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OFFERING MEMORANDUM 1224 N. Fairfax Avenue West Hollywood, CA 90046 Colliers International 16830 Ventura Boulevard | Suite J Encino, CA 91436 | United States colliers.com/greaterlosangeles
OFFERING MEMORANDUM
1224 N. Fairfax AvenueWest Hollywood, CA 90046
Colliers International 16830 Ventura Boulevard | Suite J
Encino, CA 91436 | United States colliers.com/greaterlosangeles
Exclusive Advisors
“Our mission is to provide our multifamily clients with
proven, personalized service that not only achieves—
but exceeds—their investment objectives. Through
a spirit of honesty, integrity and ingenuity, our
team of brokerage, research and marketing
professionals, with expertise in the San
Fernando Valley and Tri-Cities markets, aims
to maximize returns while safeguarding the
best interests of our clients.”
REZA GHOBADI Senior Vice President +1 818 325 4142 [email protected] Lic. 01780045
JOCELYN GARCIAClient Services Coordinator+1 818 325 4120 [email protected]. 02033155
ALEX FORSTER Multifamily Specialist+1 818 325 4143 [email protected]. 02046445
JARED PAPAZIAN Multifamily Specialist+1 818 325 4145 [email protected]. 02018676
ARTHUR DEDEYAN Multifamily Specialist+1 818 325 4131 [email protected]. 02036890
Table of Contents
Financial Analysis 4-8Property Overview 9-18
Market Comparables 19-25Area Overview 26-29
4 Financial Analysis
$3,095,000 $484.50VALUE
INVESTMENT SUMMARY
Value $3,095,000
Down Payment 35% $1,083,250
Year Built 1954
Units 8
Price/Unit $386,875
RSF 6,388
Price/RSF $484.50
Lot Size 6,752
Zoning WDR4
APN 5530-001-009
CAP Rate 4.55%
GRM 14.63
Proforma CAP Rate 5.14%
Proforma GRM 13.40
PRICE/SF*Information herein has been obtained from sources deemed reliable, however its accuracy cannot be guaranteed. The user is required to conduct their own due diligence and verification.
$386,875PRICE/UNIT
4.55%CAP RATE
14.63GRM
Financing SummaryLoan Amount 65% $2,011,750
Down Payment 35% $1,083,250
Loan Type Fixed
Interest Rate 4.25%
Term 5 Years
Monthly Payment $9,896.60
Debt Coverage Ratio 1.19
Property Va luat ion | 1224 N. Fa ir fax Ave | West Ho l lywood , CA 5Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and/or its licensor(s). 2019. All rights reserved.
6
Unit # Unit Type Notes Next Rent Increase Unit SF Actual Proforma
#1 1+1 8/19 N/A $1,369 $2,300
#2 1+1 N/A $2,300 $2,300
#3 1+1 N/A $2,100 $2,300
#4 1+1 Vacant N/A $2,300 $2,300
#5 1+1 11/19 N/A $2,100 $2,300
#6 1+1 12/19 N/A $2,207 $2,300
#7 1+1 9/19 N/A $2,100 $2,300
#8 2+1 Vacant N/A $3,150 $3,150
8 TOTAL 6,388 $17,626 $19,250
Gross Scheduled Monthly Rental $17,626 $19,250
Gross Scheduled Annual Rental $211,512 $231,000
Monthly Laundry Income $150 $150
Annual Laundry Income $1,800 $1,800
Total Yearly Scheduled Income $213,312 $232,800
RENT ROLL
INVESTMENT SUMMARYAnnualized Income
Actual % Actual Proforma % ProformaGross Potential Rent $211,512 $231,000
Misc. Income $1,800 $1,800Gross Potential Income $213,312 $232,800
Less Economic Vacancy -3.00% -$6,345 -3.00% -$6,930Effective Gross Income $206,967 $225,870
Less Expenses 31.94% $66,106 29.60% $66,862Net Operating Income: $140,860 $159,008
Less Debt Service $118,759 $118,759Net Cash Flow After Debt Service 2.04% $22,101 3.72% $40,248
Annualized ExpensesActual % Actual Proforma % Proforma
Real Estate Taxes 18.69% $38,688 17.13% $38,688
Insurance 1.26% $2,600 1.15% $2,600
Utilities: Water & Power, Gas & Trash 3.87% $8,000 3.54% $8,000
Pest Control 0.26% $540 0.24% $540
Repairs & Maintenance 2.90% $6,000 2.66% $6,000
Professional Management 4.00% $8,279 4.00% $9,035
Capital Reserves 0.97% $2,000 0.89% $2,000
Total Expenses 31.94% $66,106 29.60% $66,862Expenses Per RSF $10.35 $10.47
Expenses Per Unit $8,263 $8,358
Unit Mix SummaryUnit Type # of
UnitsRSF
(Approx.) TotalRSF
Actual Rent Per Unit
Actual Rent PSF
Total Actual Rent Potential
Market RentPer Unit
Market RentPSF
Total Market Rent Potential
1 Bredroom 1 Bath 7 N/A N/A $2,068 N/A $14,476 $2,300 N/A $16,100
2 Bedroom 1 Bath 1 N/A N/A $3,150 N/A $3,150 $3,150 N/A $3,150
Totals / Wtd. Averages 8 799 6,388 $2,203.25 $2.76 $17,626 $2,406.25 $3.01 $19,250
Annual Rent Potential $211,512 $231,000
Property Va luat ion | 1224 N. Fa ir fax Ave | West Ho l lywood , CA 7Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and/or its licensor(s). 2019. All rights reserved.
EXPENSES & INCOME
ExpensesCurrent PSF Per Unit Proforma PSF Per Unit Current
Real Estate Taxes $38,688 $6.06 $4,836 $38,688 $6.06 $4,836 Tax Rate based on new value/price
Insurance $2,600 $0.41 $325 $2,600 $0.41 $325 Estimated at $0.40 per SF
Utilities: Water & Power, Gas & Trash $8,000 $1.25 $1,000 $8,000 $1.25 $1,000 Estimated at $1,000 / Unit
Pest Control $540 $0.08 $68 $540 $0.08 $68 Estimated at $45 / Month
Repairs & Maintenance $6,000 $0.94 $750 $6,000 $0.94 $750 Estimated at $750 / Unit
Professional Management $8,279 $1.30 $1,035 $9,035 $1.41 $1,129 Estimated at 4% of EGI
Capital Reserves $2,000 $0.31 $250 $2,000 $0.31 $250 Estimated at $250 / Unit
Total Expenses $66,106 $10.35 $8,263 $66,862 $10.47 $8,358
Income Actual ProformaAnnual Per Unit PSF % Annual Per Unit PSF %
Gross Potential Rent $211,512 $26,439 $33.11 $231,000 $28,875 $36.16
Laundry Income $1,800 $225 $0.28 0.87% $1,800 $225 $0.28 0.80%
Gross Potential Income $213,312 $26,664 $33.39 103.07% $232,800 $29,100 $36.44 103.07%
Vacancy/Collection Allowance (% of GPR) ($6,345) ($793) ($0.99) 3.0% ($6,930) ($866) ($1.08) 3.0%
Effective Gross Income $206,967 $25,871 $32.40 100% $225,870 $28,234 $35.36 100%
Expenses Annual Per Unit PSF % Annual Per Unit PSF %
Total Expenses $66,106 $8263 $10.35 31.9% $66,862 $8358 $10.47 29.6%
Net Operating Income $140,860 $17,608 $22.05 68.1% $159,008 $19,876 $24.89 70.4%
8
Property Overview 9
PROPERTY INFORMATION
Address 1224 N. Fairfax Ave., West Hollywood, CA 90046
APN 5530-001-009
Year Built 1954
Number of Units 8
Number of Buildings 1
Building Area 6,388 SF
Land Area 6,752 SF
Zoning WDR4*
Roof Pitched
Stories 2
Laundry On-site
Parking 6
The property at 1224 N. Fairfax Avenue, in the city of West Hollywood is comprised of (7) one-bed/one-bath units and (1) two-bed/one-bath unit. Together these apartments come to 6,388 square feet of rentable space on 6,752 square feet of land. The complex includes features such as wall A/C units, Security cameras, carport parking, dish washers, and an on-site laundry room. In addition, all of the units have hardwood floors in the both the living room and bedrooms and tile floors in the kitchen.
Located in the heart of West Hollywood this asset is situated on Fairfax Avenue North of Santa Monica Boulevard and South of Fountain Avenue. This property enjoys easy access to WeHo bar scene, Whole Foods Market, Trader Joe’s, Metro Red Line, and numerous restaurants along Santa Monica Boulevard. Furthermore, the building sits mere minutes away from the 101 freeway and a short distance away from Sunset Strip, Melrose, and Beverly Hills.
Property Overview
10
11
• Prime West Hollywood Location• Unit mix of one and two bedroom units• Spacious Units• Stainless Steel Appliances• Hardwood floors in all living rooms and bedrooms; tile floors in kitchen• On-site Laundry Room• 6 Carport Parking• Gated entry with Keypad Access• Copper Plumbing• Separately metered for gas and electric• Easy to manage• Minutes away from Metro Redline Station• Mere minutes away from 101 Freeway• 16-Unit condo & 66 Apartment Building under construction on the same
block• Option to assume the existing loan. Loan amount $1,450,000, Fixed interest
rate at 3.69%, Due on August 2021
PROPERTY HIGHLIGHTS
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13
14
15
16
17
• Currently construction has begun on new improvements at West
Hollywood Park. The park will feature an Aquatic and recreation center.
• The city features the famous MOCA Museum. A recent focus has been
on design and architecture.
MOCA also utilizes the 384-seat PDC auditorium for a range of public
programs.
• West Hollywood is also home to the popular Sunet Strip famous for its
rock n’ roll reputation with artists like Jim Morrisson, Jimmy Hendrix,
and Janis Joplin having performed there in their early careers.
CITY HIGHLIGHTS
18
Market Comparables 19
RENT COMPARABLES
Year Built 1953
Units8
Type Rent SF $ / SF
1 Bed + 1 Bath $2,375 825 $2.53
1477 HAVENHURST DR. | West Hollywood, CA 900461
20
Year Built 1951
Units12
Type Rent SF $ / SF
1 Bed + 1 Bath $2,300 900 N/A
1316 N. LAUREL AVE | West Hollywood, CA 900462
Year Built 1953
Units8
Type Rent SF $ / SF
1 Bed + 1 Bath $2,690 660 N/A
8270 NORTON AVE | West Hollywood, CA 900463
Year Built N/A
UnitsN/A
Type Rent SF $ / SF
2 Bed + 1 Bath $3,250 1,200 N/A
7976 WILLOUGHBY AVE | West Hollywood, CA 900464
Year Built 1925
UnitsN/A
Type Rent SF $ / SF
2 Bed + 1 Bath $3,500 1,320 N/A
7917 NORTON AVE | West Hollywood, CA 900465
Year Built 1948
UnitsN/A
Type Rent SF $ / SF
2 Bed + 2 Bath $3,395 980 N/A
7522 FOUNTAIN AVE | West Hollywood, CA 900466
Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and/or its licensor(s). 2019. All rights reserved.
Market Comparab les | 1224 N. Fa ir fax Ave | West Ho l lywood , CA 21
1
2
6
53
4
1477 Havenhurst Dr.
1316 N. Laurel Ave7522 Fountain Ave
7917 Norton Ave
8270 Norton Ave
7976 Willoughby Ave
22
SALES COMPARABLES
Price $3,695,000
Year Built1961
Units10
Building SF 8,583
$ / SF $430.50
$ / Unit $369,500
Cap Rate 4.11%
Sale Date3/15/2019
GRM15.73
7631 NORTON AVE | West Hollywood, CA 900461
Price $3,185,000
Year Built1960
Units10
Building SF 8,190
$ / SF $388.89
$ / Unit $318,500
Cap Rate 3.22%
Sale Date4/9/2019
GRMN/A
1036 GENESEE AVE | West Hollywood, CA 900464
Price $3,350,000
Year Built1955
Units10
Building SF 9,718
$ / SF $344.72
$ / Unit $335,000
Cap Rate 3.07%
Sale Date3/29/2019
GRM19.29
1279 HARPER AVE | West Hollywood, CA 900462
Price $2,409,750
Year Built1920
Units5
Building SF 2,800
$ / SF $860.63
$ / Unit $481,950
Cap Rate 4%
Sale Date3/1/2019
GRM16.41
7605 LEXINGTON AVE | West Hollywood, CA 900465
Price $3,245,000
Year Built1957
Units9
Building SF 7,972
$ / SF $407.05
$ / Unit $360,556
Cap Rate N/A
Sale Date3/29/2019
GRM19.55
8208 NORTON AVE | West Hollywood, CA 900463
Price $2,050,000
Year Built1955
Units7
Building SF 6,356
$ / SF $322.53
$ / Unit $292,857
Cap Rate 2.91%
Sale Date2/6/2019
GRM18.09
7621 HAMPTON AVE | Los Angeles, CA 900466
Building SF 8,190
$/SF$388.89
$/Unit$318,500
Cap Rate3.22%
Sale Date4/9/2019
GRMN/A
Building SF 2,800
$/SF$860.63
$/Unit $481,950
Cap Rate4%
Sale Date3/1/2019
GRM16.41
Building SF 6,356
$/SF$322.53
$/Unit $292,857
Cap Rate2.91%
Sale Date2/6/2019
GRM18.09
Market Comparab les | 1224 N. Fa ir fax Ave | West Ho l lywood , CA 23Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and/or its licensor(s). 2019. All rights reserved.
1
1279 Harper Ave
8208 Norton Ave
7621 Hampton Ave
7605 Lexington Ave
7631 Norton Ave
1036 Genesee Ave
2
3
6
5
4
SOLD COMPARABLES CHARTS
24
SubjectProperty
7631Norton
Ave
1279Harper
Ave
8208Norton
Ave
1036Genesee
Ave
7605Lexingto
n Ave
7621Hampto
n AvePPU $386,875 $369,500 $335,000 $360,556 $318,500 $481,950 $292,857
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
Price Per Unit
AVERAGE: $359,727
SubjectProperty
7631Norton
Ave
1279Harper
Ave
8208Norton
Ave
1036Genesee
Ave
7605Lexingto
n Ave
7621Hampto
n AvePPSF $484.50 $430.50 $344.72 $407.05 $388.89 $860.63 $322.53
$0.00$100.00$200.00$300.00$400.00$500.00$600.00$700.00$800.00$900.00
$1,000.00
Price Per SF
AVERAGE: $459.05
SubjectProperty
7631Norton
Ave
1279Harper
Ave
1036Genesee
Ave
7605Lexington
Ave
7621Hampton
AveCap Rate 4.55% 4.11% 3.07% 3.22% 4% 2.91%
0.00%0.50%1.00%1.50%2.00%2.50%3.00%3.50%4.00%4.50%5.00%
CAP RATE
AVERAGE: 3.46%
SubjectProperty
7631Norton
Ave
1279Harper Ave
1036Genesee
Ave
7605Lexington
Ave
7621Hampton
AveGRM 14.63 15.73 19.29 19.55 16.41 18.09
0.00
5.00
10.00
15.00
20.00
25.00
GRM
AVERAGE: 17.81
RENT COMPARABLES CHARTS
Market Comparab les | 1224 N. Fa ir fax Ave | West Ho l lywood , CA 25Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and/or its licensor(s). 2019. All rights reserved.
Subject Property 1477 HavenhurstDr. 1316 N. Laurel Ave 8270 Norton Ave
Rent $2,068 $2,375 $2,300 $2,690
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
1-Bed/1-BathAVERAGE: $2,455
Subject Property 7976 WilloughbyAve 7917 Norton Ave 7522 Fountain Ave
Rent $3,150 $3,250 $3,500 $3,395
$2,900
$3,000
$3,100
$3,200
$3,300
$3,400
$3,500
$3,600
2-Bed/1-Bath
AVERAGE: $3,382
26 Area Overview
SA
NTA
MO
NIC
A B
LV
D.
N FAIRFAX AVE
FOUNTA
IN A
VE
Area Overv iew | 1224 N. Fa ir fax Ave | West Ho l lywood , CA 27
It’s the Sunset Strip, Santa Monica Boulevard, the Roxy Theater, and the Comedy Club. Everything you love about living in LA is in West Hollywood. It’s the most pedestrian-friendly city in California, and the nightlife is unrivaled even for LA. West Hollywood’s neighborhoods are equally famous -- West Hollywood West and the Norma Triangle are located here.
The Pacific Design Center is a West Hollywood landmark -- a giant 1.6-million square foot design community with 100 showrooms displaying everything from furniture to contemporary art. The PDC also contains the SiverScreen Theater and the Red Seven by Wolfgang Puck restaurant. It is located on Melrose Avenue, which is lined with boutiques, restaurants, and antique stores. West Hollywood is home to several legendary music venues, including Whisky a Go Go, the Roxy Theatre, and the House of Blues.
Area Overview
within a 1 mile radius is expectedto reach 2.43% by 2024
HOUSEHOLD GROWTH POPULATION GROWTHmore than 80% of units within
a 1 mile radius of property
RENTER OCCUPIEDwithin a 1 mile radius is expected
to reach 2.73% by 2024
Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and/or its licensor(s). 2019. All rights reserved.
28
AREA DEMOGRAPHICS
AREA EMPLOYMENTWest Hollywood is home to a variety of industries, including perhaps most notably Arts/Design/Entertainment/
Sports/Media businesses. Los Angeles County Metropolitan Transportation Authority for example, employs approximately 702 people in the area. Other prominent employers in the area also include House of Blues, Andaz West Hollywood Hotel, Target, and City of West Hollywood.
Top Employers # of Employees1 Mile 3 Miles 5 Miles
Arts/Design/Entertainment/Sports/Media 6,682 28,813 56,612Management 5,737 26,770 56,878Office/Administrative Support 4,283 17,814 48,765Sales/Related 3,927 18,688 51,476Business/Financial Operations 2,620 11,518 25,913Food Preparation/Serving Related 2,383 10,577 35,859Personal Care/Service 2,207 9,060 24,896Healthcare Practitioner/Technician 1,354 8,261 20,645Education/Training/Library 1,283 7,379 19,876Legal 1,005 6,311 12,770
Population 1 mile 3 miles 5 miles
Total Population 52,138 284,043 840,769
Male 53.37% 51.34% 50.13%
Female 46.64% 48.66% 49.87%
Race & Ethnicity 1 mile 3 miles 5 miles
White 81.59% 71.79% 55.18%
Black 3.65% 5.32% 7.38%
American Indian / Alaska Native 0.33% 0.35% 0.60%
Asian 6.46% 10.70% 16.54%
Hawaiian / Pacific Islander 0.12% 0.12% 0.11%
Other 3.33% 6.98% 15.38%
Two or More Races 4.53% 4.75% 4.80%
Income 1 miles 3 miles 5 miles
Average Household Income $109,035 $120,697 $106,781
Median Household Income $72,201 $75,181 $62,950
Housing 1 mile 3 miles 5 miles
Median Housing Value $995,827 $1,331,606 $1,121,587
Median Year Structure Built 1961 1960 1959
Owner Occupied 19.36% 25.78% 26.11%
Renter Occupied 80.64% 74.22% 73.89%
Area Overv iew | 1224 N. Fa ir fax Ave | West Ho l lywood , CA 29
Well situated in West Hollywood, the property offers residents an array of transportation options including local metro rapid bus routes. In addition, the property sits mere minutes from the 101 Freeway and along Santa Monica Boulevard.
Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and/or its licensor(s). 2019. All rights reserved.
Colliers International 16830 Ventura Boulevard | Suite J
Encino, CA 91436 | United States colliers.com/greaterlosangeles
This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s). ©2019. All rights reserved.
