RED 435 Leveraged Analysis of A Property Lab

Leveraged Analysis of A Property Lab

Multifamily Lab RED 435
Your firm is a commercial real estate investor. The Vermont is a luxury high-rise apartment project located at 3150 Wilshire Blvd. Los Angeles, CA 90010 and Vermont Avenue in Los Angeles www.thevermont.net The Vermont apartments were just listed for sale and will come to market in the next month. The listing broker has asked you to review the opportunity. Your team will underwrite The Vermont apartments and make a purchase offer to buy the property. You should use CoStar to evaluate this asset, if you don’t have an account, apartments.com provides rental numbers and CBRE Multifamily Cap Rate Study has cap rates (use the Mid-Wilshire area/Los Angeles Urban) for different Classes of properties. Be sure to provide your sources.
Using an unleveraged analysis of this property create a 1 year stabilized NOI based on the information provided and what you find through your research provide an purchase offer.
Property income and expenses:
– 464 apartments: 90 studios, 232 1-bedrooms and 142 2-bedrooms (CoStar lists a different unit mix). You should determine the appropriate vacancy and rental rate for your underwriting and explain why.
– 31,000 sf retail at $30/sf annual gross rents and 10% vacancy,
– Plus $120,000 annual parking revenue.
– Assume $10 per unit per month misc. income to cover pet rent and other fees.
– 35% of all income is estimate for operating expenses
You will make a team presentation to include:
– Demographic analysis and affordability calculation for the residents living in the area. You should also consider nearby areas or look at the Submarket level information on CoStar. If you don’t have CoStar, an easy way to look up the Zip Code and find surrounding zipcodes within a 5 mile radius is through the website: https://ww3150 w.unitedstateszipcodes.org/
– Economy and apartment market conditions. Is this a market that has been improving since it last sold since 2014? Here are some of the metrics you should look at both past trends, current state and future projections, look at both the Property data and the Submarket data – don’t just list them or copy the graph be sure to explain what is happening and offer some ideas of what’s going on, how does this impact an investment decision around this property?
o Vacancy Rate,
o Market Rent and Market Rent Growth (YOY) per sq. ft or per unit,
o Market Cap Rate,
o Market Sale Price per Unit
– Now pick one other submarket nearby and compare it to the Koreatown submarket across a couple of the key indicators listed about.
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– The Vermont evaluation compared to comparables ( be thoughtful about the comps you choose to use, don’t just provide a list of the comps from CoStar) provide a list of four properties and explain why they are good comps, maps and pictures can help support your reasoning.
– 1 year stablilized Net operating income (NOI) calculation.
– Provide your initial purchase offer using an evaluation of cap rates from CoStar and CBRE
– Provide an investment recommendation, is this a market where you want to invest? Is this a good asset within the market? Make sure you cite evidence to back up your opinion.

I Have Business Resarch Methods Course Assingment

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