Highly Occupied and Stabilized With Well-Known Anchor Tenants and a Diversified Tenant Base in a Captive and Stable Market – The Barstow Retail Center is currently a 89% occupied and stabilized property that includes 19 tenants with only 1 vacancy. The property is anchored by Vons (Safeway), 99 Cents Only Store, and Big 5 Sporting Goods. Vons recently renewed its lease for another 10 year term after 50 years at the property and spent over $1 Million in upgrades to its store when it renewed its lease in 2013. Many of the tenants have occupied the property for a long time and had no significant challenges during the previous recession, which is a testament to the stability provided by this captive market. In addition, the City of Barstow is currently spending millions of dollars to upgrade its roads and infrastructure in an attempt to attract more business and people to the Barstow area.

Strategically Located Within 2 blocks Off the Exit of the 15 Freeway and Within 4 Block Off the Exit of the 40 Freeway With Many Well-Known Retailers in the Immediate Area – The property is located on E Main Street within 2 blocks off the exit of the 15 Freeway and within 4 blocks off the exit of the 40 Freeway with traffic counts of over 30,000 vehicles per day.

Projected 14.4% Total Average Annualized Return For Investors and Projected 8.8% Average Annualized Cash Flows For Investors (Based on 10 Year Projections) – The Managers project investors will receive an average annualized cash flow return of 11% (via monthly distributions) and a total average annualized return of 18% via an 8% preferred return and 70/30 profit split (in favour of investors).

Favorable Purchase Price With Little Deferred Maintenance Due To Recent Upgrades –The Managers are acquiring the property for roughly $8.7 Million at a 7.8% Cap Rate, which the Managers believe is a favorable Cap Rate compared to their estimated 6.50-7.25% Cap Rate range for similar properties in this market. The property is being acquired for approximately $73 per square foot, which is more than 50% below the Manager’s estimated replacement cost of $150 per square foot. The Managers also believe that the property will have only minimal deferred maintenance costs in the short-term, as the majority of the roofs were replaced over the last 5-6 years and the current owner spent $300k+ resurfacing the parking lots last year.

Conservative Assumptions in the Pro Forma, the Managers included conservative assumptions in the Pro Forma.  For example, the projected rent rates for new and renewed leases are 20% below current market rates. Also, the possibility of revenue from the addition of a pad site was not included in the projections.

Potential Value Added Upside Due To Under Market Rents and the Possibility of Adding a Pad Site – The Managers believe that average rents are currently 20-25% below market rates and plan to increase rents towards market rates over time. In addition, the Managers have already been in discussions with the city planning department and various retailers to add a pad site to the property. While neither of these initiatives was included in the Pro Forma revenues to be conservative, they both present the possibility of value added upside for the property.

Current Owner Will Invest $250k-$500k as a Passive Investor in This Opportunity Due To Their Strong Belief in the Property’s Future – The property is being acquired from a mother/son who are friends of the Managers and who need to liquidate their holdings after the death of their husband/father who had originally built the center 50 years ago. Due to their strong belief in the property’s future performance, the current owners will be co-investing $250k-$500k of the equity as a passive investor in this opportunity.