EAST HILLS PLAZA 2611-2673 FASHION PLAZA Bakersfield, CA 93306 Table of Contents

NOT INCLUDED

OFFERING MEMORANDUM

2 Executive Summary 6 Property Description

Offering Summary Local Area Map Investment Highlights Site Plan Physical Description

12 Area Overview 16 Financial Overview

Bakersfield Overview Rent Roll Retail Market Overview Investment Summary

Exclusively Listed By

El Warner Charley Simpson Caitlin Zirpolo Jordan Gomez David Maloy

Executive Vice President Senior Vice President Associate Vice President Associate Vice President Associate Vice President Retail Capital Markets Retail Capital Markets Retail Capital Markets Retail Capital Markets Retail Capital Markets Lic. 01890271 Lic. 01302079 Lic. 01987844 Lic. 02008809 Lic. 10401244229 NY Mobile +1 858 752 3078 Mobile +1 949 275 8807 Mobile +1 760 685 6873 Mobile +1 951 264 5994 Mobile +1 917 515 9975 Direct +1 949 724 5690 Direct +1 949 724 5680 Direct +1 949 724 5640 Direct +1 949 724 5610 Direct +1 949 724 5650 [email protected] [email protected] [email protected] [email protected] [email protected]

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 1 EXECUTIVE summary

2 Colliers International Colliers Retail Capital Market Team is pleased to present the sale of East Hills Plaza, a 37,160 square Offering Summary foot neighborhood retail center centrally located in Bakersfield, California just southeast of the 178 Asking Price $8,000,000 Freeway and the Mt. Vernon Avenue exit. Total GLA 37,160 SF The shopping center is shadow anchored by a Occupancy 100% Walmart Supercenter and is 100% occupied by 11 Number of Tenants 11

quality tenants including Big Lots, Sally Beauty, Price PSF $215 PSF Metro PCS and Baskin Robbins. In-Place Cap-Rate 7.14%

Leveraged Return 12.97% East Hills Plaza is an exceptional opportunity to acquire a stable cash flow with attractive growth in Total Land Area 4.01 Acres (1 Parcel) the revenue from fixed annual increases and below Financing No Existing Debt – Loan Quotes Available market rent. Combine this with historically low interest rates and double digit leveraged return are achievable.

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 3 Investment Highlights

37,160 SF retail center that is 100% leased to a synergistic mix of national, regional and local tenants Conveniently located in northeast Bakersfield just south including Big Lots, Sally Beauty, GameStop, Metro of the 178 freeway at the Mt. Vernon Avenue exit. PCS, Maggie’s Coffee Shop and Baskin Robbins.

Desirable demographic profile with over 120,000 Shadow Anchored by a Walmart Supercenter since people living within a three-mile radius with an 1992. Walmart expanded to 125,000 SF in 2010 to average household income of $51,049 annually. include a grocery department within the store.

Strategically located within one of the dominant retail Anchored by an 18,660 SF Big Lots! store that is only corridors in Bakersfield that includes Walmart, Target, paying $0.75 PSF/Month in rent. Significant upside Home Depot, Lowes Home Improvement, Albertsons exists in leasing this space at a market rent. and FoodsCo.

Attractive projected NOI growth rate of 3.7% annually Adjacent to the former East Hills Mall, a future mixed- over the next 10 years. use redevelopment that will transform the submarket.

Multiple buildings provides the future owner with the Anchored by Big Lots, a publicly traded company (symbol flexibility to separately parcel each building and sell “BIG” Nasdaq) with over 1,400 stores in 47 states, $5 off portions of the Property in order to lower basis billion in revenue and an S&P debt rating of B2. and increase returns.

Impressive historical occupancy with seven of the New financing projected to provide a return +10 eleven tenants occupying their space for over 10 years of 12.97%. YEARS including Big Lots (27 years), Sally Beauty (18 years) and Baskin Robbins (21 years).

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 4 DOWNTOWN BAKERSFIELD

EAST BAKERSFIELD HIGH SCHOOL

PARK SORRENTO APTS 258 UNITS

M A L L

NOT INCLUDED V IE W R O AD

B E R

Y S WA T KET R MAR E EW

E N T

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 5 PROPERTY description

6 Colliers International Local Area Map KERN RIVER

BAKERSFIELD COLLEGE

BAKERSFIELD MEMORIAL HOSPITAL

KERN MEDICAL CENTER EAST BAKERSFIELD HIGH SCHOOL DOWNTOWN BAKERSFIELD

BAKERFIELD MUNICIPAL AIRPORT

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 7 Site Plan

2673 2665 2661 2657 2653 2647 2641

2631-C 2631-B 2631-A 65,231 SF

SUITE TENANT SF

2621 Big Lots, Inc. - Store 18,660

2631-A Dr. Sae kyu Oh 3,136

2631-B Star Beauty Sales Inc. 1,170

2631-C Vatos Tacos Grill 2,194

2641 Sacramento Auto Insurance Center 2,000

2647 Sally Beauty Company 1,500

2653 Metro PCS 1,480

2657 GameStop Inc. 1,500

2661 Nails Spa 1,500

2665 Maggie's Coffee Shop 2,220

2673 Baskin Robbins 1,800

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 8 NOT INCLUDED

B E R N A R D S T R AY E W E ET T RK MA W NE

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 9 Physical Description The Subject is located just south of State Route 178 between the Mt. Vernon and Oswell Street freeway exits in northeast Bakersfield, California. Total GLA 37,160 SF Year Built 1992 North The former 350,000-square-foot East Hills Mall is located north of the Subject Property. Owned by the Save Mart Cos. Inc., Address 2611–2673 Fashion Plaza, Bakersfield, CA 93306 discussions are actively ongoing regarding the highest and best County Kern County use for this prominent re-development site. Number of Buildings Three (One single tenant, two multi-tenant) South The Subject is bordered to the South by multi-family apartment communities and single-family residential subdivisions. Total Land Area 4.01 Acres (174,675 sq. ft.) East Additional retail including Target, Big 5 Sporting Goods and Type of Ownership Fee Simple PetSmart are all located east of the Subject Property. Oswell Parcels One Parcel (130-161-85-009) Street, a primary north/south arterial that connects with the 178 freeway is just east of the Subject Property. Zoning C-2; General Commercial West Additional retail including Home Depot, Office Max, Albertsons, Cross Streets Bernard Street - 12,799 VPD Lowes Home Improvement and Rite -Aid are all located west of Mt. Vernon Ave. - 26,331 VPD the Subject Property. Mt. Vernon Avenue, a primary north/south Oswell Street - 33,355 VPD arterial that connects with the 178 freeway is just west of the State Route 178 - 36,027 VPD Subject Property.

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 10 Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 11 AREA overview

12 Colliers International Bakersfield Overview Situated within Kern County, Bakersfield cover about 151-square-miles of land and is one of the Central Valley’s largest metros, with more than 1 3 380,000 residents. Nestled between the southern end of the San Joaquin Valley and the Central MILE MILES BAKERFIELD Valley region, Bakersfield is known as a hub for POPULATION both agriculture and energy production. 2019 Estimate 18,817 120,332 386,009 Employment is growing at around 2.3% year-over- 2024 Projection 19,037 123,446 404,082 year and has marginally outperformed the national benchmark over the past two years. Moreover, Growth 2019-2024 1.17% 2.59% 4.68% income growth, after steadily falling in conjunction with oil prices, rose to almost 3% in 2018. Median household income is roughly $57,000 per year. HOUSEHOLDS Bakersfield transportation is easily accessible and includes two of California’s main logistics routes, 2019 Estimate 5,929 35,431 121,504 Interstate 5 and Highway 99. The community 2019 Average Household Income $56,843 $51,049 $79,444 has proximity to the state’s biggest ports in Los Angeles and Oakland, as well as more than 40 2019 Household Size 3.09 3.34 3.16 million consumers within a four-hour drive. Hispanic or Latino 69% 73% 52%

Daytime Employees 6,759 40,810 158,055

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 13 Retail Market Overview The retail vacancy rate dropped -0.1% to 9.1% in the second quarter of 2019 and has fluctuated in the 8.5% to 10.0% range over the last five years.

Retail asking rates have steadily increased over 11% in the last five years from $16.20 PSF in the second quarter of 2014 to $18.00 PSF as of Q2-2019.

The Subject Property is located just south of the former 350,000 SF East Hills Mall. Owned by the Save Mart Cos. Inc., discussions are actively ongoing regarding the highest and best use for this prominent re-development site.

Bakersfield, CA Submarket

11,200,000 SF Total Retail Inventory

9.1% as of Q2-2019 Vacancy Rate

$18.00 PSF/Yr. as of Q2-2019 Average Asking Rate

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 14 COLUMBUS STREET

TE 178 178

STATE ROU OSWELL STREET OSWELL FUTURE REDEVELOPMENT OF THE FORMER 178 EAST HILLS MALL

M A MALL VIEW ROAD R K VERNON AVENUE VERNON E T W A Y F

S H IO N P T L E A NOT INCLUDED E Z TR A S RD NA BER

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 15 FINANCIAL overview

16 Colliers International Rent Roll (as of 01/01/2020)

Square Feet Contract Rental Term # of Years Unit # Tenant Total % GLA PSF/Mo $/Year PSF/Yr $/Year Increases From To Tenant Expenses

2621 Big Lots, Inc. - Store 18,660 50.2% $0.75 $14,071 $9.05 $168,852 Opt. 1: $9.54 10/01/92 01/31/23 27 Years NNN

Tenant has one 5-year option remaining. Tenant currently pays $1,000 per month for two containers parked in the back of their store ($500 each) and is Comments assumed to continue paying that amount until their lease expires.

2631-A Dr. Sae kyu Oh 3,136 8.4% $1.64 $5,143 $19.68 $61,716 None 05/01/04 04/30/22 15 Years NNN

Comments Tenant has one 5-year option remaining. Tenant is assumed to vacate at the end of their lease.

2631-B Star Beauty Sales Inc. 1,170 3.1% $1.24 $1,449 $14.86 $17,388 9/20: 3% Annual 10/01/15 09/30/20 4 Years NNN

Comments Tenant has one 5-year option remaining.

10/20: 3% Annual 2631-C Vatos Tacos Grill 2,194 5.9% $1.40 $3,080 $16.85 $36,960 Opt. 1: 3% Annual 10/01/19 09/30/24 New Tenant NNN Opt. 2: 3% Annual

Comments Tenant has one remaining 5-year option.

2641 Sacramento Auto Insurance Center 2,000 5.4% $2.00 $4,000 $24.00 $48,000 Opt. 1: $25.50 06/01/10 06/30/22 9 Years NNN

Comments Tenant has one remaining 3-year option.

2647 Sally Beauty Company 1,500 4.0% $1.83 $2,750 $22.00 $33,000 None 05/19/01 05/31/21 18 years NNN

Comments Tenant has no remaining options. Tenant is paying percentage rent of 4% over $700,000. 2018 sales were $1,024,302.

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 17 Rent Roll (as of 01/01/2020)

Square Feet Contract Rental Term # of Years Unit # Tenant Total % GLA PSF/Mo $/Year PSF/Yr $/Year Increases From To Tenant Expenses

2653 Metro PCS 1,480 4.0% $1.76 $2,610 $21.16 $31,320 2/20: 3 Annual 03/08/10 01/31/22 9 Years NNN

Comments Tenant has no remaining options.

2657 GameStop Inc. 1,500 4.0% $1.86 $2,786 $22.29 $33,432 Opt. 1: $23.64 05/01/08 05/31/22 11 Years NNN

Comments Tenant has one 3-year option remaining.

2661 Nails Spa 1,500 4.0% $2.17 $3,252 $26.02 $39,024 6/20: 3% Annual 06/01/18 06/01/06 13 Years NNN

Comments Tenant has no remaining options.

7/20: 3% Annual 2665 Maggie's Coffee Shop 2,220 6.0% $1.40 $3,108 $16.80 $37,296 Opt. 1: 3% Annual 06/01/19 06/30/24 New Tenant NNN Opt. 2: 3% Annual

Comments Tenant has two remaining 5-year options.

11/20: 2.5% Annual 2673 Baskin Robbins 1,800 4.8% $1.74 $3,131 $20.87 $37,572 10/22/98 10/31/23 21 Years NNN Opt. 1: 2.5% Annual

Comments Tenant has one remaining 5-year option.

Total GLA 37,160 $45,380 $544,560

As Of 01/01/2020 SF % of Area

Area Occupied 37,160 100.00%

Area Vacant 0 0.00%

Total GLA 37,160 100.00%

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 18 Investment Summary

IN PLACE INCOME & EXPENSE SUMMARY PURCHASE SUMMARY

Income Total Purchase Price: $8,000,000

Base Rental Revenue $544,560 Purchase Price $/SF: $215.29

Percentage Rent $15,504 Net Rentable Area: 37,160

Net Rental Income $560,064 In Place NOI 571,044

Expense Reimbursements $283,980 In Place Cap Rate 7.14%

Effective Gross Income $844,044 Cash on Cash 363,044 Cash on Cash Return 12.97% Expenses Total Total

Real Estate Taxes $2.58 $95,781

Property Insurance $0.20 $7,270 DEBT SUMMARY NEW LOAN

CAM/R&M/Utilities $3.69 $137,177 Loan Amount: $5,200,000

Management 3.88% $32,772 LTV (Initial DCF Valuation): 65.0%

Operating Expenses $273,000 Additional Funded Cap: $0

Net Operating Income $571,044 Interest Rate: 4.00%

Asking Price $8,000,000 Fixed or Floating: Fixed

In Place Cap Rate 7.14% Loan Term: 10 Yrs Funding Month: Month 1 New Debt $5,200,000 Amort Term: 360 Months Required Equity $2,800,000 I/O Period: 48 Months Debt Service $208,000 0.5% In Place Cash Flow 363,044 Loan Fee:

Cash on Cash Return 12.97%

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 19 BAKERSFIELD COUNTRY CLUB

178

FUTURE REDEVELOPMENT OF THE FORMER EAST HILLS MALL BE RN AR AD D O ST R RE IEW ET V LL MA NOT INCLUDED

PLACE FASHION

Colliers International 2611-2673 Fashion Plaza | Bakersfield, CA 20 El Warner Charley Simpson Caitlin Zirpolo Jordan Gomez David Maloy

Colliers International 3 Park Plaza | Suite 1200 Irvine, CA 92614 | United States colliers.com/greaterlosangeles

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