$ 13,387,885 / 5.75% Cap  Strong Tenant Roster - Primarily National Tenants  Affluent Southern California Location  Outparcels to Promenade Temecula  Generational Real Estate Investment Opportunity  Value-Add Opportunity (Inquire with broker for more info)

40620 & 40788 WINCHESTER RD | TEMECULA, CALIFORNIA

PAUL BONANNO ERIK SJOLUND KEVIN SPILSBURY (760) 452-2402 (760) 304-9196 (760) 452-2404 [email protected] [email protected] [email protected]

216 N. Coast Highway 101 Encinitas, CA 92024 SEARCH OUR CURRENT INVENTORY @ www.NNNsearch.com OFFERING OVERVIEW

OFFERING OVERVIEW

Net Lease Realty Partners is excited to present the rare opportunity to acquire the fee simple interest in two Multi-Tenant Retail properties, located in the Promenade Temecula, an irreplaceable regional retail power center/mall in Southern California. The properties are well situated on large 1.28 AC & 1.05 AC parcels, respectfully. The properties were constructed in 2000 and both boast major frontage on Winchester Road, a busy thoroughfare with heavy traffic (approx. 73,300+ ADT).

40620 Winchester is currently occupied by Destination XL, Mattress Firm which are national brand creditworthy retailers, and Massage Green Spa, a regional spa and wellness franchise.

40788 Winchester is currently occupied by Men’s Wearhouse (Tailored Brands) and Qdoba Mexican Eats, also both national brand creditworthy retailers. Qdoba is not currently operating at this location and is a “Dark” store. Per the lease Qdoba has agreed to pay rent through June 30th, 2022 – giving a new owner an opportunity to improve the tenant roster while still receiving rent for the space.

This offering of properties is rare and highly sought after by tenants and investors alike due to the tremendous growth of population and income in the immediate area. These generational Real Estate assets would make a fine addition to the portfolio of a family, trust or institutional investor.

INVESTMENT HIGHLIGHTS

Southern California Demographics – The property is located in Temecula Valley, a bedroom community of San Diego and Riverside in Southern California. The immediate region has over 185,000 people within a 5-mile PRICE: $ 13,387,885 radius of the site, and a strong average household income of $104,434/yr. Outparcels to Promenade Temecula - The subject properties sit as outparcels to the Promenade Temecula – an approximately 1.2 MM SF NOI: $ 769,803 / Year regional retail center in Southern California.

Cap Rate: 5.75% Winchester Road Frontage – Both properties have major frontage on Winchester Rd (73,300+ ADT) – a busy retail thoroughfare which connects to interstate-15 (180,000+ ADT). PROPERTY OVERVIEW

SITE ADDRESS: 40620 Winchester Rd, Temecula, CA 92591

PRICE: $ 8,536,783 $/SF: $ 551/SF NOI: $ 490,865 Cap Rate: 5.75 %

Gross Leasable Area (GLA): +/- 15,490 SF Lot Size: 1.28 AC (55,757 SF) Year Built: 2000 Ownership Type: Fee Simple Tenants: DXL, Massage Green Spa, Mattress Firm

SITE ADDRESS: 40788 Winchester Rd, Temecula, CA 92591

PRICE: $ 4,851,102 $/SF: $ 513/SF NOI: $ 278,938 Cap Rate: 5.75 %

Gross Leasable Area (GLA): +/- 9,450 SF Lot Size: 1.05 AC (45,738 SF) Year Built: 2000 Ownership Type: Fee Simple Tenants: Men’s Wearhouse, Qdoba (Dark) LOAN SCENARIO

Principal Amount : $8,700,000 (65% LTV) Term: 10-year Fixed Interest Rate: 3.70% Term: 10-year Interest Only Estimate Mo Payment: $26,774/Month Payment Recourse: Non-Recourse

For financing options and loan quotes Please contact: PROPERTY FINANCIALS

Property: 40620 Winchester Road, Temecula CA

Rentable Sq Ft 15,490 Sales Price: $8,536,783 $551 Cap Rate 5.75% Budget Estimated 2019 2020 INCOME Total Base Rents $505,680 $510,180 Expense Reimbursement Revenue $177,544 $193,496

Effective Gross Revenue $683,224 $703,676

EXPENSES: Taxes ($81,954) ($95,039) Insurance ($8,870) ($9,136) CAM ($71,720) ($73,872) Property Manager ($15,000) ($15,450) Total Reimbursable Expenses ($177,544) ($193,496) Non-Reimbursable Expense ($14,815) ($15,259)

Net Operating Income $490,865 $494,921

RENT ASSUMPTIONS DXL Mens Apparel 11/30/2024 $175,680 $175,680 Massage Green 1/31/2024 $150,000 $154,500 Mattress Firm 9/30/2023 $180,000 $180,000

Total Rent $505,680 $510,180 PROPERTY FINANCIALS

Property: 40620 Winchester Road, Temecula CA 10 Year Cash Flow Estimate Rentable Sq Ft 15,490 Sales Price: $8,536,783 $551 Cap Rate 5.75% Annualized Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 INCOME Total Base Rents $505,680 $510,180 $514,815 $519,589 $524,506 $533,171 $545,573 $558,276 $571,286 $584,612 $598,262 Expense Reimbursement Revenue $177,544 $193,496 $199,301 $205,280 $211,438 $217,782 $224,315 $231,044 $237,976 $245,115 $252,468

Effective Gross Revenue $683,224 $703,676 $714,116 $724,869 $735,945 $750,953 $769,888 $789,320 $809,262 $829,727 $850,730

Operating Expenses ($192,359) ($208,756) ($215,018) ($221,469) ($228,113) ($234,956) ($242,005) ($249,265) ($256,743) ($264,445) ($272,379)

Net Operating Income $490,865 $494,921 $499,098 $503,400 $507,832 $515,996 $527,884 $540,055 $552,519 $565,282 $578,351

RENT ASSUMPTIONS DXL Mens Apparel 11/30/2024 $175,680 $175,680 $175,680 $175,680 $175,680 $175,680 $179,194 $182,777 $186,433 $190,162 $193,965 Massage Green 1/31/2024 $150,000 $154,500 $159,135 $163,909 $168,826 $173,891 $179,108 $184,481 $190,016 $195,716 $201,587 Mattress Firm 9/23/2023 $180,000 $180,000 $180,000 $180,000 $180,000 $183,600 $187,272 $191,017 $194,838 $198,735 $202,709

Total Rent $505,680 $510,180 $514,815 $519,589 $524,506 $533,171 $545,573 $558,276 $571,286 $584,612 $598,262

Rent Bumps Yr 5 - 2% Annually for DLX 2025 and Mattress Firm 2024

EXPENSE ASSUMPTIONS

Operating Expenses increases by 3% annually in 2021 Property Tax Rate 1.118 based on new assessed value $78.5M in 2020 Vacancy Assumption $.20/sq ft PROPERTY FINANCIALS

Property: 40788 Winchester Road, Temecula CA

Rentable Space: 9,450 Sales Price: $4,851,102 $513 SqFt Cap Rate 5.75% Budget Estimated 2019 2020 INCOME Base Rent $287,976 $287,976 Expense Reimbursement Revenue $124,974 $135,329

Effective Gross Revenue $412,950 $423,305

EXPENSES: Taxes ($48,343) ($56,400) Insurance ($7,107) ($7,320) CAM ($58,023) ($59,764) Property Manager ($11,500) ($11,845) Total Reimbursable Expenses ($124,974) ($135,329) Non-Reimbursable Expense ($9,038) ($9,309)

Net Operating Income $278,938 $278,667

RENT ASSUMPTIONS Men's Wearhouse 2/28/2021 $184,476 $184,476 Qdoba 6/30/2022 $103,500 $103,500 Total Rent $287,976 $287,976 PROPERTY FINANCIALS

Property: 40788 Winchester Road, Temecula CA 10 Year Cash Flow Estimate Rentable Space: 9,450 Sales Price: $4,851,102 $513 SqFt Cap Rate 5.75% Budget Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 INCOME Base Rent $287,976 $287,976 $287,976 $287,976 $287,976 $293,736 $299,610 $305,602 $311,714 $317,949 $324,308 Expense Reimbursement Revenue $124,974 $135,329 $139,389 $143,571 $147,878 $152,314 $156,884 $161,590 $166,438 $171,431 $176,574

Effective Gross Revenue $412,950 $423,305 $427,365 $431,547 $435,854 $446,050 $456,494 $467,193 $478,152 $489,380 $500,882

Operating Expenses ($134,012) ($144,638) ($148,977) ($153,447) ($158,050) ($162,792) ($167,675) ($172,706) ($177,887) ($183,223) ($188,720)

Net Operating Income $278,938 $278,667 $278,388 $278,100 $277,804 $283,258 $288,818 $294,487 $300,265 $306,156 $312,161

RENT ASSUMPTIONS Men's Wearhouse 2/28/2021 $184,476 $184,476 $184,476 $184,476 $184,476 $188,166 $191,929 $195,767 $199,683 $203,676 $207,750 Qdoba 6/30/2022 $103,500 $103,500 $103,500 $103,500 $103,500 $105,570 $107,681 $109,835 $112,032 $114,272 $116,558 Total Rent $287,976 $287,976 $287,976 $287,976 $287,976 $293,736 $299,610 $305,602 $311,714 $317,949 $324,308

Rent Bumps Yr 5 - 2% Annually

EXPENSE ASSUMPTIONS

Operating Expenses increases by 3% annually in 2021 Property Tax Rate 1.175 based on new assessed value $4.8M in 2020 Vacancy Assumption $.20/sq ft RENT ROLL

Temecula Place & Plaza Temecula 40620 & 40788 Winchester Rd, Temecula, CA 92591

% of Current Current Current % of Rental Monthly NNN Size Total Monthly Monthly Base Annual Total Lease Lease Increase Base Monthly Recovery Suite # Tenant (SF) (SF) Rent Rent/SF Base Rent (Rent) Start Expires Term Remain Date Rent/SF Base Rent Type Lease Options

40620 - A DXL Mens Apparel 5,490 22% 14,640$ 2.67 175,680 22.14% 9/5/14 11/30/24 10.2 5.2 NNN Two (5-Year) Options

7/18/2019 $2.58 12,875 7/18/2020 $2.65 13,261 40620 - B Massage Green 5,000 20% 12,500$ 2.50 150,000 18.90% 7/18/18 1/31/24 5.5 4.4 7/18/2021 $2.73 13,659 NNN Two (5-Year) Options 7/18/2022 $2.81 14,069 7/19/2023 $2.90 14,491 7/18/2024 $2.99 14,926

40620 - C Mattress Firm 5,000 20% 15,000$ 3.00 180,000 22.68% 4/1/05 9/30/23 18.5 4.0 NNN One (5-Year Option)

40788 - A & B The Mens Warehouse 6,450 26% 15,373$ 2.38 184,476 23.24% 3/1/11 2/28/21 10.0 1.4 NNN One (5-Year Option)

40788 - C Qdoba 3,000 12% 8,625$ 2.88 103,500 13.04% 7/1/12 6/30/22 10.0 2.8 NNN Two (5-Year Option)

Occupied Space 24,940 100% 66,138 $2.65 793,656 100.00% Vacant Space Total 24,940 100% 66,138 $2.65 793,656 100.00% PROPERTY PHOTOS

Lease: 9/5/14 – 11/30/24 Two (5-Year) Options TENANT OVERVIEW 40620 WINCHESTER RD.

Destination XL Group, Inc. (DXLG) is a specialty retailer of men's big and tall apparel, with operations throughout the United States, Canada and London, England. The company is headquartered in Canton, Massachusetts, and its common stock is listed on the NASDAQ Global Market under the symbol "DXLG." DXLG operates both retail stores and ecommerce businesses through its five trade names: DXL, Rochester Clothing, Casual Male XL, Shoes XL, and Living XL.

DXL Mens Apparel Tenant Estimated Operating Informataion Sq Ft 5490 Current Monthly Rent $14,640 Gross Scheduled Rent $ 175,680 Current Monthly Rent/Sq Ft $2.67 Plus Recapture $ 62,926 Current Annual Base Rent $175,680 Total Gross Scheduled Income $ 238,606 Less Expenses $ (62,926) Lease Start 9/5/2014 Cash Flow $ 175,680 Lease Expires 11/30/2024 Term: 10.2 Term Remaining: 5.2 Lease Options Two (5-Year) Options

Tenant Estimated Operating Expenses

Taxes 29,053 Insurance 3,140 CAM 25,419 Management 5,314 62,926 PROPERTY PHOTOS

Lease: 7/18/18 – 1/31/24 Two (5-Year) Options TENANT OVERVIEW 40620 WINCHESTER RD.

Massage Green Spa is an American Spa franchise with several locations throughout Southern California. Massage Green Spa offers customers a unique, tranquil experience with boutique massage and beauty services. The chain is known for an “infrared Sauna” which uses the sun’s light spectrum to penetrate human tissue to produce a host of health benefits.

Massage Green Spa Tenant Estimated Operating Informataion Sq Ft 5000 Current Monthly Rent $12,500 Gross Scheduled Rent $150,000 Current Monthly Rent/Sq Ft $2.50 Plus Recapture $ 57,309 Current Annual Base Rent $150,000 Total Gross Scheduled Income $ 207,309 Less Expenses $ (57,309) Lease Start 7/18/2018 Cash Flow $ 150,000 Lease Expires 1/31/2024 Term: 5.5 Term Remaining: 4.4 Lease Options Two (5-Year) Options

Tenant Estimated Operating Expenses

Taxes 26,459 Insurance 2,860 CAM 23,150 Management 4,840 57,309 PROPERTY PHOTOS

Lease: 4/1/05 – 9/30/23 One (5-Year) Option TENANT OVERVIEW 40620 WINCHESTER RD.

Mattress Firm Inc. is an American mattress store chain founded by Harry Roberts, Paul Stork, and Steve Fendrich on July 4, 1986. The headquarters of the company is located in Houston, Texas.

As of 2016, the company operated over 3,600 locations in 48 U.S. states. On October 5, 2018, Mattress Firm filed for Chapter 11 bankruptcy. In November 2018, Mattress Firm emerged from Chapter 11 bankruptcy and in 2019, Mattress Firm appointed John Eck as CEO. Currently the company operates over 2,600 locations throughout the US.

Mattress Firm Tenant Estimated Operating Informataion Sq Ft 5000 Current Monthly Rent $15,000 Gross Scheduled Rent $180,000 Current Monthly Rent/Sq Ft $3.00 Plus Recapture $ 57,309 Current Annual Base Rent $180,000 Total Gross Scheduled Income $ 237,309 Less Expenses $ (57,309) Lease Start 4/1/2005 Cash Flow $ 180,000 Lease Expires 9/30/2023 Term: 18.5 Term Remaining: 4 Lease Options One (5-Year) Options

Tenant Estimated Operating Expenses

Taxes 26,459 Insurance 2,860 CAM 23,150 Management 4,840 57,309 PROPERTY PHOTOS

Lease: 3/1/11 – 2/28/21 One (5-Year) Option TENANT OVERVIEW 40788 WINCHESTER RD.

Tailored Brands, Inc. is a U.S.-based, retail holding company for various men's apparel stores, including the Men's Wearhouse and Joseph A. Bank brands. The company is headquartered in Houston, Texas, with additional corporate offices in Fremont, California. It is publicly traded on the New York Stock Exchange under the ticker symbol, TLRD. Tailored Brands, Inc. was created in January 2016 when Men's Wearhouse transitioned to a holding company model and changed its symbol from MW to TLRD.

Founded in 1973, by George Zimmer as a retail men's clothing store, the business had grown to 100 stores when it held an IPO in 1992 raising $13M. Zimmer turned Men's Wearhouse into an industry consolidator, acquiring numerous competitors throughout his tenure leading the firm. Today, as Tailored Brands, the company operates Men's Wearhouse, Men's Wearhouse & Tux, K&G Superstores (an off-price retail chain), Moores Clothing for Men (a Canadian chain of men's clothing stores), Twin Hill Corporate clothing, and Jos A. Bank. In 1997, it purchased, then liquidated, the bankrupt Kuppenheimer chain. Today Tailored Brands operates over 1,600+ locations throughout the US and Canada.

Men's Wearhouse Tenant Estimated Operating Informataion Sq Ft 6450 Current Monthly Rent $15,373 Gross Scheduled Rent $184,476 Current Monthly Rent/Sq Ft $2.38 Plus Recapture $ 85,299 Current Annual Base Rent $184,476 Total Gross Scheduled Income $ 269,775 Less Expenses $ (85,299) Lease Start 3/1/2011 Cash Flow $ 184,476 Lease Expires 2/28/2021 Term: 10 Term Remaining: 1.4 Lease Options One (5-Year) Options

Tenant Estimated Operating Expenses

Taxes 32,989 Insurance 4,838 CAM 39,603 Management 7,869 85,299 PROPERTY PHOTOS

(Dark Store) Previously Subleased to Neo’s Tea House

Current Lease: 7/1/12 – 6/30/22 Two (5-Year) Option TENANT OVERVIEW 40788 WINCHESTER RD.

Qdoba Mexican Eats is a chain of fast casual restaurants in the United States and Canada serving Mexican-style cuisine. The company operated as a wholly owned subsidiary of Jack in the Box after its purchase from ACI Capital, Western Growth Capital, and other private investors in 2003.

In December 2017, a consortium of funds led by Apollo Global Management announced the purchase of the Qdoba chain for approximately $305 million. At the time of the announcement, Qdoba had approximately 700 restaurants in 47 states.

QDOBA Tenant Estimated Operating Informataion Sq Ft 3000 Current Monthly Rent $8,625 Gross Scheduled Rent $103,500 Current Monthly Rent/Sq Ft $2.88 Plus Recapture $ 39,674 Current Annual Base Rent $103,500 Total Gross Scheduled Income $ 143,174 Less Expenses $ (39,674) Lease Start 7/1/2012 Cash Flow $ 103,500 Lease Expires 6/30/2022 Term: 10 Term Remaining: 2.8 Lease Options Two (5-Year) Options

Tenant Estimated Operating Expenses

Taxes 15,344 Insurance 2,250 CAM 18,420 Management 3,660 39,674 LOCAL DEMOGRAPHICS: 1-Mile | 3-Mile | 5-Mile Population: 10,273 86,866 185,724 AHHI: $97,765 $99,936 $104,434

Interstate-15: 180,000+ ADT Winchester Rd: 73,300+ ADT Ynez Rd: 33,800+ ADT

40620 Winchester Road

±1-Mile

40788 Winchester Road PROMENADE TEMECULA SITE PLAN REGION MAP

40620 & 40788 Winchester Road CITY INFORMATION

Temecula is a city in southwestern Riverside County, California. The city is a tourist and resort destination, with destinations such as the Temecula Valley Wine Country, Old Town Temecula, the Temecula Valley Polo Club, the Temecula Valley Balloon & Wine Festival, the Temecula Valley International Film Festival, championship golf courses, and resort accommodations for tourists which contribute to the city's economic profile.

The City of Temecula, forming the southwestern anchor of the Inland Empire region - is approximately 58 miles north of downtown San Diego and 85 miles southeast of downtown Los Angeles. Temecula is bordered by the city of Murrieta to the north and the Pechanga Indian Reservation and San Diego County to the south. Temecula had a population of an estimated 114,742 people as of July 1, 2018.

The 1990s brought rapid growth to the Temecula Valley. Many families began to move to the area from San Diego, Los Angeles, and Orange County, drawn by the affordable housing prices and the popular wine country. On October 27, 1999, the Promenade Mall opened in Temecula. In 2005, Temecula expanded by annexing the neighboring master-planned community of Redhawk, bringing the population to 90,000. CITY ATTRACTIONS & EVENTS CLICK ANY PICTURE BELOW FOR ADDITIONAL INFORMATION AREA DEMOGRAPHICS AREA DEMOGRAPHICS AREA DEMOGRAPHICS