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HomeMy WebLinkAboutItem 13a - Purchase and Sale of the Arcadia Self-Storage Property at 35 W. Huntington Drive DATE: June 5, 2018 TO: Honorable Mayor and City Council, as the Successor Agency to the Arcadia Redevelopment Agency FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director By: Tim Schwehr, Economic Development Analyst SUBJECT: SUCCESSOR AGENCY RESOLUTION NO. SA-15 APPROVING A PURCHASE AND SALE AGREEMENT WITH NORTHEAST DEVELOPMENT ENTERPRISES II, LLC FOR THE ARCADIA SELF- STORAGE PROPERTY AT 35 W. HUNTINGTON DRIVE Recommendation: Adopt SUMMARY Northeast Enterprises II, LLC (“Buyer”) has been selected as the Successor Agency’s preferred buyer for the property at 35 W. Huntington Drive (“Property”). The Buyer proposes to purchase the Property and repurpose up to 15,000 square-feet of the existing building into a multi-tenant food hall. The remainder of the building will remain as leasable self-storage units. It is recommended that the City Council, serving as the Successor Agency to the Arcadia Redevelopment Agency, adopt Resolution No. SA-15 (see Attachment 1) approving a Purchase and Sale Agreement with Northeast Development Enterprises II, LLC for the property at 35 W. Huntington Drive. BACKGROUND The Property is a 20,040 square-foot lot developed with a 38,000 square-foot, 4-story plus basement building constructed in 1949. Each floor, including the basement level, contains approximately 7,600 square feet of gross floor area. There is a 21-space surface parking lot at the north end of the site. The building was originally constructed as a commercial storage facility and has been in continuous operation as commercial storage and/or self-storage since that time. The ground-floor is split-level with the lower half fronting on Huntington Drive and consisting of two small commercial office units. The upper half of the *first floor is accessed from the rear parking lot and consists of individual self-storage units, the self-storage leasing office, and an empty area that formerly housed parts and inventory storage for Rusnak Mercedes-Benz. The basement Successor Agency Resolution No. SA-15 Purchase and Sale Agreement 35 W. Huntington Dr. June 5, 2018 Page 2 of 5 level is currently vacant and was most recently occupied by Rusnak for parts and inventory storage. Floors 2-4 consist of individual self-storage units that are leased to the general public. The roof of the building contains an AT&T rooftop wireless facility with a long-term lease through April 2028, and CCTV cameras and equipment owned and operated by the City. The Property was originally acquired by the Arcadia Redevelopment Agency in 2006 as part of a Land Assembly and Development Agreement. The Redevelopment project involving this property never materialized, and the building has since been managed as a self-storage facility through a contract with Braun Management Company. Following the dissolution of Redevelopment in 2012, the City of Arcadia chose to become the Successor Agency to the Arcadia Redevelopment Agency. A Long Range Property Management Plan (“LRPMP”) was adopted by the City in January of 2013. The LRPMP specifies the dissolution process and timeline for each of the five commercial properties that were owned by the Agency at the time of dissolution (see Attachment 2). Consistent with the LRPMP, four of the five properties were sold to Rusnak Mercedes- Benz in April 2013 to complete their automobile dealership expansion project. The LRPMP established that the final Agency property at 35 W. Huntington Drive be used as temporary parts storage and inventory for Rusnak on the basement and first-floor until such time that their dealership expansion project was complete. Floors 2-4 were approved to continue operating as leasable self-storage units until Rusnak vacated the property. The Rusnak development project was completed in July 2017, and their parts storage and inventory operation relocated into the new development in August 2017. The LRPMP specifies that the Agency should now move forward with the sale and dissolution of the property at 35 W. Huntington Drive. To facilitate this, an Appraisal Report of the Property was completed in May 2017 by James H. Pike of Cushman & Wakefield Western, Inc. The Appraisal Report concluded a fair-market value of $5,400,000 for the Property. This estimate of value is based on the building being converted back into a full self-storage use and being sold “as-is”. The report concluded that conversions to non self-storage uses was not financially feasible. A summary of the Appraisal is included as Attachment 6. A Request for Proposals (“RFP”) for the Property was issued on June 7, 2017, to local real estate developers, commercial brokers, and self-storage operators. The RFP requested prospective buyers to submit a purchase price offer and a description of how they intended to use the Property. Stated in the RFP was the Agency’s desire to repurpose the ground floor of the building into a more active commercial use consistent with the General Plan designation of the site and the vision for the Downtown Arcadia commercial district. Agency staff facilitated tours of the site to over a dozen interested parties. Of these, five submitted formal proposals in response to the RFP. Three of the proposals were to continue the existing self-storage use on all levels, while leasing the two small commercial units fronting Huntington Drive as either office or retail. One Successor Agency Resolution No. SA-15 Purchase and Sale Agreement 35 W. Huntington Dr. June 5, 2018 Page 3 of 5 submittal proposed to acquire and hold the Property with the long-term goal of incorporating it into a future development project with other contiguous parcels on this block. The final proposal was to repurpose the entire ground floor and the basement and/or roof of the building to a multi-tenant food hall with residential lofts on floors 2-4. The proposals were reviewed by staff, and then presented to the Successor Agency in study session on September 19, 2017. Following discussion, the Agency selected the multi-tenant food hall as the preferred option, and directed staff to work with the developer to refine the details of their project. On February 6, 2018, a revised proposal from the Buyer was presented to the Successor Agency in study session. The revised proposal included an option to continue using floors 2-4 as self-storage instead of residential lofts; a parking mitigation plan to address the lack of on-site parking for the food hall component; and a modified purchase price. Following review of the revised proposal, the Successor Agency directed staff to prepare a Purchase and Sale Agreement based on the Buyer’s revised proposal. DISCUSSION This Purchase and Sale Agreement includes a purchase price of $3,250,000 with a $25,000 deposit upon open of escrow, and a 180-day escrow period. Close of escrow conditions include approval of the development project entitlements (Conditional Use Permit and Architectural Design Review) and a requirement for the Buyer and City to enter into a Development Agreement. The development project will include conversion of up to 15,000 square-feet of the building into a multi-tenant food hall, and the continued operation of self-storage use on floors 2-4. The details, terms, and conditions of the development project will be specified in the Development Agreement and entitlement approvals, including all parking mitigation measures. Following approval of the Purchase and Sale Agreement, the entitlements and Development Agreement will be presented to the Planning Commission for recommendation, and to the City Council. This is anticipated to occur in August and/or September of this year. In the event the entitlements or Development Agreement are not approved, the property will fall out of escrow and remain under Successor Agency ownership. The Redevelopment Dissolution process and the Agency’s Long Range Property Management Plan (“LRPMP”) allow for the Successor Agency to sell the property to a preferred buyer based on flexible criteria. California Health and Safety Code Section 34177(e) states disposal of assets and properties of the former redevelopment agency is to be done “expeditiously and in a manner aimed at maximizing value.” The term “maximizing value” is not specifically defined. The sale also requires the Oversight Board to make a finding that the property is being sold in furtherance of and consistent with the LRPMP. The Agency’s LRPMP itself does not state any specific requirements that must be adhered to for the sale of the Property. Based on these requirements, the Successor Agency Resolution No. SA-15 Purchase and Sale Agreement 35 W. Huntington Dr. June 5, 2018 Page 4 of 5 following criteria have been identified as the most significant for furtherance of and consistency with the LRPMP and maximizing value: 1. Purchase Price: Of the five proposals received, the Buyer’s revised offer price of $3,250,000 was the third highest. The two higher offer prices were $3,650,000 and $3,500,000, both from self-storage operators. 2. Long-term Economic Value: The multi-tenant food hall will create significant long-term financial value for both the City and the other taxing agencies in the form of increased sales tax and property tax revenue as compared to continued use as a self-storage facility. 3. Land Use Compatibility: From a land use standpoint, the food hall proposal is the most consistent with the General Plan Designation of the site and the vision for the Downtown Arcadia commercial district. The food hall use will add significant economic value to this commercial district. Based on the above criteria, it is believed that the multi-tenant food hall proposal will create the most long-term economic value for the City and other taxing agencies, and the highest economic benefit for the Downtown Arcadia commercial district in furtherance of the LRPMP. ENVIRONMENTAL ANALYSIS The proposed Purchase and Sale Agreement qualifies as a Categorical Exemption from the California Environmental Quality Act (“CEQA”) under Section 15332 as an Infill Development project. FISCAL IMPACT The City will receive approximately 9% of the sale price of the Property in accordance with its share of property tax revenues. The remainder will be distributed on the other affected taxing entities. Based on a $3.25 million purchase price, the City would receive approximately $292,500 as well as ongoing property taxes in the amount of approximately $2,925 per year, which would grow over time. Once operational, the food hall will generate long-term sales tax revenue for the City. RECOMMENDATION It is recommended that the City Council, as the Successor Agency to the Arcadia Redevelopment Agency adopt Successor Agency Resolution No. SA-15 approving a Purchase and Sale Agreement with Northeast Development Enterprises II, LLC for the Arcadia Self-Storage property at 35 W. Huntington Drive. Successor Agency Resolution No. SA-15 Purchase and Sale Agreement 35 W. Huntington Dr. June 5, 2018 Page 5 of 5 Attachment 1 - Successor Agency Resolution No. SA-15 (Purchase & Sale Agreement) Attachment 2 - Aerial Photo and Photos of Property Attachment 3 - Existing Site Plan and Floor Plans Attachment 4 - Successor Agency Long Range Property Management Plan Attachment 5 - Food Hall Design Concept Plans Attachment 6 - Appraisal Summary Report 33-35 West Huntington Drive Huntington Dr. Santa Anita Ave. ARCADIA SELF-STORAGE PROPERTY PHOTOGRAPHS Property Photographs AERIAL PHOTOGRAPH CUSHMAN & WAKEFIELD 6 ARCADIA SELF-STORAGE PROPERTY PHOTOGRAPHS HUNTINGTON DRIVE VIEW WEST HUNTINGTON DRIVE VIEW EAST CUSHMAN & WAKEFIELD 7 ARCADIA SELF-STORAGE PROPERTY PHOTOGRAPHS SUBJECT RETAIL UNITS MORLAN PLACE FRONTAGE – RUSNAK MERCEDES BENZ IN BACKGROUND CUSHMAN & WAKEFIELD 8 ARCADIA SELF-STORAGE PROPERTY PHOTOGRAPHS REAR ENTRY OFF MORLAN PLACE WEST FACE OF BUILDING OFF MORLAN PLACE CUSHMAN & WAKEFIELD 9 ARCADIA SELF-STORAGE PROPERTY PHOTOGRAPHS FRIEGHT ELEVATOR EAST FACE OF BUILDING FROM HUNTINGTON DRIVE CUSHMAN & WAKEFIELD 10 ARCADIA SELF-STORAGE PROPERTY PHOTOGRAPHS RETAIL INTERIOR FREIGHT ELEVATOR CORE CUSHMAN & WAKEFIELD 11 ARCADIA SELF-STORAGE PROPERTY PHOTOGRAPHS RETAIL INTERIOR FIRST FLOOR HALLWAY SELF-STORAGE CUSHMAN & WAKEFIELD 12 ARCADIA SELF-STORAGE PROPERTY PHOTOGRAPHS BASEMENT (RUSNAK PARTS DEPARTMENT) STORAGE UNITS CUSHMAN & WAKEFIELD 13 ARCADIA SELF-STORAGE PROPERTY PHOTOGRAPHS STORAGE UNITS STORAGE UNITS CUSHMAN & WAKEFIELD 14 ARCADIA SELF-STORAGE PROPERTY PHOTOGRAPHS CELLULAR EQUIPMENT/FREIGHT ELEVATOR ENGINE ROOM LOADING DOCK CUSHMAN & WAKEFIELD 15 ARCADIA SELF-STORAGE PROPERTY PHOTOGRAPHS FREIGHT ELEVATOR ENGINE ROOM CUSHMAN & WAKEFIELD 16 LONG RANGE PROPERTY MANAGEMENT PLAN SUCCESSOR AGENCY TO THE FORMER ARCADIA REDEVELOPMENT AGENCY 240 West Huntington Drive Arcadia CA 91007 Arcadia Commons will become one of the most active food halls in the San Gabriel Valley. It will be an energetic, dynamic space packed with close to 20 different boutique food vendors totaling 6,500 sf on the basement and ground floors. The gastronomic choices will be entirely focused on local, creative options and range in variety from around the world. It will draw inspiration from successful food halls/ social spaces around the US, from Los Angeles’ own Grand Central Market, Anaheim’s Packing District, San Diego’s Quarteryard, Philadelphia’s Reading Terminal Market, and Brooklyn’s Berg’n and DeKalb Market Hall. There is also the possibility of adding a rooftop gastropub/ small plates establishment (pending structural investigation) whose 360 degree views of the San Gabriel mountains, Arcadia Park and Santa Anita Racetrack would make it an instant destination spot in Arcadia. The ultimate goal of the project is not only to make a great eating destination but also a place for community to socialize and bond amongst friends and family. Arcadia Commons will be a festive locale for food, drink, and good cheer. The possibility of Arcadia Commons becoming a social landmark is what will allow the project to truly contribute to the City’s culture and revitalize the historic, pedestrian-friendly district that is Downtown Arcadia. Project examples, top to bottom: Grand Central Market, Meat Packing District, Grand Central Market exterior What is ‘ARCADIA COMMONS’? Architecture 1. Emphasize the social aspect. Increase public space via rear patio underneath loading dock canopy. 2. Increase the porosity of both the front and rear entrances by making them completely open during business hours. 3. Activate rooftop to provide a unique experience otherwise unseen in the San Gabriel Valley. 4. Work off the massiveness and beauty of the existing building. An effort will be made where possible to bring out notable features like the rear canopy, the mushroom columns, and the unfinished concrete surfaces. Food 1. Keep tenants local and regional 2. Variety – food type, $ to $$$ plates, ethnicity 3. Place emphasis on the ‘discovery’ part of the gastronomic experience 4. Experiment with short term tenants/ pop-up restaurants to a small degree to continually create buzz 5. Work closely with trend setters in the food industry to maintain first in class experience Aerial view from north Roof Deck Dining Porch Project Concept Front exterior view from Huntington Drive Food Hall The main objective of the food hall is to help the City of Arcadia grow into the type of city the residents envision. Arcadia has continually created an environment that attracts local and international interest with its amazing schools, the Westfield Fashion Park, 626 Night Market, Santa Anita Racetrack and more. The addition of a world class food hall will keep Arcadia on the map when it comes to suburban cities adapting to the new trends in retail. The food hall will play a critical role in activating Downtown Arcadia as well as the Metro Station, which has been a huge focus of the city. Arcadians enjoy a variety of food and we intend to give them what they want. Food Types Potential Tenants Chego! oyster bar Howlin Ray’s fried chicken 26’ high atrium/ entrance to basement Pizzeria Mozza Coolhaas Ice cream Eggslut Stumptown Coffee outdoor seating Wexler’s Deli Ippudo Japanese tonkotsu noodles up up up up Seafood Asian Sandwich Italian Coffee/ pastry Desserts Vertical circulation Ground floor plan Open to Huntington Drive Food Types window We want to mix it up. High and low cuisine. East to West and then back around again and land maybe somewhere in between. We will put the emphasis on the ‘discovery’ part of the dining experience so that it is an eclectic and unpredictable one. We believe finding your food can almost be as good as eating it. Our plan is to create a dynamic blend of small food vendors (200- 600 sf on ground floor, larger tenants on basement level) to make this a stimulating experience. The floor plan is designed to be extremely open on both ends to tempt and entice the passerby. The variety allows friends and family with varying tastes and budgets to eliminate all worries and concerns, so the focus can be on enjoying time together and appreciating good food and company. Program plan Disclaimer: Tenants mentioned are potential not actual tenants and mentioned primarily for illustrative purposes. That said, we believe there is extremely high demand for boutique food vendors in Arcadia given the lack of nearby options. Ground Floor Plan Rear exterior view Roof view north to San Gabriel Mountains Roof view south into Arcadia Park The rear area under the canopy will contain the bulk of the seating area for the first floor. It will contain large communal benches to accommodate parties small and large and can be utilized by any of the patrons of the vendors inside. It can be the de-facto ‘welcome mat’ for the project. From the ground plane, there will be hints of the activity above on the roof that will entice the passerby below. The ability to share and taste different foods from different vendors, while sitting with friends and family creates an experience that is rare and extremely satisfying. This type of experience has been proven around the country and the world to be a successful way to rehab an old historic building. Rear Canopy & Parking Basement plan Golden Road Brewery Donut Friend Kazunori sushi Gaby’s Mediterranean restrooms Round’s Burgers Gaby’s Mediterranean Kazunori Hand Rolls – of Sugarfish fame Donut Friend – a hit in Highland Park Gol den Road Brewery The basement will have a strong connection with the main level via a 26’ high atrium that will be well-lit by natural light. In general, the tenant size will be larger than the units on the ground floor due to the point of access. The basement is an opportunity for tenants with a larger footprint to continue to create larger menus, yet still be involved in the food hall concept. And with lower per square foot rents, the spaces will attract many local and regional tenants of note. Seating will also be available in the basement creating another area to commune. Basement Plan Quartyard – San Diego Everson Royce Bar – Arts District LA The Standard – Downtown LA Roof plan AOC – Beverly Grove The roof will be investigated for its capacity to accept a minor buildout to allow a small tapas bar/ gastropub. The goal would be an urban, yet small scale and relaxed environment. This would be the first of its kind in the San Gabriel Valley. The seating would be primarily outdoors. The views into Arcadia Park, San Gabriel Mountains and the Santa Anita Racetrack would be remarkable and instantly make the project a landmark in Arcadia. The roof top bar will be so unique that it would attract customers from the entire San Gabriel Valley and beyond. Opportunities to create a space like this are rare, which makes it a destination and attraction that will help activate the immediate surroundings including the Metro Stop and Downtown Arcadia. Father’s Office – Culver City bar kitchen restroom planter Roof Plan What all of these projects have in common: -communal seating areas -small, local food vendors -variety of food options -adaptive re-use of historic industrial buildings Berg’n – Brooklyn, NY with food vendors in background DeKalb Market Hall – Brooklyn, NY Successful Food Hall Examples Meat Packing District – Anaheim, CA APPRAISAL OF REAL PROPERTY Arcadia Self-Storage 35 W. Huntington Drive Arcadia, Los Angeles County, CA 91007 IN AN APPRAISAL REPORT As of May 8, 2017 Prepared For: City of Arcadia 240 West Huntington Drive Arcadia, CA 91007 Prepared By: Cushman & Wakefield Western, Inc. Valuation & Advisory 601 South Figueroa Street, 47th Floor Los Angeles, CA 90017-5752 Cushman & W akefield File ID: 17-38003-900400-001 317 CUSHMAN & WAKEFIELD WESTERN, INC. 601 SOUTH FIGUEROA STREET, 47TH FLOOR LOS ANGELES, CA 90017-5752 Arcadia Self-Storage 35 W. Huntington Drive Arcadia, Los Angeles County, CA 91007 CUSHMAN & WAKEFIELD Cushman & Wakefield Western, Inc 601 South Figueroa Street, 47th Floor Los Angeles, CA 90017-5752 Tel +1 (213) 955-5100 cushmanwakefield.com June 4, 2017 Dominic Lazzaretto City Manager City of Arcadia 240 West Huntington Drive Arcadia, CA 91007 Re: Appraisal of Real Property In an Appraisal Report Arcadia Self-Storage 35 W. Huntington Drive Arcadia, Los Angeles County, CA 91007 C&W File ID: 17-38003-900400-001 Dear Mr. Lazzaretto: In fulfillment of our agreement as outlined in your Professional Services Agreement Regarding Appraisal Services, we are pleased to transmit our appraisal of the above property in an Appraisal Report dated June 4, 2017. The effective date of value is May 8, 2017. This Appraisal Report is intended to comply with the reporting requirements set forth under Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated in the following pages. This appraisal is intended to provide an opinion of the fair market value of the fee simple interest in the property located at 35 W. Huntington Drive, Arcadia, CA. Known as Arcadia Self-Storage, the property is a self-storage facility comprised of 24,336 ± square feet of rentable area with 284 self-storage units (potentially , 2,114 square feet of retail space, and 7,531 square feet of rentable area in the basement. The facility is built on a 20,534-square foot parcel of land. Constructed in 1949, the property is currently 86 percent occupied and is considered to be Class C in terms of physical and investment quality. It is likely that the former Rusnak (Mercedes Benz of Arcadia) space will be converted with additional self-storage units. Therefore, we estimate that the total self-storage square footage will be 22,222 square feet. With the additional self-storage space, the number of units increases to 363 spaces, and with 2,114 square feet of retail space, the total rentable area is 24,336 square feet. City of Arcadia June 4, 2017 Page 2 Based on the agreed-to Scope of Work, and as outlined in the report, we developed the following opinion of Fair Market Value: Per your request, we have analyzed the property under the assumption that the building’s self-storage areas could be converted to office uses. In the Highest and Best Use section, we determined that such conversion would not be financially feasible (i.e., resulting in a value lower than the value as currently improved). Based on that analysis, the highest and best use of the property, as improved, is as a self-storage facility. This letter is invalid as an opinion of value if detached from the report, which contains the text, exhibits, and Addenda. Respectfully submitted, CUSHMAN & WAKEFIELD WESTERN, INC. James H. Pike, MAI, AI-GRS, MRICS Senior Director CA Certified General Appraiser License No. AG004001 James.Pike@cushwake.com (213) 955-5186 Office Direct Michael Tidwell II, SRA, LEED GA Associate Director CA Certified General Appraiser License No. AG039542 Michael.Tidwell@cushwake.com (213) 955-5122 Office Direct VALUE CONCLUSION Appraisal Premise Real Property Interest Date of Value Value Conclusion Fair Market Value As-Is Fee Simple May 8, 2017 $5,400,000 CUSHMAN & WAKEFIELD ARCADIA SELF-STORAGE SUMMARY OF SALIENT FACTS AND CONCLUSIONS Summary of Salient Facts and Conclusions BASIC INFORMATION Property Name:Arcadia Self-Storage Address:35 W. Huntington Drive City, State:Arcadia, CA Zip Code:91007 County:Los Angeles Property Ownership Entity:Redevelopment Agency of the City of Arcadia INTEREST APPRAISED AND APPRAISAL DATES Interest Appraised:Fee Simple Date of Value:May 8, 2017 Date of Inspection:May 8, 2017 Date of Report:June 4, 2017 SITE INFORMATION Land Area Gross SF:20,534 Land Area Acres:0.47 Site Topography:Level At Street Grade Site Shape:Irregular Number of Parking Spaces:22 Parking Ratio (per 1,000 sf):0.90:1 Parking Type:Surface BUILDING INFORMATION Type of Building:Self-Storage Type of Construction:Poured in Place Concrete Number of Buildings:1 Number of Stories:4 Gross Building Area:38,127 SF Net Rentable Area:24,336 SF Number of Storage Units:284 Average Unit Size:53 SF Occupancy Rate :85.68% Actual Age:68 Year(s) Year Built:1949 Land to Building Ratio:0.84:1 MUNICIPAL INFORMATION Assessing Authority:Los Angeles County Assessor's Parcel Number(s):5775-025-901 Current Tax Year:2016/2017 Taxable Assessment:$1,189,127 Municipality Governing Zoning:City of Arcadia Current Zoning:C1.0 - Central Business District Current Use Conformance:Pre-Existing, Non-Complying Use HIGHEST & BEST USE As If Vacant: As Improved: Office use As currently improved CUSHMAN & WAKEFIELD 3 ARCADIA SELF-STORAGE SUMMARY OF SALIENT FACTS AND CONCLUSIONS VALUATION INDICES Fair Market Value As Is SALES COMPARISON APPROACH Indicated Value:$5,400,000 Per Square Foot:$217.78 INCOME CAPITALIZATION APPROACH Direct Capitalization Indicated Value:$5,400,000 Per Square Foot:$221.89 FINAL VALUE CONCLUSION Concluded Value:$5,400,000 Per Square Foot $221.89 Implied Capitalization Rate:6.22% EXPOSURE TIME Exposure Time:6 months Marketing Time:6 months CUSHMAN & WAKEFIELD 4 ARCADIA SELF-STORAGE SUMMARY OF SALIENT FACTS AND CONCLUSIONS Summary of Critical Observations SUMMARY OF CRITICAL OBSERVATIONS This strengths and weaknesses analysis provides attributes that are specific to 35 W. Huntington Drive (“subject property”), as well as our observations of the external or economic characteristics that influence the subject property. Strengths • Although the subject property’s occupancy is lower than the competitive properties, and rental rates are below market, the local self-storage market is under-supplied, providing upside for the subject property to an investor. • The primary market area is relatively stable, with a 41.64 percent renter-occupied housing within a 1-mile radius. The local area has upper-median household incomes. • The location of the property is along a heavily traveled highway (Huntington Drive) and the property is in close proximity to a major freeway (Interstate 210). • The property has good visibility along Huntington Drive with street parking. • Recent development activity in the nearby area demonstrates strong demand for the subject property (see Local Area Analysis). Weaknesses • The building is older construction (built in 1949) with some functional obsolescence due to its limited window coverage, restrictive interior layout (I.e. large concrete pillars with limited column spans) and small lot size with limited parking. • The subject property has below market rents and a higher vacancy compared to the competitive market for self-storage. • Despite its location on a heavily traveled street, the retail spaces in the building along Huntington Drive have limited exposure due to low foot traffic. • Unlike much of its direct competition within a 3-mile trade area, the facility has inferior self-storage facility amenities. Conclusions Based on the preceding strengths and weaknesses, the subject property's specific investment outlook is considered to be improving, while the general outlook for the overall local market is also improving. CUSHMAN & WAKEFIELD 5