BRANDON MICHAELS GROUP
6721
MelroseMelroseAVENUE
OFFERING MEMORANDUM PRESENTED BY: BRANDON MICHAELS Senior Managing Director of Investments Senior Director, National Retail Group Tel: (818) 212-2794 Fax: (818) 212-2710 [email protected] License: CA #01434685 www.BrandonMichaelsGroup.com 6721 MELROSE AVENUE BRANDON MICHAELS GROUP
AREA OVERVIEW
NON-ENDORSEMENT AND DISCLAIMER NOTICE
NON-ENDORSEMENTS 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, FINANCIAL ANALYSIS said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Milli- chap, 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 DE- TAILS.
DISCLAIMER
THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN AP- PRAISAL. COMPARABLES ANALYSIS This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap. All rights reserved.
OFFICES NATIONWIDE www.marcusmillichap.com 2 3 GLOBAL TOURISM DESTINATION GETTING AROUND
Melrose Avenue and it's surrounding neighborhoods are at the cultural and geographical You can tuck your car away in a hotel garage and stroll to great heart of the Los Angeles region, surrounded by must-see hotspots in every direction. restaurants, cafes, bars, nightclubs and shopping. Within the neighborhood's 1.6 square miles, you can people-watch on the Sunset Strip, sightsee on Santa Monica Boulevard, • 1.2 million visitors came to the area last year stop at a great cafe or restaurant on Melrose Ave. and shop at the gorgeous boutiques of the West Hollywood Design • $750 million dollars generated by tourism to our local economy last year District. It’s easy to sightsee… all on foot!
• 16,599 jobs supported by tourism in the area
DINING
From the Melrose avenue to the Sunset AFFLUENT NEIGHBORHOOD WHY BUY Strip, the area never seems to sleep. There are clubs to be seen, live music to DEMOGRAPHICS be heard, and coffee shops to work from. ON MELROSE Fuel up with breakfast, brunch, lunch and Median age: 39 ● dinner at a plethora of celebrity-frequented restaurants so that you can explore the Average household income within a 1 mile radius: $97,211 ● AVENUE? lively neighborhood until the wee hours of the morning. Population within a 5 mile radius: 1,054,472 ●
DEVELOPMENT ON MELROSE AVENUE WEATHER
Southern California’s persistently pleasant weather means Rare opportunity to purchase in a strong rental market. Significant amount of it’s practically always the best time to visit Los Angeles. movement and turnover in the immediate marketplace, creating an opportunity SHOPPING It’s sunny almost 300 days a year and the average high for new construction to enter the market and position the submarket for the Scores of cutting-edge labels can be found along temperature in many parts of L.A. fluctuates less than 10 future. Upon completion of surrounding developments and with continuing Melrose Avenue, from avant-garde brands to casually degrees through the year. improvements to the immediate area, the rental market will experience luxe clothing makers. Melrose Avenue is renowned significant growth and offer outstanding returns for long term investors. throughout the world as one of Los Angeles’ most walkable and unique shopping destinations. 4 5 MELROSE EXECUTIVE SUMMARY
A RARE OPPORTUNITY TO ACQUIRE A MELROSE AVENUE CREATIVE OFFICE/RETAIL BUILDING WITH DEVELOPMENT POTENTIAL IN THE HIGH-PROFILE MELROSE DISTRICT
Marcus & Millichap has been selected to exclusively market for sale 6721 Melrose Avenue- 6721 a 3,046 square foot office or retail building located on the signalized corner of Melrose Avenue and Mansfield Avenue in the highly sought-after Melrose district of Los Angeles, CA. Situated on Melrose Avenue just east of North La Brea and west of North Highland MelroseMelroseAVENUE Avenue , 6721 Melrose is ideally located in one of Southern California’s busiest shopping thoroughfares. The property offers excellent visibility with 86 Feet of frontage along Melrose Avenue on a bustling corner lot with parking in the rear. There is a large 14 x 48 single sided billboard on the property that is currently on a month to month lease, providing the potential upside in stabilizing the lease term or the ability to remove from the property if the ultimate plan is to re-develop the property.
As a result of its prime location and significant growth in the immediate area, the property is ideal for a retail, office, or creative office use. The subject property is currently vacant, allowing the maximum in flexibility of potential uses. The property is ideally situated on 7,091 square feet of land, offering the potential to re-develop the property and utilize the current C4 zoning. The property is ideally located in a Tier 1 Transit Oriented Community. There are currently 14 parking spaces in the rear of the property, and the parking can potentially be re-stripped to create additional parking. 6721 Melrose is ideally located in an enterprise zone, allowing for a multitude of potential uses including restaurant and medical. The Melrose Shopping District and it's surrounding neighborhoods are at the cultural and geographical heart of the Los Angeles 1.6 2,456 91 region, surrounded by must-see hotspots in every direction. The neighborhood is among the top destinations in the world, and this 1.6 square miles of walkable hotspots, 2,456 Businesses within a irreplaceable location benefits from high daily traffic counts north of 50,000 cars per day at the corner of Melrose Avenue and N 6721 Melrose Avenue scores restaurants, nightlife, and shopping in 1 square mile of 6721 Melrose Avenue an 91/100 on Walkscore.com Highland Avenue. West Hollywood 6 7 6721 HOLLYWOOD MelroseMelroseAVENUE DOWNTOWN
8 9 PROPERTY OVERVIEW 6721 Melrose Avenue Property Address Los Angeles, CA 90038
Price $3,400,000 FAIRFAX
Proforma CAP Rate 5.18%
Price/SF (Building) $1,116 CORNER
Price/SF (LAND) $479
Building SF 3,046
Land SF 6,970
Property Type Creative Office
Potential Use Office/Retail/Restaurant/Medical 6721
MelroseAVENUE Year Built 1953 Melrose
APN's 5524-013-022
Zoning C4-1X4 SIDE
Transit Oriented Community Tier 1
Type of Ownership Fee simple
Occupancy Vacant
Parking 14 Surface Spaces
Billboard 14' x 48' Single Sided
10 11 REAR INVESTMENT HIGHLIGHTS
IRREPLACEABLE MELROSE AVENUE LOCATION – Ideally located along a price stretch of Melrose Avenue between North La Brea and North Highland on the corner of Melrose Avenue and Mansfield Avenue
POTENTIAL DEVELOPMENT OPPORTUNITY – C4-1XL zoning within a Tier 1 Transit FAIRFAX WEST HOLLYWOOD Oriented Community allows the potential for future development. The property BEVERLY HILLS directly adjacent to 6721 Melrose is currently for sale at $2,100,000. In addition, two new development projects are currently underway in the immediate area
MULTITUDE OF POTENTIAL USES – Property is currently creative office, complete with exposed wood ceilings, concrete flooring, and inviting exterior space. Ideally located within an enterprise zone, there is the potential for additional uses, including retail, restaurant, or medical
WALKABILITY - 6721 Melrose Avenue has a score of 91/100 for walkability. Iconic retailers and trendy/hip boutiques and restaurants populate Melrose Avenue and it is a popular haven for the rich and famous
HIGH DAILY TRAFFIC COUNTS – Ideally located on the signalized corner of Melrose Avenue and Mansfield Avenue, just 1 block west of the signalized corner of Melrose Avenue and N Highland Avenue, which experiences over 50,000 vehicles per day
IDEAL OWNER USER OPPORTUNITY – Property will be delivered vacant, creating 6721 an ideal opportunity for an owner-user Buyer to occupy the property for their own MelroseAVENUE business use
MELROSE RESTAURANT ROW – The immediate area is home to multiple high-end restaurants, including Pizzarie Mozza, Osteria Mozza, Chi Spaca, Trois Mec, Petit Trois and multiple others within close proximity
12 13 PROPERTY SUMMARY
ADDRESS TRAFFIC COUNTS 6721 Melrose Avenue, Los Angeles, CA 90038 Intersection of Melrose Avenue and N Highland Avenue: 53,183 vehicles per day
SITE PARKING The subject property is located on the norheast signalized corner of Melrose Avenue and Mansfield Avenue 14 Surface Spaces are available; Ratio of 4.60/1,000 SF
SQUARE FOOTAGES The building square footage is 3,046 square feet, located on a lot size of 6,970 square feet
FRONTAGE AND ACCESS 86 feet of frontage on Melrose Avenue and 102 feet along Mansfield Avenue 6721
MelroseMelroseAVENUE ZONING 6721 Melrose Avenue is located within zoning of C4
YEAR BUILT The subject property was built in 1953
PLATPLAT MAP MAP 14 15 AREA OVERVIEW
16 17 MELROSE AVENUE TOP ATTRACTIONS
Melrose Avenue is renowned throughout the world as one of Los Angeles’ most walkable and unique shopping, dining and entertainment destinations. Downtown SUNSET STRIP Melrose encompasses the 22 blocks along Melrose Avenue that stretch from From the heights of swank hotel rooftops like the Mondrian’s SkyBar Fairfax to Highland. More than 300 alternative and independent stores offer a wide and the Tower Bar at Sunset Tower Hotel, to the glam-grunge of rock array of merchandise found nowhere else in the city. clubs like The Viper Room and Whisky a Go Go, there’s a setting to LOCATION suit your style and mood. In addition to clubs with music ranging from indie singer/songwriters to major headliners, there are iconic comedy Melrose Shopping District is bounded by Beverly Hills and West Hollywood clubs such as The Laugh Factory and the Comedy Store. The Sunset on the west, Greater Wilshire to the south, and Hollywood to the north and east. Strip isn’t just rock and roll. Spend the afternoon shopping at Sunset Plaza, which contains more than 20 stores, like Armani Exchange and CLIMATE H&M. Los Angeles has a Subtropical-semi-arid climate with year-round warm weather. The record high temperature of 111 °F was recorded September 26, ROBERTSON BOULEVARD 1963, while the record low of 24 °F was recorded on January 4, 1949. Snow Robertson Boulevard has become a haven for celebrities and is rare in Los Angeles, with the last accumulation occurring in 1949. Rainfall is sparse (only 13 inches annually), and falls mainly during winter months. paparazzi. This is partially due to a large influx of unique boutiques and designer clothing & jewelry stores such as Agnes B, Curve, Lisa ACCOMODATIONS Kline, Kitson Boutique, Williams Sonoma, Armani Exchange, Michael Melrose and surrounding neighborhoods include world-renowned hotels Kors, Ralph Lauren, Ted Baker, M·A·C, Chanel, Gypsy05, Intermix, Tory such as the Chateau Marmont, SLS Hotel, Sunset Marquis, Sunset Tower Burch, Max Azria, Beach Bunny Swimwear, and Erica Courtney, which Hotel, Sofitel LA at Beverly Hills and Mondrian Los Angeles. is a mecca for many celebrity shoppers. In addition, several popular celebrity-infused eateries are located on Robertson Boulevard, such DINING as The Ivy. From the Melrose Avenue to the Sunset Strip, the area never seems to sleep. There are clubs to be seen, live music to be heard, and coffee shops NEARBY HOT SPOTS to work from. Fuel up with breakfast, brunch, lunch and dinner at a plethora of celebrity-frequented restaurants so that you can explore the lively neighborhood until the wee hours of the morning.
SHOPPING Melrose Avenue is one of L.A.’s most famous streets, featuring a myriad of shopping. Melrose runs north of Beverly Boulevard and south of Santa Monica Boulevard. Along its "west end," Melrose Avenue is all about strolling and shopping, so bring dough and plenty of it. The street begins at Santa Monica Boulevard where the cities of Beverly Hills and West Hollywood meet, otherwise known as the intersection of posh and funky.
18 19 NEW DEVELOPMENTS 7000 MELROSE CURRENT MIXED-USE DEVELOPMENTS IN THE IMMEDIATE AREA
7000 MELROSE - MELROSE AVENUE AND LA BREA AVENUE On the southwest corner of La Brea and Melrose the site is currently occupied by a building originally constructed in the 1920’s. This building, once a remarkable SOUTHWEST CORNER OF Spanish revival building had been remodeled beyond recognition. The southeastern LA BREA AVE AND MELROSE AVE half of the block is now vacant, and used primarily for parking. The proposed plan is intended to combine both sites and to provide for 32 units of live work lofts, some affordable, over 10,000 sf of new commercial space. Both buildings are to be 6721 integrated into the total design of the block. Parking is to be provided for the entire Tthe project has occupied roof decks which are partially covered with solar panels MelroseAVENUE which provide shade and privacy.
700 HIGHLAND 7000 MELROSE
SOUTHEAST CORNER OF HIGHLAND AVE AND MELROSE AVE
SOUTHEAST CORNER OF LA BREA AVE AND MELROSE AVE
700 HIGHLAND - HIGHLAND AVENUE AND MELROSE AVENUE A gas station at Melrose and Highland Avenues has been demolished, clearing the way for the construction of a new apartment building on the corner property. The project site will yield a four story building featuring 19 apartments over 3 ground floor commercial units and its required parking. The upper levels are live work residential units who share a common open space with a swimming pool. The façade of the upper levels has been designed with an all glass skin imprinted with a supergraphic. The supergraphic frit provides for the graphic visibility from the outside while providing for both increased privacy and shade to the interior. 20 21 DEMOGRAPHICS 36,698 Total Population of Mid-Wilshire. The median age is 39. $97,211 538,155 $65,281 Average HH income within 1-m radius Daytime Population within 5-m radius Median HH income within 1-m radius 58% 42% EDUCATION MALE FEMALE
95,447 326,757 1,031,472 Owner Occupied Households Renter Occupied Households Population within a 5-m radius 14.7% 24.6% 27.6% 13.9% within 5-m radius within 5-m radius High School Associates Degree Bachelor’s Degree Grad Degree
BUSINESSES
Melrose and it's surrounding neighborhoods are home to innovative industries and a magnet for highly skilled professionals. Companies ranging from retail, tourism and nightlife, restaurants, entertainment and media, as well as arts and design are drawn to the area's creative workforce, as well as its high quality of life.
TOP EMPLOYERS • Metro • Sunset Marquis • Mondrian Hotel • IAC/CityGrid Media • London West Hollywood • Andaz West Hollywood • City of West Hollywood • Standard Hotel • Saddle Ranch Chop House 22 23 FINANCIAL ANALYSIS
24 25 FINANCIAL ANALYSIS
RENT ROLL TENANT SF BUILDING % CURRENT RENT PROFORMA RENT PROFORMA RENT /SF LEASE TYPE LEASE TERM Vacant 3,046 100% - $12,184.00 $4.00 NNN - Billboard* - - $2,000.00 $2,500.00 - - Month to Month TOTAL 3,046 100% $2,000.00 $14,684.00 $4.00 *Billboard is currently month to month. Lease can potentially be renewed at a higher rate.
PRO-FORMA OPERATING DATA OPERATING DATA PRO FORMA EXPENSE BREAKDOWN* PER YEAR PER SF Taxes @ 1.20% $40,800 $13.39 Scheduled Lease Income $176,208 Insurance $1,066 0.35 NNN Charges $59,167 Utilities $5,635 1.85 Trash $487 0.16 Effective Gross Income $235,375 Janitorial $2,285 0.75 Repairs & Maintenance $3,046 1.00 Expenses $59,167 Management $5,848 1.91 Net Operating Income $176,208 TOTAL $59,167 $19.42/$1.62 *Projected Expenses TRASH 4% 2% 1% 5%
PRICING INFO 9%
Price $3,400,000 Price/SF (Building) $1,116 10% Price/SF (Land) $479 Proforma CAP Rate 5.18% 69%
26 27 28 COMPARABLES 29 SALE COMPARABLES LEASE COMPARABLES
CLOSE OF # ADDRESS SALE PRICE CAP RATE PRICE/SF BLDG SF LAND SF ZONING # ADDRESS RENT/SF/YEAR RENT/SF/MONTH LEASE TYPE SPACE AVAILABLE ESCROW 755 N Highland Ave 1 $42.00 $3.50 NNN 4,599 Los Angeles, CA 90038 1051 N Highland Ave 1 $3,029,000 - $1,270.02 2,385 18,726 1/4/2017 LAMR1 Los Angeles, CA 90038 941-945 N Highland Ave 2 $39.00 $3.25 NNN 15,000 Los Angeles, CA 90038
604-614 N La Brea Ave 3 $48.00 $4.00 NNN 1,200 Los Angeles, CA 90036 819 N La Brea Ave 2 $4,100,000 4.18% $802.98 5,106 10,454 6/20/2018 C4-IVL Los Angeles, CA 90038 629-633 N La Brea Ave 4 $40.20 $3.35 MG 9,161 Los Angeles, CA 90036
712-716 N La Brea Ave 5 $42.00 $3.50 NNN 11,000 Los Angeles, CA 90038 843 N La Brea Ave 3 $3,500,000 - $1,129.03 3,100 10,454 1/25/2018 C4-IVL Los Angeles, CA 90038 6920 Melrose Ave 6 $54.00 $4.50 NNN 2,600 Los Angeles, CA 90038
7126 Melrose Ave 7 $27.00 $2.25 NNN 4,800 Los Angeles, CA 90046 6621 Melrose Loft, Unit 2 4 $1,850,000 - $880.95 25,000 6,534 4/30/2018 LAC4 Los Angeles, CA 90038 7164-7168 Melrose Ave 8 $41.40 $3.45 MG 475 Los Angeles, CA 90046
7257-7257 1/2 Melrose Ave 9 $60.00 $5.00 NNN 1,200 Los Angeles, CA 90046 6700 Melrose Ave 5 $4,200,000 - $1,223.42 3,433 8,712 FOR SALE LAC2 Los Angeles, CA 90038 1009-1023 N Orange Dr 10 $46.20 $3.85 MG 4,340 Los Angeles, CA 90038
6910-6912 Santa Monica Blvd 11 $39.00 $3.25 NNN 6,666 Los Angeles, CA 90038 911 N Orange Dr 6 $15,500,000 - $911.76 17,000 29,621 12/20/2017 LAMR1 Los Angeles, CA 90038 1040 N Sycamore Ave 12 $54.00 $4.50 NNN 4,309 Hollywood, CA 90038 AVERAGE $5,363,167 $1,036.36 9,337 14,084 AVERAGE $44.40 $3.70 5,446 30 31 BRANDON MICHAELS GROUP
6721
MelroseAVENUE Melrose BRANDON MICHAELS Senior Managing Director of Investments Senior Director, National Retail Group Tel: (818) 212-2794 Fax: (818) 212-2710 [email protected] License: CA #01434685 www.BrandonMichaelsGroup.com