KOREATOWN
Unique Value-Add Opportunity with Low Cost per Unit 1
802 South Manhattan Place, Los Angeles, CA 90005
Nick Astrupgaard KW Commercial Multifamily Advisor
818.432.1580
nastrupgaard@kw.com DRE #01893466
Rich Johns
KW Commercial Multifamily Advisor
818.432.1575 richjohns@kw.com DRE #01432215
CONFIDENTIALITY AGREEMENT
NON-ENDORSEMENT NOTICE
The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from KW Commercial and should not be made available to any other person or entity without the written consent of KW Commercial. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. 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 fi nancial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the fi nancial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, 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 make 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. © 2017 KW Commercial.
KW Commercial is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of KW Commercial, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of KW Commercial, and is solely included for the purpose of providing prospective purchasers information about this listing.
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SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE LISTING AGENTS TO SCHEDULE A TOUR.
802 S. Manhattan Place Los Angeles, CA 90005
Koreatown - Value-Add Opportunity with Low Cost per Unit.
04 07 14 18
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EXECUTIVE SUMMARY INVESTMENT HIGHLIGHTS FINANCIAL ANALYSIS THE PROPERTY
EXECUTIVE SUMMARY
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The Offering KW Commercial is pleased to prepare an opinion of value for 802 S Manhattan Place, located in the heart of Koreatown. The asset is a unique and rare, pure valueadd opportunity for the savvy Investor who wants to put their creative stamp on a legacy building. The building is a mix of twelve (12) studios and two (2) 1+1s. The owners are in the process of performingthe seismic-retrofit for the soft-story parking and will have it completed by the end of March 2019 and before closing.The 802 S Manhattan Place is located just one block west of Western Ave, and three blocks south ofWilshire. Its Walk score is 96out of 100 and considered a Walker’s Paradise. Koreatown is in the midst of a huge transformation with 30+ developments being built and over 3,000 units coming to market within the next two years. This will undoubtedly raise the tenant profile for the areaattracting a new demographic of higher paying renters.
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Investment Highlights THE OPPORTUNITY 802 S Manhattan Place is a 14-unit apartment community located in the highly desirable neighborhood of Koreatown. The location features a densely populated rental submarket known for excellent rent growth and extremely low vacancy rates.
VALUE ADD OPPORTUNITY 802 S Manhattan Placecurrent income metrics arebelow-marketthusallowing future increased rent potential through renovationsas units turn over.
WELL LOCATED 802 S Manhattan Place is situated in the heart of Koreatown and offers rapid access to Downtown Los Angeles, the Westside, Echo Park and the 110 and 101 freeways.
STRONG EMPLOYMENT 802 S Manhattan Place is centrally located amongst some of strongest employment centers in the Los Angeles metropolitan area and offers access to a diverse set of employers.
SEISMIC RETROFIT 802 S Manhattan Place is in the process of completing the seismic-retrofit for the soft-story parking areas with a planned completion of April 2019.
LOCATED NEAR NEW COMMERCIAL DEVELOPMENTS More than 2.3 million square feet of commercial space is currently under development in the Koreatown submarket representing more than $1.58 billion in project costs. It is estimated that nearly 6,500 new jobs will be created in midtown Los Angeles alone because of these new developments. representing more than $1.58 billion in project costs. It is estimated that nearly 6,500 new jobs will be created in midtown Los Angeles alone because of these new
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developments.
“
A Prime Koreatown Location Koreatown, with its prime location, great restaurant scene, and crucial transit access, is on the cusp of a big-time boom. – Curbed LA
Recent Leasing Leasing Activity Wilshire, K2LA, The Vermont) Suggests • Recent Activity of of“Class “ClassA” A”Product Product(3033 (3033 Wilshire, K2LA, The Vermont) Clear Demand Luxury Product at Product Price Point Contemplated Suggests Clear for Demand for Luxury at Well PriceAbove PointsThose Well Above Those in the Financial Analysis S Manhattan Place postSouth renovation. Contemplated in for the802 Financial Analysis for 730 Serrano post renovation.
• Koreatown’s luxury product has largely been concentrated in larger communities, depriving residents seeking more boutique living experiences in smaller communities.
• Koreatown is Rated A+ in Amenities by AreaVibes.
KOREATOWN IS BOOMING
URBAN LIVING WITH WALKABILITY
200,000+ square feet of retail space is currently in development with new retailers like Target opening on 6th and Virgil, and Yoga Works having already opened on 7th Street.
As the most densely populated area in Los Angeles, Koreatown is a highly walkable submarket served by multiple Metro rail and bus lines. Residents can travel on foot to complete their daily errands and stroll to the many restaurants, clubs, chic hotels and restaurants that make up Koreatown’s vibrant nightlife. While there is a newness to Koreatown, its palm-lined streets are also the Manhattan rich in architectural charm and cultural heritage. Scoring 96 out of 100, Serrano Apartments is Apartments is located in what walkscore.com considers a “Walker’s Paradise”. located in what walkscore.com considers a “Walker’s Paradise”.
LOCATION FUNDAMENTALS
NEW YORK IN LA
MOST SEARCHED NEIGHBORHOOD
AFFORDABILITY GAP – BUY VS. RENT
Millennials have ditched the suburbs for a more active and dynamic urban lifestyle. Many don’t own or want to own cars, so they rely on walking, biking, Metro or Uber. There is a limited supply of housing in Los Angeles, and especially in Koreatown, which is causing upward pressure on rents. Research rm Axiometrics projects rental rates are to increase by 25% over the next ve years.
Koreatown is the #1 searched-for rental market in Los Angeles, well ahead of other popular submarkets such as Hollywood, West Los Angeles and Mid-City, according to the online property rental site Zumper.com. The convergence of gourmet-restaurants, shopping and chic hotels like The LINE is a leading reason behind Koreatown’s emergence as “America’s Hippest Neighborhood.”
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• Home to 37 Million SF of Multifamily, Single Family, Ofce, Retail, and Other Uses.
| 730 South Serrano
The Metro been a catalyst for transportation-oriented growth, leading to demographic shifts in The Metrohas has been a catalyst for transportation-oriented growth, leading to demographic areas in like Downtown LA, Koreatown, Hollywood and Pasadena. LA residents have now a greater shifts areas like Downtown LA, Koreatown, Hollywood and Pasadena. LA now residents have in where live while major employment hubs. Residents at achoice greater choice they in where they still livebeing whileconnected still being to connected to major employment hubs. 802 S Manhattan Place Serrano are within a within 7-minute walk of the Wilshire/Western station on station the Purple Residents at 730 South are a 7-minute walk of the Wilshire/Western on LinePurple which Line provides them with connectivity to other metro rail lines and submarkets the which provides them with connectivity to other metro railsurrounding lines and surrounding like Downtown Hollywood, City, North City, Santa Monica, and submarkets likeLA, Downtown LA,Studio Hollywood, StudioHollywood, City, NorthCulver Hollywood, Culver City, Santa Pasadena. Monica, and Pasadena.
The median million making home purchases out The median neighborhood neighborhoodhome homeprice priceisisapproximately approximatley$1.2 $1.2 million making home purchases of reach for for most local renters. Renting at 802 S Manhattan PlaceAvenue (post renovation) offers tenants out of reach most local renters. Renting at 730 South Serrano (post renovation) offers a modern, sophisticated alternative at a traction the cost home This disparity is a tenants a modern, sophisticated alternative at aof fraction ofof the costownership. of home ownership. This leading reason behind high occupancy demandand throughout marketplace. disparity is a leading reason behind highand occupancy demandthe throughout the marketplace.
CENTRALLY LOCATED - SUPER HIGH DENSITY - 3 SQUARE MILE COMMUNITY | RAPIDLY EXPANDING RENTAL MARKET
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TRUE TRANSPORTATION ORIENTED COMMUNITY - NUMEROUS SUBWAY OPTIONS | RICH IN AMENITIES - RESTAURANTS, RETAIL, ENTERTAINMENT
Market Overview |
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Metro Los Angeles has experienced a complete transformation with markets like Echo Park, Silverlake, Hollywood, and Downtown LA becoming cities within cities, each with their own unique attractions and appeal. 802 S Manhattan Place sits at the epicenter of this renaissance, offering residents accessibility to these prime destinations and the amenities they offer. Given the availability of Uber and Lyft, as well as Koreatown’s transit system (the Wilshire/Western Metro station is three blocks away), future residents will be able to access the best of Los Angeles without the burden of owning a vehicle.
802 S.
Manhattan Pl
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HOLLYWOOD
LOS FELIZ
ECHO PARK
730 SOUTH 802 S. SERRANO
Manhattan THE CENTER OF
LARCHMONT VILLAGE MIRACLE MILE
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LA
SILVERLAKE DOWNTOWN LA
Market Overview |
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Transit Oriented The property’s property’s proximity Line allows immediate access to Downtown LA andLA 500,000+ jobs in The proximity to tothe thePurple PurpleMetro Metro Line allows immediate access to Downtown and 500,000+ jobs in less 15 minutes. Additionally, TheCenter/Koreatown Wilshire Center/Koreatown DASH bus line enables residents to less than 15 than minutes. Additionally, The Wilshire DASH bus line enables residents to quickly move quickly move the area immediately 802This S Manhattan Place. This to accessibility appeals to the about the areaabout immediately surrounding 730surrounding South Serrano. accessibility appeals the cosmopolitan spirit of cosmopolitan spirit of recent gentrification of the immediate area surrounding the property continues to draw the subject property’s target renter prole who desire to have access to the best of everything within arm’s reach. The attractive lifestyle amenities within walking distance. A variety of highly regarded dining experiences, cafés, recent gentri cation of the immediateand areanightlife surrounding thewill property continues to more draw attractive amenities boutique shopping, entertainment, options continue to draw renters to lifestyle the area thereby within walking highly regarded experiences, cafés, boutique shopping, entertainment, increasing the distance. demand Atovariety live atof properties like 802dining S Manhattan Place. and nightlife options will continue to draw more renters to the area thereby increasing the demand to live at properties like 730 South Serrano. DESTINATION Wilshire/Vermont MacArthur Park 7th Street / Metro Center (DTLA) Hollywood/Highland USC Studio City
TRAVEL TIME (MINUTES) BIKE METRO DRIVING 9 10 7 14 12 9 21 14 16 29 32 23 24 34 15 N/A 34 19
1 mile
730 SOUTH SERRANO
3 miles
6 miles
9 miles
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10 | 730 South Serrano
True Walkability The subject property is within walking distance of popular destinations such as The Wiltern, R Bar, Beer Belly, The LINE Hotel, and countless other local amenities along Wilshire Boulevard and Western Avenue thereby offering residents the perfect balance of urban activity and quiet neighborhood charm. Highlighted below are notable establishments within walking distance.
Restaurants, Bars, and Hotels
Grocery Stores & Markets
Pot Lobby Bar Lock & Key Mountain Café Beer Belly R Bar The Walker Inn The Normandie Club Cassell’s Burgers Apt 503 Lounge The Virgil Sumo Dog Horse’s Mouth The LINE Hotel Hotel Normandie Shelter Hotel Quarters Korean BBQ
Ralphs H Mart Hank Kook Zion Market Galleria Market Jons Marketplace Vons California Market Plaza Market Sang Nok Soo Asian Market Family Discount Store East West Market
Entertainment & Shopping Target (Coming Soon) The Wiltern Shrine Karaoke Koreatown Galleria Vermont Galleria Koreatown Plaza
The Wiltern
The Walker Inn
Quarters Korean BBQ
The LINE Hotel
Fitness & Spa Yoga Works Whole Body Pilates Strength RX Crosst WilFit Sports Club Fitness M Flywheel Sports 24 Hour Fitness Movement Pilates Taejo Kickboxing Wi Spa Beverly Hot Spring
96 Walk Score 78 Transit Score 56 Bike Score
“WALKER’S PARADISE” Most errands do not require a car. “EXCELLENT TRANSIT” Transit is convenient for most trips.
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“BIKEABLE” Flat as a pancake, minimal bike lanes.
Beer Belly
Market Overview | 11
FINANCIAL ANALYSIS
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FINANCIAL SUMMARY
802 S
FINANCIAL SUMMARY FINANCIAL INDICATORS
ESTIMATED ANNUALIZED EXPENSES
FINANCIAL SUMMARY
Price Down Payment FINANCIAL INDICATORS Price Current GRM Down Payment
Market GRM
$2,800,000 New Property Taxes #¡REF! Utilities Services: ESTIMATED ANNUALIZED EXPENSES $2,800,000 #¡REF!
Current GRM
18.22
Cost Per Market GRMUnit
11.35
Cost Per Unit
Cash on Cash Return
$34,160 SOURCE OF INCOME
18.22New Property Taxes Electricity
$34,160
11.35Electricity
$1,630
Utilities Services:
Water & Sewer
$200,000 Water & Sewer Gas
$200,000
Gas #¡REF!
Waste Removal
Waste Removal
$5,414
Total Monthly Income
Total Annual Income
$3,051
Total Annual Income $153,640.44
Expenses Per Expenses Per Sq Ft Sq Ft
$9.54
$9.54Registration Fees Registration Fees
$588
APN# 5093-003-011 Units
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Pest Control
1957
Lot Sq Ft
6,879
Bldg Gross Sq Ft
6,571
1957
9
Units
Year Built
Lot SqSpaces Ft Parking Bldg Gross Sq Ft
14
-$62,670
Total Estimated Expenses
$885
EST. ANNUALIZED OPERATING DATA
$6,300
Scheduled Gross Income
$624
Less Vacancy
Gross Operating Income Less Expenses
-$62,670
$215 $20,565
CURRENT
Scheduled Gross 2.0% Income ($3,073) Less Vacancy
41.6%
($62,670)
6,571
Pre-Tax Cash Flow
Net Operating Income
Contract Service: Expenses for Pest Control (actual 2018), Landscaping (actual 2018) and Trash (actual 2018) based on market rates. Utilities: The building is separately metered for all utilities - actual 2018 expenses shown for electricity, water & sewer and gas utilities.
Notations:
Real Estate Taxes: Taxes have been underwritten based upon a tax rate of 1.22%
Repairs & Maintenance: Repairs and Maintenance is underwritten as a pro forma expense of $450 per unit per year (Post Renovation)
LAHD Registration Fees: Estimated at $42 / unit per year
Landscaping (actual 2018) and Trash (actual 2018) based on market rates.
Parking: There are Nine (9) total parking spots. Units 2, 10, 11, 12, 14 leased without parking.
Utilities: The building is separately metered for all utilities - actual 2018 expenses shown for electricity, water & sewer and gas utilities. Real Estate Taxes: Taxes have been underwritten based upon a tax rate of 1.22% LAHD Registration Fees: Estimated at $42 / unit per year Property Insurance expense is actual 2018 expense. Parking: There are Nine (9) total parking spots. Units 2, 10, 11, 12, 14 leased without parking.
Less Loan Payment Pre-Tax Cash Flow
CURR
$246,780 2.0%
$150,568
Less Expenses
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MARKET
$153,640
Less Loan Payment
Property Insurance expense is actual 2018 expense. Contract Service: Expenses for Pest Control (actual 2018),
$246,780
EST. ANNUALIZED OPERATING DATA
6,879
Repairs & Maintenance: Repairs and Maintenance is underwritten as a pro forma expense of $450 per unit per year (Post Renovation)
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$215
Gross Operating Income $87,898
Parking Spaces
$3,750 $20,350
$12,803.37
Net Operating Income
Notations:
$1,875
$12,588.37
Income$1,163.32 $16,600
$588
$885 $6,300
Repairs & Maintenance$624
Pest Control TotalLAR4 Estimated Expenses
Year Built
$2,326.64
Total Monthly Income
$3,051
LAR4
$7,378 Total Rental Income 1 Bed / 1 Bath $1,163.32
2 Laundry Income
$4,476 Property Insurance Property Insurance Landscaping
Total Avg. Rent 1 Bed / 1 Bath $10,261.73 $1,383
$5,414
$4,476
Repairs & Maintenance
CURRENT
Avg. Rent $855.14
$2,640
Expenses Per Unit
BUILDING DATA
Studio
2
Laundry Income
Expenses Per Unit
APN# 5093-003-011
Unit Type $1,630
CURR
Unit Type MARKET RENT Avg. Rent Studio Post Renovation $855.14
Total Rental Income$2,640
#¡REF!
Landscaping
# of Units 12
# of Units 12
$7,378
Cash on Cash Return
BUILDING DATA
SOURCE OF INCOME 802 S Manhattan Place, Los Angeles, CA 90005
($4,936) $241,844
25%
($62,670)
2.0%
$179,174
$0
$0
$87,898
$179,174
41.6%
RENT ROLL
RENT ROLL UNIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14
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STATUS Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied Occupied
UNIT TYPE 1 BR + 1 BA Studio Studio Studio Studio Studio Studio 1 BR + 1 BA Studio Studio Studio Studio Studio Studio
PARKING Included n/a Included Included Included Included Included Included Included n/a n/a n/a Included n/a
CURRENT $ 1,286.64 $ 843.46 $ 877.40 $ 848.16 $ 906.64 $ 785.73 $ 789.66 $ 1,040.00 $ 858.00 $ 775.15 $ 725.91 $ 1,019.70 $ 947.92 $ 884.00 $12,588.37
MARKET RENT Post Renovation $1,875 $1,325 $1,425 $1,425 $1,425 $1,425 $1,425 $1,875 $1,425 $1,325 $1,325 $1,325 $1,425 $1,325 $20,350
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THE PROPERTY
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PROPERTY DETAILS
802 S 730 Manhattan Place SOUTH SERRANO Community Address:
730 South Serrano Avenue, Los Angeles, CA 90005
Property Address 802 S Manhattan Pl, Los Angeles, CA 90005 Assessor's Parcel Number: 5093-014-020 Assessors Parcel Number 5093-003-011 Land Use: Apartments Buildings One Buildings: One Year Built 1957 Stories: Three Zoning: LAR4 Land Use Apartments Year Built: 1961 Zoning LAR4 Stories 2 SITE DESCRIPTION Units: 34* SITE DESCRIPTION Net Rentable Square Footage: 26,415 SF Units 14 Parcel Size: 0.53 Acres / 22,940 SF Density: 64 DU/Acre Gross Square Footage 6,571 Parking: 36 Covered Spaces Parcel Size 6,879 UTILITIES Parking 9 Spaces Water: LADWP - Master Metered UTILITIES Sewer: LADWP - Master Metered Electric: LADWP - SeparatelyMetered Metered Water Master - LADWP Southern California Gas Company Master Metered Sewer Master Metered - -LADWP Gas: All But Two Units Are All Electric Electricity Separately Metered Units 29 and 30 have a Gas Range and are on the House Meter Gas Separately Metered CONSTRUCTION Foundation Concrete Slab CONSTRUCTION Framing Wood Frame Foundation Raised Foundation Exterior Stucco Framing Wood Frame Roof Flat Torch Down Exterior Stucco Parking Surface Concrete Roof Pitched Topography Flat Topography Flat MECHANICAL HVAC Wall Units MECHANICAL Fire Protection Hard-Wired Smoke Alarms and Sprinklers in Common Areas HVAC Wall and/or Central Boiler (40 Gallons),Window Units Water Heaters Units 29 and 30 have Separate Water Heaters in the Units Fire Protection Smoke Detectors Laundry One On Site LaundryBoiler Room (2W/2D - Leased) Water Heaters Central Plumbing Partial Copper
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*Four units are non-conforming.
The Property | 23
Nick Astrupgaard KW Commercial Multifamily Advisor
818.432.1580
nastrupgaard@kw.com 20 DRE #01893466
Rich Johns
KW Commercial Multifamily Advisor
818.432.1575
richjohns@kw.com DRE #01432215