UNION CROSSING. offering memorandum multi-tenant retail strip center investment opportunity W. Union Hills Dr. Glendale, AZ 85308

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offering memorandum multi-tenant retail strip center investment opportunity UNION CROSSING 4302-4410 W. Union Hills Dr.

propertyresourcesgroup.com BRAD STURN-COMMERCIAL AGENT Property Resources Group Phone: 701.499.3914 Email: brad@prgcommercial.com www.

1 offering memorandum multi-tenant retail strip center investment opportunity UNION CROSSING W. Union Hills Dr. Glendale, AZ MATT OLSON-ASSOC. BROKER, CCIM, SIOR Property Resources Group Phone: BRAD STURN-COMMERCIAL AGENT Property Resources Group Phone: JAKE DANOVIC-PRINCIPAL Reliance Commercial Real Estate Phone:

2 TABLE OF CONTENTS Offering Process... 3 Investment Summary... 4 Investment Details... 5 Executive Summary...6 Cash Flow Analysis Investment Return Analysis...8 Cumulative Analysis...9 Internal Rate of Return Analysis...10 Physical Description Area Information...14 Property Photographs Site Plan...17 Parcel Map Area Map Disclaimer...20 *All information contained herein is believed to be true but should be verified to the buyer s satisfaction in case of error, typographical or otherwise. All information is subject to change without further notice. PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.2

3 OFFERING PROCESS All offers must consist of a Letter of Intent and include the debt/equity structure and source of funds. Seller reserves the right to remove the property from the market at any time. Seller expressly reserves the right, in its sole and absolute discretion, to reject any and all proposals or expressions of interest in the Property, to terminate discussions with any party at any time, or to extend the deadlines previously set forth. Upon receipt of an acceptable Letter of Intent, the successful Offeror will be supplied a Purchase Agreement. All communications, inquiries and requests should be addressed to Reliance Commercial Real Estate or Property Resources Group, as the exclusive representatives of the Seller. The management of the Property should not be contacted directly. To schedule a tour or for property inquiries, please contact one of the representatives below: Matt Olson Associate Broker, CCIM, SIOR Brad Sturn Commercial Agent Jake Danovic Principal Neither the Seller nor Property Resources Group or Reliance Commercial Real Estate make any representations or warranties, expressed or implied, as to the accuracy or completeness of the information contained in the marketing materials or their contents and all Purchasers are advised to independently verify any information they deem important. Purchasers should not rely upon the information provided by or through Seller without independent verification. The marketing materials do not purport to contain all of the information that a Purchaser may desire and Purchasers are urged to conduct their own investigation and analysis. PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.3

4 INVESTMENT SUMMARY Union Crossing W Union Hills Dr Glendale, Arizona (Phoenix Jurisdiction) Sale Price: $9,950,000 Occupancy: 91% Cap Rate: 8.6% Net Operating Income: $855,000 Property Highlights: Great visibility Strong Demographics Stable Occupancy Retail Center Tenants SF ASIANA MARKET 35,534 CHARMBOX JEWELERS 630 DAIRY QUEEN 2,138 SMOKE SHOP 760 THE WATER WELL 998 NAJIBULLAH AHMADI 1,248 MAILBOXES AND MORE 750 ANDREW BOSUN KIM AND JOANN 750 ULTRA ONE DAY CLEANERS 1,250 JAMES ROMESBURG 1,890 VACANT 3,984 VACANT 1,295 SUSAN GHULAM 1,350 VACANT 1,353 TOP PROPERTY SHOP, LLC 851 THE HELMET CENTER, LLC 8,220 MY CORNER CHINESE RESTAURAN 1,374 CHR INVESTMENTS 2,170 AMY TRAN 740 SALON CENTRIC INC 1,960 SAFFRON, LLC 1,830 SAHAR PETROS 1,470 JOE'S AUTO SERVICE CENTERS, LL 4,250 Total 76,795 Pad Site Araiza Brothers Enterprises IV 2,248 Property Total 79,044 PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.4

5 INVESTMENT DETAILS INVESTMENT DETAILS Union Crossing West Union Hills Dr Glendale, AZ ANALYSIS Analysis Date September 2018 PROPERTY Property Property Address Union Crossing West Union Hills Dr Glendale, AZ PURCHASE INFORMATION Property Type Retail Purchase Price $9,950,000 Tenants 1 Total Rentable Sq. Ft. 79,044 Resale Valuation 8.5% (capitalization of noi) Resale Expenses 3.0% FINANCIAL INFORMATION Down Payment $1,990,000 LT Capital Gain 20.00% Federal Tax Rate 33.0% Passive Loss Rules Yes LOANS Type Debt Term Amortization Rate Payment LO Costs Fixed $7,960, years 25 years 5.0% $46,533 INCOME & EXPENSES Gross Operating Income $1,195,101 Monthly GOI $99,592 Total Annual Expenses ($340,000) Monthly Expenses ($28,333) * Investment Analysis is based on a proforma Matt Olson, CCIM, SIOR matt@prgcommercial.com Page 1 PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.5

6 EXECUTIVE SUMMARY INTERNAL RATE OF RETURN ANALYSIS Union Crossing West Union Hills Dr Glendale, AZ BEFORE TAX IRR TIME CASH FLOWS Initial Investment ($1,990,000) End of Year 1 $296,701 End of Year 2 $314,011 End of Year 3 $331,716 End of Year 4 $349,825 End of Year 5 $368,348 End of Year 6 $387,297 End of Year 7 $406,680 End of Year 8 $426,511 End of Year 9 $446,800 End of Year 10* $6,533,554 IRR = 23.99% * ($467,558 + $6,065,996) AFTER TAX IRR TIME CASH FLOWS Initial Investment ($1,990,000) End of Year 1 $217,195 End of Year 2 $229,182 End of Year 3 $238,132 End of Year 4 $247,203 End of Year 5 $256,395 End of Year 6 $265,707 End of Year 7 $275,138 End of Year 8 $284,686 End of Year 9 $294,350 End of Year 10* $5,397,980 IRR = 18.84% * ($300,968 + $5,097,012) * Investment Analysis is based on a proforma Matt Olson, CCIM, SIOR matt@prgcommercial.com Page 6 PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.6

7 CASH FLOW ANALYSIS EXECUTIVE SUMMARY Union Crossing West Union Hills Dr Glendale, AZ Acquisition Costs Purchase Price, Points and Closing Costs $9,950,000 Investment - Cash $1,990,000 First Loan $7,960,000 Investment Information Purchase Price $9,950,000 Price per Tenant $9,950,000 Price per Sq. Ft. $ Income, Expenses & Cash Flow Gross Scheduled Income $1,280,496 Total Vacancy and Credits ($85,395) Operating Expenses ($340,000) Net Operating Income $855,101 Debt Service ($558,400) Cash Flow Before Taxes $296,701 (After Tax Results) Total Interest (Debt Service) ($394,273) Depreciation and Amortization ($219,902) Taxable Income (Loss) $240,927 Tax Savings (Costs) ($79,506) Cash Flow After Taxes $217,195 Financial Indicators Cash on Cash Return Before Taxes 14.91% Debt Coverage Ratio 1.53 Capitalization Rate 8.59% Gross Income / Square Feet $16.20 Gross Expenses / Square Feet ($4.30) Operating Expense Ratio 28.45% Matt Olson, CCIM, SIOR matt@prgcommercial.com Page 2 * Investment Analysis is based on a proforma PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.7

8 INVESTMENT RETURN ANALYSIS CASH FLOW ANALYSIS Union Crossing West Union Hills Dr Glendale, AZ Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 GROSS SCHEDULED INCOME $1,280,496 $1,304,188 $1,328,369 $1,353,052 $1,378,248 $1,403,968 $1,430,226 $1,457,034 $1,484,404 $1,512,351 Turnover Vacancy ($85,395) ($86,676) ($87,976) ($89,296) ($90,635) ($91,995) ($93,375) ($94,775) ($96,197) ($97,640) Total Operating Expenses ($340,000) ($345,100) ($350,277) ($355,531) ($360,864) ($366,277) ($371,771) ($377,347) ($383,007) ($388,753) NET OPERATING INCOME $855,101 $872,412 $890,117 $908,226 $926,749 $945,697 $965,081 $984,911 $1,005,200 $1,025,958 Loan Payment ($558,400) ($558,400) ($558,400) ($558,400) ($558,400) ($558,400) ($558,400) ($558,400) ($558,400) ($558,400) NET CASH FLOW (b/t) $296,701 $314,011 $331,716 $349,825 $368,348 $387,297 $406,680 $426,511 $446,800 $467,558 Cash On Cash Return b/t 14.91% 15.78% 16.67% 17.58% 18.51% 19.46% 20.44% 21.43% 22.45% 23.50% NET OPERATING INCOME $855,101 $872,412 $890,117 $908,226 $926,749 $945,697 $965,081 $984,911 $1,005,200 $1,025,958 Depreciation ($219,902) ($229,478) ($229,478) ($229,478) ($229,478) ($229,478) ($229,478) ($229,478) ($229,478) ($219,902) Loan Interest ($394,273) ($385,876) ($377,049) ($367,771) ($358,018) ($347,766) ($336,989) ($325,661) ($313,754) ($301,237) TAXABLE INCOME (LOSS) $240,927 $257,058 $283,590 $310,977 $339,253 $368,453 $398,614 $429,772 $461,968 $504,820 Income Taxes ($79,506) ($84,829) ($93,585) ($102,622) ($111,954) ($121,590) ($131,543) ($141,825) ($152,449) ($166,590) CASH FLOW (a/t) $217,195 $229,182 $238,132 $247,203 $256,395 $265,707 $275,138 $284,686 $294,350 $300,968 Cash On Cash Return a/t 10.91% 11.52% 11.97% 12.42% 12.88% 13.35% 13.83% 14.31% 14.79% 15.12% * b/t = before taxes;a/t = after taxes Matt Olson, CCIM, SIOR matt@prgcommercial.com Page 3 * Investment Analysis is based on a proforma PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.8

9 CUMULATIVE ANALYSIS INVESTMENT RETURN ANALYSIS Union Crossing West Union Hills Dr Glendale, AZ Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Cash Flow - To Date $217,195 $446,377 $684,508 $931,711 $1,188,106 $1,453,813 $1,728,951 $2,013,637 $2,307,987 $2,608,955 Net Resale Proceeds $2,103,758 $2,380,548 $2,669,854 $2,972,222 $3,288,221 $3,618,450 $3,963,532 $4,324,125 $4,700,914 $5,097,012 Invested Capital ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) Net Return on Investment $330,952 $836,925 $1,364,363 $1,913,933 $2,486,327 $3,082,262 $3,702,483 $4,347,762 $5,018,901 $5,715,967 Internal Rate of Return 16.63% 20.10% 20.72% 20.69% 20.45% 20.14% 19.80% 19.47% 19.15% 18.84% Modified IRR 16.63% 19.19% 19.01% 18.35% 17.60% 16.88% 16.20% 15.58% 15.02% 14.50% NPV (cash flow + reversion) $466,585 $1,155,165 $1,874,888 $2,626,727 $3,411,691 $4,230,826 $5,085,219 $5,975,998 $6,904,334 $7,871,443 PV (NOI + reversion) $10,810,857 $11,885,313 $12,982,085 $14,101,694 $15,244,676 $16,411,576 $17,602,959 $18,819,399 $20,061,489 $21,329,835 * a/t = after taxes; Modified IRR = Modified Internal Rate of Return; PV = Present Value; NPV = Net Present Value; NOI = Net Operating Income * Investment Analysis is based on a proforma Matt Olson, CCIM, SIOR matt@prgcommercial.com Page 4 PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.9

INTERNAL RATE OF RETURN ANALYSIS CUMULATIVE ANALYSIS Union Crossing 4302-4410 West Union Hills Dr Glendale, AZ 85308 Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

10 INTERNAL RATE OF RETURN ANALYSIS CUMULATIVE ANALYSIS Union Crossing West Union Hills Dr Glendale, AZ Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Equity (appreciation) $313,666 $521,959 $735,006 $952,928 $1,175,848 $1,403,893 $1,637,193 $1,875,883 $2,120,099 $2,369,984 Equity (loan reduction) $164,128 $336,653 $518,004 $708,634 $909,017 $1,119,652 $1,341,063 $1,573,802 $1,818,449 $2,075,612 CASH FLOW (a/t) $217,195 $446,377 $684,508 $931,711 $1,188,106 $1,453,813 $1,728,951 $2,013,637 $2,307,987 $2,608,955 Totals - To Date $694,989 $1,304,988 $1,937,518 $2,593,273 $3,272,970 $3,977,357 $4,707,207 $5,463,322 $6,246,535 $7,054,550 Invested Capital ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ($1,990,000) ROIC - To Date 34.92% 65.58% 97.36% % % % % % % % * a/t = after taxes; ROIC = Return On Invested Capital Matt Olson, CCIM, SIOR matt@prgcommercial.com Page 5 * Investment Analysis is based on a proforma PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.10

11 PHYSICAL DESCRIPTION Property Addresses: Union Crossing W Union Hills Dr Glendale, AZ (Phoenix jurisdiction) Total Building SF: Year Built: 1987 & 2016 Number of Stories: 1 Site Size: Property Type: Zoning: 76,795 SF (Retail Center) & 2,248 SF (Pad Site) 7.71 acres General Property Description: Grocery Anchored Retail Strip Center C-2, Intermediate Commercial District, city of Phoenix Union Crossing is a Grocery Anchored multi-tenant retail center located at a key intersection within a densely-populated middle-income residential community, convenient to both Loop 101 and Interstate 17 in Phoenix, AZ. This property also includes Frederico s Restaurant on the corner pad site. The property benefits from its convenient building access at an arterial, signalized intersection, Union Crossing has 5 curb cuts- 3 on Union Hills Drive and 2 on 43rd Avenue-with plenty of right and left turn ingress and egress. The property was constructed in 1987 with attractive elements yet low maintenance materials such as tiled roofing materials on the canopies, brick walls and columns, and drought-tolerant landscaping. Union Crossing is currently 91% occupied. 343 convenient parking spaces are available within close proximity to the entrances of the tenant suites. 12 of which are handicap accessible. PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.11

12 PHYSICAL DESCRIPTION Exterior Building Construction The Foundation has reinforced concrete footings and concrete slab-on grade. The Exterior Walls are mostly brick with some painted smooth stucco, over block construction. Fire walls are established at the perimeter of each of the shops buildings and anchor spaces. Each building roof is flat and supported by wood I-beams and plywood sheathing. The roof finishes have a reflective coating with built up materials, over which a new layer of foam roofing materials and elastomeric paint has been added. The roofs are slightly pitched for drainage purposes and drains through scuppers into the surrounding ground cover. Tenant doors are tempered glass set in anodized aluminum frames. Each tenant suite has direct access to doors from the walkway. Auxiliary doors such as to access utility rooms and rear entry doors are painted hollow-metal doors set in painted aluminum frames. Floor-to-ceiling storefront window systems are set in anodized aluminum frames. Interior Building Construction Non-Structural Walls are constructed from metal studs over drywall. They are either painted or wall-papered. Doors are typically painted hollow-core wood set in painted wood frames. Ceilings in tenant spaces typically consist or 2 x 4 suspended grids with acoustical panels. The ceilings are a standard height. The restroom ceilings are drywall. Lighting in the tenant spaces are typically 2 x 4 recessed fluorescent lay-in fixtures with frosted lenses. Some spaces have additional accent lighting that coordinates with the layout of their merchandise. Floor Coverings in tenant spaces are a combination of commercial-grade carpeting, vinyl flooring, ceramic tiel and exposed concrete. PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.12

13 PHYSICAL DESCRIPTION Building Amenities Each suite has interior accessed electrical and telephone equipment. Buildings have a variety of electrical service feeds based on their building sizes and related electrical requirements. Electric service feeds are 120/208 volt, 3-phase. Power is supplied to the building through pad-mounted electric transformers located at the exteriors of each building. Copper wiring through metal conduit pipe is run through the site. The buildings are heated and cooled with roof mounted heat pumps and split units with cooliing fans,. The typical HVAC unit typically ranges from 3 to 5 tons. Each space is individually thermostatically controlled. Plumbing consists of a combination of PVC, steel, copper and cast iron piping. Water for the sprinkler system is distributed through PVC piping. Small capacity electric hot water heaters supply hot water to the restrooms. Each suite is equipped with at least one unisex restroom which contains one basin and one toilet. The large spaces may be equipped with additional restrooms as required by code. Each building is sprinkled and equipped with fire extinguishers, alarm horns, pull stations and smoke and heat detectors. There are also several fire hydrants surrounding the site. Tenants are responsible for any security devices used within their respective suites. Landscaping has a variety of ground covers, shrubs, and mature trees around the perimeter of the property. All are irrigated by an automatic underground sprinkler system. Exterior lighting is a combination of canopy recessed lights, wall -mounted fixtures in the rear of the building and pole-mounted lights in the common and parking areas. Signage is available for each tenant on the Monument Sign locationed on Union Hills Drive. Each tenant can place their sign on the pre-established sign bands above their entrance. Tenant signage is mostly individually illuminated pan-channel lettering, some of which are set on a raceway. The electrical feed to each tenant s sign comes from their individual suite. All signage must adhere to owner- established signage criteria. PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.13

14 AREA INFORMATION The area surrounding Union Crossing is dense with housing and has excellent access to the freeway system with close proximity to both Loop 101 and Interstate 17. Union Crossing can reach over 575,000 people within a 20 minute drive time, which is why a regional draw such as an ethnic grocery store, Asiana Market, has selected this location. Surveys of Population levels from 2015 show 17,635 People with in 1 mile, 121, 535 within 3 miles and 316,855 within 5 miles of Union Crossing. Median Income is $65,577, $60,991, and $65,381 in the same respective mile ranges. Major east/west arterials within the this neighborhood include Loop 101, Union Hills Drive, Bell Road, Greeenway Road and Thunderbird Road. North/south arteriels include 59th Avenue, 51st AVenue, 43rd Avenue, 35th Avenue and 27th Avenue. There are 3 hospitals in the Union Crossings area that provide a full range of medical services to the neighborhood. They include the John C. Lincoln Deer Valley Hospital, at the intersection of Interstate 17 and Loop 101 Freeways, Abrazo Arrowhead Community Hospital, at Union Hills Dr and 67th Ave, and Banner Thunderbird Hospital, at Thunderbird and 59th. There are also higher learning centers located in the area. Arizona State University operates their west campus on 51st Avenue and Thunderbird Road. This campus serves 7500 Students. Midwestern University, located at 67th Avenue and Loop 101. This campus operates a graduate degree program specializing in health care services for nearly 2100 students. Thunderbird Amercian Graduate School of International Management, a world-renowned business school, is located at 59th Avenue and Thuderbird Road. Currently the school has over 770 full-time MBA students enrolled from 56 countries. Each of these schools and hospitals are within 2-5 miles from the Union Crossing mall neighborhood. Union Hills Rd gets traffic of 22,200 cars per day and 43rd Avenue gets 20,000 cars per day. The combination of a well-establlished, well populated neighborhood area of middle class families and the centralized location and proximity to major employeres are positive factors that continue to make the area attractive and will assist in maintaining a stable growth pattern in the forseeable future. PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.14

15 PROPERTY PHOTOGRAPHS PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.15

16 PROPERTY PHOTOGRAPHS PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.16

17 SITE PLAN Asiana Market PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.17

18 PARCEL MAP PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.18

19 AREA MAP PHOENIX PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.19

20 DISCLAIMER *All information contained herein is believed to be true but should be verified to the buyer s satisfaction in case of error, typographical or otherwise. All information is subject to change without further notice. PROPERTY RESOURCES GROUP OFFERING MEMORANDUM P.20

23 ACRES HEART OF THE BAKKEN. Williston, ND. Offering Memorandum Investment Opportunity NNN Leased Highway 2 Frontage Additional Development Land

23 ACRES HEART OF THE BAKKEN. Williston, ND. Offering Memorandum Investment Opportunity NNN Leased Highway 2 Frontage Additional Development Land Offering Memorandum Investment Opportunity NNN Leased Highway 2 Frontage Additional Development Land Williston, ND 23 ACRES HEART OF THE BAKKEN MATT OLSON - ASSOC. BROKER, CCIM, SIOR Property Resources