VERDUGO RETAIL CENTER OFFERING MEMORANDUM 2834-40 N. Verdugo Road Glendale, CA 91208
TABLE OF CONTENTS EXECUTIVE SUMMARY Offering Summary Offering Overview Property Photos Site Plan Regional Map Local Map Assessor Map Retailer Maps FINANCIAL ANALYSIS Rent Roll Pro Forma Analysis MARKET OVERVIEW City of Glendale Demographics SECTION I 5 6 7 11 12 13 14 15 SECTION II 18 19 SECTION III 21 22 Exclusively marketed by: Exclusively Listed By: KW Commercial NNN Properties Group Michael Knudsen 251 South Lake Avenue Suite 320 Director Net Leased Investments Pasadena, CA 91101 Dir 626.410.6200 Cell 626.757.4207 Corporate License #01444805 mike@nnnpropertiesgroup.com nnnpropertiesgroup.com CA BRE Broker #01840490 Mike Knudsen Director Net Leased Investments O 626.410.6200 M 626.757.4207 mike@nnnpropertiesgroup.com CA BRE Broker #01840490
CONFIDENTIALITY AGREEMENT This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of 2834-40 N. Verdugo Blvd., Glendale, CA 91208 ( Property ). This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Owner or the Property, to be all-inclusive or to contain all or part of the information that prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition, and other factors beyond the control of the Owner and the KW Commercial NNN Properties Group ( NNN Properties Group ). Therefore, all projections, assumptions, and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. Neither the Owner nor NNN Properties Group, nor any of their respective directors, officers, affiliates, or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents. The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time, with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered, and approved by the Owner and any conditions to the Owner s obligations therein have been satisfied or waived. By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or NNN Properties Group. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or NNN Properties Group. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner. Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 3
I. EXECUTIVE SUMMARY 2834-40 N. Verdugo Road Glendale, CA 91208 PAGE 4
OFFERING SUMMARY Investment Summary Offering Highlights Purchase Price: $1,975,000 Price Per Square Foot (Bldg.): $501 Price Per Square Foot (Land): $189 Property Summary Subject Property: 2834-40 N. Verdugo Rd. Glendale, CA 91208 Year Built: 1940 Building Area: 3,944 SF Lot Size: 10,466 SF Assessor s Parcel Number: 85654-009-003 & 024 Zoning: GLC1 Excellent low-risk, passive retail investment or owner-user opportunity in prime infill Los Angeles County location on the Verdugo Corridor, the main thoroughfare connecting downtown Glendale and La Crescenta No restricitons for medical (parking restrictions for medical in Glendale are waived for buildings under 5,000 SF in GLA) 100% occupied center offers stable short term cash flow; belowmarket leases and flexibile commercial zoning offer significant long term cash flow and appreciation potential Rare commercial lot in a very affluent, predominantly residential area priced at less than $200 per land foot GLC1 zoning offers potential to build mixed-use, residential over commercial project (please check with City of Glendale for details) Well positioned on Glendale s primary north-south corridor featuring over 23,000 cars per day, and offering superb access to the 2, 210 and 134 Freeways Private lot and immediate surface streets offer ample parking Well maintained property with negligible deferred maintenance; all three buildings separately metered for water and electricity Strong local demographics in the exclusive Verdugo Woodlands district of Glendale with over 19,000 residents and a median household income of approximately $85,000 within a 1-mile radius Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 5
OFFERING OVERVIEW The Growth Investment Group is proud to offer for sale 2834-40 North Verdugo Road, a prime owner-user or multi-tenant retail investment opportunity located on the Verdugo Corridor, the primary north/south street connecting Glendale with La Crescenta. The offering is ideal for both passive, risk averse investors in a 1031 exchange who are willing to sacrifice short term cash flow for an excellent location, long term appreciation potential and historically negligable vacancy rates, as well as local owner-users seeking a rare commercial property with dedicated parking and excellent visibility in the exclusive Verdugo Woodlands district of Glendale, one of the city s most affluent communities featuring over 19,000 residents and a median household income of approximately $85,000 within a 1-mile radius. Property Description Situated on a large, 10,466 square foot parcel on the soft corner of North Verdugo and Alpha Road, the offering consists of three separate single story general commercial buildings developed in 1940 and totaling 3,944 square feet in gross leasable area. The property is 100% occupied, with each building leased to successful daily needs tenants on short term, below market leases. The property benefits from approximately 120 feet of prominent frontage along Verdugo Road, offering excellent visibility, as well as easy ingress-egress for both northbound and southbound traffic. The flexibile GLC1 zoning allows for a variety of retail and office uses, including medical offce (Glendale does not impose parking ratio restrictions for commercial properties with less than 5,000 square feet of gross leasable area). Location and Parking The offering is in a prime location on North Verdugo Road, the primary commercial corridor connecting the Glendale with La Crescenta to the north featuring over 21,000 cars per day, and is located just 2.2 miles from the Glendale Freeway. The offering is shadow anchored by Old Fashion Deli & Market, a popular grocery store servicing the local residents in the immediate trade area, and is located just 1.5 miles from Glendale Community College and 4.2 miles from Gendale s downtown business district featuring a myriad of popular retail and entertainment destinations. The offering includes a dedicated parking lot with seven parking spaces as well as an abundance of free street parking. Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 6
2840 N. VERDUGO (SAM PIERRE HAIR STUDIO) Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 7
2834 N. VERDUGO (VERDUGO PET CABIN) Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 8
2836 N. VERDUGO (ZUMBA 4 LIFE) Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 9
DEDICATED PARKING LOT Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 10
SITE PLAN Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 11
SANTA REGIONAL MAP CLARITA NORTHRIDGE VAN NUYS AIRPORT VAN NUYS ENCINO STUDIO CITY BURBANK AIRPORT BURBANK GLENDALE PASADENA ARCADIA MONROVIA GLENDORA UPLAND RANCHO CUCAMONGA S SANTA MONICA MARINA DEL REY LAX EL SEGUNDO MANHATTAN Manhattan BEACH Beach HERMOSA BEACH BEVERLY HILLS CULVER CITY TORRANCE DOWNTOWN LOS ANGELES LONG BEACH AIRPORT SANTA FE SPRINGS BALDWIN PARK CITY OF INDUSTRY NORWALK FULLERTON ANAHEIM LOS ANGELES CO. BREA DIAMOND BAR POMONA CHINO S A N B E R N A R D I N O C O U N T Y O R A N G E C O U N T Y ONTARIO INT'L AIRPORT CORONA R I V E R S I D E C O U N T Y FONTANA ONTARIO MIRA LOMA RIVERSIDE PALOS VERDES SAN PEDRO PORT OF LOS ANGELES PORT OF LONG BEACH LONG BEACH HUNTINGTON BEACH GARDEN GROVE SANTA ANA COSTA MESA JOHN WAYNE AIRPORT ORANGE IRVINE Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com NEWPORT BEACH PAGE 12 BEACH
LOCAL MAP Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 13
ASSESSOR MAP Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 14
RETAILER MAP FACING SOUTH 182,300 vehicles per day Downtown Glendale (~3 mi) Canada Blvd. (21,900 vehicles per day) N. Verdugo Rd. (21,300 vehicles per day) Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 15
RETAILER MAP FACING NORTHWEST Downtown La Crescenta 182,300 vehicles per day N. Verdugo Rd. (21,300 vehicles per day) Property located 0.3 mi. south Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 16
II. FINANCIAL ANALYSIS 2834-40 N. Verdugo Road Glendale, CA 91208 III. MARKET OVERVIEW PAGE 17
RENT ROLL Unit Tenant Square Feet Lease Start Lease Expiration Years Remaining Monthly Rent PSF Monthly Rent Lease Type Options Increases Comments Unit 2834 Verdugo Pet Cabin 1,500 10/1/15 9/30/16 <1 year $ 1.53 $ 2,300 Modified Gross Unit 2836 Zumba 4 Life 944 8/1/15 7/31/16 <1 year $ 1.69 $ 1,600 Modified Gross Unit 2840 Sam Pierre Hair Studio 1,500 10/1/13 9/30/18 >2 years $ 1.87 $ 2,800 Modified Gross 3,944 $ 1.70 $ 6,700 1 option to renew (terms to be negotiated) 1 option to renew (terms to be negotiated) 1 option to renew (terms to be negotiated) None None Annual increases of $100 starting 10/1/2013 Landlord pays property taxes, insurance & exterior maintenance; Tenant pays interior maintenance & utilities Landlord pays property taxes, insurance & exterior maintenance; Tenant pays interior maintenance & utilities Landlord pays property taxes, insurance & exterior maintenance; Tenant pays interior maintenance & utilities Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 18
PRO FORMA ANALYSIS Investment Overview Price $1,975,000 Price Per SF $501 NOI $53,492 Cap Rate 2.71% Pro Forma Cap Rate 3.43% Property Information Assessor's Parcel Number(s) 5654-009-003 & 024 Year Built 1940 Building Size (SF) 3,944 Parking 7 uncovered spaces Lot Size (SF) 10,466 Zoning GLC1 Tenants Address Rentable Square Feet Monthly Rent PSF Monthly Rent Pro Forma Monthly Rent PSF Pro Forma Monthly Rent Verdugo Pet Cabin 2834 N. Verdugo Rd. 1,500 $ 1.53 $ 2,300 $ 2.25 $ 3,37 Zumba 4 Life 2836 N. Verdugo Rd. 944 $ 1.69 $ 1,600 $ 1.75 $ 1,65 Sam Pierre Hair Studio 2840 N. Verdugo Rd. 1,500 $ 1.87 $ 2,800 $ 2.25 $ 3,37 3,944 $ 1.70 $ 6,700 $ 2.08 $ 8,40 Income Current Pro Forma Gross Scheduled Income $ 6,700.00 per month $ 80,400 $ 100,82 Vacancy Factor 3.00% $ - $ (3,02 Effective Gross Income $ 80,400 $ 97,79 Expenses Current Pro Forma New Property Taxes Direct Assessments Insurance 1.085441% Current rate $ 21,437 $ 21,43 $ 329 $ 32 $ 303.50 per month $ 3,642 $ 3,64 PG&E (Tenants pay) $ - per month $ - $ Water, Sewer & Trash (Tenants pay) $ - per month $ - $ - Repairs & Exterior Maintenance $ - per month $ - $ 1,00 Landscaping $ 125.00 per month $ 1,500 $ 1,50 Property Management $ - per month $ - $ 2,24 Total Operating Expenses 33% of GSI $ 26,908 $ 30,15 Expenses Per SF $ 6.82 $ 7.6 Net Operating Income Current Pro Forma $ 53,492 $ 67,64 Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 19
III. MARKET OVERVIEW 2834-40 N. Verdugo Road Glendale, CA 91208 II. FINANCIAL ANALYSIS PAGE 20
CITY OF GLENDALE Glendale is a city in Los Angeles County, California, United States. The 2013 estimates show that the population was 196,021 making it the third largest city in Los Angeles County and the 22nd largest city in the state of California. Glendale lies at the eastern end of the San Fernando Valley, bisected by the Verdugo Mountains, and is a suburb in the Greater Los Angeles Area. The city is bordered to the northwest by the Sun Valley and Tujunga neighborhoods of Los Angeles; to the northeast by La Cañada Flintridge and the unincorporated area of La Crescenta; to the west by Burbank and Griffith Park; to the east by Eagle Rock and Pasadena; to the south by the Atwater Village neighborhood of Los Angeles; and to the southeast by Glassell Park neighborhood of Los Angeles. The Golden State, Ventura, Glendale, and Foothill freeways run through the city. Industry Several large companies have offices in Glendale. The U.S. headquarters of the Swiss foods multinational, Nestlé, and International House of Pancakes are located in Glendale. The Los Angeles regional office of California s State Compensation Insurance Fund is in Glendale. Americas United Bank was founded in Glendale in 2006 and is still headquartered there. Nero AG, the software company that makes Nero Burning ROM, also has its main North American subsidiary located in Glendale. Panda Security, a large antivirus software company, also has its principal U.S. office in Glendale. Studios Glendale has served as a major production center for the U.S. entertainment industry and the U.S. animation industry for several decades. The Walt Disney Company outgrew its Burbank studio lot in the early 1960s, and expanded Glendale s Grand Central Business Centre about two miles east. First came the headquarters for Imagineering, followed by other divisions and offices. Today, Disney s Grand Central Creative Campus is home to Consumer Products, Disney Interactive, The Muppets Studio, and Marvel Animation Studios. Top Employers in Glendale Employer # Employees Glendale Adventist Medical Center 2,424 City of Glendale 2,021 Glendale Unified School District 1,830 Dreamworks Animation 1,531 Diagnostic Laboratories 1,370 Glendale Memorial Medical Center 1,196 Glenair Inc 1,180 Nestle Company 1,100 Glendale Community College 897 USC- Verdugo Hills Hospital 727 Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 21
DEMOGRAPHICS INCOME HOUSEHOLDS POPULATION 1 Mile Radius 3 Mile Radius 5 Mile Radius 2013 Total Population 12,668 119,360 392,487 2013 Total Adult Population 10,133 95,466 312,554 2013 Total Daytime Population 12,073 127,962 397,531 % 2013 Male Population 47.64% 47.39% 48.20% % 2013 Female Population 52.36% 52.61% 51.80% 2013 Total Population: Median Age 44 43 40 2013 Total Population: Adult Median Age 50 50 48 % 2013 White Population 79.39% 71.55% 63.54% % 2013 Black or African American Population 0.84% 1.05% 4.85% % 2013 American Indian and Alaska Native Population 0.14% 0.20% 0.42% % 2013 Asian Population 13.08% 20.04% 16.43% % 2013 Native Hawaiian and OPI Population 0.04% 0.06% 0.07% % 2013 Some Other Race Population 2.33% 3.02% 9.98% % 2013 Two or More Races Population 4.18% 4.08% 4.71% % 2013 Hispanic Population 11.81% 11.37% 25.37% Population Change 2000-2013 806 7,810 7,517 % Population Change 2000 to 2013 6.79% 7.00% 1.95% Population Change 2010-2013 301 3,773 10,032 % Population Change 2010-2013 2.43% 3.26% 2.62% 1 Mile Radius 3 Mile Radius 5 Mile Radius 2013 Households 4,741 44,294 138,993 2000 Housing Units 4,843 44,468 140,456 2000 Occupied Housing Units 4,727 43,315 136,394 % 2000 Occupied Housing Units 97.60% 97.41% 97.11% Household Change 2000-2013 13 980 2,603 % Household Change 2000 to 2013 0.27% 2.26% 1.91% Household Change 2010-2013 2 229 293 % Household Change 2010-2013 0.04% 0.52% 0.21% 1 Mile Radius 3 Mile Radius 5 Mile Radius 2013 Median Household Income $84,987 $77,910 $62,682 2013 Average Household Income $100,713 $100,844 $83,092 2013 Per Capita Income $37,926 $37,647 $29,825 % 2013 Household income: Less than $10,000 5.97% 3.71% 5.07% % 2013 Household income: $10,000 to $14,999 6.31% 5.64% 6.32% % 2013 Household income: $15,000 to $19,999 2.72% 4.75% 5.63% % 2013 Household income: $20,000 to $24,999 1.08% 3.05% 4.41% % 2013 Household income: $25,000 to $29,999 2.17% 3.35% 4.02% % 2013 Household income: $30,000 to $34,999 3.02% 2.96% 3.98% % 2013 Household income: $35,000 to $39,999 6.79% 3.67% 4.01% % 2013 Household income: $40,000 to $44,999 1.96% 3.22% 4.04% % 2013 Household income: $45,000 to $49,999 3.37% 3.23% 3.65% % 2013 Household income: $50,000 to $59,999 4.43% 6.03% 7.19% % 2013 Household income: $60,000 to $74,999 6.98% 9.11% 9.45% % 2013 Household income: $75,000 to $99,999 13.01% 10.92% 11.81% % 2013 Household income: $100,000 to $124,999 12.49% 9.69% 8.59% % 2013 Household income: $125,000 to $149,999 7.74% 6.65% 6.31% % 2013 Household income: $150,000 to $199,999 7.70% 9.11% 6.79% % 2013 Household income: $200,000 or more 14.26% 14.91% 8.73% Mike Knudsen 626.410.6200 mike@nnnpropertiesgroup.com PAGE 22
Exclusively marketed by: KW Commercial NNN Properties Group 251 South Lake Avenue Suite 320 Pasadena, CA 91101 Corporate License #01444805 nnnpropertiesgroup.com Mike Knudsen Director Net Leased Investments O 626.410.6200 M 626.757.4207 mike@nnnpropertiesgroup.com CA BRE Broker #01840490 Exclusively Listed By: Michael Knudsen Director This information Net Leased has Investments been obtained from sources believed to be reliable. We have not verified it and make no guarantee, warranty or represen- Dir tation 626.410.6200 about it. Any Cell projections, 626.757.4207 assumptions or estimates used are for sample 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 its mike@nnnpropertiesgroup.com suitability for your investment objectives. CA BRE Broker #01840490