CHICO MALL

E 20

th S

t (2

0,9

31 A

ADT

)

ON RAMPOFF RAMP

offering memorandum.

www.maffiateam.com

Panera Bread and Noodles & CompanyChico, CA

• New 10-Year Net Leases to National Tenants

• 10% Rental Escalations every Five Years

• Brand New Construction

• Drive-Thru Component for Panera Bread

• Outparcel to Chico Mall

• Located in Dense Retail Corridor

• Convenient Access from State Highway 99 (70,000 AADT)

• Near Chico State University

$6,472,0004.75% CAP Rate

Michael MaffiaSenior Managing Director 415.445.5144mmaffia@newmarkccarey.comCA RE License #01340853

Putnam DailyVice President 415.445.5107pdaily@newmarkccarey.comCA RE License #01750064

Newmark Cornish & Carey (“Broker”) has been retained on an exclusive basis to market the property described herein (“Property”). Broker has been authorized by the Seller of the Property (“Seller”) to prepare and distribute the enclosed information (“Material”) for the purpose of soliciting offers to purchase from interested parties. More detailed financial, title and tenant lease information may be made available upon request following the mutual execution of a letter of intent or contract to purchase between the Seller and a prospective purchaser. You are invited to review this opportunity and make an offer to purchase based upon your analysis. If your offer results in the Seller choosing to open negotiations with you, you will be asked to provide financial references. The eventual purchaser will be chosen based upon an assessment of price, terms, ability to close the transaction and such other matters as the Seller deems appropriate.

The Material is intended solely for the purpose of soliciting expressions of interest from qualified investors for the acquisition of the Property. The Material is not to be copied and/or used for any other purpose or made available to any other person without the express written consent of Broker or Seller. The Material does not purport to be all-inclusive or to contain all of the information that a prospective buyer may require. The information contained in the Material has been obtained from the Seller and other sources and has not been verified by the Seller or its affiliates. The pro forma is delivered only as an accommodation and neither the Seller, Broker, nor any of their respective affiliates, agents, representatives, employees, parents, subsidiaries, members, managers, partners, shareholders, directors, or officers, makes any representation or warranty regarding such pro forma. Purchaser must make its own investigation of the Property and any existing or available financing, and must independently confirm the accuracy of the projections contained in the pro forma.

Seller reserves the right, for any reason, to withdraw the Property from the market. Seller has no obligation, express or implied, to accept any offer. Further, Seller has no obligation to sell the Property unless and until the Seller executes and delivers a signed agreement of purchase and sale on terms acceptable to the Seller, in its sole discretion. By submitting an offer, a purchaser will be deemed to have acknowledged the foregoing and agreed to release Seller and Broker from any liability with respect thereto.

Property walk-throughs are to be conducted by appointment only. Contact Broker for additional information.

Disclaimer

Table of Contents

PRoPERTY INFoRMATIoN 1FINANCIAL ANALYSIS 3RENT RoLL 5TENANT INFoRMATIoN 6SITE PLAN 7AERIALS 8ABouT ThE AREA 12DEMogRAPhICS 14

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1

Property Information

The InvestmentThe subject property is a retail development that is 100% leased to national tenants, Panera Bread and Noodles & Company. The property benefits from two new 10-year leases, a drive-thru component, and being located in a highly desirable retail location outparcel to the Chico Mall. Chico Mall is the only enclosed regional mall within a 45-mile radius. With excellent arterial exposure along East 20th Street and convenient accessibility from State highway 99 (70,000 AADT), this is a well located net leased investment in an established retail corridor near Chico State university. With this asset, an investor will capitalize on both real estate appreciation and scheduled increases in income.

Property Highlights

• New 10-Year Net Leases to National Credit Tenants

• 10% Rental Escalations Every Five Years

• Brand New Construction

• Drive-Thru Component for Panera Bread

• outparcel to Chico Mall

• Chico Mall is the only Enclosed Regional Mall within a 45 Mile Radius

• Located in Dense Retail Corridor

• Convenient Access from State highway 99 (70,000 AADT)

• Near Chico State university

Progress Photo (Week Ending September 26, 2015)

Property Information

2

LocationThe property is located at 1910 East 20th Street in Chico, California.

Lot SizeApproximately 0.91 acres, or 40,000 square feet.

ImprovementsConstruction completed in September 2015 of an approximately 7,600 square foot retail building demised into an approximately 4,700 square foot suite for Panera Bread with a drive-thru component and an approximately 2,900 square foot suite for Noodles & Company. There is ample parking on site.

LeasesLeased to Panera, LLC for 10 years from an anticipated rent commencement date in January 2016 at an initial annual rent of $197,400. Panera Bread has three additional five year options. The annual rent increases by 10% every five years throughout the initial term and option periods. The lease is net, with the tenant responsible for its pro-rata share of taxes, insurance, and common area maintenance. The tenant is not responsible for capital expenditures related to the structure and foundation. The tenant is also responsible for a 15% administrative fee on common area expenses, excluding insurance and taxes.

Panera, LLC is assigning its interest under the lease to Flynn Restaurant Group. Flynn Restaurant group is acquiring the rights to those Panera Bread locations from Sacramento north to the oregon border. Panera, LLC shall not be released from its obligations to pay rental and other amounts provided for under the lease and convenant against further assignment or other transfer or subletting.

Leased to Noodles & Company for 10 years from an anticipated rent commencement date in January 2016 at an initial annual rent of $110,200. Noodles & Company has two five-year options to renew the lease. The annual rent increases by 10% every five years throughout the initial term and option periods. The lease is net with the tenant responsible for its pro-rata share of taxes, insurance, and common area maintenance. The tenant is not responsible for capital expenditures related to the roof, structure and foundation, except as follows - tenant is not responsible for the replacement of the roof that occurs during the initial term or more frequently than once every 10 years. The tenant is also responsible for a 10% administrative fee on common area expenses, excluding insurance and taxes.

Progress Photo (Week Ending September 26, 2015)

3

Financial Analysis | Pricing

Projected Gross Revenue

Year 1 Year 6

Schedule Base Rental Revenue $307,600 $338,360

Annual Expenses

Common Area Maintenance - $2.30 $17,480 $20,264

Insurance - $1.09 $8,284 $9,603

Taxes @ 1.1% $71,182 $78,591

Management @ 15% of CAM $2,622 $3,040

Total operating Expenses $99,568 $111,498 Price: $6,472,000 (4.75% CAP Rate)

Net Operating Income

$307,379 $338,102

CAP Rate

4.75% 5.22%

Note: The above net income is an estimate and does not provide for all potential costs and expenses (i.e. maintenance, repair, etc.) that may be required of the owner. Any reserves set forth herein are merely estimates and not based on any experience, physical inspection, or prior knowledge. All prospective purchasers are strongly advised to make an independent investigation to determine their estimate of costs and expenses prior to entering into an agreement to purchase.

FinancingThe property will be delivered free and clear of permanent financing.

Expense Reimbursement Revenue

Common Area Maintenance - $2.30 $17,480 $20,264

Insurance - $1.09 $8,284 $9,603

Taxes @ 1.1% $71,183 $78,591

Management $2,400 $2,782

Total Reimbursement Revenue $99,347 $121,817

Total Potential gross Revenue $406,947 $449,600

Effective gross Revenue $406,947 $449,600

Progress Photo (Week Ending September 26, 2015)

4

Financial Analysis | Cash Flow ProjectionPanera Bread and Noodles & CompanyCash Flow ProjectionNewmark Cornish & Carey

Year: 1 2 3 4 5 6 7 8 9 10 11Begins: Jan-2016 Jan-2017 Jan-2018 Jan-2019 Jan-2020 Jan-2021 Jan-2022 Jan-2023 Jan-2024 Jan-2025 Jan-2026

Ends: Dec-2016 Dec-2017 Dec-2018 Dec-2019 Dec-2020 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025 Dec-2026STATISTICS Net Rentable Area in SF 7,600 - - - - - - - - - - Avg Base Rental Revenue PSF/mo. $3.37 $3.37 $3.37 $3.37 $3.37 $3.71 $3.71 $3.71 $3.71 $3.71 $4.08 Total Operating Expenses PSF/yr. $13.10 $13.40 $13.71 $14.02 $14.34 $14.67 $15.01 $15.35 $15.71 $16.07 $16.44

Potential Gross RevenueBase Rental Revenue $307,600 $307,600 $307,600 $307,600 $307,600 $338,360 $338,360 $338,360 $338,360 $338,360 $372,196

Scheduled Base Rental Revenue 307,600 307,600 307,600 307,600 307,600 338,360 338,360 338,360 338,360 338,360 372,196

Expense Reimbursement Revenue CAM - $2.30 17,480 18,004 18,544 19,100 19,674 20,264 20,872 21,498 22,143 22,808 23,492 Insurance - $1.09 8,284 8,533 8,789 9,052 9,324 9,603 9,891 10,189 10,494 10,808 11,133 Taxes @ 1.1% 71,183 72,606 74,058 75,539 77,050 78,591 80,162 81,766 83,401 85,070 86,771 Management 2,400 2,471 2,545 2,622 2,701 2,782 2,865 2,951 3,040 3,131 3,225

Total Reimbursement Revenue 99,347 101,614 103,936 106,313 108,749 111,240 113,790 116,404 119,078 121,817 124,621

Total Potential Gross Revenue 406,947 409,214 411,536 413,913 416,349 449,600 452,150 454,764 457,438 460,177 496,817

Effective Gross Revenue 406,947 409,214 411,536 413,913 416,349 449,600 452,150 454,764 457,438 460,177 496,817

Operating ExpensesCAM - $2.30 17,480 18,004 18,545 19,101 19,674 20,264 20,872 21,498 22,143 22,807 23,492Insurance - $1.09 8,284 8,533 8,788 9,052 9,324 9,603 9,892 10,188 10,494 10,809 11,133Taxes @ 1.1% 71,182 72,606 74,058 75,539 77,050 78,591 80,163 81,766 83,401 85,069 86,771Management @ 15% of CAM 2,622 2,701 2,782 2,865 2,951 3,040 3,131 3,225 3,321 3,421 3,524

Total Operating Expenses 99,568 101,844 104,173 106,557 108,999 111,498 114,058 116,677 119,359 122,106 124,920

NET OPERATING INCOME 307,379 307,370 307,363 307,356 307,350 338,102 338,092 338,087 338,079 338,071 371,897

Printed 9/29/2015 at 12:45 PM

5

Rent Roll

Tenant Sq. Ft.Monthly

Rent PSF

Annual Rent PSF

Annual Rent Term

Rent Commence.

Date

Lease Expiration

Date

Rental Increase Date(s)

Rental Increase

Amount(s)Options End-of-Term

AssumptionsLease

Structure

Panera Bread

4,700 $3.50 $42.00 $197,400 10 yrs. 1/1/2016 12/31/2025 1/1/2021 $217,140

3 @ 5 yrs. opt. 1: $238,854 opt. 2: $262,730 opt. 3: $289,003

optionNNN + 15%

admin. fee on CAM

Noodles & Company

2,900 $3.17 $38.00 $110,200 10 yrs. 1/1/2016 12/31/2025 1/1/2021 $121,2202 @ 5 yrs.

opt. 1: $133,342 opt. 2: $146,653

optionNNN + 10%

admin. fee on CAM

Leased 7,600 100.00%

Vacant 0 0.00%

TOTAL 7,600 100.00%

General Assumptions

General Assumptions

Analysis Date Jan-15

Total Rentable Area 7,600

Total Area for CAM Reimbursement 7,600

general Inflation per Annum 3.00%

general Expense growth per Annum 3.00%

Real Estate Tax growth per Annum 2.00%

Management Fee 15% of CAM

general Vacancy Loss None

Flynn Restaurant Group, the assignee under the lease, is one of the 50 largest food service companies in the united States, with over 666 restaurants and $1.4 billion in annual sales. The company owns and operates 481 Applebee’s restaurants and 185 Taco Bell and associated YuM! Brands restaurants. The company employs 36,000 people across 28 states.

For more information, visit www.flynnrestaurantgroup.com

Noodles & Company is a fast casual restaurant that offers international and American noodle dishes, as well as soups, salads, pasta and sandwiches. headquartered in Broomfield, Colorado, Noodles & Company was founded in

1995 by Aaron Kennedy as what was a simple concept and now has grown from $300,000 in revenues in 1996 to $403.7 million in 2014. Noodles & Company went public in 2013 and is traded on the NASDAQ under the ticker “NDLS”. Within a day following Noodles & Company’s IPo on June 27, the stock price doubled. Fast Company and The Daily Beast called it “the hottest IPo of the year” and compared it to Chipotle’s IPo. As of September 25, 2015, the stock is trading at $14.74 per share with a Market Cap of $418.17 million. The number of Noodles & Company locations grew three-fold from the beginning of the financial crisis of 2007 to 2013, reaching 339 locations. As of July 1, 2014, the company had 410 locations, including franchises, in 31 states.

For the recent quarter ended June 30, 2015, Noodles & Company reported total revenue of $115.23 million and net income of $3.06 million, with a total stockholder equity of $140.12 million.

For more information, visit www.noodles.com.

Tenant Information

6

Panera Bread Company owns, operates, and franchises retail bakery-cafes in the united States and Canada. Panera Bread Company is traded on the NASDAQ under the ticker “PNRA” with a Market Cap of $5.21 Billion at trading at $193 per share

as of September 25, 2015. The company operates through three segments: Bakery-Cafe operations, Franchise operations, and Fresh Dough and other Product operations. The operates bakery-cafes under the Panera Bread, Saint Louis Bread Co., and Paradise Bakery & Café names that offer fresh baked goods, made-to-order sandwiches, soups, salads, pasta dishes, custom roasted coffees, and other complementary products through on premise sales, as well as provides catering services. The company also supplies fresh dough, produce, tuna, cream cheese, and proprietary sweet goods items. As of December 30, 2014, the company operated 1,880 company-owned and franchise-operated bakery-cafe locations in 45 states, the District of Columbia, and ontario. As of December 30, 2014, there were 21 Company-owned and one franchised operated delivery hubs with an additional 11 locations expected to open by year-end 2015. Panera Bread serves nearly 7.8 million customers per week system-wide. Panera Bread is continuing to expand nationwide with 105-115 cafes slated to open in 2015. The company was formerly known as Au Bon Pain Co., Inc. and changed its name to Panera Bread Company in August 1998. Panera Bread Company was founded in 1981 and is headquartered in St. Louis, Missouri. As of 2014 year end, Panera Bread Company had total revenue of $2.53 Billion for both corporate and franchisee operated stores.

For the recent quarter ended June 30, 2015, Panera Bread Company reported total revenue of $676.66 million and net income of $41.93 million, with a total stockholder equity of $736.18 million.

Panera, LLC, the entity behind the lease, operates as a subsidiary of Panera Bread Company.

For more information, please visit www.panerabread.com.

7

DRIVETHRU

EAST 20TH STREET

HIGHWAY 99 ON RAM

P

4,698 SF

2,902 SF

Site Plan

CHICO MALL

E 20th St (20,931 A

ADT)

ON RAMP

OFF RAMP

Aerial | Close-Up View

CHICO MALL

CHICO CROSSROADS

E 20th St (20,931 AADT)

Fore

st A

ve (1

3,75

0 AADT)

/ (70,00

0 A

AD

T)

ChicoMunicipalAirport

ChicoMunicipalAirport

Pleasant ValleyHigh School

Pleasant ValleyHigh School

Bidwell JuniorHigh School

Bidwell JuniorHigh School

ChicoCommunity

Park

ChicoCommunity

Park

California StateUniversity

Chico

California StateUniversity

Chico

Aerial | Northwest View

CHICO MALL

CHICO CROSSROADS

E 20

th S

t (20

,931

AA

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)

Forest Ave (13,750 AADT)

/ (70,000 AADT)

ChicoCommunity

Park

ChicoCommunity

Park

California StateUniversity

Chico

California StateUniversity

Chico

DOWNTOWNDOWNTOWN

Aerial | West View

CHICO MALL

CHICO CROSSROADS

E 20th St (20,931 AADT)

Fore

st A

ve (1

3,75

0 AADT

)

/ (70,000 AADT)

Aerial | South View

General OverviewChico is the most populous city in Butte County, with a population of 88,077 as of 2013. The Chico Metropolitan Area (MSA) encompasses a population of nearly 212,000 and nearby cities included in the MSA are Paradise and oroville. As a rich cultural, economic, and educational center of the northern Sacramento Valley, the population of Chico has grown by 46% since 2000. The city also provides for excellent outdoor recreational activities due to the Sierra Nevada mountains lying to the east and the presence of Bidwell Park, one of the country’s 25 largest municipal parks.

California State university – Chico is the main driver of the local economy. Education, health and social services industries are the top employing sectors in the city followed closely by retail trade. In the past few decades, retail trade has had a growing presence in Chico. The city has developed into becoming a regional retail shopping destination, with many national retailers flocking to open stores in Chico, including Target, Kohl’s, Forever 21, Best Buy, and Walmart.

About the Area

About the Area Site InformationThe subject property is situated along East 20th Street (20,931 AADT) outparcel to the Chico Mall within a dense retail corridor approximately three miles east of downtown Chico. Conveniently accessible from State highway 99 (70,000 AADT), the property is accessible via the East 20th Street exit for both southbound and northbound travelers. The property benefits from its location outparcel to Chico Mall – the flagship retail shopping destination in the area. Chico Mall is a 528,397 square foot regional mall that was developed in 1988. It features over 70 stores and services and is anchored by Forever 21, J.C. Penney, Sears and Dick’s Sporting goods. The mall underwent a floor to ceiling renovation in 2012 that significantly bettered the aesthetic of the property. other outparcel pads are tenanted by Chipotle, Taco Bell, Chili’s, and Carl’s Jr. Adjacent east of Chico Mall across Forest Avenue is WinCo Foods and the offices for unitedhealth group, which is one of the largest employers in Chico.

Directly across from the subject property is a shopping center anchored by Target, Big Lots, and Toys “R” us. Pier 1 Imports, AT&T, Jack in the Box, olive garden and Red Lobster occupy the pad sites on the periphery of the center. Adjacent to the south of here along State highway 99 is Walmart with In-N-out Burger and Krispy Kreme outparcels. Southwest of the subject property across State highway 99 is Chico Crossroads, a 264,335 square foot regional power center anchored by Food Maxx Supermarket, Evan’s Furniture and Bed Bath & Beyond. Costco occupies the parcel across Chico Crossroads. West of the subject property at the southwest intersection of East 20th Street and Forest Avenue is Pheasant Run Shopping Center, which is anchored by Best Buy, Staples and old Navy. other national credit tenants within the center include Starbucks, Aaron Brothers and Famous Footwear.

In addition to the abundance of retail in the immediate area, California State university – Chico is in close proximity to the subject property. Springfield Manor is also nearby and is a gated community for those over the age of 55 and is recognized as one of the finest senior parks in Northern California. California State university – Chico is the second oldest campus in the 23-campus California State university system and has approximately 17,300 students enrolled. The university is one of the leading drivers of the local economy.

Demographics

1 Mile 3 Miles 5 Miles

Population Summary

2010 Total Population 10,675 61,791 96,426

2015 Total Population 10,774 62,816 98,122

2020Total Population 10,903 63,677 99,796

2015-2020 Annual Rate 0.24% 0.27% 0.34%

Average Household Income

2015 $52,885 $56,118 $59,304

2020 $59,651 $63,827 $67,741

Median Home Value

2015 $241,016 $274,701 $277,809

2020 $247,348 $289,083 $293,856

Top Employers in Chico, CA # of Employees

California State - Chico 1,000-4,999

Enloe Medical Center 1,000-4,999

Lifetouch 500-999

YRC 500-999

Build.com 250-499

Butte County Behavioral health 250-499

Butte Community Insurance Agency 250-499

National heritage Insurance Company 250-499

united healthcare 250-499

14

Michael MaffiaSenior Managing Director 415.445.5144mmaffia@newmarkccarey.comCA RE License #01340853

Putnam DailyVice President 415.445.5107pdaily@newmarkccarey.comCA RE License #01750064901 Mariners Island Boulevard, Suite 120

San Mateo, CA 94404www.maffiateam.com