Colliers NNN Group

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1 exclusive offering memorandum > Strong Corporate Leases- BigLots! (NYSE: BIG)- S&P Rated BBB- Tesco (NASDAQ: TESO) > Fresh & Easy- Long Term Absolute NNN Ground Lease- 17+ Years with 4-5 Yr Options > BigLots! - Fee Simple NNN Lease- 5+ Years with 1-5 Yr Option- Exercised 1st Option Early > Rare S. California Retail Portfolio Opportunity- Can be Purchased Individually or Together > Attractive Rent Increases- 10% Bumps Every 5 Years Plus BigLots! Percentage Rent Two (2) Single Tenant Retail Portfolio E. Whittier Blvd. & Painter Ave. Whittier, CA > Strong Demographics- Dense Retail Trade Area & Corridor Along Whittier Blvd > Excellent Location with Prominent Visibility/Monument Signage- Across from The Quad at Whittier > In-Place Assumable Financing- Offers 1031 Exchange Flexibility Jereme Snyder Senior Vice President License No jereme.snyder@colliers.com Eric Carlton Senior Advisor License No eric.carlton@colliers.com Colliers International 3 Park Plaza, Suite 1200 Irvine, CA The SNYDER/CARLTON Team Colliers NNN Group

2 CPD 40,000 THE QUAD 433,000 SF POWER CENTER Whittier Blvd. Painter Ave. CPD 25,000

3 TABLE OF CONTENTS Confidentiality Agreement 4 Property Description 5 Lease Abstract 6 Tenant Description 7 Lease Abstract 8 Tenant Description 9 Property Overview 10 Financial Analysis Property Photos 15 Aerial View Location Map 18 Parcel Map 19 Area Profile 20 Demographics 21 P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

4 Confidentiality Agreement This Offering Memorandum was prepared by Colliers International ( Broker ) solely for the use of prospective for the purchase of two properties (Big Lots is comprised of 35,000 SF on 3.59 Acres and Fresh and Easy is comprised of 14,500 SF on.49 Acres ground lease). Located at E. Whittier Blvd. and Painter Ave. in the city of Whittier, CA Neither the Broker nor the Owner of the Property, make any representation or warranty, expressed or implied, as to the completeness or accuracy of the material contained in the Offerning Memorandum. Prospective purchasers of the Property are advised that changes may have occurred in the physical or financial condition of the Property since the time this Offering Memorandum or the financial statements herein were prepared. Prospective purchasers acknowledge that this Offering Memorandum and the financial statements herein were prepared by Broker, and not by Owner, and are based upon assumptions or events beyond the control of both Broker and Owner, and therefore may be subject to variation. Other than current and historical revenue and operating expense figures for the Property, Owner has not, and will not, provide Broker or any prospective purchaser with any projections regarding the Property. Prospective purchasers of the Property are advised and encouraged to conduct their own comprehensive review and analysis of the Property. The Offering Memorandum is a solicitation of interest only and is not an offer to sell the Property. The Owner and Broker expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the Property and expressly reserve the right, at their sole discretion, to terminate discussions with any entity at any time with or without notice. The Owner shall have no legal commitments or obligations to any entity reviewing the Offering Memorandum or making an offer to purchase the Property unless and until such offer is approved by Owner pursuant its Governing Authorities and the signature of the Owner or Owner s representative is affixed to a Real Estate Purchase Agreement prepared by Owner. This Offering Memorandum is confidential. By accepting the Offering Memorandum, you agree (i) that you will hold and treat the Offering Memorandum and its contents in the strictest confidence, (ii) that you will not photocopy or duplicate any part of the Offering Memorandum, (iii) that you will not disclose the Offering Memorandum or any of its contents to any entity without the prior authorization of the Owner, and (iv) that you will not use the Offering Memorandum in any fashion or manner detrimental to the Owner or Broker. Colliers International obtained the information contained in this Offering Memorandum from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, changes of price, rental or other conditions, prior sale, lease or financing, or withdrawl without notice. We include projections, opinions, assumptions, or estimates for example only, and they may not represent current or future performance of the Property. You and your tax and legal advisors should conduct your own investigations of the physical condition of the Property and of the financial performance of its future Ownerships. The SNYDER/CARLTON Team Colliers NNN Group P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

5 property description Parcel Map Property Description The subject property is a two-tenant retail center containing approximately 49,500 square feet. The property is 100% occupied by Big Lots (35,000 SF) and Fresh & Easy (14,500 SF). The property was previously only occupied by Big Lots and contained surplus land, which has been subsequently ground leased to Fresh & Easy The improvements are situated on two parcels totaling 4.08 acres containing 172 parking stalls. The Fresh & Easy development is in excellent overall condition and is a newer prototype store. The property also benefits from its infill location and strong traffic counts along Whittier Boulevard (40,000/day) and Painter Avenue (25,000 cars/day) DEMOGRAPHIC ESTIMATES Description 1 Mile 3 Miles 5 Miles Population 32, , ,690 Growth % 3.07% 3.37% Households 10,095 46, ,045 Average HH Income $67,219 $74,869 $76,720 Per Capita Income $21,008 $22,033 $22,202 Property Address E. Whittier Blvd. & Painter Ave. Whittier, CA APN Big Lots Fresh & Easy Land Size Big Lots ±3.59 AC Fresh & Easy ±.49 AC Building Size Big Lots ±35,000 SF Fresh & Easy ±14,500 SF Year Built Big Lots 1976 Fresh & Easy 2010 Traffic Counts Whittier Blvd. ±45,971 CPD Painter Ave. ±24,678 CPD = ±70,649 CPD P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

6 purchase opportunity This offering includes a 35,000 square foot single tenant building occupied by Big Lots that is strategically located along the dominant retail corridor of Whittier Boulevard in Whittier, CA a suburb of Los Angeles County. The investment is a NNN investment (Landlord is responsible for roof and structure expenses as well as a % share of property taxes see attached pro-forma and lease abstract). Situated on a 3.59 ACRE lot and directly adjacent to the newly built Fresh N Easy (included in the offering), the building enjoys ample parking, street access, and excellent pylon signage that is viewable from both directions along Whittier Blvd. The property directly across from The Quad at Whittier a 433,000 square foot power center comprised of major national retailers including Old Navy, Ralph s, Ross, TJ Maxx, Petco, Michael s and Burlington Coat Factory. In addition, the corridor is home to excellent tenants such as Walgreens, Home Depot and Staples. The area holds a highly dense population, boasting over 450,000 residents within a five mile radius. Big Lots has already expressed its next option, thereby extending its firm lease term to June 30th, Big Lots is a BBB (Investment Grade) publically traded company, thereby offering significant rent payment security to a prospective buyer. NOTE: This property includes a separate 6,600 square foot parcel that is subject to a twenty year ground lease which commenced in August Current ground lease payment is $33,000 per year. Lease Abstract Lessee PNS Stores Building Size (SF) 35,000 Lease Date May 1, 1992 Lease Commence Date October 30, 1992 Expiration Date (Base Lease) January 31, 2018 No. & Term of Options Expiration Date (Base + All Options) 1 5 years 1/31/2028 Contract Rental Rate $/SF/Mo. Total $/Yr. Lease Term $1.22 $512,400 Option Term 4 $1.48 $620,200 In-Place Assumable Financing Lender PNC Bank Original Loan Balance $4,275,000 Unpaid Loan Balance $4,212,616 Down Payment $2,770,525 Offering Price 40% Annual Interest Rate 6.43% Amortization Rate Term Years Term Maturity Date 7/1/2016 Annual Payment $318,196 P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

7 Tenant Description-Big Lots Big Lots offers brand-name closeouts and bargains that create a unique, exciting shopping experience for millions of customers. Big Lots offers a broad assortment of merchandise, including consumables, seasonal products, furniture, housewares, toys and gifts. Their incredible growth has made Big Lots the nation s largest broadline closeout retailer with annual revenues approaching $5 billion. Big Lots operates more than 1,400 retail stores serving 48 states. Brandname products from 3,000 manufacturers are supplied to stores through five regional distribution centers with more than 9 million square feet of distribution capacity. Fiscal 2011 Highlights Record income from continuing operations of $2.99 per diluted share; fifth consecutive record year Record total sales of $5.2 billion, an increase of 5% compared to fiscal 2010 Record operating profit of $358 million for U.S. operations Opened 92 new stores in the U.S. Expanded into Canada with the acquisition of Liquidation World Invested $359 million to repurchase 11 million shares - approximately 15% of our outstanding shares as of the beginning of fiscal 2011 Big Lots, Inc. was founded in 1967 and is headquartered in Columbus, Ohio. Shares are traded on the New York Stock Exchange under the symbol BIG.

8 PURCHASE OPPORTUNITY This offering includes a fee simple absolute NNN ground lease currently leased to Fresh N Easy. Located on Whittier Boulevard the most dominant retail corridor in Whittier, Fresh N Easy executed a 20 year NNN ground lease with a commencement date of January The lease includes 10% rental increases every 5 years (next rent increase begins 3/1/2015), including all option periods. Fresh N Easy is a wholly owned subsidiary of Tesco, a publically traded company on the London Stock Exchange. Tesco currently has a A- rating by Standard & Poors. Tesco is one of the world s largest retailers with over 492,000 employees. The newly constructed building enjoys ample parking, street access, and excellent pylon signage that is viewable from both directions along Whittier Blvd. This store is one of the strongest performing Fresh & Easy locations in the region, in terms of sales revenue. The property directly across from The Quad at Whitter a 433,000 square foot power center comprised of major national retailers including Old Navy, Ralph s, Ross, TJ Maxx, Petco, Michael s and Burlington Coat Factory. In addition, the corridor is home to excellent tenants such as Walgreens, Home Depot and Staples. The area holds a highly dense population, boasting over 450,000 residents within a five mile radius. The city of Whittier is located in Los Angeles County, about 12 miles southeast of the city of Los Angeles. Whittier was recently named Most Business Friendly City by the Los Angeles County Economic Development Corporation in November Lease Abstract Lessee Fresh & Easy Neighborhood Market, Inc. Building Size (SF) 14,500 Lease Date July 15, 2009 Lease Commence Date January 11, 2010 Expiration Date (Base Lease) January 31, 2030 No. & Term of Options 4 5 years Expiration Date (Base + All 1/31/2050 Options) Contract Rental Rate $/SF/Mo. Total $/Yr. Base Lease Term $1.72 $300,000 Years 6-10 $1.90 $330,000 Years $2.09 $363,000 Years $2.29 $399,300 In-Place Assumable Financing Original Loan Balance $1,500,000 Unpaid Loan Balance $1,432,831 Down Payment $2,852,883 Offering Price 33% Annual Interest Rate 7.00% Amortization Rate Term Years Term Maturity Date 2020 Annual Payment $127,224 P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

9 Tenant Description Fresh & Easy Neighborhood Market is a chain of grocery stores in the western United States, headquartered in El Segundo, California. It is a subsidiary of Tesco, the world s third largest retailer, based in the United Kingdom.It has plans for rapid growth - the first stores opened in November 2007 and, after a pause in the second quarter of 2008, the opening program recommenced; there are now more than 185 stores in Arizona, California, and Nevada as of March 2012 Fresh & Easy offers a range of their own brand products and freshly prepared meals. They never use high-fructose corn syrup, added trans fats, artificial colors or flavors in any fresh & easy brand products. They realize you probably have some favorite top name brands. So in addition to their own fresh & easy brand products, they carry a nice variety to make it convenient for you. Best of all, they offer everything at honest, low prices for everyone. Groceries cost less because they have designed stores to save money. They install LED lighting and energy-efficient refrigerator doors that use less. And by using less, they are able to pass more savings on to their customers. Purpose: Create value for customers so they will come back again and again. Values: Treat people how we would like to be treated, nobody tries harder for customers. Customers: Think fresh, wholesome food should be accessible and affordable to everyone. Neighbors: A neighborhood market, so it only makes sense that neighbors are taken care of. Current Statistics: - Operates 199 stores in California, Arizona and Nevada - Has created more than 5,000 jobs, with over 4,000 in California - Fresh & Easy Express has opened in Los Angeles and Orange counties - Made significant investments in world-class distribution, kitchen, produce and meat facilities in Riverside - Gives Tesco an opportunity to source California products for businesses around the world - More than 65% of the produce sold comes from California

10 Property Overview Property Information Property Information Subject Property: Big Lots Subject Property: Fresh & Easy Property Type: NNN Fee Simple Investment Property Type: Absolute NNN Ground Lease Discount Box Retailer Grocery Retail Property Address: E. Whittier Blvd. Whittier, CA Property Address: Painter Ave. Whittier, CA Price: $6,512,243 Current NOI: $455,857 Cap Rate: 7.00% Building Size: 35,000 Price: $4,285,714 Current NOI: $300,000 Cap Rate: 7.00% Building Size: 14,500 Land Size: 3.59 Acres Land Size:.49 Acres Year Built: 1976/1992 Parcel Number: Year Built: 2010 Parcel Number: Traffic Count: +/- 40,000 CPD Whittier Boulevard +/- 249,000 CPD I-605 Traffic Count: +/- 40,000 CPD Whittier Boulevard +/- 249,000 CPD I-605 Market / Submarket: Los Angeles / Whittier Market / Submarket: Los Angeles / Whittier The SNYDER/CARLTON Team Colliers NNN Group P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

11 Financial Analysis RENT ROLL TENANT BLDG SQUARE FOOTAGE LEASE START LEASE EXPI- RATION RENT/ SQ. FT. ANNUAL RENT INCREASES OPTIONS Big Lots 35,000 10/30/1992 1/31/2018 $14.64 $512, Percentage Rent 3% Gross Sales Above $14,116, Year Option 02/01/ $563, Fresh & Easy 14,500 1/13/2010 2/28/2030 $20.69 $300, Total : 49,500 $812,400 10% Increases Every 5 Years 03/01/2015 $330, /01/2020 $363, /01/2025 $399, Year Options 10% Increases Every Option 03/01/2030 $439, /01/2035 $483, /01/2040 $531, /01/2045 $584, ASSUMABLE FINANCING TERMS-BiG Lots Loan Assumption Required Loan Balance $4,212,626 Interest Rate 6.43% Amortization 30 LTV 40% Term Due: July 2016 ASSUMABLE FINANCING TERMS - F&E Loan Assumption Required Loan Balance $1,432,181 Interest Rate 7.00% Amortization 25 LTV 33% Term Due: 2015 COMBINED INCOME & EXPENSE Net Operating Income $755,857 COMBINED PRICING GUIDANCE Price $10,797,957 Price / Sq. Ft. $ Down Payment $5,153,150 Down Payment % 47.7% Loan Amount $5,644,807 Cap Rate 7.00% Net Operating Income $755,857 Loan Payment $444,417 Cash Flow $311,440 Cash-on-Cash 6.04% DSCR 1.70% P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

12 rent ROLL/ INCOME DISTRIBUTION Tenant Lease Start Lease End Square Feet % of GLA Contract Rental Rate Yearly Rent Per SF Month Big Lots October 1992 January ,000 71% $512,400* $1.22 Fresh & Easy January 2010 January ,500 29% $300,000 $1.72 Total: 49, % $723,500 $1.22 *Beginning March 2013 In Place Income Distribution Tenant Name Credit Annual Income % of Total Income Expiration Date Big Lots BBB $512,400* 59% January 2018 Fresh & Easy NR $300,000 41% January 2030 Total $723, % *Beginning March 2013 Big Lots Fresh & Easy P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

13 cash flow-fresh & Easy P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

14 cash flow-big lots P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

15 property photos P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

16 CPD 25,000 Aerial CPD 40,000 Painter Ave. Whittier Blvd. P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

17 Aerial CPD 249,000 Stage Rd. Whittier Blvd. Painter Ave. P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

18 Location map E. Whittier Blvd. & Painter Ave. P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

19 parcel map P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

20 City of Whittier-LOs Angeles county Whittier is located in Los Angeles County, about 12 miles southeast of the City of Los Angeles. A five Member City Council under the Council-Manager form of government directs the City. Whittier is a charter law city and was incorporated in The City covers 14.8 square miles and has an estimated population of 85,654. Businesses and industries in the area include 443 professional services, 452 retail stores, 189 family-type restaurants, 40 manufacturing plants, 10 hotels and motels, 7 automobile dealerships and over 225 specialty shops and boutiques, predominantly located in Uptown Whittier, the Quad shopping mall, as well as the Whittwood Town Center. On November 8, 2012, the Los Angeles County Economic Development Corporation named the City of Whittier as the Most Business Friendly City in Los Angeles County in the category of cities with a population of 60,000 and over. Whittier s significant investment in policies designed to support businesses have resulted in millions of dollars of private investment and business growth. Whittier s business visitation program, quarterly economic development newsletter, Buy Whittier purchasing policy, and Guide to Doing Business in Whittier assist entrepreneurs start up and maintain successful businesses in the City. Whittier s philosophy of A safe business community leads to a prosperous business community is realized through its highly successful Community Based Policing Program, a partnership between the Police Department, city residents and businesses. Home to California Distinguished Schools, a four-year libereal arts college and trade schools, more than 400 acres of playgrounds and recreation opportunities including the award-winning Greenway Trail, over 1,750 acres of open space preserved for hiking and biking, art galleries, boutiques and entertainment venues, Whittier has a rich tradition in the arts. Through the Gateway Cities Council of Governments, Whittier has supported the LA County Strategic Plan for Economic Development, led by the LAEDC. Whittier was a Most Business Friendly City finalist in 2009, 2010 and P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

21 demographics POPULATION 1-MILE 3-MILE 5-MILE Estimated Population (2012) 32, , ,755 Projected Population (2017) 32, , ,048 HISTORICAL ANNUAL GROWTH % 8.50% 8.38% % 2.34% 2.37% PROJECTED ANNUAL GROWTH % 0.71% 0.74% DAYTIME DEMOS 1-MILE 3-MILE 5-MILE Total # of Businesses (2012) 1,263 5,876 13,420 Total # of Employees (2012) 14,056 66, ,209 Employee Pop. per Business Residential Pop. per Business HOUSEHOLDS 1-MILE 3-MILE 5-MILE Estimated Households (2012) 10,335 47, ,429 Projected Households (2017) 10,422 47, ,839 HISTORICAL ANNUAL GROWTH % 2.22% 3.34% % 0.88% 1.05% PROJECTED ANNUAL GROWTH % 1.08% 1.09% INCOME 1-MILE 3-MILE 5-MILE Avg. Household Income (2012) $66,151 $74,798 $76,285 Median Household Income (2012) $51,498 $60,037 $61,484 Per Capita Income (2012) $21,464 $22,459 $22,572 P E. Whittier Blvd. & Painter Ave. Whittier, CA 90602

22 Tom Lagos Senior Vice President Dir Christopher Maling Senior Vice President Dir David Maling Senior Vice President Dir El Warner Associate Vice President Dir Christianne Mejia Marketing Specialist Dir Alexandria Beausoleil Marketing Coordinator Dir For More Information, contact: Jereme Snyder License No Eric Carlton License No Park Plaza, Suite 1200 Irvine, CA The SNYDER/CARLTON Team Colliers NNN Group Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and /or its licensor(s) All rights reserved.