3. TA B L E O F C O N T E N T S
E X E C U T I V E
S U M M A R Y
01
P R O P E RT Y
D E S C R I P T I O N
02
M A R K E T
C O M PA R A B L E S
03
F I N A N C I A L
S U M M A R Y
04
M A R K E T
O V E R V I E W
05
4.
5. 01 E X E C U T I V E
S U M M A R Y
I N V E S T M E N T O V E R V I E W
I N V E S T M E N T H I G H L I G H T S
PALM CHAPARRAL
6. 6
EXECUTIVE SUMMARY
PALM CHAPARRAL
Palm Chaparral Apartments is a 296 unit resort-style community located in Southern California, in the
desirable area of Palmdale. Constructed in 1987, this institutional quality asset has sixteen buildings
spread out over a sprawling lushly manicured 18.76 acres. The subject property offers potential tenants
six different floor plans with a favorable unit mix of 72 studios, 164 one bedroom/one bathroom and
60 two bedroom/two bathroom units. Palm Chaparral offers furnished and corporate apartment style
living at various rates.
The tenants at Palm Chaparral Apartments enjoy a multitude of luxury common area amenities,
including a resort-style lobby with an inviting fireplace, two sparkling pools, spa, state of the art
fitness center, business center, TV lounge, club house, two tennis courts, two on-site laundry
facilities, movie theater and ample parking. The property is well located in West Palmdale, which is
a high demand rental area with low vacancy, conveniently located near the 14 freeway, Palmdale
Regional Medical Center (less than a mile away), all major aerospace facilities (Lockheed
Martin, Northrop Grumman, etc.), as well as the popular Antelope Valley Mall. Each apartment
home includes energy efficient appliances with gas stoves, microwaves, dishwashers (select
apartments), gas fireplaces, private patios and/or balconies and spacious walk-in closets.
While the property has been very well-maintained, there is still a significant amount of
units that have not been renovated. Palm Chaparral can also be considered a value-add
proposition by implementing a renovation program to the remaining units, as well as
lowering operational expenses. This offering will appeal to any savvy high net worth private
or institutional investor looking for several hundred units in a strong Southern California
location with a value-add component and rental upside. Palm Chaparral Apartments is
one of—if not the—premier multifamily properties in all of the Antelope Valley and is well-
suited to provide investors with strong long term returns and appreciation.
I N V E S T M E N T O V E R V I E W
8. 8
ATTRACTIVE PALMDALE LOCATION
Palm Chaparral is located near the 14 Freeway, Antelope Valley Medical Center
and Antelope Valley Mall
EXECUTIVE SUMMARY
PALM CHAPARRAL
I N V E S T M E N T H I G H L I G H T S
INSTITUTIONAL-QUALITY ASSET
296 Units Across 16 Buildings on 18.76 Acres
HIGHLY DESIRABLE AMENITIES
The Property Offers Many Popular Common Area and Unit Amenities
EASY ACCESS TO MAJOR EMPLOYERS
Conveniently Located Near Major Aerospace Facilities and Other
Employment Opportunities
HIGH-DEMAND RENTAL AREA WITH LOW VACANCY RATES
Premier Antelope Valley Multifamily Property Offering A Favorable
Unit Mix of 72 Studios, 164 One Bedroom/One Bathroom and 60
Two Bedroom/Two Bathroom Units
11. 02 P R O P E RT Y
D E S C R I P T I O N
P R O P E RT Y O V E R V I E W
A M E N I T I E S
S I T E P L A N
S T R AT E G I C VA L U E - A D D
PALM CHAPARRAL
12. 12
P R O P E R T Y O V E R V I E W
Address
38441 5th Street West
Palmdale, CA 93551
APN 3004-004-033
Units 296
Buildings 16
Stories 2
Year Built 1987
Lot Size 18.76 AC
Type of Ownership Fee Simple
PROPERTY DESCRIPTION
PALM CHAPARRAL
Studio/1 Ba (24%)
72 Units
2 Br/2 Ba (21%)
60 Units
1 Br/1 Ba (55%)
164 Units
U N I T
M I X
13. 13
PALM CHAPARRAL
Palm Chaparral is located in one
of the most densely populated
areas in Palmdale. There is a
multitude of dining and shopping
within a few miles of the property.
The Palmdale Regional Medical
Center, the most expensive hospital
project in the Antelope Valley costing
over $200 million, is less than a mile
away.
Palmdale Marketplace and the Antelope
Valley Mall are less than 3 miles away
from the subject property. Both draw
residents from all over the Antelope Valley
region due to its central location and
extensive selection of retail outlets.
20. 20
EXECUTIVE SUMMARY
PALM CHAPARRAL
S T R AT E G I C VA L U E - A D D : C O M M O N A R E A
OUTDOOR CHEF’S KITCHEN
1
POOL AREA LOUNGE
2
DEDICATED DOG PARK
3
22. 22
EXECUTIVE SUMMARY
PALM CHAPARRAL
S T R AT E G I C VA L U E - A D D : I N T E R I O R S
NEW CABINET FACES
1 STAINLESS STEEL FIXTURES
2
TILE BACKSPLASH
3 QUARTZ COUNTERTOPS
4
UPDATED LIGHTING
5
There is a clear opportunity in the submarket to renovate all units to higher-end specifications inlcuding new
cabinet faces, stainless steel appliances, quartz countertops, modern lighting and fixtures. By renovating to
the standards depicted here, Palm Chaparral will be able to further augment the income stream.
28. 28
MARKET COMPARABLES
PALM CHAPARRAL
S A L E S C O M PA R A B L E S
PROPERTY UNITS
YEAR
BUILT
SALES PRICE
PRICE/
UNIT
PRICE/
SF
CAP
RATE
SALE
DATE
NOTES
PALM CHAPARRAL
38441 5th St West
Palmdale, CA 93551
296 1987 $59,500,000 $201,014 $286.63 6.17%
1
COURTYARD APARTMENTS
38675-38707 12th St E
Palmdale, CA 93550
38 1985 $5,750,000 $151,316 $137 6.02% 12/16/20
2
SUNSET RIDGE
43436 16th St W
Lancaster, CA 93534
800 1986 $132,000,000 $165,000 $187 9/1/19 Renovated in 2019
3
PALMDALE PARK
38002 15th St E
Palmdale, CA 93550
58 1970 $7,750,000 $133,620 $126 7/19/18
4
WOODLANDS WEST
2237 W Avenue J8
Lancaster, CA 93536
140 1986 $17,750,000 $126,786 $136 6.24% 1/1/18
5
GRANADA VILLAS
43230 Gadsden Ave
Lancaster, CA 93534
320 1989 $40,500,000 $126,563 $151 1/1/18
Renovated in 2007
Part of Portfolio Sale
6
CORDOVA PARK
43530 Gadsden Ave
Lancaster, CA 93534
416 1987 $50,000,000 $120,192 $138 6.24% 1/1/18 Part of Portfolio Sale
7
SIENNA HEIGHTS
43519 Kirkland Ave
Lancaster, CA 93535
314 1984 $34,750,000 $110,668 $111 6.24% 1/1/18 Part of Portfolio Sale
31. 04 F I N A N C I A L
A N A LY S I S
F I N A N C I A L O V E R V I E W
O P E R AT I N G D ATA
R E N T R O L L
PALM CHAPARRAL
32. 32
FINANCIAL ANALYSIS
PALM CHAPARRAL
F I N A N C I A L O V E R V I E W
P R I C I N G D E TA I L
LIST PRICE $59,500,000
Units 296
Price/Unit $201,014
Gross SF 207,582
Price/SF $286.63
CAP Rate—Current 6.17%
CAP Rate—Pro Forma 6.60%
GRM—Current 10.90
GRM—Pro Forma 10.38
Year Built 1987
Lot Size 18.74 AC
Type of Ownership Fee Simple
33. 33
UNIT TYPE AVG CURRENT RENT MONTHLY INCOME PRO FORMA RENT MONTHLY INCOME
55 Studio $1,324 $72,844 $1,381 $75,936
17 Studio Premier $1,378 $23,426 $1,447 $24,597
122 1 Bed/1 Bath $1,526 $186,133 $1,596 $194,750
39 1 Bed/1 Bath Premier $1,554 $60,592 $1,633 $63,677
3 1 Bed/1 Bath Premier Plus $1,680 $5,040 $1,764 $5,292
37 2 Bed/2 Bath $1,797 $66,501 $1,887 $69,826
23 2 Bed/2 Bath Premier $1,821 $41,893 $1,899 $43,683
296 $456,427 $477,760
U N I T M I X
34. 34
CAP RATE SENSITIVITY ANALYSIS
CAP RATE IMPLIED PURCHASE PRICE
6.17% $59,500,000
6.28% $58,500,000
6.39% $57,500,000
6.50% $56,500,000
FINANCIAL ANALYSIS
PALM CHAPARRAL
TA R G E T B U Y E R P O O L
INSTITUTIONAL
(i.e. Pension Fund, REIT, Private Equity)
NON-PROFIT
HIGH NET WORTH INDIVIDUAL
SYNDICATED FUND
35. 35
I N C O M E & E X P E N S E S
CURRENT PRO FORMA
PER SF PER UNIT TOTAL PER FOOT PER UNIT TOTAL
RENTAL INCOME
Gross Scheduled Rent $26.30 $18,446 $5,460,110 $27.62 $19,368.63 $5,733,115
Loss/Gain to Lease $(1.32) $(922) $(273,005)
Vacancy (5%) $(1.32) $(922) $(273,005) $(1.38) $(968.43) $(286,656)
EFFECTIVE RENTAL INCOME $25.00 $17,524 $5,187,104 $26.20 $18,400 $5,446,459
Other Income $2.20 $1,529 $452,465 $2.20 $1,529 $452,465
EFFECTIVE GROSS INCOME $27.20 $19,053 $5,639,569 $28.40 $19,929 $5,898,924
PER SF PER UNIT TOTAL PER FOOT PER UNIT TOTAL
EXPENSES
Real Estate Taxes (1.207%) $3.46 $2,427 $718,299 3.46 $2,426.69 $718,299
Utilities $0.93 $650 $192,258 0.93 $649.52 $192,258
Contract Services $0.91 $637 $188,427 0.91 $636.58 $188,427
Repairs & Maintenance $0.20 $141 $41,590 0.20 $140.51 $41,590
Turnover Expenses $0.18 $126 $37,330 0.18 $126.12 $37,330
Admin Expenses $0.32 $222 $65,727 0.32 $222.05 $65,727
Marketing $0.21 $145 $42,963 0.21 $145.15 $42,963
Payroll $2.27 $1,590 $470,628 2.27 $1,589.96 $470,628
Management Fee (3%)* $0.75 $526 $155,613 0.79 $552.01 $163,394
Insurance $0.26 $183 $54,071 0.26 $182.67 $54,071
TOTAL EXPENSES $9.48 $6,645 $1,966,907 9.51 $6,671 $1,974,687
Percent of EGI 34.88% 33.48%
NET OPERATING INCOME $3,672,662 $3,924,237
Expenses have been grouped by category.
Due diligence data room will include a detailed expense report.
* M&M substituted management fee based on industry standards
43. 05 M A R K E T
O V E R V I E W
L O C AT I O N O V E R V I E W
D E M O G R A P H I C S
PALM CHAPARRAL
44. 44
The most important industry for Palmdale has historically been the aerospace industry. However, in
recent times, other manufacturing companies have relocated to Palmdale seeking more affordable land,
proximity to Palmdale Airport, and special tax breaks.
The special tax breaks granted for companies that relocate to Palmdale is due to the city having the
Antelope Valley Enterprise Zone and the Palmdale Federal Foreign Trade Zone. These are special zoning
areas within the city that are given various state and federal tax breaks and municipal grant incentives
to relocate their business there. These zones were put in effect to help Palmdale, as well as nearby
Lancaster, draw more jobs to the area so that they would be less dependent on the Los Angeles Basin
and the San Fernando Valley area for employment. The local governments of the Antelope Valley seek to
diversify their economies and not just depend on the aerospace industry as it is known for having “feast
or famine” seasons.
Palmdale refers to itself with the nickname the “aerospace capital of the United States”, and has been
the site of research, development, final assembly, flight testing and/or servicing/modifications of many
aircraft that have been used in the United States Air Force, NASA, and air forces and airlines around the
world. USAF Plant 42, where the aforementioned aerospace projects occurred / occur, is home to major
operations of the following aerospace companies: Boeing, Lockheed Martin and its famed Skunk Works,
and Northrop Grumman. The Los Angeles World Airports owns the former Boeing hangar (formerly
North American Rockwell) at Plant 42 near the LA/Palmdale Regional Airport, which is one of the largest
buildings in the world. The hangar was used for the set of the 2004 film The Terminal, which featured an
enormous replica of a JFK International Airport terminal. NASA’s SOFIA program relocated its operation
to this hangar at Site 9 from Edwards Air Force Base.
A number of world class corporations and manufacturing firms have made Palmdale home, helping to
diversify the local economy. Delta Scientific, a world leader in high strength vehicle barrier systems,
supplying protection for many federal, state and local buildings, and a prime supplier to the military and
US State Department for embassies and other installations worldwide, and US Pole, a major manufacturer
of street lighting poles, are major anchor tenants in the Fairway Business Park. The Palmdale Trade and
Commerce Center is home to many other major manufacturing, industrial, corporate offices and other
employers, as well as home to the Palmdale Auto Mall. A number of medical and related support offices
are coming on-line to meet the needs of the new Palmdale Regional Medical Center.
MARKET OVERVIEW
PALM CHAPARRAL
L O C AT I O N O V E R V I E W
46. 46
MARKET OVERVIEW
PALM CHAPARRAL
The counties of Los Angeles and San Bernardino (which includes cities of Palmdale, Lancaster, Adelanto, Victorville,
and Apple Valley) are developing a new 63-mile freeway that would stretch through the northeastern corner of LA
County from the Mojave Desert into San Bernardino County. These counties have formed the Joint Power Authority
(JPA) along with Caltrans, SANBAG and Metro to manage the project, which is deemed the High Desert Corridor.
The High Desert Corridor has been discussed for over a decade. Not surprisingly, the main objective of the project
is to ease traffic congestion within the High Desert region of Southern California. However, it has now evolved into
a multibillion-dollar multipurpose corridor that includes both private and public funding due to the extensive nature
of the project. The most significant aspect is the proposed high-speed rail which would connect San Francisco,
Southern California (through Palmdale) and Las Vegas. It also includes electric transmission lines which would be
built below the freeway and rail, and green energy charging and alternative fuel stations for cars and trucks. The
last piece of development within the High Desert Corridor would be a 40-mile bikeway between Highway 395 and
Palmdale.
If all goes according to plan, the totality of the project is on track to be constructed within 20 years. The
interconnectedness and complexity of the High Desert Corridor will bring multiple benefits to Palmdale, including
creating an abundance of new jobs that would boost the local economy, ultimately leading to increased property
values and higher rents.
H I G H D E S E RT C O R R I D O R
48. 48
MARKET OVERVIEW
PALM CHAPARRAL
NEARBY EMPLOYMENT OPPORTUNITIES
NAME OF EMPLOYER INDUSTRY LOCATION
Northrop Grumman Aerospace/Aviation Palmdale
Boeing Aerospace/Aviation Palmdale
Virgin Galactic Aerospace/Aviation Lancaster
Lockheed Martin Aerospace/Aviation Palmdale
Edwards Air Force Base Aerospace/Aviation Kern County
NASA Armstrong Flight Research Center Aerospace/Aviation Palmdale
Southern California Edison Energy Palmdale
Waste Management Energy Palmdale
Rio Tinto Minerals Manufacturing/Mining Kern County
BYD Manufacturing/Mining Lancaster
Sygma Manufacturing/Mining Lancaster
County of Los Angeles Government Palmdale
Kaiser Permanente Healthcare Palmdale
Antelope Valley Medical Center Healthcare Lancaster
Palmdale Regional Medical Center Healthcare Palmdale
EMPLOYMENT
INDUSTRY IN
PALMDALE
The Antelope Valley is home to
a diverse group of industries
due to its strategic location
in Southern California. From
the mountains to valleys to
everything in between, high
profile employers choose
Palmdale because it’s a
desirable market offering a
little bit of everything.
The most important industry
for Palmdale is the aerospace
industry. However, in recent
times, other manufacturing
companies have relocated
to Palmdale seeking more
affordable land and proximity
to Palmdale Airport.
50. 50
MARKET OVERVIEW
PALM CHAPARRAL
In the Antelope Valley on the western side of
the Mojave Desert, Palmdale is a small city
surrounded by a vast arid landscape that
evokes the golden age of western movies.
One of the city’s claims to fame is its US
Air Force testing center, where aircraft like
the legendary Lockheed Blackbird took
their first flights. For day trip inspiration set
off into the Antelope Valley for stark and
beautiful desert scenery, or ascend the San
Gabriel Mountains, which receive plenty
of snowfall in winter. The subject property
enables residents to access many famous
Los Angeles attractions in less than an hour.
D I V E R S E AT T R A C T I O N S
51. 51
POPULAR
ATTRACTIONS
• Antelope Valley Medical Center
.299 miles
• Palmdale Marketplace
1.09 miles
• Antelope Valley Country Club
1.83 miles
• Antelope Valley Mall
1.95 miles
• Walmart Supercenter
2.14 miles
• Palmdale Airport
4.60 miles
• Antelope Valley College
7.18 miles
52. 52
MARKET OVERVIEW
PALM CHAPARRAL
D E M O G R A P H I C S
121,772
TOTAL POPULATION WITHIN 5-MILE RADIUS
49.05%
MALE
50.95%
FEMALE
$61,747
AVERAGE HOUSEHOLD INCOME WITHIN
5-MILE RADIUS
$397,710
AVERAGE HOME VALUE
35,651
TOTAL HOUSEHOLDS IN 5-MILE RADIUS
27.16% FROM 2000
53. 53
POPULATION 1 MILE 3 MILES 5 MILES
2000 Population
Total Population
7,533 51,079 93,587
2010 Population
Total Population
8,851 62,535 117,951
2020 Estimate
Total Population
9,039 65,226 121,772
2025 Projection
Total Population
9,156 67,195 124,706
Daytime Population
2020 Estimate
7,628 56,190 96,385
HOUSEHOLDS BY INCOME 1 MILE 3 MILES 5 MILES
2020 Estimate
Under $14,999 9.8% 13.6% 11.8%
$15,000 - $24,999 8.6% 10.4% 8.9%
$25,000 - $34,999 8.3% 9.8% 9.5%
$35,000 - $49,999 12.7% 12.9% 12.4%
$50,000 - $74,999 18.5% 15.3% 16.5%
$75,000 - $99,999 16.7% 15.4% 16.1%
$100,000 - $124,999 9.5% 8.1% 8.3%
$125,000 - $149,999 5.6% 5.7% 6.5%
$150,000 - $199,999 6.4% 5.4% 6.1%
$200,000 - $249,999 1.4% 1.2% 1.5%
$250,000 + 2.4% 2.0% 2.4%
Median Household Income $63,945 $55,398 $61,747
Per Capita Income $25,268 $22,195 $23,488
Average Household Income $81,856 $74,288 $80,151
HOUSEHOLDS 1 MILE 3 MILES 5 MILES
2000 Households
Total Population
2,294 15,535 28,037
2010 Households
Total Population
2,700 18,388 34,047
2020 Estimate
Total Population
2,780 19,464 35,651
2025 Projection
Total Population
2,823 20,081 36,588
HOUSING UNITS 1 MILE 3 MILES 5 MILES
Occupied Units
2020 Estimate
Owner Occupied 52.9% 53.5% 60.4%
Renter Occupied 47.1% 46.5% 39.6%
Vacant 7.9% 9.1% 8.0%
54. PALM CHAPARRAL
RESORT-STYLE LIVING IN PALMDALE, CA
JEFF BENSON
Senior Vice President Investments
Director, National Multi Housing Group
Direct | 310.909.5420
jeff.benson@marcusmillichap.com
License: CA 01327285
SAM NEUMARK
Investment Sales Associate
Direct | 310.909.5433
samuel.neumark@marcusmillichap.com
License: CA 02090800
