6450000 5.76% Cap Rate on Existing Income Near Downtown Los
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| OFFERING MEMORANDUM a Berkshire Hathaway and Jefferies Financial Group company Price Reduced by $350,000 New Asking Price is $6,450,000 5937 Avalon Boulevard Built: 1920 | Price: $6,450,000 LOS ANGELES, CA 90003 5.76% Cap Rate on Existing Income Near Downtown Los Angeles INVESTMENT ADVISORS Brent Sprenkle Senior Managing Director 310.621.8221 [email protected] CA BRE License #01290116 MORTGAGE BANKING Allan Freedman Managing Director 310.209.3243 [email protected] SOUTH BAY OFFICE 2321 Rosecrans Avenue Suite #3235 El Segundo, CA 90245 2 CONTENTS THE ASSET � � � � � � � � � � � � � � � � � � � � � � 4 PLANS � � � � � � � � � � � � � � � � � � � � � � � � 16 FINANCIAL ANALYSIS � � � � � � � � �20 MARKET POSITIONING � � � � � � 24 ECONOMIC AND DEMOGRAPHIC OVERVIEW � � 46 DEMOGRAPHICS � � � � � � � � � � � � �62 MULTIFAMILY REPORT � � � � � � � � � � � � � � � � � � � � � �74 3 THE ASSET PROPERTY HIGHLIGHTS Price Reduced by $350,000. New Asking Price is $6,450,000 Offered at a 5.76% Cap Rate and 10.72 GRM on Current Income with Remaining Upside All Commercial Tenants are Current on Rents Two-Story, Mixed-Use Property-Apartments Over Retail High-Demand Rental Market Near Downtown Los Angeles Located in a Federal Qualified Opportunity Zone Great Cash Flow with Upside of Close to a 7% Cap Rate 6 THE ASSET THE ASSET 7 PROPERTY SUMMARY Units 22 (Plus 5 Retail and 2 Commercial) Year Built 1920 Metering Separate for Gas and Electric Total SF 28,648 ± Commercial /Retail/ 13,000± Industrial SF Parcel Number(s) 6006-032-028 Type of Buildings 1, Two-story, Garden Style Construction Wood-Frame and Stucco PROPERTY DESCRIPTION Price Reduced by $350,000. New Asking Price is $6,450,000. The Avalon is a mixed-use property consisting of 22 apartments and over 13,000 square feet of street front retail and commercial/industrial space� In addition, there is a small parking lot for approximately 13 cars that is leased from the adjacent property that is located off of East 59th Place� The property is located in a federal qualified opportunity zone� Situated on a lot of over 16,000 square feet, the low density 1920’s construction property is the only large mixed-use property in the immediate area� The property is of wood frame and stucco construction� All units and commercial/retail tenants have separate gas and electric meters as well as individual hot water heaters� All of the commercial spaces are leased and all of the tenants in the entire property except for one apartment are current on monthly rent payments� All commercial and retail leases are gross with the tenants only paying rent and utilities� The average retail lease is $2�14 per square feet gross and the industrial spaces are leased at an average of $1�09 per square feet gross� The apartment unit mix consists of 13 units that are studios with one-bathroom and a kitchen, and 9 units are one-bedrooms with one-bathroom� Most units as well as the hallways and common areas have been substantially upgraded� All retail spaces have very high ceilings� The property also contains a massive storage and laundry room� 8 THE ASSET THE ASSET 9 LOCATION DESCRIPTION - DOWNTOWN LOS ANGELES Downtown - Downtown Los Angeles (DTLA) is the city’s central business district featuring a wide spectrum of companies with highly skilled workers, cultural activities, and is surrounded by popular neighborhood destinations such as Silverlake, Echo Park, and Koreatown� Downtown also serves as a hub for the Metro rapid transit system, and is known for its government buildings, parks, theaters, and public spaces� Like many cities, DTLA is continually undergoing revitalization efforts with developers investing billions of dollars into the area� The area is currently home to thousands of residents and over 1,000 new stores, restaurants, and companies� As the region’s economic engine, DTLA’s population has tripled since 1999 and is expected to double again over the next decade� The 2018 Survey by the Downtown Center Business Improvement District states “a growing population of residents, workers, and visitors - enthusiastically embracing the culture, community, and convenience that are defining Downtown Los Angeles as one of the most dynamic city centers of the 21st Century�” Some of the most popular venues and attractions in DTLA include the Staples Center, Exposition Park, The Music Center, The Broad, Downtown LA ArtWalk, LA Convention Center, MOCA Los Angeles, Walt Disney Hall, and L�A� Live sports and entertainment district� 10 THE ASSET LOCATION DESCRIPTION NEIGHBORHOOD SHOPPING DEMAND DRIVER LOS ANGELES, CA FROM THE FROM THE 5.8mi PROPERTY 4.1mi PROPERTY 5937 AVALON BLVD NEIGHBORHOOD QUICK FACTS SF SHOPPING JOBS 850k DESTINATION 1.7k SUPPORTED TOTAL HOSPITAL 95 STORES 318 BEDS 494.4k Macy’s | TJ Maxx | Albertsons | Cinemark Dignity Health - California Hospital Medical Center Population (Within Three Miles) NEIGHBORHOOD CONVENIENCES DEMAND DRIVER 64% FROM THE PROPERTY Renter Occupied Housing Units 4.5mi (Within Three Miles) JOBS 28.9k SUPPORTED $ STUDENTS 521.8k 48.5k ENROLLED Median Housing Unit Value Within a three-mile radius of the property University of Southern California (Within Three Miles) $ 35.7k PRIMARY EDUCATION DEMAND DRIVER Median Household Income STUDENTS FROM THE (Within Three Miles) 674k SERVED 4.7mi PROPERTY SCHOOLS JOBS 1.4k AND CENTERS 25.0k SUPPORTED 4.0% SF OF City Unemployment Rate JOBS COMMERCIAL SUPPORTED SPACE (December 2019) 66.5k 5.6m Aspire Slauson Academy | Los Angeles Academy MS Diego Rivera Learning Complex L.A. LIVE THE ASSET 11 LOCATION MAP 12 THE ASSET LOCATION MAP THE ASSET 13 BOUNDARY AERIAL 14 THE ASSET THE ASSET 15 PLANS FIRST FLOOR PLAN DATE 5 6 4 NO. 5937 S Avalon Blvd, DATE Los Angeles, - 1 2 3 NO. I I V S S O R N CA 90003 E SUBMITTAL DATES: OWNER: PLAN CHECK: O.T.B. VICINITY MAP 5937 S AVALON BLVD., LOS ANGELES CA, 90003 OWNER AND PROJECT ADDRESS: OHEB RAIMAN PROJECT SITE PROJECT DATA LEGAL DESCRIPTION: LOT 1, 2 & 3 OF TRACT TR 3563 AS PER MAP REFERENCE M B 38 - 32 MAP SHEET 105B205, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN:6006-032-028 TITLE SHEET AND FIRST FLOOR PLAN ZONE: CM-1 OCCUPANCY GROUP: R3 TYPE OF CONSTRUCTION (HOUSE &GARAGE): V - B NUMBER OF STORIES: EXISTING 2, SHEET TITLE: DESIGNER: 22506 CRISWELL STREET WEST HILLS, CA 91307 HP: 818 912 9915 Email: [email protected] SHAHRAM GHANE PROJECT INFORMATION DESIGNER: SHAHRAM GHANE 22506 CRISWELL STREET WEST HILLS, CA, 91307 CELL: 818-912-9915 EMAIL: [email protected] JOB NO: 18.501 DATE: 08/24/2018 DRAWN BY: M.S. SHEET INDEX APPROVED BY: S.G. ARCHITECTURE: SHEET NO: A-0 TITLE SHEET, 1ST FLOOR A-1 2ND FLOOR N A-0 18 Plans SECOND FLOOR PLAN FLOOR SECOND N P lans APPROVED BY: DRAWN BY: DATE: JOB NO: SHEET TITLE: SUBMITTAL DATES: 2ND FLOOR PLAN R 1 - 4 A-1 E SHEET NO: DESIGNER: OWNER AND PROJECT ADDRESS: OWNER: V I 2 5 08/24/2018 SHAHRAM GHANE S PLAN CHECK: I S.G. M.S. 18.501 OHEB RAIMAN 22506 CRISWELL STREET O 19 5937 S AVALON BLVD., 3 6 WEST HILLS, CA 91307 N LOS ANGELES CA, 90003 O.T.B. S HP: 818 912 9915 Email: [email protected] NO. DATE NO. DATE FINANCIAL ANALYSIS FINANCIAL ANALYSIS - RENT ROLL Rent Roll Estimated Current Current Projected Projected Unit # Unit Description Status Terms Parking Unit SF Rate Rent Per SF Market Rate Rent Per SF 1 Studio, One Bath 371 $851.60 $2.30 $1,250.00 $3.37 2 Studio, One Bath 396 $1,150.00 $2.90 $1,250.00 $3.16 3 Studio, One Bath 396 $1,100.00 $2.78 $1,250.00 $3.16 4 Studio, One Bath 405 $749.84 $1.85 $1,250.00 $3.09 5 One Bedroom, One Bath 519 $1,110.52 $2.14 $1,475.00 $2.84 6 One Bedroom, One Bath 490 $1,350.00 $2.76 $1,475.00 $3.01 7 Studio, One Bath 361 $1,150.00 $3.19 $1,250.00 $3.46 8 Studio, One Bath 375 $1,150.00 $3.07 $1,250.00 $3.33 9 Studio, One Bath 361 $1,150.00 $3.19 $1,250.00 $3.46 10 One Bedroom, One Bath 490 $1,350.00 $2.76 $1,475.00 $3.01 11 One Bedroom, One Bath 519 $1,178.32 $2.27 $1,475.00 $2.84 12 One Bedroom, One Bath 519 $1,350.00 $2.60 $1,475.00 $2.84 13 One Bedroom, One Bath 490 $1,124.76 $2.30 $1,475.00 $3.01 14 Studio, One Bath 361 $1,150.00 $3.19 $1,250.00 $3.46 15 Studio, One Bath 361 $958.72 $2.66 $1,250.00 $3.46 16 One Bedroom, One Bath 490 $1,182.32 $2.41 $1,475.00 $3.01 17 One Bedroom, One Bath 519 $1,333.64 $2.57 $1,475.00 $2.84 18 Studio, One Bath 405 $1,200.00 $2.96 $1,250.00 $3.09 Vacant 19 Studio, One Bath 396 $1,150.00 $2.90 $1,250.00 $3.16 20 Studio, One Bath 396 $1,150.00 $2.90 $1,250.00 $3.16 21 Studio, One Bath 371 $830.18 $2.24 $1,250.00 $3.37 22 One Bedroom, One Bath 502 $1,350.00 $2.69 $1,475.00 $2.94 Vacant 5939 Retail 2,288 $3,000.00 $1.31 $4,004.00 $1.75 Gross 12/18/2020 5941/5943 Retail 2,990 $6,500.00 $2.17 $7,475.00 $2.50 Market Gross 1/1/2020 5945 Retail 702 $1,950.00 $2.78 $2,106.00 $3.00 Beauty Gross 7/1/2002 5957& 519 Retail 3,087 $7,900.00 $2.56 $8,489.25 $2.75 Restaurant Gross 10/1/2010 515 Retail 450 $1,000.00 $2.22 $1,575.00 $3.50 Clothing Gross 4/1/2019 5945 Commercial 1,901 $1,895.00 $1.00 $2,376.25 $1.25 Industrial Gross 10/1/2019 5951 Commercial 2,011 $2,362.00 $1.17 $2,513.75 $1.25 Industrial Gross 1/1/2019 Estimated Current Rent Range Projected Percent Number Number of Percentage Unit Description SF Rate Per SF Market Rate Vacant Vacant Units of Total Totals: Studio, One Bath 4,955.00 $13,740.34 $1.85 - $3.19 $16,250.00 7.69% 1 13 44.83% One Bedroom, One Bath 4,538.00 $11,329.56 $2.14 - $2.76 $13,275.00 11.11% 1 9 31.03% Retail 9,517.00 $20,350.00 $1.31 - $2.78 $23,649.25 5 17.24% Commercial 3,912.00 $4,257.00 $1.00 - $1.17 $4,890.00 2 6.90% 22,922 $49,676.90 $58,064.25 6.90% 2 29 Current Projected Projected % Estimated Rental Unit Description Estimated SF Current Rate Rent Per SF Market Rate Rent Per SF Upside Range Averages: Studio, One Bath 381.15 $1,056.95 $2.77 $1,250.00 $3.28 18.26% $750 - $1,200 One Bedroom, One Bath 504.22 $1,258.84 $2.50 $1,475.00 $2.93 17.17% $1,111 - $1,350 Retail 1,903.40 $4,070.00 $2.14 $4,729.85 $2.48 16.21% $1,000 - $7,900 Commercial 1,956.00 $2,128.50 $1.09 $2,445.00 $1.25 14.87% $1,895 - $2,362 IMPORTANT INFORMATION & DISCLAIMER: The information contained herein is assumed to be correct and market-supported.