7401 PACIFIC BLVD. HUNTINGTON PARK, CA 90255

Transcription

1 OFFERING MEMORANDUM $1,295, PACIFIC BLVD. HUNTINGTON PARK, CA % FINANCING AVAILABLE STRIP CENTER - MTM TENANCY 1

2 This Memorandum ( Offering Memorandum ) has been prepared by Brookfield Partners, Inc. and BRC Advisors, Inc. based on information that was furnished to us by sources we deem to be reliable. No warranty or representation is made to the accuracy thereof; subject to correction of errors, omissions, change of price, prior sale, or withdrawal from market without notice. This Memorandum is being delivered to a limited number of parties who may be interested in and capable of purchasing the Property. By its acceptance hereof, each recipient agrees that it will not copy, reproduce or distribute to others this Memorandum in whole or in part, at any time, without the prior written consent of Brookfield Partners, Inc. and BRC Advisors, Inc., and it will keep permanently confidential all information contained herein not already public and will use this Confidential Memorandum only for the purpose of evaluating the possible acquisition of the Property. This Memorandum does not purport to provide a complete or fully accurate summary of the Property or any of the documents related thereto, nor does it purport to be all-inclusive or to contain all of the information, which prospective buyers may need, or desire. All financial projections are based on assumptions relating to the general economy, competition and other factors beyond the control of the Owner and, therefore, are subject to material variation. This Memorandum does not constitute an indication that there has been no change in the business or affairs of the Property or the Owner since the date of preparation of this Memorandum. This Memorandum is being delivered by Brookfield Partners Inc. and BRC Advisors, Inc., to prospective purchasers with the understanding that all prospective purchasers will conduct their own independent investigation of those matters, which they deem appropriate in order to evaluate this offering. Additional information and an opportunity to inspect the site will be made available to interested and qualified prospective purchasers. Brookfield Partners, Inc. and BRC Advisors, Inc., reserves the right to request the return of any or all of the information enclosed. TABLE OF CONTENTS SECTION ONE 04 EXECUTIVE PROFILE SECTION TWO 12 PROPERTY INFORMATION 2014 Brookfield Partners, Inc. & BRC Advisors. The information contained in this document has been obtained from sources believed reliable. While Brookfield Partners, Inc. & BRC Advisors does not doubt its accuracy, Brookfield Partners, Inc. & BRC Advisors has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors, which should be evaluated by your tax, financial and legal advisors. 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. Brookfield Partners, Inc. & BRC Advisors and the Brookfield Partners, Inc. & BRC Advisors logos are service marks of Brookfield Partners, Inc. & BRC Advisors and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners. 2 3

3 4 5 SECTION 1 EXECUTIVE OVERVIEW

4 INVESTMENT OVERVIEW PROPERTY INFORMATION Brookfield Partners and BRC Advisors have been retained to exclusively market a strip center, with an apartment unit. Currently, the building is 69% leased site description DESCRIPTION SPECIFICATION Physical description DESCRIPTION SPECIFICATION with 2 vacancies (1-2 bed + 1 bath apt) + (retail unit). An investor could stablize the property at market rents and triple net leases, capturing a favorable cap rate quickly. All tenants are on a month-to-month leases. On the other hand, an RENTABLE SF ASSESSOR S SF 5,434 SF 4,198 SF CONSTRUCTION TYPE ROOF Wood-Frame Stucco Rolled Composition owner user buyer could easily obtain 90% financing with an SBA loan, while receiving supplemental income from the remaining unused square footage. An LOT SIZE 8,494 SF FOUNDATION Concrete owner user could live in the two bedroom unit as well or rent out in a city with APN no rent control. NUMBER OF TENANTS 7 Tenants Retail/Apt FIRE PROTECTION TBD This property is situated just south of Florence Avenue on a corner location. FLOOR-TO-AREA RATIO 0.64 HVAC TBD There is visible signage on the premises, along with excellent frontage and exposure on California Street and Pacific Blvd. There is generous traffic counts ZONING LCC2 METERS Seperately and foot traffic, with surrounding retail synergy. PARKING Street Parking LANDSCAPING None PROPERTY HIGHLIGHTS 90% Financing Available - Live/Work Opportunity Corner Location with Generous Street Frontage Excellent Foot and Traffic Counts YEAR BUILT 1938 LOT DIMENSIONS 64 X 121 X 78 STREET FRONTAGE 121 on Pacific Blvd. TOPOGRAPHY ACCESS Flat California St. Plenty of Street Parking All Month-to-Month Tenancy - NNN Upside Potential HIGHWAY ACCESS 110 and 105 Freeways LEASE TYPE Modified Gross/Full Service Gross Rental Upside - No rent Control City for Apt Unit TRAFFIC COUNT ±22,539 cars/day TENANCY Multi-Tenant 6 - BRC ADVISORS & BROOKFIELD PARTNERS, INC. BRC ADVISORS & BROOKFIELD PARTNERS, INC. - 7

5 USER OCCUPANCY COSTS SALES COMPARISON APPROACH SUMMARY TERMS PRICE $1,295,000 ESTIMATED ANNUALIZED USER OCCUPANCY COSTS DESCRIPTION ESTIMATED PSF OPERATING EXPENSES LEASE VS. OWN PROPERTY SIZE 5,434 SF 5,434 SF LEASE SCENARIO PER/SF AMOUNT OWN SCENARIO PER/SF AMOUNT LEASE ASSUMPTIONS: Rent Per Month Rent Per SF Modified Gross $10,868 $2.00 PURCHASE ASSUMPTIONS: Purchase Price Improvements - Additional Total $238 $238 $1,295,000 $1,295,000 DOWN PAYMENT (15%) $194,250 BUILDING SIZE 5,434 SF TAXES (1.169%) $15,139 $2.79 START-UP COSTS: Prepaid rent and security deposit (2 mo. s total) Lessee TI costs, net of lessor TI allowance** Total startup costs $21,736 $21,736 START-UP COSTS: Borrower cash down payment (15%) Estimated fees on 1st mortgage** Est. appraisal, environmental, other fees** Total startup costs $194,250 $6,475 $5,000 $205,725 PRICE PER FOOT ON BUILDING $ INSURANCE $2, GROSS MONTHLY COSTS: Rent payment Lease operating costs** Gross monthly cash cost $ $2.15 $10,868 $2,174 $13,042 GROSS MONTHLY COSTS: Mortgage payment Ownership operating costs** Gross monthly cash cost $ $1.74 $6,974 $2,483 $9,457 LOT SIZE 8,494 SF PRICE PER FOOT ON LAND $ YEAR BUILT 1938 UTILITIES $5,434 $1.00 REPAIRS & MAINTENANCE $4, LEASE BENEFITS (PER MONTH): Depreciation tax benefit at 35% tax rate Avg. monthly principal paydown equity build Tax benefit on rent deduction at 35% tax rate Tax benefit on operating costs at 35% tax rate Lease-out income (net of tax at 35% rate) $3,804 $761 $4,565 OWNERSHIP BENEFITS - EXCEL. APPRECIATION (PER MONTH): Depreciation tax benefit at 35% tax rate Avg. monthly principal paydown equity build Tax benefit on rent deduction at 35% tax rate Tax benefit on operating costs at 35% tax rate Lease-out income (net of tax at 35% rate) Interest on startup cost difference (net of 35% tax) $1.01 $823 $2,619 $1,470 $869 -$299 $5,483 ZONING LCC2 CAPITAL RESERVES/MISC $2, NET COST AFTER LEASE BENEFITS: Est. appreciation benefit, per month $ $8,477 NET COST AFTER OWNERSHIP BENEFITS EXCEL APPRE: Est. appreciation benefit, per month $3,975 $2,158 NEW LOAN SUMMARY TERMS LOAN AMOUNT $1,100,750 LOAN TYPE SBA BLENDED SBA RATE 4% BLENDED AMORTIZATION 25 Years TOTAL OPERATING EXPENSES $29,810 $5.49 DEBT SERVICE $83,688 $15.40 TOTAL OCCUPANCY COSTS $113,498 $20.89 MONTHLY OCCUPANCY COSTS (before tax advantages of ownership) $1.74 PSF NET COST AFTER LEASE BENEFITS PROJECTED RENT COST IN YEAR 10 Net rent cost (after tax benefits at 35% rate) Assumed annual rent escalation $1.56 $ % $8,477 $11,061 ANALYSIS LIMITATIONS: THIS ANALYSIS DOES NOT INCLUDE SUPPLEMENTAL INCOME STREAM FROM POTENTIAL TENANTS - LOWERING OCCUPANCY COSTS SIGNIFICANTLY Disclaimer: This sample analysis is based on a series of assumptions, including loan interest rates and annual appreciation rates, and is meant only to be illustrative in nature. The analysis is not a guarantee of any actual results of any loan or purchase transaction or ownership of any real property, all of which are subject to risks, uncertainties and assumptions that are difficult to predict and beyond our control. No warranties or representations, express or implied, are made as to the accuracy of the information contained herein, and same is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, withdrawal without notice, prior sale, lease or financing. We include projections, opinions, assumptions or estimates for example only, and they may not represent future performance of the property. You and your financial and legal advisors should conduct your own evaluation of the property and transaction economics. NET COST AFTER OWNERSHIP BENEFITS INCL. APPRE: Year 5 Year 10 Year 15 Year GROWTH IN PROPERTY VALUE & OWNER EQUITY $1,816 ASSUMED ANNUAL APPRECIATION RATE OF: 2.0% BORROWER DOWN PAYMENT (15%): $194,250 PROPERTY VALUE LOAN BALANCE OWNER EQUITY $1,429,785 $966,819 $462,965 $1,578,598 $769,520 $809,078 $1,742,899 $517,848 $1,225,052 $1,924,302 $196,808 $1,727, BRC ADVISORS & BROOKFIELD PARTNERS, INC. BRC ADVISORS & BROOKFIELD PARTNERS, INC. - 9

6 RENT ROLL TENANT SQUARE FOOTAGE MONTHLY RENT RENT PSF LEASE START LEASE EXPIRES OPTION FINANCIAL OVERVIEW DESCRIPTION SPECS ANNUALIZED OPERATING DATA PRO-FORMA FINANCIAL ANALYSIS INCOME PRO-FORMA PSF Vacant 665 SF $1,300 $ None Roy Tellez 850 SF $1,500 $1.76 July 1, 2015 Month-to-Month None Selecto Tax Inc. 500 SF $1,000 $2.00 Feb. 1, 2013 Month-to-Month None Apartment 1,000 SF $1,495 $ None Walter Alvarez/Diego 846 SF $1,700 $2.01 March 2, 2014 March 3, 2018 None Beauty Salon 670 SF $1,190 $1.78 Aug. 26, 2006 Month-to-Month None Toan Van Le 903 SF $1,300 $1.44 July 1, 2015 June 30, 2016 None 5,434 SF $9,485 AVG. PSF $113,820 $1.78 Price $1,295,000 Downpayment (40%) $518,000 Rentable Square Feet 5,434 SF Price Per Square Foot $ Assessor s Square Feet 4,198 SF Price Per Square Foot $ Lot Size 8,494 SF Price Per Foot on Land $ Pro-forma Cap Rate 6.40% GRM Cash-on-Cash 6.49% Occupancy 69% Pro-forma Average PSF $1.78 PSF Lease Type MG/FSG Year Built 1938 Zoning LCC2 Type of Ownership Fee Simple NEW LOAN DESCRIPTION SPECS Loan Amount $777,000 Loan Type Conventional Commercial Interest Rate 4.0% Amortization 25 Years Total Gross Income $113,820 $20.95 Less: Vacancy (3%) ($3,414) (.63) Effective Gross Income $110,405 $20.32 Operating Expenses ($27,580) ($5.08) Net Operating Income $82,825 $15.24 Debt Service ($49,212) ($9.05) Debt Coverage Ratio Net Cash Flow After Debt Service $33,613 $6.19 Cash-On-Cash Return 6.49% EXPENSES PRO-FORMA PSF Real Estate (1.169%) $14,556 $2.68 Insurance $2, Utilities $2, Repairs & Maintenance $4, Reserve / Misc. $3, TOTAL EXPENSES $27,580 $ BRC ADVISORS & BROOKFIELD PARTNERS, INC. BRC ADVISORS & BROOKFIELD PARTNERS, INC. - 11

7 SECTION 2 PROPERTY INFORMATION

8 AERIAL OVERVIEW PLAT MAP 14 - BRC ADVISORS & BROOKFIELD PARTNERS, INC. BRC ADVISORS & BROOKFIELD PARTNERS, INC. - 15

9 JAY MARTINEZ Managing Principal Ventura Blvd., Suite 310 Tarzana, CA Cal BRE: CONTACT CELL PHONE PHONE FAX WEBSITE ELIZABETH CLARK Senior Vice President 9301 Wilshire Blvd., Suite 206 Beverly Hills, CA Cal BRE: CONTACT CELL PHONE PHONE FAX BRC ADVISORS & BROOKFIELD PARTNERS, INC. WEBSITE