BRANDON BRAND NEW 20 YEAR CORPORATE GUARANTEED LEASE IN A DENSELY POPULATED URBAN INFILL LOS ANGELES COUNTY SUB-MARKET - LoopNet
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BRANDON BRAND NEW 20 YEAR CORPORATE GUARANTEED LEASE IN A DENSELY MICHAELS POPULATED URBAN INFILL LOS ANGELES COUNTY SUB-MARKET GROUP
PRESENTED BY:
BRANDON MICHAELS
Senior Managing Director of Investments
Senior Director, National Retail Group
Tel: (818) 212-2794
Fax: (818) 212-2710
bmichaels@marcusmillichap.com
License: CA #01434685
www.BrandonMichaelsGroup.com
BRANDON
MICHAELS
GROUP
AREA OVERVIEW
NON-ENDORSEMENT AND DISCLAIMER NOTICE
NON-ENDORSEMENTS
Marcus & 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 & Milli-
chap, and is solely included for the purpose of providing tenant lessee FINANCIAL ANALYSIS
information about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE
CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DE-
TAILS.
DISCLAIMER
THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET
ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN AP-
PRAISAL.
This information has been secured from sources we believe to be
reliable, but we make no representations or warranties, express or
COMPARABLES ANALYSIS
implied, as to the accuracy of the information. References to square
footage or age are approximate. Buyer must verify the information and
bears all risk for any inaccuracies. Marcus & Millichap is a service
mark of Marcus & Millichap Real Estate Investment Services, Inc. ©
2017 Marcus & Millichap. All rights reserved.
OFFICES NATIONWIDE
www.marcusmillichap.com
2 3
- A Subsidiary of - A rare opportunity to acquire a
brand new 20 year corporate guaranteed lease in a densely populated urban infill Los
Angeles county sub-market.
The Brandon Michaels Group Group of Marcus & Millichap has been selected to exclusively market for sale Blink Fitness, ideally
located at 6710 Pacific Boulevard in the landmark Warner Theater building in Huntington Park, CA. The subject property underwent
a multi-million dollar renovation and is now the new home to Blink Fitness, one of the fastest growing fitness brands in the country
that is a well-performing subsidiary of Equinox. The 30,588 square foot building has been beautifully remodeled to house a state of
the art fitness facility. Ideally located at the epicenter of Huntington Park, the property benefits from a dense immediate population
with over 1.1 million people within a five mile radius and significant vehicle and foot traffic along Pacific Boulevard, one of the busiest
commercial thoroughfares throughout Los Angeles County.
Blink Fitness, a subsidiary of Equinox, just executed a brand new 20 year, NN lease. Blink Fitness is one of the fastst growing
fitness brands in the country. Blink first opened in 2011 as an operating subsidiary of Equinox. In contrast to Equinox’s portfolio
of luxury fitness centers and boutiques with monthly membership costs of $185+, Blink’s memberships range from $15 to $25 a
month, which is less than the price of one SoulCycle class (SoulCycle is another Equinox subsidiary). The value proposition that
Blink provides is bargain memberships compared to the fitness competition and higher profitability margins as a result of added
amenities/costs such as yoga, pilates, and personal training sessions. Since 2012, Blink has organically grown from four locations to
81 locations (including those in development) today. Moreover, Blink’s overall real estate strategy is to grow to 90 locations by 2018
and eventually expand to 300 locations by 2020. Blink fitness centers range from 12,000 to 18,000 square feet, with the average
being 15,000 square feet. This footprint in conjunction with the flexibility on how they utilize space ideally positions Blink amongst
their competitors. With a total revenue of over $102 million, Blink experienced a 25% increase in sales from 2016. Blink operates at
the highest EBITDA margin of all of Equinox’s subsidiary companies at 34.8%. Blink operates at the lowest rent margin in the fitness
industry at 20%, compared to LA Fitness at 24% and 24 Hour Fitness at 40%, which is a distinct completive advantage.
Equinox Fitness is an American luxury fitness company which operates several separate fitness brands: Equinox, PURE Yoga, Blink Fitness, and SoulCycle. Within
Equinox's portfolio of brands, there are more than 135 locations within every major city across the United States in addition to London, Toronto, and Vancouver.
300+ $102.8 M $35.2 M
Its national headquarters is in New York City. The luxury sports club broke the mold of the traditional dingy, smelly workout facilities to create a fitness space that
was not only high-end but also worthy of competing in a more general lifestyle market.
This stable and secure investment opportunity is located in the heart of the Huntington Park Business District and offers convenient access to the surrounding
five major freeways of Los Angeles. This existing 1930’s theater building offers an old world charm and memorable feel and features high ceilings and a facade that
provides prominent visibility along highly desirable Pacific Boulevard. Pacific Boulevard is the principal commercial thoroughfare in the city of Huntington Park, 300+ Blink Fitness Locations Blink Fitness's revenue grew Blink Fitness EBITDA, which is the highest
California. It runs from Vernon and Santa Fe Avenues in Vernon to Cudahy Street in Walnut Park before changing to Long Beach Boulevard. The Pacific Boulevard projected by 2020 25% to $102.8 Million in 2017 of all EQUINOX subsidiaries at 34.8%
commercial district is the third highest grossing commercial district in the County of Los Angeles.
4 5
INVESTMENT HIGHLIGHTS GAGE AVENUE
RANDOLPH STREET
BRAND NEW 20 YEAR CORPORATE GUARANTEED LEASE WITH
BLINK FITNESS BY EQUINOX - Brand new 20 year corporate guarantee
NN lease with Blink Fitness, one of the strongest performing subsidiaries of
Equinox and one of the fastest growing fitness brands in the country.
SIGNIFICANT GROWTH PROJECTIONS AND EXCELLENT
OPERATING HISTORY FOR BLINK FITNESS - Blink is projecting over
300 locations by 2020, and operates at the lowest rent margin in the
fitness industry and the highest EBITDA of all Equinox subsidiaries .
EQUINOX IS A LEADER IN THE HIGH GROWTH FITNESS INDUSTRY
PACIFIC BOULEVARD
- The luxury sports club leader is re-inventing the fitness industry by
breaking the mold of the traditional workout facility to create high-end
fitness spaces worthy of competing in a more general lifestyle market.
With 135 locations in every major city across the United States in addition
to London, Toronto, and Vancouver, Equinox has become synonymous
with a unique luxury experience that is catering to a large segment of
the fitness world.
ICONIC PROPERTY THAT HAS UNDERGONE A MULTI-MILLION
DOLLAR RENOVATION - Blink occupies the landmark Warner Theater
building, a 1930’s theater building Blink with a unique old world charm
and memorable feel that features high ceilings and a highly visible
facade. The significant renovation is complete with a new roof, electrical
systems, plumbing, and significant amenities that create a distinctive
environment for members of this location. Over $4.5 million has been
invested in the property.
ACCESSIBILITY AND WALKABILITY - Pacific Boulevard has a score
of 91/100 for walkability. Retailers, small boutiques, and restaurants
populate Pacific Boulevard. Huntington Park also has convenient access
to the surrounding five major freeways- Interstates 710, 110, 10, 105 and
the 5.
RARE OPPORTUNITY - Stable and secure offering allows for minimal
management responsibility in a strong Los Angeles county location FLORENCE AVENUE
with 12.5% rental increases every 5 years.
6 7
PROPERTY OVERVIEW PROPERTY SUMMARY
ADDRESS
PROPERTY INFORMATION
6710 - 6720 Pacific Boulevard
Huntington Park, CA 90255
6710 - 6720 Pacific Boulevard
Property Address
Huntington Park, CA 90255
SITE
The subject property is located on the east side of Pacific
Tenant Blink Fitness by E Q U I N O X Boulevard south of Gage Avenue and north of Florence
Avenue in Huntington Park, CA.
Price Request For Offer
SQUARE FOOTAGES
Net Operating Income $801,231 The total building square footage is 30,923 square feet.
Total land square footage is 17,442 square feet. The square
footage breakdown is as follows: Ground Floor-14,809 SF,
Gross Building SF* 30,923 SF Lower Level-7,780 SF, Mezzanine-3,587 SF, Balcony- 4,747 SF.
Lot Size 17,442 SF FRONTAGE AND ACCESS
±114 feet of frontage on Pacific Boulevard
Year Built 1930 / Renovated 2018
ZONING
APN 6322-017-006 The zoning is C2.
Zoning C2 YEAR BUILT
The subject property was originally built in 1930 and fully
Type of Ownership Fee Simple renovated in 2018.
Square Footage Breakdown Ground Floor: 14,809 SF
Lower Level: 7,780 SF TRAFFIC COUNTS
Mezzanine: 3,587 SF Intersection of Pacific Boulevard and Gage Avenue:
Balcony: 4,747 SF 21,215 vehicles per day
TOTAL: 30,923 SF
Intersection of Pacific Boulevard and Florence Avenue:
28,197 vehicles per day
8 9
DOWNTOWN LOS ANGELES
LEASE ABSTRACT
PACIFIC ARCADE
Tenant Blink Fitness by EQUINOX
Lease Start July, 1, 2018
Lease Expiration June 30, 2038
Rental Increases 12.50% every 5 Years
Lease Term Remaining 20 Years
Options 1 - 5 year @ FMV
Monthly Rent
$52,417/$58,969
(Year1/Year6)
Annual Rent
$629,004/$707,628
(Year1/Year6)
Rent/SF
$2.07/$2.33
(Year1/Year6)
Lease Type NN
Landlord Obligations Roof and Structure
Guarantor Blink Fitness
Annual Revenue $102.8 million
Number of Locations Currently 81 Locations
10 11
BLINK FITNESS TOTAL REVENUE:
TENANT SUMMARY $102.8 MILLION GROWTH ANALYSIS
BY
SALES PER STORE SALES PER SQUARE FOOT NUMBER OF LOCATIONS 300+
70
Blink Fitness first opened in 2011 as an operating subsidiary of Equinox. In
contrast to Equinox’s portfolio of luxury fitness centers and boutiques with
$1,800 $120 60
monthly membership costs of $185+, Blink’s memberships range from $15 to $1,626 $1,642 $1,658
$108 $109 $110
$1,610 $106 $107 $107 62
$25 a month, which is less than the price of one SoulCycle class (SoulCycle is $1,578 $1,594
another Equinox subsidiary). The value proposition that Blink provides is bargain $1,500 $100 50
memberships compared to the fitness competition and higher profitability 50
margins as a result of added amenities/costs such as yoga, pilates, and personal $1,200 $80 40 43
training sessions. Since 2012, Blink has organically grown from four locations to
81 locations (including those in development) today. Moreover, Blink’s overall $900 $60 30 35
GENERAL INFORMATION real estate strategy is to grow to 90 locations by 2018 and eventually expand to
300 locations by 2020. Blink Fitness centers range from 12,000 to $18,000 square $600 $40 20 18
386 Park Avenue
Headquarters feet, with the average being 15,000 square feet and are primarily located in strip
New York, NY 10016
malls. $300 $20 10
Website Address https://www.BlinkFitness.com
4
Blink’s revenue for 2017 grew an estimated 25% to $102.8 million driven by the 0 0 0
BUSINESS DESCRIPTION opening of 12 locations and modest comparable unit growth. The Company 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 2020
81 operating and under development reported in its franchise marketing material that average unit volume (AUV) YEAR
PROJECTIONS
was $1.7 million and the average location generated EBITDA of $568,000, YEAR YEAR
Locations 90 locations by end of FY2018 expected
300 locations projected by 2020 representing a 34.8% EBITDA margin. Blink operates at the highest EBITDA
Sales $102.8 million (+25% from 2016)
margin, relative to Equinox’s other subsidiary SoulCycle (32% EBITDA margin).
With regards to the balance sheet, Blink does not appear to have any credit AVERAGE SIZE CENTER: 12,000-18,000 SF LOCATIONS: 300+ PROJECTED BY 2020
EBITDA $35.2 million (34.8% of sales) facility or term loan, and therefore relies on its parent Company, Equinox, for
financing. Equinox has taken on a significant amount of debt to fund its previous
OWNERHSIP AND KEY PERSONNEL acquisitions of SoulCycle and properties from Sportsclub/LA Fitness, as well
Ownership Subsidiary of Equinox Holdings, Inc. as investing in its hotel business and growth initiatives for both SoulCycle and AVERAGE UNIT VOLUME MEMBERSHIP
$1,776,537 5,917
Blink Fitness. As of the 2017 year-end, Equinox had $996.0 million of total debt
CEO Todd Magazine
outstanding, comprised of a 6% $796.0 million secured term loan due in March
2024 and 10% $200.0 million term loan due in March 2025. Equinox also has a
KEY FINANCIAL METRICS $150.0 million senior secured revolver due November 22, 2022, although total
Rent Expense $23.1 million (22.4% of sales) borrowings under the revolver is unknown. The Company’s estimated leverage
ratio as exhibited by total debt to TTM EBITDA stands at 5.0x, which is above
Rent/Square Foot $24 (same as 2016) EBITDA MARGIN RENT MARGIN
the fitness peer average of 4.6x. Additionally, due to the high interest rate on the
Sales/Store
Sales/Square Foot
$1.7 million (+1% from 2016)
$107 (-2.7% from 2016)
debt outstanding, Equinox currently operates at an estimated interest coverage
of 2.9x, which is below our 3.0x warning threshold.
34.8% 20%
12 13
IN THE NEWS
BY
T H E BLINK - FEEL GOOD EXP ERI EN CE ™
MOOD LIFTERS ™ COLOR ME HAPPY EVERYONE CLEANS MUSIC MATTERS
MOOD ABOVE MUSCLE ™
• 80+ pieces of Cardio Equipment • Olympic benches, power & squat racks • Battle ropes, kettle bells
• 50+ pieces of Srength Equipment • Multi-use stretch areas • Medicine balls, resistance bands
• 40 pairs of Dumbbells • Functional area for HIIT and circuit training • 1on 1 Personal Training
14 15
BREAKDOWN OF ALL IMPROVEMENTS AND UPGRADES
IMPROVEMENTS AND UPGRADES •
•
•
•
Structural reinforcement of parts of the structure and balcony
All new steel work throughout the entire property
All new painting throughout interior and exterior
All new metal flooring and concrete deck on the ground floor
• All new drywall throughout the entire property
• Brand new doors and glass work throughout the entire property
• Brand new HVAC units – 4 X 20 ton units plus 2 X 6 ton units – Roof top package
including heat pumps and 3 X 4 ton split heat pump system units, plus 3 X 1.5 ton
units split heat pump system.
• Brand New Elevator shaft, cabin and system.
• All new electric – Main switch board 600A – 480W and 600A 120/240W, new sub
panels, and feeders
• Brand new lighting fixtures throughout the property
• Brand new fire sprinkler system
• Brand new fire alarm monitoring system.
• New store front glass and door systems.
• Brand new roof
NEW ELECTRICAL NEW PLUMBING NEW HVAC •
•
All new cast iron sewer pipes and new plumbing connection within the entire project.
Brand new bathrooms
600A – 480W and 600A 120/240W that Sewer & Drain Cleaning. Rooter Services. Improved Heating and Cooling.
• All new copper waterpipes within the property.
is placed on city's parking lot and allowed Cast Iron Piping Restoration. Duct Cleaning. • New gas line and new gas meter and connection.
easement from city • New ADA Steel Handrails throughout the entire project
• New Alley Iron ADA gates in the rear
• Terrazzo repair
• Duplicate/Fabrication of original tiles and installation
• Replacement and Repair of neon marquee and blade signage
• Repair of all interior original ceilings and wall art/paintings
• Duplication/Fabrication of precast moldings and installation inside the space
• installation inside the space
BREAKDOWN OF ALL SOFT COSTS
• Architectural Pre Design $16,000
• Architectural & Structural Design $108,000
PAINT AND FABRICATION ALARMS AND SPRINKLERS STRUCTURAL UPGRADES
• City of HP Fees $46,000
• Electrical Engineering $18,500
Specialized Painter for Historic Artwork. Fire and Smoke Alarm Systems. New Roof and Membrane. • Structural tests $12,000
Refabrication of all Historic Finishes. Emergency Lighting Systems. New Doors, Facades, and Windows. • Survey $3,500
Sprinkler system Inspections and Testings. • Traffic Studies $12,000
• LA County Sanitation Fees $178,000
$ 4.5 MIL L ION IN UP GRAD ES
HARD COSTS = $2,985,000 SOFT COSTS = $394,000
PAID TENANT $1.2M IN TENANT IMPROVEMENTS FOR THEIR GYM BUILD OUT
16 TOTAL - $4,579,000 17
LOWER LEVEL: 4,269 SF
SQUARE FOOTAGE
SQUARE FOOTAGE BREAKDOWN PER LEVEL
BLINK FITNESS 6710 6718
Ground Floor 12,730 SF 1,022 SF 1,056 SF
Lower Level 4,269 SF 1,588 SF 1,922 SF
Mezzanine 3,587 SF - -
MEZZANINE: 3,587 SF
Balcony 4,742 SF - -
Total 25,334 SF 2,610 SF 2,978 SF
GROUND LEVEL: 12,730 SF
BALCONY: 4,742 SF
18 19AVERAGE STORE SIZE REAL ESTATE TRENDS
- EQUINOX: 40,000 EQUINOX: 100 STORES
- SoulCycle: 3,700 - 38% New York
MORE THAN A GYM, IT'S AN EXPERIENCE. Created by the industry’s best minds. Taught by
superstars who inspire and ignite. In specially designed studios and pristine spaces. Equinox
- Blink Fitness: 15,000
- PURE Yoga: 20,000
- 29% California
- 5% Florida GROWTH ANALYSIS
continually crafts a suite of destination experiences that bring results through innovation.
STORE COUNT STORE CONCENTRATION
REDEFINING- Equinox Fitness is an American luxury fitness company which 100
operates several separate fitness brands: Equinox, PURE Yoga, Blink Fitness,
and SoulCycle. Within Equinox's portfolio of brands, there are more than
135 locations within every major city across the United States in addition to 75
London, Toronto, and Vancouver. Its national headquarters is in New York City.
The luxury sports club broke the mold of the traditional dingy, smelly workout
facilities to create a fitness space that was not only high-end but also worthy 50
of competing in a more general lifestyle market.
TRAINING- The brand meticulously vets its 4,500 trainers to ensure it has the 25
most personable, experienced employees.
INFLUENCE- It's a booming time for the gym industry. Americans, especially 0
12/31/13 12/31/14 12/31/15 12/31/16 12/31/17
young people, are increasingly valuing a healthy lifestyle. The number of people
participating in running events has grown an average of 9% every year since EQUINOX SOUL CYCLE
38% 1%
2005, according to Morgan Stanley. Data also shows that millennials believe
BLINK FITNESS PURE YOGA % OF TOTAL EQUINOX STORES BY STATE
exercise is essential for health, while their parents only focused on diet. The
number of people participating in running events has grown an average of 9%
every year since 2005, according to Morgan Stanley.
LUXURY- Locations feature an array of swanky lounge areas, with couches for
relaxing before class. Members receive cool Eucalyptus towels after working out.
Locker rooms are stocked with hairdryers and Kiehl's skin products.
FUTURE- In 2016, the upscale gym giant unveiled plans to open luxury hotels in
New York City's Hudson Yards and Los Angeles by 2019. A Los Angeles location
was announced in 2017 in Downtown Los Angeles neighborhood. The Frank Gehry
designed development will consist of a 20 story hotel tower with 305 rooms.
20 21FITNESS INDUSTRY COMPETITION METRICS
at the forefront of the Fitness
SALES Latest Membership Previous Membership Latest Store Previous Store Store Store Occupancy
Revolution
GYM
($ Thousands) (000s) (000s) Count Count Growth Size Cost
Planet Fitness $2,300,000 10,600 8,900 1,518 1,313 15.6% 20,000 18.1%
BLINK FITNESS- In 2011 Equinox Holdings created Blink Fitness, a low-cost
LA Fitness $2,100,000 7,500 7,344 689 675 2.1% 40,000 23.5%
subsidiary, to add to its portfolio of luxury fitness subsidiaries, which include SoulCycle
Gold's Gym $1,519,250 3,000 2,765 701 650 7.8% 35,000 30.3%
and Pure Yoga. Blink is financially supported by its parent, Equinox Holdings. Blink
Lifetime Fitness $1,462,600 890 839 129 122 5.7% 114,000 17.9%
Fitness is a low-cost fitness chain, compared to the Equinox Fitness chain's premium
24 Hour Fitness $60,417.10 4,000 3,953 430 425 1.2% 35,000 30.7%
prices of over $185 per month. SoulCycle and Pure Yoga are both boutique fitness
Equinox $1,122,700 495 401 238 200 19.0% 40,000 15.2% chains with premium prices of $36 per class for Soul Cycle and a $230 per month
Town Sports $403,042 587 544 165 150 10.0% 38,000 31.3% membership for Pure Yoga.
Average $1,512,513 3,867 3,535 553 505 46,000 23.9%
FITNESS INDUSTRY- The fitness industry has grown at an annual rate of 6.4% from
Sales per Sales Per Rent Per EBITDA Total Debt Debt to Interest
GYM
Store Square Foot Square Foot ($000s) ($000s) EBITDA Coverage
1996 to 2017, sustaining growth through two recessions. Between 2011 and 2017 the
industry grew annually at 5.6% to $28.00 billion, and is projected to increase 2% to 3%
Planet Fitness $1,752 $81.24 $15.85 $184,700 $703,761 3.8x 5.2x
per year between 2018 and 2021.
LA Fitness $3,111 $76.98 $18.06 $296,296 $1,600,000 5.4x 1.9x
Gold's Gym $2,585 $71.06 $22.40 $348,264 - - -
FITNESS MEMBERSHIPS GROWTH- Health club memberships among Americans
Lifetime Fitness $12,453 $106.19 $19.00 $430,725 $1,970,516 4.6x 3.5x
who are 15 and older have increased at an annual average of 4% between 1996 and
24 Hour Fitness $3,441 $97.75 $30.00 $210,938 $1,350,000 6.4x 1.0x
2017. Additionally, the percentage of fitness memberships to the overall U.S. population
Equinox $5,614 $128.16 $19.50 $199,200 $996,000 5.0x 2.9x
in that age demographic grew from 12% in 1996 to 22% in 2017.
Town Sports $2,641 $67.34 $22.16 $56,144 $196,029 3.5x 4.5x
Average $4,514 $89.82 $21.00 $246,610 $1,136,051 4.6x 3.2x CHANGING LANDSCAPE- Fitness boutiques and low-cost operators have entered
the industry, which has increased competition. Between 2011 and 2017 fitness locations
in the U.S. increased at a 5-year CAGR of 5.1% while average memberships per location
declined 1.8% between 2012 and 2017.
FITNESS SPENDING- While the 20-year average growth rate of spend per
member grew 2.2% between 1996 and 2016, the last five years saw an acceleration
in fitness spend to a 3.5% growth rate. Annual fitness spend per member (other than
membership) is now $490.
HIGH VALUE, LOW PRICE- Blink Fitness operates within the HVLP sector of the
fitness industry; that sector is dominated by Planet Fitness, which owns seven times
more market share than its closest competitors. The HVLP sector is highly fragmented
with just four chains operating over 100 units, including Planet Fitness, Crunch Fitness,
22 Fitness 19, and YouFit. 23FINANCIAL ANALYSIS 24 25
FINANCIAL ANALYSIS FINANCIAL ANALYSIS
RENT ROLL ANNUALIZED OPERATING DATA PRICING
TENANT SF BLDG % LEASE START LEASE EXP OPTIONS $ $/SF CAM* CAM/SF LEASE TYPE EXPENSES* PER YEAR PER SF
Blink Fitness 25,3341 81.93%4 7/1/2018 6/30/2038 1 - 5 year @ FMV $58,969.24 $2.33 $14,398.08 $0.57 NN5 Taxes** @ 1.25% $153,750 $4.97 Price Request For Offer
6710 Pacific Blvd 2,6112 8.44% 5/1/2019 4/31/2024 $3,900.00 $1.49 $1,483.91 $0.57 NNN Insurance $11,000 $0.36 Net Operating Income $801,231
Bella All Natural - Water/Sewer $4,500 $0.15
2,9783 9.63% 4/11/2019 4/30/2024 $3,900.00 $1.31 $1,692.49 $0.57 NNN Gross Building SF 30,923 SF
Vitamin Shop
Electricity - Area Lighting $2,400 $0.08
TOTAL 30,923 100% $66,769.24 $2.16 $17,574.48 $0.57 - Lot Size 17,242 SF
Telephone - Fire Alarm $4,400 $0.14
*CAMs are based on projected operating expenses
1. The retail ancillary area (entrance area) is an additional 499 square feet of space, totaling 25,833 square feet
Repairs & Maintenance $2,795 $0.09
2. 6710 Pacific Blvd - Total square footage includes 1,022 square feet of ground level space plus 1,588 square feet of lower level space
3. Total square footage includes 1,096 square feet of ground level space plus 1,922 square feet of lower level space, which can only be used as storage Management $32,049 $1.04
4. As per the terms of their lease, Blink Fitness is responsible for 85% of all CAM's
5. Landlord is responsible for roof and structure TOTAL $210,894 $6.82/0.57
*Projected Expenses
BLINK FITNESS RENT SCHEDULE ** Approximate Projected Taxes
BLINK FITNESS RENT SCHEDULE* OPERATING DATA CURRENT
Months Monthly Rent Annual Rent Rent/SF Scheduled Lease Income $801,231
1 - 60 $52,417.10 $629,005.20 $2.07
NNN Charges $210,894
61 - 120 $58,969.24 $707,630.88 $2.33
121-180 $66,340.39 $796,084.68 $2.62 Effective Gross Income $1,012,125
181-240 $74,632.94 $895,595.28 $2.95 Expenses $210,894
* The current rent is $52,417.10 (“current rent”). The monthly rent increases as of 7/1/2023 to $58,969.24 Net Operating Income $801,231
(“increased rent”). At the close of escrow, the Seller will credit the monthly difference between the current
Loan Payment $500,468
rent and the increased rent in the amount of $6,552.14 to the Buyer based on the number of months remaining
from the close of escrow until the scheduled rent increase date. Pre-tax Cash Flow $300,762
Principal Reduction $120,706
Total Return Before Taxes $421,468
26 27FINANCIAL ANALYSIS FINANCIAL ANALYSIS
20-YEAR CASH FLOW ANALYSIS
CASH FLOW MODEL CASH FLOW MODEL
Year 1 2 3 4 5 Year 11 12 13 14 15
Blink Income $58,969.24 $58,969.24 $58,969.24 $58,969.24 $58,969.24 Blink Income $66,340.39 $66,340.39 $66,340.39 $66,340.39 $66,340.39
6710 Income $3,900.00 $4,017.00 $4,137.51 $4,261.64 $4,389.48 6710 Income $5,241.27 $5,398.51 $5,560.47 $5,727.28 $5,899.10
6718 Income $3,900.00 $4,017.00 $4,137.51 $4,261.64 $4,389.48 6718 Income $5,241.27 $5,398.51 $5,560.47 $5,727.28 $5,899.10
Monthly Income $66,769.24 $67,003.24 $67,244.26 $67,492.51 $67,748.21 Monthly Income $76,822.94 $77,137.41 $77,461.32 $77,794.95 $78,138.59
Net Operating Income $801,230.88 $804,038.88 $806,931.12 $809,910.13 $812,978.50 Net Operating Income $921,875.25 $925,648.97 $929,535.90 $933,539.44 $937,663.08
CAP Rate 6.51% 6.54% 6.56% 6.58% 6.61% CAP Rate 7.49% 7.53% 7.56% 7.59% 7.62%
Year 6 7 8 9 10 Year 16 17 18 19 20
Blink Income $58,969.24 $58,969.24 $58,969.24 $58,969.24 $58,969.24 Blink Income $74,632.94 74632.94 74632.94 74632.94 74632.94
6710 Income $4,521.17 $4,656.80 $4,796.51 $4,940.40 $5,088.62 6710 Income $6,076.07 $6,258.36 $6,446.11 $6,639.49 $6,838.67
6718 Income $4,521.17 $4,656.80 $4,796.51 $4,940.40 $5,088.62 6718 Income $6,076.07 $6,258.36 $6,446.11 $6,639.49 $6,838.67
Monthly Income $68,011.58 $68,282.85 $68,562.26 $68,850.05 $69,146.47 Monthly Income $86,785.09 $87,149.65 $87,525.15 $87,911.92 $88,310.29
Net Operating Income $816,138.93 $819,394.17 $822,747.07 $826,200.56 $829,757.65 Net Operating Income $1,041,421.03 $1,045,795.80 $1,050,301.82 $1,054,943.01 $1,059,723.45
CAP Rate 6.64% 6.66% 6.69% 6.72% 6.75% CAP Rate 8.47% 8.50% 8.54% 8.58% 8.62%
Average CAP Rate 7.34%
28 29AREA OVERVIEW 30 31
HUNTINGTON PARK NEARBY POINTS OF INTEREST
The City of Perfect Balance
Named for prominent industrialist Henry E. Huntington, Huntington Park was L.A. LIVE
incorporated in 1906 as a streetcar suburb for workers in the rapidly expanding L.A. LIVE is the leading entertainment district in Los Angeles
industries to the southeast of downtown Los Angeles. To this day, about 30% of its offering six live entertainment venues, a fourteen screen cinema,
residents work at factories in nearby Vernon and Commerce. The stretch of Pacific
the GRAMMY Museum®, and over twenty dining experiences.
Boulevard in downtown Huntington Park was a major commercial district serving the
city’s largely working-class residents, as well as those of neighboring cities such as It's the host of the GRAMMYs, EMMYs, American Music Awards,
Bell, Cudahy, South Gate, and Downey. ESPYs, and a years worth of red carpet premieres.
Huntington Park has noteworthy Art Deco & Streamline Moderne Buildings.
Streamline Moderne examples of this architectural style are The Lane-Wells Company
Building designed by William E. Myer c.1939 and The W. W. Henry Company Building
built in 1939 next to it . Among its commercial district you can still see some details EXPOSITION PARK
and structural designs of that design style and of Art Deco. The most widely known Exposition Park is a collection of world-class museums,
buildings for their Art Deco designs are: the building of where Don Roberto Jewelers educational and sport facilities and entertainment venues. Within
business currently resides and of course the former theaters along Pacific Blvd. the 160-acre campus, you can experience the fun of science, math
and technology at the California Science Center, learn about the
The City of Huntington Park provides residents with more than 31 acres of total diverse cultural experience at the California African American
park space, which include playgrounds, picnic areas, athletic facilities, a skate park Museum or explore natural and cultural worlds at the Natural
and meeting rooms, among other amenities. Pacific Boulevard, the commercial
business street of Huntington Park, has been the location for festivals, carnival fairs History Museum of Los Angeles County, or simply relax in the
and parades. The "Carnaval Primavera" is held each year for three days across nine splendor of the City of Los Angeles Rose Garden.
blocks of Pacific Boulevard in Huntington Park. The event features Central American
and Mexican food, carnival rides, games, and live music.
LOS ANGELES CONVENTION CENTER
The Los Angeles Convention Center’s goal is to create and execute
outstanding events from beginning to end. It attracts more
than 2 million visitors annually and is renowned internationally
as a leading destination for conventions and exhibitions. With
impressive architecture, the LA Convention center has also been
featured as the backdrop for countless Hollywood movies.
DOWNTOWN LOS ANGELES
DTLA DTLA is in the midst of a cultural and architectural resurgence
that’s turning the area into a walkable, Metro-friendly destination
DOWNTOWN dotted with museums and beautiful destinatioms. Get to know
LOS ANGELES Bunker Hill, Little Tokyo, the Historic Core and beyond. In DTLA,
you'll find world class dining, shopping, and hotel urprises around
every corner.
32 33DEMOGRAPHICS
1,120,181 30 $49,053 352,135 $36,608
Total Population of Huntington Park. The Median Age is 30.
Average HH income within 5-m radius Daytime Population within 5-m radius Median HH income within 3-m radius
48% 52%
MALE FEMALE
EDUCATION
88,546 186,693 1,120,181
Owner Occupied Households Renter Occupied Households Population within a 5-m radius
within 5-m radius within 5-m radius
52% 21.2% 18.2% 8.6%
High School Associates Degree Bachelor’s Degree Grad Degree
BUSINESSES
Until recently, Silicon Beach was where a tech startup needed to be to have access to the resources necessary for success. That's all started to
change, and DTLA has become one of the premier spots in LA attracting new tech companies. Companies to Know: Boingo Wireless, Critical Cycles,
Greycroft Partners, Hyperloop One, Joymode, Levee, Loot Crate, NationBuilder, Nestigator, PetNet, and Rhubarb Studios.
In 2016, the area finished at number eight on Built In LA's top 10 tech neighborhoods by funding. Companies located there brought in a whopping
$96 million over the last year, beat neighborhoods like Marina Del Rey in the process.
TOP EMPLOYERS
• Southern California Gas Company • Gibson, Dunn & Crutcher LLP • Quinn Emanuel Trial Lawyers
• AT&T • Telepacific Communications Corp • Los Angeles Community College District
• The Capital Group Companies, Inc. • Paul, Hastings, Janofsky & Walker, LLP • City of Los Angeles
34 35COMPARABLES
ANALYSIS
36 37SALES COMPARABLES SALES COMPARABLES
CLOSE OF REMAINING CLOSE OF REMAINING
# ADDRESS SALE PRICE CAP RATE PRICE/SF BLDG SF LAND SF # ADDRESS SALE PRICE CAP RATE PRICE/SF BLDG SF LAND SF
ESCROW TERM ESCROW TERM
LA Fitness 15 Years LA Fitness
1 29737 Antelope Rd $14,600,000 6.00% $384.21 38,000 152,460 7/18/2018 W/ 3 - Five Yr 8 13822 Garvey Ave $15,725,000 4.83% $349.44 45,000 175,547 10/13/2017 25 Years
Menifee, CA 92584 Options Baldwin Park, CA 91706
20 Years
Smart & Final W/ 7.5% Rent
2 27550 Base Line St $9,475,000 5.40% $344.25 27,524 126,324 6/28/2018 Increases Every Smart & Final
Highland, CA 92346 5 Yrs & 4 - Five 9 1023 N Mount Vernon Ave $8,900,000 5.51% $319.34 27,870 119,289 11/14/2017 -
Yr Options Colton, CA 92324
LA Fitness
10 Years
3 2222 W Beverly Blvd $12,468,000 6.20% $290.32 42,946 133,729 6/23/2017
2 - Five Yr Opts. Smart & Final
Montebello, CA 90640
10 15055 Mulberry Dr $6,720,000 5.50% $219.84 30,567 87,207 6/30/2017 7 Years
Whittier, CA 90604
Burlington Coat Factory Plaza
4 2840 S Bristol St $20,100,000 5.46% $343.88 58,450 195,149 6/8/2018 -
Santa Ana, CA 92704 Smart & Final
11 928 E Ontario Ave $10,000,000 4.88% $383.11 26,102 84,546 2/15/2018 -
Corona, CA 92881
Office Depot 7 Years
5 1130 E Colorado Blvd $11,500,000 5.35% $477.65 24,076 60,091 5/31/2018 Plus Options
Pasadena, CA 91106 Totaling 30 Years
Planet Fitness
12 2057 Rancho Valley Rd $8,803,000 5.70% $368.70 23,876 - 6/16/2017 -
Pomona, CA 91766
Petco
6 24413 Crenshaw Blvd $9,000,000 5.54% $634.34 14,188 21,780 5/23/2018 -
Torrance, CA 90505
Foot Locker
13 6730-6732 Pacific Blvd $2,500,000 5.83% $366.35 6,824 8,276 12/20/2018 -
Office Depot Huntington Park, CA 90255
7 Years W/
7 11100 Garden Grove Blvd $9,180,000 5.90% $306.66 29,935 66,856 4/14/2017
Options
Garden Grove, CA 92843
AVERAGE $10,690,077 5.55% $368.31 30,412 102,605 - -
38 39BRANDON MICHAELS
Senior Managing Director of Investments
Senior Director, National Retail Group
Tel: (818) 212-2794 BRANDON
MICHAELS
Fax: (818) 212-2710
bmichaels@marcusmillichap.com
License: CA #01434685 GROUPYou can also read
