University Square Carson, CA MacArthur Blvd., Suite 300 Irvine, CA Tel Fax

Transcription

1 University Square Carson, CA MacArthur Blvd., Suite 300 Irvine, CA Tel Fax

2 The material contained in this Investment Offering Brochure is furnished solely for the purpose of considering the purchase of University Square and is not to be used for any other purpose. This information should not, under any circumstances, be photocopied or disclosed to any third party without the written consent of REZA Investment Group Inc. or Owner, or used for any purpose whatsoever other than to evaluate the possible purchase of the Property. The only party authorized to represent the Property Owner ( Owner ) in connection with the sale of the Property is REZA Investment Group Inc., and no other person is authorized by the Owner to provide any information or to make any representations other than contained in this Investment Offering Brochure. If the person receiving these materials does not choose to pursue a purchase of the Property, this Offering Brochure must be returned to REZA Investment Group Inc. Neither REZA Investment Group Inc. nor the Owner make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein, and nothing contained herein is or shall be relied upon as a promise or representation as to the future performance of the Property. This Offering Brochure may include certain statements and estimates by REZA Investment Group Inc. with respect to the projected future performance of the Property. These Assumptions may or may not be proven to be correct, and there can be no assurance that such estimates will be achieved. Further, REZA Investment Group Inc. and the Owner disclaim any and all liability for representations or warranties, expressed or implied, contained in or omitted from this Investment Offering Brochure, or any other written or oral communication transmitted or made available to the recipient. The recipient shall be entitled to rely solely on those representations and warranties that may be made to it in any final, fully executed and delivered Real Estate Purchase Agreement between it and Owner. The information contained herein is subject to change without notice and the recipient of these materials shall not look to Owner or REZA Investment Group Inc., nor any of their officers, employees, representatives, independent contractors or affiliates, for the accuracy or completeness thereof. Recipients of this Investment Offering Brochure are advised and encouraged to conduct their own comprehensive review and analysis of the Property. This Investment Offering Brochure is a solicitation of interest only and is not an offer to sell the Property. The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest to purchase the Property and expressly reserves the right, at its sole discretion, to terminate negotiations with any entity, for any reason, at any time with or without notice. The Owner shall have no legal commitment or obligation to any entity reviewing the Investment Offering Brochure or making an offer to purchase the Property unless and until the Owner executes and delivers a signed Real Estate Purchase Agreement on terms acceptable to Owner, in Owner s sole discretion. By submitting an offer, a prospective purchaser will be deemed to have acknowledged the foregoing and agreed to release the Owner and REZA Investment Group Inc. from any liability with respect thereto. To the extent Owner or any agent of Owner corresponds with any prospective purchaser, any prospective purchaser should not rely on any such correspondence or statements as binding Owner. Only a fully executed Real Estate Purchase Agreement shall bind the property and each prospective purchaser proceeds at its own risk. 2

3 Table of Contents Executive Summary Property Overview Property Data Tenancy Property Highlights & Area Overview Site Plan Tenant Profiles Aerial Photo Location Map City Profile County Profile Lease Comparables Lease Comparables Lease Comparables Map 4 5 Financial Analysis Rent Roll 10 Year Cash Flow Argus Assumptions Performance Promissory Note Abstract Appendix Demographic Information Parcel Map 3

4 University Square Carson, CA Executive Summary

5 Property Overview Overview University Square is a recently constructed dd s (a Ross Dress For Less concept) anchored neighborhood shopping center that encompasses approximately 40,807 square feet of retail space in the dense and established Los Angeles South Bay community of Carson, CA. The property is prominently located at the intersection of S. Avalon Blvd. and E. Albertoni St. and is situated along the Artesia Freeway (California State Highway 91), with excellent freeway frontage, signage, and visibility. Investment highlights of this property include: Property Highlights Pride of Ownership asset with a strong anchor tenant draw Constructed in 2009, the Property is well maintained and is aesthetically attractive to both consumers and prospective tenants alike The in-place revenue stream within the property is largely derived from national/ regional tenants, which comprise approximately 89% of the in-place income stream Long-term lease structures, with approximately 88% of the occupied GLA in place through 2018 Tenant Highlights Excellent tenant mix within the discount retail and quick-service food categories Anchored by dd s Discounts, a Ross Dress For Less concept (lease is guaranteed by Ross). With approximately 115 stores nationwide (57 in California), dd s provides soft goods and merchandise at discount prices With FY 2012 revenues of $8.6 Billion, Ross Stores is a leading off-price apparel retailer in the U.S. Ranked #299 in the Fortune 500, the company operates approximately 1,125 locations in the U.S. With 15 locations throughout Southern California, El Pescador Restaurants have an established brand within the community. The location within the subject property boasts excellent sales revenues Other national and regional tenants include Panda Express, Fatburger, Subway, Ono Hawaiian BBQ, and Liberty Tax Service Location and Visibility Highlights Strong traffic counts, with average daily traffic counts of approximately 46,588 vehicles at the intersection of S. Avalon Blvd. and E. Albertoni St. Premier location, with visible frontage along the Artesia Freeway. The Artesia Freeway receives average daily traffic counts of approximately 196,000 vehicles at the Avalon Blvd. interchange A large freeway pylon sign provides excellent visibility for the center s tenants Multiple ingress/egress points directly into the center on S. Avalon Blvd. and E. Albertoni St. provide ease of access to the property Demographic Highlights The city of Carson is an established and infill submarket in the Los Angeles market. The property benefits from a large trade area, with a population over 172,050 residents and 662,162 residents within a three and five-mile radius, respectively University Square benefits from strong income demographics, with average household incomes of approximately $88,280 and $73,933 within a one and threemile radius of the property Approximately 42% of the local residents are of Hispanic descent (within a three-mile radius of the property). According to the Initiative for a Competitive Inner City (ICIC), the Hispanic market has the strongest purchasing power within urban locations, exceeding average U.S. household spending by approximately 20% With a current annual enrollment of approximately 14,670 students and faculty members, California State University Dominguez Hills is a significant economic driver within the area and is situated approximately ½ mile southeast of University Square. The subject property is one of the closest retail centers to the university and is frequented by both students and faculty members The Home Depot Center, a 125-acre, $150 Million sports and entertainment facility that hosts concerts and sporting events, is located on the California State Dominguez Hills campus and features a 27,000 seat main stadium. This regional facility is home to professional soccer clubs the Los Angeles Galaxy and Chivas USA and attracts significant consumer traffic to the trade area 5

6 Property Overview (cont d) Offering Highlights Price: $14,075,000 Occupancy: 97% As-Is Cap Rate: 6.75% As-Is Cash/Cash: 7.1% As-Is NOI: $949,964 Building Size: Loan Assumptions: Performance Promissory Note: 40,807 Sq. Ft. Buyer to assume existing loan subject to the following terms: Loan Amount: Approx. Balance (1/2014): Interest Rate: Amortization: Origination Date: Maturity Date: $8,500,000 $8,336, % 30 Years October 2012 September 2022 Non-Recourse note held by Guggenheim Partners The property is also subject to a Performance Promissory Note that does not have any cash payment, principal, or interest obligations unless the default mechanisms are triggered. Please refer to the Performance Promissory Note Abstract in the Financial Analysis section for further information. Major Tenants Sq. Ft. % of Project Expiration Dates DD's Discount (Ross Dress for Less Guaranty) 21, % Jan-20 El Pescador 6, % Jun-19 Fatburger 2, % Jan-19 Ono Hawaiian BBQ 2, % Jan-19 Panda Express 2, % Dec-18 El Burro Tacos & Beer 1, % May-19 Liberty Tax Service 1, % Apr-16 Cingular Staffing 1, % Nov-15 Subway 1, % Dec-18 Available 1, % 40,807 Property Data Location: Avalon Blvd., E. Albertoni St. NWC Avalon Blvd. and E. Albertoni St. Carson, CA Assessor s Parcel Number: Number of Buildings: 4 Land Size: 3.57 Acres Traffic Counts: 196,000 AADT Artesia Freeway (CA-91) 29,868 AADT Avalon Blvd. 16,720 AADT E. Albertoni St. Year Built: 2009 Rentable Squre Feet: 40,807 Avalon Blvd Albertoni St Gardena Fwy 6

7 University Square Carson, CA Property Highlights & Area Overview

8 Site Plan 91 Freeway Avalon Blvd Albertoni St Vacant 8

9 Tenant Profiles Logo Tenant Name No. of Locations Use Website Sales Market Capitalization dd's Discounts 1,125 Ross is a leading off-price retailer that sells mostly closeout merchandise, inlcuding men's, women's, and children's clothing, at prices well below those of department and speciality stores. It also sells small furnishings, toys and games, luggage, and jewelry. Ross also operates dd's Discounts, a chain of clothing and furniture stores, with prices below those of the main Ross Stores. $8.61 Billion NASDAQ(GS): ROST El Pescador 15 Fatburger 120+ Ono Hawaiian BBQ 45 Panda Express 1,537 Subway 38,984 Cingular Staffing 5 Liberty Tax Service 4,000+ For over 25 years, El Pescador Restaurants have been the place to find the best food, best live entertainment and the friendliest servers in town. They are a full service Mexican restaurant. Started in 1952, Fatburger is known for their signature 1/3 pound sandwich. They are cooked to order and use fresh ingredients. They are known as the "last great hamburger stand". Fatburger is located mostly in Southern California and has now spread to the rest of North America, Asia, Kuwait, China and Indonesia. Hawaii is a melting pot of ethnic cultures showing in its cuisine: a fusion of Hawaiian, Japanese, Korean, Chinese, and American dishes and Ono Hawaiian BBQ brings it to life. Their fresh ingredients and marinades are made from scratch. Panda Express is a fast casual restaurant serving American Chinese cuisine located in more than 44 states, Puerto Rico and Japan. The chain is primarily located in high-traffic locations, including malls, airports, sporting arenas, strip plazas, theme parks, and college campuses. It is the largest chain of Chinese fast food restaurants. Founded in 1965, Subway is a multi-national restaurant franchise (owned and operated by Doctor's Associates) that sells mainly sandwiches and salads. It is the largest single-brand restaurant chain globally and is the second largest restaurant operator globally. It operates 38,984 stores in 99 countries and territories. Cingular Staffing is a leader in providing workforce solutions. They offer a comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temporaryto-hire and direct-hire basis. Liberty Tax Service is a United States-based company specializing in the preparation of tax returns for individuals and small businesses. It currently stands as the third largest tax preparation franchise after 15 years of business. N/A Private N/A Private N/A Private $1.5 Billion Private N/A Private N/A Private N/A Private 9

10 Aerial Gardena Fwy (196,000 AADT) Cal State Dominguez Hills (Approx. 14,670 students & faculty) Avalon Blvd (29,868 AADT) Albertoni St (16,720 AADT) 10

11 Aerial (cont d) Albertoni St (16,720 AADT) Avalon Blvd (29,868 AADT) Gardena Fwy (196,000 AADT) 11

12 Location Map University Square 12

13 City Profile The city of Carson is located in Los Angeles County, California. Approximately 19 miles to the north is downtown Los Angeles, linked to Carson by Interstate Highway 110. Carson is primarily a manufacturing community. About half of its land mass is taken up by factories, refineries, and other industrial structures. After decades of existence as an unincorporated community of Los Angeles County, Carson was finally incorporated as a city in 1968 when its citizens took to the polls and voted to do so by a nearly 2-to- 1 margin. On the same date, by a much narrower vote, the citizens chose the name Carson for their new city over the name Dominguez (these were the two leading family names in the city s history). Following its incorporation, Carson acted quickly to enforce a strict landscaping and building code, resulting in modernizations and improvements in the city s industrial parks and overall appearance. Located in the South Bay section of Los Angeles County, Carson has grown from a population of 61,000 in 1968 to 92,376 in It is located 13 miles south of downtown Los Angeles and is known as a suburb of the city. While Carson is well known as an industrial center with unparalleled access to transportation and the Pacific Rim, it is also a culturally diverse community that is an attractive place to live and work. The city has more than 120 acres of park land divided into 12 parks, 2 mini-parks, and sports/ recreational facilities that include 3 swimming pools, a boxing center, a state-of-the-art sports complex and the Carson Community Center. These facilities allow the residents of Carson to enjoy a variety of sports, recreational and cultural programs. Carson is part of the Los Angeles Unified School District. Most notably, it is home to the California State University, Dominguez Hills. It is one the more racially diverse campuses in the United States. Carson is also home to the California Academy for Math & Science which was rated in Newsweek Magazine as one of the top 20 high schools in the country. It also the location of the Home Depot Center, a sports complex including a soccerspecific stadium used by the Los Angeles Galaxy, the Los Angeles Sol, and Chivas USA, a tennis stadium and a track and field facility. It is also the default home ground for the United States men s national soccer team. Home Depot Center 13

14 County Profile Los Angeles County, one of California s original 27 counties, was established Feb. 18, 1850, is the largest international trade center in the United States. It is also a national leader in manufacturing and distribution. Originally the County occupied a comparatively small area along the coast between Santa Barbara and San Diego, but within a year its boundaries were enlarged from 4,340 square miles to 34,520 square miles, an area sprawling east to the Colorado River. During subsequent years, Los Angeles County slowly ebbed to its present size, the last major detachment occurring in 1889 with the creation of Orange County. Los Angeles County remains one of the nation s largest counties with 4,084 square miles, an area some 800 square miles larger than the combined area of the states of Delaware and Rhode Island. Los Angeles County includes the islands of San Clemente and Santa Catalina. It is bordered on the east by Orange and San Bernardino Counties, on the north by Kern County, on the west by Ventura County, and on the south by the Pacific Ocean. Its coastline is 81 miles long. The County has the largest population (9,962,789) of any county in the nation, and is exceeded by only seven states. Approximately 27 percent of California residents reside in Los Angeles County. There are 88 cities within the County, each with its own city council. More than 65 percent of the County is unincorporated. The County adopted budget is approximately $ billion. Twenty-one percent of the revenue comes from the state, 21% from the federal government, 19% from property taxes, and 39% from other sources. The largest percentage - 23% - of the budget goes to pay for social services, while 19% is spent on public protection and 23% on health services. The cost of living in Los Angeles is lower than in other major U.S. cities, including San Francisco, Boston, New York, Washington, D.C. and Chicago. (LA s Business Team) Los Angeles International Airport (LAX) is the largest origin and destination (i.e. non-connecting flights) airport in the world, and the sixth largest in terms of total passenger volume. Also, LAX is one of the busiest cargo airports in the world. L.A. County also has two smaller airports with regularly scheduled domestic service: Long Beach (LGB) and Bob Hope (BUR) in Burbank. (LAEDC) International trade is a major driver of the area s economy. The Los Angeles Customs District which includes the ports of Long Beach and Los Angeles, Port Hueneme, and Los Angeles International Airport is the nation s largest. Los Angeles County has a labor force of 4,839,900 people. (Labor Market Information Division, EDD) Small companies account for 99.4% of all businesses that pay taxes in Los Angeles County, and they employ more than 70% of the county s 4.8 million payroll workers. (State of California) The County, with 101,296 budgeted employees and 37 departments, is the largest employer in the five-county region. Of these, 31,568 of the positions are in law and justice; 28,772 are in health services; and 21,405 are in social services. Economic & Business Climate The tourism industry in Los Angeles County attracted approximately 41.4 million visitors and generated approximately $16.5 billion in visitor spending and $30.5 billion in total economic impact in 2012 (Los Angeles Convention and Visitors Bureau) Los Angeles is the largest manufacturing center in the US. The most important sectors are apparel, computer and electronic products, transportation products, fabricated metals, food products, aerospace products and parts and search, detection and navigation products and furniture. If it were a separate state, the county would be the eighth largest manufacturing state in the union. (LAEDC) 14

15 County Profile (cont d) Demographic Profile for the Los Angeles Metropolitan Area Total Population Households 2000 Total 9,519,338 3,133, Total 9,818,605 3,445, Total 9,962,789 3,449,273 Persons Under 18 years, Percent, % Bachelor's Degree or Higher, % of Persons Age 25+, % Home Ownership Rate, % Median Household Income Income 2008 Median Household Income $55, Median Household Income $56,266 Airports Passengers per day Los Angeles Int'l Airport (LAX) 154,112 Employment by Occupation Industry Percentage Management 4.8 Business and financial operations 4.8 Computer and mathematical 2.7 Architecture and engineering 1.8 Life, physical, and social science 0.8 Community and social services 1.5 Legal 0.8 Education, training, and library 6.6 Arts, design, entertainment, sports, and media 1.3 Industry Percentage Healthcare practitioner and technical 5.9 Healthcare support 3.1 Protective service 2.5 Food preparation and serving related 8.7 Building and grounds cleaning and maintenance 3.3 Personal care and service 2.8 Sales and related 10.6 Office and administrative support 16.7 Farming, fishing, and forestry 0.3 Construction and extraction 3.9 Installation, maintenance, and repair 3.9 Production 6.5 Transportation and material moving 6.7 Sources: AnySite Corporationk Discover Los Angeles, Ca Dept of Trans, Los Angeles International Airport, LAEDC 15

16 University Square Carson, CA Lease Comparables

17 Lease Comparables Property Address Year Built Total Sq. Ft. Vacant Sq. Ft. Percent Vacant Asking/Average Rents/SF Lease Type Tenants Photos 1 South Bay Plaza E. Dominguez St. and Bonita St E. Dominguez St. Carson, CA 1978 *recent remodel 44,044 2,018 5% $3.00 NNN El Taco Charro, Jerry s Cleaners, House of Seafood, Pho King Way, Carson-Avalon Dialysis 2 Carson Plaza E. University Dr. and Avalon Blvd E. University Dr. Carson, CA ,838 10,780 13% $2.50 NNN Ralphs, Crown Drugs, Domino s Pizza, Baskin Robbins, Curves, Newstar Nails, Jackson Hewitt Financial 3 Torrance Western Shopping Center (Corner Pad) S. Western Ave. and W. 182nd St S. Western Ave. Torrance, CA 2013 *new pad 37,235 3,192 9% $3.35 NNN 99 Cents Only, 7-11, Subway Kula Sushi, Kaizen Karate * Property Averages 54,039 5,330 9% $

18 Lease Comparables Map University Square

19 University Square Carson, CA Financial Analysis

20 Rent Roll Tenant Name Type & Suite Number Lease Dates & Term DD s Discount Retail, Suite: A1 Jun-2009 to Jan Months Floor SqFt Bldg Share 21, % Rate & Amount per Year per Month $14.50 $314,650 $1.21 $26,221 Changes on Changes to Description of Operating Expense Reimbursements Imprvmnts Rate Amount Commssns Rate Amount Assumption about subsequent terms for this tenant Jun-2014 $15.00 See method: DD s - - Option $15 MLA Notes: Note: Lease is Guaranteed by Ross Dress For Less. This lease does not have their standard 5 year kick-out clause. Prop. 13: Tenant not responsible for increase in property taxes on more than 2 change of ownership assessments during intital term and more than 1 during each option. DD s Discount Option, Suite: A1 Feb-2020 to Jan Months 21, % Notes: Options: Tenant has 4-5 Yr. options at the above rates Panda Express Retail, Suite: B1 Dec-2008 to Dec Months Panda Express Option, Suite: B1 Jan-2019 to Dec Months 2, % 2, % Notes: Options: Tenant has 4-5 Yr. options at the above rates Ono Hawaiian BBQ Retail, Suite: B2 Jan-2014 to Jan Months 2, % $16.00 $347,200 $1.33 $28,933 $46.20 $92,400 $3.85 $7,700 $50.82 $101,640 $4.24 $8,470 $31.80 $63,854 $2.65 $5,321 Feb-2025 Feb-2030 Feb-2035 Jan-2024 Jan-2029 Jan-2034 Notes: Rent Commencement starts Feb Used Jan to include 1 full year of income in Argus. Ono Hawaiian BBQ Option, Suite: B2 Feb-2019 to Jan Months 2, % Notes: Options: Tenant has 2-5 Yr. options at the above rates Fatburger Retail, Suite: B3 Jan-2009 to Jan Months Fatburger Option, Suite: B3 Feb-2019 to Jan Months 2, % 2, % Notes: Options: Tenant has 3-5 Yr. options at the above rates $36.00 $72,288 $3.00 $6,024 $38.40 $84,480 $3.20 $7,040 $48.17 $105,972 $4.01 $8,831 $17.00 $18.00 $ See method: NNN - 15% Admin. (C) $55.90 $61.49 $67.64 See method: DD s - - Market $15 MLA See method: NNN - 15% Admin. (C) - - See method: NNN - 15% Admin. (C) Feb-2024 $40.32 See method: NNN - 15% Admin. (C) Feb-2014 $43.01 See method: Fatburger Feb-2024 Feb-2029 $53.95 $60.42 See method: Fatburger - - Option $36 MLA - - Market $36 MLA - - Option $36 MLA - - Market $36 MLA - - Option $36 MLA - - Market $36 MLA 20

21 Rent Roll (cont d) Tenant Name Type & Suite Number Lease Dates & Term Floor SqFt Bldg Share Rate & Amount per Year per Month Changes on Changes to Description of Operating Expense Reimbursements Imprvmnts Rate Amount Commssns Rate Amount Assumption about subsequent terms for this tenant 5 El Pescador Retail, Suite: C Jul-2009 to Jun Months 6, % $36.86 $239,806 $3.07 $19,984 Dec-2014 Dec-2015 Dec-2016 Dec-2017 Dec-2018 $37.97 $39.11 $40.28 $41.49 $42.74 See method: NNN - 8% Admin. (C,T,I) - - Option $36 MLA 5 El Pescador Option, Suite: C Jul-2019 to Jun Months 6, % $42.74 $278,001 $3.56 $23,167 Dec-2019 Dec-2020 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025 Dec-2026 Dec-2027 Dec-2028 Dec-2029 Dec-2030 Dec-2031 Dec-2032 Dec-2033 Dec-2034 Dec-2035 Dec-2036 Dec-2037 Dec-2038 $44.02 $45.34 $46.70 $48.10 $49.54 $51.03 $52.56 $54.14 $55.76 $57.43 $59.16 $60.93 $62.76 $64.64 $66.58 $68.58 $70.64 $72.76 $74.94 $77.19 See method: NNN - 8% Admin. (C,T,I) - - Market $36 MLA Notes: Options: Tenant has 4-5 Yr. options at the above rates 6 El Burro Tacos & Beer Retail, Suite: D1 Dec-2008 to May Months 1, % $49.44 $74,556 $4.12 $6,213 Dec-2014 Dec-2015 Dec-2016 Dec-2017 Dec-2018 $50.92 $52.45 $54.02 $55.65 $57.31 See method: NNN - 15% Admin. (C,I) - - Option $36 MLA 6 El Burro Tacos & Beer Option, Suite: D1 Jun-2019 to May Months 1, % $57.31 $86,430 $4.78 $7,203 Dec-2019 Dec-2020 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025 Dec-2026 Dec-2027 Dec-2028 $59.03 $60.80 $62.63 $64.51 $66.44 $68.44 $70.49 $72.60 $74.78 $77.03 See method: NNN - 15% Admin. (C,I) - - Market $36 MLA Notes: Options: Tenant has 2-5 Yr. options at the above rates 21

22 Rent Roll (cont d) Tenant Name Type & Suite Number Lease Dates & Term Subway Retail, Suite: D2 Dec-2008 to Dec Months Floor SqFt Bldg Share 1, % Rate & Amount per Year per Month $41.39 $47,437 $3.45 $3,953 Changes on Dec-2014 Dec-2015 Dec-2016 Dec-2017 Dec-2018 Notes: Scheduled Rent Increases: Tenant has annual CPI increase w/ a maximum of 4%. Used 3% above. Subway Option, Suite: D2 Jan-2019 to Dec Months 1, % $47.99 $54,993 $4.00 $4,583 Dec-2019 Dec-2020 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025 Dec-2026 Dec-2027 Dec-2028 Notes: Options: Tenant has 2-5 Yr. options at annual CPI increase w/ a maximum of 4%. Used 3% above. Available Retail, Suite: D3 Jan-2015 to Dec Months Cingular Staffing Retail, Suite: D4-A Dec-2010 to Nov Months Cingular Staffing Option, Suite: D4-A Dec-2015 to Nov Months 1, % 1, % 1, % Notes: Options: Tenant has 1-5 Yr. options at the above rates Liberty Tax Service Retail, Suite: D4-B Mar-2013 to Apr Months 1, % Total Occupied SqFt 39,691 Total Available SqFt 1,116 $32.96 $36,783 $2.75 $3,065 $27.86 $33,438 $2.32 $2,786 $29.56 $35,474 $2.46 $2,956 $16.20 $23,069 $1.35 $1,922 Jan-2016 Jan-2017 Jan-2018 Jan-2019 Changes to $42.64 $43.91 $45.23 $46.59 $47.99 $49.43 $50.91 $52.44 $54.01 $55.63 $57.30 $59.02 $60.79 $62.61 $64.49 $33.95 $34.97 $36.02 $37.10 Description of Operating Expense Reimbursements See method: NNN - 10% Admin. (C,I) See method: NNN - 10% Admin. (C,I) See method: NNN - 15% Admin. (C,I) Dec-2014 $28.70 See method: NNN - 15% Admin. (C,I) Dec-2016 Dec-2017 Dec-2018 Dec-2019 Mar-2014 Mar-2015 Mar-2016 $30.45 $31.36 $32.30 $33.27 $16.69 $17.19 $17.70 See method: NNN - 15% Admin. (C,I) See method: NNN - 15% Admin. (C) Imprvmnts Rate Amount Commssns Rate Amount Assumption about subsequent terms for this tenant - - Option $36 MLA - - Market $36 MLA - - Market $32F MLA - - Option $27 MLA - - Market $27 MLA - - Market $18 MLA 22

23 10 Year Income & Expense For the Years Ending Year 1 Dec-2014 Year 2 Dec-2015 Year 3 Dec-2016 Year 4 Dec-2017 Year 5 Dec-2018 Year 6 Dec-2019 Year 7 Dec-2020 Year 8 Dec-2021 Year 9 Dec-2022 Year 10 Dec-2023 Year 11 Dec-2024 Potential Gross Revenue Base Rental Revenue $1,026,589 $1,045,621 $1,061,023 $1,075,961 $1,090,949 $1,133,767 $1,171,004 $1,186,734 $1,201,987 $1,217,954 $1,264,173 Absorption & Turnover Vacancy (35,712) (4,532) (10,331) (8,575) Scheduled Base Rental Revenue 990,877 1,045,621 1,056,491 1,075,961 1,090,949 1,133,767 1,160,673 1,178,159 1,201,987 1,217,954 1,264,173 Expense Reimbursement Revenue Trash Removal(3 bins) Trash Removal(1 bin) Debris Pickup/Hauling Repairs & Maintenance Dayporter Roads & Grounds Parking Lot Sweeping Utilities(Elec. & Water) Property Taxes Insurance - General Liab. Insurance - Property 20,908 7, ,649 10,832 10,888 1,810 17, ,053 3,650 5,196 22,907 7, ,495 11,485 11,539 1,865 18, ,446 3,879 5,521 23,294 7, ,836 11,757 11,815 1,921 18, ,957 3,985 5,670 24,300 7, ,377 12,182 12,243 1,978 19, ,861 4,136 5,889 25,031 8, ,840 12,548 12,614 2,038 20, ,829 4,262 6,064 25,780 8, ,316 12,927 12,989 2,099 20, ,972 4,389 6,247 26,147 8, ,674 13,216 13,282 2,162 21, ,792 4,484 6,385 26,856 8, ,152 13,596 13,662 2,227 21, ,986 4,613 6,565 28,172 9, ,828 14,125 14,194 2,293 22, ,537 4,795 6,827 29,016 9, ,364 14,548 14,620 2,362 23, ,450 4,939 7,033 29,887 9, ,915 14,985 15,058 2,433 24, ,575 5,087 7,243 Total Reimbursement Revenue 268, , , , , , , , , , ,194 Total Potential Gross Revenue 1,259,422 1,330,828 1,348,407 1,378,580 1,402,659 1,454,824 1,488,805 1,515,663 1,552,817 1,579,309 1,636,367 General Vacancy (43,401) (39,768) (45,370) (46,356) (48,739) (39,397) (42,079) (51,837) (52,908) (55,500) Effective Gross Revenue 1,259,422 1,287,427 1,308,639 1,333,210 1,356,303 1,406,085 1,449,408 1,473,584 1,500,980 1,526,401 1,580,867 Operating Expenses Trash Removal(3 bins) Trash Removal(1 bin) Debris Pickup/Hauling Repairs & Maintenance Dayporter Roads & Grounds Parking Lot Sweeping Utilities(Elec. & Water) Property Taxes Insurance - General Liab. Insurance - Property HVAC Maint.-DD s(nr) Property Management(NR) 19,800 6, ,510 10,080 10,130 3,120 17, ,456 3,673 5,229 1,600 38,040 20,394 6, ,915 10,382 10,434 3,214 17, ,870 3,783 5,386 1,648 39,181 21,006 7, ,333 10,694 10,747 3,310 18, ,446 3,897 5,547 1,697 40,357 21,636 7, ,763 11,015 11,069 3,409 18, ,189 4,014 5,714 1,748 41,567 Total Operating Expenses 309, , , , , , , , , , ,886 Net Operating Income 949, , , ,057 1,008,006 1,047,338 1,079,899 1,092,989 1,108,968 1,122,627 1,164,981 22,285 7, ,206 11,345 11,401 3,512 19, ,105 4,134 5,885 1,801 42,814 22,954 7, ,662 11,685 11,743 3,617 19, ,198 4,258 6,062 1,855 44,099 23,642 7, ,132 12,036 12,096 3,725 20, ,474 4,386 6,244 1,910 45,422 24,352 8, ,616 12,397 12,459 3,837 21, ,938 4,517 6,431 1,968 46,784 25,082 8, ,114 12,769 12,832 3,952 21, ,596 4,653 6,624 2,027 48,188 25,835 8, ,627 13,152 13,217 4,071 22, ,454 4,792 6,823 2,088 49,634 26,610 8, ,156 13,547 13,614 4,193 22, ,518 4,936 7,027 2,150 51,123 23

24 Argus Assumptions Analysis Period Commencement Date January 2014 Term 10 Years Area Measures Building Square Feet 40,807 Inflation Rates General 3% Annually Operating Expenses All expenses have been taken from the 2013 Budget with management set at 3% of the Effective Operating Income and property taxes adjusted to 1.228% of $14,075,000. Ownership currently has Earthquake Insurance through a master policy, did not include in this analysis, DD s does not reimburse for Earthquake Insurance. All expenses inflated at annual 3%. General Vacancy Loss First year is actual vacancy. Years 2 through 10 are 5% of the potential gross revenue excluding DD s Discount. Renewals/Expirations Several tenants have options to renew after their initial lease period. For tenants with options, their option terms have been applied once the tenant s primary term ends. The speculative renewal is applied at the termination of all tenants primary and option terms (if applicable). Market Leasing Assumptions Lease Retention Ratio 75% Rent Adjustments Annual 3% Inc. Downtime 6 months (which equates to 2 months vacant) Rent Abatement - None Reimbursement Method* NNN 15% Admin CI Lease Term 5 Years Tenant Improvements - $20/$0SF (New/Renewal) Leasing Commissions 4%/0% Rent (New/Renewal) * NNN 15% Admin CI - tenants pay their respective prorata share of operating expenses as well as a 15% admin fee, which is charged to cam and insurance. Property Purchase & Resale IRR Calculations Purchase Price: $14,075,000 Resale Method: Capitalize Net Operating Income Resale Cap Rate: 6.75% Cap Year: Year 11 24

25 Performance Promissory Note Abstract Existence of Performance Promissory Note between Seller and Carson Redevelopment Agency, a public body, corporate and politic ( Agency ), in accordance with that certain Disposition and Development Agreement dated as of May 18, 2006 (the Agreement ) by and between Seller and Agency. Current note balance is $600, (Six hundred thousand dollars). Maturity Date is October 1, Each October 1st (the anniversary of the issuance of the certificate of occupancy for the El Pescador Restaurant), a credit of $300,000 of the remaining Note Amount shall be given, subject to the El Pescador Restaurant remaining in operation and open for business for the entire year for which credit is to be given, i.e. the previous twelve (12) months. In the event El Pescador Restaurant closes for business for longer than a ten (10) day period, exclusive of legal holidays, then Seller shall have up to six (6) months to find a replacement restaurant acceptable to the Agency and the new restaurant shall be in operation within one hundred and twenty (120) days of its approval. Credits shall only be given for full years of operation. In the event of a closure and new restaurant the Maturity Date shall be extended by the time needed to obtain a new approved restaurant and make it operational, however, said time shall not exceed the combination of the six (6) months to find a replacement and the additional four (4) months for the new restaurant to become operational. No cash payments of principal or interest shall be due hereunder during the term of this Note unless the Note is accelerated due to an Event of Default under the Agreement has occurred. Except as hereinafter provided, on the Maturity Date all outstanding sums of unpaid principal thereon shall be due and payable by Seller. In summary, if El Pescador Restaurant continues operating through October 1, 2015 the Note balances the following years will be: October 1, $300,000 October 1, $0.00 Seller will indemnify and hold Buyer harmless from any and all payments made by Buyer to the Agency under the Performance Promissory Note. Please contact listing broker for additional details. 25

26 University Square Carson, CA Appendix

27 Demographics POPULATION 1 mile 3 mile 5 mile 2011 Male Population 6,364 83, , Female Population 7,402 88, ,132 % 2011 Male Population 46.23% 48.36% 49.09% % 2011 Female Population 53.77% 51.64% 50.91% 2011 Total Adult Population 10, , , Total Daytime Population 23, , , Total Daytime Work Population 17, , , Median Age Total Population Median Age Adult Population Age ,404 37, Age ,905 46, Age ,857 22,592 88, Age ,322 19,983 79, Age ,926 22,707 95, Age ,978 41, Age ,590 39, Age ,719 38, Age ,700 37, Age ,098 34, Age ,274 30, Age ,638 25, Age ,684 20, Age ,365 15, Age ,451 12, Age ,309 9, Age ,060 6, Age ,596 4,931 % 2011 Age % 4.88% 5.67% % 2011 Age % 6.34% 7.04% % 2011 Age % 13.13% 13.41% % 2011 Age % 11.61% 11.94% % 2011 Age % 13.20% 14.44% POPULATION 1 mile 3 mile 5 mile % 2011 Age % 5.80% 6.28% % 2011 Age % 5.57% 5.93% % 2011 Age % 5.65% 5.82% % 2011 Age % 5.64% 5.59% % 2011 Age % 5.29% 5.22% % 2011 Age % 4.81% 4.57% % 2011 Age % 4.44% 3.86% % 2011 Age % 3.88% 3.10% % 2011 Age % 3.12% 2.29% % 2011 Age % 2.59% 1.81% % 2011 Age % 1.92% 1.37% % 2011 Age % 1.20% 0.92% % 2011 Age % 0.93% 0.74% 2011 White Population 3,085 38, , Black Population 6,349 56, , Asian/Hawaiian/Pacific Islander 1,537 30,901 96, American Indian/Alaska Native , Other Population (Incl 2+ Races) 2,741 45, , Hispanic Population 4,502 71, , Non-Hispanic Population 9, , ,206 % 2011 White Population 22.41% 22.35% 28.54% % 2011 Black Population 46.12% 32.67% 24.64% % 2011 Asian/Hawaiian/Pacific Islander 11.16% 17.96% 14.58% % 2011 American Indian/Alaska Native 0.40% 0.58% 0.64% % 2011 Other Population (Incl 2+ Races) 19.91% 26.44% 31.59% % 2011 Hispanic Population 32.70% 41.51% 50.89% % 2011 Non-Hispanic Population 67.30% 58.49% 49.11% 2000 Non-Hispanic White 1,457 15,157 73, Non-Hispanic Black 5,829 58, , Non-Hispanic Amer Indian/Alaska Native , Non-Hispanic Asian ,778 77, Non-Hispanic Hawaiian/Pacific Islander 157 1,573 6,316 Source: Claritas 27

28 Demographics (cont d) POPULATION 1 mile 3 mile 5 mile 2000 Non-Hispanic Some Other Race , Non-Hispanic Two or More Races 259 3,790 13,871 % 2000 Non-Hispanic White 16.98% 14.20% 20.91% % 2000 Non-Hispanic Black 67.94% 54.94% 50.46% % 2000 Non-Hispanic Amer Indian/Alaska Native 0.34% 0.42% 0.47% % 2000 Non-Hispanic Asian 9.30% 25.10% 21.99% % 2000 Non-Hispanic Hawaiian/Pacific Islander 1.83% 1.47% 1.80% % 2000 Non-Hispanic Some Other Race 0.59% 0.31% 0.41% % 2000 Non-Hispanic Two or More Races 3.02% 3.55% 3.95% Population Change 1 mile 3 mile 5 mile Total Employees n/a n/a n/a Total Establishemnts n/a n/a n/a 2011 Total Population 13, , , Total Households 3,988 51, ,572 Population Change ,684 12,961 78,511 Household Change ,607 9,988 % Population Change % 8.15% 13.45% % Household Change % 5.30% 5.66% Population Change ,091 4,897 28,262 Household Change ,053 4,645 % Population Change % 2.93% 4.46% % Households Change % 2.07% 2.55% Housing 1 mile 3 mile 5 mile 2000 Total Housing Units 3,706 52, , Occupied Housing Units 3,621 50, , Owner Occupied Housing Units 3,163 31,307 96, Renter Occupied Housing Units ,373 85, Vacant Housing Units 85 1,941 8,583 % 2000 Occupied Housing Units 97.71% 96.31% 95.50% % 2000 Owner Occupied Housing Units 85.35% 59.50% 50.51% % 2000 Renter Occupied Housing Units 12.36% 36.82% 44.98% % 2000 Vacant Housing Units 2.29% 3.69% 4.50% Income 1 mile 3 mile 5 mile 2011 Median Household Income $63,208 $54,008 $47, Per Capita Income $25,575 $22,269 $18, Average Household Income $88,280 $73,933 $67, Household Income < $10, ,467 13, Household Income $10,000-$14, ,504 11, Household Income $15,000-$19, ,657 11, Household Income $20,000-$24, ,587 10, Household Income $25,000-$29, ,080 11, Household Income $30,000-$34, ,633 10, Household Income $35,000-$39, ,489 10, Household Income $40,000-$44, ,844 9, Household Income $45,000-$49, ,679 8, Household Income $50,000-$59, ,917 15, Household Income $60,000-$74, ,668 19, Household Income $75,000-$99, ,957 23, Household Income $100,000-$124, ,910 12, Household Income $125,000-$149, ,774 7, Household Income $150,000-$199, ,711 6, Household Income $200,000-$249, , Household Income $250,000-$499, , Household Income $500, Household Income $200, ,469 % 2011 Household Income < $10, % 4.76% 7.04% % 2011 Household Income $10,000-$14, % 4.83% 6.39% % 2011 Household Income $15,000-$19, % 5.13% 5.94% % 2011 Household Income $20,000-$24, % 4.99% 5.81% % 2011 Household Income $25,000-$29, % 5.94% 6.24% % 2011 Household Income $30,000-$34, % 5.08% 5.75% % 2011 Household Income $35,000-$39, % 4.80% 5.60% % 2011 Household Income $40,000-$44, % 5.49% 5.23% % 2011 Household Income $45,000-$49, % 5.17% 4.63% % 2011 Household Income $50,000-$59, % 9.49% 8.57% Source: Claritas 28

29 Demographics (cont d) Income 1 mile 3 mile 5 mile % 2011 Household Income $60,000-$74, % 12.87% 10.53% % 2011 Household Income $75,000-$99, % 13.42% 12.34% % 2011 Household Income $100,000-$124, % 7.55% 6.67% % 2011 Household Income $125,000-$149, % 5.35% 4.16% % 2011 Household Income $150,000-$199, % 3.30% 3.24% % 2011 Household Income $200,000-$249, % 0.90% 0.95% % 2011 Household Income $250,000-$499, % 0.88% 0.81% % 2011 Household Income $500, % 0.05% 0.10% % 2011 Household Income $200, % 1.82% 1.86% Retail Sales Volume 1 mile 3 mile 5 mile 2011 Children/Infants Clothing Stores $1,756,088 $20,849,733 $69,605, Jewelry Stores $1,322,885 $15,665,264 $52,215, Mens Clothing Stores $2,586,079 $31,108,928 $104,404, Shoe Stores $2,420,849 $28,875,747 $96,396, Womens Clothing Stores $4,663,909 $55,898,436 $186,478, Automobile Dealers $35,120,795 $393,942,044 $1,271,579,096 Retail Sales Volume 1 mile 3 mile 5 mile 2011 Furniture Stores $3,196,347 $37,293,812 $123,087, Home Furnishings Stores $1,892,484 $22,984,979 $77,886, Gen Merch/Appliance/Furniture Stores $28,001,868 $329,663,141 $1,093,869, Gasoline Stations w/ Convenience Stores $18,459,340 $203,555,572 $706,954, Other Gasoline Stations $13,106,647 $161,198,029 $548,319, Department Stores excl Leased Depts $30,953,442 $365,186,150 $1,212,957, General Merchandise Stores $24,805,519 $292,369,333 $970,782, Other Health/Personal Care Stores $2,228,767 $25,198,331 $81,827, Pharmacies/Drug Stores $10,886,377 $126,157,949 $415,448, Pet/Pet Supplies Stores $1,563,495 $18,208,078 $59,923, Book/Periodical/Music Stores $391,814 $5,775,940 $20,844, Hobby/Toy/Game Stores $893,632 $8,583,147 $25,163, Musical Instrument/Supplies Stores $300,446 $3,443,936 $11,249, Sewing/Needlework/Piece Goods Stores $83,824 $1,092,224 $3,805, Sporting Goods Stores $1,232,371 $17,498,878 $63,900, Video Tape Stores - Retail $255,971 $2,999,735 $9,923, Automotive Parts/Acc/Repair Stores $4,061,043 $47,248,227 $155,817, Other Motor Vehicle Dealers $1,182,889 $14,104,593 $47,190, Tire Dealers $1,096,740 $12,740,343 $41,936, Hardware Stores $513,385 $6,020,700 $20,818, Home Centers $3,579,984 $40,299,744 $131,042, Nursery/Garden Centers $1,163,695 $13,390,786 $43,958, Outdoor Power Equipment Stores $498,923 $5,145,532 $15,802, Paint/Wallpaper Stores $143,986 $1,581,476 $5,054, Appliance/TV/Other Electronics Stores $2,951,575 $35,523,006 $119,087, Camera/Photographic Supplies Stores $513,014 $5,980,735 $19,766, Computer/Software Stores $1,589,094 $18,401,358 $60,350, Beer/Wine/Liquor Stores $1,888,227 $22,497,676 $75,292, Convenience/Specialty Food Stores $5,352,691 $42,357,539 $158,635, Restaurant Expenditures $20,851,727 $189,680,898 $655,951, Supermarkets/Other Grocery excl Conv $22,516,818 $261,439,364 $861,627,705 Source: Claritas 29

30 Parcel Map 30

31 18662 MacArthur Blvd., Suite 300, Irvine, CA Tel Fax