OFFERING MEMORANDUM. ROSCOE GARDENS Roscoe Blvd Panorama City, CA 91402

Transcription

1 OFFERING MEMORANDUM Roscoe Blvd Panorama City, CA

2 NON-ENDORSEMENT AND DISCLAIMER NOTICE Confidentiality and Disclaimer The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â 2017 Marcus & Millichap. All rights reserved. Non-Endorsement Notice 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. Panorama City, CA ACT ID Y

3 PRESENTED BY Catherine O'Brien Senior Associate Associate Member, National Multi Housing Group Encino Office Tel: (818) Fax: (818) License: CA

4 TABLE OF CONTENTS SECTION INVESTMENT OVERVIEW 01 Offering Summary Regional Map Local Map Aerial Photo FINANCIAL ANALYSIS 02 Rent Roll Summary Rent Roll Detail Operating Statement Notes Pricing Detail Acquisition Financing MARKET COMPARABLES 03 Sales Comparables Rent Comparables MARKET OVERVIEW 04 Market Analysis Demographic Analysis 4

5 INVESTMENT OVERVIEW 5

6 OFFERING SUMMARY EXECUTIVE SUMMARY VITAL DATA Price Down Payment Loan Type $2,399, % / $2,399,000 All Cash Price/Unit $199,917 Price/SF $ Number of Units Rentable Square Feet 12 CAP Rate GRM Net Operating Income Net Cash Flow After Debt Service Total Return CURRENT YEAR % 5.66% $103,707 $135, % / $103, % / $135,749 Sizzler 3, % / $103, % / $135,749 Fire Dept-Station 98 3,000 Kaiser Permanente 3,000 Los Angeles Dept Wtr & Pwr 2,071 Los Angeles Unified School Dst 1,854 VPH 1,600 Providence Holy Cross Med Ctr 1,360 Providence Health System 1,200 Penny Lane Centers 1,123 Police Dept 1,120 9,814 Year Built / Renovated 1957 / 1960 Lot Size 0.34 acre(s) UNIT MIX NUMBER OF UNITS UNIT TYPE 9 1Bed +1Bath 3 2Bed +1Bath 12 Total MAJOR EMPLOYERS APPROX. SQUARE FEET EMPLOYER # OF EMPLOYEES Water & Power Dept 999 Target 954 DEMOGRAPHICS 9,814 1-Miles 3-Miles 5-Miles 2016 Estimate Pop 48, , , Census Pop 47, , , Estimate HH 12, , , Census HH 12,310 98, ,746 Median HH Income $42,765 $42,862 $49,649 Per Capita Income $15,156 $17,052 $22,214 Average HH Income $57,922 $60,850 $71,808 #6

7 OFFERING SUMMARY INVESTMENT OVERVIEW This turn key offering at Roscoe Boulevard is a 12-unit multifamily property situated on a 9,852-square foot lot. The building's unit mix consists of nine onebedroom/one-bathroom units, two two-bedroom/one-bathroom units, and one two-bedroom/one-and-a-half bathroom units. The property features a lush courtyard with new landscaping, brand new roof, ample parking, and an on-site laundry facility. Located at the intersection of Hazeltine Avenue and Roscoe Boulevard, the property is just a few blocks from the Walmart-anchored Panorama Mall. The Van Nuys Plant shopping center, including Home Depot, Living Spaces, Starbucks, Gap, Chipotle, In-n-Out Burger, and a 16-screen movie theater is less than a mile from the building. Tenants are less than two miles from the 405 Freeway, while also less than five miles from the 5, 118, and 170 Freeways. INVESTMENT HIGHLIGHTS Excellent Unit Mix Tremendous Rental Upside On-Site Laundry Facility Brand New Roof with Warranty Pride of Ownership Copper Plumbing Wood Laminate Flooring New Paint 7

8 OFFERING SUMMARY PROPERTY SUMMARY PROPOSED FINANCING THE OFFERING Property Roscoe Gardens Price $2,399,000 Property Address Roscoe Blvd, Panorama City, CA Assessor s Parcel Number First Trust Deed Loan Type All Cash Debt Coverage Ratio Zoning R3-1, Los Angeles SITE DESCRIPTION Number of Units Year Built/Renovated Rentable Square Feet ,814 Lot Size 0.34 acre(s) Type of Ownership Fee Simple 8

9 REGIONAL MAP 9

10 LOCAL MAP 10

11 AERIAL PHOTO 11

12 FINANCIAL ANALYSIS 12

13 RENT ROLL SUMMARY FINANCIAL ANALYSIS 13

14 RENT ROLL DETAIL FINANCIAL ANALYSIS 14

15 OPERATING STATEMENT FINANCIAL ANALYSIS 15

16 NOTES FINANCIAL ANALYSIS 16

17 PRICING DETAIL FINANCIAL ANALYSIS 17

18 ACQUISITION FINANCING MARCUS & MILLICHAP CAPITAL CORPORATION CAPABILITIES WHY MMCC? MMCC our fully integrated, dedicated financing arm is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and terms. We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of financing options. Our dedicated, knowledgeable experts understand the challenges of financing and work tirelessly to resolve all potential issues to the benefit of our clients. Optimum financing solutions to enhance value Our ability to enhance buyer pool by expanding finance options Our ability to enhance seller control Through buyer qualification support Our ability to manage buyers finance expectations Ability to monitor and manage buyer/lender progress, insuring timely, predictable closings Closed 1,651 debt and equity financings in 2016 National platform operating within the firm s brokerage offices $5.1 billion total national volume in 2016 Access to more capital sources than any other firm in the industry By relying on a world class set of debt/equity sources and presenting a tightly underwritten credit file 18

19 MARKET COMPARABLES 19

20 SALES COMPARABLES MAP (SUBJECT) Roscoe Blvd Roscoe Blvd Tiara St Saticoy St Wilkinson Ave Blythe St 7 CHENG, EILEEN S & MICHAEL HL Tupper Avenue Saticoy St 10 Orion Gardens Apartments Vanowen St Basset Avenue Kester Ave Vanowen St Fulton Ave 16 Siranush & Akop Bagdatyan SALES COMPARABLES IN ESCROW COMPARABLES ON MARKET COMPARABLES 20

21 PROPERTY ROSCOE GARDENS NAME SALES COMPARABLES SALES COMPARABLES SALES COMPS AVG IN ESCROW COMPARABLES IN ESCROW COMPS AVG ON MARKET COMPARABLES ON MARKET COMPS AVG Average Cap Rate Avg. 5.44% Avg. 5.01% 5.6 Avg. 4.52% Roscoe Gardens Roscoe Blvd Roscoe Blvd Tiara St Saticoy St 6635 Wilkinson Ave Blythe St CHENG, EILEEN S & MICHAEL HL Tupper Avenue Saticoy St Orion Gardens Vanowen St Apartments Basset Avenue 7304 Kester Ave Vanowen St 6949 Fulton Ave Siranush & Akop Bagdatyan 21

22 PROPERTY ROSCOE GARDENS NAME SALES COMPARABLES SALES COMPARABLES SALES COMPS AVG IN ESCROW COMPARABLES IN ESCROW COMPS AVG ON MARKET COMPARABLES ON MARKET COMPS AVG Average GRM Avg Avg Avg Roscoe Gardens Roscoe Blvd Roscoe Blvd Tiara St Saticoy St 6635 Wilkinson Ave Blythe St CHENG, EILEEN S & MICHAEL HL Tupper Avenue Saticoy St Orion Gardens Vanowen St Apartments Basset Avenue 7304 Kester Ave Vanowen St 6949 Fulton Ave Siranush & Akop Bagdatyan 22

23 PROPERTY ROSCOE GARDENS NAME SALES COMPARABLES SALES COMPARABLES SALES COMPS AVG IN ESCROW COMPARABLES IN ESCROW COMPS AVG ON MARKET COMPARABLES ON MARKET COMPS AVG Average Price Per Square Foot $ $ Avg. $ Avg. $ $ $ Avg. $ $ $ $ $90.00 $60.00 $30.00 $0.00 Roscoe Gardens Roscoe Blvd Roscoe Blvd Tiara St Saticoy St 6635 Wilkinson Ave Blythe St CHENG, EILEEN S & MICHAEL HL Tupper Avenue Saticoy St Orion Gardens Vanowen St Apartments Basset Avenue Kester Ave Vanowen St 6949 Fulton Ave Siranush & Akop Bagdatyan 23

24 PROPERTY ROSCOE GARDENS NAME SALES COMPARABLES SALES COMPARABLES SALES COMPS AVG IN ESCROW COMPARABLES IN ESCROW COMPS AVG ON MARKET COMPARABLES ON MARKET COMPS AVG Average Price Per Unit $300,000 $270,000 $240,000 $210,000 Avg. $193,417 Avg. $182,953 $180,000 Avg. $163,333 $150,000 $120,000 $90,000 $60,000 $30,000 $0 Roscoe Gardens Roscoe Blvd Roscoe Blvd Tiara St Saticoy St 6635 Wilkinson Ave Blythe St CHENG, EILEEN S & MICHAEL HL Tupper Avenue Saticoy St Orion Gardens Vanowen St Apartments Basset Avenue Kester Ave Vanowen St 6949 Fulton Ave Siranush & Akop Bagdatyan 24

25 PROPERTY ROSCOE GARDENS NAME SALES COMPARABLES MARKETING TEAM SALES COMPARABLES IN ESCROW COMPARABLES ON MARKET COMPARABLES ROSCOE BLVD Roscoe Blvd, Panorama City, CA, Roscoe Blvd, Panorama City, CA, Roscoe Blvd, Panorama City, CA, ROSCOE BLVD Units Unit Type Offering Price: $2,399, Bed +1Bath Close Of Escrow: 1/7/2016 Close Of Escrow: 8/10/2016 Price/Unit: $199, Bed +1Bath Sales Price: $1,530,000 Sales Price: $1,225,000 Price/SF: $ Price/Unit: $170,000 Price/Unit: $136,111 CAP Rate: 4.32% Price/SF: $ Price/SF: $ GRM: CAP Rate: 5.69% Total No. of Units: 9 Total No. of Units: 12 GRM: Year Built: 1950 Year Built: Total No. of Units: 9 Year Built: Underwriting Criteria Income $159,885 NOI $103,707 Expenses $56,178 25

26 PROPERTY ROSCOE GARDENS NAME SALES COMPARABLES MARKETING TEAM SALES COMPARABLES IN ESCROW COMPARABLES ON MARKET COMPARABLES 6635 WILKINSON AVE SATICOY ST TIARA ST 6635 Wilkinson Ave, North Hollywood, CA, Saticoy St, Van Nuys, CA, Tiara St, Van Nuys, CA, Units Unit Type Close Of Escrow: 11/23/ Studio 1 Bath Close Of Escrow: 10/1/ Bdr 1 Bath Close Of Escrow: 3/6/ Bdr 1 Bath Days On Market: Bdr 1 Bath Days On Market: Bdr 1 Bath Sales Price: $3,850, Bdr 1 Bath Sales Price: $1,390, Bdr 1 Bath Sales Price: $2,607,955 Price/Unit: $226, Bdr 2 Bath Price/Unit: $198, Bdr 2 Bath Price/Unit: $186,282 Price/SF: $ Price/SF: $ Price/SF: $ CAP Rate: 4.22% CAP Rate: 4.54% Total No. of Units: 14 GRM: GRM: Year Built: 1964 Total No. of Units: 17 Total No. of Units: 7 Year Built: 1960 Year Built: 1964 Units Unit Type Units Unit Type 26

27 PROPERTY ROSCOE GARDENS NAME SALES COMPARABLES MARKETING TEAM SALES COMPARABLES IN ESCROW COMPARABLES BLYTHE ST Blythe St, Panorama City, CA, ON MARKET COMPARABLES CHENG, EILEEN S & MICHAEL HL 8912 Van Nuys Blvd, Panorama City, CA, Tupper St, Panorama City, CA, TUPPER AVENUE Close Of Escrow: 11/9/2016 Close Of Escrow: 10/31/2016 Close Of Escrow: 1/24/2017 Sales Price: $1,780,000 Sales Price: $2,620,000 Sales Price: $2,100,000 Price/Unit: $148,333 Price/Unit: $145,556 Price/Unit: $233,333 Price/SF: $ Price/SF: $ Price/SF: $ CAP Rate: 4.70% CAP Rate: 7.86% CAP Rate: 5.10% Total No. of Units: 12 GRM: GRM: Year Built: 1956 Total No. of Units: 18 Total No. of Units: 9 Year Built: 1960 Year Built:

28 PROPERTY ROSCOE GARDENS NAME SALES COMPARABLES MARKETING TEAM SALES COMPARABLES IN ESCROW COMPARABLES ON MARKET COMPARABLES VANOWEN ST ORION GARDENS APARTMENTS SATICOY ST Vanowen St, North Hollywood, CA, Orion Ave, North Hills, CA, Saticoy St, Van Nuys, CA, Units Unit Type Close Of Escrow: 10/1/ Bdr 1 Bath Close Of Escrow: 11/17/ Studio 1 Bath Close Of Escrow: 5/27/ Bdr 1 Bath Days On Market: Bdr 1 Bath Days On Market: Bdr 1 Bath Sales Price: $1,110, Bdr 1 Bath Sales Price: $2,607,955 Sales Price: $7,210, Bdr 2 Bath Price/Unit: $185,000 Price/Unit: $186,282 Price/Unit: $180,250 Price/SF: $ Price/SF: $ Price/SF: $ CAP Rate: 5.56% Total No. of Units: 14 CAP Rate: 6.05% GRM: Year Built: 1963 Total No. of Units: 40 Total No. of Units: 6 Year Built: 1964 Year Built: 1954 Units Unit Type Units Unit Type 28

29 PROPERTY ROSCOE GARDENS NAME SALES COMPARABLES MARKETING TEAM SALES COMPARABLES IN ESCROW COMPARABLES BASSET AVENUE Basset Avenue, Van Nuys, CA, ON MARKET COMPARABLES 7304 KESTER AVE 7304 Kester Ave, Van Nuys, CA, Vanowen St, Van Nuys, CA, VANOWEN ST Close Of Escrow: 12/8/2015 Close Of Escrow: 8/17/2016 In Escrow Days On Market: 91 Sales Price: $3,225,000 List Price: $2,865,000 Sales Price: $770,000 Price/Unit: $189,706 Price/Unit: $191,000 Price/Unit: $192,500 Price/SF: $ Price/SF: $ CAP Rate: 4.92% CAP Rate: 5.78% CAP Rate: 4.52% GRM: GRM: Total No. of Units: 15 Total No. of Units: 4 Total No. of Units: 17 Year Built: 1953 Year Built: 1952 Year Built:

30 PROPERTY ROSCOE GARDENS NAME SALES COMPARABLES MARKETING TEAM SALES COMPARABLES IN ESCROW COMPARABLES ON MARKET COMPARABLES SIRANUSH & AKOP BAGDATYAN 6949 FULTON AVE 8154 Sepulveda Pl, Panorama City, CA, Fulton Ave, North Hollywood, CA, Units In Escrow Unit Type Units 2 1 Bdr 1 Bath On Market Bdr 1 Bath Days On Market: 50 Days On Market: 54 List Price: $1,175,000 List Price: $980,000 Price/Unit: $195,833 Price/Unit: $163,333 Price/SF: $ Price/SF: $ Total No. of Units: 6 CAP Rate: 5.01% Year Built: 1957 GRM: Total No. of Units: 6 Year Built: 1952 Unit Type 2 Bdr 1 Bath Underwriting Criteria Income $84,588 Expenses $32,990 NOI $49,091 Vacancy $2,507 30

31 8 RENT COMPARABLES MAP (SUBJECT) Tilden Ave Cedros Avenue 3 North Hills Village Apartments Valerio St Rayen St Vanowen St Willis Avenue 8 Lam, Donna

32 PROPERTY ROSCOE GARDENS NAME RENT COMPARABLES AVERAGE OCCUPANCY Avg % Roscoe Gardens 8635 Tilden Ave 8437 Cedros Avenue North Hills Village Apartments Valerio St Rayen St Vanowen St 8404 Willis Avenue Lam, Donna 32

33 PROPERTY ROSCOE GARDENS NAME RENT COMPARABLES AVERAGE RENT - MULTIFAMILY 2 Bedroom 1 Bedroom $2,000 $2,000 $1,800 Avg. $1,611 $1,800 $1,600 $1,600 $1,400 $1,400 $1,200 $1,200 $1,000 $1,000 $800 $800 $600 $600 $400 $400 $200 $200 $0 Avg. $1,329 $0 Roscoe Gardens Cedros North Hills Tilden Ave Avenue Village Valerio St Apartments Willis Lam, Donna Rayen St Vanowen St Avenue Roscoe Gardens Cedros North Hills Tilden Ave Avenue Village Valerio St Apartments Willis Lam, Donna Rayen St Vanowen St Avenue 33

34 PROPERTY ROSCOE GARDENS NAME RENT COMPARABLES MARKETING TEAM 8437 CEDROS AVENUE 8635 TILDEN AVE ROSCOE GARDENS 8635 Tilden Ave, Panorama City, CA, Roscoe Blvd, Panorama City, CA, Cedros Ave, Panorama City, CA, Unit Type Units SF Rent Rent/SF Rent Rent/SF Rent Rent/SF 1Bed +1Bath 9 $1,034 $ Bdr 1 Bath 2 $1,795 1 Bdr 1 Bath $1,250 $1.67 2Bed +1Bath 3 $1,279 $0.00 Total/Avg. 2 $1,795 Total/Avg $1,250 $1.67 Total/Avg. 12 $1,095 Unit Type Units SF YEAR BUILT: 1957 Unit Type Units SF YEAR BUILT:

35 PROPERTY ROSCOE GARDENS NAME RENT COMPARABLES MARKETING TEAM NORTH HILLS VILLAGE APARTMENTS RAYEN ST VALERIO ST Parthenia St, North Hills, CA, Valerio St, Van Nuys, CA, Rayen St, Panorama City, CA, Unit Type Units SF Unit Type Units SF Rent Rent/SF Rent Rent/SF 1 Bdr 1 Bath $1,350 $ Bdr 1 Bath 30 $1,450 2 Bdr 2 Bath 4 $1,650 Total/Avg $1,350 $1.53 Total/Avg. 30 $1,450 Total/Avg. 4 $1,650 YEAR BUILT: 1970 YEAR BUILT: 1956 Unit Type Units SF Rent Rent/SF YEAR BUILT:

36 PROPERTY ROSCOE GARDENS NAME RENT COMPARABLES MARKETING TEAM VANOWEN ST 8404 Willis Ave, Van Nuys, CA, Tobias Ave, Panorama City, CA, Unit Type LAM, DONNA 8404 WILLIS AVENUE Vanowen St, Panorama City, CA, Units Unit Type Units SF Rent Rent/SF SF Rent Rent/SF 2 Bdr 1.5 Bath 11 1,000 $1,450 $ Bdr 1.5 Bath $1,550 1 Bdr 1 Bath $1,265 Total/Avg. 11 1,000 $1,450 $1.45 Total/Avg. $1,550 Total/Avg. $1,265 OCCUPANCY: 98% YEAR BUILT: 1963 Unit Type Units SF Rent Rent/SF OCCUPANCY: 98% YEAR BUILT:

37 MARKET OVERVIEW 37

38 MARKET OVERVIEW SAN FERNANDO VALLEY OVERVIEW Approximately 2.5 million people reside in the San Fernando Valley, which includes the submarkets of Northridge-Northwest San Fernando METRO HIGHLIGHTS Valley, Van Nuys-Northeast San Fernando Valley, Woodland Hills, Burbank-Glendale-Pasadena and Sherman Oaks-North Hollywood- DIVERSE ECONOMY Encino. The area s population is expected to increase by 50,000 new While the entertainment industry underpins the economy, other economic drivers include aerospace, insurance and healthcare. residents through Many people are attracted by the region s more affordable home prices. EDUCATED WORKFORCE Roughly 35 percent of San Fernando Valley s age 25 and older population hold a bachelor s degree and 12 percent also obtained a graduate or professional degree. POPULATION AND HOUSEHOLD GROWTH Population and household growth will increase faster than other large metros in Southern California, generating a demand for housing, and goods and services. ECONOMY Known for its entertainment industry, the Valley boasts more than 100 soundstages. Entertainment giants calling the Valley home include Walt Disney Co., Universal Studios, Warner Brothers, DreamWorks and Paramount Ranch. Aerospace giants Boeing and Northrop Grumman as well as 21st Century Insurance generate numerous well-paying jobs. Healthcare is also a major source of employment with providers that include Kaiser Permanente and Providence Health & Services. As a result of its large concentration of high salaries and successful companies, household incomes are above the national average. DEMOGRAPHICS 2016 POPULATION: 2016 HOUSEHOLDS: 2016 MEDIAN AGE: Growth *: Growth *: U.S. Median: 2.5M 1.9% 873K 2.3% MEDIAN HOUSEHOLD INCOME: $62,700 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 38

39 MARKET OVERVIEW LOS ANGELES COUNTY Diverse Price Points, Yields and Trade-Up Opportunities Expand Buyer Pool Multifamily 2017 Outlook Metro s full employment status fuels rental demand as delivery spike commences. Diversified job growth will persist this year, albeit at a slower pace than previous periods. With Los Angeles County s unemployment rate hovering below 5 percent, employers struggle to fill openings, moderating growth. Additions by government, hospitality, business services and healthcare organizations support household formations and demand for apartments across all asset classes. Ever-rising housing costs also prove beneficial to the rental sector, as the metro s media median home price reaches a record high, further limiting residential options and keeping demand strong for multifamily units. New supply tests historically low vacancy. The completion of 11,000 units this year will measure demand for newly built product, with deliveries likely to outpace steady absorption and expand vacancy beyond 3 percent. Conditions during the second half, however, will vary according to submarket. Westside Cities will witness a dearth of new rentals while local economic expansion persists, heightening demand for luxury rentals. An initial wave of larger apartment deliveries in Downtown Los Angeles should inflate submarket vacancy by triple-digit basis points, with future upticks likely as completion volume rises next year. However, overall vacancy will remain tight and combined with steady demand rent growth will continue seeing increases at twice the rate of inflation. * Trailing 12 months through 2Q17 Sources: CoStar Group, Inc.; Real Capital Analytics Vacancy Y-O-Y Basis Point Change Downtown Los Angeles 3.8% 40 $2, % San Fernando Valley 3.2% 40 $1,955 % South Bay/Long Beach 2.6% 20 $1, % Westside Cities 3.5% 20 $2, % Los Angeles 3.3% 40 $2, % Metro Effective Rent Y-O-Y Change Investment Trends Private investors are most active in the Pasadena/Glendale/Burbank, Long Beach/Ports and Studio City/North Hollywood submarkets, where pre-1970s -built complexes offer buyers attractive upside. Silicon Beach continues to attract institutions, with firms willing to pay upward of $500,000 per unit for newer or smaller luxury apartments in Santa Monica and other Westside Cities. Buyer competition in this submarket has compressed minimal yields below 4 percent. Trades involving post-2000-built assets remained concentrated in the metro s core, namely Downtown Los Angeles. An uptick in core-located apartment deliveries during the next 18 months could heighten the volume of newly built projects that trade, with cap rates commonly in the low- to mid-4 percent range. Metrowide transactions closed at an average cap rate in the low-4 percent range over the past year. Buyers in search of higher-yielding opportunities in the core targeted Mid-Wilshire and Koreatown, where 5 percent returns are obtainable. Investors seeking suburban product and higher returns pursued deals in Van Nuys and Westlake. 39

40 MARKET OVERVIEW LOS ANGELES COUNTY 2Q17 12-Month Period * Forecast EMPLOYMENT 1.8% CONSTRUCTION increase in total employment Y-O-Y Metro employers created 77,300 jobs over the past year, led by growth in the hospitality, technology and healthcare sectors. While the pace of improvement has moderated, employment growth exceeds the national rate increase. Labor market growth lowered the unemployment rate to 4.6 percent in May, a 770-basis-point drop since Year over year, the rate declined by 80 basis points. 10,649 units completed Y-O-Y Developers increased deliveries by roughly 61 percent over the past year, with 5,385 rentals completed in Downtown Los Angeles. The San Fernando Valley/Tri-Cities and South Bay/Long Beach submarkets welcomed a combined 3,265 new apartments. Builders are underway on 27,358 units, including 15,079 rentals in Downtown Los Angeles. RENTS VACANCY 10 basis point increase in vacancy Y-O-Y Vacancy rose to 2.9 percent over the past 12 months on net absorption of 8,429 apartments. Metro availability has remained relatively unchanged over the past two years. Each of the metro s primary regions entered the second half at sub-4 percent vacancy. Absorption was most pronounced in Downtown Los Angeles and Hollywood. in effective 3.1% increase rents Y-O-Y A slight uptick in vacancy did not hinder rent growth, with the average effective rate advancing to $2,020 per month. Rent growth was most evident in the Westside Cities, where the effective rate increased 4.9 percent to more than $3,000 per month. Rents in both the South Bay/Long Beach and San Fernando Valley/Tri-Cities regions climbed nearly 4 percent, eclipsing $2,000 per month. 40

41 MARKET OVERVIEW LOS ANGELES COUNTY Submarket Trends Lowest Vacancy Rates 2Q17* Submarket *Mortgage payments based on quarterly median home price with a 30-year fixed-rate conventional mortgage, 90% LTV, taxes, insurance and PMI. ** Annualized Rate Sales Trends Value-Add Transactions in More Affordable Submarkets Support Deal Flow Sales velocity slowed by 5 percent when compared with the previous time period as buyers remained slightly cautious regarding interest rate hikes and proposed tax policies and available assets remained limited. The average price per unit advanced 17.5 percent to $274,000, driven by Westside Cities assets that routinely trade for more than $500,000 per door. Outlook: Tight vacancy and consistent rent growth will attract more investors to both luxury and Class B/C properties, with buyers eager to acquire assets prior to an influx of deliveries and value-add executions. ** Trailing 12 months through 2Q17 Pricing trend sources: CoStar Group, Inc.; Real Capital Analytics Vacancy Rate Y-O-Y Basis Point Change Effective Rent Y-O-Y % Change South Los Angeles 1.5% 20 $1, % Southeast Los Angeles 1.8% -60 $1, % East Los Angeles 1.9% -10 $1, % Antelope Valley 2.1% 20 $1, % South San Gabriel Valley 2.2% -50 $1, % Van Nuys/Northeast San Fernando Valley 2.3% 60 $1, % Santa Monica-Marina del Rey 2.4% -40 $3, % North San Gabriel Valley 2.5% -10 $1, % Brentwood/Westwood/B everly Hills 2.7% 0 $3, % Santa Clarita Valley 2.7% -100 $1, % Overall Metro 2.9% 10 $2, % * Lowest 10 vacancy rates 41

42 MARKET OVERVIEW LOS ANGELES METRO AREA: GREATER DOWNTOWN LOS ANGELES Investment Trends The revitalization of the Greater Downtown Los Angeles area persists as development remains robust. The delivery of 2 million square feet of office space this year signals future localized job growth, drawing new residents and investors to the region during a time of heightened multifamily construction. Entering the second half, more than 15,000 units are underway, largely spread between downtown high-rises and mid-rise projects to the west in the Mid-Wilshire submarket. Steady deal flow in Mid-Wilshire and Koreatown drove recent transaction volume, with local buyers acquiring sub -20-unit Class C assets at aboveaverage yields often exceeding 5 percent. Boasting an average price per unit of $200,000 and a large inventory of pre-1970s-built properties, Koreatown represents the submarket s most affordable locale. Persistent development within transitioning downtown neighborhoods has out-of-town institutional investors competing for post-2000-built assets. Price tags that exceed $400,000 per door are not uncommon, as buyers jockey for newer product featuring more than 100 units. Investor demand for downtown properties has compressed minimum yields to the low -4 percent range. CONSTRUCTION 5,385 units completed Y-O-Y Deliveries increased this past year, with 5,400 rentals finalized in Downtown Los Angeles. The 700-unit Eighth & Grand was the largest completion. There are 4,552 additional apartments scheduled to come online this year, with 2,669 at sites in Downtown Los Angeles. The Mid-Wilshire area will also receive 1,523 units. RENTS VACANCY 50 basis point increase in vacancy Y-O-Y Over the past year, vacancy rose to 3.6 percent as elevated deliveries outweighed absorption. The uptick was driven by Class A space, where vacancy rose 50 basis points to 4.5 percent. Renter demand for luxury units in Hollywood reduced the neighborhood s Class A vacancy by 110 basis points to 3 percent. in effective 0.1% increase rents Y-O-Y The average rent was unchanged during the past 12 months, holding in the low $2,290 area per month. Positive rent growth was concentrated in Mid-Wilshire, where the average rate increased 1.6 percent to $2,281 per month. Class A rents rose in all submarkets over the past year, with declining Class B/C rates in Downtown Los Angeles and MidWhilsire holding back overall rent growth. * Forecast 42

43 MARKET OVERVIEW LOS ANGELES METRO AREA: WESTSIDE CITIES Investment Trends Driven by a continually expanding technology sector, this section of the county continues to add high-paying positions at a steady rate, maintaining rental demand in the metro s most expensive submarket. The Westside s Silicon Beach region continues to attract new households and millennials, as Google, YouTube, Yahoo, Hulu and Snapchat bolster payrolls. The area s extremely high single-family housing costs limit residential options for households and individuals, equating to minimal vacancies at existing apartment complexes. Investor demand for Westside apartments is stout with deal flow restricted only by the number of listed properties, as many owners opt to hold assets long term. A limited for-sale stock has institutional investors routinely paying more than $500,000 per unit for well-located assets at sub-4 percent cap rates. Local buyers target smaller Class C properties at sub-$5 million price tags. Investors in search of above-average yields have become increasingly active in Culver City, where 4 percent-plus rates are readily obtainable. Transactions were most frequent in Santa Monica and Beverly Hills/Century City/UCLA over the past year, with investors paying an average of $450,000 per unit. A high percentage of trades involved smaller 1950s- or 1960s -built complexes. CONSTRUCTION 701 units completed Y-O-Y Developers brought a number of four- and five-story properties online during the past year. The exception was Ten Thousand, a 283-unit high-rise adjacent to Beverly Hills High School. Through the remainder of this year, 352 apartments will be delivered, all of which are located in Brentwood/Westwood/Beverly Hills. RENTS VACANCY 10 basis point decrease in vacancy Y-O-Y Vacancy remained stable at 2.9 percent despite a 40-basis-point decline in Santa Monica/Marina del Rey s available inventory. The area houses more than half the Westside s rental stock. Demand for the submarket s limited inventory of Class B units reduced vacancy to 1 percent in the space, with Class A vacancy at 2.9 percent entering the second half. in effective 4.4% increase rents Y-O-Y The average Westside rate rose to $2,970 per month over the past year. It was supported by a 10.2 percent increase in Santa Monica/Marina del Rey s effective rent, aided by a lack of new rentals spanning the past two years. Declining rents across all classes of Brentwood/Westwood/Beverly Hills apartments may increase the use of concessions during the second half. * Forecast 43

44 MARKET OVERVIEW LOS ANGELES METRO AREA: SAN FERNANDO VALLEY/TRI-CITIES MARKET Investment Trends This area continues to attract renters seeking affordable rents and relatively quick access to employment hubs in Downtown Los Angeles and Westside cities. This demand has kept vacancy historically low in the submarket, which has prompted an uptick in apartment development, with delivery activity slated to be most pronounced next year. Offering investors lower price points and higher yields than other neighboring submarkets, the area accounted for more than a third of all metro transactions over the past year. A buyer pool consisting primarily of locals paid an average of roughly $230,000 per unit for assets, with more affordable deals located in Van Nuys and Westlake, where 5 percent yields are obtainable. The average cap rate on closed transactions was in the low-5 percent range over the last 12 months, driven by a multitude of 4 percent yield deals in Glendale/Pasadena/Burbank and Studio City/North Hollywood. In these locales, sub-20-unit complexes built before the 1970s dominate the sales landscape, with sales prices routinely exceeding $300,000 per door. Glendale is the exception; it also boasts a sizable inventory of 1980s-built Class B properties currently in high demand among investors. CONSTRUCTION 1,510 units completed Y-O-Y Deliveries were concentrated in Glendale and Pasadena, where 1,281 rentals came online. The 315-unit Altana I represented the largest completion. Developers are underway on 4,859 units, with delivery dates extending into summer During the second half of this year, 1,236 apartments will be completed, including more than 600 rentals in Glendale. RENTS VACANCY 40 basis point increase in vacancy Y-O-Y Vacancy rose slightly to 3.3 percent as development activity picked up. Only the Sherman Oaks/N. Hollywood/Encino region was exempt from a yearover-year increase in available rentals. Vacancy in the Class B space remains extremely limited throughout the submarket, with 2.7 percent of units available entering the second half. in effective 4.5% increase rents Y-O-Y Rent growth within the Valley s most affordable and tightest areas propelled the overall effective rate to $1,962 per month. Northridge/Northwest San Fernando Valley witnessed the largest uptick at nearly 8 percent. Class A rents are on the rise, led by a 7 percent increase in Burbank, a city that houses 70 percent of the submarket s luxury stock. * Forecast 44

45 MARKET OVERVIEW LOS ANGELES METRO AREA: SOUTH BAY/LONG BEACH Investment Trends As the metro s most affordable submarket for investment and rent, the area attracts buyers and renters priced out of nearby regions. An increase in recent office-using firm relocations has aided local employment, with the delivery of 10 office projects this year signalling future job growth. Existing rentals will benefit from a lack of completions this year, as just one project comes online. A wave of deliveries is on its way, as 2,245 units are slated for completion in The area s lower price points, value-add potential and higher yields attract local investors and buyers from neighboring counties. Over the past year more than 900 assets traded, most for less than $200,000 per unit. Closed transactions averaged first-year returns in the high-4 percent band, 60 to 130 basis points higher than other regions of the metro. Transaction activity in Long Beach/Ports drove area deal flow, with investors most dynamic in Downtown Long Beach, where initial yields bottom out at 4 percent. The cities of Hawthorne and Gardena steered recent sales velocity in South Bay with a host of sub-20-unit Class C complexes changing hands. Minimum yields in these cities are roughly 50 basis points higher than in Long Beach. CONSTRUCTION 1,755 units completed Y-O-Y Deliveries increased slightly over the past 12 months, surpassing the 1,518 rentals completed in the prior period. Two adjacent projects dubbed Villas at Playa Vista came online last summer, accounting for 1,194 rentals. Entering the second half 2,466 rentals were underway, yet the pace of deliveries will be slow throughout the remainder of the year, as under 50 units come online. RENTS VACANCY 30 basis point increase in vacancy Y-O-Y Both the Long Beach and South Bay regions recorded slight upticks in vacancy; however, the South Bay absorbed more than 2,238 units, entering the second half with a vacancy rate of 2.4 percent. Class C vacancy is extremely tight throughout the submarket, with only 0.9 percent of units available for rent.at 1.6 percent, Class B vacancy is minimal in South Bay. in effective 4.6% increase rents Y-O-Y Limited Class B and C vacancy supported rent growth over the past year, with the average rate increasing to $1,975 per month. Rent gains were more accelerated in Long Beach, where the average rate advanced by 5.8 percent to $1,763 per month. The region remains one of the most affordable rental locales in the metro. * Forecast 45

46 LOS ANGELES COUNTY MARKET OVERVIEW Capital Markets Monetary policy in transition. Despite the Fed raising its benchmark short-term rate three times in seven months and signaling another rise before the end of the year, long-term rates have remained stable. The yield on the 10-year U.S. Treasury bond remained in the low- to mid-2 percent range throughout the second quarter of The Federal Reserve wants to normalize monetary policy and, in addition to rate hikes, will likely start paring its balance sheet. Sound economy a balancing act for Fed. With unemployment hovering in the low-4 percent range, the lowest level since 2007, the Federal Reserve will remain vigilant regarding the possible rapid increase in inflation if wage growth takes off. Additionally, business confidence and job openings are near all-time highs. Businesses finally have the assurance to expand their footprints after years of tepid growth following the Great Recession. These conditions are allowing pent-up households to form, creating new apartment demand. The Fed, however, must now balance economic growth and job creation against wage growth and inflationary pressures. Underwriting discipline persists; ample debt capital remains. Overall, leverage on acquisition loans has continued to reflect disciplined underwriting, with LTVs typically ranging from 65 percent to 75 percent for most apartment properties. At the end of 2016, the combination of higher rates, conservative lender underwriting and fiscal policy uncertainty encouraged some investor caution that slowed deal flow, a trend that has extended into A potential easing of regulations on financial institutions, though, could liberate additional lending capacity and higher interest rates may also encourage additional lenders to participate. * Trailing 12 months through 2Q17 Sources: CoStar Group, Inc.; Real Capital Analytics 46

47 PROPERTY ROSCOE GARDENS NAME DEMOGRAPHICS MARKETING TEAM Created on October 2017 POPULATION 2021 Projection Total Population 1 Miles 3 Miles 5 Miles 49, , , Estimate Total Population 48, , ,791 47, , , Census Total Population 2000 Census Total Population 48, , ,175 Daytime Population 2016 Estimate 42, , ,173 HOUSEHOLDS 2021 Projection 1 Miles 3 Miles 5 Miles Total Households 12, , , Estimate Total Households Average (Mean) Household Size 12, , , ,310 98,735 12,765 96,402 $200,000 or More 1.80% 2.34% 3.88% $150,000 - $199, % 2.88% 4.28% $100,000 - $149, % 9.70% 11.68% $75,000 - $99, % 11.13% 11.61% $50,000 - $74, % 17.46% 18.27% $35,000 - $49, % 14.93% 14.09% $25,000 - $34, % 13.02% 11.29% $15,000 - $24, % 14.28% 12.11% Under $15, % 14.23% 12.79% Average Household Income $57,922 $60,850 $71,808 Median Household Income $42,765 $42,862 $49,649 Per Capita Income $15,156 $17,052 $22,214 1 Miles 3 Miles 5 Miles POPULATION PROFILE Population By Age 371, , % 26.73% 20 to 34 Years 24.90% 25.56% 24.79% 35 to 39 Years 7.11% 7.20% 7.35% 217, to 49 Years 13.42% 13.58% 13.96% 50 to 64 Years 15.69% 15.87% 16.82% 8.61% 9.17% 10.34% ,746 Growth % 2.18% 2.01% 1 Miles 3 Miles 5 Miles 2016 Estimate Total Population Age 65+ Median Age 2021 Projection 12, , , Estimate 13, , ,044 Owner Occupied 4,718 39,505 98,420 Renter Occupied 7,983 63, , ,996 5,570 Persons In Units 2016 Estimate Total Occupied Units 5 Miles 48,844 HOUSING UNITS Occupied Units Vacant 3 Miles 30.24% 2000 Census Total Households 1 Miles Under Census Total Households HOUSEHOLDS BY INCOME 2016 Estimate Population 25+ by Education Level 2016 Estimate Population Age , , ,541 Elementary (0-8) 20.17% 18.51% 14.84% Some High School (9-11) 12.68% 12.98% 11.08% High School Graduate (12) 25.25% 24.00% 22.68% Some College (13-15) 16.86% 17.83% 18.81% 12, , ,475 Associate Degree Only 4.44% 5.59% 6.18% 1 Person Units 14.27% 17.85% 22.32% Bachelors Degree Only 12.99% 13.02% 16.62% 2 Person Units 17.69% 19.93% 23.75% Graduate Degree 2.69% 3.66% 6.16% 3 Person Units 16.65% 16.39% 15.93% Population by Gender 4 Person Units 18.70% 17.35% 15.49% 2016 Estimate Total Population 48, , ,791 5 Person Units 14.44% 12.45% 10.03% Male Population 50.11% 50.43% 49.97% 6+ Person Units 18.25% 16.03% 12.47% Female Population 49.89% 49.57% 50.03% Source: 2016 Experian 47

48 PROPERTY ROSCOE GARDENS NAME DEMOGRAPHICS MARKETING TEAM Population Race and Ethnicity In 2016, the population in your selected geography is 48,844. The population has changed by 0.00% since It is estimated that the population in your area will be 49, five years from now, which represents a change of 1.53% from the current year. The current population is 50.11% male and 49.89% female. The median age of the population in your area is 31.64, compare this to the US average which is The population density in your area is 15, people per square mile. The current year racial makeup of your selected area is as follows: 40.30% White, 2.51% Black, 0.08% Native American and 15.41% 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. Households Housing There are currently 12,701 households in your selected geography. The number of households has changed by -0.50% since It is estimated that the number of households in your area will be 12,938 five years from now, which represents a change of 1.87% from the current year. The average household size in your area is 3.76 persons. The median housing value in your area was $394,578 in 2016, compare this to the US average of $187,181. In 2000, there were 4,977 owner occupied housing units in your area and there were 7,788 renter occupied housing units in your area. The median rent at the time was $549. Income Employment In 2016, the median household income for your selected geography is $42,765, compare this to the US average which is currently $54,505. The median household income for your area has changed by 25.62% since It is estimated that the median household income in your area will be $49,265 five years from now, which represents a change of 15.20% from the current year. In 2016, there are 13,122 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 44.48% of employees are employed in white-collar occupations in this geography, and 55.49% are employed in blue-collar occupations. In 2016, unemployment in this area is 8.07%. In 2000, the average time traveled to work was minutes. People of Hispanic origin make up 71.84% of the current year population in your selected area. Compare this to the US average of 17.65%. The current year per capita income in your area is $15,156, compare this to the US average, which is $29,962. The current year average household income in your area is $57,922, compare this to the US average which is $78,425. Source: 2016 Experian 48

49 8 DEMOGRAPHICS 49

50 PRESENTED BY Catherine O'Brien Senior Associate Associate Member, National Multi Housing Group Encino Office Tel: (818) Fax: (818) License: CA