7401 pacific blvd. huntington park, ca 90255€¦ · 1. 7401 pacific blvd. huntington park, ca...
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7401 PACIFIC BLVD.HUNTINGTON PARK, CA 9025590% FINANCING AVAILABLESTRIP CENTER - MTM TENANCY
OFFERING MEMORANDUM | $1,295,000
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This Memorandum (“Offering Memorandum”) has been prepared by Brookfield Partners, Inc. and BRC Advisors, Inc. based on information that was furnished to us by sources we deem to be reliable. No warranty or representation is made to the accuracy thereof; subject to correction of errors, omissions, change of price, prior sale, or withdrawal from market without notice.
This Memorandum is being delivered to a limited number of parties who may be interested in and capable of purchasing the Property. By its acceptance hereof, each recipient agrees that it will not copy, reproduce or distribute to others this Memorandum in whole or in part, at any time, without the prior written consent of Brookfield Partners, Inc. and BRC Advisors, Inc., and it will keep permanently confidential all information contained herein not already public and will use this Confidential Memorandum only for the purpose of evaluating the possible acquisition of the Property.
This Memorandum does not purport to provide a complete or fully accurate summary of the Property or any of the documents related thereto, nor does it purport to be all-inclusive or to contain all of the information, which prospective buyers may need, or desire. All financial projections are based on assumptions relating to the general economy, competition and other factors beyond the control of the Owner and, therefore, are subject to material variation. This Memorandum does not constitute an indication that there has been no change in the business or affairs of the Property or the Owner since the date of preparation of this Memorandum.
This Memorandum is being delivered by Brookfield Partners Inc. and BRC Advisors, Inc., to prospective purchasers with the understanding that all prospective purchasers will conduct their own independent investigation of those matters, which they deem appropriate in order to evaluate this offering. Additional information and an opportunity to inspect the site will be made available to interested and qualified prospective purchasers. Brookfield Partners, Inc. and BRC Advisors, Inc., reserves the right to request the return of any or all of the information enclosed.
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TABLE OF CONTENTS
SECTION ONE 04EXECUTIVE PROFILE
SECTION TWO 12PROPERTY INFORMATION
© 2014 Brookfield Partners, Inc. & BRC Advisors. The information contained in this document has been obtained from sources believed reliable. While Brookfield Partners, Inc. & BRC Advisors does not doubt its accuracy, Brookfield Partners, Inc. & BRC Advisors has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors, which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.
Brookfield Partners, Inc. & BRC Advisors and the Brookfield Partners, Inc. & BRC Advisors logos are service marks of Brookfield Partners, Inc. & BRC Advisors and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.
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SECTION 1 | EXECU
TIVE OVERVIEW
6 - BRC ADVISORS & BROOKFIELD PARTNERS, INC.
INVESTMENT OVERVIEW
Brookfield Partners and BRC Advisors have been retained to exclusively market
a strip center, with an apartment unit. Currently, the building is 69% leased
with 2 vacancies (1-2 bed + 1 bath apt) + (retail unit). An investor could stablize
the property at market rents and triple net leases, capturing a favorable cap
rate quickly. All tenants are on a month-to-month leases. On the other hand, an
owner user buyer could easily obtain 90% financing with an SBA loan, while
receiving supplemental income from the remaining unused square footage. An
owner user could live in the two bedroom unit as well or rent out in a city with
no rent control.
This property is situated just south of Florence Avenue on a corner location.
There is visible signage on the premises, along with excellent frontage and
exposure on California Street and Pacific Blvd. There is generous traffic counts
and foot traffic, with surrounding retail synergy.
PROPERTY HIGHLIGHTS
• 90% Financing Available - Live/Work Opportunity
• Corner Location with Generous Street Frontage
• Excellent Foot and Traffic Counts
• Plenty of Street Parking
• All Month-to-Month Tenancy - NNN Upside Potential
• Rental Upside - No rent Control City for Apt Unit
BRC ADVISORS & BROOKFIELD PARTNERS, INC. - 7
PROPERTY INFORMATION
site description Physical description
DESCRIPTION SPECIFICATION
RENTABLE SF 5,434 SF
ASSESSOR’S SF 4,198 SF
LOT SIZE 8,494 SF
APN 6201-014-001
NUMBER OF TENANTS 7 Tenants Retail/Apt
FLOOR-TO-AREA RATIO 0.64
ZONING LCC2
PARKING Street Parking
YEAR BUILT 1938
LOT DIMENSIONS 64’ X 121’ X 78’
STREET FRONTAGE 121’ on Pacific Blvd.
HIGHWAY ACCESS 110 and 105 Freeways
TRAFFIC COUNT ±22,539 cars/day
DESCRIPTION SPECIFICATION
CONSTRUCTION TYPE Wood-Frame Stucco
ROOF Rolled Composition
FOUNDATION Concrete
FIRE PROTECTION TBD
HVAC TBD
METERS Seperately
LANDSCAPING None
TOPOGRAPHY Flat
ACCESS California St.
LEASE TYPE Modified Gross/Full Service Gross
TENANCY Multi-Tenant
8 - BRC ADVISORS & BROOKFIELD PARTNERS, INC.
SUMMARY TERMS
PRICE $1,295,000
DOWN PAYMENT (15%) $194,250
BUILDING SIZE 5,434 SF
PRICE PER FOOT ON BUILDING $238.31
LOT SIZE 8,494 SF
PRICE PER FOOT ON LAND $152.46
YEAR BUILT 1938
ZONING LCC2
DESCRIPTION ESTIMATED PSF
OPERATING EXPENSES
TAXES (1.169%) $15,139 $2.79
INSURANCE $2,445 $0.45
UTILITIES $5,434 $1.00
REPAIRS & MAINTENANCE $4,075 $0.75
CAPITAL RESERVES/MISC $2,717 $0.50
TOTAL OPERATING EXPENSES $29,810 $5.49
DEBT SERVICE $83,688 $15.40
TOTAL OCCUPANCY COSTS $113,498 $20.89
MONTHLY OCCUPANCY COSTS(before tax advantages of ownership) $1.74 PSF
SUMMARY TERMS
LOAN AMOUNT $1,100,750
LOAN TYPE SBA
BLENDED SBA RATE 4%
BLENDED AMORTIZATION 25 Years
SALES COMPARISON APPROACH ESTIMATED ANNUALIZED | USER OCCUPANCY COSTS
NEW LOAN
USER OCCUPANCY COSTS
BRC ADVISORS & BROOKFIELD PARTNERS, INC. - 9
LEASE VS. OWN
PROPERTY SIZE 5,434 SF 5,434 SF
LEASE ASSUMPTIONS: Rent Per Month Rent Per SF
START-UP COSTS:
Prepaid rent and security deposit (2 mo.’s total) Lessee TI costs, net of lessor TI allowance** Total startup costs
GROSS MONTHLY COSTS: Rent payment Lease operating costs** Gross monthly cash cost
LEASE BENEFITS (PER MONTH): Depreciation tax benefit at 35% tax rate Avg. monthly principal paydown | equity build Tax benefit on rent deduction at 35% tax rate Tax benefit on operating costs at 35% tax rate Lease-out income (net of tax at 35% rate)
NET COST AFTER LEASE BENEFITS: Est. appreciation benefit, per month
NET COST AFTER LEASE BENEFITS
PROJECTED RENT COST IN YEAR 10 Net rent cost (after tax benefits at 35% rate) Assumed annual rent escalation
ASSUMED ANNUAL APPRECIATION RATE OF: 2.0%BORROWER DOWN PAYMENT (15%): $194,250
Year 5
Year 10
Year 15
Year 20
$238$0
$238
$1.28$0.46$1.74
$0.15$0.48$0.27$0.16$0.00
-$0.06$1.01
$0.73$0.40
$0.33
$10,868
$2.00
$21,736$0
$21,736
$10,868$2,174
$13,042
$0$0
$3,804$761
$0$0
$4,565
$8,477$0
$8,477
$11,061
$1,295,000$0
$1,295,000
$194,250$6,475$5,000
$205,725
$6,974$2,483$9,457
$823$2,619$1,470
$869$0
-$299$5,483
$3,975$2,158
$1,816
LEASE SCENARIO OWN SCENARIO PER/SF PER/SFAMOUNT AMOUNT
GROWTH IN PROPERTY VALUE & OWNER EQUITY
Disclaimer: This sample analysis is based on a series of assumptions, including loan interest rates and annual appreciation rates, and is meant only to be illustrative in nature. The analysis is not a guarantee of any actual results of any loan or purchase transaction or ownership of any real property, all of which are subject to risks, uncertainties and assumptions that are difficult to predict and beyond our control. No warranties or representations, express or implied, are made as to the accuracy of the information contained herein, and same is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, withdrawal without notice, prior sale, lease or financing. We include projections, opinions, assumptions or estimates for example only, and they may not represent future performance of the property. You and your financial and legal advisors should conduct your own evaluation of the property and transaction economics.
ANALYSIS LIMITATIONS:THIS ANALYSIS DOES NOT INCLUDE SUPPLEMENTAL INCOME STREAM FROM POTENTIAL
TENANTS - LOWERING OCCUPANCY COSTS SIGNIFICANTLY
Modified Gross
$1.75$0.40$2.15
$0$0
$0.70$0.14$0.00
$0$0.84
$1.56$0.00
$1.56
$2.043.0%
PURCHASE ASSUMPTIONS: Purchase Price Improvements - Additional Total
START-UP COSTS: Borrower cash down payment (15%) Estimated fees on 1st mortgage** Est. appraisal, environmental, other fees** Total startup costs
GROSS MONTHLY COSTS: Mortgage payment Ownership operating costs** Gross monthly cash cost
OWNERSHIP BENEFITS - EXCEL. APPRECIATION (PER MONTH): Depreciation tax benefit at 35% tax rate Avg. monthly principal paydown | equity build Tax benefit on rent deduction at 35% tax rate Tax benefit on operating costs at 35% tax rate Lease-out income (net of tax at 35% rate) Interest on startup cost difference (net of 35% tax)
NET COST AFTER OWNERSHIP BENEFITS EXCEL APPRE: Est. appreciation benefit, per month
NET COST AFTER OWNERSHIP BENEFITS INCL. APPRE:
PROPERTY VALUE
$1,429,785
$1,578,598
$1,742,899
$1,924,302
LOAN BALANCE
$966,819
$769,520
$517,848
$196,808
OWNER EQUITY
$462,965
$809,078
$1,225,052
$1,727,494
10 - BRC ADVISORS & BROOKFIELD PARTNERS, INC.
TENANT SQUARE FOOTAGE MONTHLY RENT RENT PSF LEASE START LEASE EXPIRES OPTION
Vacant 665 SF $1,300 $1.95 ------ ------ None
Roy Tellez 850 SF $1,500 $1.76 July 1, 2015 Month-to-Month None
Selecto Tax Inc. 500 SF $1,000 $2.00 Feb. 1, 2013 Month-to-Month None
Apartment 1,000 SF $1,495 $1.50 ------ ------ None
Walter Alvarez/Diego 846 SF $1,700 $2.01 March 2, 2014 March 3, 2018 None
Beauty Salon 670 SF $1,190 $1.78 Aug. 26, 2006 Month-to-Month None
Toan Van Le 903 SF $1,300 $1.44 July 1, 2015 June 30, 2016 None
5,434 SF$9,485 AVG. PSF
$1.78$113,820
RENT ROLL
BRC ADVISORS & BROOKFIELD PARTNERS, INC. - 11
PRO-FORMA FINANCIAL ANALYSIS
ANNUALIZED OPERATING DATA
INCOME PRO-FORMA PSF
Total Gross Income $113,820 $20.95
Less: Vacancy (3%) ($3,414) ($0.63)
Effective Gross Income $110,405 $20.32
Operating Expenses ($27,580) ($5.08)
Net Operating Income $82,825 $15.24
Debt Service ($49,212) ($9.05)
Debt Coverage Ratio 1.25 -----
Net Cash Flow After Debt Service $33,613 $6.19
Cash-On-Cash Return 6.49% -----
EXPENSES PRO-FORMA PSF
Real Estate (1.169%) $14,556 $2.68
Insurance $2,445 $0.45
Utilities $2,640 $0.49
Repairs & Maintenance $4,075 $0.75
Reserve / Misc. $3,864 $0.81
TOTAL EXPENSES $27,580 $5.08
FINANCIAL OVERVIEW
DESCRIPTION SPECS
Price $1,295,000
Downpayment (40%) $518,000
Rentable Square Feet 5,434 SF
Price Per Square Foot $238.31
Assessor’s Square Feet 4,198 SF
Price Per Square Foot $308.48
Lot Size 8,494 SF
Price Per Foot on Land $152.46
Pro-forma Cap Rate 6.40%
GRM 11.38
Cash-on-Cash 6.49%
Occupancy 69%
Pro-forma Average PSF $1.78 PSF
Lease Type MG/FSG
Year Built 1938
Zoning LCC2
Type of Ownership Fee Simple
NEW LOAN
DESCRIPTION SPECSLoan Amount $777,000
Loan Type Conventional Commercial
Interest Rate 4.0%
Amortization 25 Years
SECTION 2 | PRO
PERTY INFO
RMATIO
N
14 - BRC ADVISORS & BROOKFIELD PARTNERS, INC.
AERIAL OVERVIEW
BRC ADVISORS & BROOKFIELD PARTNERS, INC. - 15
PLAT MAP
16 - BRC ADVISORS & BROOKFIELD PARTNERS, INC.
JAY MARTINEZManaging Principal
18801 Ventura Blvd., Suite 310Tarzana, CA 91356
Cal BRE: 01367663
CONTACTCELL PHONE818.212.3057
PHONE818.201.3605
FAX818.688.8140
EMAILjay@brookfield-partners.com
WEBSITEwww.brookfield-partners.com
ELIZABETH CLARKSenior Vice President
9301 Wilshire Blvd., Suite 206Beverly Hills, CA 90210
Cal BRE: 01811246
CONTACTCELL PHONE310.740.7283
PHONE310.525.3702
FAX321.421.4184
EMAILeclark@brcadvisors.com
WEBSITEwww.brcadvisors.com
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