5350 2ND AVENUE - LoopNet€¦ · 1922 Gross Square Feet: 6,394 SF Lot Size: 3,577 SF Ownership:...

5350 2ND AVENUE>>>A 24-UNIT MIXED USE OPPOR TUNIT Y IN SOUTH LOS ANGELES

N O N - E N D O R S E M E N T & D I S C L A I M E R N OT I C E

CO N F I D E N T I A L I T Y & D I S C L A I M E RThe 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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap. All rights reserved.

N O N - E N D O R S E M E N T N OT I C EMarcus & 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.

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

5350 2 N D AV E N U E, LO S A N G E L E S , C A 90043

E XC LU S I V E LY L I S T E D BY

WWW.NEEMAAHADIAN.COM

NEEMA AHADIANSenior Vice President InvestmentsWest Los AngelesOffice [email protected] CA BRE# 01346750

PROPERTY DESCRIPTION

I N V E S T M E N T O V E R V I E W

Marcus & Millichap is pleased to present 5350 2nd Avenue, a twenty-four unit mixed use building located in South Los Angeles. With a current CAP rate of 6.40% and GRM of 9.07, this offering gives an investor the unique opportunity to acquire an asset in a densely populated Los Angeles neighborhood with strong cash flow.

Built in 1922, 5350 2nd Avenue consists of seventeen residential units on the second floor. Each of those units are SRO units. The bottom floor consists of three one bedrooms and four retail units. There is retail potential for all units on the ground floor, allowing an investor to increase rents for a retail use that will pay more than a residential tenant.

The Subject Property is located in the Park Mesa Heights neighborhood, with population growth of 1.60% year-over-year as well as employment opportunities within walking distance. This opportunity provides an investor the chance to own a low maintenance asset with tremendous current cash flow.

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I N V E S T M E N T H I G H L I G H T S ► THE OPPORTUNITY: 5350 2nd Ave is a 24 unit

mixed-use investment opportunity located in the

densely populated Park Mesa Heights neighborhood

of Los Angeles, between Crenshaw Blvd & S Western

Ave

► RETURN ON INVESTMENT: The subject property

is factoring a 10% vacancy and offers an investor

strong returns with a current CAP rate of 6.40% and

GRM of 9.07

► UNIT MIX: Great unit mix consisting of 17 single

room occupancy units, three one bedroom units,

and four retail units

► STRONG DEMOGRAPHICS: Population of over

400,000 people within a 3-mile radius of the subject

property, continued employment growth with over

375,000 jobs within 5 miles

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P R O P E R T Y D E TA I L S

5350 2ND AVENUE, LOS ANGELES, CA 90043

APN 5005-004-012

Zoning C2-1VL-CPIO

Number of Units 24*

Year Built 1922

Gross Square Feet 6,394 SF

Lot Size 3,577 SF

Ownership Fee Simple

UTILITIES

Water Master Metered

Gas Master Metered

Electric Master Metered

CONSTRUCTION

Foundation Concrete

Framing Wood Frame

Exterior Stucco

Roof Asphalt

*Buyer to verify, no certificate of occupancy on record

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A R E A O V E R V I E W

Los Angeles is the second-most populous city in the United States, after New York City, and the most populous city in the Western United States. With an estimated population of four million, Los Angeles is the largest and most populous city in the state of California and the cultural, financial, and commercial center of Southern California.

Nicknamed the “City of Angels” partly because of its name’s Spanish meaning, Los Angeles is known for its Mediterranean climate, ethnic diversity, and sprawling metropolis. The city is also one of the most substantial economic engines within the nation, with a diverse economy in a broad range of professional and cultural fields. Los Angeles is also famous as the home of Hollywood, a major center of the world entertainment industry. A global city, it has been ranked 6th in the Global Cities Index and 9th in the Global Economic Power Index. The Los Angeles combined statistical area also has a gross metropolitan product of $831 billion (as of 2008), making it the third-largest in the world, after the Greater Tokyo and New York metropolitan areas.

Crenshaw High SchoolVan Ness Recreation Center

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5350 2nd Avenue

A R E A O V E R V I E W

Los AngelesContinued population growth in the immediate area of estimated 1.60% year-over-year since the 2010 census

Current average household income within a 3 mile radius of the Subject Property is $53,387

Close proximity to Downtown Los Angeles and public transportation

Consistent employment growth in the area with jobs exceeding 379,000 within a five mile radius

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PRICING & FINANCIALS

UNIT UNIT TYPE CURRENT RENT PRO FORMA RENT

1 SRO $960 $1,150

2 SRO $988 $1,150

3 SRO $988 $1,150

4 SRO $988 $1,150

5 SRO $988 $1,150

6 SRO $988 $1,150

7 SRO $1,328 $1,150

8 SRO $988 $1,150

9 SRO $1,124 $1,150

10 SRO $988 $1,150

11 SRO $1,015 $1,150

12 SRO $988 $1,150

13 SRO $998 $1,150

14 SRO $988 $1,150

15 SRO $988 $1,150

16 SRO $988 $1,150

17 SRO $988 $1,150

18 1 BD/1 BA $1,800 $1,800

19 1 BD/1 BA $1,500 $1,800

20 1 BD/1 BA $1,800 $1,800

21 Retail* $1,900 $1,900 Medical Marijuana

22 Retail* $1,900 $1,900 Medical Marijuana

23 Retail $2,000 $1,800 Storage

24 Retail $1,800 $1,800 Storage

0 TOTAL - VACANT N/A N/A

24 TOTAL - OCCUPIED $29,981 $32,350

R E N T R O L L

*Units 21 & 22 are combined, current rent is $3,800 ($1,900 per unit)

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INCOME CURRENT PRO FORMA

GROSS SCHEDULED RENT $363,972 $398,400

Less: Vacancy/Collection Allowance (GPR) 10.0% / $36,397 10.0% / $39,840

EFFECTIVE RENTAL INCOME $327,575 $358,560

LED Billboard Income N/A $6,000

Vending Machine Income $1,800 $1,800

Laundry Income $2,400 $2,400

EFFECTIVE GROSS INCOME $327,575 $358,560

EXPENSES CURRENT PER UNIT PRO FORMA PER UNIT

Real Estate Taxes (1.19%) $39,270 $1,636 $39,270 $1,636

Insurance $2,558 $107 $2,558 $107

Utilities $24,480 $1,020 $24,480 $1,020

Maintenance $12,000 $500 $12,000 $500

Waste Removal $3,240 $135 $3,240 $135

On-Site Manager $13,800 $575 $13,800 $575

Management Fee (5%) $16,379 $683 $17,928 $747

Cleaning/Pest Control/Landscape $4,500 $188 $4,500 $188

TOTAL EXPENSES $116,226 $117,776

Expenses per Unit $4,843 $4,907

Expenses per SF $18.18 $18.42

% of EGI 35.5% 32.9%

NET OPERATING INCOME $211,348 $240,784

Buyer must verify the accuracy of all figures independently.

I N CO M E & E X P E N S E S

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F I N A N C I A L A N A LY S I S & P R I C I N G

Loan information is time sensitive and subject to change.

SCHEDULED INCOME

UNITS UNIT TYPE APPROXIMATE SF AVERAGE CURRENT RENT MONTHLY INCOME PRO FORMA RENT MONTHLY INCOME

17 SRO 150 $1,017 $17,281 $1,150 $19,550

5 Retail A 1,000 $1,780 $8,900 $1,800 $9,000

2 Retail B 2,000 $3,800 $3,800 $3,800 $3,800

24 TOTAL $29,981 $32,350

5350 2ND AVENUE, LOS ANGELES, CA 90043

PRICE $3,300,000

Down Payment 50% / $1,650,000

Number of Units* 24

Price per Unit $137,500

Gross Square Feet 6,394 SF

FINANCING - FIRST TRUST DEED

Loan Amount $1,650,000

Interest Rate 4.75%

Amortization 30 Years

EXPENSES CURRENT PRO FORMA

Real Estate Taxes (1.19%) $39,270 $39,270

Insurance $2,558 $2,558

Utilities $24,480 $24,480

Maintenance $12,000 $12,000

Waste Removal $3,240 $3,240

On-Site Manager $13,800 $13,800

Management Fee (5%) $16,379 $17,928

Cleaning/Pest Control/Landscape $4,500 $4,500

TOTAL EXPENSES $116,226 $117,776

Expenses per Unit $4,843 $4,907

Expenses per SF $18.18 $18.42

% of EGI 35.5% 32.9%

INCOME CURRENT PRO FORMA

GROSS SCHEDULED INCOME $363,972 $398,400

Less: Vacancy/Colection Allowance (GPR) $36,397 $39,840

Less: Expenses $116,226 $117,776

NET OPERATING INCOME $211,348 $240,784

Reserves $4,800 $4,800

Less: Debt Service $100,324 $100,324

Pre-Tax Cash Flow 6.4% / $106,225 8.5% / $140,461

Principal Reduction $27,046 $27,046

TOTAL RETURN BEFORE TAXES 8.1% / $133,271 10.2% / $167,507

CAP Rate - Current 6.40%

CAP Rate - Pro Forma 7.33%

GRM - Current 9.07

GRM - Pro Forma 8.28

Year Built 1922

Lot Size 3,576 SF

Type of Ownership Fee Simple*Includes retail units

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MARKET COMPARABLES

PROPERTY NAME YEAR BUILT SALES PRICE PRICE/UNIT PRICE/SF CAP RATE GRM

5350 2nd Avenue 1922 $3,300,000 $137,500 $516.11 6.40% 9.07

1. 936 W Beach Avenue 1954 $2,490,000 $249,000 $325.41 3.87% 16.24

2. 1444 W 28th Street 1923 $1,985,000 $220,556 $360.12 N/A N/A

3. 866 W 42nd Place 1927 $4,460,000 $446,000 $612.13 N/A N/A

4. 3903 W 27th Street 1954 $1,850,000 $185,000 $339.57 4.60% 13.79

5. 1015 Leighton Avenue 1923 $2,650,000 $220,833 $256.78 5.50% 12.92

S A L E S CO M PA R A B L E S – S U M M A R Y

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5350 2nd Avenue

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936 W Beach AvenueInglewood, CA 90302

5350 2nd AvenueLos Angeles, CA 90043

1

S A L E S CO M PA R A B L E S

UNIT MIX

SRO 17

1 BD/1 BA 3

Retail 4

UNIT MIX

1 BD/1 BA 6

2 BD/1 BA 4

SALES PRICE $3,300,000

Sale Date N/A

Number of Units 24

Year Built 1922


Price per SF $516.11

CAP Rate 6.40%

GRM 9.07


Sale Date 8/17/2018

Number of Units 10

Year Built 1954



CAP Rate 3.87%

GRM 16.24

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866 W 42nd PlaceLos Angeles, CA 90037

3

UNIT MIX

1 BD/1 BA 4

2 BD/1 BA 6


Sale Date 5/29/2018

Number of Units 10

Year Built 1927



CAP Rate N/A

GRM N/A

1444 W 28th StreetLos Angeles, CA 90007

2

UNIT MIX

Single 9


Sale Date 6/6/2018

Number of Units 9

Year Built 1923



CAP Rate N/A

GRM N/A


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3903 W 27th StreetLos Angeles, CA 90018

4

UNIT MIX

1 BD/1 BA 8

2 BD/1 BA 2


Sale Date 2/16/2018

Number of Units 10

Year Built 1954



CAP Rate 4.60%

GRM 13.79

1015 Leighton AvenueLos Angeles, CA 90037

UNIT MIX

2 BD/1 BA 12


Sale Date 1/3/2018

Number of Units 12

Year Built 1923



CAP Rate 5.50%

GRM 12.92

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WWW.NEEMAAHADIAN.COM

NEEMA AHADIANSenior Vice President Investments

West Los AngelesOffice 310.909.5444

[email protected] CA BRE# 01346750

MARCUS & MILLICHAPWest Los Angeles

12100 West Olympic BoulevardSuite #350

Los Angeles, CA 90064Main 310.909.5500

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

5350 2 N D AV E N U E, LO S A N G E L E S , C A 90043

5350 2ND AVENUE - LoopNet€¦ · 1922 Gross Square Feet: 6,394 SF Lot Size: 3,577 SF Ownership:...

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