hamilton · 2020-03-04 · distinguished wood facade. resting on over a 7,000 sf lot, there is...

4078H A M I L T O N S

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OFFERING MEMORANDUM

N O N - E N D O R S E M E N T & D I S C L A I M E R N O T I C E

C O N F I D E N T I A L I T Y & D I S C L A I M E RThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving

it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing

Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in

the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any

investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial

performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or

asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects

of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been

obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor

has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or

completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap

is a service mark of Marcus & Millichap Real Estate Investment Services, Inc.

© 2018 Marcus & Millichap. All rights reserved.

N O N - E N D O R S E M E N T N O T I C EMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of

any corporation'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 or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant

lessee information about this listing to prospective customers. Activity ID: ZAA0090720

A L L P R O P E R T Y S H O W I N G S A R E B Y A P P O I N T M E N T O N LY .P L E A S E C O N S U LT Y O U R M A R C U S & M I L L I C H A P A G E N T F O R M O R E D E T A I L S .

OFFICES THROUGHOUT THE U.S. AND CANADAwww.marcusmillichap.com

CARSON TRUJILLOSenior Associate

San DiegoDirect: (858)373-3285

[email protected]: CA 01974818

E X C L U S I V E L Y L I S T E D B Y

04 S A L E S C O M P A R A B L E S / / 2 0

05 R E N T C O M P A R A B L E S / / 2 6

06 M A R K E T O V E R V I E W / / 3 0

01 E X E C U T I V E S U M M A R Y / / 0 6

02 P R O P E R T Y D E S C R I P T I O N / / 0 8

03 F I N A N C I A L A N A L Y S I S / / 1 8

TABLE OF CONTENTS

6 E X E C U T I V E S U M M A R Y


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Marcus & Millichap is pleased to present a newly renovated and fully stabilized 10-unit property for sale. 4078 Hamilton Street is a luxury asset in the heart of one of San Diego’s most desired rental markets, North Park.

This property has been completely renovated with a modern design inside and out, and a signature distinguished wood facade. Resting on over a 7,000 SF lot, there is 7,260 rentable SF comprised of 4 two-

bedroom / two-bathroom units and 6 one-bedroom / one-bathroom units. Each unit has been completely remodeled with luxurious new kitchens, bathrooms, white quartz countertops, high-end cabinets, stainless-steel appliances, and much more. Other amenities include on-site laundry, off-street parking, community BBQ and

select units have their own private balconies.

This complex offers investors the rare opportunity to be the proprietor of a fully stabilized asset in one of San Diego’s most profitable rental markets. With some of the best retailers in town establishing their roots here,

North Park continues to draw in the highest quality and most desirable tenants in San Diego. Increasing market demand throughout the city will continue to keep low vacancy at this property with a steady increase in rents.

Being within walking distance to both of North Park’s main thoroughfares, University Avenue and El Cajon Boulevard, this property is centrally located with the investor’s longevity in mind.

Walk Score(87)

4.12% Current Cap Rate

Newly Renovated Luxury Apartments

High Demand Rental Market Continued Growth

Low Maintenance/High Income

Pride of Ownership North Park

7E X E C U T I V E S U M M A R Y


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North Park, with over 80 highly rated bars and restaurants.8 P R O P E R T Y D E S C R I P T I O N

El Cajon BlvdEl Cajon Blvd

University AveUniversity Ave

Texas StTexas St

30th St30th St


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North Park, with over 80 highly rated bars and restaurants.

San Diego’s very own North Park is a neighborhood that has been growing in popularity year after year. With some of the best bars and restaurants in town, this has been one of the most desirable neighborhoods to be apart of. The variety of activities and the diversity within the neighborhood is the reason it is beloved. With the North Park Observatory, and over 80 combined highly rated bars and restaurants, there is never a dull moment when you step foot in this stylish town.

Downtown North Park has its very own signature mark. Right in the middle of 30th Street and University Ave, standing tall, is a large lit up sign to welcome you into the neighborhood. The sign isn’t the only thing electric about this part of town though. The streets are lively with locals and other San Diegans throughout the week looking to grab dinner, a drink, or simply hang out with friends.

Being a rapidly growing community, North Park is currently undergoing major development projects. HG Fenton, an apartment and commercial construction company, is building a complex with over 160 apartment homes; and the ground floor of this site will be restaurant and retail space. Another upscale project is the Broadstone Apartment Complex. This special project has aesthetic architecture, mixing in colorful and creative designs within the building to keep it interesting.

Over recent years, North Park has been put on a pedestal by known magazines such as Forbes and the Los Angeles Times. Forbes magazine quotes, “culturally diverse North Park is home to Craftsman cottages, cafes and diners, coffee shops, several microbreweries, boutiques, and the North Park Farmers Market.” The Los Angeles Times continues to cherish this gentrified neighborhood. “North Park has all the ingredients for the cool school: it’s culturally diverse and has art galleries, boutiques, trendy bars with handcrafted cocktails, and local brews, and foodie-approved eateries.” This neighborhood is considered the complete package.

NORTH PARK SAN DIEGO

“The area is overflowing with a thriving beer scene, cool eateries, and seriously hip boutiques” – San Diego Magazine

Ranked on America’s Best Hipster Neighborhoods by Forbes

”Coolest hipster neighborhoods” - Trip Advisors

10 P R O P E R T Y D E S C R I P T I O N

E X T E R I O RI M P R O V E M E N T S

New Roof with Warranty

Completely redesigned contemporary front façade, redwood siding and contemporary brushed stainless-steel cylinder lighting and address numbers

Dual pane windows throughout

Removal and replacement of concrete in the parking and courtyard area

Extensive new drought tolerant landscaping, DG, andinstallation of drip-irrigation system

New redwood fencing in the front and corrugated metalfencing in the courtyard

New three-toned exterior paint

New exterior Cebu Tile on Balconies and Laundry Room

New security lighting

New entry doors with glass inserts and custom paint

New Weber Summit 4-Burner Stainless Steel BBQ inCourtyard

11P R O P E R T Y D E S C R I P T I O N

I N T E R I O R I M P R O V E M E N T S

Retexturing of all interior walls and ceilings

New contemporary wood laminate flooring and baseboards

New wall heaters in all units

New Redesigned Kitchens : » New contemporary kitchen cabinets and pulls» New GE Stainless Steel appliances including gas range/

microwave, dishwasher, and refrigerator» New White Quartz kitchen countertops with stainless steel

under mount sinks» New subway tile backsplashes» New contemporary lighting fixtures» New garbage disposals

New contemporary ceiling fans/light fixtures in the dining areas and light fixtures throughout, including contemporary wall sconces

Brand New Bathrooms:» New combination showers/tubs with glass doors» New contemporary Cebu tile surrounds and flooring» New Vanities with contemporary faucets, light fixtures

and mirrors» Custom-designed vanities with White Quartz Countertops,

contemporary faucets, light fixtures and mirrors in twounits

» New toilets

New two-toned designer interior paint

New closets and interior doors as required

New Window Coverings

Completely refurbished laundry room including two new speed queen stacked washer/dryer units

New portable air conditioning units provided to all tenants at move-in


18 F I N A N C I A L A N A L Y S I S

PRICING DETAILS // 4078 HAMILTON STREET

SUMMARYPrice $4,195,000

Down Payment $1,745,120 42%

Number of Units 10

Price Per Unit $419,500

Price Per SqFt $577.82

Gross SqFt 7,260

Lot Size 0.16 Acres

Approx. Year Built 1971 / 2019

RETURNS CURRENT YEAR 1

CAP Rate 4.12% 4.34%

GRM 16.68 16.04

Cash-on-Cash 2.33% 2.86%

Debt Coverage Ratio

1.31 1.38

FINANCING 1ST LOANLoan Amount $2,449,880Loan Type NewInterest Rate 3.50%Amortization 30 Years

Year Due 2025

# OF UNITS

UNIT TYPE SCHEDULED RENTS

MARKET RENTS

6 1Bedroom 1Bath $1,856 $1,938

4 2 Bedroom 2 Bath $2,456 $2,544

INCOME CURRENT YEAR 1

Gross Scheduled Rent $251,520 $261,600

Less: Vacancy/Deductions 3.0% $7,546 3.0% $7,848

Total Effective Rental Income $243,974 $253,752

Other Income $10,4401 $10,4401

Effective Gross Income $254,414 $264,192

Less: Expenses 32.1% $81,790 31.1% $82,279

Net Operating Income $172,625 $181,913

Cash Flow $172,625 $181,913

Debt Service $132,013 $132,013

Net Cash Flow After Debt Service 2.33% $40,612 2.86% $49,901

Principal Reduction $47,153 $48,831

Total Return 5.03% $87,765 5.66% $98,731

EXPENSES CURRENT YEAR 1

$51,682 $51,682

$2,427 $2,427

$4,500 $4,500

$1,600 $1,600$3,500 $3,500

$1,200 $1,200$660 $660

Real Estate Taxes

Insurance

Utilities - Water & Sewer

Utilities - Gas & Electric

Trash Removal

Repairs & Maintenance

Landscaping

Pest

Operating Reserves

Management Fee $12,721 $13,210

Total Expenses $81,790 $82,279

Expenses/Unit $8,179 $8,228

Expenses/SF $11.27 $11.33

[1] Owned laundry income collected at $150/month + pet rent + RUBS

$2,000

$1,500

$2,000

$1,500

19F I N A N C I A L A N A L Y S I S

RENT ROLL SUMMARY // 4078 HAMILTON STREET

CURRENT YEAR 1

UNIT TYPE # OF UNITS

AVG. SQFEET

RENTAL RANGE

AVG. RENT

AVG. RENT/SF

MONTHLY INCOME

AVG. RENT

AVG. RENT/SF

MONTHLY INCOME

1 Bedroom / 1 Bathroom 6 640 $1,750 - $1,895 $1,856 $2.90 $11,135 $1,938 $3.03 $11,625

2 Bedroom / 2 Bathroom 4 855 $2,425 - $2,525 $2,456 $2.87 $9,825 $2,544 $2.98 $10,175

TOTAL / WEIGHTED AVERAGES 10 726 $2,096 $2.89 $20,960 $2,159 $2.97 $21,589

GROSS ANNUALIZED RENTS $251,520 $261,600

UNIT UNIT TYPE SQUAREFEET

CURRENT RENT/MONTH

CURRENT RENTSF/MONTH

YEAR 1 RENT/MONTH

YEAR 1RENT/SF/MONTH

1 2Bedroom / 2Bathroom 855 $2,425 $2.84 $2,525 $2.95










TOTAL 7,260 $20,960 $2.89 $21,800 $3.00

RENT ROLL

2

6

3

4

9

5

1

8

7

4078 Hamilton Street

4319 Mississippi Street

4045 30th Street

4525 Campus Avenue

2313 Lincoln Avenue

4534 30th Street

3233 Herman Avenue

4017 Georgia Street

4204 Campus Avenue

3579 3rd Avenue

1

2

3

456

7

89

SALES COMPARABLES

20 S A L E S C O M P A R A B L E S

4078 Hamilton StreetSan Diego, CA 92104

4319 MISSISSIPPI STREETSan Diego, CA 92104

1 4045 30TH STREETSan Diego, CA 92104

2

Sale Price $4,195,000

Sale Date On Market

Year Built 1971 / 2019

Price per Unit $419,500

Price per Square Foot $577.82

CAP Rate 4.12%

GRM 16.68

Number of Units 10

Units Unit Type

6 1 Bedroom/ 1 Bathroom



Sale Date 2/22/2018

Year Built 2017



CAP Rate 3.94%

GRM 17.77

Number of Units 21


Sale Date 2/8/2019

Year Built 2017



CAP Rate 4.23%

GRM 16.56

Number of Units 11

Units Unit Type

2 Studio/ 1 Bathroom



Units Unit Type


1 2 Bedroom/ 2 Bathroom Affordable

1 Comercial

21S A L E S C O M P A R A B L E S

4525 CAMPUS AVENUESan Diego, CA 92116

3


Sale Date 12/5/2018

Year Built 1989



Cap Rate 4.00%

GRM 16.00

Number of Units 10

Units Unit Type


4534 30TH STREET San Diego, CA 92116

52313 LINCOLN AVENUESan Diego, CA 92104

4


Sale Date 7/24/2019




Cap Rate 4.00%

GRM 16.28

Number of Units 10


Sale Date 11/16/2018

Year Built 1960



Cap Rate 4.00%

GRM 17.6

Number of Units 6

Units Unit Type



Units Unit Type




3233 HERMAN AVESan Diego, CA 92104

6 4204 CAMPUS AVESan Diego, CA 92103

8


Sale Date 7/25/2019




Cap Rate 4.37%

GRM 15.47

Number of Units 8


Sale Date On Market




Cap Rate 4.00%

GRM 16.30

Number of Units 12

Units Unit Type




Units Unit Type



4017 GEORGIA STREETSan Diego, CA, 92103

7


Sale Date On Market

Year Built 2017



Cap Rate 3.90%

GRM 17.10

Number of Units 13

Units Unit Type


1 1 Bedroom/ 1 Bathroom *


1 2 Bedroom/ 2 Bathroom + Den


3579 3RD AVENUESan Diego, CA, 92103

9


Sale Date On Market




Cap Rate 4.03%

GRM 16.00

Number of Units 8

Units Unit Type




25S A L E S C O M P A R A B L E S

2

7

65

4

3

1

4078 Hamilton Street

3233 Herman Avenue

1237 Pennsylvania Ave

4319 Mississippi Street

4054 Flordia Street

3770 Grim Avenue

3684 Alabama Street

4674 Ohio Street

3744 Arnold Avenue

1

2

3

456

78

RENT COMPARABLES

8

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

UNIT TYPE UNITS SQUARE FEET RENT RENT/SF

1 Bedroom / 1 Bathroom 6 640 $1,895 $2.96


TOTAL/WTD. AVG. 10 $2,096 $2.89

TotalUnits10 Year

Built 19714 0 7 8 H A M I L T O N S T R E E TSan Diego, CA 92104





TOTAL/WTD. AVG. 8 762 $2,283 $3.10

3 2 3 3 H E R M A N A V E N U ESan Diego, CA 92103

1TotalUnits08 Year

Built 1957



TOTAL/WTD. AVG. 1 580 $2,195 $3.78

1 2 3 7 P E N N S Y L V A N I A A V E San Diego, CA 92103

2TotalUnits07 Year

Built 1911

27R E N T C O M P A R A B L E S


2 Bedroom /2 Bathroom 1 1084 $2,550 $2.35

TOTAL/WTD. AVG. 1 1084 $2,550 $2.35

4 0 5 4 F L O R D I A S T R E E TSan Diego, CA 92104

4TotalUnits09 Year

Built 1978




TOTAL/WTD. AVG. 2 799 $2,608 $3.30

4 3 1 9 M I S S I S S I P P I S T R E E TSan Diego, CA 92104

3TotalUnits21 Year

Built 2017



TOTAL/WTD. AVG. 1 854 $2,500 $2.93

3 7 7 0 G R I M A V E N U E San Diego, CA, 92103

5TotalUnits07 Year

Built 1981

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




TOTAL/WTD. AVG. 8 750 $2,123 $2.85

4 6 7 4 O H I O S T R E E TSan Diego, CA 92116

7TotalUnits08 Year

Built 1964




TOTAL/WTD. AVG. 2 751 $2,350 $3.13

3 6 8 4 A L A B A M A S T R E E TSan Diego, CA 92104

6TotalUnits12 Year

Built 2013



TOTAL/WTD. AVG. 1 920 $2,500 $2.72

3 7 4 4 A R N O L D A V E N U ESan Diego, CA 92104

8TotalUnits15 Year

Built 1986

29R E N T C O M P A R A B L E S

America’s Finest CityAmerica’s Finest City''

30 M A R K E T O V E R V I E W

C i t y O fS A N D I E G O

The San Diego-Carlsbad metro is located in the southwestern portion of the state of California. Comprising San Diego County, it sits adjacent to the Mexican border, extending north to the southern edge of Orange County and Riverside County. From west to east, it is situated between the Pacific Ocean and Imperial County.

San Diego is the most populous city in the county with 1.4 million residents, followed by Chula Vista with 270,000 and Oceanside with 181,000 people. A diverse economic base includes military, finance, tourism and real estate. Employment in these industries coupled with a strong retail base draw many job seekers to the region.

ECONOMY

• The San Diego metro is maintaining economic growth. Gross Metro Product (GMP) grew 3.4 percent last year versus 2.5 percent for the nation.

• The U.S. Department of Defense has a significant impact on the local economy. The largest employer in the county is the U.S. Navy at the Naval Base Coronado, which includes the North Island Naval Air Station. Camp Pendleton is also a significant employer.

• Tech firms are proliferating. Major technology and research companies include Leidos, General Dynamics NASSCO, Qualcomm and BAE Systems.

METRO HIGHLIGHTS

WHITE-COLLAR JOBSThe professional and business services sector accounts for a larger share of total employment than the U.S. average.

POPULATION GROWTHA gain of approximately 100,000 residents in the metro over the next five years will increase the need for basic health and education services.

HIGHLY AFFLUENT POPULATIONSan Diego’s median household income of $70,800 per year is well above the national median.

MANUFACTURING

PROFESSIONAL ANDBUSINESS SERVICES

GOVERNMENT

LEISURE AND HOSPITALITY

FINANCIAL ACTIVITIES

TRADE, TRANSPORTATION AND UTILITIES

CONSTRUCTION

EDUCATION AND HEALTH SERVICES

INFORMATION

OTHER SERVICES

7%

16%

17%

13%

5%

15%

6%

14%

2%

4%

SHARE OF 2018 TOTAL EMPLOYMENT

31M A R K E T O V E R V I E W

QUALITY OF LIFESan Diego is California’s oldest community. A large harbor, miles of beaches and exceptional weather attract businesses, residents and tourists. San Diego still houses a number of buildings and facilities from its past, including two missions, Old Town San Diego, Balboa Park and the Hotel del Coronado. San Diego County has grown into a sophisticated, urban region. Its downtown area has undergone a renaissance in the past decade or so. Petco Park, home of the San Diego Padres, spurred redevelopment that spread to the mid-city communities and attracted residents to the urban core. San Diego’s major tourist attractions are the San Diego Zoo, San Diego Wild Animal Park, SeaWorld San Diego and Legoland.

2018 POPULATION BY AGE

SPORTS: San Diego Padres, Zest San Diego F.C., San Diego Gulls

EDUCATION: UC San Diego, San Diego State University, San Diego Mesa College, University of San Diego

ARTS & ENTERTAINMENT: San Diego Zoo, The San Diego Museum of Art, Balboa Park, Sea World, Legoland

• The metro population consists of almost 3.3 million people and will expand to 3.5 million residents through 2022. During this time, 59,000 households will be added.

• A median home price of $609,000 is more than double the U.S. median, resulting in a homeownership rate of 53 percent, which is below the national rate of 64 percent.

• Residents are more educated than the nation. Roughly 35 percent of the people age 25 and older have a bachelor’s degree, compared with 29 percent for the U.S.

DEMOGRAPHICS// 4078 HAMILTON STREET

6%0-4 Years

18%5-19 Years

8%20-24 Years

29%25-44 Years

24%45-64 Years

13%65+ Years


DEMAND MATCHES DEVELOPMENT; STRONG RENT GROWTH FOLLOWS

Rising home values force more residents into apartments. San Diego County entered the fourth quarter of 2018 with unemployment at a cycle-low level, suggesting employers will recruit from outside the metro with greater frequency when filling higher-paying openings moving forward. For most households and individuals that relocate to the area, housing options will be limited, as the difference between a monthly mortgage payment and average effective rent widened by more than $500 over the past 12 months to a difference of $1,724 per month. This broadening bodes well for future apartment demand and rent growth at a time when vacancy rests below 3 percent in more than half of the metro’s sub-markets.

Tight vacancy warrants robust construction pipeline. Developers are building nearly 7,900 rentals, yet units are concentrated in pockets. Downtown San Diego is home to more than 40 percent of the pipeline including six high-rises that total 2,700 units. The bulk of other rentals being constructed are in Northeast San Diego, Chula Vista and Carmel Valley. Another group of submarkets with sub-3 percent unit availability lack construction pipelines, suggesting their inventories of vacant units should further constrict in the coming quarters.

SAN DIEGO// METRO AREA

Construction:Driven by the completion of nearly 3,600 units in the city of San Diego, overall delivery volume in the metro dips nominally during 2019. Projects finalized this year comprise an average of 190 units

Vacancy:San Diego’s average vacancy rate rises slightly to 3.8 percent as more than 3,000 units are absorbed for a seventh consecutive year.

Rents:Strong absorption supports another year of steady rent growth, lifting the average effective rate to $2,045 per month. In 2018, rents expanded 5.3 percent.

4,400 unitswill be completed

20 basis pointdecrease in

vacancy

4.3% increase in effective rents

MULTIFAMILY 2019 OUTLOOK


DEMOGRAPHICS // 4078 HAMILTON STREET

276,871To t a l P o p u l a t i o n W i t h i n 3 M i l e R a d i u s

GENDER

51.3%

48.7%

$81,716Average Household Income within

3 M i l e Radius

125,075To t a l H o u s e h o l d s i n 3 M i l e R a d i u s


University Heights1.0 Miles

Downtown4.6 Miles

Hillcrest2.0 Miles

58Good transit

Many nearby public transportation options.

70Bikeable

Mostly flat, minimal bike lanes.

87Very WalkableMost errands can be

accomplished on foot.


CARSON TRUJILLOSenior Associate

San DiegoDirect: (858)373-3285

[email protected]: CA 01974818

E X C L U S I V E L Y L I S T E D B Y


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hamilton · 2020-03-04 · distinguished wood facade. resting on over a 7,000 sf lot, there is...

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