Core-plus Case Study (sold)

Bay Boulevard

The Opportunity

• In Q1 2013 CIRE acquired a 100% leased multi-tenant industrial flex asset built in 2003

• The Property was purchased off-market direct from seller at an above market cap rate, representing a significant discount to comparable sales in San Diego

• Excellent location a few hundred yards from the ocean and situated immediately west of the I-5 Freeway with direct on-ramp and off-ramp access adjacent to the site

• The Property provides strong current cash flow and the Company plans to hold the asset long-term to capitalize on the quality of the location and the potential for strong long-term appreciation

Strategy

• Long term (10 year), low interest rate assumable debt was placed on the project allowing security for a long-term hold and flexibility for alternative exit strategies

• Complete a complete audit and overhaul of property level operations to maximize efficiencies and reduce costs

• The Property is condo mapped for 10 units, which provides a flexible exit strategy and potential to maximize value by selling individual units to owner-users

• The project is comprised of Five (5) tenants within ten (10) suites, allowing for expansion and contraction flexibility with minimal future tenant improvement costs

• Significant master planned development slated for land directly adjacent to the asset will provide potential for strong long-term appreciation

Execution/Results

• Within a relatively short hold period, CIRE executed a multi-faceted value-add strategy that resulted in significant enhancement of the quality and quantity of underlying cash flow at the property.

• Realized an aggregate project level return on equity of 81% over a 23 month hold period, representing a return of investment of approximately 40.5% per year.