offering memorandum 544 e 15th street - matthews€¦ · 544 e 15th street offering memorandum ......

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O F F E R I N G M E M O R A N D U M

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E X C L U S I V E LY P R E S E N T E D B Y

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Direct +1.310.955.5836 Mobile +1.415.307.9482 [email protected] License No. 01996391

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P R O P E R T Y O V E R V I E W544 E 15th Street presents an opportunity for a purchaser to follow the lead of the long-term ownership and capture future rent upside with a classic Spanish-style building, in the Poly High neighborhood of Long Beach.

In the last few years, a reposition strategy has been implemented based on unit improvements and curb appeal enhancements.

As these upgrades can result in a tremendous increase in potential income, a new investor should follow this same strategy to continue adding value, raise revenue and improve operating efficiency.


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32%RENT UPSIDE

8UNITS

5GARAGE SPACES

PROPERTY DESCRIPTION

*Buyer to verify unit mix and square footage

• 8 Units

• Built In 1929

• 6,613 Gross Square Feet

• Three 2 Bedroom + 1 Bathroom Units, Five 1 Bedroom + 1 Bathroom Units

• Five Garage Spaces

• 32% Rent Upside Potential

• Average Unit Size of 827 Sq Ft Each

• Individually Metered for Electricity & Gas

• 0.14 Acre Lot

• LBR2N Zoning

6P R O P E R T Y O V E R V I E WA R E A O V E R V I E W

LONG BEACH, CALIFORNIALong Beach is the second largest city in the Los Angeles metropolitan area, and the third largest in Southern California behind Los Angeles and San Diego. With a location along the southern coast of Los Angeles county, it is one of the most active maritime cities in the United States.

The “Aquatic Capital of America” features the Port of Long Beach, one of the world’s largest shipping ports. With trade valued over $180 billion annually, it serves as a foundation for over 30,000 jobs in Long Beach, 316,000 in Southern California, and 1.4 million throughout the nation. The city is also home to California State University, Long Beach, which serves nearly 40,000 students and 3,000 employees. Local attractions include the Queen Mary, Long Beach Museum of Art, the Bob Cole Conservatory as well as the world-renowned Aquarium of the Pacific.


ECONOMY

LONG BEACH POLYTECHNIC HIGH

Long Beach is a vibrant urban center with miles of beautiful beaches and all of the major amenities of a major city. As a growing commercial, cultural, and tourism center, the population is expected to grow with over 5,000 residential units planned or under construction. Downtown Long Beach has become one of Southern California’s prime real estate markets.

Long Beach is the nation’s primary gateway for international trade. The combined ports of Long Beach and Los Angeles are the fifth-busiest in the world, receiving over forty percent of goods entering the United States do so via the ports.

Established in 1895, Long Beach Polytechnic High is the flagship high school of the Long Beach Unified School District. Located adjacent to 544 E 15th Street, “Poly” serves over 5,000 students from the greater Long Beach area, with 95% of students graduating with a post-high school destination; it also employs over 350 teachers, administrators and staff. Featured in numerous films, TV shows, commercials and music videos, Poly is also well-known for their music and athletic programs.

P O R T O F L O N G B E A C H

P I E R O F L O N G B E A C H

TOP EMPLOYERS


POPULATION AT A GLANCE

DEMOGRAPHICSPOPULATION 1-MILE 3-MILE 5-MILE

2000 Census 84,565 269,099 460,644

2010 Census 82,758 266,318 463,023

2017 Estimate 86,561 277,418 481,728

2022 Projection 89,592 287,269 498,777

POPULATION GROWTH 1-MILE 3-MILE 5-MILE

% Change: 2000 to 2010 -2.14 -1.03 0.52

% Change: 2010 to 2017 4.59 4.17 4.04

% Change: 2017 to 2022 3.50 3.55 3.54

HOUSEHOULDS 1-MILE 3-MILE 5-MILE

2010 Census 23,815 96,265 163,017

2000 Census 23,195 94,870 161,545

2017 Estimate 25,132 100,944 170,026

2022 Projection 26,143 104,979 176,433

INCOME 1-MILE 3-MILE 5-MILE

2017 Avg. Household Income

$47,969 $69,266 $79,779

474,172POPULATION

$54,971MEDIAN

HOUSEHOLD INCOME

4.5% UNEMPLOYMENT

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Two sleek new residential developments have been approved in Downtown Long Beach; one at E Ocean Blvd, and one at Seaside Way. This will bring a total of 207 apartments to the area. Both projects are planned to have rooftop decks for residents and amenities including a lounge and fitness centers. The project will also include some mixed-use space that could include a café or retail establishments.

The Seaside building will be fronted by a remarkable new pedestrian bridge. This bridge will proceed a direct link between the convention center and the Long Beach Performing Arts Center. Construction on both projects is expected to be complete by early 2018.

RESIDENTIAL PROJECTS IN DOWNTOWN LONG BEACH:

CAL STATE LONG BEACHCalifornia State University, Long Beach - also known as Long Beach State - is the third-largest campus of the 23-school California State University system, and one of the largest universities in the state of California by enrollment. Long Beach State is one of the West Coast’s top universities in terms of student body racial diversity, and is also home to the largest publicly funded art school west of the Mississippi. Cal State Long Beach is a huge economic engine for the Los Angeles region and generates a total impact of $1 billion on the regional and statewide economy. The University sustains more than 9,300 jobs in the region and statewide more than 9,500 jobs.

Situated on a 5-acre site, the Aquarium of the Pacific is home to over 11,000 animals including a shark lagoon, a lorikeet forest, penguins and sea lions. Visited by over 1.5 million people per year, the diverse marine center offers shows, petting areas, dining, and more.

The RMS Queen Mary is a retired ocean liner that sailed primarily through the North Atlantic between 1936 and 1967. The ship started out as a British express service and was later used as a troopship during World War II, ferrying allied soldiers throughout the war. Today, the ship serves as a tourist attraction permanently moored in the port of Long Beach and is a museum that offers restaurants, hotel rooms, events, and even haunted tours.

Located in downtown Long Beach, The Pike Outlets is a vibrant dining and entertainment district linking the Long Beach Convention Center to Rainbow Harbor’s waterfront and the Aquarium of the Pacific. The tourist oriented development has a large number of restaurants, a movie theater, artwork, beach attractions, arcades, and even a large Ferris wheel.

Shoreline Village is an entertainment center located in Rainbow Harbor full of specialty shops, great food, and fun activities amid scenic harbor views. Styled after a quaint Cape Cod fishing village, Shoreline Village is a family friendly destination by day the develops a sense of romance when night falls. This popular waterfront boardwalk, also features two carousels, live entertainment, beautiful views of the city, and dynamite sunsets. Shoreline Village is conveniently located within walking distance of the world-class Aquarium of the Pacific, across the harbor from the Queen Mary.

AQUARIUM OF THE PACIFIC

THE QUEEN MARY

THE PIKE

SHORELINE VILLAGE


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Alamitos Beach – 1.8 MilesLong Beach Museum of Art – 2.6 MilesShoreline Village – 2.5 MilesLong Beach Convention Center – 1.7 MilesDowntown Long Beach – 1.5 MilesThe Pike Outlets – 2.3 Miles

The Queen Mary – 3.6 MilesCal State Long Beach – 4.1 MilesBallast Point Brewing Company – 6.5 MilesLong Beach Polytechnic High – 0.1 MilesRoosevelt Elementary School – 0.1 Miles

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UNIT MIX

Total Units Unit Mix Unit Mix % Current Avg Rent Current Monthly Rent Market Rent Market Monthly Rent5 1+1 62% $904 $4,520 $1,250 $6,2503 2+1 38% $1,200 $3,600 $1,500 $4,500

Scheduled Monthly Rent: $8,120 $10,750Scheduled Yearly Rent: $97,440 $129,000

INVESTMENT SUMMARY

Offering Price: $1,650,000 Number of Units: 8Property: 544 E 15th Street Year Built: 1929

Long Beach, CA 90813 APN: 7269-031-011Price Per Unit: $206,250 Gross Sq. Ft.: 6,613Price Per S.F.: $249.51 Average S.F. Per Unit: 827Cap (current / market): 4.01% / 5.86% Lot Size (Acres): 0.14GRM (current / market): 16.19 / 12.36 Zoning: LBR2N


F I N A N C I A L O V E R V I E W

F I N A N C I A L O V E R V I E W - C O N T I N U E D

ANNUALIZED OPERATING DATA

Current MarketScheduled Gross Income: $97,440 32% Upside $129,000

Less Vacancy Reserve: 3.0% $2,923 3.0% $3,870

Parking Income: $4,500 $4,500

Gross Operating Income: $99,017 $129,630Expenses: 33.7% $32,877 25.5% $32,877Net Operating Income: $66,140 $96,753Loan Payments: $0 $0Pre-Tax Cash Flow: 4.0% $66,140 5.9% $96,753Plus Principal Reduction: $0 $0Total Return Before Taxes: 4.0% $66,140 5.9% $96,753

* As a percent of Scheduled Gross Income

** As a percent of Down Payment

Parking Income is based on 5 Garages at $75/spot

PRO FORMA ANNUAL OPERATING EXPENSES

Current Per Unit % of SGI*Taxes 1.125% x Sale Price $18,563 $2,320 19.1%*Insurance $0.35 x GSF $2,315 $289 2.4%Repairs & Maintenance $500 x Units $4,000 $500 4.1%Utilities $500 x Units $4,000 $500 4.1%Contract Services $500 x Units $4,000 $500 4.1%

Total Expenses $32,877 $4,110 33.7%

Current Per Unit % of SGINon-controllable expenses: Taxes, Ins., Reserves: $20,877 $2,610 21.4%Total Expense with out Taxes $14,315 $1,789 14.7%

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RENT ROLL

# Unit Mix Rent Market Rent

1 A 2+1 $1,300 $1,500

2 B 2+1 $1,100 $1,500

3 C 1+1 $910 $1,250

4 D 1+1 $880 $1,250

5 E 1+1 $910 $1,250

6 F 1+1 $910 $1,250

7 G 1+1 $910 $1,250

8 H 2+1 $1,200 $1,500

Totals $8,120 $10,750

Averages $1,015 $1,344


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R E N T C O M P A R A B L E S

ADDRESS ASKING RENT AVG SF YEAR

1 BEDROOM 1 BATHROOM

544 E 15TH STREET, LONG BEACH, CA 90813 $910 827 1929

1371 Lewis Avenue, Long Beach, CA 90813 $1,350 780 1913

1374 Martin Luther King Jr. Ave, Long Beach, CA 90813 $1,250 779 1913

730 E Esther Street, Long Beach, CA 90813 $1,300 818 1976

442 E 16th Street, Long Beach, CA 90813 $1,125 936 1913

AVERAGE $1,257

2 BEDROOM 1 BATHROOM

544 E 15TH STREET, LONG BEACH, CA 90813 $1,150 827 1929

1410 Lemon Avenue, Long Beach, CA 90813 $1,595 827 1924

1386-88 Martin Luther King Jr. Ave, Long Beach, CA 90813 $1,695 660 1959

1338 Linden Avenue, Long Beach, CA 90813 $1,400 797 1962

1589-1595 Linden Avenue, Long Beach, CA 90813 $1,400 936 1913

AVERAGE $1,523

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offering memorandum 544 e 15th street - matthews€¦ · 544 e 15th street offering memorandum ......

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