V I L L A G E I I Lancaster1137 W. AVENUE I,

LANCASTER, CA 93534

BRANDON MICHAELSSenior Managing Director InvestmentsSenior Director, National Retail GroupTel: (818) 212-2794bmichaels@marcusmillichap.comLicense: CA #01434685

INVESTMENT ADVISORS

16830 Ventura Blvd. Suite 100, Encino, CA 91436www.marcusmillichap.com

G R O U P

BRANDON MICHAELS

1 Executive Summary

2 InvestmentHighlights

3Financial Analysis

4 Comparables

Analysis

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Executive Summary Property Overview

Marcus & Millichap has been selected to exclusively market for sale Lancaster Village II, a 13,320 SF multi-tenant strip center located at 1137 W. Avenue I in Lancaster, California. Lancaster Village II is ideally located just West of the Signalized intersection of West Avenue I and 10th Street West. The center is shadow anchored by a host of well-established tenants including Dollar Tree, Speedy Cash, and Metro PCS.

Lancaster Village II is currently 63% occupied, creating significant upside through stabilization. The center benefits from a diverse tenant mix that caters to the needs of the local residents. Lancaster Village II is well located on West Avenue I, a major throughfare through Lancaster, and just a few blocks from the 14 Aerospace Freeway. Multiple national retailers are located in the immediate area including Auto Zone, Denny’s, Taco Bell, Burger King, and more.

Lancaster is a charter city in Northern Los Angeles County in the Antelope Valley, approximately 70 miles north of Los Angeles. Clean air, attainable housing, wide open spaces, and a close-knit community make Lancaster the ideal place for families. Endless potential for growth, along with a strong commitment to business from local leaders, earned Lancaster the “Most Business-Friendly” Eddy Award from the Los Angeles Economic Development Corporation in 2007. Lancaster has a dense population with 150,218 people within a five mile radius.

V I L L A G E I I Lancaster1137 W. AVENUE I,

LANCASTER, CA 93534

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PROPERTY INFORMATION

Address 1137 W Avenue I, Lancaster, CA 93534

Property Type Multi-Tenant Strip Center

Gross Square Feet 13,463 SF

Land SF 18,922 SF

Year Built 1961

APN 3120-029-024

Zoning LRC3

Type of Ownership Fee Simple

FINANCIAL INFORMATION

Asking Price $1,095,000

Price/SF $81.33

Current CAP Rate 6.04%

ProForma CAP Rate 11.38%

Occupancy 63%

Price/SF (land) $57.87

Property Overview Investment Highlights

V I L L A G E I I Lancaster19216 VENTURA BOULEVARD,

TARZANA, CA 91356

W AVENUE I (21,269 VEHICLES PER DAY)

10TH

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MULTI-TENANT STRIP CENTER - 63% leased 13,463 SF multi-tenant retail strip center located in Lancaster, California

LOW PRICE PER SF - Center is priced significantly below replacement costs

STABLE AND SECURE INCOME STREAM - Diverse tenant mix which caters to the needs of the local residents

HEAVY RETAIL CORRIDOR - Multiple national retailers along 1167 West Avenue I including Denny’s, Taco Bell, Dollar Tree, Metro PCS, IHOP, McDonald’s, and more.

SHADOW ANCHOR- Center is shadow anchored by Lancaster Village, home to a host of tenants including Dollar Tree, Speedy Cash, and Metro PCS

STRONG DAILY TRAFFIC COUNTS - Over 21,269 vehicles per day on W Avenue I

EXCELLENT VISIBILITY - Located just West of the Signalized intersection og West Avenue I and 10th Street West

AMPLE PARKING -Parking in the front of the center with reciprocal parking access

CITY OF LANCASTER LOCATION - A thriving community one hour north of Los Angeles that is ideal for families and has also earned a “Most Business Friendly“ award in 2007

DENSE POPULATION - Over 150,218 people within a five mile radius from the

subject property

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LOCATION1137 West Avenue I, Lancaster CA 93534

SITEThe subject property is located just west of the signalized northwest corner of W Avenue I and 10th Street West.

SQUARE FOOTAGESThe Subject Property consists of a retail building of 13,463 SF on a 18,922 SF lot.

FRONTAGE AND ACCESS124 feet of frontage on W Avenue I.

YEAR BUILTThe property was built in 1961.

ZONINGThe property is zoned LRC3.

PLAT

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Property Overview

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Financial Analysis

TENANT UNIT SF % LEASE START LEASE EXP CURRENT RENT RENT/SF PROFORMA RENT PF RENT/SF

Toce Si Senor 2,140 16% 8/4/2013 8/1/2018 $3,717.00 $1.74 $3,717.00 $1.74

Victor Wireless 3,000 23% 10/1/2015 10/1/2018 $2,600.00 $0.87 $2,600.00 $1.00

Hanna's Beauty Salon 800 6% 9/1/2016 9/1/2021 $1,350.00 $1.69 $1,350.00 $1.69

Vacant 1,200 9% - - - $1,600.00 $1.33

Vacant 3,000 23% - - - $3,000.00 $1.00

US Batta 2,500 19% 8/24/2015 8/24/2018 $1,750.00 $0.70 $1,750.00 $1.00

Vacant 680 5% - - - - $1,020.00 $1.50

Total 13,320 100% - - $9,417.00 $1.12 $15,037.00 $1.13

Occupied SF 8,440 63%

Vacant SF 4,880 37%

RENT ROLL

Financial Analysis

EXPENSES ANNUAL PER SF

Taxes (1.25%) $13,140 $0.99

Insurance $5,582 $0.42

Landscaping $4,500 $0.34

Repairs & Maintenance $5,000 $0.38 Management $4,520 $0.34 Waste $9,618 $0.72 Electric $3,897 $0.29 Water $565 $0.04

Total Expenses $46,822 $3.48/$0.29

INCOME AND EXPENSE

CURRENT PROFORMA

Scheduled Lease Income: $113,004 $180,444

Effective Gross Income: $113,004 $180,444

Vacancy: - 5% $9,022

Expenses: $46,822 $46,822

Net Operating Income: $66,182 $124,600

ANNUALIZED OPERATING DATA

Asking Price $1,095,000

Price/SF (bldg) $81.33

Current CAP Rate 6.04%

ProForma CAP Rate 11.38%

PRICING

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# ADDRESS SALES PRICE PRICE/SF BLDG SF LOT SF CLOSE OF ESCROW CAP RATE

1 44130 20th Street W, Lancaster $4,650,000 $231.80 20,060 77,293 3/23/2017 7.00%

2 1759 W Avenue J12, Lancaster $7,725,000 $306.55 25,200 121,319 8/18/2016 7.15%

3 626 W Lancaster Blvd, Lancaster $410,000 $164.00 2,500 5,227 8/31/2016 -

4 843 W. Lancaster Boulevard, Lancaster $1,025,000 $153.12 6,694 53,239 6/29/2016 -

5 902 W. Lancaster Boulevard, Lancaster $450,000 $128.21 3,510 8,577 4/6/2016 -

Average $2,852,000 $196.74 11,593 53,131 - -

Sales ComparablesSales ComparablesSALES COMPS SALES PRICE/SF

$231.80

$306.55

$164.00 $153.12

$128.21

$196.74

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

44130 20th StreetW, Lancaster

1759 W AvenueJ12, Lancaster

626 W LancasterBlvd, Lancaster

843 W. LancasterBoulevard,Lancaster

902 W. LancasterBoulevard,Lancaster

Average

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Address 44130 20th Street W, Lancaster

Sales Price $4,650,000

Price/SF $231.80

Bldg SF 20,060

Lot SF 77,293

Close of Escrow 3/23/2017

Cap Rate 7.00%

Address 843 W. Lancaster Boulevard, Lancaster

Sales Price $1,025,000

Price/SF $153.12

Bldg SF 6,694

Lot SF 53,239

Close of Escrow 6/29/2016

Cap Rate 7.00%

Address 1759 W Avenue J12, Lancaster

Sales Price $7,725,000

Price/SF $306.55

Bldg SF 25,200

Lot SF 121,319

Close of Escrow 8/18/2016

Cap Rate 7.15%

Address 626 W Lancaster Blvd, Lancaster

Sales Price $410,000

Price/SF $164.00

Bldg SF 2,500

Lot SF 5,227

Close of Escrow 8/31/2016

Cap Rate 7.00%

Sales ComparablesSales Comparables

Address 902 W. Lancaster Boulevard, Lancaster

Sales Price $450,000

Price/SF $128.21

Bldg SF 3,510

Lot SF 8,577

Close of Escrow 4/6/2016

Cap Rate 7.00%

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Sales Comparables

1

2

345

# ADDRESS

1 44130 20th Street W, Lancaster

2 1759 W Avenue J12, Lancaster

3 626 W Lancaster Blvd, Lancaster

4 843 W. Lancaster Boulevard, Lancaster

5 902 W. Lancaster Boulevard, Lancaster

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# ADDRESS RENTAL RATE/YEAR RENTAL RATE/MONTH LEASE TYPE SPACE AVAIL BLDG SF

1 44204 10th Street West, Lancaster $13.80 $1.15 NNN 2,310 96,567

2 551 West Avenue I, Lancaster $12.00 $1.00 MG 2,000 2,000

3 42212 10th Street W, Lancaster $14.27 $1.19 MG 1,850 1,850

4 42212 10th Street W, Lancaster $12.00 $1.00 MG 2,800 2,800

5 547 Lancaster Boulevard, Lancaster $15.00 $1.25 - 6,923 7,497

6 551 W Avenue I, Lancaster $11.88 $0.99 FS 2,000 9,110

7 701 West Avenue K, Lancaster $15.60 $1.30 NNN 1,500 40,474

Average $13.51 $1.13 2,769 22,900

Rent Comparables Rent Comparables

$-

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

44204 10thStreet West,Lancaster

551 WestAvenue I,Lancaster

42212 10thStreet W,Lancaster

42212 10thStreet W,Lancaster

547LancasterBoulevard,Lancaster

551 WAvenue I,Lancaster

701 WestAvenue K,Lancaster

Average

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Rent Comparables

1

7

2

3

5

# ADDRESS

1 44204 10th Street West, Lancaster

2 551 West Avenue I, Lancaster

3 42212 10th Street W, Lancaster

4 42212 10th Street W, Lancaster

5 547 Lancaster Boulevard, Lancaster

6 551 W Avenue I, Lancaster

7 701 West Avenue K, Lancaster

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AREA OVERVIEWLANCASTER, CALIFORNIALancaster is a charter city in northern Los Angeles County, in the Antelope Valley of the western Mojave Desert in Southern California. As of 2013, Lancaster was the 31st largest city in California. Lancaster is part of a twin city complex with its southern neighbor Palmdale and together they are the principal cities within the Antelope Valley region and California's High Desert.

Lancaster is located approximately 70 miles north (by highway) of downtown Los Angeles, near the Kern County line. It is separated from the Los Angeles Basin by the San Gabriel Mountains to the south, and from Bakersfield and the San Joaquin Valley by the Tehachapi Mountains to the north. The population of Lancaster grew from 37,000 at the time of its incorporation in 1977 to over 156,000 in 2010.

CITY SNAPSHOTThe City of Lancaster is a thriving community of 160,784 located approximately one hour north of Los Angeles. Clean air, attainable housing, wide open spaces, and a close-knit community make Lancaster the ideal place for families. Endless potential for growth, along with a strong commitment to business from local leaders, earned Lancaster the “Most Business-Friendly” Eddy Award from the Los Angeles Economic Development Corporation in 2007.

People of all ages and ethnic backgrounds call Lancaster home. Attainable housing and recent economic growth have made Lancaster a very attractive choice for families and businesses who are looking to relocate, but wish to enjoy all the advantages that Southern California has to offer.

ECONOMYLancaster’s business-friendly atmosphere has contributed to dramatic economic growth in recent years. New businesses often choose to relocate or open another location in Lancaster, which translates to increases in local job opportunities. Some of America’s top companies have discovered the remarkable advantages Lancaster has to offer. BYD, Deluxe, Incotec, Lance Camper, Michaels, Morton Manufacturing, Rite Aid and Sygma are just a few of the growing firms, some among the Fortune 500, which have chosen to locate here. Their reasons vary. Several found Lancaster to be a strategic place for warehouse distribution. Others sought a dedicated workforce for customer service operations. More than a few found the lower cost structure to be irresistible. While other communities have seen their commercial and industrial base wither, Lancaster has been successful in assisting nearly 60 businesses to open up shop in the midst of the recession.

EDUCATIONThe City’s University Center has brought California State University engineering and science programs to the community while Antelope Valley College, home to more than 15,000 students, continues to expand its 135 acres with new health and science facilities designed to educate a new generation of highly skilled workers. With a local population of nearly 160,000, Lancaster offers employers a deep and energetic talent pool to draw upon. Nearly 60% of Lancaster’s workforce has solid college experience. The City’s median age is just 32.4 years, giving our workforce great vitality. Many who live here, work elsewhere and would like to find good jobs closer to home. New employers find a ready reserve of qualified workers available when they move to Lancaster.

RECREATIONLancaster is a lively, friendly city with much to appreciate. Along the reimagined BLVD, you’ll find an eclectic mix of commerce and community. People strike business deals over lunch and find local bounty at twilight Farmers Markets, while enjoying evenings and weekends with family and friends. World-class cultural venues including the Lancaster Performing Arts Center and the dramatic new Museum of Art and History (MOAH) are testaments to how well art and commerce work together. The City’s Parks, Recreation & Arts Department plays a vital role in creating a number of events and activities which attract people to the downtown area and throughout Lancaster. These events not only help build a sense of community but encourage new commerce and economic benefit. In springtime, the Poppy Festival brings out tens of thousands of visitors. Summer nights sparkle with concerts, professional JetHawks minor league baseball and the Antelope Valley Fair. Autumn lures thousands more to the Streets of Lancaster Grand Prix, a thrilling pro karting race through the streets of downtown. Holiday spirits are raised as winter arrives with a full calendar of family-focused events. Working hand-in-hand, business and government continue to make Lancaster a remarkable place to live and prosper.

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AREA OVERVIEW AREA OVERVIEW

1 MILE 3 MILES 5 MILES

2014 Population 18,869 88,251 150,218

2014 Households 6,320 29,251 46,081

2014 Average Household Size 2.95 2.98 3.09

2014 Daytime Population 4,603 24,533 39,877

2014 Owner Occupied Housing Units 47.56% 49.67% 56.80%

2014 Renter Occupied Housing Units 52.44% 50.33% 43.20%

2014 Vacant 8.71% 7.60% 6.71%

$ 0 - $14,999 21.6% 17.9% 16.1%

$ 15,000 - $24,999 13.8% 13.1% 11.7%

$ 25,000 - $34,999 10.2% 11.3% 10.0%

$ 35,000 - $49,999 13.7% 14.1% 14.4%

$ 50,000 - $74,999 19.9% 18.4% 19.3%

$ 75,000 - $99,999 8.9% 10.5% 11.3%

$100,000 - $124,999 6.0% 6.7% 7.6%

$125,000 - $149,999 2.4% 2.9% 3.5%

$150,000 - $199,999 1.8% 2.8% 3.2%

$200,000 - $249,999 0.7% 0.9% 1.1%

$250,000 + 1.0% 1.5% 1.7%

2014 Median Household Income $39,169 $43,180 $47,628

2014 Per Capita Income $18,305 $20,023 $20,851

2014 Average Household Income $53,504 $59,672 $64,735

DEMOGRAPHICS BY RADIUS LANCASTER DEMOGRAPHICS

Males 50.1%Females 49.9%

RACE

20-44 years35.3%

5-19 years25.9%

45-64 years22.7%

Whites 49.6%

Blacks/African Americans 20.5%%

Two or more races 5.4%Asians

4.3%

Not Hisptanic or Latino 38%

White persons not Hispanic 34.2%

GENDER AGE

RACE

OFFICES NATIONWIDE

www.marcusmillichap.com

BRANDON MICHAELSSenior Managing Director InvestmentsSenior Director, National Retail GroupENCINOTel: (818) 212-2794Fax: (818) 212-2710Brandon.Michaels@marcusmillichap.comLicenses: CA: 01434685