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FOR SALERARE ±0.46-ACRE COASTAL COMMERCIAL DEVELOPMENT OPPORTUNITYOR 7,520 SF FREESTANDING RETAIL BUILDING FOR INVESTOR OR OWNER/USER
1630 Pacific Coast Highway | Hermosa Beach, CA
OFFERING MEMORANDUM
TABLE OF CONTENTS
No warranty, express or implied, is made as to the accuracy of the information contained herein. This information is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and is subject to any special listing conditions imposed by our principals. C ooperating brokers, buyers, tenants and other parties who receive this document should not rely on it, but should use it as a starting point of analysis, and should independently confirm the accuracy of the information contained herein through a due diligence review of the books, records, files and documents that constitute reliable sources of the information described herein. NAI Capital CA BRE #01990696
I EXECUTIVE SUMMARYA. Opportunity Overview .............................2B. Property Highlights .................................3
II THE OFFERINGA. Property Overview ..................................5B. Aerials ...................................................6C. Location Maps .......................................8D. Site Plan ................................................9E. Property Photos ...................................10F. Assessor’s Parcel Map .........................14G. Zoning .................................................15
III AREA OVERVIEWA. Greater Los Angeles Region .................17B. City of Hermosa Beach ........................18C. Demographics .....................................19D. Retail Market Overview-Beach Cities .....20
Jonathan ColemanReal Estate West310.546.3441 [email protected] BRE Lic #00707775
Real Estate West905 Manhattan Beach BoulevardManhattan Beach, CA 90266
David Knowlton, SIOR, CCIMExecutive Vice [email protected] BRE Lic #00893394
NAI Capital1920 Main Street, Suite 100Irvine, CA 92614
Contact Information
I | EXECUTIVE SUMMARY
Real Estate West & NAI Capital Inc. have been
selected to exclusively offer this rare 0.46-acre
Commercial Development/Retail Investment
Opportunity in Hermosa Beach, California. The
opportunity allows the development of an unusually
large commercial property in this beach community
while collecting a stabilized rental income from
the current tenant – Jack’s Surfboards – through
11/30/2020. Alternatively, the buyer may retain
the existing 7,520 SF freestanding retail building
as a continuing leased investment or future owner/
user occupancy. The City’s broadly allowed uses
include retail, office, restaurant, hospitality and
many services.
A | OPPORTUNITY OVERVIEW
SITE
1630 PCH | EXECUTIVE SUMMARY | 2
LOCATION HIGHLIGHTS
• Hard corner location
• Rectangular-shaped site
• Potential 2-street access
• Excellent on-site and street parking
• over 200’ of Pacific Coast Highway
frontage
• 53,000 Motorists per day
PROPERTY Prime 0.46-acre commercial land parcel located in the heart of
Hermosa Beach; within walking distance of the Hermosa Beach Pier
Lease Income: Existing income stream to
help support entitlement expenses
Investor/Owner/User: Secondary opportunity to maintain
the existing 7,520 SF freestanding retail building with
the current lessee, or occupy at lease termination
LOCATION International tourist destination; 3,000 feet from the beach;
3.3 miles from the 405 Freeway; 5.0 miles from LAX;
Ideal year-round climate; Excellent demographics
DEMOGRAPHICS Outstanding 2017 Estimated Average Household Income
1 Mile
$189,123
3 Mile
$156, 475
5 Mile
$125,127
LAND USE DESIGNATION Special Planning Area 8 - the broadest commercial zoning
designation in the City of Hermosa Beach
CURRENT USE Leased to Jack’s Surfboards through 11/30/2020
PRICE $9,500,000
B | PROPERTY HIGHLIGHTS
1630 PCH | EXECUTIVE SUMMARY | 3
II | THE OFFERING
A | PROPERTY OVERVIEW
FEATURES
ADDRESS 1630 Pacific Coast Highway, Hermosa Beach, CA 90254
SITE 20,049 SF (0.46 Acres)
BUILDING 7,520 SF Freestanding Retail Building with Over 120’ of Window Frontage and 204’ of Street Frontage
YEAR BUILT 1958
SITE DIMENSIONS 204’ Frontage x 100’ Depth (Approx.)
SITE DESCRIPTION
Hard Corner Location; Fully Improved; Mostly Flat; Hillside Slope Along East Portion of Property
TRAFFIC COUNT 53,000 Motorists Per Day on Pacific Coast Highway
PARKING 16 On Site Parking Plus Street Parking
ZONING Special Planning Area 8 (SPA-8); Allows All Uses Permitted in C-3 Zone
FAR 1.0
APN’S 4185-005-001, 002, 005
UTILITIES/INFRASTRUCTURE
Electric – On siteWater - On sitePhone - On siteSewer - On siteGas - On siteStreet – YesSidewalk – YesCurb/gutter - Yes
CURRENT LEASE Property is subject to an existing lease with Jack’s Surfboards which expires on 11/30/2020. Lessee has no options to extend or purchase. Jack’s Surfboards’ Lease Abstract is available subject to a confidentiality agreement.
1630 PCH | THE OFFERING | 5
B | RETAIL TRADE AERIAL
1630 PCH | THE OFFERING | 6
Artesia Blvd
Paci f ic Ocean
Pacific C
oast Hw
y
Herm
osa Ave
0.5 Mile
SITE
Pier AveAvia
tion B
lvd
Grant Ave
Prosp
ect AveValley D
r
B | AERIAL
1630 PCH | THE OFFERING | 7
405
107
213
1 Manhattan Beach Blvd
Robinson St
Ing
lew
oo
d A
ve
Rin
dg
e Ln
Haw
tho
rne
Blv
d
Do
ty A
ve
Marine Ave
W 182nd St
W 147th St
W 135th St
Artesia Blvd
Sepulveda Blvd
Cre
nsha
w B
lvd
Mad
rona
Ave
Avi
atio
n B
lvd
Fla
gle
r Ln
Pac
ific
Ave
Wes
tern
Ave
W 190th St
Van
Nes
s A
ve
Rosecrans Ave
Paci f ic Ocean
Del Amo Blvd
Torrance Blvd
Ear
l St
Pacific C
oast Hw
y
Herm
osa Ave
Redondo Beach Blvd
Prospect A
ve
3 Miles
1 MileSITE
C | LOCATION MAPS
SITE
405
107
1 Manhattan Beach Blvd
Vail
Ave
Ing
lew
oo
d A
ve
N P
eck
Ave
Haw
tho
rne
Blv
d
Marine Ave
W 182nd St
Artesia Blvd
Fla
gle
r Ln
Avi
atio
n B
lvd
W 190th St
Del Amo Blvd Anza A
ve
Pacific C
oast Hw
y
Herm
osa Ave
Ard
more A
ve
Beryl
St
Ripley Ave
Prospect A
ve
1630 PCH | THE OFFERING | 8
405
210
405110
60510
5
10 Mile
20 Mile
30 Mile
PasadenaGlendale
Los Angeles County
Orange County
Bradbury
AlhambraBeverly Hills
Santa Monica
Inglewood
Hawthorne
Compton
Redondo Beach
Torrance
El Monte
Valinda
Industry
Whittier
Fullerton
Anaheim
Westminster
Long BeachPalos Verdes Estates
Lakewood
Downey
Huntington Park
D | SITE PLAN
1630 PCH | THE OFFERING | 9
PACIFIC COAST HWY
17
TH
ST
RE
ET
15’
75’
Planter
Pylon Sign
Trash
116’
127’
Not to Scale. A l l measurements are approximate and not guaranteed.
20’
61’
E | PROPERTY PHOTOS
1630 PCH | THE OFFERING | 10
E | PROPERTY PHOTOS
1630 PCH | THE OFFERING | 11
E | PROPERTY PHOTOS
1630 PCH | THE OFFERING | 12
E | PROPERTY PHOTOS
1630 PCH | THE OFFERING | 13
F | ASSESSOR’S PARCEL MAP
1630 PCH | THE OFFERING | 14
Special Planning Area 8: Allows all commercial uses as those permitted in the C-3
General Commercial zone. This is the broadest commercial zone in Hermosa Beach.
Allowed uses include retail, office, restaurants, service & hospitality among many others.
C-3 General Commercial Zone: Provides opportunities for the full range of office, retail,
and service businesses deemed suitable for the city and appropriate for the Pacific
Coast Highway and Aviation Boulevard commercial corridors, including businesses not
appropriate for other zones because they attract heavy vehicular traffic or have specific
adverse impacts.
Two sets of standards apply in this specific plan area: first tier and second tier. Compliance
with first tier standards allows the project to proceed with a building permit. If a project
goes beyond any of the first tier standards, the procedure for submittal and approval of
a precise development plan shall be followed. Developments must be in compliance with
second tier standards at all times.
1ST TIER MIN/MAX REQUIREMENTS
2ND TIER MIN/MAX REQUIREMENTS
MAX. HEIGHT 25 Feet 35 Feet
COVERAGE Max. 1.0 F.A.R.* N/A
MAX. SIZE 10,000 SF Gross Floor Area
N/A
MIN. LANDSCAPE COVERAGE 5% of lot area 2% of lot area
*Gross floor area/lot area ratio (excludes parking structures)
CONTACT INFORMATION
City Hall
1315 Valley Drive
Hermosa Beach, CA 90254
Phone: (310) 318-0239
Web: www.hermosabch.org
Planning Division: (310) 318-0242
Building Division: (310) 318-0235
Code Enforcement Division: (310) 318-0235
G | ZONING OVERVIEW
1630 PCH | THE OFFERING | 15
III | AREA OVERVIEW
The Greater Los Angeles Region is the second largest
urban region in the United States and is second only to
the New York Metropolitan Area in terms of population
and economic output; encompassing five counties in
Southern California, Orange County, Los Angeles County,
Riverside County, San Bernardino County and Ventura
County. As of the 2010 U.S. Census, the estimated
population by 2015 was 18.7 million. The region has
continuously urbanized stretching from Ventura County to
the southern border of Orange County. The Los Angeles
area continues to grow, primarily on the periphery where
new, less expensive, undeveloped areas are being
sought. In these areas, populations as well as housing
prices continue to explode especially in Riverside and San
Bernardino Counties. Growth continues not only outside
the existing urbanized area but also adjacent to existing
development in the central areas. As in virtually all US
core cities, there is now vigorous residential development
in the downtown area with both new buildings and
renovation of former office buildings. The Region is home
to over a quarter of all California residents.
Orange County and Los Angeles County are part of
the Los Angeles Metropolitan Area, the inner core of
the Greater Los Angeles Region. Orange County is
mostly suburban with no defined urban center. The
establishment of the tourism industry allowed Orange
County to become an important economic center. Today
Orange County is home to many tourist attractions such
as Disneyland, California Adventure, Knott’s Berry Farm,
Discovery Science Center and Bower Museum along with
extensive beaches and coastlines.
The explosive growth of the Greater Los Angeles Region
can be attributed to its climate, the availability of land and
many booming industries such as oil, automobile, motion
pictures and aerospace which make it easy for employers
to attract employees from around the world.
Factors affecting continued growth and economic
success in the Los Angeles area include:
• The area’s economy is diverse with an emphasis
on aerospace, business, services, entertainment,
technology, tourism and trade
• The ports of Long Beach and San Pedro provide
deep water shipping access
• Five international airports provide air freight and
passenger service, plus extensive freeway and rail
systems
• The Basin is strategically situated for transacting
business in two growing trade areas; the Pacific Rim
and Mexico
A | GREATER LOS ANGELES REGION OVERVIEW
1630 PCH | AREA OVERVIEW | 17
Hermosa Beach is located in the South Bay region of the greater Los Angeles
area; just 5 miles south of Los Angeles International Airport. It is one of the three
Beach Cities and is bordered by the other two; Manhattan Beach to the north and
Redondo Beach to the south and east.
The city’s beach is popular for sunbathing, beach volleyball, surfing, paddle
boarding and bars. The city itself extends only about 15 blocks from east to west
and 40 blocks from north to south, with the Pacific Coast Highway running down
the middle. Situated on the Pacific Ocean, Hermosa’s average temperature is
70°F (22°C) in the summer and 55°F (13°C) in the winter. It has an average of
325 days of sunshine a year.
The wide flat beach makes Hermosa Beach one of the most popular places to
play beach volleyball, from professional to amateur. Hermosa Beach is home
to the AVP Hermosa Beach Open tournament and several amateur CBVA
tournaments during the year. The Strand stretches north to Santa Monica and
south to Redondo Beach, and is a popular place for walkers, joggers and biking.
Hermosa Beach is within a few minutes commute of many of the largest and
best known names in corporate America in such fields as aerospace, high
tech, industrial, service and financial. And with scores of fashionable boutiques,
independent shops, restaurants, and outdoor activities -- all within 1.4 square
miles and easy walking distance — Hermosa Beach offers something for everyone.
B | CITY OF HERMOSA BEACH
1630 PCH | AREA OVERVIEW | 18
C | DEMOGRAPHICS OVERVIEW
1630 PCH | AREA OVERVIEW | 19
Population 1 Mile 3 Mile 5 Mile
2017 Estimated Population 34,505 178,593 418,962
2022 Projected Population 35,045 181,106 425,464
2017 Male Population 17,583 89,332 206,602
2017 Female Population 16,922 89,261 212,360
2017 Total Adult Population 28,722 139,272 321,655
2017 Total Businesses 2,095 8,863 21,587
Income 1 Mile 3 Mile 5 Mile
2017 Estimated Household Income: Average $189,123 $156,475 $125,127
2017 Estimated Household Income: Median $131,580 $116,600 $94,964
2017 Estimated Per Capita Income $85,673 $63,969 $48,478
2022 Projected Household Income: Average $243,150 $195,561 $155,241
2022 Projected Household Income: Median $153,641 $134,287 $109,945
2022 Projected Per Capita Income $112,447 $81,766 $48,478
Households 1 Mile 3 Mile 5 Mile
2017 Estimated Households 15,628 72,940 162,108
2017 Average Household Size 2.2 2.4 2.6
2022 Projected Households 16,205 75,665 168,136
Age 1 Mile 3 Mile 5 Mile
Median Age 37.8 38.5 37.9
Age 19 Years or Less 6,783 39,321 97,307
Age 20 to 64 Years 23,280 114,462 263,660
Age 65 Years or Over 4,442 24,810 57,995
2017 Total population: under 5 years 2,129 6.2% 10,801 6.0% 25,718 6.1%
2017 Total population: 5 to 9 years 1,864 5.4% 10,320 5.8% 24,900 5.9%
2017 Total population: 10 to 14 years 1,518 4.4% 9,566 5.4% 24,162 5.8%
2017 Total population: 15 to 19 years 1,273 3.7% 8,633 4.8% 22,527 5.4%
2017 Total population: 20 to 24 years 1,488 4.3% 8,498 4.8% 22,949 5.5%
2017 Total population: 25 to 29 years 3,457 10.0% 14,453 8.1% 33,706 8.0%
2017 Total population: 30 to 34 years 3,341 9.7% 14,993 8.4% 33,198 7.9%
2017 Total population: 35 to 39 years 3,135 9.1% 14,444 8.1% 31,509 7.5%
2017 Total population: 40 to 44 years 2,697 7.8% 12,898 7.2% 29,540 7.1%
2017 Total population: 45 to 49 years 2,651 7.7% 13,730 7.7% 31,403 7.5%
2017 Total population: 50 to 54 years 2,245 6.5% 12,647 7.1% 29,458 7.0%
2017 Total population: 55 to 59 years 2,230 6.5% 12,070 6.8% 27,691 6.6%
2017 Total population: 60 to 64 years 2,036 5.9% 10.730 6.0% 24,208 5.8%
2017 Total population: 65 to 69 years 1,572 4.6% 8,393 4.7% 19,137 4.6%
2017 Total population: 70 to 74 years 1,163 3.4% 6,245 3.5% 14,154 3.4%
2017 Total population: 75 to 79 years 694 2.0% 4,185 2.3% 10,028 2.4%
2017 Total population: 80 to 84 years 476 1.4% 2,825 1.6% 6,956 1.7%
2017 Total population: 85 years and over 537 1.6% 3,163 1.8% 7.720 1.8%
G | RETAIL MARKET OVERVIEW - BEACH CITIES
Rents see 10% increase year over year. Market is expected to remain tight in 2018. The Beach Cities refers to the three coastal
cities of Hermosa Beach, Manhattan Beach and
Redondo Beach. These cities are renowned for
their beaches and municipal piers and remain
popular with tourists, beachgoers, and surfers.
Owing to this reputation, asking rents for retail
space averaged $3.29/SF in the third quarter,
representing a 10% increase over last year at this
time. Additionally, asking rents are 81% higher in
the Beach Cities than the surrounding South Bay
area in general. The vacancy rate this quarter
registered just 3.0%, steady over last year. This
is the second lowest vacancy seen in the Beach
Cities the since the recession.
Low vacancy and availability rates have slowed
leasing activity in the Beach Cities. Just over
26,000 square feet were leased in the third
quarter, with about half that space taken down in
Redondo Beach. Sale volume remained similarly
low, but cap rates in 2017 averaged 3.57%,
down from 5.04% last year.
Asking rental growth has been strongest in
Redondo Beach and Hermosa Beach, which saw
annual gains of 12.5% and 9.9%, respectively.
However, asking rates remain highest in
Manhattan Beach at $4.25/SF, followed by
Hermosa Beach at $3.75/SF, and Redondo
Beach at $2.98/SF. With strong demand for retail
space and limited new supply, asking rents are
expected to continue increasing in 2018, while
the vacancy rate should remain low.
Market Trends
Total Inventory (SF) 6,158,435
3Q17 2Q17 3Q16
Asking Rent (Per SF) $3.29 $3.13 $2.99
Vacancy Rate (%) 3.0% 3.1% 3.0%
Leasing Volume (SF) 26,105 34,639 40,423
Sale Volume (SF) 34,291 147,785 48,614
Under Const. (SF) 4,984 4,984 3,434
Deliveries (SF) 0 0 0
1630 PCH | AREA OVERVIEW | 20
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
$2.50
$2.70
$2.90
$3.10
$3.30
$3.50
3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Vacancy (%) Asking Rent ($/SF)
Asking Rent and Vacancy
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
0
30,000
60,000
90,000
120,000
150,000
3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Sq
uare
Fee
tSale Volume Cap Rate
Sales Volume and Cap Rate
Headquarters
Encino 16001 Ventura Blvd., Ste. 200 Encino, CA 91436 (818) 905-2400
Los Angeles County
Commerce 500 Citadel Dr., Ste. 100 Los Angeles, CA 90040 (323) 201-3600
Diamond Bar 21660 E. Copley Dr., Ste. 320 Diamond Bar, CA 91765 (909) 348-0600
Pasadena 225 S. Lake Ave., Ste. 1170 Pasadena, CA 91101 (626) 564-4800
Torrance 970 W. 190th St. Dr., Ste. 100 Torrance, CA 90502 (310) 532-9080
Valencia 27451 Tourney Rd., Ste. 200 Valencia, CA 91355 (661) 705-3550
West Los Angeles 11835 Olympic Blvd., Ste. 700E Los Angeles, CA 90064 (310) 440-8500
Ventura County
Oxnard 300 Esplanade Dr., Ste. 1660 Oxnard, CA 93036 (805) 278-1400
Westlake Village 2555 Townsgate Rd., Ste. 320 Westlake Village, CA 91361 (805) 446-2400
Simi Valley 2655 First St., Ste. 250 Simi Valley, CA 93065 (805) 522-7132
Orange County
Irvine 1920 Main St., Ste. 100 Irvine, CA 92614 (949) 854-6600
San Clemente 120 1/2 South El Camino Real, Ste. 210 San Clemente, CA 92674 (949) 874-0415
Inland Empire
Ontario 800 N. Haven Dr., Ste. 400 Ontario, CA 91764 (909) 945-2339
Temecula Valley 27720 Jefferson Ave., Ste. 330 Temecula, CA 92590 (951) 491-7590
Victorville 13911 Park Avenue, Ste. 206 Victorville, CA 92392 (760) 780-4200
Coachella Valley
Palm Desert 75-410 Gerald Ford Dr., Ste. 200 Palm Desert, CA 92211 (760) 346-1566
NAI Capital Offices
No warranty, express or implied, is made as to the accuracy of the information contained herein. this information is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and is subject to any special listing conditions imposed by our principals. cooperating brokers, buyers, tenants and other parties who receive this document should not rely on it, but should use it as a starting point of analysis, and should independently confirm the accuracy of the information contained herein through a due diligence review of the books, records, files and documents that constitute reliable sources of the information described herein. NAI Capital CA BRE #01990696
David Knowlton, SIOR, CCIMExecutive Vice [email protected] BRE Lic #00893394
Jonathan ColemanReal Estate West310.546.3441 [email protected] BRE Lic #00707775
Contact Information
CA BRE License #01990696
800.468.2618 • naicapital.com
FOR SALE | RARE ±0.46-ACRE COASTAL COMMERCIAL DEVELOPMENT OPPORTUNITY OR 7,520 SF FREESTANDING RETAIL BUILDING FOR INVESTOR OR OWNER/USER