196th Street Retail Multi-Tenant Triple Net Lease Opportunity

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1 Capital Markets Institutional Properties 196th Street Retail Multi-Tenant Triple Net Lease Opportunity th Street SW Lynnwood, Washington 196thStreetRetail.com

196 th Street Retail 4201 196th Street SW Lynnwood, Washington EXCLUSIVELY MARKETED BY Dino A. Christophilis Senior Vice President 206.292.6152 dino.christophilis@cbre.com Daniel Tibeau Associate 206.

3 196 th Street Retail th Street SW Lynnwood, Washington EXCLUSIVELY MARKETED BY Dino A. Christophilis Senior Vice President Daniel Tibeau Associate Parker Ksidakis Associate Liza Janssen Client Services Coordinator TO LEARN MORE ABOUT THE PROPERTY VIEW WEBSITE DOWNLOAD FULL OM

4 INVESTMENT SUMMARY OFFERING PRICE $5,600,000 Price Per SF $ NOI (Year 1) $240,085 NOI (Year 2) $342,839 Cap Rate (Year 1) 4.29% Cap Rate (Year 2) 6.12% Unleveraged IRR 7.89% Leveraged IRR 11.57% Address Building Size th St SW Lynnwood, WA ,317 SF Occupancy 56.00% Site Size 75,359 SF Year Built Parcel Numbers , Parking Zoning ± 85 spaces CC-C (City Center-Core), City of Lynnwood INVESTMENT SUMMARY List Price $4,500, NOI (Years 1-10) $210, Cap Rate (Years 1-10) 4.68% Building Size ± 8,261 SF Price per SF $ Lot Size Lease Type ±38,234 SF ±0.88 Acres NNN Parking Property Address County ±24 spaces th Avenue SE Renton, WA King Parcel Number Zoning CA - Commercial Arterial Estimated Delivery Spring Capital Markets Institutional Properties

INVESTMENT OVERVIEW BELOW MARKET RENTS WITH SIGNIFICANT UPSIDE POTENTIAL The tenants are all long-term occupants with rents substantially below market.

5 INVESTMENT OVERVIEW BELOW MARKET RENTS WITH SIGNIFICANT UPSIDE POTENTIAL The tenants are all long-term occupants with rents substantially below market. The average rent for the existing tenants is only $14.65/SF, while the market suggests a market rent near $21.00/SF. As the local market has shown tremendous growth in terms of consumer draw, new development, and population growth, the existing lease escalations have not kept pace with market trends. This difference could allow for as much as 40% rental upside upon lease roll-over. MAJOR CAPITAL EXPENDITURES WITH IMPROVEMENTS TO BUILDING SYSTEMS Since 2010, the property received more than $500,000 in long-term capital upgrades including a new roof covering, new HVAC units, interior renovations, and new paving in the rear parking area for extended life. Given these recent improvements, the new ownership should experience minimal capital expenditures throughout the holding period. Further, the vacant space is already fully built-out to a vanilla shell condition and should require only limited tenant improvements upon lease-up. NATIONAL TENANTS, STRONG CREDIT, AND LONG-TERM OCCUPANCY The Sherwin Williams tenant is backed by the national brand with an investment grade credit rating of BBB. The Taco Del Mar tenant is a local franchisee with strong performance, while the Ed Wyse company was recently purchased by the Bassett Salon Group in 2017, a regional salon operator with over 250 locations across the country. Most of the tenants have been at the property for over 15 years, which highlights the appeal of the location and its ability to allow for successful business operations. REDEVELOPMENT OPPORTUNITY AND STRONG UNDERLYING LAND VALUE The local market has been exploding with new development as part of the city of Lynnwood s City Center master plan in anticipation of light-rail transit entering the market at the southerly portion of the neighborhood by To accommodate the increased traffic and population in the area, the city will be completing several upgrades to the traffic network and infrastructure including road widening projects, new road construction, and new freeway overpasses. Private development has also rushed to keep pace, including the recent construction of new mid-rise apartments, senior living facilities, hotels, and a full-service grocery center. Given the property s desirable lot size/configuration, City Center-Core zoning, and location along 196th Street SW, it would serve as an excellent candidate for redevelopment once the existing lease terms expire. NNN LEASES WITH FULL REIMBURSEMENTS The lease terms require each tenant to reimburse the ownership for all operating expenses, including a 10%-15% administration fee for management. The ownership is responsible for structural repairs, roof, and utility systems. Given the recent improvements made to the major building components, capital expenditures should be minimal allowing consistent yields for a potential investor.

CITY CENTER SENIOR LIVING APTS Completed 2017 308 Units 19501 40th Ave W POPLAR WAY EXTENSION BRIDGE Design Phase Joins Poplar Way & 33rd Ave W 196TH STREET SW ROAD WIDENING Proposed Construction to

6 CITY CENTER SENIOR LIVING APTS Completed Units th Ave W POPLAR WAY EXTENSION BRIDGE Design Phase Joins Poplar Way & 33rd Ave W 196TH STREET SW ROAD WIDENING Proposed Construction to begin th Street SW (from 37th to 48th) SUBJECT PROPERTY 5 CITY CENTER APTS (AFFORDABLE HOUSING) Completed Units th Street SW PROPOSED CITY CENTER STATION 5 HILTON GARDEN INN Under Construction 150 Rooms 3801 Alderwood Mall Blvd PROPOSED TRANSIT CENTER STATION LIGHT RAIL TRACK ALIGNMENT Proposed Open by 2023 LYNNWOOD LIGHT RAIL EXTENSION Proposed Open by For reference only. Based on data from

LYNNWOOD'S "CITY CENTER" PROJECT In 2008, the Sound Transit II ballot measure passed to fund, among other things, a light rail extension from Husky Stadium in Seattle to Lynnwood in the north.

eventually create a vibrant, pedestrian-friendly, commercial center over the next 20 years. The re-zone grants developers greater densities and building heights up to 340 feet in some areas.

construction, and new freeway overpasses. To parallel these infrastructure improvements, the city will also add several new parks, bicycling trails, and common gathering spaces.

7 LYNNWOOD'S "CITY CENTER" PROJECT In 2008, the Sound Transit II ballot measure passed to fund, among other things, a light rail extension from Husky Stadium in Seattle to Lynnwood in the north. Fueled by the news of light rail entering the area by 2023, the city of Lynnwood has re-zoned the surrounding areas as City Center with the intent to foster new high-density development and eventually create a vibrant, pedestrian-friendly, commercial center over the next 20 years. The re-zone grants developers greater densities and building heights up to 340 feet in some areas. In preparation for the increased traffic flows and population density, the city is performing several upgrades to the area s transportation network including road widening projects, new road construction, and new freeway overpasses. To parallel these infrastructure improvements, the city will also add several new parks, bicycling trails, and common gathering spaces. Most of the public improvements will begin construction in 2018 with completion dates scheduled by the time the light rail connection is completed in The city envisions that its heavy initial investment will lay the foundation for private development to fill-in the remainder of the City Center master plan. While the city of Lynnwood is only now starting construction of its public improvements, private developers have been busy completing several large projects in anticipation of the changes to the area. In 2017, private developers opened a 347-unit mid-rise affordable housing project (City Center Apartments), and a 308-unit senior living project (City Center Senior Living) located within one block of the subject. Further private developments are currently under construction, including a new 150-room Hilton hotel, while others are still in the planning/permitting stages and should enter the market in the upcoming 3-5 years. The local market has seen tremendous interest from long-term developers looking to capitalize on the improving demographics in the market. Several large tracts of land (10+ acres) are held by national developer/operators with plans for redevelopment over the next 5-10 years. DISTANCE FROM PROPERTY TO SEATTLE 16.4 MILES TACOMA 49.1 MILES DRIVE-TIME DEMOGRAPHICS 5 Minute 10 Minute 15 Minute PLACE OF WORK Total Businesses 2,539 7,434 18,062 Daytime Employment (Total Employees) 29,485 73, ,580 POPULATION 2017 Estimated Population 41, , , Projected Population 43, , ,858 HOUSEHOLDS 2017 Estimated Households 16,473 82, , Projected Households 17,338 87, ,689 BELLEVUE 19.3 MILES INCOME 2017 Est. Median Household Income $58,030 $69,839 $71, Prj. Median Household Income $64,765 $78,543 $79,685

PROPERTY HIGHLIGHTS SELF-STORAGE POTENTIAL FOR EXISTING VACANT AREA The existing 10,700 SF vacant area offers a front-facing retail portion and a rear-facing loading area.

Given the substantial amount of new residential development in the immediate area, the existing supply of self-storage will likely be insufficient to match demand.

EXCELLENT VISIBILITY AND INGRESS/EGRESS The building is configured so that the retail spaces front along 196th Street SW for maximum exposure.

The rear portion of the property is accessed from 196th Street SW.

8 PROPERTY HIGHLIGHTS SELF-STORAGE POTENTIAL FOR EXISTING VACANT AREA The existing 10,700 SF vacant area offers a front-facing retail portion and a rear-facing loading area. With demising, this space could be reconfigured with front-facing retail tenants, offering desirable retail depths while the rear portion could be converted to self-storage. Given the substantial amount of new residential development in the immediate area, the existing supply of self-storage will likely be insufficient to match demand. The subject is well-configured for rear self-storage use given the ample parking at the rear of the building and two roll-up access doors. EXCELLENT VISIBILITY AND INGRESS/EGRESS The building is configured so that the retail spaces front along 196th Street SW for maximum exposure. The property offers three ingress/egress points along 196th Street SW, which provides for ease of traffic flowing to and from the center. The rear portion of the property is accessed from 196th Street SW. 196 TH STREET SW MAJOR CAPITAL IMPROVEMENTS Since 2010, the property received a new TPO roof membrane covering, newly installed HVAC units, interior renovations, and new paving in the rear parking area. A total of $500,000 has recently been spent on long-term building improvements, which will minimize capital costs moving forward. HIGH DAILY TRAFFIC COUNTS ALONG 196TH STREET SW The subject is situated along 196th Street SW, which connects to Highway 99 due west of the property, and to the on-ramps for Interstate 5 directly to the east. Daily traffic counts exceed 38,000 vehicles per day, and 196th Street serves as a thoroughfare for commuters traveling to and from their residences. Originally, 196th Street served as Lynnwood s only retail corridor, however, with the addition of the Alderwood Mall and the emergence of big box retail along Alderwood Mall Parkway, the city strategically connected the corridors via the underpass east of the site at Interstate 5. The interchange added to the exit has dramatically assisted traffic flow, while the widening of 196th Street will also lend itself to smoother traffic flow. 196 TH STREET SW

9 Harbour Point Electric 196TH STREET SW Site plan for reference only. Not drawn to scale.

11 AFFILIATED BUSINESS DISCLOSURE CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related entities (each an Affiliate ) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing interests in the same transaction. For example, this Memorandum may be received by our Affiliates, including CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the Property ) may submit an offer to purchase the Property and may be the successful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will act in the best interest of the client(s) it represents in the transaction described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum. CONFIDENTIALITY AGREEMENT This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property. This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the owner of the Property (the Owner ), to be all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner. Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, Affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property. The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner s obligations therein have been satisfied or waived. By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc. If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc. DISCLAIMER 2017 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

CONTACT US Dino A. Christophilis Senior Vice President 206.292.6152 dino.christophilis@cbre.com Daniel Tibeau Associate 206.292.6052 daniel.tibeau@cbre.com Parker Ksidakis Associate 206.292.6158 parker.

12 CONTACT US Dino A. Christophilis Senior Vice President Daniel Tibeau Associate Parker Ksidakis Associate Liza Janssen Client Services Coordinator CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. You should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is solely at your own risk. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited. Capital Markets Institutional Properties 196thStreetRetail.com

FIRESTONE RENTON Triple Net Lease Opportunity

Capital Markets Investment Properties FIRESTONE RENTON Triple Net Lease Opportunity 17808 108th Avenue SE Renton, Washington FirestoneRenton.com EXCLUSIVELY MARKETED BY Dino A. Christophilis Senior Vice