O F F E R I N G M E M O R A N D U M 1155 S GRAND AVE LOS ... · the South Park District of Downtown...

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

EVOCourtyard

1155 S GRAND AVE | LOS ANGELES, CALIFORNIA

N O N - E N D O R S E M E N T & D I S C L A I M E R N O T I C E

C O N F I D E N T I A L I T Y & D I S C L A I M E R

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it

from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure

has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject

property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and

makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property,

the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with

State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s

plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources

we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap

conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the

information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of

Marcus & Millichap Real Estate Investment Services, Inc.

© 2019 Marcus & Millichap. All rights reserved

N O N - E N D O R S E M E N T N O T I C EMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of

any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap,

its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant

lessee information about this listing to prospective customers.

A L L P R O P E R T Y S H O W I N G S A R E B Y A P P O I N T M E N T O N LY.

P L E A S E C O N S U LT Y O U R M A R C U S & M I L L I C H A P A G E N T F O R M O R E D E TA I L S .

PRESENTED BY

MARTIN PORTERCA DRE Broker License # 00861399

(562) 257-1233

PROPERTY DESCRIPTION

Marcus & Millichap REIS is pleased to present the EVO Courtyard located at 1155 South Grand Avenue, Los Angeles, California. The EVO Courtyard contains approximately 4,570 square feet and is a portion of the ground level of EVO South a 23 story 311 condominium unit luxury mixed-use project completed in 2008. EVO South is located at the Northwest corner of 12th Street and South Grand Avenue in the South Park District of Downtown Los Angeles. The projects amenities include garage parking, a rooftop pool, fitness center, concierge service and 24-Hour security. LA Live, Staples Center and the Downtown Core are all within a short walk of the property. Regionally, the nearby Expo Line Light Rail Station connects Downtown LA to USC, Santa Monica and Culver City, Universal City and Hollywood as well as the South Bay.

The EVO Courtyard offers retailers, restaurateurs, professional, service and medical users with the ability to purchase a ground level condominium ranging from 1,050 square feet to 4,570 square feet. Please note all proposed uses are subject to all necessary government approvals.

LOAN OPTIONS / OCCUPANCY COSTS SBA LOAN TRADITIONAL LOAN

DOWN PAYMENT $145,000 (10%) $580,000 (40%)

LOAN AMOUNT $1,305,000 (90%) $870,000 (60%)

TERM 10 YEARS 10 YEARS

AMORTIZATIION 25 YEARS 25 YEARS

INTEREST RATE 5.25% 5.00%

MONTHLY LOAN PAYMENT $7,820 $5,806

MONTHLY REAL ESTATE TAXES (1.43%) $1,728 $1,728

MONTHLY EVO CONDO FEES $584 $584

TOTAL MONTHLY OCCUPANCY COSTS: $10,132 $7,398

SUITE # SQUARE FOOTAGE SELLING PRICE

2 1,050 $1,450,000

3 1,100 $1,450,000

4 1,310 $1,450,000

5 1,110 $1,450,000

PRICING


EVOCourtyard

AREAMAP

1155 S Grand Ave

EVOSTAPLES CENTER

MICROSOFTTHEATRE

LA LIVE

CONVENTION CENTER


EVOCourtyard

MAP KEY

Current South Park Development Projects 1) Olympia: City Century (897 units, 1000 keys) 2) Cambria Hotel: PPP (247 keys) 3) 925 Figueroa: Regalian(200 units, 220 keys) 4) Olympic Tower: Ben Neman (374 units, 373 keys) 5) W Hotel: (435 units, 300 keys) 6) JW Marriot Expansion: AEG (855 keys) 7) Oceanwide Plaza: Oceanwide (504 units, 183 keys) 8) Convention Center Expansion 9) Lightstone Hotels: Lightstone (1,162 keys) 10) City Lights on Fig: Tri-Cal (1024 keys) 11) 1323 Flower:Tishbees, LLC (132 keys, 48 units) 12) 1400 Figueroa: DHG (106 units) 13) Honda Development Site 14) 1600 Figueroa: L & R (300 units, 250 keys) 15) 1133 Hope: Fulton St. Ventures (208 units) 16) 1212 Flower: Onni(730 units) 17) 1201 Grand: City Century (312 units) 18) Morrison Hotel : Relevant (100 units, 473 keys) 19) 1233 Grand: City Century (150 units) 20) Onyx Phase II: Jade Enterprises 21) 1320 Flower Hotel (43 keys) 22) 1317 Hope (34 units) 23) 1334 Flower (150 units) 24) 1370 Flower (147 units) 25) 1600 Flower: (250 units, 300 keys) 26) 1323 Grand (284 units) 27) California Hospital Expansion 28) 11thand Olive: Crescent Heights (800 units) 29) 1115 Olive: Mack R.E. Group (713 units)

30) 12thand Olive: AECOM Capital (243 keys) 31) 1120 Olive: Mack R.E. Group (536 units) 32) 1111 S. Hill: South Hill Holdings (528 units) 33) Emerald: Jade Enterprises (154 units) 34) OnniOlympic: (700 units) 35) Herald Examiner (80k office space) 36) Proper Hotel (148 keys) 37) 1138 Broadway: Blue Arch (139 keys) 38) 14th and Hill: (235 units)

South Park Adjacent Projects 39) 1330 Pico: Sandstone (696 keys) 40) Metropolis Phase II: Greenland USA (1,250 units) 41) Brookfield Residential Tower (780 units) 42) 744 Figueroa: Mitsui Fudosan (443 units) 43) The Bloc: RatkovichCompany 44) 949 S. Hope: Forest City (236 units) 45) 8thand Grand: Mitsui Fudosan (409 units) 46) 845 Olive (205 units) 47) Broadway Trade Center 48) The Alexan: Trammel Crow (305 units) 49) 920 Hill (239 units) 50) 955 Broadway (250 units) 51) The Hill (232 units) 52) Broadway and Olympic (150 units) 53) OnniOffice Conversion 54) Hoxton Hotel: (150 keys) 55) 1123 Main: Jade Enterprises (363 units) 56) Main Street Park: Jade Enterprises (379 units)


EVOCourtyardAREAMAP

1) Staples Center

2) L.A. Convention Center

3) L.A. Live

4) Regal LA Live Stadium 14

5) The Ritz-Carlton/JW Marriott

6) FIDM

7) Whole Foods Market

8) Ralphs

9) 7th + Fig

10) The Bloc

11) Broken Spanish

12) The Palm

13) Starbucks

14) L.A. Fashion District

12

2

10

6

14

4

12

8

3

11

75

13

9

AMENITIES


EVOCourtyard

EVO

AREAMAP

Los

Ange

les

Rive

r

Los Angeles River

PACIFIC OCEAN

CRENSHAW/

PURPLE LINE EXTENSION

REGIONAL CONNECTOR

LAX LINE

LAX

GOLD LINE FOOTHILL EXTENSION

Little To

kyo/

Little To

kyo/

Arts Dist

Universal C

ity/Studio City

Hollywood/V

ine

Hollywood/H

ighland

Universal C

ity/Studio City

Civic Ctr/

Civic Ctr/

Civic Ctr/

Civic Ctr/

GrandGrandGrandGrand

ParkParkParkPark

Westlake/M

acArthur P

ark

Roscoe

Pico/Alis

o

Mariach

i Plaza

Long Beach Bl

Artesia

Del Amo

Civic Ctr/

GrandPark

Allen

LakeSierra

Madre Villa

Arcadia

Monrovia

Duarte/City

of Hope

Irwindale

Azusa Downtown

APU/Citrus Colle

ge

Lincoln/Cypress

Heritage Sq

Southwest Museum

Highland Park

Fillmore

Del Mar

Memorial Park

South Pasadena

Westlake/M

acArthur P

ark

Wilshire

/Vermont

Pershing

Chinatown

Union Station

Chinatown

Square

7th St/Metro CtrPico

LATTC/OrthoInstitute

Jefferson/U

SC

LAX FlyAwayAmtrak & MetrolinkLAX FlyAway

LAX FlyAwayLAX FlyAway

LAX FlyAway

LAX FlyAway

LAX FlyAway

LAX FlyAway

LAX Shuttle G

Amtrak & MetrolinkMetro

link

Sherman Way

Roscoe

Nordhoff

Chatsworth

Hollywood/W

estern

Vermont/S

anta MonicaHolly

wood/Western

Hollywood/V

ine

Hollywood/H

ighlandNorth

Hollywood

Balboa

Balboa

Woodley

Sepulveda

Sepulveda

Van Nuys

Van Nuys

Woodman

Valley Colle

ge

Laurel Canyo

n

Canoga

Canoga

De Soto

De Soto

Pierce Colle

ge

Pierce Colle

ge

Tampa

Tampa

Reseda

Reseda

Vermont/B

everly

Vermont/S

anta Monica

Vermont/S

unset

Vermont/S

unset

Amtrak & Metrolink

Soto

Indiana

Maravilla

East LA Civic C

tr

Atlantic

El Monte

Cal State LA

LAC+USC Medica

l Ctr

Pico/Alis

o

Mariach

i Plaza

Wilshire

/

Normandie

Wilshire

/Western

ExpoPark

/USC

Expo/Vermont

Expo/Western

Expo/Crenshaw

Farmdale

Expo/La Brea

La Cienega/Jefferson

Culver C

ity

Palms

Westwood/R

ancho Park

Expo/Sepulveda

Expo/Bundy

26th St/Bergamot

Expo/Sepulveda

Expo/Bundy

26th St/Bergamot

17th St/S

MC

Downtown Santa Monica

Mariposa

El Segundo

Douglas

Redondo Beach

37th St/USC

Rosecrans

Harbor

Carson

Pacific CoastHwy

GatewayTransit Ctr

Long Beach Bl

AvalonVerm

ont/

AthensCrenshaw

Hawthorne/Lennox

Aviation/L

AX

Lakewood Bl

Norwalk

Norwalk

Slauson

Manchester

Harbor F

wy

5th St

1st St

PacificAv

DowntownLong Beach

PacificAv

Washington

Vernon

Slauson

Florence

Firestone

Compton

Artesia

Del Amo

Wardlow

Willow St

Pacific Coast Hwy

Anaheim St

103rd St/

Willowbrook/Rosa Parks

Watts Towers 103rd St/

Willowbrook/Rosa Parks

DowntownLong Beach

Grand/LATTC

San Pedro St

Watts Towers

Union Station

SAN FERNANDO VALLEY

SAN GABRIEL VALLEY

EASTSIDE

SOUTH BAY

San Pedro

GATEWAY CITIES

DOWNTOWNLA

SOUTH LA

CENTRAL LA

SAN FERNANDO VALLEY

SAN GABRIEL VALLEY

EASTSIDE

SOUTH BAY

San Pedro

GATEWAY CITIES

DOWNTOWNLA

SANTAMONICA

SOUTH LA

CENTRAL LA

WESTSIDE

metro.netMetro Rail & Busway

North Hollywood to Union Station

Metro Rail

Wilshire/Western to Union StationPurple Line

Blue Line

Expo Line

Orange Line

Amtrak

LAX FlyAway

Metrolink

Metro Busway

Regional Rail

Green Line

Gold Line

Downtown LA to Long Beach

Downtown LA to Santa Monica

Redondo Beach to Norwalk

East Los Angeles to Azusa

Silver Line Chatsworth to North Hollywood

San Pedro to El Monte

amtrak.com

metrolinktrains.com

lawa.org/flyaway

LAX Shuttle (free)lawa.org

Street Service in Downtown LAand San Pedro

MAY 2016 Subject to Change

Airport Shuttle

Rail Station

StationTransfer

Busway

Station

UNDERCONSTRUCTION

Busway StreetService

Red Line

18-2

877M

M ©

2018

LAC

MTA

JUN 2018 Subject to Change


METRO RAIL & BUSWAY

EVOCourtyardAREAMAP


EVOCourtyardAERIALMAP

AERIAL PHOTO

EVO COURTYARD

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EVOCourtyardAERIALMAP


EVOCourtyardFLOORPLAN

MARKETOVERVIEW


Courtyard

EVOCourtyard

OVERVIEW LOS ANGELES

The Los Angeles-Long Beach metro is located entirely within Los Angeles County, covering 4,752 square miles and including the islands of San Clemente and Santa Catalina. The county encompasses 88 incorporated cities and numerous unincorporated areas. It is bordered on the east by San Bernardino and Riverside counties, on the north by Kern and Ventura counties, on the west by the Pacific Ocean and on the south by Orange County. The area is home to more than 10.2 million residents. The city of Los Angeles accounts for nearly 4 million people. The Los Angeles coastline stretches along 81 miles of world-famous beaches. The Santa Monica and San Gabriel mountains are located in the county, with the highest point at Mount San Antonio reaching more than 10,000 feet.

METRO HIGHLIGHTS

ECONOMIC CENTERLos Angeles is the entertainment capital of the world as well as a leading international trade and manufacturing center.

VAST INFRASTRUCTURE NETWORK The region has well-established and interconnected transportation systems by road, rail and waterways, allowing access to most of the world’s markets.

JOB AND POPULATION GROWTH A desirable climate and proximity to the ocean and recreational opportunities lure companies and residents to the metro.

EVO COURTYARD

4 1155 S GRAND AVE | LOS ANGELES, CALIFORNIA

MARKET OVERVIEW

The Los Angeles-Long Beach metro is located entirely within Los Angeles County, covering 4,752 square miles and including the islands of San Clemente and Santa Catalina. The county encompasses 88 incorporated cities and numerous unincorporated areas. It is bordered on the east by San Bernardino and Riverside counties, on the north by Kern and Ventura counties, on the west by the Pacific Ocean and on the south by Orange County. The area is home to more than 10.2 million residents. The city of Los Angeles accounts for nearly 4 million people. The Los Angeles coastline stretches along 81 miles of worldfamous beaches. The Santa Monica and San Gabriel mountains are located in the county, with the highest point at Mount San Antonio reaching more than 10,000 feet.

METRO HIGHLIGHTS

LOS ANGELES OVERVIEW

ECONOMIC CENTERLos Angeles is the entertainment capital of the world as well as a leading international trade and manufacturing center.

VAST INFRASTRUCTURE NETWORKThe region has well-established and interconnected transportation systems by road, rail and waterways, allowing access to most of the world’s markets.

JOB AND POPULATION GROWTHA desirable climate and proximity to the ocean and recreational opportunities lure companies and residents to the metro.

MARKET OVERVIEW

OVERVIEW LOS ANGELES

The Los Angeles-Long Beach metro is located entirely within Los Angeles County, covering 4,752 square miles and including the islands of San Clemente and Santa Catalina. The county encompasses 88 incorporated cities and numerous unincorporated areas. It is bordered on the east by San Bernardino and Riverside counties, on the north by Kern and Ventura counties, on the west by the Pacific Ocean and on the south by Orange County. The area is home to more than 10.2 million residents. The city of Los Angeles accounts for nearly 4 million people. The Los Angeles coastline stretches along 81 miles of world-famous beaches. The Santa Monica and San Gabriel mountains are located in the county, with the highest point at Mount San Antonio reaching more than 10,000 feet.

MARKET OVERVIEW

METRO HIGHLIGHTS

ECONOMIC CENTER

Los Angeles is the entertainment capital of the world as well as a leading international trade and manufacturing center.

VAST INFRASTRUCTURE NETWORK The region has well-established and interconnected transportation systems by road, rail and waterways, allowing access to most of the world’s markets.

JOB AND POPULATION GROWTH A desirable climate and proximity to the ocean and recreational opportunities lure companies and residents to the metro.

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4

EVOCourtyard

MARKET OVERVIEW

MARKET OVERVIEW

!  Extensive trading activity passes through the Port of Los Angeles and the Port of Long Beach.

!  Various interstate routes make the area accessible nationwide, including 5, 10, 15, 110, 210, 215, 405 and 710.

!  Amtrak and Metrolink provide passenger rail service. Freight rail lines servicing the county include Union Pacific and BNSF.

!  The expanding light-rail network provides increased access to in-town travel.

!  LAX is one of the busiest U.S. airports. Other commercial airports serving the county include Long Beach, Burbank and Palmdale.

!  The 20-mile railroad expressline Alameda Corridor facilitates nearby port activity, connecting the two local ports to the transcontinental rail network east of downtown.

TRANSPORTATION

MORE THAN MILLION TEU’S WERE SHIPPED THROUGH THE PORTS OF LOS ANGELES AND LONG BEACH LAST YEAR, RANKING THEM FIRST AND SECOND IN THE NATION.!

17

$10 PORTS

CREATES

BILLION U.S. CUSTOMS REVENUES AND TAXES !

4 SERVED BY

COMMERCIAL AIRPORTS IN THE COUNTY

150 TO THE

MEXICAN BORDER !

MILES

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MARKET OVERVIEW

MARKET OVERVIEW

!  Extensive trading activity passes through the Port of Los Angeles and the Port of Long Beach.

!  Various interstate routes make the area accessible nationwide, including 5, 10, 15, 110, 210, 215, 405 and 710.

!  Amtrak and Metrolink provide passenger rail service. Freight rail lines servicing the county include Union Pacific and BNSF.

!  The expanding light-rail network provides increased access to in-town travel.

!  LAX is one of the busiest U.S. airports. Other commercial airports serving the county include Long Beach, Burbank and Palmdale.

!  The 20-mile railroad expressline Alameda Corridor facilitates nearby port activity, connecting the two local ports to the transcontinental rail network east of downtown.

TRANSPORTATION

MORE THAN MILLION TEU’S WERE SHIPPED THROUGH THE PORTS OF LOS ANGELES AND LONG BEACH LAST YEAR, RANKING THEM FIRST AND SECOND IN THE NATION.!

17

$10 PORTS

CREATES

BILLION U.S. CUSTOMS REVENUES AND TAXES !

4 SERVED BY

COMMERCIAL AIRPORTS IN THE COUNTY

150 TO THE

MEXICAN BORDER !

MILES

EVO COURTYARD


MARKET OVERVIEW EVOCourtyard

MARKET OVERVIEW

ECONOMY !  The motion picture/entertainment industry is one of the most

high-profile sectors of the economy. !  The GMP (Gross Metropolitan Product) is expected to grow at

a slower pace than the U.S. rate in this year. !  Twelve Fortune 500 companies are currently headquartered

in the metro. !  A significant aerospace industry is led by employers that

include Boeing, Northrop Grumman and Lockheed Martin. !  Employers in a variety of industries provide approximately 4.5

million jobs in the county. !  The two ports make the area a major player in transportation

and the global shipping trade.

MAJOR AREA EMPLOYERS

Kaiser Permanente

Northrop Grumman Corp.

The Boeing Co.

Kroger Co.

Cedars-Sinai Medical Center

University of Southern California

Target Corp.

Bank of America Corp.

The Home Depot

Providence Health & Services

SHARE OF 2018 TOTAL EMPLOYMENT

MANUFACTURING 8%

GOVERNMENT

HEALTH SERVICES EDUCATION AND

+ OTHER SERVICES

3%

LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES

19% AND UTILITIES

TRADE, TRANSPORTATION CONSTRUCTION

PROFESSIONAL AND BUSINESS SERVICES

5% INFORMATION

14%

3%

5%

* Forecast

13% 12%

18%

EVO COURTYARD


EVOCourtyardMARKET OVERVIEW

MARKET OVERVIEW

!  The population of more than 10.2 million people makes Los Angeles the most populous metropolitan area in the U.S.

!  More than 97,000 new residents are expected through 2023; these gains will translate into nearly 88,000 households formed during the same five-year period.

!  A median home price that is twice that of the nation has resulted in a homeownership rate of 46 percent in 2018; this is well below the national level of 64 percent.

!  Nearly 31 percent of residents age 25 and older have attained at least a bachelor’s degree. More than 10 percent of residents also hold a graduate or professional degree.

QUICK FACTS

* Forecast

DEMOGRAPHICS

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7

36.4 2018

MEDIAN AGE:

U.S. Median: 38.0

$63,700 2018 MEDIAN

HOUSEHOLD INCOME:

U.S. Median: $58,800

3.4M 2018

HOUSEHOLDS:

Growth 2018-2023*:

2.6%

10.2M 2018

POPULATION:

Growth 2018-2023*:

1.0%



MARKET OVERVIEW

SPORTS The Los Angeles region enjoys pleasant weather, with sunshine throughout the year. Bounded by mountains and the Pacific Ocean, the temperature rarely rises above 85 degrees or falls below 40 degrees and rainfall is minimal. It is possible to swim in the ocean and ski on the mountains on the same day. There are 27 institutes of higher learning in the county, including three campuses of the University of California and seven campuses of California State University. Private institutions such as Caltech, the Claremont Colleges, Occidental College and the University of Southern California, along with a number of community colleges, are also included in this count. Several professional and college teams are located in the area. Cultural venues include Walt Disney Concert Hall, Dorothy Chandler Pavilion, the Hollywood Bowl, Warner Bros. Studios, Huntington Library, the Museum of Art and the Natural History Museum of Los Angeles County.

EDUCATION

ARTS & ENTERTAINMENT

Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

QUALITY OF LIFE

80+ MILES OF SHORELINE

$588,000 MEDIAN HOME PRICE! MUSEUMS

100+

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MARKET OVERVIEW

SPORTS The Los Angeles region enjoys pleasant weather, with sunshine throughout the year. Bounded by mountains and the Pacific Ocean, the temperature rarely rises above 85 degrees or falls below 40 degrees and rainfall is minimal. It is possible to swim in the ocean and ski on the mountains on the same day. There are 27 institutes of higher learning in the county, including three campuses of the University of California and seven campuses of California State University. Private institutions such as Caltech, the Claremont Colleges, Occidental College and the University of Southern California, along with a number of community colleges, are also included in this count. Several professional and college teams are located in the area. Cultural venues include Walt Disney Concert Hall, Dorothy Chandler Pavilion, the Hollywood Bowl, Warner Bros. Studios, Huntington Library, the Museum of Art and the Natural History Museum of Los Angeles County.

EDUCATION

ARTS & ENTERTAINMENT

Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

QUALITY OF LIFE

80+ MILES OF SHORELINE

$588,000 MEDIAN HOME PRICE! MUSEUMS

100+

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Duo of regions heavily impact overall fundamentals. A surge of employment growth and apartment construction in the San Fernando Valley and Greater Downtown Los Angeles translated to robust retail leasing activity during the past 12 months, as merchants anticipated an uptick in consumer demand. The strength of the two regions supported the absorption of roughly 1.5 million square feet of single-tenant space countywide, allowing the metro’s overall vacancy rate to reach a cycle-low level. A five-year-high rate of household formation during 2018 combined with consistent higher-paying job creation suggests this level of retailer demand persists throughout the remainder of this year. This demand will support the metro’s average asking rent to reach the previous cycle’s peak rate while low-4 percent availability persists. Wave of new supply gauges level of pent-up demand. The square footage of retail properties completed in 2018 is slated to outpace the previous five-year average by approximately 400,000 square feet. This growth is supported by the completion of six, larger-scale developments spread throughout the metro. These sizable shopping centers, along with an additional 900,000 square feet of new space, test retailer demand, especially in suburban Long Beach, the western San Fernando Valley and Greater Downtown Los Angeles, home to half of this year’s completions.

Investment Trends •  Retail fundamentals were solid throughout Los Angeles County over the past

12 months as vacancy hovered below 5 percent in nearly all submarkets and strong asking rent growth occurred in the metro’s primary regions. These factors maintained both in-county buyer and out-of-state investor interest in the market, translating to consistent year-over-year deal flow. Yet, rising interest rates on debt have recently influenced the buyer pool to increase its cap rate expectations by half a point to account for pricier financing. This adjustment has made it more difficult for owners seeking 2017 pricing to sell properties.

•  Multi-tenant transactions dominated the sales landscape over the past year. Roughly half of these trades involved smaller centers comprising less than 20,000 square feet. Buyers closing deals in Mid-Wilshire and Westside Cities obtained 3 to low-4 percent cap rates, while investors seeking high-4 to high-5 percent yields targeted the Tri-Cities submarket.

•  Out-of-state capital focused on post-2000-built retail was notably active in the Mid-Cities, San Gabriel Valley and Southeast Los Angeles submarkets. In these locales, larger neighborhood and power centers traded for less than $500 per square foot,and provided buyers with 4 and 5 percent cap rates.

Retail 2018 Outlook Retailer Demand Preserves Limited Vacant Stock; Asking Rents Reach a High Point

Vacancy Y-O-Y

Basis Point Change

Metro Asking Rent

Y-O-Y Change

Downtown Los Angeles 4.3% -10 $41.30 1.2%

San Fernando Valley 3.8% 30 $31.85 3.4%

South Bay/Long Beach 4.3% 70 $26.58 -1.0%

Westside Cities 3.9% 0 $62.71 6.2%

Los Angeles Metro 4.2% 20 $32.23 4.2%

LOS ANGELES COUNTY

* Cap rates trailing 12 months through 2Q18; 10-Year Treasury up to June 28. Sources: CoStar Group, Inc.; Real Capital Analytics

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Vacancy Y-O-Y

Basis Point Change

Metro Asking Rent

Y-O-Y Change






LOS ANGELES COUNTY


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Vacancy Y-O-Y

Basis Point Change

Metro Asking Rent

Y-O-Y Change






LOS ANGELES COUNTY


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•  The hospitality, professional services, and education and health services sectors each grew by at least 18,000 workers over the past 12 months, offsetting declines in the number of retail and government-related jobs.

•  The addition of 51,000 positions over the past year drove the unemployment rate down 20 basis points to 4.5 percent, the lowest level dating back to 1990.

EMPLOYMENT

•  Developers completed more than 1.2 million square feet of retail during the past four quarters, including 940,000 square feet of single-tenant space. South Bay welcomed 415,000 square feet of new supply, the largest retail influx of any submarket.

•  Construction is underway on 1.9 million square feet with completion dates extending into 2020.

CONSTRUCTION

•  Retailers absorbed nearly 1.8 million square feet over the past year, reducing the metro’s vacancy rate to 4.1 percent. Both single- and multi-tenant vacancy sat in the low-4 percent range entering the second half.

•  Availability in the San Fernando Valley region dipped 30 basis points to 3.7 percent, while vacancy in South Bay rose 20 basis points amid an influx of new supply.

VACANCY

•  Over the last four quarters, the average asking rent rose to $31.35 per square foot, supported by a 5.7 percent uptick in marketed multi-tenant rates.

•  The most pronounced rent gains occurred in the San Fernando Valley and Mid-Wilshire submarkets, where increases of 11.4 percent and 9.0 percent elevated asking rates to $28.56 and $48.06 per square foot, respectively.

RENTS

LOS ANGELES COUNTY

increase in effective rents Y-O-Y 3.8%

basis point decrease in vacancy Y-O-Y 20

square feet completed Y-O-Y

1.2 million increase in total employment Y-O-Y 1.1%

*Forecast

2Q18 - 12-Month Trend

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Vacancy Y-O-Y

Basis Point Change

Metro Asking Rent

Y-O-Y Change






LOS ANGELES COUNTY


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Pricing Reaches Possible Peak, Buyers Adjust Cap Rate Expectations

Outlook: The recent uptick in interest rates placed the metro in a buffer period where the gap between buyer and seller expectations widened, likely forcing owners who list to reduce asking prices moving forward.

Vacancy Rate

Y-O-Y Basis Point

Change Submarket Asking

Rent Y-O-Y % Change

Burbank/ Glendale/Pasadena 3.2% -10 $33.65 2.1%

Southeast Los Angeles 3.4% -10 $20.82 3.0%

San Gabriel Valley 4.0% 0 $21.27 -2.1%

West Los Angeles 4.0% 30 $63.46 6.5%

Mid-Wilshire 4.1% -30 $48.06 9.0%


San Fernando Valley 4.2% -50 $28.56 11.4%

South Bay 4.2% 20 $27.06 -0.2%

Mid-Cities 4.5% -10 $22.36 -0.5%

Santa Clarita Valley 4.9% -80 $22.02 -8.6%

Overall Metro 4.1% -20 $31.35 3.8%

Submarket Trends

Lowest Vacancy Rates 2Q18

Sales Trends

LOS ANGELES COUNTY

•  A lack of new multi-tenant supply drove up the value of existing listed centers by 6.1 percent over the past year, elevating the metro’s average price per square foot to $438, a year-over-year gain of 4.8 percent.

•  The county’s four primary regions accounted for nearly two-thirds of recent deal flow, led by activity in Greater Downtown Los Angeles. Overall, trades in the $5 million to $10 million price tranche accounted for half of recent transaction activity.

* Trailing 12 months through 2Q18 over previous time period. Pricing trend sources: CoStar Group, Inc.; Real Capital Analytics

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* Forecast **2017-2022

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Vacancy Y-O-Y

Basis Point Change

Metro Asking Rent

Y-O-Y Change






LOS ANGELES COUNTY


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•  Deliveries elevated over the past year, supported by the completion of 157,000 square feet in Mid-Wilshire, yet only 8,000 square feet was finalized during the first half.

•  Most retail deliveries in 2018 will occur during the second half, including 233,000 square feet in Downtown Los Angeles. An additional 96,000 square feet is underway in Mid-Wilshire slated for 2019 or 2020 finalization.

CONSTRUCTION

•  Net absorption of 436,000 square feet reduced the region’s vacancy rate to 4.1 percent following a rise of 30 basis points during the previous 12-month period.

•  Both submarkets that comprise the region witnessed dips in availability. Vacancy in Downtown Los Angeles slid 60 basis points to 4.2 percent, while Mid-Wilshire’s rate fell 30 basis points to 4.1 percent.

VACANCY

•  The region’s average asking rent eclipsed the previous cycle’s peak of $41.07 per square foot following an 8 percent spike during the past 12 months. A 9 percent rise in Mid-Wilshire’s average marketed rate supported the overall increase.

•  Overall, multi-tenant asking rent recently rose by more than 29 percent aided by a 3 percent vacancy rate.

RENTS

LOS ANGELES COUNTY: GREATER DOWNTOWN LOS ANGELES

increase in the average asking rent Y-O-Y

8.0% basis point increase in vacancy Y-O-Y 50


192,000

•  Several factors suggest increased consumer demand for Greater Downtown Los Angeles retail is on the horizon. Roughly 5,000 apartments will be completed in 2018, with another 10,000 units slated for finalization in the next two years. Additionally, the influx of tech, media and eng ineer ing- re la ted f i rms relocating to the area points to increased hiring and earnings growth mov ing fo rward . Surp r i s ing ly, developers’ response to these market conditions has been moderate, with 322,000 square feet of retail space lined up for 2018 delivery including less than 100,000 square feet in Mid-Wilshire. This volume of new supply allows regional vacancy to hold below 5 percent for another year, pushing the average asking rent to a historically high level.

•  In-county buyers scour the area for older assets along heavily-trafficked streets including Sunset and Santa Monica Boulevards and La Brea. Along these corridors, cap rates range from 3 to 4 percent, with the highest yields available in Hollywood/Silver Lake and Miracle Mile.

•  West Hollywood represented the most active submarket in Los Angeles County over the past 12 months. Here, pricing below $1,000 per square foot is rare for smaller multi-tenant centers and single-tenant assets.

Investment Highlights

*Forecast


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•  Deliveries elevated over the past year, supported by the completion of 157,000 square feet in Mid-Wilshire, yet only 8,000 square feet was finalized during the first half.

•  Most retail deliveries in 2018 will occur during the second half, including 233,000 square feet in Downtown Los Angeles. An additional 96,000 square feet is underway in Mid-Wilshire slated for 2019 or 2020 finalization.

CONSTRUCTION

•  Net absorption of 436,000 square feet reduced the region’s vacancy rate to 4.1 percent following a rise of 30 basis points during the previous 12-month period.

•  Both submarkets that comprise the region witnessed dips in availability. Vacancy in Downtown Los Angeles slid 60 basis points to 4.2 percent, while Mid-Wilshire’s rate fell 30 basis points to 4.1 percent.

VACANCY

•  The region’s average asking rent eclipsed the previous cycle’s peak of $41.07 per square foot following an 8 percent spike during the past 12 months. A 9 percent rise in Mid-Wilshire’s average marketed rate supported the overall increase.

•  Overall, multi-tenant asking rent recently rose by more than 29 percent aided by a 3 percent vacancy rate.

RENTS

LOS ANGELES COUNTY: GREATER DOWNTOWN LOS ANGELES

increase in the average asking rent Y-O-Y

8.0% basis point increase in vacancy Y-O-Y 50


192,000

•  Several factors suggest increased consumer demand for Greater Downtown Los Angeles retail is on the horizon. Roughly 5,000 apartments will be completed in 2018, with another 10,000 units slated for finalization in the next two years. Additionally, the influx of tech, media and eng ineer ing- re la ted f i rms relocating to the area points to increased hiring and earnings growth mov ing fo rward . Surp r i s ing ly, developers’ response to these market conditions has been moderate, with 322,000 square feet of retail space lined up for 2018 delivery including less than 100,000 square feet in Mid-Wilshire. This volume of new supply allows regional vacancy to hold below 5 percent for another year, pushing the average asking rent to a historically high level.

•  In-county buyers scour the area for older assets along heavily-trafficked streets including Sunset and Santa Monica Boulevards and La Brea. Along these corridors, cap rates range from 3 to 4 percent, with the highest yields available in Hollywood/Silver Lake and Miracle Mile.

•  West Hollywood represented the most active submarket in Los Angeles County over the past 12 months. Here, pricing below $1,000 per square foot is rare for smaller multi-tenant centers and single-tenant assets.

Investment Highlights

*Forecast


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LOS ANGELES COUNTY

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•  Fed raises benchmark rate, plans for additional increases. The Federal Reserve recently

increased the federal funds rate by 25 basis points, lifting the overnight lending rate to 2

percent at the conclusion of its September meeting. The Fed noted inflation has broadly

reached its target, while household spending and corporate investment remain robust. The Fed indicated an additional rate hike this year and projects as many as three increases in

2019.

•  Lending costs rise alongside Fed rate increase. As the Fed lifts rates, lenders have been

tightening margins to compete for loans. Despite these efforts, borrowing costs remain on an

upward trajectory, which is tightening returns and pushing some investors to seek greater

yields in secondary markets. However, though buyers may try to push back on pricing due to

increased loan costs, some sellers remain convinced that the strong economy and sturdy

NOI performance substantiate aggressive pricing and a widening expectation gap is the

result. If interest rates rapidly surge upward, this gap could quickly widen, slowing

transaction activity.

•  The capital markets environment remains competitive. As the Fed tightens policy, global

investors have been acquiring Treasurys in order to capture a considerable yield premium,

keeping the 10-year Treasury near 3 percent. Portfolio lenders are providing debt for retail

assets, with leverage typically capped at 60 to 65 percent. The sector has become

increasingly nuanced, with deals more scrutinized due to e-commerce competition. Ten-year

loan structures will range between 4.95 and 5.25 percent, depending on tenancy, location

and sponsorship. Continued consumer spending underpins U.S. growth, supporting retail

demand and driving a 10-basis-point decline in vacancy to 4.9 percent this year.

Through Sept. 26 Sources: CoStar Group, Inc.; Real Capital Analytics

Capital Markets

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Vacancy Y-O-Y

Basis Point Change

Metro Asking Rent

Y-O-Y Change






LOS ANGELES COUNTY


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PROPERTY NAME

MARKETING TEAM

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DEMOGRAPHICS

Source: © 2018 Experian

Created on July 2019

POPULATION 1 Miles 3 Miles 5 Miles !  2023 Projection

Total Population 55,364 574,921 1,301,833 !  2018 Estimate

Total Population 50,245 566,824 1,301,014 !  2010 Census

Total Population 44,163 537,443 1,246,974 !  2000 Census

Total Population 34,345 532,550 1,246,879 ! Current Daytime Population

2018 Estimate 164,361 746,063 1,311,263

HOUSEHOLDS 1 Miles 3 Miles 5 Miles !  2023 Projection

Total Households 28,292 196,659 429,663 !  2018 Estimate

Total Households 24,363 187,413 417,637 Average (Mean) Household Size 1.96 2.83 2.99

!  2010 Census Total Households 20,722 174,265 394,393

!  2000 Census Total Households 13,167 159,441 376,449

! Occupied Units 2023 Projection 28,292 196,659 429,663 2018 Estimate 27,159 198,166 436,788

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles !  2018 Estimate

$150,000 or More 8.69% 4.71% 6.12% $100,000 - $149,000 8.63% 6.71% 8.27% $75,000 - $99,999 6.82% 7.54% 8.82% $50,000 - $74,999 9.23% 13.92% 15.55% $35,000 - $49,999 8.93% 13.78% 13.83% Under $35,000 57.67% 53.35% 47.42%

Average Household Income $61,623 $52,204 $60,126 Median Household Income $25,019 $32,408 $37,440 Per Capita Income $31,019 $18,285 $19,870

HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 Miles Total Average Household Retail Expenditure $52,015 $51,846 $57,260 ! Consumer Expenditure Top 10 Categories

Housing $15,993 $15,872 $17,326 Shelter $11,196 $10,835 $11,636 Transportation $7,823 $8,226 $9,228 Food $5,660 $5,584 $6,059 Personal Insurance and Pensions $4,367 $4,292 $4,946 Utilities $2,354 $2,523 $2,787 Health Care $2,196 $2,399 $2,779 Entertainment $1,688 $1,766 $2,056 Apparel $1,410 $1,433 $1,583 Household Furnishings and Equipment $1,159 $1,171 $1,372

POPULATION PROFILE 1 Miles 3 Miles 5 Miles ! Population By Age

2018 Estimate Total Population 50,245 566,824 1,301,014 Under 20 17.24% 24.68% 26.00% 20 to 34 Years 33.71% 30.04% 27.28% 35 to 39 Years 9.20% 8.00% 7.78% 40 to 49 Years 13.54% 13.30% 13.47% 50 to 64 Years 15.81% 14.76% 15.62% Age 65+ 10.49% 9.18% 9.86% Median Age 34.56 32.39 33.07

! Population 25+ by Education Level 2018 Estimate Population Age 25+ 36,813 371,938 852,994 Elementary (0-8) 15.21% 20.70% 19.29% Some High School (9-11) 13.17% 14.77% 14.00% High School Graduate (12) 16.44% 20.86% 21.14% Some College (13-15) 13.70% 13.16% 14.88% Associate Degree Only 4.35% 4.28% 4.64% Bachelors Degree Only 21.05% 15.31% 15.14% Graduate Degree 10.45% 5.20% 5.65%

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Income In 2018, the median household income for your selected geography is $25,019, compare this to the US average which is currently $58,754. The median household income for your area has changed by 87.20% since 2000. It is estimated that the median household income in your area will be $31,521 five years from now, which represents a change of 25.99% from the current year. The current year per capita income in your area is $31,019, compare this to the US average, which is $32,356. The current year average household income in your area is $61,623, compare this to the US average which is $84,609.

Population In 2018, the population in your selected geography is 50,245. The population has changed by 46.29% since 2000. It is estimated that the population in your area will be 55,364.00 five years from now, which represents a change of 10.19% from the current year. The current population is 55.48% male and 44.52% female. The median age of the population in your area is 34.56, compare this to the US average which is 37.95. The population density in your area is 15,991.05 people per square mile.

Households There are currently 24,363 households in your selected geography. The number of households has changed by 85.03% since 2000. It is estimated that the number of households in your area will be 28,292 five years from now, which represents a change of 16.13% from the current year. The average household size in your area is 1.96 persons.

Employment In 2018, there are 135,871 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 35.42% of employees are employed in white-collar occupations in this geography, and 64.81% are employed in blue-collar occupations. In 2018, unemployment in this area is 6.68%. In 2000, the average time traveled to work was 34.00 minutes.

Race and Ethnicity The current year racial makeup of your selected area is as follows: 36.47% White, 11.70% Black, 0.10% Native American and 16.82% Asian/Pacific Islander. Compare these to US averages which are: 70.20% White, 12.89% Black, 0.19% Native American and 5.59% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 52.62% of the current year population in your selected area. Compare this to the US average of 18.01%.

PROPERTY NAME

MARKETING TEAM

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Housing The median housing value in your area was $520,761 in 2018, compare this to the US average of $201,842. In 2000, there were 756 owner occupied housing units in your area and there were 12,411 renter occupied housing units in your area. The median rent at the time was $367.


DEMOGRAPHICS


DEMOGRAPHICS







PROPERTY NAME

MARKETING TEAM

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DEMOGRAPHICS

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PROPERTY NAME

MARKETING TEAM

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DEMOGRAPHICS


EVOCourtyardDEMOGRAPHICS

MARKET OVERVIEW

PRESENTED BY

MARTIN PORTERCA DRE Broker License # 00861399

(562) 257-1233

O F F E R I N G M E M O R A N D U M 1155 S GRAND AVE LOS ... · the South Park District of Downtown...

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