offering memorandum colorado crossroads · baklava factory n/a 3 the baklava factory has been...

COLORADO CROSSROADS

1415 East Colorado StreetGlendale, California 91205

OFFERING MEMORANDUM

ADVISORS

GEORGE ISSAIANSManaging PrincipalTel: 818.334.1915CA DRE LIC # [email protected]

Investment Summary

Offering Price $14,000,000

Price Per Sq.Ft. (Building) $685

Price Per Sq.Ft. (Land) $424

Gross Leasable Area 20,435 SF

Land Area 32,962 SF

Zoning GLC3VV

NOI $628,000

Cap Rate 4.5%

Total Building 20,435 SF

COLDWELL BANKER COMMERCIAL ADVISORS | 701 North Brand Blvd. Suite 800 Glendale, CA 91203 | www.cbcadvisors.com

AERIAL VIEW OF SUBJECT PROPERT

GLENDALE HIGH SCHOOL

ADVISORS© 2016 Coldwell Banker Real Estate Corporation. Coldwell Banker Commercial is a registered trademark licensed to Coldwell Banker Real Estate Corporation. An Equal Opportunity Company. Each Office Is Independently Owned And Operated Except Office Owned And Operated By NRT Incorporated. The information above is from sources we believe to be reliable. We have not verified its accuracy and make no guarantee about it. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

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Property Photos

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Property Description and Pricing

Retail PropertyOffering Price $14,000,000

Price Per Square Foot (Building) $685

Price Per Square Foot (Land) Assessor's $424

Net Operating Income $628,309

Actual Cap Rate 4.48%

Ownership Fee Simple

Zoning (Per Title) GLC3VV

Occupancy (As of 10/1/2016) 98.00%

Year Built 1990

Retail Leasable Area 10,864 SF

Office Leasable Area 9,571 SF

Total Leasable Building Area 20,435 SF

Land Area 32,962 SF

Surface Parking 29

Subterranean 66

Total Parking 95

APN 5680-023-013

ADVISORSADVISORS

The OfferingProperty Address 1415 E. Colorado Street

Glendale, CA 91205Assessor's Parcel Number 5680-23-013Zoning (Per Title) GLC3VVUse Code Store/Office (Mixed Use)

Site DescriptionNumber of Stories 2Year Built (Per Property Profile) 1991Gross Leaseable Area (GLA) 21,492 SFLot Size 32,587 SFType of Ownership Fee SimpleParking 29 Surface

66 SubterraneanLandscaping YesBuilding completely painted in 2015

ConstructionFoundation ConcreteFraming WoodExterior StuccoParking Surface AsphaltRoof Flat Roof (replaced 2010/11

Shingles (replaced 2012/13

MechanicalHVAC Multiple roof unitsUtilities Separately meterredElevator Yes (one)

Property Description and Pricing


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Aerial Map

SUBJECT PROPERTY1415 E. COLORADO


EAGLE ROCK PLAZA


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Aerial Map

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EAGLE ROCK PLAZA

GLENDALE GALLERIA

AMERICANA AT BRAND


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Amenities Map



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ENTITY REVENUES NO. OF LOCATIONS

Zankou Chicken N/A 9

"One of Los Angeles' most reversed restaurants. It is a legend. Zankou is the greatest chicken ever." -The New York Times

In 1992, Mardiros Iskenderian opened the second Zankou Chicken in Glendale, California. By this time, the Zankou Chicken fan base had risen to match its taste. The restaurant was heavily crowded on opening day, and the immense success of this branch led Mardiros to open further Zankou Chicken restaurants in Van Nuys, Anaheim, and Pasadena. Later with the opening of the West LA and Burbank location, Zankou gave customers a glimpse into the restaurant’s future: where delicious, high quality, inexpensive meals are served amidst an elegant ambiance.

ENTITY REVENUES NO. OF LOCATIONS

Baklava Factory N/A 3

The Baklava Factory has been serving Los Angeles area with gourmet baklava desert selections made with all the finest ingredients. Baklava is a rich sweet pastry made of layers of filo pastry with various nutty fillings such as pistachios, almonds, cashew, pine nuts, and walnuts and sweetened with flavoured syrups or honey.

Row upon row of backed, fried and shredded dough line the glass case at Baklava Factory. Catalyzing customers with bounty of honey walnuts and custard cream.

Investment Highlights

• The property is anchored by Zankou Chicken a Landmark Rotisserie Chicken based on Lebanese Cuisine Cooking and Baklava Factory also a very well known for their Middle Eastern sweets.

• The proximity of the subject property to large multifamily units within a walking distance as well as driving access between East/West and North and South Glendale.

• Mature tenancy. Most tenants have been a tenant at the center for over 15 years and the historical income stream has been very strong with almost no rental losses, stable income and no other competition within close vicinity.

• The Colorado Cross Road offers ample surface and subterranean parking and an easy access for Colorado Blvd. and Chevy Chase in and out of the property.

• The Property is on the evening path of the traffic that benefits it's eateries as well as other tenants.

• Being a walking distance to Glendale High School is another huge advantage.

Credit Tenant Profiles


ADVISORS

Rent Roll

NO. TENANT MONTHLY RENT LEASE TYPE

A CHENG WOO BBQ $5,115.60 NNN

B WE THE PEOPLE $1,850.00 NNN

C DENTAL OFFICE $3,840.06 NNN

D-F ZANKOU CHICKEN $11,609.31 NNN

G WIRELESS $1,359.60 NNN

H CLEANER $3,900.00 NNN

J ARTISIA $1,975.00 NNN

K BAKLAVA FACTORY $3,624.46 NNN

L BAKLAVA FACTORY NNN

M PHARMACY $2,369.00 NNN

N CARMELLA FINE JEWELRY $1,351.50 NNN

P TOBACCO SHOP $1,448.00 GROSS

TOTAL FIRST FLOOR $38,422.71

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Rent Roll (continued)O

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NO. TENANT MONTHLY RENT LEASE TYPE

200 ADJUST FOR WELLNESS $2,675.75 GROSS

201 HEARING AID $1,785.00 GROSS

203A HENRY'S INSURANCE AGENCY $760.00 GROSS

203B VACANT $755.00 GROSS

202 DECOUPAGE PRODUCTIONS LLC $1,909.15 GROSS

204 HOME HEALTH, INC GROSS

205 VACANT $936.00 GROSS

206-08 HOME HEALTH, INC $2,400.00 GROSS

207 ARMAN SAHAKYAN & ASSOCIATES $1,030.00 GROSS

209 MABEL CHAU $860.00 GROSS

210 Medipro Medical Staffing $1,225.00 GROSS

211 BIOMECHANICAL PHYSICAL THERAPY $1,234.50 GROSS

212 ADVANCE THERAPY $1,755.94 GROSS

100 HIA & ASSOCIATES $1,796.00 GROSS

TOTAL SECOND FLOOR $19,122.34

PARKING INCOME $580.00

GRAND TOTAL $57,545.05


ADVISORS

Glendale, California 91205The City of Glendale is the third largest city in Los Angeles County. Glen-dale has long been a preferred housing market due to ideal choice for parents seeking an exceptional accomplished school district that is ac-countable for strict progress. Glendale Unified is a leader in academic instruction and school achievements. With a population of over 200,000, Glendale continues to be recognized by corporate decision makers for its centralized location, proximity to a large and diverse labor pool and also to both affordable and executive housing. Furthermore, Glendale offers a large and employment opportunities for skilled and non-skilled employees.

In 2010 United States Census supported that Glendale had a population of 191,719. The population of density was 6,286 people per mile and a much higher number in the South Glendale areas such as Colorado Blvd and Chevy Chase. Beginning in late 1980s the Armenian families started to move to Glendale and has the largest Armenian Community outside Armenia, close to 80,000. As a result of this very large population in the Glendale, the City has numerous eateries, bakeries, markets and other amenities for its residents.

Due to this large Armenian population many businesses started operation in Glendale and one such fast food like operation was Zankou Chicken that is the major tenant in this subject property. Zankou Chicken which has its roots Beirut, Lebanon decided to expand its humble operation in Hollywood and open a modern state of the art operation at 1415 E. Colo-rado in 1990. Undoubtedly, that daring move put the Zankou on the map, and now they operate more than 9 branches in LA County and Anaheim.

Another such success story is Baklava Factory that has been a tenant at 1415 E. Colorado for more than fourteen years. These two tenants attract thousands of customers per week to the subject property making it one of the strongest retail leaders in South East Glendale serving the immediate population as well as neighboring communities.

CITY DISTANCES DISTANCE

Downtown Pasadena 10.2 miles

Downtown Los Angeles 8.9 miles

Downtown Burbank 5.4 miles


ADVISORS

Demographics1 mile radius 3 mile radius 5 mile radius

2015 Estimated Population 49,794 244,295 549,370

2020 Projected Population 51,063 250,796 563,840

2010 Census Population 49,157 240,033 540,416

Growth 2015-2020 2.55% 2.66% 2.63%

Growth 2010-2015 1.30% 1.78% 1.66%

2015 Population by Race 49,794 244,295 549,370

White 36,865 74.04% 180,876 74.04% 410,157 74.66%

African American 888 1.78% 5,079 2.08% 17,696 3.22%

Native American 386 0.78% 2,442 1.00% 6,453 1.17%

Asian 9,780 19.64% 47,076 19.27% 95,963 17.47%

Pacific Islander 61 0.12% 388 0.16% 856 0.16%

Other Race 1,814 3.64% 8,434 3.45% 18,256 3.32%

POPU

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1 mile radius 3 mile radius 5 mile radius

2015 Estimated Households 18,581 88,199 204,946

2020 Projected Households 19,048 90,496 210,225

2010 Census Households 18,393 86,992 202,340

Growth 2015-2020 2.51% 2.60% 2.58%

Growth 2010-2015 1.02% 1.39% 1.29%

Owner Occupied 4,677 25.17% 34,416 39.02% 80,518 39.29%

Renter Occupied 13,904 74.83% 53,784 60.98% 124,428 60.71%

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1 mile radius 3 mile radius 5 mile radius

2009 Estimated Households 7,641 26,717 85,585

- Income Less than $25,000 5,609 30.19% 22,497 25.51% 51,371 25.07%

- Income $25,000 - $50,000 4,498 24.21% 19,481 22.09% 42,950 20.96%

- Income $50,000 - $75,000 2,981 16.04% 13,855% 15.71% 32,233 15.73%

- Income $75,000 - $100,000 2,252 12.12% 10,434 11.83% 23,274 11.36%

- Income $100,000 - $125,000 1,480 7.97% 7,106 8.06% 16,883 8.24%

- Income $125,000 - $150,000 774 4.17% 4,622 5.24% 11,680 5.01%

- Income $150,000 - $200,000 671 3.61% 4,778 5.42% 11,680 5.70%

- Income $200,000+ 316 1.70% 5,428 6.15% 16,284 7.95%

2015 Est. Average Household Income $60,215 $76,891 $81,814

2015 Med. Household Income $44,053 $53,946 $56,166

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SUBJECT PROPERTY'S EVENING TRAFFIC


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AssumptionsColorado Crossroads - Assumptions

GENERAL ASSUMPTIONS SPECULATIVE RENEWALS Zone - 1,2,3 Zone - 4Analysis Start Date Oct-16 Retention Ratio 80.0% 80.0%Occupancy as of Start Date 95.76% Lease Term (Months) 60 36

95.76% AverageRetail Monthly Annual

Market Rent (PSF / YR) - Z1 NNN (2016) $5.00 $60.00Market Rent (PSF / YR) - Z2 NNN (2016) $4.00 $48.00Market Rent (PSF / YR) - Z3 NNN (2016) $3.00 $36.00Market Rent (PSF / YR) - Z4 FSG (2016) $2.00 $24.00

Rentable Square Feet (RSF) - As of 12/1/16Occupied 19,569 Rental Escalations 3.50% AnnuallyAvailable 866Total 20,435 Tenant Improvements (2016) Zone 1,2 & 3 Zone 4

New Tenant $15.00 $10.00Purchase Price Renewal Tenant $7.50 $5.00

$ Amount $14,000,000 Weighted Average $9.00 $6.00Per RSF $685.10Initial Closing Costs $0 Leasing Commissions

New Tenant 5.00% 5.00%Growth / Inflation Rates Renewal Tenant 2.00% 2.00%

General Infaltion 3.00% Weighted Average 2.60% 2.60%

Market Rent Yr 2=5.0% Yr 3=5.0% Yr 4=5% Thereafter 3.00% Rent Abatement (Months) 0.0 0.0

Expenses 2.00% Downtime Between New LeasesProperty Taxes 2.00% Vacancy Period (months) 6.0 4.0Other Income 3.00% Weighted Average (months) 1.2 0.8

Allowances OTHER ASSUMPTIONSVacancy 3.00% Management Fee (% of EGI) 0.00%Credit Loss / Bad Debt 0.00% Property Taxes - Reassessed 1.10%Capital Reserve (PSF / YR) $0.00

LEVERAGE ANALYSISExit Strategy Loan-to-Value 65.00%

Residual Cap Rate 5.50% Annual Interest Rate 3.60%Applied to (10th / 11th) Year NOI 11th Amortization Period (Years) 30Residual Year Grossed Up to 95% Occupancy? No Term (in Years) 10Tenanting Costs Reducing Gross Residual Value None Loan Fees & Costs 1.00%Cost of Sale in Disposition Year 4.00% Loan Constant 5.46%

ABSORBTION

Tenant Annual Monthly YearlyAvailable Space RSF Lease Start Lease End Term (months) Rental Increases Improvements Recoveries Start Rate Rent RentSuite 203B 386 1/1/2017 12/31/2019 36 3.50% Annually $10.00 FSG $24.00 $772 $9,264Suite 205 480 3/1/2017 2/29/2020 36 3.50% Annually $10.00 FSG $24.00 $960 $11,520

$0 $0$0 $0$0 $0

866 Average Starting Rate $24.00 $20,784Notes:

Actual Occupancy (as of 12/1/16)


ADVISORS

Cash Flow

Colorado Crossroads - 10 Year Cash Flow Analysis

Acquisition Price $14,000,000 Gross Potential Revenue (Year 11) $965,161Capitalization Rate 4.55% Actual Vacancy / Credit Loss (3.83%) (36,920)3-Year Average Cap Rate 4.74% Adjustment to 95% Vacancy (If Applicable) 0Total Rentable Square Feet 20,435 Adjusted Rental Revenue $928,241Price per Rentable Square Foot $685.10 Reimbursements & Other Income 265,494

Operating Expenses (292,107)Annual Market Rent (Year 1) $33.34 Adjusted Net Operating Income $901,628Actual Occupancy (as of 12/1/16) 95.76% Ending Capitalization Rate 5.50%Occupancy as of Start Date 95.76% Sales Price, End of Year 10 $16,393,236

Internal Rates of Return Net Sales Price (4.00% Selling Costs) $15,737,507All-Cash 5.82% Less Loan Balance (If Applicable) (7,070,914)Leveraged 8.59% Net Sale Proceeds $8,666,593

Year Ending Acquisition Sep-30-17 Sep-30-18 Sep-30-19 Sep-30-20 Sep-30-21 Sep-30-22 Sep-30-23 Sep-30-24 Sep-30-25 Sep-30-26 Sep-30-27Average Market Rent $33.34 $35.01 $36.76 $38.60 $39.76 $40.95 $42.18 $43.44 $44.75 $46.09 $47.47Existing + Speculative Rent $34.31 $35.34 $36.63 $38.18 $39.54 $40.87 $42.02 $43.40 $44.72 $45.72 $47.46Average Occupancy 97.68% 98.27% 98.43% 98.13% 96.87% 98.11% 98.24% 96.80% 99.61% 97.01% 96.96%

PSF / Year 1Rental Revenue 33.51 684,810 709,675 736,848 765,508 782,622 819,453 843,486 858,525 910,262 906,346 940,384Expense Recoveries 9.79 200,138 205,515 218,261 226,627 227,688 231,225 242,061 241,652 252,454 251,247 249,280

Gross Income 43.31 884,948 915,190 955,109 992,135 1,010,310 1,050,678 1,085,547 1,100,177 1,162,716 1,157,593 1,189,664

Credit / Vacancy Loss (0.73) (14,860) (18,571) (17,681) (18,835) (3,937) (16,528) (21,643) (9,945) (32,877) (3,865) (12,143)Other Income - - - - - - - - - - - - Percentage Rent - - - - - - - - - - - - Misc. Revenue - Parking 0.59 12,065 12,427 12,799 13,183 13,579 13,986 14,406 14,838 15,283 15,742 16,214

Effective Gross Income 43.17 882,153 909,046 950,227 986,483 1,019,952 1,048,136 1,078,310 1,105,070 1,145,122 1,169,470 1,193,735

Contract Labor 0.45 9,200 9,384 9,572 9,763 9,958 10,158 10,361 10,568 10,779 10,995 11,215Supply 0.10 2,000 2,040 2,081 2,122 2,165 2,208 2,252 2,297 2,343 2,390 2,438Electricity 0.51 10,400 10,608 10,820 11,037 11,257 11,482 11,712 11,946 12,185 12,429 12,678Water 0.74 15,200 15,504 15,814 16,130 16,453 16,782 17,118 17,460 17,809 18,165 18,529Retail - Extra Cleaning 0.16 3,200 3,264 3,329 3,396 3,464 3,533 3,604 3,676 3,749 3,824 3,901Retail - Trash 0.57 11,700 11,934 12,173 12,416 12,664 12,918 13,176 13,440 13,708 13,983 14,262Sanitation 0.05 1,000 1,020 1,040 1,061 1,082 1,104 1,126 1,149 1,172 1,195 1,219Fire Monitor/Repair 0.08 1,600 1,632 1,665 1,698 1,732 1,767 1,802 1,838 1,875 1,912 1,950Normal Center Parking Attendan 1.03 21,100 21,522 21,952 22,391 22,839 23,296 23,762 24,237 24,722 25,216 25,721Retail - Parking Attendant 0.19 3,900 3,978 4,058 4,139 4,221 4,306 4,392 4,480 4,569 4,661 4,754Pesticide 0.04 900 918 936 955 974 994 1,014 1,034 1,054 1,076 1,097Elevator 0.18 3,600 3,672 3,745 3,820 3,897 3,975 4,054 4,135 4,218 4,302 4,388Insurance 0.39 7,900 8,058 8,219 8,384 8,551 8,722 8,897 9,075 9,256 9,441 9,630Property Taxes 1.1% 7.54 154,000 157,080 160,222 163,426 166,695 170,028 173,429 176,898 180,436 184,044 180,325

Total Expenses 12.02 245,700 250,614 255,626 260,738 265,952 271,273 276,699 282,233 287,875 293,633 292,107

Net Operating Income 636,453 658,432 694,601 725,745 754,000 776,863 801,611 822,837 857,247 875,837 901,628

Commissions (13,927) (10,634) (18,119) (8,280) (43,304) (17,730) (20,450) (23,593) (10,486) (45,773) (30,200)Tenant Improvements (34,973) (28,085) (33,797) (24,192) (70,279) (32,779) (45,738) (55,333) (20,872) (71,726) (70,164)Capital Reserves + City Subsidy (4,087) (4,210) (4,336) (4,466) (4,600) (4,738) (4,880) (5,026) (5,177) (5,333) (5,493)

Total Deductions (52,987) (42,929) (56,252) (36,938) (118,183) (55,247) (71,068) (83,952) (36,535) (122,832) (105,857)

Operating Cash Flow 583,466 615,503 638,349 688,807 635,817 721,616 730,543 738,885 820,712 753,005 795,771

Acquisition Price (14,000,000) - - - - - - - - - - All-CashGross Sales Price - - - - - - - - - - 16,393,236 Internal RateSales Commissions - - - - - - - - - - (655,729) of Return

Total Cash Flow (14,000,000) 583,466 615,503 638,349 688,807 635,817 721,616 730,543 738,885 820,712 16,490,512 5.82%

Loan Amount 9,100,000 - - - - - - - - - (7,070,914) LeveragedLoan Fees & Costs - (91,000) - - - - - - - - - Internal RateDebt Service - (496,473) (496,473) (496,473) (496,473) (496,473) (496,473) (496,473) (496,473) (496,473) (496,473) of Return

Cash Flow After Debt (4,900,000) (4,007) 119,030 141,876 192,334 139,344 225,143 234,070 242,412 324,239 8,923,125 8.59%All-Cash Returns

Capitalization Rate 4.55% 4.70% 4.96% 5.18% 5.39% 5.55% 5.73% 5.88% 6.12%

Cash-on-Cash 4.17% 4.40% 4.56% 4.92% 4.54% 5.15% 5.22% 5.28% 5.86%

Leverage Returns

Cash-on-Cash 1.78% 2.43% 2.90% 3.93% 2.84% 4.59% 4.78% 4.95% 6.62%

Debt Coverage 1.28 1.33 1.40 1.46 1.52 1.56 1.61 1.66 1.73

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ADVISORS

The information contained in this Offering Memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Coldwell Banker Commercial and should not be made available to any other person or entity without the written consent of Coldwell Banker Commercial. Offering Memorandum 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. Coldwell Banker Commercial 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, Coldwell Banker Commercial has not verified, and will not verify, any of the information contained herein, nor has Coldwell Banker Commercial 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. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT A COLDWELL BANKER COMMERCIAL MARKETING REPRESENTATIVE FOR MORE DETAILS.

Coldwell Banker Commercial AdvisorsInvestment Groupwww.cbcadvisors.com

GEORGE ISSAIANSMANAGING PRINCIPAL818.334.1915CA DRE LIC # [email protected]

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offering memorandum colorado crossroads · baklava factory n/a 3 the baklava factory has been...

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