4973-79 Narragansett Ave San Diego, CA 92107...Four (4) Units in South Ocean Beach w/ Four (4) Garages on ±6,989 SF Lot Walking Distance to the Iconic Ocean Beach Pier, local beaches,

Multifamily Investment Offering

Investment Property Sales | Acquisitions | 1031 Exchanges | Installment Sales | Advisory Services

Exclusive Agent: Joseph Burrough Broker/Agent CA DRE Lic.# 01762577 Phone: 858.352.6742 Email: [email protected]

4973-79 Narragansett AveSan Diego, CA 92107

Four (4) Units in South Ocean Beach w/ Four (4) Garages on ±6,989 SF LotWalking Distance to the Iconic Ocean Beach Pier, local beaches, dining establishments, and Sunset Cliffs

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed 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. Palma Commercial and/or any affiliate and/or agent(s) is not qualified to provide, and have not been contracted to provide, legal, financial, or tax advice, and any such advice regarding any investment by the recipients must be obtained from the recipients’ attorney, accountant, or tax professional.

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CONFIDENTIALITY AGREEMENT & DISCLAIMERThe information contained within this Multifamily Investment Offering (“MIO”) is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Palma Commercial (“Broker”), and shall not be made available to any other person or entity without the written consent of Palma Commercial. Those reviewing this MIO (“Prospective Buyer(s)”), agree not to engage in discussions, written or verbal, with any existing or prospective vendors, or residents of 4973-79 Narragansett Avenue (“Property”), regarding its contents and/or the Property’s potential availability for sale.

The information contained within this MIO is meant only to provide summarized information relating to the potential purchase of the Property, and is not to be relied upon by Prospective Buyer(s), either in part or in its entirety. Buyer must conduct their own thorough investigation of the Property, sufficient to satisfy themselves with its: development potential, zoning restrictions, condition, location, size, current operating performance, projected operating performance, overall desirability and risk, prior to removing all contingencies and taking ownership of it.

While the information contained herein has been obtained from sources we deem reliable, neither Broker or Seller have verified or will verify said information. Neither Broker or Seller make any representations or warranties, express or implied, as to the accuracy of the information contained within this MIO. References to square footage, age, construction costs, financial aspects of the property, and anything relating to the Property value, are all estimates, and are not to be relied upon by any Buyer.

Seller, at their sole discretion, retains the right to reject any offers to purchase the Property. Seller has no legal obligation to anyone reviewing this MIO, unless and until a fully executed purchase and sale agreement (“Purchase Agreement”) has been created, in which case, Sellers obligations will be articulated in said Purchase Agreement, as well as current governing law/code.

Broker is not and does not purport to be a legal, tax or financial advisor. Broker strongly advises that Prospective Buyer(s) consult with their legal, tax, and/or financial advisor, prior to removing all contingencies and finalizing the purchase contemplated herein.

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PROPERTY DESCRIPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Property Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Property Highlights & Investment Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Street Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Aerials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Parcel Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Property Photographs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PRICING & FINANCIAL ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rent Schedule & Income Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annualized Operating Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SUB-MARKET OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Neighborhood Description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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PROPERTY DESCRIPTION4973-79 Narragansett Ave

San Diego, CA 92107

4973-79 Narragansett Ave - Ocean Beach

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San Diego, CA 92107

PROPERTY CHARACTERISTICS

SYSTEMS Climate Control Wall Heat/Ceiling FansLighting Ceiling Fan/Light Fixtures

Property Address: 4973-79 Narragansett Ave. San Diego, CA 92107APN #: 448-172-28-00 SITE DESCRIPTION No. of Units 4Unit Mix 4 x 1Br/1Ba (±585 SF)

Year Built 1947Building Size (RBA) ±2,340 SFNo. of Buildings 2Stories 1Access Points Narragansett Avenue + AlleyParking 4 GaragesLot Size ±6,989 SFTopography FlatType of Ownership Fee SimpleZoning Designation RM-2-4Maximum Density 1 DU/1,750 SF of Lot Area

UTILITIES Water/Sewer Master Metered (Landlord Pays)Gas & Electricity Separately Metered (Tenants Pay) CONSTRUCTIONFoundation Concrete on GradeFraming WoodExterior Wood Shingle/Brick/Stucco (Combination)Roof Pitched CompositionWindows Aluminum Frame

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San Diego, CA 92107

• Phenomenal South Ocean Beach Location!• Two Blocks from Iconic OB Pier, the Beach, and OB Dining Options• Four (4) 1Br Apartments, Each w/ Private Outdoor Space • ±6,989 SF Lot Zoned RM-2-4, Future Redevelopment Potential• Two Separate Buildings on one Lot• Four (4) Single-Car Garages• Separately Metered for Gas and Electricity• Rental Upside Potential through Upgrades• Desirable and Rare South Ocean Beach Location, near Sunset Cliffs

Located in South Ocean Beach, within two blocks of the renowned OB Pier, its beach and tidepools, and local dining staples such as OB Noodle House (Bar 1502), Poma’s Deli, and the Raglan Public House, 4973-79 Narragansett Avenue (“Property”) features two single-story duplex buildings (one with attached bank of garages at the rear), with the following unit mix: Four (4) one-bedroom/one-bathroom units (±585 square feet), each with spacious individual outdoor areas/patios, as well as front and back door entry/access. The units were updated in the ‘90’s, including hardwood floors in the living areas, tile in kitchens and bathrooms, and wood cabinets from that era, yet can benefit from a modernization/rehab-effort of the property, given the highly desirable location, and the rents it commands for upgraded units. Off-street parking at the Property includes four (4) single-car garages at the alley, and one surface off-street space (covered) near the alley.

Built in approximately 1947 upon a ±6,989 SF lot, the two single-story duplexes here that house the four one-bedroom apartments are very similar in their construction, erected on concrete-on-grade foundations, using wood-frame construction and pitched roofs. Exterior siding is wood shingle/brick combo, except at the bank of garages (4) attached to the rear building at the alley, which has been redone with stucco siding, and has metal garage doors. Unit interiors feature wall heat, ceiling fan/light fixtures, hardwood and tile flooring, basic fixtures and appliances.

Given it’s superb coastal location, walking distance to scenic Sunset Cliffs, less than two blocks from stunning Pacific Ocean blue and white water views, several diverse beach access points, trendy local dining spots, and the iconic OB Pier, 4973-79 Narragansett Avenue is well-suited to an investor looking for a risk adverse long-term hold beach-area income property, with immediate upside by way of renovating the existing units and raising rents, and/or, an owner-user who may also find value in the potential for re-development of the lot with larger/more modern luxury residential units further down the road.

INVESTMENT OVERVIEW

PROPERTY HIGHLIGHTS

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San Diego, CA 92107

STREET MAP

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San Diego, CA 92107

PROPERTY AERIALS

Pacific Ocean

Narragansett Ave

Niagara Ave

Del

Mon

te A

ve

Mission Beach

Bacon St.

OB Noodle House Bar 1502 Raglan Public House

Ocean Beach Pier

Pacific Beach

La Jolla

WonderlandPoma’s Italian Deli Indie Yoga Hodad’s

Ocean Beach Park

Starbucks

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San Diego, CA 92107

PROPERTY AERIALS

Narragansett Ave

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San Diego, CA 92107

PARCEL MAP

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San Diego, CA 92107

PROPERTY PHOTOGRAPHS - Exterior

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San Diego, CA 92107

PROPERTY PHOTOGRAPHS - Interior

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PRICING & FINANCIAL ANALYSIS4973-79 Narragansett Ave

San Diego, CA 92107

RENT SCHEDULE

INCOME SUMMARY

Quantity Unit Type Unit Size (Est. SF) Current Rent Rent/SF Pro Forma

RentPro Forma

Rent/SF

4 1Br/1Ba ±585 $1,425-$1,450 $2.45 $1,850 $3.16

Quanity Unit Type Current Rents (Avg.)

MonthlyIncome

Pro Forma Rents

Pro Forma Income

4 1Br/1Ba $1,431 $5,724 $1,850 $7,400

Rental Income $5,724 $7,400

Laundry $0 $0

Parking/Garages $50 $50

Other Income $0 $0

Totals $5,774 $7,450

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San Diego, CA 92107

INCOME CURRENT PRO FORMAGross Potential Rent $68,688 $88,800Other Income 600 600Gross Potential Income $69,288 $89,400Less: Vacancy (2%) (1,386) (1,788)Effective Gross Income $67,902 $87,612Less: Expenses (26,753) (27,253)Net Operating Income $41,149 $60,359

EXPENSES CURRENT PRO FORMAReal Property Tax (1.16967%) $17,487 $17,487Insurance 2,306 2,306Management Fee 0 0Repairs & Maintenance 2,500 2,500Supplies 200 200Gas & Electricity 0 500Water/Sewer 2,600 2,600Landscaping 1,560 1,560Licenses & Permits 100 100Miscellaneous 0 0Total Expenses $26,753 $27,253Expenses per Unit $6,688 $6,813Expenses per SF $11.43 $11.65% of EGI 39.4% 31.1%

Notes/Assumptions:- Property taxes here reflect what a new owner would pay after re-assessment, based on the Price shown on the following page.

ANNUALIZED OPERATING DATA

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San Diego, CA 92107

Price $1,495,000Units 4

Price Per Unit $373,750Building SF ±2,340

Price Per SF $639

Year Built 1947

Lot Size (Total) ±6,989 SF

Net Operating Income - Current $41,149

Net Operating Income - Pro Forma $60,359

Cap Rate - Current 2.80%

Cap Rate - Pro Forma 4.00%

GRM - Current 21.77

GRM - Pro Forma 16.84

Proposed FinancingDown Payment (40%) $600,000

Loan Amount $900,000

Loan Type 5 Yrs Fixed

Loan Term 30 Years

Amortization 30 Years

Interest Rate 4.5%

Annual Debt Service $54,722

Pre-Tax Cash Flow - Current ($13,573)Pre-Tax Cash Flow - Pro Forma $5,637

Pre-Tax Cash on Cash Return - Current (2.30%)Pre-Tax Cash on Cash Return - Pro Forma 0.90%

PRICING

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Ocean Beach (“OB”) is a coastal community within the city of San Diego, located approximately seven miles northwest of downtown San Diego. Ocean Beach is bordered by the San Diego River estuary & Mission Beach (to the north), the Pacific Ocean (to the west), Froude Street (to the east), and Adair Street (to the south). The OB community planning area is about 1 square mile. OB is about as unpretentious as San Diego beach living gets, with sunny days punctuated by waves pounding the coastline of Sunset Cliffs and happy pets playing at Dog Beach.

While long known for its desirable beaches and surf culture, with a diverse coastline that includes several entry points to small beaches and stunning lookout points along Sunset Cliffs, tidepools just south of OB Pier, and wide sandy beaches stretching from north of the pier up to Dog Beach, Ocean Beach is becoming increasingly more desirable still lately, for renters and homeowners alike, at continually higher rents and prices, as new restaurants and shops gradually enter the local scene, older buildings become replaced with newer/more modern ones (often two to three stories, and boasting ocean views). The improving local economy, coupled with Ocean Beach’s unique geography, including great proximity beaches, downtown San Diego and the SD international airport, has allowed for a uniquely strong growth rate for properties in the area.

Besides its great beaches and coastline, local recreational attractions include the Dusty Rhodes Park with enclosed dog parks, and Robb Field athletic fields & skate park. It is common to see several organized team sports games being played here simultaneously in the evenings and on the weekends, thanks to the large area dedicated to public open space at the aforementioned parks. Other notable recreation attractions include

Sunset Cliffs Natural Park (just south of OB), and the Ocean Beach Municipal Pier, built in 1966, which is the longest concrete pier on the West Coast, measuring 1,971 feet. The pier, which includes a restaurant and a bait shop, is located at the south end of the beach at Niagara Avenue, and is available to the public for walking and fishing 24 hours a day. Sunset Cliffs is an area just to the south of Ocean Beach, which boasts amazing sunsets against the backdrop of dramatic cliffs leading down into the Pacific Ocean. This is an area of great natural aesthetic beauty, frequently enjoyed by residents and tourists alike. Ocean Beach is a surfer’s paradise, offering a wide variety of surf breaks including Sunset Cliffs with its unique bathymetry that can hold larger waves during bigger swells, as well as several solid beach breaks like “The Jetty” and “North of the Pier”, both of which are enhanced by manmade structures.

The Ocean Beach submarket has an estimated population of 27,987 residents (2017), up 3.1% from the estimated population in 2010. The median household income is estimated to be $61,635, wile the average household income is estimated to be $80,775, up about 6% since 2010. The median age for Ocean Beach residents is around 33.49, compared to 32.41 for the entire city of San Diego. The average number of people per household here is estimated to be 2.02, compared to 2.65 for the city of San Diego average.

Residents at 4973 Narragansett Avenue benefit from great proximity to the beaches (2 blocks), the Ocean Beach Pier (2 blocks), many local shops and restaurants along Newport Avenue (about 2 blocks), and Sunset Cliffs trails and natural park. This location has a walking score of 84! (very walkable). Sources: Wikipedia, Point2Homes, Palma Commercial research.

SUB-MARKET OVERVIEW4973-79 Narragansett Ave

San Diego, CA 92107

NEIGHBORHOOD DESCRIPTION

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The beach here was initially named Mussel Beach, for the mussels that used to be in abundance, and its current name, Ocean Beach, was given in 1887 by developers Billy Carlson and Albert E. Higgins. The pair built the Cliff House, a resort hotel, and subdivided the area into lots. To promote their subdivision, Carlson and Higgins organized various activities, including mussel roasts and concerts. Despite their efforts, the development did not do well, because it was two and a half hours by carriage from downtown San Diego at that time. They rented a locomotive, but by that time, the boom ended and the development was put on hold. The Ocean Beach railroad, launched in April 1888, was a casualty of the economic decline. Passengers could take a ferry from San Diego to Roseville in Point Loma to ride the train to the Cliff House. After a series of related events, including the death of Higgins and a fire burning down the Cliff House, Carlson sold the Ocean Beach tract to an eastern financier, delaying its development for 20 years.

By 1910 there were 100 houses in Ocean Beach compared to just 18 two years prior, helped in part by D.C.Collier’s contribution of building the Point Loma Railroad in 1909, to connect Ocean Beach to the rest of San Diego, which some local historians attribute to the eventual success of Ocean Beach gaining momentum as a place to live/invest. Mr. Collier also built Ocean Beach Elementary School, donated park land to the city, including most of Cleator Community Park and Collier Park, as well as land for Correia Middle School, and the YMCA and church next door. In the early 20th century, the northern part of Ocean Beach was dominated by Wonderland Amusement Park, opened on July 4th, 1913 and constructed on eight oceanfront acres at Voltaire & Abbott Streets. Having featured a large roller coaster, a dance pavilion, merry-go-round, menagerie and more, the park went bankrupt in 1915 and closed one year later. In 1915,

John D. Spreckels and his Bayshore Railway Company built a 1,500 feet wooden bridge connecting Ocean Beach to Mission Beach via trolley, and encouraged development in both communities. With the eventual demolition of the Ocean Beach-Mission Beach bridge in 1951, OB became geographically isolated from the rest of San Diego until the construction of Interstate 8 in 1967. The relative inaccessibility of Ocean Beach attracted the “hippie” element of the 1960s, which included drug use, protest meetings and picketing. During this decade, the fishing pier was constructed, and in 1966 the World Surfing Championship was held in OB, indicative of how the sport became an integral part of the local draw and culture early on. By the 1970s ‘hippiedom’ had mellowed, while local businesses and entrepreneurs began to emerge.

Newport Avenue, the main business street in Ocean Beach, featured family-owned businesses from the 1930s through the 1960s, including a book and novelty shop, drug stores, and a bakery. While a few chain businesses moved into Ocean Beach in the 1990s and early 2000s, the local economy of Ocean Beach has been slowly changing, yet remains largely dominated by small, independent businesses. In 2001, a grassroots effort attempted unsuccessfully to block Starbucks from opening a coffee shop here. Newport Avenue now features restaurants, coffee houses, bike & surf shops, and antique stores, among others. Just this year (2018), a Target Express signed a long-term lease to occupy a long-time staple Antique Store for the neighborhood, on Newport Avenue between Cable Street and Sunset Cliffs Boulevard, after much opposition from long-time residents and neighboring mom and pop businesses, which included prevelent signs and t-shirts in the area with the slogan “No OB Target”. Since around 2014, when our latest regional economic rebound gained full steam, the local restaurants have become slightly more high-end and trendy, as apartment/housing rents nearby have continued to rise, and newer standout local tenants including Wonderland Pub, Pizza Port Brewing Co., and Raglan Public House, while some more seasoned locally vaunted locales still remain, including Hodad’s and OB Noodle House (2 locations). Sources: Wikipedia, Point2Homes, Palma Commercial research.

SUB-MARKET OVERVIEW4973-79 Narragansett Ave

San Diego, CA 92107

NEIGHBORHOOD DESCRIPTION

Documents

4973-79 Narragansett Ave San Diego, CA 92107...Four (4) Units in South Ocean Beach w/ Four (4) Garages on ±6,989 SF Lot Walking Distance to the Iconic Ocean Beach Pier, local beaches,