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T TR EE HS offering memorandum

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FOR SALE

downtown urban retail


CONFIDENTIALITY DISCLAIMER

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Shaw Equity Inc. and Darvishian Investment Group and should not be made available to any other person or entity without the written consent of Darvishian Investment Group. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Shaw Equity Inc. and Darvishian Investment Group has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Shaw Equity Inc. and Darvishian Investment Group has not verified, and will not verify, any of the information contained herein, nor has Shaw Equity Inc. and Darvishian Investment Group conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. NON-ENDORSEMENT NOTICE Shaw Equity Inc. and Darvishian Investment Group is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Darvishian Investment Group, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Darvishian Investment Group, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. By accepting this Marketing Brochure you agree to release Shaw Equity Inc. and Darvishian Investment Group Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this property.

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TABLE OF CONTENTS

02 04 06 08 12 14 16 18 28 30

CONFIDENTIALITY DISCLAIMER EXECUTIVE SUMMARY PROPERTY HIGHLIGHTS FLOOR PLANS RENT ROLL FINANCIALS IDEAL TENANTS AREA OVERVIEW SANTA ANA HISTORY DEMOGRAPHICS

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EXECUTIVE SUMMARY

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INVESTMENT OVERVIEW

Investment Highlights

he Darvishian Investment Group is pleased to present for sale for the first time in 30 years, the historic Gilmker Block Building. Located on the hard signalized corner of 4th and Broadway, the property sits on what may be considered the best corner in Downtown Santa Ana. The location was given a 94 out of 100 walking score (Walker’s Paradise), one of the highest in Orange county. The property consists of a 9,897 square foot eight (8) unit retail building on a 9,200 square foot lot.

• 92.15 Linear Feet of Frontage on Fourth street, 100 Feet on Broadway

The offering is an opportunity for an investor to purchase and reposition a landmark piece of real estate in the heart of the city. Given the strong rental demand, the downtown market can achieve rents between $3.00 to $6.00 per square foot for quality retail space.

• Potential $360,000 Net Operating Income at 100% occupancy

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• Located on the best corner in Downtown Santa Ana (DTSA)

• Historic high character building - “Gilmaker Block” • Walking Score of 94 out of 100 (Walker’s Paradise) • 20’ High ceilings on ground floor units - Excellent opportunity for redesign • Exposed brick features throughout the building • Located in Downtown Zone - Very favorable zoning ordinance

Located in the Downtown (DT) zone of the city, the favorable zoning allows for a wide range of retail and office uses as well as second story live/work and multi-family uses. The DT zone also eliminates the need for on-site parking because of the close proximity of public city parking. The asset is perfectly positioned to attract good quality tenants paying premium rents because of the strong location of the property, favorable zoning and design of the building.

DOWNTOWN SANTA ANA ARTWALK

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PROPERTY HIGHLIGHTS LOCATION Address 302 W 4th St 304 W 4th St 306 W 4th St 306 1/2 W 4th St 308 W 4th St 308 1/2 4th St 320 Broadway 324 N Broadway City, State, Zip Santa Ana, CA 92701 County Orange INVESTMENT Price $5,250,000 Number of Units 8 Sale Type Retail Storefront Tenancy Multi-Tenant BUILDING Year Built Year Retrofitted Building Size Building Size w/bonus mezzanines LAND Lot Size Assessor’s Parcel Number Zoning

1920 1988 9,897 SF 12,032 SF

9,200 appx sf 398-591-05 SD84 (Downtown)

CLICK HERE FOR ZONING INFORMATION

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13,170 CARS DAILY


PROPERTY LOCATION OVERVIEW rtist, millennials, business men and women, foodies and urban buffs all are coming to DTSA for a genuine urban experience. The property has 92.15 linear feet of frontage on Fourth Street and 100 feet on Broadway, consisting of valuable ground floor retail suites. Downtown Santa Ana has become the hottest sub-market in Orange County for innovative concepts. DTSA is home to many chef inspired restaurants, unique bars, artist lofts, creative office space, clubs, art events, savory restaurants and coffee shops.

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Market Highlights • 32 restaurants within the Downtown Business District • Located near transportation hub, train station, bus lines and metered street parking • Cal State Fullerton Grand Central Art Center steps away • Close to Civic Center area- housing thousands of government, city , county, state and federal employees withing walking distance • Across the street from the Ronald Reagan Federal Courthouse and Starbucks Coffee

94 OUT OF 100 WALKING SCORE

• Dense 3-Mile Population of 356,593

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FLOOR PLANS FIRST FLOOR

SUITE 302 4TH ST

SUITE 304 4TH ST

SUITE SUITE 306 306.5 4TH ST 4TH ST

SUITE 308 4TH ST

SUITE 308.5 4TH ST

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BR OA DW AY

SUITE 324 BROADWAY

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AY DW OA BR

W 4TH STREET


FIRST FLOOR

RENTABLE SQUARE FOOTAGE 4TH STREET SUITE 302 VACANT SUITE 304 TOY STORE SUITE 306 KEBAB PLACE SUITE 306.5 VACANT SUITE 308 VACANT SUITE 308.5 VACANT

1,151 SF 2,307 SF 1,136 SF 1,078 SF 1,099 SF 1,008 SF

BROADWAY SUITE 324 TRAVEL AGENT 1,176 SF SUITE 320 OFFICE (2nd floor) 942 SF TOTAL SF

9,897 SF

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FLOOR PLANS SECOND FLOOR

N BROADW AY SUITE 320 & 324 BROADWAY AND 302 W 4TH ST

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SECOND FLOOR

2ND FLOOR SPACE

SUITE 308.5 SUITE 308

SUITE 306.5

BROADWAY SUITE 320 OFFICE TOTAL SF

942 SF 9,897 SF

MEZZANINE* SQUARE FOOTAGE SUITE 304-MEZZANINE* 781 SF SUITE 306-MEZZANINE* 211 SF SUITE 306.5-MEZZANINE* 254 SF SUITE 308-MEZZANINE* 428 SF SUITE 308.5-MEZZANINE* 461 SF TOTAL BONUS MEZZANINE* 2,135 SF TOTAL BUILDING SIZE 12,032 SF

*Mezzanines are not permitted

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RENT ROLL

302 W 4TH STREET

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MARKET RENT UNIT

SF

% of Building

Bonus Mezzanine

LEASE EXPIRATION

Monthly Rent

PSF

Monthly Rent

PSF

Annual

302

Vacant

1,151

11.63%

0

--

$0

$0.00

$6,331

$5.50

$75,966

304

Toy Store

2,307

23.31%

781

Month to Month

$4,500

$1.95

$5,768

$2.50

$69,210

306

Kebab Place

1,136

11.48%

211

-3-Year-

$2,950

$2.60

$3,408

$3.00

$40,896

306.5 Vacant

1,078

10.89%

254

--

$0

$0.00

$3,234

$3.00

$38,808

308

1,099

11.10%

428

--

$0

$0.00

$3,297

$3.00

$39,564

308.5 Salon

1,008

10.18%

461

Month to Month

$2,500

$2.48

$3,024

$3.00

$36,288

324

Travel Agency

1,176

11.88%

0

Month to Month

$2,500

$2.13

$3,528

$3.00

$42,336

320

Office

0

--

$0

$0.00

$1,413

$1.50

$16,956

$12,450

$30,002

$360,024

Vacant

942

9.52%

Total

9,897

100.00%

Total w/Mezzanine

12,032

2,135

Current Occupancy 56.86%

OPERATING EXPENSES Operating Expenses

Annual

PSF

Real Estate Taxes [1.11765%]

$58,677

$5.93

Special Assessments

$1,674

$0.17

Insurance

$3,960

$0.40

Repairs & Maintenance

$5,000

$0.51

$69,311

$7.00

Total

PHOTO IS NOT SUBJECT PROPERTY

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FINANCIALS

304 & 306 W 4TH STREET

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10-YEAR CASH FLOW ANALYSIS FISCAL YEAR 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Overall Economic Occupancy 57% 75% 100% 100% 100% 100% 100% 100% 100% 100% Total Square Feet Improvements 9,897 Stabilized FY 2019 Revenues $/SF/MO Scheduled Base Rent Gross Potential Rent $36 $360,024 $360,024 $360,024 $369,025 $378,250 $387,706 $397,399 $407,334 $417,517 $427,955 Absorption & Turnover Vacancy $0 $210,624 $90,006 $0 $0 $0 $0 $0 $0 $0 $0 Total Scheduled Base Rent $149,400 $270,018 $360,024 $369,025 $378,250 $387,706 $397,399 $407,334 $417,517 $427,955 Expense Reimbursements $7 $0 $53,023 $72,111 $73,553 $75,024 $76,525 $78,055 $79,616 $81,209 $82,833 EFFECTIVE GROSS REVENUE $44 $149,400 $323,041 $432,135 $442,578 $453,275 $464,231 $475,454 $486,950 $498,726 $510,788 OPERATING EXPENSES $7 $69,311 $70,697 $72,111 $73,553 $75,024 $76,525 $78,055 $79,616 $81,209 $82,833 ALL CASH NET OPERATING INCOME $36 $80,089 $252,344 $360,024 $369,025 $378,250 $387,706 $397,399 $407,334 $417,517 $427,955 10-YEAR IRR ACQUISITION & RESIDUAL SALE Market Price $(5,250,000) $7,132,590 Net Residual Value [1] 8.64% CASH FLOW BEFORE DEBT $(5,250,000) $80,089 $252,344 $360,024 $369,025 $378,250 $387,706 $397,399 $407,334 $417,517 $7,560,545 7.49% NOI Return Unleveraged (CAP) 1.53% 4.81% 6.86% 7.03% 7.20% 7.38% 7.57% 7.76% 7.95% 8.15% 8 Yr Average CAP RATE Down Payment $(2,625,000) 50% Debt Amount $2,625,000 50% Coupon Rate 5.25% 5.25% 5.25% 5.25% 5.25% 5.25% 5.25% 5.25% 5.25% 5.25% Amortization 25 Debt Service -$137,813 -$137,813 -$190,944 -$190,944 -$190,944 -$190,944 -$190,944 -$190,944 -$190,944 -$190,944 Interest $137,813 $137,813 $137,813 $137,813 $137,813 $137,813 $137,813 $137,813 $137,813 $137,813 Future Value $2,625,000 $2,625,000 $2,571,868 $2,515,947 $2,457,090 $2,395,143 $2,329,944 $2,261,322 $2,189,097 $2,113,080 Principal Paydown $0 $0 $53,132 $55,921 $58,857 $61,947 $65,199 $68,622 $72,225 $76,017 Net Income -$57,723 $114,531 $169,080 $178,080 $187,306 $196,762 $206,455 $216,390 $226,573 $237,011 8 Yr Average Cash on Cash Return -2.20% 4.36% 6.44% 6.78% 7.14% 7.50% 7.86% 8.24% 8.63% 9.03% Total Return -$57,723 $114,531 $222,212 $234,002 $246,163 $258,709 $271,654 $285,012 $298,798 $313,028 Stabilized Return Total Return % -2.20% 4.36% 8.47% 8.91% 9.38% 9.86% 10.35% 10.86% 11.38% 11.92% 9.41% Depreciation Schedule $99,684 $99,684 $99,684 $99,684 $99,684 $99,684 $99,684 $99,684 $99,684 $99,684 Taxable Income -$157,407 $14,848 $122,528 $131,529 $140,754 $150,210 $159,903 $169,838 $180,021 “Estimated Additional Tax Benefit of Writing off Interest and Depreciation” $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 Income as compared to non-real estate $37,277 $209,531 $264,080 $273,080 $282,306 $291,762 $301,455 $311,390 $321,573 $332,011 % Return as compared to non-real estate 1.42% 7.98% 10.06% 10.40% 10.75% 11.11% 11.48% 11.86% 12.25% 12.65%

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@ Darvishian Group IDEAL TENANTS

306 & 304 W 4TH STREET

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p IMAGINE THE POSSIBILITIES...

Ideal Tenants:

This prime downtown trendy Santa Ana corner has lots of foot traffic for lunch, dinner and late night. It is located across from Starbucks, Creative Lofts & Good Beer Co and next to the DTSA Trolley drop-off.

barber shop

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AREA OVERVIEW

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AREA HIGHLIGHTS fficials with The City of Santa Ana have stated that in the coming years they will continue to expand its growth in an effort to compete with adjacent cities looking to capture an audience looking to live in a true downtown setting. Some of these goals include:

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• Attracting high-end/boutique hotels • Continuing to convert old office buildings (Adaptive Reuse) to upscale housing and creative office space • Converting parking lots and underutilized properties into ground-up residential projects • Redeveloping the 3rd/Broadway parking structure into a mixed-use (housing or hotel) development • Implementing a streetcar connecting the Santa Ana Regional Transportation Center (SARTC) to Downtown (approved by OCTA and planned to open 2019) • One-Broadway Plaza • From eclectic ethnic eats to elevated dining, DTSA is OC’s favorite food neighborhood. Check out www.EatDTSA.com for a guide to downtown’s favorite food establishments.

CLICK HERE FOR MORE INFO CLICK HERE FOR LINK

306 & 304 W 4TH STREET

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DOWNTOWN PARKING

PARKING STRUCTURES AT BROADWAY AND 3RD ST

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arking Structure

W 3RD ST

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REET

W 4T

H ST

REET

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DOWNTOWN TRANSPORTATION

W 5TH ST

W SANTA ANA BLVD

OC STREETCAR APPROVED

W 4TH ST

W 3RD ST

W 2ND ST

W 1ST ST

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MORTIMER ST

N FLOWER ST

W SANTA ANA BLVD

FRENCH ST

W CIVIC CENTER DR MAIN ST

N SYCAMORE ST

N BROADWAY

N ROSS ST

CLICK HERE FOR MORE INFO


OCSTREETCAR xpected to begin operations in 2021, the OC Streetcar will link the bustling Santa Ana Regional Transportation Center (SARTC), which provides regional rail, OCTA bus, and intercity and international bus services, to a new multi-modal hub at Harbor Boulevard/Westminster Avenue in Garden Grove. Along the way, OC Streetcar will connect directly with 18 OCTA bus routes. OC Streetcar will serve the historic downtown Santa Ana and Civic Center which includes government offices, federal, state and local courthouses, unique restaurants and shops, an artists’ village, several schools and a variety of community enrichment organizations.

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DOWNTOWN RESTAURANTS

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CLICK HERE FOR LINK

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DOWNTOWN SANTA ANA

STARBUCKS COFFEE ACROSS THE STREET ON W 4TH

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WEST END THEATER -BUILDING COFFEE S


SHOP ON W 4TH ST

ACROSS THE STREET ON BROADWAY

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SANTA ANA HISTORY 4TH & BROADWAY HISTORY ccording to the Santa Ana Office of Historic Preservations survey and research, the southwest corner of N Broadway and W 4th Street is called the Gilmaker Block and it was either an extensive remodel of an 1888 brick building or the construction of a new building on an older foundation. From the 1890s to 1909, an intricate Queen Anne facade covered the 302-306 portions of the building and faced onto Broadway, and the corner shops were occupied by grocery and produce businesses.

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Edwin C. Thorne of Los Angeles designed the new facade in 1920. By 1929, McCoy Drug Company occupied 302 W 4th , where it continued until 1940. At that time it changed to Gorzman’s Drugs. At the west end of the building, 308 W. 4th was a restaurant after 1916 and continued as such under a variety of names until 1934. The H.W. Thomas shoe store occupied the space for many years, starting in 1939. This building was listed in the National Register of Historic Places in 1987 as a contributor to the Downtown Historic District, following completion of a certified rehabilitation. Under the regulations implementing the California Resister of Historical resources, the building is also listed in the California Register.

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BANK OF ITALY MID 1900s

MODERN DAY 2018


As a well-articulated example of a building type prevalent during the first quarter of the 20th century, the Gilmaker Block satisfies Criterion 1 for inclusion in the Santa Ana Register of Historical Property. Additionally, the property has been categorized as “Key” because it has a “distinctive architectural style and quality” and “is characteristic of a significant period in the history of the City of Santa Ana.

4TH STREET & BROADWAY EARLY 1900s

SANTA ANA HISTORY Traveling through time in Santa Ana you would have seen tremendous changes between the mid 19th and early 20th centuries. Santa Ana had long been the epicenter for what is now Orange County. With the introduction of the railroads south from Los Angeles, Santa Ana grew from a small agricultural town to a flourishing city by the early 1920’s. Santa Ana reflects many of the changes that were occurring throughout America and the development of the West. Industrialization, urbanization, and innovation are seen throughout the fabric that makes up Santa Ana.

Information gathered from the City of Santa Ana, City survey report and Santa Ana Historic Survey. CLICK HERE FOR MORE INFO

DOWNTOWN 1900’s

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DEMOGRAPHICS

POPULATION

MEDIAN HH INCOME

POPULATION GROWTH

4TH AND BROADWAY

356,593

$53,396

3.86%

94 OUT OF 100

3 MILE RADIUS

3 MILE RADIUS

Walking Score

3 MILE RADIUS

(Walker’s Paradise)

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SANTA ANA, CALIFORNIA anta Ana is the county seat and second most populous city in Orange County, California. The United States Census Bureau estimated its 2011 population at 329,427, making Santa Ana the 57th most-populous city in the United States. Santa Ana is also the 4th highest density in the nation per square mile.

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CORPORATE HEADQUARTERS Santa Ana is the corporate headquarters of several companies including Behr Paint, CoreLogic, Corinthian Colleges, First American Corporation, Greenwood & Hall, Ingram Micro, The Orange County Register, SchoolsFirst Federal Credit Union, STEC, TTM Technologies, beverage company Kern’s, and Wahoo’s Fish Taco. It also houses major regional headquarters for the Xerox corporation, Ultimate Software, and T-Mobile. Nonprofits based in Santa Ana include Open Doors. ECONOMY Santa Ana is part of a metropolitan area which includes Los Angeles and Long Beach. When it comes to gross metropolitan product of U.S. metro areas, Los Angeles-Long Beach-Santa Ana, CA is ranked number two in 2013 with a GMP of $792.2 billion. When gross domestic product (GDP) and gross metropolitan product (GMP) for country or metro area were compared, Los Angeles-Long Beach-Santa Ana, CA ranked number 20 for their 2013 numbers. The ranking for Santa Ana was higher than both Saudi Arabia and Switzerland, which ranked 21 and 22 respectively. The estimated annual growth rate of United States metro area economies from 2013-2020 is 2.9 percent with $686.5 billion in 2013 and an estimated $838.2 billion in 2020.

www.downtown-santaana.com

DEMOGRAPHICS 1 MILE

3 MILE

5 MILE

62,959

356,593

707,347

POPULATION 2021

65,444

370,367

736,042

MEDIAN HOUSEHOLD INCOME

$39,344

$53,396

$60,351

3.95%

3.86%

4.06%

$384,296

$377,058

$451,360

4.20

4.00

3.60

POPULATION 2016

POPULATION GROWTH MEDIAN HOME VALUE AVG HOUSEHOLD SIZE

© Darvishian Group 2018. Information deemed reliable but not guaranteed. *This information is being provided by www.downtown-santaana.com.

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FOR MORE INFORMATION CONTACT: DARVISHIAN GROUP CalBRE Broker #01915377 www.darvishiangroup.com 600 Anton Boulevard, 11th Floor Costa Mesa, CA 92626

Pasha Darvishian Managing Partner CalBRE #01397162 Pasha@darvishiangroup.com 949.396.1075 Direct

Jon Hauso Vice President Investments CalBRE # 02003482 Jon@darvishiangroup.com 949.396.1028

4th & Broadway  
4th & Broadway