Market Positioning and Pricing Analysis · Market Positioning and Pricing Analysis 1. 3215-3219...

3215,3217 & 3219 WEST WASHINGTON BOULEVARD3219 W Washington Blvd • Los Angeles, CA 90018

Market Positioning and Pricing Analysis

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3215-3219 WEST WASHINGTON BOULEVARD

Los Angeles, CA

ACT ID ZAA0380059

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Non-EndorsementsMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any

corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or

subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about

this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

DisclaimerTHIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has

been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References

to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus &

Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

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P R E S E N T E D B Y

Laura Alice Scaturro

Member - National Office and Industrial Properties Group

West Los Angeles Office

Tel: (310) 909-54-72

Fax: (310) 909-5410

[email protected]

License: CA 01942167

Ingrid Farias-Eisner


Tel: (310) 909-5449

Fax: (310) 909-5410

[email protected]


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TABLE OF CONTENTS

MARKET COMPARABLES 03Sales Comparables

Lease Comparables

MARKET OVERVIEW 04Market Analysis

Demographic Analysis

SECTION SECTION

INVESTMENT OVERVIEW 01Property Overview

Regional Map

Local Map

Aerial Photo

Floor Plan

FINANCIAL ANALYSIS 02Tenant Summary

Lease Expiration Summary

Operating Statement

Notes

Pricing Detail

Proposal Price


4


5

INVESTMENT

OVERVIEW

PROPERTY OVERVIEW


PROPERTY OVERVIEW

Marcus & Millichap is pleased to offer for sale 3215-3219 West Washington Boulevard, a commercial storefront property positioned in the

borders of West Adams Historic District and Arlington Heights. One of a kind deal, with this property being offered in the market for the first time

after 40 years. Excellent retail property next to newly renovated Surfas Culinary District store

Constructed in 1922, the subject property is across Carson-Gore Academy and nicely located north of the 10 Freeway, south of Pico Boulevard,

East of the Washington Irving Pocket Park, and west of South Western. This retail asset offers attractive accessibility to major transportation

means with close distance to both the Union Station Commuter Rail and the Los Angeles International Airport.

Currently, the property is owner occupied, used as a restaurant equipment manufacturer, and may be delivered vacant.

3215-3219 West Washington Boulevard sits in a great rental pocket and presents an ideal opportunity for an investor looking for immediate

upside or owner user.

PROPERTY OVERVIEW

▪ First Time in the Market after 40 years

▪ Mid City Recovery Redevelopment Project

▪ Property zoned as C2-1VL-O-CPIO

▪ Property Can Be Divided Into Multiple Units

▪ Trendy Nearby Retail Includes Surfas Culinary, Evil Genius Escape

Room, Regime des Fleurs Perfumer, Michael Thibault Gallery, and

Haute Couture Brand Eckhaus Latta

▪ High Traffic Count of Over 26,000 Cars Daily

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REGIONAL MAP


7

7

LOCAL MAP


8

8

AERIAL PHOTO


9

9

12


PROPERTY PHOTO

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11

FINANCIAL

ANALYSIS

11

FINANCIAL ANALYSIS


PRICING DETAIL

12

Summary

Price $1,400,000

Down Payment $637,700 46%

Number of Suites 2

Price Per GLA $466.67

Gross Leasable Area (GLA) 3,000 SF

Lot Size 0.17 Acres

Year Built/Renovated 1922

Occupancy 100.00%

Property is Owner Occupied and will either be delivered vacant or with a short term sale lease-back.

Terms to be negotiated between Buyer & Seller and incorporated into the Purchase & Sale Agreement.

Returns Proforma

CAP Rate 4.82%

Debt Coverage Ratio 1.64

Financing 1st Loan

Loan Amount $770,000

Loan Type New

Interest Rate 5.35%

Amortization 30 Years

Year Due 2022

Loan information is subject to change. Contact your Marcus & Millichap Capital Corporation representative.

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FINANCIAL ANALYSIS


OPERATING STATEMENT

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Notes: [1] Estimated

Income Proforma Per SF Notes

Scheduled Base Rental Income $67,500 $22.50

Expense Reimbursement Income

Insurance $3,000 $1.00 [1]

Utilities $2,400 $0.80 [1]

Trash $1,440 $0.48 [1]

Real Estate Taxes $16,744 $5.58

Total Reimbursement Income $23,584 100.0% $7.86

Effective Gross Revenue $91,084 $30.36

Operating Expenses Proforma Per SF Notes

Insurance $3,000 $1.00 [1]

Utilities $2,400 $0.80 [1]

Trash $1,440 $0.48 [1]

Real Estate Taxes $16,744 $5.58

Total Expenses $23,584 $7.86

Expenses as % of EGR 25.89%

Net Operating Income $67,500 $22.50

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MARKET

COMPARABLES

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SALES COMPARABLES MAP

3215-3219 WEST WASHINGTON

BOULEVARD

(SUBJECT)

2861 W Pico Blvd

5120 W Adams Blvd

3141 S Grand Ave

4201 Montclair St

3131 W Pico Blvd

2181 W Venice Blvd

3420 W Washington Blvd

4158 W Pico Blvd

SALES COMPARABLES

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2

3

4

5

7

8

6

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PROPERTY NAME3215-3219 WEST WASHINGTON BOULEVARD

SALES COMPARABLES

Avg. $385.52

$0.00

$70.00

$140.00

$210.00

$280.00

$350.00

$420.00

$490.00

$560.00

$630.00

$700.00

3219 West

WashingtonBoulevard

2861 W Pico

Blvd

5120 W

Adams Blvd

3141 S

Grand Ave

4201

MontclairSt

3131 W Pico

Blvd

2181 W

Venice Blvd

3420 W

WashingtonBlvd

4158 W Pico

Blvd

Average Price Per Square Foot

SALES COMPARABLES SALES COMPS AVG

PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


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SALES COMPARABLES

Asking Price $1,400,000

Price/SF $466.67

CAP Rate 4.82%

Year Built 1922

Occupancy 100%

3219 WEST WASHINGTON BOULEVARD3219 W Washington Blvd, Los Angeles, CA, 90018

1

Close of Escrow 11/21/2018

Sales Price $1,700,000

Rentable SF 4,992

Price/SF $340.54

Year Built 1922

Occupancy 100%

2861 W PICO BLVD2861 W Pico Blvd, Los Angeles, CA, 90006

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Rentable SF 2,850

Price/SF $614.04

Year Built 1928

5120 W ADAMS BLVD5120 W Adams Blvd, Los Angeles, CA, 90016

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PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


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SALES COMPARABLES

NOTES

The seller was doing a 1031 exchange in this sale transaction.

3



Rentable SF 4,830

Price/SF $341.61

Year Built 1956

Parking Ratio 1.3

Power N

Clear Height 18'0""

3141 S GRAND AVE3141 S Grand Ave, Los Angeles, CA, 90007

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NOTES

Property located in a corner. It was bought by CIM Group.

Tenants Lease Type

Close Of

Escrow:6/20/2018

Days On

Market:113

Sales Price: $925,000

Price/SF: $233.11

Year Built: 1927

4201 MONTCLAIR ST 4201 Montclair St, Los Angeles, CA, 90018

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Tenants Lease Type

Close Of

Escrow:11/14/2018

Sales Price: $2,750,000

Price/SF: $433.48

Year Built: 1963


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PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


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SALES COMPARABLES

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Tenants Lease Type

Close Of

Escrow:8/10/2018


Price/SF: $234.29

Year Built: 1955

2181 W VENICE BLVD2181 Venice Blvd, Los Angeles, CA, 90006

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Rentable SF 2,800

Price/SF $392.86

Year Built 1947

3420 W WASHINGTON BLVD3420 W Washington Blvd, Los Angeles, CA, 90018

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NOTES

On the Market For Sale.

Tenants Lease Type

Days On

Market:299


Price/SF: $494.22

Year Built: 1913


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8


LEASE COMPARABLES MAP

3215-3219 WEST WASHINGTON

BOULEVARD

3701-3711 W Pico Blvd



1100 Western Ave



2946 W Pico Blvd



SALES COMPARABLES

4

7

8

9

11

20

12

14

15

16

17

13

18

10

20

1

2

3

4

5

7

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6

8

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9

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PROPERTY NAME3215-3219 WEST WASHINGTON BOULEVARD

AVERAGE RENT PER SQUARE FOOT

Avg. $23

$0

$5

$10

$15

$20

$25

$29

$34

3701-3711 W Pico

Blvd

1782 W Washington

Blvd

3038-3044 W Pico

Blvd

1100 Western Ave 3060-3066 W Pico

Blvd

3520 W Washington

Blvd

2946-2948 W Pico

Blvd

1882-1890 W

Washington Blvd

1782 W Washington

Blvd

3260-3270 W Pico

Blvd

2181 W Washington

Blvd

1120-1130 S Western

Ave

LEASE COMPS

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PROPERTY NAME

MARKETING TEAM


LEASE COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


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Lease Notes: Tenant is Oaxaca Hardware, a retailer/wholesaler that specializes in home repair items from paint & plumbing supplies to tools & fixtures

Lease Notes: Major Tenants include: Golden Rule Glass & Screen, Pelo’s Fly Beauty Salon and Omeega Notary.

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PROPERTY NAME

MARKETING TEAM


LEASE COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


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Lease Notes: Major Tenants include: Adversiting Sites and Dae Bak Signs Inc

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PROPERTY NAME

MARKETING TEAM


LEASE COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


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PROPERTY NAME

MARKETING TEAM


LEASE COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


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MARKET

OVERVIEW

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OVERVIEW

WESTSIDE CITIES, LOS ANGELES

GROWING TECH SECTORThe region’s growing high-tech sector has awarded the Santa Monica/Venice

area the nickname of “Silicon Beach,” attracting companies such as Google.

WELL-EDUCATED WORKFORCEArea residents are well educated. A majority of adults possess at least a

bachelor’s degree and more than a quarter also have a graduate degree.

HIGH INCOMESEducational attainment translates into a median household income that is well

above the national average. High home prices, however, keep the

homeownership level near 40 percent.

The Westside Cities area is located west of downtown Los Angeles and

north of Los Angeles International Airport. The market contains the

following submarkets: Brentwood-Westwood-Beverly Hills; Palms-Mar

Vista; and Santa Monica-Marina del Rey. Cities from Venice to Playa Del

Rey to Culver City are all located within these submarkets. The region is

projected to add 12,000 residents through 2022, resulting in the formation

of more than 7,600 households.

▪ Major employers in the region include entertainment giants 21st Century Fox and Sony Pictures.

While roughly 20,000 jobs are in the motion-picture industry, ancillary businesses tied to

entertainment are a major source of employment, as is marketing and advertising.

▪ The large healthcare industry is represented by UCLA Medical Group, Cedars-Sinai Medical Center,

Providence Health and Services, and the local VA.

▪ Educational institutions including UCLA, Loyola Marymount and Pepperdine University employ more

than 42,000 workers.

▪ Tourism and retail shopping are major drivers of the local economy.

DEMOGRAPHICS

ECONOMY

METRO HIGHLIGHTS

* Forecast

Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

3219 WEST WASHINGTON BOULEVARD

649K

2017POPULATION:

300K

2017HOUSEHOLDS:

39.4

2017MEDIAN AGE:

$81,400

2017 MEDIAN HOUSEHOLD INCOME:

U.S. Median:

37.8U.S. Median:

$56,3002.5%

Growth2017-2022*:

1.9%

Growth2017-2022*:

2727

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DEMOGRAPHICS

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LOS ANGELES METRO AREA

Rent Growth Among the Nation’s Strongest

In Supply-Constrained Los Angeles

Tenant demand holds strong amid a shift to newer, more affordable space. Booming e-commerce and

robust container traffic at the twin ports has logistics firms and retailers growing their supply-chain networks in

Los Angeles, keeping the vacancy rate below 3 percent for more than three years. A shortage of functional

space, though, has contributed to two consecutive quarters of negative net absorption this year as some

demand for new, modern space and lower rents shifts to the Inland Empire. Development remains

challenging amid limited land availability and lengthy permitting periods, driving outsize rent growth, which

rose 10.9 percent in June from one year earlier to $11.08 per square foot. Some of the market’s older

properties have been slated for creative office conversions, further reducing availability and contributing to

robust rent growth. Vigorous tenant demand, particularly for smaller properties that can be used to complete

the last mile of the supply chain, will keep the vacancy rate at a record low this year.

Los Angeles industrial sector one of the nation’s top performers. Deal flow during the trailing 12 months

ending in June was the strongest in three years, with increased bidding activity pushing the average price

above $225 per square foot. Out-of-state and institutional buyers remain highly active, drawn by limited

threats from new supply, tight vacancy and some of the best rent growth in the nation. Properties traded over

the past year recorded an average cap rate in the low-5 percent territory, one of the lowest industrial cap

rates in the nation. The Central Los Angeles submarket led industrial sales over the past year, with some

properties posting a first-year yield in the lower-4 percent territory. Buyers seeking higher returns will look to

San Gabriel Valley, where cap rates can be 100 basis points above the rest of the market in some instances

and prices averaged in the mid-$100 band.

* Forecast

Sources: Marcus & Millichap Research Services; Bureau of Labor

Statistics; CoStar Group, Inc.; Real Capital Analytics

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DEMOGRAPHICS

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LOS ANGELES METRO AREA

2018 Market Forecast

Employment growth nearly matches last year’s creation of 62,300 jobs with

the addition of 61,000 workers this year.

Barriers to development slow deliveries this year from the 6.9 million square

feet finished in 2017, a cycle high, though construction remains above the

previous five-year average.

Strong pre-leasing activity keeps the vacancy rate exceptionally tight, ending

the year at 2 percent, remaining unchanged for the third straight year.

The average asking rent climbs to $11.60 per square foot this year, trailing

an 11.9 percent rise registered in 2017.

The Upper San Gabriel Valley submarket led the metro in net absorption

over the past year. The area could attract greater investment this year as

rents are among the lowest in LA.

** Trailing 12 months through 2Q

Sources: Marcus & Millichap Research Services; Bureau of Labor

Statistics; CoStar Group, Inc.; Real Capital Analytics

Employment

up 1.4%

Construction

4.6 million sq. ft.

Vacancy

unchanged

Rent

up 8.9%

Investment

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DEMOGRAPHICS

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PROPERTY NAME

MARKETING TEAM


DEMOGRAPHICS

Source: © 2018 Experian

Created on February 2019

POPULATION 1 Miles 3 Miles 5 Miles

▪ 2023 Projection

Total Population 61,478 568,629 1,363,562

▪ 2018 Estimate


▪ 2010 Census


▪ 2000 Census


▪ Daytime Population

2018 Estimate 37,010 460,709 1,400,557

HOUSEHOLDS 1 Miles 3 Miles 5 Miles

▪ 2023 Projection

Total Households 20,307 207,926 530,501

▪ 2018 Estimate


Average (Mean) Household Size 2.98 2.70 2.55

▪ 2010 Census


▪ 2000 Census


HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles

▪ 2018 Estimate

$200,000 or More 3.48% 3.98% 5.59%

$150,000 - $199,000 3.40% 3.18% 4.18%

$100,000 - $149,000 7.83% 8.53% 10.37%

$75,000 - $99,999 7.77% 8.95% 9.78%

$50,000 - $74,999 15.00% 16.08% 15.66%

$35,000 - $49,999 13.61% 14.01% 12.53%

$25,000 - $34,999 12.06% 12.15% 10.42%

$15,000 - $24,999 15.73% 14.63% 13.02%

Under $15,000 21.11% 18.48% 18.46%

Average Household Income $60,223 $64,606 $74,295

Median Household Income $36,013 $39,590 $44,106

Per Capita Income $20,104 $23,698 $28,868

POPULATION PROFILE 1 Miles 3 Miles 5 Miles

▪ Population By Age

2018 Estimate Total Population 61,531 567,995 1,357,434

Under 20 24.84% 23.90% 22.37%

20 to 34 Years 24.36% 27.58% 27.87%

35 to 39 Years 7.07% 7.69% 8.13%

40 to 49 Years 13.44% 13.60% 13.95%

50 to 64 Years 18.26% 16.56% 16.55%

Age 65+ 12.05% 10.67% 11.12%

Median Age 35.54 34.12 34.86

▪ Population 25+ by Education Level

2018 Estimate Population Age 25+ 41,851 382,609 946,921

Elementary (0-8) 15.54% 14.52% 13.24%

Some High School (9-11) 13.39% 11.41% 10.49%

High School Graduate (12) 25.00% 21.15% 18.97%

Some College (13-15) 16.83% 16.74% 16.70%

Associate Degree Only 4.57% 5.08% 5.43%

Bachelors Degree Only 15.18% 19.48% 21.61%

Graduate Degree 5.57% 7.58% 9.69%

▪ Time Travel to Work

Average Travel Time in Minutes 37 35 34

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Income

In 2018, the median household income for your selected geography is

$36,013, compare this to the US average which is currently $58,754.

The median household income for your area has changed by 53.76%

since 2000. It is estimated that the median household income in your

area will be $40,703 five years from now, which represents a change

of 13.02% from the current year.

The current year per capita income in your area is $20,104, compare

this to the US average, which is $32,356. The current year average

household income in your area is $60,223, compare this to the US

average which is $84,609.

Population

In 2018, the population in your selected geography is 61,531. The

population has changed by 2.86% since 2000. It is estimated that the

population in your area will be 61,478.00 five years from now, which

represents a change of -0.09% from the current year. The current

population is 48.86% male and 51.14% female. The median age of the

population in your area is 35.54, compare this to the US average

which is 37.95. The population density in your area is 19,583.14

people per square mile.

Households

There are currently 20,101 households in your selected geography.

The number of households has changed by 4.98% since 2000. It is

estimated that the number of households in your area will be 20,307

five years from now, which represents a change of 1.02% from the

current year. The average household size in your area is 2.98

persons.

Employment

In 2018, there are 8,526 employees in your selected area, this is also

known as the daytime population. The 2000 Census revealed that

47.05% of employees are employed in white-collar occupations in this

geography, and 53.40% are employed in blue-collar occupations. In

2018, unemployment in this area is 6.77%. In 2000, the average time

traveled to work was 37.00 minutes.

Race and Ethnicity

The current year racial makeup of your selected area is as follows:

25.68% White, 22.51% Black, 0.12% Native American and 14.66%

Asian/Pacific Islander. Compare these to US averages which are:

70.20% White, 12.89% Black, 0.19% Native American and 5.59%

Asian/Pacific Islander. People of Hispanic origin are counted

independently of race.

People of Hispanic origin make up 57.72% of the current year

population in your selected area. Compare this to the US average of

18.01%.

PROPERTY NAME

MARKETING TEAM


Housing

The median housing value in your area was $582,394 in 2018,

compare this to the US average of $201,842. In 2000, there were

4,224 owner occupied housing units in your area and there were

14,924 renter occupied housing units in your area. The median rent at

the time was $519.

Source: © 2018 Experian

DEMOGRAPHICS

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DEMOGRAPHICS

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www.MarcusMillichap.com

Laura Alice Scaturro

National Office and Industrial Properties Group


Tel: (310) 909-5472

Fax: (310) 909-5410

[email protected]


Ingrid Farias-Eisner


Tel: (310) 909-5449

Fax: (310) 909-5410

[email protected]


P R E S E N T E D B Y

Market Positioning and Pricing Analysis · Market Positioning and Pricing Analysis 1. 3215-3219...

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Transcript of Market Positioning and Pricing Analysis · Market Positioning and Pricing Analysis 1. 3215-3219...