CONFIDENTIAL OFFERING MEMORANDUM

2829 MONTEREY ROADSAN JOSE, CALIFORNIA

MONTEREY ROAD SELF-STORAGE

Property Summary ...................3

Investment Overview .............. 4

Unit Mix ................................. 10

Competition Overview ............ 13

Demographics ........................ 15

Location Overview ................. 16

Residential Projects ............... 17

CONTENTS

2829 MONTEREY ROAD

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SITE DESCRIPTION

Address 2829 Monterey Road

City, State San Jose, CA

County Santa Clara

Parcel Number 45536009

Zoning Industrial, Storage Permit Pending

Lot Size (Acres) 7.4 Acres

Asking Price $12,00,000

CLIMATE CONTROLLED

Size Asking Rate Rent/SF

5x5 $88 $3.52

5x10 $128 $2.56

10x10 $188 $1.88

10x15 $253 $1.69

10x20 $288 $1.44

REGULAR

Size Asking Rate Rent/SF

5x5 $80 $3.20

5x10 $115 $2.30

10x10 $165 $1.65

10x15 $247 $1.65

10x20 $268 $1.34

Boat / RV Space: $175/unit

Projected NOI Year 1 Year 2 Year 3

Average Rental Rate/SF $1.61 $1.67 $1.74

Boat / RV Units (144) $175 $180 $185

Occupancy % 55% 75% 93%

Total Gross Income $1,810,724 $2,512,807 $3,210,405

Operating Expenses/SF $5.50 $5.64 $5.78

Total Operating Expenses $784,560 $804,266 $824,373

Operating Income $1,026,074 $1,708,540 $2,386,032

PROPERTY SUMMARY

PROPERTY SUMMARY

INVESTMENT FUNDAMENTALS / PHASE I

INVESTMENT HIGHLIGHTS

MARKET SUMMARY

• Escrow to close once Fully Entitled for Self Storage• Two-Phase Plan Totaling 209,000 square feet• Phase I: (143,200 + 144 RV)• Plan consists of two-story climate control and drive up units• Excellent Location and Exposure: Traffic Counts are over

33,000 cars/day• High Population Density: 9,122 people per square mile within a

3-mile radius• High Income Area: The median household income within a

5-mile radius is $77,859

MARKET SATURATION

Total SF Population Saturation

3 Mile 1,230,703 257,946 4.77

5 Mile 2,645,488 676,342 3.91

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Monterey Rd Self-Storage in San Jose is an institutional quality proposed facility in a fast growing neighborhood in the City of San Jose, Califor-nia “The Heart of Silicon Valley”. The project has been designed in two phases with the initial phase offering 143,200 net rentable square feet plus 144 boat/RV parking stalls. At full build-out the facility is designed to include an additional 65,800 rentable square feet for a total of 209,000 rentable square feet of storage.

The property is currently secured by a concrete wall on the Northern side, Steel wall on the Southern side and chain link fencing on the rear of the property and sits between a newly built apartment complex and an industrial complex with the rear of the property up against the primary AMTRAK train line between San Jose’s Diridon Station and points south.

In the City of San Jose’s South Planning Area the property is surrounded by 10 major residential developments totaling an additional 2,555 multi-family residential units. Just beyond the 3-mile radius are over a dozen additional residential projects, including 4 high-rise residential tow-ers in Downtown San Jose under construction at the end of 2016.

As the Heart of Silicon Valley the San Jose area is one of the fastest growing regions in the country with the overwhelming majority of new devel-opments in the form of multi-family rental units.

INVESTMENT HIGHLIGHTS

INVESTMENT OVERVIEW

• Proposed Class A self-storage facility to be built in 2 phases• Property situated in a rapidly growing South San Jose location with over 2,555 multi-family units planned or under construction• Monterey Rd averages over 33,000 cars per day at this location• Average rents non-climate controlled at $1.68 and climate controlled at $1.98 for this submarket area• Average sub-market occupancies at 96.11%• Only 3 existing facilities within 1.25-mile radius

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ANNUALIZED PROPERTY OPERATING DATALease-Up As Stabilized

Income Year 1 Year 2 Year 3Gross Potential Rent Phase I Storage (143,200 NRSF) $2,766,624 $1.61/SF $2,869,728 $1.67/SF $2,990,016 $1.74/SF

Boat / RV (144 spaces) $302,400 $175 $311,040 $180 $319,680 $185 Rental Income $3,069,024 $3,180,768 $3,309,696 Ancillary Income $122,761 $127,231 $132,388 Less: Vacancy/Concessions $1,381,061 55% $795,192 75% $231,679 93%Effective Gross Income $1,810,724 $2,512,807 $3,210,405 Less: Expenses $784,650 $804,266 $824,373 Stabilized Net Operating Income $1,026,074 57% $1,708,540 68% $2,386,032 74%

Expenses Advertising $42,955 $44,029 $45,130 General & Administrative $71,592 $73,382 $75,216 Payroll $143,184 $146,764 $150,433 3rd Party Management $153,451 $157,287 $161,220 Real Estate Taxes $262,500 $269,063 $275,789 Insurance $21,478 $22,015 $22,565 Utilities $46,535 $47,698 $48,891 Repairs & Maintenance $21,478 $22,015 $22,565 Capital Reserves $21,478 $22,015 $22,565 Total Estimated Expenses $784,650 43% $804,266 32% $824,373 26%

Expenses per Self Storage Almanac estimates. Annual increases in expenses of 2.5% and 4.0% annual rental rate increases.

PHASE I Stabilized Property Value: 5.00% CAP $47,720,644

5.50% CAP $43,382,404 6.00% CAP $39,767,204

APOD

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PROJECT DATALand Area (s.f.) 7.362 acres 320,700Total Building Area (s.f.) - Phase I (Phase II adds 65,800 SF) 190,800Gross Storage Buildings (s.f.) 188,400Manger’s Bldg (s.f.) - office below, apartment above 2,400Net Rentable (s.f.) PHASE I amounts to 76.0% of gross s.f. 143,200Net Rentable (s.f.) PHASE II (not in analysis) gross SF 65,800Total Number of Units amounts to 102.0 s.f. ave unit size 1,404RV Canopy Area (s.f.) 0Total Area of Buildings & RV Canopies 190,800Total Number of RV & Boat Parking Stalls 144Uncovered Rv & Boat Parking Stalls 144

Unit Total Rentable Rentable Rental Monthly Rent Annual Rent Potential Revenue Size (feet) # of Units SF / Unit Square Feet Rate Square Foot Square Foot Monthly Annual

DRIVE-UP UNITS5 X 5 60 25 1,500 $60.00 $2.40 $28.80 $3,600 $43,200 5 X 10 80 50 4,000 $95.00 $1.90 $22.80 $7,600 $91,200 5 X 15 80 75 6,000 $144.00 $1.92 $23.04 $11,520 $138,240 10 X 10 160 100 16,000 $158.00 $1.58 $18.96 $25,280 $303,360 10 X 20 100 200 20,000 $268.00 $1.34 $16.08 $26,800 $321,600 10 X 25 120 250 30,000 $330.00 $1.32 $15.84 $39,600 $475,200 10 X 30 80 300 24,000 $398.00 $1.33 $15.92 $31,840 $382,080

INTERIOR UNITS - CLIMATE CONTROLLED5 X 5 100 25 2,500 $68.00 $2.72 $32.64 $6,800 $81,600 5 X 10 100 50 5,000 $96.00 $1.92 $23.04 $9,600 $115,200 5 X 15 80 75 6,000 $148.00 $1.97 $23.68 $11,840 $142,080 10 X 10 140 100 14,000 $184.00 $1.84 $22.08 $25,760 $309,120 10 X 20 71 200 14,200 $288.00 $1.44 $17.28 $20,448 $245,376

OUTDOOR BOAT/RV SPACES 10 X 40 144 400 $175.00 $0.44 $5.25 $25,200 $302,400

Total 1,171 143,200 $245,888 $2,950,656 Weighted Average 122 $1.72

UNIT MIX

PRELIMINARY COST OVERVIEW

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DEVELOPMENT COST ESTIMATESLand Cost amounts to $37.42 per s.f. $12,000,000

Hard CostsSitework - Typical amounts to $4.19 per s.f. $800,000Construction Cost Est. - Storage + Office estimate @ $60.00 per s.f. $8,586,000Security Features estimate @ $1.50 per s.f. $286,200Solar System assumed kw: 30 estimate @ $3,667 per k.w. $110,010Setup Costs (computers, office equipment, furniture, golf cart, etc.) $17,500Signage (assumes 1 monuments & 1 wall sign) $18,500

City and Agency FeesCity, Agencies, & Utility Co. Fees estimate @ $3.00 per s.f. $572,400

Consultants & MiscDesign and Entitlement Coordination $15,000Architect $25,000Illustrator $2,500Landscape Architect $4,000Civil Engineer (survey, design, staking) $65,000Soils Engineer (Phase 1 ESA, report, testing - most already completed) $10,000Green Building Consultant $13,500Lighting Consultant (photometric design) $1,500Electrical Engineer (construction drawings & Title 24 report) $3,500Special Inspections $16,500Market Survey $5,000Title Company $2,500Traffic Study $3,500

Total Estimated Development Costs $22,558,110

PRELIMINARY COST OVERVIEW cont.

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Address Distance1850 Stone Ave 1.6 Miles Toeniskoetter Development. Opening April 2017. 90,000 ±NRSF4310 Monterey Rd 1.7 Miles Hung Lam. Proposed rehab and expansion to 40,187 SF2905 S King Rd 2.4 Miles Bay Area Self-Storage. Preliminary Review. Storage/industrial. 110,000 SF1000 S 3rd St 2.5 Miles North American Storage. Preliminary Review. Ground-up, 80,000 SF

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2829 MONTEREY ROAD

PROPOSED SELF-STORAGE DEVELOPMENTS IN 3-MILE RADIUS

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A-1 Self Storage 2900 Monterey Rd, San Jose, CA 95111 Est. 85,000 NRSF. 839 units. Built 1998Size Type SF Price $/SF5 X 5 Ground Floor 25 $81.00 $3.24 5 X 5 Elevator 25 $62.00 $2.48 5 X 10 Ground Floor 50 $112.00 $2.24 5 X 10 Elevator 50 $92.00 $1.84 5 X 15 Ground Floor 75 $171.00 $2.28 10 X 10 Ground Floor 100 $145.00 $1.45 10 X 20 Ground Floor 200 $303.00 $1.52 10 X 20 Elevator 200 $265.00 $1.33 10 X 30 Ground Floor 300 $429.00 $1.43

Average: $1.98

Public Storage (2 contiguous facilities) 195 Old Tully Rd & 150 Tully Rd, San Jose, CA 95111 Est. 186,000 NRSF. 1,659 units. Built 1973/2002Size Type SF Price $/SF5 X 5 Elevator 25 $57.00 $2.28 5 X 10 Elevator 50 $101.00 $2.02 5 X 15 Elevator 75 $144.00 $1.92 10 X 10 Ground Floor 100 $180.00 $1.80 10 X 10 Elevator 100 $151.00 $1.51 10 X 15 Elevator 150 $212.00 $1.41 10 X 20 Ground Floor 200 $336.00 $1.68

Average: $1.80

COMPETITION OVERVIEW

Public Storage 475 Tully Rd, San Jose, CA 95111 Est. 55,000 NRSF. 696 units. Built 1975Size Type SF Price $/SF5 X 10 Ground Floor / DU 50 $84.00 $1.68 7 X 10 Ground Floor / DU 70 $104.00 $1.49 5 X 15 Ground Floor / DU 75 $106.00 $1.41 10 X 10 Ground Floor / DU 100 $194.00 $1.94 10 X 18 Ground Floor / DU 180 $300.00 $1.67

Average: $1.64

Public Storage 3900 Vista Park Dr, San Jose, CA 95136Est. 110,000 NRSF. 960 units. Built 2000Size Type SF Price $/SF5 X 5 Ground Floor 25 $54.00 $2.16 5 X 5 Ground Floor/CC 25 $63.00 $2.52 5 X 10 Ground Floor 50 $83.00 $1.66 5 X 10 Ground Floor/CC 50 $94.00 $1.88 10 X 10 Ground Floor 100 $161.00 $1.61 10 X 10 Ground Floor / DU 100 $185.00 $1.85 10 X 15 Ground Floor / DU 150 $236.00 $1.57 10 X 20 Ground Floor / DU 200 $240.00 $1.20

Average: $1.81

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Extra Space Storage 3510 Charter Park Dr, San Jose, CA 95136Est. 50,000 NRSF. 503 units. Built 1998Size Type SF Price $/SF5 X 5 Elevator 25 $58.00 $2.32 5 X 10 Elevator 50 $101.00 $2.02 5 X 10 Ground Floor 50 $115.00 $2.30 5 X 15 Elevator 75 $124.00 $1.65 5 X 15 Ground Floor / CC 75 $144.00 $1.92 10 X 10 Elevator 100 $151.00 $1.51 10 X 10 Ground Floor 100 $180.00 $1.80 10 X 15 Elevator 150 $212.00 $1.41 10 X 15 Elevator / CC 150 $232.00 $1.55 10 X 20 Ground Floor 200 $336.00 $1.68

Average: $1.82

OTHERS:Bay Area Self Storage, 2185 Stone Ave, San Jose, 95125Eagle RV & Mini Storage, 4310 Monterey Rd, 95111A-1 Self Storage, 544 Phelan Ave @ Senter Rd, San Jose 95112Public Storage, 3911 Snell Ave, San Jose 95136Snell Mini Storage, 100 Granite Rock Way, San Jose 95136A-1 Self Storage, 131 Baroni Ave, San Jose 95136Public Storage, 725 Capitol Expressway Automall, San Jose, CA 95136Willow Glen Self Storage, 2220 Canoas Garden Ave, San Jose CA 95125Bay Area Self Storage, 1140 Stone Ave, San Jose CA 95125Downtown Self Storage, 850 S 10th St, San Jose, CA 95112Branham Self Storage, 1056 Branham Lane, San Jose Ca 95136

Public Storage 3620 Snell Ave, San Jose, CA 95136Est. 60,000 NRSF. 553 units. Built 1987Size Type SF Price $/SF5 X 5 Ground Floor 25 $51.00 $2.04 5 X 10 Ground Floor 50 $71.00 $1.42 5 X 10 Ground Floor / DU 50 $88.00 $1.76 10 X 10 Ground Floor 100 $122.00 $1.22 5 X 15 Ground Floor 75 $144.00 $1.92 10 X 20 Ground Floor 200 $170.00 $0.85 10 X 20 Ground Floor / DU 200 $184.00 $0.92

Average: $1.45

COMPETITION OVERVIEW

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2016 Summary 1 Mile 2 Mile 3 Mile

Population 26,791 257,946 676,342

Households 7,896 76,804 207,057

Owner Occupied Housing Units 4,905 41,873 114,096

Renter Occupied Housing Units 2,991 34,931 92,060

Median Household Income $68,696 $74,411 $77,859

Trends: 2016-2021 Annual Rate 1 Mile 2 Mile 3 Mile

Population 1.51% 1.19% 1.24%

Households 1.47% 1.14% 1.22%

Median Household Income 2.70% 2.10% 2.16%

DEMOGRAPHICS

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No. Company/Organization San Jose Employees

1 County of Santa Clara 17,800

2 Cisco Systems 14,000

3 City of San Jose 5,945

4 San Jose State University 4,300

5 Western Digital/HGST 3,000

6 eBay 2,800

7 Paypal, Inc. 2,800

8 IBM Corporation 2,800

9 Adobe Systems 2,100

10 Kaiser Permanente 2,100

11 Good Samaritan Hospital 2,000

12 Target Corporation 1,900

13 Brocade Communication 1,700

14 Cadence Design Systems Inc. 1,600

15 Maxim Integrated Products 1,600

Investment Highlights> Escrow to close once Fully Entitled for Self Storage

> Two-Phase Plan Totaling 225,800 square feet

> Plan consists of two-story climate control and drive up units

> Excellent Location and Exposure: Traffic Counts are over 33,000 cars/day

> High Population Density: 9,122 people per square mile within a 3-mile radius

> High Income Area: The median household income within a 5-mile radius is $77,859

Location OverviewProperty SummarySite DescriptionAddress 2829 Monterey Road

San Jose, CACounty Santa Clara

Parcel # 45536009

Zoning Industrial, Storage Permit Pending

Lot Size (Acres) 7.4 Acres

Market Rents Climate Controlled

Size Asking Rent Rent/SF

5x5 $88 $3.52

5x10 $128 $2.56

10x10 $188 $1.88

10x15 $253 $1.69

10x20 $288 $1.44

RegularSize Asking Rent Rent/SF

5x5 $80 $3.20

5x10 $115 $2.30

10x10 $165 $1.65

10x15 $247 $1.65

10x20 $268 $1.34

Major Private / Public Employers No. Company/Organization San Jose Employees1 County of Santa Clara 17,8002 Cisco Systems 14,0003 City of San Jose 5,9454 San Jose State University 4,3005 Western Digital/HGST 3,0006 eBay 2,8007 Paypal, Inc. 2,8008 IBM Corporation 2,8009 Adobe Systems 2,10010 Kaiser Permanente 2,10011 Good Samaritan Hospital 2,00012 Target Corporation 1,90013 Brocade Communication 1,70014 Cadence Design Systems Inc. 1,60015 Maxim Integrated Products 1,600

Investment FundamentalsProjected NOI, Years 1 and 2

Projected NOIAverage Rental Rate/SF

Year 1 Year 2 Year

3$1.61 $1.67 $1.74

Occupancy % 55% 75% 95%

Total Gross Income $1,810,724 $2,512,807 $3,210,405

Operating Expenses/SF $5.50 $5.64 $5.78

$804,266 $824,373Total Operating Expenses $784,560 Net

Operating Income $1,026,074 $1,708,540 $2,386,032

Demographics2016 Summary 1 mile 2 mile 3 mile

Population 26,791 257,946 676,342

Households 7,896 76,804 207,057

Owner Occupied Housing Units 4,905 41,873 114,096

Renter Occupied Housing Units 2,991 34,931 92,060

Median Household Income $68,696 $74,411 $77,859

Trends: 2016-2021 Annual Rate 1 mile 2 mile 3 milePopulation 1.51% 1.19% 1.24%

Households 1.47% 1.14% 1.22%

Median Household Income 2.70% 2.10% 2.16%

Chateau La Salle Mobile Home Park

Lennar at Astoria Townhome style residences

Monterey Rd

Capitol Expy

Hillsdale Ave

Orvieto Apartments New Construction - 92 units

Summer Breeze Apartments

Villa Monterey Apartments

Market SummaryMarket Saturation

Total SF Population Saturation3 Mile 1,230,703 257,946 4.775 Mile 2,645,488 676,342 3.91

Investment Highlights> Escrow to close once Fully Entitled for Self Storage

> Two-Phase Plan Totaling 225,800 square feet

> Plan consists of two-story climate control and drive up units

> Excellent Location and Exposure: Traffic Counts are over 33,000 cars/day

> High Population Density: 9,122 people per square mile within a 3-mile radius

> High Income Area: The median household income within a 5-mile radius is $77,859

Location OverviewProperty SummarySite DescriptionAddress 2829 Monterey Road

San Jose, CACounty Santa Clara

Parcel # 45536009

Zoning Industrial, Storage Permit Pending

Lot Size (Acres) 7.4 Acres

Market Rents Climate Controlled

Size Asking Rent Rent/SF

5x5 $88 $3.52

5x10 $128 $2.56

10x10 $188 $1.88

10x15 $253 $1.69

10x20 $288 $1.44

RegularSize Asking Rent Rent/SF

5x5 $80 $3.20

5x10 $115 $2.30

10x10 $165 $1.65

10x15 $247 $1.65

10x20 $268 $1.34

Major Private / Public Employers No. Company/Organization San Jose Employees1 County of Santa Clara 17,8002 Cisco Systems 14,0003 City of San Jose 5,9454 San Jose State University 4,3005 Western Digital/HGST 3,0006 eBay 2,8007 Paypal, Inc. 2,8008 IBM Corporation 2,8009 Adobe Systems 2,10010 Kaiser Permanente 2,10011 Good Samaritan Hospital 2,00012 Target Corporation 1,90013 Brocade Communication 1,70014 Cadence Design Systems Inc. 1,60015 Maxim Integrated Products 1,600

Investment FundamentalsProjected NOI, Years 1 and 2

Projected NOIAverage Rental Rate/SF

Year 1 Year 2 Year

3$1.61 $1.67 $1.74

Occupancy % 55% 75% 95%

Total Gross Income $1,810,724 $2,512,807 $3,210,405

Operating Expenses/SF $5.50 $5.64 $5.78

$804,266 $824,373Total Operating Expenses $784,560 Net

Operating Income $1,026,074 $1,708,540 $2,386,032

Demographics2016 Summary 1 mile 2 mile 3 mile

Population 26,791 257,946 676,342

Households 7,896 76,804 207,057

Owner Occupied Housing Units 4,905 41,873 114,096

Renter Occupied Housing Units 2,991 34,931 92,060

Median Household Income $68,696 $74,411 $77,859

Trends: 2016-2021 Annual Rate 1 mile 2 mile 3 milePopulation 1.51% 1.19% 1.24%

Households 1.47% 1.14% 1.22%

Median Household Income 2.70% 2.10% 2.16%

Chateau La Salle Mobile Home Park

Lennar at Astoria Townhome style residences

Monterey Rd

Capitol Expy

Hillsdale Ave

Orvieto Apartments New Construction - 92 units

Summer Breeze Apartments

Villa Monterey Apartments

Market SummaryMarket Saturation

Total SF Population Saturation3 Mile 1,230,703 257,946 4.775 Mile 2,645,488 676,342 3.91

LOCATION OVERVIEW

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1 18007 Almaden Apts2 Communication Hill (Phase 1)3 Communication Hill (Phase 2)4 Communications Hill (Balance)5 Metropolitan Apts6 Murano at Montecito Vista7 Orvieto Family/Senior Apts8 Scotia Apartments9 Verona at Montecito Vista10 Vicenza at Montecito Vista

Total Dwelling Units= 2,555

Residential Projects

RESIDENTIAL PROJECTS

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