NB Chateau Sera, DST
STUDENT HOUSING NEAR USC IN LOS ANGELES, CA
Total Offering Price $11,754,000
Total Investor Equity $4,254,000
- Total Loan Amount $7,500,000
- Target Yield: 6.5%
- Loan-to-Value 63.81%
- Minimum Investment[1031]: $50,000
The Tropicana and Chateau Sera are two 30 unit student housing complexes located within a few blocks of the University of Southern California main campus. Both properties are currently 100% leased for the 2014-15 school year with monthly rents ranging from $1250-$1450.
Chateau Sera, Los Angeles, CA
100% Current Occupancy for three consecutive years with Nelson Brothers. Newly renovated unit interiors: Value-added strategy to complete renovations
INVESTMENT HIGHLIGHTS
In 2013 and 2014, Nelson Brothers renovated unit interiors at both Tropicana and Chateau Sera.
Post-renovated units were able to draw a 30% rental rate increase. Currently 51 of the 60 units have been renovated. Plans are to potentially boost current income and property value by finalizing improvements on the last units by the end of 2015.
Target Strategy
Nelson Brothers believes there may be five key advantages that help distinguish the Chateau Sera DST as an unique investment opportunity. The target goal is to capitalize on these components to potentially offer a balance of high occupancy, monthly cash flow, tax efficiency and long-term growth – all while leveraging the historical stability of USC.
First, the properties are located near a major, highly renowned university in the heart of a major US city. A city known for historically strong real estate values. Second, both properties boatswain excellent track record of high occupancy with no vacancies over the last three years under NB management. Third, there is modest value-added potential as NB aims to continue raising rents by completing interior unit renovations. Given the proximity to campus and the comparative affordability of the units, the properties have resonated well with international graduate students, a group NB believes to be one of the faster growing segments within the USC student population.
Anticipated Targeted Loan Terms*
Non-recourse. 10-year fixed interest rate loan, 30-year amortization, 4-year interest-only loan from Ladder Capital. DST structure.
TARGETED BENEFITS
- 6.5% 1st Year Targeted Cash-on-Cash Return
- Los Angeles, CA: 2nd Largest City in U.S.
- 100% Current Occupancy for three consecutive years with Nelson Brothers
- Newly renovated unit interiors: Value-added strategy to complete renovations
PROPERTY SUMMARY
TROPICANA
1256 West 29th Street,Los Angeles, CA 90007
Tropicana is a charming three story building with 30 unique apartments. The buildings exterior was completely remodeled in 2004 and NBPRE recently completed the full interior renovations. Both Studio and one bedroom units offer full size kitchens with new cabinetry, appliances, flooring, countertops and paint. This building is located on the corner of 29th Street and Orchard, just one block north of campus.
CHATEAU SERA
2343 Scarff Street, Los Angeles, CA 90007
Chateau Sera is a three story building with 30 unique apartments with Spanish style architecture. Sera was originally built as a single family mansion and later converted to feature dozens of luxury apartments in 1989. Both the studio and one bedroom apartments offer full kitchens, fully renovated to have a modern, contemporary look, with all new appliances and finishes. The property is located on Scarff street, west of USC and about 12 minutes walking distance to campus. Sera has primarily targeted graduate students who prefer living on their own. Scarff street is home to several historical mansions and cultural land marks.
LOCATION SUMMARY
Los Angeles
Los Angeles is the 2nd largest city in the U.S. with a population of over 3 million people. The city has a great history of growing demand for housing, increased rental rates and real estate appreciation driven by 23 consecutive decades of population incline. Anchoring the steady population growth is LA’s sunny, sub-
Mediterranean climate, a variety of unique and appealing landmarks and a diverse economy ranging from international trade to entertainment, television, motion pictures, video games, recorded music, aerospace, technology, petroleum, fashion, apparel, and tourism. Only 14 nations have a higher annual
GDP than the greater Los Angeles MSA.
University of Southern California (USC)
Location: Los Angeles, CA | Founded: 1880
Endowment: $4 billion | Total Enrollment: 39,958
Conference Affiliation: Pac-12 | Campus size: 301 acres
USC Releases Admission Statistics for Fall 2014
- The vast majority of admitted freshmen rank in the top 10% of their high school’s graduating class
- 75% have standardized test scores at or above the 95th percentile, and their average un-weighted high school GPA is 3.82
- Overall, 44% of admitted students are from California, 39% come from the other 49 states and the remaining 17% representing 80 foreign countries
ABOUT NELSON BROTHERS
CLIENT DRIVEN
We strive to provide exceptional service and personal care from an experienced team of professionals.
PURPOSE-BUILT PROPERTIES
We specialize in developing, acquiring and managing quality purpose-built student housing assets.
PROVEN EXPERTISE & MANAGEMENT
We perform high-level on-going due diligence on every property we’re involved in and have over 1,200 investors in our 1031 exchange programs.