O F F E R I N G M E M O R A N D U M

20 Year NNN Ground LeaseTenant Extended by 10 More Years

Islands Restaurants

F O O T H I L L R A N C H C A L I F O R N I A

Actual Site Photo

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8

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Avalon

Avenal

Boron

California City

Calipatria

Cambria

Earlimart

Gonzales

Greenfield

Huron

Lake Isabella

Mission Hills

Mojave

Needles

Pixley

Rosamond

Searles Valley

Tehachapi

Wofford Heights

Woodlake

Wrightwood

Arvin

Blythe

Desert Hot Springs

King City

Lamont

McFarland

Morro Bay

Soledad

Vandenberg AFB

Bagdad

Parker

Kingman

Boulder City

Exeter

Lancaster

Lompoc

Monterey

Palm Springs

Poway

San Luis Obispo

Santa Cruz

Santa Maria

Visalia

Vista

Arroyo Grande

Atascadero

Barstow

Big Bear

Brawley

Calexico

Delano

El Centro

Encinitas

Fallbrook

Hanford

Hesperia

Hollister

Indio

Marina

Palm Desert

Palmdale

Porterville

Reedley

Ridgecrest

Sanger

Selma

Solana Beach

Tulare

Victorville

Watsonville

Yucaipa

Lake Forest

Bullhead City

Lake Havasu City

Yuma

Henderson

Winchester

RosaritoSan Luis

Bakersfield

Oxnard

Riverside

San BernardinoBurbank

Chula Vista

Costa Mesa

El Cajon

Escondido

La Mesa

Mission ViejoNewport Beach

Oceanside

Pomona

Redondo Beach

Salinas

Santa BarbaraSimi Valley

Whittier

Las Vegas

Paradise

Anaheim

Fresno

Long Beach

Los Angeles

San Diego

Santa Ana

Mexicali

Arizona

CALIFORNIA

Mexico

CONFIDENTIALITY AND DISCLAIMERThe 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 NOTICEMarcus & Millichap Real Estate Investment Services, Inc. (“M&M”) 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 M&M, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of M&M, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

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 YOURMARCUS & MILLICHAP AGENT FOR MORE DETAILS.

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Avalon

Avenal

Boron

California City

Calipatria

Cambria

Earlimart

Gonzales

Greenfield

Huron

Lake Isabella

Mission Hills

Mojave

Needles

Pixley

Rosamond

Searles Valley

Tehachapi

Wofford Heights

Woodlake

Wrightwood

Arvin

Blythe

Desert Hot Springs

King City

Lamont

McFarland

Morro Bay

Soledad

Vandenberg AFB

Bagdad

Parker

Kingman

Boulder City

Exeter

Lancaster

Lompoc

Monterey

Palm Springs

Poway

San Luis Obispo

Santa Cruz

Santa Maria

Visalia

Vista

Arroyo Grande

Atascadero

Barstow

Big Bear

Brawley

Calexico

Delano

El Centro

Encinitas

Fallbrook

Hanford

Hesperia

Hollister

Indio

Marina

Palm Desert

Palmdale

Porterville

Reedley

Ridgecrest

Sanger

Selma

Solana Beach

Tulare

Victorville

Watsonville

Yucaipa

Lake Forest

Bullhead City

Lake Havasu City

Yuma

Henderson

Winchester

RosaritoSan Luis

Bakersfield

Oxnard

Riverside

San BernardinoBurbank

Chula Vista

Costa Mesa

El Cajon

Escondido

La Mesa

Mission ViejoNewport Beach

Oceanside

Pomona

Redondo Beach

Salinas

Santa BarbaraSimi Valley

Whittier

Las Vegas

Paradise

Anaheim

Fresno

Long Beach

Los Angeles

San Diego

Santa Ana

Mexicali

Arizona

CALIFORNIA

Mexico

Investment Summary .........................................1

Investment Highlights.........................................2

Aerial Map .........................................................3

Site Plan ............................................................6

Tenant Summary ................................................9

Location Summary ...........................................11

Demographics ..................................................13

Contact Information .........................................15

TABLE OF CONTENTS

1

O V E R V I E W

Price $3,825,000

Gross Leasable Area (GLA) 5,200 SF

Lot Size (approx) 1.10 Acres

Net Operating Income* $153,000

CAP Rate 4.00%

L E A S E A B S T R A C T

Lease Type NNN Ground Lease

Original Lease Term 20 Years

Lease Start 1/1/1998

Lease Extension 12/18/2017

Lease Expiration 12/28/2028

Renewal Options 2 Five-Year Options

Increases Annual Bumps (See Side Bar)

Roof & Structure Tenant Responsible

A N N U A L I Z E D O P E R AT I N G D ATA

Current $125,194

12/2018-2019 $153,000

12/2019-2020 $155,295

12/2020-2021 $157,624

12/2021-2023 $162,353

12/2023-2028 $174,529

Option 1 $187,619

Option 2 $201,690

26582 TOWNE CENTRE DRIVE, FOOTHILL RANCH, CA 92610

PRICE: $3,825,000 CAP: 4.00% RENT: $153,000

INVESTMENT SUMMARY

* Priced on future rents. Seller to credit buyer differential upon COE.

Tenant’s long term commitment to the Property is highlighted by their agreement to extend the lease term early by 10 years with a 23% rent increase, annual rent increases for the first 4 years, and no landlord concessions.

2

INVESTMENT HIGHLIGHTS• NNNGroundLeasewith10yearsremaining.• Nolandlordresponsibilities.• Buyerbenefitsfromadvancedrents.Pricedon

December2018rentbump.• Annualescalationshedgeagainstinflation.• FastgrowingFoothillRanchCommunitywith360,000SF

plannedoutretailspacewithinthenext5years.• Thesiteisanoutpadtoa1.2(mil)squarefoot

shoppingcenter.• Communityseasonedwith20yearpresence.• Tenant’slongtermcommitmenttothePropertyis

highlightedbytheiragreementtoextendtheleasetermearlyby10yearswitha23%rentincrease,annualrentincreasesforthefirst4years,andnolandlordconcessions.

10,100 VPD18,000 VPD

132,893 TOTAL POPULATION WITHIN 5-MILE RADIUS

$140,863AVERAGE HOUSEHOLD INCOME

- TOWNE CENTRE DR

- ALTON PARKWAY

Actual Site Photo

HIGHWAY 241 - FOOTHILL TRANSPORTATION CORRIDOR - 36,200 VPD

PORTOLA PKWY - 14,900 VPDHIGHW

AY 241 - FOOTHILL TRANSPORTATION CORRIDOR - 36,200 VPD3

®

BURGER

R

Light Industrial Park including:OAKLEY,FUJITSU,KAWASAKIMOTORS,MERCEDES-BENZ,TAETECHNOLOGIES,

OLEUMTECH,SENGENCE,EWIWORLDWIDE

4

Actual Site Photo5

6

TOW

NE CENTRE DRIVE

ENTERTAINMENT

SITE PLAN

Actual Site Photo7

FOOTHILL RANCH TOWNE CENTRE

1,000,000SFofRetail

8

9

ISLANDS FINE BURGERS & DRINKS“IslandsFineBurgers&Drinks” (alsoknownasIslands) isaprivatelyheldcasual,dining restaurantchain thatspecializes inburgers, freshcutfries,andspecialtydrinks.Theirtropical-themedrestaurantbringsin the “Ohana” (family) feel to the restaurant’s environment. Despitebeing known for their burgers and fries, various other types of foodare also offered, such as tacos, chicken sandwiches, and multipleentree salads. Islands does not franchise their locations. All storesarecorporateoperated.Therearecurrently50locationsinCalifornia,Arizona,NevadaandHawaii.

ABOUT THE OWNERWhenIslandsfounderTonyDeGraziersteppedoffthebeachesofOahuafter adayof surfingwithhisNavybuddies in theearly60s,hedidwhatcamenaturallytohim.Hewentsearchingforajuicyburger,ahotbasketoffries&acolddrink.Twentyyears later, in1982, itwasthatsenseofplace&satisfactionhewastryingtorecreatewhenhetookalittlechunkoftheislands&ploppeditdownrightinthemainlandofSouthernCalifornia.

Today, Islandsstill is true toTony’soriginal experience&hisoriginalvision.Andthoughourmenuhasgrowntoincludesalads,soups&softtacos,westilladheretothebasicphilosophythatfreshfood,friendlyservice&alaidbackatmosphereistheperfectendtoaharddayofworkorplay.Wehopeyoutasteitineverybite.Andwehopethatwhetheryou’reahungrysurferorbusysalesperson,youwalkintoIslands&saytoyourself,likeTonydidthosemanyyearsago,“Ahh...ThisistheplaceIwanttobe.”

TENANT SUMMARY

CARLSBAD, CAHEADQUARTERS

OWNERSHIP INDUSTRY

LOCATIONSFOUNDED

CASUAL DINING

50+1982

PRIVATE

CEO

TONY DeGRAZIER

PRESIDENT

MIKESMITH

ISLANDS RESTAURANTS

Actual Site Photo 10

11

Anaheim�Stadium

Disneyland

Knotts�Berry Farm

Dad�Miller GC

Imperial�GC

Coyote�Hills GC

Los Coyotes�CC CA State�

UnivYorba Linda GCAlta�

Vista GCCountry Club�Vista Park

Anaheim�Hills GC

Cypress GC

Naval�Base GC

Old�Ranch GC

River�View GC

Willowick�Mun GC

David L�Baker GC

Mile Square GC

Meadowlark�GC

Mesa�Verde GC

Huntington�Seacliff CC

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CC Casta Del�Sol GC

Newport�Beach CC

Tijeras�Creek GC

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Mission�Viejo GC

Marbella�CC

El Niguel CCAliso�

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San Juan Hills GC

The Links at�Monarch Beach

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Tustin Marine�Corps Air�

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Los Alamito�Reserve Center

Camp Pendleton�Marine Corps Base

Bolsa Chica�State Beach

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LOCATION HIGHLIGHTS

Growing by 680,000 SF Retail

Space within 5 years

Seasoned LocationOpen Since 1998

10,100 Vehicles Per Dayon Towne Centre Drive

Foothill Ranch one of the most

luxurious destinations in Orange County

FOOTHILL RANCH, CAORANGE COUNTY

M A J O R E M P L O Y E R S : 2 0 1 6F O O T H I L L R A N C H

Oakley 4,018

Panasonic Avionics 1,200

Loan Depot 1,181

Invensys 1,126

Apri Healthcare 775

Spectrum 385

Brandsmart U.S.A. 346

HEICO Corporation 297

FirstServices Residential 275

Sheridan Technical Center 251

26 Miles to Newport Beach

9 Miles to IrvineFoothillRanch

FoothillRanchwasincorporatedintoLakeForest,Californiain2000.ItisnotableforbeinghometoOakley,Inc.,COXCommunications,Nike, Kaiser Aluminum and Kawasaki. ProBoards and VikingTechnologyarealsoheadquarteredthere.

FoothillRanchisknownforaffluent“outdoorsy”executiveliving.Most of the entire regionwas constructed after 1999,making ahigherproportionofallhomes,newhomes.

Over68%ofallresidentshaveacollegedegree,andthemajorityofcarsdriveninandaroundtheregionareconsideredluxuryautomobiles.

Themajorityofoccupationsareexecutiveand/ormanagerialorintheserviceindustry.

SurroundedbythefoothillsofSilveradoandModjeskaCanyonandnestledagainsttheaffluentIrvinesuburb,FoothillRanchisoneofthemostluxuriousandpleasantplacestoliveinOrangeCounty.

FOOTHILL RANCH, CA

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3 - M I L E R A D I U S

188,823Total Population Within 5-Mile Radius

$128,319Average Household Income

Within 5-Mile Radius

83%Home Ownership

Within 5-Mile Radius

6 5,223Total Households Within

5-Mile Radius

13.48% From 2000

DEMOGRAPHICS / FOOTHILL RANCH, CA

Actual Site Photo13

Actual Site Photo

Actual Site Photo 14

F O O T H I L L R A N C H C A L I F O R N I A

Actual Site Photo

LIOR REGENSTREIFSENIOR MANAGING DIRECTOR INVESTMENTS

SENIOR DIRECTOR, NET LEASED PROPERTIES GROUPENCINO OFFICE

Tel: (818) 212-2730Fax: (818) 212-2710

Lior.Regenstreif@marcusmillichap.comLicense: CA 01267761