8200 EL CAMINO REAL, ATASCADERO, CA

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1 8200 EL CAMINO REAL, ATASCADERO, CA O F F E R I N G M E M O R A N D U M CLICK TO VIEW PROPERTY VIDEO MATTHEWS REAL ESTATE INVESTMENT SERVICES 1

2 EXCLUSIVELY LISTED BY: EL WARNER EVP & NATIONAL DIRECTOR Direct Mobile Lic. No LINDSAY TSUMPES AVP & DIRECTOR Direct Mobile Lic. No KYLE MATTHEWS CEO & CHAIRMAN Direct Mobile Lic. No

3 CONTENTS EXECUTIVE SUMMARY FINANCIAL OVERVIEW AREA OVERVIEW TENANT OVERVIEW

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5 05 EXECUTIVE SUMMARY

6 OFFERING SUMMARY SMART & FINAL EXTRA! ATASCADERO, CA Matthews Real Estate Investment Services is pleased to present the fee simple sale of a freestanding Smart & Final Extra! located in San Luis Obispo County wine country. Smart & Final Extra! is synergistically positioned as a dominant grocer within the community to serve the surrounding residential neighborhoods of Atascadero, California. Perfectly positioned along US-101 with direct on/off ramp access, Smart & Final Extra! has an absolute NNN lease in place with approximately 17 years remaining and 2% annual rent increases. FINANCIAL SUMMARY 8200 El Camino Real, Atascadero, CA List Price...Best Offer Gross Leasable Area... ± 57,744 SF Lot Size...± 6.90 Acres Year Built Headquartered in Los Angeles county, Smart & Final is a publicly traded credit tenant (Moody s: B2, Standard & Poor s: B) and operates over 300 stores in the United States and Mexico with over 10,000 employees. Larger than typical Smart & Final warehouse locations, the Smart & Final Extra! concept was introduced approximately 8.5 years ago to enhance and benefit the household consumer s shopping experience. The Smart & Final Extra! stores carry a greatly expanded selection of products and flexibility in purchasing options while retaining the same low prices and core value proposition of the traditional Smart & Final legacy locations, which has translated into positive same-store-sales in 24 of the last 25 years for the company. This offering is a rare opportunity to acquire a single tenant grocer in California that provides long-term security and passive income. 6 OFFERING MEMORANDUM

7 INVESTMENT HIGHLIGHTS DOMINANT CALIFORNIA GROCER ±300 stores with a net sales increase of 3.9% to ±$1.1 billion reported in Q ABSOLUTE NNN LEASE Ease of Management Zero landlord responsibilities LOCATED ALONG US-101 Traffic counts exceeding ±49,000 cars per day on US-101 GREAT ACCESS Direct on/off ramp access from US-101 with multiple points of ingress and egress PUBLICLY TRADED CREDIT TENANT (NYSE: SFS) Stability of a daily needs tenant with great credit and strong customer base LONG LEASE TERM REMAINING ±17.5 years remaining on the lease providing long-term income and security EXCELLENT HEDGE AGAINST INFLATION Annual 2% rent increases every March 1st FANTASTIC VISIBILITY AND SIGNAGE Highly visible along cross streets and US-101 with multiple monument signs AFFLUENT TRADE AREA Average household income of ±$86,000 in a 3-mile radius and ±91,000 in a 5-mile radius SAN LUIS OBISPO COUNTY WINE COUNTRY Home to over 250 wineries and growing as one of California s premier wine destinations MATTHEWS REAL ESTATE INVESTMENT SERVICES 7

8 SURROUNDING TENANTS 8 OFFERING MEMORANDUM ±49,000 ADT

9 MATTHEWS REAL ESTATE INVESTMENT SERVICES 9

10 SANTA ROSA ELEMENTARY SCHOOL 10 OFFERING MEMORANDUM

11 SURROUNDING TENANTS ±49,000 ADT MATTHEWS REAL ESTATE INVESTMENT SERVICES 11

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13 13 FINANCIAL OVERVIEW

14 FINANCIAL SUMMARY 8200 El Camino Real, Atascadero, CA List Price...Best Offer Gross Leasable Area... ± 57,744 SF Lot Size...± 6.90 Acres Year Built MARKET DEBT QUOTE Loan to Value 70% Interest Rate 4.20% Term 10 Years Amortization 25 Years Loan quote provided by Barrington Capital based on market conditions at this time. Actual rates and terms will vary based on market conditions at closing. Please contact Brian Krebs at the information below: Phone: (949) TERM MONTHLY RENT ANNUAL RENT ANNUAL RENT/SF Current - 2/28/2018 $78,479 $941,753 $ /1/2018-2/28/2019 $80,049 $960,588 $ /1/2019-2/28/2020 $81,650 $979,800 $ /1/2020-2/28/2021 $83,283 $999,396 $ /1/2021-2/28/2022 $84,949 $1,019,384 $ /1/2022-2/28/2023 $86,648 $1,039,771 $ /1/2023-2/28/2024 $88,381 $1,060,567 $ /1/2024-2/28/2025 $90,148 $1,081,778 $ /1/2025-2/28/2026 $91,951 $1,103,414 $ /1/2026-2/28/2027 $93,790 $1,125,482 $ /1/2027-2/28/2028 $95,666 $1,147,992 $ /1/2028-2/28/2029 $97,579 $1,170,951 $ /1/2029-2/28/2030 $99,531 $1,194,371 $ /1/2030-2/28/2031 $101,521 $1,218,258 $ /1/2031-2/28/2032 $103,552 $1,242,623 $ /1/2032-2/28/2033 $105,623 $1,267,476 $ /1/2033-2/28/2034 $107,735 $1,292,825 $ /1/2034-2/28/2035 $109,890 $1,318,682 $ OFFERING MEMORANDUM

15 PHYSICAL DESCRIPTION Property Name Smart & Final Extra! Property Address 8200 El Camino Real Atascadero, CA Assessor's Parcel Number Zoning CR SITE DESCRIPTION Number of Stories One Year Built 2000 Gross Leasable Area (GLA) ±57,744 Lot Size ±300,700 SF (±6.9 Acres) Type of Ownership Fee Simple Parking ±270 Surface Spaces Parking Ratio 4.68:1,000 SF Landscaping Professional Topography Generally Level CONSTRUCTION Foundation Concrete Slab Framing Steel Exterior Stucco and CMU Parking Surface Asphalt Roof Gravel-Ballasted Built-Up Roofing (BUR) and Standing Seam Metal TENANT SUMMARY Tenant Smart & Final, LLC Tenant Trade Name Smart and Final Extra! Type of Ownership Fee Simple Lease Type Absolute NNN Landlord Responsibility None Lease Commencement Date 12/18/15 Rent Commencement Date 12/18/15 Lease Expiration Date 2/28/35 Term Remaining on Lease ±17.5 Yrs Increases Annual 2% Every March 1st Options Two 10-Year Options MATTHEWS REAL ESTATE INVESTMENT SERVICES 15

16 LEASE ABSTRACT Tenant: Tenant Trade Name: O F F E R I N G M E M O R A N D U M Smart & Final Stores LLC Smart & Final Extra! Address: 8200 El Camino Real Atascadero, CA Size: ±57,744 Lease Date: 12/18/2015 Rent Commencement: 12/18/2015 Lease Expiration: 2/28/2035 Renewal Options: Two (2) separate Ten (10) year options Required Advance Notice of Exercise Options: One hundred twenty (120) days prior to the end of the initial term or then effective extension term Current Rent (annually): $941,753 Rent Increases: 2% annual increases every March 1st (includes Option Terms) Real Estate Taxes: Tenant responsible to pay real estate taxes Insurance: Tenant responsible to pay insurance costs Utilities: Tenant to pay all utilities Tenant, at it's sole cost and expense, shall keep all building, structures and improvements erected at the Subject Property in good working order and repair including and without limitation, the roof and HVAC and other electrical and mechanical systems. Tenant shall also at it's sole cost and expense repair and reconstruct any building, structure Repair and Maintenance: or improvement at the Subject Property that has been damaged or destroyed by a casualty. Tenant shall make all necessary structural, non-structural, exterior and interior repairs to the Subject Property. Tenant also waives any right to require Landlord, at Landlord's expense, to maintain, repair or rebuild any part of the Subject Property. Percentage Rent: None Right of First Refusual / Right to Purchase: None Tenant is required to execute an estoppel certificate within twenty (20) Estoppel: days upon written request from the Landlord. Exclusive Use: Tenant granted exclusive use for "grocery store" Tenant shall have financial protection from reassessment of real estate Proposition 13 Protection: taxes as a result of sale or transfer during the first five (5) years from the Effective Date of this lease, (DOES NOT AFFECT THIS SALE). 16 OFFERING MEMORANDUM

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19 19 AREA OVERVIEW

20 DEMOGRAPHICS O F F E R I N G M E M O R A N D U M POPULATION 1-MILE 3-MILE 5-MILE 2022 Projection 7,545 27,571 35, Estimate 7,349 26,549 33,811 Growth % 3.85% 4.01% Growth % 4.95% 5.22% HOUSEHOLDS 1-MILE 3-MILE 5-MILE 2022 Projection 2,969 10,655 13, Estimate 2,872 10,183 12,985 Growth % 4.63% 4.70% Growth % 7.09% 7.10% 2017 Est. Average Household Size INCOME 1-MILE 3-MILE 5-MILE Average Household Income $87,784 $86,147 $91,463 Median Household Income $67,552 $67,768 $71,396 ATASCADERO, CA Atascadero is a city in San Luis Obispo County, California. Located equidistant between Los Angeles and San Francisco, the city has a small-town charm and within driving distance from major metropolitan areas. With annual local events at Atascadero Lake Park and regular fairs and farmers markets, this city provides residents access to unique and local industries. 20 OFFERING MEMORANDUM

21 EAGLE RANCH DEVELOPMENT Eagle Ranch is currently 3,475-acres of rolling green hills and oak trees. Owned by The Smith family of Ventura since 1964, Atascadero has been making development plans for Eagle Ranch since the early 2000s. The land is to be developed in 10 phases over 25 years, likely starting in The development will consist of 494 single-family lots of at least 1 acre, 93 units of multifamily housing, 2,285 acres of open space, and 16.9 miles of public trails that will be maintained by future homeowners association. Additionally, hotels and a village center with commercial space would be a part of the community. SUMMARY 494 single-family residential lots 93 multi-family units (senior housing, workforce housing & mixed-use units) Resort Hotel: 44.9 acres; 100 rooms and associated amenities Village Center: 3.9 acres; 15,000 sq. ft. retail, offices, postal facilities, meeting space Highway Commercial: 15.2 acres; 200-room hotel & facilities and sit-down restaurant Public Park: 7.4 acres; includes small amphitheater Equestrian Staging Area: 1.6 acres Roads: ±19 miles internal network of roads Trails: ±16.9 miles of paved multi-use paths, unpaved trails, and trail easement(s) Open Space and Agriculture: ±2,285 acres; consisting of agricultural, private & public open space MATTHEWS REAL ESTATE INVESTMENT SERVICES 21

22 SAN LUIS OBISPO Known as the Happiest Place in America, San Luis Obispo (SLO) is conveniently located along the Central Coast, halfway between San Francisco and Los Angeles. Fringed by the Santa Lucia Mountains to the north and with the Pacific Ocean only 11 miles away, residents and visitors enjoy access to the best of California s wilderness and natural areas. As the site of one of the iconic Spanish missions in California and the home of California Polytechnic State University, SLO occupies a unique place in the history of the state. These establishments have given rise to many local shops and restaurants, which have created a unique character in this college town. TOP EMPLOYERS California Polytechnic State University County of San Luis Obispo Department of State Hospitals- Atascadero Pacific Gas & Electric California Men s Colony Cal Poly Corp. Tenet Healthcare Compass Health Inc. Lucia Mar Unified School District Paso Robles Public Schools 22 OFFERING MEMORANDUM

23 CAL POLY SAN LUIS OBISPO California Polytechnic State University, San Luis Obispo, also known as Cal Poly Slo, is a nationally ranked public university located in San Luis Obispo on California s sunny Central Coast. With six colleges, the university offers 64 bachelor s degrees, 32 master s degrees, and 7 teaching credentials. ECONOMIC IMPACT OF THE UNIVERSITY Annual spending related to Cal Poly SLO generates a total economic impact of $469 million on the regional economy, and nearly $951 million on the statewide economy. This impact sustains more than 5,000 jobs in the region and nearly 8,500 jobs statewide. Per year, the impact generates nearly $90.6 million in local and statewide tax revenue. 20,944 $951 MILLION 8,500 NUMBER OF STUDENTS ECONOMIC IMPACT ON LOCAL AND STATEWIDE ECONOMY STATEWIDE JOBS SUSTAINED MATTHEWS REAL ESTATE INVESTMENT SERVICES 23

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25 25 TENANT OVERVIEW

26 SMART & FINAL STORES, INC. Smart & Final Extra! is headquartered in Los Angeles, where it was started 140 years ago. Smart & Final Stores, Inc. operates approximately 300 grocery and foodservice stores under the Smart & Final, Smart & Final Extra! and Cash&Carry Smart Foodservice banners in California, Oregon, Washington, Arizona, Nevada, Idaho and Northern Mexico. SMART & FINAL EXTRA! CONCEPT Smart & Final Extra!, one of the company s newest store concepts, is designed to enhance the household consumer s shopping experience and also includes changes to benefit business customers. Smart & Final Extra! stores are much larger than a typical Smart & Final warehouse store and full of extra features. The stores carry a greatly expanded selection of products in key categories like produce, fresh meat, frozen foods, dairy, deli and grocery basics like cereal, yogurt, bread and snacks. Smart & Final Extra! combines the high quality fresh produce of a farmer s market, the low prices of a discount grocer and the large club size products of a traditional club store. Smart & Final Extra! also carry thousands of items in smaller, convenient sizes. In addition, Smart & Final Extra! have everything that small businesses, clubs and organizations need on a daily basis. Smart & Final is finding success in the Extra! locations with a 15.2% increase in net sales by end of third fiscal quarter 2016 compared to the same period of # OF LOCATIONS # OF EMPLOYEES ANNUAL SALES ±300 ±11,900 $4.34 BILLION 26 OFFERING MEMORANDUM

27 Typical differences between the two concepts include: High quality fresh produce Organic and Natural Products Fresh and frozen products Larger Fomat Grocery basics Smaller convenient sizes Bulk foods In-house bakery MATTHEWS REAL ESTATE INVESTMENT SERVICES 27

28 28 OFFERING MEMORANDUM O F F E R I N G M E M O R A N D U M

29 CONFIDENTIALITY AND DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Smart & Final located at 8200 El Camino Real, Atascadero, CA ( Property ). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence. By acknowledging your receipt of this Offering Memorandum for the Property, you agree: The Offering Memorandum and its contents are confidential;you will hold it and treat it in the strictest of confidence; and You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller. Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered. If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum. A prospective purchaser s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property. This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.

30 EXCLUSIVELY LISTED BY EL WARNER EVP & NATIONAL DIRECTOR Direct Mobile Lic. No LINDSAY TSUMPES AVP & DIRECTOR Direct Mobile Lic. No KYLE MATTHEWS CEO & CHAIRMAN Direct Mobile Lic. No