808 & 880 FOR SALE EAST MILL STREET 2 BUILDINGS LEASED TO SAN BERNARDINO COUNTY SOLD TOGETHER OR SEPARATELY

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808 & 880 EAST MILL STREET 808 880 2 BUILDINGS LEASED TO SAN BERNARDINO COUNTY SOLD TOGETHER OR SEPARATELY FOR SALE Exclusively prepared by: BRANDON KEITH Senior Vice President Lic #01177792

1 808 & 880 EAST MILL STREET BUILDINGS LEASED TO SAN BERNARDINO COUNTY SOLD TOGETHER OR SEPARATELY FOR SALE Exclusively prepared by: BRANDON KEITH Senior Vice President Lic # bkeith@voitco.com WALTER CHENOWETH Executive Vice President Lic # wchenoweth@voitco.com SEAN SULLIVAN Associate Lic # ssullivan@voitco.com

Table OF CONTENTS I. INVESTMENT OVERVIEW Investment Overview... 4 Executive Summary... 5 Cash Flow Scenario... 6 II. TENANT OVERVIEW Tenant Overview... 7 Credit Rating... 8 III.

2 Table OF CONTENTS I. INVESTMENT OVERVIEW Investment Overview... 4 Executive Summary... 5 Cash Flow Scenario... 6 II. TENANT OVERVIEW Tenant Overview... 7 Credit Rating... 8 III. PROPERTY MAPS Aerial Photo... 9 Parcel Map...10 Site Plan...11 Floor Plans BRANDON KEITH Senior Vice President Lic # bkeith@voitco.com WALTER CHENOWETH Executive Vice President Lic # wchenoweth@voitco.com SEAN SULLIVAN Associate Lic # ssullivan@voitco.com 4747 Executive Drive, Suite 800, San Diego, CA Fax Lic # Licensed as Real Estate Salespersons by the CA Bur of Real Estate. The information contained herein has been obtained from sources we deem reliable. While we have no reason to doubt its accuracy, we do not guarantee it. Any financial analysis and/or valuation is the opinion of VRES and should not be considered an appraisal, nor has VRES followed the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation. The source of this valuation and/or analysis is not to be disclosed without VRES s prior written consent Voit Real Estate Services, Inc. All Rights Reserved. Real People. Real Solutions. is a registered trademark of Voit Real Estate Services.

10% TENANT County of San Bernardino Sheriff Department Headquarters TENANT County of San Bernardino Sheriff Department-Records Department

3 INVESTMENT OVERVIEW 808 EAST MILL STREET 880 EAST MILL STREET PRICE $2,600,000 STARTING CAP RATE 7.1% PRICE $1,675,000 STARTING CAP RATE 6.10% TENANT County of San Bernardino Sheriff Department Headquarters TENANT County of San Bernardino Sheriff Department-Records Department TOTAL BUILDING SIZE 21,446 Square Feet TOTAL BUILDING SIZE 8,269 Square Feet TOTAL LOT SIZE 1.38 Acres TOTAL LOT SIZE 1.38 Acres OCCUPANCY DATE 2000 OCCUPANCY DATE 2003 LEASE EXPIRATION December 31, 2019 LEASE EXPIRATION January 31, 2023 (6 Years) 808 & 880 East Mill St. / 3

4 EXECUTIVE SUMMARY BUILDING ADDRESS 808 East Mill Street San Bernardino, CA BUILDING TYPE Office Office BUILDING SIZE 17,726 SF of Office (2) 1,860 SF of Warehouse Buildings 880 East Mill Street San Bernardino, CA ,269 SF of Office (3 Buildings) LOT SIZE 1.38 Acres 1.38 Acres STORIES Two (2) Single YEAR BUILT APN $1.1 Million Renovation in 2000; Additional Upgrades in 2007; 2nd Warehouse Built in ZONING C - San Bernardino C - San Bernardino ELEVATOR Yes N/A CONSTRUCTION Block / Wood Frame Block / Wood Frame POWER 600 Amps / 480 / 270 V 600 Amps / 480 / 270 V NATURAL GAS Yes Yes INVESTMENT OVERVIEW 808 & 880 EAST MILL STREET Voit Real Estate Services is pleased to offer this unique, AA Credit investment opportunity in the heart of San Bernardino one of the fastest growing Counties in California. Located at 808 & 880 East Mill Street in San Bernardino, this investment includes 2 separate properties with 29,715 total square feet, on two parcels totaling 2.76 acres. Each property is a fully fenced, secure facility, with easy access to two major freeways the 215 and Interstate 10. THE PROPERTIES CAN BE PURCHASED TOGETHER OR SEPARATELY, AND ARE BING OFFERED BELOW REPLACEMENT COST. 808 East Mill Street consists of a 17,726 square foot, two story office building (elevator served) and two 1,860 square foot warehouses for storage of department vehicles. The San Bernardino County Sheriff department has been headquartered here since 2000, including officers, department heads, support services, administrators, and special operations such as the bomb squad. 880 East Mill Street consists of three (3), single story office buildings totaling 8,269 square feet, which house the San Bernardino County Sheriff s finger print department, records, and associated administrative functions for the County Sheriff. This investment opportunity offers a buyer security of a staggered lease term between the two properties, AA credit tenant, stability, and flexible property type on two parcels.

5 PRO FORMA & CASH FLOW SCENARIO 808 EAST MILL STREET MONTHLY INCOME $26,064 ANNUAL INCOME $312, EAST MILL STREET TOTAL MONTHLY INCOME $15,215 $41,279 ANNUAL INCOME $182,580 $495,348 TOTAL ANNUAL INCOME $312,768 TOTAL ANNUAL INCOME $182,580 $495,348 OPERATING EXPENSES OPERATING EXPENSES WATER/SEWER- ACTUAL (ACT) 2016 $2,285 JANITORIAL- ACT $12,067 GAS- ACT $1,383 ELEC.- ACT. 2016** $39,623 WASTE- ACT $1,638 LANDSCAPING- ACT $1,358 PROPERTY TAXES (BASED ON $2,600,000 SALES PRICE) $29,120 REPAIRS AND MAINTENANCE- ACT $25,207 INSURANCE $4,567 PEST CONTROL- ACT $600 LICENSE & PERMITS $250 ALARM- ACT $750 MANAGEMENT- ESTIMATED AT 3% OF RENTAL INCOME $9,383 WATER/SEWER- ACTUAL (ACT) 2016 $1,455 JANITORIAL- ACT $6,965 GAS- ACT $847 ELEC.- ACT. 2016** $33,814 WASTE- ACT $3,205 LANDSCAPING- ACT $1,359 PROPERTY TAXES (BASED ON $1,675,000 SALES PRICE) $18,423 REPAIRS AND MAINTENANCE- ACT $5,681 INSURANCE $1,729 PEST CONTROL- ACT $600 LICENSE & PERMITS $250 ALARM- ACT $708 MANAGEMENT- ESTIMATED AT 3% OF RENTAL INCOME $5,477 TOTAL ANNUAL OPERATING EXPENSES $128,231 TOTAL ANNUAL OPERATING EXPENSES $80,519 $208,750 NET OPERATING INCOME $184,537 NET OPERATING INCOME $102,064 $286,598 CAP RATE 7.1% CAP RATE 6.10% 6.7% *2016 Actual expenses with adjustment to property taxes for sale. **Significant upside for Buyer by installing solar and energy efficient lighting 808 & 880 East Mill St. / 5

TENANT 808 & 880 EAST MILL STREET The County of San Bernardino Sheriff s department has occupied the property since 2000, expanding onto both parcels in 2003.

6 TENANT 808 & 880 EAST MILL STREET The County of San Bernardino Sheriff s department has occupied the property since 2000, expanding onto both parcels in All the Sheriff department heads, officers, administrative staff, support, finger print division, records, and specialty forces such as bomb squad, under cover narcotics, and gang units operate out of this facility. Approximately $1.1 million in tenant improvements were completed in 2000, including private offices, bull pen, break rooms, restrooms, lockers & showers, gym, and elevator. Additional improvements were made in 2007/2008, and second warehouse was constructed in 2016 for the Sheriff s riot/urban security vehicles. County of San Bernardino has an AA credit rating from Fitch, with similar from Moody s and S&P. County of San Bernardino is the tenant under two separate leases: 808 EAST MILL STREET commenced in 2000 and was renewed multiple times by the County, now expiring on December 31, County has no further options after December 31, Rate increases are annual per CPI, not to exceed 4%. County has standard governmental 90 day termination right. 880 EAST MILL STREET commenced in April 2003, has been extended several times, and now expires January 31, County has no renewal options in this lease. Base Rent increases 3% annually. County has standard governmental 90 day termination right, but rent is guaranteed through January 31, Both leases are full service gross (landlord pays taxes, insurance, maintenance, utilities, and regular janitorial). Decisions regarding County leases / locations are made through the County Real Estate Services Department and must be approved through majority vote from Board of Supervisors of the County of San Bernardino.

7 FITCH AFFIRMS SAN BERNARDINO COUNTY TRANSP AUTH, CA S SALES TAX REVS AT AA+ ; OUTLOOK STABLE Fitch Ratings-San Francisco-12 August 2016: Fitch Ratings affirms the following ratings for San Bernardino County Transportation Authority, California s sales tax revenue bonds at AA+ : $88 million series 2012A; $110 million series 2014A. The Rating Outlook is Stable. SECURITY The bonds are payable from a first lien pledge of the authority s sales tax revenues, net of collection charges. The sales tax revenues derive solely from the voter-approved one-halfcent Measure I sales tax to be collected through KEY RATING DRIVERS The AA+ sales tax revenue bond rating reflects the fundamentally strong local economy, solid growth prospects, satisfactory limitations on additional leverage, and limited plans for new issuance. Solid Growth Prospects: Fitch views growth prospects for pledged revenues as solid due to consistent population and employment growth in San Bernardino County, mixed income ratios and improving unemployment rates. The regional economy s growth is driven by the relatively lower cost of living relative to coastal areas and abundant developable land. Resilient Revenue Stream: Pledged sales tax revenues are resilient to both cyclical declines. Fiscal 2015 revenues cover maximum annual debt service (MADS) for existing debt by 9.4x. Limited Leverage Plans: The authority funds the bulk of its projects from ongoing revenues. The authority is currently formulating its long range plan and expects to issue new money and refunding bonds in fiscal 2019 and While it is too early to have estimates on the size, the authority believes MADS coverage would not drop below 3.0x, well above the sound additional bonds test (ABT) of 2.0x MADS. No IDR: The authority does not have material operations. Therefore, Fitch does not believe the assignment of an IDR is relevant to its analysis. RATING SENSITIVITIES UNEXPECTED LEVERAGE: The current rating assumes the authority s debt plans remain relatively limited and MADS coverage remains in excess of 3.0x. Leveraging of pledged revenues beyond these expectations could lead to a negative rating action. CREDIT PROFILE The authority provides funding for public transit systems, and oversees the construction, maintenance, improvement and operation of roads and highways. The authority does not own or maintain facilities. SALES TAX REVENUE GROWTH PROSPECTS The sales tax revenue bonds are payable from the half-cent retail transactions and use tax (sales tax) authorized by the voter-approved Measure I ordinance and levied throughout San Bernardino County, net of the state s Board of Equalization (BOE) administrative fee. The tax expires in The tax base is broad and diverse and Fitch views growth prospects for San Bernardino County as solid due to consistent population and employment growth. The BOE distributes the sales tax revenues on a monthly basis according to a predetermined formula with quarterly true-ups. Residual sales tax revenues following debt service payments are released to the authority for other purposes, including distributions to local jurisdictions, investments in capital projects, and administrative costs. SECURITY STRUCTURE RESILIENT THROUGH DOWNTURNS Legal provisions providing protections for bondholders include an additional bonds test (ABT) of 2.0x MADS for bonds outstanding plus bonds to be issued. The authority expects to issue new money and refunding bonds under Measure I in fiscal 2019 and fiscal 2020; however, estimates for par are unavailable until the long range master plan is completed. Nonetheless, the authority believes and Fitch assumes that MADS debt service coverage will remain in excess of 3.0x. Fitch evaluates the revenue stream s sensitivity to economic downturns by considering both the estimated reduction in sales tax revenues under a 1% contraction in national GDP and the largest consecutive decline in actual sales tax revenues over the past 15 years. Debt service coverage based on fiscal 2015 revenues is quite resilient, with an estimated cushion of 13x the Fitch-estimated 7% revenue loss in a moderate economic contraction scenario, and 3x the greatest consecutive historical decline, which amounted to approximately 28% from Fitch focused its analysis on debt service coverage and resilience assuming the authority maintains at least 3.0x MADS coverage based on the issuer s expectations for leverage, which are consistent with its history of relatively low leverage of its sales tax revenues. Pledged revenue s resilience from 3.0x DSC is strong with the ability to withstand a 67% revenue decline, equal to 9.7x the estimated negative 1% GDP decline scenario of 7% and 2.35x the greatest historical decline in revenues. Although the coverage of the largest historical decline is low for the rating category, Fitch notes that fiscal 2016 revenues are expected to realize year-over-year growth of about 4.3% and continued growth prospects are solid. In addition, the rating incorporates the outsized impact of the housing market collapse on the San Bernardino County and Fitch s expectation that such a drastic decline in pledged revenues would not recur in future economic downturns. All debt is fixed rate. The authority does not have material operations. Therefore, Fitch does not believe the assignment of an IDR is relevant to its analysis. 808 & 880 East Mill St. / 7

8 AERIAL PHOTO

9 PARCEL MAP 808 & 880 East Mill St. / 9

10 SITE PLAN New Warehouse / Garage 808 & 880 EAST MILL STREET

11 808 EAST MILL STREET FLOOR PLANS FIRST FLOOR SECOND FLOOR 808 & 880 East Mill St. / 11

12 880 EAST MILL STREET FLOOR PLANS BUILDING 2 BUILDING 1

13 880 EAST MILL STREET FLOOR PLANS BUILDING & 880 East Mill St. / 13

808 & 880 EAST MILL STREET 808 880 Exclusively prepared by: BRANDON KEITH Senior Vice President Lic #01177792 858.458.3326 bkeith@voitco.

14 808 & 880 EAST MILL STREET Exclusively prepared by: BRANDON KEITH Senior Vice President Lic # WALTER CHENOWETH Executive Vice President Lic # SEAN SULLIVAN Associate Lic #

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