Offering Memorandum · 2020. 6. 15. · After Debt Service 4.19% / $184,305 6.20% / $272,758...

CLARMAR WAY APARTMENTS2020 Clarmar Way • San Jose, CA 95128

Offering Memorandum

1

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

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and

should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified

information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due

diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the

future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or

asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any

tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable;

however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters

and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of

the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

SPECIAL COVID-19 NOTICE

All potential buyers are strongly advised to take advantage of their opportunities and obligations to conduct thorough due diligence and seek expert opinions as they may deem necessary,

especially given the unpredictable changes resulting from the continuing COVID-19 pandemic. Marcus & Millichap has not been retained to perform, and cannot conduct, due diligence on

behalf of any prospective purchaser. Marcus & Millichap’s principal expertise is in marketing investment properties and acting as intermediaries between buyers and sellers. Marcus &

Millichap and its investment professionals cannot and will not act as lawyers, accountants, contractors, or engineers. All potential buyers are admonished and advised to engage other

professionals on legal issues, tax, regulatory, financial, and accounting matters, and for questions involving the property’s physical condition or financial outlook. Projections and pro forma

financial statements are not guarantees and, given the potential volatility created by COVID-19, all potential buyers should be comfortable with and rely solely on their own projections,

analyses, and decision-making.

Non-Endorsement NoticeMarcus & 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 MIKE HENSHAW at MARCUS & MILLICHAP FOR MORE DETAILS. 650 269 6453 or [email protected]

2020 CLARMAR WAY APARTMENTS

San Jose, CA

ACT ID ZAB0010273

2

TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01Offering Summary

Regional Map

Local Map

Aerial Photo

FINANCIAL ANALYSIS 02Rent Roll Summary

Rent Roll Detail

Operating Statement

Notes

Pricing Detail

Acquisition Financing

MARKET COMPARABLES 03Sales Comparables

Rent Comparables

MARKET OVERVIEW 04

Market Analysis

Demographic Analysis


3


4

INVESTMENT

OVERVIEW


#

EXECUTIVE SUMMARY

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

Acer Cloud Technology Inc 5,024

Crows Auto Sales 3,505

Agilent Labs 3,275

Agilent Technologies Inc 3,275

Rosendin Electric 3,000

Broadcom 2,413

City of San Jose 2,327

Sanmina Corporation 2,276

Apple 2,115

Corrections Dept of 2,008

Agilent Santa Clara Site 2,000

Hadco Santa Clara Inc 2,000

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2019 Estimate Pop 24,716 253,443 615,873

2010 Census Pop 22,635 231,608 567,604

2019 Estimate HH 9,980 101,751 228,012

2010 Census HH 8,896 90,166 205,075

Median HH Income $108,419 $101,319 $110,178

Per Capita Income $63,561 $58,595 $56,667

Average HH Income $156,807 $144,697 $151,947

VITAL DATA

Price $11,000,000 CURRENT YEAR 1

Down Payment 40% / $4,400,000 CAP Rate 4.77% 5.57%

Loan Amount $6,600,000 GRM 14.05 12.48

Loan Type Proposed NewNet Operating Income

$524,657 $613,110

Interest Rate / Amortization 3.15% / 30 YearsNet Cash Flow After Debt Service

4.19% / $184,305 6.20% / $272,758

Price/Unit $323,529 Total Return 7.24% / $318,686 9.35% / $411,434

Price/SF $665.70

Number of Units 34

Rentable Square Feet 16,524

Number of Buildings 2

Number of Stories 2

Year Built 1956

Lot Size 1 acre(s)

5


OFFERING SUMMARY

▪ Excellent in place income stream with value add opportunity for additional upside

▪ Ground Zero Silicon Valley Location

▪ Patios and backyards create an apartment home type of feeling for the residents

▪ Low Density apartment community with mature landscaping

▪ Great Curb appeal with an established long term tenant base

▪ Upgraded and spacious interiors with modern appliances.

INVESTMENT HIGHLIGHTS

The Clarmar Way Apartments are a well maintained 34 -unit apartment community located at 2020 Clarmar Way in the home of Silicon Valley, San Jose, California

The property is a 34 unit apartment complex located minutes from O'Connor Hospital, Valley Medical Center, San Jose City College, Santana Row and Valley Fair Shopping

Center. The property is located very close to Interstates 280 and 880. Downtown San Jose, Santa Clara University and San Jose State University are just minutes away by

car.

The unit mix contain Thirty-Two (32)1Br/1Ba, One (1) 2BR/2Ba, and One (1) 3BR/2B unit. The majority of the units at the property have been remodeled with upgraded

appliances, flooring and cabinetry.

Situated on a one acre parcel totaling of land, the subject property was originally constructed in 1956 and has a gross livable area of approximately 16524 total square feet

which offers its tenants quality and spacious floor-plans plans to call home. The residents enjoy common area amenities such as on-site coin operated laundry facilities,

private patios/balconies, mature landscaping, off street parking and ample street parking.

The investment appeal of this asset is driven by Silicon Valley's robust and diverse employment fundamentals, historically low vacancy levels, and a very significant

affordability gap.

INVESTMENT OVERVIEW

6


#

OFFERING SUMMARY

PROPERTY OVERVIEW

2020 Clarmar Way Apartments are located within minutes of many distinguished educational institutions including

San Jose State University, Santa Clara University as well as several community colleges. Within close proximity,

there are many of Silicon Valley high-tech companies such as Ebay, Cisco Systems,IBM, Adobe Systems, Intel,

LinkedIn, Apple, Yahoo!, Google, Facebook and many others.

The subject property is conveniently located near Highways 880, 280, 101, 17 and 85 providing residents with

direct access to local employment and attractions both local and across the Bay Area. 2020 Clarmar Way

Apartments are located near Santana Row, Valley Medical Center, O' Connor Hospital and minutes from

Downtown San Jose. Google is set to develop one of their largest campuses around Diridon Station which is

expected to bring 20,000 new jobs to San Jose. Due to this expansion, many of the established developers are

stating that this is the strongest and most activity that Downtown San Jose has ever seen.

7

▪ Private and secluded patios and decks

▪ Low density Apartment Community

Common Area Amenities

▪ Mature Landscaping

▪ On Site Laundry

▪ Ample street parking

▪ Private patios and Balconies

Unit Amenities

▪ Upgraded unit interiors

▪ Modern appliances

▪ Spacious and efficient floorpans

▪ Onsite Parking

7


PROPERTY SUMMARY

OFFERING SUMMARY

PROPOSED FINANCING

First Trust Deed

Loan Amount $6,600,000

Loan Type Proposed New

Interest Rate 3.15%

Amortization 30 Years

Loan Term 10 Years

Loan to Value 60%

Debt Coverage Ratio 1.54

THE OFFERING

Property 2020 Clarmar Way Apartments

Price $11,000,000

Property Address 2020 Clarmar Way, San Jose, CA

Assessors Parcel Number 274-58-019

Zoning C

SITE DESCRIPTION

Number of Units 34

Number of Buildings 2

Number of Stories 2

Year Built/Renovated 1956

Rentable Square Feet 16,524

Lot Size 1 acre(s)

Type of Ownership Fee Simple

Density 34 units per acre

Parking 34

Parking Ratio 1:1

Landscaping Mature

Topography Flat

UTILITIES

Water Landlord

Phone Tenant

Electric Tenant

Gas Tenant

CONSTRUCTION

Foundation Concrete perimeter/slab

Framing Wood Frame

Exterior Stucco

Parking Surface Asphalt/Concrete

Roof Pitched

8

REGIONAL MAP


9

LOCAL MAP


10

AERIAL PHOTO


11


12

FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS


RENT ROLL SUMMARY

13

FINANCIAL ANALYSIS


14

RENT ROLL DETAIL

FINANCIAL ANALYSIS


15

RENT ROLL DETAIL

FINANCIAL ANALYSIS


OPERATING STATEMENT

16

FINANCIAL ANALYSIS


NOTES

17

FINANCIAL ANALYSIS


PRICING DETAIL

18

MARCUS & MILLICHAP ADVANTAGE

MARCUS & MILLICHAP CAPITAL

CORPORATION CAPABILITIES

MMCC—our fully integrated, dedicated financing arm—is committed to

providing superior capital market expertise, precisely managed execution, and

unparalleled access to capital sources providing the most competitive rates and

terms.

We leverage our prominent capital market relationships with commercial banks,

life insurance companies, CMBS, private and public debt/equity funds, Fannie

Mae, Freddie Mac and HUD to provide our clients with the greatest range of

financing options.

Our dedicated, knowledgeable experts understand the challenges of financing

and work tirelessly to resolve all potential issues for the benefit of our clients.

Optimum financing solutions to

enhance value

Enhanced control through

investor qualification support


MMCC’s ability to qualify

investor finance contingencies


MMCC’s ability to monitor

investor/due diligence and

underwriting to ensure timely,

predictable closings

Enhanced control through quickly

identifying potential debt/equity

sources, processing, and closing

buyer’s finance alternatives

WHY MMCC?

National platform

operating

within the firm’s

brokerage offices

$ 7.18 billion

total national

volume in 2019

Access to more

capital sources

than any other

firm in the

industry

Closed 1,944

debt and equity

financings

in 2019

19



20

MARKET

COMPARABLES


SALES COMPARABLES MAP

21


(SUBJECT)

3013 Magliocco Drive

594 S. 6th Street

Casa Camino

70-74 N. 10th Street

Leigh Court

562 S 6th St

728 S 10th St

1012 Elm Street

SALES COMPARABLES

1

2

3

4

5

7

8

6

22

PROPERTY NAME2020 CLARMAR WAY APARTMENTS

SALES COMPARABLES

Avg. 4.58%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2020Clarmar WayApartments

3013Magliocco

Drive

594 S. 6thStreet

Casa Camino

70-74 N.10th Street

Leigh Court 562S 6th St

728S 10th St

1012 ElmStreet

Average Cap Rate

Avg. 14.33

0.00

1.80

3.60

5.40

7.20

9.00

10.80

12.60

14.40

16.20

18.00

2020Clarmar

WayApartments

3013Magliocco

Drive

594 S. 6thStreet

Casa Camino

70-74 N.10th Street


728S 10th St

1012 ElmStreet

Average GRM

SALES COMPARABLES SALES COMPS AVG

23


SALES COMPARABLES

Avg. $532.50

$0.00

$80.00

$160.00

$240.00

$320.00

$400.00

$480.00

$560.00

$640.00

$720.00

$800.00

2020Clarmar

WayApartments

3013Magliocco

Drive

594 S. 6thStreet

Casa Camino

70-74 N.10th Street


728S 10th St

1012 ElmStreet

Average Price Per Square Foot

Avg. $328,680

$0

$40,000

$80,000

$120,000

$160,000

$200,000

$240,000

$280,000

$320,000

$360,000

$400,000

2020Clarmar

WayApartments

3013Magliocco

Drive

594 S. 6thStreet

Casa Camino

70-74 N.10th Street


728S 10th St

1012 ElmStreet

Average Price Per Unit

SALES COMPARABLES SALES COMPS AVG

PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


24

SALES COMPARABLES

Units Unit Type

Offering Price: $11,000,000 32 1b 1ba

Price/Unit: $112,245 32 1b 1ba

Price/SF: $665.70 32 1b 1ba

CAP Rate: 4.77% 1 2b 2ba

GRM: 14.05 1 3b 2ba

Total No. of Units: 98

Year Built: 1956

Underwriting Criteria

Income $768,466 Expenses $243,809

NOI $524,657 Vacancy ($23,488)

2020 CLARMAR WAY APARTMENTS2020 Clarmar Way, San Jose, CA, 95128

1

Units Unit Type

Close Of Escrow: 2/6/2020 10 1 Bdr Bath

Days On Market: 178 2 2 Bdr Bath

Sales Price: $4,500,000

Price/Unit: $375,000

Price/SF: $569.62

CAP Rate: 3.63%

GRM: 16.51


Year Built: 1959

3013 MAGLIOCCO DRIVE3013 Magliocco Drive, San Jose, CA, 95128

Units Unit Type

Close Of Escrow: 2/5/2020 6 1 Bdr 1 Bath Flat

Days On Market: 75



Price/SF: $456.14

CAP Rate: 4.83%

GRM: 14.76


Year Built: 1950

2

594 S. 6TH STREET594 S. 6th Street, San Jose, CA, 95112

PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


25

SALES COMPARABLES

Units Unit Type

Close Of Escrow: 2/4/2020 9 Studio Bath

Sales Price: $4,100,000 5 1 Bdr Bath


Price/SF: $591.12

CAP Rate: 4.28%

GRM: 14.80


Year Built: 1940

Underwriting Criteria

Income $276,951

3

NOTES

CASA CAMINO96 S 10th St, San Jose, CA, 95112

4

Units Unit Type

Close Of Escrow: 12/31/2019 2 1 Bdr 1 Bath

Days On Market: 130 5 1 Bdr 1 Bath

Sales Price: $3,440,000 2 2 Bdr 1 Bath


Price/SF: $570.76

CAP Rate: 4.81%

GRM: 14.30


Year Built: 1912

70-74 N. 10TH STREET70-74 N. 10th Street, San Jose, CA, 95112

Units Unit Type

Close Of Escrow: 12/20/2019 4 Studio 1 Bath Flat

Days On Market: 55 10 1 Bdr 1 Bath Flat

Sales Price: $5,750,000 2 2 Bdr 1 Bath Flat

Price/Unit: $319,444 2 2 Bdr 1.5 Bath Flat

Price/SF: $474.74

CAP Rate: 4.53%

GRM: 14.34


Year Built: 1963

5

LEIGH COURT1235 Leigh Ave, San Jose, CA, 95126

PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


26

SALES COMPARABLES

Units Unit Type

Close Of Escrow: 11/5/2019 4 1 Bdr 1 Bath

Days On Market: 40 1 Studio Bath



Price/SF: $341.32

CAP Rate: 4.83%

GRM: 13.14


Year Built: 1898

6

562 S 6TH ST562 S 6th St, San Jose, CA, 95112

7

Units Unit Type

Close Of Escrow: 10/17/2019 2 1 Bdr Bath



Price/SF: $519.08

CAP Rate: 4.75%

GRM: 13.15


Year Built: 1963

728 S 10TH ST728 S 10th St, San Jose, CA, 95112

Units Unit Type

Close Of Escrow: 9/11/2019 2 Studio Bath


Price/Unit: $360,870 2 2 Bdr Bath

Price/SF: $737.25

CAP Rate: 5.00%

GRM: 13.61


Year Built: 1963

8

1012 ELM STREET1012 Elm Street, San Jose, CA, 95126

8


RENT COMPARABLES MAP


(SUBJECT)

Casa Camino

Leigh Court

Park Plaza

454 Doyle Rd

70-74 N. 10th Street

1012 Elm Street

4

7

8

9

11

20

12

14

15

16

17

13

18

10

4

1

2

3

5

6

27


RENT COMPARABLES

28

AVERAGE OCCUPANCY

Avg. 97.50%

0

10

20

30

40

50

60

70

80

90

100


Casa Camino Leigh Court Park Plaza 454Doyle Rd

70-74 N.10th Street

1012 ElmStreet


RENT COMPARABLES

29

AVERAGE RENT - MULTIFAMILY

Avg. $3,250

$0

$400

$800

$1,200

$1,600

$2,000

$2,400

$2,800

$3,200

$3,600

$4,000



70-74 N.10th Street

1012 ElmStreet

3 Bedroom

Avg. $1,742

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000



70-74 N.10th Street

1012 ElmStreet

Studios

Avg. $2,124

$0

$300

$600

$900

$1,200

$1,500

$1,800

$2,100

$2,400

$2,700

$3,000



70-74 N.10th Street

1012 ElmStreet

1 Bedroom

Avg. $2,565

$0

$300

$600

$900

$1,200

$1,500

$1,800

$2,100

$2,400

$2,700

$3,000



70-74 N.10th Street

1012 ElmStreet

2 Bedroom

PROPERTY NAME

MARKETING TEAM


RENT COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


30

YEAR BUILT: 1956

rentpropertyname1rentpropertyaddress1

Unit Type Units SF Rent Rent/SF

1b 1ba 32 $1,880 $0.00

1b 1ba 32 $1,880 $0.00

1b 1ba 32 $1,880 $0.00

2b 2ba 1 $2,300 $0.00

3b 2ba 1 $2,800 $0.00

Total/Avg. 98 $1,894

2020 CLARMAR WAY APARTMENTS2020 Clarmar Way, San Jose, CA, 95128

OCCUPANCY: 100% | YEAR BUILT: 1940

1


Studio 1 Bath Flat 3 426 $1,925 $4.52

1 Bdr 1 Bath Flat 5 578 $2,095 $3.62

2 Bdr 1 Bath Flat 2 778 $2,695 $3.46

Studio 1 Bath 4 413 $1,071 $2.59

Total/Avg. 14 527 $1,852 $3.51

CASA CAMINO96 S 10th St, San Jose, CA, 95112

2



2 Bdr 1 Bath Flat 2 830 $2,595 $3.13

1 Bdr 1 Bath Flat 10 630 $2,195 $3.48

Studio 1 Bath Flat 4 525 $1,895 $3.61

2 Bdr 1.5 Bath Flat 2 1,030 $2,695 $2.62

Total/Avg. 18 673 $2,228 $3.31

LEIGH COURT1235 Leigh Ave, San Jose, CA, 95126

PROPERTY NAME

MARKETING TEAM


RENT COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


31


3


1 Bdr 1 Bath Flat 16 562$1,995-$2,095

$3.64

Total/Avg. 16 562 $2,045 $3.64

PARK PLAZA255 N 3rd St, San Jose, CA, 95112


4


1 Bdr 1 Bath Flat 8 650 $2,195 $3.38

2 Bdr 1 Bath Flat 8 748 $2,495 $3.34

3 Bdr 1.5 Bath Flat 4 1,099 $3,250 $2.96

2 Bdr 1.5 Bath Flat 4 890 $2,495 $2.80

Total/Avg. 24 798 $2,521 $3.16

454 DOYLE RD454 Doyle Rd, San Jose, CA, 95129

5



1 Bdr 1 Bath Flat 2 550 $1,825 $3.32

1 Bdr 1 Bath Flat 5 625 $2,095 $3.35

2 Bdr 1 Bath Flat 2 800 $2,495 $3.12

Total/Avg. 9 647 $2,124 $3.28

70-74 N. 10TH STREET70-74 N. 10th Street, San Jose, CA, 95112

PROPERTY NAME

MARKETING TEAM


RENT COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


32


6


Studio 1 Bath Flat 1 450 $1,895 $4.21

1 Bdr 1 Bath Flat 1 550 $2,195 $3.99

2 Bdr 1 Bath Flat 2 650 $2,495 $3.84

Total/Avg. 4 575 $2,270 $3.95

1012 ELM STREET1012 Elm Street, San Jose, CA, 95126


33

MARKET

OVERVIEW

MARKET OVERVIEW

SAN JOSEOVERVIEW

1

Known to the world as Silicon Valley, the San Jose metro is located at the

southern end of the San Francisco Bay and encompasses Santa Clara and

San Benito counties. A large portion of the area’s 1,315 square miles is

unincorporated ranch and farmland.

The metro contains roughly 2 million inhabitants and more than half of the

region’s residents reside in the city of San Jose. It is the metro’s largest city

with more than 1 million residents, followed by Sunnyvale and Santa Clara.

Venture capital funds received in the 1990s helped to turn the area into the

world’s most prominent technology hub, a distinction that remains today.

MARKET OVERVIEW

METRO HIGHLIGHTS

PREMIER HIGH-TECH CENTER

Silicon Valley’s dense concentration of high-tech

jobs is world renowned, attracting a variety of large

employers and startups.

HIGH INCOMES

Well-paying jobs in the tech sector contribute to a

median annual household income level that is

almost double the U.S. median.

HIGHLY EDUCATED WORKFORCE

Nearly half of all residents age 25 and older have

obtained at least a bachelor’s degree, well above

the U.S. average.


MARKET OVERVIEW

ECONOMY▪ The San Jose employment base contains more than 1.1 million workers, ranking the metro

as one of the 30 largest job markets in the nation.

▪ There are 18 Fortune 500 companies headquartered in San Jose, including Intel, Cisco

Systems, Apple Inc., eBay and Alphabet.

▪ The area’s many institutions of higher learning, including Stanford, San Jose State and

Santa Clara University, support these companies by graduating thousands of engineering

and computer science students each year.

MAJOR AREA EMPLOYERS

Cisco Systems

County of Santa Clara

Adobe Systems Inc.

Hewlett-Packard Co.

City of San Jose

Intel Corp.

eBay

U.S. Veterans Medical Center

San Jose State University

Apple* Forecast

2


SHARE OF 2019 TOTAL EMPLOYMENT

MANUFACTURING

16%GOVERNMENT

HEALTH SERVICES

EDUCATION AND

+

OTHER SERVICES

2%

LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES

12%

AND UTILITIES

TRADE, TRANSPORTATION CONSTRUCTION

PROFESSIONAL AND

BUSINESS SERVICES

9%INFORMATION

21%

4%

9% 9% 3%

15%

MARKET OVERVIEW

DEMOGRAPHICS

SPORTS

EDUCATION

ARTS & ENTERTAINMENT

▪ The metro is expected to add approximately 107,300 people through 2024 and during

this time more than 41,000 households will be formed.

▪ High home prices contribute to a homeownership rate of 56 percent, which is below

the national rate of 57 percent.

▪ Roughly 48 percent of residents age 25 and older hold a bachelor’s degree, including

22 percent who have also obtained a graduate or professional degree.

The San Jose metro has an enviable combination of major universities that produce a

highly educated workforce, cutting-edge firms and exceptional affluence. Residents can

visit a plethora of museums, including the San Jose Museum of Art and the Tech Museum

of Innovation. Santa Clara County is home to performing arts companies and hosts the San

Jose Jazz Festival. The San Francisco 49ers play their home games at Levi’s Stadium and

the San Jose Sharks hockey team plays at the SAP Center. Other sports venues include

Excite Ballpark and Stevens Stadium. The metro is minutes away from San Francisco and

some of the world’s finest wine-producing regions, notably the Napa, Sonoma and

Alexander valleys.

QUALITY OF LIFE

3

* Forecast

Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s

Analytics; U.S. Census Bureau


2019 Population by Age

0-4 YEARS

6%5-19 YEARS

19%20-24 YEARS

6%25-44 YEARS

30%45-64 YEARS

26%65+ YEARS

13%

37.1

2019MEDIAN AGE:

U.S. Median:

38.1

$121,300

2019 MEDIAN HOUSEHOLD INCOME:

U.S. Median:

$60,800

2M

2019POPULATION:

Growth2019-2024*:

5.4%

694K

2019HOUSEHOLDS:

5.9%

Growth2019-2024*:


37

SAN JOSE METRO AREA

Transit Networks Increasingly Key for

Development and Investment Strategies

Mountain View captivating builders, driving development to record high. Apartment construction will be

abundant this year as 5,500 units are slated for delivery — the highest total this millennium. Northern sections

of Sunnyvale will get much-needed supply amid sub-3 percent vacancy, while downtown San Jose will also

witness significant development as builders focus on areas that align with public transit routes. Mountain View

will post the strongest supply growth, adding more than 1,500 units, as developers seek to keep pace with the

steady job creation of nearby tech firms. The influx of supply will outstrip the expected absorption of 4,600

apartments, putting short-term pressure on marketwide vacancy as it’s pushed to the low-4 percent range.

Some areas such as East San Jose will retain limited apartment availability, keeping local rent growth among

the strongest in the market. Over the past five years, the average effective rent in East San Jose has risen 29

percent, the most of any submarket within the metro.

Favorable yields bringing investors to urban San Jose. Local buyers remain a key component of

investment activity as they home in on many of the area’s Class C assets, seeking properties with upside

potential. Assets throughout Los Altos and Palo Alto in the five- to 10-unit range will remain highly targeted

this year, fueled by the vigorous rental demand from nearby employment hubs, in addition to consistently

robust rent growth. Downtown San Jose will also attract these investors as this part of market offers

comparatively affordable entry costs and average returns in the mid-4 percent band, up to 50 basis points

above the market average. While local interest should remain stable, out-of-state buyers will continue to

arrive in San Jose, particularly institutional groups. In recent months, investors from the East Coast directed

their focus to the area’s larger Class B complexes along the Caltrain line in southern sections of the market,

purchasing units for roughly $420,000 per door.

* Estimate; ** Forecast

Sources: Marcus & Millichap Research Services; BLS; CoStar Group, Inc.


38

SAN JOSE METRO AREA

2020 Market Forecast

Job creation will remain diverse this year, with organizations adding 20,000

new employees.

Development will further accelerate following the completion of 2,700 units

last year and 1,400 apartments in 2018.

Elevated development will place pressure on market vacancy, driving it up to

4.3 percent. The rate decreased each of the previous three years by a total

of 80 basis points.

Coming off a 6.4 percent boost last year, the market’s rent growth will remain

stable in 2020 as the average effective rent rises to $3,080 per month.

Smaller Class C assets with value-add potential near major employers will

remain sought after by investors, strengthening bidding climates and putting

additional pressure on cap rates.

* Estimate; ** Forecast

Sources: CoStar Group, Inc.; RealPage, Inc.; Real Capital Analytics

Employment

up 1.7%

Construction

5,500 units

Vacancy

up 40 bps

Rent

up 3.3%

Investment

PROPERTY NAME

MARKETING TEAM


DEMOGRAPHICS

Source: © 2019 Experian

Created on June 2020

POPULATION 1 Miles 3 Miles 5 Miles

▪ 2024 Projection

Total Population 25,927 266,420 645,646

▪ 2019 Estimate


▪ 2010 Census


▪ 2000 Census


▪ Daytime Population

2019 Estimate 37,165 372,220 718,838

HOUSEHOLDS 1 Miles 3 Miles 5 Miles

▪ 2024 Projection

Total Households 10,491 107,730 240,003

▪ 2019 Estimate


Average (Mean) Household Size 2.46 2.42 2.63

▪ 2010 Census


▪ 2000 Census


Growth 2015-2020 5.12% 5.88% 5.26%

HOUSING UNITS 1 Miles 3 Miles 5 Miles

▪ Occupied Units

2024 Projection 10,491 107,730 240,003

2019 Estimate 10,230 103,877 230,989

Owner Occupied 4,800 40,525 108,093

Renter Occupied 5,179 61,227 119,919

Vacant 250 2,125 2,977

▪ Persons In Units

2019 Estimate Total Occupied Units 9,980 101,751 228,012

1 Person Units 31.30% 33.16% 27.97%

2 Person Units 31.63% 30.70% 29.39%

3 Person Units 15.10% 15.08% 16.66%

4 Person Units 12.01% 11.63% 14.29%

5 Person Units 5.44% 5.11% 6.16%

6+ Person Units 4.51% 4.32% 5.53%

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles

▪ 2019 Estimate

$200,000 or More 22.06% 18.36% 20.41%

$150,000 - $199,000 13.99% 13.35% 14.27%

$100,000 - $149,000 17.04% 18.83% 19.45%

$75,000 - $99,999 8.29% 9.78% 9.55%

$50,000 - $74,999 12.66% 12.13% 10.94%

$35,000 - $49,999 7.73% 8.59% 7.91%

$25,000 - $34,999 5.51% 5.47% 5.15%

$15,000 - $24,999 7.06% 5.85% 5.42%

Under $15,000 5.66% 7.66% 6.90%

Average Household Income $156,807 $144,697 $151,947

Median Household Income $108,419 $101,319 $110,178

Per Capita Income $63,561 $58,595 $56,667

POPULATION PROFILE 1 Miles 3 Miles 5 Miles

▪ Population By Age

2019 Estimate Total Population 24,716 253,443 615,873

Under 20 22.32% 21.58% 23.58%

20 to 34 Years 24.22% 28.30% 24.79%

35 to 39 Years 8.03% 8.33% 8.08%

40 to 49 Years 14.61% 13.81% 14.29%

50 to 64 Years 19.19% 16.76% 17.44%

Age 65+ 11.63% 11.21% 11.80%

Median Age 37.09 35.06 35.96

▪ Population 25+ by Education Level

2019 Estimate Population Age 25+ 17,628 180,052 429,579

Elementary (0-8) 4.46% 4.94% 5.28%

Some High School (9-11) 6.55% 6.15% 6.03%

High School Graduate (12) 16.54% 16.68% 16.10%

Some College (13-15) 19.32% 17.85% 16.92%

Associate Degree Only 6.22% 6.48% 6.84%

Bachelors Degree Only 26.48% 27.34% 26.61%

Graduate Degree 18.17% 18.78% 19.91%

▪ Population by Gender

2019 Estimate Total Population 24,716 253,443 615,873

Male Population 50.56% 51.55% 50.92%

Female Population 49.44% 48.45% 49.08%

39

Income

In 2019, the median household income for your selected geography is

$108,419, compare this to the US average which is currently $60,811.

The median household income for your area has changed by 92.34%

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

area will be $134,830 five years from now, which represents a change

of 24.36% from the current year.

The current year per capita income in your area is $63,561, compare

this to the US average, which is $33,623. The current year average

household income in your area is $156,807, compare this to the US

average which is $87,636.

Population

In 2019, the population in your selected geography is 24,716. The

population has changed by 10.40% since 2000. It is estimated that the

population in your area will be 25,927.00 five years from now, which

represents a change of 4.90% from the current year. The current

population is 50.56% male and 49.44% female. The median age of the

population in your area is 37.09, compare this to the US average

which is 38.08. The population density in your area is 7,860.46 people

per square mile.

Households

There are currently 9,980 households in your selected geography. The

number of households has changed by 12.46% since 2000. It is

estimated that the number of households in your area will be 10,491

five years from now, which represents a change of 5.12% from the

current year. The average household size in your area is 2.46

persons.

Employment

In 2019, there are 15,945 employees in your selected area, this is also

known as the daytime population. The 2000 Census revealed that

68.54% of employees are employed in white-collar occupations in this

geography, and 32.30% are employed in blue-collar occupations. In

2019, unemployment in this area is 2.65%. In 2000, the average time

traveled to work was 26.00 minutes.

Race and Ethnicity

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

61.08% White, 2.51% Black, 0.31% Native American and 14.91%

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

70.07% White, 12.87% Black, 0.19% Native American and 5.66%

Asian/Pacific Islander. People of Hispanic origin are counted

independently of race.

People of Hispanic origin make up 35.33% of the current year

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

18.17%.

PROPERTY NAME

MARKETING TEAM


Housing

The median housing value in your area was $841,521 in 2019,

compare this to the US average of $212,058. In 2000, there were

4,243 owner occupied housing units in your area and there were 4,632

renter occupied housing units in your area. The median rent at the

time was $903.

Source: © 2019 Experian

DEMOGRAPHICS

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DEMOGRAPHICS

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