Peter A. McCuen Blvd. 10370 & 10390 Peter A. McCuen Boulevard · 10370 10390 PETER A. Mc CUEN...

10370 & 10390Peter A. McCuen Boulevard

Two Class A office buildings • ±178,494 sq. ft.SACRAMENTO, CALIFORNIA

Capital Markets | Investment PropertiesOFFERING MEMORANDUM

Peter A. McCuen Blvd.

10370

Peter A. McCuen Blvd.

10390

| 10370 & 10390 PETER A. McCUEN BOULEVARD2

INVESTMENT CONTACTS

RANDY GETZExecutive Vice PresidentLic. 00828903+1 916 446 [email protected]

MATT POSTSenior AssociateLic. 01899707+1 916 446 [email protected]

STUART WRIGHTSenior AssociateLic. 01451087+1 916 446 [email protected]

CBRE, Inc.500 Capitol MallSuite 2400Sacramento, CA 95814

10370 & 10390 PETER A. McCUEN BOULEVARD | 3

Executive Summary ..................................................... 5

Property Overview Highlights ....................................................................14 Property Description ....................................................16 Financial Overview ....................................................... 20 Tenant Profiles .............................................................31

Area Overview ........................................................... 33

Market Trends ........................................................... 39


EXECUTIVE SUMMARY


CBRE, Inc., as exclusive advisor, is pleased to offer for sale a two-building 178,494 square foot Class A office property

located within Mather Field Business Park in Sacramento County. 10370 and 10390 Peter A. McCuen Boulevard

(“McCuen Property”) is an office complex that has enjoyed strong historical occupancy since its development in 2008.

EXECUTIVE SUMMARY

OFFERING SUMMARY

PRICE $39,000,000

SQUARE FEET 178,494

PRICE PSF $218

CURRENTLY LEASED 100%

YEAR CONSTRUCTED 2008

KEY TENANTSEducational Credit Management Corporation, California Office of Emergency Services, ACS/Xerox

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INVESTMENT HIGHLIGHTS

BIDDING PROTOCOL

Ownership requests that initial expressions of interest be in the form of a non-binding Letter of Intent to CBRE, Inc. Offers

should identify the significant terms and conditions of the Bidder’s proposal including, at minimum, the following:

• Price and sources of funding (including debt and equity and relative ratios)

• Background and qualifications of bidder with transactional references

• Proposed time frames for due diligence, financing, and closing

• Offered at $39,000,000 ($218 per square foot)

• Recent tenant renewal and expansion

• Institutional quality asset

• High-credit quality tenants with staggered lease terms

• Great location in Mather campus environment with concentration of government tenants

• Strong historical occupancy and high tenant retention

• Excellent 15.63% projected leveraged return by assuming existing loan (4.435% interest rate; 56% LTV)

• High-quality construction; award-winning tilt panel design (Tilt-Up Concrete Association)

• Immediate Highway 50 freeway access; Mather Field off-ramp is an underutilized, low traffic exit

• Public transportation – Light Rail and Sacramento Regional Transit bus

• Significant tenant investment in leased space

• Abundant parking – 5 spaces per 1,000 rentable square feet

• 5.8% vacancy in Mather Field portion of Highway 50 Corridor

• Proximity to Mather Field Airport with capacity to land the largest jets

• Best-in-class property management, which is available to any prospective buyer


Downtown Sacramento

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Located approximately 85 miles northeast of San Francisco at the junction of Interstate 5 and

Interstate 80, Sacramento has convenient access to airports, rail, and a deep-water port. As the

capital of California, the region benefits from a strong government presence. Government jobs

make up more than 25% of the employment in the region and much of the State’s $171 billion

budget flows through Sacramento in some form. Sacramento has become increasingly attractive

to non-governmental industries including technology, life sciences, renewable energy, health care,

and education which have been drawn by the deep and well-educated labor pool, lower cost of

living, lack of seismic risk, and optimal location in proximity to other metropolitan areas throughout

the West.

AREA OVERVIEW

Newly developed Golden 1 Center in Downtown Sacramento


10370 & 10390 Peter A. McCuen Blvd.

Downtown Sacramento

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The McCuen Property

is situated within the

Highway 50 Corridor, the

largest office submarket

in Sacramento with 11.4

million square feet of office

buildings. The Highway 50

Corridor is an ideal location

for tenants seeking a lower-

cost alternative to the CBD,

ease of freeway access,

abundance of free parking,

proximity to light rail and

public transportation and

diverse housing alternatives

for employees and

executives. Because of these

features, the submarket has

long catered to government

and large corporate tenants

and been a focal point for

institutional investors.

More particularly, the

Property is located within

Mather Field, an area within

the Highway 50 Corridor.

There are 27 office buildings

in Mather Field totaling

approximately 1,200,000

square feet. Office vacancy

in Mather Field is 5.8% which

reflects strong demand for

office space in this location.

Downtown Sacramento

FOLSOM BLVD

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MATHER FIELD RD


Property Overview


CLASS A BUILDINGS WITH ABUNDANT PARKING

Built in 2008, the two Class A buildings that comprise the McCuen Property

sit on one 12.1-acre parcel and benefit from abundant parking, at 5

per 1,000 square feet. The McCuen Property was constructed using an

award-winning tilt-up panel design devised by Comstock Johnson and

LPA Sacramento and recognized by the Tilt-Up Concrete Association.

DESIRABLE LOCATION

The Property is strategically positioned with convenient freeway access

to Highway 50, one of the region’s major east-west routes. This access

allows employers to draw from several suburban residential areas and

provides direct access to Downtown Sacramento, only a 15-minute drive

to the west. Nearby public transit is essential to government tenants.

HIGHLIGHTS

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TENANT COMMITMENT

• California Office of Emergency Services, which has occupied

approximately 70% of the 10390 building since January 2012,

has a specialized LEED Gold-certified build-out in its suite that

includes room for the federal Department of Homeland Security.

In October 2015, Cal OES committed an additional $1,401,463

of its own funds to make further improvements to its space. The

Agency also owns a headquarters building a short distance away

within Mather. Cal OES’s lease runs through December 2026.

• Cal OES just expanded their footprint within the project by

backfilling the 25,880 usable square foot suite in the 10370

building within days after Sutter Health vacated. Cal OES is in

the process of committing to a new 8-year term in this suite until

2026.

• ECMC has leased space in the 10370 building since January

2011 and recently signed a 7-year renewal through December

2023. The space includes a dedicated 4,500 square foot

fitness center for the exclusive use of its employees.

• Instead of exercising its last 2-year renewal option, Xerox/ACS

just decided to further cement their commitment to the project

by signing a 5-year lease extension at rent over 28% higher

than their previous rent.

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ATTRACTIVE LOAN ASSUMPTION

The existing loan, to be assumed,

carries a 4.435% interest rate, matures

in February 2023, and requires a 44%

down payment.

HIGH LEVERAGED RETURN

Using the debt assumptions in our

DCF mode, Buyer’s leveraged return is

projected to be 15.63%.

PUBLIC TRANSPORTATION

The property connects to the Mather

Field/Mills Station Light Rail Station two

miles away by a Regional Transit bus line

that stops on the south side of McCuen

Blvd. Access to public transportation is

a high priority for government tenants.


PROPERTY DESCRIPTION

SUMMARY

ADDRESS 10370 & 10390 Peter A. McCuen Boulevard, Mather, CA 95655

CITY none

COUNTY Sacramento

PARCEL # 067-0990-001

LAND AREA 12.1 acres

BUILDING SQUARE FOOTAGE ±178,494

YEAR BUILT 2008

FLOOD ZONE X – outside 500-year floodplain

FLOORS 2

PARKING 872 spaces; ±5.00:1,000 SF parking ratio

ZONING SPA (MFSPA) – Mather Field Special Planning Area

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CONSTRUCTION DETAIL

ARCHITECT Comstock Johnson

GENERAL CONTRACTOR Ballance Construction

CONSTRUCTION TYPE Concrete tilt-up

EXTERIOR WALLS Concrete tilt-up panels with overlaying panels

FOUNDATION Reinforced concrete slab

ROOF Flat built-up roofing system

CEILING HEIGHT 9’ interior ceiling height

FLOOR PLATE Building 10370 – 56,120 SF per floor; Building 10390 – 33,127 SF per floor

INTERIOR FINISHES

Floor – commercial grade carpeting, slate

Walls – wallpaper/gypsum

Ceilings – lay-in acoustic panels

Lighting – fluorescent fixtures

ELEVATORSBuilding 10370 – 1 passenger elevator and 1 freight elevator;

Building 10390 – 1 passenger elevator

HVAC Two rooftop units in each building

SPRINKLERS/FIRE ALARM Fully sprinklered (wet pipe system); intrusion alarm

SECURITYCard access system in both buildings. Building 10370 includes a secured lobby/

foyer area with access control desk and glass wall

COLUMN SPACING 30’ x 32’

POWER SPECIFICATIONS 2400 amps per building

ADDITIONAL FEATURES

Building 10370 and part of Building 10390 served by back-up generator

maintained and operated by Landlord. Building 10390 has a back-up

generator only serving ACS/Xerox that is maintained and operated by Tenant.


10370 Peter A. McCuen Blvd.

10390 Peter A. McCuen

Blvd.

The McCuen Property is on the southeast line of Peter A. McCuen Boulevard, just southwest of Schriever Avenue.

Peter A. McCuen is a two-lane, fully improved arterial for the neighborhood. The Subject benefits from easy access

to Highway 50 approximately one mile north of site via nearby Mather Field Road.

SITE DESCRIPTION

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BUILDING 10370

Educational Credit Mgmt Corp 84,998 sf

Cal. Office Emergency Services 25,880 sf (usable)

BUILDING 10390

Xerox/ACS State & Local Solutions 19,103 sf

Cal. Office Emergency Services 43,102 sf (usable)

NOT TO SCALE -- ALL DIMENSIONS ARE APPROXIMATE.

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FINANCIAL OVERVIEW

You are solely responsible for independently verifying the information in this Memorandum. ANY RELIANCE ON IT IS SOLELY AT YOUR OWN RISK.

FINANCIAL SUMMARY

Purchase Price $39,000,000

Total Rentable Square Feet (1) 178,494

Price per Foot $218

Financing:

Type Existing, Assumable

Interest Rate - fixed 4.435%

Principal Balance as of July 2018 (56% LTV) $21,876,577

Down Payment (44% equity) $17,123,423

Amortization (months) 360

Maturity date February 1, 2023

Monthly Payment $121,685

Annual Payment $1,460,220

Current (2)

Scheduled Gross Income $4,251,590

plus projected expense reimbursements $38,301

Adjusted Scheduled Gross Income $4,289,891

less general vacancy loss $0

Effective Gross Income $4,289,891

less Operating Expenses ($1,424,572)

per square foot $8.23

Net Operating Income $2,865,319

Cap Rate 7.35%

Unleveraged IRR 9.73%

Leveraged IRR 15.63%

(1) The OES leases were converted from usable to rentable square footage for consistency purposes.(2) Current income represents Argus Year 1 figures.

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ANALYSIS ASSUMPTIONS

ANALYSIS TERM AND STARTING DATE: Ten years commencing July 2018

INFLATION RATES:

General: 3.0%

Market rent: 3.0%

Operating expenses: 3.0%

Property taxes: 2.0%

CURRENT MARKET RENT: $2.05 per square foot per month

RESERVES: $0.10 per square foot per year

OPERATING EXPENSES: Owner's 2018 budget, with taxes adjusted to reflect post-sale value and management fees based on 3% of EGI.

EXPENSE REIMBURSEMENTS

Current: The State (Cal OES) is on a gross lease with no reimbursements. The other tenants have full service leases and reimburse expenses pro-rata above a base year amount. ECMC has a 2016 Base Year but with an exclusion for any increase in property taxes as a result of a property sale. Xerox/ACS has a 2018 Base Year, but increases in "controllable expenses" are capped at 4% per year.

Future: Full service, with increases over a base year.

VACANCY ABSORPTION: none

ROLLOVER ASSUMPTIONS

Renewal probability: 75% standard; 90% for Cal OES.

Options: None considered.

Months dark: 6

Starting rent: 100% of fair market rent when the lease commences.

Escalations: Assumes rent is increased annually by $.05 per square foot per month.

T.I. Allowance: $40 per rentable square foot on new leases; $7 per square foot on renewals.

Concessions: None

Term length: 7 years.

Leasing commissions: 6% of base rent on the first five years and 3% on the remaining years.

GENERAL VACANCY RATE: None; natural as leases roll.

DEBT / REFINANCING: Assumes existing debt ($22m outstanding; 4.435% int; 30-yr amort; due Feb 2023) is assumed. Also assumes buyer refinances in Feb 2023 at 65% LTV, 5% interest, 30-yr amort, due in 10 years, and pays 1% loan origination fee.

REVERSION:

Terminal capitalization rate: 7.00%

Present value discounting method: Annually, midpoint on cash flow; endpoint on resale

Costs of Sale: 1.5% of purchase price.


PROJECTED CASH FLOW

Schedule Of Prospective Cash Flow In Inflated Dollars for the Fiscal Year Beginning 7/1/2018

YEAR 1 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 YEAR 11

FOR THE YEARS ENDING $/SF/YR JUN-2019 JUN-2020 JUN-2021 JUN-2022 JUN-2023 JUN-2024 JUN-2025 JUN-2026 JUN-2027 JUN-2028 JUN-2029

Potential Gross Revenue

Base Rental Revenue $24.56 $4,251,590 $4,282,537 $4,301,086 $4,399,319 $4,496,459 $4,701,410 $4,972,883 $4,983,396 $5,041,089 $5,094,932 $5,094,932

Absorption & Turnover Vacancy 0.00 (494,795) (65,250) (111,931)

Scheduled Base Rental Revenue 24.56 4,251,590 4,282,537 4,301,086 4,399,319 4,496,459 4,206,615 4,972,883 4,918,146 4,929,158 5,094,932 5,094,932

Base Rental Step Revenue 26,552 89,011 156,648 245,412 349,263

Expense Reimbursement Revenue 0.22 38,301 57,447 75,854 96,211 115,549 57,369 20,449 48,642 77,872 138,205 223,888

Total Potential Gross Revenue 24.79 4,289,891 4,339,984 4,376,940 4,495,530 4,612,008 4,263,984 5,019,884 5,055,799 5,163,678 5,478,549 5,668,083

Effective Gross Revenue 24.79 4,289,891 4,339,984 4,376,940 4,495,530 4,612,008 4,263,984 5,019,884 5,055,799 5,163,678 5,478,549 5,668,083

Operating Expenses

Ad valorem Property Taxes 0.24 456,807 465,943 475,262 484,767 494,463 504,352 514,439 524,728 535,222 545,927 628,520

Direct Levies 1.76 41,220 41,220 41,220 41,220 41,220 41,220 41,220 41,220 41,220 41,220 41,220

Utilities - Electric & Gas 0.19 304,219 313,346 322,746 332,428 342,401 324,391 363,253 370,421 378,978 396,937 408,845

Sewer, Water 0.17 33,003 33,993 35,013 36,063 37,145 38,260 39,407 40,590 41,807 43,061 44,353

Trash 0.22 28,800 29,664 30,554 31,471 32,415 33,387 34,389 35,420 36,483 37,577 38,705

Insurance 0.74 38,087 39,230 40,406 41,619 42,867 44,153 45,478 46,842 48,247 49,695 51,186

Property Management 0.34 128,697 130,200 131,308 134,866 138,360 127,920 150,597 151,674 154,910 164,356 170,042

Repairs & Maintenance 1.03 59,220 60,997 62,826 64,711 66,653 65,899 70,712 72,470 74,395 77,269 79,587

Janitorial/Cleaning 0.11 178,656 184,016 189,536 195,222 201,079 192,578 213,325 217,808 223,029 233,106 240,099

Carpet cleaning 0.04 18,989 19,559 20,145 20,750 21,372 22,013 22,674 23,354 24,055 24,776 25,520

Elevator Repair 0.21 7,647 7,876 8,113 8,356 8,607 8,865 9,131 9,405 9,687 9,978 10,277

HVAC 0.35 35,704 36,775 37,878 39,015 40,185 40,353 42,632 43,775 44,994 46,586 47,983

Landscaping/Parking 0.04 60,880 62,706 64,588 66,525 68,521 70,577 72,694 74,875 77,121 79,435 81,818

Window Washing 0.12 7,080 7,292 7,511 7,737 7,969 8,208 8,454 8,708 8,969 9,238 9,515

Telephone for HVAC/Elev/Fire 0.02 20,160 20,765 21,388 22,029 22,690 23,371 24,072 24,794 25,538 26,304 27,093

Fire/Life Safety 0.01 2,955 3,044 3,135 3,229 3,326 3,426 3,528 3,634 3,743 3,856 3,971

Pest Control 0.01 2,448 2,521 2,597 2,675 2,755 2,838 2,923 3,011 3,101 3,194 3,290

Total Operating Expenses 8.23 1,424,572 1,459,147 1,494,226 1,532,683 1,572,028 1,551,811 1,658,928 1,692,729 1,731,499 1,792,515 1,912,024

Net Operating Income 16.55 2,865,319 2,880,837 2,882,714 2,962,847 3,039,980 2,712,173 3,360,956 3,363,070 3,432,179 3,686,034 3,756,059

Debt Service

Interest Payments 2.89 960,142 937,508 913,848 889,118 1,051,124 1,404,022 1,382,216 1,359,295 1,335,202 1,309,876

Principal Payments 0.00 500,077 522,712 546,372 571,102 532,431 426,202 448,008 470,929 495,022 520,348

Origination Points & Fees 284,114

Total Debt Service 8.44 1,460,219 1,460,220 1,460,220 1,460,220 1,867,669 1,830,224 1,830,224 1,830,224 1,830,224 1,830,224

Leasing & Capital Costs

Tenant Improvements 0.00 1,840,395 327,840 562,383

Leasing Commissions 0.10 165,698 17,421 29,836

CapEx Reserve at $0.10/sf 0.10 17,308 17,828 18,362 18,913 19,481 20,065 20,667 21,287 21,926 22,583 23,261

Total Leasing & Capital Costs 0.10 17,308 17,828 18,362 18,913 19,481 2,026,158 20,667 366,548 614,145 22,583 23,261

Cash Flow After Debt ServiceBut Before Taxes $8.02 $1,387,792 $1,402,789 $1,404,132 $1,483,714 $1,152,830 ($1,144,209) $1,510,065 $1,166,298 $987,810 $1,833,227 $3,732,798

Revenue/Expense Notes 2016 ad valorem taxes ECM has a 2016 base year with Prop. 13 protection. ECM will pay a pro rata share of increases over 2016 taxes ignoring any increase due to sale or transfer. This amount increases 2%/year. Amount shown is inflated taxable amount as of April 2018.


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Schedule Of Prospective Cash Flow In Inflated Dollars for the Fiscal Year Beginning 7/1/2018

YEAR 1 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 YEAR 11

FOR THE YEARS ENDING $/SF/YR JUN-2019 JUN-2020 JUN-2021 JUN-2022 JUN-2023 JUN-2024 JUN-2025 JUN-2026 JUN-2027 JUN-2028 JUN-2029

Potential Gross Revenue

Base Rental Revenue $24.56 $4,251,590 $4,282,537 $4,301,086 $4,399,319 $4,496,459 $4,701,410 $4,972,883 $4,983,396 $5,041,089 $5,094,932 $5,094,932

Absorption & Turnover Vacancy 0.00 (494,795) (65,250) (111,931)

Scheduled Base Rental Revenue 24.56 4,251,590 4,282,537 4,301,086 4,399,319 4,496,459 4,206,615 4,972,883 4,918,146 4,929,158 5,094,932 5,094,932

Base Rental Step Revenue 26,552 89,011 156,648 245,412 349,263

Expense Reimbursement Revenue 0.22 38,301 57,447 75,854 96,211 115,549 57,369 20,449 48,642 77,872 138,205 223,888

Total Potential Gross Revenue 24.79 4,289,891 4,339,984 4,376,940 4,495,530 4,612,008 4,263,984 5,019,884 5,055,799 5,163,678 5,478,549 5,668,083

Effective Gross Revenue 24.79 4,289,891 4,339,984 4,376,940 4,495,530 4,612,008 4,263,984 5,019,884 5,055,799 5,163,678 5,478,549 5,668,083

Operating Expenses

Ad valorem Property Taxes 0.24 456,807 465,943 475,262 484,767 494,463 504,352 514,439 524,728 535,222 545,927 628,520

Direct Levies 1.76 41,220 41,220 41,220 41,220 41,220 41,220 41,220 41,220 41,220 41,220 41,220

Utilities - Electric & Gas 0.19 304,219 313,346 322,746 332,428 342,401 324,391 363,253 370,421 378,978 396,937 408,845

Sewer, Water 0.17 33,003 33,993 35,013 36,063 37,145 38,260 39,407 40,590 41,807 43,061 44,353

Trash 0.22 28,800 29,664 30,554 31,471 32,415 33,387 34,389 35,420 36,483 37,577 38,705

Insurance 0.74 38,087 39,230 40,406 41,619 42,867 44,153 45,478 46,842 48,247 49,695 51,186

Property Management 0.34 128,697 130,200 131,308 134,866 138,360 127,920 150,597 151,674 154,910 164,356 170,042

Repairs & Maintenance 1.03 59,220 60,997 62,826 64,711 66,653 65,899 70,712 72,470 74,395 77,269 79,587

Janitorial/Cleaning 0.11 178,656 184,016 189,536 195,222 201,079 192,578 213,325 217,808 223,029 233,106 240,099

Carpet cleaning 0.04 18,989 19,559 20,145 20,750 21,372 22,013 22,674 23,354 24,055 24,776 25,520

Elevator Repair 0.21 7,647 7,876 8,113 8,356 8,607 8,865 9,131 9,405 9,687 9,978 10,277

HVAC 0.35 35,704 36,775 37,878 39,015 40,185 40,353 42,632 43,775 44,994 46,586 47,983

Landscaping/Parking 0.04 60,880 62,706 64,588 66,525 68,521 70,577 72,694 74,875 77,121 79,435 81,818

Window Washing 0.12 7,080 7,292 7,511 7,737 7,969 8,208 8,454 8,708 8,969 9,238 9,515

Telephone for HVAC/Elev/Fire 0.02 20,160 20,765 21,388 22,029 22,690 23,371 24,072 24,794 25,538 26,304 27,093

Fire/Life Safety 0.01 2,955 3,044 3,135 3,229 3,326 3,426 3,528 3,634 3,743 3,856 3,971

Pest Control 0.01 2,448 2,521 2,597 2,675 2,755 2,838 2,923 3,011 3,101 3,194 3,290

Total Operating Expenses 8.23 1,424,572 1,459,147 1,494,226 1,532,683 1,572,028 1,551,811 1,658,928 1,692,729 1,731,499 1,792,515 1,912,024

Net Operating Income 16.55 2,865,319 2,880,837 2,882,714 2,962,847 3,039,980 2,712,173 3,360,956 3,363,070 3,432,179 3,686,034 3,756,059

Debt Service

Interest Payments 2.89 960,142 937,508 913,848 889,118 1,051,124 1,404,022 1,382,216 1,359,295 1,335,202 1,309,876

Principal Payments 0.00 500,077 522,712 546,372 571,102 532,431 426,202 448,008 470,929 495,022 520,348


Total Debt Service 8.44 1,460,219 1,460,220 1,460,220 1,460,220 1,867,669 1,830,224 1,830,224 1,830,224 1,830,224 1,830,224

Leasing & Capital Costs

Tenant Improvements 0.00 1,840,395 327,840 562,383

Leasing Commissions 0.10 165,698 17,421 29,836

CapEx Reserve at $0.10/sf 0.10 17,308 17,828 18,362 18,913 19,481 20,065 20,667 21,287 21,926 22,583 23,261

Total Leasing & Capital Costs 0.10 17,308 17,828 18,362 18,913 19,481 2,026,158 20,667 366,548 614,145 22,583 23,261

Cash Flow After Debt ServiceBut Before Taxes $8.02 $1,387,792 $1,402,789 $1,404,132 $1,483,714 $1,152,830 ($1,144,209) $1,510,065 $1,166,298 $987,810 $1,833,227 $3,732,798

Revenue/Expense Notes 2016 ad valorem taxes ECM has a 2016 base year with Prop. 13 protection. ECM will pay a pro rata share of increases over 2016 taxes ignoring any increase due to sale or transfer. This amount increases 2%/year. Amount shown is inflated taxable amount as of April 2018.


RESALE AND IRR

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10

FOR THE YEARS ENDING JUN-2019 JUN-2020 JUN-2021 JUN-2022 JUN-2023 JUN-2024 JUN-2025 JUN-2026 JUN-2027 JUN-2028

Resale Amount

Gross Proceeds from Sale $41,154,814 $41,181,629 $42,326,386 $43,428,286 $38,745,329 $48,013,657 $48,043,857 $49,031,129 $52,657,629 $53,657,986

Commissions & Adjustments (617,322) (617,724) (634,896) (651,424) (581,180) (720,205) (720,658) (735,467) (789,864) (804,870)

Net Proceeds From Sale 40,537,492 40,563,905 41,691,490 42,776,862 38,164,149 47,293,452 47,323,199 48,295,662 51,867,765 52,853,116

Outstanding Debt Retirement

Total Principal Balances (21,376,500) (20,853,788) (20,307,417) (19,736,316) (28,274,018) (27,847,815) (27,399,808) (26,928,878) (26,433,856) (25,913,508)

Net Resale Proceeds After Debt $19,160,992 $19,710,117 $21,384,073 $23,040,546 $9,890,131 $19,445,637 $19,923,391 $21,366,784 $25,433,909 $26,939,608

Unleveraged Annual IRR 11.66% 9.58% 9.77% 9.82% 7.34% 9.79% 9.50% 9.41% 9.77% 9.73%

Leveraged Annual IRR 20.81% 15.77% 15.89% 15.73% 10.62% 15.78% 15.31% 15.16% 15.77% 15.63%

Note: All resale values are calculated using the following year Proposition 13 expense value as shown on the Schedule of Prospective Cash Flow Report.

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Resale Amount

Gross Proceeds from Sale $41,154,814 $41,181,629 $42,326,386 $43,428,286 $38,745,329 $48,013,657 $48,043,857 $49,031,129 $52,657,629 $53,657,986

Commissions & Adjustments (617,322) (617,724) (634,896) (651,424) (581,180) (720,205) (720,658) (735,467) (789,864) (804,870)

Net Proceeds From Sale 40,537,492 40,563,905 41,691,490 42,776,862 38,164,149 47,293,452 47,323,199 48,295,662 51,867,765 52,853,116

Outstanding Debt Retirement

Total Principal Balances (21,376,500) (20,853,788) (20,307,417) (19,736,316) (28,274,018) (27,847,815) (27,399,808) (26,928,878) (26,433,856) (25,913,508)

Net Resale Proceeds After Debt $19,160,992 $19,710,117 $21,384,073 $23,040,546 $9,890,131 $19,445,637 $19,923,391 $21,366,784 $25,433,909 $26,939,608

Unleveraged Annual IRR 11.66% 9.58% 9.77% 9.82% 7.34% 9.79% 9.50% 9.41% 9.77% 9.73%

Leveraged Annual IRR 20.81% 15.77% 15.89% 15.73% 10.62% 15.78% 15.31% 15.16% 15.77% 15.63%

Note: All resale values are calculated using the following year Proposition 13 expense value as shown on the Schedule of Prospective Cash Flow Report.

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RENT ROLL


Presentation Rent Roll & Current Term Tenant Summary As of Jul-2018

TENANT NAMETYPE & SUITE NUMBERLEASE DATES & TERM

SQFTBLDG SHARE

RATE & AMOUNTPER YEAR

PER MONTH CHANGES ON CHANGES TO RECOVER METHOD

ASSUMPTION ABOUT SUBSEQUENT TERMS

FOR THIS TENANT NOTES

1 Educational Credit Mg $17.40 Jan-2018 $19.20 ECMC - 2016 Base Year with Prop 13 protection

Market See assumption:

MLA1

Tenant has one-time right to terminate on or after 12/31/21 with payment of penalty (Para. 2.4 of First Amendment to Lease).

Office, Suite: Bld 103 84,998 $1,478,965 Jul-2018 $19.80

Jan-2011 to Dec-2023 49.11% $1.60 Jul-2019 $20.40

156 Months $123,247 Jul-2020 $21.00

Jul-2021 $21.60

Jul-2022 $22.20

Jul-2023 $22.80

2 Cal. Office Emergency $25.80 Jan-2019 $26.40 Full Service: No reimbursement


Cal OES

Tenant has short term lease extension in place and will sign new 8-year extension once proper DGS approvals are obtained. Analysis assumes new 8-year lease began Feb 2018 on the terms set forth herein.

Office, Suite: Bld 103 25,880 $667,704 Jan-2020 $27.00

Feb-2018 to Jan-2026 14.95% $2.15 Jan-2021 $27.60

96 Months $55,642 Jan-2022 $28.20

Jan-2023 $28.80

Jan-2024 $29.40

Jan-2025 $30.00

3 Xerox/ACS State & Loc $30.80 Jun-2019 $31.73 Xerox/ACS - 2018 Base Year, but increases in controllable expenses capped at 4%/yr


MLA1

ACS reimbursement calcs are modeled using aggregated expenses for both buildings.

Office, Suite: Bld 103 19,103 $588,449 Jun-2020 $32.68

Jun-2011 to Jun-2023 11.04% $2.57 Jun-2021 $33.66

145 Months $49,037 Jun-2022 $34.67

4 Cal. Office Emergency $29.34 Jan-2018 $29.94 Full Service: No reimbursement


Cal OES

Cal OES has the option to terminate this lease at any time on or after 12/31/19. Cal OES financed $950,000 for modular systems furniture as part of its rent. The monthly rent was increased $13,189.68 for 8 years (the firm term of the lease) to fully amortize that cost at a 7.5% annual rate.

Office, Suite: Bld 103 43,102 $1,264,451 Jan-2019 $30.54

Jan-2012 to Dec-2026 24.90% $2.44 Jan-2020 $27.46

180 Months $105,371 Jan-2022 $28.06

Jan-2024 $28.66

Total Occupied SqFt 173,083 (1)

(1) Square footage shown for Cal. OES is “usable”.




Minimum Debt Service

Interest Payments $960,142 $937,508 $913,848 $889,118 $578,456

Principal Payments 500,077 522,712 546,372 571,102 395,024

Total Minimum Debt Service 1,460,219 1,460,220 1,460,220 1,460,220 973,480

Reductions & Retirement

Principal Balloon or Call 19,341,291

Total Reductions & Retirement 19,341,291

Total Cash Flow Paid To Lender $1,460,219 $1,460,220 $1,460,220 $1,460,220 $20,314,771

Principal Balance Summary

Beginning Principal Balance $21,876,577 $21,376,500 $20,853,789 $20,307,418 $19,736,315

Periodic Principal Reductions (500,077) (522,712) (546,372) (571,102) (395,024)

Principal Balloon Payments (19,341,291)

Ending Principal Balance $21,376,500 $20,853,788 $20,307,417 $19,736,316

Interest Rates

Interest Rate on Principal 4.44% 4.44% 4.44% 4.44% 2.96%

Cash Flow Coverage Ratios

Cash to Total Interest Charged 298.43% 307.29% 315.45% 333.23% 525.53%

Cash to Minimum Debt Service 196.23% 197.29% 197.42% 202.90% 312.28%

Loan To Value Ratios

Loan to Purchase Price 56.09% 54.81% 53.47% 52.07% 50.61%

Loan to Capitalized Value 53.44% 51.94% 50.64% 47.98% 45.45%

Loan to Lowest Present Value 58.94% 57.60% 56.19% 54.72% 53.18%

Loan to Highest Present Value 53.31% 52.09% 50.82% 49.49% 48.09%

Lenders Yields (IRR)

Base Yield to Maturity 4.44%

INDIVIDUAL LOAN AND DEBT SERVICE SUMMARY

Loan Number 1 - Existing Loan

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Minimum Debt Service

Interest Payments $472,668 $1,404,022 $1,382,216 $1,359,295 $1,335,202 $1,309,876

Principal Payments 137,407 426,202 448,008 470,929 495,022 520,348

Total Minimum Debt Service 610,075 1,830,224 1,830,224 1,830,224 1,830,224 1,830,224

Fees & Contingencies


Total Fees & Contingencies 284,114

Reductions & Retirement

Principal Balloon or Call 25,913,508

Total Reductions & Retirement 25,913,508

Total Cash Flow Paid To Lender $894,189 $1,830,224 $1,830,224 $1,830,224 $1,830,224 $27,743,732

Principal Balance Summary

Beginning Principal Balance $28,411,425 $28,274,017 $27,847,816 $27,399,807 $26,928,878 $26,433,856

Periodic Principal Reductions (137,407) (426,202) (448,008) (470,929) (495,022) (520,348)

Principal Balloon Payments (25,913,508)

Ending Principal Balance $28,274,018 $27,847,815 $27,399,808 $26,928,878 $26,433,856

Interest Rates

Interest Rate on Principal 1.67% 5.00% 5.00% 5.00% 5.00% 5.00%

Cash Flow Coverage Ratios

Cash to Total Interest Charged 643.15% 193.17% 243.16% 247.41% 257.05% 281.40%

Cash to Minimum Debt Service 498.30% 148.19% 183.64% 183.75% 187.53% 201.40%

Loan To Value Ratios

Loan to Purchase Price 72.85% 72.50% 71.40% 70.26% 69.05% 67.78%

Loan to Capitalized Value 65.42% 72.97% 58.00% 57.03% 54.92% 50.20%

Loan to Lowest Present Value 76.55% 76.18% 75.03% 73.82% 72.56% 71.22%

Loan to Highest Present Value 69.23% 68.90% 67.86% 66.77% 65.62% 64.42%

Lenders Yields (IRR)

Base Yield to Maturity 5.00%

Including Fees & Penalties 5.22%

Loan Number 2 - Refinance

INDIVIDUAL LOAN AND DEBT SERVICE SUMMARY

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TENANT PROFILES

EDUCATIONAL CREDIT MANAGEMENT CORPORATIONwww.ecmc.org

10370 Peter A. McCuen Blvd Square Footage: 84,998 Lease Expiration: Dec-23

Established in 1994, ECMC is a non-profit company that provides support for the administration of the Federal Family Education Loan (FFEL) Program as a student loan guaranty agency. ECMC also sponsors programs to help students and families plan and pay for college. In 2010, ECMC assumed responsibility for the FFEL Program guaranty portfolio. Accordingly, federal student loans guaranteed by the California Student Aid Commission and serviced by EdFund were transferred to ECMC.

XEROX STATE & LOCAL SOLUTIONS, INC.www.xerox.com

10390 Peter A. McCuen BlvdSquare Footage: 19,103Lease Expiration: Jun-23

Xerox State & Local Solutions, Inc. provides administrative and healthcare services. The Company’s services include solutions for human services such as eligibility determination and case management, electronic payment card services, customer care, and child support services; solutions for transportation including, electronic toll collection, parking management, weigh-in-motion, and credential verification and public safety and justice solutions. The Company also offers healthcare solutions including health program administration and pharmacy benefits management. The Company was formerly known as ACS State & Local Solutions, Inc. and changed its name to Xerox State & Local Solutions, Inc. in April, 2012.

Lease Guarantor: Affiliated Computer Services Inc. (which merged with Xerox in 2010)

STATE OF CALIFORNIA - GOVERNOR’S OFFICE OF EMERGENCY SERVICESwww.caloes.ca.gov

10370 & 10390 Peter A. McCuen Blvd Square Footage: 68,982 (usable) Lease Expiration: Jan-26 & Dec-26

The Governor’s Office of Emergency Services administers numerous programs to address threats and risks to California’s people, property, economy and environment. The office coordinates overall state agency and local government response to disasters. This office has been renamed a number of times throughout its over 70-year history. Most recently, from 2009 until 2013, the office was known as the California Emergency Management Agency.

http://www.ecmc.org

http://www.xerox.com

http://www.caloes.ca.gov


Area Overview


SACRAMENTO MARKET

Sacramento, with an estimated population of 2,207,469 residents, is the cultural and economic center of the

Sacramento Metropolitan Area (MSA) which includes seven counties. Its metropolitan area is the 4th largest in

California after the Greater Los Angeles, San Francisco Bay, and the San Diego Metropolitan Areas and the 25th

largest in the United States. Sacramento benefits from a strong government employment base, a deep and well-

educated labor pool and an affordable cost of living. Located approximately 85 miles northeast of San Francisco at

the junction of Interstate 5 and 80, Sacramento has convenient access to airports, rail and a deep-water port.

Sacramento boasts an increasingly diversified economy with traditional and innovative economic activity that provides

stability and growth to the market. The Region is quickly developing into a world-class technology community with

specific competitive advantages in renewable energy, health care, biotechnology and agricultural and food sciences.

SACRAMENTO REGION’S COMPETITIVE ADVANTAGES

• California’s Policy HQ – Home base for federal and state agencies and departments as well as executive

and legislative arms of state government.

• Affordability – The most affordable of California’s major metro areas, from business costs to costs of living.

• Talented Workforce – Employers can draw from world-class universities, including University of California

at Davis and California State University, Sacramento.

• Strong Education – UC Davis, Sacramento State and several community colleges provide over 150,000

students with a diverse, world-class education.

• Optimal Logistics Location – Strategic location at the intersection of I-5 and I-80 with a strong air, roadway,

rail, and waterway transportation system.

TOP EMPLOYERS

Some of the top public and private employers in the Sacramento area are tenants at the Mather Portfolio buildings.

PUBLIC PRIVATE

Federal....................... 13,732

State ........................ 115,362

Local ........................ 102,882

University of California, Davis ........................................ 12,639

Sutter Health Sacramento Region ................................... 11,242

UC Davis Health System .................................................. 9,905

Kaiser Permanente .......................................................... 9,247

Intel Corp. ...................................................................... 6,000

Raley’s Inc. ..................................................................... 5,507

Dignity Health................................................................. 5,212

California State University, Sacramento ............................ 2,999

Source: Sacramento Business Journal, 2015 Book of Lists

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MAJOR REDEVELOPMENT ACTIVITY

• Downtown Arena – The new downtown entertainment and sports arena, Golden 1 Center, has created a swell

of activity and attracted the interest of investors and developers not previously in this market. The Golden

1 Center, built at a cost of $588 million and home to the NBA’s Sacramento Kings, is an indoor-outdoor

multi-use facility that accommodates sporting and entertainment events such as professional and collegiate

sports, concerts, ice shows, indoor rodeo, trade shows, large graduations, family shows, and other indoor

entertainment. The Center will host approximately 240 events per year. In addition, the partnership that

owns the Sacramento Kings is constructing a mixed-use development next door dubbed DOCO (Downtown

Commons) that includes a new 250-room Kimpton hotel, 475,000 square feet of office space, 350,000

square feet of retail and up to 500,000 square feet for residential units.

• Sacramento Railyards – This 244-acre former Union Pacific rail yard is the largest infill project in the country

and is adjacent to Sacramento’s downtown. Currently undergoing infrastructure improvements, the Railyards

will essentially double the size of downtown and be a mixed-use hub for entertainment, retail, housing, office,

theaters, parks, museums, and hotels. Kaiser Permanente recently purchased 18 acres in the northwest

corner of the Railyards near Interstate 5 for a new hospital campus.

These two major developments in downtown Sacramento will increase office rents and parking rates which will

motivate tenants to seek lower cost alternatives such as the Highway 50 submarket.

Rendering courtesy SacramentoESC.com

A mixed-use development next door to the Golden 1 Center will include a hotel, office, retail, and residential space.


HIGHWAY 50 CORRIDOR

The McCuen Property is situated within the Highway 50 Corridor submarket which consists of 11.4 million square feet.

The Highway 50 Corridor generally extends from Howe Avenue on the western end to Hazel Avenue on the eastern

end. The largest submarket in the Sacramento MSA, the Highway 50 Corridor is an ideal location for tenants seeking

a lower-cost alternative to the CBD, ease of freeway access, abundant free parking, proximity to public transportation

and diverse housing alternatives for employees and executives. Large floor plate users find the submarket attractive

due to the many options available.

NMAP NOT TO SCALE

Highway 50 Corridor

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MATHER FIELD

Existing Buildings

Future Buildings

Church

To Independence Homes,Golf Course and Regional Park

ComstockJohnson

Architects

1-28-13Map not to scale

EMD

BloodSource

MatherSports

Complex

MatherSports

Complex

VA Medical Center

General AviationAircraft ApronCargo Aircraft

Apron

OLD PLACERVILLE ROAD

MACREADY WAY

MATHER BLVD

MATHER BLVD

NORDEN AVE NORDEN AVE

MATHER BLVD

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vARMSTRONG AVE

PETER A McCUEN BLVD

PETER A McCUEN BLVD

MATHER FIELD ROAD

ToUS HWY 50

V

INTERNATIONAL DRIVE To Zinfandel Drive

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BloodSourceLaboratories

CAL EMA

SCHRIEVER AV

MatherCommunity

CampusMather

CommunityCampus

V

ECMC/Sutter

CALEMA/ACS

Sac Metro Fire

Health Club

SutterConnect

SutterConnect

Sutter

VA MedicalCenter

ContractorsLicensing

School

Cal ArmyNat'l Guard

Rex Moore

50,000

100,

000+

/-

70,000+/-

70,0

00+/

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30,000

Sutter

Nor CalSheet Metal

For over 70 years, Mather Air Force Base played

a significant role in the defense of the nation as

well as the economic base of the Sacramento

region. After the air base was closed in 1993,

Sacramento County initiated a comprehensive

reuse planning effort and in May 1997 the

Sacramento County Mather Field Specific

Plan was established to set the guidelines for

conversion of the base from military to private

uses. Consisting of approximately 5,716 acres,

the Mather Field complex has been transformed

into mixed commercial, industrial, recreation

and residential land uses. Government-

related tenants occupy a large percentage of

the office space in Mather Field, creating a

campus environment where agencies and their

employees can easily connect. Below is a site

map for that portion of Mather Field north of

the airstrip.

McCuen Property


10370 & 10390 Peter A. McCuen Blvd.

Downtown Sacramento

PETER A M

cCUEN

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Downtown Sacramento

FOLSOM BLVD

50

MATHER FIELD RD

Market Trends


SACRAMENTO MARKET

Sacramento’s office market recorded 506,144 square feet of positive absorption in 2017 and ended Q1 2018

with 45,796 square feet more. 2017 represents the 6th straight year of positive net absorption. The vacancy rate

decreased in Q1 2018 to 12.8%, down ten basis points from the previous quarter. This represents the lowest

vacancy rate in the market since Q4 2007. The average asking lease rate currently sits at $1.86 full service gross,

with Class A asking rents increasing to $2.22.

The continued tightening of Sacramento’s Central Business District, with its higher lease rates, costly and limited

parking options, and lack of available office space has prompted more leasing activity in the suburbs. The positive

absorption seen most recently in Sacramento is due largely to healthy suburban leasing activity. While market

asking rates have stabilized, achieved rents are increasing throughout the market. While nationally it is expected

that overbuilding and softening tenant requirements will result in an increase in vacancy in the near-term, the

Sacramento market will likely be protected from this due to a lack of new office construction.

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The McCuen Property is located

within Mather Field, an area

within the Highway 50 submarket.

There are approximately 27 office

buildings in Mather Field, totaling

approximately 1,200,000 square

feet. Current office vacancy in

Mather Field is 5.8% which reflects

the desirability of the location.

Vacancy of Class A office properties

in the Highway 50 submarket as of

Q1 2017 is 10.7%, slightly higher

than the market wide vacancy rate

for Class A of 9.6%. Average asking

HIGHWAY 50 SUBMARKET

VACANCY/RENTAL RATE ANALYSIS

HISTORICAL NET ABSORPTION - HWY 50 CORRIDOR OFFICE SUBMARKET

Source: CBRE Research, Q1 2018

NO NEW CONSTRUCTION

No Class A buildings have been delivered to the

Highway 50 Submarket since 2012 and none are under

construction in the submarket at this time. However,

development just began on a 230,000 square foot

California Military Department headquarters at 10100

Bear Hollow Drive, which is two blocks east of 10590

Armstrong Avenue. This 31-acre complex will house

the California Air National Guard, California Army

National Guard, California State Military Reserve

and the California Military Department’s youth and

community programs. This design-build project is set

for completion by Fall 2020 and about 500 employees

will be on site daily.

INSTITUTIONAL OWNERSHIP

The enduring strength of the Highway 50 Submarket is

evidenced by the high number of institutional investors

who own office properties in this area, including:

FUTURE HOUSING DEVELOPMENT

Rancho Cordova is one of Sacramento’s largest bedroom communities with over 65,000 residents and plans are in

progress to make it larger. Residential developers are planning to build 3,000 homes on 900 acres south of Mather

Airport, which will include commercial lots, greenways and parks, and a sporting complex. These developments

include projects by Richmond American Homes, Woodside Homes, and Lennar.

• KBS

• Griffin Capital

• UBS

• Deutsche Asset & Wealth Management

• Panattoni

• Eaton Vance

• CalPERS

• Divco West

• Hines

rents in Highway 50 for Class A properties have steadily climbed to $1.88 full service gross and appear poised to

continue increasing given the labor shortage and lack of new construction. Net absorption in Highway 50 for all

classes in 2017 was positive 316,460 square feet and Q1 2018 has brought an additional 55,708 positive square feet.

HIGHWAY 50 CORRIDOR OFFICE SUBMARKET10-Year Historical YTD Net Absorption

(73,303)

(183,004)

(426,586)

(6,466)

(355,534)

178,622 246,632

52,551

435,809

(173,335)

316,460

55,708

(500,000)

(400,000)

(300,000)

(200,000)

(100,000)

0

100,000

200,000

300,000

400,000

500,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: CBRE Research, Q4 2017.


LEASE COMPS

2882 PROSPECT PARK DR RANCHO CORDOVA

10391 PETER A. MCCUEN BLVD MATHER

3100 ZINFANDEL DR RANCHO CORDOVA

2920 KILGORE RD RANCHO CORDOVA

10730 INTERNATIONAL DR RANCHO CORDOVA


YEAR BUILT 1999 2009 1990 1993 2001 1988

TENANT VITEK Real Estate Sutter Health Farmers Insurance Dept of Consumer Affairs Centene GEI Consultants

SF 19,716 106,592 12,129 47,172 100,000 28,897

MONTHLY RATE $1.85/SF $1.39/SF $1.90/SF $2.09/SF $1.95/SF $2.10/SF

LEASE TYPE FSG NNN FSG FSG FSG FSG

START DATE Apr-17 Mar-17 Jul-16 Oct-17 Dec-17 Sep-19

TERM (YRS) 7 8 5 8 5 5

NEW OR RENEWAL New Renewal New New New Renewal

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10391 PETER A. MCCUEN BLVD MATHER

3100 ZINFANDEL DR RANCHO CORDOVA

2920 KILGORE RD RANCHO CORDOVA

10730 INTERNATIONAL DR RANCHO CORDOVA


YEAR BUILT 1999 2009 1990 1993 2001 1988

TENANT VITEK Real Estate Sutter Health Farmers Insurance Dept of Consumer Affairs Centene GEI Consultants

SF 19,716 106,592 12,129 47,172 100,000 28,897

MONTHLY RATE $1.85/SF $1.39/SF $1.90/SF $2.09/SF $1.95/SF $2.10/SF

LEASE TYPE FSG NNN FSG FSG FSG FSG

START DATE Apr-17 Mar-17 Jul-16 Oct-17 Dec-17 Sep-19

TERM (YRS) 7 8 5 8 5 5

NEW OR RENEWAL New Renewal New New New Renewal

1

3

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5

NMAP NOT TO SCALE

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6


SALE COMPS

2

4

2920 KILGORE RD. RANCHO CORDOVA

2485-2495 NATOMAS PARK DR. SACRAMENTO

10590 ARMSTRONG AVE. MATHER

160 & 180 PROMENADE CIR. SACRAMENTO

10391 PETER A. MCCUEN BLVD.

MATHER

3300 ZINFANDEL & 10834 INTERNATIONAL DR.

RANCHO CORDOVA10949 N. MATHER BLVD.

RANCHO CORDOVA

DATE SOLD 4/4/18 11/21/17 09/29/17 6/15/17 03/15/17 08/16/16 10/28/13

SALE TYPE Investment Investment Investment Investment Investment Investment Investment

PURCHASERBoyd Wattterson

ChicagoThe Evergreen Co.

SacramentoWHAL Properties John Pappas Rich Uncles REIT Equity Capital Management GPT Properties, Massachusetts

YEAR BUILT 1993 1989 2009 2006, 2009 2009 1996 2012

OCC. 100% 91% 100% 96% 100% 100% 100%

PRICE $10,300,000 $55,500,000 $8,000,000 $47,500,000 $27,000,000 $39,725,000 $21,190,000

CAP RATE 7.00% unreported 7.88% 7.75% 6.87% 6.95% 8.00%

SIZE 49,333 295,894 35,855 233,836 110,960 175,000 93,807

PRICE/SF $209 $188 $223 $203 $243 $227 $226

RELATIVE LOCATION Similar Similar Similar Similar Similar Similar Similar

COMMENTSLeased to Dep’t. of Consumer Affairs through January 2026

Multi-tenant propertyLeased to Sacramento

County through April 2019Multi-tenant property leased

to primarily State tenantsLeased until July 2025 to

Sutter HealthLeased to Blue Shield until

January 2026

Leased to Cal. Dep’t. of Consumer Affairs through

June 2027

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NMAP NOT TO SCALE

35

6

7

1

2920 KILGORE RD. RANCHO CORDOVA

2485-2495 NATOMAS PARK DR. SACRAMENTO

10590 ARMSTRONG AVE. MATHER

160 & 180 PROMENADE CIR. SACRAMENTO

10391 PETER A. MCCUEN BLVD.

MATHER

3300 ZINFANDEL & 10834 INTERNATIONAL DR.

RANCHO CORDOVA10949 N. MATHER BLVD.

RANCHO CORDOVA

DATE SOLD 4/4/18 11/21/17 09/29/17 6/15/17 03/15/17 08/16/16 10/28/13

SALE TYPE Investment Investment Investment Investment Investment Investment Investment

PURCHASERBoyd Wattterson

ChicagoThe Evergreen Co.

SacramentoWHAL Properties John Pappas Rich Uncles REIT Equity Capital Management GPT Properties, Massachusetts

YEAR BUILT 1993 1989 2009 2006, 2009 2009 1996 2012

OCC. 100% 91% 100% 96% 100% 100% 100%

PRICE $10,300,000 $55,500,000 $8,000,000 $47,500,000 $27,000,000 $39,725,000 $21,190,000

CAP RATE 7.00% unreported 7.88% 7.75% 6.87% 6.95% 8.00%

SIZE 49,333 295,894 35,855 233,836 110,960 175,000 93,807

PRICE/SF $209 $188 $223 $203 $243 $227 $226

RELATIVE LOCATION Similar Similar Similar Similar Similar Similar Similar

COMMENTSLeased to Dep’t. of Consumer Affairs through January 2026

Multi-tenant propertyLeased to Sacramento

County through April 2019Multi-tenant property leased

to primarily State tenantsLeased until July 2025 to

Sutter HealthLeased to Blue Shield until

January 2026

Leased to Cal. Dep’t. of Consumer Affairs through

June 2027

4 5 6 7


AFFILIATED BUSINESS DISCLOSURE

CBRE, Inc. operates within a global family of companies with many subsidiaries and related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates, including CBRE Global Investors, Inc. or Trammell Crow Company, may have or represent clients who have competing interests in the same transaction. For example, Affiliates or their clients may have or express an interest in the property described in this Memorandum (the “Property”), and may be the successful bidder for the Property. Your receipt of this Memorandum constitutes your acknowledgement of that possibility and your agreement that neither CBRE, Inc. nor any Affiliate has an obligation to disclose to you such Affiliates’ interest or involvement in the sale or purchase of the Property. In all instances, however, CBRE, Inc. and its Affiliates will act in the best interest of their respective client(s), at arms’ length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and its Affiliates will conduct their respective businesses in a manner consistent with the law and all fiduciary duties owed to their respective client(s).

CONFIDENTIALITY AGREEMENT

Your receipt of this Memorandum constitutes your acknowledgement that (i) it is a confidential Memorandum solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property, (ii) you will hold it in the strictest confidence, (iii) you will not disclose it or its contents to any third party without the prior written authorization of the owner of the Property (“Owner”) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any manner detrimental to the Owner or CBRE, Inc.

If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return it to CBRE, Inc.

DISCLAIMER

This Memorandum contains select information pertaining to the Property and the Owner, and does not purport to be all-inclusive or contain all or part of the information which prospective investors may require to evaluate a purchase of the Property. The information contained in this Memorandum has been obtained from sources believed to be reliable, but has not been verified for accuracy, completeness, or fitness for any particular purpose. All information is presented “as is” without representation or warranty of any kind. Such information includes estimates based on forward-looking assumptions relating to the general economy, market conditions, competition and other factors which are subject to uncertainty and may not represent the current or future performance of the Property. All references to acreages, square footages, and other measurements are approximations. This Memorandum describes certain documents, including leases and other materials, in summary form. These summaries may not be complete nor accurate descriptions of the full agreements referenced. Additional information and an opportunity to inspect the Property may be made available to qualified prospective purchasers. You are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent legal and financial advisors, and carefully investigate the economics of this transaction and Property’s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK.

The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions at any time with or without notice to you. All offers, counteroffers, and negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have any legal commitment or obligation except as set forth in a fully executed, definitive purchase and sale agreement delivered by the Owner.

COPYRIGHT NOTICE

© 2018 CBRE, Inc. All Rights Reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. You should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is solely at your own risk. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited. 20508183-203958


INVESTMENT CONTACTS

RANDY GETZExecutive Vice PresidentLic. 00828903+1 916 446 [email protected]

MATT POSTSenior AssociateLic. 01899707+1 916 446 [email protected]

STUART WRIGHTSenior AssociateLic. 01451087+1 916 446 [email protected]

CBRE, Inc.500 Capitol MallSuite 2400Sacramento, CA 95814

10370 & 10390Peter A. McCuen Boulevard

SACRAMENTO, CALIFORNIA

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