The Tiffany Offering Memorandum
2308 Albatross Street San Diego, CA 92101
1 EXCLUSIVE ADVISOR Cody Evans 858 729 3094 3405 Kenyon Street, Suite 411 Lic #01399935 San Diego, CA 92110 [email protected] 619 906 2110 PANORAMIC VIEWS FROMPANORAMIC THE THIRD VIEWS FLOOR table of contents OFFERING SUMMARY 1 ◊ EXECUTIVE SUMMARY ◊ INVESTMENT HIGHLIGHTS AMENITIES 2 ◊ PROPERTY PHOTOS THE ASSET 3 ◊ PROPERTY SUMMARY FINANCIALS 4 ◊ INCOME EXPENSE ANALYSIS ◊ MULTIYEAR CASH FLOW ASSUMPTIONS ◊ CASH FLOW ANALYSIS ◊ RENT ROLL ◊ RENT & SALE COMPARABLES LOCATION OVERVIEW 5 THE MARKET 6 offering summary
OFFERING SUMMARY ADDRESS 2308 Albatross St San Diego, CA 92101 BUILDING SF 10,207 LAND SF 9,476 NUMBER OF UNITS 9 YEAR BUILT/RENOVATED 1979/2020
FINANCIAL SUMMARY OFFERING PRICE $6,950,000 OCCUPANCY 97% NOI (CURRENT) $271,228 CAP RATE (CURRENT) 3.90% GRM (CURRENT) 16.80
PROPOSED FINANCING LOAN TYPE Interest Only DOWN PAYMENT $2,950,000 LOAN AMOUNT $4,000,000 INTEREST RATE 3.35% ANNUAL DEBT SERVICE $134,000 LOAN TO VALUE 58% executive summary
The Tiffany Apartments is a 9 unit building located on Albatross Street in the central San Diego community of Bankers Hill. Originally built in 1979 and consisting of a structure on a 9,476 sq ft lot. The property has a much desired unit mix of all 2 Bedroom/ 2 Bath that are a spacious 1,134 sq ft (on average) each. The complex recently went through an extensive rehab in 2020. The newly completed renovation includes open entertaining living room/kitchen area; beautiful new quartz counters and new custom cabinets and island counter, new stainless appliances, modern fixtures and lighting, new wood plank style flooring throughout, custom bathrooms with tiled showers and glass enclosures, and much more. Majority of the units have private balconies. There is ample off street secured parking spaces, 16 in total, which is incredibly rare for the area. These include open, carport, and garage spaces. The building has a gated entrance, elevator access from parking to all floors, updated on-site laundry room and new equipment with smartphone technology, and private storage. Every unit has spectacular views of Downtown, Coronado, San Diego Harbor, Airport, Point Loma and Pacific Ocean as well. The Tiffany represents an opportunity for an investor to acquire an absolutely turn-key building in a highly sought after Bankers Hill location.
VIDEO TOUR 8 investment highlights
Recently Completed High End Units: The project has just completed a comprehensive rehabilitation of the exterior and interior of the units to significantly enhance the overall quality of the property and attract higher rents. Units now include new two-tone modern cabinetry in the kitchen with 2 cm quartz countertops throughout, new stainless steel appliances, smooth textured walls and ceilings, LVT plank flooring, new bathrooms with walk in tile showers, high end fixtures and modern tile accent walls. The units also include frosted glass closet doors, new ceiling fans and lighting, and paint throughout. In addition, upgrades to the aesthetic design of the exterior were completed to modernize the look and feel of the project.
Large Unit Size: The Tiffany offers a larger than average unit size for the submarket. It is comprised of 9 spacious two-bedroom/two full bathroom apartments that average ~1,100 SF. In addition, 8 of the 9 units have private balconies. The elevated location in Bankers Hill provides all 9 units with spectacular views of the Downtown San Diego skyline, San Diego Harbor, Airport, Point Loma, and amazing sunsets over the Pacific Ocean.
Superior Location: The property is located in a vibrant A+ location originally known as one of San Diego’s most affluent central neighborhoods, which is how it got its name Bankers Hill. These days, Bankers Hill is a cultured community which boasts farm-to-table restaurants, sushi bars, small plate eateries and decadent dessert restaurants that rival those found in neighboring Little Italy. For active residents, Bankers Hill boasts a Walk Score of 88 and is just steps from Balboa Park, a 1,200-acre historic urban cultural park offering miles of walking paths, museums, several theaters, and the world- famous San Diego Zoo. Bankers Hill is known for its proximity to endless retail and entertainment including just a short walk to Little Italy, Hillcrest and Downtown. As a result, this submarket has become a prime target area for renters, particularly young adults including working class Millennials and Generation X’s.
Strong Submarket Fundamentals: Bankers Hill is a supply-constrained market and considered one of the strongest rental communities in San Diego. With a lack of land available and development prices increasing it is extremely difficult to bring new product to the market. In addition, due to the close proximity to Balboa Park, quick access to I-5, and numerous amounts of retail and entertainment the Bankers Hill multi-family submarket is currently experiencing a 3.8% vacancy factor (3Q-2020) and benefits from annual rent growth each and every year for the past decade. amenities
◊ High End Vinyl Plank Flooring ◊ Stainless Steel Appliances ◊ Quartz Countertops in Kitchens & Bathrooms ◊ Tile Backsplash ◊ Brand New Cabinetry ◊ Large Closets ◊ Private Balconies ◊ Ceiling Fans in Bedrooms ◊ Downtown & Bay Views ◊ Significant On-Site Parking ◊ Walk in Showers with Tile Surround PROPERTY PHOTOS PROPERTY PHOTOS PROPERTY PHOTOS PROPERTY PHOTOS PROPERTY PHOTOS the asset
Downtown
San Diego Bay Little Italy
Bankers Hill property summary
Unit Mix: 9 - 2 Bedroom/2 Bath Multi-Family Units Building SF: 10,207 Number of Stories: 3 Year Built/Renovated: 1979/2020 Land Size: 0.23 AC APN: 533-152-07-00
Zoning: RM-3-7 Utilities: Separately Metered Electric Construction: Drywall/Stucco/Wood Roof: Composite Heating: Electric Wall Heaters Air Conditioning: Some Units Have Individual AC Units Parking: 16 Total Spaces 9 - Surface Spaces 5 - Covered Spaces 2 - One Car Garage Stalls financials INCOMEThe Tif f&an EXPENSEy ANALYSIS Income & Expense Analysis | 22 MULTIYEAR CASH FLOW ASSUMPTIONS
INCOME CURRENT REVENUE ALLOCATION Gross Potential Rent $410,076 CURRENT Laundry $1,200 Storage $2,400 Gross Potential Income $413,676 Less: General Vacancy $12,302 Effective Gross Income $401,374 Less: Expenses $130,146 Net Operating Income $271,228 Annual Debt Service $134,000 Debt Coverage Ratio 2.02 Cash Flow After Debt Service $137,228
EXPENSES Per Unit CURRENT Real Estate Taxes $9,514 $85,623 DISTRIBUTION OF EXPENSES Insurance $407 $3,663 CURRENT Management Fee $2,311 $20,802 Gas & Electric $480 $4,320 Maintenance $333 $3,000 Water / Sewer $540 $4,860 Landscaping $107 $960 Trash Removal $233 $2,100 Elevator $132 $1,188 Fire Alarm System $327 $2,940 Licenses & Fees $17 $150 Pest Control $60 $540 Total Operating Expense $14,461 $130,146 Annual Debt Service $14,889 $134,000 Expense / SF $12.79 % of EGI 32.43 % INCOME & EXPENSE ANALYSIS MULTIYEAR CASH FLOW ASSUMPTIONS The Tiffany Multi-Year Cash Flow Assumptions | 23
GLOBAL Offering Price $6,950,000
INCOME - Growth Rates Gross Potential Rent 3.00 % Laundry 3.00 % Storage 3.00 %
EXPENSES - Growth Rates Real Estate Taxes 1.00 % Insurance 3.00 % Management Fee 3.00 % Gas & Electric 3.00 % Maintenance 3.00 % Water / Sewer 3.00 % Landscaping 3.00 % Trash Removal 3.00 % Elevator 3.00 % Fire Alarm System 3.00 % Licenses & Fees 3.00 % Pest Control 3.00 %
PROPOSED FINANCING Loan Type Interest Only Down Payment $2,950,000 Loan Amount $4,000,000 Interest Rate 3.35 % Annual Debt Service $134,000 Loan to Value 58 % CASH FLOW ANALYSIS CASH FLOW ANALYSIS
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The Tiffany Cash Flow Analysis | 23
Calendar Year CURRENT Pro Forma Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Financial Metrics Cash on Cash Return b/t 4.70 % 5.11 % 5.48 % 5.87 % 6.26 % 6.67 % 7.09 % 7.52 % 7.97 % 8.43 % CAP Rate 3.90 % 4.08 % 4.23 % 4.39 % 4.56 % 4.73 % 4.91 % 5.09 % 5.28 % 5.47 % Debt Coverage Ratio 2.02 2.11 2.19 2.28 2.36 2.45 2.54 2.64 2.74 2.84 Operating Expense Ratio 32.42 % 31.48 % 30.93 % 30.39 % 29.87 % 29.35 % 28.85 % 28.36 % 27.88 % 27.41 % Gross Multiplier (GRM) 16.80 16.31 15.84 15.37 14.93 14.49 14.07 13.66 13.26 12.88 Loan to Value 57.52 % 57.61 % 57.53 % 57.52 % 57.57 % 57.56 % 57.60 % 57.58 % 57.60 % 57.56 % Breakeven Ratio 65.81 % 63.89 % 62.40 % 60.95 % 59.53 % 58.16 % 56.81 % 55.51 % 54.24 % 53.00 % Price / SF $683.38 $683.38 $683.38 $683.38 $683.38 $683.38 $683.38 $683.38 $683.38 $683.38 Price / Unit $772,222 $772,222 $772,222 $772,222 $772,222 $772,222 $772,222 $772,222 $772,222 $772,222 Income / SF $39.46 $40.65 $41.86 $43.12 $44.41 $45.75 $47.12 $48.53 $49.99 $51.49 Expense / SF $12.79 $12.79 $12.95 $13.10 $13.26 $13.43 $13.59 $13.76 $13.94 $14.11 RENT ROLL
ADDRESS Unit Type APPROX SIZE Monthly Rents RENT/ SF Unit 1 2 BD/ 2 BA 1,284 $3,850 $3.00
Unit 2 2 BD/ 2 BA 1,165 $3,395 $2.91
Unit 3 2 BD/ 2 BA 1,047 $3,395 $3.24
Unit 4 2 BD/ 2 BA 1,372 $3,995 $2.91
Unit 5 2 BD/ 2 BA 1,157 $3,675 $3.18
Unit 6 2 BD/ 2 BA 1,046 $3,675 $3.51
Unit 7 - Penthouse 2 BD/ 2 BA 1,045 $4,195 $4.01
Unit 8 - Penthouse 2 BD/ 2 BA 1,104 $3,995 $3.62
Unit 9 - Penthouse 2 BD/ 2 BA 987 $3,995 $4.05
Total Est. Size (SF): 10,207 $34,170 $3.38 RENT ROLL 2 BEDROOM RENT COMPARABLES
Address Rent Year Size (SF) $/Foot
2535 Brant St (92101) $3,550.00 1969 1215 $2.92 3534 5th Ave (92103) $4,395.00 2019 1315 $3.34 2870 4th Ave (92103) $3,700.00 2016 1070 $3.46 3102 1st Ave (92103) $3,695.00 1954 900 $4.11 3316 4th Ave (92103) $3,950.00 1935 1100 $3.59 1011 Fort Stockton Dr (92103) $4,395.00 2018 1020 $4.31 2466 1st Ave (92101) $3,795.00 2019 1612 $2.35 1388 Kettner Blvd (92101) $4,500.00 2019 1325 $3.40 550 W Date St (92101) $4,695.00 2018 1195 $3.93 Average $4,140.63 1195 $3.49
Information has been secured from sources we believe to be reliable, but we make no representations expressed or implied, as to the accuracy of the information. References to square footage, and/or age are approximate. SALE COMPARABLES
SF Average ADDRESS Submarket (Zipcode) Year Built # of Units Lot Sq Ft Closing Date Sales Price Cap Rate Improvements Unit Sq Ft 3650 4th Ave Hillcrest (92103) 1941 10 6,534 4,750 475 5/12/21 $2,850,000 3.55% 3969 Oregon St. North Park (92104) 1981 7 7,000 6,182 883 4/21/21 $3,295,423 4.12% 3361 Dale St North Park (92104) 1970 6 6,534 5,994 999 2/19/21 $3,190,000 4.00% 3579-85 3rd Ave Hillcrest (92103) 1940 8 6,098 5,584 698 1/19/21 $3,100,000 4.07% 4328 Louisiana St University Hieghts (92103) 1992 6 4,792 4,090 682 12/8/20 $2,050,000 3.93% 4777-89 Orchard Ave Sunset Cliffs (92107) 1945 8 10,454 4,760 595 12/3/20 $3,000,000 3.62% 3364-66 6th Ave Banker's Hill (92103) 1958 19 10,083 14,213 748 9/17/20 $6,125,000 4.00% 4585 Hamilton St North Park (92116) 1969 8 6,969 6,990 874 9/14/20 $2,625,000 3.88% 3978-90 Florida St North Park (92104) 1931 7 7,405 2,802 400 9/1/20 $1,450,000 4.00% 1237 Pennsylvania Ave Hillcrest (92103) 1920 7 6,534 4,468 638 8/6/20 $2,975,000 3.96% 4934 Coronado Ave Ocean Beach (92107) 1937 7 10,454 3,716 531 4/1/20 $2,800,000 3.60% 842 Reed St Pacific Beach (92109) 1970 8 6,098 5,378 672 2/11/20 $3,335,000 3.06% Average 1955 8 683 3.82%
Information has been secured from sources we believe to be reliable, but we make no representations expressed or implied, as to the accuracy of the information. References to square footage, and/or age are approximate. SALE COMPARABLES location overview
Bankers Hill, sometimes known as Park West, is a long established uptown San Diego neighborhood near Balboa Park. It is bordered to the north by Hillcrest at Upas St., to the south, past Date Street, by Downtown, to the east by Balboa Park, and the west by Interstate 5 Little Italy and the neighborhood known as Midtown.
The area is primarily residential south of Laurel Street and west of 5th Avenue. Many new construction projects are ongoing as of 2009, creating condominiums along 6th Avenue facing the park. Locations further west allow an elevated, panoramic view of Downtown, San Diego Bay, the airport, Coronado, Harbor Island and Mount Soledad. Many homes date from the late 19th century, including some which have been restored as offices or bed-and-breakfast inns. Architects Irving Gill, William Hebbard, Richard Requa and Frank Mead designed homes in this area. The area acquired the name “Bankers Hill” because of its reputation as a home for the affluent.
While the core of downtown San Diego is growing rapidly, the outer core neighborhoods are becoming increasingly desirable. Bankers Hill is currently undergoing a major transformation, with multiple new development projects. They are focused on improving the city’s infrastructure while adding additional park and office space, retail, drinking, dining, and entertainment venues. The neighborhood provides a prestigious, quiet environment that allows for the enjoyment of the benefits of an urban lifestyle without many of the negative consequences of living in a high density area. With many sought-after amenities, a fantastic location, and a myriad of public transportation, Bankers Hill is becoming increasingly sought after as a prime location for many residents to relocate. Pacific Ocean Old Town Hillcrest Mission Hills
San Diego Balboa Park International Airport Bankers Hill
Little Italy
Downtown San Diego Bay
29 Bankers Hill Lifestyle... Bankers Hill has evolved into a modern & trendy spot for activities and development offering an abundance of amenities. The area attracts residents and businesses who want to be in the heart of the city while still enjoying the benefits of the quaint, historic neighborhood near the park. the market
31 DEMOGRAPHICS
The Tiffany Demographic Charts | 31
2020 Household Income
1 Mile Radius 3 Mile Radius 5 Mile Radius
2020 Population by Race
1 Mile Radius 3 Mile Radius 5 Mile Radius DEMOGRAPHICS
DEMOGRAPHICS 1 MILE 3 MILES 5 MILES 2020 Population 29,682 207,014 499,385 2020 Median HH Income $83,388 $70,409 $65,424 2020 Average HH Income $112,318 $101,354 $95,776 DEMOGRAPHICS
The Tiffany Demographic Charts | 32
2020 Household Occupancy - 1 Mile Radius
2020 Household Income Average and Median
Average Income Median Income DEMOGRAPHICS san diego
San Diego County with more than 3.5 million residents is the fifth largest county in America. Bordered by the Pacific Ocean to the west, the Anza-Borrego Desert and the Laguna Mountains to the east, Marine Corps Base Camp Pendleton to the North and Mexico to the south, the diverse neighborhoods of San Diego are spread out over 4,200 square miles. With its year-round warm climate, 60 miles of coastline and appealing work, live, play lifestyle, the city is highly desirable. Referred to as America’s Finest City, the City of San Diego boasts a citywide population of nearly 1.3 million residents and more than 3 million residents county-wide. It encompasses 18 incorporated cities and numerous other charming neighborhoods and communities, including downtown’s historic Gaslamp Quarter, Little Italy, Coronado, La Jolla, Del Mar, Carlsbad, Escondido, La Mesa, Hillcrest, Barrio Logan and Chula Vista just to name a few. The city is the heart of San Diego County and is the economic center of the region as well as the San Diego–Tijuana metropolitan area. San Diego’s main economic engines are military and defense- related activities, tourism, international trade, manufacturing and the especially rapidly growing high tech industry. San Diego hosts several major producers of wireless cellular technology. Qualcomm was founded and is headquartered in San Diego and is one of the largest private-sector employers in San Diego. The presence of the University of California, San Diego (UCSD), with the affiliated UCSD Medical Center, has helped make the area a center of research in biotechnology. Recently, San Diego was designated by a Forbes columnist as the best city in the country to launch a small business or startup company. San Diego County is the fifth largest county in the United States and the second largest in California. By 2021, the County’s Population population is forecasted to be 3.54 million people. 3.3 Million
According to most recent information collected for the San Diego County Housing and CommunityDevelopment Services data, the 2021 Area Median Income (AMI) for San Diego County is $95,100 The California Department of Transportation is forecasting Income real average salaries rising by an average of 3.9 percent per year from 2017 to 2021. $95,100
According to US Bureau of Labor, the unemployment rate in San Diego County was 6.9% in March of 2021, down from a revised Unemployment 7.2% in February 2021, and well above the year-ago estimate of 2.9%. 6.9% San Diego is served by a network of freeways and highways, the San Diego Trolley light rail system, the SDMTS bus system, and Coaster and Amtrak Pacific Surfliner commuter rail . There are two Amtrak stations in San Diego, in Old Town and the Santa Fe Depot downtown.
The city’s primary commercial airport is the San Diego International Airport, also known as Lindbergh Field. It is located along the San Diego Bay, 6.3 miles from the subject property in Pacific Beach. In addition, the city itself operates two general-aviation Transportation airports, Montgomery Field and Brown Field. confidentiality & disclaimer
The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from South Coast Commercial Inc. and it should not be made available to any other person or entity without the written consent of South Coast Commercial Inc.
By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property, please promptly return this offering memorandum to South Coast Commercial Inc. This offering memorandum has been prepared to provide summary, unverified financial and physical information to prospective purchasers, and to establish only a preliminary level of interest in the subject property.
The information contained herein is not a substitute for a thorough due diligence investigation. South Coast Commercial Inc. has not made any investigation, and makes no warranty or representation with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvements thereon, or financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property.
The information contained in this offering memorandum has been obtained from sources we believe reliable; however, South Coast Commercial Inc. has not verified, and will not verify, any of the information contained herein, nor has South Coast Commercial Inc. conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.
PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT SOUTH COAST COMMERCIAL INC. FOR MORE DETAILS. Copyright © 2021 CREOP, LLC. All Rights Reserved. EXCLUSIVE ADVISOR Cody Evans 858 729 3094 Lic #01399935 [email protected]
3405 Kenyon Street, Suite 411 San Diego, CA 92110 619 906 2110