CITY 24, LP, a joint venture of Gaslamp Hospitality Management Inc. and the Mandell Development Family Office, is requesting $11,450,000 of construction financing to cover the 2019 purchase of a site and the site work and development costs for a Airbnb Hotel development adjacent to the Little Italy neighborhood of San Diego, CA. The site is fully entitled, permitted, and shovel-ready. Construction is projected to start first quarter of 2022 and complete 18 months later. The hotel layout is designed to feel like a luxury condo complex and therefore could be converted to a multifamily as a backup option (see Exhibit A for more details).
Loan Amount $11,450,000
Term Thirty-six (36) Months with two (2) one (1) Year Extension Options
Amortization Interest Only
Funding Immediate
Loan to Cost (LTC)
69% based on $16,526,927 Total Project Costs
Loan to Value (LTV)
70% based on $16,470,000 Value using a 6.50% Projected Market Cap Rate (If Multifamily) 69% based on $16,480,000 Value using a 4.25% Cap Rate
1.40x stabilized DCR based on 4.50% Ratio (DCR) Rate & 25 Years Amortization Schedule.
Debt Coverage
Use of Funds
Source of Funds
Land Value (2019) $1,057,500 New Loan $11,450,000 Hard Costs $12,428,472 Land Value $1,057,500
Soft Costs $1,855,951 Borrower Cash $4,019,427
Financing Costs $1,185,004 TOTAL $16,526,927
TOTAL $16,526,927
Land Value (2019) $1,057,500
Project Costs $15,469,427
Total Project Costs $16,526,927
Loan Request ($11,450,000) Equity (31%) $5,076,927
San Diego International Airport
Downtown San Diego
Pedestrian Bridge
Interstate 5
San Diego Convention Center
The Subject Property is located at 2801 India Street on a vacant site at the corner of India & Olive Streets adjacent to Downtown San Diego’s walkable Little Italy neighborhood (www.littleitalysd.com). The site is a short Uber ride to San Diego’s most famous amenities, including Little Italy, Downtown San Diego, Seaport Village, the Embarcadero, Petco Park, The Gaslamp District, and the San Diego Convention Center. The site is a few hundred feet away from the northbound India Street exit ramp (14,200+ cpd) of I-5 (233,147+ cpd) and is the first corner lot past India Street from the freeway, which offers easy access to Little Italy and Downtown San Diego (1.4 miles South). The edge of San Diego International Airport is less than 0.5 miles away from the departures and arrival terminal, just across India Street and the freeway. Both the airport and Downtown San Diego can be reached from the property in about 5 minutes.
The subject benefits from being just 1.3 miles southeast from the Marine Corps Recruit Depot San Diego (MCRD). This will be a major demand driver for the hotel as the recruitment depot graduates approximately 21,000 cadets each year spread out over approximately 40 weeks. Families will often come watch the graduation of 300-600 cadets on the weekend and the subject property is ideally suited to serve those travelers due to the bed count.
The 15,246/SF parcel is currently being used for parking, and the site is already fully entitled as a hotel and shovel ready. The property will contain a modern four story building with three levels of luxury suites spread out over a ground floor lobby/ reception area. The project is designed to house 25 fully furnished condo-style suites.
•
• Elevator
• Large communal Rooftop Terrace with 180 degree views of the San Diego Bay.
• Landscaped Courtyards
• All units have fully furnished kitchens, generous private balconies with couches, chairs, and electric barbecue grills
• Complimentary Wi-Fi
• Secured covered parking garage
• Multiple TVs with Cable, Netflix and other entertainment services
• In-Room Kitchens with Full Refrigerators, Stoves, Ovens, Coffee makers & Microwaves
• Laundry facilities
• Early Arrival/Late Checkout Luggage Storage
• Magnetic Keys and Bluetooth Keyless Access
• Since the sponsor underwote that 100% of the occupied units would pay a $25 dollar fee for parking, Westcap assumes that the parking is included and added $25 to the room rate, this wold make the most sense since otherwise the management would have to collect a $25 fee from each room individually via cash or an additional charge order with Airbnb. So the parking will either be Free or $25.
Design Advantage – Bed count matters. City 24’s suites utilize the highest quality, modern sofa-tobed, chair-to-bed, and collapsible double bunk bed furniture configurations to maximize the bed count and optimize its online presence. When appealing to the multiple room user and the large family segment of the hospitality market, the higher the bed count, the greater the online visibility.
The subject includes ten 2-bedroom, 3-bath units that sleep 9 people. There are also thirteen 1-bedroom, 2-bath units that sleep 5 people and two 1-bedroom, 1-bath units that sleep 4 people.
Standard king bed
Collapsible double wall bunk bed
Collapsible double wall bunk bed
Sofa-to-double twin bed
Chair-to-twin bed
Chair-to-twin bed
The subject includes ten 2-bedroom, 3-bath units that sleep 9 people. There are also thirteen 1-bedroom, 2-bath units that sleep 5 people and two 1-bedroom, 1-bath units that sleep 4 people.
It is worth noting that the subject is fully entitled and legally allowed to operate as an Airbnb, this is not the case for many other short term rental properties. This year, San Diego passed the ShortTerm Residential Occupancy ordinance (STRO), which will put in place many new regulations on short term rental properties. Most notably, the total number of whole-home, short term rentals will be capped at 1% of the citys housing stock, this will reduce the number of whole home rentals from around 14,700 to 5,4001. Therefore, It apears much of the subjects competiton will go offline July 1, 2022.
Sleeps Total Units Beds/ Baths Average Unit sqft Total sqft sqft as % of Total Est. ADR* Est. Occ. Est. Annual Revenue*
9 10 2/3 1088 10,880 8% $320 85% $99,280 5 6 1/2 724 4,344 22% $220 85% $68,255 4 7 1/2 545 3,815 19% $220 85% $68,255 4 2 1/1 345 690 3% $220 85% $62,050
Totals 25 19,729 100% 85% *Includes Parking
MarketThe San Diego market statistics are summarized below for Airbnb and VRBO units that sleep nine or five people. Notably, the subject’s projected ADR for units that sleep 9 people ($320) is signifigantly less than market of $487 and should offer the subject a large price advantage.
Type
Booked Rooms (Monthly Avg.) ADR (Monthly Avg.) Median Occ. (Monthly Avg.) Annual Revenue (50th Percentile) Annual Revenue (75th Percentile)
San Diego Market Sleeps 9* 92 $487 75% $94,340 $152,952 San Diego Market Sleeps 5* 409 $231 75% $48,281 $74,525 *Includes Air DNA Data for San Diego October 2020-October 2021, Any Room Count, Entire Home. ADR includes the cleaning fees. Airbnb and VRBO data
According to California Globe
The subject contains two sets of comps from Air DNA represented in this map and the following two pages. (Addresses are approximate as not given out on Airbnb/VRBO)
These comps are for the 9 bed units. Data from AIRDNA, as of late November 2021. Note that these comps are for a single unit of an Airbnb or VRBO which is compared to a single unit at the subject on the last row of the table. An above average number of comps were collected since the subject will have 25 units.
Approx. Address Beds/ Baths Sleeps Days Available ADR Occ. Annual Revenue Notes
2051 Fifth Ave. 3/3.5 6 304 $638 74% $142,900
1959 Columbia St 3/3 7 365 $441 94% $151,300
3627 Lark St. 3/2 8 271 $378 88% $90,400
2117 Fourth Ave 3/2.5 10 300 $484 67% $97,900
2705 Barnson Pl. 3/2.5 10 296 $887 50% $129,800 3167 Ibis Ln 4/3.5 10 357 $874 89% $277,900 Has Pool 3236 Ibis St. 4/2 8 362 $817 86% $255,800 Has Pool
1667 Puterbaugh St. 3/3 5 353 $640 77% $174,000 Has Pool
1105 W Quince St. 3/2 6 365 $513 92% $171,800 Has Pool
Average 3.2/2.6 7.7 330 $630 80% $165,756
Subject 2/3 9 365 $320 85% $99,280 10 Units Projected
These comps are for the 5 and 4 bed units. Data from AIRDNA, as of late November 2021. Note that these comps are for a single unit of an Airbnb or VRBO which is compared to a single unit at the subject on the last row of the table. An Above average number of comps were collected since the subject will have 25 units.
These comps are for the 5 and 4 bed units. Data from AIRDNA, as of late November 2021.Note that these comps are for a single unit of an Airbnb or VRBO which is compared to a single unit at the subject on the last row of the table. An Above average number of comps were collected since the subject will have 25 units.
Approx. Address Beds/ Baths Sleeps Days Available ADR Occ. Annual Revenue Notes
680 W Beech St. 1/1 2 364 $227 97% $80,200
2120 Columbia St. 0/1 4 354 $257 87% $79,000 1446 Columbia St. 1/1 2 332 $222 95% $70,000
555 W Beech St. 1/1.5 5 341 $230 82% $64,600 2440 State St. 2/2 5 348 $231 92% $74,000
1670 Linwood St. 2/2 5 354 $336 76% $90,700
2256 Albatross St. 2/2 4 364 $358 62% $80,900 1765 Kettner Blvd. 2/2 4 355 $262 86% $79,800 2256 Albatross St. 2/2 4 286 $248 85% $60,000
Average 3.2/2.6 7.7 330 $630 80% $165,756
Subject 1/2 5 365 $220 85% $68,255 10 Units Projected
Subject 1/2 5 365 $220 85% $62,050 10 Units Projected
A 1,200-acre urban cultural park located northeast of Downtown San Diego. The park’s site was placed in reserve in 1835, and thus is one of the oldest sites in the United States dedicated to public recreational use. In addition to open space areas, natural vegetation, gardens, and walking paths, it contains a variety of cultural attractions including 16 museums, several theaters, and the world famous San Diego Zoo. There are also many recreational facilities, several gift shops and restaurants. Balboa Park was declared a National Historic Landmark and National Historic Landmark District in 1977.
The home of the San Diego Padres Major League Baseball team, since its opening in 2004, average annual attendance has been approximately 2.1 million fans. The Park offers amazing views of the San Diego Bay and skyline. In addition to baseball games, with state-of-the- art amenities, virtually every square foot of the Park is available for rental including the playing field. The ballpark has more than 20 exclusive venues designed to host events from 50 to more than 40,000 people and is used for multiple purposes including concerts, soccer and rugby matches, and other special events. America’s #1 Ballpark according to USA Today.
Located in Balboa Park, the San Diego Zoo is one of the most progressive zoos in the world, with over 4,000 animals of more than 800 species and more than 700,000 exotic plants. It is privately operated by the nonprofit Zoological Society of San Diego on 100 acres of parkland. In 2018, the Zoo set a record for attendance, seeing more than 4 million visitors for the first time in its 102-year history.
The 161⁄2-square-block Gaslamp Quarter is a vibrant commercial district and historic heart of Downtown. With a diverse selection of restaurants (nearly 150) and clubs, featuring music and dancing, and a variety of specialty retail shops, the Gaslamp Quarter is an established entertainment destination for local residents, Downtown workers, and tourists.
This will be a major demand driver for the hotel as the recruitment depot graduates approximately 21,000 personnel each year spread out over approximately 40 weeks
Located in the northwest district of San Diego’s revitalized downtown, Little Italy offers extensive bay views, fine dining, and cultural events that create an ideal urban community. The lively neighborhood is brimming with distinctive eateries, craft brew pubs, urban wine bars, cocktail hotspots and casual cafes, helmed by old school Italian families and Top Chef alums alike. Alternative amenities include Mercato Farmers’ Market and Amici Park.
Population
Radius: 1 Mile 3 Miles 10 Miles
2026 Projection 25,010 197,479 1,242,902
2021 Estimate 24,466 193,998 1,228,214 2010 Census 21,286 173,391 1,138,563
Growth 2021 - 2026 2.22% 1.79% 1.20% Growth 2010 - 2021 14.94% 11.88% 7.87%
2021 Population by Hispanic Origin 4,331 56,413 437,713
2021 Population 24,466 193,998 1,228,214
White 20,446 83.57% 152,747 78.74% 887,694 72.28%
Black 1,088 4.45% 15,274 7.87% 104,775 8.53%
American Indian & Alaskan 166 .68% 2,425 1.25% 15,350 1.25%
Asian 1,768 7.23% 13,998 7.22% 156,441 12.74%
Hawaiian & Pacific Island 65 .27% 844 .44% 7,915 .64%
Other 934 3.82% 8,709 4.49% 56,038 4.56%
U.S. Armed Forces 195 9,585 36,188 Households
2026 Projection 14,130 93,687 472,497 2021 Estimate 13,847 92,081 466,761 2010 Census 12,204 82,699 432,525
Growth 2021 - 2026 2.04% 1.74% 1.23% Growth 2010 - 2021 13.46% 11.34% 7.92%
Owner Occupied 4,310 31.13% 27,569 29.94% 195,193 41.82%
Renter Occupied 9,537 68.87% 64,512 70.06% 271,568 58.18%
2021 Households by HH Income 13,849 92,080 466,761
Income: <$25,000 1,999 14.43% 15,247 16.56% 74,676 16.00% Income: $25,000 - $50,000 1,871 13.51% 14,749 16.02% 82,696 17.72% Income: $50,000 - $75,000 1,774 12.81% 14,569 15.82% 75,538 16.18% Income: $75,000 - $100,000 1,540 11.12% 11,330 12.30% 61,452 13.17% Income: $100,000 - $125,000 1,746 12.61% 9,115 9.90% 47,365 10.15% Income: $125,000 - $150,000 1,343 9.70% 7,409 8.05% 34,891 7.48% Income: $150,000 - $200,000 1,691 12.21% 8,154 8.86% 40,207 8.61% Income: $200,000+ 1,885 13.61% 11,507 12.50% 49,936 10.70%
2021 Avg Household Income $115,787 $105,346 $100,390
2021 Med Household Income $95,787 $78,255 $75,191
The borrowing entity is City 24, LP, a joint venture of Gaslamp Hospitality Management Inc. and the Mandell Development Family Office, which has a track record of working together to successfully execute hospitality ventures throughout San Diego County, including the Comfort Inn in Downtown San Diego which the partners have owned together for over 20 years. Mark Mandell is the head of the Mandell Development Family Office and Square One Development, which he founded in the 1980s. Mark Mandell has formed over 20 different real estate ventures.
Mandell Development Family Office has been in the construction and real estate business since the early 1960s. Earlier generations focused their business on large-scale building demolition. Mark Mandell’s focus turned to real estate development in the late 1970s. Since then, he has managed all aspects of the acquisition, development, management and repositioning of substantial real estate projects Mr. Mandell is also a respected member of the community, serving for many years on the Board of Board of Directors of San Diego National Bank from 1992 to 2009. He currently serves on the Board of Trustees for California Western School of Law in San Diego.
Mark has further proven himself through his other venture Square One Development which has developed and managed over 700 apartment units, 300 single-family and attached homes, 400 acres of land, and over 1,300,000 square feet of commercial and industrial projects since the early 1980s. He has developed and managed a variety of commercial mixed-use developments, including hospitality, office, light industrial, and retail mainly in San Diego County. Square One Development’s current portfolio includes the Comfort Inn in the Gas Lamp District of San Diego, two office properties in Kearny Mesa, Scripps Ranch Mira Mesa Commercial Center which is a mixed-use retail and office property, and a Rancho Vista Business Park. Mark has created a successful, vertically integrated development and management model.
Jonathan Mandell, Mark’s son, has actively participated in the family business since he was still a teenager. He is now responsible for all aspects of the business, including strategic acquisitions, portfolio management, leasing, construction of tenant and capital improvements, and financing. Gaslamp Hotel Management Inc. was founded by Dana Blasi in 1984. Gaslamp Hospitality Management Inc. has successfully owned and operated 12 hotel properties nationwide. Mr. Blasi has also spent the last 15 years on the Wyndham Hotel Advisory Board.
Square One Office Plaza San Diego, CA
Ramada St. James San Diego, CA
Scripps Lake Office Park San Diego, CA
Murfey Company’s hospitality division is the licensed general contractor hired to build City 24. Murfey Company is headquartered in San Diego and maintains and experienced staff of 25 employees. The general contracting firm headed by Scott Murfey and Russ Murfey whom possess over 50 years of combined experience.
Murfey Company has built over $75 Million dollars worth of development over the last ten years including hotel renovations, retail tenant improvements, and ground up multifamily buildings.
For more information please visit: murfeycompany.com/about
The Californian San Diego, CA
Blue Point Townhomes San Diego, CA
Atlas Lofts San Diego, CA
Land
$70/sqft $1,050,000
Acquisition Fee 0% $
Escrow & Title $7,500
Total Acquisition Costs $1,057,500
Government Fees
Permit Fees
$15,300*25 $382,500 Misc. Permit Fees $Total Government Fees $382,500
Consultants (Predevelopment)
Accessibility Review $2,895 Accounting $3,000 Accoustical Study - Final $13,951 Architect $285,500
Civil Engineer - Asbuilts $122,228 Code Consultant $3,100
Electrical Engineer $8,250
Electrical Engineer - Construction Admin $2,500
Environmental Reports $13,000 Fire Sprinkler Design $12,800 Blueprints $7,500
Subtotal $474,724
General Contractor Precon Services $24,512
Geotech Reports $37,900
Ground & Wall Penetrating Radar $5,100 Hers Consultants $-
Interior Designer $15,000 Landscape Architect $15,900 Legal-Llc $10,000 Legal-Easement Negotiation $10,000
Legal-Terry Fenwick’s Counsel $4,500 Low Voltage $1,500 Market Study Consultant $2,000
Subtotal $126,412
Consultants - Site & Soils
Mechanical & Plumbing Engineer
$37,125
Permit Fee Estimate $1,651
Project Management-Construction $120,000
Security-Camera System During Construction $16,000
Special Inspections (Framing & Concrete) $25,075
Structural Engineer $1,080
Structural Engineer $67,080
Traffic Control Engineer $8,000
Utility Locating Services $3,732
Vacant Lot General Liability $7,250
Misc. $-
Subtotal $286,993
Total Consultants $888,128
Building Costs
$11,086,707
Demolition, Temp Power Pole, Misc. $5,933 Construction Yard Rental $32,000 Soil Export $32,000 Commercial T.I. Allowance $ -
Total Building Costs $11,156,640
Building / Owner Costs
FF&E - Common & Model Units $680,000 Misc.
Total Building Owner Costs $680,000
Direct Cost Contingency 5.00% $591,832
Total Direct Costs $ 12,428,472
Construction Interest Reserve 5.00% $787,939
Construction Loan Fee (Lender) 1.50% $173,533
Debt Placement Fee (Broker) 1.50% $173,533
Lender Closing Fees $50,000 Misc. $ -
Subtotal: $397,065
Total Financing Costs $1,185,004
Total Project Costs $16,526,927
Hotel Income & Expenses Year: 1 2 3 4 5 6 7 8 9 10
Gross Revenue
$ - $ 1,419,850 $ 2,193,668 $ 2,259,478 $ 2,327,263 $ 2,397,081 $ 2,468,993 $ 2,543,063 $ 2,619,355 $ 2,697,935
Other Income $ - $ 146,000 $ 219,000 $ 219,000 $ 219,000 $ 219,000 $ 219,000 $ 219,000 $ 219,000 $ 219,000
Total Gross Revenue $ - $ 1,565,850 $ 2,412,668 $ 2,478,478 $ 2,546,263 $ 2,616,081 $ 2,687,993 $ 2,762,063 $ 2,838,355 $ 2,916,935
Vacancy $ - $ (234,878) $ (361,900) $ (371,772) $ (381,939) $ (392,412) $ (403,199) $ (414,309) $ (425,753) $ (437,540)
Effective Gross Income (EGI) $ - $ 1,330,973 $ 2,050,768 $ 2,106,707 $ 2,164,323 $ 2,223,668 $ 2,284,794 $ 2,347,753 $ 2,412,601 $ 2,479,395
Operating Expenses $ - $ (548,464) $ (833,611) $ (864,241) $ (890,168) $ (916,873) $ (944,379) $ (972,711) $(1,001,892) $(1,031,949)
Net Operating Income (NOI) $ - $ 782,508 $ 1,217,157 $ 1,242,466 $ 1,274,155 $ 1,306,795 $ 1,340,415 $ 1,375,043 $ 1,410,709 $ 1,447,446
Footnotes:
Projected average daily rate (ADR) of the Unit Mix for the first 12 months of operation per borrower
Based on borrower projected vacancy rate of 15%, supported by AirDNA comps.
Operating Expenses are based on:
Property Taxes: $162,955 based on a 1.175% x [(Land Costs) + (Permit Costs) + (Direct Costs)]
Insurance: $12,000 based on Developer Proforma Estimate
Utilities: $77,000 based on Developer Proforma Estimate
Repairs & Maintenance / Turnover: $32,500 based on Developer Proforma Estimate
Cost of Goods Sold (COGS): $27,000 based on Developer Proforma estimate: Room Amenities / Guest Supplies $20,000 and Linens / In-Room Replacements $7,000
Payroll: $167,180 based on Developer Proforma estimate: Host Labor/Relief Labor: $157,680, Outside Services Contracts: $9,500
Advertising, Promotion, and 3rd Party Commisions: $208,186 based on Developer Proforma estimate includes $181,031 (3rd party commisions on sales) + $27,155 (advertizing & marketing)
Administrative & General: $100,542 based on Developer Proforma estimate: $14,000 (General Overhead) + $69,876 (Credit Card Processing Fees) + $12,000 (Information & Telephone Systems)
Management Fee: $80,582 Development Proforma has a General Manager fee of $40,000, Westcap changed to 4% of EGI
Reserves: $80,582 based on a 4% FFE & Capex reserve
Value is based on a 6.5% estimated cap rate, based on when the property is expected to stabilize in mid to late 2023.
A $11,450,000 ($458,000 / Unit) loan is recommended based on the following:
• Extremely strong location right next to the India Street freeway exit (14,200+ cpd) of Interstate 5 (233,147+ cpd), and is the closest northbound exit to San Diego International Airport. The property is also located less than a 5-minutes commute to the airport’s Arrival/Departure area and Little Italy which includes restaurants, bars, retail, and large weekly farmers market/mercado which covers almost halfa-mile of food and entertainment. The property is also less than 1.5 miles away from Downtown San Diego.
• The property is currently fully entitled, permitted, and shovel-ready to be built as a hotel and is projected to break ground in the first quarter of 2022.
• Existing Q10 | Westcap client and insurance company borrower who has maintained a perfect record of on-time payments. The borrower has invested in or developed more than 700 apartments, 300 single-family homes, 400 acres of land, and 1,300,000 square feet of commercial and industrial properties.
• 69% LTC based on a $11,450,000 loan request and $16,526,927 of Total Project Costs.
• 70% LTV based on a $16,470,000 Pro Forma value & 6.50% cap rate
• (If Multifamily) 69% LTV based on a $16,480,000 Pro Forma value & 4.25% cap rate.
• 1.40x DCR based on a $1,070,701 Pro Forma NOI, 4.50% interest rate & 25 year amortization.
• (If Multifamily) 1.17x DCR based on a $700,430 Pro Forma NOI, 3.25% interest rate & 30 year amortization.
• $5,076,927 (31%) equity based on total costs of $16,526,927.
The City 24 Hotel is located in the Uptown Community Plan Area and is zoned CC-3-4 which allows for both visitor accommodation (hotel), multifamily apartments, or a combination of both. Although the development has been permitted as a 25-guest room hotel with approved Site Development Permit & Building Permit, the property could likely be converted to apartments by utilizing the City of San Diego’s Complete Communities Housing Solutions Ordinance referenced below.
In 2020 San Diego added a new density bonus allowance to its zoning code which includes incentives aimed at encouraging the building of homes near high-frequency transit This new zoning law amends the City’s Affordable Housing Regulations to provide an unlimited density bonus, various other “incentives” to projects that (1) are in Transit Priority Areas (TPAs) and (2) provide certain “affordable” components. The subject property is located within a TPA and could accommodate the affordable components required in order to qualify. The affordable requirements would include rent restricting a total of 5 of the 25 units with 2 at 50% area median income (AMI), 1 at 60% AMI, and 2 at 120% AMI (in addition to other design requirements) to qualify for unlimited residential density within Tier 3. More information can be found online at: https://www.sandiego.gov/sites/ default/files/ordinance-21275.pdf
Since the subject property has the potential to be a multifamily property in the future as a fall back option, we have analyzed this scenario in the following pages. The borrower’s consultant, Bishop Ventures, LLC recently converted a new hotel to a multifamily property and it took 3 months to get the change of use approved (a more conservative estimate would be 6-12 months).
City 24 is located at the very edge of CoStar’s Coronado/Point Loma multi-family submarket, which covers from Coronado Island to the San Diego Airport. The property sits near the junction of Coronado/Point Loma, Downtown San Diego, and Balboa Park multifamily submarkets. It is also situated in the San Diego CBD hospitality submarket.
Location
Vacancy Rate % Daily Rent sqft (Asking)
Sales Price/ Unit (4-5 Star) Market Cap Rate Submarket Inventory
Downtown San Diego Submarket 1 4.5% $3.54 $419,444 3.8% 13,208
Little Italy Submarket 1 2.0% $3.67 $561,055 3.8% 2,420
Coronado/ Point Loma Submarket 1 2.0% $2.96 $413,510 4.0% 9,123
Balboa Park Submarket 1 2.5% $2.35 $383,266 4.1% 30,038
Footnotes: 1 CoStar 2021 Data
City 24’s project’s design calls for a modern four storey building with three levels of luxury suites spread out over a ground floor lobby/reception area. The project is designed to house 25 fully furnished condo-style suites. The suites are heavily amenitized, with the option to sleep up to 9 people in the 2-bedroom units, and the 1-bedroom units sleep up to 5 people. The property’s unit mix features four floorplans with three (3) one-bedroom layouts with one-bathroom and two-bathroom options and one (1) two-bedroom layouts that feature 2.75 baths. The size of these units ranges from 345/SF to 1,088/SF.
Unit Type
Total Number of Units Average Unit Size Total sqft sqft as % of Total
Multi-Family Market Rent/ Month
Market Rent/ Year
2 Bed / 3 Bath 10 1,088 10,088 55% $3,308 $45,696
1 Bed / 2 Bath 5 724 3,620 18% $3,200 $38,400
1 Bed / 2 Bath (Penthouse - Suite 405) 1 724 724 3.7% $3,840 $46,080
1 Bed / 2 Bath 6 545 3,270 17% $3,000 $36,000
1 Bed / 2 Bath (Rent Restricted) 1 545 545 3% $1,000 $12,000
1 Bed / 1 Bath (Rent Restricted) 2 345 690 3% $1,250 $12,000
Totals 25 19,729 100% $953,040
Footnotes: 1 CoStar 2021 Data
Projected Gross Income 1 $953,040 Reimbursements 2 $22,900 Parking Income 3 $37,500 Vacancy 4 ($50,672) Effective Gross Income $962,768
Operating Expenses 5 $227,205 Management 6 $28,883 Reserves 7 $6,250 Total Operating Expenses $262,3381 Net Operating Income $700,430 Value 8 $16,480,000
Footnotes: 1 Projected Gross Income is based on (a) Q10 Westcap estimate of projected multi-family rent roll 2 Estimated RUBS Income at 80% recapture of Utilities estimated expenses of $28,625 3 Parking Income is estimated at (a) $125/Space/Month x 25 parking spaces 4 Based on 5.0% vacancy rate for multi-family 5 Operating Expenses are based on: - Property Taxes: $162,955 based on a 1.175% x [(Land Costs) + (Permit Costs) + (Direct Costs)] - Insurance: $10,000 based on a $400/Unit estimate - Utilities: $28,625 based on a $1,145/Unit estimate which includes Electricity, Gas, Water/Sewer & Trash - Repairs & Maintenance / Turnover: $28,625 based on $350/Unit estimate for Repairs & Maintenance and $125/Unit estimate for unit turnover - Advertising, Promotion, and 3rd Party Commisions: $6,250 based on $250/Unit for advertising - Administrative & General: $7,500 for multi-family usage based on $300/Unit 6 Management Fee: $28,883 for Multi-Family based on 3% of EGI 7 Reserves: $6,250 based on $250/Unit 8 Value is based on 4.25% cap rate for multi-family