2442 laguna $9,250,000 luxury apartment homes€¦ · quartz countertops, vinyl-plank flooring and...

2442 LAGUNALuxury Apartment Homes $9,250,000

TABLE OF CONTENTSProperty Description 4

Pro Forma 8

Condo Sale Comparables 9

Multifamily Sale Comparables 15

Rental Comparables 22

Demographics 28

This confidential Offering Memorandum (this “Memorandum”) is being delivered subject to the terms of the Confi-dentiality Agreement personally or electronically signed by you (the “Confidentiality Agreement”) and constitutes part of the Evaluation Material (as defined in the Confidentiality Agreement). It is being given to you for the sole purpose of evaluating the possible acquisition of 2442 South Coast Hwy, Laguna Beach, CA (the “Property”), and is not to be used for any other purpose or made available to any other party without the prior written consent of the “Owner” or Avison Young (“Broker”).

This Memorandum was prepared by the Broker based on information supplied by the Owner and the Broker. It con-tains selected information about the Property and the real estate market but does not contain all the information necessary to evaluate the acquisition of the Property. The financial projections contained herein (or in any other “Evaluation Material”, including any computer diskettes or files distributed to you via email from Broker or accessi-ble online through Broker’s website) are for general reference only. They are based on assumptions relating to the general economy and local competition, among other factors. Accordingly, actual results may vary materially from such projections. Various documents have been summarized herein to facilitate your review; these summaries are not intended to be a comprehensive statement of the terms or a legal analysis of such documents.

While the information contained in this Memorandum and any other Evaluation Material is believed to be reliable, neither Broker nor Owner guarantees its accuracy or completeness. Because of the foregoing and since the Property will be sold on an “As-Is, Where-Is” basis, a prospective purchaser must make its own independent investigations, projections and conclusions regarding the acquisition of the Property without reliance on this Memorandum or any other Evaluation Material. Although additional Evaluation Material, which may include engineering, environmental or other reports, may be provided to qualified parties as the marketing progresses, prospective purchasers should seek advice from their own attorneys, accountants, and engineering and environmental experts.

Owner expressly reserves the right, at its sole discretion, to reject any offer to purchase the Property or to terminate any negotiations with any party at any time with or without written notice. Owner shall have no legal commitment or obligations to any prospective purchaser unless and until a written purchase and sale agreement has been fully executed, delivered and approved by Owner and any conditions to Owner’s obligations therein have been satisfied or waived. Owner has retained Broker as its exclusive broker and will be responsible for any commission due to Bro-ker in connection with a sale of the Property pursuant to separate agreement. Broker is not authorized to make any representation or agreement on behalf of Owner. Each prospective purchaser will be responsible for any claims for commissions by any other broker in connection with a sale of the Property if such claims arise from acts of such pro-spective purchaser or its broker. This Memorandum is the property of Owner and Broker and may be used only by parties approved by Owner and Broker. No portion of this Memorandum may be copied or otherwise reproduced or disclosed to anyone except as permitted under the Confidentiality Agreement.

Avison Young | Hauser | Multifamily 3

2442 Laguna is a rare fully renovated 8-unit, three-story, ocean view oriented apartment community built in 1964. Located in the city of Laguna Beach, California, situated on .222 acres of land, this property contains one building constructed of wood frame, stucco with stone accents. The roof system is flat built up. 2442 Laguna is comprised of a majority two-bedroom / two-bathroom units, with an average unit size of 1,124 sf.

PROPERTY DESCRIPTION

2442 Laguna features panoramic ocean and Catalina Island views enrich every residence—each offering its own unique character through an array of chic features that vary by unit.

Open floorplans showcase large balconies or expansive rooftop decks, hardwood flooring in a variety of colors, contemporary fireplaces, new windows and glass doors, water- and energy-saving washer and dryer sets, jetted bathtubs, walk-in closets, Noritz instant hot water systems, and state-of-the-art wiring for full HDTV, surround sound, home automation and security systems.

Each unit is centered around a modern chef’s kitchen with island, a variety of solid-surface and stone countertops, Wolf ranges and hoods, Sub-Zero refrigerators, Bosch dishwashers, and sleek new cabinetry. Residents will enjoy easy access to stunningly beautiful beaches and coves, a broad spectrum of restaurants and shops, Laguna’s popular Main Beach, Aliso Beach, parks, hiking trails, and luxe hotels, including Montage Resort & Spa.

4

THE LOCATION2442 Laguna is located just steps to the sand in Laguna Beach, the premier coastal destination in beautiful Southern California. Laguna Beach’s resident population enjoys the atmosphere provided by the sandy beaches, canyons, and seaside hills. Several million visitors are drawn to Laguna Beach for its world-class beaches, art festivals and fine dining.

There are approximately 2,500 licensed businesses in Laguna Beach, with the largest employer being South Coast Medical Center which employees roughly 700 workers. Other major employers include the Montage Resort and Spa, Surf and Sand Hotel, and Las Brisas Restaurant. More than 1,180 businesses are located in zip code 92651, employing approximately 8,750 people. Major Shopping Centers are located within 9 miles of 2442 South Coast Highway and include the Laguna Hills Mall featuring over 100 stores; The Shops at Mission Viejo with over 150 shopping and dining options; and Fashion Island Mall – boasting fine dining, and upscale retailers such as Neiman Marcus, Nordstrom, Bloomingdale’s, and Macy’s.

Nearby colleges include The University of California-Irvine California State University Fullerton / Irvine campus, Orange Coast College, Concordia University at Irvine, and Vanguard University. Local air travel for residents and visitors is provided by John Wayne International Airport, conveniently located just 14 miles north.


• Incredible opportunity to own an ocean-adjacent property in Laguna Beach between the

Montage Resort and Downtown.

HIGHLIGHTS

• Located on Coast Highway overlooking the Pacific Ocean, residents can walk to the beach and enjoy direct whitewater views and spectacular vistas out to Catalina Island

and beyond.

• Coastal view and ocean-adjacent multifamily assets in this location and with this type of high-quality

renovation is very rare.

• Best in class interior renovations including: balconies*, fireplaces*, wolf ranges, backsplashes, stainless-steel appliances, quartz countertops, vinyl-plank flooring and washer/dryers.

*Featured in Select Units

6

THE OPPORTUNITY2442 Laguna is an ideal opportunity for an apartment investor to take advantage of purchasing a rarely available 8-unit multi-family asset in the world class rental market of Laguna Beach California. Located on the gold coast just south of Newport Beach. 2442 Laguna is conveniently located within a short distance to the Montage Resort, Fashion Island, beaches, major entertainment venues, John Wayne airport and the top employment centers of Orange County.

Complete Interior renovations of the apartment homes include: quartz counters in the kitchen and bathrooms, new cabinets, hardwood flooring and new Sub – Zero, Bosch and Wolf appliance packages. The new owner will have the ability to take over operations of a fully renovated turn key rental asset and take advantage of additional rental growth by increasing the income to market rent levels.

Additionally, 2442 Laguna has an active Tenancy in Common Agreement which would allow for a sale to individual property owners, similar in concept to a condominium plan. The “TIC” Agreement would need to be extended, however much of the cost of the agreement structure has been absorbed by the current ownership. The potential ability to resell this property to individual home owners clearly creates additional value.

2442 Laguna is the perfect multi-family investment opportunity with projected long-term market stability, positive rental growth projections, tax and long-term appreciation benefits. Located in one of the top coastal sub-markets in the world, the supply in Laguna Beach is so limited the investor and renter demand will only grow over time.

Avison Young | Hauser | Multifamily

PROFORMA | VALUATIONUnits Type Unit SF Total SF Current

Rent AvgMarket

RentCurrent

Rent/SFMarket

Rent/SF1 2 Bed / 2 Bath #1 1,184 1,184 $5,495 $5,550 $4.64 $4.691 2 Bed / 2 Bath #2 1,147 1,147 $4,650 $5,400 $4.05 $4.711 2 Bed / 2 Bath #3 1,149 1,149 $5,495 $5,550 $4.78 $4.831 2 Bed / 2 Bath #4 1,147 1,147 $4,695 $5,400 $4.09 $4.711 2 Bed / 1 Bath #5 931 931 $3,800 $4,800 $4.08 $5.161 2 Bed / 2 Bath #6 1,149 1,149 $5,395 $5,550 $4.70 $4.831 2 Bed / 2 Bath #7 1,353 1,353 $5,650 $5,900 $4.18 $4.361 2 Bed / 1 Bath #8 931 931 $4,300 $4,800 $4.62 $5.168 1,124 8,991 $4,935 $5,369 $4.39 $4.78

Income Pro Forma Pro Forma

Scheduled Market Rent $473,760 $515,400 Less: Vacancy 4.00% ($18,950) ($20,616)Net Rental Income $454,810 $494,784

Plus: Fee & Storage Income $960 $960 Plus: RUBS Income $0 $2,400 Plus: Other Income & Pet Fees $0 $2,700Total Operating Income (EGI) $455,770 $500,844

Expenses Per UnitAdministrative $113 $900 $900Repairs & Maintenance/Turnover $1,000 $8,000 $8,000Management Fee 2.00% $1,139 $9,115 $10,017Utilities $780 $6,240 $6,240Contracted Services $300 $2,400 $2,400Real Estate Taxes (actual) 1.0164% $11,752 $94,014 $94,014Special Assessments (acutal) $547 $4,375 $4,375Insurance (actual) $723 $5,784 $3,400Replacement Reserve $250 $2,000 $2,000

Total Expenses $132,829 $131,346

Per Unit: $16,604 $16,418Per SF: $14.77 $14.61

Net Operating Income $322,941 $369,498

Less: Debt Service ($197,310) ($197,310)Projected Net Cash Flow $125,631 $172,188

Cash-on-Cash Return (Based on List Price) 2.64% 3.62%Debt Service Coverage 1.64

Cap Rate Analysis Price $/Unit $/Foot Cap Rate Cap RateList Price $9,250,000 $1,156,250 $1,029 3.49% 3.99%

All FinancingTotal

Loan AmountDown

Payment LTVMo.

PaymentDebt

Constant$4,533,000 $4,762,330 49% ($16,442) 4.4%

New First Mortgage (to be originated at purchase)LTV for this loan Amount Interest Rate Amortization Payment Fees I/O Term (yrs)

49% $4,533,000 4.29% 99 ($16,442) 1.00% 4

IMPORTANT INFORMATION & DISCLAIMER: The information contained herein is assumed to be correct and market-supported. Output produced from this model should not be considered an appraisal. Projections are forecasts and are not to be considered fact. The information contained in this file is privileged and confidential; it is intended only for use by Avison Young and their clients. This file may not be reproduced physically or in electronic format without the expressed written consent of Berkadia. CAUTION: Security codes have been included into this file and unauthorized use may render this file useless. Avison Young Employees, affiliates, and contractors are instructed to hard-code this model for reproduction and distribution. Not responsible for errors and omissions. COPYRIGHT 2017, All Rights Reserved. DRAFT REPORT: Privileged & Confidential, For Discussion Purposes Only.

2442 S. COAST HIGHWAYLAGUNA BEACH, CA 92651

Built 1964Price $9,250,000Price/Unit $1,156,250Price/SF $1,028Unit Mix 2 B / 2 B

31755 COAST HIGHWAY #305LAGUNA BEACH, CA

Built 1963Price $2,200,000Price/SF $2,335Unit Mix 2 B / 2 B

1585 SOUTH COAST HIGHWAY #42 LAGUNA BEACH, CA


118 BLUE LAGOONLAGUNA BEACH, CA


1 2 3

S Subject

MARKET POSITIONING - Condominium Sales Comparables

2442 Laguna


31423 COAST HIGHWAY #23LAGUNA BEACH, CA


21785 OCEAN VISTA DRIVE #15LAGUNA BEACH, CA

Built 1975Price $1,080,000Price/SF $719Unit Mix 2 B / 2 B

4 5




Address: City: Year Built: Date Sold: Unit Mix: Square Feet: Sale Price: Price / SQFT:

31755 Coast Highway #305 Laguna Beach 1963 9/14/2018 2 B / 2 B 1,028 $2,200,000 $2,335

1585 South Coast Highway #42 Laguna Beach 1962 9/17/2018 2 B / 2 B 1,155 $2,200,000 $1,991

118 Blue Lagoon Laguna Beach 1964 9/14/2018 2 B / 3 B 1,560 $1,750,000 $1,151

31423 Coast Highway #23 Laguna Beach 1962 Under Contract 2 B / 2 B 1,185 $2,050,000 $1,730

21785 Ocean Vista Drive #15 Laguna Beach 1975 10/19/2018 2 B / 2 B 1,524 $1,080,000 $719

Averages: 1968 2 B / 2 B 1,290 $1,856,000 $1,585

2442 S. Coast Highway Laguna Beach 1964 2 B / 2 B 1,124 $1,156,250 $1,028



$1,080,000

$1,156,250

$1,750,000

$2,050,000

$2,200,000 $2,200,000

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

21785 Ocean Vista #15 2442 S. Coast HWY 118 Blue Lagoon 31423 Coast HWY #23 31755 Coast HWY #305 1585 S. Coast HWY #42

Sale Price

Average: $1,856,000



$719

$1,028

$1,151

$1,730

$1,991

$2,335

$0

$500

$1,000

$1,500

$2,000

$2,500

21785 Ocean Vista#15

2442 S. Coast HWY 118 Blue Lagoon 31423 Coast HWY #23 1585 S. Coast HWY#42

31755 Coast HWY#305

Price/SF

Average: $1,585



SUBJECT PROPERTY 2442 S. COAST HWY

1. 31755 COAST HIGHWAY #305 LAGUNA BEACH

2. 1585 SOUTH COAST HIGHWAY #42 LAGUNA BEACH

3. 118 BLUE LAGOON LAGUNA BEACH

4. 31423 COAST HIGHWAY #23 LAGUNA BEACH

5. 21785 OCEAN VISTA DRIVE #15 LAGUNA BEACH

S

4

5

1

3

2


222 ARCH STREETLAGUNA BEACH, CA

Built 1971Price $10,500,000Price/Unit $807,692Price/SF $853Cap Rate 3.50%

1001 OCEAN AVENUESEAL BEACH, CA


1 2

MARKET POSITIONING | Multifamily Sales Comparables


Built 1964Price $9,250,000Price/Unit $1,156,250Price/SF $1,028Cap Rate 3.49%

S Subject

2442 Laguna


2037 SOUTH COAST HIGHWAYLAGUNA BEACH, CA




3 4




Address: City: Year Built: Date Sold: Units: Square Feet: Sale Price: Price / Unit: Price / SQFT: Cap Rate:

222 Arch Street* Laguna Beach 1971 8/1/2018 13 12,307 $10,500,000 $807,692 $853 3.50%

1001 Ocean Avenue Seal Beach 1956 4/13/2018 7 5,020 $4,900,000 $700,000 $976 3.00%

2037 South Coast Highway Laguna Beach 1969 5/11/2018 14 10,500 $8,400,000 $600,000 $800 3.55%

2324 South Coast Highway Laguna Beach 1956 1/26/2018 5 4,300 $3,885,000 $777,000 $903 3.43%

Averages: 1963 9.75 8,032 $6,921,250 $721,173 $883 3.37%

2442 S. Coast Highway Laguna Beach 1964 8 8,991 $9,250,000 $1,156,250 $1,028 3.49%

*Previously Listed and Sold by Peter Hauser



$600,000.00

$700,000.00

$777,000.00 $807,692.00

$1,156,250.00

$-

$200,000.00

$400,000.00

$600,000.00

$800,000.00

$1,000,000.00

$1,200,000.00

$1,400,000.00

2037 S. Coast HWY 1001 Ocean Avenue 2324 S. Coast HWY 222 Arch Street 2442 S. Coast HWY

Price/Unit

Average: $721,173



$800

$853

$903

$976

$1,028

$0

$200

$400

$600

$800

$1,000

$1,200

2037 S. Coast HWY 222 Arch Street 2324 S. Coast HWY 1001 Ocean Avenue 2442 S. Coast HWY

Price/SF

Average: $883



3.00%

3.43%

3.49% 3.50%

3.55%

2.70%

2.80%

2.90%

3.00%

3.10%

3.20%

3.30%

3.40%

3.50%

3.60%

1001 Ocean Avenue 2324 S. Coast HWY 2442 S. Coast HWY 222 Arch Street 2037 S. Coast HWY

Cap Rate

Average: 3.37%



1. 222 ARCH STREET* LAGUNA BEACH

2. 1001 OCEAN AVENUE SEAL BEACH

3. 2037 SOUTH COAST HIGHWAY LAGUNA BEACH

4. 2324 SOUTH COAST HIGHWAY LAGUNA BEACH

3 4


1

2

S


1021 GAVIOTA DRIVELAGUNA BEACH, CA

2B / 2B Rent $6,500Square Ft 1,000Rent/Sq Ft $6.50

694 N COAST HIGHWAYLAGUNA BEACH, CA


376 CLIFF DRIVELAGUNA BEACH, CA


1 2 3

MARKET POSITIONING | Rent Comparables


2 Bed Rent $4,935Square Ft 1,124Rent/Sq Ft $4.39

(Averages based on all units)

S Subject

2442 Laguna




650 CLIFF DRIVE #ALAGUNA BEACH, CA


4 5


22 BLUE LAGOONLAGUNA BEACH, CA


6

714 CLIFF DRIVELAGUNA BEACH, CA


1549 NORTH COAST HIGHWAYLAGUNA BEACH, CA


7 8



Name: City: 2B/2B Rent SQFT: Rent/SQFT:

1021 Gaviota Drive Laguna Beach $6,500 1,000 $6.50

694 N Coast Highway Laguna Beach $4,950 1,000 $4.95

376 Cliff Drive Laguna Beach $7,500 1,086 $6.91

30802 Coast Highway Laguna Beach $5,995 1,250 $4.80

650 Cliff Drive #A Laguna Beach $4,925 1,200 $4.10

22 Blue Lagoon Laguna Beach $4,950 1,500 $3.30

714 Cliff Drive Laguna Beach $6,000 1,440 $4.17

1549 North Coast Highway Laguna Beach $5,900 1,850 $3.19

Averages: $5,840 1,291 $4.74

2442 S. Coast Highway Laguna Beach $4,935 1,124 $4.39



$4,925.00 $4,935.00 $4,950.00 $4,950.00

$5,900.00 $5,995.00 $6,000.00

$6,500.00

$7,500.00

$0.00

$1,000.00

$2,000.00

$3,000.00

$4,000.00

$5,000.00

$6,000.00

$7,000.00

$8,000.00

650 Cliff Drive#A

2442 S. CoastHWY

694 N CoastHWY

22 Blue Lagoon 1549 N CoastHWY

30802 CoastHWY

714 Cliff Drive 1021 Gaviota Dr 376 Cliff Drive

2B/2B Rent

Average: $5,840



$3.19 $3.30

$4.10 $4.14

$4.39

$4.80 $4.95

$6.50

$6.91

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

1549 N CoastHWY

22 Blue Lagoon 650 Cliff Drive#A

714 Cliff Drive 2442 S. CoastHWY

30802 CoastHWY

694 N CoastHWY

1021 GaviotaDr

376 Cliff Drive

Rent/SF

Average: $4.74



1. 1021 GAVIOTA DRIVE LAGUNA BEACH

2. 694 N COAST HIGHWAY LAGUNA BEACH

3. 376 CLIFF DRIVE LAGUNA BEACH

4. 30802 COAST HIGHWAY LAGUNA BEACH

5. 650 CLIFF DRIVE #A LAGUNA BEACH

6. 22 BLUE LAGOON LAGUNA BEACH

7. 714 CLIFF DRIVE LAGUNA BEACH

8. 1549 N. COAST HIGHWAY LAGUNA BEACH

S

4

5

6


1

7 2

8

3


Laguna Beach By The NumbersPOPULATION TREND

HOUSEHOLD BY INCOME

CURRENT2023

PROJECTIONGROWTH RATE

Total Population 23,925 24,678 3.15%

Total Households 11,179 11,437 2.31%

Median Household Income $122,171 $145,154 18.81%

Median Home Value $1,609,888 $1,635,745 1.61%

*Data & Analytics provided by Esri

22

22

23

23

24

24

25

25

2010 2018 2023*

Thou

sand

s

Population Trend

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

Up to $24K $25K-$49K $50K-$99K $100-$199K $200K +

Thou

sand

s

Household by Income


Orange County By The Numbers

2,500

2,600

2,700

2,800

2,900

3,000

3,100

3,200

3,300

3,400

3,500

2000 2010 2018 2023*

Thou

sand

s

Population TrendPOPULATION TREND

AVERAGE RENTAL RATE

CURRENT2023

PROJECTION GROWTH

RATE

Total Population 3,253,957 3,396,718 4.39%

Total Households 1,060,963 1,103,268 3.99%

Median Household Income $85,323 $100,017 17.22%

Median Home Value $666,984 $708,248 5.83%

*Data & Analytics provided by Esri


Point of Interest Map

S2442 LAGUNA

FASHION ISLAND

Marriott’s Newport Coast Villas

Pelican Hills Golf Course

Newport Beach Marriott Hotel

& Spa

Corona Del Mar Plaza

Crystal Cove Center

Crystal Cove State Park

Laguna Beach High School

John Wayne Airport

The Cottages @ Crystal Cove

Broadway & ForrestMain Beach

Main Beach

-Sushi Laguna-White House-Sky Loft -Marine Room

-Nick’s Laguna-Watermarc-230 Forest Ave-Brussel Bistro

-Driftwood Kitchen-Deck on Laguna

1000 StepsBeach

Ocean Ranch Village

Balboa Pier

Laguna/Mission Viejo Train Station

Main Beach


www.multifamilysc.com

PETER [email protected] License #00856966

MATT [email protected] License #01996149

MASA [email protected] License #02060408

2442 laguna $9,250,000 luxury apartment homes€¦ · quartz countertops, vinyl-plank flooring and...

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