OFFERING MEMORANDUM MATTRESS FIRM & WINGSTOP MULTI-TENANT RETAIL PAD, NNN INVESTMENT OPPORTUNITY
SUBJECT PROPERTY PHOTO
7171 CAMINO ARROYO | GILROY, CA 95020
MINIMAL LANDLORD RESPONSIBILITIES DOMINANT RETAIL CORRIDOR LOCATION
EXCELLENT VISIBILITY AND CURB APPEAL CAPITAL MARKETS | INVESTMENT PROPERTIES CONTACT US
MIKE PHILBIN SAM ALISON AMAR GOLI VICE PRESIDENT SENIOR VICE PRESIDENT VICE PRESIDENT +1 818 907 4691 +1 818 907 4690 +1 818 907 4692 LIC. 01922822 LIC. 01167124 LIC. 01883944 [email protected] [email protected] [email protected]
RICK SHAFFER MILES WATERS CBRE, INC. SENIOR VICE PRESIDENT ANALYST 234 S BRAND AVENUE +1 408 453 7430 +1 818 907 4694 GLENDALE, CA 91204 LIC. 00853889 LIC. 02047288 P: +1 818 502 6700 [email protected] [email protected] WWW.CBRE.COM Executive Summary $ $3,715,000 Offering Price Investment Highlights
NNN Lease Investment % 5.50% Cap Rate Best-In-Class Corporate Guarantee 15-Year Tenancy•Proven Commitment To Location CBRE is offering to qualified investors the opportunity to acquire a fee simple interest in the MattressFirm and Wingstop Close Proximity To Silicon Valley retail pad located at 7171 Camino Arroyo in Gilroy, California Fast-Growing Residential Community 95020 (the “Property”). The Property is being offered free and Dominant Retail Corridor Location clear of any debt. Ownership anticipates investors consider the strong real estate fundamentals and tenants’ creditworthiness Attractive Rental Increases when evaluating the Property. Excellent Access & Visibility Ideal 1031 Exchange Property
Property Summary
7171 Camino Arroyo | Gilroy, CA 95020 Offering Price $3,715,000 Offering Cap Rate 5.50% Lease Type NNN Building SF ±6,928 SF Yr. Constructed 2003 Acreage ±0.70 acres Current Annual Rent $204,347 Ownership Fee Simple
4 MATTRESS FIRM & WINGSTOP | PACHECO PASS | GILROY, CA Income Overview Rent Roll
Lease Term Rental Rates Recovery Rent Abatements Tenant % of Tenant Leasing Suite Square % Market Rent Name Property Begin End Begin Monthly PSF Annually PSF Type Month # Improvements Commissions Feet Abated NNN - No Sleep 17 4,550 4.58% Dec-2003 Nov-2023 Current $11,648 $2.56 $139,776 $30.72 Reimburse of - - - - $30.00 NNN Train Mgmt or Admin Dec-2018 $11,940 $2.62 $143,280 $31.49
Dec-2019 $12,240 $2.69 $146,874 $32.28
Dec-2020 $12,543 $2.76 $150,514 $33.08
Dec-2021 $12,858 $2.83 $154,291 $33.91
Dec-2022 $13,176 $2.90 $158,113 $34.75
Notes: Tenant has exercised 2nd 5-year option beginning 12/1/18. The option period includes annual increases of 2.5%.
NNN - Admin is 18 Wingstop 2,378 2.40% Nov-2014 Apr-2020 Current $5,220 $2.20 $62,637 $26.34 - - - - $36.00 NNN 15% of CAM
May-2019 $5,311 $2.23 $63,730 $26.80
Option 1 May-2020 $5,404 $2.27 $64,848 $27.27
May-2021 $5,499 $2.31 $65,990 $27.75
May-2022 $5,594 $2.35 $67,131 $28.23
May-2023 $5,693 $2.39 $68,320 $28.73
May-2024 $5,792 $2.44 $69,509 $29.23
Option 2 May-2025 $5,893 $2.48 $70,722 $29.74
May-2026 $5,997 $2.52 $71,958 $30.26
May-2027 $6,102 $2.57 $73,219 $30.79
May-2028 $6,209 $2.61 $74,503 $31.33
May-2029 $6,318 $2.66 $75,811 $31.88
Notes: Tenant has two remaining 5-year renewal options at stated terms. Option periods include annual increases of 1.75%.
6 MATTRESS FIRM & WINGSTOP | PACHECO PASS | GILROY, CA Subject Property Photo
First Year Income Detail
Fiscal Year Ending Jun-19
Base Rent Operating Expense Reimbursements
Suite Tenant Size Lease Ends Annual Total Monthly $ SF Insurance Bldg Repair CAM RE Taxes Annual Total Monthly $ PSF
17 Sleep Train 4,550 Nov-23 $141,528 $2.59 $1,378 $9,807 $12,051 $22,488 $45,724 $0.84
18 Wingstop 2,378 Apr-20 $62,819 $2.20 $720 $5,034 $6,212 $11,753 $23,719 $0.83
TOTAL GLA 6,928 $204,347 $2.46 $69,443 $0.84
7 MATTRESS FIRM & WINGSTOP | PACHECO PASS | GILROY, CA 10-Year Cash Flow Beginning July 1, 2018
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 For the Years Ending Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 Jun-25 Jun-26 Jun-27 Jun-28 Jun-29
POTENTIAL GROSS REVENUE Base Rental Revenue $204,347 $208,993 $214,528 $217,441 $223,531 $228,625 $233,820 $239,140 $244,586 $250,160 $255,867 NNN Recoveries $69,443 71,005 72,603 74,236 75,907 77,614 79,361 81,146 82,972 84,839 86,748
TOTAL POTENTIAL GROSS REVENUE $273,789 $279,998 $287,131 $291,677 $299,437 $306,239 $313,181 $320,286 $327,558 $334,999 $342,614
TRIPLE NET EXPENSES Common Area Maintenance $18,263 18,811 19,375 19,956 20,555 21,172 21,807 22,461 23,135 23,829 24,544 Building Repair $14,840 15,137 15,440 15,749 16,064 16,385 16,713 17,047 17,388 17,736 18,090 Insurance $2,099 2,162 2,227 2,293 2,362 2,433 2,506 2,581 2,659 2,738 2,820 Property Taxes $34,241 34,926 35,624 36,337 37,063 37,805 38,561 39,332 40,119 40,921 41,739
TOTAL TRIPLE NET CHARGES $69,443 $71,035 $72,665 $74,335 $76,044 $77,794 $79,586 $81,421 $83,300 $85,224 $87,194
NET OPERATING INCOME $204,347 $208,963 $214,465 $217,342 $223,393 $228,445 $233,595 $238,865 $244,258 $249,776 $255,421
Subject Property Photo Lease Abstract
7171 Camino Arroyo |Gilroy, CA 95020
Tenant Sleep Train (Subsidiary of MattressFirm) Guarantor Mattress Firm, Inc. Lease Date March 18, 2003 Lease Type NNN (LL Responsible for Roof, Structure, & Sidewalk) Building (Square Feet) ±6,928 Square Feet (Tenant: ±4,550 Square Feet) Year Constructed 2003 Acreage ±0.70 acres Rent Commencement November 17, 2003 Term Expiration November 30, 2023 Primary Term 15 Years Options None Rent Increases 2.5% Annually Building Use Retail - QSR (WingStop) & Home Furnishings Roof, Parking & Structure Landlord Responsibility Taxes, Insurance, HVAC & Tenant Responsibility Utilities
Rent Schedule Annual Rent Per Rental Term Start - End Date Rent SF Increases CURRENT 12/1/2017 – 11/30/2018 $139,776 $30.72 - 12/1/2018 – 11/30/2019 $143,280 $31.49 2.5% 12/1/2019 – 11/30/2020 $146,874 $32.28 2.5% 12/1/2020 – 11/30/2021 $150,514 $33.08 2.5% 12/1/2021 – 11/30/2022 $154,291 $33.91 2.5% 12/1/2022 – 11/30/2023 $158,113 $34.75 2.5% Subject Property Photos
9 MATTRESS FIRM & WINGSTOP | PACHECO PASS | GILROY, CA Subject Property Photo
Lease Abstract Rent Schedule
Rent Rental 7171 Camino Arroyo |Gilroy, CA 95020 Term Start - End Date Annual Rent Per SF Increases Tenant Wingstop CURRENT 5/1/2018 – 4/30/2019 $62,637 $26.34 - Guarantor Dekati Young, Inc. 5/1/2019 – 4/30/2020 $63,730 $26.80 1.75% Lease Date November 6, 2014 Option 1 5/1/2020 – 4/30/2021 $64,848 $27.27 1.75% Lease Type NNN (LL Responsible for Roof, Structure, & Sidewalk) 5/1/2021 – 4/30/2022 $65,990 $27.75 1.75% Building (Square Feet) ±6,928 Square Feet (Tenant: ±2,378 Square Feet) 5/1/2022 – 4/30/2023 $67,131 $28.23 1.75% Year Constructed 2003 5/1/2023 – 4/30/2024 $68,320 $28.73 1.75% Acreage ±0.70 acres 5/1/2024 – 4/30/2025 $69,509 $29.23 1.75% Rent Commencement November 6, 2014 Option 2 5/1/2025 – 4/30/2026 $70,722 $29.74 1.75% Term Expiration April 30, 2020 5/1/2026 – 4/30/2027 $71,958 $30.26 1.75% Primary Term 5 years 5/1/2027 – 4/30/2028 $73,219 $30.79 1.75% Options Two (2), 5-Year Options 5/1/2028 – 4/30/2029 $74,503 $31.33 1.75% Rent Increases 1.75% Annually 5/1/2029 - 4/30/2030 $75,811 $31.88 1.75% Building Use Retail - QSR & Home Furnishings (SleepTrain) Roof, Parking & Structure Landlord Responsibility Taxes, Insurance, HVAC & Utilities Tenant Responsibility
10 MATTRESS FIRM & WINGSTOP | PACHECO PASS | GILROY, CA Subject Property Photos
11 MATTRESS FIRM & WINGSTOP | PACHECO PASS | GILROY, CA Tenant Overviews Tenant Overview
Mattress Firm, Inc., a wholly owned subsidiary of Mattress Firm Holding Corp., (NASDAQ: MFRM), Guarantor Profile engages in the retail sale of mattresses, and related Company Mattress Firm Holding Corp. products and accessories in the United States. It was Exchange NASDAQ founded in Houston, TX in 1986. Mattress Firm currently Stock Symbol MFRM owns, operates or franchises about 1,300 locations, primarily under the Mattress Firm name, in Total Revenue (2017Q2) $980 million 33 states. It sells conventional (Sealy, Simmons) and specialty (Tempur-Pedic) mattresses, which No. of Employees ±10,000 (2018) altogether account for about 80% of total sales, in addition to other brands. It also sells bed frames Tenant Business Retail/Mattress & Bedding Sales and bedding accessories. With the largest geographic footprint in the U.S. among multi-brand Founded 1986 mattress specialty retailers, Mattress Firm not only provides sleep solutions, but opportunities in Headquarters Houston, TX hundreds of communities. Mattress Firm’s success and proven track record allows them to offer Steinhoff International Parent solid guarantees to further ensure customer satisfaction. In 2012 the company bought Mattress (2016 - Present) Giant in an acquisition valued at about $47 million. This purchase gave Mattress Firm an additional Website www.mattressfirm.com 180 stores in seven markets across Texas and Florida, where the company has already built a strong foundation. The move made Mattress Firm the nation’s largest specialty bedding retailer.
Steinhoff International is a South African international retail holding company that is dual listed in Parent Profile Germany. Steinhoff deals mainly in furniture and household goods, and operates in Europe, Africa, Company Steinhoff International Asia, the United States, Australia and New Zealand. As of August 2016, Steinhoff held retailing Exchange FWB & JSE activities in 30 countries, counting 6,500 retail outlets belonging to 40 different brands, and Stock Symbol SNH employing about 90,000 employees. 60% of the company's revenue, and two-thirds of its benefits, No. of Employees ±130,000 (2018) are made in Europe. Steinhoff expanded into the United States market on 7 August 2016. Tenant Business Retail Founded 1964 Steinhoff's South African brands include Ackermans, Buco, Dunns, Flash, HiFi Corp, Incredible Westerstede, Lower Saxony, Headquarters Connection, John Craig, Pennypinchers, Pep, Refinery, Russels, Shoe City, Tekkie Town, Timbercity Germany and Unitrans.Powersales is another African Steinhoff brand. Bensons for Beds, Conforama, Harveys Furniture, Mattress Firm, Subsidiaries Freedom Furniture, Fantastic In the UK, Steinhoff owns the high street brands Bensons for Beds, Cargo, Harveys Furniture, Furniture, Snooze, Best & Less, Pep&Co, Poundland and Sleepmaster. In Ireland, Steinhoff operates Dealz and Pep&Co. Steinhoff's Pepkor, Poundland European brands include Conforama, Kika, Leiner, Pepco and Poco. In Australia and New Zealand, Website www.steinhoffinternational.com Steinhoff Asia Pacific Holdings operates brands including Bay Leather Republic, Best & Less, Freedom (formerly trading as Freedom Furniture), Harris Scarfe, MOZI, Postie, Snooze (a bed and bedroom furniture franchise that prior to 2006 traded as "Capt’n Snooze") and Store & Order.[citation needed] The acquisition of Fantastic Holdings in 2017 has proved significant to Steinhoff's growth in Australia which added Fantastic Furniture, OMF and Plush as well as additional manufacturing facilities to the group.
13 MATTRESS FIRM & WINGSTOP | PACHECO PASS | GILROY, CA Tenant Overview
Wingstop Inc. (NASDAQ:WING) is a chain of nostalgic, aviation-themed restaurants operating and franchising more than 1,000 restaurants across the United States, Mexico, Singapore, the Philippines, Indonesia, the United Arab Emirates, Malaysia, and Saudi Arabia where the sole focus is on chicken wings. Wingstop locations are decorated following a 1930s and 1940s "pre-jet" aviation theme. The restaurant chain was founded in 1994 in Garland, Texas, and began offering franchises in 1998. Since then, Wingstop has grown into a chain with more than 1,000 restaurants. Wingstop, Inc. is headquartered in Dallas, Texas.
Wingstop's Wing Experts’ menu features classic and boneless wings and chicken tenders with eleven (11) formulated recipes including the following distinctive flavors: Original Hot, Cajun, Atomic, Mild, Teriyaki, Lemon Pepper, Hawaiian, Garlic Parmesan, Hickory Smoked BBQ, Louisiana Rub, and Tenant Profile Mango Habanero. Wingstop’s wings are Company Wingstop, Inc. always fresh and cooked to order, hand- sauced, tossed and served with a variety Type Public of housemade sides including fresh-cut, Exchange NASDAQ seasoned fries, beans and coleslaw.
Stock Symbol WING Having grown its domestic same store Total Revenue (FY2017) $105.6 million sales for 13 consecutive years, the Company has been ranked #3 on the Net Income (FY2017) $27.3 million “Top 100 Fastest Growing Restaurant No. of Locations ±1,000 Chains” by Nation’s Restaurant News Tenant Business Retail/Quick Service Restaurant (2016), #7 on the “Top 40 Fast Casual Chains” by Restaurant Business (2016), Founded 1994 and was named “Best Franchise Deal in Headquarters Dallas, TX North America” by QSR magazine (2014). Wingstop was ranked #88 on Fortune Website www.wingstop.com ’s 100 Best Medium Workplaces list in October 2016.
14 MATTRESS FIRM & WINGSTOP | PACHECO PASS | GILROY, CA Location Overview SACRAMENTO ±150 miles
STOCKTON
±110 miles SAN FRANCISCO
±80 miles MODESTO
±88 miles PALO ALTO
±47 miles
SAN JOSE
±25 miles
GILROY
FRESNO
±120 miles
MONTEREY
±41 miles N
SANTA CRUZ MOUNTAINS DOWNTOWN GILROY, CA
Location Overview
Gilroy is strategically located in the southern Gilroy is an affordable family-friendly community Already considered a major center for regional portion of Silicon Valley, and is approximately 25 and is one of the most sought-after locations in shopping, Gilroy offers three large retail complexes miles south of San Jose, California. Over the past south Silicon Valley for residential and industrial with a vast array of products and services. Gilroy's decade, Gilroy has been diversifying its economy to sites. The high-speed rail line currently under retail market share attracts well over 200,000 become a major retail and employment destination. construction includes a Gilroy station. shoppers and taxable retail sales exceed $1 Billion 30% of Gilroy’s residents presently commute daily annually. It also has a historic downtown with to the high-tech companies in nearby San Jose Unlike other locations in the Bay Area, Gilroy has retail and service oriented businesses. The City of and the metropolitan San Francisco area. The an abundance of land ready for development, Gilroy is business-friendly and offers a wide range interchange of US Highway 101 and CA Route 152 including parcels zoned for commercial, industrial, of incentive programs to businesses that generate is adjacent to the shopping center and the Caltrain or residential use. The City's infrastructure is sales tax or provide new jobs for the area. rail station is less than one mile away. Freeways strong and ready to accommodate new growth. and commuter rail provide access to San Jose, Gilroy has a very talented workforce; area colleges the peninsula, San Francisco, and the entire Bay and local education centers tailor innovative Area; and, offer a reverse commute for north Santa programs training future employees to meet Clara County residents working at technology and specific employer needs. The area enjoys abundant manufacturing firms with operations in Morgan Hill regional venture capital opportunities with the and Gilroy. most productive workforce in the nation.
17 MATTRESS FIRM & WINGSTOP | PACHECO PASS | GILROY, CA PACHECO PASS SHOPPING PACHECO PASS HWY CAMINO ARROYO CENTER Walmart Supercenter Gilroy Crossing Shopping Center Subject Property is one of ten (10) parcels total. PACHECO PASS SHOPPING See next page for site CENTER details.
Gilroy Premium Outlets
GILROY UNIFIED RAP4 - SCHOOL AIRSOFT & DISTRICT PAINTBALL ±72,000 VPD)
ELIOT ELEMENTARY SCHOOL
US HWY 101 - S VALLEY FWY (
Subject Property South Valley Plaza Shopping Center
GILROY SOUTH VALLEY UNIFIED MIDDLE SCHOOL SCHOOL DISTRICT
GILROY PREP N SCHOOL PACHECO PASS SHOPPING SUBJECT PROPERTY PARCEL CENTER CAMINO ARROYO ( Additional Parcels Available - APN: 841-18-075 Ask Broker for Details PARCEL MAP ±3.94 ACRES
Walmart ±20,994 VPD) Supercenter
APN: 841-18-061 ±0.7 ACRES APN: 841-18-077 APN: 841-18-59 ±1.4 ACRES US HWY 101 - S VALLEY FWY ( ±3.62 ACRES
APN: 841-18-078 APN: 841-18-062 ±1.84 ACRES ±1.03 ACRES APN: 841-18-079 ±7.63 ACRES
APN: 841-18-071 ±2.39 ACRES
±72,000 VPD)
APN: 841-18-070 ±2.9 ACRES APN: 841-18-072 ±1.33 ACRES PACHECO PASS HWY ( ±47,754 VPD) N PACHECO PASS SHOPPING SUBJECT PROPERTY CENTER
SITE PLAN
CAMINO ARROYO (±20,994 VPD)
RENZ LANE
±47,754 VPD)
US HWY 101 - S VALLEY FWY ( PACHECO PASS HWY ( N ±72,000 VPD) PACHECO PASS CAMINO ARROYO ( SHOPPING CENTER
Walmart MAJOR Supercenter TENANTS ±20,994 VPD) US HWY 101 - S VALLEY FWY (
±72,000 VPD)
RENZ LANE
Subject Property STARBUCKS
PACHECO PASS HWY ( ±47,754 VPD)
Additional Properties Available - Ask Broker for Details
N ±47,754 VPD)
PACHECO PASS HWY ( AREA DEMOGRAPHICS
0–1 MI 0–3 MI 0–5 MI
POPULATION
2022 POPULATION* 5,791 51,218 64,393 2017 POPULATION 5,426 48,372 60,775 2010 POPULATION 4,808 45,040 56,370 2017-2022 GROWTH* 6.73% 5.88% 5.95% 2010-2017 GROWTH 12.85% 7.40% 7.81% GILROY *Projected
HOUSEHOLDS
2022 HOUSEHOLDS* 1,355 14,934 19,050 2017 HOUSEHOLDS 1,267 14,072 17,945 2010 HOUSEHOLDS 1,105 12,930 16,452 2017-2022 GROWTH* 6.95% 6.13% 6.16% 2010-2017 GROWTH 14.66% 8.83% 9.07% *Projected 1 MI HOUSEHOLD INCOME
2017 AVERAGE INCOME $60,060 $99,601 $112,255 2017 MEDIAN INCOME $35,580 $78,984 $88,895 3 MI
5 MI
N
GILROY, CA: AERIAL VIEW 22 MATTRESS FIRM & WINGSTOP | PACHECO PASS | GILROY, CA CBRE, Inc. operates within a global family of companies with many DISCLAIMER This Memorandum contains select information subsidiaries and related entities (each an “Affiliate”) engaging in a broad pertaining to the Property and the Owner, and does not purport to be all- range of commercial real estate businesses including, but not limited inclusive or contain all or part of the information which prospective investors to, brokerage services, property and facilities management, valuation, may require to evaluate a purchase of the Property. The information investment fund management and development. At times different Affiliates, contained in this Memorandum has been obtained from sources believed to including CBRE Global Investors, Inc. or Trammell Crow Company, may have be reliable, but has not been verified for accuracy, completeness, or fitness or represent clients who have competing interests in the same transaction. for any particular purpose. All information is presented “as is” without For example, Affiliates or their clients may have or express an interest in representation or warranty of any kind. Such information includes estimates the property described in this Memorandum (the “Property”), and may be based on forward-looking assumptions relating to the general economy, the successful bidder for the Property. Your receipt of this Memorandum market conditions, competition and other factors which are subject to constitutes your acknowledgment of that possibility and your agreement uncertainty and may not represent the current or future performance that neither CBRE, Inc. nor any Affiliate has an obligation to disclose to of the Property. All references to acreages, square footages, and other you such Affiliates’ interest or involvement in the sale or purchase of the measurements are approximations. This Memorandum describes certain Property. In all instances, however, CBRE, Inc. and its Affiliates will act in the documents, including leases and other materials, in summary form. These best interest of their respective client(s), at arms’ length, not in concert, or summaries may not be complete nor accurate descriptions of the full in a manner detrimental to any third party. CBRE, Inc. and its Affiliates will agreements referenced. Additional information and an opportunity to inspect conduct their respective businesses in a manner consistent with the law and the Property may be made available to qualified prospective purchasers. You all fiduciary duties owed to their respective client(s). are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent CONFIDENTIALITY AGREEMENT Your receipt of this legal and financial advisors, and carefully investigate the economics of this Memorandum constitutes your acknowledgement that (i) it is a confidential transaction and Property’s suitability for your needs. ANY RELIANCE ON THE Memorandum solely for your limited use and benefit in determining whether CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK. you desire to express further interest in the acquisition of the Property, (ii) you will hold it in the strictest confidence, (iii) you will not disclose it or its The Owner expressly reserves the right, at its sole discretion, to reject any contents to any third party without the prior written authorization of the or all expressions of interest or offers to purchase the Property, and/or to owner of the Property (“Owner”) or CBRE, Inc., and (iv) you will not use any terminate discussions at any time with or without notice to you. All offers, part of this Memorandum in any manner detrimental to the Owner or CBRE, counteroffers, and negotiations shall be non-binding and neither CBRE, Inc. Inc. nor the Owner shall have any legal commitment or obligation except as set forth in a fully executed, definitive purchase and sale agreement delivered If after reviewing this Memorandum, you have no further interest in by the Owner. purchasing the Property, kindly return it to CBRE, Inc. © 2018 CBRE, Inc. All Rights Reserved. CAPITAL MARKETS | INVESTMENT PROPERTIES
EXCLUSIVELY REPRESENTED BY
MIKE PHILBIN SAM ALISON Vice President Senior Vice President +1 818 907 4691 +1 818 907 4690 CA Lic. 01922822 CA Lic. 01167124 [email protected] [email protected]
RICK SHAFFER AMAR GOLI Senior Vice President Vice President +1 408 453 7430 +1 818 907 4692 CA Lic. 00853889 CA Lic. 01883944 [email protected] [email protected]
MILES WATERS Analyst +1 818 907 4694 CA Lic. 02047288 [email protected]
CBRE © 2018 All Rights Reserved. All information included in this proposal pertaining to CBRE including but not limited to its operations, employees, technology and clients are proprietary and confidential, and are supplied with the understanding that they will be held in confidence and not disclosed to third parties without the prior written consent of CBRE. This letter/proposal is intended solely as a preliminary expression of general intentions and is to be used for discussion purposes only. The parties intend that neither shall have any contractual obligations to the other with respect to the matters referred herein unless and until a definitive agreement has been fully executed and delivered by the parties. The parties agree that this letter/proposal is not intended to create any agreement or obligation by either party to negotiate a definitive lease/purchase and sale agreement and imposes no duty whatsoever on either party to continue negotiations, including without limitation any obligation to negotiate in good faith or in any way other than at arm’s length. Prior to delivery of a definitive executed agreement, and without any liability to the other party, either party may (1) propose different terms from those summarized herein, (2) enter into negotiations with other parties and/or (3) unilaterally terminate all negotiations with the other party hereto. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. 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 SANTA CLARA COUNTY, CA countries. All other marks displayed on this document are the property of their respective owners. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited.