BRANDON MICHAELS GROUP SHERMAN WAY CANOGA PARK, CA A 15,591 SF STRIP CENTER ANCHORED BY O REILLY AUTO PARTS.

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1 BRANDON MICHAELS GROUP SHERMAN WAY CANOGA PARK, CA A 15,591 SF STRIP CENTER ANCHORED BY O REILLY AUTO PARTS.

2 INVESTMENT ADVISOR TABLE OF CONTENTS BRANDON MICHAELS Senior Managing Director Investments Senior Director, National Retail Group Tel: (818) License: CA # I. II. Executive Summary Investment Highlights III. Financials IV. Sales Comparables Ventura Blvd. Suite 100, Encino, CA V. Area Overview 2 3

3 EXECUTIVE SUMMARY The Brandon Michaels Group of Marcus & Millichap has been selected to exclusively market for sale Sherman Way, a 15,591 square foot strip center situated on 37,549 square feet of land in Canoga Park, CA. The subject property is ideally located on the northwest signalized corner of Sherman Way and Variel Avenue, just east of Canoga Avenue and west of DeSoto Avenue Sherman Way consists of a 7,000 SF O Reilly Auto Parts, and 8,000 SF of retail. O Reilly Auto Parts has successfully operated at this location for 20 years. The subject property is 87% occupied, creating a stable and secure income stream. O Reilly Auto Part s, a national tenant with investment grade credit, consists of 47% of the property. O Reilly s is rated BBB+ by Standard & Poors Sherman Way benefits from excellent foot traffic in the immediate area and is shadow anchored by CVS Pharmacy, which sits directly adjacent to the subject property. There are multiple national retailers in the immediate area, including Burger King, Vallarta Supermarket, Metro PCS, Domino s Pizza, AutoZone, Carl s Jr. and more. The subject property makes up part of a larger shopping center that benefits from an excellent mix of local, regional, and national tenants and presents excellent cross-over shopping and dining options and aids to the overall success of the subject property. There is ample parking in the front and rear of the building. Canoga Park is a neighborhood in the west San Fernando Valley region of Los Angeles, California. Canoga Park borders Warner Center, which is the main business center of the San Fernando Valley. Warner Center is home to one of the largest shopping centers in California, Westfield Topanga, and the Village at Westfield Topanga. Significant development and capital is being poured into Warner Center. Canoga Park benefits from a dense immediate population of approximately 447,000 people within a five mile radius and an average household income north of $80,

4 21059 Sherman Way, Canoga Park, CA 9130 ADDRESS $5,225,000 SALES PRICE 15,591 SF BLDG SF 5.20% CAP RATE PROPERTY OVERVIEW PROPERTY INFORMATION Address Property Type Sherman Way, Canoga Park, CA Retail APN Year Built 1998 Gross Square Feet Lot Size Zoning Type of Ownership FINANCIAL INFORMATION 15,591 SF 37,549 SF LAC2 Fee Simple Asking Price $5,225,000 Price/SF $ Current CAP Rate 5.20% Occupancy 87% Down Payment $2,475,000 (47%) Loan Amount* $2,750,000 (53%) Annual Debt Service $190,519 Cash on Cash Return 3.29% TOTAL BUILDING SF: 15,591 SF O REILLY S SF: 7,000 SF MULTI-TENANT RETAIL SF: 8,000 SF *Current loan must be assumed. 6 7

5 INVESTMENT HIGHLIGHTS O REILLY AUTO PARTS ANCHORED STRIP CENTER O Reilly Auto Parts is a publicly traded company with investment grade credit and a credit rating of BBB+ by Standard & Poor O Reilly Auto Parts occupies 47% of the property with a lease that expires in 2023 with three, five year options O Reilly has an annual revenue of $8.6 billion with over 4,829 locations throughout the United States O Reilly Auto Parts has successfully operated at this location for 20 years 8 VARIEL AVENUE CVS SHERMAN WAY INDEPENDENCE AVENUE EXCELLENT SFV LOCATION Northeast signalized corner location on Sherman Way and Variel Avenue Highly walkable location with heavy foot traffic Close to multiple national retailers including Domino s Pizza, Metro PCS, AutoZone, Carl s Jr., Vallarta Supermarket, etc. High traffic counts: Over 33,473 vehicles on Sherman Way One mile away from Warner Center, the San Fernando Valley s main business center and home to shopping centers Westfield Topanga, and the Village at Westfield Topanga Significant development and capital is being poured into Warner Center 87% OCCUPIED WITH SEASONED TENANT MIX Stable and secure income stream Large parcel of land (0.86 acres) Excellent parking in the front and rear of the property 67% of the tenants have operated at this location for 10+ years EXCELLENT DEMOGRAPHICS More than 447,700 people within a five mile radius Average household income above $95,253 within a five mile radius SHADOW ANCHORED BY CVS PHARMACY Reciprocal parking access Part of a larger shopping center with excellent cross-over shopping and dining options Excellent mix of national and local tenants O Reilly Auto Parts is a publicly traded company with investment grade credit and a credit rating of BBB+ by Standard & Poor 9

6 Tarzana SHERMAN WAY CANOGA PARK, CA The REVEAL Y WA N A RM Warner Center Warner Center CANOGA AVENUE CANOGA PARK 10 VANOW EN STR EET E SH AMLI Warner Center $3-4 billion mixeduse development 11

7 PROPERTY INFORMATION 33,473 vehicles a day on Sherman Way LOCATION TRAFFIC COUNTS MAJOR TENANT Sherman Way, Canoga Park SITE The subject property is located on the signalized corner of Sherman Way and Variel Avenue. SQUARE FOOTAGES The Subject Property consists of a retail building consisting of 15,591 SF on a 37,549 SF lot. Sherman Way: 33,473 vehicles per day De Soto Avenue: 37,901 vehicles per day APN O Reilly Auto Parts SHERMAN WAY SHERMAN WAY CANOGA PARK, CA FRONTAGE AND ACCESS 628 feet of frontage on Variel Avenue and 55 feet of frontage on Sherman Way. VARIEL AVENUE YEAR BUILT The property was built in ZONING The property is zoned LAC

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9 MAJOR TENANT OVERVIEW COMPANY PROFILE Name O Reilly Auto Parts O Reilly Auto Parts is an American auto parts retailer that provides automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States serving both the professional service providers and do-it-yourself customers. Founded in 1957 by the O Reilly family, the company operates more than 4,970 stores in 47 states. O Reilly Automotive, Inc. officially started in the auto parts business with one store in Springfield, Missouri, in December However, its historical background in the automotive business, as well as the family s quest for opportunity and advancement, may be traced back to a much earlier time. On April 23, 1993, the company completed an initial public offering, and it now trades on the NASDAQ market under the symbol ORLY. The company also has a stock purchase plan to enable as many team members as possible to own stock in the company. O Reilly Automotive, Inc. currently operates more than 4,950 stores in 47 states, including Alaska and Hawaii. The company continues to plan for growth and expansion, projecting the addition of 195 new locations in Type Traded As Credit Rating Credit Rating Agency Industry Public NASDAQ: ORLY NASDAQ Component S & P 500 Component BBB+ Standard & Poor Retail Founded 1957 Headquarters Springfield, Missouri No. of Locations 4,829 Products Revenue Auto Parts $8.6 billion 4,800 LOCATIONS 74,000 TEAM MEMBERS FOUNDED IN 1957 No. of Employees 74,000 Website

10 FINANCIALS RENT ROLL UNIT TENANT SF % LEASE START LEASE EXP OPTIONS BASE RENT RENT/SF A Vacant 1,000 7% - - none $2, $2.50 B Market & Liquor Zone 1,000 7% 1/1/2008 6/20/2020 none $2, $2.29 C Vacant 1,000 7% - - none $2, $2.50 D Urban Cuts 1,000 7% 10/1/2011 M2M none $2, $2.58 E Mi Tienda 99c 1,000 7% 1/1/2008 M2M none $2, $2.00 F Carlos A. Chung 1,000 7% 9/1/2016 7/31/2017 none $1, $1.50 G Noojume Nabhani 1,000 7% 5/1/2015 M2M none $1, $1.50 H Gabriel La Serenta Restaurant 1,000 7% 1/1/2008 M2M none $2, $2.50 I Valley Recycling 0 0% 6/1/2008 6/30/2020 none $1, K O Reilly Auto Part 7,000 47% 8/1/2008 7/31/ year $13, $1.92 Total 15, % $31, $2.12 RETAIL SF: 8,000 SF 53% O REILLY SF: 7,000 SF 47% CURRENT OCCUPIED SF: 13,000 SF 87% ANNUALIZED OPERATING DATA INCOME AND EXPENSE % CURRENT Scheduled Lease Income: $381,306 Vacancy: (5%) $11,020* Expenses: $98,437 Net Operating Income: $271,848 Loan Payment $190,519 Pre-Tax Cash Flow 3.29% $81,329 Principal Reduction $56,457 Total Return Before Taxes 5.6% $137,786 EXPENSES ANNUAL PER SF Taxes: 1.25% $65,313 $4.19 Insurance $3,876 $0.25 Trash $1,347 $0.09 Janitorial service $986 $0.06 Management $13,346 $0.89 Repairs & Maintenance $13,570 $0.87 Total Expenses $98,437 $6.31/$0.53 *Vacancy Rate does not include O Reilly Auto Parts FINANCING Loan Existing loan must be assumed Loan Amount $2,750,000 Terms 25 year amortization Interest Rate 4.875% Maturity 12/1/2040 Monthly Payment $15,877 Annual Payment $190,519 PROPERTY INFORMATION Address Sherman Way, Canoga Park Bldg SF 15,591 SF Lot SF 37,549 SF Year Built 1998 PRICING Sales Pricing $5,225,000 CAP Rate 5.20% Price/SF $ Occupancy 87% 18 19

11 SALES COMPARABLES ADDRESS SALES PRICE PRICE/SF BLDG SF LOT SF CLOSE OF ESCROW CAP RATE De Soto Avenue, Canoga Park $8,629,600 $ ,291 51,070 6/29/ Saticoy Street, Canoga Park $1,900,000 $ ,777 22,346 8/1/ Sherman Way, Winnetka $2,300,000 $ ,800 9,574 9/16/ % Topanga Canyon Boulevard, Canoga Park $2,150,000 $ ,818 13,669 11/23/ % Average $3,744,900 $ ,172 24, % 20 21

12 SALES COMPARABLES De Address Soto Avenue, Canoga Park Sales Price $8,629,600 Price/SF $ Bldg Sf 15,291 Lot Size 51,070 Close of Escrow 6/29/ Address Saticoy Street, Canoga Park Sales Price $1,900,000 Price/SF $ Bldg Sf 4,777 Lot Size 22,346 Close of Escrow 8/1/2017 SALES COMPARABLES PRICE/SF $ $ $ $ $ $ $ $ Address Sherman Way, Winnetka Sales Price $2,300,000 Price/SF $ Bldg Sf 5,800 Lot Size 9,574 Close of Escrow 9/16/2016 CAP Rate 6.58% Address Topanga Canyon Boulevard, Canoga Park Sales Price $2,150,000 Price/SF $ Bldg Sf 6,818 Lot Size 13,669 Close of Escrow 11/23/ % $ $ $ $ Average 22 23

13 RENT COMPARABLES ADDRESS RENT PER YR RENT PER MO LEASE TYPE SPACE AVAIL BLDG SF Sherman Way, Canoga Park $30.00 $2.50 NNN 483 8, Sherman Way, Canoga Park $24.00 $2.00 NNN 1,400 3, Sherman Way, Canoga park $16.80 $1.40 MG 4,500 4, Topanga Canyon Boulevard, Canoga Park $17.16 $1.43 MG 700 2, Sherman Way, Canoga Park $24.00 $2.00 NNN 1,000 11,216 Average $22.39 $1.87 1,617 5,

14 AREA OVERVIEW CANOGA PARK 4.35 Square miles 3 MILE $82,864 Average household income $95, Average household income Population MILE MILE 447,

15 AREA OVERVIEW AREA OVERVIEW CANOGA PARK Canoga Park is a neighborhood in the San Fernando Valley region of Los Angeles, California, Canoga Park is bordered by Woodland Hills on the south, West Hills on the west, Chatsworth on the north, and Winnetka on the east. Canoga Park is considered highly diverse for the city of Los Angeles and for the country. Canoga Park used to be home to aeriospace companies like Rocketdyne andatomics International. Canoga Park neighbors Warner Center, which is the central business center of the San Fernando Valley. WARNER CENTER Warner Center s central location and excellent freeway access make the sub-market a desirable and burgeoning office hub. Due to its outstanding living accommodations, desirable lifestyle amenities, and convenient access to public transportation, Woodland Hills/Warner Center has become a leading commercial center as well as a desirable place to live for residents. Warner Center employs a diverse range of sectors and is home to many high profile employers. Significant growth and development is occuring in Warner Center as the former Rocketdye Site is being developed into a $3-4 billion mixed-use, high-rise community. Westfield s new mixed use complex is also set to replace the aging Promenade shopping mall. The brand new development will bring 1,400 units of housing and two hotels to Warner Center. The redevelopment is part of a wave of projects spurred by the new Warner Center 2035 plan, which was designed to reinvent the western Valley s downtown as a more urban live-work community. MAJOR RETAIL IN THE IMMEDIATE AREA Westfield Topanga and the brand new The Village at Westfield Topanga is one of Southern California s largest shopping complexes. Westfield Topagna is the only center in the United States with a Neiman Marcus and flagship Nordstrom alongside Target, and is a power shopping paradise with a luxury lineup including Gucci, Tiffany & Co., Salvatore Ferragamo, Louis Vuitton, Cartier, Burberry, Jimmy Choo alongside Apple, Tesla, Tory Burch, Anthropologie, Free People, OMEGA, Splendid, Urban Outfitters and Lacoste. The Village showcases trendy local fashion and lifestyle brands, sensational restaurants offering al fresco patio dining, a full-service gym, spa and yoga studio, along with Costco, Crate & Barrel, a weekly farmer s market and more, all under a canopy of native trees and vegetation. With a combined square footage of over 2.5 million, Westfield offers the retail consumer a laundry list of high-end retailers and restaurant choices. It has transformed into a central gathering place for shopping, dining, entertainment and leisure and provides local residents and visitors a destination experience unlike any other in the San Fernando Valley. DEMOGRAPHICS 1 MILE 3 MILES 5 MILES 2014 Population 43, , , Households 13,437 75, , Average Household Size Daytime Population 16, , , Owner Occupied Housing Units 28.47% 50.82% 56.34% 2014 Renter Occupied Housing Units 71.53% 49.18% 43.66% 2014 Vacant 4.81% 3.24% 2.56% 2014 Median Household Income $44,165 $59,081 $63, Per Capita Income $18,642 $28,683 $33, Average Household Income $60,035 $82,864 $95,253 $ 0 - $14, % 10.0% 9.7% $ 15,000 - $24, % 10.0% 9.1% $ 25,000 - $34, % 9.3% 8.8% $ 35,000 - $49, % 13.0% 12.2% $ 50,000 - $74, % 19.6% 17.8% $ 75,000 - $99, % 12.8% 12.5% $100,000 - $124, % 9.0% 9.6% $125,000 - $149, % 5.8% 6.1% $150,000 - $199, % 5.5% 6.3% $200,000 - $249, % 2.1% 3.1% $250, % 3.1% 4.9% 28 29

16 AREA OVERVIEW AREA OVERVIEW SAN FERNANDO VALLEY Almost 2.5 million people reside in the San Fernando Valley, which includes the submarkets of Northridge-Northwest San Fernando Valley, Van Nuys-Northeast San Fernando Valley, Woodland Hills, Burbank-Glendale-Pasadena and Sherman Oaks-North Hollywood-Encino. The area s population is expected to increase by 1.9 percent through 2020, or by 47,400 new residents. Known for its entertainment industry, the Valley boasts more than 100 soundstages. Entertainment giants calling the Valley home include Walt Disney Co., Universal Studios, Warner Brothers, DreamWorks and Paramount Ranch. The entertainment industry continues to set the area s economic pulse. Local motion-picture and entertainment companies employ roughly 25,000 people. While the Valley has grown into the world s center for entertainment, aerospace giants Boeing and Northrop Grumman and 21st Century Insurance also generate numerous well-paying jobs. Healthcare is also a major source of employment with providers that include Kaiser Permanente and Providence Health & Services. As a result of its large concentration of high-salaries and successful companies, the area s median household income of$61,600 per year has risen dramatically in recent years. Although the median home prices dipped during the recession, affordability remains a challenge for much of the local population. High home prices keep the homeownership rate at 50 percent in the San Fernando Valley and provide a large rental base. SAN FERNANDO VALLEY MAJOR EMPLOYERS SAN FERNANDO VALLEY HIGHLIGHTS About 2.5 million residents in the San Fernando Valley Population growth projected of 45,000 new residents by 2019 in the San Fernando Valley Strong ties to the entertainment industry Home of Walt Disney Company, Universal Studios, Warner Brothers, DreamWorks and Paramount Ranch Local motion picture and entertainment companies employ roughly 25,000 people Aerospace (Boeing & Northrop Grumman) Insurance (21st Century Insurance) and Healthcare (Kaiser Permanente and Providence Health & Services) industries also generate numerous well-paying jobs Substantial income growth since 2000 Home ownership rate is near 50% and large rental base SFV SHARE OF TOTAL EMPLOYMENT Services 47% Retail Trade 17% Manufacturing 9% Finance, Insurance & Real Estate 8% Wholesale Trade 5% Public Administration 5% Transportation, Communications 5% Construction 5% DISTANCE TO: LOS ANGELES 16 miles PALM SPRINGS 124 Miles SANTA BARBARA 80 miles LAS VEGAS 280 miles SAN DIEGO 135 miles SACRAMENTO 370 miles

17 BRANDON MICHAELS Senior Managing Director Investments Senior Director, National Retail Group Tel: (818) License: CA # BRANDON MICHAELS GROUP