STARBUCKS GROUND LEASE - LoopNet

STARBUCKS GROUND LEASE

MORGAN HILL, CALIFORNIA

OFFERING MEMORANDUM

$4,616,000 | 3.25% CAP RATE

? 20-Year Corporate NNN Ground Lease With 10% Increases Every Five Years in Initial Term and Option Periods ? Starbucks is Rated "BBB+" by S&P

? High-Visibility Location in Brand New Evergreen Village Mixed-Use Development ? Brand New 20-Acre Mixed-Use Center Currently Zoned for Retail Stores, Restaurants, Professional Offices, Medical Use Establishments, and More ? High-Traffic Location Along Cochrane Road (34,872 ADT)

? Located in Densely Populated and Affluent Retail Corridor in Growing Area ? Located Near the Only Walmart Supercenter Location Within a 15-Minute Drive of the Site, Increasing Traffic to the Property ? $173,359 Average Household Income Within a Five-Mile Radius of the Location

? New 2022 Construction Featuring Latest Starbucks Prototype and Drive-Thru

Cushman and Wakefield Inc. LIC. # 00616335

FILE PHOTO

TABLE OF CONTENTS

DISCLAIMER

INVESTMENT SUMMARY AERIALS SITE PLAN TENANT SUMMARY PROPERTY OVERVIEW AREA OVERVIEW DEMOGRAPHIC PROFILE

1 2 6 7 8 9 10

Cushman & Wakefield ("Broker") has been retained on an exclusive basis

to market the property described herein ("Property"). Broker has been authorized by the Seller of the Property ("Seller") to prepare and distribute the enclosed information ("Material") for the purpose of soliciting offers to purchase from interested parties. More detailed financial, title and tenant lease information may be made available upon request following the mutual execution of a letter of intent or contract to purchase between the Seller and a prospective purchaser. You are invited to review this opportunity and make an offer to purchase based upon your analysis. If your offer results in the Seller choosing to open negotiations with you, you will be asked to provide financial references. The eventual purchaser will be chosen based upon an assessment of price, terms, ability to close the transaction and such other matters as the Seller deems appropriate.

The Material is intended solely for the purpose of soliciting expressions of interest from qualified investors for the acquisition of the Property. The Material is not to be copied and/or used for any other purpose or made available to any other person without the express written consent of Broker or Seller. The Material does not purport to be allinclusive or to contain all of the information that a prospective buyer may require. The information contained in the Material has been obtained from the Seller and other sources and has not been verified by the Seller or its affiliates. The pro forma is delivered only as an accommodation and neither the Seller, Broker, nor any of their respective affiliates, agents, representatives, employees, parents, subsidiaries, members, managers, partners, shareholders, directors, or officers, makes any representation or warranty regarding such pro forma. Purchaser must make its own investigation of the Property and any existing or available financing, and must independently confirm the accuracy of the projections contained in the pro forma.

Seller reserves the right, for any reason, to withdraw the Property from the market. Seller has no obligation, express or implied, to accept any offer. Further, Seller has no obligation to sell the Property unless and until the Seller executes and delivers a signed agreement of purchase and sale on terms acceptable to the Seller, in its sole discretion. By submitting an offer, a purchaser will be deemed to have acknowledged the foregoing and agreed to release Seller and Broker from any liability with respect thereto.

Property walk-throughs are to be conducted by appointment only. Contact Broker for additional information.

LEAD BROKERS

VINCENT AICALE

Executive Managing Director 415.690.5522 vince.aicale@ CA RE License #01728696

RYAN FORSYTH

Executive Managing Director 415.413.3005 ryan.forsyth@ CA RE License #01716551

MICHAEL T. YURAS, CCIM

Vice Chairman 415.481.0788 michael.yuras@ CA RE License #01823291

SCOTT CROWLE

Executive Managing Director 415.604.4288 scott.crowle@ CA RE License #01318288



INVESTMENT SUMMARY

ADDRESS PRICE CAP RATE NOI TERM RENT COMMENCEMENT LEASE EXPIRATION

RENTAL INCREASES

YEAR BUILT BUILDING SF PARCEL SIZE LEASE TYPE

Cochrane Road & Butterfield Boulevard, Morgan Hill, CA 95037

$4,616,000

3.25%

$150,000

20 years

October 1, 2022 (estimated)

September 30, 2042 (estimated)

10% rental increases every five (5) years

YEAR 1-5 6-10 11-15 16-20 21-25 (option 1) 26-30 (option 1) 31-35 (option 2) 36-40 (option 2) 41-45 (option 3) 46-50 (option 3)

RENT $150,000 $165,000 $181,500 $199,650 $219,615 $241,577 $265,734 $292,308 $321,538 $353,692

2022

RETURN 3.25% 3.58% 3.93% 4.33% 4.76% 5.23% 5.76% 6.33% 6.97% 7.66%

TBD

1.0 acres (43,546 SF)

NNN ground lease, with tenant responsible for all taxes, insurance, maintenance, and repair, including roof, structure, and parking lot

FILE PHOTO

NEW 20-YEAR NNN GROUND LEASE WITH SCHEDULED RENTAL INCREASES TO INVESTMENT-GRADE TENANT

? 20-year corporate NNN ground lease to Starbucks Corporation ? 10% fixed rental increases every five years in the initial term and option periods,

providing a hedge against inflation ? Investment grade tenant, rated"BBB+"by Standard & Poor's ? Minimal landlord management, attractive for both local and out-of-area investors ? New 2022 construction featuring latest Starbucks prototype and a drive-thru for added

customer convenience

HIGH-VISIBILITY LOCATION IN BRAND NEW EVERGREEN VILLAGE MIXED-USE DEVELOPMENT

? Located in Evergreen Village, a brand new 20-acre mixed-use center currently zoned for retail stores, restaurants, professional offices, medical use establishments, and more

? High-traffic location along Cochrane Road (34,872 ADT), significantly increasing traffic to the site

? Projected 12 percent AHI increase within a one-mile radius of the site in the next five years, poising Evergreen Village for significant growth

? Over 49,000 vehicles per day at the intersection of Cochrane Road and Butterfield Boulevard, increasing visibility to the property (busiest intersection in Morgan Hill)

? Convenient access to U.S. Route 101, a major north-south U.S. thoroughfare which experiences a high traffic count of 147,100 vehicles per day

LOCATED IN DENSELY POPULATED AND AFFLUENT BAY AREA RETAIL CORRIDOR

? $173,359 average household income within a five-mile radius of the location ? Population of 55,034 within five miles of the property ? Located near the only Walmart Supercenter location within a 15-minute drive of the site,

increasing traffic to the property ? Irreplaceable infill location that is walking distance from a strong mix of national retailers,

including In-N-Out Burger, McDonald's, Hobby Lobby, Chipotle Mexican Grill, Panda Express, Denny's, 7-Eleven, and many more ? Within three miles of four high schools, increasing lunch-time traffic to the site (combined enrollment of 2,717 students)

NORMAN Y. MINETA SAN JOSE INTERNATIONAL AIRPORT

(24 miles)

DOWNTOWN SAN JOSE (20 miles)

SAN FRANCISCO (72 miles)

(U14.S7,.1R0o0uAtDeT10) 1

(287 employees)

Sobrato High School (1,476 students)

SACRAMENTO (135 miles)

(90 rooms)

(90 rooms)

Evergreen Village (mixed-use future

development)

Cochrane Road (34,872 ADT)

Cochrane Village (96 units)

Bullnose Tile Warehouse

Butterfield Village Apartments (389 unit multi-family complex,

under construction)

(Under Construction)

Bu(t1t4e,r3fi0e6ldABDoT)ulevard

Butterfield Technology Park (25-acres, 410,000 SF of industrial/

commercial space)

(apprx. 750 employees)

(55 employees)

(367 employees)

MONTEREY BAY (40 miles)

Chesboro Reservoir County Park

Co(3c4h,r8a7n2eARDoTa)d

Butterfield Village Apartments (389 unit multi-family

complex, under construction)

Butterfield Technology Park (25-acres, 410,000 SF of industrial/

commercial space)

Butte(1r4fi,e30ld6BAoDuTle) vard

Evergreen Village (mixed-use future

development)

Cochrane Village (96 units)

(55 employees)

(apprx. 750 employees)

(Under Construction)

(367 employees)

(90 rooms)

Bullnose Tile Warehouse

(90 rooms)

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