SPORT West Covina Parkway COVINA West Covina, CA

SPORT

COVINA

COVINA HIGH SCHOOL

N. AZUSA AVE

BADILLO ST

N. VINCENT AVE

N. SUNSET AVE

PROMENADE APARTMENTS

MARKETPLACE AT THE LAKES

AT THE LAKES

1530

West Covina Parkway

West Covina, CA

WEST COVINA HIGH SCHOOL

CAMERON ELEMENTARY SCHOOL

US SOCIAL SECURITY ADMINISTRATION

S. VINCENT AVE

LAFAYETTE PARC APARTMENTS

MY SELF STORAGE SPACE

484,000 CARS PER DAY

W. PACIFIC AVE

WEST COVINA POLICE DEPT WEST COVINA CITY HALL

EAST COUNTY

REGIONAL OFFICES

WEST COVINA

LIBRARY

W.

COVINA

PKWY (21,000

CENTRELAKE IMAGING

CPD)

WEST COVINA MEDICAL CENTER

WEST COVINA COURT HOUSE

LAKESIDE COMMUNITY HEALTHCARE URGENT

CARE

WEST

HAVEN

S.

HEALTH-

SUNSET

AVE

CARE CENTER

SUN CLINICAL LABORATORIES

CALIFORNIA DEPT OF TAX & FEE ADMINISTRATION

? SYLVAN LEARNING CTR

W. CAMERON AVE

? WATER QUALITY AUTORITY FIRST FINANCIAL

? VOLUNTEERS OF AMERICA CORPORATE CTR

? SAN GABRIEL VALLEY DRIVER

GLOBAL ENVIRONMENTAL

WEST COVINA CREDIT UNION

WEST COVINA FIRE DEPT

WEST COVINA PUBLIC WORKS

OFFERED AT: $22,451,933 | 6% CAP

EXECUTIVE SUMMARY

PROPERTY INFORMATION

TENANT OVERVIEW

AREA OVERVIEW

TABLE OF CONTENTS

EXECUTIVE SUMMARY 4 Executive Summary 5 Investment Highlights 6 Lease Summary & Rent Overview 7 Lease Abstract

PROPERTY INFORMATION 9 Location Maps 10 Site Plan 11 Property Photos 13 Aerials

TENANT OVERVIEW 19 About 24 Hour Fitness

AREA OVERVIEW 21 West Covina Overview 22 Los Angeles County Overview 23 Demographics

Confidentiality Agreement & Disclosures

EXCLUSIVELY REPRESENTED BY

RYAN BARR Principal

760.448.2446 rbarr@lee-

Lic#01338994

RYAN BENNETT Principal

760.448.2449 rbennett@lee-

Lic#01826517

24 HOUR FITNESS | West Covina, CA | 2

SPORT

EXECUTIVE SUMMARY

WEST COVINA, CA

24 HOUR FITNESS | West Covina, CA | 3

EXECUTIVE SUMMARY

? Offering Summary ?

PROPERTY INFORMATION

Investment Highlights

TENANT OVERVIEW

Lease Summary & Rent Schedule

-- OFFERING SUMMARY --

INVESTMENT HIGHLIGHTS

Offering Price:

$22,451,933

Net Operating Income:

$1,347,116

Cap Rate:

6%

Price/SF:

$598

Lease Type:

Triple-Net (NNN)

Address:

Property Size: Land Size: Ownership: Year Built: Parking:

PROPERTY OVERVIEW 1530 West Covina Pkwy West Covina, CA 91790 Approx 37,500 Sq. Ft.

1.56 Acres

Fee Simple (Land, Building & Parking Garage)

1962 / Renovated 2001 3-Level Parking Garage - 257 Spaces (240 Garage, 17 Surface Spaces)

Lee & Associates is pleased to exclusively offer for sale the fee simple interest (land & building) in a 24-Hour Fitness Sport property located in the greater Los Angeles area of West Covina, CA (the "Property"). Built in 1962 and renovated in 2001, the Property consists of a 37,500-square-foot fitness facility and 3-story parking garage that sit on an approximately 1.56-acre parcel. The site features abundant parking with 240 spaces in the adjacent 3-level parking garage as well as 17 surface spaces. This parking structure is included in the sale of the property and provides customers with easy access in and out of the facility, which is critical in such a dense area with limited parking.

The building is leased on a corporate guaranty to 24 Hour Fitness USA, Inc., the largest privately owned and operated fitness chain in the world, with nearly 4 million members within 426 clubs across 17 U.S. states. Founded in 1983, 24 Hour Fitness boasted a revenue of $1.4 Billion in 2017 and currently employs more than 18,000 people across the country. 24 Hour Fitness currently has a credit rating of B2 from Moody's.

With E-Commerce drastically changing the face of retail sales today, this investment provides an investor with an internet resistant tenant concept where the service provided can only be provided "on-site", thus always requiring a brick & mortar location for operations.

There are approximately 9 years remaining on the 26-year triple-net (NNN) lease, which features 11% rent increases every 5 years in both the Primary term and (3) 5-year Option periods. 24 Hour Fitness is showing a clear commitment to this site by spending a large sum of money to completely renovate the pool, jacuzzi, sauna, steam room, and both the men's and women's locker rooms (including the bathrooms). The tenant also replaced the entire roof membrane in 2016.

The site is located within a dense infill location of the City of West Covina, just 19 miles East of Downtown Los Angeles. There are approximately 525,000 people that live within a 5-mile radius of the subject property with an average household income over $85,000, lending well to the tenant's concept and supporting its continued success.

The subject property is ideally located just off the Interstate 10 exit/entrance along W. Covina Pkwy, which is a main retail/commuter corridor to/from Interstate 10 (484,000 CPD). This location offers excellent visibility & signage to roughly 21,000 cars per day and offers multiple in/out access points into the property. It is located across the street from City offices including City Hall, the police department, and the Los Angeles County Court House, as well as nearby medical and financial offices, providing a strong customer draw to the facility.

The property lies within a strong retail trade area and is only a couple of blocks from Plaza West Covina, a 1.2 million square foot regional mall anchored by Macy's, JCPenney, Sears, Best Buy, the newly opened XXI Forever flagship store, and Nordstrom Rack, as well as cotenants including H&M, Sephora, M.A.C., Hollister, Express, American Eagle Outfitters, and more. The dense infill location has 525,000 people within a 5-mile radius of the subject property with an average HH income over $85,000, lending well to the tenant's concept.

The property is located in the City of West Covina, in Los Angeles County. Strategically located at the heart of the San Gabriel Valley, West Covina is centrally positioned between the major metropolitan hubs of Los Angeles, San Bernardino, and Orange Counties, and has 4 miles of highly accessible and visible freeway frontage along Interstate 10. West Covina's superior quality of life, distinguished school districts, and first-class dining and shopping venues make West Covina an enviable community. The City's high standard of living is further enhanced by the wide assortment of community programs, stunning city parks, annual events and community facilities.

AREA OVERVIEW

Lease Abstract

484,000 CARS PER DAY

24 HOUR FITNESS | West Covina, CA | 4

EXECUTIVE SUMMARY

Offering Summary

PROPERTY INFORMATION

? Investment Highlights ?

-- INVESTMENT HIGHLIGHTS --

24 HOUR FITNESS USA INC (MOODY'S: B2): GLOBAL LEADER IN THE FITNESS INDUSTRY ? $1.4 BILLION IN REVENUE (2017) ? ROUGHLY 18,000 EMPLOYEES The subject property is leased to 24 Hour Fitness USA, Inc. (Corporate), the largest privately owned and operated fitness chain in the world, with nearly 4 million members within 426 clubs across 17 U.S. states. Founded in 1983, 24 Hour Fitness boasted a revenue of $1.4 Billion in 2017 and currently employs more than 18,000 people across the country. 24 Hour Fitness currently has a credit rating of B2 from Moody's.

STRONG CORPORATE LEASE GUARANTY ? INTERNET RESISTANT TENANT CONCEPT ? 16 YEAR SUCCESSFUL OPERATING HISTORY The lease provides an investor with a strong corporate guaranty from 24 Hour Fitness United States, Inc. who has been successfully operating at this location since 2001 (16 years).

With E-Commerce drastically changing the face of retail sales today, this investment provides an investor with an internet resistant tenant concept where the service provided can only be provided "on-site", thus always requiring a brick & mortar location for operations.

ONE OF 250 SPORT-MEMBERSHIP FACILITIES ? NEAREST SPORT CLUB OVER 7 MILES AWAY ? WIDE VARIETY OF CLASSES & EQUIPMENT The Property is one of only 250 24 Hour Fitness Sport club locations. This location offers a wide variety of fitness equipment and classes such as personal & circuit training, sauna, steam room, whirlpool, indoor lap pool, Kids' Club, and a Pro Shop. The nearest Sport club location is over 7 miles away.

CLEAR TENANT COMITMENT TO THE SITE ? TENANT CURRENTLY COMPLETING EXTENSIVE REMODEL TO LOCKER ROOMS, POOL, SAUNAS, STEAM ROOM & BATHROOMS ? TENANT REPLACED ENTIRE ROOF MEMBRANE IN 2016 24 Hour Fitness is showing a clear commitment to this site by spending a large sum of money to completely renovate the pool, jacuzzi, sauna, steam room, and both the men's and women's locker rooms (including the bathrooms). The tenant also replaced the entire roof membrane in 2016.

DENSE INFILL LOCATION (525,000 PEOPLE WITHIN 5-MILE RADIUS) ? DESIRABLE DEMOGRAPHICS ($85,000 AHI) ? LENDS WELL TO TENANT CONCEPT The site is located within a dense infill location of the City of West Covina, just 19 miles East of Downtown Los Angeles. There are approximately 525,000 people that live within a 5-mile radius of the subject property with an average household income over $85,000, lending well to the tenant's concept and supporting its continued success.

TENANT OVERVIEW

Lease Summary & Rent Schedule

AREA OVERVIEW

Lease Abstract

LOCATED JUST FEET FROM INTERSTATE 10 EXIT W. COVINA PARKWAY (484,000 CPD) ? MAJOR RETAIL/COMMUTER CORRIDOR (21,000 CPD) ? EXCELLENT VISIBILITY & MULTIPLE ACCESS POINTS

The subject property is ideally located just off the Interstate 10 exit/entrance along W. Covina Pkwy, which is a main retail/ commuter corridor to/from Interstate 10 (484,000 CPD). This location offers excellent visibility & signage to roughly 21,000 cars per day and offers multiple in/out access points into the property.

DENSE RETAIL & OFFICE LOCATION ? ABUNDANT PARKING: 240 SPACES (3-LEVEL GARAGE) & 17 SURFACE SPACES) ? CONSISTENT CUSTOMER DRAW

The 24 Hour Fitness facility features abundant parking with 240 spaces in the adjacent 3-level parking garage as well as 17 surface spaces. This provides the customer with easy access to and from the facility which is critical in such a dense area with limited parking.

The property is located across the street from City offices including City Hall, the police department, and the Los Angeles County Court House, as well as nearby medical and financial offices, providing a consistent draw to the facility which handles over 10,000 members per month.

BLOCKS FROM 1.2 MILLION SQ FT PLAZA WEST COVINA REGIONAL MALL ? EXCELLENT RETAIL SYNERGY

The property lies within a strong retail trade area and is only a couple of blocks from Plaza West Covina, a 1.2 million square foot regional mall anchored by Macy's, JCPenney, Sears, Best Buy, the newly opened XXI Forever flagship store, and Nordstrom Rack, as well as co-tenants including H&M, Sephora, M.A.C., Hollister, Express, American Eagle Outfitters, and more.

LOCATED IN THE CITY OF WEST COVINA ? PART OF GREATER LOS ANGELES AREA ? SURGE IN REDEVELOPMENT

The property is located in the City of West Covina, in Los Angeles County. Strategically located at the heart of the San Gabriel Valley, West Covina is centrally positioned between the major metropolitan hubs of Los Angeles, San Bernardino, and Orange Counties, and has 4 miles of highly accessible and visible freeway frontage along Interstate 10.

The City of West Covina's Redevelopment Agency has completed numerous redevelopment projects ranging from City municipal buildings, office parks, shopping centers, and more. The Redevelopment Agency's efforts have resulted in several major office buildings in the city, such as "The Lakes", in addition to two new community shopping centers, freestanding retail developments, restaurants, residential projects, and the Auto Plaza.

24 HOUR FITNESS | West Covina, CA | 5

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