BEST BUY BELOW MARKET RENT PAD TO TACOMA MALL TACOMA, WA

Overview BEST BUY 2214 S 48TH ST, TACOMA, WA 98409 $6,383,000 PRICE 6.50% CAP LEASEABLE SF 46,592 SF LAND AREA 1.15 Acres LEASE TYPE Corporate NNN LEASE EXPIRATION 1/31/2023 YEAR BUILT 2002 PARKING 318 Spaces Rare absolute triple net corporate lease Low rent per square foot of $8.90 Price per foot only $137/ft. Scheduled rent increases for each of the four option periods Irreplaceable location directly across the street from Tacoma Mall the city s largest mall (Nordstrom, Macy s, The Apple Store) soon to under go major redevelopment Tacoma is the 3rd largest city in the tax-free state of Washington This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 2

Investment Highlights THE OFFERING provides the opportunity to acquire a net-lease Best Buy property in Tacoma, Washington, a tax-free state. The subject property is a 46,592 square foot building built on irreplaceable dirt and features below-market rent of $8.90/foot with a corporate guarantee. Rents in the area for junior anchors are $14-16/ft. The Tenant has had a strong operating history at this location since opening the store in 2002, and is able to keep its occupancy cost down due its low rent. BEST BUY is an investment grade tenant with an S&P credit rating of BBB-. In 2017, revenue was $39 Billion and EBITDA was a whopping $2.5 billion. Contrary to Amazon Effect, Best Buy was ranked a Top 10 online retailer in 2017 in terms of gross sales, which were $6 billion. Sales were up 24.1% vs. 2016. THE PROPERTY is located directly across the street from Tacoma Mall, the city s largest and most successful shopping center with 159 tenants including Nordstrom, Macy s, Forever 21, and The Apple Store. The Owner, Simon Property, is planning a major redevelopment of the mall to meet today s shopping standards with enhanced foot traffic and bring new draws such as a movie theater to the market (See Page 12 for more details). The subject property is visible from and located directly off of U.S. Interstate 5, and benefits from traffic counts that exceed 197,000 VPD. Contact the team JOHN ANDREINI jandreini@capitalpacific.com PH: 415.274.2715 CA BRE# 01440360 JUSTIN SHARP jsharp@capitalpacific.com PH: 415.274.7392 CA BRE# 01895013 SEAN TUFTS stufts@capitalpacific.com PH: 206.693.3352 WA BRE#02356897 CO-LISTING AGENTS: JEFF CHRISTIAN & RYAN MORITA First Street Company PH: 707.938.9600 CA BRE# 01461046 CA BRE# 01909453 IN 2017, BEST BUY S ONLINE SALES GREW BY 24.1%, ESTABLISHING THEM AS #10 ON THE INTERNET RETAILER 2017 LIST This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 3

5 REED ELEMENTARY S 38TH STREET Aerial GIAUDRONE MIDDLE SCHOOL 197,000 VPD S SPRAGUE AVEN UE 5 STATE OF WASHINGTON BATES TECHNICAL COLLEGE MA O AC ST ALLENMORE GOLF COURSE Y WA A ANUE T N ON E M AV CITY OF TACOMA ALLENMORE HOSPITAL OAKLAND HIGH SCHOOL TACOMA CITY CENTER BELLARMINE PREP SCHOOL 16 112,000 VPD This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. S 38TH STREET MADISON SCHOOL MADISON SCHOOL S TACOMA WAY 19,220 VPD 4

Surrounding Retail MADISON SCHOOL TACOMA MALL 5

Income & Expense PRICE $6,383,000 Price Per Square Foot: $137.00 Capitalization Rate: 6.50% Total Rentable Area (SF): 46,592 Lot Size (AC): 1.15 STABILIZED INCOME PER SQUARE FOOT Scheduled Rent $8.90 $414,900 Effective Gross Income $8.90 $414,900 LESS PER SQUARE FOOT Taxes NNN $0.00 Insurance NNN $0.00 Total Operating Expenses NNN $0.00 EQUALS NET OPERATING INCOME $414,900 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 6

Rent Roll TENANT INFO LEASE TERMS RENT SUMMARY TENANT NAME SQ. FT. CURRENT RENT MONTHLY RENT YEARLY RENT MONTHLY RENT/FT YEARLY RENT/FT Best Buy 46,592 11/15/2002 1/31/2023 $414,900 $34,575 $414,900 $0.74 $8.90 Option 1 2/1/2023 1/31/2028 $37,388 $448,650 $0.80 $9.63 Option 2 2/1/2028 1/31/2033 $40,200 $482,400 $0.86 $10.35 Option 3 2/1/2033 1/31/2038 $43,013 $516,151 $0.92 $11.08 Option 4 2/1/2038 1/31/2043 $45,825 $549,900 $0.98 $11.80 TOTALS: 46,592 $414,900 $34,575 $414,900 $0.74 $8.90 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 7

Lease Abstract PREMISE & TERM TENANT Best Buy BUILDING SF 46,592 SF LEASE TYPE Corporate NNN TERM 5 years remaining RENT COMMENCEMENT 11/15/2002 RENT EXPIRATION 1/31/2023 OPTIONS REMAINING Four 5-year options EXPENSES TAXES Tenant is responsible for the ad valorem taxes payable with respect to the Property. COMMON AREA MAINTENANCE Tenant is responsible for maintaining all common areas, parking, and all portions of the Premises, including roof and structure. INSURANCE Tenant shall maintain commercial general liability insurance with a combined single limit of $3 million per occurrence, naming Landlord as additional insured. RENT BASE RENT DATE RANGE MONTHLY RENT ANNUAL RENT 11/15/2002-1/31/2023 $34,575 $414,900 UTILITIES Tenant is responsible for direct payment of all utilities. LANDLORD S OBLIGATIONS Absolute net. OPTION RENTS DATE RANGE MONTHLY RENT ANNUAL RENT #1. 2/1/2023-1/31/2028 $37,388 $448,650 #2. 2/1/2028-1/31/2033 $40,200 $482,400 #3. 2/1/2033-1/31/2038 $43,013 $516,151 #4. 2/1/2038-1/31/2043 $45,825 $549,900 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 8

TACOMA MALL BOULEVARD Surrounding Retail Site Plan 5 S PINE STREET S STEELE STREET NOT A PART TACOMA MALL S 47TH STREET 14,437 VPD 5 197,000 VPD 16,385 VPD S 48TH STREET This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 9

Site Plan PYLON SIGN 46,592 RENTABLE SF 1.15 ACRES 318 SPACES 5 S 48TH STREET S 48TH STREET MIDDLE SCHOOL 5 199,000 VPD S 48TH STREET S 47TH STREET 14,437 VPD PYLON SIGN This site plan is a rendering that has been created based on sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 10

Tenant Overview ABOUT BEST BUY Best Buy Co. Inc. (NYSE: BBY) is an American multinational consumer electronics corporation with over 1,400 locations and 125,000 employees. As a leading provider of technology products, services and solutions, the company reported total revenue of $39.53 billion, net income of $897 million, and a net worth of $4.38 billion in FY2017. Best Buy is an investment grade credit tenant and holds an S&P credit rating of BBB-/Stable. In 2017, their online sales grew by 24.1%, establishing them as #10 on the Internet Retailer 2017 List. Their Q4 2017 online sales surpassed $6 billion, up $4.85 billion from the year before. Their overall sales in 2017 surpassed $39 billion, and their 2018 sales are projected to surpass $42 billion. EBITDA is over $2.5 billion. BBB- S&P RATING FISCAL 2018 REVENUE (ESTIMATED) $42 Billion This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 11

In the News TACOMA MALL OWNER PLANS FOR FUTURE OF COMPLEX May 31, 2018 (Tacoma Weekly News) The owner of Tacoma Mall has plans for the future that take into account changes in the retail landscape and consumer spending habits. These could bring in new stores and restaurants, and the return of movie screens to the complex. Charles Davis is senior vice president of development west for Simon Property Group, which owns the mall. On May 29 he met with Tacoma City Council s Economic Development Committee to share ideas about redevelopment. Davis presented some information on the changing retail industry. Some large chains are struggling as a result of taking on too much debt. He said in general retailers are optimistic. Simon malls on average have a 95 percent occupancy rate. Simon has invested in some retailers, such as Aeropostale. It now has control over 12 Sears stores, including the one at Tacoma Mall. The store is targeted for demolition. Plans call for replacing it with several retail stores ranging in size from 10,000 to 30,000 square feet. The current Sears store is 162,000 square feet. Davis said the trend for department stores is to reduce their size. A movie theater of approximately 40,000 square feet is also envisioned. A theater once was in this part of the mall, where the Krispy Kreme now stands. It was demolished in 2002. Davis said discussions have taken place with a theater operator that would have a range of food and beverage options, something available elsewhere in the Puget Sound. This is something we find is missing in this marketplace, Davis remarked. Plans call for sprucing up the northern entrance to the mall from Steele Street, including landscaping and a roundabout just west of Sears. Just south of the roundabout would be five spaces for shops or restaurants, ranging from 3,235 to 9,160 square feet. Davis noted the south side of the mall is now home to many restaurants such as Cheesecake Factory, which he said is doing very well. He noted some restaurant operators have expressed concern about the increase in minimum wage. READ THE FULL ARTICLE This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 12

Demographics POPULATION 1-MILE 3-MILES 5-MILES 2010 14,481 130.535 280,281 2018 16,406 141,947 301,688 2022 17,721 150,843 319,465 SEATTLE (33 MI, 45 MINS) TACOMA 2018 HH INCOME 1-MILE 3-MILES 5-MILES Average $57,743 $63,679 $71,819 TOP EMPLOYERS IN PIERCE COUNTY EMPLOYER # OF EMPLOYEES Joint Base Lewis-McChord 66,054 Local Public School Districts 13,408 MultiCare Health System 6,904 State of Washington 6,455 Franciscan Health System 5,338 AVERAGE HOUSEHOLD INCOMES WITHIN A 5-MILE RADIUS EXCEED $71K This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 13

Location Overview TACOMA, WASHINGTON TACOMA is located on Washington s Puget Sound, 32 miles southwest of Seattle, 31 miles northeast of the state capital, Olympia, and 58 miles northwest of Mount Rainier National Park. Tacoma is the second-largest city in the Puget Sound area and the third largest in the state. Tacoma also serves as the center of business activity for the South Sound region, which has a population of around 1 million. Tacoma is the home of several international companies including staffing company True Blue Inc., lumber company Simpson, and the food companies Roman Meal and Brown and Haley. Tacoma is home to several regional hospitals including MultiCare Tacoma General Hospital, Mary Bridge Children s Hospital, MultiCare Allenmore Hospital and St. Joseph Medical Center. TACOMA EDUCATION COLLEGE S IN TACOMA include the University of Puget Sound, Tacoma Community College, City University of Seattle-Tacoma, Bates Technical College, The Evergreen State College Tacoma Campus, Corban University School of Ministry/Tacoma Campus, and University of Washington Tacoma. Pacific Lutheran University is in Parkland, just south of the city; nearby Lakewood is the home of Clover Park Technical College and Pierce College. 211,357 TACOMA POPULATION (ESTIMATED) This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 14

We d love to hear from you. JOHN ANDREINI jandreini@capitalpacific.com PH: 415.274.2715 CA BRE# 01440360 SEAN TUFTS stufts@capitalpacific.com PH: 206.693.3352 WA BRE#02356897 JUSTIN SHARP jsharp@capitalpacific.com PH: 415.274.7392 CA BRE# 01895013 CO-LISTING AGENTS: JEFF CHRISTIAN & RYAN MORITA First Street Company PH: 707.938.9600 CA BRE# 01461046 CA BRE# 01909453 CAPITAL PACIFIC COLLABORATES. CLICK HERE TO MEET OUR SAN FRANCISCO TEAM: ZEB RIPPLE JOHN ANDREINI ZANDY SMITH JUSTIN SHARP CHRIS KOSTANECKI JOE CACCAMO RICK SANNER CHRIS PETERS DAVE LUCAS JACK NAVARRA This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.