OFFERING MEMONANDUM - LoopNet

OFFERING MEMONANDUM

Location : 537 North Pacific Coast Highway, Redondo Beach, CA 90277

Location of the Subject property

INVESTMENT SUMMARY
Price :           $12,000,000
Property Size:    17,160 sf
Lot size:         1.07 acre
Year Built:       1981
Current Occupancy: 100%

Investment Returns
Capitalization:      2.86 %
Net operating Income:         $343,200

Lease Summary
Lease Option : June 4, 2016 - June 30. 2021 $343,200
                  July 1, 2021 - June 30. 2026 $377,520
                  July 1, 2026 - June 30. 2031 $415,272
                  July 1, 2031 - June 30. 2036 Fair Market Value

INVESTMENT HIGHLIGHTS
*Pacific Coast Highway (CA Route 1) Location: Pacific Coast
Highway runs north and south along the California Pacific
coastline and has over 40,000 cars per day passing the subject
property
* Excellent Visibility and Identity: The subject property benefits
from prominent, double-panel monument signage along Pacific
Coast Highway*A single-tenant net-leased coastal property
occupied by Petco
*Dense in-fill location within LA county
* It is a well-established, successful location with high traffic
count, great co-tenancy and retail synergy in the area; stability
of Income; excellent visibility and identity; and irreplaceable
coastal location with strong demographics and nearby residential

* Coastal Single-Tenant Petco:
-Established and successful Petco location; Tenant since 1994 (24
years)
-Brand new 10-year lease extension with two 5-year options to
renew
-Corporate guaranteed lease with 10% rental increases every
5 years
-Petco has over 1,400 locations across the country, and is
planning a large 2018 expansion
-Petco has grown their revenue by over 45 percent since 2008

Redondo Beach & King Harbor

PETCO OVERVIEW

With more than 50 years of service to pet parents, Petco is a leading pet specialty retailer that
obsesses about

delivering health and happy experiences for pets and the people who love them. We do this by
providing the

products, services, advice and experiences that keep pets physically fit, mentally alert, socially
engaged and

emotionally happy.

Everything we do is guided by our vision:

Healthier Pets. Happier People. Better World.

We employ more than 25,000 partners and operate more than 1,500 Petco locations across the U.S.,
Mexico and

Puerto Rico, including more than 80 Unleashed by Petco locations, a smaller format neighborhood
shop; prescription

services and pet supplies from the leading veterinary-operated pet product supplier, Drs. Foster &
Smith; digitallydelivered

pet health advice through PetCoach; and petco.com.

The Petco Foundation, an independent nonprofit organization, has invested more than $200 million
since it was created in 1999 to help promote and improve the welfare of companion animals. In
conjunction with the Foundation,

We work with and support thousands of local animal welfare groups across the country and, through
in-store adoption events, help find homes for more than 400,000 animals every year.

SURROUNDING RETAIL

SITE PLAN

AREA OVER VIEW

Historical population                                                                             % of Total
                                    #    Employer                                # of Employees   City
                                                                                                  Employment
Census       Pop.           %±      1    Northrop Grumman                        5,645            16.3%
1890 603            —               2    Redondo Beach Unified School District   995              2.9%
1900 855            41.8%           3    City of Redondo Beach                   431              1.3%
1910 2,935          243.3%          4    Crowne Plaza                            339              1.0%
1920 4,913          67.4%           5    The Cheesecake Factory                  261              0.8%
1930 9,347          90.3%           6    United States Postal Service            260              0.8%
1940 13,092                 40.1%   7    Nordstrom                               254              0.7%
1950 25,226                 92.7%   8    Target                                  217              0.6%
1960 46,986                 86.3%   9    DHL Global Forwarding                   207              0.6%
1970 57,451                 22.3%   10   Macy's                                  206              0.6%
1980 57,102                 −0.6%
1990 60,167                 5.4%
2000 63,261                 5.1%
2010 66,748                 5.5%
Est. 2016 67,867 [9]        1.7%
U.S. Decennial Census[19]

House holder
2017 Total Householder:
1 mile 13,140 / 3 mile 73,971 / 5 mile 152,301

Median Household Income: 1 mile $116,218 / 3 mile $104,520 / 5 mile $89,588

Cost of living
According to public data from the Los Angeles Times, real estate prices increased almost 20% per year between 1999 and 2005. Properties
within walking distance of the ocean routinely sell for over $1 million. Money Magazine ranks communities in the area as some of the most
expensive places to live in the U.S. The average three-bed, two-bath home costs about $1,000,000 in South Redondo as of 2006 and $875,000
in North Redondo. The 2007 "credit meltdown" has affected home values in the area to a lesser extent than the rest of Southern California.

Lifestyle
Much of the Redondo Beach lifestyle is a blend of the neighborhoods, activities and people of the three Beach Cities of Southern California's
South Bay. Like its sister cities of Hermosa Beach and Manhattan Beach, Redondo's draw is the beach that links the three cities. Redondo was
described as "The Gem of the Continent" in the Los Angeles Daily Herald in 1887.[18][better source needed]

The beach starts below the bluffs of Palos Verdes in the south (after Torrance Beach) and carries north to the Redondo Pier. The area of the
beach that starts in Palos Verdes is known as "RAT (Right After Torrance) Beach." The Marvin Braude Bike Trail runs from Torrance through
South Redondo, north to Hermosa Beach, Manhattan Beach, and eventually to Santa Monica. The path is broken by the Redondo Beach King
Harbor Marina and Pier complex, where it veers away from water and onto dedicated lanes of surface streets for about a mile before again
turning to the ocean in Hermosa Beach. Continuing north from Manhattan Beach, the path stretches to Marina Del Rey.

Surfing is an element of the South Bay lifestyle year-round. Winter storms in the Pacific Ocean sometimes turn typically placid and rolling
South Bay waves into large and occasionally dangerous waves, a draw for surfers. Wave heights in December 2005 were some of the largest on
record at 15 feet (4.6 m) to 20 feet (6.1 m).

Beach volleyball is another aspect of Redondo Beach's lifestyle. The wide and flat sand beaches provide the perfect venue for the sport and
permanent poles and nets are placed and maintained by the city year-round. Professional tournaments managed by the AVP take place in
neighboring Hermosa and Manhattan Beach. Redondo Beach is home to Gold Medalist Kerri Walsh and AVP Pro Casey Jennings.

In 2006, TV crews for Medium were seen shooting at a local coffee shop. Fox's The O.C. was also seen filming at Redondo Union High School,
Redondo Beach Pier, and local parks. Also, Redondo Beach was home to the filming of the classic television series, Baywatch.

Redondo Beach, 1890

kite festival 2018 Redondo Beach

kite festival & Lobster festival Redondo beach

Contact Information

                      New Star Realty & Inv. Commercial

                            Jae Lim
                             Office Direct (213) 385- 4989 #159
                             Fax (213) 365-7117
                           Cell (213)840-0988
                             E-mail: jaelim@newstarrealty.com