Y0120606 MOJ LID - LoopNet · 2 2 Bdr 2 Bath N/A 10 2 Bdr 1 Bath N/A 6 1 Bdr 1 Bath N/A 18 Total...

NORTH HOLLYWOOD, CA

Valerio Villas

OFFERING MEMORANDUM

CONFIDENTIALITY AND DISCLAIMER

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

NORTH HOLLYWOOD, CA

Valerio Villas

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOURMARCUS & MILLICHAP AGENT FOR MORE DETAILS.

NON-ENDORSEMENT NOTICE

Section 1 PRICING AND FINANCIAL ANALYSIS

Section 2 PROPERTY DESCRIPTION

Section 3 RECENT SALES

Section 4 RENT COMPARABLES

Section 5 DEMOGRAPHIC ANALYSIS

TABLE OF CONTENTS

Valerio Villas

Valerio VillasNORTH HOLLYWOOD, CA

PRICING AND FINANCIAL ANALYSIS

Price $4,000,000

Down Payment 50% / $2,000,000

Price/Unit $222,222

Price/SF $353.48

Number of Units 18

Gross Square Feet 11,316

Number of Buildings 2

Number of Stories 2

Year Built 1990

Lot Size 26,270 SF

Vital Data

CAP Rate - Current 4.07%

GIM - Current 15.34

Net Operating Income - Current $162,931

Net Cash Flow After Debt Service - Current 2.4% / $48,351

Total Return - Current 4.2% / $83,572

CAP Rate - Pro Forma 6.10%

GIM - Pro Forma 11.61

Net Operating Income - Pro Forma $244,108

Net Cash Flow After Debt Service - Pro Forma 6.5% / $129,528

Total Return - Pro Forma 8.2% / $164,749

Unit Mix

No. of

Units

Unit

Type

Approx.

Square Feet

2 2 Bdr 2 Bath N/A

10 2 Bdr 1 Bath N/A

6 1 Bdr 1 Bath N/A

18 Total 11,316

Major Employers

Company Local

Employees

Victory Studio 5,000

Warner Bros Television 5,000

Kaiser Permanente 3,875

Walt Disney Company 3,083

Fire Dept-Station 98 3,000

Mann Theaters 2,000

Universal City Studios Prod 2,000

V P H 1,600

Clh Group The 1,560

Warner Bros 1,515

Los Angeles Unified School Dst 1,317

City of Los Angeles 1,028

Demographics

1



1-Mile 3-Miles 5-Miles

2014 Total

Population

40,851 270,271 720,458

2019 Total

Population

41,108 273,584 731,886

2014 Total

Households

11,036 85,825 244,603

2019 Total

Households

11,181 87,499 249,422

Median HH Income $37,455 $43,288 $48,617

Per Capita Income

(based on Total

Population)

$14,659 $20,033 $24,956

Average (Mean) HH

Income

$53,183 $62,559 $73,098

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Y0120606 Marcus &Millichap. All rights reserved.

OFFERING SUMMARY

Existing Financing

Loan Type Free and Clear

Proposed Financing

First Trust Deed

Loan Amount $2,000,000

Loan Type Proposed New

Interest Rate 4.0%

Amortization 30 Years

Debt Coverage Ratio 1.42

2




FINANCING

2B2B: 11%

1B1B: 33%

2B1B: 56%

No. of

Units

Unit

Type

Approx.

Square Feet

Current

Rents

Monthly

IncomePro Forma Rents

Monthly

Income

2 2 Bdr 2 Bath N/A $1,500 $3,000 $1,700 $3,400

10 2 Bdr 1 Bath N/A $1,295 $12,950 $1,600 $16,000

6 1 Bdr 1 Bath N/A $896 $5,376 $1,350 $8,100

18 TOTAL 11,316 $21,326 $27,500

Unit Mix Unit Rent & Rent/SF

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2B2B 2B1B 1B1B

3




UNIT MIX

Unit Number Unit

Type

Current

Rent

Asking

Rent

1 2 Bdr 2 Bath Vacant $1,700 $1,700

2 2 Bdr 2 Bath Manager $1,700 $1,700

3 2 Bdr 1 Bath $1,300 $1,600

4 2 Bdr 1 Bath $1,400 $1,600

5 2 Bdr 1 Bath $1,250 $1,600

6 2 Bdr 1 Bath $1,300 $1,600

7 2 Bdr 1 Bath $1,250 $1,600

8 2 Bdr 1 Bath $1,300 $1,600

9 2 Bdr 1 Bath $1,300 $1,600

10 2 Bdr 1 Bath $1,350 $1,600

11 2 Bdr 1 Bath $1,300 $1,600

12 2 Bdr 1 Bath $1,200 $1,600

13 1 Bdr 1 Bath $950 $1,350

14 1 Bdr 1 Bath $776 $1,350

15 1 Bdr 1 Bath $900 $1,350

16 1 Bdr 1 Bath $950 $1,350

17 1 Bdr 1 Bath $950 $1,350

18 1 Bdr 1 Bath $850 $1,350

1 TOTAL VACANT $1,700 $1,700

17 TOTAL OCCUPIED $20,026 $25,800

18 TOTAL $21,726 $27,500

4




RENT ROLL

Income Current Per Unit Pro Forma Per Unit

GROSS POTENTIAL RENT $255,912 $14,217 $330,000 $18,333

Other Income

Laundry Income $4,800 $267 $4,800 $267

Storage $9,600 $533

Total Other Income $4,800 $267 $14,400 $800

GROSS POTENTIAL INCOME $260,712 $14,484 $344,400 $19,133

Vacancy/Collection Allowance (GPI) 3.0% / $7,821 $435 3.0% / $10,332 $574

EFFECTIVE GROSS INCOME $252,891 $14,049 $334,068 $18,559

Expenses

Real Estate Taxes (1.2000%) $48,000 $2,667 $48,000 $2,667

Insurance $5,800 $322 $5,800 $322

Utilities $17,260 $959 $17,260 $959

Repairs & Maintenance $7,500 $417 $7,500 $417

Rubbish $3,000 $167 $3,000 $167

Landscaping $1,200 $67 $1,200 $67

On-Site Manager $7,200 $400 $7,200 $400

TOTAL EXPENSES $89,960 $4,998 $89,960 $4,998

Expenses per SF $7.95 $7.95

% of EGI 35.6% 26.9%

NET OPERATING INCOME $162,931 $9,052 $244,108 $13,562

Total Number of Units: 18

Total Area (Gross): 11,316 SF

5




INCOME & EXPENSES

No. of

Units

Unit

Type

Approx.

Square Feet

Current

Rents

Rent/

SF

Monthly

Income

Pro Forma

Rents

Monthly

Income

2 2 Bdr 2 Bath N/A $1,500 N/A $3,000 $1,700 $3,400

10 2 Bdr 1 Bath N/A $1,295 N/A $12,950 $1,600 $16,000

6 1 Bdr 1 Bath N/A $896 N/A $5,376 $1,350 $8,100

18 Total/Wtd. Avg. 11,316 $21,326 $27,500

FIRST TRUST DEED

Loan Amount $2,000,000

Loan Type Proposed New

Interest Rate 4.0%

Amortization 30 Years

Annualized Operating Data

Income Current Pro Forma

Gross Potential Rent $255,912 $330,000

Other Income $4,800 $14,400

Gross Potential Income $260,712 $344,400

Less: Vacancy/Deductions (GPI) 3.0% / $7,821 3.0% / $10,332

Effective Gross Income $252,891 $334,068

Less: Expenses $89,960 $89,960

Net Operating Income $162,931 $244,108

Net Cash Flow Before Debt Service $162,931 $244,108

Debt Service $114,580 $114,580

Debt Coverage Ratio 1.42 2.13

Net Cash Flow After Debt Service 2.4% / $48,351 6.5% / $129,528

Principal Reduction $35,221 $35,221

Total Return 4.2% / $83,572 8.2% / $164,749

11901 Valerio Street

North Hollywood, CA 91605

Price $4,000,000

Down Payment 50% / $2,000,000

Number of Units 18

Price/Unit $222,222


Price/SF $353.48

CAP Rate - Current 4.07%

CAP Rate- Pro Forma 6.10%

GIM - Current 15.34

GIM- Pro Forma 11.61

Year Built 1990

Lot Size 26,270 SF

Type of Ownership Fee Simple

Location

Financing

Expenses

Real Estate Taxes $48,000 $48,000

Insurance $5,800 $5,800

Utilities $17,260 $17,260

Repairs & Maintenance $7,500 $7,500

Rubbish $3,000 $3,000

Landscaping $1,200 $1,200

On-Site Manager $7,200 $7,200

Total Expenses $89,960 $89,960

Expenses/unit $4,998 $4,998

Expenses/SF $7.95 $7.95

% of EGI 35.57% 26.93%

Scheduled Income

Loan information is time sensitive and subject to

change. Contact your local Marcus & Millichap

Capital Corporation representative.

6




FINANCIAL OVERVIEW


PROPERTY DESCRIPTION

Marcus & Millichap is pleased to offer for sale an 18-unit Non-Rent Control asset located in the strong rental submarket of North Hollywood.

The subject property was built in 1990 and is not subject to rent control. Located on Valerio Street just west of the 170 freeway between Laurel Canyon and Lankershim Boulevard, this property contains two separate structures providing tenants with ample secured and gated parking (40) spaces.

Current rents are considerably below market providing the new ownership with an immediate upside in rents. This building is separately metered for gas and electricity and boasts an excellent unit mix of two-bedroom/two-baths, two-bedroom/one-bath, and one-bedroom/one-bath units.

The unit mix is as follows: Two, two-bedroom/two-bath units, Ten two-bedroom/one-bath units and Six one-bedroom/one-bath units and on site laundry facilities.

Please note: Actual rents are significantly below market rents. There is immediate realizable upside in this non-rent controlled investment. Buyer to verify.

Investment Highlights

■ 18-Unit Non-Rent Control Asset in North Hollywood

■ 1990 Construction, Two Separate Structures

■ Corner Property with Large Frontage on Two Streets,Valerio and Radford Avenue

■ Immediate Upside in Rents to a 5.68% Cap and 11.90 perthe Marketing Package

■ Additional Income from 16 Storage Units

■ Excellent Unit Mix of Two Two-Bedroom/Two-Bath Units,Ten Two-Bedroom/One-Bath Units, and Six One-Bedroom/One-Bath Units; 40 Gated Parking Spaces

■ Low Density Project, Situated on Almost ½ Acre of land

■ Strong Rental Market with Average Occupancy of 97 Percent

■ Separately Metered for Gas and Electricity; Laundry on Site

■ No Earthquake Retrofit Correction Required

8




INVESTMENT OVERVIEW

The Offering

Property Valerio Villas

Property Address 11901 Valerio Street


Assessor's Parcel Number 2317-014-028

Zoning RD2

Site Description

Number of Units 18

Number of Buildings 2

Number of Stories 2

Year Built 1990


Lot Size 26,270 SF

Type of Ownership Fee Simple

9




PROPERTY SUMMARY

10




PROPERTY PHOTOS

11




PROPERTY PHOTOS

Local Map Regional Map

12




AREA MAPS

13




AERIAL PHOTO

14




SITE PLAN


RECENT SALES

1)

2)

3)

4)

Valerio Villas

6842 Agnes Avenue

11063 Cumpston Street

7756 Laurel Canyon Boulevard

11040 Hesby Street

18

RECENT SALES



RECENT SALES MAP

No. of Units: 8 Units Unit Type

Year Built: 1993 4 2 Bdr 1.5 Bath

Sale Price: $3,109,000 4 2 Bdr 2.5 Bath

Price/Unit: $388,625

Price/SF: $415.09

CAP Rate: 3.45%

GRM: N/A

6842 Agnes Avenue



Year Built: 2005 1 2 Bdr 1 Bath

Sale Price: $1,725,000 5 3 Bdr 2 Bath


Price/SF: $295.88

CAP Rate: 5.16%

GRM: 13.49

Comments

Source: CoStar

Close of Escrow: 1/4/2017


Valerio Villas






Price/Unit: $222,222 6 1 Bdr 1 Bath

Price/SF: $353.48

CAP Rate: 4.07%

GIM: 15.34

Subject Property

1

211063 Cumpston Street


19

RECENT SALES


Comments

Source: CoStar


RECENT SALES


Comments

Source: CoStar





Price/SF: $308.59

CAP Rate: 3.70%

GRM: N/A



11040 Hesby Street


Comments

Source: CoStar


Year Built: 1986 1 Studio 1 Bath


Price/Unit: $257,895 8 2 Bdr 2 Bath

Price/SF: $336.08

CAP Rate: 2.70%

GRM: N/A


3

4

20

RECENT SALES



RECENT SALES


RENT COMPARABLES

1)

2)

3)

4)

Valerio Villas

Laurel Palm Apartments

Summer Breeze Apartments

Vineland Apartments

Lankershim Apartments

24

RENT COMPARABLES



RENT COMPARABLES MAP

Subject Property

1

No. of Units 18

Occupancy: N/A

Year Built: 1990

Valerio Villas



No. of Units 22

Occupancy: N/A

Year Built: 1989

No. of Units 104

Occupancy: N/A

Year Built: 1980

Laurel Palm Apartments



Summer Breeze Apartments

6736-6756 Clybourne Avenue


Unit Type Units SF Rent Rent/SF

2 Bdr 2 Bath 16 725 $1,778 $2.45

Total/Wtd. Avg. 16 39,969 $1,778 $2.45


2 Bdr 2 Bath 44 934 $1,950 $2.09

1 Bdr 1 Bath 60 650 $1,650 $2.54

Total/Wtd. Avg. 104 79,918 $1,800 $2.31

25

2

RENT COMPARABLES




2 Bdr 2 Bath 2 N/A $1,500 N/A

2 Bdr 1 Bath 10 N/A $1,295 N/A

1 Bdr 1 Bath 6 N/A $896 N/A

Total/Wtd. Avg. 18 11,316 $1,230 $1.88

RENT COMPARABLES

No. of Units 12

Occupancy: N/A

Year Built/Renovated: 1989

Vineland Apartments

7642 Vineland Avenue

Sun Valley, CA 91352

No. of Units 84

Occupancy: N/A

Year Built/Renovated: 1979

Lankershim Apartments

6300 Lankershim Boulevard



1 Bdr 1 Bath 40 750 $1,430 $1.91

2 Bdr 1 Bath 4 1,000 $1,825 $1.83

Total/Wtd. Avg. 44 70,668 $1,627 $1.90


2 Bdr 1 Bath 12 1,000 $1,795 $1.80

Total/Wtd. Avg. 12 8,920 $1,795 $1.80

5

4

26

RENT COMPARABLES


3


RENT COMPARABLES


DEMOGRAPHIC ANALYSIS

1 Mile 3 Miles 5 Miles

2000 Population 40,967 262,003 679,071

2010 Population 39,822 263,259 699,808

2014 Population 40,851 270,271 720,458

2019 Population 41,108 273,584 731,886

2000 Households 10,596 80,978 229,959

2010 Households 10,651 82,602 234,628

2014 Households 11,036 85,825 244,603

2019 Households 11,181 87,499 249,422

2014 Average Household Size 3.60 3.10 2.91

2014 Daytime Population 8,560 77,376 249,940

2000 Owner Occupied Housing Units 36.14% 40.07% 38.42%

2000 Renter Occupied Housing Units 60.89% 56.82% 58.32%

2000 Vacant 2.98% 3.11% 3.27%



2014 Vacant 2.48% 2.31% 2.26%



2019 Vacant 2.49% 2.36% 2.25%

$ 0 - $14,999 14.5% 14.2% 12.9%

$ 15,000 - $24,999 16.7% 14.4% 12.4%

$ 25,000 - $34,999 15.9% 12.6% 11.3%

$ 35,000 - $49,999 16.2% 15.1% 14.6%

$ 50,000 - $74,999 15.2% 17.3% 18.0%

$ 75,000 - $99,999 10.7% 10.5% 11.2%

$100,000 - $124,999 4.8% 6.7% 7.2%

$125,000 - $149,999 2.9% 3.3% 4.0%

$150,000 - $199,999 1.9% 3.1% 3.9%

$200,000 - $249,999 0.5% 1.1% 1.7%

$250,000 + 0.8% 1.7% 2.8%

2014 Median Household Income $37,455 $43,288 $48,617

2014 Per Capita Income $14,659 $20,033 $24,956

2014 Average Household Income $53,183 $62,559 $73,098

Demographic data © 2012 by Experian.

28




DEMOGRAPHIC REPORT

Geography: 5 miles

Population

In 2014, the population in your selected geography is 720,458. The population has changed by 6.09% since 2000. It is estimated

that the population in your area will be 731,885 five years from now, which represents a change of 1.58% from the current year. The

current population is 49.99% male and 50.00% female. The median age of the population in your area is 34.1, compare this to the

Entire US average which is 37.3. The population density in your area is 9,171.48 people per square mile.

Households

There are currently 244,603 households in your selected geography. The number of households has changed by 6.36% since 2000.

It is estimated that the number of households in your area will be 249,421 five years from now, which represents a change of 1.97%

from the current year. The average household size in your area is 2.90 persons.

Income

In 2014, the median household income for your selected geography is $48,617, compare this to the Entire US average which is

currently $51,972. The median household income for your area has changed by 25.02% since 2000. It is estimated that the median

household income in your area will be $57,588 five years from now, which represents a change of 18.45% from the current year.

The current year per capita income in your area is $24,955, compare this to the Entire US average, which is $28,599. The current

year average household income in your area is $73,097, compare this to the Entire US average which is $74,533.

Race & Ethnicity

The current year racial makeup of your selected area is as follows: 56.47% White, 4.00% Black, 0.11% Native American and 8.34%

Asian/Pacific Islander. Compare these to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% Native American and

5.02% Asian/Pacific Islander.

People of Hispanic origin are counted independently of race. People of Hispanic origin make up 54.47% of the current year

population in your selected area. Compare this to the Entire US average of 17.13%.

Housing

In 2000, there were 91,325 owner occupied housing units in your area and there were 138,633 renter occupied housing units in your

area. The median rent at the time was $630.

Employment

In 2014, there are 249,939 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed

that 58.36% of employees are employed in white-collar occupations in this geography, and 41.51% are employed in blue-collar

occupations. In 2014, unemployment in this area is 9.93%. In 2000, the average time traveled to work was 31.8 minutes.


29




SUMMARY REPORT

Number of people living in a given area per square mile.


30




POPULATION DENSITY

The number of people employed in a given area per square mile.


31




EMPLOYMENT DENSITY

Average income of all the people 15 years and older occupying a

single housing unit.


32




AVERAGE HOUSEHOLD INCOME

Two-way, average daily traffic volumes.Traffic Count data © 2012 by TrafficMetrix. All rights reserved.

33




TRAFFIC COUNTS

* Traffic Count Estimate

NORTH HOLLYWOOD, CA

OFFERING MEMORANDUM

Valerio Villas

Offices Throughout the U.S. and Canada

www.MarcusMillichap.com

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