Confidential Offering Memorandum

Below-Market Assumable Financing

Marin Gateway Shopping Center Marin City, Confidential Offering Memorandum Marin Gateway Shopping Center Marin City, California

Exclusively Listed By: Table of Contents: M. Daniel Wald Partner - Investments 415-677-0461 TAB I: Disclaimer & Confidentiality Agreement i TAB V: Market Analysis 29 [email protected] - Marketing Process - Local Market Overview LIC #01173111 - Anticipated Project Timeline - Marin County Retail Vacancy & Asking Rates - Recent Marin County Lease Comparables David Nord - Sales Comparables Investment Associate TAB II: investment Overview 1 - Investment Opportunity 415-677-0460 TAB VI: Financial Analysis 43 [email protected] - Investment Summary - Financial Overview LIC #01378405 - Financial Highlights - Below Market, In-Place Financing - 10-Year Projection of NOI & Cash Flow Steve Holm - Investment Highlights - Refinance Sensitivity Investment Associate - Property Overview - Financial Model Assumptions 415-568-3403 - Market Overview - Investment Assumptions [email protected] - Demographic Summary - Tenant Expense Reimbursement Schedule LIC #01502110 - Market Leasing Assumptions

- In-Place Rents/Market Leasing Assumptions Site Plans 4 TAB III: location - Market Leasing Assumptions - Aerials Market Leasing Advisors: - Rent Roll - Bay Area Regional Overview Mark Koenig - Marin County Overview Partner 415-451-2404 [email protected] TAB IV: Property Description 12 LIC #00848131 - Property Photographs - Tenant Roster & Site Plan John Schaefer - Parcel Map Partner - Site Data 415-451-2407 - Improvements Data [email protected] - Major Tenant Profiles LIC #01251740 - Discussion of Significant Lease Provisions & Property Matters

201 California Street, Suite 800 - Lease Expirations , California 94111 - Under vs. Over Market Rents Analysis www.ctbt.com Marin Gateway Shopping Center Marin City, CA

Disclaimer & Confidentiality Agreement

This confidential Offering Memorandum (“Memorandum”) is being delivered Seller expressly reserves the right, at its sole discretion, to reject any offer to subject to the terms of the Confidentiality Agreement signed by you (“Confiden- purchase the Property or to terminate any negotiations with any party at any tiality Agreement”) and constitutes part of the confidential property information time with or without written notice. Seller shall have no legal commitment or (“Confidential Information”). It is being given to you for the sole purpose of obligation to any prospective purchaser unless and until a written sale agree- evaluating the possible acquisition of Marin Gateway Shopping Center, Marin ment has been fully executed, delivered and approved by Seller and any condi- City, California (“Property”) and is not to be used for any other purpose or tions to Seller’s obligations thereunder have been satisfied or waived. made available to any other party without the prior written consent of the seller Seller has retained Broker as its exclusive broker and will be responsible for any (“Seller”) or Cassidy Turley BT Commercial (“Broker”). commission due to Broker in connection with a sale of the Property pursuant This Memorandum was prepared by Broker based on information supplied by to separate agreement. Broker is not authorized to make any representation or Seller and Broker. It contains selected information about the Property and the agreement on behalf of Seller. real estate market, but does not contain all the information necessary to evalu- This Memorandum is the property of Seller and Broker and may be used only ate the acquisition of the Property. The financial projections contained herein by parties approved by Seller or Broker. No portion of this Memorandum may (or in any other Confidential Information) are for general reference only. The be copied or otherwise reproduced or disclosed to anyone except as permitted projections are based on assumptions relating to the general economy and local under the Confidentiality Agreement. competition, among other factors. Accordingly, actual results may vary materi- ally from such projections. Various documents have been summarized herein to facilitate your review; these summaries are not intended to be a comprehensive statement of the terms or legal analysis of such documents. While the information contained in this Memorandum and any other Confiden- tial Information is believed to be reliable, neither Broker nor Seller guarantees its accuracy or completeness. Due to the foregoing and since the Property will be sold on an “As Is, Where Is” basis, a prospective purchaser must make its own independent investigations, projections, and conclusions regarding the acquisition of the Property without reliance on this Memorandum or any other Confidential Information. Although additional ConfidentialI nformation, which may include engineering, environmental or other reports, may be provided to qualified parties as marketing proceeds, prospective purchasers should seek advice from their own attorneys, accountants, engineering, environmental, and other experts.

i Marin Gateway Shopping Center Marin City, CA

Marketing Process Review Period & Deadline for Offers Cassidy Turley BT Commercial has been authorized to prepare and distribute After an initial review period, we will announce a deadline for offers and the enclosed data for the purpose of soliciting offers to purchase from inter- expressions of interest. At that point, the Owner may selectively distrib- ested and qualified parties. You are invited to review this opportunity and make ute additional data to interested parties who have submitted compelling, an offer to purchase based upon your analysis. qualified proposals by the bid deadline.

Asking Price Buyer Negotiation & Selection The Property is being offered without an asking price. Each investor should If your offer results in the Seller choosing to open negotiations with you, base its offer on the “As Is, Where Is” condition of the property. you may be asked to provide financial references. The eventual Buyer will be chosen based on an assessment of price, terms, and a demon- strated ability to close the transaction. Anticipated Project Timeline Due Diligence Period April May June July 5 12 19 26 3 10 17 24 31 7 14 21 28 5 12 19 26 The selected Buyer will be afforded a fixed period of time 1 Distribute Offering Memorandum to perform its due diligence 2 Property Tours on the Property and will be encouraged to begin due dili- 3 Call for Offers gence upon the execution of an 4 Review Offers accepted letter of intent. The Buyer will be provided a draft 5 Select Buyer purchase & sale agreement by 6 Negotiate Purchase and Sales Agreement the Seller. The executed pur- chase and sale agreement will 7 Buyer’s Due Diligence Period and Removal of Contingencies be accompanied by an initial deposit. A significant additional 8 Estoppels and Removal of Final Closing Conditions deposit will be required with 9 CLOSING the Buyer’s removal of contin- gencies prior to the end of the due diligence period.

ii Marin Gateway Shopping Center, Marin City, CA Executive Summary

Investment Opportunity Investment Summary The acquisition of Marin Gateway Shopping Center will provide an investor the Property: Marin Gateway Shopping Center opportunity to own a regionally-drawing, high-quality promotional/community shopping center with significantly below-market, in-place assumable debt. Its Price: Best Offer location provides a very-high-income market area with extremely high barriers In-Place Assumable Financing $28,940,000 to the development of new competition. Maturity Date: March 6, 2015 Due to its high-leverage below-market-rate financing, Marin Gateway will pro- vide an investor a very attractive leveraged yield. Interest Rate: 5.47% Aptly named, the Property is located immediately north of the Golden Gate Year Built: 1996 Bridge at the gateway to Marin County, one of the nation’s wealthiest commu- Total Square Footage: 181,700 SF nities. Offering excellent visibility and access from US Highway 101 and its *Leasable Square Footage: 177,700 SF * 115,000 cars per day traffic, Marin Gateway offers its retailers an unparalleled location for capturing regional shoppers. A sample of the tenants Include: Address: 100 Donahue Street Marin City California Anchors: Jr. Anchors: Pad & In-Line Tenants: Number of Parcels: Four • Best Buy • Sleep Train • Starbucks • Ross • Dollar Tree • Burger King Parcel Numbers: 052-490-03, 05, 06, 07 • CVS • Panda Express Site Area: 21.15 Acres • Babies R’ Us • Outback Steakhouse

Since its original development in 1996 as a grocery-anchored center, the Prop- * Difference between total square footage and leasable square footage due to erty has experienced a steady enhancement of its tenancy and market position. long-term lease with public library which does not pay rent but does reimburse Given the growth of disposable income in Marin Gateway’s trade area and the CAM charges. Property’s competitive position within it, the potential exists for a continued and substantial improvement in the tenancy and income stream. This upside potential adds to the attractiveness of the offering.

1 Executive Summary / Marin Gateway Shopping Center

Financial Highlights Investment Highlights:

Price: Best Offer • A 181,700 square foot regionally-drawing promotional/community shopping In-Place NOI $2,782,566 center Projected Year-1 NOI $3,029,939 • Anchored by Best Buy, Ross, Babies R Us, and CVS Projected Year-2 noi $3,246,592 • Over 93% leased with high-identity, regionally and neighborhood drawing, Projected Year-10 noi $3,829,346 retail tenants • Significant upside potential on lease-up and tenant rollover Below-Market, In-Place Financing • Fee Simple offering - land and improvements Balance $28,940,000 Interest Rate 5.47% Property Overview Maturity: March 6, 2015 • Southern Marin County’s only promotional / community shopping center Amortization: 30 Years Current Annual Payment $2,037,270 • Only shopping center serving Sausalito and Marin City Projected In-Place Cash Flow before CAPX $805,000 • Excellent freeway visibility and access with over 136,000 cars per day on US Highway 101

Selected 2008 Tenant Sales • Closest Best Buy store to over one quarter of San Francisco’s 800,000 residents Sales Tenant GLA 2008 Sales per SF • Tenant rental rates at or below current market levels Best Buy 48,615 $27,203,513 $560 • Two drive-thru fast food pads – grandfathered in Marin County CVS 19,800 $8,046,872 $406 Ross Dress for Less 27,619 $6,608,804 $239 Burger King 2,889 $1,022,959 $354 Outback Steakhouse 6,500 $2,005,524 $309

2 Executive Summary / Marin Gateway Shopping Center

Market Overview

• High-income regional trade area • 4.04% retail vacancy in southern Marin County trade area • Limited existing competition • Absolute barriers of entry to the development of new competition • Shortage of junior-anchor alternatives in Marin County

Demographic Summary San 1-Mile 3-Miles 5-Miles Francisco Total Population 6,217 45,776 72,562 773,285 Total Households 3,246 22,427 32,353 346,973 Avg. Household Income 139,514 188,915 187,025 $125,098 Total Daytime Population 8,554 53,245 79,714 843,326 Median Home Value $740,222 $966,260 $956,544 $683,080

3 Immediate Trade Area Looking South

San Francisco

San Francisco Bay

Sausalito

Marin Gateway Shopping Center Marin City

101 Immediate Trade Area Looking North San Rafael

Larkspur Corte Madera

Mill Valley Tiburon

101

Richardson Bay Marin Gateway Shopping Center Marin City

Sausalito Marin Gateway Shopping Center, Marin City, CA Location

Subheader Bay Area Regional Overview Body text to go here... The San Francisco Bay Area is a major global center for high-tech industries, education and international trade, as well as a premier international tourist destination. In addition to its attractive business and tourist environment, the Bay Area is a highly desirable place to live and enjoys strong regional and local economies. Top educational institutions such as the University of California at Berkeley, Stanford University, UCSF Medical Center, as well as many other major uni- versities are all located in the Bay Area. These institutions, together with the unsurpassed quality of life enjoyed by Bay Area residents, have attracted the most educated, affluent employment base in the United States. Because of Property these and other factors, San Francisco has been recognized for many decades as one of the most dynamic and desirable places to live in the world. It is not surprising that Price Waterhouse Coopers’ Emerging Trends in Real Estate, a survey of over 150 investors, owners and other experts in the United States, regularly names San Francisco as one of the most desirable targets for invest- ment. Among the reasons for this choice is San Francisco’s status as one of the great “24-hour” cities of the world.

6 Location / Marin Gateway Shopping Center

Population Income/Economy The population of the nine county Bay Area is over 7.3 million. According to San Francisco is the commercial center of the nine-county Bay Area region and the Association of Bay Area Governments (ABAG), between 2010 and 2030 the has historically been the financial and business center of the western United San Francisco Bay Area is expected to add about 1.5 million new residents. In States. During the rapid economic growth of the 1980s, the built-out nature of addition to the current 3.5 million jobs in the area, the economy should gener- San Francisco resulted in strong growth in its surrounding counties, including ate almost 1.25 million new jobs between 2010 and 2030. As the table below Marin County. illustrates, the Bay Area will undergo significant population and job growth over San Francisco provides a stable basis for retail investment opportunities. The the next two decades. nine-county San Francisco Bay Area represents one of the world’s great regional economies. It successfully competes in the global market as a knowledge-based Population of Bay Area by County economy powered by its wealth of research, technology, and innovation. If the Source: ABAG, Projections 2010 Bay Area were a country, its economy would rank approximately 20th in the world. The gross regional product of the Bay Area exceeds $200 billion, ranking 497,900 Sonoma 548,400 fifth in the United States.

443,100 Solano 495,800 Income of Bay Area by County

1,822,000 Santa Clara Source: ABAG, Projections 2010

2,310,800 84,300 733,300 Sonoma San Mateo 104,600 862,800 2010

85,600 2030 810,000 Solano San Francisco 104,300 934,800

108,700 138,800 Santa Clara Napa 134,600 147,500

123,300 San Mateo 256,500 152,700 Marin 270,900 2010

102,200 2030 San Francisco 1,090,300 126,700 Contra Costa 1,273,700

89,500 Napa 1,549,800 111,100 Alameda 1,874,600

127,200 Marin 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 157,700

102,000 Contra Costa 126,200

91,200 Alameda 113,100

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 7 Google Maps Page 1 of 2

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Location / Marin Gateway Shopping Center

Marin Gateway Shopping Center is located in Marin City, which is between the cities of Mill Valley and Sausalito and part of an uninterrupted suburban environment stretching from the Golden Gate Bridge to the south to Novato to the north.

Marin County Property Marin County serves primarily as a wealthy bedroom community for San Fran- cisco and related Bay Area business centers. It is blessed with an excellent cli- mate, unsurpassed scenery and recreational opportunities, low crime, and good schools. The county lies immediately north of San Francisco across the Golden Gate Bridge. The county’s character is rural and it contains many parks, such as the Golden Gate National Recreation Area, Point Reyes National Seashore, and Mount Tamalpais State Park. Marin County is bordered by Sonoma County to the north, the San Francisco Bay to the east, San Francisco to the south, and the Pacific Ocean to the west. Marin County contains an approximate 521 square miles of which one-third is set aside for parks and open space pre- serves. The Association of Bay Area Governments (ABAG) divides the county into 11 sub-regions on or near the highway. Each sub-region denotes a city’s sphere of influence or an urban service area. Marin City is located in southern Marin Marin County Overview County. Marin Gateway directly serves Corte Madera, Tiburon, Mill Valley and Larkspur to the north and Sausalito to the south.

The San Francisco Bay Area Southern Marin County is centrally located in the greater San Francisco Bay Area. The San Francisco Bay Area consists of nine counties located along the ©2010 Google - Map data ©2010 Google - San Francisco and San Pablo Bays. While Marin is the second smallest county within the Bay Area, it has the wealthiest population. http://maps.google.com/maps/ms?ie=UTF8&hl=en&msa=2 3/23/2010

8 Location / Marin Gateway Shopping Center

Marin County Demographic Overview Total Population Marin County • Total Population 256,500 Subregional Area 1980 1990 1995 2000 2005 2010 • Population 16-yrs and over 219,016 Belvedere 2,401 2,147 2,200 2,200 2,300 2,300 Corte Madera 8,429 8,490 9,200 9,300 9,400 9,400 • Employed 152,137 Fairfax 8,402 8,035 8,200 8,300 8,600 8,700 • Unemployed 4,027 Larkspur/Kentfield 20,791 22,962 25,200 26,200 26,800 27,100 Mill Valley 22,688 22,669 23,100 23,400 23,800 24,200 • In Armed Forces 1,367 Novato 51,209 53,015 56,000 58,900 61,400 65,300 • Not in labor force 61,485 Ross 2,801 2,123 2,200 2,200 2,200 2,200 San Anselmo 14,420 14,038 14,300 14,300 14,400 14,300 Population San Rafael 57,177 60,386 68,600 69,600 71,500 74,600 Sausalito/Marin City 9,382 9,741 10,100 10,100 10,200 10,300 The Bay Area has witnessed rapid growth during the last three decades and is Tiburon 13,512 13,215 14,900 14,900 15,200 15,200 recognized as the fourth largest metropolitan area in the nation. Marin County, Remainder 11,356 13,275 15,200 15,200 15,500 16,700 unlike the Greater Bay Area, is politically very opposed to growth and develop- Total Marin County 224,548 232,086 251,195 256,600 263,305 272,310 ment. As a result population growth has been typically just between 0.5-0.7% over the last two decades. More recently, the population of Marin County increased from 247,209 in 2000 to 256,500 in 2010. Housing Population Distribution According to the Marin County Tax Assessor, mean home sales price increased The table to the right shows ABAG’s subregional population estimates. All the from $996,159 in 2000, to $1,142,496 in 2007, and finally decreased to subregions are clustered in the eastern part of the County, along U.S. Highway $806,419 in 2009. This decrease can be attributed to the overall decrease 101. In 2005, 95% of the population lived within these subregions and ABAG in housing prices nationwide and, more acutely, the lack of financing for home estimates that 95% will still live within these subregions in 2050. loans in excess of $1m, a common price point for Marin housing.

9 Location / Marin Gateway Shopping Center

Income Employment/Economy Marin County is characterized by very high income levels. While the popula- High technology, service, and finance, insurance and real estate industries tion has grown slowly over the last 20 years, all indices of income have grown comprise the major employment sectors in the San Francisco Bay Area. The at a very rapid pace. In essence, Marin County has been transformed over that regional economy is expected to create over 500,000 new jobs between 1990 period to an area of wealth and high disposable income. By way of example, and 2000. The region’s employment emphasis in the service and high technol- average household income grew from $83,000 in 1990 to $145,700 in 2008. ogy sectors, combined with the Bay Area’s ideal competitive location as a trade and information center between the Pacific Rim and the rest of the nation, Key income data may be summarized as follows: places this region in an extremely favorable position to compete for the busi- Marin County, CA ness which will lead to future economic growth. 2000 Per Capita Income $44,303 Employment 2008 Per Capita Income $62,921 According to the California State Economic and Development Department, as 2000 Average Household Income $108,756 of February 2009 Marin County’s unemployment rate was 6.8 percent. The un- employment rate in the San Francisco MSA was 8.3 percent in February 2009, 2008 Average Household Income $145,700 down from a revised 5 percent in 2005. This compares with an unadjusted unemployment rate of 5.1 and 5.4 percent for California and for the nation 2000 Median Household Income $71,959 during the same period. 2008 Median Household Income $87,699 Many research and development companies are choosing to locate in Marin due to the quality of life available to the employees and the existence of a more natural environment which fosters creativity. Other advantages include a much shorter and less hectic commute to and from places of employment. Additionally, Marin County has developed as a community of small entrepre- neurs. Typical businesses are service, professional, technical, or scientific in nature. Indicative of this characteristic, only 1,800 companies employ 25 or more employees, while only 180 companies have over 50 employees on staff. This broad base of small companies has resulted in a very stable economic community. In fact, the County has consistently had one of the lowest unem- ployment rates in California.

10 Location / Marin Gateway Shopping Center

Transportation Summary The major north-south transportation corridor through Marin County is U.S. Marin County is a desirable place to live with housing prices, average income, Highway 101. This route provides direct access from Marin County south into and buying power among the highest in the nation. San Francisco across the Golden Gate Bridge and north into Sonoma County As a wealthy bedroom community for San Francisco, southern Marin County and the communities of Petaluma and Santa Rosa. U.S. Highway 101 con- provides Marin Gateway a trade area composed of affluent, educated consum- tinues north through the western portion of the state linking the northwestern ers. Because little developable land is available, it is highly unlikely that any California communities lying east of the Coast Range. It eventually intersects new competing centers will be built in the Property’s primary and secondary with State Highway 1 in Eureka and continues north along the northwest market areas. California coast into Oregon. State Highway 1 branches off from U.S. Highway 101 in the southern portion of Marin County and provides access to the west- While Marin County is forecasted to continue experiencing stable population ern coastal towns and recreation. and household growth over the next decade, employment, income and general economic growth are projected to out-pace that of San Francisco County to the Major east-west transportation links within the county include Interstate High- south and to be in-line with the Bay Area region as a whole. Marin County is way 580, which connects San Rafael and Marin County with Richmond via anticipated to continue to maintain its position as one of the most desirable the Richmond San Rafael Bridge. Interstate 580 also provides access to the places to live in the Bay Area and will continue to attract the wealthiest sector Interstate 80 freeway at El Cerrito. State Highway 37 provides access from the of the population. Overall, both the immediate and long term projections for northern portion of the county to Vallejo and Interstate 80 approximately 25 the county are positive. miles to the east. In conclusion, Marin County is an area which offers growing economic oppor- tunity, diverse recreational amenities, and a variety of tranquil communities. The unique character of Marin is enhanced by its desirable climate, varied topography and spectacular coastline. The County is presently entering into a new phase of maturation. Changes in both lifestyle and technology will permit Marin to grow and change with attention focused on the future, providing its residents a quality of life known to few other places.

11 CVS

Best Buy

Sleep Train

Starbucks

Dollar Tree Babies R Us Ross Outback Steakhouse

Burger King

Panda Express Marin Gateway Shopping Center, Marin City, CA Property Description

13 Property Description / Marin Gateway Shopping Center

14 Property Description / Marin Gateway Shopping Center

Tenant Roster & Site Plan

Tenant Tenant Name Suite Size Panda Express 100 1,989 U. Burger King 110 2,889 S. Occupied Outback HIGHW Dollar Tree 120 8,458 Steak House Available 192 AY Sleep Train 130A 4,500 101 NEW TENANT 130B 2,059 NEW TENANT 140A 1,556 NEW TENANT 140B 2,091 Soccer Pro 140C 2,030 Ross CVS Drugs 150 19,800 194 NEW TENANT 160A 1,300 Gateway Beauty 160B 1,597 NEW TENANT 160C 1,300 Nails #1 160D 1,200 Babies R Us 196 Subway 160E 900 190A Best Buy 180 NEW TENANT 160F 900 190B

Gateway Cleaners 160G 1,750 190C

NEW TENANT 160H 1,400 DONAHUE STREET 100 Massage Envy 160I&J 2,850 170 Little Gyms 170 3,850 Best Buy 180 48,615 Starbucks 190A 1,837 160J 110 Styles for Less 190B 2,200 160I 160H NEW TENANT 190C 3,093 160G 160F Outback Steakhouse 192 6,500 160E Dollar Tree 160D Gateway Center 120 Ross Dress for Less 194 27,619 160C Public Library 160B Babies R US 196 25,416 160A CVS 130B AT&T Wireless CELPD 1 150 130A DONAHUE STREET 140C 140B Gateway Center Library LIBRY 4,000 140A

15 Property Description / Marin Gateway Shopping Center

Parcel Map

16 Property Description / Marin Gateway Shopping Center

Site Data Parking Approximately 874 surface parking spaces (Shared by total center). Address Parking ratio: 4.80 spaces/1,000 SF 100 Donahue Street Marin City, California Access and Egress The site has good access. It is highly visible from US Highway 101 and is Site Area located at a freeway exit known as the Marin City/Sausalito interchange at Do- Site consists of approximately 921,228 SF or 21.15 gross acres. The land area nahue. This interchange has been improved considerably due to road widening includes the adjacent pond, which is not usable for development. and the addition of a traffic signal.

Location Utilities and Services Located in the northwest quadrant of Interstate Highway 101 and Donahue The site is within the jurisdiction of Marin County or the Marin City Community Street in Marin City, which is an unincorporated community within Marin Facilities District and is therefore provided all municipal services, including County. Marin City has the same zip code as Sausalito on the east side of US police, fire and refuse garbage collection. Highway 101, and is frequently referred to as being in the greater Sausalito area. Adjacent Properties The adjacent land uses are as follows: Year Built The Marin Gateway Retail Center was built in 1996. North: Hillside and multifamily.

Shape and Frontage South: Multifamily, with apartments immediately Site is irregular in shape. along Donahue, and townhomes located Site has frontage along Donahue Street and also facing onto US Highway 101, further south. These were constructed around providing good freeway visibility. the same time as the Property, as part of the overall Marin City USA redevelopment project.

17 Property Description / Marin Gateway Shopping Center

East: Retention pond and US Highway 101. East Floor Structure of Highway 101 is a small commercial dis- The floor structures consist of pre-stressed concrete slabs. trict and the City of Sausalito. Exterior Walls West: Primarily multifamily, and also includes a The exterior wall structures are either wood frame or reinforced concrete. Retail Marin County Public Safety substation, which storefronts are typically plate glass set in anodized aluminum frames. houses fire and police (sheriff) services. Roof Cover Accessor’s Parcel Numbers The roof cover consists of a built-up roof on plywood sheathing and glulam 052-490-03 beams, with painted metal mansard facing. 052-490-05 Interior Finishes 052-490-06 The interior finish of the retail shop space is summarized as follows: 052-490-07 Floor Coverings: Commercial grade short loop carpeting and vinyl tile over concrete. Improvements Data Walls: Textured and painted sheetrock. The Property is improved with ten buildings. Ceilings: Mostly suspended acoustical tile, with open ceilings Foundation in some anchor areas.

The buildings foundations consist of concrete slab with grade beams and pil- Lighting: Standard commercial fluorescent. ings.

Construction Heating, Ventilating, and Air Conditioning (HVAC) Most structures are wood frame although some of the newer buildings’ con- The individual tenant areas feature packaged roof-mounted HVAC units. struction components include reinforced concrete block with interior steel support columns.

18 Property Description / Marin Gateway Shopping Center

Improvements Data (Continued) FEMA Zone A: Special flood hazard areas subject to inundation by the 100- year flood. Because detailed hydraulic analyses have not been performed, no Security base flood elevations or depths are shown. Mandatory flood insurance purchase requirements apply. On-site security is provided daily from 12 p.m. to 10 p.m.

ADA Compliance Fire Protection and Life Safety (FLS) All common areas have handicap accessibility. The new improvements are fully fire sprinklered and all tenant areas are equipped with smoke detectors. The buildings have adequate fire alarm systems, fire exits, fire extinguishers, fire escapes and/or other fire protection measures to meet local Fire Marshal requirements.

Flood Zone According to flood hazard maps published by the Federal Emergency Manage- ment Agency (FEMA), the bulk of the site is within Zone C, and the southeast- ern portion is contained within Zone A-2, as indicated on the Community Map Panel No. 065022 0002 B. FEMA Zone C: This area has been identified in the community flood insurance study as an area of moderate or minimal hazard from the principal source of flood in the area. However, buildings in this zone could be flooded by severe, concentrated rainfall coupled with inadequate local drainage systems. Local storm water drainage systems are not normally considered in the community’s Flood Insurance Study. The failure of a local drainage system creates areas of high flood risk within this rate zone. Flood insurance is available in participat- ing communities but is not required by regulation in this zone.

19 Property Description / Marin Gateway Shopping Center

Natural Hazard Disclosure Summary A statutory natural hazards study was ordered from Disclosure Save - a third party compiler of government data. The following data is drawn from the summary of that report.

A special flood hazard area designated by the Federal Emergency Management Agency No

An area of potential flooding shown on a damn failure inundation map pursuant to Section No 8595.5 of the Government Code

A very high fire hazard severity zone pursuant to Section 51178 or 51179 of the Government No Code.

The owner of this property is subject to the maintenance requirements of Section 51182 of the Government Code

A wildland area that may contain substantial forest fire risks and hazards pursuant to Section No 4125 of the Public Resources Code

An earthquake fault zone pursuant to Section 2622 of the Public Resources Code No

Located in a Dam Inundation Area No

Located in a Very High Fire Hazard Area No

Located in a Wildland Fire Area No

Located in an Alquist-Priolo Earthquake Fault Zone No

Located in a Seismic Liquefaction Hazard Zone Yes

Located in a Seismic Landslide Hazard Zone No

20 Property Description / Marin Gateway Shopping Center

Major Tenant Profiles

CVS Pharmacy Ross Dress for Less www.cvs.com www.rossdressforless.com

Leasee: CVS Caremark Leasee: Ross Dress for Less, Inc. Number of Stores: 7,000 Number of Stores: 953 in 27 states and Guam 2009 Gross Sales: $55.3 billion 2009 Gross Sales: $7.2 billion CVS Caremark is a market leader in mail order pharmacy, retail pharmacy, spe- Ross Stores, Inc., a Fortune 500 and Nasdaq 100 company, is the nation’s second largest off-price retailer. Products sold include clothing, footwear, bedding, furniture, cialty pharmacy, and retail clinics, and clinical expertise including one of the jewelry, beauty products, and housewares. industry’s most comprehensive disease management programs. As one of the country’s largest pharmacy benefit managers (PBMs), plan sponsors and partici- pants have access to a network of approximately 60,000 pharmacies including over 7,000 CVS/pharmacy stores.

Best Buy Babies R’ Us www.bestbuy.com www.babiesrus.com

Leasee: Best Buy Stores, LP Leasee: Toys “R” Us Number of Stores: 1476 in the U.S., Canada Number of Stores: 1,566 in the U.S. and China. 2009 Gross Sales: $13,571 billion 2009 Gross Sales: $45.0 billion In 1996, the Toys “R” Us family gave birth to a new addition with the launch Best Buy Co., Inc. (NYSE: BBY) is a Fortune 100 company and the largest of Babies “R” Us, the nation’s premier baby products retailer and specialty specialty retailer of consumer electronics in the US and Canada, accounting for store chain. Opening its first store in Westbury, New York, the chain has since 17% of the market. The company’s subsidiaries include Geek Squad, Magnolia grown to over 200 locations across the country. Audio Video, and Future Shop in Canada.

21 Property Description / Marin Gateway Shopping Center

Panda Express Starbucks Coffee www.pandaexpress.com www.starbucks.com

Leasee: Panda Express, Inc. Leasee: Starbucks, Corp. Number of Stores: 1,197 in 37 states + Puerto Rico Number of Stores: 16,706 worldwide 2008 Gross Sales: $1 billion (2008) 2009 Gross Sales: $9.77 billion Panda Express provides gourmet Chinese food, fast and fresh. This US chain Starbucks Coffee Company is the leading retailer, roaster and brand of specialty spans 37 states and has been in business for 30 years. coffee in the world, with 7,521 self-operated and 5,647 licensed stores in 39 countries. Founded in Seattle, Washington in 1971, Starbucks currently has 140,000 employees.

Outback Steakhouse Burger King www.outbacksteakhouse.com www.burgerking.com Leasee: Golden Gate Steakhouse, Leasee: Catherine Kubu Carol Mc- Inc. Manus Susan Kubu-Jones Number of Stores: 1,001 system-wide in 21 Number of Stores: 11,925 in 73 countries countries 2009 Gross Sales: $2.54 billion 2009 Gross Sales: $3.6 billion Burger King is a large international chain of fast food restaurants serving burg- Outback Steakhouse is one of the largest casual dining restaurant companies ers and fries to 11.4 million customers daily. Almost ninety percent of BK in the world. The Outback Steakhouse, Inc. portfolio of seven brands include: restaurants are owned and operated by franchisees. Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill,F leming’s Prime Steakhouse & Wine Bar, Roy’s, Cheeseburger in Paradise and Lee Roy Selmon’s.

22 Property Description / Marin Gateway Shopping Center

Dollar Tree www.dollartree.com

Leasee: Dollar Tree Number of Stores: 3,591 2008 Gross Sales: $4.6 billion Headquartered in Chesapeake, VA, Dollar Tree is the largest and most success- ful single-price-point retailer in the country, operating thousands of stores in all 48 contiguous states.

Sleep Train www.sleeptrain.com

Leasee: Sleep Train Number of Stores: 80 stores in California 2009 Gross Sales: Undisclosed (privately held) Founded in 1985 by Dale Carlsen, Sleep Train is ranked the #1 mattress retailer on the West Coast, with locations that span from to San Diego.

23 Property Description / Marin Gateway Shopping Center

Discussion of Significant Lease Provisions & Over the years since the Property’s development, certain portions of the com- mon areas have experienced some settlement resulting in slight grade differ- Property Matters entials between some buildings and their parking lots. Existing management has annually budgeted fund to address this issue. Funds expended for ramps Lease Provisions and various related repairs have been fully reimbursed by tenants through CAM CVS – CVS has a provision in its lease which allows it to require the creation collections. of a separate tax parcel for its premises. Should this parcel be created, CVS would no longer reimburse property tax charges but rather would pay the tax Environmental History directly to the assessor. In the early 2000’s, a small spill of dry cleaning fluid was discovered behind Ross Dress for Less – Ross has the right to approve changes to the configura- the dry cleaners and Longs building. The case was referred to the Regional tion of the common areas. Water Quality Control Board (RWQCB) which approved a management plan of testing and monitoring the impacted area. As a result of the Seller’s work Outback Steakhouse – Outback has the right to approve changes to the configu- under the RWQCB approved plan, the RWQCB issued a no further action letter ration of the common areas and specifically has the right to approve changes to on July 16, 2007. the configuration of the drive aisles.

Property Matters Settlement –Marin Gateway Shopping Center was developed along Highway 101. Highway 101 in turn was developed on the eastern, flat side of the county on the edge of San Francisco Bay. As a result, like many shopping cen- ters in Marin County, the Property was developed on a site formed by landfill on top of bay mud. For this reason, all buildings on the site were built on piers (piles) which extend approximately 165 feet deep. Common areas on the site, however, were not built on pier-supported platforms.

24 Property Description / Marin Gateway Shopping Center

Lease Expirations Primary Term: No Options Exercised Lease Expirations All Terms: Options Exercised The following site plan illustrates when each tenant’s primary lease term will The following site plan illustrates when tenant expirations will occur if all ten- expire. The vast majority of tenants do not expire in the near term. ants excercise their existing options to renew

2011-2012 U. S. HIGHWAY 101 2011-2015 U. S. HIGHWAY 101 Outback Outback 2013-2015 Steak House 2016-2020 Steak House 192 192 2016-2017 2021-2025

2018-2020 2026-2030 2031+

Ross Ross 194 194

Babies R Us Babies R Us 196 196 190A 190A Best Buy Best Buy 180 180 190B 190B

190C 190C

DONAHUE STREET 100 DONAHUE STREET 100

170 170

160J 110 160J 110 160I 160I 160H 160H 160G 160G 160F 160F 160E Dollar Tree 160E Dollar Tree 160D 160D Gateway Center 120 120 160C Gateway Center 160C Public Library 160B 160A Public Library 160B 160A

CVS 130B CVS 130B 150 130A DONAHUE STREET 130A DONAHUE STREET 140C 150 140B 140C 140B 140A 140A

25 Property Description / Marin Gateway Shopping Center

Lease Expirations Primary Term: No Options Exercised Annual Square Footage Expiring 60,000

Cumulative Expiration Expiration Expired Square Percent of Cumulative Year Tenant Suite Date Square Feet Feet Total Percent of Total 50,000 2011 Little Gyms 170 2/11 3,850 2.10 Massage Envy 160I&J 6/11 2,850 1.60 Subtotal 6,700 6,700 3.70 3.70% 40,000 2012 Ross Dress for Less 194 1/12 27,619 15.20 Soccer Pro 140C 7/12 2,030 1.10 Styles for Less 190B 7/12 2,200 1.20 30,000 Subtotal 31,849 38,549 17.50 21.20%

2013 Gateway Beauty 160B 2/13 1,597 0.90 20,000 Outback Steakhouse 192 12/13 6,500 3.60 Subtotal 8,097 46,646 4.50 25.70%

2014 10,000 Gateway Cleaners 160G 8/14 1,750 1.00 Panda Express 100 12/14 1,989 1.10 Subtotal 3,739 50,385 2.10 27.80% 0 2015 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2022 Nails #1 160D 1/15 1,200 0.70 Starbucks 190A 2/15 1,837 1.00 Annual Square Feet Expiring Subtotal 3,037 53,422 1.70 29.50% 2016 Dollar Tree 120 1/16 8,458 4.70 Cumulative Square Footage Expiring Babies R US 196 1/16 25,416 14.00

Burger King 110 7/16 2,889 1.60 180,000 NEW TENANT 130B 7/16 2,059 1.10

NEW TENANT 140A 7/16 1,556 0.90 160,000 NEW TENANT 140B 7/16 2,091 1.20

NEW TENANT 160A 7/16 1,300 0.70 140,000 NEW TENANT 160C 7/16 1,300 0.70 NEW TENANT 160F 7/16 900 0.50 120,000 NEW TENANT 160H 7/16 1,400 0.80 NEW TENANT 190C 7/16 3,093 1.70 100,000 Subtotal 50,462 103,884 27.90 57.40%

2018 80,000 Subway 160E 12/18 900 0.50 Subtotal 900 104,784 0.50 57.90% 60,000 2019 Best Buy 180 1/19 48,615 26.80 Subtotal 48,615 153,399 26.80 84.70% 40,000 2020 Sleep Train 130A 5/20 4,500 2.50 20,000 Subtotal 4,500 157,899 2.50 87.20% 2022 0 Longs 150 5/22 19,800 10.90 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2022 Subtotal 19,800 177,699 10.90 98.10% Cumulative Square Feet Expiring

26 Property Description / Marin Gateway Shopping Center

Lease Expirations All Terms: Options Exercised

Cumulative Cumulative Cumulative Cumulative Expiration Expiration Square Expired Square Percent Percent of Expiration Expiration Square Expired Square Percent Percent of Year Tenant Suite Date Feet Feet of Total Total Year Tenant Suite Date Feet Feet of Total Total 2013 2018 Gateway Beauty 160B 2/13 1,597 0.90 Subway 160E 12/18 900 0.50 Subtotal 1,597 1,597 0.90 0.90% Subtotal 900 36,504 0.50 20.30% 2014 2021 Gateway Cleaners 160G 8/14 1,750 1.00 Babies R US 196 12/21 25,416 14.00 Subtotal 1,750 3,347 1.00 1.90% Subtotal 25,416 61,920 14.00 34.30% 2015 2022 Nails #1 160D 1/15 1,200 0.70 Longs Drugs 150 2/22 19,800 10.90 Styles for Less 190B 7/15 2,200 1.20 Subtotal 19,800 81,720 10.90 45.20% Subtotal 3,400 6,747 1.90 3.80% 2023 2016 Outback Steakhouse 192 12/23 6,500 3.60 Dollar Tree 120 1/16 8,458 4.70 Subtotal 6,500 88,220 3.60 48.80% Little Gyms 170 2/16 3,850 2.10 2024 Massage Envy 160I&J 6/16 2,850 1.60 Best Buy 180 1/24 48,615 26.80 NEW TENANT 130B 7/16 2,059 1.10 Panda Express 100 12/14 1,989 1.10 NEW TENANT 140A 7/16 1,556 0.90 Subtotal 50,604 138,824 27.90 76.70% NEW TENANT 140B 7/16 2,091 1.20 2027 NEW TENANT 160A 7/16 1,300 0.70 NEW TENANT 160C 7/16 1,300 0.70 Ross Dress for Less 194 1/12 27,619 15.20 NEW TENANT 160F 7/16 900 0.50 Subtotal 27,619 166,443 15.20 91.90% NEW TENANT 160H 7/16 1,400 0.80 2030 NEW TENANT 190C 7/16 3,093 1.70 Sleep Train 130A 5/20 4,500 2.50 Subtotal 28,857 35,604 16.00 19.80% Subtotal 4,500 170,943 2.50 94.40% 2017 2035 Soccer Pro 140C 7/17 2,030 1.10 Starbucks 190A 2/15 1,837 1.00 Subtotal 2,030 37,634 1.10 20.90% Subtotal 1,837 172,780 1.00 95.40% 2036 Burger King 110 7/16 2,889 1.60 Subtotal 2,889 175,669 1.60 97.00%

Annual Square Footage Expiring Cumulative Square Footage Expiring

30,000 180,000

160,000 25,000 140,000

20,000 120,000

100,000 15,000 80,000

10,000 60,000 40,000 5,000 20,000

0 0 2011 2013 2015 2017 2019 2021 2031 2033 2011 2013 2015 2017 2019 2021 2031 2033 27 Square Feet by Year Cumulative Square Feet Property Description / Marin Gateway Shopping Center

Under vs. Over Market Rents Analysis Contract v. Market Rent Analysis

Contract Market Over Market Square Base Rent Rent (Under Market) Over Market Tenant Name Footage Lease Term PSF/YR PSF/YR PSF/YR (Under Market) Panda Express 1,989 Jan-2005 to Dec-2014 $60.83 $60.00 $0.83 $1,650.87 Burger King 2,889 Nov-1996 to Jul-2016 $52.64 $60.00 ($7.36) ($21,263.04) Dollar Tree 8,458 Feb-2009 to Jan-2016 $23.50 $24.00 ($0.50) ($4,229.00) Sleep Train 4,500 Expires Aug-2020 $22.20 $24.00 ($1.80) ($8,100.00) Soccer Pro 2,030 Aug-2007 to Jul-2012 $31.92 $30.00 $1.92 $3,897.60 Longs Drugs 19,800 Feb-1997 to Feb-2022 $8.79 $15.00 ($6.21) ($122,958.00) Gateway Beauty 1,597 Mar-2008 to Feb-2013 $31.32 $30.00 $1.32 $2,108.04 Nails #1 1,200 Jan-2004 to Jan-2015 $39.34 $30.00 $9.34 $11,208.00 Subway 900 Jan-2008 to Dec-2018 $34.20 $33.00 $1.20 $1,080.00 Gateway Cleaners 1,750 Sep-2004 to Aug-2014 $13.71 $30.00 ($16.29) ($28,507.50) Massage Envy 2,850 Jul-2006 to Jun-2011 $24.00 $30.00 ($6.00) ($17,100.00) Little Gyms 3,850 Mar-2006 to Feb-2011 $15.58 $24.00 ($8.42) ($32,417.00) Best Buy 48,615 Apr-1999 to Jan-2019 $13.52 $15.00 ($1.48) ($71,950.20) Styles for Less 2,200 Aug-2007 to Jul-2012 $34.80 $33.00 $1.80 $3,960.00 Starbucks 1,837 Feb-2005 to Feb-2015 $38.16 $33.00 $5.16 $9,478.92 Outback Steakhouse 6,500 Dec-1998 to Dec-2013 $15.23 $23.00 ($7.77) ($50,505.00) Ross Dress for Less 27,619 Feb-2007 to Jan-2012 $12.25 $15.00 ($2.75) ($75,952.25) Babies R US 25,416 Oct-2004 to Jan-2016 $18.00 $15.00 $3.00 $76,248.00

Total Occupied SqFt 168,001 Total Available SqFt 13,699

Total Over-Market/(Under-Market) Rent ($34) ($323,351)

28 Aerial View Facing South Pacific Ocean San Francisco Sunset District Richmond District

San Francisco Bay

Sausalito Marin Gateway Shopping Center Marin City

Tam Junction Richardson Bay

101

Tiburon Aerial View Facing North Novato

San Rafael

Corte Madera

Mill Valley

Tiburon

101

Tam Junction

Richardson Bay

Marin City

Marin Gateway Shopping Center

Sausalito Marin Gateway Shopping Center, Marin City, CA Market Analysis

Local Market Overview The charts and maps on the following pages demonstrate: While Marin County offers its well-educated, affluent consumers a full variety • The effective trade area has eight relevant competing centers. of retail formats and merchants, it does so sparingly. With a population of ap- • Of these, only three feature regionally-drawing tenants. proximately 260,000, its 38 shopping centers contain only 4,876,480 leasable • Marin Gateway enjoys the trade area’s best visibility and access. square feet. This ratio of 18.75 gross leasable square feet (GLA) per capita compares favorably with the national average of 20 square feet per capita. • The vacancy rate in the entire southern Marin trade area is 4.04%. Moreover, with a per capita income of $62,921, Marin County’s disposable The Marin County retail shopping centers market ended 2009 in a healthy consumer income is among the highest in the country. condition with a vacancy of 6.3% compared to the balance of the state. This Development within Marin County is tightly centered along US-101 on the market kept its resiliency in 2009 despite the economic troubles, reporting no eastern side of the County. Shoppers must travel along this north-south cor- change in vacancy year-over-year. The average asking rental rate for shop space ridor to access most shopping centers and their merchants. Significant devel- was $33.78 per square foot NNN at year-end 2009, an increase of $5.91 from opment constraints, both physical and political, inhibit the construction of new year-end 2008. The total GLA (gross leasable area) of all retail centers in Marin competitive product. This is particularly true in the southern tier of the County County, excluding malls, is approximately 3.7 million square feet in 36 retail in which Marin Gateway is located. It is very plausible to project that no new centers. The bulk of the inventory lies within the neighborhood center category, shopping centers will be constructed within the Property’s competitive market accounting for 35%, or 1.3 million square feet, of the total GLA. The next high- in the foreseeable future. est inventory contributors are power and community centers at 773,250 SF and 745,100 SF, respectively. Total availability across all retail centers, exclud- Marin Gateway enjoys the benefits of being the best-located and most easily ing malls, amounted to 234,700 square feet, comprised of shop and anchor accessible community/promotional shopping center in this under-supplied retail spaces. marketplace. Due to topography and the County’s location on San Francisco Bay, the Property’s effective primary trade area does not conform to a typical The Marin County retail centers market is divided into three submarkets: South, radius analysis. The Property’s primary trade area is augmented by custom- Central & North Marin. The total GLA square footage in these submarkets is ers from San Francisco. This Secondary trade area includes those residents of 675,630 SF (South), 1,100,000 million SF (Central) and 2,000,000 million northern San Francisco who travel to Marin and shop at the destination retailers SF (North). The vacancy rates for South, Central and North Marin County were anchoring Marin Gateway. fairly narrow, closing mid-year 2009 at 4.04%, 6.4% and 6.8%, respectively. The top tier average asking rental rates were highest in the southern part of Marin County, which ended mid-year 2009 at $43.56, while North Marin recorded the most discounted average asking rate of $28.78, due in part to the diversity of the property types in this submarket. Average asking rates for the entire County ranged from a low of $15.00 to as much as $70.00 per square foot.

31 Market Analysis / Marin Gateway Shopping Center

Ross San Rafael The map to the left demon-

Kentfield .-101 strates two important points: (7 65580 (8 1) The lack of competition Larkspur (6 in the immediate trade area. 56580 2) The highly dense, afflu- ((4 55 (5 ( MileMile (3 65580 ent, and captive population RR Corte Madera inginginging within Marin Gateway’s .-101 trade area.

33 Mill Valley MileMile RR inginginging (2 Tiburon (1

11 .-101 MileMile &%131

RR "!1 inginginging Properties .-101 ((1 Strawberry Village !"1 ((2 Alto Center 8 Belvedere ((3 Corte Madera Town Center ((4 Village at Corte Madera ((5 The Marketplace 1 ((6 Cost Plus Plaza "!1 ((7 Larkspur Landing Sausalito ((8 Bon Air Center .-101

2009 Median Household Income by Census Block Group $150,000 and Above $125,000 to $150,000 .-101 $100,000 to $125,000 $50,000 to $100,000 Less than $50,000

2009 Population Density .-101 1 Dot = 10 Persons

32 Market Analysis / Marin Gateway Shopping Center

Recent Retail Leasing and Development Activity Other centers to watch in 2010 include Vintage Oaks in Novato, which intends There are three re-development projects that will continue to be watched in to transition to a more lifestyle-focused center with more upscale tenants and 2010 in Marin. At Pacheco Plaza in southern Novato, Paradise Foods opened restaurants. The 621,000 SF center is anchored by Costco, Target and Macys in the former 22,000 SF Safeway space in October, 2009. This is Paradise Home Furnishings. At Strawberry Village in Mill Valley, the former 10,000 SF Foods’ second store with their first located in Corte Madera. The remaining Smith & Hawken is in the process of being re-tenanted with a new single ten- 50,000 SF of shop space is being re-positioned with more upscale, boutique ant retailer. The Village in Corte Madera anchored by Macy’s and Nordstrom, retailers and food and service tenants. The Macerich-owned Northgate Mall in which is typically fully leased and commands the highest rents in Marin, has San Rafael, anchored by Sears and Macy’s, had its official grand re-opening in approximately 17,000 SF of vacancy to fill. Target has also completed their the 4th quarter of 2009 after a full-scale $75 million renovation, transform- application to add a 2nd store in Marin by the 1st quarter of 2012 totaling ing the more than 40-year old center into a more modern “green” shopping 137,000 SF adjacent to the existing Home Depot in east San Rafael. CVS has environment. New upscale and lifestyle and fashion-type tenants at the mall in- completed their re-branding and merchandising of the seven Longs stores in clude BJ’s Restaurant & Brewhouse, H&M, Buckle, Panera Bread, Vans Shoes, Marin (including Marin Gateway), and Walgreens is adding its 4th store in north Tilly’s, PacSun, Verizon, T Mobile, Chipotle and Forever 21. Kohl’s backfilled San Rafael which will open this summer. Whole Foods will also be adding new the former Mervyn’s space at the center and Rite Aid is moving to a newly built stores in Novato and Mill Valley in 2010 taking their store count in Marin to pad location at the front of the center. At Larkspur Landing, a 173,635 SF four. center, new owner J.S. Rosenfield & Co. of Santa Monica continues to pursue Asking rents and vacancy levels will remain fairly strong in the well-anchored, plans to reposition and re-brand the center as the “Marin Country Mart”. It established centers in Marin along the Highway 101 corridor. Neighborhood is intended to be similar to their highly successful Brentwood Country Mart strip centers and less well-positioned centers will have slow deal velocity, and in , and the company describes it as “an intimate non-an- will have to provide rental or other concessions to attract new users and retain chored, open air, public environment with services, shops, boutiques, and food existing Tenants. purveyors”. None of these three new developments will have an impact on Marin Gateway and it’s tenants.

33 Market Analysis / Marin Gateway Shopping Center

Direct Competitive Environment There are eight shopping centers in central and southern Marin County that Marin Gateway NNN charges are very competitive with those charged by its comprise Marin Gateway’s direct competitive environment. As the chart below nearby competitors providing an overall cost-of-occupancy value. indicates, this entire competitive set has an overall vacancy rate of approxi- Following the chart and land map is a more detailed discussion of each of the mately 5.4%. eight properties.

Map Total Square Monthly Asking Rent Key Center Footage Occupancy Rate Available Square Footage Range/NNNs Subject Property - Marin Gateway 181,700 SF 92.5% 13,699 SF $1.85-$3.00/$0.60 Promotional/Community Center Strawberry Village 1 172,889 SF 90% 17,200 SF $3.50-$4.80/$1.08 Grocery-Anchored Community Center Alto Center 2 80,000 SF 95% 3,884 SF $3.25-$3.80/$0.89 Grocery/Drug-Anchored Neighborhood Center Town Center Corte Madera 371,191 SF (Retail) 3 99% 3,084 SF $3.25-$4.50/$1.17 Grocery-Anchored Community Center 76,570 SF (Office) The Village at Corte Madera 4 439,961 SF 96% 17,000 SF Average $4.60/$2.63 Fashion-Oriented Regional Mall The Marketplace 5 51,291 SF 96% 2,000 SF $3.25/$0.85 Promotional/Lifestyle Center Cost Plus Plaza 6 63,561 SF 86% 3,700 SF $3.50/$0.36 Promotional Center Larkspur Landing 7 Being re-branded as “Marin Country Mart” 173,412 SF 84.5% 26,930 SF $3.00-$5.00/$0.82 Lifestyle Specialty Center Bon Air Center 8 160,000 SF 98% 3,830 SF $3.25-$3.75/$0.77 Grocery/Drug/Neighborhood/Community Center

Retail Totals 1,694,005 SF 93% 91,327 SF

34 Google Maps Page 1 of 1

To see all the details that are visible on the screen,use the "Print" link next to the map.

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Market Analysis / Marin Gateway Shopping Center

7 8

5 6

4 3

2

1

©2010 Google - Map data ©2010 Google -

35

http://maps.google.com/maps/ms?hl=en&ie=UTF8&msa=2 4/23/2010 Market Analysis / Marin Gateway Shopping Center

MarinRETAIL SHOPPINGCounty CENTERSRetail REPORTVacancy and Asking Rents MARIN COUNTY MID-YEAR 2007 Leasing Market Summary 2007(Centers 30,000Mid- Ysquareear feetRetail and greater) Market Report Total Availability Vacancy Avg. Asking Market Rent City Centers Total GLA Anchor Shop Total MY-07 YE-06 (NNN/Year) Range

Tiburon 2 84,990 0 0 0 0.0% 0.0% N/A N/A Marin City 1 182,054 0 24,347 24,347 13.4% 12.4% $33.73 $33.00-$36.00 Mill Valley 5 408,586 0 11,419 11,419 2.8% 2.2% $43.49 $40.00-$48.00 South County Totals 8 675,630 0 35,766 35,766 5.3% 4.7% $36.85 $33.00-$48.00

Corte Madera 4 565,401 0 32,983 32,983 5.8% 9.0% $36.16 $30.00-$48.00 Greenbrae 1 160,000 0 0 0 0.0% 1.1% N/A N/A San Anselmo 1 97,954 0 0 0 0.0% 0.0% N/A N/A Fairfax 1 40,000 0 1,000 1,000 2.5% 2.5% $18.00 $18.00-$18.00 Larkspur 2 209,565 0 17,161 17,161 8.2% 6.8% $37.62 $30.00-$48.00 Central County Totals 9 1,072,920 0 51,144 51,144 4.8% 6.3% $36.29 $18.00-$48.00

San Rafael 10 647,324 0 49,172 49,172 7.6% 2.4% $20.21 $15.00-$45.00 Novato 9 1,247,751 25,000 15,970 40,970 3.3% 2.4% $26.83 $16.20-$42.00 NorthRETAIL County SHOPPING Totals CENTERS19 REPORT 1,895,075 25,000 65,142 90,142 4.8% MARIN 2.4% COUNTY $23.22 YEAR-END $15.00-$45.00 2009

Total County: 36 3,643,625 25,000 152,052 177,052 4.9% 4.0% $29.75 $15.00-$48.00 Leasing Market Summary 2009(Centers Mid-30,000 Ysquareear Rfeetetail and greater) Market Report Occupancy SF / AvailableTotal SF & Vacancy AvailabilityAnnual Asking Rate RangesVacanc NNNy *Avg. Asking Market Rent City Rate (Shop) Range 2,000,000 Centers Total5.3% GLA6.0% Anchor$50.00 Shop Total YE-09 YE-08 4.8% 4.8% Tiburon 2 84,990 0 $40.00 0 0 0.0% 0.0% N/A N/A 1,500,000 Marin City 1 182,054 4.0% 0 13,369 13,369 7.3% 13.4% $30.00 $30.00-$30.00 Mill Valley 5 408,586 0$30.00 18,926 18,926 4.6% 1.7% $53.14 $36.00-$70.00 1,000,000 South County Totals 8 675,630 0$20.00 32,295 32,295 4.8% 4.7% $43.56 $30.00-$70.00 Vacancy

Square Feet 2.0% Corte500,000 Madera 3 500,301 0 5,084 5,084 1.0% 2.3% $42.64 $39.00-$45.00 $10.00

Greenbrae 1 160,000 0Annual Asking Rate NNN 3,840 3,840 2.4% 0.0% $36.00 $36.00-$36.00 San Anselmo0 1 97,954 0.0% 0$0.00 1,339 1,339 1.4% 0.0% N/A N/A Fairfax North County Central1 County South40,000 County 22,030 2,900North 24,930County 62.3%Central 7.3% County $19.80South $15.00-$19.80 County Larkspur Total Occupancy 3Available SF 274,665Vacancy 0 33,236 33,236 12.1%Min Avg 4.3% Asking Max $42.00 $42.00-$42.00 Central County Totals 9 1,072,920 22,030 46,399 68,429 6.4% 2.3% $40.13 $15.00-$45.00

GrossSan Rafael Leasable Area by Center9 607,324 0 42,293 42,293 7.0% 9.1% $23.08 $18.00-$40.00 Novato 10 1,350,645 12,015 79,694 91,709 6.8% 5.7% $31.80 $15.00-$48.00 North County Totals 19 1,957,969 12,015 121,987 134,002 6.8% 6.5% $28.78 $15.00-$48.00 21.2% Total County: 36 3,706,519 34,04517.8% 200,681 234,726Center 6.3% 5.0% $33.78 $15.00-$70.00Square Feet * Average Asking Rate is Annualized NNN Neighborhood 1,344,219 Power 773,250 Occupancy SF / Available SF & Vacancy Asking Rate RangesCommunity NNN 650,142 2 10% $80 Specialty 409,143 11.2% Lifestyle 327,465 36 6.8% 8% 2 36.9% $60 Strip 71,397 5.0% 9.0% 1.9% 2.0% 6% Free Standing 68,009 4.8% 1 Neighborhood Power Community Specialty $40 Total 3,643,625

Millions 4% Lifestyle Strip Free Standing 1 $20 2%

0 0% $0 North Central South North Central South The information contained herein has been obtained from sources we deem reliable. Although Terranomics has no reason to doubt its accuracy we do not guarantee it. Total Occupancy Available SF Vacancy Min Avg Shop Max

Gross Leasable Area by Center

20.9% 20.1% Center Square Feet Neighborhood 1,312,113 Power 773,250 Community 745,142 Specialty 409,143 11.0% 35.4% Other 466,871 12.6% Total 3,706,519

Neighborhood Power Community Specialty Other

The information contained herein has been obtained from sources we deem reliable. Although Terranomics has no reason to doubt its accuracy we do not guarantee it.

Market Analysis / Marin Gateway Shopping Center FOR

LEASE

1 Strawberry Village 2 Alto Center Type of Center: neighbor- Type of Center: neighborhood hood/Community Year Built: 1985 Year Built: 1964 - Location: Mill Valley renovated and expanded 2005 & 2006 Square Feet: 80,000 • Subject premises approximately Location: Mill Valley Vacancy: 3,884 Sf 1,278 sf. • Rare leasing opportunity located in Square Feet: 172,889 Asking Rents: $3.50 a neighborhood shopping center in Exclusive Marketing Team: Mill Valley, California.

Vacancy: 17,200 Sf Mark Koenig • Anchor Tenants include Albertsons, Anchor Tenants 415-451-2404 Rite-Aid & United States Post [email protected] Office. Asking Rents: $3.50 - $4.80 John Schaefer Rite-Aid, Bank of America, Whole Foods (coming2001 soon)1.0 mile ring 2.0 mile ring 3.0 mile ring 415-451-2407 Demographics [email protected] Population 10,677 36,734 56,681 Anchor Tenants Households 5,027 16,553 26,075 Per Capita $57,669 $56,055 $55,139 Inline & Pad Tenants Income Med Household $76,461 $80,029 $78,058 Safeway Income Avg Household $122,478 $124,373 $119,859 US Bank, US Post Office Income Avg Household 2.1 2.2 2.2 Size

Inline & Pad Tenants THE INFORMATION CONTAINED HEREIN HAS BEEN GIVEN TO US BY THE OWNER OF THE PROPERTY OR OTHER SOURCES Discussion • WE DEEM RELIABLE. WE HAVE NO REASON TO DOUBT IT’S ACCURACY, BUT WE DO NOT GUARANTEE IT. ALL Jos. A. Banks, Pizza Antica, Union Bank, World of Sound, Starbucks, Pasta INFORMATION SHOULD BE VERIFIED PRIOR TO PURCHASE OR LEASE. This grocery/drug anchored neighborhood center is located on the west side of Pomodoro, Patrick James, In-n-Out Burger, Ideal Stationers, Wells Fargo Bank, Highway 101 in a more modest neighborhood of Mill Valley. Historically, it has Wolf Camera, Evo Day Spa, and Athleta (opening soon) been a grocery-anchored center being anchored first by Lucky Market, and then Albertsons. A new Whole Foods will replace Lucky’s and should open in the 3rd Discussion quarter of 2010. The Strawberry Village Shopping Center offers an excellent one-quarter-mile The Center is in need of renovation, and traffic in the area can be quite heavy freeway visible location in Southern Marin County with easy access from during peak hours which can make getting in and out of the center somewhat Highway 101 and Tiburon Boulevard. The shopping center was sold in 2004 challenging. While the Alto Center is located near Marin Gateway, it is not and has gone through a major remodel and expansion utilizing a Tuscan-Style directly competitive. theme in both architecture and ambiance.

As a grocery-anchored center with a strong restaurant oriented lifestyle compo- nent, Strawberry Village is not directly competitive with Marin Gateway.

37 Market Analysis / Marin Gateway Shopping Center

3 Corte Madera Town Center 4 The Village at Corte Madera Type of Center: Comm. / Type of Center: regional Mall Year Built: 1985 - Promotional common area Year Built: 1959 - renovation 2005 renovated 986 Location: Corte Madera Location: Corte Madera Square Feet: 439,961 Square Feet: 371,191/retail-76,570/office Vacancy: 17,000 SF Vacancy: 3,084 Sf Asking Rents: $4.60 Asking Rents $3.25 - $4.50 Anchor Tenants Anchor Tenants Nordstrom, Macy’s Safeway Marketplace, Rite Aid, REI, Barnes & Noble, Crate & Barrel, The Bay Club, Container Store Inline Tenants Anthropologie, J. Crew, Lucky Brand, Gap & Baby Gap, Banana Republic, J. Inline Tenants Jill, Pottery Barn & Pottery Barn Kids, Restoration Hardware, Williams Sonoma, Z Gallerie, Pier I, California Pizza Kitchen, Ann Taylor Loft, Paper Zone, Pacific Chico’s, Apple Computer, Bebe, Coach, Boudin SF, the Cheesecake Factory, Catch, Il Fornaio, A.G. Ferrari, Counter Burger, West Elm, Baja Fresh, Chase Abercrombie & Fitch, Bare Essentials, Puma, Lacoste, Michael Stars, Sun- Bank, Radio Shack, and PF Chang’s dance, Blue Mercury, Peek, Juicy Couture, True religion, Lululemon, and Tumi

Discussion Discussion Corte Madera Town Center is a retail repositioning success story. The property The Village at Corte Madera is located on Highway 101 at Paradise Drive. The has successfully combined elements of a neighborhood grocery-anchored center Village is home to two department stores, Nordstrom and Macy’s, and over with community-wide-drawing promotional tenants, restaurants, and a “Marin” 50 specialty shops and restaurants in a renovated “open air” format. With its lifestyle-oriented health club. larger promotional and fashion tenant spaces, The Village at Corte Madera is The success of Corte Madera Town Center’s repositioning illustrates the future part of the Macerich portfolio of “high end” malls catering to affluent and well potential for Marin Gateway. educated trade areas. The Village’s asking rents bodes well for Marin Gateway’s market lease rate projections.

38 Market Analysis / Marin Gateway Shopping Center

5 The Marketplace 6 Cost Plus Plaza Type of Center: Promotional/ Type of Center: Specialty lifestyle Location: larkspur Year Built: 1961 - Year Built: 1977 - renovated 1985 renovated 2002 Location: Corte Madera Square Feet: 63,561 Square Feet: 51,291 Vacancy: 3,700 SF Vacancy: 2,000 SF Asking Rents: $3.50 Asking Rents: $3.25 Anchor Tenants Anchor Tenants Cost Plus World Market, Trader Joes, BevMo Any Mountain, and Book Passage Inline Tenants Inline Tenants The Vitamin Shoppe, Men’s Wearhouse Izzy’s Steaks & Chops, The Right Start, Stretch the Imagination, Jenny Craig & Pacific Tan Discussion Cost Plus Plaza offers central and southern Marin a promotional shopping center Discussion destination. With larger “box-style” tenant space, the property is somewhat com- The Marketplace is located in northern Corte Madera on the west side of petitive with Marin Gateway. Located well to the north of Marin Gateway, Marin Highway-101 just to the north of the Corte Madera Town Center. This smaller Central Plaza addresses a demographic profile with a slightly lower median house- center has somewhat difficult access but very good freeway visibility. Book hold income. In addition, this property, though highly visible, has difficult access. Passage in the center which occupies approximately 12,644 and is one of the The recent addition of Trader Joe’s (3rd store in Marin) and BevMo has extended the most successful independent bookstores in Northern California. The balance of trade area radius for this center. the in-line tenants are primarily service oriented.

39 Market Analysis / Marin Gateway Shopping Center

7 Larkspur Landing 8 Bon Air Center Type of Center: Community Ctr Type of Center: Community Location: larkspur Location: Greenbrae Year Built: 1979 - Year Built: 1952 - renovated 2002 renovated mid 90’s Square Feet: 173,412 Square Feet: 160,000 Vacancy: 26,930 Vacancy: 3,830 SF Asking Rents: $3.00 - $15.00 Asking Rents: $3.25 - $3.75

Anchor Tenants Anchor Tenants Bed, Bath & Beyond, 24 Hour Fitness, Marin Brewing Company Mollie Stone’s, CVS, and David M. Brian

Inline Tenants Inline Tenants CSAA, E & O Trading Company, Togo’s, Cooper Alley Salon, Yoga Live, Star- Sprint PCS, Subway, Jamba Juice, Noah’s Bagels, Bank of America, Chase, bucks, Malia Mills, and various office users Coldwell Banker, Wells Fargo Bank, Peet’s Coffee & Tea, Calico Corners, Arch Rival, Popapery, Solaria’s Toy World, Citibank, Woodlands Pet, and Wipeout Bar Discussion & Grill Restaurant Larkspur Landing was designed as a specialty retail, soft goods, and destination shopping center in the early 80’s. Following the repositioning of Corte Madera Discussion Town Center and the development of the Village at Corte Madera in the late 1980s Larkspur Landing began to experience chronic vacancy problems. Fol- Bon Air Center is a community shopping center located in Greenbrae on Sir lowing a capital improvement program in 2005 and the addition of Bed, Bath & Francis Drake Boulevard just west of Highway-101. The center features CVS Beyond, the center has had greater success in attracting destination restaurant Drug, Mollie Stone’s, and over 50 retail and service-oriented businesses as well and health and fitness-related tenants serving much of southern and central as an office-building component. Bon Air center also offers a covered walkway Marin County. The property changed hands in 2008 and plans call for turning and a beautiful courtyard setting with tables and chairs for people to sit back, the center into a “Country Mart” described by its new owner/developer as “an relax and enjoy the scenery and water feature. intimate non-anchored, open air, public environment with services, shops, bou- Without any promotional or box retailers, Bon Air Center is not directly competi- tiques, and food purveyors”. Completion of this transformation should occur in tive to Marin Gateway. the 4th quarter of 2010.

40 Market Analysis / Marin Gateway Shopping Center

Recent Marin County Lease Comparables

Junior Anchor Tenants Rentable Term NNN Lease Tenant Center / Location City Square Feet Date Signed (Months) Rate PSF Mi Pueblo Foods 330 Bellam Boulevard San Rafael Rentable36,009 3/1/2009 Term180 NNN $22.32 Lease TenantPacific Sales ShamrockCenter / Location Center CitySan Rafael Square24,000 Feet Date 4/20/2009 Signed (Months) Rate $12.72 PSF MiParadise Pueblo Foods Foods Pacheco330 Bellam Plaza Boulevard SanNovato Rafael 36,00923,494 6/25/2009 3/1/2009 120180 $18.00$22.32 WholePacific FoodsSales Market Shamrock731 E. Blithedale Center Ave. MillSan Valley Rafael 24,00023,200 4/20/2009 8/1/2007 240 $12.72$48.50 ParadiseJoanne's FoodsCrafts & Fabrics Pacheco245 Tamal Plaza Vista Blvd CorteNovato Madera23,494 12,500 6/25/2009 1/1/2008 120264 $18.00$31.20 WholeTrader FoodsJoes Market Marin731 Central E. Blithedale Plaza Ave. MillLarkspur Valley 10,96323,200 11/16/2007 8/1/2007 120240 $34.00$48.50 HomeJoanne's Consignment Crafts & Fabrics Center 801245 TamalpaisTamal Vista Drive Blvd Corte MadeMaderara 10,50012,500 8/17/2009 1/1/2008 120264 $23.64$31.20 GolfTrader Mart Joes Marin HomeCentral Center Plaza SanLarkspur Rafael 10,14610,963 11/16/2007 1/19/2010 12060 $12.00$34.00 BeveragesHome Consignment & More, Inc. Center Pacheco801 Tamalpais Plaza Drive CorteLarkspur Madera10,100 10,500 9/27/20078/17/2009 120 $34.00$23.64 Golf Mart Marin Home Center San Rafael 10,146 1/19/2010 60 $12.00 Beverages & More, Inc. Pacheco Plaza Larkspur 10,100 9/27/2007 120 $34.00 Rentable Term NNN Lease Tenant Center / Location City Square Feet Date Signed (Months) Rate PSF In-Line Tenants BJ's Restaurant 5800 Northgate Dr San Rafael Rentable8,510 5/28/2009 Term240 NNN $18.20 Lease TenantPet Food Express HamiltonCenter / Location Marketplace CityNovato Square7,448 Feet Date 5/1/2008 Signed (Months)120Rate $37.00 PSF BJ'sFresh Restaurant Choice 5800400 NorthgateLas Gallinas Dr Ave. San Rafael 8,5105,000 12/2 5/28/9/20102009 240120 $18.20$24.00 UnionPet Food Bank Express StrawberryHamilton Marketplace Village MillNovato Valley 3,3517,448 12/1/2009 5/1/2008 12060 $52.80$37.00 BankFresh Of Choice Marin 19400 SunnysideLas Gallinas Ave Ave. SanMill Valley Rafael 3,1475,000 12/2 1/28/209/201010 180120 $35.04$24.00 JennyUnion BankCraig Weight Loss TheStrawberry Marketplace Village CorteMill Valley Madera 2,7813,351 7/30/200812/1/2009 60 $33.00$52.80 TamalpaisBank Of Marin Bank 99919 GrantSunnyside Ave Ave NovatoMill Valley 2,7553,147 1/28/20 7/2/200810 120180 $4$35.048.00 JennyTrader Craig Joe's Weight Loss The2040 Marketplace Redwood Hwy CorteLarkspur Madera 2,7812,500 7/30/20087/31/2009 6099 $33.00$34.00 TamalpaisStretch The Bank Imagination 999The Marketplace Grant Ave NovatoCorte Madera 2,2862,755 10/17/2008 7/2/2008 12060 $36.00$48.00 ChipotleTrader Joe's 58002040 NorthgateRedwood HwyDr SanLarkspur Rafael 2,2742,500 7/31/2009 2/5/2009 12599 $$34.0036.00 StretchSuzy Cakes The Imagination BonThe MarketplaceAir Center CorteGreenbrae Madera 2,2861,500 10/17/2008 1/12/2010 12060 $36.00$45.00 ChipotleGame Stop 5800208 NorthgateVintage Wy. Dr SanNovato Rafael 2,2741,302 4/30/2009 2/5/2009 12560 $$44.0036.00 GDSuzy Wireless Cakes Communications HamiltonBon Air Center Marketplace NovatoGreenbrae 1,2871,500 4/22/20081/12/2010 120 $48.00$45.00 Game Stop 208 Vintage Wy. Novato 1,302 4/30/2009 60 $44.00 GD Wireless Communications Hamilton Marketplace Novato 1,287 4/22/2008 120 $48.00

41 Market Analysis / Marin Gateway Shopping Center

Sales Comparables

Center Location Sales - Listing Price per Type Size (SF) Anchors Closed Price Cap Rate SF Seller Buyer Debt Comments Waterford Shopping Center 125,670 Safeway Jan-10 $44,000,000 8.25% $350.12 Shea Thomas Scott 65% LTV below-market rate Dublin, CA Retail Properties assumable debt Grocery-Anchored Neighborhood Mixed Use

Santa Ana Dwontown Plaza 100,306 Food 4 Less Jan-10 $17,250,000 7.50% $171.97 National Regency Centers 7.5% cap on in-place NOI (89% occ at Santa Ana, CA Famsa Realty & time of sale) 8.75 on pro-forma. All Grocery-Anchored Discount Center Development Cash Transaction

Plaza at Sunbow 99,304 Jan-10 $21,039,757 7.90% $211.87 Levine Investec All Cash Transaction Chula Vista, CA CVS Investments Properties Grocery/Drug-Anchored Neighborhood Village at Indian Wells 104,600 Ralphs Dec-09 $20,000,000 7.50% $191.20 A&B Stoneridge All Cash Transaction Indian Wells, CA Fresh Fare Properties Capital Partners Grocery-Anchored Neighborhood CVS Plaza Del Rio 69,934 Vons Nov-09 $12,000,000 7.90% $171.59 Donahue Westwood All Cash Transaction San Juan Capistrano, CA Schriber Financial Grocery-Anchored Neighborhood Mixed Use

Stevens Creek Central Shopping Center 195,952 Safeway Oct-09 $52,000,000 7.90% $265.37 HART AEW Capital All Cash Transaction San Jose, CA Marshall's Advisors Management Community Center Sports Authority

Tustin Courtyard 81,375 Sprouts Oct-09 $18,500,000 8.08% $227.34 Donahue Frred Kunik and All Cash Transaction Tustin, CA Schriber Irving Barr Grocery-Anchored Neighborhood Mixed Use

Novato Fair Shopping Center 133,862 Safeway Jul-09 $23,646,720 8.50% $176.65 Kimco Realty - Kimco Realty 55% LTV below-market rate Novato, CA Rite Aid Prudential Corporation assumable 3-year bridge loan Neighborhood Center Big Lots

Old Ranch Shopping Center 144,000 Target (NAP) Jun-09 $45,000,000 7.25% $312.50 Levine Private Capital New 50% LTV full-recourse 5-year Seal Beach, CA Bed Bath & Beyond Investments Trade Buyer loan Target and Grocery-Anchored Community Center Ralph's

Crossroads Entertainment Center 90,879 Harkins Theatre Apr-09 $25,403,000 6.70% $279.53 Royal GAS Distomo 80% LTV assumable CMBS debt Chino Hills, CA Investors Group Entertainment-oriented Lifestyle Center Group

Crossroads Marketplace 263,757 Loew's (Nap) Feb-09 $78,385,341 5.90% $297.19 Lakha SKT Investments 81% LTV assumable debt @ 5.4% Chino Hills, CA Costco (NAP) Investment LLC Pricing reflects 2008 negotiation Promotional Center Best Buy, Stein Mart Sports Chalet

The Pavillion at La Quinta 166,099 Henry's Market Feb-09 $41,200,000 7.81% $248.04 Thomas Pricing reflects 2008 negotiation La Quinta, CA Properties Neighborhood Center Larkspur Landing Shopping Center 173,230 Bed Bath & Beyond Jan-09 $65,000,000 7.20% $375.22 Rosenfeld and Inland Pricing reflects 2008 negotiation 2257 Larkspur Landing Circle 24 Hour Fitness Company Western REIT Larkspur, CA Lifestyle Center

42 Marin Gateway Shopping Center, Marin City, CA Financial Analysis

Financial Overview Marin Gateway Shopping Center offers an investor the opportunity to acquire The projected financial performance of the Property has been modeled using a high-quality, regionally-drawing promotional/community shopping center in ARGUS software. A projection of the Property’s 10-year net operating income southern Marin County, one of the nation’s most sought-after markets. The and cash flow as well as detailed assumption follows the ground lease summa- Property, enjoying a highly-visible and easily-accessible freeway location, pro- ry. As the Property is being offered un-priced, no yield projections are included vides its ownership with a predictable and growing income stream. Moreover, but can be easily modeled. A copy of the ARGUS model will be delivered by the market area’s low vacancy rates and extremely high barriers to the develop- email upon request. ment of new competition combine with the Property’s below-market rents to promise predictable increases in net operating income and cash flow over time. PLEASE NOTE THAT THE FOLLOWING PROJECTIONS ARE BEING PROVIDED FOR CONVENIENCE ONLY. NO REPRESENTATIONS OR WARRANTIES OF ANY KIND ARE BEING MADE BY THE OWNER OR CASSIDY TURLEY BT COM- MERCIAL REAL ESTATE REGARDING THESE OR ANY OTHER FINANCIAL PROJECTIONS. INTERESTED PARTIES ARE MOST STRONGLY ENCOURAGED TO CONSULT WITH EXPERTS TO REACH THEIR OWN INDEPENDENT CON- CLUSIONS REGARDING THE POTENTIAL FINANCIAL PERFORMANCE OF ANY POTENTIAL INVESTMENT.

43 Financial Analysis / Marin Gateway Shopping Center

10-Year Projection of Net Operating Income & Cash Flow

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug-2011 Aug-2012 Aug-2013 Aug-2014 Aug-2015 Aug-2016 Aug-2017 Aug-2018 Aug-2019 Aug-2020 Aug-2021

Potential Gross Revenue Base Rental Revenue $18.00 $3,275,949 $3,328,671 $3,402,368 $3,454,317 $3,550,692 $3,644,563 $3,776,674 $3,857,318 $3,951,574 $4,039,463 Absorption & Turnover Vacancy ($1.16) ($211,475) $0 ($12,707) $0 ($31,711) ($250,038) ($26,210) ($27,214) ($9,406) ($28,868) Scheduled Base Rental Revenue $16.83 $3,064,474 $3,328,671 $3,389,661 $3,454,317 $3,518,981 $3,394,525 $3,750,464 $3,830,104 $3,942,168 $4,010,595 Expense Reimbursement Revenue $4.72 $859,348 $928,372 $948,632 $975,263 $993,652 $966,605 $1,046,328 $1,073,718 $1,104,883 $1,117,906 Best Buy Imprv Reimb $0.91 $166,023 $166,023 $166,023 $166,023 $166,023 $166,023 $166,023 $166,023 $166,023 $166,023 Total Potential Gross Revenue $22.47 $4,089,845 $4,423,066 $4,504,316 $4,595,603 $4,678,656 $4,527,153 $4,962,815 $5,069,845 $5,213,074 $5,294,524 General Vacancy $0.00 $0 ($85,332) ($81,983) ($96,554) ($66,159) $0 ($89,025) ($91,381) ($135,874) ($134,891) Effective Gross Revenue $22.47 $4,089,845 $4,337,734 $4,422,333 $4,499,049 $4,612,497 $4,527,153 $4,873,790 $4,978,464 $5,077,200 $5,159,633 Operating Expenses Management Fees $0.67 $122,695 $130,132 $132,670 $134,971 $138,375 $135,815 $146,214 $149,354 $152,316 $154,789 TYPE I - CAMS $1.77 $322,540 $332,216 $342,183 $352,448 $363,022 $373,912 $385,130 $396,684 $408,584 $420,842 TYPE II - Trash $0.31 $57,060 $58,772 $60,535 $62,351 $64,222 $66,148 $68,133 $70,177 $72,282 $74,450 TYPE III- Property Ins $0.11 $20,469 $21,083 $21,716 $22,367 $23,038 $23,729 $24,441 $25,174 $25,930 $26,707 TYPE III - Liability Ins $0.02 $3,370 $3,471 $3,575 $3,682 $3,793 $3,907 $4,024 $4,145 $4,269 $4,397 TYPE IV- Taxes $2.57 $468,706 $478,450 $488,400 $498,561 $508,936 $519,531 $530,351 $541,399 $552,682 $564,206 TYPE V- Water, Fire & Pest $0.36 $65,066 $67,018 $69,029 $71,099 $73,232 $75,429 $77,692 $80,023 $82,424 $84,896 Total Operating Expenses $5.82 $1,059,906 $1,091,142 $1,118,108 $1,145,479 $1,174,618 $1,198,471 $1,235,985 $1,266,956 $1,298,487 $1,330,287 Net Operating Income $16.65 $3,029,939 $3,246,592 $3,304,225 $3,353,570 $3,437,879 $3,328,682 $3,637,805 $3,711,508 $3,778,713 $3,829,346 Debt Service Interest Payments $8.63 $1,571,509 $1,545,384 $1,517,793 $1,488,654 $1,595,441 $1,703,487 $1,673,071 $1,640,618 $1,605,991 $1,569,045 Principal Payments $2.56 $465,760 $491,886 $519,477 $548,616 $502,019 $454,164 $484,580 $517,033 $551,660 $588,606 Total Debt Service $11.19 $2,037,269 $2,037,270 $2,037,270 $2,037,270 $2,097,460 $2,157,651 $2,157,651 $2,157,651 $2,157,651 $2,157,651

Cash Flow After Debt Service $5.45 $992,670 $1,209,322 $1,266,955 $1,316,300 $1,340,419 $1,171,031 $1,480,154 $1,553,857 $1,621,062 $1,671,695 Leasing & Capital Costs Tenant Improvements $0.75 $136,990 $0 $11,013 $0 $21,582 $202,752 $37,643 $16,228 $20,561 $25,019 Leasing Commissions $0.74 $134,730 $0 $10,524 $0 $20,625 $180,491 $35,973 $15,508 $20,356 $23,909 CapEx Reserve $0.20 $36,340 $37,430 $38,553 $39,710 $40,901 $42,128 $43,392 $44,694 $46,034 $47,415 Total Leasing & Capital Costs $1.69 $308,060 $37,430 $60,090 $39,710 $83,108 $425,371 $117,008 $76,430 $86,951 $96,343 Cash Flow After Debt Service & CapX $3.76 $684,610 $1,171,892 $1,206,865 $1,276,590 $1,257,311 $745,660 $1,363,146 $1,477,427 $1,534,111 $1,575,352

Rentable Area 182,030 Existing Debt $28,940,973 Existing financing matures in Feb-2015. Assumptions for refinance are: Purchase Price Unpriced Interest Rate 5.47% Balloon Pmt 26,629,493 Amortization 25-years Loan PSF $158.99 Interest Rate 6.50% Payment $2,157,651

44 Financial Analysis / Marin Gateway Shopping Center

Refinance Sensitivity Interest Rate 6.50% 7.00% 7.50% 8.00% 8.50% Debt Constant (25-yr Amo) 8.10% 8.48% 8.87% 9.26% 9.66%

The current loan on the Property will mature in February 2015. The balloon Conservative Exit Cap Rate (2015) 8.00% 8.00% 8.00% 8.00% 8.00% payment at that time is expected to be approximately $26,630,000. The Projected Stabilized NOI (2015) $3,437,879 $3,437,879 $3,437,879 $3,437,879 $3,437,879 chart to the right displays potential refinance scenarios for the Property and Conservative Lender's Valuation (2015) $42,970,000 $42,970,000 $42,970,000 $42,970,000 $42,970,000 demonstrates that, even across a broad range of interest rates, the Property Balance at Existing Debt Maturity $26,629,493 $26,629,493 $26,629,493 $26,629,493 $26,629,493 should easily service replacement debt at loan-to-value-ratios within lender Projected New Loan to Value 62% 62% 62% 62% 62% LTV standards. Projected Debt Service Interest 1,571,509 1,545,384 1,517,793 1,488,654 1,488,654 Principal 465,760 491,886 519,477 548,616 548,616 Total Proj. Debt Service (25-yr Amo) 2,157,651 2,258,541 2,361,475 2,466,369 2,573,135

Projected Net Operating Income 3,437,879 3,437,879 3,437,879 3,437,879 3,437,879 Projected Cash Flow 1,280,228 1,179,338 1,076,404 971,510 864,744

Projected Leveraged Yield 7.83% 7.22% 6.59% 5.95% 5.29%

45 Financial Analysis / Marin Gateway Shopping Center

Financial Model Assumptions Lease Rates & Escalations Market lease rates range from $15.00 to $33.00 psf/month dependent upon Analysis Start Date tenant’s location and size. Market lease rent for in-line tenant locations are The 10-YR hold period is calculated on a fiscal year basis beginning July 1, 2010. $24.00 psf to $33.00 psf. Suites 120 and 130 (above 6,800 square feet) are $24.00 psf. Anchor tenants are between $15.00 psf. Market leasing assump- Number of Tenants tions are detailed on a following page. Model applies 3% annual market rent growth for all tenant spaces. 28 Units; 8 Vacant Spaces

Lease Term Income and Lease Assumptions The model assumes five-year lease terms for most spaces. Larger Anchor and Most in-line tenants’ (< 5,000 square feet) in-place rents include annual rental Jr. Anchor Suites assume 10-year terms. increases among 3% to 5%. A significant portion, 75%, of the project’s tenants are paying below market rents, have rental increases every four to five years, Leasing Commissions and we assume these tenants will exercise their fixed rate option terms. The analysis models tenant rollovers with market leasing commissions of 6.0% Renewal for new leases and 3.0% for renewals. The model assumes 100% renewal for Anchor tenants and Suites 100 and 110. The analysis applies a renewal assumption of 70% for all tenants that do not have options to exercise. The model assumes that 6 tenants will exercise Tenant Improvements their options at the end of their initial term. Babies R US, Panda Express and Outback Steakhouse each have one 5-year option. Burger King, Ross Dress for The cash flow analysis assumes tenant improvement allowances of $10.00 psf Less, and Starbucks have multiple 5-year options. on new leases and $5.00 psf tenant improvements on renewals.

Downtime Vacant Space The analysis assumes nine months downtime for all in-line tenant suites, twelve Any current vacancies are assumed to lease up at the beginning of the 7th months downtown for Anchors and ground leases, and no downtime for the cell month of the analysis and begin generating income at that time. Before the tower. 7th month vacant spaces do not produce rent.

46 Financial Analysis / Marin Gateway Shopping Center

Operating Expenses Capital Reserve The project’s operating expenses are based upon the owner’s anticipated The financial model assumes a $0.20 psf annual capital reserve expense. operating expenses and reasonable projections. The model applies a general inflation rate of 3.0% for all standard building expenses and 2.0% inflation on General Vacancy property taxes. The expenses also include a Management Fee equal to 3.0% of The cash flow analysis applies a 5% General Vacancy deduction to potential Effective Gross Revenue. gross revenue. General Vacancy excludes the following tenants; Babies R US, The property is subject to California’s Proposition 13 real estate tax legisla- Best Buy, Burger King, CVS and Ross Dress for Less. The model does not in- tion which requires a reassessment of the property tax liability upon transfer of clude any additional Credit & Collection deduction. ownership based upon the sale price. The property tax is calculated at a millage rate of 1.0686% of the reassessed value plus additional special assessments. In the ARGUS model, to calculate the proper tax expense, enter a Purchase Price in Argus and the model will adjust the tax expenses based upon this new value.

Expense Reimbursements Model assumes for all new tenants or upon rollover expenses are reimbursed on a NNN basis plus a 15% administration fee. See tenant’s expenses reimburse- ment schedule for detailed methods.

47 Financial Analysis / Marin Gateway Shopping Center

Investment Assumptions

General Assumptions Building Expenses Analysis Start September 1, 2010 Management Fees 113,955 Occupancy at the Start Date 92.45% TYPE I - CAMS 322,540 TYPE II - Trash 57,060 Rentable Square Feet 181,700 TYPE III- Property Ins 20,469 TYPE III - Liability Ins 3,370 Purchase Price TYPE IV- Taxes 433,459 $ Amount Unpriced TYPE V- Water, Fire & Pest 65,066 Price PSF N/A Owners Expense Total Operating Expenses $1,015,919 Growth/Inflation Rates Consumer Price Index (CPI) 3.00% Building Expenses Per Square Foot Property Taxes 2.00% Management Fees $0.63 Expenses 3.00% TYPE I - CAMS $1.78 TYPE II - Trash $0.31 Allowances TYPE III- Property Ins $0.11 General Vacancy * 5.00% TYPE III - Liability Ins $0.02 Capital Reserves ($/RSF/YR) $0.20 TYPE IV- Taxes $2.39 TYPE V- Water, Fire & Pest $0.36 Owners Expense * General Vacancy is of Schedule Base Rental Revenue Total $5.59 * Excludes Credit Tenants; Babies R Us, Best Buy, Burger King, Long Drugs & Financing - Existing Loan Ross Dress for Less Loan Amount $28,940,973 Loan-to-Value N/A Interest Rate 5.47% Loan Start Date March 6, 2005 Amortization 30 Call Date March 5, 2015

48 Financial Analysis / Marin Gateway Shopping Center

Tenant Expense Reimbursement Schedule

Project Property Liability Property Water, Fire & Life Administrative Tenant Management CAM Trash Insurance Insurance Taxes Pest Control Safety Fee* Panda Express No Yes Yes Yes Yes Yes No Yes 12% Burger King Yes Yes No No Yes Yes No Yes 15% Soccer Pro Yes Yes Yes Yes Yes Yes Yes Yes 10% CVS No Yes No No Yes Yes No No 0% Gateway Beauty Yes Yes Yes Yes Yes Yes Yes Yes 15% Holly Nails #1 Yes Yes Yes Yes Yes Yes Yes Yes 15% Cleaners Yes Yes Yes Yes Yes Yes Yes Yes 10% Pomodoro Pizza Yes Yes Yes Yes Yes Yes Yes Yes 15% Massage Envy Yes Yes Yes Yes Yes Yes Yes Yes 15% Little Gyms Yes Yes Yes Yes Yes Yes Yes Yes 15% Best Buy No Yes No Yes Yes Yes No No 10% Styles for Less Yes Yes Yes Yes Yes Yes Yes Yes 10% Starbucks No Yes Yes Yes Yes Yes Yes Yes 10% Outback Steakhouse No Yes No No Yes Yes No No 10% Ross Dress for Less No Yes No Yes Yes Yes No No 10% Babies R US No Yes Yes Yes Yes Yes No No 5% Sleep Train No Yes Yes Yes Yes Yes Yes Yes 10% Dollar Tree No Yes Yes Yes Yes Yes Yes Yes 10% AT&T Wireless No No No No No No No No N/A Gateway Center Library No Yes Yes No No No No No N/A

* The expenses included in the Administrative Charge vary by tenant. See the ARGUS analysis for details on individual reimbursement calculations.

49 Financial Analysis / Marin Gateway Shopping Center

Market Leasing Assumptions

MLA Categories In-line $30 In-line $33 $24.00 PSF Anchor 1 Anchor 2 - Anchor 3 - $60.00 - GL Cell Tower $135,000 - In-line $24

Renewal Probability 70.00% 70.00% 70.00% 100.00% 100.00% 100.00% 100.00% 100.00% 70.00% 70.00%

Market Rent New: $30.00 $33.00 $24.00 $15.00 $15.00 $15.00 $60.00 $24,000.00 $20.77 $24.00 Renewal: $30.00 $33.00 $24.00 $15.00 $15.00 $15.00 $60.00 $24,000.00 $20.77 $24.00 Result: $30.00 $33.00 $24.00 $15.00 $15.00 $15.00 $60.00 $24,000.00 $20.77 $24.00

Months Vacant New: 9.00 9.00 9.00 12.00 12.00 12.00 9.00 9.00 12.00 9.00 Renewal: 0 0 0 0 0 0 0 0 0 0 Rounded: 3 3 3 0 0 0 0 0 4 3

Tenant Improvements New: $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $0.00 $0.00 $10.00 Renewal: $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $0.00 $0.00 $5.00 Result: $6.50 $6.50 $6.50 $5.00 $5.00 $5.00 $5.00 $0.00 $0.00 $6.50

Leasing Commissions New: 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 0.00 6.00% 6.00% Renewal: 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 0.00 3.00% 3.00% Result: 3.90% 3.90% 3.90% 3.00% 3.00% 3.00% 3.00% 0.00 3.90% 3.90%

Non-Weighted Items Rent Changes Yes Yes Yes Yes Yes Yes Yes Yes Yes Retail Rent Changes Reimbursements PRS PRS PRS Net Net Net Net None Net PRS Term Lengths (Years) 5 5 5 10 10 10 10 5 10 5

50 Financial Analysis / Marin Gateway Shopping Center

In-Place Rents Site Plan Market Leasing Assumptions Site Plan

GL $100,000 - $150,000 $21 - $25 U. S. HIGHWAY 101 GL $100,000 - $150,000 $21 - $25 U. S. HIGHWAY 101 Outback Outback $37 - Up $15 - $20 Steak House $37 - Up $15 - $20 Steak House 192 192 $31 - $36 Less than $15 $31 - $36 Less than $15 $26 - $30 New Tenant $26 - $30 New Tenant

Ross Ross 194 194

Babies R Us Babies R Us 196 196 190A 190A Best Buy Best Buy 180 180 190B 190B

190C 190C

DONAHUE STREET 100 DONAHUE STREET 100

170 170

160J 110 160J 110 160I 160I 160H 160H 160G 160G 160F 160F 160E 160E 160D 120 160D 120 Gateway Center 160C Gateway Center 160C

Public Library 160B Public Library 160B 160A 160A CVS CVS 130 130 150 DONAHUE STREET 150 DONAHUE STREET 140C 140C 140B 140B 140A 140A

51 Financial Analysis / Marin Gateway Shopping Center

Rent Roll 1 Market Leasing Assumptions

Tenant Name Type & Suite Number Square Tenant % Annual Annual Monthly Monthly Operating Options Lease Dates & Term Feet of Project Date PSF Rent Rent PSF Rent Rent Expenses & Comments

Panda Express 1,989 1.09% Current $60.83 $120,991 $5.07 $10,083 NNN - No Mgt. Fee *3 x 5 YR Option Retail, Suite: 100 Jan-2015 * $66.92 +12% Admin. charge on CAM @ Fixed Rent Jan-2005 to Dec-2014 Jan-2020 * $73.61 Jan-2025 * $80.17

Burger King 2,889 1.59% Current $52.64 $152,077 $4.39 $12,673 NNN - No Trash, Prop Ins., *4 x 5 YR Option Retail, Suite: 110 Dec-2011 $60.23 & Water @ Fixed Rent Aug-1996 to Jul-2016 Dec-2016 * $69.62 +10% Admin. Charge % Rent @ 5% breakpoint Dec-2021 * $80.06 breakpoint not reached Dec-2026 * $96.08 Dec-2031 * $115.29

Dollar Tree Stores 8,458 4.65% Current $23.50 $198,763 $1.96 $16,564 NNN *3, 5-year options @ fixed rates Retail, Suite: 120 Feb-2016* $25.62 +15% Admin. Charge Feb-2009 to Jan-2016 Feb-2021* $27.92 Feb-2026* $30.43

Sleep Train 4,500 2.48% Current $22.20 $99,900 $1.85 $8,325 NNN - No Mgt Fee *2 x 5 YR Option Retail, Suite: 130A Jun-2015 $24.48 +10% Admin. Charge @ Fixed Rent Jun-2010 to May 2020 Jun-2020* FMV Jun-2025* FMV

NEW TENANT 2,059 3.76% Current $30.00 $61,770 $2.50 $5,148 NNN Retail, Suite: 130B Mar-2012 $30.90 +15% Admin. Charge Mar-2011 to Feb-2016 Mar-2013 $31.83 Mar-2014 $32.78 Mar-2015 $33.77

NEW TENANT 1,556 0.85% Current $30.00 $46,680 $2.50 $3,890 NNN Retail, Suite: 140A Mar-2012 $30.90 +15% Admin. Charge Mar-2011 to Feb-2016 Mar-2013 $31.83 Mar-2014 $32.78 Mar-2015 $33.77

52 Financial Analysis / Marin Gateway Shopping Center

Rent Roll 2 Rent Roll

Tenant Name Type & Suite Number Square Tenant % Annual Annual Monthly Monthly Operating Options Lease Dates & Term Feet of Project Date PSF Rent Rent PSF Rent Rent Expenses & Comments

NEW TENANT 2,091 0.85% Current $30.00 $62,730 $2.50 $5,228 NNN Retail, Suite: 140B Mar-2012 $30.90 +15% Admin. Charge Mar-2011 to Feb-2016 Mar-2013 $31.83 Mar-2014 $32.78 Mar-2015 $33.77

Soccer Pro 2,030 1.12% Current $31.92 $64,798 $2.66 $5,400 NNN *1 x 5 YR Options Retail, Suite: 140C Oct-2010 $32.88 +10% Admin. Charge @ FMV Aug-2007 to Sept-2012 Oct-2011 $33.95 Oct-2012 * $30.90

Longs Drugs 19,800 10.88% Current $9.53 $188,694 $0.79 $15,719 NNN *5 x 5 YR Options Retail, Suite: 150 Mar-2012 $10.47 +10% Admin. Charge @ Fixed Rent Feb-1997 to Feb-2022 Mar-2017 $11.73 No Mgt, Trash, Prop Ins., & Mar-2022 * $12.95 $256,367 Water, Fire & Pest, Life Safety Mar-2027 * $14.17 $280,543 Mar-2032 * $15.63 $309,550 Mar-2037 * $17.59 $348,244 Mar-2042 * $20.03 $396,616

NEW TENANT 1,300 0.71% Current $30.00 $39,000 $2.50 $3,250 NNN Retail, Suite: 160A Mar-2012 $30.90 +15% Admin. Charge Mar-2011 to Feb-2016 Mar-2013 $31.83 Mar-2014 $32.78 Mar-2015 $33.77

Gateway Beauty 1,597 0.88% Current $31.32 $50,018 $2.61 $4,168 NNN *1 x 5 YR Options Retail, Suite: 160B Mar-2011 $32.28 +10% Admin. Charge @ FMV Mar-2008 to Feb-2013 Mar-2012 $33.24

NEW TENANT 1,300 0.71% Current $30.00 $39,000 $2.50 $3,250 NNN Retail, Suite: 160C Mar-2012 $30.90 +15% Admin. Charge Mar-2011 to Feb-2016 Mar-2013 $31.83 Mar-2014 $32.78 Mar-2015 $33.77

53 Financial Analysis / Marin Gateway Shopping Center

Rent Roll 3 Rent Roll

Tenant Name Type & Suite Number Square Tenant % Annual Annual Monthly Monthly Operating Options Lease Dates & Term Feet of Project Date PSF Rent Rent PSF Rent Rent Expenses & Comments

Nails #1 1,200 0.66% Current $39.34 $47,208 $3.28 $3,934 NNN % Rent @ 6% breakpoint Retail, Suite: 160D Feb-2011 $40.52 +15% Admin. Charge breakpoint not reached Jan-2004 to Jan-2015 Feb-2012 $41.73 Feb-2013 $42.99 Feb-2014 $44.28

Subway 900 0.49% Current $34.20 $30,780 $2.85 $2,565 NNN *2, 5-year options at fixed rates Retail, Suite: 160E Jan-2013 $37.56 +10% Admin. Charge Jan-2008 to Dec-2018 Jan-2018* $41.28 Jan-2023* $45.36

NEW TENANT 900 0.49% Current $33.00 $29,700 $2.75 $2,475 NNN Retail, Suite: 160F Mar-2012 $33.99 +15% Admin. Charge Mar-2011 to Feb-2016 Mar-2013 $35.01 Mar-2014 $36.06 Mar-2015 $37.14

Gateway Cleaners 1,750 0.96% Current $14.13 $24,728 $1.18 $2,061 NNN *1 x 5 Year Option Retail, Suite: 160G Sept-2012 $14.55 +10% Admin. Charge @ FMV Sep-2004 to Aug-2014 Sept-2013 $14.99 Sept-2014 $15.44 Sept-2015* FMV

NEW TENANT 1,400 0.77% Current $30.00 $42,000 $2.50 $3,500 NNN Retail, Suite: 160H Mar-2012 $30.90 +15% Admin. Charge Mar-2011 to Feb-2016 Mar-2013 $31.83 Mar-2014 $32.78 Mar-2015 $33.77

54 Financial Analysis / Marin Gateway Shopping Center

Rent Roll 4 Rent Roll

Tenant Name Type & Suite Number Square Tenant % Annual Annual Monthly Monthly Operating Options Lease Dates & Term Feet of Project Date PSF Rent Rent PSF Rent Rent Expenses & Comments

Massage Envy 2,850 1.57% Current $30.00 $85,500 $2.50 $7,125 NNN Office, Suite: 160I&J Jun-2011 $30.00 +15% Admin. Charge Jul-2006 to Jun-2016

Little Gyms 3,850 2.12% Current $27.13 $104,451 $2.26 $8,704 NNN *2 x 5 YR Options Retail, Suite: 170 Mar-2011* FMV +15% Admin. Charge @ FMV Mar-2006 to Feb-2011 Mar-2016* FMV

Best Buy 48,615 26.71% Current $13.52 $657,275 $1.13 $54,773 NNN - No Mgt., Trash, Water *4 x 5 YR Option Retail, Suite: 180 Apr-2014 $14.87 & Life Safety @ Fixed Rent Apr-1999 to Mar-2019 Apr-2019 * $16.36 +10% Admin on CAM Apr-2024 * $17.99 Apr-2029 * $19.79 Apr-2034 * $21.77

NEW TENANT 3,093 1.70% Current $33.00 $102,069 $2.75 $8,506 NNN Retail, Suite: 190C Mar-2012 $33.99 +15% Admin. Charge Mar-2011 to Feb-2016 Mar-2013 $35.01 Mar-2014 $36.06 Mar-2015 $37.14

Styles for Less 2,200 1.21% Current $16.36 $35,992 $1.36 $2,999 NNN *1 x 5 YR Options Retail, Suite: 190B Aug-2012* $37.08 +10% Admin. Charge @ FMV Aug-2007 to Jul-2012 Aug-2017* $38.19

55 Financial Analysis / Marin Gateway Shopping Center

Rent Roll 5 Rent Roll

Tenant Name Type & Suite Number Square Tenant % Annual Annual Monthly Monthly Operating Options Lease Dates & Term Feet of Project Date PSF Rent Rent PSF Rent Rent Expenses & Comments

Starbucks 1,837 1.01% Feb-2010 $38.16 $70,100 $3.18 $5,842 NNN - No Mgt *4 x 5 YR Option Retail, Suite: 190A Feb-2015 * $41.40 @ Fixed Rent Feb-2005 to Feb-2015 Feb-2020 * $46.32 Feb-2025 * $51.84 Feb-2035 * FMV

Outback Steakhouse 6,500 3.57% Current $16.75 $108,875 $1.40 $9,073 NNN *2 x 5 YR Option Retail, Suite: 192 Dec-2013 * $18.43 +10% Admin Charge on CAM @ Fixed Rent Dec-1998 to Nov-2013 Dec-2018 * $20.27 No Mgt, Trash, Prop Ins., % Rent @ 10% over $3m Water & Life Safety breakpoint not reached

Ross Dress for Less 27,619 15.17% Current $12.25 $338,333 $1.02 $28,194 Pays CAM, Ins., & Taxes *3 x 5 YR Options Retail, Suite: 194 Feb-2012 * $13.25 +10% Admin Charge on CAM @ Fixed Rent Feb-2007 to Jan-2012 Feb-2017 * $14.50 % Rent @ 2% breakpoint Feb-2022 * $16.00 breakpoint not reached

Babies R US 25,416 13.96% Current $18.00 $457,488 $1.50 $38,124 NNN - No Mgt. Fee *3 x 5 YR Option Retail, Suite: 196 Feb-2016 * $19.80 Water & Life Safety @ Fixed Rent Oct-2004 to Jan-2016 Feb-2021 * $21.78 +5% Admin Charge on CAM Feb-2026 * $23.96

AT&T Wireless 1 0.03% Current* $21,300 $21,300 $1,775 $1,775 None *2.5% annual increases Cell Tower are assumed July-1998 Dec-2028

Gateway Center Library 4,000 2.20% N/A N/A N/A N/A N/A N/A Library Jul-1996 to Feb-2047

56 Financial Analysis / Marin Gateway Shopping Center

Customary Closing Costs in Marin City and Marin County

CLTA Title Insurance Buyer

ALTA Title Insurance Buyer

Escrow Buyer

County Transfer Tax Seller

City Transfer Taxes None

57