13921 BESSEMER STREET

Transcription

1 13921 BESSEMER STREET VALLEY GLEN, CALIFORNIA OFFERING MEMORANDUM

2 2

3 BESSEMER STREET VALLEY GLEN, CALIFORNIA CONTENTS Property Overview Financial Analysis Area Overview EXCLUSIVELY LISTED BY DAVID HARRINGTON EVP & National Director David.Harrington@matthews.com direct (310) mobile (310) Lic # (CA)

4 4 I SECTION PROPERTY OVERVIEW Physical Description: Property: Bessemer Street Valley Glen, CA Number of Units: 23 plus 1 Legal Non- Conforming (Studio) Year Built: 1963 APN: Gross Sq. Ft.: 20,633 Average S.F. Per Unit: 897 Lot Size (Acres): 0.62

5 PROPERTY DESCRIPTION Highly Improved Apartment Community with Tremendous Rent Upside Prime Valley Glen Location in a Quiet Residential Neighborhood 40% Rent Upside Potential from the Current Levels Over 70% Two Bedroom Units Meticulously Maintained Building & Landscaped Grounds Steps to Sherman Oaks with Proximity to LA Valley College & Westfield Fashion Square Mall 23 Total Parking Spaces 20 Covered & 3 Open Laundry Facility On-Site with 3 Washers & 3 Dryers Built in 1963 with Large Units Averaging Over 850 Square Feet Each 23 Units, Plus 1 Non-Conforming Studio/1 Bath Unit (currently used as leasing office) Large 0.62 Acre Lot with LAR3 Zoning OPPORTUNITY The crux of this opportunity lies in the tremendous upside potential that can be captured by a new investor. As stated, there is 40% rental upside from the current rent levels. Given the highly improved condition of the building and grounds at the Bessemer Apartments, a new investor can focus solely on improving rents. Any further capital invested in the asset can go 100% towards improvements that will directly lead to increased rents. These improvements might include continued upgrades to the unit interiors and cosmetic exterior improvements to enhance the curb appeal. The property is located in a very unique residential pocket that will attract top of the market renters, which will provide a strong return on any further investment in this asset. 5

6 6 II SECTION FINANCIAL ANALYSIS UNIT MIX Total Units Unit Mix Unit Mix % Current Avg Rent Current Monthly Rent Market Rent Market Monthly Rent 1 Studio 4% $1,000 $1,000 $1,000 $1, % $1,099 $6,596 $1,600 $9, % $1,361 $23,137 $1,900 $32,300 Scheduled Monthly Rent: $30,733 $42,900 Scheduled Yearly Rent: $368,801 $514,800 Investment Overview Offering Price: $5,250,000 Property: Bessemer Street Valley Glen, CA Price Per Unit: $228,261 Price Per S.F.: $ Cap (current / market): 4.23% / 6.82% GRM (current / market): / ANNUALIZED OPERATING DATA Current Market Scheduled Gross Income: $368,801 $514,800 40% Upside Less Vacancy Reserve: 3.0% $11, % $15,444 * Other Income: $4,140 $4,140 Gross Operating Income: $361,877 $503,496 Expenses: 37.9% $139, % $145,500 * Net Operating Income: $222,042 $357,996 Loan Payments: $185,021 $185,021 Pre-Tax Cash Flow: 1.7% $37, % $172,974 ** Plus Principal Reduction: $49,090 $49,090 Total Return Before Taxes: 3.9% $86, % $222,065 ** * As a percent of Scheduled Gross Income ** As a percent of Down Payment Other income is estimated at $15 per unit per month FINANCING Loan Amount $3,043,000 Terms: 30 Down Payment: 42% $2,207,000 Interest: 4.50% Yearly Pmt: $185,021 Monthly Pmt: $15,418 Debt Coverage: 1.20

7 PRO FORMA ANNUAL OPERATING EXPENSES Current Per Unit % of SGI *Taxes 1.190% x Sale Price $62,475 $2, % Off-Site Management 4.0% x GOI $14,475 $ % *Insurance $0.35 x Gross Square Footage $7,222 $ % On-Site Management $700 Per Month Rent Credit $8,400 $ % Repairs & Maintenance $500 x Units $11,500 $ % Utilities Actual 2017 $27,003 $1, % Contract Services Actual 2017 $4,796 $ % Administrative Actual 2017 $3,965 $ % Total Expenses $139,836 $6, % Current Per Unit % of SGI Non-controllable expenses: Taxes, Ins., Reserves: $69,697 $3, % Total Expense with out Taxes $77,361 $3, % 7

8 RENT ROLL Unit Mix Rent Market Rent $1,575 $1, $1,600 $1, $1,304 $1, $945 $1, $1,426 $1, $1,625 $1, $1,190 $1, $1,575 $1, $1,675 $1, $859 $1, $996 $1, $1,151 $1,600 12A 1+1 $911 $1, $1,004 $1, $1,045 $1, $910 $1, $1,875 $1, $1,153 $1, $1,675 $1, $1,419 $1, $1,428 $1, $1,196 $1, $1,196 $1, Studio $1,000 $1,000 Totals $30,733 $42,900 Averages $1,281 $1,788 8

9 9

10 III SECTION AREA OVERVIEW MAJOR EMPLOYERS LOS ANGELES MSA As the second largest metropolitan area in the United States, the Los Angeles Metropolitan Statistical Area, or the Southland, consists of both Los Angeles and Orange Counties. These two counties also make up the inner core of the Greater Los Angeles urbanized region. Los Angeles County, one of California s original 27 counties, is one of the nation s largest counties both in land area and population. With nearly 10 million residents, the Los Angeles population accounts for approximately 27 percent of California s population. The area continues to grow, especially given the vigorous residential development in downtown LA. Famously known for a heavy entertainment industry based economy, the Los Angeles metropolitan area attracts many visitors. Consequently, leisure and hospitality is also a leading industry and has experienced recent growth in employment. It is now the sixth largest hotel market in the United States. The Los Angeles-Orange County metro area alone has an enormous economy with an estimated $866 billion GMP. Together with Ventura, Riverside and San Bernardino Counties, Orange and Los Angeles county make up the Greater Los Angeles Area, a combined statistical area that is the third largest economic center in the world after the Greater Tokyo and New York metropolitan areas. ECONOMY The LA economy is famously and heavily based on the entertainment industry, with a particular focus on television, motion pictures, interactive games, and recorded music - the Hollywood district of Los Angeles and its surrounding areas are known as the Movie Capital of the United States due to the region s extreme commercial and historical importance to the American motion picture industry. Other significant sectors include shipping/ international trade - particularly at the adjacent Port of Los Angeles and Port of Long Beach, together comprising the United States busiest seaport - as well as aerospace, technology, petroleum, fashion and apparel, and tourism

11 DEMOGRAPHICS POPULATION 1-MILE 3-MILE 5-MILE 2022 Projection 44, , , Estimate 43, , , Census 41, , ,884 Growth % 1.75% 1.75% HOUSEHOLDS 1-MILE 3-MILE 5-MILE 2022 Projection 15, , , Estimate 15, , , Census 14, , ,564 Growth % 4.00% 4.04% INCOME 1-MILE 3-MILE 5-MILE Average Household Income Median Household Income $74,925 $89,052 $94,559 $52,045 $57,847 $60,405 11

12 171,075+ POPULATION 4.7 MILES FROM VNY VAN NUYS Van Nuys is one of the fastest growing cities in Los Angeles with a projected growth of over 4% in Boasting a population of more than 110,000 it is one of the densest cities in Los Angeles County and home to a large range of employers. Bordering other large cities such as Sherman Oaks, North Hollywood, and Reseda it provides for ample employment, shopping, and dining opportunities. The San Fernando Valley features a strong and well-diversified economy. The Valley is home to numerous large employers, including some 50,000 businesses employing over 700,000 workers, the most well-known of which are involved in motion pictures, recording, and television production and the medical and biotech industries. Among the top entertainment companies in the San Fernando Valley are Disney, Warner Brothers, NBC, and DreamWorks. Other important segments of the local economy include financial and health services as well as aerospace, biotech, and high-tech manufacturing, with BlueShield, Amgen, and Kaiser to name a few. 12

13 STRATEGIC LOCATION The subject property is located along Bessemer Street in the community of Valley Glen, CA. One block north of Oxnard Street and just west of Woodman Avenue, the property is steps from Sherman Oaks. The surrounding neighborhood contains other multifamily, but is primarily made up of single-family residences. In the last six months, 87 single-family homes have sold in the zip code with an average price of $921,455, which equates to $494 per square foot. Less than one mile away is Los Angeles Valley College at the corner of Burbank Boulevard and Fulton Avenue, which sits on a 105-acre campus and has a current enrollment of over 19,000 students. Additionally, the school employs over 1,300 full-and part-time faculty and non-faculty. It is two miles to the Sherman Oaks Fashion Square Mall at Riverside Drive and Hazeltine Avenue. This recently renovated mall contains over 160 stores and restaurants including Bloomingdales and Macy s. The property is less than three miles to Ventura Boulevard, the 101 Freeway and the 405 Freeway. Also, less than four miles to the east is the ever-growing NOHO Arts District that is home to contemporary theaters, art galleries, cafes, and shops. Additionally, the Sherman Oaks Galleria at the intersection of Sepulveda Boulevard and Ventura Boulevard is less than four miles away. The Orange Line Busway and Bike Path is within walking distance of the apartments, and provides public transport across the valley. The Orange Line connects riders to the North Hollywood Metro Station with Subway Rail Service to Hollywood and downtown. From the Bessemer Apartments, the NOHO Metro Station is four miles away. 13

14 CONFIDENTIALITY AND DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Bessemer Street, Valley Glen, CA ( Property ). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence. By acknowledging your receipt of this Offering Memorandum for the Property, you agree: 1. The Offering Memorandum and its contents are confidential; 2. You will hold it and treat it in the strictest of confidence; and 3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller. Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered. If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum. A prospective purchaser s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property. This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum. 14

15 BESSEMER STREET VALLEY GLEN, CALIFORNIA EXCLUSIVELY LISTED BY DAVID HARRINGTON EVP & National Director direct (310) mobile (310) Lic # (CA)