pacific avenue long beach · 1 (2 bed / 2 bath) 1 (2 bed / 1 bath) 4 (1 bed/ 1 bath) parking 10...

2020 Occupancy

944PACIFIC AVENUE

LONG BEACH

6 MULTI-FAMILY APARTMENT UNITS

The material contained in this document is confidential, furnished solely for the purpose of consideringthe purchase of 944 Pacific Ave, Long Beach, CA (“Subject Property”) is not to be copied and/or usedfor any purpose or made available for any other person without the express written consent of theAnderson Real Estate Group. In accepting this, the recipient agrees to keep all material containedherein confidential.

The information contained in this document has been obtained from sources believed to be reliable.While the Anderson Real Estate Group does not doubt its accuracy, the Anderson Real Estate Grouphas not verified it and makes no guarantee, warranty or representation about it and it is theresponsibility of any prospective purchaser to independently confirm its accuracy and completeness.Any projections, opinions, assumptions or estimates are used for example only and do not representthe current or future performance of the property. The value of this transaction to any prospectivepurchaser depends on tax and other factors which should be evaluated by your tax, financial and legaladvisors. You and your advisors should conduct a careful, independent investigation of the property todetermine to your satisfaction the suitability of the property for your needs. All trademarks displayedon this document are the property of their respective owners.

The Seller retains the right to withdraw, modify or cancel this offer to sell at any time without notice orobligation. Any sale is subject to the sole and unrestricted approval of Seller and Seller shall be underno obligation to any party until such time as Seller and any other necessary parties have executed acontract of sale containing terms and conditions acceptable to Seller and such obligations of Seller shallonly be those in such contract of sale.

ANDERSON COMMERCIAL 944 Pacific Ave | [email protected] PG 1

D I S C L A I M E R A N DC O N F I D E N T I A L I T Y A G R E E M E N T

Executive Summary ……………………………………………………… 3 Financials……………………………………………………………………....6

Project Overview ………………………………………………………… 9

Comparables ……………………………………………………………… 18

Market Overview ……………………………………………………….. 24

PG 2ANDERSON COMMERCIAL 944 Pacific Ave | [email protected]

TA B L E O FC O N T E N T S

EXECUTIVESUMMARY

944 Pacific Avenue represents a rare opportunity topurchase a 6-unit multifamily asset in the path ofprogress within an extremely hot submarket of LosAngeles, offering value like returns with a core riskprofile.

The asset is considered, per the new CA State RentControl Law, as new construction as it’s certificate ofoccupancy date is in 2020 (converted from creativeoffice), and therefore will not be subject to rent controllaws for the next 15 years.

All major systems have been re-built inclusive of:completely new plumbing, electrical, mechanical (mini-split units for each apartment), and interior finishes,which will reduce ongoing maintenance costs.

Located along the Pacific Avenue corridor of DowntownLong Beach, 944 Pacific offers a 93 walk score, providestenants with ample surrounding amenities andtransportation options.


Address 944 Pacific Avenue

Asking Price $2,450,000

Total Building Area 4,583 Sq ft

Lot Size 6,766 Sq ft

Zoning LB PD30

Unit Mix1 (2 bed / 2 bath) 1 (2 bed / 1 bath)4 (1 bed/ 1 bath)

Parking 10 spaces

Laundry In-Unit

UtilitiesWater – 1 meter

Electric – 6 metersGas – 6 meters

APN 7273-014-003

Original Build | Occupancy Date 1959 | 2020

PG 5

4.63% 15.42GRM

$534 $362

ANNUAL NOI

$113KCurrent Price Per Unit

$408K

FINANCIAL HIGHLIGHTS

CAP RATE

Building Price/SF ($) LOT Price/SF ($)

FINANCIALS

* Unit square footage is approximated per Seller / Buyer to verify. * *Proforma – based on market rents within 0.75 miles from subject property

Unit # Unit Type Unit SF* Rent/SF Proforma Rent**

1 2 Bed / 2 Bath 950 $2.95 $2,800

2 2 Bed / 1 Bath 833 $3.24 $2,700

3 1 Bed / 1 Bath 700 $2.78 $1,950

4 1 Bed / 1 Bath 700 $2.70 $1,895

5 1 Bed / 1 Bath 700 $3.00 $2,100

6 1 Bed / 1 Bath 700 $2.78 $1,950

Total/Average 4,583 $2.92 $13,395


P R O F O R M A R E N T R O L L

EXPENSES

INCOME

** DEBT SERVICE ASSUMPTIONS LTV = 60%. INT = 4.5%. Fees = 0.50%. Monthly Payment = $7,448

*The property is in process of being leased up

I N C O M E &E X P E N S E S

ANDERSON COMMERCIAL 2828 E 6th Street | [email protected]

PROFORMA

Property Tax 30,625

Insurance 1,604

Management (3%) 4,678

Landscaping 600

Maintenance (2%) 3,118

Utilities 900

Reserve 900

Total 42,425

PROFORMA MONTHLY ANNUAL

Gross Potential Rent* 13,395 160,740

Less: Vacancy at 3% (402) (4,822)

Effective Gross Income 12,993 155,918

Less: Expenses 3,535 42,425

NET OPERATING INCOME 9,458 113,493

Debt Service** (7,448) (89,379)

Cash Flow 2,009 24,114

Principal Reduction 1,976 23,714

Gross Equity Income 3,986 47,828

Annual Depreciation 43,655

Cap Rate 4.63%

PG 8

PROJECTOVERVIEW

Asset HighlightsCompletely Reimagined• Brand new modern turn-key ‘loft’ like

apartments

• Best in-class interior finishes

• Drought tolerant landscaping

• Automated gated parking

• In-unit washer/dryer hook-ups

• Private balcony or private patio spaces in 3 of the 6 apartments

• Separately metered for gas and electric with high-efficiency lighting for low utility costs

PG 10

Value-Add Potential• Property contains excess parking per city code (8 spaces required, 10 provided),

allowing for new ownership the ability to entitle the addition of 1 new apartment as well as 2 additional accessory dwelling units.

• The 1 new unit can be any number of bedrooms/bathrooms, attached to the existing structure so long as a rear and side setback of 4 FT is met.

• Each of the 2 new ADU’s can be up to 750 SF each and allowed to be constructed detached from the property.

• No City Impact fees are due related to the entitlement of the 2 ADU’s (only school fees will apply), saving thousands of dollars in soft costs.

• No elevator is required for the additional units.

Planning and Entitlement Information Provided by:Burnham Planning and EntitlementsDerek Burnham, [email protected]

http://burnhamdevelopment.com

http://burnhamdevelopment.com

PG 11

CURRENT| EXTERIOR 1st FLOOR

ANDERSON COMMERCIAL 944 Pacific Ave | [email protected]

PRIVATE YARD FACING EAST TOWARDS PARKING PARKING & REAR STAIR

PG 12

CURRENT| EXTERIOR 2nd FLOOR


VIEW TO THE EAST TOWARDS REAR PARKING VIEW TO THE WEST TOWARS PACIFIC AVE.

PG 13

CURRENT| INTERIOR


UNIT #4 - KITCHEN UNIT #4 – BEDROOM WITH VIEW INTO LIVING ROOM

PG 14

CURRENT| INTERIOR


UNIT #3 KITCHEN & DINING UNIT #3 BATHROOM

PG 15

RENDERING| TOP-DOWN SITE PLAN


PG 16

FLOOR PLANS | GROUND FLOOR


Unit #1950 SF Unit #2

833 SF

PG 17

FLOOR PLANS | SECOND FLOOR


Unit #4700 SF

Unit #3700 SF

Unit #5700 SF

Unit #6700 SF

PROPERTYCOMPARABLES

939 Pacific Ave

2

455 Rose Ave

4

500 Junipero Ave

PG 19

944 Pacific Ave (Subject)

12

35


53

137 W 6th

4

S A L E SC O M P S

SALES COMPS

Source: CoStar and MLS. Reported Cap rate and Sale price*944 Pacific Ave NOI, CAP, and GRM based on Proforma Assumptions

Comp Address # Units Year Built Bldg SF Lot SF Price $/Unit NOI Cap Rate GRM Unit Mix COE

2 939 Pacific Ave 13 1959 7,836 7,504 $3,375,000 $259,615 $169,204 4.98% 13.41 13 - 1b/1b 10/21/19

3 137 W 6th 11 2016 12,955 7,501 $4,850,000 $485,000 $223,585 4.61% 14.26

1 - Retail1 – 1b/1b1 – 2b/1b3 – 2b/2b

5 – 2b/2.5b

2/2/2017

3 455 Rose Ave 16 1963 13,600 6,656 $5,712,500 $357,031 $272,682 4.77% 14.664 – 3b/2b8 – 2b/2b4 – 1b/1b

12/3/19

4 500 Junipero 10 1963 6,160 6,170 $3,100,000 $310,000 $140,636 4.54% 13.23 8 - 1b/1b2 – 2b/1b 10/17/19

Averages 13 1961 9,198 6,777 $4,062,500 $312,500 $194,174 4.76% 13.89

1 944 Pacific Ave* 6 2020 4,583 6,766 $2,450,000 $408,333 $113,493 4.63% 15.42 1 - 2b/2b1 – 2b/1b4 - 1b/1b


RENT COMPS1 BEDROOM

230 W 3rd

2

595 Pine Ave

3

225 W 3rd

4

145 W Broadway

5

944 Pacific Ave (Subject)

3

42

5

1

PG 21


RENT COMPS2 BEDROOM

137 W 6th St

2

145 W Broadway

3

595 Pine Ave

4

230 W 3rd

5

404 Pine Ave

6 944 Pacific Ave (Subject)

PG 22

1

6

5

3

42

1


RENT COMPS

Source: CoStar and MLS. Reported Closed and Active Lease Rates

Comp Address Avg. Unit Size (SF)

Avg. Unit Rent

Avg. Rent/SF Year Built

2 137 W 6th St 1,040 $2,750 $2.64 2016

3 145 W Broadway 1,074 $2,846 $2.65 1992

4 595 Pine Ave 1,075 $2,757 $2.56 2019

5 230 W 3rd 1,083 $3,505 $2.23 1984

6 404 Pine Ave 1,098 $2,811 $2.56 2018

Averages 1,074 $2,934 $2.53

1 944 Pacific Ave 891 $2,750 $3.08 1959/2020

PG 23

Two Bedroom One BedroomComp Address Avg. Unit

Size (SF)Avg. Unit

RentAvg.

Rent/SF Year Built

2 230 W 3rd 716 $2,375 $3.32 2020

3 595 Pine Ave 656 $2,196 $3.35 2019

4 225 W 3rd 613 $1,954 $3.19 1961

5 145 W Broadway 669 $2,252 $3.37 1992

Averages 663 $2,194 $3.31

1 944 Pacific Ave 700 $1,974 $2.82 1959/2020


LONG BEACHOVERVIEW

#9 Fastest Gentrifying US cities

Realtor.com

Sunset Magazine's coolest SoCal beach community, Long Beach is an eclectic, approachable, and progressive city bustling with opportunity. Long Beach currently has (including planned projects) over $5 billion in private investment stemming from real estate development.

Long Beach is ranked Top 10 in the US in the following categories:

SoCal’s Coolest Beach Town

Sunset Magazine

Most livable cities for those under the age of 35

#8 by Vocativ

10th in America for Top Places for Freelancers

Based on rent, health insurance and cell phone costs as sourced by NerdWallet.

Digital City

For sixth consecutive year, by the Center for Digital Government’s Digital Communities program.

Most Walkable Cities in Nation

DTLB earns highest score within city. Long Beach is one of the ten most walkable cities in the entire nation according to Walk Score.

Best Airports in the U.S.

Condé Nast Travel Readers' Choice Award (#7):

Most beautiful airports in the world, the only U.S. site to make the list - BBC

Long Beach Airport was named the best airport for dining in a 10best.com readers’ choice poll sponsored byUSA today.


L O N G B E A C H T R A J E C T O RYS I G N I F I C A N T R E V I TA L I Z AT I O N

LONG BEACHMARKET TRAJECTORY(continued)

A SENSE OF PLACE• Concentration of tech, media, advertising,

engineers, healthcare, government and skilled blue-collar workers, artists, university students and a vibrant LGBTQ community.

• Long Beach truly is a great city to live, work, play, obtain an education and to stay and grow.

DEMAND OUTPACING SUPPLY• Long Beach (including the South Bay) has a job

base of 550,000 workers, and a population of 760,000 people. The ratio of population to upscale apartment units is 800:1 – there is only one modern apartment unit for every 800 people.

▪ For comparison, the ratio in downtown LA is 23:1, and in Pasadena it’s 12:1.

GROWING AFFLUENT TENANT BASE▪ Downtown Long Beach (DTLB) has seen a resurgence

in total private employment, with a 6.5% year-over-year increase, surpassing the city-wide employment growth rate of 3.9% and is experiencing its lowest unemployment rate in more than 25 years.

▪ DTLB has growing incomes and higher buying power, with overall spending potential up by 67% since 2013.

▪ DTLB employees are among the highest paid in the entire city – workers in DTLB earn 31.3% more than those citywide, at an average of $67,800 annually.Average household income in the DTLB core is $71,169 and the median age is 40.

▪ DTLB has seen a population increase of 17%since 2010.

LARGE SCALE INVESTMENT▪ In 2019, Long Beach completed construction of a new

$525 million Civic Center, the second world-class library in the span of two years and is currently finishing construction on the new $1.5 billion Gerald Desmond bridge.

PG 26

North Pine is the most up-and-coming neighborhood in Downtown. Both developers and investors have led the careful & creative re-imagining of North Pine. North Pine has several exciting residential and mixed-use projects in the planning and construction phases for ground-up development, including a site two blocks South of 944 Pacific by Holland Partners, where they are building 200+ ground-up luxury apartments.

North Pine has recently become a 'sweet tooth' neighborhood, with the recent addition of a string of dessert-based businesses like The Pie Bar, Romeo Chocolates, Saints & Sinners Bake Shop, and more—it is a highly frequented neighborhood by both locals and visitors. Neighboring districts West Gateway, East Village Arts and most recently, Pine Ave. / Promenade has seen exponential growth -- a host of eateries, award-winning microbrews, and local boutiques have reinvigorated the downtown footprint. PG 27

N O R T H P I N ED E V E L O P M E N T

ANDERSON COMMERCIAL 2828 E 6th Street | [email protected]

230 W 3rd

1 Queen Beach Printers (SW Corner of 10th/Pine) - Existing structure to be demolished with proposed mid-rise mixed-use apartments with ground-floor retail.

2 927 Pine Avenue - Existing structure to be demolished with a proposed new small-lot hotel with ground-floor retail to be constructed.

3851 Pine Avenue

- 11,570 SF of meticulously remodeled creative office space recently completed with three retail suites on the ground level.

3

1

2

S

PG 28

PLANNED AND COMPLETED PROJECTS

The information contained in this document has been obtained from sources believed to be reliable. While the Anderson Real Estate Group does not doubt itsaccuracy, the Anderson Real Estate Group has not verified it and makes no guarantee, warranty or representation about it and it is the responsibility of anyprospective purchaser to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates are used for example only anddo not represent the current or future performance of the property. The value of this transaction to any prospective purchaser depends on tax and other factorswhich should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property todetermine to your satisfaction the suitability of the property for your needs. All marks displayed on this document are the property of their respective owners.

MATTHEW FIRTHManaging [email protected]. #01903073

Anderson Real Estate Group | LIC. # 019672922883 E Spring Street STE #260, Long Beach, CA 90806

AndersonREG.com/CRE

Keller Williams Pacific Estates | LIC. # 01917184

PRESENTED BY:

Jack O’[email protected]. #02106697

pacific avenue long beach · 1 (2 bed / 2 bath) 1 (2 bed / 1 bath) 4 (1 bed/ 1 bath) parking 10...

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