OFFERING MEMORANDUM GRANADA HILLS RETAIL STRIP - LEASEHOLD INTEREST

CONFIDENTIALITY AND DISCLAIMER The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. NON-ENDORSEMENT NOTICE Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

TABLE OF CONTENTS Section 1 PRICING AND FINANCIAL ANALYSIS Section 2 PROPERTY DESCRIPTION Section 3 RECENT SALES Section 4 RENT COMPARABLES Section 5 DEMOGRAPHIC ANALYSIS

PRICING AND FINANCIAL ANALYSIS FINANCIAL OVERVIEW Location 10670-10690 Balboa Boulevard Granada Hills, CA 91344 Price $1,425,000 Down Payment 50.0% / $712,500 Gross Leasable Area (GLA) 11,050 Price/SF $128.96 CAP Rate - Current 11.45% Lot Size 21,963 SF Year Built 1986 Financing FIRST TRUST DEED Loan Amount $712,500 Loan Type Proposed New Interest Rate 4.75% Amortization 15 Years Annualized Operating Data Income Current Base Rent Occupied Space $370,123 Gross Potential Rent $370,123 Expense Reimbursements $60,868 Gross Potential Income $430,991 Vacancy/Collection Allowance 3% / $11,104 Effective Gross Income $419,887 Total Expenses $256,669 Net Operating Income $163,218 Debt Service $66,505 Debt Coverage Ratio 2.45 Net Cash Flow After Debt Service 13.57% / $96,714 Principal Reduction $33,381 Total Return 18.26% / $130,095 Expenses Property Tax $55,983 Insurance $7,341 Ground Lease $150,000 Loan information is time sensitive and subject to change. Contact your local Marcus & Millichap Capital Corporation representative. * Ground Lessee Responsible for Real Estate Taxes which will remain unchanged as Land is not being sold/reassessed *Ground Lease Increases: 8/2020-7/2025: $165,000/Year 8/2025-7/2030: $200,000/Year 8/2030-1/2033: $220,000/Year CAM Utilities $7,158 Repairs & Maintenance $2,275 Security $1,770 Gardner $2,589 Garbage Disposal $5,796 TOTAL CAM $19,588 Management Fee (% of EGI) 5% / $20,994 Reserves / Replacements $2,763 TOTAL EXPENSES * $256,669 EXPENSES/SF $23.23 NOTE: Both Ground Lessee and Lessor have First Right of Refusal with 15 Days to Respond to Notification. inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 X0121647 Marcus & Millichap. All rights reserved.

PRICING AND FINANCIAL ANALYSIS TENANT SUMMARY Suite Tenant GLA % of GLA Lease Commence Lease Expire Monthly Rent Rent/ SF Changes On Changes To Expense Reimbs. Other: Options/ % Rent 10670 Metro PCS 1,100 9.95% 12/1/2014 11/30/2019 $2,094.00 $1.90 12/1/2017 $2,204.25 $400.00 5 x 5 Yr FMV NNN 10670A Global Satellite 1,300 11.76% 1/1/2016 12/31/2017 $3,508.00 $2.70 $455.00 NNN 10670B Foot Massage 1,375 12.44% 9/1/2011 8/31/2018 $3,307.50 $2.41 9/1/2017 $3,472.88 $500.00 1 x 5 Yr FMV NNN 10676 Thai Restaurant 1,375 12.44% 6/1/2009 5/31/2020 $3,849.93 $2.80 6/1/2017 $4,042.43 $687.50 NNN 10678 2 for 1 Pizza 800 7.24% 3/1/2010 4/30/2021 $2,320.00 $2.90 5/1/2017 $2,552.00 $336.00 NNN 10680 Subway 1,000 9.05% 3/27/2011 2/28/2021 $2,514.99 $2.51 3/1/2017 $2,590.44 $600.00 1 x 5 Yr FMV NNN 10682 Gamsa Pain Clinic 1,600 14.48% 1/15/2015 1/14/2018 $3,307.50 $2.07 $560.00 1 x 3 Yr FMV NNN 10690 7-Eleven 2,500 22.62% 5/1/2011 4/30/2021 $8,900.00 $3.56 $1,533.87 NNN Billboard 0 0.00% 4/1/2014 3/31/2017 $1,041.67 Lease Type TOTAL VACANT TOTAL OCCUPIED 11,050 100.00% $30,843.59 $14,862.00 $5,072.37 TOTAL 11,050 100.00% $30,843.59 $14,862.00 $5,072.37 Comments Rent Roll reflects January 2017. Metro PCS has one free month of rent per year (September) - not reflected on Rent Roll. Billboard renews 12 months at a time, no options. inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 X0121647 Marcus & Millichap. All rights reserved.

PRICING AND FINANCIAL ANALYSIS LEASE EXPIRATION SUMMARY For The Year Beginning Year 1 Jan 2017 Year 2 Jan 2018 Year 3 Jan 2019 Year 4 Jan 2020 Year 5 Jan 2021 Year 6 Jan 2022 Year 7 Jan 2023 Year 8 Jan 2024 Year 9 Jan 2025 Year 10 Jan 2026 Tenant(s) Name Global Satellite Billboard Foot Massage Gamsa Pain Clinic Metro PCS Thai Restaurant 2 for 1 Pizza Subway 7-Eleven Total Number of Tenants 2 2 1 1 3 Total Square Feet 1,300 2,975 1,100 1,375 4,300 Total Percentage 11.8% 26.9% 10.0% 12.4% 38.9% Cumulative Percentage 11.8% 38.7% 48.6% 61.1% 100.0% 100% 3 90% 80% Total Project Square Footage 70% 60% 50% 40% 30% 2 1 Number of Tenants 20% 10% 0% Jan 2017 12% Jan 2018 27% Jan 2019 10% Jan 2020 12% Jan 2021 39% Jan 2022 0% Jan 2023 0% Jan 2024 0% Jan 2025 0% Jan 2026 0% 0 Percentage of SF Expiring Number of Tenants Expiring Cumulative % of SF Expiring Any projections, opinions, assumptions or estimates used here within are for example purposes only and do not represent the current or future performance of the property. inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 X0121647 Marcus & Millichap. All rights reserved.

PROPERTY DESCRIPTION INVESTMENT OVERVIEW Investment Highlights Ideal San Fernando Valley Location Extremely Busy Street Corner - Combined Traffic Counts Exceed 90,000 Anchored by 7-Eleven and Subway High Income Neighborhood of Granada Hills Average Household Income Three-Mile Radius $95,000 Dense Suburban Market - Population Three-Mile Radius 152,000 Billboard Provides Additional Income Requiring No Square Footage High Cash Flow - 11.45 Percent CAP Rate Marcus & Millichap is pleased to present for sale the Leasehold Interest (improvements only) located at 10670-10690 Balboa Boulevard Granada Hills, California 91344. At an extremely attractive CAP rate of 11.45 percent and a highly competitive price per square foot of only $129, this property will provide the new owner with a large amount of cash flow through the end of the Ground Lease (January 31, 2033). Ground Lease terms: current rate through July 2020 is $150,000 per year; August 2020 through July 2025 rate is $165,000; August 2025 through July 2030 rate is $200,000 per year; August 2030 through January 2033 rate is $220,000 per year. Both Ground Lessee and Lessor have first right of refusal with 15 days to respond to notification. Anchored by 7-Eleven, Subway, and Metro PCS, this property is located in the highly desirable San Fernando Valley neighborhood of Granada Hills. Average household income and population in three-mile radius $95,000 and 152,000 respectively. Adding to this property's appeal is a Billboard that provides income while requiring no square footage. inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 X0121647 Marcus & Millichap. All rights reserved.

PROPERTY DESCRIPTION PROPERTY SUMMARY The Offering Property Granada Hills Retail Strip Property Address 10670-10690 Balboa Boulevard Granada Hills, CA 91344 Assessor's Parcel Number 2684-001-039 Zoning c2-1 Site Description Year Built 1986 Gross Leasable Area (GLA) 11,050 SF Lot Size 21,963 SF Type of Ownership Leasehold Interest Parking 21 inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved.

PROPERTY DESCRIPTION AREA MAPS Local Map Regional Map inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved.

RECENT SALES RECENT SALES MAP 1) 2) 3) Granada Hills Retail Strip Beach and Lincoln Center Burlington Coat Factory Sierra Commons inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved.

RECENT SALES CAP RATE AND PRICE PER SF Average Cap Rate 12.00 11.00 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Subject Beach and Lincoln Center Burlington Coat Factory Sierra Commons Average Price per Square Foot 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 Subject Beach and Lincoln Center Burlington Coat Factory Sierra Commons inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 X0121647 Marcus & Millichap. All rights reserved.

RECENT SALES RECENT SALES Granada Hills Retail Strip 10670-10690 Balboa Boulevard Granada Hills, CA 91344 Subject Property Comments Leasehold Interest (Improvements Only) Ground Lease Expires January 31, 2033. Year Built: 1986 Major Tenants Gross Leasable Area (GLA): 11,050 SF 7-Eleven Offering Price: $1,425,000 Subway Percent Down 50% Metro PCS CAP Rate: 11.45% Thai Restaurant Price/SF (GLA): $128.96 2 for 1 Pizza Lot Size: 21,963 SF Gamsa Pain Clinic Foot Massage 1 Beach and Lincoln Center 3000-3020 West Lincoln Avenue Anaheim, CA 92801 Comments Leasehold Interest (Improvements Only) Ground Lease with Approximately 23 Years Remaining Close of Escrow: 5/1/2015 Major Tenants Year Built: 1979 7-Eleven Gross Leasable Area (GLA): 18,070 SF Rainbow Donuts Sale Price: $2,100,000 Threading Salon Percent Down: Hayan Dental Group CAP Rate: 8.37% Liberty Tax Price/SF (GLA): $116.21 Ultra Comfort Massage Lot Size: 71,438 SF Lee's Sandwiches 2 Burlington Coat Factory 285 North Moorpark Road Thousand Oaks, CA 91360 Comments Leasehold Interest (Improvements Only) Burlington Coat Factory Lease Expires 2026 Close of Escrow: 8/29/2014 Major Tenants Year Built/Renovated: 1995 / 2007 Burlington Coat Factory Gross Leasable Area (GLA): 85,000 SF Sale Price: $3,500,000 Percent Down: CAP Rate: 8.89% Price/SF (GLA): $41.18 Lot Size: 50,179 SF inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 X0121647 Marcus & Millichap. All rights reserved.

RECENT SALES RECENT SALES 3 Sierra Commons 39626 10th Street West Palmdale, CA 93551 Comments Leasehold Interest (Improvements Only) Close of Escrow: 9/19/2014 Major Tenants Year Built/Renovated: 1996 / 2005 BEVMO! Gross Leasable Area (GLA): 88,171 SF Ashley Furniture Sale Price: $15,394,656 Pacific Dental Percent Down: Michael's CAP Rate: 7.86% Applebee's Price/SF (GLA): $174.60 Coffee Bean Lot Size: 347,894 SF Jared inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved.

RENT COMPARABLES RENT COMPARABLES MAP 1) 2) 3) 4) Granada Hills Retail Strip North Hills Shopping Center Devonshire Retail Center Mission Hills Retail Center Northridge Retail Center inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved.

RENT COMPARABLES OCCUPANCY AND AVERAGE RENT PER SF Average Occupancy 100 90 80 70 60 50 40 30 20 10 0 Subject North Hills Shopping Center Devonshire Retail Center Mission Hills Retail Center Northridge Retail Center Average Rent per Square Foot 2.40 2.10 1.80 1.50 1.20 0.90 0.60 0.30 0.00 Subject North Hills Shopping Center Devonshire Retail Center Mission Hills Retail Center Northridge Retail Center inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved.

RENT COMPARABLES RENT COMPARABLES Subject Property Comments Average Rent/SF Excludes Billboard Income Granada Hills Retail Strip 10670-10690 Balboa Boulevard Granada Hills, CA 91344 Date Surveyed: 2016 Major Tenants Occupancy: 100% 7-Eleven Year Built: 1986 Subway Gross Leasable Area (GLA): 11,050 SF Metro PCS Rent/SF (GLA): $2.54 Thai Restaurant Available SF: 0 2 for 1 Pizza Lot Size: 21,963 SF Gamsa Pain Clinic Lease Type: NNN Foot Massage 1 North Hills Shopping Center 16860 Devonshire Street Granada Hills, CA 91344 Date Surveyed: 2016 Major Tenants Occupancy: 97% Ralph's Year Built: 1958 Auto Zone Gross Leasable Area (GLA): 135,000 SF Regency Theatres Rent/SF (GLA): $2.25 Starbucks Available SF: 4,400 Fatburger Lot Size: 345,316 SF See's Candies Lease Type: NNN Baja Fresh 2 Devonshire Retail Center 17018 Devonshire Street Northridge, CA 91326 Date Surveyed: 2016 Major Tenants Occupancy: 97% Denny's Year Built: 1963 Panda Express Gross Leasable Area (GLA): 44,696 SF Papa John's Pizza Rent/SF (GLA): $2.50 Hertz Car Rental Available SF: 1,400 Lot Size: 103,424 SF Lease Type: NNN inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved.

RENT COMPARABLES RENT COMPARABLES 3 Mission Hills Retail Center 15534 Devonshire Street Mission Hills, CA 91345 Date Surveyed: 2016 Major Tenants Occupancy: 86% Verizon Wireless Year Built: 2007 Nail & Spa Gross Leasable Area (GLA): 7,290 SF Mexican Food Rent/SF (GLA): $2.25 Bright Dental Group Available SF: 1,000 Hair Salon & Beauty Lot Size: Lease Type: 19,301 SF NNN 4 Northridge Retail Center 10317 Zelzah Avenue Northridge, CA 91326 Date Surveyed: 2016 Major Tenants Occupancy: 93% Noah's Ark Kabob Year Built: 1981 Dentistry Gross Leasable Area (GLA): 15,722 SF Hair Salon Rent/SF (GLA): $1.85 Coin Laundry Available SF: 1,066 Wireless Store Lot Size: 36,508 SF Lease Type: NNN inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved.

DEMOGRAPHIC ANALYSIS DEMOGRAPHIC REPORT 1 Mile 3 Miles 5 Miles 2000 Population 23,236 152,173 499,524 2010 Population 23,854 164,484 537,015 2014 Population 24,367 168,076 549,825 2019 Population 25,080 171,360 563,877 2000 Households 8,094 50,657 145,835 2010 Households 8,057 52,857 153,716 2014 Households 8,309 54,616 158,819 2019 Households 8,579 55,940 163,549 2014 Average Household Size 2.89 3.00 3.38 2014 Daytime Population 6,207 40,343 158,967 2000 Owner Occupied Housing Units 57.78% 66.57% 56.90% 2000 Renter Occupied Housing Units 39.15% 31.13% 40.28% 2000 Vacant 3.07% 2.31% 2.81% 2014 Owner Occupied Housing Units 58.38% 64.43% 55.55% 2014 Renter Occupied Housing Units 41.62% 35.57% 44.45% 2014 Vacant 0.85% 0.99% 2.31% 2019 Owner Occupied Housing Units 58.23% 64.04% 55.31% 2019 Renter Occupied Housing Units 41.77% 35.96% 44.69% 2019 Vacant 0.74% 0.93% 2.35% $ 0 - $14,999 8.6% 9.4% 11.0% $ 15,000 - $24,999 8.7% 8.1% 10.6% $ 25,000 - $34,999 7.9% 7.5% 9.8% $ 35,000 - $49,999 15.6% 12.9% 14.2% $ 50,000 - $74,999 17.4% 17.0% 18.1% $ 75,000 - $99,999 13.1% 13.2% 12.4% $100,000 - $124,999 11.3% 10.1% 8.5% $125,000 - $149,999 7.2% 7.4% 5.5% $150,000 - $199,999 6.8% 7.6% 5.4% $200,000 - $249,999 1.2% 2.7% 1.9% $250,000 + 2.2% 4.2% 2.9% 2014 Median Household Income $63,687 $67,846 $56,077 2014 Per Capita Income $28,283 $31,029 $23,076 2014 Average Household Income $82,409 $94,942 $79,379 Demographic data 2012 by Experian. inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved.

DEMOGRAPHIC ANALYSIS SUMMARY REPORT Geography: 5 miles Population In 2014, the population in your selected geography is 549,825. The population has changed by 10.06% since 2000. It is estimated that the population in your area will be 563,876 five years from now, which represents a change of 2.55% from the current year. The current population is 49.78% male and 50.21% female. The median age of the population in your area is 33.7, compare this to the Entire US average which is 37.3. The population density in your area is 6,999.22 people per square mile. Households There are currently 158,819 households in your selected geography. The number of households has changed by 8.90% since 2000. It is estimated that the number of households in your area will be 163,549 five years from now, which represents a change of 2.97% from the current year. The average household size in your area is 3.38 persons. Income In 2014, the median household income for your selected geography is $56,077, compare this to the Entire US average which is currently $51,972. The median household income for your area has changed by 23.23% since 2000. It is estimated that the median household income in your area will be $66,396 five years from now, which represents a change of 18.40% from the current year. The current year per capita income in your area is $23,075, compare this to the Entire US average, which is $28,599. The current year average household income in your area is $79,378, compare this to the Entire US average which is $74,533. Race & Ethnicity The current year racial makeup of your selected area is as follows: 50.37% White, 3.73% Black, 0.13% Native American and 12.53% Asian/Pacific Islander. Compare these to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% Native American and 5.02% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 59.57% of the current year population in your selected area. Compare this to the Entire US average of 17.13%. Housing In 2000, there were 85,390 owner occupied housing units in your area and there were 60,444 renter occupied housing units in your area. The median rent at the time was $623. Employment In 2014, there are 158,966 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 58.63% of employees are employed in white-collar occupations in this geography, and 41.22% are employed in blue-collar occupations. In 2014, unemployment in this area is 10.14%. In 2000, the average time traveled to work was 31.7 minutes. Demographic data 2012 by Experian. inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved.

DEMOGRAPHIC ANALYSIS TRAFFIC COUNTS Traffic Count data 2012 by TrafficMetrix. All rights reserved. Two-way, average daily traffic volumes. * Traffic Count Estimate inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved.

GRANADA HILLS RETAIL STRIP - LEASEHOLD INTEREST LIFORNIA PROPERTY DESCRIPTION presented by Presented by: OFFICES THROUGHOUT THE U.S. AND CANADA www.marcusmillichap.com inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. 2015 Marcus & Millichap. All rights reserved..