NORTHRIDGE, CA 91325
9027 LINDLEY AVE
www.KellyMorganCommercial.com COMMERCIAL GROUP KELLY MORGAN
Confidentiality Agreement
Affiliated Business Disclosure
The information contained in the following Offering Memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from KW Commercial and it should not be made available to any other person or entity without the written consent of KW Commercial. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the Offering Memorandum. If you have no interest in the subject property at this time, please return this Offering Memorandum to KW Commercial.
Confidentiality Agreement
This Offering Memorandum has been prepared to provide summary, unverified financial and physical 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. KW Commercial 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, PCBs or asbestos, the compliance with local, 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 Offering Memorandum has been obtained from sources we believe to be eliable; however, KW Commercial has not verified, and will not verify, any of the information contained herein, nor has KW Commercial 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. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.
All potential buyers are strongly advised to take advantage of their opportunities and obligations to conduct thorough due diligence and seek expert opinions as they may deem necessary, especially given the unpredictable changes resulting from the continuing COVID-19 pandemic. KW Commercial has not been retained to perform, and cannot conduct, due diligence on behalf of any prospective purchaser. KW Commercial’s principal expertise is in marketing investment properties and acting as intermediaries between buyers and sellers. KW Commercial and its investment professionals cannot and will not act as lawyers, accountants, contractors, or engineers. All potential buyers are admonished and advised to engage other professionals on legal issues, tax, regulatory, financial, and accounting matters, and for questions involving the property’s physical condition or financial outlook. Projections and pro forma financial statements are not guarantees and, given the potential volatility created by COVID-19, all potential buyers should be comfortable with and rely solely on their own projections, analyses, and decision-making.)
KELLY MORGAN 310.836.3638 Kelly@KellyMorganCommercial.com www.KellyMorganCommercial.com CA DRE# 01898026
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THE ASSET FINANCIAL SUMMARY NUMBER OF UNITS UNIT MIX BUILDING SF LOT SF YEAR BUILT / EFFECTIVE APN SALE PRICE GRM CAP PRICE/UNIT PRICE/SF 4 1 (S) | 2 (1+1) | 1 (3+2 SFR) ± 2,944 ± 6,655 1966 / 2023 2769-011-019 $1,595,000 13.63 5.43% $398,750 $542
Property Summary
OPPORTUNITY HIGHLIGHTS
Four brand new units, 2-minute walk to Cal State Northridge
Three of the units are not subject to LA City rent control
5.43 % Cap Rate | 15% IRR Perfect Owner Occupy Opportunity
Close proximity to the Northridge Hospital Medical Center
Up the road from the Northridge Fashion Center
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9027 LINDLEY AVE LOCATION OVERVIEW
CALIFORNIA NORTHRIDGE
ABOUT THE AREA
Northridge is a neighborhood in the San Fernando Valley region of the City of Los Angeles. The community is home to California State University, Northridge, and the Northridge Fashion Center. Near the northwest edge of the San Fernando Valley, nestled between Chatsworth, Porter Ranch, the Granada Hills, and Reseda, Northridge combines urban living with access to the natural beauty of the surrounding countryside, including the nearby Chatsworth Reservoir and Lake Balboa. With a population of more than 60,000 people according to L.A. Department of City Planning, Northridge is considered highly diverse for the area and is among the best neighborhoods in Los Angeles County. Alongside some of the best public and private schools in the region, Northridge is also home to the Northridge Fashion Center, the largest shopping mall in the area, and Northridge Hospital Medical Center, one of only two hospitals in the San Fernando Valley certified for treating life-threatening injuries. CSU Northridge is home to the CSUN Botanic Garden, as well as the Donald E. Bianchi Planetarium. Residents of Northridge enjoy the local Recreation Center as well as easy access to nearby parks and protected natural areas such as the Chatsworth Reservoir. The neighborhood is home to dozens of restaurants, many of them oncentrated along Reseda Blvd., and there are plenty of coffee shops near the CSUN campus.
DEMOGRAPHICS
43,055
Population
$721,823 Median Home Value
$2,103 Median Rest
Northridge, California, presents an unparalleled investment opportunity for apartment building buyers. The synergy between Cal State Northridge (CSUN), the Northridge Fashion Center, and the Northridge Hospital Medical Center ensures a consistent and diverse tenant base, while the region’s stability and growth potential promise a secure and prosperous investment.
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CSUN Proximity to
The subject property’s close proximity to CSUN, one of California’s largest universities, ensures a steady demand for rental properties. With over 40,000 students, faculty, and staff, CSUN generates a consistent pool of prospective tenants, making your investment in an apartment building a secure and lucrative venture. California State University, Northridge, with over 40,000 students, means a constant demand for rentals.
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Northridge
The Northridge Fashion Center is not just a shopping destination; it’s a beacon for consumers and apartment seekers alike. Adjacent to this bustling retail hub, your apartment building will benefit from the steady foot traffic, increased property values, and convenience that this lifestyle center offers.
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FASHION CENTER 22
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Northridge
HOSPITAL MEDICAL CENTER
The Northridge Hospital Medical Center is a pillar of the community, providing essential healthcare services to residents. Investing near this medical facility ensures a steady demand for housing, particularly from healthcare professionals, support staff, and families seeking proximity to quality medical care.
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FINANCIAL ANALYSIS
9027 LINDLEY AVE
FINANCIAL ANALYSIS
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Summary Current Rents Market Rents Proposed Financing Price $1,595,000 First Loan Amount $909,150 NEW Down Payment 43% $685,850 Terms 6.80% 5YR Number of Units 4 $150,000 Cost per Unit $398,750 GRM 13.63 13.49 CAP 5.43% 5.50% CURRENT MARKET Year Built / Age 2023 (ADUs added, Fully renovated SFR) Approx. Lot Size 6,655 $379,167 Approx. Bldg SF 2,944 10.37 Cost per Net RSF $542 6.86% No. of Units Bdrms/ Baths Approx. Sq. Ftg. Monthly Rent/Unit ($) Monthly Income ($) Monthly Rent/Unit ($) Monthly Income ($) 1 S 528 $1,900 $1,900 $1,900 $1,900 2 1+1 608 $2,125 $4,250 $2,150 $4,300 1 3+2 SFR 1200 $3,600 $3,600 $3,650 $3,650 Total Scheduled Rent $9,750 $9,850 Scheduled Income Current Rents Market Rents
ANNUALIZED OPERATING DATA
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Total Gross Current Monthly Rents Current Market Total Scheduled Rent $9,750 $9,850 Monthly Scheduled Gross Income $9,750 $9,850 Annualized Scheduled Gross Income $117,000 $118,200 Annualized Operating Data Current Market Scheduled Gross Income $117,000 $118,200 Vacancy Rate Reserve ($3,510) 3.0% ($3,546) 3.0% Gross Operating Income $113,490 $114,654 Expenses ($26,905) 23.0% ($26,905) 23.0% Net Operating Income $86,586 $87,750 Loan Payments ($71,124) ($71,124) Pre-Tax Cash Flow $15,462 2.25% $16,626 2.42% Principal Reduction $13,637 $13,637 Total Return $29,099 4.24% $30,263 4.41% Estimated Expenses Current Market Taxes $19,938 $19,938 Insurance $2,567 $2,567 Utilities $2,400 $2,400 Misc/Rsrvs $1,000 $1,000 Maint/Rprs $1,000 $1,000 Total Expenses $26,905 $26,905 Total Expenses ($26,905) ($26,905) Per Net Sq. Ft. ($9.14) ($9.14) Per Unit ($6,726) ($6,726)
CASH FLOW ANALYSIS
**The figures above are merely projections to be verified by Buyer. Seller and his/her representative do not warrant the accuracy of these figures. Buyer to conduct his/her own due diligence.
Cash Flow Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Disposition Cash Flow Scheduled Gross Income $117,000 $122,850 $128,993 $135,442 $142,214 $149,325 Vacancy Rate Reserve ($3,510) ($3,686) ($3,870) ($4,063) ($4,266) ($4,480) Capital Improvement Recoup From Tenants Gross Operating Income $113,490 $119,165 $125,123 $131,379 $137,948 $144,845 Estimated Expenses ($26,905) ($27,712) ($28,543) ($29,399) ($30,281) ($31,190) Net Operating Income $86,586 $91,453 $96,580 $101,980 $107,667 $113,656 ADU Construction Costs Exterior Rehab Interior Rehab Loan Payments ($71,124) ($71,124) ($71,124) ($71,124) ($71,124) ($71,124) Pre-Tax Cash Flow $15,462 $20,329 $25,456 $30,856 $36,543 $42,532 Pre-Tax Cash on Cash Return 2.25% 2.96% 3.71% 4.50% 5.33% 6.06% Principal Reduction $13,637 $14,637 $15,637 $16,637 $17,637 $18,637 Property Value $1,829,057 $1,931,595 $2,039,592 $2,153,331 $2,273,110 Cap Rate Cash at Sale in Year 5 $1,317,125 Cash Flow Stream (Pre-Tax) ($685,850) $15,462 $20,329 $25,456 $30,856 $36,543 $1,359,657 Average Annual ROI (Return on Investment) 23% $160,491 Total 5 Year ROI 117% $802,453 IRR (Compounding Average Annual Return) 15% Rent Increase Assumption 5.00% Disposition Cap Rate 5.00% Total Principal Reduction $78,186
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Unit Unit Type Move-In Dates Approx. Sq. Ft. Current Rent 9025 1+1 09/01/23 608 $2,100 9025 1/2 1+1 vacant-pf 608 $2,150 9027 3+2 SFR 08/18/23 1,200 $3,600 9029 S vacant-pf 528 $1,900 Totals $9,750 Monthly $9,750 Annually $117,000
RENT ROLL
9027 LINDLEY AVE SOLD COMPARABLES
YEAR BUILT 2023
BUILDING SF 2,944
UNITS 4
SALE DATESALE PRICE $1,595,000
GRM 13.63
CAP RATE 5.43% PRICE/UNIT $398,750 PRICE/SF $542
Sold Comparables
17512 OSBORNE ST, NORTHRIDGE
YEAR BUILT 1953
BUILDING SF 5,984
UNITS 4
SALE DATE 10/03/22
SALE PRICE $2,575,000
GRM 15.78
CAP RATE 4.22% PRICE/UNIT $643,750 PRICE/SF $430
UNIT MIX
2 (1+1) 1 (2+2) 1 (3+4)
UNIT MIX
1 (S) 2 (1+1) 1 (3+2)
9027 LINDLEY AVE, NORTH HILLS
8924 HASKELL AVE, NORTH HILLS
YEAR BUILT 1951
BUILDING SF 3,934
UNITS 4
SALE DATE 08/01/23
SALE PRICE $1,570,000
GRM 15.04
CAP RATE 3.78%
PRICE/UNIT $392,500
PRICE/SF $399
Sold Comparables
7842 LASAINE AVE, NORTHRIDGE
YEAR BUILT 1951
BUILDING SF 2,692
UNITS 3
SALE DATE 05/04/23
SALE PRICE $1,500,000
GRM 12.50
CAP RATE 5.34%
PRICE/UNIT $500,000
PRICE/SF $557
UNIT MIX
1 (1+1) 1 (2+2) 1 (4+3)
UNIT MIX
2 (1+1) 2 (2+2)
Sold Comparables
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Sold Comparables
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1 9027 LINDLEY AVE
2 17512 OSBORNE ST
3 8924 HASKELL AVE
4 7842 LASAINE AVE
RENT COMPARABLES
9027 LINDLEY AVE
36 SINGLE ONE BEDROOM THREE BEDROOM ADDRESS Unit Mix Price Unit Mix Price Unit Mix Price 1 9810 Zelzah Ave, Northridge, CA 91325 s $1,850 View Online 2 10201 Lindley Ave, Northridge, CA 91325 s $2,301 View Online 3 17171 Roscoe Blvd, Northridge, CA 91325 s $1,950 View Online 4 9810 Zelzah Ave, Northridge, CA 91325 1+1 $2,195 View Online 5 9131 Darby Ave, Northridge, CA 91325 1+1 $2,495 View Online 6 10201 Lindley Ave, Northridge, CA 91325 1+1 $2,301 View Online 7 9131 Darby Ave, Northridge, CA 91325 3+2 $4,895 View Online 8 18418 Dearborn St, Northridge, CA 91325 3+2 $3,700 View Online 9 18524 Mayall St Unit D Los Angeles, CA 91324 3 BDR $3,600 View Online Rent Comparables
Rent Comparables
1 9810 Zelzah Ave, Northridge, CA 91325
2 10201 Lindley Ave, Northridge, CA 91325
3 17171 Roscoe Blvd, Northridge, CA 91325
4 9810 Zelzah Ave, Northridge, CA 91325
5 9131 Darby Ave, Northridge, CA 91325
6 10201 Lindley Ave, Northridge, CA 91325
7 9131 Darby Ave, Northridge, CA 91325
8 18418 Dearborn St, Northridge, CA 91325
9 18524 Mayall St Unit D Los Angeles, CA 91324
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KELLY MORGAN
With over 20 years of focused exploration and experience in capital markets such as Equity, Debt and Real Estate combined with Advertising and Marketing, Kelly Morgan Commercial Group brings a unique and unparalleled approach to the marketplace. We have dedicated ourselves to the deep understanding of the Southern California real estate market by taking the time to walk, examine, and analyze our landscape of submarkets.
Our clients best interest is our priority. Real estate marketing intelligence infused with financial planning has allowed us to help our clients make informed decisions about their real estate investment options. Our educated agents work hard to get our sellers the highest price. Relationships and expertise are keys to creating Investment Property Wealth.
KELLY MORGAN
310.836.3638
Kelly@KellyMorganCommercial.com www.KellyMorganCommercial.com CA DRE# 01898026