• Fresh & Easy
• Marina 1
• Ukiah
• Marin Gateway
• Automotive
• Others

Fresh & Easy- Leased Investment
Fairfield, CA

Tenant: Fresh and Easy Ground Lease
(NAS, LON: TSCO)

Site Size: 55,000 SF

GLA: 14,700 SF

Investment Strategy:
In keeping with our missive of being active buyers of retailer's surplus properties located in resilient markets, in 2007 Tallen & Keshen Holdings, LLC ("TKH") purchased an underperforming Smart & Final store through an off-market acquisition. TKH enjoys a longstanding relationship with Smart & Final based upon decades of closely working with their store locations and management team.

This property is strategically located proximate to Target, Home Depot, Walgreens, FoodMaxx, 99 Cents Only and the City of Fairfield's Transportation Center, near Interstate 80 at the West Texas exit, in the San Francisco Bay area of Solano County.

TKH assumed the risk of acquiring a "dark box" at a highly favorable basis drawing on our existing knowledge of the market, relationships with local stakeholders and city leaders. Upon closing on the property, TKH immediately obtained key entitlements and went to the leasing market for a tenant for the property utilizing our wholly owned brokerage company, Retail Enterprise Group, Inc. ("REG"). REG secured a ground lease for the entire property with Fresh & Easy, a subsidiary of European retailing giant Tesco.

Conclusion:
The project is stabilized and provides strong cash flow.

Investment Strategy:

In keeping with one of Tallen & Keshen Holdings' ("TKH") core investment strategies of acquiring underperforming or "dark retail boxes," in October of 2005, Anne Keshen and Terrence Tallen purchased a 92,000 sq ft dark K-Mart located in the City of Marina, CA. The property is located on the development and land constrained Historic Monterey Peninsula.

K-Mart ceased operations due to the closure of the nearby Fort Ord Military Base and the related loss of consumer traffic. The property had become was a blight on the local community due to having been vacant for approximately 5 years. After prolonged negotiations, TKH purchased this former Wachovia Bank foreclosed property out of Receivership. TKH contributed the equity towards the purchase and acquired the property without any partners.

The property had previously been by under contract with several local and national investment and development companies, yet TKH was the only company willing to make the financial commitment to the City of Marina. TKH determined that this investment opportunity was a perfect fit for their risk profile and value creation plan. TKH obtained key entitlements including a comprehensive or blanket "Use Permit." All entitlement strategies and negotiations were performed by TKH principals Mary Anne Keshen Esq. and Terrence Tallen; independent of outside legal counsel.

In early 2006, TKH executed a long term ground lease with Walmart and it was slated to be the 300th store in CA, the closest store location to the coast and the most expediently opened store in CA, only 7 months. The achievement of a "Blanket" Use Permit ultimately allowed Walmart to successfully operate in this highly political marketplace.

TKH successfully overcame significant opposition from the powerful International Food and Commercial Workers (IFCW) Union and successfully resolved all other obstacles and opponents that typically challenge Walmart store openings.

Conclusion:

TKH's redevelopment efforts removed the blight from the community and resulted in a dramatic windfall to the local area by creating hundreds of jobs for the local population and provided the City of Marina with crucial sales tax revenue. TKH ultimately sold the property and additional land to Walmart in January of 2007 for a significant return on its initial investment, said to be one of the most profitable asset sales of that year.

Investment Strategy:
In 2007, TKH principals, Anne Keshen and Terrence Tallen purchased 15 acres of "automotive zoned" land located directly on Highway 101 and Airport Park Boulevard in Ukiah, CA, a highly visible location at the Northern gateway to CA's wine country.

Tallen & Keshen Holdings went through the public entitlement process to change the permitted use from automotive retail to general retail/commercial and successfully completed the rezoning of the property in 2007, achieving a unanimous vote from the Ukiah City Council. The more comprehensive retail/mixed use rezoning immediately increased the property value by allowing for a variety of uses including retail, office, residential and industrial. All entitlement strategies and negotiations were performed by the principals of TKH without outside legal counsel. The property subsequently appraised for an increased value of 150% of the original purchase price.

TKH negotiated with a number of national credit tenants including: Kohl's, Target, Best Buy, Costco, Gottschalks, Petco and others to bring these key uses to the City of Ukiah while aggressively competing against Developer's Diversified planned redevelopment of the shuttered Masonite Industrial plant called Mendocino Crossings. Costco negotiated a letter of intent with TKH for this property.

TKH overcame the competitive obstacles of the neighboring project and developed a number of compelling site plans involving assemblages of neighboring properties owned by both public and private stakeholders. The site plans and the value of our prospective retailers was a catalyst for the City of Ukiah Redevelop Agency to purchasing the property from TKH in 2009.

Conclusion:
TKH is pleased to have made a significant initial investment in the City of Ukiah and believes that the combination of the City's leadership and TKH's value creation expertise, market knowledge and retailer relationships will create significant long term value for the local community.

Investment Strategy:
Marin Gateway shopping center is located in a high-visibility, easily-accessible location on Highway 101 at the Sausalito interchange in southern Marin County. The shopping center encompasses 182,000 square feet in seven, single-story retail buildings that surround a large central parking area with approximately 830 spaces.

Tallen & Keshen Holdings and its wholly owned brokerage company, Retail Enterprise Group Inc. ("REG"), in conjunction with Blake Hunt Ventures, redeveloped and renovated the project in late 2004 with a strategy to re-merchandise the center with an upgraded tenant mix during 2005.

TKH was directly responsible for the value creation play at the project and worked closely with local community stakeholders and the Marin County Supervisors.  TKH was responsible for increasing revenue, visibility and the tenant mix and completed the first Babies R Us Superstore in Marin County, a new Starbucks, Dollar Tree, a drive through Panda Express located directly on the 101 and many other users, thereby enhancing consumer traffic, cash flow and project value.

The site serves southern and central Marin County and has excellent demographics. With a dense high-income population and the surrounding traffic commute along the Highway 101, the Gateway Marin Retail Center is uniquely positioned to attract an expanded shopper base and provides enhanced retail and dining options to the Southern and Central Marin County community.

During TKH’s involvement with the project from 2003-2008 the property was owned in a joint venture between the Bay Area Smart Growth Fund and the Marin City Community Land Corporation, a local community organization.  During TKH’s leadership, the project was awarded the San Francisco Business Time Retail Sale of the Year Award.

The property is located immediately north of the Golden Gate Bridge at the gateway to Marin County, one of the nation's wealthiest communities. Marin County serves primarily as a wealthy bedroom community for San Francisco and related Bay Area business centers.
Representative new leases include:

• Babies R US
• Dollar Tree
• Panda Express
• Starbucks
• Massage Envy
• Butterfly Life
• Subway
• Soccer Pro
• Styles For Less
• Little Gym
• and others...

Conclusion:
The Gateway Marin Retail Center was singled out in the nine county Bay area by the San Francisco Business Times as the "Retail Deal of the Year Award" recipient, for the innovative acquisition structure conceptualized by TKH, Pacific Coast Capital Partners and Walter Ross, the advisor to the Marin City Municipality, in marrying the long term benefit of project ownership for the residents of Marin City.

Investment Strategy:
TKH joined forces with a prominent Northern, CA auto dealership owner and investor, with 40 years of experience in the automotive industry to reposition and redevelop two surplus auto dealerships into retail projects, located along outstanding, high visibility freeway locations in Marin County, CA. Located in San Rafael's High Growth Retail Corridor off the west side of Highway 101, TKH strategically planned to take advantage of the problems faced by the automobile industry by redeveloping well located urban and suburban dealerships into profitable retail centers.

With the economic shifts from older, single-brand dependent dealerships located in infill locations to larger, regional multi-brand "auto malls", and the success of certain brands that needed larger sites for their dealerships, coupled with the overcapacity in the auto industry, this created an opportunity of "dark box" sites for redevelopment. These two properties presented TKH with the opportunity to deliver strong results. TKH led the redevelopment team in the space planning, entitlements, new signage program and successfully addressed the delivery zone, access and adaptive re-use issues, redeveloping this into a stabilized property.

Seeking to take advantage of strategic, high visibility retail locations in a free standing buildings visibility located in San Rafael and Marin, CA's high growth retail corridor, TKH successfully negotiated entitlements and redeveloped two sites into retail projects; tenants include a flagship store for California Closets, a Starbucks, Citi Financial banking center, and Sleep City. This is now a stabilize property with ample parking, signage and highway visibility.

Conclusion:
TKH successfully repositioned the former Range Rover and Infiniti dealerships in the Bay Area's wealthiest county, resulting in a successful value creation play with strong cash flow and two community serving redevelopment projects.