OFFERING MEMORANDUM Addison Street Apartments

KW COMMERCIAL2701 Ocean Park Blvd.,Suite 140Santa Monica, CA 90405

CHARLES [email protected] #01852781

Addison Street Apartments

OFFERING MEMORANDUM

PRESENTED BY:

SHERMAN OAKS, CA

OFFERING MEMORANDUM

www.kwcommercial.com 2

KW COMMERCIAL2701 Ocean Park Blvd.,Suite 140Santa Monica, CA 90405

CHARLES [email protected] #01852781

Confidentiality & Disclaimer

OFFERING MEMORANDUM

All materials and information received or derived from KW Commercial its directors, officers, agents, advisors, affiliates and/or any third partysources are provided without representation or warranty as to completeness , veracity, or accuracy, condition of the property, compliance orlack of compliance with applicable governmental requirements, developability or suitability, financial performance of the property, projectedfinancial performance of the property for any party’s intended use or any and all other matters.

Neither KW Commercial its directors, officers, agents, advisors, or affiliates makes any representation or warranty, express or implied, as toaccuracy or completeness of the materials or information provided, derived, or received. Materials and information from any source, whetherwritten or verbal, that may be furnished for review are not a substitute for a party’s active conduct of its own due diligence to determine theseand other matters of significance to such party. KW Commercial will not investigate or verify any such matters or conduct due diligence for aparty unless otherwise agreed in writing.

EACH PARTY SHALL CONDUCT ITS OWN INDEPENDENT INVESTIGATION AND DUE DILIGENCE.

Any party contemplating or under contract or in escrow for a transaction is urged to verify all information and to conduct their own inspectionsand investigations including through appropriate third party independent professionals selected by such party. All financial data should beverified by the party including by obtaining and reading applicable documents and reports and consulting appropriate independentprofessionals. KW Commercial makes no warranties and/or representations regarding the veracity, completeness, or relevance of any financialdata or assumptions. KW Commercial does not serve as a financial advisor to any party regarding any proposed transaction.

All data and assumptions regarding financial performance, including that used for financial modeling purposes, may differ from actual data orperformance. Any estimates of market rents and/or projected rents that may be provided to a party do not necessarily mean that rents can beestablished at or increased to that level. Parties must evaluate any applicable contractual and governmental limitations as well as marketconditions,vacancy factors and other issues in order to determine rents from or for the property. Legal questions should be discussed by theparty with an attorney. Tax questions should be discussed by the party with a certified public accountant or tax attorney. Title questions shouldbe discussed by the party with a title officer or attorney. Questions regarding the condition of the property and whether the property complieswith applicable governmental requirements should be discussed by the party with appropriate engineers, architects, contractors, otherconsultants and governmental agencies. All properties and services are marketed by KW Commerical - Santa Monica in compliance with allapplicable fair housing and equal opportunity laws.

We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty orrepresentation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, orwithdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance ofthe property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

PRESENTED BY:

SHERMAN OAKS, CA

http://www.kwcommercial.com


PROPERTY INFORMATION

1 | PROPERTY INFORMATION

EXECUTIVE SUMMARY

PROPERTY DESCRIPTION

PROPERTY DETAILS

ADDITIONAL PHOTOS

1PROPERTY INFORMATION

ADDISON STREET APARTMENTS


PROPOSAL FOR COMMERCIAL SERVICES

OFFERING MEMORANDUM


Executive Summary

ADDISON STREET APARTMENTS 1 | PROPERTY INFORMATION


PROPERTY OVERVIEWFor sale, a 9 unit multifamily apartment building in prime ShermanOaks. Located just north of Riverside Dr and west of Hazeltine Ave,tenants can walk to Trader Joe’s, Westfield Fashion Square, or heada little further south and visit the restaurants, and retail on VenturaBlvd. The property offers spacious, 2 bedroom, townhouse styleunits, equipped with individual washer – dryers, water heaters,central heating and air, private patio or balcony, granite counter tops,and laminate wood floors. Built in 1977, on approximately 15,000 SFof land, the building has all copper plumbing, new - side overhanging roof and shingles, fresh exterior paint, 18 parking spaces intandem, gated entry and parking, *no parking is tucked underneath.Don't miss out on the opportunity to purchase this amazinginvestment property.

SALE PRICE: $3,390,000

UNITS: 9

PRICE PER UNIT: $376,667

CAP RATE: 3.53%

GRM: 16.98

LOT SIZE: 0.34 Acres

BUILDING SIZE: 9,942 SF

YEAR BUILT: 1977


PROPERTY OVERVIEWFor sale, a 9 unit multifamily apartment building in primeSherman Oaks. Located just north of Riverside Dr and westof Hazeltine Ave, tenants can walk to Trader Joe’s, WestfieldFashion Square, or head a little further south and visit therestaurants, and retail on Ventura Blvd. The property offersspacious, 2 bedroom, townhouse style units, equipped withindividual washer – dryers, water heaters, central heatingand air, private patio or balcony, granite counter tops, andlaminate wood floors. Built in 1977, on approximately 15,000SF of land, the building has all copper plumbing, new - sideover hanging roof and shingles, fresh exterior paint, 18parking spaces in tandem, gated entry and parking, *noparking is tucked underneath. Don't miss out on theopportunity to purchase this amazing investment property.

PROPERTY HIGHLIGHTSWasher Dryer in UnitPrivate PatiosFront Units Feature BalconiesTownhouse Style UnitsDishwashers, Granite Countertops, Laminate Wood Flooring,Individual Water Heater, Select Units have RefrigeratorsRange and Built in MicrowaveCopper PlumbingNew Side Roofs & ShinglesRecently Painted Exteriors

LOCATION OVERVIEWSherman Oaks is a neighborhood in the San FernandoValley region of Los Angeles, California, founded in 1927.The neighborhood includes a portion of the Santa MonicaMountains, which gives Sherman Oaks a lower populationdensity than some other areas in Los Angeles.

Property Description




Property Details



PROPERTY NAME: Addison Street Apartments

STREET ADDRESS: 14328-14334 Addison Street

CITY, STATE, ZIP: Sherman Oaks, CA 91423

APN: 2248-007-016

LOT SIZE: 0.34 AC

BUILDING SIZE: 9,942 SF

ZONING: LAR3

PARKING SPACES:18 Tandem SpacesGated Uncovered Parking

YEAR BUILT: 1977

NUMBER OF STORIES: 2

CONSTRUCTION:Wood Shingle on SlabWood Frame

NUMBER OF UNITS: 9



Additional Photos



LOCATION INFORMATION

2 | LOCATION INFORMATION

REGIONAL MAP

LOCATION MAPS

AERIAL MAP

2LOCATION INFORMATION




OFFERING MEMORANDUM

14328-14334 Addison Street

Regional Map

ADDISON STREET APARTMENTS 2 | LOCATION INFORMATION




Location Maps



Aerial Map




FINANCIAL ANALYSIS

3 | FINANCIAL ANALYSIS

FINANCIAL ANALYSIS

RENT ROLL

3FINANCIAL ANALYSIS




OFFERING MEMORANDUM

Summary

Price: 3,390,000$ Proposed Financing

Down Payment: 47% 1,600,000 New First Loan: 1,790,000$

Number of Units: 9 Interest Rate: 3.50%

Cost per Legal Unit: $376,667 Amortization: 30

Current GRM: 16.98 Monthly Payment: $8,038

Current GIM 16.98

Market GRM: 14.64 DCR 1.24

Market GIM 14.64

Current CAP: 3.53%

Market CAP: 4.44% Charles Cohen

Approx. Age: 1977 Office

Approx. Lot Size: 14,998 Cell (818) 299-1609

Approx. Gross SF: 9,942

Cost per Net GSF: $340.98

Annualized Operating Data

Current Rents Market Rents

Scheduled Gross Income: 199,663 231,600

Less Vacancy Rate Reserve: (5,990) 3.0% (6,948) 3.0%

Gross Operating Income: 193,673 224,652

Less Expenses: (74,012) 37.1% (74,012) 32.0%

Net Operating Income: 119,662 150,640

Less Loan Payments: (96,455) (96,455)

Pre-Tax Cash Flow: 23,207 1.5% * 54,186 3.4% *

Plus Principal Reduction: 34,675 34,675

Total Return Before Taxes: 57,882 3.6% * 88,860 5.6% *

** As a percent of Down Payment.

* As a percent of the down payment

Scheduled Income Estimated Annualized Expenses

Current Rents Market Rents Taxes: Rate 1.25% 42,375$

No. Bdrms/ Approx. Monthly Monthly Monthly Monthly Insurance 4,200$

of Units Baths Sq.Ft. Rent/Unit Income Rent/Unit Income Utilities 2.55% 5,100$

Maintenance/Repairs 3.51% 7,000$

Reserves 2.50% 5,000$

Gardner / Pest 1,150$

8 2+1.5 TH 1,000 1,833$ 14,664$ 2,100$ 16,800$ Management 4% 7,987$

1 2+2 Yard 1,100 1,975$ 1,975$ 2,500$ 2,500$ Trash 1,200$

Total Scheduled Rent: 16,639$ 19,300$ Total Expenses: $74,012

Laundry: Per Net Sq. Ft.: $7.44

Misc : $0 $0 Per Unit: $8,223.50

Annual Scheduled Rent $199,663 $231,600

Monthly Scheduled Gross Income: 16,639$ $19,300

Annual Scheduled Gross Income: 199,663$ $231,600

Utilities Paid by Tenant: Electric & Gas

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.


Financial Analysis

ADDISON STREET APARTMENTS 3 | FINANCIAL ANALYSIS


Current Proforma Move in Date

1 2x1.5 $1,739 TH $2,100 10/18/2011

2 2x1.5 $2,100 TH $2,100 May 1, 2017

3 2x1.5 $1,558 TH $2,100 Unknown

4 2x1.5 $1,857 TH $2,100 3/1/2017

5 2x1.5 $1,906 TH $2,100 5/1/2016

6 2x1.5 $1,900 TH $2,100 7/1/2014

7 2x1.5 $1,804 TH $2,100 6/15/2011

8 2x1.5 $1,801 TH $2,100 11/1/2012

9 2X2 $1,975 With Yard $2,500 10/1/2011

Monthly Rent $16,639 $19,300


Rent Roll

ADDISON STREET APARTMENTS 3 | FINANCIAL ANALYSIS


SALE COMPARABLES

4 | SALE COMPARABLES

SALE COMPS

SALE COMPS SUMMARY

SALE COMPS MAP

4SALE COMPARABLES




OFFERING MEMORANDUM

Sale Comps

ADDISON STREET APARTMENTS 4 | SALE COMPARABLES

SUBJECT PROPERTY

Sherman Oaks, CA 91423


UNIT TYPE # UNITS % OF SIZE SF RENT RENT/SF

2/1.5 8 88.9 1,000 $1,833 $1.83

2/2 1 11.1 1,100 $1,975 $1.80Liquid error: no implicit conversion from nil to integer

TOTAL/AVG 9 100% 1011 $1,848 $1.83

$3,390,000Sale Price: 1977Year Built:

9,942 SFBuilding SF: $340.98Price PSF:

9No. Units: $376,667Price / Unit:

3.53%Cap: 16.98GRM:


4445-4451 Murietta Ave




3.53%Cap: 02/01/2017Closed:

16GRM:

UNIT TYPE # UNITS % OF

1/1 15 62.5

2/1 9 37.5

TOTAL/AVG 24 100%

1

1



Sale Comps



14926 Dickens St




4.08%Cap: 04/24/2017Closed:

17.7GRM:


1/1 6 75

2/1 2 25

TOTAL/AVG 8 100%

2

2


14316 Riverside Dr




3.54%Cap: 04/14/2017Closed:

17.68GRM:


1/1 4 50

2/1 4 50

TOTAL/AVG 8 100%

3

3



SUBJECT PROPERTY PRICE BLDG SF PRICE/SF PRICE/UNIT CAP GRM # OF UNITS

Addison Street Apartments14328-14334 Addison StreetSherman Oaks, CA 91423

$3,390,000 9,942 SF $340.98 $376,667 3.53% 16.98 9

SALE COMPS PRICE BLDG SF PRICE/SF PRICE/UNIT CAP GRM # OF UNITS CLOSE

1 4445-4451 Murietta AveSherman Oaks, CA 91423

$7,500,000 19,480 SF $385.01 $312,500 3.53% 16 24 02/01/2017

2 14926 Dickens StSherman Oaks, CA 91403

$2,650,000 6,524 SF $406.19 $331,250 4.08% 17.7 8 04/24/2017

3 14316 Riverside DrSherman Oaks, CA 91423

$2,410,000 7,400 SF $325.68 $301,250 3.54% 17.68 8 04/14/2017

SALE COMPS PRICE BLDG SF PRICE/SF PRICE/UNIT CAP GRM # OF UNITS

TOTALS/AVERAGES $4,186,667 11,135 SF $375.99 $314,078 3.72% 17.13 13.33

Sale Comps Summary




14328-14334 Addison Street | Sherman Oaks, CA 91423SUBJECT PROPERTY

Sale Comps Map


1

4445-4451 Murietta AveSherman Oaks, CA 91423

2

14926 Dickens StSherman Oaks, CA 91403

3

14316 Riverside DrSherman Oaks, CA 91423



RENT COMPARABLES

5 | RENT COMPARABLES

RENT COMPS

RENT COMPS MAP

5RENT COMPARABLES




OFFERING MEMORANDUM

Rent Comps

ADDISON STREET APARTMENTS 5 | RENT COMPARABLES

SUBJECT PROPERTY



1977Year Built: 0.34 ACLot Size:9No. Units: $1.83Avg. Rent/SF:$1,848Avg. Rent: 1,011 SFAvg. Size:

UNIT TYPE # UNITS % OF SIZE SF RENT RENT/SF

2/1.5 8 88.9 1,000 $1,833 $1.83

2/2 1 11.1 1,100 $1,975 $1.80Liquid error: no implicit conversion from nil to integer

TOTAL/AVG 9 100% 1011 $1,848 $1.83


4433 Murietta Avenue

1955Year Built: 24No. Units:

UNIT TYPE RENT

2/1 $2,000Liquid error: no implicit conversion from nil to integer

1

1



Rent Comps



4421-27 Murietta Avenue


UNIT TYPE RENT


2

2


14045 Milbank Street

7No. Units:

UNIT TYPE RENT


3

3



Rent Comps



4540 Hazeltine Avenue


UNIT TYPE RENT


4

4



14328-14334 Addison Street | Sherman Oaks, CA 91423

SUBJECT PROPERTY

Rent Comps Map


1 4433 Murietta AvenueSherman Oaks, CA 91423

2 4421-27 Murietta AvenueSherman Oaks, CA 91423

3 14045 Milbank StreetSherman Oaks, CA 91423

4 4540 Hazeltine AvenueSherman Oaks, CA 91423



LOCATION OVERVIEW

6 | LOCATION OVERVIEW

LOCATION OVERVIEW

DEMOGRAPHICS MAP

RETAILER MAP

6LOCATION OVERVIEW




OFFERING MEMORANDUM

Sherman Oaks

Sherman Oaks is a neighborhood in

the San Fernando Valley region of Los

Angeles, California, founded in 1927.

The neighborhood includes a portion of

the Santa Monica Mountains, which

gives Sherman Oaks a lower population

density than some other areas in Los

Angeles.

Upscale Neighborhood Over The Hill

from Beverly Hills

Even though the San Fernando Valley is

known as one of L.A.’s largest regions,

there are local neighborhoods that are

easily navigated and pedestrian friendly.

The historic and upscale neighborhood

of Sherman Oaks is one of those areas,

especially along Ventura Boulevard,

which one can explore on foot. Many of

L.A.’s favorite restaurants and stores

have Valley locations in Sherman Oaks,

which is just “over the hill” from Bel-Air

and Beverly Hills. Though it’s nice to

come across familiar brands, there are

numerous local gems that make

Sherman Oaks truly a delight to explore

on foot.

Rapid Business Growth in a Thriving

Community

The local business community has been

experiencing rapid growth as new

businesses continue to join our already

thriving community. Sherman Oaks is

increasingly known for its highly sought

after real estate, exclusive shopping,

dining destinations, fitness studios, and

more.

The Famous Van Nuys Boulevard

Van Nuys Boulevard is a major north-

south arterial road that runs through the

central San Fernando Valley of Los

Angeles County, California.

Center of Car Culture

Van Nuys Boulevard runs approximately

ten miles from the Santa Monica

Mountains in Sherman Oaks at its

southern terminus to the foothills of the

western end of the San Gabriel

Mountains in Lake View Terrace at its

northern terminus. It passes through the

affluent community of Sherman Oaks,

then continues through the community of

Van Nuys, passing the numerous

automobile dealerships in southern Van

Nuys, then passing through the Van

Nuys Municipal Center, the government

center of the San Fernando Valley, then

continuing north through Panorama City,

past the old General Motors plant now

converted into a shopping plaza called

“The Plant”.

With its wide expanse through the heart

of the San Fernando Valley, Van Nuys

Boulevard became known from the

1950s through the 1970s as a center of

cruising. Since then, the car culture still

lives on through the numerous

automobile dealerships that line both

sides of Van Nuys Boulevard in northern

Sherman Oaks and southern Van Nuys.

Population

61,166 population in 2000,

according to the U.S. Census

65,436 population in 2008, based

on L.A. Department of City

Planning estimates

9.15 square miles

6,687 people per square

mile, among the lowest

densities for the city of Los

Angeles but about average for the

county

Sherman Oaks Neighborhood

Sherman Oaks Galleria

Sherman Oaks Street Fair


Location Overview

ADDISON STREET APARTMENTS 6 | LOCATION OVERVIEW


Income Profile

$69,651 median household income (2008

dollars), high for the city of Los Angeles but about

average for the county

In Los Angeles County, Studio City, Lake Hughes and East

Pasadena have the most similar household incomes

The percentage of households earning $125,000 and up is

high for the county

Education Profile

45.7% of residents 25 and older have a 4-year

degree, high for the city of Los Angeles and high for the

county

In LA County, Rowland Heights, Northridge and Silver

Lake have the nearest percentage of residents 25 and

older with a four-year degree.

The percentages of residents 25 and older with a

bachelor's degree, a master's degree or higher and some

college education are high for the county.

Age

The median age is 37, old for the city of Los

Angeles and old for the county

In Los Angeles County, Acton, Agoura

Hills and Altadena have similar median ages.

The percentages of residents ages 19 to 34, 35 to

49 and 65 and older are among the county's highest.


Location Overview



San Fernando Valley

Almost 2.5 million people reside in the San Fernando

Valley, which includes the submarkets of Northridge-

Northwest San Fernando Valley; Van Nuys-Northeast

San Fernando Valley; Woodland Hills; Burbank-

Glendale-Pasadena; as well as Sherman Oaks-North

Hollywood-Encino. The area’s population is expected

to increase by 1.9 percent through 2019, or by nearly

45,000 new residents.

Entertainment Industry

Known for its entertainment industry, the Valley boasts

more than 100 soundstages. Entertainment giants

calling the Valley home include Walt Disney Co.,

Universal Studios, Warner Brothers, DreamWorks and

Paramount Ranch. The entertainment industry

continues to set the area’s economic pulse. Local

motion-picture and entertainment companies employ

roughly 25,000 people.

Limitless Opportunities and Trendsetters

While the Valley has grown into the world’s center for

entertainment, aerospace giants Boeing and Northrop

Grumman, and 21st Century Insurance also generate

numerous well-paying jobs. Healthcare is a also a

major source of employment with providers that

include Kaiser Permanente, and Providence Health &

Services. As a result of its large concentration of high-

salaries and successful companies, the area’s median

household income of $59,300 per year has risen

dramatically since 2000. Although the median home prices

dipped during the recession, affordability remains a

challenge for much of the local population. High home

prices keep the homeownership rate near 50% in the San

Fernando Valley and provide a large rental base.

Top Area Employers


Location Overview




* Demographic data derived from 2010 US Census

Demographics Map


ETHNICITY 1 MILE 2 MILES 3 MILES

% HISPANIC 14.4% 28.0% 34.4%

RACE 1 MILE 2 MILES 3 MILES

% WHITE 79.4% 70.4% 65.1%

% BLACK 4.5% 4.1% 4.2%

% ASIAN 7.9% 7.5% 7.2%

% HAWAIIAN 0.1% 0.1% 0.1%

% INDIAN 0.5% 0.5% 0.4%

% OTHER 3.8% 14.2% 19.9%

POPULATION 1 MILE 2 MILES 3 MILES

TOTAL POPULATION 32,246 111,425 222,736

MEDIAN AGE 38.3 37.0 36.7

MEDIAN AGE (MALE) 37.3 35.8 35.9

MEDIAN AGE (FEMALE) 39.5 38.1 37.5

HOUSEHOLDS & INCOME 1 MILE 2 MILES 3 MILES

TOTAL HOUSEHOLDS 15,749 49,169 89,349

# OF PERSONS PER HH 2.0 2.3 2.5

AVERAGE HH INCOME $86,404 $89,881 $91,258

AVERAGE HOUSE VALUE $611,046 $757,667 $765,178


Retailer Map




Documents

OFFERING MEMORANDUM Addison Street Apartments