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3901RRubyubyS e v e n t e e n A p a r t m e n t H o m e s

A R A R E G E M I N T E M E S C A L

This Memorandum does not constitute a representation that the business or affairs of the Property or Seller since the date of preparation (August 2019) of this Memorandum have remained the same. Analysis and verification of the information contained in this Memorandum are solely the responsibility of the prospective purchaser.

Additional information and an opportunity to inspect the Property will be made available upon written request of interested and qualified prospective purchasers. Seller and Agent each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the Property, and/or terminate discussions with any party at any time with or without notice. Seller reserves the right to change the timing and procedures for the Offering process at any time in Seller’s sole discretion. Seller shall have no legal commitment or obligations to any party reviewing this Memorandum, or making an offer to purchase the Property, unless and until such offer is approved by Seller, and a written agreement for the purchase of the Property has been fully executed and delivered by Seller and the Purchaser thereunder.

This Memorandum and the contents, except such information which is a matter of public record or is provided in sources available to the public, are of a confidential nature. By accepting this Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not forward, photocopy or duplicate it, that you will not disclose this Memorandum or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Seller or Agent, and that you will not use this Memorandum or any of the contents in any fashion or manner detrimental to the interest of Seller or Agent.

The Listing Team intends to represent only the Seller. Prospective Purchaser may elect to represent itself, hire and compensate its own representative

40th Street40th Street

SAN FRANCISCOEMERYVILLLE

MACARTHUR

3901RRubyuby

RICHARD KNUTSON, CCIM510.995.3564 [email protected] RE LICENSE #00831650

WILL THOMAS510.923.9155 [email protected] RE LICENSE #01745655

3901 RUBY STREET | OAKLAND 3

EXECUTIVE SUMMARYThe apartment community at 3901 Ruby is situated in Oakland’s trendiest

neighborhood. The Temescal District was long a quiet residential area fill-

ing the gap between Downtown and Rockridge. Today, the Temescal has

emerged with a distinct identity composed of active streetscapes along Tele-

graph Avenue and Broadway, popular eateries and bars, new retail stores,

strong local employment and excellent transit linkages throughout the San

Francisco Bay Area. The MacArthur BART Station, just two blocks away, is

a transfer point, affording service throughout the BART system. It is burgeon-

ing with new development, welcoming an ever-improving demographic of

higher-income households bringing an appetite for diverse urban lifestyles.

The building is a simple mid-century example of efficient one-bedroom apart-

ments. It has seventeen units in a three-story frame and stucco structure with

gated exterior entry. There are eight open parking spaces that could be

improved with carports. There is additional unused space on the rear ground

floor that could serve as bike storage or private lockers. The flat roof was

replaced in the last three years, and a new water heater was installed in

2016. A linear open yard area could be landscaped and enhanced for

casual outdoor recreation.

The property is being offered to qualified investors who understand the as-

set’s value-add potential over the next investment period. Conservative rent

analysis indicates that current rents are about 24% below market potential.

Six unit interiors have been fully renovated, proving the property’s potential.

The property is being offered free and clear of debt, allowing the new owner

to structure financing to its own preferences.

INVESTMENT SUMMARY

Address 3901 Ruby Street, Oakland, CA

YeAr Built 1962

totAl # of units 17 Apartment Homes

net rentABle AreA ±8,160 SF

totAl PArking sPAces 9 Spaces - 8 cars, 1 motorcycle

current Avg. rent $1,610

current Avg. rent Psf $3.35

current occuPAncY 95%

Price $4,400,000

Price Per unit $258,824

Price Per squAre foot $539

current income grm 13.0

mArket income grm 10.5

current income cAP 3.66%

mArket income cAP 5.15%

UNIT MIX

Unit Type # Units Avg SF Current Avg Rent

Current Avg Rent PSF

1bd/1ba 17 480 $1,610 $3.35


EXECUTIVE SUMMARY - INVESTMENT HIGHLIGHTS

DISTINCTIVE LOCATION

The popular Temescal neighborhood is an up & coming destination for

trendy restaurants and beer & wine enthusiasts. Dedicated bike lanes

along Telegraph Avenue serve the hipster population that recently dis-

covered Temescal and is transforming its character. Whether old-timers

or newcomers to Oakland, a visit to Temescal should be on the top of the

list. The MacArthur BART Station is just steps from 3901 Ruby, providing

excellent transit throughout the San Francisco Bay Area.

SIGNIFICANT RENTAL UPSIDE Property performance shows that the rent potential of 3901 Ruby is about

24% above the current schedule. A well-planned program to optimize

net income may increase the Property’s investment value.

STRONG EMPLOYMENT TRENDCurrent job formation in Oakland is very robust. Downtown office occu-

pancy stood at 89% in the last quarter. Office rent growth was 6.8% over

the last year, evidencing strong demand from new employers to Oakland.

Employers coming to DT Oakland include Credit Karma, Delta Dental,

We Work, Blue Shield, and Oracle. Kaiser Permanente is constructing

a new headquarters, the largest office project on the West Coast since

Apple Park.

LAKE MERRITT Offering lakeside jogging/walking paths, rowing and sailing amenities,

romantic gondola cruises, abundant lushly-landscaped park features,

Lake Merritt is considered the “Jewel of the East Bay”. The long-term com-

mitment to the Lake is being demonstrated by the on-going $200 million

implementation of the Lake Merritt Master Plan.

DOWNTOWN OAKLANDA mecca for employment opportunities and business ventures: Downtown

Oakland has experienced dramatic and positive growth for the past five

years. Sunny weather, vibrant art scene and standout restaurants coupled

with the convenience of local transportation makes Downtown Oakland a

major player in Bay Area business growth.

RECENT IMPROVEMENTSThe building has been updated with a repainted exterior, new landscap-

ing and fencing, and energy efficient windows. Current projects include

re-coating the parking area and installing new gates.


LOCATION - AREA OVERVIEW

amenities, employment and business opportunities combine to make Oakland an enviable place to live and do business. The “jewel” of Oakland, Lake Merritt, with its 122-acre Lakeside Park, offers a variety of outdoor recreational activities including sailing, rowing, a walking/biking path, a wildlife refuge, a children’s theme park, and even pivate gondola cruises. It ranks as one of the 10 greenest cities in the country.

Downtown Oakland offers renowned restaurants, clubs, venues and galleries in Jack London Square, Old Oakland, Chinatown and City Center. The Uptown Area Is the Bay Area’s newest hot spot for the best in dining as well as in live music and theater at the Art Deco Paramount Theater of the Arts and the recently renovated Fox Oakland. A wide variety of unique neighborhood shopping and dining districts can also be found nearby on Piedmont Avenue and College Avenue.

As the regional transportation hub, Oakland has an international airport and a deep-water port, the fifth largest container port in the country. Oakland’s strategic location and proximity to main highway arteries offer easy access to major cities in the Bay Area and beyond. Public transportation opportunities include bus, ferry, train and BART with connections to San Francisco, Contra Costa County and the South Bay. Oakland also has two car sharing programs. The “B on Broadway”, a free shuttle, runs up and down Broadway from Jack London Square to Grand Ave.

BAY AREA The San Francisco Bay Area consists of nine counties and 101 cities, cover-ing 6,923 square miles. The current population of nearly 7.4 million ranks the Bay Area as the sixth-largest metropolitan area in the country. It is among the world’s most innovative, competitive and diverse regional economies with highly educated workers. global influence in high-tech and biotech, proximity to the growing Pacific Rim economies, and world class universities. The region’s natural beauty, diverse cultural attractions, professional sports teams, active business conventions, and leading global position in the wine industry attract more than 16 million visitors annually and make the Bay Area a treasured place to live. OAKLAND

Incorporated in 1852, Oakland has grown to a City of over 400,000 residents today. As one of the most ethnically diverse cities in the nation, Oakland embraces a rich human mosaic of heritage, age, occupations and incomes. More than 125 different languages and dialects are spoken in the city. It is a city that offers urban sophistication but still maintains a neighborhood atmosphere.

Its water orientation provides panoramic Bay views and proximity to the Pacific Ocean. Rising to the east are the scenic Oakland Hills, offering parks and recreation and breathtaking vistas of the entire Bay Area. The City’s lush parklands, plentiful open spaces, world-class attractions, abundant cultural

#7 in USA Today Best Local Food Scenes 2015

National Geographic’s Best Trips List 2019


LOCATION - TRANSPORTATION MAP

ALAMEDA

BERKELEY

EMERYVILLE

SAN FRANCISCO

OAKLAND INTERNATIONAL AIRPORT15 Miles - 23 Minutes

FERRY LINES

FERRY LINES

OAKLAND

PIEDMONT

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DRIVE TIMESTo DT San Francisco - 37 minutes/9.8 milesTo UC Berkeley -15 minutes/3.0 miles

WALKTo MacArthur BART - 0.4 miles/7 minutes

BART - MacArthur StationTo DT San Francisco - 17 minutesTo Walnut Creek - 17 minutes

3901RRubyuby


LOCATION - AREA AMENITIES

Mosswood Park

Broa

dway

Broa

dway

Telegraph

Telegraph

Piedmont Avenue restaurants and shops

MacArthur

Piedmont Avenue

Piedmont Avenue

W MacArthur BlvdW MacArthur Blvd

Shops at the Ridge

Pill Hill

Temescal3901RRubyuby

Walk Score - 95 (Walker’s Paradise)

Transit Score- 71 (Excellent Transit)

Bike Score - 94 (Biker’s Paradise)


THE PROPERTY

• Gas Stoves• Updated Kitchen Cabinets *• Carpet• New Bathroom Fixtures *• Stone Kitchen Countertops *• Stainless Steel Appliances *• Vinyl Plank Floors *

• Laundry Facilities On-Site• Gated Access to Building• Individual PG&E Meters• Quiet Residential Neighborhood• 7 Minute Walk to BART

* select units


FINANCIALS - VALUE ANALYSIS

In evaluating the current and potential investment performance of 3901

Ruby, the following factors contributed to our analysis:

Growing NOI - Our financial analysis looks at current, proforma and

long-term performance. Professional investors are modeling significant

rent growth into their assumptions as the economic recovery takes root.

Current market occupancy is near 98%, demonstrating our proforma

rents at already achieved levels are conservative.

Attractive Debt - The intended debt replacement is highly attractive.

Based on our Proforma NOI, positive leverage is obtainable with a fully-

amortized loan.

Opportunities for Other Income/ Expense Containment -

Leased Laundry: The laundry equipment is leased by the building, so only

a portion of the collections go the Property’s income. Coinage should be

reviewed and re-set at market rate.

There are several opportunities to increase other Income:

1) Install Bike Racks for secure interior storage.

2) Institute a Resident Utility Billing Service.

3) Install resident storage lockers in rear of the building.

4) Increase parking usage, consider carports.

There are opportunities to reduce operating expenses:

1) Conduct an energy audit to identify potential efficiencies.

2) Investigate a trash compactor to reduce garbage collection expense.

3) Research installation of solar panels to reduce electricity expense

4) Research LED lighting in common areas.


FINANCIALS - OVERVIEW

Page 1Confidential

Community Data Pricing Information HighlightsTotal Units: 17 Price: $4,400,000 Desirable Temescal locationAppx. Year Built: 1962 Down Payment 40%: $1,760,000 Near MacArthur BARTAppx. Site Area: 7,300 Loan Amount: $2,640,000 Easy Downtown accessRentable Sq. Ft.: 8,160 Price / Foot $539 Near shopping and restaurantsStories: Three Price / Unit $258,824 Motel StyleHeat: Gas Wall Units Stainless appliances in upgraded units# of Buildings: 1 Current Market On-site laundryExteriors: Stucco & Wood Income Income Off-street parkingConst. Type: Wood Frame GRM 13.0 10.5 New Exterior PaintRoof: Flat Cap Rate 3.66% 5.15% New Roof- 2016APN: 12-972-12 Cash-on-Cash 0.8% 4.5% New Water Heater - 2016

Parking9 spaces; 8 cars, 1 motorcycle Total Return 3.6% 7.3% New Windows

Unit Mix & Income DetailMix Bd/ba

gSq. Ft. Current Average PSF Average PSF

17 1Bd/1ba 480 $1,610 $3.35 $1,995 $4.1617 Totals 8,160 $1,610 $3.35 $1,995 $4.16

Current MarketIncome Income

Monthly Rental Income: $27,378 $33,915 Rent Gap: 24%Other Income

Parking $767 $875 8 Cars: $100. One Motorcycle: $75.Pass Thru $64 $64 Two units

$28,209 $34,854x12 x12

GROSS SCHED. INCOME / YR: $338,508 $418,248Vacancy Reserve & Concessions: ($10,155) 3% ($20,349) 5%Effective Gross Income: $328,353 $397,899Estimated Operating Expenses: ($167,421) 51.0% ($171,250) 43.0% Diff is Pro Mgmt.

Exp. Unit/Yr: $9,848 $10,074Exp. PSF: $20.52 $20.99

NET OPERATING INCOME: $160,932 $226,649Less Loan Payments ($146,715) ($146,715) 3.75% 5 yr fixed

CASH FLOW: From Operation $14,217 $79,934 30 yr amortizationEst. DCR: 1.10 1.54

Equity Build-Up $48,544 $48,544 Est. Yr. 1TOTAL RETURN $62,760 $128,477

Monthly Gross Income:

3901 Ruby St.Oakland, CA


FINANCIALS - RENT ROLL - AUGUST 2019

Unit Type SF Current Rent $/SF ParkingCapital

Exp.Renova-

tionsMove in

Date Market Rent $/SF Comments

101 1Bd/1ba 480 $1,475 $3.07 $100 2/2015 $1,995 $4.16

102 1Bd/1ba 480 $916 $1.91 $78 $32 11/2009 $1,995 $4.16

103 1Bd/1ba 480 $1,625 $3.39 $95 11/2015 $1,995 $4.16

104 1Bd/1ba 480 $1,850 $3.85 yes 2/2019 $1,995 $4.16

105 1Bd/1ba 480 $1,377 $2.87 4/2014 $1,995 $4.16

201 1Bd/1ba 480 $1,850 $3.85 $100 yes 2/2019 $1,995 $4.16 unit has

dishwasher

202 1Bd/1ba 480 $1,850 $3.85 $100 yes 2/2019 $1,995 $4.16

203 1Bd/1ba 480 $1,400 $2.92 7/2002 $1,995 $4.16 on-site mgr.

204 1Bd/1ba 480 $1,695 $3.53 10/2017 $1,995 $4.16

205 1Bd/1ba 480 $1,695 $3.53 $95 8/2017 $1,995 $4.16

206 1Bd/1ba 480 $1,695 $3.53 10/2015 $1,995 $4.16

301 1Bd/1ba 480 $1,055 $2.20 $32 8/2018 $1,995 $4.16

302 1Bd/1ba 480 $1,850 $3.85 yes 12/2018 $1,995 $4.16

303 1Bd/1ba 480 $1,695 $3.53 6/2017 $1,995 $4.16

304 1Bd/1ba 480 $1,850 $3.85 yes 5/2019 $1,995 $4.16

305 1Bd/1ba 480 $1,850 $3.85 $100 yes 3/2019 $1,995 $4.16

306 1Bd/1ba 480 $1,650 $3.44 11/2015 $1,995 $4.16

Totals

17 8,160 $27,378 $3.36 $668 $64 $33,915 $4.16

Rent Gap: 24%


FINANCIALS - PROFORMACategory 2019 Annualized Estimates & AssumptionsIncome Total Per UnitRent Schedule $328,536 406,980$ 23,940$ Vacancy (16,427)$ (20,349)$ (1,197)$ Est. 5% on Market Effective Rental Income 312,109$ 386,631$ 22,743$ Laundry 1,316$ 2,448$ 144$ Est. $12/Mo/Unit.Parking 9,204$ 10,500$ 618$ $100 per car space, $75 for motorcyclePass through 1,128$ 762$ 45$ $64 per month, Units 102 & 203

Effective Gross Income 323,757$ 400,341$ 23,549$

Fixed ExpensesProperty Taxes

Ad Valorem 23,098$ 60,130$ 3,537$ 1.3666% of Price per 2018-19 Tax Bill.Assessments 6,377$ 6,377$ 375$ Actual

Insurance 3,365$ 3,365$ 198$ ActualSubtotal - Fixed Expenses 32,840$ 69,872$ 4,110$

Operating ExpensesPayroll 10,812$ 10,200$ 50$ On-site Manager Est. $50/Unit/MonthGas 8,820$ 8,820$ 519$ Electric 624$ 624$ 37$ Sewer & Water 16,200$ 16,200$ 953$ Trash 11,952$ 11,952$ 703$ Telephone 1,312$ 1,312$ 77$ Repairs & Maintenance 8,739$ 8,500$ 500$ Est. $500/Unit/Yr.Administrative 13,068$ 13,068$ 769$ Management (Off-site) 16,188$ 20,017$ 1,177$ Estimated 5% of EGIBusiness License Fees 4,516$ 5,585$ 329$ $13.95/$1,000 of EGIReserve 5,100$ 5,100$ 300$ Est. $300/Unit/Yr.

Subtotal - Operating Expenses 130,171$ 171,250$ 10,074$

Net Operating Income 193,586$ 159,218$

Cap Ex. & Turnover 81,316$

Expense Factors Per Unit 7,657$ 10,074$ Per SF 15.95$ 20.99$ % of EGI 40.2% 42.8%

Broker's Proforma


MARKET OVERVIEW - SALE COMPARABLE SUMMARY

3901 ruBY street

ON MARKETPRICE: $4,400,000PRICE/UNIT: $258,824

230 orAnge street SALE DATE: 5/2019PRICE: $5,775,000PRICE/UNIT: $360,938

37 moss Avenue

SALE DATE: 12/2018PRICE: $2,770,000PRICE/UNIT: $230,833

381 AdAms Avenue


355 stAten Avenue


3921 HArrison street


472 JeAn street


S

5

61 2

3

4


MARKET OVERVIEW - SALE COMPARABLE DETAIL

230 Orange Street, Oakland, CA 94610

PRICE: $3,647,500 SALE DATE: May 2019

PRICE PER UNIT: $331,594 PRICE PER SQ FT: $365

CAP RATE: NA GRM: NA

UNITS: 11 YEAR BUILT: 1949

UNIT TYPE UNITS UNIT SIZE

1/1 5 500

2/1 6 750

381 Adams Avenue, Oakland, CA 94610

PRICE: $4,200,000 SALE DATE: April 2019


CAP RATE: 4.22% GRM: 14.65



1/1 6

2/1 6

355 Staten Avenue, Oakland, CA 94610

PRICE: $5,775,000 SALE DATE: Jan 2019


CAP RATE: NA GRM: NA



1/1 10

2/1 6

3

3901 RUBY STREET, Oakland, CA 94609

PRICE: $4,400,000 SALE DATE: On Market


CAP RATE: 3.66% GRM: 13.0


SUNIT TYPE UNITS UNIT SIZE

1/1 17 480

1

2


MARKET OVERVIEW - SALE COMPARABLE DETAIL

37 Moss Avenue, Oakland, CA 94610

PRICE: $2,770,000 SALE DATE: Dec 2018





1/1 3 498

2/1 9 853-974

4

472 Jean Street, Oakland, CA 94610

PRICE: $4,250,000 SALE DATE: August 2018


CAP RATE: 4.28% GRM: 14.50



Studio 3

1/1 12

6

3921 Harrison Street, Oakland, CA 94611

PRICE: $6,700,000 SALE DATE: Nov 2018





1/1 9

2/1 7

5

16

RICHARD KNUTSON, CCIM510.995.3564 [email protected] RE LICENSE #00831650

WILL THOMAS510.923.9155 [email protected] RE LICENSE #01745655

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