FLORA AVENUE APARTMENTS A 40-Unit Non-Rent Controlled Multifamily Community in Bell, CA
TYLER C. LEESON Senior Managing Director 949-258-4539 tyler.leeson@marcusmillichap.com CA License: 01451551 EXCLUSIVELY LISTED BY MATTHEW J. KIPP Vice President Investments 949-419-3254 matthew.kipp@marcusmillichap.com CA License: 02008945 DREW F. HOLDEN Associate 949-419-3321 drew.holden@marcusmillichap.com CA License: 01962800 DANIEL E. RABIN Financial Analyst 949-419-3306 daniel.rabin@marcusmillichap.com CA License: 01945571 ASHLEY A. SANCHEZ Transaction Coordinator 949-419-3219 ashley.sanchez@marcusmillichap.com TheLeesonGroup.com This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. 2016 Marcus & Millichap Activity ID: Y0100174
CONFIDENTIALITY AGREEMENT 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. 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.
FLORA AVENUE APARTMENTS 6317-6333 Flora Avenue Bell, CA 90201 TABLE OF CONTENTS 06 EXECUTIVE SUMMARY 10 PROPERTY DESCRIPTION 12 FINANCIAL ANALYSIS 16 MARKET COMPARABLES 24 MARKET OVERVIEW
EXECUTIVE SUMMARY
THE OFFERING Marcus & Millichap, as the exclusive listing agent, is pleased to present the opportunity to acquire Flora Avenue Apartments, a 40-unit apartment community located in the city Bell, California. Built in 1956, Flora Avenue Apartments represent an opportunity to acquire a midsize apartment community in Los Angeles County that is not subject to rent control. As such, investors will have the opportunity to immediately increase rental income by more aggressively managing the property. Additionally, rental income can further be maximized by implementing a strategic renovation program. The subject property is located on a quiet residential street near the intersection of Gage Avenue and Atlantic Avenue and consists of 10, two-story buildings totaling 35,970 square feet situated on a 1.52 acre lot. The property is comprised of 20, two-bedroom/one-bathroom units and 20, three-bedroom/one-bathroom units. Flora Avenue Apartments is centrally located in South East Los Angeles offering residents manageable commute times to thousands of jobs and many major employment hubs in Los Angeles County and Orange County. Given its attractive central location in Los Angeles County, the ability to capture additional income simply by raising rents to market levels, and the opportunity to add value to the property via interior and common area renovations, Flora Avenue Apartments is well suited for investors seeking strong and consistent cash flow. OFFERING SUMMARY Price $9,450,000 Units 40 Price Per Unit $236,250 Approx. Net Rentable Square Feet 35,970 Price Per Square Foot $262.72 Number of Residential Buildings 10 Year Built 1956 Lot Size (Acres) 1.52 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. 2016 Marcus & Millichap Activity ID: Y0100174 7
8 LOCAL MAP
REGIONAL MAP 9
PROPERTY DESCRIPTION
PROPERTY SUMMARY THE PROPERTY Property Name Flora Avenue Apartments Address 6317-6333 Flora Avenue City Bell State California Zip 90201 Assessor s Parcel Number 6317-025-006 SITE DESCRIPTION Number of Units 40 Year Built 1956 Approx. Net Rentable Square Feet 35,970 Number of Residential Buildings 10 Parcel Size 1.52 Acres Density 26 Dwelling Units Per Acre PROPERTY CHARACTERISTICS Many Single Story Units 100 Percent Two-Bedroom and Three-Bedroom Units 86 Walk Score - Steps Away from Schools, Grocers, Bell Library and Community Center Spacious Floor Plans Security Doors Carport Parking Storage Lockers On-Site Laundry Facility This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. 2016 Marcus & Millichap Activity ID: Y0100174 11
FINANCIAL ANALYSIS
FINANCIAL SUMMARY PROPERTY DESCRIPTION Property Name Flora Avenue Apartments Property Address 6317-6333 Flora Avenue City, State, Zip Bell, CA 90201 Number of Units 40 Approx. Net Rentable SF 35,970 Year Built 1956 FINANCIAL INDICATORS Price $9,450,000 Down Payment 48% / $4,500,000 Price/Unit $236,250 Price/SF $262.72 Current CAP 3.25% Market CAP 5.65% Current GIM 15.77 Market GIM 11.25 Ownership Fee Simple FINANCING Loan Amount $4,950,000 Interest Rate 3.85% I.O. UNIT MIX CURRENT MARKET Unit Type # of Units Avg. Unit Size (SF) (1) Rental Range Average Rent/SF Monthly Income Rental Range Average Rent/SF 2 Bed/1 Bath 20 800 $1,050 - $1,200 $1.42 $22,675 $1,650 $2.06 $33,000 3 Bed/1 Bath 20 1,000 $1,300 - $1,350 $1.31 $26,275 $1,750 $1.75 $35,000 Totals 40 35,970 $48,950 $68,000 NOTES/ASSUMPTIONS (1) Owner and Broker make no representation as to the actual square footage of any units. Prospective purchasers are encouraged to independently confirm the measurement of all units. Monthly Income This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. 2016 Marcus & Millichap Activity ID: Y0100174 13
INCOME & EXPENSES INCOME ANALYSIS CURRENT MARKET INCOME TOTAL PER UNIT TOTAL PER UNIT GROSS POTENTIAL RENT $587,400 $14,685 $816,000 $20,400 Total Other Income $12,000 $300 $24,000 $600 GROSS POTENTIAL INCOME $599,400 $14,985 $840,000 $21,000 Less Vacancy Allowance (GPR) 3.0% / $17,622 $441 3.0% / $24,480 $612 EFFECTIVE GROSS INCOME $581,778 $14,544 $815,520 $20,388 EXPENSE ANALYSIS CURRENT MARKET EXPENSES TOTAL PER UNIT TOTAL PER UNIT Real Estate Taxes (1.5110% + $8,115) $150,905 $3,773 $150,905 $3,773 Insurance $7,000 $175 $7,000 $175 Utilities $38,400 $960 $38,400 $960 Trash $10,416 $260 $10,416 $260 Landscaping $3,600 $90 $3,600 $90 Repairs & Maintenance $20,000 $500 $20,000 $500 On-Site Payroll $15,600 $390 $15,600 $390 Management Fee 3.0% / $17,453 $436 3.0% / $24,466 $612 General & Administrative $4,000 $100 $4,000 $100 Reserves & Replacements $7,000 $175 $7,000 $175 TOTAL EXPENSES $274,374 $6,859 $281,386 $7,035 Expenses per SF $7.63 $7.82 Percent of EGI 47.2% 34.5% NET OPERATING INCOME $307,404 $7,685 $534,134 $13,353 14 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. 2016 Marcus & Millichap Activity ID: Y0100174
PRICING SUMMARY PRICING CURRENT MARKET Price $9,450,000 $9,450,000 Down Payment 48% / $4,500,000 48% / $4,500,000 First Trust Deed/Mortgage $4,950,000 $4,950,000 Interest Rate 3.85% I.O. 3.85% I.O. NET OPERATING INCOME $307,404 $534,134 CASH FLOW ANALYSIS Debt Service ($190,575) ($190,575) Debt Coverage Ratio 1.61 2.80 Net Cash Flow After Debt Service $116,829 $343,559 Return % 2.60% 7.63% VALUE INDICATORS CAP Rate 3.25% 5.65% GIM 15.77 11.25 Price/Unit $236,250 $236,250 Price/SF $262.72 $262.72 For questions about the financial analysis for Flora Avenue Apartments please contact: Drew Holden T 949-419-3321 drew.holden@marcusmillichap.com Tyler Leeson T 949-258-4539 tyler.leeson@marcusmillichap.com Matthew Kipp T 949-419-3254 matthew.kipp@marcusmillichap.com Daniel Rabin T 949-419-3306 daniel.rabin@marcusmillichap.com This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. 2016 Marcus & Millichap Activity ID: Y0100174 15
MARKET COMPARABLES
SALES COMPARABLES MAP 6317-6333 FLORA AVENUE 1 5211 LIVE OAK STREET 1 17
SALES COMPARABLES 1 6317-6333 Flora Avenue, Bell, CA 90201 Status: Active List Price: $9,450,000 Year Built: 1956 Units: 40 Price/Unit $236,250 Approx. Net Rentable SF 35,970 Price/NRSF: $262.72 Current CAP Rate: 3.25% Current GIM: 15.77 5211 Live Oak Street, Cudahy, CA 90201 Status: Active List Price: $3,850,000 Year Built: 1963 Units: 16 Price/Unit $240,625 Net Rentable SF 15,680 Price/NRSF: $245.54 Proforma CAP Rate: 5.70% (1) Proforma GIM: 12.57 (1) Unit Mix 20 2 Bed/1 Bath 20 3 Bed/1 Bath Unit Mix 16 2 Bed/1 Bath NOTES (1) Property is being marketed with 13 of the 16 units vacant 18 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. 2016 Marcus & Millichap Activity ID: Y0100174
RENT COMPARABLES MAP 6317-6333 FLORA AVENUE 1 7301 FLORENCE AVENUE 2 5953 RIVERSIDE AVENUE 3 5211 LIVE OAK STREET 4 4 4039 EAST 56TH STREET 5 2866 CLARENDON AVENUE 2 5 3 1 20
RENT COMPARABLES FLORA AVENUE APARTMENTS 6317-6333 Flora Avenue, Bell, CA 90201 DOWNEY POINTE 7301 Florence Avenue, Downey, CA 90240 1 SUBJECT PROPERTY DISTANCE FROM SUBJECT: 3.05 MILES Unit Type Square Feet (1) Current Rent Current Rent PSF 2 Bed/1 Bath 800 $1,050 - $1,200 $1.42 3 Bed/1 Bath 1,000 $1,300 - $1,350 $1.31 Unit Type Square Feet Current Rent Current Rent PSF 1 Bed/1 Bath 710 $1,306 $1.84 1 Bed/1 Bath + Den 850 $1,557 $1.83 2 Bed/1 Bath 910 $1,653 $1.82 2 Bed/1 Bath 1,010 $1,758 $1.74 Units: 40 Year Built: 1956 Units: 96 Year Built: 1973 NOTES/ASSUMPTIONS (1) Owner and Broker make no representation as to the actual square footage of any units. Prospective purchasers are encouraged to independently confirm the measurement of all units This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. 2016 Marcus & Millichap Activity ID: Y0100174 21
RENT COMPARABLES 5953 RIVERSIDE AVENUE Huntington Park, CA 90255 2 5211 LIVE OAK STREET Cudahy, CA 90201 3 DISTANCE FROM SUBJECT: 0.56 MILES Unit Type Square Feet Rental Range Rent PSF 2 Bed/1 Bath 803 $1,650 $2.05 DISTANCE FROM SUBJECT: 1.30 MILES Unit Type Square Feet Current Rent Current Rent PSF 2 Bed/1 Bath 980 $1,595 $1.63 Units: 4 Year Built: 1953 Units: 16 Year Built: 1963 22 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. 2016 Marcus & Millichap Activity ID: Y0100174
RENT COMPARABLES 4039 EAST 56TH STREET Maywood, CA 90270 4 2866 CLARENDON AVENUE Huntington Park, CA 90255 5 DISTANCE FROM SUBJECT: 0.82 MILES DISTANCE FROM SUBJECT: 1.63 MILES Unit Type Square Feet Current Rent Current Rent PSF 1 Bed/1 Bath - $1,050 - Unit Type Square Feet Current Rent Current Rent PSF 3 Bed/1 Bath 956 $2,050 $2.14 3 Bed/1 Bath - $1,840 - Units: 3 Year Built: 1950 Units: Single Family Residence Year Built: 1921
MARKET OVERVIEW
DEMOGRAPHIC SNAPSHOT Flora Avenue Apartments are located in the city of Bell, in Los Angeles County, California. 2016 ESTIMATE BELL LOS ANGELES COUNTY Total Population 36,178 10,208,773 Total Households 9,073 3,403,857 Median Household Income $36,428 $56,699 Average Household Income $47,806 $86,746 Median Age 29.6 35.8 Vacancy 1.61% 2.76% Median Home Value (2010) $326,672 $430,811 Sources: Marcus & Millichap Research Services, Experian, Inc., Alteryx DEMOGRAPHIC REPORT The chart below features demographic data at 1, 3, and 5 miles from 6317-6333 Flora Avenue. 2016 ESTIMATE 1 MILE 3 MILES 5 MILES Total Population 68,060 331,826 992,708 Total Households 16,733 80,465 242,761 Median Household Income $36,379 $38,040 $37,877 Average Household Income $47,699 $49,816 $51,807 Median Age 29.3 29.5 29.4 Vacancy 1.22% 1.38% 2.49% Sources: Marcus & Millichap Research Services, Experian, Inc., Alteryx This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. 2016 Marcus & Millichap Activity ID: Y0100174 25
TYLER C. LEESON Senior Managing Director 949-258-4539 tyler.leeson@marcusmillichap.com CA License: 01451551 EXCLUSIVELY LISTED BY MATTHEW J. KIPP Vice President Investments 949-419-3254 matthew.kipp@marcusmillichap.com CA License: 02008945 DREW F. HOLDEN Associate 949-419-3321 drew.holden@marcusmillichap.com CA License: 01962800 DANIEL E. RABIN Financial Analyst 949-419-3306 daniel.rabin@marcusmillichap.com CA License: 01945571 ASHLEY A. SANCHEZ Transaction Coordinator 949-419-3219 ashley.sanchez@marcusmillichap.com TheLeesonGroup.com