RARE COASTAL LEASED INVESTMENT OPPORTUNITY MULTI-TENANT MIXED USE / SELF STORAGE OFFERING MEMORANDUM Exclusively Offered By: ±17,500 SQ. FT. 1648/1652 NEWPORT BLVD. COSTA MESA, CA Trent Walker Executive Vice President Lic #00964476 949.263.5342 [email protected]Eric Arnold Associate Lic #01963524 949.263.5326 [email protected]
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RARE COASTAL LEASED INVESTMENT OPPORTUNITY MULTI …...Newport Blvd. Costa Mesa, CA. An Approximate 17,500 square foot mixed use property featuring retail and office units fronting
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The OfferingVoit Real Estate Services is pleased to offer for sale the fee interest in 1648-1652 Newport Blvd. Costa Mesa, CA. An Approximate 17,500 square foot mixed use property featuring retail and office units fronting Newport Boulevard and a unique storage component. This property has been extensively rehabbed and with short term leases, offers upside in lease rate appreciation.
• Highly desirable coastal location adjacent to affluent neighborhoods (most of tenant are wealthy, long term occupants that live near by
• Irreplaceable property - Not possible to build same project on the site
• Income upside – 20% in next 12-18 months
• No “true” competition- The mini storage units are much larger than any of the vicinity competition, and are ground level with higher ceiling clears of 12ft, so more cubic volume than others.
• Ability to store tall vehicles, boats, etc. that competitors can’t accomodate.
TOTAL BUILDING SIZE ±17,500 Square Feet
LAND AREA ±36,155 SF (.83 Acres)
NUMBER OF BUILDINGS Three (3)
TENANTS
• Storage on Newport @ 17 • EOS Coffee Shop • Meddock Interiors • GJD Whole Sale Automotive • Specialty Pipline • Hair Salon.
LEASE TYPEAIR Standard Commercial Single-Tenant Lease-Net & Self Storage Contracts
CURRENT GROSS INCOME $468,977
PROJECTED GROSS INCOME $587,706
ASKING PRICE $7,950,000.00
EXISTING CAP RATE 4.4%
PROFORMA CAP RATE 5.8%
Property Overview
PROPERTY OVERVIEw 6
Property Description
BUILDING SIZE ±17,500 Square Feet
LAND AREA ±36,155 Square Feet (.83 Acres)
OFFICE AREA ±1,070 Square Feet
RETAIL AREA ±800 Square Feet
PARKING 11 Stalls (Street parking allowed on Newport Blvd.)
YEAR BUILT1972/2019 - Retail buidling taken down to the studs and storage units expanded by four (4) units in 2019
WAREHOUSE CEILING HEIGHT 12’'
CONSTRUCTION TYPE Wood Frame
NUMBER OF FLOORS One (1)
PARCEL NUMBER 425-423-17
ELECTRICAL SERVICE 50 - 200 AMPS
ZONING C1
HVACEOS Coffe Shop - Central / NEW Mini Split Heat pumps in 1648 A-B-C-D
SELF STORAGE Fenced
PROPERTY OVERVIEW8
Total Sheet Count: 22A-002 SITE PLAN : Plotted on 9/27/18 at 3:01 PM by Gregory Nutt. File Path: /Volumes/McNaughten Media/Kemmerer Design Arch/Newport Blvd. Buildings/NB Blvd Bldg ArchiCAD Models/NBB_6A.pln
45 STORAGE UNITS @ 1 SPACE PER 200 UNITS = 2 2MINIMUM 2 SPACES REQUIRED
TOTAL = 11 12
Total Sheet Count: 22A-002 SITE PLAN : Plotted on 9/27/18 at 3:01 PM by Gregory Nutt. File Path: /Volumes/McNaughten Media/Kemmerer Design Arch/Newport Blvd. Buildings/NB Blvd Bldg ArchiCAD Models/NBB_6A.pln
Net Operating Income $349,318 $463,298*Property Taxes assume a purchase price of $7,950,000
Property Management (4%)
Cash Flow
FINANCIAL ANALYSIS14
1648 - 1652 NEWPORT BLVDCurrent/Profoma Income Analysis
Retail/Office Space
Unit SF Start DateExpiration
DateBase Rent /
MonthRecoveries
Market Rate / Month
% Below Market
1648-A 420 Current 6/30/2020 $1,700 Base Year $3,000 43%1648-B 250 Current 9/30/2020 $1,025 Base Year $1,750 41%1648-C 200 Current 12/31/2020 $1,500 Base Year $1,500 0%1648-D 200 Current MTM $1,000 Base Year $1,500 33%
1652 800 Current 9/31/2021 $3,200 Base Year $5,000 36%Total $8,425 $12,750 34%
Storage Units
Unit Type SF # of Units Start DateExpiration
DateRent / Unit /
MonthMarket Rate / Unit / Mo.
% Below Market
Type A 200 4 Current 12/31/2020 $500 $550 9%Type B 336 23 Current MTM $672 $800 16%Type C 280 1 Current 9/30/2021 $500 $600 17%Type D 288 20 Current MTM $576 $700 18%Type E 384 2 Current MTM $768 $875 12%Type F 192 1 Current MTM $500 $525 5%
Total 51 Total $31,512 $37,475 16%
Rent roll
Market Overview
MARkET OVERVIEw MARkET OVERVIEw17
Sale Comparables1 825 W 16th St SOLD
424-141-05
Newport Beach, CA 92663Sale Date:
Pro Forma CapRate:
Price/SF:Sale Price:
Actual Cap Rate:
$532.13$2,650,000 - Full Value01/10/2019 (127 days on mkt) Bldg Type:
Year Built/Age:RBA:
--
Parcel No:
Full Value
Class C IndustrialWarehouseBuilt 1960 Renov 2019 Age: 594,980 SF
Orange County
Research Status:Sale Conditions: -Comp ID: 4646820
2 212-218 E 17th St UNDER CONTRACT
Costa Mesa, CA 92627Asking Price:
Actual Cap Rate:
Days on Market:Price/SF:
177$1,442.40$7,300,000
Bldg Type:Bldg Status:
RBA:
4.01% Parcel No: 425-391-03, 425-391-04
RetailStorefrontBuilt 19575,061 SF
Orange County
Under ContractSale Status:
InvestmentSale Type:
Sale Conditions: Ground Lease (Leased Fee), Investment TripleNet
3 369 E 17th St - Westport Square (Part of Multi-Property) SOLD
Costa Mesa, CA 92627Sale Date:
Pro Forma CapRate:
Price/SF:Sale Price:
Actual Cap Rate:
$737.32$7,974,901 - Allocated09/16/2019 (370 days on mkt) Bldg Type:
Year Built/Age:RBA:
--
Parcel No:
Allocated
RetailFreestandingBuilt 1975 Age: 4410,816 SF
Orange County
Research Status:Sale Conditions: Ground Lease (Leasehold)Comp ID: 4884792
4 411 E 17th St SOLD
425-143-38
Costa Mesa, CA 92627Sale Date:
Pro Forma CapRate:
Price/SF:Sale Price:
Actual Cap Rate:
$675.23$4,335,000 - Full Value01/09/2018 (160 days on mkt) Bldg Type:
Year Built/Age:RBA:
--
Parcel No:
Full Value
RetailFreestandingBuilt 1963 Age: 556,420 SF
Orange County
Research Status:Sale Conditions: 1031 ExchangeComp ID: 4105516
Class C IndustrialWarehouseBuilt 1966 Age: 5310,311 SF
Orange County
Research Status:Sale Conditions: -Comp ID: 4957928
6 1518 Newport Blvd SOLD
425-341-43
Costa Mesa, CA 92627Sale Date:
Pro Forma CapRate:
Price/SF:Sale Price:
Actual Cap Rate:
$416.67$875,000 - Confirmed04/19/2019 (36 days on mkt) Bldg Type:
Year Built/Age:RBA:
--
Parcel No:
Confirmed
Class C OfficeBuilt 1956 Age: 632,100 SF
Orange County
Research Status:Sale Conditions: Purchase By TenantComp ID: 4750307
Copyrighted report licensed to Voit Real Estate Services - 689868. 1/22/2020
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5
6
MARKET OVERVIEW19
1
2
34
5
6
MARKET OVERVIEW20
self storage Lease Comparables
1 2 3
Storage on Newport @17th is less expensive than other vicinity centers plus provides larger / deeper / higher units to accommodate vehicles and boats that can’t be provided by other vicinity storage units.
Subject Property 1535 Newport Blvd., CM 1600 Superior Ave., CM 1604 Newport Blvd., CM
SSiizzee 10 x 20 x 12 (2,400 Cu.Ft.) 10 x 20 x 10 (2,000 Cu.Ft.) 12 x 12 x 9 (1,296 Cu.Ft.) 10 x 10 x 10 (1,000 Cu.Ft.)
PPrriiccee ppeerr CCUU.. FFTT.. $0.22 $0.19 $0.36 NA
SSiizzee 10 x 28 x 12 (3,360 Cu.Ft.) 8 x 26 x 10 (2,080 Cu.Ft.) 10 x 20 x 9 (1,800 Cu.Ft.) 10 x 15 x 10 (1,500 Cu.Ft.)
PPrriiccee ppeerr CCUU.. FFTT.. $0.18 NA $0.27 $0.21
SSiizzee 12 x 24 x 12 (3,456 Cu.Ft.) 10 x 24 x 10 (2,400 Cu.Ft.) 12 x 22 x 9 (2,376 Cu.Ft.) 10 x 19 x 10 (1,900 Cu.Ft.)
PPrriiccee ppeerr CCUU.. FFTT.. $0.18 NA $0.28 $0.27
SSiizzee 12 x 28 x 12 (4,032 Cu.Ft.) 10 x 30 x 10 (3,000 Cu.Ft.) 12 x 25 x 10 (3,000 Cu.Ft.)
PPrriiccee ppeerr CCUU.. FFTT.. $0.18 NA NA $0.23
MARkET OVERVIEw 21
1 2
3
self storage Lease Comparables MAP
MARkET OVERVIEwMARKET OVERVIEW23
Median Age35.3
orange county - airport area Market OverviewAirport Area continues to be among the most dynamic submarket in Orange County, along with Central County and neighboring South County. New sectors including finance, technology, and business services (evidenced by the Fortune 500 companies that have established a presence here) should help maintain stability in the submarket.
The Airport Area offers an array of development and expansion opportunities to both existing businesses and those seeking to relocate to Airport Area in the future. Through its many Business Attraction programs, Airport Area has become the number one location choice for companies of all types and sizes.
Airport Area is a dynamic and fast growing boasting state-of-the-art transportation programs and systems, an enterprising business environment, acclaimed community entertainment and recreation facilities, stellar educational institutions and, of course, great California weather. This rare combination adds up to an exceptional quality of life for people who live and work in Airport Area.
OC - AIRPORT AREA DEMOGRAPHIC HIGHLIGHTS
2019 POPULATION 959,757
2024 ESTIMATED POPULATION 990,387
GROWTH 2010 - 2019 6.42%
ESTIMATED GROWTH 2019 - 2024 3.19%
2019 MEDIAN AGE 35.3
2019 HOUSEHOLDS 303,701
2024 PROJECTED HOUSEHOLDS 312,637
ESTIMATED HOUSEHOLD GROWTH 2019 - 2024 2.94%
2019 MEDIAN HOUSEHOLD INCOME $82,898
2019 AVERAGE HOUSEHOLD INCOME $116,289
2024 PROJECTED MEDIAN HOUSEHOLD INCOME $97,253
2024 PROJECTED AVERAGE HOUSEHOLD INCOME $134,350
MARkET OVERVIEw 24
City of Costa Mesa Market Overview Since its incorporation in 1953, Costa Mesa has turned from quiet suburban community with deep farming roots to a world-class city featuring some of the best restaurants, retail centers, and cultural arts in the nation, in addition to being the capitol of the action sports industry. Costa Mesa has a Council/City Manager form of government. The 9.5 acre Civic Center is located at 77 Fair Drive. City Hall (right) is a five-story building where the primary City administrative functions are conducted. The Civic Center complex also includes the Council Chambers, the Police Facility, the Communications Building and Fire Stations No. 5.
Transportation and LocationThe City of Costa Mesa is located in central Orange County and encompasses 16.8 square miles. It is bordered by the cities of Santa Ana, Newport Beach, Huntington Beach, Fountain Valley, and Irvine. The City is approximately 37 miles southeast of Los Angeles, 88 miles north of San Diego, and 475 miles south of San Francisco. Costa Mesa is accessible from the San Diego Freeway (I-405), the Costa Mesa Freeway (SR-55), and the Corona del Mar Freeway (SR-73). Costa Mesa is a short drive to the Santa Ana Train Station, which provide easy access to Los Angeles, San Diego, and the Inland Empire. The Orange County Airport and Amtrak station are only minutes away.
HistoryLocated on the “coastal tableland” above Newport Beach, Costa Mesa’s first inhabitants were native American Indians who settled on the mesa near the banks of the Santa Ana River. Artifacts found here indicate that this site was a part of the village they knew as Lukup. World War II brought many thousands of people to the area for training at the Santa Ana Army Air Base, located on what is now the Orange County Fairgrounds; Orange Coast College; and the present site of the Civic Center. When the war ended, many of these men and women returned with their families to begin the population boom which continues today. On June 29, 1953, the city was incorporated and City Council-Manager form of government was chosen. The new city had an area of 3.5 square miles and a population of 16,840. Within 35 years, by 1988, the population had risen to 90,000 and the area to 17 square miles.
Total Population117,254
Number of Households41,873
COSTA MESA DEMOGRAPHIC HIGHLIGHTS
2019 POPULATION 117,254
2024 ESTIMATED POPULATION 121,209
GROWTH 2010 - 2019 6.58%
ESTIMATED GROWTH 2019 - 2024 3.37%
2019 MEDIAN AGE 34.9
2019 HOUSEHOLDS 41,873
2024 PROJECTED HOUSEHOLDS 43,141
ESTIMATED HOUSEHOLD GROWTH 2019 - 2024 3.03%
2019 MEDIAN HOUSEHOLD INCOME $78,514
2019 AVERAGE HOUSEHOLD INCOME $105,387
2024 PROJECTED MEDIAN HOUSEHOLD INCOME $92,407
2024 PROJECTED AVERAGE HOUSEHOLD INCOME $124,153
MARkET OVERVIEwMARKET OVERVIEW25
industrial Market Overview
Market Summary
AIRPORT AREA ORANGE COUNTY
COSTA MESA
NO. OF BUILDINGS 2,650 425
MARKET SIZE (SQ. FT.) 58,037,068 7,396,853
VACANCY RATE 3.12% 2.15%
SQ. FT. VACANT 1,813,081 158,817
AVAILABILITY RATE 4.34% 2.36%
SQ. FT. AVAILABILITY 2,516,922 174,670
OverallThe Airport Area is a unique part of Orange County, a daily destination for more than 110,000 employees and the home to more than 4,500 companies. Dating from the 1970s, the Airport Area/IBC was developed solely as a commercial and industrial center serving Southern California as a regional economic and employment base, including hotel, restaurant, commercial, retail, industrial and office uses. The Airport Area/IBC extends over 2,760 acres, making it the largest business complex in the Orange County region. The complex was originally designed as the bustling working machine for the city, creating a unique environment for economic growth and vitality. The boundaries of the Irvine Business Complex, located on the southwestern portion of the City of Irvine, are well defined. John Wayne Airport forms the northwestern boundary and San Diego Creek forms the southeastern boundary, with two arterial roads—Barranca Parkway and Campus Drive—forming the northeast and southwest boundaries of the Airport Area/IBC area roads - Barranca Parkway and Campus Drive – forming the northeast and southwest boundaries of the IBC area.
MARkET OVERVIEw 26
Airport Area – Airport Area is a fundamentally stable
submarket located in the middle of Orange County
and can lay claim to being its central employment
hub, along with neighboring Irvine Spectrum. Tech
and life science firms are prominent in the tenant
profile here and often work in concert with UC Irvine
Applied Innovation, which engenders cooperation
between students, staff, and local companies and
capital.
However, developers mostly focus on bringing
multifamily product to market, often chipping away at
industrial inventory in the process as buildings are
targeted for redevelopment. This helped drive rent
growth earlier in the cycle as the limited inventory left
was able to push rental rates. Investors remain active
in the submarket and regularly pay prices well above
the Orange County average.
High rents and steady annual rent growth are the
norm in Airport Area and help prop up the investment
market.
Vacancy
(86,136)
65,676
169,959
(373,703)
(8,840)
(73,181)(14,627)
33,476
611,232 569,309
660,264
545,897 491,994
556,661
651,885
512,940 558,510
715,438
-600,000
-400,000
-200,000
0
200,000
400,000
600,000
800,000
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Net Absorption Gross Absorption
2.76% 2.65%2.36%
3.00% 3.02%3.37%
4.03% 4.17%
3.12%
5.52%
4.94% 4.90%
5.45%
4.71% 4.65%
5.30% 5.44%
4.34%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Vacancy Availability
Vacancy & Availability Rates
Absorption
Market Statistics vs. Previous Year
Lease Rates
Net Absorption
Rental Rates
Triple Net (NNN) Average Asking Rates per Month per Sq. Ft.
# of Buildings 2,650
Market Size (Sq. Ft) 58,037,068
Vacancy Rate 3.12%
SF Vacant 1,813,081
Availability Rate 4.34%
SF Available 2,516,922
SF Under Construction 497,638
SF Delivered in Last 4 Quarters 100,276
AIRPORT AREA OFFICE SUBMARKET SNAPSHOT
Percent
Asking Rate
Square Feet
$0.81 $0.82 $0.84 $0.88 $0.88
$0.95 $0.97 $0.96 $0.97
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Average Direct Asking Rent
Sale Price
Airport Area – Airport Area is a fundamentally stable
submarket located in the middle of Orange County
and can lay claim to being its central employment
hub, along with neighboring Irvine Spectrum. Tech
and life science firms are prominent in the tenant
profile here and often work in concert with UC Irvine
Applied Innovation, which engenders cooperation
between students, staff, and local companies and
capital.
However, developers mostly focus on bringing
multifamily product to market, often chipping away at
industrial inventory in the process as buildings are
targeted for redevelopment. This helped drive rent
growth earlier in the cycle as the limited inventory left
was able to push rental rates. Investors remain active
in the submarket and regularly pay prices well above
the Orange County average.
High rents and steady annual rent growth are the
norm in Airport Area and help prop up the investment
market.
Vacancy
(86,136)
65,676
169,959
(373,703)
(8,840)
(73,181)(14,627)
33,476
611,232 569,309
660,264
545,897 491,994
556,661
651,885
512,940 558,510
715,438
-600,000
-400,000
-200,000
0
200,000
400,000
600,000
800,000
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Net Absorption Gross Absorption
2.76% 2.65%2.36%
3.00% 3.02%3.37%
4.03% 4.17%
3.12%
5.52%
4.94% 4.90%
5.45%
4.71% 4.65%
5.30% 5.44%
4.34%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Vacancy Availability
Vacancy & Availability Rates
Absorption
Market Statistics vs. Previous Year
Lease Rates
Net Absorption
Rental Rates
Triple Net (NNN) Average Asking Rates per Month per Sq. Ft.
# of Buildings 2,650
Market Size (Sq. Ft) 58,037,068
Vacancy Rate 3.12%
SF Vacant 1,813,081
Availability Rate 4.34%
SF Available 2,516,922
SF Under Construction 497,638
SF Delivered in Last 4 Quarters 100,276
AIRPORT AREA OFFICE SUBMARKET SNAPSHOT
Percent
Asking Rate
Square Feet
$0.81 $0.82 $0.84 $0.88 $0.88
$0.95 $0.97 $0.96 $0.97
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Average Direct Asking Rent
Sale Price
Airport Area – Airport Area is a fundamentally stable
submarket located in the middle of Orange County
and can lay claim to being its central employment
hub, along with neighboring Irvine Spectrum. Tech
and life science firms are prominent in the tenant
profile here and often work in concert with UC Irvine
Applied Innovation, which engenders cooperation
between students, staff, and local companies and
capital.
However, developers mostly focus on bringing
multifamily product to market, often chipping away at
industrial inventory in the process as buildings are
targeted for redevelopment. This helped drive rent
growth earlier in the cycle as the limited inventory left
was able to push rental rates. Investors remain active
in the submarket and regularly pay prices well above
the Orange County average.
High rents and steady annual rent growth are the
norm in Airport Area and help prop up the investment
market.
Vacancy
(86,136)
65,676
169,959
(373,703)
(8,840)
(73,181)(14,627)
33,476
611,232 569,309
660,264
545,897 491,994
556,661
651,885
512,940 558,510
715,438
-600,000
-400,000
-200,000
0
200,000
400,000
600,000
800,000
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Net Absorption Gross Absorption
2.76% 2.65%2.36%
3.00% 3.02%3.37%
4.03% 4.17%
3.12%
5.52%
4.94% 4.90%
5.45%
4.71% 4.65%
5.30% 5.44%
4.34%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Vacancy Availability
Vacancy & Availability Rates
Absorption
Market Statistics vs. Previous Year
Lease Rates
Net Absorption
Rental Rates
Triple Net (NNN) Average Asking Rates per Month per Sq. Ft.
# of Buildings 2,650
Market Size (Sq. Ft) 58,037,068
Vacancy Rate 3.12%
SF Vacant 1,813,081
Availability Rate 4.34%
SF Available 2,516,922
SF Under Construction 497,638
SF Delivered in Last 4 Quarters 100,276
AIRPORT AREA OFFICE SUBMARKET SNAPSHOT
Percent
Asking Rate
Square Feet
$0.81 $0.82 $0.84 $0.88 $0.88
$0.95 $0.97 $0.96 $0.97
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Average Direct Asking Rent
Sale Price
ABSORPTION
RENTAL RATEVACANCY & AVAILABILITY RATES
NET ABSORPTION
LEASE RATES
VACANCY
2020 Main Street, Suite 100Irvine, CA 2614949.851.5100 • 949.261.9092 Faxwww.voitco.com