Marcus & Millichap is pleased to present this rare offering of 35 total units between three contiguous properties all with separate APNs (12-unit, 12-unit, and 11-unit), located at 328, 336, and 342 East Providencia Avenue in Burbank, CA.

These properties have never been sold with the sellers being the original developers back in 1988. The sellers would prefer to sell these as a portfolio, making their 1031 exchange process a bit simpler, however they will consider offers on the buildings separately provided the offer price and terms make sense for them. Please reach out to us to learn more if you’re interested in buying these separately.

All three of these buildings were built in 1988, and they sit on a combined 0.60 acres of land with 26,100 total building square feet,. They offer a strong unit mix of (8) studios, (18) 1 bed / 1 bath units, (4) 2 bed / 2 bath units, (4) 3 bed / 2 bath units, and (1) 3 bed / 2.5 bath unit.

Huge Value Add Potential

First, there is an estimated 12% upside in currently in-place rents, and with a maximum rent increase of 10% per year, it should not take the buyer long to capture all of that upside.

On top of that, a savvy investor can add 6 total ADUs to the property. The best way to do this would be to convert the tuck under parking at 336 and 342 E Providencia to 3 ADUs at each property (there is no easy way to add an ADU to 328 Providencia). After adding 3 ADUs to both these 12-unit properties, the buyer would have two 15-unit properties which would still be under the legal limit of 16 units when you’re required to have an on-site manager. That means you could have 41 total units (15-unit, 15-unit, and 11-unit) in Burbank without the need for an expensive on-site manager. That is a very rare and profitable opportunity.

Attractive Assumable Financing

The buyer of this property will be able to assume the Seller’s loan from Chase Bank. This loan has an outstanding loan balance of about $6,680,000, and it comes with a very attractive 4.10% interest rate (principal and interest payments). This interest rate is fixed until January 2027, about 3.5 more years, which is plenty long enough to outlast the likely recession around the corner. With the loan’s interest rate being well below the current CAP rate of 4.95%, this is a very rare opportunity for a buyer to obtain positive leverage while weathering any market storm ahead.

Benefits of the City of Burbank

The city of Burbank has its own governing body which is separate from and much more landlord-friendly than the City of Los Angeles. Burbank does not have any of their own local rent control laws, making this property only subject to California’s AB-1482 which sets a maximum rent increase of 10% per year. Also, the city of Burbank is NOT subject to the new ULA transfer tax which only applies to properties in the city of Los Angeles.