Aria Pournazarian SEC of Lakewood Boulevard and Stearns Street · SEC of Lakewood Boulevard and Stearns Street 2198 N. Lakewood Boulevard• Long Beach, CA 90815 Offering Memorandum

SEC of Lakewood Boulevard and Stearns Street2198 N. Lakewood Boulevard• Long Beach, CA 90815

Offering Memorandum

1

Aria PournazarianNational Retail Group

Los Angeles Office

Tel: (213) 943-1874

Fax: (213) 943-1800

[email protected]

License: CA 01918248

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe 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 Marcus & Millichap and

should not be made available to any other person or entity without the written consent of Marcus & Millichap. 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. 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 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 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 Marketing Brochure has been obtained from sources we believe to be

reliable; 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

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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap 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 Marcus & Millichap, its affiliates or subsidiaries, or any agent, product,

service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

2198 N. Lakewood Blvd.

Long Beach, CA

ACT ID Y0141064

2

Aria Pournazarian

National Retail Group

Los Angeles Office

Tel: (213) 943-1874

Fax: (213) 943-1800

[email protected]

License: CA 01918248

3

INVESTMENT

OVERVIEW

#

OFFERING SUMMARY

▪ Multi-Tenant Retail Property Strategically Located In Between Long

Beach Airport and Circle Area

▪ Property is Being Marketed for the First Time in Over 20 years

▪ Excellent Signage with Prominent Exposure on Lakewood Boulevard

▪ Value-Add Opportunity; Property will be Delivered Vacant Allowing

for Repositioning

▪ Approximately 40,000 Vehicles Per Day Combined Traffic Count

▪ Retail Fundamentals Include Parking in the Rear and Pylon Signage

INVESTMENT HIGHLIGHTS

Marcus & Millichap is pleased to present 2198 North Lakewood Boulevard a free

standing multi-tenant retail property located in Long Beach on the SEC of Lakewood

Boulevard and Stearns Street. The property consists of one main showroom currently

used as a furniture store with three adjacent shop spaces and a billboard. Located on a

signalized intersection, the property benefits from tremendous visibility facing the

corner with prominent frontage on both Stearns and Lakewood. The property includes

parking in the rear with a point of ingress and egress off of Stearns Street including a

total of 20 parking spaces. In terms of location, the property is book ended by multiple

points of interest including Long Beach Airport to the north, the 405 Freeway, and

Circle Area a block south.

This multi-tenant retail property is an excellent value-add opportunity as well as a

spectacular future development site for the investor or owner/user looking to acquire

property in one of the most sought after pockets in the greater Long Beach area where

nearly five hundred thousand people reside within a five-mile radius.

Built in 1949, the improvements measure approximately 23,056 square feet on a parcel

of land measuring approximately 38,018 square feet (per title). The property benefits

from a 190’ of frontage along Lakewood Boulevard and is ideally located to serve the

needs of the Circle Area community and surrounding residents.

The property is currently occupied but will be delivered vacant with The Annex bar on a

month-to month lease. The opportunity to attain market rents in the short term coupled

with management efficiencies will drive value and push cash flow at this location with

the intrinsic development potential in the future.

INVESTMENT OVERVIEW

4

“IN THE PRIME SECTOR OF

LONG BEACH ”

#

EXECUTIVE SUMMARY

OFFERING SUMMARY

5

THE OFFERING

Price $4,995,000

Gross Leasable Area 23,056 SF

Price Per Rentable SF $216.64

Land Size 38,018 SF

Price Per Land SF $131.38

SITE DESCRIPTION

Assessor’s Parcel Number 7219-015-001

Zoning LBCCP

Year Built 1949

Frontage on Lakewood Boulevard

+/- 190’

Occupancy Owner Occupied

Ownership Fee Simple

Retail 2017 Outlook

VacancyY-O-Y

BasisPoint

Change

Metro Asking

Rent

Y-O-Y

Change

Downtown Los Angeles 4.7% 60 $39.05 -1.1%

San Fernando Valley 4.4% 60 $29.67 5.5%

South Bay/Long Beach 4.4% 80 $27.46 6.6%

Westside Cities 4.3% 70 $60.59 9.6%

Los Angeles Metro 4.8% 60 $30.51 3.8%

REGIONAL MAP

6

LOCAL MAP

7

AERIAL PHOTO

8

9

FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS2198 North Lakewood Boulevard

10

Repositioning Scenario

Capital Expenditures Assumptions Per Repositioning Scenario

Expenditures Costs (one time)

Tenant Improvement Cost ($10/SF) $240,000

Leasing Commissions (4%, Ten Year Lease) $192,000

Rent Abatement (3 Months) $120,000

Fixtures $100,000

Demolition $50,000

Permits $15,000

Net Capital Expenditures $717,000

Total Project Cost (Including Purchase Price) $5,712,000

Projected Price/SF on Improvements $247.74/SF

Projected Cap Rate (Potential NOI) 8.01%

Income Pro Forma(Fully Occupied) Price/SF

Potential Scheduled Base Rental Income (20,000 SF of GLA) $523,800 $22.71

Potential Expense Reimbursement Income $135,215 $6.27

Potential Gross Income $659,015$28.99

Vacancy Factor (10%) $65,901

Potential Effective Gross Income $593,114 $26.09

Potential Operating Expenses Price/SF

Utilities $15,000 $0.62

Trash Removal $4,000 $0.16

Repairs & Maintenance $18,000 $0.75

Legal / Accounting $3,378 $0.14

Insurance $8,400 $0.35

Real Estate Taxes (1.125%) $62,437 $2.71

Management Fee (5%) $24,000 $1.00

Total Expenses $135,215 $5.86

Expenses as % of Potential EGI 27.61%

Net Operating Income $457,899 $19.81

TENANT ROSTER

TENANT Unit Size LEASE EXPIRATION LEASE TYPE

House to Home Furniture

21,400 SF Delivered Vacant N/A

The Annex 1,500 SF MTM Gross

Clear Channel On Site March 31st, 2020 N/A

11

MARKET

COMPARABLES

SALES COMPARABLES MAP

12

4300 E STEARNS ST

(SUBJECT)

Lakewood Landing

Carl's Jr.

Former Smart & Final

99 Cents Only-Lakewood

Lakewood County Club

Center

La Palma Retail Center

4000 East Anaheim St

Orange Plaza

Artesia Center

Cypress Plaza

Los Coyotes Diagonal

SALES COMPARABLES

1

2

3

4

5

7

8

6

9

10

11

13

Avg. $356.60

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

$400.00

$450.00

$500.00

4300 E

Stearns St

Lakewood

Landing

Carl's Jr. Former

Smart &

Final

99 Cents

Only-Lakewood

Lakewood

County Club

Center

La Palma

Retail

Center

4000 E

Anaheim St

Orange

Plaza

Artesia

Center

Cypress

Plaza

Los Coyotes

Diagonal

PROPERTY NAME

SALES COMPARABLES

Average Price Per Square Foot

SALES COMPARABLES SALES COMPS AVG

PROPERTY NAME

MARKETING TEAMSALES COMPARABLES

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


14

SALES COMPARABLES

Tenants Lease Type

Year Built: 1948

SUBJECT PROPERTY2198 N. Lakewood Blvd Long Beach, CA, 90815

1

Close Of Escrow: 4/11/2017

Sales Price: $2,150,000

Price/SF: $354.20

CAP Rate: 5.96%

Year Built: 2004

LAKEWOOD LANDING2201 North Lakewood Boulevard, Long Beach, CA, 90815

2

Close of Escrow 7/21/2017

Sales Price $5,000,000

Zoning LBCHW

Price/SF $266.94

Lot Size (Acres) 0.43

Price/Acre $11,627,907

CARL'S JR.4511 East Pacific Coast Highway, Long Beach, CA, 90804

PROPERTY NAME


rentpropertyname1


rentpropertyname1


rentpropertyname1


15

SALES COMPARABLES

3



Price/SF: $404.15

Year Built: 1957

FORMER SMART & FINAL1755 Ximeno Avenue, Long Beach, CA, 90815

4



Price/SF: $257.38

Year Built: 1960

99 CENTS ONLY-LAKEWOOD4929 Woodruff Avenue Lakewood, CA, 90713

5



Price/SF: $474.31

CAP Rate: 6.00%

Year Built: 2006

LAKEWOOD COUNTY CLUB CENTER3201 Carson Street, Lakewood, CA, 90712

PROPERTY NAME


rentpropertyname1


rentpropertyname1


rentpropertyname1


16

SALES COMPARABLES

6



Price/SF: $344.71

CAP Rate: 4.65%

Year Built: 1976

LA PALMA RETAIL CENTER4691 La Palma Avenue, La Palma, CA, 90623

7



Price/SF: $253.50

CAP Rate: 5.90%

Year Built: 2005

4000 E ANAHEIM ST4000 East Anaheim Street, Long Beach, CA, 90804

8



Price/SF: $436.85

CAP Rate: 5.14%

Year Built: 1989

ORANGE PLAZA1150 East 7th Street, Long Beach, CA, 90813

PROPERTY NAME


rentpropertyname1


rentpropertyname1


rentpropertyname1


17

SALES COMPARABLES

9



Price/SF: $428.57

CAP Rate: 5.77%

Year Built: 1998

ARTESIA CENTER400 East Anaheim Street, Long Beach, CA, 90813

10



Price/SF: $314.98

CAP Rate: 5.80%

Year Built: 1986

CYPRESS PLAZA5491 Ball Road, Cypress, CA, 90630

11



Price/SF: $387.03

CAP Rate: 6.66%

Year Built: 1986

LOS COYOTES DIAGONAL2610 North Los Coyotes Diagonal, Long Beach, CA, 90815

18

MARKET

OVERVIEW

PROPERTY NAME

MARKETING TEAMDEMOGRAPHICS

Source: © 2017 Experian

Created on March 2018

POPULATION 1 Miles 3 Miles 5 Miles

▪ 2022 Projection

Total Population 27,268 268,857 572,327

▪ 2017 Estimate


▪ 2010 Census


▪ 2000 Census


▪ Current Daytime Population

2017 Estimate 38,930 270,885 566,023

HOUSEHOLDS 1 Miles 3 Miles 5 Miles

▪ 2022 Projection

Total Households 11,051 104,165 214,697

▪ 2017 Estimate


Average (Mean) Household Size 2.37 2.54 2.65

▪ 2010 Census


▪ 2000 Census


▪ Occupied Units

2022 Projection 11,051 104,165 214,697

2017 Estimate 10,871 106,358 219,134

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles

▪ 2017 Estimate

$150,000 or More 10.29% 12.70% 12.68%

$100,000 - $149,000 14.56% 14.00% 14.93%

$75,000 - $99,999 13.62% 11.93% 12.38%

$50,000 - $74,999 21.02% 17.22% 17.18%

$35,000 - $49,999 11.04% 12.32% 11.86%

Under $35,000 29.48% 31.84% 30.98%

Average Household Income $82,288 $85,661 $86,719

Median Household Income $61,219 $57,846 $60,120

Per Capita Income $33,744 $33,180 $32,360

HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 MilesTotal Average Household Retail Expenditure

$73,316 $71,546 $72,907

▪ Consumer Expenditure Top 10 Categories

Housing $21,823 $21,488 $21,755

Shelter $14,701 $14,381 $14,420

Transportation $11,886 $11,200 $11,430

Food $7,501 $7,314 $7,426

Personal Insurance and Pensions $7,066 $6,932 $7,106

Health Care $3,530 $3,668 $3,927

Utilities $3,267 $3,242 $3,358

Entertainment $2,779 $2,779 $2,851

Apparel $2,692 $2,565 $2,572

Household Furnishings and Equipment

$1,670 $1,673 $1,692

POPULATION PROFILE 1 Miles 3 Miles 5 Miles

▪ Population By Age

2017 Estimate Total Population 26,441 269,738 572,713

Under 20 20.71% 24.00% 24.59%

20 to 34 Years 31.52% 25.90% 23.21%

35 to 39 Years 7.19% 7.10% 6.67%

40 to 49 Years 13.29% 14.26% 13.89%

50 to 64 Years 16.56% 17.97% 18.71%

Age 65+ 10.73% 10.77% 12.93%

Median Age 33.55 35.07 36.60

▪ Population 25+ by Education Level

2017 Estimate Population Age 25+ 17,711 182,669 388,936

Elementary (0-8) 3.36% 5.61% 5.90%

Some High School (9-11) 5.13% 7.44% 7.98%

High School Graduate (12) 15.77% 16.54% 18.46%

Some College (13-15) 26.00% 23.74% 23.80%

Associate Degree Only 8.83% 7.80% 8.31%

Bachelors Degree Only 25.86% 21.38% 20.35%

Graduate Degree 12.79% 12.74% 11.37%

19

Income

In 2017, the median household income for your selected geography is

$61,219, compare this to the US average which is currently $56,286.

The median household income for your area has changed by 34.74%

since 2000. It is estimated that the median household income in your

area will be $69,007 five years from now, which represents a change

of 12.72% from the current year.

The current year per capita income in your area is $33,744, compare

this to the US average, which is $30,982. The current year average

household income in your area is $82,288, compare this to the US

average which is $81,217.

Population

In 2017, the population in your selected geography is 26,441. The

population has changed by 10.18% since 2000. It is estimated that

the population in your area will be 27,268.00 five years from now,

which represents a change of 3.13% from the current year. The

current population is 48.50% male and 51.50% female. The median

age of the population in your area is 33.55, compare this to the US

average which is 37.83. The population density in your area is

8,415.60 people per square mile.

Households

There are currently 10,655 households in your selected geography.

The number of households has changed by 9.96% since 2000. It is

estimated that the number of households in your area will be 11,051

five years from now, which represents a change of 3.72% from the

current year. The average household size in your area is 2.37 persons.

Employment

In 2017, there are 17,181 employees in your selected area, this is also

known as the daytime population. The 2000 Census revealed that

70.48% of employees are employed in white-collar occupations in

this geography, and 29.34% are employed in blue-collar occupations.

In 2017, unemployment in this area is 6.55%. In 2000, the average

time traveled to work was 29.00 minutes.

Race and Ethnicity

The current year racial makeup of your selected area is as follows:

55.61% White, 10.09% Black, 0.44% Native American and 15.40%

Asian/Pacific Islander. Compare these to US averages which are:

70.42% White, 12.85% Black, 0.19% Native American and 5.53%

Asian/Pacific Islander. People of Hispanic origin are counted

independently of race.

People of Hispanic origin make up 26.98% of the current year

population in your selected area. Compare this to the US average of

17.88%.

PROPERTY NAME

MARKETING TEAM

Housing

The median housing value in your area was $501,753 in 2017,

compare this to the US average of $193,953. In 2000, there were

3,677 owner occupied housing units in your area and there were

6,013 renter occupied housing units in your area. The median rent at

the time was $780.

Source: © 2017 Experian

DEMOGRAPHICS

20

MARKET OVERVIEW

OVERVIEW

SOUTH BAY-LONG BEACH

PORT ACTIVITY

The ports of Los Angles and Long Beach are the two busiest ports in the nation, underpinning employment in the trade, transportation and utilities sector.

EDUCATED LABOR POOL

High educational attainment supports hiring in the business services and healthcare sectors. Roughly 23 percent of residents age 25 and older hold a bachelor’s degree.

STRATEGIC LOCATION

Los Angeles International Airport and two port facilities provide an ideal location for e-commerce and logistics companies.

The South Bay-Long Beach area of southwestern Los Angeles County

contains 21 miles of coastline between Long Beach and El Segundo and

includes Los Angeles International Airport, the Port of Los Angeles and

the Port of Long Beach. The region boasts a population of approximately

1.3 million and is projected to add roughly 18,000 residents through

2021. High home values allow just half of households to afford to own

their home, generating a large rental market.

▪ The area’s economy historically relied on the aerospace industry and defense-related technologies, including

companies such as Boeing, Honeywell Aerospace and Raytheon.

▪ Widespread diversification in recent years has produced a large contingent of professional and business

services firms and corporate headquarters. Significant operations are held by American Honda Motor Co., BP,

Snapchat and Mattel.

▪ A growing population base and public healthcare have supported growth in the education and healthcare

sector thanks to both public and private employers.

37.8

2016MEDIAN AGE:

$67,400

2016 MEDIAN HOUSEHOLD INCOME:

DEMOGRAPHICS

U.S. Median:

37.7U.S. Median:

$57,200

1.3M

2016POPULATION:

Growth2016-2021*:

1.3%

486K

2016HOUSEHOLDS:

1.7%

Growth2016-2021*:

1

ECONOMY

METRO HIGHLIGHTS

* Forecast

Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

Documents

Aria Pournazarian SEC of Lakewood Boulevard and Stearns Street · SEC of Lakewood Boulevard and Stearns Street 2198 N. Lakewood Boulevard• Long Beach, CA 90815 Offering Memorandum