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Terry LaneRetail CenterGRANTS PASS, OREGON

REPRESENTATIVE PHOTO

Terry Lane Retail Center1829 NE FAIRVIEW AVE, GRANTS PASS, OR 97526


Overview

https://goo.gl/maps/zdMExfTsa1p

THE OFFERING provides the opportunity to acquire a brand new, high quality retail center fully-occupied by four national brands – MOD Pizza, Aspen Dental, Jersey Mike’s, and Batteries + Bulbs. All four tenants signed 10-year NNN leases with scheduled rent increases in the initial term. The Property has frontage on a highly-trafficked arterial within the city’s premier shopping district along Redwood Highway, and benefits from strong daily draws provided by an adjacent WinCo Foods-anchored retail center and Grants Pass Shopping Center, a multi-anchor destination center.

LEASEABLE SF10,199 SF

LAND AREA1.23 Acres

OCCUPANCY100%

AVG CURRENT RENTS$35.74

YEAR BUILT2018(Under Construction)*

PARKING81 Spaces; 8.0/1,000 SF

Investment Summary

6.00%CAP

$5,740,000PRICE

*Construction scheduled for 10/1/2018 completion.

PAGE 3

100% LEASED TO FOUR NATIONAL TENANTS ON BRAND NEW 10-YEAR LEASES WITH RENT GROWTH.

STRONG TENANT LINEUP LEASED TO MOD PIZZA, ASPEN DENTAL, JERSEY MIKE’S, AND BATTERIES + BULBS.

HIGH QUALITY NEW CONSTRUCTION WITH OPTIMAL PARKING RATIOS.

MAJOR DAILY DRAW TO THE TRADE AREA PROVIDED BY ADJACENT WINCO AND NEARBY WALMART, FRED MEYER, AND GRANTS PASS SHOPPING CENTER.

TheHighlights

Investment Highlights

SUPERB ACCESS CONNECTING DIRECTLY TO INTERSTATE-5 CONVENIENTLY LOCATED ONE HALF-MILE EAST.

EXPOSED TO OVER 27,500 VPD WITH FRONTAGE ON REDWOOD HIGHWAY (US ROUTE 99).

NEIGHBORING WALMART, FRED MEYER & WINCO ARE REPORTEDLY TOP PERFORMING LOCATIONS FOR EACH GROCER IN THE STATE.

JERSEY MIKE’S IS OPERATED BY A PROMINENT RESTAURANT FRANCHISEE OVERSEEING A LARGE JERSEY MIKE’S AND CARL’S JR. PORTFOLIO, INCLUDING ADJACENT CARL’S JR.

Investment Highlights

PAGE 5

ASPEN DENTAL is one of the largest and fastest-growing dental support organizations (DSO) in the U.S. with 700 locations employing an estimated 8,000 dentists and team members. Aspen Dental is a subsidiary of investment-grade Ares Management, L.P. (S&P: BBB+), a leading global alternative asset management company with $100 billion in assets, as well as Leonard Green & Partners, L.P., and American Securities, LLC, both leading U.S. private equity investment firms.

ASPENDENTAL

JERSEY MIKE’S is a national sandwich chain founded 62+ years ago in New Jersey and is recognized as one of the strongest franchise systems with 16% growth between 2010-2017. The Lessee is JCK Subs Inc., a prominent multi-unit restaurant operator overseeing approximately six Jersey Mike’s and dozens of Carl’s Jr. locations throughout the PNW, and is the son of Carl Karcher, the founder of Carl’s Jr.

JERSEYMIKE’S

BATTERIES + BULBS is a national retailer specializing in the sale of batteries/bulbs and cell phone repair. Batteries + Bulbs increased their footprint by 12% in 2017 with 26 new stores and plans to open 47 additional stores in 2018, marking 29 consecutive years of growth. The Lessee is Specific Energy Corporation overseeing two-plus locations in Southern Oregon; Tenant’s lease includes two personal guaranty’s.

BATTERIES + BULBS

MOD PIZZA is recognized as one of the fastest-growing restaurants and earned “Best Workplace for Millennials 2018” by Fortune, and was included in the “America’s Fastest-Growing Private Companies” list of 2018 by Inc. 5000. MOD Pizza is a fast-casual restaurant with a total of 330 locations, of which 110 were added in 2017, making it the second consecutive year MOD has grown by 100-plus stores.

MODPIZZA

About the Tenants

About the Tenants

PAGE 7

MAJOR RETAILApplebee’sAT&TBig 5 Sporting Goods Big Lots Carl’s Jr. Dollar Tree

Fred Meyer GameStopGrocery Outlet Home Depot McDonald’s O’Reilly Auto Parts

Panda ExpressSally Beauty Supply Shari’s Café & Pies StarbucksTaco BellWalmart SupercenterWinCo

TOTAL 1-MILE 3-MILES 5-MILES

Businesses 1,065 2,154 2,380

Employees 12,167 22,680 23,737

Population 9,353 36,488 50,930

KEY 1-MILE 3-MILES 5-MILES

BusinessSummary

GRANTS PASS SHOPPING Aaron’sFamous FootwearGoodwillHarbor Freight Tools

JCPenneyJoAnn FabricsMauricesPetco

Rite AidRoss Dress for LessStaplesUS Cellular

CENTER

Surrounding Retail

http://www.grantspassshoppingcenter.com/

24,000VPD

199

NE

E ST

NE BEACON DR

5

199

NE AGNESS AVE

NE

F ST

GRANTS PASS SHOPPING

CENTER

TERRY LANE RETAIL

CENTER

27,500 VPD

Surrounding Retail

PAGE 9

NE TERRY LA

NE

REDWOOD HIGHWAY

1.23ACRES

81 SPACES;8.0/1,000 SF

27,500 VPD

10,199LEASEABLE SF

199199

NE FAIRVIEW AVENUE


Site Plan

SITE PLAN NOT TO SCALE

MOD PIZZA

ASPEN DENTAL

BATTERIES + BULBS

JERSEY SUB

S

Site Plan

PAGE 11

South Elevation

Elevations

East Elevation

North Elevation

West ElevationPAGE 13

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

Income & Expense

PRICE $5,740,000CAPITALIZATION RATE 6.00%

CASH FLOW SUMMARYSCHEDULED INCOME PER SFBase Rent for the Period of: 2/1/2019 - 1/31/2020 $35.74 $364,508

Rent Increases Over Base Rent $0.01 $125

Operating Expense Reimbursement $6.68 $68,166

Equals: Scheduled Gross Income $42.44 $432,799

Current Vacancy 3% ($1.27) ($12,984)

Total Effective Gross Income (EGI) $41.16 $419,815

OPERATING EXPENSES Per SF

CAMS $1.75 $17,848

Property Taxes $4.15 $42,326

Insurance $0.23 $2,346

Management Fee of EGI $1.25 $12,754

Total Operating Expenses $7.38 $75,274

NET OPERATING INCOME $33.78 $344,541

3.0%

9/17/2018 [ <www.CapitalPacific.com> ]

Financial Summary

RentRoll

TO JUMP TO THE FULL FINANCIAL SUMMARY INCLUDING RENT ROLL, PLEASE CLICK HERE.

Financial Summary

PAGE 15

TERM MONTHLY RENT ANNUAL RENT

Years 1-5 $9,165 $109,980Years 6-10 $10,081.50 $120,978

OPTION RENTS

DATE RANGE MONTHLY RENT ANNUAL RENT

#1. Years 11-15 $11,089.65 $133,075.80#2. Years 16-20 $12,198.62 $146,383.44

TENANT MOD Super Fast Pizza, LLC dba MOD PizzaBUILDING SF 2,820 SFLEASE TYPE NNNTERM 10 YearsRENT COMMENCEMENT Earlier to occur of Tenant’s Grand Opening or 120 days following the later of completion of Landlord’s work or date Tenant receives permits. DELIVERY DATE October 1, 2018 (Estimated)OPTIONS 2, 5-Yr Options; 180-Day Notice

Premise & Term

Rent

- MOD PizzaLease Abstract

TAXESTenant is responsible for reimbursement of 100% of their prorata share to Landlord, estimated at $4.15/SF for Year 1. INSURANCETenant reimburses 100% of their prorata share to Landlord, estimated at $0.23/SF for Year 1. UTILITIESTenant is responsible for direct payment of all utilities.CAMTenant’s CAM is estimated at $3/SF for Year 1, total NNN estimated at $7.38/SF. CAM to be capped at a 3% increase year-over-year, excluding utilities and snow removal.TENANT’S MAINTENANCE OBLIGATIONSTenant is responsible for all interior maintenance and repair, including HVAC maintenance and replacement. LANDLORD’S MAINTENANCE OBLIGATIONSLandlord to maintain at its expenses, the foundations of the Premises, structural soundness of their concrete floors, and exterior walls in good order, repair and condition.

EXCLUSIVE USETenant has exclusive right to sell pizza that accounts for more than 10% of gross sales. TENANT FINANCIALSTenant to provide financial statement to Landlord upon request no more than once per year.

LeaseProvisions

Expenses

Lease Abstract

PAGE 17


Years 1-5 $12,300 $147,600Years 6-10 $13,530 $162,360

OPTION RENTS (ESTIMATED)


#1. Years 11-15 $14,883 $178,596#2. Years 16-20 $16,371 $196,452#3. Years 21-25 $18,009 $216,108

TENANT Aspen Dental Management, Inc. dba Aspen DentalBUILDING SF 3,600 SFLEASE TYPE NNNTERM 10 YearsRENT COMMENCEMENT 120 days following the later of delivery of the Premises, Landlord’s completion of common areas, or date Tenant receives permits. DELIVERY DATE October 1, 2018 (Estimated)OPTIONS 3, 5-Yr Options; 180-Day Notice

Premise & Term

Rent

- Aspen DentalLease Abstract

TAXESTenant is responsible for reimbursement of 100% of their prorata share to Landlord, estimated at $4.15/SF for Year 1. INSURANCETenant reimburses 100% of their prorata share to Landlord, estimated at $0.23/SF for Year 1. UTILITIESTenant is responsible for direct payment of all utilities.CAMTenant’s CAM is estimated at $3/SF for Year 1, total NNN estimated at $7.38/SF. CAM to be capped at a 5% increase year-over-year, excluding utilities and snow removal.TENANT’S MAINTENANCE OBLIGATIONSTenant is responsible for all interior maintenance and repair, including doors/windows and frames, HVAC maintenance and repair. LANDLORD’S MAINTENANCE OBLIGATIONSLandlord to maintain , repair, and replace the roof, parapets, gutters, downspouts, canopies, awnings, floor slab, support columns, subfloor, outer walls, building slab, exterior and underground utility installations. Landlord provides guaranty for all Landlord construction responsibilities for 1 Year.

EXCLUSIVE USETenant has exclusive use. RIGHT TO GO DARKIn the event Tenant doesn’t open by the Opening Date or continuously operate for 180 consecutive days, Landlord will have the right to take back the Premises.ROFR TO LEASETenant has a right of first refusal to lease any adjacent space. TENANT FINANCIALSTenant to provide current financial statement and statement for two preceding years to Landlord upon 30 days of request, no more than once per year.

LeaseProvisions

Expenses

Lease Abstract

PAGE 19


Months 1-5 Rent/NNN Abatement Years 1-5 $4,744 $56,928Years 6-10 $5,218.40 $62,620.80

OPTION RENTS (ESTIMATED)


#1. Years 11-15 $5,740.24 $68,882.88#2. Years 16-20 $6,314.26 $75,771.12#3. Years 21-25 $6,945.69 $83,348.28

TENANT JCK Subs, Inc. dba Jersey Mike’s BUILDING SF 1,779 SFLEASE TYPE NNNTERM 10 Years, 5 monthsRENT COMMENCEMENT Earlier of the date Tenant opens, or 120 days following the later of delivery of the Premises, Landlord’s completion of common areas, or date Tenant receives permits. DELIVERY DATE October 1, 2018 (Estimated)OPTIONS 3, 5-Yr Options; 180-Day Notice

Premise & Term

Rent

- Jersey Mike’sLease Abstract

TAXESTenant is responsible for reimbursement of 100% of their prorata share to Landlord.INSURANCETenant reimburses 100% of their prorata share to Landlord.UTILITIESTenant is responsible for direct payment of all utilities.CAMTenant’s combined share of NNN is capped at $5/SF for Year 1 with a 5% cap year-over-year, excluding utilities and snow removal.TENANT’S MAINTENANCE OBLIGATIONSTenant is responsible for all interior maintenance and repair, including doors/windows and frames, HVAC maintenance and repair. LANDLORD’S MAINTENANCE OBLIGATIONSLandlord to maintain the structure of the roof, exterior walls, foundations and building structure, to be included in CAMs billable to Tenant.

EXCLUSIVE USETenant has exclusive use to sell submarine sandwiches. STATEMENT OF GROSS SALESTenant to provide a statement of gross sales no more than once per year, upon Landlord’s request.

LeaseProvisions

Expenses

Lease Abstract

PAGE 21


Year 1 $4,166.67 $50,000Year 2 $4,291.67 $51,500Year 3 $4,420.00 $53,040Year 4 $4,553.33 $54,640 Year 5 $4,690.00 $56,280 Year 6 $4,830.00 $57,960 Year 7 $4,973.33 $59,680Year 8 $5,121.67 $61,460 Year 9 $5,275.00 $63,300 Year 10 $5,431.67 $65,180

OPTIONS 2, 5-Yr Options – Annual 3% Increases.

TENANT Specific Energy Corporation dba Batteries + Bulbs BUILDING SF 2,000 SFLEASE TYPE NNNTERM 10 Years, 5 monthsRENT COMMENCEMENT Earlier of the date Tenant opens, or 120 days following the later of delivery of the Premises, Landlord’s completion of common areas, or date Tenant receives permits. DELIVERY DATE October 1, 2018 (Estimated)OPTIONS 2, 5-Yr Options; 180-Day Notice GUARANTY Personal Guaranty

Premise & Term

Rent

- Batteries + Bulbs

*Based on Draft Lease*

ANNUAL 3% INCREASES

Lease Abstract

TAXESTenant is responsible for reimbursement of 100% of their prorata share to Landlord.INSURANCETenant reimburses 100% of their prorata share to Landlord.UTILITIESTenant is responsible for direct payment of all utilities.CAMCAM is capped at a 4% increase year-over-year (excludes utilities, security, trash, and non-reoccurring expenses). TENANT’S MAINTENANCE OBLIGATIONSTenant is responsible for all interior maintenance and repair, including doors/windows and frames, HVAC maintenance and repair. LANDLORD’S MAINTENANCE OBLIGATIONSLandlord to maintain the structure of the roof, exterior walls, foundations and building structure, to be included in CAMs billable to Tenant.

EXCLUSIVE USETenant has exclusive use to sell batteries, light bulbs, and offer cell phone repair.

LeaseProvisions

Expenses

Lease Abstract

PAGE 23

28.7 MILES33 MINS

Medford,Oregon

140 MILES2 HRS 12 MINS

Eugene,Oregon

DistanceTo

KEY 5 MINS 10 MINS 15 MINS

Demographics

POPULATION

5 MINS 10 MINS 15 MINS

2010 10,368 33,276 51,803

2017 10,724 34,682 54,219

2022 11,031 35,833 56,147

2017 HH INCOME

5 MINS 10 MINS 15 MINS

Average $53,038 $57,948 $60,147

Median $34,943 $40,877 $43,346

DriveTime

JOSEPHINE COUNTY POPULATION (ESTIMATED)

84,745

Demographics

PAGE 25

Terry LaneRetail CenterGRANTS PASS, OREGON FINANCIAL SUMMARY



Income & Expense

PRICE $5,740,000CAPITALIZATION RATE 6.00%

CASH FLOW SUMMARYSCHEDULED INCOME PER SFBase Rent for the Period of: 2/1/2019 - 1/31/2020 $35.74 $364,508

Rent Increases Over Base Rent $0.01 $125

Operating Expense Reimbursement $6.68 $68,166

Equals: Scheduled Gross Income $42.44 $432,799

Current Vacancy 3% ($1.27) ($12,984)

Total Effective Gross Income (EGI) $41.16 $419,815

OPERATING EXPENSES Per SF

CAMS $1.75 $17,848

Property Taxes $4.15 $42,326

Insurance $0.23 $2,346

Management Fee of EGI $1.25 $12,754

Total Operating Expenses $7.38 $75,274

NET OPERATING INCOME $33.78 $344,541

3.0%



Financial Summary PAGE 27


Rent Roll

LEASE TYPE

TENANT NAME SIZE % OF SF RENT START LEASE EXPIRATION

MONTHLY BASE RENT RENT/SF/YR DATE OF

INCREASEMONTHLY

BASE RENTAspen Dental 3,600 35.30% 2/1/19 1/31/29 NNN $12,300 $41.00 2/1/24 $13,530

Jersey Mike's 1,779 17.44% 2/1/19 6/30/29 NNN $4,744 $32.00 7/1/24 $5,218

Batteries Plus Bulbs 2,000 19.61% 1/1/19 12/31/28 NNN $4,167 $25.00 1/1/20 $4,292

MOD Pizza 2,820 27.65% 2/1/19 1/31/29 NNN $9,165 $39.00 2/1/24 $10,082

TOTALS 10,199 100% $30,376 $35.74

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information.Buyer must verify the information and bears all risk for any inaccuracies.

LEASE TERMSTENANT INFO

Comments: Analysis assumes 10/1/18 turnover with rent to commence 120 days thereafter. Landlord to provide $180K T.I. allowance.

Comments: Analysis assumes 10/1/18 turnover with rent to commence 120 days thereafter (if Tenant opens sooner, commencement date will move up). Tenant to have five month rent/NNN abatement not reflected in UW. Landlord to provide $620K T.I. allowance.

Comments: Analysis assumes 10/1/18 turnover with rent to commence 90 days thereafter (if Tenant opens sooner, commencement date will move up). Personal guaranty.

Annual 3% Increases

3-5 YR10% Increase

10% Increase

180-Day Notice

2-5 YRAnnual 3% Inc.

180-Day Notice3-5 YR

CURRENT RENT RENT INCREASES OPTIONS

Comments: Analysis assumes 10/1/18 turnover with rent to commence 120 days thereafter (if Tenant opens sooner, commencement date will move up).

180-Day Notice2-5 YR

10% Increase

180-Day Notice


Rent Roll PAGE 28


Operating Expenses

REIMBURSEMENTS

TOTAL PER SF NOTES IN-PLACE

TOTAL EXPENSES $75,274 $7.38 $68,166

NOTES:1) Based on Lease NNN Estimate.

2) Based on 3.0% of EGI. Reimbursements include Admin Fees.

MANAGEMENT

1$17,848 $1.75

1

CAMS

PROPERTY TAXES

$12,754 $1.25 2 $7,656

$42,326 $4.15 $42,326

INSURANCE

PROJECTED OPERATING EXPENSES

$2,346 $2,346 $0.23 1

$15,838


Operating Expenses PAGE 29


Reimbursements

TENANT NAME PRO RATE % CAMS PROPERTY TAX INSURANCE MGMT ADMIN FEE ADMIN

COLLECTED NOTES TENANT TOTALS

EXPENSE TOTAL $17,848 $42,326 $2,346 $12,754

Aspen Dental 35.30% $6,300 $14,940 $828 $1,103 0% $0 1 $23,171

Jersey Mike's 17.44% $1,103 $7,383 $409 $0 0% $0 2 $8,895

Batteries Plus Bulbs 19.61% $3,500 $8,300 $460 $2,501 15% $525 3 $15,286

MOD Pizza 27.65% $4,935 $11,703 $649 $3,527 0% $0 4 $20,813

TOTAL 100.00% $15,838 $42,326 $2,346 $7,131 $525 $68,166

1) CAM capped at a 5% increase year-over-year; Management reimbursement based on Tenant's prorata of 5% of NNN. 2) NNN capped at $5.00/SF for YR 1 with a 5% CAM cap thereafter; Tenant's management and 15% Admin based on NNN included in Capped CAM.

NOTES:

4) CAM capped at a 3% increase year-over-year (excludes utilities and snow removal). 3) CAM capped at a 4% increase year-over-year (excludes utilities, security, trash, and any non-recurring expenses).


Reimbursements PAGE 30


We’d love to hearfrom you.

SEAN [email protected]: 503.675.8378

KEVIN [email protected]: 503.675.7726

SCOTT [email protected]: 503.675.8383

MICHAEL [email protected]: 503.675.8381

PETER [email protected]: 503.607.0197

LISTED IN CONJUNCTION WITH

BROCK [email protected]: 503.504.5808

Contact

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