County with a population of nearly 300,000.

Property Description The land portion of the Property is rectangular in shape and consists of one parcel totaling 9.37+/- acres (408,157 +/- square feet). There is 642+/- feet of non-direct frontage on Magnolia Avenue and 913 +/- feet of combined direct and non-direct frontage on La Sierra Avenue. The improvements consist of a 144,719 +/- square foot commercial building currently leased to office tenants, a 6,000 +/- square foot commercial building currently leased to a restaurant tenant, four cellular sites, and surface parking. The buildings total 150,719+/- square feet. The 144,719 SF building was built in 1975+/- and extensively remodeled for the current tenants. The 6,000 SF building was built in 1989+/- and was recently remodeled for the current tenant. The buildings and land are owned in Fee Simple Interest by the Ownership. The site is fully developed.

Tenants The land and improvements are leased to nine tenants, including the following that are considered “strong credit:” County of Riverside (2 leases), Kaiser Foundation Health Plan, Inc., Straw Hat Pizza, and four cellular sites of publicly-held companies.



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SECTION II. Overview and Executive Summary, continued: Investment Offering Summary Investment Summary The Property is being marketed on an “all cash” basis as follows:

Listed Price Less, Estimated Loan from Institutional Source – 75% (see loan disclaimer below) Down Payment

Estimated Net Income Less, Debt Service @ 5.25%, 30 yr. (6.626% Loan Constant) (see loan disclaimer below) Pre-Tax Cash Flow NOTE: No representation is made by Ownership or Charles Dunn Company that a loan with these exact terms and conditions will be readily available to all potential buyers or will be available when needed at a specific time. Loan markets fluctuate on a regular basis.

$24,500,000 - 18,375,000 $ 6,125,000

$2,385,945 - 1,217,609 $ 1,168,335

•••• Estimated Capitalization Rate •••• Estimated Return on Equity

9.7% 19.1%

•••• Price per Square Foot of Improvements •••• Price per Square Foot Attributable to the Land

$162.55 $60.03



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SECTION II. Overview and Executive Summary, continued: Market and Area Highlights The Property is located on a major commercial thoroughfare in Riverside, approximate one mile west of the Galleria at Tyler Regional Mall. The major department store tenants are Nordstrom, Macy’s, and JC Penney. The Galleria at Tyler has recently been enhanced with the addition of two lifestyle components that includes AMC Theater (16 Screens), Yard House Restaurant, Elephant Bar Restaurant, Cheesecake Factory, and PF Chang’s China Bistro. The population in a 3-mile radius surrounding the Property is 121,340+/- people (2009 estimate), and the “Median” and “Average Household Income” are $49,873 and $67,891 respectively. The area is a mature, working class neighborhood that is family oriented. The Property is directly west of the Kaiser Permanente Regional Medical Center, which contains a hospital and all the major medical services of the organization.

Offering Procedure Overview Charles Dunn Company has been authorized to prepare and distribute the data in this EXCLUSIVE INVESTMENT OFFERING to a select group of qualified parties in order to solicit their interest and offers to acquire the Property. Interested parties are invited to review this opportunity and make an offer based on their analysis. The Property is being offered on a strict “as-is” “all cash” basis, with the selection of the buyer being influenced by the level of interest, track record, level of prior due diligence initially undertaken, and financial ability to close the transaction. Preference will be given to all-cash investors who will not seek financing. Confidentiality Agreement Prospective purchasers and their brokers (if any) will be required to sign a Confidentiality Agreement prior to the receipt of detailed information beyond highlights about the Property.



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SECTION II. Overview and Executive Summary, continued:

Offering Procedure, continued:

Specific Contact Prospective purchasers and/or their brokers are required to contact the Listing Agent at the Charles Dunn Company for information about the Property. They are not authorized to contact the Ownership or tenants regarding the Property.

Submission of Offers

There is not a specific due date for offers, thus, the Ownership may accept an offer of their choosing at any time. All offers must be typed and on a Purchase Agreement form that is commonly utilized as a standard of practice in the commercial real estate industry, such as the AIR Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate form. Offers may be submitted in a Letter of Intent format, but they will be deemed “non-binding” even if signed by all parties until a subsequent Purchase and Sale Agreement is signed by all parties. All decisions are at the Ownership’s sole discretion.

Investors Negotiations and Selection The Ownership will respond to all bona fide offers as they are received by the Charles Dunn Company. The Ownership may also reject any offer not meeting the standards of this EXCLUSIVE INVESTMENT OFFERING or from a purchaser deemed not qualified to close the transaction. If an offer results in the Ownership choosing to open negotiations with a specific purchaser, the purchaser will be asked from the beginning of the negotiations to provide proof of their financial ability to provide the equity portion of the purchase price and to provide financial references. The eventual selection of the purchaser will be influenced by the level of interest, track record, level of prior due diligence initially undertaken, and financial ability to close the transaction.

Due Diligence Period

The selected purchaser will be given a fixed period of time to perform its due diligence on the Property and will be encouraged to begin their due diligence upon the execution of an accepted Letter of Intent. The purchaser will be provided a draft Purchase & Sale Agreement by the Ownership. The executed Purchase & Sale Agreement will require an immediate “Good Faith Deposit” payment by the purchaser, and an additional “Good Faith Deposit” when the purchaser removes contingencies on or before the end of the due diligence period.

NOTE: Prior to the beginning of due diligence by the buyer whose offer has been accepted, the buyer and their broker (if any) will be required to sign a document that affirms this Confidentiality Agreement and Disclaimer, and further states that their decision to buy the Property does not and will not rely on any information contained in this EXCLUSIVE INVESTMENT OFFERING or any information that is provided to them by Charles Dunn Company that is not specifically from the property’s owner and deemed a part the official due diligence material.



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SECTION III. Property Overview Property Description

•••• Size:

�� 150,719+/- square feet of total “Net Rentable Area” building improvements.

�� 9.37+/- (408,157+/-) square feet of land.

•••• Address:

�� 144,719+/- SF Commercial Building: 11060-80 Magnolia Avenue, Riverside, CA 92505.

�� 6,000 SF +/- Retail Building: 3765 La Sierra Avenue, Riverside, CA 92505.

•••• Location:

�� North of the Riverside Freeway (91), south of Magnolia Avenue, east of La Sierra Avenue, and west the extension of Skofstad Street (Park Sierra Drive is the next major street to the east of Skofstad Street).

�� The intersection of Magnolia Avenue and La Sierra Avenue is signalized in all four directions.

•••• Access:

�� Ingress and egress to/from Magnolia Avenue and La Sierra Avenue.

•••• Assessor’s Parcel Number:

�� Parcel Map No. 35997 was recorded in October, 2009. The new Assessor’s Parcel Numbers have yet not been assigned.

•••• Zoning:

�� “CG”- Commercial General Zone, City of Riverside. Per the City of Riverside Municipal Code: “The Commercial General Code (CG) is intended to allow for more intense commercial retail, office, and repair uses. The CG Zone allows for some outdoor retail uses.” The Property is in a 2025 Redevelopment Zone, which allows for greater building density.



9

SECTION III. Property Overview, continued: Property Description, continued:

•••• Parking:

�� 547 +/- total parking spaces.

�� 3.64 spaces per 1,000 square feet of current “Net Rentable Area.”

•••• Building and Improvement Description:

�� 144,719 +/- SF Commercial Building:

�� The improvements are 1-story commercial construction.

�� Built in 1975+/-.

�� Steel frame with concrete block exterior.

�� The exterior of the building is painted beige in color.

�� The roof is flat, but the building has a steep pitched façade with a red tile fascia.

�� Originally built for a retail tenant, but completely remodeled for office use. The tenants have installed $4,000,000+ of Tenant Improvements.

�� 6,000 SF +/- Retail Building:

�� The improvements are 1-story commercial construction.

�� Built in 1987+/-.

�� Wood frame with a plaster exterior.

�� The building has been remodeled for Straw Hat Pizza.

�� The exterior plaster finish is painted beige.

�� The roof has a slight pitch with a red tile covering.



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SECTION III. Property Overview, continued:

Building and Improvement Description, continued:

•••• Parking and Landscaping:

�� The parking lot is asphalt with white striping for the spaces.

�� The areas around the buildings are landscaped with shrubs and trees.

•••• Recent Upgrades:

�� $265,000+ was spent in March 2010 on the following:

�� Remove existing asphalt and concrete that are in disrepair.

�� Install new asphalt paving, slurry coat, and striping.

�� Install new concrete curbing.

�� Upgrade the landscaping and repair the irrigation system.

�� Remove trees and shrubbery that are not in good condition.



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SECTION III. Property Overview, continued: Property Pictures

View of the Office building looking southeasterly from La Sierra Avenue.

View of the Straw Hat Pizza building and the Office building (far left) looking south on La Sierra Avenue. The on/off ramp to the Riverside Freeway (91) is in the right background.



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SECTION III. Property Overview, continued: Property Pictures, continued:

View looking toward Magnolia Avenue from the front of the Office building. Straw Hat Pizza on the left, China Star Buffet building (not a part of the Property) in the middle. The parking lot landscaping were upgraded in May 2010.

View from Magnolia Avenue of the Office building, Straw Hat Pizza building (middle behind trees), and China Star Buffet building (right, but not a part of the Property).



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SECTION III. Property Overview, continued: Property Pictures, continued:

View of the south side of the Office building from La Sierra Avenue. Cellular tower on the mid-right side.

View of the Kaiser Medical Center, which is east of the Property across Park Sierra Drive.



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Regional Map Area Map

Street Map



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SECTION III. Property Overview, continued: Aerial of the Property and Surrounding Traffic Count

North/South on La Sierra Avenue near Magnolia Avenue:

•••• 30,888 +/- vehicles in a 24-hour period.

East/West on Magnolia Avenue fronting the Property:

•••• 26,000 +/- in a 24-hour period

East/West on the Riverside Freeway at La Sierra Avenue:

•••• 189,000 +/- in a 24-hour period



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SECTION III. Property Overview, continued: Aerial of the Property, Thoroughfares, and Significant Neighbors



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SECTION III. Property Overview, continued: Recorded Parcel Map

Property

(Parcel #1 / yellow)

Parcel Map Number: 35997

9.37 +/- acres

408,157+/- square feet

Magnolia Avenue

La Sierra Avenue



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SECTION III. Property Overview, continued: Site Plan and Surrounding Area Activity

Not a part of the Property

7 Jiffy Lube 8 Panda Express

9 China Star Buffet

10 Development Site

11 New Walgreens (opening October 2011)

12 Development Site (in continued negotiations with a major retailer)

13 Development Site

14 El Farallon Club

15 Development Site (in negotiations with a major office tenant)

16 El Torrito Restaurant

17 Red Lobster Restaurant

18 Medical Office Building

19 Former Black Angus (currently available)

20 Development Site

21 Office Building (converted restaurant building)

22 Kaiser Medical Center campus (east of Park Sierra Drive)

The Property

1 Straw Hat Pizza 2 Kaiser

3

County of Riverside – CPS Division

4 County of Riverside – DPSS Division

5 Sistena de Beistar – (Herbalife)

6 Cellular Sites

1

2 3 4

5

67

98 10 11 12 13

14

15

16

17

18

19

21

P a r k S i e rr a Drive

22

Magnolia Avenue

La Sierra Avenue

20



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Strengths of the Property

•••• Location:

�� The Property is located on a major commercial thoroughfare in the heart of Riverside. The Galleria at Tyler Regional Mall is approximately a mile to the east.

�� Kaiser Permanente Regional Medical Center is directly to the east across Park Sierra Drive. �� A new Walgreens is under construction directly east of the Property.

•••• Visibility/Identity:

�� Excellent visibility from Magnolia Avenue and La Sierra Avenue.

•••• Tenancy and Leases:

�� Strong tenants: County of Riverside (2 departments), Kaiser Foundation Health Plan, Inc., Straw Hat Pizza Restaurant, and four major cellular tenants all have government or corporate signatures on the lease.

�� All the leases have either rental increases or options to renew with a rental increase.

•••• Access:

�� The Property is easily accessible from Magnolia Avenue and La Sierra Avenue, with two signalized intersections on Magnolia. �� The Riverside Freeway (I-91) on-ramp is approximately 500’ south of the Property.

•••• Design:

�� All the buildings have been significantly upgraded by the Ownership or tenants. �� The parking lot and landscaping were upgraded during the First Quarter of 2010.

•••• Zoning:

�� The Property is in a 2025 Redevelopment Zone, which allows for greater building density.

•••• Parking:

�� The Property’s 547 current parking spaces are more than adequate for the current tenants.



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SECTION IV. Market Overview Riverside County Riverside County is a county located in the southeastern part of the U.S. state of California, stretching from Orange County to the Colorado River, which forms the border with Arizona. The County derives its name from the City of Riverside, which is the County Seat. The population of Riverside County was 1,545,387 in 2000, and by 2010 the U.S. Census Bureau official census placed the population had risen to 2,189,641, which is a 41.7% increase. It is the 11th largest county in terms of population in the country. Geographically, the County is mostly desert terrain. Most of Joshua Tree National Park is located in the County. Riverside County lies inland of Los Angeles, and south of San Bernardino. Large numbers of Los Angeles workers have moved to the County in recent years to take advantage of relatively affordable housing. Alongside neighboring San Bernardino County, Riverside County is one of the fastest growing parts of the Inland Empire prior to the recent changes in the regional economy. This spawned a wave of toll road construction in the area in the 1990s, starting with the addition of toll commuter lanes to the State Route 91 Freeway, the main traffic artery to the western metropolitan area. In addition, smaller, but significant, numbers of people have been moving into southern Riverside County from the San Diego metropolitan area. The cities of Temecula and Murrieta account for 20% of increase in population of Riverside County between 2000 and 2007. The famous resorts of the Coachella Valley, such as Indian Wells, La Quinta, Rancho Mirage, Palm Springs and Palm Desert, are located in Riverside County. Indio is the center of an important date fruit growing region. History The newly formed Riverside County would be created from parts of San Bernardino County and San Diego County. On May 2, 1893, 70% of voters approved the formation of Riverside County. Voters chose the City of Riverside as the County Seat, also by a large margin. Riverside County was officially formed on May 9, 1893, when the Board of Commissioners filed the final canvas of the votes.

The County's population surpassed one million people in 1980 when the current trend of high population growth as a major real estate destination began in the 1970s.



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SECTION IV. Market Overview, continued:

Riverside County, continued: Education

•••• Universities and colleges

�� California Baptist University

�� California Southern Law School

�� College of the Desert

�� La Sierra University

�� Mount San Jacinto College

�� Palo Verde Community College

�� Riverside Community College

�� University of California, Riverside

•••• Military installations

�� March Air Reserve Base

�� Naval Surface Warfare Center, Corona Division

�� Chocolate Mountain Aerial Gunnery Range



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SECTION IV. Market Overview, continued: City of Riverside

Riverside is a city in Riverside County, California, and the County Seat of the eponymous county. Named for its location beside the Santa Ana River, it is the largest city in the Riverside-San Bernardino-Ontario Metropolitan Area of Southern California, and is located approximately 60 miles east of downtown Los Angeles. Riverside is the 61st most populous city in the United States and 12th most populous city in California. As of 2010, Riverside had an estimated population of 304,051. The city spans 85 square miles. Riverside was founded in the early 1870s and is the birthplace of the California citrus industry as well as home of the Mission Inn, the largest Mission Revival Style building in the United States. It is also home to the Riverside National Cemetery. The University of California, Riverside is located in the northeastern part of the City. Other attractions in Riverside include the Fox Performing Arts Center, Riverside Metropolitan Museum, which houses exhibits and artifacts of local history, the California Museum of Photography, the California Citrus State Historic Park, and the Parent Washington Navel Orange Tree, one of the two original orange trees in California. Landmarks Riverside is home of the historic Mission Inn, the beaux-arts style Historic Riverside County Courthouse (based on the Petit Palais in Paris, France), and the Riverside Fox Theater, where the first showing of the 1939 film Gone with the Wind took place. The theater was purchased by the City and is now refurbished. Part of the Riverside Renaissance Initiative, the Fox Theater is currently undergoing rehabilitation to become a performing arts theater. The building will be expanded to hold 1,600 seats, and will boast a stage large enough for Broadway-style performances. The expected completion date for the rehabilitation efforts is Fall 2009. In 2010, singer Sheryl Crow opened the newly remodeled Fox Theater to a nearly sold out show. Neighborhoods The City of Riverside has 28 neighborhoods within city limits. These neighborhoods include: Airport, Alessandro Heights, Arlanza, Arlington, Arlington Heights, Arlington South, Canyon Crest, Casa Blanca, Downtown, Eastside, Grand, Hawarden Hills, Hillside Hunter Industrial Park, La Sierra, La Sierra Acres, La Sierra Hills, La Sierra South, Magnolia Center, Mission Grove, Northside, Orangecrest, Presidential Park, Ramona, Sycamore Canyon Park, Sycamore Canyon Springs, University, Victoria, and Wood Streets.



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SECTION IV. Market Overview, continued:

City of Riverside, continued:

To the east of downtown Riverside is the originally named "Eastside," which grew out of a colonia inhabited by Mexican immigrant workers in the Orange groves, other orchards, and produce fields. The area these people liven in was called Agua Mansa. Mexican communities were also formed in the barrio of Casa Blanca during the early twentieth century. That tradition continues today, with Oaxacan workers in the place of Spanish speakers. Michael Kearney, an anthropologist at University of California, Riverside, refers to this vast transnational labor space as "Oaxacalifornia." The City Council has proposed numerous annexations of nearby unincorporated communities which will increase its population and land area over the next few years. Most notable is the Lake Hills/Victoria Grove area, which would extend its southwestern borders to Lake Mathews.

Features and Economy

Riverside is home to the University of California, Riverside. The UCR Botanical Gardens contains 40 acres of unusual plants, with four miles of walking trails. The City prides itself on its historic connection to the navel orange, which was introduced to North America from Brazil by the first settlers to Riverside in 1873. Riverside is home to the three surviving Parent Navel Orange Tree, from which all American West Coast navel orange trees are descended.

There are three hospitals in Riverside (as of 2006):

• Riverside Community Hospital is a General Acute Care Hospital with Basic Emergency Services and a Level II Trauma Center.

• Parkview Community Hospital Medical Center is a General Acute Care Hospital with Basic Emergency Services.

• Kaiser Foundation Hospital - Riverside is a General Acute Care Hospital with Basic Emergency Services.

According to the City's 2008 Comprehensive Annual Financial Report, the top employers in the city are:

# Employer # of Employees

1 University of California 7,127

2 Riverside Unified School District 4,200

3 Kaiser Permanente 3,900

4 City of Riverside 2,749

5 Alvord Unified School District 2,000

6 Riverside Community College 2,000

7 Fleetwood Motor Home Services 1,963

8 Riverside Community Hospital 1,600

9 Parkview Community Hospital 915

10 Riverside Medical Clinic 750



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SECTION IV. Market Overview, continued: Demographic Profile of the Area

Category 1.0-Mile Ring 2.0-Mile Ring 3.0 Mile Ring

3.14 sq. mi. 12.57 sq. mi. 28.27 sq. mi.

2009 Total Population 24,308 62,692 121,340

2014 Estimated Total Population 25,480 65,722 126,750

% Population Change 2000-2009 15.16% 16.90% 16.63%

% 2009 White Population 54.40% 55.78% 54.08%

% 2009 Black Population 8.42% 6.34% 6.20%

% 2009 American Indian/Alaska Native 1.35% 1.39% 1.34%

% 2009 Asian/Hawaiian/Pacific Islander 8.78% 8.92% 9.65%

% 2009 Other Population 27.05% 27.57% 28.73%

2009 Total Households 8,016 19,282 36,589

2009 Average Household Size 3.0 3.2 3.3

% 2009 Total Owner Occupied Housing Units 41.08% 55.78% 59.54%

% 2009 Total Renter Occupied Housing Units 58.92% 44.22% 40.46%

2009 Per Capita Income $20,370 $19,651 $20,472

2009 Median Household Income $46,184 $46,157 $49,873

2009 Average Household Income $61,772 $63,893 $67,891



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SECTION V. Financial Overview and Pricing Rent Roll and Lease Summary (as of September 1, 2011)

Address Tenant (Business

Name)

Square

Feet

Rent /

SF

Monthly

Rent

Current

Annual Rent

Current

Lease or

Option

Term

Current

Lease or

Option

Expiration

Scheduled Rent

Increases during

Current Lease Term

Next

Scheduled

Rent

Increase

Option to

Renew

Rent in Option

Period

Office Building Tenants

11060 Magnolia AvenueCounty of Riverside -

DPSS (1) 54,592 $ 19.58 $ 89,094 $ 1,069,128 10 09/30/17 3% annual increase 09/01/12 None

11070 Magnolia AvenueCounty of Riverside - CPS

(2) 52,498 $ 20.26 $ 88,630 $ 1,063,565 10 09/30/17 3% annual increase 09/01/12 None

11080 Magnolia Avenue Kaiser Permanente (3) 24,584 $ 16.61 $ 34,018 $ 408,217 11 05/31/17 2.5% annual increase 01/01/12 1 / 3 yearGreater of ending lease

rent or FMV

3715 La Sierra Avenue Sistema de Beinstar (4) 7,000 $ 10.29 $ 6,000 $ 72,000 5 06/30/14 None1 / 5 year + 3

months10% increase

Mezzanine Vacant 6,045 $ 12.00 $ 6,045 $ 72,540

Pad Tenant

3765 La Sierra Avenue Straw Hat Pizza 6,000 $ 13.80 $ 6,900 $ 82,800 10 04/30/20$7,500 beginning 1/14/13;

$8,280 beginning 5/14/15

1/14/2013;

5/14/20152 / 5 year

$9,120 for 1st Option;

FMV for 2nd Option.

Cellular Site Tenants

11060-A Magnolia Avenue Sprint Nextel (5) $ 1,521 $ 18,257 5 06/30/11 None None

3705 La Sierra Avenue T-Mobile (6) $ 1,383 $ 16,599 5 08/31/12Annual CPI: min. 3% - max

5%09/01/12 2 / 5 year

Annual CPI: min. 3% -

max 5%

11060 Magnolia Avenue AT&T $ 1,873 $ 22,476 3 12/31/11 5% annual increase 01/01/12 2 / 3 year 5% annual increase

3705 La Sierra Avenue Verizon (7) $ 1,638 $ 19,658 7 06/30/17 3% annual increase 07/01/12 2 / 5 year 3% annual increase

SCHEDULED GROSS

INCOME 150,719 $ 237,103 $ 2,845,241

Current Vacancy 6,045 6,045$ $ 72,540

CURRENT ACTUAL 144,674 231,058$ $ 2,772,701

Footnotes Description on the Next Page



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SECTION V. Financial Overview and Pricing Rent Roll and Lease Summary, continued: Footnotes to Rent Roll on Previous Page

1. Department of Public Social Services. Lease contains an annual option to cancel based on the County budget funding. Rent based on an increase on September 1, 2011.

2. Child Protective Services. Lease contains an annual option to cancel based on the County budget funding. Rent based on an

increase on September 1, 2011. 3. Administrative offices only. 4. Training facility for an independent Herbalife distributer. 5. The lease expires on June 30, 2011. The rent shown assumes that they exercise their One 5-year Option to Renew at the

scheduled rent. They would then have no further Options to Renew. 6. T-Mobile has announced a merger with AT&T, which is in the governmental approval process. The Landlord has not received any

notice regarding the existing lease. The rent shown is based on a 3% minimum rent increase on September 1, 2011. 7. The Landlord has the right to terminate an Option extension.



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SECTION V. Financial Overview and Pricing, continued: Annual Income and Expenses

Footnotes Descriptions on the Next Page

INCOME and EXPENSE CATEGORIES CURRENT ANNUAL FIGURES (as of 09.01.2011)

PRO FORMA ANNUAL FIGURES (as of 09.01,2011)

Scheduled Gross Income: Office Building �� County of Riverside - DPSS �� County of Riverside - CPS �� Kaiser Permanente �� Sistema de Beinstar �� Mezzanine: (Vacant) Free-Standing, Single Tenant Building �� Straw Hat Pizza Cell Sites attached to Office Building �� Sprint Nextel �� T-Mobile Cellular �� ATT �� Verizon Total Gross Rental Income �� Expense Recoveries Total Gross Income Less, Vacancy @ 2% (2) Effective Gross Income Less, Operating Expenses: �� Property Taxes �� Insurance �� Common Area Expenses �� Direct Tenant Expenses Total Operating Expense

Net Operating Income

$1,069,128

1,063,565 408,217

72,000 0

82,800

18,257 16,559 22,476 19,658

__________ $2,845,241

+ 87,000 __________

$2,932,241

NA __________

$2,932,241

$172,000 23,000

160,000 108,000

__________

$463,000

$2,469,241

$1,069,128

1,063,565 408,217

72,000 (1) 72,540

82,800

18,257 16,559 22,476 19,658

__________ $2,917,781

(4) (5) + 124,000

__________ $3,041,781

60,835

__________ $2,980,945

(3) (4) $304,000 23,000

160,000 108,000

__________

$595,000

$2,385,945



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SECTION V. Financial Overview and Pricing, continued:

Annual Income and Expenses, continued: Footnotes: 1. Asking rent of $1.00 Gross per square foot per month. 2. Only applies to the “Pro Forma” column. 3. Assumes 1.2% tax rate of the listed price. The figure will differ if the sales price differs. 4. A portion of the tax increase is passed through to the tenants who have that provision in their lease. None of the leases with a

pass-through provision for taxes has a limitation amount or cap on the pass-through. The balance of the tax increase by the property owner. The current ownership provided the “Actual Current” and “Pro Forma” figures.

5. The following summarizes who has the responsibility for various Operating Expenses:

TENANT OPERATING EXPENSES AND CAMS ((L)andlord or (T)enant

R. E. Taxes Fire Insurance Structural Roof/Walls

Utilities Janitorial CAMS

County of Riverside: 54,592 SF L L L T L L County of Riverside: 52,498 SF L L L T L L Kaiser Health: 24,584, SF T T L/T T T T Sistema de Beinstar (Herbalife): 7,000 SF L L L T T L Mezzanine: 6,045 SF L L L L L L Straw Hat Pizza: 6,000 SF T T L T T T Nextel Cellular Site L L L L L L T-Mobile Cellular Site L L L L L L Cingular Cellular Site L L L L L L Verizon Cellular Site L L L L L L



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SECTION V. Financial Overview and Pricing, continued: Financing Scenario and Return on Equity A loan quote has been provided by a major lending source familiar with the Property and has a prior business relationship with the Ownership. Based on the loan quote, following illustrates:

•••• A financing scenario based on a projected 75% “Loan-to-Value” ratio, interest rate, and amortization.

•••• The Down Payment

•••• The Pre-Tax Cash Flow

•••• The Estimated Capitalization Rate

•••• The Estimated Return on Equity (Down Payment )

Listed Price Less, Estimated Loan from Institutional Source – 75% (see loan disclaimer below) Down Payment Estimated Net Income Less, Debt Service @ 5.25%, 30 yr. (6.626% Loan Constant) (see loan disclaimer below) Pre-Tax Cash Flow NOTE: No representation is made by Ownership or Charles Dunn Company that a loan with these exact terms and conditions will be readily available to all potential buyers or will be available when needed at a specific time. Loan markets fluctuate on a regular basis.

$24,500,000 - 18,375,000 $ 6,125,000

$2,385,945 - 1,217,609 $ 1,168,335

•••• Estimated Capitalization Rate •••• Estimated Return on Equity

9.7% 19.1%

•••• Price per Square Foot of Improvement •••• Price per Square Foot of Land

$162.55 $60.03



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SECTION V. Financial Overview and Pricing, continued: Financial Summary

Indicators

Details

Price $24,500,000

Proposed Institutional Financing – 75% @ 5.25%, amortized for 30 year. $18,375,000

Down Payment $ 6,125,000

Annual Scheduled Gross Income, including Expense Recoveries $3,010,803

Estimated Annual Net Operating Income $2,355,857

Capitalization Rate based on Estimated Annual Net Operating Income 9.6%

Annual Debt Service $1,217,609

Estimated Pre-Tax Cash Flow $1,138,248

Estimated Pre-Tax Cash Flow Return on Down Payment 18.6%

Price Per Square Feet of Improvements $162.55

Price Per Square Feet of Land $60.03



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SECTION V. Financial Overview and Pricing, continued: Profile of Tenants

Tenant Name County of Riverside – Department of Public Social Services Lessee County of Riverside Number of Locations 30+ for all DPPS uses Use Administer general relief, food stamps, Medi-Cal, CALWorks, etc. Guarantor or Signature County of Riverside Tenant Name County of Riverside – Department of Public Social Services Lessee County of Riverside Number of Locations 30+ for all DPPS uses Use Child Protective Services Guarantor County of Riverside Tenant Name Kaiser Permanente Lessee Kaiser Foundation Health Plan, Inc., a California Non-Profit Benefit Corporation Number of Locations Operating in nine states and Washington, DC. Use Administrative offices Guarantor or Signature Kaiser Health Care Foundation, Inc. Tenant Name Sistema de Beinstar-Riverside Lessee Maria del Carmen Mireles Number of Locations Not available Use Training facility for a Riverside area Herbalife distributor Guarantor or Signature Signed by Lessee personally. No specific personal guarantee. Tenant Name Straw Hat Pizza Lessee Straw Hat Restaurant, Inc., a California Corporation and Pitzmoor, Inc., a California Corp. Number of Locations 60+ in the United States Use Sit-down pizza restaurant Guarantor or Signature The lease is a joint venture between a franchisee and the parent company.



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SECTION V. Financial Overview and Pricing, continued: Profile of Tenants, continued:

Tenant Name Sprint Nextel Lessee Nextel of California, Inc, a Delaware Corporation Number of Locations A significant number Use Cellular wireless antenna Guarantor Signed by the corporation Tenant Name T-Mobile Lessee T-Mobile USA, Inc. Number of Locations A significant number Use Cellular wireless antenna Guarantor Signed by the corporation Tenant Name ATT Wireless Services Lessee ATT Wireless Services, a Delaware Corporation Number of Locations A significant number Use Cellular wireless antenna Guarantor Signed by the corporation Tenant Name Verizon Wireless Lessee Los Angeles SMSA Limited Partnership, a California Limited Partnership Number of Locations A significant number Use Cellular wireless antenna Guarantor Air Touch Cellular, General Partner

Credit Anchored Commercial Property - Riverside

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