Raley s food source 3557 BRADSHAW RD, SACRAMENTO, CA offering memorandum

Raley s food source 3557 BRADSHAW RD, SACRAMENTO, CA 95827 offering memorandum

D O W N T O W N S ACRAME N T O RANCHO CORDO VA ±171,000 ADT S UBJ E C T PROPE R T Y BRADSHAW ROAD ±42,000 ADT OLD PLACERVILLE ±16,000 ADT

Raley s food source TABLE OF CONTENTS 04 08 12 16 pricing & financial analysis Financial Summary Investment Highlights Tenant Summaries PROPERTY description Physical Description Birds Eye Regional Map financial overview Rent Roll Summary Tenant Profile Income & Expenses Lease Expiration Schedule Assumptions Cash Flow city overview Demographics Top Employers City & MSA Overview Sacramento, CA Recent Developments exclusively listed by: JORDAN UTTAL VP & Director Direct +1 310 919 5707 Mobile +1 818 231 4670 jordan.uttal@matthews.com Lic. #01512755

pricing & financial analysis 4 Offering Memorandum

Raley s food source Deal highlights Full Raley s corporate guarantee backed by 121 stores and $3.2B in revenue Retail NNN lease structures provide for very minimal landlord responsibilities Financial Summary Price $15,250,000 Property Size (NRA) 65,000 Price Per SF $235 Year Built/Renovated 1999 Current Occupancy 100.0% Investment Returns Cap Rate - Yr 1 5.75% Operating Data Effective Gross Income $1,244,373 Operating Expenses $368,839 Net Operating Income - Yr 1 $875,534 Major Tenants (SF) Raley's Supermarkets 61,500 Starbucks Coffee 1,820 Kintaro Sushi 1,680 This location s site performance is well above average, with Raley s having a 3.5% rent to sales ratio Raley s has over 28% of the Sacramento market share and this is the largest grocery store in a 3-mile radius Excellent financing available with a 10-year term at 75% LTV in the low 4% interest rate range Raley s next rent bump is in 2019 increasing total rent by $49,815 Starbucks recently renewed their 5 year option early with zero concessions given, extending the lease to a total of 10 years, demonstrating how profitable and committed they are to this site location highlights Infill grocer location with roughly 15,000 people in the 1 mile radius (220,000 in a 5 mile radius) and projected growth of over 5% Incomes in the surrounding area above the national average ranging from $67k-$82k Excellent stoplight intersection location at the NW corner of Bradshaw Rd. & Old Placerville Rd. boasting over 68,000 average cars per day Offering Memorandum 5

tenant overview tenant summary - RALEY S food source Property Name Property Type Ownership Revenue No. of Locations Raley s Food Source Supermarkets Retail / Grocery Private $3.2 billion 121 stores: 72 Raley s, 20 Bel Air, 20 Nob Hill Foods and 9 Food Source stores No. of Employees ±12,000 Headquartered West Sacramento, California Year Founded 1935 Raley s Supermarkets is a privately held, family-owned supermarket chain that operates stores under the Raley s, Bel Air Markets, Nob Hill Foods and Food Source names in northern California and Nevada. Founded on February 16, 1935 by Thomas P. Raley in Placerville as Raley s Drive-In Market, Raley s employs around 12,000 workers. Headquartered in West Sacramento, California, Raley s is the dominant supermarket operator in the Sacramento metropolitan area. Raley s started Food Source in 1995. Raley s operates 128 stores, 40 of them in the Greater Sacramento area. According to Metro Market Studies, those stores control the city s largest market share of 28%. By comparison, other local market shares are Safeway at 16.7%, Costco at 11.9% and Save Mart Supermarkets at 9.2%. Website www.raleys.com Consumer Reports surveys rank Raley s among the top U.S. supermarket chains, in particular for customer service. tenant summary - starbucks Property Name Starbucks Property Type Net Lease Quick Service Restaurant Parent Company Trade Name Starbucks Corporation Ownership Public Revenue $19 B No. of Locations ±23,921 No. of Employees ±157,000 Headquartered Seattle, WA Year Founded 1985 Website www.starbucks.com tenant overview Starbucks Corporation operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in four segments: Americas; Europe, Middle East, and Africa; China/Asia Pacific; and Channel Development. Its stores offer coffee and tea beverages, packaged roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, juices, and bottled water. The company s stores also provide fresh food and snack offerings; and various food products, such as pastries, and breakfast sandwiches and lunch items, as well as serve ware, beverage making equipment, and accessories.

M AT HER AIRPO R T SUBJECT PROPERTY OLD PLACERVILLE ±16,000 BRADSHAW ROAD ±42,000

property description 8 Offering Memorandum

Raley s food source physical description Property Name Address Location Cross Street Raley s Food Source 3539-3547 Bradshaw Road Sacramento, CA Old Placerville Road Square Footage (GLA) ±65,000 Land Area ±283,000 SF (±6.5 Acres) APN(s) 068-0030-052 Year Built 1999 Zoning VCMU Number of Stories 1 Parking Spaces (Estimated) 315 Parking Ratio 4.85:1,000 bradshaw road Offering Memorandum 9

property description bird s eye map ORANG E VA L E C ARMICHAE L RANCHO CO RDO VA ±171,000 ADT S U BJE C T PRO P E R T Y OLD PLACERVILLE ±16,000 ADT BRADSHAW ROAD ±42,000 ADT 10 Offering Memorandum

regional map Raley s food source Offering Memorandum 11

financial overview rent roll Unit Tenant Lease Start Lease End SF % of GLA Contract Rental Rate Rent PSF Year Month Year Month Rent Increases Options Options ($/SF) Raley's Food Source 11/99 11/24 61,500 94.6% $767,520 $63,960 $12.48 $1.04 12/2019 $13.29 12/1/24 12/1/29 12/1/34 $14.15 $15.07 $16.05 3A Starbuck s Coffee 4/01 4/26 1,820 2.8% $72,936 $6,078 $40.07 $3.34 05/2021 $46.08 5/1/26 $52.99 3B Kintaro Sushi 9/14 9/21 1,680 2.6% $34,272 $2,856 $20.40 $1.70 10/2017 10/2018 10/2019 10/2020 $21.12 $22.20 $23.16 $24.00 10/1/21 See notes below Occupied Totals - In Place 65,000 100.0% $874,728 $72,894 $13.46 $1.12 Vacant Totals 0 0.0% 0 0 0.00 $0.00 Totals 65,000 100.0% $874,728 $72,894 $13.46 $1.12 Notes 1. Raley s Food Source has three 5-Year options remaining on their lease term. 2. Starbuck s Coffee has two 5-Year options remaining on their lease term. 3. Kintaro Sushi has one 5-Year option remaining on their lease term. Minimum rent during the option period is the greater of FMV or a 103% increase over previous rent continuing to escalate 3% annually thoughout the option period. SUMMARY TENANT PROFILE INCOME DISTRIBUTION Tenant Name In Place Rent % of Income Expiration Date Anchor/Junior Anchors Anchors - 88% Restaurants - 12% Raley's Supermarkets $767,520 87.74% Nov-24 Subtotal $767,520 87.74% Restaurants Kintaro Sushi $34,272 3.92% Sep-21 Starbucks's Coffee $72,936 8.34% Apr-26 Subtotal $107,208 12.26% Anchors - 96% Restaurants - 4% Total $874,728 100.00% Avg. Lease Term Remaining - 6.9 12 Offering Memorandum

Offering Memorandum 13 Raley s food source income and expenses Total $/SF Income Rental Income $875,535 $13.47 Expense Reimbursements $368,838 $5.67 Effective Gross Income $1,244,373 $19.14 Expenses Common Area Maintenance $195,000 $3.00 Real Estate Taxes $173,839 $2.67 Operating Expenses $368,839 $5.67 Net Operating Income $875,534 $13.47 Operating Expense Ratio 29.6% assumptions Analysis Period Cash Flow Projection Begin Date June 1, 2017 Holding Period for Net Present Value 10 Years Area Measures Net Rentable Area in SF 65,000 General Projection Assumptions General Expense Growth per Annum 2.00% Real Estate Tax Growth per Annum 2.00% Market Rent Growth per Annum 3.00% Exit Cost of Sale 1.00% lease expiration schedule Year Ending Sq. Ft. Annual % of Total Aggregate % of Total 1 May-18 0 0.00% 0.00% 2 May-19 0 0.00% 0.00% 3 May-20 0 0.00% 0.00% 4 May-21 0 0.00% 0.00% 5 May-22 1,680 2.58% 2.58% 6 May-23 0 0.00% 2.58% 7 May-24 0 0.00% 2.58% 8 May-25 61,500 94.62% 97.20% 9 May-26 1,820 2.80% 100.00% 10 May-27 0 0.00% 100.00% 11 May-28 0 0.00% 100.00% Total 65,000 100.00% 10-year rollover 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 2 3 4 5 6 7 8 9 10 11 ANNUAL % OF TOTAL 1. Each tenant has renewal options after the current lease term expires.

financial overview Cash flow Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 For the Years Ending May-2018 May-2019 May-2020 May-2021 May-2022 May-2023 May-2024 May-2025 May-2026 May-2027 Potential Gross Revenue Base Rental Revenue $875,535 $877,147 $903,735 $931,032 $942,327 $943,561 $944,832 $972,705 $1,001,664 $1,014,583 Scheduled Base Rental Revenue 875,535 877,147 903,735 931,032 942,327 943,561 944,832 972,705 1,001,664 1,014,583 Expense Reimbursement Revenue 1. CAM 195,000 200,850 206,876 213,081 219,474 226,059 232,841 239,826 247,020 254,431 Prop 13 A 173,838 177,316 180,862 184,479 188,169 191,933 195,771 199,686 203,680 207,754 Total Reimbursement Revenue 368,838 378,166 387,738 397,560 407,643 417,992 428,612 439,512 450,700 462,185 Total Potential Gross Revenue 1,244,373 1,255,313 1,291,473 1,328,592 1,349,970 1,361,553 1,373,444 1,412,217 1,452,364 1,476,768 Operating Expenses 1. CAM 195,000 200,850 206,876 213,082 219,474 226,058 232,840 239,825 247,020 254,431 Prop 13 A 173,839 177,316 180,862 184,479 188,169 191,932 195,771 199,686 203,680 207,754 Total Operating Expenses 368,839 378,166 387,738 397,561 407,643 417,990 428,611 439,511 450,700 462,185 Net Operating Income 875,534 877,147 903,735 931,031 942,327 943,563 944,833 972,706 1,001,664 1,014,583 Leasing & Capital Costs Capital Reserves 6,500 6,695 6,896 7,103 7,316 7,535 7,761 7,994 8,234 8,481 Total Leasing & Capital Costs 6,500 6,695 6,896 7,103 7,316 7,535 7,761 7,994 8,234 8,481 Cash Flow Before Debt Service 869,034 870,452 896,839 923,928 935,011 936,028 937,072 964,712 993,430 1,006,102 & Taxes =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== 1. CAM amounts are estimates. Please note all tenants reimburse 100% of operating expenses. 14 Offering Memorandum

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16 Offering Memorandum city overview sacramento, california As the capital of the world s 6th largest economy, Sacramento is undergoing a transition, with technological and cultural developments breathing new life into the city. Sacramento is seeing a growth in population, especially young professionals who are drawn to the reasonable cost of living, abundant sunshine and ethnic diversity. Sacramento beckons many visitors as well, due to its strategic location at the heart of the Central Valley, the metro area is at the forefront of the farm-to-fork movement. Resident have access to an abundance of fresh, locally sourced foods from nearby farms, wineries and breweries. job market Sacramento has experienced economic growth in the last ten years. Unemployment has fallen below 6 percent and job growth is very evident in industries like technology, construction and healthcare. Healthcare is a major industries and Sutter Memorial Hospital and UC Davis Medical center employ a large number of residents. The government continues to be the region s largest employer and continues to remain stable. Metro Population: 2,221,525 Average Salary: $53,340 Sacramento s economy has been fueled by recent job growth in leisure and hospitality, which saw a 12 percent increase in 2016 compared to 2015. This growth in tourism is largely due to Sacramento s ability to host large events and conventions. Recently these large events have been professional sporting events, like the yearly cycling competition, the Amgen Tour of California and the California International Marathon.

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18 Offering Memorandum city overview demographics POPULATION 1 Mile 3 Mile 5 Mile top employers Employer Name # of Employees 2022 Projection 14,696 89,690 217,755 2017 Estimate 13,960 86,108 209,753 Growth 2017-2022 5.27% 4.16% 3.81% HOUSEHOLDS 1 Mile 3 Mile 5 Mile 2022 Projection 5,100 34,366 88,367 2017 Estimate 4,859 32,981 85,010 Growth 2017-2022 4.97% 4.20% 3.95% INCOME 1 Mile 3 Mile 5 Mile 2017 Est. Average Household Income $67,627 $82,567 $76,840 State of California 69,763 Sacramento County 11,450 UC Davis Health System 7,725 Dignity Health/Catholic Healthcare West 7,069 Intel 6,633 Kaiser Permanente 6,360 Sutter Health 5,765 Elk Grove Unified School District 5,021 Sacramento City Unified School District 5,000 San Juan Unified School District 4,700

Offering Memorandum 19 Raley s food source RECENT DEVELOPMENTS Downtown Sacramento is constantly evolving and the development projects are transforming downtown s landscape. Over the past decade, more than $1 billion in public and private investment were made in Downtown. Cal State University-Sacramento California State University-Sacramento is a public institution that was founded in 1947. Cal State University Sacramento has a total student population of 30,510 and 2,800 total staff. The university offer 151 different Bachelor s degrees, 69 Master s degrees, 28 types of teaching credentials, and 2 Doctoral degrees. The university has a high magnitude economic impact on the Sacramento Valley region and the State of California is enormous. Annual spending related to Sacramento State is $607 million and generates a total impact of $816 million on the regional economy, and more than $1 billion on the statewide economy. This impact sustains nearly 9,000 jobs in the region and statewide economy. 700 Block of K Street This block, near the arena, is in the middle of a dramatic transformation. Developers are currently partnering to build an urban hive of shops and restaurants, topped with 137 apartments. This will be a trailblazer for Sacramento s aspirations of turning the core downtown into a true live-work community. The Metropolitan The Downtown Railyard A 224-acre railyard, a massive former industrial site has more potential to redefine downtown than any other site. Ultimately the plan is for 20,000 people to live there, which are more than Land Park and Curtis Park together. Also included in the Railyard project will be a 20,000 seat soccer stadium and a Kaiser Permanente Medical Campus with a 14-story hospital. A high-rise-project full of condo/hotel towers that will be 41 stories, with 190 high-end hotel rooms, 190 condos and retail on the ground floor.

confidentiality agreement This Offering Memorandum contains select information pertaining to the business and affairs of Raley s Food Source located at 3557 Bradshaw Rd, Sacramento, CA 95827 ( Property ). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence. By acknowledging your receipt of this Offering Memorandum for the Property, you agree: 1. The Offering Memorandum and its contents are confidential; 2. You will hold it and treat it in the strictest of confidence; and 3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller. Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered. If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum. A prospective purchaser s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property. This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum. exclusively listed by : JORDAN UTTAL VP & Director Direct +1 310 919 5707 Mobile +1 818 231 4670 jordan.uttal@matthews.com Lic. #01512755 20 Offering Memorandum