offering memorandum perris crossing case rd pad b perris...net leased investment group exclusively...

Net Leased Investment Group

Exclusively Offered by:

Chuck Klein858.546.5473 [email protected] Lic. 01522766

Kevin Held858.546.5428 [email protected] Lic. 01240358

Perris Crossing3150 Case Road, Perris, California 92570

OFFERING MEMORANDUM

Information contained herein has been obtained from sources that we deem reliable. We have no reason to doubt its accuracy, but we do not guarantee it. B

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Disclaimer

Cassidy Turley BRE Commercial (hereinafter “CT”) has been retained as the exclusive advisor and broker regarding the sale of Pad B within the Perris Crossing Shopping Center property located in Perris, California (the “Property”).

This Offering Memorandum has been prepared by CT for use by a limited number of parties and does not purport to provide a necessarily 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 investors may need or desire. All projections have been developed by CT, the Owner, and designated sources and are based upon assumptions relating to the general economy, competition, and other factors beyond the control of the Owner and, therefore, are subject to variation. No representation is made by CT or Owner as to the accuracy or completeness of the information contained herein, and nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of the Property. Although the information contained herein is believed to be correct, Owner and its employees disclaim any responsibility for inaccuracies and expect prospective purchasers to exercise independent due diligence in verifying all such information. Further, CT, Owner, and its employees disclaim any and all liability for representations and warranties, expressed and implied, contained in, or for omission from, this Offering Memorandum or any other written or oral communication transmitted or made available to the recipient. This Offering Memorandum does not constitute a representation that there has been no change in the business or affairs of the Property or the Owner since the date of preparation of the package. Analysis and verification of the information contained in this package is solely the responsibility of the prospective purchaser.

Additional information and an opportunity to inspect the Property will be made available upon written request to interested and qualified prospective investors.

Owner and CT each expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers regarding the Property and/or terminate discussions with any entity at any time with or without notice. Owner shall have no legal commitment or obligation to any entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase of the Property has been fully executed, delivered, and approved by Owner and its legal counsel, and any conditions to Owner’s obligations thereunder have been satisfied or waived. CT is not authorized to make any representations or agreements on behalf of Owner.

This Offering Memorandum and the 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 are called the “Contents”), are of a confidential nature. By accepting the package, you agree (i) to hold and treat it in the strictest confidence, (ii) not to photocopy or duplicate it, (iii) not to disclose the package or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Owner or CT, (iv) not use the package or any of the contents in any fashion or manner detrimental to the interest of Owner or CT, and (v) to return it to CT immediately upon request of CT or Owner.

If you have no further interest in the Property, please return this Offering Memorandum forthwith.

4350 La Jolla Village Drive, Suite 500, San Diego, CA 92122 | 858.546.5400 | Fax: 858.630.6320www.brecommercial.com

Information contained herein has been obtained from sources that we deem reliable. We have no reason to doubt its accuracy, but we do not guarantee it. C

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Table of Contents

I EXECUTIVE SUMMARY ............................................. 1 Offering Terms Investment Highlights

II FINANCIAL ANALYSIS .............................................. 3 Annual Operating Pro Forma Rent Roll

III PROPERTY DESCRIPTION ........................................ 5 Property Photos Site Plan Map Aerial Parcel Map

IV TENANT INFORMATION ......................................... 11 Tenant Profiles

V MARKET INFORMATION ......................................... 14 Interstate 215 Competition Map Area Information Demographics

Information contained herein has been obtained from sources that we deem reliable. We have no reason to doubt its accuracy, but we do not guarantee it. 1

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Executive Summary

Location: NWQ of Interstate 215 & Ethanac Road

Perris, Riverside County, California

Address: 3150 Case Road Perris, CA 92570

Zoning: RC (Retail Commercial)

Tenants: Starbucks, Los Primos Mexican Food, Subway, Ono Hawaiian BBQ

Year Built: 2007

Rentable Square Feet: ~7,033 square feet

Total Land Area: ~1.15 acres

Percent Leased: 100% leased

Pro Forma NOI: ~$307,642

Price: $4,121,807

Cap: 7.46%

Offering Terms

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Investment Highlights

Prime Freeway Adjacent Location:Located on the NWQ of Interstate 215 and Ethanac Road with traffic counts in excess of 75,000 cars per day and excellent visibility to both Interstate 215 and 79 Freeway.

New Power Center With Strong National Co-TenancyPerris Crossing is anchored by a new Home Depot and WinCo Foods, complemented by a synergistic mix of pad and shop tenants including Bank of America, Walgreens (planned), Carl’s Jr., Del Taco, Circle K, Starbucks, and Subway.

Destination / Regional Retail Hub New retail epicenter drawing consumers from a large geographic region including both Perris and the surrounding communities.

Strong Anchor SalesAnchor tenant sales are above projections and strong, making Perris Crossing a dominant power center in the trade area. Contact Listing Broker for more details.

Credit Tenants with Corporate SignaturesStarbucks amd Subway are corporate leases.

NNN Leases with Increases / Growing Income StreamAnnual rent increases in the majority of the leases provide for a growing income stream throughout the holding period.

35 Acre Big League Dreams Sports Park - Major Regional Sports DrawThe subject property is situated across I-215 from a 35-acre “Big League Dreams” sports park, which is under construction. When completed, this facitily will include six baseball/softball fields, two indoor arena soccer fields, and two open turf fields. Four of the baseball fields are “replica” fields which are scaled down versions of major league stadiums.


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Annual Operating Pro Forma

Year Count Per RSF 1 2 3 4 5 6 7 8 9 10 11Fiscal Year Ending - May FYE 2013 FYE 2013 FYE 2014 FYE 2015 FYE 2016 FYE 2017 FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023

Occupancy Percentage 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Operating ReceiptsRental Receipts $44.23 $311,103 $323,845 $326,863 $330,742 $336,490 $344,114 $354,277 $368,176 $380,101 $386,765 $395,430Operating Disbursements Recoverie 11.09 77,994 79,928 81,914 83,952 86,044 88,187 90,388 92,642 94,956 97,331 99,773

Total Operating Receipts 55.32 389,097 403,773 408,777 414,694 422,534 432,301 444,665 460,818 475,057 484,096 495,203

Operating DisbursementsCommon Area Expenses -1.08 -7,596 -7,824 -8,058 -8,300 -8,549 -8,805 -9,070 -9,342 -9,622 -9,911 -10,208Shop Expenses -3.19 -22,435 -23,108 -23,802 -24,516 -25,251 -26,009 -26,789 -27,593 -28,420 -29,273 -30,151Commercial Liability Insurance -0.04 -281 -290 -298 -307 -317 -326 -336 -346 -356 -367 -378Shops Property Insurance -0.52 -3,657 -3,767 -3,880 -3,996 -4,116 -4,240 -4,367 -4,498 -4,633 -4,772 -4,915Management Fee -0.41 -2,884 -2,970 -3,059 -3,151 -3,245 -3,343 -3,443 -3,546 -3,653 -3,762 -3,875Property Taxes -6.34 -44,602 -45,494 -46,404 -47,332 -48,279 -49,244 -50,229 -51,234 -52,258 -53,304 -54,370

Total Operating Disbursements -11.58 -81,455 -83,453 -85,501 -87,602 -89,757 -91,967 -94,234 -96,559 -98,942 -101,389 -103,897

Net Operating Income $43.74 $307,642 $320,320 $323,276 $327,092 $332,777 $340,334 $350,431 $364,259 $376,115 $382,707 $391,306

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Rent Roll

Square % of Start End Recovery Management Rental Monthly Annual Monthly RenewalTenant Suite Feet Project Date Date Type Fee Increase Rent Rent PSF Rent PSF Options Comments

H-1 1,751 24.90% 10/22/2007 12/31/2017 $6,303.58 $43.20 $3.601/1/2013 $7,059.42 $48.38 $4.03

H-2 1,641 23.33% 10/15/2007 1/31/2018 $5,910.25 $43.22 $3.602/1/2013 $6,087.58 $44.52 $3.712/1/2014 $6,270.17 $45.85 $3.822/1/2015 $6,458.33 $47.23 $3.942/1/2016 $6,652.08 $48.64 $4.052/1/2107 $6,851.58 $50.10 $4.18

H-3 1,641 23.33% 10/22/2007 10/31/2012 $6,428.08 $47.01 $3.92

H-4 2,000 28.44% 10/15/2007 10/31/2014 $6,500.00 $39.00 $3.2511/1/2012 $7,229.17 $43.38 $3.61

Total Square Feet 7,033 100.00% Total - 6/1/2012 ######## $42.90 $3.57Occupied Square Feet 7,033 100.00%Vacant Square Feet 0 0.00%

Starbucks NNN 10% of CAM, excluding Taxes and Insurance

(2) 5-year at $7,907.25/month

and $8,855.67/month

The analysis assumes the tenant exercises their renewal options. Prop. 13

protection for any increase in Taxes resulting in sale that occurs during first

five (5) years of initial lease term. Early Termination Right effective during first six (6) months of the sixth (6th) year of

initial lease term. Per 2010 CAM Reconciliation estimate, TT's 2010

expense reimbursement cap is $6,633.84 for common area expenses

(excl. taxes & insurance).

Los Primos NNN 15% of all NNN

expenses

(1) 10-year at 3% annual increases

The analysis assumes the tenant exercises their renewal option.

Subway NNN 15% of all NNN

expenses,

(3) 5-year at FMV The analysis assumes the tenant exercises their renewal options with 4.00% annual

increases.

Ono Hawaiian NNN 15% of all NNN

(2) 5-year at FMV The analysis assumes the tenant exercises their renewal options.


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Anchor - Home Depot


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Anchor - WinCo Foods


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Subject Property - Pad B


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HAPPINESS NAILS

LOS PRIMOSMEXICAN FOOD

GARDENCENTER

Planned

MAJOR “2”

MAJOR “1”

CASE ROAD

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MAJOR “4”

Site Plan

Subject Offering

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Street Map

Copyright © 1988-2003 Microsoft Corp. and/or its suppliers. All rights reserved. http://www.microsoft.com/mappoint© Copyright 2002 by Geographic Data Technology, Inc. All rights reserved. © 2002 Navigation Technologies. All rights reserved. This data includes information taken with permission from Canadian authorities © 1991-2002 Government of Canada (Statistics Canada and/or Geomatics Canada), all rights reserved.

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CALIFORNIA GOLF &ART COUNTRY CLUB

PERRIS VALLEYAIRPORT


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Aerial

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Parcel Map

Subject Offering


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Tenant Information

Starbucks Corporation(NASDAQ: SBUX)

S&P Credit Rating: BBB+2010 Sales ($ Bil): $10.71Net Income ($ Mil): $945.6Total Equity ($ Bil): $3.67# of Stores: 16,858# of Full Time Employees: 137,000

Company Profile

Starbucks is the largest coffeehouse company in the world, with over 16,858 stores in 50 countries, including over 11,000 in the United States, over 1000 in Canada, and over 700 in the UK. Starbucks was founded in 1971 and is based in Seattle, Washington.

The company offers approximately 30 blends and single-origin premium arabica coffees. It also provides handcrafted beverages, such as fresh-brewed coffee, hot and iced espresso beverages, coffee and non-coffee blended beverages, Vivanno smoothies, and Tazo teas; and merchandise products, including home espresso machines, coffee brewers and grinders, coffee mugs and accessories, packaged goods, music, books, and gift items. In addition, it offers fresh food items, which comprise baked pastries, sandwiches, salads, oatmeal, yogurt parfaits, and fruit cups.

Starbucks stores are a great place for people to relax, meet others and surf the Internet with wireless connections provided by AT&T.

In addition to sales through company-operated retail stores, Starbucks sells whole bean coffees through a specialty sales group and supermarkets. Additionally, Starbucks produces and sells bottled Frappuccino coffee drink and a line of premium ice creams through its joint venture partnerships and offers a line of innovative premium teas produced by its wholly owned subsidiary, Tazo Tea Company.


Perris Crossing

Tenant Information

Subway

Company Profile

Subway is an American restaurant franchise that primarily sells submarine sandwiches (subs), salads, and personal pizzas. It is owned and operated by Doctor’s Associates, Inc. (DAI). Subway is one of the fastest growing franchises in the world with approximately 33,578 restaurants in 94 countries/territories. It is the largest single-brand restaurant chain globally and is the second largest restaurant operator globally.

Subway restaurants have been consistently ranked in Entrepreneur Magazine’s Top 500 Franchises, and was selected as the #2 overall franchise in 2008. Additionally, it was ranked as the #3 “Fastest Growing Franchise”, and the #1 “Global Franchise” as well.

Virtually all Subway restaurants are franchised and offer such fare as hot and cold sub sandwiches, turkey wraps, and salads. The eateries are located in freestanding buildings, as well as in airports, convenience stores, sports facilities, and other locations. Doctor’s Associates is owned by co-founders Fred DeLuca and Peter Buck, who opened the first Subway in 1965.

Ono Hawaiian BBQ

Company Profile

Ono Hawaiian BBQ is dedicated to bringing you the best Hawaiian dining experience by serving a delicious selection of “plate lunch” foods and Island cuisine, with exceptional service in a comfortable atmosphere.

Currently there are 38 Ono Hawaiian BBQ locations in the southwest US. Stores are typically between 1,500 to 2,000 square feet in size.


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Tenant Information

Los Primos Mexican Food

Company Profile

Los Primos Mexican Food was established in November 1999 when it opened its first restaurant in San Diego. Since then, Los Primos has been serving authentic carne asada burritos and tacos, rolled tacos, enchiladas, quesadillas, and many other fresh Mexican foods in the Southern California area.

Currently there are 20 Los Primos Mexican Food restaurants located in San Diego County, Orange County, and the Inland Empire. Open for breakfast, lunch and dinner. Stores are typically 1,000 to 2,500 square feet in size.


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Interstate 215 Competition Map

1 2

6 5

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No. Center Name / Address Anchors Size SF Vacant Occupancy Asking Rates

1Canyon Springs - TargetSWQ Hwy 60 & Day StMoreno Valley, CA

Target, Best Buy, Michael's Smart & Final

218,555 3,000 98.63% $2.25 - $2.75

2Canyon Springs - LowesSEQ Hwy 60 & Day StMoreno Valley, CA

Lowes, Sports Authority 180,717 5,126 97.16% 2.25

3Heritage Marketplace28039-28047 Antelope RoadMurrieta, CA 92562

Albertsons 70,132 3,900 94.44% $2.75

4The Orchard - Stone CreekNWC I-215 & Clinton KeithMurrieta, CA

Target, Marshalls, Walgreens, Dixieline 460,000 - 100.00% $3.00 - $3.15

5Menifee Town Center30123-30145 Antelope RdMenifee, CA 92584

Ralphs, Ross, Target 114,562 7,473 93.48% $2.25

6Countryside MarketplaceSWC I-215 & Haun Rd, Menifee, CA

Target, Kohls, Lowe's, Best Buy, Sport Chalet, Old Navy, TJMaxx

735,000 - 100.00% $2.75 - $3.25


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Area Information

The City of Perris is located in the heart of Southern California, between San Diego and Los Angeles. Perris provides a diverse business market, personal and professional growth, affordable real estate, history and abundant recreational activities that together create a small-town atmosphere with a high-quality lifestyle. One of the fastest growing cities in California, Perris is a choice destination for families and businesses alike.

Perris is surrounded by great recreational facilities and has miles of frontage on Interstate 215; Perris is part of the JPA for March Air Force Reserve Base.

The city is named in honor of Fred T. Perris, chief engineer of the California Southern Railroad. The California Southern Railroad was built through the future town site in 1882 to build a rail connection between the present day cities of Barstow and San Diego. Due to a land title dispute at Pinacate, most of its citizens moved two miles north on the railroad and established Perris in 1885. The city was incorporated in 1911.

The nearby, privately owned, Perris Valley Airport has a 5,100-foot runway. Perris has drawn a crowd of skydivers, amateur and professional, to Perris Valley Skydiving. The area’s sudden fame gave Perris the nickname: “the skydiving capital of America.” Perris Valley Skydiving averages 100,000 skydives each year, and is recognized World Wide as a premier Skydiving Facility. Perris Valley Skydiving maintains the largest fleet of skydiving-equipped aircraft on the West Coast.

In general, Perris has a sunny, mild Mediterranean climate. On average, Perris gets only 10 inches of rain per year. The humidy is quite low all year. The July high temperatures average 97 degrees, while January low temperatures average 35 degrees. There are 275 sunny days per year.

March Air Force Base

Perris Valley Airport/Perris Valley Skydiving


Perris Crossing

Demographics

Description 1.0 mi 3.0 mi 5.0 miPopulation

2015 Projection 4,475 33,387 129,722

2010 Estimate 3,755 28,535 110,656

2000 Census 1,775 18,918 75,332

1990 Census 1,326 14,787 52,869

Growth 2010-2015 19.17% 17.00% 17.23%

Growth 2000-2010 111.55% 50.84% 46.89%

Growth 1990-2000 33.86% 27.94% 42.49%

2010 Est. Population by Single Classification Race 3,755 28,535 110,656

White Alone 1,576 18,050 62,550

Black or African American Alone 86 1,303 7,899

American Indian and Alaska Native Alone 54 267 1,296

Asian Alone 56 661 3,428

Native Hawaiian and Other Pacific Islander Alone 11 35 252

Some Other Race Alone 1,825 7,002 29,979

Two or More Races 148 1,218 5,253

2010 Est. Population by Sex 3,755 28,535 110,656

Male 1,848 13,302 53,619

Female 1,907 15,234 57,038

2010 Est. Median Age 32.32 42.02 33.71

2010 Est. Average Age 36.50 44.30 37.10

2010 Est. Pop by Employment Status 2,819 23,018 82,985

In Armed Forces 0 1 209

Civilian - Employed 1,163 9,207 40,735

Civilian - Unemployed 164 1,219 5,597

Not in Labor Force 1,492 12,592 36,444

2010 Est. Average Number of Vehicles 1.84 1.60 1.82

Description 1.0 mi 3.0 mi 5.0 miHouseholds

2015 Projection 1,465 13,183 42,340

2010 Estimate 1,245 11,499 36,816

2000 Census 607 8,242 26,391

1990 Census 459 6,714 20,533

Growth 2010-2015 17.67% 14.64% 15.00%

Growth 2000-2010 105.11% 39.52% 39.50%

Growth 1990-2000 32.24% 22.76% 28.53%

2010 Tenure of Occupied Housing Units 1,245 11,499 36,816

Owner Occupied 915 8,407 27,239

Renter Occupied 330 3,092 9,577

2010 Average Household Size 3.01 2.46 2.99

2010 Est. Households by Household Income 1,245 11,499 36,816

Income Less than $15,000 159 1,625 4,520

Income $15,000 - $24,999 170 1,751 4,612

Income $25,000 - $34,999 203 1,881 4,896

Income $35,000 - $49,999 186 1,995 5,971

Income $50,000 - $74,999 217 2,013 7,391

Income $75,000 - $99,999 196 1,190 4,793

Income $100,000 - $124,999 36 446 2,023

Income $125,000 - $149,999 35 283 1,237

Income $150,000 - $199,999 35 235 1,019

Income $200,000 - $499,999 10 65 303

Income $500,000 and over 1 17 51

2010 Est. Average Household Income $53,901 $49,949 $56,879

2010 Est. Median Household Income $42,420 $38,712 $46,003

2010 Est. Per Capita Income $17,931 $20,524 $19,104

offering memorandum perris crossing case rd pad b perris...net leased investment group exclusively...

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