BRANDON MICHAELS GROUP RANCHO PLAZA 60 South Rancho Road, Thousand, CA 91362 OFFERING MEMORANDUM
INVESTMENT ADVISORS BRANDON MICHAELS Senior Managing Director Investments Senior Director, National Retail Group Tel: (818) 212-2794 bmichaels@marcusmillichap.com License: CA #01434685 1 Rancho Plaza 2 Financial Analysis 3 Comparables BRANDON MICHAELS GROUP 4 Area Overview 16830 Ventura Blvd. Suite 100, Encino, CA 91436 www.marcusmillichap.com 2 Rancho Plaza Thousand, CA 91362 3
MOORPARK THOUSAND OAKS HIGH SCHOOL M VE NT UR A FW Y (10 1) TH O US AN D S AK O RA D Y 23 CONEJO CREEK SOUTH PARK RANCHO PLAZA 60 South Rancho Road, Thousand, CA 91362 BO U OA OR H C N WA FREE K R RPA OO 4 Rancho Plaza Thousand, CA 91362 LE VA R D COLINA MIDDLE SCHOOL 5
POTENTIAL DEVELOPMENT OPPORTUNITY 68,824 SF (1.58 acres) of land make this an ideal development opportunity in an excellent Thousand location. Potential redevelopment opportunities include senior housing or multi-family. POTENTIAL MEDICAL CONVERSION 90 parking spaces create the unique opportunity for a partial medical conversion. SIGNIFICANT VALUE ADD OPPORTUNITY Currently 62% occupied allowing for significant upside through stabilization. Current operating restraints have impacted occupancy levels but a hands on operator can reposition this asset and achieve returns north of 10% HIGH END DEMOGRAPHICS Thousand is a safe and affluent Ventura County city that is known for its charm, excellent schools, and access to multiple high-end retailers and restaurants. The immediate area is home to multiple multi-million dollar homes and has become an ideal destinations for executives, professionals, and celebrities. Median Household Income - $100,000 Population - 129,339 Owner Occupied Housing - 71.% WHY BUY RANCHO PLAZA PROXIMITY TO AMENITIES Excellent Thousand location just north of Thousand and close proximity to both the 101 Ventura Freeway and the 23 Moorpark Freeway AMENITIES NEARBY Thousand Civic Arts Plaza Hillcrest Center for the Arts Kaiser Permanente Thousand UCLA Health Thousand Los Robles Greens Golf course SHOPPING CENTERS NEARBY Janss Marketplace The Shopping Center The Lakes at Thousand Conejo Valley Plaza Shopping Center HEADQUARTERED IN THOUSAND OAKS Amgen TEledyne Technologies Skyworks Solutions Dole SAGE Publications NATIONAL COMPANIES HEADQUARTERED IN THE AREA The city's economy is based on a small range of businesses, with biotechnology, electronics, automotive, aerospace, telecommunications, healthcare, and financing occupying most of Thousand ' employment sector. Bank of America, Baxter International, General Dynamics Corporation, Verizon, Verizon Wireless, Volkswagen, Audi, General Motors, BMW, Silver Star Automotive Group, and Anthem Blue Cross manage regional offices PRICED BELOW REPLACEMENT COSTS At the low price per square foot at $205.30 per SF for the building and $74.97 per SF for the land, 60 Rancho Road is priced below replacement costs. 6 Rancho Plaza Thousand, CA 91362 7
RANCHO PLAZA 8 Rancho Plaza Thousand, CA 91362 9
EXECUTIVE SUMMARY Marcus & Millichap has been selected to exclusively market for sale Rancho Plaza, located at 60 South Rancho Road in the highly desirable Conejo Valley submarket of Thousand, CA. Rancho Plaza is a fully interactive mixed-use campus consisting of 25,134 square of retail and office space feet ideally situated on 1.58 acres of land located directly off the Interstate 101 Ventura Freeway and the 23 Moorpark Freeway in Ventura County. Rancho Plaza benefits from highway visibility from both freeways, and is easily accessible, offering outstanding frontage and ease of ingress and egress. Rancho Plaza is within close proximity to multiple high-end retailers and within walking distance to Thousand, the main east-west retail thoroughfare through Thousand that runs from Agoura Hills to Thousand, and is home to multiple high end retailers and restaurants. RANCHO PLAZA 60 South Rancho Road, Thousand, CA 91362 Rancho Plaza is a true value-add opportunity. At its current occupancy of 62%, Rancho Plaza offers immediate significant upside through stabilization and long term upside through projected rent growth as well as the conversion of a portion of the units to medical use. Offered for sale of the price of $5,160,000, this is truly a unique opportunity to acquire a well-located office campus at below replacement costs and a 6.60% CAP Rate based on the current occupancy of 62%. Rancho Plaza also offers the prospect of long term development potential, as it offers the ability to acquire 1.58 acres of land in one of the most sought after submarkets throughout Southern California. Suite seizes are ideal, with an average square footage of the downstairs units of 1,259 square feet, and an average square footage of the second story units of 1,140 square feet. These units are easily rentable, and their ideal size calls for minimal tenant improvement costs. Thousand, CA is an affluent city in southeastern Ventura County with a median household income of $100,000. Multiple national companies are headquartered in Thousand including Amgen, Teledyne Technologies and Skyworks Solutions. Thousand was also rated among the safest cities by the FBI. Thousand and the surrounding areas have become the home to a plethora of high-end multi-million dollar homes and has become an ideal destinations for executives, professionals, and celebrities. Value-Add Opportunity Significant Upside 62% 62% Current Occupancy Low Price Per SF Priced Below Replacement Costs 6.7% 6.70% Current CAP Rate Long-Term Development Opportunity 10 Rancho Plaza Thousand, CA 91362 11
PROPERTY OVERVIEW PROPERTY INFORMATION Address Year Built 1988 60 Rancho Road, Thousand CA 91362 Gross Square Feet Lot Size 25,134 SF 68,824 SF Property Type Retail and Office APN 670-0-050-180 Parking spaces Type of Ownership 90 spaces, Ratio of 3.6 vehicles per 1,000 SF Fee Simple VENTURA FWY (101) FINANCIAL INFORMATION Asking Price $5,095,000 Price/SF (bldg) $202.71 Price/SF (land) $74.03 Current CAP Rate 6.69% ProForma CAP Rate 9.62% Current Occupancy 62% RANCHO ROAD RANCHO PLAZA 60 South Rancho Road, Thousand, CA 91362 12 Rancho Plaza Thousand, CA 91362 13
INVESTMENT HIGHLIGHTS VALUE-ADD OPPORTUNITY 6.7% CAP rate at 62% current occupancy Low price per square foot Priced below replacement costs Significant upside through stabilization 9.62% Pro-Forma CAP rate Double digit Pro-Forma returns THOUSAND OAKS LOCATION Ideally located just north of the northeast signalized corner of Rancho Road and Thousand Thousand is a main east-west thoroughfare through Thousand Multiple national retailers and restaurants in the immediate area Affluent submarket with an average household income upwards of $132,565 within a 5-mile radius Excellent location within close proximity to high-end residences and commercial Centralized location - Close proximity to both the 101 Ventura Freeway and the 23 Moorpark Freeway STABLE AND SECURE INCOME STREAM WITH RENTAL UPSIDE Ideal mix of NNN and modified gross leases Stable and secure tenant mix Tenants exemplify strong historical operating history Excellent parking Ideal suite sizes with an average size of 1,257 SF Long term development opportunity Potential to convert a portion of the building to medical use RANCHO ROAD 14 Rancho Plaza Thousand, CA 91362 15
PROPERTY INFORMATION ADDRESS 60 South Rancho Road Thousand CA 91362 SITE The subject property is located just North of Thousand on Rancho Road. SQUARE FOOTAGES The Subject Property consists of an office and medical building consisting of 25,134 square feet on a 68,824 square foot lot. FRONTAGE AND ACCESS Access is from Ranho Road. Approximately 500 feet of frontage on Rancho Road. YEAR BUILT The property was built in 1988. PARKING 90 parking spaces. Ratio of 3.6 vehicles per 1,000 SF. PLAT MAP 16 Rancho Plaza Thousand, CA 91362 17
FINANCIAL ANALYSIS 18 Rancho Plaza Thousand, CA 91362 19
RENT ROLL CENTER OCCUPANCY OCCUPANCY OF FIRST FLOOR OCCUPANCY OF SECOND FLOOR UNIT NOTES SF % LEASE START LEASE END RENT RENT/SF 1st Floor LEASE TYPE ANN INC OPTIONS A1 2,162 9% 7/1/2002 12/31/2021 $4,644.09 $2.15 NNN 3% $0.05 - - A4 1,782 7% 9/1/2012 M-M $3,386.00 $1.90 NNN $0.35 - - A5 930 4% 5/1/2011 10/31/2018 $1,680.95 $1.81 NNN 3% $0.13 - - A7 1,543 6% 1/1/2012 12/31/2017 $2,870.00 $1.86 NNN 2-3 year @ FMV $0.29 - - CAM/SF PFORMA RENT PFORMA RENT/SF 38% Vacant 62% Occupancy 100% Occupancy 24% Occupancy B1 1,635 7% 11/1/2015 10/31/2018 $2,861.00 $1.75 NNN 3% 1-3 year @ FMV $0.32 - - B3 810 3% 1/1/2015 12/31/2018 $1,657.25 $2.05 NNN $0.37 - - B4 790 3% 8/1/2007 M-M $2,208.00 $2.79 NNN $0.36 - - B5 946 4% 9/1/2013 8/31/2018 $2,362.21 $2.50 NNN 3% $0.26 - - B6 968 4% 6/1/2005 5/31/2021 $2,332.88 $2.41-3% 2-5 year @ FMV - - - 2nd Floor A21-1,427 6% 10/1/2004 9/30/2013 $2,116.56 $1.48 MG - - - A22 combined w/a21 - - - - - - - - - A23-817 3% 8/1/2015 7/31/2017 $1,350.00 $1.65 MG - - - A24 Vacant 1,367 5% - - - - - - $2,187.20 $1.60 A25-816 3% 9/1/2014 8/31/2018 $1,307.20 $1.60 MG 3% 1-3 year @ FMV - - - A26 Vacant 924 4% - - - - - - $1,478.40 $1.60 50% Second Floor 50% 1st Floor 54% Modified Gross 46% NNN B7 1,027 4% 7/10/2007 4/30/2022 $2,500.00 $2.43 NNN 3% $0.15 - - % OF FLOORS % OF NNN LEASES SUITE SIZES 55% Suite Size 1,000+ SF 45% 45% Suite Size <1,00 SF A27 Vacant 1,077 4% - - - - - - $1,723.20 $1.60 B21 Vacant 1,152 5% - - - - - - $1,843.20 $1.60 B22 Vacant 1,582 6% - - - - - - $2,531.20 $1.60 B25 Vacant 2,179 9% - - - - - - $3,486.40 $1.60 B27 Vacant 1,200 5% - - - - - - $1,920.00 $1.60 100-Roof - - 8/1/2010 7/31/2020 $2,900.00 - - - - - Total 25,134 100% - - $34,176.14 $2.18 - Total $0.24 $15,169.60 - OCCUPANCY SF OCCUPANCY SF OCCUPANCY CURRENT OCCUPIED SF 15,653 62% 1ST FLOOR SF 12,593 50% CURRENT VACANT SF 9,481 38% 2ND FLOOR SF 12,541 50% 1ST FLOOR OCCUPIED 12,593 100% 2ND FLOOR OCCUPIED 3060 24% 1ST FLOOR VACANT 0 0% 2ND FLOOR VACANT 9,481 76% CURRENT NNN 11,625 46% MODIFIED GROSS 13,509 54% 20 Rancho Plaza Thousand, CA 91362 21
FINANCIAL ANALYSIS ANNUALIZED OPERATING DATA INCOME AND EXPENSE CURRENT PROFORMA Scheduled Lease Income: $410,114 $592,149 NNN Reimbursement $59,692 $59,692 Effective Gross Income: $469,806 $651,841 Vacancy: - 5% $32,592 Expenses: $129,059 $129,059 Net Operating Income $340,747 $490,190 Loan Payment $161,360 $161,360 Pre-Tax Cash Flow 6.9% $179,388 12.65% $328,831 Principal Reduction $59,460 $59,460 Total Return Before Taxes 9.2% $238,847 15% $388,290 EXPENSES $/YEAR $/SF Taxes: 1.2% $61,140 $2.43 Insurance $7,479 $0.30 Janitorial $6,305 $0.25 Trash $2,702 $0.11 Electrical Repairs & Maintenance $1,524 $0.06 HVAC Repairs & Maintenance $950 $0.04 Plumbing Repairs & Maintenance $400 $0.02 General Repairs & Maintenance $2,910 $0.12 Utilities $22,538 $0.90 Grounds and Parking Expenses $5,782 $0.23 Management $16,405 $0.65 Taxes & Licenses $925 $0.04 Total $129,059 $5.13 $0.43/Mo PRICING Asking Price $5,095,000 Price/SF (bldg) $202.71 Price/SF (land) $74.03 Current CAP Rate 6.69% ProForma CAP Rate 9.62% Current Occupancy 62% 22 Rancho Plaza Thousand, CA 91362 23
COMPARABLES ANALYSIS 24 Rancho Plaza Thousand, CA 91362 25
SALES COMPARABLES SALE COMPARABLES 1 2809 Agoura Road, Thousand SALES COMPARABLES PRICE/SF 2 100 Moody Court, Thousand 3 4333 Park Terrace Drive, Westlake Village $600 4 4360 Park Terrace Drive, Westlake Village $528.63 5 4035-4055 Thousand, Westlake Village 6 3366 E Thousand, Thousand $500 $428.53 2 7 4580 E Thousand, 8 141 Triunfo Canyon Road, Westlake Village $400 8 60 South Rancho Road, Thousand $300 $200 $193.43 $193.80 $282.00 $260.00 $242.57 $276.04 $300.63 8 6 5 7 $100 1 $0 3 4 2809 Agoura Road 100 Moody Court 4333 Park Terrace Drive 4360 Park Terrace Drive 4035 Thousand 3366 E Thousand 4580 E Thousand 141 Triunfo Canyon Road Average 26 Rancho Plaza Thousand, CA 91362 27
SALES COMPARABLES 1 2 3 4 5 6 ADDRESS 2809 Agoura Road, Thousand ADDRESS 100 Moody Court, Thousand ADDRESS 4333 Park Terrace Drive, Westlake Village ADDRESS 4360 Park Terrace Drive, Westlake Village ADDRESS 4035-4055 Thousand, Westlake Village ADDRESS 3366 E Thousand, Thousand SALES PRICE $2,915,399 SALES PRICE $10,576,000 SALES PRICE $6,327,731 SALES PRICE $8,811,045 SALES PRICE $7,050,000.00 SALES PRICE $2,600,000.00 PRICE/SF $528.63 PRICE/SF $428.53 PRICE/SF $193.43 PRICE/SF $193.80 PRICE/SF $282.00 PRICE/SF $260.00 BLDG SF 5,515 BLDG SF 24,680 BLDG SF 32,713 BLDG SF 45,464 BLDG SF 25,000 BLDG SF 10,000 LOT SF 29,002 LOT SF 62,404 LOT SF 73,965 LOT SF 108,870 LOT SF 121,532 LOT SF 37,300 CLOSE OF ESCROW 2/25/2016 CLOSE OF ESCROW 4/21/2016 CLOSE OF ESCROW 12/13/2016 CLOSE OF ESCROW 2/1/2017 CLOSE OF ESCROW CLOSE OF ESCROW 8/2/2016 28 Rancho Plaza Thousand, CA 91362 29
SALES COMPARABLES 7 8 ADDRESS 4580 E Thousand, Westlake Village ADDRESS 141 Triunfo Canyon Road, Westlake Village SALES PRICE $9,000,000 PRICE/SF $242.57 BLDG SF 37,103 LOT SF 203,425 CLOSE OF ESCROW 5/18/2016 SALES PRICE $5,300,000 PRICE/SF $276.04 BLDG SF 19,200 LOT SF 74,052 CLOSE OF ESCROW 1/17/2017 30 Rancho Plaza Thousand, CA 91362 31
RENT COMPARABLES RENT COMPARABLES 1 5655 Lindero Canyon Road, Westlake Village 2 1429 Thousand, Thousand $3.00 RENT COMPARABLES PRICE/SF $3.00 7 10 2 12 9 8 3 2501-2537 E Thousand, Thousand 4 250 N Westlake, Westlake Village 5 31194 La Baya Drive, Westlake Village 6 125 Auburn Court, Westlake Village 7 888 Thousand, Thousand $2.50 $2.00 $1.95 $2.31 $2.11 $2.25 $1.65 $2.25 $2.00 $2.15 $2.15 $2.02 3 6 8 1861 E Thousand, Thousand 9 1801 E Thousand, Thousand 10 1421 E Thousand, Thousand 11 4540 E Thousand, Westlake Village 12 1414 East Thousand, Thousand 60 South Rancho Road, Thousand $1.50 $1.42 4 $1.00 $1.00 11 5 1 $0.50 $0.0 5655 Lindero Canyon Road 1429 Thousand 2501-2537 E Thousand 250 N Westlake 31194 La Baya Drive 125 Auburn Court 888 Thousand 1861 E Thousand 1801 E Thousand 2501-2537 E Thousand 4540 E Thousand 1414 E Thousand Average 32 Rancho Plaza Thousand, CA 91362 33
RENT COMPARABLES # ADDRESS RENT/YR/SF RENT/MO/SF LEASE TYPE SPACE AVAIL BLDG SIZE # ADDRESS RENT/YR/SF RENT/MO/SF LEASE TYPE SPACE AVAIL BLDG SIZE 1 5655 Lindero Canyon Road, Westlake Village $23.40 $1.95 MG 1,775 230,960 8 1861 E Thousand, Thousand $36.00 $3.00 NNN 920 10,660 2 1429 Thousand, Thousand $27.69 $2.31 MG 260 12,372 9 1801 E Thousand, Thousand $27.00 $2.25 NNN 900 8,100 3 2501-2537 E Thousand, Thousand $25.33 $2.11 FS 450 2,550 10 1421 E Thousand, Thousand $24.00 $2.00 NNN 640 8,960 4 250 N Westlake, Westlake Village $27.00 $2.25 FS 2,858 131,087 11 4540 E Thousand, Westlake Village $25.80 $2.15 MG 3,001 8,332 5 31194 La Baya Drive, Westlake Village $19.80 $1.65 MG 1,362 22,397 12 1414 East Thousand, Thousand $25.80 $2.15 MG 2,000 21,000 6 125 Auburn Court, Westlake Village $12.00 $1.00 MG 2,128 11,523 Average $24.23 $2.02-1,393 39,412 7 888 Thousand, Thousand $16.98 $1.42 MG 424 5,000 34 Rancho Plaza Thousand, CA 91362 35
AREA OVERVIEW 36 Rancho Plaza Thousand, CA 91362 37
AREA OVERVIEW $132,565 THOUSAND OAKS Thousand is a city in southeastern Ventura County, California, United States. It is in the northwestern part of the Greater Los Angeles Area, approximately 35 miles from Downtown Los Angeles and is less than 15 miles from the Los Angeles city neighborhood of Woodland Hills. It was named after the many oak trees that grow in the area, and the city seal is adorned with an oak. Thousand and Newbury Park were part of a master-planned city, created by the Janss Investment Company in the mid-1950s. It included about 1,000 custom home lots, 2,000 single-family residences, a regional shopping center, a 200-acre industrial park and several neighborhood shopping centers. The median home price currently in Thousand is around $674,000. Thousand was ranked the fourth-safest among cities with a population greater than 100,000 in the United States by the FBI s 2013 Uniform Crime Reports. A resort community rich with Spanish traditions, Thousand is known as a haven of serenity straddling the Ventura and Los Angeles County line. A portion of the Westlake Village community is located in Thousand, in Ventura County. The area offers hiking trails, equestrian trails, quaint shops, peaceful streets, delightfully unique restaurants and upscale boutiques. MAJOR EMPLOYERS IN THOUSAND OAKS EMPLOYER # OF EMPLOYEES 1 Amgen 5,000 2 The (shopping mall) 2,110 3 Conejo Valley Unified School District 1,980 4 Los Robles Hospital & Medical Center 1,720 5 Baxalta 1,340 6 Anthem Inc. 900 7 Skyworks Solutions Inc. 638 8 California Lutheran University 636 9 SAGE Publications 574 10 Silver Star Automotive Group 560 56 Square Miles Average Household Income within 5-Mile Radius AREA HIGHLIGHTS Schools rated among the top in the country $100,000 $674,000 129,339 One of the safest cities in the nation Vibrant economy with diverse, comprehensive range of businesses Housing options to meet a variety of needs and priorities Comfortable climate Close proximity to beaches, mountains, and world-class entertainment Median Household Income Median Home Price Population 38 Rancho Plaza Thousand, CA 91362 39
AREA OVERVIEW ECONOMY DEMOGRAPHICS SHOPPING CENTERS HOTELS The city's economy is based on a small range of businesses, with biotechnology, electronics, automotive, aerospace, telecommunications, healthcare, and financing occupying most of Thousand ' employment sector. Amgen, Teledyne Technologies, SAGE Publications, and Skyworks Solutions have corporate headquarters in the city, while Bank of America, Baxter International, General Dynamics Corporation, Verizon, Verizon Wireless, Volkswagen, Audi, General Motors, BMW, Silver Star Automotive Group, and Anthem Blue Cross manage regional offices. Thousand also has large employers Los Robles Hospital & Medical Center, Conejo Valley Unified School District, City of Thousand, Hyatt Hotels, and California Lutheran University headquartered in the city. The communities of Thousand, Westlake Village, and Agoura Hills are served by the Greater Conejo Valley Chamber of Commerce, one of the few in California to receive four-star accreditation from the United States Chamber of Commerce. The small business community in Thousand is especially strong; Fundera ranked the city the 5th best city in California for small business in a 2016 study. 1 MILE 3 MILES 5 MILES 2014 Population 12,196 70,205 139,170 2014 Households 4,999 26,932 51,338 2014 Average Household Size 2.46 2.58 2.66 2014 Daytime Population 8,713 40,949 73,551 2014 Owner Occupied Housing Units 38.27% 66.48% 71.68% 2014 Renter Occupied Housing Units 61.73% 33.52% 28.32% 2014 Vacant 2.59% 1.04% 0.86% 2014 Median Household Income $57,967 $83,474 $96,587 2014 Per Capita Income $32,369 $44,310 $49,150 2014 Average Household Income $78,938 $115,258 $132,565 THE OAKS SHOPPING CENTER A shopping center anchored by a Nordstrom, JCPenney, and Macy s and includes many popular retailers as well as a movie theatre. THE PROMENADE AT WESTLAKE Developed by Caruso properties, of th Grove and Americana at Brand, The Promenade at Westlake is a popular destination with sit-down restaurants like The Grill, boutique clothing, Barnes and Nobles, and a Mann movie theater. Best Western Thousand Inn Quality Inn & Suites Courtyard by Marriott TownePlace Suites by Marriott Palm Garden Hotel Hampton Inn & Suites Westlake Village Inn Hyatt Westlake Plaza Four Seasons Hotel Marriott - Westlake Village THOUSAND OAKS ATTRACTIONS Thousand Civic Arts Plaza Santa Monica Mountains National Recreation Area Wildwood Park McCrea Ranch THE LAKES AT THOUSAND OAKS The Lakes is a new shopping center that offers dining options like PF Changs, California Pizza Kitchen, Claim Jumper and more. The Lakes is great for little kids because it has a little playground area and pond with koi fish. There are activities for kids like magic shows, reptilian adventures and comedy shows. Stage Coach Inn Gardens of the World 40 Rancho Plaza Thousand, CA 91362 41
BRANDON MICHAELS GROUP Offering Memorandum