ICONIC TURN-KEY USC OPPORTUNITY€¦ · PROPERTY OVERVIEW Property Address 1277 W 23rd Street Los...

I C O N I CEXCELLENCE IN REAL ESTATE TURN-KEY USC OPPORTUNITY

I C O N I CEXCELLENCE IN REAL ESTATE

TABLE OF CONTENTS


2 THE MAGNOLIA

1277 W 23RD STREETTURN-KEY USC OPPORTUNITY

Property Overview 6Investment Overview 8Property Photos 10-13Location Overview 14Financial Overview 19Rent Survey 23Sales Comparables 26

AGENT CONTACT

PETER STRAUSSPartnero: 747-444-3303m: [email protected] #01335696

16530 Ventura BlvdSuite 409Encino, CA 91436

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The Magnolia Apartments1277 W. 23rd Street is a 6-unit, 2-story apartment building located in short proximity to the University of Southern California. Five of the units have been reconfigured and extensively renovated with designer finishes. This turn-key asset has a going-in CAP Rate of 5.27%.

INVESTMENT overview


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1277 W 23RD STREETTURN-KEY USC OPPORTUNITY


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PROPERTY OVERVIEWIconic Investments is pleased to present for sale The Magnolia, a turn-key USC student housing property. In 2018 the building was comprehensively updated, and five of the six units were fully renovated and remodeled. The units were taken down to the studs and floor-plans were reconfigured to increase the bedroom count. The interior remodel includes water-resistant laminate hardwood flooring, extensive recessed lighting throughout, individual air conditioning units in bedrooms, custom kitchen cabinetry with quartz countertops, stainless-steel appliance packages, large walk-in showers with designer tile, European-style vanities, and, anodized bronze aluminum windows. The building has all new copper plumbing, ABS drain lines, and a new main electrical panel. The exterior of the property has been recently landscaped and new exterior paint and motorized gate. All work was completed following approved architectural and engineering plans and with fully approved permits.

Newly Renovated Units Include:• Water-Resistant Laminate Hardwood Flooring• Extensive Recessed Lighting Throughout• Individual Air-Conditioning Units in Each Bedroom• Custom Kitchen Cabinetry with Quartz Counter-Tops• Stainless-Steel Appliance Packages• Large Walk-in Showers with Designer Tile• European-Style Vanities• New Anodized Bronze Milgard Windows

Building Improvements Include:• All-New Copper Plumbing in All Units• All-New ABS Drain System• New Main Electric Panel & Individual Sub-Panels• Re-Surfaced Stucco• Newly Painted Exterior• New Landscaping• New Motorized Security Gate

Located within the monitored USC DPS (Department of Public Safety) patrol zone, The Magnolia is minutes from the USC campus. As a student housing-focused project the property offers individual unit leases with multiple parental guarantees per lease. The property is occupied 51 weeks of the year, starting August 1, and ending July 23, giving ownership one week for turnover. Leasing activity generally commences in January with all of the units typically filled by March, for move-in starting in August. With all-new major components (plumbing and electrical), the property is low-maintenance.

Priced at $2,300,000, the property offers a going-in cap rate of 5.27%, allowing a buyer to achieve very high leverage, possibly up to 75% loan-to-value. The offering has approved architectural and structural plans from the City of Los Angeles, to reconfigure the un-renovated unit from a 2-bedroom to a 3-bedroom-unit, which can be executed upon the tenants vacating. A buyer will have the ability to increase the rent from current $856 to $3,150. The property has a pro-forma cap rate of 6.38%.


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5 Units have been rehabbed

and are turn-key

DPS Located in the

USC DPS Patrol Zone

8K Increase in enrollment of 8k

students since 2010


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PARCEL MAPINVESTMENT OVERVIEW

Address 1277 W 23rd StreetLos Angeles, CA 90007

Submarket USC Housing

Assessor Parcel Number 5055-019-013

IMPROVEMENTS 6 Apartment Units

Year BUILT 1964

parking 6 Spaces

GROSS SQUARE FOOTAGE 4,370 (Square Feet)

Estimated Land Area 5,863 (Square Feet)

UTILITIES Individually Metered

Zoning LARD2

MAGNOLIA APARTMENTS1277 W 23rd Street

Los Angeles


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MAP OF THE AREA

renderings 3 bedroom unit

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3 bedroom unit photos

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renderings 2 bedroom unit

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2 bedroom unit photos

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Location overview 1277 W 23RD STREETTURN-KEY USC OPPORTUNITY


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University ofSouthern California

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Within one block of The Magnolia, at the intersection of Hoover and 23rd Street, residents can find hip eateries like Bacaro LA, Natures Brew, Eabes Ramen and Tapas, Pete’s Burgers, and Amandine Cafe. Natures Brew, a bohemian coffee-shop housed in a high-ceilinged industrial space, offers gourmet organic food and pastries, and is a favorite among USC students during the day. At night, Bacaro LA serves up light Spanish tapas and sangria in a cozy wine bar setting.

The new USC Village mixed-use complex located three-quarters of a mile directly south of The Magnolia, at Hoover and 30th Streets, is a 15-acre complex comprised of 1.25 million square feet of retail, classroom, and living spaces. Built at a cost of over $700 million, and completed in 2017, the complex is home to a freshman honors college, a sophomore honors college, and six themed colleges for second-year students, as well as national retailers and restaurants. The classic Ivy League architecture, combined with a town square design complete with central piazza, creates an instant sense of history and elevates the surrounding neighborhood.

AREA HIGHLIGHTS

USC Village Destinations Include:• Target

• Trader Joe’s

• Starbucks

• Abercrombie & Fitch

• Core Power Yoga

• USC Fitness Center

• CAVA

• Wahlburgers

• Trejo’s Tacos

Also three-quarters of a mile south of The Magnolia, at Hoover Street and Jefferson Boulevard, is the University of Southern California main campus.

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KoreatownTo the north is the bustling Koreatown neighborhood, which is home to many bars and casual dining outlets that help to create a buzzing nightlife scene. There are Korean BBQ restaurants with tabletop grills, plus karaoke joints, hip speakeasies and flashy clubs, as well as the landmark Wiltern Theatre, an art deco music venue. In addition a new Target, YogaWorks and the Line Hotel.

Downtown Los AngelesThe L.A. Live entertainment complex, Staples Center arena, and the lively urban neighborhood of South Park are all within a short drive of The Magnolia. This area began to transform into an urban oasis in the early-2000’s, with new development continuing to this day. Luxury condominium and apartment towers line the streets, and stylish restaurants and bars serve the downtown professional crowd, residents, and USC students nightly. The area is easily accessed by car and the Blue Line Metro which can be accessed near the USC campus.

Exposition ParkAnchored by the United Airlines Los Angeles Memorial Coliseum, Exposition Park is at the heart of the University and City sporting and cultural life. The Coliseum serves the home field of the USC Trojans NCAA football team and the Los Angeles Rams NFL football team. Exposition Park also houses the new MLS Los Angeles Football Club’s Banc of Los Angeles stadium, the Museum of Natural History, the California Science Center, home to the Space Shuttle Endeavour, and the California African American Museum. Currently in development is the $1 billion Lucas Museum of Narrative Art.

Within two miles of The Magnolia residents can enjoy some of the best that Los Angeles has to offer.

AREA HIGHLIGHTS

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FINANCIAL overview 1277 W 23RD STREETTURN-KEY USC OPPORTUNITY


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INVESTMENT OVERVIEWAsset The Magnolia Apartments

Location 1277 W 23rd StreetLos Angeles, CA 90007

Opportunity 6 Apartment Units

RENOVATED UNITS 5 Units Rehabbed

YEAR BUILT 1964

PARKING 6 Spaces

GROSS SQUARE FOOTAGE 4,370 (Square Feet)

PURCHASE PRICE $2,300,000

PRICE PER UNIT $383,333

CURRENT CAP RATE 5.27%

CURRENT GRM 13.04


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RENT ROLL

UNIT MIX SUMMARYUNIT TYPE # OF UNITS

AVG SQUARE

FEET

AVERAGE CURRENT

RENTSRENT $/SF

CURRENT MONTHLY INCOME

AS-IS MARKET RENTS

AS-IS MARKET

$/SF

AS-IS MARKET

MONTHLY INCOME

RENOVATED MARKET RENTS

RENOVATED MARKET

$/SF

RENOVATED MARKET

MONTHLY INCOME

2 Bedroom + 1 Bath (Non-Renovated) 1 800 $851 $1.06 $851 $3,150 $3.94 $3,150 $3,150 $3.94 $3,150

2 Bedroom + 1 Bath (Renovated) 2 550 $2,200 $4.00 $4,400 $2,200 $4.00 $4,400 $2,200 $4.00 $4,400

3 Bedroom + 1 Bath (Renovated) 3 800 $3,150 $3.94 $9,450 $3,150 $3.94 $9,450 $3,150 $3.94 $9,450

CURRENT RENOVATED

Unit # Status Unit Type Unit Sq. Ft Current Rent Per Sq. Ft As-Is Market Rent Per Sq. Ft Renovated

Market Rent Per Sq. Ft

1 Non-Renovated 2 Bedroom + 1 Bath 800 $851.04 $1.06 $3,150.00 $3.94 $3,150.00 $3.94

2 Renovated 3 Bedroom + 1 Bath 800 $3,150.00 $3.94 $3,150.00 $3.94 $3,150.00 $3.94





TOTAL 12 Units $14,701.04 $3.48 $17,000.00 $3.96 $17,000.00 $3.96

METRICSPROPERTY OVERVIEW

Property Address 1277 W 23rd Street

Los Angeles, CA 90007

Assessor Parcel Number 5055-019-013

Market Los Angeles

Sub-Market USC

Zoning LARD2

Number of Units 6

Year Built 1964

Gross Building Square Feet 4,370

Lot Size 5,863

INVESTMENT OVERVIEW

Purchase Price $2,300,000

Price Per Unit $383,333

Price Per Square Foot $526.32

FINANCING OVERVIEW

OPERATIONS OVERVIEWINCOME CURRENT AS-IS MARKET RENOVATED MARKET

Scheduled Market Rent $176,412 $204,000 $204,000

Less: Vacancy 3.00% ($5,292) ($6,120) ($6,120)

Subtotal: Effective Rental Income $171,120 $197,880 $197,880

Other Income

Plus: Laundry Income $1,200 $1,200 $1,200

Plus: Parking Income $3,600 $3,600 $3,600

Plus: Miscellanous Fees $300 $300 $300

Plus: LAHD/SCEP Reimbursement $333 $333 $333

Subtotal: Total Other Income $5,433 $5,433 $5,433

EFFECTIVE GROSS INCOME $176,553 $203,313 $203,313

EXPENSES

Fixed Expenses

Off-Site Management 5.00% $8,556 $9,894 $9,894

Property Tax 1.19% $27,416 $27,416 $27,416

Property & Liability Insurance $2,834 $2,834 $2,834

Subtotal: Fixed Expenses $39,844 $41,182 $41,182

Controllable Expenses

Internet $2,156 $2,156 $2,156

LAHD Fees & Administrative Costs $450 $450 $450

Repairs & Maintenance $300 $3,600 $3,600 $3,600

Turnover Costs $300 $3,600 $3,600 $3,600

Utilities $4,800 $4,800 $4,800

Rubbish Removal $2,640 $2,640 $2,640

Landscaping $1,200 $1,200 $1,200

Pest Control $600 $600 $600

Subtotal : Controllable Expenses $19,046 $19,046 $19,046

TOTAL EXPENSES ($55,290) ($56,628) ($56,628)

NET OPERATING INCOME $121,263 $146,685 $146,685

Capital Reserves $200 ($1,200) ($1,200) ($1,200)

Debt Service ($104,884) ($104,884) ($104,884)

NET CASH FLOW $15,179 $40,601 $40,601

2.64% 7.06% 7.06%

Principal Reduction $27,828 $27,828 $27,828

TOTAL RETURN $43,008 $68,429 $68,429

7.48% 11.90% 11.90%

Down Payment $575,000

Loan Amount $1,725,000

Loan to Value % 75.00%

Debt Service Coverage Ratio 1.16

Loan Type Fully Amortizing

Loan Rate 4.50%

Loan Term 5 Years

INVESTMENT RETURNS

GRM - Current 13.04

CAP Rate - Current 5.27%

GRM - Market 11.27

CAP Rate - Market 6.38%

GRM - Renovated 11.27

CAP Rate - Renovated 6.38%


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RENT SURVEY 1277 W 23RD STREETTURN-KEY USC OPPORTUNITY


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PROPERTY UNIT TYPE UNITS YEAR BUILT PARKING RENOVATED RENT SF RENT/SF

1277 W 23rd St.Los Angeles, CA 90007 2 Bedroom/1 Bath 3 1964 Yes Yes $2,200.00 550 $4.00

1321 W 36th St.Los Angles, CA 90007 2 Bedroom/1 Bath 5 1948 Yes Yes $2,300.00 700 $3.29

720 W 27th St.Los Angeles, CA 90007 2 Bedroom/2 Bath 58 1964 Yes Partial $2,600.00 900 $2.89

2655 Kernwood Ave.Los Angeles, CA 90007 2 Bedroom/1 Bath 4 1916 No Yes $2,500.00 850 $2.94

1278 W 36th St.Los Angeles, CA 90007 2 Bedrooms/1 Bath 4 1964 Yes Yes $2,250.00 900 $2.50

1352 W 29th St.Los Angeles, CA 90007 2 Bedroom/2 Bath 6 2003 Yes Yes $3,195.00 1,137 $2.81

3029 Shrine Pl.Los Angeles, CA 90007 2 Bedroom/1 Bath 11 1989 Yes Yes $3,495.00 1000 $3.50

1277 W 23rd St.Los Angeles, CA 90007 3 Bedroom/1 Bath 3 1964 Yes Yes $3,150.00 800 $3.94

3410 Walton Ave.Los Angeles, CA 90007 3 Bedroom/2 Bath 6 1924 Yes Yes $3,250.00 850 $3.82

1321 W 36th St.Los Angeles, CA 90007 3 Bedroom/1 Bath 5 1948 Yes Yes $3,200.00 800 $4.00

3425 Walton Ave.Los Angeles, CA 90007 4 Bedroom/1 Bath 2 1923 Yes Yes $3,795.00 1000 $3.80

1204 W 24th St.Los Angeles, CA 90007

3 Bedroom/1 Bath 3 1953 Yes Partial $3,500.00 900 $3.89

922 W 23rd St.Los Angeles, CA 90007

3 Bedroom/1 Bath 15 2008 Extra Yes $3,120.00 875 $3.57

RENT SURVEY

THE MAGNOLIA1277 W 23rd St

1321 W 36th St

2655 Kernwood Ave

1278 W 36th St

1352 W 29th St

3029 Shrine Pl

1204 W 24th St 922 W 23rd St

720 W 27th St

3410 Walton Ave3425 Walton Ave


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RENT SURVEY

SALES COMPARABLES 1277 W 23RD STREETTURN-KEY USC OPPORTUNITY


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2 Bedroom/1 Bath 3 Bedroom/1Bath

Made with

2 Bedroom/1 Bath 3 Bedroom/3 Bath

4 Bedroom/4 Bath

Made with

Studios 2 Bedroom/2 Bath

Made with

3 Bedroom/1 Bath

Made with


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SALES COMPARABLES

PROPERTY 1277 W 23rd St 1189 W 29th St 1201 W 36th Pl 3023 S Budlong Ave

LOCATION USC USC USC USC

NUMBER OF UNITS 6 12 4 4

YEAR BUILT 1964 1958 1907 1913

DATE SOLD Subject March 2017 May 2017 October 2017

SALE PRICE $2,300,000 $3,650,000 $2,050,000 $1,476,000

PRICE/UNIT $383,333 $304,167 $512,500 $369,000

CAP RATE 5.27% 4.80% 5.22% 5.16%

GRM 13.04 N/A N/A 13.65

PRICE/SF $526 $497 $359 $315

UNIT MIX

3- 2 Bedroom/1 Bath3- 3 Bedroom/1 Bath

4- Studios8- 2 Bedroom/2 Bath

1- 2 Bedroom/1 Bath2- 3 Bedroom/3 Bath1- 4 Bedroom/4 Bath

4- 3 Bedroom/1 Bath

2 Bedroom/1 Bath 3 Bedroom/1Bath

Made with


Made with

3 Bedroom/2 Bath

Made with


Made with


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SALES COMPARABLES

PROPERTY 1277 W 23rd St 2310 Ellendale Pl 2653 Kenwood Ave 2131 Oak St

LOCATION USC USC USC USC

NUMBER OF UNITS 6 5 4 6

YEAR BUILT 1964 1922 1916 1924

DATE SOLD Subject September 2016 February 2018 November 2017

SALE PRICE $2,300,000 $2,050,000 $1,300,000 $2,450,000

PRICE/UNIT $383,333 $410,000 $325,000 $408,333

CAP RATE 5.27% 4.91% 4.66% 5.14%

GRM 13.04 N/A 14.48 13.61

PRICE/SF $526 $450 $297 $420

UNIT MIX


5- 3 Bedroom/2 Bath 1- 1 Bedroom/1 Bath3- 2 Bedroom/2 Bath


THE MAGNOLIA1277 W 23rd St

1189 W 29th St

2131 Oak St

2310 Ellendale Pl

3023 S Budlong Ave

2653 Kenwood Ave

1201 W 36th Pl


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SALES COMPARABLES MAP

AGENT CONTACTPETER STRAUSSPartnero: 747-444-3303m: [email protected] #01335696

16530 Ventura BlvdSuite 409Encino, CA 91436


ICONIC TURN-KEY USC OPPORTUNITY€¦ · PROPERTY OVERVIEW Property Address 1277 W 23rd Street Los...

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