ICONIC PRIME NOHO ARTS DISTRICT
11259 OTSEGO ST TABLE OF CONTENTS Property Overview 7 Investment Overview 6 Property Photos 12-14 Location Overview 15 Financial Overview 20 Rent Survey 24 Sales Comparables 27 AGENT CONTACT PETER STRAUSS Partner o: 747-444-3303 m: 310-993-7600 peter@iconicinv.com BRE #01335696 ICONIC 16530 Ventura Blvd Suite 409 Encino, CA 91436 2 ICONIC
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Estancia Apartments 11259 Otsego Street is an 8 unit two-story apartment building located in prime NoHo Arts District. Six of the units have been tastefully restored with designer finishes. This near turn-key asset has a going-in CAP Rate of 4.21%. 5
11259 OTSEGO ST INVESTMENT overview 6 ICONIC
PROPERTY OVERVIEW Estancia Apartments is an eight-unit property located in the heart of the NoHo Arts District. The Arts Districts is an area of the San Fernando Valley that is undergoing rapid growth and urbanization as dozens of developments are currently underway and in planning stages. This will increase density, bringing new retail and entertainment options, and transform this once sleepy bedroom community into a vibrant city-like community with walkable and bikeable streets, and improved services surrounding major transit hubs. Located at 11259 Otsego Street, the eight-unit Estancia Apartments was built in 1950 and painstakingly restored in 2018, maintaining the architectural charm of the exterior while bringing unit interiors into the 21st century. The property features a unit mix of all one-bedroom and one-bathroom units that have an average living area of 665 square feet and include individual water heaters. Six of the eight units at Estancia were comprehensively restored in 2018 with significant effort made to maintain the mid-century charm. Existing hardwood floors were renewed and restained throughout. Updated kitchens feature mosaic hexagon tile flooring, attractive dual-tone shaker-style cabinetry with durable quartz countertops, and modern stainless steel appliances. Bathrooms were updated with new cabinetry and hardware, and feature floating vanities. Expansive windows bring in natural light and create an extra sense of space. Renovated and Restored in 2018 - six of eight units updated Charming and spacious one-bedroom units averaging 665 square feet Renewed original hardwood flooring and designer tilework Additional upside available through turnover and renovation of remaining two units Surrounded by numerous major mixed-use developments New Whole Foods 365 Market opening less than 600 feet from property The NoHo Arts District is in the midst of an ongoing renaissance that started in the early 2000 s with the development of the North Hollywood Metro station. Once a gritty suburb, North Hollywood has transformed into the San Fernando Valley s cultural hub with numerous dance studios, art galleries and acting workshops side by side with various strip malls and mixed-use entertainment complexes. The neighborhood has transformed into one of the most densely populated in the San Fernando Valley, and is home to a major transportation hub, serving as the nexus point between the Orange Line busway and the Red Line subway. 7 ICONIC
6 Units have been rehabbed and are turn-key METRO Metro 1/2 mile to Chandler/Lankershim Metro EAT/DRINK/PLAY North Hollywood Studio City Hollywood 8 ICONIC
INVESTMENT OVERVIEW PARCEL MAP Address 11259 Otsego St North Hollywood, CA 91601 Submarket NoHo Arts District Assessor Parcel Number 2353-003-018 IMPROVEMENTS 8 Apartment Units Year BUILT 1950 parking 5 Spaces GROSS SQUARE FOOTAGE 6,894 (Square Feet) Estimated Land Area 5,863 (Square Feet) UTILITIES Individually Metered Individual Water Heaters Zoning LAR4 9 ICONIC
Estancia Apartments 11259 Otsego St NoHo Arts District MAP OF THE AREA 10 ICONIC
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11259 OTSEGO ST Location overview 15 ICONIC
NoHo Arts District 16
NOHO DEVELOPMENT PROJECTS Along Otsego Street there are three developments currently underway, including a 42-unit project directly next door, and a 70-unit project across the street. Less than five hundred feet from the property is the new Lankershim + Otsego project from Camden Securities Company, which is expected to be completed in late-2019. This development consists of a seven-story building containing 297 apartments atop a 365 by Whole Foods Market. In addition, the NoHo West property, located less than one mile north of Estancia, is currently underway, and will bring 642 apartments, up to 60 dining and shopping options, a grocery store, gym, and movie theater to the old 25-acre Macys site at Laurel Plaza. Plans are also underway for a Greenland and Trammell Crow joint venture that will transform the existing park-and-ride lot of the North Hollywood Station of the Metro Red Line to a mixed-use village with plans to include 1,500 units of housing, 150,000 square feet of retail, and 450,000 square feet of offices (and 5,400 parking spaces). It is no exaggeration to say that there are currently thousands of new units of housing being developed currently, as well as public developments that will create open space, bring in new retailers, and build new offices, creating mini villages within the densely packed neighborhoods. 17
NEIGHBORHOOD SPOTS The NoHo Arts District is in the midst of an ongoing renaissance that started in the early 2000 s with the development of the North Hollywood Metro station. Once a gritty suburb, North Hollywood has transformed into the San Fernando Valley s cultural hub. Home to contemporary theaters, art galleries, cafes, and shops, the NoHo Arts District features more than 20 professional theaters, a diverse range of art galleries and public art spaces, and numerous professional dance studios. The district is also home to the largest concentration of music recording venues west of the Mississippi. The Arts District is also home to a large concentration of popular local bars and restaurants ranging from Tonga Hut, LA s oldest operating tiki bar, to upscale Federal Bar gastropub which is housed in a two-story 1920 s bank building. Restaurants in the district reflect the variety of cultures that call North Hollywood home, and include Greek favorite Rodini, Spumate, an elegant white tablecloth Italian establishment, and Hayat s Kitchen and Skaf s Grill which serve up Middle Eastern and Mediterranean cuisine. 18
URBAN LIVING The NoHo Arts District is a hotbed of new development activity and neighborhood gentrification, and there is no better evidence of the demographic shifts that are occurring in the community than the influx of new retail options. Less than 600 feet from Estancia Apartments, a new 365 Whole Foods grocery-anchored mixed-use development is underway and scheduled for late-2019 completion. The community is currently dotted with national and regional retailers, including Target, Starbucks, The Coffee Bean and Tea Leaf, Petco, and 24-Hour Fitness. Hundreds of new retail and entertainment options are expected to enter this thriving district as major projects are completed in the next 24-months. NoHo West, the 25-acre former Laurel Plaza site, is expected to add up to 60 new retail and dining options, and the transformation of the North Hollywood Metro Station park-and-ride lot, located less than one-half mile from Estancia, includes 150,000 square feet of new retail and 450,000 square feet of office development. 19
11259 OTSEGO ST FINANCIAL overview 20 ICONIC
INVESTMENT OVERVIEW Asset Estancia Location Opportunity 11259 Otsego St. North Hollywood, CA 91601 8 Apartment Units RENOVATED UNITS 6 Units Rehabbed YEAR BUILT 1950 PARKING 5 Spaces GROSS SQUARE FOOTAGE 5,327 (Square Feet) PURCHASE PRICE $2,400,000 PRICE PER UNIT $300,000 CURRENT CAP RATE 4.21% CURRENT GRM 14.99 21 ICONIC
RENT ROLL Unit # Unit Type Unit Sq. Ft Current Rent Per Sq. Ft CURRENT As-Is Market Rent Per Sq. Ft Renovated Market Rent RENOVATED Per Sq. Ft 11259-1 1 Bedroom + 1 Bath 665 $2,000.00 $3.01 $2,000.00 $3.01 $2,100.00 $3.16 11259-2 1 Bedroom + 1 Bath 665 $677.74 $1.02 $1,650.00 $2.48 $2,100.00 $3.16 11259-3 1 Bedroom + 1 Bath 665 $2,075.00 $3.12 $2,075.00 $3.12 $2,100.00 $3.16 11259-4 1 Bedroom + 1 Bath 665 $1,975.00 $2.97 $1,975.00 $2.97 $2,100.00 $3.16 11259-5 1 Bedroom +1 Bath 665 $789.00 $1.19 $1,600.00 $2.41 $2,100.00 $3.16 11259-6 1 Bedroom + 1 Bath 665 $1,975.00 $2.97 $1,975.00 $2.97 $2,100.00 $3.16 11259-7 1 Bedroom + 1 Bath 665 $1,975.00 $2.97 $1,975.00 $2.97 $2,100.00 $3.16 11259-8 1 Bedroom + 1 Bath 665 $1,875.00 $2.82 $1,875.00 $2.82 $2,100.00 $3.16 TOTAL 8 Units $13,341.74 $2.51 $15,125.00 $2.84 $16,800.00 $3.16 UNIT MIX SUMMARY UNIT TYPE # OF UNITS AVG SQUARE FEET AVERAGE CURRENT RENTS RENT $/ SF CURRENT MONTHLY INCOME AS-IS MARKET RENTS AS-IS MARKET $/SF AS-IS MARKET MONTHLY INCOME RENOVATED MARKET RENTS RENOVATED MARKET $/SF RENOVATED MARKET MONTHLY INCOME 1 Bedroom + 1 Bath 8 665 $1,667.72 $2.51 $13,341.74 $1,890.63 $2.84 $15,125 $2,100 $3.16 $16,800 Totals/Averages 8 665 $1,667.72 $2.51 $13,341.74 $1,891 $2.84 $15,125 $2,100 $3.16 $16,800 22 ICONIC
METRICS PROPERTY OVERVIEW Property Address 11259 Otsego St North Hollywood, CA 91601 Assessor Parcel Number 2353-003-018 Market North Hollywood Sub-Market Noho Arts District Zoning LAR4 Number of Units 8 Year Built 1950 Gross Building Sq. Ft. 5,327 Lot Size 6,894 INVESTMENT OVERVIEW Purchase Price $2,400,000 Price Per Unit $300,000 Price Per Square Foot $450.54 FINANCING OVERVIEW Down Payment $1,032,000 Loan Amount $1,368,000 Loan to Value % 57.00% Debt Coverage Ratio 1.16 Loan Type Fully Amortizing Loan Rate 4.90% Loan Term 5 Years INVESTMENT RETURNS GRM - Current 14.99 CAP Rate - Current 4.21% GRM - Market 13.22 CAP Rate - Market 5.04% GRM - Renovated 11.90 CAP Rate - Renovated 5.82% OPERATIONS OVERVIEW INCOME CURRENT AS-IS MARKET RENOVATED MARKET Scheduled Market Rent $160,101 $181,500 $201,600 Less: Vacancy 3.00% ($4,803) ($5,445) ($6,048) Subtotal: Effective Rental Income $155,298 $176,055 $195,552 Other Income Plus: Laundry Income $1,200 $1,200 $1,200 Plus: Miscellaneous Fees $300 $300 $300 Plus: LAHD Registration/SCEP Reimbursement $444 $444 $444 Subtotal: Total Other Income $1,944 $1,944 $1,944 EFFECTIVE GROSS INCOME $157,242 $177,999 $197,496 EXPENSES Fixed Expenses Off-Site Management 4.00% $6,212 $7,042 $7,822 Property Tax 1.19% $28,608 $28,608 $28,608 Property & Liability Insurance $2,953 $2,953 $2,953 Subtotal: Fixed Expenses $38,811 $39,641 $40,421 Controllable Expenses LAHD Fees & Administrative Costs $1,142 $1,142 $1,142 Repairs & Maintenance $500 $4,000 $4,000 $4,000 Utilities $6,200 $6,200 $6,200 Landscaping $1,200 $1,200 $1,200 Pest Control $840 $840 $840 Subtotal : Controllable Expenses $17,498 $17,498 $17,498 TOTAL EXPENSES ($56,309) ($57,139) ($57,919) NET OPERATING INCOME $100,933 $120,860 $139,577 Capital Reserves $200 ($1,600) ($1,600) ($1,600) Debt Service ($87,124) ($87,124) ($87,124) NET CASH FLOW $12,209 $32,136 $50,853 1.18% 3.11% 4.93% Principal Reduction $20,550 $20,550 $20,550 TOTAL RETURN $32,759 $52,685 $71,402 3.17% 5.11% 6.92% 23 ICONIC
11259 OTSEGO ST RENT SURVEY 24 ICONIC
RENT SURVEY PROPERTY Units Year Built Parking Renovated Individually Metered Type Rent SF Rent/SF 11259 Otsego St North Hollywood, CA 91601 11005 Morrison St North Hollywood, CA 91601 11120 Huston St North Hollywood, CA 91601 11201 Otsego St North Hollywood, CA 91601 11265 Morrison St North Hollywood, CA 91601 5077 Lankershim Blvd North Hollywood, CA 91601 11262 Otsego St North Hollywood, CA 91601 10741 Camarillo St North Hollywood, CA 91602 11325 Morrison St North Hollywood, CA 91601 11054 Otsego St North Hollywood, CA 91601 11124 Camarillo St North Hollywood, CA 91602 8 1950 Yes Yes Yes 1 Bedroom/1 Bath $2,100 665 $3.16 24 1989 Yes Yes Yes 1 Bedroom/1 Bath $1,895 750 $2.53 34 2015 Yes Yes Yes 1 Bedroom/1 Bath $1,990 770 $2.58 100 2005 Yes Yes Yes 1 Bedroom/1 Bath $2275 647-715 $3.30 43 1986 Yes Yes Yes 1 Bedroom/1 Bath $2,300 645 $3.57 156 2015 Yes Yes Yes 1 Bedroom/1 Bath $2,155 647 $3.33 49 2018 Yes Yes Yes 1 Bedroom/1 Bath $2,175 660 $3.30 48 1987 Yes Yes Yes 1 Bedroom/1 Bath $1,995 700 $2.85 21 1986 Yes Partially Yes 1 Bedroom/1 Bath $1,750 650 $2.69 8 1953 Yes No Yes 1 Bedroom/1 Bath $1,650 560 $2.95 16 1953 Yes Partially Yes 1 Bedroom/1 Bath $1,695 700 $2.42 25 ICONIC
RENT SURVEY 5077 Lankershim Blvd 11259 Otego St. 11262 Otsego St 11201 Otsego St 11054 Otsego St 11265 Morrison St 11005 Morrison St 11325 Morrison St 11120 Huston St 10741 Camarillo St 11124 Camarillo St 26 ICONIC
11259 OTSEGO ST SALES COMPARABLES 27 ICONIC
SALES COMPARABLES PROPERTY 11259 Otsego St 4400 Farmdale Ave 11544 Moorpark St 10640 Whipple St LOCATION NoHo Arts District North Hollywood Studio City North Hollywood NUMBER OF UNITS 8 6 8 5 YEAR BUILT 1950 1957 1956 1954 DATE SOLD Subject May-18 Jun-18 Jan-18 SALE PRICE $2,400,000 $2,125,000 $2,825,000 $1,850,000 PRICE/UNIT $300,000 $354,167 $353,125 $370,000 CAP RATE 4.21% 4.15% 3.90% 3.21% GRM 14.99 17.00 16.20 19.81 PRICE/SF $450 $391 $371 $450 UNIT MIX ICONIC 1 Bedroom/1 Bath 1 Bedroom/1 Bath 2 Bedroom/ 1 Bath 1 Bedroom/1 Bath 2 Bedroom/ 2 Bath 8-1 Bedroom/1 Bath 3 Bedroom/1 Bath 1 Bedroom/1 Bath 2 Bedroom/ 1 Bath 3-1 Bedroom/1 Bath 6-1 Bedroom/ 1 Bath 3-1 Bedroom/ 1 Bath 2-2 Bedroom/1 Bath 2-2 Bedroom/ 2 Bath 2-2 Bedroom/ 1 Bath 1-3 Bedroom/2 Bath 28
SALES COMPARABLES PROPERTY 11259 Otsego St 5029 Cartwright Ave 10924 Camarillo St 11840 Riverside Dr LOCATION NoHo Arts District North Hollywood North Hollywood Valley Village NUMBER OF UNITS 8 6 8 30 YEAR BUILT 1950 1952 1953 1956 DATE SOLD Subject Mar-18 Jun-18 Sep-18 SALE PRICE $2,400,000 $1,611,000 $2,000,000 $7,525,000 PRICE/UNIT $300,000 $268,500 $250,000 $250,833 CAP RATE 4.21% 3.80% N/A 3.52% GRM 14.99 17.71 N/A 15.86 PRICE/SF $450 $376 $408 $383 UNIT MIX 1 Bedroom/1 Bath 1 Bedroom/1 Bath 2 Bedroom/ 1 Bath 1 Bedroom/1 Bath 2 Bedroom/ 1 Bath 1 Bedroom/1 Bath 2 Bedroom/ 1 Bath 8-1 Bedroom/1 Bath 4-1 Bedroom/ 1 Bath 2-2 Bedroom/ 1 Bath 7-1 Bedroom/ 1 Bath 1-2 Bedroom/1 Bath 19-1 Bedroom/1 Bath 11-2 Bedroom/1 Bath 29 ICONIC
SALES COMPARABLES MAP 11259 Otsego St 5029 Cartwright Ave 11840 Riverside Dr 10924 Camarillo St 4400 Farmdale Ave 11544 Moorpark St 10640 Whipple St 30 ICONIC
AGENT CONTACT PETER STRAUSS Partner o: 747-444-3303 m: 310-993-7600 peter@iconicinv.com BRE #01335696 ICONIC 16530 Ventura Blvd Suite 409 Encino, CA 91436