W a l g r e e n s , O c e a n s i d e C A | 1

Walgreens4 1 8 1 O c e a n s i d e B l v d | O c e a n s i d e , C A

O F F E R I N G M E M O R A N D U M

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SUBJECT PROPERTY

oceanside boulevard

college boulevard

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t r a f f i c c o u n t sOCEANSIDE BOULEVARD... . . .±31,792 ADTCOLLEGE BOULEVARD... . . . . ....±40,116 ADT

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college boulevard

oceanside boulevard

SUBJECT PROPERTYe x c l u s i v e ly l i s t e d b y

k y l e m at t h e w sCHAIRMAN AND CEOBROKER OF RECORD

C A I T L I N Z I R P O L O

e l wa r n e r

ASSOCIATESHOPPING CENTERS

SVP & NATIONAL DIRECTORSHOPPING CENTERS

cai t l in .z i rpolo@matthews.comDIR (949) 432-4518MOB (760) 685-6873LIC # 01987844 (CA)

el .warner@matthews.comDIR (949) 873-0507MOB (858) 752-3078LIC # 01890271 (CA)

kyle.matthews@matthews.comDIR (310) 919-5757MOB (310) 622-3161LIC # 01469842 (CA)

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E X E C U T I V E S U M M A RY

f i n a n c i a l O V E R V I E W

a r e a O V E R V I E W

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WALGREENS4181 Oceanside Blvd

Oceanside, CA 92056

Gross Leasable Area ± 14,319 SF

Lot Size ± 1.19 Acres (51,836 SF)

Year Built 2011

Assessor’s Parcel Number 162-241-18-00

Zoning PD-1

Number of Stories One

Type of Ownership Leased Fee (Improvements owned by Walgreens)

Lease Structure Absolute NNN Ground Lease

Parking ±28 Free Surface Spaces

Parking Ratio* ±2 : 1,000 SF

Rental Increases 10% increases (see lease abstract for details)

Options 10 x 5 yr

• Highly sought after North County San Diego real estate

• Extremely rare 10% increases every 10 years

• More than 18 years remaining on original lease term

• Absolute NNN investment with zero landlord responsibilities

• Unparalleled density with over 141,558 Residents within a 3-mile and 327,171 Residents within a 5-mile radius

• Prime real estate located on the desirable hard corner of College Boulevard and Oceanside Boulevard with an average of ±76,000 VPD

• Strong retail synergy out parceled to a neighborhood shopping center

• Oceanside is the largest city in North County San Diego with a population of over 183,095 people

i n v e s t m e n t h i g h l i g h t s

Matthews Shopping Center Division - West is pleased to present the absolute triple-net (NNN) ground lease sale of Walgreens, located in North County San Diego, city of Oceanside, California. Situated on the hard corner of College Boulevard and Oceanside Boulevard, this asset benefits from its location in a densely populated submarket with strong demographics. This is an excellent opportunity for an investor to acquire an attractive, low risk-asset in the heart of Southern California.

Outparceled to Del Oro Marketplace, this irreplaceable retail location provides an investor a long 18-year lease term with rare 10% rental increases every ten years.

o f f e r i n g s u m m a ry

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*Walgreens customers are permit ted to park in the remainder of the shopping center spaces subject to the CC&Rs.

e x e c u t i v e s u m m a ry

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wa l g r e e n s4181 Oceanside BlvdOceanside, CA 92056

List Price .................................................................................................................$9,500,000

CAP Rate - Current ...........................................................................................................4.21%

Gross Leasable Area .............................................................................................± 14,319 SF

Lot Size ...................................................................................................................± 1.19 Acres

Year Built ............................................................................................................................... 2011

Annualized Operating DataMonthly Rent Annual Rent Rent/SF Increases

Current - 8/31/2020 $33,333.33 $400,000 $2.33

9/1/2020-8/31/2030 $36,666.66 $440,000 $2.56 10%

9/1/2030-8/31/2035 $40,333.33 $484,000 $2.82 10%

Tenant Summary

Tenant Trade Name Walgreen Boots Alliance

Type of Ownership Ground Lease

Lease Guarantor Walgreen Boots Alliance

Lease Type NNN

Rent Commencement Date 9/1/2010

Lease Expiration Date 8/31/2035

Increases 10% increases

Options 10 x 5 yr

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l e a s e a b s t r a c t

Landlord Del Oro Wal G LLC, A Delaware Limited Liability Co

Tenant: Walgreen Co.

Guarantor: Walgreen Co.

Address: 4181 Oceanside Blvd, Oceanside, CA 92056

Size: ±14,319

Ownership type: Leased Fee

Date of Lease: 6/1/2009

Rent Commencement: 9/1/2010

Lease Expiration: 8/31/2035

Remaining Renewal Options: 10 x 5 yr

Required Advance Notice of Exercise Options:

If Tenant shall elect to exercise any such termination option, Tenant shall send written notice thereof to Landlord, at least twelve (12) months prior to the effective date of such termination, but no notice shall be required to terminate this Lease upon the expiration of the Term

Current Rent: $400,000

Rent Increases:

Primary Term:9/1/2020: $440,0009/1/2030: $484,000

Option Periods:

Option 1 (9/1/2035): same rent as previous termOption 2 (9/1/2040): $532,400

Option 3 (9/1/2045): same rent as previous termOption 4 (9/1/2050): increase @ FMV

Option 5 (9/1/2055): same rent as previous termOption 6 (9/1/2060): same rent as previous term

Option 7 (9/1/2065): increase @ FMVOption 8 (9/1/2070): same rent as previous termOption 9 (9/1/2075): same rent as previous term

Option 10 (9/1/2080): increase @ FMV

Net Lease:This Lease is a triple net ground lease. Tenant is responsible for all repairs and maintenance to the Property and Improvements. Tenant is

responsible for the payment of Taxes, Utilities, and Insurance.

Real Estate Taxes:Tenant will pay all taxes, assessments, water, sewer or other rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and similar taxes with

respect to the property.

Repairs and Maintenance:Tenant shall, at Tenant's sole cost and expense, maintain and repair all portions of the Building, including all appurtenant improvements, service, loading and delivery areas, sidewalks, ramps, any drive-through area and related improvements, and all improvement within the perimeter sidewalk (including curbs) around the Building

(collectively, the "Building Area"), in good condition and repair and in a manner consistent with Tenant's other stores in San Diego, California.

Alterations and Conditions: Tenant at its expense may make reasonable alterations of and additions to the Improvements or any part thereof subject to certain conditions.

Insurance: Tenant at its expense shall maintain insurance.

Utilities:Tenant shall pay when due all bills for water, sewer rents, sewer charges, heat, gas and electricity and all other utilities and related services, and trash and refuse

removal, used in the Leased Premises from the Possession Date until expiration of the Term

Tenant Assignment and Subletting: Tenant may assign or sublet the lease without Landlord consent. Tenant to remain liable.

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SUBJECT PROPERTY

carlsbad

oceanside boulevard

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SUBJECT PROPERTY oceanside boulevard

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wa l g r e e n s

The nation’s #1 drugstore chain, Walgreens, operates close to 8,300 stores in all 50 US states, the District of Columbia, the Virgin Islands, and Puerto Rico. Prescription drugs are the focus as they account for close to two-thirds of sales with the rest coming from general merchandise, over-the-counter medications, cosmetics and groceries. Most locations offer drive-through pharmacies and one-hour photo processing, which separates them from competition. Recently, Walgreens fully acquired Alliance Boots, Europe’s leading drug wholesaler, to create Walgreens Boots Alliance.

WALGREENS HEALTH FOCUSWalgreens’ overall value proposition differentiates it from competitors in valuable ways. Reducing the shopping time by putting health at the forefront of all aspects of the business places Walgreens in a league of their own as competition aims their focus on things such as convenience, design, or low prices. Walgreens’ focus on health gives them a competitive advantage.

MARKETING STRATEGYWalgreens focuses on customer need and satisfaction. For example, curbside pick-up stemmed from the need of their customers who are busy working mothers who don’t have the time to go into the store, pick out what they need, and check out. Loyalty is a priority as it turns into return visits as well as more money spent by customers.

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Company Name Walgreens Boots Alliance

No. of Locations 8,300

No. of Employees 253,400

Headquartered Deerfield, IL

Website www.walgreens.com

Year Found 1909

Stock Symbol WBA

Market Cap 92.06B

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Oceanside Blvd ± 31,792

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t h e o f f e r i n g

Property Name Walgreens

Property Address 4181 Oceanside Blvd

Oceanside, CA 92056

Assessor’s Parcel Number 162-241-18-00

Zoning PD-1

Site DescriptionNumber of Stories One

Year Built 2011

Gross Leasable Area (GLA) ± 14,319 SF

Lot Size ± 1.19 Acres (51,836 SF)

Type of OwnershipLeased Fee

(Improvements Owned by Walgreens)

Lease Structure Absolute NNN Ground Lease

Parking ±28 free Surface Spaces

Parking Ratio1 ±2.00 : 1,000 SF

pa r c e l m a p

*Walgreens customers are permit ted to park in the remainder of the shopping center spaces subject to the CC&Rs.

W a l g r e e n s , O c e a n s i d e C A | 1 3

college boulevard

oceanside boulevard

SUBJECT PROPERTY

b i r d ’ s e y e a e r i a l

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Oceanside, commonly known as San Diego’s North Shore, is a classic beach city that allows people to escape the hustle and bustle of city life. If the consistent 70-degree year-round weather wasn’t enough, Oceanside is central to LEGOLAND, SeaWorld, Disneyland and the San Diego Zoo, making the city a prime tourist destination. USA Today rated the city as the second most ideal climate in the United States, and the fifth most ideal in the world.

The beautiful weather makes Oceanside a great location for shooting films. Many may recognize the city from popular movies such as Top Gun, Almost Famous, Freaky Friday, Bring It On, Bruce Almighty and Anchorman. Additionally, every year Oceanside is home to several events that draw in even more people than usual. From live music to surf competitions, there is always a reason to visit Oceanside.

o c e a n s i d e , c a l i f o r n i a

o c e a n s i d e d e m o g r a p h i c s

POPULATION 3 Mile 5 Mile 10 Mile

2021 Projection 148,629 327,171 601,769

2016 Estimate 141,558 309,863 564,007

2010 Census 134,034 290,338 518,634

2000 Census 127,838 273,729 452,314

Growth 2016 - 2021 4.99% 5.59% 6.70%

HOUSEHOLDS 3 Mile 5 Mile 10 Mile

2021 Projection 49,922 112,042 205,228

2016 Estimate 47,425 106,071 192,436

Growth 2016 - 2021 5.26% 5.63% 6.65%

INCOME 3 Mile 5 Mile 10 Mile

2016 Est. Average Household Income

$74,010 $77,433 $86,252

a r e a o v e r v i e w

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E c o n o m i c D e v e l o p m e n t

The mission of Oceanside’s Economic Development is to ensure the financial stability of the city by assisting users, developers, and brokers with business relocation, business expansion and improvements that create new employment opportunities and increase investment in the city and make Oceanside a regional visitor’s destination.

Historically, the top industries in Oceanside are manufacturing distribution, tourism and agriculture but recently the biotech industry has been among the area’s fastest growing business sectors. With an average of 266 sunny days per year, it’s no wonder Oceanside is a premier tourist destination. The array of outdoor recreational activities, great food and easy access to the beach brings in 34.4 million visitors each year to the San Diego metropolitan area.

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s a n d i e g o d e m o g r a p h i c sPOPULATION 3 Mile 5 Mile 10 Mile

2021 Projection 150,744 329,497 601,210

2016 Estimate 143,541 312,133 563,482

2010 Census 135,868 292,576 518,145

2000 Census 129,505 276,511 451,898

Growth 2016 - 2021 5.02% 5.56% 6.70%

HOUSEHOLDS 3 Mile 5 Mile 10 Mile

2021 Projection 50,717 113,090 205,021

2016 Estimate 48,169 107,058 192,240

2010 Census 45,419 100,421 177,873

2000 Census 43,562 94,761 155,503

Growth 2016 - 2021 5.29% 5.63% 6.65%

Growth 2010 - 2016 6.06% 6.61% 8.08%

INCOME 3 Mile 5 Mile 10 Mile

2016 Est. Average Household Income

$73,862 $77,127 $86,268

s a n d i e g o c o u n t yOceanside is apart of the San Diego County which is a county located in the southwestern corner of the state of California, in the United States. With a population of 3,095,313 San Diego County is the second-most populous county in California and the fifth-most populous in the United States. Most of the county has a mild Mediterranean climate to semiarid climate, though there are mountains that receive frost and snow in the wintertime.

Tourism plays a large part in the economics of the San Diego metropolitan area. Tourists are drawn to the region for a well-rounded experience, everything from shopping to surfing as well as its mild climate. Its numerous tourist destinations include Horton Plaza, Westfield UTC, Seaport Village, Westfield Mission Valley and Fashion Valley Mall for shopping. SeaWorld San Diego and LEGOLAND California as amusement parks.

3 MILES

5 MILES

10 MILES

SUBJECT PROPERTY

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BALBOA PARK

Just minutes from Downtown San Diego, Balboa Park is the nation’s largest urban cultural park. The 1,200-acre park contains gardens, museums, theaters, restaurants and recreational facilities, and sees over 6 million visitors annually.

SAN DIEGO ZOO

HOTEL DEL CORONADO

The San Diego zoo houses over 3,700 animals and more than 650 species. A pioneer in the concept of open-air, cage-less exhibits that re-create natural animal habitats, the Zoo has the largest zoological membership association in the world, representing more than a half-million people.

Hotel del Coronado is a historic beach-front hotel in the city of Coronado, just across the San Diego Bay. It is one of the few surviving examples of the wooden Victorian beach resort. It is the second largest wooden structure in the US, and has hosted presidents, royalty, and celebrities through the years.

QUALCOMM STADIUM

SEAPORT VILLAGE

LEGOLAND

p o i n t s o f i n t e r e s t

Qualcomm Stadium is a multi-purpose stadium, home of the San Diego Chargers and the San Diego State Aztecs football team. Located on the interchange of Interstate 8 & 15, the stadium has a capacity of 70,560 and has hosted three super bowl games.

The link between San Diego Bay and the city’s downtown core, Seaport Village is a 14 acre waterfront shopping, dining and entertainment complex. Seaport Village includes more than 70 shops, galleries and eateries, and is in close proximity to local hotels, the airport and cruise ship terminal.

Legoland California is a theme park, miniature park, and aquarium located in Carlsbad, California, based on the Lego toy brand. tt was the third Legoland park to open, and the first outside of Europe. Legoland is home to more than 60 rides and sees over 1.4 million visitors per year.

SEAWORLD

SeaWorld is a marine mammal park, oceanarium, and animal theme park, and hosts about 4 million visitors per year. Seaworld is also renowned for conducting research on marine biology and providing education and outreach on marine issues to the general public.

GASLAMP QUARTER

TORREY PINES GOLF COURSE

The Gaslamp Quarter is a 16½ block historical neighborhood in Downtown San Diego, and is the site of several entertainment and night life venues, as well as scheduled events and festivals. It includes 94 historic buildings that are still in use with active tenants including restaurants, shops and nightclubs.

Torrey Pines Golf Course is a 36-hole municipal public golf course that sits on the coastal cliffs overlooking the Pacific Ocean. The course has a unique method to ensure continued public access to the course, and has hosted several championship tournaments.

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Being only 3 miles from downtown San Diego, this airport is easily accessible. San Diego International Airport is ranked as the 4th best airport in North America. Within the airport, guests will find over 80 shops and restaurants to occupy their time before their flights. Many of the food vendors showcase San Diego’s craft beers and delicious seafood.

The Metropolitan Transit System (MTS) offers quick transportation to locations all over San Diego such as Downtown San Diego, Fashion Valley and Mission Viejo. This is especially popular among college students as the MTS takes students from San Diego State University to Qualcomm Stadium where the SDSU Aztec football team plays.

AMTRAK offers rail services running out of three locations in San Diego; Old Town, Downtown San Diego, and Sorrento Valley. The popular Pacific Surfliner takes passengers up the coast of California from San Diego to Orange County, Los Angeles, Santa Barbra and San Luis Obispo.

g e t t i n g a r o u n d

San Diego International Airport

San Diego MTS

AMTRAK

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Walgreens located at 4181 Oceanside Blvd, Oceanside, CA 92056-6035 (“Property”) . I t has been prepared by Matthews Real Estate Investment Services. This Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property. I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Real Estate Investment Services. The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the Property, you agree:

1 . The Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion or manner detr imental to the interest of the Sel ler.

Owner and Matthews Real Estate Investment Services expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Offer ing Memorandum.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Real Estate Investment Services or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Offer ing Memorandum.

C O N F I D E N T I A L I T Y & D I S C L A I M E R S TAT E M E N T

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Walgreens4 1 8 1 O c e a n s i d e B l v d | O c e a n s i d e , C A

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C A I T L I N Z I R P O L OASSOCIATESHOPPING CENTERScai t l in .z i rpolo@matthews.comDIR (949) 432-4518MOB (760) 685-6873LIC # 01987844 (CA)

e l wa r n e rSVP & NATIONAL DIRECTORSHOPPING CENTERSel .warner@matthews.comDIR (949) 873-0507MOB (858) 752-3078LIC # 01890271 (CA)

k y l e m at t h e w sCHAIRMAN AND CEOBROKER OF RECORD

kyle.matthews@matthews.comDIR (310) 919-5757MOB (310) 622-3161LIC # 01469842 (CA)