Extra Space Storage (An Extra Space Storage 3Rd Party Managed Project) Confidential Offering Memorandum 5878 Silver Creek Valley Rd, San Jose, California

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SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno

Edenvale Self-Storage Development Opportunity

Extra Space Storage (an Extra Space Storage 3rd Party Managed project) Confidential Offering Memorandum 5878 Silver Creek Valley Rd, San Jose, California

CONTENTS

Investment Overview Offering Procedures Site Description Gross Potential Rent 10-Year Projections Unit Mix Project Rendering Completed Grading Photos Demographics Competition Map & Details

5878 Silver Creek Valley Rd SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno

INVESTMENT OVERVIEW

EDENVALE SELF STORAGE is an opportunity to build a PERMIT READY self-storage project within an underserved area within the San Jose, California MSA. With under two square feet of supply per capita within a 3-mile radius and very limited supply (with an estimated net shortage of approximately 330,000 rentable SF) to the south or east, this is an excellent opportunity to build a new, class A, multi-story, climate controlled facility within San Jose, “The Capital of Silicon Valley”.

The fully permitted project allows for a minimum of 149,270 SF gross building size with a proposed rentable area of 99,998 SF. The site located at 5878 Silver Creek Valley Rd in South San Jose is 2.863 acres, at the intersection of Hellyer Ave and Silver Creek Valley Rd.

Based on the permitted design with 99,998 NRSF year 4 stabilized NOI is estimated at $2,319,564 , offering an implied value of $46,000,000 (5.0% CAP rate).

PROJECT STATUS: As of October 2019, the Building permit is ready for pick-up. As of October 2019, the City Development Agreement has been executed. Bonds purchased and provided to the City. Grading is complete on Building 2 and ready to dig footings. Building 1 is a few days from the pad being ready for footing excavation. Of the total 18” of select import ma- terial, about 15” has been placed. Final topping to occur when job starts. (Grading risk has past). SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno

OFFERING PROCEDURES

This property is being offered for sale as a permit-ready project, with permits ready for pick- up at the City of San Jose planning department. Detailed financial projections, building plans, environmental reports and other due diligence materials will be made available upon receipt of signed NDA Agreement.

Offers Considered as Submitted Offers should be addressed to: AG Key, LLC c/o Tom de Jong Colliers International Via email to: [email protected] (408) 282-3829

Offers to be presented in Letter of Intent (LOI) form and include: · Offered price · Earnest Money Deposit · Due Diligence Time Period · Closing Period · Buyer Source of Funds and/or Qualifications

SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno

SITE DESCRIPTION INVESTMENT HIGHLIGHTS • Professionaly managed by Extra Space Storage • LEED Silver Permit Ready projects, with permits at City of San Jose planning department • Class A investment opportunity with 99,998 NRSF in 1,114 units including 99 wine storage lockers • Projected stabilized NOI of $2,319,564 • 50% climate controlled units • 99 wine storage lockers • 1.60 SF/capita total supply in 3-mile submarket trade area (Yardi Matrix 2/10/2020) • At intersection of Silver Creek Valley Blvd and Hellyer Ave in South San Jose 5878 Silver Creek Valley Rd, San Jose, California General (Previous address: 5880 Hellyer Avenue) Year1 Year2 Year3 Year4

Status Permits ready for pick-up at City of San Jose as of October 2019 Average Rental Rate/SF $2.52 $2.64 $2.77 $2.91

County Santa Clara County, CA Rental Rate projections - 5.00% 5.00% 5.00%

Tax Lot APN 678-93-041 (portion of) Economic Occupancy % 24.6% 48.5% 73.3% 83.7%

Parcel Size 2.863 Acres Effective Gross Income $757,266 $1,569,750 $2,488,141 $2,982,629

Owner AG KEY, LLC Total Operating Expenses $490,636 $551,991 $620,060 $663,064

Net Operating Income $266,630 $1,017,759 $1,868,081 $2,319,564 PROJECT DETAILS

93.5% Climate Controlled Conversion 1,114 units 99,998 NRSF DEMOGRAPHICS Wine Storage 99 units 1,687 NRSF 3 mile population 131,902 Trade Area Rents per Yardi Matrix $2.30 (Feb. 2020) Population Growth (2016-2021) 4.70%

Weighted Average Rental Rates $2.52 (CC) Est. SF/Capita (3-mile) - TOTAL <1.60

Est. SF/Capita (3-mile) - CLIMATE CONTROLLED <1.00

Traffic Count (AADT) 12,600

Household Income (3-mile) $116,926 SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno

GROSS POTENTIAL RENT - STORAGE

Year 1 Projected Year 2 Projected Year 3 Projected Year 4 Projected Gross Potential Rent - STORAGE $3,019,349 $3,170,316 $3,328,832 $3,495,274 PROJECTED RENTAL RATE GROWTH 5.0% 5.0% 5.0% Vacancy (PROJECTED VACANCY OF 11% YEAR 4) $(2,173,931) $(1,458,345) $(632,478) $(384,480) Discounts / Concessions / Write-Offs (6% at stabilization) $(103,000) $(173,000) $(257,000) $(186,648) Net Storage Income $742,418 $1,538,971 $2,439,354 $2,924,146 Credit Loss $(22,273) $(46,169) $(73,181) $(87,724) Income Miscellaneous Income / Fees / Retail $37,121 $76,949 $121,968 $146,207 Total Miscellaneous Income $14,848 $30,779 $48,787 $58,483 Total Effective Gross Revenue $757,266 $1,569,750 $2,488,141 $2,982,629

Payroll $130,000 $133,900 $137,917 $142,055 Management Fee $45,436 $94,185 $149,288 $178,958 Advertising $42,000 $43,260 $44,558 $45,895 Utilities $48,000 $49,440 $50,923 $52,451 Office and Employee $8,400 $8,652 $8,912 $9,179 Admin Expenses $8,400 $8,652 $8,912 $9,179 Repairs & Maintenance $26,000 $26,780 $27,583 $28,411 Other $2,400 $2,472 $2,546 $2,623 Taxes $150,000 $153,750 $157,594 $161,534 Property Insurance $30,000 $30,900 $31,827 $32,782 Operating Expenses Operating Total Operating Expenses $490,636 $551,991 $620,060 $663,064 Net Operating Income $266,630 $1,017,759 $1,868,081 $2,319,564 SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno

10-YEAR PROJECTIONS - STORAGE

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Gross Potential Rent - STORAGE $3,019,349 $3,170,316 $3,328,832 $3,495,274 $3,582,655 $3,672,222 $3,764,027 $3,858,128 $3,954,581 $4,053,446 REIS PROJECTED RENTAL RATE GROWTH 5.0% 5.0% 5.0% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% Vacancy (PROJECTED VACANCY OF 11% YEAR 4) $(2,173,931) $(1,458,345) $(632,478) $(384,480) $(358,266) $(367,222) $(376,403) $(385,813) $(395,458) $(405,345) Discount / Concession / Write-Off (6% at stabilization) $(103,000) $(173,000) $(257,000) $(186,648) $(193,463) $(198,300) $(203,257) $(208,339) $(213,547) $(218,886) Net Storage Income $742,418 $1,538,971 $2,439,354 $2,924,146 $3,030,926 $3,106,700 $3,184,367 $3,263,976 $3,345,576 $3,429,215 Credit Loss $(22,273) $(46,169) $(73,181) $(87,724) $(90,928) $(93,201) $(95,531) $(97,919) $(100,367) $(102,876) Income Other Miscellaneous $37,121 $76,949 $121,968 $146,207 $151,546 $155,335 $159,218 $163,199 $167,279 $171,461 Total Miscellaneous Income $14,848 $30,779 $48,787 $58,483 $60,619 $62,134 $63,687 $65,280 $66,912 $68,584 Total Effective Gross Revenue $757,266 $1,569,750 $2,488,141 $2,982,629 $3,091,545 $3,168,834 $3,248,054 $3,329,256 $3,412,487 $3,497,799

Payroll $130,000 $133,900 $137,917 $142,055 $146,316 $150,706 $155,227 $159,884 $164,680 $169,621 Management Fee $45,436 $94,185 $149,288 $178,958 $185,493 $190,130 $194,883 $199,755 $204,749 $209,868 Advertising $42,000 $43,260 $44,558 $45,895 $47,271 $48,690 $50,150 $51,655 $53,204 $54,800 Utilities $48,000 $49,440 $50,923 $52,451 $54,024 $55,645 $57,315 $59,034 $60,805 $62,629 Office and Employee $8,400 $8,652 $8,912 $9,179 $9,454 $9,738 $10,030 $10,331 $10,641 $10,960 Admin Expenses $8,400 $8,652 $8,912 $9,179 $9,454 $9,738 $10,030 $10,331 $10,641 $10,960 Repairs & Maintenance $26,000 $26,780 $27,583 $28,411 $29,263 $30,141 $31,045 $31,977 $32,936 $33,924 Other $2,400 $2,472 $2,546 $2,623 $2,701 $2,782 $2,866 $2,952 $3,040 $3,131 Taxes $150,000 $153,750 $157,594 $161,534 $165,572 $169,711 $173,954 $178,303 $182,760 $187,329 Property Insurance $30,000 $30,900 $31,827 $32,782 $33,765 $34,778 $35,822 $36,896 $38,003 $39,143 Operating Expenses Operating Total Operating Expenses $490,636 $551,991 $620,060 $663,064 $683,315 $702,059 $721,322 $741,117 $761,460 $782,366 Net Operating Income $266,630 $1,017,759 $1,868,081 $2,319,564 $2,408,230 $2,466,775 $2,526,733 $2,588,139 $2,651,027 $2,715,433 SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno

UNIT MIX

Unit Mix # Units Total SF Unit Price $/SF Total 5 x 5 13 325 $99 $3.95 $1,284 5 x 10 13 650 $188 $3.75 $2,438 MAIN LEVEL / CC 10 x 10 21 2,100 $275 $2.75 $5,775 10 x 15 2 300 $368 $2.45 $735

5 x 5 41 1,025 $91 $3.65 $3,741 5 x 10 173 8,650 $173 $3.45 $29,843 ELEVATOR / CC 10 x 10 222 22,200 $245 $2.45 $54,390 10 x 15 84 12,600 $323 $2.15 $27,090

5 x 5 23 575 $94 $3.75 $2,156 5 x 10 59 2,950 $173 $3.45 $10,178 10 x 10 90 9,000 $250 $2.50 $22,500 MAIN LEVEL / NCC 10 x 15 21 3,150 $338 $2.25 $7,088 10 x 20 8 1,600 $390 $1.95 $3,120

5 x 5 9 225 $75 $3.00 $675 5 x 10 16 800 $113 $2.25 $1,800 ELEVATOR / NCC 10 x 10 29 2,900 $175 $1.75 $5,075 10 x 15 6 900 $225 $1.50 $1,350

10 x 20 14 2,800 $400 $2.00 $5,600 10 x 25 48 12,000 $463 $1.85 $22,200 DRIVE-UP / NCC 10 x 30 13 3,900 $495 $1.65 $6,435

<35 SF 8 264 $116 $3.50 $924 36 - 101 SF 59 3,835 $205 $3.15 $12,080 ODD SHAPED MISC 102 - 165 SF 36 4,176 $319 $2.75 $11,484 166 + SF 7 1,386 $396 $2.00 $2,772

17 SF Average 99 1,687 $110 $6.45 $10,881 WINE STORAGE Totals: 1,114 99,998 - $2.52 $251,612 SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno

EDENVALE SELF STORAGE RENDERING SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno

SITE PHOTOS

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Subject Property (1) 1 Edenvale Self Storage 2 Public Storage 3 Bay Area Self Storage (2) 4 Central Self Storage SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno

DEMOGRAPHICS The City of San Jose, California, also known as “The Capital of Silicon Valley”, with a population of just over one million residents, is the 10th largest city in the United States and the 3rd largest city in the State of California (after Los Angeles and San Diego). The City of San Jose is the economic, cultural and political center of Silicon Valley and the largest city in Northern California, both by population and by geographic area, covering a total of 179.97 square miles.

San Jose is the county seat of Santa Clara County, the most affluent county in California and one of the most affluent counties in the United States. San Jose is a global city, notable as a center of innovation, for its affluence, Mediterranean climate, and extremely high cost of living. The San Jose Metropolitan Area has the most millionaires and the most billionaires in the United States per capita. With a median home price of $1,085,000, San Jose has the most expensive housing market in the country and the fifth most expensive housing market in the world.

Major global tech companies including Cisco Systems, eBay, Adobe Systems, PayPal, Broadcom, Samsung, Acer, Hewlett Packard Enterprise, and Western Digital maintain their headquarters in San Jose, in the center of Silicon Valley. San Jose is also home to the NHL San Jose Sharks, MLS San Jose Earthquakes and several mino league teams.

The San Jose International Airport is the 3rd largest airport in the San Francisco Bay Area after San Francisco International Airport and the Oakland Airport, covering flights to points across the world. SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno

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Subject Property (1) Address Est. SF Rating Distance 5x5 (CC if avail) 5x10 (CC if avail) 10x10 (CC if avail) 10x15 (CC if avail) 10x20 (CC if avail) 1 Edenvale Self Storage 5878 Silver Creek Valley Rd 99,998 A 0 $3.75 $3.00 $2.50 $2.25 $2.00 2 Public Storage 88 Blossom Hill Rd 100,499 B 1.42 $4.08 $2.24 $3.17 $2.00 $2.20 3 Bay Area Self Storage (2) 6020 Monterey Rd 62,410 B 1.59 $4.32 $3.26 $2.51 $1.96 4 Central Self Storage 6880 Sant Teresa Blvd 68,705 B 2.22 $3.20 $1.58 $2.22 Market Averages 331,612 $3.84 $2.52 $2.60 $2.13 $2.05

(1) Data provided by YARDI Matrix on February 18, 2020 (survey rental rates December 2019 and January 2020) (2) Phone survey on 2/18/2020, spoke to Wendy at 408-471-2522

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For property related questions please contact Tom de Jong: Tom de Jong Jack Suski Senior Vice President Associate +1 408 282 3829 +1 510 433 5837 Colliers International [email protected] [email protected] 5520 Kietzke Lane, Suite 300 CA License #01889017 CA License #02032811 Reno, NV 89511 This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested P: +1 775 823 9666 party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, condi- tions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s). ©2020. All rights reserved.