FOR SALE KAPELA F O R S A L E 2121 COLUMBIA STREET SAN DIEGO, CA 92101 Exclusively Offered by: Hans Strom, DRE #01222709 Tel: (619) 243-1244 Email: hans@stromcommercial.com 624 Broadway, Suite 503 San Diego, California 92101 www.stromcommercial.com
Property Summary Valuation: Price: $1,664,500 $/SF: $379.00 Cap Rate: 5.00% Building SF: 4,390 Land SF: 2,540 Year Built: 2011 % Leased: 100% Overview: Completed in April of 2011, Kapela, meaning union of old and new was developed as a reconstructive symbol in Little Italy, morphing aged residential construction with modern, eye-catching design and new construction standards. The combination of Massaranduba hardwood siding, known for its lasting warmth and beauty along with long horizontal lines, asphalt shingle siding, known for its texture and architectural placement, galvanized metal accent siding, known for a reflective and durable surface that can be bent and formed to a structure, and classic white Santa Barbara stucco that, when polished properly, acts as a blank canvas for shadow and light were carefully selected to interact with each other; protecting the homes within. Kapela s townhomes are each equipped with all the energy efficient creature comforts that people have come to expect. Each unit s intereior boasts clean and modern finishes, from window casings made of aluminum accent casing which showcase large openings into the interior spaces to built-in storage units that match and complement the custom kitchen cabinets in black/brown mahogany. Attention to detail is evident in every aspect of design and construction. Understanding the importance of social and family interaction, Kapela provides double height living spaces, high ceilings, private patios and expansive rooftop decks which, in practice, give each unit its own private yard in the city with which to share with friends and family. This development illustrates that in-fill architecture, when handled responsibly to climate, scale, locality and constructability, creates an environment rich in originality, privacy, social interaction and convenience without concessions. 2
Property Location Located in Little Italy The Art & Design District Broadway and the financial district County & Federal Courts Trolley, bus, Coaster & Amtrack stations Over 30 restaurants & delis 10 public parking lots San Diego Bay parks & trails Seaport Village Horton Plaza & The Gaslamp District 3
Floorplan Unit 1 4
Floorplan Unit 2 5
Floorplan Unit 3 6
Floorplan Unit 4 7
Rental Performa Kapela Proforma Assumptions and Results Holding Period: 5 Disposition: Rental Rate Annual Inflation 3.00% Cap Rate On Sale: 5.00% Commission: 5.00% Unit Mix Other Costs of Sale: 0.50% 2121 Unit One 1 Average S.F. 650 Average Monthly Rent/S.F. $3.07 Total Cost Cost Per S.F. Cost/Unit Average Monthly Rent $1,995 2121 Unit Two 1 Average S.F. 875 Average Monthly Rent/S.F. $2.97 Average Monthly Rent $2,595 2120 State 1 Average S.F. 900 Average Monthly Rent/S.F. $2.22 Average Monthly Rent $1,995 2140 State 1 Sale Price $1,664,500 $379.16 $416,125 Average S.F. 1,100 Less: Loan Amount $832,250 Average Monthly Rent/S.F. $2.36 Initial Investment: $832,250 Average Monthly Rent $2,595 Total Project Rental Income Total Units 4 2121 unit one $1,995.00 Average Wt. Unit Size 881 2121 unit two $2,595.00 Average Wt. Monthly Rent Per S.F. $2.60 2120 state $1,995.00 Average Wt. Monthly Rent $2,295 2140 state $2,595.00 Net Rentable Area 3,525 Gross Rental Income/Year $110,160.00 Private Outdoor Space 865 Net Rental Income/Year $83,225.00 Total Bldg S.F. 4,390 Garage S.F. 550 Debt Service Operating / Vacancy (As % of Gross Revenues) 7.2% Loan-to-Value (LTV) 50% Interest Rate 3.00% Land Acres: 0.06 Terms (Years) 30 Current Market Value of Land $378,972 Loan Amount $832,250 Land $/S.F. $150.00 DS/month ($3,508.80) Start Period 0 ADS/Year ($42,105.59) Completion Period 0 Year of Refinance 0 Discounting Profit Discount Rate 10% Period (Years) 5 Discount Factor 0.621 Future Value (FV) $663,154 Present Value (FV) $411,766 IRR including discounting 49.48% 8
Assumptions & Results RENTAL PROFORMA GROSS REVENUE rentable SF Month Year 2121 Columbia Street Unit One (225 SF View Roof Deck) $ 3.07 PER SQ.FT. 650 $ 1,995.00 $ 23,940.00 2121 Columbia Street Unit Two (300 SF View Roof Deck) $ 2.97 PER SQ.FT. 875 $ 2,595.00 $ 31,140.00 Unit two includes garage on Columbia St.(360 SF) 2120 State Street (140 SF Private Patio) $ 2.22 PER SQ.FT. 900 $ 1,995.00 $ 23,940.00 2140 State Street (200 SF View Roof Deck) $ 2.36 PER SQ.FT. 1100 $ 2,595.00 $ 31,140.00 2140 includes garage on State St.(190 SF) GROSS SCHEDULED INCOME (GSI) $ 110,160.00 LESS VACANCY & CREDIT LOSS 2.36% RATE $ (2,595.00) OPERATION EXPENSE Parking for 2121 Unit One $ 100 per month $ (1,200.00) Parking for 2120 $ 100 per month $ (1,200.00) Pest Control $ 45 per month $ (540.00) Trash/Recycling Service $ 50 per month $ (600.00) Maintenance $ 50 per month $ (600.00) Reserve Saving for Maintenance (new building) $ 100 per month $ (1,200.00) OPERATION SUBTOTAL (7,935.00) Operation and Vacancy as a % of GSI 7.20% NET OPERATING INCOME (NOI) $ 102,225.00 ESTIMATED TAXES AT SALE $ (17,110.00) Current Tax Per Year = $3469.24 INSURANCE $ (1,890.00) PRE TAX CASH FLOW PER YEAR $ 83,225.00 NET OPERATING INCOME (NOI) after tax / insurance $ 83,225.00 CAPITALIZED VALUE CAP RATE 5.0% RATE CAP VALUE $ 1,664,500 Price Per SF 3525 inhabitalble SF $ 472 4940 built SF including gargages and patios $ 337 CASH ON CASH RETURN FIRST YEAR 5.00% $ UNIT STATISTICS SF $/PSF MONTHLY ANNUAL Lease Expiration Unit 1 650 $3.07 $1,995 $23,940 10/15/12 Unit 2 875 $2.97 $2,595 $31,140 1/1/13 Unit 3 900 $2.22 $1,995 $23,940 10/30/12 Unit 4 1,100 $2.36 $2,595 $31,140 10/30/12 9
Rental Income Forcast & Cash Flow Forcast Kapela Proforma Rental Income Forecast Multi-family Units Current Projected Projected Projected Projected Projected Projected Projected Projected Projected Period Initial 1 2 3 4 5 6 7 8 9 10 Year Initial 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Inflation Factor 1 1 1.03 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 Rental Income $110,160.00 $113,468.51 $116,872.56 $120,378.74 $123,990.10 $127,709.81 $131,541.10 $135,487.33 $139,551.95 $143,738.51 Vacancy $2,595.00 $2,672.85 $2,753.04 $2,835.63 $2,920.70 $3,008.32 $3,098.57 $3,191.52 $3,287.27 $3,385.89 Gross Operating Income $107,565.00 $110,795.66 $114,119.53 $117,543.11 $121,069.41 $124,701.49 $128,442.53 $132,295.81 $136,264.68 $140,352.62 Operating Expenses $5,149.68 $5,304.44 $5,463.57 $5,627.48 $5,796.30 $5,970.19 $6,149.30 $6,333.78 $6,523.79 $6,719.50 Net Operating Income w/o tax and insurance $102,415.32 $105,491.22 $108,655.96 $111,915.64 $115,273.11 $118,731.30 $122,293.24 $125,962.03 $129,740.90 $133,633.12 Average Rental Rate Per Unit $2,295 $2,363.93 $2,434.85 $2,507.89 $2,583.13 $2,660.62 $2,740.44 $2,822.65 $2,907.33 $2,994.55 Average Rental Rate Per S.F. $2.60 $2.68 $2.76 $2.85 $2.93 $3.02 $3.11 $3.20 $3.30 $3.40 Completed Units 4 4 4 4 4 4 4 4 4 4 Kapela Proforma Cash Flow Forecast Current Projected Projected Projected Projected Projected Projected Projected Projected Projected Period Initial 1 2 3 4 5 6 7 8 9 10 Year Initial 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Inflation Factor 1 1 1.03 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 Rental Income $110,160.00 $113,468.51 $116,872.56 $120,378.74 $123,990.10 $127,709.81 $131,541.10 $135,487.33 $139,551.95 $143,738.51 Vacancy $2,595.00 $2,677.86 $2,758.19 $2,840.94 $2,926.17 $3,013.95 $3,104.37 $3,197.50 $3,293.43 $3,392.23 Gross Operating Income $107,565.00 $110,790.65 $114,114.37 $117,537.80 $121,063.94 $124,695.85 $128,436.73 $132,289.83 $136,258.53 $140,346.28 Taxes / Insurance $19,000.00 $19,000.00 $19,000.00 $19,000.00 $19,000.00 $19,000.00 $19,000.00 $19,000.00 $19,000.00 $19,000.00 Operating Expenses $5,149.68 $5,299.07 $5,458.04 $5,621.78 $5,790.44 $5,964.15 $6,143.07 $6,327.37 $6,517.19 $6,712.70 Net Operating Income $83,415.32 $86,491.58 $89,656.33 $92,916.02 $96,273.50 $99,731.70 $103,293.66 $106,962.46 $110,741.34 $114,633.58 Annual Debt Service ($42,105.59) ($42,105.59) ($42,105.59) ($42,105.59) ($42,105.59) ($42,105.59) ($42,105.59) ($42,105.59) ($42,105.59) ($42,105.59) Cash Flow Before Taxes From Operations $41,309.73 $44,385.99 $47,550.73 $50,810.42 $54,167.90 $57,626.11 $61,188.06 $64,856.87 $68,635.74 $72,527.98 Sale Price: $1,659,000 $1,729,831.62 $1,793,126.57 $1,858,320.37 $1,925,469.98 Commission: $82,950.00 $86,491.58 $89,656.33 $92,916.02 $96,273.50 Other Costs of Sale: $8,295.00 $8,649.16 $8,965.63 $9,291.60 $9,627.35 Loan Balance $832,250.00 $790,144.41 $748,038.81 $705,933.22 $663,827.62 Net Sale Proceeds: $735,505 $844,546.48 $946,465.80 $1,050,179.53 $1,155,741.51 Owner's Cash Flows $0 ($832,250) $44,385.99 $47,550.73 $50,810.42 $1,352,656.56 Internal Rate of Return 61.53% Total Profit $663,153.70 10
KAPELA BUILDING F O R S A L E Exclusively Offered by: Hans Strom President Lic # 01222709 hans@stromcommercial.com (619) 243-1244 x 102 624 Broadway, Suite 503 San Diego, California 92101 619.243.1244 619.243.1246 Fax Lic #01222709