CITIBANK in LA's SOUTH
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PRIME ABSOLUTE NET LEASED INVESTMENT OPPORTUNITY CITIBANK IN LA’s SOUTH BAY 1275 W. REDONDO BEACH BLVD | GARDENA, CA www.BankinSouthBay.com to sign agreement (top right corner) for Full OM/ Financials 1 www.Bankin- SouthBay.com to sign agreement (top right corner) for Full OM/ Finan- cials The information provided in this Offering Memorandum and information that may be provided with respect to the Property was obtained from a variety of sources. NEITHER SELLER NOR BROKERS HAS MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF THE INFORMATION PRESENTED OR TO BE PRESENTED WITH RESPECT TO THE PROPERTY. SELLER AND BROKERS MAKE NO REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY OR COMPLETENESS OF ANY INFORMATION THAT MAY BE PROVIDED REGARDING THE PROPERTY. The Seller reserves the right to withdraw the Property being marketed at any time without notice, to reject all offers, and to accept any offer without regard to the relative price and terms of any other offer. Any offer to buy must be presented in the form of a non- binding letter of intent. Neither the prospective buyer nor Seller shall be bound until execution of the contract of purchase and sale, which contract shall supersede prior discussions and writings and, except for the Confidentiality Agreement, shall constitute the sole agreement of the parties. Prospective buyers shall be responsible for their costs and expenses of investigating the Property and all 2 other expenses, professional or otherwise, incurred by them. Executive Summary We are pleased to offer qualified investors an opportunity to purchase a premium single-tenant absolute NNN leased asset with a corporate guarantee from Citibank (NYSE: C, S&P: A+ Investment Grade). Ownership is fee simple with ± 14,042 SF of improvements and ± 1.03 acres of land. The bank holds $111,000,000 of deposits. Zero Landlord Responsibilities. The property is located on the northeast corner of W. Redondo Beach Boulevard and S. Raymond Avenue, within a burgeoning retail corridor with a daily traffic count of over 50,000 vehicles. It is a two-story office building sitting on an acre of two-parcels, across the street from the Gardena Valley Shopping Center, which is anchored by Vons and near numerous credit tenants. It is one block away from both Memorial Hospital of Gardena & Kindred Hospital South Bay, and within one mile of over 125 medical offices. With over 5 parking spaces per 1,000 square feet, this property is also a viable future medical conversion. This is a unique opportunity to own a highly visible retail location on a signalized corner within one of the strongest submarkets in Southern California. FOR MORE INFORMATION: www.BankInSouthBay.com *Significant upside achieved when rents are increased at option in 2029. Offering Summary Price $5,900,000 Price PSF Building $420.16 Price PSF Land $131.44 In-Place Cap Rate (as of 1/1/2019) 4.1% In-Place NOI (as of 1/1/2019) $242,000 Years Remaining (as of 1/1/2019) 5 Monthly Rent PSF (as of 1/1/2019) $1.44 NNN* *Neighboring banks are paying $3-$9 NNN PSF monthly 3 Specifications Address 1275 W. Redondo Beach Blvd., Gardena, CA 90247 Building Size ± 14,042 SF Site Area ± 1.03 Acres (± 48,886 SF) APNs 6114-011-002, 6114-011-020 Year Built 1960 Parking 78 Surface Spaces are available; Ratio of 5.55/1,000 SF Submarket Gardena/Hawthorne/South Bay Submarkets 4 Investment Highlights • Current rent of $1.44 NNN per square foot is significantly less than other bank properties in the market. Tremendous upside achieved when rents are increased at second option in 2029. • Tenant: Citibank, N.A. (NYSE: C, S&P A+ Investment Grade) • Prime retail location on signalized corner - excellent visibility with traffic counts of over 50,000 vehicles per day • Adjacent to Chase, Wells Fargo, Bank of America, Vons, Walgreens, Rite Aid and several other national credit tenants • Property has 78 parking spaces, with a ratio of 5.55 spaces per 1,000 square feet of building (viable future medical conversion) • Walking distance from Memorial Hospital of Gardena, Kindred Hospital South Bay and over 125 medical offices (1-mile from Kaiser Permanente Gardena) • Located a short drive from Spacex’s campus and new creative offices (Amazon’s subsidiary, Ring, will soon relocate 250 employees from Santa Monica to Hawthorne) • South Bay is a strong employment hub for aerospace, port, oil and motor industries • Located between the 110 and 405 freeways along Redondo Beach Boulevard, a highly trafficked infill corridor • Los Angeles retail vacancies remain near their cyclical low of 4% despite widespread store closures of big-box retailers • Zero landlord duties or expense • True Triple Net Passive Income Stream, as Citibank directly pays all of the maintenance, insurance, utilities and taxes THE PROPERTY IS WITHIN 1 MILE OF 275 28 128 7 55 COFFEE & BANKS & MEDICAL HEALTH & SHOPPING RESTAURANTS CREDIT UNIONS PROFESSIONALS FITNESS CLUBS CENTERS 5 Tenant Summary Citigroup Inc. or Citi (stylized as citi) is an American multinational investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking giant Citicorp and financial conglomerate Travelers Group in 1998; Travelers was subsequently spun off from the company in 2002. Citigroup owns Citicorp, the holding company for Citibank, as well as several international subsidiaries. Citigroup is ranked 3rd on the list of largest banks in the United States and, alongside JPMorgan Chase, Bank of America, and Wells Fargo; it is one of the Big Four banks of the United States. Citigroup is ranked 30th on the Fortune 500 as of 2019. Citigroup has over 200 million customer accounts and does business in more than 160 countries. Type: Public Company Stock price: C (NYSE) 52 Week Range $48.42 - $75.24; Market Cap: $155.213B Industry: Financial Services Headquarters: New York City, NY CEO: Michael Corbat (Oct 16, 2012–) Founded: June 16, 1812; 206 years ago (as City Bank of New York) Number of locations: 4,600 branches Number of employees: 204,000 (2018) Total assets: $1.917 trillion USD (2018) Revenue: $72.854 billion USD (2018) www.citigroup.com/citi/ 6 Land Survey 7 8 9 10 11 12 13 14 Gardena (South Bay) Gardena is a city located in the South Bay (southwestern) region of Los Angeles County, California, United States. The population was 58,829 at the 2010 census, up from 57,746 at the 2000 census. Until 2014, the US census cited the City of Gardena as the place with the highest percentage of Japanese Americans in California. Gardena has a large Japanese population, helping make the South Bay region of Los Angeles home to the largest concentration of Japanese companies within the mainland United States. The name “South Bay” stems from its geographic location stretching along the southern shore of Santa Monica Bay. The South Bay contains fifteen cities plus portions of the City of Los Angeles and unincorporated portions of the county. The area is bounded by the Pacific Ocean on the south and west and generally by the City of Los Angeles on the north and east. 15 GARDENA South Bay Market Overview DEMOGRAPHICS Port of Los Angeles · The Port of Los Angeles, sprawling across the shorelines of San Pedro and Wilmington, is the busiest in the United States. · When combined with the Port of Long Beach, it is the fifth-busiest in the world. · It is increasingly the primary driver of the Southern California economy: industrial growth in the Inland Empire is almost entirely attributable to increased port traffic since the 1980s. Aerospace 60,224 POPULATION · The South Bay is the traditional home of Southern California’s aerospace industry. · It represents a major economic force, employing thousands in high-skill, high-wage engineering positions and generating enormous amounts of tax revenue. · Northrop Grumman has a major facility in El Segundo, as well as the headquarters of the Space Technology division in Redondo Beach and a facility at the Hawthorne Municipal Airport. · Alcoa Fastening Systems, which produces aerospace fasteners, has their corporate headquarters located in Torrance with manufacturing facilities in both Torrance and Carson. · Boeing and Lockheed Martin also maintain extensive production facilities throughout the South Bay, and Raytheon’s Space and Airborne Systems business unit is based in El Segundo. · SpaceX also headquartered in the South Bay, is located in Hawthorne. 21,472 HOUSEHOLDS Oil Refining · Petroleum refining is another important component of the South Bay’s economy. · Major South Bay refiners include Tesoro (ARCO facility in Carson), Chevron (El Segundo), Phillips 66 (Wilmington), PBF Energy (Torrance), Tesoro (Wilmington), and Valero (Wilmington). · These refiners supply the lion’s share of petroleum products for Southern California, as well as for Nevada and Arizona. · As the Los Angeles region’s oil fields are mostly exhausted, most of the crude oil that feeds the refineries is brought in from terminals at the port. Automotive · Japanese automobile manufacturer Honda maintains its North American headquarters in the South Bay, in the city of 36.5 Torrance MEDIAN AGE · Tesla is stationed near the headquarters of SpaceX in Hawthorne 16 Los Angeles County • Los Angeles County is one of the most dynamic economies in the world, with a fast-growing and immense high-tech industry, world leading creative economy, tremendous strength in aerospace and advanced transportation, the nation’s largest manufacturing base, the nation’s largest international trade industry, and a rapidly increasing amount of venture capital investment in startups. • Los Angeles County is enviable by any measure. We have a population larger than most countries, allowing a richness of diversity that is second to none. L.A.’s sheer size provides numerous advantages such as large manufacturing centers, a massive retail base for goods consumption, and leadership in a number of industry sectors.