REPRESENTATIVE PHOTO. Terry Lane Retail Center GRANTS PASS, OREGON

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1 REPRESENTATIVE PHOTO Terry Lane Retail Center GRANTS PASS, OREGON

2 Overview Terry Lane Retail Center 1829 NE FAIRVIEW AVE, GRANTS PASS, OR REPRESENTATIVE PHOTO

3 PAGE 3 Investment Summary LEASEABLE SF 10,199 SF LAND AREA 1.23 Acres OCCUPANCY 100% AVG CURRENT RENTS $35.74 YEAR BUILT 2018 (Under Construction)* *Construction scheduled for 10/1/2018 completion. PARKING 81 Spaces; 8.0/1,000 SF $5,740,000 PRICE 6.00% CAP THE OFFERING provides the opportunity to acquire a brand new, high quality retail center fully-occupied by four national brands MOD Pizza, Aspen Dental, Jersey Mike s, and Batteries + Bulbs. All four tenants signed 10-year NNN leases with scheduled rent increases in the initial term. The Property has frontage on a highly-trafficked arterial within the city s premier shopping district along Redwood Highway, and benefits from strong daily draws provided by an adjacent WinCo Foods-anchored retail center and Grants Pass Shopping Center, a multi-anchor destination center.

4 Investment Highlights The Highlights 100% LEASED TO FOUR NATIONAL TENANTS ON BRAND NEW 10-YEAR LEASES WITH RENT GROWTH. STRONG TENANT LINEUP LEASED TO MOD PIZZA, ASPEN DENTAL, JERSEY MIKE S, AND BATTERIES + BULBS. HIGH QUALITY NEW CONSTRUCTION WITH OPTIMAL PARKING RATIOS. MAJOR DAILY DRAW TO THE TRADE AREA PROVIDED BY ADJACENT WINCO AND NEARBY WALMART, FRED MEYER, AND GRANTS PASS SHOPPING CENTER.

5 PAGE 5 SUPERB ACCESS CONNECTING DIRECTLY TO INTERSTATE-5 CONVENIENTLY LOCATED ONE HALF-MILE EAST. EXPOSED TO OVER 27,500 VPD WITH FRONTAGE ON REDWOOD HIGHWAY (US ROUTE 99). NEIGHBORING WALMART, FRED MEYER & WINCO ARE REPORTEDLY TOP PERFORMING LOCATIONS FOR EACH GROCER IN THE STATE. JERSEY MIKE S IS OPERATED BY A PROMINENT RESTAURANT FRANCHISEE OVERSEEING A LARGE JERSEY MIKE S AND CARL S JR. PORTFOLIO, INCLUDING ADJACENT CARL S JR. Investment Highlights

6 About the Tenants MOD PIZZA MOD PIZZA is recognized as one of the fastest-growing restaurants and earned Best Workplace for Millennials 2018 by Fortune, and was included in the America s Fastest-Growing Private Companies list of 2018 by Inc MOD Pizza is a fast-casual restaurant with a total of 330 locations, of which 110 were added in 2017, making it the second consecutive year MOD has grown by 100-plus stores. ASPEN DENTAL ASPEN DENTAL is one of the largest and fastest-growing dental support organizations (DSO) in the U.S. with 700 locations employing an estimated 8,000 dentists and team members. Aspen Dental is a subsidiary of investment-grade Ares Management, L.P. (S&P: BBB+), a leading global alternative asset management company with $100 billion in assets, as well as Leonard Green & Partners, L.P., and American Securities, LLC, both leading U.S. private equity investment firms. JERSEY MIKE S JERSEY MIKE S is a national sandwich chain founded 62+ years ago in New Jersey and is recognized as one of the strongest franchise systems with 16% growth between The Lessee is JCK Subs Inc., a prominent multi-unit restaurant operator overseeing approximately six Jersey Mike s and dozens of Carl s Jr. locations throughout the PNW, and is the son of Carl Karcher, the founder of Carl s Jr. BATTERIES + BULBS BATTERIES + BULBS is a national retailer specializing in the sale of batteries/bulbs and cell phone repair. Batteries + Bulbs increased their footprint by 12% in 2017 with 26 new stores and plans to open 47 additional stores in 2018, marking 29 consecutive years of growth. The Lessee is Specific Energy Corporation overseeing two-plus locations in Southern Oregon; Tenant s lease includes two personal guaranty s.

7 PAGE 7 About the Tenants

8 Surrounding Retail Business Summary TOTAL 1-MILE 3-MILES 5-MILES Businesses 1,065 2,154 2,380 Employees 12,167 22,680 23,737 Population 9,353 36,488 50,930 KEY 1-MILE 3-MILES 5-MILES MAJOR RETAIL Applebee s AT&T Big 5 Sporting Goods Big Lots Carl s Jr. Dollar Tree Fred Meyer GameStop Grocery Outlet Home Depot McDonald s O Reilly Auto Parts Panda Express Sally Beauty Supply Shari s Café & Pies Starbucks Taco Bell Walmart Supercenter WinCo GRANTS PASS SHOPPING CENTER Aaron s Famous Footwear Goodwill Harbor Freight Tools JCPenney JoAnn Fabrics Maurices Petco Rite Aid Ross Dress for Less Staples US Cellular

9 24,000 VPD PAGE 9 5 NE AGNESS AVE 27,500 VPD 199 TERRY LANE RETAIL CENTER NE F ST NE BEACON DR GRANTS PASS SHOPPING CENTER 199 NE E ST Surrounding Retail

10 Site Plan NE FAIRVIEW AVENUE 10,199 LEASEABLE SF 27,500 VPD NE TERRY LANE 1.23 ACRES 199 REDWOOD HIGHWAY SPACES; 8.0/1,000 SF REPRESENTATIVE PHOTO

11 PAGE 11 MOD PIZZA BATTERIES + BULBS JERSEY SUBS ASPEN DENTAL SITE PLAN NOT TO SCALE Site Plan

12 Elevations South Elevation

13 PAGE 13 West Elevation North Elevation East Elevation

14 Financial Summary PRICE $5,740,000 CAPITALIZATION RATE 6.00% CASH FLOW SUMMARY SCHEDULED INCOME PER SF Base Rent for the Period of: 2/1/2019-1/31/2020 $35.74 $364,508 Rent Increases Over Base Rent $0.01 $125 Operating Expense Reimbursement $6.68 $68,166 Equals: Scheduled Gross Income $42.44 $432,799 Current Vacancy 3% ($1.27) ($12,984) Total Effective Gross Income (EGI) $41.16 $419,815 OPERATING EXPENSES Per SF CAMS $1.75 $17,848 Property Taxes $4.15 $42,326 Insurance $0.23 $2,346 Management Fee 3.0% of EGI $1.25 $12,754 Total Operating Expenses $7.38 $75,274 NET OPERATING INCOME $33.78 $344,541 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.

15 PAGE 15 Rent Roll TO JUMP TO THE FULL FINANCIAL SUMMARY INCLUDING RENT ROLL, PLEASE CLICK HERE. Financial Summary

16 Lease Abstract - MOD Pizza Premise & Term TENANT BUILDING SF LEASE TYPE TERM RENT COMMENCEMENT DELIVERY DATE OPTIONS MOD Super Fast Pizza, LLC dba MOD Pizza 2,820 SF NNN 10 Years Earlier to occur of Tenant s Grand Opening or 120 days following the later of completion of Landlord s work or date Tenant receives permits. October 1, 2018 (Estimated) 2, 5-Yr Options; 180-Day Notice Rent TERM MONTHLY RENT ANNUAL RENT Years 1-5 $9,165 $109,980 Years 6-10 $10, $120,978 OPTION RENTS DATE RANGE MONTHLY RENT ANNUAL RENT #1. Years $11, $133, #2. Years $12, $146,383.44

17 Expenses TAXES Tenant is responsible for reimbursement of 100% of their prorata share to Landlord, estimated at $4.15/SF for Year 1. INSURANCE Tenant reimburses 100% of their prorata share to Landlord, estimated at $0.23/SF for Year 1. UTILITIES Tenant is responsible for direct payment of all utilities. CAM Tenant s CAM is estimated at $3/SF for Year 1, total NNN estimated at $7.38/SF. CAM to be capped at a 3% increase year-over-year, excluding utilities and snow removal. TENANT S MAINTENANCE OBLIGATIONS Tenant is responsible for all interior maintenance and repair, including HVAC maintenance and replacement. LANDLORD S MAINTENANCE OBLIGATIONS PAGE 17 Landlord to maintain at its expenses, the foundations of the Premises, structural soundness of their concrete floors, and exterior walls in good order, repair and condition. Lease Provisions EXCLUSIVE USE Tenant has exclusive right to sell pizza that accounts for more than 10% of gross sales. TENANT FINANCIALS Tenant to provide financial statement to Landlord upon request no more than once per year. Lease Abstract

18 Lease Abstract - Aspen Dental Premise & Term TENANT BUILDING SF LEASE TYPE TERM RENT COMMENCEMENT DELIVERY DATE OPTIONS Aspen Dental Management, Inc. dba Aspen Dental 3,600 SF NNN 10 Years 120 days following the later of delivery of the Premises, Landlord s completion of common areas, or date Tenant receives permits. October 1, 2018 (Estimated) 3, 5-Yr Options; 180-Day Notice Rent TERM MONTHLY RENT ANNUAL RENT Years 1-5 $12,300 $147,600 Years 6-10 $13,530 $162,360 OPTION RENTS (ESTIMATED) DATE RANGE MONTHLY RENT ANNUAL RENT #1. Years $14,883 $178,596 #2. Years $16,371 $196,452 #3. Years $18,009 $216,108

19 Expenses TAXES Tenant is responsible for reimbursement of 100% of their prorata share to Landlord, estimated at $4.15/SF for Year 1. INSURANCE Tenant reimburses 100% of their prorata share to Landlord, estimated at $0.23/SF for Year 1. UTILITIES Tenant is responsible for direct payment of all utilities. CAM Tenant s CAM is estimated at $3/SF for Year 1, total NNN estimated at $7.38/SF. CAM to be capped at a 5% increase year-over-year, excluding utilities and snow removal. TENANT S MAINTENANCE OBLIGATIONS Tenant is responsible for all interior maintenance and repair, including doors/windows and frames, HVAC maintenance and repair. LANDLORD S MAINTENANCE OBLIGATIONS PAGE 19 Landlord to maintain, repair, and replace the roof, parapets, gutters, downspouts, canopies, awnings, floor slab, support columns, subfloor, outer walls, building slab, exterior and underground utility installations. Landlord provides guaranty for all Landlord construction responsibilities for 1 Year. Lease Provisions EXCLUSIVE USE Tenant has exclusive use. RIGHT TO GO DARK In the event Tenant doesn t open by the Opening Date or continuously operate for 180 consecutive days, Landlord will have the right to take back the Premises. ROFR TO LEASE Tenant has a right of first refusal to lease any adjacent space. TENANT FINANCIALS Tenant to provide current financial statement and statement for two preceding years to Landlord upon 30 days of request, no more than once per year. Lease Abstract

20 Lease Abstract - Jersey Mike s Premise & Term TENANT BUILDING SF LEASE TYPE TERM RENT COMMENCEMENT DELIVERY DATE OPTIONS JCK Subs, Inc. dba Jersey Mike s 1,779 SF NNN 10 Years, 5 months Earlier of the date Tenant opens, or 120 days following the later of delivery of the Premises, Landlord s completion of common areas, or date Tenant receives permits. October 1, 2018 (Estimated) 3, 5-Yr Options; 180-Day Notice Rent TERM MONTHLY RENT ANNUAL RENT Months 1-5 Rent/NNN Abatement Years 1-5 $4,744 $56,928 Years 6-10 $5, $62, OPTION RENTS (ESTIMATED) DATE RANGE MONTHLY RENT ANNUAL RENT #1. Years $5, $68, #2. Years $6, $75, #3. Years $6, $83,348.28

21 Expenses TAXES Tenant is responsible for reimbursement of 100% of their prorata share to Landlord. INSURANCE Tenant reimburses 100% of their prorata share to Landlord. UTILITIES Tenant is responsible for direct payment of all utilities. CAM Tenant s combined share of NNN is capped at $5/SF for Year 1 with a 5% cap year-over-year, excluding utilities and snow removal. TENANT S MAINTENANCE OBLIGATIONS Tenant is responsible for all interior maintenance and repair, including doors/windows and frames, HVAC maintenance and repair. LANDLORD S MAINTENANCE OBLIGATIONS PAGE 21 Landlord to maintain the structure of the roof, exterior walls, foundations and building structure, to be included in CAMs billable to Tenant. Lease Provisions EXCLUSIVE USE Tenant has exclusive use to sell submarine sandwiches. STATEMENT OF GROSS SALES Tenant to provide a statement of gross sales no more than once per year, upon Landlord s request. Lease Abstract

22 Lease Abstract - Batteries + Bulbs *Based on Draft Lease* Premise & Term TENANT BUILDING SF LEASE TYPE TERM RENT COMMENCEMENT DELIVERY DATE OPTIONS GUARANTY Specific Energy Corporation dba Batteries + Bulbs 2,000 SF NNN 10 Years, 5 months Earlier of the date Tenant opens, or 120 days following the later of delivery of the Premises, Landlord s completion of common areas, or date Tenant receives permits. October 1, 2018 (Estimated) 2, 5-Yr Options; 180-Day Notice Personal Guaranty Rent ANNUAL 3% INCREASES TERM MONTHLY RENT ANNUAL RENT Year 1 $4, $50,000 Year 2 $4, $51,500 Year 3 $4, $53,040 Year 4 $4, $54,640 Year 5 $4, $56,280 Year 6 $4, $57,960 Year 7 $4, $59,680 Year 8 $5, $61,460 Year 9 $5, $63,300 Year 10 $5, $65,180 OPTIONS 2, 5-Yr Options Annual 3% Increases.

23 Expenses TAXES Tenant is responsible for reimbursement of 100% of their prorata share to Landlord. INSURANCE Tenant reimburses 100% of their prorata share to Landlord. UTILITIES Tenant is responsible for direct payment of all utilities. CAM CAM is capped at a 4% increase year-over-year (excludes utilities, security, trash, and non-reoccurring expenses). TENANT S MAINTENANCE OBLIGATIONS Tenant is responsible for all interior maintenance and repair, including doors/windows and frames, HVAC maintenance and repair. LANDLORD S MAINTENANCE OBLIGATIONS PAGE 23 Landlord to maintain the structure of the roof, exterior walls, foundations and building structure, to be included in CAMs billable to Tenant. Lease Provisions EXCLUSIVE USE Tenant has exclusive use to sell batteries, light bulbs, and offer cell phone repair. Lease Abstract

24 Demographics KEY 5 MINS 10 MINS 15 MINS Distance To Eugene, Oregon Medford, Oregon 140 MILES 2 HRS 12 MINS 28.7 MILES 33 MINS

25 PAGE 25 Drive Time POPULATION 5 MINS 10 MINS 15 MINS ,368 33,276 51, ,724 34,682 54, ,031 35,833 56, HH INCOME 5 MINS 10 MINS 15 MINS Average $53,038 $57,948 $60,147 Median $34,943 $40,877 $43,346 84,745 JOSEPHINE COUNTY POPULATION (ESTIMATED) Demographics

26 REPRESENTATIVE PHOTO Terry Lane Retail Center GRANTS PASS, OREGON FINANCIAL SUMMARY

27 Financial Summary PAGE 27 PRICE $5,740,000 CAPITALIZATION RATE 6.00% CASH FLOW SUMMARY SCHEDULED INCOME PER SF Base Rent for the Period of: 2/1/2019-1/31/2020 $35.74 $364,508 Rent Increases Over Base Rent $0.01 $125 Operating Expense Reimbursement $6.68 $68,166 Equals: Scheduled Gross Income $42.44 $432,799 Current Vacancy 3% ($1.27) ($12,984) Total Effective Gross Income (EGI) $41.16 $419,815 OPERATING EXPENSES Per SF CAMS $1.75 $17,848 Property Taxes $4.15 $42,326 Insurance $0.23 $2,346 Management Fee 3.0% of EGI $1.25 $12,754 Total Operating Expenses $7.38 $75,274 NET OPERATING INCOME $33.78 $344,541 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. REPRESENTATIVE PHOTO

28 Rent Roll PAGE 28 TENANT INFO TENANT NAME SIZE % OF SF RENT START LEASE TERMS LEASE EXPIRATION LEASE TYPE CURRENT RENT RENT INCREASES OPTIONS MONTHLY BASE RENT RENT/SF/YR DATE OF INCREASE MONTHLY BASE RENT Aspen Dental 3, % 2/1/19 1/31/29 NNN $12,300 $ /1/24 $13,530 Comments: Analysis assumes 10/1/18 turnover with rent to commence 120 days thereafter. Landlord to provide $180K T.I. allowance. Jersey Mike's 1, % 2/1/19 6/30/29 NNN $4,744 $ /1/24 $5,218 Comments: Analysis assumes 10/1/18 turnover with rent to commence 120 days thereafter (if Tenant opens sooner, commencement date will move up). Tenant to have five month rent/nnn abatement not reflected in UW. Landlord to provide $620K T.I. allowance. Batteries Plus Bulbs 2, % 1/1/19 12/31/28 NNN $4,167 $ /1/20 $4,292 Comments: Analysis assumes 10/1/18 turnover with rent to commence 90 days thereafter (if Tenant opens sooner, commencement Annual 3% Increases date will move up). Personal guaranty. MOD Pizza 2, % 2/1/19 1/31/29 NNN $9,165 $ /1/24 $10,082 Comments: Analysis assumes 10/1/18 turnover with rent to commence 120 days thereafter (if Tenant opens sooner, commencement date will move up). TOTALS 10, % $30,376 $ YR 10% Increase 180-Day Notice 3-5 YR 10% Increase 180-Day Notice 2-5 YR Annual 3% Inc. 180-Day Notice 2-5 YR 10% Increase 180-Day Notice 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.

29 Operating Expenses PAGE 29 PROJECTED OPERATING EXPENSES REIMBURSEMENTS TOTAL PER SF NOTES IN-PLACE CAMS $17,848 $ $15,838 PROPERTY TAXES $42,326 $ $42,326 INSURANCE $2,346 $ $2,346 MANAGEMENT $12,754 $ $7,656 TOTAL EXPENSES $75,274 $7.38 $68,166 NOTES: 1) Based on Lease NNN Estimate. 2) Based on 3.0% of EGI. Reimbursements include Admin Fees. 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.

30 Reimbursements PAGE 30 TENANT NAME PRO RATE % CAMS PROPERTY TAX INSURANCE MGMT ADMIN FEE ADMIN COLLECTED NOTES TENANT TOTALS EXPENSE TOTAL $17,848 $42,326 $2,346 $12,754 Aspen Dental 35.30% $6,300 $14,940 $828 $1,103 0% $0 1 $23,171 Jersey Mike's 17.44% $1,103 $7,383 $409 $0 0% $0 2 $8,895 Batteries Plus Bulbs 19.61% $3,500 $8,300 $460 $2,501 15% $525 3 $15,286 MOD Pizza 27.65% $4,935 $11,703 $649 $3,527 0% $0 4 $20,813 TOTAL % $15,838 $42,326 $2,346 $7,131 $525 $68,166 NOTES: 1) CAM capped at a 5% increase year-over-year; Management reimbursement based on Tenant's prorata of 5% of NNN. 2) NNN capped at $5.00/SF for YR 1 with a 5% CAM cap thereafter; Tenant's management and 15% Admin based on NNN included in Capped CAM. 3) CAM capped at a 4% increase year-over-year (excludes utilities, security, trash, and any non-recurring expenses). 4) CAM capped at a 3% increase year-over-year (excludes utilities and snow removal). 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.

31 Contact We d love to hear from you. KEVIN ADATTO kadatto@capitalpacific.com PH: MICHAEL HORWITZ mhorwitz@capitalpacific.com PH: SCOTT FRANK sfrank@capitalpacific.com PH: SEAN MACK smack@capitalpacific.com PH: PETER DUNN pdunn@capitalpacific.com PH: LISTED IN CONJUNCTION WITH BROCK SWITZER brock@hsmpacific.com PH: