1636 NORTH VENTURA AVENUE

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1 1636 NORTH VENTURA AVENUE VENTURA, CA OFFERING MEMORANDUM

2 N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E Non-Endorsements 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. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. 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. Â 2017 Marcus & Millichap. All rights reserved NORTH VENTURA AVENUE VENTURA, CA ACT ID Y

3 T A B L E O F C O N T E N T S 1. OFFERING SUMMARY 2. MARKET OVERIEW

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6 PROPERTY OVERVIEW Marcus & Millichap is pleased to present 1636 North Ventura Avenue in the city of Ventura, California. This sale presents the opportunity to purchase a single tenant industrial investment property. The subject property is currently occupied by Superior Machine Inc, a privately owned machine shop that has been in business for 28 years and has been at this location since The current lease has 1+ years remaining and extends through February of The lease structure is set up as a modified gross: tenant pays rent, utilities, fire insurance, common area maintenance and tenant s liability insurance; landlord pays property taxes and landlord s liability insurance. Current rent is $3,532 per month, providing for a yearly net operating income of $31,559. Market rate rent for this property is $5,200/month, approximately 47% higher than what the tenant is currently paying. Superior Machine has expressed interest in renewing a long-term lease. The site is comprised of two parcels that have a combined square footage of 14,892 square feet of land. A warehouse of approximately 4,284 square feet is positioned at the southern lot line, leaving a large, paved yard to the north. The structure has a desirable mix of office and warehouse space. The warehouse is constructed with structural steel framing, providing a convenient wide open floor plan. There are multiple cranes onsite. The yard, paved in concrete and fenced, is on a corner location allowing for access from multiple points. Yard space in the Ventura market is in high demand and adds considerable value to the property. Electrical service is from two panels: 200 amp, 240 volt, 3 phase and 70 amp, 240 volt, 1 phase. This power supply is greater than many of the surrounding properties and allows for many users with heavy power needs to operate from this location. Located in the Southern California coastal community of Ventura, the property is situated in a desirable infill market with an extremely low vacancy rate. As more and more industrial properties are repurposed for residential and creative office use, the supply of available industrially zoned properties is diminishing. Demand continues to grow for industrial properties as evidenced by the tight rental market. Proximate to Los Angeles, Santa Barbara and the Ventura Harbor, the subject property is well positioned to benefit from the growth and economic activity that has been taking place here for decades, and offers attractive long-term fundamental value. This sale offers the opportunity to purchase a single tenant industrial property in a desirable infill location. The property is set up in a practical and functional fashion and is well suited to many types of tenants. The property has attributes that will be attractive to investors, owner/users and long-term value seekers. Priced at $785,000. PROPERTY OVERVIEW PROPERTY HIGHLIGHTS Industrial Investment Property Desirable Infill Market Extremely Low Vacancy Rate Upside Potential: Current Rent is 47% Below Market Rate Attractive Long-Term Fundamental Value 6.57% Pro Forma CAP rate

7 TENANT AND LEASE SUMMARY TENANT Tenant Name Superior Machine Inc LANDLORD RESPONSIBILITIES Lease Type Modified Gross Square Feet Occupied 4,282 % Building Share 100% Lease Commencement 2/8/11 Lease Expiration 2/28/19 Annual Rent Per SF $9.75 Total Rent Per Month $3,532 Total Rent Per Year $42,386 Property Taxes Liability Insurance Fire Insurance Utilities CAM Landlord Landlord and Tenant Tenant Tenant Tenant Rent Increases 1.5% Annually 7

8 FINANCIAL OVERVIEW PRICING DETAIL Price $785,000 Down Payment 35% / 274,750 Number of Suites 1 Price Per SF $ Rentable Built Area (RBA) 4,282 SF Lot Size 0.34 Acres Year Built 1945 Occupancy 100% Cap Rate Current 4.02% Cap Rate Pro Forma 6.57% Cash-on-Cash Current -1.35% Cash-on-Cash Pro Forma 5.94% OPERATING DATA INCOME CURRENT PRO FORMA Scheduled Base Rental Income $42,384 $62,400 Potential Gross Revenue $42,384 $62,400 General Vacancy $0 $0 Effective Gross Income $42,384 $62,400 Less: Operating Expenses 25.5% / ($10.825) 21.2% / ($10,825) Net Operating Income $31,559 $51,575 Tenant Improvements $0 $0 Capital Expenditures $0 $0 Cash Flow $31,559 $51,575 Debt Service ($35,261) ($35,261) Net Cash Flow After Debt Service -1.35% / ($3,703) 5.94% / $16,313 Principal Reduction $10,751 $11,284 Total Return 2.57% / $7, % / $27,598 Debt Coverage Ratio Current 0.89 Debt Coverage Ratio Pro Forma 1.46 FINANCING Loan Amount $510,250 OPERATING EXPENSES EXPENSES CURRENT PRO FORMA Loan Type Proposed New CAM $0 $0 Interest Rate 4.85% Insurance $1,405 $1,405 Amortization 25 Years Real Estate Taxes $9,420 $9,420 Year Due 2027 Total Expenses $10,825 $10,825 8

9 FINANCING OPTIONS OPTION 1 CONVENTIONAL LOAN Program Conventional Down Payment 35% Loan Amount % (LTV) 65% Term 10 Years Amortization 25 Years Interest Rate 4.85% Third Parties TBD Origination Fee 1% ($7,500 min) Timing Days Quote is subject to a full review of the borrower s financials, subject property s operating history and site inspection. Quote is based upon a minimum appraised value and/or purchase price. Loan information is time sensitive and subject to change. Contact your local Marcus & Millichap Capital Corporation representative: Robert Hodge Associate Director, Capital Markets, (562)

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18 MARKET OVERVIEW VENTURA COUNTY OVERVIEW Ventura County is located along the coast of Southern California between Malibu and Santa Barbara, stretching across nearly 43 miles of coastline. The Pacific Ocean forms the southwestern boundary, with Los Angeles to the east, Kern County to the north and Santa Barbara County to the northwest. Oxnard is the most populous city, with more than 200,000 inhabitants, followed by the cities of Thousand Oaks and Simi Valley. METRO HIGHLIGHTS HIGH INCOMES The median household income is well above the national average, generating tax revenues and a need for goods and services. EMPLOYMENT GROWTH Robust gains in employment during the next five years will support household formation and a need for more housing options. NAVAL BASE VENTURA COUNTY Naval Base Ventura County (NBVC) generates large revenues for the local economy, supporting jobs in the government sector as well as with contractors serving the base. ECONOMY Due to Ventura County s proximity to Los Angeles, local businesses can capitalize on major air, ground, rail and port-served transportation networks, drawing companies. The expanding Ventura County economy is supported by the agriculture, health services and biomedicine, tourism and financial services industries. The technology segment also plays a growing role, with companies concentrating on Camarillo. Naval Base Ventura County (NBVC), which is composed of Port Hueneme, Point Mugu and San Nicolas Island (60 miles offshore), is a major aviation shore command and naval construction force mobilization site. DEMOGRAPHICS 2016 POPULATION: 854K Growth *: 3.8% 2016 HOUSEHOLDS: 278K Growth *: 4.3% 2016 MEDIAN AGE: 37.3 U.S. Median: MEDIAN HOUSEHOLD INCOME: $78,700 U.S. Median: $57,200 * Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody s Analytics; U.S. Census Bureau 18

19 DEMOGRAPHICS PROPERTY 1636 N VENTURA NAMEAV MARKETING TEAM POPULATION 1 Miles 3 Miles 5 Miles 2021 Projection Total Population 14,842 34,545 64, Estimate Total Population 14,547 34,000 62, Census Total Population 13,653 32,113 60, Census Total Population 13,057 31,629 57,917 Daytime Population 2016 Estimate 11,156 37,460 89,464 HOUSEHOLDS 1 Miles 3 Miles 5 Miles 2021 Projection Total Households 4,646 13,674 25, Estimate Total Households 4,531 13,402 25,203 Average (Mean) Household Size Census Total Households 4,229 12,516 23, Census Total Households 4,056 12,211 22,964 Source: 2016 Experian HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles 2016 Estimate $200,000 or More 1.58% 4.34% 5.85% $150,000 - $199, % 5.50% 6.96% $100,000 - $149, % 13.57% 15.64% $75,000 - $99, % 13.04% 13.96% $50,000 - $74, % 17.26% 16.33% $35,000 - $49, % 11.72% 11.85% $25,000 - $34, % 11.02% 9.15% $15,000 - $24, % 11.63% 10.36% Under $15, % 11.93% 9.91% Average Household Income $62,035 $77,311 $87,212 Median Household Income $46,526 $54,519 $62,151 Per Capita Income $19,465 $30,702 $35,193 POPULATION PROFILE 1 Miles 3 Miles 5 Miles Population By Age 2016 Estimate Total Population 14,547 34,000 62,923 Under % 23.93% 22.76% 20 to 34 Years 24.68% 22.74% 20.33% 35 to 39 Years 7.76% 7.28% 6.50% 40 to 49 Years 14.12% 14.73% 13.86% 50 to 64 Years 16.82% 20.88% 21.91% Age % 10.46% 14.64% Median Age Population 25+ by Education Level 2016 Estimate Population Age 25+ 9,010 23,566 44,635 Elementary (0-8) 12.31% 6.94% 4.51% Some High School (9-11) 15.22% 9.31% 7.37% High School Graduate (12) 23.07% 19.87% 18.68% Some College (13-15) 23.10% 24.57% 26.07% Associate Degree Only 7.08% 8.25% 8.91% Bachelors Degree Only 9.75% 16.68% 19.78% Graduate Degree 6.70% 12.82% 13.66% Time Travel to Work Average Travel Time in Minutes

20 DEMOGRAPHICS PROPERTY NAME MARKETING TEAM Population In 2016, the population in your selected geography is 14,547. The population has changed by 11.41% since It is estimated that the population in your area will be 14, five years from now, which represents a change of 2.03% from the current year. The current population is 51.24% male and 48.76% female. The median age of the population in your area is 32.23, compare this to the US average which is The population density in your area is 4, people per square mile. Race and Ethnicity The current year racial makeup of your selected area is as follows: 57.22% White, 1.68% Black, 0.16% Native American and 1.76% Asian/Pacific Islander. Compare these to US averages which are: 70.77% White, 12.80% Black, 0.19% Native American and 5.36% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 66.82% of the current year population in your selected area. Compare this to the US average of 17.65%. Households There are currently 4,531 households in your selected geography. The number of households has changed by 11.71% since It is estimated that the number of households in your area will be 4,646 five years from now, which represents a change of 2.54% from the current year. The average household size in your area is 3.09 persons. Housing The median housing value in your area was $342,528 in 2016, compare this to the US average of $187,181. In 2000, there were 1,599 owner occupied housing units in your area and there were 2,457 renter occupied housing units in your area. The median rent at the time was $647. Income In 2016, the median household income for your selected geography is $46,526, compare this to the US average which is currently $54,505. The median household income for your area has changed by 31.81% since It is estimated that the median household income in your area will be $53,311 five years from now, which represents a change of 14.58% from the current year. Employment In 2016, there are 3,459 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 46.99% of employees are employed in white-collar occupations in this geography, and 53.60% are employed in blue-collar occupations. In 2016, unemployment in this area is 12.42%. In 2000, the average time traveled to work was minutes. The current year per capita income in your area is $19,465, compare this to the US average, which is $29,962. The current year average household income in your area is $62,035, compare this to the US average which is $78,425. Source: 2016 Experian 20

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22 1636 NORTH VENTURA AVENUE VENTURA, CA EXCLUSIVELY LISTED BY