OFFERING MEMORANDUM
G R O U P
BRANDON MICHAELS
MelroseMelroseAVENUEAVENUE
67216721
BRANDON MICHAELSSenior Managing Director of InvestmentsSenior Director, National Retail GroupTel: (818) 212-2794Fax: (818) [email protected]: CA #01434685www.BrandonMichaelsGroup.com
PRESENTED BY:
6721 MELROSE AVENUE
AREA OVERVIEW
COMPARABLES ANALYSIS
FINANCIAL ANALYSIS
G R O U P
BRANDON MICHAELS
OFFICES NATIONWIDEwww.marcusmillichap.com
NON-ENDORSEMENT AND DISCLAIMER NOTICE
NON-ENDORSEMENTSMarcus & 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 & Milli-chap, 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 YOUR MARCUS & MILLICHAP AGENT FOR MORE DE-TAILS.
DISCLAIMER
THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN AP-PRAISAL.
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express 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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap. All rights reserved.
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Rare opportunity to purchase in a strong rental market. Significant amount of movement and turnover in the immediate marketplace, creating an opportunity for new construction to enter the market and position the submarket for the future. Upon completion of surrounding developments and with continuing improvements to the immediate area, the rental market will experience significant growth and offer outstanding returns for long term investors.
Median age: 39
Average household income within a 1 mile radius: $97,211
Population within a 5 mile radius: 1,054,472
Melrose Avenue and it's surrounding neighborhoods are at the cultural and geographical heart of the Los Angeles region, surrounded by must-see hotspots in every direction.
• 1.2 million visitors came to the area last year
• $750 million dollars generated by tourism to our local economy last year
• 16,599 jobs supported by tourism in the area
DEVELOPMENT ON MELROSE AVENUE
DEMOGRAPHICS
AFFLUENT NEIGHBORHOOD
GLOBAL TOURISM DESTINATION
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From the Melrose avenue to the Sunset Strip, the area never seems to sleep. There are clubs to be seen, live music to be heard, and coffee shops to work from. Fuel up with breakfast, brunch, lunch and dinner at a plethora of celebrity-frequented restaurants so that you can explore the lively neighborhood until the wee hours of the morning.
Scores of cutting-edge labels can be found along Melrose Avenue, from avant-garde brands to casually luxe clothing makers. Melrose Avenue is renowned throughout the world as one of Los Angeles’ most walkable and unique shopping destinations.
You can tuck your car away in a hotel garage and stroll to great restaurants, cafes, bars, nightclubs and shopping. Within the neighborhood's 1.6 square miles, you can people-watch on the Sunset Strip, sightsee on Santa Monica Boulevard, stop at a great cafe or restaurant on Melrose Ave. and shop at the gorgeous boutiques of the West Hollywood Design District. It’s easy to sightsee… all on foot!
DINING
SHOPPING
WEATHER
GETTING AROUND
Southern California’s persistently pleasant weather means it’s practically always the best time to visit Los Angeles. It’s sunny almost 300 days a year and the average high temperature in many parts of L.A. fluctuates less than 10 degrees through the year.
WHY BUYON MELROSE
AVENUE?
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LRO
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Marcus & Millichap has been selected to exclusively market for sale 6721 Melrose Avenue- a 3,046 square foot office or retail building located on the signalized corner of Melrose Avenue and Mansfield Avenue in the highly sought-after Melrose district of Los Angeles, CA. Situated on Melrose Avenue just east of North La Brea and west of North Highland Avenue , 6721 Melrose is ideally located in one of Southern California’s busiest shopping thoroughfares. The property offers excellent visibility with 86 Feet of frontage along Melrose Avenue on a bustling corner lot with parking in the rear. There is a large 14 x 48 single sided billboard on the property that is currently on a month to month lease, providing the potential upside in stabilizing the lease term or the ability to remove from the property if the ultimate plan is to re-develop the property.
As a result of its prime location and significant growth in the immediate area, the property is ideal for a retail, office, or creative office use. The subject property is currently vacant, allowing the maximum in flexibility of potential uses. The property is ideally situated on 7,091 square feet of land, offering the potential to re-develop the property and utilize the current C4 zoning. The property is ideally located in a Tier 1 Transit Oriented Community. There are currently 14 parking spaces in the rear of the property, and the parking can potentially be re-stripped to create additional parking. 6721 Melrose is ideally located in an enterprise zone, allowing for a multitude of potential uses including restaurant and medical.
The Melrose Shopping District and it's surrounding neighborhoods are at the cultural and geographical heart of the Los Angeles region, surrounded by must-see hotspots in every direction. The neighborhood is among the top destinations in the world, and this irreplaceable location benefits from high daily traffic counts north of 50,000 cars per day at the corner of Melrose Avenue and N Highland Avenue.
A RARE OPPORTUNITY TO ACQUIRE A MELROSE AVENUE CREATIVE OFFICE/RETAIL BUILDING WITH DEVELOPMENT POTENTIAL IN THE HIGH-PROFILE MELROSE DISTRICT
EXECUTIVE SUMMARY
2,456 1.62,456 Businesses within a
1 square mile of 6721 Melrose Avenue1.6 square miles of walkable hotspots, restaurants, nightlife, and shopping in
West Hollywood
6721 Melrose Avenue scores an 91/100 on Walkscore.com
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MelroseMelroseAVENUEAVENUE
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HOLLYWOODDOWNTOWN
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Property Address 6721 Melrose AvenueLos Angeles, CA 90038
Price $3,400,000
Proforma CAP Rate 5.18%
Price/SF (Building) $1,116
Price/SF (LAND) $479
Building SF 3,046
Land SF 6,970
Property Type Creative Office
Potential Use Office/Retail/Restaurant/Medical
Year Built 1953
APN's 5524-013-022
Zoning C4-1X4
Transit Oriented Community Tier 1
Type of Ownership Fee simple
Occupancy Vacant
Parking 14 Surface Spaces
Billboard 14' x 48' Single Sided
PROPERTY OVERVIEW
CORNER
SIDE
REAR
MelroseMelroseAVENUEAVENUE
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FAIRFAX
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INVESTMENT HIGHLIGHTSIRREPLACEABLE MELROSE AVENUE LOCATION – Ideally located along a price
stretch of Melrose Avenue between North La Brea and North Highland on the corner
of Melrose Avenue and Mansfield Avenue
POTENTIAL DEVELOPMENT OPPORTUNITY – C4-1XL zoning within a Tier 1 Transit
Oriented Community allows the potential for future development. The property
directly adjacent to 6721 Melrose is currently for sale at $2,100,000. In addition, two
new development projects are currently underway in the immediate area
MULTITUDE OF POTENTIAL USES – Property is currently creative office, complete
with exposed wood ceilings, concrete flooring, and inviting exterior space. Ideally
located within an enterprise zone, there is the potential for additional uses, including
retail, restaurant, or medical
WALKABILITY - 6721 Melrose Avenue has a score of 91/100 for walkability. Iconic
retailers and trendy/hip boutiques and restaurants populate Melrose Avenue and it is
a popular haven for the rich and famous
HIGH DAILY TRAFFIC COUNTS – Ideally located on the signalized corner of Melrose
Avenue and Mansfield Avenue, just 1 block west of the signalized corner of Melrose
Avenue and N Highland Avenue, which experiences over 50,000 vehicles per day
IDEAL OWNER USER OPPORTUNITY – Property will be delivered vacant, creating
an ideal opportunity for an owner-user Buyer to occupy the property for their own
business use
MELROSE RESTAURANT ROW – The immediate area is home to multiple high-end
restaurants, including Pizzarie Mozza, Osteria Mozza, Chi Spaca, Trois Mec, Petit Trois
and multiple others within close proximity
WEST HOLLYWOODFAIRFAXBEVERLY HILLS
MelroseMelroseAVENUEAVENUE
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ADDRESS6721 Melrose Avenue, Los Angeles, CA 90038
SITEThe subject property is located on the norheast signalized corner of Melrose Avenue and Mansfield Avenue
SQUARE FOOTAGES
FRONTAGE AND ACCESS86 feet of frontage on Melrose Avenue and 102 feet along Mansfield Avenue
ZONING6721 Melrose Avenue is located within zoning of C4
YEAR BUILTThe subject property was built in 1953
PROPERTY SUMMARY
PLAT MAP
The building square footage is 3,046 square feet, located on a lot size of 6,970 square feet
PLAT MAP
MelroseMelroseAVENUEAVENUE
67216721
TRAFFIC COUNTSIntersection of Melrose Avenue and N Highland Avenue:53,183 vehicles per day
PARKING14 Surface Spaces are available; Ratio of 4.60/1,000 SF
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AREA OVERVIEW
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MELROSE AVENUEMelrose Avenue is renowned throughout the world as one of Los Angeles’ most walkable and unique shopping, dining and entertainment destinations. Downtown Melrose encompasses the 22 blocks along Melrose Avenue that stretch from Fairfax to Highland. More than 300 alternative and independent stores offer a wide array of merchandise found nowhere else in the city.
LOCATIONMelrose Shopping District is bounded by Beverly Hills and West Hollywood on the west, Greater Wilshire to the south, and Hollywood to the north and east.
CLIMATELos Angeles has a Subtropical-semi-arid climate with year-round warm weather. The record high temperature of 111 °F was recorded September 26, 1963, while the record low of 24 °F was recorded on January 4, 1949. Snow is rare in Los Angeles, with the last accumulation occurring in 1949. Rainfall is sparse (only 13 inches annually), and falls mainly during winter months.
ACCOMODATIONSMelrose and surrounding neighborhoods include world-renowned hotels such as the Chateau Marmont, SLS Hotel, Sunset Marquis, Sunset Tower Hotel, Sofitel LA at Beverly Hills and Mondrian Los Angeles.
DININGFrom the Melrose Avenue to the Sunset Strip, the area never seems to sleep. There are clubs to be seen, live music to be heard, and coffee shops to work from. Fuel up with breakfast, brunch, lunch and dinner at a plethora of celebrity-frequented restaurants so that you can explore the lively neighborhood until the wee hours of the morning.
SHOPPINGMelrose Avenue is one of L.A.’s most famous streets, featuring a myriad of shopping. Melrose runs north of Beverly Boulevard and south of Santa Monica Boulevard. Along its "west end," Melrose Avenue is all about strolling and shopping, so bring dough and plenty of it. The street begins at Santa Monica Boulevard where the cities of Beverly Hills and West Hollywood meet, otherwise known as the intersection of posh and funky.
SUNSET STRIPFrom the heights of swank hotel rooftops like the Mondrian’s SkyBar and the Tower Bar at Sunset Tower Hotel, to the glam-grunge of rock clubs like The Viper Room and Whisky a Go Go, there’s a setting to suit your style and mood. In addition to clubs with music ranging from indie singer/songwriters to major headliners, there are iconic comedy clubs such as The Laugh Factory and the Comedy Store. The Sunset Strip isn’t just rock and roll. Spend the afternoon shopping at Sunset Plaza, which contains more than 20 stores, like Armani Exchange and H&M.
ROBERTSON BOULEVARDRobertson Boulevard has become a haven for celebrities and paparazzi. This is partially due to a large influx of unique boutiques and designer clothing & jewelry stores such as Agnes B, Curve, Lisa Kline, Kitson Boutique, Williams Sonoma, Armani Exchange, Michael Kors, Ralph Lauren, Ted Baker, M·A·C, Chanel, Gypsy05, Intermix, Tory Burch, Max Azria, Beach Bunny Swimwear, and Erica Courtney, which is a mecca for many celebrity shoppers. In addition, several popular celebrity-infused eateries are located on Robertson Boulevard, such as The Ivy.
NEARBY HOT SPOTS
TOP ATTRACTIONS
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NEW DEVELOPMENTS7000 MELROSE - MELROSE AVENUE AND LA BREA AVENUE
On the southwest corner of La Brea and Melrose the site is currently occupied by a building originally constructed in the 1920’s. This building, once a remarkable Spanish revival building had been remodeled beyond recognition. The southeastern half of the block is now vacant, and used primarily for parking. The proposed plan is intended to combine both sites and to provide for 32 units of live work lofts, some affordable, over 10,000 sf of new commercial space. Both buildings are to be integrated into the total design of the block. Parking is to be provided for the entire Tthe project has occupied roof decks which are partially covered with solar panels which provide shade and privacy.
700 HIGHLAND - HIGHLAND AVENUE AND MELROSE AVENUE
A gas station at Melrose and Highland Avenues has been demolished, clearing the way for the construction of a new apartment building on the corner property. The project site will yield a four story building featuring 19 apartments over 3 ground floor commercial units and its required parking. The upper levels are live work residential units who share a common open space with a swimming pool. The façade of the upper levels has been designed with an all glass skin imprinted with a supergraphic. The supergraphic frit provides for the graphic visibility from the outside while providing for both increased privacy and shade to the interior.
CURRENT MIXED-USE DEVELOPMENTS IN THE IMMEDIATE AREA
MelroseMelroseAVENUEAVENUE
67216721
700 HIGHLAND
SOUTHEAST CORNER OF HIGHLAND AVE AND MELROSE AVE
7000 MELROSE
SOUTHEAST CORNER OF LA BREA AVE AND MELROSE AVE
7000 MELROSE
SOUTHWEST CORNER OF LA BREA AVE AND MELROSE AVE
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$97,211Average HH income within 1-m radius
$65,281Median HH income within 1-m radius
538,155Daytime Population within 5-m radius
95,447Owner Occupied Households
within 5-m radius
326,757Renter Occupied Households
within 5-m radius
1,031,472Population within a 5-m radius
Total Population of Mid-Wilshire. The median age is 39.
MALE
High School Associates Degree Bachelor’s Degree Grad Degree
FEMALE
DEMOGRAPHICS
36,698
42%58%
24.6%14.7% 27.6% 13.9%
EDUCATION
BUSINESSES
Melrose and it's surrounding neighborhoods are home to innovative industries and a magnet for highly skilled professionals. Companies ranging from retail, tourism and nightlife, restaurants, entertainment and media, as well as arts and design are drawn to the area's creative workforce, as well as its high quality of life.
• Metro• IAC/CityGrid Media• City of West Hollywood
• Sunset Marquis• London West Hollywood• Standard Hotel
• Mondrian Hotel• Andaz West Hollywood• Saddle Ranch Chop House
TOP EMPLOYERS
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FINANCIAL ANALYSIS
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OPERATING DATA PRO FORMA
Scheduled Lease Income $176,208
NNN Charges $59,167
Effective Gross Income $235,375
Expenses $59,167
Net Operating Income $176,208
TENANT SF BUILDING % CURRENT RENT PROFORMA RENT PROFORMA RENT /SF LEASE TYPE LEASE TERMVacant 3,046 100% - $12,184.00 $4.00 NNN -
Billboard* - - $2,000.00 $2,500.00 - - Month to MonthTOTAL 3,046 100% $2,000.00 $14,684.00 $4.00
RENT ROLL
PRO-FORMA OPERATING DATAEXPENSE BREAKDOWN* PER YEAR PER SFTaxes @ 1.20% $40,800 $13.39Insurance $1,066 0.35Utilities $5,635 1.85Trash $487 0.16Janitorial $2,285 0.75Repairs & Maintenance $3,046 1.00Management $5,848 1.91TOTAL $59,167 $19.42/$1.62
*Projected Expenses
FINANCIAL ANALYSIS
PRICING INFOPrice $3,400,000Price/SF (Building) $1,116Price/SF (Land) $479Proforma CAP Rate 5.18%
69%
10%
9%
5%4% 2% TRASH
1%
*Billboard is currently month to month. Lease can potentially be renewed at a higher rate.
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COMPARABLES28 29
# ADDRESS SALE PRICE CAP RATE PRICE/SF BLDG SF LAND SF CLOSE OF ESCROW ZONING
1 1051 N Highland AveLos Angeles, CA 90038 $3,029,000 - $1,270.02 2,385 18,726 1/4/2017 LAMR1
2 819 N La Brea AveLos Angeles, CA 90038 $4,100,000 4.18% $802.98 5,106 10,454 6/20/2018 C4-IVL
3 843 N La Brea AveLos Angeles, CA 90038 $3,500,000 - $1,129.03 3,100 10,454 1/25/2018 C4-IVL
4 6621 Melrose Loft, Unit 2Los Angeles, CA 90038 $1,850,000 - $880.95 25,000 6,534 4/30/2018 LAC4
5 6700 Melrose AveLos Angeles, CA 90038 $4,200,000 - $1,223.42 3,433 8,712 FOR SALE LAC2
6 911 N Orange DrLos Angeles, CA 90038 $15,500,000 - $911.76 17,000 29,621 12/20/2017 LAMR1
AVERAGE $5,363,167 $1,036.36 9,337 14,084
SALE COMPARABLES# ADDRESS RENT/SF/YEAR RENT/SF/MONTH LEASE TYPE SPACE AVAILABLE
1 755 N Highland AveLos Angeles, CA 90038 $42.00 $3.50 NNN 4,599
2 941-945 N Highland AveLos Angeles, CA 90038 $39.00 $3.25 NNN 15,000
3 604-614 N La Brea AveLos Angeles, CA 90036 $48.00 $4.00 NNN 1,200
4 629-633 N La Brea AveLos Angeles, CA 90036 $40.20 $3.35 MG 9,161
5 712-716 N La Brea AveLos Angeles, CA 90038 $42.00 $3.50 NNN 11,000
6 6920 Melrose AveLos Angeles, CA 90038 $54.00 $4.50 NNN 2,600
7 7126 Melrose AveLos Angeles, CA 90046 $27.00 $2.25 NNN 4,800
8 7164-7168 Melrose AveLos Angeles, CA 90046 $41.40 $3.45 MG 475
9 7257-7257 1/2 Melrose AveLos Angeles, CA 90046 $60.00 $5.00 NNN 1,200
10 1009-1023 N Orange DrLos Angeles, CA 90038 $46.20 $3.85 MG 4,340
11 6910-6912 Santa Monica BlvdLos Angeles, CA 90038 $39.00 $3.25 NNN 6,666
12 1040 N Sycamore AveHollywood, CA 90038 $54.00 $4.50 NNN 4,309
AVERAGE $44.40 $3.70 5,446
LEASE COMPARABLES
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G R O U P
BRANDON MICHAELS
MelroseMelroseAVENUEAVENUE
67216721
BRANDON MICHAELSSenior Managing Director of InvestmentsSenior Director, National Retail GroupTel: (818) 212-2794Fax: (818) [email protected]: CA #01434685www.BrandonMichaelsGroup.com