EL TORO PLAZA 21991 EL TORO ROAD, LAKE FOREST, CA · 2018-11-20 · EL TORO PLAZA. 21991 EL TORO...

EL TORO PLAZA21991 EL TORO ROAD, LAKE FOREST, CA

Lee & Associates®-LA North/Ventura, Inc. • Corporate ID # 01191898 • A Member of the Lee & Associates Group of Companies15250 Ventura Boulevard, Suite 100, Sherman Oaks, California 91403

Cory Stehr 818.933.0304 Principal [email protected] License #01851029

Lee & Associates® - LA North/Ventura, Inc.2el toro plaza LAKE FOREST

TABLE OFCONTENTS

INVESTMENT OVERVIEW................................................3

PROPERTY DESCRIPTION...............................................6

AREA OVERVIEW................................................................8

FINANCIAL OVERVIEW..................................................14


INVESTMENT OVERVIEW

Lee & Associates-LA North/Ventura is pleased to offer a vibrant community retail center in Lake Forest, Calif., named one of ‘Orange County’s 10 Best Suburbs’. Located in Southern Orange County close to Irvine, Lake Forest is an affluent city of 77,000 residents.

The city’s suburban profile has long attracted a demographic of professionals. As of September, 2018 it boasted one of the lowest rates of unemployment in California – 2.5 percent – outpacing all of Orange County with an unemployment rate of 2.8 percent as well as California, where unemployment registered 3.9 percent in the same period.

With about 4,000 new homes expected to be constructed in the community in the next few years, Lake Forest is poised to become an even stronger market for retail enterprises.

The property, El Toro Plaza at 21991 El Toro Road, sits at the signalized intersection of El Toro Road and Northcrest Drive with 578 feet of frontage and monument signage on El Toro Road, a main commercial thoroughfare.

Built in 1984, the center consists of 9,998 rentable square feet on a 35,719-square-foot land parcel. There are 40 parking spaces on the property.

The center is currently comprised of service businesses including national credit wireless retailers, a dental office, an insurance company, a spa and a barber shop. It is currently configured with 15 suites, ranging in size from 100 square feet to 2,320 square feet. Three of the 15 suites are currently vacant, accounting for a 2.6 percent vacancy rate. Rental rates vary widely from a high of more than $10 per square foot for one of the smallest suites to $1.90 per square foot for suites ranging from 685 square feet to 695 square feet.


LOCATION HIGHLIGHTS

• Located within the affluent city of Lake Forest with a median household income of $102,213.

• Current population is 84,931. Between 2000 and 2016, the total population of the city of Lake Forest increased by 25,203 to 83,910.

• Over 58 percent of Lake Forest residents employed in managerial, professional and service industries

• Lake Forest has a strong employment base including the three largest employers: Panasonic Avionics, loanDepot and Oakley

• Lake Forest is nearly fully employed with one of the lowest unemployment rates in the country: 2.5 percent

• Proximity to Irvine, the business hub of Orange County, offering myriad additional employment opportunities to residents.

• Subject property is located on one of the prime commercial streets in the city with 578 feet of frontage on El Toro Road

• Lake Forest named one of the ’10 Best Orange County Suburbs’; ranked ‘#4 Orange County Neighborhoods for Families’ and ‘#18 Best Places to Live in Orange County’

• About 4,000 new homes expected to be constructed in the next few years, making Lake Forest one of the few Orange County cities that is still growing


MARKET HIGHLIGHTS

• Orange County’s retail vacancy rate fell 20 basis points to 3.3 percent in Q3 vs. Q2

• Year-to-date retail absorption was 16,271 square feet

• Small format Target (30,000 SF) and Michaels opened in neighboring Mission Viejo in Q3

• Lake Forest added 25,203 residents between 2000 and 2016

• Total number of households grew by 39.5 percent between 200-2106 versus 9.6 percent growth for all of Orange County

• Forty-eight percent of households earn $100,000 or more

• Professional and management jobs increased by 15.5 percent between 2007 – 2015


THE PROPERTY21991 El Toro Road

El Toro Plaza is a retail strip center with 9,998 rentable square feet of shop space on the premier commercial street of Lake Forest. The property is currently leased to 11 tenants. El Toro Plaza also includes a drive through pad currently occupied by a coffee shop. Three shop spaces, including an anchor space of 2,320 square feet, are vacant, constituting 26 percent of the center. These vacancies combined with the leases set to expire within the next two years offer an excellent repositioning opportunity for a buyer. In all, 63 percent of the center can be re-tenanted within the coming two-year period.


rent roll

Suite Tenant Name Type Sq. Ft.Rent/Sq.Ft.

MonthlyRent

Pro-FormaRent

StartLease

EndLease

LeaseType

% of Property

1 Liquor Store (Vacant) Retail 2,320 $2.50 $0.00 $5,800.00 NNN 23.9%

3 Royal Street Communications Retail 1,040 $2.71 $2,813.95 $2,813.95 10/30/2010 11/29/2020 NNN 10.7%

4 Luke Aucoin Retail 570 $2.01 $1,144.85 $1,144.85 12/1/2015 11/30/2019 NNN 5.9%

5 Yajun Li and Ella Sui Retail 685 $1.90 $1,299.60 $1,299.60 2/1/2014 1/31/2019 NNN 7.1%

6 Mozhigan Mokara DDS, Inc. Retail 1,192 $2.33 $2,782.10 $2,782.10 2/1/2016 1/31/2021 NNN 12.3%

7 Pizza Restaurant Retail 1,320 $1.95 $2,574.00 $2,574.00 9/15/2018 1/31/2024 NNN 13.6%

8 Channon Brown & William Wagner Retail 625 $1.90 $1,187.50 $1,187.50 6/23/2017 9/30/2022 NNN 6.4%

9 Mini Le & Ashley Bryand Retail 756 $1.95 $1,474.20 $1,474.20 6/8/2015 5/31/2020 NNN 7.8%

10 Kaffeebonee, LLC Retail 300 $5.00 $1,500.00 $1,500.00 8/1/2017 10/31/2022 NNN 3.1%

2a AB Cellular LA, LLC Retail 225 $9.79 $2,202.80 $2,202.80 11/24/2004 12/31/2020 FSG 2.3%

2b Sprint PCS Retail 400 $6.38 $2,553.65 $2,553.65 7/12/2000 7/11/2020 FSG 4.1%

2d Verizon Wireless Retail 265 $10.52 $2,786.89 $2,786.89 10/1/2009 FSG 2.7%

Totals 9,698 $4.08 $22,319.54 $28,119.54 100.0%


LAKE FOREST Location Overview

Lake Forest, a small suburban city with an educated, affluent population, sits in Southern Orange County bordered by Irvine on the west, Laguna Hills on the southwest, Mission Viejo on the southeast, Trabuco Canyon on the east, and Limestone Canyon Regional Park on the north.

With its well-planned neighborhoods, rolling hills and abundance of trees, Lake Forest affords the ultimate suburban lifestyle, and the city consistently wins accolades, ranking #4 in Movoto’s ‘10 Best Neighborhoods in Orange County for Families’; #10 in First Team’s ’10 Best Orange County Suburbs to Live In’ and #18 in Niche’s ‘Best Places to Live in Orange County’.

The city gets its name from two man-made lakes surrounded by custom homes and condominiums. Its population of 84,931 residents has a median household income of $102,213.

Perhaps best known as the home of Rick Warren’s megachurch, Saddleback Church, the eighth largest church in the country, Lake Forest also has a thriving business center with headquarters for eyewear maker Oakley, Inc., aluminum products maker Kaiser Aluminum Corp., in-flight entertainment provider Panasonic Avionics and aeronautics company Karem Aircraft, among others.

Thanks to its local employers and proximity to Irvine, considered the business hub of Orange County, Lake Forest enjoys near full employment, with an unemployment rate of 2.5 that is below the rate for all of Orange County and California.

A City Opportunities Study completed several years ago created a massive amount of new home construction and developers including Brookfield Homes, Toll Brothers and Shae Homes have either recently completed or are underway with master planned communities within the city. In all, the study


allows for 4,300 new homes to be built over the coming years, and many of those efforts have already been completed.

The city’s commercial district runs along El Toro Road. Although the Subject Property is located on El Toro, it is well north and south of most of the city’s strip centers and shopping malls, making it the only game in town for the numerous homes that surround it.

The retail sector has been strong throughout Orange County, where unemployment is just 2.8 percent. Overall the county registered a retail vacancy rate of 3.3 percent in the third quarter of 2018, falling 20 basis points from the prior quarter. Southern Orange County registered the highest vacancy rate, but still was at a mere 4 percent in Q3. A number of small users did vacate South Orange County in the third quarter leading to negative absorption for the quarter and the year to date. As a result, South Orange County saw 68,235 more square feet vacated than were absorbed in the year-to-date period.

However, Orange County overall saw positive absorption of 196,271 square feet for the year to date, and with no major retail construction starts on the horizon, the market is expected to remain stable for the foreseeable future.

Also not to be overlooked is what some are calling the urbanization of Orange County into a “suburban” region. As more condominiums are built and more millennials opt for more family friendly neighborhoods, cities like Lake Forest are expected to see a population burst that will surely benefit retail.

location overview


aerial


amenities aerial


Change from 2010

Change from 2010

1 MILE 3 MILE 1 MILE 3 MILE

POPULATION 27,076 182,010 5.50% 6.00%

DAYTIME POPULATION 12,948 194,980

MEDIAN AGE 27.9 35.6

AVERAGE HH INCOME $156,185 $143,618 8.80% 9.40%

MEDIAN HH INCOME $92,216 $84,934 13.40% 11.80%

% EARNING $100K+ 47.30% 43.60%

DEMOGRAPHICS


INVESTMENT SUMMARY21991 El Toro Road

Purchase Price: $4,800,000

Year Built/Renovated: 1984/2018

Building Size: 10,036 Square Feet

Lot Size: 38,135 Square Feet

Zoning: C-1 Lake Forest

Current CAP: 4.95%

Proforma CAP Rate: 6.91%


financials

Price: $4,800,000Down Payment: $1,680,000 35%Current Cap Rate: 4.95% Current Cash On Cash 2.53%Pro-Forma Cap Rate: 6.91% Pro-Forma Cash On Cash: 8.10%

Gross Leasable Area (GLA): 10,036PSF (GLA): $478.28Lot Size (Sq. Ft.): 38,135PSF (Land): $126Year Built/Renovated: 1987/2018

SUMMARY

Property Tax (1.05%) $50,400Insurance $4,063Trash Service $2,360Utilities $7,909Repairs $12,545Management $9,600CAM $9,691Reserves $2,509

Total Expenses $99,077Total Expenses PSF (GLA) $9.87

EXPENSES

CURRENT INCOME PRO-FORMA INCOMETotal Rental Income (GLA): $272,508 Total Rental Income (GLA): $354,108Total Expenses Reimbursements: $64,400 65% Total Expenses Reimbursements: $94,123.15 95%Other Income: $0 Other Income: $0Total Gross Operating Income: $336,908 Total Gross Operating Income: $448,231Vacancy: 0 0.00% Vacancy: ($17,705) 5.00%Expenses: ($99,077) 36% Expenses: ($99,077) 28%

Net Operating Income (NOI): $237,831 4.95% Net Operating Income (NOI): $331,449 6.91%First Trust Deed/Mortgage: ($195,305) First Trust Deed/Mortgage: ($195,305)Pre-Tax Cash Flow: $42,526 2.53% Pre-Tax Cash Flow: $136,144 8.10%

OPERATING DATA

First Loan Amt $3,120,000Interest Rate 4.75%Due 2028Yearly Pymnts ($195,305)Amortization 30

PROPOSEDFINANCING

Lee & Associates®-LA North/Ventura, Inc. • Corporate ID # 01191898 • A Member of the Lee & Associates Group of Companies15250 Ventura Boulevard, Suite 100, Sherman Oaks, California 91403

No warranty or representation is made to the accuracy of the foregoing information. Terms of sale or lease and availability are subject to change or withdrawal without notice.

For additional information and to schedule a tour of the property, please contact:

Cory Stehr Principal

818.933.0304

[email protected] License #01851029

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EL TORO PLAZA 21991 EL TORO ROAD, LAKE FOREST, CA · 2018-11-20 · EL TORO PLAZA. 21991 EL TORO...

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