2100 E. 4TH STREET SANTA ANA
FOR SALE | SINGLE TENANT
OFFERING MEMORANDUM Newmark and Lee & Associates (the “Agents”) has been engaged as the exclusive sales representatives for the sale of 2100 E. 4th Street, Santa Ana, CA 92705 (the ”Property”) by 2100 E 4th St 92705 LLC (the “Seller”). This Memorandum does not constitute a representation that the business or affairs of the Property or Seller since the date of preparation (January 29, 2020) of this Memorandum have remained the same. Analysis and verification of the information contained in this Memorandum are solely the responsibility of the prospective purchaser. Additional information and an opportunity to inspect the Property will be made available upon written request of interested and qualified prospective purchasers. Seller and Agents each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the Property, and/or terminate discussions with any party at any time with or without notice. Seller reserves the right to change the timing and procedures for the Offering process at any time in Seller’s sole discretion. Seller shall have no legal commitment or obligations to any party reviewing this Memorandum, or making an offer to purchase the Property, unless and until such offer is approved by Seller, and a written agreement for the purchase of the Property has been fully executed and delivered by Seller and the Purchaser thereunder.
This Memorandum and the contents, except such information which is a matter of public record or is provided in sources available to the public, are of a confidential nature. By accepting this Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not forward, photocopy or duplicate it, that you will not disclose this Memorandum or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Seller or Agent, and that you will not use this Memorandum or any of the contents in any fashion or manner detrimental to the interest of Seller or Agent.
2100 E. 4TH STREET SANTA ANA TABLE OF CONTENTS 01 EXECUTIVE SUMMARY 02 PROPERTY INFORMATION 03 TENANT OVERVIEW 04 AREA OVERVIEW 05 MARKET OVERVIEW
01 EXECUTIVE SUMMARY THE OFFERING Newmark and Lee & Associates, together as exclusive advisors, are pleased to present this opportunity to acquire 2100 E. 4th Street, Santa Ana, CA 92705 (the Property).
This two-story building is located in the Park Center Submarket of Orange County and is currently 100% leased to the Consulate of The United Mexican States, one of the busiest locations for the Mexican Consulate. Built in 1975, the Property is situated on 1 parcel totaling ±1.27 acres and is located directly between the 5 and 55 Freeways, within an area that many multifamily developers have identified for their next development grounds.
6 2100 E. 4TH STREET PROPERTY SUMMARY OFFERING SUMMARY 24,131 SF $5,310,000 Total Building Area Price
1975 5.16% Year Built Cap
1.27 Land Acres
400-091-01 APN
101 Free Surface Parking Stalls
4/1,000 Overall Parking Ratio MONTHLY YEARLY EST. CAP TENANT RENT ROLL SF TERM RENT RENT NOI RATE Consulate of The United 100% Mexican States 24,131 5/1/19 4/30/20 $32,336 $388,026 $258,827 Leased by Secure Government Tenant 3% Annual Increases 5/1/20 4/30/21 $33,306 $399,667 $265,548
No Options to Extend 5/1/21 4/30/22 $34,305 $411,657 $274,185 5.16%
5/1/22 4/30/23 $35,334 $424,007 $283,098 5.33%
5/1/23 4/30/24 $36,394 $436,727 $292,296 5.50%
TOTALS: $171,675 $2,060,084 $1,373,954
2100 E. 4TH STREET 7
02 PROPERTY INFORMATION FLOOR PLAN FIRST FLOOR
10 2100 E. 4TH STREET FLOOR PLAN SECOND FLOOR
2100 E. 4TH STREET 11 PLAT MAP
12 2100 E. 4TH STREET 2100 E. 4TH STREET 13
03 TENANT OVERVIEW T
TENANT OVERVIEW
PREMISES & TERM
Consulate of The United Tenant ABOUT THE CONSULATE OF MEXICO Mexican States
The Consulate of Mexico in Santa Ana Use Foreign Consulate and Office provides Mexican citizens with the following services: Lease May 1, 2019 • Process Passport Applications Commencement
• Process Visa Applications Lease Expiration April 30, 2024 • Notarize Certain Documents 5 Years • Legalize Certain Documents Term (2nd Term) • Registration of Marriage, Birth and Death
• Authentication of Documents Diplomatic Clause: The Parties agree that if at any • Additional Legal Advice time the United Mexican States withdraws or closes This location is one of approximately 50 in or is forced to withdraw or close its representation in the United States and is reported to be the Orange County, California, Lessee shall have the right busiest of them and has Consular Jurisdiction to terminate this Lease, without any liability other than in all of Orange County cities. Lessee shall pay any unamortized improvement and commission expenses to Lessor at the time of lease termination, by giving no less than two (2) months' prior written notice. Upon the expiration date of such notice, and Lessor's receipt of payment from Lessee for any unamortized improvement and commission expenses, this Lease and everything contained therein shall automatically terminate, and both any prepaid rent for the unexpired portion of the term and the security deposit, shall be refunded to Lessee.
16 2100 E. 4TH STREET EXPENSES
Property Taxes Landlord Responsibility
Insurance Landlord Responsibility
Utilities Landlord Responsibility
Repairs & Landlord Responsibility Maintenance
After-Hours HVAC Tenant Responsibility
Janitorial Tenant Responsibility
Landlord is responsible for all Capital Expenditures; however, Landlord may terminate the Lease in the final two (2) years if the Landlord determines the costs associated are not economically feasible to pay its share thereof. Landlord shall provide a 90-day written notice and Tenant shall have ten (10) days to determine if they want to pay for such Capital Expenditures.
2100 E. 4TH STREET 17 18 2100 E. 4TH STREET INCOME & EXPENSES
PRICE $5,310,000
Capitalization Rate 5.13%
Total Rentable Area (SF) 24,131
Total Land Acres 1.27
STABILIZED INCOME
Scheduled Rent $411,657
OPERATING EXPENSES
Taxes $63,720
Utilities $53,850
Repairs & Maintenance $8,284
Insurance $5,224
Professional Fees $2,521
License & Permits $520
Total Operating Expenses: $134,119
NET OPERATING INCOME $274,185
2100 E. 4TH STREET 19
04 AREA OVERVIEW CITY OF SANTA ANA | DEMOGRAPHICS
1-MILE 3-MILE 5-MILE 2019 RADIUS RADIUS RADIUS Population 68,666 360,322 709,468 2ND LARGEST 10 MILES 7 MILES Households 14,376 82,306 187,040 CITY IN ORANGE FROM THE TO JOHN WAYNE COUNTY COAST AIRPORT Families 11,741 65,225 141,754 Avg. Household Size 4.54 4.26 3.71 Owner Occupied Housing 3,280 33,798 85,847 Renter Occupied Housing 11,096 48,507 101,193 Median Age 27.7 30.5 32.8 Median Household Income $42,792 $59,072 $68,704 Avg. Household Income $58,995 $76,700 $90,249
Source: esri
22 2100 E. 4TH STREET SANTA ANA The city of Santa Ana in Orange County is a beautiful city located in Southern California, adjacent to the Santa Ana River and about 10 miles from the coast. It's home to the Santa Ana Civic Center, Ronald Reagan Federal Building and Courthouse, Santa Ana Zoo, Bowers Museum, Discovery Cube Orange County, and The Heritage Museum. The city itself is very densely populated, with the downtown area being the main arts and entertainment hub. There are a lot of restaurants, coffee shops, and parks. The public schools are above average. Several historic homes dating from the late 1800's can be found as well, and their preservation is a key issue as development of the downtown area continues.
ORANGE COUNTY Orange County is located in the Los Angeles metropolitan area and is the third-most populous county in California. The county has 34 incorporated cities. Older cities like Santa Ana have traditional downtowns dating back to the 19th century, while newer commercial development or "edge cities" stretch along I-5 between Disneyland and Santa Ana and between South Coast Plaza and the Irvine Business Complex, and cluster at Irvine Spectrum. The county is a tourist center, with attractions like Disneyland, Knott's Berry Farm and several popular beaches along its more than 40 miles of coastline.
2100 E. 4TH STREET 23 OC STREETCAR TRANSPORTATION
24 2100 E. 4TH STREET 2100 E. 4TH STREET 25 GRAND AVENUE
E. 4TH STREET
DOWNTOWN SANTA ANA
26 2100 E. 4TH STREET OC GLOBAL MEDICAL CENTER 282-BEDS 27 SQ. MILES FUTURE CITIZENS SANTA ANA
MULTI-HOUSING BUSINESS BANK N. TUSTIN AVENUE TUSTIN N.
2100 ST. JOSEPH E. 4TH HERITAGE KAISER STREET PERMANENTE MEDICAL E. 4TH STREET E. 4TH STREET
FUTURE MULTI-HOUSING
SOCIAL SECURITY NINTEEN01 LUXURY APARTMENT ADMINISTRATION COMMUNITY E. 1ST STREET
DRUG ENFORCEMENT ADMINISTRATION SANTA ANA ZOO
E. MAIN STREET W. MAIN STREET
2100 E. 4TH STREET 27
05 MARKET OVERVIEW ORANGE COUNTY OFFICE MARKET (4Q 2019)
TECH TENANTS EXPAND, RECORD HIGH RENTS CLOSE THE YEAR ORANGE COUNTY’S EVOLVING OFFICE LANDSCAPE • Vacancy remained unchanged from three months ago, a result of flat Active space requirements set a new tone in 2019 for a market historically absorption. driven by financial services and mortgage-related firms. Traditional office • The largest office lease of the past two years took place this quarter occupiers continue to show strong demand, but Orange County’s dynamic when Alteryx, a computer software company, committed to 183,000 live-work-play environment and accessibility to a highly skilled labor pool square feet at Spectrum Terrace. have attracted newer entrants, namely tech companies. Technology space requirements currently comprise 15.1% of overall office demand in the • The Irvine Company is accelerating construction of Spectrum Terrace’s metro, with roughly 1.2 million square feet. second phase to meet high demand. The first phase, delivered in August of this year, is fully leased. Venture capital is increasingly active, with Irvine alone amassing $1.4 billion since the start of the year, a 33.0% increase from the same period last year. • Nearly 1.1 million square feet of speculative construction is underway The flow of available capital serves as a significant driver in the creation in the metro across three developments. Vacancy will likely increase as of new businesses by allowing firms, especially in technology-related new product delivers and is progressively leased. industries, to launch, incubate and grow. In the past 12 months, Alteryx • Asking rents are at an all-time high, pushed by new construction. (183,000 square feet), Anduril Industries (107,000 square feet), Acorns (90,900 square feet) and Kajabi (44,00 square feet) have either expanded • Tech, coworking and healthcare firms led leasing activity this year. or secured a foothold in the market. • WeWork continues to grow its Orange County footprint despite The metro’s local economy has undoubtedly benefitted from the increased troubles within the company. The shared space occupier contributed diversification of office tenants, with technology and startup firms at the to more than 100,000 square feet of absorption gains this quarter and forefront of Orange County’s transformation. has an additional 262,000 square feet of leases in the pipeline.
Asking Rent and Vacancy Net Absorption (SF, Thousands)
$3.00 24% 1,800
20% 1,200 $2.60 16% 600 12% $2.20 0 8% -600 $1.80 4% 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 4Q16 4Q17 4Q18 4Q19 -1,200 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 4Q16 4Q17 4Q18 4Q19 Average Asking Rent (Price/SF) Vacancy (%)
30 2100 E. 4TH STREET EMPLOYMENT OUTLOOK October’s 2.5% unemployment rate marks the third consecutive year Orange County’s strong demographic and economic fundamentals Orange County’s unemployment remained below 4.0%. Local job creation have contributed to its long-term strength and stability. The increased remains modest with 1.1% annual growth, primarily in the leisure and diversification of tenants will favor the local office market and help hedge hospitality sectors. With record low unemployment, the competition for the metro against a potential economic downturn. top talent is fierce, prompting companies to use trophy real estate and Healthy market fundamentals will likely carry over to next year, as new amenities to attract and retain employees. New construction remains supply delivers and commands top rents. The increased availability of desirable. next-generation space will benefit the market as Orange County expands Orange County continues to outperform both the California and national its tech hub presence and attracts top talent. Shared space occupiers will averages, but near-term growth will likely remain sluggish amid economic favor absorption gains early next year, although landlords are keeping a uncertainty on the horizon. close eye on their coworking tenants, as many of their models have not yet been stress tested in a downturn.
Construction and Deliveries (SF, Thousands)
2,500 2,000 1,500 1,000 500 0 4Q14 4Q15 4Q16 4Q17 4Q18 4Q19 Under Construction Deliveries
2100 E. 4TH STREET 31 ORANGE COUNTY OFFICE MARKET (4Q 2019)
MARKETMarket Summary SUMMARY Current Prior Year Ago 12 Month Quarter Quarter Period Forecast Total Inventory 96.0 MSF 95.8 MSF 94.7 MSF
Vacancy Rate 12.3% 12.3% 12.5% Quarterly Net Absorption 63,150 176,307 65,123 EMPLOYMENTEmployment by BY Industry INDUSTRY
Average Asking Rent $2.80 $2.72 $2.69 Not Seasonally Adjusted 1,053,725 450,824 1,211,467 Under Construction Anaheim-Santa Ana-Irvine, October 2019
Deliveries 0 348,783 0 1.6% 3.0% Mining/Logging Information 6.8% 19.8% Other Services 7.4% Cons tru ction Financial Activities 10.0% Payroll Employment Government PAYROLL EMPLOYMENT 16.0% Manufacturing Total Nonfarm, Not Seasonally Adjusted, 12-Month % Change 9.7% Education/Health Leisure/Hospitality 14.1% 14.0% Trade/Transportation/Utilities 5% Prof & Bus Services 4% Source: U.S. Bureau of Labor Statistics
3%
2%
1%
0% Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19 United States Anaheim-Santa Ana-Irvine
Source: U.S. Bureau of Labor Statistics
32 2100 E. 4TH STREET LEASELease TRANSACTIONSTransactions Tenant Building Market Area Type Square Feet
Biosence Webster 27 Technology Dr South County New Lease 46,400 Westcliff 17877 Von Karman Ave Airport New Lease 34,840 JLL 17877 Von Karman Ave Airport New Lease 34,248 Department of Education 601 S Lewis St Central County New Lease 33,483 Mobile Medical Examination 1231 E Dyer Rd Airport New Lease 32,467
SALESale TRANSACTIONSTransactions Building(s) Market Area Sale Price Price/SF Square Feet
2211 Michelson Dr Airport $116,000,000 $427 271,556 28202 Cabot Rd South County $46,950,000 $268 175,438 14101 Myford Rd Airport $36,200,000 $542 66,818 222 S Harbor Blvd North County $32,750,000 $168 194,892 200 W Santa Ana Blvd Central County $29,500,000 $185 159,499
2100 E. 4TH STREET 33 ORANGE COUNTY OFFICE MARKET (4Q 2019)
SUBMARKETSubmarket STATISTICS Statistics
Total Under Total Qtr YTD Class A Class B Total Inventory Construction Vacancy Absorption Absorption Asking Rent Asking Rent Asking Rent (SF) (SF) Rate (SF) (SF) (Price/SF) (Price/SF) (Price/SF)
Airport 41,948,353 380,856 12.3% 233,131 1,020,814 $3.32 $2.73 $3.11
Costa Mesa 5,711,727 380,856 12.9% -26,623 141,828 $3.43 $2.61 $3.27
Irvine 22,633,436 0 12.7% 179,580 891,354 $3.33 $2.79 $3.15
Newport Beach 8,775,233 0 7.8% 94,390 160,715 $3.34 $3.18 $3.28
Santa Ana (Airport Area) 4,827,957 0 18.1% -14,216 -173,083 $2.91 $2.43 $2.53
Central County 16,914,643 0 14.6% -27,330 92,612 $2.59 $2.28 $2.36
Anaheim (Stadium Area) 3,588,828 0 12.0% 62,520 -6,296 $2.88 $2.21 $2.47
Orange 6,198,700 0 13.4% -18,858 -78,977 $2.44 $2.59 $2.46
Santa Ana 5,290,249 0 12.6% -29,392 61,095 $2.66 $2.02 $2.10
Tustin 1,836,866 0 29.2% -41,600 116,790 $2.62 $2.30 $2.31
North County 7,120,046 0 7.5% -1,935 47,057 $2.30 $2.15 $2.16
Anaheim (Anaheim Hills) 1,403,737 0 9.1% 17,872 4,248 $2.05 $2.07 $2.07
Brea 3,841,055 0 7.2% -28,944 4,670 $2.39 $2.27 $2.29
Fullerton 992,524 0 7.8% 3,885 26,430 - $2.16 $2.07
La Habra 313,469 0 1.4% 6,838 4,230 - $1.28 $1.28
Placentia 239,347 0 14.5% -3,273 -452 - $1.70 $1.76
Yorba Linda 329,914 0 3.7% 1,687 7,931 - $1.89 $1.89
34 2100 E. 4TH STREET SUBMARKETSubmarket STATISTICS Statistics
Total Under Total Qtr YTD Class A Class B Total Inventory Construction Vacancy Absorption Absorption Asking Rent Asking Rent Asking Rent (SF) (SF) Rate (SF) (SF) (Price/SF) (Price/SF) (Price/SF)
South County* 22,618,991 672,869 12.9% -74,315 -176,441 $3.46 $2.76 $3.02
Aliso Viejo 2,275,940 0 27.6% -73,947 -139,778 $3.38 $2.98 $3.11
Dana Point 210,660 0 0.6% 0 -1,280 - - -
Foothill Ranch 705,061 0 12.9% -6,493 -34,074 $2.70 $2.51 $2.59
Irvine Spectrum 11,867,654 672,869 14.2% 53,715 -30,061 $3.65 $2.83 $3.20
Laguna Beach 90,845 0 3.2% -1,390 -861 - - $3.70
Laguna Hills 1,454,808 0 9.3% 2,095 -8,755 $3.10 $2.91 $2.92
Laguna Niguel 648,723 0 5.7% -2,971 25,679 $3.05 $2.42 $2.90
Lake Forest 2,273,265 0 7.8% -66,227 -32,219 $2.10 $2.23 $2.20
Mission Viejo 1,513,882 0 7.9% 2,443 42 $2.49 $2.19 $2.29
Rancho Santa Margarita 293,615 0 5.1% 1,519 -6,033 - $2.19 $2.19
San Clemente 365,291 0 5.1% 16,273 54,391 $2.40 $2.16 $2.22
San Juan Capistrano 835,466 0 1.1% 668 346 $2.50 $2.29 $2.32
West County 7,359,747 0 10.2% -66,401 -150,961 $2.77 $1.49 $1.85
Cypress 1,898,741 0 18.6% -27,316 -141,787 $2.47 $1.29 $1.48
Fountain Valley 983,665 0 3.3% -2,178 -27,048 - $1.94 $1.88
Garden Grove 646,135 0 9.6% -18,126 -3,778 - $1.68 $1.70
Huntington Beach 2,122,522 0 11.3% -23,568 -34,536 $2.81 $2.04 $2.34
Los Alamitos 553,880 0 1.5% 2,042 -2,612 - $2.12 $2.12
Seal Beach 325,148 0 1.4% 2,861 10,742 $3.28 - $3.28
Stanton 115,576 0 13.3% -967 294 - $0.98 $1.10
Westminster 714,080 0 4.5% 851 47,764 - $2.62 $2.62
Orange County 95,961,780 1,053,725 12.3% 63,150 833,081 $3.17 $2.47 $2.80
2100 E. 4TH STREET 35 PREPARED BY
ANDREW ROBBEN JAMES ESTRADA JOHN HATZIS Managing Director Senior Managing Director Principal t 949-608-2073 t 949-608-2031 t 714-564-7137 CA RE Lic. #01372891 CA RE Lic. #00930168 CA RE Lic. #0116384 [email protected] [email protected] [email protected]
NKF - CORPORATE LICENSE #01355491
LEE - CORPORATE LICENSE #00937396
The distributor of this communication is performing acts for which a real estate license is required. The information contained herein has been obtained from sources deemed reliable but has not been verified and no guarantee, warranty or representation, either express or implied, is made with respect to such information. Terms of sale or lease and availability are subject to change or withdrawal without notice.