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L O S A N G E L E S , C A 9 0 0 6 1Exclusively Listed By: D E R E K S T E P H E N S & Z A C H A R Y Z A N E L L O
13103 SOUTH BROADWAY
NON-ENDORSEMENT & DISCLAIMER NOTICECONFIDENTIALITY & 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. © 2019 Marcus & Millichap. All rights reserved.
N O N - E N D O R S E M E N T N O T I C EMarcus & 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.
A L L P R O P E R T Y S H O W I N G S A R E B Y A P P O I N T M E N T O N L Y.P L E A S E C O N S U L T Y O U R M A R C U S & M I L L I C H A P A G E N T F O R M O R E D E T A I L S .
OFFICES THROUGHOUT THE U.S. AND CANADAwww.marcusmillichap.com
Marcus & Millichap is pleased to present this Exclusive Offering for the sale of 13103 South Broadway, a single-tenant building of approximately 5,586 square feet in the City of Los Angeles, California. The building is situated on approximately 8,050 square feet of industrial zoned land. The subject property was built in 1961 of concrete block construction. This fa-cility has historically enjoyed a very high occupancy level and is currently 100 percent occupied. The interior build-out has been reconfigured to meet the tenant’s operational requirements.
The property is currently leased to LA Hydro, a cannabis cultivation com-pany that has committed to a long-term lease of 5 years. Under the terms of the lease, the Landlord is only responsible for the property taxes and insurance, which makes the tenant solely responsible for the maintenance of the building including the roof, structure, parking, mechanical systems and utilities.
The sale represents a rare opportunity for an investor to acquire a 100 percent occupied single-tenant investment with a growth oriented tenant in the cannabis industry. The State of California has the largest cannabis economy in the world, supported by the state government and populous. LA Hydro currently cultivates and distributes cannabis for their two legal dispensaries in Southern California.
The property is located in a highly desirable area on the southwest corner of South Broadway and West 131st Street, with nearly 200’ of combined frontage. It is approximately one-half mile east of the 110 freeway and roughly one mile south of the 110-105 freeway interchange. The property resides within the 90061 zip code where industrial vacancy rates are at an all-time low of 2.9 percent.
E X E C U T I V E S U M M A R Y 3
EXECUTIVE SUMMARY
TABLE OF
CONTENTS
01 02 03OFFERING SUMMARY MARKET COMPARABLES MARKET OVERVIEW
13103 South BroadwayLOS ANGELES , CA 90061
SECTION 1 OFFERING SUMMARY
1 3 1 0 3 S O U T H B R O A D W A Y
» Rare Single-Tenant Industrial Investment Opportunity
» Attractive Year 1 CAP Rate of 7.94%
» Brand New 5-Year Personally Guaranteed Lease
» 3% Rental Increases Annually
» Lessor Only Responsible for Property Tax & Insurance
ABOUT THE INVESTMENTTHE OFFERING
Purchase Price $1,500,000
Price/SF $268.53
Cap Rate 7.94%
Net Operating Income $119,098
Monthly Rent/SF $2.15
» Strong Location Fundamentals with Very Low Industrial Vacancy Rates at 2.9%
» Hard Corner Location with Substantial Frontage
» Immediate Access to the 110 Freeway
» Approximately 1 Mile to the 110-105 Freeway Interchange
» Proximity to Downtown Los Angeles, LAX, and the Ports of Los Angeles and Long Beach
ABOUT THE LOCATIONCURRENT INCOME STATEMENT
Gross Rents Collected $144,000
Real Estate Taxes (1) ($19,995)
Property Insurance (2) ($4,907)
Net Operating Income $119,098
(1) 1.29% of the purchase price(2) Actual expense for an extended policy with Farmers Insurance.
INVESTMENT HIGHLIGHTS
O F F E R I N G S U M M A R Y6
RENT SCHEDULE
Lease Year Annual Rent Monthly Rent Rent Escalation
1 $144,000 $12,000
2 $148,320 $12,360 3%
3 $152,770 $12,731 3%
4 $157,353 $13,113 3%
5 $162,073 $13,506 3%
LEASE SUMMARY
Property Type Industrial Warehouse
Tenant LA Hydro
Guarantor Personal Guarantee
Lease Commencement 4/15/2019
Lease Expiration 4/14/2024
Lease Term Remaining 5 Years
Lease Type Modified Gross (MG)
Current Annual Rent $144,000
Rental Increases 3%
LEASE STRUCTURE - MODIFIED GROSS
Roof Tenant
Structure Tenant
HVAC Tenant
Common Area Maintenance Tenant
Parking Tenant
Utilities Tenant
Property Taxes Landlord
Property Insurance Landlord
LEASE SUMMARY
O F F E R I N G S U M M A R Y 7
1 3 1 0 3 S O U T H B R O A D W A Y
PROPERTY DESCRIPTION
Construction/MechanicalYear Built 1961
Construction Type Concrete Block
Number of Floors 1
Mezzanine None
Clear Height 14’ - 15’
Sprinklers None
Ground Level Doors (2)10’w x 10’h
Parking Surface Paved Asphalt
Power 1200a
PROPERTY ADDRESS13103 South Broadway Los Angeles, CA 90061 APN: 6132-011-017
Site DescriptionType of Ownership Fee Simple
Rentable Square Feet 5,586
Lot Size Square Feet 8,050
Floor Area Ratio (FAR) 0.69
Zoning M1 1/2-B1
Landscaping None
Parking Spaces 4
Parking Ratio 0.71/1000 SF
Street Frontage 64’ on South Broadway, 127’ on West 131st Street
Cross Street West 131st Street
O F F E R I N G S U M M A R Y8
PARCEL MAP
N
O F F E R I N G S U M M A R Y 9
1 3 1 0 3 S O U T H B R O A D W A Y
LOCAL MAP
N
SUBJECT PROPERTY
13103 SOUTH BROADWAY
O F F E R I N G S U M M A R Y10
ASubject Property to DTLA10.2 Miles Driving Distance
BSubject Property to 110 Freeway0.9 Miles Driving Distance
CSubject Property to LAX8.2 Miles Driving Distance
DSubject Property to Port of Los Angeles15.1 Miles Driving Distance
REGIONAL MAP
N
SUBJECT PROPERTY
13103 SOUTH BROADWAY
A
C
10.2 Miles
8.2 Miles
15.1 MilesD
B0.9 Miles
O F F E R I N G S U M M A R Y 11
13103 South BroadwayLOS ANGELES , CA 90061
SECTION 2MARKET COMPARABLES
1 3 1 0 3 S O U T H B R O A D W A Y
N
SUBJECT PROPERTY
13103 SOUTH BROADWAY
4
6 3
5
SALES COMPARABLES13103 SOUTH BROADWAY
1 2990 MARTIN LUTHER KING JR BOULEVARD
2 5415 MAYWOOD AVE
3 13017 SOUTH BROADWAY
4 422 WEST ROSECRANS AVENUE
5 1522 WEST 135TH STREET
6 1735-1739 WEST 132ND STREET
1
2
M A R K E T C O M P A R A B L E S14
380.00
360.00
340.00
320.00
300.00
280.00
260.00
240.00
220.00
200.00
180.00
13103 SOUTH BROADWAY
Average Price Per SF
13017 SOUTH BROADWAY
422 WEST ROSECRANS
AVENUE
1522 WEST 135TH STREET
Avg $278.86
SALES COMPARABLES
2990 MARTIN LUTHER KING JR
BOULEVARD
5415 MAYWOOD AVENUE
1735-1739 WEST 132ND STREET
M A R K E T C O M P A R A B L E S 15
1 3 1 0 3 S O U T H B R O A D W A Y
SALES COMPARABLES
1 3 1 0 3 S O U T H B R O A D W A Y Los Angeles, CA 90061
Proposed List Price $1,500,000
Rentable SF 5,586
Price/Rentable SF $268.53
CAP Rate 7.94%
Year Built 1961
Lot Size SF 8,050
1 2 9 9 0 M A R T I N L U T H E R K I N G J R B O U L E VA R D Lynwood, CA 90262
Sale Price $3,000,000
COE 1/2/2018
Rentable SF 8,304
Price/Rentable SF $361.27
Year Built 1950
Lot Size SF 32,405
2 5 4 1 5 M A Y W O O D A V E N U E Maywood, CA 90270
Sale Price $5,600,000
COE 2/22/2018
Rentable SF 18,104
Price/Rentable SF $309.32
Year Built 1989
Lot Size SF 30,492
Note: Cannabis cultivation facility. Note: Cannabis cultivation facility.
M A R K E T C O M P A R A B L E S16
3 1 3 0 1 7 S O U T H B R O A D W A Y Los Angeles, CA 90061
Sale Price $1,905,000
COE 8/10/2018
Rentable SF 8,000
Price/Rentable SF $238.13
Year Built 1965
Lot Size SF 13,939
4
Sale Price $2,359,000
COE 11/13/2018
Rentable SF 9,350
Price/Rentable SF $252.30
Year Built 1968
Lot Size SF 18,295
4 2 2 W E S T R O S E C R A N S A V E N U E Gardena, CA 90248
5 1 5 2 2 W E S T 1 3 5 T H S T R E E T Gardena, CA 90249
Sale Price $1,650,000
COE 4/12/2018
Rentable SF 6,150
Price/Rentable SF $268.29
Year Built 1957
Lot Size SF 14,000
M A R K E T C O M P A R A B L E S 17
1 3 1 0 3 S O U T H B R O A D W A Y
SALES COMPARABLES
6 1 73 5 - 1 73 9 W E ST 1 3 2 N D ST R E E T Gardena, CA 90249
Sale Price $3,950,000
COE 3/4/2019
Rentable SF 16,200
Price/Rentable SF $243.83
Year Built 1973
Lot Size SF 39,640
M A R K E T C O M P A R A B L E S18
1
2
SUBJECT PROPERTY
13103 SOUTH BROADWAY
3
ON MARKET COMPARABLES13103 SOUTH BROADWAY
1 416 WEST EL SEGUNDO BOULEVARD
2 332 WEST 130TH STREET
3 1625 WEST 144TH STREET
M A R K E T C O M P A R A B L E S 19
1 3 1 0 3 S O U T H B R O A D W A Y
300.00
290.00
280.00
270.00
260.00
250.00
240.00
230.00
220.00
210.00
200.00
Average Price Per SF
Avg $265.33
ON MARKET COMPARABLES
13103 SOUTH BROADWAY
416 WEST EL SEGUNDO
BOULEVARD
1625 WEST 144TH STREET
332 WEST 130TH STREET
M A R K E T C O M P A R A B L E S20
ON MARKET COMPARABLES
2 3 3 2 W E S T 1 3 0 T H S T R E E TLos Angeles, CA 90061
Sale Price $1,175,000
On Market 83 Days
Rentable SF 5,000
Price/Rentable SF $235.00
Year Built 1967
Lot Size SF 7,405
1 3 1 0 3 S O U T H B R O A D W A Y Los Angeles, CA 90061
Proposed List Price $1,500,000
Rentable SF 5,586
Price/Rentable SF $268.53
CAP Rate 7.94%
Year Built 1961
Lot Size SF 8,050
1 4 1 6 W E S T E L S E G U N D O B O U L E V A R DLos Angeles, CA 90061
Sale Price $2,150,000
On Market 35 Days
Rentable SF 8,240
Price/Rentable SF $260.92
Year Built 1966
Lot Size SF 13,068
M A R K E T C O M P A R A B L E S 21
1 3 1 0 3 S O U T H B R O A D W A Y
3 1 6 2 5 W E S T 1 4 4 T H S T R E E TGardena, CA 90247
Sale Price $2,000,000
On Market 203 Days
Rentable SF 7,700
Price/Rentable SF $259.74
Year Built 1962
Lot Size SF 16,988
M A R K E T C O M P A R A B L E S22
13103 South BroadwayLOS ANGELES , CA 90061
SECTION 3MARKET OVERVIEW
1 3 1 0 3 S O U T H B R O A D W A Y
M A R K E T O V E R V I E W24
SIZABLE MANUFACTURING SECTOR, MINIMAL VACANT STOCK INTENSIFY BUYER COMPETITION
Consistent job growth limits space availability. Los Angeles County is home to the nation’s second-largest manufacturing workforce thanks to a diverse base of expanding manufacturers, including a collection of tech producers and a consortium of logistics firms. Growth by these companies supported strong market demand for industrial space over the past four years. The result was robust leasing velocity that sustained the metro’s vacancy rate at an extremely low level amid the delivery of more than 19 million square feet of new supply. Industrial users’ ability to quickly occupy speculative buildings and recently vacated properties over an extended span should warrant another stretch of elevated devel-opment moving forward, yet construction will slow in 2019 when com-pared to the previous two years. Warehouse projects account for most of the 2.6 million square feet of space slated for finalization this year, with roughly half of the supply concentrated in the Santa Clarita and San Gabriel valleys. This tempering of deliveries teamed with a positive outlook for manufacturing job creation maintains stout market demand for space, holding vacancy below 3 percent for a fifth consecutive year.
Strong NOI growth heightens competition, value of strategically located buildings and higher-yielding properties. Unwavering investor demand for industrial assets continues to drive up property values throughout the market. Locally based and out-of-state institutional investors that deploy more than $20 million per deal actively pursue midsized to larg-er warehouses at mid-4 percent minimum returns. Buyers eyeing post-2000-built properties scan the San Gabriel Valley, while those willing to accept higher prices comb South Bay markets. Industrial-heavy locales near Interstate 5 provide yields in the 5 percent range for Class B and C manufacturing facilities.
FIRST HALF 2019
NIPI Rank1, no change
The lowest vacancy rate among metros in the Index helps Los Angeles maintain the top spot in the 2019 NIPI.
Employmentup 1.1%
Organizations expand payrolls by 50,000 workers in 2019 after the metro’s employment base grew by 1.2 percent last year.
Construction2.6 million sq. ft.
Delivery volume declines by more than 2.4 million square feet on a year-over-year basis. The city of Long Beach welcomes four properties totaling nearly 400,000 square feet.
Vacancyup 20 bps
The county’s vacancy rate adjusts marginally this year, reaching 2.7 percent. In 2018, an increase of 50 basis points was noted.
Rentup 3.5%
The average asking rent climbs to $11.64 per square foot, a moderate uptick following a five-year span of siz-able gains.
Investment Distribution centers south of Downtown Los Angeles near Interstate 5 remain an attractive investment play for out-of-state buyers seeking centrally located prop-erties at $20 million-plus. These larger, pre-1990s-built assets are typically available at pricing below the met-ro’s average.
2019 MARKET FORECAST
LOS ANGELES METRO AREA INDUSTRIAL OVERVIEW
M A R K E T O V E R V I E W 25
ASKING RENT AND VACANCY TRENDS
Vaca
ncy
Rate
09 10 11 12 13 14 15 16 17 18 19*
8%
6%
4%
2%
0%
16%
8%
0%
-8%
-16%
Y-O-Y Rent Growth
PRICE PER SQUARE FOOT TRENDS
Year
-ove
r-Ye
ar A
ppre
ciatio
n
08 09 10 11 12 13 14 15 16 17 18
24%
12%
0%
-12%
-24%
EMPLOYMENT VS. RETAIL SALES TRENDS
Retail Sales GrowthEmployment Growth
09 10 11 12 13 14 15 16 17 18 19*
Year
-ove
r-Ye
ar C
hang
e
10%
5%
0%
-5%
-10%
* Forecast Sources: CoStar Group, Inc.; Real Capital Analytics
INDUSTRIAL COMPLETIONS
AbsorptionCompletions
09 10 11 12 13 14 15 16 17 18 19*
Squa
re F
eet (
thou
sand
s)
15,000
10,000
5,000
0
-5,000
Vacancy
Year-overYear Rent Change
SUBMARKET TRENDS
EXCLUSIVELY LISTED BY:
D E R E K S T E P H E N SNational Office and Industrial Properties Group
(213)943-1857 [email protected]
License: CA 01941251
Z A C H A R Y Z A N E L L ONational Office and Industrial Properties Group
(213)943-1842 [email protected]
License: CA 02076813
Marcus & Millichap515 South Flower Street
Suite 500Los Angeles, CA 90071
L O S A N G E L E S , C A 9 0 0 6 1
13103 SOUTH BROADWAY