offering memorandum

FOR SALE 100% leased office / flex / r&d building FREEWAY CORPORATE CENTER 19621 NORTH 23RD DRIVE Phoenix, AZ

2415 EAST CAMELBACK ROAD | PHOENIX, 85016 | T 602.735.5555 | WWW.CBRE.COM Affiliated Business Disclosure 19621 NORTH 23RD DRIVE phoenix, AZ CBRE, Inc. operates within a global family of companies with many subsidiaries Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, and/or related entities (each an “Affiliate”) engaging in a broad range of Affiliates or representatives make any representation or warranty, expressed or commercial realestate businesses including, but not limited to, brokerage services, implied, as to the accuracy or completeness of this Memorandum or any of its property and facilities management, valuation, investment fund management contents, and no legal commitment or obligation shall arise by reason of your contents and development. At times different Affiliates may represent various clients with receipt of this Memorandum or use of its contents; and you are to rely solely competing interests in the same transaction. For example, this Memorandum on your investigations and inspections of the Property in evaluating a possible may be received by our Affiliates, including CBRE Investors, Inc. or Trammell purchase of the real property. executive summary 04 Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the “Property”) may submit an offer to purchase The Owner expressly reserved the right, at its sole discretion, to reject any or all the Property and may be the successful bidder for the Property. You hereby expressions of interest or offers to purchase the Property, and/or to terminate property overview 05 acknowledge that possibility and agree that neither CBRE, Inc. nor any involved discussions with any entity at any time with or without notice which may arise Affiliate will have any obligation to disclose to you the involvement of any Affiliate as a result of review of this Memorandum. The Owner shall have no legal in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will commitment or obligation to any entity reviewing this Memorandum or making market overview 10 act in the best interest of the client(s) it represents in the transaction described an offer to purchase the Property unless and until written agreement(s) for the in this Memorandum and will not act in concert with or otherwise conduct its purchase of the Property have been fully executed, delivered and approved by business in a way that benefits any Affiliate to the detriment of any other offeror the Owner and any conditions to the Owner’s obligations therein have been lease summary 16 or prospective offeror, but rather will conduct its business in a manner consistent satisfied or waived. with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum. By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest Confidentiality Agreement confidence and that you will not disclose this Memorandum or any of its contents This is a confidential Memorandum intended solely for your limited use and to any other entity without the prior written authorization of the Owner or CBRE, benefit in determining whether you desire to express further interest in the Inc. You also agree that you will not use this Memorandum or any of its contents acquisition of the Property. This Memorandum contains selected information in any manner detrimental to the interest of the Owner or CBRE, Inc. If after pertaining to the Property and does not purport to be a representation of the reviewing this Memorandum, you have no further interest in purchasing the state of affairs of the Property or the owner of the Property (the “Owner”), to be Property, kindly return this Memorandum to CBRE, Inc. all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and Disclaimer information are provided for general reference purposes only and are based on © 2017 CBRE, Inc. The information contained in this document has been obtained assumptions relating to the general economy, market conditions, competition from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, and other factors beyond the control of the Owner and CBRE, Inc. Therefore, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation all projections, assumptions and other information provided and made herein about it. It is your responsibility to independently confirm its accuracy and are subject to material variation. All references to acreages, square footages, completeness. Any projections, opinions, assumptions or estimates used are for and other measurements are approximations. Additional information and an example only and do not represent the current or future performance of the opportunity to inspect the Property will be made available to interested and property. The value of this transaction to you depends on tax and other factors qualified prospective purchasers. In this Memorandum, certain documents, which should be evaluated by your tax, financial and legal advisors. You and your including leases and other materials, are described in summary form. These advisors should conduct a careful, independent investigation of the property to summaries do not purport to be complete nor necessarily accurate descriptions determine to your satisfaction the suitability of the property for your needs. of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and SALE CONTACTS » not rely on the contents of this Memorandum in any manner. COOPER FRATT MIKE STRITTMATTER Vice President Senior Associate T 602.735.5037 T 602.735.5512 [email protected] [email protected] | 2 | 3 executive summary The Tenants

Originally founded in Brisbane, Austalia in 1945, Cardno, Inc. is an ASX-listed professional infrastructure and environmental services company, with expertise in the development and improvement of physical and social infrastructure for communities around the world. Cardno considered options throughout North Valley, but only Freeway Corporate could accommodate Cardno’s need for office, warehouse, land for fenced truck parking with enough remaining parking. The Offering Asking Price $ 5,750,000 Property Highlights

CBRE has been exclusively retained to sell Freeway PROPERTY SUMMARY » Property Address: 19621 N 23rd Dr, Phoenix, AZ 85027 Corporate Center, an approximate 32,737 SF flex/office Total Project Size ±32,737 SF In Place NOI: $387,251 building located at the southwest corner of Behrend » Building Size: ± 32,737 rentable square feet Drive and 23rd Avenue and directly adjacent to the Total Land Area ±2.85 Acres CAP RATE: 6.73% intersection of Interstate 17 and Highway Loop 101. This Parking ±6.18 spaces per 1000 RSF Occupancy: 100% » Lot Size: ± 2.85 acres is a rare opportunity for an investor to acquire a 100% Year Built 1982 LEED Standards: Yes » Parking: ±6.18 space per 1000 RSF leased property to two (2) credit Tenants and located Year Fully Renovated: 2012 Renovatio Holdings, LLC ( dba Vision Graphics) is a premier, just off of a major freeway intersection. The property is » Sewer: City of Phoenix leased to Cardno, Inc., an international leader in providing award winning commercial printing company established in geotechnical and environmental services and Renovatio » Water: City of Phoenix 1976. Drawn to Freeway Corporate Center due to its unique Holdings, LLC (dba Vision Graphics), a TENANT SUMMARY » Electricity: Arizona Public Service 40-year old commercial printing company. power and proximity to Executive housing communities, Tenant: Cardno, Inc. Tenant: Renovatio Holdings, LLC » Roof: 2012 (10 Year Warranty) Renovatio Holdings, LLC Services has seen continued Tenant Size: ±13,805 SF Tenant Size: ±18,932 SF Rent PSF: $16.40/SF MG Rent PSF: $9.24/SF NNN » Power: 1600 amps; 277/480V growth since it’s relocation. Renovatio Holdings, LLC has Lease Expiration: 5/31/2022 Lease Expiration: 10/31/2024 » Zoning: General Commerce Park spent considerable money fixturizing their space. Renewal Terms: One (1) Five ( 5) year at Fair Market Renewal Terms: None » Renovated to LEED Standards in 2012

» Fiber: Adjacent to North Phoenix fiber optic trunk

» Freeways: Immediate access to I-17, Loop 101 & SR 51 Executive Summary | 4 5 | Executive Summary regional map site plan

ACCESS AT OVER 900K SF 23RD OF RETAIL AVENUE AMENITIES WITHIN 1 MILE

101 PHASE II DEER VALLEY NOT A PART TOWNE CENTER

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FREEWAY CORPORATE CENTER

FULL DIAMOND INTERCHANGE AT UTOPIA RD

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Executive Summary | 6 7 | Executive Summary aerial

Phase II Not A Part 19621

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Executive Summary | 8 9 | market overview market overview

Neighborhood Summary Strategically located at the intersection of Loop 101 Freeway and Interstate 17, Freeway Corporate Center is surrounded by numerous amenities. The Deer Valley Freeway Corporate Center is located along Submarket is a favorite for employers due to its location that allows it to draw employees and decision makers from North Scottsdale, Deer Valley, Anthem, Glendale, 23rd Drive, directly adjacent to the Interstate Metrocenter, Midtown and Arrowhead. 17 & Loop 101 Freeway Interchange within the Deer Valley Office Submarket. It is Additionally, several regional retail centers readily accessible to the Deer Valley submarket include Happy Valley Towne Center, The Shops at Norterra, Prime Outlets readily accessible to all parts of Metro at Anthem, Deer Valley Towne Center, Desert Ridge Marketplace, High Street, , Metrocenter Mall, and a range of other neighborhood and Phoenix due to its immediate adjacency specialty centers. Numerous colleges and universities are located within a close proximity to this area, including Midwestern University, Thunderbird Graduate School of to Interstate 17 and Loop 101. These International Management, Arizona State University’s West Campus, University of Phoenix, Glendale Community College and Western International University. freeways connect businesses to residential and commercial areas within this submarket Regional amenities within the vicinity of Freeway Corporate Center include the award winning Pioneer Arizona Museum, Musical Instrument Museum, and dozens of golf and link it to the entire valley through these courses, sports complexes, theaters and parks. Lake Pleasant is located just 20 minutes northwest of the site and offers marina slips and a full range of recreational options freeway systems. This convenient access to with in its 10,000 acres. The lake has potential for future recreational, hotel, commercial and housing developments. multiple freeway systems makes the 19621 Sky Harbor International Airport is within a 30-minute commute from most parts of the Deer Valley submarket. The Phoenix Deer Valley Airport is one of the busiest general North 23rd Drive property a 30-minute aviation airports in the nation and was designed as a general aviation reliever to Phoenix Sky Harbor International Airport. It is home to more than 1,350 aircraft with over commute to over 50% of the population of 400,000 takeoffs and landings each year. Metro Phoenix. Deer Valley Submarket

The Deer Valley office submarket has 1 Mile 3 Mile 5 Mile Deer Maricopa one of the lowest vacancy rates in all of Radius Radius Radius Valley County Metro Phoenix, at 15.73%. The submarket Population 253,760 1,183,674 2,276,712 472,214 4,501,548 posted 85,284 square feet of positive net Average Household Income $54,637 $62,491 $70,409 $74,408 $68,607 absorption during 2016. Historically, both Average Housing Value $124,433 $164,374 $188,957 $371,682 $270,131 corporate America and locally based users Workforce Population 7.0% 3.9% 3.4% 63.60% 60.60% favor the Deer Valley submarket, to the tune (25 and over) of 125,900 square feet of net absorption on Average Age 35.8 38.1 35.9 39.80 37.40 average over the last 12 years. In fact over Some College Education 28.2% 25.7% 24.1% 68.00% 62.40% the last 5 years, the average net absorption College Degrees 18.2% 19.1% 18.1% 44.80% 37.10% has been over 182,000 square feet. Recently, Employed Population 130,505 554,123 1,003,272 235,614 2,040,844 Farmers Insurance selected the Deer Valley Employed as % of Workforce 94.6% 94.1% 93.8% 78.45% 74.81% White Collar Jobs 65.3% 65.1% 61.7% 67.50% 63.10% submarket for a new 150,00 square feet source: Claritas regional hub. N

market overview | 10 11 | market overview Metro Phoenix Overview As one of the nation’s fastest growing regions for the last several decades, Phoenix Transportation Systems now stands as the nation’s fifth largest city with an estimated 4.5 million residents. Phoenix is served by a sophisticated and convenient transportation network and Centrally located between Los Angeles, San Diego, Denver, Las Vegas and infrastructure composed of freeways, airports and rail. Metropolitan Phoenix also benefits Albuquerque, Phoenix serves as a business and distribution hub for the southwest from its proximity to large consumer markets throughout the southwestern United States‚ and benefits from one of the nation’s most diversified economies. Los Angeles, San Diego, Las Vegas and New Mexico are all located within a one-day delivery area by ground. Air access is also extremely convenient with the Phoenix Sky Phoenix has received tremendous press attention and numerous accolades over Harbor International Airport, the area’s primary airport, located less than 30 minutes from the last few years due to its growth, low cost of living and appealing business anywhere in the region. environment. Numerous economists are projecting continued reductions in vacancy and significant rental rate appreciation over the next several years in Phoenix. In addition, senior economists at BMO Capital Markets see Arizona’s economy Freeways advancing 3.5 percent in 2017, beating expected U.S. growth of 3.1 percent. Recent Phoenix is easily traveled because of its grid-patterned street system with Central rankings for the area include the following: Avenue acting as the north/south axis. The freeway infrastructure has been expanded and modified to meet the area’s growth. The majority of the region’s freeways were built over the last two decades and provide reasonable commute times for the growing labor Recent Rankings and Accolades force in the suburban communities. Arizona is #1 in the US for projected job growth through 2019 (3.1% annually) (2015 Moody’s Analytics) The freeway system is composed of three major freeway - Interstate 10, Interstate 17, 17 and U.S. Route 60. Interstate 10, being a transcontinental route between California and Arizona posted its strongest annual post recessionary job growth in 2015 - 65,700 jobs added - a 2.5% Florida, is the most heavily traveled freeway in metropolitan Phoenix. Interstate 17 runs annual increase year over year down the center of Arizona, connecting Phoenix with Sedona, Prescott, Flagstaff and the (ASU W.P. Carey, January, 2016) Grand Canyon. U.S. Route 60 spans most of the country, but is only a controlled-access highway (i.e. freeway) for a few short stretches, one of them being in the Valley and #1 10 Phoenix is #1 in the US for high-tech software/services industry job growth connects travelers to cities such as Wickenburg, Globe, Kingman and Las Vegas. (CBRE Research 2015 Tech-Thirty Report, tied with San Francisco) In addition to these three freeways, three beltways, Routes 101, 202, and 303 loop around Metropolitan Phoenix is the fastest growing city in the hospitality industry Phoenix connecting the Southeast Valley and the West Valley. State Route 51 connects (2016 Phoenix Business Journal) Downtown with the northern reaches of the city, and Arizona State Route 143 is an access route for Phoenix Sky Harbor International Airport and also provides access to and from 10 QUEEN CREEK RD. Phoenix is a top 20 US city for start-up companies the Interstate 10 to the Loop 202 Freeway. (Inc. Magazine) ALMA SCHOOL RD. Phoenix is #1 location for new company facilities and expansion in the Mountain West Region (Site Selection Magazine)

Phoenix has lowest traffic congestion rate of any top 20 US metropolitan area market overview | 12 13 | market overview Highly Educated Employment Base Phoenix is the home of regional operations for many of the nation’s leading companies in aerospace, The state of Arizona is known for its dynamic economic climate, well run financial services and high-tech manufacturing with Honeywell, Motorola, Intel, AAA, USAA and JP state government, young highly educated work force and business friendly Morgan Chase & Co., representing just a few that maintain a significant presence in the region. Due environment. As the seventh youngest state in the country Arizona boasts a to Phoenix’s remarkable quality of life, diverse and well-educated workforce and state-of-the-art talented employment base that is generated from a plethora of local higher commercial and transportation infrastructure, business and residential sectors are expected to flourish education institutions. These institutions include: Arizona State University (a top in the years ahead. science and engineering University), Maricopa Community College system (one of the top community college systems in the United States), and Thunderbird School Phoenix Major Employers Employees Corporate Headquarters of Global Management (ranked by U.S. News & World Report and The Wall Street State of Arizona 49,278 Journal as the top graduate program for international business). These respected * Wal-Mart 32,169 institutions provide graduates with the tools to succeed in an increasingly global Banner Health 25,270 economy while bolstering the local Phoenix employment market. City of Phoenix 14,983 Aerospace & Aviation Economic Diversification Wells Fargo 14,713 Employment in Phoenix through 2019 is forecast to grow at an average annual Maricopa County 12,698 rate of 3.7%. Over the same time period, annual employment growth in the United Arizona State University 12,222 * * States will average 1.6% and annual employment growth in comparable major Intel Corporation 11,900 Western metropolitan markets will average 2.1%. A factor that will contribute to E-Commerce/Logistic Centers JP Morgan Chase 11,042 Phoenix’s strong economic performance is the match that exists between residents’ skill sets and employers’ needs. Public-private collaboration has strategically Bank of America 11,000 driven the diversification of Phoenix’s economy. Employers in Phoenix’s growing Apollo Group 10,000 industries, which include technology, healthcare, education, financial activities, Honeywell Aerospace 10,000 Financial Services professional and business services and manufacturing, among others, recognize US Airways 9,306 the abundance of applicable talent in the area, as well as the strong commitment * Target 8,572 that the community’s leaders have to ensuring that private enterprise can thrive in * * Phoenix. As of November 2016, the unemployment rate for the Phoenix MSA was Bashas’ Family of Stores 8,561 * 4.1%, compared with the state average of 6.3% and the national average of 5.1%. Freeport-McMoran 8,300 Mesa Public Schools 8,217 Health Care/Biotech Dignity Health 7,697 * American Express 7,596 * US Postal Service 7,312

Source: Business Journal Book of Lists 2015 * Currently located in the Deer Valley Submarket market overview | 14 15 | market overview lease summary lease summary

Tenant CARDNO, INC Tenant Renovatio Holdings, LLC dba Vision Original Lease Date August 4, 2014 Graphics Premises: ±13,805 RSF Premises: ±18,932 RSF Current Lease Term 122 Months Pro Rata Share 42.17% Pro Rata Share 57.83% Expiration Date October 31, 2024 Permitted Use General office, warehouse and affiliated engineering services

Permitted Use Printing and related operations and manufacturing processes. Security Deposit $18,439.77 Original Lease Date December 27, 2016

Current Lease Term 65 months Annual Base Rent Date Rate Change Monthly Rent per RSF Monthly Amount Annual Amount August 1, 2016 $0.769 $14,588.71 $175,064.52 August 1, 2017 $0.792 $14,994.14 $179,929.72 Expiration Date May 31, 2022 August 1, 2018 $0.816 $15,448.51 $185,382.14 August 1, 2019 $0.840 $15,902.88 $190,834.56 Security Deposit None August 1, 2020 $0.865 $16,376.18 $196,514.16 Lease Type Modified Gross August 1, 2021 $0.891 $16868.41 $202,421.94 August 1, 2022 $0.918 $17,379.57 $208,554.91 Annual Base Rent Date Rate Change Annual Base Rent per RSF Annual Amount August 1, 2023 $0.946 $17,909.67 $214,916.06 January 1, 2017 $16.40 $226,402.00 August 1, 2024 $0.974 $18,439.77 $221,277.21 June 1, 2018 $16.90 $233,304.50 June 1, 2019 $17.40 $240,207.00 Renewal Options None June 1, 2020 $17.90 $247,109.50 June 1, 2021 $18.40 $254,012.00 Termination Option: Tenant shall have the one-time right to terminate the Lease, with the effective date of early termination being the last day of the sixty-sec- ond (62nd) month of the initial lease term. Tenant shall provide Landlord with nine (9) months prior written notice and shall pay Landlord a termination fee equal to One Hundred Twenty Five Thousand ($125,000.00) plus interest accruing at eight percent (8.0%) per annum. Parking Lease Landlord shall provide not less than ninety-six (96) parking spaces for the Tenant’s use at the Center. Of such parking spaces, thirty (30) will be covered, reserved canopy parking spaces at the charge of $35.00 per space per month. Personal Guaranty: The initial lease term is guaranteed by Dean and Jacqueline Cherry, Anthony and Nancy Paul, and Linda Enright jointly and severally.

Renewal Options Tenant shall have one (1) option to extend the lease for a term of five (5) years at the then fair market rental rate for the premises. Tenant shall provide Landlord with written notice to renew no earlier than two hundred seventy (270) days or no later than one hundred eighty (180) days prior to the expiration of the lease.

Tenant Information | 16 Tenant Information | 17 19621 Phase II Not A Part

19621 NORTH 23RD DRIVE phoenix, AZ

SALE CONTACTS »

COOPER FRATT MIKE STRITTMATTER Vice President Senior Associate T 602.735.5037 T 602.735.5512 [email protected] [email protected] N

18 2415 EAST CAMELBACK ROAD | PHOENIX, ARIZONA 85016 | T 602.735.5555 | WWW.CBRE.COM/IPMETROPHOENIX