STOCKTON, CALIFORNIA NORTHERN CALIFORNIA REGIONAL MALL INVESTMENT OPPORTUNITY AERIAL FACING NORTHWEST PARK WEST PLACE 117,000 CARS PER DAY W 8 MILE ROAD W 8 MILE ROAD THORNTON RD SHERWOOD MANOR PACIFIC TOWN CENTER N LOWER SACRAMENTO RD LINCOLN SHOPPING CENTER PACIFIC AVENUE PACIFIC STONE CREEK VILLAGE ROBINHOOD PLAZA 14,000 CARS PER DAY ROBINHOOD DRIVE PACIFIC AVENUE SHERWOOD EXECUTIVE CENTER SAN JOAQUIN (NAP) DELTA COLLEGE 38,000 CARS PER DAY YOKUTS AVENUE 2 - HFF AERIAL FACING NORTHWEST THE OFFERING NOTABLE TENANTS HFF, as Exclusive Advisor, is pleased to present the outstanding opportunity to acquire the 100% fee simple interest in Sherwood Mall (the “Property”), representing the highest quality retail asset in Stockton, California. The (NAP) Property’s frontage spans an entire block and is centrally located within the main retail corridor of Stockton, providing outstanding signage and visibility to over 24 Million customers per year, on average. Anchored by Macy’s (NAP), Dick’s Sporting Goods, Home Goods, Best Buy, ULTA, and Petco, Sherwood Mall benefits from stable in-place cash flow backed by strong credit-worthy tenancy, representing 71% of the base rental revenue. Sherwood Mall is available for the first time since being developed in 1978 by the same Ownership, representing a generational opportunity to acquire an infill regional mall in Northern California with strong cash flow and significant upside. PROPERTY SUMMARY SUMMARY TOTAL GLA OWNED GLA Property Name Sherwood Mall Land Area 36.36 Acres 24.87 Acres Address 5308 Pacific Avenue, Stockton, CA 95207 Parking Count 2,187 Stalls 1,246 Stalls Year Built/Renovated 1978 / 1988 / 2006 Parking Ratio 4.2 : 1,000 3.6 : 1,000 LEASEABLE AREA TOTAL GLA OWNED GLA OCCUPANCY TOTAL GLA OWNED GLA SALES PSF / HEALTH RATIO Anchor 260,117 96,081 Anchor 100% 100% Anchor Do Not Report Junior Anchor 91,236 91,236 Junior Anchor 66% 66% Junior Anchor $193 / 8.9% Outparcel 28,679 19,314 Outparcel 94% 91% Outparcel $333 / 7.8% In-Line 138,340 138,340 In-Line 89% 89% In-Line $399 / 10.1% TOTAL 518,372 344,971 TOTAL 91% 86% 3 - HFF INVESTMENT HIGHLIGHTS INSTITUTIONAL QUALITY ASSET/HIGH QUALITY TENANCY PROMINENT RETAIL LOCATION/EXPANSIVE TRADE AREA Sherwood Mall is comprised of an impressive mix of nationally recognized Sherwood Mall is centrally located in the primary retail hub of Stockton, surrounded tenants including: Macy’s (NAP), Dicks Sporting Goods, HomeGoods, ULTA, by several anchor tenants including Ross, REI, JC Penney, Old Navy, and Dillard’s Best Buy, Bath & Body Works, and Petco among others. The Property was built providing an extended draw to the site. The Property is located at the corner of Pacific to institutional quality standards and has been meticulously maintained over Avenue and W Robinhood Drive benefiting from more than 1,200 feet of frontage with the years, providing outstanding curb appeal and a superior image to the exceptional site and tenant visibility to more than 52,000 cars day passing daily. surrounding retail. » Sherwood Mall is positioned directly across from San Joaquin Delta College with » 65% of the Property GLA and 71% of the base rental revenue is derived from over 18,000 students and is less than 1 mile away from University of the Pacific credit/national retailers with 6,600 students, both of which drive daytime population to the site. » Dick’s Sporting Goods recently signed a new 10-year lease in September 2014 » Sherwood Mall serves an expansive and dense trade area of over 283,000 people providing significant leasing momentum to the Property creating additional with an average household income of approximately $60,000 within a 5-mile mile drawing power to the site from both customers and retailers alike. radius. HIGHLY STABLE IN-PLACE CASH FLOW STRONG IN-LINE TENANCY Sherwood Mall is currently 91% leased with an existing LOI in negotiations to Sherwood Mall has demonstrated its ability to draw and retain an impressive roster of bring occupancy to 95%. The Property provides predictable and stable cash flow national in-line tenants that have generated average sales of $405/SF, highlighted by with 71% of base rental revenue generated from national/credit tenants. Less Victoria’s Secret, T-Mobile, and Sprint PCS, which each produce over $2.25 million in than one third of the GLA rolls over the next three years (largely comprised sales. The credit tenancy and strong sales productivity at Sherwood Mall has resulted of temporary tenants), requiring minimal capital expenditures and providing in driving robust customer and tenant demand over the years including recently strong near-term cash flow. securing Dick’s Sporting Goods, which has leased over 50,000 square feet of space through 2024. PROMINENT TENANTS TENANT (NAP) MARKET CAP ($ BILLION)* $21.58B $6.81B Private $9.66B $14.25B $46.84B SQUARE FEET 164,036 50,369 24,129 11 , 115 45,712 25,000 % OF OWNED GLA N/A 14.6% 7.0% 3.2% 13.3% 7.2% LEASE EXPIRATION N/A Jan-2025 Jan-2016 Jul-2020 Feb-2019 Oct-2020 4 - HFF 117,000 CARS PER DAY W 8 MILE ROAD W 8 MILE ROAD THORNTON RD SHERWOOD MANOR PACIFIC TOWN CENTER N LOWER SACRAMENTO RD EL DORADO STREET LINCOLN SHOPPING CENTER PACIFIC AVENUE PACIFIC STONE CREEK VILLAGE ROBINHOOD PLAZA 13,909 CARS PER DAY ROBINHOOD DRIVE PACIFIC AVENUE SHERWOOD EXECUTIVE CENTER SAN JOAQUIN DELTA COLLEGE 18,610 STUDENTS (NAP) DISCOUNT TO REPLACEMENT COST FREE AND CLEAR INVESTMENT OFFERING Rising construction costs, limited land supply in the immediate trade area, and CARS37,952 PER DAY Sherwood Mall is available “free and clear” of existing financing, presenting an restrictive development regulations pose high barriers to entry that will continue investor with the opportunity YOKUTSto capitalize AVENUE on historically low interest rates and to limit new retail supply, and will result in continued rental growth for existing favorable market financing terms. inventory in the near and long-term. This limited downside risk allows the landlord to compete effectively in the long-term leasing market. 5 - HFF SIGNIFICANT VALUE-ENHANCEMENT OPPORTUNITIES Currently 91% leased, Sherwood Mall offers an investor a number of near and long-term upside elements that will substantially enhance the market share, retailer sales, net operating income and value of the Property. » RE-ACTIVATE THE SECOND FLOOR Currently decommissioned and under-utilized, the second floor comprised of 75,392 square feet located above Best Buy and Petco (formerly Montgomery Ward box) could be repositioned and activated towards the rentable square footage of the Property, providing an opportunity to lease an additional anchor along the prime frontage of Sherwood Mall. » REDISTRIBUTE THE STORAGE GLA Storage space behind Petco and ULTA is currently being counted towards the rentable square footage of the Property. This 7,161 square feet could be redistributed towards the rentable square footage of one of the pad sites, creating highly desirable square footage along the frontage of Sherwood Mall and capitalizing on GLA that is not generating income currently. » LEASE-UP OPPORTUNITY Currently 91% leased, Sherwood Mall offers an investor significant upside opportunity through lease-up of existing vacant Junior Anchor space and inline interior space totaling 48,354 square feet. Additionally, temporary tenants could be converted to permanent tenants, providing further stability to the cash flow. » REPOSITION INTERIOR FOOD COURT Recent lease expirations and consolidation of food court tenancies provides for the opportunity to reposition the food court to create a more vibrant experience for nearby college students and visitors to the Property. » SPIN OFF SEPARATELY PARCELED BUILDINGS Due to the unique parcelization of the Property, the opportunity exists for the next owner to sell-off pads and big box portions of the Property separately, allowing the new owner to benefit from historically low cap rates for single tenant NNN properties and reduce the overall basis in the Property. » ENHANCE TENANT MIX » CONVERT FULL SERVICE LEASES TO NNN » MISCELLANEOUS REVENUE Sherwood Mall offers investors the ability to As leases roll to market for tenants that are Several opportunities exist to increase the enhance the tenant mix at the Property through the currently not paying reimbursements, an investor miscellaneous revenue at the Property, including lease-up of currently vacant space, replacement has the opportunity to enhance reimbursement advertising and kiosk revenue. and upgrade of existing tenants with near-term revenue by converting leases to triple net. rollover, and the addition of anchor tenants where less desirable inline space currently exists. 6 - HFF SITE PLAN / VALUATION-CREATION OPPORTUNITIES LEASE-UP OPPORTUNITY JUNIOR ANCHOR 31,000 SF SPIN OFF SEPERATELY PARCELED PAD SITES NEW LEASE WITH DICK’S CREATES MOMENTUM AND DRAW FOR OTHER RETAILERS REPOSITION INTERIOR MALL GLA WITH JUNIOR ANCHOR TENANT(S) RE-ACTIVATE DECOMMISSIONED SECOND FLOOR GLA RE-DISTRIBUTE STORAGE GLA TOWARDS RENTABLE SQUARE FOOTAGE ON PAD SITES NAP SPIN OFF SEPERATELY PARCELED PAD SITES 7 - HFF 99 AUBURN COVERDALE 99 50 MIDDLETOWN ROSEVILLE PLACERVILLE 505 50 GEYSERVILLE CITRUS HEIGHTS WOODLAND COTTONWOOD FOLSOM 50 99 CALISTOGA SACRAMENTO` DAVIS 50 WINTERS ST HELENA 505 99 STOCKTON, CALIFORNIA SANTA ROSA DIXON ELK GROVE INVESTMENT ADVISORS NAPA NICHOLAS BICARDO FAIRFIELD Managing Director PETALUMA [email protected] dir 415.276.6923 99 CA Lic. # 01380524 NOVATO LODI VALLEJO DANNY REDDIN Associate Director [email protected] ANTIOCH dir 415.276.6089 CONCORD STOCKTON CA Lic. # 01946495 WALNUT CREEK BRENTWOOD BRANDON ROGOFF BERKELEY` Senior Real Estate Analyst 99 [email protected] PACIFIC OCEAN OAKLAND dir 415.276.6939 CA Lic. # 01949914 SAN FRANCISCO TRACY SAN LIVERMORE FRANCISCO HAYWARD CAPITAL MARKETS ADVISOR BAY PLEASANTON MODESTO BRUCE GANONG Senior Managing Director SAN MATEO [email protected] 99 dir 415.276.6940 CA Lic. # 01332792 PALO ALTO ©2014 HFF (Holliday Fenoglio Fowler, L.P.) and HFFS (HFF Securities L.P.) are owned by HFF, Inc.