O F F E R I N G M E M O R A N D U M

Transcription

1 O F F E R I N G M E M O R A N D U M 6126 ELEANOR ELEANOR AVENUE HOLLYWOOD, CA CA 90038

2 A S S E T O V E R V I E W P R O P E R T Y S U M M A R Y El Capri, a true value-add multi-family investment opportunity features 21 units (18 1 Bd + 1 Bth & 3 Studio + 1 Bth) with approximately 31% upside in rents and boasts 5.21% Pro Forma Cap Rate & Pro Forma GRM. PROPERTY NAME ADDRESS El Capri 6126 Eleanor Avenue This represents a rare opportunity to acquire a property that has already undergone vital, major, and costly infrastructure updates including Soft Story Seismic Retrofit in 2015, New Cool Roof in 2016, New Central Water Heater in 2017, and New Solar Hot Water Heating System in The property also features two completely renovated 1 bedroom units and benefits from improved railings, new courtyard deck upgrades and paint, and partial copper re-piping. A sophisticated investor has the potential to capitalize on the Seller s big ticket investments in the property s infrastructure, by coupling it with high impact/low cost exterior aesthetic updates. Whether an investor seeks to hold and reposition, or hold then develop, the possibility of outstanding future income opportunities await. Located on a double lot with alley access, the property is located in a Transit Oriented Community (TOC) and is designated as a Tier 2 Property. Located just south of Santa Monica Blvd. and just east of Vine St. It has a walk score of 90 (Walker s Paradise) and is located within close proximity to Hollywood studios, major employers, prime points of interest, recreation, restaurants, shopping districts, major thoroughfares and mass transit. CITY STATE ZIP Hollywood, CA PARCEL NUMBER NUMBER OF UNITS 21 UNIT MIX BUILDING SF LOT SF 3 Studio / 1 Bath 18 1 Bed / 1 Bath 12,108 SF 12,976 SF YEAR BUILT 1959 ZONING PARKING METERING LAR3 26 Gated Spaces (10 Covered & + 16 Tandem) Separately Metered for Gas & Electric CONSTRUCTION Wood Frame/Stucco Overlay 2

3 MULTIFAMILY DEVELOPMENTS 6671 W. Sunset 1311 Cahuenga 6200 W. Hollywood 6671 W. Sunset 1546 N. Argyle 6126 ELEANOR 3

4 S 3 MULTIFAMILY DEVELOPMENTS ADDRESS NAME UNITS DEVELOPER STATUS W. Sunset Blvd. Crossroads Hollywood 950 Harridge Development Group Proposed W. Sunset Blvd. Palladium Residences 731 Crescent Heights Proposed W. Santa Monica Blvd. Westgate Santa Monica 700 CIM Group Proposed W. Santa Monica Blvd. AVA Hollywood 695 AvalonBay Communities Under Construction W. Hollywood Blvd. Eastown 507 Clarett West Under Construction N. Vine St. Millennium Hollywood 492 Millennium Partners Under Construction W. Hollywood Blvd. Horizon Hollywood 410 LeFrak, Kennedy Wilson Proposed N. Cahuenga Blvd. N/A 369 Cal-Coast Development Proposed W. Hollywood Blvd. Alta Wood Partners Under Construction N. Argyle Ave. Modera ARgyle 276 Mill Creek Residential Proposed S 6216 Eleanor Avenue El Capri 21 N/A N/A 4

5 TRADE AREA OVERVIEW H O L L Y W O O D, CA Located in a premier pedestrian location the asset benefits from easy access to employers, major studios, financial firms, entertainment and historic attractions. Hollywood has seen a tremendous revitalization over the last decade. An influx of capital dedicated to the revitalization of Hollywood has attracted a new resident base of young urban dwellers. This new, hip client base has brought new restaurants, night clubs, and retail opportunities, making Hollywood one of the more desirable submarkets in the greater Los Angeles area. G E N T R I F I C A T I O N In the past decade, Hollywood has experienced significant gentrification and development, specifically along Hollywood Boulevard. Most notable is the Hollywood and Highland Center, which includes 75 retailers, several historic theatres along with night clubs, restaurants, movie theatre, and bowling lanes. M U L T I F A M I L Y M A R K E T Nearly 84.2 percent of all Hollywood residents are currently renters. A significant portion of the population still falls into key renter age groups. Younger age cohorts are expected to post solid growth over the next several years, which bodes well for apartment owners. Additionally, residents enjoy easy access to the 101 Freeway as well as a stop on the Metro Red Line. Beyond the city limits, residents can quickly travel South to Orange County and San Diego and North to Ventura and Santa Barbara. 5

6 TRADE AREA OVERVIEW L O C A T I O N A M E N I T I E S Things to do in Hollywood include must-see shows and attractions, celebrity frequented restaurants, and world class hotels. Experience Tinseltown glamour at TCL Chinese Theatre or the Hollywood Walk of Fame, which has honored celebrities for over 50 years. The state-of-the-art Dolby Theatre is home to the Academy Awards. Universal Studios Hollywood is a world famous theme park that includes the mind-blowing Transformers: The Ride 3-D. Other things to do in Hollywood include the shops and restaurants at Hollywood & Highland Center, or the delicious multicultural cuisines of nearby Thai Town and Little Armenia. E N T E R T A I N M E N T C A P I T A L Search for the best Hollywood hotels and start discovering the entertainment capital of the world. Hollywood & Highland is the entertainment center of Los Angeles for tourists and locals alike. Steps away from landmarks like the world famous Walk of Fame and TCL Chinese Theatre, formerly Grauman s, Hollywood & Highland is the perfect place for a Hollywood beginning. D I S T I N G U I S H E D R E T A I L E R S With world-class shopping and dining, red carpet movie premieres and celebrated live theatre it s the ultimate entertainment destination Steeped in Hollywood history, this iconic destination also features the Dolby Theatre, home of the Academy Awards and over 70 brand-name retailers from Louis Vuitton, L Occitane, Victoria s Secret and MAC to quintessential California stores like GAP, Hot Topic, Oakley, Skechers and Lucky Brand Jeans. Visitors can enjoy 25 fullservice and fast-casual restaurants such as The Grill on Hollywood, Hard Rock Cafe, Dave & Busters, Trastevere Ristorante, California Pizza Kitchen, Cabo Wabo Cantina, and nightlife at Lucky Strike Lanes and OHM Nightclub. o Pantages Theatre o TCL Chinese Theatre o Hollywood & Highland o Dolby Theatre o El Capitan Theatre ENTERTAINMENT CAPITAL OF THE WORLD o Hollywood Bowl o Hollywood Walk of Fame o Cinerama Dome o Hollywood Paladium THRIVING CREATIVE EMPLOYERS REGIONAL TRANSPORTATION HUB o Two main subway stations: Hollywood and Vine and Hollywood and Highland, each with over 1 million riders annually o Located within 45 minutes to Los Angeles International, Hollywood Burbank, Van Nuys, and Santa Monica Airports o Only 15 minutes to Downtown LA, Staples Center, Los Angeles Convention Center, and Universal Studios via the Metro Rail 6

7 LOCAL DEVELOPMENT 1 C O L U M B I A S Q U A R E Columbia Square, a mixed-use project located down the block from 6266 West Sunset Boulevard was recently completed and includes a 22-story residential tower, 200 apartment units, 100 extended-stay hotel units, 93,000 SF of office space, and 30,000 SF of retail and restaurant space. Current office tenants include Viacom and Neuehouse, a coworking space. The residential tower is called the The Proper and features luxury furnished and unfurnished residences that were designed by Kelly Wearstler. 5 2 D R E A M H O T E L Dream Hotels is working on its first West Coast outpost on Selma right now. The 10-story hotel will hold 179 guest rooms, a double-height lobby, a rooftop with a pool, two onsite pools, and a landscaped "public alley" outside. The hotel s design comes from heavyweights Rockwell Group, which also designed the private coworking club Neuehouse in Hollywood s Columbia Square project I C O N Located on a four acre site at the northeast corner of Sunset Bronson Studios lot, ICON will be a 14-story, Class A office tower adjacent to a new five-story creative and production office building called Cue and a 1,600-space parking structure. Located in the heart of Hollywood and West Hollywood-Burbank media corridor just one block west of the 101 Freeway and minutes from the Hollywood/Vine LA Metro Red Line station, the vertical campus features innovative design by Gensler Architects and state-ofthe- art building systems expected to achieve LEED gold certification. In addition to unique access to a full-service production facility and studio lot, potential tenants will appreciate the 24,000- square-foot floor plates, 45-squarefoot column free spans, 14- foot ceilings, floor-to-ceiling windows with panoramic views and terraced balconies on multiple floors ELEANOR S 7

8 LOCAL DEVELOPMENT 4 E A R L C A R R O L T H E A T E R Designed by Harley Ellis Devereaux, the seven-story structure will hold 200 units (a mix of studios and one- and twobedroom apartments), and have approximately 4,700 square feet of commercial space on the ground level along Sunset. The theater houses a Nickelodeon TV production studio and Essex is planning on restoring the facade. 5 5 THE MILLENIUM The Millennium Hollywood project would flank the Capitol Records Building with a 35- and a 39-story building holding a combination of hotel rooms, residences, and retail space, and surrounded by public open space THOMPSON HOLLYWOOD HOTEL The Millennium Hollywood project would flank the Capitol Records Building with a 35- and a 39-story building holding a combination of hotel rooms, residences, and retail space, and surrounded by public open space ELEANOR S $4.8 BILLION $2.2 BILLION $1 BILLION INVESTED SINCE 2000 COMPLETED PROJECTS UNDER CONSTRUCTION 8

9 90 Walk Score 71 Transit Score 78 Bike Score $72,261 HH Income 21% Owner-Occupied Housing 1 MI RADIUS HOLLYWOOD FOREVER 1,700 EMPLOYEES 1.5M SF SPACE IN L.A ELEANOR 9 9

10 PEDESTRIAN & TRANSIT LOCATION M E T R O RED L I N E The Metro Red Line connects Downtown Los Angeles and North Hollywood via the districts of Hollywood and Mid-Wilshire. In North Hollywood it connects with the Orange Line (bus rapid transit) service for stations to the Warner Center in Woodland Hills and Chatsworth. It also connects to the Metro Purple Line, which reaches Koreatown and Midcity. At Union Station in downtown, passengers can reach West Los Angeles, Pasadena, San Fernando Valley, South Bay, and Long Beach WALK SCORE TRANSIT SCORE BIKE SCORE Central Hollywood is the 3rd most walkable neighborhood in Los Angeles with 16,763 residents Central Hollywood has good public transportation and is very bikeable. Nearby neighborhoods: Hollywood Studio District, Greater Wilshire, Hollywood United, Hollywood Hills West, Mid-City West, East Hollywood and Wilshire Center - Koreatown. Daily errands do not require a car in Central Hollywood Los Angeles. 10

11 LANDMARKS 6126 ELEANOR 11

12 SUNSET & VINE IMPROVEMENT DISTRICT The Sunset & Vine Business Improvement District (BID) is a five-year, property-based BID that spans 15 blocks along the worldrenowned Sunset Boulevard, from roughly Schrader Boulevard on the west to the 101 Freeway on the east. Reestablished in 2006, the SVBID is composed of approximately 150 property owners and 276 parcels. Sunset Boulevard, the focal point of the SVBID, has been central to the entertainment industry for nearly a century. It has inspired numerous songs, television shows and movies; and at one time or another has played host to nearly every radio station in Los Angeles. Today, Sunset Boulevard, along with the entirety of the SVBID, is reclaiming its status as the epicenter of the entertainment industry. The SVBID is undergoing an exciting transformation into a vibrant district, complete with movie and television studios, postproduction companies, production-related services, art-based schools, cinemas, cafes and sophisticated apartments. New developments, combined with the rehabilitation of old buildings, is helping to create a stylish, yet casual neighborhood, where the streets buzz round the clock with entertainment seekers, students, residents and business professionals. New developments, combined with the rehabilitation of old buildings, is helping to create a stylish, yet casual neighborhood, where the streets buzz round the clock with entertainment seekers, students, residents and business professionals. 12

13 THE ASSET 13

14 THE ASSET 14

15 PARCEL MAP 15

16 THE ASSET Units 21 Year Built 1959 Gross SF 12,108 Lot SF 12,976 APN FINANCING Dow n $1,837,500 Loan $3,412,500 FINANCIAL SUMMARY Ammort Years 30 Interest Rate 4.25% Payments ($16,787) I NCOME Current Pro Forma Monthly Scheduled Rent $23,483 $34,200 Annualized Income $281,802 $412,200 Less Vacancy ($8,454) ($12,366) Scheduled Gross I ncome $273,348 $399,834 PRICING Price $5,295,000 Price/Unit $252,143 Price/SF $ METRI CS Current Pro Forma Avg. Rent/Unit/Mo. $1,111 $1,629 Avg. Rent/SF/Mo. $1.93 $2.84 GRM Cap 2.96% 5.21% FINANCING Down $1,853,250 Loan $3,441,750 Ammort Years 30 Interest Rate 4.25% Payments ($16,931) EXPENSES Current Pro Forma EXPENSES Total $115,994 Current Pro $123,583 Forma Total Per Unit $116,530 $5,524 $124,120 $5,885 Per Unit SF $5,549 $9.58 $5,910 $10.21 Per % SGI SF 42.43% $ % $10.25 % SGI 42.63% 31.04% RETURN Current Pro Forma Net Operating Income $157,354 $276,251 RETURN Less Debt ($201,449) Current Pro ($201,449) Forma Net Principal Operating Reduction Income $156,817 $57,530 $275,714 $57,530 Less Cashflow Debt ($203,176) $13,434 ($203,176) $132,331 Principal Cash on Cash Reduction $57, % $57, % Cashflow $11,171 $130,068 Cash on Cash 0.60% 7.02% Actual 2016 & 2017 P&L reports will reflect extensive capital expense outlay as a result of infrastructure updates. Current expenses throughout OM reflect new owner s projected expenses. 16

17 RENT ROLL UNIT # TYPE ESTIMATED SF CURRENT RENT RENT/SF MARKET RENT RENT/SF Occupied Comments 1 Studio / 1 Bth 435 $ $1.87 $1,350 $3.10 Yes 2 1 Bd / 1 Bth 600 $1, $1.67 $1,675 $2.79 Yes 3 1 Bd / 1 Bth 600 $1, $1.67 $1,675 $2.79 Yes 4 1 Bd / 1 Bth 600 $1, $1.67 $1,675 $2.79 Yes 5 1 Bd / 1 Bth 600 $1, $1.74 $1,675 $2.79 Yes 6 1 Bd / 1 Bth 600 $ $1.58 $1,675 $2.79 Yes 7 1 Bd / 1 Bth 600 $1, $1.71 $1,675 $2.79 Yes 8 1 Bd / 1 Bth 600 $1, $1.67 $1,675 $2.79 Yes 9 1 Bd / 1 Bth 600 $1, $1.67 $1,675 $2.79 Yes 10 1 Bd / 1 Bth 600 $1, $1.71 $1,675 $2.79 Yes 11 1 Bd / 1 Bth 600 $1, $1.79 $1,675 $2.79 Yes 12 Studio / 1 Bth 435 $1, $2.49 $1,350 $3.10 Yes 13 1 Bd / 1 Bth 600 $1, $2.66 $1,675 $2.79 Yes Renovated 14 1 Bd / 1 Bth 600 $1, $1.67 $1,675 $2.79 Yes 15 1 Bd / 1 Bth 600 $ $1.62 $1,675 $2.79 Yes 16 1 Bd / 1 Bth 600 $1, $2.02 $1,675 $2.79 Yes 17 Studio / 1 Bth 435 $ $1.98 $1,350 $3.10 Yes 18 1 Bd / 1 Bth 600 $1, $1.69 $1,675 $2.79 Yes 19 1 Bd / 1 Bth 600 $1, $2.79 $1,675 $2.79 Yes Resident Manager 20 1 Bd / 1 Bth 600 $1, $2.16 $1,675 $2.79 Yes 21 1 Bd / 1 Bth 600 $1, $2.79 $1,675 $2.79 No Renovated & Vacant 12,105 $23, $34,

18 INCOME ANALYSIS MONTHLY RENT SCHEDULE # of Units Type Estimated SF Av g.current Rent/SF Current Total Market Rent/SF Market Total 3 Studio / 1 Bth 435 $919 $2.11 $2,757 $1,350 $3.10 $4, Bd / 1 Bth 600 $1,143 $1.91 $20,576 $1,675 $2.79 $30, $23,333 $34,200 Other I ncome (Laundry, Misc.) $150 $150 ANNUALI ZED I NCOME CURRENT MARKET Gross Potential Rent $281,802 $412,200 Less Vacancy 3% ($8,454) 3% ($12,366) Scheduled Gross I ncome $273,348 $399,834 ACTUAL vs. MARKET RENT UNIT MIX $1,800 $1,675 $1,600 $1,400 $1,350 Studio / 1 Bth $1,200 $1,143 $1,000 $919 $800 $600 $400 $200 1 Bd / 1 Bth $0 Studio / 1 Bth 1 Bd / 1 Bth 18

19 ANNUALIZED EXPENSES & RETURN ANNUALIZED EXPENSES CURRENT MARKET Real Estate Taxes % $63,108 $63,108 Direct Assessments $903 $903 I nsurance $4,843 $4,843 City Business License & Fees $1,890 $1,890 Utilities $16,380 $16,380 Trash $2,875 $2,875 Pest Control $480 $480 Legal & Audit $500 $500 Onsite Management $6,000 $6,000 Off-Site Management 3% of SGI $8,200 $11,995 Repairs & Maint. 3% of SGI $8,200 $11,995 Reserv es $150 /Unit /Year $3,150 $3,150 Total Expenses $116,530 $124,120 Expenses/Unit $5,549 $5,910 Expenses/SF $9.62 $10.25 % of SGI 42.63% 31.04% RETURN CURRENT MARKET NOI $156,817 $275,714 Less Debt ($203,176) ($203,176) Principal Reduction $57,530 $57,530 Cashflow $11,171 $130,068 Cash on Cash 0.60% 7.02% Actual 2016 & 2017 P&L reports will reflect extensive capital expense outlay as a result of infrastructure updates. Current expenses throughout OM reflect new owner s projected expenses. 19

20 SALES COMPARABLES ELEANOR S Address Beachwood Av e La Mirada Ave Carlton Way La Mirada Ave La Mirada Ave De Longpre Av e S 6126 Eleanor Ave 20

21 SALES COMPARABLES ADDRESS BUILT GROSS SF UNIT MIX SALE DATE PRICE PRICE/UNIT PRICE/SF CAP GRM Beachwood Ave , Bd / 1Ba 11/30/2017 $2,600,000 $260,000 $ % Los Angeles, CA Bd / 1.5 Ba Total Units La Mirada Ave , Studio 9/14/2017 $5,500,000 $211,538 $ % Los Angeles, CA Bd / 1 Ba Total Units Bd / 1 Ba 2-2 Bd / 2 Ba Carlton Way , Bd / 1 Ba 8/17/2017 $2,525,000 $252,500 $ % Los Angeles, CA Bd / 1 Ba Total Units La Mirada Ave , /7/2017 $2,900,000 $322,222 $ % Los Angeles, CA Total Units La Mirada Ave , Bd / 1 Ba 6/30/2017 $4,782,000 $298,875 $ % Los Angeles, CA Bd / 2 Ba Total Units De Longpre Ave , Bd / 1 Ba 3/1/2017 $16,450,000 $253,077 $ % Los Angeles, CA Bd / 1 Ba Total Units Bd / 2 Ba AVERAGES ,793 $5,792,833 $266,369 $ % S El Capri , Studio / 1 Bth $5,295,000 $252,143 $ % Eleanor Ave 18-1 Bd / 1 Bth Los Angeles, CA Total Units 21 21

22 SALES COMPARABLES PRICE/UNIT COMPARISON PRICE/SF COMPARISON $350,000 $300,000 $250,000 $200,000 $150,000 $260,000 $211,538 $252,500 $322,222 $298,875 $253,077 $252,143 $500 $450 $400 $350 $300 $250 $200 $361 $302 $372 $429 $369 $337 $437 $100,000 $50,000 $150 $100 $50 $ S $ S GRM COMPARISON CAP RATE COMPARISON % 4.50% 4.00% 3.50% 3.00% 2.50% 3.97% 4.09% 3.93% 4.32% 3.42% 3.16% 2.96% % % % % S 0.00% S 22

23 RENT COMPARABLES S ELEANOR Singles N. Hudson Ave Tamarind Av e Sierra Vista Carlton Way S El Capri One Bedroom Cole Ave Wilcox Ave N. Hudson Ave N. Las Palmas Ave S El Capri 23

24 RENT COMPARABLES SINGLE FLOORPLAN ONE BED FLOORPLAN ADDRESS BUILT GROSS SF UNITS TYPE RENT ADDRESS BUILT GROSS SF UNITS TYPE RENT N. Hudson Ave , Studio/ 1 Ba $1, Cole Ave , Bd / 1 Ba $1,695 Los Angeles, CA Los Angeles, CA Tamarind Ave , Studio/ 1 Ba $1, Wilcox Ave , Bd / 1 Ba $1,695 Los Angeles, CA Los Angeles, CA Sierra Vista , Studio/ 1 Ba $1, N. Hudson Ave , Bd / 1 Ba $1,750 Los Angeles, CA Los Angeles, CA Carlton Way , Studio/ 1 Ba $1, N. Las Palmas Ave , Bd / 1 Ba $1,775 Los Angeles, CA Los Angeles, CA AVERAGES ,115 $1, ,596 $1,729 S El Capri , Studio / 1 Bth $919 S El Capri , Bd / 1 Bth $1, Eleanor Ave 6126 Eleanor Ave Los Angeles, CA Los Angeles, CA

25 CONFIDENTIALITY & DISCLAIMER All materials and information received or derived from KW Commercial its directors, officers, agents, advisors, affiliates and/or any third party sources are provided without representation or warranty as to completeness, veracity, or accuracy, condition of the property, compliance or lack of compliance with applicable governmental requirements, developability or suitability, financial performance of the property, projected financial performance of the property for any party s intended use or any and all other matters. Neither KW Commercial its directors, officers, agents, advisors, or affiliates makes any representation or warranty, express or implied, as to accuracy or completeness of the materials or information provided, derived, or received. Materials and information from any source, whether written or verbal, that may be furnished for review are not a substitute for a party s active conduct of its own due diligence to determine these and other matters of significance to such party. KW Commercial will not investigate or verify any such matters or conduct due diligence for a party unless otherwise agreed in writing. EACH PARTY SHALL CONDUCT ITS OWN INDEPENDENT INVESTIGATION AND DUE DILIGENCE. Any party contemplating or under contract or in escrow for a transaction is urged to verify all information and to conduct their own inspections and investigations including through appropriate third party independent professionals selected by such party. All financial data should be verified by the party including by obtaining and reading applicable documents and reports and consulting appropriate independent professionals. KW Commercial makes no warranties and/or representations regarding the veracity, completeness, or relevance of any financial data or assumptions. KW Commercial does not serve as a financial advisor to any party regarding any proposed transaction. All data and assumptions regarding financial performance, including that used for financial modeling purposes, may differ from actual data or performance. Any estimates of market rents and/or projected rents that may be provided to a party do not necessarily mean that rents can be established at or increased to that level. Parties must evaluate any applicable contractual and governmental limitations as well as market conditions,vacancy factors and other issues in order to determine rents from or for the property. Legal questions should be discussed by the party with an attorney. Tax questions should be discussed by the party with a certified public accountant or tax attorney. Title questions should be discussed by the party with a title officer or attorney. Questions regarding the condition of the property and whether the property complies with applicable governmental requirements should be discussed by the party with appropriate engineers, architects, contractors, other consultants and governmental agencies. All properties and services are marketed by KW Commerical - Santa Monica in compliance with all applicable fair housing and equal opportunity laws. EXCLUSIVE LISITNG BROKERS: LARRY CANNIZZARO Multi-Family Specialist BRE Broker No Direct: larrycann@kw.com KRISTY ELAINE Multi-Family Specialist BRE Broker No Direct: kristyelaine@kw.com EL CAPRI 25