Offering Memorandum - LoopNetimages2.loopnet.com/d2/dgDA2AmUdEKdNSAXYrsutTl9Yvh52o14N… · Loan Amount $3,645,000 GRM 15.92 13.68 Loan Type Proposed New Net Operating Income $271,435

DeLaVe Villa Apartments635 S 11th St • San Jose, CA 95112

Offering Memorandum

1

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.

DELAVE VILLA APARTMENTS

San Jose, CA

ACT ID Z0010427

2

TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01Offering Summary

Regional Map

Local Map

Aerial Photo

FINANCIAL ANALYSIS 02Rent Roll Summary

Rent Roll Detail

Operating Statement

Notes

Pricing Detail

Acquisition Financing

MARKET COMPARABLES 03Sales Comparables

Rent Comparables

MARKET OVERVIEW 04

Market Analysis

Demographic Analysis


3


4

INVESTMENT

OVERVIEW


#

EXECUTIVE SUMMARY

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

Rosendin Electric Inc 3,668

Supermicro 2,660

Broadcom 2,400

City of San Jose 2,327

Corrections Dept of 2,008

Hadco Santa Clara Inc 2,000

Sunrun 2,000

Coast Personnel Services Inc 1,895

Smtc Manufacturing Corp Cal 1,875

Santa Clara Valley Medical Ctr 1,682

Sanmina Corporation 1,598

S C U 1,400

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2017 Estimate Pop 41,634 298,911 705,101

2017 Census Pop 37,243 268,149 641,886

2017 Estimate HH 13,263 89,260 215,137

2017 Census HH 11,865 81,184 198,718

Median HH Income $50,457 $64,846 $80,716

Per Capita Income $31,140 $29,900 $35,308

Average HH Income $91,681 $98,245 $114,440

UNIT MIX

NUMBEROF UNITS

UNIT TYPEAPPROX.SQUARE FEET

5 1 BD 1 BA 580

15 2 BD 2 BA 650

20 Total 12,650

VITAL DATA

Price $7,290,000 CURRENT PROFORMA

Down Payment 50% / $3,645,000 CAP Rate 3.72% 4.64%

Loan Amount $3,645,000 GRM 15.92 13.68

Loan Type Proposed NewNet Operating Income

$271,435 $338,115

Interest Rate / Amortization 4.50% / 30 YearsNet Cash Flow After Debt Service

1.37% / $49,811 3.20% / $116,491

Price/Unit $364,500 Total Return 2.98% / $108,613 4.88% / $177,994

Price/SF $576.28

Number of Units 20

Rentable Square Feet 12,650

Year Built 1963

Lot Size 0.3 acre(s)

5


OFFERING SUMMARY

▪ Highest median family incomes in the country

▪ Close freeway access for commuters to Interstate 280, 680 and Highway's 87 & 101

▪ Beautiful location just minutes from downtown San Jose

▪ 20% one-bedroom/one-bath 80% two-bedroom/one-bath

INVESTMENT HIGHLIGHTS

The Cerna Group of Marcus & Millichap has been selected to exclusively market DeLaVe Villa Apartments, a stunning, twenty unit villa style apartment community located at

635 S 11th St. in the thriving city of San Jose, CA. The investment appeal of this asset is driven by San Jose's strong employment fundamentals and low vacancy levels.

With a world class location in the heart of Silicon Valley.

The DeLaVe Villa Apartments offers to the investor an established well-located investment opportunity in dynamic Silicon Valley. With a desirable mix of five one-

bedroom/one- bath units and 15 two-bedroom/one-bath units. Tenants enjoy onsite coin-operated laundry, well-lit tuck under parking along with ample off-street parking for

guests. DeLaVe Villa Apartments are located in San Jose Unified School District. Built in 1963, situated on an approximate .3- acre parcel. The subject property is also

located about three blocks from San Jose State University and approximately one mile from the heart of downtown San Jose.

The city of San Jose has recently approved the Valley Transit Authority (VTA) and Bay Area Rapid Transit (BART) underground railway connecting the East Side of San

Jose to the Diridon Station, adjacent to the SAP Center, home of the San Jose Sharks. The potential final stop on the line could be at the door step of Googles new campus

right in downtown San Jose. Combined with the easy access to all public transportation, interstates 680, 280 and highway's 101 & 87 this property offers ideal commuting

options for residents.

Located within Santa Clara County, a major employment center for the region, providing more than a quarter of all jobs in the Bay Area. San Jose has one of the highest

medians family incomes in the country, and a wide diversity of cultures, backgrounds and talents. The County of Santa Clara and specifically Silicon Valley continues to

attract people from all over the world. The San Jose market remained one of the strongest performers during the last downturn.

INVESTMENT OVERVIEW

6


#

OFFERING SUMMARY

PROPERTY OVERVIEW

San Jose is the third-largest city by population in California, tenth-largest by population in the United States and

the largest of Santa Clara County. It is the largest city within the Bay Area as well as the largest city in Northern

California. The large concentration of high-technology engineering, computer and microprocessor companies

around San Jose has led the area to be known as the Silicon Valley. As the largest city in the valley, San Jose has

billed itself as The Capital of the Silicon Valley. San Jose is now considered to be a global city and notable for its

affluence and high cost of living. The U.S. Census Bureau estimated San Joses population to be 1,015,785 as of

July 1, 2014. DeLaVe Villa Apartments is located within an hour of many distinguished educational institutions

including Stanford University, San Jose State University, Santa Clara University as well as several community

colleges. As part of the Silicon Valley, high-tech companies such as eBay!, Cisco Systems, IBM, Adobe Systems,

Intel, LinkedIn, Apple, Yahoo!, Google, Facebook and many others are also located within close proximity. The

subject property is conveniently located near Interstates 280 & 680 as well as Highway's 101 & 87 providing

residents with direct access to local employment and attractions across the Bay Area.

8

▪ Well lit tuck under parking for tenants

Common Area Amenities

▪ Added security cameras for tenant safety

▪ Additional street parking

▪ Onsite coin operated laundry

▪ Electric Range

Unit Amenities

▪ Refrigerator

8


PROPERTY SUMMARY

OFFERING SUMMARY

PROPOSED FINANCING

First Trust Deed

Loan Amount $3,645,000

Loan Type Proposed New

Interest Rate 4.50%

Amortization 30 Years

Loan Term 7 Years

Loan to Value 50%

Debt Coverage Ratio 1.22

THE OFFERING

Property DeLaVe Villa Apartments

Price $7,290,000

Property Address 635 S 11th St, San Jose, CA

Zoning RM

SITE DESCRIPTION

Number of Units 20

Year Built/Renovated 1950

Rentable Square Feet 15,306

Lot Size 9147

9

REGIONAL MAP


10

LOCAL MAP


11

AERIAL PHOTO


12

Marcus & Millichap closes

more transactions than any other

brokerage firm.

12


13

PROPERTY PHOTO


14

FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS


RENT ROLL SUMMARY

15

FINANCIAL ANALYSIS


16

RENT ROLL DETAIL

FINANCIAL ANALYSIS


OPERATING STATEMENT

17

FINANCIAL ANALYSIS


PRICING DETAIL

18

MARCUS & MILLICHAP CAPITAL CORPORATION

CAPABILITIES

MMCC—our fully integrated, dedicated financing arm—is committed to

providing superior capital market expertise, precisely managed execution, and

unparalleled access to capital sources providing the most competitive rates and

terms.

We leverage our prominent capital market relationships with commercial banks,

life insurance companies, CMBS, private and public debt/equity funds, Fannie

Mae, Freddie Mac and HUD to provide our clients with the greatest range of

financing options.

Our dedicated, knowledgeable experts understand the challenges of financing

and work tirelessly to resolve all potential issues to the benefit of our clients.

National platform

operating

within the firm’s

brokerage offices

$5.63 billion

total national

volume in 2017

Access to more

capital sources

than any other

firm in the

industry

Optimum financing solutions to

enhance value

Our ability to enhance buyer

pool by expanding finance

options

Our ability to enhance

seller control

• Through buyer

qualification support

• Our ability to manage buyers

finance expectations

• Ability to monitor and

manage buyer/lender progress,

insuring timely,

predictable closings

• By relying on a world class

set of debt/equity sources

and presenting a tightly

underwritten credit file

WHY MMCC?

Closed 1,707

debt and equity

financings

in 2017

ACQUISITION FINANCING


19


20

MARKET

COMPARABLES

PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


21

SALES COMPARABLES IN ESCROW COMPARABLES

Units Unit Type

Offering Price: $7,290,000 5 1 BD 1 BA

Price/Unit: $364,500 15 2 BD 2 BA

Price/SF: $576.28

CAP Rate: 3.72%

GRM: 15.92

Total No. of Units: 20

Year Built: 1963

Underwriting Criteria

Income $446,089 Expenses $174,653

NOI $271,435 Vacancy ($13,738)

DELAVE VILLA APARTMENTS635 S 11th St, San Jose, CA, 95112

1

Units Unit Type

Close Of Escrow: 11/1/2017 21 1 Bdr 1 Bath

Sales Price: $9,050,000 14 2 Bdr 1 Bath

Price/Unit: $258,571

Price/SF: $419.76

CAP Rate: 4.74%

GRM: 12.91


Year Built: 1960

272 LA PALA DR272 La Pala Dr, San Jose, CA, 95127

Units Unit Type

Close Of Escrow: 12/14/2017 5 2 Bdr Bath

Sales Price: $9,500,000 18 1 Bdr Bath

Price/Unit: $380,000 2 Studio Bath

Price/SF: $406.89

CAP Rate: 3.83%

GRM: 17.13


Year Built: 1932

2

15 HAWTHORNE WAY15 Hawthorne Way, San Jose, CA, 95110

PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


22

SALES COMPARABLES IN ESCROW COMPARABLES

Units Unit Type

Close Of Escrow: 2/8/2018 20 1 Bdr 1 Bath

Days On Market: 145 10 2 Bdr 1 Bath

Sales Price: $7,480,000


Price/SF: $400.13

CAP Rate: 5.01%

GRM: 12.75


Year Built: 1958

3

3201 CADILLAC DR3201 Cadillac Dr, San Jose, CA, 95117

4

Units Unit Type

Close Of Escrow: 9/26/2017 12 Studio Bath

Days On Market: 92 13 1 Bdr 1 Bath

Sales Price: $7,774,000 1 2 Bdr 1 Bath


Price/SF: $651.91

CAP Rate: 4.30%

GRM: 15.50


Year Built: 1959

659 AND 649 SOUTH 9TH STREET659 and 649 South 9th Street, San Jose, CA, 95112

Units Unit Type

In Escrow 12 2 Bdr Bath

Days On Market: 234 7 1 Bdr Bath

List Price: $12,800,000 20 Studio Bath


Price/SF: $698.69

CAP Rate: 4.35%

GRM: 15.70


Year Built: 1948

5

FIRST STREET MANOR523-530 First Street, San Jose, CA, 95112

PROPERTY NAMEDELAVE VILLA APARTMENTS

SALES COMPARABLES

23

SALES COMPARABLES

Avg. $469.67

Avg. $698.69

$0.00

$70.00

$140.00

$210.00

$280.00

$350.00

$420.00

$490.00

$560.00

$630.00

$700.00

DeLaVeVilla

Apartments

272La Pala Dr

15Hawthorne

Way

3201Cadillac Dr

659 and649 South9th Street

FirstStreetManor

Average Price Per Square Foot

Avg. $296,726

Avg. $328,205

$0

$40,000

$80,000

$120,000

$160,000

$200,000

$240,000

$280,000

$320,000

$360,000

$400,000

DeLaVeVilla

Apartments

272La Pala Dr

15Hawthorne

Way

3201Cadillac Dr


FirstStreetManor

Average Price Per Unit

Avg. 14.57

Avg. 15.70

0.00

1.90

3.80

5.70

7.60

9.50

11.40

13.30

15.20

17.10

19.00

DeLaVeVilla

Apartments

272La Pala Dr

15Hawthorne

Way

3201Cadillac Dr


FirstStreetManor

Average GRM

Avg. 4.47%Avg. 4.35%

0.0

0.6

1.2

1.8

2.4

3.0

3.6

4.2

4.8

5.4

6.0

DeLaVeVilla

Apartments

272La Pala Dr

15Hawthorne

Way

3201Cadillac Dr


FirstStreetManor

Average Cap Rate

SALES COMPARABLES

IN ESCROW COMPARABLES

SALES COMPS AVG

IN ESCROW COMPS AVG

PROPERTY NAMEDELAVE VILLA APARTMENTS

RENT COMPARABLES

24

AVERAGE RENT - MULTIFAMILY

Avg. $2,258

$0

$300

$600

$900

$1,200

$1,500

$1,800

$2,100

$2,400

$2,700

$3,000

DeLaVeVilla

Apartments

110 Graham

Ave

460S 4th St

716N 1st St

143N 8th St

93 EWilliams St

93 W ReedSt

132N 5th St

225 ETaylor St

544N 4th St

2 Bedroom

Avg. $2,009

$0

$300

$600

$900

$1,200

$1,500

$1,800

$2,100

$2,400

$2,700

$3,000

DeLaVeVilla

Apartments

110 Graham

Ave

460S 4th St

716N 1st St

143N 8th St

93 EWilliams St

93 W ReedSt

132N 5th St

225 ETaylor St

544N 4th St

1 Bedroom

8


RENT COMPARABLES MAP


(SUBJECT)

110 Graham Ave

460 S 4th St

716 N 1st St

143 N 8th St

93 E Williams St

93 W Reed St

132 N 5th St

225 E Taylor St

544 N 4th St

4

7

8

9

11

20

12

14

15

16

17

13

18

10

4

7

8

9

1

2

3

5

6

25

PROPERTY NAME

MARKETING TEAM


RENT COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


26

YEAR BUILT: 1963

rentpropertyname1rentpropertyaddress1

Unit Type Units SF Rent Rent/SF

1 BD 1 BA 5 580 $1,604 $2.77

2 BD 2 BA 15 650 $2,009 $3.09

Total/Avg. 20 633 $1,908 $3.02

DELAVE VILLA APARTMENTS635 S 11th St, San Jose, CA, 95112

YEAR BUILT: 1950

1


1 Bdr 1 Bath Other 8 600-750$1,750-$2,100

$2.85

2 Bdr 1 Bath Other 8 800-900$2,000-$2,400

$2.59

Total/Avg. 16 763 $2,063 $2.70

110 GRAHAM AVE110 Graham Ave, San Jose, CA, 95110

2

YEAR BUILT: 1964


1 Bdr 1 Bath Other 15 550-750$1,895-$2,200

$3.15

2 Bdr 1 Bath Other 5 750-850$2,200-$2,400

$2.88

Total/Avg. 20 688 $2,111 $3.07

460 S 4TH ST460 S 4th St, San Jose, CA, 95112

PROPERTY NAME

MARKETING TEAM


RENT COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


27

YEAR BUILT: 1948

3


1 Bdr 1 Bath Other 3 550-700$1,800-$2,200

$3.20

2 Bdr 1 Bath Other 3 750-850$2,085-$2,300

$2.74

Total/Avg. 6 713 $2,096 $2.94

716 N 1ST ST716 N 1st St, San Jose, CA, 95112

YEAR BUILT: 1961

4


1 Bdr 1 Bath Other 6 600-750$1,800-$2,200

$2.96

2 Bdr 1 Bath Other 3 789-850$2,095-$2,300

$2.68

Total/Avg. 9 723 $2,066 $2.86

143 N 8TH ST143 N 8th St, San Jose, CA, 95112

5

YEAR BUILT: 1924


2 Bdr 1 Bath Other 3 800-900$1,800-$2,200

$2.35

Total/Avg. 3 850 $2,000 $2.35

93 E WILLIAMS ST93 E Williams St, San Jose, CA, 95113

PROPERTY NAME

MARKETING TEAM


RENT COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


28

YEAR BUILT: 1957

6


1 Bdr 1 Bath Other 11 650-750$2,095-$2,200

$3.07

Total/Avg. 11 700 $2,148 $3.07

93 W REED ST93 W Reed St, San Jose, CA, 95110

YEAR BUILT: 1966

7


1 Bdr 1 Bath Other 8 575-650$1,800-$2,000

$3.10

2 Bdr 1 Bath Other 8 700-800$2,195-$2,400

$3.06

Total/Avg. 16 681 $2,099 $3.08


8

YEAR BUILT: 1954


1 Bdr 1 Bath Other 15 600-750$1,800-$2,200

$2.96

2 Bdr 1 Bath Other 1 800-800$2,300-$2,500

$3.00

Total/Avg. 16 683 $2,025 $2.97

225 E TAYLOR ST225 E Taylor St, San Jose, CA, 95112

PROPERTY NAME

MARKETING TEAM


RENT COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


29

YEAR BUILT: 1965

9


1 Bdr 1 Bath 12 575-750$1,800-$2,300

$3.09

2 Bdr 1 Bath 6 683-850$2,450-$2,500

$3.23

Total/Avg. 18 697 $2,192 $3.14



30

MARKET

OVERVIEW

MARKET OVERVIEW

SAN JOSEOVERVIEW

1

Known to the world as Silicon Valley, the San Jose metro is located at

the southern end of the San Francisco Bay and encompasses Santa

Clara and San Benito counties. A large portion of the area’s 1,315

square miles is unincorporated ranch and farmland. The metro contains

more than 2 million inhabitants in 15 cities. More than half of the

region’s residents reside in the city of San Jose. It is the metro’s largest

city with more than 1 million residents, followed by Sunnyvale and

Santa Clara. Venture capital funds received in the 1990s helped to turn

the area into the world’s most prominent technology hub, a distinction

that remains today.

MARKET OVERVIEW

METRO HIGHLIGHTS

PREMIER HIGH-TECH CENTER

Silicon Valley’s dense concentration of high-tech

jobs is world renowned, attracting a variety of large

employers and startups.

HIGH INCOMES

Well-paying jobs in the tech sector contribute to a

median annual household income level that is

almost double the U.S. median.

HIGHLY EDUCATED WORKFORCE

Nearly half of all residents age 25 and older have

obtained at least a bachelor’s degree, well above

the U.S. average.


MARKET OVERVIEW

ECONOMY▪ The San Jose employment base contains more than 1 million workers, ranking the metro as

one of the 30 largest job markets in the nation.

▪ There are various Fortune 500 companies headquartered in San Jose, including Intel, Cisco

Systems, Apple Inc., eBay and Google Inc.

▪ The area’s many institutions of higher learning, including Stanford, San Jose State and

Santa Clara University, support these companies by graduating thousands of engineering

and computer science students.

SHARE OF 2017 TOTAL EMPLOYMENT

MAJOR AREA EMPLOYERS

Cisco Systems

County of Santa Clara

Adobe Systems Inc

Hewlett-Packard Co.

City of San Jose

Intel Corp

eBay

US Veterans Medical Center

San Jose State University

Apple* Forecast

2

MANUFACTURING

15%GOVERNMENT

HEALTH SERVICES

EDUCATION AND

+OTHER SERVICES

2%

LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES

12%

AND UTILITIES

TRADE, TRANSPORTATION CONSTRUCTION

PROFESSIONAL AND

BUSINESS SERVICES

7%INFORMATION

21%

5%

9% 10% 3%

15%


8


DEMOGRAPHICS

33

Documents

Offering Memorandum - LoopNetimages2.loopnet.com/d2/dgDA2AmUdEKdNSAXYrsutTl9Yvh52o14N… · Loan Amount $3,645,000 GRM 15.92 13.68 Loan Type Proposed New Net Operating Income $271,435