DEVELOPMENT OPPORTUNITY · 16040 Sherman Way, Van Nuys, CA 91406 PHIL SEYMOUR Executive Vice President| BRE #00630158 C: 310. 612.9800 148 S. Beverly Dr., Beverly Hills, CA 90212

16040 Sherman Way, Van Nuys, CA 91406

PHIL SEYMOUR Executive Vice President| BRE #00630158 C: 310. 612.9800148 S. Beverly Dr., Beverly Hills, CA 90212 [email protected]

DEVELOPMENT OPPORTUNITYMulti-Family / Mixed Use

2.85 Acres (124,215 Sq. Ft.) Tenant: Toys "R" Us

Offering Price $ 16,950,000.

SALE IS SUBJECT TO COURT APPROVAL AND OVERBID. The date and time of the hearing is: Friday, April 13, 2018 at 9:00 AM

in Department A of the Los Angeles Superior Court - Van Nuys Courthouse East located at 6230 Sylmar Ave., Van Nuys, CA 91401

Minimum Overbid: $17,500,000.Contact Agent for Details

Table of Contents

16040 Sherman WayVan Nuys, CA 91406

Property Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3

Zoning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10

Van Nuys Overview . . . . . . . . . . . . . . . . . . . . . . . . . Page 15

Los Angeles Overview . . . . . . . . . . . . . . . . . . . . . . . Page 29

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A FULL SERVICE COMPANYSINCE 1982

ELITEPROPERTIESREALTY The information and calculations presented are deemed to be accurate, but not guaranteed and we

are not responsible for its correctness. .

DISCLAIMER

The information contained in the following Offering Memorandum is proprietary and strictly confidential. This Offering Memorandum has been prepared to provide a summary to prospective purchasers. The information contained herein is not a substitute for a thorough due diligence investigation on behalf of the buyer. Elite Properties Realty / Phil Seymour makes no warranty or representation with respect to the income or expenses, the future projected financial performance, size and square footage of the improvements and land of the subject property, 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, the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property, and any future development including but not limited to size, scope, and use. The information contained in this Offering Memorandum has been obtained from sources we believe to be reliable; however, Elite Properties Realty / Phil Seymour have not verified, and will not verify, any of the information contained herein, nor has Elite Properties Realty / Phil Seymour 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 the information set forth herein.

Sale Subject to Court Confirmation Contact Phil Seymour for details.

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Property Highlights16040 Sherman WayVan Nuys, CA 91406

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AERIAL OVERVIEW

SubjectProperty

Enci noMunic ipa l Gol f CourseThe

Japanese Garden

Van Nuys Ai rpor t

V a n Nuys Gol f Course Lake Balboa

Encino

Lake Balboa Park

Tarzana

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Subject Property facing West towards Van Nuys Airport

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Right: Looking Eastward Sherman Way, lined with multi-family projects and a concentration of small and local businesses.

Overlooking the San Fernando Valley North/East towards North Hills

Panorama City

SITE

Sherman Way

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PROPERTY SUMMARY

Address 16040 Sherman Way

APNS 2224-004-016 2224-004-017 2224-004-043

Estimated Land Area

2.85 acres

±124,215, square feet

Current Improvements

TOYS "R" US 40,000 square foot building

Term * Lease expires Feb. 28, 2018 with one year option

Rent $52,500 monthly$630,000 annual (NNN) Roof/ Structure, Landlord

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LEASE (NNN/Roof & Structure, Landlord)

*The start date of the lease is July of1972 and Toys “R” Us has exercisedtheir options multiple times.Pursuant to their lease, Toys "R" Us was to provide 6 months prior written notice of their intent to exercise their option to renew the lease for one additional year. Toys "R" Us did provide said notice in July 2017, extending the lease until February 28, 2019. Toys "R" Us has sought Chapter 11 Bankruptcy protection, and has neither rejected nor reaffirmed its lease, to date.

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Assessor Parcel Numbers:

224-004-017 (103,237 sq. ft.)

2224-004-016 (11,201 sq. ft.)

2224-004-043 (9,777 sq. ft.)

Total: 124,215 Sq. Ft. (2.85 Acres)

PLAT MAP

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AREA MAP

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Zoning and Density16040 Sherman WayVan Nuys, CA 91406

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ZIMAS Map Zoning C2-1VL

Uses: Retail w/ limited Manufacturing Service Stations and Garages, and R4

Uses (Multi-Family)

1VL= 45 ft. height or 3 stories. 3 Stories (Floor Area Ratio: 1.5 to 1)

Property is subject to an Enterprise Zone/ an Employment and Economic Incentive

Program Area (EZ)

See Generalized Summary of Zoning Regulations, City of Los Angeles

SUBJECT PARCELS outlined in blue above

DENSITY

SUBJECT

Sherman Way

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ZI NO. 2374

ENTERPRISE ZONE /EMPLOYMENT AND ECONOMIC INCENTIVE PROGRAM AREA (EZ)

(Shown as “State Enterprise Zone” on ZIMAS)

COMMENTS:

EZs are specific geographic areas designated by City Council resolution, and have received approval from the California Department of Commerce under either the Enterprise Zone Act Program or Employment And Economic Incentive Act Program. The Federal, State and City governments provide economic incentives to stimulate local investment and employment through tax and regulation relief and improvement of public services.

EZ special provisions applicable to plan check

Parking Standards - Section 12.21A4(x)(3):Except for the Downtown Business District parking area described in Section 12.21A4(i), projects within EZs, may utilize a lower parking ratio for commercial office, business, retail, restaurant, bar and related uses, trade schools, or research and development buildings thus increasing the buildable area of the parcel which is critical in older areas of the City where parcels are small.

Height - Section 12.21.4:Special height districts “EZ1", “EZ1-L", “EZ1-VL", “EZ1-XL", “EZ2", “EZ3" and “EZ4 were established for Enterprise Zones. Height district “EZ1” increases the total floor area contained in all the buildings on a lot to three times the buildable area. Note that the “EZ...” height district suffix must be accomplished by a Zone Change.

INSTRUCTIONS:

Apply the reduced parking ratio per Section 12.21A4(x)(3).

Apply the increased FAR, as indicated in Section 12.21.4A, only to those lots with the “EZ...” height district zone suffix.

For further information on Enterprise Zones please contact Community Development Department at 213-744-7111 or visit their web site at http://cdd.lacity.org/bus_zone.html

The information and calculations presented are deemed to be accurate, but not guaranteed and we are not responsible for its correctness.

ZONING REGULATIONS

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GENERALIZED SUMMARY OF ZONING REGULATIONS LOS ANGELES (CONTINUED)

ZONING REGULATIONS

13

Loading space is required for the RAS3, R4, RAS4, and R5 zones in accordance with Section 12.21 C 6 of the Zoning Code.

Open Space is required for 6 or more residential units in accordance with Section 12.21 G of the Zoning Code.

Passageway of 10 feet is required from the street to one entrance of each dwelling unit or guest room in every residential building, except for the RW, RU, and RZ zones, in accordance with

Section 12.21 C2 of the Zoning Code.

Zone Use

Maximum Height Required yards Minimum Area

Per Lot/ Unit

Min. Lot Width

Stories Feet Front Side Rear

Commercial (see loading and parking, next page)

CR Limited Commercial Banks, Clubs, Hotels, Churches, Schools, Business and Professional Colleges, Child Care, Parking Areas, R4 Uses

6 (8)

75 ft. (8)

10 ft. min. 10% lot width < 50 ft.; 10 ft.; 5 ft. min., for corner lots, lots adj. to A or R zone, or for

residential uses

15 ft. min + 1 ft. foreach storyover 3rd

same as R4 for resid. uses;

otherwise none

50 ft. for resid. uses;

otherwise none

C1 Limited Commercial Local Retail Stores < 100,000 sq. ft., Offices or Businesses, Hotels, Hospitals and/orClinics, Parking Areas, CR Uses Except forCurches, Schools, Museums, R3 Uses

Unlimited (8)

same as R3 for corner lots, lots adjacent to A or

R zone, or residential uses

15 ft. + 1 ft. for each story over 3rd; 20 ft. max for resid. uses or abutting A or

R zone

same as R3 zone for residential uses; otherwise none

C1.5 Limited Commercial C1 Uses–Retail, Theaters, Hotels,Broadcasting Studios, Parking Buildings, Parks and Playgrounds, R4 Uses

same as R4 zone for residential uses; otherwise none

C2 Commercial C1.5 Uses; Retail w/Limited Manuf., Service Stations and Garages, Retail Contr. Business, Churches, Schools, Auto Sales, R4 Uses

none none for commercial uses; same as R4 zone for residential

uses at lowest residential story

same as R4

for resid.

uses;

otherwise

none

same as

R4 for

residential

uses;

otherwise

none

C4 Commercial C2 Uses with Llimitations, R4 Uses

C5 Commercial C2 Uses, Limited Floor Area for Manuf. of CM Zone Type, R4 Uses

CM Commercial Manufacturing

Wholesale, Storage, Clinics, Limited Manuf., Limited C2 Uses, R3 Uses

Unlimited (8)

none none for commercial uses; same as R4 for residential uses

same as R3 for residential uses;

otherwise none

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(1} "H" Hillside areas may alter these requirements in the RA-H or RE-H zones. Subdivisions may be approved with smaller lots, provided larger lots are also included. Section 17.05 H 1 of the Zoning Code. (2) Section 12.08.3 B 1 of the Zoning Code.(3) Section 12.08.3 C 2 and 3 of the Zoning Code.(4) Section 12.09.5 C of the Zoning Code. For 2 or more lots the interior side yards may be eliminated, but 4 ft. is required oneach side of the grouped lots.(5) Section 12.17.5 B 9 (a}. Dwelling considered as accessory to industrial use only (watchman or caretaker including family.}(6) Height, yard and parking requirements for single family dwellings may be governed by the Hillside Ordinance, Section12.21 A 17 of the Zoning Code.(7) Side yard requirements for single family dwellings not in Hillside Areas or Coastal Zone may be governed by the "BigHouse" Ordinance, ord. 169,775, which has been codified in the yard requirements sections for the relevant zones.

(8) Height District (Section 12.21.1 of the Zoning Code} [see below for (9), (10)):

Height Districts

Zone 1 + 1L + 1VL + 1XL + 2 3 4

A1§, A2§, 45' 45' 30' 6 stories for 6 stories for 6 stories for RE40§, RZ, 3:1 FAR 3 stories t 2 stories t RD,RAS3 RD,RAS3 RD,RAS3 RMP, RW2, 3:1 FAR 3:1 FAR and R3t; and R3t; and R3t; RD, R3, otherwise otherwise otherwise RAS3 6:1 FAR 10:1 FAR 13:1 FAR RE11 §, 36' 36' 6:1 FAR 10: 1 FAR 13:1 FAR RE15 §, 3:1 FAR 3 stories t

RE20 §, RA 3:1 FAR &* R1§, R2, RS 33' 33' §, RE9 § * 3:1 FAR 3 stories t

3:1 FAR PB none 75' 45' 30' none none none

2 stories 2 stories 2 stories 2 stories 6 stories 10 stories 13 stories R4, RAS4, none 75' 45' 30' none none none R5 3:1 FAR 6 stories t 3 stories t 2 stories t 6:1 FAR 10:1 FAR 13:1 FAR

3:1 FAR 3:1 FAR 3:1 FAR C,M 1.5:1 FAR 75' 45' 30' 75' for CR; 75' for CR; 75' for CR;

6 stories t 3 stories t 2 stories t otherwise otherwise otherwise 1.5:1 FAR 1.5:1 FAR 1.5:1 FAR none none none

6:1 FAR 10:1 FAR 13:1 FAR PB 2 stories 2 stories 2 stories 2 stories 6 stories 10 stories 13 stories

GENERALIZED SUMMARY OF ZONING REGULATIONS LOS ANGELES (CONTINUED)

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ZONING REGULATIONS

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Van Nuys Overview16040 Sherman WayVan Nuys, CA 91406

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Neighboring North Hills to the North, Sherman Oaks to the South, Valley Glen to the East, Lake Balboa to the West, and centrally located between the 405 and 5 Freeways, Van Nuys is a neighborhood in the center of culturally diverse San Fernando Valley, known as a multifamily submarket and housing a growing population exceeding 100,000 residents. There is a big makeup of different types of land uses in Van Nuys including dense residential areas, large business centers, lots of industrial uses, and mom and pop retailers mixed in with single family units.

A City that has historically been known for its rows of shiny new car dealers park adjacent to retro-styled burger stands, food trucks, general stores and mismatched thrift centers, is seeing a steady growth of influx of residents and the ensuing changes that these bring to a community.

Van Nuys' demand for development and rent growth has seen a steady uptick, with infrastructural projects catering to sustain such growth.

VAN NUYS- OVERVIEW

Van Nuys Airport

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As demand for development and rents grow, infrastructural projects catering to sustain such growth are being implemented. Transit options have surged with proposed plans for a high capacity transit line that will be built over the next decade between the Van Nuys Orange Line station and the Sylmar/San Fernando Metrolink station called the East San Fernando Valley Transit Corridor.

Metro is studying four options for the line that will one day run on Van Nuys Boulevard and San Fernando Road: a light rail train, a streetcar or low-floor style train, a median-running rapid bus line, and a curb-running rapid bus line. For more information on this project, please visit: Curbed La- Proposed Transit Projects

Additionally, our property is situated within proximity to the SFV’s Orange Line: an 18-mile bus rapid transit system that runs through the San Fernando Valley from Chatsworth to North Hollywood which opened in 2005 and now serves more than 25,000 daily riders. It is hailed as one of the most successful bus lines of its type in the country, and serves to connect Van Nuys to its neighboring SFV cities, as well as to popular tourist and local destinations.

VAN NUYS- TRANSIT

To: LAX Airport: 35 minutes by car or 2 hours by public transit To: Santa Monica Pier: 25 minutes by carTo: Hollywood Walk of Fame: 20 minutes by carTo: Venice Boardwalk: 30 minutes by carTo: The Grove: 30 minutes by car To: Promenade 2035 20 minutes by car

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https://la.curbed.com/2017/9/5/16255030/valley-transit-eir-van-nuys




VAN NUYS- NEARBY ATTRACTIONS- Warner Center

To the West of our subject property approximately 20 minuted by car (8.5 miles), is the Warner Center district of Woodland Hills. It is slated to become a business and residential hub rivaling any of the busy communities in the Westside.

Australian developer Westfield plans to transform Warner Center's Promenade shopping mall with a massive mixed use complex with 1,400 units of housing and two hotels described as "a central park, new open spaces, sidewalk retail and a walkable, live-work-recreation environment" by its investors.

The project is to be called Promenade 2035.

Warner Center’s Promenade shopping mall is set to become a $3-billion, eco-friendly, transit-oriented, high-rise community.

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± 965-± 1610 SF

13E X E C U T I V E S U M M A R Y

With a fashionable lineup of more than 170 specialty stores, the Northridge Fashion Center is a premier shopping and dining destination in the San Fernando Valley. It operates best-in-class retail properties and provides an outstanding experience for its patrons and visitors.

Other San Fernando Valley shopping, dining and entertainment destinations include The Commons at Calabasas, The Americana at Brand in Glendale, The Village at Westfield Topanga in Warner Center and Universal City Walk.

VAN NUYS- NEARBY ATTRACTIONS & SHOPPING

Universal City Walk in Universal Studios Northridge Fashion Center

Distance from the Subject Property: Approx. 7 miles

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Population (1 mi)

34,023Avg. HH Size (1 mi)

3.0Avg. Age (1 mi)

35Med. HH Inc. (1 mi)

$45,840

DEMOGRAPHIC SUMMARY

3 Mile2 Mile1 MilePopulation

299,949109,78034,0232017 Population

310,704113,85935,3242022 Population

3.6%3.7%3.8%Pop Growth 2017-2022

3636352017 Average Age

Households

93,92934,75511,2032017 Households

97,14035,96511,6042022 Households

3.4%3.5%3.6%Household Growth 2017-2022

$49,045$46,467$45,840Median Household Income

3.13.13.0Average Household Size

222Average HH Vehicles

Housing

$451,075$429,229$438,748Median Home Value

196519651968Median Year Built

DEMOGRAPHIC OVERVIEW

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POPULATION BY AGE GROUP IN 1 MILE RADIUS

POPULATION BY EDUCATION IN 1 MILE RADIUSPOPULATION BY AGE IN 1 MILE RADIUS

AGE & EDUCATION

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POPULATION BY RACE

MILITARY POPULATION

3 Mile2 MileRace 1 Mile

2017 Population

238,97378.64%White 87,157 79.39% 79.67%26,754

15,4736.92%Black 6,375 5.81% 5.16%2,354

31,0239.10%Asian 10,762 9.80% 10.34%3,097

4,6111.70%American Indian & Alaskan 1,864 1.70% 1.54%580

759< 1%Hawaiian & Pacific Islander 306 < 1% < 1%92

9,1103.37%Other 3,317 3.02% 3.04%1,145

0 6,000 12,000 18,000 24,000 30,000

HISPANIC POPULATION IN 1 MILE RADIUSPOPULATION BY RACE IN 1 MILE RADIUS

3 Mile2 Mile1 Mile

2017 Population

92< 1%Military 63 < 1% < 1%23

152,32399.87%Non-Military Workforce 56,404 99.89% 99.94%17,381

0 3,600 7,200 10,800 14,400 18,000

ETHNICITY

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12 Mo. Deliveries in Units 12 Mo. Net Absorption Vacancy Rate 12 Mo. Rent Growth

24 91 2.8% 4.5%

Annual Trends 12 Month Change Hist. Avg. Fcst. Avg. Peak When Trough When

Vacancy -0.3% 3.5% 3.0% 4.3% 2009 Q4 2.1% 2000 Q3Net Absorption 91 61 65 507 2016 Q3 (249) 2002 Q2Net Deliveries 24 73 80 561 2016 Q4 0 2001 Q2Rent Growth 4.5% 2.9% 2.6% 8.5% 2001 Q1 -5.3% 2009 Q4Effective Rent Growth 7.2% 2.9% 2.6% 8.5% 2001 Q1 -5.3% 2009 Q4Sales ($ millions) $170 $122 N/A $226 2006 Q3 $35 2011 Q3

Van Nuys has historically been a stagnant multifamily submarket with little new development, but that is changing as robust rent growth drives an uptick in construction. Demand has kept pace with the new development nicely, helping keep the submarket vacancy rate among the lowest in LA. Van Nuys rents rank among the lowest in LA, but rent growth has been very strong in recent quarters. Van Nuys is traditionally one of the least expensive submarkets in LA to invest in, but investors have taken note of the improving fundamentals, with both prices and total sales volume rising.

Current Quarter Units Vacancy Rate Asking Rent Effective Rent Net Absorption Net Deliveries Under Construction

4 & 5 Star 699 5.6% $2,225 $2,202 (5) 0 1523 Star 3,268 3.3% $1,600 $1,584 3 0 761 & 2 Star 16,928 2.6% N/A N/A (3) -- 0SUBMARKET 20,895 2.8% $1,363 $1,349 (5) 0 228

16040 Sherman Way

OVERVIEW

KEY INDICATORS

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NET ABSORPTION, NET DELIVERIES AND VACANCY RATE

FUNDAMENTALS Van Nuys typically boasts some of the lowest vacancies in the metro. The vacancy rate remained below 5% even in the heart of the recession, and had held at or below 3% for several consecutive years through mid-2017. The submarket's first significant deliveries of the cycle came in early 2016, including the 4 Star 284-unit IMT Sherman Circle, causing vacancies to rise slightly, but the new projects are leasing at a healthy pace.

Rapid population growth and a low cost of living help drive demand in Van Nuys. The submarket, however, offers little in the way of economic, cultural, or entertainment options to lure renters. The population grew at double the rate of the metro area over the last five years, thanks in part to robust immigration. Almost half the residents were born outside of the United States. The median household income in Van Nuys is $38,000/year, well below the metro average of $62,000. The median price for a home is $365,000. With a 10% down payment, monthly mortgage payments would be $2,100, including taxes, fees, and insurance, which is 40% higher than the average monthly rent. For this reason, 75% of the submarket rents its homes, as a household would need to earn $84,000/year to afford the mortgage payments on a median-priced home.

16040 Sherman Way

OVERVIEW

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NET DELIVERIES

SUPPLY

Van Nuys traditionally sees very little new construction, ranking near the bottom of LA submarkets for deliveries over the past decade. The delivery of the 4-Star 284-unit IMT Sherman Circle in January 2016 is helpful in gauging demand for higher-end product in an area typically ignored by multifamily developers. Asking rents at IMT Sherman Circle are around 60% higher than the Van Nuys's average. Nevertheless, the complex was fully leased nine months after opening. IMT Residential is also behind the other major project currently underway, a 130-unit mixed-use complex at 5700 Sepulveda Blvd. That project is expected to deliver mid-2017.

IMT's projects are outliers however—most of Van Nuys' inventory is aging and of low quality. More than 80% of units are in 1 & 2 Star-rated properties, and more than 95% are in complexes more than 20 years old.

16040 Sherman Way

OVERVIEW

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CONSTRUCTION ACTIVITY

12 MONTH AVERAGE DELIVERIES IN UNITS AVERAGE BUILDING SIZE IN UNITS

16040 Sherman Way

OVERVIEW

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ASKING RENT LEVELS AND ANNUAL GROWTH

16040 Sherman Way

OVERVIEW

RENTS

With inventory dominated by older, low-quality buildings, rents in Van Nuys are among the lowest in all of Los Angeles. Historically, the pace of rent gains has been slow averaging below 3%, but low vacancies helped drive growth year-over-year around 6% as of June 2017. This mirrors a metrowide trend in which submarkets with low rents are posting some of the largest rent gains. This is likely the result of the increasing unaffordability of Los Angeles. Renters are flocking to submarkets where apartments are still relatively affordable, giving landlords in those areas more leverage to increase rents.

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SALES VOLUME AND MEDIAN PRICE

16040 Sherman Way

OVERVIEW

Van Nuys has traditionally been one of the least expensive submarkets in LA, and prices dropped to near $100,000/unit for several years following the recession. Deal volume and average pricing accelerated each year between 2014 and 2016, however. Investment volume this year is well-off the pace established in 2016, mirroring a slow-down that is playing out both regionally and nationally, but median pricing continues to climb.

Despite the limited demographic appeal of the area, low vacancies and inviting unit prices have drawn the attention of private investors. Kort & Scott Financial Group has been behind some of the submarket's largest recent deals. In July 2017, they acquired the 126-unit, 4 Star Woodley Sara apartments for about $43 million ($340,000/unit) from developer Pearl Development Group. From both an overall volume and a per unit pricing perspective, this was one of the largest multifamily deals ever recorded in the submarket. Woodley Sara, completed in August 2016, is one of Van Nuys' newest communities, but was already 98% leased at the time of sale. Kort & Scott Financial Group was also the buyer in the October 2016 acquisition of the 98-unit 6940 Sepulveda Blvd (then known as IMT on the Boulevard) for $33 million (about$337,000/unit). Collectively, Kort & Scott's acquisitions account for around 80% of total Van Nuys investment activity since the beginning of 2016.

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Los Angeles Overview16040 Sherman Way

Van Nuys, CA 91406

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RENTS

Rents gains have begun to moderate from the blistering growth posted earlier in the cycle. The rapid increase in apartment rents over the past few years has taken a toll on metro affordability. The rent-to-income ratio is approaching its limit, meaning that rent growth is unlikely to increase much faster than household income levels going forward. With vacancy levels so tight, rents will continue to increase, but the year-over-year growth figure is more likely to start with a two or three than with a five or six. Fundamentals remain tight enough that LA rent gains should continue to rank near the top of national markets for the foreseeable future.

Los Angeles Apartment

ASKING RENT LEVELS AND ANNUAL GROWTH

OVERVIEW-LA

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SALES VOLUME AND MEDIAN PRICE

SALESThe LA multifamily investment market has benefited from six consecutive years of rising prices and volume. Investors continue to scour this market for acquisitions, and helped make 2016 a record-setting year for LA apartment sales. Nearly $10 billion was invested in LA apartments over the course of the year, including a scorching-hot 16Q4, when more than $3 billion in trades were recorded. Through two quarters of 2017, total sales volume is off the pace set in 2016, a possible indication that the market has peaked from a volume perspective. This mirrors a significant national slowing in multifamily investment through two quarters of 2017. Virtually every corner of the metro has drawn interest in recent years, with trades ranging across the quality spectrum and throughout the county. In 2016, deals exceeding $30 million were recorded in places as diverse as the Beach Communities, the San Gabriel Valley, Southeast LA, Downtown, the Santa Clarita Valley, Northridge, and Long Beach. The average price per unit has passed $200,000, and investors appear willing to pay a premium for well-located product, with recent sales in Beverly Hills, Downtown, Santa Monica, Koreatown, and even the San Gabriel Valley eclipsing $600,000/unit.

Prices are still increasing, and the average price per unit has grown by nearly 75% since 2010. Prices advanced by over 10% year-over-year as of mid-2017, indicating that growth is still strong despite declining sales volume. As a result, the average cap rate is at an all-time low, near 4%. Los Angeles remains an appealing market for long-term capital preservation, but high pricing and declining cap rates may deter investors pursuing short-term gains.

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OVERVIEW-LA

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ELITE

PROPERTIES

REALTY

A FULL SERVICE COMPANY

== S/NC£ 1982

Ue.#00878444

For any additional information, please contact Agent.

Phil Seymour Executive Vice President (o) 310.271.4040 ext 130

(m) [email protected]

BRE#: 00630158

the Seymour group / Elite Properties Realty 148 South Beverly Drive Beverly Hills, CA 90212

BRE#: 008784444

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Documents

DEVELOPMENT OPPORTUNITY · 16040 Sherman Way, Van Nuys, CA 91406 PHIL SEYMOUR Executive Vice President| BRE #00630158 C: 310. 612.9800 148 S. Beverly Dr., Beverly Hills, CA 90212