7060 W. SUNSET BOULEVARD

Transcription

1 7060 W. SUNSET BOULEVARD Los Angeles, CA BRANDON MICHAELS GROUP 1

2 INVESTMENT ADVISORS: BRANDON MICHAELS Senior Managing Director Investments Director, National Retail Group Tel: (818) Fax: (818) License: CA # BRANDON MICHAELS GROUP BEN BROWNSTEIN Investment Associate Director, National Retail Group Tel: (818) Fax: (818) License: CA # This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap 2

3 TABLE OF CONTENTS Executive Summary Investment Highlights Financials Sales Comparables Area Overview 3

4 Mama Sh HOLLYWOOD Capitol Records W Hote Hollywood Pantages Theatre Dream Hotel TCL Chinese Theatre Madame Tussauds Hollywood Loews Hotel Dolby Theatre Hollywood & Highland El Capitan Theatre Hollywood Max Museum Ripley s Believe It or Not! Egyptian Theatre CVS LA Fitness DSW Hollywood Roosevelt N HIGHLAND AVENUE We Work Hollywood Buffalo Wild Wings In-N-Out Burger Live Nation Starbucks SUNSET BOULEVARD N LA BREA AVENUE Sycamore Tavern 4

5 l Sunset + Vine Hollywood Palladium ArcLight Hollywood CNN elter 7060 W. Sunset Boulevard Los Angeles, CA 5

6 OFFERING SUMMARY ROSS DRESS FOR LESS 7060 W. SUNSET BOULEVARD LOS ANGELES, CA EXECUTIVE SUMMARY Marcus & Millichap has been selected to exclusively market for sale Ross Dress for Less, located at 7060 W. Sunset Boulevard on the southeast signalized corner of Sunset Boulevard and N. La Brea Avenue in the heart of Hollywood, California. Ross Dress For Less is on a NNN lease that expires in January 2020, with two, fiveyear options remaining. Built in 1987, Ross occupies 27,168 SF situated on 57,230 SF of land. Ross is an S&P 500, Fortune 500 and Nasdaq 100 company and the largest discount apparel and home fashion chain in the United States. Ross has investment grade credit with a credit rating of A3 by Moody s Investors Services. Ross offers an investor a secure and stable income with zero landlord management responsibility. Ross is located next to multiple major retailers such as Subway, 7-Eleven, Starbucks, and more. There is excellent parking available. Sunset Boulevard and N. La Brea Avenue are two major thoroughfares through Hollywood with over 84,000 vehicles a day at the intersection W. Sunset Boulevard is located in Hollywood s entertainment and tourist district, just half a mile away from the entertainment complex of Hollywood & Highland. Hollywood is the entertainment capital of the world with world-famous landmarks such as the Dolby Theatre and the Hollywood Walk of Fame. 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, nightclubs, and retail opportunities to the area, making Hollywood one of the more desirable submarkets in the Los Angeles area. Ross Dress for Less is an excellent opportunity for an investor and offers a stable and secure income stream with zero management responsibility. It is also a potential redevelopment opportunity due to its desirable location in Hollywood. 6 Hollywood & Highland

7 HOLLYWOOD BOULEVARD PROPERTY INFORMATION LEASE INFORMATION Address Sales Price $20,000,000 CAP Rate 3.57% Year 2020 CAP Rate 3.86% Price/SF $ Bldg SF 7060 W. Sunset Boulevard, Los Angeles, CA ,168 SF Tenant Ross Dress For Less Lease Start 1/23/1990 Lease Expire 1/31/2020 Options Two, five year options remaining Increases 8% every 5 years Lease Type NNN N. LA BREA AVENUE SUNSET BOULEVARD ROSS Lot SF 57,230 SF (1.31 acres) Zoning LAC4 7

8 INVESTMENT HIGHLIGHTS INVESTMENT GRADE CREDIT NNN LEASE Ross Dress For Less is an S&P 500, Fortune 500, and Nasdaq 100 company Ross is the largest discount chain in the United States with 1,409 locations Investment grade credit rating of A3 by Moody s NNN lease with no management responsibility Lease expires in January of 2020 with two, five year options, 8% increases every 5 years Irreplaceable location at the signalized corner of N. La Brea Avenue and Sunset Boulevard with Excellent parking High daily traffic counts with over 84,000 vehicles per day IRREPLACEABLE HOLLYWOOD LOCATION Ross is located walking distance to Hollywood & Highland, the entertainment complex that is home to the Dolby Theatre and the heart of Hollywood s entertainment district Two Metro Red line stations in Hollywood that link Hollywood directly to the rest of Los Angeles. Excellent walkability - Walkscore of 96/100 on walkscore.com Tremendous revitalization in Hollywood over the past decade, 4.8 billion dollars has been invested since 2000 by developers of multifamily, commercial, and hospitality Hollywood is a major destination for visitors and residents alike, approximately 6.1 million visitors annually Creative businesses are taking root in Hollywood due to its access to the Metro, city life, and live/work spaces Hollywood s major landmarks include Hollywood & Highland, El Capitan Theatre, TCL Chinese Theatre, Capitol Records Building Hollywood is a place of continuing development as it currently has one billion dollars of projects under construction 8

9 TROPHY ASSET WITH STRONG INTRINSIC VALUE Excellent frontage and visibility along West Sunset Boulevard, the main east-west arterial road through Hollywood Easy ingress and egress Proximate to West Hollywood, Downtown Los Angeles, Mid City, and the San Fernando Valley Unique opportunity in the epicenter of Hollywood with significant long-term growth potential STRONG IMMEDIATE DEMOGRAPHICS Average household Income of $97,802 within a three-mile radius Population of 933,092 within a five-mile radius Strong local economy with significant job growth over a multitude of diverse sectors There has been tremendous revitalization in Hollywood over the past decade, 4.8 billion dollars has been invested since 2000 by multifamily, commercial, and hospitality developers. 9

10 PROPERTY OVERVIEW ADDRESS 7060 W. Sunset Boulevard, Los Angeles, CA SITE The subject property is located on the signalized southeast corner of N. La Brea Avenue and Sunset Boulevard. SQUARE FOOTAGES The building square footage is 27,168 SF on 57,230 SF of land. ZONING The zoning is LAC4. APN S The APN is TRAFFIC COUNTS N. La Brea Avenue: 38,816 vehicles per day Sunset Boulevard: 45,990 vehicles per day Total: 84,806 vehicles per day YEAR BUILT The property was built in TENANT Ross Dress For Less PARKING 117 free surface spaces are available. Ratio of 7.57/1,000 SF. FRONTAGE AND ACCESS Approximately 126 feet of frontage on Sunset Boulevard and 120 feet on La Brea Avenue. 10 Plat Map

11 SUNSET BOULEVARD N. LA BREA AVENUE 11

12 Santa Monica SoHo House Mondrian Sunset Tower Chateau Marmont The Laugh Factory Runyon Canyon West Hollywood Ralphs Wendy s Burger King N LA BREA AVENUE Starbucks SUNSET BOULEVARD Days Inn 12

13 13

14 TENANT OVERVIEW TENANT PROFILE Name Type Traded As Industry Headquarters Revenue Number of Locations Website Credit Rating Ross Inc. Public Nasdaq: ROST Retail Dublin, California $12.9 billion 1,412 stores A3 by Moody s Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100 (ROST) company headquartered in Dublin, California, with fiscal 2017 revenues of $14.1 billion. The Company operates Ross Dress for Less ( Ross ), the largest off-price apparel and home fashion chain in the United States with 1,409 locations in 37 states, the District of Columbia, and Guam at fiscal 2017 year end. Ross offers first-quality, in-season, name brand and designer apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 60% off department and specialty store regular prices every day. The Company also operates 213 dd s DISCOUNTS in 16 states at the end of fiscal 2017 that feature a more moderately-priced assortment of first-quality, in-season, name brand apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 70% off moderate department and discount store regular prices every day. HIGHLIGHTS Fiscal 2017 revenues of $14.1 billion Ross Dress for Less is the largest off-price appareal and home fashion chain the US with 1,412 stores Ross operates 215 dd s Discounts in 16 states FORTUNE 500 STATISTICS Ranked #219 in 2016, up from #237 in 2015 and $269 in 2014 In 2016, ranked #6 out of 500 comapnies for total return to stockholds on a 10-year basis Ranked #17 out of 500 companies on 10-year annual EPS growth rate $12.9 $ % $ TOTAL SALES ($ BILLIONS) EARNINGS PER SHARE RETURN ON AVERAGE STOCKHOLDERS EQUITY CASH RETURNED TO STOCKHOLDERS ($ MILLIONS)

15 Ross Dress For Less is a Fortune 500 company that operates 1,412 stores in the United States and 215 dd's Discounts stores. 15

16 FINANCIALS ROSS LEASE ABSTRACT Tenant Ross Dress for Less Building SF 27,168 SF TENANT Ross Dress For Less LEASE EXPIRE MO. RENT MO. RENT PER SF ANNUAL RENT INCREASES 1/31/2020 $57,279 $2.11 $687,350 8% every 5 yrs Lease Start 1//23/1990 Lease Expire 1/31/2020 Original Lease Term 15 years Billboard 6/30/2021 $2,295 - $27,540 2% ann in July Total - $59,574 - $714,890 - Rent/SF $2.11 Monthly Rent $57,279 Net Operating Income $687,350 Lease Type NNN Options Two, five year options remaining INCOME AND EXPENSE CURRENT Scheduled Lease Income: $687,350 Other Income: Billboard $27,540 Net Operating Income: $714,890 Option Periods and Rents Option Increases Period 2/1/20-1/31/25 2/1/25-1/31/30 8% every 5 years Mo. Rent $61, $66, Annual $742,230 $801,728 PRICING Sales Price $20,000,000 Current CAP Rate 3.57% 2020 CAP Rate 3.86% 2025 CAP Rate 4.17% 16

17 Dave & Buster s Lucky Brand Guess Shoe Palace Aldo Shoes California Pizza Kitchen Forever 21 Guess MAC Sephora Hard Rock Cafe Cabo Wabo Cantina OHM Nightclub Dolby Theatre 101 HOLLYWOOD FWY CVS Muji Subway DSW Shoes Vegas Seafood Buffet LA Fitness Egyptian Theatre N. LA BREA AVENUE W. SUNSET BOULEVARD 7060 W. Sunset Boulevard 17

18 AREA OVERVIEW HOLLYWOOD 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. Where creativity meets culture, a true urban experience. 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. 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. $4.8B $2.2B 18 INVESTED SINCE 2000 COMPLETED PROJECTS

19 19

20 AREA OVERVIEW The cultural epicenter of the movie industry and an iconic destination for tourists, locals, and celebrities alike, ENTERTAINMENT CAPITAL OF THE WORLD For millions of visitors, Hollywood is an essential part of the Los Angeles experience. 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. 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. 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 full-service 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. Destinations defining Hollywood s style, eccentricity, and history including the Dolby Theatre, host to the academy awards. Live experiences and sought-after entertainment for the curious local or tourist. The Hollywood of yesteryear is memorialized and a new definition of Hollywood emerges. The entertainment capital of the world. 20

21 TCL CHINESE THEATRE DOLBY THEATRE EL CAPITAN THEATRE PANTAGES THEATRE TCL Chinese Theatre - hosts many film premieres. One of its attractions is the famous cement forecourt containing hand and footprints of numerous screen legends, including John Wayne, Marilyn Monroe, Judy Garland and Jack Nicholson, to name a few. Dolby Theatre - is the crown jewel of the Hollywood & Highland Center. The 3,400 seat theatre opened in November 2001 and soon thereafter became known to more than one billion people across the globe as the first permanent home of the Academy Awards A legendary theatre, El Capitan Theatre which hosts live stage shows, world premieres, and other special events HOLLYWOOD BOWL GRIFFITH OBSERVATORY FARMER S MARKET AMOEBA MUSIC Pantages Theatre is recognized for its art deco motif, and features Broadway musicals, dance performances and concerts. A stunning Hollywood landmark where you can see your favorite musicians and bands in the outdoor amphitheater. Exhibits and live shows at the Samuel Oschin Planetarium. Views of Los Angeles at the park. Weekly farmers market with fresh produce and artisanal food products. A large and massive inventory of vinyls. 21

22 AREA OVERVIEW HOLLYWOOD S CREATIVE HUB MAJOR EMPLOYERS NEARBY Hollywood benefits from its proximity to a wide variety of major employers. In the immediate area are Capitol Records, Paramount Pictures, Kaiser Permanente, Hollywood Presbyterian Medical Center, Ticketmaster, Universal City Studios, Disney and Warner Bros. As such, residents have easy access to myriad jobs in the entertainment industry as well as the health care sector. Additionally, Hollywood offers easy commutes to major nearby employment hubs in Downtown Los Angeles, West Los Angeles, and the San Fernando Valley. Hollywood has fostered a creative hub and grown its square footage of office space to service new companies. Apprximately 700,000 square feet of office space is under construction and over 1.2 million square feet are in development. EMPLOYER EMPLOYEES AT&T 500 Church of Scientology 2,000 Capitol Records 600 Color by Deluxe 626 Paramount Pictures 1,700 Kaiser Permanente Medical Center 3,000 Hollywood Presbyterian Medical 1,250 Fire Insurance Exchange 2,300 Los Angeles City College 1,800 Farmers Insurance 3,000 Guardian Eagle Security 500 Ticketmaster 1,300 Universal City Studios 2,000 Technicolor 600 Agile brands 1,000 Shell Oil 560 Disney

23 NOTABLE HOLLYWOOD COMPANIES OFFICE CONSTRUCTION CAVIAR LA Caviar is an award-winning entertainment company in LA, London, Brussels, Paris + Amsterdam. Entertaining audiences, wherever they are. SUNSET GOWER STUDIOS Hollywood s largest independent television and movie studio has 12 soundstages on a 14-acre facility. NEUEHOUSE A hybrid coworking facility and social club aimed at enterprising creative professionals. 2M SF OF OFFICE SPACE CAPITOL RECORDS Since 1956, the landmark building has hosted West Coast operations for the top record label. TRAILER PARK Media and entertainment marketing powerhouse has 440 employees. 700,000 SF UNDER CONSTRUCTION J2 GLOBAL NASDAQ listed cloud services and digital media network company LIVE NATION An entertainemnt powerhouse WE WORK HOLLYWOOD A collaborate co-working space and incubator for entrereneurial enterprises. VIACOM Viacom is a creative content hub across television, film, online and mobile platforms. Its most prominent names include BET, CENTRIC, Nickelodeon, Nick Jr., TeenNick, Nicktoons, Nick at Nite, COMEDY CENTRAL, TV Land, SPIKE, Tr3s, Paramount Channel and VIVA. 1.2M SF IN DEVELOPMENT 9,593 TOTAL DAYTIME EMPLOYEES 23

24 AREA OVERVIEW PEDESTRIAN FRIENDLY NEIGHBORHOOD Hollywood is the premier pedestrian and transit-oriented neighborhood in Los Angeles. The location is designated as a Walker s Paradise with a Walkability score of 96 by WalkScore.com, which means daily errands do not require a car. Furthermore, the Metro Red Line has two stops in Hollywood, the Hollywood/Highland station and the Hollywood/Vine station. 96/100 WALKER S PARADISE: DAILY ERRANDS DO NOT REQUIRE A CAR Beyond boasting Hollywood s renowned landmarks such as the Dolby Theatre, Pantages Theatre and El Capitan Theatre, Hollywood is home to dozens of restaurants, world class retailers and museums Sunset Boulevard is within a few blocks of the following attractions: 24 HOLLYWOOD CULTURAL AMENITIES TCL Chinese Theatre El Capitan Theatre The Hollywood Bowl Hollywood Palladium Dolby Theatre RESTAURANT/NIGHTLIFE OPTIONS ArcLight Cinemas Redbury Hotel W Hotel Roosevelt Hotel Hard Rock Cafe HOLLYWOOD RETAILERS Walgreens Target Trader Joe s Hollywood Farmer s Market GROCERY STORES Trader Joe s Food 4 Less Gelson s Market Pavilions

25 METRO RED LINE 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. HOLLYWOOD/HIGHLAND 0.5 MILES FROM SUBJECT PROPERTY HOLLYWOOD/VINE 1.3 MLES FROM SUBJECT PROPERTY 25

26 AREA OVERVIEW DEMOGRAPHICS Continued demand for residential properties is driven by local jobs, educational institutions and accessible public transit. Large mixed-use projects are serving residents who take advantage of Hollywood s walk-friendly neighbors. A population increase of 68.6% is estimated for the years 2015 to Diverse mix with 37% of GenX adults (ages 30-49), 25% adult boommers (50-68), and 37% Gen Y (ages 18-29) adults 1 MILE 3 MILE 5 MILE 2016 Population 56, , , Households 33, , , Average HH Size Daytime Population 69, , , Owner Occupied Housing Units 11.8% 21.5% 22.9% 2016 Renter Occupied Housing Units 88.2% 78.5% 77.1% 2016 Vacant 2.8% 3.5% 3.7% $ 0 - $ 14, % 15.3% 15.0% $ 15,000 - $24, % 10.7% 11.9% $ 25,000 - $34, % 8.7% 10.0% $ 35,000 - $49, % 11.3% 12.4% $ 50,000 - $74, % 15.9% 15.8% $ 75,000 - $99, % 10.4% 9.9% $100,000 - $124, % 7.8% 7.2% $125,000 - $149, % 4.6% 4.1% $150,000 - $200, % 5.5% 5.0% $200,000 to $249, % 3.2% 2.8% $250, % 6.8% 5.8% Median HH Income $45,080 $55,976 $50,903 Per Capita Income $46,095 $48,612 $39,175 Average HH Income $77,522 $97,802 $89,930 26

27 $97, , M AVERAGE HH INCOME WITHIN 3-MLE RADIUS POPULATION WITHIN 5-M RADIUS POPULATION WITHIN 5-M RADIUS 200% 100% $4.8B POPULATION INCREASE INCREASED IN UNITS TOTAL INVESTMENT 27

28 AREA OVERVIEW DEVELOPMENT IN HOLLYWOOD With recently completed, ongoing and planned developments that total approximately $7.4 billion, Hollywood is experiencing incredible residential, commercial, and infrastructure growth. The office market in the immediate area is strong, with companies such as Nickelodeon, Nielsen, BuzzFeed, OpenTable, Fender, Paramount Pictures, Live Nation, Capitol Records, CNN, and Viacom all currently having an office presence. Netflix, the streaming movie and TV giant, plans to move its Southern California operations from Beverly Hills to Hollywood by 2017 and expects to occupy 200,052 SF at the $200 million ICON complex at 5800 West Sunset Boulevard. The deal is the largest office lease signed in Hollywood to date in terms of square footage. In addition, new hotels are currently being developed including the Thompson Hollywood Hotel, a 12 story hotel including restaurant space and a rooftop lounge. This development, as well as the many others either approved or currently under construction, will continue to drive educated professionals to the area who are attracted to the live/work/play environment that Hollywood offers. COLUMBIA SQUARE Columbia Square, a mixed-use project, 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. 28

29 ICON Located on a prominent four-acre site at the northeast corner of the Sunset Bronson Studios lot, ICON is a 14-story, Class A office building and the new home to Netflix s Los Angeles headquarters. ICON is situated in the heart of Hollywood, just one block west of the 101 Freeway and minutes from the Hollywood/Vine LA Metro Red Line station. The vertical campus features a striking design by Gensler Architects and state-of-the-art building systems expected to achieve LEED Gold certification. EARL CARROLL THEATRES (NICKELODEON SITE) Designed by Harley Ellis Devereaux, the seven-story structure will hold 200 units (a mix of studios and one- and two-bedroom 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. ACADEMY AQUARE Kilroy Realty is preparing to begin the development named Academy Aquare. The project - slated for a city block bounded by Vine Street, Homewood, Ivar and De Longepre Avenues - would construct a series of high-rise and low-rise buildings featuring 250 apartments, 235,000 square feet of office space and 37,000 square feet of ground-floor shops and restaurants. HORIZON HOLLYWOOD The mixed-use development will include 10,000 square feet of ground floor retail and eateries, plus a 9,300-square-foot pedestrian plaza. 29

30 INVESTMENT ADVISORS: BRANDON MICHAELS Senior Managing Director Investments Director, National Retail Group Tel: (818) Fax: (818) License: CA # BEN BROWNSTEIN Investment Associate Director, National Retail Group Tel: (818) Fax: (818) License: CA # BRANDON MICHAELS GROUP