VALENCIA STREET, SAN FRANCISCO

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1 OFFERING MEMORANDUM: VALENCIA STREET, SAN FRANCISCO $7,800, UNIT MIXED-USE PROPERTY MISSION DISTRICT EXCLUSIVELY LISTED BY: Adam Filly Senior Vice President License No

2 PROPERTY SUMMARY VALENCIA STREET Valencia St, San Francisco OFFERED At: $7,800,000 Distinguished Corner Property Unit Mix: 9 Studios, 6 One-Bedrooms, and 3 Commercial 67% Upside in Residential Rents Full-Height Basement Seismic Retrofit has been Completed Rarely Available Valencia Street Mixed-Use Property Excellent Commercial Tenants Positioned on one of the best corners of Valencia Street, this 18 unit mixed-use property is a truly rare offering. The property consists of three retail spaces and fifteen apartments. The commercial tenants are the restaurant Dosa, the grocery store Valencia Whole Foods, and a mail services retailer. The mix of apartments is six one-bedrooms and nine studios. All of the studios have the ability to be converted to one-bedroom units upon turnover. There is tremendous upside potential in the residential rents. The property is separately metered for gas and mastermetered for both water and electricity. Heat is provided by a steam boiler. The owners recently completed a seismic retrofit, removing the building from the mandatory soft-story retrofit list. The Mission District, Valencia Street in particular, is the most sought-after location in the city. The plethora of shopping, dining, and nightlife options make this a local, national, and international destination. These reasons, along with its access to public transportation, tech shuttles, freeways, and great weather, make it extremely attractive to tenants as well. 2

3 FINANCIAL OVERVIEW VALENCIA STREET PROPERTY OVERVIEW Year Built Parcel Number # of Units Unit Mix Sq.Feet Lot Sq. Feet Neighborhood Zoning / Studios, 6 One-Bedrooms, 3 Commercial 14,080 4,909 Mission District NCT FINANCIAL OVERVIEW Price: Price per SqFt: Price per Unit: GRM: Cap Rate: Annual Gross Income: Annual Expenses: $7,800,000 $554 $433, % $438,030 $179,232 3

4 FINANCIAL OVERVIEW VALENCIA STREET ESTIMATED ANNUAL EXPENSES New Property Taxes %) $91,978 Insurance $12,000 PG&E $19,860 Water $12,116 Garbage $9,724 Telephone/internet $1,035 Management 4% $17,521 Repairs & Maintenance $15,000 Total Expenses: $179,232 ESTIMATED OPERATING INCOME Scheduled Gross Income $438,030 Less Vacancy Rate: 2% $8,761 Gross Operating Income: $429,269 Less Expenses: 42% $179,232 Net Operating Income: $250,037 4

5 RENT ROLL VALENCIA STREET Unit Type Rent Market Rent Move-In Date Residential Units 101 1br $ $2, /01/ br $871.92** $2, /01/ br $ $2, /01/ br+ $2, $3, /14/16 Utility Reimbursement for Unit 104 $ $ Studio $ $2, /01/ br+ $2, $3, Studio $ $2, /01/ br $ $2, /01/ Studio $ $2, /01/ Studio $ $2, /01/ Studio $ $2, /01/ Studio $ $2, /01/ Studio $726.60** $2, /03/ Studio $817.42** $2, /03/ Studio $ $2, /01/10 Lease Details Commercial Units Monthly Residential Total $14, $39, Annual Residential Total $178, $471, st St Mail Store $2, $2, Lease expires 6/14/2022-5% annual increase 995 Valencia St DOSA $8, $8, /01/15 Lease expires 12/31/2024 4% annual increase DOSA - NNN Reimbursement $ $ Valencia St Whole Foods $9, $9, /01/17 Lease expires 12/31/2021 3% annual increase Whole Foods - NNN Reimbursement $ $ Monthly Commercial Total $21,628 $21,628 Annual Commerical Total $259,536 $259,536 Combined Monthly Gross $36,502 $60,878 Combined Annual Gross $438,030 $730,536 Upside 67% *Studios can be converted to 1bd units (as was done with units 104 and 106). Market rents assume conversion to 1bd. Interested parties should use their own estimates when considering this investment. **Rent reflects rental increase that begins 11/1/17. 5

6 PROPERTY PHOTOS VALENCIA STREET 6

7 CONFIDENTIALITY & DISCLAIMER VALENCIA STREET CONFIDENTIALITY & DISCLAIMER The information contained in the offering is confidential, furnished solely for the purpose of review by a prospective purchaser of the subject property. The material is based in part upon information supplied and in part upon information obtained by Paragon Commercial Brokerage from sources it deems reasonably reliable. No warranty or representation, expressed or implied, is made by the owner, Paragon Commercial Brokerage, or any of their respective affiliates, as to the accuracy or completeness of the information contained herein or any other written or oral communication transmitted to a prospective purchaser in the course of its evaluation of the Property. No legal liability is assumed or to be applied in connection with the information or such other communications. Without limiting the generality of the foregoing, the information shall not be deemed a representation of the state of affairs of the subject property or constitute an indication that there has been no change in the business or affairs of the subject property since the date of preparation of the information. Prospective purchasers should make their own projections and conclusions without reliance upon the materials contained herein and conduct their own independent due diligence, including engineering and environmental inspections, to determine the condition of the Property and the existence of any potentially hazardous material located at the site. The Offering Memorandum was prepared Paragon Commercial Brokerage. It contains select information pertaining to the subject property and does not purport to be all inclusive or to contain all of the information which a prospective purchaser may desire. All financial projections are provided for general reference purposes only and are based on assumptions relating to the general economy, competition and other factors beyond control and, therefore, are subject to material change or variation. An opportunity to inspect the subject property will be made available to qualified prospective purchasers. In the Offering certain documents and other materials are described in summary form. The summaries do not purport to be complete nor, necessarily, accurate descriptions of the full agreements involved, nor do they constitute a legal analysis of such documents. Interested parties are expected to independently review all documents. The Offering is subject to prior placement, errors, omissions, changes or withdrawal without notice and does not constitute a recommendation, endorsement or advice as to the value of the Property by Paragon Commercial Brokerage or the owner. Each prospective purchaser is to rely upon its own investigation, evaluation and judgment as to the advisability of purchasing the subject property described herein. The owner and Paragon Commercial Brokerage expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offer to purchase the subject property and/or to terminate discussions with any party at any time with or without notice. The owner shall have no legal commitment or obligation to any interested party reviewing the Offering or making an offer to purchase the subject property unless a written agreement for the purchase of the subject property has been fully executed and delivered by the owner and such party and any conditions to the owner s obligations there under have been satisfied or waived and then only to the extent expressly provided for therein. Paragon Commercial Brokerage is not authorized to make any representations or agreements on behalf of the owner. 7