Crimson Corner

Hill sbo ro , o r

add-value retail center in Hillsboro, or

1823-1895 SE Highway, Hillsboro, OR 97123 [ www.CapitalPacific.com] Investment Highlights CRIMSON CORNER IS AN ADD-VALUE RETAIL SHOPPING CENTER IN HILLSBORO, OR, LOCATED ON TV HWY.

The property is 77% occupied with several tenants having been at the property for 10+ years.

Valued on in-place income with the opportunity for upside as the remaining vacant spaces are leased up at market rents.

Crimson Corner sits along , a heavily trafficked East-West arterial with close to 33,000 ADV counts.

PRICE: $2,970,000 CAP: 7.62%

Occupancy...... 74% RENTABLE SF...... 29,515 SF PRICE PER SF...... $100.63 LAND AREA...... 84,166 SF (1.93 Acres) LEASE TYPE...... NNN YEAR BUILT...... 1979 AVG CURRENT RENTS . . . .$11.75/SF

Address: 1823-1895 SE Tualatin Valley Highway, Hillsboro, OR 97123

Crimson Corner | 2 Core Characteristics

ADD-VALUE PROPERTY WITH EXCELLENT INITIAL YIELD: The Property is 74% occupied, allowing for higher yield upon lease up and repositioning.

BELOW MARKET RENTS: Add-Value Average rents of 11.75/SF compared with rents in the immediate area averaging $16-$20/SF Opportunity LOW PRICE PER FOOT: Well below replacement cost at $100/SF purchase price.

LONG TERM TENANT Stability: 38% of tenancy has been in the center for 10 years or more, providing stability while re-positioning. Upside through retail hub location: lease-up and Located on Tualatin-Valley Hwy with traffic counts of 33,200 vehicles per day. Surrounded by repositioning several national big box tenants such as Home Depot, Office Depot, JoAnne’s, Ross & Target.

Residential Density 150,000 residents and 53,000 households earning an average annual income of nearly $70,000 within a 5 mile radius.

Crimson Corner | 3 Site Plan Site Plan Key

Parcel outline: NOT Land Area: 1.93 Acres A PART Building Area: 29,515 sf SE 18th Avenue

HOW HOWLOUNGE

COSMO PROF

AVAILABLE

SHONNA’S LA PRINCESA PUB AVAILABLE AVAILABLE 3 TAQUERIA B SANTOYO AVAILABLEB2 OPEN HANDKEMPO 1 B TUZO CELLULAR PINEDA NOT BAKERY A PART Proposed plan to break up suite MOMBERGER’S into three spaces making the MORELIA’S 1823B SE Tualatin Valley Highway ESTETICAs GREAT CUTS suite more leaableSF to smaller tenants. B1: 1,127 COST LESS Suite FOOD B2: 1,159 SF Suite SF Suite B3: 1,251

Crimson Corner | 4 Site

CRIMSON CORNER

33,200 DAILY

SE TUALATIN VALLEY HWY Located along retail hub and surrounded by several national big box retailers drawing traffic to the area. Retail Location High Traffic Counts Aerial The Property benefits from its proximity to downtown Hillsboro, Sunset Located at a signalized intersection off Tualatin Valley Highway, a Esplanade, campuses and public transit routes including the Trimet heavily trafficked east-west arterial with traffic counts of 33,200 Blue Line Max Center less than 1 mile north of the Property. vehicles per day.

HILLSBORO

NW Glencoe Road AIRPORT

NE

HILLSBORO MARKET CENTER N 1st Avenue

W Main Street

8 Tualatin Valley Highway E Main Street SW Brookwood Avenue

SUNSET ESPLANADE PORTLAND

CRIMSON CORNER

33,200 DAILY 8 SE Tualatin Valley Highway

219

SE Minter Bridge Road Financial Summary Crimson Corner

AS-IS STABILIZED PRICE $2,970,000 $2,970,000 LEASING COSTS: $287,190 TOTAL INVESTMENT $2,970,000 $3,257,190 Capitalization Rate: 7.62% 9.89% Occupancy 74% 100% Price Per Foot: $100.63 $110.36

NET OPERATING INCOME SUMMARY Plus: INCOME Per SF Scheduled Rent: 10/15/2013 $8.60 $253,931 $343,960 Plus: Rent Increases Through: 10/15/2014 $0.09 $2,598 $2,598 Plus: Expense Reimbursement $2.34 $69,159 $97,349 Equals: Scheduled Gross Income $11.03 $325,688 $443,907 Economic Vacancy I Vacancy Factor @ 27% 5% ($22,195) Equals: Effective Gross Income (EGI) $11.03 $325,688 $421,712

Less: OPERATING EXPENSES Per SF CAMS $1.31 $38,766 $38,766 Property Taxes $0.86 $25,273 $25,273 Insurance $0.15 $4,427 $4,427 Utilities $0.65 $19,237 $19,237 Management Fee 3.5% of EGI $0.30 $8,888 $8,888 Reserves $0.10 $2,952 $2,952 Total Operating Expenses $3.37 ($99,543) ($99,543)

Equals: NET OPERATING INCOME $226,145 $322,169

LEASING COSTS TIs - Leasing Concessions $15 SF $117,000 Suite 1823B - Demise Into 3 Spaces $30 SF $115,000 CAMS on Vacancy 1 Year $28,190 Leasing Commissions 6% 5 Years $27,000 TOTAL LEASING COSTS $287,190

Crimson Corner | 7

1/9/2014 [ ] Rent Roll Crimson Corner

TENANT INFO LEASE TERMS CURRENT RENT RENT INCREASES OPTIONS LEASE TYPE Occupancy Lease Tenant Name Suite Size % of SF Monthly Base Rent Rent/SF/YR Date Monthly Date Expiration Shonna's Deli 1823-A 2,510 8.50% 9/24/08 1/31/18 $3,232 $15.45 2/1/14 $3,329 $776 None NNN comments: See Note 1 on Page 10. 2/1/15 $3,429 2/1/16 $3,532 2/1/17 $3,638 Available 1823-B 3,800 12.87% $3,167 $10.00 N/A NNN comments: US Bank prior Tenant. Formal plans to demise into 3 spaces are available at Buyer's request. How How Restaurant & Lounge1895-A 3,000 10.16% 4/6/93 10/31/16 $3,090 $12.36 11/1/13 $3,182 $1,012 One 5 Year NNN comments: See Q&A on Page 11 for tenant history. 11/1/14 $3,279 5% increases 11/1/15 $3,377 annually CosmoProf 1895-B 1,843 6.24% 8/28/96 5/31/18 $2,433 $15.84 None NNN

Available 1895-C 1,624 5.50% $1,759 $13.00 N/A NNN

La Princesa 1895-D 1,143 3.87% 9/25/05 12/31/13 $1,151 $12.08 None NNN

Available 1895-E 921 3.12% $998 $13.00 None NNN

Available 1895-F 1,457 4.94% $1,578 $13.00 N/A NNN

Taqueria Santoyo 1895-H 2,005 6.79% 4/8/04 MTM $1,474 $8.82 None NNN comments: See Q&A on Page 11 for tenant history.

Open Hand Kempo 1895-J 1,733 5.87% 10/10/12 9/30/17 $1,800 $12.46 9/1/14 $2,000 $200 None Gross comments: Tenant is on a gross lease.

Tuzo Cellular Wireless 1895-J 1,970 6.67% 1/1/12 MTM $450 $2.74 NNN comments: Tenant is on a month to month lease.

La Imperial Bakery 1895-K 1,096 3.71% 1/1/11 3/31/14 $1,163 $12.73 One 3 Year NNN comments: See Q&A on Page 11 for tenant history. FMV

Momberger's Buy Sell Trade 1895-L 1,238 4.19% 3/31/04 3/31/14 $1,131 $10.96 None NNN

Morelia's Esteticas 1895-M 1,143 3.87% 10/27/05 1/31/14 $1,156 $12.13 None NNN

Great Cuts 1985-N 1,050 3.56% 1/1/11 12/31/15 $722 $8.25 1/1/14 $745 $207 One 5 Year NNN comments: See Note 1 on Page 10. 1/1/15 $767 FMV

Costless Market, Inc 1985-O 2,982 10.10% 12/16/92 5/31/18 $3,360 $13.52 6/1/14 $3,460 $403 One 5 Year NNN comments: Operating expense reimbursements to Landlord, with the 6/1/15 $3,564 3% Annual exception of taxes, insurance, and utilities, shall not exceed 5% increase 6/1/16 $3,671 Increases per year. 6/1/17 $3,781 Totals: 29,515 100% $28,663 $11.65 $2,598 Occupied 21,713 74% $21,161 $11.69 Vacant 7,802 26% $7,502

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or Crimson Corner | 8 implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

1/9/2014 [ ] Crimson Corner Operating Expenses

PROPERTY OPERATING EXPENSES REIMBURSEMENTS

Total /SF Comments In-Place Stabilized Trash Disposal $17,712 Maintenance $1,291 HVAC Maintenance $2,352 Electrical Maintenance $1,194 Roof Maintenance $309 Parking Lot Mainteanance $5,983 Grounds/Landscape $9,379 Other $545 CAMs $38,766 $1.31 Based on 2012 Actual Expenses $27,452 $38,766

Property Taxes $25,273 $0.86 Based on 2012 Actual Expenses $17,897 $25,273

Insurance $4,427 $0.15 Based on $.15/SF $3,135 $4,427

Utilities $19,237 $0.65 Based on 2012 Actual Expenses $13,623 $19,237

Management Fee $8,888 $0.30 Based on 3.5% of Stabilized EGI $6,294 $8,888

Reserves (1) $2,952 $0.10 Based on $.10/SF $758 $758

Total Expenses $99,543 $3.37 $69,159 $97,349

Note: 1) The following leases allow for the Landlord to collect Tenant reimbursements for capital expenditures (although current Landlord does not enforce this specific provision): Shonna's Deli, Taqueria Santoyo, Pineda Bakery and Great Cuts. The underwriting includes those reimbursements and applies them toward the Reserve Reimbursements.

1/9/2014 [ ]

Crimson Corner | 9 Reimbursements

Crimson Corner

Property Reserves/ Tenant Name Pro Rata % CAMS Insurance Utilities Mgmt Fee Totals Taxes CapEx (1) Shonna's Deli 8.50% $3,297 $2,149 $377 $1,636 $756 $251 $8,465

Available 12.87% $0 $0 $0 $0 $0 $0 $0

How How Restaurant & Lounge 10.16% $3,940 $2,569 $450 $1,955 $903 $0 $9,818

CosmoProf 6.24% $2,421 $1,578 $276 $1,201 $555 $0 $6,031

Available 5.50% $0 $0 $0 $0 $0 $0 $0

La Princesa 3.87% $1,501 $979 $171 $745 $344 $0 $3,741

Available 3.12% $1,210 $789 $138 $600 $277 $92 $3,106

Available 4.94% $0 $0 $0 $0 $0 $0 $0

Taqueria Santoyo 6.79% $2,633 $1,717 $301 $1,307 $604 $201 $6,762

Open Hand Kempo (2) 5.87% $0 $0 $0 $0 $0 $0 $0

Tuzo Cellular Wireless 6.67% $2,587 $1,687 $296 $1,284 $593 $0 $6,447

CosmoProf 3.71% $1,440 $938 $164 $714 $330 $110 $3,696

Momberger's Buy Sell Trade 4.19% $1,626 $1,060 $186 $807 $373 $0 $4,051

Morelia's Esteticas 3.87% $1,501 $979 $171 $745 $344 $0 $3,741

Great Cuts 3.56% $1,379 $899 $158 $684 $316 $105 $3,541

Costless Market, Inc 10.10% $3,917 $2,553 $447 $1,944 $898 $0 $9,759

In-Place Total (3) 67.69% $27,452 $17,897 $3,135 $13,623 $6,294 $758 $69,159 Stabilized Total 100.00% $38,766 $25,273 $4,427 $19,237 $8,888 $758 $97,349

Notes: 1) The following leases allow for the Landlord to collect Tenant reimbursements for capital expenditures (although current Landlord does not enforce this specific provision): Shonna's Deli, Taqueria Santoyo, Pineda Bakery and Great Cuts. The underwriting includes those pro rata reimbursements and applies them toward the Reserve Reimbursements.

2) Open Hand Kempo is a gross lease. Tenant does not reimburse Landlord for any of the property's operating expenses.

3) In-Place Total excludes all the vacant spaces ("Available") as well as Open Hand Kempo (gross lease).

1/9/2014 [ ]

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or Crimson Corner | 10 implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. Q&A With Capital Pacific

Q: What is the history of space 1823-B? What are the lease structures of A: 3,800 square foot space originally occupied by US Bank as a bank branch. Formal plans to demise into 3 the Tenants? spaces are available to buyer at Buyer’s request. All leases in place are NNN leases with the Q: Taqueria Santoyo is in arrears approximately $18,500. exception of the tenant Open Hand Kempo which is What is current situation? structured as a gross lease. A: Tenant is consistently paying what it owes per its lease and is also paying approximately $400/month towards back owed amounts to Landlord. One year ago Tenant owed $25,583 - approximately $7,000 in payments to Landlord on top of the regular base rent plus additional rent owed have been made to Landlord in the last year. Tenant’s base rent and additional rental amounts (not owed amounts) are capitalized in the underwriting. Tenant payment activity report dating back to 1/1/2011 is available via due diligence package Buyer will have access to.

Q: La Imperial Bakery is in arrears approximately $11,770. What is current situation? A: Tenant has been making payments approximately 1x per quarter. Over the past year Tenant has made $16,000 of payments in the past 12 months (base rent + additional rent per the lease obligate Tenant to pay approximately $18,111 per year). Tenant’s base rent and additional rental amounts are capitalized in the underwriting. Tenant payment activity report dating back to 1/1/2011 is available via due diligence package Buyer will have access to.

Q: What is the long-term tenant history? A: How How Restaurant and Lounge, Costless Market, and CosmoProf have been at Crimson Corner since 1996 and longer while Taqueria Santoyo and Momberger’s Buy Sell & Trade have occupied since 2004. This makes up more than one third of the center, which allows for stability, while re-positioning the center’s vacancy with market rents.

Q: Are there any environmental concerns with the property? A: Seller’s lender in 2007 required a Phase II Environmental Survey after the Phase I report indicated there was an operation of a dry cleaner on the subject property. The Phase II concluded there was no evidence to suggest that the presence of a former dry cleaning operation at the subject property has resulted in any adverse impacts to soil or groundwater. No further Investigation is warranted.

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or Crimson Corner | 11 implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. Intel & Nike Expansion

two of the state’s largest employers are located within 7 miles of the property.

Adding 3.6 Million Square Feet to

Ronler acres over the next several years. Nike Campus - Beaverton Currently employs 16,000 with more jobs to be added upon completion.

26

Adding $150M expansion to Beaverton 26 CRIMSON Campus opening up 2,900 Construction jobs alone. Currently employs 6,000 and CORNER 3 miles will add 500 jobs by 2020. to Intel

26

26

7 miles to Nike

Intel Ronler Acres - Hillsboro Hill sbo Location & Demos ro , o r

Intel Ronler Acres - Hillsboro Portla nd MSA Location

Portland MSA Hillsboro lies on the west side of the Portland Metropolitan Area and is the fifth largest city in with a population of over 91,611 people. Residents are 20 minutes away from downtown Portland and all the attractions the large city offers. Hillsboro is a well-planned growing community with a strong, diverse economic base and is home to many high-tech companies, and has become known as the . high-tech employers area growth Intel’s largest site is in Hillsboro, and includes three large campuses: Nike - Adding $150 Million expansion to the global Ronler Acres, Jones Farm, and Hawthorn Farm, along with several + headquarters, approximately 7 miles from the center. 26 Minutes smaller campuses that employ about 16,000 workers. Vancouver, WA Intel - Adding 3.6 Million square feet to the Ronler Acres 16 Miles Headquartered in Hillsboro are FEI Company, TriQuint Campus, approximately 3 miles from the center. Semiconductor, , , and Planar Portland, OR Systems among others. Hillsboro, OR

Other high-tech companies operating facilities in Hillsboro include: Yahoo!, Credence Systems, Synopsys, Epson, and Sun Microsystems High-End Operations. demographics surrounding property Household incomes population 1-Mile 3-Mile 5-Mile 1-Mile 3-Mile 5-Mile 2010 17,367 74,898 148,367 Median $51,311 $59,750 $57,408 2012 17,500 76,118 150,709 Average $59,385 $72,662 $69,735 2017 18,260 80,318 158,808 Salem, OR

Crimson Corner | 13 A unique HUMAN The capital pacific experience - our daily commitment to our clients RESULTS-DRIVEN client experience [ www.CapitalPacific.com ]

Peter Dunn Kevin Adatto Michael Horwitz [email protected] | (503) 607-0197 [email protected] | (503) 675-7726 [email protected] | (503) 675-8381

Scott Frank Sean Mack Sean Tufts [email protected] | (503) 675-8383 [email protected] | (503) 675-8378 [email protected] | (206) 743-8468

Baylor Gordon [email protected] | (206) 457-8960