an 5-unit renovation opportunity delivered with three ...€¦ · services surrounding major...

An 5-unit renovation opportunity delivered withthree vacant units. Located in Boyle Heights.

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CONFIDENTIALITY & DISCLAIMERThis offering memorandum has been provided by Iconic Investments for the use of the intended recipient. All information contained in the offering memorandum has been obtained from sources other than Iconic Investments, and neither Iconic Investments nor its affiliates makes any representation or warranties, expressed or implied, as to the accuracy or completeness of the information within the offering memorandum. Iconic Investments has provided the unverified information to prospective purchasers only to establish a preliminary interest in the property. Furthermore, Iconic Investments does not guarantee that the information provided herein has not changed since the date the offering memorandum was prepared. It is the sole responsibility of the recipient to analyze, verify and conclude that the information provided herein is accurate and meets the recipient’s investment criteria. Iconic Investments and Owner, and their respective officers, directors, employees, equity holders and agents expressly disclaim any and all liability that may be based upon or relate to the use of the information contained within this Offering Memorandum.

Owner and Iconic Investments each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the property and/or terminate discussions with any entity at any time with without notice. Owner shall have no legal commitment or obligations to any recipient reviewing the offering memorandum or making an offer to purchase the property unless and until such offer is approved by Owner, a written agreement for the purchase of the property has been fully executed, delivered and approved by Owner and its legal counsel, and any obligations set by Owner thereunder have been satisfied or waived.

The recipient agrees that (a) the Offering Memorandum and its contents are confidential information, except for such information contained in the Offering Memorandum that is a matter of public record or is provided from sources made available to the public, (b) the Recipient will hold and treat it in the strictest of confidence, and the Recipient and the need to know parties will not directly or indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity without prior written authorization of Iconic Investments and the Owner.

PETER [email protected]: 310-993-7600O: 747-444-3303BRE #01335696

DANIEL [email protected]: 213-247-8009O: 747-444-3302BRE #02087856

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TABLE OF CONTENTS

4 Property Overview

11 Enhancement Ideas

14 Financial Overview

18 Rent Survey

21 Sales Comparables

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PROPERTY OVERVIEW

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PROPERTY OVERVIEW

The Tremont Apartments is a five-unit multifamily property located in Los Angeles’ Boyle Heights neighborhood, one of the city’s rapidly evolving submarkets. The community and local ownership are enjoying the benefits rapid growth and urbanization that are happening at the local level. The continued transformation of this neighborhood will continue to have positive business impacts, bringing in new retail and entertainment options, and transforming a once neglected portion of the city into a vibrant community with improved services surrounding major transit hubs.

Located at 1023 Tremont Street, The Tremont Apartments was built in 1927 and features 4,051 square-feet of improvements on a 8,138 square-foot lot. The property features all two-bedroom and one-bath units with an average living space of 800 square feet each and individual water heaters.

The Tremont Apartments is the ideal investment opportunity for all renovation-oriented buyers. A rare opportunity, as three of the five units will be delivered vacant at the close of escrow, allowing new ownership to immediately renovate, remodel and reposition the property to appeal to higher-paying professionals and potential tenants. The vacancies also allow a buyer to put their own personal touch on the renovations, allowing for flexibility in bringing the interior and exterior of the property into the 21st century.

• Three of the Five Units to be Delivered Vacant

• Boyle Heights is one of the fastest changing submarkets in Los Angeles

• Ability to immediately renovate, remodel and reposition the asset

• 6.10% CAP Rate post renovation and lease-up

• Charming and spacious two-bedroom units averaging 800 square feet

Within one-mile of the Tremont Apartments is the USC Medical School, Pharmacy School and Health Science Campus. Construction is underway for two brand hotels within walking distance: An 81-room Hilton Hotel on the corner Pomeroy & N Soto, and a 200-room Hyatt Hotel located at the USC Health Science Campus. The Hyatt will feature 14,000 square-feet of retail/restaurants and a 18,000 square-foot conference center.

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Property Address1023 Tremont St

Los Angeles, CA 90033

Units 5

Sub-Market Boyle Heights

Gross SF 4,051

Year Built 1927

Occupancy 3 Vacant Units

Land Area 8,138

Assessor Parcel Number 5177-005-042

Zoning LAR2

PROPERTY OVERVIEW

Asking Price $1,075,000

Price Per Unit $215,000

Price Per Square Foot $265.37

CAP Rate (Curr/Renovated) 6.10%/ 8.19%

GM Rate (Curr/Renovated) 11.14 / 8.98

INVESTMENT OVERVIEW

5Ability to Reposition

5 Apartment Units

DevelopmentMany new projectsin surrounding area

3 3 Entertainment Centers

Glassell ParkSouth Pasadena

Downtown Los Angeles

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TREMONT APARTMENTS

EVERGREEN AVEELEMENTARY SCHOOL

TREMONT STREET

10 FREEWAY

DOWNTOWN LA

81 ROOM HOTEL(HILTON BRAND)

UNDER CONSTRUCTION

USC MEDICALSCHOOL

USC SCHOOLOF PHARMACY

STARBUCKS

USC HEALTH SCIENCE CAMPUS

LAC & USC MEDICAL CENTER

MAP OF THE AREA 10

TREMONTAPARTMENTS

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ENHANCEMENT IDEAS

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ENHANCEMENT IDEASWith a majority of the units being delivered vacant, new ownership has the opportunity to immediately modernize the unit interiors, while enhancing the exterior of the property to highlight the 1920’s charm. Young urban professionals are demanding hip and modern units and pay leading rents for renovated buildings. New ownership can significantly push rents by installing new kitchen and bathroom cabinetry and fixtures, refinish existing hardwood floors, recessed lighting, windows, modern stainless steel appliances packages, split system air conditioning, new doors, and in-unit washer and dryers. Other enhancements could include reconfiguring of the units to make the space more efficient.

NEW CABINETS QUARTZ COUNTERTOPS DESIGNER FAUCETS

REFINISH HARDWOOD FLOORS STAINLESS STEEL APPLIANCES MODERN BATHTUB

OPEN KITCHENTo increase flow and natural light, remove the dividing wall between the kitchen and the living room. Add an island with a breakfast bar to save space and boost functionality.

RECONFIGURE UNITS Some of the units can be reconfigured to provide additional living room and bedroom space. This will improve the efficiency of the units.

FURNISHEDHigher rents can also be achieved by offering some of the units furnished. This convenient option would appeal to busy Millennials and transitional tenants.

DESIGNER TILESUse designer tiles for flooring and the kitchen backsplash. They will add style and quality to the unit, and the payoff of higher rents will be well worth the additional expense.

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ADDITIONAL ENHANCEMENT IDEAS

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FINANCIAL OVERVIEW

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ASSET Tremont Apartments

LOCATION1023 Tremont Street


OPPORTUNITY 5 Apartment Units

YEAR BUILT 1927

PURCHASE PRICE $1,075,000

PRICE PER UNIT $215,000

CURRENT CAP RATE 6.10%

PRO-FORMA CAP RATE 8.10%

CURRENT GRM 11.14

PRO-FORMA GRM 8.98

PRICE PER SF FOOT $265.37

INVESTMENT SUMMARY

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CURRENT RENOVATED

Unit # Status Unit Type Unit Sq. Ft Current Rent Per Sq. FtAs-Is

Market RentPer Sq. Ft

RenovatedMarket Rent

Per Sq. Ft

1029 Tremont Occupied 2 Bedroom + 1 Bath 800 $1,030.91 $1.29 $1,650.00 $2.06 $1,995.00 $2.49

1027 Tremont Vacant 2 Bedroom + 1 Bath 800 $1,995.00 $2.49 $1,995.00 $2.49 $1,995.00 $2.49

1025 Tremont Occupied 2 Bedroom + 1 Bath 800 $1,022.79 $1.28 $1,650.00 $2.06 $1,995.00 $2.49

1023 Tremont Vacant 2 Bedroom + 1 Bath 800 $1,995.00 $2.49 $1,995.00 $2.49 $1,995.00 $2.49

2689 Pomeroy Vacant 2 Bedroom + 1 Bath 800 $1,995.00 $2.49 $1,995.00 $2.49 $1,995.00 $2.49

TOTAL 5 Units $8,038.70 $2.01 $9,285.00 $2.32 $9,975.00 $2.49

RENT ROLL

UNIT MIX SUMMARY

UNIT TYPE# OF

UNITS

AVG SQUARE

FEET

AVERAGE CURRENT

RENTS

RENT $/SF

CURRENT MONTHLY INCOME

AS-IS MARKET RENTS

AS-IS MARKET

$/SF

AS-IS MARKET

MONTHLY INCOME

RENOVATED MARKET RENTS

RENOVATED MARKET $/SF

RENOVATED MARKET

MONTHLY INCOME

2 Bedroom/1 Bath - (Occupied) 2 800 $1,026.85 $1.28 $2,053.70 $1,650 $2.06 $3,300 $1,995 $2.49 $3,990

2 Bedroom/1 Bath - (Vacant) 3 800 $1,995 $2.49 $5,985 $1,995 $2.49 $5,985 $1,995 $2.49 $5,985

Totals/Averages 5 800 $1,607.74 $2.01 $8,038.70 $1,823 $2.32 $9,285 $1,995 $2.49 $9,975

*1027,1023 & 2689 will be delivered vacant at close of escrow* Vacant units require renovation

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METRICS OPERATIONS OVERVIEWPROPERTY OVERVIEW

Property Address 1023 Tremont Street


Assessor Parcel Number 5177-005-042

Market Los Angeles

Sub-Market Boyle Heights

Zoning LAR2

Number of Units 5

Year Built 1927

Gross Building Square Feet 4,051

Lot Size 8,138

INVESTMENT OVERVIEW

Purchase Price $1,075,000

Price Per Unit $215,000

Price Per Square Foot $265.37

INCOME CURRENT AS-IS MARKET RENOVATED MARKETScheduled Market Rent $96,464 $111,420 $119,700

Less: Vacancy 3.00% ($2,894) ($3,343) ($3,591)

Subtotal: Effective Rental Income $93,570 $108,077 $116,109

Other Income

Plus: Miscellaneous Fees $250 $250 $250

Plus: LAHD/SCEP Fees $277 $277 $277

Subtotal: Total Other Income $527 $527 $527

EFFECTIVE GROSS INCOME $94,097 $108,604 $116,636

EXPENSESFixed Expenses

Off-Site Management 4.50% $4,211 $4,863 $5,225

Property Tax 1.20% $12,857 $12,857 $12,857

Property & Liability Insurance $2,025 $2,025 $2,025

Subtotal: Fixed Expenses $19,970 $20,623 $20,984

Controllable Expenses

LAHD Fees & Administrative Costs $550 $550 $550

Repairs & Maintenance $600 $3,000 $3,000 $3,000

Utilities $3,050 $3,050 $3,050

Landscaping $900 $900 $900

Pest Control $480 $480 $480

Subtotal : Controllable Expenses $8,580 $8,580 $8,580

TOTAL EXPENSES ($28,550) ($29,203) ($29,564)

NET OPERATING INCOME $65,548 $79,402 $87,072

Capital Reserves $200 ($1,000) ($1,000) ($1,000)

Debt Service ($43,633) ($43,633) ($43,633)

NET CASH FLOW $20,915 $34,769 $42,439

6.49% 10.78% 13.16%

Principal Reduction $13,023 $13,023 $13,023

TOTAL RETURN $33,938 $47,792 $55,462

10.52% 14.82% 17.20%

FINANCING OVERVIEWDown Payment $322,500

Loan Amount $752,500

Loan to Value % 70.00%

Debt Service Coverage Ratio 1.50

Loan Type Fully Amortizing

Loan Rate 4.10%

Loan Term 5 Years

INVESTMENT RETURNSGRM - Current 11.14

CAP Rate - Current 6.10%

GRM - Market 9.65

CAP Rate - Market 7.39%

GRM - Renovated 8.98

CAP Rate - Renovated 8.10%

• Insurance is estimated at $0.50 per square foot• Rubbish is collected by the City of LA. Expense is to take trash cans in/out• Utilities are actual – Individually metered for gas & electric/Individual water heaters• Current income assumes renovation of the 3 vacant units

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RENT SURVEY

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RENT SURVEY

ADDRESS UnitsYear Built

Parking RenovatedIndividually

MeteredType Rent SF Rent/SF

1023 Tremont StLos Angeles, 90033

5 1927 Yes No Yes 2 Bedroom/1 Bath $1,995 800 $2.49

1027 Kingston AvenueLos Angeles, CA 90033

3 2005 Yes Yes Yes 2 Bedroom/1 Bath $1,850 900 $2.06

2455 Malabar StreetLos Angeles, CA 90033

3 1929 No No Yes 2 Bedroom/1 Bath $1,895 800 $2.37

520 S St Louis StreetLos Angeles, CA 90033

6 1972 Yes Yes No 2 Bedroom/ 1 Bath $1,895 720 $2.63

1501 Pennsylvania AvenueLos Angeles, CA 90033


108 S Cummings StreetLos Angeles, CA 90033

6 1929 No No Yes 2 Bedroom/1 Bath $1,995 750 $2.66

2455 Malabar StreetLos Angeles, CA 90033

5 1924 Yes Yes No 2 Bedroom/1 Bath $2,000 800 $2.50

210 N Soto StreetLos Angeles, CA 90033

3 1895 No Yes No 2 Bedroom/ 1 Bath $2,100 650 $3.23

2440 Verde StreetLos Angeles, CA 90033


2202 Michigan AvenueLos Angeles, CA 90033


AVERAGES $1,993 $2.66 $2.66

RENT SURVEY MAP

TREMONTAPARTMENTS

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1501 PENNSYLVANIA AVENUELos Angeles, CA 90033

520 S ST LOUIS STREETLos Angeles, CA 90033

108 S CUMMINGS STREET Los Angeles, CA 90033

1027 KINGSTON AVENUELos Angeles, CA 90033

2455 MALABAR STREETLos Angeles, CA 90033

2440 VERDE STREETLos Angeles, CA 90033

2202 MICHIGAN AVENUELos Angeles, CA 90033

210 N SOTO STREETLos Angeles, CA 90033

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SALES COMPARABLES

2 Bedroom/1 Bath

Made with

1 Bedroom/1 Bath 2 Bedroom/1 Bath

3 Bedroom/1 Bath

Made with


Made with


Made with

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SALES COMPARABLES

PROPERTY 1023 Tremont St 1039 N Cummings St 2519 Lancaster Ave 627 Brittania St

LOCATION Boyle Heights Boyle Heights Boyle Heights Boyle Heights

NUMBER OF UNITS 5 3 5 5

YEAR BUILT 1927 1960 1921 1938

DATE SOLD Subject Mar - 19 Jan - 19 May - 18

SALE PRICE $1,075,000 $800,000 $987,000 $845,000

PRICE/UNIT $215,000 $266,667 $197,400 $169,000

CAP RATE 6.10% N/A N/A 2.70%

GRM 11.14 N/A N/A 19.38

PRICE/SF $265 $315 $358 $170

PARKING Yes Yes Yes Yes

UNIT MIX

5 - 2 Bedroom/1 Bath 2 - 2 Bedroom/1 Bath1 - 3 Bedroom/2 Bath

1 - 1 Bedroom/1 Bath3 - 2 Bedroom/1 Bath1 - 3 Bedroom/1 Bath

1 - 1 Bedroom/1 Bath4 - 2 Bedroom/1 Bath

2 Bedroom/1 Bath

Made with

Studio/1 Bath 1 Bedroom/1 Bath

Made with


Made with

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SALES COMPARABLES

PROPERTY 1023 Tremont St 733 N Soto St 549 S Mathews St

LOCATION Boyle Heights Boyle Heights Boyle Heights

NUMBER OF UNITS 5 6 6

YEAR BUILT 1927 1924 1961

DATE SOLD Subject Sep - 18 Nov - 18

SALE PRICE $1,075,000 $1,010,000 $1,140,000

PRICE/UNIT $215,000 $168,333 $190,000

CAP RATE 6.10% 4.57% 3.70%

GRM 11.14 14.77 17.49

PRICE/SF $265 $170.84 $463.41

PARKING Yes Yes Yes

UNIT MIX

5 - 2 Bedroom/1 Bath 2 - 1 Bedroom/1 Bath4 - 2 Bedroom/1 Bath

2 - Studio/1 Bath4 - 1 Bedroom/1 Bath

SALES COMPARABLES MAP

TREMONTAPARTMENTS

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2519 LANCASTER AVELos Angeles, CA 90033

549 S MATHEWS STLos Angeles, CA 90006

1039 N CUMMINGS STLos Angeles, CA 90033

627 BRITTANIA STLos Angeles, CA 90033

733 N SOTO STLos Angeles, CA 90033

ICONIC INVESTMENTS

PETER STRAUSSPartner

m: 310-993-7600o: 747-444-3303

[email protected] #01335696

www.iconicinv.com

DANIEL BARILAssociate

m: 213-247-8009o: 747-444-3302

[email protected] #02087856

an 5-unit renovation opportunity delivered with three ...€¦ · services surrounding major...

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