PRIME KOREATOWN DEVELOPMENT
TOC BONUS & OPPORTUNITY ZONE
JAMES CAPITAL ADVISORS
MARKETING PACKAGE
TABLE OF
Contents CONTENTS
SECTION
Property Overview
1
Financial Analysis
2
Location Overview
3
MEET YOUR ADVISORS
tyler chung Associate, Multifamily
will james
Director, Multifamily
tom jonsson Director, Multifamily
SECTION ONE
PROPERTY OVERVIEW
PROPERTY OVERVIEW
THE OFFERING
THE OFFERING
1200 S. WESTMORELAND AVE
Los Angeles, CA 90006
PRICE
LOT SIZE
$2,200,000 10,823 SF
RENTALBE SF
5,620 SF TOC Zoning APN Current Use
Tier 2 R4-1XL 5076-018-013 Multifamily Housing
Premier Development Opportunity in Thriving Koreatown The current opportunity is to develop approximately 44 apartment units under Los Angeles’s new Transit Oriented Communities (TOC). This measure requires the City Planning to create incentives for all housing developments located within a one-half mile radius of a major transit stop. Due to the proximity to the Olympic and Vermont Metro stop, this development qualifies for TOC Tier 2. Density Bonus incentives include an additional 11 feet in height and 45% increase in FAR, 60% increase in the number of buildable units, a decrease in setbacks and open space requirements, along with a reduction in parking now only requiring 0.5 spaces per unit; no more than 1 required per unit. This 10,823 square foot lot will come with 2 vacant units. This offering is located in a thriving location that’s been going through major developments, presenting a rare opportunity for developers looking to establish a new boutique luxury apartment in Koreatown.
PROPERTY OVERVIEW
DETAILS
Street Address 1200 S. Westmoreland Ave
Number of Units
City
Unit Mix
State Zip Code APN Zoning TOC
Los Angeles CA 90006
Rentable SF
6 (6) 1 Bed / 1 Bath 5,620 SF
Lot Size Lot Dimensions Building Line
10,823 SF 55 x 198.29 None
Existing Buildings
1
Council District
CD 1 - Gilbert Cedillo
5076-018-013
Stories
2
Historic Review
No
R4-1XL
Parking
On-Site
Tier 2
Year Built
1939
Specific Plan Opportunity Zone
None Yes
PROPERTY OVERVIEW
HIGHLIGHTS
OPPORTUNITY ZONES Opportunity Zones offer incentives to developers looking to invest in low-income communities. This offers three tax incentives through a qualified Opportunity Fund: Temporary Deferral, Step-Up in Basis, and Permanent Exclusion.
TOC TIER 2 BUILDING INCENTIVES •
60% Unit density bonus
•
45% Increase in FAR
•
Height Bonus: 11 feet or one story
•
30% Reduction in set backs
•
0.5 Parking spaces per bedroom; no more than 1 required space per unit
PROPERTY OVERVIEW
PLAN VIEW / Plat Map
PROPERTY OVERVIEW
HOTSPOTS
The Line Hotel
Openaire
Wiltern Theatre
Kang Ho-dong Baekjeong
The Wiltern evokes a period of elegance and style simply not found anywhere in today’s modern venues. The entrance is set back among colorful terrazzo paving, and its art deco design contains decorative tile work along with colorful murals.
Kang HoDong Baekjeong is one of Koreatown’s most popular BBQ restaurants. While the meat and banchan are both very good, a meal here is a true test of patience as wait times fall in the two-hour range almost every day of the week.
Chapman Plaza
Quarters Korean BBQ
A second home for neighbors and travelers seeking a rich, layered experience unlike any other in Los Angeles. Tucked between Hollywood and downtown, the LINE LA is your haven for creative expression and exploration.
Chapman market and its companion Chapman Park Studio building across Alexandria Avenue were envisioned, along with the sincedemolished Chapman Park Hotel, as fashionable anchors of the neighborhood.
Created in collaboration with twostar Michelin Chef and native Angeleno, Josiah Citrin, Openaire is a poolside oasis of green at the center of the Koreatown. The menu features the best of California’s ingredients from land and sea.
Quarters might be next door to a serious heavyweight in Kang Ho Dong Baekjeong, but it’s proven to be a serious contender in its own right. Excellent quality meats, a modern-looking space and, full bar.
PROPERTY OVERVIEW
HOTSPOTS
Parks BBQ
Go to Park’s BBQ for the best Korean barbecue in the heart of K-Town, a bold, but true, claim for the constantly changing neighborhood with more smoke-filled barbecue spots per square mile than some major cities.
MaDang Courtyard
Ma Dang the Couryard, that curiously-designed Koreatown minimall on Western Avenue right across for Solair is a three-level shopping and entertainment complex.
Koreatown Galleria
The Koreatown Galleria’s bright, airy interior offers an alternative to the sometimes grimy streetscape near Western and Olympic. The mall features apareal, gifts, specialty foods and a supermarket.
Koreatown Plaza
Koreatown Plaza comes closest to a centralized, bourgeois shopping district, albeit trapped inside of a distinctively ‘80s mall. The selection skews towards global kids and adult brands. The overall experience is an American mall with Korean flair.
PROPERTY OVERVIEW
TRANSIT
Metro Stops 1. North Hollywood 2. Universal City / Studio City 3. Hollywood / Highland 4. Hollywood / Vine 5. Hollywood / Western 6. Vermont / Sunset 7. Vermont / Santa Monic 8. Vermont / Beverly 9. Wilshire / Western 10. Wilshire / Normandie 11. Wilshire / Vermont 12. Westlake / MacArthur Park 13. 7th St. / Metro Center 14. Pershing Square 15. Civic Center / Grand Park 16. Union Station
A
C
B
J D
E
F I
G H K
Points of Interest A. Universal Studios / City Walk B. John Anson Ford Theater C. Hollywood Bowl D. TCL Chinese Theatre E. Dodger Stadium F. Disney Concert Hall G. Museum of Contemporary Art H. Staples Center I. MacArthur Park J. Pantages Theater K. Los Angeles Convention Center
SECTION TWO
FINANCIAL ANALYSIS
FINANCIAL ANALYSIS
FINANCING
$1,534,500
Down Payment
$665,500
Loan Amount
4.00%
Interest Rate
30 Years / 5 Years
Amortization / Fixed-Period
360 Months
Term
CURRENT
PRO FORMA
Debt Service
-$38,820
-$38,820
Pre-Tax Cash Flow
$7,909
Principle Reduction
-$11,418
Total Return
$19,326
(0.52%)
$32,827
(2.14%)
-$11,418 (1.26%)
$44,244
(2.88%)
FINANCIAL ANALYSIS
INCOME AND EXPENSE ANNUAL
INCOME
CURRENT
PRO FORMA
Base Rental Income
$100,776
Gross Potential Income
ANNUAL
EXPENSE
CURRENT
PRO FORMA
$129,600
Property Taxes
$27,500
$27,500
$100,776
$129,600
Insurance
$3,372
$3,372
Vacancy Allowance
$5,039
$6,480
Utilities
$5,760
$5,760
Effective Gross Income
$95,737
$123,120
Repairs & Maintenance
$4,787
$6,156
Operating Expenses
$49,008
$51,437
Management Fee
$3,829
$4,925
Net Operating Income
$46,729
$71,647
Pest Control
$360
$360
Landscaping
$1,200
$1,200
Miscellaneous
$1,000
$1,000
Reserves
$1,200
$1,200
Operating Expenses
$49,008
$51,473
FINANCIAL ANALYSIS
RENT SCHEDULE
PRO FORMA
PRO FORMA
$1.11
$1,800
$1.92
$1,424
$1.52
$1,800
$1.92
937 SF
$1,275
$1.36
$1,800
$1.92
1 Bed / 1 Bath
937 SF
$1,800
$1.92
$1,800
$1.92
5
1 Bed / 1 Bath
937 SF
$1,064
$1.14
$1,800
$1.92
6*
1 Bed / 1 Bath
937 SF
$1,800
$1.92
$1,800
$1.92
5,620 SF
$8,398
UNIT #
UNIT TYPE
SQ. FOOTAGE
RENT
RENT PER SF
1
1 Bed / 1 Bath
937 SF
$1,035
2
1 Bed / 1 Bath
937 SF
3
1 Bed / 1 Bath
4*
TOTAL *Will be Delivered Vacant
RENT
$10,800
RENT PER SF
SECTION THREE
LOCATION OVERVIEW
LOCATION OVERVIEW
ORIENTATION MAP
NEIGHBORHOOD SCALE
CITY SCALE
LOCATION OVERVIEW
opportunity zones Opportunity Zones are new incentives for investing in low-income communities. Opportunity Zones programs offer three tax incentives through a qualified Opportunity Fund. Temporary Deferral Taxable income for capital gains reinvested into an Opportunity Fund have a temporary deferral. The deferred gain must be recognized on the earlier of the date on which the Opportunity Zone investment is disposed of or December 31, 2026. Step-Up in Basis Basis is increased by 10% if the investment in the Opportunity Fund is help by the taxpayer for at least 5 years. An addition 5% of held for at least 7 years, thereby excluding up to 15% of the original gain from taxation. Permanent Exclusion Permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. The Opportunity Zones program is designed to incentivize patient capital investments in low-income communities nationwide.
LOCATION OVERVIEW
submarkets
Koreatown The Koreatown apartment market has been highly liquid for several years. This year’s largest trade was Equity Residential’s August acquisition of the 5 Star, 398-unit Next on Sixth for $189 million, or about $475,000/unit. One of LA County’s largest deliveries when the seller, Century West Partners, finished development in 2017, the asset stabilized in early 2019 and was close to fully leased at the time of sale.
Downtown Los Angeles Downtown Los Angeles (DTLA) is the central business district of Los Angeles, California, as well as a widely diverse residential neighborhood of some 58,000 people. Downtown, comprising diverse smaller areas such as Chinatown, Little Tokyo and the Arts District, offers renowned art museums, cutting-edge restaurants & hip bars. It is home of the Staples center where the Lakers, the Clippers and the Kings play every seasosn. It is also the home of the Los Angeles Convention Center where special events take place quarterly. DTLA will also have the opportunity to be home to the 2028 Olympics.
USC The University of Southern California is a private institution that was founded in 1880. It has a total undergraduate enrollment of 19,907, its setting is urban, and the campus size is 226 acres. It utilizes a semester-based academic calendar. University of Southern California was ranked #22 in the 2020 edition of Best Colleges.
LOCATION OVERVIEW
Koreatown
Koreatown Koreatown has recently emerged as one of Los Angeles’s most desirable neighborhoods. It’s proximity to Downtown, Hollywood, and the Westside make it attractive for residents and employers alike. Already the densest neighborhood in Los Angeles, Koreatown has seen a tremendous amount of new development along with buzzing retail and entertainment establishments along the Wilshire corridor. The demographics and dynamics of the community have made Koreatown a hotbed for hotels, office, and multifamily. The primary factor driving developers to build in Koreatown is its close proximity to Downtown Los Angeles and its central location near transit. With nearly 1,900 residental units now under construction according to CoStar Market Analytics, sizeable proposals continue to work their way through the entitlement process.
Development Despite covering only about six square miles, densely populated Koreatown has one of the largest apartment inventories in the metro, with about 55,500 units constituting more than 6% of Los Angeles inventory. The neighborhood still has a lot of older buildings that can be torn down and rebuilt, which explains why less than 10% of existing inventory is in the 4 and 5 Star segment despite the recent delivery of several high-end projects. Koreatown continues to flourish with modern architectural design and has been attracting more population to the city. Being the center of entertainment, it has the upside of having all of the conveniences of lifestyle amenities when it comes to the latest foods, desserts, and nightlife. Today’s discerning lifestyle renters seek thoughtfully designed floorplans with luxury finishes coupled with state of the art amenities in walkable urban locations. 1200 S Westmoreland Ave offers the opportunity to capture the imagination of such renters and represents a rare opportunity to develop in one of the highly regarded neighborhoods of Los Angeles.
LOCATION OVERVIEW
AERIAL
LOCATION OVERVIEW
AERIAL
LOCATION OVERVIEW
DEMOGRAPHICS
Population
1-Mile
3-Mile
5-Mile
2024 Projection
105,389
683,880
1,392,672
2019 Estimate
103,728
669,602
1,364,150
2010 Census
98,139
614,452
1,254,600
Growth ‘19 - ‘24
1.60%
2.13%
2.09%
Growth ‘10 - ‘19
5.69%
8.98%
8.73%
Households
1-Mile
3-Mile
5-Mile
2024 Projection
34,308
240,823
493,645
2019 Estimate
33,808
235,304
483,267
2010 Census
32,233
213,344
443,335
Growth ‘19 - ‘24
1.48%
2.35%
2.15%
Growth ‘10 - ‘19
4.89%
10.29%
9.01%
Average Income
$40,609
$57,844
$65,524
Median Income
$30,410
$36,605
$41,582
JAMES CAPITAL ADVISORS, INC.
DISCLAIMER
The information contained in this Marketing Brochure has been obtained from sources believed to be reliable, but the accuracy or completeness of the information contained therein cannot be guaranteed. James Capital Advisors, Inc. & Broker of Record (“Broker”) has not, and will not, verify any of this information, nor has Broker conducted, nor will it conduct, any investigation regarding these matters. Broker makes no representations, guarantees, or warranties of any nature about the accuracy or completeness of any information provided. The information provided in this brochure is in no way a substitute for a thorough due diligence investigation by Buyer. Broker has made no investigation of, and has made no representations, guarantees, or warranties of any nature, with regard to income and expenses for this property nor the future financial performance of the property. In addition, Broker has made no investigation of, and has made no representations, guarantees, or warranties as to the size and square footage of the property, the presence of any contaminating substances at the property, the physical condition of the property or compliance with any State, Local or Federal regulations. In addition, Broker has made no investigation of, and has made no representations, guarantees, or warranties of any nature, with regard to the financial condition or future financial condition of any tenants, nor any future plans or intentions of tenants with regard to the continued occupancy of the property. All parties are aware that Broker has no affirmative obligation to conduct a due diligence examination of the property for any Buyer. Any and all projections or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. Therefore, Broker assumes no legal responsibility for accuracy or completeness of this information, and expressly disclaims all representations, guarantees, or warranties related thereto. The value of the property to any Buyer depends on numerous factors that must be evaluated by Buyer and Buyer’s legal, tax, construction, and financial advisors. Buyer and Buyer’s advisors should conduct a thorough, independent investigation of the property to determine its suitability for Buyer’s intended usage. This investment, as with all real estate investments, carries a substantial risk. As such, Buyer and Buyer’s legal and financial advisors are strongly advised to request and review all legal and financial documentations related to the property and tenants. A tenant’s past performance is not a guarantee of future performance. The lease rate stated for some properties may be based on a tenant’s projected sales with little or no record of actual performance or comparable rents for the area in question. Returns are in no way guaranteed. Tenants may fail to pay the rent or property taxes or any other tenant obligations under the terms of the lease or may default under the terms of such lease. Regardless of tenant’s history of performance, and/or any lease guarantors and/or guarantees, Buyer is responsible for conducting Buyer’s own investigation of all matters related to any and all tenants and lease agreements. Broker is not, in any way, responsible for the performance of any tenant or for any breach or default by any tenant of any terms of any lease agreement related to the property. Further, Buyer is responsible for conducting Buyer’s own independent investigation of all matters related to the value of the property, including, but not limited to, the value of any long-term leases. Buyer must carefully evaluate the possibility of tenants vacating the property or breaching their leases and the likelihood and financial impact of being required to find a replacement tenant if the current tenant should default and/or abandon the property. Buyer must also evaluate Buyer’s legal ability to make alternate use of the property in the event of a tenant abandonment of the property.
CONFIDENTIALITY This Marketing Brochure and the information contained within, is propriety and strictly confidential. It is intended to be used only by the party receiving it from Broker. It should not be made available to any other person or entity without the express written consent of Broker.
RELEASE This Marketing Brochure has been prepared to provide basic, unverified information for prospective purchasers. By accepting this Marketing Brochure, the recipient agrees to release and hold harmless Broker from any claim, demand, liability or loss arising out, or relating in any way, to the information contained in this Marketing Brochure and from Buyer’s investigation of the property. In no event shall James Capital Advisors, Inc. or Broker be liable to any party for any direct, indirect, special, incidental, or consequential damages of any kind whatsoever arising out of the use of this Marketing Brochure or any information contained herein.
NON-ENDORSEMENT Broker is not affiliated with, endorsed by or sponsored in any way by any tenant or lessee identified in this Marketing Brochure. The presence of any entity’s logo or name is not intended in any way to indicate affiliation, sponsorship or endorsement by said entity of Broker.
THANK YOU FOR YOUR TIME
CONTACT
tyler chung
will james
tom jonsson
(424) 325-2632
(424) 325-2610
(424) 325-2621
Associate, Multifamily
tyler@jamescapitaladvisors.com CA RE Lic. 02085199
Director, Multifamily will@jamescapitaladvisors.com CA RE Lic. 01734419
Director, Multifamily
tom@jamescapitaladvisors.com CA RE Lic. 01755842