1 minute read
executive summary
by Berkadia
The Preston Resident Demographics
HOUSEHOLD INCOME AVERAGE
$148,277 22% RENT-TO-INCOME
NOTABLE EMPLOYERS
COMPELLING VALUE-ADD OPPORTUNITY
INDUSTRY BREAKDOWN
Professional Services
Entertainment/Media
Hospitality/customer Service
Self-Employed/Other
Government/Education
Healthcare/Medical Services
Miracle Mile is an infill, supplyconstrained submarket in the midst of a renaissance that is generating incredible demand for luxury rental product. With current ownership having recently invested heavily in curing deferred maintenance and renovating common areas, the Preston offers investors the most efficient way to satisfy this demand through a thoughtful renovation strategy of unit interiors. Newer properties within walking distance are proving out as much as $1,000 in rent headroom, offering investors the opportunity to drive rents by completing a unit interior renovation program that would appeal to LA’s high-income, luxury-seeking renters.
Significant Barriers To Entry
With escalating construction costs, a lack of available land, and a notoriously onerous entitlement process, the Mid-Wilshire market has one of the highest barriers to entry of any submarket in the nation. in fact, over the past 5 years the submarket has only seen the development of two institutionally sized apartment communities (One Museum Square and Vision on Wilshire), both of which are highrise construction. With no projects under construction, The Preston presents a unique opportunity to not only gain access to this exclusive submarket, but also to acquire quality podium construction asset at well-below today’s replacement cost
Outperforming Market Fundamentals
Since 2012 the Mid-Wilshire submarket occupancy averaged 96.1% and annual rent growth averaged 4.3%, which was higher than the Los Angeles market as a whole (3.9%). With employees returning back to the office, a new owner has the opportunity to take advantage of the submarket’s strong rent growth that will average 4.3% annually over the next three years. The property is currently seeing positive rent momentum, with recent lease tradeouts averaging +17.4% over the last 12 months.
BULLS-EYE LOCATION WITH 94 WALK SCORE
Located at the geographic center of Los Angeles, Miracle Mile is just four miles from the myriad of jobs, retail and entertainment in Beverly Hills, West Hollywood, Hollywood and century city. Additionally, with a Walk Score of 94, the property is just one block from Ralphs and Rite Aid; two blocks from LA’s renowned “Museum Row”; three blocks from major media and entertainment companies like CBS Radio, Sundance Institute and SAG-AFTRA; and within a 15-minute walk of The Grove, LA’s premier 600,000 sq. ft. outdoor lifestyle center. By 2024, residents will have two brand-new metro stations within a few blocks that will take them to Downtown in under 15 minutes thanks to the $9.5 billion Metro Purple Line extension currently under construction.