CURTIS BROWN SHAWN DOOLEYPrincipal Associate(480) 362-9501 (480) 362-9526cbrown@rossbrown.com sdooley@rossbrown.com

8925 E. Pima Center Parkway Suite 200

Scottsdale, Arizona 85258www.rossbrown.com | 480.362.9500

OFFERING MEMORANDUM

8454 N. 90th Street | Scottsdale, Arizona 85258

KYLE MCGINLEYAssociate(480) 362-9507kmcginley@rossbrown.com

101

10

17

17 143

51

101

202

60

10

100% Leased Office Building For Sale

MARKET/LOCATION OVERVIEW

Pima Center is a 232 Acre mixed-use business park located in North Scottsdale. It is bounded by Via De Ventura to the South, Pima Road to the West, and the Loop-101 Freeway to the East and North. Currently there are 1.3 Million Square Feet of developed office, flex, industrial, medical, and retail product with an overall occupancy rate of 98%. Pima Center Phase III, a 150,000 SF industrial/flex project, is currently in development, delivering in 2017, as well as approximately 100,000 SF of future retail and hospitality developments, named The Block at Pima Center. Pima Center is home to numerous major tenants including Nationwide Insurance, Rural Metro, First American Title Company, Plexus Worldwide, Stryker Orthopaedics, and FireTrace.

PIMA CENTER

Strong Job Growth[1]

• Total employment: 1,926,200 (Total Nonfarm)• Jobs gained: 42,900[2]

• Current year over year % change: +3.1%[2] • Previous year over year % change: +2.4%[3] Office Market[4] • Total Inventory: 169.2 million Square Feet (SF)• Vacancy: 25.5 million SF (15.1%)• Rate of Absorption: 1.2 million SF[5] • Deliveries: 1.19 million SF• Under Construction: 1.04 million SF

PHOENIX MSA

SCOTTSDALEA steadily increasing rate of job growth in the Phoenix MSA has created sufficient demand to seriously rebalance the dynamic in the office leasing market. This is increasingly apparent in the Scottsdale submarket, as the vacany rate for Class A and B office has dropped precipitously from 25% to 14.4% since 2011. As the inventory pool continues to shrink and the production costs associated with high quality buildings designed for small/medium sized tenants remains high, the 10% increase in asking rates observed over the past 24 months is a trend likely to continue.

Notes: [1] Data provided by the Arizona Department of Administration-Employment and Population Statistics [2] Trailing 12 months, August 2015 – August 2016 [3] Between the months of August 2014 – August 2015 [4] Data Provided by CoStar, Inc. [5] Average net absorption based on the trailing 6 months. (April 2016 – September 2016)

Via De Ventura

Pima RoadPhase III

Delivering Q2 2017

Subject Property

The Block at Pima Center

SURROUNDING AMENITIES

Via De Ventura

Pima R

oad

Indian Bend Road

Dobs

on R

oad

North

Paradise Valley

North Scottsdale

Scottsdale Airpark

Tempe

Scottsdale HealthcareShea Campus

Gainey Ranch

Scottsdale Fiesta Shopping Center

INVESTMENT SUMMARYEXECUTIVE SUMMARY

Property: Single Tenant Suburban Office Building

Address: 8454 N. 90th Street | Scottsdale, Arizona 85258

Building Size: ±21,400 SF

Land Size: ±1.67 Net Acres

Year Built: 2005

Remaining Lease Term: 7 Years 8 Months (as of 12/20/2016)

Tenant Improvements: 100% Air Conditioned Drop Ceiling Office

Parking: 90 Total Spaces (4.2:1000)

Occupancy: 100%

Zoning: C-R

Construction: Masonry

Ground Lease: 72 Years Remaining | Expires 8/28/2088

INVESTMENT SUMMARY

LEASE SUMMARY

Tenant: Security Alarm Finance Enterprises, LP d.b.a. Safeguard Security

Lease Commencement:August 20, 2014(Tenant has occupied building since 11/10/2008)

Lease Expiration: August 20, 2024

Lease Type: Modified Gross (Tenant Pays Utilities & Janitorial)

OFFERING TERMS

Price: $4,250,000

Price PSF: $198.60/SF

Cap Rate: 7.8%

Net Operating Income: $331,421

RENT SCHEDULETerm Period Base Rent Period Rent

8/20/2014-8/20/2019

Years 1-5 $21.00/SF $2,247,000

Extension PeriodYears 6-10

$22.00/SFwith $0.60 annual increases

8/21/2019-8/20/2024

$2,482,400

INVESTMENT SUMMARYFINANCIAL ANALYSIS

Purchase Price Loan Amount 2,975,000$ LTV Down Payment 1,275,000$ Interest Rate 4.75% Annual Debt Service ($203,532)Amortization 25 Debt Coverage Ratio 1.63

1 2 3 4 5 6 7 82016-2017 2017-2018 2019-2020 2020-2021 2021-2022 2022-2023 2023-2024 2024

21.00$ 21.00$ 21.00$ 22.00$ 22.60$ 23.20$ 23.80$ 24.40$ 22.38$ 449,400 449,400 449,400 470,800 483,640 496,480 509,320 522,160 478,825

(117,979) (117,979) (117,979) (117,979) (117,979) (117,979) (117,979) (117,979) (117,979) 331,421$ 331,421$ 331,421$ 352,821$ 365,661$ 378,501$ 391,341$ 404,181$ 360,846$

(203,532) (203,532) (203,532) (203,532) (203,532) (203,532) (203,532) (203,532) - 127,889$ 127,889$ 127,889$ 149,289$ 162,129$ 174,969$ 187,809$ 200,649$ 157,314$

10.0% 10.0% 10.0% 11.7% 12.7% 13.7% 14.7% 15.7% 12.3%63,592 66,679 69,916 73,311 76,870 80,602 84,515 88,618

191,481$ 194,568$ 197,805$ 222,600$ 238,999$ 255,571$ 272,324$ 289,267$ 232,827$ 15.0% 15.3% 15.5% 17.5% 18.7% 20.0% 21.4% 22.7% 18.3%

7.8% 7.8% 7.8% 8.3% 8.6% 8.9% 9.2% 9.5% 8.5%

Notes: [1]

Budgeted $/SF3,068$ 0.14$

55,566 2.60$ 7,984 0.37$ 1,500 0.07$ 1,800 0.08$ 6,358 0.30$ 2,000 0.09$

13,482 0.63$ 26,221 1.23$

117,979$ 5.51$ TOTAL OPERATING EXPENSE

Income and Expense Analysis

Average

Expense CategoryReal Estate InsuranceReal Estate TaxLandscaping & PestParking LotRoof - Repair/Maint.Building Repair/Maint.Fire Life SystemManagementLand Rent

Cash FlowCash on Cash Return

Net IncomeLess Debt Service

Total Return %

OPERATING EXPENSES

Two months of abated rent remain - 1/2017 (Income reduction of $17,833.33) & 2/2018 (income reduction of $18,903.33)

Principal RecapturedTotal Return

Unleveraged Cash on Cash

INCOME STREAM/LEVERAGED RETURN

Rate (Modified Gross)Annual Base RentLess Operating Expense[1]

Year (August)

70%

PROJECTED LOAN ASSUMPTIONS4,250,000$

9%10%11%12%13%14%15%16%17%

$300,000

$325,000

$350,000

$375,000

$400,000

$425,000

1 2 3 4 5 6 7 8

Perc

enta

ge

Dolla

r Am

ount

Lease Year

Net Income Cash on Cash Return

TENANT BACKGROUND

Safeguard Security has been protecting Arizona families and businesses for over 50 years. Prior to their 2014 acquisition, Safeguard was Arizona’s largest family-owned, locally-operated security provider. Safeguard is currently ranked A+ by the Better Business Bureau and continues to provide exemplary security services to residential and commercial customers.

With a staff of over 380+ employees, Safeguard offers unmatched expertise and experience to their Clientele. They require drug screening and polygraph tests to ensure the integrity and security they provide. Operating one of the Valley’s largest Mobile Patrol Operations, Safeguard offers a patrol officer response to alarms within designated areas.

Safeguard’s headquarters operations housed within this building include Mission Critical 24-hour monitoring and call center response, dispatching, accounting and administration, executive offices, CAD design and drafting, repair services, and support. Currently, Safeguard Security services 25,000+ customers with approximately $1,500,000 in recurring monthly revenue.

SAFEGUARD SECURITY

SAFE Security acquired Safeguard Security in 2014. Since 1988, SAFE Security has provided quality security alarm systems, industry-leading monitoring services, excellence in residential and commercial support, and growth strategies and state-of-the-art business services for independent alarm dealers across the nation. SAFE Security is headquartered in San Ramon, California.

SAFE SECURITY

BUILDING FEATURES

The information contained herein has either been given to us by the owner of the property or obtained from sources that we deem reliable. No warranties or representations, expressed or implied, are made as to the accuracy of the information contained herein.

SINGLE-TENANT SIMPLICITY WITH MULTI-TENANT FLEXIBILITYAlthough this building is currently 100% occupied by a single tenant, it was originally designed to accommodate multiple tenants. That means that this building can easily be sub-divided into four 5,000 SF suites, two 10,000 SF suites or any combination thereof. This gives the Investor future flexibility to meet market demand when needed. Inventory for space 10,000 and below continues to drop and new inventory in that size range will not be created until rental rates reach above $30.00/SF.

PIMA CENTER - OUTPERFORMING THE MARKETLocated at the south end of North Scottsdale, Pima Center continues to outperform the surrounding submarket year after year. Currently, Pima Center’s 1.3 Million SF of Class A Office, Suburban Office, Medical Office, Flex, and Assembly/Distribution Warehouse are 98% leased, with new Industrial, Retail, and Hospitality projects imminent. A major driving factor of this success is Pima Center’s location right along the Loop-101 Freeway, providing superior ingress/egress with two full diamond interchanges at each corner of the business park. This provides executives and business owners a short commute from North Scottsdale and Paradise Valley as well as easy access for employees traveling from South Scottsdale, Tempe, and the East Valley. Pima Center is also enriched by a thriving surrounding entertainment district, including OdySea Aquarium, Butterfly Pavilion, TopGolf, iFly (Indoor Skydiving), Salt River Fields, and Talking Stick Resort and Casino.

BUILDING COMPOSITIONDue to security measures in place by existing tenant, we are only able to provide a floor plan after prospective buyer has executed a Non-Disclosure Agreement. Please contact us for more information.Building composition is described as follows:• Reception Area with Built-In Desk• 31 Private Offices• Demo/Showroom• 6 Open Office/Bull Pen Areas• Large Board/Conference Room• 3 Conference Rooms• 1 Open Breakout/Conference Area • Large Secure Monitoring/Operations Room• Server Room• Small IT Closet

• Large Plotting/Drafting Group Office• 3 Storage Closets• 1 Janitorial Closet• 2 Electrical Rooms• Large Lunch Room• Wet Breakroom/Kitchen• 1 Small Open Break Area• Large Copy Room• 3 Restrooms