4 UNIT CONDO DEVELOPMENT OPPORTUNITY 1124 7th Street Santa Monica, CA

OFFERING MEMORANDUM 1 ™

EXCLUSIVELY LISTED BY

J. A. CHARLES WRIGHT Senior Associate

D: (310) 295-4374 M: (626) 290-5965 E: [email protected] License No. 01985584 (CA) 1124 7th Street Santa Monica, CA E

4 SALES COMPARABLES 7 PROPERTY OVERVIEW

8 FINANCIAL OVERVIEW 10 LOCATION OVERVIEW Sales Comparables

4 954 5TH ST, SANTA MONICA, CA 90403

Address Price Lot Area Land Cost Per S.F. Zoning Notes

Historical Single-Family Residential currently 1124 7th Street $2,550,000 7,511 S.F. $332.85 SMR2 resides on property

Historical Single-Family Residential Sold on 954 5th St, Santa Monica, CA $2,050,000 7,484 S.F. $273.91 SMR2 1 5/22/2014 for $2,050,000

1

0.2 MILES

5 CONDOMINIUM SALES COMPARABLES OF 954/956 5TH ST

Address Sale Price SqFt Price Per SF Year Built Mix Notes Status

1 954 5th St. Santa Monica $2,450,000 1,500 1,633.33 1908/2018 3BR/3.5BA Historical Cottage Sold

2 956 5th St.,#A Santa Monica $2,298,000 1,660 1,384.34 2018 3BR/3BA Townhome Under-Contract

3 956 5th St.,# Santa Monica $2,200,000 1,660 1,325.30 2018 3BR/3BA Townhome Sold

4 956 5th St.,#C Santa Monica $2,298,000 1,770 1,298.31 2018 3BR/3BA Townhome Under-Contract

Averages 1,647 1,410.32

2 1

3 4

6 6TH ST

WILSHIRE BLVD

7TH ST 7 CONDO OPTIONS

PROPERTY OVERVIEW 05/10/2018 4 OPTION A The subject property is a historical home with potential to rehabilitate the 3 2 1 existing cottage on the property and add 3 units as per plans. The comparables used to evaluate the property are recent townhome sales in the area. The comparable with the most effective data to project a value is 954-956 A-C OPTION B 4 3 2 5th St. This property had development potential at time of sale, the existing 1 historical home on the property was rehabilitated and the developer added 3 additional units all approximately the same size as our subject property’s architectural assumptions. Original purchase for development 5/22/2014 for 4 $2,050,000, along with a hard money loan for $1,537,500. OPTION C 3 2 1

COTTAGE UNIT 3

UNIT 2 UNIT 4

1124 7TH STREET, SANTA MONICA, CA 90403 DESIGN OPTIONS A-17

8 FINANCIAL OVERVIEW

9 9 PRICING ANALYSIS FOR GROUND-UP CONDO DEVELOPMENT

INVESTMENT SUMMARY PROPERTY DESCRIPTION Offering Price: $2,550,000 Number of Units: 4 1124 7th St, Completion Year: 2021-2022 Property Address: Santa Monica, CA Lot Size: 7,511 S.F. Price Per Buildable Unit: $637,500 Est. Gross Bldg S.F.: 7,000 S.F. Price Per Land S.F.: $339.50 Average S.F. Per Unit: 1,750 S.F.

ESTIMATED CONSTRUCTION COSTS Estimated Hard & Construction Cost/ Avg Disposition Estimated Parking Total Project Costs Zoning Avg Unit Size Projected Rent/SF Soft Costs Gross SF Price/SF Spaces $2,800,000 $5,350,000 $400.00 $1,314.29 SMR2 1,750 $1,314.29 TBA

ESTIMATED CONSTRUCTION COSTS AND SALES ASSUMPTIONS Land Acquisition Cost: $2,550,000 Total Hard & Soft Development Costs: $2,800,000 Total Project Costs: $5,350,000 Carrying Costs (18 Months, 65% of Total Project Costs, 8% Int Only): $417,300 Total Project and Carrying Cost: $5,767,300 Project Disposition Price of Completed Project: $9,200,000 Closing Costs / Legal / Commissions: $552,000 Less Total Project and Carrying Costs: $6,319,300 Net Profit: $2,328,700 Total Return (Net Profit/Total Completed Project Costs): 37%

10 LOCATION OVERVIEW

11 11 SANTA MONICA, CA DEMOGRAPHICS Santa Monica is a beachfront city in western Los Angeles County, California, United States. Situated on Santa Monica Bay, it is bordered on three sides by the city of Los Angeles – Pacific Palisades to the north, Brentwood on the northeast, West Los Angeles on the east, Mar Vista Population 1 Mile 3 Mile 5 Mile on the southeast, and Venice on the south. Santa Monica has been famed as a resort town and 2023 Projection 38,814 181,216 414,595 has experienced a boom since the late 1980s through the revitalization of its downtown core, 2019 Estimate 37,473 176,117 402,559 significant job growth and increased tourism. Some popular destinations continue to be The 2010 Census 35,150 168,822 385,134 Santa Monica Pier and Pacific Park. 2000 Census 32,219 162,585 368,144 The Santa Monica Pier is a large double-jointed pier at the foot of Colorado Avenue in Santa Growth 2010-2019 6.61% 4.32% 4.52% Monica, California. With an iconic entrance, the pier is popular with residents and visitors as a Households 1 Mile 3 Mile 5 Mile landmark that is over 100 years old. What makes this Pier unique is the Family Amusement Park 2023 Projection 22,230 91,581 195,850 and state-of-the-art, solar paneled Ferris wheel. 2019 Estimate 21,432 88,953 189,948 The Pacific Park is an oceanfront amusement park located in Santa Monica, California. The park, 2010 Census 20,059 85,295 181,750 located on the Santa Monica Pier, looks directly out on the Pacific Ocean, in the direction of 2000 Census 18,580 83,518 175,990 Catalina Island. It is the only amusement park on the West Coast of the United States located Growth 2010-2019 6.84% 4.29% 4.51% on a pier and LA’s only admission-free park. There are a total of twelve rides in Pacific Park, Income 1 Mile 3 Mile 5 Mile including the world’s first and only solar-powered Ferris wheel that provides a view of the Pacific Average HH Income $135,514 $ 147,4 6 6 $145,196 Ocean and a roller coaster that circles the majority of the park. In fact, this park has appeared in Median HH Income $ 97, 2 70 $99,088 $95,581 over 500 movies and television shows.

12 LIVING IN SANTA MONICA LOS ANGELES MSA Santa Monica has a coastal Mediterranean climate. Santa Monica enjoys an average of 310 days of sunshine a year. Santa Monica usually enjoys cool breezes As the second largest metropolitan area in the United States, the blowing in from the ocean, which tends to keep the air fresh and clean. Therefore, Los Angeles Metropolitan Statistical Area, or the Southland, consists smog is less of a problem for Santa Monica than elsewhere around Los Angeles. of both Los Angeles and Orange Counties. These two counties also Residents of Santa Monica tend to be very environmentally aware. In fact, Santa make up the inner core of the Greater Los Angeles urbanized region. Monica has adopted a Community Energy Independence Initiative, with a goal Los Angeles County, one of California’s original 27 counties, is one of of achieving complete energy independence by 2020 (vs. California’s already the nation’s largest counties both in land area and population. With ambitious 33% renewables goal). In the last 15 years, greenhouse gas emissions nearly 10 million residents, the Los Angeles population accounts for have been cut citywide by nearly 10% relative to 1990 levels, with further reductions approximately 27 percent of California’s population. The area continues being planned by the Office of Sustainability to grow, especially given the vigorous residential development in downtown LA. On an economic standpoint, Santa Monica is home to a few notable businesses including Hulu, Universal Music Group, Illumincation Entertainment, Saban Capital Group, Miramax, Lionsgate Films, the RAND Corporation, Fatburger and TOMS Shoes. Recently, Santa Monica has emerged as the center of the Los Angeles region called Silicon Beach, and serves as the home of hundreds of venture-capital funded startup companies.

13 ECONOMY

Famously known for a heavy entertainment industry based economy, the Los Angeles metropolitan area attracts many visitors. Consequently, leisure and hospitality is also a leading industry and has experienced recent growth in employment. It is now the sixth largest hotel market in the United States. The Los Angeles-Orange County metro area alone has an enormous economy with an estimated $866 billion GMP. Together with Ventura, Riverside and San Bernardino Counties, Orange and Los Angeles county make up the Greater Los Angeles Area, a combined statistical area that is the third largest economic center in the world after the Greater Tokyo and New York metropolitan areas.

The LA economy is famously and heavily based on the entertainment industry, with a particular focus on television, motion pictures, interactive games, and recorded music - the Hollywood district of Los Angeles and its surrounding areas are known as the “Movie Capital of the United States” due to the region’s extreme commercial and historical importance to the American motion picture industry. Other significant sectors include shipping/ international trade - particularly at the adjacent Port of Los Angeles and Port of Long Beach, together comprising the United States’ busiest seaport - as well as aerospace, technology, petroleum, fashion and apparel, and tourism.

TOP EMPLOYERS

14 EXPO LINE SANTA MONICA

The Expo Line is a light-rail line that Santa Monica Air Line. hen the Regional runs between Downtown Los Angeles Connector is complete in 2021, the Expo and Santa Monica. The station is Line will be joined with the Eastside located in Downtown Santa Monica, portion of the Gold Line, forming the off-street in the block bounded by 4th new E Line. It will retain the “E” from and 5th Streets, Colorado Avenue, and the Expo Line and take the Gold Line’s the 10 Freeway. The site is located in the coloring. The current project for the midst of Santa Monica’s Civic Center, metro is Phase 2. Phase 2 of the Metro within a short walk of the Pacific Ocean, Expo Line is a 6.6-mile extension of the Santa Monica Pier, the Third Street 80-station Metro Rail System from the Promenade, the Civic Auditorium, and existing station at Culver City west to Santa Monica High School. The block Santa Monica. was formerly the location of a Sears auto center, which was demolished in The Expo Line Phase 2 runs along the 2010 to make way for the station. old Exposition right- of-way to 4th St. and Colorado Av. Expo Line Metro A trip from downtown Santa Monica in downtown Santa Monica. Phase to downtown Los Angeles takes 47 2 connects Santa Monica by rail to ± 64,000 Riders / Workday minutes. The line is named after Downtown LA, Pasadena, San Fernando 6 Lines, 2 Rapid Transit Exposition Boulevard, which it runs Valley, South Bay, Long Beach and alongside for most of its route. It is one dozens of points in between. With of the six lines in the Metro Rail system seven new stations serving diverse LA and is operated by the Los Angeles neighborhoods such as Century City, County Metropolitan Transportation West Los Angeles, and Santa Monica, Authority (Metro). the Metro Rail system will now expand to 87 stations and over 93 miles of rail The Expo Line largely follows the right- to destinations across L.A. County. of-way of the former Pacific Electric

15 CENTRALLY LOCATED

Montana Avenue • Montana Avenue is home to a stretch of more than 150 restaurants and retailers. It is a short walk from Downtown Santa Monica, however, feels removed from the hustle and bustle of the Promenade and Pier. From sunrise to sunset, a steady stream of shoppers browse the storefronts amid a relaxed crowd of A-list celebrities, out-of-towners, and parents pushing strollers, none of whom seem in a hurry to leave the wealth of juice bars, latte vendors, and outdoor cafés.

Colorado Espalande • The newly-completed Colorado Esplanade, from 4th Street to Ocean Avenue, is a promenade designed to connect the Downtown Expo Light Rail station, Tongva Park and one of the City’s most prominent landmarks, the Santa Monica Pier, stitching the Civic Center and Downtown Districts together across the freeway. The project addresses the community vision for an integrated light rail system, easily accessed from key destinations and by multiple travel modes.

Third Street Promenade • The Third Street Promenade is an upscale shopping, dining and entertainment complex in the downtown area of Santa Monica, California. It is considered a premier shopping and dining district on the Westside and draws crowds from all over the Greater Los Angeles Area. Due to its proximity to the Pacific Ocean coupled with Los Angeles’s mild climate, it is also a popular tourist destination. 16 CONFIDENTIALITYConfidentiality & DISCLAIMER Agreement STATEMENT & Disclaimer This Offering Memorandum contains select information pertaining to the business and affairs of1124 7th St in Santa Monica, CA (“Property”). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum for the Property, you agree:

1 . The Offering Memorandum and its contents are confidential; 2. You will hold it and treat it in the strictest of confidence; and 3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.

Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.

17 1124 7th Street Santa Monica, CA

EXCLUSIVELY LISTED BY

J. A. CHARLES WRIGHT Senior Associate

D: (310) 295-4374 M: (626) 290-5965 E: [email protected] License No. 01985584 (CA)

™

OFFERING MEMORANDUM