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OFFERING MEMORANDUM

Oak Street Apartments10 Unit Apartment Complex

436 W. Oak StreetStockton, California 95203

INVESTMENT CONTACTS:

Colton Toste

Associate

+1 209 752 0296

[email protected]

BRE#01993261

Ruben Sandoval

Vice President

+1 209 918 1536

[email protected]

BRE#01806675

Confidentiality & Disclaimer

Section 1

This Confidential Offering Memorandum (the “Memorandum”) has been prepared and

presented to the recipient (the “Recipient”) by NAI Benchmark First Commercial (NAI

“Benchmark”) as part of NAI Benchmark’s efforts to market for sale the real property

located at 436 W. Oak Street, Stockton, CA, (“The Property”). NAI Benchmark is the exclusive

agent and broker for the owner(s) of the Property (the “Owner”). NAI Benchmark is

providing this Memorandum and the material contained in it to the Recipient solely to assist

the Recipient in determining whether the Recipient is interested in potentially purchasing all

or part of the Property. NAI Benchmark also is providing this Memorandum and the material

in it to the Recipient with the understanding that the Recipient will independently investigate

those matters that it deems necessary and appropriate to evaluate the Property and that the

Recipient will rely only on its own investigation, and not NAI Benchmark, the Owner or this

Memorandum, in determining whether to purchase the Property. The Recipient’s use of this

Memorandum, in determining whether to purchase the Property. The Recipient’s use of this

Memorandum and the material in it is strictly governed by the terms and conditions of the

Registration and Confidentiality Agreement that the Recipient previously executed and

delivered to NAI Benchmark.

PLEASE NOTE THE FOLLOWING:

NAI Benchmark, the owner and their respective agents, employees, representatives, property

managers, officers, directors, shareholders, members, managers, partners, join ventures,

corporate parents or controlling entities, subsidiaries, affiliates, assigns and predecessors and

successors-in-interest make no representations or warranties abut the accuracy,

correctness or completeness of the information contained in this Memorandum. The

Recipient is urged not to rely on the information contained in this Memorandum and to make

an independent investigation of all matters relating to the Property.

This Memorandum includes statements and estimates provided by or to NAI Benchmark

and/or the Owner regarding the Property. Those statements and estimates may or may not

be accurate, correct or complete. Nothing contained in this Memorandum should be construed

as a representation or warranty about the accuracy, correctness or completeness of such

statements and estimates. Further, nothing contained in this Memorandum should be

construed as a representation or warranty about the accuracy, correctness or complete-

ness of such statements and estimates. Further, nothing in this Memorandum should be

construed as representation or warranty about any aspect of the Property, including, without

limitation, the Property’s (1) past, current or future performance, income, uses or

occupancy, (2) past, current or prospective tenants, (3) physical condition, (4) compliance,

or (5) appropriateness for any particular purpose, investment, use or occupancy. Again, the

Recipient is urged not to rely on this Memorandum and the statements and estimates in it and

to make an independent investigation regarding the Property and the statements and

estimates contained herein.

This Memorandum may include statements regarding, references to, or summaries of, the

nature, scope or content of contracts and/or other documents relating to the Property.

Those statements, references or summaries may or may not be accurate, correct or

complete. Additionally, NAI Benchmark may not have referenced or included summaries of

each and every contract and/or other document that the Recipient might determine is

relevant to its evaluation of the Property. Nothing contained in this Memorandum should be

construed as a representation or warranty about the accuracy, correctness or completeness

of such statements, representations or summaries. On request and as available, and subject

to the Owner’s consent, NAI Benchmark will provide the Recipient with copies of all

referenced contracts and other documents. NAI Benchmark assumes no obligation to

supplement or modify the information contained in this Memorandum to reflect events or

conditions occurring on or after the date of its preparation of this Memorandum.

This Memorandum does not constitute an offer to sell, or a solicitation of an offer to buy, an

interest in the Property. Nothing contained in this Memorandum may be construed to

constitute legal or tax advice to a Recipient concerning the Property.

More detailed information regarding the anticipated terms, conditions and timing of any

offering by the Owner relating to the Property will be provided in due course by separate

communication. NAI Benchmark and/or the Owner reserve the right to engage at any time in

discussions or negotiations with one or more recipients of this Memorandum and/or other

prospective purchasers of the Property without notice or other obligation to the Recipient.

The Owner reserves the right to change the terms of any offering relating to the Property or

to terminate without notice that offering. The Owner also reserves the right to operate the

Property in its sole and absolute discretion prior to the completion of any sale of the Property.

NAI Benchmark reserves the right to return of this Memorandum and the material in it and

any other material provided by NAI Benchmark to the Recipient at any time. Acceptance of

this Memorandum by the Recipient constitutes acceptance of the terms and conditions

outlined above.

436 W. Oak St, Stockton, CA • 10-Unit Apartment Complex

PROPERTY SUMMARY

Property Overview

Section 1

TOTAL ASKING PRICE $750,000

SQUARE FOOTAGE 5,760

TOTAL UNITS 10

PRICE PER UNIT $75,000

CURRENT CAP RATE 5.39%

CURRENT GRM 10.03

PRICE PER SF $130.21

FINANCIAL SUMMARY

Please do not visit property without

an appointment.3

Colton Toste

Associate

+1 209 752 0296

[email protected]

BRE#01993261

Ruben Sandoval

Vice President

+1 209 918 1536

[email protected]

BRE#01806675

436 W. Oak Street, Stockton, CA • 10-Unit Apartment Complex

SITE

PROFORMA CAP RATE 7.53%

Stockton Ports

Delta

Stockton Arena

Property Overview

INVESTMENT HIGHLIGHTS

• Strong upside potential in rents

• Quiet Neighborhood

• Low maintenance landscaping

• All units are separately metered for utilities

• Convenient access to restaurants, shops, and public

transit.

• Close proximity to I-5 and crosstown highway.

Perfect for commuters.

PROPERTY DESCRIPTION

NAI Benchmark First Commercial is pleased to offer a unique

sale of the Oak Street Apartments in Downtown Stockton, a

well-maintained, 10-Unit Apartment Complex with upside

potential. The property is two stories and consists of 8 (1)

bedroom units and 2 (2) bedroom units.

The property has experienced historically strong occupancy

and is located in a quiet neighborhood. Multi family

properties in the immediate area have benefitted from

landlord’s increasing capital expenditure. The property has

two coin-operated laundry rooms on-site


Property Overview

Section 1

ADDRESS 436 W. Oak Street, Stockton, CA

COUNTY San Joaquin County

APN #

YEAR BUILT 1970

RENTABLE SF 5760

LAND AREA (ACRES) 0.1722

LAND AREA (SF) 7,500

TOTAL UNITS 10

STORIES 2

CONSTRUCTION TYPE WoodFrame

SIDING MATERIAL

FOUNDATION Cement Slab

ROOF TYPE Flat

HVAC Wall-mounted Units

LAUNDRY Facility on Site

PROPERTY SUMMARY

Stucco/Brick

BUILDINGS 1


137-216-02

FINANCIAL ANALYSIS

Financial Overview

Estimated Income

Scheduled Base Rent $74,760

Laundry Income ($50/month) $600

Less: Vacancy Factor 3.0% $2,242

Scheduled Gross Income$73,117.20

Estimated Operating Expenses

New Property Taxes (1.2717%) $9,537.75

Direct Assessments $129.23

Insurance $3,000

Water ($210 per month) $2,520

Garbage ($170 per month) $2,040

Sewer ($340 per month) $4,080

PG&E House Meter ($20 per month) $240

Repairs and Maintenance ($400 per unit) $4,800

Landscaping ($75 per month) $900

Off Site Management (6% of EGI) $4,387

Pest Control ($90 per month) $1,080

Estimated Total Expenses $32,714.01

45%

Estimated Net Operating Income $40,403.19

INCOME / OPERATING EXPENSES ACTUAL RENT ROLL / MARKET RENTS

UNITSUNIT

TYPEAPPROX SQ FT

MONTHLY

RENT/UNITMARKET RENTS

A 1BD/1BA 545 $590** $750

B 2BD/1BA 700 $665 $850

C 1BD/1BA 545 $600 $750

D 1BD/1BA 545 $625 $750

E 2BD/1BA 545 $650 $750

F 1BD/1BA 545 $575** $750

G 1BD/1BA 545 $575** $750

H 1BD/1BA 545 $625 $750

I 1BD/1BA 545 $600 $750

J 2BD/1BA 700 $725* $850

Rent Total $6,230 $7,700

• A recent rent survey shows that in place rents are below market. The next investor can increase

rents without capital expenditure to $750 each unit for comparable 1 bedroom/1bathroom

apartments and $850 for comparable 2 bedroom/ 1 bathroom apartments.

• Increasing to market rents would bring CAP Rate to 7.537% and GRM to 8.11 on current asking

price.

Asking Price $750,000

Current

CAP Rate5.39%

Price Per Unit $75,000

GRM 10.03

ACTUAL

Asking Price $750,000

Proforma

CAP Rate7.53%

Price Per Unit $75,000

GRM 8.11

PROFORMA

*Unit J is currently being turned and will be rented at $725.** Rental amount is reflecting the $50 increase that will take affect on January 2018.

2

1126 E. Vine St, Stockton, CA

RENT COMPARABLES

419 Flora Street, Stockton, CA

324 Magnolia St. Stockton

Asking Rent $900

Unit Type 1 BD/1 BA

Asking Rent $750

Unit Type 1 BD/1 BA

4

1611 N. El Dorado St, Stockton, CA

1030 N. San Joaquin Street, Stockton, CA 95202 • 10 Unit Apartment Complex

Rent Comparables


Asking Rent $ 925

Unit Type 1 BD/1 BA

Asking Rent $1,895

Unit Type 2 BD/1 BA

5 6

324 Magnolia St , Stockton, CAAsking Rent $ 1,095

Unit Type 2 BD/1 BAAsking Rent $ 1,020

Unit Type 2 BD/1 BA

3416 Pacific Ave, Stockton, CA

1

3

1030 N. San Joaquin Street, Stockton, CA 95202 • 10 Unit Apartment Complex

RENT COMPARABLES

1

Comparable Graph

$-

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

$700.00

$800.00

$900.00

$1,000.00

Subject 1 2 3

Asking Rent (1 Bedroom)


$-

$200.00

$400.00

$600.00

$800.00

$1,000.00

$1,200.00

Subject 4 5 6

Asking Rent (2 Bedroom)

LOCATION OVERVIEW

Market Overview

Downtown StocktonHistorically, Downtown Stockton began with a mix of thriving commercial ventures and colorful characters. Today,Downtown Stockton is a vibrant waterfront community with endless opportunities and amenities. The Downtown iscaptivated with world-class art and entertainment, renovated historical buildings, museums, theaters, restaurants andattractions.

Stockton Ball ParkThe Stockton Ball Park is home to the Stockton Ports, a minor league baseball team that is an affiliate of the OaklandAthletics. The ballpark features 5,200 fixed seats in addition to other seating facilities and amenities.

The WaterfrontWith the remarkable transformation of Stockton’s Downtown Waterfront Community, this historic area boasts the deepwater Stockton Channel, a thriving port that transports goods from the heart of Stockton to the Pacific Ocean. BeautifulResidential communities, hotels and resorts line the river banks.

San Joaquin County is located in the Central Valley of California, just east of the San Francisco Bay Area. As of the 2010census, the population was 685,306. The county seat is Stockton. The Central Valley is on e of the world’s mostproductive agricultural regions. More than 230 crops are grown there. On less than 1 percent of the total farmland in theUnited State, the Central Valley produces 8 percent of the nation’s agricultural output by value: 17 billion USD in 2002. Itsagricultural productivity relies on irrigation from both surface water diversions and groundwater pumping from wells. Abouton-sixth of the irrigated land in the U.S. is in the Central Valley.

Virtually all non-tropical crops are grown in the Central Valley, which is the primary source for a number of foodproducts throughout the United States, including tomatoes, almonds, grapes, cotton, apricots, and asparagus. There are6,000 almond growers that produce more than 600 million pounds a year, about 70 percent of the world’s supply.

Early farming was concentrated close to the Sacramento-San Joaquin Delta, where the water table was high year round andwater transport more readily available, but subsequent irrigation projects have brought many more parts of the valley intoproductive use. For example, the Central Valley Project was formed in 1935 to redistribute and store water for agriculturaland municipal purposes with dams and canals. The even larger California State Water Project was formed in the 1950s andconstruction continued throughout the following decade.

The City of Stockton

San Joaquin County, California

1 hR 48 MIN105 MILES

Location Overview

The Bay Area

Even though Stockton is not technically considered part of the

Bay Area, many of its residents commute to the Bay Area for

jobs and therefore is directly influenced by the Bay Area’s

economic health.

The San Francisco Bay Area, commonly known as the Bay

Area, is a metropolitan region that encompasses metropolitan

areas such as San Francisco-Oakland (12th largest in the

country). San Jose (31st largest in the country), and smaller

urban and rural areas. The United States Census Bureau

defines the Bay Area as a Combined Statistical Area (CSA)

with approximately 7.4 million people, including the nine

counties bordering San Francisco Bay (Alameda, Contra

Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara,

Solano, and Sonoma) as well as Santa Cruz and San Benito

Counties, making it the fifth largest CSA in the United States.

The combined urban area of San Jose and San Francisco is

the 43rd largest urban area in the world.

The Bay Area is anchored by three major cities. San Francisco

is the cultural and financial center of the metropolitan area

and Northern California in general. It is the second-most

densely populated major city (population greater than

200,000) in the United States. The largest city in the Bay Area

in terms of both land and population is San Jose, which is

located in the South Bay and is part of the world renowned

technology hub known as Silicon Valley. Oakland, the third

most populous city, is a central hub for the East Bay, is a

major industrial center, and contains the Port of Oakland, the

fifth busiest container port in the United States. The region’s

northern counties encompass California’s famous Wine

Country, home to hundreds of vineyards and wineries while

the region’s Pacific Ocean coastline hosts numerous beaches.

The San Francisco Bay Area has the 2nd most Fortune 500

Companies in the United States, and is known for its natural

beauty, liberal politics, entrepreneurship, and diversity. With

excellent colleges in proximity, the area ranks second in

highest density of college graduates, and performs above the

state median household income in the 2010 census. Based on

a 2013 population report from the California Department of

Finance, the Bay Area is the only region in California where

the rate of people migrating in from other areas in the United

States is greater than the rate of those leaving the region.

Additionally, In 2011, the San Francisco Bay Area had a GDP of

$535 billion, which would rank 19th among countries.

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