Florence Avenue Center - Cloud Object Storage | … · 728 Natural Herbs Dispensary 07/15/2012 07/14/2014 2,400 $12.50 $30,000 $0 ... BEFORE TAX IRR Time Future Cash Flows Initial

Each Office is Independently Owned and Operated

Florence Avenue Center720 East Florence Avenue | Los Angeles, CA 90001

Gary AminoffLic. #[email protected]

Jaime RuizLic. #[email protected]

9.1% Cap Rate, 15% cash on cash, with proposed financing.■

Well located with high traffic count■

Property Rehabbed in 2007-2008■

Ability to increase income■

Adequate parking■

Phone: 310.432.5716 ● Fax: 310.388.1526 ● 439 North Cañon Drive, Penthouse ● Beverly Hills, CA 90210 ● www.aminoff.com

Aminoff & Co Realty Advisors, Inc.

Table of Contents

Real Estate Investment Details ..................................................................................... 3

Property Description .................................................................................................... 4

Property Photos ............................................................................................................. 5

Maps and Aerials ........................................................................................................... 6

Executive Summary ...................................................................................................... 8

Summary Lease Analysis ........................................................................................... 9

Lease Rent Roll .............................................................................................................. 10

Internal Rate of Return Analysis .................................................................................. 11

Cash Flow Analysis ...................................................................................................... 12

Annual Property Operating Data .................................................................................. 13

Detailed General Expenses ............................................................................................ 14

Property Resale Analysis ........................................................................................... 15

Financial Indicators ...................................................................................................... 16

Investment Return Analysis .......................................................................................... 17

Cumulative Analysis .................................................................................................... 18

Property Equity Analysis ............................................................................................ 19

Real Estate Investment Details

ANALYSIS

Analysis Date: April 2013

PROPERTY

Property: Florence Avenue Center

Property Address: 720 East Florence AvenueLos Angeles, CA 90001

Year Built: 1994

FINANCIAL INFORMATION

Down Payment: $330,000

Closing Costs: $500

Discount Rate: 3.00%

PURCHASE INFORMATION

Property Type: Shopping Center

Purchase Price: $1,099,000

Tenants: 9

Total Rentable Sq. Ft.: 10,005

Resale Valuation 8.5% (capitalization of noi)

Resale Expenses: 5.0%

LOANS

Debt Term Amortization Rate Payment LO Costs

Fixed $769,000 30 years 30 years 5.0% $4,128 $7,690

INCOME & EXPENSES

Gross Operating Income: $128,751

Monthly GOI: $10,729

Total Annual Expenses: ($28,740)

Monthly Expenses: ($2,395)

CONTACT INFORMATION

Gary Aminoff

310-387-6900

[email protected]

Lic. #00499674

Jaime Ruiz

323-459-1398

[email protected]

Lic. #01776507

The calculations and data presented are deemed to be accurate, but not guaranteed. They are intended for the purpose of illustrative projectionsand analysis. The information provided is not intended to replace or serve as substitute for any legal, accounting, investment, real estate, tax orother professional advice, consultation or service. The user of this software should consult with a professional in the respective legal, accounting,tax or other professional area before making any decisions.

page 3 of 19

Property DescriptionFlorence Avenue Center

720 East Florence AvenueLos Angeles, CA 90001

Gary Aminoff310-387-6900

Florence Avenue Center

This is a retail center in the East Florence areaof Los Angeles. It is normally fully occupied andhas a diverse group of tenants. It presents agood investment opportunity as it provides goodcurrent cash flow and there are opportunities forincreased revenue. One space will be vacatedon April 30, 2013 and should be quickly re-leased.

The center contains 8,303 sq. ft of retail spaceand 1,702 sq. feet of storage space.

The property has a high traffic count on FlorenceAvenue.

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Property PhotosFlorence Avenue Center



720 E. Florence Avenue, Los Angeles, CA 90001

page 5 of 19

Maps and AerialsFlorence Avenue Center



Aerial Photos

Close Aerial

High Aerial

page 6 of 19

Maps and AerialsFlorence Avenue Center



Location Map

page 7 of 19

Executive SummaryFlorence Avenue Center



ACQUISITION COSTS

Purchase Price, Points and Closing Costs $1,107,190

Investment - Cash $338,190

First Loan $769,000

INVESTMENT INFORMATION

Purchase Price $1,099,000

Price per Tenant $122,111

Price per Sq. Ft. $109.85

INCOME, EXPENSES & CASH FLOW

Gross Scheduled Income $135,480

Total Vacancy and Credits ($6,729)

Operating Expenses ($28,740)

Net Operating Income $100,011

Debt Service ($49,538)

Cash Flow Before Taxes $50,473

FINANCIAL INDICATORS

Cash on Cash Return Before Taxes 14.92%

Optimal Internal Rate of Return (yr 4) 31.34%

Debt Coverage Ratio 2.02

Capitalization Rate 9.10%

Gross Income / Square Feet $13.54

Gross Expenses / Square Feet ($2.87)

Operating Expense Ratio 22.32%

page 8 of 19

Summary Lease AnalysisFlorence Avenue Center



Description Year 1 Year 2 Year 3 Year 4 Year 5

Potential Lease Revenue

Base Rental Income $134,580 $137,210 $142,133 $149,679 $164,818

Lease-up Vacancy $0 $0 $0 $0 $0

Rent Abatement $0 $0 $0 $0 $0

Turnover Vacancy $0 $0 $0 $0 $0

Expense Reimbursements $0 $0 $0 $0 $0

Potential Lease Costs

Tenant Improvements $0 $0 $0 $0 $0

Lease Commissions $0 $0 $0 $0 $0

Net Lease Cash Flow $134,580 $137,210 $142,133 $149,679 $164,818

Additional Information

Sq. Ft. Expires 4,239 5,709 7,484 7,370 8,269

Dollars Expires $54,780 $69,050 $103,433 $98,853 $122,443

page 9 of 19

Lease Rent RollFlorence Avenue Center



Suite Tenant Start Date Expire Date RSF $/RSF AnnualizedRent

TenantImprovements

Commissions RenewalTerm

RenewalIncrease

Notes

720 Mini Market 09/01/2008 12/31/2016 891 $14.81 $13,200 $0.00 $0.00 5 years $3,300.00

722 Income Tax Service 09/01/2008 03/31/2015 845 $14.91 $12,600 $0.00 $0.00 3 years $600.00

724 Hair Salon 01/01/2008 05/31/2013 837 $16.79 $14,050 $0.00 $0.00 1 year $300.00

726 Currently Vacant 04/30/2013 930 $18.31 $17,030 $0.00 $0.00 2 years $1,560.00

726 1/2 Party Rentals 09/01/2008 11/30/2013 1,702 $6.87 $11,700 $0.00 $0.00 1 year $0.00

728 Natural Herbs Dispensary 07/15/2012 07/14/2014 2,400 $12.50 $30,000 $0.00 $0.00 1 year $1,500.00

730A Auto Insurance 04/01/2012 03/31/2017 860 $13.95 $12,000 $0.00 $0.00 5 years $300.00

730B La Rosa Blanca 04/01/2012 11/30/2013 770 $15.58 $12,000 $0.00 $0.00 1 year $0.00

730C La Rosa Blanca 05/01/2012 04/30/2016 770 $15.58 $12,000 $0.00 $0.00 1 year $0.00

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Internal Rate of Return AnalysisFlorence Avenue Center



BEFORE TAX IRR

Time Future Cash Flows

Initial Investment ($338,190)

End of Year 1 $50,473




End of Year 5* $885,968

IRR = 31.67% * ($76,830 + $809,138)

AFTER TAX IRR

Time Future Cash Flows

Initial Investment ($338,190)





End of Year 5* $851,317

IRR = 30.82% * ($76,830 + $774,487)

page 11 of 19

Cash Flow AnalysisFlorence Avenue Center




GROSS SCHEDULED INCOME $135,480 $138,110 $143,033 $150,579 $165,718

General Vacancy ($6,729) ($6,861) ($7,107) ($7,484) ($8,241)

Total Operating Expenses ($28,740) ($29,315) ($29,901) ($30,499) ($31,109)

NET OPERATING INCOME $100,011 $101,935 $106,025 $112,595 $126,368

Loan Payment ($49,538) ($49,538) ($49,538) ($49,538) ($49,538)

NET CASH FLOW (b/t) $50,473 $52,397 $56,487 $63,058 $76,830

Cash On Cash Return b/t 14.92% 15.49% 16.70% 18.65% 22.72%

Footnotes: b/t = before taxes;a/t = after taxes

page 12 of 19

Annual Property Operating DataFlorence Avenue Center




Rental Income $134,580 $137,210 $142,133 $149,679 $164,818

Miscellaneous Income $900 $900 $900 $900 $900

GROSS SCHEDULED INCOME $135,480 $138,110 $143,033 $150,579 $165,718

General Vacancy ($6,729) ($6,861) ($7,107) ($7,484) ($8,241)

GROSS OPERATING INCOME $128,751 $131,250 $135,926 $143,095 $157,477

Expenses

Building Insurance ($2,800) ($2,856) ($2,913) ($2,971) ($3,031)

Maintenance ($3,000) ($3,060) ($3,121) ($3,184) ($3,247)

Repairs ($600) ($612) ($624) ($637) ($649)

Taxes - Real Estate (Est.) ($14,300) ($14,586) ($14,878) ($15,175) ($15,479)

Trash Removal ($840) ($857) ($874) ($891) ($909)

Utility - Electricity ($4,200) ($4,284) ($4,370) ($4,457) ($4,546)

Utility - Water ($3,000) ($3,060) ($3,121) ($3,184) ($3,247)

TOTAL OPERATING EXPENSES ($28,740) ($29,315) ($29,901) ($30,499) ($31,109)

NET OPERATING INCOME $100,011 $101,935 $106,025 $112,595 $126,368

page 13 of 19

Detailed General ExpensesFlorence Avenue Center




Total Expenses ($28,740) ($29,315) ($29,901) ($30,499) ($31,109)

Building Insurance ($2,800) ($2,856) ($2,913) ($2,971) ($3,031)

Maintenance ($3,000) ($3,060) ($3,121) ($3,184) ($3,247)

Repairs ($600) ($612) ($624) ($637) ($649)

Taxes - Real Estate (Est.) ($14,300) ($14,586) ($14,878) ($15,175) ($15,479)

Trash Removal ($840) ($857) ($874) ($891) ($909)

Utility - Electricity ($4,200) ($4,284) ($4,370) ($4,457) ($4,546)

Utility - Water ($3,000) ($3,060) ($3,121) ($3,184) ($3,247)

page 14 of 19

Property Resale AnalysisFlorence Avenue Center




Projected Property Value $1,199,232 $1,247,356 $1,324,652 $1,486,679 $1,595,053

Resale Expenses ($59,962) ($62,368) ($66,233) ($74,334) ($79,753)

Proceeds b/f Debt Payoff $1,139,270 $1,184,988 $1,258,420 $1,412,345 $1,515,301

Basis at Acquisition $1,099,500 $1,099,500 $1,099,500 $1,099,500 $1,099,500

Depreciation ($27,015) ($55,206) ($83,397) ($111,588) ($138,604)

Adjusted Tax Basis $1,072,485 $1,044,294 $1,016,103 $987,912 $960,896

Resale Tax Gain (Loss) $66,785 $140,694 $242,317 $424,433 $554,404

Resale Tax Benefit (Cost) ($6,754) ($13,801) ($20,849) ($27,897) ($34,651)

Loan Principal Balance ($757,654) ($745,728) ($733,192) ($720,015) ($706,163)

Net Resale Proceeds $374,862 $425,458 $504,378 $664,433 $774,487

Footnotes: b/f = before

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Financial IndicatorsFlorence Avenue Center




Gross Rent Multiplier 8.85 9.03 9.26 9.87 9.63

Capitalization Rate 9.10% 9.28% 9.65% 10.25% 11.50%

Cash On Cash Return b/t 14.92% 15.49% 16.70% 18.65% 22.72%

Cash On Cash Return a/t 14.92% 15.49% 16.70% 18.65% 22.72%

Debt Coverage Ratio 2.02 2.06 2.14 2.27 2.55

Gross Income per Sq. Ft. $13.54 $13.80 $14.30 $15.05 $16.56

Expenses per Sq. Ft. ($2.87) ($2.93) ($2.99) ($3.05) ($3.11)

Net Income Multiplier 11.99 12.24 12.49 13.20 12.62

Operating Expense Ratio 22.32% 22.34% 22.00% 21.31% 19.75%

Loan To Value Ratio 63.18% 59.78% 55.35% 48.43% 44.27%

Footnotes: b/t = before taxes; a/t = after taxes

page 16 of 19

Investment Return AnalysisFlorence Avenue Center




Cash Flow - To Date $50,473 $102,870 $159,357 $222,415 $299,245

Net Resale Proceeds $374,862 $425,458 $504,378 $664,433 $774,487

Invested Capital ($338,190) ($338,190) ($338,190) ($338,190) ($338,190)

Net Return on Investment $87,145 $190,138 $325,546 $548,658 $735,542

Internal Rate of Return 25.77% 26.56% 28.09% 31.34% 30.82%

Modified IRR 25.77% 25.17% 25.49% 27.60% 26.38%

NPV (cash flow + reversion) $74,757 $161,237 $273,474 $458,262 $602,275

PV (NOI + reversion) $1,203,186 $1,310,146 $1,441,842 $1,645,099 $1,806,367

Footnotes: a/t = after taxes; Modified IRR = Modified Internal Rate of Return; PV = Present Value; NPV = Net Present Value; NOI = Net Operating IncomeReversion = Amount received from the resale; Net Return on Investment = Cash Flow (a/t To Date) + Net Proceeds from Resale - Invested Capital.

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Cumulative AnalysisFlorence Avenue Center




Equity (appreciation) $100,232 $148,356 $225,652 $387,679 $496,053

Equity (loan reduction) $11,346 $23,272 $35,808 $48,985 $62,837

CASH FLOW (a/t) $50,473 $102,870 $159,357 $222,415 $299,245

Totals - To Date $162,050 $274,497 $420,817 $659,079 $858,135

Invested Capital ($338,190) ($338,190) ($338,190) ($338,190) ($338,190)

ROIC - To Date 47.92% 81.17% 124.43% 194.88% 253.74%

Footnotes: a/t = after taxes; ROIC = Return On Invested Capital

page 18 of 19

Property Equity AnalysisFlorence Avenue Center



Year 1 2 3 4 5

$89,000

$178,000

$267,000

$356,000

$445,000

$534,000

$623,000

$712,000

$801,000

$890,000

Legend

Initial Equity Equity (loan reduction) Equity (appreciation)

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Documents

Florence Avenue Center - Cloud Object Storage | … · 728 Natural Herbs Dispensary 07/15/2012 07/14/2014 2,400 $12.50 $30,000 $0 ... BEFORE TAX IRR Time Future Cash Flows Initial