VERDUGO VILLAGE Verdugo Mountain Foothills, Glendale, California

126-Unit Condominium Mapped Apartment Community VERDUGO VILLAGE Verdugo Mountain Foothills, Glendale, California

OFFERING MEMORANDUM www.cbremarketplace.com/VerdugoVillage/

INVESTMENT SALES SPECIALISTS: DEBT & EQUITY FINANCE SPECIALISTS:

LAURIE LUSTIG-BOWER KAMRAN PAYDAR NANCY BADZEY BRIAN EISENDRATH BRANDON SMITH Lic. 00979360 Lic. 01242590 Lic. 01263701 Lic. 01421681 Lic. 00409987 + 1 310 550 2556 + 1 310 550 2529 + 1 310 550 2568 +1 310 228 2125 +1 310 550 2532 [email protected] [email protected] [email protected] [email protected] [email protected] www.cbre.com/invlosangelesmultifamily VERDUGO VILLAGE Aerial | South View

Downtown Los Angeles

Downtown Glendale

134

Glendale Community College

VERDUGO VILLAGE

Cañada Boulevard

Verdugo RoadVerdugo

OFFERING MEMORANDUM CBRE, Inc. | 2 VERDUGO VILLAGE Investment Summary

CBRE, Inc. as exclusive agent is pleased to offer for sale Verdugo Village, a 126 unit condominium mapped apartment community located in Glendale, California – one of Southern California’s most desirable submarkets with compelling fundamentals, an exceptional concentration of employment, abundant shopping and dining amenities, convenient access to freeway transportation, and an excellent public education system.

Located at 1717 N. Verdugo Road, Verdugo Village is situated in the scenic foothills of north Glendale’s Verdugo Mountains and offers residents views of the surrounding verdant ridgelines. The property features a mix of one-, two-, three- and four-bedroom units ranging in size from 715 to 1,460 square feet of living area.

Property improvements are comprised of nine two- and three-story buildings on ±2.93 acres of land. Community amenities include a sparkling swimming pool and spa, fitness center, movie theater room, outdoor barbeques and dining areas, conference room, business center, clubhouse facilities, sports court and children’s play area.

Verdugo Village represents a rare investment opportunity to acquire a condominium mapped community, fully stabilized as an apartment investment, in one of Southern California’s most desirable submarkets. The property is being positioned for sale based upon its operations as an apartment building. The existing condominium map provides an investor with an additional exit strategy in the future.

The property is being marketed unpriced.

FOR MORE INFORMATION VISIT: https://www.cbremarketplace.com/VerdugoVillage/

Property Tour Dates:

Tuesday, September 16, 2014 from 11:00am to 2:00pm Tuesday, September 23, 2014 from 11:00am to 2:00pm Tuesday, September 30, 2014 from 11:00am to 2:00pm

Offer Due Date:

Friday, October 3, 5:00pm Pacific Time

OFFERING MEMORANDUM CBRE, Inc. | 3 VERDUGO VILLAGE Investment Highlights

Excellent North Glendale location −−Acclaimed restaurants including Din Tai Fung, Raffi’s Place, Granville, and Bourbon Steak −−Situated in the scenic foothills of the Verdugo Mountains −−Located near Montrose Old Town Honolulu Avenue boutiques, restaurants, −−Known as the “Jewel City”, Glendale is ranked as the 5th safest city in bakeries, and galleries California

−−Surrounded by residential neighborhoods and tree-lined streets Close to Employment Centers −−Located within minutes of Glendale’s central business district and 5.5 million Stabilized Cash-Flowing Asset With Value-Add Potential square feet of office space, home to some of the largest employers in the −−Operating at 97% occupancy area including Disney, Nestle USA HQ, Whole Foods, Citibank, and Avery −−Potential to increase rents 7% from current in-place to market Denison

−−No rent control. Can increase rents immediately −−Convenient to employment centers in Pasadena, Burbank, Hollywood and Downtown Los Angeles −−Condominium mapped. Final map number 37964

Compelling Submarket Multifamly Fundamentals Excellent Transportation Access −−Access to the Glendale Freeway, 134 Freeway, Interstate 210 and Interstate 5 −−Glendale multifamily occupancy is 96.1% with linkage beyond to the Greater Los Angeles freeway system −−Glendale average rental rates have risen 17.8% over the five year average −−Convenient to Bob Hope International Airport and Larry Zarian Robust Local Demographics Transportation Center railway access −−$119,451 estimated 2014 average household income within 1-mile radius

−−5.38% projected population growth and 4.88% projected household growth estimated within a 0.5-mile radius through 2019

−−55.3% estimated population within a 1-mile radius over age 25 has attained bachelor’s, master’s, professional or doctoral degrees

Proximity to Excellent Shopping, Dining, Entertainment −−Located within minutes of Downtown Glendale, Americana at Brand outdoor lifestyle mall, and the Glendale Galleria mall

−−Abundance of shopping venues including Apple, Nordstrom, Bloomingdale’s, Macy’s and many more

OFFERING MEMORANDUM CBRE, Inc. | 4 VERDUGO VILLAGE

OFFERING MEMORANDUM CBRE, Inc. | 5 VERDUGO VILLAGE Verdugo Village Property Overview

1717 North Verdugo Road Address Glendale, CA 91208

Assessor’s Parcel Number 5652-004-004 through 5652-004-129

Lot Size ±2.93 Acres; 127,631 square feet

Year Built 1965. Renovated in 2001 and 2006-2009

Units 126

Net Rentable Area 143,198 square feet

Average Unit Size 1,136 square feet

Number of Buildings Nine

Number of Stories Two- and three- stories

Parking Spaces 214 total spaces

Floor Plans 13

Elevators One

One cabinet per parking space (free) Storage plus 15 income producing storage units

Utility Providers Paid By

Electrical Southern California Edison Tenant

Water Glendale Municipal Water District Tenant

Sewer Glendale Municipal Water District Tenant

Gas Southern California Gas Landlord

Trash Collection City of Glendale Public Works Landlord

Phone/Internet AT&T Tenant

OFFERING MEMORANDUM CBRE, Inc. | 6 VERDUGO VILLAGE Verdugo Village Property Description

Community Amenities

• Sparkling resort-style swimming pool and spa • Video monitored security system

• Expansive entrance lobby lined with windows and filled with natural light • Billiard table/game room

• Controlled access gated entry to covered parking • Conference room

• Fitness center with free weights and cardiovascular equipment • Lobby mezzanine gathering space

• Business center with computers, high speed internet, and printer • Basketball and sport court

• Clubhouse facilities with full kitchen bar area • Children’s play area

• Outdoor barbeques and dining areas • On-site leasing office

• Movie theater room • Large private patio sun terrace

• Attractively landscaped

OFFERING MEMORANDUM CBRE, Inc. | 7 VERDUGO VILLAGE

OFFERING MEMORANDUM CBRE, Inc. | 8 VERDUGO VILLAGE

OFFERING MEMORANDUM CBRE, Inc. | 9 VERDUGO VILLAGE

OFFERING MEMORANDUM CBRE, Inc. | 10 VERDUGO VILLAGE

OFFERING MEMORANDUM CBRE, Inc. | 11 VERDUGO VILLAGE

OFFERING MEMORANDUM CBRE, Inc. | 12 VERDUGO VILLAGE Verdugo Village Property Description (Continued)

Unit Features

• In-unit washers and dryers

• Open floor plan kitchen, dining and living area

• Kitchen granite countertops and tile backsplash

• Kitchen appliances include refrigerator, dishwasher, stove and garbage disposal

• Stainless steel kitchen sinks

• Hardwood style vinyl and carpeted flooring

• Bathroom granite counters

• Patio or balcony access – all units

Detailed Unit Mix

Floor Plan Unit Type Units Avg. Unit Size Total Rentable SF

Maple 1 + 1 2 714 1,428 Chestnut 2 + 2 10 940 9,400 Merino 2 + 2 6 950 5,700 Hampton 2 + 2 30 980 29,400 Rose 2 + 2 3 1,032 3,096 Jasmine 2 + 2 2 1,080 2,160 Sierra 3 + 2 2 1,140 2,280 P. Verdes 3 + 2 4 1,217 4,868 Pearl 3 + 2 3 1,218 3,654 Palisades 3 + 2 48 1,240 59,520 Monterey 3 + 2 8 1,254 10,032 Meridian 3 + 2 2 1,450 2,900 Maxwell 4 + 2 6 1,460 8,760

Total/Average: 126 1,136 143,198

OFFERING MEMORANDUM CBRE, Inc. | 13 VERDUGO VILLAGE Renovation Summary

During the period of 2006 to 2009 the prior owners invested $5,450,000 ($43,250/unit) in major capital improvements with the intention to convert the property to condominiums for sale.

The renovation included interior and exterior improvements, common area improvements and unit renovations.

Exterior Facades −−Architectural treatment to street and rear-facing facades

−−Improved appearance of courtyard facades

−−Repaired stucco and paint

−−New unit entry doors

−−Installed slate over existing walkways

−−Roof repairs as required

−−Waterproofing repairs as required

Site Improvements −−New landscaping throughout

−−Re-plastered pool and installed new pool tile and coping around the pool

−−Refurbished basketball court

−−Resurfaced asphalt driveways

−−Repaired or replaced carport ceilings

OFFERING MEMORANDUM CBRE, Inc. | 14 VERDUGO VILLAGE Renovation Summary (Continued)

Common Areas Unit Interiors −−Redesigned building entry into lobby −−Removed textured ceilings and replaced with smooth plaster

−−Upgraded phone entry system −−Replaced interior closet doors

−−New stone floors with mosaic accents −−Installed crown molding, door casing and baseboard

−−Upgraded pool bathroom −−Replaced bedroom carpeting

−−Upgraded and repaired pool shower −−Bamboo flooring in kitchen and living room

−−Upgraded gym with new equipment −−Installed in-unit washers and dryers

−−Removed texture on ceiling, replaced with smooth plaster −−Removed all wall-mounted air conditioning units

−−Replaced lighting and flooring in gym −−Painted throughout

−−Replaced all bathroom sinks, faucets, bathtubs and toilets

−−Installed tile or travertine tub and shower surrounds

−−Installed travertine or granite vanity counter tops

−−Replaced kitchen cabinets and hardware

−−Installed new oven and gas cook top

−−New dishwasher

−−Replaced kitchen sink, faucet and garbage disposal

−−Installed tile kitchen floors

−−Installed granite kitchen counter tops

−−Replaced original galvanized plumbing with copper plumbing (throughout)

OFFERING MEMORANDUM CBRE, Inc. | 15 VERDUGO VILLAGE

OFFERING MEMORANDUM CBRE, Inc. | 16 VERDUGO VILLAGE Property Layout and Floorplans

Hampton | 2 Bedroom, 2 Bath, 980 Square Feet Palisades | 3 Bedroom, 2 Bath, 1243 Square Feet

To view a floorplan for each unit type, please visit our property data room at: https://www.cbremarketplace.com/VerdugoVillage/

OFFERING MEMORANDUM CBRE, Inc. | 17 VERDUGO VILLAGE Financial Analysis

VERDUGO VILLAGE VerdugoU VillageNIT MIX Unit Mix

4 + 2 1 + 1 6% 2%

2 + 2 40% 3 + 2 52%

Average Average Monthly Annual Type Quantity $/SF SF Current Rent Revenue Revenue 1 + 1 714 2 $1,525 $2.14 $3,050 $36,600 2 + 2 976 51 $2,094 $2.15 $106,816 $1,281,792 3 + 2 1,236 65 $2,330 $1.88 $151,466 $1,817,592 4 + 2 1,458 8 $2,604 $1.79 $20,835 $250,020 Total/Average 1,136 126 $2,239 $2.11 $282,167 $3,386,004

Floor Plan Unit Type Units Avg. Unit Size Total Rentable SF Avg. Rent/Unit Avg. Rent/SF (In-Place) Avg. Rent/SF (Market)

Maple 1 + 1 2 714 1,428 $1,525 $2.14 $2.31 Chestnut 2 + 2 10 940 9,400 $1,985 $2.11 $2.35 Merino 2 + 2 6 950 5,700 $2,116 $2.23 $2.37 Hampton 2 + 2 30 980 29,400 $2,088 $2.13 $2.32 Rose 2 + 2 3 1,032 3,096 $2,237 $2.17 $2.21 Jasmine 2 + 2 2 1,080 2,160 $2,463 $2.28 $2.34 Sierra 3 + 2 2 1,140 2,280 $2,268 $1.99 $2.03 P. Verdes 3 + 2 4 1,217 4,868 $2,349 $1.93 $2.00 Pearl 3 + 2 3 1,218 3,654 $2,407 $1.98 $2.01 Palisades 3 + 2 48 1,240 59,520 $2,318 $1.87 $2.01 Monterey 3 + 2 8 1,254 10,032 $2,379 $1.90 $2.00 Meridian 4 + 2 2 1,450 2,900 $2,606 $1.80 $1.81 Maxwell 4 + 2 6 1,460 8,760 $2,604 $1.78 $1.80

Total/Average: 126 1,136 143,198 $2,239 $1.97 $2.11

*Market rent reflects the highest existing rent for each floorplan.

OFFERING MEMORANDUM CBRE, Inc. | 18 VERDUGO VILLAGE Financial Analysis

1717 N VERDUGO BLVD, GLENDALE, CA 91208 Year One Investment Proforma CCurrentURRENT OperationsOPERATIONS

INVESTMENT PRO FORMA ESTIMATED INCOME Monthly Annual Per Unit/Mo Potential Rent Income (1) $282,167 $3,386,004 $2,239 Anticipated Rent Growth (2) $9,699 $116,382 $77 Total Scheduled Gross Income $291,866 $3,502,386 $2,316 Vacancy (3) ($14,593) ($175,119) ($116) Total Net Rental Income $277,272 $3,327,267 $2,201 Bad Debt (4) ($1,917) ($22,999) ($15) Parking Income (4) $1,492 $17,902 $12 Utility Reimbursement (4) $5,718 $68,612 $45 Other Income (5) $6,440 $77,285 $51 GROSS OPERATING INCOME $289,006 $3,468,067 $2,294

ESTIMATED OPERATING EXPENSES Monthly Annual Per Unit/Mo Property Taxes (6) Ad Valorem Direct Assessments (7) $744 $8,923 $6 Insurance (8) $2,957 $35,482 $23 Management Fee (8) $8,670 $104,042 $69 Payroll (8) $18,025 $216,300 $143 Electricity (9) $6,261 $75,127 $50 Water & Sewer (9) $4,972 $59,668 $39 Gas (9) $934 $11,208 $7 Telephone/Cable/Internet (9) $879 $10,552 $7 Turnover (4) $3,101 $37,209 $25 Repairs and Maintenance (8) $3,570 $42,840 $28 Elevator Service (8) $200 $2,400 $2 Pool Service (8) $900 $10,800 $7 Extermination (4) $755 $9,058 $6 Landscaping (4) $1,685 $20,225 $13 Trash Removal (9) $2,514 $30,164 $20 Administration (8) $2,550 $30,600 $20 Advertising (8) $1,500 $18,000 $12 Reserves (8) $2,100 $25,200 $17 TOTAL EST. EXPENSES (Excluding Property Taxes) $62,316 $747,798 $495

EST. NET OPERATING INCOME BEFORE PROPERTY TAXES $226,689 $2,720,269 $1,799

(1) Rent Roll as of 7/22/14 (2) Assumes half of loss to lease captured (3) Assumes Vacancy Loss of 5% (4) 2013 (5) 2013 - Includes late charges, NSF fees, storage income, termination fees, cable/internet/phone income, damage charge income, collection and legal fees, application fees, etc. (6) Property taxes are ad valorem, based on a millage rate of 1.06608% (7) 2007 grown 2% annually (8) Estimated (9) 2013 + 2%

OFFERING MEMORANDUM CBRE, Inc. | 19 VERDUGO VILLAGE Financial Analysis

1717 N VERDUGO BLVD, GLENDALE, CA 91208 5-Year Cash Flow Projection 5-YEAR CASH FLOW PROJECTION

FY 1 FY 2 FY 3 FY 4 FY 5 ESTIMATED INCOME Rent Income $3,502,386 $3,727,331 $3,839,151 $3,954,326 $4,072,955 Concessions $0 $0 $0 $0 $0 Gain/Loss to Lease $0 $0 $0 $0 $0 Total Scheduled Gross Income $3,502,386 $3,727,331 $3,839,151 $3,954,326 $4,072,955 Vacancy ($175,119) ($186,367) ($191,958) ($197,716) ($203,648) Total Net Rental Income $3,327,267 $3,540,964 $3,647,193 $3,756,609 $3,869,308

Bad Debt ($22,999) ($23,689) ($24,400) ($25,132) ($25,886) Parking Income $17,902 $18,439 $18,992 $19,562 $20,148 Utility Reimbursement $68,612 $70,671 $72,791 $74,975 $77,224 Other Income $77,285 $79,604 $81,992 $84,452 $86,985 TOTAL ESTIMATED INCOME $3,468,067 $3,685,989 $3,796,568 $3,910,466 $4,027,779 % Year-to-year Increase 6.3% 3.0% 3.0% 3.0%

ESTIMATED EXPENSES Property Taxes Ad Valorem Ad Valorem Ad Valorem Ad Valorem Ad Valorem Direct Assessments $8,923 $9,101 $9,284 $9,469 $9,659 Insurance $35,482 $36,192 $36,916 $37,654 $38,407 Management Fee 3.00% $104,042 $110,580 $113,897 $117,314 $120,833 Payroll $216,300 $220,626 $225,039 $229,539 $234,130 Electricity $75,127 $76,629 $78,162 $79,725 $81,320 Water & Sewer $59,668 $60,861 $62,079 $63,320 $64,587 Gas $11,208 $11,432 $11,661 $11,894 $12,132 Turnover $37,209 $37,953 $38,712 $39,487 $40,276 Repairs and Maintenance $42,840 $43,697 $44,571 $45,462 $46,371 Pool Service $10,800 $11,016 $11,236 $11,461 $11,690 Extermination $9,058 $9,239 $9,424 $9,612 $9,804 Landscaping $20,225 $20,630 $21,042 $21,463 $21,893 Trash Removal $30,164 $30,767 $31,382 $32,010 $32,650 Administration $30,600 $31,212 $31,836 $32,473 $33,122 Advertising $18,000 $18,360 $18,727 $19,102 $19,484 Reserves $25,200 $25,704 $26,218 $26,742 $27,277 TOTAL ESTIMATED EXPENSES EXCLUDING PROPERTY TAXES $747,798 $767,211 $783,661 $800,473 $817,655 % Year-to-year Increase 2.6% 2.1% 2.1% 2.1%

EST. NET OPERATING INCOME EXCLUDING PROPERTY TAXES $2,720,269 $2,918,778 $3,012,908 $3,109,993 $3,210,124 % Year-to-year Increase 7.3% 3.2% 3.2% 3.2%

OFFERING MEMORANDUM CBRE, Inc. | 20 VERDUGO VILLAGE Financial Analysis | VERDUGO VILLAGE FINANCIAL STATEMENT NOTES

Annualized Market Rent Operating Expense Adjustments “Market Rents” reflect each Verdugo Village floor plan’s highest existing rent Estimated Cost Savings applied to the remaining units of that respective floor plan. 1. The primary savings in payroll, as compared to historical operations, come from a reduction of the on-site manager’s annual compensation from Year 1 pro forma annualized Market Rent captures half of the loss-to-lease, $104,289 to $86,009, which is a more appropriate compensation. Combined straight-lined, based on the assumption that in Year 1, half of the leases will with a slightly lower benefits program, the total payroll expense is reduced expire and increase to market rate. from $240,161 to $216,300.

In Year 2, the total annualized Market Rent from Year 1 grows by 3%. The second 2. Advertising cost is reduced from $2,448 per month to $1,500 per month. half of the Year 1 loss-to-lease is also captured in Year 2, and grows by 3%. Referral fees and resident relations costs are assumed to not be recurring. 3. Administrative expenses, excluding management fees, are reduced from Other Income $4,310 per month to $2,550 per month. This is accomplished by budgeting $150 per month for supplies, $1,000 per month for bank charges, $500 per In addition to a free storage compartment in each parking spot, Verdugo Village month for legal, $500 per month for equipment/software, and $400 per provides residents approximately 15 small storage compartments on the ground month for other administrative expenses. floor next to the elevator for $50 per month and 6 garage/storage units along the south side of the property for $200 per month.

Vacancy Loss The pro forma reflects a 5% vacancy loss.

Management Fee The pro forma reflects a 3% management fee.

Gas Utility Expense Gas utility is for the property forced-air heating system and swimming pool and spa heating, and is a landlord expense. There are no in-unit gas appliances.

OFFERING MEMORANDUM CBRE, Inc. | 21 VERDUGO VILLAGE Financial Analysis

THE MULTIFAMILY FINANCE TEAM OF BRIAN EISENDRATH The Multifamily Finance Team of Brian Eisendrath

Verdugo Village Soft Quotes 1717 N. Verdugo Road Glendale, CA 91208 126 Multifamily Units

10 Year Fixed 7 Year Fixed 7 Year Floater Bank Term 120 months 84 months 84 months 3+1+1 Index 10-yr UST 7-yr UST 1 month LIBOR 1 month LIBOR Index Rate 2.35% 2.40% 0.16% 0.16% Spread 165-175 175-185 190-205 200-250 All In Rate 4.00%-4.10% 3.82%-3.92% 2.06%-2.21% 2.16%-2.66% Interest Only 5-10 Years IO 3-7 Years IO 3-7 Years IO Full Term IO Prepayment Defeasance Defeasance 1 Yr LO then 1% Open at Par Min. DSCR 1.25x 1.25x 1.00x N/A Max. LTV 60.0% 60.0% 60.0% 60%-65% LTC

Notes - Agency Soft Quotes subject to change due to market conditions - Subject to lender review/verification of taxes, borrower budget, and proposed guarantor - Minimum monthly net rental collections based on T3 average with stable to increasing trend - US Treasuries and Libor as of 8/28/2014 - Bank quote subject to review of the business plan and economic projections

Brian Eisendrath Brandon Smith S. Ross Moore Annie Rice Cameron Chalfant Vice Chairman Vice President Senior Analyst Senior Analyst Analyst 310.228.2125 310.550.2532 310.550.2546 310.550.2675 310.550.2563 [email protected] [email protected] [email protected] [email protected] [email protected] Lic. 01421681

CBRE Group, Inc. | 1840 Century Park East | Suite 900 | Los Angeles, CA 90067 | www.cbre.com/brian.eisendrath

OFFERING MEMORANDUM CBRE, Inc. | 22 VERDUGO VILLAGE Rent Comparables

VERDUGO VILLAGE

Layout ID:L01 MapId:1883182 © 2014 CBRE Limited. Data © TeleAtlas, Google, AerialExpress, DigitalGlobe, Landiscor, USGS, i-cubed. The information contained herein (the “Information”) is intended for informational purposes only and should not be relied upon by recipients hereof. Although the Information is believed to be correct, its accuracy, correctness or completeness cannot be guaranteed and has not been verified by either CBRE Limited or any of its affiliates (CBRE Limited and its affiliates are collectively referred to herein as “CBRE”). CBRE neither guarantees, warrants nor assumes any responsibility or liability of any kind with respect to the accuracy, correctness, completeness, or suitability of, or decisions based upon or in connection with, the Information. The recipient of the Information should take such steps as the recipient may deem appropriate with respect to using the Information. The Information may change and any property described herein1. may be withdrawnPrado from the market at any time without notice or obligation of any kind on the part of CBRE. The Information is protected by copyright and shall be fully enforced. 2. IMT Glendale 3. James Terrace 4. Falls at Montrose

OFFERING MEMORANDUM CBRE, Inc. | 23 VERDUGO VILLAGE Rent Comparables

SELECT RENT COMPARABLES Select Rent Comparables COMPARABLE 1 PRADO 3 + 2 201 W Fairview Ave 6% Glendale, CA 91202 Year Built: 1988 1 + 1 Units: 254 2 + 2 TH 33% PHOTO Occupancy: 96% 31% Phone: 818.956.0084 2 + 2 Owner: Equity Residential 30% Manager: Equity Residential

Type Number of Units Effective Rent Unit Square Feet Low $/Low SF High $/ High SF 1 + 1 85 $1,750 - $1,915 718 - 840 $2.44 $2.28 2 + 2 75 $2,285 1,000 $2.29 2 + 2 TH 80 $2,335 - $2,575 992 - 1,215 $2.35 $2.12 3 + 2 14 $2,645 - $2,680 1,190 - 1,190 $2.22 $2.25 Concessions: 9% off market rates on all units, 16% off market rate on select 2BD/2BA, plus an additional $750 off of move-in. Amenities: Controlled Access WiFi BBQ Area Vaulted Ceilings Carpet Flooring Fitness Center Extra Storage Central A/C Granite Counters Heated Pool Parking Garage Private Balcony W/D In-Unit COMPARABLE 2 IMT GLENDALE 0 + 1 1630 Calle Vaquero 4% Glendale, CA 91206 2 + 2 Year Built: 1968 21% Units: 67 PHOTO Occupancy: 97% Phone: 877.458.5313 1 + 1 75% Owner: IMT Residential Manager: IMT Glendale

Type Number of Units Effective Rent Unit Square Feet Low $/Low SF High $/ High SF 0 + 1 3 $1,355 - $1,530 600 $2.26 $2.55 1 + 1 50 $1,690 - $1,885 770 $2.19 $2.45 2 + 2 14 $2,035 - $2,335 1,063 - 1,200 $1.91 $1.95 Concessions: None Amenities: Pool Laundry Facility Carpet Flooring Fitness Center Stainless Appliances Central A/C Covered Parking Granite Counters Balcony/Patio

OFFERING MEMORANDUM CBRE, Inc. | 24 SELECT RENT COMPARABLES

COMPARABLE 5 JUSTIN OAKS 1133 Justin Ave Glendale, CA 91201 Year Built: 1973 4 + 2 TH 2 + 2 Units: 54 30% 37% PHOTO Occupancy: N/A Phone: 866.342.6919 3 + 2.5 TH 29% Owner: General Partners Asset Holdings Manager: Ming Management 3 + 2 TH 4%

Type Number of Units Effective Rent Unit Square Feet $/SF 2 + 2 20 $1,575 1,038 $1.52 3 + 2 TH 2 $1,895 1,182 $1.60 VERDUGO VILLAGE Rent Comparables 3 + 2.5 TH 16 $1,895 1,290 $1.47 4 + 2 TH 16 $2,150 1,464 $1.47 Concessions: None Amenities: Vaulted Ceilings Laundry Facilities Patio/Balcony Pool Controlled Access Central A/C Select Rent Comparables Hardwood/Carpet Walk-In Closets COMPARABLE 63 JAMES TERRACE 611 N Howard St Glendale, CA 91206 2 + 2 Year Built: 1973 18% Units: 100 PHOTO Occupancy: 94% 1 + 1 Phone: 323.556.6600 82% Owner: Decron Properties Manager: Decron Properties

Type Number of Units Effective Rent Unit Square Feet Low $/Low SF High $/ High SF 1 + 1 82 $1,650 - $1,750 702 - 790 $2.35 $2.22 2 + 2 18 $1,900 - $1,950 972 - 972 $1.95 $2.01 Concessions: None Amenities: Pool Sauna Club Room Laundry Facility Fitness Center Central A/C SELECT RENT COMPARABLES Controlled Access BBQ Area Stainless Appliances COMPARABLE 47 FALLS AT MONTROSE 2 + 2 0 + 1 2121 Valderas Dr 14% 5% Glendale, CA 91208 3 + 2 Year Built: 1966 6% Units: 104 PHOTO Occupancy: N/A 2 + 1.5 1 + 1 Phone: 818.275.7752 29% 46% Owner: Pacific Urban Residential Manager: Pinnacle

Type Number of Units Effective Rent Unit Square Feet $/SF 0 + 1 5 $1,380 500 $2.76 1 + 1 48 $1,695 700 $2.42 2 + 1.5 30 $1,944 870 $2.23 2 + 2 15 $2,021 950 $2.13 3 + 2 6 $2,450 1,150 $2.13 Concessions: None Amenities: Pool Covered Parking Glass Shower Doors Central A/C Fitness Center Laundry Facilities Hardwood Style Flooring BBQ Area Stainless Appliances Extra Storage

© 2014 CB Richard Ellis, Inc. The information above has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

OFFERING MEMORANDUM CBRE, Inc. | 25 VERDUGO VILLAGE Sales Comparables 1717 N Verdugo Road Select Multi-Family Sold Comparables

1. 1480 Vine St 2. 3600 Barham Blvd 3. 3150 Wilshire Blvd

4. 200 E Broadway VERDUGO VILLAGE 5. 914 S Wilton Pl 6. 1901 N Buena Vista St 7. 1724 N Highland Ave 8. 900 Irolo St 9. 350 E Del Mar Blvd 10. 10979 Bluffside Dr 11. 4041 Radford Ave 12. 810 S Flower St 13. 888 Hilgard Ave 14. 630 Masselin Ave 15. 900 S Figueroa st 16. 3100 Riverside Dr 17. 1443 N Fuller Ave 18. 131-151 E Holly St 19. 3460 W 7th St

Layout ID:L01 MapId:1886410 © 2014 CBRE Limited. Data © TeleAtlas, Google, AerialExpress, DigitalGlobe, Landiscor, USGS, i-cubed. The information contained herein (the “Information”) is intended for informational purposes only and should not be relied upon by recipients hereof. Although the Information is believed to be correct, its accuracy, correctness or completeness cannot be guaranteed and has not been verified by either CBRE Limited or any of its affiliates (CBRE Limited and its affiliates are collectively referred to herein as “CBRE”). CBRE neither guarantees, warrants nor assumes any responsibility or liability of any kind with respect to the accuracy, correctness, completeness, or suitability of, or decisions based upon or in connection with, the Information. The recipient of the Information should take such steps as the recipient may deem appropriate with respect to using the Information. The Information may change and any property described herein may be withdrawn from the market at any time without notice or obligation of any kind on the part of CBRE. The Information is protected by copyright and shall be fully enforced.

OFFERING MEMORANDUM CBRE, Inc. | 26 VERDUGO VILLAGE Sales Comparables

SELECTSelect MUL TMulti-FamilyI-FAMILY SoldSOL comparablesD COMPARABLES

Criteria: Properties located in Los Angeles and surrounding cities, 50 units or more, sold 2/18/13 - 8/28/14, in excess of $350/SF Source: CoStar, Sorted by Price Per Square Foot

Property Address City Zip Units Sale Price CAP $/Unit $/SF SF Built Date 1480 Vine St (Part of Multi-Property Sale) Los Angeles 90028 64 $64,547,752 - $1,008,558 $687 94,009 2010 6/26/2013 3600 Barham Blvd (Part of Portfolio) Hollywood 90068 1151 $420,025,415 - $364,922 $574 732,100 1971 2/27/2013 3150 Wilshire Blvd Los Angeles 90010 464 $283,000,000 - $609,914 $566 500,000 2014 7/25/2014 200 E Broadway Glendale 91205 208 $70,500,000 4.10% $338,942 $549 128,323 2013 6/20/2014 914 S Wilton Pl (Part of Portfolio) Los Angeles 90019 116 $29,001,030 - $250,008 $529 54,844 1987 3/31/2014 1901 N Buena Vista St Burbank 91504 276 $101,500,000 4.25% $367,754 $508 200,000 2010 4/30/2013 1724 N Highland Ave Hollywood 90028 270 $120,500,000 3.75% $446,296 $505 238,441 2010 10/1/2013 900 Irolo St (Part of Portfolio) Los Angeles 90006 95 $23,750,844 - $250,008 $461 51,524 1987 3/31/2014 350 E Del Mar Blvd (Part of Portfolio) Pasadena 91101 96 $30,106,323 - $313,607 $449 67,080 1973 2/27/2013 10979 Bluffside Dr (Part of Portfolio) North Hollywood 91604 827 $283,460,462 - $342,757 $423 670,000 1987 2/27/2013 4041 Radford Ave (Part of Portfolio) Studio City 91604 149 $51,070,869 - $342,757 $401 127,238 2009 2/27/2013 810 S Flower St Los Angeles 90017 251 $71,000,000 - $282,869 $397 178,626 1930 6/28/2013 888 Hilgard Ave Los Angeles 90024 60 $21,500,000 3.66% $358,333 $389 55,292 1976 12/10/2013 630 Masselin Ave Los Angeles 90036 169 $65,000,000 3.70% $384,615 $387 168,133 1990 7/9/2013 900 S Figueroa St (Part of Multi-Property Sale) Los Angeles 90015 271 $172,269,454 - $635,680 $370 466,200 2012 5/14/2014 3100 Riverside Dr (Part of Portfolio) Los Angeles 90027 263 $80,384,758 - $305,645 $364 220,675 1988 2/27/2013 1443 N Fuller Ave Los Angeles 90046 82 $25,800,000 4.25% $314,634 $359 71,846 1987 11/8/2013 131-151 E Holly St Pasadena 91103 374 $123,400,000 4.00% $329,947 $353 350,000 1994 6/18/2013 3460 W 7th St Los Angeles 90005 168 $63,000,000 - $375,000 $350 179,989 1965 7/29/2013

© 2014 CBRE, Inc. The information above has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

OFFERING MEMORANDUM CBRE, Inc. | 27 VERDUGO VILLAGE Aerial | Northeast View

Angeles National Forest

VERDUGO VILLAGE

Cañada Boulevard

Verdugo Road

Glendale Community Verdugo College Park

OFFERING MEMORANDUM CBRE, Inc. | 28 VERDUGO VILLAGE Aerial | East View

ALTADENA

PASADENA

Glendale Community College

VERDUGO VILLAGE

Verdugo Road

Cañada Boulevard

OFFERING MEMORANDUM CBRE, Inc. | 29 VERDUGO VILLAGE Aerial | Southwest View

BURBANK

Downtown Glendale

Glendale Community College Cañada Boulevard VERDUGO VILLAGE

Verdugo Road

OFFERING MEMORANDUM CBRE, Inc. | 30 VERDUGO VILLAGE Regional Map

OFFERING MEMORANDUM CBRE, Inc. | 31 VERDUGO VILLAGE Glendale Overview

Abundant Retail Amenities Glendale – Major Area Employers Include Verdugo Village is located minutes from abundant shopping, dining and entertainment venues.

Montrose Old Town – Glendale’s Historic Core Located minutes north and west from Verdugo Village along Honolulu Avenue, this quaint “Main Street USA” collection of nearly 200 boutiques, shops, restaurants, cafés and bakeries features a recently built Trader Joe’s Market and the Montrose Harvest Market traditional farmers market. Year-round event programming includes the Annual Montrose Film Festival, the Hot Rod & Classic Car Show, the Arts and Crafts Festival, Oktoberfest and Montrose Old-Town Christmas.

Montrose and La Cañada Flintridge Located minutes north and east of Verdugo Village on North Verdugo Blvd. shopping and entertainment options include Vons grocery store, CVS Pharmacy, Subway, Burger King, GNC, UPS Store, Tofu & BBQ, Burger King, United Artists Movie Theater, Starbucks, and Goldstein’s Bagel Bakery.

Verdugo Foothills & Glendale Restaurant options less than 1/2 mile south of Verdugo Village include Coffee Bean & Tea Leaf, Quiznos Sandwich Restaurant, Wrap Express and Flame Broiler. Golden Farms Market grocer, Subway, and Baskin Robbins are located less than one mile south of Verdugo Village on Glendale Ave.

A Vons grocery anchored shopping center is located 1.6 miles south of Verdugo Village. Shopping center tenants include Rite Aid, IHOP Restaurant, and Pier 1 Imports.

Glendale – Downtown Core Less than three miles from Verdugo Village, Downtown Glendale features dozens of walkable restaurant, shopping and dining options along Brand Boulevard. Restaurants include The Cheesecake Factory, Katsuya, Frida’s Mexican, Din Tai Fung, In-N-Out Buger, BJ’s Restaurant & Brewhouse, California Pizza Kitchen. Entertainment venues include Pacific Theaters Glendale 18, Glendale Center Theater and numerous art galleries.

OFFERING MEMORANDUM CBRE, Inc. | 32 VERDUGO VILLAGE Glendale Overview

1. Montrose Old Town

Honolulu Avenue Trader Joe’s Market Montrose Harvest Market Dozens of shops, boutiques, restaurants, bakeries, and galleries.

3. La Cañada Flintridge

2. Montrose 1919 North Verdugo Blvd. United Artists Move Theater 2039 North Verdugo Blvd. Starbucks Vons Goldstein’s Bagel Bakery CVS Pharmacy Marshalls Subway GNC The UPS Store Tofu & BBQ

VERDUGO VILLAGE

OFFERING MEMORANDUM CBRE, Inc. | 33 VERDUGO VILLAGE Glendale Overview

4. Verdugo Foothills 5. Glendale Avenue Retail 7. Americana 8. Glendale Galleria

1500 Canada Blvd. 1010 North Glendale Ave. VERDUGO VILLAGE 889 Americana Way 100 W. Broadway Coffee Bean & Tea Leaf Golden Farms Market Shopping Shopping Quizno’s Sandwich Restaurant Subway Sandwiches American Eagle Outfitters Apple The Flame Broiler Baskin Robbins Armani Exchange Abercrombie & Fitch Wrap Express Curves Anthropologie Aeropostale Kurry & Kabob Pharmacy Barnes & Noble Bebe Rocky’s Gourmet Pizza Barney’s New York Bloomingdale’s BCBGMAXAZRIA Disney Store Calvin Klein Hugo Boss Chico’s Gucci H&M GUESS kate spade new york Louis Vitton Lululemon Athletica Macy’s Nordstrom Target Sephora 6. Glendale Tiffany & Co. Dining Urban Outfitters 9021Pho 561 North Glendale Ave. Blaze Pizza Dining Chipotle Vons Din Tai Fung In-N-Out Burger Rite Aid Pharmacy Granville Café Red Robin Bank of America Le Pain Quotidien Pier 1 Imports Bourbon Steak by Michael Mina IHOP Restaurant Frida Mexican Café Swain’s Art Supplies Katsuya The Cheesecake Factory Trattoria Amici

Cinema Pacific Theaters 18-Plex

OFFERING MEMORANDUM CBRE, Inc. | 34 VERDUGO VILLAGE Market Overview

Verdugo Village is located less than three miles from the CBD core of the city of Exceptional Concentration of Employment Glendale which comprises 5.5 million square feet of Class “A” office space in 23 buildings. Glendale’s economic base includes a strong presence of entertainment, healthcare, Downtown Glendale is home to many of the region’s largest employers including: Nestlé finance, insurance and other service related industries. It boasts some of the region’s USA HQ, Whole Foods Western HQ, DreamWorks Animation SKG, Disney, The Walt Disney largest employers including Nestle’s USA HQ, Whole Foods Western HQ, DreamWorks Company Internet Group, LegalZoom.com, Unum Group, United Healthcare, Allstate, Animation SKG, Disney, The Walt Disney Company Internet Group, California Credit Union, American Realty Advisors, California Credit Union, Avery Dennison and Employers Citibank, Avery Dennison, LegalZoom.com, Unum Group, HealthNet, Allstate, United Holdings. Verdugo Village is centrally located within four to six miles of Downtown LA, Healthcare and Employers Holdings. Additionally, its central location just minutes from Hollywood, Burbank and Pasadena. Downtown Los Angeles, Hollywood, Burbank and Pasadena provides its residents with an Glendale Community Retail Amenities easy commute to all of Greater Los Angeles’ top employment centers outside of Glendale. Downtown Glendale offers Verdugo Village resident’s myriad shopping and dining Located in One of LA’s Best & Safest Submarkets alternatives, including the iconic Americana at Brand. Affectionately known as the “Jewel City,” Glendale offers residents a bustling urban Americana at Brand is situated in Downtown Glendale’s core and is ranked in the top core, and quiet, tree-lined neighborhoods. The FBI’s Uniformed Crime Report ranks 15 malls worldwide in terms of sales per square foot. With Boston’s historic Newbury Glendale as the 5th safest city in the State of California. Glendale boasts an exceptional Street providing the design cues, the 900,000 sq. ft., 15.5 acre mixed-use property array of amenities (within convenient driving distance of Vergugo Village) including the has over 70 upscale retail, dining and entertainment destinations. Delivered by Caruso Americana, an outdoor lifestyle shopping center; Glendale Galleria, one of Southern Affiliated in 2008, Americana at Brand is organized upon the European idea of a city California’s largest shopping malls; a pro-business environment; excellent transportation center- combining a mix of architectural styles, building heights and materials along with access with four major freeways, and Burbank’s Bob Hope Airport only minutes away. expansive open spaces at the center of the project. Glendale is known for its excellent public education system, where students consistently outscore local, state and national standardized test averages. The climate is mild with an Caruso has designed the Americana to reflect the industrial era, highlighted by a massive average daytime temperature of 77 degrees. elevator shaft with exposed steel beams. Vibrant Population Verdugo Village residents enjoys the benefits of being within short driving distance to With a population of just under 200,000, Glendale is LA County’s third largest city and what is effectively Glendale’s town square featuring prominent retailers such as Tiffany & was recently awarded “The Neighborhood of the Year” for 2013 by Curbed LA. Glendale’s Co., Barnes & Noble, Sephora, Kate Spade and Apple to name a few of the luxury brands. urban renaissance is drawing a young, dynamic population; thirty percent of Glendale’s Americana at Brand also boasts an 18-screen Pacific Theatres and outstanding restaurants population is between the ages of 25 to 44. highlighted by the recent opening of Din Tai Fung, a popular Taiwanese restaurant that the New York Times declared to be one of the top ten restaurants in the world.

Immediately to the west of Americana, is the Glendale Galleria, one of Southern California’s preeminent regional malls. Comprising 1.6 million square feet, Glendale Galleria is the second largest mall in Los Angeles County and ranks as one of the top ten regionals in sales per square foot. Designed by Jon Jerde, Glendale Galleria recently completed its expansion and redevelopment, which was a multimillion-dollar interior and exterior renovation, with the November, 2013 delivery of Bloomingdale’s. Other anchor tenants include Macy’s, JC Penney and Target. Glendale Galleria is home to 200 plus retailers including popular names such as Disney Store, BCBG Max Azaria, Ann Taylor and Coach.

OFFERING MEMORANDUM CBRE, Inc. | 35 VERDUGO VILLAGE Market Overview

Tri-Cities Glendale, Burbank and Pasadena—or the “Tri-Cities” as it is generally known—is home to many of the world’s major motion picture/TV studios and a booming itinerary of attractions, eateries and nightlife. Known for being one of Los Angeles’ best performing submarkets, as well as for offering world-renowned shopping and entertainment destinations, the Tri-Cities has it all.

A dazzling range of urban lifestyle options make the Tri-Cities a popular destination to both live and work. Many of the local firms, particularly within the technology and entertainment sectors, are characterized by desirable, high-wage jobs. In addition, due to the region’s great access to regional transportation, many residents are able to commute to employment centers in Downtown L.A., West L.A. and other employment centers within the San Fernando Valley.

Multi Family Market Statistics The Tri-Cities ranks among LA metro’s rent growth leaders. With 2014 rents climbing a forecasted 5.0% on top of last year’s robust 5.1% increase, recent rent growth in Glendale/ Burbank/Pasadena has greatly outperformed the historical submarket average of 3.5%. As of the 2nd Quarter 2014, Glendale occupancy stood at 96.1%.

City Of Glendale The city of Glendale is centrally located in Los Angeles County, just six miles northwest of Downtown Los Angeles and strategically positioned between the major population and employment centers of the San Fernando and San Gabriel Valleys. Glendale is also an easy commute to Hollywood (6 miles), Burbank (4 miles) and Pasadena (6 miles).

With a city population of approximately 200,000, Glendale is Los Angeles County’s third largest city, characterized by a progressive community that offers the best in urban- suburban living and an optimal location for successful businesses, both large and small. Glendale is a major diversified business center driven by the entertainment industry, corporate headquarters and business services including finance, insurance, law and chocolate milk.

The FBI’s Uniformed Crime Report was released in June, and ranks Glendale as the 5th safest city in the State of California. Glendale is also ranked as the 8th safest city in the country with a population of 100,000 or more.

Widely respected for its well-managed municipal government, police and fire protection, excellent schools and medical centers — Glendale is one of Southern California’s leading destinations for retail shopping as well as banking/investments and entertainment.

OFFERING MEMORANDUM CBRE, Inc. | 36 VERDUGO VILLAGE Market Overview

The Glendale Galleria The Glendale Galleria is one of Southern California’s premier regional malls. At 1.6 million square feet, it is the second largest in Los Angeles County and attracts more than 26 million visitors annually. The architect was Jon Jerde, who credited his design to a Ray Bradbury essay on reviving retail districts. The property completed the final stages of its multi-million dollar redevelopment in November 2013 including the grand opening of the Americana at Brand luxury retailer, Bloomingdale’s. The Americana at Brand, located less than three miles south of Verdugo Village (opened in 2008) is an upscale retail, entertainment and housing complex featuring an open Anchored by JC Penney, Macy’s, Bloomingdale’s, and Target, the Glendale Galleria is park area and nightly water show. The property was built by, and is currently owned and home to over 200 stores including popular retailers Louis Vuitton, Gucci, Disney Store, operated by Los Angeles businessman Rick J. Caruso, who also developed The Grove in Porsche Design, BCBG Max Azaria, Brookstone, Ann Taylor, Coach and Forever 21. Los Angeles. Both The Americana at Brand and The Grove are organized upon the idea of a city center – with a mix of architectural styles, building heights and materials used, as Glendale Retail Amenities well as vast open spaces at the projects’ center. The Americana at Brand is much like The Verdugo Village’s excellent location gives residents one of the premier shopping/ Grove in that it is designed to appear like a public space, but is private property; however, entertainment areas in the LA Metro area, with numerous movie theaters, restaurants, the two-acre park in the center of the complex is entirely public. Both The Americana and and specialty retail stores within a short drive. Anchored by the Americana at Brand, the Grove rank in the top 15 malls worldwide in terms of sales per square foot. Americana is a Glendale Galleria and the historic Alex Theatre, Downtown Glendale is home to over 300 tremendous regional “magnet” for shoppers. There are over 70 restaurants and shops at shops, boutiques, restaurants, theaters and spas. In addition, Downtown Glendale offers Americana, all easily accessed from Verdugo Village. weekly farmer’s markets and free concerts. With three outstanding hospitals, Glendale is also known for its exemplary medical care. Beyond Glendale’s “downtown core,” Recently opened in March at The Americana at Brand is the award-winning Bourbon Steak, smaller businesses serve residents and visitors throughout the community. from internationally acclaimed chef and restaurateur, Michael Mina. With five locations These are located in various neighborhoods including Montrose, La Crescenta, Kenneth around the country — each with a distinct ambiance and decor — Bourbon Steak offers Village, Adams Square, Glendale Courtyard (along Glendale Avenue) and other main modern American fare featuring all natural, organic and hormone-free cuts of beef that thoroughfares. are slow-poached in butter and cooked on a wood burning grill.

OFFERING MEMORANDUM CBRE, Inc. | 37 VERDUGO VILLAGE Market Overview

Entertainment Industry The booming entertainment industry is the largest employment sector in Glendale. Disney is Glendale’s largest employer, home to 4,243 employees on their 125-acre Grand Central Creative Campus situated on the western edge of the city adjacent to DreamWorks studios in Glendale.

A focal point of entertainment employment is the Media District in the city of Burbank, just three miles to the north. The Media District is home to Warner Brothers Studio and Warner Brothers Ranch, Walt Disney Studios and NBC. These studio lots are three of the largest motion picture/television facilities in the world. Universal Studios and The CBS Studio Center are located in the nearby cities of Universal City and Studio City, respectively.

In addition to employment at the actual studios, there are numerous sound studios, production offices, and ancillary supporting services in and around Burbank and Glendale. This space is occupied to a great extent by the numerous companies that require locations proximate to the major studios. The Walt Disney Company [6.5 miles from Verdugo Village] Grand Central Creative Campus (GC3) [4 miles from Verdugo Village] Disney’s main lot includes 100,000 square feet of sound stages along with 1.46 million Disney’s 125-acre Grand Central Creative Campus (GC3), is located in Glendale and square feet of offices. The Disney Animation Campus is located directly across from the expanded by an additional 338,000 square-feet in 2012. Additionally, a new six-story main studio lot. Disney recently purchased LucasFilm for $4.06 billion, with many industry office building surrounded by lush landscaping, palm trees, a fountain and a six-story insiders saying it may be Disney’s best acquisition since the company’s inception. parking garage has been endorsed by Glendale city officials. Beyond the Star Wars franchise, the acquisition of LucasFilm includes operating businesses The first phase of the Grand Central Creative Campus was completed in 2006 and is in live action film production, as well as a substantial portfolio of technologies specific to home to Walt Disney Imagineering, Disney Consumer Products and the KABC-TV studio. entertainment. Operational brands include LucasFilm, LucasArts, Industrial Light & Magic It is located on Flower Street near DreamWorks. The second phase plans to continue and Skywalker Sound. expansion through the space regularly through 2035, eventually reaching up to six million square-feet of office space (currently occupy 2.2 million square feet). The location Warner Brothers [7 miles from Verdugo Village] has been home to Walt Disney Imagineering since 1961, known at the time as “WED The Warner Brothers lot is set on 104 acres and Enterprises”. includes 540,000 square feet of sound stages and more than one million square feet of office DreamWorks SKG [4 miles from Verdugo Village] space. In September 2013, Warner Brothers DreamWorks headquarters and animation studios comprise 395,000 square feet of announced an expanded creative partnership office space. DreamWorks currently has expansion plans involving an additional 160,000 with world-renowned, best-selling author J.K. square feet of office space. DreamWorks, this year alone, announced the acquisition of Rowling. At the center of the partnership is a the Trolls Franchise, YouTube channel AwesomenessTv and London-based Chapman new film series from Rowling’s world of witches Entertainment, in addition to a multi-year content deal with Netflix and a 5-year licensing and wizards. agreement with Super RTL.

OFFERING MEMORANDUM CBRE, Inc. | 38 VERDUGO VILLAGE Market Overview

NBCUniversal [10 miles from Verduo Village] 655 North Central Ave (Glendale Plaza) [2.5 miles from Verdugo NBC’s main lot includes 1.1 million square feet of office and technical space as well as Village] 128,000 square feet of sound stages. NBC’s $1.6 billion expansion project, currently Glendale Plaza is the largest Class “A” office building in Glendale (532,815 SF), with underway, will include nearly two million square feet in office and production space. excellent freeway access, efficient column-free floor plates, spectacular views, state-of- Additionally, the expansion project calls for a makeover of Universal Studios theme park the-art technology and is LEED silver certified from the U.S. Green Building Council. The and Universal CityWalk entertainment and retail district, which includes the addition of a major tenants in the building are Unum Group, DreamWorks, Disney, Christie Parker & signature Harry Potter amusement ride in the theme park and a new bicycle path along Hale, Univision Communications and State Farm Insurance. the nearby Los Angeles River that will allow cyclists to ride to Studio City. 505 North Brand Boulevard [2.5 miles from Verdugo Village] CBS [11.5 miles from Verdugo Village] 505 North Brand Boulevard is a 16-story, Class “A” 319,864 square foot, office building CBS splits its operations among three locations in Los Angeles: Columbia Square in located in the heart of Glendale’s financial district. The building is home to a diverse Hollywood which houses the network’s local affiliates, TV City in the Fairfax District tenant roster including Arthur J. Gallagher & Co., United Healthcare, Developer Express which serves as the current master control facility for CBS’ west coast television network and Divide 9 Films operations, and The CBS Studio Center in Studio City, which is a full-service production facility that includes 18 sound stages and over 210,000 square feet of supporting office Glendale Center (611 North Brand) [2.3 miles from Verdugo Village] space. Glendale Center is a Class “A”, 14-story office building totaling 396,000± SF located directly off of the CA 134 in the heart of Glendale. Built in 1972 and renovated in 1996, Other Major Employers and Commercial Centers Glendale Center has consistently been awarded an Energy Star label for its operating Glendale has a diversified base of industries that continue to draw from the growth in efficiency every year since 2006. Glendale Center is currently home to The Walt Disney healthcare, finance, insurance and other service industries. Prominent companies with Internet Group and Yellow Pages who in combination occupy the majority of the building. a major presence in this market include Nestlé USA, CIGNA, DineEquity Inc. (IHOP/ Applebee’s), AJ Gallagher, State Compensation Insurance Fund, DreamWorks SKG, Walt 800 North Brand [2.2 miles from Verdugo Village] Disney Imagineering, LegalZoom, Whole Foods Western HQ, YellowPages.com, Vulcan 800 North Brand has exceptional views, a striking design, excellent ingress/egress to the Materials and the prestigious law firm of Christie Parker & Hale. Ventura (134) Freeway and is adjacent to the Monterey/Brand Beeline shuttle stop. Nestlé USA occupies approximately 80% of the 518,302 square foot building. Glendale City Center (101 North Brand Boulevard) [2 miles from Verdugo Village] Pinnacle I & II [7.5 miles from Verdugo Village] One of the premier projects in the Tri-Cities market, Glendale City Center is a Class Pinnacle I & II, located in Burbank, are Class “A” office buildings comprised of 393,776 “A”, 19-story office building comprising 408,034 SF, with 60,000 square feet of high- square feet and 231,864 square feet, respectively. Pinnacle I is currently leased to the end retail space, including BJ’s Restaurant, California Pizza Kitchen, Island’s and Olive highest-quality media and entertainment companies in Southern California, including Garden. Glendale City Center caters to a diverse and prominent tenant mix including Warner Music Group, NBCUniversal, Bravo, Sony, and Clear Channel, with Warner Music entertainment, technology insurance, and government firms such as LegalZoom.com, Group and Clear Channel Communications occupying a total of approximately 77% or DreamWorks, Kaiser Permanente, HealthNet, MSC Software Corporation and The State 303,000 square feet in the building. Pinnacle I is currently 100% leased to Warner Bros. of California. Entertainment, which includes the company’s film and television digital marketing group and the CW Network.

OFFERING MEMORANDUM CBRE, Inc. | 39 VERDUGO VILLAGE Market Overview

Yahoo Media Studios North [9.7 miles from Verdugo Village] Atwater Village Media Studios North is a 1.2 million square foot office park, situated on 19 acres of Atwater Village is a vibrant community in every aspect. This community continues to beautiful landscaped gardens. This premier campus environment is conveniently located attract new homeowners and renters while keeping residents that have lived there for adjacent to the Burbank-Glendale-Pasadena Bob Hope Airport. The first five phases of generations. Atwater is one of the most ethnically and economically diverse communities Media Studios North, totaling approximately 900,000 square feet, are fully leased with in Los Angeles County; the village is a place where artists, young professionals and an impressive tenant roster including Yahoo!, Technicolor, Kaiser Permanente, Residential working class people live side by side. Atwater property values remain relatively high with Funding Corp., Insomniac Games and ROVI. Media Studios North features extraordinary a low vacancy rate for both commercial and residential properties; also, the crime rate is amenities, including an on-site private health club, commissaries, an outdoor basketball one of the lowest in the area. and sand volleyball court, a nine-hole putting green, a jogging track and screening rooms. Eagle Rock Hollywood Eagle Rock is an ethnically diverse, relatively high-income neighborhood that is home to Within a twenty-minute drive of Verdugo Village are world-class shopping, dining, Occidental College. Eagle Rock maintains a number of historically significant buildings nightlife and entertainment and has a connection with the motion picture industry. The neighborhood is inhabited by a wide variety of ethnic and socioeconomic groups and the creative class. Over the destinations in Hollywood that attract tourists from around the globe, including The past decade the Eagle Rock and neighboring Highland Park have been experiencing Pantages Theatre, Hollywood & Highland, TCL Chinese Theater (formerly Grauman’s gentrification, as young urban professionals have moved from nearby neighborhoods Chinese Theatre), Dolby Theatre, El Capitan Theatre, Hollywood Palladium, ArcLight including Los Feliz and Silver Lake. A core of counter-culture writers, artists and filmmakers Cinemas and trendy restaurants and edgy nightclubs along Hollywood Boulevard. has been prominent in the town since the 1920s. Hollywood also is one of the strongest submarkets for office demand in the Los Angeles MSA, comprising roughly 3.1 million square feet. Major employers include: Live Nation, Colorado Boulevard CNN West Coast, Panavision, Time Warner, Fox, HBO, Universal Music Group, Technicolor, Colorado Boulevard is known for its popular restaurants including mainstay Casa Bianca, Paramount Pictures, Raleigh Studios, Capitol Records and Nielsen Media Research. The Oinkster, Cacao Mexicatessen, and in 2014 will welcome Eagle Rock Brewery Public House – a new restaurant from the popular local craft beer brewery.

Highland Park Highland Park has experienced economic highs and lows during its first 100 years, most recently enjoying a renaissance attracting young people who value the walkable urban lifestyle afforded by the older style of neighborhood. In the early 20th century, Highland Park and neighboring Pasadena became havens for artists and intellectuals who led the Arts and Crafts movement.

Los Feliz Los Feliz is an affluent hillside neighborhood in the central region of Los Angeles, California, abutting Hollywood to the west, and Glendale to the east and encompassing part of the Santa Monica Mountains. It is noted for its historic expensive homes and celebrity inhabitants.

OFFERING MEMORANDUM CBRE, Inc. | 40 VERDUGO VILLAGE Market Overview

Occidental College Occidental College is a private institution that was founded in 1887. It has a total undergraduate enrollment of 2,176 on a 120 acre campus. Occidental College is located in the suburban neighborhood of Eagle Rock, four miles from Verdugo Village. Students can choose from more than 100 clubs and organizations, and a handful of sororities and fraternities.

Art Center College of Design The Art Center College of Design, located in Pasadena eight miles from Verdugo Village, offers undergraduate and graduate programs in a wide variety of art and design fields, public programs for children and high school students and continuing studies for adults in the Los Angeles metro area. Art Center is particularly known for its Transportation (Automobile) Design, Product Design and Entertainment Art and Design programs. It is one of the few schools to offer a degree in Interaction Design and also has notable Photography, Graphic Design, Advertising, Illustration, Fine Art, Film and Environmental Design programs. Leading multinational companies including Apple, Sony, Nokia and BMW Designworks are known to recruit Art Center students on a regular basis, and many practicing artists serve as guest lecturers, exposing students to the business of art as well Educational System as their visual points of view. Adding to its reputation as a residential destination that has it all, Glendale has an outstanding public educational system, with students consistently outscoring the local, state and national standardized test averages. In fact, nine schools within the Glendale Unified School District have earned the National Blue Ribbon from the U.S. Office of Education, the highest designation for a public school. Additionally, 24 of the district campuses have earned the title of “State Distinguished School”, and 11 have earned the distinction of “Title I Achieving School” on top of employing a highly lauded teaching staff.

A variety of excellent parochial and independent schools are also located in and around the city. Glendale Community College, one of California’s largest two-year colleges with student enrollment of about 25,000 plus adult education enrollment of 10,000, enjoys a statewide reputation for excellence. Additional continuing education programs in the area include the Art Center College of Design, which was cited by BusinessWeek as one of the 60 best design colleges, and Occidental College, which was recently ranked by U.S. News and World Report as the country’s 36th best liberal arts college.

OFFERING MEMORANDUM CBRE, Inc. | 41 VERDUGO VILLAGE Market Overview

Transportation Four freeways provide direct access to the city of Glendale. The Foothill Freeway (Interstate 210) runs in a northwest/southeast direction at the northern end of the city. This freeway intersects with the Ventura Freeway in Pasadena (east of Glendale), traversing west through the northern portion of the San Fernando Valley. The Ventura Freeway (State Highway 134) runs east/west through the central portion of the city, providing access east through Pasadena and the San Gabriel Valley and west through the southern San Fernando Valley. The Golden State Freeway (Interstate 5) parallels the western boundary of the city in a northwest/southeast direction. This freeway is the primary north/south surface route through the state of California. It provides direct access between Glendale and downtown Los Angeles. The Glendale Freeway (State Highway 2) runs north/south in the eastern portion of the city. This freeway runs between the Foothill Freeway and the Golden State Freeway. Verdugo Village is well-located to benefit from access to the Glendale Freeway with linkage to the area’s other freeways. All four freeways have an adequate number of interchanges providing Glendale with centralized, convenient regional access.

Bob Hope International Airport Bob Hope Airport (BUR), located in the city of Burbank twelve miles from Verdugo Village, serves the northern Greater Los Angeles area, including Glendale, Pasadena, North Hollywood and the San Fernando Valley. It is closer to Griffith Park and Hollywood than Los Angeles International Airport (LAX) and is the only airport in the area with a direct rail connection to Downtown Los Angeles. The city of Glendale is also part owner of Bob Hope Airport. With several major airlines in service, the airport offers direct flights to major hubs across the country and the Pacific Rim. Approximately 4.1 million passengers traveled through the airport in 2012.

Larry Zarian Transportation Center The Glendale Transportation Center (GTC) is a main depot terminal where commuters arrive and depart by use of public transit (6 miles from Verdugo Village). Services that are available at the GTC include Metrolink, MTA, Glendale Beeline, Greyhound and Amtrak. Ten Pacific Surfliner trains serve the station daily and 54 Metrolink trains serve the station each weekday, as well as serving the Antelope Valley Line on Saturdays. Commuters may also park and ride by using one of the facilities 400 parking spaces. may also park and ride by using one of the facilities 400 parking spaces.

OFFERING MEMORANDUM CBRE, Inc. | 42 VERDUGO VILLAGE Market Overview

Demographics Griffith Park Glendale’s urban renaissance is drawing a young, dynamic population. The largest age With over 4,210 acres of natural terrain, landscaped parkland and picnic areas, Griffith brackets in the city of Glendale are now young adults age 25-34 (14.3%) and 35-44 Park is the largest municipal park with urban wilderness area in the United States. (15.7%). Average household incomes in the area exceed $75,000. Increasing numbers of Situated southwest of Verdugo Village in the Santa Monica Mountain range, the Park’s people in this age bracket are moving to Glendale seeking a lifestyle where they can work elevations range from 384 to 1,625 feet above sea level. Griffith Observatory is located and enjoy restaurants, entertainment and recreational amenities. on the southern slope of Mount Hollywood in Griffith Park and is an icon of Los Angeles. The Observatory is a national leader in public astronomy, a beloved civic gathering place, Well-located in the center of the Tri-Cities with excellent access to Downtown Los Angeles and one of Southern California’s most popular attractions. It is 1,134 feet above sea level and Hollywood as well as proximity to jobs and amenities, Glendale continues to attract and is visible from many parts of the Los Angeles basin. The park also includes the Greek one of the most vibrant tenant bases in Los Angeles County. Theatre, several golf courses, the Los Angeles Zoo and Botanical Gardens, horseback riding trails and multiple hiking trails. Glendale offers many neighborhood choices, from a lively downtown environment, to quiet, tree-lined streets that offer a feeling of small-town, suburban living. And with an ideal climate and picturesque setting, it is no secret why Glendale is called the “Jewel City”. Residents enjoy a mild climate with an average daytime temperature of 77 degrees. Summers and early fall are often in the 90s, winters typically in the 60s and 70s. Winters typically in the 60s and 70s.

Recreation and Culture Glendale offers many options for exercise and leisure. Numerous parks are conveniently accessed from Verdugo Village include baseball fields, group picnic areas, multipurpose courts, playgrounds, water-play areas and outdoor theatre. Glendale Sports Complex, located one mile from Verdugo Village, is a 27-acre park with soccer, softball and baseball fields. Golf courses in the area include the 18-hole Harding and Wilson Municipal, and 9-hole Roosevelt Municipal Golf Course. Glendale Central Library is located within three miles of the property while the Brand Library & Art Center is four miles to the west. The historic Alex Theatre is within three miles of the property and is the community’s premier performing arts venue.is the community’s premier performing arts venue.

OFFERING MEMORANDUM CBRE, Inc. | 43 VERDUGO VILLAGE Affiliated Business Disclosure and Confidentiality Agreement

CBRE, Inc. operates within a global family of companies This Memorandum contains selected information shall arise by reason of your receipt of this Memorandum with many subsidiaries and/or related entities (each an pertaining to the Property and does not purport to be or use of its contents; and you are to rely solely on “Affiliate”) engaging in a broad range of commercial real a representation of the state of affairs of the Property your investigations and inspections of the Property in estate businesses including, but not limited to, brokerage or the owner of the Property (the “Owner”), to be all- evaluating a possible purchase of the real property. services, property and facilities management, valuation, inclusive or to contain all or part of the information which investment fund management and development. At times prospective investors may require to evaluate a purchase The Owner expressly reserved the right, at its sole different Affiliates may represent various clients with of real property. All financial projections and information discretion, to reject any or all expressions of interest competing interests in the same transaction. For example, are provided for general reference purposes only and are or offers to purchase the Property, and/or to terminate this Memorandum may be received by our Affiliates, based on assumptions relating to the general economy, discussions with any entity at any time with or without including CBRE Investors, Inc. or Trammell Crow Company. market conditions, competition and other factors beyond notice which may arise as a result of review of this Those, or other, Affiliates may express an interest in the the control of the Owner and CBRE, Inc. Therefore, all Memorandum. The Owner shall have no legal commitment property described in this Memorandum (the “Property”) projections, assumptions and other information provided or obligation to any entity reviewing this Memorandum or may submit an offer to purchase the Property and may and made herein are subject to material variation. All making an offer to purchase the Property unless and until be the successful bidder for the Property. You hereby references to acreages, square footages, and other written agreement(s) for the purchase of the Property acknowledge that possibility and agree that neither CBRE, measurements are approximations. Additional information have been fully executed, delivered and approved by the Inc. nor any involved Affiliate will have any obligation to and an opportunity to inspect the Property will be Owner and any conditions to the Owner’s obligations disclose to you the involvement of any Affiliate in the sale or made available to interested and qualified prospective therein have been satisfied or waived. purchase of the Property. In all instances, however, CBRE, purchasers. In this Memorandum, certain documents, By receipt of this Memorandum, you agree that this Inc. will act in the best interest of the client(s) it represents including leases and other materials, are described in Memorandum and its contents are of a confidential nature, in the transaction described in this Memorandum and will summary form. These summaries do not purport to be that you will hold and treat it in the strictest confidence not act in concert with or otherwise conduct its business complete nor necessarily accurate descriptions of the full and that you will not disclose this Memorandum or any of in a way that benefits any Affiliate to the detriment of agreements referenced. Interested parties are expected its contents to any other entity without the prior written any other offeror or prospective offeror, but rather will to review all such summaries and other documents of authorization of the Owner or CBRE, Inc. You also agree conduct its business in a manner consistent with the law whatever nature independently and not rely on the that you will not use this Memorandum or any of its and any fiduciary duties owed to the client(s) it represents contents of this Memorandum in any manner. contents in any manner detrimental to the interest of the in the transaction described in this Memorandum. Neither the Owner or CBRE, Inc, nor any of their respective Owner or CBRE, Inc. This is a confidential Memorandum intended solely for directors, officers, Affiliates or representatives make any your limited use and benefit in determining whether you representation or warranty, expressed or implied, as to desire to express further interest in the acquisition of the the accuracy or completeness of this Memorandum or any Property. of its contents, and no legal commitment or obligation

© 2014 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

OFFERING MEMORANDUM CBRE, Inc. | 44 VERDUGO VILLAGE

FOR MORE INFORMATION PLEASE CONTACT:

INVESTMENT SALES SPECIALISTS: DEBT & EQUITY FINANCE SPECIALISTS:

OFFER DUE DATE: October 3, 2014 5:00PM Pacific Time https://www.cbremarketplace.com/VerdugoVillage/