CAPITAL MARKETS | NET LEASE INVESTMENT OFFERING MEMORANDUM 303 E FOOTHILL BLVD, AZUSA, CA 91702 SANDS INVESTMENT GROUP INVESTMENT ADVISORS Exclusively Marketed By: SANDS INVESTMENT GROUP ANDY CHANA KAVEH EBRAHAMI ZACH MARTIN SANDS INVESTMENT GROUP 310.853.1316 310.853.1426 310.626.1852 2701 Ocean Park Blvd., Ste 140 Lic. 01896459 Lic. 01896322 Lic. 02044335 Santa Monica, CA 90405 [email protected] [email protected] [email protected] www.SIGnnn.com © 2018 Sands Investment Group (SIG). The information contained in this ‘Offering Memorandum,’ has been obtained from sources believed to be reliable. Sands Investment Group does not doubt its SANDS INVESTMENT GROUP accuracy, however, Sands Investment Group makes no guarantee, representation or warranty about the accuracy contained herein. It is the responsibility of each individual to conduct thorough due diligence on any and all information that is passed on about the property to determine it’s accuracy For all of our available listings, please visit: and completeness. Any and all projections, market assumptions and cash flow analysis are used to help determine a potential overview on the property, however there is no guarantee or assurance these www.SIGnnn.com projections, market assumptions and cash flow analysis are subject to change with property and market conditions. Sands Investment Group encourages all potential interested buyers to seek advice from your 2 CAPITAL MARKETS | SANDS INVESTMENTtax, financial and GROUP legal advisors before making any real estate purchase and transaction. TABLE OF CONTENTS 6 INVESTMENT OVERVIEW 10 AREA OVERVIEW 16 PROPERTY OVERVIEW 18 TENANT SUMMARY 22 FINANCIALS Investment Summary City Overview Property Description Tenant Profiles Lease Abstract Investment Highlights County Overview Parcel Map Cash Flow Site Plan Rent Roll SMART & FINAL EXTRA | 303 E FOOTHILL BLVD, AZUSA, CA 3 16 miles 8 miles 8 miles 30 miles 25 miles 15 miles 15 miles 24 miles 65 miles 23 miles CURRENT DOWNTOWN DEVELOPMENT CURRENT DOWNTOWN DEVELOPMENT Los Angeles Metro Rail Gold Line A2: Costanzo Investments A2: Four-Story Mixed Use Project Costanzo Investments 60,000 to 70,000 Sq. Ft. of Residential CURRENT DOWNTOWN DEVELOPMENT 13,000 to 15,000 Sq. Ft. of Retail Four-Story Mixed Use Project 60,000 to 70,000 Sq. Ft. of Residential Ninth Street “Metro Walk” 13,000 to 15,000 Sq. Ft. of Retail 803-813 N. Dalton Avenue Ninth Street ROSEDALE The Olson Company “Metro Walk” 803-813 N. Dalton Avenue DEVELOPMENT A2: Three Story Residential Development The Olson Company Costanzo(1250 Investments HOMES) Azusa 30 Townhome Units Intermodal Three Story Residential Development Four-Story Mixed Use Project Parking Azusa 30 Townhome Units 60,000 to 70,000 Sq. Ft. of Residential Target Structure Intermodal 13,000 to 15,000 Sq. Ft. of Retail Parking APU/Citrus Target Structure Ninth Street “Metro Walk” College Azusa APU/Citrus 803-813 N. Dalton Avenue Station Downtown College The Olson Company Station Azusa Station Downtown CURRENT DOWNTOWNThree Story Residential DEVELOPMENTDevelopment Station Azusa 30 Townhome Units Intermodal Parking Target Structure APU/Citrus A2: College Avenue Soladano Azusa Costanzo Investments Station Azusa Light Downtown Avenue Soladano & Water Smart & Final Extra Station Four-Story Mixed Use Project 303 W.Azusa Foothill Light Boulevard 60,000 to 70,000 Sq. Ft. of Residential Alameda Avenue Alameda & Water Dalton Avenue Dalton Smart & Final Extra 13,000 to 15,000 Sq. Ft. of Retail City Hall 29,996 Sq. Ft. Grocery Store 303 W. Foothill Boulevard Alameda Avenue Alameda Ninth Street “Metro Walk” City Hall Avenue Dalton 29,996 Sq. Ft. Grocery Store AZUSA N Dalton803-813 Avenue N. Dalton Avenue 8,800 CPD Avenue San Gabriel E Foothill Blvd 28,500 CPD The Olson Company Avenue Azusa DOWTOWN San Gabriel Avenue San Gabriel Soladano Avenue Soladano Foothill Boulevard Avenue Azusa STATION Three Story ResidentialAZUSA Development CITY Block 37: Azusa Light Azusa 30 Townhome Units HALL The Charles Company Intermodal Block 37: Foothill Boulevard & Water Smart & Final Extra Block 36: Parking The Charles Company 303 W. Foothill Boulevard Four-Story Mixed-Use Project Target Structure Serrano Development Group Alameda Avenue Alameda +/- 66 Residential Units Dalton Avenue Dalton Block 36: City Hall +/- 10,800 Sq. Ft. of Retail Four-Story Mixed-Use Project 29,996 Sq. Ft. Grocery Store APU/Citrus Four-Story Mixed Use Project Serrano Development Group +/- 66 Residential Units College +/- 120 Residential Units +/- 10,800 Sq. Ft. of Retail Azusa Station +/- 29,847 Sq. Ft. of Retail Four-Story Mixed Use Project San Gabriel Avenue San Gabriel Azusa Avenue Azusa Downtown Five-Screen Laemmle Theater +/- 120 Residential Units Station +/- 29,847 Sq. Ft. of Retail Block 37: Foothill Boulevard Five-Screen Laemmle Theater The Charles Company 619 N. San Gabriel Avenue Block 36: Four-Story Mixed-Use Project Three-Story Mixed Use Project 619 N. San Gabriel Avenue Serrano Development Group +/- 66 Residential Units 6 Residential Units +/- 10,800 Sq. Ft. of Retail 965 Sq. Ft. of Retail Three-Story Mixed Use Project Four-Story Mixed Use Project Soladano Avenue Soladano 6 Residential Units +/- 120 Residential Units 965 Sq. Ft. of Retail +/- 29,847 Sq. Ft. ofAzusa Retail Light Five-Screen Laemmle& Theater Water Smart & Final Extra 303 W. Foothill Boulevard Alameda Avenue Alameda 619 N. San Gabriel Avenue City Hall Avenue Dalton 29,996 Sq.City Ft. of AzusaGrocery Store For other development opportunities outside the downtown, please contact the 213 E Foothill Blvd, Azusa, CA 91702 Three-Story Mixed Use Project (626) 812-5102 Economic Development division at (626) 812-5102 [email protected] City of Azusa For other development opportunities outside the downtown, please contact the 6 Residential Units Avenue San Gabriel 213 E Foothill Blvd, Azusa, CA 91702 Azusa Avenue Azusa 965 Sq. Ft. of Retail (626) 812-5102 Economic Development division at (626) 812-5102 [email protected] Block 37: Foothill Boulevard The Charles Company Block 36: Four-Story Mixed-Use Project Serrano Development Group +/- 66 Residential Units +/- 10,800 Sq. Ft. of Retail City of Azusa For other development opportunities outsideFour-Story the downtown, Mixed please Use Project contact the 213 E Foothill Blvd, Azusa, CA 91702 +/- 120 Residential Units (626) 812-5102 Economic Development division at (626) 812-5102 [email protected] +/- 29,847 Sq. Ft. of Retail Five-Screen Laemmle Theater 619 N. San Gabriel Avenue Three-Story Mixed Use Project 6 Residential Units 965 Sq. Ft. of Retail City of Azusa For other development opportunities outside the downtown, please contact the 213 E Foothill Blvd, Azusa, CA 91702 (626) 812-5102 Economic Development division at (626) 812-5102 [email protected] 23 miles 50 miles INVESTMENT SUMMARY INVESTMENT HIGHLIGHTS OFFERING PRICE $10,704,700 ESTABLISHED, HIGH-CREDIT, SINGLE-TENANT NET LEASED (STNL) GROCERY STORE INVESTMENT CAP RATE 4.95% • Smart & Final has a long-term presence in California, with the Azusa $529,884 NOI location consisting of a brand new developed built-to-suit building and the only regional credit grocery banner serving the Azusa market CURRENT OCCUPANCY 100% • Long-Term NNN Lease – Smart & Final lease commenced November 2017 LEASE TERM 15 Years with 15 years of initial term and 4-5 year options following with rent increases throughout both the initial term and options to extend OPTION TERMS Four (4) - Five (5) Year Options • Corporate lease with Smart and Final Inc, (NYSE: SFS) founded in 1914 in 29,438 SF TOTAL BUILDING AREA Los Angeles with 323+ stores throughout California, Oregon, Washington, Arizona, Nevada and Idaho and over $4.3B in annual sales TOTAL LAND AREA 65,340 SF (1.50 Acres) • Smart & Final is one of the most rapidly expanding banners amongst the WEBSITE www.SIGnnn.com/listings grocery retailers in the country, with 14 new stores in 2017 and an increase in total sales of 5.3% from prior year SMART & FINAL EXTRA | 303 E FOOTHILL BLVD, AZUSA, CA 5 INVESTMENT HIGHLIGHTS (continued) BEST-OF -CLASS NNN INVESTMENT WITH INCOME GROWTH • The combination of the build-to-suit development and long-term lease demonstrate the commitment by Smart & Final to be the number one grocery retailer within the Azusa market at this location • Strong corporate 15 year triple-net lease with rent increase equal to the lesser of CPI or 10% at year eleven and the start of each of the four option terms • With the embedded rent increases, the Net Operating Income is projected to grow more than $159,000 (17%) over the anticipated hold period, providing a hedge against inflation compared to many net lease investments with flat, zero rent growth lease structures LOW MANAGEMENT OVERSIGHT • Single tenant, triple-net (NNN) lease with Smart & Final; landlord is responsible for roof and structural repairs, however, the brand new development consists of a 15 year roof and structure warranty making this a simple, passive investment for out-of-town investors • High barriers to entry market – Smart & Final is surrounded by 310,000 residents within a five-mile radius with little room for new retail • Brand new development, limiting any near-term deferred maintenance on the building in which the property owner would be responsible for development minimizing other grocery retail competition to enter the market • With a brand new 15-year lease term from a growing ‘tech-proof • tenant’, the property owner is significantly reduced to lowest probability of Freeway 210 Proximity – Smart & Final is located within