Kosmont Retail NOW! 1601 N. Sepulveda Blvd., #382 Manhattan Beach, CA

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1 EXECUTIVE SUMMARY 1601 N. Sepulveda Blvd., #382 Manhattan Beach, CA Cntact: Ken K. Hira Executive Vice President, Ksmnt Cmpanies ICSC Western Divisin P3 Retail Chair

2 1. Big Bx Shrinkage Size matters, but bigger is nt necessarily better; mst stres smaller by 25% t 75% #smallbxretail 2. Fd and Place are New Anchr Tenants Fr the first time in histry, U.S. restaurant sales have surpassed grcery sales #YuCan teatrdrinkovertheinternet 3. Mixed Use is abut the Right Blend Tday s value metric is mre abut time and trip generatin than sales per square ft #CmmunityRetail instead f lifestyle retail REvlutin 4. Millennials Defining Cnsumer Demgraphics 5. E-Tail Mre spending pwer than any ther generatin ($600B) 80M strng, mbile devices are their medium fr cmmunicatin, research, shpping, etc. #ExperientialRetailing Unin f retail cnsumptin & electrnic cmmerce Retailers with rbust mni-channels backed by physical stres, generate the mst verall sales #Omnichanneling... Distributin Revlutin Distributin f gds is as imprtant as cnsumptin; demand fr quasi-retail industrial real estate is at all time high #Redustrial Surces: Shpping Centers Tday, Feb. 2

3 FITNESS Destinatin is Retail THEATRE / ENTERTAINMENT Orangethery Fitness; Brea, CA RESTAURANT / BREWERY Century Theatres; Muntain View, CA POP UP / MARKET HALLS Stne Brewing; Escndid, CA SteelCraft; Lng Beach, CA 3

4 What Retail Changes Mean fr Land Use Industrial grwth is mstly technlgy based: majr cmpnent f land use and tax base Digital ecnmy fueling under ne rf blending f ffice, retail, industrial/distributin Mving fulfillment centers t bring inventry clser t custmer base Strategy fr last mile delivery as part f retail tax strategy: critical fr cities Prximity t UPS, FedEx, DHL, USPS Zning issues: truck trips, adjacencies, hurs 4

5 THE REAL ESTATE RACE Industrial real estate is utpacing retail in Califrnia and Ls Angeles Cunty 5

6 Califrnia Market Vacancy ( - ) 8% Industrial (< 50,000 SF) Industrial (>50,000 SF) Retail 6% Retail vacancy decreased by 23% ver the last fur years 4% 2% Large industrial (>50K SF) vacancy decreased by 38% ver the last fur years Small industrial (<50K SF) vacancy decreased by 46% ver the last fur years 0% Surce: CStar 6

7 Califrnia Market Lease Rates ( - ) $24.00 $22.00 $20.00 $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 Surce: CStar Effective Retail/Industrial Rent $PSF / Year (NNN) Industrial (< 50,000 SF) Industrial (>50,000 SF) Retail Retail rents increased by 15% ver the last fur years Small industrial (<50K SF) rents increased by 52% ver the last fur years Large industrial (>50K SF) rents increased by 36% ver the last fur years 7

8 Ls Angeles Cunty Market Vacancy ( - ) 6% Industrial (< 50,000 SF) Industrial (>50,000 SF) Retail Retail vacancy decreased by 26% ver the last fur years 4% Large industrial (>50K SF) vacancy decreased by 63% ver the last fur years 2% Small industrial (<50K SF) vacancy decreased by 34% ver the last fur years 0% Surce: CStar 8

9 Ls Angeles Cunty Market Lease Rates ( - ) $40.00 Effective Retail/Industrial Rent $PSF / Year (NNN) Industrial (< 50,000 SF) Industrial (>50,000 SF) Retail $30.00 Retail rents increased by 25% ver the last fur years $20.00 Small industrial (<50K SF) rents increased by 65% ver the last fur years $10.00 Large industrial (>50K SF) rents increased by 30% ver the last fur years $0.00 Surce: CStar 9

10 Tday s Retail Real Estate Destinatin Experience Fd Entertainment Blended Use Distributin Industrial Fulfillment Click and Cllect Last-Mile Delivery Blended Use: Pase Clrad; Pasadena, CA Amazn Fulfillment Center; San Bernardin, CA 10

11 Retailer The Trinity f Retail Distributin Order frm Smartphne r Laptp and Get Items Delivered t Yur Hme/Business 11

12 THANK YOU FOR INQUIRIES, PLEASE CONTACT: Ken K. Hira, Executive Vice President Larry J. Ksmnt, President & CEO