8560-8590 WEST SUNSET BOULEVARD WEST HOLLYWOOD CALIFORNIA ICONIC MIXED-USE INVESTMENT OFFERING Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a California licensed real estate broker California License Number 01385740 ( HFF ).
2 THE SUNSET Holliday Fenoglio Fowler, L.P. ( HFF ), as the exclusive advisor, is pleased to present the rare opportunity to acquire a 100% fee simple interest (1) in The Sunset, an iconic 178,699 square foot mixed-use property located on the world famous Sunset Boulevard in the heart of West Hollywood, California. As one of the premier experiential mixed-use destination campuses in West Los Angeles, The Sunset (the Property or the Building ) encompasses 2.22 acres and boasts a preeminent 10-story, 71,875 square foot Class A office tower (the Office Tower ) with a 2-level, 25 stall subterranean parking garage, a three building high-end retail and office complex (the Retail Plaza ) totaling 106,824 square feet and a 4-level, 906 stall shared underground parking garage. The total available parking spaces to the Property is 931 stalls resulting in a parking ratio of 5.21:1,000 SF. Currently 90.4% leased, The Sunset provides a unique diversification of cash flow attained through the commercial retail and office component, parking and billboard/signage advertising opportunities. The rapidly urbanizing Sunset Strip, L.A. s equivalent of Times Square, has experienced an unprecedented explosion of upscale residences, shopping, dining, and hotel development benefiting the Property. Boasting nearly 420 feet of street frontage on Sunset Boulevard combined with its central West Hollywood location, contributes to the Property s brand as a world class mixed-use experiential destination, featuring some of the world s most recognizable brands in fashion and health/fitness, such as Equinox, SoulCycle, H&M, and Oliver Peoples. The walkable amenity base and unique position within an evolving market will solidify The Sunset as an ideal location for office and retail tenants alike. (1) Tall wall signages on the office tower are subject to an easement and excluded from this offering.
INVESTMENT SUMMARY 3 PROPERTY OVERVIEW OFFICE TOWER ADDRESS NET RENTABLE AREA YEAR BUILT/RENOVATED PARKING STALLS # OF STORIES % LEASED 8560 West Sunset Boulevard 71,875 SF RETAIL PLAZA 1963 2001 (Full Renovation)/2007 25 10 79.6% ADDRESS NET RENTABLE AREA YEAR BUILT/RENOVATED # OF STORIES % LEASED 8570 West Sunset Boulevard 43,603 SF 2002/2007 2 97.8% 8580 West Sunset Boulevard 7,126 SF 2002/2007 1 100.0% 8590 West Sunset Boulevard 56,095 SF 2002/2007 2 97.3% Retail Plaza Totals: 106,824 SF 906 (1) 97.7% Property Totals: 178,699 SF 931 90.4% (1) Parking is subject to easement and parking agreements. MAJOR TENANT SUMMARY % of NRA: 25.7% % of NRA: 10.1% % of NRA: 8.2% % of NRA: 7.9% % of NRA: 4.1% % of NRA: 4.0% % of NRA: 3.3% % of NRA: 2.3%
4 ICONIC EXPERIENTIAL MIXED-USE ASSET As companies continue to use real estate as a recruitment and retention tool to attract the best of the best talent, The Sunset offers an unrivaled mixed-use experiential campus in an iconic location within walking distance of everything the famous Sunset Strip has to offer. The Office Tower has undergone a multi-million dollar capital renovation, including a new exterior skin designed by the renowned Nadel Architects. The 10-story Class A office tower features incredible views from the Pacific Ocean to Downtown Los Angeles, modern finishes and upgraded lobby, flexible floor plates and has been awarded an Energy Star label for four consecutive years. Additionally, in 2013 the building earned a LEED Gold certification. The Retail Plaza is anchored by Equinox and consistently ranks as one of their best performing gyms nationally. Additional tenants include H&M, which is the second largest global clothing retailer, SoulCycle and Café Primo. In addition to the retail space, H&M utilizes a portion of the second floor plaza space as their West Coast real estate headquarters and showroom. 28% TOTAL RENTABLE SQUARE FOOTAGE COMPONENT DETAIL LUXURY GYM RETAIL 18% OFFICE 54% WORLD FAMOUS ADDRESS, DEEP AMENITY BASE The billboard-lined Sunset Strip has evolved into the top nightlife destination in Los Angeles and features a premier collection of restaurants, stores, bars and nightclubs frequented by celebrities and socialites alike. PROXIMITY TO AFFLUENT DEMOGRAPHICS The Sunset s central West Hollywood location adjacent to Beverly Hills, proximity to entertainment giants and affluent surrounding demographics has attracted a critical mass of talented young workers into the market, giving businesses in the area a competitive advantage. Hollywood Hills, an affluent neighborhood popular with celebrities, achieves average home prices over $5MM, with some neighborhoods averaging $20MM and current listings exceeding $70MM. 232,656 Population $103,897 2015 Est. Avg. Household Income $2,000,000 Average Home Price 59% % Bachelor Degree or Higher 1,566 Number of Home Sales Over $2 million SIGNIFICANT PUBLIC AND PRIVATE INVESTMENT Over $1.2 billion in recently completed, ongoing and planned developments exist within walking distance of The Sunset. Notably Sunset La Cienega, located adjacent to the Project, will feature two 10-story hotel towers totaling 296 keys and two 8-story luxury residential towers with nearly 190 units.
EXECUTIVE SUMMARY 5 ROBUST LEASING MOMENTUM Since 2014, the West Hollywood office market has experienced significant net absorption of over 400,000 square feet, totaling +/- 16% of the Class A inventory. With minimal office supply under construction, office market fundamentals are forecasted to remain vigorous with current office rents rivaling Downtown Santa Monica and the Beverly Hills Triangle. HIGHLY DESIRABLE BILLBOARD AND SIGNAGE ADVERTISEMENT SPACE (2) The Sunset presents a unique opportunity to drive value through signage revenues. The Property features numerous, highly visible, signage options in one of the nation s most prominent advertising markets, aptly considered the Times Square of the West Coast. The Sunset Strip ranks as the 5th most visited tourist destination in L.A. with over 1 million visitors per year who spend nearly $1 billion annually in West Hollywood. Over 105,000 vehicles pass in front of the Property each day. Potential additional digital and billboard development exists. DIVERSIFIED CASH FLOW WITH UPSIDE POTENTIAL Only 12.3% of tenants in occupancy expire through March 2020, providing investors a stable near-term and diversified income stream. An immediate value-add opportunity exists through the lease-up of the 17,143 square feet of vacant space. A total of 69.1% of the existing tenants expire between 2020-2023 with weighted average in-place rents 30% below market, presenting a significant mark-to-market opportunity to generate an incremental $2.3 million in NOI. (2) Excludes tall wall signage on the office tower GROSS RENT (UPON EXPIRATION) VS. MARKET RENT Rent (PSF/Mos. FSG) $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 $4.21 $5.06 $5.57 1.9% $5.59 $6.47 7.0% $6.98 $7.46 $7.80 $6.99 $5.22 10.8% 3.3% $5.16 15.4% $6.97 29.8% $7.97 $6.23 $5.87 $5.31 13.1% $8.47 4.1% $9.05 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% % of SF Expiring % RSF Expiring (Re-measured) Gross Rent Upon Expiration Market Rent
Malibu
7 BEVERLY CENTER MALL VENICE CEDAR SINAI HOSPITAL PACIFIC OCEAN BEVERLY HILLS TRIANGLE/ RODEO DRIVE PACIFIC DESIGN CENTER CENTURY CITY SANTA MONICA THE EDITION HOTEL (Marriott, Witkoff Group, New Valley) + West Coast flagship of the Edition concept + 148 Keys + 20 High-End Condos + Unique food & entertainment offerings + Full spa and nightlife venues BEVERLY HILLS SIERRA TOWERS SOHO HOUSE MEMBERS ONLY CLUB & BOA STEAKHOUSE RAINBOW ROOM WHISKY-A-GO-GO HOLLYWOOD HILLS WEST HOLLYWOOD THE PENDRY WEST HOLLYWOOD + Montage Resorts flagship lifestyle hotel + 149 Keys + 45 High-End Condos + 6k SF Digital Signage + 25k SF entertainment and dining venues + Multiple rooftop decks and lounges SUNSET LA CIENEGA - CIM (COMING MARCH 2017) Over 526,240 SF THE JAMES HOTEL + 296 Keys + Two 10-Story Towers + Ground floor retail and restaurant 8500 SUNSET, THE RESIDENCES + 190 Upscale Units + Two 8-Story Towers + Open Air Plaza MONDRIAN HOTEL SUNSET TOWER HOTEL SUNSET SUNSET BLVD. BLVD. KATANA RESTAURANT ANDAZ (HYATT) HOTEL The Hollywood Hills is the premier address for high-end residential in West Hollywood. Home prices average about $5M with some neighborhoods exceeding $20M. ACCESS TO EXECUTIVE HOUSING 91 1 Minute to Hollywood Hills WALK 7 Minutes to Beverly Hills SCORE 10 Minutes to Hollywood & Highland 15 Minutes to Century City 20 Minutes to Santa Monica ONE OF THE WEST COAST S MOST WALKABLE CITIES
8 8560 WEST SUNSET BLVD. OFFICE 71,875 SF 8570 WEST SUNSET BLVD. OFFICE AND RETAIL 43,603 SF 8580 WEST SUNSET BLVD. RETAIL 7,126 SF 8590 WEST SUNSET BLVD. RETAIL 56,095 SF TALL WALL SIGNAGE (NAP) BILLBOARD G BILLBOARD F BILLBOARD D The Sunset features a total of 931 stalls for a parking ratio of 5.21 per 1,000 SF. The parking is provided in a four-level subterranean structure beneath the Retail Plaza with 25 VIP stalls available to office tenants beneath the Tower.
INVESTMENT ADVISORS MICHAEL LEGGETT Senior Managing Director 415.276.6924 mleggett@hfflp.com CA Lic. # 01056334 RYAN GALLAGHER Senior Managing Director 949.798.4100 rgallagher@hfflp.com CA Lic. # 01269918 ANDREW HARPER Director 310.407.2139 aharper@hfflp.com CA Lic. # 01319640 BRYAN LEY Managing Director 310.407. 2120 bley@hfflp.com CA Lic. # 01458927 TIM GEIMAN Director 949.798.4109 tgeiman@hfflp.com CA Lic. # 01921744 MICHAEL MATCHETT Analyst 310.407.2132 mmatchett@hfflp.com CA Lic. # 01960206 DEBT ADVISORS LEASING ADVISORS TODD SUGIMOTO Managing Director 310.407.2111 tsugimoto@hfflp.com CA Lic. # 01264139 PAUL BRINDLEY Senior Managing Director 310.407.2112 pbrindley@hfflp.com CA Lic. # 01173794 BRIAN NIEHOUS Office Leasing Advisor JLL Senior Vice President 310.595.3824 brian.niehaus@am.jll.com CA Lic. # 01836528 MITCHELL HERNANDEZ Retail Leasing Advisor CBRE Advisory & Transaction Services 310.363.4875 mitchell.hernandez@cbre.com CA Lic. # 01875229 ATLANTA AUSTIN BOSTON CAROLINAS CHICAGO DALLAS DENVER HOUSTON INDIANAPOLIS LOS ANGELES MIAMI NEW JERSEY NEW YORK CITY ORANGE COUNTY ORLANDO PHILADELPHIA PHOENIX PITTSBURGH PORTLAND SAN DIEGO SAN FRANCISCO TAMPA WASHINGTON D.C. Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a California licensed real estate broker California License Number 01385740 ( HFF ). HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. 2016 HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 23 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.