Located within a Newly Established, Qualified “OPPORTUNITY ZONE”
4056 & 4108 Marathon Street, Los Angeles, CA 90029 30-Unit Multifamily Investment Opportunity in Silver Lake/Virgil Village
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4056 & 4108 Marathon Street, Los Angeles, CA 90029
Exclusively Listed: Rich Johns
Multifamily Investment Advisor 818.432.1575 richjohns@kw.com CalBRE Lic. #01432215
David Weinberger
Multifamily Investment Advisor 818.432.1583 davidweinberger@kw.com CalBRE Lic. #01349349
Adam Zunder
Multifamily Investment Advisor 818.554.5560 azunder@kw.com CalBRE Lic. #01821053
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CONTENTS
04 4108 & 4056 MARATHON STREET 10 EXECUTIVE SUMMARY 14 LOCATION OVERVIEW 20 MARKET COMPARABLES
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4056 & 4108
MARATHON STREET
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The O f fe r i n g KW Commercial is pleased to present 4056 & 4108 Marathon Street, a 30 unit apartment community plus a separate parcel providing parking, in one of L.A.’s most dynamic rental markets and the newly established Opportunity Zone , Silver Lake / Virgil Village, CA (90029). The asset reflects the energy of the local community. It’s a compelling investment opportunity located in the hippest and happening area of where Virgil Village and Sunset Junction. 4108 Marathon Street, built in 1928, offers an exceptional unit composition featuring Twenty-Six (26) Large One Bedroom-One Bathroom and Four (4) Two Bedroom-One Bathroom apartment homes encompassing +/-24,520 square feet of improvements. 4056 Marathon Street is a separate parcel included in the offering and provides 15 vehicle parking spaces. The parcel is zoned RD 1.5 in 4,250 SF of land. Parking lot improvements include new asphalt resurfacing, restriping and new gate/fencing. 4108 Marathon Street has undergone a gut-level renovation of Fifteen (15) of the Thirty (30) apartment homes (50% of units) with completely reimagined interior spaces, new baths and kitchens, gleaming wood floors, new doors, lighting, locks, hardware, and designer finishes throughout. Select 3rd floor apartment homes feature vaulted ceilings, dramatic city lights and skyline views.
Fifteen (15) units have not been renovated allowing future increased rent potential through natural attrition. 4108 Marathon, built in 1928, features a large basement that has been partially improved but unrealized as an additional amenity package creating a potential profit center for the next steward of the asset. The common and exterior spaces have undergone a dramatic renovation highlighted by new lobby/hallway/staircase flooring, lighting, laundry facilities; and outdoor spaces. The exterior has been transformed with a new color palate, architectural moldings, awnings, drought resistant landscaping and 24 hour, 12 camera video surveillance system. The roof has been upgraded with a cool roof system and the foundation has recently been retrofitted. 4056 & 4108 Marathon Street are located mere steps from Virgil Village, L.A.’s latest hip neighborhood where those “in-the-know” frequent Sqirl Cafe and Twig & Twine along with numerous other entertainment venues. Silver Lake / Virgil Village, CA (90029) is as diverse as the people living in it. Thanks to its neighborhood feel, the area is perfect for young people looking for a dynamic location and a community vibe. The area is continually growing — with an ever-increasing mix of stylish boutiques, restaurants, bars, coffee shops and everything in between.
i n ve s t m e n t highlights THE OPPORTUNITY:
4056 & 4108 Marathon Street is a 30-unit investment opportunity inclusive of separate parcel for parking, located in a newly established qualified “OPPORTUNITY ZONE� in Silver Lake / Virgil Village, a submarket of Los Angeles known for excellent rent growth and very low vacancy rates.
IMMEDIATE RETURNS:
4056 & 4108 Marathon Street has undergone a gut-level renovation of Fifteen (15) of the Thirty (30) apartment homes (50% of units) with a strong resident base and market rents thus facilitating strong and stable income metrics. 4056 Marathon Street, a separate nearby parcel accommodates parking for 15 vehicles.
QUALITY RENOVATIONS:
4108 Marathon Street unit interior renovations encompass completely reimaged interior spaces in 50% of units highlighted by gut-level renovated baths and kitchens, new flooring, new doors, lighting, locks, hardware, and designer finishes throughout. The common areas are upgraded with new flooring and lighting in the hallways & stairwells, laundry facilities, and public outdoor spaces. The exterior has been transformed with a new color palette, awnings, and drought resistant landscaping. The roof has been upgraded with a cool roof system and the foundation has recently been retrofitted.
OPPORTUNITY ZONE BENEFITS:
4056 & 4018 MARATHON is located within a newly established Qualified Opportunity Zone for investment, established by the Tax Cuts and Jobs Act, Section 1400Z. The new section 1400Z allows any taxpayer to defer paying tax on capital gains from the sale of property if those gains are timely invested in a Qualified Opportunity Fund (QOF) which, in turn, must invest 90 percent of its assets in businesses located or property used in designated
VALUE ADD OPPORTUNITY:
4108 Marathon has 15 units that have not been renovated, allowing future increased rent potential through natural attrition as the remaining units turn over. An additional lower level updated “flex-space” exists with private entry which could provide for additional value and/or amenity component.
WELL LOCATED:
4056 & 4108 Marathon Street is located within the heart of Virgil Village and less than 1 mile from Sunset Junction with endless dining and shopping options. A short drive puts you in Hollywood, Echo Park, or DTLA.
GREAT WALKABILITY:
With an 87 Walk Score, 4056 & 4108 Marathon Street is a “Walker’s Paradise”– most errands do not require the use of a car.
EXCEPTIONAL FINANCING / LOAN OPTIONS:
Buyers can acquire the property with as little as 35% down payment with historically low interest rates and attractive market rate financing options.
TRANSIT ORIENTED:
4056 & 4108 Marathon Street is located less than a 1/2 mile from the Vermont/ Santa Monica Redline station for an easy commute to Hollywood or Downtown Los Angeles.
STRONG EMPLOYMENT:
Hollywood-Silver Lake is one of the strongest employment centers in the Los Angeles metropolitan area and offers access to a diverse set of employers.
LACK OF HOUSING AFFORDABILITY:
There is a significant affordability gap to home ownership in the HollywoodSilver Lake submarket. As the median home price in the area is approximately $954k (median list price of $743/sf), a typical monthly mortgage payment is between 2-3 times more than the average rent in the area.
NO SEISMIC RETROFIT REQUIRED:
The property is not on the list of buildings that require a seismic retrofit.
NEW COMMERCIAL DEVELOPMENTS:
More than 2.3 million square feet of commercial space is currently under development in the Hollywood-Silver Lake submarket representing more than $1.58 billion in project costs. It is estimated that nearly 6,500 new jobs will be created in Hollywood alone as a result of these new developments.
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EXTERIOR SPACES
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INTERIOR LIVING SPACES
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EXECUTIVE S U M M A R Y
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FINANCIAL SUMMARY FINANCIAL INDICATORS Offering Price Down Payment Current CAP Market CAP Current GRM Market GRM Cost Per SF Cost Per Unit
$9,950,000 #REF! 4.1% 6.4% 16.0 11.7 $406 $331,667
Cash on Cash Return Expenses Per Unit Expenses Per Sq Ft
4.1% $6,607 $8.08
BUILDING DATA Units Year Built Lot Sq Ft Bldg Gross Sq Ft Parking Spaces
30 1928 14,790 24,520 15
ESTIMATED ANNUALIZED EXPENSES New Property Taxes Water, Power & Gas Utilities Waste Removal Property Insurance Registration Fees Repairs & Maintenance Pest Control & Landscape Onsite Management Offsite Management (3%) Total Estimated Expenses
$119,400 $22,577 $3,251 $12,928 $1,620 $6,000 $3,000 $10,800 $18,640 -$198,216
4108 & 4056 Marathon Street, Los Angeles, CA 90029
SOURCE OF INCOME # of Units Unit Type 26 1 Bed / 1 Bath 4 2 Bed / 1 Bath Total Rental Income Registration Fees Flex Space - Updated Lower Level Laundry Income Estimate Parking Income (15 Spaces) Total Monthly Income Total Annual Income
CURRENT RENTS Avg. Rent Total $1,649 $42,863 $1,902 $7,610 $50,473 $65 $0 $290 $950 $51,778 $621,334
MARKET RENTS Avg. Rent Income $2,146 $55,800 $2,800 $11,200 $67,000 $65 $1,500 $290 $2,250 $71,105 $853,260
EST. ANNUALIZED OPERATING DATA Scheduled Gross Income Less Vacancy Gross Operating Income Less Expenses Net Operating Income
CURRENT
MARKET
2.0% 33%
$621,334 ($12,427) $608,907 ($198,216) $410,691
2.0% 23%
$853,260 ($17,065) $836,195 ($198,216) $637,979
Notations: 1) OnSite Manager: On-Site Manager receives a lodging credit of $900 per month towards monthly rent of $900 2) Repairs & Maintenance: Repairs and Maintenance is underwritten as a pro forma expense of $200 / unit / year, post renovation of the property. 3) Contract Service: Expenses are underwritten for Pest Control and Landscaping ($370/mo combined) and Trash ($270/mo) based on actual expenses. 4) Utilities: Utilities are based upon 2017 figures. 5) Property Management Fee: Projected at 3% of Total Annual Income. 6) Real Estate Taxes: Taxes have been underwritten based upon the 2016 tax rate of 1.2% 7) Property Insurance: Based upon 2017 figures.
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RENT ROLL
4108 & 4056 Marathon Street, Los Angeles, CA 90029
UNIT
STATUS
UNIT TYPE
NOTATIONS
101 102 103 104 105 106 107 108 109 110 201 202 203 204 205 206 207 208 209 210 301 302 303 304 305
Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied MGR* Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied
1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 2 Bed / 1 Bath 2 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 2 Bed / 1 Bath 2 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath
Renovated w/ Parking
306 307 308 309 310
Occupied Occupied Occupied Occupied Occupied
1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath 1 Bed / 1 Bath
w/ Parking Renovated w/ Parking w/ Parking Renovated w/ Parking
Renovated w/ Parking Renovated w/ Parking Renovated w/ Parking Renovated w/ Parking Renovated w/ Parking w/ Parking Renovated W/ 2 Parking Renovated
CURRENT RENT $1,875 $1,366 $918 $1,152 $1,167 $1,311 $1,850 $1,202 $1,366 $1,900 $1,238 $2,750 $1,202 $1,128 $2,012 $1,950 $2,050 $1,950 $1,950 $1,171 $1,275 $2,736 $922 $2,400 $1,163
$50
$100 $100
$100 $100 $100
$100
Renovated w/ Parking Renovated w/ Parking Renovated Renovated Renovated
$2,050 $2,118 $2,100 $2,050 $2,150
$100 $100
One Unassigned Parking Space 0
$50,472.80
$950
* Onsite Manager rent shown as proforma - Exit deal to be negotiated. On-Site Manager receives a lodging credit of $900 per month towards monthly rent of $900
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CURRENT INCOME - PARKING
$100
MARKET RENT $2,050 $2,050 $2,050 $2,050 $2,050 $2,050 $2,050 $2,050 $2,050 $2,050 $2,050 $2,750 $2,750 $2,150 $2,150 $2,150 $2,150 $2,150 $2,150 $2,150 $2,250 $2,950 $2,750 $2,450 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $67,000
MARKET INCOME - PARKING $150
$150 $150 $150 $150 $150
$150 $150 $150 $150
$150 $300
$150 $150
$150 $2,400
Property Details 4056 Marathon Street Los Angeles, CA 90029 4108 Marathon Street Los Angeles, CA 90029 Property Address: Property Usage: Assessor’s Parcel Number: Building: Year Built: Land Use: Zoning: Stories: SITE DESCRIPTION Units: Gross Square Footage: Lot Size Square Footage: UTILITIES Electric: Gas: CONSTRUCTION Foundation: Framing: Exterior: Roof:
4056 Marathon Street Parking Lot 5539-020-009 n/a n/a 15 Parking Spaces LARD1.5 n/a
4108 Marathon Street 30 Unit Apartment Building 5539-021-001 One 1928 Apartments LARD1.5 Three
± 4,250 SF
30 ± 24,520 SF ±10,534 SF
Separately Metered- LADWP Separately Metered- Southern CA Gas Company
Raised Foundation Wood Frame Stucco Pitched / Flat
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LO C AT I O N O V E R V I E W
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4108 MARATHON STREET LOS ANGELES, CA 90029
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VIRGIL VILLAGE Virgil Village is a major arterial and intermodal thoroughfare with significant amounts of daily bus, car, bicycle and pedestrian traffic. This urban neighborhood is home to numerous small businesses and multi-family residences. Through initial funding, LANI assisted the Virgil Village community in developing a work plan detailing area demographics, assets, need and priorities. Funding to implement a portion of the community determined improvement priorities was secured through the federally funded Transportation Enhancement Act. The streetscape improvements, completed in 2001, included decorative pedestrian lights and crosswalks, trees and decorative tree grates, sidewalk repair and bus shelters with access ramps. In 2010 LANI secured funding through CALTRANS to conduct a community conceptual planning process. The resulting document now serves as a guide for the design development and construction of physical improvements in Virgil Village. The plan provides a traffic calming component and a streetscape improvement plan with in-depth descriptions of the improvements agreed upon by the community including cost estimates. Priority improvements include: plazas, additional enhanced crosswalks, curb extensions, street trees and new street furniture. The Office of Councilman Mitch O’Farrell, Los Angeles City Council District 13, recently opened the Virgil Village bike lane with much enthusiasm from the neighborhood. The Los Angeles Chapter of the American Planning Association recognized the Virgil Village Conceptual Plan with an award for Public Outreach in 2012.
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This men’s clothing boutique inhabits a building off Virgil that used to be a motor scooter showroom. Now, they stock a range of new and vintage clothing and an eclectic assortment of homewares, objects, books and records. Dave says, “I like the stuff that Charlie stocks here. It’s smart and fun, and isn’t too serious. For lack of a better way to put it, it’s like ‘California lifestyle’—but very practical. You’re not gonna be that guy that kind of looks the part. They’re outfitting the people who would really walk around in that stuff.”
Just around the corner from Virgil Normal is Vinny’s Barber Shop. “I go to Vinny’s for a haircut every three weeks. I visit Charlie every time,” Dave says. As the story was told, Omar, the owner, got sick of working for other people and came up with a goal to start a business before he turned 30. It may have seemed ambitious given he was around 29 at the time, but he got to work and made it happen. Since then, Vinny’s has become a hit with the local guys.
Silver Lake SUNSET JUNCTION.... 4056 & 4108 Marathon Street is located blocks away from the core of three of the most enticing neighborhoods in Los Angeles County- Hollywood, Silver Lake, and Los Feliz. Due to its eclectic location and walkability, residents enjoy unparalleled access to a wide variety of employment, entertainment, and cultural experiences that few other neighborhoods in Los Angeles can match. As part of its recent restoration, Hollywood continues to set the bar in terms of being a major employment center and highly sought after location for a younger more hip clientele that is looking for a true urban experience. Moreover, with the merging of old Hollywood and today’s tech savvy startups, the area is ripe for continued success in enticing a younger renter demographic. Following this uprising of trendy and eclectic residents is a diverse base of restaurants, bars, nightclubs, and retail shops that bring a wide range of cultural experiences to the area. Within the existing location, residents have the opportunity to walk to nearby restaurants and cafes, take the metro into the heart of Hollywood, or spend the afternoon in an adjacent neighborhood via short commute.
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LOS FELIZ... Located a 10-15 minute walk north of the subject property along Vermont and Hillhurst Avenues, Los Feliz Village features a wide array of local restaurants, boutique shops, artsy coffee shops, theaters, gastrobus, and parks. Notable establishments include The Dresden Room, which was prominently featured in the movie Swingers; Fred 62, a retro 1960’s California 24hour diner, and Alcove Cafe & Bakery, a converted bungalow which has become one of the most reviewed and most popular brunch destinations in Los Angeles. Locals enjoy Barnsdall Art Park which plays host to Los Feliz farmer’s market and local theater at Los Feliz Five Star Theaters know for its signature marquee signage. The Rockwell: Table & Stage, another local favorite, it offers live music performances combined with seasonal cuisine and cocktails.
HOLLYWOOD... World Famous due to its arts and entertainment industry. Hollywood is a densely populated and vibrant part of Los Angeles. With recent uprising, the area offers over 75 restaurants, world famous nightclubs, and music venues, and countless jobs in the entertainment and gaming industries.
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LAKE silver
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M A R K E T COMPARABLES
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RENT
COMPARABLES 4108 Marathon Street 1)
3622 Ellsworth Street
2)
4018 Monroe Street
3)
1736 Griffith Park Boulevard
4)
4356 Burns Avenue
5)
1849 North Easterly Terrace
6)
1909 North Commonwealth Avenue
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RENT
COMPARABLES TWO BEDROOM Property
Units
Year Built
SF
Rent/
Rent $2,300
-
-
$2,800
-
-
1
4108 Marathon Street Los Angeles, CA 90029
30
1928
Private Owner Professionally Managed
2
3622 Ellsworth Street Los Angeles, CA 90026
4
1924
Private Owner Owner Managed
$2,950
-
-
-
-
-
3
4018 Monroe Street Los Angeles, CA 90029
7
1926
Private Owner Owner Managed
$2,500
-
-
-
-
-
4
1736 Griffith Park Boulevard Los Angeles, CA 90026
6
1924
Private Owner Owner Managed
$2,700
750
$3.60
-
-
-
5
4356 Burns Avenue Los Angeles, CA 90029
5
1931
Private Owner Owner Managed
-
-
-
$2,900
-
-
6
1849 North Easterly Terrace Los Angeles, CA 90026
4
1956
Private Owner Owner Managed
-
-
-
$3,200
950
$3.36
7
1909 North Commonwealth Avenue Los Angeles, CA 90027
2
1924
Private Owner Owner Managed
-
-
-
$3,100
-
$3.60
$3,066
950
$3.60 $3.60
$3,200 $2,900
950 950
AVERAGE:
HIGH: LOW:
22
SF
Rent/SF Rent
Owner / Manager
$2,716 750 $2,950 750 $2,500 750
$3.36 $3.36 $3.36
SALE
COMPARABLES 4108 Marathon Street 1)
941-943 North Vendome Street
2)
6500 Yucca Street
3)
425 South Detroit Street
4)
6210-6224 Yucca Street
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SALE
COMPARABLES PROPERTY
BUILT
UNITS BLDG.SF
PRICE
CAP
GRM
$/UNIT
$/SF
CLOSED
STUDIO
1BDR
2BDR
34(0+1)
33(1+1)
33(2+1)
31,585 1
1931
8
7,184
$3,150,000
4.41%
-
$393,750
$438.47
12/6/2017
1928
100
94,435
$32,315,000
-
-
$323,150
$342.19
12/13/2017
1928
23
22,702
$9,395,000
4.0%
16.99
$408,478.26
$413.84
Pending
1953
40
31,585
$17,000,000
-
-
$425,000
$538.23
12/22/2017
941-943 North Vendome Street Los Angeles, CA 90026
2 6500 Yucca Street Los Angeles, CA 90028
3
425 South Detroit Street Los Angeles, CA 90036
4
6210-6224 Yucca Street Los Angeles, CA 90028
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40(0+1)
DEMOGRAPHICS SNAPSHOT S I L V E R L A K E POPULATION
TOTAL POPULATION MEDIAN AGE MEDIAN AGE (MALE) MEDIAN AGE (FEMALE)
20,510 33.2 32.3 34.5
HOUSEHOLDS & INCOME
TOTAL HOUSEHOLDS # OF PERSONS PER HH AVERAGE HH INCOME AVERAGE HH HOUSE VALUE
L O S
0.5 MILES
0.5 MILES 7,824 2.6 $49,012 $538,547
1 MILE
1.5 MILES
63,515 34.4 33.8 35.2
155,224 34.9 34.2 35.9
1 MILE
1.5 MILES
24,750 2.6 $55,634 $666,991
59,411 2.6 $57,375 $667,160
F E L I Z
POPULATION
0.5 MILES
TOTAL POPULATION MEDIAN AGE MEDIAN AGE (MALE) MEDIAN AGE (FEMALE)
HOUSEHOLDS & INCOME TOTAL HOUSEHOLDS # OF PERSONS PER HH AVERAGE HH INCOME AVERAGE HH HOUSE VALUE
37,625 38.7 38.1 38.9
0.5 MILES 18,622 2.0 $86,604 $744,616
1 MILE
1.5 MILES
62,746 37.1 36.3 38.0
363,187 35.4 34.6 36.4
1 MILE
1.5 MILES
24,750 2.4 $70,571 $677,885
143,793 2.5 $61,330 $647,692
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4056 & 4108 M A R AT H O N S T R E E T Exclusively Listed By:
Rich Johns
Multifamily Investment Advisor 818.432.1575 richjohns@kw.com CalBRE Lic. #01432215
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David Weinberger Multifamily Investment Advisor 818.432.1583 davidweinberger@kw.com CalBRE Lic. #01349349
Adam Zunder
Multifamily Investment Advisor 818.432.1634 azunder@kw.com CalBRE Lic. #01821053