DEVELOPMENT OPPORTUNITY 1601 I STREET Sacramento, CA

EXCLUSIVE LISTING AGENTS: KELLY RIVETT, Senior Managing Director MIKE RILEY, Senior Managing Director 916 569 2385 916 569 2329 [email protected] [email protected] CA RE License #01249433 CA RE License #00955165

Although all information furnished regarding property for sale, rental, or financing is from sources deemed reliable, such information has not been verified and no express representation is made nor is any to be implied as to the accuracy thereof and it is submitted subject to errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice and to any special conditions imposed by our principal. 17-0277•06/17 1601 I STREET

TERMS OF OFFERING

On behalf of the Owner of the property referenced herein (“Property”) present this Confidential Offering Memorandum (“Memorandum”) to assist the recipient(s) (“You” or “Your”) in evaluating the Property and it is intended for Your use only. This Memorandum contains brief, selected information pertaining to the Property and should not be considered all-inclusive or permanent. The information in this Memorandum has been obtained from sources believed to be reliable, but has not been verified and is not guaranteed. You should independently verify each item of information and have the same reviewed by Your tax advisor and/or legal counsel. Assumptions, projections, estimates and/or opinions are provided as examples only and all information is subject to changes, errors, omissions and/or withdrawal without notice. Broker and Owner assume no responsibility for and make no warranty as to the accuracy or completeness of any information in this Memorandum. Broker and Owner expressly disclaim any implied or expressed warranties of merchantability, fitness for a particular purpose or non-infringement of intellectual property relating to this Memorandum. In no event shall Broker or Owner be liable for any damages resulting from the reliance on or use of any information in this Memorandum, including but not limited to direct, special, indirect, consequential or incidental damages. By accepting receipt of this Memorandum, You agree to the following: (a) This Memorandum is of a highly confidential nature, will be held in the strictest confidence and shall be returned to Broker upon request; (b) You shall not contact any property manager, employee or tenant of the Property regarding the Property or this Memorandum, without prior approval of Broker or Owner; and (c) You understand and agree that Broker represents Owner and not You. Neither Broker nor Owner shall have any obligation to pay any commission, finder’s fee, or any other compensation to any broker or other person. By accepting receipt of this Memorandum, you agree to defend, indemnify and hold harmless Broker and Owner (including all of their agents, employees, subsidiaries, affiliated entities, successors and assigns) from and against any and all claims, disputes, litigation, demands, damages, liabilities, losses, judgments, expenses, fines, contributions, charges, injuries and/or costs and expenses, including reasonable attorneys’ fees, arising or resulting from acts by You.

Legal documents and reports summarized in this brochure are not intended to be comprehensive statements of the terms and contents of such documents and reports. Although Broker and Owner believe the information to be accurate, no warranty or representation is made as to its accuracy or completeness. Interested parties should conduct independent investigations and reach conclusions without reliance on materials contained herein.

The Property shall be sold AS-IS, WHERE-IS, WITH ALL FAULTS, and Seller makes no warranties, representations, certifications nor “to the best of my knowledge” type statements to the status of the Property, the improvements thereon, potential use, economic feasibility, environmental matters, the availability of development rights or permits or any other matters. Seller will not incur any obligations that extend beyond the Closing.

OFFERING PROCESS Offers should be delivered to the office of the Exclusive Listing Broker, Newmark Cornish & Carey, by fax at (916) To facilitate analysis of offers, prospective buyers are encouraged to provide information relative to: funding 920-0854, or by contacting: sources, experience in owning and operating similar properties, familiarity with the market and any other information which is likely to favorably reflect on the offerer’s ability to close this proposed transaction in a KELLY RIVETT, Sr. Managing Director MICHAEL RILEY, Sr. Managing Director timely manner. 916 569 2385 916 569 2329 [email protected] [email protected] CA RE License #01249433 CA RE License #00955165 1601 I STREET TABLE OF CONTENTS

EXECUTIVE SUMMARY

HOTEL COMPARABLES

MULTI-FAMILY COMPARABLES

REGIONAL OVERVIEW

SACRAMENTO ON THE RISE

1601 I STREET EXECUTIVE SUMMARY 1601 I STREET

EXECUTIVE SUMMARY

Newmark Cornish & Carey is pleased to present for sale, a unique development opportunity located with the “theater” district of Sacramento, CA. This purchase is comprised of one (1) 4,800 SF brick building within five (5) contiguous parcels totaling 25,600 SF or 0.58 acres.

The proposed development for this site is hotel or multifamily development.

Due to the nature of local supply and demand, Sacramento is in dire need of more hotel rooms. With a market fueled by continual growth, coupled with a shortage of available rooms, Sacramento is considered a top 5 market for hotel investors. Local occupancy rates sit just under eighty percent (80%) and room rates have increased for thirteen (13) straight quarters (TenX Research).

The multifamily real estate movement in Sacramento has been on “fire.” Occupancy levels are hovering around ±95% as a whole, with some submarkets topping off at 99%. Sacramento’s apartment rent growth is #1 in the nation and has experienced double digit income growth the past few years.

In a growth market with little to no infill opportunity, this ¼ city block of perfectly flat and well located dirt makes this long term investment appealing to both local and non-local developers. 1601 I STREET

OFFERING SUMMARY PARCEL MAP

Offering Price: Unpriced

Address: 1601-1613 I Street 817 16th Street Sacramento, CA 95814

Property Type: Parking Lot/Event Center (current) Hotel (proposed) Multi-family (proposed) Building SF: One (1) Structure - 4,800 SF (leased) Parcel 006-0063-013 (0.15 Acre) Information: 006-0063-014 (0.15 Acre) 006-0063-015 (0.07 Acre) 006-0063-016 (0.07 Acre) 006-0063-017 (0.15 Acre) Parcel Size: 25,600 SF or 0.58 Acre

Frontages: 160’ on I Street 160’ on 16th Street

Zoning: C-2 - NC

PROPOSED HOTEL DEVELOPMENT 1601 I STREET

INVESTMENT HIGHLIGHTS

• Hotel Development Site • Multifamily Development Site • Top 5 Market for Hotel Investors • #1 in Nation - Rent Growth • Location, Location, Location • Location, Location, Location • 13 Straight Quarter Increases: Room • 3 Straight Years - Double Digit Income Rates & RevPar Growth • Sacramento Demand for Hotel Rooms • Demand Outpacing Supply Outpacing Existing Supply • Downtown Occupancy Rates is • Sacramento Hotel Occupancy Rates Around 96% Just Under 80% • Close Proximity to Memorial Auditorium, Sacramento Convention Center, Governor’s Mansion and Wells Fargo Pavilion • Average Daily Traffic (ADT) at 16th and I Streets: 21,913 • Existing Income in Place (Parking and Building Tenant) 1601 I STREET HOTEL COMPARABLES 1601 I STREET

SACRAMENTO HOTELS

EXISTING

Hyatt Regency 503 Rooms Built 1988

Sheraton 503 Rooms Built 2001

Embassy Suites 242 Rooms Built 2002

Residence Inn (Downtown) 235 Rooms Built 2007

The Citizen 196 Rooms Built 2008

The Westin Sacramento 102 Rooms Built 2008

PROPOSED Sawyer Hotel 250 Rooms Estimated Completion - 2017 Hyatt Central 162 Rooms Estimated Completion - 2018 Paragary Hotel (28th & Capitol) 101 Rooms Estimated Completion - TBD

1601 I STREET

COMPARABLE HOTEL MAP 1601 I STREET MULTI-FAMILY COMPARABLES 1601 I STREET

EXISTING DOWNTOWN/MIDTOWN MULTI-FAMILY PROPERTIES Property Year # Units Unit Mix Avg Unit Size Avg Rent $/SF Built 1 800 J Street 2006 225 Studio 590 $1,532 $2.60 1/1 808 $1,783 $2.21 2/2 929 $2,000 $2.15

2 16 Powerhouse 2015 50 1/1 813 $2,463 $3.03 1606 P street 2/2 1,174 $3,320 $2.83

3 Eviva Midtown 2016 118 Studio 754 $2,000 $2.65 1531 N Street 1/1 738 $2,304 $3.12 2/2 1,110 $2,880 $2.59

4 1801 L Street 2006 164 Studio 497 $1,473 $2.96 1/1 757 $1,921 $2.54 2/2 1,058 $2,583 $2.44

5 Legado De Ravel 2013 84 1/1 780 $1,886 $2.41 1520 16th Street 2/2 1,080 $2,412 $2.23

6 LinQ Midtown 2009 275 Studio 616 $1,200 $1.95 3111 S Street 1/1 781 $1,830 $2.34 2/2 1,100 $2,351 $2.13 1601 I STREET

EXISTING DOWNTOWN/MIDTOWN MULTI-FAMILY PROPERTIES

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1 5 1601 I STREET REGIONAL OVERVIEW 1601 I STREET 1601 I STREET

REGIONAL MAP 1601 I STREET

REGIONAL OVERVIEW

SACRAMENTO HIGHLIGHTS BUSINESS CLIMATE AND WORKFORCE

The Sacramento region is comprised of 100 square miles and is With a unique and increasingly healthy mix of economic opportunities located 75 miles northeast of and 90 miles southwest for companies and job seekers alike, the Sacramento Region has of Lake Tahoe. With roughly 2.2million residents, Sacramento serves experienced strong population and steady job growth over the last as the capitol city of , the sixth largest economy in the few decades and is expected to outpace the national average by world. Sacramento is undergoing a renaissance where rich history, a more than double over the next ten years. This growth is credit to the diversified business climate, agriculture affluence, and quality of life diversification and strength of the region’s economic base—with a has drawn national attention. shift from primarily government employment to include private sector employment that now represents dynamic and expanding industries Government Employed 25% including high technology, life sciences, agriculture, hospitality, Current Unemployment Rate 5.5% education, healthcare, and clean energy technology. In fact, the Sacramento has experienced a population growth of 21% since year renewable energy and clean energy technology industries have been 2000 investing in the Sacramento Region at levels never seen before and Population Growth Between an increasing number of national and international firms are choosing 5% 2010-2015 the Sacramento Region as their base of operations for the United States.

In addition to the Sacramento Region’s strengths for traditional businesses, including lower costs, a positive business climate, and high quality of life, the region is seeing a new wave of technology companies moving to the area to take advantage of an entirely new set of competitive advantages. These advantages include strong educational and research institutions, location of the state capital, proximity to the San Francisco Bay Area, an emerging venture capital network, premier sites and facilities, and a qualified technical workforce. 1601 I STREET

REGIONAL OVERVIEW

SACRAMENTO REGION EMPLOYMENT BY INDUSTRY

1.5% 1.5% 1% 3% 4%

Government- State and Federal 5% 25% Transportation, Trade and Utilities

Health and Education Services 5% Professional and Business Services

Hospitality and Leisure

Financial Activities

10% Construction

Manufacturing LARGEST SACRAMENTO REGION EMPLOYERS PRIVATE SECTOR Other Services 16% Information Services Company Employees

13% Agriculture UC Davis Health Systems 9,900 Sutter Health 7,300 Mining and Logging Kaiser Permanente 6,900 15% Intel Corporation 6,000 AT&T 4,700 Raley’s Inc. 3,200 Hewlett Packard 3,200 Apple Inc. 2,500 Wells Fargo 2,500 VSP Global 2,300 Health Net of California 2,300 1601 I STREET

REGIONAL OVERVIEW

TRANSPORTATION AND ACCESS

The Sacramento region is a transportation hub and offers an array access to many destinations. • Major Highways - Interstate 5, Highway 99, Highway 80 • Freight/Passenger Trains - Amtrak and Regional Transit Light Rail • Bus Lines - Regional Transit and Greyhound • Sacramento International Airport • Deep-Water Shipping Port • Bicycling (Ranked 5th in the United States for Bike Friendly Cities)

COLLEGES AND UNIVERSITIES PROFESSIONAL SPORTS TEAMS

• California State University Sacramento (CSUS) - 30,284 Students • (NBA) • University of California – Davis (UCD) - 32,000 Students • Sacramento River Cats • Sacramento City College - 24,000 Students (Minor League Baseball - SF Giants Affiliation) • American River College - 32,000 Students • Sacramento Republic • Sierra College - 20,000 Students (Professional Soccer Team- United Soccer League) • Sacramento Express (Professional Rugby)

SACRAMENTO ATTRACTIONS

• Sacramento State Capitol • California Railroad Museum • Sacramento Community Theater • Sutter’s Fort • Crocker Art Museum • Cal Expo • Sacramento Convention Center • Old City Cemetery • Many other galleries, breweries, museums and theaters not mentioned • American River Parkway • Old Sacramento

• Golden 1 Entertainment Center • Wells Fargo Pavilion • Sacramento Zoo 1601 I STREET SACRAMENTO ON THE RISE 1601 I STREET

SACRAMENTO ON THE RISE

1. 2. 700 BLOCK OF K STREET 3. RAILYARDS 4. METRO CROSSING 14 5. WAREHOUSE ARTIST LOFTS (WAL) 6. 800 BLOCK OF K 7. M.A.Y BUILDING 3 13 8. 19J (MOHANNAS) 4 9. YAMANEE 10. 21ST AND U STREET 242028 12 12627 11. SUTTER PARK 2 6 21 7 12. MCKINLEY VILLAGE 25 8 13. SOCCER STADIUM 9 14. POWERHOUSE SCIENCE CENTER 11 15. STOCKTON AND T 5 23 1918 17 16. THE MILL AT BROADWAY 17. THE ICE BLOCKS 22 10 18. SUTTER MEDICAL CENTER SACRAMENTO 16 19. B STREET THEATRE 15 20. VANIR TOWER 21. HYATT CENTRIC 22. SACRAMENTO NATURAL FOODS CO-OP 23. MIDTOWN QUARTERS 24. D.O. MILLS BANK BUILDING 25. SACRAMENTO COMMONS 26. KIMPTON PLAZA TOWER (THE SAWYER) 27. DOWNTOWN COMMONS 28. KAISER PERMANENTE DOWNTOWN CLINIC 1601 I STREET

SACRAMENTO ON THE RISE

CURRENT PROJECTS AND PROJECTS TO WATCH

GOLDEN 1 CENTER community room on the upper level of the historic “WT Grant” building, The Golden 1 Center is a $477 million project by the Sacramento fitness room, underground parking, residential storage closets, and more. Basketball Holdings, LLC and City of Sacramento to develop the former Sacramento Downtown Plaza into a multi-use indoor venue for RAILYARDS entertainment and sporting events in four city blocks within Downtown Located just north of Downtown and south of the River District, the Union Sacramento. The Golden 1 Center is expected to host 150 days of events Pacific Railyards that once served as the western terminus of the 1860s and will seat 17,500. The development project will add up to 1.5 million Transcontinental Railroad, will soon be transformed into a dynamic, square feet of additional development, branded DOCO, that will include urban mixed-use hub for residents, workers, and visitors. 475,000 square feet of office, 350,000 square feet of retail, a 250-room The 244-acre development would include 1 million sq. ft. of retail, 5 million Kimpton hotel, and 44 residential units. sq. ft. of office, housing, theaters, parks, hotels, museums, a Kaiser Permanente hospital, and a proposed Major League Soccer stadium.

700 BLOCK OF K STREET The Railyards specific plan envisions high-rise housing with 6,000 residential units. Most of the railyard would be designated as a central D&S Development and CFY Development proposed a $55.4 million business district, with residential, retail, and office space. The area mixed-use project that will rehabilitate the 700 block of K Street. The surrounds the central shops buildings and includes east of 7th Street, project will consist of 12-15 retail spaces, predominantly including an where the proposed stadium would be. all star lineup of predominantly local restaurants, retail, and nightlife. Proposed above the retail are 137 mixed-income apartments of varying In the northwest corner of the property, the designation of a hospital sizes and rent levels, ranging from affordable studios to penthouses. district would be for a planned Kaiser Permanente medical center. At the There is a significant amount of project amenities including a must see far eastern end of 10th Street, the designation would be commercial with mostly smaller businesses, such as repair shops and warehousing.

Source: Sacramento Business Journal and Downtown Sacramento Partnership 1601 I STREET

SACRAMENTO ON THE RISE

21ST AND U STREET Built primarily for a Major League Soccer team, the railyard stadium also Submitted by architect Michael Martin, this project calls for a 5 story could be used for concerts and other events. With about 450,000 square mixed-use complex with 15 residential units, 5,300 sq of office space, feet, the stadium would accommodate up to 25,000 people. and 925 sq feet of retail space. The 21,426 sq ft. project will include a rooftop patio, a cafe, and parking behind the cafe on the first floor. POWERHOUSE SCIENCE CENTER Educational science center with interactive exhibits, planetarium, science SUTTER PARK labs and classrooms. The first phase involves new construction, while The approved plan for the new Sutter Park Neighborhood includes 100 the second involves revamping a former Pacific Gas and Electric power to 125 homes designed in iconic East Sacramento fashion. This includes station. a mixture of classic architectural styles, from traditional park homes and cottages to mixed-use housing. Secondary units over garages also STOCKTON AND T provide opportunities for flexible, multigenerational living. Plans call for a vacant 120,000-foot office building to be replaced with a largely residential mixed- used project. In addition to 21 single-family MCKINLEY VILLAGE homes, the project would have a five-story building with 214 apart- ments McKinley Village by The New Home Company connects you to everything built over 5,000 square feet of first-floor retail. that matters in your life. Located at the apex of classic and progressive in East Sacramento, McKinley Village is a community of 336 single-family THE MILL AT BROADWAY residences that is seamlessly integrated into the fabric of the surrounding A residential project with 800 homes ranging from 500 square feet to neighborhoods with paths extending in every direction. Mid-town’s 1,500 square feet. It will include a four-acre park and 11,000-square- thriving cultural scene is just a short bike ride away. foot community center. Park’s myriad of outdoor activities is within easy walking distance. McKinley Village was designed with social interaction in mind as well as the demands of a new generation of homebuyers. The community will feature a 4,000 square foot Recreation Center, residences pre-wired for solar and building standards reflecting the best environmental practices of the day.

SOCCER STADIUM 1601 I STREET

SACRAMENTO ON THE RISE

THE ICE BLOCKS VANIR TOWER This project is transforming three parcels on R Street into residential, A 26-story or taller office tower kitty-corner to the 16-story mixed use/hotel retail, office and restaurant space. being built by the Sacramento Kings and JMA Ventures. In addition to office, it would have ground-floor retail and six floors of parking. Tenants would include One parcel, the former Crystal Ice plant, was destroyed by a massive Vanir, the regional headquarters for a major West Coast bank and restaurants. fire in late November. New plans for the site, now dubbed Ice Rally Cap, call for two buildings of more than 174,000 square feet. There would be 85,000 to 100,000 square feet of office space, 14,000 to 47,00 square HYATT CENTRIC feet of retail and up to 17,000 square feet of restaurant space. An 11-story Hyatt Centric hotel with 159 rooms would replace the Jade Apartments and the Marshall Hotel, which would be gutted but its facade The second parcel, Block 2, will have 145 apartments. The last block, would be left intact. called The Orchard, will feature a preserved façade and a cluster of offices and retail. SACRAMENTO NATURAL FOODS CO-OP New store will have 26,000 square feet on the ground level and a 16,000 SUTTER MEDICAL CENTER SACRAMENTO square-foot mezzanine level with office space for the co-op. Construction of the 10-story, 400,000-square foot Anderson Lucchetti Women’s and Children’s Center, plus renovation of Sutter General MIDTOWN QUARTERS Hospital, now known as the Ose Adams Medical Pavilion. Multiphase project of mostly new residential units, including 32 for-sale townhomes and more than 200 apartments. B STREET THEATRE The 45,000-square- foot complex will have two theaters, one with 250 seats and the other with 365 seats. The larger venue will D.O. MILLS BANK BUILDING replace the theater’s current location at 27th and B streets. The bottom three floors of this six-story historic bank building would be converted to a public market and dining hall. The top three floors would remain office space. 1601 I STREET

SACRAMENTO ON THE RISE

SACRAMENTO COMMONS DOWNTOWN COMMONS Multi-phase project would include two seven-story buildings, This urban retail center is the redevelopment of the former each with 206 apartment units, 4,000 square feet of neighborhood Downtown Plaza. One component, Plaza West, will include the retail and three floors of parking. As part of the project, 84 existing existing Macy’s, a remodeled Century movie theater and 28,000 apartments dating to the 1960s will be demolished. square feet of new retail space. The other component, Plaza East, will include the existing 24 Hour Fitness and 12,270 square feet of retail.

KIMPTON PLAZA TOWER (THE SAWYER) KAISER PERMANENTE DOWNTOWN CLINIC A 16-story mixed-use tower across the plaza from Golden 1 Kaiser purchased a mostly vacant six-story office building in Center. It will include a Kimpton-branded hotel, 35,000 square feet late 2014 and is remodeling it into an outpatient medical clinic. of office, 45,000 square feet of retail on the first three floors and 69 It plans to add about 4,300 square feet to the 392,270 square- high-end condominiums on the top. foot building. Project will include a four-story parking garage and a bike-share station. 1601 I STREET SACRAMENTO, CA

KELLY RIVETT, Senior Managing Director MIKE RILEY, Senior Managing Director 916 569 2385 916 569 2329 [email protected] [email protected] CA RE License #01249433 CA RE License #00955165

980 Ninth Street, Suite 2500, Sacramento, CA 95814 T 916.920.4400 F 916.920.0854 www.newmarkccarey.com