3517 Marathon Street

3517 MARATHON STREET

EXCLUSIVELY LISTED BY: RICH JOHNS 10-UNIT INVESTMENT OPPORTUNITY IN SILVER LAKE Multifamily Advisor T 818.432.1575 1 [email protected] EXCLUSIVELY LISTED BY:

RICH JOHNS Multifamily Advisor 818.432.1575 [email protected] CalBRE Lic. #01432215

CONFIDENTIALITY AGREEMENT

All materials and information received or derived from KW Commercial its directors, officers, agents, advisors, affiliates and/or any third party sources are provided without representation or warranty as to completeness, veracity, or accuracy, condition of the property, compliance or lack of compliance with applicable governmental requirements, developability or suitability, financial performance of the property, projected financial performance of the property for any party’s intended use or any and all other matters. Neither KW Commercial its directors, officers, agents, advisors, or affiliates makes any representation or warranty, express or implied, as to accuracy or completeness of the any materials or information provided, derived, or received. Materials and information from any source, whether written or verbal, that may be furnished for review are not a substitute for a party’s active conduct of its own due diligence to determine these and other matters of significance to such party. KW Commercial will not investigate or verify any such matters or conduct due diligence for a party unless otherwise agreed in writing.

EACH PARTY SHALL CONDUCT ITS OWN INDEPENDENT INVESTIGATION AND DUE DILIGENCE

Any party contemplating or under contract or in escrow for a transaction is urged to verify all information and to conduct their own inspections and investigations including through appropriate third party independent professionals selected by such party. All financial data should be verified by the party including by obtaining and reading applicable documents and reports and consulting appropriate independent professionals. KW Commercial makes no warranties and/or representations regarding the veracity, completeness, or relevance of any financial data or assumptions. KW Commercial does not serve as a financial advisor to any party regarding any proposed transaction All data and assumptions regarding financial performance, including that used for financial modeling purposes, may differ from actual data or performance. Any estimates of market rents and/or projected rents that may be provided to a party do not necessarily mean that rents can be established at or increased to that level. Parties must evaluate any applicable contractual and governmental limitations as well as market conditions,vacancy factors and other issues in order to determine rents from or for the property. Legal questions should be discussed by the party with an attorney. Tax questions should be discussed by the party with a certified public accountant or tax attorney. Title questions should be discussed by the party with a title officer or attorney. Questions regarding the condition of the property and whether the property complies with applicable governmental requirements should be discussed by the party with appropriate engineers, architects, contractors, other consultants and governmental agencies. All properties and services are marketed by Studio City in compliance with all applicable fair housing and equal opportunity laws. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own 2 investigation of the property and transaction 04 EXECUTIVE SUMMARY 16 LOCATION OVERVIEW 23 FINANCIAL ANALYSIS 26 RENT COMPARABLES

3 3 EXECUTIVE SUMMARY THE OFFERING KW Commercial is pleased to present 3517 Marathon Street, a vintage 10-unit investment opportunity located in Silver Lake (90026), in the Hollywood / Silver Lake submarket.

Current ownership has created a proven concept through interior unit and common area renovations that has helped the asset achieve strong market rental income metrics along with a quality common area renovation of public space, thus creating a sought-after destination for area residents.

The property, sited on a prominent view parcel, offers investors a unique and rare opportunity to immediately experience strong and stable income upon acquisition

The unit composition features Two (2) One Bedroom-One Bathroom and Eight (8) Large Single-One Bathroom apartment homes. Seven of Ten units (70% of units) have undergone a major gut-level renovation which has included a variety of comprehensive upgrades that include expanding doorways and openings, new stylized baths and kitchens with matching dishwashers, refrigerators and stoves package, new gleaming wood floor installations, new doors, lighting, locks, hardware and designer finishes. Most units feature dramatic Downtown city views.

The asset, built in 1928, has undergone a systematic renovation to the common spaces highlighted by drought resistant landscaping, new tile and paint finishes in the public spaces, secured entry and a new exterior color palette.

Building upgrades include much of the plumbing converted to copper lines, installation of common area laundry facilities (owned equipment) and new electrical panel separating the electrical utilities individually. The gas utilities are master metered.

Centrally located in Silver Lake, just south of Sunset Boulevard, 3517 Marathon Street is poised to capitalize on the tremendous momentum in the Hollywood-Silver Lake submarket. Furthermore, the subject property’s transit-oriented and highly walkable location offers residents access to myriad entertainment venues, cultural destinations, and dining options nearby.

Given the property’s location and strong income metrics, 3517 Marathon Street is an ideal investment for apartment operators seeking immediate returns along with long term wealth preservation and appreciation. 5 6 7 i n vestme n t h i g h l i g ts

THE OPPORTUNITY: 3517 Marathon Street is a 10-unit investment opportunity located in Silver Lake, a densely populated rental submarket of Los Angeles known for STRONG EMPLOYMENT: Hollywood-Silver Lake excellent rent growth and low vacancy rates. submarket is one of the strongest employment centers in the Los Angeles MSA and offers access to a diverse set of employers. IMMEDIATE RETURNS: The asset has undergone a systematic renovation to much of the common areas and 7 of 10 apartment interiors which are now achieving near lACK OF hOUSIng AFFORDABIlITY: There is a market rents thus facilitating strong and stable investor significant affordability gap to home ownership in the returns along with future upside potential. Hollywood-Silver Lake submarket. As the median home price in the area is approximately $1.5m, a typical WELL LOCATED: The property is located in the heart of monthly mortgage payment is approx. 1 1/2 times more Silver Lake just south of Sunset Boulevard on Marathon than the average renovated rents at 3517 Marathon Street. Street and approx. ½ mile from Sunset Junction and the many retail and entertainment venues such as Intelligentsia, Mohawk General Store, Cafe Stella and Forage. Walk in the NO SEISMIC RETROFIT REQUIRED: 3517 Marathon other direction and you’re right by Squirl and Twig & Twine. Street is not on the list of buildings that require a seismic There are endless dining and shopping options within retrofit. walking distance and within minutes, a short drive puts you LOCATED NEAR NEW COMMERCIAL DEVELOPMENTS: in Los Feliz and Echo Park. More than 2.3 million SF of commercial space is currently gREAT WAlKABIlITY: With a 77 Walk Score, 3517 under development in the Hollywood-Silver Lake submarket Marathon Street is a “Very Walkable” - Most errands can representing more than $1.58B in project costs, it is estimated that be accomplished on foot. nearly 6,500 new jobs will be created in Hollywood alone. EXCEPTIOnAl FInAnCIng / lOAn OPTIOnS: Historically low interest rates and attractive financing options with as little as 30% down payment possible.

TRAnSIT ORIEnTED: 3517 Marathon Street is located approx. a 1/2 mile from Sunset Junction in Silver Lake. Residents are within a short walk of the Metro Red Line 8 which currently provides service to Downtown Los Angeles. 9 INTERIOR SPACES

10 11 12 EXTERIOR SPACES

13 14 Property Mechanics

Address: 3517 Marathon Street Assessor’s Parcel Number: 5427-020-014 Buildings: One Year Built: 1928 Land Use: Apartments Zoning: LARD2 Stories: Two

SITE DESCRIPTION Units: 10 Gross Square Footage: 6,200 Lot Size Square Footage: 5,196

UTILITIES Electric: Separately Metered - LADWP Gas: Master Metered

CONSTRUCTION Foundation: Raised Foundation Framing: Wood Frame Exterior: Stucco Roof: Flat

15 LOCATION OVERVIEW

16 One of a Kind... SILVER LAKE

Somewhere between the seediness of the strip and the sparkle of West Hollywood you’ll find a thriving metropolis of creative, chilled-out cool. If you want to see a little soul in the City of An- gels, step away from the vegan juice bars of Sunset Boulevard, ride east in an Uber and stop when you see the sign above.

The Junction culminates into the semi-gentried Silverlake neighborhood around Sunset Junction, about six kilometers from Downtown LA. It’s here you’ll find chic gourmet institution L&E Oyster Bar, where you’ll munch on fried oyster po’boys with shaved fennel, lettuce and gribiche and rub shoulders with an- other hundred people dressed in skinny jeans and cardigans. If you take a stroll down Silverlake Boulevard you’ll find some of the best bohemian homewares.

Following this uprising of trendy and eclectic residents is a diverse base of restaurants, bars, nighclubs, and retail shops that bring a wide range of cultural experiences to the area. Within the existing location, residents have the opportunity to walk to nearby restaurants and cafes, take the metro into the heart of Hollywood, or spend the afternoon in an adjacent neighborhood via short com- mute.

LOCATION FUNDAMENTALS URBAN LIVING WITH WALKABILITY Millennials have ditched the suburbs for a more active and dynamic urban As the most densely populated area in Los Angeles, Silver Lake is a highly lifestyle. Many don’t own or want to own cars, so they rely on walking, biking, walkable submarket. Residents can travel on foot to complete their daily Metro or Uber. There is a limited supply of housing in Los Angeles, and errands and stroll to the many restaurants, clubs, chic hotels and restaurants. especially in Silver Lake which is causing upward pressure on rents. Research Score 77 out of 100, The property is located in what walkscore.com considers firm Axiometrics projects rental rates are to increase by 25% over the next five “Very Walkable”. years.

17 Retail Amenities

The subject property is within walking distance of popular destinations and countless other local amenities along Sunset Junction thereby offering residents the per- fect balance of urban activity and quiet neighborhood charm. Highlighted below are notable establishments within walking distance.

THIRSTY COW • The Black Cat Gastropub • Alfred Coffee • Forage Vegan Restaurant • Song Restaurant • Intelligentsia Coffee • Hache LA Restaurant • Baskin Robins • Samosa House • Millie’s Cafe • Ali Mama Cafe • Subway • Seven Sea’s Restaurant • Pop Physique • Diablo Restaurant • Domino’s Pizza • Los Globos

LOS GLOBOS INTELLIGENTSIA

WALK SCORE: 77 “VERY WALKABLE”

TRANSIT SCORE: 59 “GOOD TRANSIT”

BIKE SCORE: 48 “SOMEWHAT BIKABLE”

18 DIABLO PARKECHO

19 POSITIVE DEMOGRAPHICS STRONG RENT GROWTH • High Affordability Gap • Competing with Hollywood Rents • Epicenter of the Creative Class (Evidencing Desirability) • Growth of the Lifestyle Renters • Direct Path of Development Freelance Culture, Live/Work • Strong Community Pushback Prevents Future Competition • Growing Income Levels in the Area • Populated with Small Parcels Limiting Opportunities for Large Projects or Creating Long Timelines for Assemblages

Echo Park has become one of CULTURAL the trendiest neighborhoods in RECREATION • International Museums Los Angeles. The area’s proximity • Griffith Park (The Broad, MoMa) to major employment centers • Echo Park Lake • Small Concert Venues combined with its dining scene, (Recently Renovated) (Echoplex, Bootleg Theatre) • LA River • Greek Theater recreational and cultural amenities, (Major Rejuvenation Underway) • Walt Disney Concert Hall and popular nightlife spots have • Elysian Park made Echo Park an increasingly • Grand Park desirable place to live.

DINING & NIGHTLIFE ACCESSIBILITY • Numerous Bars, Restaurants, and Cafes in Echo Park Such as Mohawk • Adjacent to Many of LA’s Most Vibrant Neighborhoods Including Bend, 1642, Ostrich Farm, and El Prado Silver Lake, Los Feliz, and Atwater Village • Minutes from Silver Lake, Los Feliz, and Downtown LA • Major Employers in Koreatown, Mid-Wilshire, and Downtown (Host to a Plethora of Highly Rated Restaurants and Speakeasies) • Convenient I-5 Freeway Access to Burbank and Glendale and 101 • Dodger Stadium Freeway Access to Hollywood and Universal City • Staples Center

20 Virgil Village

Virgil Village is a major arterial and intermodal thoroughfare with significant amounts of daily bus, car, bicycle and pedestrian traffic. This urban neighborhood is home to numerous small businesses and multi-family residences. Through initial funding, LANI assisted the Virgil Village community in de- veloping a work plan detailing area demographics, assets, need and priorities. Funding to implement a portion of the community determined improvement priorities was secured through the federally funded Transportation Enhancement Act. The streetscape improvements, completed in 2001, in- This men’s clothing boutique inhabits a building off Virgil that used to be a motor scooter cluded decorative pedestrian lights and crosswalks, trees and showroom. Now, they stock a range of new and vintage clothing and an eclectic assortment decorative tree grates, sidewalk repair and bus shelters with of homewares, objects, books and records. Dave says, “I like the stuff that Charlie stocks here. access ramps. It’s smart and fun, and isn’t too serious. For lack of a better way to put it, it’s like ‘California lifestyle’—but very practical. You’re not gonna be that guy that kind of looks the part. They’re outfitting the people who would really walk around in that stuff.” In 2010 LANI secured funding through CALTRANS to conduct a community conceptual planning process. The resulting document now serves as a guide for the design development and construction of physical improvements in Virgil Village. The plan provides a traffic calming component and a streetscape improvement plan with in-depth descriptions of the improvements agreed upon by the community including cost estimates. Priority improvements include: plazas, additional enhanced crosswalks, curb extensions, street trees and new street furniture. The Office of Councilman Mitch O’Farrell, Los Angeles City Council District 13, recently opened the Virgil Village bike lane with much enthusiasm from the neighborhood.

The Los Angeles Chapter of the American Planning Associ- ation recognized the Virgil Village Conceptual Plan with an award for Public Outreach in 2012. Just around the corner from Virgil Normal is Vinny’s Barber Shop. “I go to Vinny’s for a haircut every three weeks. I visit Charlie every time,” Dave says. As the story was told, Omar, the owner, got sick of working for other people and came up with a goal to start a business before he turned 30. It may have seemed ambitious given he was around 29 at the time, but he got to work and made it happen. Since then, Vinny’s has become a hit with the local guys. 21 CENTRALLY LOCATED - SUPER HIGH DENSITY | RAPIDLY EXPANDING RENTAL MARKET TRUE TRANSPORTATION ORIENTED COMMUNITY - NUMEROUS SUBWAY OPTIONS | RICH IN AMENITIES - RESTAURANTS, RETAIL, ENTERTAINMENT

22 FINANCIAL ANALYSIS

23 FINANCIAL SUMMARY 3517 Marathon Street Los Angeles, CA 90026

FINANCIAL INDICATORS SOURCE OF INCOME CURRENT MARKET Price $3,950,000 # of Units Unit Type Avg. Rent Total Avg. Rent Income Down Payment $3,950,000 Down Payment % 100% 8 Large Single‐1 Bath $ 1,757.87 $ 14,063 $ 2,250 $18,000 2 1 Bed ‐ 1 Bath $ 2,140.00 $ 4,280 $ 2,572 $5,144 Current CAP 3.8%

Market CAP 5.2% Total Rental Income $ 18,343 $22,945 Current GRM 17.87 Plus: Market GRM 14.30 Laundry Income Estimate (owned) $ 80 $ 80 Cost Per Unit $395,000 Total Monthly Income $ 18,423 $ 23,025 Total Annual Income $ 221,076 $ 276,300

Cash on Cash Return 3.8% EST. ANNUALIZED OPERATING DATA CURRENT MARKET Expenses Per Unit $6,713 Scheduled Gross Income $ 221,076 $ 276,300 Expenses Per Sq Ft $10.83 Less Vacancy 2.0% $ (4,422) 2.0% $ (5,526) Gross Operating Income $ 216,654 $ 270,774 Less Expenses 31.0% $ (67,135) ‐24% $ (67,135) BUILDING DATA Net Operating Income $ 149,520 $ 203,639

Units 10 Notations: Year Built 1928 Repairs & Maintenance: Repairs and Maintenance is underwritten as a pro forma expense of $450 per unit Lot Sq Ft 5,196 Contract Service: Expenses are projected for Pest Control ($57/mo), Landscaping ($70/mo) based on market rates Bldg Gross Sq Ft 6,200 Utilities: DWP Utilities are actual for 2017. The building is separately metered for Parking 5 Vehicles electricity(owner paid electricty for 3 units until vacated, thereafter tenant shall pay) and master metered for gas. Real Estate Taxes: Taxes have been underwritten at a tax rate of 1.20% ESTIMATED ANNUALIZED EXPENSES Property Insurance: Based on actual 2017 expense New Property Taxes $47,400 Gas Utilities $2,379 Water & Power Utilities $5,131 Property Insurance $3,534 Registration Fees $540 Landscaping $840 Repairs & Maintenance $4,500 Pest Control $600 Reserves / Replacement (1% of SGI) $2,211 Total Estimated Expenses ‐$67,135

24 RENT ROLL

CURRENT MARKET

UNIT STATUS UNIT TYPE RENT MARKET RENT RANGES NOTES

101 Occupied 1 Bed / 1 Bath $2,385 $2,550 to $2,650 Fully Renovated - Treetop, City Views

102 Occupied Large Single-1 Bath $1,775 $2,250 to $2,350 Fully Renovated - Treetop, City Views

103 Occupied Large Single-1 Bath $1,533 $2,200 to $2,350 Treetop Views / Some City Views

104 Occupied Large Single-1 Bath $1,445 $2,250 to $2,350 Treetop Views / Some City Views

105 Occupied Large Single-1 Bath $1,875 $2,250 to $2,350 Fully Renovated - Treetop, City Views

201 Occupied 1 Bed / 1 Bath $1,895 $2,595 to $2,695 Fully Renovated - Dramatic City Views

202 Delivered Vacant Large Single-1 Bath (Furnished) $2,000 $2,200 to $2,395 Fully Renovated - Dramatic City Views

203 Occupied Large Single-1 Bath (Furnished) $2,200 $2,200 to $2,395 Fully Renovated - Dramatic City Views

204 Occupied Large Single-1 Bath $1,790 $2,250 to $2,395 Fully Renovated - Dramatic City Views

205 Occupied Large Single-1 Bath $1,445 $2,200 to $2,395 Dramatic City Views

TOTAL MONTHLY $18,343 $22,945 $24,325

ANNUALLY $220,116 $275,340 $291,900

*Manager-Onsite Manager pays $675 / month (Rent credit of $1,325 per month)

25 RENT COMPARABLES

26 RENT COMPARABLES MAP

3517 Marathon Street

1) 1026-1036 Sanborn Avenue

2) 3016 Waverly Drive

3) 2345 Bancroft Avenue

4) 4018 Monroe Street

5) 3234 Descanso Drive

6) 3622 Ellsworth Sreet

27 RENT COMPARABLES

STUDIO ONE BEDROOM Year Property Units Built Owner / Manager Rent SF Rent/SF Rent SF Rent/SF

1 3517 Marathon Street 10 1928 Private Owner $2,200 - - $2,385 - - Los Angeles, CA 90026 Owner Managed *(All Units Have 1 Bath) 2 1026-1036 Sanborn Avenue 17 1928 1026 1036 Sanborn Ave Llc $2,300 543 $4.23 - - - Los Angeles, CA 90026 Owner Managed

3 3016 Waverly Drive 7400 Sepulveda Investors 45 1973 $2,025 600 $3.37 - - - Los Angeles, CA 90039 Ltd Lp Owner Managed

4 2345 Bancroft Avenue 4 1958 Private Owner - - - $3,000 800 $3.75 Los Angeles, CA 90039 Owner Managed

5 4018 Monroe Street 7 1926 4018 Monroe Partners Llc - - - $2,500 - - Los Angeles, CA 90029 Owner Managed

6 3234 Descanso Drive 13 1928 Private Owner - - - $2,495 800 $3.11 Los Angeles, CA 90026 Owner Managed

7 3622 Ellsworth Sreet 4 1958 Ellsworth St Llc - - - $2,595 850 $3.05 Los Angeles, CA 90029 Owner Managed

AVERAGE: $2.162 571 $3.80 $2,647 816 $3.30 HIGH: $2,300 600 $4.33 $3,000 850 $3.75 LOW: $2025 543 $3.37 $2,495 800 $3.05

28 29 3517 MARATHON STREET

EXCLUSIVELY LISTED BY:

RICH JOHNS Multifamily Investment Advisor 818.432.1575 [email protected] CalBRE Lic. #01432215