Post on 23-Sep-2020
transcript
OFFERING MEMORANDUM
Oak Street Apartments 10 Unit Apartment Complex
436 W. Oak Street Stockton, California 95203
INVESTMENT CONTACTS:
Colton Toste
Associate
+1 209 752 0296
colton@naibenchmark.com
BRE#01993261
Ruben Sandoval
Vice President
+1 209 918 1536
ruben@naibenchmark.com
BRE#01806675
Confidentiality & Disclaimer
Section 1
This Confidential Offering Memorandum (the “Memorandum”) has been prepared and
presented to the recipient (the “Recipient”) by NAI Benchmark First Commercial (NAI
“Benchmark”) as part of NAI Benchmark’s efforts to market for sale the real property
located at 436 W. Oak Street, Stockton, CA, (“The Property”). NAI Benchmark is the exclusive
agent and broker for the owner(s) of the Property (the “Owner”). NAI Benchmark is
providing this Memorandum and the material contained in it to the Recipient solely to assist
the Recipient in determining whether the Recipient is interested in potentially purchasing all
or part of the Property. NAI Benchmark also is providing this Memorandum and the material
in it to the Recipient with the understanding that the Recipient will independently investigate
those matters that it deems necessary and appropriate to evaluate the Property and that the
Recipient will rely only on its own investigation, and not NAI Benchmark, the Owner or this
Memorandum, in determining whether to purchase the Property. The Recipient’s use of this
Memorandum, in determining whether to purchase the Property. The Recipient’s use of this
Memorandum and the material in it is strictly governed by the terms and conditions of the
Registration and Confidentiality Agreement that the Recipient previously executed and
delivered to NAI Benchmark.
PLEASE NOTE THE FOLLOWING:
NAI Benchmark, the owner and their respective agents, employees, representatives, property
managers, officers, directors, shareholders, members, managers, partners, join ventures,
corporate parents or controlling entities, subsidiaries, affiliates, assigns and predecessors and
successors-in-interest make no representations or warranties abut the accuracy,
correctness or completeness of the information contained in this Memorandum. The
Recipient is urged not to rely on the information contained in this Memorandum and to make
an independent investigation of all matters relating to the Property.
This Memorandum includes statements and estimates provided by or to NAI Benchmark
and/or the Owner regarding the Property. Those statements and estimates may or may not
be accurate, correct or complete. Nothing contained in this Memorandum should be construed
as a representation or warranty about the accuracy, correctness or completeness of such
statements and estimates. Further, nothing contained in this Memorandum should be
construed as a representation or warranty about the accuracy, correctness or complete-
ness of such statements and estimates. Further, nothing in this Memorandum should be
construed as representation or warranty about any aspect of the Property, including, without
limitation, the Property’s (1) past, current or future performance, income, uses or
occupancy, (2) past, current or prospective tenants, (3) physical condition, (4) compliance,
or (5) appropriateness for any particular purpose, investment, use or occupancy. Again, the
Recipient is urged not to rely on this Memorandum and the statements and estimates in it and
to make an independent investigation regarding the Property and the statements and
estimates contained herein.
This Memorandum may include statements regarding, references to, or summaries of, the
nature, scope or content of contracts and/or other documents relating to the Property.
Those statements, references or summaries may or may not be accurate, correct or
complete. Additionally, NAI Benchmark may not have referenced or included summar- ies of
each and every contract and/or other document that the Recipient might determine is
relevant to its evaluation of the Property. Nothing contained in this Memorandum should be
construed as a representation or warranty about the accuracy, correctness or completeness
of such statements, representations or summaries. On request and as available, and subject
to the Owner’s consent, NAI Benchmark will provide the Recipient with copies of all
referenced contracts and other documents. NAI Benchmark assumes no obligation to
supplement or modify the information contained in this Memorandum to reflect events or
conditions occurring on or after the date of its preparation of this Memorandum.
This Memorandum does not constitute an offer to sell, or a solicitation of an offer to buy, an
interest in the Property. Nothing contained in this Memorandum may be construed to
constitute legal or tax advice to a Recipient concerning the Property.
More detailed information regarding the anticipated terms, conditions and timing of any
offering by the Owner relating to the Property will be provided in due course by separate
communication. NAI Benchmark and/or the Owner reserve the right to engage at any time in
discussions or negotiations with one or more recipients of this Memorandum and/or other
prospective purchasers of the Property without notice or other obligation to the Recipient.
The Owner reserves the right to change the terms of any offering relating to the Property or
to terminate without notice that offering. The Owner also reserves the right to operate the
Property in its sole and absolute discretion prior to the completion of any sale of the Property.
NAI Benchmark reserves the right to return of this Memorandum and the material in it and
any other material provided by NAI Benchmark to the Recipient at any time. Acceptance of
this Memorandum by the Recipient constitutes acceptance of the terms and conditions
outlined above.
436 W. Oak St, Stockton, CA • 10-Unit Apartment Complex
PROPERTY SUMMARY
Property Overview
Section 1
TOTAL ASKING PRICE $750,000
SQUARE FOOTAGE 5,760
TOTAL UNITS 10
PRICE PER UNIT $75,000
CURRENT CAP RATE 6.13%
CURRENT GRM 9.27
PRICE PER SF $130.21
FINANCIAL SUMMARY
Please do not visit property without
an appointment.3
Colton Toste
Associate
+1 209 752 0296
colton@naibenchmark.com
BRE#01993261
Ruben Sandoval
Vice President
+1 209 918 1536
ruben@naibenchmark.com
BRE#01806675
436 W. Oak Street, Stockton, CA • 10-Unit Apartment Complex
SITE
PROFORMA CAP RATE 7.53%
Stockton Ports
Delta
Stockton Arena
Property Overview
INVESTMENT HIGHLIGHTS
• Strong upside potential in rents
• Quiet Neighborhood
• Low maintenance landscaping
• All units are separately metered for utilities
• Convenient access to restaurants, shops, and
public transit.
• Close proximity to I-5 and crosstown highway.
Perfect for commuters.
PROPERTY DESCRIPTION
NAI Benchmark First Commercial is pleased to offer a
unique sale of the Oak Street Apartments in Downtown
Stockton, a well-maintained, 10-Unit Apartment
Complex with upside potential. The property is two
stories and consists of 8 (1) bedroom units and 2 (2)
bedroom units.
The property has experienced historically strong
occupancy and is located in a quiet neighborhood.
Multi family properties in the immediate area have
benefitted from landlord’s increasing capital expenditure.
The property has two coin-operated laundry rooms on-
site
436 W. Oak Street, Stockton, CA • 10-Unit Apartment Complex
Property Overview
Section 1
ADDRESS 436 W. Oak Street, Stockton, CA
COUNTY San Joaquin Co unty
APN #
YEAR BUILT 1970
RENTABLE SF 5760
LAND AREA (ACRES) 0.1722
LAND AREA (SF) 7,500
TOTAL UNITS 10
STORIES 2
CONSTRUCTION TYPE Wood Frame
SIDING MATERIAL
FOUNDATION Cement Slab
ROOF TYPE Flat
HVAC Wall-mounted Units
LAUNDRY Facility on Site
PROPERTY SUMMARY
Stucco/Brick
BUILDINGS 1
436 W. Oak Street, Stockton, CA • 10-Unit Apartment Complex
137-216-02
FINANCIAL ANALYSIS
Financial Overview
Estimated Income
Scheduled Base Rent $80,880
Laundry Income ($50/month) $600
Less: Vacancy Factor 3.0% $2,426
Scheduled Gross Income $79,053.60
Estimated Operating Expenses
New Property Taxes (1.2717%) $9,537.75
Direct Assessments $129.23
Insurance $3,000
Water ($210 per month) $2,520
Garbage ($170 per month) $2,040
Sewer ($340 per month) $4,080
PG&E House Meter ($20 per month) $240
Repairs and Maintenance ($400 per unit) $4,800
Landscaping ($75 per month) $900
Off Site Management (6% of EGI) $4,743
Pest Control ($90 per month) $1,080
Estimated Total Expenses $33,070.20
42%
Estimated Net Operating Income $45,983.40
INCOME / OPERATING EXPENSES ACTUAL RENT ROLL / MARKET RENTS
UNITS UNIT
TYPE APPROX SQ FT CURRENT RENT MARKET RENTS
A 1BD/1BA 545 $590 $750
B 1BD/1BA 700 $700* $750
C 1BD/1BA 545 $700** $750
D 1BD/1BA 545 $700** $750
E 2BD/1BA 545 $650 $850
F 1BD/1BA 545 $575 $750
G 1BD/1BA 545 $700* $750
H 1BD/1BA 545 $700** $750
I 1BD/1BA 545 $700** $750
J 2BD/1BA 700 $725 $850
Rent Total $6,740 $7,700
• A recent rent survey shows that in place rents are below market. The next investor can
increase rents without capital expenditure to $750 each unit for comparable 1
bedroom/1bathroom apartments and $850 for comparable 2 bedroom/ 1 bathroom
apartments.
• Increasing to market rents would bring CAP Rate to 7.53% and GRM to 8.11
Asking Price $750,000
Current
CAP Rate 6.13%
Price Per Unit $75,000
GRM 9.27
ACTUAL
Asking Price $750,000
Proforma
CAP Rate 7.53%
Price Per Unit $75,000
GRM 8.11
PROFORMA
*Unit B,G are coming available April 2018, will be rented at $700. ** Rental amount is reflecting the increase that will take affect June 2018.
2
1126 E. Vine St, Stockton, CA
RENT COMPARABLES
419 Flora Street, Stockton, CA
324 Magnolia St. Stockton
Asking Rent $900
Unit Type 1 BD/1 BA
Asking Rent $750
Unit Type 1 BD/1 BA
4
1611 N. El Dorado St, Stockton, CA
1030 N. San Joaquin Street, Stockton, CA 95202 • 10 Unit Apartment Complex
Rent Comparables
436 W. Oak Street, Stockton, CA • 10-Unit Apartment Complex
Asking Rent $ 925
Unit Type 1 BD/1 BA
Asking Rent $1,895
Unit Type 2 BD/1 BA
5 6
324 Magnolia St , Stockton, CA Asking Rent $ 1,095
Unit Type 2 BD/1 BA Asking Rent $ 1,020
Unit Type 2 BD/1 BA
3416 Pacific Ave, Stockton, CA
1
3
1030 N. San Joaquin Street, Stockton, CA 95202 • 10 Unit Apartment Complex
RENT COMPARABLES
1
Comparable Graph
$-
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
$700.00
$800.00
$900.00
$1,000.00
Subject 1 2 3
Asking Rent (1 Bedroom)
436 W. Oak Street, Stockton, CA • 10-Unit Apartment Complex
$-
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
Subject 4 5 6
Asking Rent (2 Bedroom)
LOCATION OVERVIEW
Market Overview
Downtown Stockton Historically, Downtown Stockton began with a mix of thriving commercial ventures and colorful characters. Today, Downtown Stockton is a vibrant waterfront community with endless opportunities and amenities. The Downtown is captivated with world-class art and entertainment, renovated historical buildings, museums, theaters, restaurants and attractions. Stockton Ball Park The Stockton Ball Park is home to the Stockton Ports, a minor league baseball team that is an affiliate of the Oakland Athletics. The ballpark features 5,200 fixed seats in addition to other seating facilities and amenities. The Waterfront With the remarkable transformation of Stockton’s Downtown Waterfront Community, this historic area boasts the deep water Stockton Channel, a thriving port that transports goods from the heart of Stockton to the Pacific Ocean. Beautiful Residential communities, hotels and resorts line the river banks.
San Joaquin County is located in the Central Valley of California, just east of the San Francisco Bay Area. As of the 2010 census, the population was 685,306. The county seat is Stockton. The Central Valley is on e of the world’s most productive agricultural regions. More than 230 crops are grown there. On less than 1 percent of the total farmland in the United State, the Central Valley produces 8 percent of the nation’s agricultural output by value: 17 billion USD in 2002. Its agricultural productivity relies on irrigation from both surface water diversions and groundwater pumping from wells. About on-sixth of the irrigated land in the U.S. is in the Central Valley. Virtually all non-tropical crops are grown in the Central Valley, which is the primary source for a number of food products throughout the United States, including tomatoes, almonds, grapes, cotton, apricots, and asparagus. There are 6,000 almond growers that produce more than 600 million pounds a year, about 70 percent of the world’s supply. Early farming was concentrated close to the Sacramento-San Joaquin Delta, where the water table was high year round and water transport more readily available, but subsequent irrigation projects have brought many more parts of the valley into productive use. For example, the Central Valley Project was formed in 1935 to redistribute and store water for agricultural and municipal purposes with dams and canals. The even larger California State Water Project was formed in the 1950s and construction continued throughout the following decade.
The City of Stockton
San Joaquin County, California
1 hR 48 MIN 105 MILES
Location Overview
The Bay Area
Even though Stockton is not technically considered part of the
Bay Area, many of its residents commute to the Bay Area for
jobs and therefore is directly influenced by the Bay Area’s
economic health.
The San Francisco Bay Area, commonly known as the Bay
Area, is a metropolitan region that encompasses metropolitan
areas such as San Francisco-Oakland (12th largest in the
country). San Jose (31st largest in the country), and smaller
urban and rural areas. The United States Census Bureau
defines the Bay Area as a Combined Statistical Area (CSA)
with approximately 7.4 million people, including the nine
counties bordering San Francisco Bay (Alameda, Contra
Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara,
Solano, and Sonoma) as well as Santa Cruz and San Benito
Counties, making it the fifth largest CSA in the United States.
The combined urban area of San Jose and San Francisco is
the 43rd largest urban area in the world.
The Bay Area is anchored by three major cities. San Francisco
is the cultural and financial center of the metropolitan area
and Northern California in general. It is the second-most
densely populated major city (population greater than
200,000) in the United States. The largest city in the Bay Area
in terms of both land and population is San Jose, which is
located in the South Bay and is part of the world renowned
technology hub known as Silicon Valley. Oakland, the third
most populous city, is a central hub for the East Bay, is a
major industrial center, and contains the Port of Oakland, the
fifth busiest container port in the United States. The region’s
northern counties encompass California’s famous Wine
Country, home to hundreds of vineyards and wineries while
the region’s Pacific Ocean coastline hosts numerous beaches.
The San Francisco Bay Area has the 2nd most Fortune 500
Companies in the United States, and is known for its natural
beauty, liberal politics, entrepreneurship, and diversity. With
excellent colleges in proximity, the area ranks second in
highest density of college graduates, and performs above the
state median household income in the 2010 census. Based on
a 2013 population report from the California Department of
Finance, the Bay Area is the only region in California where
the rate of people migrating in from other areas in the United
States is greater than the rate of those leaving the region.
Additionally, In 2011, the San Francisco Bay Area had a GDP of
$535 billion, which would rank 19th among countries.
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