RENOVATION OPPORTUNITY IN KOREATOWN · Millennials have ditched the suburbs for a more active and...

RENOVATION OPPORTUNITY IN KOREATOWN

RENOVATION OPPORTUNITYIN KOREATOWN

This offering memorandum has been provided by Iconic Investments for the use of the intended recipient. All information contained in the offering memorandum has been obtained from sources other than Iconic Investments, and neither Iconic Investments nor its affiliates makes any representation or warranties, expressed or implied, as to the accuracy or completeness of the information within the offering memorandum. Iconic Investments has provided the unverified information to prospective purchasers only to establish a preliminary interest in the property. Furthermore, Iconic Investments does not guarantee that the information provided herein has not changed since the date the offering memorandum was prepared. It is the sole responsibility of the recipient to analyze, verify and conclude that the information provided herein is accurate and meets the recipient’s investment criteria. Iconic Investments and Owner, and their respective officers, directors, employees, equity holders and agents expressly disclaim any and all liability that may be based upon or relate to the use of the information contained within this Offering Memorandum.

Owner and Iconic Investments each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the property and/or terminate discussions with any entity at any time with without notice. Owner shall have no legal commitment or obligations to any recipient reviewing the offering memorandum or making an offer to purchase the property unless and until such offer is approved by Owner, a written agreement for the purchase of the property has been fully executed, delivered and approved by Owner and its legal counsel, and any obligations set by Owner thereunder have been satisfied or waived.

The recipient agrees that (a) the Offering Memorandum and its contents are confidential information, except for such information contained in the Offering Memorandum that is a matter of public record or is provided from sources made available to the public, (b) the Recipient will hold and treat it in the strictest of confidence, and the Recipient and the need to know parties will not directly or indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity without prior written authorization of Iconic Investments and the Owner.

CONFIDENTIALITY & DISCLAIMER

I C O N I CEXCELLENCE IN REAL ESTATE


3 THE COMMONWEALTH APARTMENTS

Investment Overview 6Property Overview 7Location Overview 12Financial Underwriting 18Rent Survey 21

AGENT CONTACT

PETER STRAUSSPartnero: 747-444-3303m: [email protected] #01335696

16530 Ventura BlvdSuite 409Encino, CA 91436

ADAM ZUNDERFirst Vice Presidento: 747-214-0470m: [email protected] #01821053


322 S COMMONWEALTH AVETABLE OF CONTENTS


THE COMMONWEALTH APARTMENTS4

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THE COMMONWEALTH322 S. Commonwealth Ave is a 12-unit, 2-story apartment building offering investors the opportunity to renovate vacant units and attract higher paying tenants.



investment overview 322 S COMMONWEALTH AVERENOVATION OPPORTUNITY IN KOREATOWN



PROPERTY OVERVIEWIconic Investments is pleased to exclusively offer for sale, The Commonwealth Apartments, a 12-unit multifamily property located at 322 S. Commonwealth Avenue in Los Angeles’ thriving cultural hub community of Koreatown. The Commonwealth Apartments provides significant upside opportunity to investors seeking to capitalize on the soaring popularity and continuing rapid growth of this submarket.

The Commonwealth Apartments is comprised of eight (8) one-bedroom/one-bathroom and four (4) two-bedroom/two-bathroom units. The ideal unit mix and strong location presents an opportunity for a renovation-oriented buyer to remodel and reposition the property to offer a new generation of renters with a well-appointed alternative to the pricey new construction offerings surrounding the property.

In light of robust renter demand, Koreatown is experiencing an explosion in residential development. The Commonwealth is surrounded by many new developments:

• Next on Sixth, a 398-unit Class-A development, which includes a 20,000 square foot Target (Completed)

• 20-story $300-million dollar office tower at 510 S. Vermont - (Under-Construction)

• Jamison Properties’ 2900 Wilshire Boulevard development with 641 apartments and 18,500 square feet of retail space (Under-Construction)

12Opportunity to Reposition

12 Apartment Units

3 Near 3 Metro Stations

Wilshire/WesternWilshire/Normandie

Wilshire/Vermont

4 3 Major Employment Hubs 750k Jobs - Within 4 Miles



INVESTMENT OVERVIEWAddress 322 S Commonwealth Ave

Los Angeles, CA 90020

SUBMARKET Koreatown

Assessor Parcel Number 5501-022-016

IMPROVEMENTS 12 Apartment Units

YEAR BUILT 1962

Estimated Land Area 8,793 Square Feet

BUILDING SIZE 11,438 Square Feet

UTILITIES Individually Metered

PARKING 14 Spaces

ZONING LAR4

PARCEL MAP

Downtown LA

OCCIDENTAL BLVD

WILSHIRE BLVDHOOVER ST

3RD ST

COMMONWEALTH AVE

los feliz


COMMONWEALTH APARTMENTS

322 S COMMONWEALTH AVE



MAP OF THE AREA



322 S COMMONWEALTH AVELOCATION overview



KOREATOWN HIGHLIGHTS

WHY KOREATOWN?

CENTRALLY LOCATED - SUPER HIGH DENSITY - 3 SQUARE MILE COMMUNITY | RAPIDLY EXPANDING RENTAL MARKET - 5000+ APARTMENTS IN DEVELOPMENTTRUE TRANSPORTATION ORIENTED COMMUNITY - NUMEROUS SUBWAY OPTIONS | RICH IN AMENITIIES - RESTAURANTS, RETAIL, ENTERTAINMENT



LOCATION HIGHLIGHTSKOREATOWN IS BOOMINGKoreatown is leading apartment building development in Los Angeles, with over 5,000 luxury apartment units either in planning stages or currently under construction. Developer Jamison Services is currently working on several major projects in the area, including a two-tower, 641-unit mixed-use apartment and retail complex at 2900 Wilshire Blvd, and is in planning stages for two other major developments within blocks. Also, in close proximity to The Commonwealth Apartments is a 20-story, $300 million, office project currently under construction at 510 S. Vermont Ave. Completed in 2017, Next on Sixth (6th and Virgil), brought 398 Class-A luxury units along with a 20,000 square foot Target to the area.

LOCATION FUNDAMENTALSMillennials have ditched the suburbs for a more active and dynamic urban lifestyle. Many don’t own or want to own cars, so they rely on walking, biking, Metro or Uber.

There is a highly limited supply of housing in Los Angeles, and especially in Koreatown, which is causing upward pressure on rents. In fact, rental rates are expected to increase by 25% over the next five years, according to Axiometrics.

NEW YORK IN LAThe Metro has been a catalyst for transportation-oriented growth, leading to demographic shifts in areas like Downtown LA, Koreatown, Hollywood and Pasadena. LA residents now have a greater choice in where they live while still being connected to major employment hubs.

Residents of Sanctuary on Kingsley can walk to three metro stations: Vermont/Beverly, Wilshire/Vermont and Wilshire/Normandie. That gives them easy access to a number of key lines:

• The Purple Line provides access to Downtown LA to the east and is being extended through Miracle Mile, Beverly Hills, Century City and Westwood.

• The Red Line provides access to Downtown LA in the east and Hollywood and North Hollywood to the northwest.

• The Expo Line, dubbed the “subway to the sea,” extends from Downtown LA to the beaches of Santa Monica and Silicon Beach employment hubs.

• The Gold Line allows residents to travel to cities like Pasadena and Azuza.



LOCATION HIGHLIGHTSAFFORDABILITY GAP – BUY VS RENTThe median neighborhood home price is over $825,000, with adjacent markets approaching $1 million, making home purchase out of reach for most local renters. Renting at Sanctuary on Kingsley offers tenants a modern, sophisticated alternative at a fraction of the cost of home ownership. This disparity is a leading reason behind high occupancy and demand throughout the marketplace.

MOST SEARCHED NEIGHBORHOODKoreatown is the #1 searched-for rental market in Los Angeles, well ahead of other popular submarkets such as Hollywood, West Los Angeles and Mid-City, according to the online property rental site Zumper.com. The convergence of gourmet-restaurants, shopping and chic hotels like The Line is a leading reason behind Koreatown’s emergence as “America’s Hippest Neighborhood.”

URBAN LIVING WITH WALKABILITYDensely-populated, Koreatown is a sprawling three-square-mile community in the middle of the city. It is a highly walkable submarket served by multiple subway and bus lines. Residents can travel on foot to complete their daily errands and stroll to the many restaurants, clubs, chic hotels and restaurants that make up Koreatown’s vibrant nightlife. While there is a newness to Koreatown, its palm-lined streets are also rich in architectural charm and cultural heritage.

Grocery Stores Fitness & Spa Entertainment & ShoppingRalphs Yoga Works Target 6th and Virgil

H Mart Whole Body Pilates Wiltern

Hank Kook Strength RX Crossfit Shrine Karaoke

Zion Market WilFit Sports Club Koreatown Galleria

Galleria Market Fitness M Vermont Galleria

Jons Marketplace Flywheel Sports Koreatown Plaza

Vons 24 Hour Fitness

California Market Movement Pilates

Plaza Market Taejo Kickboxing

Sang Nok Soo Wi Spa

Asian Market Beverly Hot Springs

Family Discount Store Orange Theory Fitness

East West Market

Restaurants & Bars & Hotels Within Driving DistancePot Lobby Bar Larchmont Village

Lock & Key Staples Center/ LA Live

Mountain Café Walt Disney Concert Hall

Beer Belly Broad Museum

The Normandie Club Griffith Observatory

Cassell’s Burgers ArcLight Cinemas

Apt 503 Lounge 7th & Fig

The Virgil MOCA

Sumo Dog Dodger Stadium

Horse’s Mouth Natural History Museum

Line Hotel

Hotel Normandie

Shelter Hotel16 SANCTUARY ON KINGSLEY

KOREATOWN AREA AMENITIES

"AMERICA'S HIPPEST NEIGHBORHOD"

Despite it’s name, the population of Koreatown is highly

diversified with only one-third of local residents claiming

Korean descent. The Commonwealth residents can enjoy

the nearby eclectic mix of bars, restaurants, entertainment

venues and shops. New thriving hipster hangouts include

the Line Hotel with its two popular bars,

Break Room 86 and Pot.

1 3033 Wilshire Blvd UDR’s 190-unit apartment building at 3033 Wilshire Blvd

2 Element 436 Element 436, a 74-unit condo building, all units sold

3 The Vermont The Vermont, a 464-unit apartment building with retail.

4 Creative Office Modern creative and retail space, currently under lease-up

5 Next of 6th Next on 6th, a 398-unit apartment property with a 20,000-square-foot Target.

6 510 S Vermont 500,000 square foot office space at 5th and Vermont (under construction)

7 2900 Wilshire Blvd Developer Jamison Services, 644-unit apartment building (under construction)

DEVELOPMENT PROJECTS

2900 WILSHIRE BLVD

NEXT ON 6TH ST

ELEMENT 436



FINANCIAL UNDERWRITING 322 S COMMONWEALTH AVE




RENT ROLL

UNIT MIX SUMMARY

UNIT TYPE # OF UNITS

AVG SQUARE

FEET

AVERAGE CURRENT

RENTS

RENT$/SF

CURRENT MONTHLY INCOME

AS-IS MARKET RENTS

AS-IS MARKET

$/SF

AS-IS MARKET

MONTHLY INCOME

RENOVATED MARKET RENTS

RENOVATED MARKET

$/SF

RENOVATED MARKET MONTHLY

INCOME

1 Bedroom + 1 Bath 8 800 $1,192 $1.49 $9,539.42 $1,500 $1.88 $12,000 $1,795 $2.24 $14,360

2 Bedroom + 2 Bath 4 1050 $1,395 $1.33 $5,580 $1,950 $1.86 $7,800 $2,295 $2.19 $9,180

Totals/Averages 12 883 $1,260 $1.44 $15,119 $1,650 $1.87 $19,800 $1,962 $2.22 $23,540

CURRENT RENOVATED

Unit # Unit Type Unit Sq. Ft Current Rent Per Sq. Ft As-Is Market Rent Per Sq. Ft Renovated

Market Rent Per Sq. Ft

1 1 Bedroom + 1 Bath 800 $1,104.72 $1.38 $1,500 $1.88 $1,795 $2.24

2 1 Bedroom + 1 Bath 800 $968.58 $1.21 $1,500 $1.88 $1,795 $2.24

3 1 Bedroom + 1 Bath 800 $983.01 $1.23 $1,500 $1.88 $1,795 $2.24

4 1 Bedroom + 1 Bath 800 $970.91 $1.21 $1,500 $1.88 $1,795 $2.24

5 2 Bedroom + 2 Bath 1050 $1,439.66 $1.37 $1,950 $1.86 $2,295 $2.19

6 2 Bedroom + 2 Bath 1050 $1,236.21 $1.18 $1,950 $1.86 $2,295 $2.19

7 1 Bedroom + 1 Bath 800 $1,236.21 $1.55 $1,500 $1.88 $1,795 $2.24

8 1 Bedroom + 1 Bath 800 $1,236.21 $1.55 $1,500 $1.88 $1,795 $2.24

9 1 Bedroom + 1 Bath 800 $1,806.11 $2.26 $1,500 $1.88 $1,795 $2.24

10 1 Bedroom + 1 Bath 800 $1,233.67 $1.54 $1,500 $1.88 $1,795 $2.24

11 2 Bedroom + 2 Bath 1050 $1,451.86 $1.38 $1,950 $1.86 $2,295 $2.19

12 2 Bedroom + 2 Bath 1050 $1,451.86 $1.38 $1,950 $1.86 $2,295 $2.19

TOTAL 12 $15,119 $1.44 $19,800 $1.87 $23,540 $2.22



METRICSPROPERTY OVERVIEW

Property Address 322 S Commonwealth

Los Angeles, CA 90020

Assessor Parcel Number 5501-022-016

Market Los Angeles

Sub-Market Koreatown

Zoning LAR4

Number of Units 12

Year Built 1962

Gross Square Feet 11,438

Lot Size 8,793

INVESTMENT OVERVIEW

Purchase Price $3,300,000

Price Per Unit $275,000

Price Per Square Foot $288.51

FINANCING OVERVIEW

OPERATIONS OVERVIEWINCOME CURRENT AS-IS MARKET RENOVATED MARKET

Scheduled Market Rent $181,428 $237,600 $282,480

Less: Vacancy 3.00% ($5,443) ($7,128) ($8,474)

Subtotal: Effective Rental Income $175,985 $230,472 $274,006

Other Income

Plus: Laundry Income $1,800 $1,800 $1,800

Plus: Miscellaneous Fees $350 $350 $350

Plus: LAHD Registration/SCEP Reimbursement $667 $667 $667

Subtotal: Total Other Income $1,017 $1,017 $2,817

EFFECTIVE GROSS INCOME $177,002 $231,489 $276,823

EXPENSESFixed Expenses

Off-Site Management 4.00% $7,039 $9,219 $10,960

Property Tax 1.19% $39,336 $39,336 $39,336

Property & Liability Insurance $5,700 $5,700 $5,700

Subtotal: Fixed Expenses $53,275 $55,455 $57,196

Controllable Expenses

LAHD Fees & Administrative Costs $1,000 $1,000 $1,000

Repairs & Maintenance $550 $6,600 $6,600 $6,600

Utilities $10,800 $10,800 $10,800

Rubbish Removal $4,800 $4,800 $4,800

Landscaping $960 $960 $960

Pest Control $720 $720 $720

Direct Assessments $1,200

Subtotal : Controllable Expenses $24,880 $24,880 $24,880

TOTAL EXPENSES ($78,155) ($80,335) ($82,076)

NET OPERATING INCOME $98,847 $151,154 $194,747

Capital Reserves $200 ($2,400) ($2,400) ($2,400)

Debt Service ($82,527) ($82,527) ($82,527)

NET CASH FLOW $13,920 $66,227 $109,819

0.77% 3.65% 6.05%

Principal Reduction $27,306 $27,306 $27,306

TOTAL RETURN $41,226 $93,533 $137,125

2.27% 5.15% 7.56%

Down Payment $1,815,000

Loan Amount $1,485,000

Loan to Value % 45.00%

Debt Coverage Ratio 1.20

Loan Type Fully Amortizing

Loan Rate 3.75%

Loan Term 5 Years

INVESTMENT RETURNS

GRM - Current 18.19

CAP Rate - Current 3.00%

GRM - Market 13.89

CAP Rate - Market 4.58%

GRM - Renovated 11.68

CAP Rate - Renovated 5.90%

* Expenses are estimated. Buyer to verfiy.



322 S COMMONWEALTH AVERENT SURVEY




Property Units Year Built Parking Renovated Individually Metered Type Rent SF Rent/SF

322 S. Commonwealth Ave 12 1962 Yes No Yes 1 Bedroom/1 Bath $1,795 800 $2.24

501 S. Kenmore Ave 10 1964 Yes No Yes 1 Bedroom/1 Bath $1,695 600 $2.83

464 S. Berendo St 8 1963 Yes No Yes 1 Bedroom/1 Bath $1,600 700 $2.29

316 S. Hampshire Ave 10 2005 Yes Semi Yes 1 Bedroom/1 Bath $1,700 600 $2.83

523 S. Mariposa Ave 24 1964 Yes Semi Yes 1 Bedroom/ 1 Bath $1,695 650 $2.61

932 S. Westmoreland Ave 32 1964 Yes Semi Yes 1 Bedroom/ 1 Bath $1,750 750 $2.33

725 S. New Hampshire Ave 16 1951 Yes Yes Yes 1 Bedroom/ 1 Bath $1,750 600 $2.92

450 S. La Fayette Pl 51 1979 Yes Yes Yes 1 Bedroom/1 Bath $2,295 850 $2.70

322 S. Commonwealth Ave 12 1962 Yes No Yes 2 Bedroom/2 Bath $2,295 1050 $2.19

310 S. Kenmore Ave 24 1988 Yes Yes Yes 2 Bedroom/2 Bath $2,350 1000 $2.35

316 S. New Hampshire Ave 8 1909 Yes Yes Yes 2 Bedroom/2 Bath $2,400 900 $2.67

504 S. Normandie Ave 24 1959 Yes No Yes 2 Bedroom/2 Bath $2,100 894 $2.35

401 S. La Fayette Pl 56 2001 Yes Yes Yes 2 Bedroom/2 Bath $2,615 870 $3.01

RENT SURVEY

THE COMMONWEALTH322 S Commonwealth

501 S. Kenmore Ave

450 S. La Fayette Pl

401 S. La Fayette Pl

310 S. Kenmore Ave

464 S. Berendo St

504 S. Normandie Ave

523 S. Mariposa Ave

725 S. New Hampshire Ave

932 S. Westmoreland Ave

316 S. New Hampshire Ave



RENT SURVEY

AGENT CONTACTPETER STRAUSSPartnero: 747-444-3303m: [email protected] #01335696



ADAM ZUNDERFirst Vice Presidento: 747-214-0470m: [email protected] #01821053


RENOVATION OPPORTUNITY IN KOREATOWN · Millennials have ditched the suburbs for a more active and...

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