2450 S B Street Stockton, Ca 7 Houses on One Parcel

2450 S B STREET STOCKTON, CA 7 HOUSES ON ONE PARCEL

2450 S B STREET 7 HOUSES ON ONE PARCEL http://arausa.listinglab.com/2450SBSt CONFIDENTIALITY, TERMS, AND CONDITIONS:

The information contained herein is strictly confidential, furnished solely for the purpose of considering the acquisition of the property described herein and is not to be used for any other purpose or made available to any other person without the expressed written consent of ARA Pacific.

It has been obtained from the Seller and may include other sources believed to be reliable, but no representation is being made with regard to its accuracy or completeness.

Prospective investors should undertake their own investigations and reach their own conclusions without reliance upon the material contained herein. Neither the Seller nor the Agent nor any of their respective officers, agents or principals has made or will make any representations or warranties, expressed or implied, as to the accuracy or completeness of the Offering Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of the Offering Memorandum or its contents.

Analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the prospective purchaser.

The Seller and Agent expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the Property and/or terminate discussions with any entity at any time with or without notice.

The Seller shall have no legal commitment or obligations to any entity reviewing the Offering Memorandum or making an offer to purchase the Property unless and until such offer for the Property is approved by the Seller, and any conditions to the Buyer’s obligations there under have been satisfied or waived. CONTACT INFORMATION

MARC ANDENMATTEN I SACRAMENTO OFFICE ASSOCIATE 555 University Ave License CA: 01956176 Suite 215 [email protected] Sacramento, CA 95825 (415) 430-1033 SAN FRANCISCO OFFICE NATE OLESON I 655 Montgomery Street MANAGING DIRECTOR Suite 1705 License CA: 01467941 San Francisco, CA 94111 [email protected] (916) 599-6523

2450 S B STREET 7 HOUSES ON ONE PARCEL TABLE OF CONTENTS

EXECUTIVE SUMMARY 5 The Offering 6 Investment Highlights 6 PROPERTY DETAILS 8 Property Information 9 & 10 RENTAL MARKET STUDY 11 Rent Comparables Study 12 Map of Comparables 13 FINANCIAL ANALYSIS 14 Rent Roll 15 Historical & Pro Forma Underwriting 16 REGIONAL OVERVIEW 17 Economy 20 Transportation 20 Entertainment and Recreation 22

CONTACT INFORMATION

2450 S B STREET 7 HOUSES ON ONE PARCEL Downtown Stockton

Stockton Arena Rancho San Miguel Minimart All Good Diamond Pallets Inc Foods

San Joaquin County Fairground E 8th Street Hamilton Van Buren Elementary

Elementary S B Street B S 2450 S B STREET 11th Street

St Linus Catholic Church Kennedy Community Center

2450 S B STREET 7 HOUSES ON ONE PARCEL Downtown Stockton EXECUTIVE

Stockton SUMMARY Arena Rancho San Miguel Minimart All Good Diamond Pallets Inc Foods

San Joaquin County Fairground E 8th Street Hamilton Van Buren Elementary

Elementary S B Street B S 2450 S B STREET 11th Street

St Linus Catholic Church Kennedy Community Center

2450 S B STREET 7 HOUSES ON ONE PARCEL THE OFFERING INVESTMENT HIGHLIGHTS • Asset Highlights - 2450 S B Street in Stockton, CA are seven houses located on one parcel. There ARA Newmark is pleased to provide are (4) 2x1s and (3) 3x1s. All the units feature washer and dryer hookups, individual water and the following Offering Memorandum electric meters. Approximately half of the units have been upgraded with tile flooring in the kitchen. pertaining to the exclusive marketing The current owner only pays for insurance, taxes and turnovers. Tenants are direct billed and sale of 2450 S B Street, seven houses for sewer and trash and they are also responsible for landscaping and appliances. There is located on one parcel in Stockton. potential to subdivide the homes as well.

Offering Price • Location Highlights: • 1 block to Hamilton Elementary School and 2 blocks to Van Buren Elementary School Price: $675,000 • 1/2 mile to the Kennedy Community Center Price Per Unit: $96,429 • Less than a mile to the San Joaquin County Fairgrounds Cap (Current /Market): 7.0% / 7.8% GRM (Current / Market): 10.1 / 9.3 • Revitalized downtown core - Downtown Stockton has recently completed a major renovation and revitalization. New developments in the Downtown core along Stockton’s waterway include a new

indoor sports & entertainment arena, a new baseball stadium as well as numerous new hotels, and Terms of Sale retail centers. Downtown revitalization efforts have helped Stockton attract four (4) professional Delivered free2450 and S B clear. St sports teams to the city. These include: Stockton Thunder (hockey), Stockton Cougars (soccer), 2450 S B St, Stockton, CA VALUATION SUMMARY 7 Units Stockton Lightning (arena football) and Stockton Ports (minor league baseball). Additionally,VALUATION the Downtown core is home to the renowned Stockton Symphony. Residents at Northwood are just a PROPERTY INFORMATION 10-minute drivePRICING to Downtown Stockton. PRO FORMA ASSUMPTIONS CURRENT RENTS MARKET RENTS Address 2450 S B St •Suggested Significant Net Price barriers to entry$675,000 for new multifamily development - The city of Stockton presents Stockton, CA Price Per Unit $96,429 Income Units 7 Priceseveral Per SF barriers to entry for new $127multifamilyGPR development. Factors leading to this$66,600 include a dwindling$72,600 Net Rentable SF 5,300 supply of properly zoned medium toVacancy/Losses high-density residential land, hefty increases($3,330) in construction($3,630) Avg Unit Size 757 CURRENTcosts RENTS & development impact fees andOther less Income attractive financing. Currently, there$0 are less than$0 300 Rent Roll October 2015 Cap.conventional Rate multifamily units in7.0% the developmentTotal Income pipeline for Stockton. As$63,270 the demand$68,970 for well- GRM 10.1 Expenses located, luxury rental housing in thisOperating submarket Expenses outpaces supply, owners of$14,898 existing communities$14,898 MARKETwill RENTS realize strong property occupancies,Replacement above Reservesaverage rent growth and steady$1,400 increases in$1,400 value. Cap. Rate 7.8% Total Expenses $16,298 $16,298 GRM 9.3 Net Operating Income $46,972 $52,672

UNIT MIX & RENTAL SUMMARY 3 BR x 1 UNITS AVG SF* % MIX TOTAL APPROX SF AVG CONTRACT RENT PER SF AVG MKT RENT PER SF BA 2 BR x 1 BA 43% 57% 2 BR x 1 BA 4 650 57% 2,600 $700 $1.08 $800 $1.23 3 BR x 1 BA 3 900 43% 2,700 $917 $1.02 $950 $1.06 TOTAL / AVERAGE 7 757 100% 5,300 $793 $1.05 $864 $1.14 *SF has been estimated VALUE MATRIX 6 LIST LIKELY LOW SUGGESTED VALUE $675,000 $595,000 $535,000 PRICE PER UNIT $96,429 $85,000 $76,429 PRICE PER SF $127 $112 $101 CURRENT RENTS CAP RATE - CURRENT 7.0% 8.1% 9.1% GRM - CURRENT 10.1 8.9 8.0 MARKET RENTS CAP RATE - MARKET 7.8% 9.0% 10.2% GRM - MARKET 9.3 8.2 7.4 S B STREET

Mutual Housing’s New Harmony - 69 affordable units

S LAUREL STREET

2450 S B STREET 7 HOUSES ON ONE PARCEL PROPERTY DETAILS

2450 S B STREET 7 HOUSES ON ONE PARCEL PROPERTY INFORMATION

Address 2450 S B Street, Stockton, CA

Intersection S B Street and 11th St

County San Joaquin

Year Built N/A

Number of Units 7 Houses

Site Size 0.96 acres

Parcel Number 097-210-290-0000

Stories 1

Parking ~20 Parking Spaces

Parking Ratio 2+ Parking Spaces Per Unit

2450 S B STREET 7 HOUSES ON ONE PARCEL PROPERTY INFORMATION

CONSTRUCTION Roof Composition Shingle Exterior Walls Stucco/Wood Siding Paving Asphalt MECHANICAL Cooling / Heating Central Heat and Air Waste removal bins are kept in the backyard/ Waste Removal driveway UTILITIES Electricity PG&E, Paid for by tenants Gas PG&E, Paid for by tenants Trash Direct billed to tenants

Water Direct billed to tenants

Sewer Direct billed to tenants

2450 S B STREET 7 HOUSES ON ONE PARCEL RENTAL MARKET STUDY

2450 S B STREET 7 HOUSES ON ONE PARCEL RENT SURVEY COMPARABLES 2450 S B St 2450 S B St, Stockton, CA RENT COMPARABLES 7 Units

RENT COMPARABLES

Comp # Location Unit Type Rent Notes 1 406 E 5th St 2 BR x 1 BA $750 850 square feet, wall furnace and A/C, washer/dryer hookup. 2 5207 E Mariposa Rd 2 BR x 1 BA $800 Tiled counter tops, tile bathroom, large yard. 3 2618 Odell Ave 2 BR x 2 BA $900 Remodeled kitchen, washer/dryer hookup, large yard. Comp Totals/Avgs. 2 BR x 1 BA $817 Subject 2450 S B St 2 BR x 1 BA $800 4 1127 N Airport Way 3 BR x 2 BA $1,250 Laundry room, new paint, new flooring, 1,476 sq ft, large back yard. 5 3470 E Lafayette St 3 BR x 1.5 BA $1,100 New paint, carpet, flooring, 2 car garage, w/d included, dual pane windows. Comp Totals/Avgs. 3 BR x 1 BA $1,175 Subject 2450 S B St 3 BR x 1 BA $900

S 1 2 3 1 2 3 4

4 4 5 6

5 7 8

CONFIDENTIAL DISPOSITION PROPOSAL RENT COMPARABLES MAP

Comparables 1. 406 E. 5th St 2. 5207 E Mariposa Rd 5 3. 2618 Odell Ave 4. 1127 N Aiport Way 5. 3470 E Lafayette St

1 S

2 3

CONFIDENTIAL DISPOSITION PROPOSAL FINANCIAL ANALYSIS

2450 S B STREET 7 HOUSES ON ONE PARCEL 2450 S B St RENT ROLL 2450 S B St, Stockton, CA 7 Units RENT ROLL

Current Asking Market Unit Unit Type Sq Ft* Actual Rent Rent Rent 2450 2 BR x 1 BA 650 $700 $700 $800 2448 2 BR x 1 BA 650 $700 $700 $800 2440 2 BR x 1 BA 650 $700 $700 $800 2442 2 BR x 1 BA 650 $700 $700 $800 2501 3 BR x 1 BA 900 $950 $950 $950 2500 3 BR x 1 BA 900 $900 $900 $950 2504 3 BR x 1 BA 900 $900 $900 $950 AVERAGE 757 $775 $793 $850 TOTAL 5,300 $5,550 $5,550 $6,050 *SF has been estimated

2450 S B STREET 7 HOUSES ON ONE PARCEL 2450 S B St 2450 S B St, Stockton, CA VALUATION SUMMARY 7 Units VALUATION

PROPERTY INFORMATION PRICING PRO FORMA ASSUMPTIONS CURRENT RENTS MARKET RENTS Address 2450 S B St Suggested Net Price $675,000 Stockton, CA Price Per Unit $96,429 Income Units 7 Price Per SF $127 GPR $66,600 $72,600 Net Rentable SF 5,300 Vacancy/Losses ($3,330) ($3,630) Avg Unit Size 757 CURRENT RENTS Other Income $0 $0 Rent Roll October 2015 Cap. Rate 7.0% Total Income $63,270 $68,970 GRM 10.1 Expenses Operating Expenses $14,898 $14,898 MARKET RENTS Replacement Reserves $1,400 $1,400 Cap. Rate 7.8% Total Expenses $16,298 $16,298 GRM 9.3 Net Operating Income $46,972 $52,672

UNIT MIX & RENTAL SUMMARY 3 BR x 1 UNITS AVG SF* % MIX TOTAL APPROX SF AVG CONTRACT RENT PER SF AVG MKT RENT PER SF UNDERWRITING BA 2 BR x 1 BA 2450 S 43%B St 57% 2 BR x 1 BA 4 650 57% 2,600 $700 $1.08UNDERWRITING$800 $1.23 2450 S B St, Stockton, CA 3 BR x 1 BA 3 900 43% 2,700 $917 $1.02 $950 $1.06 7 Units TOTAL / AVERAGE 7 757 100% 5,300 $793 $1.05 $864 VALUATION$1.14 *SF has been estimated VALUE MATRIX LIST LIKELY LOW SUGGESTED VALUE $675,000 $595,000 $535,000 PRICE PERPRO UNIT FORMA -CURRENT$96,429 RENTS PRO$85,000 FORMA -MARKET $76,429RENTS PRICE PER SF $127 $112 $101 CURRENT RENTS ACTUAL PER UNIT PER MONTH ACTUAL PER UNIT PER MONTH CAP RATE - CURRENT 7.0% 8.1% 9.1% INCOME GRM - CURRENT 10.1 8.9 8.0 MARKET RENTS GROSS POTENTIAL RENT $66,600 % GPR $9,514 $5,550 $72,600 % GPR $10,371 $6,050 CAP RATE - MARKET 7.8% 9.0% 10.2% Less: VACANCY LOSS GRM - MARKET($3,330) -5.0% ($476) 9.3 ($278) ($3,630)8.2 -5.0% ($519)7.4 ($303) NET RENTAL INCOME $63,270 $9,039 $5,273 $68,970 $9,853 $5,748 TOTAL INCOME $63,270 $9,039 $5,273 $68,970 $9,853 $5,748

EXPENSES ADMINISTRATIVE $1,050 $150 $88 $1,050 $150 $88 TURNOVER $1,750 $250 $146 $1,750 $250 $146 REPAIRS & MAINTENANCE $1,750 $250 $146 $1,750 $250 $146 TOTAL CONTROLLABLE EXPENSES $4,550 $650 $379 $4,550 $650 $379 INSURANCE $1,400 $200 $117 $1,400 $200 $117 REAL ESTATE TAXES $8,446 1.25% $1,207 $704 $8,446 1.25% $1,207 $704 SPECIAL ASSESSMENTS $502 $72 $42 $502 $72 $42 TOTAL OPERATING EXPENSES $14,898 $2,128 $1,242 $14,898 $2,128 $1,242 CAPEX / RESERVES $1,400 $200 $117 $1,400 $200 $117 TOTAL EXPENSES $16,298 $2,328 $1,358 $16,298 $2,328 $1,358

NOI AFTER RESERVES $46,972 $6,710 $3,914 $52,672 $7,525 $4,389

VALUATION SUMMARY PRO FORMA -CURRENT RENTS PRO FORMA -MARKET RENTS

LIST PRICE $675,000 $675,000 PRICE PER UNIT $96,429 $96,429 PRICE PER S.F. $127 $127 CAP. RATE 7.0% 7.8% GROSS RENT MULTIPLIER 10.1 9.3 16

2450 S B STREET 7 HOUSES ON ONE PARCEL Population The city of Stockton is located in San Joaquin County, about 85 miles east of San Francisco. It is located along the San Joaquin Delta which connects the San Francisco Bay and the Sacramento and San Joaquin Rivers. Communities surrounding Stockton include Lodi (to the REGIONAL north), Manteca (to the south), and Tracy (to the southwest). The city of Stockton is currently the 13th largest city in California with a population of roughly OVERVIEW 280,000 residents in the Stockton MSA. Stockton is the seat of San Joaquin County, the fifth largest agricultural county in the United States and the number one producer statewide of asparagus. With its comfortable and affordable California lifestyle, enriched by the pleasures of metropolitan living without the congestion and expense, Stockton is the ideal location to live, work and play. Over the last decade, its population increased by an impressive 19%, ranking Stockton as one of the fastest growing cities in California.

* Lincoln Center * Stockton Waterfront

2450 S B STREET 7 HOUSES ON ONE PARCEL S B STREET 11th STREET

Mutual Housing’s New Harmony - 69 affordable units S LAUREL STREET

2450 S B STREET 7 HOUSES ON ONE PARCEL Folsom Healdsburg Lake Charmichael El Dorado Callstoga Berryessa SACRAMENTO 505 113 Rancho Hills Cordova Windsor NN n Winters Davis West Russia St Helena 128 Sacramento SANTA 29 116 128 16 ROSA 12 Dixon 99 Florin Clarksburg Sebastopol YountvilleNapa River Glen Ellen Elk Grove 121 Vacaville Bodega Rohnert Park Cosumnes River 113 5 Cotati 80 104 JACKSON 101 Sonoma FAIRFIELD Courtland Locke Petaluma NAPA 116 Galt 29 Suisun City Walnut Grove 88 1 121 12 Point Reyes 680 Suisun MokelumneLockeford River Station to Lodi n Novato 37 Bay e Inverness San Vallejo am Sacr 160 88 Olema Pablo Benicia 2450 S B ST. Bay Pittsburg Pinole 4 Antioch 99 Linden Concord STOCKTON SANSAN RAFAELRAFAEL MARTINEZ Clayton 580 Brentwood Mill Valley El Cerrito Walnut Creek French 4 Lafayette 4 Tiburon Berkeley 24 Camp Mt. Diablo SP Clifton 80 OAKLAND Diablo Court 5 Manteca San Francisco Bay 680 Forebay SAN FRANCISCO 120 San Leandro San Ramon Alameda 205 Ripon Daly City Dublin TRACY Hayward 580 Livermore Salida South San Francisco Pleasanton 19 580 132 Paci ca 101 880 92 238 84 2450 S B STREET San Mateo Fremont 7 HOUSES ON ONE PARCEL 84 Westley Redwood Palo Calaveras Half Moon Bay 92 City Alto Res Milpitas 280 237 Sunnyvale SAN JOSE San Gregorio 5 35 130 84 Cupertino 85 1 Campbell Pescadero REGIONAL ECONOMY Employment & Economic Growth Stockton is home to a diverse labor pool contributing greatly to the city’s overall economic success. With an affordable wage structure, it presents a distinct hiring opportunity for prospective employers. The City has fourteen fully improved industrial and business parks. Stockton’s major employers are highlighted in the chart below:

With an eye toward the future, the City of Stockton is leveraging its central location midway between San Francisco and Sacramento as well as its shipping port to diversify its local economy and attract new businesses - especially those focused on renewable energy. The Port of Stockton is one of the largest receivers of wind turbines in the world. With approximately 2,000-acres of dedicated land, Stockton offers one the country’s best locations to tap renewable wind and solar energy. The Port is also home to bio-diesel and ethanol processing plants. The City of Stockton, the Port and local Universities have recently created a partnership and policies to further develop green sustainable industry in the city. Numerous new jobs are anticipated as a result of this partnership. Additionally the city and the State of California are offering tax savings and local incentives to attract new companies to the area.

Education Stockton is home to several well-known higher educational institutions. These include the University of the Pacific, California State University Stanislaus-Stockton, San Joaquin Delta Major Employers in Stockton # Employees Community College and Humphreys College and School of Law. The University of the St. Joseph’s Medical Center 2,800 City of Stockton 1,683 Pacific enrolls approximately 6,700 students in three Northern California campuses. The Dameron Hospital 1,200 central campus in Stockton includes undergraduate and graduate programs as well as a Kaiser Permanente 1,060 school of Pharmacy and Health Studies. The two satellite campuses are Pacific McGeorge University of the Pacific 1,000 School of Law in Sacramento, California as well as the Arthur A. Dugoni School of Dentistry Diamond Walnut 1,000 in San Francisco, California. Pacific Gas & Electric 879 Washington Mutual 650 San Joaquin Delta College 650 The Grupe Company 500 AT&T 500

2450 S B STREET 7 HOUSES ON ONE PARCEL ECONOMIC OVERVIEW Transportation An uncongested highway system connects Stockton to all major California markets. The city is accessible to the San Francisco Bay Area via Highway 4 as well as Interstates 205 & 580. North and south travel in Stockton is primarily served by Interstate 5 and Highway 99.

Interstate 5 also connects the United States to Mexico and Canada with Highway 99 being the main highway through the Central Valley, linking major valley cities. Stockton is also linked to the rest of the continent through an extensive network of railways. The ACE Train (Altamont Commuter Express) as well as Union Pacific and Amtrak have stops in Stockton.

Shipping is served by the Port of Stockton. The Port of Stockton is the *Wind Turbines in Stockton third largest landholder port in California, has a Foreign Trade Zone designation and a deep water channel that has an average depth of and liquid bulk materials shipped world-wide. Located on 35 feet. The Port has berthing space for 17 vessels and more than 1.1 the Stockton Deepwater Channel, the Port of Stockton is million square feet of dockside transit sheds. There is an additional a major transportation hub encompassing roughly 2000 7.7 million square feet of warehousing available. The Port of Stockton acres. provides first class warehouse storage and handling facilities for dry Stockton is also accessible by air at the Stockton Metropolitan Airport, a major air cargo and agricultural goods export center for Northern and Central California. The airport’s central location provides easy access to the Bay Area and Sacramento markets. In addition to the air cargo capabilities, the airport offers direct flights to Las Vegas through the carrier Allegiant Air. With five flights weekly, Allegiant Air is a convenient travel alternative to Bay Area and Sacramento Airports. Public transportation is

*Stockton Waterfront provided by the San Joaquin Regional Transit District offering connections throughout the city and linking Stockton with Lodi, Tracy, Manteca and Lathrop among others. The Transit District has constructed a new transit center in the heart of Downtown Stockton. 2450 S B STREET 7 HOUSES ON ONE PARCEL Entertainment and Recreation

The City of Stockton has begun construction on a new marina on the downtown waterfront. When complete the project will include guest/day docks, a dry storage facility, full service slips and other amenities to attract local residents and visitors. The Port of Stockton offers direct access to the Delta, offering thousands of miles of waterways for water skiing, sailing and other water activities. For sports enthusiasts, the city of Stockton hosts four professional sports teams: the Stockton Ports Minor Baseball team, the Stockton Thunder Minor League Hockey team, the California Cougars Major Indoor League Soccer team and the

Stockton Lightning Arena Football team. All four teams are *Downtown Stockton hosted in the newly developed Stockton Events Center which includes the Stockton Arena, Ballpark and Sheraton Hotel. Stockton has two malls to serve the residents needs: The Arena includes 10,000 seats, 220,000 square feet, 500 Weberstown Mall and Sherwood Mall. Sherwood Mall club seats and 5,000 square feet of exhibition space. Other recently underwent major renovations including a 25,000 notable attractions in Stockton include the Stockton Symphony square foot expansion. Both malls are anchored by several and Opera Company, the 16-screen City Centre Cinemas, the large department stores, including Dillard’s, Macy’s, JC Weber Point Events Center, the Bob Hope Theatre, The Haggin Penney’s, Gottschalk’s and Sears. They also have a host of Museum, the Children’s Museum of Stockton and the Oak specialty stores such as Best Buy, The Disney Store, Pac-Sun, Park Ice and Tennis Center. There are many opportunities to Aeropostal, The Gap, Hallmark, Talbot’s, American Eagle and enjoy theater, music, dance and other entertainment options Barnes & Noble to name a few. throughout the year.

2450 S B STREET 7 HOUSES ON ONE PARCEL More information is available on our website at: http://arausa.listinglab.com/2450SBSt

MARC ANDENMATTEN I ASSOCIATE SACRAMENTO OFFICE License CA: 01956176 555 University Ave, Suite 215 [email protected] Sacramento, CA 95825 (415) 430-1033 SAN FRANCISCO OFFICE NATE OLESON I MANAGING DIRECTOR 655 Montgomery Street, Suite 1705 License CA: 01467941 San Francisco, CA 94111 [email protected] (916) 599-6523