Kmart Redevelopment Opportunity 2180 E Mariposa Road • Stockton, CA 95205

Offering Memorandum

9.36 Acres 407,286 Sqft

PRESENTED BY Cameron Bierwith Mark Mason Associate Senior Vice President Investments San Francisco Office San Francisco Office Tel: (415) 625-2144 Tel: (415) 625-2124 Fax: (415) 963-3010 Fax: (415) 296-7926 [email protected] [email protected] License: CA 02031076 License: CA 00971464 NON - ENDORSEMENT AND DISCLAIMER NOTICE

Non-Endorsements Marcus & Millichap 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 Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, 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 MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

Disclaimer THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

REDEVELOPMENT OPPORTUNITY Stockton, CA ACT ID Z0020229

2 NET LEASED DISCLAIMER

Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.

Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.

By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property. REDEVELOPMENT OPPORTUNITY

INVESTMENT OVERVIEW

4 PROPERTYKMARTREDEVELOPMENT REDEVELOPMENT NAME OPPORTUNITY OPPORTUNITY

PRICINGPRICING ANDANDLOCATIONLOCATION VALUATIONVALUATIONTENANT OVERVIEW OVERVIEWSUMMARY MATRIXMATRIX

2180 E Mariposa Road, Stockton, CA 95205

CLOSE PROXIMITY TO:

# 5 REDEVELOPMENT OPPORTUNITY

LOCAL MAP

6 REDEVELOPMENT OPPORTUNITY

AERIAL PHOTO

77 REDEVELOPMENT OPPORTUNITY

PARCAEL MAP

888 REDEVELOPMENT OPPORTUNITY

PROPERTY OVERVIEW

The subject property is an attractive candidate for repositioning, The existing 84,180 square feet of improvements are situated on a large 9.36 acre parcel, and leased to Kmart/Sears Holdings Co. who, at $0.19 modified gross, are paying well below prevailing lease rates for retail, flex, or industrial space in comparable locations.

The current tenant controls the site through a series of seven remaining five-year options; however, the tenant has expressed a willingness to negotiate a buyout and early termination of their lease. At the time of the current owner's purchase of this asset in 2004, in addition to its base rent, Kmart had been paying sizable percentage rent. Over the past several years, store sales at this location have dropped, resulting in the cessation of percentage rent, indicating this store may be at or near the stage of being unprofitable, enhancing the tenant's willingness to negotiate a buyout of their lease. Another opportunity to purchase the lease may come in the form of what many industry experts believe is an inevitable Chapter 11 or 7 bankruptcy filing by Kmart/Sears Holdings Co.

From acquisition of the subject property to the purchase/buyout of the existing lease, the property will provide cash flow to fund design, and development costs incurred in repositioning the property.

PLEASE DO NOT CONTACT KMART/SEARS HOLDINGS CO.: The process by which Kmart/Sears Holdings Co. conducts its negotiations for early lease buyout make direct contact by third parties counterproductive. On behalf of the seller, our team asks that no direct contact be made by agents, brokers, or principals who are not under a letter of intent to purchase, or formal purchase and sale agreement to acquire the subject property.

PROPERTY OVERVIEW The assembly of additional parcels adjacent to the subject property may be possible. Our listing team has established a dialog with owners of the two adjacent parcels who represent they may be willing to sell conditioned upon purchase price and terms of ▪ Attractive repositioning opportunity. an offer to purchase. PLEASE DO NOT CONTACT the owners of adjacent parcels to the ▪ Accessed from two nearby freeway exits. subject property unless you have entered into a letter of intent or formal purchase agreement for the purchase of 2180 East Mariposa, Stockton, Ca. ▪ Large site area of 9.36 acres. ▪ Wide variety of allowable uses.

9 REDEVELOPMENT OPPORTUNITY

LEASE ABSTRACT LEASE ABSTRACT

Date of Lease………...... October 4, 1973 Property Taxes…………………………………………………………………...…….Tenant

Premises……………………………………...... 84,180 sq. ft. of Property Insurance……………………………...... Tenant Improvements Utilities/Leased Premises………………………………………………………….. Tenant Site Area………………………………………………….9.36 Acres / 407,721 sq.ft. Utilities/Common Area……………………………………………………………… Landlord Lease Term Commencement……………………June 1, 1974 Maintenance & Repair/Leased Premises)…………………………………. Landlord1 Base Term………………………………...... 25 Years Maintenance, Repair & Capital Improvements/Building……….…….Landlord2 Base Term Expiration……………………………... May 31, 1999 Maintenance, Repair & Capital Improvements/Common Area.....Landlord3 Options to Extend Base Term……...... Ten, Five-Year Options

Base Rent…………………………………...... $195,000 Annually THE OFFERING

Property Kmart Additional Rent 1.00% of Annual Gross Sales from Property Address 2180 E Mariposa Rd $8,940,000 to $14,900,000 Stockton, CA 95205 .5% (five tenths of one percent) of Annual Gross Sales from Price $9,750,000 $14,900,001 to $18,625,000. Capitalization Rate 2.00% Building Price/SF $115.82 Lot Price/SF ______$23.91

1Tenant is responsible for maintain its interior improvements, and plate glass windows. 2Landlord is responsible for repair, maintenance, and replacement/capital improvements of the building including but not limited to roof membrane, roof structure, building, and building structure and all building systems. 3Landlord is responsible for the repair, maintenance, and replacement/capital improvements of all common areas including but not limited to utilities to the improvements, parking surface & sidewalks, light standards and lighting,

10 REDEVELOPMENTPROPERTYBED BATH ANDNAME BEYOND OPPORTUNITY

PRICINGPRICING ANDAND VALUATIONVALUATIONALLOWABLE MATRIXMATRIX USES Allowable Uses for CL Zoning

Permitted Uses Land Dev. Permit Admin. Use Permit Commission Use Permit

Banks & Financial Serv. Conservation Area Collection Facility/Minor Collection/Major Business Support Serv. Collection Facility Activity Center Card Rooms Offices Alcohol/w Another Use Commercial Amusement Outdoor Commercial Adult Related Estab. Auto/Vehicle Leasing Rental Academic/Schools Private Pool Halls/Billiards Auditoriums, Theaters, etc. Building Materials Indoor Recreation Private Entertainment Nongambling Gaming Fueling Stations Outdoor Assembly Family Care Homes/7+ Clubs, Lodges, Mtg. Halls Personal Storage/Mini Senior Care Facilities Bars/Nightclubs On Sale Specialized Education Rooming/Boarding Houses Triplexes Alcohol Off Sale Libraries Convenience Stores Live Entertainment Outdoor Retail Sales/Activities Warehouse Retail Stores Religious Facilities Second Hand Stores Medical Cannabis Dispensary Studios Car Washes Public Institutions Caretaker, Employee Housing Massage/Non-Certified Assisted Living Communication/Major Care Homes Senior Residential Single Family Dwellings Townhouses Artisan Shops Auto Parts Furniture, Furnishings Nurseries, Garden Supply Pet Shops/Grooming, Restaurants, Retail Shopping Centers/Regional Adult Daycare Veterinary Clinics/Hospitals Maintenance/Repair Parking Facilities Child Care Centers

11 REDEVELOPMENTPROPERTYBED BATH ANDNAME BEYOND OPPORTUNITY

PRICINGPRICING ANDAND VALUATIONVALUATIONALLOWABLE MATRIXMATRIX USES Allowable Uses for CL Zoning (cont’d)

Permitted Uses Land Dev. Permit Admin. Use Permit Commission Use Permit

Equipment Rental Health/Fitness Centers Extended Stay Facilities Hotels & Motels Massage/State Certified Ambulance Services Clinics & Laboratories Health Related Medical Related Personal Services/Unrestricted Repair Services Broadcasting Studios Communication Facilities/Minor Live-Work Space Multi-Use Facilities Public & Semi-Public Utility Facil.

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MARKET COMPARABLES

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LAND SALES COMPARABLES MAP

KMART REDEVELOPMENT OPPORTUNITY (SUBJECT) 1 Land 2 Land & Improvements 3 Land 4 Land 5 Land 6 Land 7 Land 8 Land 9 Land 10 Land

SALES COMPARABLES ON MARKET COMPARABLES

14 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

LAND SALES COMPARABLES SALES COMPARABLES SALES COMPS AVG

ON MARKET COMPARABLES ON MARKET COMPS AVG

Average Price Per Square Foot

$63.00

$56.70

$50.40

$44.10 Avg. $36.23 $37.80

$31.50 Avg. $25.21 $25.20

$18.90

$12.60

$6.30

$0.00 Subject Land Land & Land-2 Land-3 Land-4 Land-5 Land-6 Land-7 Land-8 Land-9 Improvements

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LAND SALES COMPARABLES SALES COMPARABLES SALES COMPS AVG

ON MARKET COMPARABLES ON MARKET COMPS AVG

Average Price Per Acre

$3,000,000

$2,700,000

$2,400,000

$2,100,000

$1,800,000 Avg. $1,578,317

$1,500,000

Avg. $1,097,995 $1,200,000

$900,000

$600,000

$300,000

$0 Subject Land Land & Land-2 Land-3 Land-4 Land-5 Land-6 Land-7 Land-8 Land-9 Improvements

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LAND SALESMARKETING COMPARABLES TEAM

SALES COMPARABLES ON MARKET COMPARABLES

LAND LAND & IMPROVEMENTS SUBJECT 10202 Vaughn Dr, Stockton, CA, 95212 121 S Center St, Stockton, CA, 95202 2180 E Mariposa Road, Stockton, CA, 95205 1 2

rentpropertyname1 rentpropertyname1

Down Payment % 100% Close of Escrow 3/11/2016 Close of Escrow 2/21/2018 Sales Price $9,750,000 Sales Price $7,950,100 Sales Price $2,050,000 Zoning CL Down Payment % 100% Zoning CD Price/SF $23.91 Zoning RL Price/SF $22.52 Lot Size (Acres) 9.36 Price/SF $23.13 Lot Size (Acres) 2.09 Price/Acre $1,041,666 Lot Size (Acres) 7.89 Price/Acre $980,861 Price/Acre $1,007,617

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

ENTITLED: YES | PERMIT READY: YES ENTITLED: NO | PERMIT READY: NO NOTES NOTES Offsite improvements included cable, curb/gutter/sidewalk, gas & Site improvements include cable, curb/gutter/sidewalk, gas & electricity, electricity, streets, water/sewer, and telephone. water/sewer, streets, irrigation, telephone.

17 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

LAND SALESMARKETING COMPARABLES TEAM

SALES COMPARABLES ON MARKET COMPARABLES

LAND LAND LAND 2455 North Corral Hollow Drive, Tracy, CA, 95376 190 Commerce Ave, Manteca, CA, 95336 161 E Louise Ave, Lathrop, CA, 95330

3 4 5

rentpropertyname1 rentpropertyname1 rentpropertyname1

Close of Escrow 5/24/2016 Close of Escrow 2/28/2018 Close of Escrow 5/25/2017 Days On Market 150 Sales Price $1,500,000 Sales Price $1,270,000 Sales Price $3,482,000 Down Payment % 35% Down Payment % 100% Down Payment % 100% Zoning GHC Zoning C-1 Zoning GHC Price/SF $26.90 Price/SF $22.26 Price/SF $31.22 Lot Size (Acres) 1.28 Lot Size (Acres) 1.31 Lot Size (Acres) 2.56 Price/Acre $1,171,875 Price/Acre $969,466 Price/Acre $1,360,156 Lot Dimensions 121x387

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

ENTITLED: YES | PERMIT READY: YES ENTITLED: YES | PERMIT READY: NO ENTITLED: YES NOTES NOTES Improvements to the site include cable, curb/gutter/sidewalk, gas & NOTES Level. Improvements to the site are cable, curb/gutter/sidewalk, gas & electricity, water/sewer, irrigation, streets, telephone. Two parcels were Site is level, rough graded. Improvements to the site are cable, electricity, water/sewer, streets, water. purchased for the development of a Home2Suites by Hilton which has been curb/gutter/sidewalk, electricity & gas, water/sewer, irrigation, telephone. approved by the city of Tracy.

18 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

LAND SALESMARKETING COMPARABLES TEAM

SALES COMPARABLES ON MARKET COMPARABLES

LAND LAND LAND 13501 W Grant Line Rd, Tracy, CA, 95304 10722 West Larch Road, Tracy, CA, 95304 3788 N Tracy Blvd, Tracy, CA, 95304

6 7 8

rentpropertyname1 rentpropertyname1 rentpropertyname1

On Market On Market On Market List Price $1,524,600 Days On Market 527 Days On Market 249 Down Payment % 100% List Price $9,909,000 List Price $1,950,000 Zoning AG-40 Down Payment % 100% Down Payment % 100% Price/SF $35.00 Zoning R-L Zoning HS Lot Size (Acres) 1 Price/SF $25.00 Price/SF $23.44 Price/Acre $1,524,600 Lot Size (Acres) 9.10 Lot Size (Acres) 1.91 Price/Acre $1,088,901 Price/Acre $1,020,942

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

ENTITLED: NO | PERMIT READY: NO ENTITLED: NO | PERMIT READY: NO ENTITLED: NO | PERMIT READY: NO NOTES NOTES NOTES Improvements to the site include cable, gas & electricity, water/sewer, Can be demised down to a single one acre parcel for sale at $35.00 per None. irrigation, telephone. Across from square foot, or a two acre parcel for $30.00 per square foot.

19 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

LAND SALESMARKETING COMPARABLES TEAM

SALES COMPARABLES ON MARKET COMPARABLES

LAND LAND 1612 Cat Tail Dr, Stockton, CA, 95204 1455 Cat Tail Dr, Stockton, CA, 95204

9 10

rentpropertyname1 rentpropertyname1 rentpropertyname1

On Market On Market Days On Market 313 List Price $4,675,000 List Price $2,775,000 Down Payment % 100% PURD - Residential Medium Down Payment % 100% Zoning Density PURD - Residential Medium Zoning Density Price/SF $61.33 Price/SF $36.40 Lot Size (Acres) 1.75 Lot Size (Acres) 1.75 Price/Acre $2,671,429 Price/Acre $1,585,714

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

ENTITLED: NO | PERMIT READY: NO ENTITLED: NO | PERMIT READY: NO NOTES NOTES 37 Lots of +/-2,000 to 2,300 sq. ft. in size. Nearby UOP campus None.

20 REDEVELOPMENT OPPORTUNITY

BIG BOX8 RENT COMPARABLES MAP

REDEVELOPMENT OPPORTUNITY (SUBJECT)

1 Retail - Kohl's

2 Smart & Final

3 Big Lots

4 In-Shape City

5 Safeway

6 Sportsman's Warehouse

7 SUBJECT

21 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

BIG BOX RENT COMPARABLES AVERAGE RENT PER SQUARE FOOT

$16

$14

$13

$11

$10

$0 SUBJECT Retail - Smart & Big Lots In-Shape Safeway Sportsman's Kohl's Final City Warehouse

22 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

BIG BOX RENTMARKETING COMPARABLES TEAM

RETAIL - KOHL'S SMART & FINAL BIG LOTS 11051 Olson Dr, Rancho Cordova, CA, 95670 8787 Elk Grove Blvd, Elk Grove, CA, 95624 1320 Franklin Rd, Yuba City, CA, 95993

1 2 3

rentpropertyname1 rentpropertyname1 rentpropertyname1

Total GLA Available SF Current Rent/SF Total GLA Available SF Current Rent/SF Total GLA Available SF Current Rent/SF 76,158 SF 0 SF $8.27 27,060 SF 0 SF $14.99 26,820 SF 0 SF $7.45

OCCUPANCY: 100% | YEAR BUILT: 1982 OCCUPANCY: 100% | YEAR BUILT: 2015 YEAR BUILT: 2006

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

NOTES NOTES NOTES The subject property was vacant at the time of sale; however, Kohl's went 8787 Elk Grove Blvd sold for $7.4M in an all-cash The property sold for $3,150,000 and a cap rate of 6.35% as confirmed by dark on the space and is currently paying rent until their lease expires in 12 investment Triple Net transaction - Source Costar. the listing brokers who also represented the buyers. This was the buyer's years. The in-place cap rate was reported at 6% on a triple net basis; upleg in a 1031 exchange. The tenant, Big Lots, has a triple net lease and therefore, we were able to calculate the NOI. The GSI is the same as the has recently exercised its first 5 year option to renew. It currently has 4 NOI due to the triple net lease. The property contains no deferred more 5-year options. Source - Costar maintenance.

23 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

BIG BOX RENTMARKETING COMPARABLES TEAM

IN-SHAPE CITY SAFEWAY SPORTSMAN'S WAREHOUSE 1320 Franklin Road, Turlock, CA, 95382 6498 Pony Express Trl, Pollock Pines, CA, 95726 5195 Redwood Dr, Rohnert Park, CA, 94928

4 5 6

rentpropertyname1 rentpropertyname1 rentpropertyname1

Total GLA Available SF Current Rent/SF Total GLA Available SF Current Rent/SF Total GLA Available SF Current Rent/SF 21,700 SF 0 SF $9.97 42,870 SF 0 SF $11.68 46,000 SF 0 SF $11.27

OCCUPANCY: 100% | YEAR BUILT: 1978 OCCUPANCY: 100% | YEAR BUILT: 2001 OCCUPANCY: 100% | YEAR BUILT: 1994

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

NOTES NOTES NOTES The original lease with In-Shape Health Clubs commenced in 2001 and The owner is selling off the portfolio of properties as a sale lease back. The Class C property was delivered in 1994 and zoned CSPD, Rohnert expires on May 31, 2021. There are two five-year options and one period of The seller signed a new 20 year lease and the cap rate is based on this Park. The building was 100% occupied at the close of escrow. The tenant four years and eleven months to extend the lease. The tenant recently did new lease rate. This was a 1031 exchange for the buyer. Source - Costar. was Sportsmans Warehouse who has 10 years left on their NNN lease an early extension of their lease showing their commitment to this location. term. The property sold at a 6.92% cap rate based on current NOI. This was a down-leg on a 1031 exchange for the buyers. Source - Costar

24 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

BIG BOX RENTMARKETING COMPARABLES TEAM

SUBJECT 2180 S Mariposa Rd, Stockton, CA, 95205

rentpropertyname1 rentpropertyname1 rentpropertyname1

Total GLA Available SF Current Rent/SF 84,180 SF 0 SF $2.32

OCCUPANCY: 100% | YEAR BUILT: 1974

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

NOTES The subject property is leased to Kmart/Sears Holding Co. The lease is a modified gross type with the tenant responsible for its base rent, payment of utilities, and services to its interior premises, storefront glass, property taxes and property insurance. The landlord is responsible for all other maintenance, repair, and capital expenses for the building and site area.

25 KMART REDEVELOPMENT OPPORTUNITY SINGLE TENANT BUILT AFTER 2015 8 RENT COMPARABLES MAP

KMART REDEVELOPMENT OPPORTUNITY (SUBJECT)

Kmart Redevelopment 1 Opprotunity

2 Saks Fifth Avenue OFF 5TH

3 Smart & Final

4 Hobby Lobby

5 Grocery Outlet

6 99 cents Store

7 Tractor Supply

8 99 Cents Only Store

9 Smart & Final

10 Dicks & Boot Barn

26 PROPERTYKMART REDEVELOPMENTNAME OPPORTUNITY

SINGLE TENANT BUILT AFTER 2015 RENT COMPARABLES Average Rent Per Square Foot built after 2015

$23

$21

$18

$16

$14

$12

$0 Subject Saks Fifth Smart & Hobby Lobby Grocery 99 cents Tractor 99 Cents Smart & Dicks & Avenue Final Outlet Store Supply Only Store Final-2 Boot Barn OFF 5TH

27 PROPERTYKMART REDEVELOPMENTNAME OPPORTUNITY SINGlE TENANT BUILT AFTER 2015 RENTMARKETING COMPARABLES TEAM

KMART REDEVELOPMENT OPPROTUNITY SAKS FIFTH AVENUE OFF 5TH SMART & FINAL 2180 S Mariposa Rd, Stockton, CA, 95205 1680 E Monte Vista Ave, Vacaville, CA, 95688 8787 Elk Grove Blvd, Elk Grove, CA, 95624

1 2 3

rentpropertyname1 rentpropertyname1

Total GLA Available SF Current Rent/SF Total GLA Available SF Current Rent/SF Total GLA Available SF Current Rent/SF 84,180 SF 0 SF $2.32 28,655 SF 0SF $21.59 27,060 SF 0SF $14.98

OCCUPANCY: 100% | YEAR BUILT: 1974 YEAR BUILT: 2015 YEAR BUILT: 2015

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

28 PROPERTYKMART REDEVELOPMENTNAME OPPORTUNITY

SINGLE TENANT BUILT AFTER 2015 RENTMARKETING COMPARABLES TEAM

HOBBY LOBBY GROCERY OUTLET 99 CENTS STORE 3701 Countryside Dr, Turlock, CA, 95382 1085 S Fortuna Blvd, Fortuna, CA, 95540 626 Cecil Ave, Delano, CA, 93215

4 5 6

rentpropertyname1 rentpropertyname1 rentpropertyname1

Total GLA Available SF Current Rent/SF Total GLA Available SF Current Rent/SF Total GLA Available SF Current Rent/SF 55,000 SF 0 SF $10.00 15,300 SF 0 SF $17.67 18,171 SF 0 SF $14.56

YEAR BUILT: 2017 YEAR BUILT: 2016 YEAR BUILT: 2015

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

29 PROPERTYKMART REDEVELOPMENTNAME OPPORTUNITY SINGLE TENANT BUILT AFTER 2015 RENTMARKETING COMPARABLES TEAM

TRACTOR SUPPLY 99 CENTS ONLY STORE SMART & FINAL 1755 W Henderson Ave, Porterville, CA, 93257 1209 W Pacheco Blvd, Los Banos, CA, 93635 7945 Madison Ave, Citrus Heights, CA, 95610

7 8 9

rentpropertyname1 rentpropertyname1 rentpropertyname1

Total GLA Available SF Current Rent/SF Total GLA Available SF Current Rent/SF Total GLA Available SF Current Rent/SF 19,097 SF 0 SF $16.71 16,450SF 0SF $17.48 28,243 SF 0 SF $21.44

YEAR BUILT: 2017 YEAR BUILT: 2016 YEAR BUILT: 2016

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

30 PROPERTYKMART REDEVELOPMENTNAME OPPORTUNITY SINGLE TENANT BUILT AFTER 2015 RENTMARKETING COMPARABLES TEAM

DICKS & BOOT BARN 2770 Reynolds Ranch Pkwy, Lodi, CA, 95240

rentpropertyname1 rentpropertyname1 rentpropertyname1

Total GLA Available SF Current Rent/SF 45,000 SF 0 SF $12.87

YEAR BUILT: 2017

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

NOTES On Market

31 REDEVELOPMENT OPPORTUNITY

INDUSTRIAL8 RENT COMPARABLES MAP

REDEVELOPMENT OPPORTUNITY (SUBJECT)

1 Worm's Way

Coastal - KMS Commerce 2 Center Greenwood Commerce 3 Center

4 OMP Eureka Landing

32 PROPERTYKMART REDEVELOPMENTNAME OPPORTUNITY

INDUSTRIAL RENT COMPARABLES AVERAGE RENT PER SQUARE FOOT

$14

$13

$11

$10

$8 Avg. $7 $7

$0 Subject Worm's Way Coastal Greenwood OMP Eureka - KMS Commerce Landing Commerce Center Center

33 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

INDUSTRIAL RENTMARKETING COMPARABLES TEAM

WORM'S WAY COASTAL - KMS COMMERCE CENTER GREENWOOD COMMERCE CENTER 2959 Thomas Pl, West Sacramento, CA, 95691 8250 Industrial Ave, Roseville, CA, 95678 1320 Airport Boulevard, Napa, CA, 94588

1 2 3

rentpropertyname1 rentpropertyname1 rentpropertyname1

Survey Date 4/15/2018 Survey Date 4/15/2018 Survey Date 4/15/2018 Rentable SF 138,455 Rentable SF 357,936 Rentable SF 226,044 Asking Rent/SF $5.16 Available SF 8,571 Asking Rent/SF $7.23 Year Built 2014 Asking Rent/SF $3.37 Year Built 2015 Occupancy 100% Year Built 1974 Occupancy 100% Lease Type NNN Occupancy 97% Lease Type NNN Lot Size 7.61 Lease Type Modified Gross Lot Size 19.39 Lot Size 16.05

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1 NOTES NOTES NOTES The sale is comprised of building K within the Southport Business Park, an On January 6, 2016 three industrial buildings located within the The cap rate on the existing property was a 5.6 percent, as stated by industrial warehouse building totaling 138,455 SF located at 2959 Thomas Coastal/KMS Commerce Center in Roseville, California sold for roughly sources aware of the deal. This property is leased to a single tenant, the Pl. in West Sacramento, CA. The property was fully leased to Worm's Way, $18,850,000. This multi-property deal included; 8250-8292 Industrial Adams Wine Group, which signed a 10-year lease in 2015. Source - In.c and Core-Mark International on a triple net basis at the time of sale. Avenue, 8413 Washington Boulevard, 8417 Washington BoulevardThis Costar. The in-place cap rate was reported at 5.8%. Source - Costar. transaction also included excess land totaling 16.05 acres. (Zoned M-2) Approximately 6.73 acres of land area is comprised of 6 parcels. Approximately 9.30 acres of land area is comprised of 13 parcels. Source - Costar

34 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

INDUSTRIAL RENTMARKETING COMPARABLES TEAM

OMP EUREKA LANDING 39888 Eureka Dr, Newark, CA, 94560

rentpropertyname1 rentpropertyname1 rentpropertyname1

Rentable SF 142,338 Asking Rent/SF $12.24 Year Built 2017 Occupancy 100% Lease Type NNN Lot Size 8.23

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1 NOTES On March 14, 2017, the $34,875,000 sale of a brand new industrial asset in Newmark, Calif. was completed. The 142,388-squrae-foot industrial building located at 39888 Eureka Drive is NNN leased to one tenant, namely SAS Automotive, with a long-term lease expiring in more than 10 years.

35 REDEVELOPMENT OPPORTUNITY

MARKET OVERVIEW

36 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

MARKETINGDEMOGRAPHICS TEAM Created on April 2018

POPULATION 1 Miles 3 Miles 5 Miles HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles ▪ 2022 Projection ▪ 2017 Estimate Total Population 11,989 85,905 184,981 $250,000 or More 0.22% 0.30% 0.70% ▪ 2017 Estimate $200,000 - $249,999 0.38% 0.44% 0.68% Total Population 12,126 86,273 179,944 $150,000 - $199,999 1.11% 0.65% 1.67% ▪ 2010 Census $125,000 - $149,999 0.89% 0.91% 1.99% Total Population 11,155 79,471 166,759 $100,000 - $124,999 4.62% 3.62% 5.72% ▪ 2000 Census $75,000 - $99,999 8.04% 6.79% 8.95% Total Population 10,225 74,421 145,798 $50,000 - $74,999 17.11% 16.35% 17.81% ▪ Daytime Population $35,000 - $49,999 15.32% 15.37% 14.98% 2017 Estimate 9,201 81,903 180,087 $25,000 - $34,999 16.60% 14.29% 12.63% HOUSEHOLDS 1 Miles 3 Miles 5 Miles $15,000 - $24,999 17.64% 18.58% 15.61% ▪ 2022 Projection Under $15,000 18.05% 22.69% 19.26% Total Households 3,151 23,851 53,587 Average Household Income $44,667 $41,535 $51,052 ▪ 2017 Estimate Median Household Income $33,659 $30,927 $37,199 Total Households 3,019 22,937 50,595 Per Capita Income $11,167 $11,257 $14,805 Average (Mean) Household Size 3.80 3.56 3.30 ▪ 2010 Census Total Households 2,863 21,715 47,762 ▪ 2000 Census Total Households 2,652 20,968 43,398

37 PROPERTYREDEVELOPMENTNAME OPPORTUNITY

MARKETINGDEMOGRAPHICS TEAM Created on April 2018

POPULATION PROFILE 1 Miles 3 Miles 5 Miles POPULATION PROFILE 1 Miles 3 Miles 5 Miles ▪ Population by Age ▪ Population 25+ by Education Level 0 to 4 Years 9.48% 8.98% 8.11% 2017 Estimate Population Age 25+ 6,750 50,041 106,045 5 to 14 Years 17.67% 17.02% 16.52% Elementary (0-8) 24.62% 22.51% 15.79% 15 to 17 Years 5.09% 4.72% 4.76% Some High School (9-11) 16.40% 18.85% 15.81% 18 to 19 Years 3.22% 2.91% 3.46% High School Graduate (12) 24.21% 25.51% 26.29% 20 to 24 Years 8.88% 8.36% 8.21% Some College (13-15) 15.68% 14.79% 19.53% 25 to 29 Years 8.11% 8.54% 7.87% Associate Degree Only 5.37% 5.17% 6.64% 30 to 34 Years 7.27% 7.85% 7.37% Bachelors Degree Only 2.76% 3.24% 6.30% 35 to 39 Years 6.35% 6.95% 6.65% Graduate Degree 1.09% 1.39% 3.44% 40 to 49 Years 10.97% 11.53% 11.93% 50 to 59 Years 10.37% 10.16% 10.91% 60 to 64 Years 3.81% 3.78% 4.28% 65 to 69 Years 2.90% 3.01% 3.31% 70 to 74 Years 2.27% 2.32% 2.45% 75 to 79 Years 1.65% 1.62% 1.65% 80 to 84 Years 1.09% 1.21% 1.24% Age 85+ 0.88% 1.03% 1.29% Median Age 28.44 29.68 30.70

38 PROPERTYREDEVELOPMENT NAME OPPORTUNITY

MARKETINGDEMOGRAPHICS TEAM

Population Race and Ethnicity In 2017, the population in your selected geography is 12,126. The The current year racial makeup of your selected area is as follows: population has changed by 18.59% since 2000. It is estimated that the 21.92% White, 10.80% Black, 0.24% Native American and 9.19% population in your area will be 11,989.00 five years from now, which Asian/Pacific Islander. Compare these to US averages which are: represents a change of -1.13% from the current year. The current 70.42% White, 12.85% Black, 0.19% Native American and 5.53% population is 50.37% male and 49.63% female. The median age of the Asian/Pacific Islander. People of Hispanic origin are counted population in your area is 28.44, compare this to the US average independently of race. which is 37.83. The population density in your area is 3,855.91 people per square mile. People of Hispanic origin make up 71.53% of the current year population in your selected area. Compare this to the US average of 17.88%.

Households Housing There are currently 3,019 households in your selected geography. The The median housing value in your area was $135,764 in 2017, number of households has changed by 13.84% since 2000. It is compare this to the US average of $193,953. In 2000, there were estimated that the number of households in your area will be 3,151 1,713 owner occupied housing units in your area and there were 940 five years from now, which represents a change of 4.37% from the renter occupied housing units in your area. The median rent at the current year. The average household size in your area is 3.80 time was $415. persons.

Income Employment In 2017, the median household income for your selected geography is In 2017, there are 2,515 employees in your selected area, this is also $33,659, compare this to the US average which is currently $56,286. known as the daytime population. The 2000 Census revealed that The median household income for your area has changed by 10.19% 40.02% of employees are employed in white-collar occupations in this since 2000. It is estimated that the median household income in your geography, and 64.81% are employed in blue-collar occupations. In area will be $36,830 five years from now, which represents a change 2017, unemployment in this area is 16.68%. In 2000, the average time of 9.42% from the current year. traveled to work was 26.00 minutes.

The current year per capita income in your area is $11,167, compare this to the US average, which is $30,982. The current year average household income in your area is $44,667, compare this to the US average which is $81,217.

39 REDEVELOPMENT OPPORTUNITY

8 DEMOGRAPHICS

40 PROPERTYKMARTREDEVELOPMENT REDEVELOPMENTNAME OPPORTUNITY OPPORTUNITY

PRICINGPRICING ANDANDLOCATION MARKET VALUATIONVALUATIONTENANTMARKETING OVERVIEW SUMMARY MATRIXMATRIX PLAN

4141# PRESENTED BY

Cameron Bierwith Mark Mason Associate Senior Vice President Investments San Francisco Office San Francisco Office Tel: (415) 625-2144 Tel: (415) 625-2124 Fax: (415) 963-3010 Fax: (415) 296-7926 [email protected] [email protected] License: CA 02031076 License: CA 00971464