1441 Montiel Road, Escondido

FINANCIAL ANALYSIS

ANNUAL PRO FORMA (BEFORE DEBT)

1441 Montiel OM

Analysis Date: 2/6/2019

Annual Pro Forma (Before Debt)

Year Count

Mark to Market

In-Place

Per RSF

1

2

3

4

5

6

7

8

9

10

11

Fiscal Year Ending - April

May-01-19

FYE 2020 FYE 2020 FYE 2021

FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030

Operating Measures Operating Disbursements/Rentable Square Foot

-$2.89 12.0% 0.0% 12.0%

-$2.89

-$2.91 6.7% 0.0% 6.7% 0.0%

-$2.98

-$3.04 0.0% 5.0% 5.0% 25.9%

-$3.13 0.0% 5.0% 5.0% 24.9%

-$3.21 0.0% 5.0% 5.0% 0.0%

-$3.28

-$3.35

-$3.44

-$3.52

-$3.60 2.0% 3.0% 5.0% 0.0% 97.8%

-$3.69

Absorption/Turnover Vacancy Percentage Vacancy/Credit Loss Percentage Total Economic Vacancy Percentage

13.3% 0.0% 13.3%

0.0% 5.0% 5.0% 0.0%

1.1%

2.7% 2.3% 5.0%

0.0% 5.0% 5.0% 0.0%

0.0% 5.0% 5.0% 0.0%

1.1%

3.9% 5.0% 0.0% 98.8%

3.9% 5.0% 0.0% 98.8%

In-Place Lease Rollover Occupancy Percentage

34.8%

85.6%

85.6%

92.8% 100.0% 100.0% 100.0% 100.0%

97.1% 100.0% 100.0%

Operating Receipts Rental Receipts

Potential Base Rental Receipts Absorption/Turnover Vacancy

$749,850 $700,920

$14.11 -1.08 -0.36 12.68 2.38 0.00 15.06 0.00 15.06 -0.47 -0.09 -0.09 -0.12 -0.45 -1.67 -0.01

$705,585 $720,943 $738,618 $758,975 $790,806 $809,501

$831,563 $853,319 $876,747 $908,532 $928,870

-107,736

-107,736

-53,865 -17,955 633,765 119,037

0

0

0 0

0 -10,407

-25,980

0 0

0

-21,141

-12,065 -14,478 902,327 167,922

Base Rent Abatements

0

0

0 -17,490

0

-12,489

-31,176

0 -25,369

Total Rental Receipts

642,114 144,384

593,184 106,212

720,943

721,128 139,057

758,975 790,806 786,605

774,407

853,319 876,747

862,022 164,426

Operating Disbursements Recoveries

136,312

142,979

146,790

147,441

146,911

157,688

161,548

Other Income

0

0

0

0

0

0

0

0

0

0

0

0

0

Total Operating Receipts before Vacancy/Credit Loss

786,498

699,396

752,802

857,255

860,185

901,954 937,596 934,046

921,318 1,011,007 1,038,295 1,026,448 1,070,249

Vacancy/Credit Loss

0

0

0 -42,863

-43,009 -45,098 -46,880

-36,816

-21,385

-50,550

-51,915

-31,238

-42,051

Total Operating Receipts

786,498

699,396

752,802

814,392

817,176 856,856

890,716 897,230 899,933 960,457

986,380 995,210 1,028,198

Operating Disbursements Utilities Repairs & Maintenance

-23,328 -4,704 -4,608 -6,000 -20,976 -83,328

-23,328 -4,704 -4,608 -6,000 -20,976 -83,328

-23,327 -4,705 -4,602 -6,000 -22,584

-24,027 -4,846 -4,740

-24,748 -4,992 -4,882 -6,365 -24,515

-25,490 -26,255

-27,042 -5,454 -5,335 -6,956 -26,917 -91,996

-27,854 -28,689

-29,550 -30,436

-31,350 -6,323 -6,185 -8,063

-5,141

-5,296 -5,180 -6,753 -26,721 -90,193

-5,618 -5,495 -7,164 -26,998 -93,836

-5,787 -5,660 -7,379 -28,814 -95,713

-5,960 -5,830 -7,601 -29,591 -97,627

-6,139 -6,005 -7,829

Landscaping

-5,029 -6,556 -25,706

Insurance

-6,180

Management Fee

-24,432

-29,856 -30,846

-83,324 -84,990 -86,690 -88,424

-99,580

-101,571

[1] Property Taxes

Non-Recoverable

-1,440

-1,440

-718

0

0

0

0

-138

-346

0

0

-282

-160

Total Operating Disbursements

-$144,384

-$144,384

-2.91

-145,260 -149,215

-152,192 -156,346 -160,398 -163,838

-167,311

-172,042

-176,159

-180,127 -184,498 815,083 843,700

$642,114

$555,012

12.15

607,542

665,177 664,984 700,510 730,318

733,392

732,622

788,415

810,221

Net Operating Income

Other Operating Receipts/(Disbursements) Tenant Improvements

-7.18

-359,100 -33,240

0 -68,757 0 -53,749

0 0

0

-58,281

-145,486

0 0

0 -118,387

-67,564 -33,184 -10,077 -110,825

Leasing Commissions

-0.66 -0.15

0 -28,625

-71,455 -8,954

0

-58,146 -9,784 -186,317

Capital Reserves

-7,499

-7,723

-7,955

-8,194

-8,440

-8,693

-9,222 -9,222

-9,499 -9,499

Total Other Operating Receipts/(Disbursements)

-8.00

-399,839

-7,723

-130,461

-8,194

-8,440 -95,599 -225,895

$4.15 $207,703 $657,454 $534,523 $692,316 $721,878 $637,793 $506,727 $779,193 $800,722 $628,766 $732,875

Non-Leveraged Operating Receipts/(Disbursements)

[1] Property Taxes have been re-assessed based on Mid-Point Pricing, and have been adjusted to reflect ongoing partial tax exemption from educational tenant.

Mid-Point Pricing - $9,860,000 Capitalization Rate

6.5%

5.6%

6.2%

6.2% 2.1% 2.1%

6.7% 6.7% 4.4%

6.7% 5.4% 4.7%

7.1%

7.4% 7.3% 5.7%

7.4% 6.5% 5.8%

7.4% 5.1% 5.7%

8.0% 7.9% 6.0%

8.2% 8.1% 6.2%

8.3% 6.4% 6.3%

8.6% 7.4% 6.4%

Cash on Cash Return

Mark to Market

In-Place Cap Rate

Year 1

7.0% 5.3%

Avg. Cash on Cash Return

Cap Rate

OFFERING MEMORANDUM

51