3660 CASTRO VALLEY BLVD 3660 Castro Valley Blvd Castro Valley, CA 94546

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1 Presented to: Darlene Modesto 3660 CASTRO VALLEY BLVD 3660 Castro Valley Blvd Castro Valley, CA Market Positioning and Pricing Analysis Presented by: Louis Kwok

2 N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E Non-Endorsements Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. Disclaimer THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â 2017 Marcus & Millichap. All rights reserved CASTRO VALLEY BLVD Castro Valley, CA ACT ID Y

3 P R E S E N T E D B Y Louis Kwok Associate Oakland Office Tel: (510) Fax: (510) louis.kwok@marcusmillichap.com License: CA

4 TABLE OF CONTENTS SECTION INVESTMENT OVERVIEW 01 Property Overview Regional Map Local Map Aerial Photo FINANCIAL ANALYSIS 02 Tenant Summary Lease Expiration Chart Operating Statement Notes Pricing Detail Proposal Price MARKET COMPARABLES 03 Sales Comparables MARKET OVERVIEW 04 Market Analysis Demographic Analysis

5 INVESTMENT OVERVIEW 5

6 PROPERTY OVERVIEW PROPERTY OVERVIEW Marcus & Millichap as Advisor is pleased to present the rare opportunity to acquire 3660 Castro Valley Boulevard. The value-add opportunity is located on Castro Valley Boulevard. The multi-tenant property is in a prime Bay Area location and is less than a half-mile from Highway 580 and Castro Valley BART Station. This is a rare opportunity to secure a retail site in downtown Castro Valley (Unincorporated Alameda County). The site is well-suited for a variety of commercial/retail uses and is located in the Castro Valley Central Business District. The Castro Valley BART station is 0.4 miles away and Interstate 580 is less than 0.4 miles away. Oakland, Hayward, Dublin, and Pleasanton can be reached quickly via driving or BART. PROPERTY OVERVIEW Prime Location Conveniently Located Only 0.4 Miles to Castro Valley BART Station Located in Castro Valley's Central Business District and Within Blocks of Three Supermarkets and Three National Drug Stores 0.5 Miles from Highway 580 Redevelopment Oopportunity 6

7 REGIONAL MAP 7

8 LOCAL MAP 8

9 AERIAL PHOTO 9

10 FINANCIAL ANALYSIS 10

11 TENANT SUMMARY FINANCIAL ANALYSIS 11

12 OPERATING STATEMENT FINANCIAL ANALYSIS 12

13 PRICING DETAIL FINANCIAL ANALYSIS 13

14 PROPOSAL PRICE FINANCIAL ANALYSIS 14

15 MARKET COMPARABLES 15

16 8 SALES COMPARABLES MAP 3660 CASTRO VALLEY BLVD (SUBJECT) Redwood Road Add-Value Or Owner/user Opportunity Dana's Party Planet SALES COMPARABLES 16

17 PROPERTY 3660 CASTRO NAME VALLEY BLVD SALES MARKETING COMPARABLES TEAM SALES COMPARABLES 3660 CASTRO VALLEY BLVD 3660 Castro Valley Blvd, Castro Valley, CA, REDWOOD ROAD Redwood Road, Castro Valley, CA, ADD-VALUE OR OWNER/USER OPPORTUNITY 3169 Castro Valley Blvd, Castro Valley, CA, rentpropertyname1 rentpropertyname1 rentpropertyname1 Tenants Asking Price: $1,380,000 Ric s Kitchen Price/SF: $ Cigarette Box II CAP Rate: 4.18% Villa Roma Year Built: 1958 Close Of Escrow: 9/1/2016 Sales Price: $2,600,000 Price/SF: $ Year Built: 1998 Close Of Escrow: 8/2/2016 Sales Price: $1,300,000 Price/SF: $ Year Built: 1953 Annual Per SF rentpropertyaddress1 Income $83,600 $19.90 Expenses $25,975 $6.18 NOI $57,625 $13.72 Occupancy 100.0% rentpropertyaddress1 rentpropertyaddress1 17

18 PROPERTY 3660 CASTRO NAME VALLEY BLVD SALES MARKETING COMPARABLES TEAM SALES COMPARABLES DANA'S PARTY PLANET 3180 Castro Valley Blvd, Castro Valley, CA, rentpropertyname1 rentpropertyname1 rentpropertyname1 Close Of Escrow: 6/1/2016 Sales Price: $2,087,000 Price/SF: $ Year Built: 1946 rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1 18

19 MARKET OVERVIEW 19

20 MARKET OVERVIEW ECONOMY Major employers come from a wide array of industries: education, healthcare, financial services, telecommunications, retail, technology, manufacturing and transportation. The metro is a transportation hub of the Bay Area, and Oakland International Airport, BART, two major rail lines and the Port of Oakland all play important roles. Oakland is a major high-tech employment market. High-tech businesses currently employ tens of thousands of workers. The metro boasts an extensive underground fiber-optic cable network and is a regional telecommunications hub. MAJOR AREA EMPLOYERS Kaiser Permanente Clorox Co. Alameda County University of California-Berkeley Lawrence Livermore National Laboratory Contra Costa County Safeway Inc. Chevron Corp. EMC Corp. Wells Fargo * Forecast SHARE OF 2016 TOTAL EMPLOYMENT 8% MANUFACTURING 17% PROFESSIONAL AND BUSINESS SERVICES 15% 10% 4% GOVERNMENT LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES 18% TRADE, TRANSPORTATION AND UTILITIES 6% CONSTRUCTION + 17% EDUCATION AND HEALTH SERVICES 2% INFORMATION 3% OTHER SERVICES 20

21 MARKET OVERVIEW DEMOGRAPHICS The population will expand by more than 100,000 residents through 2021, resulting in the formation of nearly 40,000 households. Due in part to high home prices, the homeownership rate of 57 percent is below the national rate of 64 percent. Roughly 40 percent of the population age 25 and older have attained a bachelor s degree, with 16 percent also holding a graduate or professional degree. SPORTS 2016 Population by Age 6% 0-4 YEARS 19% 5-19 YEARS 7% YEARS 29% YEARS 27% YEARS 13% 65+ YEARS EDUCATION 2016 POPULATION: 2.8M Growth *: 3.5% 2016 HOUSEHOLDS: 985K Growth *: 3.6% 2016 MEDIAN AGE: 38 U.S. Median: MEDIAN HOUSEHOLD INCOME: $78,000 U.S. Median: $57,200 QUALITY OF LIFE The past decade s downtown redevelopment initiatives have resulted in housing, office and retail construction, greatly improving the quality of life for urban dwellers. In the East Bay, people enjoy cultural and recreational activities, including the symphony, an award-winning zoo, the Paramount Theater, the Oakland Museum of California, along with numerous parks. Major-league sports teams include the Oakland Athletics and Oakland Raiders, both of which play at the Oakland-Alameda County Coliseum. Oracle Arena is home to the Golden State Warriors. There are more than a dozen colleges and universities in the area, including the University of California-Berkeley and California State University, East Bay. ARTS & ENTERTAINMENT * Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody s Analytics; U.S. Census Bureau 21

22 BAY AREA MARKETS MARKET OVERVIEW Rising Development Slowing Rent Growth; Investor Demand Remains Elevated High-wage job growth powering retail strength amid expanding household formation. A diverse Bay Area economy, driven by the high-tech and biotech segments, startups and financial services, is providing the leverage to power new household formation and fuel retail spending. As residents form new households, demand for essential retail services is rising in lockstep. In addition, booming demand for apartments has allowed for a higher level of population concentration in urban environments, raising traffic counts in neighborhood centers and restaurants. While a pickup in development over the past year fostered a minor tick up in the vacancy rate in the region, vacancy remains sufficiently tight to support a sixth year of expanding rents. Construction picks up in San Jose and Oakland but remains muted in San Francisco. Tight vacancy has led developers to increase the pace of deliveries, with all three metros set to post higher completions in While the lone large project in San Francisco is the 6X6 mall in MidMarket, more projects are underway in the other two metros. Oakland will receive two shopping centers: New Season s Market in Emeryville and the Pacific Pearl Shopping Center in Pleasanton. Meanwhile, builders in San Jose will complete the first phase of The Village at San Antonio Center and Brokaw Plaza. A high rate of pre-leasing will limit the effects of new construction in the marketplace, supporting tighter vacancy across the region. Retail 2017 Outlook Investment Trends Oakland Metro Vacancy Y-O-Y BasisPoint Change Asking Rent Y-O-Y Change Oakland 3.6% -20 $ % San Francisco 2.4% 0 $ % San Jose 5.6% 20 $ % Well-positioned assets inside Oakland represent the overwhelming majority trades and change hands at cap rates in the low-6 percent range. Price per square foot can exceed $200. Transitioning neighborhoods along the 80 and 880 Corridor will generate additional transactions over the coming year. San Francisco A lack of listings is limiting deal flow, with cap rates that have pushed to the high-3 to mid-4 percent range, depending on asset quality. Properties generally trade at prices in the high-$500 band, with peninsula assets supporting an additional $50 to $100 per square foot relative to San Mateo County locations. * Trailing 12 months through 1Q17 Sources: CoStar Group, Inc.; Real Capital Analytics San Jose Institutions will stick to Class-A grocery-anchored centers in high-traffic neighborhoods, while private investors bid for other adjacent centers in the surrounding area. Cap rates will vary from the low- to high-5 percent span, depending on location and tenancy. Price per square foot will range from the low $400s to high $700s. 22

23 BAY AREA MARKETS MARKET OVERVIEW 1Q17-12-MONTH TREND EMPLOYMENT CONSTRUCTION VACANCY RENTS 2.8% increase in total employment Y-O-Y Over the past year, Oakland employers hired 31,400 workers, slightly below the 36,400 jobs created in the prior year as a tight labor market limited growth. More than 9,500 positions were added at office-using firms. The strong labor market pushed down the unemployment rate by 60 basis points to just below 4 percent, the lowest since ,000 square feet completed Y-O-Y Over the past year, development increased from 430,000 square feet. Nearly half the development was in the 680 Corridor North submarket, where 275,000 square feet came online. During the remainder of the year, 500,000 square feet will come to market, with over 200,000 square feet coming online in the I-80 Corridor submarket. 10 basis point decrease in vacancy Y-O-Y Vacancy declined to 3.8 percent as supply and demand were roughly in line. The Highway 4 submarket outperformed, falling 140 basis points to 5.4 percent. The 680 Corridor underperformed, with the North submarket vacancy up 70 basis points to 4 percent and the South submarket up 90 basis points to 4.1 percent. increase in the 4.8% average asking rent Y-O-Y Over the past year, the average asking rent rose to $25.57 per square foot, roughly in line with the trend of the preceding year. Properties inside the city of Oakland outperformed, rising 8.7 percent to $26.72 per square foot. All submarkets recorded increases, with the I-80 Corridor a top performer. Asking rents rose 7.1 percent to $28.42 per square foot. * Forecast 23

24 PROPERTY 3660 CASTRO NAME VALLEY BLVD Created on August 2017 POPULATION 1 Miles 3 Miles 5 Miles 2021 Projection Total Population 27, , , Estimate Total Population 26, , , Census Total Population 25, , , Census Total Population 25, , ,941 Current Daytime Population 2016 Estimate 25, , ,440 HOUSEHOLDS 1 Miles 3 Miles 5 Miles 2021 Projection Total Households 10,423 56, , Estimate Total Households 10,364 56, ,546 Average (Mean) Household Size Census Total Households 9,760 52, , Census Total Households 10,116 52, ,088 Occupied Units 2021 Projection 10,423 56, , Estimate 10,419 56, ,392 HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles 2016 Estimate $150,000 or More 10.92% 11.33% 10.58% $100,000 - $149, % 16.39% 17.26% $75,000 - $99, % 13.45% 14.29% $50,000 - $74, % 17.20% 17.43% $35,000 - $49, % 12.72% 12.44% Under $35, % 25.97% 25.52% Average Household Income $87,365 $92,570 $90,295 Median Household Income $64,494 $65,566 $66,654 Per Capita Income $34,156 $32,589 $30,485 MARKETING DEMOGRAPHICS TEAM HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 Miles Total Average Household Retail Expenditure $70,571 $71,254 $71,939 Consumer Expenditure Top 10 Categories Housing $21,429 $21,689 $21,735 Shelter $14,294 $14,476 $14,482 Transportation $11,305 $11,729 $11,914 Food $7,485 $7,645 $7,721 Personal Insurance and Pensions $6,670 $6,986 $7,044 Health Care $4,333 $4,256 $4,342 Utilities $3,452 $3,505 $3,534 Entertainment $2,764 $2,755 $2,755 Cash Contributions $1,958 $1,812 $1,892 Apparel $1,778 $1,813 $1,821 POPULATION PROFILE 1 Miles 3 Miles 5 Miles Population By Age 2016 Estimate Total Population 26, , ,497 Under % 25.32% 25.04% 20 to 34 Years 19.55% 22.27% 22.32% 35 to 39 Years 6.70% 6.99% 6.91% 40 to 49 Years 14.43% 13.79% 13.68% 50 to 64 Years 20.87% 19.72% 19.47% Age % 11.91% 12.57% Median Age Population 25+ by Education Level 2016 Estimate Population Age , , ,491 Elementary (0-8) 3.17% 7.01% 7.39% Some High School (9-11) 4.72% 7.17% 7.80% High School Graduate (12) 27.54% 25.95% 26.44% Some College (13-15) 25.33% 22.10% 21.87% Associate Degree Only 8.97% 7.96% 7.57% Bachelors Degree Only 20.04% 19.00% 19.02% Graduate Degree 8.33% 8.25% 7.28% Source: 2016 Experian 24

25 P R E S E N T E D B Y Louis Kwok Associate Oakland Office Tel: (510) Fax: (510) louis.kwok@marcusmillichap.com License: CA