The Preston Miracle Mile

A 169-Unit Value-add Opportunity in Los Angeles’ Miracle Mile

Investment Sales DERREK OSTRZYZEK DRE #01984295 310.924.9348 derrek.ostrzyzek@berkadia.com TOM MORAN JR. DRE #01201310 714.269.8380 tom.moran@berkadia.com MIKE MURPHY DRE #01241878 949.242.4073 mike.murphy@berkadia.com RACHEL PARSONS DRE #01335449 858.945.0992 rachel.parsons@berkadia.com

Mortgage Banking DAVID BLEIWEISS Managing Director 949.622.9263 david.bleiweiss@berkadia.com JACK HUNSICKER Director, Mortgage Banking 949.622.9221 jack.hunsicker@berkadia.com

Executive Summary

04

Property Details

14

Location

32

Economy

42

Rental Market

50

Underwriting

54

Rent Comps

60

executive summary 4

T H E P R ES TO N M I R ACL E M I L E

E x ec u t i ve S umma r y

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THE PRESTON RESIDENT DEMOGRAPHICS HOUSEHOLD INCOME

$148,277 AVERAGE

22%

RENT-TO-INCOME

COMPELLING VALUE-ADD OPPORTUNITY Miracle Mile is an infill, supplyconstrained submarket in the midst of a renaissance that is generating

N O TA B L E E M P L O Y E R S

incredible demand for luxury rental product. With current ownership having recently invested heavily in curing deferred maintenance and renovating common areas, The Preston offers investors the most efficient way to satisfy this demand through a thoughtful renovation strategy of unit interiors.

Newer properties within walking distance are proving out as much

INDUSTRY BREAKDOWN

as $1,000 in rent headroom, offering investors the opportunity to drive rents by completing a unit Professional Services Entertainment/Media Hospitality/Customer Service

would appeal to LA’s high-income,

Self-Employed/Other

luxury-seeking renters.

Government/Education Healthcare/Medical Services

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T H E P R ES TO N M I R ACL E M I L E

interior renovation program that

SIGNIFICANT BARRIERS TO ENTRY

OUTPERFORMING MARKET FUNDAMENTALS

With escalating construction costs,

Since 2012 the Mid-Wilshire

a lack of available land, and a

submarket occupancy averaged

notoriously onerous entitlement

96.1% and annual rent growth

process, the Mid-Wilshire market

averaged 4.3%, which was higher

has one of the highest barriers

than the Los Angeles market as

to entry of any submarket in the

a whole (3.9%). With employees

nation. In fact, over the past 5 years

returning back to the office, a new

the submarket has only seen the

owner has the opportunity to take

development of two institutionally

advantage of the submarket’s

sized apartment communities (One

strong rent growth that will

Museum Square and Vision on

average 4.3% annually over the

Wilshire), both of which are high-

next three years. The property is

rise construction. With no projects

currently seeing positive rent

under construction, The Preston

momentum, with recent lease

presents a unique opportunity

tradeouts averaging +17.4%

to not only gain access to this

over the last 12 months.

exclusive submarket, but also to acquire quality podium construction asset at well-below today’s replacement cost.

BULLS-EYE LOCATION WITH 94 WALK SCORE Located at the geographic center of Los Angeles, Miracle Mile is just four miles from the myriad of jobs, retail and entertainment in Beverly Hills, West Hollywood, Hollywood and Century City.

Additionally, with a Walk Score of 94, the property is just one block from Ralphs and Rite Aid; two blocks from LA’s renowned “Museum Row”; three blocks from major media and entertainment companies like CBS Radio, Sundance Institute and SAG-AFTRA; and within a 15-minute walk of The Grove, LA’s premier 600,000 sq. ft. outdoor lifestyle center. By 2024, residents will have two brand-new metro stations within a few blocks that will take them to Downtown in under 15 minutes thanks to the $9.5 billion Metro Purple Line extension currently under construction.

E x ec u t i ve S umma r y

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after

before

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T H E P R ES TO N M I R ACL E M I L E

Unit Interior Renovation Strategy There is no question that a well-executed renovation of The Preston’s unit interiors would generate substantially higher rents. 12% of units are in original 1989 form and 88% of units interiors underwent a modest renovation program that was conceived almost 10 years ago. A new owner has the opportunity to implement a comprehensive interior renovation strategy across 100% of units that would transition The Preston from a property geared toward “2010 renters” to one that attracts LA’s high-income renters seeking luxury living in a hip, urban environment.

Cabinets Install modern shaker-style cabinet doors with soft-close hinges

Pendant Lights Install contemporary pendant lighting fixtures

Faucet Add undermount sink with high-end goose neck faucet

Backsplash Add modern full-length tile backsplashes

Appliance Package Upgrade stainless steel appliance packages

Countertops Replace existing counters with thick marble-style countertops with waterfall edge

E x ec u t i ve S umma r y

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miracle mile ON THE RISE

There’s over a billion dollars worth of capital pouring in to major commercial developments within a few blocks of The Preston

$750 MILLION LACMA EXPANSION

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LACMA’s expansion project, designed by Peter Zumthor, is

$388 MILLION ACADEMY MUSEUM OF MOTION PICTURES

currently underway and will open in 2024. The 350,000

Completed in 2021, the Academy Museum of Motion

sq. ft. additional space will house LACMA’s permanent art

Pictures is the world’s premier movie museum. Located

collection. Slated for completion in 2024, the two-story

two blocks away from The Preston, the 300,000 sq.

edifice will bridge over Wilshire Boulevard, containing

ft. museum is expected to attract more than 850,000

350,000 square feet of space within.

visitors annually.

T H E P R ES TO N M I R ACL E M I L E

PROPOSED WILSHIRE COURTYARD REDEVELOPMENT

LA BREA TAR PITS REVAMP

METRO PURPLE LINE EXTENSION

Onni Group is pursuing a redevelopment project that would more

The Natural History Museums of LA County

Construction is well underway on the

than double the existing office space at the Wilshire Courtyard

announced that it would be undertaking a major

$9.5 billion Metro Purple Line extension

complex located two blocks from The Preston. Plans call for the

new Master Plan and renovation process for the

that will ultimately connect Westwood to

construction of two high rise office towers totaling 2.34 million

La Brea Tar Pits, including the existing museum,

Downtown along Wilshire Boulevard in

sq. ft. of office space. Upon completion, the new office complex

excavation sites, and other parts of the 13-acre

under 25 minutes. In addition to delivering

would put Miracle Mile on the map as having the tallest building in

site where the institution is located. The winning

a brand-new metro station within a few

LA west of Downtown.

concept, called “La Brea Loops and Lenses,” would

blocks of The Preston, the expansion

include a one-kilometer walking path connecting

project is also serving as a catalyst for

the Page Museum, the excavation pits, and the

accelerated growth in Miracle Mile, spurring

iconic lake pit and mastodons.

increased private sector investment, economic growth, and rental demand.

E x ec u t i ve S umma r y

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T H E P R ES TO N M I R ACL E M I L E

The Preston is a well-maintained 169-unit apartment community that was built in 1989.

The podium-style property features great

the property

modern physical attributes such as ninefoot ceilings, in-unit washers and dryers, and central air conditioning. Current ownership recently invested heavily in upgrading all of the property’s common area amenities, bringing them more in-line with modern properties in the submarket. The property also has a number of unique and highly desirable features like gas fireplaces in the majority of units, a generous parking ratio (2.0 spaces per unit), and vaulted ceilings on top floor units—some of which offer views of the iconic downtown skyline.

Site Address

630 Masselin Avenue Los Angeles, CA 90036

Year Built

1989

No. of Apartments

169

Acreage

1.55

Average Apt. Size

916 Sq. Ft.

Net Rentable Sq. Ft.

154,818

No. of Buildings

1

Residential Stories

4

No. of Elevators

3

Parking Type

two-level podium garage

Total Residential Parking Spaces

336

Residential Parking Ratio

2.0:1

Walk Score Assessor’s Parcel Number

94 5508-014-037

The P r ope r t y

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MIRACLE MILE SINGLE FAMILY HOMES AVG. SALES PRICE $2,100,000

5670 WILSHIRE BOULEVARD 445,000 SQ. FT OF OFFICE

WILSHIRE COURTYARD 1M SQ. FT. OF OFFICE

SAG-AFTRA PLAZA 530,000 SQ. FT. OF OFFICE

WIL

E SHIR

BOU

L E VA

RD

HOU

SER

BOU

LEV

ARD

the building The Preston is a podium-style apartment community consisting of four stories of wood construction above a two-level, concrete parking garage. The controlled-access building is served by three elevators, which also serve the two parking levels. The property has frontage on both Masselin Avenue and Hauser Boulevard, with the main entrance to the property located off of Masselin Avenue. Current ownership recently painted the exterior of the building in addition to curing deferred maintenance throughout the property.

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T H E P R ES TO N M I R ACL E M I L E

Parking

The Preston has a total of 421 parking spaces located in a

Parking Type

two-story podium parking garage. 336 of the spaces are

Single

reserved for residential uses, providing a generous parking

Tandem

# of Spaces 92 236 (118 lines)

ratio of 2.0 per apartment. The remaining 85 spaces

Guest

3

are allocated to a neighboring office tenant through an

EV Charging

4

Handicap

1

easement. These spaces have a separate parking entrance off of Hauser Boulevard. For residents, the secured structure has three ingress and egress points, two off of Masselin Avenue and one off of Hauser Boulevard, each accessible via a key fob remote.

Total

336

Spaces Per Unit

2.0:1

Spaces Per Bedroom

1.3:1

Note: Not included in the above parking total are the 85 spaces in the parking structure that are allocated to a neighboring office tenant through an easement. These spaces are able to be accessed through a separate entrance off of Hauser Boulevard.

PROPERTY The P r ope r t y 17 17

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T H E P R ES TO N M I R ACL E M I L E

Unit Interiors

+1427O

• Quartz countertops in kitchens and bathrooms • 9-foot ceilings (vaulted on 4th floor) • Stackable washers and dryers • Stainless steel kitchen appliances including built-in microwaves

• Espresso or cherry wood kitchen cabinetry • Gas ranges

• Plank wood-style flooring throughout • Central A/C and heating • Gas fireplaces in majority of homes • Breakfast bars • Private patios or balconies

Unit Mix Apt. Type

Sq. Ft.

Qty

% of Apts.

Studio

486

1

1%

Studio

525

28

17%

Studio

585

1

1%

1BD/1BA

730

12

7%

1BD/1BA

742

36

21%

2BD/2BA

930

4

2%

2BD/2BA

945

4

2%

2BD/2BA

1,000

4

2%

2BD/2BA

1,113

15

9%

2BD/2BA

1,132

6

4%

2BD/2BA

1,134

2

1%

2BD/2BA

1,160

24

14%

2BD/2BA

1,180

24

14%

2BD/2BA

1,270

8

5%

Totals

154,818

169

Avg.

916

Studio 18%

1bd/1ba 28%

2bd/2ba 54%

The P r ope r t y

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T H E P R ES TO N M I R ACL E M I L E

Community Amenities • Swimming pool and spa • Poolside lounge with seating areas and barbecues • 24-hour fitness center with weight training and cardio equipment • Business center with computers and printer services • Resident lounge with multiple gathering spaces and a coffee bar • Outdoor lounge with seating areas and TVs • Dog park • Package concierge • Controlled access building

The P r ope r t y

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Upgraded

AMENITIES

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T H E P R ES TO N M I R ACL E M I L E

The P r ope r t y

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site plan 24

T H E P R ES TO N M I R ACL E M I L E

The P r ope r t y

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floor PLANS

STUDIO | 486 AVG. SQ. FT. | 1 APT.

STUDIO | 525 AVG. SQ. FT. | 28 APTS.

STUDIO | 585 AVG. SQ. FT. | 1 APT.

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T H E P R ES TO N M I R ACL E M I L E

1BD/1BA | 730 AVG. SQ. FT. | 12 APTS.

1BD/1BA | 742 AVG. SQ. FT. | 36 APTS.

The P r ope r t y

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2BD/2BA | 930 AVG. SQ. FT. | 4 APTS.

2BD/2BA | 945 AVG. SQ. FT. | 4 APTS.

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T H E P R ES TO N M I R ACL E M I L E

2BD/2BA | 1,000 AVG. SQ. FT. | 4 APTS.

floor PLANS

2BD/2BA | 1,113 AVG. SQ. FT. | 15 APTS.

The P r ope r t y

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the location 32

T H E P R ES TO N M I R ACL E M I L E

Miracle Mile is one of LA’s most geographically central neighborhoods, offering residents an unparalleled level of connectivity throughout the city. The neighborhood is centered on LA’s main thoroughfare, Wilshire Boulevard, which connects Downtown to Westside.

Preston residents are located in the very heart of Miracle Mile and can reach Beverly Hills, Hollywood, Century City, Downtown and other neighborhoods in a short 10- to 20-minute drive.

This affluent community has long been known for its pedestrian-friendly streets, premium retail offerings, as well as its popular Museum Row – housing four of LA’s most iconic museums. Additionally, with homes in the neighborhood routinely selling in the $2 to $4 million dollar range, Miracle Mile has easily become one of LA’s most sought-after residential enclaves.

In addition to the neighborhood’s centrality and exceptional amenities, Miracle Mile has become a hotbed of economic activity. The primary catalyst for the area’s resurgence is the Purple Line extension, which will ultimately connect Downtown to Westside, adding seven new stations, two of which will be within a few blocks of The Preston. The continuation of Miracle Mile’s prosperity is inevitable and this location will continue to be a popular and sought-after neighborhood for years to come.

The L o c at i on

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ALL SEASON BREWING CO (0.7 mi)

UOVO MID WILSHIRE (0.8 mi)

Housed in a historic 1930s-era Firestone tire shop in Miracle Mile, All

Every neighborhood in every great city deserves a top-notch Italian

Season Brewing spent four years transforming this long-dormant 13,000

bistro, and Uovo fits that bill exactly. Lele Massimini, co-founder of

sq. ft. car service station into one of the most popular drinking and dining

Sugarfish, is the mastermind behind Uovo which serves up some of

spots in all of LA. Decorated with tires, tools, and memorabilia, it feels as if

the best handmade pastas imported straight from Italy. Eater calls

the building is a lived-in mechanic’s museum, welcoming its own evolution

Uovo “LA’s Best Affordable Pasta Restaurant” and its Santa Monica

while celebrating its history.

outpost received high praise from LA Times critic Jonathan Gold.

T H E P R ES TO N M I R ACL E M I L E

EAT & drink

THE SYCAMORE KITCHEN (1.1 mi)

YUKO KITCHEN (0.3 mi)

Sycamore Kitchen is not your run-of-the-mill corner bakery. After six

Walking into Yuko Kitchen is like walking into a jungle oasis with

years of running their Michelin-starred restaurant, Karen and Quinn

a profusion of plants hanging from the ceilings and adorning

Hatfield opened Sycamore Kitchen on La Brea and its quickly become

the outdoor patio. The colorful and quirky restaurant serves up

a neighborhood staple serving up house-made pastries, a world-class

outstanding Japanese comfort fare with big flavors that has

coffee program, and an exceptional brunch menu.

helped make it one of the most popular restaurants in LA.

The L o c at i on

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all the

SHOPS

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T H E P R ES TO N M I R ACL E M I L E

600,000 SQUARE FEE T OF RE TAIL JUST A 15 MINUTE WALK FROM THE PRESTON

0

The Preston is central to some of the best retail amenities in Los Angeles, with over 1.2 million sq. ft. of retail in Miracle Mile alone. For everyday grocery needs, the property is within a mile of two farmers markets, as well as a number of grocery stores like Lassens Natural Foods, Whole Foods, Trader Joe’s and a Ralphs that is directly across the street from the property. As for high-end retail, residents are a short distance away from popular destinations like The Grove (1 mi.), Larchmont Village (2.5 mi.) and Sunset Plaza (3.5 mi.).

THE GROVE , LA’s premier 600,000 sq. ft. outdoor lifestyle center, is just a short 15-minute walk from The Preston and will transport you to a shopper’s paradise.

The prominent fashion destination will keep you occupied for hours with its endless mix of retail, restaurants and entertainment. Take a ride on the trolley down Main Street, go see an IMAX film at the theatre, or stop at La Piazza for an Italian meal in the LA sunshine. The Grove offers many luxury brands—Nordstrom, Coach, Nike and RayBan are just a few of the many that residents have access to.

The L o c at i on

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ride and

EXPLORE

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T H E P R ES TO N M I R ACL E M I L E

Hollywood/ Vine

HOL LYWOOD BLVD

Hollywood/ Highland

WEST HOLLYWOOD

SAN

MIRACLE MILE

WEST LA RE HI

LS

WI

26th St/ Bergamot

Palms

Expo/ Sepulveda

Expo/ Bundy

La Cienega/ Jefferson Culver City

Downtown Santa Monica

DY BUN

17th St/ SMC

Metro Purple Line

Westwood/ Rancho Park

Wilshire/ Fairfax

LA CIENEGA

CENTURY CITY

BEVERLY DR

LVD DB OO STW WE

Westwood/ VA Hospital

SANTA MONICA

Wilshire/ La Cienega

Century City/ Constellation

405

WESTERN

Vermont/ Beverly

WINDSOR SQUARE

WILSHIRE CENTER Wilshire/ Western

Wilshire/ La Brea

Wilshire/ Normandie

OLYM

PIC

CRE NSH AW

Westwood/ UCLA

BEVERLY BLVD

HANCOCK PARK

TE

Wilshire/ Rodeo

EN VIC

WESTWOOD

UCLA

Vermont/ Santa Monica

VINE

LA BREA

FAIRFAX

BEVERLY HILLS

Metro Expo Line Extension (Opened May 2016)

Vermont/ Sunset

HOLLYWOOD

PICO

VERMONT

SE T S UN

Metro Purple Line Extension Alignment & Station (Expected to Open 2025)

Hollywood/ Western

SANTA MONICA BLVD

HIGHLAND

Metro Purple Line Extension & Station (Expected to Open 2023)

LN CO LI N

101

Wilshire/ Vermont

Wilshire/ Vermont

KOREATOWN VENICE BLVD

MID-CITY

10 Expo/ La Brea

Expo/ JEFFERSON Crenshaw

Expo/ Western

Expo/ Vemont

Farmdale Expo Park/ USC

CULVER CITY

MAR VISTA

11

The $9.5 billion Metro Purple Line Extension project is currently underway, which will connect Downtown to Westside along Wilshire Boulevard in under 25 minutes. The extension will create seven new stations, with two located directly in Miracle Mile, just a few blocks from The Preston (Wilshire/La Brea and Wilshire/Fairfax stations). By 2024, residents will be able to reach Downtown in under 15 minutes via a ride on the new Purple Line.

Bike & Scooter

E

LA METRO RAIL MAP Existing Metro Rail and Station

Rideshare bikes and scooters are just a few of the modes of transportation available in this area. Grab one of these ride options right at The Preston’s doorstep and be free to enjoy a short scooter or bike ride to many of LA’s neighborhoods.

The L o c at i on

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Top Row (L to R)

Academy Museum of Motion Pictures Residents can catch a show at El Rey Theater, four blocks away from The Preston. The historic art deco venue has hosted famous artists like Lana Del Rey, Jack White and Meghan Trainor.

The Preston is situated in the ultimate live-work-play environment. Conveniently located in Miracle Mile’s “Museum Row,” residents can enjoy LACMA, The Petersen Automotive Museum, Academy Museum of Motion Pictures, La Brea Tar Pits, and countless other entertainment options.

There are multiple parks surrounding the property that give residents access to beautiful public green space. Residents can also catch a show at the El Rey Theatre steps away from their front door, or take a workout class at the exclusive neighborhood Equinox Gym just down the street.

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T H E P R ES TO N M I R ACL E M I L E

&

LACMA’s “Urban Light” installation on Miracle Mile has been an LA landmark for Angelinos and tourists alike since 2008.

The L o c at i on

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T H E P R ES TO N M I R ACL E M I L E

major job hubs

(20 MINUTES) Located at the geographic center of Los Angeles, Miracle Mile boasts incredible access to LA’s most prominent employment centers, and offers The Preston residents a level of centrality that’s not easy to come by in LA. In just 10 to 20 minutes, residents can access jobs in Hollywood/West Hollywood, Beverly Hills, Century City, Culver City, Westwood, West Hollywood, Santa Monica and Downtown LA.

The Ec onom y

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Downtown Los Angeles Koreatown

FUTURE WILSHIRE/LA BREA METRO PURPLE LINE STATION

M

Miracle Mile

WILS HIRE BOU L E VA RD

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T H E P R ES TO N M I R ACL E M I L E

Widely known as the epicenter of the entertainment capital of the world, Hollywood is home to the region’s greatest economic drivers—the media and entertainment industries. Every component of the TV, film, media and entertainment industries is located within this region, with major companies like Netflix, MTV, BET, Comedy Central and VH1—all taking up sizable footprints within the area.

Beginning with the delivery of the Metro Red Line to Hollywood in the early 2000s, Hollywood has been met with a full-scale revitalization. This triggered an uptick in demand for new Class A office and made Hollywood a hotbed for office development in LA. Since 2015, 2.3 million sq. ft. of office space has been added to the submarket, including Kilroy’s 355,000 sq. ft. Academy on Vine development, Hudson Pacific’s 328,000 sq. ft. Epic tower, and the 500,000 sq. ft. ICON creative office tower at Sunset Bronson Studios. This demand driven by content and media companies only continues to surge with several major office developments currently proposed, including most notably The Star, which was recently approved for an 18-story tower on the Sunset Gower Studios lot.

With a Hollywood renaissance in full effect and companies scrambling for office space within the area, not only will it bring thousands of new jobs within 10 minutes of The Preston, but Miracle Mile is poised to see a migration of new media and tech

Proposed $500 million development The Star (10 min) would sit near the intersection of Sunset Boulevard and Gower Street.

hollywood (10 MINUTES)

tenants within the corridor.

AC AD E MY O N V I NE In early 2021, Netflix moved into their newest Hollywood office at th Academy on Vine with 350,000 sq. ft. of space. that they preleased in 2018.

The Ec onom y

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westside LA (20 MINUTES)

Westside LA is home to the prominent employment corridors of Westwood/Century City, Beverly Hills, Santa Monica, Culver City, and Brentwood, all of which are home to an impressive lineup of corporate heavyweights. From some of the nation’s premier investment banks (Goldman Sachs and Houlihan Lokey), to top-notch law firms (O’Melveny & Myers and Latham & Watkins), as well as tech giants (Amazon, Google, Facebook, Yahoo!, and Snapchat), Westside LA houses roughly 500,000 jobs.

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This year Amazon leased 200,000 sq. ft. at Water

Amazon recently moved into 530,000

Garden Complex in Santa Monica and announced it

sq. ft. of the revamped and expanded

would be adding 1,000 corporate and tech jobs.

Culver Studios in Culver City

T H E P R ES TO N M I R ACL E M I L E

Amazon recently moved into 530,000 sq. ft. of the revamped and expanded Culver Studios in Culver City

Carmel Partners is under construction on Alloy, a 35-story, 105,000 sq. ft. office tower in Downtown’s

With over 500,000 workers, 13,000 businesses

Arts District.

and 36 million sq.ft. of office space, Downtown LA is Southern California’s largest employment center. It is home to the country’s most

downtown LA (20 MINUTES)

prestigious law firms, Fortune 500 companies and consulting firms including the Big Four (Deloitte, PricewaterhouseCoopers, Ernst & Young and KPMG), where average salaries are $137,000. In addition to the traditional professional services firms, cutting edge tech companies like Virgin Hyperloop (49,000 SF) and Weedmaps (115,000 SF) as well as wellestablished fashion brands like Adidas (107,000 SF) and Forever 21 (162,000 SF) are beginning to lease large amounts of space and entering the stable downtown office market.

The Ec onom y

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underwriting 54

T H E P R ES TO N M I R ACL E M I L E

U nde r w r i t i ng

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pro forma Below is a pro forma operating statement representing Berkadia’s projections for the first year of buyers’ operations. The pro forma illustrates current operations on (1) an “As-Is” basis, which assumes continuation of current operations and on (2) a fully stabilized, fully-renovated basis, which projects operations based on the repositioning strategy in the Executive Summary section of this Offering Memorandum. On the following pages are detailed footnotes explaining our assumptions.

HISTORICAL OPERATIONS T12 Operations (July 2022)

T3/T12 Normalized Operations (July 2022)

Market Rents Gain (Loss) to Lease Gross Potential Rental Income

$6,623,433 (921,386) $5,702,047

$6,847,644 (975,352) $5,872,292

Concessions Vacancy Bad Debt/Credit Loss Concessions Vacancy Bad Debt/Credit Loss Non-Revenue Units Net Rental Income

(13,697) (124,899) (6,026) 0.24% 2.19% 0.11% (71,206) $5,486,220

(98,662) (6,026) 0.00% 1.68% 0.10% (72,380) $5,695,223

28,272

PROJECTED CASH FLOW "As-Is" Pro Forma (Trended 5%)

Stabilized Renovated Pro Forma (Trended 5%)

Per Unit

$40,519 (5,771) $34,747

$7,221,375 (615,501) $6,605,874

$8,219,610 (164,392) $8,055,218

$48,637 (973) $47,664

1 2

(584) (36)

(402,761) (40,276) 0.00% 5.00% 0.50% (97,273) $7,514,907

(2,383) (238)

3 4 5

(428) $33,700

(330,294) (33,029) 0.00% 5.00% 0.50% (85,460) $6,157,091

(576) $44,467

6

85,308

505

60,884

60,884

360

7

10,554

10,703

63

62,130

62,130

368

8

92,038

92,038

545

92,038

92,038

545

9

140,852 $5,757,935

158,778 $6,042,051

940 $35,752

158,778 $6,530,922

158,778 $7,888,738

940 $46,679

10

$381,802 179,229 82,242 84,377 24,543 24,820 24,873 78,596 77,318 114,001 124,458 169,606 16,449 $1,382,314

$381,802 179,229 82,242 84,377 24,543 24,820 24,873 78,596 77,318 114,001 124,458 169,606 16,449 $1,382,314

$2,259 1,061 487 499 145 147 147 465 458 675 736 750 97 $8,179

$357,885 179,229 67,600 84,377 30,420 24,820 24,873 73,464 60,000 107,501 101,400 163,273 16,449 $1,291,292

$357,885 179,229 67,600 84,377 30,420 24,820 24,873 73,464 60,000 107,501 101,400 197,218 16,449 $1,325,237

$2,118 1,061 400 499 180 147 147 435 355 636 600 1,167 97 $7,842

11 12 13 14 15 16 17 18 19 20 21 22 23

$4,375,621 42,250 $4,333,371 * $4,333,371

$4,659,737 42,250 $4,617,487 * $4,617,487

$27,572 250 $27,322 * $27,322

$5,239,630 42,250 $5,197,380 * $5,197,380

$6,563,501 42,250 $6,521,251 * $6,521,251

$38,837 250 $38,587 * $38,587

Per Unit

Note #

OPERATING REVENUE

Other Income Resident Parking Income Commercial Parking Income RUBS Total Income

OPERATING EXPENSES Salary Expense Utilities Repairs & Maintenance Garage Filter Pump Maintenance Turnover Costs Contract Services Landscaping/Grounds Security/Life & Safety Marketing General & Administrative Insurance Management Fees Direct Assessments Total Operating Expenses

NET OPERATING INCOME

Net Operating Income Reserves NOI After Reserves Property Taxes

NOI After Reserves and Property Taxes

56

T H E P R ES TO N M I R ACL E M I L E

24 25

Footnotes 1.

Market Rents – The table below summarizes average in-place rents and lease rates for the last 30, 60, 90, and 180 days of move-ins

for each unit type as of September 2, 2022. Our Renovated Pro Forma reflects the recent leasing and is meant to project stabilized year one rents. The Renovated Pro Forma trends market rents 5% to reflect rent growth for an investor’s first full year of ownership.

MARKET RENT SUMMARY Rent Roll Summary and Pro Forma Rent Analysis as of September 2, 2022 Recent Move-Ins (excl. MTM/Short-Term)

Floor Plan 0x1 C (Upgd Cabinets) 0x1 A 0x1 A (Upgd Cabinets) 0x1 B (Upgd Cabinets) 1x1 A 1x1 A (Upgd Cabinets) 1x1 B 1x1 B (Upgd Cabinets) 2x2 A (Upgd Cabinets) 2x2 B (Upgd Cabinets) 2x2 C (Upgd Cabinets) 2x2 D (Upgd Cabinets) 2x2 E (Upgd Cabinets) 2x2 F (Upgd Cabinets) 2x2 G 2x2 G (Upgd Cabinets) 2x2 H 2x2 H (Upgd Cabinets) 2x2 I 2x2 I (Upgd Cabinets) Total/ W.A. Per Sq. Ft. Total Monthly Total Annual

Avg. Sq. Ft. 486 525 525 585 730 730 742 742 930 945 1,000 1,113 1,132 1,133 1,160 1,160 1,180 1,180 1,270 1,270 916

# of Apts 1 3 25 1 1 11 7 29 4 4 4 15 4 4 2 22 2 22 6 2 169

Occ. Apts 1 3 25 1 1 11 7 28 4 4 4 15 4 4 2 19 2 21 6 1 163 96%

As-Is As-Is Pro Forma Avg. InPro Forma Rents Avg. Market Place Rent Rents (Trended Rent (Rent Roll) (Rent Roll) T180 T90 T60 T30 (Untrended) 5%) $2,283 $1,665 $2,275 $2,389 $2,501 $2,249 $2,475 $2,599 $2,596 $2,239 $2,528 $2,504 $2,445 $2,575 $2,704 $2,548 $2,291 $2,650 $2,783 $2,702 $2,566 $2,800 $2,940 $2,854 $2,567 $2,910 $2,958 $2,950 $3,098 $2,848 $2,631 $2,802 $2,950 $3,098 $2,928 $2,644 $2,819 $2,950 $3,098 $3,495 $2,919 $3,475 $3,649 $3,422 $2,836 $3,400 $3,570 $3,660 $2,917 $3,650 $3,833 $3,805 $3,307 $3,840 $3,840 $3,719 $3,850 $4,043 $3,830 $3,293 $3,875 $4,069 $3,830 $3,357 $3,875 $4,069 $3,734 $3,232 $3,800 $3,990 $3,912 $3,435 $3,864 $3,950 $4,148 $3,782 $3,289 $3,850 $4,043 $3,976 $3,583 $4,000 $4,026 $4,026 $4,076 $4,050 $4,253 $3,979 $3,493 $4,050 $4,253 $4,179 $3,655 $4,250 $4,463 $3,355 $2,954 $3,391 $3,561 $3.66 $3.22 $3.70 $3.89 $567,010 $499,198 $573,125 $601,781 $6,804,120 $5,990,374 $6,877,500 $7,221,375

Reno.

Prem. $500 $350 $250 $225 $650 $500 $500 $500 $725 $800 $650 $550 $525 $525 $650 $500 $600 $400 $500 $300

Stabilized Renovated Pro Forma Rents (Untrended) $2,775 $2,825 $2,825 $2,875 $3,450 $3,450 $3,450 $3,450 $4,200 $4,200 $4,300 $4,400 $4,400 $4,400 $4,450 $4,450 $4,450 $4,450 $4,550 $4,550 $3,860 $4.21 $652,350 $7,828,200

Stabilized Renovated Pro Forma Rents (Trended 5%) $2,914 $2,966 $2,966 $3,019 $3,623 $3,623 $3,623 $3,623 $4,410 $4,410 $4,515 $4,620 $4,620 $4,620 $4,673 $4,673 $4,673 $4,673 $4,778 $4,778 $4,053 $4.42 $684,968 $8,219,610

2. Loss or Gain to Lease – The “as-is” pro forma projects a loss-to-lease of 50.0% which equates to half of the total loss-to-lease today. The stabilized renovated pro forma projects loss-to-lease at 2.0% of gross scheduled rents.

Loss-To-Lease Trended Pro Forma Pro Forma Indicated Market Rents: Current In-Place Rents: Today's Loss-to-Lease with Pro Forma Rents: LTL Incurred During Year 1 (50% of LTL at Close)

3.

$7,221,375 5,990,374 1,231,001 $615,501

Concessions – The pro forma assumes no concessions moving forward.

U nde r w r i t i ng

57

comparable rentals 60

T H E P R ES TO N M I R ACL E M I L E

Compa r able Ren tals

61

07 PALAZZO WEST AT THE GROVE Units: 521 Year Built: 2005

EVERLY GROVE W 3rd St

LA BREA

PARK LA BREA

S La Brea Ave

S Fairfax Ave

05 VISION ON WILSHIRE Units: 150 Year Built: 2018

06 AVALON WILSHIRE Units: 123 Year Built: 2007

6th St

Wilshire Blv

d

W Olympic B

lvd

04 VINZ ON FAIRFAX Units: 144 Year Built: 2018

03 THE DESMOND AT WILSHIRE Units: 175 Year Built: 2016

MIRACLE MILE 01 5600 WILSHIRE Units: 284 Year Built: 2008

02 5550 WILSHIRE AT MIRACLE MILE Units: 163 Year Built: 2010

S Sa

n Vic ente

62

T H E P R ES TO N M I R ACL E M I L E

Blvd

Rent Comps ADDRESS

DISTANCE

UNITS

BUILT

-

169

1989

AVG SF

OCCUPANCY

S THE PRESTON AT MIRACLE MILE

630 Masselin Avenue

5600 WILSHIRE

5600 Wilshire Blvd

0.2 Miles

284

2008

799

97%

5550 WILSHIRE AT MIRACLE MILE

5550 Wilshire Blvd

0.2 Miles

163

2010

1,325

98%

THE DESMOND AT WILSHIRE

5520 Wilshire Blvd

0.3 Miles

175

2016

827

95%

VINZ ON FAIRFA X

950 S Fairfax Avenue

0.8 Miles

144

2018

837

94%

VISION ON WILSHIRE

6245 Wilshire Blvd

0.8 Miles

150

2018

954

96%

AVALON WILSHIRE

5115 Wilshire Blvd

0.8 Miles

123

2007

1,036

96%

PAL A ZZO WEST AT THE GROVE

6220 W 3rd Street

0.9 Miles

521

2005

1,092

99%

223

2012

981

96%

98%

1

2

3

4

5

6

7

Averages* *Averages do not include Subject Property

Compa r able Ren tals

63

64

T H E P R ES TO N M I R ACL E M I L E

studio

RENT CHART

Asking Rent

Rent PSF

RENOVATED PRO FORMA RENT

AS-IS PRO FORMA RENT

$3,400

$7.00 $3,383 $6.50

$3,200 $3,114

$3,000

$6.00 $5.50

$2,916

$2,800

$2,825 $5.00

$2,600 $4.50

$2,558 $2,400

$2,200

$2,000

$4.00 $2,248

5600 WILSHIRE

$3.50

THE PRESTON MIRACLE MILE

VINZ ON FAIRFAX

“THE DESMOND AT WILSHIRE”

VISION ON WILSHIRE

$3.00

Compa r able Ren tals

65

one bedroom RENT CHART

Asking Rent Rent PSF

RENOVATED PRO FORMA RENT

AS-IS PRO FORMA RENT

$6.60

$5,100

$5,147 $6.20

$4,600 $5.80 $4,100

$5.40 $5.00

$3,600 $3,399 $3,100 $2,964 $2,600

$2,100

66

$3,488

$3,503

$3,630 $4.60

$3,450

$4.20

$2,947

$2,779 $3.80

5600 WILSHIRE AVALON WILSHIRE PALAZZO WEST THE PRESTON THE DESMOND 5550 WILSHIRE AT THE GROVE MIRACLE MILE AT WILSHIRE AT MIRACLE MILE

T H E P R ES TO N M I R ACL E M I L E

VINZ ON FAIRFAX

VISION ON WILSHIRE

$3.40

two bedroom RENT CHART

Asking Rent Rent PSF

RENOVATED PRO FORMA RENT

AS-IS PRO FORMA RENT

$6.40

$8,000

$8,019

$7,500

$6.00

$7,000

$5.60

$6,500

$5.20

$6,000 $5,500

$4.80 $5,348

$5,000

$4.40

$4,500 $4,418

$4,000 $3,500 $3,000

$3,524

$3,723

$3,925

$4,554

$4,640 $4.00

$3,901 $3.60 $3.20

$2,500 $2,000

5600 WILSHIRE AVALON WILSHIRE 5550 WILSHIRE THE PRESTON AT MIRACLE MILE MIRACLE MILE

PALAZZO WEST AT THE GROVE

VINZ ON FAIRFAX

THE DESMOND AT WILSHIRE

VISION ON WILSHIRE

$2.80

Compa r able Ren tals

67

1 5600 Wilshire 5600 WIL SHIR E B LVD | LOS AN GELE S, C A 90036 Distance

0.2 Miles

Total Units:

284

Owner:

Essex Property Trust

Manager:

Essex Property Trust

Year Built:

2008

Total Sq. Ft.:

243,910

Occupancy:

97%

Survey Date:

9/8/2022

Concessions:

None

Parking Policy:

No parking included. One-bedrooms may rent first space for $25/mo and second space for $100/mo. Two-bedrooms may rent first and second space for $25/mo, and thrid space for $100/mo.

33++616F 33 6%

U N IT M IX TYPE

UNITS

AVG SF

AVG RENT

RENT/SF

Studios

95

690

$2,499

$3.62

1 Beds

173

825

$2,984

$3.61

2 Beds

16

1159

$3,804

$3.28

284 Total

799

$2,868

$3.59

Weighted Average

33%

U N IT M IX

61%

Studio 1 Bed

2 Bed

68

T H E P R ES TO N M I R ACL E M I L E

2 5550 Wilshire at Miracle Mile 5550 WIL SHIR E B LVD | LOS AN GELE S, C A 90036 Distance

0.2 Miles

Total Units:

163

Owner:

GID

Manager:

Wiindsor Communities

Year Built:

2010

Total Sq. Ft.:

312,165

Occupancy:

98%

Survey Date:

9/8/2022

Concessions:

None

Parking Policy:

No parking included. One-bedrooms may rent first space for $25/mo and second space for $100/mo. Two-bedrooms may rent first space for $25/mo, second space for $75/mo and thrid space for $100/mo.

25++732F 25 2%

25%

U N IT M IX TYPE

UNITS

AVG SF

AVG RENT

RENT/SF

1 Beds

41

824

$3,449

$4.18

2 Beds

119

1482

$4,341

$2.93

3 Beds

3

1935

$6,192

$3.20

163 Total

1,325

$4,151

$3.13

Weighted Average

U N IT M IX

73%

1 Bed

2 Bed

3 Bed

Compa r able Ren tals

69

3 The Desmond at Miracle Mile 5520 WIL SHIR E B LVD | LOS AN GELE S, C A 90036 Distance

0.3 Miles

Total Units:

175

Owner:

Greystar

Manager:

Greystar

Year Built:

2016

Total Sq. Ft.:

203,200

Occupancy:

95%

Survey Date:

9/8/2022

Concessions:

$1,000-$2,500 Look & Lease

Parking Policy:

TYPE

UNITS

AVG SF

AVG RENT

RENT/SF

Studios

41

631

$2,942

$4.67

1 Beds

76

686

$3,606

$5.26

2 Beds

58

1,151

$5,255

$4.57

175 Total

827

$3,997

$4.83

Average

Additional spaces are available for $100/mo.

23++4433F 23 33%

U N IT M IX

Weighted

One parking space per bedroom included in rent.

23%

U N IT M IX

44%

Studio 1 Bed

2 Bed

70

T H E P R ES TO N M I R ACL E M I L E

4 Vinz on Fairfax 950 S FAIR FA X AVEN U E | LOS AN GELE S, C A 90048 Distance

0.8 Miles

Total Units:

144

Owner:

Alliance Residential

Manager:

Greystar

Year Built:

2018

Total Sq. Ft.:

120,381

Occupancy:

94%

Survey Date:

9/8/2022

Concessions:

None

Parking Policy:

TYPE

UNITS

AVG SF

AVG RENT

RENT/SF

Studios

51

592

$2,766

$4.67

1 Beds

53

803

$3,718

$4.63

2 Beds

40

1,194

$4,948

$4.15

144 Total

837

$3,723

$4.45

Average

Additional spaces are available for $125/mo.

35++3728F 35 28%

U N IT M IX

Weighted

One parking space per bedroom included in rent.

35%

U N IT M IX

37%

Studio 1 Bed

2 Bed

Compa r able Ren tals

71

5 Vision on Wilshire 950 S FAIR FA X AVEN U E | LOS AN GELE S, C A 90048 Distance

0.8 Miles

Total Units:

150

Owner:

MetLife

Manager:

UDR

Year Built:

2018

Total Sq. Ft.:

200,893

Occupancy:

98%

Survey Date:

9/8/2022

Concessions:

Two weeks free

Parking Policy:

Valet parking included in rent.

29++43271F 29 1%

U N IT M IX TYPE

UNITS

AVG SF

AVG RENT

RENT/SF

Studios

44

557

$3,510

$6.30

1 Beds

64

855

$5,430

$6.35

2 Beds

40

1,448

$8,819

$6.09

3 Beds

2

2,925

$16,208

$5.54

150 Total

954

$5,914

$6.20

Weighted Average

29%

27%

U N IT M IX

43%

Studio 1 Bed

2 Bed 3 Bed

72

T H E P R ES TO N M I R ACL E M I L E

6 Avalon Wilshire 5115 WIL SHIR E B LVD | LOS AN GELE S, C A 90036 Distance

0.8 Miles

Total Units:

123

Owner:

AvalonBay Communities

Manager:

AvalonBay Communities

Year Built:

2007

Total Sq. Ft.:

165,675

Occupancy:

96%

Survey Date:

9/8/2022

Concessions:

None

Parking Policy:

One-bedrooms include a single space, twobedrooms include a tandem space. Additional single space available for $75/mo.

46++486F 46 6%

46%

U N IT M IX TYPE

UNITS

AVG SF

AVG RENT

RENT/SF

1 Beds

56

794

$3,354

$4.22

2 Beds

59

1,163

$4,059

$3.49

3 Beds

8

1,800

$6,485

$3.60

123 Total

1,036

$3,896

$3.76

Weighted Average

U N IT M IX

48%

1 Bed

2 Bed

3 Bed

Compa r able Ren tals

73

7 Palazzo West At The Grove 6220 W 3R D STR EE T | LOS AN GELE S, C A 90036 Distance

0.9 Miles

Total Units:

521

Owner:

Apartment Income REIT

Manager:

Aimco

Year Built:

2005

Total Sq. Ft.:

679,557

Occupancy:

99%

Survey Date:

9/8/2022

Concessions:

None Parking structure pricing ranges from $65-100/

Parking Policy:

mo for single spaces and $100-125/mo for tandem spaces.

52++408F 52 8%

52%

U N IT M IX TYPE

UNITS

AVG SF

AVG RENT

RENT/SF

1 Beds

270

814

$3,457

$4.25

2 Beds

208

1,270

$4,398

$3.46

3 Beds

43

1,974

$7,441

$3.77

521 Total

1,092

$4,161

$3.81

Weighted Average

U N IT M IX

40%

1 Bed

2 Bed

3 Bed

74

T H E P R ES TO N M I R ACL E M I L E

Disclaimer

The material contained in this document is confidential, furnished solely for the purpose of considering investment in the property described therein and is not to be copied and/or used for any purpose or made available to any other person without the express written consent of Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. In accepting this, the recipient agrees to keep all material contained herein confidential.

This information package has been prepared to provide summary information to prospective purchasers and to establish a preliminary level of interest in the property described herein. It does not, however, purport to present all material information regarding the subject property, and it is not a substitute for a thorough due diligence investigation. In particular, Berkadia Real Estate Advisors LLC, Berkadia Real Estate Advisors Inc. and Seller have not made any investigation of the actual property, the tenants, the operating history, financial reports, leases, square footage, age or any other aspect of the property, including but not limited to any potential environmental problems that may exist and make no warranty or representation whatsoever concerning these issues. The information contained in this information package has been obtained from sources we believe to be reliable; however, Berkadia Real Estate Advisors LLC, Berkadia Real Estate Advisors Inc. and Seller have not conducted any investigation regarding these matters and make no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. Any pro formas, projections, opinions, assumptions or estimates used are for example only and do not necessarily represent the current or future performance of the property.

Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. and Seller strongly recommend that prospective purchasers conduct an in-depth investigation of every physical and financial aspect of the property to determine if the property meets their needs and expectations. We also recommend that prospective purchasers consult with their tax, financial and legal advisors on any matter that may affect their decision to purchase the property and the subsequent consequences of ownership.

All parties are advised that in any property the presence of certain kinds of molds, funguses, or other organisms may adversely affect the property and the health of some individuals. Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. recommend, if prospective buyers have questions or concerns regarding this issue, that prospective buyers conduct further inspections by a qualified professional.

The Seller retains the right to withdraw, modify or cancel this offer to sell at any time and without any notice or obligation. Any sale is subject to the sole and unrestricted approval of Seller, and Seller shall be under no obligation to any party until such time as Seller and any other necessary parties have executed a contract of sale containing terms and conditions acceptable to Seller and such obligations of Seller shall only be those in such contract of sale.

For more information on these and other Berkadia® exclusive listings, please visit our website at www.Berkadia.com Berkadia®, a joint venture of Berkshire Hathaway and Jefferies Financial Group, is an industry leading commercial real estate company providing comprehensive capital solutions and investment sales advisory and research services for multifamily and commercial properties. Berkadia® is amongst the largest, highest rated and most respected primary, master and special servicers in the industry. © 2022 Berkadia Proprietary Holding LLC Berkadia® is a trademark of Berkadia Proprietary Holding LLC Investment sales and real estate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. Tax credit syndication business is conducted exclusively by the Tax Credit Syndication group. In California, Berkadia Real Estate Advisors Inc. conducts business under CA Real Estate Broker License #01931050; Adrienne Barr, CA DRE Lic. # 01308753. Berkadia Commercial Mortgage LLC conducts business under CA Finance Lender & Broker Lic. #988-0701; and Berkadia Commercial Mortgage Inc. under CA Real Estate Broker Lic. #01874116. This proposal is not intended to solicit commercial mortgage loan brokerage business in Nevada. For state licensing details, visit: https://www.berkadia.com/licensing/ - 201494 - KB

Compa r able Ren tals

75

Investment Sales DERREK OSTRZYZEK DRE #01984295 310.924.9348 derrek.ostrzyzek@berkadia.com TOM MORAN JR. DRE #01201310 tom.moran@berkadia.com 714.269.8380 MIKE MURPHY DRE #01241878 mike.murphy@berkadia.com 949.242.4073 RACHEL PARSONS DRE #01335449 858.945.0992 rachel.parsons@berkadia.com

Mortgage Banking JACK HUNSICKER Director, Mortgage Banking jack.hunsicker@berkadia.com 949.622.9221 DAVID BLEIWEISS Managing Director david.bleiweiss@berkadia.com 949.622.9221