mixed-use fourplex - creop · 2019-06-05 · mixed-use fourplex contents exclusively marketed by:...
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Mixed-Use Fourplex
4025 Van Dyke AveSan Diego , CA 92105
OFFERING MEMORANDUM
Mixed-Use FourplexCONTENTS
Exclusively Marketed by:
Kevin HemstreetSenior Vice President/Principal619-309-9296License # BRE# [email protected]
We obtained the following information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or otherconditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent the current or future performance of the property. You and your tax and legal advisors should conduct yourown investigation of the property and transaction.
01 Executive Summary Investment Summary 5 Unit Mix Summary 6 Location Summary 7
02 Property Description Property Features 9 Aerial Map 10 Property Images 11
06 Rent Roll Rent Roll 18 Lease Expiration 19
07 Financial Analysis Income & Expense Analysis 21 Multiyear Cash Flow Assumptions 22 Cash Flow Analysis 23 Disposition Sensitivity Analysis 25
08 Demographics Demographics 27 Demographic Charts 28
The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from South Coast Commercial Inc.and it should not be made available to any other person or entity without the written consent of South Coast Commercial Inc.. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees thatrecipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property, please promptly return this offering memorandum to South CoastCommercial Inc.. This offering memorandum has been prepared to provide summary, unverified financial and physical information to prospective purchasers, and to establish only a preliminarylevel of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. South Coast Commercial Inc. has not made any investigation, and makes no warranty orrepresentation 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 andimprovements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvementsthereon, or 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 offering memorandum has been obtained from sources we believe reliable; however, South Coast Commercial Inc. has not verified, and will not verify, any of theinformation contained herein, nor has South Coast Commercial Inc. conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding theaccuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Prospective buyers shall be responsiblefor their costs and expenses of investigating the subject property.
Mixed-Use Fourplex Confidentiality and Disclaimer | 03
CONFIDENTIALITY AND DISCLAIMER:
PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONTACT SOUTH COAST COMMERCIAL INC. FOR MORE DETAILS.Copyright © 2019 CREOP, LLC. All Rights Reserved.
Mixed-U
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Executive Summary
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Investment Summary
Unit Mix Summary
Location Summary
Mixed-Use Fourplex Investment Summary | 05
OFFERING SUMMARYADDRESS 4025 Van Dyke Ave
San Diego CA 92105COUNTY San DiegoMARKET East San DiegoSUBMARKET City HeightsBUILDING SF 2,984LAND SF 7,003 SFYEAR BUILT 1960YEAR RENOVATED 2018APN 471-451-09-00OWNERSHIP TYPE Joint Tenancy
FINANCIAL SUMMARYOFFERING PRICE $960,000PRICE PSF $321.72NOI (CURRENT) $53,456CAP RATE (CURRENT) 5.57 %CAP RATE (PRO FORMA) 6.79 %GRM (CURRENT) 13.11GRM (PRO FORMA) 11.19
ASSUMABLE FINANCINGLOAN TYPE Fully AmortizedDOWN PAYMENT $240,000LOAN AMOUNT $720,000INTEREST RATE 5.00 %ANNUAL DEBT SERVICE $46,380LOAN TO VALUE 75 %AMORTIZATION PERIOD 30 Years
DEMOGRAPHICS 1 MILE 3 MILE 5 MILE2018 Population 65,153 266,438 661,9712018 Median HH Income $36,146 $50,662 $54,7262018 Average HH Income $52,819 $70,992 $78,301
We are pleased to present 4025 Van Dyke Ave. This fourplex has beencompletely remodeled (new plumbing, electrical, water heater, kitchen,cabinets, floors, fans, bathrooms, central heating). Close to manyrestaurants and stores in the heart of City Heights. Has 10 ParkingSpaces!! The front unit is a commercial unit that is leased by a phonerepair company. A completely turnkey solution that has fantastic rents inplace, amazing tenants, and a great return. 5.7% Cap Rate on actualswith real expenses!! The property is right off of the main street ofUniversity Ave, but the property is actually very quiet and peaceful.Property has been well managed by current owners, and the tenants areall easy to deal with.
Mixed-Use Fourplex Unit Mix Summary | 06
Actual MarketUnit Mix # Units Square Feet Current Rent Rent PSF Monthly Income Market Rent Market Rent
PSFMarket Income
3 bd / 1.5 ba 1 0 $1,800 $1,800 $2,000 $0 $2,0002 bd / 1 ba 1 0 $1,500 $1,500 $1,700 $0 $1,7002 bd / 1 ba 1 0 $1,300 $1,300 $1,700 $0 $1,700
Totals/Averages 3 0 $1,533 $4,600 $1,800 $5,400
Mixed-Use Fourplex Location Summary | 07
East San Diego, specifically the submarket of City Heights,is a diverse, working class community home to many greattenants. This is an up and coming market, with historicallylow vacancy rates, job growth, and newly renovatedbuildings swiping the streets.
The area of City Heights is known for it’s ethnically diverserestaurants on the main streets of University Ave, El CajonBlvd, and Fairmont Ave, which are within walking distanceof this multi-family home. With Manzanita Canyon less thana 10-minute bike ride away, this area is great for familieswith young kids, Lulu’s Montessori Bilingual Preschool andJoyner Elementary school are also within walking distance.Easy access to freeways, shops and restaurants, andschools; this updated multi-family property is an investmentyou cannot miss!
Regional Map
Locator Map
Mixed-U
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Property Description
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Property Features
Aerial Map
Parcel Map
Additional Maps
Property Images
Mixed-Use Fourplex Property Features | 09
GLOBALNUMBER OF UNITS 4BUILDING SF 2984LAND SF 7003# OF PARCELS 1YEAR BUILT 1960YEAR RENOVATED 2018LOCATION CLASS CBUILDING CLASS BTOPOGRAPHY FlatNUMBER OF BUILDINGS 2NUMBER OF STORIES 1PARKING RATIO 3:1
MULTI-FAMILY VITALSNUMBER OF PARKING SPACES 12POOL / JACUZZI NoFIRE PLACE IN UNIT NoNUMBER OF UNITS 3CURRENT OCCUPANCY 100HIGH-END FINISHES 3
COMMERCIAL VITALSNUMBER OF UNITS 1CURRENT OCCUPANCY 100LIGHTING Yes
CONSTRUCTIONFOUNDATION SlabFRAMING WoodEXTERIOR StuccoPARKING SURFACE ConcreteROOF Composite
Mixed-Use Fourplex Aerial Map | 10
Mixed-Use Fourplex Property Images | 11
Mixed-Use Fourplex Property Images | 12
Mixed-Use Fourplex Property Images | 13
Mixed-U
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Rent Comps
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Rent Comparables
Rent Comparables Map
Mixed-U
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On Market Comps
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On Market Comparables
On Market Comparables Charts
On Market Comparables Map
Mixed-U
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Sale Comps
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Sale Comparables
Sale Comparables Charts
Sale Comparables Map
Mixed-U
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Rent Roll
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Rent Roll Details
Lease Expiration Summary
Tenant Profile
Mixed-Use Fourplex Rent Roll | 18
COMMERCIALLease Term Rental Rates
Suite Tenant Name SquareFeet
% of NRA Lease Start Lease End Begin Date MonthlyBase Rent
MonthlyPSF
Annual BaseRent
AnnualPSF
Lease Type Options/Notes
Xi Chen 600 20.11% 01/01/00 CURRENT $1,500 $2.50 $18,000 $30.00 Month to monthTotals 600 $1,500 $18,000
Mixed-Use Fourplex Lease Expiration | 19
Residential Commercial
Mixed-U
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Financial Analysis
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Income & Expense
Multiyear Cash Flow Assumptions
Vacant Space/2nd Gen Leasing
Multiyear Cash Flow Projections
Disposition Sensitivity Analysis
Mixed-Use Fourplex Income & Expense Analysis | 21
INCOME CURRENT PRO FORMA
Multi-Family Revenue $55,200 $64,800
Commercial Revenue $18,000 $21,000
Gross Potential Income $73,200 $85,800
Vacancy & Collection Loss $2,196 $2,574
Effective Gross Income $71,004 $83,226
Less: Expenses $17,548 $18,048
Net Operating Income $53,456 $65,178
Annual Debt Service $46,380 $46,380
Debt Coverage Ratio 1.15 1.41
Cash Flow After Debt Service $7,076 $18,798
Principal Reduction $10,380 $10,380
Total Return 7.3 % $17,457 12.2 % $29,179
EXPENSES CURRENT PRO FORMA
Real Estate Taxes $10,848 $10,848
Insurance $1,000 $1,000
Common Area Maintenance (CAM) $1,000 $1,000
Management Fee $3,700 $4,200
Repairs & Maintenance $500 $500
Landscaping $500 $500
Total Operating Expense $17,548 $18,048
Expense / SF $5.88 $6.04
% of EGI 24.71 % 21.69 %
REVENUE ALLOCATION
DISTRIBUTION OF EXPENSES
Mixed-Use Fourplex Multiyear Cash Flow Assumptions | 22
GLOBALSale Price $960,000Analysis Period 10 year(s)Commencement Date May. 1, 2019Millage Rate 1.06000 %Exit CAP Rate 7.00 %
ASSUMABLE FINANCINGLoan Type Fully AmortizedDown Payment $240,000Loan Amount $720,000Interest Rate 5.00 %Annual Debt Service $46,380Loan to Value 75 %Amortization Period 30 Years
Mixed-Use Fourplex Cash Flow Analysis | 23
CASH FLOWCalendar Year CURRENT Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10Gross Potential RevenueMulti-Family Revenue $55,200 $64,800 $64,800 $64,800 $64,800 $64,800 $64,800 $64,800 $64,800 $64,800Commercial Revenue $18,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000Gross Potential Income $73,200 $85,800 $85,800 $85,800 $85,800 $85,800 $85,800 $85,800 $85,800 $85,800Vacancy & Collection Loss $2,196 $2,574 $2,574 $2,574 $2,574 $2,574 $2,574 $2,574 $2,574 $2,574Effective Gross Income $71,004 $83,226 $83,226 $83,226 $83,226 $83,226 $83,226 $83,226 $83,226 $83,226Operating ExpensesReal Estate Taxes $10,848 $10,848 $10,848 $10,848 $10,848 $10,848 $10,848 $10,848 $10,848 $10,848Insurance $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000Common Area Maintenance (CAM) $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000Management Fee $3,700 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200Repairs & Maintenance $500 $500 $500 $500 $500 $500 $500 $500 $500 $500Landscaping $500 $500 $500 $500 $500 $500 $500 $500 $500 $500Total Operating Expense $17,548 $18,048 $18,048 $18,048 $18,048 $18,048 $18,048 $18,048 $18,048 $18,048Net Operating Income $53,456 $65,178 $65,178 $65,178 $65,178 $65,178 $65,178 $65,178 $65,178 $65,178Annual Debt Service $46,380 $46,380 $46,380 $46,380 $46,380 $46,380 $46,380 $46,380 $46,380 $46,380Cash Flow $7,076 $18,798 $18,798 $18,798 $18,798 $18,798 $18,798 $18,798 $18,798 $18,798
Effective Gross Income vs Operating Expenses Cash Flow
Mixed-Use Fourplex Cash Flow Analysis | 24
Calendar Year CURRENT Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10Financial MetricsCash on Cash Return b/t 2.95 % 7.83 % 7.83 % 7.83 % 7.83 % 7.83 % 7.83 % 7.83 % 7.83 % 7.83 %CAP Rate 5.57 % 6.79 % 6.79 % 6.79 % 6.79 % 6.79 % 6.79 % 6.79 % 6.79 % 6.79 %Debt Coverage Ratio 1.15 1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41Operating Expense Ratio 24.71 % 21.68 % 21.68 % 21.68 % 21.68 % 21.68 % 21.68 % 21.68 % 21.68 % 21.68 %Gross Multiplier (GRM) 13.11 11.19 11.19 11.19 11.19 11.19 11.19 11.19 11.19 11.19Loan to Value 75.02 % 73.91 % 72.75 % 71.54 % 70.26 % 68.92 % 67.50 % 66.02 % 64.46 % 62.81 %Breakeven Ratio 90.03 % 77.41 % 77.41 % 77.41 % 77.41 % 77.41 % 77.41 % 77.41 % 77.41 % 77.41 %Price / SF $321.72 $321.72 $321.72 $321.72 $321.72 $321.72 $321.72 $321.72 $321.72 $321.72Expense / SF $5.88 $6.04 $6.04 $6.04 $6.04 $6.04 $6.04 $6.04 $6.04 $6.04Income / SF $23.79 $27.89 $27.89 $27.89 $27.89 $27.89 $27.89 $27.89 $27.89 $27.89
Mixed-Use Fourplex Disposition Sensitivity Analysis | 25
5 YEAR SENSITIVITY ANALYSISEXIT CAP RATE PROJECTED SALES
PRICESALES PRICE/UNIT PROCEEDS AFTER
LOAN PAYOFFIRR
6.00% $1,086,300 $271,575 $416,406 17.01%6.25% $1,042,848 $260,712 $372,954 14.82%6.50% $1,002,738 $250,685 $332,844 12.63%6.75% $965,600 $241,400 $295,706 10.42%7.00% $931,114 $232,779 $261,220 8.20%7.25% $899,007 $224,752 $229,112 5.93%7.50% $869,040 $217,260 $199,146 3.62%7.75% $841,006 $210,252 $171,112 1.23%8.00% $814,725 $203,681 $144,831 -1.25%
10 YEAR SENSITIVITY ANALYSISEXIT CAP RATE PROJECTED SALES
PRICESALES PRICE/UNIT PROCEEDS AFTER
LOAN PAYOFFIRR
6.00% $1,086,300 $271,575 $463,024 12.28%6.25% $1,042,848 $260,712 $419,572 11.45%6.50% $1,002,738 $250,685 $379,463 10.63%6.75% $965,600 $241,400 $342,324 9.81%7.00% $931,114 $232,779 $307,838 9.00%7.25% $899,007 $224,752 $275,731 8.17%7.50% $869,040 $217,260 $245,764 7.35%7.75% $841,006 $210,252 $217,731 6.51%8.00% $814,725 $203,681 $191,449 5.65%
Mixed-U
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Demographics
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Demographic Details
Demographic Charts
Mixed-Use Fourplex Demographics | 27
POPULATION 1 MILE 3 MILE 5 MILE
2000 Population 66,583 256,030 600,182
2010 Population 62,276 252,836 616,101
2018 Population 65,153 266,438 661,971
2023 Population 67,266 276,970 695,127
2018 African American 7,035 29,212 70,379
2018 American Indian 510 2,054 5,070
2018 Asian 10,558 32,642 77,658
2018 Hispanic 38,168 108,933 265,239
2018 White 22,587 132,434 339,362
2018 Other Race 21,139 53,899 127,602
2018 Multiracial 3,118 15,118 38,304
2018-2023: Population: Growth Rate 3.20 % 3.90 % 4.90 %
2018 HOUSEHOLD INCOME 1 MILE 3 MILE 5 MILE
less than $15,000 3,918 14,704 33,128
$15,000-$24,999 3,449 12,076 25,791
$25,000-$34,999 2,717 10,414 22,974
$35,000-$49,999 3,331 14,601 32,610
$50,000-$74,999 3,363 18,517 42,857
$75,000-$99,999 1,621 12,460 30,555
$100,000-$149,999 1,425 12,804 34,640
$150,000-$199,999 503 4,637 13,815
$200,000 or greater 549 4,844 14,617
Median HH Income $36,146 $50,662 $54,726
Average HH Income $52,819 $70,992 $78,301
HOUSEHOLDS 1 MILE 3 MILE 5 MILE
2000 Total Housing 21,325 102,776 228,436
2010 Total Households 19,908 99,909 232,006
2018 Total Households 20,876 105,057 250,989
2023 Total Households 21,532 109,203 265,261
2018 Average Household Size 3.10 2.49 2.54
2000 Owner Occupied Housing 3,921 32,698 84,553
2000 Renter Occupied Housing 16,527 66,353 135,126
2018 Owner Occupied Housing 4,082 33,225 91,118
2018 Renter Occupied Housing 16,794 71,832 159,871
2018 Vacant Housing 1,358 6,102 17,530
2018 Total Housing 22,234 111,159 268,519
2023 Owner Occupied Housing 4,750 37,354 101,928
2023 Renter Occupied Housing 16,783 71,849 163,334
2023 Vacant Housing 1,414 6,179 17,417
2023 Total Housing 22,946 115,382 282,678
2018-2023: Households: Growth Rate 3.10 % 3.90 % 5.55 %
Source: esri
Mixed-Use Fourplex Demographic Charts | 28
1 Mile Radius 3 Mile Radius 5 Mile Radius
2018 Household Income
1 Mile Radius 3 Mile Radius 5 Mile Radius
2018 Population by Race
Mixed-Use Fourplex Demographic Charts | 29
2018 Household Occupancy - 1 Mile Radius
Average Income Median Income
2018 Household Income Average and Median
Mixed-Use Fourplex
Exclusively Marketed by:
Kevin HemstreetSenior Vice President/Principal619-309-9296License # BRE# [email protected]
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