del taco and shops at rio rancho towne center ii rancho valley dr pomona c… · del taco and shops...

Del Taco and Shops at Rio Rancho Towne Center II2071 Rancho Valley DRiVe, Pomona, califoRnia 91766

caPital maRkets | national Retail inVestment GRouP | offeRinG memoRanDum

Exclusively Marketed by

investment advisors

John Read + 1 949 725 8606Lic. 01359444 [email protected]

BRad RaBle + 1 949 725 8468Lic. 01940290 [email protected]

KiRK BRummeR + 1 949 725 8418Lic. [email protected]

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

James slusheR + 1 949 725 8507 Lic. 01857569 [email protected]

megan Wood + 1 949 725 8423Lic. 01516027 [email protected]

PhiliP d. VooRhees + 1 949 725 8521Lic. 01252096 [email protected]

nriG-West team

Todd GoodmanPreston FetrowKirk Brummer

Philip D. VoorheesJohn Read

Megan Wood

Brad RableJames Slusher

Matt Burson

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

investment summaryInvestment Highlights

1area overvieWCity Overview

County Overview

6property overvieW

Parcel MapSite Plan

14tenant profileLease Abstract

18financials

AssumptionsCash FlowRent Roll

22

aeRial

RanCHo vaLLEy dRivE

Rio RanCHo toWnE CEntER ii

Rio RanCHo toWnE CEntER

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City oWnEd Land

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FutuRE HotEL

Rio RanCHo Road

FutuRE REtaiL6,300 SF

StatE RoutE 71 (63,000 Cpd)

traffic counts (cPD Daily averages)

Interstate 10(at State Route 57)

245,000State Route 57(at Interstate10)

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

218,000

Del taco anD shoPs at Rio Rancho towne centeR ii

HiGH-Quality, neW construction retail strip center

• Del Taco and Shops at Rio Rancho II is an approximately 8,404 sF

newly-built, “best of class” quality retail strip center, 100% leased to

five (5) NNN tenants, including an end cap drive thru del Taco

• Located across Rancho Valley Drive from the newly constructed Rio

Rancho Towne Center, a 335,000 SF Target and Ross dress for less

anchored community center spread across 31.85 acres

• Internet resistant, category-leading restaurant and service tenants:

del Taco drive Thru, Jersey mike’s subs, T-mobile and Pomona

dentistry

• Rio Rancho Town Center is centrally located along state Route

71 (63,000 cars per day) to serve the communities of Pomona and

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

Chino

excellent income stability and GroWtH

• Leased to category-leading restaurant tenants del Taco and Jersey

mike’s subs and reoccurring service tenants Pomona Dentistry,

T-Mobile and Pamper Nail and Spa, creating a strong draw to the

property during all day parts

• 86% of the GLA is leased into 2025, limiting potential near term

expenses or lease roll over exposure

investment highlights

RanCHo vaLLEy dRivE

Rio RanCHo toWnE CEntER ii

Rio RanCHo toWnE CEntER

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S. WHitE avEnuE

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FutuRE HotEL

Rio RanCHo Road



investment summary

offerinG price $6,229,000

cap rate 5.40%

noi $336,387

total buildinG area 8,404 SF

total land area 0.98 Acres (42,689 SF)

occupancy 100%

property Website www.nrigwest.com/deltacoshopspomona

i n V e s t m e n t h i G h l i G h t s

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loW manaGement Hassle

• new construction, all restaurant and service strip center with nnn

leases provide for minimal management obligation

• Tenants pay 10-15% administration fee on the CAM charges, further

limiting expense slippage

• High-quality, newly-built retail center with no deferred maintenance,

limiting an investor’s near-term capital requirements

affluent los anGeles county stronG demoGrapHics

• Approximately 18,700, 150,800 and 342,500 people within a 1, 3 and

5-mile radius respectively

• Average Household Incomes are $80,000, $75,600 and $77,500 within

a 1, 3 and 5-mile radius respectively

pride of oWnersHip asset and ideal 1031 excHanGe replacement property

• delivered free and clear of debt permitting an investor to purchase

for cash or with new financing near historically low rates at desired LTV

and terms

• Five-tenant income stability, yet with limited management

obligations and NNN leases

• Pride of ownership, internet-resistant retail project – You cannot eat

tacos, sandwiches, paint your nails or get your teeth cleaned online!

• Efficiently sized tenant suites are conducive to high occupancy,

optimal rents and low tenant improvement costs, limiting landlord’s

capital expenses year to year

• Through embedded rental increases, the Net Operating Income is

projected to grow over $100,200 (30%) over the anticipated hold

period, providing an excellent hedge against inflation

point of destination la county retail location

• Centrally located across from a Target anchored center with

excellent accessibility featuring multiple points of access on Rio

Rancho Road and Rancho Valley Drive

• Rio Rancho Town Center is centrally located in Southern California

along state Route 71 serving the communities of Pomona, Phillips

Ranch and segments of Chino hills, diamond Bar and Chino

• state Route 71 (63,000 cars per day) adjacent location and brand

new construction make the property among the best acquisitions of

its kind in Southern California

• Signalized corner pad benefits from 16,300 cars per day (Pre-

Development Traffic Count) on Rio Rancho Road

investment highlights (continued)


capital markets/national retail investment group2



3

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

Angeles County and encompasses approximately 22 square

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

Pomona is bordered by the San Gabriel Valley and the Inland

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

Pomona ranks as the seventh largest city with just over

152,000 residents. Incorporated in 1888, Pomona is connected

to downtown Los Angeles and downtown Riverside by the

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

Pomona is serviced by Ontario Airport which is located just 12

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

Airport, Long Beach Airport and Los Angeles International

Airport (LAX).

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

County Fair, and the NHRA Auto Club Raceway at Pomona

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

Winternationals, Auto Club Finals and other races including

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

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

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

largest in California, attracting more than 1.4 million people

annually, but the facility is used year-round to host a variety of

educational, commercial, and entertainment shows such as

city overview

a R e a o V e R V i e w



trade and consumer shows, conventions, and sporting events.

These events include Barretts horse sales, the Grand National

Roadster Show, L.A. Roadster Show, the Pomona Swap Meet

& Classic Car Show 7 times per year and the year-round home

to the Wally Parks NHRA Museum.

pomona top employers

Rank employer # of employees

1 Fairplex Exposition Complex 3,000

2 Lanterman Developmental Center 1,800

3 Consolidated Precision Products 900

4 Pomona City Administrative Services Division 640

5 Western University-Health Sciences 578

6 Power Group 500

7 Royal Cabinets Inc. 500

8 Casa Colina Surgery Center 450

9 Merchants Building Maintenance 385

10 Los Angeles County Assistance 301

Source: CBRE Fast Report

la county fair


5

Pomona is home to a number of colleges and universities

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

and Western University of Health Sciences. Cal-Poly Pomona

is one of only two polytechnic universities in the 23 California

State University campuses system. The Western University

of Health Sciences main campus in Southern California is

among the most thriving enterprises in the Pomona and

San Gabriel Valleys. The Pomona campus helped transform

downtown Pomona into a thriving mix of retail, commercial,

and educational enterprises.

city overview (continued)

Source: Nielsen

Pomona California

2015 Estimated Population 152,047 38,822,536

2020 Projected Population 156,202 40,505,730

2010 Census Population 149,058 37,253,956

Growth 2010-2015 2.01% 4.21%

Growth 2015-2020 2.73% 4.34%

2015 Estimated Average Age 33.77 37.55

2015 Estimated Households 39,329 13,097,549

2020 Projected Households 40,481 13,678,939

2010 Census Households 38,492 12,577,498

Growth 2010-2015 2.17% 4.13%

Growth 2015-2020 2.93% 4.44%

2015 Est. Average Housing Value $346,230 $528,895

2015 Estimated Households 39,329 13,097,549

2015 Est. Average Household Income $62,554 $84,669

2020 Prj. Average Household Income $64,204 $88,525

pomona demoGrapHics

cal-Poly Pomona




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local map


7

Los Angeles County is the most populous county in the country

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

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

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

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

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

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

growing population, diverse economy and abundant, well-trained

workforce.

Los Angeles County is served by one of the largest freeway

networks in the country, providing direct access to the five

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

and Ventura. Los Angeles County’s extensive freeway network

facilitates the movement of people and freight throughout the

region, the state, and the nation.

Los Angeles International Airport (LAX) serves Los Angeles

County and is the sixth busiest passenger airport in the world and

third busiest in the US serving nearly 66.7 million passengers per

year. Along with its 692 daily flights, LAX ranks 14th in the world

and fifth in the US in air cargo processed. It is supplemented by

its proximity to Ontario International Airport in the City of Ontario

(San Bernardino County), Burbank Airport in Burbank (Los Angeles

County), John Wayne Airport in Santa Ana (Orange County), and

Long Beach Airport (Los Angeles County).

county overview

santa monica

la county fair

J. Paul Getty museum




Located on the southern coast of California, Los Angeles County

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

Catalina islands. The county is comprised of approximately 88

vibrant and diverse cities hosting more than 244,000 business

establishments—the greatest concentration in the state.

county overview (continued)

los anGeles county demoGrapHics

2015 Estimated Population 10,136,509

2020 Projected Population 10,510,281

2010 Census Population 9,818,605

2000 Census Population 9,519,329

Growth 2010-2015 3.24%

Growth 2015-2020 3.69%

2015 Estimated Median Age 36.00

2015 Estimated Average Age 37.39

2015 Estimated Households 3,348,931

2020 Projected Households 3,477,739

2010 Census Households 3,241,204

Growth 2010-2015 3.32%

Growth 2015-2020 3.85%

2015 Est. Median Housing Value $476,427

2015 Est. Average Housing Value $588,968

2015 Estimated Households 3,348,931

2015 Est. Average Household Income $78,309

Source: Nielsen

Perishing square


9

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

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

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

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

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

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

Los Angeles is recognized worldwide as a leader in entertainment,

health sciences, business services, aerospace, and international

trade. While Hollywood and the Southern California beach culture

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

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

hotels in the world.

Los Angeles County possesses a diverse economic base,

boasting a number of Fortune 500 companies headquartered

in the county, including the Walt Disney Company, Edison

International, Health Net, and Jacobs Engineering Group to name

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

the region’s economic position include increased local media

production by the entertainment industry, a continuing expansion

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

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

educated labor pool, numerous universities, appealing climate,

and world-class infrastructure will enable Greater Los Angeles to

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

county overview (continued) Key Jobs in los anGeles county

entertainment

162,850

education

91,730

business services

162,850

finance services

55,180

trade

163,600

Hospitality & tourism

63,750

fasHion

65,510

Downtown la

Port of los angeles

union station




interestinG facts about los anGeles county

• Los Angeles County has more than 330 performing arts

theaters and 221 museums.

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

the busiest in the world.

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

Angeles, Riverside, Ventura, Orange, and San Bernardino

counties has a population of over 18 million.

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

the fourth largest in the United States.

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

largest economy in the world.

• Los Angeles is regarded as the entrepreneurial capital of the

world with nearly twice as many small businesses than any

other similarly-sized region of the United States.

county overview (continued)

warner Brothers studiosuniversity city walk

Dolby theatre

magic mountain


11

Rodeo Drive

madame tussauds

Griffith observatory

california science center


caPital maRkets/national Retail inVestment GRouP12


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7

6

8 515

2

11

3

10

9

13

14

12

1

regional map

Company LoCation RanK

1 The Walt Disney Company Burbank 57

2 DirecTV El Segundo 95

3 Amgen Inc. Thousand Oaks 145

4 Health Net, Inc. Woodland Hills 216

5 Edison International Rosemead 226

6 Jacobs Engineering Group Inc. Pasadena 239

7 Farmers Insurance Exchange Woodland Hills 264

8 Reliance Steel & Aluminum Los Angeles 283

9 Molina Healthcare, Inc. Long Beach 301

10 CBRE, Inc. Los Angeles 321

11 AECOM Los Angeles 343

12 Live Nation Entertainment Beverly Hills 392

13 Avery Dennison Corporation Glendale 427

14 Mattel, Inc. El Segundo 439

15 A-Mark Precious Metals Santa Monica 444

fortune 500 companies in los anGeles county

Source: http://fortune.com/fortune500

EmpLoyER REvEnuE

The Walt Disney Co $50B

Ingram Micro Inc. $46B

DirecTV $33B

Qualcomm Inc. $26B

Amgen Inc. $20B

top employers in los anGeles county (by revenue)

Source: www.latimes.com

reGional map


13

location2071 Rancho Valley Drive

Pomona, California 91766

land areaThe subject site consists of 42,689

SF of land area (0.98 Acres).

buildinG areaThe subject site consists of 8,404 SF

of building area.

frontaGe & accessThe subject is immediately

accessible from State Route 71

with one (1) access point onto Rio

Rancho Road, three (3) on Rancho

Valley Drive.

adJacent properties

North: Rio Rancho Towne Center

II is bordered to the north

by Rio Rancho Towne

Center Phase I.

East: Rio Rancho Towne Center

II is bordered to the east by

the remaining portions of

Rio Rancho Towne Center

and Pomona AutoCenter

beyond that.

South: Rio Rancho Towne Center

II is bordered to the south

by SR-71.

West: Rio Rancho Towne Center

II is bordered to the west

by SR-71 and future retail/

hold developments.

builtThe subject was constructed in

2015.

freeWay traffic countsInterstate 10

(at State Route 57) ....................... 245,000

State Route 57

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

State Route 60

(at State Route 71) .........................218,000

parcelThe assessor parcel number is

8344-024-043.

ZoninGAccording to the city of Pomona the

subject site is currently zoned as

C-4 highway commercial.

Property overview (continued)

P R o P e R t y o V e R V i e w


JC

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parcel map


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RanCHo vaLLEy dRivE

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site plan

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del taco

Del Taco is an American chain of fast-food restaurants based

in Lake Forest, California. Del Taco is independently owned and

operated and specializes in Mexican-style food including tacos,

burritos, quesadillas, nachos, as well as American foods such as

burgers, fries and shakes. The company portfolio consists of 547

stores, of which 242 are franchise units. The chain operates in

17 states, with the majority of their restaurants in the West Coast

states, and Detroit region. Las Vegas, Nevada has the most Del

Tacos of any single city and California has the most Del Tacos of any

single state by far.

In 2006, a private Nashville, Tennessee based holding named

Sagittarius Brands, LLC, which is also the parent company of

Captain D’s Seafood, purchased Del Taco. Captain D’s was sold

in 2010 to Sun Capital Partners. Del Taco was founded in Yermo,

California in 1964 and currently has more than 540 locations.

Website: www.deltaco.com

Ownership: Private

Headquarters: Lake Forest, CA

Locations: 547

t e n a n t o V e R V i e w


del taco and shops at rio rancho towne center ii 19

Jersey miKe’s subs

Jersey Mike’s Subs is a fast casual submarine sandwich chain,

known for its authentic New Jersey style fresh sliced, fresh

grilled subs prepared with premium meats and cheeses that

are sliced on the spot, piled high on in-store baked bread. Since

its inception in 1956, Jersey Mike has grown to 1,500 restaurants

open and under development, nationwide. In 2015, for the

second year in a row, the company was named the #1 fastest

growing chain by the Nation’s Restaurant News Top 100, and

continues to win best sub award in virtually every market it

enters.

Since 2010, Jersey Mike’s locations throughout the country have

raised nearly $10 million for worthy local charities and have

distributed more than 1 million free sub sandwiches to help

numerous causes.

Website: www.jerseymikes.com

Ownership: Private

Headquarters: Manasquan, NJ

Locations: 1,500+


19

pomona dentistry

Pomona Dentistry is a subsidiary of Pacific Dental Services (PDS).

PDS is the country’s leading dental business support organization,

serving over 425 dental practices nationwide. It provides Supported

Autonomy that allows dentists to concentrate on Clinical Excellence

and the highest levels of cost-effective comprehensive patient care.

PDS started in 1994 and currently has supporting offices throughout

14 states with plans to expand into four more states and add an

additional 50 supporting offices every year.

Pomona Dentistry is the most technologically advanced office in the

area. It provides state-of–the-art equipment including intra-oral

cameras that allows you view your teeth on a flat screen monitor

immediately, CEREC CASD/CAM a less invasive and natural looking

crown, electronic dental records, and digital X-rays. Pomona

Dentistry is a family dentist that also offers services including,

crowns, fillings, veneers and teeth whitening.

Website: www.pomonadentistoffice.com

Ownership: Private

Headquarters: Irvine, CA

Locations: 425





21


assumptions

GLoBaL avaiLaBLE SpaCE LEaSinG SECond GEnERation LEaSinG

analysis Period occupancy and absorption Retention Ratio shops Restaurants

Commencement Date January 1, 2016 Projected Available at 1/1/16 0 SF 75% 75%

End Date December 31, 2025 Currently Available as of 10/1/15 0 SF Financial Terms

Term 10 Years Percentage Available at 10/1/15 0.00% 2016 Monthly Market Rent $3.25 - $3.50 PSF $3.35 - $4.30 PSF

Rent Adjustment 3.00% Annually 3.00% Annually

area measures Lease Term 5 Years 5 Years

Building Square Feet (SF) 8,404 SF EXpEnSES Expense Reimbursement Type NNN (No Mgt) Gross

+ 10% Ad

growth Rates operating expense source Estimates [4] Tenanting Costs

Consumer Price Index (CPI) 3.00% Rent Abatements [6]

Other Income Growth Rate 3.00% management Fee (% of egR) (nR) 3.00% New 3 Month(s) 3 Month(s)

Operating Expenses 3.00% Renewal 0 Month(s) 0 Month(s)

Real Estate Taxes 2.00% Real estate Taxes Reassessed Yes [5] Weighted Average 0.75 Month(s) 0.75 Month(s)

Market Rent Growth [1] Millage Rate 1.190787%

CY 2017 - 5.70% Special Assessments $10,000 Tenant Improvements ($/SF)

CY 2018 - 5.20% New $20.00 PSF $30.00 PSF

CY 2019 - 3.80% Renewal $4.00 PSF $6.00 PSF

CY 2020 - 3.00% Weighted Average $8.00 PSF $12.00 PSF

CY 2021 - 3.00%

CY 2022 - 3.00% Commissions [7]

CY 2023 - 3.00% New 6.00% 6.00%

CY 2024 - 3.00% Renewal 1.20% 1.20%

CY 2025 - 3.00% Weighted Average 2.40% 2.40%

CY 2026+ - 3.00%

Downtime

general Vacancy loss 5.00% [2] New 6 Month(s) 6 Month(s)

Weighted Average 2 Month(s) 2 Month(s)

Capital Reserves (CY 2016 Value) $0.20 PSF [3]

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

[1] Market Rent Growth is based upon CBRE Econometric Advisors’ Q2 2015 Retail Outlook for the Los Angeles Market, through CY 2020 with 3% 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 and assumed option terms: Del Taco.

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

[4] Operating Expenses are based on estimates.

[5] Real Estate Taxes have been reassessed at the estimated purchase price based on a millage rate of 1.190787% plus estimated special assessments of $10,000.

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

[7] Leasing Commissions are calculated by applying 100% of the rates shown above for lease years 1-5, and 50% of the above rates for lease years 6 and beyond.

For customized Debt Quotations, please contact:

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

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

maRKEt Loan

Loan Funding (as of Jan-16) $4,049,103

Loan-To-Price 65.00%

Funding Date Jan-16

Maturity Date Dec-25

Loan Term 10.0 Years

Amortization Period 30 Years

Initial Interest Only Period (If Any) 48 Months

Interest Rate 4.60%

Origination Fee on Initial Loan Funding 1.00%

f i n a n c i a l s


cash flowCalendar year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Physical Occupancy 100.00% 100.00% 100.00% 100.00% 97.75% 100.00% 100.00% 100.00% 100.00% 95.50% 100.00%Overall Economic Occupancy [1] 96.50% 96.49% 96.48% 96.47% 95.83% 96.47% 96.46% 96.45% 96.44% 94.97% 96.43%Total Operating Expenses PSF Per Year $17.46 $17.83 $18.21 $18.60 $19.03 $19.52 $19.94 $20.37 $20.81 $21.26 $21.39

ReVenues Cy 2016$/SF/mo [2]Scheduled Base Rent

Gross Potential Rent $3.62 $365,016 $367,910 $370,891 $373,960 $395,818 $416,074 $419,463 $422,954 $426,548 $450,928 $474,207 Absorption & Turnover Vacancy 0.00 0 0 0 0 (9,437) 0 0 0 0 (21,880) 0 Base Rent Abatements 0.00 0 0 0 0 (3,539) 0 0 0 0 (8,206) 0 Total Scheduled Base Rent 3.62 365,016 367,910 370,891 373,960 382,842 416,074 419,463 422,954 426,548 420,842 474,207 Expense Reimbursements 1.34 135,640 138,666 141,775 144,960 143,456 151,203 154,621 158,129 161,717 155,103 164,995 ToTal gRoss ReVenue 4.96 500,656 506,576 512,666 518,920 526,298 567,277 574,084 581,083 588,265 575,945 639,202 General Vacancy Loss (0.17) (17,501) (17,757) (18,021) (18,292) (9,365) (20,048) (20,344) (20,647) (20,959) 0 (22,826)eFFeCTiVe gRoss ReVenue 4.79 483,155 488,819 494,645 500,628 516,933 547,229 553,740 560,436 567,306 575,945 616,376

oPeRaTing eXPensesCAM (0.46) (46,881) (48,286) (49,735) (51,225) (52,764) (54,346) (55,978) (57,656) (59,387) (61,169) (63,003)Management Fee (NR) (0.14) (14,495) (14,665) (14,839) (15,019) (15,508) (16,417) (16,612) (16,813) (17,019) (17,278) (18,491)Insurance (0.01) (1,214) (1,250) (1,288) (1,326) (1,366) (1,407) (1,449) (1,493) (1,537) (1,583) (1,631)Real Estate Taxes (0.83) (84,178) (85,662) (87,175) (88,719) (90,293) (91,899) (93,537) (95,208) (96,912) (98,650) (96,650)ToTal oPeRaTing eXPenses (1.46) (146,768) (149,863) (153,037) (156,289) (159,931) (164,069) (167,576) (171,170) (174,855) (178,680) (179,775)neT oPeRaTing inCome 3.34 336,387 338,956 341,608 344,339 357,002 383,160 386,164 389,266 392,451 397,265 436,601

CaPiTal CosTsTenant Improvements 0.00 0 0 0 0 (10,211) 0 0 0 0 (23,674) 0 Leasing Commissions 0.00 0 0 0 0 (7,130) 0 0 0 0 (16,530) 0 Capital Reserves (0.02) (1,681) (1,681) (1,681) (1,681) (1,681) (1,681) (1,681) (1,681) (1,681) (1,681) (1,681)ToTal CaPiTal CosTs (0.02) (1,681) (1,681) (1,681) (1,681) (19,022) (1,681) (1,681) (1,681) (1,681) (41,885) (1,681)oPeRaTing Cash FloW $3.32 $334,706 $337,275 $339,927 $342,658 $337,980 $381,479 $384,483 $387,585 $390,770 $355,380 $434,920

aCQuisiTion & Residual salePurchase Price ($6,229,389) 0 0 0 0 0 0 0 0 0 0 all Cash

iRRNet Residual Value [3] 0 0 0 0 0 0 0 0 0 0 6,949,233 Cash FloW BeFoRe deBT ($6,229,000) $334,706 $337,275 $339,927 $342,658 $337,980 $381,479 $384,483 $387,585 $390,770 $7,304,613 6.57%

maRKeT loan [4]

Loan Funding / Payoff 4,049,103 0 0 0 0 0 0 0 0 0 (3,615,905)loan Fees (40,491) 0 0 0 0 0 0 0 0 0 0 leveraged

iRRannual debt service 0 (186,259) (186,259) (186,259) (186,259) (249,090) (249,090) (249,090) (249,090) (249,090) (249,090)Cash FloW aFTeR deBT ($2,220,388) $148,447 $151,016 $153,668 $156,399 $88,890 $132,389 $135,393 $138,495 $141,680 $3,439,618 9.43%

noi Return 5.40% 5.44% 5.48% 5.53% 5.73% 6.15% 6.20% 6.25% 6.30% 6.38%unleVeRaged Cash Return 5.37% 5.41% 5.46% 5.50% 5.43% 6.12% 6.17% 6.22% 6.27% 5.71%leVeRaged Cash Return [5] 6.76% 6.88% 7.00% 7.12% 4.86% 6.04% 6.17% 6.31% 6.46% 6.67%Rolling - all Cash iRR N/M N/M 1.47% 3.35% 5.05% 5.34% 5.55% 5.70% 5.86% 6.57%Rolling - leveraged iRR N/M N/M N/M 0.28% 5.48% 6.35% 6.95% 7.37% 7.77% 9.43%

[1] This figure takes into account vacancy/credit loss, absorption vacancy, turnover vacancy, and base rent abatements.[2] Based on 8,404 square feet.[3] Net Residual Value is calculated by dividing Year 11 NOI by the Residual Cap Rate of 6.00% and applying a 4.50% Cost of Sale.[4] Market Debt based on 65% Loan-to-Value, 4.60% Interest Rate, 30-Year Amortization, 48 Months Interest Only and 1.00% Loan Fee.[5] Leveraged Cash Return is based on NOI less debt service divided by equity including costs to stabilize.

f i n a n c i a l s


Rent Roll

Square Feet

% ofproperty

Lease term Rental Rates Recoverytype

market assumption /market RentSuite tenant name Begin End Begin monthly pSF annually pSF

2071-100 Del Taco 2,230 26.53% Jul-2015 Jul-2035 Current $9,567 $4.29 $114,800 $51.48 NNN (No Mgmt) + 10% Market

Jul-2020 $10,524 $4.72 $126,285 $56.63 Admin $4.30 NNN (Restaurant)

Jul-2025 $11,576 $5.19 $138,907 $62.29

Jul-2030 $12,733 $5.71 $152,800 $68.52

Jul-2035 $14,006 $6.28 $168,075 $75.37

Four (4) five (5) options to renew at continuation of CPI increases every 5 years with maximum of 10% or CPI increase over previous 5 year period. Assumed 10% maximum for lease years 6, 11 and 16 increases.

2071-110 Jersey Mike’s 1,197 14.24% Jun-2015 May-2025 Current $4,010 $3.35 $48,119 $40.20 NNN (No Mgmt) + 10% Option

Subs Jun-2020 $4,611 $3.85 $55,337 $46.23 Admin $3.35 NNN (Restaurant)

Two (2) five (5) year options, first option at 15% increase over previous rent and 2nd option at FMV (first option modeled below).

Jun-2025 May-2030 FUTURE $5,303 $4.43 $63,638 $53.16 NNN (No Mgmt) + 10% Market

OPTION Admin $3.35 NNN (Restaurant)

Assumed tenant exercises first five (5) year option with no leasing costs. One (1) five (5) year option remaining at FMV.

2071-120 Pamper Nail 1,134 13.49% Oct-2015 Sep-2025 Current $3,969 $3.50 $47,628 $42.00 NNN (No Mgmt) + 15% Market

and Spa Oct-2016 $4,088 $3.61 $49,057 $43.26 Admin $3.50 NNN (Shops)

Oct-2017 $4,211 $3.71 $50,531 $44.56

Oct-2018 $4,337 $3.82 $52,039 $45.89

Oct-2019 $4,467 $3.94 $53,604 $47.27

Oct-2020 $4,601 $4.06 $55,214 $48.69

Oct-2021 $4,739 $4.18 $56,870 $50.15

Oct-2022 $4,881 $4.30 $58,571 $51.65

Oct-2023 $5,027 $4.43 $60,329 $53.20

Oct-2024 $5,179 $4.57 $62,143 $54.80

One (1) five (5) year option to renew at FMV.

f i n a n c i a l s


Rent Roll

Square Feet

% ofproperty

Lease term Rental Rates Recoverytype

market assumption /market RentSuite tenant name Begin End Begin monthly pSF annually pSF

2071-130 T-Mobile 1,134 13.49% Jun-2015 May-2020 Current $3,969 $3.50 $47,628 $42.00 NNN (No Mgmt) + 15% Market

Jun-2016 $4,088 $3.61 $49,057 $43.26 Admin $3.50 NNN (Shops)

Jun-2017 $4,211 $3.71 $50,531 $44.56

Jun-2018 $4,337 $3.82 $52,039 $45.89

Jun-2019 $4,467 $3.94 $53,604 $47.27

One (1) five (5) year option at FMV.

2071-140 Pomona 2,709 32.23% Jul-2015 Jun-2025 Current $8,804 $3.25 $105,651 $39.00 NNN (No Mgmt) + 10% Option

Dentistry Jul-2020 $10,125 $3.74 $121,499 $44.85 Admin $3.25 NNN (Shops)

Assumed commencement date with seller guaranteeing any outstanding leasing costs. Two (2) five (5) year options, first option at 15% increase over previous rent and 2nd option at FMV (first option modeled below).

Jul-2025 Jun-2030 FUTURE $11,644 $4.30 $139,723 $51.58 NNN (No Mgmt) + 10% Market

OPTION Admin $3.25 NNN (Shops)

Assumed tenant exercises first five (5) year option with no leasing costs. One (1) five (5) year option remaining at FMV.

ToTals / aVeRages 8,404 $30,319 $3.61 $363,827 $43.29

oCCuPied sF 8,404 100.0%

aVailaBle sF 0 0.0%

ToTal sF 8,404 100.0%

f i n a n c i a l s


AFFILIATED BUSINESS DISCLOSURE

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

CONFIDENTIALITY AGREEMENT

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

This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the property or the owner of all Property (the”Owner”), to be all-inclusive or to contain all or part of the information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors being the control of the Owner and CBRE,Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner. Neither the Owner or CBRE, Inc., nor any of their respectful directors, officers, Affiliates or representatives make an representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property.

The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived.

By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc.

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

DISCLAIMER

© 2015 CBRE, Inc. The information containing in this document has been obtained for sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property, The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

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

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

D i s c l a i m e R

© 2015 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

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

Exclusively Marketed by

investment advisors

John Read + 1 949 725 8606Lic. 01359444 [email protected]

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

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