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Matthew Lehman 760 934-1110
“Rincon Professional Center”
For more information on this property www.MatthewLehmanRealEstate.com
Matthew Lehman Real Estate Disclaimer. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantees, warranties or representations. 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. Any information important to you should be verified through sources in which you feel confident.
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Presented by
Matthew Lehman Real Estate
Matthew Lehman 760 934-1110
Mammoth Lakes Office 1949 Sierra Park Road
Suite 1 Mammoth Lakes, CA 93546
More Information Available at:
www.MatthewLehmanRealEstate.com
Contents Executive Summary / Investment Highlights 3 Downtown and Old Mammoth District Map 4 Property Description 5 Downtown District 6 Rents 7 Income and Expenses 8 Rental Activity 9 Income and Expenses 11 Mammoth Residential Real Estate Market 12 Location Overview 14 Mammoth Yosemite Airport 16
“Rincon Professional Center”
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Executive Summary – Rincon Professional Center
The Rincon Professional Center is a highly visible retail location fronting on one of Mammoth Lake’s most heavily traveled corridors; Old Mammoth Road. Old Mammoth Road is home to some of the most frequented local businesses in Mammoth Lakes including Vons, Town of Mammoth Lakes, Mono County, Robertos, Eastern Sierra Community Bank. The Rincon Professional Center is unique to Mammoth L akes in that it is centrally located on Old Mammoth Road between Main Street and Vons. Old Mammoth Road enjoys a mixed concentration of public services, hotels, restaurants and shopping. Just one block to the north, “Old Mammoth Place”, a 378 unit hotel/condominium development project has been entitled and is approved for construction. This project will host a total of 481,825 square feet of building area and will include retail, restaurant, spa and conference space.
Investment Highlights
• 92 Feet of frontage on Old Mammoth Road
• 100% occupied as of 5/16/2017
• Priced far below replacement costs
• Upside potential due to below market rents
• 6,230 square feet of building area with private parking
• Adjacent to public transportation and local restaurants
Price $999,000 Improvement Size (Sq. Ft.) 6,230 Site Size .41 Acres Price per Sq. Ft. $160 Proposed Max. F.A.R 2.0 Frontage 92 feet
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Old Mammoth And Downtown Districts
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Property Description The property is improved with a two, two-story, wood frame structures currently built out for retail and office space. Zoning allows for a wide variety of commercial uses with a maximum 2.0 Floor Area Ration (FAR). The Rincon Professional Center is located within the high density Downtown Zoning District and was part of a re-zoning of all commercial zones within Mammoth Lakes. The recent rezoning of the commercial districts provided some clarity to what was previously a confusing zoning code. The Assessor’s Parcel Number for the property is 035-210-022-000 The Downtown Zoning District – Zoning Code Update Old Mammoth Road (OMR) District. The Old Mammoth Road (OMR) District is intended as an arts and culture district oriented toward medium scale commercial development along Old Mammoth Road, emphasizing community services, retail, artist galleries, office and service uses. It is intended to encourage a mix and intensity of uses in a pedestrian-scaled environment at a scale and form that is appropriate to its neighborhood context and adjacent residential uses and forms. The maximum FAR is 2.5 (per current code-but changing to 2.0). Lodging development has a maximum density of 80 rooms/acre. Residential development has a maximum density of 12 units/acre. The OMR zoning district is consistent with the Commercial 2 (C-2) land use designation of the General Plan. Update can be found at: http://www.ci.mammoth-lakes.ca.us/DocumentCenter/View/4469
Main Street Plan – Conceptual Plan Approved by Town In addition to the recent commercial rezoning, Main Street has undergone an intense public process for the conceptual redevelopment. The concept was approved by the Town of Mammoth Lakes, however was put on hold due to the State of California’s elimination of support for “Redevelopment Districts”. The Main Street Plan proposed greater pedestrian accessibility, more intense animation, improved parking, a narrower Main Street (currently 9-lanes), and much more. More details on the Main Street Redevelopment Plan can be found at: http://www.ci.mammoth-lakes.ca.us/DocumentCenter/View/4456
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Property Description – (Continued) Year Built: Public records indicate the improvements were completed in 1981. Lot dimensions: According the Mono County Assessors Map the property has 92’ feet of frontage on Old Mammoth Road. The northern edge of the property is 175.85 feet, southern property line 182.95 feet and the rear property line 98.72 feet. There is a 20’ abandoned alley easement indicted at the rear of the property. Parking: 13 open parking spaces and 9 covered parking spaces. The first floor of the rear building is covered parking and there are no lease spaces on the first floor of the rear building. Approximate Square Footage Breakdown: Total Leasable Area (per owner) 6,230 Snow Storage/Landscaping: There are 3 areas for landscaping and for the storage of snow. These areas total approximately 3,984 square feet. Improvement District: Old Mammoth Road is subject to an Assessment District for the enhancement of Old Mammoth Road. Details can be verified through the Town of Mammoth Lakes, or contact the listing agent for a PDF report from the Town of Mammoth Lakes. Assessment for this year was $1,169.44
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Current Rent Roll 5.16.2017 (Some increases in 2017, 2018 & 2019)
Unit Tenant Sq. Feet Rent/Mo Rent/Ft. NNN Lease Begin Lease End Use Front Build. Approx.
1st Floor Front Unit Russell 950 $1,400 $1.47 $0.00 10/1/2016 9/30/2018 Branded Clothing
1st Floor Rear Unit Moffett 950 $1,420 $1.49 $0.00 2/1/2017 1/31/2020 State Funded Child Dev. 2nd Floor Top Floor McGuire 1340 $1,200 $0.90 $0.00 6/1/2017 5/31/2020 Sports products Rear Building 2nd Floor Bill Green $1,510 $0.00 8/1/2015 7/31/2020 Accountant 2nd Floor Medial $500 $0.00 mo-to-mo mo-to-mo Charity 2nd Floor Kappos $850 $0.00 11/1/2015 10/31/2016 R.E. Attorney
2990 $2,860 $0.96 $0.00 Total 6230 $6,880 $1.10
Front Building -Front Unit (Russell): Lease started 10/1/16 @ $1,400 per month; Increases 10/1/17 to $1,500 per month; Ends 9/30/18, option to extend 1 year at $1,600 mo. Front Building - Rear Unit (Moffett): New 3-year Lease. 1 year at $1,420 (not exercised). Verbally agreed to a new 3-year lease with rents $1,420 in 2017, $1,500 in 2018 and $1,550 in 2019. Tenant has the right to cancel on 90 days’ notice. Front Building- Upper Floor (McGuire): New 3-Year Lease. 2017: $1,200, 2018: $1,325, 2019: $1,450.
Rear Building – Upper Floor(Greene): Current rent is $1,510 per month with annual COLA. Tenant is currently getting $100 rebate per month until new carpet is installed in the unit which should be within a couple of months. Rear Building – Upper Floor(Kappos): Started 11/1/16, current rent is $850 per month, it increases 11/1/17 to $900; ends 10/31/18 Rear Building – Upper Floor(Medical): Month to month, rent up to 2/28/17 was $500, I have noticed a rent increase to $625 as of 3/1/17, but have also offered a 3-year lease, $600 mo. 3/1/17 to 2/28/18, $650 in year 2 and $700 in year 3.
NNN Fees and CAM Costs are not being passed through to any of the existing tenants.
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Projected Rent Totals
2017 Tenant Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total Russell 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,600 1,600 1,600 18,300 Moffett 1,395 1,420 1,420 1,420 1,420 1,420 1,420 1,420 1,420 1,420 1,420 1,420 17,015 McGuire 1,000 1,000 1,000 1,000 1,000 1,200 1,200 1,200 1,200 1,200 1,200 1,200 13,400 Greene 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 18,120* Kappos 850 850 850 850 850 850 850 850 850 850 900 900 10,300 Mam.Med 500 500 500 625 625*** 625 625 625 625 625 625 625 7,125 Total 84,260
2018
Tenant Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total Russell 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600** 1,600** 1,600** 19,200 Moffett 1,420 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 17,920 McGuire 1,200 1,200 1,200 1,200 1,200 1,325 1,325 1,325 1,325 1,325 1,325 1,325 15,275 Greene 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 1,510* 18,120 Kappos 900 900 900 900 900 900 900 900 900 900 900** 900** 10,800 Mam.Med 625*** 625 625 625 625 625 625 625 625 625 625 625 7,500 Total 88,815 *Greene is receiving a $100 per month credit (off the $1,510) until I install new carpet which should occur within the next few months. Also, his rent escalates based on a COLA adjusted annually August 1, (The COLA will be in addition to the $1,510 amount).
**Lease expires and needs renewal, assuming renewal, the rent should increase by 3-5%, I am showing rent with no increase.
***Mammoth Medical is on a month to month rental, they declined to sign a new lease. Rents are shown with no increase and the space will be subject to release if they give notice and move. On releasing, I would propose a substantial increase in rent to at least $750-800.
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Income and Expenses (Revenues based on rents as of 5.16.2017-Increases pending)
Potential Gross Income $84,260
Less Vacancy and Collection Loss Allowance 0% $0
Effective Gross Income $84,260
Less Expenses (estimated 2017)
Professional Fees $600
Cleaning $780
Real Estate Taxes 1.18% $11,788
Electricity $2,300
Snow Removal Cap: $2500 $3,000
Landscaping $1,200
Gas $0
Insurance $2,191
Management 0% $0
Maintenance and Repairs 3% $2,477
Trash Disposal $2,741
Assessment District $1,169
Water and Sewer $1,323
Total Expenses $29,569
Net Operating Income $54,691
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Summary Market Rents Minimum Monthly Rent Estimated NNN Total Mammoth Mall $1.65 $0.35 $2.00 501 Old Mammoth Road – The Plaza $1.50 $0.35 $1.85 101 Old Mammoth Road $1.50 $0.35 $1.85 272 Sierra Manor Rd. $1.33 – 1.42 $0 $1.33-$1.42 436 Old Mammoth Rd. C1 $1.25 $0.80 $2.05 3069 Main Street (no longer active) $1.75 $0.50 $2.25
Summary of Nearby Rentals Below is a summary of market rents found along Main Street and Old Mammoth Road. These two districts are the most comparable areas from which to acquire market information. The Village at Mammoth District generates higher rents and NNN costs. Based on comparable rents in comparable buildings on, or near, Old Mammoth Road, rents for 325 Old Mammoth Road are below market and have been placed here intentionally to keep the building occupied and to receive tenant improvement benefit from certain tenants.
The Mammoth Mall– is a two-story center with offices above ground floor retail. The center was anchored by a Charthouse restaurant. This center is approximately 35% vacant with all but one retail suite occupied. The one available retail suite is 630 square feet in size. The center has on-site management. Part of the reasoning for the high vacancy rate in this center is that 25% of the building has been slated, and intentionally left vacant by the owner, for conversion into apartments. The Charthouse space is reported to have a Letter of Intent by a national tenant. The Plaza– is a single-story center occupied by local retailers and offices. The building has been recently remodeled and while experiencing vacancies, several of the commercial condominium units are being sold to a new owner/user. This center is somewhat unique due to its commercial condominium entitlements and 15’+ ceiling heights. Each unit is approximately 1,500 square feet with up the 3 contiguous spaces (4,500 square feet) available.
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101 Old Mammoth Road – This is an excellent corner location fronting on both Old Mammoth Road and Tavern Road. The building is currently 100% occupied by local tenants as well as Century 21 real estate. 272 Sierra Manor Road – This is a three-story mixed use building with smaller office space above ground floor storage. The building recently sold with 100% occupancy a cap rate of 7.6%. The building had been updated and provides functional working space. 436 Old Mammoth Road – C1 is currently occupied by an ATT retailer. This is a premium corner location with high exposure. Minimum rents in the suite are relatively low due to the higher than average NNN costs. This suite is 1,850 square feet in size and is in good condition. The tenant is on a 3 year NNN lease with a 10% increase at the end of the term. 3069 Main Street – was recently vacated by Bank of America (BofA). This property was occupied by BofA for nearly 40 years, and was vacated due to the changing banking business model (storefront to online). The owners of the building are also the owners of the adjacent business Footloose Sports. The BofA suite was recently available at $2.25 per square foot per month. This was a proposed gross lease and the owners have decided to keep the space through the 2017/2018 winter season. The suite is 3,465 square feet and possesses a bank vault of roughly 200 square feet.
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Income and Expenses
Property Price Sq. Feet Price/Ft. Cap Rate Sale Date 1404-1440 Tavern Road (Apartments) $4,500,000 36,759 $122.42 6.0% 4/2/2014 3221 Main Street (Restaurant) $1,595,000 (includes liq. Lic.) 4,989 $280.62 owner occ. Active 501 Old Mammoth Road (#6&7 Retail) $675,000 3,034 $222.47 N/A Pending 3183 Main Street (Retail) $1,185,000 3,929 $301,60 N/A Active 272 Sierra Manor Road $1,100,000 8,670 $126.87 7.6% 11/1/2016 4 Alpine Circle (duplex and Restaurant) $899,000 4,100 $219.27 7.70% Active 436 Old Mammoth Road (Commercial Condo Retail) $347,000 1,850 $187.57 7.50% 3/30/2014
• 3221 Main Street is located on Main Street and has an excellent frontage along this corridor. This property is an owner-occupied restaurant having been in business for 33 years.
• 3183 Main Street is a retail building also used as a restaurant in
its not so distant past. The property has excellent visibility from Main Street, a sunny patio and extensive storage on its second level.
• 501 Old Mammoth Road is a good quality retail space with high
ceilings and excellent frontage on the busy Old Mammoth Road.
• 272 Sierra Manor Road consisted of ground floor storage units with office on the 2nd and 3rd floors. The property was 100% occupied at the time of sale with all leases being month to month.
Slocums Restaurant
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Mammoth Lakes Real Estate Market
The Mammoth Lakes real estate market is divided into three primary sectors, traditional residential, resort or luxury residential (hotel, condotel, or upscale condominium), and commercial (Old Mammoth Road and Main Street with some “amenity” commercial within the Village area). Single Family Homes (Shown above) The Mammoth Lakes single family home market has been experiencing steady increases since 2011, with the most notable during 2015. The increases observed in 2015 are attributed to new homes being built by local developer John Hooper who has been driving the residential market with new home sales on the Sierra Star Golf Course.
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$200,000
$400,000
$600,000
$800,000
$1,000,000
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Single Family Homes Median PriceDoes not include USFS leases or moblie homes in leased spaces
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Condominium Market
The condominium market is the largest residential market for Mammoth Lakes. Prices for condominiums have been increasing over the same period as the single family home market, however increases have been more gradual.
Year # Sales
Avg. Price
Median Price
Avg. DOM
% Chg. in Median
Price 2005 619 $600,693 $530,000 166 2006 374 $661,703 $560,000 97 5.66% 2007 278 $651,157 $540,700 100 -3.45% 2008 206 $555,530 $475,000 148 -12.15% 2009 295 $387,292 $325,000 162 -31.58% 2010 375 $350,657 $280,000 155 -13.85% 2011 306 $300,799 $242,000 98 -13.57% 2012 298 $294,415 $244,500 180 1.03% 2013 342 $318,703 $264,000 156 7.98% 2014 248 $350,837 $295,000 156 11.74% 2015 268 $349,242 $308,700 140 16.93% 2016 304 $343,980 $299,750 155 -2.90%
The Lodges
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Condo Median Price
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Location Overview The Rincon Professional Center is located in the Town of Mammoth Lakes, County of Mono in the State of California. The Town of Mammoth Lakes is known as the gateway to the Eastern Sierras and Mammoth Mountain Ski Area (MMSA). Mammoth is located in the heart of California's Sierra Nevada Mountain Range, approximately 310 miles north of Los Angeles, 170 miles south of Reno, Nevada and only 40 minutes from Yosemite National Park's eastern entrance. Mono County Mono County was created by a Legislature Act on April 21, 1861, and was the first of the mining counties to be organized on the eastern slope of the Sierra Nevada Mountains in the state of California. The county seat is in the town of Bridgeport, where most of the county offices are located in the historic courthouse built in 1880. The remaining County offices and courts are located in Mammoth Lakes, Ca. Located in the eastern-central section of California, Mono County is 108 miles in length, reaching from the Alpine County border to the north to the Inyo County border to the south. The County’s width is 38 miles from the
crest of the mighty Sierras to the Nevada state line to the east. Its land area is 3,030 square miles,
80% of which is federally owned. Much of this land is contained in the Inyo and Toiyabe National Forests. The summer and fall visitors enjoy many activities such as fishing, hunting, camping, hiking and some of the most spectacular scenery found in the Sierra Nevada Mountains. Winter visitors engage in skiing, snowmobiling and other various winter sports at two of the finest winter skiing areas in the country (Mammoth and June Ski Mountains).
These extraordinary mountain boundaries offer precipitous canyons, broad valleys, many crystal clear lakes of glacial formation and a unique sage brush covered semi-desert land. The Sierra Nevada boundary is dominated by three towering peaks (Mt. Dana, Mt. Lyell and Castle Peak) which rise to an elevation exceeding 13,000 feet. The county’s drainage is realized by the East and West Walker rivers to the north, the Owens River to the south and many innumerable Sierra streams.
Driving Distances to Major Areas Miles Los Angeles 310 Orange County 341 San Diego 396 Las Vegas 308 Reno, Nevada 170 San Francisco (Winter Route) 329 Santa Barbara 363 Yosemite Valley 103
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Mammoth Lakes, California The Town of Mammoth Lakes ("Mammoth"), home to Mammoth Mountain Ski Area ("MMSA"), is located in the heart of California's majestic Sierra Nevada mountain range. Mammoth's unique location makes it a natural gateway to the backcountry of the Sierras, including Yosemite National Park ("Yosemite"), Devil's Postpile National Monument, Bristlecone National Forest, Mt. Whitney (the highest point in the continental United States), and Death Valley (the lowest point in the continental United States). Mammoth is bordered by Forest Service land on all sides and with boundaries of the town effectively set and not likely to experience substantial, if any change. These set boundaries limit the availability of new real estate and firmly affect the town real estate market to the principals of supply and demand. MMSA, located within the town of Mammoth Lakes, is the major winter tourist attraction in the area and has long played a major role in the Eastern Sierra economy. Mammoth estimates 35,000 to 40,000 skiers visit the Mammoth Lakes area on peak winter weekends and holidays. Most of the winter tourists are reported to originate from Southern California, averaging 3.4 nightly stays during a visit. Hiking, camping, fishing and nearby Yosemite are the primary draws of tourism during the late spring, summer and early fall months.
Mammoth Mountain Ski Area (MMSA) MMSA is the closest major ski resort to Southern California's 23 million residents which provide approximately 85% of MMSA's visitors. From a peak elevation of 11,053 feet, MMSA has a vertical drop of 3,100 feet with more than 3,500 acres of skiable terrain. The Mountain’s unusual geography and massive snowfalls, combined with typical California sunshine, create a unique mountain environment. Recent news for 2014/2015 came from the owners of MMSA with the purchase of “Big Bear” and “Snow Summit” ski resorts in Southern California. MMSA now offers skiers and snowboarders the opportunity to ski/ride any of its four mountain destinations on a single pass. Mammoth Mountain Ski Area also owns June Mountain, 20 minutes to the north.
In addition to capitalizing on winter events, MMSA and the Town of Mammoth Lakes have opted to take advantage summer activities. MMSA recently revived the Kamikaze Bike Games, an event originating on Mammoth Mountain and revolutionized on-mountain biking experience as we know it. Mammoth Mountain Ski Area is also in the final stages completing a land exchange located at the Main Lodge area of the resort. Through the exchange,
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MMSA hopes to convert 20 acres of Forest Service lease land fee simple ownership. Finalization of this exchange will allow MMSA to enhance and build new hotels, as well as commercial and residential uses, replacing more dated facilities. The vision for the future is a village community for those enjoying the amenities provided by the resort.
Mammoth/Yosemite Airport
The introduction of commercial air service in 2006 was the catalyst needed to elevate Mammoth Lakes to a new service level. Through new air service, Mammoth Lakes is now able to draw guests previously unable to visit because of geographic limitations. With visitors now originating from out of California and the United States, guests are expected to stay longer than the weekend travelers presently rooting from Southern California. The widely anticipated and imminent arrival of commercial air service into the Mammoth Lakes is affording growth opportunities not available in competing mountain resorts in North America. Air service will have a dramatic financial effect on the Town of Mammoth Lakes.
Air service is viewed as a means to help stabilize Mammoth’s economy through mid-week visitations; provide a broader exposure to the long-term visitor marketplace; and assist in controlling the growth rate in traffic and air quality.
Air Service into the Future
Current airport infrastructure limits expansion much further beyond its current level. As a result, the Town of Mammoth Lakes has been coordinating with the Federal Aviation Administration (FAA) on a revised Airport Layout Plan (ALP) that will accommodate future air service needs. The new ALP calls for expanding infratructure development and a 40,000 square foot air terminal, of which the FAA will financially partner with the Town of Mammoth Lakes.
TBID (Tourism Business Incentive District)
After nearly a year of organizing with business and community leaders a TBID was officially passed in the form of majority vote by local business and town government. Assessments from the TBID will be directed to specific areas of marketing as well air subsidy.
Business Type Annual Assessment Rate Lodging 1% of Gross Revenue
Retail Type 1 1.5% of Gross Sales
Restaurant Type 1 1.5% of Gross Sales
Ski Resorts 2% of Lift Ticket and Ski School Sales
Retail Type 2 $500 per year (Appeal required)
Restaurant Type 2 $500 per year (Appeal required)
Retail Type 3 $50 per year (Appeal required)
Restaurant Type 3 $50 per year (Appeal required)
Matthew Lehman Real Estate Disclaimer. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantees, warranties or representations. 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. Any information important to you should be verified through sources in which you feel confident.
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