3 - Charles Dunn Company

Transcription

Multi-Family USC
Student Housing
Investment Offering
1180 West 37th Place
Los Angeles, CA 90007
Exclusively offered by Charles Dunn Company
Joseph Mackin
Director
818-430-7525
[email protected]
Lic. #00466443
800 West 6th Street, 5th Fl
Direct 213.481.1800
Fax 213.481.0758
Lic. # 01201641
Table of
Contents
3
16
25
Property
Information
Financial
Analysis
Market
Information
4
Property
Summary
17
Offering
Overview
26
Student
Housing
Market
5
Parcel Profile
Report
18
Rent Roll
6
State
Enterprise
Zone
7
Housing Code
Enforcement
Report
8
Property
Photographs
12
Property Maps
13
Aerial and Plat
Maps
14
Newly
Installed
Security
Measures
19
Pro Forma
Income and
Expense
Statement
20
Financing
Assumptions
21
Investment
Summary
22
Comparable
Properties
23
Sales
Comparables
24
Available
Properties
27
Snapshot
28
Overview and
Transportation
29
Economy
30
Nearby
Notable
Locations
31
Demographics
32
Contact
Information
33
Contact
Information
15
USC Campus
Police-Patrol
& Response
Area
Boundaries
These materials are based on information and content provided by others which we believe are accurate. No guarantee, warranty or representation is made
by the Charles Dunn Company or its personnel, and all interested parties must independently verify its accuracy and completeness. As well, any projections,
assumptions, opinion, or estimates are used for example only and do not represent the current or future performance of the identified property. Your tax,
financial, legal and toxic substance advisors should conduct a careful investigation of the property and its suitability for your needs, including land use
limitations. The property is subject to prior lease, sale, change in price, or withdrawal from the market without notice.
PROPERTY
INFORMATION
Property
Information
Property
Summary
Charles Dunn Company, Inc., has been exclusively retained by
the owner in connection with the sale of 1180 West 37th Place, a
legal three-units, multi-residential property located within one
block of the campus of the University of Southern California. The
offering represents an opportunity to purchase the fee simple
interest in a stabilized asset. The astute investor will realize the
upside potential to produce excellent cash flow by implementing
twelve-month leases at market rents in the next school year.
Site Address
1180, 1182, 1182 ½
West 37th Place
Assessor’s
Parcel Number
5040-032-002
Property Type
Multifamily Triplex
Offering Price
$630,000
Price Per
Unit/Price Per
Gross Square
Foot
$210,000
Number of
Buildings/Stories 2
1180 West
Place
2
Number of Units
Triplex - 3 Units
Unit Mix
3 Bedroom / 2 bath
House
1 Bedroom / 1 Bath
Attached Unit
2 Bedroom / 2 Bath
Detached Cottage
Approximate
Building Area
(Gross)
2190 SF
Construction
Wood Frame & Stucco
Utilities
All units separately
metered for gas and
electricity.
Year Built
1908 & 1916
Approximate Lot
Size
7,001 SF
Zoning
LARD2
Offering
Highlights
•
100% occupied
•
Prime USC Housing
Location: Walk one
block to campus.
Within USC Patrol
Boundry
•
37th
$287.67
On-Site Laundry
•
Perfect Unit mix for
student housing:
SFR + 1Bd1Ba unit
+ 2Bd2Ba Cottage
•
On-Site fenced
Parking
•
23% Potential Upside
in Rents
4
Property
Information
Parcel Profile
Report
5
Property
Information
State
Enterprise
Zone
6
Property
Information
Housing Code
Enforcement
Report
7
Property
Information
Property
Photographs
Top
1180-1182 West 37th PlaceFront elevation Detached unit
at end of driveway
Bottom
1180 West 37th Place - Front
elevation Attached unit entry
8
Property
Information
Property
Photographs
Top
South view of 1180 & 1182
Middle
North view of 11821/2 &
parking courtyard
Bottom
On site laundry area &
individual water heaters
9
Property
Information
Property
Photographs
Top left
View of kitchen area 1182 ½
Top right
View of bedroom of 1182 ½
Middle
View of Living area 1182 ½
Bottom
View of Living area 1182
10
Property
Information
Property
Photographs
Looking East to USC - less
than one block walk to campus
11
Property
Information
Property Maps
Property Information
12
Property
Information
Aerial and Plat
Maps
13
Property
Information
NewlyInstalled
Security
Measures
1
2
1
Video Camera and License
Plate Reader Security System
at 37th Place & Catalina Street
Security Ambassador stationed
at 37th Place & Catalina Street
2
2
14
Property
Information
Subject Property: 1180 West 37th Place
USC Campus
Police-Patrol &
Response Area
Boundaries
1
USC Department of Public Safety Headquarters
1
15
FINANCIAL
ANALYSIS
Financial
Analysis
Offering
Overview
The subject property has an irreplaceable location and unit mix,
located on a wide tree lined street less than one block away from
the University of Southern California. Only 20% of the student
body lives on campus leaving ±29,600 students to find alternative
living accommodations.
USC students want three types off-campus housing:
1.) The Group Home where the students all know each other and
want to share a single family residence together, paying $800 to
$950 per room. The supply of available group homes is low and
the demand high. Most group students will secure a group home
with deposits 12 to 18 months in advance of the school year.
2.) The Single Room where the student rents an individual
bedroom in a house or apartment. This type is often furnished with
a bed, desk, chair & dresser where the student shares the kitchen
and bathroom in common with housemates. These rooms rent
$725-$900 per month. This supply is competitive and demand
high.
3) The Independent student wants his or her own unit ideally with
an unshared bathroom and kitchen. These students pay $950$2100 per month sometimes sharing the kitchen and bathroom.
The supply of this type of unit is high due to the new construction
of luxury housing with commensurably higher rents
The subject triplex is comprised of all three types: a single-family
house, an attached one-bedroom one-bath unit, and a detached
two-bedroom two-bath cottage, offering a strong and varied unit
mix to present to USC students. This property features plenty of
fenced parking, on site laundry facilities and separate metering for
electricity and gas.
When looking for housing students will pay a premium to be able
to walk or ride bikes to campus, shopping, and transportation. The
recently opened Expo line is two blocks away and provides access
to downtown and the entire Los Angeles Metro system. Students
and parents also want a safe place to live so it is important to note
that this property is within the patrol boundary of the USC campus
police. The video cameras and license plate readers installed fifty
feet to the west further enhances the security.
17
Financial
Analysis
Rent Roll
Unit
Beds
Current Rent
Market Rent
Attached Unit
1Bedroom/1Bath
1180 W. 37th Pl
2
$700
$1,400
Main House*
3Bedroom/2Bath
1182 W. 37th Pl
5**
$2,700
$ 3,800
Cottage
2bedroom/2bath
1182 ½ W. 37th Pl
4
$1,250
$ 1,800
Scheduled Monthly Rent
$4,650
$7,000
Est. Laundry Income
$10
$20
Est. Parking Income
$0
$150
Monthly Gross Income
$4,660
$7,170
Scheduled Annual Income
$55,920
$86,040
*Seller is currently renting the main house to students on a ten
month term at below market rents.
**Rec room converted to a bedroom
18
Financial
Analysis
Pro Forma
Income and
Expense
Statement
Projected Annual
Income
Per Unit
% of
SGI
Market
Current
Scheduled Gross
Income:
$55,920
$18,640
100%
$86,040
Less Vacancy
Reserve:
($1,678)
($559)
3%
($2,580)
Gross Operating
Income
$54,242
$18,081
97%
$83,460
Per Unit
% of
SGI
$28,680 100%
($860)
3%
$27,820 97%
Expenses
Property Taxes
(1.2655%)
$ 7,973
$ 2,657
14% $ 7,973
$ 2,658
9%
Insurance ($.72/sf) $ 1,580
$
526
3% $ 1,580
$
527
2%
Water
$ 1,310
$
436
2% $ 1,310
$
437
2%
Sanitation
$ 1,067
$
356
2% $ 1,069
$
356
1%
Repairs &
Maintenance (5%)
$ 2,796
$
932
5% $ 2,796
$
932
3%
Off-Site
Management (5%)
$ 2,880
$
960
5% $ 2,880
$
960
3%
Reserves (2%)
$ 1,118
$
373
2% $ 1,118
$
373
1%
Landscaping
$
$
180
1% $
$
180
1%
Total Expenses
$ -19,266 $ 6,421
$ 6,422
22%
Per square foot
$ 8.80
Net Operating
Income
$36,654
Loan Payments
$-26,679
540
34% $-19,266
$64,674
*
Pre-Tax Cash Flow $ 9,975
Plus Principal
Reduction
$ 8,496
Total Return
Before Taxes
$ 18,471
540
$ -26,679
$37,995
*
12%
$ 8,496
30%
$ 46,491
*as % of down payment
NOTE: The income and expenses in this analysis are based on projections, prior performance
and assumptions that are used industry-wide. However, the Charles Dunn Company and its
agents strongly suggest that Buyers rely on their own expertise to project the future income and
expenses of the Property.
19
Financial
Analysis
Financing
Assumptions
Price
$630,000
No. Units
3
Year Built
1908/1916
Gross S.F.
2190
Lot Size S.F.
7001
Price per Unit
$210,000
Price per S.F.
$287.67
Current GRM
11.27
Current CAP
5.82%
Current return before taxes*
11.70%
Market GRM
7.08
Market CAP
10.27
Market return before taxes*
29.50%
* As % of down payment
:Marketing Package/2935 Duray Pl-[7.11.13-mdg]
20
Financial
Analysis
Investment
Summary
Loan Amount
$472,500
Down Payment (25%)
$157,500
Debt Coverage Not Applicable
Assumes buyer with a max 45% debt to income ratio
& FICO score of 740+
Interest Rate
3.88%
Amortization
30 due in 30
Monthly Payment
$2,223.22
Terms: APR is 4.156 % ARM the initial interest rate applies for five
years, then the rate adjusts annually to one year LIBOR plus 2%
2.5% origination fee.
21
COMPARABLE
PROPERTIES
22
Comparable
Properties
Subject Property:
Sales
Comparables
1
3
1218 Exposition
2
1238 West 37th Drive
4
9
No.
Size SF
Price/SF
Sale Price
Year Built
Units
$/Unit
Sale Date
1
3,574
$279.80
$1,000,000
1924
4
$250,000
04/30/2013
2
1,786
$251.96
$450,000
1924
2
$225,000
07/13/2013
3
982
$229.12
$225,000
1907
1
$225,000
01/11/2013
4
2,454
$228.19
$560,000
1907
4
$140,000
12/12/2012
4
2
3
1
2
3
1
4
23
Comparable
Properties
Available
Properties
No.
Building SF
Lease Rate
Lease Term
Year Built
2190
$540
10 months
1908
No.
Building SF
Lease Rate
Lease Term
Year Built
1
1704
$900
12 months
1907
No.
Building SF
Lease Rate
Lease Term
Year Built
2
4520
$925
12 months
1904
No.
Building SF
Lease Rate
Lease Term
Year Built
3
4520
$925
12 months
1904
No.
Building SF
Lease Rate
Lease Term
Year Built
4
4520
$925
12 months
1904
1257 West 37th Drive
1
3
2
4
24
MARKET
INFORMATION
Market
Information
Student
Housing Market
University of Southern California is a private university founded in
1880 with it’s main campus located in the University Park
neighborhood of Los Angeles, California. As California’s oldest
private research university, USC has historically educated a
number of the region’s business leaders and professionals. As of
2012-2013 academic year, USC has 18,316 undergraduates and
21,642 graduate and professional students.
USC on campus, dormitory housing is offered to freshman and
sophomore students. Off- campus housing student housing is
primarily dedicated to juniors, seniors and graduate students
where leasing units is often by the room or bed. More often a
group of students will lease/share an entire residential unit for two
or three years. Student housing is now a viable investment vehicle
for investors as it offers opportunities for strong cash flows and
total returns, low volatility, general higher yields than comparable
multifamily products and increasing investor choice with respect to
assets and markets. With students paying all utilities, on yearly
leases and rents guaranteed by parents these properties resemble
net investments. There is generally an under supply of quality offcampus housing that are safe, secure and well-priced,
professionally managed in the neighborhoods adjacent to the
University of Southern California.
USC FACTS & FIGURES
CAMPUS HOUSING
CAPACITY
6,618
AVERAGE ON
CAMPUS HOUSING
COST
$7,078
(Annual)
UNDERGRADUATE
LIVING ON CAMPUS
39%
(2012)
NUMBER OF
DORMITORIES
12
NUMBER OF
CAMPUS-OWNER
APARTMENTS
32
Demand
The rapid growth of university enrollments in the United States in
general has been bolstered by highly favorable demographics,
particularly the Echo Boomer age, and an increasing number of
international students. With heightened economic demand for
advanced skills and knowledge, more high school graduates are
attending full-time colleges. According to the U.S. Department of
Education, 66.2 percent of 2012 high school graduates were
enrolled in colleges or universities.
New high end development and newly renovated buildings have
come on-line within the past several years at rents approaching
$1200- $1800 per bed. These higher rents have pushed demand
for off-campus student housing in the neighborhoods to the west
of campus. The west side of campus, a secondary location has
long been considered a desirable and cost effective alternative.
The addition of security cameras, license plate readers,
ambassadors and increased patrol to this area has further driven
demand.
Investment Overview
Both cap rates and asset pricing have seen strong improvement in
the last four years in the University Park neighborhood. Since
2009, there has been a total volume of approximately $423 million
worth of assets sold in the neighborhood with an average price per
building square feet of $441.59. During that time, cap rates have
fluctuated between 5.75 to 6.5 percent.
26
Market
Information
Snapshot
TOTAL POPULATION
23,530
POPULATION CHANGE
-10.6% (2000-2012)
AREA
1.17 square miles (Land Area)
PERSONS PER HOUSEHOLD
2.6
AVERAGE HOUSEHOLD INCOME
$29,297
25 Years of Age or Over:
EDUCATION
High School Graduates……. 14.2%
Bachelor Degree….............. 16.2%
University Park is a low-income neighborhood in Los Angeles,
California, within the South Los Angeles submarket and home of
the University of Southern California campus. The area is notable
for its dense concentration of residents and students which is also
one of the most ethnically diverse areas in Los Angeles.
University Park is bordered by Pico-Union to the north, Downtown
Los Angeles to the northeast, Historic South Central to the east,
Exposition Park neighborhood to the south and Adams-Normandie
to the west.
Demographics
University Park is one of the most ethnically diverse
neighborhoods in Los Angeles. Based on Pitney Bowes Business
Insight, the population is estimated to be 23,530 for the University
Park neighborhood of Los Angeles, California. The racial and
ethnic composition is comprised of 45.4% White, 5.9% African
American, 26.1% Asian/Pacific Islander, 0.3% Native American
and 22.4% other (including 2+ races). 35.1% respondents of all
races claimed Hispanic or Latino ethnicity.
27
Market
Information
Overview and
Transportation
Los Angeles County
Los Angeles County is the most populous county in the United
States and covers 4,752 square miles. The county is bordered on
the east by San Bernardino and Riverside counties, on the north
by Kern and Ventura counties, on the west by the Pacific Ocean,
and on the south by Orange County.
Transportation
Los Angeles has one of the most extensive freeway systems in the
Western United States. Eight interstate highways run through the
county, including Interstate 5 (I-5) that runs north-south from the
Mexican-United States border at the San Ysidro crossing, goes
north across the length of California and crosses into Oregon and
Washington State.
The county is served by four commercial airports: the Los Angeles
International. Airport (LAX), Bob Hope Airport, Long Beach
Municipal Airport and LA/Palmdale Regional Airport. There are
also nine general aviation airports located within the county.
Passenger rail service is provided in the county by Amtrak, Los
Angeles Metro Rail and Metrolink. The Expo line opened in June
2013 connecting USC to the entire transportation system. This
light rail line runs between downtown Los Angeles and Culver
City, with service to Santa Monica planned to begin in 2015
Expo/Vermont Station is two blocks
to the south of the subject property
28
Market
Information
Economy
Los Angeles County is recognized as the financial, commercial
and industrial capital of California, and is the nation’s leading
urban-industrial hubs. Los Angeles County is more commonly
known as the entertainment capital of the world with most of the
major motion picture studios as well as music recording and
production industry located all over the county; The major film
studios include– Paramount Pictures, 20th Century Fox, Sony,
Warner Bros., Universal Pictures, and Walt Disney Studios which
are scattered within the county
Top 5 Major Employers in Los Angeles County - 2011
Employer Name
Employees
County of Los Angeles
95,700
Los Angeles Unified School District
73,300
Federal Government
48,100
City of Los Angeles (Including DWP)
47,700
University of California, Los Angeles
41,000
Los Angeles County – Employment by Sector
Demographics
The 2010 United States Census reported that Los Angeles County
had a population of 9,818,605. The racial makeup of Los Angeles
County was 50.3% White, 8.7% African American, 0.7% Native
American, 13.7% Asian, 0.3% Pacific Islander, 21.8% from other
races and 4.5% from two or more races. Hispanic or Latino of any
race was 47.7% of the population in Los Angeles County.
Los Angeles has the largest Native American population of any
county in the nation: according to the 2000 census, it has more
than 153,000 people of indigenous decent, and more are from
Latin America.
The median income for a household in Los Angeles County was
$42,189, and the median income for a family was $46,452.
According to TNS Financial Services, Los Angeles County has the
highest number of millionaires of any county in the nation, totaling
261,081 households as of 2007.
29
Market
Information
Nearby Notable
Locations
Los Angeles Memorial Coliseum is a large outdoor sports
stadium located in the University Park neighborhood of Los
Angeles, California. The Coliseum is home to the University of
California Trojan football team and it is the largest football stadium
in the Pac-12 conference. It is located next to the Los Angeles
Memorial Sports Arena in Exposition Park, across the street from
the University of Southern California. The Coliseum hosted the
Olympic games twice, in 1932 and 1984 and hosted Super Bowls
and World Series. It was declared a National Historic Landmark on
July 27, 1984.
Exposition Park/Science Center is located in University Park,
Los Angeles, California, across the street of University of Southern
California. Originally, the 160-acre land was an agricultural
fairground from 1872 to 1910. Some of the main attractions
Exposition Park houses are Los Angeles Memorial Coliseum, Los
Angeles Memorial Sports Arena, Natural History Museum of Los
Angeles County, California Science Center, and Exposition Park
Rose Garden, California African Museum. The park is public
space owned by the state of California. The facilities are operated
by both the state and Los Angeles County.
L.A. Live/Staples Center is a 4 million-square-foot/$2.5 billion
Downtown Los Angeles sports, residential & entertainment district
adjacent to the Los Angeles Convention Center. This area also
features a 54-story, 1,000-room convention hotel, Club Nokia, L.A.
Live, a 2,200 capacity live music venue, a 14-screen Regal
Cineplex, a broadcast facility for ESPN along with entertainment,
restaurant and office space. Staples Center opened its doors on
October 17, 1999 and in each of its first two years, Staples Center
received the prestigious Pollstar-CIC Arena of the Year Award.
Staples Center is also host to over 250 events and has nearly 4
million visitors a year.
30
Market
Information
Demographics
UNIVERSITY PARK
Population Trend
2000 Total Population
23,654
23,388
23,530
22,915
Households Trend
2000 Total Households
6,779
6,069
6,062
5,860
Population Change Trend
2000 to 2010 Population Change
-1.1%
-.5%
-2.0%
-2.6%
Household Change Trend
2000 to 2010 Household Change
-10.5%
-10.6%
-3.4%
-3.3%
2012 Race
White alone
Black or African American alone
American Indian and Alaska Native alone
Asian alone
Native Hawaiian and OPI alone
Some Other Race alone
Two or More Races
2012 Income
Per Capita Income
Household Income: Median
Household Income: Average
Average household size
Total Daytime Population
Total Daytime at Work Population
Total Daytime at Home Population
Total Daytime at Work Population (% of Daytime
Population)
Total Daytime at Home Population (% of Daytime
Population)
45.4%
5.9%
.3%
26.0%
.1%
16.9%
5.5%
$11,205
$15,343
$29,297
2.6
21,990
6,725
15,265
30.6%
69.4%
31
CONTACT
INFORMATION
Contact
Information
Contact
Information
Joseph Mackin
Director
Lic. #00466443
[email protected]
These materials are based on information and content provided by
others which we believe are accurate. No guarantee, warranty or
representation is made by the Charles Dunn Company or its
personnel, and all interested parties must independently verify its
accuracy and completeness. As well, any projections,
assumptions, opinion, or estimates are used for example only and
do not represent the current or future performance of the identified
property. Your tax, financial, legal and toxic substance advisors
should conduct a careful investigation of the property and its
suitability for your needs, including land use limitations. The
property is subject to prior lease, sale, change in price, or
withdrawal from the market without notice.
T (213) 481-1800
D (213) 534-3266
F (213) 481-0758
Charles Dunn Company, Inc.
Lic #01201641
800 West Sixth Street, Fifth Floor
Los Angeles, CA 90017-2709
33

3 - Charles Dunn Company

Transcription

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