OFFERING MEMORANDUM THE RIVER CREST BUILDING QUALITY MULTI-TENANT INVESTMENT

OFFERING MEMORANDUM THE RIVER CREST BUILDING QUALITY MULTI-TENANT INVESTMENT

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. 2016 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. Macintosh HD:Users:clujan2:Box Sync:Southern California:GLAOC Marketing:Property Marketing:Ontario:Riverside:6296 Rivercrest:OM:6296 Rivercrest_OM_v07JM.indd THE RIVER CREST BUILDING 2

TABLE OF CONTENTS 04 EXECUTIVE SUMMARY 08 PROPERTY DESCRIPTION 18 AREA/MARKET OVERVIEW 30 FINANCIAL SUMMARY 32 SALES COMPARABLES 33 LEASE COMPARABLES THE RIVER CREST BUILDING 3

EXECUTIVE SUMMARY 4

THE OFFERING CBRE, as exclusive advisor, is pleased to present the opportunity to acquire fee simple interest in 6296 RiverCrest Drive (the Property ) in Riverside, California with free surface parking. It is 80% occupied by government tenants and provides tenants with an excellent professional work environment that services the Moreno Valley area as well as Riverside. The Building is strategically located in the Canyon Spring area and is within minutes from the 60/I-215 interchange and provides tenants good access to Los Angeles, Orange County, San Diego and the Desert Communities. In addition, tenants are able to take advantage of the new Metrolink station being constructed close by the project, plus the amenity rich retail center on Day Street. The Property is ideal for tenants seeking a strong, local workforce, fast freeway access and an excellent business environment. Property: Building Size: Number Of Floors: Parking: 6296 River Crest Drive Riverside, CA 32,344 Rentable Square Feet One Occupancy: 80% Offering Price: $5,250,000 Projected 2016 NOI: $297,748 Free abundant surface spaces THE RIVER CREST BUILDING 5

INVESTMENT HIGHLIGHTS Multi Tenant Single-Story Office Building: A financially a strong and stable tenant mix including the State of California and the County of Riverside. The property offers an investor a safe and stable cash flow in an approximately 80% occupied building. The building is in close proximity to the Moreno Valley Mall, March Air Force Base and the University of California Riverside. Desirable Office Submarket: The Canyon Springs submarket in Riverside has one of the lowest vacancy rates within the Riverside area and is strategically located within a large labor pool, and has convenient access to the entire regional freeway network, retail and entertainment amenities. The surrounding highly skilled labor pool will continue to fuel tenant demand for office spaces. THE RIVER CREST BUILDING 6

RIVER CREST DRIVE AVAILABLE ±6,200 RSF LEASED THE RIVER CREST BUILDING 7

PROPERTY DESCRIPTION 8

Property: 6296 River Crest Drive, approximately 31,464 rentable sq. ft. building Riverside, CA 92506 Parcel Number: APN #291 480 013 2 Site Area: Zoning: Building Shape: Year Built: 1988 Developer: Architect: Structure: Windows: Roof: Exterior Signage: ±2.58 acres MP: Manufacturing/Business Park U shape design, concrete tilt-up construction. Flex design for office & light industrial Betty L. Hutton Development Company Richard Pavlovski The structure is reinforced concrete tilt-up designed for office use. The windows in the building are clear and fixed mounted in aluminum frames. The roll up doors have been converted to store-front windows. The roof consists of wood joist frame with rigid insulation and flat roof. Exterior signage is prominent facing River Crest Drive at the top of the building for each tenant. Interior Finishes: HVAC System: Electrical Service: Telephone/Data Services: Partitions: Interior walls within the office suites are constructed with steel and/or wood studs and drywall. Ceiling Finishes: Ceilings in the office areas generally use a 2 x 4 or 2 x 2 acoustical tile grid system. Multiple Package Units that utilize rooftop mounts. City of Riverside Utility Department is the serving utility company providing power to the building. Telephone/electrical rooms are ready for distribution. Traditional telephone service is provided by AT&T and Charter. THE RIVER CREST BUILDING 9

CONCEPTUAL PLAN AVAILABLE SPACE THE RIVER CREST BUILDING 10

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AREA MARKET OVERVIEW AREA/MARKET OVERVIEW 13

Riverside Skyline THE INLAND EMPIRE AREA OVERVIEW The Inland Empire lies east of Orange, Los Angeles and San Diego Counties and includes San Bernardino and Riverside, the two largest counties in the nation. Key sub-markets within the Inland Empire include Ontario, Rancho Cucamonga, Chino, Fontana, Mira Loma (Eastvale & Jurupa Valley), Colton, Corona, Moreno Valley, Perris, Redlands/ Loma Linda, Rialto, Riverside and San Bernardino. Over the last decade, the Inland Empire has been regarded as one of the most robust markets in the United States in several categories including population growth, job creation, construction and industrial space absorption. This dynamic market is a real estate leader. Large-scale population growth began in the Inland Empire in the 1970s, when the area was developed as a series of residential bedroom communities serving employment centers in Los Angeles and Orange Counties. Residents were originally drawn to the area by affordable housing and pro-growth local governments. Frustrated by the many hours spent on the congested commute to work, many Inland Empire residents became willing to give up part of their income in exchange for a local job to increase their quality of life. This contributed to a huge incentive for companies to leave Orange County and relocate to the Inland Empire. As a result, a new talent pool began to emerge and set the stage for a different business atmosphere, where high-end companies could thrive. Over the past two decades, economic activity in the Inland Empire grew as businesses flocked to the area to take advantage of its labor force, economic incentives, cost advantages, central geographic location and logistic advantages. THE RIVER CREST BUILDING 14

One of the other driving factors influencing the overall market in the Inland Empire is the home values as compared to other areas in Los Angeles and Orange County. Homes in the Inland Empire are affordable with a median home price of $315,400 in San Bernardino County as of December, 2013. The area is much less expensive than most other areas of Southern California, such as Los Angeles ($440,000), San Diego ($458,000), and Orange County ($639,000). New residents and companies in the Inland Empire have ready access to the area s highly regarded 16 colleges and universities. These institutions include California Polytechnic Pomona, California State University at San Bernardino, the prestigious, multi-campus Claremont Colleges, the University of Redlands, Harvey Mudd College, Keck Graduate School of Applied Life Sciences, La Sierra University, Loma Linda University Medical School and the University of California at Riverside. The area s development has also contributed to some of the more successful retail and recreational opportunities. Ontario International Airport Downtown Riverside Part of the region s success has always been attributed to the well integrated freeway system. The primary freeway serving the region is the San Bernardino (I-10) Freeway, a transcontinental highway connecting Los Angeles to the rest of the nation. Additional freeways include, the Devore (I-15) Freeway, connecting San Diego and Nevada, the Foothill (I-210) Freeway, Riverside (I-215) Freeway, Pomona (SR-60) Freeway, the Corona (SR-71) Expressway and the 241 Toll Road which connects to the SR-91 Freeway. This freeway system will continue to draw tenants to the Inland Empire as the economy recovers and users seek to expand and/or consolidate. Another catalyst for growth in the Inland Empire is the Ontario International Airport, which is owned and operated by the Los Angeles International Airport. Ranked among the 60 busiest airports in the world, the airport is currently served by 12 passenger airlines and 13 major airfreight carriers with 220 daily flights. Ontario International Airport is the center of a developing freight movement system that includes the airport, two railroads, four major freeways, and a network of freight forwarders. These freight carriers include Ameriflight, Federal Express, Kalitta Air, Miami Air International, Inc., UPS, Sierra Pacific Airlines, Arrow Air, Inc., Empire Airlines, IFL Group, and USA Jet. THE RIVER CREST BUILDING 15

Riverside Convention Center RIVERSIDE OVERVIEW The City of Riverside, located within one hour of the City of Los Angeles and 30 minutes from Orange County, began as the center for the naval orange growing industry in the United States. Today the city has a large and diverse economy, in addition to affordable housing; both qualities have made it attractive to employers and employees and have helped Riverside become the 11th largest city in California. In fact, Riverside leads all other Southern California cities that comprise the Inland Empire in total jobs and larger businesses as well as population. Although Riverside s beginnings are steeped in agriculture, today the economy relies heavily on government, education, manufacturing and retail; and affordable land and housing are attracting residents and skilled laborers to the city. In recent years, Riverside has placed a major emphasis on expanding its technology base by developing high-tech business parks fostering public/private research initiatives and courting the information technology worker. The city was just rewarded for these efforts by being named the most intelligent community by Intelligent Community Forum. Riverside has also taken strides in developing its industrial and manufacturing sectors. In the last 10 years, Riverside has attracted more than 125 industrial employers according to the city s development department. Riverside s light manufacturing base now includes such sectors as electrical instruments; plastics, wood, glass and metal, fabrication; food processing; recreational vehicles and imaging equipment. Riverside is characterized by a unique blend of historic charm and a modern city features. The economy of Riverside is diverse and healthy, with the Inland Empire s largest number of businesses and total jobs. Rather than be dominated by a single industry, Riverside has assumed a Wide range of light industries, manufacturers, distributors, diverse retailers, offices, professional services, and other employers. THE RIVER CREST BUILDING 16

Mission Inn Riverside s vibrant downtown, anchored by the historic Mission Inn, has earned a reputation as the Downtown of the Inland Empire. It is home to several city, county, state and federal government offices, Riverside County Administrative Center and a legal complex consisting of county, state and federal courts. The city is an important financial and professional center, with the single largest amount of legal related uses in the Inland Empire along with several major accounting firms, stock brokerage firms, architectural firms, engineering firms, software firms, and banking institutions in the Inland Empire. Downtown Riverside is a truly unique area not only within Riverside, but the entire Inland Empire. Along with being the business center for the Inland Empire with its abundant governmental and private sector offices, Downtown Riverside is also the cultural and artistic epicenter for the region, with numerous venues to showcase the arts from around the world, along with variety of institutions to educate and encourage the development of homegrown artisans. THE RIVER CREST BUILDING 17

R iv ersi de Com m u n i t y C o lle g e D is tr ic t INLAND EMPIRE OFFICE MARKET OVERVIEW The Inland Empire Office Market encompasses approximately 24,698,000 square feet of office product in 688 total buildings according to CBRE year end 2015 report. Increased demand for Inland Empire Office space has resulted in declining vacancy rates and increasing rents. The Inland Empire provides a growing educated population, a sophisticated transportation infrastructure and five major research universities. All of these positive components contribute to the Inland Empire becoming the driving force for many migrating companies and an opportune location to work, live, and play. In 2015, the Inland Empire market continued to experience positive overall absorption for office product. The region continued 5 consecutive years of positive absorption with over 292,604 square feet absorbed during the year. The unemployment rate for the Inland Empire fell to 6.4% in 2015. The Inland Empire has experienced an improvement in the labor market over the past year. The unemployment rate has remained under 10% for the year yet unemployment in the Inland Empire remains similar to California s rate and just above the nation s average of 5.8%. Year-over-year, total non-farm employment increased. Professional and business services and government experienced the greatest year-over-year gain. In addition, educational and health services, construction and other services experienced modest job growth. Over the same time span trade, transportation and utilities increased as well. The Inland Empire has continued its incremental climb to an economic recovery. Across the board, average asking lease rates increased in 2015 as did effective lease rates as landlords are offering fewer market concessions in the improving office economy. The average asking lease rate ended 2015 at $1.83 per sq. ft. According to market research, rental rates are expected to continue to tick up in 2016, riding the positive momentum experienced in 2015. T H E R I V E R C R E S T B U I L D I N G 18

The overall vacancy rate in the Inland Empire declined in 2015 closing the year at 14.7%. This represents the fifth consecutive year that the overall office vacancy level declined in the Inland Empire region. The vacancy rate is divided between 2 submarkets, with the Ontario Market recording a 2015 year end vacancy level of 14.9% and the Riverside market at 15.4%. The Class A vacancy rate is 14.9%. Both A and B product segments continue to perform well as both local, regional and national tenants are experiencing positive momentum in the improving local economy. INLAND EMPIRE OFFICE NET ABSORPTION 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 - (200,000) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (400,000) (600,000) Net Absorption Average Historical Net Absorption (15-Yr. Avg) THE RIVER CREST BUILDING 19

FINANCIAL SUMMARY 20

IN-PLACE AND PROJECTED NOI SUMMARY In-Place NOI Pro Forma NOI Feb-16, Annualized $ PSF Feb-16 to Jan-17 $ PSF Size of Improvements 32,344 SF 32,344 SF REVENUES Scheduled Base Rent Gross Potential Rent $494,244 $15.28 $493,533 $15.26 Absorption & Turnover Vacancy (96,720) (2.99) (32,240) (1.00) Base Rent Abatements 0 0.00 (38,750) (1.20) Total Scheduled Base Rent 397,524 12.29 422,543 13.06 Expense Reimbursements 0 0.00 8 0.00 TOTAL GROSS REVENUE 397,524 [1] 12.29 422,551 13.06 General Vacancy Loss 0 0.00 0 0.00 EFFECTIVE GROSS REVENUE 397,524 12.29 422,551 13.06 OPERATING EXPENSES Janitorial (17,436) (0.54) (17,477) (0.54) Landscape (5,940) (0.18) (5,960) (0.18) Repairs & Maintenance (10,452) (0.32) (10,479) (0.32) Security (2,256) (0.07) (2,263) (0.07) Utilities (9,504) (0.29) (9,530) (0.29) Management Fee (11,928) (0.37) (12,677) (0.39) Insurance (6,468) (0.20) (6,487) (0.20) Real Estate Taxes (59,930) (1.91) (59,930) (1.91) TOTAL OPERATING EXPENSES (123,914) [2] (3.89) (124,803) (3.92) NET OPERATING INCOME $273,610 $8.40 $297,748 $9.15 Capitalization Rate 5.21% 5.67% PURCHASE PRICE AS OF FEBRUARY 1, 2016 $5,250,000 $162.32 $5,250,000 $162.32 Notes: [1] In-Place Net Operating Income is calculated using contractual rents and expense reimbursements as of February 2016, Annualized (with no General Vacancy Loss). In-Place NOI does not include vacant lease-up revenue, downtime due to near-term expirations, or future rent increases for existing tenants. [2] Real Estate Taxes are reassessed based on the sales price. THE RIVER CREST BUILDING 21

RENT ROLL Market Square % of Lease Term Rental Rates Recovery Rent Abatements Tenant Leasing Assumption / Suite Tenant Name Feet Property Begin End Begin Monthly PSF Annually PSF Type Month # % Abated Improvements Commissions Market Rent A State of CA DMV 8,420 26.03% Apr-2004 Jul-2020 Current $9,850 $1.17 $118,201 $14.04 None - - - - Market Aug-2016 $10,146 $1.21 $121,753 $14.46 Aug-2018 $10,448 $1.24 $125,374 $14.89 Notes: Tenant has the right to terminate any time effective on or after 7/31/16 with thirty (30) days prior written notice. K Riverside County Offic 17,724 54.80% Feb-2009 Jan-2019 Current $23,277 $1.31 $279,319 $15.76 None - - - - Market Feb-2017 $23,854 $1.35 $286,243 $16.15 Feb-2018 $24,459 $1.38 $293,509 $16.56 Notes: Base rent reflects an increase effective 2/16. Tenant is assumed to be gross for the durarion of the current term. L VACANT (Suite L) 6,200 19.17% Jun-2016 May-2021 Jun-2016 $7,750 $1.25 $93,000 $15.00 Base Year 1-5 100% - - Market Jun-2017 $7,983 $1.29 $95,790 $15.45 100% $1.30 FSG Jun-2018 $8,220 $1.33 $98,642 $15.91 Jun-2019 $8,468 $1.37 $101,618 $16.39 Jun-2020 $8,721 $1.41 $104,656 $16.88 $1.30 FSG $1.30 FSG TOTALS / AVERAGES 32,344 $33,127 $1.27 $397,521 $15.21 OCCUPIED SqFt 26,144 80.8% VACANT SqFt 6,200 19.2% TOTAL SqFt 32,344 100.0% THE RIVER CREST BUILDING 22

FOR MORE INFORMATION, PLEASE CONTACT: Vindar Batoosingh Senior Vice President Lic. 00674500 +1 909 418 2134 vindar.b@cbre.com CBRE, Inc 4141 Inland Empire Blvd. Suite 100 Ontario, CA 91764