City Terrace Apartments 4116 City Terrace Dr. Los Angeles, CA OFFERING MEMORANDUM

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1 City Terrace Apartments 4116 City Terrace Dr. Los Angeles, CA OFFERING MEMORANDUM

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3 TABLE OF CONTENTS PROPERTY DESCRIPTION Property Overview Local Description Location Map Demographics Report PRICING AND FINANCIAL ANALYSIS Financial Overview Rent Roll Property Photos RECENT SALES AND RENT COMPARABLES Recent Sales Map Recent Sales Recent Rent Comps Map Recent Rent Comps PRESENTED BY David J. Harrington National Director - Multifamily Direct Mobile david.harrington@matthews.com License No J. A. Charles Wright Associate - Multifamily Direct Mobile charles.wright@matthews.com License No Kyle Mirrafati Senior Associate - Multifamily Direct Mobile kyle.mirrafati@matthews.com License No Disclaimer Statement. THIS IS NOT AN APPRAISAL: This Real Estate Broker s Opinion of Value is intended for the sole and exclusive use of Seller, LLC ( the Client ) and may not be relied upon any person or entity other than the Client for any purpose whatsoever. This Real Estate Broker s Opinion of Value represents only the opinion of Matthews Retail Group, Inc. (also known as Matthews Retail Advisors) as to the value of the Subject Property, subject to the assumptions and qualifications set forth herein. Matthews Retail Group, Inc. is not licensed to perform real property appraisals. Accordingly, this Real Estate Broker s Opinion of Value does not constitute an appraisal of the Subject Property and has not been prepared in accordance with the Uniform Standards of Professional Appraisal Practice. The Real Estate Broker s Opinion of Value set forth herein is specifically qualified by, and based solely upon, the relevant facts, circumstances, and market conditions that exist as of the date of this Real Estate Broker s Opinion of Value, and we undertake no obligation to update, modify, or supplement this Real Estate Broker s Opinion of Value to the extent that such facts, circumstances or market conditions subsequently change.

4 Property Overview Opportunity Non- Rent Control in Los Angeles County Parking on Site Over 27% Rent Upside Student Housing Potential near CSULA Purchase Non-Rent Control at Over a 5% Cap Rate Property Description 8 Units, 1 Non-Conforming, Built in ,508 Gross Square Footage on a 6,101 Square Foot Lot Not Subject to Rent Control Laws Located in the Up and Coming City Terrace Neighborhood Great Unit Mix: Three 3 Bed / 1 Bath, Five 1 Bed / 1 Bath, One Single which is Non Conforming Large Units that Average over 810 Square Feet Each Secured Entry to the Property Gas and Electric Separately Metered for Each Unit 4

5 Location Description 4116 City Terrace is conveniently located between the 10 & 710 Freeways, offering easy access to the surrounding LA cities. The property is near California State University of Los Angeles, USC Medical Center, LA County Fire Department, and LA County Sheriff s Station. Close proximity to Downtown LA and Cal State LA makes the location ideal for a young business professional working in downtown or a student attending CSULA. Nearby schools include City Terrace Elementary School, LA County High School for the Arts and Marc & Eva Stern Math and Science High School. Light rail service to East LA is provided by Metro Gold Line s East side Extension, which opened in Los Angeles County Metropolitan Transportation Authority (Metro) provides bus service from East LA to throughout the LA area. In addition, local shuttle service is provided by the El Sol (East Los Angeles Shuttle). City Terrace is bounded by the city limits of Los Angeles on the north and west, Floral Drive on the south, and the city limits of Monterey Park on the east. Boyle Heights is on the west, Lincoln Heights is to the northwest, University Hills is to the north, California State University, Los Angeles is to the northeast, Monterey Park is to the east, and East Los Angeles is to the south. Major thoroughfares include City Terrace Drive, Eastern and Medford Avenues, and Herbert Street. The community is part of ZIP code of and area code

6 Location Map 6

7 Demographics Report Population 1-Mile 3-Mile 5-Mile 2021 Projection 32, , , Estimate 31, , , Census 30, , , Census 29, , ,412 Growth % 3.25% 3.90% Growth % 3.00% 4.13% Growth % -1.85% 0.42% Households 2021 Projection 7,896 98, , Estimate 7,654 95, , Census 7,439 91, , Census 7,286 89, ,481 Growth % 3.62% 4.76% Growth % 3.62% 5.52% Growth % 2.74% 6.34% 2016 Est. Average Household Size Income $ 0 - $14,999 1,176 15,259 41,241 $ 15,000 - $24,999 1,204 15,031 35,270 $ 25,000 - $34, ,273 26,876 $ 35,000 - $49,999 1,119 14,083 33,419 $ 50,000 - $74,999 1,307 16,111 40,213 $ 75,000 - $99, ,615 25,402 $100,000 - $124, ,651 16,233 $125,000 - $149, ,164 9,972 $150,000 - $199, ,852 10,198 $200,000 - $249, ,054 4,057 $250,000 - $499, ,191 $500, , Average Household Income $54,177 $56,779 $64, Median Household Income $41,575 $41,417 $44,369 7

8 Financial Overview Investment Summary Offering Price: $1,400,000 Number of Units: 9 Property Address: 4116 City Terrace Drive Year Built: 1921 Los Angeles, CA APN: Price Per Unit: $155,556 Gross Sq. Ft.: 6,508 Price Per S.F.: $ Average S.F. Per Unit: 723 Cap (current / market): 5.15% / 7.28% Lot Size: 6,101 GRM (current / market): / 9.33 Zoning: LCC3* Unit Mix Total Units Unit Mix Unit Mix % Current Ave Rent Current Monthly Rent Market Rent Market Monthly Rent 1 Non-Conforming Single 13% $850 $840 $1,000 $1, % $990 $4,950 $1,250 $6, % $1,342 $4,025 $1,750 $5,250 Scheduled Monthly Rent: $9,825 $12,500 Scheduled Yearly Rent: $117,900 $150,000 8

9 Annualized Operating Summary Current Market Scheduled Gross Income: $117,900 27% upside $150,000 Less Vacancy Reserve: 3.0% $3, % $4,500 Gross Operating Income: $115,983 $145,500 Expenses: 35.8% $42, % $43,511 Net Operating Income: $72,097 $101,989 Loan Payments: $60,097 $60,097 Pre-Tax Cash Flow: 3.4% $12, % $41,892 Plus Principal Reduction: $18,873 $18,473 Total Return Before Taxes: 8.7% $30, % $60,365 * As a percent of Scheduled Gross Income ** As a percent of Down Payment Laundry income is estimated at $15 per unit per month Pro Forma Annual Operating Expenses Current Per Unit % of SGI *Taxes 1.250% x Sale Price $17,500 $1,944 15% *Insurance Actual 2015 $2,705 $301 2% *Reserves $200 x Units $1,800 $200 2% Off-Site Management 4.0% x GOI $4,575 $508 4% Repairs & Maintenance $500 x Units $4,500 $500 4% Contract Services Actual 2015 $1,554 $173 1% Utilities Actual 2015 $7,382 $820 6% General Administration $250 x Units $2,250 $250 2% Total Expenses $42,266 $4, % Current Per Unit % of SGI Non-controllable expenses: Taxes, Ins., Reserves: $22,005 $2, % Total Expense with out Taxes $24,766 $2, % 9

10 Financial Overview Rent Roll # Unit Mix Rent Market Rent $1,600 $1, $1,225 $1, $1,200 $1, $950 $1, (Non-Conforming) Single $850 $1,000 6 A 1+1 $950 $1,250 7 B 1+1 $950 $1,250 8 C (Vacant) 1+1 $1,250 $1,250 9 D 1+1 $850 $1,250 Totals 9 $9,825 Averages $1,092 10

11 Property Photos 11

12 Recent Sales Map 1 12

13 Recent Sales Comp (Avg) Subject Property Price Per Unit $256,250 $175,000 Price Per SF $ $ Cap Rate 5.08% 5.25% GRM City Terrace Drive Los Angeles CA Sale Date /15/2016 Sales Price $1,550,000 CAP Rate % GRM Price Per Unit $193,750 Price Per Foot $ # of Units Year

14 Rent Comparables Map

15 Rent Comparables Unit Type Comp (Avg) Subject Property Single $950 $1, CITY TERRACE DR LOS ANGELES CA Unit SF Asking Rent $1,095 1 Bedroom 1 Bathroom $1,095 $1,250 3 Bedroom 1 Bathroom $1,600 $1, N ALMA AVE LOS ANGELES CA Unit SF Asking Rent 3+ 1 $1, S MATHEWS ST LOS ANGELES CA Unit SF Asking Rent Single $950 15

16 City Terrace Apartments 4116 City Terrace Dr. Los Angeles, CA MARKET POSITIONING AND PRICING ANALYSIS David J. Harrington National Director - Multifamily Direct Mobile david.harrington@matthews.com License No J. A. Charles Wright Associate - Multifamily Direct Mobile charles.wright@matthews.com License No Kyle Mirrafati Senior Associate - Multifamily Direct Mobile kyle.mirrafati@matthews.com License No Apollo Street, Suite 150 El Segundo, CA