107-117 CHANNEL ROAD PACIFIC PALISADES, CA 90402 DRE# … · dre# 01991628. offering memorandum....

DRE# 01991628

OFFERING MEMORANDUM

107-117 CHANNEL ROADPACIFIC PALISADES, CA 90402

PRESENTED BY

LOCATION OVERVIEWProperty Location

PROPERTY SUMMARYProperty Highlights Property Details Photography

FINANCIALSFinancial Overview Rent Roll

COMPARABLESSales Comps Rent Comps

Kenny StevensBRE# 01090251

[email protected]

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9454 Wilshire Blvd, Seventh Floor

Beverly Hills, CA 90212

LOCATIONPACIFIC PALISADES, CA

PACIFIC PALISADES-SANTA MONICA, CALIFORNIA

The Pacific Palisades is an affluent residential neighborhood tucked between the Santa Monica Mountains and the Pacific Ocean. Temescal Gateway Park offers hiking trails with sweeping coastline views, and the sandy Will Rogers State Beach provides access to a 22-mile beachfront bike path. Landmarks include the Getty Villa museum., Riviera Country Club, and the Polo grounds of Will Rogers State Park. The Palisades stretches nearly ten miles along Sunset Blvd – from Allenford Dr to the east, to Pacific Coast Highway to the west – and features a number of different neighborhoods, each with its own distinct personality. The Palisades offers an active outdoor lifestyle while still maintaining an easy drive to everything the City of Los Angles has to offer. The neighborhood has a walkable commercial core with a small-town feel in the heart of a world-class city.

The city of Santa Monica offers a walkable downtown, a blossoming public transportation system, andseveral notable tourist destinations. Known for its sunshine and beaches, Santa Monica prides itself as anational model for progressive issues, including social services, quality of life for local residents, andenvironmental leadership. This urban village has spectacular views of its vast white sand beaches fromPalisades Park, exceptional shopping on Third Street Promenade, main Street and Montana Avenue,and the region’s most renowned restaurant scene. Santa Monica stretches for about two miles alongthe coast before joining up with Venice Beach.

Major employers in Santa Monica include UCLAHospital, St. John’s Health Center, RAND Corporation,Universal Music Group, Activision and Santa MonicaCollege.

Silicon Beach is the Westside region of the Los Angelesmetropolitan area that is home to over 500 techstartup companies. Major technology companieshave opened offices in the region including Google,Yahoo!, YouTube, BuzzFeed, Facebook, AOL,Electronic Arts, EdgeCast Networks, and MySpace. Theregion is considered the second- or third-largest techhub in the world, according to various reports. This hashad major impacts on the type and availability ofoffice space and on home prices in Playa Vista, PlayaDel Rey, Westchester, Santa Monica, and Venice, asthese areas have become more desirable due tothis influx.

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The Expo Line is a light-rail line that runs between Downtown Los Angeles and Santa Monica. The line is named “Expo” after Exposition Boulevard, which it runsalongside for most of its route. It is one of the six lines in the Metro Rail system, and is operated by the Los Angeles County Metropolitan TransportationAuthority (Metro).

LOCATIONOVERVIEW

107-117 CHANNEL ROAD

Santa Monica Pier

Santa Monica College

RestaurantsGiorgi Baldi

Patrick’s RoadhouseTallulas

Café DelfiniShore Bar

Santa Monica Canyon

Riviera Country Club

Third Street Promenade

MALIBUSANTA

MONICA

Ocean AveTower 8

Water GrillBP Oysterette

BOAThe Penthouse

Fig

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BRENTWOOD

PACIFIC PALISADES

PROPERTY DETAILSUnits 9 + Office + Retail Major IntersectionMarketAPNZoning TypeLot Size SF

Channel Road and PCH Palisades/Santa Monica 4410-012-001 / 4410-012-002 LAC2Approx. 7,056 square feet.

PROPERTY SUMMARY PROPERTY DETAILS

PROPERTY DESCRIPTION107-117 Channel Road, two contiguous lots, includes (9) residential units, and (1) small street-front retail space on more than 7,000 square feet of land zoned LAC2. Property is 50 yards from the sand, with spectacular ocean views. The retail unit benefits from high visibility and all tenants enjoy easy access to the beach, bike path and numerous restaurants in walking distance.

The property is currently fully vacant.

This is a significant opportunity to add value in an A+ location.

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PROPERTY SUMMARY PROPERTY HIGHLIGHTS

9 UNITS + SMALL STEET-FRONT RETAIL IN PACIFIC PALISADES• Prime location, 50 yards from the sand!• Most units have ocean views and are currently being renovated• Offering includes three structures with (9) residential units and (1) small street-

front retail space• Minutes to Santa Monica and Malibu• Two contiguous parcels, Los Angeles C2 zoning

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PROPERTY SUMMARY PROPERTY PHOTOS --------------------------------------


FINANCIALSFINANCIAL OVERVIEW - $4,950,000

INVESTMENT SUMMARY SCHEDULED INCOMEPurchase Price: $4,950,000 UNIT MIX CURRENT PRO FORMADown Payment: $4,950,000 100% Units Beds Baths Average Monthly Rent MonthlyYear Built: 1923 1 3 2 $5,500 $5,500Units: 10 1 2 1 $3,750 $3,750Approx. Lot Size: 7,056 Sq. Ft. 2 1 1 $3,000 $6,000Approx. Bldg. NRSF: 3,927 Sq. Ft. 5 Studio $2,500-$2,750 $13,050Cost per NRSF: $1,261Cost per Unit: $495,000

1 Retail $1,000 $1,000

$0 $29,800CURRENT PRO FORMA $0 $250

GRM: 16.05 13.75 Laundry Income: $0 $200CAP: 4.98% 4.93% Monthly Gross Income: $27,000 $29,750

Annual Gross Income: $324,000 $357,000

ANNUAL INCOME ANNUAL EXPENSESCURRENT PRO FORMA AMOUNT

Scheduled Gross Income: $360,000 $61,875Vacancy Allowance: $10,800 3.00% $1,571Gross Operating Income: $349,200 $5,891Less Expenses: $115,736 32% Repairs & Maintenance: $25,200Net Operating Income: $244,033 Professional Mgmt: $16,200Less Loan Payment $0 $0Pre-Tax Cash Flow: $244,033 4.93% $5,000Plus Principal Reduction: $0Total Return Before Taxes: $244,033 4.93%

$115,736$29.47$10,521Expense / Unit:

Total Expenses:Expense / NRSF:

Utilities Paid by Tenant: Gas, Electricity, Water, Trash

Scheduled Rent:Storage Income:

ITEM

Misc:Onsite Mgmt:

Insurance:Utilities:

Taxes: (based on new purchase price) 1.25%

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Sheet1

INVESTMENT SUMMARYSCHEDULED INCOME

Purchase Price:$5,200,000UNIT MIXCURRENTPRO FORMA

Down Payment:$5,200,000100%UnitsBedsBathsAverageMonthlyRentMonthly

Year Built:1923132$5,500$5,500

Units:11121$3,750$3,750

Approx. Lot Size:7,056Sq. Ft.211$3,000$6,000

Approx. Bldg. NRSF:3,927Sq. Ft.5Studio2,500-$2,700$13,050

Cost per NRSF:$1,3241Office$500$500

Cost per Unit:$472,7271Retail$1,000$1,000

Scheduled Rent:$0$29,800

CURRENTPRO FORMAStorage Income:$0$0

GRM:16.0514.46Laundry Income:$0$200

CAP:4.98%4.69%Monthly Gross Income:$27,000$30,000

Annual Gross Income:$324,000$360,000

ANNUAL INCOMEANNUAL EXPENSES

CURRENTPRO FORMAITEMAMOUNT

Scheduled Gross Income:$324,000$360,000Taxes: (based on new purchase price) 1.25%$65,000

Vacancy Allowance:$00.00%*$10,8003.00%Insurance:$0

Gross Operating Income:$324,000$349,200Utilities:$0

Less Expenses:$65,00020%*$104,58530%Repairs & Maintenance:$0

Net Operating Income:$259,000$244,033Professional Mgmt:$0

Less Loan Payment$0$0Onsite Mgmt:$0

Pre-Tax Cash Flow:$259,0004.98%**$244,0334.69%Misc:$0

Plus Principal Reduction:$0$0

Total Return Before Taxes:$259,0004.98%**$244,0334.69%Utilities Paid by Tenant: Gas, Electricity, Water, Trash

* As a percent of the scheduled gross income. ** As a percent of the down payment

Total Expenses:$65,000

Expense / NRSF:$16.55

Expense / Unit:$5,909

PROPOSED FINANCING INFORMATION

Loan Rate4.650%fixed for 10 yrs$0per month

Sheet2

CurrentMarketLease

Unit #Unit TypeRentRentDateNotes

1011 + 1$1,018$2,1958/1/10

1021 + 1$2,179$2,2953/15/17

1031 + 1$1,995$2,1953/13/17

1041 + 1$2,075$2,1953/16/17

1051 + 1$2,075$2,1953/9/17

1061 + 1$2,095$2,095VACANT

112Studio$867$1,8957/15/12

113Studio$1,795$1,8955/4/17

2011 + 1$2,095$2,2955/1/17

2021 + 1$2,350$2,350*VACANT

2031 + 1$2,095$2,0954/1/18

2041 + 1$1,204$2,29510/11/08Section 8

2051 + 1$1,018$2,29510/1/11

2061 + 1$1,019$2,29512/1/11

2071 + 1$875$2,2956/1/13

208Studio$1,895$1,8951/1/17**On-site Manager

2091 + 1$2,095$2,2955/1/17

210Studio$1,895$1,89510/1/17

2111 + 1$2,250$2,2953/15/17

212Studio$813$1,8953/12/05

213Studio$1,895$1,8958/1/17

2141 + 1$2,195$2,2955/1/17

2151 + 1$2,387$2,29512/30/16

2161 + 1$2,095$2,0953/1/18

2172 + 1$1,140$2,7504/1/01Section 8

2181 + 1$2,179$2,2953/15/17

NC Bachelor$0$1,295VACANT

GARAGE INCOME:$100$100

LAUNDRY INCOME:$350$350

MONTHLY TOTAL:$46,044$58,525

ANNUAL TOTAL:$552,528$702,300

FINANCIALSRENT ROLL

Current MarketUnit # Unit Type Rent Rent Notes

107-A RETAIL $1,000 OCEAN VIEW107 3 + 2 $5,550 OCEAN VIEW

109-A 2 + 1 $3,750 OCEAN VIEW117-A STUDIO $2,500117-B STUDIO $2,500117-C 1 + 1 $3,000117-D Studio $2,750 OCEAN VIEW117-E STUDIO $2,500117-F STUDIO $2,750 OCEAN VIEW117-G 1 + 1 $3,000 OCEAN VIEW

$0 $250$0 $200

$0 $29,750

$0 $357,000ANNUAL TOTAL:

MONTHLY TOTAL:

LAUNDRY INCOME:STORAGE INCOME:

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Sheet1

INVESTMENT SUMMARYSCHEDULED INCOME

Purchase Price:$7,900,000UNIT MIXCURRENTPRO FORMA

Down Payment:$3,000,00038%UnitsBedsBathsAverageMonthlyRentMonthly

Year Built:1968121$1,140$1,140$2,750$2,750

Units:261911$875-$2,350$35,294$2,195-$2,350$42,660

Approx. Lot Size:18,096Sq. Ft.6Studio$813-$1,895$9,160$1,895$11,370

Approx. Bldg. NRSF:12,959Sq. Ft.1Bachelor (NC)$0$0$1,295$1,295

Cost per Unit:$303,846

Scheduled Rent:$45,594$58,075

CURRENTPRO FORMAGarage Income:$100$100

GRM:14.3011.25Laundry Income:$350$350

CAP:4.61%6.45%Monthly Gross Income:$46,044$58,525

Annual Gross Income:$552,528$702,300

ANNUAL INCOMEANNUAL EXPENSES

CURRENTPRO FORMAITEMAMOUNT

Scheduled Gross Income:$552,528$702,300Taxes: (based on new purchase price) 1.25%$98,750

Less Vacancy Reserve Rate:($16,576)3.00%*($21,069)3.00%Insurance:$5,184

Gross Operating Income:$535,952$681,231**Utilities:$16,276

Less Expenses:($171,888)31%*($171,888)24%Repairs & Maintenance:$13,000

Net Operating Income:$364,064$509,343Professional Mgmt:$21,438

Less Debt Service:($292,713)($292,713)Onsite Mgmt:$10,740

Pre-Tax Cash Flow:$71,3512.38%**$216,6307.22%Misc:$6,500

Plus Principal Reduction:$81,169$81,169EXPENSES ARE ESTIMATED

Total Return Before Taxes:$152,5205.08%**$297,7999.93%**2017 ACTUAL EXPENSES

* As a percent of the scheduled gross income. ** As a percent of the down payment

Total Expenses:$171,888

PROPOSED FINANCING INFORMATIONExpense / NRSF:$13.26

Loan Rate4.350%fixed for 5 yrs$24,393per monthExpense / Unit:$6,611

Loan Duration30yr

Sheet2

CurrentMarket

Unit #Unit TypeRentRentNotes

107-ARETAIL$1,000OCEAN VIEW

1073 + 2$5,550OCEAN VIEW

109-A2 + 1$3,750OCEAN VIEW

109-BOFFICE$500

117-ASTUDIO$2,500

117-BSTUDIO$2,500

117-C1 + 1$3,000

117-DStudio$2,750OCEAN VIEW

117-ESTUDIO$2,500

117-FSTUDIO$2,750OCEAN VIEW

117-G1 + 1$3,000OCEAN VIEW

STORAGE INCOME:$0$0

LAUNDRY INCOME:$0$200

MONTHLY TOTAL:$0$30,000

ANNUAL TOTAL:$0$360,000

COMPARABLESSALES COMPS

Property Photo Address Sale Price COE # ofUnitsBuilding

SFPrice/Unit

YearBuilt Unit Mix Comments

107-117 Channel RdPacific Palisades, CA 90402 $5,200,000 - 11 7,056 $472,727 1923

(1) 3+2(1) 2+1(2) 1+1

(5) Studio(1) Office(1) Retail

Subject Property

1 820 4th StreetSanta Monica, CA 90403

$4,255,000 5/30/17 7 9,282 $607,857 1956 (7) 2+2 7 parking spaces.

2 947 5th Street

Santa Monica, CA 90403$2,800,000 6/8/18 6 4,632 $591,667 1923 (4) 1+1(2) Studio

Fully Vacant, major deferred maintenance.

3 828 3rd Ave

Santa Monica, CA 90403$3,770,000 6/12/17 7 5,654 $538,571 1948 (1) 2+1(6) 1+1 10 parking spaces.

4 927 Ocean Ave Santa Monica, CA 90403

$8,000,000 1/27/17 16 7,876 $500,000 1922 (2) 1+1(14) StudioInferior location. Similar age. 24 parking spaces. 800 sq ft

units.

5 522-532 Idaho AveSanta Monica, CA 90403

$2,500,000 11/8/17 6 3,360 $416,667 1922 (6) Studio4 parking spaces. Inferior

unit mix. Similar age. Inferior location.

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COMPARABLESSALES COMPS

Sales Comps820 4th St 947 5th St828 3rd St 927 Ocean Ave532 Idaho Ave

107-117 Channel Rd

1 234

512

3

45

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Property Photo Address Rent Unit Type Comments

107-117 Channel RdPacific Palisades, CA 90402

$5,500 3+2

Projected rent for subject property

$3,750 2+2

$3,000 1+1

$2,000-$2,500 Studio

$500 Office

$1,000 Retail

1 843 4th Street Santa Monica, CA 90403

$2,995 1+1

2 817 4th StreetSanta Monica, CA 90403

$2,900 1+1


$2,500 Studio


$3,100 1+1

5 707 Idaho Ave Santa Monica, CA 90403

$2,575 Studio

COMPARABLESRENTAL COMPS --------------------------------------


COMPARABLESRENTAL COMPS

Rental Comps843 4th St.817 4th St.960 10th St.960 10th St.707 Idaho Ave.

107-117 Channel Rd

12 3

4

1

5

2345

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FOR MORE INFORMATIONPLEASE CONTACT:

KENNY STEVENSBRE# 01090251310.963.7851

[email protected]

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.

Buyer must verify the information and bears all risk for any inaccuracies.

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107-117 CHANNEL ROAD PACIFIC PALISADES, CA 90402 DRE# … · dre# 01991628. offering memorandum....

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