1745 MAGNOLIA AVENUE. A 9-Unit Apartment Building in the Heart of Koreatown

Transcription

1 1745 MAGNOLIA AVENUE A 9-Unit Apartment Building in the Heart of Koreatown

2 OFFERING MEMORANDUM NEEMA AHADIAN First Vice President Investments Direct License CA LEONARDO LATERZA Associate Investments Direct License CA ACTIVITY ID: Non-Endorsement 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. Disclaimer THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express 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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap. All rights reserved MAGNOLIA AVENUE LOS ANGELES, CA INVESTMENT HIGHLIGHTS 3 PROPERTY DETAILS 10 LOCATION OVERVIEW 17 MARKET COMPARABLES 25 PRICING & FINANCIALS

3 1745 MAGNOLIA AVENUE KOREATOWN INVESTMENT HIGHLIGHTS 9-Unit Offering in Koreatown Withing Walking Distance to Retail and Public Transit 9 Secure Parking Spaces (Access from Alley) Value Add Opportunity - Pro Forma CAP Rate Above 7% Separately Metered for Gas & Electric - Washer & Dryer Hookups Available in Structure Adjacent to New Development Security Camera System in Place

4 PROPERTY SUMMARY 1745 MAGNOLIA AVENUE, LOS ANGELES CA APN Zoning SITE DESCRIPTION Number of Units 9 Number of Buildings 1 Number of Stories 2 Year Built 1959 Gross Square Feet Lot Size Type of Ownership Parking LARD1.5 6,016 SF 7,928 SF Fee Simple 4 Tuck Under Spaces; 5 Uncovered Spaces UTILITIES Water Electric Gas CONSTRUCTION Foundation Framing Exterior Roof MECHANICAL Laundry Plumbing Master Metered Separately Metered Separately Metered Concrete Wood Stucco Pitched Existing Plumbing for Laundry Machines Galvanized

5 VERY WALKABLE 86 Most errands can be accomplished on foot. GOOD TRANSIT 68 Many nearby public transportation options. BIKEABLE 64 Flat as a pancake, minimal bike lanes.

6 Koreatown Multicultural & Dynamic Koreatown, located west of Downtown L.A. and south of Hollywood, is one of the most diverse neighborhoods in Los Angeles. Encompassing roughly three square miles, the area was once the epicenter of Golden Age Hollywood, home to the Ambassador Hotel, the Coconut Grove and the Brown Derby. Today, Korean and Latino populations contribute to Koreatown s rich cultural diversity. Koreatown is also known for having one of the largest concentrations of nightclubs and 24-hour businesses and restaurants in the country. In the 1920s and '30s it was very much a swinging spot for Hollywood celebrities and was the location of the Ambassador Hotel, which hosted the Academy Awards in the '30s and '40s (and was also the site of the Robert F. Kennedy assassination). Though the Ambassador was torn down in 2005, you can still see some remnants of that old glamour in other buildings scattered among the newer strip malls and construction. Heavy Korean settlement in the area cemented the neighborhood as Koreatown in the 1970s, when many South Koreans immigrated to California. In 1992 Koreatown bore the brunt of much of the violence and looting that happened during the L.A. riots, and many Koreans fled to the suburbs after the riots. But renewed development in the early 2000s, plus a new subway line with stations in the neighborhood, led to a revitalization of the area. Wherever you go, you will hear Korean, Spanish and English and often a mashup of all three. This blend of cultures has led to some of L.A.'s most recognized food, the original Korean taco truck. While L.A. has the nation's largest Korean population and Koreans make up the largest nationality in the neighborhood (22 percent) most of the residents of Koreatown are Latino (58 percent). But you can also find Bangladeshi, Brazilian, Vietnamese, Pakistani and all manner of South American residents, businesses and eateries in the area. Twenty-four hour restaurants are just the beginning. Koreatown is home to more nightlife than many other entire cities can claim, from dive bars to high-end cocktail speakeasies, from karaoke clubs to establishments that must be a business of some sort, on the second level of a strip mall with a sign in Korean and people coming and going at 4 a.m. There's a lot of mystery here, but also a lot on full display. (Rodell, 2015)

7 pico union Central, Multicultural + Rapidly Developing The first major signs of gentrification arrived in January 2015 in the form of a five-story, 149-room hotel, by Developers CK Hospitality, with 8,600 square feet of street-level restaurant space, an outdoor pool deck, and a 113-car underground garage just down Olympic Boulevard from the Times Square of Los Angeles, LA Live, according to Building Los Angeles. The new hotel will be just a half mile away, but this is the first big development in the area to be built west of the 110 Freeway since LA Live opened. The underground garage is significant since many new developments prefer to relegate all their parking to a cheaper parking podium beneath or beside the main building. Still, it s hard to know whether the new hotel will be a good thing for long-neglected Pico-Union, or the first sign of a wave of gentrification that could radically alter the neighborhood, which is 85 percent Latino and has a median income of $26,424, according to the LA Times mapping project, as well as a historic and desirable housing stock. The intense gentrification of Downtown over the past decade has just recently started seeping into adjacent neighborhoods, including Pico-Union, which is just northeast. pico union redevelopment project The Pico Union 2 Redevelopment Project contains 227 acres and is located approximately two miles southwest of the Central Business District. The Project is bounded generally by Olympic Boulevard on the north, Union and Burlington Avenues on the east, the Santa Monica Freeway on the south and Hoover Street on the west. The Pico Union 2 Redevelopment Plan was originally adopted by the Los Angeles City Council on November 27, 1976, and amended on May 9, The Plan sets forth a variety of goals ranging from neighborhood revitalization, historic preservation, public improvements, commercial development and construction of affordable new housing. LOS ANGELES, CALIFORNIA

8 SALES COMPARABLES 1745 MAGNOLIA AVENUE, LOS ANGELES SALES COMPARABLES 1745 MAGNOLIA AVENUE, LOS ANGELES subject property MAGNOLIA AVENUE LOS ANGELES, CA Offering Price: $1,600, IROLO STREET LOS ANGELES, CA Sale Price: $1,475, CATALINA STREET LOS ANGELES, CA Sale Price: $1,200,000 1 Close of Escrow On Market No. of Units: 9 Close of Escrow: 9/18/2017 No. of Units: 8 Close of Escrow: 8/24/2017 No. of Units: 6 sales comparables 5 Year Built: 1959 Price/Unit: $177,778 Price/SF: $ CAP Rate: 3.80% Year Built: 1940 Price/Unit: $184,375 Price/SF: $ CAP Rate: Year Built: 1960 Price/Unit: $200,000 Price/SF: $ CAP Rate: [ 1 ] IROLO STREET GRM: GRM: GRM: [ 2] 1022 SOUTH CATALINA STREET [ 3 ] 1109 SOUTH ARDMORE AVENUE [ 4 ] 1401 SOUTH MANHATTAN PLACE [ 5 ] 1475 VENICE BOULEVARD 8 1 BD/1 BA 1 2 BD/1 BA 8 Single/1 BA 1 Single/1 BA 4 1 BD/1 BA 1 2 BD/1 BA LOS ANGELES, CALIFORNIA THE NEEMA GROUP AT MARCUS & MILLICHAP

9 SALES COMPARABLES 1745 MAGNOLIA AVENUE, LOS ANGELES SALES COMPARABLES 1745 MAGNOLIA AVENUE, LOS ANGELES SOUTH ARDMORE AVENUE LOS ANGELES, CA SOUTH MANHATTAN PLACE LOS ANGELES, CA VENICE BOULEVARD LOS ANGELES, CA Sale Price: $1,250,000 Sale Price: $2,500,000 Sale Price: $1,745,000 Close of Escrow: 8/15/2017 Close of Escrow: 6/9/2017 Close of Escrow: 5/17/2017 No. of Units: 6 No. of Units: 15 No. of Units: 10 Year Built: 1962 Year Built: 1962 Year Built: 1954 Price/Unit: $208,333 Price/Unit: $166,667 Price/Unit: $174,500 Price/SF: $ Price/SF: $ Price/SF: $ CAP Rate: 4.52% CAP Rate: CAP Rate: 4.00% GRM: GRM: GRM: PROPERTY YEAR BUILT NO. OF RENT - SINGLE RENT - 1 BD/1 BA RENT - 2 BD/1 BA 3 1 BD /1 BA 15 Single /1 BA 10 1 BD /1 BA [ 1 ] 1443 SOUTH BONNIE BRAE, LOS ANGELES CA $1,395 [ 2 ] 1633 SOUTH BURLINGTON AVENUE, LOS ANGELES CA $1, BD/1 BA [ 3 ] 1317 SOUTH WESTLAKE AVENUE, LOS ANGELES CA $1, BD/2 BA [ 4 ] 1766 MAGNOLIA, LOS ANGELES CA $1,700 LOS ANGELES, CALIFORNIA THE NEEMA GROUP AT MARCUS & MILLICHAP

10 RENT ROLL 1745 MAGNOLIA AVENUE, LOS ANGELES FINANCIAL ANALYSIS 1745 MAGNOLIA AVENUE, LOS ANGELES Unit # Unit Type SF Current Rents Proforma Rents 1 1 BD/1 BA 650 $1,350 $1, BD/1 BA 650 $975 $1, BD/1 BA 650 $597 $1, BD/1 BA 650 $1,007 $1, BD/1 BA 650 $1,350 $1, BD/1 BA 650 $954 $1, BD/1 BA 650 $704 $1, BD/1 BA 650 $955 $1, BD/1 BA 800 $1,191 $1,850 TOTAL $9,083 $14, MAGNOLIA AVENUE, LOS ANGELES Price $1,600,000 Down Payment 45% / $720,000 Number of Units 9 Price/Unit $177,778 Gross Square Feet 9,352 Price/SF $ CAP Rate - Current 3.72% CAP Rate - Pro Forma 7.37% GRM - Current GRM - Pro Forma 9.26 Year Built 1959 Lot Size 7,929 SF Type of Ownership Fee Simple ANNUALIZED OPERATING DATA INCOME CURRENT PRO FORMA Gross Potential Rent $108,996 $171,000 Other Income: Laundry $0 $150 Gross Scheduled Income $108,996 $172,800 Less: Vacancy Rate Reserve 3.0%/($3,270) 5.0%/($8,640) Gross Operating Income $105,726 $164,160 Less: Expenses 42.4%/($46,184) 26.7%/($46,184) Net Operating Income $59,542 $117,976 Less: Reserves ($1,800) ($1,800) Less: Loan Payments ($49,506) ($49,506) Pre-Tax Cash Flow 1.1%/$8, %/$68,470 Plus Principal Reduction $16,088 $16,088 Total Return 3.4%/$24, %/$84,558 FINANCING First Trust Deed Loan Amount $880,000 Interest Rate 3.85% Amortization 30 Years Loan information is time sensitive and subject to change. Contact your local Marcus & Millichap Capital Corporation representative. EXPENSES Real Estate Taxes (1.19%) $19,040 $19,040 Insurance $3,418 $3,418 Utilities $8,376 $8,376 Waste $3,000 $3,000 Repairs & Maintenance $4,500 $4,500 Landscaping $1,200 $1,200 Management Fee (5.0%) $5,450 $5,450 License & Permits $1,200 $1,200 Total Expenses $46,184 $46,184 Expenses/Unit $5,132 $5,132 Expenses/SF $7.68 $7.68 SCHEDULED INCOME NO. OF APPROX. SF CURRENT RENTS RENT/SF MONTHLY INCOME PRO FORMA RENTS RENT/SF MONTHLY INCOME 8 1 BD/1 BA $987 $7,892 $1,550 $12, BD/1 BA $1,191 $1,191 $1,850 $1,850 9 Total/Wtd.Avg. $9,083 $14,250 LOS ANGELES, CALIFORNIA THE NEEMA GROUP AT MARCUS & MILLICHAP

11 NEEMA AHADIAN First Vice President Investments Direct License CA LEONARDO LATERZA Associate Investments Direct License CA