OFFERING MEMORANDUM “A High Grossing Single Tenant Opportunity in ’s Capital” 2224 El Camino Ave, Sacramento, CA PRESENTED BY

Jereme Snyder El Warner Tom Lagos Executive Vice President Associate Vice President Executive Vice President dir +1 949 724 5552 dir +1 213 532 3267 dir +1 213 532 3299 [email protected] [email protected] [email protected]

2 | COLLIERS INTERNATIONAL TABLE OF CONTENTS

Executive Summary Tenant Overview Area Overview Offering Summary Lease Abstract Sacramento Overview 4 Investment Highlights 10 99¢ Only Store Overview 14 Demographics Financial Summary Yelp Reviews Top Employers in Sacramento Parcel Information Demographic Snapshot Parcel Map Sales Comparables Area Aerial

STARBUCKS OFFERING MEMORANDUM | 3 EXECUTIVE SUMMARY 4 | COLLIERS INTERNATIONAL Offering Summary Investment Highlights

Colliers International is pleased to offer the fee simple interest sale of a >> The 99 Cent Store Only is backed by a corporate lease with a substantial ±23,200 square foot, single tenant 99 Cent Only Store located in the El inflation hedge (9% rental increase with each new option). Camino Shopping Center in Sacramento, CA (“Property”). The Property is conveniently located alongside the signalized intersection of El Camino >> A stable investment with low risk, and an estimated occupancy cost of 3.5%. Avenue and Howe Avenue, and is minutes away from the Capital City >> Strong annual sales accompanied by the notoriety of an established national Freeway (80). credit tenant.

The 99 Cent Only Store offers investors a stable, dependable income stream >> Privilege of owning a piece of a privately owned and branded company with with minimal landlord obligations, and a strong brand backed by a highly over 350 Store Locations, over 12,000 Employees, and sees over $1.3 Billion profitable and successful corporate lease. The Property is an ideal 1031 in Revenue. exchange opportunity with a successful location and is free and clear of existing debt. >> The Property offers excellent parking with unobstructed visibility, convenient ingress and egress, and is surrounded by strong national retailers such as Rite Aid, ARCO, Nordstrom, Macy’s, and Sears. Additionally, the El Camino Shopping Center offers a synergistic mix of tenants within its ±66,000 square foot space, including: 99 Cent Only Store, >> Strong Demographics in the local area with over 125,422 residents within a Rite Aid and ARCO. El Camino Shopping Center is only 2 miles away from the 3 mile radius and an average household income of $55,242. regional mall, Arden Fair Mall, and sees over 48,700 cars per day. >> Free and clear of existing debt with an extremely low rent to sales ratio (3.5%).

>> Established tenant with approximately 5.5 years remaining on a NNN lease and has taken initiative to exercise a second renewal.

STARBUCKS99¢ ONLY OFFERING MEMORANDUM | 5 Financial Summary Property Information Subject Property Single Tenant- 99¢ Only Store Shopping Center Name El Camino Shopping Center Building Size 23,200 SF Land Size 74,923 Co-Tenant Rite Aid Traffic Count El Camino Avenue 22,212 CPD Howe Avenue 13,631 CPD

Value Summary Price $3,350,000 $/SF $144 Land $/SF $45 Cap Rate (Year 1) 6.5% NOI (Year 1)* $217,925 Building Size 23,200 Land Size 74,923 Year Built 1973 Year Renovated 2002 Lease Start August 5, 2002 Lease Term (Option 2 Exercised) January 31, 2020 Options 2-5 Year Lease Type NNN Annual Rental Amounts: Option 3 $236,875 Option 4 $255,825

*Based on exercised Option 2 rent beginning on 2/1/2015

6 | COLLIERS INTERNATIONAL Parcel Information

>> PROPERTY NAME >> APN >> PARKING 99¢ Only Store 278-0020-005-0000 120 free surface spaces are available >> PROPERTY ADDRESS >> ZONING 2224 El Camino Ave Lot Area

>> LOCATION >> Street Frontage Intersection of El Camino Ave and 153 feet on El Camino Ave Howe Ave (with 2 curb cuts)

Parcel Map

STARBUCKS99¢ ONLY OFFERING MEMORANDUM | 7 Area Aerial

*Not Actual Property

8 | COLLIERS INTERNATIONAL STARBUCKS99¢ ONLY OFFERING MEMORANDUM | 9 TENANT OVERVIEW 10 | COLLIERS INTERNATIONAL Lease Abstract

99¢ Only Store, Sacramento, CA

Lessee 99¢ Only Stores #0175 Land Size (SF) 74,923 Building Size (SF) 23,200 Rent Commencement Date August 5, 2002 Lease Expiration Date January 31, 2020 Lease Term (Base Lease) 138 Months Remaining Options 2 X 5 Years Contract Rental Rate Total $/Yr. Initial Lease Term (8/05/2002-1/31/2010) $189,500 Extension Rental Rate Option 1 (2/01/2010-1/31/2015) $198,975 Option 2 (2/1/2015-1/31/2020)* $217,925 Option 3 (2/1/2029-8/31/2034) $236,875 Option 4 (2/1/2034-8/31/2039) $255,825 Lessor Expenses Roof and Structure Lessee Expenses NNN Expense Cap 5% Annual % Rent Clause: None Source: Lease

*Option 2 exercised

STARBUCKS99¢ ONLY OFFERING MEMORANDUM | 11 “The Right Store... Now More Than Ever!”

9999¢ Cent Only Only Overview Overview

Starbucks99 Cents Only Corporation Stores, Inc.was operates founded asin a1971 retailer and begancloseout a coffee and revolutionregular general from merchandisea single store andin Seattle’s is a subsidiary Pikes Place of the Market. 99¢ Today,Only Stores. Starbucks With hasmore 300,000 than 330 employees stores, the serving company 71 million sells customers,name-brand in and 21,000 private-label stores across food and65 countries.beverages, health and beauty aids, household and seasonal goods, hardware, toys, andStarbucks more forremolded 99¢ or theless. coffee Nearly industry three-quarters and has ofset its a storesnew arestandard in California; with their other impenetrable stores are brandlocated and in strategicArizona, ,business andmodel. . With The annual company’s revenues Bargain over $15.5Wholesale billion unit dollars, distributes discountedStarbucks has merchandise continued toon retailers, an upward distributors, trajectory and and exporters. has increased its U.S. revenue by 4.2 billion dollars alone in 2014’s Q3.Founded in 1982, 99 Cents Only Stores was taken private by Ares Management, Canada Pension Plan Investment, and the Gold/SchifferStarbucks maintains family ain stable 2012. outlook through new product offerings, restaurant growth, and its brand strength. Starbucks *Not Actual Property

12 | COLLIERS INTERNATIONAL Now More Than Ever!”

Yelp Reviews

“It is a pretty good idea that they carry so much more than in “Believe it or not this is the best 99 cent store in Sacramento. the past. Not much more to add that others have posted already I used to live in the area and this is where I was able to do other than its very convenient to just come in and get about quite a bit of shopping they offer things you actually like here 90% of your shopping done at one location rather than going and guess what, for only a buck. I have never felt unsafe from store to store trying to get all or your list done, and where going to this location either. There is an Indian girl there who else can you get your groceries for a dollar some even 2 for a gives fantastic service to everyone including me it seems. dollar. I really have to say that this is one of my favorite stores.” I like when I walk into a store and employees are smiling. I would recommend going here before any grocery store. They Miguel O. have the same stuff as in Safeway or SaveMart and at a more reasonable price.” “I enjoy this place, especially since I’m on a tight budget. I buy Dave H. toilet paper for 99 cents. I even went to Wal Mart to see if I could save money and the cheapest pack of rolls they have were still more expensive than the pack of 4 I buy at the 99 cent store.”

Christine A. Source: Yelp

STARBUCKS99¢ ONLY OFFERING MEMORANDUM | 13 AREA OVERVIEW 14 | COLLIERS INTERNATIONAL Sacramento Overview

Sacramento is the capital city of California and the seat of Economy government of Sacramento County. It is at the confluence of the Sutter Health, Blue Diamond Growers, Aerojet, Teichert, and Sacramento River and the American River in the northern portion The McClatchy Company are among the companies based in of California’s expansive Central Valley. With an estimated 2011 Sacramento. According to the City’s 2012 Comprehensive Annual population of 477,892, it is the sixth-largest city in California and Financial Report, the top employers in Sacramento County are: the 35th largest city in the . Sacramento is the core State of California, Sacramento County, UC Davis Health System, cultural and economic center of the Sacramento metropolitan area Dignity Health/Catholic Healthcare West, Intel, Kaiser Permanente, which includes seven counties with an estimated 2009 population Sutter Health, Elk Grove Unified School District, Sacramento City of 2,527,123. Its metropolitan area is the fourth largest in California Unified School District, and San Juan Unified School District. after the Greater Area, San Francisco Bay Area, and the San Diego metropolitan area, as well as the 27th largest in the Sports & Recreation United States. Sacramento is home to one major league sports team — the Sacramento Kings of the National Basketball Association. The Kings California State University, Sacramento, more commonly known came to Sacramento from Kansas City in 1985. Sacramento boasts as Sacramento State or Sac State, is the largest university in the an extensive park system consisting of over 5,000 acres of parkland city and one of 23 campuses in the California State University and recreation centers. The city features a collection of smaller system. Drexel University Sacramento and the University of the parks in the Downtown districts, including Crocker Park, Pioneer Pacific McGeorge School of Law are in Sacramento. In addition, Landing and Southside Park. Popular parks outside the central core the University of California, Davis, is in nearby Davis, 15 miles west include American River Parkway which spans 23 miles along the of the capital. The UC Davis Medical Center, a world-renowned American River, and William Land Park. research hospital, is located in the city of Sacramento.

Population The 2010 United States Census reported that Sacramento had a population of 466,488. The population density was 4,660.0 people per square mile. There were 174,624 households, out of which 57,870 (33.1%) had children under the age of 18 living in them, 65,556 (37.5%) were heterosexual married couples living together. The average household size was 2.62. There were 103,730 families; the average family size was 3.37.

STARBUCKS99¢ ONLY OFFERING MEMORANDUM | 15 Higher Education The Sacramento area hosts a wide variety of higher educational opportunities. There are two major public universities, many private institutions, community colleges, vocational schools, and McGeorge School of Law. Sacramento is home to Sacramento State (California State University, Sacramento), founded as Sacramento State College in 1947. In 2004, enrollment was 22,555 undergraduates and 5,417 graduate students in the university’s eight colleges. The University of California has a campus, UC Davis, in nearby Davis and has a graduate center in downtown Sacramento. The UC Davis Graduate School of Management (GSM) is near the UC Davis Medical Center off of Stockton Boulevard near Highway 50. UC also maintains the University of California Sacramento Center (UCCS) for undergraduate and graduate studies.

16 | COLLIERS INTERNATIONAL Top Employers in Sacramento Demographic Snapshot

1 State of California 69,763 1 Mile 3 Miles 5 Miles 2 Sacramento County 11,450 Population 3 UC Davis Health System 7,725 2019 Projection 20,394 127,410 333,096 4 Dignity Health/Catholic Healthcare West 7,069 2014 Estimate 20,088 125,422 327,460 5 Intel 6,633 Growth 2014-2019 1.53% 1.59% 1,72% 6 Kaiser Permanente 6,360 2014 Est. Pop by Single Race Class 20,088 125,422 327,460 7 Sutter Health 5,765 White Alone 11,029 72,839 204,193 8 Elk Grove Unified School District 5,021 Black or African American Alone 2,585 14,340 32,987 9 Sacramento City Unified School District 5,000 Amer. Indian and Alaska Native Alone 323 1,664 4,090 10 San Juan Unified School District 4,700 11 City of Sacramento 4,083 Asian Alone 1,094 10,415 25,192 Native Hawaiian and Other Pac. Isl. Alone 167 1,247 2,650 Source: “City of Sacramento Comprehensive Annual Financial Report, Fiscal Year Ended June 30, 2012”. City of Sacramento. p. 226. Some Other Race Alone 3,398 16,442 35,982 Two or More Races 1,492 8,475 22,365

Household

2019 Projection 8,484 52,025 139,307

2014 Estimate 8,259 50,932 136,051

Growth 2014-2019 2.72% 2.15% 2.39%

2014 Est. Average Household Income $41,375 $55,242 $60,106

2014 Est. Median Household Income $30,801 $37,917 $42,736

STARBUCKS99¢ ONLY OFFERING MEMORANDUM | 17 Sales Comparables

Property Name Property City Sale Date Sale Price Net Income Actual Cap Rate Square Feet Price Per SF Buyer Seller Jeffrey S & Barbara Riley Development 1 Reedley, CA May-14 $1,692,000 $110,000 6.50% 10,890 $155.37 A Teather III LLC Phillips R P & M Arnold Retail Partners 2 Martinez, CA Nov-13 $2,850,000 NA 5.61% 10,000 $285.00 Trust LLC Care Investments Daytom Enterprises 3 Fresno, CA Apr-13 $1,620,000 NA 6.79% 8,320 $194.71 LLC Inc. Blackstone Property 2002 Mahesh 4 Family Dollar Fresno, CA Jul-13 $1,491,500 $105,000 7.04% 7,546 $197.65 LLC Khatwani Trust Sheehan Family 5 Family Dollar Visalia, CA Oct-12 $1,660,000 $115,000 7.25% 22,400 $74.11 FD Partners LLC Living Trust Ramon Canyon 6 Dollar General Sacramento, CA Oct-13 $2,867,000 NA 6.25% 9,100 $315.05 Evergreen Devco Inc Associates Sac-MM Properties 7 Dollar Tree Sacramento, CA Apr-13 $2,350,000 $162,439 6.91% 12,928 $181.78 1895 Howe LLC LLC 8 99 Cent Only Store Sanger, CA Jun-12 $1,500,000 NA NA 18,900 $79.37 Tidal Basin I Inc. 99 Cent Only Stores 9 Family Dollar Fresno, CA Feb-14 $2,365,000 NA NA 9,342 $253.16 Cole FD Portfolio Boos Fund 1 Fresno Evergreen-Kola & Live 10 Dollar General Live Oak, CA Feb-14 $4,795,500 NA 6.25% 20,707 $231.59 Rilco-Edwards LLC Oak LLC Evergreen-Naranjo & 11 Dollar General Woodlake, CA Oct-13 $3,139,000 NA 6.25% 12,480 $251.52 Sunland State Corp Pepper LLC 12 Dollar General Modesto, CA Sep-13 $3,110,000 NA 6.25% 12,382 $251.17 Belle Haven DG LLC DG-Modesto CA-1 LLC

18 | COLLIERS INTERNATIONAL

This Offering Memorandum contains select information By acknowledging your receipt of this Offering Memorandum If you wish not to pursue negotiations leading to the pertaining to the business and affairs of the Property at the from Colliers International, you agree: acquisition of the of 2224 El Camino Ave, Sacramento CA 2224 El Camino Ave, Sacramento CA 95801. It has been 95801 or in the future you discontinue such negotiations, then prepared by Colliers International. This Offering Memorandum 1) The Offering Memorandum and its contents are you agree to purge all materials relating to this Property may not be all-inclusive or contain all of the information a confidential; including this Offering Memorandum. prospective purchaser may desire. The information contained 2) You will hold it and treat it in the strictest of confidence; in this Offering Memorandum is confidential and furnished A prospective purchaser’s sole and exclusive rights with solely for the purpose of a review by a prospective purchaser 3) All photographs and graphic elements are property of respect to this prospective transaction, the Property, or of the Property. It is not to be used for any other purpose or Colliers International and use without express written information provided herein or in connection with the sale of made available to any other person without the written permission is prohibited; and the Property shall be limited to those expressly provided in an consent of Owner and Colliers International. The material is executed Purchase Agreement and shall be subject to the 4) You will not, directly or indirectly, disclose or permit terms thereof. In no event shall a prospective purchaser have based in part upon information supplied by the Owner and in anyone else to disclose this Offering Memorandum or its part upon financial information obtained by Colliers any other claims against Owner or Colliers International or contents in any fashion or manner detrimental to the interest any of their affiliates or any of their respective officers, International from sources it deems reliable. Neither Owner, of the Owner. nor their officers, employees, or agents make any Directors, shareholders, owners, employees, or agents for any representation or warranty, express or implied, as to the Owner and Colliers International expressly reserve the right, damages, liability, or causes of relating to this accuracy or completeness or this Offering Memorandum or at their sole discretion, to reject any and all expressions of solicitation process or the marketing or sale of the Property. any of its contents and no legal liability is assumed or shall be interest or offers to purchase the Property and to terminate This Offering Memorandum shall not be deemed to represent implied with respect thereto. Prospective purchasers should discussions with any person or entity reviewing this Offering the state of affairs of the Property or constitute an indication make their own projections and form their own conclusions Memorandum or making an offer to purchase the Property that there has been no change in the state of affairs of the without reliance upon the material contained herein and unless and until a written agreement for the purchase and Property since the date this Offering Memorandum. conduct their own due diligence. sale of the Property has been fully executed and delivered.

This Offering Memorandum contains select information By acknowledging your receipt of this Offering Memorandum If you wish not to pursue negotiations leading to the pertaining to the business and affairs of the Property at the from Colliers International, you agree: acquisition of the of 15010 Imperial Hwy Los Angeles, CA 15010 Imperial Hwy Los Angeles, CA 90638. It has been 90638 or in the future you discontinue such negotiations, prepared by Colliers International. This Offering Memorandum 1) The Offering Memorandum and its contents are then you agree to purge all materials relating to this Property may not be all-inclusive or contain all of the information a confidential; including this Offering Memorandum. prospective purchaser may desire. The information contained 2) You will hold it and treat it in the strictest of confidence; in this Offering Memorandum is confidential and furnished A prospective purchaser’s sole and exclusive rights with solely for the purpose of a review by a prospective purchaser 3) All photographs and graphic elements are property of respect to this prospective transaction, the Property, or of the Property. It is not to be used for any other purpose or Colliers International and use without express written information provided herein or in connection with the sale of made available to any other person without the written permission is prohibited; and the Property shall be limited to those expressly provided in an consent of Owner and Colliers International. The material is executed Purchase Agreement and shall be subject to the 4) You will not, directly or indirectly, disclose or permit terms thereof. In no event shall a prospective purchaser have based in part upon information supplied by the Owner and in anyone else to disclose this Offering Memorandum or its part upon financial information obtained by Colliers any other claims against Owner or Colliers International or contents in any fashion or manner detrimental to the interest any of their affiliates or any of their respective officers, International from sources it deems reliable. Neither Owner, of the Owner. nor their officers, employees, or agents make any Directors, shareholders, owners, employees, or agents for any representation or warranty, express or implied, as to the Owner and Colliers International expressly reserve the right, damages, liability, or causes of action relating to this accuracy or completeness or this Offering Memorandum or at their sole discretion, to reject any and all expressions of solicitation process or the marketing or sale of the Property. any of its contents and no legal liability is assumed or shall be interest or offers to purchase the Property and to terminate This Offering Memorandum shall not be deemed to represent implied with respect thereto. Prospective purchasers should discussions with any person or entity reviewing this Offering the state of affairs of the Property or constitute an indication make their own projections and form their own conclusions Memorandum or making an offer to purchase the Property that there has been no change in the state of affairs of the without reliance upon the material contained herein and unless and until a written agreement for the purchase and Property since the date this Offering Memorandum. conduct their own due diligence. sale of the Property has been fully executed and delivered.

20 | COLLIERS INTERNATIONAL PRESENTED BY

Jereme Snyder El Warner Tom Lagos, ccim Executive Vice President Associate Vice President Executive Vice President dir +1 949 724 5552 dir +1 213 532 3267 dir +1 213 532 3299 [email protected] [email protected] [email protected]

99¢ ONLY OFFERING MEMORANDUM | 21 PRESENTED BY

Jereme Snyder El Warner Tom Lagos, ccim Executive Vice President Associate Vice President Executive Vice President dir +1 949 724 5552 dir +1 213 532 3267 dir +1 213 532 3299 [email protected] [email protected] [email protected]