1066 Appian Lane

OFFERING MEMORANDUM 1066 APPIAN LANE

FOUR UNIT APARTMENT BUILDING IN SAN JOSE, CA NON-ENDORSEMENT & DISCLAIMER NOTICE

CONFIDENTIALITY & 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. Activity ID: ZAA0010902

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OFFICES THROUGHOUT THE U.S. AND CANADA www.marcusmillichap.com EXCLUSIVELY LISTED BY

RAY RODRIGUEZ TONY ZIZZO SHANE PIZZO Vice President Investments Investment Associate Investment Associate Palo Alto Palo Alto Palo Alto Direct: (650) 391.1781 Direct: (650) 391.1758 Direct: (650) 391.1820 [email protected] [email protected] [email protected] License: CA 01999734 License: CA 01962093 License: CA 01964516

1066 APPIAN LN SAN JOSE, CA TABLE OF CONTENTS

EXECUTIVE SUMMARY 1 PROPERTY DESCRIPTION 5 FINANCIAL ANALYSIS 15 SALES COMPARABLES 23 RENT COMPARABLES 31 MARKET OVERVIEW 37 EXECUTIVE SUMMARY

LOCATION HIGHLIGHTS

5 miles from the new Berryessa BART station

3 miles to the Google Village and Diridon Station development

2 miles to San Jose State University

2 miles to San Jose Municipal Stadium, home of the San Jose Giants and CEFCU Stadium, home of the San Jose State Spartans

Next door to McKinley Elementary School

1 mile to the Little Portugal Gateway development

1 THE OFFERING

Marcus & Millichap has been selected to exclusively market for sale 1066 Appian Lane, a fantastic, recently updated, fourplex located in San Jose, the heart of the Silicon Valley.

The property sits on just under 6,000 square feet of low maintenance land and was originally constructed in 1961. The property boasts just over 3,300 square feet of living space, which has been recently updated by the current property owner. The unit mix consists of Four (4) two- bedroom/one- bathroom units. 1066 Appian is nestled on a tree lined street that leads up to McKinley Elementary and sits just outside the eastern border of the rapidly expanding Downtown San Jose corridor. The property offers access to the countries most expansive employment market and at the same time provides residents with a quiet, suburban feel.

San Jose is the third-largest city by population in California, tenth-largest by population in the United States and the county seat of Santa Clara County. It is the largest city within the Bay Area as well as the largest city in Northern California. The large concentration of high technology engineering, computer and microprocessor companies around San Jose has led the area to be known as the Silicon Valley. As the largest city in the valley, San Jose has billed itself as The Capital of the Silicon Valley. San Jose is now considered to be a global city and notable for its affluence and high cost of living. The U.S. Census Bureau estimated San Jose’s population to be 1,035,317 as of July 1, 2018.

2 OFFERING SUMMARY

Total Price Total $1,299,000 4 Units

DOWN PAYMENT: 100% $1,299,000 ADDRESS: 1066 APPIAN LANE, SAN JOSE CA BUILDING SQUARE FEET: 3,328 LOT SIZE: 0.14 ACRES

3 4 PROPERTY DESCRIPTION

5 PRICING DETAIL

Purchase Price 1,299,000 VITAL DATA CURRENT PROFORMA Down Payment 30%/$389,700 Gross Income $82,411 $97,776 Loan Amount $909,300.00 Net Operating Income $54,562 $69,927 Net Income $54,562 CAP Rate 4.20% 5.38% Debt Service Monthly / Annual $4276/$51,310 GRM 15.29 12.89 Principal Paydown Year 1 $16,364 Return on Equity 4.20% Number of Units 4 Loan Interest Rate 3.875% Acreage 0.14 Acres *This is a loan quote example, many financing options Total Square Footage 3,328 SF are available. Please contact agent for more details.

UNIT TYPE # OF UNITS SCHEDULED RENTS MARKET RENTS 2BR/1BA 4 $1,770 $2,100

6 DESCRIPTION

Site Description Utilities

Assessors Parcel Number 472-02-147 Water Owner Number of Units 4 Phone Tenant Year Built/Renovated 1961 Electric Tenant Rentable Square Feet 3,328 Gas Tenant Lot Size 0.14 Acres Zoning R3H, San Jose Construction Parking 4 Covered Foundation Concrete Framing Wood Frame Exterior Stucco Parking Surface Concrete Roof Pitched Shingle

IImage Landsatt // Coperrniicus

Image Landsat / Copernicus 1066 APPIAN LN 4 UNITS

IImage Landsatt // Coperrniicus

Image Landsat / Copernicus LOCAL MAP

1066 APPIAN LN 4 UNITS

9 REGIONAL MAP

1066 APPIAN LN 4 UNITS

10 Little Portugal Gateway Development

Japan Town

Columbus Park Roosevelt Park

1066 APPIAN LN 4 UNITS

William Street Park San Jose Vietnam Town

IImage Landsatt // Coperrniicus

Image Landsat / Copernicus “NEXT DOOR TO MCKINLEY ELEMENTARY SCHOOL”

IImage Landsatt // Coperrniicus

Image Landsat / Copernicus INTERIOR PHOTOS

13 EXTERIOR PHOTOS

14 FINANCIAL ANALYSIS

15 PROPERTY DETAILS

PRICE $1,299,000 Down Payment $1,299,000 Number of Units 4 Price Per Unit $324,750 Rentable SqFt 3,328 Price Per SqFt $390.32

16 PRICING DETAILS

PRICE $1,299,000 LOAN AMOUNT $909,300.00

Down Payment $1,299,000 Down Payment 30% / $389,700

Number of Units 4 Net Income $54,562

Price Per Unit $324,750 Debt Service Monthly / Annual $4276 / $51,310

Price Per SqFt $390.32 Principal Paydown Year 1 $16,364

Gross SqFt 3,328 Return on Equity 4.20%

Lot Size 0.14 Acres Loan Interest Rate 3.875%

*This is a loan quote example, many financing options are available. Please contact agent for more details.

CURRENT MARKET RETURNS CURRENT PRO FORMA # OF UNITS UNIT TYPE RENTS RENTS CAP Rate 4.20% 5.38% 4 2BR/1BA $1,770 $2,100

GRM 15.29 12.89

17 RENT ROLL SUMMARY

CURRENT PRO FORMA

# OF RENTAL AVG MONTHLY AVG MONTHLY UNIT TYPE UNITS RANGE RENT INCOME RENT INCOME

2BR/1BA 4 $1,770 - $1,770 $1,770 $7,080 $2,100 $8,400

Totals/Weighted Averages 4 $1,770 $7,080 $2,100 $8,400

Gross Annualized Rents $84,960 $100,800

18 RENT ROLL DETAILS

CURRENT PRO FORMA UNIT UNIT TYPE RENT / MONTH RENT/MONTH

1 2BR/1BA $1,770 $2,100

2 2BR/1BA $1,770 $2,100

3 2BR/1BA $1,770 $2,100

4 2BR/1BA $1,770 $2,100

Total $7,080 $8,400

19 OPERATING STATEMENT

INCOME CURRENT PRO FORMA NOTES PER UNIT PER SF

Gross Potential Rent 100,800 100,800 25,200 30.29

Loss / Gain to Lease (15,840) 15.7% Gross Current Rent 84,960 100,800 25,200 30.29 Physical Vacancy (2,549) 3.0% (3,024) 3.0% [1] (756) (0.91) Total Other Income ($2,549) 3.0% ($3,024) 3.0% ($756) ($1) Effective Gross Income $82,411 $97,776 $24,444 $29.38

EXPENSES CURRENT PRO FORMA NOTES PER UNIT PER SF

Real Estate Taxes 17,009 17,009 [2] 4,252 5.11 Insurance 1,308 1,308 [3] 327 0.39 Utilities - Gas & Electric 1,140 1,140 [4] 285 0.34 Utilities - Water 2,040 2,040 [5] 510 0.61 Trash Removal 2,232 2,232 [6] 558 0.67 Repairs & Maintenance 1,800 1,800 [7] 450 0.54 Special Assessments 1,751 1,751 [8] 438 0.53 Permits & Fees 569 569 [9] 142 0.17 Total Expenses $27,849 $27,849 $6,962 $8.37 Expenses as % of EGI 33.8% 28.5% Net Operating Income $54,562 $69,927 $17,482 $21.01

20 21 NOTES TO OPERATING STATEMENT

[1] Vacancy Factor - Calculated at 3% of Gross Income [2] Property Taxes - Purchase price (x) composite rate of 1.3094% [3] Insurance - $1308 annually per quote provided by Willow Glen Insurance [4] Gas & Electric - Average price of $95/month calculated using last 3 months of actual bills [5] Water - Average price of $340/bi-monthly calculated using average of last 3 water bills [6] Trash Removal - $2232 annually taken from San Jose Garbage bills [7] Repairs & Maintenance - Factored at $450/unit annually [8] Special Assessments - $1751 taken from Santa Clara County Property Tax bill [9] Permits & Fees - $569 paid for Residential Occupancy Permit and Apartment Rent Ordinance Fee

22 SALES COMPARABLES

1066 APPIAN LN 4 UNITS

1 PROPERTIES

1066 APPIAN LN 2 1 1138 Appian Ln

2 833 Jeanne Ave 3 6 3 1322 Carnelian Dr

4 1651 Virginia Avenue

5 165 Gramercy Place

6 1369 Dubert Ln

SALES COMPARABLES MAP SALES COMPARABLES SALES COMPS AVG

Average Cap Rate Average GRM

5.0 18.00 Avg. 15.61 4.5 16.20 Avg. 3.96% 4.0 14.40

3.5 12.60

3.0 10.80

2.5 9.00

2.0 7.20

1.5 5.40

1.0 3.60

0.5 1.80

0.0 0.00 1066 1138 833 Jeanne 1322 1651 165 1369 1066 1138 833 Jeanne 1322 1651 165 1369 Appian Ln Appian Ln Ave #3 Carnelian Virginia Gramercy Dubert Ln Appian Ln Appian Ln Ave #3 Carnelian Virginia Gramercy Dubert Ln Dr Avenue Place Dr Avenue Place

Average Price Per Square Foot Average Price Per Unit Avg. $412.93 $500.00 $400,000 Avg. $339,467 $450.00 $360,000

$400.00 $320,000

$350.00 $280,000

$300.00 $240,000

$250.00 $200,000

$200.00 $160,000

$150.00 $120,000

$100.00 $80,000

$50.00 $40,000

$0.00 $0 1066 1138 833 Jeanne 1322 1651 165 1369 1066 1138 833 Jeanne 1322 1651 165 1369 Appian Ln Appian Ln Ave #3 Carnelian Virginia Gramercy Dubert Ln Appian Ln Appian Ln Ave #3 Carnelian Virginia Gramercy Dubert Ln Dr Avenue Place Dr Avenue Place 26 SALES COMPARABLES

1 1138 APPIAN LN 1138 Appian Ln, San Jose, CA, 95116 SALE PRICE CLOSE OF ESCROW UNITS UNIT TYPE $1,310,000 1/10/2019 4 2BR/1BA UNITS PRICE/UNIT PRICE/SF 4 $327,500 $393.63 CAP RATE GRM YEAR BUILT 3.96% 13.88 1961

2 833 JEANNE AVE #3 833 Jeanne Ave, San Jose, CA, 95116 SALE PRICE CLOSE OF ESCROW UNITS UNIT TYPE $1,230,000 05/27/2019 4 2BR/1BA UNITS PRICE/UNIT PRICE/SF 4 $307,500 $421.96 CAP RATE GRM YEAR BUILT 4.20% 15.21 1959

27 SALES COMPARABLES

3 1322 CARNELIAN DR 1322 Carnelian Dr, San Jose, CA, 95122 SALE PRICE CLOSE OF ESCROW UNITS UNIT TYPE $1,280,000 3/18/2019 4 2BR/1BA UNITS PRICE/UNIT PRICE/SF 4 $320,000 $329.39 CAP RATE GRM YEAR BUILT 3.99% 15.74 1962

4 1651 VIRGINIA AVENUE 1651 Virginia Avenue,San Jose, CA, 95116 SALE PRICE CLOSE OF ESCROW UNITS UNIT TYPE $1,600,000 2/26/2019 2 3BR/2BA UNITS PRICE/UNIT PRICE/SF 2 2BR/1BA 4 $400,000 $414.62 CAP RATE GRM YEAR BUILT 3.93% 16.26 1962

28 SALES COMPARABLES

5 165 GRAMERCY PLACE 165 Gramercy Place , San Jose , CA, 95116 SALE PRICE CLOSE OF ESCROW UNIT UNIT TYPE $1,367,200 5/31/2019 3 2BR/1BA UNITS PRICE/UNIT PRICE/SF 1 3BR/1BA 4 $341,800 $420.16 CAP RATE GRM YEAR BUILT 3.95% 16.17 1962

5 1369 DUBERT LN 1369 Dubert Ln, San Jose, CA, 95122 SALE PRICE CLOSE OF ESCROW UNIT UNIT TYPE $1,360,000 4/26/2019 1 1BR/1BA UNITS PRICE/UNIT PRICE/SF 2 2BR/1BA 1 3BR/1BA 4 $340,000 $497.80 CAP RATE GRM YEAR BUILT 3.74% 16.38 1962

29 30 RENT COMPARABLES

31 32 4

3 2

PROPERTIES

1066 APPIAN LN

1 2748 Kollmar Drive

2 1612 Crucero Drive

3 780 S 11th Street

4 581 Avalani Avenue

RENT COMPARABLES MAP AVERAGE RENT - MULTIFAMILY

2 Bedroom

$3,000

$2,700

$2,400 Avg. $2,134

$2,100

$1,800

$1,500

$1,200

$900

$600

$300

$0 2748 Kollmar Drive 1612 Crucero Drive 780 S 11th Street 581 Avalani Avenue

34 RENT COMPARABLES

1 2748 KOLLMAR DRIVE 2748 Kollmar Drive, San Jose, CA, 95127 Unit Type Units SF Rent Rent/SF YEAR BUILT 2BR/1BA 1 800 $2,150 $2.69 1959 Total/Avg. 1 800 $2,150 $2.69

2 1612 CRUCERO DRIVE 1612 Crucero Drive , San Jose , CA, 95122 Unit Type Units SF Rent Rent/SF YEAR BUILT 2BR/1BA 1 800 $2,049-$2,049 $2.56 1962 Total/Avg. 1 800 $2,049 $2.56

35 RENT COMPARABLES

3 780 S 11TH STREET 780 S 11th Street, San Jose, CA, 95112 Unit Type Units SF Rent Rent/SF YEAR BUILT 2BR/1BA 1 750 $2,150 $2.87 1964 Total/Avg. 1 750 $2,150 $2.87

4 581 AVALANI AVENUE 581 Avalani Avenue, San Jose, CA, 95133 Unit Type Units SF Rent Rent/SF YEAR BUILT 2BR/1BA 1 750 $2,185 $2.91 1965 Total/Avg. 1 750 $2,185 $2.91

36 MARKET OVERVIEW

SAN JOSE CA POPULATION 1,046,079

39 PREMIER HIGH-TECH CENTER Silicon Valley’s dense concentration of high-tech City Of jobs is world renowned, attracting a variety of large SAN JOSE employers and startups. HIGH INCOMES Known to the world as Silicon Valley, the San Jose metro is located Well-paying jobs in the tech sector contribute to a median annual household income level that is at the southern end of the San Francisco Bay and encompasses almost double the U.S. median. Santa Clara and San Benito counties. A large portion of the area’s 1,315 square miles is unincorporated ranch and farmland. HIGHLY EDUCATED WORKFORCE Nearly half of all residents age 25 and older have The metro contains roughly 2 million inhabitants in 15 cities. More obtained at least a bachelor’s degree, well above than half of the region’s residents reside in the city of San Jose. It is the U.S. average. the metro’s largest city with more than 1 million residents, followed by Sunnyvale and Santa Clara. Venture capital funds received in the 1990s helped to turn the area into the world’s most prominent technology hub, a distinction that remains today. ECONOMY

• The San Jose employment base contains more than 1 million workers, ranking the metro as one of the 30 largest job markets in the nation.

• There are various Fortune 500 companies headquartered in San Jose, including Intel, Cisco Systems, Apple Inc., eBay and Alphabet.

• The area’s many institutions of higher learning, including Stanford, San Jose State and Santa Clara University, support these companies by graduating thousands of engineering and computer science students.

40 DEMOGRAPHICS The metro is expected to add approximately 44,000 people through 2023 and during this time more than 25,000 households will be formed.

High home prices contribute to a homeownership rate of 56 percent, which is below the national rate of 64 percent.

Nearly 48 percent of residents age 25 and older hold a bachelor’s degree, including 21 percent who have also obtained a graduate or professional degree.

QUALITY OF LIFE

The San Jose metro has an enviable combination of major universities that produce a highly educated workforce, cutting-edge firms and exceptional affluence. Residents can visit a plethora of museums, including the San Jose Museum of Art and the Tech Museum of Innovation. Santa Clara County is home to performing arts companies and hosts the San Jose Jazz Festival. The San Francisco 49ers play their home games at Levi’s Stadium and the San Jose Sharks hockey team plays at the SAP Center. Other sports venues include the San Jose Municipal Stadium and Buck Shaw Stadium. The metro is minutes away from San Francisco and some of the world’s finest wine-producing regions, notably the Napa, Sonoma and Alexander valleys.

2018 2018 2018 2018 MEDIAN POPULATION: HOUSEHOLDS: MEDIAN AGE: HOUSEHOLD INCOME: 2M 685K 37.0 $111,800 Growth Growth U.S. Median: U.S. Median: 2018-2023*: 2018-2023*: 2.2% 3.6% 38.0 $58,800

2018 Population by Age

6% 19% 6% 30% 26% 13% 0-4 YEARS 5-19 YEARS 20-24 YEARS 25-44 YEARS 45-64 YEARS 65+ YEARS

41 POPULATION 1 Mile 3 Miles 5 Miles HOUSEHOLDS BY INCOME 1 Mile 3 Miles 5 Miles • 2023 Projection • 2018 Estimate Total Population 42,415 325,012 667,087 $200,000 or More 3.77% 8.07% 13.98% • 2018 Estimate $150,000 - $199,000 4.83% 8.46% 11.73% Total Population 41,362 320,023 652,068 $100,000 - $149,000 17.52% 17.50% 19.56% • 2010 Census $75,000 - $99,999 14.30% 11.69% 11.07% Total Population 39,367 298,164 605,674 $50,000 - $74,999 18.73% 15.28% 13.48% • 2000 Census $35,000 - $49,999 12.79% 11.01% 9.17% Total Population 41,509 299,262 579,384 $25,000 - $34,999 8.74% 7.73% 6.18% • Daytime Population $15,000 - $24,999 9.59% 9.04% 6.71% 2018 Estimate 24,515 290,986 583,692 Under $15,000 9.74% 11.22% 8.14% HOUSEHOLDS 1 Mile 3 Miles 5 Miles Average Household Income $79,609 $98,630 $125,553 • 2023 Projection Median Household Income $60,233 $67,170 $89,031 Total Households 9,684 89,814 205,675 Per Capita Income $17,740 $26,847 $38,096 • 2018 Estimate POPULATION PROFILE 1 Mile 3 Miles 5 Miles Total Households 9,191 85,747 196,009 • Population By Age Average (Mean) Household Size 4.23 3.5 3.18 2018 Estimate Total Population 41,362 320,023 652,068 • 2010 Census Under 20 29.84% 26.53% 25.61% Total Households 8,873 79,463 180,215 20 to 34 Years 27.33% 27.65% 25.12% • 2000 Census 35 to 39 Years 7.93% 7.47% 7.53% Total Households 8,571 73,264 164,286 40 to 49 Years 12.84% 13.00% 13.80% Growth 2015-2020 5.36% 4.74% 4.93% 50 to 64 Years 13.88% 15.70% 17.17% HOUSING UNITS 1 Mile 3 Miles 5 Miles Age 65+ 8.21% 9.64% 10.77% • Occupied Units Median Age 30.96 32.52 34.55 2023 Projection 9,684 89,814 205,675 • Population 25+ by Education Level 2018 Estimate 9,230 87,062 197,881 2018 Estimate Population Age 25+ 25,702 207,333 436,590 Owner Occupied 3,932 39,411 105,524 Elementary (0-8) 18.65% 14.18% 9.48% Renter Occupied 5,259 46,337 90,485 Some High School (9-11) 15.11% 12.24% 9.09% Vacant 39 1,315 1,872 High School Graduate (12) 23.82% 23.54% 20.15% • Persons In Units Some College (13-15) 14.27% 16.91% 17.77% 2018 Estimate Total Occupied Units 9,191 85,747 196,009 Associate Degree Only 6.40% 6.49% 7.03% 1 Person Units 11.62% 20.12% 21.62% Bachelors Degree Only 11.03% 15.23% 21.17% 2 Person Units 16.02% 21.09% 24.66% Graduate Degree 3.46% 5.88% 11.35% 3 Person Units 14.96% 15.43% 16.35% • Population by Gender 4 Person Units 16.30% 15.02% 15.65% 2018 Estimate Total Population 41,362 320,023 652,068 5 Person Units 13.40% 10.67% 9.28% Male Population 52.03% 51.80% 51.10% 6+ Person Units 27.70% 17.66% 12.45% Female Population 47.97% 48.20% 48.90% 1066 APPIAN LANE

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