OFFERING MEMORANDUM 3430 W. Lincoln Avenue Anaheim, CA 92801 CAPITAL MARKETS | INVESTMENT PROPERTIES AFFILIATED BUSINESS DISCLOSURE CBRE, Inc. operates within a global family of companies with many subsidiaries and related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates, including CBRE Global Investors, Inc. or Trammell Crow Company, may have or represent clients who have competing interests in the same transaction. For example, Affiliates or their clients may have or express an interest in the property described in this Memorandum (the “Property”), and may be the successful bidder for the Property. Your receipt of this Memorandum constitutes your acknowledgement of that possibility and your agreement that neither CBRE, Inc. nor any Affiliate has an obligation to disclose to you such Affiliates’ interest or involvement in the sale or purchase of the Property. In all instances, however, CBRE, Inc. and its Affiliates will act in the best interest of their respective client(s), at arms’ length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and its Affiliates will conduct their respective businesses in a manner consistent with the law and all fiduciary duties owed to their respective client(s). CONFIDENTIALITY AGREEMENT 1 Executive Summary Your receipt of this Memorandum constitutes your acknowledgement that (i) it is a confidential Memorandum solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property, (ii) you will hold it in the strictest confidence, (iii) you will not disclose it or its contents to any third party without the prior written authorization of the owner of the Property (“Owner”) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any manner detrimental to the Owner or CBRE, Inc. 2 Investment & Location Highlights If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return it to CBRE, Inc. DISCLAIMER 3 Property Description This Memorandum contains select information pertaining to the Property and the Owner, and does not purport to be all-inclusive or contain all or part of the information which prospective investors may require to evaluate a purchase of the Property. The information contained in this Memorandum has been obtained from sources believed to be reliable, but has not been verified for accuracy, completeness, or fitness for any particular purpose. All information is presented 4 Tenant Overview | Lease Abstract “as is” without representation or warranty of any kind. Such information includes estimates based on forward-looking assumptions relating to the general economy, market conditions, competition and other factors which are subject to uncertainty and may not represent the current or future performance of the Property. All references to acreages, square footages, and other measurements are approximations. This Memorandum describes certain documents, including leases and other materials, in summary form. These summaries may not be complete nor accurate descriptions of the full 5 Market Overview | Demographics agreements referenced. Additional information and an opportunity to inspect the Property may be made available to qualified prospective purchasers. You are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent legal and financial advisors, and carefully investigate the economics of this transaction and Property’s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK. The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions at any time with or without notice to you. All offers, counteroffers, and negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have any legal commitment or obligation except as set forth in a fully executed, definitive purchase and sale agreement delivered by the Owner. 1 Executive Summary ANAHEIM 2 Investment & Location Highlights 3 Property Description 4 Tenant Overview | Lease Abstract 5 Market Overview | Demographics Alan Krueger Vanessa Haddad Senior Vice President Associate +1 909 418 2062 +1 909 418 2143 [email protected] [email protected] Lic. 00880814 Lic. 01926324 Executive Summary ILK MILK SHOPPING LIST 3430 W LINCOLN AVENUE | ANAHEIM, CA 92801 | ANAHEIM, CA AVENUE W LINCOLN 3430 4 1 The Offering Executive Summary Price: $6,300,000 NOI: $290,556 Cap: 4.6% GLA: 26,414 SF Price PSF: $238/PSF Term: 10 Years Ownership Type: Fee Simple Increases: 10% every 5 Years Options: Three 5-year Options Lease Start & End: 10.31.19 - 10.31.29 Guaranty: Corporate Tenant: Grocery Outlet Inc. Lease Type: NNN Landlord Responsibilities Roof, Structure, & Foundation* *Note: 10-Year transferable roof warranty in place for buyer 3430 W LINCOLN AVENUE | ANAHEIM, CA 92801 | ANAHEIM, CA AVENUE W LINCOLN 3430 6 7 LocationInvestment Highlights & ILK MILK SHOPPING LIST 3430 W LINCOLN AVENUE | ANAHEIM, CA 92801 | ANAHEIM, CA AVENUE W LINCOLN 3430 8 2 Investment Highlights • Below Market Rents: Grocery Outlet is currently paying under • Brand New Pride of Ownership Asset: the newly redeveloped a dollar per square foot ($0.91/PSF) in rent, which provides low prototype building, includes a new 10-year roof warranty and new occupancy costs to the tenant, hence, stability. upgrades to the building. • Corporate Guarantee by Grocery Outlet (NASDAQ: “GO”) with a • Prominent Signage: on Lincoln Avenue, a major freeway exit, market capitalization of over USD $2.98B provides the investor with further optimizes visibility and traffic. a premier investment-grade tenant. Ideal 1031 Exchange Replacement Property • No Existing Financing in Place: delivered free and clear of any • New, Long Lease Term: recently signed 10-year lease plus three existing debt, permitting an investor to purchase for cash or obtain 5-Year Options to renew. new financing tailored to an investor’s LTV and terms. • Limited Landlord responsibilities: newly redeveloped building with • Trophy Asset: located in the heart of Anaheim, one of Orange limited Landlord responsibilities makes this Property an Ideal 1031 County’s most dense, infill trade areas, STNL Grocery Outlet exchange property or portfolio asset. provides a great addition to any investor’s portfolio. Location Highlights • Significant Frontage and Visibility: unmatched visibility from the • Prime, Major Intersection Location: Grocery Outlet is located on signalized hard corner, with over 270 feet of frontage on Lincoln the southeast intersection of Lincoln Ave & Knott Ave which boasts Avenue, a major freeway exit with over 22,000 CPD. 52,000+ cars per day; both roads are major freeway exits off the 605, 91, and 5 Freeways. • High Barriers to Entry: Anaheim is a supply-constrained, infill trade area with limited sites available for future development creating high barriers to entry, securing the tenants long term growth and success. Dense, Infill Orange County Demographics • More than 39,000 people located within a 1-mile radius with an • Located just 2 miles south of Knott’s Berry Farm which brings in Average Household Income exceeding $79,000. over 6 million visitors annually. • More than 261,000 people located within a 3-mile radius with an • Located just 6 miles east of the world-famous Disneyland Park, Average Household Income exceeding $91,500. which brings in over 18.6 million visitors a year, making it the second most visited amusement park in the world. • More than 675,000 people located within a 5-mile radius with an Average Household Income exceeding $95,000. 11 Property Description ILK MILK SHOPPING LIST 3430 W LINCOLN AVENUE | ANAHEIM, CA 92801 | ANAHEIM, CA AVENUE W LINCOLN 3430 12 3 Property Description ADDRESS 3430 W LINCOLN AVE, ANAHEIM, CA 92801 APN 135-331-24 PARKING 125 BUILDING AREA 26,414 SF LOT 2.04 AC LAND USE GENERAL COMMERCIAL YEAR BUILT/RENOVATED 3430 W LINCOLN AVENUE | ANAHEIM, CA 92801 | ANAHEIM, CA AVENUE W LINCOLN 3430 1965/2019 14 SUBJECT PROPERTY 15 Tenant Overview Lease Abstract ILK MILK SHOPPING LIST 3430 W LINCOLN AVENUE | ANAHEIM, CA 92801 | ANAHEIM, CA AVENUE W LINCOLN 3430 16 4 Grocery Outlet Company Tenant Overview Facts at a Glance 337 GROCERY OUTLET COMPANY OVERVIEW LOCATIONS Company Type Publicly Traded Headquarters Emeryville, California $2.29B IN ANNUAL REVENUE Employees 501-1000 nationally Stock Symbol NASDAQ: GO $399.6M RAISED IN IPO, Credit Rating B2 Positive $150M MORE THAN Website www.groceryoutlet.com PROJECTED Market Locations: 337 US locations $652.5M Grocery Outlet’s mantra is simple: finding brand-name groceries and farm fresh IN NET SALES, A 13.1% produce at up to 40%-70% off conventional retail prices. All products sold by Grocery Outlet are purchased directly from manufacturers, not other retail INCREASE FROM THE stores. The Grocery Outlet Bargain Market brand currently includes over 330 PREVIOUS QUARTER stores across California, Nevada, Oregon, Idaho, Washington and Pennsylvania. The company recently (June 2019) began trading on the public market with $20.6M shares launching above its expected pricing for its initial public offering. IN NET INCOME, A