4286 MORRELL ST THE OFFERING MEMORANDUM SAN DIEGO, … · 2019. 7. 9. · FINANCIAL ANALYSIS: PRICING DETAIL Price $1,300,000 Down Payment $650,000 / 50% Number of Units 6 Price Per

THE OFFERING O F F E R I N GM E M O R A N D U M

PA C I F I C B E A C H

4286 MORRELL STSAN DIEGO, CA 92109

THE OFFERING

PR I M E PAC I F I C B E AC H LO C AT I O N

L A R G E CO R N E R LOT

I N T E R I O R R E N O VAT I O N S

E X T E R I O R R E PA I N T E D

VA LU E A D D - T R E M E N D O U S R E N TA L U P S I D E

WA L K S CO R E O F 80 - C LO S E TO S H O P S , R E S TAU R A N T S ,

B A R S , & B E AC H E S

3 M I N

B E AC H E S

12 M I N

A I R P O R T

15 M I N

D O W N TO W N

Marcus & Millichap is pleased to present 4286-88 Morrell Street, a six (6) unit multifamily property located in the heart of Pacific Beach.

Pacific Beach is comprised of mostly single-family homes, condo

residences, and luxury apartments. Owners tend to hold onto invest-ments in this prized location, as a result property is seldom seen on the

market. Pacific Beach is perceived to be among the best multifamily investment neighborhoods in San Diego, along with Del Mar, Coronado,

and Neighboring La Jolla.

The 4,278 square foot property is comprised of six studio apartments. All units have been upgraded with new cabinetry, refrigerators, tile floor-

ing, and one unit has been refitted with a newly remodeled kitchen and bath. in addition, the property has recently been repainted. The property offers residents an opportunity to live an idyllic suburban lifestyle, while

being situated a short walk to the beach and a myriad of local shops and restaurants.

This property is an opportunity for an investor to purchase a solid

investment in a strong rental submarket. With upside in rents, and the possibility to maximize rental income by converting to vacation rentals, the owner will enjoy the security of having a property that is destined

to maintain its desirability and increase in value over time. This offering is perfect for a long-term investor seeking a multifamily investment in a

premier San Diego location.

PROPERTY DESCRIPTION

3

Address: 4286-4288 Morrell Street, San Diego, CA 92109

APN: 424-182-10-00

ZONING: RM-1-1

Units: 6

Square Feet: 1,560

Lot Size: 0.10 Acres

Year Built: 1953

Buildings: 1

Stories: 1

Type Of Ownership: Fee Simple

Parking: Street

Landscaping: Minimal

Water: Owner Pays

Gas/Electric: Owner Pays

Foundation: Conrete Slab

Framing: Wood

Exterior: Wood

Roof: Pitched

THE OFFERING

REGIONAL MAPSREGIONAL REGIONAL MAPSMAPS

THE OFFERING

THE OFFERING

VACATION RENTAL

Location, Location, Location!

E XAM P L E O F 1 B D R M VAC AT I O N R E N TA L Average Nightly Rate [1] $123

Gross Monthly Income Per Unit $3,690

Gross Yearly Income Per Unit $44,280

Gross Yearly Income $265,680

30% Vacancy [2] ($79,704)

E�ective Gross Income $185,976

N OT E S[1] Airdna: 50th percentile average daily rate for studios April 2017-April 2018 in

Paci�c Beach

[2] Airdna: Vacation rental average vacancy rate in Paci�c Beach

[3] Contact listing agent for management source

[4] $80/mo for AT&T UVerse for 2 tvs & 55 mbps wi�

[5] $50/mo for SDGE & $25/mo for water/sewer

E X P E N S E STaxes $16,083

Insurance $960

Landscaping $1,800

Repairs & Maintenance $2,400

Cable / Internet [4] $5,760

Utilities - SDGE & Water [5] $1,800

15% Management Fee [3] $27,896

Expenses $60,299

NOI $125,677

Cap Rate 9.14%

Due to the renovated units and prime location, 4286 Morrell St is an excellent opportunity to offer short term vacation rental units to maximize income.

The Pacific Beach neighborhood is one of San Diego's most visited locations and is a picturesque Southern California destination. With a myriad of

shops, restaurants, bars, and of course beach activities, its not surprising to see the extreme potential in vacation rental properties at this location. In

addition, San Diego tourism has hit record levels this year with approximately 7.6 million tourists during the first three months of 2018.

FINANCIAL ANALYSIS: PRICING DETAIL

Price $1,300,000

Down Payment $650,000 / 50%

Number of Units 6

Price Per Unit $216,667

Price Per SqFt $833.33

Gross SqFt 1,560

Lot Size 0.10 Acres

Approx. Year Built 1953

#of Units

Unit Type Square Feet

Current Rents

Market Rents

6 Studio 260 $1,100 $1,275

Cap Rate 3.84% 4.73%

GRM 16.41 14.16

Cash-on-Cash 2.05 3.39%

Debt Coverage Ratio 1.37 1.56

Income Current Year 1

Gross Scheduled Rent $79,200 $91,800

Less: Vacancy/Deductions 3.0% $2,376 3.0% $2,754

Total Effective Rental Income $76,824 $89,046

Other Income $0 $0

Effective Gross Income $76,824 $89,046

Less: Expenses 35% $26,907 30.9% $27,518

Net Operating Income $49,917 $61,528

Cash Flow $49,917 $61,528

Debt Service $36,567 $36,567

Net Cash Flow After Debt Service 2.05% $13,350 3.84% $24,961

Principal Reduction $11,748 $12,208

Total Return 3.86% $25,098 5.72% $37,169

Expenses Current Year 1

Real Estate Taxes $15,206 $15,206

Insurance $960 $960

Utilities $1,800 $1,800

Trash/Landscape/Pest $1,800 $1,800

Repairs & Maintenance $2,400 $2,400

General & Administrative $900 $900

Management Fee $3,841 $4,452

Total Expenses $26,907 $27,518

Expenses/Unit $4,485 $4,586

Expenses/SF $17.25 $17.64

Loan Amount $650,000

Loan Type New

Interest Rate 3.85%

Amortization Period 30 Years

Year Due 2022

Summary

Current Year 1Returns

Financing 1st Loan

Unit Mix

Operating Data

FINANCIAL ANALYSIS: RENT ROLL

UNIT UNIT TYPE SQUAREFEET

CURRENTRENT/

MONTH

CURRENTRENT/SF/MONTH

POTENTIALRENT/

MONTH

POTENTIALRENT/SF/MONTH

1 Studio 260 $1,100 $4.23 $1,275 $4.90

2 Studio 260 $1,100 $4.23 $1,275 $4.90

3 Studio 260 $1,100 $4.23 $1,275 $4.90

4 Studio 260 $1,100 $4.23 $1,275 $4.90

5 Studio 260 $1,100 $4.23 $1,275 $4.90

6 Studio 260 $1,100 $4.23 $1,275 $4.90

Total/Avg 1,560 $6,600 $4.23 $7,650 $4.90

SALES COMPS

4286 MORRELL STREETSAN DIEGO, CA 92109

UNITS UNIT TYPE

Offering Price: $1,300,000 6 Studios

Price/Unit: $216,667

Price/SF: $833.33

CAP Rate: 3.84%

GRM: 16.41

Total No. of Units: 6

Year Built: 1953

UNDERWRITING CRITERIA

Income $73,440 Expenses $26,628

NOI $44,609 Vacancy ($2,203)

1 2135 & 2145 GARNET AVESAN DIEGO, CA 92109

UNITS UNIT TYPE

Close Of Escrow: 2/23/2018 1 3 Bdr 2 Bath

Sales Price: $1,515,000 1 3 Bdr 1 Bath


Price/SF: $513.48

CAP Rate: --

GRM: --


Year Built: 1951 & 1952

UNDERWRITING CRITERIA - (SOLD VACANT)

Income -- Expenses --

NOI -- Vacancy --

22049 GARNET AVESAN DIEGO, CA 92109

UNITS UNIT TYPE



Price/Unit: $325,00 1 Studio 1 Bath

Price/SF: $506.92

CAP Rate: 3.00%

GRM:

# of Units: 4

Year Built: 1980



NOI $37,825 Vacancy $1,890

SALES COMPS

3 1415 GRAND AVESAN DIEGO, CA 92109

UNITS UNIT TYPE


Sales Price: $3,012,500


Price/SF: $809.81

CAP Rate: 4.00%

GRM: 20.86


Year Built: 1959


Income -- Expenses $58,080

NOI $92,750 Vacancy --

3989 HAINES ST SAN DIEGO, CA 92109

UNITS UNIT TYPE

On Market 8 Studio 1 Bath



Price/SF: $717.83

CAP Rate: 3.47%

GRM: 19.07


Year Built: 1957



NOI $67,692 Vacancy $6,129

4

RENT COMPS

4286 MORRELL STREETSAN DIEGO, CA 92109

UNIT TYPE UNITS SF RENT RENT/SF

Studio 6 260 $1,100 $3.92

Total/Avg. 6 1,560 $1,100 $3.92

YEAR BUILT: 1953

1 3239 MISSION BOULEVARDSAN DIEGO, CA 92109


Studio 12 550$1,300-$1,400

$2.45

Total/Avg. 12 550 $1,350 $2.45

YEAR BUILT: 1960

2 1845 HORNBLEND STREETSAN DIEGO, CA 92109


Studio 1 425 $1,450 $3.41

Total/Avg. 1 425 $1,450 $3.41

YEAR BUILT: 1960

NOTES:

Onsite LaundryUnderground Parking

RENT COMPS

1251 HORNBLEND STREETSAN DIEGO, CA 92109


Studio 1 400 $1,395 $3.49

Total/Avg. 1 400 $1,395 $3.49

YEAR BUILT: 1960

4 3433 RIVIERA DRIVESAN DIEGO, CA 92109


Studio 1 300 $1,700 $5.67

Total/Avg. 1 300 $1,700 $5.67

YEAR BUILT: 1945

NOTES:

Washer / Dryer in Unit

3 4015 CROWN POINT DRIVESAN DIEGO, CA 92109


Studio 1 434 $1,300 $3.00

Total/Avg. 1 434 $1,300 $3.00

YEAR BUILT: 1973

NOTES:

FurnishedPool & Jacuzzi

5

RENT COMPS

6 2886 MISSION BOULEVARDSAN DIEGO, CA 92109


Studio 1 200 $1,225 $6.13

Total/Avg. 1 200 $1,225 $6.13

YEAR BUILT: 1927

6 1415 GRAND AVESAN DIEGO, CA 92109


Studio 12 310 $1,300 -1,400 $4.35

Total/Avg. 12 310 $1,350 $4.35

YEAR BUILT: 1959

NOTES:

Stainless steel kitchen appliancesQuartz countertopsFaux wood flooringNew windows

THE OFFERING

C O N F I D E N T I A L I T Y A G R E E M E N T

ABSOLUTELY NO PROPERTY TOURS OR DISCUSSIONS WITH TENANTS WITHOUT WRITTEN CONSENT

The information contained in the following offering memorandum is proprietary and strict-ly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Mar-cus & Millichap. 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 inter-est in the subject property at this time, please return this offering memorandum to Marcus & Millichap.

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. Marcus & Millichap 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 foot- age of the property and improvements, the presence or absence of contaminating substances, PCBs or asbes- tos, 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 informa-tion contained in this offering memorandum has been obtained from sources we believe to be reli-able; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these mat- ters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information pro-vided. 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.

THE OFFERING

VINCENT KRANTZ RAYMOND CHOIASSOCIATE

NATIONAL MULTI HOUSING GROUP4660 LA JOLLA VILLAGE DR, STE 900, SAN DIEGO, CA 92122

858-373-3180 DIRECT | 310-408-7731 [email protected]

LICENSE: CA: 01976199

SENIOR VICE PRESIDENT INVESTMENTSDIRECTOR, NATIONAL MULTI HOUSING GROUP

4660 LA JOLLA VILLAGE DR, STE 900, SAN DIEGO, CA 92122858-373-3136 DIRECT | 858-735-6632 [email protected]

LICENSE: CA: 01297138

Documents

4286 MORRELL ST THE OFFERING MEMORANDUM SAN DIEGO, … · 2019. 7. 9. · FINANCIAL ANALYSIS: PRICING DETAIL Price $1,300,000 Down Payment $650,000 / 50% Number of Units 6 Price Per