Multi-Family Investment Offering in Mar Vista

Transcription

1 Multi-Family Investment Offering in Mar Vista MITCHELL AVE. LOS ANGELES, CA Exclusively offered by Charles Dunn Company, Inc. Michel Hibbert Senior Managing Director (310) Lic. # Century Park East, Suite 2350 Los Angeles, CA Direct Fax Lic. #

2 Table of Contents 3 Property 9 Financial Analysis 13 Market 4 Property and Offering Summary 5 Property Photographs 7 Neighborhood and Regional Maps 10 Rent Roll 11 Pro Forma Income and Expense Statement 12 Financial Summary 14 Mar Vista Submarket 17 Contact 18 Contact 8 Aerial and Plat Maps These materials are based on information and content provided by others which we believe are accurate. No guarantee, warranty or representation is made by the Charles Dunn Company or its personnel, and all interested parties must independently verify its accuracy and completeness. As well, any projections, assumptions, opinion, or estimates are used for example only and do not represent the current or future performance of the identified property. Your tax, 2 financial, legal and toxic substance advisors should conduct a careful investigation of the property and its suitability for your needs, including land use limitations. The property is subject to prior lease, sale, change in price, or withdrawal from the market without notice.

3 PROPERTY INFORMATION

4 Property Property and Offering Summary Charles Dunn Company, Inc., has been exclusively retained by the owner in connection with the sale of, an 8-unit, multi-residential property located in the Mar Vista neighborhood of Los Angeles. The offering represents an opportunity to purchase the fee simple interest in a stabilized asset with the potential to produce excellent cash flow. Site Name and Address Assessor s Parcel Number Property Type Multifamily Offering Price $1,750,000 Price Per Unit/Price Per Gross $218,750 / $292 Square Foot New Loan Buyer to obtain new loan of $1,100,000 Number of Buildings/Stories 1 Buildings / 2 Stories Number of Units Unit Mix Approximate Building Area (Gross) Construction 8 Units 1 1 Bedroom / 1 Bath Units 7 2 Bedroom / 1 Bath Units 5,984 SF Wood Frame & Stucco Utilities All units separately metered for gas and electricity Year Built 1957 Approximate Lot Size Zoning 7,100 Sq. Feet LAR3 Offering Highlights 100% occupied 5.4% Cash on Cash Return at Market Rents 8.6% Total Return at Market Rents Excellent Mar Vista Location 17% Potential Upside in Rents 12 Market GRM / 5.4% Market CAP 4 :Marketing Package/12757 Mictchell Ave. [ df] Rev. 1

5 Property Property Photographs 5

6 Property Property Photographs 6

7 Property Neighborhood and Regional Maps 7

8 Property Aerial and Plat Maps N 8

9 FINANCIAL ANALYSIS

10 Financial Analysis Rent Roll Rent Roll as of 6/1/2013 Unit Mix Rent Market Rent 1 2/1 $ 1,450 $ 1, /1 $ 1,091 $ 1, /1 $ 1,224 $ 1, /1 $ 853 $ 1, /1 $ 1,435 $ 1, /1 $ 1,450 $ 1, /1 $ 1,450 $ 1, /1 $ 1,450 $ 1,575 Totals 8 $10,403 $12,175 Range of Rental Rates Average Total MIX MINIMUM MAXIMUM 1/1 $ 853 $ 853 2/1 $1,091 $1,450 Monthly Rent Average Total 1/1 1 $ 853 $ 853 2/1 7 $1,364 $ 9,550 Totals 8 $10,403 10

11 Financial Analysis Pro Forma Income and Expense Statement Projected Income Current Market Per Unit % of SGI Per Unit % of SGI Scheduled Gross Income: $124,836 $15, % $146,100 $18, % Estimated Laundry Income : $1,020 $125 1% $1,020 $162 1% Less Vacancy Reserve: $(3,776) $(472) 3% $(4,414) $(552) 3% Gross Operating Income $122,080 $15,260 98% $142,706 $17,836 97% Actual Pro Forma Operating Expenses: Current Market Per Unit % of SGI Per Unit % of SGI Property Taxes $21,875 $2, % $21,875 $2,711 15% Off-Site Management $6,100 $ % $6,100 $ % Property Insurance $2,700 $ % $2,700 $ % Reserves $2,000 $ % $2,000 $ % Repairs & Maintenance $8,000 $1, % $8,000 $1, % Landscaping $840 $105.7% $ 840 $ % Pest Control $480 $60.4% $ 480 $60 0.7% Utilities (Water & Electric) $4,500 $ % $4,500 $ % Utilities (Gas) $1,800 $ % $1,800 $ % Miscellaneous $600 $75.5% $ 600 $75.4% Total Expenses $48,895 $6, % $48,895 $6,112 34% Net Operating Income: $73,185 $9, % $93,811 $11,726 64% NOTE: The income and expenses in this analysis are based on projections, prior performance and assumptions that are used industrywide. However, the Charles Dunn Company and its agents strongly suggest that Buyers rely on their own expertise to project the future income and expenses of the Property. 11

12 Financial Analysis Pro Forma Income and Expense Statement Investment Summary Offering Price: $1,750,000 Number of Units: 8 Property Address: Mitchell Ave. Year Built: 1957 APN: Price Per Unit: $218,750 Gross Sq. Ft.: 5,984 Price Per S.F.: $292 Average S.F. Per Unit: 748 Cap (current / market): 4.2% / 5.4% Lot Size (Acres): 0.16 GRM (current / market): 13.9 / 12 Parking Spaces: 7 New Financing Approx Loan Amount 63% * $1,100,000 Down Payment: 37% * $650,000 5 Yr. Fixed, Years 6-30 Variable (2.55 over 12 MAT) Terms: 30 Interest: 3.45% Monthly Pmt: $4, Yearly Pmt: $58,906 Debt Coverage: 1.24 * As a percentage of Purchase Price Unit Mix & Scheduled Income Unit Mix Total Units Current Rent Current Monthly Rent Market Rent Market Monthly Rent 1-1/1 1 $ 853 $ 853 $1,150 $1, /1 7 $1,091-1,450 $9,550 $1,575 $11,025 Scheduled Monthly Rent: $10,403 $12,175 Scheduled Yearly Rent: $124,836 $146,100 Annual Operating Summary Current Market Scheduled Gross Income: $124,836 $146,100 Estimated Laundry Income: $1,020 $1,020 Less Vacancy Reserve: $3, % * $4, % Gross Operating Income: $122,080 $142,706 Expenses: $(48,895) 39% * $(48,895) 34% Net Operating Income: $73,185 $93,811 Loan Payments: $(58,906) $(58,906) Pre-Tax Cash Flow: $14, % ** $34, % Plus Principal Reduction: $21,290 $21,290 Total Return Before Taxes: $35, % ** $56, % * As a percentage of Scheduled Gross Income ** As a percentage of Down Payment Pro Forma Annual Operating Expenses Current Per Unit % of SGI Market Per Unit % of SGI Property Taxes $21,875 $2, % $21,875 $2,739 15% Off-Site Management $6,100 $ % $6,100 $ % Property Insurance $2,700 $ % $2,700 $ % Reserves $2,000 $ % $2,000 $ % Repairs & Maintenance $8,000 $1, % $8,000 $1, % Landscaping $840 $105.7% $ 840 $105.6% Pest Control $480 $60.4% $ 480 $60.3% Utilities (Water & Electric) $4,500 $ % $4,500 $ % Utilities (Gas) $1,800 $ % $1,800 $ % Miscellaneous $600 $75.5% $600 $75.4% Total Expenses $48,895 $6, % $48,895 $6,112 34% Per S.F.: $8.17 $6,112 $8.17 NOTE: The income and expenses in this analysis are based on projections, prior performance and assumptions that are used industrywide. However, the Charles Dunn Company and its agents strongly suggest that Buyers rely on their own expertise to project the future income and expenses of the Property. 12

13 MARKET INFORMATION

14 Market Mar Vista Submarket Mar Vista is a district situated near the center of Los Angeles West Side. The city of Santa Monica lies to the northwest, West Los Angeles to the north, Palms to the northeast, Culver City to the east, Marina Del Rey to the southwest, and Venice to the west. Its approximate boundaries are the city limits of Culver City and the San Diego Freeway (Interstate 405) on the northeast and southeast, Walgrove Avenue on the southwest, and the Santa Monica Municipal Airport and National Boulevard on the northwest. Major thoroughfares include Venice, Sawtelle, Inglewood and Grandview Boulevards; McLaughlin, Barrington, Short and Centinela Avenues; and Beethoven Street. TOTAL POPULATION 37,447 AREA 2.90 square miles (Land Area) POPULATION CHANGE 1.1% ( ) PERSONS PER HOUSEHOLD 2.3 AVERAGE HOUSEHOLD INCOME $97,060 EDUCATION 25 Years of Age or Over: High School Graduates % Bachelor Degree % Neighborhood Mar Vista is an economically diverse neighborhood of apartment buildings and single-family homes. The hilly areas near its border with Santa Monica, whose particular ocean views give Mar Vista its name, hold some of the most expensive land in the community. Mar Vista is considerably less densely populated than neighboring Palms, as its homeowners association successfully fended off the 1950 s up-zoning that changes much of Palms and West Los Angeles from suburban areas to renter-dominated urban neighborhoods. It should be noted, though that some 60 percent of the districts residents live in rental housing, owing to the density of apartment buildings on thoroughfares like Venice Boulevard and Barrington Avenue. A portion of north-central Mar Vista, the Gregory Ain Mar Vista Tract, is designated as a Historic Preservation Overlay Zone by the city of Los Angeles. This area, built immediately after World War II, contains an abundance of excellently preserved mid-century modern architecture. Demographics Including the small portion of Culver City within its boundaries, zip code has a population of 37,447 based on L.A. Department of City Planning estimates. Racial composition was 64.9% white, 3.37% black, 1% Native American, 16.25% Asian or Pacific Islander, 14.5% some other race, and 5.5% two or more races; 29.1% respondents of all races claimed Hispanic or Latino ethnicity. Per capita income was $55,258 and median family income was $75,

15 Market Overview Mar Vista Submarket Gregory Ain Mar Vista Historical Preservation Overlay Zone The Mar Vista Tract was designed by Gregory Ain in collaboration with Joseph Johnson and Alfred Day. Ain was a significant second generation modernist architect who had worked with and was influenced by the first generation of California Modern Masters European immigrants Richard Neutra and Rudolph Schindler. In 2003, the Gregory Ain Mar Vista Tract became the first Post-World War II Modern historic district in the City of Los Angeles. Gregory Ain Mar Vista Historical Preservation Overlay Zone The Mar Vista Tract development was planned in 1947 for a hundred houses on a 60-acre site. The first stage was 52 houses, which turned out to be the final stage. By rotating the one floor plan in different directions, Ain was able to create a sense of variation between the houses. Garage placement in relation to the house also gave each house its own individuality. The Average size of the houses was 1,060 square feet, exclusive of the double garage. The sales price of the homes was about $12,000, considerably higher than the contractor-inspired houses around nearby Venice Boulevard that were then selling for about $5,

16 Market Overview Mar Vista Submarket Multifamily Market Trends Mar Vista The 765,043-unit Los Angeles multifamily market remains at the nation s premier level, with low vacancy and high rents. Demand is strong, rents remain sturdy and the county retains its allure for high-end renters as well as providing a stock of medium-market units. Market Overview Vacancy Rates: Vacancy rates decreased in the Mar Vista multifamily submarket, ending the 1 st quarter 2013 with 2.6% from 3.2% four quarters ago. The average apartment vacancy rate for the Westside closed at 2.8%, a drop from four quarters ago with 3.5%. Rental Rates: Average rental rates decreased over the 12-month period ending 1 st quarter 2013, down from $1,980 to $1,909. For the Westside, average market rental rates ended the 1 st quarter 2013 at $1,613, up 2.1% from Investment: The Mar Vista neighborhood witnessed two multifamily transactions that closed in the 1 st quarter 2013 with total units and a total volume of approximately $3.25 million. The two buildings totaled 8,367 square feet and the average price per square foot equated to $ per square foot. The average cap rate was at 5.5% for the area. Development: In 2012, Reis indicated 999 competitive units have been completed in 11 projects. Construction has been generally active in Los Angeles. From 2006 to 2010, 18,068 units were added, averaging 3,614 per year. Reis forecasts new construction to approximately 21,000 units from 2012 to 2016, just shy of the 25,922 forecast to be absorbed, keeping the market in balance for the next few years. 16

17 CONTACT INFORMATION

18 Contact Michel Hibbert Senior Managing Director (310) Lic. # Charles Dunn Company 1925 Century Park East Suite 2350 Los Angeles, CA Lic. # These materials are based on information and content provided by others which we believe are accurate. No guarantee, warranty or representation is made by the Charles Dunn Company or its personnel, and all interested parties must independently verify its accuracy and completeness. As well, any projections, assumptions, opinion, or estimates are used for example only and do not represent the current or future performance of the identified property. Your tax, financial, legal and toxic substance advisors should conduct a careful investigation of the property and its suitability for your needs, including land use limitations. The property is subject to prior lease, sale, change in price, or withdrawal from the market without notice. 18