165 GRAMERCY PL165 Gramercy Pl • San Jose, CA 95116
Market Positioning and Pricing Analysis
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165 GRAMERCY PLSan Jose, CAACT ID ZAA0010159
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
Non-EndorsementsMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of anycorporation'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 orsubsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information aboutthis listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
DisclaimerTHIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information hasbeen secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. Referencesto square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus &Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.
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P R E S E N T E D B Y
Adam DahdouhApartment SpecialistPalo Alto OfficeTel: (650) 391-1745Fax: (650) [email protected]: CA 01970098
Carlos AzucenaFirst Vice President InvestmentsDirector - National Multi Housing GroupPalo Alto OfficeTel: (650) 391-1746Fax: (650) [email protected]: CA 01738155
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TABLE OF CONTENTS
SECTION
INVESTMENT OVERVIEW 01Property OverviewProperty PhotosRegional Map
Local Map
Aerial Photo
Parcel Map
MARKET COMPARABLES 02Rent Comparables
Sales Comparables
FINANCIAL ANALYSIS 03Rent Roll Summary
Rent Roll Detail
Operating Statement
Notes
Pricing Detail
Proposal Price
MARKET OVERVIEW 04Market Analysis
Demographic Analysis
165 GRAMERCY PL
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165 GRAMERCY PL
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INVESTMENT
OVERVIEW
PROPERTY OVERVIEW
165 GRAMERCY PL
PROPERTY OVERVIEW
Carlos Azucena and Adam Dahdouh of Marcus & Millichap are pleased to announce the exclusive offering of 165 Gramercy Place in San Jose, California. Built in 1962, the 3,254 square foot building resides on a 6,667 square foot lot in the Alexander neighborhood. The unit mix consists of one, three-bedroom/one-bath and three, two-bedroom/one-bath units.
The building features on-site laundry and reserved covered parking for each unit. Two out of the four units were remodeled within the past year while all units have been remodeled with granite countertops, new plumbing fixtures*, new cabinets, range hoods*, and tile or wood flooring. In the past 3 years the building was upgraded with a new 75-gallon water heater, new main water lines from the street to the building and the exterior has been painted. In the past 5 years the roof was redone and was recently sealed in the month of January. Currently the tenants are being charged an average ~$120 per unit per month in water utility charges. This is included as part of their rent in the rent roll.
New buildings are rarely constructed in East San Jose, and existing buildings have posted exceptional rent growth over the last five years of 29.5%. Vacancy rates in the submarket are currently averaging 3.0%, which is the lowest in all of San Jose.
The subject property is located minutes away from Downtown San Jose and is only half a mile away from Capitol Square shopping center where Target, Marshalls, and Walgreens are anchor tenants. Other large tenants located across the street from Capitol Square are 24 Hour Fitness, Grocery Outlet and Dollar Tree. In addition, the property benefits from easy access to 680 and 101 connecting commuters throughout the region.
PROPERTY OVERVIEW
§ Desirable unit-mix: (3) 2BR/1BA, (1) 3BR/1BA
§ Onsite parking and laundry facility for all units
§ Located 0.5 miles from Capitol Square and 3 miles from Downtown SJ
§ All units have been remodeled, 2 within the last year
§ Easy access to highways 680 & 101
§ Submarket has historically low vacancy measuring at 3.0%
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*on select units
PROPERTY PHOTOS
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UNIT 1 PHOTOS
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UNIT 2 PHOTOS
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UNIT 3 PHOTOS
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UNIT 4 PHOTOS
REGIONAL MAP
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LOCAL MAP
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AERIAL PHOTO
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PARCEL MAP
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MARKET
COMPARABLES
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165 GRAMERCY PL
RENT COMPARABLES MAP
165 GRAMERCY PL(SUBJECT)
248 Pamela Ave
587 Avalani Ave
88 N Jackson Ave
237 N 8th St
Liberia Circle
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7
8
9
11
20
12
14
15
16
17
13
18
10
4
1
2
3
5
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PROPERTY NAME165 GRAMERCY PL
RENT COMPARABLES
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AVERAGE RENT - MULTIFAMILY
$0
$400
$800
$1,200
$1,600
$2,000
$2,400
$2,800
$3,200
$3,600
$4,000
165Gramercy Pl
88 NJackson Ave
237N 8th St
LiberiaCircle
3 Bedroom
$0
$300
$600
$900
$1,200
$1,500
$1,800
$2,100
$2,400
$2,700
$3,000
165Gramercy Pl
248 PamelaAve
587 AvalaniAve
2 Bedroom
Avg. $2,866 Avg. $2,246
PROPERTY NAME
MARKETING TEAM
165 GRAMERCY PL
RENT COMPARABLES
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YEAR BUILT: 1962
rentpropertyname1rentpropertyaddress1
Unit Type Units SF Rent Rent/SF
2 Bed 1 Bath 3 751 $1,711 $2.28
3 Bed 1 Bath 1 1,000 $1,910 $1.91
Total/Avg. 4 813 $1,761 $2.17
165 GRAMERCY PL165 Gramercy Pl, San Jose, CA, 95116
YEAR BUILT: 1960
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NOTES- Remodeled unit- Off street parking
Unit Type Units SF Rent Rent/SF
2 Bdr 1 Bath 1 800 $2,200 $2.75
Total/Avg. 1 800 $2,200 $2.75
248 PAMELA AVE248 Pamela Ave, San Jose, CA, 95116
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YEAR BUILT: 1965NOTES- Remodeled unit- One onsite parking spot
Unit Type Units SF Rent Rent/SF
2 Bdr 1 Bath 1 750 $2,285 $3.05
Total/Avg. 1 750 $2,285 $3.05
587 AVALANI AVE587 Avalani Ave, San Jose, CA, 95133
PROPERTY NAME
MARKETING TEAM
165 GRAMERCY PL
RENT COMPARABLES
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YEAR BUILT: 2006
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Unit Type Units SF Rent Rent/SF
3 Bdr 2 Bath 1 1,200 $3,100 $2.58
Total/Avg. 1 1,200 $3,100 $2.58
NOTES- 2 car garage parking- In-unit laundry- Fully furnished
88 N JACKSON AVE88 N Jackson Ave, San Jose, CA, 95116
YEAR BUILT: 1964
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Unit Type Units SF Rent Rent/SF
3 Bdr 2 Bath 1 975 $2,899 $2.97
Total/Avg. 1 975 $2,899 $2.97
237 N 8TH ST237 N 8th St, San Jose, CA, 95112
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YEAR BUILT: 1977
Unit Type Units SF Rent Rent/SF
3 Bdr 1.5 Bath 1 1,180 $2,600 $2.20
Total/Avg. 1 1,180 $2,600 $2.20
LIBERIA CIRCLELiberia Circle, San Jose, CA, 95116
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SALES COMPARABLES MAP
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165 GRAMERCY PL(SUBJECT)
1651 Virginia Ave
175 Alexander Ave
1398 Tami Lee Dr
1376 Dubert Ln
1095 Appian Ln
SALES COMPARABLES
ON MARKET COMPARABLES
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2
3
4
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PROPERTY NAME165 GRAMERCY PL
SALES COMPARABLES
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SALES COMPARABLES
Avg. $424.37
Avg. $480.17
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
$400.00
$450.00
$500.00
165Gramercy Pl
1651Virginia
Ave
175Alexander
Ave
1398 TamiLee Dr
1376Dubert Ln
1095Appian Ln
Average Price Per Square Foot
Avg. $360,031
Avg. $399,500
$0
$40,000
$80,000
$120,000
$160,000
$200,000
$240,000
$280,000
$320,000
$360,000
$400,000
165Gramercy Pl
1651Virginia
Ave
175Alexander
Ave
1398 TamiLee Dr
1376Dubert Ln
1095Appian Ln
Average Price Per Unit
0.00
1.90
3.80
5.70
7.60
9.50
11.40
13.30
15.20
17.10
19.00
165Gramercy Pl
1651Virginia
Ave
1398 TamiLee Dr
1376Dubert Ln
1095Appian Ln
Average GRM
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
165Gramercy Pl
1651Virginia
Ave
1398 TamiLee Dr
1376Dubert Ln
1095Appian Ln
Average Cap Rate
SALES COMPARABLES
ON MARKET COMPARABLES
SALES COMPS AVG
ON MARKET COMPS AVG
Avg. 4.19% Avg. 16.24
PROPERTY NAME
MARKETING TEAM
165 GRAMERCY PL
SALES COMPARABLES
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SALES COMPARABLES ON MARKET COMPARABLES
Units Unit Type
Offering Price: $1,450,000 3 2 Bed 1 Bath
Price/Unit: $362,500 1 3 Bed 1 Bath
Price/SF: $445.74
CAP Rate: 3.62%
GRM: 17.16
Total No. of Units: 4
Year Built: 1962
Underwriting Criteria
Income $84,681 Expenses $32,195
NOI $52,486 Vacancy ($2,535)
165 GRAMERCY PL165 Gramercy Pl, San Jose, CA, 95116
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Units Unit Type
Close Of Escrow: 2/26/2019 2 3 Bdr 2 Bath
Sales Price: $1,600,000 2 2 Bdr 1 Bath
Price/Unit: $400,000
Price/SF: $414.62
CAP Rate: 4.18%
GRM: 16.26
Total No. of Units: 4
Year Built: 1962
1651 VIRGINIA AVE1651 Virginia Ave, San Jose, CA, 95116
Units Unit Type
Close Of Escrow: 10/10/2018 2 1 Bdr 1 Bath
Sales Price: $1,400,000 1 2 Bdr 1 Bath
Price/Unit: $350,000 1 3 Bdr 1 Bath
Price/SF: $445.15
Total No. of Units: 4
Year Built: 1961
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NOTES
- 3 out of the 4 units were delivered vacant
- Inferior unit mix
175 ALEXANDER AVE175 Alexander Ave, San Jose, CA, 95116
PROPERTY NAME
MARKETING TEAM
165 GRAMERCY PL
SALES COMPARABLES
rentpropertyname1
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SALES COMPARABLES ON MARKET COMPARABLES
Units Unit TypeClose Of Escrow: 3/27/2018 4 2 Bdr 1 Bath
Sales Price: $1,398,000
Price/Unit: $349,500
Price/SF: $428.31
CAP Rate: 4.11%
GRM: 16.24
Total No. of Units: 4
Year Built: 1970
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NOTES- HOA in place- Similar location and neighborhood feel- Inferior unit mix
1398 TAMI LEE DR1398 Tami Lee Dr, San Jose, CA, 95122
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Units Unit TypeClose Of Escrow: 3/19/2019 4 2 Bdr 1 Bath
Sales Price: $1,362,500
Price/Unit: $340,625
Price/SF: $409.41
CAP Rate: 4.17%
GRM: 16.03
Total No. of Units: 4
Year Built: 1962
NOTES- HOA in place
1376 DUBERT LN1376 Dubert Ln, San Jose, CA, 95122
Units Unit TypeOn Market 4 2 Bdr 1 Bath
List Price: $1,598,000
Price/Unit: $399,500
Price/SF: $480.17
CAP Rate: 4.19%
GRM: 16.24
Total No. of Units: 4
Year Built: 1961
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1095 APPIAN LN1095 Appian Ln, San Jose, CA, 95116
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FINANCIAL
ANALYSIS
FINANCIAL ANALYSIS
165 GRAMERCY PL
RENT ROLL SUMMARY
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FINANCIAL ANALYSIS
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RENT ROLL DETAIL
FINANCIAL ANALYSIS
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OPERATING STATEMENT
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FINANCIAL ANALYSIS
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NOTES
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FINANCIAL ANALYSIS
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PRICING DETAIL
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MARKET
OVERVIEW
MARKET OVERVIEW
SAN JOSEOVERVIEW
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Known to the world as Silicon Valley, the San Jose metro is located atthe southern end of the San Francisco Bay and encompasses SantaClara and San Benito counties. A large portion of the area’s 1,315square miles is unincorporated ranch and farmland.
The metro contains roughly 2 million inhabitants in 15 cities. More thanhalf of the region’s residents reside in the city of San Jose. It is themetro’s largest city with more than 1 million residents, followed bySunnyvale and Santa Clara. Venture capital funds received in the1990s helped to turn the area into the world’s most prominenttechnology hub, a distinction that remains today.
MARKET OVERVIEW
METRO HIGHLIGHTS
PREMIER HIGH-TECH CENTERSilicon Valley’s dense concentration of high-tech jobs is world renowned, attracting a variety of large employers and startups.
HIGH INCOMESWell-paying jobs in the tech sector contribute to a median annual household income level that is almost double the U.S. median.
HIGHLY EDUCATED WORKFORCENearly half of all residents age 25 and older have obtained at least a bachelor’s degree, well above the U.S. average.
165 GRAMERCY PL
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 Alphabet.§ 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 2018 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
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MANUFACTURING15%
GOVERNMENT
HEALTH SERVICESEDUCATION AND
+OTHER SERVICES
2%
LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES
12%AND UTILITIES
TRADE, TRANSPORTATION CONSTRUCTION
PROFESSIONAL ANDBUSINESS SERVICES
8%INFORMATION
21%
4%
9% 9% 3%
16%
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MARKET OVERVIEW
DEMOGRAPHICS
SPORTS
EDUCATION
ARTS & ENTERTAINMENT
§ The metro is expected to add approximately 44,000 people through 2023 and during this time more than 25,000 households will be formed.
§ High home prices contribute to a homeownership rate of 56 percent, which is below the national rate of 64 percent.
§ Nearly 48 percent of residents age 25 and older hold a bachelor’s degree, including 21 percent who have also obtained a graduate or professional degree.
The San Jose metro has an enviable combination of major universities that produce ahighly educated workforce, cutting-edge firms and exceptional affluence. Residents canvisit a plethora of museums, including the San Jose Museum of Art and the Tech Museumof Innovation. Santa Clara County is home to performing arts companies and hosts the SanJose Jazz Festival. The San Francisco 49ers play their home games at Levi’s Stadium andthe San Jose Sharks hockey team plays at the SAP Center. Other sports venues includethe San Jose Municipal Stadium and Buck Shaw Stadium. The metro is minutes away fromSan Francisco and some of the world’s finest wine-producing regions, notably the Napa,Sonoma and Alexander valleys.
QUALITY OF LIFE
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* Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau
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2018 Population by Age
0-4 YEARS
6%5-19 YEARS
19%20-24 YEARS
6%25-44 YEARS
30%45-64 YEARS
26%65+ YEARS
13%
37.02018
MEDIAN AGE:
U.S. Median:38.0
$111,8002018 MEDIAN
HOUSEHOLD INCOME:
U.S. Median:$58,800
2M2018
POPULATION:
Growth2018-2023*:
2.2%
685K2018
HOUSEHOLDS:
3.6%
Growth2018-2023*:
PROPERTY NAME
MARKETING TEAM
165 GRAMERCY PL
DEMOGRAPHICS
Source: © 2018 Experian
Created on March 2019
POPULATION 1 Miles 3 Miles 5 Miles
§ 2023 Projection
Total Population 45,957 281,944 533,423
§ 2018 Estimate
Total Population 46,001 280,410 523,748
§ 2010 Census
Total Population 41,780 259,129 480,522
§ 2000 Census
Total Population 41,816 259,710 469,356
§ Daytime Population
2018 Estimate 35,092 198,030 510,664
HOUSEHOLDS 1 Miles 3 Miles 5 Miles
§ 2023 Projection
Total Households 12,880 75,896 157,469
§ 2018 Estimate
Total Households 12,322 73,485 150,291
Average (Mean) Household Size 3.55 3.59 3.31
§ 2010 Census
Total Households 11,224 67,901 136,233
§ 2000 Census
Total Households 10,245 64,871 124,408
Growth 2015-2020 4.53% 3.28% 4.78%
HOUSING UNITS 1 Miles 3 Miles 5 Miles
§ Occupied Units
2023 Projection 12,880 75,896 157,469
2018 Estimate 12,462 73,816 152,029
Owner Occupied 4,913 39,560 80,553
Renter Occupied 7,409 33,925 69,738
Vacant 140 330 1,738
§ Persons In Units
2018 Estimate Total Occupied Units 12,322 73,485 150,291
1 Person Units 17.88% 16.68% 20.05%
2 Person Units 20.65% 21.61% 23.45%
3 Person Units 16.37% 16.51% 16.70%
4 Person Units 16.28% 16.35% 15.82%
5 Person Units 11.68% 10.95% 9.81%
6+ Person Units 17.14% 17.90% 14.16%
HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles
§ 2018 Estimate
$200,000 or More 4.88% 10.41% 12.19%
$150,000 - $199,000 7.14% 10.23% 11.72%
$100,000 - $149,000 15.77% 19.35% 19.88%
$75,000 - $99,999 12.62% 12.48% 11.52%
$50,000 - $74,999 15.92% 14.06% 13.70%
$35,000 - $49,999 10.39% 9.86% 9.22%
$25,000 - $34,999 8.25% 6.86% 6.35%
$15,000 - $24,999 11.87% 7.67% 6.86%
Under $15,000 13.16% 9.08% 8.55%
Average Household Income $82,316 $110,039 $119,354
Median Household Income $59,216 $79,771 $86,210
Per Capita Income $22,272 $29,213 $34,634
POPULATION PROFILE 1 Miles 3 Miles 5 Miles
§ Population By Age
2018 Estimate Total Population 46,001 280,410 523,748
Under 20 26.91% 26.58% 25.27%
20 to 34 Years 24.62% 25.81% 25.72%
35 to 39 Years 7.40% 7.40% 7.60%
40 to 49 Years 12.64% 13.18% 13.64%
50 to 64 Years 15.88% 16.40% 17.19%
Age 65+ 12.53% 10.65% 10.56%
Median Age 34.05 33.50 34.39
§ Population 25+ by Education Level
2018 Estimate Population Age 25+ 30,341 182,885 351,090
Elementary (0-8) 14.35% 13.00% 10.43%
Some High School (9-11) 11.37% 10.65% 9.71%
High School Graduate (12) 25.26% 22.89% 21.02%
Some College (13-15) 17.38% 16.14% 16.72%
Associate Degree Only 7.01% 7.07% 7.25%
Bachelors Degree Only 15.03% 17.22% 20.27%
Graduate Degree 3.91% 8.17% 10.22%
§ Population by Gender
2018 Estimate Total Population 46,001 280,410 523,748
Male Population 50.00% 51.50% 51.54%
Female Population 50.00% 48.50% 48.46%
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IncomeIn 2018, the median household income for your selected geography is$59,216, compare this to the US average which is currently $58,754.The median household income for your area has changed by 16.56%since 2000. It is estimated that the median household income in yourarea will be $68,482 five years from now, which represents a changeof 15.65% from the current year.
The current year per capita income in your area is $22,272, comparethis to the US average, which is $32,356. The current year averagehousehold income in your area is $82,316, compare this to the USaverage which is $84,609.
PopulationIn 2018, the population in your selected geography is 46,001. Thepopulation has changed by 10.01% since 2000. It is estimated that thepopulation in your area will be 45,957.00 five years from now, whichrepresents a change of -0.10% from the current year. The currentpopulation is 50.00% male and 50.00% female. The median age of thepopulation in your area is 34.05, compare this to the US averagewhich is 37.95. The population density in your area is 14,629.55people per square mile.
HouseholdsThere are currently 12,322 households in your selected geography.The number of households has changed by 20.27% since 2000. It isestimated that the number of households in your area will be 12,880five years from now, which represents a change of 4.53% from thecurrent year. The average household size in your area is 3.55persons.
EmploymentIn 2018, there are 7,275 employees in your selected area, this is alsoknown as the daytime population. The 2000 Census revealed that43.46% of employees are employed in white-collar occupations in thisgeography, and 57.29% are employed in blue-collar occupations. In2018, unemployment in this area is 4.41%. In 2000, the average timetraveled to work was 29.00 minutes.
Race and EthnicityThe current year racial makeup of your selected area is as follows:24.77% White, 2.49% Black, 0.43% Native American and 40.76%Asian/Pacific Islander. Compare these to US averages which are:70.20% White, 12.89% Black, 0.19% Native American and 5.59%Asian/Pacific Islander. People of Hispanic origin are countedindependently of race.
People of Hispanic origin make up 50.05% of the current yearpopulation in your selected area. Compare this to the US average of18.01%.
PROPERTY NAME
MARKETING TEAM
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HousingThe median housing value in your area was $466,306 in 2018,compare this to the US average of $201,842. In 2000, there were4,820 owner occupied housing units in your area and there were 5,425renter occupied housing units in your area. The median rent at thetime was $893.
Source: © 2018 Experian
DEMOGRAPHICS
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DEMOGRAPHICS
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www.MarcusMillichap.com
Adam DahdouhApartment SpecialistPalo Alto OfficeTel: (650) 391-1745Fax: (650) [email protected]: CA 01970098
Carlos AzucenaFirst Vice President InvestmentsDirector - National Multi Housing GroupPalo Alto OfficeTel: (650) 391-1746Fax: (650) [email protected]: CA 01738155
P R E S E N T E D B Y
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