OFFERING MEMORANDUM 20236 US Highway 18 North, Apple Valley, CA 92307 Exclusively Offered By: NET LEASE INVESTMENT SERVICES Kevin Held kevin.held@cushwake.com +1 858 546 5428 CA Lic. 01240358 Chuck Klein chuck.klein@cushwake.com +1 858 546 5473 CA Lic. 01522766 Robert Kuzman robert.kuzman@cushwake.com +1 858 546 5439 CA Lic. 01312899
Disclaimer Cushman & Wakefield has been retained as exclusive advisor to the Seller for the sale of the Chase (the Property ), approximately 4,020 square feet on 0.40 acres located at 20236 US Highway 18 North, Apple Valley, California. This Offering Memorandum has been prepared by Cushman & Wakefield for use by a limited number of parties and does not purport to provide a necessarily complete summary of the Property or any of the documents related thereto, nor does it purport to be all-inclusive or to contain all of the information which prospective investors may need or desire. All projections have been developed by Cushman & Wakefield, the Owner, and designated sources and are based upon assumptions relating to the general economy, competition, and other factors beyond the control of the Owner and Cushman & Wakefield, therefore, are subject to variation. No representation is made by Cushman & Wakefield or Owner as to the accuracy or completeness of the information contained herein, and nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of the Property. Although the information contained herein is believed to be correct, Owner and its employees disclaim any responsibility for inaccuracies and expect prospective purchasers to exercise independent due diligence in verifying all such information. Further, Cushman & Wakefield, Owner, and its employees disclaim any and all liability for representations and warranties, expressed and implied, contained in, and omitted from, this Offering Memorandum or any other written or oral communication transmitted or made available to the recipient. This Offering Memorandum does not constitute a representation that there has been no change in the business or affairs of the Property or the Owner since the date of preparation of the package. Analysis and verification of the information contained in this package is solely the responsibility of the prospective purchaser. Additional information and an opportunity to inspect the Property will be made available upon written request to interested and qualified prospective investors. Owner and Cushman & Wakefield each expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers regarding the Property and/or terminate discussions with any entity at any time with or without notice. Owner shall have no legal commitment or obligation to any entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase of the Property has been fully executed, delivered, and approved by Owner and its legal counsel, and any conditions to Owner s obligations thereunder have been satisfied or waived. Cushman & Wakefield is not authorized to make any representations or agreements on behalf of Owner. This Offering Memorandum and the contents, except such information which is a matter of public record or is provided in sources available to the public (such contents as so limited herein are called the Contents ), are of a confidential nature. By accepting the package, you agree (i) to hold and treat it in the strictest confidence, (ii) not to photocopy or duplicate it, (iii) not to disclose the package or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Owner or Cushman & Wakefield, (iv) not use the package or any of the contents in any fashion or manner detrimental to the interest of Owner or Cushman & Wakefield, and (v) to return it to Cushman & Wakefield immediately upon request of Cushman & Wakefield or Owner. The information contained herein has been obtained from the owner of the property or from other sources we deem reliable. We have no reason to doubt its accuracy, but we do not guarantee it. If you have no further interest in the Property, please return this Investment Offering Memorandum forthwith. 4350 La Jolla Village Drive, Suite 500 San Diego, CA 92122 T 858.546.5400 F 858.630.6320 www.cushmanwakefield.com
Executive Summary OFFERING SUMMARY Tenant: Location: APN: 3112-171-07 JPMorgan Chase Bank, N.A. (Chase Bank) 20236 US Highway 18 North Apple Valley, CA 92307 OFFERING TERMS Net Operating Income: $117,060 Price: $2,341,000 Cap: 5.00% Building Size: Land Size: ~4,020 square feet ~0.40 acre Year Built: 2005 Rent Commencement: September 1, 2005 Lease Expiration: August 31, 2020 Lease Term: Options: Rent Increases: Lease Type: Fifteen (15) years (~5 years remaining) Three (3) five (5) year options 10% each option NNN Lease Rent Schedule: Term Year Annual Rent Date of Increase % Increase Unleveraged Return Option 2-6 $117,060 9/1/15 5.00% Option 7-11 $128,766 9/1/20 10.00% 5.50% Option 12-16 $141,643 9/1/25 10.00% 6.05% Option 17-21 $155,807 9/1/30 10.00% 6.66% Chase - Apple Valley / 1
Executive Summary INVESTMENT HIGHLIGHTS Prime single tenant, NNN leased property in Southern California Excellent visibility from Highway 18, with average daily traffic over 25,000 cars per day Adjacent to Walgreens, CVS, Denny s and Jack in the Box Across the street from Wal-Mart & contiguous to a Super Target Healthy branch with deposits over $41 million Tenant just exercised the first option period early, showing commitment to site and market JP Morgan Chase S&P A+ stable rating 10% rental increases each option period Chase - Apple Valley / 2
Property Description AERIAL Chase - Apple Valley / 3
Property Description LOCATION MAP Chase - Apple Valley / 4
Tenant Information Company Profile: Company: JPMorgan Chase & Co. S&P Credit Rating: A+ Stable 2014 Revenue ($ Bil): $94.20 2014 Net Income ($ Bil): $21.76 # of locations (2014): 5,602 # of employees (2014): 260,000 JPMorgan Chase Bank, N.A., doing business as Chase, is a national bank that constitutes the consumer and commercial banking subsidiary of the multinational banking corporation JPMorgan Chase. The bank was known as Chase Manhattan Bank until it merged with J.P. Morgan & Co. in 2000. Chase Manhattan Bank was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955. The bank is headquartered in Chicago, since its merger with Bank One Corporation in 2004. In 2008, the bank acquired the deposits and most assets of Washington Mutual. Chase offers more than 5,600 branches and 18,000 ATMs nationwide. JPMorgan Chase has 260,000 employees (as of 2014) and operates in more than 60 countries. JPMorgan Chase currently has assets of approximately $2.4 trillion. JPMorgan Chase, through its Chase subsidiary, is one of the Big Four banks of the United States. Website: www.chase.com Chase - Apple Valley / 5
Area Description AREA OVERVIEW Apple Valley The Town of Apple Valley is located in the heart of the Victor Valley in the County of San Bernardino, at an elevation of 3,000 feet. Known as the High Desert, Apple Valley is strategically located 95 miles northeast of the Los Angeles metropolitan area, 140 miles north of San Diego, and 185 miles south of Las Vegas. The Town has 78 square miles in its incorporated boundaries, and a sphere of influence encompassing 200 square miles. It was incorporated on November 14, 1988. The town is east of and adjoining to the neighboring cities of Victorville and Hesperia, 37 miles south of Barstow and 46 miles north of San Bernardino through the Cajon Pass. The population was 69,135 at the 2010 census. Economy economic development program. Current plans include recruiting businesses to the new industrial park surrounding the Apple Valley Airport, and to the commercial locations in Town having the highest potential for development. Apple Valley offers both established and new businesses an unequalled climate for success. Education Apple Valley is home to 2 senior high schools, 3 K-8 academies, and 8 elementary schools. Apple Valley is also home to a nationally recognized laboratory school that gives students a hands-on science and math education - the Lewis Center for Academic Excellence. They were recently listed in the top 3% of schools nationwide by the U.S. News and World Report. Apple Valley also has three private schools that offer distinguished award-winning private school curricula. The local economy is driven by 4.2 million square feet of retail and office space, 2.6 million square feet of industrial inventory, and touts low vacancy rates. The town has also emerged as a leader in advanced health care systems, spanning the gamut from pediatric services to radiology, with St. Mary Medical Center as the hub of state-of-the-art medical services. Apple Valley is ranked No. 4 in California for the strength of its retail market according to the 2010 California Retail Survey. Apple Valley remains attractive for retail development due to its positive economic growth, quality demographics, aggressive marketing efforts, and a Town Council which targets retail development as one of its top priorities. Since 2005, more than three million square feet of new commercial has opened, including Cinemark Theater, Home Depot, Super Target, Winco Foods, UltraStar Cinema, Best Buy, Red Robin, Ross Dress for Less, and many more. Apple Valley is laying a foundation for future prosperity through its overall Chase - Apple Valley / 6
Area Description DEMOGRAPHICS 2014 1 mi 3 mi 5 mi Summary Population 5,265 40,393 87,926 Households 1,717 13,354 29,375 Families 1,293 10,362 22,169 Average Household Size 3.06 3.01 2.97 Owner Occupied Housing Units 658 8,850 18,636 Renter Occupied Housing Units 1,059 4,504 10,740 Median Age 30.0 36.5 35.5 Trends: 2014-2019 Annual Rate Population 1.14% 0.78% 0.74% Households 1.05% 0.69% 0.66% Families 1.02% 0.68% 0.64% Owner Occupied Housing 0.57% 0.44% 0.48% Median Household Income 2.31% 2.56% 2.32% Households by Income <$15,000 419 1,814 4,553 $15,000 - $24,999 270 1,386 3,209 $25,000 - $34,999 267 1,409 3,015 $35,000 - $49,999 204 1,931 5,018 $50,000 - $74,999 229 2,171 5,157 $75,000 - $99,999 133 1,661 3,244 $100,000 - $149,999 146 2,078 3,602 $150,000 - $199,999 36 601 1,043 $200,000+ 13 303 535 Median Household Income $30,584 $51,085 $45,748 Average Household Income $46,100 $67,575 $60,903 Per Capita Income $15,172 $22,551 $20,490 1 mi 3 mi 5 mi Population by Age Age 0-4 464 2,671 6,343 Age 5-9 441 2,751 6,299 Age 10-14 445 3,052 6,558 Age 15-19 448 3,191 6,866 Age 20-24 451 3,006 6,503 Age 25-34 746 4,927 10,940 Age 35-44 579 4,242 9,341 Age 45-54 615 5,312 11,101 Age 55-64 529 5,075 10,522 Age 65-74 316 3,581 7,461 Age 75-84 165 1,894 4,244 Age 85+ 66 691 1,748 Race and Ethnicity White Alone 2,811 26,760 56,340 Black Alone 951 4,036 8,774 American Indian Alone 79 472 1,051 Asian Alone 121 1,267 2,763 Pacific Islander Alone 20 188 371 Some Other Race Alone 890 5,296 13,313 Two or More Races 393 2,374 5,315 Hispanic Origin (Any Race) 1,888 12,641 30,779 Data Note: Income is expressed in current dollars Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2014 and 2019. Chase - Apple Valley / 7