7060 W. SUNSET BOULEVARD Los Angeles, CA 90028 BRANDON MICHAELS GROUP 1 INVESTMENT ADVISORS: BRANDON MICHAELS BRANDON Senior Managing Director Investments MICHAELS Director, National Retail Group GROUP Tel: (818) 212-2794 Fax: (818) 212-2710 [email protected] License: CA #01434685 www.BrandonMichaelsGroup.com BEN BROWNSTEIN Investment Associate Director, National Retail Group Tel: (818) 212-2812 Fax: (818) 212-2710 [email protected] License: CA #02012808 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2016 Marcus & Millichap 2 TABLE OF CONTENTS Executive Summary Investment Highlights Financials Sales Comparables Area Overview 3 HOLLYWOOD Capitol Records W Hotel Hollywood Pantages Theatre Dream Hotel Mama Shelter Loews Hotel Egyptian Theatre Hollywood & Highland Hollywood Max Museum Dolby Theatre Ripley’s Believe It or Not! TCL Chinese Theatre Madame Tussauds Hollywood El Capitan Theatre Hollywood Roosevelt N HIGHLAND AVENUE CVS | LA Fitness| DSW We Work Hollywood Buffalo Wild Wings In-N-Out Burger Live Nation Sycamore Tavern Starbucks SUNSET BOULEVARD N LA BREA AVENUE 4 W Hotel Hollywood Palladium Sunset + Vine ArcLight Hollywood CNN Mama Shelter N HIGHLAND AVENUE 7060 W. Sunset Boulevard Los Angeles, CA 5 OFFERING SUMMARY ROSS DRESS FOR LESS EXECUTIVE SUMMARY Marcus & Millichap has been selected to exclusively market for sale Ross 7060 W. SUNSET BOULEVARD Dress for Less, located at 7060 W. Sunset Boulevard on the southeast sig- LOS ANGELES, CA 90028 nalized corner of Sunset Boulevard and N. La Brea Avenue in the heart of Hollywood, California. Ross Dress For Less is on a NNN lease that expires in January 2020, with two, five- year options remaining. Built in 1987, Ross occupies 27,168 SF situated on 57,230 SF of land. Ross is an S&P 500, Fortune 500 and Nasdaq 100 company and the largest discount apparel and home fashion chain in the United States. Ross has investment grade credit with a credit rating of A3 by Moody’s Investors Services. Ross offers an investor a secure and stable income with zero landlord management responsibility. Ross is located next to multiple major retailers such as Subway, 7-Eleven, Star- bucks, and more. There is excellent parking available. Sunset Boulevard and N. La Brea Avenue are two major thoroughfares through Hollywood with over 84,000 vehicles a day at the intersection. 7060 W. Sunset Boulevard is located in Hollywood’s entertainment and tourist district, just half a mile away from the entertainment complex of Hollywood & Highland. Hollywood is the entertainment capital of the world with world-fa- mous landmarks such as the Dolby Theatre and the Hollywood Walk of Fame. Hollywood has seen a tremendous revitalization over the last decade. An influx of capital dedicated to the revitalization of Hollywood has attracted a new res- ident base of young urban dwellers. This new, hip client base has brought new restaurants, nightclubs, and retail opportunities to the area, making Hollywood one of the more desirable submarkets in the Los Angeles area. Ross Dress for Less is an excellent opportunity for an investor and offers a stable and secure income stream with zero management responsibility. It is also a poten- tial redevelopment opportunity due to its desirable location in Hollywood. Hollywood & 6 Highland HOLLYWOOD BOULEVARD PROPERTY INFORMATION LEASE INFORMATION N. LA BREA AVENUE 7060 W. Sunset Boulevard, Address Tenant Ross Dress For Less Los Angeles, CA 90028 Lease Start 1/23/1990 Sales Price $20,000,000 Lease Expire 1/31/2020 CAP Rate 3.57% Options Two, five year options remaining SUNSET BOULEVARD Year 2020 CAP Rate 3.86% Increases 8% every 5 years ROSS Price/SF $736.16 Lease Type NNN Bldg SF 27,168 SF Lot SF 57,230 SF (1.31 acres) Zoning LAC4 7 INVESTMENT HIGHLIGHTS INVESTMENT GRADE CREDIT NNN LEASE IRREPLACEABLE HOLLYWOOD LOCATION Ross Dress For Less is an S&P 500, Fortune 500, and Nas- Ross is located walking distance to Hollywood & Highland, the en- daq 100 company tertainment complex that is home to the Dolby Theatre and the heart of Hollywood’s entertainment district Ross is the largest discount chain in the United States with 1,409 locations Two Metro Red line stations in Hollywood that link Hollywood direct- ly to the rest of Los Angeles. Investment grade credit rating of A3 by Moody’s Excellent walkability - Walkscore of 96/100 on walkscore.com NNN lease with no management responsibility Tremendous revitalization in Hollywood over the past decade, 4.8 Lease expires in January of 2020 with two, five year options, billion dollars has been invested since 2000 by developers of multi- 8% increases every 5 years family, commercial, and hospitality Irreplaceable location at the signalized Hollywood is a major destination for visitors and residents alike, ap- corner of N. La Brea Avenue and proximately 6.1 million visitors annually Sunset Boulevard with Creative businesses are taking root in Hollywood due to its access Excellent parking to the Metro, city life, and live/work spaces High daily traffic Hollywood’s major landmarks include Hollywood & High- counts with over land, El Capitan Theatre, TCL Chinese Theatre, Capitol 84,000 vehicles per Records Building day Hollywood is a place of continuing development as it currently has one billion dollars of projects under construction 8 TROPHY ASSET WITH STRONG INTRINSIC VALUE Excellent frontage and visibility along West Sunset Boulevard, the main east-west arterial road through Hollywood Easy ingress and egress Proximate to West Hollywood, Downtown Los Angeles, Mid City, and the San Fernando Valley Unique opportunity in the epicenter of Hollywood with signifi- cant long-term growth potential STRONG IMMEDIATE DEMOGRAPHICS Average household Income of $97,802 within a three-mile radius Population of 933,092 within a five-mile radius Strong local economy with significant job growth over a multi- tude of diverse sectors There has been tremendous revitalization in Hollywood over the past decade, 4.8 billion dollars has been invested since 2000 by multifamily, commercial, and hospitality developers. ” 9 PROPERTY OVERVIEW ADDRESS ZONING 7060 W. Sunset Boulevard, Los Angeles, CA The zoning is LAC4. 90028 APN’S SITE The APN is 5548-017-039 The subject property is located on the signalized southeast corner of N. La Brea Avenue and Sun- set Boulevard. TRAFFIC COUNTS N. La Brea Avenue: 38,816 vehicles per day Sunset Boulevard: 45,990 vehicles per day SQUARE FOOTAGES Total: 84,806 vehicles per day The building square footage is 27,168 SF on 57,230 SF of land. YEAR BUILT The property was built in 1987. TENANT Ross Dress For Less PARKING 117 free surface spaces are available. Ratio of 7.57/1,000 SF. FRONTAGE AND ACCESS Approximately 126 feet of frontage on Sunset Boulevard and 120 feet on La Brea Avenue. Plat Map 10 11 N. LA BREA AVENUE SUNSET BOULEVARD SoHo House Mondrian Chateau Marmont Santa Sunset Tower Runyon Canyon Monica The Laugh Factory West Hollywood Ralphs Wendy’s Burger King N LA BREA AVENUE Starbucks SUNSET BOULEVARD SUNSET Days Inn 12 13 TENANT OVERVIEW Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100 TENANT PROFILE (ROST) company headquartered in Dublin, California, with fis- cal 2017 revenues of $14.1 billion. The Company operates Ross Dress for Less® (“Ross”), the largest off-price apparel and home Name Ross Inc. fashion chain in the United States with 1,409 locations in 37 Type Public states, the District of Columbia, and Guam at fiscal 2017 year Traded As Nasdaq: ROST end. Ross offers first-quality, in-season, name brand and designer apparel, accessories, foot- wear, and home fashions for the entire family at savings of 20% to 60% off department and Industry Retail specialty store regular prices every day. The Company also operates 213 dd’s DISCOUNTS® in 16 Headquarters Dublin, California states at the end of fiscal 2017 that feature a more moderately-priced assortment of first-quality, Revenue $12.9 billion in-season, name brand apparel, accessories, footwear, and home fashions for the entire family Number of Locations 1,412 stores at savings of 20% to 70% off moderate department and discount store regular prices every day. Website www.rossstores.com HIGHLIGHTS Credit Rating A3 by Moody’s • Fiscal 2017 revenues of $14.1 billion • Ross Dress for Less is the largest off-price appareal and home fashion chain the US with 1,412 stores • Ross operates 215 dd’s Discounts in 16 states FORTUNE 500 STATISTICS • Ranked #219 in 2016, up from #237 in 2015 and $269 in 2014 • In 2016, ranked #6 out of 500 comapnies for total return to stockholds on a 10-year basis • Ranked #17 out of 500 companies on 10-year annual EPS growth rate $12.9 $2.83 43% $915 12 13 14 15 16 12 13 14 15 16 12 13 14 15 16 12 13 14 15 16 TOTAL SALES EARNINGS RETURN ON AVERAGE CASH RETURNED ($ BILLIONS) PER SHARE STOCKHOLDERS’ EQUITY TO STOCKHOLDERS 14 ($ MILLIONS) Ross Dress For Less is a Fortune 500 company that operates 1,412 stores in the United States and 215 dd's Discounts stores. ” 15 FINANCIALS LEASE MO. MO. RENT ANNUAL TENANT INCREASES ROSS LEASE ABSTRACT EXPIRE RENT PER SF RENT Tenant Ross Dress for Less Ross Dress 1/31/2020 $57,279 $2.11 $687,350 8% every 5 yrs Building SF 27,168 SF For Less Lease Start 1//23/1990 Billboard 6/30/2021 $2,295 - $27,540 2% ann in July Lease Expire 1/31/2020 Total - $59,574 - $714,890 - Original Lease Term 15 years Rent/SF $2.11 Monthly Rent $57,279 INCOME AND EXPENSE CURRENT Net Operating Income $687,350 Scheduled Lease Income: $687,350 Other Income: Billboard $27,540 Lease Type NNN Net Operating Income: $714,890 Options Two, five year options remaining Option Periods and Period Mo.