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Exclusively Listed By: Kelly Morgan 310-836-3638 [email protected] CA BRE# 01898026

KELLY MORGANCOMMERCIAL GROUP

Tarzana Villas 18543 - 18545 Clark St Tarzana CA 91356




CONFIDENTIALITY AGREEMENT 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 KW Commercial and should not be made available to any other person or entity without the written consent of KW Commercial. 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. KW Commercial has not made any investigation, and makes no warranty or representation, with respect to the income, expenses or future value for the subject property, the future projected financial performance of the property, the size and square footage of the property and the property’s improvements.

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, KW Commercial has not verified, and will not verify, any of the information contained herein, nor has KW Commercial conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. The future income and expenses of the Property may vary significantly during Buyer’s ownership. Buyer shall rely on Buyer’s expertise to project the future Income and expense of the Property. All potential buyers must take appropriate measures to verify all of the information set forth herein. Buyer must verify the information and bears all risk for any inaccuracies.

NON-ENDORSEMENT NOTICEKW Commercial is not affiliated with, sponsored by, or endorsed by any entity 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 KW Commercial, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of KW Commercial, and is solely included for the purpose of providing location information about this listing to prospective customers.

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TABLE OF CONTENTSInvestment Highlights 4-5

Property Overview 6-13

Submarket Tarzana 14-15

Community Overview 16

Proximate Amenities 17-19

Transportation 20

Major Developments 21-22

Los Angeles Market Overview 23-28

Comparables 29

Rental Comparables 30-36

Sales Comparables 37-39

Financials 40

Financial Analysis 41-45

Agent Contact 46

3



INVESTMENT HIGHLIGHTSINVESTMENT HIGHLIGHTS• Immediate Upside – A True Value Add Opportunity• Rents for upgraded units in the area are approx. 35% higher than the average rent at the property.• There are 57% two bedroom units with an average size of 1,000 square feet featuring central air conditioning.• Within Walking Distance of Ventura Blvd. and the Tarzana Crossing Transit Oriented Development or TOD which is similar to developments that have achieved rents 30% above market in other areas.• Easy access to the trendy shops, restaurants and entertainment venues along Ventura Blvd.• Rents have gone up faster in Tarzana than any neighborhood South of the 101 recently increasing 18% year over year.• Major employment centers are located in Tarzana including the rapidly growing medical industry fueled by the Providence TarzanaMedical Center.

4




INVESTMENT HIGHLIGHTS

5

Property Tarzana Villas

Address 18543 -18545 Clark St

Number of units 29 Units*

Approx. Bldg. 29,884 sq. ft.

Approx. Lot Size 36,708 sq. ft.

Year Built 1962

Parking 28

PRICING

Purchase Price $8,595,000

Price Per Unit $296,379*

Price Per Gross SF $288

GRM 15.46

Cap Rate 3.5%

Market GRM 11.77

Market CAP Rate 5.5%

Projected Return Based on 7 Year Analysis 12.3%

*Unit count and price per unit includes 1 non-conforming unit.




PROPERTY OVERVIEW

6




PROPERTY OVERVIEW

Unit Mix Current Rents Market Rents1 (S) $849 $1,09510 (1+1) $1,338 $1,69516 (2+2) $1,701 $2,2951 (3+2) $2,100 $2,6951 (3+3) $2,100 $2,695Scheduled Rent $45,639 $60,155Laundry $700 $700Gross Income $46,339 $60,855 Rental Upside 35%Approximate Building SF 29,884Average unit size 1,000 SFAverage Current Rent PSF $1.53Average Market Rent PSF $2.01Current Occupancy 100%

Central Air ConditioningBrand New Cooling Tower System, Compressor and Chiller MotorSecure Building and Parking14 Security Camera SystemCommon Area Upgraded to LED light system on timerLarge Size Storage Which Can be RentedBeautiful CourtyardLarge Units averaging over 1,000 Square FeetExcellent Walk Score of 75Owner Collects 100% of Laundry Income

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VALUE ADD OPPORTUNITY• There is a high potential for Value Add to this property with the increase of rents over time for both one and two bedrooms 28% - 40%. To achieve these rents a new owner will need to upgrade the unit interiors to include upgraded flooring, new kitchens, new bathrooms, new paint and modern lighting – estimated to cost between $8-12K/unit. The common areas will also need to be updated to a more modern look/feel – think Viceroy Hotel and Kelly Wearstler. This will attract the young, professional crowd who are looking for a modern, well located place to call their home. Once the rents are at these levels the GSI will increase by 32% to over $730,000 per year. • Tarzana Villas offers a great opportunity for buyers to capitalize on positive market trends and significant rental upside. Other projects in the Tarzana submarket have seen monumental results in value-added opportunity when applying recommended interior specs such as upgrades to the kitchens, bathrooms, flooring and paint scheme of each apartment home. Additionally, implementing a RUBS program to recapture expense burdens currently covered by the landlord will garner an even broader revenue scope.

REVENUE ENHANCEMENT OPPORTUNITY Tarzana Villas at Clark St offers floor plans with spacious layouts, a most coveted feature in today’s competitive submarket. In this tight rental market, the right owner stands to capitalize on strong market fundamentals with the aforementioned upgrades to the unit interiors and building exteriors. Rental premiums could potentially exceed more than $600 per unit per month with a merely estimated $8-12k interior unit renovation budget. This property could see greatly enhanced revenue and significant post-renovation returns.

FURTHER REVENUE ENHANCEMENT OPPORTUNITY The current owners have well maintained the property but a savvy investor has the unique opportunity to reposition this sizable asset into a premier property in Tarzana. Neighboring properties have already undergone the outlined changes and have immediately begun to experience impressive gains in revenue and the active development of luxury units in the area attest to the ability to achieve high rents. Further additions to property amenities could also result in reclaiming measurable operating expenses.

8




RECOMMENDED EXTERIOR UPGRADES

9




SUBMARKET

10

TARZANAVILLAS

101 VENTURA FREEWAY

GELSEN’S MARKET

CLARK STREET

RESEDA BLVDTARZANA SQUARESHOPPING CENTER

TARZANA HEALTH ANDREHABILITATION PROVIDENCE

TARZANA MEDICALCENTER

PLANNED TRANSIT ORIENTED DEVELOPMENT (TOD)TARZANA CROSSING



EMPLOYER PROXIMITY (CONT.)including the recently completed Ventana Medical Plaza, a $50-million 112,000-square-foot Class A facility billed as the largest and most integrated cancer treatment center in the San Fernando Valley. The 60,345 square foot Tarzana Professional Center is now being trans-formed into a major medical campus. The San Fernando Valley is already one of the largest employment regions in the Greater Los Angeles Area. It is home to numerous large employers, including some 50,000 businesses employing over 700,000 workers, the most well-known of which are involved in motion pictures, recording, television production, and medical, as well as biotech industries. ATTRACTIVE DEMOGRAPHICS There are 35,380 residents within one mile of the Tarzana Villas which grew by 8.43% or 2,752 additional residence since 2010. 57% of those residents reside in rental units even though the average household income is $75,263. This is likely due to the current trend of high income earners and growing millennial population choosing to rent or it could be driven by the fact that Tarzana has very high home values estimated to be $836,000 compared to the average or $537,000 for Los Angeles County. The medium age is 41 years old and 40.3% of residents 25 and older have a four-year degree which is high for the city of Los Angeles and high for the county.TARZANA FACTS AND FIGURESSize: 8.79 Square MilesResidents within 1 Mile: 35,380Average household income is $75,263Median Age 41

SUBMARKETTARZANA SUBMARKET The Tarzana submarket has demonstrated strong rental demand characteristics with substantial year-over-year effective rent growth rates that reached as high as of 18% in the first quarter of 2014 and have continued to climb logging an 8.5% annualized increase by the end of 2016. This was almost double the Los Angeles effective rent growth rate which was still a healthy 4.6%. Tarzana vacancy rates averaged only 2% in 2016 slightly dropping below the five average of 2.2%. These are stronger demand characteristics than the 788,305-unit Los Angeles multifamily market that remains at the nation’s premier level, with low vacancy rates and high rents. And Los Angeles had substantial rental gains with asking rents increasing by 4.6% in 2016. Meanwhile Supply is tight with vacancy rates at only 3.3%. The sprawling Los Angeles County remains a national market, drawing renters from a wide variety of income levels and, for that matter, a variety of geographical areas. Tarzana is one of the strongest submarkets in Los Angeles. Rent comps near the Clark St and Reseda Intersection of Tarzana for upgraded buildings average $1,698 per month for the one bedroom units (renting from $1,600 - $1,895) and $2,300 for the two bedroom units (renting from $2,000 - $2,500).Vacancy Rate: 2% Effective rent growth: 8.5%EMPLOYER PROXIMITY Tarzana is rapidly becoming a major medical center for the entire San Fernando Valley. Providence Tarzana Medical Center is planning a massive $624 million expansion that will create 1,000 jobs. Their expansion has attracted a plethora of medical facilities and offices

11


Walk score gave the Tarzana Villas a score of 75 ‘Very Walkable’.

Located only one block from Ventura Blvd called the “Boulevard That

Has It All” due to being the world's longest avenue of contiguous

businesses, residen can walk to almost anything including a vast

number of coffee shops, restaurants, boutique specialty sh ps, grocery

stores, retail and entertainment venues. The Providence Tarzana

Medical Center, Ventana Medical Plaza, Tarzana Professional Center

and many other office buildings are also within walking distance as is

the Orange Line’s Reseda/Oxnard transit stop. Professionals living at

the Tarzana Villas could literally go months without having to move

their car.

A testament to Tarzana’s prosperous trend is the recently completed

Tarzana Village Walk a 950-foot pedestrian promenade lined with retail,

restaurants, and condominium units. The eclectic mix of residential and

commercial tenants opening onto beautifully landscaped gathering

spaces creates a sense of place for the community and provides for an

exciting and diverse urban experience. The numerous water features,

street trees, and outdoor furniture create and inspire a pedestrian

friendly environment that has become a centerpiece in the City of

Tarzana.

This perfect lifestyle environment has resulted in Tarzana enjoying

record-low vacancies in recent years, helping to spur some of the

strongest rental gains in the Los Angeles metro. Meanwhile, the corner

of Tarzana north of Ventura Boulevard — where its apartment properties

are sequestered off, away from its higher-end homes — has seen an

uptick in investment and development interest in recent months.




COMMUNITY OVERVIEW Tarzana is a very affluent neighborhood which has long served as a hide-

away for celebrities (Chris Brown, Selena Gomez, Khloe Kardashian,

Lamar Odom, etc.) and is one of the Valley’s most desirable enclaves,

having a rare mix of affluence and density with household incomes

exceeding $150,000. The Tarzana/Encino/ Woodland Hills area represents

more of what people think of when they think of L.A. living: great sushi,

Gelson’s Markets, Whole Foods, best in medical care, recreation, and

entertainment.

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PROXIMATE AMENITIES SHOPPING

13




PROXIMATE AMENITIES RESTAURANTS

14




GREEN SPACE

MULTIPLE RECREATION ATTRACTIONS• Topanga State Park

• El Caballero Country Club

• Braemar Country Club

• Balboa Golf Course

• Woodley Lake Golf Course

• Encino Golf Course

• Sepulveda Basin Recreational Area

* Balboa Sport Center

* Hjelte Sports Center

* Sepulveda Garden Center

* Sherman Oaks Castle Park

15


TARZANAVILLAS

EXCELLENT TRANSPORTATION OPTIONS • The Tarzana Villas is within walking distance tothe Orange Line transit stop providing residentsaccess across the San Fernando Valley withspeedy connections to The Warner Center,where a large percentage of professionalemployers are located and the North HollywoodStation, which offers speedy transfer service toDowntown Los Angeles and other major areas inthe city. With the passing of Measure M the cityis planning the Sepulveda Pass Transit Line thatwill connect residents with the West Side, UCLAand LAX.• The Urban Displacement Project found thatareas around transit stations are changing in thedirection of neighborhood upscaling andgentrification.• Transit neighborhoods are associated morewith higher increases in college educated, higherincome households and greater increases in rent.• Previous studies across the country have notedhow new public transit stops drive up nearbyrental prices – we’re talkin’ 25-67%!



TRANSPORTATION

16




PLANNED MAJOR DEVELOPMENTS• The Tarzana Neighborhood Council plans to build a TRANSIT-ORIENTED DEVELOPMENT(TOD) Just North of the Tarzana Villas called TARZANA CROSSING. It would be what somecall a transit village or an urban village - with a mixed use of shops, restaurants, offices andapartments or condos near the transit station.• CoStar analysts found that these developments fetch higher rent premiums and tend tohave higher occupancies than non-TOD properties.• SCAG members agreed to increase the quantity of housing near transit by 60% and set astrategy that by 2035, 87% of all Southern California jobs will be located within a half mileof some form of public transportation.

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SUBJECTPROPERTY18543-45CLARK ST

PLANNEDDEVELOPMENT9,000 SQ FT OF

RETAIL AND160 - 180

LUXURY UNITS

VENTURA BLVDVILLAGE WALK

AT TARZANA RETAIL& 56 UNITS



PLANNED MAJOR DEVELOPMENTS

TARZANA IS GENTRIFYING• Next door to the East of the Tarzana

Villas, owners are working to permit a

4-story property with up to 180 luxury

apartment units and 9,000 square feet

of high end retail. It is anticipated that

units will rent at $2.75 per square foot

and will take between 18 to 20

months to complete.

• Around the corner Sinanian

Development Inc. of Tarzana

purchased two parcels fully entitled

for 72 multifamily units adjacent to

Village Walk at Tarzana, which spans

more than a block of Ventura

Boulevard near Reseda Boulevard.

The parcel will feature 15 two-story

luxury townhomes above a two-level

garage and podium deck shared with

the retail center. The second 1.3-acre

parcel on North Yolanda Avenue

behind a smaller section of Village

Walk will consist of 19 townhomes

and 38 condominiums over one

subterranean level of parking. The

units will be about 2,000 square feet,

while the project on Redwing Street

will range from 750-square-foot, one-

bedroom units to a penthouse of

more than 2,100 square feet.

18




MARKET OVERVIEW

19



Tarzana Villas 18543 - 18545 Clark St Tarzana CA 91356 20

Los Angeles Has a Housing Crisis

As presently developed, Los Angeles is at 92 of its total capacity. Population has increased at a fairly steady clip since 1960; simultaneously, the maximum population allowed by the physical space has plummeted due to downzoning (reducing the density allowed). LA had space for 10 million people in 1960 and for just 4.3 million in 2010. Single Family Home Owners opposed to density and frustratingly archaic zoning codes have made it unnecessarily difficult to build densely in Los Angeles, and “single-family homes control 80 percent of L.A.’s residential land while representing a far smaller proportion of the population,”

Population Capacity

Actual Population

10 Million

3.9 Million

3.5 Million2.5 Million

4.3 Million

4.0 Million10 Million

10 Million

2 Million

3 Million

1 Million

4 Million

5 Million

6 Million

7 Million

8 Million

9 Million

92%

25%

1960 1970 1980 1990 2000 2010

60%


HOUSING UNITS

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

382,000

12,000

50,000

Apartments

Needed

Mayor

Garcetti’s

Plan

Increase in

Population

Supplied

in 2015

100,000


MARKET

21

L.A. Needs to Build 382,000 Apartments to Catch Up to Demand

A new report out from the Legislative Analyst's Office

shows that the groundwork for LA's housing shortage

was laid a long time ago, and it's going to be hard work

undoing it.

The number of housing units in town simply isn't keeping

Õ«�Ü�Ì��Ì�i��Õ�LiÀ��v�ÀiÃ�`i�ÌÃ°Č�>ÀÛ>À`¿Ã��Ì�i�ÌiÀ�for Housing Studies reported last month that L.A. needs

382,000 additional apartments to keep up with demand.

+P��/C[QT|'TKE�)CTEGVVK�UCKF�YG�PGGF��PGY�WPKVU�|75%�FGOQITCRJGT�&QYGNN�/[GTU�UCKF�YG�CFFGF��WPKVU�NCUV�[GCT�DWV�ITGY�D[��RGQRNG�

�i>�Ü��i]��Ã�č�}i�iÃ��Õ�ÌÞ��Ã��i>`��}�Ì�i�Ü>Þ��L�growth and business creation. The county added 352,840

��LÃ�LiÌÜii��Óä£ä�>�`�Óä£{]�v�À�>�}À�ÜÌ��À>Ìi��v��°��percent.

Solving the problem may not be possible. The Neighbor-

hood Integrity Initiative, aiming for the March ballot in L.A.,

wants to put a lid on new, large-scale developments. This

citizen initiative will “Preserve neighborhoods by preventing

developers from building as big and dense as they want, no

matter how much this harms the community.”

Sources: Daily News By Kevin Smith, San Gabriel Valley Tribune

*�ÃÌi`\�äxÉÓÈÉ£È]�È\Ó��*��N�1«`>Ìi`\��äxÉÓÈÉÓä£È]��Neighborhood Integrity Initiative http://2preservela.org/plain/

Tarzana Villas�£nx{Î��£nx{x��>À��-Ì�/>Àâ>�>�č��£ÎxÈ


LOS ANGELES RENTS AUG 2011 - AUG 2016

3000

2500

2000

1500

1000

500

0Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16

+20%+7% +4%

+10%+8%

2007 2010 2013 2016

Historical Forecast



MARKET

22

Consequently Los Angeles rents have shot up more than any other US city's … And LA Rents Are Going to 'Soar’The 2016 USC Casden Multifamily Forecast predicts that vacancy rates will "continue their gradual decline" and rents will continue their upward trudge. More specifically, the forecast predicts that in LA County, the average rent will —"soar"— from its 2015 average.

https://www.rentjungle.com/average-rent-in-los-angeles-rent-trends/

Cubed LA By Bianca Barragan APR 12, 2016, Bianca Barragan MAY 17, 2016




MARKET

23

How High Can Rents Go?Rents in Los Angeles Shooting Up Faster Than in San Francisco

San Francisco once again claimed the highest rents statewide.

č�Ó�Li`À��->��À>�V�ÃV��V�ÃÌÃČ$4,730 which is 74% higher than in Los Angeles.

�i>�Ü��i��Ã�č�}i�iÃ�«�>ViÃ�{Ì�Čfor strongest rent increase over last year and has a 2-bedroom price tag of $2,710. Only Long Beach, Anehiem and San Diego had higher rent increases.

Greater Los Angeles' housing stock grew by 8.6 percent since 1996; San Francisco's grew by 12.3 percent.

http://la.curbed.com By Adrian Glick Kudler APR 23, 2014, https://www.apartmentlist.com By Andrew Woo JUNE 01, 2016




MARKET

24

Think Multi-Family Prices Can’t Go Any Higher?

San Francisco ($492,500/unit) was the highest priced multifamily investment market over the last 12 months. Its local economy has been boosted by the expansion of the technology sector, while opposition to new development has limited new supply.

Meanwhile Los Angeles County is leading the way in job growth, business creation >�`��Ã�{Ì�Čv�À�ÃÌÀ��}iÃÌ�Ài�Ì��VÀi>Ãi�behind Long Beach, An h m and San Diego.The Los Angeles County economy >VV�Õ�Ìi`�v�À��i>À�Þ��i��v�vÌ��v�>��LÃ�VÀi>Ìi`��>��v�À��>��>ÃÌ�Þi>À]�«�>V��}��Ì�Ü>Þ�>�i>`��v�iÛiÀÞ��Ì�iÀ�V�Õ�ÌÞ��ÌiÀ�Ã��v�>LÃ��ÕÌi��L�}À�ÜÌ�°�čVV�À`��}�Ì��>�Ài«�ÀÌ�LÞ�Ì�i��°č°��Õ�ÌÞ� V��V��iÛi��«�i�Ì��À«�À>Ì��Ã�č�}i�iÃ�County now has more high-tech sector jobs than any other area in the country, including New York City, San Francisco, >�`�->�Ì>��>À>��Õ�ÌÞ��Ì�i��i>ÀÌ��v�Silicon Valley.In turn, the housing market will continue Ì��À>�«�Õ«]��>Û��}�Ãii��ivÌÞ��VÀi>ÃiÃ��Ài�ÌÃ]��i�Ã>�iÃ]�>�`�«À�ViÃ��ÛiÀ�Ì�i�«>ÃÌ�Þi>À°�




COMPARABLES

25


Tarzana Villas 15843 Clark St (Subject) City Buit Unit Type SF Rent Current S/SF18543 Clark St Tarzana 1962 1+1 845 $1,321 $1.5618543 Clark St Tarzana 1962 2+2 1,109 $1,686 $1.5218543 Clark St Tarzana 1962 3+2 1,500 $2,100 $1.4018543 Clark St Tarzana 1962 3+3 1,540 $2,100 $1.36

1,030 $1,525 $1.48

Rent Comparable One Bedroom City Buit Unit Type SF Rent Current S/SF18645 Hatteras St Tarzana 1973 1+1 605 $1,600 $2.645536 Lindley Ave Encino 2004 1+1 893 $1,890 $2.125501 Newcastle Ave Encino 2010 1+1 847 $1,895 $2.245434 Zelzah Ave Encino 1970 1+1 850 $1,600 $1.88

Average 799 $1,746 $2.19

Rent Comparable Two Bedroom City Buit Unit Type SF Rent Current S/SF18433 Hatteras St Tarzana 1979 2+3 1,411 $2,500 $1.7718600 Clark St Tarzana 1985 2+2 1,200 $2,200 $1.8318739 Hatteras St Tarzana 1981 2+2 1,465 $2,499 $1.715334 Lindley Ave Encino 1970 2+2 1,205 $2,300 $1.915501 Newcastle Ave Encino 2010 2+2 1,266 $2,350 $1.86

Average 1,309 $2,370 $1.81

Rent Comparable Three Bedroom City Buit Unit Type SF Rent Current S/SF18215 Burbank Blvd Tarzana 1989 3+2 1,975 $3,195 $1.625936 Etiwanda Ave Tarzana 1989 3+2 2,150 $3,499 $1.6318144 Killion Tarzana 1964 3+2 1,503 $2,575 $1.715501 Newcastle Ave Encino 2010 3+2 1,570 $2,995 $1.91

Average 1,800 $3,066 $1.70

1,303 $2,394 $1.84

Tarzana Villas Overall Average

Comparable Overall Average



RENT COMPARABLES SUMMARY

26


RENT COMPARABLES - 1 BEDROOM



�� A 18543 Clark St 1962 $1,321

647,1$egarevA

B 18645 Hatteras St 1973 $1,600

C 5536 Lindley Ave 2004 $1,890

D 5501 Newcastle Ave 2010 $1,895

E 5434 Zelzah Ave 1970 $1,600

$1,321

$1,746

$1,600

$1,890 $1,895

$1,600

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

18543 Clark St Average 18645 Hatteras St

5536 Lindley Ave 5501 Newcastle Ave

5434 Zelzah Ave

One Bedroom




Add PhotoA 18543 Clark St

B 18645 Hatteras St

C 5536 Lindley Ave

D 5501 Newcastle Ave

Address City

E 5434 Zelzah Ave





Add Photo A 18543 Clark St 1962 $1,686

Average $2,370

B 18433 Hatteras St 1979 $2,500

C 18600 Clark St 1985 $2,200

D 18739 Hatteras St 1981 $2,499

E 5334 Lindley Ave 1970 $2,300

F 5501 Newcastle Ave 2010 $2,350

$1,686

$2,370$2,500

$2,200

$2,499$2,300 $2,350

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

18543 Clark St Average 18433HaƩeras St

18600 Clark St 18739HaƩeras St

5334 LindleyAve

5501Newcastle

Ave

Two Bedroom




Add Photo A 18543 Clark St

B 18433 Hatteras St

C 18600 Clark St

D 18739 Hatteras St

E 5334 Lindley Ave

F 5501 Newcastle Ave

30






Add Photo A 18543 Clark St 1962 $2,100

Average $3,066

B 18215 Burbank Blvd 1989 $3,195

C 5936 Etiwanda Ave 1989 $3,499

D 18144 Killion 1964 $2,575

E 5501 Newcastle Ave 2010 $2,995

$2,100

$3,066$3,195

$3,499

$2,575

$2,995

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

18543 Clark St Average 18215 BurbankBlvd

5936 EƟwandaAve

18144 Killion 5501 NewcastleAve

Three Bedroom





Add Photo A 18543 Clark St

B 18215 Burbank Blvd

C 5936 Etiwanda Ave

D 18144 Killion

E 5501 Newcastle Ave



Address Zip Year Bldg SF Units Sale Date Sale Price GRM Cap $/SF $/Unit Unit Mix

A18543-45 Clark St Tarzana 91356

91356 1962 29,884 29 $8,997,000 16.3 3.4 $301 $310,2411 (SNC) 10 (1+1) 16 (2+2) 1

(3+2) 1 (3+3)

B5911 Reseda Blvd Tarzana 91356

91356 1963 46,548 48 9/15/2016 $11,000,000 11.7 4.9 $236 $229,167 48 (3+2)

C18553-18563 Clark St Tarzana 91356

91356 1960 44,609 33 11/8/2016 $12,075,000 14.4 4.1 $271 $251,563 11 (2 + 1.5) 9 (2 + 2) 13 (3+2)

D15158 Dickens St Sherman Oaks 91403

91403 1941 6,809 11 12/2/2016 $3,300,000 17.2 3.1 $513 $317,273 5 (S) 8 (1+1)

E17620 Burbank Blvd Encino 91316

91316 1958 8,782 10 6/7/2016 $1,990,000 17.9 2.3 $227 $199,000 10 (S)

F18000 Burbank Blvd Encino 91316

91316 1963 7,005 7 4/21/2016 $1,850,000 18.0 2.6 $264 $264,286 4 (1+1) 2 (2+1.5) 1 (3+2.5)



SOLD COMPARABLES

33


A 18543-45 Clark St Tarzana 91356 14,290 16 $3,200,000 14.2 3.9 $224 $200,000

B 5911 Reseda Blvd Tarzana 91356 8,222 13 6/14/16 $2,125,000 13.2 4.3 $258 $163,462

C 18553-63 Clark St Tarzana 91356 5,703 8 6/1/16 $1,100,000 13.5 4.4 $193 $137,500

D 15158 Dickens St Sherman Oaks 91403 10,728 12 11/1/16 $2,400,000 13.6 4.1 $224 $200,000

E 17620 Burbank Blvd Encino 91316 4,855 6 8/30/16 $1,215,000 13.7 4.6 $250 $202,500

F 18000 Burbank Blvd Encino 91316 57,000 57 9/18/16 $13,625,000 14.0 4.5 $239 $239,035

C A

B

D

EF

F

34



SOLD COMPARABLES


$227 $236$264 $271 $288

$513

$0

$100

$200

$300

$400

$500

$600

17620 Burbank

5911Reseda

19236Bryant19236Bryant

18000Burbank

18553-63Clark

18543-45Clark

15158Dickens St

8809Etiwanda

$199,000$229,167

$251,563 $264,286$317,273

$296,379

$0

$100,000

$200,000

$300,000

$400,000

$500,000

11.7

14.4

15.46

17.217.9 18.0

10.011.012.013.014.015.016.017.018.019.0

2.32.6

3.13.5

4.1

4.9

1.0

2.0

3.0

4.0

5.0

18553-63Clark

15158Dickens

5911Reseda

18543-45Clark

18553-63Clark

18553-63Clark

15158Dickens St

17620Burbank

18000Burbank

17620 Burbank

18000Burbank

15158Dickens

18000Burbank

5911Reseda

18543-45Clark

5911Reseda

18543-45Clark

17620Burbank

PRICE / SQ. FT. PRICE / UNIT

CAP RATEGRM



SOLD COMPARABLES

35




FINANCIALS

36

37




PROPERTY SUMMARYProperty Address 18543-45 Clark St

Number of units 29 Units *

Bldg. SF 29,884

Lot Size 36,708

Year Built 1962

Parking 28

Pricing

Purchase Price $8,595,000

Price Per Unit $296,379*

Price Per Gross SF $288

GRM After Lease Up 15.46

Cap Rate After Lease Up 3.5%

Market GRM 11.77

Market CAP Rate 5.5%

Projected Return Based on 7 Year Analysis 7 Year Average Annual Return 12.3%

Proposed Financing Once Fully Leased Down Payment $4,339,572

Loan Proceeds $4,255,428**

Loan to Value 49.5%

Interest Rate 4.05%

Term 5 YR Fixed

*Unit count and price per unit includes 1 non-conforming unit**Must assume loan


No. of Units

Bdrms/ Baths

Approx Sq. Ftg.

Monthly Rent/Unit ($)

Monthly Income ($)

Monthly Rent/Unit ($)

Monthly Income ($)

1 S 652 849$ 849$ 1,095$ 1,095$ 10 1+1 845 1,338$ 13,376$ 1,695$ 16,950$ 16 2+2 1,109 1,701$ 27,215$ 2,295$ 36,720$ 1 3+2 1,500 2,100$ 2,100$ 2,695$ 2,695$ 1 3+3 1,540 2,100$ 2,100$ 2,695$ 2,695$

Total Scheduled Rent 45,639$ 60,155$ Laundry 700$ 700$ Other Income Monthly Scheduled Gross Income 46,339$ 60,855$ Annualized Scheduled Gross Income 556,073$ 730,260$

Scheduled Income Current Rents Market Rents



FINANCIAL ANALYSIS

38

Unit Mix - Scheduled Income

* Storage




FINANCIAL ANALYSIS

39

8,595,000$

4,339,572$

4,255,428$

4.05 5YR

556,073$ 730,260$

(16,682)$ 3.0% (21,908)$ 3.0%

539,391$ 708,352$

107,438$ 107,438$

13,448$ 13,448$

47,346$ 47,346$

2,400$ 2,400$

2,160$ 2,160$

22,243$ 29,210$

17,400$ 17,400$

11,600$ 11,600$

13,775$ 13,775$

237,810$ 42.8% 244,777$ 33.5%

301,581$ 463,575$

(245,267)$ (245,267)$

56,314$ 1.3% 218,308$ 5.0%

63,831$ 63,831$

120,145$ 2.8% 282,139$ 6.5%

Principal Reduction

Total Return

Misc/Reserves

Maint/Repairs

Total Expenses

Net Operating Income

Loan Payments

Pre-Tax Cash Flow

On Site Mgr

Terms Interest Only

Scheduled Gross Income

Vacancy Rate Reserve

Gross Operating Income

Expenses

Taxes

Insurance

Utilities

Trash

Landscaping

Off Site Mgr

First Loan Amount

Annualized Operating Data Current Rents Market Rents

Price

Down Payment

Annualized Operating Data - Interest Only Loan


Cash Flow Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7Scheduled Gross Income 556,073$ 583,877$ 613,071$ 643,724$ 675,910$ 709,706$ 745,191$ Vacancy Rate Reserve (16,682)$ (17,516)$ (18,392)$ (19,312)$ (20,277)$ (21,291)$ (22,356)$ Gross Operating Income 539,391$ 566,360$ 594,678$ 624,412$ 655,633$ 688,415$ 722,835$ Estimated Expenses (237,809)$ (244,943)$ (252,292)$ (259,861)$ (267,656)$ (275,686)$ (283,957)$ Net Operating Income 301,582$ 321,417$ 342,387$ 364,552$ 387,977$ 412,729$ 438,879$ Loan 1st TD (245,267)$ (245,267)$ (245,267)$ (245,267)$ (245,267)$ (245,267)$ (245,267)$ Pre-Tax Cash Flow 56,315$ 76,150$ 97,120$ 119,285$ 142,710$ 167,461$ 193,612$ Less Depreciation (218,782)$ (218,782)$ (218,782)$ (218,782)$ (218,782)$ (218,782)$ (218,782)$ Plus Principal Reduction 63,831$ 64,831$ 65,831$ 66,831$ 67,831$ 68,831$ 69,831$ Taxable Income (98,636)$ (77,801)$ (55,831)$ (32,666)$ (8,241)$ 17,511$ 44,661$ Taxes Due (40%) (39,454)$ (31,120)$ (22,332)$ (13,066)$ (3,296)$ 7,004$ 17,864$ After Tax Cash Flow 95,769$ 107,270$ 119,452$ 132,351$ 146,006$ 160,457$ 175,747$ Pre-Tax Cash on Cash Return 1.3% 1.8% 2.2% 2.7% 3.3% 3.9% 4.5%After Tax Cash on Cash Return 2.2% 2.5% 2.8% 3.0% 3.4% 3.7% 4.0%Property Value 8,595,000$ 9,160,300$ 9,757,932$ 10,389,633$ 11,057,234$ 11,762,659$ 12,507,931$

Cash at Sale in Year 7 8,032,387$ Cash Flow Stream (4,339,572)$ 95,769$ 107,270$ 119,452$ 132,351$ 146,006$ 160,457$ Average Annual Return 12.3%

Rent Increase Assumption 5.00%Disposition Cap Rate 3.51%Principal Reduction 467,819.9$



FINANCIAL ANALYSIS

40

Seven Year Cash Flow


Unit Unit MixRent as of Aug 17th

Security Deposit

101 2+2 $1,496.63 $300.00102 2+2 $1,800.00 $2,000.00103 2+2 $1,800.00 $100.00104 1+1 $1,500.00 $500.00105 2+2 $1,750.49 $1,000.00106 2+2 $1,541.71 $775.00107 1+1 $1,287.79 $1,150.00108 2+2 $1,800.00 $0.00109 1+1 $1,273.60 $1,100.00110 2+2 $1,802.50 $0.00111 1+1 $1,442.00 $0.00112 1+1 $1,161.57 $550.00201 2+2 $1,699.50 $2,500.00202 2+2 $1,604.85 $1,390.00203 2+2 $1,644.40 $700.00204 1+1 $1,442.00 $500.00205 2+2 $1,621.37 $3,400.00206 2+2 $1,800.00 $600.00207 1+1 $1,500.00 $0.00208 3+3 $2,100.00 $1,600.00209 1+1 $1,339.00 $700.00210 3+2 Mgr pays $700* $2,100.00 $0.00211 2+2 $1,699.50 $0.00212 2+2 $1,777.01 $800.00213 2+2 $1,750.49 $800.00214 1+1 $1,400.00 $1,350.00215 1+1 $1,029.58 $904.00216 2+2 $1,626.70 $1,450.00

Studio 0+1 N/C $848.72 $800.00$45,639.40 $24,969.00

Other Laundry $700.00Monthly $46,339.40Annually $556,072.78

* On Site Manager does maintenance when needed to oīƐĞƚ the $700 they pay per month



FINANCIAL ANALYSISRent Roll

41

* Storage

Exclusively Listed By: Kelly Morgan 310-836-3638 [email protected] CA BRE# 01898026KW Commercial CA BRE#01499010



READY TO BUY OR SELL?

42

KELLY MORGAN COMMERCIAL 310-836-3638

Contact Us to Learn More about How We Can Help You

Kelly Morgan's strength and expertise in multi-family real estate is a product of his years of experience in investments and production. Kelly spent ten years in the securities business raising millions of dollars for venture capital investments. Kelly held Series 24, 63 and 7 licenses. Prior to the securities business, Kelly spent 13 years producing television commercials and complex photo shoots for major advertising clients such as McDonalds, Hyundai, Proctor & Gamble, Kraft and Pizza Hut. The commercial advertising's complex production process and intricate client management forged skills that are incomparable in managing major real estate transactions.DRE# 01898026

Kelly MorganMulti-Family Investment Advisor

CA BRE# [email protected]

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