5236 California Ave California SW 5236
|
SEATTLE
SEAVIEW MIXED-USE Offering Memorandum EXCLUSIVELY LISTED BY
Matt Johnston P: 206.556.4419 C: 425.422.7840 [email protected]
Jason Kono P: 206.566.6595 C: 206.920.0187 [email protected]
Casey Zejdlik P: 206.566.6599 C: 206.280.1871 [email protected] TABLE of CONTENTS
Investment Overview
The information included in this document has been obtained from sources we believe to be reliable. While we do not doubt its Location accuracy, we have not verified it and cannot make any guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions, or estimates used are for example only and may not accurately represent the current or Financials future performance of the property. The value of any proposed transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent Comparables investigation of the property to determine to your satisfaction the suitability of the property for your needs. © Pilot Ventures LLC.
Offer Guidelines INVESTMENT OVERVIEW
SEAVIEW MIXED-USE | PILOT VENTURES | 4 A mixed-use asset with upside in a desirable West Seattle location.
SEAVIEW MIXED-USE | PILOT VENTURES | 5 Price $ 2,600,000
Units 10
Price Per Unit $ 260,000
Rentable SF 7,838
Price Per SF $ 332
Current Cap Rate 4.60 %
Market Cap Rate 5.53 %
Current GRM 15.3
Market GRM 13.7
Year Built 1968
Parcel Number 762570-0445
Land SF 7,500 $ Zoning NC2-40 (M) 144,332 Construction Type Wood Frame PROFORMA NOI Parking Surface Parking - 10 Stalls
SEAVIEW MIXED-USE | PILOT VENTURES | 6 Interior Photos
SEAVIEW MIXED-USE | PILOT VENTURES | 7 LOCATION OVERVIEW
SEAVIEW MIXED-USE | PILOT VENTURES | 8 QUEEN ANNE
CAPITOL HILL
ELLIOTT BAY
DOWNTOWN LAKE WASHINGTON
WEST SEATTLE
PUGET SOUND
GEORGETOWN SEAVIEW MIXED-USE | PILOT VENTURES | 9 SEAVIEW MIXED-USE | PILOT VENTURES | 10 SEAVIEW MIXED-USE
5236 California Ave SW, Seattle, WA 98136
Nestled just south of West Seattle’s Alaska Junction, the Seaview Mixed-Use building contains six residential units directly above 1,970 square feet of commercial space. The commercial space is currently configured into two separate and easy to rent offices, however this could also be reconfigured into four separate spaces. Seaview is an asset that is poised well for growth and offers a well-maintained private courtyard in the front of the building, ten off-street parking stalls with alley access, a
Information large footprint zoned NC2-40 (M), and views of the Puget Sound to the west, among numerous other attractive upgrades.
Residents of Seaview benefit from an abundance of retail, entertainment, and recreational options within an extremely close proximity. West Seattle boasts many of Seattle’s most well-known parks and outdoor recreational destinations including Alki Beach Park, Lincoln Park, the West Seattle Golf Course, and Schmitz Park.
Seaview’s location is considered “very walkable” and has a walk score of 87. The property is surrounded by local favorites and convenient amenities including Bakery Nouveau, The Matador, and Elliott Bay Brewery & Pub. There are ample opportunities to shop with Safeway, Whole Foods Market, and Trader Joe’s all within a five-minute drive. Commuting is also made easy for residents with bus stops within walking distance that provide quick access to the Seattle core via the Rapid Ride C Line. Lastly, Fauntleroy Way is a short drive to the east, allowing residents easy access to the West Seattle Bridge which connects them to Submarket Submarket Interstate-5 and the rest of the Puget Sound region to the north and south.
The property consists of 1,970 square feet of flexible commercial space, two 2-bedroom / 2-bathroom multifamily units, and four 2-bedroom / 1.5-bathroom multifamily units. Four of the six multifamily units have been renovated with engineered hardwood seattle and sheet vinyl flooring, granite countertops, new cabinets, and new appliance packages. Two units offer vaulted ceilings, and all units offer territorial views to the west, and private balconies. With a dedicated apartment entrance, updated electrical throughout, and extensive updates to two-thirds of the units, Seaview is a well-maintained asset that offers remaining upside for a future Buyer to capture.
SEAVIEW MIXED-USE | PILOT VENTURES | 11 WEST SEATTLE | 98136
1 Raccolto 13 The Matador
2 Itto’s Tapas 14 Mashiko Sushi
3 Buddha Ruska 15 Elliott Bay Brewery & Pub 1
EAT + DRINK EAT 4 Hotwire Coffeehouse 16 Bakery Nouveau WEST SEATTLE
5 Ma’ono 17 Bang Bar Thai 2 1 Red Cup Espresso 18 Uptown Espresso 6 2 3 Coastline Burgers 19 Sound & Fog 4 7 5 6 7 8 Realfine Coffee 20 Ephesus 8 9 4 9 Shadowland 21 The Bridge 10 11 12 1 2 10 Kamei Japanese 22 Peel & Press 6 1 3 13 3 11 West Seattle Bowl 23 Pearls Tea & Coffee 14 4 15 4 5 12 West 5 24 Pho Aroma 16 19 3 17 5 2 7 6 18 8 23 1 Trader Joe’s 6 Safeway
2 QFC 7 Delridge Grocery
3 The Junction 8 Juneau Street Market SHOPPING 4 Jefferson Square 9 Walgreens
5 Whole Foods Market 10 West Seattle Thriftway 20
1 West Seattle Health Club 5 Orangetheory Fitness
2 CrossFit Loft 6 Breathe Hot Yoga 7 SEAVIEW 3 LA Fitness 7 Bikram Yoga 24 WELLNESS 4 Junction Fitness 8 YogaSix PUGET 8 SOUND
1 Me-Kwa-Mooks Park
2 West Seattle Golf Course
3 Puget Park 21 4 Delridge Community Center RECREATION 9
87 53 66 22 10
WALKSCORE.COM
SEAVIEW MIXED-USE | PILOT VENTURES | 12 Seattle is a bustling metropolis, ranked by and the Puget Sound. Out further, snowcapped the U.S. Census in the “Top 4 for Growth” for mountain ranges can be seen in every direction. five consecutive years. Since 2010, Seattle’s population has increased 18.7%, bringing Home to a diverse and robust community, Seattle an additional 114,412 residents to America’s is the cultural and business center of the Pacific Northwest. The thriving tech sector has pushed beloved Emerald City. Seattle has one of the up the wages, software engineers averaging tightest office markets in the country and is Information $132,000/year, as well as the cost of rent. far less expensive than markets like New York, San Francisco and Washington, DC. As a result Employment and population growth rates are of a dynamic workforce driven by the tech strong and stable, supported by the variety of sector, many tech tenants have set up shop in commerce and an ongoing demand for skilled the region which is having an impact on the workers. Companies expanding in the metro multifamily sector boom. include Indeed, Lyft, Uber, Tableau (acquired by Regional Salesforce), Oracle, Apple and Best Buy. Apple It’s no stretch to appreciate how the lush, announced in June 2019 that it will expand its green foliage and shimmering waters led a few Seattle workforce by 2,000 employees by 2022, up seattle to Seattle. Unparalleled beauty and access to from roughly 450 employees currently. Apple has the outdoors have helped attract some of the occupied space at Two Union Square in Seattle best companies in the country. To the east and CBD since 2015 and took all of the space at 333 west, the city is bordered by Lake Washington Dexter in Lake Union, enough room for
SEAVIEW MIXED-USE | PILOT VENTURES | 13 more than 4,000 employees. In addition, with the highly anticipated relocation of Expedia in 2019 and the recent acquisition of Tableau by Salesforce 53,000 employees 4,500 employees 2,500 employees (Salesforce HQ2), Seattle continues to bring strong talent into the core which fuels the absorption of multifamily units. 2,000 employees 5,000 employees 2,000 employees
Seattle was ranked the second-best city for STEM workers by NerdWallet. The University of Washington, a highly ranked school with a variety 1,365 employees 1,250 employees 1,186 employees of nationally recognized programs, prepares top- tier students for roles at companies, such as the Fred Hutchinson Cancer Research Center, the Allen
Institute and various cutting-edge tech companies. 1,000 employees 1,000 employees 800 employees
Buzzing with new infrastructure, jobs and residents, Seattle’s ever-growing metropolis is considered home to many major employers who drive growth 800 employees 700 employees 525 employees and fuel the area’s economic climate including:
500 employees 320 employees 235 employees
SEAVIEW MIXED-USE | PILOT VENTURES | 14 Pike Place Market
Pike Place public market, overlooking the Elliot Bay waterfront, first opened in 1907. Pike Place remains Seattle’s most popular tourist desination and the 33rd most visited tourist attraction in the world, with over 10 million visitors annually.
Northgate
Seattle’s Northgate neighborhood’s dense mixed-use
Attractions development is expected to be completed by 2021. This transformative location, fueled in part by Seattle’s new NHL team headquarters, training facility, and community ice rinks, is adjacent to the new Link Light Rail Northgate station. Local
West Seattle seattle Seattle’s eclectic West Seattle neighborhood is a quick drive or water taxi ride from downtown. It is home to an array of amenities including one of the city’s most popular outdoor recreation areas, Alki Beach.
SEAVIEW MIXED-USE | PILOT VENTURES | 15 THAT’S OVER HALF THE % TOTAL POPULATION OF 3.9m 14.2 WASHINGTON STATE SEATTLE-TACOMA-BELLEVUE GROWTH SINCE 2010 MSA POPULATION
SEAVIEW MIXED-USE | PILOT VENTURES | 16 EXPANDING TECH COMPANIES IN SEATTLE
Expedia’s new $900 million HQ on Seattle’s waterfront will open Google’s future third block brings it’s total office space in South in October 2019. The site will house 4,500 Seattle metropolitan area Lake Union to nearly 930,000 square feet. The site will accomodate employees as the company shifts operations from their Eastside between 4,600 and 6,200 employees, using and industry standard Bellevue location to Downtown Seattle. Approvals are in place to ratio of 150 to 200 square feet per person. The company currently continue future expansion to 8,000 employees at the campus. has 3,400 employees in the region. Seattle is Google’s third largest market behind its Mountain View, California HQ, and its operation in Expedia, which spun out of Microsoft in 1999, is one of the world’s New York City. largest online travel companies. The brand umbrella includes Expedia, Hotels.com, Egencia, and Expedia Partner Solutions. The Google is a multinational technology company specializing in company’s annual growth increased 12% year-over-year to $11.2 internet related services and products. The company had a healthy billion in fiscal year 2018. revenue growth of 23% to $136.7 billion in fiscal year 2018.
Facebook’s 2019 leasing velocity makes room for 23,700 new Apple’s expansion at 333 Dexter includes two 12-story office employees in the Seattle area according to the 150 square feet per towers totaling 630,000 square feet, with room to house 4,200 employee industry standard. Facebook currently employs 5,000 employees. Seattle has become Apple’s hub for developing artificial people in the Seattle region across Downtown Seattle, Bellevue, and intelligence and machine learning technologies. Redmond. The projected headcount will easily exceed Facebook’s Silicon Valley offices, at approximately 15,000. The company designs, manufactures, and markets mobile communication and media devices as well as personal computers, Facebook allows people to stay connected with friends and family and sells a variety of related software, services, accessories, and and share and express what matters to them. Other products and third-party digital content and applications. Apple is the world’s services owned by Facebook include Instagram, WhatsApp, Oculus, largest technology company by revenue and became the first public and GrokStyle. U.S. company to be valued at over $1 trillion.
SEAVIEW MIXED-USE | PILOT VENTURES | 17 AMAZON’S SEATTLE GROWTH IMPACT
Jobs: Amazon has created more than 47,000 jobs in Seattle since 2010 and 11,393 new job postings as of January 2020, with 30% of those in AWS, Amazon’s flagship cloud business.
Multifamily Demand: Amazon’s job growth has impacted neighborhoods surrounding South Lake Union, Bellevue, and the greater Puget Sound region.
SLU Campus SLU Evolving Skyline: Amazon’s growth, with 12 million square feet leased or owned, has shaped the skyline of Seattle and driven consistent demand in the multifamily sector. In addition, Amazon’s rapid expansion in Bellevue could reach 4.8 million square feet and power spectacular growth in the area’s suburbs.
AMAZON’S EMPLOYMENT TRENDS IN SEATTLE
50,000 45,000 Amazon’s Amazon’s 45,000 40,000 40,000 38,000 35,000 30,000 27,500
25,000 seattle 21,000 20,000 16,000 15,000 11,000 10,000 8,500 5,000 5,000
- 2010 2011 2012 2013 2014 2015 2016 2017 2018
SEAVIEW MIXED-USE | PILOT VENTURES | 18 WASHINGTON STATE IS HOME TO 11 COMPANIES ON THE 2019 FORTUNE 500 LIST
In total, Fortune 500 companies represent two-thirds of the U.S. GDP with $13.7 trillion in revenues, $1.1 trillion in profits, $22.6 trillion in market value, and employ 28.7 million people worldwide. 647,500 employees
Washington state and the Puget Sound region are home to an array of Fortune 500 companies covering a variety of industries, including:
131,000 employees 194,000 employees Internet Services and Retailing
Technology
291,000 employees 28,000 employees General Merchandisers
Food Services
74,000 employees 24,500 employees Construction & Farm Machinery
Airlines 23,376 employees 17,400 employees Transportation & Logistics
Forest & Paper Products 9,300 employees 24,000 employees Industrial Machinery
SEAVIEW MIXED-USE | PILOT VENTURES | 19 South Lake Union
South Lake Union is the heart of Seattle’s tech hub, home to Amazon’s headquarters and a variety of cutting-edge technology and biotech companies including Juno Therapeutics, Allen Institute and Fred Hubs Hutchison Cancer Research
Seattle’s CBD is home to major finance, legal, government and insurance companies with a total of 35 million of inventory and 874,000 square feet of positive absorption in the office sector
Bustling core packed with entertainment, restaurants and artsy attractions
First Hill / Pill Hill Employment Home to major healthcare facilities including Harborview, Swedish, and Virginia Mason puget sound Seattle University, the largest independent university in the Northwest, with over 7,500 students enrolled
Tourist destination that provides a plethora of dining, shopping and entertainment opportunities
SEAVIEW MIXED-USE | PILOT VENTURES | 20 Bellevue
The Eastside’s most sought after office submarket by tech companies including Amazon, Google and Facebook
Amazon has plans to add over 20,000 employees into this submarket by 2024
Downtown Bellevue has a current workforce of about 46,200 and is one of the top 100 most educated populations in the country
Redmond
World-renowned as the region’s hub for technological innovations
Home to Microsoft’s, SpaceX, Oculus (Facebook’s virtual reality headset division), and Nintendo of America
Microsoft expansion plans allow for up to 8,000 additional employees at its Redmond campus by 2023
Kirkland
Kirkland benefits from a high proportion of tech tenants including Google, Tableau, and GoDaddy
The downtown waterfront has an unparallel blend of public parks and beaches, fine dining, art galleries, and a performing arts center
SEAVIEW MIXED-USE | PILOT VENTURES | 21 FINANCIALS
SEAVIEW MIXED-USE | PILOT VENTURES | 22 UNIT Type Approx SF Current Rent Current / SF Market Rent Market / SF
3 2 Bd / 2 Bth 970 $ 1,990 $ 2.05 $ 2,095 $ 2.16
4 2 Bd / 1.5 Bth 970 $ 2,050 $ 2.11 $ 2,095 $ 2.16
5 2 Bd / 1.5 Bth 970 $ 1,535 $ 1.58 $ 2,095 $ 2.16 Rent Roll 6 2 Bd / 1.5 Bth 970 $ 1,535 $ 1.58 $ 2,095 $ 2.16
7 2 Bd / 2 Bth 970 $ 2,135 $ 2.20 $ 2,250 $ 2.32 • Mixed-use asset in desirable West Seattle location 8 2 Bd / 1.5 Bth 970 $ 2,050 $ 2.11 $ 2,250 $ 2.32
• 1,970 SF of flexible commercial A / D Office 1,330 $ 1,910 $ 1.44 $ 2,005 $ 1.51 space B / C Office 640 $ 935 $ 1.46 $ 982 $ 1.53 • Four of six units thoughtfully upgraded 7,790 $ 14,140 $ 1.82 $ 15,867 $ 2.04
* Unit square footages are estimated
SEAVIEW MIXED-USE | PILOT VENTURES | 23 CURRENT PRO FORMA
Gross Potential Rent $ 169,680 $ 190,404
Vacancy $ (8,484) 5.00 % $ (9,520) 5.00 %
NET RENTAL INCOME $ 161,196 $ 180,884
OTHER INCOME
Utility Billback $ 2,760 $ 5,040
Parking Income $ 0 $ 4,800
Misc Income $ 7,776 $ 8,009
Total Other Income $ 10,536 $ 17,849
EFFECTIVE GROSS INCOME $ 171,732 $ 198,733
EXPENSES
Property Taxes $ 18,395 $ 19,015 Financial Analysis Insurance $ 4,052 $ 4,052
Utilities $ 9,901 $ 10,198
• Ample off-street parking with Maintenance / Repairs $ 6,800 $ 6,800 alley access Advertising $ 0 $ 1,000 • Entirely updated electrical Professional Management $ 8,587 $ 9,937 throughout Reserves $ 1,600 $ 1,600 • Room to push rents to market Landscaping $ 1,800 $ 1,800
Total Expenses $ 51,135 $ 54,401
NET OPERATING INCOME $ 120,597 $ 144,332
SEAVIEW MIXED-USE | PILOT VENTURES | 24 COMPARABLES
SEAVIEW MIXED-USE | PILOT VENTURES | 25 Sales Comparables
ADDRESS Building Name Units Price Sale Date Price / Unit Price / SF Cap Rate GIM Distance
1 5212 California Ave SW Sunset Manor 19 + 2 $ 5,147,450 12/17/19 $ 233,975 $ 352 4.4 % 14.8 2 doors
2 1526 44th Ave SW 1526 44th Ave SW 12 $ 3,697,000 12/10/19 $ 308,083 $ 397 4.2 % 16.8 2.5 miles
3 2100 California Ave SW Windhill Apartments 23 $ 7,032,700 9/3/19 $ 305,770 $ 332 4.2 % - 2.1 miles
4 1706 California Ave SW Charene 6 $ 1,648,500 4/30/19 $ 274,750 $ 261 3.9 % 17.5 2.3 miles
5 6040 California Ave SW Cali Apartments 25 + 2 $ 10,693,750 1/11/19 $ 396,065 $ 405 4.5 % 15.4 0.5 miles
AVERAGES $ 303,729 $ 349 4.2 % 16.1
1 SUNSET MANOR 2 1526 44TH AVE SW 3 WINDHILL APARTMENTS
• 1969 construction / 80% • 1991 construction / 50% • 1987 construction / ~30% renovated prior to sale renovated in 2017 renovated prior to sale • Mixed-use asset (one • Strong North Admiral • Strong North Admiral non-conforming unit) neighborhood location neighborhood location • Most comparable to • 50% one-bedroom & 50% • On-site laundry and well- subject property two-bedroom unit mix maintained but dated finishes
4 CHARENE 5 CALI APARTMENTS
• 1976 construction • 1992 construction / fully • Strong North Admiral renovated in 2017 neighborhood location • Mixed-use asset • Well-maintained but • Closer to retail / amenities original interiors with condo-quality interiors
SEAVIEW MIXED-USE | PILOT VENTURES | 26 2 1 SUNSET MANOR 4 5212 California Ave SW 3
2 1526 44TH AVE SW
1526 44th Ave SW
3 WINDHILL APARTMENTS
2100 California Ave SW
4 CHARENE
1706 California Ave SW WEST SEATTLE
5 CALI APARTMENTS
6040 California Ave SW
1 PUGET SOUND
5
SEAVIEW MIXED-USE | PILOT VENTURES | 27 Rent Comparables
ADDRESS Building Name Unit Type Unit SF Rent Rent / SF Distance Built / Reno
1 4830 Fauntleroy Way SW Garden Terrace 2 Bd / 2 Bth 842 $ 1,995 $ 2.37 0.5 miles 1986
2 6041 California Ave SW The View on California 2 Bd / 1 Bth 870 $ 2,125 $ 2.44 0.5 miles 1991 / 2019
3 5941 California Ave SW Cumberland House 2 Bd / 2 Bth 800 $ 2,075 $ 2.59 0.4 miles 1989 / 2019
4 4500 36th Ave SW West Seattle Orchard 2 Bd / 1 Bth 1,000 $ 2,000 $ 2.00 1.0 miles 1960 / 2018
5 4850 California Ave SW Hudson Square 2 Bd / 1 Bth 875 $ 2,195 $ 2.51 0.2 miles 1989 / 2017
AVERAGES 877 $ 2,078 $ 2.38
1 GARDEN TERRACE 2 THE VIEW ON CALIFORNIA 3 CUMBERLAND HOUSE
• Dated finishes • Newly renovated • Newly renovated • In-unit W/D • High-end finishes • High-end finishes • Controlled-access entry • Stainless steel appliances • Stainless steel appliances • Utilities: $140-160/mo/ • In-unit W/D • In-unit W/D two tenants • Utilities: $70/mo/tenant • Utilities: $70/mo/tenant ($30/mo/each additional) ($30/mo/each additional)
4 WEST SEATTLE ORCHARD 5 HUDSON SQUARE
• Modest renovation • Top floor unit w/ partial views • Hardwood & carpet flooring • In-unit W/D • In-unit W/D • Laminate pergo & carpet flooring • Utilities: included in rent • Stainless steel appliances • Utilities: $140-160/mo/two tenants • Commercial space on ground floor
SEAVIEW MIXED-USE | PILOT VENTURES | 28 1 GARDEN TERRACE 4
4830 Fauntleroy Way SW
2 THE VIEW ON CALIFORNIA
6041 California Ave SW
1 WEST SEATTLE 5 3 CUMBERLAND HOUSE
5941 California Ave SW
4 WEST SEATTLE ORCHARD
4500 36th Ave SW
5 HUDSON SQUARE
4850 California Ave SW PUGET SOUND 3
2
SEAVIEW MIXED-USE | PILOT VENTURES | 29 OFFER GUIDELINES
SEAVIEW MIXED-USE | PILOT VENTURES | 30 Pilot Ventures is pleased to announce
All questions and inquiries regarding tours and this opportunity should be addressed to the Pilot Ventures representatives listed herein. Pilot Ventures’ team will be available to assist prospective investors with questions upon their review of the offering. Investors will receive advanced notification of the bid deadline via email. Offers should include, at a minimum, the following:
• The purchase price, contingencies and closing date;
• The amount of earnest money deposit;
• The source of capital for down payment;
• A detailed timeline for the transaction;
• A brief overview of the Buyer’s qualifications.
SEAVIEW MIXED-USE | PILOT VENTURES | 31 Brokerage Built upon trust and experience, Pilot Ventures was Whether you’re buying or selling, our experienced team founded by principals Casey Zejdlik and Jason Kono. of brokers will ensure you receive the best possible representation. Specializing in multifamily investments and property management services, our focus on long-term client Syndication success is at the core of everything we do. Our firm’s financial expertise and professional management At Pilot Ventures, our experienced team of industry allows individuals, families, partnerships and trusts to invest professionals offer more than 50 years of creative in income producing properties without worrying about the investment expertise. We engage with every client day-to-day operations. We provide a full-service approach to every stage of your multifamily real estate investment. in a goal-oriented manner to enhance their portfolio and maximize results. Management Together, we don’t just build equity— Managing properties can be an overwhelming experience— we build relationships. in working with Pilot Ventures, we help streamline processes and systems to maximize your cash flow and ROI.
SEAVIEW MIXED-USE | PILOT VENTURES | 32 Brokerage / Syndication / Management
pilotNW.com