City Terrace Apartments4116 City Terrace Dr. Los Angeles, CA 90063

OFFERING MEMORANDUM

PRESENTED BY

David J. Harrington National Director - Multifamily

Direct +1.310.295.1170Mobile +1.310.497.5590david.harrington@matthews.comLicense No. 01320460

PROPERTY DESCRIPTIONProperty Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Local Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Location Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Demographics Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

PRICING AND FINANCIAL ANALYSISFinancial Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Rent Roll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Property Photos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

RECENT SALES AND RENT COMPARABLESRecent Sales Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Recent Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Recent Rent Comps Map . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Recent Rent Comps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Disclaimer Statement. THIS IS NOT AN APPRAISAL: This Real Estate Broker’s Opinion of Value is intended for the sole and exclusive use of Seller, LLC (“the Client”) and may not be relied upon any person or entity other than the Client for any purpose whatsoever. This Real Estate Broker’s Opinion of Value represents only the opinion of Matthews Retail Group, Inc. (also known as Matthews Retail Advisors) as to the value of the Subject Property, subject to the assumptions and qualifications set forth herein. Matthews Retail Group, Inc. is not licensed to perform real property appraisals. Accordingly, this Real Estate Broker’s Opinion of Value does not constitute an appraisal of the Subject Property and has not been prepared in accordance with the Uniform Standards of Professional Appraisal Practice. The Real Estate Broker’s Opinion of Value set forth herein is specifically qualified by, and based solely upon, the relevant facts, circumstances, and market conditions that exist as of the date of this Real Estate Broker’s Opinion of Value, and we undertake no obligation to update, modify, or supplement this Real Estate Broker’s Opinion of Value to the extent that such facts, circumstances or market conditions subsequently change.

TABLE OF CONTENTS

J. A. Charles Wright Associate - Multifamily

Direct +1.310.295.4374Mobile +1.626.290.5965charles.wright@matthews.comLicense No. 01985584

Kyle Mirrafati Senior Associate - Multifamily

Direct +1.310.295.4269Mobile +1.949.533.4650kyle.mirrafati@matthews.comLicense No. 01911204

4

Property Overview

Opportunity

Property Description

• 8 Units, 1 Non-Conforming, Built in 1922

• 6,508 Gross Square Footage on a 6,101 Square Foot Lot

• Not Subject to Rent Control Laws

• Located in the Up and Coming City Terrace Neighborhood

• Great Unit Mix: Three 3 Bed / 1 Bath, Five 1 Bed / 1 Bath, One

Single which is Non Conforming

• Large Units that Average over 810 Square Feet Each

• Secured Entry to the Property

• Gas and Electric Separately Metered for Each Unit

• Non- Rent Control in Los Angeles County

• Parking on Site

• Over 27% Rent Upside

• Student Housing Potential near CSULA

• Purchase Non-Rent Control at Over a 5% Cap Rate

5

Location Description

4116 City Terrace is conveniently located between the 10 & 710

Freeways, offering easy access to the surrounding LA cities.

The property is near California State University of Los Angeles,

USC Medical Center, LA County Fire Department, and LA County

Sheriff’s Station. Close proximity to Downtown LA and Cal State

LA makes the location ideal for a young business professional

working in downtown or a student attending CSULA. Nearby

schools include City Terrace Elementary School, LA County High

School for the Arts and Marc & Eva Stern Math and Science High

School.

Light rail service to East LA is provided by Metro Gold Line’s

East side Extension, which opened in 2009. Los Angeles County

Metropolitan Transportation Authority (Metro) provides bus

service from East LA to throughout the LA area. In addition, local

shuttle service is provided by the “El Sol” (East Los Angeles

Shuttle).

City Terrace is bounded by the city limits of Los Angeles on the

north and west, Floral Drive on the south, and the city limits

of Monterey Park on the east. Boyle Heights is on the west,

Lincoln Heights is to the northwest, University Hills is to the

north, California State University, Los Angeles is to the northeast,

Monterey Park is to the east, and East Los Angeles is to the

south. Major thoroughfares include City Terrace Drive, Eastern

and Medford Avenues, and Herbert Street. The community is

part of ZIP code of 90063 and area code 323.

6

Location Map

Population 1-Mile 3-Mile 5-Mile

2021 Projection 32,191 358,874 832,675

2016 Estimate 31,230 347,589 801,410

2010 Census 30,393 337,456 769,603

2000 Census 29,778 343,810 766,412

Growth 2016-2021 3.08% 3.25% 3.90%

Growth 2010-2016 2.75% 3.00% 4.13%

Growth 2000-2010 2.07% -1.85% 0.42%

Households

2021 Projection 7,896 98,624 260,357

2016 Estimate 7,654 95,178 248,521

2010 Census 7,439 91,853 235,528

2000 Census 7,286 89,408 221,481

Growth 2016-2021 3.16% 3.62% 4.76%

Growth 2010-2016 2.89% 3.62% 5.52%

Growth 2000-2010 2.09% 2.74% 6.34%

2016 Est. Average Household Size 4.03 3.61 3.13

Income

$ 0 - $14,999 1,176 15,259 41,241

$ 15,000 - $24,999 1,204 15,031 35,270

$ 25,000 - $34,999 956 11,273 26,876

$ 35,000 - $49,999 1,119 14,083 33,419

$ 50,000 - $74,999 1,307 16,111 40,213

$ 75,000 - $99,999 839 9,615 25,402

$100,000 - $124,999 555 5,651 16,233

$125,000 - $149,999 257 3,164 9,972

$150,000 - $199,999 160 2,852 10,198

$200,000 - $249,999 45 1,054 4,057

$250,000 - $499,999 31 859 4,191

$500,000+ 6 225 1,448

2016 Average Household Income $54,177 $56,779 $64,386

2016 Median Household Income $41,575 $41,417 $44,369

7

Demographics Report

Investment SummaryOffering Price: $1,400,000 Number of Units: 9Property Address: 4116 City Terrace Drive Year Built: 1921

Los Angeles, CA 90063 APN: 5226-018-011Price Per Unit: $155,556 Gross Sq. Ft.: 6,508Price Per S.F.: $215.12 Average S.F. Per Unit: 723Cap (current / market): 5.15% / 7.28% Lot Size: 6,101GRM (current / market): 11.87 / 9.33 Zoning: LCC3*

Unit MixTotal Units Unit Mix Unit Mix % Current Ave Rent Current Monthly Rent Market Rent Market Monthly Rent

1 Non-Conforming Single 13% $850 $840 $1,000 $1,0005 1+1 63% $990 $4,950 $1,250 $6,2503 3+1 38% $1,342 $4,025 $1,750 $5,250

Scheduled Monthly Rent: $9,825 $12,500Scheduled Yearly Rent: $117,900 $150,000

8

Financial Overview

Annualized Operating SummaryCurrent Market

Scheduled Gross Income: $117,900 27% upside $150,000Less Vacancy Reserve: 3.0% $3,537 3.0% $4,500Gross Operating Income: $115,983 $145,500Expenses: 35.8% $42,266 29.0% $43,511Net Operating Income: $72,097 $101,989Loan Payments: $60,097 $60,097Pre-Tax Cash Flow: 3.4% $12,000 11.9% $41,892Plus Principal Reduction: $18,873 $18,473Total Return Before Taxes: 8.7% $30,474 17.2% $60,365

* As a percent of Scheduled Gross Income

** As a percent of Down Payment

Laundry income is estimated at $15 per unit per month

Pro Forma Annual Operating ExpensesCurrent Per Unit % of SGI

*Taxes 1.250% x Sale Price $17,500 $1,944 15%*Insurance Actual 2015 $2,705 $301 2%*Reserves $200 x Units $1,800 $200 2%Off-Site Management 4.0% x GOI $4,575 $508 4%Repairs & Maintenance $500 x Units $4,500 $500 4%Contract Services Actual 2015 $1,554 $173 1%Utilities Actual 2015 $7,382 $820 6%General Administration $250 x Units $2,250 $250 2%

Total Expenses $42,266 $4,696 35.8%

Current Per Unit % of SGINon-controllable expenses: Taxes, Ins., Reserves: $22,005 $2,445 18.7%

Total Expense with out Taxes $24,766 $2,752 21.0%

9

Rent Roll# Unit Mix Rent Market Rent

1 1 3+1 $1,600 $1,750

2 2 3+1 $1,225 $1,750

3 3 3+1 $1,200 $1,750

4 4 1+1 $950 $1,250

5 5 (Non-Conforming) Single $850 $1,000

6 A 1+1 $950 $1,250

7 B 1+1 $950 $1,250

8 C (Vacant) 1+1 $1,250 $1,250

9 D 1+1 $850 $1,250

Totals 9 $9,825

Averages $1,092

10

Financial Overview

11

Property Photos

1

12

Recent Sales Map

1 4330 City Terrace DriveLos Angeles CA 90063

Sale Date . . . . . . . . . 1/15/2016Sales Price. . . . . . . . $1,550,000CAP Rate. . . . . . . . . . . . 4.60%GRM . . . . . . . . . . . . . . . 12.63Price Per Unit . . . . . . . $193,750Price Per Foot . . . . . . . . $219.54# of Units . . . . . . . . . . . . . . 8Year . . . . . . . . . . . . . . . 1955

Comp (Avg) Subject Property

Price Per Unit $256,250 $175,000

Price Per SF $235.90 $215.12

Cap Rate 5.08% 5.25%

GRM 12.98 11.71

13

Recent Sales

Street Address City, State Zip

1

2

3

14

Rent Comparables Map

331077 N ALMA AVE LOS ANGELES CA 90063

4302 CITY TERRACE DR LOS ANGELES CA 90063

105 S MATHEWS ST LOS ANGELES CA 90033

Unit Type Comp (Avg) Subject Property

Single $950 $1,000

1 Bedroom 1 Bathroom $1,095 $1,250

3 Bedroom 1 Bathroom $1,600 $1,750

Unit SF Asking Rent

3+ 1 $1,600

Unit SF Asking Rent

1 + 1 $1,095

Unit SF Asking Rent

Single $950

1

2

15

Rent Comparables

841 Apollo Street, Suite 150 | El Segundo, CA 90245 | www.matthews.com

City Terrace Apartments4116 City Terrace Dr. Los Angeles, CA 90063

MARKET POSITIONING AND PRICING ANALYSIS

David J. Harrington National Director - Multifamily

Direct +1.310.295.1170Mobile +1.310.497.5590david.harrington@matthews.comLicense No. 01320460

J. A. Charles Wright Associate - Multifamily

Direct +1.310.295.4374Mobile +1.626.290.5965charles.wright@matthews.comLicense No. 01985584

Kyle Mirrafati Senior Associate - Multifamily

Direct +1.310.295.4269Mobile +1.949.533.4650kyle.mirrafati@matthews.comLicense No. 01911204