PEAR TREE CENTER. Pear Tree Center PEAR TREE CENTER NORTHERN CALIFORNIA GROCERY-ANCHORED COMMUNITY CENTER INVESTMENT OPPORTUNITY UKIAH, CA

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1 UKIAH, CA Pear Tree Center NORTHERN CALIFORNIA GROCERY-ANCHORED COMMUNITY CENTER INVESTMENT OPPORTUNITY Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp., a real estate broker licensed with the California Department of Real Estate, License Number ( HFF ) 1

2 THE OPPORTUNITY HFF, as exclusive advisor, is pleased to present to qualified investors the opportunity to acquire the fee simple interest in Pear Tree Center (the Property ) located in Ukiah, California. Currently 96% leased, Pear Tree Center is a 199,565 square foot grocery-anchored shopping center, representing the most dominant retail project in the trade area. Approximately 76% of all revenue is generated from national or credit-worthy tenants, and the Property has maintained an average occupancy of 96% over the past 10 years, signifying predictable in-place cash flow and solidifying the asset s dominance in the marketplace during any economic cycle. Additionally, Pear Tree Center is a truly generational opportunity, as the Property is being made available for sale for the first time since it was originally developed in 1977, and many of the leases have been negotiated over 15 years ago. As such, Pear Tree Center offers investors a rare opportunity to acquire a dominant grocery anchored center in Northern California with stable cash flow and significant value enhancement opportunities. UKIAH VALLEY MEDICAL CENTER 730 EMPLOYEES 17,969 CARS PER DAY E PERKINS STREET FUTURE ORCHARD AVENUE 2 ER 51,100 CARS PER DAY

3 PROPERTY SUMMARY Property Address Corner of E. Perkins Street & N. Orchard Avenue Property Type Grocery Anchored Center GLA 199,565 Square Feet Occupancy 96% Year Built 1977 Land Area 19.4 Acres / 844,298 SF Parking 901 Stalls (4.5 : 1,000 Ratio) INVESTMENT HIGHLIGHTS DOMINANT GROCERY-ANCHORED SHOPPING CENTER Pear Tree Center is anchored by an impressive mix of nationally recognized tenants including Lucky Supermarket (Save Mart), Ross Dress for Less, Big 5 Sporting Goods, and JC Penney. These anchors drive a favorable anchor-to-shop ratio, as approximately 78% of the GLA is comprised of anchor and pad space. Additionally, Home Depot and Kohl s shadow anchor the Property, providing an even larger consumer draw. Chipotle is also currently building a brand new pad at the corner of E. Perkins Street and N. Orchard Avenue, demonstrating the strong tenant draw of Pear Tree Center. (NAP) (NAP) 3

4 INVESTMENT HIGHLIGHTS AERIAL FACING SOUTH STABLE IN-PLACE CASH FLOW WITH HIGH HISTORICAL OCCUPANCY Currently 96% leased, Pear Tree Center provides predictable and stable cash flow with nearly 76% of revenue being generated from national/credit tenants, providing name-brand recognition, increased consumer draw and surety of income. Additionally, the Property has maintained an average occupancy of 96% over the past 10 years, proving strong retailer and consumer demand even through economic downturns. In fact, average tenure for tenants at Pear Tree Center exceeds 15 years, and 88% of the Property s GLA has been occupied by the same tenant for over 7 years, providing further testament to the resiliency of the cash flow. STRONG VISIBILITY AND HIGH IDENTITY LOCATION Pear Tree Center is strategically located with direct access to U.S. Route 101, benefitting from ease of access to one of California s most utilized transportation corridors with over 51,000 cars passing the Property daily. Additionally, the Property is less than 7 miles from California Route 20 and 14 miles from California Route 175, providing easy access for the communities of both Lake County and Mendocino County.»» The Property benefits from billboard signage visible from U.S. Route 101 solely dedicated to Pear Tree Center, providing unmatched visibility for customers traveling on the highway both North and Southbound. RUSSIAN REGIONAL DRAW AND EXPANSIVE TRADE AREA 4 ER As the county seat and largest city in Mendocino County, Ukiah serves as the city center for Mendocino County as well as much of neighboring Lake County. As a result, some customers travel to Pear Tree Center from distances of over 50 miles, as similar options in the rural communities surrounding Ukiah are limited. When combined with the largest concentration of retailers in Ukiah and the proximity to Ukiah Valley Medical Center one of the largest employers and the largest healthcare facility in all of Mendocino County it is clear that Pear Tree Center has a broader consumer reach than a typical grocery anchored center.»» Ukiah was named the #1 best small town in California and sixth best place to live in the entire United States.»» Further bolstering Pear Tree Center s location is the soon to be built Mendocino County Court house located one block away on E. Perkins and Leslie Streets. The three-story $94 million dollar planned courthouse will house eight courtrooms, a family court mediation rooms, and deliberating rooms. 51,100 CARS PER DAY

5 DISTANCE FROM: SANTA ROSA 60 MILES NAPA 78 MILES SAN FRANCISCO 115 MILES SACRAMENTO 145 MILES SILICON VALLEY 162 MILES RIVER FUTURE UKIAH MUNICIPAL AIRPORT 51,100 CARS PER DAY S STATE STREET ORCHARD AVENUE FUTURE SITE OF MENDOCINO COURTHOUSE DOWNTOWN UKIAH 17,969 CARS PER DAY E PERKINS STREET UKIAH VALLEY MEDICAL CENTER 730 EMPLOYEES 5

6 SIGNFICANT VALUE ENHANCEMENT POTENTIAL Given the average length of the lease term at the Property, many of the tenants have lease rates that are well below market. As such, the Property provides exceptional mark-to-market potential when tenant suites expire, and current in-place leases for anchors and junior anchors are estimated to be 87% below market. In addition, Pear Tree Center sits on 19.4 acres and 7 parcels, providing an investor a flexible exit strategy with the ability to lower their basis in the Property and enhance future returns. HIGH BARRIERS TO ENTRY MARKET Pear Tree Center benefits from significant barriers to entry that will continue to limit future competition due to the challenging entitlement process, geographic land barriers, and established traffic patterns. In particular, Ukiah is well known for its high social and political barriers to entry, as the community is actively involved in maintaining and preserving the rural charm of the area. FREE AND CLEAR INVESTMENT OFFERING Pear Tree Center will be made available free and clear of existing financing, presenting an investor with the opportunity to capitalize on historically low interest rates and favorable market financing terms. 6 ER

7 VALUE CREATION OPPORTUNITIES MARK-TO-MARKET OPPORTUNITY RE-TENANT WITH FOOD USERS»» Mark-to-Market Potential»» Enhancement of Tenant Mix with Food Users»» Lease-up Opportunity of Vacant Space POTENTIAL PAD DEVELOPMENT»» Enhance Visibility with Signage and Landscaping LEASE-UP OPPORTUNITY 5,500 SF FUTURE ENHANCE MONUMENT SIGNAGE OPPORTUNITY 7

8 Mendocino Ukiah Clearlake INVESTMENT ADVISORS NICHOLAS BICARDO Managing Director dir CA Lic. # DANNY REDDIN Associate Director dreddin@hfflp.com dir CA Lic. # Healdsburg Windsor Saint Helena Guerneville Santa Rosa BRANDON ROGOFF Vacavi Rohnert Park Senior Real Estate Analyst brogoff@hfflp.com dir CA Lic. # Napa Fairfield Petaluma American Canyon Novato CAPITAL MARKETS ADVISOR Vallejo Point Reyes National Seashore Benicia Pinole Concord San Anselmo PETER SMYSLOWSKI Managing Director psmyslowski@hfflp.com dir CA Lic. # C Richmond Larkspur Lafayette Berkeley Moraga San Francisco Oakland Alamo San Ram Alameda San Leandro Daly City D Hayward Pacifica 2015 Holliday Fenoglio Fowler, L.P. HFF (NYSE: HF) operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF offers clients a fully integrated national capital markets platform including debt placement, investment sales, advisory services, structured finance, private equity, loan sales and commercial loan servicing. Holliday Fenoglio Fowler, L.P. ( HFF ) has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all references to age, square footage, income, expenses, and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. Burlingame San Mateo Union City Fremon Redwood City Suite California Street, San Francisco, California Palo Alto hfflp.com Half Moon Bay