MINI STORAGE UMPQUA MINI STORAGE SELF-STORAGE OFFERING MEMORANDUM. 292 Weyerhaeuser Drive N. Roseburg, Oregon INVESTMENT OPPORTUNITY

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1 OFFERING MEMORANDUM OFFERING MEMORANDUM STOW-AWAY UMPQUA MINI STORAGE MINI STORAGE 292 Weyerhaeuser Drive N. 801 EAST MAIN STREET Roseburg, Oregon MOLALLA, OREGON SELF-STORAGE INVESTMENT OPPORTUNITY PRICED ON CURRENT INCOME with significant upside potential BROKER CONTACTS FOR MORE INFORMATION PLEASE CONTACT JIM LEWIS GARY GRIFF

2 EXECUTIVE SUMMARY INVESTMENT OVERVIEW Stow-Away Mini Storage is a 149-unit self storage facility located in Molalla, Oregon just south of the Portland metro area. The property includes a 2,000± square-foot retail building and fenced storage yard occupied by Fisher Pumps. Additionally, there are approximately 25+ parking spaces for RVs, trailers or boats in the gravel/grass lot surrounding the storage buildings. The property is approximately 75% occupied and there is a tremendous opportunity with more proactive management and greater marketing focus to significantly increase rental income by raising rent and leasing up the vacant storage units. The property is priced at $1,100,000, which is a 7.12% cap rate on 2013 income. Assuming proforma rent, occupancy and expenses, would result in a 10.7% cap rate. Investment Highlights Significant potential to increase income by leasing up vacant units and increasing rent Only two competing facilities in town Includes a 2,000± square-foot retail building with fenced storage yard Excess land for outdoor parking or additional storage units Perimeter fencing with electric gate and keypad access 1

3 INVESTMENT SUMMARY Address Year Built 1976 Storage Units 149 RV & Boat Parking 801 E Main Street Molalla, OR 25+ Total Units 174 Occupancy (as of 12/8/14) 75% Asking Price $1,100,000 2

4 SITE PLAN City City of of Molalla Bend Deschutes County Clackamas County Oregon State State of Oregon Bend Population: Population: 79,109 (2012) 15,509 (5-mile radius) 3

5 PROPERTY DESCRIPTION Description of the Improvements Land Area: Parcel Acre (retail building, storage yard and parking) Parcel II Acres (mini-storage facility) Year Built: Built in phases between 1976 and 1995 Improvements Utilities: The improvements consist of a 149-unit self storage complex within eight freestanding buildings, plus a 2,000 squarefoot retail building and fenced yard area. The complex was constructed in phases between 1976 and Site improvements also include asphalt-paved parking and driveways, approximately 25+ gravel and packed dirt RV parking spaces, perimeter fencing, and an electronic security gate with code access. Water...City of Molalla Sewer...City of Molalla Electricity...Portland General Electric Telephone...Molalla Communications SELF storage buildings The buildings have been placed on continuous reinforced concrete slabs with concrete footings (except #1 and #7, which are portable buildings not set on foundations). There is exterior lighting throughout the facility and many of the buildings offer individual lights. The doors are metal roll-ups with metal man doors on some smaller units. Building construction is as follows: Building 1 Building 2 Building 3 Building 4 Building 5 Building 6 Building 7 Building 8 Building 9 (Retail/Showroom) Metal walls and roof Metal walls and roof Concrete block with composition roof Metal walls and roof Wood walls with metal roof Concrete block with composition roof Metal walls and roof Concrete block with composition roof Wood frame walls with metal roof Parking: 14 spaces The 2,000± square-foot retail/showroom building at the front of the property is leased by Fisher Pump of Canby, Oregon through June of The interior includes a large, open showroom/display area, service counter, private office, break room with full kitchen, bathroom and storage area. There is a large roll-up door providing access to a fenced and secure outside inventory storage area. There are approximately 14 parking spaces at the front of the property. 4

6 PROPERTY DESCRIPTION UNIT MIX Following is a breakdown of the units located on the subject property. Unit No. of Units (Sq. Ft.) Total Sq. Ft. 6 x x ,700 8 x x , x , x , x Total Enclosed ,468 Outdoor RV 25+ N/A N/A Total Units 174 N/A N/A Retail Building/Office N/A 2,000 2,000 Total Rentable Space 17,468 Management/HOURS AND OPERATIONS The office manager for Fisher Pump acts as on-site manager of the facility. Office hours are 7:30 A.M. to 5:30 P.M. Monday through Friday. Gate access is 24/7, 365 days per year. 5

7 FINANCIAL INFORMATION GROSS POTENTIAL RENT REPORT - STORAGE UNITS No. Unit Type No. Units Unit Total CURRENT ASKING RENTS Current Asking Rent ($ Month) Annual Gross Rent Current Asking Rent C&W PROFORMA RENTS C&W Estimated Potential Gross Average 1 6 x $48 $4,608 $12.00 $53 $5,088 $ x ,700 $48 $31,104 $11.52 $55 $35,640 $ x $69 $3,312 $8.63 $72 $3,456 $ x ,900 $69 $32,292 $8.28 $75 $35,100 $ x ,700 $87 $18,792 $6.96 $105 $22,680 $ x ,800 $99 $28,512 $5.94 $125 $36,000 $ x $159 $3,816 $6.36 $175 $4,200 $ ,468 Total $122,436 $142,164 $9.19 GROSS POTENTIAL RENT REPORT - RV & BOAT PARKING No. Unit Type No. Units Unit Total CURRENT ASKING RENTS Current Asking Rent ($ Month) Potential Annual Gross Rent Current Asking Rent C&W PROFORMA RENTS C&W Estimated Potential Gross Average 1 10 X ,000 $35 $10,500 $2.10 $35 $10,500 $ Total $10,500 $10,500 GROSS POTENTIAL RENT REPORT - COMMERCIAL BUILDING No. Unit Type No. Units Unit Total CURRENT ASKING RENTS Current Rent ($ Month) * Annual Gross Rent Current Asking Rent C&W PROFORMA RENTS C&W Potential Estimated Gross Average 1 Commerical/Retail 1 2,000 2, $10,800 $5.40 $1,250 $15,000 $ Total $10,800 $15,000 TOTAL GROSS POTENTIAL RENTAL INCOME $167,664 6

8 FINANCIAL INFORMATION OVERVIEW Property : 17,468 rentable square feet (not including outdoor parking) Capitalization Rate - Current Income 7.1% Price: $1,100,000 Capitalization Rate - Proforma at 95% Occupancy 10.7% Price Per Square Foot $62.97 REVENUE AND EXPENSE ANALYSIS - STOW-AWAY MINI STORAGE 2012 Actual 2013 Actual Proforma (At 95% Occupancy) Notes POTENTIAL GROSS REVENUE Total Per SF Total Per SF Total Per SF Gross Potential Rent - Storage Rental Revenue - Storage Units $0 $0.00 $0 $0.00 $142,164 $ Rental Revenue - RV & Boat Parking $0 $0.00 $0 $0.00 $10,500 $ Rental Revenue - Commercial/Retail $0 $0.00 $ $15,000 $ GROSS POTENTIAL RENTAL INCOME $0 $0.00 $0 $0.00 $167,664 $9.60 Plus: Other Income - Locks, Boxes & Fees $0 $0.00 $0 $0.00 $2,843 $ GROSS POTENTIAL REVENUE $0 $0.00 $0 $0.00 $170,507 $9.76 Less: Vacancy $ $ ($8,525) (0.49) 5 EFFECTIVE GROSS REVENUE $100,063 $5.73 $103,378 $5.92 $161,982 $9.27 OPERATING EXPENSES Taxes $10,069 $0.58 $10,872 $0.62 $9,272 $ Insurance $2,365 $0.14 $2,472 $0.14 $1,747 $ Repairs & Maintenance $4,042 $0.23 $4,614 $0.26 $4,367 $ Administration $461 $0.03 $3,342 $0.19 $5,939 $ On-Site Management $0.00 $0 $0.00 $17,500 $ Utilities $1,073 $0.06 $655 $0.04 $850 $ Advertising $0 $0.00 $60 $0.00 $4,367 $ Miscellaneous $3,244 $0.19 $3,187 $0.18 $524 $ Total Operating Expenses $21,254 $1.22 $25,202 $1.44 $44,566 $2.55 TOTAL EXPENSES $21,254 $1.22 $25,202 $1.44 $44,566 $2.55 NET OPERATING INCOME $78,809 $4.51 $78,176 $4.48 $117,416 $6.72 7

9 FINANCIAL INFORMATION FINANCIAL NOTES Income The Proforma revenue assumes hypothetical future income for the property based on estimated market rent and occupancy which are both higher than current levels. The assumptions are detailed below. (1) Rental Revenue - Storage Units: The Proforma Rental Revenue - Storage Units is based on the potential market rent for the 149 storage units at the property as detailed on pages 6 and 9. (2) Rental Revenue RV & Boat Parking: The Proforma Rental Revenue RV & Boat Parking is based on an assumed 25 uncovered parking spaces at the property at an average price of $35 per space per month. (3) Rental Revenue - Commercial/Retail: The Proforma Rental Revenue - Commercial/Retail is based on an assumed market rent of $1,250 per month ($7.50/SF/year) for the 2,000± SF commercial building fronting Main Street. The building is currently leased to Fisher Pump through June The tenant is currently occupying the space rent free in exchange for providing on-site management of the storage facility. (4) Other Income Locks, Boxes & Fees: The Proforma assumed locks, boxes and fee income of 2% of the gross potential storage unit income. (5) Vacancy: The storage units and parking spaces are currently 75% occupied while nearby facilities are mostly full. The Proforma assumes a vacancy factor equal to 5% of Gross Potential Income. Operating Expenses Historical operating expenses are based on the Form 1040, Schedule E, tax returns provided by the owner. The Proforma operating expenses were based on a $/SF average of six self-storage facilities located in suburban markets in the Pacific Northwest (the Expense Benchmark Set), while also taking into account historic operating results at the subject property. (6) Taxes: The Proforma Property Taxes are based on property tax assessments plus 3% inflation, less the standard lump sum payment discount. (7) Insurance: The Proforma Insurance expense is based on $0.10 per square foot or $1,747 per year, consistent with the Expense Benchmark Set of $0.10 per square foot. (8) Repair & Maintenance: The Proforma Repair & Maintenance expense is $0.25 per square foot or $4,367 per year. The Expense Benchmark Set average is $0.23 per square foot. (9) Administration: The Proforma Administration expense is $0.34 per square foot or $5,939 per year, consistent with the Expense Benchmark Set of $0.34 per square foot. (10) On-site Management: The Proforma assumes that the tenant in the commercial building is no longer responsible for management of the storage units and that a dedicated manager is hired. The Proforma assumed $1.00 per square foot or $17,500 annually. The Expense Benchmark Set average is $0.84 per square foot. (11) Utilities: The Proforma assumes Utilities expense of $0.05 per square foot or $850 per year which is an approximate average of utility expense for 2012 and The Expense Benchmark Set average is $0.23 per square foot. (12) Advertising: The Proforma assumes an Advertising budget of $0.25 per square foot or $4,367 per year, a substantial increase over historical advertising levels. The Expense Benchmark Set average is $0.32 per square foot. (13) Miscellaneous: The Proforma assumes Miscellaneous expenses of $0.03 per square foot or $524 per year, consistent with the Expense Benchmark Set of $0.03 per square foot. 8

10 FINANCIAL INFORMATION competitive properties Unit s Property Address 5x5 6x8 5x10 7.5x10 8x12 10x10 10x15 10x20 10x22 10x25 10x30 Stow-Away Mini Storage 801 E Main St Molalla, OR None $48.00 $48.00 None $69.00 $69.00 $87.00 $99.00 None None $ Sandy's Mini Storage 1208 Toliver Rd Molalla, OR None None $55.00 None None $75.00 $90.00 $ $ None $ Northwest Self Storage 704 W Main St Molalla, OR $65.00 None $79.00 * $90.00 * None $ $ None $ $ C&W Estimated for Stow-Away None $53.00 $55.00 None $72.00 $75.00 $ $ None None $ * Units are heated 9

11 AREA OVERVIEW MOLALLA OREGON Molalla is a rural community situated in the Willamette Valley of western Oregon, 30 miles southeast of Portland. The area was first inhabited by the Molalla Indians, whose territory extended from the Clackamas River south to Crater Lake and beyond. Over the years, lumber production became the community s biggest commodity. Two large mills still operate today, as do several small family owned mills. Dozens of nurseries in the area produce a wide variety of seedlings, shrubs and plants for worldwide distribution; vineyards and wineries contribute to the local economy, and Christmas trees are a major export product. In recent years, the city has been successful in diversifying its economic base with new manufacturing and commercial investments. Tourism is playing an increasing role in the city s economy as well. Molalla is the gateway to the Molalla River Recreation Corridor, attracting thousands of visitors year-round for sightseeing, fishing, hunting, kayaking, rafting, swimming, picnicking, camping, hiking, mountain biking and horseback riding. Molalla s Buckeroo professional rodeo and Ross Coleman Invitational Professional Bull Riding event draws top-ranked cowboys and thousands of visitors annually. Molalla Demographic Overview 5-Mile Radius 10-Mile Radius 15-Mile Radius Summary 2014 Estimated Total Population 15,509 41, ,564 Population 2019 Forecast Total Population Population Growth 2000 to 2010 Forecast Population Growth , % 3.18% 42, % 2.14% 177, % 3.84% Income 2014 Est Median Household Income $51,324 $55,215 $52,994 Age 2014 Estimated Median Age Housing Tenure Percent Owner Occupied 73.30% 75.70% 70.08% Home Value 2014 Estimated Median Home Value $234,480 $266,013 $261,231 10