SUPERVALU DISTRIBUTION CENTER

1990 PICCOLI ROAD | STOCKTON, CA

INVESTMENT GRADE OFFERING | 20-YEAR 100% ABSOLUTE NET LEASE | SUPERVALU GUARANTY HIGH QUALITY INDUSTRIAL BUILDING TOTALING 986,509 SF FEATURING DESIRABLE COLD STORAGE IMPROVEMENTS STRATEGIC CENTRAL VALLEY LOCATION

A CBRE NATIONAL PARTNERS INDUSTRIAL INVESTMENT OPPORTUNITY INTRODUCTION OFFERING SUMMARY CBRE, Inc., as exclusive advisor to Ownership, is pleased to present the unique opportunity to acquire the fee simple interest in the Supervalu • 20-Year Absolute Net Lease to Leading Grocery Distribution Center located at 1900 Piccoli Road, Stockton, CA (the Wholesaler “Property”). The property is 100% absolute net leased through May 2038 to • SUPERVALU INC. Guaranty: S&P: “B+” / Moody's: Unified Grocers, Inc. (the “Tenant”) with SUPERVALU INC. (B+ / B1 / NYSE: "B1" / NYSE: “SVU” “SVU”) providing a full corporate guaranty. SUPERVALU INC. (“Supervalu” • Attractive Escalation Structure with No Landlord or the “Guarantor”) is one of the largest food wholesalers in the United States Responsibilities (Absolute Net Lease) and generated $14 billion in annual revenue in FY 2018, with 78% derived • Desirable Cold Storage Improvements from wholesale distribution. SUPERVALU ranked #158 on the Fortune 500 • Strong Central Valley Market Dynamics with Steady list in 2017. The offering presents the exceptional opportunity to acquire a rare Absorption and Low Vacancy of 4.7% cold storage facility in California’s Central Valley with a long-term absolute • 0% Vacancy Rate for Cold Storage Product in Stockton net lease to a leading grocery wholesaler. A transaction level investment • 9 Miles from the Port of Stockton, California’s Largest grade credit rating of “A-” has been obtained for the offering from a Port (By Acreage) Nationally Recognized Statistical Rating Organization (NSRO).

1 SUPERVALU DISTRIBUTION CENTER THE OFFERING PROPERTY OVERVIEW

Address 1990 PICCOLI ROAD, STOCKTON, CA The Stockton Supervalu Distribution Center is 100% absolute net-leased with Square Footage 986,509 SF Cold Storage SF / % ±84,051 SF / 8.5% Freezer nearly 20 years of remaining term. The lease features a current annual net rent of ±77,825 SF / 7.9% Cooler $5.43 million. The high-quality distribution campus totals 986,509 SF and offers ±21,736 SF / 2.2% Cool Dock ±183,612 SF / 18.6% Total 30’ clearance, Stockton Terminal & Eastern (S.T. & E.) rail access, generous Acreage ±51.76 Acres loading & truck court depth, and efficient drive-around access. The building Coverage 44% includes 183,612 SF of cold storage improvements, which are highly desirable in Occupancy 100% # of Buildings 1 the Central Valley given the production of food in this market and large Northern Year Built 1974/renovated 2007 California population. Clear Height ±30’ Dock High Doors 177 Drive-In Doors 7

EXECUTIVE SUMMARY 2 100% LEASED TO NATIONALLY RECOGNIZED, COMMITTED TENANT EXCELLENT MARKET DYNAMICS • The property is 100% absolute NNN leased for 20 years with rent increases throughout • Extremely strong industrial market demand with continued rent growth. the term to Unified Grocers, Inc. which is guaranteed by SUPERVALU INC. • Tenant demand remains strong in the Central Valley with 3.1 MSF net • SUPERVALU INC. is recognized as the largest public grocery wholesaler in the U.S., absorption during the first half of 2018, 3.8 MSF in 2017 and 3.9 MSF in 2016. operating primarily in the U.S. with 28 distribution centers serving over 3,000 retailers. The biggest limitation for absorption has been available supply. This has The company also operates 197 retail stores under five retail grocery banners. driven 44% of all new product since 2015 to be partially or fully pre-leased • With $12.5 billion in fiscal 2017 revenue, SUPERVALU ranks #158 on the Fortune 500 prior to construction completion. list. The company has grown revenue to $14.1 billion in FY 2018, an increase of nearly • California has the second lowest per capita supply of cold storage product 30% over FY 2017, and anticipates FY 2019 sales to increase roughly 9%-11%. compared to the rest of the U.S., translating into high demand for this product • SUPERVALU has exhibited stable margins, with gross profit in the 10%-14% range and in both Northern and Southern California. adjusted EBITDA in the 3%-4% range. • The company has entered into a multi-year contract with Instacart, an e-commerce, There is currently zero vacant cold storage product in Stockton and the same-day grocery delivery company through four of its retail banners; Cub Foods; lack of new, quality freezer/cooler buildings in the market will help to drive Shop ‘n Save; Farm Fresh and Shoppers Food & Pharmacy. a pricing premium. UNFI ACQUISITION • On July 26, 2018, SUPERVALU entered into a definitive agreement to be acquired for $2.9 billion by United Natural Foods, Inc. (“UNFI”), a leading distributor of natural, organic and specialty foods as well as non-food products in the U.S. and Canada. • UNFI’s largest customer, Whole Foods, accounts for approximately 33% of its revenue and UNFI has a long-term contract with Whole Foods that matures in 2025.

HIGH QUALITY BUILDING FEATURES INCLUDING COLD STORAGE • The high quality industrial building totals 986,509 SF and offers 30’ clear heights, 177 dock high doors and 7 drive-in doors. • The site is approximately 52 acres with highly desirable, concrete truck courts and can accommodate parking for 131 cars and 320 trailers with an attractive 44% coverage ratio. • The property features ±84K SF of Freezer and ±78K SF of Cooler, which appeals to a variety of food users. These improvements command higher rents. • Easy truck access with two entrances along Piccoli Rd. & Wilcox Rd. and drive- around capability. • The property is rail served, with 7 rail doors and a S. T. & E. rail spur along the south edge of 1900 Piccoli Road.

The opportunity is offered at a price significantly below replacement cost, estimated at approximately $123 PSF.

3 SUPERVALU DISTRIBUTION CENTER NEXT BIG TREND: E-COMMERCE PENETRATION IN GROCERY SALES

CBRE RESEARCH FORECASTS THAT THE U.S. INDUSTRIAL COLD STORAGE BASE WILL NEED TO GROW BY 19.4% BY 2024 TO ACCOMMODATE THE PREDICTED RISE IN ONLINE GROCERY SALES. CALIFORNIA IN PARTICULAR IS SEVERELY UNDERSUPPLIED IN COLD STORAGE PRODUCT (PER CAPITA), AND THE STOCKTON MARKET CURRENTLY HAS ZERO VACANCY IN COLD STORAGE PRODUCT. THE SUPERVALU DISTRIBUTION CENTER’S DESIRABLE COLD STORAGE IMPROVEMENTS PRESENT AN EXCELLENT INVESTMENT POISED FOR STRONG FUTURE RENT GROWTH.

AS DEMAND FOR ONLINE DELIVERY OF COLD AND FROZEN FOODS GROWS, SO WILL THE NEED FOR LAST MILE, COLD STORAGE FACILITIES.

$1 BILLION 1.25 MSF 600 MSF 175 MSF E-COMMERCE SALES DISTRIBUTION SPACE STANDARD DC SPACE FOOD/GROCERY SPACE

TOTAL REQUIREMENT OF 175 MSF OF ADDITIONAL TOTAL REQUIREMENT OVER THE NEXT DECADE DC SPACE – MUCH WILL BE FREEZER/COOLER

KEY DRIVERS - Food is the largest single retail category – $2 trillion market (with 20% of each Cold storage does not face the same competition paycheck going to food) and cycles as seen in the warehouse distribution - Grocery represents nearly 40% of all food sales – $700 billion market. People need to eat and it has been proven that - 20% e-commerce penetration in grocery sales – $140 billion consumption increases during recessionary periods.

EXECUTIVE SUMMARY 4 REGIONAL MAP

Boyes Hot 12 84 Green Valley Fairfield Galt Springs Walnut Grove Petaluma 116 12 220 113 Thornton 29 12 Dogtown 121 Eagle Tree 5 American Clements Skaggs Island 80 12 99 Canyon Isleton Lockeford Rio Vista Woodbridge Birds Landing Lodi Victor 101 San Pablo Bay National 37 Wildlife Refuge 12 12 Novato Vallejo Grizzly Island Wildlife Area 160 88 680 780 Collinsville 1 San Pablo Bay Suisun Bay SUPERVALU DISTRIBUTION CENTER5 Benicia Morada Pittsburg Martinez 4 Bethel Island Linden Woodacre 80 4 Antioch Lincoln Oakley Village San Rafael Concord STOCKTON San Pablo Arbor PORT OF Mt Tamalpais Watershed Pleasant Hill 101 Orwood STOCKTON BNSF INTERMODAL YARD 580 Brentwood Corte Madera 680 STOCKTON 1 El Cerrito Mill Valley Walnut Creek Discovery Bay 4 METROPOLITAN Mt Diablo 4 131 24 AIRPORT Berkeley Byron 99 Sausalito OAKLAND Danville Lathrop 13 Atlanta 80 Tassajara Manteca PORT OF 580 Mountain San Ramon 120 SAN FRANCISCO OAKLAND House 5 Alameda 205 1 680 Banta Altamont Tracy Ripon 280 San Leandro 99 OAKLAND Lyoth INTERNATIONAL 580 Dublin Ulmar Salida 580 Carbona Daly City AIRPORT 880 101 Livermore Hayward Pleasanton 580 280 5 STRATEGIC DISTRIBUTION LOCATION 132 San Bruno Verona Vernails Pacifica • The Supervalu84 Distribution Center offers immediate access to State Route 99 which 82 Mendenhall 92 238 Sunol connects to SR-4, the “CrosstownSprings Freeway,” and I-5. 33 San Mateo • Both680 the Union Pacific and Burlington Northern Santa Fe have new “state-of-the-art” Fremont Westley Bair Island 84 intermodal yards within 4-6 miles of the property. 1 880 5 280 • The property is ±9 miles from the Port of Stockton and ±77 miles from the Port of Oakland. 92 Half 101 • The site is also near three airports: Oakland and Sacramento International Airports,Patterson Moon Bay and Stockton Metropolitan Airport (just 8 miles away). 35 Palo Alto • TheMilpitas Central Valley provides easy access to the Bay Area and Western U.S. 237 Diablo Grande Crows Mountain population880 centers. Landing View • Some of680 the quality tenants in this submarket include Staples, Trader Joes, FedEx, 82 84 280 Bed,SAN BathJOSE & Beyond, and Quaker Oats. San Gregorio La Honda • The280 Supervalu Distribution Center is only ±87 miles from San Francisco. 35 Campbell Loma Mar 5 5 SUPERVALU DISTRIBUTION CENTER LOCAL MAP

N EL DORADO ST OAKMOORE GOLF COURSE

NEWBY RD

D WILCOX RD GRIMES LN R

I E. WATERLOO RD H NC 99 BIA WILCOX RD W MARCH LN CHEROKEE RD E. WATERLOO RD PICCOLI RD N WILSON WAY PICCOLI RD

OAK PARK BUDWEISER CT BROOKSIDE RD SANGUINETTI LN

N EL DORADO ST N CALIFORNIA ST WILCOX RD AUGUST PACIFIC 99

GOLDEN STATE HWY N BROADWAY AVE

N PERSHING AVE SUPERVALU DISTRIBUTION CENTER PACIFIC AVE WATERLOO RD WATERLOO RD SUPERVALU DISTRIBUTION CENTER

N FILBERT ST

W ALPINE AVE 26

E HARDING WAYN AIRPORT WAY

E FREMONT ST

W HARDING WAY N CENTER ST COUNTRY CLUB BLVD N LINCOLN ST GARDEN ACRES

N BAKER ST

N CALIFORNIA ST PARK STREET E FREMONT ST E OAK ST 99 VICTORY PARK S FILBERT ST PARK STREET

5 STOCKTON W FREMONT ST E WEBER AVE E MAIN ST

4 SAN JOAQUIN RIVER

4 S WILSON WAY PORT OF STOCKTON CALIFORNIA ST T S AIRPORT WAY S S CENTER ST ON NGT S ASHI G W W O LD EN EL DORADO ST G A T W WASHINGTON ST E Y MARIPOSA RD A W V F E S E CHARTER WAY U STOCKTON H T F 5 RD LO METROPOLITAN AIRPORT N . O J T T NG OR MI FAR 99 SEAPORT EXECUTIVE SUMMARY 6 AERIAL

STOCKTON UP METROPOLITAN AIRPORT INTERMODAL BNSF INTERMODAL

PORT OF STOCKTON

WILCOX RD PICCOLI RD

WATERLOO RD WILCOX RD WILCOX

7 SUPERVALU DISTRIBUTION CENTER 8 LEGEND

GRADE LEVEL DOORS RAIL DOORS DOCK HIGH DOORS OFFICE SPACE

20 UTILITY EASEMENT EASEMENT UTILITY UTILITY 20 20 EXECUTIVE SUMMARY EXECUTIVE

84 ROADWAY EASEMENT

WILCOX ROAD WILCOX 314.1ʼ

= I RAMP I =- I-=

I=- 428.9ʼ 130.7 130.7 I =

1-STORYBLDG __

S T & E RAIL RAIL E E & & T T S S 2080 WILCOX ROAD WILCOX 2080

WILCOX ROAD

53 DOCK HIGH DOORS DOORS HIGH HIGH DOCK DOCK 53 53 RAMP

214.9ʼ

PICCOLI ROAD PICCOLI

10 DOCK HIGH DOORSDOORS HIGH HIGH DOCK DOCK 10 10

12 DOCK HIGH DOORS DOORS HIGH HIGH DOCK DOCK 12 12 32 DOCK HIGH DOORS DOORS HIGH HIGH DOCK DOCK 32 32

0 OFFICE

1,179.9ʼ

539.8ʼ

479.8ʼ 1990 PICCOLI ROAD PICCOLI 1990

0

74 DOCK HIGH DOORS

367.5 367.5

RAMP RAMP RAMP RAMP

0

276.8 276.8

FIRE PONDS FIRE

PUMP HOUSE PUMP

1-STORY

MAINTENANCEBLDG

FIRE PONDS FIRE PUMP HOUSE PUMP

STOCKTON DRIVERTING CANAL SITE PLANSITE SUPERVALU DISTRIBUTION CENTER

1990 PICCOLI ROAD | STOCKTON, CA

TEAM LEADS LOCAL MARKET EXPERT NATIONAL PARTNERS WEST Barbara Perrier Guy Ponticiello Tom Davis CBRE | Vice Chairman CBRE | Managing Director CBRE | Senior Vice President DARLA LONGO Lic. 00969169 +1 312 861 7814 Lic. 00880761 BARBARA PERRIER +1 213 613 3033 [email protected] +1 209 476 2940 BRETT HARTZELL [email protected] [email protected] REBECCA PERLMUTTER FINKEL ERIC COX Rebecca Perlmutter Finkel, CFA Maury Vanden Eykel GINA CHRISTEN CBRE | Senior Vice President CBRE | Senior Director DEBT & STRUCTURED FINANCE Lic. 01838624 +1 312 297 7634 Val Achtemeier +1 310 922 5237 [email protected] CBRE | Debt & Structured Finance [email protected] Executive Vice President Lic. 01868169 Darla Longo +1 213 613 3109 CBRE | Vice Chairman/Managing Director [email protected] Lic. 00639911 +1 909 418 2105 [email protected]

GLOBAL INDUSTRIAL & LOGISTICS NORTHEAST SOUTHEAST SOUTH CENTRAL NORTH CENTRAL WEST DEBT & STRUCTURED FINANCE Jack Fraker Michael D. Hines Chris Riley Randy Baird Mike Caprile Darla Longo Val Achtemeier Brian Fiumara Frank Fallon Jonathan Bryan Ryan Bain Barbara Perrier Scott Lewis Brad Ruppel Trey Barry Ryan Thornton Zach Graham Rebecca Perlmutter Finkel Steve Roth Lauren Dawicki Jennifer Klingler Heather McClain Brett Hartzell Steve Kundert Eric Cox Gina Christen WWW.CBRE.COM/NP

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© 2018 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.