Clark St Tarzana CA 91356

Transcription

1 Villa Royale Clark St Tarzana CA 91356

2 The Offering 3 Investment Highlights 4 Opportunity 5 7 Property Photos 8-9 Proximate Amenities Proximate Developments 15 Table of Contents Rental Market Analysis Financial Analysis Rent Roll 22 Rental Comparables Sold Comparable Agent Contact 32 Exclusively Listed By: Kelly Morgan kellymorgan@kw.com CA BRE#

3 THE OFFERING Kelly Morgan with Keller Williams Commercial offers an opportunity to purchase Villa Royale a 28 unit plus 1 non conforming single unit apartment building in the rapidly advancing city of Tarzana where rents have climbed faster than any other neighborhood in the Valley South of the 101. Constructed on a 36,707 sq ft lot, the 29,884 sq ft. building offers an excellent unit mix with 57% two bedroom units with an average unit size of over 1,000 Sq. Ft. and features central air conditioning. Constructed in 1963 the property is subject to rent control. There is potential rental upside in the property by substantially increasing rents which could be achieved through upgrades. A new owner could make changes to the common areas and unit interiors and push rents up and raise the GSI by 45% over time, providing a potential 6.4% Cap Rate. Villa Royale is located less than a mile from the new Orange Line Station. It is also is walking distance to Ventura Blvd that features boutiques, restaurants, grocery stores and other trendy retailers that tend to attract upscale tenants. Additionally, the city is planning a Transportation Oriented Development (TOD) called Tarzana Crossing that is likely to push rents even higher over time. There is an existing loan that can either be assumed or you can obtain new financing. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied as to accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. The future income and expenses of the Property may vary significantly during Buyer s ownership. Buyer shall rely on Buyer s expertise to project the future Income and expense of the Property. 3

4 INVESTMENT HIGHLIGHTS A True Value Add Opportunity q Rents for upgraded units in the area are approx. 32% higher than the average rent at the property q Higher rents can potentially be achieved by renovating the interiors and common areas. q There are 57% two bedroom units with an average size of 1,000 square feet featuring central air conditioning. q The spacious courtyard can be upgraded to feature luxury surroundings q Subject to rent control Within Walking Distance of Ventura Blvd. and the Tarzana Crossing q Easy access to the trendy shops, restaurants and entertainment venues along Ventura Blvd. q Situated near the planned Tarzana Crossing a Transit Oriented Development or TOD which is similar to developments that have achieved rents 30% above market in other areas. q Rents have gone up faster in Tarzana than any neighborhood South of the 101 increasing 18% year over year. q Major employments centers are located in Tarzana including the rapidly growing medical industry fueled by the Providence Tarzana Medical Center 4

5 THE OPPORTUNITY The Villa Royale offers the savvy investor the opportunity to take advantage of its great location and the out flow from Sherman Oaks and Encino. Located just a few minutes walk from Ventura Blvd, residents have easy access to dining, shopping and entertainment. They can simply come home from a long day of work, park their car for the weekend and walk to everything they need. Rent comps in the local Tarzana/Encino submarket for upgraded buildings are advertising $1,750 per month rent for the one bedroom units (comparable units are renting for $1,600 to $1,895) and $2,300 for the two bedroom units (comparable units are renting for $2,000 to $2,500) equating to a 45% increase in annual Gross Income. Value Add increase rents over time for the one bedrooms to $1,750 per month and the two bedrooms to $2,000 per month. To achieve these rents a new owner will need to upgrade the unit interiors to include upgraded flooring, new cabinets, new paint and modern lighting estimated to cost between $4-8K/unit. The common areas will also need to be updated to a more modern look/feel think Viceroy Hotel and Kelly Wearstler. This will attract the young, professional crowd who are looking for a modern, well located place to call their home. Once the rents are at these levels the GSI will increase by 45% to over $740,000 per year, equating to a 10.76X GRM and a 6.4% CAP. * The property is subject to rent control so rent increases can only be done as tenants move out. 5

6 THE OPPORTUNITY OPTION ONE: VALUE ADD UPGRADE ALL UNITS OPTION TWO: TURN KEY RENT EXISTING UNITS 6

7 THE OPPORTUNITY UPGRADED COURTYARD EXISTING COURTYARD 7

8 EXTERIOR PHOTOS 8

9 INTERIOR PHOTOS 9

10 PROXIMATE AMENITIES Tarzana Crossing Planned Transportation Oriented Development Reseda Whole Foods Village Walk Post Office Creative Collective Brown Shopping Center Ventura Freeway Clark St (subject) Planned Multi-Use Development Coffee Bean & Tea Leaf Tarzana Health and Rehabilitation Gelsen Market Tarzana Square Shopping Center Providence Tarzana Medical Center 10

11 NEAR THE BOULEVARD THAT HAS IT ALL 11 11

12 RESTAURANTS Clark S Subject 12

13 SHOPPING Clark S Subject 13

14 GREEN SPACE Multiple Recreation Attractions Topanga State Park El Caballero Country Club Braemar Country Club Balboa Golf Course Woodley Lake Golf Course Encino Golf Course Sepulveda Basin Recreational Area ü Balboa Sport Center ü Hjelte Sports Center ü Sepulveda Garden Center ü Sherman Oaks Castle Park 14

15 PROXIMATE DEVELOPMENTS TARZANA CROSSING IS A PLANNED TRANSIT-ORIENTED DEVELOPMENT or TOD typically defined as more compact developments within easy walking distance of transit stations that contains a mix of uses such as housing, jobs, shops, restaurants and entertainment. CoStar analysts found that these developments fetch higher rent premiums and tend to have higher occupancies than non-tod properties. SCAG members agreed to increase the quantity of housing near transit by 60 percent and set a strategy that by 2035, 87 percent of all Southern California jobs will be located within a halfmile of some form of public transportation 15

16 DEMAND FOR TRANSIT ORIENTED DEVELOPMENTS IS GROWING There are 80 million Echo Boomers entering their prime rental age between 18 and 32. Preferring to rent they are flocking to urban locations to be close to peers, job opportunities, shops, restaurants, cultural venues and entertainment. They place a premium on living in communities where they can easily walk, bike or take public transportation to work and other activities. Meanwhile, single-family homes control 80 percent of L.A.'s residential land creating a shortage of available product for this demographic. Demand Expected Renter Increase Prime Rental-Age People in the United States 80 People Age millions Echo Boomers, people born after 1982, begin to enter their prime rental age Source: population Estimates Program, Population Division, U.S. Census Bureau 16

17 CALIFORNIA RENT INCREASES ARE DOUBLE THE NATIONAL RATE 17

18 Tarzana Rents have Increased Faster Than Any Other Neighborhood in the Valley and Yet Are Still Below the Citywide Median 18

19 FINANCIAL ANALYSIS SUMMARY Property Villa Royale Address Clark St, Tarzana, CA Number of units 28 Units Net Rentable Area 29,884 Approx. Lot Size 36,707 Year Built 1963 Pricing Purchase Price $7,990,000 Price Per Unit $285,357 Price Per Gross SF $267 Current and Market Returns Current GRM Current Cap Rate 3.5% Market GRM Market Cap Rate 6.4% Projected Return Based on 10 Year Analysis 10 Year Average Annual Return 15.4% Financing Assumption Base Case Loan Proceeds $3,655,000 Loan to Value 46.0% Interest Rate 4.05% Term Due Mar 2021 * The property is subject to rent control so rent increases can only be done as tenants move out. *There is an existing loan that can either be assumed or you can obtain new financing 19

20 20

21 CASH FLOW Important Note: We ve teamed up with AdvancedREI to make your cash flow projections better than ever. To customize the Cash Flow statement, explore financial scenarios, view the financial assumption and create your free account. Click Here to get started or paste the following URL in your browser 21

22 RENT ROLL Unit Unit Mix Square Feet Total&Rent Security& Deposit Lease&Date $1, $ / $1, $2, / $1, $ / $1, $1, / $1, $1, / $1, $1, / $1, $1, / $1, $1, / $1, $1, / $1, $0.00 8/ $1, $1, / $1, $ / $1, $ / $1, $ $1, $1, / $1, $1, / $1, $3, / $1, $1, / $1, $1, / $2, $4, / $1, $ / $1, $1, / $1, $0.00 7/ $1, $ $1, $ / $1, $1, / $ $ / $1, $1, /13 Studio 0+1 N/C $ $41, $32, * non conforming Other Laundry $ Monthly $42, Annually $509,

23 RENT COMPARABLES SUMMARY Villa Royale Clark St (Subject) City Built Unit Type SF Rent Current $/SF Clark Tarzana $1,198 $ Clark Tarzana ,109 $1,571 $ Clark Tarzana ,500 $1,756 $ Clark Tarzana ,540 $2,100 $1.36 Villa Royale Overall Average 29,884 $41,780 $1.40 Rent Comparable One Bedroom City Built Unit Type SF Rent $/SF Hatteras St Tarzana $1,600 $ Lindley Ave Encino $1,890 $ Newcastle Ave Encino $1,895 $ Zelzah Ave Encino $1,600 $1.88 Average 799 $1,746 $2.19 Rent Comparable Two Bedroom City Built Unit Type SF Rent $/SF Hatteras St Tarzana ,411 $2,500 $ Clark St Tarzana ,200 $2,200 $ Hatteras St Tarzana ,465 $2,499 $ Clark St Tarzana ,195 $2,000 $ Lindley Ave Encino ,205 $2,300 $ Newcastle Ave Encino ,266 $2,350 $1.86 Average 1,290 $2,308 $1.79 Rent Comparable Three Bedroom City Built Unit Type SF Rent $/SF Burbank Blvd Tarzana ,975 $3,195 $ Etiwanda Ave Tarzana ,150 $3,499 $ Killion Tarzana ,503 $2,575 $ New Castle Ave Encino ,570 $2,995 $1.91 Average 1,800 $3,066 $1.70 Comparable Overall Average 16,940 31,098 $

24 Rents are for 1 Bedroom Hatteras St $1, Lindley Ave $1, Newcastle $1, Zelzah Ave $1,600 24

25 25

26 Rents are for 2 Bedrooms Hatteras $2, Clark St $2, Hatteras $2, Clark St $2, Lindley $2, Newcastle $2,350 26

27 27

28 Rents are for 3 Bedrooms Burbank Blvd $3, Etiwanda Ave $3, Killion $2, Newcastle $2,995 28

29 29

30 SALES COMPARABLE 5167 Yarmouth Ave. * There has been only one rent control property sale South of the 101 in Tarzana in the past year. Sale Price $4,900,000 Year Built 1962 Square Feet 18,869 Units 20 Price Per Unit $245,000 Price Per Sq Ft $259 Cap Rate 3.4% GRM 15.3 Unit Mix 6 (1 Bed) 14 (2 Bed) 30

31 31

32 Ready to Buy or Sell? Contact us to Learn More about How We Can Help You Kelly Morgan (310) Sheri Whitmore (310) Kelly Morgan's strength and expertise in multi-family real estate is a product of his years of experience in investments and production. Kelly spent ten years in the securities business raising millions of dollars for venture capital investments. Prior to the securities business, Kelly spent 13 years producing television commercials and complex photo shoots for major advertising clients such as McDonalds, Hyundai, Proctor & Gamble, Kraft and Pizza Hut. The commercial advertising's complex production process and intricate client management forged skills that are incomparable in managing major real estate transactions. Kelly holds a Series 24, 63 and 7 license. DRE# Sheri Whitmore epitomizes integrity, energy and hard work in every detail of your real estate transaction. She has worked many aspects of the industry representing sellers and buyers and investors, in both the residential and commercial market. Sheri is immersed with family, devoted to God, her husband, 5 children and 10 grandchildren. An athlete by nature she was a ski instructor for 15 years in Idaho and Wyoming. Her love for rock climbing, skiing and horses find s her out in nature surrounded with mountains, challenges, family and fun. She has worked in sales for over 15 years and has been trained and inspired by some of the best Tom Hopkins, Stephan Schiffman, and Tony Robbins. She has an education in many fields such as health, weight loss and personal coaching, all contributing to her passion for the needs and goals of her clients. DRE#

33 Villa Royale Clark St Exclusively Listed By: Kelly Morgan Multi-Family Investment Advisor (310) CA BRE# Sheri Whitmore Multi-Family Investment Advisor (310) CA BRE#