Village Center. Value-Add Shopping Center PRICED BELOW REPLACEMENT COST North Pacific Highway, Cottage Grove, OR 97424

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1 Village Center Value-Add Shopping Center PRICED BELOW REPLACEMENT COST North Pacific Highway, Cottage Grove, OR 97424

2 Featured Photos VILLAGE CENTER 2

3 Village Center PRICE: $2,500,000 IN-PLACE CAP: 8.10% BUILD-TO CAP: 10.14%* VILLAGE CENTER IS A 38% OCCUPIED, 98,187 SQUARE FOOT NEIGHBORHOOD SHOPPING CENTER ANCHORED BY NATIONAL TENANTS, DOLLAR TREE AND GOODWILL The Property is priced well below replacement cost and provides significant opportunity for an experienced investor to recognize more than 200 basis points of yield upside through lease-up of available space to 80% occupancy. Long term tenancy, low contract rents, and staggered lease expirations exhibited by in-place tenants provide long term stability at Village Center. The Property is located within one-half mile of the primary Interstate-5 access point in Cottage Grove, with excellent exposure along the North Pacific Highway. The City of Cottage Grove is currently benefitting from being designated an Enterprise Zone, which gives great incentives for businesses to set up or relocate to the city. PRICE PER SF... $25 PRICE PER SF LAND... $7 LEASABLE SF... ±98,187 SF LAND AREA... ±342,935 SF; ±7.88 Acres CURRENT OCCUPANCY... 38% YEAR BUILT /1986 AVG CURRENT RENTS... $7.85/SF PARKING... ±339 Spaces or 3.5/1,000 SF ANCHORS... Dollar Tree, Goodwill *Stabilized Cap represents the Property at 80% occupancy. ADDRESS: North Pacific Highway, Cottage Grove, OR VILLAGE CENTER 3

4 Core Characteristics > THE PROPERTY SHOWCASES INSULATED NATIONAL Anchor TENANTs, DOLLAR TREE AND GOODWILL, who have each recently EXTENDED their lease terms. > DOLLAR TREE RECOGNIZES STRONG STORE SALES ALONG WITH LIMITED MARKET AREA COMPETITION. > PRICED AGGRESSIVELY BELOW REPLACEMENT COST AND LOW VALUE PER SQUARE FOOT OF LAND. > STAGGERED ROLLOVER SCHEDULE MINIMIZES LEASE EXPOSURE. > POTENTIAL LEASING UPSIDE OF MORE THAN 200 BASIS POINTS TO A STABILIZED 80% OCCUPANCY. > LOW CONTRACT RENTS LIMIT Turnover Risk. > IN-PLACE TENANTS EXHIBIT LONG TERM TENANCY AT THE PROPERTY. > THE CITY OF COTTAGE GROVE HAS BEEN DESIGNATED AN ENTERPRISE ZONE AND HAS BEGUN TO ATTRACT NEW BUSINESSES TO THE CITY. > LOCATED LESS THAN ONE-HALF MILE TO Interstate-5 ON AND OFF RAMPS. VILLAGE CENTER 4

5 QUICK STATS NOI GROWTH LONG TERM TENANCY $202, % CAP IN-PLACE 20 + YEARS - 17% 30% 10 + YEARS - 13% 10 + YEARS $477, % CAP STABILIZED (80% OCCUPANCY) <10 YEARS - 8% AVAILABLE- 62% UPSIDE POTENTIAL OF MORE THAN 200 BASIS POINTS. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 6% 2017 LEASE EXPIRATION SCHEDULE Cumulative Annual 100% 79% 45% 11% VILLAGE CENTER 5

6 Aerial VILLAGE CENTER ,320 DAILY COTTAGE GROVE COMMUNITY HOSPITAL 10,300 DAILY COTTAGE GROVE STATE AIRPORT 5 99

7 Limited Dollar Store Competition Dollar Tree currently exhibits a 14-year tenure at Village Center. With store sales providing healthy occupancy costs and the nearest competition being well over 10 miles away in Springfield, Dollar Tree provides significant stability at the Property. ZONING: COMMUNITY COMMERCIAL (C-2P) Permitted Uses: All residential uses; if built as a mixed-use project with residential above ground floor. Allowed commercial uses include retail, office, light industrial, daycare, parks, and horticultural uses. BUILDING HEIGHT RESTRICTION:...40 ft; 50 ft with residential use MAXIMUM SITE COVERAGE:...60% MINIMUM LANDSCAPE AREA:...10% MINIMUM SETBACKS:...0 ft VILLAGE CENTER 7

8 Site Plan SITE PLAN KEY PARCEL ACRES: PARCEL ACRES: LAND AREA: BUILDING AREA: VILLAGE CENTER: AVAILABLE: INGRESS/EGRESS: ±342,935 SF ±98,187 SF 204 FT 36,147 SF 65 FT King s Chinese CALVARY CHAPEL Withycombe Ave 910 SF 2,909 SF Torero s Mike s Barber 46 FT 104 FT 19,466 SF KOFFEE KUP 10,300 Daily 137 FT 99 N Pacific Hwy Site Plan not to scale. Bay depth measurements are approximate, based on public record. VILLAGE CENTER 8

9 Financial Analysis IN-PLACE BUILD-TO 80% OCCUPANCY BUILD-TO 95% OCCUPANCY PRICE $2,500,000 $2,500,000 $2,500,000 LEASING COSTS: $2,212,000 $2,212,000 TOTAL INVESTMENT $2,500,000 $4,712,000 $4,712,000 Capitalization Rate: 8.10% 10.14% 12.62% Price Per Foot: $25 $48 $48 NET OPERATING INCOME SUMMARY Plus: INCOME Per SF Scheduled Rent: 6/1/2018 $2.87 $281,960 $629,983 $629,983 Plus: Rent Increases Through 5/31/2019 $0.03 $3,169 $3,169 $3,169 Plus: Percentage Rent - Dollar Tree* $0.15 $15,001 $15,001 $15,001 Plus: Expense Reimbursement $0.48 $46,863 $129,562 $129,562 Equals: Scheduled Gross Income $3.53 $346,993 $777,715 $777,715 Current Proforma Vacancy 62% 20% ꟾ 5% ($155,543) ($38,886) Equals: Effective Gross Income $3.53 $346,993 $622,172 $738,829 Less: OPERATING EXPENSES Per SF CAMS $0.70 $68,809 $68,809 $68,809 Property Taxes $0.26 $25,876 $25,876 $25,876 Insurance $0.21 $21,105 $21,105 $21,105 Management Fee 3.0% of EGI $0.19 $18,665 $18,665 $18,665 Reserves $0.10 $9,819 $9,819 $9,819 Total Operating Expenses $1.47 ($144,273) ($144,273) ($144,273) Equals: NET OPERATING INCOME $202,719 $477,898 $594,556 *Based on 2017 Dollar Tree reported sales. LEASING AND CAPITAL COSTS TIs - Leasing Concessions $25 SF $1,525,000 $1,525,000 CAMS on Vacancy 1 Year $83,000 $83,000 Leasing Commissions 6% 5 Years $104,000 $104,000 Capital Improvements $8 SF $500,000 $500,000 TOTAL LEASING AND CAPITAL COSTS $2,212,000 $2,212,000 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. VILLAGE CENTER 9

10 Rent Roll LEASE TENANT INFO LEASE TERMS CURRENT RENT RENT INCREASES TYPE Occupancy Lease Monthly Base Annual Tenant Name Suite Size % of SF Rent/SF/YR Date Monthly Date Expiration Rent Addt'l Dollar Tree , % 10/1/03 2/28/21 $2,701 $3.12 NNN comments: Tenant pays percentage rent of 3% of gross sales beyond a natural breakpoint Sales of $1.54M. Goodwill , % 6/26/95 8/31/22 $5,638 $5.50 9/1/18 $5,807 $1,522 NNN 3% Annual Increases Available , % $15,061 $5.00 Available % $758 $10.00 Available 105 2, % $1,939 $8.00 Available , % $9,733 $6.00 Calvary Church , % 11/1/14 10/31/24 $5,655 $ /1/18 $5,825 $1,188 NNN 3% Annual Increases King's Chinese Restaurant 112 1, % 4/10/99 3/31/19 $1,517 $10.00 NNN Available 113 1, % $1,510 $10.00 Mike's Barber % 2/1/18 7/31/20 $748 $ /1/19 $786 $150 NNN Comments: Rent to commence 6/1/18. $0.50/SF Annual Increases Torero's 115 2, % 5/1/93 5/31/18 $3,800 $20.43 NNN Koffee Kup 116 2, % 2/11/95 2/28/21 $3,437 $ /1/19 $3,540 $309 NNN 3% Annual Increases Totals: 98, % $52,499 $6.42 $3,169 Occupied 37,181 38% $23,497 $7.58 Leasable 61,006 62% $29,002 $5.70 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. VILLAGE CENTER 10

11 Operating Expenses PROJECTED OPERATING EXPENSES REIMBURSEMENTS Total /SF Notes In-Place Stabilized CAMS $68,809 $ $25,642 $67,553 Property Taxes $25,876 $ $10,370 $26,447 Insurance $21,105 $ $5,759 $18,872 Management Fee $18,665 $ $5,093 $16,690 Reserves $9,819 $ Total Expenses $144,273 $1.47 $46,863 $129,562 Notes: 1) Based on 2017 Profit and Loss Statement. 2) Based on Lane County Tax Assessment. 3) Based on 3% of Stabilized Effective Gross Income (EGI). $ - 4) Based on $.10/SF This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. VILLAGE CENTER 11

12 Reimbursements Pro Rata Property Pro Rata Tenant Name Size Pro Rata % Pro Rata CAM Pro Rata Insurance Notes Tenant Totals Taxes Management Expense Totals $68,809 $25,876 $21,105 $18,665 Dollar Tree 10, % $7,236 $3,310 1, 2 $10,546 Vacancy Reimbursements Goodwill 12, % $8,451 $3,242 $2,644 $2,338 $16,675 Available 36, % $24,833 $9,526 $7,770 $6,871 $49,000 Available % $625 $240 $196 $173 $1,234 Available 2, % $1,999 $767 $625 $553 $3,943 Available 19, % $13,373 $5,130 $4,184 $3,700 $26,388 Calvary Church 7, % $5,180 $1,987 $1,621 $1,433 $10,221 King's Chinese Restaurant 1, % $1,250 $480 $391 $346 $2,467 Available 1, % $1,081 $415 $338 $299 $2,134 Mike's Barber % $617 $237 $193 $171 $1,217 Torero's 2, % $1,533 $588 $480 $424 $3,026 Koffee Kup 2, % $1,374 $527 $430 $380 $2,711 TOTAL 100% $67,553 $26,447 $18,872 $16,690 $46,863 $82,699 Notes: 1) Tenant reimburses $603/mo for CAM charges and Insurance. This amount increases by 1% per year. 2) Tenant reimburses Property taxes as a pro-rata of 12.79%. This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. VILLAGE CENTER 12

13 radius Demographics ABOUT COTTAGE GROVE Cottage Grove is located along Interstate 5, 20 miles south of Eugene and the University of Oregon. The city is situated in Lane County which has an estimated population of 352,010. The largest employers of Cottage Grove include South Lane School District, City of Cottage Grove, PeaceHealth Cottage Grove Community Hospital, Weyerhaeuser Company, Starfire Lumber, Pacific Yurts, Wal-Mart, Safeway and Kimwood Co. Popular industries include manufacturing, health and medical services, professional services, and a variety of agricultural businesses. Cottage Grove has been designated an Enterprise Zone by the state, offering incentives to businesses that expand or locate in the community. POPULATION 1-Mile 3-Miles 5-Miles ,137 13,184 16, ,243 13,510 16, ,371 13,881 16,947 HOUSEHOLD INCOMES 1-Mile 3-Miles 5-Miles Average $47,267 $51,851 $54,562 Median $35,744 $40,215 $42,063 EUGENE Village Center 1 MILE 25 Mins 21.2 Miles 3 MILES 5 MILES COTTAGE GROVE VILLAGE CENTER 13

14 Q&A With capital pacific Q: DO ANY TENANTS HAVE AN EXCLUSIVE USE CLAUSE OR A CO-TENANCY CLAUSE? A: No tenants at the Property have any exclusives or co-tenancy clauses. Q: HAS COTTAGE GROVE RECOGNIZED ANY POTENTIAL COMMERCIAL GROWTH DUE TO THE ENTERPRISE ZONE DESIGNATION? A: Yes, most recently PakTech, a plastic manufacturer, is relocating from Eugene to Cottage Grove in The company will take up an 89,000 square foot facility and is estimated to provide 200+ positions. Q: HAVE THERE BEEN ANY ENVIRONMENTAL STUDIES PERFORMED ON THE PROPERTY? A: Yes, a Phase I assessment was performed in April 2004 by National Assessment Corporation. Conclusions of the assessment were that the dry cleaner previously on-site presented no recognized environmental conditions, but a small amount of asbestos was detected in the Koffee Kup building, common of buildings built in that era. Recommendations were to do a complete survey for asbestos containing materials prior to doing any demolition or remodeling. Q: DO ANY TENANTS PAY PERCENTAGE RENT? A: Yes, Dollar Tree pays 3% of gross sales beyond a natural breakpoint. Further, Dollar Tree has a history of exceeding the percentage rent threshold. VILLAGE CENTER 14

15 Contact Information WE SELL COMMERCIAL REAL ESTATE BUT WE VALUE PEOPLE FOR MORE INFORMATION ON VILLAGE CENTER PLEASE CONTACT: KEVIN ADATTO (503) SCOTT FRANK (503) MICHAEL HORWITZ (503) PETER DUNN (503) DAVID GELLNER (206) SEAN MACK (503) SEAN TUFTS (206) Capital Pacific is a Commercial Real Estate Brokerage Firm specializing in Retail Investment Sales in the Pacific Northwest as well as Nationally. Our goal is to deliver results for our clients while providing a level of service that will earn repeat business. We have a very human approach that we call the Capital Pacific Experience - CPx. Our team works together on every single assignment, which ultimately benefits our clients. Today Capital Pacific has offices in Seattle, Portland & San Francisco. [ ]

16 [ Copyright 2017 Capital Pacific LLC ] The information contained in this document has been obtained from sources Capital Pacific believes to be reliable. Capital Pacific makes no representation or warranty in respect to its accuracy. It is your responsibility to confirm its accuracy and completeness.