1623 Arlington Avenue, Torrance, CA 90501€¦ · Matthews Real Estate Investment Services is proud to offer 1623 Arlington Avenue in Torrance, California. ... FINANCIAL OVERVIEW

ARLINGTON AVETORRANCE, CA1623

1O F F E R I N G M E M O R A N D U M

LISTED BY

NABIL AWADAAssociate

D: (310) 844-9362 M: (310) 469-2974E: [email protected] No. 02046840 (CA)

DAVID HARRINGTON EVP & Managing Director


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


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PROPERTY OVERVIEW

Matthews Real Estate Investment Services is proud to offer 1623 Arlington Avenue in Torrance, California. This 10-unit apartment building is an opportunity for an investor to purchase a multifamily property in the heart of the Historic Old Town. Tenants appreciate and enjoy the quiet residential neighborhood while still being conveniently located minutes away from parks, restaurants, shops, and the Del Amo Fashion Center.

The property consists of a desirable unit mix of (4) one-bedroom/one-bathroom and (6) studio units. One-bedroom units in this immediate area are currently renting from $1600 to $1800 per month. This offering presents an opportunity for a new investor to capitalize on the tight rental market and high rents in this neighborhood by implementing a strategic unit interior renovation plan, which will upgrade the units and allow the buyer to command top of the market rents. Rents at the high end of the range result in 28% rent upside potential.

PROPERTY HIGHLIGHTS

» 10 Units | Built in 1961 » Gross Building Square Footage of 4,807. » Consists of (4) One Bedroom/One Bathroom and (6) Studio units. » (10) One-Car Garages with Alley-Access. » All-Electric Building – Individually Metered for Electricity. » Laundry Room On-Site. » Lot Size of 7,299 Square Feet. » TORR-MD Zoning.

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PHYSICAL DESCRIPTION

GROSS SF

4,807

$AVG SF PER UNIT

481

APN

7355-019-002

YEAR BUILT

1961 7,299 SF

LOT SIZENO. OF UNITS

10

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L O C A T I O NO V E R V I E W


TORRANCE, CA

Torrance is a city in the South Bay (southwestern) region of Los Angeles County, California. Torrance has 1.5 miles of beaches on the Pacific Ocean. Since its incorporation in 1921, Torrance has grown to a 2013 estimated population of 147,000. This residential and light high-tech industries city has 90,000 street trees and 30 city parks. Torrance is the birthplace of the American Youth Soccer Organization (AYSO). In addition, Torrance has the second-highest percentage of residents of Japanese ancestry in California (8.9%).

Known for its family-friendliness, great public school system, and low crime rates, the city consistently ranks among the safest cities in Los Angeles County and a great place to live. In 2018, Torrance was ranked the #3 Healthiest City in America, the #12 Best City for Outdoor Activities in America, and the #13 Best City to Retire in America.

With median household income and median home values well above and unemployment rates well below the state averages, Torrance has a strong economy. The largest industries in Torrance are Manufacturing and Professional, Scientific, and Technical Services.

Population 1 Mile 3 Mile 5 Mile

2024 Projection 29,643 218,675 590,945

2019 Estimate 27,876 210,400 570,860

2010 Census 24,136 201,576 551,092

% Change: 2010 to 2019 6.34% 3.93% 3.52%

% Change: 2019 to 2024 3.99% 2.94% 2.73%

Households 1 Mile 3 Mile 5 Mile

2024 Projection 11,057 78,046 210,996

2019 Estimate 10,657 75,834 205,366

2010 Census 10,105 73,139 198,635

% Change: 2010 to 2019 5.46% 3.69% 3.39%

% Change: 2019 to 2024 3.75% 2.92% 2.74%

Income 1 Mile 3 Mile 5 Mile

Average HH Income $98,506 $105,149 $115,056

DEMOGRAPHICS

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LOS ANGELES MSA

As the second largest metropolitan area in the United States, the Los Angeles Metropolitan Statistical Area, or the Southland, consists of both Los Angeles and Orange Counties. These two counties also make up the inner core of the Greater Los Angeles urbanized region. Los Angeles County, one of California’s original 27 counties, is one of the nation’s largest counties both in land area and population. With nearly 10 million residents, the Los Angeles population accounts for approximately 27 percent of California’s population. The area continues to grow, especially given the vigorous residential development in downtown LA.

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ECONOMY

Famously known for a heavy entertainment industry based economy, the Los Angeles metropolitan area attracts many visitors. Consequently, leisure and hospitality is also a leading industry and has experienced recent growth in employment. It is now the sixth largest hotel market in the United States. The Los Angeles-Orange County metro area alone has an enormous economy with an estimated $866 billion GMP. Together with Ventura, Riverside and San Bernardino Counties, Orange and Los Angeles county make up the Greater Los Angeles Area, a combined statistical area that is the third largest economic center in the world after the Greater Tokyo and New York metropolitan areas.

The LA economy is famously and heavily based on the entertainment industry, with a particular focus on television, motion pictures, interactive games, and recorded music - the Hollywood district of Los Angeles and its surrounding areas are known as the “Movie Capital of the United States” due to the region’s extreme commercial and historical importance to the American motion picture industry. Other significant sectors include shipping/ international trade - particularly at the adjacent Port of Los Angeles and Port of Long Beach, together comprising the United States’ busiest seaport - as well as aerospace, technology, petroleum, fashion and apparel, and tourism.

TOP EMPLOYERS

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F I N A N C I A LO V E R V I E W


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1623 Arlington AveTorrance, CA 90501

Number of Units: 10

Year Built: 1961

APN: 7355-019-002

Gross Sq. Ft.: 4,807

Average S.F. Per Unit: 481

Lot Size (S.F.): 7,299

Zoning TORR-MD

I N V E S T M E N T S U M M A R Y

Price Price/Unit

Price/Foot

CURRENT PRO FORMA MARKETCap Rate GRM Cap Rate GRM Cap Rate GRM

$2,600,000 $260,000 $540.88 3.75% 17.00 3.75% 17.00 5.28% 13.29

TotalUnits

Unit Mix

Unit Mix%

CurrentAvg Rent

Current Monthly Rent

Market MarketRent Monthly Rent

6 studio 60% $1,103 $6,618 $1,500 $9,000

4 1+1 40% $1,508 $6,030 $1,800 $7,200

Scheduled Monthly Rent: $12,648 $16,200

Scheduled Yearly Rent: $151,776 $194,400

U N I T M I X

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Current Pro Forma MarketScheduled Gross Income: $151,776 $151,776 Current Rent $194,400 28% Upside

Less Vacancy Reserve: $4,553 3.0% $4,553 3.0% $5,832 3.0%

Laundry Income: Est. $100/month $1,200 $1,200 $1,200

Gross Operating Income: $148,423 $148,423 $189,768

Expenses: $50,889 33.53% $50,889 33.53% $52,543 27.03% *

Net Operating Income: $97,533 $97,533 $137,225

Loan Payments: $81,300 $81,300 $81,300

Pre-Tax Cash Flow: $16,233 1.42% $16,233 1.42% $55,925 4.88% **

Plus Principal Reduction: $26,507 $26,507 $26,507

Total Return Before Taxes: $42,740 3.73% $42,740 3.73% $82,431 7.19% *** As a percent of Scheduled Gross Income** As a percent of Down Payment

A N N U A L I Z E D O P E R A T I N G D A T A

% of SGI Current Per Unit * Pro Forma Per Unit Market Per Unit % of SGIProperty Taxes 1.120% x Sale Price 19.62% $29,120 $2,912 $29,120 $2,912 $29,120 $2,912 15.0%Off-Site Management 4.0% x GOI 4.00% $5,937 $594 $5,937 $594 $7,591 $759 3.9%Insurance $0.35 x Gross Square Feet 1.13% $1,682 $168 $1,682 $168 $1,682 $168 0.9%Repairs & Maintenance $500 x Units 3.37% $5,000 $500 $5,000 $500 $5,000 $500 2.6%Landscaping $120 x Units 0.81% $1,200 $120 $1,200 $120 $1,200 $120 0.6%Utilities $400 x Units 2.70% $4,000 $400 $4,000 $400 $4,000 $400 2.1%Trash $270 x Units 1.82% $2,700 $270 $2,700 $270 $2,700 $270 1.4%General Administration $125 x Units 0.84% $1,250 $125 $1,250 $125 $1,250 $125 0.6%Total Expenses 34.29% $50,889 $5,089 $50,889 $5,089 $52,543 $5,254 27.0%

Current Per Unit % of SGINon-controllable expenses: Taxes, Ins., Reserves: $30,802 $3,080 20.3%Total Expense without Taxes $21,769 $2,177 14.34%

P R O F O R M A A N N U A L O P E R A T I N G E X P E N S E S

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# Unit Mix Rent MarketRent

1 A 1+1 $1,299 $1,800

2 B 1+1 $1,407 $1,800

3 C 1+1 $1,674 $1,800

4 D 1+1 $1,650 $1,800

5 E studio $1,083 $1,500

6 F studio $1,191 $1,500

7 G studio $1,083 $1,500

8 H studio $1,083 $1,500

9 J studio $1,150 $1,500

10 K studio $1,028 $1,500

Totals10

$12,648 $16,200

Averages $1,265 $1,620

*Current Rents Effective March 6, 2020

R E N T R O L L

Loan Amount: $1,454,000 Terms: 5 Year Fixed

Down Payment: 44% $1,146,000 Amortization: 30 Years

Yearly Pmt: $81,300 Interest: 3.80%

Debt Coverage: 1.20 Monthly Payment: $6,775

F I N A N C I N G

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Address Units Yr Built Square Feet Price Price/Unit Price/Foot Cap Rate GRM Sold Date Unit Mix

1623 Arlington Ave,Torrance, CA 90501 10 1961 4,807 $2,600,000 $260,000 $540.88 3.75% 17.00 None (4) - 1+1

(6) - Studio

2213 Cabrillo Ave,Torrance, CA 90501 9 1924 4,125 $2,500,000 $277,778 $606.06 4.35% 17.99 11/14/2017 (1) - 2+1

(8) - 1+1

21023-21107 Amie Ave, Torrance, CA 90503 61 1961 43,575 $16,750,000 $274,590 $384.39 2.79% 19.45 8/24/2018

(2) - 2+2 (10) - 2+1 (37) - 1+1

(12) - Studio

20308 Madison Street, Torrance, CA 90503 40 1969 29,212 $13,100,000 $327,500 $448.45 3.45% 17.08 11/1/2018 (16) - 2+1

(24) - 2+2

2501 W 182nd Street,Torrance, CA 90504 9 1959 6,671 $2,500,000 $277,778 $374.76 2.66% 19.07 3/14/2019 (8) - 2+1

(1) - Studio

3444-50 Redondo Beach Blvd, Torrance, CA 90504 10 1956 7,088 $2,625,000 $262,500 $370.34 2.92% 22.16 4/30/2019 (4) - 2+1

(6) - 1+1

21013 Reynolds Drive,Torrance, CA 90503 8 1961 4,350 $2,930,000 $366,250 $673.56 3.91% 17.97 5/21/2019 (8) - 1+1

20927 Amie Ave,Torrance, CA 90503 18 1962 13,593 $5,400,000 $300,000 $397.26 2.61% 19.39 5/29/2019 (3) - 2+2

(15) - 1+1

Averages $298,057 $464.98 3.31% 18.76

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SA L E S COM PA R A B L E S

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R E N T COM PA R A B L E S: ST U D I O UN I T S

Address # of Units Year Built Floor Plan Asking Rent Square Feet Rent/SF

1623 Arlington Ave,Torrance, CA 90501 10 1959 studio $1,103 - -

1630 Arlington Ave,Torrance, CA 90501 6 1930 studio $1,395 462 $3.02

1617 Arlington Ave,Torrance, CA 90501 11 1923 studio $1,975 - -

23611 Arlington Ave,Torrance, CA 90501 40 1963 studio $1,345 450 $2.99

2270 Sepulveda Blvd,Torrance, CA 90501 105 1964 studio $1,395 400 $3.49

Averages $1,528 437 $3.17

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E IMPERIAL AVEEL SEGUNDO, CA720

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R E N T COM PA R A B L E S: ON E-B E D RO OM UN I T S

Address # of Units Year Built Floor Plan Asking Rent Square Feet Rent/SF

1623 Arlington Ave, Torrance, CA 90501 10 1959 1+1 $1,508 - -

23520 Arlington Ave,Torrance, CA 90501 7 1959 1+1 $1,650 400 $4.13

814 Sartori Ave,Torrance, CA 90501 10 1959 1+1 $1,795 800 $2.24

1617 Arlington Ave,Torrance, CA 90501 11 1923 1+1 $1,895 - -

2727 Cabrillo Ave,Torrance, CA 90501 12 1958 1+1 $1,600 700 $2.29

921 Arlington Ave,Torrance, CA 90501 41 1963 1+1 $1,690 600 $2.82

Averages $1,726 625 $2.87

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This Offering Memorandum contains select information pertaining to the business and affairs of 1623 Arlington Avenue, Torrance, CA 90501 (“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 MS of affairs of the Property or constitute an indication that there has been no change in the MS of affairs of the Property since the date this Offering Memorandum.

CONFIDENTIALITY AGREEMENT & DISCLAIMER

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

™


LISTED BY

NABIL AWADAAssociate


DAVID HARRINGTON EVP & Managing Director


Documents

1623 Arlington Avenue, Torrance, CA 90501€¦ · Matthews Real Estate Investment Services is proud to offer 1623 Arlington Avenue in Torrance, California. ... FINANCIAL OVERVIEW