hi desert plaza - loopnet · 1 renaissance center 100,940 1990/2005 100% $18 - $24 1 miles 16120...

Donald MacLellanSenior Managing [email protected](949) 221-1821R.E. License No 0897784

The information contained herein has been carefully compiled from sources we consider reliable, and while not guaranteed as to completeness or accuracy, we believe it to be correct as of this date. The proforma revenues and expenses set forth in this brochure do not constitute a representation, warranty, or guaranty of any of the numbers set forth herein or of any economic value attributable to the property or income that may be derived therefrom. Independent estimates of proforma revenues and expenses should be developed before any decision is made on whether to invest in the property.

18301 Von Karman Avenue, Suite 800Irvine, CA 92612Phone: (949) 221–1800Fax: (949) 221–1830www.farislee.com

HI DESERT PLAZA12180-12192 HESPERIA ROAD,VICTORVILLE, CA 92395

EXCLUSIVE BROKERS:

Joseph [email protected](949) 221-1813R.E. License No 01915138

STATEMENT OF CONFIDENTIALITY & DISCLAIMERFaris Lee Investments (“FLI”) has been engaged as the exclusive financial advisor to the Seller in connection with Seller’s solicitation of offers for the purchase of the property known as Hi Desert Plaza, City of Victorville, County of San Bernardino, State of California. Prospective purchasers are advised that as part of the solicitation process, Seller will be evaluating a number of factors including the current financial qualifications of the prospective purchaser. Seller expressly reserves the right in its sole and absolute discretion to evaluate the terms and conditions of any offer and to reject any offer without providing a reason therefore. Further, Seller reserves the right to terminate the solicitation process at any time prior to final execution of the Purchase Agreement.

The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property, and it is not to be used for any other purpose or made available to any other person without the express written consent of Seller or FLI. The material is based in part upon information supplied by the Seller and in part upon financial information obtained by FLI from sources it deems reasonably reliable. Summaries of any documents are not intended to be comprehensive or all-inclusive, but rather only outline some of the provisions contained therein and qualified in their entirety by the actual document to which they relate.

No representation or warranty, expressed or implied, is made by the Seller, FLI, or any of their respective affiliates as to the accuracy or completeness of the information contained herein. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence, including engineering and environmental inspections, to determine the condition of the Property and the existence of any potentially hazardous material located at the Property site or used in the construction or maintenance of the building at the Property site.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or FLI or any of their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

Prospective purchasers are not to construe the contents of this Offering Memorandum or any prior or subsequent communication from FLI or Seller or their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents as legal, tax, or other advice. Prior to submitting an offer, prospective purchasers should consult with their own legal counsel and personal and tax advisors to determine the consequences of an investment in the Property and arrive at an independent evaluation of such investment.

PRICING ANALYSIS || 15+

AREA OVERVIEW || 23+

PROPERTY OVERVIEW || 1+

TABLE OF CONTENTS

PROPERTY OVERVIEW

INVESTMENT SUMMARY

Faris Lee Investments is pleased to offer for sale Hi Desert Plaza (“Property”), a highly successful neighborhood center featuring Off-Price Anchors located at the strongest intersection in Victorville. The center is located at the signalized hard corner intersection of the 2 major thoroughfares in the trade area – Bear Valley Road – east / west corridor and Hesperia Road – north / south corridor. Traffic counts are over 86,000 vehicles per day. The center has been historically well leased and is currently 99% occupied with several of the tenants having been long term occupants. The tenant line up includes Dollar Tree, Goodwill, Aaron’s Rental, Leslie’s Poolmart as well as dd’s Discount (NAP), Jack in the Box (NAP) and Bank of America (NAP). In addition , there are several high trafficked retailers in the intersection including Vons Pavilions, Ross, Walgreens, CVS, In N Out Burger and Starbucks.

Additionally, the property benefits from over 174,800 permanent residents having an average household income in excess of $56,000 and the approximately 51,400 total day-time employees within a 5-mile radius of the center.

PRICING

Pricing: ................................$18,704,000

Year 1 NOI: ...........................$1,215,788

Cap Rate: ..................................... 6.50%

Cash-on-Cash ............................. 8.20%

PROPERTY SPECIFICATIONS

Rentable Area: .................................................................................. 102,947 SF

Land Area: ......................................................................................... 10.94 Acres

Property Address: ..............12180-12192 Hesperia Road,Victorville, CA 92395

Year Built/Renovated: .............................................................1983-1987, 2012

Parcel Number: ......... 3091-251-040000, 3091-251-060000, 3091-251-150000

Ownership: ......................................................... Fee Simple (Land & Building)

CURRENT LOAN INFORMATION:

Loan Amount: .................................................................................. $10,950,000

Down Payment: ................................................................................. $7,754,000

Interest Rate: .............................................................................................4.50%

I/O Payment (Years 1-2): ..................................................................... $492,756

Amrtz. Payment (Years 3-10): ............................................................. $665,784

Maturity Date:................................................................................ January 2025

[ 2 ] PROPERTy OVERVIEWHI DESERT PLAZA - VICTORVILLE, CA

INVESTMENT SUMMARY

EXCELLENT LOCATION / BUSIEST INTERSECTION IN VICTOR VALLEY » The property is located at the signalized, hard corner

intersection of Hesperia Road and Bear Valley Road, which is the busiest intersection in the Victor Valley metropolitan area with traffic counts over 86,000 vehicles per day

» Bear Valley Road is a major retail corridor running directly through the entire High Desert area connecting the cities of Victorville and Apple Valley, providing access to Interstate 15. In addition, it is also the main route from Los Angeles to Big Bear City

» Hesperia Road connects the city of Hesperia and Victorville and is the main road between the two cities

BELOW MARKET RENTS – SHOPS AND ANCHOR SPACE » The current shop and anchor rents are below comparable

centers in similarly strong locations » Over time, an investor can enjoy steadily increasing rents

either through existing rental increases as well as leases expiring and rolling closer to market rents

STRONG NATIONAL/REGIONAL TENANT LINEUP WITH HISTORICAL LOW VACANCY AND LONG-TERM OCCUPANCY » The tenant lineup includes national/regional tenants such

as Dollar Tree (S&P Rated “BB”), Goodwill and Aaron’s Rental, to name a few

» Additional tenants within the center include: Leslie’s Poolmart, Urgent Care Center, dd’s Discounts (NAP), Jack in the Box (NAP) and Bank of America (NAP)

» Historically the center has enjoyed low vacancy over the years

» Additionally , several of the current retailers ( over 50% of the rental stream) have been long-time occupants (10 years +) of the center providing stability and security for the investor

FAVORABLE EXISTING LONG TERM LOW RATE ASSUMABLE LOAN & CORRESPONDING STRONG CASH RETURNS » Hi Desert Plaza is currently encumbered by a very favorable

low rate, long-term debt structure

» The existing loan carries a fixed 4.5% interest rate with interest only through early January 2017 followed by a 30 year amortization schedule due in early January 2025

» Strong cash/cash returns - based on the asking cap rate and low interest rate debt, an investor will realize a cash on cash return of 8.2%

LOW PRICE PER SQUARE FOOT/ WELL-BELOW REPLACEMENT COST » Ability to acquire a neighborhood center featuring off-price

anchors for $182 PSF, which is well-below replacement costs

» Low basis provides an investor a competitive advantage in the marketplace with the ability to attract tenants at competitive lease rates

[ 2 ] [ 3 ]PROPERTy OVERVIEW PROPERTy OVERVIEWHI DESERT PLAZA - VICTORVILLE, CA

INVESTMENT HIGHLIGHTS


AERIAL VIEW

NORTH


LOCATION MAP

NORTH


AERIAL - WESTERLY VIEW

NORTH

NAP

NAP


PHOTOS


AERIAL - EASTERLY VIEW

NORTH


AERIAL - EASTERLY VIEW PHOTOS

AERIAL VIEW


AERIAL - NORTHERLY VIEW

NORTH

LOCATION

The subject property is located at the signalized hard corner intersection of Hesperia Road (33,800 vehicles per day) and Bear Valley Road (52,200 vehicles per day) providing excellent street frontage and visibility. Located within one of Victorville’s busiest intersections the trade area draws national tenants such as Walgreens, CVS Pharmacy, Ross Stores, Petco and many more; increasing tenant synergy and intrinsic value. Hi Desert Plaza is also located adjacent to major employer - Desert Valley Hospital. Additionally, the subject property benefits from above 174,800 customers having $56,867 as an average household income and approximately 51,400 total day-time employees within 5-mile radius.

PARCELSPARCEL ACRES SQUARE FEET

3091-251-040000 2.34 101,9303091-251-060000 0.58 25,4133091-251-150000 7.52 327,5713091-251-070000 0.50 21,651

TOTAL: 10.94 476,565

ACCESS

There are a total of seven (7) points of access for the shopping center with four (4) points of access along Hesperia Road and three (3) along Bear Valley Road.

TRAFFIC COUNTS (COSTAR)

Vehicles Per Day

Hesperia Road: 33,800Bear Valley Road: 52,200

IMPROVEMENTS

There is approximately 102,947 SF of existing building area.

PARKING

There are approximately 480 dedicated parking stalls on the owned parcel. The parking ratio is approximately 4.6 parking stalls per 1,000 SF of leasable area.

YEAR BUILT/RENOVATED

1983-1987, 2012

ZONING

C-2T

PARCEL MAP

NORTH


PROPERTY OVERVIEW


COMPARATIVE CENTER MAP

1 Renaissance Center 100,940 1990/2005 100% $18 - $24 1 Miles16120 & 16200-16266 Bear Valley Road

Victorville, CA 92395 Anchors:

2 Apple Valley Towne Center 52,476 2005 100% $21 - $24 3 Miles12109 & 12189 Apple Valley Road

Apple Valley, CA 92308 Anchors:

3 Jess Ranch Marketplace 502,255 2006 98% $18 - $27 2.5 Miles18935, 19059, 19023, 19157, 19179, 19095, 19201, 19201-A, 19201-C, 19201-I, 18825-18935, 18811, 18975, 18805, 18821, 19011, 19131 & 19083 Bear

Valley RoadApple Valley, CA 92308 Anchors:

4 Mojave River Crossings 131,960 1991 96% $24 - $28 3 Miles19200, 12218, 12218 - Bldg 1, 12218 - Bldg 2, 12218

- Bldg 3 Bear Valley RoadApple Valley, CA 92308 Anchors:

5 Victor Valley Town Center 200,114 1987 95% $18 - $24 200 Yards12199, 12209, 12229 & 17100-17222 Hesperia Road

Victorville, CA 92395 Anchors:

Averages: 197,549 1997 98% $20 - $25

Subject Property: 102,947 1983-1987, 2012 99% $15

Bed Bath & Beyond, 24 Hour Fitness, Best Buy, WinCo, ULTA and Burlington Coat Factory

Lowe's, Walgreens, and Stater Brothers

Home Depot

Vons, Ross, PetCo

Food For Less, 24 Hour Fitness & Rite Aid

Building Size (SF)Property Location Year Built /Renovated

Approximate Occupancy %

Shop Space Rent PSF/Year

Proximity to Subject Property


COMPARATIVE CENTER DETAIL

SITE PLAN NOT TO SCALE

STE TENANT SF12130A U.S. Army Recruiting Center 1,321

12130B TKO Vapor 1,321

12142 Toto's Mexican Rest. 2,000

12160A Dollar Tree 18,000

12160B $1 $2 $3 Everything 8,328

12174 Louisiana Seafood Restaurant 6,000

12180A Aaron's Rental 7,400

16952

16932

16936

16938

16956

169581696016962

12142

12130A

16970

1694

0B

1694

0A

12130B

12160A 12160B12230

12240B/C

12240A

12174

12180B

12180A

1218

612

188

1219

012

192

Hesperia Road

Jasm

ine

Stre

et

Bea

r Val

ley

Roa

d

NAP

Pylon Sign

Pylon Sign

Pylon Sign

12180B Cornerstone Dance Studio 7,000

12186 Urgent CARE 3,000

12188 Hana Bedding Co 2,000

12190 Los Pollos Bros 2,000

12192 Pleasant Beauty 2,000

12230 Community Bingo 8,640

12240A Valley Star Community and Family Services 3,400

1224B/C Plaza Dentistry 1,649

STE TENANT SF STE TENANT SF16932 Goodwill Industries 2,700

16936 Metro PCS 1,500

16938 Goodwill Industries 1,800

16940A Available 1,300

16940B Leslie's Poolmart 4,588

16952 Fruit Ave. 1,200

16956 State Farm Insurance 1,450

16958 Fiesta Insurance 700

16960 Smoke Shop 1,000

16962 Mariana's Salon 650



SITE PLAN

NORTH

STE TENANT SF12130A U.S. Army Recruiting Center 1,321

12130B TKO Vapor 1,321

12142 Toto's Mexican Rest. 2,000

12160A Dollar Tree 18,000

12160B $1 $2 $3 Everything 8,328

12174 Louisiana Seafood Restaurant 6,000

12180A Aaron's Rental 7,400

16952

16932

16936

16938

16956

169581696016962

12142

12130A

16970

1694

0B

1694

0A

12130B

12160A 12160B12230

12240B/C

12240A

12174

12180B

12180A

1218

612

188

1219

012

192

Hesperia Road

Jasm

ine

Stre

et

Bea

r Val

ley

Roa

d

NAP

Pylon Sign

Pylon Sign

Pylon Sign

12180B Cornerstone Dance Studio 7,000

12186 Urgent CARE 3,000

12188 Hana Bedding Co 2,000

12190 Los Pollos Bros 2,000

12192 Pleasant Beauty 2,000

12230 Community Bingo 8,640

12240A Valley Star Community and Family Services 3,400

1224B/C Plaza Dentistry 1,649

STE TENANT SF STE TENANT SF16932 Goodwill Industries 2,700

16936 Metro PCS 1,500


16940A Available 1,300

16940B Leslie's Poolmart 4,588

16952 Fruit Ave. 1,200

16956 State Farm Insurance 1,450

16958 Fiesta Insurance 700

16960 Smoke Shop 1,000

16962 Mariana's Salon 650


[ 14 ] PROPERTy OVERVIEW

PRICING ANALYSIS

1213012130A U. S. Army

Recruiting Center1,321 1% $3,116 $2.36 $37,392 $28.31 3% - - - - - - Gross 12/1/1993 2/28/2019 $1.75 None

12130B TKO Vapor 1,321 1% $2,041 $1.55 $24,492 $18.54 2% Dec-16 3% $2,102 $1.59 $25,224 $19.09 NNN 12/1/2014 11/30/2017 $1.75

1697016970 Goodwill Industries 12,000 12% $15,000 $1.25 $180,000 $15.00 14% Oct-17 10% $16,500 $1.38 $198,000 $16.50 NNN 10/22/2012 10/31/2022 $1.25 2 (5-year)

10% Incr each option

1694016940A 1,300 1% $1,950 $1.50 $23,400 $18.00 2% - - - - - - NNN - - $1.50 None

16940B Leslie's Poolmart 4,588 4% $5,712 $1.25 $68,545 $14.94 5% - - - - - - NNN 12/15/1999 10/31/2019 $1.25 1 (5-year)Mo 1-30: $6,331.44Mo 31-60: $6,709.95

16932 - 1693816932 Goodwill Industries 2,700 3% $3,159 $1.17 $37,908 $14.04 3% Jan-21 28% $4,050 $1.50 $48,600 $18.00 NNN 9/25/2013 10/31/2022 $1.25 2 (5-year)

Opt 1: $1.56/psf moOpt 2: $1.72/psf mo

16936 Metro PCS 1,500 1% $1,800 $1.20 $21,600 $14.40 2% Jul-16 3% $1,854 $1.24 $22,248 $14.83 NNN 8/15/2015 8/13/2020 $1.25 1 (5-year)Jul-18 3% $1,910 $1.27 $22,915 $15.28 FMR + 3% ann incrJul-19 3% $1,967 $1.31 $23,603 $15.74Jul-20 3% $2,026 $1.35 $24,311 $16.21

16938 Goodwill Industries 1,800 2% $2,106 $1.17 $25,272 $14.04 2% Jan-21 28% $2,700 $1.50 $32,400 $18.00 NNN 9/25/2013 10/31/2022 $1.25 2 (5-year)

1 (5-year)3% Annual Incr

% of Total (SF)

Vacant

Current Monthly

Rent

MonthlyRent$/SF

% of Total (Rent)

CAM Recovery

Type

LeaseStart

LeaseExpires

Market Rent Lease Options

CurrentAnnualRent

AnnualRent$/SF

Rental IncreasesMonthly

$/SFAnnualRent

IncreaseDate Increase Monthly

RentAnnual

$/SFSuite # Tenant Size

(SF)

Opt 1: $1.56/psf moOpt 2: $1.72/psf mo

16952 - 1214216952 1,200 1% $1,483 $1.24 $17,796 $14.83 1% Feb-17 3% $1,528 $1.27 $18,336 $15.28 NNN 2/1/2014 1/31/2019 $1.50 1 (5-year)

Feb-18 3% $1,574 $1.31 $18,888 $15.74 3% annual incr

16956 1,450 1% $1,698 $1.17 $20,376 $14.05 2% Aug-16 12% $1,908 $1.32 $22,896 $15.79 NNN 7/25/2000 7/24/2020 $1.50 1 (5-year)Aug-17 2% $1,943 $1.34 $23,316 $16.08 Yr 1: $1,873/moAug-18 2% $1,978 $1.36 $23,736 $16.37 Yr 2: $1,908/moAug-19 2% $2,013 $1.39 $24,156 $16.66 Yr 3: $1,943/mo

Yr 4: $1,978/moYr 5: $2,013/mo

16958 700 1% $1,009 $1.44 $12,108 $17.30 1% Feb-17 3% $1,040 $1.49 $12,480 $17.83 NNN 2/1/2015 1/31/2020 $1.50 1 (5-year)Feb-18 3% $1,071 $1.53 $12,852 $18.36 Yr 1: $1,136/moFeb-19 3% $1,103 $1.58 $13,236 $18.91 Yr 2: $1,170/mo

Yr 3: $1,205/moYr 4: $1,241/moYr 5: $1,279/mo

16960 Smoke Shop 1,000 1% $1,407 $1.41 $16,884 $16.88 1% - - - - - - NNN 3/1/2012 2/28/2017 $1.50 1 (5-year)Yr 1: $1,449/moYr 2: $1,493/moYr 3: $1,537/moYr 4: $1,583/moYr 5: $1,631/mo

State Farm Insurance

MC Cellular

Fruit Ave.

The above information has been obtained from sources we believe to be reliable, however we cannot accept responsibility for its correctness.

[ 16 ] PRICING ANALySISHI DESERT PLAZA - VICTORVILLE, CA

RENT ROLL

% of Total (SF)

Current Monthly

Rent

MonthlyRent$/SF

% of Total (Rent)

CAM Recovery

Type

LeaseStart

LeaseExpires


CurrentAnnualRent

AnnualRent$/SF


$/SFAnnualRent


RentAnnual


(SF)

16962 650 1% $1,147 $1.76 $13,764 $21.18 1% Jun-16 3% $1,182 $1.82 $14,184 $21.82 NNN 6/1/2009 5/31/2019 $1.75 NoneJun-17 3% $1,217 $1.87 $14,604 $22.47Jun-18 3% $1,254 $1.93 $15,048 $23.15

12142 Toto's Mexican Restaurant

2,000 2% $4,000 $2.00 $48,000 $24.00 4% - - - - - - NNN 9/1/1988 MTM $2.00 None

1216012160A Dollar Tree 18,000 17% $12,150 $0.68 $145,800 $8.10 11% - - - - - - NNN 5/7/2005 2/29/2020 $1.00 1 (5-year)

$8.60/psf YR

12160B $1 $2 $3 Everything 8,328 8% $8,132 $0.98 $97,584 $11.72 7% - - - - - - Gross 11/23/2005 6/21/2016 $0.83 None

12180 - 1219212180A Aaron's Rental 7,400 7% $7,000 $0.95 $84,000 $11.35 6% May-18 4% $7,250 $0.98 $87,000 $11.76 NNN 11/21/2000 11/20/2020 $1.00 None

12180B 7,000 7% $2,590 $0.37 $31,080 $4.44 2% - - - - - - NNN 2/1/2014 1/31/2019 $0.50 2 (5-year)2% annual incr

12186 3,000 3% $3,300 $1.10 $39,600 $13.20 3% Nov-16 2% $3,366 $1.12 $40,392 $13.46 NNN 11/15/2015 11/14/2018 $1.50 1 (3-years)Nov-17 2% $3,433 $1.14 $41,196 $13.73 Yr 1: $3,502/mo

Yr 2: $3,572/moYr 3: $3,644/mo

12188 2,000 2% $2,266 $1.13 $27,192 $13.60 2% Jun-16 3% $2,334 $1.17 $28,008 $14.00 NNN 6/1/2008 5/31/2018 $1.25 NoneJun-17 3% $2,404 $1.20 $28,848 $14.42

Cornerstone Dance Studio

Mariana's Salon

Hana Bedding Co

Bear Valley Urgent Care

12190 2,000 2% $2,531 $1.27 $30,372 $15.19 2% Aug-17 6% $2,683 $1.34 $32,196 $16.10 NNN 1/9/2005 2/8/2020 $1.25 1 (5-year)Aug-19 6% $2,844 $1.42 $34,128 $17.06 Yr 1 & 2: $2,844/mo

Yr 3 & 4: $3,015/moYr 5: $3,196/mo

12192 2,000 2% $2,271 $1.14 $27,252 $13.63 2% Jul-16 3% $2,339 $1.17 $28,068 $14.03 NNN 7/1/2007 6/30/2019 $1.25 NoneJul-17 3% $2,409 $1.20 $28,908 $14.45Jul-18 3% $2,482 $1.24 $29,784 $14.89

1223012230 Community BINGO 8,640 8% $9,979 $1.15 $119,748 $13.86 9% Jan-18 5% $10,478 $1.21 $125,736 $14.55 NNN 2/1/1996 6/30/2020 $1.25 1 (5-years)

Mo 1-20: $11,002/moMo 21-40: $11,552/moMo 41-60: $12,130/mo

1224012240B/C Plaza Dentistry 1,649 2% $2,308 $1.40 $27,696 $16.80 2% - - - - - - NNN 6/1/1995 9/30/2018 $1.75 None

12240A 3,400 3% $3,740 $1.10 $44,880 $13.20 3% Mar-17 5% $3,910 $1.15 $46,920 $13.80 NNN 3/1/2015 2/28/2020 $1.25 2 ( 1-year)Mar-19 4% $4,080 $1.20 $48,960 $14.40 Opt 1: $4.250/mo

Opt 2: $4,420/mo

Los Pollos Bros

Pleasant Beauty

Valley Star Community and Family Services

The above information has been obtained from sources we believe to be reliable, however we cannot accept responsibility for its correctness. [ 16 ] [ 17 ]PRICING ANALySIS PRICING ANALySISHI DESERT PLAZA - VICTORVILLE, CA

RENT ROLL RENT ROLL (CONT’D)

% of Total (SF)

Current Monthly

Rent

MonthlyRent$/SF

% of Total (Rent)

CAM Recovery

Type

LeaseStart

LeaseExpires


CurrentAnnualRent

AnnualRent$/SF


$/SFAnnualRent


RentAnnual


(SF)

1217412174 6,000 6% $8,100 $1.35 $97,200 $16.20 7% Feb-18 3% $8,343 $1.39 $100,116 $16.69 NNN 2/1/2016 1/31/2026 $1.50 2 (5-year)

Feb-19 3% $8,593 $1.43 $103,119 $17.19 @ FMV + 3% yrFeb-20 3% $8,851 $1.48 $106,213 $17.70Feb-21 3% $9,117 $1.52 $109,399 $18.23Feb-22 3% $9,390 $1.57 $112,681 $18.78Feb-23 3% $9,672 $1.61 $116,062 $19.34Feb-24 3% $9,962 $1.66 $119,544 $19.92Feb-25 3% $10,261 $1.71 $123,130 $20.52

PAD Tenants - NAPPAD 1 Jack in the BOX

(NAP - CAM Only)3,330 2% $0 $0.00 $0 $0.00 0% - - - - - - NNN - - -

PAD 2 6,000 4% $0 $0.00 $0 $0.00 0% - - - - - - NNN - - -

PAD 3 36,800 25% $0 $0.00 $0 $0.00 0% - - - - - - NNN - - -

Total Owned:Total Occupied 101,647 99% $108,045 $1.06 $1,296,541 $12.76 98%

Total Vacant 1,300 1% $1,950 $1.50 $23,400 $18.00 2%Total / Wtd. Avg: 102,947 100% $109,995 $1.07 $1,319,941 $12.82 100%

dd's Discount (NAP - NO CAM)

Bank of America (NAP - CAM Only)

Louisiana Seafood

The above information has been obtained from sources we believe to be reliable, however we cannot accept responsibility for its correctness.


RENT ROLL (CONT.)

1 2 3 4 5 6 7 8 9 10 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

For the Years Ending Mar-2017 Mar-2018 Mar-2019 Mar-2020 Mar-2021 Mar-2022 Mar-2023 Mar-2024 Mar-2025 Mar-2026 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Potential Gross Revenue Base Rental Revenue $1,322,315 $1,351,984 $1,384,350 $1,406,835 $1,457,712 $1,510,126 $1,577,209 $1,620,976 $1,677,354 $1,840,137 Absorption & Turnover Vacancy (23,400) - (11,427) (7,950) (16,658) (52,348) (10,178) (23,361) (32,740) (53,170) ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________

Scheduled Base Rental Revenue 1,298,915 1,351,984 1,372,923 1,398,885 1,441,054 1,457,778 1,567,031 1,597,615 1,644,614 1,786,967Scheduled Base Rental Revenue 1,298,915 1,351,984 1,372,923 1,398,885 1,441,054 1,457,778 1,567,031 1,597,615 1,644,614 1,786,967 Expense Reimbursement Revenue 537,943 559,705 570,562 586,425 596,560 609,876 647,397 675,530 690,265 713,030 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Total Potential Gross Revenue 1,836,858 1,911,689 1,943,485 1,985,310 2,037,614 2,067,654 2,214,428 2,273,145 2,334,879 2,499,997 General Vacancy (1) (24,027) (49,039) (38,869) (43,869) (54,820) (4,245) (49,410) (43,628) (44,831) (31,960) ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Effective Gross Revenue 1,812,831 1,862,650 1,904,616 1,941,441 1,982,794 2,063,409 2,165,018 2,229,517 2,290,048 2,468,037 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Operating Expenses Property Taxes 230,398 235,056 239,808 244,656 249,604 254,652 259,802 265,058 270,420 275,891 Insurance 57,000 58,710 60,471 62,285 64,154 66,079 68,061 70,103 72,206 74,372 CAM 255,320 262,980 270,867 278,994 287,364 295,986 304,866 314,011 323,431 333,136 Management 54,385 55,879 57,138 58,243 59,484 61,902 64,951 66,886 68,701 74,041 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Total Operating Expenses 597,103 612,625 628,284 644,178 660,606 678,619 697,680 716,058 734,758 757,440 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Net Operating Income 1,215,728 1,250,025 1,276,332 1,297,263 1,322,188 1,384,790 1,467,338 1,513,459 1,555,290 1,710,597 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Leasing & Capital Costs Tenant Improvements 20,656 6,695 13,449 7,963 28,404 42,490 23,055 16,400 77,859 Leasing Commissions 23,562 7,678 18,339 9,497 19,898 46,608 28,561 21,114 82,121 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Total Leasing & Capital Costs 44,218 14,373 31,788 17,460 48,302 89,098 51,616 37,514 159,980

Debt Service (507,170) (665,784) (665,784) (665,784) (665,784) (665,784) (665,784) (665,784) (665,784) ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Cash Flow After Debt Service $664,340 $569,868 $578,760 $614,019 $608,102 $629,908 $749,938 $810,161 $729,526

=========== =========== =========== =========== =========== =========== =========== =========== ===========

Occupancy TrendsAverage Physical Occupancy 101,647 102,947 102,339 102,505 101,472 100,892 101,610 102,239 101,362Average Physical Occupancy - % 99% 100% 99% 100% 99% 98% 99% 99% 98%

Cap Rate 6.50% 6.68% 6.82% 6.94% 7.07% 7.40% 7.85% 8.09% 8.32%Cash/Cash 8.57% 7.35% 7.46% 7.92% 7.84% 8.12% 9.67% 10.45% 9.41%

Pricing Assumable 1st Loan (2) SalePricing Assumable 1st Loan SalePurchase Price $18,704,000 Loan Amount: $10,950,000 59% Exit Price $24,437,000Price PSF $182 Down Payment: $7,754,000 41% Exit Cap 7.00%In-Place Cap 6.50% Monthly Pmt (I/O): ($41,063) Jan 15 - Jan 17 Loan Balance at Sale (3) $9,329,106Year 5 Cap 7.07% Monthly Pmt (P&I): ($55,482) Feb 17 - Jan 25Year 5 Cash on Cash 7.84% Interest Rate: 4.50%Leveraged IRR (9-Year) 14.16% Amortization Period: 30 years

Loan Term 10 years

9- Year Hold Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9Purchase Price ($18,704,000)Loan Amount $10,950,000Cash Flow 664,340 569,868 578,760 614,019 608,102 629,908 749,938 810,161 729,526OLB at Sale ($9,329,106)Sale Price $24,437,000Total Cash Flow ($7,754,000) $664,340 $569,868 $578,760 $614,019 $608,102 $629,908 $749,938 $810,161 $15,837,420

(1) 5% Vacancy EXCLUDING major tenants as follows: US Army, Goodwill, Leslies Pools, Metro PCS, Dollar Tree and Aaron Rents. BofA & Jack in the Box are NAP and are excluded for CAM payments.(2) Loan originated 12/22/14 and must be assumed. Payment is I/O through January 2017. Loan is due January 6, 2025.(3) Outstanding loan balance at the time of sale.

The above information has been obtained from sources we believe to be reliable, however we cannot accept responsibility for its correctness. [ 18 ] [ 19 ]PRICING ANALySIS PRICING ANALySISHI DESERT PLAZA - VICTORVILLE, CA

RENT ROLL (CONT.) CASH FLOW

INCOME1. Base Rental Revenue: This is projected based on the terms of in-place tenant leases and the following assumptions:

a. Speculative Lease Terms: Lease terms for new and renewal leases are projected to be 5 years

b. Rental Abatements: None c. Renewal Probability: The renewal probability for all tenants is projected to be 75%. d. Renewal Options: All options are assumed to be exercised. All leases expiring over the first 12 months without options

are assumed to renew. e. Vacant Space upon Turnover: 6 months small tenants 12 months for anchors. f. Inflation rate: All expenses are projected to increase at 3% annually. g. Market rent growth: All market rents are projected to increase at 3% annually. h. Rent Steps: New leases include 3% annual increases. i. See Rent Roll

2. Expense Reimbursement Revenue: All tenants EXCEPT US Army and $1$2$3 Everything (both Gross leases) reimburse on a triple net (NNN) basis including Taxes, Insurance, CAM, and Admin Fees (0% to 15%) in lieu of Management Fee. Tenant’s reimbursements were modeled based off of the 2016 Operating Budget. Goodwill Industries has Prop 13 protection against any increase in property tax reimbursements due to a sale of the property. Goodwill Prop 13 protection applies only during the initiallease term expiring October 31, 2022.

3. General Vacancy: A loss provision for vacancy is currently modeled at 5% of Potential Gross Revenue EXCLUDING: US Army, Goodwill, Leslies Pools, Metro PCS, Dollar Tree and Aarons Rent. BofA and Jack in the Box are NAP and are excluded for CAM payments.

4. Lease Up: Total vacancy is 1,300 SF (1%); analysis assumes Suite 16940A is leased in month 13 of the analysis.

EXPENSES5. Operating expenses have been estimated based on the 2016 projected expenses provided

by owner.

LEASING COSTS 6. Leasing Commissions are projected at 6% for new deals and 3% for renewals. Tenant improvements are projected at $5/SF for

new deals and $0/SF for renewals.

SPECIFIC ASSUMPTIONS 7. All leases expiring over the first 12 months without options are assumed to renew. 8. Goodwill Industries has Prop 13 protection against any increase in property tax reimbursements due to a sale of the property.

Goodwill Prop 13 protection applies only during the initial lease term expiring October 31, 2022.

The cash flow period begins April 2016 and presents a 9-year fiscal analysis ending March 2025. The cash flow has been prepared using ARGUS v15 software. A copy of the file is available for your review. Expense and revenue assumptions are based upon operating statements, rent rolls, and other schedules provided by the current owner.


ASSUMPTIONS

DOLLAR TREEDollar Tree Inc. operates more than 5,100 Dollar Tree, Deal$, and Dollar Bills discount stores in 48 US states and the District of Columbia, and about 180 Dollar Tree (formerly Dollar Giant) stores in Canada. Stores carry a mix of housewares, toys, seasonal items, food, health and beauty aids, gifts, and books -- most priced at $1 or less. Imports, primarily from China, account for about 40% of merchandise. The stores are located in high-traffic strip centers anchored by mass merchandisers, supermarkets, malls, and in small towns. Founded in 1986 as Dollar Tree Stores, the company later changed its name to Dollar Tree, Inc. Headquartered in Chesapeake, VA, Dollar Tree is the largest and most successful single-price-point retailer in North America.

Dollar Tree acquired Family Dollar in 2015, creating the largest dollar store chain in the country with more than 13,000 stores nationwide. Dollar Tree has the highest annual revenue among dollar stores.

Company Type: Public - NASDAQ: DLTR2015 Employees: 90,0002015 Net Income: $599.2 Million2015 Equity: $1.79 BillionFiscal Year End: January2015 Revenue: $8.60 Billion2015 Assets: $3.57 BillionS&P Ranking: BBRankings: #342 in FORTUNE 500 (June 2014)Website: www.dollartree.com

GOODWILLGoodwill Industries International supports the operations of about 165 independent Goodwill chapters in the US and Canada. While it’s most well known for its more than 3,000 family clothing stores, the group also focuses on providing rehabilitation, job training, placement, and employment services for people with disabilities and others. Goodwill is one of the world’s largest providers of such services, as well as one of the largest employers in the world of the physically, mentally, and emotionally disabled. Support for its programs is generated primarily from the sale of donated goods, both at the retail stores and through an online auction site, as well as from contract work and government grants.

Company Type: Private (Not for Profit)Fiscal Year End: December2014 Revenue: $89.98 Million2014 Assets: $38.48 MillionWebsite: www.goodwill.org

AARON’SAaron’s, Inc. (NySE: AAN) is a specialty retailer serving consumers through the sale and lease ownership of furniture, consumer electronics, computers, home appliances, and accessories in over 2,100 Company-operated and franchised stores in the United States and Canada. The Company was founded in 1955, is headquartered in Atlanta and has been publicly traded since 1982. Aaron’s is the industry leader in serving the moderate-income consumer and offering affordable payment plans, quality merchandise and superior service.

Company Type: Public (NYSE: AAN)2014 Employees: Approximately 12,4002014 Net Income: $78.23 Million2014 Equity: $1.22 BillionFiscal Year End: December2014 Revenue: $2.73 Billion2014 Assets: $2.46 BillionRankings: #907 in FORTUNE 1000 (June 2014)Website: www.aarons.com

[ 20 ] [ 21 ]PRICING ANALySIS PRICING ANALySISHI DESERT PLAZA - VICTORVILLE, CA

TENANT SYNOPSIS

ONLY $1 $2 $3 FASHION

ONLy $1 $2 $3 FASHION carries name brands and first quality clothing from Los Angeles manufacturers and distributors. The Company’s buying department makes sure to find the absolute best items for the lowest possible prices so that the savings can be passed on directly to the customers. ONLy $1 $2 $3 FASHION have a wide selection of the hottest women’s fashion and accessories for all ages and sizes. Company’s tireless workers and buying department at its corporate office in Los Angeles make sure that the store receives brand new inventory on a daily basis.

Company Type: PrivateLocations: 25Website: www. only123fashion.com

METROPCS

MetroPCS is the flagship prepaid brand of T-Mobile US, Inc., and a leading provider of unlimited talk, text and data plans with taxes and regulatory fees included. MetroPCS offers the freedom and convenience of an affordable, no-contract wireless service, riding on T-Mobile’s blazing-fast nationwide network.

As America’s Un-carrier, T-Mobile US, Inc. (NySE: TMUS) has redefined the way consumers and businesses buy wireless services through leading product and service innovation. The Company’s advanced nationwide 4G LTE network delivers outstanding wireless experiences to approximately 57 million customers who are unwilling to compromise on quality and value. Based in Bellevue, Washington, T-Mobile US provides services through its subsidiaries and operates its flagship brands, T-Mobile and MetroPCS.

Company Type: Public (NySE: TMUS)2014 Employees: 45,0002014 Net Income: $247 Million2014 Equity: $15.66 BillionFiscal Year End: December2014 Revenue: $29.56 Billion2014 Assets: $56.65 BillionS&P Ranking: BBWebsite: www.metropcs.com, www.t-mobile.com

LESLIES POOLMART INCLeslies Poolmart Inc, operates as a specialty retailer of swimming pool supplies and related products in the United States. As of December 2015, it operates 910 retail store locations in 35 states. The company was founded in 1963 and is headquartered in Phoenix, Arizona. Leslie’s Poolmart, Inc. is a subsidiary of Leslie’s Holdings, Inc.

Company Type: PrivateLocations: 910Fiscal Year-End: OctoberWebsite:


TENANT SYNOPSIS

[ 22 ] PRICING ANALySIS

AREA OVERVIEW

THE CITY OF VICTORVILLE

Located in Southern California along Interstate 15, 90-miles

northeast of Los Angeles, Victorville has successfully

established itself among the most cost-effective locations in

California to do business. Testimony supporting that distinction

involves nationally and internationally recognized companies

having opened manufacturing, logistics or aerospace related

operations in Victorville. Industry chooses Victorville because

of investments it has made in its public infrastructure system,

including its airport, electrical, natural gas, roadway, water and

wastewater treatment systems.

With immediate access to the Southern California market, less

than 24 hour drive time to most of the Western United States

and convenient access to Interstate 15, Interstate 40, Interstate

10 and Highway 395, Victorville has become one of the most

significant logistics hub in California.

Victorville’s largest real estate asset is Southern California

Logistics Airport (SCLA). The 5,000-acre complex includes a

fully operational commercial airport, aviation services hub

and industrial park. Some of the world-class companies that

call SCLA home include Dr. Pepper Snapple Group, GE, M&M

Mars, United Furniture Industries, Boeing, Plastipak, Newell

Rubbermaid, Southern California Aviation and many more. For

information on available properties, click on the links below.

QUICK FACTS ABOUT VICTORVILLE:

» Victoville was named the 6th fastest growing city in the US in 2010.

» Victorville was named the fastest growing city with a population over 100,000 in the state in 2009.

» In 2008, Victorville was named the second fastest growing city in the US

» Victorville’s population passed the 100,000 population milestone in 2007.

» In 2007, Victorville was named the fastest growing city in California.

» The USA’s second longest commercial runway is at Victorville’s Southern California Logistics Airport (SCLA).

» Business-friendly, family-friendly Victorville boosts a municipal golf course and 20 parks. Plenty of sport fields and teams for youth to adults.

MAJOR PROJECTS IN VICTORVILLE:

» Victorville Medical Campus:

» In 1994, the RDA acquired approximately 20.23 + acres of property within the Bear Valley Project Area for the ultimate purposes of developing a professional medical campus. In 1995, the RDA entered into a Disposition Development Agreement (DDA) that sold the property to a developer for development purposes. From 1997-1998, seven new doctor’s offices moved into the medical campus. Since the DDA, the campus has grown to include facilities for Life Chiropractic, Desert Dialysis, San Bernardino County Mental Health Department, Vista Dental, the dental office expansion of Dr. Bell and the dental offices of Dr. Thomas Strand to name a few. In addition, the site is also used for professional office space for companies such as Wells Fargo, Xerox Inc, and Messners and Wells LLP.

» Foxborough Industrial Park:

Foxborough Industrial Park is a 233-acre industrial area located in the former Bear Valley Project Area. The Park provides industrial access via highway and rail. Major tenants of Foxborough include Goodyear Tire and Rubber Company, Church

& Dwight, ConAgra Foods and Nutro Products.


HIGH DESERT AREA OVERVIEW

» Desert Valley Medical Hospital Expansion:

In 2008, the Desert Valley Medical Hospital started construction

on the expansion of its current facility to increase its services to

Victor Valley residents. The expansion of the hospital is a $30

million project that added an additional 500,000 square feet to

the hospital. The larger facility added another 65 beds and also

added 140 jobs. The RDA is helping with the expansion of the

hospital by spending up to $500,000 for public improvements.

MAJOR EMPLOYERS # OF EMPLOYEES

» Southern California Logistics Airport 2,000

» The Mall of Victor Valley 1,100

» Victor Valley Union High School District 1,000

» Desert Valley Hospital/ Medical Group 950

» Victo Elementary School District 948

» Verizon 900

» Federal Correction Complex Victorville 844

» Victor Valley College 830

» Victor Valley Community Hospital 570

» City of Victorville 366

TRANSPORTATION:

EVictorville is the multimodal transportation hub of Southern

California—on the way to everywhere in the world. Whether

one transports cargo via truck, rail or air, Victorville brings

them all together and on their way within a pro-business, fast

track environment.

Victorville, with easy freeway access, is located off I-15, US-395

and SR-18 between Los Angeles and Las Vegas—just 40 miles

from I-10 and I-40. Other nearby main routes include SR-58, SR-

60, I-215, I-210, SR-138 and other major highways.

BNSF Logistics Facility (proposed): BNSF Railway Company

and the City of Victorville signed an exclusive Memorandum of

Understanding (MOU) in January 2007 to explore development

of a major intermodal logistics center at Victorville’s railway

center, adjacent to SCLA, nationally recognized for its unique

development through public-private partnerships.

COUNTY OF SAN BERNARDINO

San Bernardino County was established on April 26, 1853 by an

act of the State legislature. It lies east of Los Angeles, Orange,

and Kern Counties, north of Riverside County and south of Inyo County, and covers an area of more than 20,160 square miles. It is the largest county in the contiguous United States. It is larger than nine states. It contains 24 incorporated cities and towns. About 90 percent of the county is desert; the remainder consists of the San Bernardino Mountains and the San Bernardino Valley. Popular attractions in the County include the San Bernardino National Forest, Joshua Tree National Park, Death Valley National Park, and the East Mojave Scenic Area.

San Bernardino County has the fifth largest population in California. In July 2013, San Bernardino County’s population was estimated at over two million (2,088,371). San Bernardino County is the twelfth most populous county in the nation, with more residents than 15 of the country’s states, including Idaho, West Virginia, and New Mexico.

[ 24 ] [ 25 ]PRICING ANALySIS PRICING ANALySISHI DESERT PLAZA - VICTORVILLE, CA

HIGH DESERT AREA OVERVIEW (CONT.)

CAPTION

DESCRIPTION (WWW.ROL3.SITESUSA.COM) 1 MILE 3 MILES 5 MILES 10 MILES

2015 Estimated Population 9,065 61,235 174,891 339,314

2020 Projected Population 9,462 64,096 183,219 354,986

2010 Census Population 8,620 58,801 167,553 323,365


Projected Annual Growth 2015 to 2020 0.9% 0.9% 1.0% 0.9%

Historical Annual Growth 2000 to 2015 4.3% 2.8% 2.8% 4.0%

2015 Median Age 29.2 33.2 32.9 32.3

2015 Estimated Households 2,844 19,952 55,293 102,374

2020 Projected Households 2,970 20,913 57,990 107,287

2010 Census Households 2,679 19,063 52,694 97,029




2015 Estimated White 48.4% 56.0% 55.6% 56.2%

2015 Estimated Black or African American 14.8% 11.2% 11.7% 12.1%

2015 Estimated Asian or Pacific Islander 5.0% 4.1% 4.0% 4.0%

2015 Estimated American Indian or Native Alaskan 1.0% 1.0% 1.2% 1.2%

2015 Estimated Other Races 30.8% 27.8% 27.5% 26.5%

2015 Estimated Hispanic 48.0% 44.5% 45.6% 45.0%

2015 Estimated Average Household Income $46,903 $54,109 $56,867 $58,930

2015 Estimated Median Household Income $38,159 $43,446 $47,042 $49,199

2015 Estimated Per Capita Income $14,718 $17,654 $18,022 $18,036

2015 Estimated Total Businesses 440 2,472 6,256 8,611

2015 Estimated Total Employees 4,062 19,609 51,488 70,058

2015 Estimated Employee Population per Business 9.2 7.9 8.2 8.1

2015 Estimated Residential Population per Business 20.6 24.8 28.0 39.4

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©2014, Sites USA, Chandler, Arizona, 480-491-1112 page 1 of 1 Demographic Source: Applied Geographic Solutions 04/2013, TIGER Geography

1 MILE 3 MILES 5 MILES 10 MILES

2015 Estimated Population 9,065 61,235 174,891 339,314

2020 Projected Population 9,462 64,096 183,219 354,986





2015 Median Age 29.2 33.2 32.9 32.3

2015 Estimated Households 2,844 19,952 55,293 102,374

2020 Projected Households 2,970 20,913 57,990 107,287





2015 Estimated White 48.4% 56.0% 55.6% 56.2%

2015 Estimated Black or African American 14.8% 11.2% 11.7% 12.1%

2015 Estimated Asian or Pacific Islander 5.0% 4.1% 4.0% 4.0%

2015 Estimated American Indian or Native Alaskan 1.0% 1.0% 1.2% 1.2%

2015 Estimated Other Races 30.8% 27.8% 27.5% 26.5%

2015 Estimated Hispanic 48.0% 44.5% 45.6% 45.0%

2015 Estimated Average Household Income $46,903 $54,109 $56,867 $58,930

2015 Estimated Median Household Income $38,159 $43,446 $47,042 $49,199

2015 Estimated Per Capita Income $14,718 $17,654 $18,022 $18,036

2015 Estimated Total Businesses 440 2,472 6,256 8,611

2015 Estimated Total Employees 4,062 19,609 51,488 70,058

2015 Estimated Employee Population per Business 9.2 7.9 8.2 8.1

2015 Estimated Residential Population per Business 20.6 24.8 28.0 39.4

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©2014, Sites USA, Chandler, Arizona, 480-491-1112 page 1 of 1 Demographic Source: Applied Geographic Solutions 04/2013, TIGER Geography

5 MILE3 MILE1 MILE 10 MILE


DEMOGRAPHICS

CAPTION

www. f a r i s l e e . c om

[ 26 ] PRICING ANALySIS

DEMOGRAPHICS

hi desert plaza - loopnet · 1 renaissance center 100,940 1990/2005 100% $18 - $24 1 miles 16120...

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