Levitz Center OM - commercialmls.com...CAP Rate - Current 7.03% Net Operating Income - Current $439,220 Net Cash Flow After Debt Service - Current $167,397 CAP Rate - Pro Forma 7.65%

LYNNWOOD, WA

Levitz Center

OFFERING MEMORANDUM

CONFIDENTIALITY AND DISCLAIMER

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is

intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made

available to any other person or entity without the written consent of Marcus & Millichap. This Marketing

Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to

establish only a preliminary level of interest in the subject property. The information contained herein is not a

substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and

makes no warranty or representation, with respect to the income or expenses for the subject property, the future

projected financial performance of the property, the size and square footage of the property and improvements,

the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal

regulations, the physical condition of the improvements thereon, or the financial condition or business prospects

of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The

information contained in this Marketing Brochure has been obtained from sources we believe to be reliable;

however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor

has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or

representation whatsoever regarding the accuracy or completeness of the information provided. All potential

buyers must take appropriate measures to verify all of the information set forth herein.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS

& MILLICHAP AGENT FOR MORE DETAILS.

LYNNWOOD, WA

Levitz Center

Section 1 PRICING AND FINANCIAL ANALYSIS

Section 2 PROPERTY DESCRIPTION

Section 3 SALE COMPARABLES

Section 4 RENT COMPARABLES

Section 5 MARKET OVERVIEW

Section 6 DEMOGRAPHIC ANALYSIS

TABLE OF CONTENTS

Levitz CenterLYNNWOOD, WA


PRICING AND FINANCIAL ANALYSIS

Price $6,250,000

Down Payment 30% $1,875,000

Price per Square Foot (GLA) $161.27

Gross Leasable Area (GLA) 38,756

Year Built 1980

Lot Size 1.95 Acres

VITAL DATA

CAP Rate - Current 7.03%

Net Operating Income - Current $439,220

Net Cash Flow After Debt Service - Current $167,397

CAP Rate - Pro Forma 7.65%

Net Operating Income - Pro Forma $478,154

Net Cash Flow After Debt Service - Pro Forma $206,331

1

Major Tenants


Tenant Name

7-11

Black Angus Steak House

Talay Thai

Aaron's

ATS Northwest

Ace Billiards


Major Employers

CompanyLocal

Employees

Shoreline School District 1,400

Swedish Edmonds 1,280

Probation Dept 880

Crane Aerospace & Electronics 586

Nordstrom 570

Safeway 476

Costco 470

Edmonds Community College 463

Sears 411

JC Penney 400

T P I 400

Trade Products 400

Demographics

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services ofSeattle, Inc. © 2013 Marcus & Millichap

1-Mile 3-Miles 5-Miles

2012 Population 15,378 125,883 294,514

2017 Population 16,439 134,537 314,873

2012 Households 6,288 48,542 115,633

2017 Households 6,599 50,949 120,936

Median HH Income $44,112 $63,310 $68,063

Per Capita Income $23,114 $30,430 $33,284

HH Average Income $56,380 $77,669 $84,015

OFFERING SUMMARY

Proposed Financing

First Trust DeedLoan Amount $4,375,000

Interest Rate 4.50%

Term 5 Years Fixed

Amortization 30 Years

Debt Coverage Ratio 1.65

4520 200th Street Southwest & 20102 44th Avenue West

Lynnwood, WA 98036

Location

2



Comments

McDonald's Furniture is currently MTM and is not paying any CAM. The charge per month is $3,000 total. Current analysis

assumes this space as vacant.

Pro Forma assumes McDonald's Lease at Market ($8.00/SF) with CAM charges on the assumption that a new owner would

terminate the month to month lease and rerent the space.


Suite Tenant GLA % of

GLA

Lease

Commence

Lease

Expire

Annual

Rent

Rent/

SF

2013

CAM

101 ATS Northwest, Inc. 1,495 3.86% 04/11/2011 04/30/2016 $13,455.00 $9.00 $4,530.27

102 Vacant 1,495 3.86% $11,960.00 $8.00 $3,240.27

103 Vacant 1,495 3.86% $11,960.00 $8.00 $3,081.62

105 Ace Billiards 4,485 11.57% 9/15/2012 06/16/2015 $36,000.00 $8.03 $15,520.54

108 McDonald's Furniture* 8,970 23.14% MTM MTM $36,000.00 $4.01 $22,318.13

201 PC Recycle 1,495 3.86% 01/19/2013 01/18/2016 $26,536.20 $17.75 $5,780.27

202 Kalia Indian Cuisine 1,495 3.86% 02/01/2002 01/31/2017 $25,338.00 $16.95 $10,528.18

205 Aaron's 8,177 21.10% 12/01/2010 03/31/2021 $92,195.64 $11.27 $25,202.88

207A Duke & Duchess 733 1.89% 07/01/2004 06/30/2014 $16,555.92 $22.59 $3,549.04

208 Talay Thai Restaurant 1,484 3.83% 04/04/1989 03/31/2018 $26,431.56 $17.81 $8,616.43

209 7-11 2,947 7.60% 01/01/1981 12/31/2015 $75,437.52 $25.60 $4,425.46

211 Tina's Nails 1,495 3.86% 05/01/2006 08/31/2013 $19,032.60 $12.73 $5,804.94

212 Ace Cash Express, Inc. 1,495 3.86% 04/01/2007 03/31/2015 $23,919.96 $16.00 $4,880.27

213 King Tut Mediterranean 1,495 3.86% 08/01/2011 10/31/2016 $21,558.00 $14.42 $10,014.94

Black Angus Land Lease 7/1/1982 6/30/2017 $119,919.20

Air Space Lease Income 11/04/1999 Auto Renewal $8,124.48

TOTAL VACANT 2,990 7.71% $23,920.00 $6,321.89

TOTAL OCCUPIED 35,766 92.29% $540,504.08 $121,171.35

TOTAL 38,756 100.00% $564,424.08 $127,493.24

TENANT SUMMARY

3



For The Year Beginning Year 1

Jan 2013

Year 2

Jan 2014

Year 3

Jan 2015

Year 4

Jan 2016

Year 5

Jan 2017

Year 6

Jan 2018

Year 7

Jan 2019

Year 8

Jan 2020

Year 9

Jan 2021

Year 10

Jan 2022

Tenant(s) Name Tina's Nails Duke &

Duchess

Ace Billiards

McDonald's

Furniture

7-11

Ace Cash

Express, Inc.

ATS

Northwest,

Inc.

PC Recycle

King Tut

Mediterranean

Kalia Indian

Cuisine

Black Angus

Land Lease

Talay Thai

Restaurant

Aaron's

Total Number of Tenants 1 1 4 3 2 1 1

Total Square Feet 1,495 733 26,054 4,485 1,495 1,484 8,177

Total Percentage 3.9% 1.9% 67.2% 11.6% 3.9% 3.8% 21.1%

Cumulative Percentage 3.9% 5.8% 73.0% 84.6% 88.4% 92.2% 113.3%


Percentage of SF Expiring Number of Tenants Expiring Cumulative % of SF Expiring

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

120%

To

tal P

roje

ct S

qu

are

Fo

ota

ge

0

1

2

3

4

Nu

mb

er

of T

en

an

tsJan 2013

4%Jan 2014

2%Jan 2015

67%Jan 2016

12%Jan 2017

4%Jan 2018

4%Jan 2019

0%Jan 2020

0%Jan 2021

21%Jan 2022

0%

LEASE EXPIRATION SUMMARY

Any projections, opinions, assumptions or estimates used here within are for example purposes only and do not represent the current or future performance of the property.

4520 200th Street Southwest

Lynnwood, WA 98036

Price $6,250,000

Down Payment 30% $1,875,000

Gross Leasable Area (GLA) 38,756

Price/SF $161.27

CAP Rate - Current 7.03%

CAP Rate - Pro Forma 7.65%

Lot Size 1.95 Acres

Year Built 1980

FIRST TRUST DEED

Loan Amount $4,375,000

Loan Type Proposed New

Interest Rate 4.5%

Amortization 30 Years

Program 5 Year Fixed

Annualized Operating Data

Income Current Pro Forma

Base Rent

Occupied Space $540,504 $600,184

Vacant Space at Market Rents $23,920

Gross Potential Rent $564,424 $600,184

Expense Reimbursements $98,853 $127,493

Gross Potential Income $663,277 $727,677

Vacancy/Collection Allowance 4.2% / $23,920 5% / $30,009

Effective Gross Income $639,357 $697,668

Total Expenses $200,137 $219,514

Net Operating Income $439,220 $478,154

Reserves / Replacements $5,813 $5,813

Net Cash Flow Before Debt Service $433,406 $472,341

Debt Service $266,010 $266,010

Debt Coverage Ratio 1.65 1.80

Net Cash Flow After Debt Service 8.93% / $167,397 11.00% / $206,331

4

Location


Financing


Expenses

Real Estate Taxes $54,487 $67,930

Insurance $8,500 $8,755

Air Lease Expense $23,565 $24,271

Repairs & Maintenance $10,000 $10,300

Accounting Fees $500 $515

CAM

Utilities $45,608 $46,976

Repairs & Maintenance $27,877 $28,713

Contract Services $4,026 $4,147

TOTAL CAM $77,511 $79,836

Management Fee (% of EGI) 4% / $25,574 4% / $27,907

TOTAL EXPENSES $200,137 $219,514

EXPENSES/SF $5.16 $5.66


Loan information is time sensitive and subject to

change. Contact your local Marcus & Millichap Capital

Corporation representative.

FINANCIAL OVERVIEW


PROPERTY DESCRIPTION

The subject property consists of a 38,756 square foot retail center including an additional ground lease with Black Angus, a well known national steak house. The subject is situated along 200th Street and 44th Street within two blocks of 196th Street, connecting two major retail corridors within the Lynnwood submarket. Immediately to the north of the property is a recently improved southbound on ramp to Interstate 5 with a new HOV lane with extended entry lanes defusing congestion of early morning traffic flow. Directly to the south and approximately ½ mile from the subject is Highway 99. The property is strategically located within one of the county’s most dense retail corridors and two of the state’s major Highways/Interstates.

In addition to existing infrastructure, the purchaser of this asset will also benefit from the upside potential of the property as it relates to the newly proposed Sound Transit Lynnwood Terminal for the expansion of the Link Light Rail from Northgate to Lynnwood. Levitz Center is adjacent to the existing Lynnwood Transit Center. No site has been identified for the new terminal, yet the area is gearing up for the 2016 transit expansion. Lynnwood Link Extension is part of the voter-approved Sound Transit 2 Plan to extend mass transit throughout the region. Upon completion, the Lynnwood Station will be the most northern point of a light rail system with more than 50 miles of service to the north, south and east of Seattle.

Lynnwood Transit Center / Park-and-Ride - Recently, the DOT completed a $64 million project including the addition of 20 bus bays, passenger waiting areas, and 300 additional parking spaces to the existing park-and-ride lot adjacent to Levitz Center. The project also included new freeway ramps that provide bus and HOV traffic direct access to the I-5 HOV lanes, providing faster, safer, and more-convenient travel between the transit center and I-5 north / south.

Alderwood Mall - Utilizing the lifestyle-center concept, Alderwood Mall (now referred to simply as Alderwood) added two additions during its 2009 renovation, dubbed The Village and The Terraces. Combined, the $100 million, 270,000-square-foot additions encompass 35 new stores and a Loews 16-screen Cineplex. JCPenney, Macy’s, Nordstrom, and Sears anchor the 1.4 million-square-foot regional mall, which has nearly 200 stores. New tenants include Ann Taylor Loft, Borders Books, Chico’s, Christopher & Banks, Coldstone Creamery, Coldwater Creek, Crabtree & Evelyn, Eddie Bauer Home, Jos. A. Bank Clothier, P.F. Chang’s China Bistro, and Pottery Barn. Alderwood is a major employment center for the region. The mall’s retailers support 4,000 to 6,000 jobs, depending on the season, while the mall itself employs 1,525 workers. The mall is located just 1.5 miles from Levitz Center.

Investment Highlights

■ Adjacent to Lynnwood Transit Center / Park-and-Ride

■ Located in Major Retail Corridor with Immediate Access toInterstate 5

■ Solid Tenant Mix with Rents At or Below Market Rates

■ CC - West Zoning Allows for a Mixed-Use Project with aMaximum Building Height of 140 Feet

6




INVESTMENT OVERVIEW

Located in the northwest portion of the state in Snohomish County, Lynnwood is approximately 15 miles north of Seattle and 12 miles south of Everett. The city was incorporated in 1959 and now stretches over an area of 7.7 miles. Historically a residential community, and now also known for its miles of commercial development along 196th Street and Highway 99, as well as being home to the massive, regional Alderwood retail center, Lynnwood is fortuitously located at the intersection of I-5 and I-405. This key location has contributed to strong population and employment growth as rising land costs and shrinking property inventories in King County encourage employers and employees to look to Lynnwood for growth and development. Moreover, Lynnwood’s close proximity to the major employment hubs of Seattle, Everett, Bellevue, and others creates a solid economic base for its residents.

The city of Lynnwood benefits from its close proximity to the Seattle Metro Area. Many local employees commute from Seattle and many Lynnwood residents commute to jobs in Seattle. Lynnwood is a regional retail center and a financial center for southwest Snohomish County (about 200 financial firms operate in Lynnwood). The city offers a wide range of governmental, commercial, and educational services. Many federal, regional, and state governmental offices have facilities in Lynnwood. Manufacturers and retailers are also attracted to the area. In total, the city boasts approximately 3,200 businesses. Lynnwood is expected to see the addition of 26,200 new jobs between 2010 and 2040, mostly in the financial, services, and retail sectors, equating to a gain of approximately 80%. Major employers in Lynnwood include Alderwood, as well as Fred Meyer, Target, Kohl’s, the Edmonds School District, and Edmonds Community College. Businesses in the Alderwood Business Center, which consists of two office towers, employ a combined total of 700 workers. Major employers in Snohomish County include Boeing, Premera Blue Cross, and Providence Health System. Other major employers include Naval Station Everett (6,000 employees), along with various manufacturers, health care firms, and services providers.

7




LOCATION OVERVIEW

8




PROPERTY PHOTOS

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RETAIL LOCATION MAP

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Local Map Regional Map

AREA MAPS

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AERIAL PHOTO


SALE COMPARABLES

1)

2)

3)

Levitz Center

Plaza 525

Snoqualmie Ridge Retail

River Road Retail

13

SALE COMPARABLES



RECENT SALES MAP

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Subject Plaza525

SnoqualmieRidgeRetail

RiverRoadRetail

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Average Price per Square Foot

14

SALE COMPARABLES


Average Cap Rate


CAP RATE AND PRICE PER SF

1

2

Levitz Center


Lynnwood, WA 98036

Plaza 525

12502 Mukilteo Speedway

Mukilteo, WA 98275

Snoqualmie Ridge Retail

7811-7917 Center Boulevard SE

Snoqualmie, WA 98065

Close of Escrow: 2/11/2013 Major Tenants

Year Built: 2007 Starbucks

Gross Leasable Area (GLA): 14,000 SF Desert Sun Tanning

Sale Price: $5,297,500 French Nail

Percent Down: 33% Ink Paper Scissors

CAP Rate: 7.93% Split Ends Hair Salon

Price/SF (GLA): $378.39 Blue Ribbon Pet Salon

Lot Size: 0.42 Acres

Subject Property

Year Built: 1980 Major Tenants

Gross Leasable Area (GLA): 38,756 SF McDonald's Furniture

Offering Price: $6,250,000 Ace Billards

Percent Down 30% 7-11

CAP Rate: 7.03%

Price/SF (GLA): $161.27


15


Year Built: 2002 Key Bank

Gross Leasable Area (GLA): 12,231 SF Zoka Coffee Roaster

Sale Price: $3,950,000 Andre's Dry Cleaner

Percent Down: 100% BIBO Coffee Company

CAP Rate: 7.50% The UPS Store

Price/SF (GLA): $322.95


SALE COMPARABLES



RECENT SALES

Year Built: 1980 Major Tenants

Gross Leasable Area (GLA): 38,756 SF 7-11

Offering Price: $6,250,000 Black Angus Steak House

Percent Down 30% Talay Thai

CAP Rate: 7.03% Aaron's

Price/SF (GLA): $161.27 ATS Northwest

Lot Size: 1.95 Acres Ace Billiards

3 River Road Retail

1002 North Meridian

Puyallup, WA 98371

16


Year Built: 2004 UPS

Gross Leasable Area (GLA): 14,291 SF Big Foot Java

Sale Price: $4,000,000 Subway

Percent Down: 47% Great Clips

CAP Rate: 7.50% Five Guys Burgers

Price/SF (GLA): $279.89 Weight Watchers

Lot Size: 0.93 Acres T-Mobile

SALE COMPARABLES



RECENT SALES


RENT COMPARABLES

1)

2)

3)

Levitz Center

Parkland Plaza

Silver Plaza

Freeway V

18

RENT COMPARABLES



RENT COMPARABLES MAP

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SilverPlaza

FreewayV

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RENT COMPARABLES


Average Rent per Square Foot


OCCUPANCY AND AVERAGE RENT PER SF

Average Occupancy

2

1

Subject Property

Parkland Plaza

19725 40th Avenue West

Lynnwood, WA 98036

Silver Plaza

19125 33rd Avenue West

Lynnwood, WA 98036

Date Surveyed: May 2013 Major Tenants

Occupancy: 88% Pro-Golf

Year Built: 1990 Cruise-Center

Gross Leasable Area (GLA): 15,194 SF

Rent/SF (GLA): $17.00

Available SF: 1,800

Lot Size: 0.78

Lease Type: NNN


Occupancy: 88% House of Flowers

Year Built: 1977 Salon En Vogue

Gross Leasable Area (GLA): 8,940 SF All City Credit Union


Available SF: 1,500

Lot Size: 1.18

Lease Type: NNN


Occupancy: 92% McDonald's Furniture

Year Built: 1980 Ace Billards

Gross Leasable Area (GLA): 38,756 SF 7-11


Available SF: 2,990


Lease Type: NNN

Levitz Center


Lynnwood, WA 98036

20

RENT COMPARABLES



RENT COMPARABLES


Occupancy: 92% 7-11

Year Built: 1980 Black Angus

Gross Leasable Area (GLA): 38,756 SF Talay Thai

Rent/SF (GLA): $12.00 Aaron's

Available SF: 2,990 ATS Northwest

Lot Size: 1.95 Acres Ace Billiards

Lease Type: NNN

3 Freeway V

20101 44th Avenue West

Lynnwood, WA 98036


Occupancy: 85% Jackson & Hewitt

Year Built: 1979 Taste of Pho'

Gross Leasable Area (GLA): 10,494 SF Evergreen Donuts

Rent/SF (GLA): $18.00 Western Union

Available SF: 1,605 Millennium Nails

Lot Size: 0.69

Lease Type: NNN

21

RENT COMPARABLES



RENT COMPARABLES

LYNNWOOD, WA

OFFERING MEMORANDUM

Levitz Center

Offices Nationwide

www.MarcusMillichap.com

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Levitz Center OM - commercialmls.com...CAP Rate - Current 7.03% Net Operating Income - Current $439,220 Net Cash Flow After Debt Service - Current $167,397 CAP Rate - Pro Forma 7.65%