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GRANADA HILLS RETAIL STRIP - LEASEHOLD INTEREST

OFFERING MEMORANDUM

CONFIDENTIALITY AND DISCLAIMER

The 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.

GRANADA HILLS, CA

Granada Hills Retail Strip

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.

NON-ENDORSEMENT NOTICE

Section 1 PRICING AND FINANCIAL ANALYSIS

Section 2 PROPERTY DESCRIPTION

Section 3 RECENT SALES

Section 4 RENT COMPARABLES

Section 5 DEMOGRAPHIC ANALYSIS

TABLE OF CONTENTS

Granada Hills Retail StripGRANADA HILLS, CA

10670-10690 Balboa Boulevard

Granada Hills, CA 91344

Price $1,425,000

Down Payment 50.0% / $712,500

Gross Leasable Area (GLA) 11,050

Price/SF $128.96

CAP Rate - Current 11.45%

Lot Size 21,963 SF

Year Built 1986

FIRST TRUST DEED

Loan Amount $712,500

Loan Type Proposed New

Interest Rate 4.75%

Amortization 15 Years

Annualized Operating Data

Income Current

Base Rent

Occupied Space $370,123

Gross Potential Rent $370,123

Expense Reimbursements $60,868

Gross Potential Income $430,991

Vacancy/Collection Allowance 3% / $11,104

Effective Gross Income $419,887

Total Expenses $256,669

Net Operating Income $163,218

Debt Service $66,505

Debt Coverage Ratio 2.45

Net Cash Flow After Debt Service 13.57% / $96,714

Principal Reduction $33,381

Total Return 18.26% / $130,095

Location

PRICING AND FINANCIAL ANALYSIS

Financing


Expenses

Property Tax $55,983

Insurance $7,341

Ground Lease $150,000

CAM

Utilities $7,158

Repairs & Maintenance $2,275

Security $1,770

Gardner $2,589

Garbage Disposal $5,796

TOTAL CAM $19,588

Management Fee (% of EGI) 5% / $20,994

Reserves / Replacements $2,763

TOTAL EXPENSES $256,669

EXPENSES/SF $23.23

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. © 2016 X0121647 Marcus &Millichap. All rights reserved.

Loan information is time sensitive and subject to

change. Contact your local Marcus & Millichap

Capital Corporation representative.

FINANCIAL OVERVIEW

*

* Ground Lessee Responsible for Real Estate Taxes

which will remain unchanged as Land is not being

sold/reassessed

*Ground Lease Increases:

8/2020 - 7/2025: $165,000/Year

8/2025 - 7/2030: $200,000/Year

8/2030 - 1/2033: $220,000/Year

NOTE: Both Ground Lessee and Lessor have First Right of Refusal with 15 Days to Respond to Notification.



Comments

Rent Roll reflects January 2017. Metro PCS has one free month of rent per year (September) - not reflected on Rent Roll. Billboard renews 12

months at a time, no options.


Suite Tenant GLA % of

GLA

Lease

Commence

Lease

Expire

Monthly

Rent

Rent/

SF

Changes

On

Changes

To

Expense

Reimbs.

Other:

Options/ %

Rent

Lease

Type

10670 Metro PCS 1,100 9.95% 12/1/2014 11/30/2019 $2,094.00 $1.90 12/1/2017 $2,204.25 $400.00 5 x 5 Yr FMV NNN

10670A Global Satellite 1,300 11.76% 1/1/2016 12/31/2017 $3,508.00 $2.70 $455.00 NNN

10670B Foot Massage 1,375 12.44% 9/1/2011 8/31/2018 $3,307.50 $2.41 9/1/2017 $3,472.88 $500.00 1 x 5 Yr FMV NNN

10676 Thai Restaurant 1,375 12.44% 6/1/2009 5/31/2020 $3,849.93 $2.80 6/1/2017 $4,042.43 $687.50 NNN

10678 2 for 1 Pizza 800 7.24% 3/1/2010 4/30/2021 $2,320.00 $2.90 5/1/2017 $2,552.00 $336.00 NNN

10680 Subway 1,000 9.05% 3/27/2011 2/28/2021 $2,514.99 $2.51 3/1/2017 $2,590.44 $600.00 1 x 5 Yr FMV NNN

10682 Gamsa Pain Clinic 1,600 14.48% 1/15/2015 1/14/2018 $3,307.50 $2.07 $560.00 1 x 3 Yr FMV NNN

10690 7-Eleven 2,500 22.62% 5/1/2011 4/30/2021 $8,900.00 $3.56 $1,533.87 NNN

Billboard 0 0.00% 4/1/2014 3/31/2017 $1,041.67

TOTAL VACANT

TOTAL OCCUPIED 11,050 100.00% $30,843.59 $14,862.00 $5,072.37

TOTAL 11,050 100.00% $30,843.59 $14,862.00 $5,072.37

TENANT SUMMARY



For The Year Beginning Year 1

Jan 2017

Year 2

Jan 2018

Year 3

Jan 2019

Year 4

Jan 2020

Year 5

Jan 2021

Year 6

Jan 2022

Year 7

Jan 2023

Year 8

Jan 2024

Year 9

Jan 2025

Year 10

Jan 2026

Tenant(s) Name Global

Satellite

Billboard

Foot

Massage

Gamsa Pain

Clinic

Metro PCS Thai

Restaurant

2 for 1 Pizza

Subway

7-Eleven

Total Number of Tenants 2 2 1 1 3

Total Square Feet 1,300 2,975 1,100 1,375 4,300

Total Percentage 11.8% 26.9% 10.0% 12.4% 38.9%

Cumulative Percentage 11.8% 38.7% 48.6% 61.1% 100.0%


Percentage of SF Expiring Number of Tenants Expiring Cumulative % of SF Expiring

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

To

tal P

roje

ct S

qu

are

Fo

ota

ge

0

1

2

3

Nu

mb

er

of T

en

an

tsJan 2017

12%Jan 2018

27%Jan 2019

10%Jan 2020

12%Jan 2021

39%Jan 2022

0%Jan 2023

0%Jan 2024

0%Jan 2025

0%Jan 2026

0%

LEASE EXPIRATION SUMMARY

Any projections, opinions, assumptions or estimates used here within are for example purposes only and do not represent the current or future performance of the property.

Marcus & Millichap is pleased to present for sale the Leasehold Interest (improvements only) located at 10670-10690 Balboa Boulevard Granada Hills, California 91344. At an extremely attractive CAP rate of 11.45 percent and a highly competitive price per square foot of only $129, this property will provide the new owner with a large amount of cash flow through the end of the Ground Lease (January 31, 2033).

Ground Lease terms: current rate through July 2020 is $150,000 per year; August 2020 through July 2025 rate is $165,000; August 2025 through July 2030 rate is $200,000 per year; August 2030 through January 2033 rate is $220,000 per year. Both Ground Lessee and Lessor have first right of refusal with 15 days to respond to notification.

Anchored by 7-Eleven, Subway, and Metro PCS, this property is located in the highly desirable San Fernando Valley neighborhood of Granada Hills. Average household income and population in three-mile radius $95,000 and 152,000 respectively.

Adding to this property's appeal is a Billboard that provides income while requiring no square footage.

Investment Highlights

■ Ideal San Fernando Valley Location

■ Extremely Busy Street Corner - Combined Traffic Counts Exceed 90,000

■ Anchored by 7-Eleven and Subway

■ High Income Neighborhood of Granada Hills

■ Average Household Income Three-Mile Radius $95,000

■ Dense Suburban Market - Population Three-Mile Radius 152,000

■ Billboard Provides Additional Income Requiring No Square Footage

■ High Cash Flow - 11 .45 Percent CAP Rate

PROPERTY DESCRIPTION



INVESTMENT OVERVIEW

The Offering

Property Granada Hills Retail Strip

Property Address 10670-10690 Balboa Boulevard


Assessor's Parcel Number 2684-001-039

Zoning c2-1

Site Description

Year Built 1986

Gross Leasable Area (GLA) 11,050 SF

Lot Size 21,963 SF

Type of Ownership Leasehold Interest

Parking 21



This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. © 2016 Marcus & Millichap. Allrights reserved.

PROPERTY SUMMARY



This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. © 2015 Marcus & Millichap. All rights reserved..




Local Map Regional Map

AREA MAPS




SITE PLAN




AERIAL PHOTO

1)

2)

3)


Beach and Lincoln Center

Burlington Coat Factory

Sierra Commons

RECENT SALES



RECENT SALES MAP

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180.00

Subject Beachand

LincolnCenter

BurlingtonCoat

Factory

SierraCommons

0.00

1.00

2.00

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Subject Beachand

LincolnCenter

BurlingtonCoat

Factory

SierraCommons

Average Price per Square Foot

RECENT SALES


Average Cap Rate


CAP RATE AND PRICE PER SF

1

2

Comments

Leasehold Interest (Improvements Only)

Ground Lease Expires January 31, 2033.




Beach and Lincoln Center

3000-3020 West Lincoln Avenue

Anaheim, CA 92801

Burlington Coat Factory

285 North Moorpark Road

Thousand Oaks, CA 91360

Comments


Ground Lease with Approximately 23 Years Remaining

Comments


Burlington Coat Factory Lease Expires 2026

Close of Escrow: 5/1/2015 Major Tenants

Year Built: 1979 7-Eleven

Gross Leasable Area (GLA): 18,070 SF Rainbow Donuts

Sale Price: $2,100,000 Threading Salon

Percent Down: Hayan Dental Group

CAP Rate: 8.37% Liberty Tax

Price/SF (GLA): $116.21 Ultra Comfort Massage

Lot Size: 71,438 SF Lee's Sandwiches

Subject Property

Year Built: 1986 Major Tenants

Gross Leasable Area (GLA): 11,050 SF 7-Eleven

Offering Price: $1,425,000 Subway

Percent Down 50% Metro PCS

CAP Rate: 11.45% Thai Restaurant

Price/SF (GLA): $128.96 2 for 1 Pizza

Lot Size: 21,963 SF Gamsa Pain Clinic

Foot Massage


Year Built/Renovated: 1995 / 2007 Burlington Coat Factory

Gross Leasable Area (GLA): 85,000 SF

Sale Price: $3,500,000

Percent Down:

CAP Rate: 8.89%

Price/SF (GLA): $41.18

Lot Size: 50,179 SF

RECENT SALES



RECENT SALES

3 Sierra Commons

39626 10th Street West

Palmdale, CA 93551

Comments



Year Built/Renovated: 1996 / 2005 BEVMO!

Gross Leasable Area (GLA): 88,171 SF Ashley Furniture

Sale Price: $15,394,656 Pacific Dental

Percent Down: Michael's

CAP Rate: 7.86% Applebee's

Price/SF (GLA): $174.60 Coffee Bean

Lot Size: 347,894 SF Jared

RECENT SALES



RECENT SALES

1)

2)

3)

4)


North Hills Shopping Center

Devonshire Retail Center

Mission Hills Retail Center

Northridge Retail Center

RENT COMPARABLES



RENT COMPARABLES MAP

0

10

20

30

40

50

60

70

80

90

100

Subject NorthHills

ShoppingCenter

DevonshireRetailCenter

MissionHills

RetailCenter

NorthridgeRetailCenter

0.00

0.30

0.60

0.90

1.20

1.50

1.80

2.10

2.40

Subject NorthHills

ShoppingCenter

DevonshireRetailCenter

MissionHills

RetailCenter

NorthridgeRetailCenter

RENT COMPARABLES


Average Rent per Square Foot


OCCUPANCY AND AVERAGE RENT PER SF

Average Occupancy

2

1

Subject Property

North Hills Shopping Center

16860 Devonshire Street


Devonshire Retail Center


Northridge, CA 91326

Comments

Average Rent/SF Excludes Billboard Income

Date Surveyed: 2016 Major Tenants

Occupancy: 97% Denny's

Year Built: 1963 Panda Express

Gross Leasable Area (GLA): 44,696 SF Papa John's Pizza

Rent/SF (GLA): $2.50 Hertz Car Rental

Available SF: 1,400

Lot Size: 103,424 SF

Lease Type: NNN


Occupancy: 97% Ralph's

Year Built: 1958 Auto Zone

Gross Leasable Area (GLA): 135,000 SF Regency Theatres

Rent/SF (GLA): $2.25 Starbucks

Available SF: 4,400 Fatburger

Lot Size: 345,316 SF See's Candies

Lease Type: NNN Baja Fresh


Occupancy: 100% 7-Eleven

Year Built: 1986 Subway

Gross Leasable Area (GLA): 11,050 SF Metro PCS

Rent/SF (GLA): $2.54 Thai Restaurant

Available SF: 0 2 for 1 Pizza

Lot Size: 21,963 SF Gamsa Pain Clinic

Lease Type: NNN Foot Massage




RENT COMPARABLES



RENT COMPARABLES

4

3 Mission Hills Retail Center


Mission Hills, CA 91345

Northridge Retail Center

10317 Zelzah Avenue

Northridge, CA 91326


Occupancy: 93% Noah's Ark Kabob

Year Built: 1981 Dentistry

Gross Leasable Area (GLA): 15,722 SF Hair Salon

Rent/SF (GLA): $1.85 Coin Laundry

Available SF: 1,066 Wireless Store

Lot Size: 36,508 SF

Lease Type: NNN


Occupancy: 86% Verizon Wireless

Year Built: 2007 Nail & Spa

Gross Leasable Area (GLA): 7,290 SF Mexican Food

Rent/SF (GLA): $2.25 Bright Dental Group

Available SF: 1,000 Hair Salon & Beauty

Lot Size: 19,301 SF

Lease Type: NNN

RENT COMPARABLES



RENT COMPARABLES

1 Mile 3 Miles 5 Miles

2000 Population 23,236 152,173 499,524

2010 Population 23,854 164,484 537,015

2014 Population 24,367 168,076 549,825

2019 Population 25,080 171,360 563,877

2000 Households 8,094 50,657 145,835

2010 Households 8,057 52,857 153,716

2014 Households 8,309 54,616 158,819

2019 Households 8,579 55,940 163,549

2014 Average Household Size 2.89 3.00 3.38

2014 Daytime Population 6,207 40,343 158,967

2000 Owner Occupied Housing Units 57.78% 66.57% 56.90%

2000 Renter Occupied Housing Units 39.15% 31.13% 40.28%

2000 Vacant 3.07% 2.31% 2.81%



2014 Vacant 0.85% 0.99% 2.31%



2019 Vacant 0.74% 0.93% 2.35%

$ 0 - $14,999 8.6% 9.4% 11.0%

$ 15,000 - $24,999 8.7% 8.1% 10.6%

$ 25,000 - $34,999 7.9% 7.5% 9.8%

$ 35,000 - $49,999 15.6% 12.9% 14.2%

$ 50,000 - $74,999 17.4% 17.0% 18.1%

$ 75,000 - $99,999 13.1% 13.2% 12.4%

$100,000 - $124,999 11.3% 10.1% 8.5%

$125,000 - $149,999 7.2% 7.4% 5.5%

$150,000 - $199,999 6.8% 7.6% 5.4%

$200,000 - $249,999 1.2% 2.7% 1.9%

$250,000 + 2.2% 4.2% 2.9%

2014 Median Household Income $63,687 $67,846 $56,077

2014 Per Capita Income $28,283 $31,029 $23,076

2014 Average Household Income $82,409 $94,942 $79,379

Demographic data © 2012 by Experian.

DEMOGRAPHIC ANALYSIS



DEMOGRAPHIC REPORT

Geography: 5 miles

Population

In 2014, the population in your selected geography is 549,825. The population has changed by 10.06% since 2000. It is estimated

that the population in your area will be 563,876 five years from now, which represents a change of 2.55% from the current year. The

current population is 49.78% male and 50.21% female. The median age of the population in your area is 33.7, compare this to the

Entire US average which is 37.3. The population density in your area is 6,999.22 people per square mile.

Households

There are currently 158,819 households in your selected geography. The number of households has changed by 8.90% since 2000.

It is estimated that the number of households in your area will be 163,549 five years from now, which represents a change of 2.97%

from the current year. The average household size in your area is 3.38 persons.

Income

In 2014, the median household income for your selected geography is $56,077, compare this to the Entire US average which is

currently $51,972. The median household income for your area has changed by 23.23% since 2000. It is estimated that the median

household income in your area will be $66,396 five years from now, which represents a change of 18.40% from the current year.

The current year per capita income in your area is $23,075, compare this to the Entire US average, which is $28,599. The current

year average household income in your area is $79,378, compare this to the Entire US average which is $74,533.

Race & Ethnicity

The current year racial makeup of your selected area is as follows: 50.37% White, 3.73% Black, 0.13% Native American and 12.53%

Asian/Pacific Islander. Compare these to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% Native American and

5.02% Asian/Pacific Islander.

People of Hispanic origin are counted independently of race. People of Hispanic origin make up 59.57% of the current year

population in your selected area. Compare this to the Entire US average of 17.13%.

Housing

In 2000, there were 85,390 owner occupied housing units in your area and there were 60,444 renter occupied housing units in your

area. The median rent at the time was $623.

Employment

In 2014, there are 158,966 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed

that 58.63% of employees are employed in white-collar occupations in this geography, and 41.22% are employed in blue-collar

occupations. In 2014, unemployment in this area is 10.14%. In 2000, the average time traveled to work was 31.7 minutes.

Demographic data © 2012 by Experian.




SUMMARY REPORT



This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. © 2015 Marcus & Millichap. All rights reserved..

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GRANADA HILLS RETAIL STRIP- LEASEHOLD INTEREST

G R A N A D A H I L L S , C A L I F O R N I A

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