MONARCH COURT APARTMENTS 2230 Alice Street Santa Cruz, CA NON - ENDORSEMENT and DISCLAIMER NOTICE
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Offering Memorandum EXT1 MONARCH COURT APARTMENTS 2230 Alice Street Santa Cruz, CA NON - ENDORSEMENT AND DISCLAIMER NOTICE Confidentiality and Disclaimer The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified 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. Marcus & Millichap 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, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the 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 Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap 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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved. Non-Endorsement Notice Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. MONARCH COURT APARTMENTS Santa Cruz, CA ACT ID ZAB0010159 2 MONARCH COURT APARTMENTS TABLE OF CONTENTS SECTION INVESTMENT OVERVIEW 01 Offering Summary Property Photos Aerial Photos, Regional and Local Maps Discover Santa Cruz FINANCIAL ANALYSIS 02 Rent Roll Summary Operating Statement Pricing Detail MARKET COMPARABLES 03 Sales Comparables Rent Comparables MARKET OVERVIEW 04 Demographic Analysis 3 Investment Overview 2230 ALICE ST OFFERING SUMMARY PROPERTY SUMMARY THE OFFERING PROPOSED FINANCING Price $2,400,000 First Trust Deed Loan Amount $1,375,200 Property Address 2230 Alice St, Santa Cruz, CA Loan Type Proposed New Assessors Parcel Number 028-072-01 Interest Rate 3.6% Zoning R4-M Amortization 30 Years SITE DESCRIPTION Loan Term 10 Years Number of Units 6 Loan to Value 57% Number of Buildings 3 Debt Coverage Ratio 1.38 Number of Stories 1 & 2 Stories Year Built/Renovated 1955 / 2019 Rentable Square Feet 4,400 Lot Size 0.44 acre(s) Type of Ownership Fee Simple Landscaping New Zero-Scape Topography Low-Hillside CONSTRUCTION Foundation Concrete Slab Framing Wood Frame Exterior Stucco Parking Surface Freshly Slurried and Striped Asphalt Roof TPO and Composition Shingle 5 OFFERING SUMMARY INVESTMENT OVERVIEW Nestled in the Live Oak neighborhood of Santa Cruz, between the Santa Cruz Harbor and Pleasure Point, near the Corcoran Lagoon and KSCO Radio. Monarch Court sits on a spacious corner lot just 3 blocks from Corcoran and Moe’s beaches, 3 blocks from Felt Street Park (with a large playground, community gardens, picnic/bbq area, and skateboard park), and 2 blocks from both Cypress High School and Del Mar Elementary. Within 5 miles is Cabrillo Community College offering associate degrees and certificates in more than 70 fields of study to its 15,000 students. Monarch Court is located in unincorporated Santa Cruz County, and therefore is not subject to the more restrictive local rent control, providing investors the more flexible California limits of 5% plus CPI index (3.34% currently / 8.4% annually). Monarch Court includes (1) studio, and (5) 2 bedroom / 1 bathroom apartments that offer residents single story living in individual buildings with private entrances, large green spaces, reserved parking, spacious living and natural light. The apartment homes have been strategically designed with limited shared walls, offering residents the feel of private spacious, independent living areas and backyards for outdoor living and entertaining. Extensive interior renovations to 3 units include new vinyl wood plank flooring, new shaker style kitchen cabinets, quartz countertops, stainless steel appliance package, new interior lighting, upgraded fixtures and finishes, new window coverings, and new custom interior paint. Recent exterior renovations include eco-friendly landscaping with artificial grass, succulents and LED lighting. The welcoming curb appeal is enhanced by a new fence and freshly slurried asphalt driveway. Community upgrades include new secured mailboxes and a redesigned laundry care center with SMART machines. Santa Cruz offers a unique combination peaceful serenity and the allure of a beach town, with the convenience and easy accessibility to businesses and schools. This asset is centrally located to many Santa Cruz destinations, including Seabright State Beach, Downtown Santa Cruz, Capitola, Santa Cruz Beach Boardwalk, Rio Del Mar and the Santa Cruz Harbor with hundreds of shopping, dining and entertainment options. Santa Cruz Harbor is home to Stagnaros Charter Boats, the ever-popular Chardonnay Sailing Charters with its pair of Santa Cruz 70 sailing yachts and the iconic Crow's Nest. Santa Cruz dining destinations for more than 50 years, The Crows Nest is perched where the harbor meets the sea and offers award-winning cuisine, spirits and live music, coupled with unbeatable, breathtaking panoramic views of Santa Cruz Harbor, lighthouse and Wharf; and Shadowbrook, located along the Soquel Creek and steeped in history. Exciting area improvements include the Santa Cruz Rail & Trail, a continuous off-street route to many popular locations between Watsonville and Davenport. The already-completed transformation to the San Lorenzo River Bridge replacing the current 4-foot wide walkway with a 10-foot wide multi-use trail, provides miles of direct bike/pedestrian access between the Santa Cruz Beach Boardwalk and Santa Cruz neighborhoods. INVESTMENT HIGHLIGHTS ▪ 3 blocks from the ocean ▪ Large corner lot .44 acre ▪ Immediate upside in rental income ▪ Tucked-under parking for on-site tenants ▪ Appealing unit mix consisting of (5) 2br/1ba and (1) Studio ▪ On-Site laundry facility providing additional income MONARCH COURT APARTMENTS OFFERING SUMMARY EXECUTIVE SUMMARY VITAL DATA Price $2,400,000 CURRENT YEAR 1 Down Payment 42.7% / $1,024,800 CAP Rate 4.3% 4.59% MAJOR EMPLOYERS Loan Amount $1,375,200 GRM 15.06 14.34 Net Operating Loan Type Proposed New $103,168 $110,221 Income EMPLOYER # OF EMPLOYEES Net Cash Flow After Interest Rate / Amortization 3.6% / 30 Years 2.75% / $28,140 3.43% / $35,193 Debt Service Palo Alto Med Fndtion STA Cruz 2,000 Price/Unit $400,000 Total Return 5.29% / $54,164 6.07% / $62,169 Dignity Health 1,512 Price/SF $705.88 Chancellors Office 1,500 Number of Units 6 Santa Cruz County of 1,041 Rentable Square Feet 3,400 CABRILLO COLLEGE BOOKSTORE 980 Year Built / Renovated 1955 / 2020 Sutter Health 776 Lot Size 0.44 acre(s) Kwala Tzu Inc 700 Human Services Department 516 Human Resources 500 UNIT MIX Smartrevenue 492 NUMBER APPROX. UNIT TYPE OF UNITS SQUARE FEET Safeway 455 1 Studio 400 University Cal Santa Cruz 437 5 2 Bedroom 600 6 Total 3,400 DEMOGRAPHICS 1-Miles 3-Miles 5-Miles 2018 Estimate Pop 18,200 81,051 126,209 2010 Census Pop 17,538 77,791 120,220 2018 Estimate HH 7,850 34,371 50,329 2010 Census HH 7,466 32,654 47,786 Median HH Income $60,064 $63,858 $74,657 Per Capita Income $40,185 $42,523 $44,599 Average HH Income $92,579 $98,715 $109,340 #7 OFFERING SUMMARY DETAILED CAPITAL IMPROVEMENTS Since 2019, Monarch Court Apartments have received the following upgrades: Interior Unit Renovation (3 of 6 units) $29,880 Unit 2234A: New kitchen cabinets, quartz countertops, new stainless appliances, plank flooring, LED lighting, hardware, window coverings Unit 2234B: New cabinet doors, quartz countertops, new stainless appliances, plank flooring, LED lighting, hardware, window covering Unit 2236: New cabinet doors, quartz countertops, new stainless appliances, plank flooring, LED lighting, hardware, window coverings Exterior Replaced studio roof $4,500 Electrical: Panel upgrade 2234 A/B/C, rewired exterior house lights, carports, laundry room and $5,000 upgraded all exterior lights to LED Asphalt repairs, slurry and seal coat $12,650 Wood repairs – new fence on Corcoran Avenue, siding repairs $12,550 Zero-Scape Landscape upgrades – tree trimming, drip system in front yard, succulents and artificial $12,500 lawn Replaced both decks for unit 2234A. Replaced railings for entire property. $17,025 Laundry room upgrades - WASH vendor installed new SMART machines $1,000 New exterior paint $13,000 Replaced 2 electric hot water heaters with new gas water heaters: Unit 2236, and shared heater for $4,000 units 2234 A/B Additional property maintenance $13,200 TOTAL CAPITAL IMPROVEMENTS $108,105 Residents of Monarch Court appreciate the best of both worlds ~ The peaceful serenity and allure of a beach town, while providing the convenience and easy accessibility to business.