S C O T T OFFERING MEMORANDUM 3265 EL CAMINO REAL PALO ALTO CALIFORNIA

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1 OFFERING MEMORANDUM C A R E L i c e n s e # Disclaimer: The information contained herein has been obtained from sources deemed reliable but has not been verified and no guarantee, warranty or representation, either express or implied, is made with respect to such information. Terms of sale or lease and availability are subject to change or withdrawal without notice.

2 INTRODUCTION 2 INVESTMENT OVERVIEW Palo Alto is the center of Silicon Valley, and 3265 El Camino Real is located in the center of this great city. This fully approved project offers a builder the opportunity to build three high end residential condominium units and one street level commercial space. Both of these product types have a long history of high demand in Palo Alto. This project is secured with a remote access to the parking area as well as pedestrian controlled access in both the front and rear of the property. The parking garage has five dedicated parking stalls and two stackers, allowing parking for seven. The garage will be equipped with electric car charging station as well as secured bike parking for four bicycles. There are several open community spaces thorough the property as well as an elevator to assist the residents living upstairs. This site is walking distance from the recently updated and enhanced California Avenue retail corridor with quick access to Cal-Train with 22 daily trips to San Francisco, the first one starting at 4:57 am and the last one departing at 10:59 pm. The project consists or a single two hundred eightytwo square foot commercial space, This space is zoned for office or retail uses. The space will include one parking stall. This space will front the high traffic count of El Camino Real, giving the user great visibility to a large traffic count per day. There is additional on street parking on the ECR. Two of the units will be single story eleven thousand square foot two bedroom two bath units. Each unit has two outdoor decks. These units are spacious with a very comfortable floorplan with open kitchens, spacious living areas, and large bedrooms with spacious closets. Each unit has two dedicated parking spots with the use of a parking stacker. The oversized two-bedroom townhouse unit has just under nine hundred square feet on the ground floor, there you will find the family room, dining room and kitchen, as well as washer/dryer hookups and a half bath. This unit also has a large deck with an additional storage closet. On the second floor you will find two bedrooms and two full baths, both rooms have walk in closets, and decks off the bedrooms. The project feeds to some of the best schools in California, Barron Park Elementary is a quick walk from the property. Terman Middle School is located one and a half miles from the site and finally Gunn High School is just two miles from the property. All of these schools offer children the finest education you can receive. ASKING PRICE: $3,999,500

3 CONDO PROFORMA INCOME EXPENSE: NUMBER OF UNITS TOTAL SQFT. AVERAGE UNIT SIZE 4 4,181 1,045 CONSTRUCTION COSTS: TOTAL OFF-SITE AND TOTAL SQFT. BASE COST/SQFT TOTAL BASE COST OFF-SITE COST/UNIT SOFT COST/UNIT SOFT COST/UNIT 4,181 $285 $1,191,585 $10,000 $10, $80,000 COSTS COST/SQFT COST/UNIT Total Base Costs: $1,191,585 $ $297, Off-site & Soft Costs: $80,000 $19.13 $20,000 Ground Improvements $400,000 $95.67 $100, Elevator Install $125,000 $29.90 $31, Parkland Dedication $125,051 $32.07 $12, Parks Impact Fee $1,427 $6.93 $1, Community Centers Impact Fee $6,179 $0.35 $98.70 Housing - Comercial Impact Fee $5, $0.50 $1, Housing - Residential Impact Fee $0.00 $12.42 $0.00 Citywide Transportation Impact Fee $12, $2.90 $3, Public Safety Facilities Impact Fee $2, $3.48 $ General Govt Facilities Impact Fee $3, $0.56 $3, Libraries Impact Fee $2,011 $0.48 $503 Palo Alto School Impact fees - Residential $13,569 $3.48 $3, Palo Alto School Impact Fees - Commercial $158 $0.56 $ TOTAL COSTS $1,968,832 $493 $492, SALES REVENUE: TOTAL MARKET SQFT. FOR SALE SALES PRICE / SQFT. TOTAL MARKET REVENUE 4,181 $930 $432,037 $3,888,330 3 Comercial Unit $1,400 $394,800 $394, ,102 $2,040 $2,248,080 $2,248, $2,040 $2,248,080 $2,248, $1,504 $2,549,280 $2,549,280 $7,440,240 Total Revenue: $7,440,240 Sales Costs & Commissions: $223, % Adjusted Revenue: $7,217,033 Construction Costs: $1,968,832 Net Revenues Less Land Costs: $5,248,201 $ Per Sq. Ft $ Per Unit $ Per Sq. Ft. Land Cost of Land: $3,999,500 $ $444, $ Proposed Debt $3,580,999 Project Profit on Land: $1,248,701 % of Profit on Land 31.22% % Profit on Cost 20.92% TOTAL COST OF PROJECT $5,968,332 21%

4 CONDOMINIUM COMPARABLES MAP 4 PROPERTY SUBJECT El Camino Real Palo Alto, CA Channing Ave Palo Alto, CA Forest Ave Palo Alto, CA Channing Ave Palo Alto, CA Alma Street Palo Alto, CA Waverly Street Palo Alto, CA

5 CONDOMINIUM COMPARABLES 5 CONDOMINIUM COMPARABLES PROPERTIES PRICE SQ FT $/SQ FT COE UNIT MIX COMMENTS Channing Ave Palo Alto, CA $2,850,000 1,552 $1,836 Feb-18 2 Bedroom 2 bath Comments: HOA $805 per month, Built in 2004, was not publically marketed. Central A/C, located at Woodmark at University Park Forest Ave Palo Alto, CA $2,300,000 1,285 $1,790 May-18 2 Bedroom 2 bath Comments: HOA $780 per month. Built in 1981, corner unit, top floor, views of Palo Alto, and foothills, 2 deeded parking spaces, updated unit, modern maple floors, twelve foot ceilings, four balconies, sold for 475K above list price, DOM Channing Ave Palo Alto, CA $3,200,000 1,871 $1,710 Feb-18 2 Bedroom 2.5 bath Comments: HOA $820, Built in 2004, Woodmark building, Large unit, updated with all the most modern ammenities, sold for over 200K above asking DOM Alma Street Palo Alto, CA $1,699,000 1,032 $1,646 Active 2 Bedroom 2 bath Comments: HOA $969 per month, built in 1960, located on the 11th floor, great views on the foothills as well as up and down the valley, new floors and kitchen, large covered lanai, Waverly Street Palo Alto, CA $1,610, $1,641 May-18 2 Bedroom 2 bath Comments: HOA $400 per monht, built in 1973, updated unit overlooking park, bamboo flooring, updated kitchen and bath, newer windows, sold for over 300K above asking DOM 15

6 RETAIL RENT COMPARABLES MAP 6 PROPERTY SUBJECT El Camino Real Palo Alto, CA Chestnut Menlo Park El Camino Real Palo Alto University Ave Menlo Park El Camino Real Palo Alto University Ave Menlo Park 2 4

7 RETAIL RENT COMPARABLES 7 RETAIL RENT COMPARABLES PROPERTIES SQ FT RENT PER MONTH PER SQ FT OCCUPIED CONSTRUCTION TYPE COMMENTS Chestnut Menlo Park Oct-17 Street Level Retail Comments: Street level retail in downtown Menlo Park, poor condtion, small office on month to month lease. Tenant pays phone, internet, cable, and alarm El Camino Real Palo Alto 1, Apr-18 Street Level Retail Comments: Street level retail on ECR in Palo Alto, older builidng, inferior condtion to subject, located across the street from hotel and next to restaurant University Ave Menlo Park Aug-18 In Building Comments: Professional service office, with waiting room. Gross lease, month to month El Camino Real Palo Alto Active Street Level Retail Comments: Turn key tutoring center, NNN lease with $1.25 CAMS, University Ave Menlo Park Aug-18 In Building Comments: Rear building next to parking lot, two large offices and reception area, two private patios as well, landlord pays utilities, taxes and building insuracne, 1 block off Santa Cruz Ave.

8 LOCATION HIGHLIGHTS - PALO ALTO 8 SILICON VALLEY CITY OF PALO ALTO BACKGROUND Located 35 miles south of San Francisco and 14 miles north of San Jose, Palo Alto is part of the San Francisco Bay Area and the Silicon Valley. The City encompasses an area of approximately 26 square miles, bounded by the San Francisco Bay on the east to the Skyline Ridge of the coastal mountains on the west, with Menlo Park to the north and Mountain View to the south. Palo Alto is strategically located and easily accessible to major surface routes, including Interstate 280, Highway 101, Highway 84 - the Dumbarton Bridge and Highway 92 - the Hayward-San Mateo Bridge. Air transportation is easily accessible by bus, automobile or shuttle service to San Francisco, San Jose and Oakland international airports. Within the City, commuter rail transportation is conveniently located and the Palo Alto stop is one of the most used in the Caltrain system. Alternative transportation options include numerous bike paths throughout the City and an internal shuttle service is also available. The blend of business and residential areas anchored by a vibrant downtown defines Palo Alto s unique character. A charming mixture of old and new, Palo Alto s tree-lined streets and historic buildings reflect its California heritage. At the same time, Palo Alto is recognized worldwide as a leader in cutting-edge technological development. Proximity to Stanford University with its cultural and educational offerings add to the vibrance, innate charm and beauty of Palo Alto. As befits the City known as Birthplace of the Silicon Valley, the City has developed a 31-mile dark fiber ring for ultra-fast Internet access. Complementing its exciting and innovative business community, Palo Alto s residents are highly educated, politically aware and culturally sophisticated. Distinctive in every way, Palo Alto offers its business community a diverse and exciting environment in which to work and live. PALO ALTO QUICK FACTS Population: 66,649 Median household income of $137,000 per year Median home price of $2,670,000 One of the most educated populations in the country 79.7% of residents have a Bachelor s degree 40.2% of residents have a Master s and/or Doctorate degree Home to 7,000+ business, employing 98,000+ people Conveniently located on the San Francisco Peninsula and is the focal point of Silicon Valley Served by Highways 101/84/92, Interstate 280, and El Camino Real Caltrain service with two stops in Palo Alto linking San Francisco to San Jose Home to Stanford University, the #1 ranked university in the world according to the Washington Monthly

9 LOCATION HIGHLIGHTS - PALO ALTO 9 DOWNTOWN PALO ALTO STANFORD UNIVERSITY PALO ALTO

10 LOCATION HIGHLIGHTS - NEARBY PALO ALTO 10 DOWNTOWN MOUNTAIN VIEW MENLO PARK MOUNTAIN VIEW

11 AREA MAP 11 PALO ALTO

12 PARCEL MAP 12

13 PARCEL MAP SITE DETAIL 13

14 AERIAL VIEW 14

15 LOCAL EMPLOYERS / NUMBER OF EMPLOYEES ,931 EMPLOYEES 1,100 EMPLOYEES 2,370 EMPLOYEES 1,200 EMPLOYEES 2,377 EMPLOYEES 101 7,091 EMPLOYEES 2,800 EMPLOYEES 1,373 EMPLOYEES 1,177 EMPLOYEES PALO ALTO MENLO PARK PALO ALTO CALIFORNIA AVE SAN ANTONIO MENLO PARK 4,850 EMPLOYEES 1,400 EMPLOYEES 2,200 EMPLOYEES 23,324 EMPLOYEES 2,789 EMPLOYEES MOUNTAIN VIEW MOUNTAIN VIEW 2,500 EMPLOYEES 5,500 EMPLOYEES 4,300 EMPLOYEES 3,900 EMPLOYEES 2,500 EMPLOYEES 3,900 EMPLOYEES 3,500 EMPLOYEES

16 LOCAL SCHOOLS 16 Fletcher Middle School

17 PROPERTY OVERVIEW 17 DETAILS Address 3265 El Camino Real Palo Alto, California County Santa Clara APN County Use Multi-Family Development ATTRIBUTES Units 4 Gross Building Square Feet 4,181 Land Area (SqFt) 7,489 Year Built 2018 Parking 7 secured, 5 spaces 2 stackers * Buyer to verify square footage CONSTRUCTION Foundation Exterior Walls Roof Patio/Balcony Laundry Facilities Concrete Wood Torch down or membrane Multiple patios In each unit In unit hookups

18 EXTERIOR RENDERINGS - STREETSCAPE - FRONT ELEVATION 18

19 EXTERIOR RENDERINGS - FRONT OBLIQUE 19

20 EXTERIOR RENDERINGS - REAR - BIRDS EYE VIEW 20

21 EXISTING SITE VIEW FROM EL CAMINO 21 SITE LOCATION

22 PROPOSED SITE PLAN - 1ST LEVEL 22

23 PROPOSED SITE PLAN - 2ND LEVEL 23

24 PROPOSED SITE PLAN - 3RD LEVEL 24

25 SOUTH ELEVATION (EL CAMINO REAL) 25

26 EAST ELEVATION 26

27 NORTH ELEVATION 27

28 WEST ELEVATION 28

29 PROPOSED PLAN - LEVEL 1 29

30 PROPOSED PLAN - LEVEL 2 30

31 PROPOSED SITE PLAN - 3RD LEVEL 31