1540 North Formosa Avenue, Los Angeles, CA 90046

10-Units Multifamily Investment Opportunity in Los Angeles

1540 North Formosa Avenue, Los Angeles, CA 90046

Exclusively Listed By:

RICH JOHNSMultifamily Investment [email protected]

CALBRE LIC#01432215

All materials and information received or derived from KW Commercial its directors, officers, agents, advisors, affiliates and/or any third party sources are provided without representation or warranty as to completeness, veracity, or accuracy, condition of the property, com-pliance or lack of compliance with applicable governmental requirements, developability or suitability, financial performance of the prop-erty, projected financial performance of the property for any party’s intended use or any and all other matters.Neither KW Commercial its directors, officers, agents, advisors, or affiliates makes any representation or warranty, express or implied, as to accuracy or completeness of the any materials or information provided, derived, or received. Materials and information from any source, whether written or verbal, that may be furnished for review are not a substitute for a party’s active conduct of its own due diligence to determine these and other matters of significance to such party. KW Commercial will not investigate or verify any such matters or conduct due diligence for a party unless otherwise agreed in writing.

EACH PARTY SHALL CONDUCT ITS OWN INDEPENDENT INVESTIGATION AND DUE DILIGENCE

Any party contemplating or under contract or in escrow for a transaction is urged to verify all information and to conduct their own in-spections and investigations including through appropriate third party independent professionals selected by such party. All financial data should be verified by the party including by obtaining and reading applicable documents and reports and consulting appropriate indepen-dent professionals. KW Commercial makes no warranties and/or representations regarding the veracity, completeness, or relevance of any financial data or assumptions. KW Commercial does not serve as a financial advisor to any party regarding any proposed transactionAll data and assumptions regarding financial performance, including that used for financial modeling purposes, may differ from actual data or performance. Any estimates of market rents and/or projected rents that may be provided to a party do not necessarily mean that rents can be established at or increased to that level. Parties must evaluate any applicable contractual and governmental limitations as well as market conditions,vacancy factors and other issues in order to determine rents from or for the property. Legal questions should be dis-cussed by the party with an attorney. Tax questions should be discussed by the party with a certified public accountant or tax attorney. Title questions should be discussed by the party with a title officer or attorney. Questions regarding the condition of the property and whether the property complies with applicable governmental requirements should be discussed by the party with appropriate engineers, architects, contractors, other consultants and governmental agencies. All properties and services are marketed by KW Commercial in compliance with all applicable fair housing and equal opportunity laws. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

CONFIDENTIALITY AGREEMENT

PAVIT SINGHMultifamily Investment [email protected]

CALBRE LIC. #01332811

CONTENTS

041016

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PROPERTY DESCRIPTION

FINANCIAL SUMMARY

MARKET COMPARABLES

MARKET OVERVIEW

P r o p e r t yDescr ipt ion

KW Commercial, is pleased to present an unparalleled opportunity to acquire 1540 North Formosa Avenue, a 10-unit multifamily investment opportunity located North of Sunset Blvd. in Hollywood (90046). This offering allows the astute investor both excellent current income metrics, capital preservation certainty plus a clear path for long term wealth appreciation.

1540 North Formosa Avenue, built in 1963, features very large apartment homes averaging +/- 820 SF each with a unit composition comprised of Seven (7) One Bedroom – One Bathroom and Three (3) Large Two Bedroom - Two Bathroom apartment homes.

Many units include private patios and balconies.

1540 Formosa Avenue is well-maintained and offers common area laundry facilities, gated entry and garage parking for 10 vehicles.

The offering is situated just north of Sunset Boulevard and two blocks west of La Brea Avenue – considered a premier Hollywood location due to its proximity to Runyon Canyon hiking trails and easy access to the rich retail and restaurant venues nearby.

Hollywood continues to expand its robust footprint with an abundance of high-paying jobs created by entertainment, media, and technology giants such as Netflix, HBO, and Viacom. The proximity of such prominent employers reinforces long term and sustainable demand that will drive future rent growth at the Property.

Additionally, within a short distance are some of Los Angeles’ finest amenities such as The Pacific Design Center, Melrose Avenue, The Grove, LA County Museum of Art (LACMA). Nearby grocers include Trader Joe’s, Whole Foods Market and Bristol Farms. Favored nearby dining options include Laurel Hardware, Osteria Mozza, Wood & Vine, The Hudson, Surly Goat, Baby Blues BBQ, Bar Lubitsch, Salt’s Cure, and countless others.

1540 North Formosa Avenue presents an unequaled investment opportunity in an “A” location with strong current income metrics. Due to the property’s premier location, large units and advantageous unit mix, 1540 North Formosa Avenue offers a unique opportunity for investors looking for excellent current income along with capital preservation certainty.

OFFERINGTHE

RARE OPPORTUNITY: 1540 North Formosa Avenue, built in 1963 is a 10-unit investment opportunity located North of Sunset in Hollywood. This rare offering allows the astute investor both capital preservation certainty plus excellent current and future income metrics.

CAPITAL APPRECIATION: This pride of ownership asset features healthy current returns along with measurable rental upside upon unit attrition, thus providing excellent investor returns along with long term wealth appreciation.

WELL LOCATED: Well located at the Center of Everything, 1540 Formosa puts you just blocks to Runyon Canyon and endless dining and shopping options along with a world-class cache of major Hollywood employers.

GREAT WALKABILITY: 1540 North Formosa Avenue features a Walk Score of 94 and known as a “Walker’s Paradise”.

INVESTMENT

HIGHLIGHTS

1540 North Formosa AvenueLos Angeles, CA 90046 TRANSIT ORIENTED:

1540 North Formosa Avenue offers accessible public transit options such as the DASH or Metro Rapid, which are within walking distance, and the Metro Red Line, which is approximately one mile from the Property.

STRONG EMPLOYMENT: Hollywood has an abundance of high-paying jobs created by entertainment, media, and technology giants such as Netflix, HBO, and Viacom. The proximity of such prominent employers reinforces long term and sustainable demand that will drive future rent growth at the Property.

MEDIAN HOME VALUES in 90046*: The median home value within the 90046 zip code is $1,477,485 with the median list price per square foot being $881, which is higher than the Los Angeles average of $551. The median price of homes currently listed in 90046 is $1,750,000. The median rent price in 90046 is $5,750.

*source Realtor.com and Zillow 9/5/2020

Exterior

Interior

M a r k e tO v e r v i e w

Hollywood is recognized worldwide as the epicenter of the film entertainment industry. It is the premiere loca-tion for shopping, dining, hotel and entertainment op-tions by locals and tourists alike. With trendy retail, hip restaurants, nightlife hot spots and exciting entertainment venues, Hollywood offers a vibe and excitement that few cities in the world can match.

Hollywood and Highland, one of the most visited tourist attractions in Los Angeles, is located within blocks of the subject properties. The nearly 400,000 square foot out-door retail center is home to such brands as Louis Vuitton, Lucky Brand, Gap and Express. The center also includes the TCL Chinese Theater (formerly Mann Grauman’s Chi-nese Theatre) and the Dolby Theatre, which serves as the annual site of the Academy Awards.

THE BEST OFHOLLYWOOD

HOLLYWOOD

Sunset + Vine RetailThe Sunset + Vine retail center located approximately one mile from Wilcox Avenue Apartments sits below 300 multifamily units at the Sunset and Vine intersection. The 87,000 square foot center is occupied by Walgreens, Bed, Bath, and Beyond and Verizon Wireless.

Pantages TheatreLocated at Hollywood and Vine and one mile from Wilcox Avenue Apartments the Pantages Theatre was designed by architect B. Marcus Priteca. The 2,703 capacity theatre is one of Los Angeles’ leading venues for live theatre.

Henry Fonda TheatreOpened in 1926 the Henry Fonda Theatre was designed in Spanish Colonial revival Style. The 1,200 capacity theatre hosts live events, films and radio broadcasts and is located approximately one mile from Wilcox Avenue Apartments.

Hollywood BowlThe Hollywood Bowl, located approximately a half mile from Wilcox Avenue Apartments, is the largest natural amphitheater in the United States, with a seating capacity of nearly 18,000 patrons. The Hollywood Bowl is home to the Hollywood Bowl Orchestra, the Los Angeles Philharmonic and hosts hundreds of musical events each year

Hollywood PalladiumThe Hollywood Palladium located a mile and a half from Wilcox Avenue Apartments includes an 11,000 square foot dance floor and capacity for 4,000 people. In 2007, Live Nation signed a 20-year lease to host concerts at the venue.

Runyon CanyonRunyon Canyon Park, located approximately two miles from Orchid Apartments, is a 60-acre park set at the eastern end of the Santa Monica Mountains. The park, which features several hiking trails and a dog park, serves as one of the most popular hiking destinations in Los Angeles with a peak elevation of 1,320 feet at a point known as Indian Rock. Because of its proximity to the residential areas of Hollywood and the Hollywood Hills, celebrity sightings are common.

HOLLYWOOD MARKET OVERVIEW

HOLLYWOOD DEVELOPMENT AND RENTAL MARKET

Some of the most successful new developments in Los Angeles are situated in Hollywood, including the W Hotel, Redbury Hotel, the Los Angeles Medical Center, Technicolor Headquarters, ArcLight Hollywood, Emerson College campus, Columbia Square and the future home of the Academy Museum of Motion Pictures. With over $4 billion in capital investments, Hollywood remains one of California’s fastest growing and popular urban submarkets, as evidenced by the following:

• Current Multifamily Occupancy is 96.3%; average occupancy since 1997 of 97%, never lower than 95%• Average annual rent growth of 5.6% since 2000• New units, defined as 2000 or later construction, have a 55% premium to older inventory

Adjacent Arts & Music AcademiesAmerican Academy of Dramatic Arts

Theater of Arts College

School of Visual Effects

Musicians Institute

Los Angeles Film School

Los Angeles Center of Photography

Los Angeles Institute of Music

Los Angeles School of Music

Los Angeles Jazz Society

SAE Institute - Los Angeles

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NORTHHOLLYWOOD

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Universal Studios/CityWalkJohn Anson Ford TheaterHollywood BowlGrauman’s Chinese TheatreHollywood & HighlandEl Capitan TheaterPantages TheatreBarnsdall ParkKaiser Medical CenterChildren’s Hospital of Los AngelesQueen of the Angels Hollywood Presbyterian Medical CenterLos Angeles City CollegeBraille InstituteWiltern TheatreLafayette ParkMacArthur ParkGood Samaritan HospitalLos Angeles Convention CenterStaples CenterMusic CenterLos Angeles City HallEl Pueblo de Los Angeles

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1540NORTH FORMOSA

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F i n a n c i a lS u m m a r y

FINANCIAL SUMMARY 1540 North Formosa Avenue, Los Angeles, CA 90046

BUILDING DATAUnits 10

Year Built 1963

Lot Sq Ft 7,537

Bldg Gross Sq Ft 8,198

ESTIMATED ANNUALIZED EXPENSESNew Property Taxes $41,990

Utilities $8,400

Property Insurance $3,279

Trash Collection $1,800

Repairs & Maintenance $7,979

Pest Control $480

Landscaping $1,080

Reserves & Replacements $3,990

Total Estimated Expenses -$68,998

SOURCE OF INCOME CURRENT RENT MARKET RENT Post Renovation

# of Units Unit Type Avg. Rent Total Avg. Rent Total

7 One Bedroom - One Bathroom $1,562 $10,935 $1,850 $12,950

3 Two Bedroom- Two Bathroom $1,863 $5,588 $2,600 $7,800

Rental Income $16,523 $20,750

Laundry Income $100 $100

Total Monthly Income $16,623 $20,850

Total Annual Income $199,476 $250,200

EST. ANNUALIZED OPERATING DATA CURRENT MARKETScheduled Gross Income $199,476 $250,200

Less Vacancy 2.0% ($3,990) 2.0% ($5,004)

Gross Operating Income $195,486 $245,196

Less Expenses 35% ($68,998) 28% ($68,998)

Net Operating Income $126,489 $176,198

NOTATIONS:

1) Real Estate Taxes: Taxes have been underwritten based on a proforma tax rate of 1.235%.

2) Property Insurance: Underwritten at $0.40 per SF of building based on market rates.

3) Utilities estimated at $700 / unit / year.

4) Repairs & Maintenance estimated at 4% of Scheduled Gross Income.

5) Trash estimated at $150/mo, pest control at $40/mo and landscaping at $90/mo.

6) Reserves & Replacements : Underwritten at 2% of Scheduled Gross Income.

FINANCIAL INDICATORS

Offering Price $3,400,000

Current CAP 3.7%

Market CAP 5.2%

Current GRM 17.0

Market GRM 13.6

Cost Per SF $415

Cost Per Unit $340,000

Cash on Cash Return 3.7%

Expenses Per Unit $6,900

Expenses Per Sq Ft $8.42

RENT ROLL 1540 North Formosa Avenue, Los Angeles, CA 90046

UNIT STATUS UNIT TYPE Current Rent Market Rent Post Renovation

1 Occupied 1 Bedroom - 1 Bathroom $1,695 $1,850










$16,523 $20,750

Assessor’s Parcel Number Buildings

Year Built Land Use

Zoning Stories

SITE DESCRIPTIONUnits

Gross Square Footage Lot Size Square Footage

Parking

UTILITIESWaterSewer

ElectricGas

CONSTRUCTIONFoundation

Framing Exterior

Roof

MECHANICALWater Heaters

Laundry

Property Details

1540 North Formosa Avenue• Los Angeles • CA 90046

5548-011-023One1963ApartmentsLAR3Two

108,1987,53710

Master MeteredMaster MeteredSeparately MeteredSeparately Metered

ConcreteWood FrameStucco Flat

1 Central 1 Common Area Facility

1540 North Formosa Avenue, Los Angeles, CA 90046

M a r k e tC o m p a r a b l e s

1540 North Formosa AvenueCOMPARABLES

RENT

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7520 1/2 Fountain Ave

1615 N Martel Ave

1445 N Alta Vista Blvd

1250 N Genesee Ave

7518 Lexington Ave

1310 N Vista St

1300 N Curson Ave

7200 Hollywood Blvd

1411 N Sierra Bonita Ave

7512 Fountain Ave

1313 N Alta Vista Blvd

1320 N Martel Ave

1300 N Curson Ave

COMPARABLESRENT

ONE BEDROOM TWO BEDROOM

Property UnitsYear Built Owner/Manager Rent Rent

1540 Formosa AveLos Angeles, CA 90046

10 1963 Private OwnerOwner Managed

$1,562 $1,836

1 7520 1/2 Fountain Ave West Hollywood, CA 90046


$2,287

2 1615 N Martel Ave Los Angeles, CA 90046


$2,290

3 1445 N Alta Vista Blvd Los Angeles, CA 90046


$2,295

4 1250 N Genesee AveWest Hollywood, CA 90046


$2,300

5 7518 Lexington Ave West Hollywood, CA 90046


$2,350

6 1310 N Vista St West Hollywood, CA 90046


$2,395

7 1300 N Curson Ave West Hollywood, CA 90046


$2,650

8 7200 Hollywood BlvdLos Angeles, CA 90046

74 1953 VIVE LA $2,775

9 1411 N Sierra Bonita Ave Los Angeles, CA 90046


$2,795

10 7512 Fountain Ave West Hollywood, CA 90046


$2,800

11 1313 N Alta Vista Blvd Los Angeles, CA 90046


$2,875

12 1320 N Martel AveLos Angeles, CA 90046


$2,895

13 1300 N Curson Ave West Hollywood, CA 90046


$2,975

AVERAGE: $ $

HIGH: $2,650 $2,975

LOW: $2,287 $2,775

COMPARABLESSALE

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2)

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1937 N Bronson

7654 Fountain Avenue

1235 N Ogden Dr

1540 North Formosa Avenue

COMPARABLESSALE

PROPERTYYEAR BUILT UNITS BLDG SF PRICE CAP GRM $/UNIT $/SF CLOSED

1540 Formosa AvenueLos Angeles, CA 90046

1963 10 8,198 $3,400,000 3.7% 17.0 $340,000 $415 -

1 1937 N Bronson AveLos Angeles, CA 90068 1961 12 8,739 $4,120,000 4.0% 14.9 $343,333 $471 5/4/2020

2 7654 Fountain AveWest Hollywood, CA 90046 1962 11 10,458 $3,610,000 4.0% 16.0 $328,128 $345 6/30/2020

3 1235 N Ogden DrLos Angeles, CA 90046 1964 9 9,900 $3,395,000 3.1% - $377,222 $342 6/30/2020

Exclusively Listed By:

RICH JOHNSMultifamily Investment [email protected]

CALBRE LIC#01432215

PAVIT SINGHMultifamily Investment Advisor

818.432.1625 [email protected]

CALBRE LIC. #01332811

PROPERTYYEAR BUILT UNITS BLDG SF PRICE CAP GRM $/UNIT $/SF CLOSED

1540 Formosa AvenueLos Angeles, CA 90046

1963 10 8,198 $3,400,000 3.7% 17.0 $340,000 $415 -

1 1937 N Bronson AveLos Angeles, CA 90068 1961 12 8,739 $4,120,000 4.0% 14.9 $343,333 $471 5/4/2020

2 7654 Fountain AveWest Hollywood, CA 90046 1962 11 10,458 $3,610,000 4.0% 16.0 $328,128 $345 6/30/2020

3 1235 N Ogden DrLos Angeles, CA 90046 1964 9 9,900 $3,395,000 3.1% - $377,222 $342 6/30/2020

Documents

1540 North Formosa Avenue, Los Angeles, CA 90046