HERITAgE PLAZA - f.tlcollect.com · Compass Bank, y um yum donuts, Verizon w ireless, and more •...

ALEX KOZAKOVSenior Vice President+1 213 613 3031Lic. [email protected]

PATRICK WADESenior Vice President+1 213 613 3071Lic. [email protected]

ALAn KRuEgERSenior Vice President+1 909 418 2062Lic. [email protected]

CAPITAL MARKETs | InVEsTMEnT PROPERTIEs | OffERIng MEMORAnDuM

EXCLusIVELY LIsTED BY: LOCAL MARKET EXPERT

HERITAgE PLAZA5200 ArLington AVenue, riVerSide, CA 92504

ALEX KOZAKOV

Senior Vice President

+1 213 613 3031

PATRICK WADE


+1 213 613 3071

ALAn KRuEgER


+1 909 418 2062

InVEsTMEnT OVERVIEWinVeStment SummAry

inVeStment HigHLigHtS

Site PLAn

fInAnCIALsexeCutiVe SummAry

FinAnCiAL ASSumPtionS

noi SummAry

CASH FLow ProjeCtionS

PriCing mAtrix

rent roLL

TEnAnT OVERVIEW

AREA OVERVIEW


EXCLusIVELY LIsTED BY:

InVEsTMEnT PROPERTIEs

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

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

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

DIsCLAIMERThis Memorandum contains select information pertaining to the Property and the Owner, and does not purport to be all-inclusive or contain all or part of the information which prospective investors may require to evaluate a purchase of the Property. The information contained in this Memorandum has been obtained from sources believed to be reliable, but has not been verified for accuracy, completeness, or fitness for any particular purpose. All information is presented “as is” without representation or warranty of any kind. Such information includes estimates based on forward-looking assumptions relating to the general economy, market conditions, competition and other factors which are subject to uncertainty and may not represent the current or future performance of the Property. All references to acreages, square footages, and other measurements are approximations. This Memorandum describes certain documents, including leases and other materials, in summary form. These summaries may not be complete nor accurate descriptions of the full agreements referenced. Additional information and an opportunity to inspect the Property may be made available to qualified prospective purchasers. You are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent legal and financial advisors, and carefully investigate the economics of this transaction and Property’s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK.

The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions at any time with or without notice to you. All offers, counteroffers, and negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have any legal commitment or obligation except as set forth in a fully executed, definitive purchase and sale agreement delivered by the Owner.

COPYRIgHT nOTICE © 2017 CBRE, Inc. All Rights Reserved. PMStudio_January2017

inVeStment oVerView

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HERITAgE PLAZA5200 ARLIngTOn AVEnuE, RIVERsIDE, CA 92504

InVEsTMEnT suMMARY

ADDREss: 5130-5290 Arlington Avenue riverside, CA 92504

OffERIng PRICE: $32,750,000

nOI (In-PLACE): $2,145,696

CAP RATE (In-PLACE): 6.55%

nOI sTABILIZED (YEAR 2): $2,505,232

nOI sTABILIZED CAP RATE sTABILIZED (YEAR 2): 7.65%

BuILDIng sIZE: 119,048 SF

LAnD AREA: 490,050 SF

CuRREnT OCCuPAnCY: 86.3%

YEAR BuILT / REnOVATED: 1994/1995

PARKIng: 514 Spaces

ZOnIng: C3

TRAffIC COunTs: over 28,300 VPd - Arlington Avenueover 18,600 VPd - Streeter Avenue

MAJOR TEnAnTs:del taco, radio Shack, Smart & Final, Starbucks, Subway, uPS, uSPS, yum yum donuts

InVEsTMEnT HIgHLIgHTs

Rare southern California grocery-Anchored shopping Center with upside

• Smart & Final Anchored Center operating at 86.3% occupancy: immediate upside Achievable through Lease-up

• traditional Shopping Center Layout: offering Consists of grocery Anchor, Shop Space, and two drive through Pad Buildings (Starbucks and del taco)

• majority of tenants on triple-net Leases with Scheduled rent increases and Staggered Lease expirations: excellent Built-in Cash Flow growth

• Complimentary tenant mix includes national tenants Smart & Final, Starbucks, del taco, uPS, Subway, jackson Hewitt, Compass Bank, yum yum donuts, Verizon wireless, and more

• established tenants – over 79.4% of occupied gLA Businesses Have occupied the Center Since 2007 or earlier

• delivered Free and Clear of debt Allows for new Financing at Attractive rates: excellent year 1 Cash-on-Cash returns

• Several new Leases and extensions recently executed Showing demand in Submarket

• Significant Lease term remaining from multiple Anchor and national tenants - Provides income Security

5


InVEsTMEnT HIgHLIgHTs (continued)

strong Retail Location with solid Market fundamentals

• Heritage Plaza Benefits from over 600’ of Frontage Along Arlington Ave (28,300+ Vehicles per day)

• Property is Adjacent to Arlington Square: Complimentary retail Center with Big Lots, ross, Chase Bank, dollar tree, and more

• multiple ingress/egress Points with easily Accessible Parking Field in Between major north/South Arteries Streeter Ave. (18,600 VPd) and madison St. (14,006 VPd)

• Strong demographics: over 121,000 People with an Average Household income exceeding $67,000 in a 3-mile radius

• Professionally managed and maintained

• Close Proximity to 91 Freeway Arlington Avenue (1.5 miles) and madison Street (1.0 mile) on-ramps/off-ramps

• Surrounded by rooftops and within Blocks to ramona High School, jefferson elementary, and Sierra middle School

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7


LOCATIOn MAP

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RUBEN ESCOBOSALICENSE NO. 00572862909 937 [email protected]

BARBARA ARMENDARIZLICENSE NO. 01472088909 937 [email protected]

5130-5290 ARLINGTON AVENUE, RIVERSIDE, CALIFORNIA 92504

5222

E52

24

5228

5232

5236 52

40

5242

5258

5250

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5202519851965194

51925190

5186

5184

5182

5180

5176

5174

517251

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5160 51405130

5200

5200B

5258

5286

52825276

52745266

5262

BC

D

5200

2ND FLOOR OFFICE SPACE

TENANT ROSTER

51

5186

584

DCCC

B

5151

D

5232

51

Landlord makes no representation that any of the above tenants or building configurations will exist now or in the future.Tenants depicted may be proposed and may not actually occupy the proposed buildings. The dimensions and square footages shownare estimates only and not guaranteed.

5226

5262

GREAT FASION LOW PRICES

5274274

Unit Name Size SF

5130 Yum Yum Donut 1,3115132 Geneva Jewelry 6565140 RadioShack 2,2405160 Rent A Center 4,0005168 Laundroma 1,8655172 US Post Office 3,7575174/76 Available 3,0005180 Pho Vinam 1,5005182 LV Nails & Spa 1,2005184 Plaza Hair Salon 9005186 Available 1,5005188 Alta Vista 10,2505190 Crown Cleaners 1,1755192 Threading & Waxing 1,2005194 Advance America 1,2005196 Dalia’s Pizza 1,2005198 UPS Store 1,5005200 Starbucks 1,7475200B Verizon 1,7375202 Smart & Final Extra 28,2025210 Jackson Hewitt Tax 1,5005214 Peking Express 1,2355216 The Water Source 1,1845218 Available 8405220 Smoke Shop 8405222A Maly’s Beauty Supply 2,3115222E Doggie Spa 1,1005224 Jos. DDS 1,6805226 Available 1,4705228 Tokyo Restaurant 4,0265232 Available 2,8805236 Subway 1,3205240 Just Auto Insurance 7505242 Compass Bank 2,5005250 Faralla’s Cucina 3,6205254 Available 3005258 Avenue 4,4005262 Available 2,2275266 Available 1,2005274 Alberto's 2,4005276 HoneyBaked 2,6265282 Susie’s Hair Salon 8205286 Waba Grill 2,5215290 Del Taco 1,856

5222B Available 3395222C Available 3375222D Available 370

516-200 Against All Odds Outreach 628516-201 Available 220516-202 Available 334516-203 Available 332516-204 Available 674For Information, Please Contact

Darren Bovard (BRE#01362187)Jaryd Meenach(BRE#01936557)NewMark Merrill Companies

Tel: 818.710.6100 Fax: 818.710.6116

5132

5188

5286

519251

74-517

6

RUBEN ESCOBOSALICENSE NO. 00572862909 937 [email protected]

BARBARA ARMENDARIZLICENSE NO. 01472088909 937 [email protected]

5130-5290 ARLINGTON AVENUE, RIVERSIDE, CALIFORNIA 92504

5222

E52

24

5228

5232

5236 52

40

5242

5258

5250

5222 A52205218521652145210

5202519851965194

51925190

5186

5184

5182

5180

5176

5174

5172

5168

5160 51405130

5200

5200B

5258

5286

52825276

52745266

5262

BC

D

5200

2ND FLOOR OFFICE SPACE

TENANT ROSTER

51

5186

584

DCCC

B

5151

D

5232

51

Landlord makes no representation that any of the above tenants or building configurations will exist now or in the future.Tenants depicted may be proposed and may not actually occupy the proposed buildings. The dimensions and square footages shownare estimates only and not guaranteed.

5226

5262

GREAT FASION LOW PRICES

5274274

Unit Name Size SF

5130 Yum Yum Donut 1,3115132 Geneva Jewelry 6565140 RadioShack 2,2405160 Rent A Center 4,0005168 Laundroma 1,8655172 US Post Office 3,7575174/76 Available 3,0005180 Pho Vinam 1,5005182 LV Nails & Spa 1,2005184 Plaza Hair Salon 9005186 Available 1,5005188 Alta Vista 10,2505190 Crown Cleaners 1,1755192 Threading & Waxing 1,2005194 Advance America 1,2005196 Dalia’s Pizza 1,2005198 UPS Store 1,5005200 Starbucks 1,7475200B Verizon 1,7375202 Smart & Final Extra 28,2025210 Jackson Hewitt Tax 1,5005214 Peking Express 1,2355216 The Water Source 1,1845218 Available 8405220 Smoke Shop 8405222A Maly’s Beauty Supply 2,3115222E Doggie Spa 1,1005224 Jos. DDS 1,6805226 Available 1,4705228 Tokyo Restaurant 4,0265232 Available 2,8805236 Subway 1,3205240 Just Auto Insurance 7505242 Compass Bank 2,5005250 Faralla’s Cucina 3,6205254 Available 3005258 Avenue 4,4005262 Available 2,2275266 Available 1,2005274 Alberto's 2,4005276 HoneyBaked 2,6265282 Susie’s Hair Salon 8205286 Waba Grill 2,5215290 Del Taco 1,856

5222B Available 3395222C Available 3375222D Available 370

516-200 Against All Odds Outreach 628516-201 Available 220516-202 Available 334516-203 Available 332516-204 Available 674For Information, Please Contact

Darren Bovard (BRE#01362187)Jaryd Meenach(BRE#01936557)NewMark Merrill Companies

Tel: 818.710.6100 Fax: 818.710.6116

5132

5188

5286

519251

74-517

6

BuILDIng sITE PLAn

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MADIsOn s

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PD

ARLIngTOn AVE

sTREETER AVE

28,313 VPD

18,600 VPD

RAMOnAHIgH sCHOOL

2,000+ sTuDEnTs

HERITAgE PLAZA

sTARBuCKs

ARLIngTOnsQuARE

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FinAnCiALS

EXECuTIVE suMMARY

Heritage Plaza-RiversideSmart & Final & Charter School

EXECUTIVE SUMMARY

PROPERTY DESCRIPTION

Property Type Retail Size of Improvements 119,648 SFProperty Address 5130-5290 Arlington Avenue Currently Vacant as of 2/1/17 16,401 SF

Riverside, CA Current Occupancy as of 2/1/17 86.29%Projected Occupancy as of 5/1/17 86.29%

ACQUISITION AND RESIDUAL SUMMARY LEVERAGE SUMMARY [1]

MARKET LOANPurchase Price as of May 1, 2017 $274 PSF $32,750,000 Initial Loan Funding (as of May-17) $19,650,000

Loan-To-Value Ratio (Initial Funding) 60.00%Funding Date May-17

Year 1 Year 2 Year 3 Maturity Date Apr-27Capitalization Rate 6.65% 7.65% 7.87% Remaining Loan Term During Analysis 10.0 YearsCash Return 5.65% 7.25% 7.56% Amortization Period 30 YearsLeveraged Cash Return 7.27% 11.20% 9.63% Initial Interest Only Period (If Any) 24 Months

Interest Rate 4.50%In-Place Capitalization Rate 6.55% Interest Rate Quote -

Loan Constant 6.08%3-Year 5-Year 7-Year Origination Fee on Initial Loan Funding 1.00%

Average Capitalization Rate 7.39% 7.76% 8.06% Initial Debt Yield 11.08%Average Cash Return 6.82% 7.27% 7.58% Debt Service Coverage Ratio (NOI) 1.82xAverage Leveraged Cash Retur 9.37% 9.87% 10.36% Debt Service Coverage Ratio (CF) 1.55x

Net Residual Value as of April 30, 2027 $47,491,000 Purchase Price as of May 1, 2017 $32,750,000Net Residual Per Square Foot $397 Total Initial Loan Principal (19,650,000)Residual Capitalization Rate 6.85% Total Initial Loan Fees 196,500Residual Cost of Sale 2.00% Holdbacks and Escrows 0

Initial Equity $13,296,500

ALL CASH IRR 10.54% LEVERAGED IRR 16.61%

[1] Leveraged analysis is based on financing that a particular investor may or may not be able to obtain.

2/8/2017 3:42 PM 1CBRE Financial Consulting Group

12


suMMARY Of fInAnCIAL AssuMPTIOns


SUMMARY OF FINANCIAL ASSUMPTIONS

GLOBAL VACANT SPACE LEASING SECOND GENERATION LEASING

Anchors In-Line2nd Floor

(516-200's)Analysis Period Occupancy and Absorption Retention Ratio 70% 70% 70%

Commencement Date May 1, 2017 Projected Vacant at 5/1/17 16,401 SFEnd Date April 30, 2027 Currently Vacant as of 2/1/17 16,401 SF Financial TermsTerm 10 Years Percentage Vacant at 2/1/17 13.71% 2017 Annual Market Rent See Rent Roll See Rent Roll $15.00 PSF

Absorption Period 20 Month(s) Rent Adjustment 10% Ea 5 Yrs 3.00% Annually 3.00% AnnuallyArea Measures Absorption Period Start Date May 1, 2017 Lease Term 10 Years 5 Years 5 Years

Building Square Feet (NRSF) 119,648 SF First Absorption Occurs On October 1, 2017 Expense Reimbursement Type NNN + 10% AF NNN GrossLast Absorption Occurs On January 1, 2019

Growth Rates Tenanting CostsConsumer Price Index (CPI) 3.00% Financial Terms Rent AbatementsOther Income Growth Rate 3.00% 2017 Annual Market Rent See Rent Roll New 2 Month(s) 2 Month(s) 2 Month(s)Operating Expenses 3.00% Rent Adjustment 3.00% Annually Renewal 0 Month(s) 0 Month(s) 0 Month(s)Real Estate Taxes 2.00% Lease Term 5 Years Weighted Average 0.60 Month(s) 0.60 Month(s) 0.60 Month(s)Market Rent Growth [1] Expense Reimbursement Type See Vacant Assumptions

CY 2018 - 3.10% Rent Abatements 2 Month(s) Tenant Improvements ($/NRSF)CY 2019 - 3.00% Tenant Improvements ($/NRSF) $15.00 PSF New $10.00 PSF $15.00 PSF $15.00 PSFCY 2020 - 3.00% Commissions 5.00% Renewal $5.00 PSF $0.00 PSF $0.00 PSFCY 2021 - 3.00% Weighted Average $6.50 PSF $4.50 PSF $4.50 PSFCY 2022 - 3.00% EXPENSESCY 2023 - 3.00% Leasing CommissionsCY 2024 - 3.00% Operating Expense Source CY 2016 Budget New 5.00% 5.00% 5.00%CY 2025 - 3.00% Renewal 2.00% 0.00% 0.00%CY 2026 - 3.00% Management Fee (% of EGR) 2.50% Weighted Average 2.90% 1.50% 1.50%

CY 2027+ - 3.00%Real Estate Taxes Reassessed Yes [3] Downtime

General Vacancy Loss 5.00% [2] Millage Rate 1.068210% New 6 Month(s) 6 Month(s) 6 Month(s)Special Assessments $2,658 Weighted Average 2 Month(s) 2 Month(s) 2 Month(s)

Capital Reserves (CY 2017 Value) $0.20 PSF

Notes:All market rates are stated on calendar-year basis.[1] Market Rent Growth projections are based upon CBRE Econometric Advisors’ 2019 Q3 Retail forecast for Riverside, CA through CY 2019, with 3% annual increases modeled thereafter.[2] 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 lease terms only: Albertsons, Del Taco, Starbucks and The United States Postal.[3] Real Estate Taxes have been reassessed at the estimated purchase price based on a millage rate of 1.068210% plus special assessments of $2,658.

2/8/2017 3:49 PM 1

This page is part of a package and is subject to the disclaimer on the Executive Summary.CBRE Financial Consulting Group

13


In-PLACE AnD PROJECTED nOI suMMARY


IN-PLACE AND PROJECTED NOI SUMMARY

In-Place NOI Pro Forma NOIMay-17, Annualized $ PSF May-17 to Apr-18 $ PSF

Size of Improvements 119,648 SF 119,648 SF

REVENUESScheduled Base Rent

Gross Potential Rent $2,549,904 $21.31 $2,567,061 $21.46Absorption & Turnover Vacancy (346,356) (2.89) (297,448) (2.49)Base Rent Abatements 0 0.00 (56,647) (0.47)

Total Scheduled Base Rent 2,203,548 18.42 2,212,966 18.50

Expense Reimbursements 827,784 6.92 855,680 7.15Sign Pole Rent 10,404 0.09 10,508 0.09NTCH-CA, Inc 41,016 0.34 42,091 0.35Recycling Center 21,600 0.18 22,400 0.19

TOTAL GROSS REVENUE 3,104,352 [1] 25.95 3,143,645 26.27General Vacancy Loss 0 0.00 0 0.00

EFFECTIVE GROSS REVENUE 3,104,352 25.95 3,143,645 26.27

OPERATING EXPENSESCommon Area Expenses (260,064) (2.17) (262,659) (2.20)Common Area Utilities (69,612) (0.58) (70,311) (0.59)Building Expenses (128,664) (1.08) (129,946) (1.09)Building Utilities (4,008) (0.03) (4,046) (0.03)Painting (9,444) (0.08) (9,539) (0.08)Insurance- Common Area (8,748) (0.07) (8,832) (0.07)Insurance- Property/Earthquake (48,012) (0.40) (48,491) (0.41)Management Fee (77,604) (0.65) (78,591) (0.66)Real Estate Taxes (352,500) (2.95) (354,829) (2.97)

TOTAL OPERATING EXPENSES (958,656) [2] (8.01) (967,244) (8.08)

NET OPERATING INCOME $2,145,696 $17.93 $2,176,401 $18.19

Capitalization Rate 6.55% 6.65%

PURCHASE PRICE AS OF MAY 1, 2017 $32,750,000 $273.72 $32,750,000 $273.72

In-Place Occupancy (At Start of Analysis With No Vacant Lease-Up) 86.29% 86.29%

Average Occupancy (Includes Vacant Lease-Up and Rollover) - 88.68%

Notes:

[1] In-Place Net Operating Income is calculated using contractual rents and expense reimbursements as of May 2017, Annualized (with no General Vacancy Loss).In-Place NOI does not include vacant lease-up revenue, downtime due to near-term expirations, or future rent increases for existing tenants.

[2] Real Estate Taxes are reassessed based on the sales price.

2/8/2017 3:51 PM 1


14


CAsH fLOW PROJECTIOnsCASH FLOW PROJECTIONS

Fiscal Year Ending - April 30 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Physical Occupancy 88.68% 98.13% 98.74% 99.05% 97.63% 96.71% 98.61% 98.45% 98.95% 97.82% 96.92%

Overall Economic Occupancy [1] 89.88% 95.59% 95.69% 95.78% 95.36% 95.32% 95.52% 95.59% 95.68% 95.47% 95.57%

Weighted Average Market Rent $23.03 $23.74 $24.45 $25.18 $25.94 $26.72 $27.52 $28.35 $29.20 $30.07 $30.97

Weighted Average In Place Rent [2] $20.86 $21.67 $22.29 $23.30 $23.87 $24.85 $25.54 $26.27 $27.48 $28.12 $28.97

Total Operating Expenses PSF Per Year $8.08 $8.35 $8.57 $8.80 $9.03 $9.27 $9.52 $9.77 $10.03 $10.30 $10.56

[3]FY 2018

REVENUES $/SF/YRScheduled Base Rent

Gross Potential Rent $21.46 $2,567,061 $2,626,333 $2,688,567 $2,801,343 $2,901,043 $3,008,437 $3,087,076 $3,173,528 $3,307,466 $3,408,721 $3,499,391Absorption & Turnover Vacancy (2.49) (297,448) (59,606) (39,941) (31,424) (86,342) (104,297) (54,251) (63,373) (39,056) (92,820) (120,822)Base Rent Abatements (0.47) (56,647) (22,201) (15,271) (8,788) (26,542) (28,141) (19,496) (16,303) (14,648) (25,196) (19,460)

Total Scheduled Base Rent 18.50 2,212,966 2,544,526 2,633,355 2,761,131 2,788,159 2,875,999 3,013,329 3,093,852 3,253,762 3,290,705 3,359,109

Expense Reimbursements 7.15 855,680 961,139 994,261 1,025,671 1,029,969 1,047,682 1,094,889 1,121,171 1,157,162 1,173,697 1,193,145Sign Pole Rent 0.09 10,508 10,823 11,148 11,482 11,827 12,182 12,547 12,924 13,311 13,711 14,122NTCH-CA, Inc 0.35 42,091 43,565 45,089 46,668 48,222 49,669 51,159 52,694 54,275 55,903 57,580Recycling Center 0.19 22,400 24,240 24,967 25,716 26,488 27,282 28,101 28,944 29,812 30,707 31,628

TOTAL GROSS REVENUE 26.27 3,143,645 3,584,293 3,708,820 3,870,668 3,904,665 4,012,814 4,200,025 4,309,585 4,508,322 4,564,723 4,655,584General Vacancy Loss 0.00 0 (79,736) (107,165) (124,755) (73,600) (61,627) (117,715) (113,796) (143,424) (93,932) (72,097)

EFFECTIVE GROSS REVENUE 26.27 3,143,645 3,504,557 3,601,655 3,745,913 3,831,065 3,951,187 4,082,310 4,195,789 4,364,898 4,470,791 4,583,487

OPERATING EXPENSESCommon Area Expenses (2.20) (262,659) (270,538) (278,654) (287,014) (295,625) (304,493) (313,628) (323,037) (332,728) (342,710) (352,991)Common Area Utilities (0.59) (70,311) (72,420) (74,593) (76,831) (79,136) (81,510) (83,955) (86,474) (89,068) (91,740) (94,492)Building Expenses (1.09) (129,946) (133,844) (137,859) (141,995) (146,255) (150,643) (155,162) (159,817) (164,611) (169,550) (174,636)Building Utilities (0.03) (4,046) (4,167) (4,292) (4,421) (4,554) (4,690) (4,831) (4,976) (5,125) (5,279) (5,438)Painting (0.08) (9,539) (9,826) (10,120) (10,424) (10,737) (11,059) (11,391) (11,732) (12,084) (12,447) (12,820)Insurance- Common Area (0.07) (8,832) (9,097) (9,370) (9,651) (9,941) (10,239) (10,546) (10,863) (11,189) (11,524) (11,870)Insurance- Property/Earthquake (0.41) (48,491) (49,946) (51,444) (52,988) (54,577) (56,214) (57,901) (59,638) (61,427) (63,270) (65,168)Management Fee (0.66) (78,591) (87,614) (90,041) (93,648) (95,777) (98,780) (102,058) (104,895) (109,122) (111,770) (114,587)Real Estate Taxes (2.97) (354,829) (361,873) (369,057) (376,385) (383,859) (391,484) (399,260) (407,192) (415,283) (423,535) (431,953)

TOTAL OPERATING EXPENSES (8.08) (967,244) (999,325) (1,025,430) (1,053,357) (1,080,461) (1,109,112) (1,138,732) (1,168,624) (1,200,637) (1,231,825) (1,263,955)

NET OPERATING INCOME 18.19 2,176,401 2,505,232 2,576,225 2,692,556 2,750,604 2,842,075 2,943,578 3,027,165 3,164,261 3,238,966 3,319,532

CAPITAL COSTSTenant Improvements (2.00) (238,938) (74,865) (52,389) (31,451) (88,997) (113,763) (66,458) (52,722) (53,745) (82,130) (78,822)Leasing Commissions (0.74) (89,047) (33,278) (24,094) (13,866) (41,873) (44,398) (30,760) (25,721) (23,114) (39,750) (30,702)Capital Reserves (0.20) (24,169) (24,894) (25,641) (26,410) (27,202) (28,018) (28,859) (29,725) (30,616) (31,535) (32,481)AMORT: Asphalt Repairs '15 0.02 2,889 0 0 0 0 0 0 0 0 0 0AMORT: Parking Lot Repair 0.18 21,863 0 0 0 0 0 0 0 0 0 0AMORT: Light Pole Banners 0.01 1,325 1,467 992 0 0 0 0 0 0 0 0

TOTAL CAPITAL COSTS (2.73) (326,077) (131,570) (101,132) (71,727) (158,072) (186,179) (126,077) (108,168) (107,475) (153,415) (142,005)

OPERATING CASH FLOW $15.46 $1,850,324 $2,373,662 $2,475,093 $2,620,829 $2,592,532 $2,655,896 $2,817,501 $2,918,997 $3,056,786 $3,085,551 $3,177,527

ACQUISITION & RESIDUAL SALEAcquisition Cost ($32,750,000) 0 0 0 0 0 0 0 0 0 0 All CashNet Residual Value [4] 0 0 0 0 0 0 0 0 0 0 47,491,115 IRR

CASH FLOW BEFORE DEBT ($32,750,000) $1,850,324 $2,373,662 $2,475,093 $2,620,829 $2,592,532 $2,655,896 $2,817,501 $2,918,997 $3,056,786 $50,576,666 10.54%

MARKET LOAN [5]Loan Funding / Payoff 19,650,000 0 0 0 0 0 0 0 0 0 (16,666,550)Loan Fees (196,500) 0 0 0 0 0 0 0 0 0 0 LeveragedAnnual Debt Service 0 (884,250) (884,250) (1,194,764) (1,194,764) (1,194,764) (1,194,764) (1,194,764) (1,194,764) (1,194,764) (1,194,764) IRR

CASH FLOW AFTER DEBT ($13,296,500) $966,074 $1,489,412 $1,280,329 $1,426,065 $1,397,768 $1,461,132 $1,622,737 $1,724,233 $1,862,022 $32,715,352 16.61%

NOI Return 6.65% 7.65% 7.87% 8.22% 8.40% 8.68% 8.99% 9.24% 9.66% 9.89%

UNLEVERAGED Cash Return 5.65% 7.25% 7.56% 8.00% 7.92% 8.11% 8.60% 8.91% 9.33% 9.42%

LEVERAGED Cash Return 7.27% 11.20% 9.63% 10.73% 10.51% 10.99% 12.20% 12.97% 14.00% 14.22%

Debt Service Coverage Ratio (NOI) 2.46x 2.83x 2.16x 2.25x 2.30x 2.38x 2.46x 2.53x 2.65x 2.71xDebt Service Coverage Ratio (CF) 2.09x 2.68x 2.07x 2.19x 2.17x 2.22x 2.36x 2.44x 2.56x 2.58x

Rolling - All Cash IRR 15.09% 12.31% 11.97% 11.28% 11.04% 10.90% 10.74% 10.79% 10.65% 10.54%Rolling - Leveraged IRR 29.04% 22.27% 21.24% 19.46% 18.68% 18.15% 17.59% 17.44% 16.98% 16.61%

[1] This figure takes into account vacancy/credit loss, absorption vacancy, turnover vacancy, and base rent abatements.[2] This figure does not include any amount related to expense reimbursements. Only Scheduled Base Rent and Fixed/CPI Increases are included in this calculation, which is based on the weighted-average physical occupancy during each fiscal year.[3] Based on 119,648 square feet.[4] Net Residual Value is calculated by dividing Year 11 NOI by the Residual Cap Rate of 6.85% and applying a 2.00% Cost of Sale.[5] Market Debt based on 60% Loan-to-Value, 4.50% Interest Rate, with 24 Months of Interest Only then 30-Year Amortization, and 1.00% Loan Fee.

2/8/2017 3:52 PM 1


15


PRICIng MATRIXPRICING MATRIX

(VARIABLE 'ESTIMATED VALUE')

ALL CASH

DiscountEstimated Est. Value Rate Capitalization Rates Cash-on-Cash Returns Components of Value Percentage of ValueValue [1] PSF [2] (IRR) In-Place Year 1 Year 2 5-Year Avg Mark-to-Market Year 1 5-Year Average Cash Flow Residual [3] % Cash Flow % Residual

$34,000,000 $284.17 10.00% 6.31% 6.40% 7.37% 7.47% 7.75% 5.44% 7.01% $15,694,000 $18,306,000 46.16% 53.84%$33,500,000 $279.99 10.21% 6.41% 6.50% 7.48% 7.58% 7.86% 5.52% 7.11% $15,542,000 $17,958,000 46.39% 53.61%$33,000,000 $275.81 10.43% 6.50% 6.60% 7.59% 7.70% 7.98% 5.61% 7.22% $15,389,000 $17,611,000 46.63% 53.37%$32,750,000 $273.72 10.54% 6.55% 6.65% 7.65% 7.76% 8.04% 5.65% 7.27% $15,312,000 $17,438,000 46.75% 53.25%$32,500,000 $271.63 10.65% 6.60% 6.70% 7.71% 7.82% 8.10% 5.69% 7.33% $15,235,000 $17,265,000 46.88% 53.12%$32,000,000 $267.45 10.87% 6.71% 6.80% 7.83% 7.94% 8.23% 5.78% 7.45% $15,081,000 $16,919,000 47.13% 52.87%$31,500,000 $263.27 11.10% 6.81% 6.91% 7.95% 8.06% 8.36% 5.87% 7.56% $14,925,000 $16,575,000 47.38% 52.62%

LEVERAGED

DiscountEstimated Est. Value Rate Leveraged Cash-on-Cash Returns Initial Initial Equity Components of Equity Percentage of EquityValue [1] PSF [2] (IRR) Year 1 Year 2 Year 3 3-Year Avg 5-Year Avg Loan Amount [4] (with Loan Fees) Cash Flow Residual % Cash Flow % Residual

$34,000,000 $284.17 15.62% 6.75% 10.55% 8.94% 8.75% 9.21% $20,400,000 $13,804,000 $6,734,000 $7,070,000 48.78% 51.22%$33,500,000 $279.99 16.01% 6.95% 10.80% 9.21% 8.99% 9.47% $20,100,000 $13,601,000 $6,707,000 $6,894,000 49.31% 50.69%$33,000,000 $275.81 16.41% 7.16% 11.07% 9.49% 9.24% 9.73% $19,800,000 $13,398,000 $6,679,000 $6,719,000 49.85% 50.15%$32,750,000 $273.72 16.61% 7.27% 11.20% 9.63% 9.37% 9.87% $19,650,000 $13,297,000 $6,665,000 $6,632,000 50.12% 49.88%$32,500,000 $271.63 16.81% 7.37% 11.34% 9.77% 9.49% 10.00% $19,500,000 $13,195,000 $6,649,000 $6,546,000 50.39% 49.61%$32,000,000 $267.45 17.22% 7.59% 11.62% 10.07% 9.76% 10.29% $19,200,000 $12,992,000 $6,618,000 $6,374,000 50.94% 49.06%$31,500,000 $263.27 17.63% 7.82% 11.91% 10.37% 10.03% 10.58% $18,900,000 $12,789,000 $6,586,000 $6,203,000 51.50% 48.50%

MULTI-HOLD PERIOD

Internal Rate of ReturnEstimated Est. Value Capitalization Rates Leveraged Cash-on-Cash Returns 3-Year Hold 5-Year Hold 7-Year HoldValue [1] PSF [2] Year 1 Year 2 5-Year Avg Year 1 Year 2 5-Year Avg All Cash Leveraged All Cash Leveraged All Cash Leveraged

$34,000,000 $284.17 6.40% 7.37% 7.47% 6.75% 10.55% 9.21% 10.50% 18.04% 10.11% 16.79% 10.04% 16.24%$33,500,000 $279.99 6.50% 7.48% 7.58% 6.95% 10.80% 9.47% 11.08% 19.31% 10.47% 17.54% 10.32% 16.77%$33,000,000 $275.81 6.60% 7.59% 7.70% 7.16% 11.07% 9.73% 11.67% 20.59% 10.85% 18.30% 10.60% 17.32%$32,750,000 $273.72 6.65% 7.65% 7.76% 7.27% 11.20% 9.87% 11.97% 21.24% 11.04% 18.68% 10.74% 17.59%$32,500,000 $271.63 6.70% 7.71% 7.82% 7.37% 11.34% 10.00% 12.27% 21.89% 11.23% 19.06% 10.89% 17.87%$32,000,000 $267.45 6.80% 7.83% 7.94% 7.59% 11.62% 10.29% 12.89% 23.20% 11.62% 19.84% 11.18% 18.43%$31,500,000 $263.27 6.91% 7.95% 8.06% 7.82% 11.91% 10.58% 13.51% 24.53% 12.01% 20.62% 11.48% 18.99%

Residual Cap Rate: 6.85% 6.85% 6.85%Residual Value ($ PSF): $322 $340 $362

[1] All Estimated Values reflect Real Estate Taxes reassessed at the target price of $32,750,000. Real Estate Taxes have not been reassessed at each Estimated Value on this schedule.[2] Based on 119,648 Square Feet.[3] Residual Value is calculated using a residual cap rate of 6.85% with a 2.00% cost of sale.[4] Market Debt based on 60% Loan-to-Value, 4.50% Interest Rate, with 24 Months of Interest Only then 30-Year Amortization, and a 1.00% Loan Fee.

2/8/2017 3:54 PM 1


16


17

rEnt roll lEasE tErM rEntal ratEs

suite tenant square Feet % of Property begin End begin Monthly PsF annually PsF recovery type Market assumption/Market rent


Rent Roll as of 5/1/2017

MarketSquare % of Lease Term Rental Rates Recovery Assumption /

Suite Tenant Name Feet Property Begin End Begin Monthly PSF Annually PSF Type Market Rent

5130 Yum Yum Donut Shops, Inc. 1,311 1.10% Apr-1979 Sep-2020 Current $3,278 $2.50 $39,330 $30.00 Market

5132 Geneva Jewelry and Watch 656 0.55% Jan-2015 Dec-2019 Current $1,774 $2.70 $21,286 $32.45 MarketJan-2018 $1,845 $2.81 $22,140 $33.75Jan-2019 $1,919 $2.93 $23,026 $35.10

Notes:Tenant has one (1) 5-year option to renew.

5140 Sprint PCS Assets LLC 2,240 1.87% Jun-1996 Jan-2020 Current $3,360 $1.50 $40,320 $18.00 Market

Notes:Tenant has a 5% cap on controllable expenses (Excl. Tax & Ins). Tenant also has a 5% cap on both Property and Earthquake Insurance (assumed not to hit, not modeled).

5160 Rent-A-Center 4,000 3.34% Apr-2002 Apr-2022 Current $6,400 $1.60 $76,800 $19.20 Market

Notes:Tenant has a 7% cap on CAM (Excl. Tax, Ins & Util).

516-200 VACANT (516-200) 628 0.52% Feb-2018 Jan-2023 Feb-2018 $809 $1.29 $9,712 $15.47 MarketFeb-2019 $834 $1.33 $10,004 $15.93

Notes:Former tenant is assumed to be economically vacant.

5168 DZ Laundry 1,865 1.56% Jun-2010 May-2020 Current $2,254 $1.21 $27,045 $14.50 Market

Notes:Tenant has three (3) 5-year options to renew.

516-201 VACANT (516-201) 220 0.18% Jan-2018 Dec-2022 Jan-2018 $284 $1.29 $3,402 $15.47 MarketJan-2019 $292 $1.33 $3,505 $15.93

516-202 VACANT (516-202) 334 0.28% Feb-2018 Jan-2023 Feb-2018 $430 $1.29 $5,165 $15.47 MarketFeb-2019 $443 $1.33 $5,321 $15.93

516-203 VACANT (516-203) 342 0.29% Mar-2018 Feb-2023 Mar-2018 $441 $1.29 $5,289 $15.47 MarketMar-2019 $454 $1.33 $5,448 $15.93

516-204 VACANT (516-204) 674 0.56% Apr-2018 Mar-2023 Apr-2018 $869 $1.29 $10,423 $15.47 MarketApr-2019 $895 $1.33 $10,737 $15.93

Gross $15.00 Gross

Gross $15.00 Gross

Gross $15.00 Gross

NNN (10% Admin+Mgmt) $21.00 NNN

Gross $15.00 Gross

NNN (10% Admin+Mgmt) (7%

Cap) $18.00 NNN

Gross $15.00 Gross


NNN (-No Mgmt) (5% Cap) $21.00 NNN

NNN (10% Admin-No Mgt/Excl) $30.00 NNN

2/8/2017 5:22 PM 12



18








5172 The United States Postal 3,757 3.14% Nov-2009 Oct-2019 Current $7,827 $2.08 $93,925 $25.00 Market


5174-76 VACANT (5174-76) 3,000 2.51% Jan-2018 Dec-2022 Jan-2018 $5,413 $1.80 $64,953 $21.65 MarketJan-2019 $5,575 $1.86 $66,900 $22.30

5180 Pho Vinam 1,500 1.25% Oct-2012 Oct-2017 Current $3,184 $2.12 $38,213 $25.48 Market


5182 LV Nails & Spa 1,200 1.00% Aug-2004 Aug-2021 Current $2,640 $2.20 $31,680 $26.40 MarketSep-2017 $2,719 $2.27 $32,628 $27.19Sep-2018 $2,801 $2.33 $33,612 $28.01Sep-2019 $2,885 $2.40 $34,620 $28.85Sep-2020 $2,971 $2.48 $35,652 $29.71

5184 Plaza Hair Styling 900 0.75% Nov-2013 Oct-2018 Current $1,770 $1.97 $21,243 $23.60 MarketNov-2017 $1,823 $2.03 $21,879 $24.31


5186 VACANT (5186) 1,500 1.25% Jan-2019 Dec-2023 Jan-2019 $2,920 $1.95 $35,044 $23.36 MarketJan-2020 $3,008 $2.01 $36,090 $24.06

5188 Alta Vista (Lease Pending) 10,250 8.57% Apr-2017 Mar-2023 Current $14,863 $1.45 $178,350 $17.40 OptionApr-2018 $15,307 $1.49 $183,680 $17.92Apr-2019 $15,768 $1.54 $189,215 $18.46Apr-2020 $16,238 $1.58 $194,853 $19.01Apr-2021 $16,725 $1.63 $200,695 $19.58Apr-2022 $17,229 $1.68 $206,743 $20.17

Notes:Tenant is assumed to be in place as of 4/17 for six (6) years. Two (2) 5-year options to renew each at the greater of (i) 3% increase over prior year's Guaranteed Minimum Monthly Rent, or (ii) FMV, with 3% annual increases thereafter. Tenant has a 15% Admin Fee on CAM (Excl. Tax/Ins).

NNN (+Mgmt) $22.00 NNN







2/8/2017 5:22 PM 13


19








5188 Alta Vista (Lease Pending) 10,250 8.57% Apr-2023 Mar-2033 FUTURE $17,747 $1.73 $212,959 $20.78 MarketOPTION Apr-2024 $18,279 $1.78 $219,350 $21.40

Apr-2025 $18,826 $1.84 $225,910 $22.04Apr-2026 $19,390 $1.89 $232,675 $22.70Apr-2027 $19,970 $1.95 $239,645 $23.38Apr-2028 $20,577 $2.01 $246,923 $24.09Apr-2029 $21,192 $2.07 $254,303 $24.81Apr-2030 $21,824 $2.13 $261,888 $25.55Apr-2031 $22,482 $2.19 $269,780 $26.32Apr-2032 $23,156 $2.26 $277,878 $27.11

Notes:Tenant is assumed to exercise its two (2) 5-year options to renew each at an assumed 3% increase over prior year's Guaranteed Minimum Monthly Rent with 3% annual increases thereafter. Tenant has a 15% Admin Fee on CAM (Excl. Tax/Ins).

5190 Crown Cleaners 1,175 0.98% Oct-2003 Jun-2018 Current $3,199 $2.72 $38,392 $32.67 Market

5192 Threading & Waxing Salon 1,200 1.00% Jun-2014 Jun-2019 Current $2,596 $2.16 $31,150 $25.96 MarketJul-2017 $2,700 $2.25 $32,400 $27.00Jul-2018 $2,808 $2.34 $33,696 $28.08


5194 Advance America 1,200 1.00% Apr-2005 Mar-2018 Current $2,801 $2.33 $33,609 $28.01 Market

5196 Bellas Pizza 1,200 1.00% Oct-2005 Apr-2018 Current $2,808 $2.34 $33,692 $28.08 MarketEXP 11/16

Notes:Lease actually expires 11/16. It is assumed tenant remains in place at current terms for 12 months following close of escrow, rolling to weighted-average market leasing assumptions thereafter.

5198 The UPS Store 1,500 1.25% Jul-2006 Jun-2021 Current $3,675 $2.45 $44,100 $29.40 MarketJul-2017 $3,823 $2.55 $45,870 $30.58Jul-2018 $3,975 $2.65 $47,700 $31.80Jul-2019 $4,134 $2.76 $49,605 $33.07Jul-2020 $4,299 $2.87 $51,585 $34.39

Notes:Tenant is Emeel and Samia Shenoda d.b.a. "The UPS Store." Tenant exercised one (1) 5-year option to renew at $3,675 /Mo with 4% annual rent increases effective 7/1/16, per 3rd Amendment.

5200-100 Starbucks Corporation 1,747 1.46% Apr-2008 Mar-2018 Current $7,253 $4.15 $87,041 $49.82 Option

Notes:Tenant has two (2) 5-year options to renew at at fixed rents: 1st at $8,124.10/Mo; 2nd at $9,098.41/Mo. Tenant has a 6% cap on controllable expenses (Excl. Tax & Ins).

NNN (10% Admin-No Mgmt) 6% Cap $52.00 NNN (Anchor)







2/8/2017 5:22 PM 14


20








5200-100 Starbucks Corporation 1,747 1.46% Apr-2018 Mar-2028 FUTURE $8,124 $4.65 $97,489 $55.80 MarketOPTION Apr-2023 $9,099 $5.21 $109,188 $62.50

Notes:Tenant is assumed to exercise its two (2) 5-year options to renew at fixed rents: 1st at $8,124.10/Mo; 2nd at $9,098.41/Mo. Tenant has a 6% cap on controllable expenses (Excl. Tax & Ins).

5200-120 Verizon Wireless Plus Premium 1,737 1.45% Mar-2016 Feb-2019 Current $4,920 $2.83 $59,041 $33.99 MarketMar-2018 $5,068 $2.92 $60,812 $35.01


5202 Smart & Final, LLC 28,200 23.57% Aug-2015 Jul-2025 Current $26,917 $0.95 $323,000 $11.45 OptionAug-2020 $29,704 $1.05 $356,448 $12.64

Notes:Sublessee has three (3) 5-year options to renew remaining: the 1st at $431,000/Yr.

5202 Smart & Final, LLC 28,200 23.57% Aug-2025 Jul-2030 FUTURE $35,917 $1.27 $431,000 $15.28 MarketOPTION

Notes:Sublessee is assumed to exercise one (1) 5-year option to renew at $431,000/Yr with two (2) additional options remaining.

5210 JacksonHewitt 1,500 1.25% May-2004 Apr-2024 Current $3,421 $2.28 $41,057 $27.37 MarketMay-2018 $3,524 $2.35 $42,285 $28.19May-2019 $3,630 $2.42 $43,560 $29.04May-2020 $3,739 $2.49 $44,865 $29.91May-2021 $3,851 $2.57 $46,215 $30.81May-2022 $3,966 $2.64 $47,595 $31.73May-2023 $4,085 $2.72 $49,020 $32.68

5214 Peking Express 1,235 1.03% Jan-2007 Dec-2017 Current $3,074 $2.49 $36,891 $29.87 Market

5216 The Water Store 1,184 0.99% Oct-2014 Sep-2019 Current $2,650 $2.24 $31,800 $26.86 Market


5218 VACANT (5218) 840 0.70% Oct-2017 Sep-2022 Oct-2017 $1,890 $2.25 $22,680 $27.00 MarketOct-2018 $1,947 $2.32 $23,360 $27.81




NNN (5% Adm-No Mgt/Bldg/Light) $15.00 NNN (Anchor)



NNN (5% Adm-No Mgt/Bldg/Light) $15.00 NNN (Anchor)

NNN (10% Admin-No Mgmt) 6% Cap $52.00 NNN (Anchor)

2/8/2017 5:22 PM 15


21








5220 Arnetts Smoke Shop 840 0.70% Jan-1995 Mar-2021 Current $1,572 $1.87 $18,870 $22.46 MarketApr-2018 $1,635 $1.95 $19,622 $23.36Apr-2019 $1,701 $2.03 $20,412 $24.30Apr-2020 $1,769 $2.11 $21,227 $25.27

5222A SalonCentric 2,311 1.93% Mar-2006 Aug-2021 Current $4,969 $2.15 $59,624 $25.80 MarketSep-2017 $5,117 $2.21 $61,403 $26.57Sep-2018 $5,271 $2.28 $63,252 $27.37Sep-2019 $5,429 $2.35 $65,147 $28.19Sep-2020 $5,593 $2.42 $67,111 $29.04

5222B VACANT (5222B) 339 0.28% Nov-2017 Oct-2022 Nov-2017 $509 $1.50 $6,102 $18.00 MarketNov-2018 $524 $1.55 $6,285 $18.54

5222C VACANT (5222C) 377 0.32% Jan-2018 Dec-2022 Jan-2018 $583 $1.55 $6,996 $18.56 MarketJan-2019 $600 $1.59 $7,204 $19.11

5222D VACANT (5222D) 370 0.31% Mar-2018 Feb-2023 Mar-2018 $572 $1.55 $6,866 $18.56 MarketMar-2019 $589 $1.59 $7,071 $19.11

5222E Pet Groomer 1,100 0.92% May-2007 Jul-2017 Current $2,123 $1.93 $25,479 $23.16 Market

5224 Dr. Joseph H. Trinh And Tanya 1,680 1.40% Nov-2007 Oct-2017 Current $4,538 $2.70 $54,457 $32.41 Market

5226 VACANT (5226) 1,470 1.23% Jan-2018 Dec-2022 Jan-2018 $3,031 $2.06 $36,374 $24.74 MarketJan-2019 $3,123 $2.12 $37,470 $25.49

5228 Sushi OK 4,026 3.36% Aug-2005 May-2021 Current $8,213 $2.04 $98,554 $24.48 Market

5232 VACANT (5232) 2,880 2.41% Feb-2018 Jan-2023 Feb-2018 $4,949 $1.72 $59,386 $20.62 MarketFeb-2019 $5,098 $1.77 $61,171 $21.24

5236 Subway 1,320 1.10% Apr-2006 Aug-2021 Current $3,404 $2.58 $40,849 $30.95 Market












2/8/2017 5:22 PM 16


22








5240 Just Auto Insurance 750 0.63% Oct-2013 Sep-2017 Current $1,580 $2.11 $18,959 $25.28 Market


5242 Compass Bank 2,500 2.09% Oct-1980 Feb-2018 Current $6,025 $2.41 $72,294 $28.92 Market

5250 Farfallas Cucina Italiana 3,620 3.03% Nov-2006 Jan-2022 Current $5,286 $1.46 $63,429 $17.52 MarketFeb-2018 $5,496 $1.52 $65,956 $18.22Feb-2019 $5,717 $1.58 $68,599 $18.95Feb-2020 $5,946 $1.64 $71,350 $19.71Feb-2021 $6,184 $1.71 $74,210 $20.50

5254-ATM JPMorgan Chase - ATM 900 0.75% Aug-2013 Jul-2018 Current $1,750 $1.94 $21,000 $23.33 Option

Notes:Lease actually ends 5/18 but tenant has two (2) 5-year options to renew at fixed rents: 1st at $1,960/Mo; 2nd at $2,195/Mo.

5254-ATM JPMorgan Chase - ATM 900 0.75% Aug-2018 Jul-2028 FUTURE $1,960 $2.18 $23,520 $26.13 MarketOPTION Aug-2023 $2,195 $2.44 $26,343 $29.27

Notes:Tenant is assumed to exercise its two (2) 5-year options to renew at fixed rents: 1st at $1,960/Mo; 2nd at $2,195/Mo. Tenant is assumed to retain the same reimbursement structure.

5258 Avenue #734 4,400 3.68% Aug-1992 Jan-2022 Current $6,857 $1.56 $82,284 $18.70 Option

Notes:Tenant has two (2) 5-year options to renew at fixed rents: 1st at $8,616.67/Mo; 2nd at $9,716.67/Mo.

5258 Avenue #734 4,400 3.68% Feb-2022 Jan-2032 FUTURE $8,617 $1.96 $103,400 $23.50 MarketOPTION Feb-2027 $9,717 $2.21 $116,600 $26.50

Notes:Tenant is assumed to exercise its two (2) 5-year options to renew at fixed rents: 1st at $8,616.67/Mo; 2nd at $9,716.67/Mo.

5262 VACANT (5262) 2,227 1.86% Dec-2017 Nov-2022 Dec-2017 $4,454 $2.00 $53,448 $24.00 MarketDec-2018 $4,588 $2.06 $55,051 $24.72

5266 VACANT (5266) 1,200 1.00% Aug-2018 Jul-2023 Aug-2018 $2,474 $2.06 $29,693 $24.74 MarketAug-2019 $2,549 $2.12 $30,588 $25.49




NNN (10% Admin+Mgmt) ATM

Excl. $0.00 Gross



NNN (10% Admin+Mgmt) ATM

Excl. $0.00 Gross



2/8/2017 5:22 PM 17


23








5274 Albertos Mexican Food 2,400 2.01% Sep-2015 Aug-2020 Current $4,080 $1.70 $48,960 $20.40 MarketSep-2017 $4,202 $1.75 $50,424 $21.01Sep-2018 $4,328 $1.80 $51,936 $21.64Sep-2019 $4,458 $1.86 $53,496 $22.29


5276 Honey Baked Hams 2,646 2.21% Dec-2003 Jun-2021 Current $6,268 $2.37 $75,220 $28.43 MarketSep-2017 $6,456 $2.44 $77,475 $29.28Sep-2018 $6,650 $2.51 $79,803 $30.16Sep-2019 $6,849 $2.59 $82,185 $31.06Sep-2020 $7,056 $2.67 $84,672 $32.00

5282 Beauty Salon 820 0.69% Sep-2005 Aug-2020 Current $2,132 $2.60 $25,584 $31.20 MarketSep-2017 $2,217 $2.70 $26,609 $32.45Sep-2018 $2,306 $2.81 $27,675 $33.75Sep-2019 $2,399 $2.93 $28,782 $35.10

5286 Waba Grill 2,521 2.11% Nov-2016 Oct-2026 Current $5,168 $2.05 $62,017 $24.60 OptionMay-2019 $5,479 $2.17 $65,748 $26.08Nov-2021 $5,807 $2.30 $69,680 $27.64May-2024 $6,155 $2.44 $73,865 $29.30

Notes:Tenant is assumed to be in place as of 11/16 for ten (10) years. Two (2) 5-year options to renew each at the greater of (i) 6% increase over prior year's Guaranteed Minimum Monthly Rent, or (ii) FMV, with 6% annual increases thereafter. Tenant has a 15% Admin Fee on CAM (Excl. Tax/Ins).

5286 Waba Grill 2,521 2.11% Nov-2026 Oct-2036 FUTURE $6,525 $2.59 $78,295 $31.06 MarketOPTION May-2029 $6,916 $2.74 $82,991 $32.92

Nov-2031 $7,332 $2.91 $87,983 $34.90May-2034 $7,771 $3.08 $93,252 $36.99

Notes:Tenant is assumed to exercise its two (2) 5-year options to renew each at 6% increase over prior year's Guaranteed Minimum Monthly Rent with 6% annual increases thereafter. Tenant has a 15% Admin Fee on CAM (Excl. Tax/Ins).






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5290 Del Taco, Inc. 1,856 1.55% Oct-1979 Sep-2024 Current $9,000 $4.85 $108,000 $58.19 OptionOct-2019 $10,124 $5.46 $121,494 $65.46

Notes:Tenant has two (2) 5-year options to renew at fixed rents: 1st at $11,390.00/Mo; 2nd at $12,814.00/Mo.

5290 Del Taco, Inc. 1,856 1.55% Oct-2024 Sep-2034 FUTURE $11,390 $6.14 $136,680 $73.64 MarketOPTION Oct-2029 $12,814 $6.90 $153,770 $82.85

Notes:Tenant is assumed to exercise its two (2) 5-year options to renew at fixed rents: 1st at $11,390.00/Mo; 2nd at $12,814.00/Mo.

TOTALS / AVERAGES 119,648 $183,629 $1.78 $2,203,543 $21.34

OCCUPIED SqFt 103,247 86.3%VACANT SqFt 16,401 13.7%

TOTAL SqFt 119,648 100.0%

WEIGHTED-AVERAGE LEASE TERM REMAINING: 5.00 YearsWEIGHTED-AVERAGE LEASE TERM LAPSED: 8.59 YearsWEIGHTED-AVERAGE LEASE TERM FROM INCEPTION: 13.59 Years

NNN (10% Adm-No Mgt/Blg/Paint) $60.00 NNN (Anchor)

NNN (10% Adm-No Mgt/Blg/Paint) $60.00 NNN (Anchor)

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tenAnt oVerView

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Headquartered in Los Angeles, where the Company began over 145 years ago, Smart & Final Stores, Inc. operates more than 300 grocery and foodservice stores under the “Smart & Final,” “Smart & Final Extra!” and “Cash & Carry Smart Foodservice” banners in California, Oregon, Washington, Arizona, Nevada, Idaho and Utah, with an additional 15 stores in Northern Mexico operated through a joint venture.

For years, Smart & Final banner stores were known as the “smaller, faster warehouse store,” primarily focused on providing customers with club-size items. Throughout its evolution, it has remained committed to adapting to the changing needs of the neighborhoods it serves, most notably through its 2008 introduction of Smart & Final Extra! stores. Uniquely positioned to offer time- and money-savings for both household and business customers, Smart & Final Extra! stores include expanded fresh and frozen products, organic and natural products, bulk foods, oven-roasted chicken and many other items sold in convenient sizes. In addition, all Smart & Final stores continue to offer 50% more club-size items than a traditional club store, with no membership fee required.

While Smart & Final stores target both households and businesses, Cash & Carry Smart Foodservice stores are primarily focused on serving foodservice professionals; operators of small restaurants, catering companies, businesses, and nonprofits. It also provides household customers with a high quality and value option for stocking-up their kitchens and preparing for holidays, parties and events.

Starbucks Corporation is an American coffee company and coffeehouse chain. Starbucks was founded in Seattle, Washington in 1971. As of November 2016 it operates 23,768 locations worldwide, including 13,107 (+170) in the United States, 2,204 (+86) in China, 1,418 (-12) in Canada, 1,160 (+2) in Japan and 872 in South Korea (bumping United Kingdom from 5th place) (Differences reflect growth since Jan 8, 2016).

Starbucks is considered the main representative of “second wave coffee”, initially distinguishing itself from other coffee-serving venues in the US by taste, quality, and customer experience, while popularizing darkly roasted coffee. Since the 2000s, third wave coffee makers have targeted quality-minded coffee drinkers with hand-made coffee based on lighter roasts, while Starbucks nowadays uses automated espresso machines for efficiency and safety reasons.

Starbucks locations serve hot and cold drinks, whole-bean coffee, microground instant coffee known as VIA, espresso, caffe latte, full- and loose-leaf teas including Teavana tea products, Evolution Fresh juices, Frappuccino beverages, La Boulange pastries, and snacks including items such as chips and crackers; some offerings (including their annual fall launch of the Pumpkin Spice Latte) are seasonal or specific to the locality of the store. Many stores sell pre-packaged food items, hot and cold sandwiches, and drinkware including mugs and tumblers; select “Starbucks Evenings” locations offer beer, wine, and appetizers. Starbucks-brand coffee, ice cream and bottled cold coffee drinks are also sold at grocery stores.

On December 1, 2016, Howard Schultz announced he would resign as CEO effective in April 2017 and will be replaced by Kevin Johnson.

Smart & Final Starbucks

Website: www.starbucks.com

NAsDAQ: sbUX

NUmber of locAtioNs: 21,536 (2015)

foUNDeD: 1971

Website: www.smartandfinal.com

HeADQUArters: commerce, cA

NUmber of locAtioNs: 300+

foUNDeD: 1871

TEnAnT OVERVIEW


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Subway is the world’s biggest sandwich chain. It overtook McDonald’s as America’s biggest fast-food restaurant by number of outlets in 2002, and achieved the same feat on a global scale in 2010. As a franchising machine it has few equals, voted the #1

franchise opportunity in the US an astonishing 17 times since 1985 because of its levels of franchisee support and development and the potential for growth. The advantage to customers is the flexibility of the menu, as well as its made-before-your-eyes freshness. The privately owned business now has 45,000 restaurants worldwide, all franchised, and continues to expand with astonishing speed, opening an average of 2,000 new outlets each year.

Yum Yum Donuts is one of the largest and most successful donut shop chains in the world and known for its trademark happy face. Yum Yum Donuts takes great pride in the proven loyalty of its customer base, in many cases welcoming a core group of customers into the store every single day of the week. What’s not to like? Mouth-watering donuts and tasty hot coffee. Yum

Yum Donuts has also diversified its menu with an assortment of bagel and breakfast sandwiches, macaroons, and chillas, refreshing frozen fruit and flavorful drinks topped with whipped cream.

Del Taco Restaurants Inc. (NASDAQ: TACO), first opened its doors in 1964 serving freshly prepared Mexican and American favorites. With high quality ingredients such as fresh sliced avocado, freshly grated cheddar cheese, hand-made salsa, slow cooked lard-free beans and carne asada freshly-grilled in house, Del Taco is committed to serving quality, fresh, and delicious food at a great

value. Today, Del Taco is the second largest quick-service restaurant concept in the Mexican category with nearly 550 restaurants in 16 states. In June of 2015, Del Taco was acquired by Levy Acquisition Corp. and began being traded on the NASDAQ with the ticker symbol of TACO.

BBVA Compass is a leading U.S. banking franchise with operations throughout the Sunbelt region and it ranks among the top 25 largest U.S. commercial banks based on deposit market share. BBVA Compass operates 688 branches in Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas. It ranks

among the largest banks in Alabama (2nd), Texas (4th) and Arizona (5th). In addition, BBVA Compass has been recognized as one of the nation’s leading Small Business Administration (SBA) lenders. Through three major business units – Commercial Banking, Retail Banking and Wealth Management – BBVA Compass offers customers unique and industry-leading products and services, with a focus on providing customers with financial solutions to fit their lives.

Subway Yum Yum Donuts

Del Taco BBVA Compass Bank

Website: www.subway.com

HeADQUArters: milford, ct

NUmber of locAtioNs: 45,000+

foUNDeD: 1965

Website: www.yumyumdonuts.com

HeADQUArters: city of industry, cA

NUmber of locAtioNs: 71

foUNDeD: 1971

Website: www.deltaco.com

HeADQUArters: lake forest, cA


foUNDeD: 1964

Website: www.bbvacompass.com

HeADQUArters: birmingham, Al

NUmber of locAtioNs: 8,761

foUNDeD: 1857


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TEnAnT OVERVIEW


WaBa Grill strives to serve the best possible grilled fusion menu items using only quality ingredients. Waba Grill uses fruits and vegetables to enhance the flavor of the amazing “WaBa” sauce. It serves boneless, skinless, fat-trimmed chicken, and other high quality meat. The salads are prepared shortly before serving,

the veggies are lightly steamed to perfection, and all meats are charbroiled. Nothing is fried and no oil is used in the cooking process. Consumers will enjoy the clean, low-fat, healthy entrees freshly prepared to order that appeal to your desire for tasty food, served at “on the go” speed.

Verizon Wireless is an American company, a wholly owned subsidiary of Verizon Communications that offers wireless telecommunications products and services. With 142.8 million subscribers as of July 2016, Verizon Wireless is the largest

wireless telecommunications provider in the United States. The company is headquartered in Basking Ridge, New Jersey. It was founded in 2000 as a joint venture of American telecommunications firm Bell Atlantic, which would soon become Verizon Communications, and British multinational telecommunications company Vodafone. Verizon Communications became sole owner in 2014 by buying Vodafone’s 45-percent stake in the company.

Jackson Hewitt operates more than 6,500 offices across the country and Puerto Rico, including year-round neighborhood storefronts and seasonal high-traffic kiosks in select Walmart and Sears stores. The proven business model captures millions of tax returns every year.

Alta Vista Public Charter School focuses on providing a SAFE educational environment, so that students may focus on their goal of obtaining a high school diploma. Students love the quiet, one-on-one attention they receive from their teacher mentors.

Waba Grill Verizon Wireless

Jackson Hewitt Alta Vista

Website: www.wabagrill.com

HeADQUArters: city of industry, cA


foUNDeD: 2006

Website: www.verizonwireless.com

HeADQUArters: basking ridge, NJ

NUmber of locAtioNs: 2,330

foUNDeD: 2000

Website: www.jacksonhewitt.com

HeADQUArters: Jersey city, NJ

NUmber of locAtioNs: 6,500+ Us & Puerto rico

foUNDeD: 1982

Website: www.altavistalearning.org

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the city of riverside is the population and employment center of riverside County, and contains a significant concentration of the region’s government, industrial, and financial service related employment. overall, the city of riverside is expected to retain its position as the major population center in riverside County for the foreseeable future, due in large part to the well-established transportation infrastructure, diversity of employment opportunities, and relatively affordable cost of housing in riverside as compared to similar sized cities in Los Angeles and/or orange Counties.

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AreA oVerView

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RIVERsIDE OVERVIEWthe city of riverside is located in the eastern portion of riverside County. the outlook is favorable for riverside-San Bernardino-ontario. its internal dynamism and close linkages to the improving Southern California economy create strong upside potential. Business and professional services hold promise as firms in coastal locations look to take advantage of riverside’s lower cost of doing of business, though construction, trade and logistics are where the metro area will excel during the next leg of the recovery. (conclusion: moody’s). the city of riverside (incorporated in 1883) is located in the northwestern portion of riverside County. riverside is the largest city between Los Angeles and Phoenix. Communities surrounding riverside include rubidoux and mira Loma to the northwest; Pedley and La Sierra to the west and southwest, Arlington and woodcrest to the south, and Highgrove, Canyon Crest Heights and unincorporated riverside County and moreno Valley to the east. the city is approximately 55 miles east of Los Angeles and 13 miles south of the city of San Bernardino.


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the city of riverside has above average regional freeway access. the riverside Freeway (State route 91) bisects the city in a northeast/southwest direction. this freeway extends between the South Bay area of Los Angeles County through the eastern portion of the city of riverside. in the northeast section of the city, the riverside Freeway intersects with the Pomona Freeway (State route 60). north of this freeway, the riverside Freeway becomes the escondido Freeway (interstate 215). this freeway continues north, intersecting with the San Bernardino Freeway (interstate 10), the primary east/west freeway in Southern California, before continuing north and intersecting with the devore Freeway (interstate 15) which is a northeast/southwest freeway ultimately reaching to Las Vegas. east of the riverside and Pomona Freeway intersection, the Pomona Freeway continues west as the moreno Valley Freeway (interstate 215/State route 60) and intersects with the San Bernardino Freeway near the city of Beaumont in central riverside County.

Primary passenger and airfreight service is accommodated by the ontario international Airport, located approximately 15 miles northwest of the city. within the city limits, the riverside municipal Airport is a private plane facility that is not served by any major airlines. there is also metrolink commuter rail service throughout the city. there is a proposed Perris Valley Line that extends the existing metroLink 91 service from the downtown riverside station for 24 miles along the existing San jacinto Branch Line terminating in Perris.

the riverside transit Agency provides local bus service within the city. intercity/regional bus service is provided by the rtA/omni inland empire Connection. greyhound also provides interregional and interstate bus service.

ACCEss


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fIVE-MILE RADIus THREE-MILE RADIus OnE-MILE RADIus

PO

Pu

LAT

IOn

2016 Population - Current year estimate 25,440 121,087 291,477

2021 Population - Five year Projection 26,766 126,572 304,846

2010 Population - Census 24,303 116,483 279,836

2000 Population - Census 21,732 106,070 250,233

2010-2016 Annual Population growth rate 0.73% 0.62% 0.65%

2016-2021 Annual Population growth rate 1.02% 0.89% 0.90%

HO

usE

HO

LDs

2016 Households - Current year estimate 8,175 37,041 84,414

2021 Households - Five year Projection 8,547 38,462 87,730

2010 Households - Census 7,887 35,995 81,751

2000 Households - Census 7,525 34,905 77,145

2010-2016 Annual Household growth rate 0.58% 0.46% 0.51%

2016-2021 Annual Household growth rate 0.89% 0.76% 0.77%

2016 Average Household Size 3.06 3.20 3.38

InC

OM

E

2016 Average Household income $60,399 $67,142 $73,353

2021 Average Household income $64,792 $72,463 $79,160

2016 median Household income $48,759 $51,212 $53,447

2021 median Household income $49,430 $52,688 $56,239

2016 Per Capita income $20,180 $21,096 $21,987

2021 Per Capita income $21,441 $22,536 $23,502

HO

usI

ng

2016 Housing units 8,785 39,631 90,971

2016 Vacant Housing units 610 2,590 6,557

2016 occupied Housing units 8,175 37,041 84,415

2016 owner occupied Housing units 3,763 19,769 47,396

2016 renter occupied Housing units 4,412 17,272 37,019

DEMOgRAPHICs


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ALEX KOZAKOV Senior Vice President

+1 213 613 3031Lic. 01416489

[email protected]

PATRICK WADESenior Vice President

+1 213 613 3071Lic. 01454690

[email protected]

ALAn KRuEgERSenior Vice President

+1 909 418 2062Lic. 00880814

[email protected]

© 2017 CBre, inc. All rights reserved. this information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. Any projections, opinions, or estimates are subject to uncertainty. the information may not represent the current or future performance of the property. you and your advisors should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is solely at your own risk.

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.PmStudio_january2017


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