offering memorandum 5640 kester avenue · the rose bowl — at the east; the ronald reagan...

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

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5640 KESTER AVENUEV A N N U Y S , C A 9 1 4 1 1

M A T T H E W S R E A L E S T A T E2

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

O M R I C O N S TA N T I NA S S O C I A T E - M U L T I F A M I L Y

Direct +1.818.923.6110 Mobile +1.818.488.0634 [email protected] License No. 02075528 (CA)

TA B L E O F C O N T E N T S04

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| P R O P E R T Y O V E R V I E W

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

| R E N T R O L L

| A R E A O V E R V I E W

D A N I E L W I T H E R S

S V P & S E N I O R D I R E C T O R - M U L T I F A M I L Y


L O S A N G E L E S , C A 3

ISECT ION

PROPERTY OVERVIEW

OPPORTUNITY

» 5640 Kester Avenue is in the desirable location of south Van Nuys bordering Sherman Oaks

» Great owner/user opportunity

» Very easy access to the 101 and 405 Freeway

» In close proximity to Sherman Oaks Recreation Center—which offers a jogging path, picnic area, indoor gym, sports fields, and many other recreational options and activities

» Centrally located to some of Los Angeles’s best restaurants, shopping, and entertainment

» 1-bedroom and 2-bedroom units -- ideal for the working-class neighborhood where these types of units are in constant demand

» All copper plumbing, central air conditioning and heat, with each unit possessing its own water heater

» Each unit has its own designated 1-car-garage

» Opportunity for value to be added, especially as rental rates continue to climb through Los Angeles

NO. OF UNITS6

YEAR BUILT1953

APN2244-014-026

GROSS SF4,520

AVG SF PER UNIT753

LOT SIZE9,303


LOCATION MAP


UNIT MIXTotal Units Unit Mix Unit Mix % Current Avg Rent Current Monthly Rent Market Rent Market Monthly Rent

4 1+1 67% $1,393 $5,571 $1,800 $7,2002 2+1 33% $1,754 $3,507 $2,000 $4,000

Scheduled Monthly Rent: $9,078 $11,200Scheduled Yearly Rent: $108,938 $134,400

INVESTMENT SUMMARYOffering Price: $1,900,000

Property Address: 5640 Kester AvenueVan Nuys, CA 91411

Price Per Unit: $316,667Price Per S.F.: $420.35Cap (current/market): 3.58% / 5.10%GRM (current /market): 17.25 / 14.01

PROPERTY DESCRIPTIONNumber of Units: 6Year Built: 1953APN: 2244-014-026Gross Sq. Ft.: 4,520Average S.F. Per Unit: 753Lot Size: 9,303Zoning: LARD1.5

FINANCIAL ANALYSISI IS ECT IO N


ANNUALIZED OPERATING DATA CURRENT MARKETScheduled Gross Income: $108,938 $134,400 23% UpsideLess Vacancy Reserve: 3.0% $3,268 3.0% $4,032Laundry Income: $1,200 $1,200Gross Operating Income: $106,870 $131,568Expenses: 35.6% $38,783 25.85% * $34,745Net Operating Income: $68,087 $96,823Loan Payments: $60,131 $60,131Pre-Tax Cash Flow: 1.0% $7,956 4.49% ** $36,692Plus Principal Reduction: $19,896 $19,896Total Return Before Taxes: 3.40% $27,851 6.92% ** $56,588* As a percent of Scheduled Gross Income** As a percent of Down Payment

PRO FORMA ANNUAL OPERATING EXPENSES CURRENT PER UNIT % OF SGI MARKET PER UNIT % OF SGIProperty Taxes 1.196% x Sale Price 21.26% $22,725 $3,787 $22,725 $3,787 16.9%Insurance $0.30 x GSF 5.72% $6,117 $1,019 $2,078 $346 1.5%Repairs & Maintenance $500 x Units 2.81% $3,000 $500 $3,000 $500 2.2%Landscaping $120 x Units 0.67% $720 $120 $720 $120 0.5%Utilities $625 x Units 3.51% $3,750 $625 $3,750 $625 2.8%Trash $412 x Units 2.31% $2,472 $412 $2,472 $412 1.8%Total Expenses 36.29% $38,783 $6,464 $34,745 $5,791 25.9%

CURRENT PER UNIT % OF SGINon-controllable expenses: Taxes, Insur-ance $28,841 $4,807 26.5%Total Expense with out Taxes $16,059 $2,676 14.74%

FINANCINGLoan Amount $1,082,000 Terms: 30Down Payment: 43% $818,000 Interest: 3.75%Yearly Pmt: $60,131 Monthly Pmt: $5,011Debt Coverage: 1.20


RENT ROLL

Unit Mix Rent Market Rent1 1+1 $1,550 $1,8002 1+1 $1,250 $1,8003 2+1 $2,000* $2,0004 1+1 $1,220.85 $1,8005 1+1 $1,550 $1,8006 2+1 $1,507.35 $2,000

TOTALS $9,078 $11,200

AVERAGES $1,513 $1,867

RENT ROLL

I I ISECT IO N

*Market Rent


RENT COMPARABLES

ADDRESS MIX AVG RENT YEAR BUILT

5461 Kester Avenue 1+1 $1,740 1972

5230 Kester Avenue 1+1 $1,825 1954

4924 Kester Avenue 1+1 $1,895 1964

15010 Burbank Boulevard 1+1 $1,850 1950

5112 Sepulveda Boulevard 1+1 $1,750 1970

AVERAGES $1,812

14220 Burbank Boulevard 2+1 $2,045 1969

14638 Erwin Street 2+1 $1,695 1958

5661 1/2 Tilden Avenue 2+1 $2,450 1949

14202 Delano Street 2+1 $1,950 1955

14163 Delano Street 2+1 $1,850 1963

AVERAGES $1,998

SUBJECT PROPERTY MIX AVG RENT YEAR BUILT

5640 Kester Avenue1+12+1

$1,393$1,754

1953


SALES COMPARABLES

ADDRESS SALE DATE SALE PRICE PRICE PER UNIT PRICE PER SF ACTUAL

CAP RATE GRM NUMBER OF UNITS BUILDING SF YEAR BUILT

15025 Burbank BlvdSherman Oaks, CA 07/25/19 $1,155,000 $288,750 $347.47 3.45% 17.34 4 3,324 1961

14154 Sylvan StVan Nuys, CA 05/16/19 $1,050,000 $262,500 $303.12 4.96% 13.51 4 3,464 1927

13822 Oxnard StVan Nuys, CA 02/28/19 $715,000 $357,500 $620.66 2 1,152 1948

14833 Magnolia BlvdSherman Oaks, CA 11/30/18 $9,600,000 $266,666 $305.95 4.17% 36 31,378 1963

14805 Magnolia BlvdSherman Oaks, CA 11/30/18 $8,850,000 $368,750 $403.56 3.78% 24 21,930 1984

AVERAGES $308,833 $396.15 4.09% 15.43

SUBJECT PROPERTY SALE DATE SALE PRICE PRICE PER UNIT PRICE PER SF ACTUAL

CAP RATE GRM NUMBER OF UNITS BUILDING SF YEAR BUILT

5640 Kester AvenueVan Nuys, CA - $1,900,000 $316,667 $420.35 3.58% 17.25 6 4,520 1953


VAN NUYS, CAVan Nuys is located in Los Angeles County and part of the Los Angeles-Long Beach-Anaheim MSA, the 13th-most populated metropolitan area in the world and the second-largest MSA in the United States. The city of Van Nuys is a thriving community within central San Fernando Valley and convenient access to Interstate 405 or Metrolink rail service allows for an easy commute to employment hubs throughout Los Angeles County.

As one of the fastest growing cities in Los Angeles, Van Nuys has a projected growth of over 3% in 2023. Boasting a population of more than 110,000, it is one of the densest cities in Los Angeles County and home to a large range of employers. Bordering other large cities such as Sherman Oaks, North Hollywood, and Reseda it provides for ample employment, shopping, and dining opportunities.

DEMOGRAPHICSPOPULATION GROWTH 1-MILE 3-MILE 5-MILE

2024 Projection 116,463 594,010 1,290,5282019 Estimate 112,214 575,523 1,250,1622010 Census 105,836 543,825 1,185,6042000 Census 105,900 558,670 1,198,562POPULATION GROWTH 1-MILE 3-MILE 5-MILEGrowth 2019-2024 3.79% 3.21% 3.23%Growth 2010-2019 6.03% 5.83% 5.45%

HOUSEHOLDS 1-MILE 3-MILE 5-MILE

2024 Projection 40,275 223,353 455,2632019 Estimate 38,720 215,036 439,0982010 Census 36,328 199,359 410,8282000 Census 33,333 185,861 393,687INCOME 1-MILE 3-MILE 5-MILE2019 Avg. Household Income $54,004 $66,898 $72,155

AREA OVERVIEWIVSECT I O N


SAN FERNANDO VALLEY - “VALLEY OF THE STARS”Southern California’s San Fernando Valley, encompassing the City of Burbank, City of Calabasas, City of Glendale, City of Los Angeles and City of San Fernando.

The San Fernando Valley is an urbanized valley in Los Angeles County, California in the Los Angeles metropolitan area, defined by the mountains of the Transverse Ranges circling it. Comprised of nearly 350 square miles of prime southland real estate, the San Fernando Valley is home to more than 1.8 million residents. About 80 percent of the San Fernando Valley is actually part of the City of Los Angeles, but the Valley also includes other independent cities which are attractive locations for business: Burbank, Calabasas, Glendale, Hidden Hills, and San Fernando.

In addition to the many popular studio tours, historical sites, theaters and museums, the San Fernando Valley offers an incredible array of fine dining, shopping, lodging and recreational opportunities, along with world -class attractions at each of the scenic entrances to our Valley, including the magnificent new Getty Center, the Hollywood Bowl and the Los Angeles Zoo at the southern entrances; the site of the granddaddy of all college bowl games — the Rose Bowl — at the east; the Ronald Reagan Presidential Library at the west; and the tallest, fastest roller coasters in the world at Six Flags Magic Mountain to the north.

99,507 POPULATI ON

5.31 SQUARE MILES

3. 53% FU T U RE PO PU LAT I O N GRO WT H

The Valley is home to numerous companies, the most well-known of which work in motion pictures, music recording, and television production. With more than 100 soundstages producing everything from “Jurassic Park” to “The Tonight Show,” the “Valley of the Stars” is home to the Walt Disney Company, NBC Universal Studios, Warner Bros., CBS Studio Center as well as NBC and ABC Television Studios.

The valley was previously known for advances in aerospace technology and nuclear research by companies such as Lockheed, Rocketdyne and its Santa Susana Field Laboratory, Atomics International, Litton Industries, Marquardt, and TRW’s predecessor Thompson Ramo Wooldridge.

ECONOMY


» Burbank - the “Media Capital of the World”, home to the primary studios of Warner Brothers and Disney.

» Calabasas - in the foothills of the Santa Monica Mountains and home to one of the oldest buildings in the LA area.

» Chatsworth - a suburb in the hills northwest of the valley.

» Glendale - a well-known city at the very southeastern corner of the valley, home to many Hollywood production facilities and a famous celebrity cemetery.

» North Hollywood - holds an arts district with many small theaters and shops.

» North Valley - the northern portion of the valley, mostly residential and home to a couple of scattered attractions such as the Mission San Fernando and the Nethercutt Collection automotive museum.

» Sherman Oaks - a local center for business and shopping within the valley.

» South Valley - the southwestern portion of the valley, made up of the prominent neighborhood of Encino and the western hills of the valley.

» Studio City - trendy, upscale neighborhood that is home to CBS studios and many stars.

» Universal City - home to the NBC Universal Studios and the associated Universal Studios Hollywood theme park, with its famous backlot tram and thrill rides, as well as the shopping and entertainment complex of Universal CityWalk.

» Van Nuys - a neighborhood in the heart of the valley, home to a noted Japanese garden and Van Nuys Airport.

» San Fernando - a suburban city in the northern part of the valley with a Latin American cultural presence, known for its high quality of life, safety, and community values.

n e i g h b o r h o o d s

p o i n t s o f i n t e r e s t

» Universal Studios Hollywood

» Hollywood Boulevard

» Rodeo Drive

» The Getty

» Hollywood Burbank Airport

» Van Nuys Airport

» The Great Wall of Los Angeles

» Valley Relics Museum

» Starlight Bowl

» Valley Performing Arts Center


s a n f e r n a n d o va l l e y d e v e l o p m e n t sIt’s time to stop thinking of the Valley as a sleepy suburb. From Chatsworth to North Hollywood, plans are in the pipeline to make neighborhoods more city-like, meaning denser and maybe more walkable and bikeable and more transit-friendly.

In the coming years, developers will build thousands of new units of housing, create open space, bring in new retailers, and build new offices, creating mini villages within neighborhoods.

s e p u lv e da r a i l pa s sMetro is making strides to improve travel between the San Fernando Valley, the Westside and Los Angeles International Airport (LAX). The natural barrier created by the Santa Monica Mountains means that most people traveling between these areas are funneled primarily onto the I-405 Freeway, already ranked as one of the most traveled urban highways in the nation. More than 400,000 people travel through this area every day to commute to work, school, and other destinations along the freeway and beyond.

Under Metro’s 28 by 2028 initiative, the Valley-Westside portion of the project is identified as a candidate for potentially accelerated completion by the 2028 Olympic and Paralympic Games in Los Angeles (LA 2028). This project may be expedited through a public-private partnership (P3), which if feasible offers the potential for greater innovation and flexibility with reduced risk and cost.

Measure M also provides $260 million in funding for ExpressLanes on the I-405 between the US 101 and I-10. This corridor is identified as a priority in Metro’s Countywide ExpressLanes Strategic Plan. By 2042, Metro is projecting 122,000 to 137,000 people will take the Valley-to-Westside line daily on weekdays (again, that estimate fluctuates based on the option the agency’s directors end up choosing).

The highest ridership is projected for the third subway option, which would run on an elevated track through the Valley before going underground through the Sepulveda Pass. That option is also projected to attract the newest transit trips and low-income riders of the four alternatives.

A planned station on UCLA’s campus is expected to serve up to 18,000 riders per day which would make it “the busiest non-transfer station in the entire Metro system.


This Offering Memorandum contains select information pertaining to the business and affairs of 5640 Kester Ave located in Van Nuys, CA (“Property”). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum for the Property, you agree:

1. The Offering Memorandum and its contents are confidential;2. You will hold it and treat it in the strictest of confidence; and3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental

to the interest of the Seller.

Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.

CONFIDENTIALITY AGREEMENT & DISCLOSURE

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

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

5640 KESTER AVENUEV A N N U Y S , C A

O M R I C O N S TA N T I NA S S O C I A T E - M U L T I F A M I L Y

Direct +1.818.923-6110 Mobile +1.818.488.0634 [email protected] License No. 02075528 (CA)

D A N I E L W I T H E R S

S V P & S E N I O R D I R E C T O R - M U L T I F A M I L Y


offering memorandum 5640 kester avenue · the rose bowl — at the east; the ronald reagan...

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