Confidential Offering Memorandum 2040 Glenoaks Blvd. SAN FERNANDO, CALIFORNIA 91340 Executive Summary The Offering Investment Highlight Property Description • NNN , Fee Simple Investment - Freestanding Retail Building in Prime Market JLL analyzed the freestanding retail • Corporate Guaranteed Walgreens Co. Lease (NYSE: WAG) - S&P Rated BBB building of the 38,609 square foot • Approximately 10% Compounded Base Rental Increases Every 10 Years For Duration of 75 Year Term property at 2040 Glenoaks Boulevard, • S&P Rated BBB - Moody’s Rated Baa1 - Revenues over $72.22B strategically located at the intersection • America’s Largest Drugstore Chain - Over 8,541 Locations - 700 Wellness Centers of Glenoaks Boulevard and Hubbard • Corporate Guaranteed Smart N Final Lease - B2 Positive Rating (Moody’s) Street in the heart of San Fernando • 15 Year Original Term - 10% Compounded Rental Increase in Year 10 - 10% Compounded Increases (). Every 5 Years Thereafter 2 • Over 7,000 Employees and 250 Locations - Dominant Southern California Grocer • Walgreens: New 75 Year Corporate Lease with Attractive Rental Increases The retail property is 100% occupied by JLL • Smart N Final: New 15 Year Corporate Lease with 4-5 Year Options and Rental Increases Smart N Final and Walgreens - both of

• To Be Renovated Building and Common Areas - Pride of Ownership which have recently signed new, long 2040 GLENOAKS BL V D. SAN FERNANDO, CA • Positioned Within To Be Renovated Big Box Retail Building at Hard Corner term corporate leases. • Complimentary Uses - Proven Tenancy - Excellent Center Traffic Property Photos

Property Description

3 JLL Ex ecuti v e S ummary

GLENOAKS BLVD

HUBBARD ST Property Overview Property Summary

Property Summary

2040 Glenoaks Blvd. ADDRESS San Fernando, CA 91340

PRICE $22,500,000

CAP RATE 4.7%

NOI $1,045,733

PSF $583

4 GLA 38,609 SF

JLL LOT SIZE 3.03 Acres

2517-015-028, 2517-015-031, 2040 GLENOAKS BL V D. SAN FERNANDO, CA PARCEL NUMBER 2517-015-036, 2517-015-039, 2517-015-041 HUBBARD ST GLENOAKS BLVD

ZONING C2

YEAR BUILT 1973/ R2014

OWNERSHIP Fee Simple

OCCUPANCY 100%

ANNUAL INCREASE 10% increase in 9/1/2024 Site Plan

5 JLL P roperty Ov er v iew Tenant Overview Lease Summary WALGREENS SMART & FINAL

ESTIMATED RENT ESTIMATED RENT Sep. 1, 2014 Sep. 1, 2014 COMMENCEMENT COMMENCEMENT

LEASE EXPIRATION Oct. 1, 2089 LEASE EXPIRATION Oct. 1, 2029

LEASE TERM 75 Years LEASE TERM 15 Years

TERM REMAINING TERM REMAINING 70 Years* 10 Years ON LEASE ON LEASE

SCHEDULED RENT $584,460 SCHEDULED RENT $461,273

10% Compounded Increases RENTAL INCREASES RENTAL INCREASES 10% in Year 10 6 Every 10 Years

JLL 4 - 5 Year Options with 10% Rental OPTION PERIODS None OPTION PERIODS Increases Each Option

2040 GLENOAKS BL V D. SAN FERNANDO, CA ROOF AND STRUCTURE Tenant Responsible ROOF AND STRUCTURE Landlord Responsible

GROSS LEASABLE AREA 14,864 SF GROSS LEASABLE AREA 23,745 SF

LEASE TYPE NNN LEASE TYPE NNN

FIRST RIGHT OF REFUSAL No FIRST RIGHT OF REFUSAL No

*Right of termination begins as of the last day of the two-hundred fortieth (240) full calendar month and every five (5) years thereafter. *10% compounded rental increases apply only to base rent schedule and parcel purchase additional rent (excludes improvement rent) About the Tenant

Smart & Final caters to caterers -- as well as small businesses, restaurants, and households in the western US. Its 235 non-membership warehouse stores offer hot and cold beverages, candies, condiments, creamers, sweeteners, accessories, bulk products, cooking equipment and supplies, frozen foods, grocery items, vegetables and fruits, and packaging and disposable products; and fresh meat, seafood, beef, poultry, and pork products. It serves households; and foodservice markets, including operators of small restaurants, catering companies, businesses, clubs, and civic organizations. The stores operate under the Smart & Final, Smart & Final Extra!, and Cash & Carry banners in urban and suburban areas in Arizona, California, Idaho, Nevada, Oregon, and Washington, as well as northern Mexico. The chain was acquired by private equity firm Ares Management for about $975 million in late 2012. 7 JLL

Walgreens is America’s leading provider of the most convenient access to consumer goods T enant Ov er v iew and services, and pharmacy, health and wellness services. Walgreens stores provide patients with all of heir prescription needs in one place without sacrificing the safety, service or convenience of their nearby neighborhood drugstore. In order to maintain success through the changing economy, Walgreens has taken significant measures to become a more efficient and customer-focused company. It is currently conducting a company-wide initiative to align costs, culture and capabilities to the realities of the current economic environment. The company’s focus in the pharmacy is on filling prescriptions more efficiently. Walgreens is implementing out a new initiative to transform the practice of community pharmacy. Walgreens remains one of the fastest growing retailers in the country, with over 8,541 locations and 700 Wellness Centers. Financial Overview Rent Roll COMMENCE- CURRENT ANNUAL RENT RENTAL ADJUSTED ANNUAL TENANT LEASE TYPE GLA LEASE EXPIRATION OPTION PERIODS MENT DATE RENT PSF ADJUSTENT DATE RENT

Smart N Final NNN 23,745 9/1/2014 to 10/1/2029 $461,273 $19.43 9/1/2024 $507,400 4 - 5 YR Options 10/30/14 and 1 - 58 Month Final Option Period Option 1: $558,258 Option 2: $613,847 Option 3: $675,350 Option 4: $742,767

Walgreens NNN 14,864 9/1/2014 to 10/1/2089 $584,460 $39.32 9/1/2024 Approximately None 10/30/14 10% Compounded 8 Every 10 Years* JLL

2040 GLENOAKS BL V D. SAN FERNANDO, CA *Rent Start assumes rent commencement date between September 1, 2014 - October 30, 2014 *10% compounded rental increases apply only to base rent schedule and parcel purchase additional rent of $8,500 / month (excludes improvement rent) Cash Flow SUBJECT PROPERTY Smart & Final / Walgreens YEAR 1 OPERATING DATA (DCF) PRICE $22,500,000 NET OPERATING INCOME $1,045,733 $/SF $583

PROPERY SIZE 38,609 SF NOI $1,045,733 OCCUPANCY 100% CAP RATE 4.7%

TENANT INFO SMART & FINAL 23,745 SF WALGREENS 14,864 SF

9 TENANTS 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 JLL Walgreens $584,460 $584,460 $584,460 $584,460 $584,460 $584,460 $584,460 $584,460 $584,460 $584,460 $642,906 Smart and Final $461,273 $461,273 $461,273 $461,273 $461,273 $461,273 $461,273 $461,273 $461,273 $461,273 $507,400 F inancial Ov er v iew TOTAL $1,045,733 $1,045,733 $1,045,733 $1,045,733 $1,045,733 $1,045,733 $1,045,733 $1,045,733 $1,045,733 $1,045,733 $1,150,306 Location Overview Regional Map The property is located at the Southeast corner of Glenoaks Boulevard and Hubbard Street in the City of San Fernando, which is a north LA County city that offers tenants excellent demographic density, household income and historical population growth. The immediate trade area is mostly comprised of groceryanchored retail, single family residential, and multi-family residential units. The area 10 boasts an average household income of

JLL $63,428 within a 3 mile radius and holds approximately 185,245 residents within

2040 GLENOAKS BL V D. SAN FERNANDO, CA 2040 GLENOAKS BLVD. a 3 mile radius. Tenants at the Glenoaks / Hubbard intersection include Food 4 Less, CVS, Big Lots, Citibank and Burger King. The city of San Fernando lies in the heart of the of Los Angeles - home to 1.8 million people and what is characterized as a landlocked, 260 square mile area. San Fernando is wrapped by 4 separate freeway systems: the 5, 405, 210 and 118, providing excellent access for transportation. Retail Map

210

HUBBARD ST

GLENOAKS BLVD

5 11 JLL L ocation Ov er v iew

TRUMAN ST

118

405 Location Overview “ City of San Fernando

In 1874, San Fernando became the valley’s first organized The city was named for the nearby Mission Fernando has tried to annex their city limits community, thus earning the title “First City of the Valley. San Fernando Rey de España (which in turn to Sylmar, Mission Hills and Pacoima, but the was named after St. Ferdinand), and was city of Los Angeles has kept up their rapid part of the Mexican land grant of Rancho annexation and caused many failed attempts; As you enter the City of San Fernando sense of privacy; yet it is only minutes from Ex-Mission San Fernando. In 1874 Charles and by the 1950’s, the city said that annexation along picturesque, palm-lined Brand downtown Los Angeles and only minutes Maclay, San Fernando founder, bought was hard to do, due to the large beaucracy of Boulevard, you discover a community rich away from other centers of commercial 56,000 acres (227 km2) of the Rancho. Los Angeles. Even as the San Fernando Valley in California history dating back almost two activity, thanks to a network of freeways In 1882, cousins George K. Porter and transformed itself from an agricultural area to centuries. Named in honor of a Spanish and nearby airports. The City combines Benjamin F. Porter of future Porter Ranch a suburban one in the decades after World War Saint/King, San Fernando was selected modern metropolitan conveniences with each received one-third of the total land. In II, San Fernando retained its independence. “for settlement long before the rest of Los a close-knit community of friendly, civic- 1885, Maclay founded the Maclay School of As with much of the San Fernando Valley Angeles. The City grew out of the ranching minded residents. Theology, a Methodist seminary in his newly east of the San Diego Freeway, the city of San founded town of San Fernando. After his activities surrounding Mission de San Moreover, San Fernando proudly offers Fernando has seen a significant demographic 12 death it became an affiliate and moved to Fernando Rey, whose graceful porticoes responsive city services, good access to city shift in recent years. Declining birth-rates

JLL the campus of the University of Southern still stand today. By the early 1800’s the government, a large labor pool, a lower and an aging population of middle-class

California and then the Claremont School of settlement had blossomed into a small business tax than Los Angeles, and no Caucasians, who once dominated the area in Theology. trading center where farm crop, olives, utility tax. A warm sunny climate and plenty the 1950s, has contributed to the movement 2040 GLENOAKS BL V D. SAN FERNANDO, CA wine, and thousands of livestock raised by of recreational activities add to the City’s While most of the towns in the surrounding into other parts of the San Fernando Valley. the resident Indians were bought and sold. drawing power. The weather is downright San Fernando Valley agreed to annexation There has also been movement into the Santa The City of San Fernando is a community of Mediterranean, with average rainfall of by Los Angeles in the 1910s, eager to tap Clarita and Antelope Valleys to the north. attractive contrasts. What was once a land 12” – 17” and 44% humidity. Average the bountiful water supply provided by Latinos became the majority population (the of farms and ranches adjoining the Mission temperatures range from highs of 85 the newly opened Los Angeles Aqueduct, largest percentage in the de San Fernando Rey is now a vibrant degrees in summer to lows of 47 degrees in San Fernando’s abundant groundwater area at 90 percent as of 2015). Since late 2004, center of manufacturing and commerce. winter. San Fernando has a rich history and supplies allowed it to remain a separate the city has been going through a series of San Fernando enjoys a sweeping view of flavor with a population of 24,564. city. In the first half of the 20th century planning development projects, that can be the panoramic San Gabriel foothills and a after incorporation in 1911, the city of San defined as gentrification. Demographics

2040 GLENOAKS BLVD.

1-MILE 3-MILE 5-MILE

POPULATION Projected Population (2019) 43,859 192,801 392,632 1-MILE 13

Projected Annual Growth 2014-2019 4.00% 4.08% 4.08% JLL 3-MILE HOUSEHOLDS

Projected Households (2019) 10,654 46,035 98,739 5-MILE L ocation Ov er v iew Projected Annual Growth 2014-2019 3.68% 3.72% 3.59%

INCOME Avg. Household Income (2014) $59,295 $63,428 $68,028 Median Household Income (2014) $49,900 $53,078 $54,560

DAYTIME DEMOS Total # of Businesses (2014) 1,347 5,144 9,798 Total # of Employees (2014) 14,966 58,791 94,719 Employee Pop. per Business 11 11 10 Residential Pop. per Business 31 36 38 CONFIDENTIALITY AND DISCLAIMER

This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. JLL has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, JLL has not verified, and will not verify, any of the information contained herein, nor has JLL conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

NON-ENDORSEMENT NOTICE

JLL is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of JLL, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of JLL, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR JLL AGENT FOR MORE DETAILS.

MOON LIM Senior Vice President 213.308.2056 cell 213.239.6013 office [email protected] 2040 Glenaosks Blvd. License CA 01903050 San Fernando, CA 91340