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Proposal For: Zen Gardens

By: JKLM Partners

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Agenda

  • Project Overview
  • Site Analysis
  • Zoning Analysis
  • Market & Demographic Analysis
  • Comp Analysis
  • Design Development
  • 5 Year Pro Forma Analysis
  • Summary

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Project Proposal Overview: Zen Gardens

Project Type:

  • 43 Unit TOC Multi-Family Development
  • Mix of Studios, 1 Beds, 2 Beds, and 3 Beds

Land Offer:

  • $6,750,000

Projected Profit

  • IRR: 19.31% Return Per Year
  • Profit: $8,158,452
  • 2.07X Multiple

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Business Plan: Zen Gardens

Business Plan:

  • Acquire the land and build the development in year 1 & 2
  • Lease out the building assuming 3% rent growth in years 3-5
  • Sell at exit cap in end of year 5 (2027)

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Site Analysis

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Site and Surrounding Area

Address:

  • 3521/23, 3525, 3529 & 3535/37 Hughes Avenue, Los Angeles CA, 90034

APN:

  • 3521/23 Hughes Ave: 4313009034
  • 3525 Hughes Ave: 4313009030
  • 3529 Hughes Ave: 4313009029
  • 3535/37 Hughes Ave: 4313009028

Site Square Footage

  • 19,712.4 SqFt.

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Site and Surrounding Area

Adjacent Uses

  • Located adjacent to other apartments, a small market, small restaurants, and offices

Ingress/Egress

  • Access only through Hughes Ave.

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Site & Surrounding Area Photos

3521 Hughes Ave

Hughes Ave Right (facing property)

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Hughes Ave Left (facing property)

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3525 Hughes Ave

3529 Hughes Ave

3535 Hughes Ave

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The Neighborhood of Palms

  • Adjacent to Culver City and Cheviot Hills
  • Close proximity to Santa Monica and Beverly Hills
  • 21,983 People per Square Mile
  • 85% of population are renters and housing is primarily apartment style

PALMS

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Public Transportation Nearby

  • 2 Minute walk to the Metro Expo Line
  • Green area on bike map is accessible in 15 minutes or less by bike
  • Expo Line gives efficient transport to USC and Downtown LA

Expo Line

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Local Traffic

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  • Traffic Density
    • Venice Blvd highly congested during weekdays.
    • Palms Blvd highly sensitive to 5 P.M. rush.
  • “Slow Streets” Program
    • Dedicates eligible streets to pedestrians & cyclists.
    • Encourages walking/cycling.

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Crime Map

  • Low crime compared to the city of LA signified by the green on the map
  • Overall a safer neighborhood in terms of property and violent crime data

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SWOT Analysis

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Strengths:

  • Convenient public transportation
  • Close to major amenity hubs such as Santa Monica and Culver City
  • Low crime compared to city of LA
  • Multiple developments in the area testament to confidence in the area

Weaknesses:

  • High levels of noise in the area due to being near freeway and train station
  • Alleyways near development are not well maintained
  • Only one form of ingress and egress to the property

Opportunities:

  • Ability to build safe parking to combat limited access
  • Target families with the school district
  • Target professionals with new jobs

Threats:

  • Other new developments being constructed less than 0.2 mi away
  • Other sites could have less noise being further away from train station and freeway

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Major Drivers of Employment

  • Popular Job Sectors:
    • Information/media and photo
    • Technology
    • Film
    • Medical

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Amenities Nearby

Commercial and Leisure Amenities

  • Shopping Centers: Westfield Century City, Westfield Culver City, Shops on Rodeo Drive, Third Street Promenade, The Grove
  • Leisure: Downtown Culver City, The Getty Center, Santa Monica Pier, Venice Beach Boardwalk, Beverly Hills, Multiple Cinemas, and a 25 min drive to Downtown Los Angeles

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Map of Immediate Amenities

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Zoning Analysis

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The Site

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Address:

  • 3521/23, 3525, 3529 & 3535/37 Hughes Avenue, Los Angeles CA

APN:

  • 3521/23 Hughes Ave: 4313009034
  • 3525 Hughes Ave: 4313009030
  • 3529 Hughes Ave: 4313009029
  • 3535/37 Hughes Ave: 4313009028

Gross Lot Area:

  • 19,712.4 SqFt.

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Zoning Analysis

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Zone:

  • R3 (Multiple Dwelling) no commercial permitted
  • Density of 1 unit per 800 sq. ft. of lot area
  • Lot Area Setbacks:
    • Front & Rear: 15 ft
    • Sides: 5 + 1 ft for each story after 2nd (can’t exceed 16ft)

Height District:

  • HD 1, maximum height of 45 ft, unlimited stories.
  • 3:1 Floor Area Ratio

District Information:

  • Council District 5
  • Councilman Paul Koretz (outgoing)�

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Zoning Analysis: By-Right, SB-1818, TOC

  • Lot Area: 19,712 Sq. ft
  • Net Lot Area: 13,120 Sq. ft

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Our Choice of Entitlement

Transit Oriented Communities (TOC)

  • TOC Market Rate units > By-Right/SB-1818 Total units
    • Most optimal use of space
  • Provides the cheapest and most amount of affordable housing
    • Benefits lower income residents
  • Contributes against shortage of affordable housing
    • Benefits to local government
  • TOC drives up incentive for public transportation

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Market & Demographic Analysis

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Primary Market Area

Submarket

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PMA Statistics

Absorption, Net Deliveries, Vacancy

Market Rent/Unit & Rent Growth

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PMA Statistics

Occupancy Rate

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Population Statistics

  • Palms Population Growth: 0.1%
  • Median Palms Age: 37

Population By Age:

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Household / Socioeconomic Statistics

  • Palms Household Growth: -0.2%
  • Median Household Size: 2.1
  • Percent Renters: 80.7%
  • Bachelor's Degree or Higher: 57%

Number of Households:

Number of Households:

Educational Attainment:

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Income Statistics

  • Average Household Income: $109,654
  • Median Household Income: $85,146
  • Income Growth Rate: 6.2% YoY

Household Income:

2021-2026 Median Income Forecast:

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Employee Growth

  • 5,344 new reported jobs in past 10 years
  • 65% increase in workforce

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Comp Analysis

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Map

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Comparable: Coda

Build Year: 2019

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Community Amenities: Rooftop lounge, garage parking, Equinox partnership, business center

Unit Amenities: Balconies, stainless steel appliances, 10ft ceilings, quartz countertops, washer/dryer, vinyl flooring

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Comparable: 3838 By CLG

Year Built: 2018

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Community Amenities: rooftop deck, fitness center, viewing center

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Unit Amenities: Washer & dryer, balconies, vinyl flooring, 10ft ceiling, stainless appliances, smart features

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Comparable: 1650 Sawtelle

Year Built: 2021

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Community Amenities: rooftop deck, secured entry, garage parking

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Unit Amenities: Washer & dryer, balconies, vinyl flooring, 10ft ceiling, stainless appliances, smart features

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Comparable: Frame Mar Vista

Year Built: 2019

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Community Amenities: rooftop deck, secured entry, garage parking

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Unit Amenities: Washer & dryer, balconies, vinyl flooring, 10ft ceiling, stainless appliances, smart features

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Comparison of Unit Features and Amenities

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Rental Comp Adjustment

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Base Rent Matrix: Studios

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Base Rent Matrix: 1 Bedroom

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Base Rent Matrix: 2 Bedrooms

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Base Rent Matrix: 3 Bedrooms

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Sales Comps

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Sales Comps

  • Market Cap Rate of Comps Adjusted for 2027 exit cap: 3.95%

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Pipeline

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Design Development

JKLM Partners

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Design Theme

  • Target Audience: Millennial to Middle aged business professionals, or tech professionals with Google and Apple in the area
  • Modern Design: Modern design language is the staple for new development apartment complexes in the LA area
  • Wood Tones / Accents: The wood tones throughout the property present a calming feel for residents, especially being so close to busy transit
  • Minimalistic Finishes: The simple yet elegant finishes further add to the “zen” feeling of each unit
  • Rooftop Garden: A good use of community space for residents to get work done or gather with others

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Welcome To: Zen Gardens

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Interior Design Concept

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Interior Design Concept

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Amenities Design Concept

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Sample Floor Plans

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5 Year Pro-Forma Analysis

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Proposed Unit Mix

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5 Year Pro-Forma Analysis

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Costs

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Capitalization

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Cash Flows

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Cash Flows

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Splits and Promote

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Summary of Underwriting

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Summary of Project Proposal: Zen Gardens

Project Type:

  • 43 Unit TOC Tier 3 Multi-Family Development
  • Mix of Studios, 1 Beds, 2 Beds, and 3 Beds

Land Offer:

  • $6,750,000

Projected Profit

  • IRR: 19.31% Return Per Year
  • Profit: $8,158,452
  • 2.07X Multiple