Newport|Wiltonevaluating a possible purchase of the real property. The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers

1650 NEWPORT AVENUE

LONG BEACH, CA

Newport|Wilton

Ca

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: : OFFER ING MEMORANDUM

: : MULT I - FAMILY INVESTMENT OPPORTUNITY

Fo r more i n fo rma t i on , con ta c t :

: : Jack Levis Senior Associate +1 310 363 4919 [email protected] Lic. 01886278

: : Matt LevisAssociate +1 310 363 4787 [email protected] Lic. 01900634

NEWPORT/WILTON | A f f i l i a t ed Bus ine s s D i s c l o su re and Con f i den t i a l i t y Ag reemen t

CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing interests in the same transaction. For example, this Memorandum may be received by our Affiliates, including CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the “Property”) may submit an offer to purchase the Property and may be the successful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will act in the best interest of the client(s) it represents in the transaction described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum.

This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property.

This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the owner of the Property (the “Owner”), to be all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property

will be made available to interested and qualified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner.

Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, Affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property.

The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived.

By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc.

If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc.

© 2014 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. …1650NewportAve_OM_v05ED.indd

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E X E C U T I V E S U M M A RY

The Newport Wilton property is a pristine 21-unit apartment

complex located in Long Beach, California. The building

was developed in 1962 with a complete remodeling done in

2012. The building features one, two, and three bedroom

units with a courtyard, laundry facility, and 14 garages

for extra income. This unit mix offers functional living and

demands top of the market rent to a variety of possible

tenants. The rehabbed units feature fully equipped kitchens,

spacious closets, living rooms, and large bedrooms.

The recent remodel costing approximately $400,000

includes new stucco, a new roof, new windows, exterior

lighting, and premium finishes inside the units. The deck

ways were all repainted and the front doors were also

replaced, creating the ultimate living environment for

tenants. A full irrigation and drainage system was installed

and a multi-camera monitoring system was added to

ensure security for the tenants and the property. In addition

to these upgrades, FIOS was installed into all of the units.

This installation has been well received in the market,

commanding rental premiums and further capitalizing on

the desirable position within the submarket.

Newport Wilton is nestled within the east side of Long Beach

off of Redondo Avenue, providing easy access to both the

710 and 405 freeways. This advantageous location appeals

to residents looking to commute to LA or Orange County.

Residents reap the benefits of a comfortable setting and

immediate access to the region’s primary transportation

routes – an attractive combination that few apartment

buildings can replicate.

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OFFER SUMMARY

Asking Price: $3,750,000 Physical Address 1650 Newport Avenue

Long Beach, CA

Number of Units 21

Cost Per Unit: $178,571

Cap Rate: 4.90%

Gross Rent Multiplier: 12.48

Price Per foot: $204

Building Area: ± 18,309

Land Area: ± 12,504

Year Built: 1962

Recent Capital Improvements: 2012

Parking: 14 Garages

Laundry: Yes

Zoning: LBR4R

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C A P I TA L I M P R OV E M E N T S

• Sandblasted old stucco and a building designer created a new contemporary finish.

• Replaced all windows

• Modified railings to meet height and gap requirements

• Repainted deck ways

• Replaced all front doors with complete waterproofing

• Replaced all three roofs

• Replaced all gutters

• Replaced fascia with stucco

• Installed multi-camera monitoring system

• Replaced all garage doors

• Installed custom signage throughout the building

• Replaced all mailboxes

• Installed full irrigation and drainage system throughout the property

• Replaced gated iron fence with stucco gateway with steel shade lighting

• Installed ADA compliant access ramp

• Installed new channel drain along Wilton side of property

• Replaced all exterior lighting

• Installed FIOS to all units

• Installed DirecTV MDU system providing a centralized dish system on the roof to avoid additional installation of external dish/hardware

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Located in the highly desirable eastside circle area of Long

Beach, this immaculate building offers the highest quality

of living for tenants. In close proximity to California State

University of Long Beach and the VA hospital, it also has

easy to access to I-405 and 22 Freeways. The Eastside/

Circle Area has a mix of single family homes, multifamily

apartments, and condominiums, offering residents a diverse

living community. In addition, Recreational Park & Golf

Course and numerous restaurants and stores are all close

by. The location provides tenants with convenient access

to employers throughout Los Angeles County and Orange

County.

The subject property is a garden style apartment building

consisting of one 3-bedroom, 18 2-bedroom, and two

1-bedroom units. The property is separately metered

for gas and electric, keeping utility costs at a minimum.

There is a great value add component with the popular 2

bedroom units. They make up 85% of the building with an

average rent of $1,118 and highest rent of $1,225. With

no section-8 housing assisted rents, there is a 10% rent

increase proven available. Annualized, this is upwards of

$23,000 of upside potential for the new owner with roll

over. Currently, the management company has an applicant

in at $1,295 and with rental demand in this location studies

show this building has upside potential of up to $45,000

annually. The unit mix and parking / laundry onsite allows

for tenant stability in this quiet cul-de-sac.

THE INVESTMENT

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LO C AT I O N M A P A E R I A L

1650 NEWPORT AVE

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PROPERTY ANALYSIS

SUMMARY

Price: $3,750,000Down Payment: 30% $1,125,000 Number of Units: 21Cost per Unit: $178,571 Current GRM: 12.48 Market GRM: 10.85

Current CAP: 4.90%Market CAP: 6.04%Approximate Age of Property: 1962Approximate Lot Size: 12,504 Approximate Net RSF: 18,309 Cost per RSF: $204.82

PROPOSED FINANCING:

First Loan Amount $2,625,000

Term: 3.81% 5 Yrs Fixed360 months amortization due in 30 years.

Payment per month: $12,246.33

Principal deduction per year: $47,771.93

ANNUALIZED OPERATING DATA

Current Rents Market RentsScheduled Gross Income: $300,528 $345,480

Less Vacancy Rate Reserve: 5% 14,276 5% 16,326 Gross Operating Income: 286,252 329,154 Less Expenses: 34.1% 102,498 29.7% 102,498 Net Operating Income: $183,753 $226,656 Less Loan Payments: 146,956 146,956 Pre-Tax Cash Flow: 3.3% 36,797 7.1% 79,700 Principal Reduction: 47,772 47,772 Total Return Before Taxes: 7.5% $84,569 11.3% $127,472

ANUALIZED EXPENSES

Taxes $44,541 Insurance $4,399 Utilities $11,704 R & M $14,388 Mgmt $12,021

Pest $1,097 On site $6,900 Landscape $1,080 Legal $1,724 Lic. / Permit $1,030 Misc./ Cleaning $3,614

Total Expenses: $102,498 Per Net Sq. Ft.: $ 5.60 Per Unit: $4,881

SCHEDULED INCOME CURRENT RENTS MARKET RENTS

Number of Units Bd/Ba Approx SFMonthly Avg

RentMonthly Income Monthly Rent

Monthly Income

18 2/1 $1,118 $20,124 $1,295 $23,310

1 3/2 $1,750 $1,750 $1,900 $1,900

2 1/1 $960 $1,920 $1,000 $2,000

Total Rent $23,794 $27,210

Laundry: $250 $250

Other Income: Parking $1,000 $1,330

Monthly Scheduled Gross Income: $25,044 $28,790

Annual Scheduled Gross Income: $300,528 $345,480

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RENT ROLL

UNIT NAME TYPE RENT STATUSUnit #01 2 BR 1 BA $1,150.00 Occupied

Unit #02* 2 BR 1 BA $1,025.00 Occupied

Unit #03 2 BR 1 BA $1,095.00 Occupied





Unit #08 1 BR 1 BA $995.00 Occupied

Unit #09 2BR 1 BA $1,150.00 Occupied








Unit #18 1 BR 1 BA $925.00 Occupied





Gar #01 1 CAR GARAGE $75.00 Occupied











Gar #12 1 CAR GARAGE $0 Vacant


Gar #14 1 CAR GARAGE ** Occupied

* Resident Manager receives $575 monthly discount off of the Current Rent as part of compensation.** Use of the garage is included in the residential rent of Unit 22 with a current lease in place.

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DEBT ANALYSIS

MARKET LOAN

Loan Amount $2,625,000

Loan to Value 70%

Loan Term 5-year fixed/30-year term

Amortization Period 30 years

Interest Rate 3.81%

Monthly Loan Payment $12,246.33

Minimum Debt Coverage Ratio 1.15x

Origination Fee 1%

**Leveraged analysis is based on financing that a particular investor may or may not be able to obtain.

CBRE DEBT & STRUCTURED FINANCE

CBRE Debt & Structured Finance (DSF) is a division of CBRE , Inc.

In the U.S., DEF represents approximately 300 lenders including:

banks, life insurance companies, pension funds, CMBS lenders

and a variety of other lending sources. DEF also acts as a

correspondent for over 200 life insurance companies. The Quote

above is an approximation of available terms. For customized

debt quotations, please contact:

: : Shaun R. Moothart Vice President Debt & Structured Finance Lic. 01773201 +1 949 509 2111 [email protected]

MARKET LOAN


Loan to Value 70%



Interest Rate 3.2%



Origination Fee 1%

**Leveraged analysis is based on financing that a particular investor may or may not be able to obtain.

MARKET LOAN


Loan to Value 70%



Interest Rate 4.18%



Origination Fee 1%

**Leveraged analysis is based on fi nancing that a particular investor may or may not be able to obtain.

RESOURCES

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S A L E S C O M PA R A B L E S

ADDRESSYEAR BUILT UNITS STUDIOS

1 BED

2 BEDS

3 BEDS PRICE

PRICE PER UNIT

PRICE PER SF GRM CAP SALE DATE

SUBJECT PROPERTY1650 Newport AveLong Beach

1962 21 0 2 18 1 $3,750,000 $178,541 $204 12.48 4.90 N/A

1. 340-350 Wisconsin AveLong Beach

1962 16 0 4 6 6 $3,000,000 $187,500 $217 11.65 5.4 6/17/14

2. 1530 Park AveLong Beach

1963 14 1 0 12 1 $3,200,000 $228,571 $253 12.67 6.8 3/25/14

3. 900 Loma AveLong Beach

1974 14 2 2 10 0 $2,700,000 $192,857 $264 13.1 4.6 3/6/14

4. 441 Nebraska AveLong Beach

1987 29 0 0 29 0 $4,800,000 $165,517 $184 10.6 6 2/28/14

5. 1075 Obispo AveLong Beach

1963 9 0 0 9 0 $1,450,000 $161,111 $190 12.7 5.3 2/26/14

6. 3341 E Wilton StLong Beach

1986 6 0 0 6 0 $1,110,000 $185,000 $209 13.4 5.1 11/6/13

7. 1700-1702 Park AveLong Beach

1949 5 0 0 5 0 $915,000 $183,000 $200 11.34 6 10/21/13

8. 4501 N Bellflower BlvdLong Beach

1961 18 0 5 12 1 $3,150,000 $175,000 $217 11.2 6 10/9/13

9. 911 Rose Ave (2 Properties)Long Beach

1963 24 0 2 22 0 $2,410,000 $150,625 $190 9.6 6 10/1/13

10. 1535 Loma AveLong Beach

1963 8 0 2 5 1 $1,323,000 $165,375 $166 13.81 5.35 9/26/13

AVERAGE $179,456 $209

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

© 2014 CBRE Limited. Data © TeleAtlas, Google, AerialExpress, DigitalGlobe, Landiscor, USGS, i-cubed. The information contained herein (the “Information”) is intended for informational purposes only and should not be relied upon by recipients hereof. Although the Information is believed to be correct, its accuracy, correctness or completeness cannot be guaranteed and has not been verified byeither CBRE Limited or any of its affiliates (CBRE Limited and its affiliates are collectively referred to herein as “CBRE”). CBRE neither guarantees, warrants nor assumes any responsibility or liability of any kind with respect to the accuracy, correctness, completeness, or suitability of, or decisions based upon or in connection with, the Information. The recipient of the Information should take suchsteps as the recipient may deem appropriate with respect to using the Information. The Information may change and any property described herein may be withdrawn from the market at any time without notice or obligation of any kind on the part of CBRE. The Information is protected by copyright and shall be fully enforced.

Layout ID:L01 MapId:1876846

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CITY OF LONG BEACH

2013 Population 482,609

2013 Total Households 172,419

2013 Median Household Income: $58,465

2013 Average Household Income: $76,918

Median Age: 33.7

LONG BEACH

The City of Long Beach is the second largest city in Los Angeles

County and the seventh largest city in California, with a 2013

population of 482,609 and an average household income

of $76,918. Because the city boasts an average home value

of $441,600, many households are priced out of the home

ownership market. Consequently, over 60 percent of households

reside in renter-occupied housing and the demand for

multifamily housing is expected to remain strong. Within a short

distance of the subject property, there are over 3,000 businesses

that employ over 30,000 people. The service industry, a prime

employment provider for the renter demographic, is the main

source of employment. This allows renters to work just a short

commute away from their residence.

PORT ACTIVITY

The Port Of Long Beach and the Port of Los Angeles, combine

to represent the eighth busiest container port in the world. They

are responsible for producing jobs, generating tax revenue, and

supporting retail and manufacturing businesses. Annually, the

Ports ship more than 66 million metric tons of cargo worth over

$95 billion. Combining to make the busiest port in the United

States, the Ports of Long Beach and Los Angeles have a robust

economic impact on the area.

• Close to $5.6 billion a year in state and local tax revenues

generated

DEMOGRAPHICS

17 16

• The Ports support more than 30,000 jobs in Long Beach and

230,000 jobs in the City of Los Angeles. Over $14 billion in

related wages.

• Just shy of $50 billion in direct and indirect sales annually

TRANSPORTATION

Long Beach is served by Interstate 405 (San Diego Freeway)

and Interstate 710 (Long Beach Freeway) and the subject

property has outstanding access to both freeways. Convenient

major surface streets provide easy access to surrounding areas.

LA Metro’s light rail system is the second busiest light rail

transit system in the United States, with over 150,000 average

weekday passenger trips. The Metro Blue line provides the Long

Beach community with direct service between Downtown Long

Beach and Downtown Los Angeles and the Long Beach Transit

provides local public transportation services within Long Beach,

Lakewood, and Signal Hill.

MULTIFAMILY MARKET OVERVIEW

• Multifamily demand continues to soar and is providing a

steady expansion in multifamily rents that is expected to

continue over the next five years

• On a national scale, a combination of improving job

growth and a rising propensity to rent caused California

to have the strongest occupancy gains over the last 12

months

• Multifamily fundamentals are expanding at a strong

pace, with the rent growth of higher-quality product

continuing to beat the expectations of property owners

and managers

• Rentable multifamily completions are estimated to peak

in 2015 and to moderate slightly in the subsequent

years, leading to an increase in rental rates

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LO N G B E AC H R E N TA L A N D A B S O R P T I O N T R E N D S

LEASING UNITS SURVEY 5-YEAR AVERAGE

Vacant Units 837 985

Vacancy Rate 3.5% 4.1%

12 Mo. Absorption Units 118 236

Rents SURVEY 5-YEAR AVERAGE

Studio Asking Rent $833 $754

1 Bed Asking Rent $1,125 $1014

2 Bed Asking Rent $1,429 $1,270

3+ Bed Asking Rent $1,483 $1,283

Concessions 2.0% 3.2%

Source: CBRE Research

6.5%

6.0%

55%

5.0%

4.5%

4.0%

3.5%

3.0%

2.5%2009 2010 2011 2012 2013 2014

500

400

300

200

100

0

-1002009 2011 2012 2013 20142010

VACANCY RATE ABSORPTION UNITS

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F o r more i n fo rma t i on , con ta c t :

: : Jack Levis Senior Associate +1 310 363 4919 [email protected] Lic. 01886278

: : Matt LevisAssociate +1 310 363 4787 [email protected] Lic. 01900634

Documents

Newport|Wiltonevaluating a possible purchase of the real property. The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers