INDUSTRIAL PARK

Executive Summary | November 2018

THE OFFERINGNKF Capital Markets Private Capital Group is pleased to present the opportunity to acquire the fee-simple interest in Sylmar Industrial Park (the “Property” or “Project”), a 140,840-square-foot, two-building industrial/R&D campus located in Sylmar, California. Developed on approximately 6.48 acres of land on San Fernando Rd., the Project features a paved gated yard and highly functional buildings with 8 loading doors, 18’ clearance, 2.28/1,000 SF parking and 600-2,000 amps of 277/480 volt power.

The Project is 100% leased to a quality R&D tenant base that includes Quallion, Second Sight Medical and OD International which occupy 99% of the rentable space and provide a high level of credit to the rent roll.

The Project benefits from a superb location in the Northeast San Fernando Valley with extremely low vacancy and a rapidly improving industrial market. Investors stand to benefit from upside provided by an appreciating asset class in a tight submarket, marking rents to market on near term lease expirations and residual pricing flexibility with the ability to sell the buildings separately given the existing individual tax parcels.

LOCATION 12744 San Fernando Road Sylmar, CA

MARKET/SUBMARKET Los Angeles/East San Fernando Valley

TOTAL RENTABLE AREA: Total: 140,840 SFBuilding 3: 117,089 SFBuilding 4: 23,751 SF

LAND AREA 6.48 acres

BUILDING FAR 50%

CONSTRUCTION TYPE Concrete tilt-up

ZONING M2-1 (Light Industrial)

CLEAR HEIGHT 18 feet

SPRINKLER 6” wet-type

LOADING DOORS 8 grade level

YEAR BUILT/RENOVATED 1964/2013

PARKING 321 spaces (2.28/1,000 SF)

PROPERTY FACTS

2 SYLMAR INDUSTRIAL PARK

INVESTMENT HIGHLIGHTSHIGHLY IMPROVED INDUSTRIAL PARK LOCATED IN SOUTHERN CALIFORNIA’S INNOVATION HUB

Sylmar Industrial Park features highly-improved tenant buildouts that are well-located in the San Fernando Valley, a leading center of innovation for the industries of technology, life sciences, medical research, and global health. The project serves as the headquarters for both Quallion and Second Sight Medical, which have invested significant capital into their spaces creating a very high probability of renewal.

SUPERB MARKET FUNDAMENTALS

Sylmar Industrial Park is located within the Northeast San Fernando Valley, one of the top industrial submarkets in Los Angeles. The submarket is currently operating at a 0.3% vacancy rate and rents have increased 26% over the past two years with no signs of slowing down.

STABLE CASH FLOW WITH UPSIDE POTENTIAL

With in-place rents 21% below market and 66% of the tenants rolling by 2020, new ownership will have the opportunity to mark rents to market in one of the highest performing industrial submarkets of Los Angeles.

STRONG CREDIT TENANCY

The Project’s largest tenants include Quallion (52% NRA) and Second Sight Medical (35% NRA) which have both utilized the Project as their headquarters since 2003. Founded in 1998, Quallion is one of the largest manufacturers of customized lithium ion batteries in the United States and was acquired by EnerSys in 2013. EnerSys (NYSE: ENS), the largest industrial battery manufacturer in the world, has a market cap of 3.48 billion with a credit rating of Ba1 (Moody’s). Founded in 1998, Second Sight Medical is a medical device company that manufactures FDA and European-approved implantable visual prosthetics to restore eyesight to the blind.

DISCOUNT TO REPLACEMENT COST

The Property is being offered well below replacement cost. High construction costs, coupled with a lack of available entitled land, have created significant barriers to competitive development.

PRICE $19,500,000

PRICE PER RENTABLE SF $138

YEAR 1 NOI $1,222,053

YEAR 1 CAP RATE 6.3%

OCCUPANCY 100%

TENANTS Quallion, Second Sight Medical and OD International

WEIGHTED AVG LEASE TERM 2.10 years

RENTS 21% below market

OFFERING SUMMARY

SYLMAR INDUSTRIAL PARK 3

INDUSTRIAL PARK

Corporate License #01355491

INDUSTRIAL CONTACTS

BRET HARDYExecutive Managing DirectorT +1 213 596 2219bret.hardy@ngkf.comCA RE Lic #01240548

SHIN KIMSenior Managing DirectorT +1 949 608 2063shin.kim@ngkf.comCA RE #01820579

DEBT CONTACTS

DAVID MILESTONEExecutive Managing DirectorT +1 310 491 2015david.milestone@ngkf.comCA RE Lic #01515842

BRETT GREENManaging DirectorT +1 310 491 2009brett.green@ngkf.comCA RE Lic #01892016

MICHAEL MATCHETTAssociate Director+1 310 491 2072michael.matchett@ngkf.comCA RE Lic #01960206

INVESTMENT SALES CONTACTS

PRIVATE CAPITAL CONTACTS

SEAN FULPExecutive Managing Director+1 310 407 6596sfulp@ngkf.comCA RE Lic #01389064

RYAN PLUMMERManaging Director+1 310 407 6570ryan.plummer@ngkf.comCA RE Lic #01765854

MARK SCHUESSLERAssociate DirectorT 310.201.2075mark.schuessler@ngkf.comCA RE Lic ##02033871

INSTITUTIONAL GROUP

KEVIN SHANNONCo-Head, U.S. Capital MarketsT +1 310 491 2005kevin.shannon@ngkf.comCA RE Lic #00836549

KEN WHITEExecutive Managing DirectorT +1 310 491 2006ken.white@ngkf.comCA RE Lic #01788506

LOCAL MARKET CONTACT

DOUG SONDEREGGERExecutive Vice PresidentT +1 818 618 4607doug.sonderegger@cbre.comCA RE #00827505

November 2018

The broker for a purchaser of the property shall be entitled to receive a real estate commission only in the event that broker and the property’s owner execute a written commission Corporate License #01355491 agreement containing the manner of calculation of that commission and all conditions to its payment, and the satisfaction of those conditions. Absent a written agreement to the contrary between that broker and NKF Capital Markets, that broker shall not look to NKF Capital Markets for payment of such a commission or any other compensation.

Although all information furnished regarding property for sale, lease, or financing has been obtained from sources deemed to be reliable, that information has not been verified by NKF Capital Markets and no express representation is made nor is any to be implied as to the accuracy thereof. That information is subject to errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice and to any special conditions imposed by NKF Capital Markets’ client.