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UPLAND, CALIFORNIAOFFERING MEMORANDUM

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OFFERING MEMORANDUMUPLAND, CALIFORNIA

EXCLUSIVELY LISTED BY:

Bill AsherExecutive Vice [email protected] | BRE #01318078

Pat KentSenior Vice [email protected] | BRE #01015083

TABLE OF CONTENTS:Offering Summary 4

Investment Highlights 5

Rent Roll 7

Income & Expense 8

Site Plan 9

Parcel Map 10

Aerial Overviews 11

Regional Map 15

Tenant Profiles 16

Area Overviews 18

Demographics 20

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SHOPS TO SMART & FINAL EXTRA!

The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy.

The information contained herein does not purport to provide a complete or fully accurate 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 buyers may need or desire. All financial projections are based on assumptions relating to the general economy, competition, and other factors beyond the control of the Owner and Broker and, therefore, are subject to material variation. This Marketing Package does not constitute an indication that there has been no change in the business or affairs of the Property or the Owner since the date of preparation of the information herein. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective buyers.

Neither Owner nor Broker nor any of their respective officers, Agents or principals has made or will make any representations or warranties, express or implied, as to the accuracy or completeness of this Marketing Package or any of its contents, and no legal commitment or obligation shall arise by reason of the Marketing Package or its contents. Analysis and verification of the information contained in the Marketing Package is solely the responsibility of the prospective buyer, with the Property to be sold on an as is, where-is basis without any representations as to the physical, financial or environmental condition of the Property.

Owner and Broker expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the Property and/or terminate discussions with any entity at any time with or without notice. Owner has no legal commitment or obligations to any entity reviewing this Marketing Package or making an offer to purchase the Property unless and until such sale of the Property is approved by Owner in its sole discretion, a written agreement for purchase of the Property has been fully delivered, and approved by Owner, its legal counsel and any conditions to the Owner’s obligations thereunder have been satisfied or waived.

This Marketing Package and its 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 called the “Contents”), are of a confidential nature. By accepting this Marketing Package, you unconditionally agree that you will hold and treat the Marketing Package and the Contents in the strictest confidence, that you will not photocopy or duplicate the Marketing Package or any part thereof, that you will not disclose the Marketing Package or any of the Contents to any other entity (except in the case of a principal, who shall be permitted to disclose to your employees, contractors, investors and outside advisors retained by you, or to third-party institutional lenders for financing sought by you, if necessary, in your opinion, to assist in your determination of whether or not to make a proposal) without the prior authorization of the Owner or Broker, and that you will not use the Marketing Package or any of the Contents in any fashion or manner detrimental to the interest of the Owner or Broker.

CONFIDENTIALITY DISCLAIMER

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NOT A PART

NOT A PART

LOCATION

Shops to Smart & Final Extra!

1042 N Mountain Avenue

Upland, CA 91786

OFFERING SUMMARY

Price: $4,115,000

Net Operating Income: $213,574

Capitalization Rate: 5.20%

Net Rentable Area: 9,167

Year Built: 1997

Lot Size (Acres): 0.49

FINANCING SUMMARY

All Cash or Cash to New Financing

(Contact Hanley Investment Group for Further Details)

OFFERING SUMMARY

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INVESTMENT HIGHLIGHTS

yy Smart & Final Extra! anchored multi-tenant pad building; 100% occupied

yy Located at the high traffic signalized intersection of Mountain Avenue and Foothill Boulevard (58,000+ cars per day)

yy Favorable net lease reimbursement structure with 15% administrative fees (including management reimbursement) and zero leakage

yy The UPS Store and Pro Cleaners have occupied space since the property was originally constructed in 1997 (19+ years)

yy Secure and stable income stream with two new 10-year leases signed with Mountain View Dental and We Talk Pets!

yy Strong daily customer traffic at the shopping center driven by co-tenants (not a part of the offering) Smart & Final Extra!, Chipotle, Shell Gas Station and Subway

yy Subject property is in great condition including new paint and awnings

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INVESTMENT HIGHLIGHTS

yy Upland is a residential community located 35 miles east of Los Angeles and 10 miles north of Orange County

yy Dense, infill Southern California demographics with a population of 383,000+ within a 5-mile radius

yy Excellent central location in close proximity to the 10 and 210 freeways

yy Outstanding accessibility, exposure and visibility from Foothill Boulevard and Mountain Avenue, two of the most heavily trafficked retail thoroughfares in Upland

yy Exceptional national tenant synergy at the intersection; Tenants include Bank of America, Big Lots, Burger King, Chipotle, Dominos, FedEx, Habit Burger, KFC, Pizza Hut, Smart & Final Extra!, Stater Bros., Subway and Walgreens

yy Close proximity to Cable Airport, a privately owned airport located 2 miles northwest of the central business district of Upland

yy Located in close proximity to the prestigious Claremont Colleges, with 5 undergraduate and two graduate schools and an approximate student enrollment of 7,000

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TENANT SUITE SF LEASE START

LEASE END

AUG. 2016 RENT/SF

AUG. 2016 RENT/MO.

RENTAL INCREASES

LEASE TYPE

RENEWAL OPTIONS

The Spot Café A1 1,800 05/07/14 04/30/19 $2.12 $3,819 3% Annually (6/17) NNN

One 5-Year @ FMV (3% Min Followed by

3% Annual Increases)

Mountain View Dental (1) A2 1,640 11/16/15 05/31/26 $1.70 $2,788 3% Annually (5/2017) NNN

Three 5-Year @ FMV (3% Min Followed by


We Talk Pets! (2) A 2,560 09/01/15 06/30/26 $1.65 $4,224 3% Annually (4/2018) NNN

Three 5-Year FMV (3% Min Followed by


The UPS Store B 1,667 07/21/95 04/30/17 $2.09 $3,481 None Remaining NNN



Pro Cleaners C 1,500 07/24/95 04/30/17 $2.06 $3,095 None Remaining NNN



TOTAL SQUARE FOOTAGE: 9,167 $17,407 Total Monthly Rent

TOTAL AVAILABLE: 0 0% Vacancy $208,888 Total Annual Rent

TOTAL OCCUPIED: 9,167 100% Occupancy

(1) Tenant is estimated to take occupancy and commence paying rent on or before June 1, 2016.

(2) Tenant is estimated to take occupancy on or before July 1, 2016. Tenant is scheduled to commence paying rent of $2,560 per month beginning August 9, 2016. Rent shall increase to $4,224 per month beginning March 9, 2017 followed by 3% annual increases.

RENT ROLL

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ANNUALIZED OPERATING DATA

Aug. 2016

Scheduled Gross Income (SGI): $208,888

Expense Reimbursement: (1) $83,348

Gross Operating Income: $292,236

Total Operating Expenses: ($78,662)

Net Operating Income (NOI): $213,574 5.20% Capitalization Rate

(1) All Tenants pay an Administrative Fee equal to 15% of CAMs, Insurance and Management.

OPERATING EXPENSES

Amount $/SF

Taxes (1.08%): $44,442 $4.85

Insurance: $8,151 $0.89

CAM: $19,802 $2.16

Management (3.0% of SGI): $6,267 $0.68

Total Expenses: $78,662 $8.58 Annually Per SF

$0.72 Monthly Per SF

INCOME & EXPENSE

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SITE PLAN

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SUBJECT PROPERTY NOT A PART

SUITE TENANTS SFA1 The Spot Café 1,800A2 Mountain View Dental 1,640A We Talk Pets! 2,560B The UPS Store 1,667C Pro Cleaners 1,500

FOOTHILL BOULEVARD

MO

UN

TAIN

AV

ENU

E

CBAA1 A2

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FOOTHILL BOULEVARD

MO

UN

TAIN

AV

ENU

E

PARCEL MAP

SUBJECT PROPERTYAPN: 1006-491-20

N

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AERIAL OVERVIEW

58,000 CPD- INTERSECTION -

N

RED HILL COUNTRY CLUB

UPLAND HILLS COUNTRY CLUB

MOUNTAIN AVENUE

EUCLID AVENUE

FOOTHILL BOULEVARDSUBJECT

PROPERTY

COLONIES CROSSROADS

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AERIAL OVERVIEW

N

2015 DEMOGRAPHICS

1-Mile 3-Mile 5-MilePopulation: 18,423 152,248 383,466Household Income: $63,273 $74,128 $71,666

RED HILL COUNTRY CLUB

UPLAND HILLS COUNTRY CLUB

FOO

THILL BO

ULEVA

RD

MOUNTAIN AVENUE

SUBJECTPROPERTY

COLONIES CROSSROADS


UPLAND HIGH SCHOOL-3,700 STUDENTS -

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AERIAL OVERVIEW

N

SUBJECTPROPERTY

FOOTHILL BOULEVARD

MOUNTAIN AVENUE

CABLE AIRPORT- WORLDS LARGEST FAMILY OWNED

PUBLIC USE AIRPORT -

THE CLAREMONT COLLEGES-7,700 STUDENTS -

MONTCLAIR PLACE


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AERIAL OVERVIEW

N

UPLAND HIGH SCHOOL-3,700 STUDENTS -

CHAFFEY HIGH SCHOOL-3,700 STUDENTS -

ONTARIO INTERNATIONAL AIRPORT

- 6M PASSENGERS -

SUBJECTPROPERTY

MO

UN

TAIN

AVENU

E

FOOTHILL BOULEVARD58,000 CPD

- INTERSECTION -

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REGIONAL MAP

SUBJECTPROPERTY

N

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TENANT PROFILES

Smart & Final Stores, Inc. (NYSE: SFS), is a value-oriented food and everyday staples retailer that serves household and business customers. The Company is headquartered in Commerce (located in Los Angeles), CA, where it was founded 145 years ago. As of January, 2016, the Company operated 276 grocery and foodservice stores under the “Smart & Final,” “Smart & Final Extra!” and “Cash & Carry Smart Foodservice” banners in California, Oregon, Washington, Arizona, Nevada, and Idaho, with an additional 15 stores in northern Mexico operated through a joint venture.

Smart & Final stores target both the foodservice and household markets. Foodservice customers typically include operators of small restaurants, catering companies, businesses, clubs and civic organizations. For household customers, Smart & Final stores provide a convenient, low-cost source for cooking and cleaning needs.

Smart & Final Extra!, one of the company’s newest store concepts, is designed to enhance the household consumer’s shopping experience and also includes changes to benefit business customers. Smart & Final Extra! stores are much larger than a typical Smart & Final warehouse store and full of extra features. The stores carry a greatly expanded selection of products in key categories like produce, fresh meat, frozen foods, dairy, deli and grocery basics like cereal, yogurt, bread and snacks. Smart & Final Extra! combines the high quality fresh produce of a farmer’s market, the low prices of a discount grocer and the large club size products of a traditional club store. You don’t need to buy in bulk when you shop at Smart & Final Extra! since they carry thousands of items in smaller, convenient sizes. In addition they have everything that small businesses, clubs and organizations need on a daily basis.

Company Type: Public (NYSE: SFS; S&P: B+)Locations: 276Websites: www.smartandfinal.com

(NOT A PART OF SUBJECT OFFERING)

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Mountain View Dental is a dental provider accredited by the American Dental Association, the California Dental Association, and the Tri-Valley Dental Society. The company strives to provide affordable service while delivering the highest level of care in a high tech, modern, and comfortable environment. Mountain View Dental offers a comprehensive list of general restorative and cosmetic dental services to both adults and children.

www.mtviewfamilydental.com | Company Type: Private | Locations: 1

We Talk Pets! is an animal hospital and specialty veterinary medicine facility. The company provides unique online and phone based apps solutions to handle regular prevention appointments as well as prescription refills. Raj Thind will be the primary provider of veterinary care. Dr. Thind has extensive experience in veterinary medicine and for the last 6 years has been the Chief of Staff at Banfield Pet Hospital.

Company Type: Private | Locations: 1

WE TALK PETS!

The Spot Cafe was started by partners Mitchell Stein and Hugo Horta in Upland in the year 2013. The Spot Café strives to create a place that serves healthy, fresh food and provides meals for people with all kinds of dietary needs. The restaurant offers a complete line of Gluten Free Items, Vegan and Vegetarian Meals. A major differentiating feature of The Spot is the staff of nutritionists on hand to help with weight loss and meal plans. The café also offers daily meal plans to help guide its customers to a healthier, more fulfilling lifestyle. The Spot Café offers a unique experience aimed at serving those who are highly active and health-conscious.

www.thespotcafeusa.com | Company Type: Private | Locations: 1

The UPS Store, Inc. is the world’s largest franchisor of retail shipping, postal, printing, and business service centers. The UPS Store comprises approximately 4,800 independently owned locations in the U.S., Puerto Rico, and Canada. Entrepreneur ‘s annual “Franchise 500,” rated The UPS Store number 1 in the postal and business services category for the 23rd consecutive year. United Parcel Service, Inc. (NYSE: UPS; S&P: A+), a package delivery company, provides transportation, logistics, and financial services in the United States and internationally. It operates a fleet of approximately 106,000 package cars, vans, tractors, and motorcycles, and owns 33,000 containers used to transport cargo in its aircraft. The company had most recent revenue of $58.2 billion and employs 435,000.

www.theupsstore.com | Company Type: Public (NYSE: UPS; S&P: A+) | Locations: 4,800+

TENANT PROFILES

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Upland is a residential community located on the border of Los Angeles and San Bernardino Counties, encompassing a total 15.65 square miles. The city sits at

the base of the San Bernardino Mountains, north of Interstate 10, south of State Route 210, and west of Interstate 15. Incorporated in 1906, the city is home to more than 75,000 residents. The city lies on the northwestern edge of San Bernardino County and median annual income in Upland hovers around $65,000.

The city is home to Cable Airport, the world’s largest family-owned, public use, general aviation airport. The two nearby airports, Ontario International Airport and Los Angeles International Airport offer commercial flights.

Euclid Avenue in the city is part of California Highway 83, a north-south route that connects to Ontario and Chino to the south, while Foothill Boulevard is part of California Highway 66, an east-west route that was formerly part of the famed U.S. Route 66. Interstate 10 runs along Upland’s boundary with Ontario, and connects Upland with Los Angeles to the west and San Bernardino the east. The east-west running Interstate 210 runs through the northern part of Upland, connecting to Pasadena to the west and San Bernardino to the east.

Upland is a fast-growing city with a diverse employment and a well-educated population. The largest employer in the city is San Antonio Community Hospital. The 400-plus bed facility has received numerous awards and employs upwards of 2,000. Other top employers in the city include major retail players like Kohl’s, Walmart, and The Home Depot.

Historic Downtown Upland is a popular local hub of eateries and retail shops which represent the heart of the city. In total, the downtown area is made up of nearly 200 businesses providing a diversity of merchandise and services. Every Thursday night starting in the spring and running through the fall, Downtown Upland hosts the Upland Farmers Market. Vendors of all types cover a 4-block area around the 2nd Avenue and 9th Street intersection. This market dates back nearly 25 years and has become a vital tradition in the city. Downtown Upland also hosts The Upland Lemon Festival, which is celebrated annually to commemorate the city’s citrus industry.

Perhaps the most recognized landmark in Upland is the Madonna of the Trail statue. In 1929, the Daughters of the American Revolution placed a Madonna of the Trail statue in Upland at the intersection of Foothill Boulevard and Euclid Avenue. The twelve Madonna of the Trail statues, created by sculptor August Leimbach, mark the route of the National Old Trails road with the westernmost statue being that in Upland.

MADONNA OF THE TRAIL STATUE

THE GROVE THEATER

UPLAND CITY HALL

AREA OVERVIEW

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CALIFORNIA STATE UNIVERSITY, SAN BERNARDINO

ONTARIO INTERNATIONAL AIRPORT

San Bernardino County is in inland Southern California, east of Orange and Los Angeles Counties

and bordered on the east by Arizona and Nevada. Together, San Bernardino County and Riverside County comprise what is referred to as the Inland Empire. San Bernardino is the largest county in the nation by area at 20,105 square miles, though, the majority of its population (around 1.6 million) lives in the 480 square miles of the San Bernardino Mountains and Valley. Inland Empire represents about 11.6% of California’s population, with San Bernardino County making up nearly half of that total.

San Bernardino County has historically been an exporter of employees to Los Angeles and Orange Counties as the population spilled over into the Inland Empire in search of more affordable housing. Recent growth and projections for the future are now being attributed to the county’s internal expansion and diversification in employment. New development in the region consists primarily of development of warehouse and distribution buildings, in addition to manufacturing.

Ontario International Airport is the County’s air transport provider. Its has two passenger terminals with 35 gates that total 530,000 square feet, 13,968 parking stalls and has the capacity to serve 10 million passengers annually. Roughly 4.5 million passengers use the airport each year and over 400,000 tons of air freight. In recent years, the airport has grown its appeal as a distribution center, as more and more major logistics operations begin to call San Bernardino County and the Inland Empire home. Despite being overshadowed by Los Angeles International Airport, it is ranked among the 100 busiest airports in the world and is currently served by 8 passenger airlines and 8 airfreight carriers. The United Parcel Service (UPS) operates a regional freight hub there that ships cargo to cities across North America.

EDUCATIONSeveral of the most prestigious colleges in the country are located in San Bernardino county. Near the center are the private, prestigious higher educational institutions at Claremont Colleges: Harvey Mudd College, Pomona College, Pitzer College, Scripps College, Keck Graduate School and Claremont Graduate University. Several other colleges within commuting distance include University of California Riverside, University of Redlands, Loma Linda University, California State Polytechnic University, and Cal State University of San Bernardino.

The Prestigous Claremont Colleges feature a cluster of autonomous colleges, each of which excels in a particular academic niche with its own campus, its own student and faculty, and its own distinctive style. With approximately 7,000 students, about 500 faculty members, and 3,000 staff members, the campus of the Claremont Colleges generates an endless variety of intellectual, cultural, and social activities. The assets of The Claremont Colleges total over $950 million, including substantial endowments in all of the colleges, with over 175 buildings on 550 acres of distinctive campus grounds.

AREA OVERVIEW

CLAREMONT COLLEGES - HARVEY MUDD COLLEGE

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DEMOGRAPHICS

1-Mile 3-Mile 5-MilePopulation 2020 Projection 18,843 154,914 391,257 2015 Estimate 18,423 152,248 383,466 2010 Census 18,146 150,903 378,954 2000 Census 16,291 141,400 360,563 Growth 2000 - 2010 11.39% 6.72% 5.10% Growth 2010 - 2015 1.53% 0.89% 1.19% Growth 2015 - 2020 2.28% 1.75% 2.03%

Households 2020 Projection 6,829 49,336 119,123 2015 Estimate 6,667 48,334 116,463 2010 Census 6,605 47,860 114,928 2000 Census 6,261 46,313 110,114 Growth 2000 - 2010 5.50% 3.34% 4.37% Growth 2010 - 2015 0.93% 0.99% 1.34% Growth 2015 - 2020 2.42% 2.07% 2.28%

2015 Est. Population by Single-Classification Race 18,423 152,248 383,466 White Alone 10,857 95,146 222,878 Black or African American Alone 1,805 8,834 23,162 American Indian and Alaska Native Alone 141 1,341 3,605 Asian Alone 1,279 11,393 28,624 Native Hawaiian and Other Pacific Islander Alone 54 367 913 Some Other Race Alone 3,139 27,080 85,097 Two or More Races 1,148 8,087 19,186

2015 Est. Population by Ethnicity (Hispanic or Latino) 18,423 152,248 383,466 Hispanic or Latino 8,109 76,312 215,617 Not Hispanic or Latino 10,314 75,936 167,849

2015 Est. Average Household Income $63,273 $74,128 $71,666

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