market positioning and pricing analysis€¦ · property overview carlos azucena and adam dahdouh...

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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165 GRAMERCY PL

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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

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


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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


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


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

rentpropertyname1


rentpropertyname1


rentpropertyname1


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YEAR BUILT: 2006

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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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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


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

rentpropertyname1


rentpropertyname1


rentpropertyname1


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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


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


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


rentpropertyname1


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/SF: $428.31

CAP Rate: 4.11%

GRM: 16.24


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/SF: $409.41

CAP Rate: 4.17%

GRM: 16.03


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/SF: $480.17

CAP Rate: 4.19%

GRM: 16.24


Year Built: 1961

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1095 APPIAN LN1095 Appian Ln, San Jose, CA, 95116

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FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS

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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.

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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%

165 GRAMERCY PL

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

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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


§ 2010 Census


§ 2000 Census


§ 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


Average (Mean) Household Size 3.55 3.59 3.31

§ 2010 Census


§ 2000 Census


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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market positioning and pricing analysis€¦ · property overview carlos azucena and adam dahdouh...

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