OM - 9525 Sylmar Ave - Kelly Morgan

9525 SYLMAR AVE PA N O R A M A C I T Y , C A 9 1 4 0 2

KELLY MORGAN COMMERCIAL GROUP www.KellyMorganCommercial.com

Confidentiality Agreement Affiliated Business Disclosure The information contained in the following Offering Memorandum is proprietary and strictly confidential.

It is intended to be reviewed only by the party receiving it from KW Commercial and it should not be made available to any other person or entity without the written consent of KW Commercial. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the Offering Memorandum. If you have no interest in the subject property at this time, please return this Offering Memorandum to KW Commercial.

Confidentiality Agreement This Offering Memorandum has been prepared to provide summary, unverified financial and physical 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.

KW Commercial 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, PCBs or asbestos, the compliance with local, 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 Offering Memorandum has been obtained from sources we believe to be eliable; however, KW Commercial has not verified, and will not verify, any of the information contained herein, nor has KW Commercial 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. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.

All potential buyers are strongly advised to take advantage of their opportunities and obligations to conduct thorough due diligence and seek expert opinions as they may deem necessary, especially given the unpredictable changes resulting from the continuing COVID-19 pandemic. KW Commercial has not been retained to perform, and cannot conduct, due diligence on behalf of any prospective purchaser. KW Commercial’s principal expertise is in marketing investment properties and acting as intermediaries between buyers and sellers. KW Commercial and its investment professionals cannot and will not act as lawyers, accountants, contractors, or engineers. All potential buyers are admonished and advised to engage other professionals on legal issues, tax, regulatory, financial, and accounting matters, and for questions involving the property’s physical condition or financial outlook. Projections and pro forma financial statements are not guarantees and, given the potential volatility created by COVID-19, all potential buyers should be comfortable with and rely solely on their own projections, analyses, and decision-making.)

K E L LY M O R G A N 310.836.3638 Kelly@KellyMorganCommercial.com www.KellyMorganCommercial.com CA DRE# 01898026

Where’s The Next

MULTI-FAMILY HOT SPOT?

Where’s The Next MULTI-FAMILY HOT SPOT?

P R O P E R TY NE A R TR A NSI T HAS H IGH E R A P P R E C IATI O N Studies have noted how new public transit stops drive up nearby rental prices.

25% - 67%

HI GHER I N PUBL I C T R A NS I T STATI ON AREAS

H IGH E S T GA I NS NE A R R A P ID RA I L TR A NS IT, B R T, A ND CO M M U TE R RA I L. Sources: http://www.urbandisplacement.org RadPad on March 17, 2016. https://blog.onradpad.com/rent-on-los-angeles-expo-line-up/Note: There is no guarantee the transit line will be completed and no guarantee that it will affect rents in the same way as other transit lines in the past.

Where’s The Next MULTI-FAMILY SPOT?

LIGHT RAIL TRANSIT LINE UNDER CONTRUCTION ON VAN NUYS BLVD.

Where’s The Next MULTI-FAMILY HOT SPOT?

ICON AT PANORAMA CITY IN DEVELOPMENT. MIXED USE WITH 623 MULTIFAMILY UNITS CONNECTED WITH RETAIL & COMMERCIAL.

Where’s The Next MULTI-FAMILY HOT SPOT?

IZEK SHOMOF PLANS 200 APARTMENTS AND RETAIL NEXT TO HIS NEW 821 LUXURY RESIDENTIAL APARTMENTS IN THE PANORAMA TOWER.

Where’s The Next MULTI-FAMILY HOT SPOT?

5,000,000 SQUARE FEET OF HOUSING, HOTEL, ENTERTAINMENT, FOOD & COMMERCIAL

AND NOW….

EXPERIENCE THE PANORAMA CITY CENTER THE HEART OF THE VALLEY WILL BE RE-ENERGIZED

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

3,544

Square Feet of Multi-Family

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

190,000

Square Feet of Retail Shops

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

34,000

Square Feet of Fitness

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

36,480

Square Feet of Fast Food

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

24,320

Square Feet of Restaurants

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

24,000

Square Feet of Food Hall

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

75,000

Square Feet of Event Space/Banquet Hall/Museum

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

50,000

Square Feet of Cinema

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

30,000

Square Feet of Recording/Movie Studio

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

194,800

Square Feet of General Office

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

284,500

Square Feet of Medical Office/Clinic

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

113,800 Square Feet of Hotel

Where’s The Next MULTI-FAMILY HOT SPOT?

PANORAMA CITY CENTER

2 M INUTE WALK TO BRT

Property Summary

THE ASSET

42

FINANCIAL SUMMARY

NUMBER OF UNITS

12

SALE PRICE

$1,485,000

LOT SF

± 16,999

GRM (Feb 2024)

10.63

YEAR BUILT / EFF.

1950 / 1970

CAP ( Feb 2024)

6.03%

APN

2644-029-007

Price/Unit

$265,000

ZONING

LARD2

Price/SF

$254

OPPORTUNITY HIGHLIGHTS

43

44

45

46

47

48

49

50

51

52

53

54

L O C AT I O N O V E RV I E W 9 3 2 5 S Y L M A R AV E

CLOSE PROXIMITY TO TRANSIT CORRIDORS INCREASES

PROPERTY VALUES LOS ANGELES METRO BOARD GREENLIGHTS LIGHT RAIL PROJECT IN SAN FERNANDO VALLEY The project will officially begin major construction in 2022 and is scheduled The final configuration of the first rail line to serve the east San Fernando Valley since the 1950s was approved Thursday by the Los Angeles county Metropolitan Transportation Authority Board of Directors.

to open by 2028. When complete, the new Valley light-rail line will make it easy to connect between L.A. Metro’s G Line, Metrolink, Amtrak and numerous east-west Valley bus lines. Another L.A. Metro project — the Sepulveda Transit Corridor — proposes to build a high-capacity transit line from Van Nuys across the Sepulveda Pass to the Westside and then beyond to LAX. That project is currently in the planning phase as different routes and financing plans are being studied and developed.

56

TWO DEVELOPMENTS THAT CHANGED NEIGHBORHOODS AND INCREASED PROPERTY VALUES.

THE GROVE

THE AMERICANA AT BRAND

•

When The Grove was built in 2002, the neighborhood was more a through-way than a place to stop and shop. Now the $100-million dollar project on 25 acres is one of the highest grossing shopping centers in the country.

•

The Americana at Brand, a $400-Million Dollar development on 15.5 acres modeled after The Grove has also brought astounding success

•

It successfully offers a place where people can spend a whole day shopping, eating and connecting with friends both new and old.

•

What was originally a blighted area in the center of Glendale is not only a Major Shopping Destination for people through-out Los Angeles, but a catalyst for the accelerating revitalization of the entire Glendale community

•

The Grove has substantially increased rents and property values in the local community and grown to become an attraction for tourists around the world.

•

Apartments in the area of the Americana at Brand achieve rents which are 30% above market and are 98% leased

57

THE ICON THE ICON | THE “NEXT AMERICANA AT BRAND” •

Major Redevelopment of Montgomery Ward Site in Panorama City

58

•

7 Building Complex with 623 apartments

•

60,000 SF of stores & restaurants

•

17,000 SF of landscaped plaza

PANORAMA MALL RE-IMAGINED PANORAMA MALL COMPLEX REIMAGINED •

3,544 Residential Units

•

125,000 SF of retail

•

70,000 SF of food & beverage

•

90,000 SF of entertainment

•

125,000 SF of Office Space

•

230,000 SF of Medical

•

120 Room Hotel

59

PANORAMA CITY CENTER

60

F I N A N C I A L A N A LY S I S 9 3 2 5 S Y L M A R AV E

FINANCIAL ANALYSIS CURRENT

Summary

Current Rents

Price

$3,000,000

First Loan Amount

$1,170,000

NEW

$1,830,000

Terms

6.50%

5YR Fixed

Down Payment

61%

Market Rents

Number of Units

12

14

Cost per Unit

$250,000

$214,286

GRM

13.90

8.03

CAP

3.56%

8.07%

GRM (Feb 2024)

12.92

CAP (Feb 2024)

4.74% CURRENT

Approx. Lot Size

16,999

Approx. Bldg SF

8,156

10,556

Cost per Net RSF

$368

$284

Bdrms/ Baths

4

Current Rents

Market Rents

Monthly Rent/Unit ($)

Monthly Income ($)

Monthly Rent/Unit ($)

Monthly Income ($)

1+1

$1,152

$4,608

$1,950

$7,800

6

2+1

$1,844

$11,064

$2,395

$14,370

2

2+1 *LI

$1,155

$2,309

$1,185

$2,370

2

3+2

$3,295

$6,590

Total Scheduled Rent

*Low Income

62

Approx SF

73%

MARKET

1950

No. of Units

Rental Upside: Parking: 24

Year Built / Age

Scheduled Income

Proposed Financing

1,200 SF-ADU $17,981

$31,130

FINANCIAL ANALYSIS WITH CONSTRUCTION COSTS Summary

Current Rents

Price

$3,000,000

First Loan Amount

$1,170,000

NEW

Terms

6.50%

5YR Fixed

Down Payment

61%

$1,830,000

ADU Construction Costs

$240 per foot

$576,000

Market Rents

Proposed Financing

$576,000

Exterior Rehab Interior Rehab ($40K/unit)

$360,000

Total Cost

$3,576,000

$3,936,000

Total Cash Investment

$2,406,000

$2,766,000

Number of Units

14

14

Additional Rental Upside After ADU

27%

Cost per Unit

$255,429

$281,143

Added Value After Adding ADUs:

$908,521

GRM

12.13

10.54

CAP

4.74%

6.15%

GRM (Feb 2024)

11.49

CAP (Feb 2024)

5.35% CURRENT 1950

Approx. Lot Size

16,999

Approx. Bldg SF

10,556

10,556

Cost per Net RSF

$339

$373

No. of Units

Bdrms/ Baths

4

Current Rents

Market Rents Monthly Rent/Unit ($)

Monthly Income ($)

Monthly Rent/Unit ($)

Monthly Income ($)

1+1

$1,152

$4,608

$1,950

$7,800

6

2+1

$1,844

$11,064

$2,395

$14,370

2

2+1 LI

$1,155

$2,309

$1,185

$2,370

2

3+2

$3,295

$6,590

$3,295

$6,590

Total Scheduled Rent

Approx SF

(*After adding two ADUs. *Buyer to verify)

MARKET

Year Built / Age

Scheduled Income

Parking: 22

(Based on 11.49 GRM)

1,200 SF-ADU

$24,571

$31,130

Current rents include ADU construction costs and ADU income. Market rents include ADU, interior upgrade costs with ADU incomes and all units at market rents.

63

ANNUALIZED OPERATING DATA CURRENT

64

Total Gross Current Monthly Rents

Current

Market

Total Scheduled Rent

$17,981

$31,130

Annualized Scheduled Gross Income

$215,775

$373,560

Annualized Operating Data

Current

Market

Scheduled Gross Income

$215,775

$373,560

Vacancy Rate Reserve

($6,473)

Gross Operating Income

$209,302

Expenses

($102,545)

Net Operating Income

$106,756

$242,193

Loan Payments

($88,742)

($88,742)

Pre-Tax Cash Flow

$18,014

Principal Reduction

$17,550

Total Return

$35,564

Estimated Expenses

Current

Market

Taxes-est

$37,500

$37,500

Insurance-est

$8,156

$10,556

Utilities-2021 P&L

$18,359

$21,418

Trash-2021 P&L

$2,635

$3,074

Gardener-2021 P&L

$1,050

$1,050

Off Site Mgr

$10,465

$18,118

Misc/Reserves-2021 P&L

$14,171

$16,532

Maint/Repairs-2021 P&L

$10,210

$11,912

Total Expenses

$102,545

$120,160

Per Net Sq. Ft.

($12.57)

($14.73)

Per Unit

($8,545)

($10,013)

3.0%

($11,207)

3.0%

$362,353 47.5%

0.98%

($120,160)

$153,451

32%

8.39%

$17,550 1.94%

$171,001

9.34%

ANNUALIZED OPERATING DATA WITH CONSTRUCTION COSTS

Total Gross Current Monthly Rents

Current

Market

Total Scheduled Rent

$24,571

$31,130

Annualized Scheduled Gross Income

$294,855

$373,560

Annualized Operating Data

Current

Market

Scheduled Gross Income

$294,855

$373,560

Vacancy Rate Reserve

($8,846)

Gross Operating Income

$286,009

Expenses

($116,343)

Net Operating Income

$169,666

$242,193

Loan Payments

($88,742)

($88,742)

Pre-Tax Cash Flow

$80,924

Principal Reduction

$17,550

Total Return

$98,474

Estimated Expenses

Current

Market

Taxes-est

$37,500

$37,500

Insurance-est

$10,556

$10,556

Utilities-2021 P&L

$21,418

$21,418

Trash-2021 P&L

$3,074

$3,074

Gardener-2021 P&L

$1,050

$1,050

Off Site Mgr

$14,300

$18,118

Misc/Reserves-2021 P&L

$16,532

$16,532

Maint/Repairs-2021 P&L

$11,912

$11,912

Total Expenses

$116,343

$120,160

Per Net Sq. Ft.

($11.02)

($11.38)

Per Unit

($8,310)

($8,583)

3.0%

($11,207)

3.0%

$362,353 39.5%

4.42%

($120,160)

$153,451

32%

5.55%

$17,550 5.38%

$171,001

6.18%

65

CASH FLOW ANALYSIS Cash Flow Analysis

Year 1

Year 2

Year 3

Year 4

Year 5

Disposition Cash Flow

Scheduled Gross Income

$294,855

$311,264

$330,580

$354,021

$381,210

$406,395

Vacancy Rate Reserve

($8,846)

($9,338)

($9,917)

($10,621)

($11,436)

($12,192)

$9,240

$9,240

$9,240

$9,240

Capital Improvement Recoup From Tenants Gross Operating Income

$286,009

$311,166

$329,902

$352,641

$379,014

$394,204

Estimated Expenses

($116,343)

($119,833)

($123,428)

($127,131)

($130,945)

($134,873)

Net Operating Income

$169,666

$191,333

$206,474

$225,509

$248,069

$259,330

ADU Construction Costs

($548,000)

Exterior Rehab Interior Rehab

($40,000)

($40,000)

($40,000)

($40,000)

($40,000)

Loan Payments

($88,742)

($88,742)

($88,742)

($88,742)

($88,742)

($88,742)

Pre-Tax Cash Flow

($507,076)

$62,591

$77,732

$96,767

$119,326

$170,588

Pre-Tax Cash on Cash Return

-27.71%

2.55%

3.11%

4.86%

4.63%

19.06%

Principal Reduction

$17,550

$18,550

$19,550

$20,550

$21,550

$22,550

$4,251,842

$4,588,309

$5,011,321

$5,512,640

$5,762,891

$62,591

$77,732

$96,767

$119,326

Property Value Cap Rate Cash at Sale in Year 5

$4,373,682

Cash Flow Stream (Pre-Tax)

($1,830,000)

($507,076)

Average Annual ROI (Return on Investment)

19%

$512,722

Total 5 Year ROI

107%

$2,563,609

IRR (Compounding Average Annual Return)

14.1%

Rent Increase Assumption

5%

Rent Increase Assumption (Feb 2024)

7%

Disposition Cap Rate

4.50%

Total Principal Reduction

$97,750

$4,544,270

*The five year cash flow assumes turning one unit per year for five years, the highest paying units first. **The figures above are merely projections to be verified by Buyer. Seller and his/her representative do not warrant the accuracy of these figures. Buyer to conduct his/her own due diligence.

66

RENT ROLL Unit

Unit Type

Move In Dates

Approx. Sq. Ft.

1

2+1

11/01/22

$1,960

2

2+1

vacant-pf

$2,395

3

2+1 LI*

06/11/11

$1,180

4

2+1

02/01/19

$1,600

5

2+1

08/18/15

$1,379

6

2+1

03/01/23

$1,980

7

2+1 LI*

10/05/11

$1,129

8

2+1

05/15/20

$1,750

9

1+1

09/21/15

$1,089

10

1+1

06/01/98

$956

11

1+1

12/01/22

$1,430

12

1+1**

05/01/11

$1,133

Pre-ADU Totals

Current Rent

$17,981

ADU

3+2-ADU

1200 SF

$3,295

ADU

3+2-ADU

1200 SF

$3,295

Post ADU

$24,571

Monthly

$24,571

Annually

$294,855

*Low Income

**NC Unit

67

S O L D C O M PA R A B L E S 9 3 2 5 S Y L M A R AV E

Sold Comparables 9325 SYLMAR AVE, PANORAMA CITY YEAR BUILT

1950

UNIT MIX

BUILDING SF

8,156

4 (1+1)

UNITS

11+1NC

6 (2+1)

SALE DATE

-

2 (2+1 LI)

SALE PRICE

$3,000,000

2 (3+2-ADU)

GRM

11.49

CAP RATE

5.35%

PRICE/UNIT

$255,429

PRICE/SF

$339

8517 CEDROS AVE, PANORAMA CITY YEAR BUILT

1977

UNIT MIX

BUILDING SF

7,168

8 (2+1)

UNITS

8

SALE DATE

03/31/23

SALE PRICE

$2,200,000

GRM

11.50

CAP RATE

5.66%

PRICE/UNIT

$275,000

PRICE/SF

$307

15233 RAYEN ST, NORTH HILLS YEAR BUILT

1969

UNIT MIX

BUILDING SF

60,622

84 (1+1)

UNITS

84

SALE DATE

09/22/23

SALE PRICE

$19,940,000

GRM

12.64

CAP RATE

4.51%

PRICE/UNIT

$237,381

PRICE/SF

$329

Sold Comparables 8602 COLUMBUS AVE, NORTH HILLS YEAR BUILT

1978

BUILDING SF

30,080

UNITS

42

SALE DATE

09/22/23

SALE PRICE

$9,970,000

GRM

12.64

CAP RATE

4.51%

PRICE/UNIT

$237,381

PRICE/SF

$331

UNIT MIX 42 (1+1)

8144 SEPULVEDA PL, PANORAMA CITY YEAR BUILT

1952

BUILDING SF

5,418

UNITS

6

SALE DATE

10/09/23

SALE PRICE

$1,280,000

GRM

12.52

CAP RATE

4.42%

PRICE/UNIT

$213,333

PRICE/SF

$236

UNIT MIX 6 (2+1)

Sold Comparables 8932-8938 COLUMBUS AVE, NORTH HILLS YEAR BUILT

1959

BUILDING SF

9,480

UNITS

4

SALE DATE

09/27/23

SALE PRICE

$2,940,000

GRM

13.11

CAP RATE

4.33%

PRICE/UNIT

$245,000

PRICE/SF

$310

UNIT MIX 4 (1+1) 8 (2+1)

8924 HASKELL AVE, NORTH HILLS YEAR BUILT

1951

BUILDING SF

3,934

UNITS

4

SALE DATE

08/01/23

SALE PRICE

$1,570,000

GRM

15.04

CAP RATE

3.78%

PRICE/UNIT

$392,500

PRICE/SF

$399

UNIT MIX 2 (1+1) 2 (2+2)

Sold Comparable s

72

Sold Comparable s

1

9325 SYLMA R AVE

2

8517 C ED R O S AVE

3

15233 RAYEN ST

4

8602 CO LUMBUS AVE

5

8144 SEPULVEDA PL

6

8932- 893 8 CO LUMBUS AVE

7

8924 HAS K EL L AVE

73

R E N T C O M PA R A B L E S 9 3 2 5 S Y L M A R AV E

Rent Comparables 1+1

ADDRESS

2+2

Square Feet

Price

Square Feet

3+2

Price

Square Feet

Price

1

9933 Woodman Ave, Mission Hills, CA 91345

550

$1,845

View Online

2

10139 Woodley Ave, North Hills, CA 91343

900

$2,175

View Online

3

8444 Columbus Ave, North Hills, CA 9134

780

$2,050

View Online

4

15566 Rayen St, North Hills, CA 91343

1050

$2,400

View Online

5

8706 Parthenia Plz Unit 5 North Hills, CA 91343

810

$2,550

View Online

6

8822 Burnet Ave, Los Angeles, CA 91343

1400

$3,095

View Online

7

9223 Langdon Ave Unit A North Hills, CA 91343

1300

$3,339

View Online

75

Rent Comparables

76

1

9933 Woodman Ave, Mission Hills, CA 91345

2

10139 Woodley Ave, North Hills, CA 91343

3

8444 Columbus Ave, North Hills, CA 91343

4

15566 Rayen St, North Hills, CA 91343

5

8706 Parthenia Plz Unit 5 North Hills, CA 91343

6

8822 Burnet Ave, Los Angeles, CA 91343

7

9223 Langdon Ave Unit A North Hills, CA 91343

KELLY MORGAN With over 20 years of focused exploration and experience in capital markets such as Equity, Debt and Real Estate combined with Advertising and Marketing, Kelly Morgan Commercial Group brings a unique and unparalleled approach to the marketplace. We have dedicated ourselves to the deep understanding of the Southern California real estate market by taking the time to walk, examine, and analyze our landscape of submarkets.

Our clients best interest is our priority. Real estate marketing intelligence infused with financial planning has allowed us to help our clients make informed decisions about their real estate investment options.

Our educated agents work hard to get our sellers the highest price. Relationships and expertise are keys to creating Investment Property Wealth.

KELLY MORGAN 310.836.3638 Kelly@KellyMorganCommercial.com www.KellyMorganCommercial.com CA DRE# 01898026