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L O S A N G E L E S , C A 9 0 0 6 1Exclusively Listed By: D E R E K S T E P H E N S & Z A C H A R Y Z A N E L L O

13103 SOUTH BROADWAY

NON-ENDORSEMENT & DISCLAIMER NOTICECONFIDENTIALITY & DISCLAIMERThe 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. © 2019 Marcus & Millichap. All rights reserved.

N O N - E N D O R S E M E N T N O T 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.

A L L P R O P E R T Y S H O W I N G S A R E B Y A P P O I N T M E N T O N L Y.P L E A S E C O N S U L T Y O U R M A R C U S & M I L L I C H A P A G E N T F O R M O R E D E T A I L S .

OFFICES THROUGHOUT THE U.S. AND CANADAwww.marcusmillichap.com

Marcus & Millichap is pleased to present this Exclusive Offering for the sale of 13103 South Broadway, a single-tenant building of approximately 5,586 square feet in the City of Los Angeles, California. The building is situated on approximately 8,050 square feet of industrial zoned land. The subject property was built in 1961 of concrete block construction. This fa-cility has historically enjoyed a very high occupancy level and is currently 100 percent occupied. The interior build-out has been reconfigured to meet the tenant’s operational requirements.

The property is currently leased to LA Hydro, a cannabis cultivation com-pany that has committed to a long-term lease of 5 years. Under the terms of the lease, the Landlord is only responsible for the property taxes and insurance, which makes the tenant solely responsible for the maintenance of the building including the roof, structure, parking, mechanical systems and utilities.

The sale represents a rare opportunity for an investor to acquire a 100 percent occupied single-tenant investment with a growth oriented tenant in the cannabis industry. The State of California has the largest cannabis economy in the world, supported by the state government and populous. LA Hydro currently cultivates and distributes cannabis for their two legal dispensaries in Southern California.

The property is located in a highly desirable area on the southwest corner of South Broadway and West 131st Street, with nearly 200’ of combined frontage. It is approximately one-half mile east of the 110 freeway and roughly one mile south of the 110-105 freeway interchange. The property resides within the 90061 zip code where industrial vacancy rates are at an all-time low of 2.9 percent.

E X E C U T I V E S U M M A R Y 3

EXECUTIVE SUMMARY

TABLE OF

CONTENTS

01 02 03OFFERING SUMMARY MARKET COMPARABLES MARKET OVERVIEW

13103 South BroadwayLOS ANGELES , CA 90061

SECTION 1 OFFERING SUMMARY

1 3 1 0 3 S O U T H B R O A D W A Y

» Rare Single-Tenant Industrial Investment Opportunity

» Attractive Year 1 CAP Rate of 7.94%

» Brand New 5-Year Personally Guaranteed Lease

» 3% Rental Increases Annually

» Lessor Only Responsible for Property Tax & Insurance

ABOUT THE INVESTMENTTHE OFFERING

Purchase Price $1,500,000

Price/SF $268.53

Cap Rate 7.94%

Net Operating Income $119,098

Monthly Rent/SF $2.15

» Strong Location Fundamentals with Very Low Industrial Vacancy Rates at 2.9%

» Hard Corner Location with Substantial Frontage

» Immediate Access to the 110 Freeway

» Approximately 1 Mile to the 110-105 Freeway Interchange

» Proximity to Downtown Los Angeles, LAX, and the Ports of Los Angeles and Long Beach

ABOUT THE LOCATIONCURRENT INCOME STATEMENT

Gross Rents Collected $144,000

Real Estate Taxes (1) ($19,995)

Property Insurance (2) ($4,907)

Net Operating Income $119,098

(1) 1.29% of the purchase price(2) Actual expense for an extended policy with Farmers Insurance.

INVESTMENT HIGHLIGHTS

O F F E R I N G S U M M A R Y6

RENT SCHEDULE

Lease Year Annual Rent Monthly Rent Rent Escalation

1 $144,000 $12,000

2 $148,320 $12,360 3%

3 $152,770 $12,731 3%

4 $157,353 $13,113 3%

5 $162,073 $13,506 3%

LEASE SUMMARY

Property Type Industrial Warehouse

Tenant LA Hydro

Guarantor Personal Guarantee

Lease Commencement 4/15/2019

Lease Expiration 4/14/2024

Lease Term Remaining 5 Years

Lease Type Modified Gross (MG)

Current Annual Rent $144,000

Rental Increases 3%

LEASE STRUCTURE - MODIFIED GROSS

Roof Tenant

Structure Tenant

HVAC Tenant

Common Area Maintenance Tenant

Parking Tenant

Utilities Tenant

Property Taxes Landlord

Property Insurance Landlord

LEASE SUMMARY

O F F E R I N G S U M M A R Y 7

1 3 1 0 3 S O U T H B R O A D W A Y

PROPERTY DESCRIPTION

Construction/MechanicalYear Built 1961

Construction Type Concrete Block

Number of Floors 1

Mezzanine None

Clear Height 14’ - 15’

Sprinklers None

Ground Level Doors (2)10’w x 10’h

Parking Surface Paved Asphalt

Power 1200a

PROPERTY ADDRESS13103 South Broadway Los Angeles, CA 90061 APN: 6132-011-017

Site DescriptionType of Ownership Fee Simple

Rentable Square Feet 5,586

Lot Size Square Feet 8,050

Floor Area Ratio (FAR) 0.69

Zoning M1 1/2-B1

Landscaping None

Parking Spaces 4

Parking Ratio 0.71/1000 SF

Street Frontage 64’ on South Broadway, 127’ on West 131st Street

Cross Street West 131st Street


PARCEL MAP

N


1 3 1 0 3 S O U T H B R O A D W A Y

LOCAL MAP

N

SUBJECT PROPERTY



ASubject Property to DTLA10.2 Miles Driving Distance

BSubject Property to 110 Freeway0.9 Miles Driving Distance

CSubject Property to LAX8.2 Miles Driving Distance

DSubject Property to Port of Los Angeles15.1 Miles Driving Distance

REGIONAL MAP

N

SUBJECT PROPERTY


A

C

10.2 Miles

8.2 Miles

15.1 MilesD

B0.9 Miles



SECTION 2MARKET COMPARABLES

1 3 1 0 3 S O U T H B R O A D W A Y

N

SUBJECT PROPERTY


4

6 3

5

SALES COMPARABLES13103 SOUTH BROADWAY

1 2990 MARTIN LUTHER KING JR BOULEVARD

2 5415 MAYWOOD AVE

3 13017 SOUTH BROADWAY

4 422 WEST ROSECRANS AVENUE

5 1522 WEST 135TH STREET

6 1735-1739 WEST 132ND STREET

1

2

M A R K E T C O M P A R A B L E S14

380.00

360.00

340.00

320.00

300.00

280.00

260.00

240.00

220.00

200.00

180.00


Average Price Per SF


422 WEST ROSECRANS

AVENUE

1522 WEST 135TH STREET

Avg $278.86

SALES COMPARABLES

2990 MARTIN LUTHER KING JR

BOULEVARD

5415 MAYWOOD AVENUE

1735-1739 WEST 132ND STREET

M A R K E T C O M P A R A B L E S 15

1 3 1 0 3 S O U T H B R O A D W A Y

SALES COMPARABLES

1 3 1 0 3 S O U T H B R O A D W A Y Los Angeles, CA 90061

Proposed List Price $1,500,000

Rentable SF 5,586

Price/Rentable SF $268.53

CAP Rate 7.94%

Year Built 1961

Lot Size SF 8,050

1 2 9 9 0 M A R T I N L U T H E R K I N G J R B O U L E VA R D Lynwood, CA 90262

Sale Price $3,000,000

COE 1/2/2018

Rentable SF 8,304


Year Built 1950

Lot Size SF 32,405

2 5 4 1 5 M A Y W O O D A V E N U E Maywood, CA 90270


COE 2/22/2018

Rentable SF 18,104


Year Built 1989

Lot Size SF 30,492

Note: Cannabis cultivation facility. Note: Cannabis cultivation facility.


3 1 3 0 1 7 S O U T H B R O A D W A Y Los Angeles, CA 90061


COE 8/10/2018

Rentable SF 8,000


Year Built 1965

Lot Size SF 13,939

4


COE 11/13/2018

Rentable SF 9,350


Year Built 1968

Lot Size SF 18,295

4 2 2 W E S T R O S E C R A N S A V E N U E Gardena, CA 90248

5 1 5 2 2 W E S T 1 3 5 T H S T R E E T Gardena, CA 90249


COE 4/12/2018

Rentable SF 6,150


Year Built 1957

Lot Size SF 14,000


1 3 1 0 3 S O U T H B R O A D W A Y

SALES COMPARABLES

6 1 73 5 - 1 73 9 W E ST 1 3 2 N D ST R E E T Gardena, CA 90249


COE 3/4/2019

Rentable SF 16,200


Year Built 1973

Lot Size SF 39,640


1

2

SUBJECT PROPERTY


3

ON MARKET COMPARABLES13103 SOUTH BROADWAY

1 416 WEST EL SEGUNDO BOULEVARD




1 3 1 0 3 S O U T H B R O A D W A Y

300.00

290.00

280.00

270.00

260.00

250.00

240.00

230.00

220.00

210.00

200.00

Average Price Per SF

Avg $265.33

ON MARKET COMPARABLES


416 WEST EL SEGUNDO

BOULEVARD




ON MARKET COMPARABLES

2 3 3 2 W E S T 1 3 0 T H S T R E E TLos Angeles, CA 90061


On Market 83 Days

Rentable SF 5,000


Year Built 1967

Lot Size SF 7,405

1 3 1 0 3 S O U T H B R O A D W A Y Los Angeles, CA 90061

Proposed List Price $1,500,000

Rentable SF 5,586


CAP Rate 7.94%

Year Built 1961

Lot Size SF 8,050

1 4 1 6 W E S T E L S E G U N D O B O U L E V A R DLos Angeles, CA 90061


On Market 35 Days

Rentable SF 8,240


Year Built 1966

Lot Size SF 13,068


1 3 1 0 3 S O U T H B R O A D W A Y

3 1 6 2 5 W E S T 1 4 4 T H S T R E E TGardena, CA 90247


On Market 203 Days

Rentable SF 7,700


Year Built 1962

Lot Size SF 16,988



SECTION 3MARKET OVERVIEW

1 3 1 0 3 S O U T H B R O A D W A Y

M A R K E T O V E R V I E W24

SIZABLE MANUFACTURING SECTOR, MINIMAL VACANT STOCK INTENSIFY BUYER COMPETITION

Consistent job growth limits space availability. Los Angeles County is home to the nation’s second-largest manufacturing workforce thanks to a diverse base of expanding manufacturers, including a collection of tech producers and a consortium of logistics firms. Growth by these companies supported strong market demand for industrial space over the past four years. The result was robust leasing velocity that sustained the metro’s vacancy rate at an extremely low level amid the delivery of more than 19 million square feet of new supply. Industrial users’ ability to quickly occupy speculative buildings and recently vacated properties over an extended span should warrant another stretch of elevated devel-opment moving forward, yet construction will slow in 2019 when com-pared to the previous two years. Warehouse projects account for most of the 2.6 million square feet of space slated for finalization this year, with roughly half of the supply concentrated in the Santa Clarita and San Gabriel valleys. This tempering of deliveries teamed with a positive outlook for manufacturing job creation maintains stout market demand for space, holding vacancy below 3 percent for a fifth consecutive year.

Strong NOI growth heightens competition, value of strategically located buildings and higher-yielding properties. Unwavering investor demand for industrial assets continues to drive up property values throughout the market. Locally based and out-of-state institutional investors that deploy more than $20 million per deal actively pursue midsized to larg-er warehouses at mid-4 percent minimum returns. Buyers eyeing post-2000-built properties scan the San Gabriel Valley, while those willing to accept higher prices comb South Bay markets. Industrial-heavy locales near Interstate 5 provide yields in the 5 percent range for Class B and C manufacturing facilities.

FIRST HALF 2019

NIPI Rank1, no change

The lowest vacancy rate among metros in the Index helps Los Angeles maintain the top spot in the 2019 NIPI.

Employmentup 1.1%

Organizations expand payrolls by 50,000 workers in 2019 after the metro’s employment base grew by 1.2 percent last year.

Construction2.6 million sq. ft.

Delivery volume declines by more than 2.4 million square feet on a year-over-year basis. The city of Long Beach welcomes four properties totaling nearly 400,000 square feet.

Vacancyup 20 bps

The county’s vacancy rate adjusts marginally this year, reaching 2.7 percent. In 2018, an increase of 50 basis points was noted.

Rentup 3.5%

The average asking rent climbs to $11.64 per square foot, a moderate uptick following a five-year span of siz-able gains.

Investment Distribution centers south of Downtown Los Angeles near Interstate 5 remain an attractive investment play for out-of-state buyers seeking centrally located prop-erties at $20 million-plus. These larger, pre-1990s-built assets are typically available at pricing below the met-ro’s average.

2019 MARKET FORECAST

LOS ANGELES METRO AREA INDUSTRIAL OVERVIEW

M A R K E T O V E R V I E W 25

ASKING RENT AND VACANCY TRENDS

Vaca

ncy

Rate

09 10 11 12 13 14 15 16 17 18 19*

8%

6%

4%

2%

0%

16%

8%

0%

-8%

-16%

Y-O-Y Rent Growth

PRICE PER SQUARE FOOT TRENDS

Year

-ove

r-Ye

ar A

ppre

ciatio

n

08 09 10 11 12 13 14 15 16 17 18

24%

12%

0%

-12%

-24%

EMPLOYMENT VS. RETAIL SALES TRENDS

Retail Sales GrowthEmployment Growth

09 10 11 12 13 14 15 16 17 18 19*

Year

-ove

r-Ye

ar C

hang

e

10%

5%

0%

-5%

-10%

* Forecast Sources: CoStar Group, Inc.; Real Capital Analytics

INDUSTRIAL COMPLETIONS

AbsorptionCompletions

09 10 11 12 13 14 15 16 17 18 19*

Squa

re F

eet (

thou

sand

s)

15,000

10,000

5,000

0

-5,000

Vacancy

Year-overYear Rent Change

SUBMARKET TRENDS

EXCLUSIVELY LISTED BY:

D E R E K S T E P H E N SNational Office and Industrial Properties Group

(213)943-1857 [email protected]

License: CA 01941251

Z A C H A R Y Z A N E L L ONational Office and Industrial Properties Group

(213)943-1842 [email protected]

License: CA 02076813

Marcus & Millichap515 South Flower Street

Suite 500Los Angeles, CA 90071

L O S A N G E L E S , C A 9 0 0 6 1


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