FIVE MILE PLAZA. Albertsons-Anchored Neighborhood Shopping Center W Overland Rd, Boise, ID [

Transcription

1 FIVE MILE PLAZA Albertsons-Anchored Neighborhood Shopping Center W Overland Rd, Boise, ID [ ]

2 Contents SECTION 01 EXECUTIVE SUMMARY OVERVIEW INVESTMENT HIGHLIGHTS...05 LEASING ACTIVITY SUMMARY...06 ALBERTSONS FACTS...07 GROCERY COMPETITION...08 SOUTHWEST BOISE AREA DEVELOPMENT...09 DIVERSIFIED TENANT MIX...10 LEASE COMPS...11 NOI & CASH FLOW TRENDS...12 Q&A WITH CAPITAL PACIFIC SECTION 02 SITE & BUILDING SURROUNDING RETAIL...15 AERIAL...16 SITE PLAN...17 FEATURED PHOTOS SECTION 03 LOCATION DEMOGRAPHICS...21 MARKET ANALYSIS...22 BOISE AREA INFO...23 SECTION 04 UNDERWRITING FINANCIAL ANALYSIS...25 RENT ROLL OPERATING EXPENSES...28 REIMBURSEMENTS...29 CASH FLOW ANALYSIS ARGUS ASSUMPTIONS...31 REPLACEMENT COST ANALYSIS...32 ALBERTSONS LEASE ABSTRACT...33 CONTACT INFORMATION...34

3 SECTION 01 EXECUTIVE SUMMARY OVERVIEW INVESTMENT HIGHLIGHTS...05 LEASING ACTIVITY SUMMARY...06 ALBERTSONS FACTS...07 GROCERY COMPETITION...08 SOUTHWEST BOISE AREA DEVELOPMENT...09 DIVERSIFIED TENANT MIX...10 LEASE COMPS...11 NOI & CASH FLOW TRENDS...12 Q&A WITH CAPITAL PACIFIC FIVE MILE PLAZA 3

4 FIVE MILE PLAZA PRICE: $16,650,000 IN-PLACE CAP: 6.50% PRICE PER SF: $109 Five Mile Plaza is a highly-visible, strong performing Albertsons-anchored shopping center within an affluent trade area in Southwest Boise. Albertsons has a 39-year legacy in this location and recently completed a full interior and exterior renovation. Leasing momentum has been strong, with several new leases and extensions recently completed within the shopping center. CASH-ON-CASH YIELD % 10-YEAR LEVERED IRR % OCCUPANCY...88% LEASABLE SF...±153,233 SF LAND AREA...±579,348 SF (13.3 Acres) YEAR BUILT (Remodeled 2014) AVG CURRENT RENTS...$8.57/SF PARKING...±644 or 4.2/1,000 SF ANCHORS...Albertsons (Included) DEBT Free & Clear ADDRESS: W Overland Rd, Boise, ID FIVE MILE PLAZA 4

5 Investment Highlights Market Leader ALBERTSONS EXHIBITS STRONG AND INCREASING STORE SALES. Anchor tenant with extremely healthy rent-to-sales ratios provides significant long-term stability. Recently renovated with new facade and building upgrades totaling nearly $1.5M. Boise experiencing exceptional population and job growth. Limited grocery competition in trade area. More than 50% lift in NOI over 10-year cash flow. NEIGHBORHOOD SHOPPING CENTER PRICED WELL BELOW REPLACEMENT COST. Overland Road and Five Mile intersection is the premier hard corner within the submarket. Significant number of new leases and extensions creating leasing momentum within the shopping center. STRONG PURCHASING POWER AMONG CLOSE IN DEMOGRAPHIC. Nearly 2,500 new residential units in various stages of development within close proximity. YIELD UPSIDE POTENTIAL UPON LEASE UP of available space. HIGH COMBINED TRAFFIC of over 45,000 vehicles per day within DENSE TRADE AREA. LOW RETAIL VACANCY RATES IN SUBMARKET. OFFERED FREE AND CLEAR OF DEBT. FIVE MILE PLAZA 5

6 Recent Leasing Activity Summary 1 ALBERTSONS FULL INTERIOR AND EXTERIOR RENOVATION COMPLETED IN IDAHO GOLD & SILVER SF: 1,608 TERM: JANUARY YEAR EXTENSION TO DECEMBER WILD BIRDS UNLIMITED SF: 1,700 TERM: OCTOBER YEAR, 2-MONTH EXTENSION TO NOVEMBER KEN'S BICYCLES SF: 5,610 TERM: JUNE YEAR EXTENSION TO JUNE NORTHWEST PETS SF: 4,184 TERM: JULY YEAR 3-MONTH TERM PPSF: $10.00/SF WITH 2% ANNUAL INCREASES 6 BOISE S BEST MARKETPLACE SF: 14,750 TERM: FEBRUARY YEAR TERM PPSF: $4.00/SF - BUMPS TO $5.50/SF IN YEAR 3 7 MRS. BEESLEY'S SF: 1,965 TERM: JULY YEAR EXTENSION TO JUNE CURVY GIRL KATE S SF: 2,174 TERM: MARCH YEAR TERM PPSF: $10.00/SF WITH 3% ANNUAL INCREASES 9 MEDITERRANEAN MARKET SF: 1,500 TERM: SEPTEMBER YEAR TERM PPSF: $ COUNTRY DONUTS SF: 2,489 TERM: AUGUST YEAR EXTENSION TO JULY THE UPS STORE SF: 1,334 TERM: OCTOBER YEAR OPTION EXTENSION TO SEPTEMBER 2021 NEARLY $1.5M INVESTED INTO SHOPPING CENTER IN 2014 FOR EXTERIOR RENOVATION AND BUILDING UPGRADES

7 Albertsons Facts 22 YEAR Legacy in this Location ALBERTSONS NATIONAL STATISTICS 2,205 LoCATIONS in 33 States 265,000 FULL Interior & Exterior RENOVATION Completed in 2014 Demonstrates Commitment to the Site BOise, ID Five mile Plaza ALBERTSONS BELOW-MARKET RENT 1939 $5.31/SF vs. $8.00/SF EMPLOYEES FOUNDED B+ Headquarters S&P Credit Rating DOMINANT GROCER IN TREASURE VALLEY GROCER LOCATIONS ALBERTSONS 18 WALMART 10 FRED MEYER 7 WINCO 5 GROCERY OUTLET 3 FIVE MILE PLAZA 7

8 Grocery Competition LIMITED GROCERY COMPETITION Albertsons is the dominant grocer in the Boise MSA with nearly double the number of locations of the second leading grocer. The Property benefits from a dense location with a trade area that extends several miles south and west due to limited competition to the south of Interstate 84. Notably, only three neighborhood grocers compete within a five mile radius of the Subject, with minimal grocer competition directly south MILES 3 MILES 84.5 MILES S ORCHARD ST FIVE MILE PLAZA 84 FIVE MILE PLAZA 8

9 Southwest Boise Area Development 1 SOUTHCREEK DEVELOPMENT 2 3 Location: NW Corner of W Amity Rd and S Maple Grove Rd Development: 215 Lots including 40 townhomes, 16 duplexes and 159 single family residences. CLICK HERE FOR MORE INFO ANTLER RIDGE Location: S Cloverdale Rd and W Pontler St Development: 27 New Construction Single Family Residences ARALAR PARK 84 5 ARALAR PARK 3 SOUTHERN LANDING FIVE MILE PLAZA 6 RETREAT AT UNION SQUARE Location: NE Corner of Overland Rd and Lizaso Ave Development: 27 New Construction Single Family Residences 4 PEPPERMILL ESTATES 4 PEPPERMILL ESTATES 5 6 Location: East of Cloverdale Rd between Victory Rd. and Hollandale Dr. Development: 50 New Construction Single Family Residences SOUTHERN LANDING Location: SE Corner of Cloverdale Rd. and Franklin Rd. Development: 64 New Construction Single Family Residences RETREAT AT UNION SQUARE Location: 1461 S Goldking Way Development: Brand New 82-unit Upscale Apartment Building 2 ANTLER RIDGE 1 SOUTHCREEK DEVELOPMENT 7 SYRINGA VALLEY DEVELOPMENT Location: 6298 S Cole Road Development: Plans to develop 2,000 single family residences along with schools, a city park and two commercial areas over the next two decades. Phase I calls for 453 homes. CLICK HERE FOR MORE INFO SYRINGA VALLEY DEVELOPMENT 7 FIVE MILE PLAZA 9

10 Diversified Tenant Mix GROCERY Albertsons, Mrs. Beesley s HEALTH & FITNESS PROFESSIONAL SERVICE Johnny s Fit Club, Dragon Bushido Martial Arts Wells Fargo, State Farm Insurance, Lifetime Optometry RETAIL Curvy Girl Kate s, Frameworks, Ken s Bicycle, Northwest Pets, Wild Birds Unlimited, Idaho Gold & Silver, Boise s Best Marketplace, Idaho Youth Ranch FOOD Country Donuts, Subway, Great Wall Restaurant, Jack in the Box, Mo s Mediterranean Market PERSONAL SERVICE Martinizing Dry Cleaners, Sky Nails, The Look Hair Salon, The UPS Store AVAILABLE 12% 31% GROCERY 29% RETAIL 11% FOOD HEALTH & FITNESS 10% PERSONAL SERVICE 3% PROFESSIONAL SERVICE 4% FIVE MILE PLAZA 10

11 Lease Comps GROUND LEASE JUNIOR ANCHOR 1 WELLS FARGO NAMPA 5607 E FRANKLIN RD. SIZE: 5,000 SF $33/SF 3 TEXAS ROADHOUSE NAMPA 1830 CALDWELL BLVD. SIZE: ~7,000 SF $13.57/SF 5 FAMILY DOLLAR BOISE SIZE: 5,050 SF $9.96/SF 7 IDAHO YOUTH RANCH BOISE FIVE MILE PLAZA SIZE: 13,554 SF $8.51/SF 2 CAFÉ OLE MERIDIAN 3284 E PINE AVE. SIZE: 5,976 SF $12.88/SF 4 MCDONALD S MERIDIAN 3251 E UPSTICK RD. $8.00/SF NNN SIZE: 4,762 SF $15.54/SF 6 JOHNNY S FIT CLUB BOISE FIVE MILE PLAZA SIZE: 10,000 SF $9.00/SF 8 IDAHO YOUTH RANCH BOISE NORTHGATE SHOPPING CENTER 8,798 SF $9.31/SF Five Mile Plaza displays significant upside potential upon lease up of the available remaining units. The lease up of the junior anchor suite alone will potentially garner an investor a yield increase of more than 50 basis points. Additionally, upon expiration of the ground leased pads in 2020 there is potential for increased rental income as the Wells Fargo pad exhibits below market rent. FIVE MILE PLAZA FIVE MILE PLAZA 11

12 NOI & Cash Flow Trends NOI & CASH FLOW TREND $1,750,000 $1,400,000 $1,050,000 During the 10-year cash flow analysis period the Property exhibits excellent growth potential with a more than 50% lift in net operating income. $700,000 $350,000 $0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 NET OPERATING INCOME CASH FLOW BEFORE DEBT SERVICE FIVE MILE PLAZA 12

13 Q&A with Capital Pacific Q: HAS THERE BEEN ANY ENVIRONMENTAL STUDIES ON THE PROPERTY? A: Yes, a phase II investigation was performed on August 31, 2010 to address the concerns from a phase I report that identified a potential for impacts from a historic dry cleaning operation. Based on the results of laboratory testing, no evidence of solvents related to dry cleaning operations was detected in the assessed areas. No additional investigation was recommended. Q: DO ANY TENANTS HAVE EXCLUSIVE USE PROVISIONS? A: Yes, several tenants have exclusive use clauses, they are listed below: Albertsons: Grocery Store Country Donuts: Donuts The UPS Store: Shipping and Packaging Services Dragon Bushido Martial Arts: Martial Arts Studio Subway: Sandwiches in the Pad Building Only Northwest Pets: Pet Supplies Wild Birds Unlimited: Bird related supplies and feed. Idaho Gold & Silver: Trading of gold and silver. Jack in the Box: Hamburger and taco oriented business. DO ANY TENANTS HAVE PERCENTAGE RENT CLAUSES? A: Yes, Albertsons shall pay percentage rent of 1% of annual gross sales over a breakpoint of $23,000,000. The percentage rent shall also deduct any additional rent payable by the tenant for Taxes, Insurance and Common Area costs. Q: HOW LONG HAS THE AVAILABLE JUNIOR ANCHOR SUITE BEEN VACANT? A: The available junior anchor unit was previously part of a larger availability of nearly 22,000 SF. The suite had a long vacancy before Johnny s Fit Club leased 46% of the space in The suite is now 11,714 SF, a size that is much more marketable to junior box retailers in this time of stores consolidating to smaller footprints. Q: HOW MUCH WAS SPENT ON THE 2014 RENOVATION OF THE PROPERTY AND WHAT DID IT ENTAIL? A: Approximately $1,500,000 was spent on the exterior facades in 2014/2015, including an extensive Albertson s interior and exterior remodel. The property owner also completed the interior remodel of the 23,000 SF junior anchor space to accommodate Johnny s Fit Club in early Albertson s completed a full interior remodel simultaneously, but the estimated cost of this remodel was not disclosed. 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. FIVE MILE PLAZA 13

14 SECTION 02 SITE & BUILDING SURROUNDING RETAIL...15 AERIAL...16 SITE PLAN...17 FEATURED PHOTOS

15 ADDITIONAL RETAIL Surrounding Retail BOISE TOWNE PLAZA Dave & Buster s Famous Footwear Men s Wearhouse MERIDIAN CROSSROADS Bed Bath & Beyond PetSmart Nordstrom Rack Old Navy Red Lobster Ross Sportsman s Warehouse WESTPARK AT&T Carl s Jr Cricket Wireless Mattress Firm Noodles & Company BOISE TOWNE SQUARE JCPenney Kohl s Macy s Sears Red Robin Ross Sprint Store Target T-Mobile FULL LIST OF RETAILERS Aaron s Albertsons AutoZone Bed Bath & Beyond Burger King Carl s Jr Chuck E. Cheese s D&B Supply Dollar Tree Domino s Pizza DQ Grill & Chill Fred Meyer Gordmans Grocery Outlet Hastings Entertainment Home Depot IHOP Jimmy John s Fred Meyer KFC Les Schwab Tire Center Lowe s Majestic Cinemas O Reilly Auto Parts Outback Steakhouse Panda Express Papa Murphy s PetSmart Planet Fitness Ross Savers Sonic Drive-In Starbucks Subway Taco Bell T-Mobile Walgreens Walmart Supercenter WinCo Foods ,000 DAILY 84 W OVERLAND RD 116,500 DAILY FIVE MILE PLAZA S ORCHARD ST 19,519 DAILY 84 76,500 DAILY BOISE AIRPORT FIVE MILE PLAZA 15

16 Aerial FIVE MILE PLAZA FIVE MILE PLAZA 16

17 Site Plan SITE PLAN KEY LAND AREA: BUILDING AREA: AVAILABLE: NOT A PART: TRASH/RECYCLE: PYLON SIGN: PARCEL OUTLINE: INGRESS/EGRESS: ±13.3 ACRES ±153,518 SF S FIVE MILE RD 17,117 DAILY B *Site Plan Not To Scale SINCLAIR GAS STATION DRIVE-THRU DRIVE-THRU W Overland RD 28,765 DAILY Suite Tenant SF Suite Tenant SF Suite Tenant SF Suite Tenant SF Wells Fargo 3, State Farm Insurance 1, Mo s Mediterranean Market 1, Country Donuts 2, Johnny s Fit Club 10, B Available 11, Curvy Girl Kate s 2, Mrs. Beesley s 1, Available 1, Dragon Bushido Martial Arts 4, Great Wall Restaurant 8, The UPS Store - Storage Martinizing Dry Cleaners Sky Nails 1, The Marketplace 14, Available 1, Available 1, Subway 1, Frameworks 1, The Look Hair Salon The UPS Store 1, Northwest Pets 4, Idaho Youth Ranch 13, Lifetime Optometry 1, Ken s Bicycle Warehouse 5, Wild Birds Unlimited 1, Available 1, Idaho Gold & Silver 1, Jack in the Box 2, Albertsons 46,328 PK-A&B M&L Emissions Parking FIVE MILE PLAZA 17

18 Featured Photos 3 3

19 Featured Photos 3 3

20 SECTION 03 LOCATION DEMOGRAPHICS...21 MARKET ANALYSIS...22 BOISE AREA INFO...23

21 Demographics DRIVE TIME DEMOGRAPHICS POPULATION 5-Min 10-Min 15-Min ,837 99, , , , , , , ,869 5 MIN 10 MIN 15 MIN 2016 HH INCOMES 5-Min 10-Min 15-Min AVERAGE $85,645 $72,456 $69,269 MEDIAN $68,601 $54,612 $51,349 FIVE MILE PLAZA 1 MILES RADIUS DEMOGRAPHICS POPULATION 1-Mile 3-Miles 5-Miles ,932 72, , ,964 79, , ,788 86, ,120 3 MILES 5 MILES 2016 HH INCOMES 1-Mile 3-Miles 5-Miles AVERAGE $88,006 $70,489 $70,440 MEDIAN $73,105 $52,547 $52,521 FIVE MILE PLAZA 21

22 Market Analysis New Construction Overall Rental Rate vs. Vacancy 1,500,000 SF 1,200,000 SF 1,384,000 SF $13.00 $ % 9% 900,000 SF 600,000 SF 780,000 SF 558,00 SF 634,000 SF $12.00 $ % 7% 300,000 SF ,000 SF 178,000 SF 23,000 SF 246,000 SF 335,000 SF 40,000 SF $11.00 $ % 5% 75% of Construction Year to Date has been Speculative Source: TOK Commercial $ Q Q Q Q Q Q4 4% Submarket Vacancy Asking Rent PSF/Mo Overall Vacancy Rate Source: Cushman & Wakefield 12% 10% 8% VACANCY RATES 6% Vacancy rates in Boise continue to decline with the lack of new construction and significant increase in population and job growth. The Southwest (subject s submarket) is among the lowest-vacancy submarkets within the MSA with a vacancy rate hovering near 5% 4% 2% CONSTRUCTION & ABSORPTION TRENDS New retail development has been very limited over the past three years, which has allowed the Boise MSA to maintain very healthy vacancy rates, exhibiting an average overall rate of 5.8%. 0% Central Bench Downtown Eagle Meridian Garden City Northwest Northend Southeast FIVE MILE PLAZA NEIGHBORHOOD Southwest West Bench Downtown Nampa Idaho Center Karcher South Nampa Caldwell Source: Colliers International FIVE MILE PLAZA 22

23 Boise Area Info BOISE OVERVIEW Boise is located in southwestern Idaho, about 41 miles east of the Oregon border, and 110 miles north of the Nevada border. Boise is the capital city and largest city in Idaho. The economy is a diverse blend of agriculture, agricultural processing, manufacturing, and high tech industries. ECONOMY Boise is headquarters for several companies including Boise Cascade LLC, Albertsons, WinCo Foods, and Idaho Pacific Lumber Company. The area s largest private, locally based employer is Micron Technology, employing over 9,500. TRANSPORTATION The major interstates serving Boise are I-84 and I-184. Interstate 84 connects Boise with Portland, Oregon and Salt Lake City, Utah. MAJOR ATTRACTIONS Extensive hiking and biking are major attractions in the Boise area. The Bogus Basin ski area is located 16 miles from the city limits and hosts multiple winter activities including skiing, snowboarding, crosscountry skiing, and snow tubing. Boise is a regional hub for jazz, theater, and music. The Gene Harris Jazz Festival is hosted in Boise each spring, attracting spectators from surrounding areas. COMPANY BOISE TOP 10 EMPLOYERS ± EMPLOYEES Micron Technology, Inc. 9,500 Saint Luke s Regional Medical Center 4,250 Hewlett-Packard Company 4,000 J.R. Simplot Co. 3,800 Albertsons 3,800 Saint Alphonsus Regional Medical Center 3,373 Boise State University 2,895 DirecTV 1,400 Wal-Mart 1,200 Fred Meyer 1,200 BOISE STATE UNIVERSITY Boise State University is Idaho s fastest-growing research enterprise. In less than a decade, Boise State has more than doubled their out-of-state student enrollment and boosted the number of bachelor s, master s and doctoral degrees awarded each year by 52 percent. Current enrollment is over 22,000, which is the largest public university in the state. 11% JOB GROWTH FROM 2006 TO % POPULATION GROWTH BETWEEN OVER THE NATIONAL AVERAGE 3.6% UNEMPLOYMENT RATE (LOWEST COMPARED TO NEIGHBORING METRO AREAS) FIVE MILE PLAZA 23

24 SECTION 04 UNDERWRITING FINANCIAL ANALYSIS...25 RENT ROLL OPERATING EXPENSES...28 REIMBURSEMENTS...29 CASH FLOW ANALYSIS ARGUS ASSUMPTIONS...31 REPLACEMENT COST ANALYSIS...32 ALBERTSONS LEASE ABSTRACT...33 CONTACT INFORMATION...34

25 Financial Analysis PRICE $16,650,000 Capitalization Rate 6.50% Price Per Foot $109 NET OPERATING INCOME SUMMARY IN-PLACE SCHEDULED INCOME Per SF Scheduled Rent: 6/1/2017 $8.57 $1,155,611 Plus: Rent Increases Through 5/31/2018 $0.06 $8,142 Plus: Expense Reimbursement $2.39 $322,897 Equals: Scheduled Gross Income $11.02 $1,486,650 Current Vacancy 12% Equals: Effective Gross Income (EGI) $11.02 $1,486,650 Less: OPERATING EXPENSES Per SF CAMS $1.21 $184,985 Property Taxes $1.04 $159,655 Insurance $0.15 $23,511 Management Fee 2.5% of EGI $0.24 $36,559 Total Operating Expenses $2.64 ($404,709) Equals: NET OPERATING INCOME $1,081,941 LEVERAGED RETURN CALCULATION Proposed New Loan : 70.00% $11,655,000 Interest Rate 4.50% Amortization 30 Payment - Principal & Interest: ($708,650) Start Date Jun-17 Equity Requirement: $4,995,000 Debt Coverage Ratio: 1.53 Debt Constant: 6.08% Net Operating Income: $1,081,941 Less: Total Annual Debt Service ($708,650) Equals: Pre-Tax Cash Flow $373,291 Pre-Taxed Leveraged Cash-on-Cash Return: 7.47% LOAN SUMMARY The following loan summary is for consideration purposes only, and not a guarantee of loan terms. The rates and terms are subject to market fluctuation. For more information please contact David Schaffer of Melvin Mark Capital Group. PROPOSED LOAN TERMS LOAN TO VALUE: 70% TERM: 10-Year Term RATE: 4.50% AMORTIZATION: 30-Year RECOURSE: No FOR MORE INFORMATION DAVID SCHAFFER Melvin Mark Capital Group (503) dschaffer@melvinmarkcapital.com Plus: Principal Paydown Year 1 188,022 Equals: Cash Flow Including Paydown $561,312 Yield After Principal Reduction: 11.24% 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. FIVE MILE PLAZA 25

26 Rent Roll Tenant Name Suite Size % of SF TENANT INFO LEASE TERMS CURRENT RENT RENT INCREASES OPTIONS Occupancy Date Lease Expiration Monthly Base Rent Rent/SF/YR Date Monthly Albertsons Anchor 46, % 10/8/94 10/8/19 $20,518 $ Year Options NNN comments: Exclusive use for grocery store and pharmacy. Flat 90 Days Notice Johnny's Fit Club Jr Anchor 10, % 2/19/15 2/28/26 $8,418 $ /1/18 $8,833 $1, Year Option NNN comments: Tenant shall furnish sales annually. Tenant's lease has a personal guarantee. $0.50/SF Annual Increases No Increase in Year 11 3% Annual Increases 360 Days Notice Available Jr Anchor 11, % $8,786 $9.00 NNN Additional Annual LEASE TYPE Wells Fargo Pad B 3, % 6/1/80 5/31/20 $3,000 $11.65 Ground Comments: Ground Lease. State Farm Insurance Shops E 1, % 1/1/09 12/31/18 $2,084 $ /1/18 $2,146 $ Year Options NNN 3% Annual Increases 180 Days Notice Mediterranean Market Shops E 1, % 4/11/17 4/30/22 $1,155 $9.24 NNN comments: Lease estimated to commence 4/11/17. Tenant is the same business owner as Country Donuts. Tenant is expanding into this adjacent suite. Country Donuts Shops E 2, % 8/1/09 7/31/24 $3,926 $ /1/17 $4,044 $1, Year Options NNN comments: Tenant to report sales annually. Exclusives for donuts. 3% Annual Increases 3% Annual Increases 180 Days Notice Curvy Girl Kate's Shops D 2, % 1/1/17 12/31/19 $1,812 $ /1/18 $1,866 $ Year Option NNN comments: Year one option rent will be the greater of FMR and a 3% increase over previous 3% Annual Increases 3% Annual Increases rent. Tenant must furnish sales monthly. Lease is personally guaranteed. 180 Days Notice Mrs. Beesley's Shops D 1, % 5/1/09 6/30/20 $2,103 $ /1/19 $2,162 NNN comments: Tenant to report sales monthly. Tenant shall pay a percentage rent of 5% over a natural breakpoint. Tenant recently extended for additional three years. Available Shops D 1, % $1,468 $11.00 NNN Boise's Best Marketplace Retail A 14, % 2/12/17 2/28/25 $4,917 $4.00 3/1/18 $5,531 $1, Year Option NNN comments: Tenant to start paying NNN in November Lease is personally guaranteed. 3/1/19 $6,760 FMR > Prior 3/1/22 $7, Days Notice Available Shops C 1, % $1,399 $11.00 NNN Available Shops C 1, % $1,654 $11.00 NNN Dragon Bushido Martial Arts Shops C 4, % 5/15/12 5/31/17 $2,400 $ Year Option NNN comments: Exlusives for a martial arts studio. Lease has a personal guarantee. FMR > Prior 180 Days Notice The UPS Store Pad A 1, % 10/1/91 9/30/21 $2,252 $ /1/17 $2,320 $541 NNN comments: Exclusives for shipping and package services. Tenant will have a termination 3% Annual Increases option if Landlord were to lease more than 10,000 SF to a office supply store. Martinizing Dry Cleaners Pad A % 10/1/07 10/31/21 $1,045 $ /1/19 $1,077 NNN 10/1/20 $1,109 Sky Nails Pad A 1, % 3/25/14 3/31/19 $2,381 $15.70 NNN comments: Tenant shall report sales annually. Subway Pad A 1, % 9/5/12 9/30/22 $2,781 $ /1/17 $2,865 $ Year Options NNN comments: Initial option period rents are the greater of fair market rent and the previous 3% Annual Increases 3% Annual Increases year rent. Tenant to report sales annually. Exclusive use for sandwiches in the Pad building. 180 Days 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. FIVE MILE PLAZA 26

27 Rent Roll Cont. Tenant Name Suite Size % of SF TENANT INFO LEASE TERMS CURRENT RENT RENT INCREASES OPTIONS Occupancy Date Lease Expiration Monthly Base Rent Rent/SF/YR Date Monthly Frameworks Pad A 1, % 10/1/12 9/30/22 $1,673 $ /1/17 $1,723 $401 NNN 3% Annual Increases The Look Hair Salon Pad A % 2/1/96 5/31/19 $1,279 $ /1/17 $1,317 $ Year Option NNN comments: Initial option rent will be the greater of a 3% increase and fair market rent. 3% Annual Increases 3% Annual Increases 180 Days Notice The UPS Store - Printing Room Pad A % 4/1/10 9/30/21 $464 $ /1/17 $477 $111 NNN 3% Annual Increases Great Wall Restaurant Shops B 8, % 11/1/09 8/31/25 $5,883 $8.80 9/1/19 $6, Year Option NNN comments: Option period rent of $6,685/mo years 1-3 and $6,952/mo years /1/22 $6,418 see comment 180 Days Notice Northwest Pets Shops B 4, % 7/14/16 10/31/24 $3,556 $ /1/18 $3,628 $ Year Option NNN comments: Initial option rent is the greater of fair market rent and a two percent increase 2% Annual Increases 2% Annual Increases over previous year. Tenant must report sales monthly. Exclusives for the sale of pet 180 Days Notice supplies. Lease has a personal guarantee. Idaho Youth Ranch Shops B 13, % 5/1/13 4/30/21 $9,849 $8.72 5/1/18 $10,095 $ Year Option NNN comments: Tenant to furnish sales annually. 2.5% Annual Increases 2.5% Annual Increases 180 Days Notice Lifetime Optometry Shops B 1, % 6/1/02 2/28/22 $1,519 $ /1/18 $1,561 $125 NNN comments: Tenant to report sales monthly. Tenant recently signed 5-year extension 2.75% Annual Increases Ken's Bicycle Shops A 5, % 4/5/10 5/31/24 $4,441 $9.50 6/1/19 $4, Year Option NNN comments: Lease is personally guaranteed. 3% Annual Increases FMR 180 Days Notice Wild Birds Unlimited Shops A 1, % 9/1/06 11/30/22 $2,155 $ /1/17 $2,219 $388 NNN comments: Tenant to report sales monthly. Exclusive for bird related supplies and feed. 3% Annual Increases Lease has a personal guarantee. Available Shops A 1, % $1,540 $15.00 Additional Annual LEASE TYPE Idaho Gold & Silver Shops A 1, % 1/1/12 12/31/17 $1,339 $9.99 NNN comments: Exclusives for the trading of gold and silver. Jack in the Box Pad 2, % 9/16/01 9/15/21 $4,426 $ Year Options Ground Comments: Ground Lease. CPI increases every five years not to exceed 10%. Exclusives for CPI Increases hamburger and taco oriented business. Tenant has ROFR if demised premises only was 120 Days Notice offered for sale. M&L Emissions PK-A&B 0 0.0% 5/1/93 8/31/18 $927 n/a 9/1/17 $955 $250 Gross comments: Landlord has a termination right given 30 days notice. Totals: 153, % $111,146 $8.70 $8,142 Occupied 134,908 88% $96,301 $8.57 Leasable 18,325 12% $14,846 $9.72 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. FIVE MILE PLAZA 27

28 Operating Expenses PROJECTED OPERATING EXPENSES REIMBURSEMENTS Total /SF Notes In-Place CAMS $184,985 $ $138,564 Property Taxes $159,655 $ $140,562 Insurance $23,511 $ $19,464 Management Fee $36,559 $ $24,308 Total Expenses $404,709 $2.64 $322,897 Notes: NOTES: 1) BASED ON 2016 OPERATING BUDGET. 2) BASED ON ADA COUNTY TAX ASSESSMENT. 3) BASED ON 2.5% OF STABILIZED EGI. 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. FIVE MILE PLAZA 28

29 Reimbursements Tenant Name Size Pro Rata % Pro Rata CAM Pro Rata Property Taxes Pro Rata Insurance Pro Rata Management Notes Tenant Totals Expense Totals $184,985 $159,655 $23,511 $36,559 Albertsons 46, % $22,237 $48,269 $1,941 $0 1, 2, 3 $72,448 Johnny's Fit Club 10, % $12,324 $10,419 $2,120 $2,984 4 $27,847 Available 11, % $14,437 $12,205 $2,484 $3,495 4 $0 Wells Fargo 3, % $0 $3,219 $0 $0 $3,219 State Farm Insurance 1, % $1,836 $1,469 $299 $360 4 $3,964 Mediterranean Market 1, % $1,887 $1,563 $318 $377 4 $4,145 Country Donuts 2, % $3,590 $2,593 $528 $671 4 $7,382 Curvy Girl Kate's 2, % $2,715 $2,265 $461 $653 4 $6,094 Mrs. Beesley's 1, % $3,068 $2,047 $417 $553 4 $6,086 Available 1, % $2,009 $1,668 $339 $482 4 $0 Boise's Best Marketplace 14, % $17,600 $15,368 $3,127 $4,331 4 $40,427 Available 1, % $2,092 $1,590 $324 $481 4 $0 Available 1, % $2,435 $1,880 $383 $564 4 $0 Dragon Bushido Martial Arts 4, % $6,938 $4,793 $975 $1,525 4 $14,231 The UPS Store 1, % $2,603 $1,390 $283 $260 5 $4,536 Martinizing Dry Cleaners % $1,457 $749 $152 $236 4 $2,594 Sky Nails 1, % $3,643 $1,896 $386 $711 4 $6,637 Subway 1, % $5,434 $1,771 $360 $865 6 $8,430 Frameworks 1, % $1,982 $1,047 $213 $389 4 $3,631 The Look Hair Salon % $2,037 $1,001 $204 $324 4 $3,567 The UPS Store - Printing Room % $810 $469 $95 $ $1,455 Great Wall Restaurant 8, % $12,110 $8,358 $1,701 $2,217 4 $24,386 Northwest Pets 4, % $4,994 $4,359 $887 $1,229 4 $11,469 NOTES: 1) TENANT REIMBURSES FOR FIXED AMOUNT OF CAM S; CURRENTLY $0.48/SF AND TO BE ADJUSTED EVERY FIVE YEARS. 2) TENANT ONLY REIMBURSES FOR LIABILITY INSURANCE AND DOES NOT REIMBURSE BUILDING INSURANCE. 3) TENANT DOES NOT REIMBURSE FOR MANAGEMENT. 4) MANAGEMENT REIMBURSEMENT BASED ON PERCENTAGE OF ALL OPERATING EXPENSES. 5) MANAGEMENT REIMBURSEMENT BASED ON PERCENTAGE OF CAM S ONLY. 6) MANAGEMENT REIMBURSEMENT BASED ON PERCENTAGE OF CAM S AND TAXES, EXCLUDES INSURANCE. 7) ANALYSIS ASSUMES TENANTS HAVE SEPARATELY METERED UTILITIES AND APPLIES WATER REIMBURSEMENT ACCORDING TO BUDGET PROVIDED. Idaho Youth Ranch 13, % $16,818 $14,122 $2,874 $4,058 4 $37,872 Lifetime Optometry 1, % $1,346 $1,130 $230 $271 4 $2,978 Ken's Bicycle 5, % $6,851 $5,845 $1,189 $1,389 4 $15,275 Wild Birds Unlimited 1, % $2,107 $1,771 $360 $424 4 $4,663 Available 1, % $2,477 $1,750 $356 $458 4 $0 Idaho Gold & Silver 1, % $1,997 $1,675 $341 $401 4 $4,415 Jack in the Box 2, % $2,178 $2,969 $0 $0 3 $5,147 M&L Emissions 0 0.0% $0 $0 $0 $0 $0 TOTAL 100% $162,013 $159,655 $23,349 $29,788 $322,897 Notes: 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. FIVE MILE PLAZA 29

30 Cash Flow Analysis ARGUS ANALYSIS CLICK HERE TO DOWNLOAD Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 For the Years Ending May-2018 May-2019 May-2020 May-2021 May-2022 May-2023 May-2024 May-2025 May-2026 May-2027 Potential Gross Revenue Base Rental Revenue $1,330,741 $1,383,988 $1,422,121 $1,499,089 $1,534,504 $1,584,285 $1,634,593 $1,693,008 $1,757,638 $1,810,850 Absorption & Turnover Vacancy ($169,306) ($57,696) ($13,367) ($7,596) ($8,072) ($6,582) ($11,078) ($6,291) ($16,590) ($24,097) Base Rent Abatements ($1,206) ($10,450) ($11,947) ($4,558) ($4,540) ($3,949) ($4,799) ($5,678) ($1,369) ($3,600) Scheduled Base Rental Revenue 1,160,229 1,315,842 1,396,807 1,486,935 1,521,892 1,573,754 1,618,716 1,681,039 1,739,679 1,783,153 Expense Reimbursement Revenue CAMS 140, , , , , , , , , ,042 RE Taxes 129, , , , , , , , , ,483 Insurance 16,246 18,680 19,887 20,615 21,213 21,869 22,444 23,210 23,703 24,356 Total Reimbursement Revenue 286, , , , , , , , , ,881 Total Potential Gross Revenue 1,446,661 1,639,328 1,739,619 1,841,728 1,886,955 1,950,179 2,005,188 2,080,590 2,148,327 2,203,034 General Vacancy -11,438-58,463-68,946-70,647-75,112-73,476-81,675-75,156-70,634 Effective Gross Revenue 1,446,661 1,627,890 1,681,156 1,772,782 1,816,308 1,875,067 1,931,712 1,998,915 2,073,171 2,132,400 Operating Expenses CAMS 184, , , , , , , , , ,363 RE Taxes 138, , , , , , , , , ,086 Insurance 23,511 24,216 24,942 25,691 26,461 27,256 28,073 28,915 29,783 30,676 Management 36,167 40,697 42,029 44,320 45,408 46,877 48,293 49,973 51,829 53,310 Total Operating Expenses 383, , , , , , , , , ,435 Net Operating Income 1,063,211 1,229,491 1,270,696 1,348,975 1,380,029 1,425,594 1,468,745 1,521,828 1,581,415 1,625,965 Debt Service Interest Payments 523, , , , , , , , , ,527 Principal Payments 189, , , , , , , , , ,380 Total Debt Service 712, , , , , , , , , ,907 Leasing & Capital Costs Tenant Improvements 120,356 50,545 52,260 10,110 9,276 9,574 15,454 12,530 3,930 33,384 Leasing Commissions 66,066 16,788 14,505 32,220 18,354 14,955 18,175 21,497 5,184 70,684 Total Leasing & Capital Costs 186,422 67,333 66,765 42,330 27,630 24,529 33,629 34,027 9, ,068 Cash Flow After Debt Service $163,883 $449,252 $491,025 $593,739 $639,493 $688,159 $722,210 $774,895 $859,395 $808,990 But Before Taxes =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== 36% INCREASE IN BASE RENTAL REVENUE 53% INCREASE IN NOI Year 10 Unleveraged IRR 9.97% Year 10 Leveraged IRR 17.84% 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. FIVE MILE PLAZA 30

31 Argus Assumptions ARGUS ANALYSIS CLICK HERE TO DOWNLOAD Five Mile Plaza General Tenant Name Suite SF Occupancy Date Lease Expiration Current Rent Per Mo Current Rent PSF Analysis Start Date 6/1/2017 Albertsons Anchor 46,328 10/08/ /08/2019 $ 20,518 $ 5.31 $8.00 Term 10 Years Johnny's Fit Club Jr Anchor 10,000 02/19/ /28/2026 $ 8,418 $ $10.00 Square Footage 153,233 Available Jr Anchor 11,714 ABSORBED 3/1/18 $10.00 General Vacancy Loss 5.00% Wells Fargo Pad B 3,090 06/01/ /31/2020 $ 3,000 $ $20.00 *General Vacancy excludes Albertson's State Farm Insurance Shops E 1,410 01/01/ /31/2018 $ 2,084 $ $18.00 Mediterranean Market Shops E 1,500 04/11/ /30/2022 $ 1,155 $ 9.24 $17.00 Growth Rates Country Donuts Shops E 2,489 08/01/ /31/2024 $ 3,926 $ $19.00 CPI 3.00% Curvy Girl Kate's Shops D 2,174 01/01/ /31/2019 $ 1,812 $ $11.00 Market Rents 3.00% Mrs. Beesley's* Shops D 1,965 05/01/ /30/2020 $ 2,103 $ $11.00 Operating Expenses 3.00% Available Shops D 1,601 ABSORBED 6/1/18 $11.00 Real Estate Taxes 3.00% Boise's Best Marketplace Retail A 14,750 02/12/ /28/2025 $ 4,917 $ 4.00 $8.50 Available Shops C 1,526 ABSORBED 12/1/18 $11.00 Expenses Available Shops C 1,804 ABSORBED 6/1/19 $11.00 Operating Expense Source 2016 Operating Budget Dragon Bushido Martial Arts* Shops C 4,600 05/15/ /31/2017 $ 2,400 $ 6.26 $10.00 Management Fee (% of EGR) 2.50% The UPS Store Pad A 1,334 10/01/ /30/2021 $ 2,252 $ $20.00 Martinizing Dry Cleaners Pad A /01/ /31/2021 $ 1,045 $ $17.00 Leasing Assumptions Anchor Jr. Anchor Shops/Pads Sky Nails Pad A 1,820 03/25/ /31/2019 $ 2,381 $ $17.00 Retention 90% 80% 80% Subway Pad A 1,700 09/05/ /30/2022 $ 2,781 $ $20.00 Rent Escalations 10%/5 Yrs 10%/5 Yrs 3% Annual Frameworks Pad A 1,005 10/01/ /30/2022 $ 1,673 $ $20.00 Term Lengths 10 Years 10 Years 5 Years The Look Hair Salon Pad A /01/ /31/2019 $ 1,279 $ $17.00 Lease Structure NNN NNN NNN The UPS Store - Printing Room Pad A /01/ /30/2021 $ 464 $ $12.00 Great Wall Restaurant Shops B 8,022 11/01/ /31/2025 $ 5,883 $ 8.80 $9.00 Tenant Improvements ($/SF) Northwest Pets Shops B 4,184 07/14/ /31/2024 $ 3,556 $ $10.00 New Tenant $10.00 $10.00 $15.00 Idaho Youth Ranch Shops B 13,554 05/01/ /30/2021 $ 9,849 $ 8.72 $9.00 Renewal $0.00 $0.00 $0.00 Lifetime Optometry Shops B 1,085 06/01/ /28/2022 $ 1,519 $ $15.00 New Lease Free Rent 0 Months 3 Months 3 Months Ken's Bicycle Shops A 5,610 04/05/ /31/2024 $ 4,441 $ 9.50 $10.00 Wild Birds Unlimited Shops A 1,700 09/01/ /30/2022 $ 2,155 $ $15.00 Leasing Commissions Available Shops A 1,680 ABSORBED 12/1/19 $15.00 New Tenant 5.0% 5.0% 6.0% Idaho Gold & Silver Shops A 1,608 01/01/ /31/2017 $ 1,339 $ 9.99 $15.00 Renewal 2.5% 2.5% 3.0% Jack in the Box Pad 2,850 09/16/ /15/2021 $ 4,426 $ $20.00 M&L Emissions PK-A&B 05/01/ /31/2018 $ 927 Downtime Totals: 153,233 $ 96,301 New Tenant 12 Months 9 Months 6 Months *Analysis has assumed a one-year extension from lease expiration date. Residual Sale Exit Cap Rate (NOI Year 11) 7.00% Costs of Sale 3.00% Discount Rate 7.25% Loan Summary Interest Rate 4.50% Amortization Period (Years) 30 Loan-To-Value 70% Origination Date 6/1/2017 Market Rent 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. FIVE MILE PLAZA 31

32 Replacement Cost Analysis REPLACEMENT COST ESTIMATE Five Mile Plaza Property Type Neighborhood Shopping Center Rentable SF 153,233 Lot Size 13.3 Acres Base Square Foot Cost $ Sprinkler Refinement: + $ 2.50 Refined Square Foot Cost: $ Cumulative Multiplier (Size/Location): x Adjusted Square Foot Cost: $ Gross Building Area: 153,233 Total Construction Cost: $ 16,008,252 Lump Sum Additions Site Work/Landscaping: 449,539 $ 5.00 /SF $2,247,696 Tenant Improvements 153,233 $ /SF $6,129,320 Financing Costs: 2% of 70% LTV $341,394 Total Hard & Soft Costs: 153,233 $161 $24,726,662 Developer's Overhead & Profit 20% Margin $4,945,332 Total Building Cost New $29,671,994 Land Value $10 /SF $8,241,550 Total Replacement Cost $247 /SF $37,913,544 *Derived using Marshall Valuation Service Cost Manual Total Estimated Replacement Cost $37,913,544 Total Hard & Soft Costs $24,726,662 Total Land Value $8,241,550 Replacement Cost - Sale Price $21,263,544 Feasibility Rent $16.28/SF Vs. Average Rent $8.57/SF FEASIBILITY RENT Total Replacement Cost New $37,913,544 Capitalization Rate 6.25% Required NOI $2,369,596 Vacancy Allowance 5.00% Feasibility Annual Base Rent $2,494,312 Feasibility Rent/SF $16.28 FIVE MILE PLAZA 32

33 Albertsons Lease Abstract INSURANCE Tenant shall obtain a comprehensive liability policy. Landlord is responsible for liability insurance coverage on the common areas. PREMISES/TERM TENANT Albertsons SQUARE FEET 46,328 SF LEASE COMMENCEMENT October 8, 1978 LEASE EXPIRATION October 8, 2019 OPTIONS Five, five-year options remaining. Three month s notice required to execute. BASE RENT Term Monthly Annually 10/9/ /8/2019 $20,518 $246,213 OPTION RENTS Period Per SF Monthly Annual 1st Option Period (Current Term) $5.31 $20,518 $246,213 2nd Option Period $5.31 $20,518 $246,213 3rd Option Period $5.31 $20,518 $246,213 4th Option Period $5.31 $20,518 $246,213 5th Option Period $5.31 $20,518 $246,213 6th Option Period $5.31 $20,518 $246,213 COMMON AREA MAINTENANCE Tenant shall reimburse their proportionate share of common area expenses including sweeping, lighting, repainting parking lines and snow and ice removal. Common area expenses shall not exceed $0.48/SF, which shall be adjusted every five years based on CPI increases. TENANT MAINTENANCE OBLIGATION Tenant is responsible for ordinary maintenance of the HVAC equipment, replace all broken plate glass and keep clean and in good repair the roof, gutters, downspouts, sewer, electric, gas and water lines within the boundaries of the building. Tenant shall also be responsible for keeping sidewalks in front of the Premises clean and for all other necessary repairs not required to be made by Landlord. LANDLORD MAINTENANCE OBLIGATION Lessor shall make all necessary repairs to the supporting structural portions of the improvements including the foundation, driveways, parking lot, and exterior structural walls, excluding tenant s signage. Landlord must make all necessary repairs and replacements of the HVAC not required of the tenant and maintain and repair all exterior utility connections. PERCENTAGE RENT Tenant shall pay 1% of gross sales over a $23,000,000 threshold. RE TAXES Tenant shall reimburse proportionate share of all real property taxes. FIVE MILE PLAZA 33

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

35 A unique HUMAN RESULTS-DRIVEN client experience THE CAPITAL PACIFIC EXPERIENCE - OUR DAILY COMMITMENT TO OUR CLIENTS [ ] [ Copyright 2017 Capital Pacific LLC ] The information contained in this document has been obtained from sources Capital Pacific believes to be reliable. Capital Pacific makes no representation or warranty in respect to its accuracy. It is your responsibility to confirm its accuracy and completeness. [ ]