PREPARED FOR Marty and Karen Jensen C/O Matthew Herron Herron Law 350 10th Avenue 880

San Diego, CA 92101 PREPARED BY Steven Martini QualityFirst Commercial, Corp. California DRE License #01330605 1500 State Street Suite 150 San Diego, CA 92101 619.243.8451

What is
We go beyond commercial and retail sales and leasing. We create distinctive relationships of lasting value, deliver a solid return for our clients and
foster a collaboration of trust and results.

We are entrepreneurial, not corporate. We get things done through initiative ideas and teamwork. We value relationships over shortterm gains and we do whats right rather
than what is expedient.

We take the time to understand our clients short and long term goals. We stay in touch and keep you posted on the progress of all activity on your behalf. We are a proactive team that does their homework, figures out what works specific to
your needs and seeks out tenants and buyers through an off the couch approach.

We value you and make ourselves readily accessible.

Our objective is to sell or lease your property in the shortest possible time at the highest price possible. To do this, QualityFirst Commercial will draw on techniques, which over the years have proven to be successful.

About

About QFC: Since 2009, QualityFirst Commercial has continued to grow as San Diegos locally owned and operated full service commercial real estate firm practicing throughout Southern California. The firm continues to grow from reputable work ethic, good business ethics, accessibility and exceptional market knowledge. Our Services: Whether you are leasing, buying, selling or relocating your business or restaurant, QualityFirst Commercial offers a variety of real estate services in additional to solid industry knowledge to help you every step of the way that include: Restaurant Sales Tenant/ Buyer/Seller Representation Commercial Leasing & Sales Property Management & Maintenance Commercial Lender Services/ REO

1887 On The Bay 1701 Strand Way, Coronado, CA 92118

Description
In 1912, the Coronado Yacht Club had established its first headquarters in the boathouse, followed by the San Diego Yacht Club in the 1920s. The boathouse continued to serve the hotel and Coronado community until 1968 when the building was leased by the Chart House Restaurant Group. After 31 years of serving the San Diego community, the Chart House left Coronado and the current owners undertook a complete remodel inside and out. Today, 1887 on the Bay offers a stunning trip back in time and a world class menu. Restaurant has a tremendous reputation with customers. Size: Approximately 6,500 SF Capacity: 265 people Hours: 5pm 11pm Interior Condition: Excellent ($800,000 renovation in 2002) Exterior Condition: Excellent ($1,100,000 exterior renovation in 2002) Current Approximate Gross Revenue: $2,500,000 - $4,000,000 Ownership: Current ownership has owned t restaurant over 12 years. Patio: 2 large patio dining areas (not included in the SF) Stories: 2 Restrooms: 4 (2 ADA) Kitchen: Remodeled in 2001/2002 Parking: Approximately 100 spaces free for customer use after 4pm Liquor License: Full Liquor Type 47, Type 58 Caterer Permit (no disciplinary actions). Buyout Available: Yes, 365 days a year, 4 buy-out options for private events. Entertainment: Yes, live entertainment until 2am, 7 days per Week.

Valuation and Price

We feel that the current gross revenue that the restaurant makes per year does not accurately reflect what the next generation will perform and strive to achieve. While the current ownership has indicated annual sales between 2,500,000 and 4,000,000 we have seen and worked on similar requirements of similar size and license type that generate between 4,000,000 and $6,000,000 annually. It is not our suggestion to price the restaurant based on valuing the current income (income valuation). The annual gross sales method uses a percentage of annual gross sales to determine the value. The percentage used depends on the lease, location, condition of restaurant, whether it is a franchise or not, and validity and stability of the annual revenue number. The better these traits, the higher the percentage commanded. Restaurants with poor records and in poor shape will only command perhaps 15-20% of the gross sales. One with a good lease, location and verifiable numbers could command up to 40% - 50% or more of gross sales and some franchises. I would look for an offer equal to 50% of the gross sales figure of $4,000,000 - $6,000,000 or between $2,000,000 and $3,000,000. Factors Potential Buyers Consider:

Lease factors such as length of lease, amount of rent vs. market, escalation clauses, and assignment provisions. Physical condition of the facility. Original cost and replacement cost of the facility. Sales potential of conversion to another concept and cost of conversion. Ability of the business to expand and support multiple locations. Ease or complexity of the operation and amount of training and experience required to manage the business. Amount and quality of the sales and the sales history of the business. External factors such as the state of the economy Impact of recent competition or potential for new competition. Absentee ownership or corporate ownership vs. hands on ownership. Conditions of the sale, such as amount of cash required and terms offered. Site characteristics such as ingress, egress, signage, visibility, parking, etc. Market considerations such as demographics, changes in traffic generators, growth or potential for a decline of an area. Motivation of the seller, reason for the sale. Similar or competing properties that are on the market at the same time. Goodwill factors such as years of continuous operation, reputation, awards or special recognition.

Marketing Plan
TENANT IDENTIFICATION BROKER COOPERATION EMAIL CAMPAIGN DIRECT MAIL SOCIAL MEDIA/ PRESS RELEASE

Tenant Identification
The goal is to target specific tenants whose leasing criteria match the project, i.e. Other waterfront restaurant operators across the USA.

Broker Cooperation
Information will be delivered to a broad list of brokers in order to ensure that all brokers know about the propertys availability.

Email Campaign
Create targeted email campaign programs that promote the property and generate activity.

Direct Mail
Distribute flyers and mailers promoting the property and creating awareness.

Social Media Marketing

Expand reach, while engaging and increasing potential leads, by using targeted posts to promote property across several social platforms. These include, but are not limited to, LinkedIn, Facebook, Twitter, Instagram, YouTube and Blogging.

Press Release
Utilize optimized press release distribution services by containing targeted keywords and inbound links that will attract search engines and ultimately bring quality traffic and conversions.

Marketing Strategy
LOCATION Based Prospecting USE Based Prospecting

Competing Properties Direct Mail

Tenant Mix Analysis

On-Site Showings Cold Calls Letter of Intent Signed Lease Target Market Areas Credit Verification Website

Email

Warm Calls

Existing Contacts

BIZNOW Showcase

Referrals

Other Brokers

RELATIONSHIP Based Prospecting

Prospecting Strategy
The goal is to focus on the most probable source of buyers in an effort to maximize the lease value of the asset. We can find and contact those prospects in a number of ways.

We currently use personal canvassing, direct mail, email programs, and social media to reach prospective buyers and cooperating brokers.

We maintain an aggressive targeted marketing philosophy. The concept of just waiting for market response to advertising and signage does not get results in this competitive market.

Utilize industry resources that expose the property on a national platform; we use them regularly to market our listings.

Tours, Negotiations & Qualification

Property Tours
Our team will readily accommodate property tours for prospects and brokers using an off the couch approach, anytime including after hours and weekends.

Proposals
We will develop proposals in professional letter form. This document will contain all of the essential deal points between the owner and prospective buyer. It is approved in writing by both parties prior to creation of the contract.

Compliance Approval
We will work with ownership on all new prospects to ensure that prospective buyers pass the standard application process and are approved to move forward.

Listing & Pricing

Our team will list the property on all real estate listing services. We propose the following pricing structure: There is very few creative loft style warehouses left in Downtown. This space will lease very quickly to an open floor plan restaurant user. We propose to price the building at $2.00 SF. A similar conversion is currently taking place in the former Ironside building on India Street in the heart of Little Italy. See Case Study below

Listing Period
Through intense marketing efforts, to both prospective tenants and other brokers, we will collect offers from multiple buyers. We propose to list the property for a period of 12 months.

Tenant Selection
Once we have received multiple offers on the property, we will decide which buyer is willing to close with the best terms. We will then collect financials, their articles of incorporation and research the company in order to make a recommendation on which buyer we think is the best fit for the property. We will then let the owner decide which buyer they will go with.

Brokerage Team
Steven C. Martini

President

Steven Martini, President of QualityFirst Commercial, Corp., has extensive knowledge in commercial real estate management and brokerage throughout the Western United States. Mr. Martinis team currently manages 35 commercial properties totaling over 1,000,000 square feet and is continually growing the portfolio. His career started in the brokerage field in 2001 and since he has leased and sold over three million square feet of retail, office, and restaurant space, and has sold over 60 commercial buildings and businesses. Mr. Martini is a graduate of the University of Vermont and member of several professional and community-based organizations, including the Urban Land Institute, Receivers Forum, East Village Association, California Youth Lacrosse League and the San Diego Yacht Club.

Barrett Geenen

Senior Associate
Barrett Geenen, Senior Associate, joined the QualityFirst Commercial Brokerage Team in 2011. His extensive knowledge and understanding of the sales negotiating process allows him to provide extraordinary value to his clients. Barretts experience includes site selection, lease and sales negotiation, financial analysis, and lease renewal. Barrett is a San Diego native who graduated from the University of Colorado, Leeds School of Business. Prior to joining QFC, he worked as a Financial Representative for Northwest Mutual in San Diego, CA. Barrett is a CCIM candidate and active in the San Diego sports community. He is currently a lacrosse coach at the Bishops School in La Jolla, as well as RC Starz, one of the premier club lacrosse programs on the West Coast.

Commercial Management Team

John Valkus
Controller/CFO
John Valkus is the controller for QualityFirst Commercial, Corp., and is responsible for all internal accounting functions. Mr. Valkus brings over 30 years of experience in institutional accounting and reporting to the company. In addition to providing annual operating budgets, monthly accounting reports, and cost controls, he also oversees the property management property budget preparations, cam reconciliations, operating expense escalations, bank reconciliations, and internal audits.

Bonnie Fanelli
Senior Property Manager
Bonnie Fanelli is the senior property manager at QualityFirst Commercial and is responsible for the properties in the QualityFirst Commercial management portfolio. She has a special insight of the importance of keeping a property in top condition while maintaining excellent client relations to achieve the goals of each investor. Mrs. Fanelli has an extensive background in property management; working at McMillan Ventures, Parma Management and La Jolla Bank and Trust Company prior to joining QFC. Her experience ranges from resolving tenant issues to preparing budgets and managing tenant improvements.

Bob Fierley
Building Engineer
Bob Fierley is the facilities manager at QualityFirst Commercial. Mr. Fierley oversees and works hands on with an excellent team of roving maintenance technicians, additional field managers, and various on-site managers and caretakers.

Gavin McCarthy
Senior Associate
Gavin McCarthy works with the QualityFirst Commercial Brokerage Team on Tenant and Landlord Representation requirements completing research and gathering market data. Gavin is a San Diego native with a degree from the University of San Diego.

Listing Agreement

See attached