OFFERING MEMORANDUM. 627 MAGNOLIA AVENUE Long Beach, California. Offering Memorandum 1

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1 OFFERING MEMORANDUM 627 MAGNOLIA AVENUE Long Beach, California Offering Memorandum 1

2 PROPERTY OVERVIEW Price $3,500,000 ($398.34/SF) Rentable SF 9,300 SF* Assessor SF 8,788 SF* APN Price/RSF $ Lot Size 26,254 SF Acres 0.60 Units 5 Year Built 1995 Parking Spaces 41 Parking Ratio 4.4:1,000 Cap Rate 3.46% Pro Forma Cap Rate 5.99% HIGHLIGHTS Great visibility High Traffic Corner Location Parking Available (4.4:1,000) Located the 710 Freeway on ramp Walking distance from Long Beach Court Office Value Added Investment *Total Rentable SF calculated as the sum of all space denoted on existing leases. This figure differs from the assessors gross SF of 8,788. As of Offering Memorandum 2

3 PROPERTY DESCRIPTION 7th Street ZONING (PD30) Daisy Avenue Magnolia Avenue 627 Magnolia is zoned PD30 and is in the Downtown neighborhood overlay area. This area provides a mix of housing opportunities within walking distance of employment and services. Development standards for this area have a 38 height limit. 6th Street 627 Magnolia Avenue is in the Willmore Historic District of downtown Long Beach. The property is well located for retail on the southwest corner of Magnolia Avenue and 7th street just three blocks east of the on-ramp of the 710 freeway north. The building was last purchased in June 1993 and new improvements of 8,788 SF were completed in 1995 on a land area of approximately 26, 254 SF as a retail center. The immediate area surrounding the subject property is mixed use that includes historic single family homes, apartments, and street front retail in a densely populated area. An array of small business commercial users offering services from restaurants, banking, clothing, and professional offices are within blocks of the property. The on-site parking is to code offering 4/1000 parking spaces. City of Long Beach Downtown Plan Offering Memorandum 3

4 FINANCIAL OVERVIEW YEAR 1 OVERVIEW As of Acquisition Costs Purchase Price, Points and Closing Costs $3,500,000 Investment - Cash $3,500 Investment Information Purchase Price $3,500,000 Price per Tenant $583,333 Price per Sq. Ft. $ Income, Expenses & Cash Flow Gross Scheduled Income $168,094 Operating Expenses ($46,911) Net Operating Income $121,183 Cash Flow Before Taxes $121,183 Financial Indicators Debt Coverage Ratio N/A Capitalization Rate 3.46% Gross Income / Square Feet $18.07 Gross Expenses / Square Feet ($5.04) Operating Expense Ratio 27.91% This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Corporate BRE# Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial Affiliates. All rights reserved. Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial affiliates fully supports the principles of the equal opportunity act. Each office is independently owned and operated. Coldwell Banker Commercial and the Coldwell Banker Commercial logo are registered service marks owned by Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial affiliates. All information is deemed reliable but not guaranteed. Corporate BRE # Offering Memorandum 4

5 FINANCIAL OVERVIEW TENANT ANNUAL SCHEDULED INCOME As of Tenant Actual* Pro Forma Donut Shop $22,032 $22,032 Chinese Food $22,594 $48,000 Laundromat $33,593 $51,120 Smart PCS Inc. $12,480 $12,480 Vacant $0 $48,000 ATT Tower $61,793 $61,793 Total $152,491 $243,425 ANNUALIZED INCOME Actual* Pro Forma Gross Potential Rent $152,491 $243,425 Misc. Income (CAM) $12,960 $32,844 Effective Gross Income $165,451 $276,269 Less: Expenses ($46,911) ($66,624) Net Operating Income $118,540 $209,645 This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Corporate BRE# Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial Affiliates. All rights reserved. Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial affiliates fully supports the principles of the equal opportunity act. Each office is independently owned and operated. Coldwell Banker Commercial and the Coldwell Banker Commercial logo are registered service marks owned by Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial affiliates. All information is deemed reliable but not guaranteed. Corporate BRE # *Actual rents based on July 2017 scheduled income. Offering Memorandum 5

6 FINANCIAL OVERVIEW ANNUALIZED EXPENSES As of Actual* Pro Forma Landscaping $4,084 $4,084 Cleaning & Maintenance $1,589 $1,589 Insurance $3,759 $3,759 Legal & Professional $2,480 $2,480 Repairs $2,131 $2,131 Taxes - Real Estate $24,037 $43,750 Utility - Trash $7,173 $7,173 Utility - Water $1,658 $1,658 Total Expenses $46,911 $66,624 Expenses Per RSF $5.04 $7.16 This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Corporate BRE# Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial Affiliates. All rights reserved. Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial affiliates fully supports the principles of the equal opportunity act. Each office is independently owned and operated. Coldwell Banker Commercial and the Coldwell Banker Commercial logo are registered service marks owned by Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial affiliates. All information is deemed reliable but not guaranteed. Corporate BRE # Offering Memorandum 6

7 FINANCIAL OVERVIEW LEASE RENT ROLL As of Suite Tenant Start Date Expire Date RSF $/SF Monthly Rent Annualized Rent Notes 101 Donut Shop 10/1/2014 9/30/ $2.23 $1, $23,562 Per contract actual rent is lower than contracted amount. 102 Chinese Food 6/1/2005 5/3/ $2.05 $1, $22,594 Month-to-month. 103 Laundromat M-T-M 3,410 $0.82 $2, $33,593 Laundromat owned by seller. Currently in negotiations for a sale of the business. 104 Smart PCS Inc. 6/1/2017 5/31/ $1.19 $1, $12, yr. option at MRV. 105 Vacant 3,210 $0.00 $0.00 $ ATT 11/1/ /30/ N/A $5, $62, yr. options at fixed rate. Rent reduced for 2019 & 2020 by $500/mo. with 2% increases thereafter. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Corporate BRE# Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial Affiliates. All rights reserved. Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial affiliates fully supports the principles of the equal opportunity act. Each office is independently owned and operated. Coldwell Banker Commercial and the Coldwell Banker Commercial logo are registered service marks owned by Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial affiliates. All information is deemed reliable but not guaranteed. Corporate BRE # Offering Memorandum 7

8 FINANCIAL OVERVIEW ANNUAL PROPERTY OPERATING DATA As of Acquisition Description Costs Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Rental Income $155,134 $158,411 $159,386 $159,386 $159,386 $159,386 $159,386 $159,386 $159,386 $159,386 Unit 101 CAM $4,224 $4,224 $4,224 $4,224 $4,224 $4,224 $4,224 $4,224 $4,224 $4,224 Unit 102 CAM $4,416 $4,416 $4,416 $4,416 $4,416 $4,416 $4,416 $4,416 $4,416 $4,416 Unit 104 CAM $4,320 $4,320 $4,320 $4,320 $4,320 $4,320 $4,320 $4,320 $4,320 $4,320 GROSS SCHEDULED INCOME $168,094 $171,371 $172,346 $172,346 $172,346 $172,346 $172,346 $172,346 $172,346 $172,346 GROSS OPERATING INCOME $168,094 $171,371 $172,346 $172,346 $172,346 $172,346 $172,346 $172,346 $172,346 $172,346 Expenses Landscaping ($4,084) ($4,084) ($4,084) ($4,084) ($4,084) ($4,084) ($4,084) ($4,084) ($4,084) ($4,084) Cleaning & Maintenance ($1,589) ($1,589) ($1,589) ($1,589) ($1,589) ($1,589) ($1,589) ($1,589) ($1,589) ($1,589) Insurance ($3,759) ($3,759) ($3,759) ($3,759) ($3,759) ($3,759) ($3,759) ($3,759) ($3,759) ($3,759) Legal & Professional ($2,480) ($2,480) ($2,480) ($2,480) ($2,480) ($2,480) ($2,480) ($2,480) ($2,480) ($2,480) Repairs ($2,131) ($2,131) ($2,131) ($2,131) ($2,131) ($2,131) ($2,131) ($2,131) ($2,131) ($2,131) Taxes - Real Estate ($24,037) ($24,037) ($24,037) ($24,037) ($24,037) ($24,037) ($24,037) ($24,037) ($24,037) ($24,037) Utility - Trash ($7,173) ($7,173) ($7,173) ($7,173) ($7,173) ($7,173) ($7,173) ($7,173) ($7,173) ($7,173) Utility - Water ($1,658) ($1,658) ($1,658) ($1,658) ($1,658) ($1,658) ($1,658) ($1,658) ($1,658) ($1,658) TOTAL OPERATING EXPENSES ($46,911) ($46,911) ($46,911) ($46,911) ($46,911) ($46,911) ($46,911) ($46,911) ($46,911) ($46,911) NET OPERATING INCOME $121,183 $124,460 $125,436 $125,436 $125,436 $125,436 $125,436 $125,436 $125,436 $125,436 This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Corporate BRE# Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial Affiliates. All rights reserved. Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial affiliates fully supports the principles of the equal opportunity act. Each office is independently owned and operated. Coldwell Banker Commercial and the Coldwell Banker Commercial logo are registered service marks owned by Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial affiliates. All information is deemed reliable but not guaranteed. Corporate BRE # Offering Memorandum 8

9 DEMOGRAPHICS & INCOME REPORT 1 mile 3 miles 5 miles Census 2010 Summary Population 32, , ,811 Households 8,937 87, ,485 Families 6,864 68, ,223 Average Household Size Owner Occupied Housing Units 4,265 42, ,309 Renter Occupied Housing Units 4,672 45,202 89,176 Median Age Summary Population 33, , ,793 Households 9,119 89, ,361 Families 7,020 69, ,359 Average Household Size Owner Occupied Housing Units 4,195 42, ,819 Renter Occupied Housing Units 4,924 47,717 94,542 Median Age Median Household Income $47,480 $51,679 $55,833 Average Household Income $60,418 $66,645 $73, Summary Population 34, , ,799 Households 9,297 91, ,892 Families 7,166 71, ,073 Average Household Size Owner Occupied Housing Units 4,254 42, ,694 Renter Occupied Housing Units 5,043 49,039 97,198 Median Age Median Household Income $50,921 $55,233 $60,638 Average Household Income $68,360 $75,478 $82,962 Offering Memorandum 9

10 LOCATION OVERVIEW DOWNTOWN LONG BEACH Downtown Long Beach is experiencing a retail evolution with Pine Avenue stores such as H&M Forever 21 and Restoration Hardware which are only a few of the newer retailers that have opened in Long Beach. These trendy stores are surrounded by other national retailers such as PF Changs and the Cinemark theatre. Downtown has an eclectic array of first class restaurants, A and B class office space, and historic signature office buildings with ground floor retail. Today s vacancy rates for office space are approximately 12%. Sale activity occurring throughout the city signals Investor assurance in retail stability and small business owner interest in the downtown area. Newer residents populating Long Beach are in the age group of years old. Business Outlook In 2013, Long Beach City Leaders enacted a Downtown Plan to streamline permit processing, ease parking requirements and create more business in the downtown area. The result of this Downtown Plan dramatically increased development and investor interest in Long Beach. In 2016, building permits valued at over $421,000,000 with 70% non-residential construction were issued to developers and investors. Long Beach leadership also partnered with private development to create the 500,000 SF Governor George Deukmejian County Courthouse (opened in 2014) and a new Civic Center (under construction). These developments and recent commercial sales indicate that Long Beach continues to be a hot spot for developers and investors. 627 Magnolia Avenue - In the heart of Downtown Offering Memorandum 10

11 AERIAL & RETAIL MAP 710 Long Beach Blvd Retail Corridor The Pike Outlet Marketplace 7th Street 6th Street Subject Property Anaheim Station 6th Street Station City Place shopping Center 6th Street & Long Beach Blvd. Retail As of 1/26/17 Offering Memorandum 11

12 PROPERTY PHOTOS

13 AERIAL PHOTO & PARCEL MAP 7th Street Daisy Avenue Magnolia Avenue 6th Street Offering Memorandum 13

14 TRAFFIC COUNTS 57, ,000 7,800 6th Street 16,400 15,400 Magnolia Ave. 7th Street 15,100

15 627 MAGNOLIA AVE. Long Beach, California For more information or to schedule a tour, please contact Becky Blair, CCIM President & Principal Mobile: (562) BBlair@cbcblair.com BRE# th Street Magnolia Ave. Sheva Hosseinzadeh Associate Vice President Mobile: (562) Sheva@cbcblair.com BRE# Offering Memorandum 15