Investment Overview

Being offered on an unpriced basis, 525 West Napa Street in Sonoma, California, is a single-tenant, net-leased investment leased to Duggan’s Mission Chapel, the base term of which expires in December 2028 with two 5-year options to extend. At $0.70 per sq. ft. monthly, the current base rent is at least forty percent below prevailing retail lease rates in this submarket of Sonoma. Additionally, the two percent biennial increases equate to one percent increases annually, also well below industry standards. The property is located on the “soft corner” at the dynamic intersection of 5th Street West and West Napa Street. A testament to the incredible vehicular traffic count at this intersection, the pedestrian walkways at each of the four corners are monitored for safety in every direction. Neighboring retailers on the three corners opposite of 525 West Napa Street are Safeway, a flagship Wells Fargo branch, and Sonoma Valley Center, anchored by Sonoma Market, and Redwood Credit Union. "Optionality" refers to the state or quality of being optional, meaning something is left to one's choice or not compulsory. It signifies that an action, item, or rule is not required or mandatory, but rather a matter of preference or discretion…Merriam-Webster. There is a reasonable possibility that the value of 525 West Napa Street need not solely be dependent on the below-market income from the current lease. The stakeholders, investors, and other participants in the LeFever-Mattson bankruptcy case may, with U.S. Bankruptcy Court approval, have the ability to terminate the existing lease with Duggan’s Mission Chapel, freeing the subject property of its well below market income stream. In doing so, the subject property would also appeal to owner-users and add-value investors, creating optionality in appealing to a wider variety of investors. There are three financial models included in this offering. Each endeavors to provide a reverse-engineered approach to arrive at a market value for owner-users, add-value investors, and arms-length investors. 525 West Napa Street is approximately 9,572 square feet of gross building area, with 15 on-site parking spaces. Two double-wide curb cuts allow for easy ingress/egress, with an additional double-wide driveway onto Studley Street immediately to the south of the subject property, parallel to West Napa Street. The subject property enjoys high-identity, illuminated signage on West Napa directly in front of the building improvements. A portico-style entry is on the east façade of the building. This is a rare offering indeed. For the add-value investor, acquiring a well-located asset with exposure to a tremendous traffic count and the possibility of bringing the income stream to market is uncommon in this infill, barriers-to-entry market. For owner-users, this location represents the opportunity to acquire a flagship site with ample on-site parking. Finally, for the arms-length investor seeking a bond-like investment, underwriting a lower than market return is offset by the confidence that