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BEVERLY SQUARE 9900 S. SANTA MONICA BLVD. WINTER 2014 Adam Monaghan Arfakhashad Munaim Vicente Romero Carla Salehian


BEVERLY SQUARE: 9900 S. SANTA MONICA BLVD. BEVERLY HILLS

due diligence report

Winter 2014 UP M272 Adam Monaghan Arfakhashad Munaim Vicente Romero Carla Salehian


TABLE OF CONTENTS

1. INTRODUCTION................................................................01 2. LOCATION AND SITE ATTRIBUTES......................................06 3. MARKET CONDITIONS......................................................15 4. DEVELOPMENT PROGRAM AND DESIGN..........................26 5. FINANCIAL FEASIBILITY.....................................................35 6. CHALLENGES AND OPPORTUNITIES..................................46 7. CARTOGRAPHY.................................................................49


CHAPTER 1: INTRODUCTION


PART 1: DEVELOPMENT PROGRAM Beverly Square is a new neighborhoodserving specialty retail center proposed for development at 9900 South Santa Monica Boulevard in Beverly Hills, California. The project will offer 61,868 square feet of LEED-Silver certified, finely crafted gross buildable area (GBA), including over 10,000 square feet of thoughtfully manicured open space. Beverly Square has been designed as an attractive specialty retail destination for upscale neighborhood residents and high wage earning professionals employed in the immediate vicinity. Practicing the subtle art of place making, our design team has created a twostory urban infill retail center that evokes hints of Figure 1.2: Project Site Existing Conditions the European Revival architectural style exhibited Source: Authors throughout the City of Beverly Hills. Figure 1.1 presents a rendering of the concept design.

Figure 1.1: Concept Design Source: Authors

1. INTRODUCTION

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Located on a corner lot of about 36,000 Cycle, and Burke-Williams day spa; square feet, with a floor-area-ratio (FAR) of • Home goods providers Williams-Sonoma 1.72, the street-facing shops at Beverly Square and Between the Sheets; offer multiple points of entrance and egress, • Small-scale cafes such as Starbucks; creating a texture of permeability for pedestrians • Retailers and service providers walking alongside the development. Two levels addressing the needs of local residents of subterranean parking, including ample space and professionals: dry cleaning and for bicycles, exceed the City’s requirements, thus tailoring; stationary; florist; and a pet providing an additional community benefit of 62 grooming boutique, among others. spaces to the surrounding businesses. Beverly Square offers a total net leasable area (NLA) of In addition to serving as a market-driven 49,728 square feet for chic retailers selling high response to local retail conditions, the proposed end products. Figure 1.3 illustrates the proposed Beverly Square development project strives to building uses and square feet of the project. fulfill the vision set forth in the City of Beverly Hills General Plan. It is a pedestrian-scale development that seeks to activate the public realm, helping the BUILDING USES TOTAL SQUARE FEET City Grow Smarter. The design concept preserves Commercial - 18 units 49,728 (NLA) (2 Levels) the architectural continuity found throughout Parking - 142 spaces the city to celebrate its rich cultural heritage of 72,000 (2 Levels Underground) Sustaining Great Places. The project supports BUILDING USES SQUARE FEET the City’s effort TOTAL to Reduce its Carbon Footprint by Commercial 18 units Figure 1.3: Project Site Existing Conditions 49,728 (NLA) Figure XX: Building Uses and Total Square Feet (2 Levels)achieving LEED-Silver status. Beverly Square will Source: Authors Parking - be 142 spaces a bustling specialty shopping center that will 72,000 (2 Levels Underground) create jobs and help the City Maintain a Resilient Members of the City of Beverly Hills Economy. Working in concert with the local Figure XX: Building Uses and Total Square Feet Planning Division have stressed the importance chamber of commerce, municipal officials and of utilizing the parcel at 9900 South Santa Monica area residents, the development team for Beverly Blvd to create a unique commercial experience Square understands that incorporating the longthat elicits a “Main Street” feeling from residents, term goals set forth by the City of Beverly Hills is business owners, and visitors in the area. After paramount to success. grow carefully researching the local market conditions smarter and population demographics, our development grow smarter team has designed Beverly Square to meet the retail demands of a wealthy, middle age, highly educated population of residents and sustain professionals. Potential retailers comprising sustain GENERAL the maintain a GENERAL greatmaintain a great resilient PLAN resilient PLAN tenant base of Beverly Square include: places/ places/economy VISION economy VISION heritage heritage • Purveyors of fine clothing Janie and Jack, Ted Baker, and Lululemon Athletics; • Specialty food stores Dean & Deluca, and reduce Sunlife Organics; carbon • Personal care facilities such as Pure footprint Barre, Yoga Works, Bodyrok Sculpt and 1. INTRODUCTION

reduce carbon footprint

Figure 1.4: Beverly Square Project Components in Accordance with the City’s General Plan

03 Design & C Figure XX: General Plan Vision Components in Accordance with Beverly Squareʼs


PART 2: MARKET, ENTITLEMENTS, & RETURNS Market Strengths

Entitlement Prospects

The socioeconomic and consumer segment characteristics of the population in the one-half mile vicinity surrounding the project site indicate a wealthy, middle age, highly educated population with disposable income that they spend on specialty goods. The higher relative population density of the area (9,883 persons per square mile, compared with the County average of 5,975) creates conditions suitable for a walkable and bicycle friendly commercial development. High household income and discretionary spending on luxury goods indicates the target population’s preference for a high-end, carefully crafted shopping experience.

In order to ensure a streamlined progression through the City’s entitlement process, the development team has designed Beverly Square to conform completely to the City of Beverly Hills municipal code. This includes the parameters considered for any development in the Commercial (C3-A) Zone (Title 10, Chapter 3, Article 17) as well as a careful study of the requirements for development in an area of transition between commercial and residential uses (Title 10, Chapter 3, Article 19.5). Figure 2.6 on page 14 provides a detailed breakdown of each step in the entitlement process, including a timetable. The estimated timeframe for project approval is subject to additional review of any Including residents, businesses, and high potential challenges posed by local businesses wage earning professionals working nearby, or residents that may occur as a result of the we estimate retail demand in the one-half mile traffic study, environmental review (although trade area equals $160.4 million per year. As we anticipate a negative declaration during the noted above, Beverly Square will provide 49,728 CEQA review), or building and safety review. square feet of neighborhood retail NLA. Based on information we have regarding local area projects Based on conversations with members of currently in the planning phase, we estimate that the City Planning Division, we believe that the the market will add an additional 173,319 square project conforms to the correctly zoned uses for feet of the same product coming on line at the the site. If it conforms to the City of Beverly Hills same time. As such, we estimate Beverly Square’s Planning Commission’s vision for the economy capture to be 28.7 percent of the new market, or and built environment of the local area, we are about $46 million of the total area retail demand. confident that Beverly Square will obtain all Based on sales figures from “Dollars and cents of necessary entitlements within two years. shopping centers / the SCORE,” we estimate that Beverly Square will generate $45.3 million in sales per year, which falls within the project’s expected market capture of total area demand.

1. INTRODUCTION

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Financial Returns The development team conducted a detailed financial feasibility assessment, which draws from various real estate market reports and economic data to determine that the Beverly Square project is low risk, high feasibility investment opportunity compared to current market return thresholds. The total development cost (TDC) for the project equals $44,619,362. The total value upon completion is $52,061,840, which generates $7,442,477 in equity value. The leveraged return on equity comes to 10.20 percent, and the unleveraged return on TDC equals 7.35 percent. The one-time leveraged profit at sale over equity is 69.05 percent, and the one-time unleveraged gross margin on TDC is 16.68 percent. Over a Figure 1.5: Financial Analysis “Snap Shot� ten-year period, the year-on-year internal rate of Source: Authors return of 20.92 percent on equity is an investment opportunity that cannot be matched in money markets. Even after conducting a series of financial stress tests, including manipulating cap rates, construction costs, and the loan-to-value ratio (LVR), the project proved to be resilient. The relative strength of the Beverly Hills commercial retail market allows this project to obtain favorable returns using rather conservative estimates for the LVR (65 percent) and cap rate (6.30 percent). Even when these numbers are adjusted, the project continues to fare well due to the premium rent per square foot it is able to command while keeping operating costs to a minimum.

1. INTRODUCTION

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CHAPTER 2: LOCATION AND SITE ATTRIBUTES


PART 1: NEIGHBORHOOD ANALYSIS This section of the report closely examines The site is also served by a variety of transit the existing conditions for the proposed Beverly connections, including three Metro Rapid Bus Square commercial retail development located in Services: the southwestern corner of the City of Beverly Hills, CA (See Maps 1, 2 and 3, Chapter 7). Since the • 704 Metro Rapid: Downtown Los Angeles once-famous Friar’s Club, located on the corner – Santa Monica via Santa Monica Blvd. of South Santa Monica and Charleville Blvd., • 720 Metro Rapid: Santa Monica – was demolished in 2011, the site has existed as Commerce via Wilshire Blvd. & Whittier a vacant parcel. Nevertheless, neighborhood Blvd. and site-specific analysis demonstrate that the • 728 Metro Rapid: Downtown Los Angeles location gleams with potential. – Century City via West Olympic Blvd. Beverly Hills is considered by most real estate brokers to be one of the most exclusive and desirable locations throughout the entire county of Los Angeles. Performing a broad analysis of existing neighborhood conditions revealed how desirable this particular location is with respect to access to transit and area amenities.

Transit Access The proposed development site is surrounded by a variety of transportation options. First, in terms of car access, the site is located within a six mile radius of several of LA’s busiest freeways and corridors including the I-10 to the south, California State Route 2 (North Santa Monica Blvd.) to its immediate north, and the I-405 to the west. Locally, the site is served by secondary road South Santa Monica Blvd., providing immediate access from the primary road in the area, North Santa Monica Blvd. Both are designated as “heavy haul routes” and carry large daily amounts of traffic, which is a highly desirable quality for any commercial development. Additionally, the site permits easy access to other notable commercial streets in the area including S. Beverly Drive, S. Doheny Drive, and S. Robertson Blvd. (See Map 6, Chapter 7) 2. PROJECT LOCATION AND SITE ATTRIBUTES

These buses run daily from approximately 5 a.m. to 9 p.m., with a maximum of 10-minute peak headways and 20-minute midday and evening headways. In addition, five Metro Local Bus Services operate in close proximity the site: (4, 14, 16, 20, and 28). All of these run to/from Downtown Los Angeles with a similar frequency, but with more local stops than the Metro Rapid services. The closest bus stops to our project site are around 1,000 feet away from the site (5 minutes walking). Additionally, there are two proposed heavy rail line extension stations that will lengthen the Metro Purple Line further west. The closest proposed station to the east is located at the intersection of Wilshire Blvd. and Rodeo Dr. and the closest proposed station to the west is located at the intersection of West Olympic Blvd. and Avenue of the Stars. Each location would be within a half-mile radius, or about 15 minutes on foot.

Local Amenities Parks and Recreation: A wide selection of nearby parks and open space add to the richness of the community assets surrounding the project area. Located within a one-mile radius of our project site, Beverly Hills Garden Park and 07


the Roxbury Park Community Center offer green Long Term Development space to be enjoyed by visitors and residents alike. (See Map 7, Chapter 7) The most recently proposed large scale project, the 2012 Gateway Project, was designed Schools: Also located within the immediate to supplant the long since demolished Pacific periphery of the project site are a variety of Railway line sitting between North and South public and private schools, including El Rodeo Santa Monica Blvd. This project proposed the Elementary, Beverly Vista Elementary School, establishment of an overlay zone that would guide Beverly Hills High School, and Good Shepherd future development and would, among other Catholic School (Pre K – 8th Grade). things, encourage the establishment of pedestrian and bike-friendly shopping networks, promote the Shopping: Shopping is a major attraction garden quality of the city, and increase overall for most Beverly Hills visitors, and a variety of retail connectivity within the City of Beverly Hills. The options exist in the area. First, a selection of small project received a great amount of backlash and “mom and pop” type shops line Santa Monica negative criticism from local residents (who were Blvd. along our project site including several primarily concerned with the traffic implications florists, shoe repair shops, health and beauty of the project) and eventually, toward the end salons, medical offices and local diners and of 2013, the project was ultimately disapproved eateries. While many of these retail establishments by the City Council. Another lower-scale project provide a great deal of community character to proposed for the area is the North Santa Monica the area, they appear to be quite dated. For a Reconstruction Plan, which focuses on creating more exclusive shopping experience, the famous infrastructure and aesthetic improvements to the Golden Triangle surrounding Rodeo Drive is Route 2. All in all, no major project proposals located to the east, featuring high-end designer were found that could potentially interfere with boutiques. Additionally, the Century City Westfield development of Beverly Square. mall is located approximately one half mile to the southwest, catering to the regional shopping needs Los Angeles’ Westside residents. Lastly, the closest supermarkets (Whole Foods Market and Ralphs) are found within one mile of the site. Arts/Entertainment: The site is situated near several iconic Beverly Hills establishments and locations. Apart from the aforementioned boutiques and art galleries lining Rodeo Drive, the famous Beverly Hilton Hotel is located on the northern side of Route 2. For those seeking a museum experience, the renowned Museum of Tolerance can also be found within the project area.

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PART 2: SITE LEVEL ANALYSIS The proposed site is comprised of five distinct land parcels, located on six lots (740745) at the corner of South Santa Monica and Charleville Blvd. Four parcels average 6,000 square feet, while the fifth, corner lot, measures approximately 12,000 square feet, reaching a total area of 35,997 square feet. According to property profiles and grant deeds obtained by the authors (See Appendices 2.1 and 2.2), Sunnyside Holdings, LLC owns all five of these parcels. A Figure 2.2: Project Site Zoning Summary summary table detailing the address, area, APN, Source: Beverly Hills City Code lot number, and total taxable land value for each same commercial zone, C-3A, to the north and property is provided below (See Figure 2.1). to the northeast. A multi-family residential zone of Zoning high-density units (50 DU/acre, maximum height of 60 feet) is located immediately to the south of In terms of zoning and land use, the the site. To the north of the location, crossing North entire project site area is designated as “Other Santa Monica Blvd, a hotel zone is established Commercial,” Commercial Zone C-3A. The for the Beverly Hilton, and a mixed use site exists maximum floor area ratio (FAR) is 2.0, with a for a now defunct proposal along 9900 Wilshire maximum height of 45 feet, or 3 stories. As a Boulevard. (See Figure 2.2 above and Maps 4 general rule of thumb, one parking space per every and 5 in Chapter 7 for more details.) 350 square feet of floor area of commercial space The City of Beverly Hills’ municipal zoning is required (with a larger requirement for dining/ restaurant spaces, although Beverly Square does code also outlines a series of permitted and not plan for restaurant use). The surrounding uses conditionally permitted relevant to our project site. in the area immediately adjacent to the site are the A summary of this can be found in Figure 2.3.

Figure 2.1: Project Site Parcel Summary Source: Property Profiles and Grant Deeds

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Figure 2.3: Permitted and Conditionally Permitted Uses Matrix, Zone C3-A Source: Beverly Hills City Code, Title 10, Chapter 3, Article 17

Additionally, the proposed Beverly Square development is located in an area of transition between commercial and residential uses, which requires particular considerations. Pursuant to Title 10, Chapter 3, Article 19.5 of the Beverly Hills municipal code, given that the site shares a public alley with a residentially zoned property, the site falls into an area legally defined as a “Commercial Residential Transition Area.” As such, the setback requirements state that, “no building, structure, or improvement, either above or less than eight feet (8’) below the grade level, except a wall or other improvement otherwise permitted by this article shall be located within six feet (6’) of the edge of the alley adjacent to such site.” In addition there are requirements for wall size, landscaping, mechanical venting, loading docks, extended hours for delivery, and noise, among others. The project team would be responsible for obtaining a transitional use license from the department of financial administration.

and silt-clay (derived mainly from the Santa Monica Mountains) include gravel and sand of stream channels. This material, originated during the Pleistocene Era (which lasted from about 2,588,000 to 11,700 years ago), is formed by detritus from the erosion of the Santa Monica Mountains. It is porous, and permeable, allowing excess drainage back to the water table. (See Map 8 and 16, Chapter 7)

Natural Physical Features The site is located 267 feet above sea level and has a slope close to zero. There are no foreseeable topographic problems as documented, except for possible drainage issues that could result from the lack of slope. However, the geologic material found underneath the site reject this possibility. Alluvial gravel and sand 2. PROJECT LOCATION AND SITE ATTRIBUTES

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PART 3: ENTITLEMENT PROCESS ASSESSMENT Principal Planner Michele McGrath and the Commercial C-3A zone: Associate Planner Shena Rojemann at the City of Beverly Hills each recommend that the most • Step 1: Planning Application (see efficient manner to receive the proper entitlements Appendix 2.5) to build the Beverly Square project is to conform • Step 2: Lot Line Merger Application to the existing uses in Commercial C3-A (see (Adjustment of five parcels, see Appendix “Zoning” section above for a complete list of 2.6) acceptable uses). • Step 3: Development Planned Review (DPR) Application for project over If, however, the team seeks to design and 2,500 square feet where the Planning build a use that does not conform with the existing Commission reviews the code and use, there are two options. If the use appears on conformance of the project (see Appendix the list of approved conditional uses provided per 2.7) Title 10, Chapter 3, Article 1702 of the City Code, • Step 4: Environmental Assessment (CEQA the step is to file an application for a conditional Review, see Appendix 2.8) use permit (CUP, see Appendix 2.3). Following • Step 5: Architectural Commission Review submission of the application, which includes (see Appendix 2.9) prescribed fees, plan, and map submissions, • Step 3: Building and Safety Plan Check the applicant would appear before a hearing of the Planning Commission to state his/her case In undertaking a planning application, for the CUP. If the proposed use is deemed non- it is necessary to consult closely with City staff conforming, the team would file an application throughout the process. Before submitting the for a zone change, which would require review application the applicant must walk through the by the Planning Commission and a General Plan entire proposal with planning division staff. It is wise amendment (see Appendix 2.4). This is a much to obtain a Staff Review Committee (see Appendix more arduous process, involving not only the 2.10 ), which is comprised of representatives from Planning Commission, but also the City Council the following departments: Planning, Building and members of the community. As such, after and Safety, Fire, Recreation and Parks, Public consulting with the City’s Principal Planner, the Works, and Public Art. This committee will provide team has chosen to follow the advice and desired guidance, suggestions, and corrections to the use of the City of Beverly Hills Planning Division to project. Once the application is ready, it must build a project within the conforming uses for the include: Commercial (C3-A) zone. • The application itself; While the project team seeks to build a • Concept approval from the Building and project within the acceptably zoned uses, there Safety Division; are still legal and technical considerations that • Environmental assessment necessitate a discretionary review process. • Architectural plans; According to our research, the following steps are • Digital copies of everything to be taken if the project conforms to code under • Public notice (since this project is over 2. PROJECT LOCATION AND SITE ATTRIBUTES

11


2,500 square feet and will be reviewed by the Planning Commission); • Shade and shadow study; • Traffic analysis (for any project over 10,000 square feet); • Subject fees

conceptual approval from the Building & Safety Division (obtained for the planning application process, as long as notification is given that conceptual approval involves an environmental assessment as well), public notice, parcel maps, hazardous waste and substances statement, traffic analysis, and subject fees.

A lot line merger is necessary when assembling several contiguous parcels into one site. Over time each individual parcel may have accumulated different lot lines, so in order to create one complete site, it will be necessary to work with the city planners to have the area surveyed and the new lot lines registered. (See Title 10, Chapter 2, Article 8 “Lot Line Merger”)

If the project application is fully complete with appropriate filing of Lot Line Merger and Development Planned Review (DPR), parking and traffic study and design proposal, the approximated entitlement process schedule is as outlined in Figure 2.4 below. (See Entitlement Process Schedule on page 14 for a more detailed outline.) The next step is to complete the DPR Based on conversations with members of application. This is similar to the previous steps the City Planning Division, we believe that the but also includes a zone objectives program project conforms to the correctly zoned uses for that “defines implementation and operational the site. If it conforms to the City of Beverly Hills measures which assure that the objectives of the Planning Commission’s vision for the economy subject zone are advanced. In conjunction with and built environment of the local area, we are this program, a parking program is to be prepared confident that Beverly Square will obtain all and included,” (see Appendix 2.7). The applicant necessary entitlements within two years. must also include a construction management program to demonstrate that the process is farther Political Assessment along than simply the concept phase by showing a thorough understanding of the construction issues. According to the Principal Planner Michele McGrath, only nine percent of available For the environmental assessment there commercial lots remain out of all commercially is a separate application that includes the same zoned properties in the entire City of Beverly

Figure 2.4: Discretionary Review and Estimated Time Frame Source: Various Interviews, including Michelle McGrath Beverly Hills Principle Planner

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Hills. City officials intend to preserve every bit that remains for exclusively commercial purposes. The City Council members the primary decisionmakers who approve or deny any proposed project over 2,500 square feet. Conversations with councilmembers, local business tenants, property owners, and city officials weighed heavily toward our design of a commercial retail development that would attract upscale residents and high wage earning professionals to boutique shops and cafes. Several city officials suggested that a pedestrian-oriented development at a street level design would likely not yield any opposition from property owners or business tenants since it would work to generate revenue for the city and revitalize South Santa Monica Blvd. In addition, Charleville Blvd. terminates in a dead end west of the site (on the other side of South Santa Monica Blvd.) that could present an opportunity for possible pedestrian or transit connections. As noted, Beverly Square is designed to address the needs of the upscale area residents and serve as a pedestrian and bicycle friendly retail experience. The development team intends to work closely with City officials and public constituents throughout

the process to promote the smooth and efficient settlement of entitlement issues. The table below summarizes the key constituents and potential opponents.

Figure 2.5: Political Assessment Comparisons Source: Various Interviews, including Michelle McGrath Beverly Hills Principle Planner

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Figure 2.6: Entitlement Schedule Breakdown Source: Various Interviews, including Michelle McGrath Beverly Hills Principle Planner

14

2. PROJECT LOCATION AND SITE ATTRIBUTES


CHAPTER 3: MARKET CONDITIONS


PART 1: REGIONAL ANALYSIS - LOS ANGELES COUNTY In order to gain a thorough understanding of the local market for neighborhood commercial retail development at the proposed site, it is important to begin with an analysis of the metropolitan socioeconomic characteristics for Los Angeles County. Conducting this study from a bird’s eye view allows us to draw conclusions about broad metropolitan trends that provide a baseline for our interpretation of localized market data. Comparing socioeconomic statistics from the immediate surroundings of the proposed project site, the City of Beverly Hills, and the L.A. metro area is a key analytical tool we use to determine the market conditions under which our project will be successful.

Socio-demographic Overview

demographic profile).

Employment Characteristics & Trends Employment is a particularly important variable to consider when performing a regional analysis, primarily because it plays such an important role in determining a region’s growth. Based on 2010 Census data, there are around 3.9 million jobs within the County. In recent years, L.A. County has seen a decrease in younger workers (age 29 or younger) and an increase in older workers. In 2002, the “29 or younger” group made up 28.2 percent of the working population whereas in 2010, they made up only 23.2 percent. The age “55 or older” group percentages have been steadily increasing, comprising 13.2 percent

CITY OF BEVERLY HILLS

LOS ANGELES COUNTY

According to the 2010 Census, Los Angeles County has a total population of 9.8 million, making it the most populous county in the United States1. Including Beverly Hills, it is home to 88 incorporated cities and has an overall population density of about 2,420 persons per square mile. The estimated median age within the County is about 35 years, with about a quarter of the population under the age of 18, and approximately 11 percent of the population over the age of 65. Given that Los Angeles is one of the largest metropolitan centers in the United States, it comes as no surprise to see a diverse racial composition, with just over half the population (50.3 percent) identifying their race to be White alone, 13.5 percent identifying their race to be Asian alone, and almost half of the population (47.7 percent) identifying a Hispanic or Latino origin in their ethnicity2. Lastly, L.A. County contains around 3.4 million housing units with a slight majority listed Figure 3.1: Household Income Distributions as renter occupied (52.3 percent). (See Appendix Source: 2008-2012 ACS 5 Year Estimates (Onthemap. 3.2A, B, and C for detailed tables on LA County’s census.gov) 3. MARKET CONDITIONS

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of the working population in 2002 and 18.2 percent in 2010. Salaries have also been slowly increasing over the past several years. In 2010, 37.5 percent of the working population earned more than $3,333 per month and had a median income of around $55,476 (See Figure 3.1, Family Household Income).

eight-year time period. A few industries, however, experienced more noticeable changes. Los Angeles, like other regions across the United States, experienced a significant decrease in manufacturing from 13.7 percent in 2002 to 9.1 percent in 2010. It also saw a slow, steady growth in the health care and social assistance industry sector (from 9.1 percent in 2002 to 11.1 percent ACS 5-Year Estimate for 2008-2012 in 2010) and public administration (going from 1.8 identified educational services as the largest percent in 2002 to 4.0 percent in 2010). industry sector within the County, followed by professional management and services, Overall Economic Outlook manufacturing, and retail trade (See Figure 3.2, Occupational Comparison by Industry). In order To gain further insight into the economic to examine industry trends over the time period picture of the L.A. metro area, we analyzed macrofrom 2002 to 2010, we examined NAICS Industry level trends and projections from the Kyser Center Sector data (see Appendix 3.3), which showed for Economic Research Los Angeles County the percentage share per sector of the overall Economic Development Corporation “2013economy remained relatively stable during that 14 Economic Forecast and Industry Outlook� LOS ANGELES COUNTY (TOTAL)

INDUSTRY Civilian Employed, 16 years and over Agriculture and Forestry Construction

L.A. COUNTY (% OF TOTAL)

4,495,118

CITY OF BEVERLY HILLS (TOTAL)

BEVERLY HILLS (% OF TOTAL)

16,607

22,575 261,641

0.5% 5.8%

8 164

0.0% 1.0%

Manufacturing

490,775

10.9%

729

4.4%

Wholesale Trade Retail Trade Transportation and Warehousing Information Finance and Real Estate Professional and Management Services

165,971 480,477

3.7% 10.7%

1,480 1,576

8.9% 9.5%

236,156

5.3%

251

1.5%

196,228 289,961

4.4% 6.5%

1,185 2,040

7.1% 12.3%

548,923

12.2%

2,885

17.4%

Educational Services Arts, Entertainment, and Food Services Other Services (excl. Public Admin.) Public Administration

922,967

20.5%

3,290

19.8%

450,195

10.0%

1,472

8.9%

276,424

6.1%

1,086

6.5%

152,825

3.4%

441

2.7%

Figure 3.2: Occupational Comparison by Industry: L.A. County vs. City of Beverly Hills Source: 2008-2012 ACS 5 Yearby Estimates Figure XX: Occupation Comparison Industry,(Onthemap.census.gov) Los Angeles County and the City of Beverly Hills. Source: 2008-

2012 American Community Survey 5-Year Estimates.

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report, published February 2013. According to the report, the unemployment rate was expected to fall to 10.0 percent in 2013 and subsequently to 9.7 percent in 2014. That is still several years away from a stabilized unemployment rate of around 7.5 percent. Nonfarm jobs in the County were expected to increase to close to four million, which the report estimates is a few years away from reaching the 2007 peak of 4.12 million jobs. Additionally, the largest gains for 2013 were projected in leisure and hospitality (8,600 jobs), healthcare (5,000 jobs), construction (4,900 jobs) and professional, scientific and technical services (4,400 jobs). The entertainment industry and the transportation and trade industry are two key sectors that will continue to bolster the L.A. County economy. Personal income increased in 2012 and is expected to increase to $470 billion by 2014. Additionally, taxable retail sales increased by 9.4 percent in 2012 and were projected to increase by 5.9 percent and 3.4 percent in 2013 and 2014, respectively. The report notes that, “Both of these indicators suggest that the local consumer sector is on the mend, an all-important fact for retailers and other consumer-serving businesses,” (LAEDC Kyser Center for Economic Research, Economic Forecast, February 2013, p. 32). Overall economic indicators demonstrate that Los Angeles County is in the midst of a full-fledged recovery from the Great Recession. This bodes well for the timing of the Beverly Square development, especially in one of the strongest markets in the entire county.

Notes: 1. See Appendix 3.1 for a side-by-side demographic comparison between Los Angeles County and the project site-specific Census Tract (Beverly Hills 7010). Source: 2010 Census via Social Explorer. 2. The Census counts “race” and “ethnic origin” as different categories, which accounts for the discrepancy that these three percentages add up to more than 100 percent. 3. MARKET CONDITIONS

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PART 2: COMPETITIVE ENVIRONMENT Beverly Square will serve the needs of the upscale residents living in the neighborhood immediately to the south of the project site. It is a hybrid between typical neighborhood-serving retail and specialty retail. Specialty retail requires discretionary income and time, both of which the wealthy neighborhood residents possess. The development will attract shoppers (in part) by presenting a refined aesthetic presence that mirrors the high quality associated with the retailers and their products. Beverly Square will offer local area residents and workers the convenience and proximity of neighborhood retail coupled with the beauty and exclusivity of a specialty shopping experience to meet their upscale sensibilities.

includes the famously affluent commercial retail stores located in Golden Triangle. By comparison, the current retail stock along the South Santa Monica Blvd. shopping corridor is not as upscale, however there are few retail areas in the world that compare to the luxury on display along Rodeo Drive. As such we sought market information from a variety of similar areas outside of the one-half mile vicinity that also mirror our site’s position in a residential-commercial transition zone. These comparable markets include Brentwood, Santa Monica, and Pacific Palisades, which, like our project site, still fall in the upper echelon of retail markets yet fall short of the “one-percent wealth” attracted to the Golden Triangle.

To conduct a comprehensive analysis of the existing trade area for neighborhood commercial retail, we examine four data sources. The first two sources are reports for Q4 2013 from Reis Services, LLC. One report was generated for 9908 South Santa Monica Blvd. in Beverly Hills (Appendix 3.4A), and the other for 129 Santa Monica Blvd. in Santa Monica (Appendix 3.4B). They each contain inventory of existing retail development currently on the market. The third source we examine is the website LoopNet, from which we catalogue seven market rate, commercial retail projects currently available for lease. Finally, to create a list of potential competitor projects, we include planned and proposed developments from a list of ongoing projects obtained from the City of Beverly Hills Planning Division (Appendix 3.5).

Rent Comparables Based on the Q4 2013 Reis reports, our analysis revealed only one development – The Rodeo Collection, located approximately one half mile away on Rodeo Drive – that is comparable in terms of its service to upscale clientele (See Map 10, Chapter 7). While Beverly Square is not an exclusive enclave for the ultra wealthy like the Rodeo Collection, we make the comparison based on geographic proximity. Another comparable project – The 3rd Street Plaza, a little over two miles away – is modest by comparison, serving mid to upscale clientele. We also included two similar developments in Brentwood and Pacific Palisades.

Asking rent per square foot for these four properties ranges between $3.51 and $5.00 per square foot, per month (see #’s 1-4, Figure Trade Area 3.3, Comparable Retail Rental Properties). This section of the report defines and For a closer look comparable rental data in analyzes the trade area for Beverly Square. The the immediate vicinity of 9900 South Santa one-half mile trade area radius for this project Monica Blvd., we also included information for 3. MARKET CONDITIONS

19


six properties currently listed on LoopNet (see #’s 5-10, Figure 3.3, Comparable Retail Rental Properties). All properties are located within one mile of Beverly Square. Asking rent per square foot for ground floor, street-facing retail ranges from $6.00 to $14.00. Two properties offer second story space for $4.00 per square foot. Data from these properties indicates that we can assume a starting monthly rent per square foot in the range of $5.00 to $6.00. For more details, including our determination of a weighted average to account for the difference in rent for first and second story shops, please see the Financial Feasibility section of the report.

Planned and Proposed Projects According to the Reis reports, there are only seven planned or proposed developments within a three-mile radius of our project site. Of those, only two are classified as neighborhood commercial retail developments. And of those two, one is almost three miles away and therefore falls outside the trade area. The other project is a little over one half mile away, however even that distance is also too far away to attract the local neighborhood customers targeted by Beverly Square. Based on an assessment of current

Figure 3.3: Comparable Retail Rental Properties Source: Reis Services, LLC (Beverly Hills and Santa Monica Retail Reports), LoopNet

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projects under review or recently approved by the indicated is not a directly competitive market for City of Beverly Hills Planning Commission (and/ Beverly Square. or City Council in some cases), we found four potential competitors (see #’s 8-11, Figure 3.4, Vacancy and Absorption Planned and Proposed Projects, and Map 11, The Reis reports for commercial retail Chapter 7). While these projects are each within one mile of our development, they are all located properties designate the Santa Monica-Westsidein the Golden Triangle, which we have already Downtown submarket as one of twelve districts

Figure 3.4: Planned and Proposed Projects within 3-mile radius of 9908 S. Santa Monica Blvd. Source: Reis, Inc. Property Report, “Comparable Group Listing”, December 2013

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that make up the Los Angeles metro region market area. According to Reis, this submarket currently has 5.3 million square feet of neighborhood and community retail space, which is just fewer than eight percent of the total for the L.A. Metro area. A Q4 2013 CBRE “Greater Los Angeles Retail Marketview” report (Appendix 3.6) estimates about 4.6 million total square feet of gross leasable area in the “West Los Angeles” region. In the ten-year period since Q4 2003, Reis reports an annualized inventory growth rate for the submarket is 1.3 percent, indicating that even during the Great Recession this submarket experienced positive retail growth at a higher rate than that of the 0.7 percent growth rate for the metro region on the whole.

years from initial submission of the planning application to completion of the project. As noted, Beverly Square is projected to have a total of 49,728 square feet of NLA. Referring to Figure 3.4, “Planned and Proposed Projects,” we assume that the two closest retail properties (#’s 5, 11) will be on a similar time horizon and could conceivably be competitive with our project. Therefore we would have to compete with 108,815 square feet of new commercial retail NLA within a one-mile radius. Adding the 49,728 square feet of NLA from our project, the total new NLA for the competitive submarket at the time the projects open would be 173,319 square feet.

According to the Reis report, vacancy rates in the Santa Monica-Westside-Downtown submarket for 2013 averaged 4.7 percent, while they averaged 7.4 percent at the L.A. Metro level. The CBRE report notes a vacancy rate of 3.4 percent for West L.A., with an overall rate of 5.8 percent for the metro area. Vacancy information for comparable properties examined in this report was unavailable. Given the competitive location of our development, we anticipate vacancy rates to be more in line with the CBRE report, somewhere between 3-4 percent. The CBRE report notes that the L.A. metro region sustained retail demand during Q4 2013 by recording a net positive absorption of almost 250,000 square feet, bringing the 2013 year-todate figure to over 800,000 square feet. West L.A. contributed to these figures in Q4 with almost 53,000 square feet, ending the year with a positive net absorption of slightly less than 10,000 square feet. According to Reis, the annualized five-year historical absorption rate for the submarket is 1.1. Based on the two-year project entitlement schedule and an estimated two-year construction timeline, we estimate a total time horizon of four 3. MARKET CONDITIONS

22


PART 3: MARKET DEMAND This section assesses demographics of the local trade area, which we measure using two similar sources: Beverly Hills Census Tract 7010, and data available from Esri (Appendices 3.7A through K) within a one-half mile ring around the project site. Census Tract 7010 is situated in the southwestern tip of the City of Beverly Hills. It includes upscale multi-family housing, some single-family units, and a range of retail options that makes it representative of the market we hope to capture in the immediate vicinity of our project site. We consider socio-demographic indicators as well as employment and economic conditions of those working in and visiting the area to determine retail demand for our proposed project.

Socioeconomic Conditions Census Tract 7010 is comprised of a total population of 5,431 individuals, which accounts for about 16 percent of the total population for the City of Beverly Hills. The population density is 9,883 persons per square mile, which is considerably higher than the rest of the City (with a population density of 5,975 persons per square mile). Additionally, the median age for the project area is just over 44, which is almost ten years older than the L.A. County average. In fact, 18.7 percent of the census tract population is 65 or above compared to 10.8 percent for the County. Over 80 percent of the tract population identifies as “White alone,” compared to around half the L.A. County population.

attainment usually has strong correlation to income levels, and Beverly Hills is no exception. The median income for the project area is estimated at $86,609 (Esri reports $85,500), which contrasts considerably to the County’s median income estimate of $56,241. Around 45 percent of the local population has a household income $100,000 or more.

Employment Classifications According to the Esri Business Summary for the one half mile radius around the project site, there are just over 28,000 daytime employees that work at 3,662 businesses in the area. The largest segment of workers, more than one quarter (25.3 percent), works in “Professional, Scientific & Tech Services.”1 The next two largest sectors make up 10.5 and 10.4 percent of the workforce, respectively: “Administrative & Support & Waste Management & Remediation Services,” and “Finance and Insurance.” “Accommodation & Food Services,” and “Retail Trade” are also important local job providers, with 8.6 and 8.4 percent of the employees, respectively. “Real Estate, Rental & Leasing” employees are 5.2 percent of the workforce, and the “Information” sector makes up 5 percent of the area jobs. Based on this summary area jobs, we infer that almost half (45.9 percent) are high wage earning jobs that would contribute to demand for higher end goods offered in the amenity-rich and beautifully landscaped Beverly Square. (See Map 9, Chapter 7)

Educational attainment levels in the project Consumer Segment Classifications area are much higher than County averages. According to ACS estimates for 2008-2012, In order to gain a comprehensive around 70 percent of the population in the project understanding of the consumer population area has a higher education degree. Educational living within the trade area of the project site we 3. MARKET CONDITIONS

23


82.4%

• • • •

“LAPTOPS AND LATTES” "LAPTOPS AND Single,LATTES" affluent, highly educated Median Age: 38.7 Prefer to rent apartments iConnected

14%

• • • •

“TOP RUNG” "TOP RUNG" Married, wealthy, highly educated (1%ers) Median Age: 44.2 Single-family home owners Luxury Shoppers

3.6%

“URBAN CHIC” • Single/married, split, professional, highly educated • Median Age: 42.7 • 63% housing is single-family, 27% apartments

"URBAN CHIC"

Figure 3.5: Esri’s TapestryTM Segmentation and Defining Features (Percentages drawn from .5 mile radius) Source: Esri

examine Esri’s TapestryTM Segmentation. Figure • About half of all consumers purchased Figure XX: Esri Tapestry Distinguishing Characteristics, 0.5 Mile Radius From Project Site 3.5 depicts the population percentage of the three men’s and women’s apparel in the past 12 Source: Esri Business Analyst most prevalent segments in the area and outlines months their distinguishing characteristics. • Almost one-fifth purchased fine jewelry in the past 12 months • Over two-thirds drank bottled water in the Market Demand Possibilities past six months The socioeconomic and consumer segment • Nearly two-thirds dined at a restaurant in characteristics of the population surrounding the the past 12 months project site indicate a wealthy, middle age, highly • Nearly two-thirds have monthly credit card educated population with disposable income that expenditures over $700 they spend on luxury goods. The higher relative population density of the area creates conditions The Esri Retail Marketplace Profile report suitable for a walkable and bicycle-friendly (see Appendix 3.7D) shows a retail surplus of commercial development. High household income about $578 million in annual sales, which indicates and discretionary spending on luxury goods a saturated market for the area’s residential indicates the target population’s preference for a population (3,757). It must be understood, first-rate, carefully crafted shopping experience. however, that sales from Golden Triangle businesses contribute heavily to this calculation. The Esri Retail Market Potential report (see As noted, the Golden Triangle is a world-class Appendix 3.7C) provides retail spending trends shopping district that attracts a disproportionately exhibited by the area population. The trends listed high number of customers from outside the one here further corroborate the high purchasing half mile radius, which accounts for the extreme power of this target consumer population: supply surplus relative to the population-based demand. 3. MARKET CONDITIONS

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Excluding the distorted retail surplus numbers from the Golden Triangle, we feel confident that our hybrid specialty-neighborhood retail development will occupy a unique space for upscale clientele who live and work in the surrounding community. Esri estimates retail demand on the part of the local population at almost $105 million, however that figure does not account for demand created by the local workforce. As noted above, half of the area’s 28,000 daily workers are high-end wage earners who would be the most likely to contribute to total retail demand. Assuming that each of the 14,000 high wage-earning workers spends an average of $50 per week in the area, they contribute an additional $36.4 million in retail demand to the trade area. Local businesses also create demand when they order food for clients and employees, purchase supplies, and generally engage in the local economy. According to the Esri report, there are 3,662 businesses located within a one-half mile radius of the project site. Assuming they spend a conservative average of $100 per week in the area, they contribute an additional $19 million in retail demand per year. Including residents, high wage earners, and businesses, retail demand in the one-half mile radius trade area equals $160.4 million per year.

projects currently in the planning phase, we estimate that the market will have an additional 173,319 square feet of the same product coming on line at the same time. As such, we estimate Beverly Square’s capture to be 28.7 percent of the new market, or about $46 million of the total area retail demand of $160.4 million. The $45.3 million sales projection for Beverly Square falls within the expected market capture of $46 million of the total area demand.

According to “Dollars and cents of shopping centers / the SCORE,” sales figures for the upper decile of U.S. neighborhood shopping centers in the west average $454.76 per square foot per year. Given the high median income of local area residents that will patronize Beverly Square, we multiply that baseline figure by two2 to estimate that Beverly Square will generate approximately $910 in sales per square foot per year. This translates to $45.3 million in sales per Notes: year. 1. Industries defined using NAICS codes As noted above, Beverly Square will provide 49,728 square feet of neighborhood retail 2. In addition, Professor Joan Ling advised this NLA. Based on information we have regarding strategy in a meeting taking place March 5, 2014 3. MARKET CONDITIONS

25


CHAPTER 4:

DEVELOPMENT PROGRAM AND DESIGN


CHAPTER 4: DEVELOPMENT PROGRAM AND DESIGN To achieve the successful completion of the Beverly Square development, our project team will strive to work collaboratively with various actors in the City of Beverly Hills, including the Planning Division in the Community Development Department, Chamber of Commerce and local homeowners associations. It is imperative that the Beverly Square project supports the vision for commercial development that the City articulates in the General Plan.

While the City of Beverly Hills articulates a vision for reducing its carbon footprint, the reality is that it is still a heavily automobile oriented city. Nevertheless, we considered relationship between the proposed project and the movement toward transit-oriented development. There are two proposed stops along the Metro Purple Line Extension within an approximately one half-mile radius of the project site: one at Wilshire Boulevard and Rodeo Drive, and the other one at Avenue of the Stars and Olympic Boulevard. Despite According to the vision of the General the objective proximity, research shows that the Plan, the City of Beverly Hills lays out five general positive economic benefit derived from proximity themes in order to, “define a roadmap to sustain to transit stations begins to diminish at distances and nurture the qualities and characteristics over one quarter mile. Given that the closest of the that contribute to Beverly Hills’ identity as an two proposed Metro stops would be just over one extraordinary community in which to live, do half mile away, our project will not likely capture business, work, shop, recreate, be culturally many transit-oriented development benefits. enriched, and respect the environment (City of However, Beverly Square will promote walkability Beverly Hills General Plan, pg. 6). These five in the immediate commercial surroundings as an themes are: ideal of pedestrian-oriented development that creates a connected and walkable environment 1. Sustaining Great Places that takes the advantage of existing and proposed 2. Growing Smarter bicycle paths. 3. Maintaining a Resilient Economy, and Provision of Services The Beverly Square development program 4. Living Lightly – Reducing Our “Carbon aspires to reimagine South Santa Monica Footprint” Boulevard as a “Main Street” corridor, serving 5. Developing a Sustainable Future as the area’s premier destination among the existing adjacent commercial and retail uses. The Members of the City Planning Department proposed development guidelines illustrate the highlighted the importance of ensuring that all manner in which our vision for the site coincides proposed development fit within the context with local development considerations. of these five themes. As such, our proposal for Beverly Square seeks to increase the overall Pedestrian-Scale Development quality of life for residents by promoting walkability, providing upscale retail services commensurate Beverly Square promotes the public safety with clearly defined market needs, and employing of a great neighborhood that is compact and LEED-Silver green building practices. connected. The proposed development connects to the retail corridor along South Santa Monica 4. DEVELOPMENT CONCEPT AND DESIGN

27


Boulevard with a proposed pedestrian path through the center of the site. The pedestrian is encouraged to enter the development from the street at two entrances that guide her into a courtyard of retail shops. A variety of streetscape furniture, landscaping, and lighting provides the intimate character of the neighborhood that is both walkable and friendly.

Architectural Continuity The area immediately surrounding the project demonstrates a variety of retail and residential uses that exhibit an assortment of architectural styles, including European Revival, Spanish Revival, Mediterranean style, and Modernism – all within the extent that exhibits the living vernacular of the City of Beverly Hills. Based on a critical examination of these architectural styles, including field observations and conversations with the City’s urban designer, Beverly Square seeks to illustrate frontage types, exterior facade walls, building heights, and massing in order to continue the preservation of this distinct neighborhood character. With a combination of these architectural styles and varied massing of building heights, we intend to capture an illusory effect of a traditional town setting with a “Main Street” character that extends throughout South Santa Monica Blvd.

accommodate 205 parking spaces, 63 of which are for community benefit. The parking entrance is located on the southwest corner of the site abutting South Santa Monica Blvd. This proposed location enables an ideal circulation route for vehicles and ease of access for handicapped persons traveling in vehicles or on the street. The overall building envelope is developed based on the contextual environment of the neighborhood that contains hotel establishments with a minimum of four stories, two and one half story residential buildings, and a pattern of single-story to twostory commercial developments along the South Santa Monica Boulevard corridor.

Natural Resources Management

As advocates of environmental design, we seek to create a series of buildings at a maximum of two story heights to enable natural ventilation and sunlight to enter into what would otherwise be cold, dark spaces. In this capacity, our light and shade study would provide minimal development of artificial lighting to conserve the City’s energy costs and promote a variety of sustainable design interventions. In addition, the project proposes landscaping the site with natural foliage and aesthetically beautiful water fountains to create the exotic appeal of nature within an upscale retail experience. We propose innovative techniques of landscaping and pavement styles to add surface We begin with single-story storefronts facing permeability and water catchment systems to South Santa Monica Blvd. in a symmetrical nod further the green building goals of the City. Based to the identity of the commercial establishments on conversations with Kathleen Head, Managing across the street. The northwest corner of the Principal at Keyser Marston Associates, we believe project serves as a primary entrance that tapers that we can achieve LEED-Silver certification for down from a two-story massing structure, thus the building structure at no extra construction creating an “L” product with a series of courtyards costs. that produce the ‘element of surprise’ in terms of human encounters and retail experience. Along Vibrant Businesses and Shopping Districts the eastern edge of the site lies one of the larger square-footage establishments and terminates Beverly Square has been designed to with varied retail uses on the southern edge of the activate the public realm of courtyards and site. In addition, two levels of subterranean parking fountains with outdoor seating to create an upscale, 4. DEVELOPMENT CONCEPT AND DESIGN

28


intimate shopping experience for patrons. As noted, the project is driven by market demands to provide upscale retails shops and services for the wealthy consumer base in the adjacent residential area accessible on foot or bicycle. In addition, local area professionals who work within walking distance of the shops, as well as members of the greater Beverly Hills community, will be drawn to experience the intimately chic neighborhood setting. These new high-end establishments seek to promote the economic development goals of the City while furthering the reputation of Beverly Hills as a destination for those seeking a specialty retail experience. Potential retailers comprising the tenant base of Beverly Square include: • Purveyors of fine clothing Janie and Jack, Ted Baker, and Lululemon Athletica; • Specialty food stores Dean & Deluca and Sunlife Organics; • Personal care facilities such as Pure Barre, Yoga Works, Bodyrok Sculpt and Cycle, and Burke-Williams day spa; • Home goods providers Williams-Sonoma and Between the Sheets; • Small-scale cafe’s such as Starbucks; • Retailers and service providers addressing the needs of local residents and professionals: dry cleaning and tailoring; stationary; florist; and a pet grooming boutique, among others.

4. DEVELOPMENT CONCEPT AND DESIGN

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ev C

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ica on ta M San

d var ule Bo

30

4. DEVELOPMENT CONCEPT AND DESIGN

BEVERLY SQUARE ISOMETRIC PROJECTION

o B ille

d var e l u


BEVERLY SQUARE SITE PLAN

4. DEVELOPMENT CONCEPT AND DESIGN

31


BEVERLY SQUARE FIRST FLOOR PLAN

4. DEVELOPMENT CONCEPT AND DESIGN

32


BEVERLY SQUARE SECOND FLOOR PLAN

4. DEVELOPMENT CONCEPT AND DESIGN

33


BEVERLY SQUARE SECTION

4. DEVELOPMENT CONCEPT AND DESIGN

34


CHAPTER 5:

FINANCIAL FEASIBILITY


PART 1: ASSUMPTIONS The development team conducted a detailed financial feasibility assessment, which draws from various real estate market reports and economic data to determine that the Beverly Square project is low risk, high feasibility investment opportunity compared to current market return thresholds. The proposed upscale neighborhood retail center contains 49,728 square feet of net leasable area distributed among approximately eighteen units. The total development cost (TDC) for the project equals $44,619,362. The total value upon completion is $52,061,840, which generates $7,442,477 in equity value. The leveraged return on equity comes to 10.20 percent, and over a ten-year period, the year-on-year internal rate of return of 20.92 percent on equity is an investment opportunity that is hard to match in money markets. The first part describes our cost, income, and financing assumptions in a series of detailed tables (see the tables below). The next section explains how our feasibility assessment compares to static and ten-year return on investment measures. Finally, we present a series of sensitivity tests that demonstrate how specific financial adjustments to cap rates, construction costs, and the loan to value ratio could alter project feasibility.

5. FINANCIAL FEASIBILITY

36


LAND ASSUMPTIONS

5. FINANCIAL FEASIBILITY

37


5. FINANCIAL FEASIBILITY

38


FINANCING ASSUMPTIONS

5. FINANCIAL FEASIBILITY

39


DEVELOPMENT COSTS ASSUMPTIONS

INCOME ASSUMPTIONS

5. FINANCIAL FEASIBILITY

40


EXPENSE ASSUMPTIONS

5. FINANCIAL FEASIBILITY

41


PART 2: FEASIBILITY ASSESSMENT Q3 2013 Real Estate Report. Again, because Static Measures of Return Beverly Hills is such a hot market, investors would accept a slightly lower return because the risk on We review the project’s return measures investment is lower than the average risk for Los based on two financing mechanisms: debt Angeles. Comparative figures for profit at sale coverage ratio (DCR) and loan to value cap and gross margin were not available. However, a ratio (LVCR). The LVCR mechanism provides logical review of these returns reveals that a profit the lowest maximum loan at $33,840196, which at sale around 70 percent and a gross margin necessitates an equity investment of $10,779,166 over 16 percent are positive return measures. to cover the TDC of $44,619,362. The leveraged return on the equity investment is 10.20 percent IRR (10 - year) Measures of Return and the unleveraged return on total development In addition to the static measures of cost equals 7.35 percent. The profit at sale is projected to be $7,442,478, which provides a return, we measured leveraged and unleveraged leveraged profit over equity rate of 69.05 percent. internal rates of return (IRR) using a ten-year Finally, the unleveraged gross margin over the cash flow model that assumed a three percent total development cost is estimated to be 16.68 annual increase in net operating income (NOI) and a terminal cap rate of seven percent. The percent. project generates a year-on-year leveraged IRR These returns clearly indicate that the of 20.92 percent and a 9.80 percent unleveraged project is feasible, and moreover, a sound IRR. The unleveraged IRR range for national strip investment opportunity. Figure 5.1 “Project shopping centers provided in the Q3 2013 PWC Feasibility Comparison” presents a breakdown Real Estate Investor Survey is between 5.50 to of how our project’s financial returns compare 11.50 percent, with an average of 8.06 percent. to current market returns. The 10.20 percent The Beverly Square project falls into the upper end leveraged return on equity investment falls of that range and actually surpasses the national within the range of accepted returns provided average, indicating a high level of feasibility. The for un-anchored national retail by the RealtyRate 20.92 percent leveraged IRR represents a return Investor Survey, but is below the national average on investment higher than most returns available of 12.85 percent. Beverly Hills, however, is one in capital markets. A Bloomberg finance report of the country’s hottest markets, which makes it (Appendix 5.1) notes that hedge funds offered a more secure investment opportunity than the an average 7.4 percent return on investment in national average. Beverly Square investors would 2013. While the S&P 500 produced a remarkable be willing to take a return on equity investment 26.5 percent return in 2013 (Appendix 5.2), that toward the lower end of the accepted spectrum was its best return since 1995 and represents an due to the lower risk of a sound investment in a anomaly laden with risk. An IRR above 20 percent hot market. The 7.35 percent unleveraged return on a real estate project in Beverly Hills offers a far on TDC is one percentage point lower than the safer investment opportunity. first tier neighborhood/commercial retail average for Los Angeles, which is provided by the RERC 5. FINANCIAL FEASIBILITY

42


Project Return Measures

BEVERLY SQUARE 9900 S. Santa Monica Blvd.

FINANCING ASSUMPTIONS

STATIC (ANNUAL) RETURNS

STATIC (ONE-TIME) RETURNS

10 YEAR TIME VALUE RETURNS

REALTY RATE INVESTOR SURVEY, Q4 2013 (Un-anchored retail, national figures p. 32)

RERC, Q3 2013

PWC, Q3, 2013

(Neighborhood/ Commercial, Los Angeles market, First Tier, p. 43)

(National Strip Shopping Center Market, national figures, p. 23)

Debt Service Coverage Ratio (DSCR)

1.25

1.3 - 2.25 (1.78 avg.)

1.25 - 1.35

X

Max Loan to Value Ratio (LVR)

65%

50% - 75% (63% avg.)

55% - 75%

X

Starting Cap Rate

6.30%

4.97% - 13.32% (8.67% avg.)

6.60%

5.00% - 10.00% (6.91% avg.)

Ending Cap Rate

7.00%

X

7.20%

6.00% - 11.00% (7.44% avg.)

10.20%

8.36% - 18.33% (12.85% avg.)

X

X

7.35%

X

8.40%

X

69.05%

X

X

X

16.68%

X

X

X

Leveraged IRR

20.92%

X

X

X

Unleveraged IRR

9.80%

X

X

5.50% - 11.50% (8.06% avg.)

Return on Equity Investment (Cash Flow/Equity) – (Leveraged) Return on TDC (NOI/TDC) – (Unleveraged) Profit @ Sale (Profit/Equity) – (Leveraged) Gross Margin (Profit/TDC) – (Unleveraged)

Figure 5.1: Project Feasibility Comparison Source: Authors

5. FINANCIAL FEASIBILITY

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PART 3: SENSITIVITY ANALYSIS In an effort to gauge the strength of percent (cash flow over equity), 392.91 percent this project’s expected financial returns on (profit over equity), and a 32.66 percent IRR over investment, we applied four categories of stress a ten-year period. tests, including: On the other hand, increasing the cap rate • Adjusting the starting cap rate up and to 7.30 percent caused the project value (and down by one percent equity value created) to drop by $7.1 million. • Adjusting the ending cap rate up and The maximum available loan decreased to $29.2 down by one percent million, necessitating an increase in initial equity • Adjusting the construction costs up and to $15.4 million. The return on equity investment down by ten percent remained very respectable at 9.07 percent, but the • Adjusting the LVR up and down by ten leveraged return of profit over equity plummeted percent to 2.02 percent. The leveraged IRR over ten years dropped slightly to 17.48 percent. Despite the low We measured the effect these tests had on profit over equity return, even with the cap rate the four static return measures (return on equity increased to 7.30 percent the project remained investment, return on TDC, profit at sale, and gross feasible. margin) as well as leveraged and unleveraged IRR after a ten year investment period. The As can be seen in Figure 5.2, “Sensitivity adjustments and corresponding consequences Analysis,” the three other tests altered returns on the return measures are captured in Figure 5.2, but did not cause significant enough changes to “Sensitivity Analysis.” make the project infeasible. The relative strength of the Beverly Hills commercial retail market allows The most impactful of the four tests we this project to obtain favorable returns using applied was to adjust the cap rate up and down rather conservative estimates for the LVR (65 by one percent from our base rate of 6.30 percent. percent) and cap rate (6.30 percent). When these This is not surprising because the cap rate is numbers are adjusted, the project continues to perhaps one of the most important real estate fare well due to the premium rent per square foot investment factors for any project. It is a measure it is able to command while keeping operating of the rate of return based on the expected costs to a minimum. In sum, the Beverly Square income that the property will generate. Lowering development project a low risk, highly feasible our cap rate to 5.30 percent increased the project investment opportunity in a trusted market. value upon completion (and equity value created) by approximately $9.8 million. Additionally, this increased the maximum available loan (still using the loan to value cap ratio), which lowered the initial equity investment needed to cover total development costs. This combination of less initial equity and higher project value caused leveraged returns on equity to skyrocket to 15.67 5. FINANCIAL FEASIBILITY

44


Sensitivity Analysis

Figure 5.2: Sensitivity Analysis Source: Authors

5. FINANCIAL FEASIBILITY

45


CHAPTER 6:

CHALLENGES AND OPPORTUNITIES


CHAPTER 6: CHALLENGES AND OPPORTUNITIES The biggest hurdle facing the proposed Beverly Square commercial retail project is ensuring a smooth entitlement process and avoiding surprise adversity on behalf of community actors that the development team was unable to anticipate. The project has been designed to fully comply with all aspects of the City Code as it applies to that particular parcel in the “Other Commercial” (C-3A) zone. The project team has decided to engage key City officials and other constituents early and often to streamline the entitlement processes, navigate through and around any potential political pitfalls, and begin the process of securing debt and equity to begin the project in earnest as soon as possible. The Beverly Square project will be located in a Commercial-Residential Transition Area, which creates a setback restriction. Since the project will border two-story residential dwellings to the south, the project team is weary about possible opposition from nearby residents, including the Southwest Homeowners Association. Residents with abutting property could oppose a relatively high-density building mass in its proximity, but the 1.72 FAR in a zone permitting a 2.0 FAR is hardly any reason for concern. In order to balance as much opposition as possible, the Beverly Square project will conform to the prescribed sections of the municipal code while seamlessly transitioning into the neighborhood. The project has been designed with an array of building heights to create an undulating pattern that does not stand out as one solid wall abutting to residents, but rather enables natural sunlight and ventilation. The building is a combination of single and two-story heights that works in aesthetic concert with the two-story residential developments on the opposite side 6. CHALLENGES AND OPPORTUNITIES

the alley, the two-story commercial developments adjacent to the south of the site, and single-story commercial developments west of South Santa Monica Boulevard. As proposed, the Planning Commission and Architectural Review Board will most likely approve the Beverly Square project, subject to the architectural continuity of the site. Local business tenants might object to the new retail development because they will see it as an affront to their sales, but the hotel establishments, including the Peninsula Hotel and the Beverly Hilton, should support the creation of a new shopping destination for their patrons. The development team can attempt to assuage concerns of local business owners by presenting trade area sales supply and demand data. Including residents, businesses, and high wage earning professionals working nearby, we estimate retail demand in the one-half mile trade area equals $160.4 million per year. Beverly Square will generate approximately $45.3 million in sales per year, which falls within the project’s expected market capture of $46 million, based on available retail square footage in the area. As an additional point, the new development will provide services not currently offered by existing establishments along South Santa Monica Blvd. Another factor that affects our project are the high cost of parking spaces. Based on our proposed NLA, Beverly Square only needs to provide 142 spaces. With a building footprint of 36,000 square feet, each level of underground parking is capable of sustaining 102 spaces (36,000 total square feet divided by 350 square feet per space). This results in building an entire second level for a need of only 40 spaces. As such, we propose a community benefit of 62 extra parking spaces. 47


Andy Swyck, Director of Economic Development at the Beverly Hills Chamber of Commerce, noted that the South Santa Monica Blvd. corridor was in need of increased activity, particularly later in the day due to the exodus of professionals from the area businesses. (Phone Interview on February 25, 2014). In an effort to work collaboratively with the City of Beverly Hills, the Chamber of Commerce, and local residents to achieve their goals for the area, Beverly Square would provide several key community benefits: •

Reinvigorating the South Santa Monica Blvd. commercial corridor as a lively “Main Street” destination with a variety of upscale retail opportunities in a beautifully landscaped outdoor setting. As it grows in recognition among the local residents and business community, we hope that the site could host seasonal festivals, and other public, community events.

Finally, perhaps one of the best opportunities that the Beverly Square project provides is for investors. The project requires an initial equity investment of $10,779,166 and the total development cost for the project comes to $44,619,362. The total value upon completion is $52,061,840, which generates $7,442,477 in equity value. The leveraged return on equity comes to 10.20 percent. If the investor chooses to sell the project on completion, she would receive a leveraged profit at nearly 70 percent of her initial investment. However, it would be more beneficial to keep the project for a ten-year period. Assuming a 3% increase in annual net operating income and a terminal cap rate of 7%, the year-on-year internal rate of return equals 20.92 percent on equity. The relative strength of the Beverly Hills commercial retail market makes the Beverly Square project a low risk, highly feasible investment opportunity for the right investor.

• The proposal of a bicycle lane and installment of bicycle racks encourages the city’s stated goals of growing smarter by increasing nonmotorized movement in the form of biking and walking. • Attracting upscale, specialty businesses to the area benefits the community by strengthening the local economy. Adding small-scale cafes like Starbucks, wellness facilities like Pure Barre and Yoga Works, and retail establishments such as Ted Baker, Papyrus, and Janie and Jack bolster the overall business community be adding consistent revenue stream to the area. Since Beverly Square is a purely commercial venture, it also achieves the City Planning Division’s stated goal of developing part of the remaining nine percent of vacant commercially zoned lots throughout the city.

6. CHALLENGES AND OPPORTUNITIES

48


CHAPTER 7:

CARTOGRAPHY


k

1.4

7010

Beverly Hills

Miles

Beverlywood 2.1

Pico-Robertson

5

10

20

40 Miles

Fairfax

±

±

Hancock Park

Mid-Wilshire

30

Beverly k Hills

West Hollywood

Metro LA County Hollywood

0

Mid-City

Carthay

Beverly Grove

West Hollywood

Hollywood Hills West

BEVERLY SQUARE LOCATION AND REGIONAL AREA

Beverly Crest

0.7

Cheviot Hills

Century City

Westwood

0.35

West Los Angeles 0

MAP 1

BEVERLY SQUARE

Site

LEGEND

Regional Location

k

0.5 mile radius

Primary Sub-market

Secondary Sub-market

Proposed Metro stop

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7. CARTOGRAPHY


0.1

Westwood

0.2

Century City

0.4

0.6 Miles

k

Beverly Hills

BEVERLY SQUARE NEIGHBORHOOD LEVEL - AERIAL PHOTOGRAPH

0

West Los Angeles

Âą

MAP 2

BEVERLY SQUARE

Site

LEGEND

Aerial Photograph

k

0.5 mile radius

Neighborhoods

Proposed Metro stop

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

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7. CARTOGRAPHY


0.1

Westwood

0.2

Century City

0.4

0.6 Miles

k

Beverly Hills

BEVERLY SQUARE NEIGHBORHOOD LEVEL - BUILDING FOOTPRINTS

0

West Los Angeles

Âą

MAP 3

BEVERLY SQUARE

Site

LEGEND

Building Footprints

k

0.5 mile radius

Neighborhoods

Proposed Metro stop

Vacant sites

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

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7. CARTOGRAPHY


0.1

Westwood

0.2

Century City

0.4

0.6 Miles

k

BEVERLY SQUARE NEIGHBORHOOD LEVEL - LAND USE

0

West Los Angeles

Beverly Hills

Âą

MAP 4

BEVERLY SQUARE

0.5 mile radius

Site

LEGEND

Land Use Map

k

Neighborhoods

Proposed Metro stop

Single Family Residential

Land Use

Multi-Family Residential

Commercial And Services

Other Commercial

Retail Stores And Commercial

General Office Use

Hotels And Motels

Heavy Industrial

Mixed Urban

Educational Institutions

Parks And Recreation

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7. CARTOGRAPHY


Westwood

k

Beverly Hills

MAP 5

Site

LEGEND

Zoning Map

BEVERLY SQUARE

k

0.5 mile radius

Neighborhoods

Proposed Metro stop

R-1x One-Family Residential Zone

R-1 One-Family Residential Zone

CITY OF BEVERLY HILLS

R-1.5x One-Family Residential Zone

R-1.5 x2 One-Family Residential Zone

R-1.7x One-Family Residential Zone

R-1.8x One-Family Residential Zone

R-4 Multiple Residential Zone

R-4 x1 Residential Income and Multiple Dwelling Zone

R-4 x2 Multiple Residential Zone

R-4-P Residential Parking Zone

RMCP Multiple-Family Residential-Commercial Parking Zone

C-3 Commercial Zone

C-3A Commercial Zone

C-3B Commercial Zone

C-3T-1 Commercial-Transition Zone

C-3T-2 Commercial-Transition Zone

Church Zone

C-5 Commercial Zone

S School

LOS ANGELES CITY

T-1 Transportation Zone

M272 - Real Estate Dev. & Finnc Winter 2014

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

M.PD.2 Mixed Use Planned Development Overlay Zone

CR-PD Commercial Retail Planned Development Overlay Zone

C-R Commercial-Retail Overlay Zone

Parks, Reservoirs, Government (Unzoned)

A1 Agricultural

Âą

RE20 Residential Estate

R2 Two Family Dwellings RD1.5 Restricted Density Multiple Dwelling

0.2

RD2 Restricted Density Multiple Dwelling R3 Multiple Dwelling R4 Multiple Dwelling RAS4 Residential/Accessory R5 Multiple Dwelling C2 Commercial C4 Commercial PF Public Facilities CCS Century City South Studio Zone

0.1

0.4

R1 One-Family Dwelling

Century City

0.6 Miles

BEVERLY SQUARE NEIGHBORHOOD LEVEL - ZONING

0

West Los Angeles

54

7. CARTOGRAPHY


0.6 Miles

½ ¾ ½ ¾ ½ ¾ ½ ¾ ½ ¾ ½ ¾ 0.4

Century City

½ ¾

½ ¾

½ ¾ ½ ¾ ½ ¾

Westwood

0.2

½ ¾ ½ ¾ ½ ¾ 0.1

k

Beverly Hills

½ ¾ ½ ¾ ½ ¾

BEVERLY SQUARE NEIGHBORHOOD LEVEL - TRANSIT CONNECTIONS

0

West Los Angeles

±

MAP 6

BEVERLY SQUARE

Site

LEGEND

Transit Connections

k

0.5 mile radius

Neighborhoods

Proposed Metro stop

Bus Stop

Metro Local

4

14

16

20

28

704

Metro Rapid

720

728

½ ¾ ½Bikeways (SCAG) ¾

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

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7. CARTOGRAPHY


Westwood

0.4

0.6 Miles

Be ve

El Rodeo Elementary School

Century City

Los Angeles Country Club

0.2

Westfield Shoppingtown Century City 0.1

rly H

ill

ol

Beverly Hills

±

CIty of Beverly HIlls City Hall Beverly Gardens Park

Good Shepherd Catholic School

h S ch o

sH ig

k

BEVERLY SQUARE NEIGHBORHOOD LEVEL - AMENITIES

0

West Los Angeles

MAP 7

BEVERLY SQUARE

Site

LEGEND

Local Amenities

k

0.5 mile radius

Neighborhoods

8 î

©

Corporate Headquarters

City Halls

Churches

Banking and Finance

Proposed Metro stop

?

Courthouses

Amenities

6

Farmers Markets

Chambers of Commerce

!

K { n

Sheriff and Police Stations

Schools / High Schools

Libraries

Golf Courses

¸ ² [ j " I n

Shopping Centers

Recreation Centers

Post Offices

Parks and Gardens

Museums and Aquariums

Health Clinics

P í

s

5 c

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

xb Ro ury

M272 - Real Estate Dev. & Finnc Winter 2014

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7. CARTOGRAPHY k Par


0.1

Westwood

st We

0.2

Be ver ly H ills

Century City

line am

0.4

ent 0.6 Miles

k

BEVERLY SQUARE NEIGHBORHOOD LEVEL - GEOLOGY

0

West Los Angeles

lt

Beverly Hills

Âą

MAP 8

BEVERLY SQUARE

Site

LEGEND

Geology Map

k

0.5 mile radius

Neighborhoods

Proposed Metro stop

Qay1

Alluvial gravel, sand and silt-clay, derived mostly from Santa Monica Mountains; includes gravel and sand of stream channels (Pleistocene)

Qay2

Alluvial gravel, sand and silt-clay, derived mostly from Santa Monica Mountains; includes gravel and sand of stream channels (Pleistocene)

Qao

Fault lines

Older alluvium of gray to light brown pebble-gravel, sand, silt and clay derived from Santa Monica Mountains; slightly consolidated (Holocene)

( (

SOURCE:Yerkes, R. F., 1997, Preliminary geologic map of the Beverly Hills 7.5 minute quadrangle, southern California: U. S. Geological Survey Open-File Report 97-256.

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

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7. CARTOGRAPHY

au af nic Mo ta Sa n


k

1.4

7010

Beverly Hills

Miles

Beverlywood 2.1

Pico-Robertson

5

10

20

k

30

Mid-Wilshire

±

±

Hancock Park

Fairfax

40 Miles

West Hollywood

Metro LA County Hollywood

0

Mid-City

Carthay

Beverly Grove

West Hollywood

Hollywood Hills West

BEVERLY SQUARE NEIGHBORHOOD LEVEL - EMPLOYMENT CENTERS

Beverly Crest

0.7

Cheviot Hills

Century City

Westwood

0.35

West Los Angeles 0

MAP 9

BEVERLY SQUARE

Site

LEGEND

Employment Centers

k

0.5 mile radius

Primary Sub-market

Proposed Metro stop

Employees per 100 residents

0.00

0.01 - 25.00

25.01 - 50.00

50.01 - 100.00

100.01 - 250.00

> 250.01

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

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7. CARTOGRAPHY


Beverly Crest

Westwood

West Los Angeles

Rancho Park

1.3

1.95 Miles

17,000

Mid-City

Âą

Carthay

Beverly Grove

Hollywood Hills West

Beverlywood

Pico-Robertson

1,400

11,376 80,000 Beverly Hills 5,700 3,100 13,952

Cheviot Hills

Century City

k

2,925

BEVERLY SQUARE NEIGHBORHOOD LEVEL - COMPARABLE RETAIL RENTAL PROPERTIES

27,000

0.65

Bel-Air

0.325

Sawtelle

65,500

0

MAP 10

BEVERLY SQUARE

Proposed Metro stop

Neighborhoods

0.5 mile radius

Site

LEGEND

Comparable Retail Rental Properties

k

Sq. Ft.

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

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7. CARTOGRAPHY


Beverly Crest

Westwood

West Los Angeles

Rancho Park

1.3

1.95 Miles

k

Beverlywood

Pico-Robertson

Mid-City

40,300

Âą

Carthay

Beverly Grove

30,000 70,259 27,000

Hollywood Hills West

1,900 Beverly Hills 6,000N/A 14,815

Cheviot Hills

Century City

94,000

358,881

BEVERLY SQUARE NEIGHBORHOOD LEVEL - PLANNED AND PROPOSED PROJECTS

0.65

Bel-Air

0.325

Sawtelle

260,000

0

MAP 11

BEVERLY SQUARE

Proposed Metro stop

Neighborhoods

0.5 mile radius

Site

LEGEND

Planned and Proposed Projects

k

Sq. Ft.

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

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7. CARTOGRAPHY


N

ic on

lvd

Du

nt ra

Dr

ille lev

450 Feet

ar Ch

150

lvd

aB

B ica on

M ta

M ta

n Sa

an SS

75

300

BEVERLY SQUARE SITE LEVEL - AERIAL PHOTOGRAPH

0

b Ro

bin

r sD

Âą

MAP 12

BEVERLY SQUARE

Aerial Photograph

LEGEND

Proposed site

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

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7. CARTOGRAPHY

vd Bl


N

ic on

lvd

Du

nt ra

Dr

ille lev

450 Feet

ar Ch

150

lvd

aB

B ica on

M ta

M ta

n Sa

an SS

75

300

BEVERLY SQUARE SITE LEVEL - BUILDING FOOTPRINTS

0

b Ro

bin

r sD

Âą

MAP 13

BEVERLY SQUARE

Entitlements

LEGEND

Proposed site

Vacant sites

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7. CARTOGRAPHY

vd Bl


N

ic on

lvd

Du

nt ra

Dr

ille lev

450 Feet

ar Ch

150

lvd

aB

B ica on

M ta

M ta

n Sa

an SS

75

300

BEVERLY SQUARE SITE LEVEL - LAND USE

0

b Ro

bin

r sD

Âą

MAP 14

BEVERLY SQUARE

Land Use Map

LEGEND

Proposed site

Land Use

Multi-Family Residential

Other Commercial

Hotels And Motels

Mixed Urban

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

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7. CARTOGRAPHY

vd Bl


N

ic on

lvd

Du

nt ra

Dr

ille lev

450 Feet

ar Ch

150

lvd

aB

B ica on

M ta

M ta

n Sa

an SS

75

300

BEVERLY SQUARE SITE LEVEL - ZONING

0

b Ro

bin

r sD

Âą

MAP 15

Proposed site

LEGEND

Zoning Map

BEVERLY SQUARE

ZONES:

R-4 Multiple Residential Zone

C-3 Commercial Zone

C-3A Commercial Zone

T-1 Transportation Zone

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

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7. CARTOGRAPHY

vd Bl


N

ic on

lvd

Du

nt ra

Dr

ille lev

450 Feet

ar Ch

150

lvd

aB

B ica on

M ta

M ta

n Sa

an SS

75

300

BEVERLY SQUARE SITE LEVEL - GEOLOGY

0

b Ro

bin

r sD

Âą

MAP 16

BEVERLY SQUARE

Geology Map

LEGEND

Proposed site

Qay1

Alluvial gravel, sand and silt-clay, derived mostly from Santa Monica Mountains; includes gravel and sand of stream channels (Pleistocene)

Qay2

Alluvial gravel, sand and silt-clay, derived mostly from Santa Monica Mountains; includes gravel and sand of stream channels (Pleistocene)

SOURCE:Yerkes, R. F., 1997, Preliminary geologic map of the Beverly Hills 7.5 minute quadrangle, southern California: U. S. Geological Survey Open-File Report 97-256.

Adam Monaghan Arfakshad Munaim Vicente Romero Carla Salehian

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7. CARTOGRAPHY

vd Bl

Beverly Square - Due Diligence Report  

Design proposal and financial and market analysis for a high-end neighborhood commercial development project.

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