HUNTINGTON BEACH PIER PACIFIC OCEAN PACIFIC OCEAN

SAN DIEGO FWY ±328,000 VPD

MILE SQUARE GOLF COURSE SANTA ANA RIVER

LOS AMIGOS HIGH SCHOOL

S. HARBOR BLVD

±45,000 VPD

16111 HARBOR BLVD, FOUNTAIN VALLEY, CA OFFERING MEMORANDUM ™ EXECUTIVE CONTENTS 04 OVERVIEW

FINANCIAL 06 OVERVIEW

AREA 10 OVERVIEW

TENANT 16 OVERVIEW

LISTED BY

CHAD KURZ ARON CLINE SVP & NATIONAL DIRECTOR SVP & SENIOR DIRECTOR DIRECT (214) 692-2927 DIRECT (949) 432-4509 MOBILE (562) 480-2937 MOBILE (818) 632-0233 [email protected] [email protected] LIC # 01911198 (CA) LIC # 01904371 (CA) INVESTMENT HIGHLIGHTS

LONG-TERM OPERATIONAL HISTORY • Curacao, formerly La Curacao, was founded in 1978 and is headquartered in , CA with locations throughout , Arizona, and Nevada. • The tenant, Curacao, has been at this location since 2006. In 2012, the tenant agreed to extend the lease an additional five years with the lease expiring on Oct. 31, 2026. • The subject property was originally built in 1968 but was renovated in 2006 when Curacao moved in. • Curacao ranks as one of the top 100 electronics and appliance retailers in the United States. Their proprietary financing model has opened the door to the world of credit for millions of people.

SOUTHERN CALIFORNIA CORE REAL ESTATE • There are more than 300,000 residents in the 3-mile radius with average household income of $90,000, well above the national average. • There are more than 700,000 residents in the 5-mile radius with ±5% growth over the last decade. The average household income is nearly $100,000. • The subject property is located on Harbor Blvd, a main artery Southern California, which sees ±45,000 vehicles per day. • Fountain Valley is located in the heart of Orange County, it borders Huntington Beach, Costa Mesa, and Santa Ana. • The subject property is centrally located near some of the top attractions in Southern California, including: ·· , the 3rd largest mall in America (4.5 Miles) ·· Disneyland Resort, largest cumulative attendance for a theme park (5.7 Miles) ·· John Wayne Airport, Orange County’s largest airport (7.7 Miles) ·· Angel Stadium and Honda Center, Home of the Los Angeles Angels and Anaheim Ducks (7.8 Miles) ·· University of California Irvine, ± 35,000 students (8.7 Miles) ·· Huntington Beach Pier, Surf City USA (10.0 Miles) ·· Cal State Fullerton, ±40,000 students (12.2 Miles) ·· Cal State Long Beach, ±38,000 students (13.5 Miles) ·· Port of Los Angeles and Long Beach, America’s two largest ports. (23.1 Miles) ·· Downtown Los Angeles, mecca for business (31.9 Miles) ·· LAX Airport, 4th busiest airport in the world (37 Miles) EXECUTIVE SUMMARY EXECUTIVE 4 | OFFERING4 MEMORANDUM INVESTMENT OVERVIEW

ADDRESS LIST PRICE CAP RATE 16111 Harbor Blvd $26,500,949 7.80% Fountain Valley, CA 92708

GROSS LEASABLE AREA LOT SIZE YEAR BUILT ± 103,000 SF ±264,409 (6.07 AC) 1968 / R2008

INVESTMENT HIGHLIGHTS CONTD.

ATTRACTIVE RETURN WITH SIGNIFICANT UPSIDE FOR PASSIVE INVESTMENT • Current income and pricing reflects a ±7.80% cap rate with ±7.7 years of guaranteed term from Adir International, LLC, dba Curacao (Parent Company) • In two and half years, the rent on Curacao resets with a floor of $16.70PSF and a maximum amount of $22.69PSF. At a minimum, the cap rate would be 6.50% and at a maximum, the cap rate would increase to 8.83%. • Tenant is responsible for all common area maintenance, property taxes, and repairs and replacements to the building. The landlord is responsible only for the structural components and foundations of the Premises including the roof structure but not the roof covering or roof membrane.

HIGHLY SOUGHT-AFTER TRADE AREA • Walgreens and Planet Fitness in same shopping center recently traded for ±$15,000,000 at a ±5.03% cap rate. The property represented a price of over $500PSF on the improvements and was paying an average rent of ±$26PSF. • Millions of square feet of retail, office, and industrial in immediate vicinity. • Brand new townhouse condominium built directly to the north of the subject property. • Rare opportunity to acquire over 6 acres of land and improvements at just ±$100PSF on the land and ±$250PSF on the improvements.

AFFLUENT COASTAL, ORANGE COUNTY PROPERTY • Los Angeles-Long-Beach-Anaheim MSA is the second largest metropolitan area in the country with over 13M people, nearly double the DFW MSA • The median average household income in Orange County is over $80,000, significantly higher than the median average household income in America of under $60,000. The average household income in Orange County is over $100,000. • Fountain Valley has a warm Mediterranean climate with average high temperature ranging from 67-81 degrees year-round.

MATTHEWS | 5 LIST PRICE CAP RATE LEASE TERM $26,500,949 7.80% ±7.7 YEARS

TENANT SUMMARY

Tenant Curacao Lease Guarantor Corporate Lease Type NNN Landlord Responsibility Structure Lease Commencement Date 11/21/2006 Lease Expiration Date 10/31/2026 Term Remaining on Lease ±7.7 Years

RENT ROLL % OF ANNUAL LEASE CHANGES CHANGES TENANT GLA RPSF OPTIONS GLA RENT EXP. ON TO Curacao ±103,000 100% $2,032,332 $19.73 10/31/26 3, 5-Year 11/1/2021 *FMR American $34,741.62 9/23/2022 2, 5-Year 12/21/2019 3% annually Tower Total NOI $2,067,073.62

*In 2021 the rent will be adjusted to Fair Market Rent. The rent can be no less than $1,720,100, and no more than the CPI increase from 2016-2021. FINANCIAL OVERVIEW 6 | OFFERING6 MEMORANDUM SITE PLAN 8 | OFFERING MEMORANDUM MATTHEWS | 9 FOUNTAIN VALLEY, CA

Fountain Valley is a suburban city in Orange County, California. As a suburban city, most of Fountain Valley’s residents commute to work in other urban centers. However, in recent years, the city has seen an increase in commercial jobs in the city, with the growth of a commercial center near the Santa Ana River known as the “Southpark” district.

Although the economy of the area was once based mainly on agriculture, the remaining production consists of several fields of strawberries or other small crops, which are gradually being replaced by new office development. Efforts to bolster economic activity are evidenced by the city enacting policies to benefit small businesses, and even going so far as to paint a mural on the facade of a large water treatment building facing the freeway that depicts two shopping bags headlined by the words, “Shop in Fountain Valley.”

Fountain Valley is home to the national headquarters of Hyundai Motor America and D-Link Corporation, the global headquarters of memory chip manufacturer Kingston Technology, and the corporate headquarters of Surefire, LLC, maker of military and commercial flashlights. The Southpark commercial area is also home to offices for companies such as D-Link, Starbucks, Satura and the Orange County Register. There are also a limited number of light industrial companies in this area. In addition, Fountain Valley is the location for Noritz, a tankless water heater manufacturer, and the main west coast offices of Ceridian, a professional employer organization.

DEMOGRAPHICS

POPULATION 1 MILE 3 MILE 5 MILE HOUSEHOLDS 1 MILE 3 MILE 5 MILE 2024 Projection 37,375 320,618 787,829 2024 Projection 8,946 76,039 213,411 2019 Estimate 36,120 311,582 762,297 2019 Estimate 8,635 73,663 205,907 2010 Census 34,591 301,215 726,049 2010 Census 8,244 70,894 195,242 Growth 2019 to 2024 3.48% 2.90% 3.35% Growth 2019 to 2024 3.60% 3.23% 3.64% Growth 2010 to 2019 4.42% 3.44% 4.99% Growth 2010 to 2019 4.74% 3.91% 5.46%

HOUSEHOLD INCOME 1 MILE 3 MILE 5 MILE Average Household Income $89,818 $90,622 $93,639 Median Household Income $67,821 $68,835 $69,040 AREA OVERVIEW 1010 | OFFERING MEMORANDUM ORANGE COUNTY Orange County is situated in between the iconic cities of Los Angeles and San Diego stretching up and 3.22M POPULATION down the west coast from Seal Beach to San Clemente. Due to the large population being highly educated and wealthy, the OC has a major economic advantage. It is consistently one of the highest performing economies in Southern California. 1.06M HOUSEHOLDS Per a recent forecast from economist at Chapman University, Orange County is looking to add 39,000 jobs MEDIAN HH INCOME in 2017 on top of the 43,000 that was added in 2016 making it 254,600 jobs added since 2011, the best $81.837 seven years of hiring since 1995. The job categories predicted to increase are construction, education and health, and professional and business services. Additionally, Chapman sees local incomes, retail 37.7 MEDIAN AGE OC FACTS spending, and home prices continuing to rise as relative economic strength is also foreseen nationally and statewide. With the predicted increase in personal income, household budgets are looking to increase 1.59M NO. OF EMPLOYEES providing more room for leisurely spending. TOP EMPLOYERS & INDUSTRIES

MANUFACTURING

RETAIL TRADE

HEALTHCARE & SOCIAL ASSISTANCE

PROFESSIONAL, SCIENTIFIC, TECH SERVICES

ACCOMODATION & FOOD SERVICE

0 20K 40K 60K 80K 100K 120K 140K 160K 180K 200K

TOTAL EMPLOYEES

3RD RANKED #1 TOP 7 MOST POPULOUS SAFEST AREA WEALTHIEST COUNTIES COUNTY IN THE NATION IN THE NATION IN CALIFORNIA

MATTHEWS | 11 POINTS OF INTEREST

1

12

9

14 3 2 6 10

11

30-MILES 20-MILES 10-MILES 5-MILES 5 4 15 8 7 13 1 DOWNTOWN LOS ANGELES 2 HONDA CENTER ±5.9 MI 3 DISNEYLAND

4 JOHN WAYNE AIRPORT 5 SOUTH COAST PLAZA 6 ANGEL STADIUM

7 UNIVERSITY OF CALIFORNIA IRVINE 8 HUNTINGTON BEACH PIER 9 CAL STATE FULLERTON

10 CAL STATE LONG BEACH 11 PORT OF LOS ANGELES AND LONG BEACH 12 LAX AIRPORT

13 IRVINE SPECTRUM CENTER 14 KNOTT’S BERRY FARM 15 ORANGE COUNTY GREAT PARK ORANGE COUNTY UNIVERSITIES

Orange County’s strong university system has helped contribute to the fact that 37% of residents over the age of 25 have a bachelor’s degree or higher, ranking Orange County as one of the top five regions in the nation when it comes to college-educated residents.

»» With an enrollment of over 31,000 students, UC Irvine is ranked among the nation’s top public universities. The university offers 90 undergraduate degree programs, 68 master’s M.D. Ed.D. and J.D. programs and 50 Ph.D. programs. This UC school contributes $5 billion annually to the local Orange County economy.

»» CSU Fullerton has a large impact on both the local and statewide economy. Annual spending related to the university generates a total impact of $1 billion which sustains more than 8,700 jobs in the region and 9,000 jobs statewide. Every year, the economic impact generated by the university contributes to more than $60 million in local and nearly $65.5 million in statewide tax revenue.

»» Chapman University is a private institution who is ranked among the 2017 Best Colleges and 2nd Most Innovates Schools. Located in Orange County, Chapman encompasses nine schools and colleges including their popular and accredited George L Argyros School of Business and Economics and Dale E. Fowler School of Law.

14 | OFFERING MEMORANDUM MATTHEWS | 15 www.Curacao.com

Curacao is a department chain store with locations in California, Nevada, and Arizona. The 100,000+ square foot retail stores offer a large selection of the latest electronics, fashion and home products. Curacao ranks among the top 100 Electronics and Appliance Retailers in the U.S. Through its proprietary financing models, Curacao has opened the door to the world of credit for millions of people. All of this has allowed Curacao to build a unique relationship with its customers and their communities.

Curacao, formally La Curacao, began as a small local retail store catering primarily to the Latino community by Ron and Jerry Azarkman in 1980. During the ’90s and early 2000s, Curacao experienced tremendous growth by expanding their retail footprint from one to 10 stores around southern California and Arizona. Contributing to the growth was the ability to partner with top brand name manufacturers to offer luxury products and the latest technology to customers. The launch of their first homegrown service, Export, provided customers the ability to buy goods and have them delivered to their families abroad. Additionally, during this period Curacao was able to expand services to include a travel agency, internet service provider, local telephone and cellular network and high-speed internet.

Curacao ranks among the top 50 electronics and appliance retailers in the U.S. The company has expanded many times over, adding new stores and warehouses, offering new services beyond retail sales, and becoming the most trusted name within the retail market. Curacao gains momentum with each passing year, with plans to enter Hispanic markets in new cities and give more communities access to quality products and services.

2,180 11 1978 EMPLOYEES LOCATIONS YEAR FOUNDED TENANT OVERVIEW 1616 | OFFERING MEMORANDUM LEASE ABSTRACT

Tenant: ADIR INTERNATIONAL, LLC d/b/a La Curacao (Parent Company) Tenant Trade Name: Curacao Building Size: ±103,000 SF Date of Lease: N/A Lease Commencement: 11/21/2006 Lease Expiration: 10/31/2026 Original Lease Term: 15 Years originally and extended by 5 years making it 20 year primary term Current – 10/31/2021 - $2,032,332 Current Rent: 11/1/2021-10/31/2026 – greater of FMR or $1,720,100 Option 1-4 – rent is adjusted per CPI formula not to exceed 15% and/or no less than 8.0% Renewal Options: Three (3) extension periods of five (5) years each and one (1) extension period of (4.5) years Repairs and Maintenance Landlord shall maintain in good condition and repair at Landlord’s expense all of the structural components and foundations of (Landlord): the premises only, including the roof structure (but not the roof covering or roof membrane). See 11.3 in lease Except expressly set forth in section 11.3 or otherwise in the lease, Tenant, at its expense, shall keep the premises and each and Repairs and Maintenance every part thereof, including the roof covering (but not roof structure except as provided in Section 11.3), roof membrane, and (Tenant): exterior surfaces of the exterior walls of all buildings, doors, door frames, door checks, windows, window frames, storefronts, signs, and all utility facilities and systems serving the premises. Tenant responsible for HVAC. See section 11.1 of the lease Real Estate Taxes: Tenant shall pay taxes direct. Tenant is responsible however LL must carry policy for full replacement value of the property. Tenant reimburses premiums and Insurance: must list LL as additional insured. Utilities: Tenant pays all utilities directly. See Article 9 of lease. Tenant may assign this lease and to sublet all or any portion of the Premises without LL’s consent so long as the proposed Tenant Assignment and use of the premises meets the requirements of section 1.13 and shall not violate the CC&R’s or any restrictions set forth in the Subletting: agreement. Assignee must have net worth of $50,000,000 or higher. See section 13.1 of lease Financial Reporting Within 30 days after landlord request, but not more than once per year. Percentage Rent None

MATTHEWS | 17 CONFIDENTIALITY AGREEMENT & DISCLAIMER

This Offering Memorandum contains select information pertaining to the business and affairs ofCuracao located at 16111 Harbor Blvd Fountain Valley, CA (“Property”). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum for the Property, you agree:

1 . The Offering Memorandum and its contents are confidential; 2. You will hold it and treat it in the strictest of confidence; and 3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.

Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the MS of affairs of the Property or constitute an indication that there has been no change in the MS of affairs of the Property since the date this Offering Memorandum.

18 | OFFERING MEMORANDUM OFFERING MEMORANDUM 16111 HARBOR BLVD FOUNTAIN VALLEY, CA

LISTED BY CHAD KURZ ARON CLINE SVP & NATIONAL DIRECTOR SVP & SENIOR DIRECTOR DIRECT (214) 692-2927 DIRECT (949) 432-4509 MOBILE (562) 480-2937 MOBILE (818) 632-0233 [email protected] [email protected] LIC # 01911198 (CA) LIC # 01904371 (CA)