Walgreens ™ 4181 Oceanside Blvd | Oceanside, CA Walgreens, Oceanside CA | 1 ™

OFFERING MEMORANDUM

college boulevard

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traffic counts OCEANSIDE BOULEVARD...... ±31,792 VPD ™ COLLEGE2 | BOULEVARD...... ±40,116Matthews Retail VPDAdvisors contents

® 04 EXECUTIVE SUMMARY

06 financial OVERVIEW

10 tenant overview college boulevard 14 area OVERVIEW

exclusively listed by CAITLIN ZIRPOLO college boulevard ASSOCIATE SHOPPING CENTERS [email protected] DIR (949) 432-4518 MOB (760) 685-6873 LIC # 01987844 el warner SVP & NATIONAL DIRECTOR SHOPPING CENTERS [email protected] DIR (310) 579-9690 oceanside boulevard oceanside boulevard MOB (858) 752-3078 LIC # 01890271

kyle matthews CHAIRMAN AND CEO BROKER OF RECORD [email protected] DIR (310) 919-5757 MOB (310) 622-3161 LIC # 01469842 Walgreens, Oceanside CA | 3 executive summary offering summary

Matthews National Retail Investment Group-West is pleased to present the absolute triple-net (NNN) ground lease sale of Walgreens, located in North County San Di- ego, city of Oceanside, California. Situated on the hard corner of College Boulevard and Oceanside Boulevard, this asset benefits from its location in a densely popu- lated submarket with strong demographics. This is an excellent opportunity for an investor to acquire an attractive, low risk-asset in the heart of Southern California.

Outparceled to Del Oro Marketplace, this irreplaceable retail location provides an investor a long 19-year lease term with rare 10% rental increases every ten years.

investment highlights property overview • Highly sought after North County San Diego real estate 4184 Oceanside Blvd WALGREENS Oceanside, CA 92056 • Extremely rare 10% increases every 10 years Gross Leasable Area ± 14,319 SF • More than 19 years remaining on original lease term Lot Size ± 1.19 Acres (51,836 SF)

• Absolute NNN investment with zero landlord responsibilities Year Built 2011

Assessor’s Parcel Number 162-241-18-00 • Unparalleled density with over 141,558 Residents within a 3-mile and 327,171 Residents within a 5-mile radius Zoning PD-1

• Prime real estate located on the desirable hard corner of College Number of Stories One

Boulevard and Oceanside Boulevard with an average of ±76,000 VPD Type of Ownership Leased Fee (Improvements owned by Walgreens)

• Strong retail synergy out parceled to a neighborhood shopping center Lease Structure Absolute NNN Ground Lease

Parking ±28 Free Surface Spaces • Oceanside is the largest city in North County San Diego with a population of over 183,095 people Parking Ratio* ±2 : 1,000 SF

Rental Increases 10% increases (see lease abstract for details)

Options 10 x 5 yr

*Walgreens customers are permitted to park in the remainder of the shopping center spaces subject to the CC&Rs. 4 | Matthews Retail Advisors Walgreens, Oceanside CA | 5 financial overview6 | Matthews Retail Advisors walgreens 4181 Oceanside Blvd Oceanside, CA 92056 List Price...... $10,000,000 CAP Rate - Current ��4.00% Gross Leasable Area ��± 14,319 SF Lot Size �� ± 1.19 Acres Year Built ��2011

Annualized Operating Data Monthly Rent Annual Rent Rent/SF Increases Current - 8/31/2020 $33,333.33 $400,000 $2.33 9/1/2020-8/31/2030 $36,666.66 $440,000 $2.56 10% 9/1/2030-8/31/2035 $40,333.33 $484,000 $2.82 10%

Tenant Summary

Tenant Trade Name Walgreen Boots Alliance Type of Ownership Ground Lease Lease Guarantor Walgreen Boots Alliance Lease Type NNN Rent Commencement Date 9/1/2010 Lease Expiration Date 8/31/2035 Increases 10% increases Options 10 x 5 yr

Walgreens, Oceanside CA | 7 lease abstract

Landlord Del Oro Wal G LLC, A Delaware Limited Liability Co Tenant: Walgreen Co. Guarantor: Walgreen Co. Address: 4181 Oceanside Blvd, Oceanside, CA 92056 Size: ±14,319 Ownership type: Leased Fee Date of Lease: 6/1/2009 Rent Commencement: 9/1/2010 Lease Expiration: 8/31/2035 Remaining Renewal Options: 10 x 5 yr Required Advance Notice of If Tenant shall elect to exercise any such termination option, Tenant shall send written notice thereof to Landlord, at least twelve (12) months prior to the effective date Exercise Options: of such termination, but no notice shall be required to terminate this Lease upon the expiration of the Term Current Rent: $400,000 Primary Term: 9/1/2020: $440,000 9/1/2030: $484,000

Option Periods: Option 1 (9/1/2035): same rent as previous term Option 2 (9/1/2040): $532,400 Rent Increases: Option 3 (9/1/2045): same rent as previous term Option 4 (9/1/2050): increase @ FMV Option 5 (9/1/2055): same rent as previous term Option 6 (9/1/2060): same rent as previous term Option 7 (9/1/2065): increase @ FMV Option 8 (9/1/2070): same rent as previous term Option 9 (9/1/2075): same rent as previous term Option 10 (9/1/2080): increase @ FMV This Lease is a triple net ground lease. Tenant is responsible for all repairs and maintenance to the Property and Improvements. Tenant is Net Lease: responsible for the payment of Taxes, Utilities, and Insurance. Tenant will pay all taxes, assessments, water, sewer or other rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and similar taxes with Real Estate Taxes: respect to the property. Tenant shall, at Tenant's sole cost and expense, maintain and repair all portions of the Building, including all appurtenant improvements, service, loading and delivery Repairs and Maintenance: areas, sidewalks, ramps, any drive-through area and related improvements, and all improvement within the perimeter sidewalk (including curbs) around the Building (collectively, the "Building Area"), in good condition and repair and in a manner consistent with Tenant's other stores in San Diego, California. Alterations and Conditions: Tenant at its expense may make reasonable alterations of and additions to the Improvements or any part thereof subject to certain conditions. Insurance: Tenant at its expense shall maintain insurance. Tenant shall pay when due all bills for water, sewer rents, sewer charges, heat, gas and electricity and all other utilities and related services, and trash and refuse Utilities: removal, used in the Leased Premises from the Possession Date until expiration of the Term Tenant Assignment and Subletting: Tenant may assign or sublet the lease without Landlord consent. Tenant to remain liable.

8 | Matthews Retail Advisors ® carlsbad

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Walgreens, Oceanside CA | 9 oceanside boulevard

tenant overview10 | Matthews Retail Advisors tenant overview

Company Name Walgreens Boots Alliance

No. of Locations 8,300

No. of Employees 253,400

Headquartered Deerfield, IL

Website www.walgreens.com

Year Found 1909

Stock Symbol WBA

Market Cap 92.06B

walgreens

The nation’s #1 drugstore chain, Walgreens, operates close to 8,300 stores in all 50 US states, the District of Columbia, the Virgin Islands, and Puerto Rico. Prescription drugs are the focus as they account for close to two-thirds of sales with the rest coming from general merchandise, over-the-counter medications, cosmetics and groceries. Most locations offer drive-through pharmacies and one-hour photo processing, which separates them from competition. Recently, Walgreens fully acquired Alliance Boots, Europe’s leading drug wholesaler, to create Walgreens Boots Alliance.

WALGREENS HEALTH FOCUS Walgreens’ overall value proposition differentiates it from competitors in valuable ways. Reducing the shopping time by putting health at the forefront of all aspects of the business places Walgreens in a league of their own as competition aims their focus on things such as convenience, design, or low prices. Walgreens’ focus on health gives them a competitive advantage.

MARKETING STRATEGY Walgreens focuses on customer need and satisfaction. For example, curbside pick-up stemmed from the need of their customers who are busy working mothers who don’t have the time to go into the store, pick out what they need, and check out. Loyalty is a priority as it turns into return visits as well as more money spent by customers.

Walgreens, Oceanside CA | 11 parcel map the offering

Property Name Walgreens 4181 Oceanside Blvd Property Address Oceanside, CA 92056 Assessor’s Parcel Number 162-241-18-00 Zoning PD-1

Oceanside Blvd ± 31,792 Site Description Number of Stories One Year Built 2011 Gross Leasable Area (GLA) ± 14,319 SF Lot Size ± 1.19 Acres (51,836 SF) Leased Fee Type of Ownership (Improvements Owned by Walgreens) 40,116 ± Blvd College Lease Structure Absolute NNN Ground Lease Parking ±28 free Surface Spaces Parking Ratio1 ±2.00 : 1,000 SF

*Walgreens customers are permitted to park in the remainder of the shopping center spaces subject to the CC&Rs.

12 | Matthews Retail Advisors bird’s eye aerial

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Walgreens, Oceanside CA | 13 area overview

oceanside, california Oceanside, commonly known as San Diego’s North Shore, is a classic beach city that allows people to escape the hustle and bustle of city life. If the consistent 70-degree year-round weather wasn’t enough, Oceanside is central to LEGOLAND, SeaWorld, Disneyland and the San Diego Zoo, making the city a prime tourist destination. USA Today rated the city as the second most ideal climate in the United States, and the fifth most ideal in the world.

The beautiful weather makes Oceanside a great location for shooting films. Many may recognize the city from popular movies such as Top Gun, Almost Famous, Freaky Friday, Bring It On, Bruce Almighty and Anchorman. Additionally, every year Oceanside is home to several events that draw in even more people than usual. From live music to surf competitions, there is always a reason to visit Oceanside. oceanside demographics

POPULATION 3 Mile 5 Mile 10 Mile HOUSEHOLDS 3 Mile 5 Mile 10 Mile 2021 Projection 148,629 327,171 601,769 2021 Projection 49,922 112,042 205,228 2016 Estimate 141,558 309,863 564,007 2016 Estimate 47,425 106,071 192,436 2010 Census 134,034 290,338 518,634 Growth 2016 - 2021 5.26% 5.63% 6.65% 2000 Census 127,838 273,729 452,314 INCOME 3 Mile 5 Mile 10 Mile 2016 Est. Average Growth 2016 - 2021 4.99% 5.59% 6.70% $74,010 $77,433 $86,252 Household Income

14 | Matthews Retail Advisors Economic Development The mission of Oceanside’s Economic Development is to ensure the financial stability of the city by assisting users, developers, and brokers with business relocation, business expansion and improvements that create new employment opportunities and increase investment in the city and make Oceanside a regional visitor’s destination.

Historically, the top industries in Oceanside are manufacturing distribution, tourism and agriculture but recently the biotech industry has been among the area’s fastest growing business sectors. With an average of 266 sunny days per year, it’s no wonder Oceanside is a premier tourist destination. The array of outdoor recreational activities, great food and easy access to the beach brings in 34.4 million visitors each year to the San Diego metropolitan area.

Walgreens, Oceanside CA | 15 san diego county Oceanside is apart of the San Diego County which is a county located in the southwestern corner of the state of California, in the United States. With a population of 3,095,313 San Diego County is the second-most populous county in California and the fifth-most populous in the United States. Most of the county has a mild Mediterranean climate to semiarid climate, though there are mountains that receive frost and snow in the wintertime.

Tourism plays a large part in the economics of the San Diego metropolitan area. Tourists are drawn to the region for a well-rounded experience, everything from shopping to surfing as well as its mild climate. Its numerous tourist destinations include Horton Plaza, Westfield UTC, Seaport Village, Westfield Mission Valley and Fashion Valley Mall for shopping. SeaWorld San Diego and LEGOLAND California as amusement parks.

san diego demographics

POPULATION 3 Mile 5 Mile 10 Mile 2021 Projection 150,744 329,497 601,210 2016 Estimate 143,541 312,133 563,482

10 MILES 2010 Census 135,868 292,576 518,145 2000 Census 129,505 276,511 451,898 Growth 2016 - 2021 5.02% 5.56% 6.70%

HOUSEHOLDS 3 Mile 5 Mile 10 Mile 5 MILES 2021 Projection 50,717 113,090 205,021 3 MILES 2016 Estimate 48,169 107,058 192,240 2010 Census 45,419 100,421 177,873 2000 Census 43,562 94,761 155,503 Growth 2016 - 2021 5.29% 5.63% 6.65% Growth 2010 - 2016 6.06% 6.61% 8.08% INCOME 3 Mile 5 Mile 10 Mile 2016 Est. Average $73,862 $77,127 $86,268 Household Income

16 | Matthews Retail Advisors points of interest

QUALCOMM STADIUM BALBOA PARK SEAWORLD Qualcomm Stadium is a multi-purpose stadium, home Just minutes from Downtown San Diego, Balboa Park SeaWorld is a marine mammal park, oceanarium, and of the San Diego Chargers and the San Diego State is the nation’s largest urban cultural park. The 1,200- animal theme park, and hosts about 4 million visitors Aztecs football team. Located on the interchange acre park contains gardens, museums, theaters, per year. Seaworld is also renowned for conducting of Interstate 8 & 15, the stadium has a capacity of restaurants and recreational facilities, and sees over research on marine biology and providing education 70,560 and has hosted three super bowl games. 6 million visitors annually. and outreach on marine issues to the general public.

SEAPORT VILLAGE SAN DIEGO ZOO GASLAMP QUARTER The link between San Diego Bay and the city’s The San Diego zoo houses over 3,700 animals and The Gaslamp Quarter is a 16½ block historical downtown core, Seaport Village is a 14 acre waterfront more than 650 species. A pioneer in the concept neighborhood in Downtown San Diego, and is the shopping, dining and entertainment complex. Seaport of open-air, cage-less exhibits that re-create natural site of several entertainment and night life venues, Village includes more than 70 shops, galleries and animal habitats, the Zoo has the largest zoological as well as scheduled events and festivals. It includes eateries, and is in close proximity to local hotels, the membership association in the world, representing 94 historic buildings that are still in use with active airport and cruise ship terminal. more than a half-million people. tenants including restaurants, shops and nightclubs.

LEGOLAND HOTEL DEL CORONADO TORREY PINES GOLF COURSE Legoland California is a theme park, miniature park, Hotel del Coronado is a historic beach-front hotel Torrey Pines Golf Course is a 36-hole municipal public and aquarium located in Carlsbad, California, based in the city of Coronado, just across the San Diego golf course that sits on the coastal cliffs overlooking on the Lego toy brand. tt was the third Legoland park Bay. It is one of the few surviving examples of the the Pacific Ocean. The course has a unique method to open, and the first outside of Europe. Legoland is wooden Victorian beach resort. It is the second to ensure continued public access to the course, and home to more than 60 rides and sees over 1.4 million largest wooden structure in the US, and has hosted has hosted several championship tournaments. visitors per year. presidents, royalty, and celebrities through the years. Walgreens, Oceanside CA | 17 18 | Matthews Retail Advisors getting around San Diego International Airport Being only 3 miles from downtown San Diego, this airport is easily accessible. San Diego International Airport is ranked as the 4th best airport in North America. Within the airport, guests will find over 80 shops and restaurants to occupy their time before their flights. Many of the food vendors showcase San Diego’s craft beers and delicious seafood.

San Diego MTS The Metropolitan Transit System (MTS) offers quick transportation to locations all over San Diego such as Downtown San Diego, Fashion Valley and Mission Viejo. This is especially popular among college students as the MTS takes students from San Diego State University to Qualcomm Stadium where the SDSU Aztec football team plays.

AMTRAK AMTRAK offers rail services running out of three locations in San Diego; Old Town, Downtown San Diego, and Sorrento Valley. The popular Pacific Surfliner takes passengers up the coast of California from San Diego to Orange County, Los Angeles, Santa Barbra and San Luis Obispo.

Walgreens, Oceanside CA | 19 CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offering Memorandum contains select information pertaining to the business and affairs of Walgreens located at 4181 Oceanside Blvd, Oceanside, CA 92056-6035 (“Property”). It has been prepared by Matthews Retail Advisors. 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 Retail Advisors. 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 Retail Advisors 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 Retail Advisors 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 state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.

20 | Matthews Retail Advisors exclusively listed by CAITLIN ZIRPOLO ASSOCIATE SHOPPING CENTERS [email protected] DIR (949) 432-4518 MOB (760) 685-6873

el warner SVP & NATIONAL DIRECTOR SHOPPING CENTERS [email protected] DIR (310) 579-9690 MOB (858) 752-3078

kyle matthews CHAIRMAN AND CEO BROKER OF RECORD [email protected] DIR (310) 919-5757 MOB (310) 622-3161 LIC # 01469842

Walgreens ™ 4181 Oceanside Blvd | Oceanside, CA Walgreens, Oceanside CA | 21