OFFERING MEMORANDUM Lemon Grove Apartments · Take a trip through history and learn about remarkable feats at the Guinness World Records Museum. Since 1991, the museum has entertained

LOS ANGELES , CA 90038 | 1

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OFFERING MEMORANDUM

Lemon Grove Apar tments5 4 4 2 Le m o n G r o v e Av e , H o l l y w o o d , Lo s A n g e l e s , C A 9 0 0 3 8

Presented By

KYLE MIRRAFATI Senior Associate

Direct +1.310.295.4269Mobile [email protected] No. 01911204 (CA)

DAVID J. HARRINGTON National Director - Multifamily


GREG AMATO Associate - Multifamily

Direct +1.310.955.5833Mobile [email protected] License No. 02005438 (CA)

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Content

4PROPERTY OVERVIEW

6AREA OVERVIEW

12FINANCIAL OVERVIEW

4 | 5442 LEMON GROVE AVENUE

Property Overview

Five

Dense

Opportunity• 5 Units in Prime Hollywood - 90038

• A Majority of Units are Non-Rent Controlled

• Great Unit Mix of Mainly Two Bedroom Units

• 24% Potential Rental Upside

Property Description• Originally a single family dwelling built in 1920

• Three units added to the back of property in 1986

• Approved by the City as a complete 1986 Construction Property with only One Rent Control Unit

• Unit Mix - One 1 + 1 and Four 2 + 1

• 10 Parking Spaces

• On Site Laundry for Additional Income

• On the corner of Lemon Grove and Wilton, a block away from Paramount Pictures

• Easy Access to 101 Freeway

• Extremely close proximity to the various Hollywood Restaurants, Shops and Entertainment

Units

Rental Market

HollywoodSub Market



Location Overview

L o s A n g e l e s M S ALos Angeles is the third largest metropolitan economy in the world, with a population of 13 million and a GDP of over $700 billion. L.A.’s rise to global prominence in such a short time is a testament to the can-do spirit of its residents and businesses, and to a culture of thinking big. Los Angeles has always been an incubator of new ideas, and the scale of its economy reflects the impact that L.A.’s brand of creativity and innovation has had on the world. And it’s a way of thinking that cuts across industries.

The Los Angeles economy is exceptionally diversified, with established industry clusters ranging from Aerospace, entertainment, and fashion to biomedical services, consumer products, and tourism.

2NDMost populous city in the U.S.

±18.6 MILLIONCSA Population

#1 HIGHESTPercentage of Renters


Known around the world as the “movie capital”, the economy of the Los Angeles metropolitan area is famously and heavily based around the entertainment industry. The entertainment industry is primarily focused on television, motion pictures, interactive games and recorded music. Other largely significant sectors of the metropolitans economy include aerospace, technology, petroleum, fashion and apparel, tourism as well as the shipping and international trade business.

Ho l l y w o o d , C a l i f o r n i a


Po i n t s o f I n t e r e s t

Hollywood & Highland is the entertainment center of Los Angeles for tourists and locals alike. Steps away from landmarks

like the world famous Walk of Fame and TCL Chinese Theatre, formerly Grauman’s, Hollywood & Highland is the perfect

place for a Hollywood beginning. The complex has more than 70 retailers, more than 25 dining options, and great

nightlife, including a bowling alley and nightclub. The complex has a Metro Rail Red Line station underneath it, as well

as affordable parking, making it easy to visit from throughout L.A.

If you want to see more celebrity figures immortalized in wax, be sure to visit the Hollywood Wax Museum. It’s the oldest

wax museum in the United States Celebrity wax figures of Angelina Jolie, Charlie Chaplin, Elvis and even the Teenage

Mutant Ninja Turtles provide a unique and memorable experience for the whole family.

Take a trip through history and learn about remarkable feats at the Guinness World Records Museum. Since 1991, the

museum has entertained visitors with displays of amazing records in pop culture, sports, nature and human achievements.

The Hollywood Museum is a must for movie fans and memorabilia collectors. It’s one of the hidden gems of Hollywood,

with more than 10,000 props and artifacts from classic and modern movies housed in the three-story building.

Hollywood and Highland Center

The Hollywood Bowl has been the best major outdoor venue for 13 consecutive year according to Pollstar Magazine. It

is the largest natural outdoor amphitheater in the United States and the mecca for summer concerts in Southern

California. This gorgeous outdoor amphitheater has been hosting concerts since the LA Philharmonic first played here

in 1922. Nestled in an aesthetically blessed fold in the Hollywood Hills, the 18,000-seat venue can bring out the romantic

in the terminally cynical. It’s the summer home of the LA Phil, but it’s hosted everyone from the Beatles to Big Bird, and

today mixes classical concerts with all manner of rock and pop.

The Pantages and Fonda Theater has a history as grand and diverse as the stage and screen fare which audiences have

flocked to enjoy there for half a century. Both Theaters are conveniently located on Hollywood Blvd close to the subject

property.

Concert Venues

Museums


L o c a l D e v e l o p m e n t s

Site preparation is now underway at 6230 Yucca Street, a vacant lot which Related purchased last year for $10.5 million. According to a grading permit issued last week by the Los Angeles Department of Building and Safety, the half-acre property is being developed with an 18-story tower that will feature 114 apartments, 2,100 square feet of retail space and a five-level, 201-car parking garage. Plans call for a mixture of studio, one- and two-bedroom dwellings, as well as amenities such as a pool deck and a fitness center.

HIGH RISE RESIDENTAIL COMPLEX

Construction is slated to wrap up by the end of year, then Netflix will call the entire tower—14 stories and 323,000 square feet—home Developer Hudson Pacific Properties proclaimed, “Our Netflix deal remains the largest lease ever signed in Hollywood in terms of square feet.” Larchmont Buzz says the Colonial-style building that once served Warner Brothers Studios will be renovated; it’s a historic landmark and is listed on the National Register of Historic Places. Icon Tower is just one of many tall buildings that’s changing Hollywood’s skyline.

ICON “NETFLIX” TOWER

Academy Square is a huge, 3.5 acre project in Hollywood bordered by Vine, DeLongpre, Ivar and Homewood Streets, Urbanize LA reports.

There will be 280,000 square feet set aside for shops and office space split among multiple four-story buildings, then a 23-tower that will either contain 250 apartments or 200 apartments and 100 hotel rooms. There have been some guesses as to what kind of retail the project will contain. Curbed LA reported that there would be a 40,000 square foot supermarket.KILROY ACADEMY SQUARE

Construction for the $125-million residential-retail complex on the former home of the defunkt post-production firm Deluxe Laboratories is underway. The project, located on a 3.5-acre site at 1350 N. Western Avenue, will be highlighted by a six-story building featuring 254 apartments - including 21 units of affordable housing.

RESIDENTIAL-RETAIL COMPLEX

Where there once was a House of Blues, there will someday be Sunset Time, mixed-use project featuring a 149-room hotel, 40 residential units and 16,000 SF of retail/food & beverage space in the heart of West Hollywood on the renowned Sunset Strip.

SUNSET TIME


POPULATION 1-MILE 3-MILE 5-MILE

2022 Projection 78,527 547,431 1,108,769

2017 Estimate 76,453 530,248 1,067,563

Growth 2017-2022 2.71% 3.24% 3.86%

Growth 2011-2017 2.79% 3.54% 4.74%

HOUSEHOLDS 1-MILE 3-MILE 5-MILE

2022 Projection 29,748 235,893 457,097

2017 Estimate 28,766 227,368 437,945

Growth 2017-2022 3.41% 3.75% 4.37%

Growth 2011-2017 4.18% 4.48% 5.67%

2017 Avg Household Size 2.60% 2.29% 2.37%

INCOME 1-MILE 3-MILE 5-MILE

$ 0 - $14,999 18.71 16.26 17.50

$ 15,000 - $24,999 17.46 13.99 13.62

$ 25,000 - $34,999 13.88 11.94 10.81

$ 35,000 - $49,999 14.13 14.64 13.29

$ 50,000 - $74,999 15.40 15.33 14.80

$ 75,000 - $99,999 7.35 9.14 9.21

$100,000 - $124,999 4.52 5.74 6.05

$125,000 - $149,999 2.59 3.42 3.80

$150,000 - $199,999 2.38 3.68 4.18

$200,000 - $249,999 1.25 1.85 2.13

$250,000 - $499,999 1.54 2.59 2.94

$500,000+ 0.81 1.42 1.67

2017 Avg Household Income

$56,658 $70,074 $73,888

2017 Median Household Income

$34,958 $42,490 $43,643

D e m o g ra p h i c sR e g i o n a l M a p

L o c a l M a p

LOS ANGELES , CA 90038 | 1 1

D e m o g ra p h i c s


UNIT MIX

Total Units Unit Mix Current Avg Rent Current Monthly Rent Market Rent Market Monthly Rent1 1+1 Built in 1986 $1,290 $1,290 $1,600 $1,6002 2+1 Built in 1986 $1,669 $3,337 $1,900 $3,8002 2+1 Built in 1920** $1,387 $2,774 $1,900 $3,800

Scheduled Monthly Rent: $7,101 $9,200Scheduled Yearly Rent: $85,212 $110,400

F i n a n c i a l O v e r v i e wINVESTMENT SUMMARY

Offering Price: $1,395,000 Number of Units: 5Property: 5442 Lemon Grove Avenue Year Built: 1920 and 1986

Hollywood, Los Angeles, CA 90038 APN: 5535-009-017Price Per Unit: $279,000 Gross Sq. Ft.: 3,382Price Per S.F.: $412.48 Average S.F. Per Unit: 676Cap (current / market): 4.01% / 5.46% Lot Size (Acres): 7,004GRM (current / market): 15.58 / 12.56 Zoning: LAR2

RENT ROLL

# Unit Mix Rent Market Rent

1 5442 A 2+1 $1,389 $1,900

2 5442 B 2+1 $1,385 $1,900

3 5440 A 1+1 $1,290 $1,600

4 5440 B 2+1 $1,437 $1,900

5 5440 C 2+1 $1,900 $1,900

Totals $7,401 $9,200

Averages $1,480 $1,840

**Only One Unit Operating As Rent Control


ANNUALIZED OPERATING DATA

Current MarketScheduled Gross Income: $88,812 $110,400

Less Vacancy Reserve: 3.0% $2,664 3.0% $3,312*

Laundry Income: $700 $700Gross Operating Income: $86,848 $107,788Expenses: 34.7% $30,845 28.7% $31,683*Net Operating Income: $56,003 $76,105Loan Payments: $40,561 $40,561Pre-Tax Cash Flow: 2.2% $15,441 5.2% $35,544**Plus Principal Reduction: $12,468 $12,468Total Return Before Taxes: 4.1% $27,909 7.0% $48,012**

* As a percent of Scheduled Gross Income

** As a percent of Down Payment

Laundry income is estimated at $15 per unit per month

PRO FORMA ANNUAL OPERATING EXPENSES

Current Per Unit % of SGI*Taxes 1.250% x Sale Price $17,438 $3,488 20%*Insurance $0.35 x GSF $1,184 $237 1%Off-Site Management 4.0% x GOI $3,474 $695 4%Repairs & Maintenance $500 x Units $2,500 $500 3%Contract Services $250 x Units $1,250 $250 1%Utilities $850 x Units $4,250 $850 5%

General Administration $150 x Units $750 $150 0.84%

Total Expenses $30,845 $6,169 34.7%

Current Per Unit % of SGINon-controllable expenses: Taxes, Ins., Reserves: $18,621 $3,724 21.0%Total Expense without Taxes $13,408 $2,682 15.10%


P ro p e r t y P h o t o s


This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Lemon Grove Apartments located at 5442 Lemon Grove Ave, Los Angeles, CA 90038 (“Property”) . I t has been prepared by Matthews Retai l Advisors. This Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property. I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Retai l Advisors. The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the Property, you agree:

1 . The Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion or manner detr imental to the interest of the Sel ler.

Owner and Matthews Retai l Advisors expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Offer ing Memorandum.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Retai l Advisors or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Offer ing Memorandum.

C O N F I D E N T I A L I T Y & D I S C L A I M E R S TAT E M E N T

LOS ANGELES , CA 90038 | 1 7

L isted By

KYLE MIRRAFATI Senior Associate


DAVID J. HARRINGTON National Director - Multifamily


GREG AMATO Associate - Multifamily

Direct +1.310.955.5833Mobile [email protected] License No. 02005438 (CA)

™

Lemon Grove Apar tments5 4 4 2 Le m o n G r o v e Av e , H o l l y w o o d , Lo s A n g e l e s , C A 9 0 0 3 8

Documents

OFFERING MEMORANDUM Lemon Grove Apartments · Take a trip through history and learn about remarkable feats at the Guinness World Records Museum. Since 1991, the museum has entertained