TAB A
Real Estate

Appraisal Report

Prepared For: 

Mr. Stelios Makrides

Santa Monica Airport – Manager

3223 Donald Douglas Loop South

Santa Monica, CA 90405

2800 Airport Avenue
945 Fourth Avenue, Suite 310 | San Diego, California 92101 | www.thedoregroup.com

September 16, 2016

Mr. Stelios Makrides

Santa Monica Airport – Manager

3223 Donald Douglas Loop South

Santa Monica, CA 90405

Re: Real Estate Appraisal Report

2800 Airport Avenue

Santa Monica, CA 90405

File Name: TDG 2016 058

Dear Mr. Makrides:

Pursuant to your request, we performed an appraisal of the above referenced property as more 

particularly described in an appraisal report to follow. More specifically, the subject property 

(“2800 Airport Avenue”) consists of a main building with 21,285 square feet (including 8,094 

square feet of basement area) and a separate 3,801 square foot structure. The subject has both 

legal and physical access via Airport Avenue. It is currently utilized as a satellite campus of Santa 

Monica College. The subject structures are situated on Santa Monica Airport property on a 

94,380 square foot (2.17+ acres) site comprised of portions of Assessor’s Parcels 4272-025-901 

and 4272-026-902. The site is defined per lease agreement, and is not a separate or legal parcel 

and is not currently zoned.

This report was prepared for Santa Monica Airport and is intended only for the client’s specified 

use. The intended use of this appraisal is to assist the client in due diligence and consultation. As 

per the scope of work for this assignment, we have prepared fair market values and rental rates 

as of the effective date of this analysis (current), as well as retrospective values and rental rates 

for years 2010, 2011, 2012, 2013, 2014 and 2015.
945 Fourth Avenue, Suite 310 | San Diego, California 92101 | www.thedoregroup.com

Mr. Makrides

Santa Monica Airport – Manager

September 16, 2016

Page 2

Please reference page 166 of this report for important information regarding the scope of 

research and analysis for this appraisal, including property identification, inspection, highest and 

best use analysis and valuation methodology.

This appraisal was prepared in conformance with the Uniform Standards of Professional 

Appraisal Practice (U.S.P.A.P.), Federal Aviation Administration (FAA) appraisal criteria and 

guidelines, and the Code of Professional Ethics and Standards of Professional Conduct of the 

Appraisal Institute. 

Your attention is directed to the Hypothetical Conditions, Extraordinary Assumptions, and 

General Conditions and Assumptions sections of this report (beginning on page 11). Acceptance 

of this report constitutes an agreement with these conditions and assumptions. In particular, we

note the following: 

Hypothetical Conditions:

 We are aware that the 94,380 square feet of land underlying the subject buildings and 

allocated per lease agreement in support of its use as an educational facility is not a 

separate or legal individual parcel. However, this analysis is based on a hypothetical 

condition that the 94,380 square feet of land area defined in the Master Lease Agreement is 

a distinct improved parcel with fee simple rights of ownership and transfer.

Extraordinary Assumptions:

 There are no Extraordinary Assumptions for this appraisal.

Based on the appraisal described in the accompanying report, subject to the Hypothetical 

Conditions, Extraordinary Assumptions, and General Conditions & Assumptions, we have made 

the following value conclusion(s):

Current and Retrospective Fair Market Values

The Current Market Value as of September 12, 2016, and Retrospective Market Values as of 

2010, 2011, 2012, 2013, 2014 and 2015 of the Leased Fee estate of the property are:
945 Fourth Avenue, Suite 310 | San Diego, California 92101 | www.thedoregroup.com

Mr. Makrides

Santa Monica Airport – Manager

September 16, 2016

Page 3

The market exposure time1preceding September 12, 2016 would have been 4 months and the 

estimated marketing period2as of September 12, 2016 is 4 months.

Current and Retrospective Market Rental Rates

The Current Market Rent as of September 12, 2016, and Retrospective Market Rent as of 2010, 

2011, 2012, 2013, 2014 and 2015 of the property are:

 

1

Exposure Time: see definition in the Addenda.

2 Marketing Time: see definition in the Addenda.

Value Scenario Date of Value Interest Value

Current Market Value September 12, 2016 Leased Fee $9,000,000

Retrospective Market Value 2015 Leased Fee $7,815,000

Retrospective Market Value 2014 Leased Fee $7,243,000

Retrospective Market Value 2013 Leased Fee $6,783,000

Retrospective Market Value 2012 Leased Fee $5,780,000

Retrospective Market Value 2011 Leased Fee $4,903,000

Retrospective Market Value 2010 Leased Fee $4,965,000

Five Million Seven Hundred Eighty Thousand Dollars

Four Million Nine Hundred Three Thousand Dollars

Four Million Nine Hundred Sixty Five Thousand Dollars

Value Indications

Nine Million Dollars

Seven Million Eight Hundred Fifteen Thousand Dollars

Seven Million Two Hundred Forty Three Thousand Dollars

Six Million Seven Hundred Eighty Three Thousand Dollars

Year Above Grade Rent/SF Basement Rent/SF Blended Overall Rate

2010 $18.00 $9.00 $15.10

2011 $17.00 $8.50 $14.26

2012 $19.50 $9.75 $16.35

2013 $22.00 $11.00 $18.45

2014 $22.75 $11.38 $19.08

2015 $23.50 $11.75 $19.71

2016 $27.00 $13.50 $22.64

Annual Market Rent Summary - 2010 to 2016
945 Fourth Avenue, Suite 310 | San Diego, California 92101 | www.thedoregroup.com

Mr. Makrides

Santa Monica Airport – Manager

September 16, 2016

Page 4

We certify that we have no present or contemplated future interest in the property beyond this 

estimate of value. We have completed reviews of previous appraisals for the client which have 

included the subject property as a component of their analyses, however we have not 

previously provided a separate value for the subject property within the three year period 

preceding acceptance of this assignment. 

Thank you for the opportunity of submitting this appraisal. If we can be of further service, please 

do not hesitate to call.

Respectfully submitted,

The Doré Group

Lance Doré, MAI, FRICS

President / CEO

AG 002464

lwdore@thedoregroup.com
945 Fourth Avenue, Suite 310 | San Diego, California 92101 | www.thedoregroup.com

TABLE OF CONTENTS

Summary of Salient Facts & Conclusions ........................................................................................ 7

Definitions of Fair Market Value ................................................................................................. 9

Hypothetical Conditions and Extraordinary Assumptions............................................................ 11

General Conditions And Assumptions........................................................................................... 12

Scope of Work ............................................................................................................................... 16

Neighborhood Map................................................................................................................... 19

Regional Description – Los Angeles County .................................................................................. 20

City Description – Santa Monica ................................................................................................... 28

Market Overview CoStar’s Office Report – Los Angeles: 2nd Quarter 2016 .................................. 33

Subject Submarket – Santa Monica .......................................................................................... 40

Property Description ..................................................................................................................... 44

Lease Summary ......................................................................................................................... 46

Zoning............................................................................................................................................ 51

Assessment and Taxes................................................................................................................... 54

Improvements Description............................................................................................................ 55

Subject Photographs................................................................................................................. 57

Highest and Best Use..................................................................................................................... 64

Valuation Methodology................................................................................................................. 68

Income Approach .......................................................................................................................... 69

Current Lease Comparable Summary Table ............................................................................. 70

Current Lease Comparable Map ............................................................................................... 71

Current Lease Comparable Photographs.................................................................................. 72

Current Market Rent Reconciliation ......................................................................................... 74

Retrospective Lease Comparable Summary Table.................................................................... 75

Retrospective Lease Comparable Map ..................................................................................... 76

Retrospective Lease Comparable Photographs........................................................................ 77

Retrospective Market Rent Reconciliation ............................................................................... 79

Potential Gross Income............................................................................................................. 80

Current Capitalization Rates Summary ..................................................................................... 82

Retrospective Capitalization Rates Summary ........................................................................... 83

Capitalization to Value .............................................................................................................. 84

Direct Capitalization Analysis Conclusion ................................................................................. 85

Per Year Valuation Analysis....................................................................................................... 85

Per Year Market Rent Analysis.................................................................................................. 87

Final Reconciliation........................................................................................................................ 88

Certification Statement................................................................................................................. 90

Addenda ........................................................................................................................................ 92

Definitions................................................................................................................................. 93
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SUMMARY OF SALIENT FACTS & CONCLUSIONS

GENERAL

SUBJECT: 2800 Airport Avenue

2800 Airport Avenue, Santa Monica, 

Los Angeles County, California 90405

OWNER: City of Santa Monica

LEGAL DESCRIPTION: Lengthy – Retained in File

ASSESSOR PARCEL NUMBER: Portions of APNs 4272-025-901 and 4272-026-902

*NOTE: The subject buildings are located on portions of city 

owned airport property; there is no specific or legal parcel 

associated with the subject buildings separate from the 

larger airport parcels which support a variety of aviation 

and non-aviation uses. The site analyzed in association with 

the subject buildings for purposes of this analysis is defined 

per lease agreement, and is 94,380 square feet in size, 

however this site does not have its own APN.

DATE OF VALUE: September 12, 2016

DATE OF REPORT: September 16, 2016

DATE OF INSPECTION: September 12, 2016

INTENDED USE: The intended use of this appraisal is to assist the client in 

due diligence and consultation.

INTENDED USER(S): Santa Monica Airport

HIGHEST AND BEST USE

 SITE:

 AS IMPROVED:

Indeterminable (See Highest and Best Use Analysis)

Continued use “as is”; educational facility
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HYPOTHETICAL CONDITIONS: We are aware that the 94,380 square feet of land 

underlying the subject buildings and allocated per lease 

agreement in support of its use as an educational facility is 

not a separate or legal individual parcel. However, this 

analysis is based on a hypothetical condition that the 

94,380 square feet of land area defined in the Master Lease 

Agreement is a distinct improved parcel with fee simple 

rights of ownership and transfer.

EXTRAORDINARY 

ASSUMPTIONS:

There are no Extraordinary Assumptions for this appraisal.

SALE HISTORY: The subject has not sold in the last three years, according to 

public records.

CURRENT LISTING /

CONTRACT(S):

To the best of our knowledge, the subject is not currently 

listed for sale, or under contract for sale. 

PROPERTY

LAND AREA: Total: 2.17+ acres; 94,380 square feet

*NOTE: Land area is based on lease documents provided by 

the client which specify portions of the airport parcels

allocated to support lessees’ use of the subject buildings as 

an educational facility.

ACCESS / EXPOSURE: Frontage along Airport Avenue/ Exposure is deemed average

for the area

UTILITIES: All public utilities are readily available

ZONING None – The parcels upon which the subject buildings are 

located are City owned, operated as an airport and not 

currently zoned.

IMPROVEMENTS:

Year Built: 1955±

Renovations: Unknown

Condition: Average

Number of Stories: 1.00
TDG 2015 022 9

Gross Building Area (GBA): Main Building – 21,285 square feet (includes 8,094 square 

feet of basement area)

Garage Building – 3,801 square feet

Property Totals: GBA*

25,086 square feet

*See area definitions in the Addenda.

VALUE INDICATIONS

RECONCILED VALUE(S): Current Retro Retro Retro Retro Retro Retro

Value Conclusion(s) $9,000,000 $7,815,000 $7,243,000 $6,783,000 $5,780,000 $4,903,000 $4,965,000

Effective Date(s) 9/12/2016 2015 2014 2013 2012 2011 2010

Property Rights Leased Fee Leased Fee Leased Fee Leased Fee Leased Fee Leased Fee Leased Fee

DEFINITIONS OF FAIR MARKET VALUE

“The price at which the property would change hands between a willing buyer and a willing 

seller, neither being under any compulsion to buy or to sell and both having reasonable 

knowledge of relevant facts. The fair market value of a particular item of property includible in 

the decedent’s gross estate is not to be determined by a forced sale price. Nor is the fair market 

value of an item of property to be determined by the sale price of the item in a market other 

than that in which such item is most commonly sold to the public, taking into account the 

location of the item wherever appropriate. (IRS Regulation §20.2031-1.)”3

Property Rights Appraised: The property right of ownership appraised was the leased fee

interest. The leased fee interest can be defined as follows:

“A freehold (ownership interest) where the possessory interest has been granted to 

another party by creation of a contractual landlord-tenant relationship (i.e., a lease).”4

A lease can be defined as follows:

“A contract in which the rights to use and occupy land or structures are transferred by the 

owner to another for a specified period of time in return for a specified rent.”

5

 

3

Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th Edition (AI, Chicago: 2010), p75

4

Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th Edition (AI, Chicago: 2010). p111

5

Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th Edition (AI, Chicago: 2010). p111
TDG 2015 022 10

Current Market Value: The estimate of the market value of the real property in its current 

physical condition, use and zoning as of the appraisal date. 3

Please refer to the Definitions section in the Addenda for additional definitions.
TDG 2015 022 11

HYPOTHETICAL CONDITIONS 

AND EXTRAORDINARY ASSUMPTIONS

Acceptance of and/or use of this report constitutes acceptance of the indicated Hypothetical

Conditions and Extraordinary Assumptions; these can only be modified in a written document(s) 

executed by both parties.

HYPOTHETICAL CONDITIONS

A hypothetical condition is defined as “a condition, directly related to a specific assignment, 

which is contrary to what is known by the appraiser to exist on the effective date of the 

assignment results, but is used for the purposes of analysis.”6

The following hypothetical conditions apply to this specific appraisal assignment:

 We are aware that the 94,380 square feet of land underlying the subject buildings and 

allocated per lease agreement in support of its use as an educational facility is not a 

separate or legal individual parcel. However, this analysis is based on a hypothetical 

condition that the 94,380 square feet of land area defined in the Master Lease Agreement is 

a distinct improved parcel with fee simple rights of ownership and transfer.

EXTRAORDINARY ASSUMPTIONS

An extraordinary assumption is defined as “an assumption, directly related to a specific 

assignment, as of the effective date of the assignment results, which, if found to be false, could 

alter the appraiser’s opinions or conclusions.”7

The following Extraordinary Assumptions apply to this specific appraisal assignment:

 There are no Extraordinary Assumptions for this appraisal.

 

6

Uniform Standards of Professional Appraisal Practice, 2014-15 edition.

7

Ibid.
TDG 2015 022 12

GENERAL CONDITIONS AND ASSUMPTIONS

The appraisal has been completed subject to the following General Conditions and Assumptions:

 This appraisal was completed per the requirements of the Uniform Standards of 

Professional Appraisal Practice (USPAP) and those additional requirements expected of 

a member of the Appraisal Institute. The development process used was a complete 

analysis that is documented in this self-contained appraisal report.

 By use of this appraisal report, each party that uses this report agrees to be bound by all 

of the Hypothetical Conditions and Extraordinary Assumptions stated herein. The 

opinions are only as of the date stated in the appraisal report. Changes since that date 

in external and market factors, or in the subject property itself, can significantly affect 

the conclusions presented in the appraisal report.

 This appraisal is to be used only for the purpose stated herein. While distribution of this 

appraisal in its entirety is at the discretion of the client, individual sections shall not be 

distributed as this report is intended to be used in whole and not in part.

 All files, work papers and documents developed in connection with this assignment are 

the property of The Doré Group. No part of this appraisal, its value estimates, or the 

identity of the firm or the appraiser(s) may be communicated to the public through 

advertising, public relations, media sales, or other media without The Doré Group's prior 

written consent. If the appraisal report is referred to or included in any offering material 

or prospectus, the report shall be deemed referred to or included for informational 

purposes only and The Doré Group, its employees, and the appraiser(s) have no liability 

to such recipients. The Doré Group disclaims any and all liability to any party other than 

the party that retained The Doré Group to prepare the appraisal report.

 The information contained in this appraisal report, or upon which the report is based,

has been gathered from sources the appraiser(s) assumes to be reliable and accurate. 

The owner of the subject property may have provided some of such information. 

Neither the appraiser(s), nor The Doré Group, shall be responsible for the accuracy or 

completeness of such information, including the correctness of estimates, opinions, 

dimensions, sketches, exhibits, and factual matters. Any authorized user of the appraisal 

report is obligated to bring to the attention of The Doré Group any inaccuracies or 

errors that it believes are contained in the report. Any plans provided are intended to 

assist the client in visualizing the property; no other use of these plans is intended or 

permitted. Appraisals are based on the data available at the time the assignment is 

completed. Amendments/modifications to appraisals based on new information made 

available after the appraisal was completed will be made, as soon as reasonably 

possible, for an additional fee. 

 No part of the appraisal report shall be used in conjunction with any other analyses. 

Reference to the Appraisal Institute or to the MAI designation is prohibited. Except as 

may be otherwise stated in the letter of engagement, the appraisal report may not be 

used by any person(s) other than the party(ies) to whom it is addressed or for purposes 
TDG 2015 022 13

other than that for which it was prepared. Any authorized user(s) of this appraisal report 

who provides a copy to, or permits reliance thereon by, any person or entity not 

authorized by The Doré Group in writing to use or rely thereon, hereby agrees to 

indemnify and hold The Doré Group, its affiliates and their respective shareholders, 

directors, officers and employees, harmless from and against all damages, expenses, 

claims and costs, including attorneys' fees, incurred in investigating and defending any 

claim arising from or in any way connected to the use of, or reliance upon, the appraisal 

report by any such unauthorized person(s) or entity(ies).

 If the appraisal report is submitted to a lender or investor with the prior approval of The

Doré Group, such party should consider this report as only one factor, together with its 

independent investment considerations and underwriting criteria, in its overall 

investment decision. Such lender or investor is specifically cautioned to understand all 

Hypothetical Conditions and Extraordinary Assumptions incorporated in this appraisal 

report.

 The appraiser(s) may not divulge the material (evaluation) contents of the report, 

analytical findings, or conclusions, or give a copy of the report to anyone other than the 

client, legal authorities via subpoena, or the Appraisal Institute. 

 The appraisal report is based on the assumption of: (a) responsible ownership and 

competent management of the subject property; (b) no hidden or unapparent 

conditions of the subject property, subsoil or structures that render the property more 

or less valuable (no responsibility is assumed for such conditions or for arranging for 

engineering studies that may be required to discover them); (c) full compliance with all 

applicable federal, state and local zoning and environmental regulations and laws, 

unless noncompliance is stated, defined and considered in the Report; and (d) all 

required licenses, certificates of occupancy and other governmental consents have been 

or can be obtained and renewed for any use on which the value opinion contained in 

the appraisal report is based.

 The physical condition of the improvements considered by the appraiser(s) is based on 

visual inspection by the appraiser(s). The Doré Group assumes no responsibility for the 

soundness of structural components or for the condition of mechanical equipment, 

plumbing or electrical components.

 The presence of hazardous substances may affect the value of the subject property. No 

hidden or unapparent conditions of the subject property, subsoil or structure, including 

without limitation, asbestos, formaldehyde foam insulation, polychlorinated biphenyl, 

petroleum leakage, or agricultural chemicals, which would make the property more or 

less valuable, were discovered by or made known to the appraiser(s). The appraiser(s) is 

not qualified to test for such substances and no responsibility is assumed for such 

conditions or engineering necessary to discover them. Unless otherwise stated, the

appraiser(s) assumed there was no existence of hazardous materials or conditions, in 

any form, on or near the subject property.
TDG 2015 022 14

 No opinion is intended to be expressed and no responsibility is assumed for the legal 

description or for any matters that are legal in nature or require legal expertise or 

specialized knowledge beyond that of a real estate appraiser. Title to the subject 

property was presumed to be good and merchantable and the property was appraised 

assuming there were no adverse easements, encroachments, liens, encumbrances, 

special assessments, or other restrictions.

 The appraised value was based on the assumption that there were no tax liens affecting 

the subject property. Unless otherwise noted, the subject property was found to be 

current in the payment of real estate taxes as of the date of value according to the San 

Diego County treasurer-tax collector. It was assumed that any special assessments 

affecting the subject property are typical and appropriate for the area and do not have 

an impact on the value conclusion in this report and that any outstanding bonds have 

been paid.

 Unless stated herein, the subject property is assumed to be outside of areas where 

flood hazard insurance is mandatory. Maps used by public and private agencies to 

determine these areas are limited with respect to accuracy. Due diligence has been 

exercised in interpreting these maps, but no responsibility is assumed for 

misinterpretation.

 No opinion is expressed with regard to potential seismic impact and it was assumed that 

the subject’s potential risks are similar to those shared by most properties throughout 

the region. The Doré Group makes no warranty as to the seismic stability of the subject 

land. The assumption was made that any future development of the property, if any, 

would occur in accordance with all appropriate regulations and ordinances regarding 

grading, fill, and applicable building codes.

 Except as may be otherwise stated in the letter of engagement, the appraiser(s) shall 

not be required to give testimony in any court or administrative proceeding relating to 

the subject property or the appraisal. If the appraiser(s) is subpoenaed pursuant to a 

court order, the client agrees to pay The Doré Group’s regular per diem rate plus 

expenses.

 In the event of a claim against The Doré Group, its affiliates, their respective officers or 

employees, or the appraiser(s) in connection with or in any way relating to this appraisal 

report or this engagement, the maximum damages recoverable shall be the amount of 

the monies actually collected by The Doré Group or its affiliates for this appraisal report 

and under no circumstances shall any claim for consequential damages be made.

 Necessary licenses, permits, consents, legislative or administrative authority from any 

local, state, or federal government, or private entity, are assumed to be in place or 

reasonably obtainable.

 A civil rights act passed by Congress, known as Americans with Disabilities Act (ADA) of 

1990, guarantees individuals with disabilities equal opportunity in public 

accommodations, employment, transportation, government services, and 
TDG 2015 022 15

telecommunications. Statutory deadlines became effective on various dates between 

1990 and 1997. The Doré Group has not made a determination regarding the subject’s 

ADA compliance or non-compliance. Non-compliance could have a negative impact on 

value, however this has not been considered or analyzed in this appraisal.
TDG 2015 022 16

SCOPE OF WORK

According to the Uniform Standards of Professional Appraisal Practice, it is the appraiser’s 

responsibility to develop and report a scope of work that results in credible results that are 

appropriate for the appraisal problem and intended user(s). Therefore, the appraiser must 

identify and consider:

 ● the client and intended users;

 ● the intended use of the report; 

 ● the type and definition of value; 

 ● the effective date of value;

 ● assignment conditions;

 ● typical client expectations; and 

 ● typical appraisal work by peers for similar assignments.

In preparing this report, we investigated numerous land and improved sales and listings, as well 

as market rent comparables, from the area, and confirmed all data with buyers, sellers, brokers, 

property developers, leasing agents, and public officials when possible. We collected, 

confirmed, and reported data that were applicable in the valuation process. Data collection 

involved the use of various sources including the Multiple Listing Service, RealQuest, Dataquick, 

Inc. (data collection services), Los Angeles County deed records, and in-house materials. The 

data collected and confirmed have been reported to an extent sufficient for the particular 

appraisal problem involved. 

This appraisal is prepared for Mr. Stelios Makrides, Manager of the Santa Monica Airport. The 

problem to be solved is to estimate the current fair market value and market rent for the 

subject as of the valuation date of September 12, 2016, as well as retrospective market values

and rents for years 2015, 2014, 2013, 2012, 2011 and 2010. The intended use is to assist the 

client in due diligence and consultation. This appraisal is intended for the use of the Santa 

Monica Airport.

SCOPE OF WORK

REPORT TYPE: This is an appraisal report as defined by Uniform Standards 

of Professional Appraisal Practice. This format provides a 

summary of the appraisal process, subject and market data 

and valuation analyses.

PROPERTY IDENTIFICATION: The subject has been identified by the legal description, 

assessors' parcel numbers and documents supplied by the 

client.
TDG 2015 022 17

INSPECTION: A complete interior and exterior observation of the subject 

property has been made, and photographs taken. The 

property was last inspected on September 12, 2016, with 

photographs taken on this same day. Observations of the 

interior and exterior portions of the subject property were 

made.

MARKET AREA AND ANALYSIS OF 

MARKET CONDITIONS:

A complete analysis of market conditions has been made. 

The appraiser maintains and has access to comprehensive 

databases for this market area and has reviewed the 

market for sales and listings relevant to this analysis.

HIGHEST AND BEST USE

ANALYSIS:

A complete as vacant and as improved highest and best 

use analysis for the subject has been made. Physically 

possible, legally permissible and financially feasible uses 

were considered, and the maximally productive use was 

concluded.

VALUATION ANALYSES:

Cost Approach: A cost approach was not applied as the actual age of the 

subject's improvements makes physical depreciation 

difficult to accurately measure, and there are no legal 

parcels specifically and separately associated with the 

subject improvements. 

Sales Comparison Approach: A sales approach was not applied as there was not 

sufficient data to develop a value estimate due to the 

unique nature of the subject's location on Airport land, 

close proximity to frequent flight operations, as well as the 

additional FAA regulations which govern use of and any 

improvements or alterations to the subject buildings. 

Income Approach: An income approach applied as the subject is an income 

producing property, and there is adequate data to develop 

a value estimate with this approach.
TDG 2015 022 18

DOCUMENTATION: The Doré Group was provided with the document(s) listed 

below. Unless noted, the document(s) did not indicate any 

unusual or detrimental conditions that have an impact on 

value. These documents were assumed to be accurate and 

were relied upon in the valuation of the subject property. 

 1998 Plot Plan

 2010 – 2016 Rent Rolls

 1998 Rental Analysis

 2008 Lease Term Sheet

 Master Lease Agreement (#5201)

No responsibility is assumed for any missing pertinent data 

contained within these documents and the reconciled 

value does not reflect knowledge of their content.
TDG 2015 022 19

NEIGHBORHOOD MAP
TDG 2015 022 20

REGIONAL DESCRIPTION – LOS ANGELES COUNTY

One of California’s oldest counties, Los Angeles County 

is situated in the southwest corner of the state and is 

bordered by Kern County (north), 70 miles of the 

Pacific Ocean coastline and Orange County (south), 

Ventura County (west), and San Bernardino County 

(east). With a land area of 4,752 square miles, it is 

home to 88 incorporated cities and is the most 

populous county in the U.S. Most of the population 

resides in the southern and southwestern portions of 

the county, with major population centers also located in the Los Angeles Basin, San Fernando 

Valley, and San Gabriel Valley and secondary centers in the Santa Clarita Valley, Crescenta 

Valley, and Antelope Valley. The county is divided into the following major areas: 

 EAST: Eastside, San Gabriel Valley, Pomona Valley

 WEST: Westside, Beach Cities 

 SOUTH: South Bay, Palos Verdes Peninsula, South Los Angeles, Gateway Cities, Los Angeles 

Harbor Region 

 NORTH: San Fernando Valley, portions of the Conejo Valley and Antelope Valley, Santa Clarita 

Valley

 CENTRAL: Downtown Los Angeles, Mid-Wilshire

TRANSPORTATION

An extensive and well-developed freeway system provides access to, from and throughout Los 

Angeles County. Primary freeways include Interstates 5, 105, 405, 605, 10, 110, 210, and 710. 

There are also numerous state highways and a vast urban and suburban street network. All 

thoroughfares are impacted by moderate to severe traffic congestion during commute hours 

and freeway-to-freeway interchanges regularly rank in the top ten most congested in the nation. 

Bus service is provided by Los Angeles Metro and numerous municipal operators. Los Angeles 

International Airport, one of the busiest airports in the world, is the primary commercial airport 

serving the region. Additional airports include Long Beach Municipal Airport (Long Beach), Bob 

Hope Airport (Burbank), and LA/ Palmdale Regional Airport (Palmdale), as well as numerous 

smaller scale commercial and non-commercial facilities. 

Los Angeles is a major freight railroad transportation hub due to large volumes of freight 

arriving/departing out of the county's port facilities and industrial hubs; Union Pacific and 

Burlington Northern Santa Fe provide freight rail service. Amtrak, Los Angeles Metro Rail, and 

Metrolink provide commuter and long-distance passenger rail service; Amtrak also runs several 

intercity passenger rail lines from Los Angeles’ Union Station, including the Pacific Surfliner, the 

Coast Starlight, the Southwest Chief, and the Sunset Limited. California High-Speed Rail is a high 
TDG 2015 022 21

speed rail system currently under construction. The proposed line will connect Los Angeles with 

San Francisco by 2029, with future extensions to San Diego and Sacramento. Due to the 

project's nearly $70 billion cost and large scope, it is surrounded by much controversy and will 

likely face significant delays. 

The county has two main seaports – the Ports of Los Angeles and Long Beach – which handle 

over a quarter of all container traffic entering the U.S., making the complex the largest and most 

important port in the country and the third-largest port in the world in shipping volume. The 

Port of Los Angeles is also the largest cruise ship center on the West Coast, handling in excess of 

a million passengers annually. 

SERVICES

Los Angeles County offers a complete array of services to residents and visitors. The Los Angeles 

Department of Water & Power and Southern California Gas Company provide the majority of 

residents with water, gas and electricity. Law enforcement and fire protection are provided by 

the Los Angeles County Sheriff and Fire Departments, as well as individual city police and fire 

departments. There are approximately 78 public school districts overseen by the Los Angeles 

County Office of Education. The county is home to three world-class research institutions and 

118 public and private colleges and universities – including several California State Universities 

(Long Beach, Northridge, and Los Angeles) and University of Southern California. 

RECREATION | TOURISM 

Los Angeles is one of the nation’s top tourist destinations due to its wide variety of recreational 

attractions, including numerous beaches, major amusement parks, golf courses, and a multitude 

of historical, cultural and sporting venues and events. Primary attractions include Venice and 

Malibu Beaches, Six Flags (Hurricane Harbor and Magic Mountain), Universal Studios, Raging 

Waters, Hollywood and Beverly Hills, the Queen Mary, and the Los Angeles Zoo. The Los Angeles 

Convention Center has 720,000 square feet of exhibition space and 147,000 square feet of 

meeting space and hosts several major annual conventions. The 4,300 acre Griffith Park is the 

most visited city park in the county. There are a host of other natural attractions, including the 

Santa Monica and San Gabriel Mountains, Angeles and Los Padres National Forests, Santa 

Catalina and San Clemente Islands, Castaic Lake, the Los Angeles, Rio Hondo, Santa Clara, and 

San Gabriel Rivers, and the Mojave Desert, providing for outdoor recreation.

In 2015, Los Angeles County recorded 45.5 million visitors (day and overnight), an increase of 

2.8% from 2014 making 2015 the fifth consecutive year in which the County posted record levels 

of visitor volume. The Los Angeles Tourism and Convention Board reported that business and 

leisure travelers spent more than $19.6 billion in 2014, another record and an increase of 6.8% 

from 2013, which was also a record high. 
TDG 2015 022 22

POPULATION | DEMOGRAPHICS

As mentioned, Los Angeles County is the most populous county in the U.S. and is home to 88

incorporated cities, the largest being Los Angeles (4,030,904), Long Beach (484,958), and 

Glendale (201,668). The city of Los Angeles is the county seat of government, the largest city in 

the state, and second largest in the U.S. behind New York City. 

The California Department of Finance estimated the county’s population at 10,241,335 as of 

January 2016, an increase of 0.8% from 2015, 4.3% from the 2010 Census (9,818,605), and 7.6% 

from the 2000 Census (9,519,338). This population comprises close to one-quarter of the state’s 

total population. Population growth is expected to slow slightly this year and next, with the rate 

of growth at approximately 0.6% this year and 0.4% in 2017. Even at such low growth rates, the 

county will increase by over 100,000 residents during that time period. Most of the recent 

population growth in Los Angeles County has been due to natural increase (births outnumbering 

deaths), while net migration was slightly negative again last year. The county’s high cost of living 

and lack of affordable housing units for low and middle-income households are contributing to 

the slowdown in population growth.

According to the latest Census data, Los Angeles County had 3,241,204 households with 2.98 

persons per household. The median age was 35.9 years.

REGIONAL ECONOMY8

Trends in employment are a key indicator of economic health and strongly correlate with real 

estate demand. Los Angeles is known as the capital of entertainment, manufacturing, and 

international trade in the U.S., but its economic base is broad and also driven by the aerospace, 

automotive, biotechnology, and fashion industries. Two busy seaports, the busiest airport, three 

world-class research institutions, and 118 colleges and universities contribute significantly to the 

region’s $584 billion of annual economic activity.

Like the nation and state, Los Angeles County experienced broad-based job gains in 2015, 

adding approximately 95,000 jobs last year. Job gains were seen in most of the county’s major 

industries, with records reached in seven (out of 17) and two more poised to surpass their prerecession peaks in 2016. The largest job gains occurred in health care and social assistance 

(21,800 jobs), followed by leisure and hospitality (19,600 jobs) and government (10,000 jobs). 

 

8

“2016-2017 Economic Forecast & Industry Outlook,” The Kyser Center for Economic Research.

2010 2020 2030 2040 2050 2060

Los Angeles County 9,824,906 10,435,991 10,930,986 11,290,501 11,494,738 11,489,127 17.0% 0.3% per year

California 37,309,382 40,643,643 44,279,354 47,690,186 50,365,074 52,693,583 38.4% 0.8% per year

REGIONAL AND STATE HISTORICAL AND PROJECTED POPULATION ESTIMATES

% Change (2010-2060)

So urce: C alifo rnia D ept o f F inance
TDG 2015 022 23

The fastest growing sectors in percentage terms were construction (5.9%), leisure and 

hospitality (4.2%), wholesale trade (3.5%), and health care and social assistance (also 3.5%). 

Private sector job losses occurred in manufacturing, information, finance and insurance, and the 

natural resources sector.

EMPLOYMENT | UNEMPLOYMENT RATE

According to the California Employment Development Department, the county had a labor force 

of 5,041,800 in June 2016, an increase of 1.9% from the previous year. Of this total, 4,781,600

were employed. The county added 94,700 jobs in 2015, equivalent to a 2.2% annual increase. A 

majority of the county’s major industries added jobs last year, as broad-based growth pushed 

wage and salary jobs to a record high. Los Angeles County should continue to add jobs at a 1.7% 

annual rate this year, followed by a 1.0% annual rate in 2017. Along with job growth, the 

unemployment rate fell to 6.9%, the lowest rate of the post-recession period. The 

unemployment rate should further improve to 6.2% this year and 5.9% in 2017.

PERSONAL | HOUSEHOLD INCOME

With the onset of the recession in late 2008, incomes began to decline. According to the latest 

Census figures, Los Angeles County had a per capita income of $27,987, as compared to the 

state’s income of $29,906. Median household income was $55,870, compared to $61,489 in the 

state. 18.4% of the county’s population lived below the poverty level, which is higher than the 

state (16.4%). The countywide homeownership rate was 46.4%, lower than the state (54.8%). 

Total personal income increased by 4.5% in 2015, and is expected to maintain its trajectory this 

year with anticipated gains of 4.4%, followed by a gain of 5.3% in 2017. Now that the economy is 

back to full employment, upward pressure on wages, a strong dollar, and weak inflation may 

lead to significant gains in household purchasing power this year. Per capita income growth, 

which held relatively steady with a 3.6% gain in 2015, should respond to accelerating wage 

growth to rebound to 3.9% this year and accelerate to 4.9% in 2017. Since much of the gain in 

Employer No. of Employees % Of Total

Kaiser Permanente 35,771 0.76%

University of Southern California 18,629 0.40%

Northrop Grumman Corp. 17,000 0.36%

Target Corp. 15,000 0.32%

Ralphs/Food 4 Less (Kroger Co. Division) 13,500 0.29%

Bank of America Corp. 13,000 0.28%

Providence Health & Services Southern California 13,000 0.28%

AT&T Inc. 11,700 0.25%

UPS 10,768 0.23%

Home Depot 10,600 0.23%

10 LARGEST EMPLOYERS IN LA COUNTY

Source: 2 0 15 LA C ount y C omprehensive A nnual Financial R eport
TDG 2015 022 24

income is expected to be spent, local spending as measured by total taxable sales is expected to 

increase by 5.5% this year and 6.8% the next after a lackluster 2.9% increase in 2015. This means 

local sales and use tax revenues will climb, putting local government agencies on a sounder 

financial footing.

REAL ESTATE DEVELOPMENT9

Los Angeles County has a wide range of property types and limited vacant land in the populated 

areas, typical of a large metropolitan area. The recent recession resulted in a significant 

slowdown across all real estate market sectors. Currently, the region joins the nation in a 

recovery, which has renewed optimism in regard to real estate sales, leasing and development. 

RESIDENTIAL

Similar to the entire Southern California region, home prices in Los Angeles County peaked in 

the mid-2000s, stimulating more than 25,000 permits for new housing units. With the fallout 

over the subprime lending and national financial crisis in 2008-09, prices of both resale and new 

homes plummeted and new home construction bottomed out. In 2009, only 5,653 housing unit 

permits were issued. As a result of an improving economy, cautious optimism began to take 

hold in 2012, resulting in the 11,000 new housing unit permits followed by 15,800 in 2013. The 

market stumbled in 2014, largely a result of traditional first-time buyers not filling the void left 

by the reduction in institutional investors, restrictive mortgage lending standards, and reduced 

affordability. The median price for all homes was $530,000 in June 2016, +6.1% from June 2015. 

Since the end of the recession, multi-family has been the most active area of new residential 

construction, a result of job growth enabling younger people to create new households, 

continued difficulty in obtaining financing, and increased demand for student and senior rental 

housing. Vacancy rates are low, rents are rising, and despite new construction, supply is still 

lagging behind demand, especially for more affordable units. This trend is poised to increase 

even more in the next few years. As more apartment units become available, vacancy rates will 

 

9

“2016-2017 Economic Forecast & Industry Outlook,” The Kyser Center for Economic Research.

City Sales Jun-16 Jun-15 YTY% Chg

Los Angeles County 8056 $530,000 $499,500 6.1%

Orange County 3773 $655,000 $627,000 4.5%

Riverside County 4227 $332,000 $315,000 5.4%

San Bernardino County 2842 $285,000 $269,000 5.9%

San Diego County 4,410 $495,000 $476,000 4.0%

Ventura County 1163 $550,000 $517,800 6.2%

LA COUNTY & SURROUNDING COUNTIES HOME TRENDS

Median Sold Price of Single-Family Homes

So urce: C o reLo gic
TDG 2015 022 25

rise and slow increases in rental rates. According to Loopnet, the average asking price for multifamily properties in Los Angeles County as of May 2016 was $257,168.01 per unit, an increase of 

0.5% from three months earlier and 13.1% from the previous year.

OFFICE

Although the Los Angeles County office market has lagged behind other major cities in the past 

several years, it appears to be surging upward, with some indicators even surpassing 

prerecession levels. This is primarily a result of employment gains in the financial and 

professional business services sectors, coupled with limited new construction. In a number of 

submarkets, tech is the primary driver behind the increased demand. The primary office areas in 

Los Angeles County are West Los Angeles, Downtown Los Angeles, South Bay, Burbank/ 

Glendale/Pasadena and Mid-Wilshire. According to Loopnet, the average asking price for office 

properties in Los Angeles County as of May 2016 was $339.74 per square foot, an increase of 

4.2% from three months earlier and an increase of 14.7% from the previous year.

RETAIL

Los Angeles is a major retail hub in the state of California, with strong support from both 

residents and tourists. The primary retail areas in Los Angeles County are South Bay, San Gabriel 

Valley, Burbank/Glendale/Pasadena, San Fernando Valley and Mid-Cities. According to Loopnet, 

the average asking price for retail properties in Los Angeles County as of May 2016 was $286.30 

per square foot, an increase of 3.9% from three months earlier and 2.6% from the previous year.

YTD Net YTD Under Quoted

Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates

Antelope Valley 368 4,122,384 553,904 553,904 13.4% (682) 0 0 $21.43 

Burbank/Glendale/Pasadena 3,078 55,892,444 4,586,563 4,693,077 8.4% 251,679 47,452 231,440 $30.61 

Downtown Los Angeles 708 69,872,747 8,057,371 8,325,322 11.9% 538,949 0 1,126,141 $36.04 

Mid-Cities 1,049 10,533,762 657,301 705,647 6.7% 8,366 3,504 0 $24.17 

Mid-Wilshire 1,615 40,452,220 5,032,960 5,084,939 12.6% 399,663 419,011 741,801 $35.84 

San Fernando Valley 1,482 35,802,462 3,508,822 3,605,734 10.1% 445,070 3,302 122,978 $26.90 

San Gabriel Valley 2,019 30,521,893 2,539,300 2,557,871 8.4% 162,986 0 74,487 $24.48 

Santa Clarita Valley 215 4,824,621 484,682 499,410 10.4% 58,660 0 0 $29.49 

South Bay 2,511 64,545,418 8,011,447 8,149,300 12.6% 335,830 74,152 190,842 $27.27 

Southeast Los Angeles 617 8,664,184 570,112 582,548 6.7% (51,781) 0 77,250 $21.98 

Ventura North 820 8,277,782 988,287 988,787 11.9% (27,650) 0 0 $20.98 

Ventura South 1,004 21,830,110 2,641,030 2,718,510 12.5% (168,682) 60,466 73,732 $26.81 

West Los Angeles 2,527 75,694,534 6,807,094 7,369,911 9.7% 16,460 26,400 698,492 $48.88 

Totals 18,013 431,034,561 44,438,873 45,834,960 10.6% 1,968,868 634,287 3,337,163 $32.23 

So urce: C o Star P ro perty®

LOS ANGELES COUNTY TOTAL OFFICE MARKET STATISTICS - 2nd Qtr 2016

Existing Inventory Vacancy
TDG 2015 022 26

INDUSTRIAL

Los Angeles County is the largest manufacturing center in the U.S., in large part due to its two 

deep water ports and well-developed transportation network. The primary industrial areas in 

the county are Central Los Angeles, Mid-Counties LA, San Fernando Valley East, Vernon Area, 

Lower San Gabriel Valley, and Carson/Rancho Dominguez. According to Loopnet, the average 

asking price for industrial properties in Los Angeles County as of May 2016 was $193.36 per 

square foot, an increase of 3.6% from three months earlier and 19.2% from the previous year.

YTD Net YTD Under Quoted

Market # Blds Total GLA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates

Antelope Valley 1,137 15,942,462 1,164,902 1,207,250 7.6% 147,220 32,809 0 $15.37 

Burbank/Glendale/Pasadena 6,423 52,074,666 1,569,994 1,587,821 3.0% 320,380 88,368 532,397 $32.61 

Downtown Los Angeles 2,014 24,366,709 968,151 974,935 4.0% (33,983) 5,785 407,138 $30.47 

Mid-Cities 5,630 47,501,027 2,215,321 2,247,991 4.7% 259,337 7,689 95,296 $20.49 

Mid-Wilshire 3,973 34,798,763 1,311,186 1,316,292 3.8% 84,964 19,343 170,497 $45.51 

San Fernando Valley 4,620 50,511,611 2,209,621 2,377,453 4.7% 226,601 11,500 16,000 $24.57 

San Gabriel Valley 5,614 60,825,188 2,652,028 2,697,619 4.4% 251,644 128,519 151,894 $21.61 

Santa Clarita Valley 740 12,644,442 653,944 659,566 5.2% 51,778 0 0 $22.27 

South Bay 7,074 67,678,857 2,093,893 2,305,951 3.4% 258,931 202,936 53,964 $24.15 

Southeast Los Angeles 1,860 19,139,946 645,342 647,842 3.4% 99,976 2,311 23,905 $21.27 

Ventura North 1,780 18,126,236 779,284 901,838 5.0% 182,528 11,456 0 $19.46 

Ventura South 1,743 26,106,379 1,139,705 1,383,116 5.3% 113,636 0 88,821 $24.26 

West Los Angeles 4,519 39,263,954 1,109,522 1,264,409 3.2% 718 73,106 53,850 $54.91 

Totals 47,127 468,980,240 18,512,893 19,572,083 4.2% 1,963,730 583,822 1,593,762 $28.17 

LOS ANGELES COUNTY TOTAL RETAIL MARKET STATISTICS - 2nd Qtr 2016

Existing Inventory Vacancy

So urce: C o Star P ro perty®

YTD Net YTD Under Quoted

Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates

Antelope Valley 403 10,284,123 178,149 178,149 1.7% 7,209 0 0 $9.58 

Carson/Rancho Dominguez 1,236 74,988,892 1,117,349 1,125,633 1.5% 611,971 62,482 63,450 $7.87 

Central LA 4,968 94,227,440 3,007,984 3,145,822 3.3% 77,571 105,170 1,007,000 $13.15 

Commerce Area 1,685 76,246,350 2,231,732 2,463,162 3.2% (759,781) 188,816 116,634 $7.34 

Conejo Valley 834 23,746,828 803,528 826,660 3.5% 149,932 0 0 $9.86 

Eastern SGV 1,094 26,888,720 392,969 546,906 2.0% 37,793 0 645,933 $7.15 

El Segundo/Hawthorne 963 25,960,265 454,088 620,838 2.4% (15,539) 0 3,525 $13.96 

Gardena/110 Corridor 1,669 36,252,040 545,556 545,556 1.5% 214,070 134,041 271,829 $8.66 

Long Beach Area 1,663 29,253,941 345,132 379,280 1.3% 57,611 0 703,160 $9.16 

Lower SGV 1,535 83,214,415 1,469,082 1,571,454 1.9% (397,511) 167,941 236,343 $7.53 

Lynwood/Paramount 558 12,983,939 93,886 93,886 0.7% (43,506) 0 201,027 $7.05 

Mid Counties-LA 2,698 94,425,999 1,188,510 1,243,261 1.3% (77,022) 0 327,941 $7.73 

Northwest SGV 1,338 22,878,798 823,306 827,306 3.6% 137,133 0 501,270 $9.67 

SCV/Lancaster/Palmdale 665 23,055,245 708,725 793,436 3.4% (117,770) 0 254,722 $8.25 

SFV East 4,981 82,528,347 1,374,228 1,448,919 1.8% (117,016) 28,620 3,600 $11.50 

SFV West 1,965 46,722,966 1,620,874 1,699,313 3.6% (338,088) 0 0 $9.75 

Southwest SGV 1,028 11,350,026 90,729 90,729 0.8% 29,628 4,370 0 $12.54 

Torrance/Beach Cities 1,049 36,644,233 746,035 848,237 2.3% 43,293 0 0 $9.08 

Upper SGV 1,251 25,937,106 398,289 456,239 1.8% 134,519 190,580 528,510 $9.13 

Ventura County 2,170 49,956,025 1,874,946 1,888,275 3.8% 203,192 64,000 0 $7.85 

Vernon Area 2,200 81,487,193 1,700,312 1,760,781 2.2% 59,403 151,988 118,714 $7.67 

Westside 1,186 19,110,448 584,009 627,285 3.3% (138,691) 0 0 $26.74 

Totals 37,139 988,143,339 21,749,418 23,181,127 2.3% (241,599) 1,098,008 4,983,658 $9.45 

LOS ANGELES COUNTY TOTAL INDUSTRIAL MARKET STATISTICS - 2nd Qtr 2016

Existing Inventory Vacancy

So urce: C o Star P ro perty®
TDG 2015 022 27

The outlook for the industrial sector is positive, especially for warehouse/distribution facilities, 

data centers, and research and development centers. Continued improvement in vacancy and 

asking rents depend largely on increases in international trade, industrial production and ecommerce. 

CONCLUSION

The national economic downturn of 2008-2009 hit the Los Angeles region relatively hard, but 

recovery has taken a firm hold. Over the long term, the county will be positively impacted by a 

slow and steadily increasing population base, a relatively strong GDP, a well-developed 

distribution network, and its established reputation as a thriving metropolitan and 

manufacturing area and touristic destination. It is anticipated that the regional economy will 

continue to improve and employment will increase, strengthening the demand for real estate.
TDG 2015 022 28

CITY DESCRIPTION – SANTA MONICA

LOCATION

Santa Monica is a beachfront city in western Los 

Angeles County, California, United States. Situated 

on Santa Monica Bay, it is bordered on three sides 

by the city of Los Angeles – Pacific Palisades to the 

north, Brentwood on the northeast, Sawtelle on 

the east, Mar Vista on the southeast, and Venice 

on the south. The city of Santa Monica rests on a 

mostly flat slope that angles down towards Ocean 

Avenue and towards the south. High bluffs 

separate the north side of the city from the beaches. 

TRANSPORTATION

The Santa Monica Freeway (Interstate 10) begins in Santa Monica near the Pacific Ocean and 

heads east. The Santa Monica Freeway between Santa Monica and downtown Los Angeles has 

the distinction of being one of the busiest highways in all of North America. State Route 2 (Santa 

Monica Boulevard) begins in Santa Monica, barely grazing State Route 1 at Lincoln Boulevard, 

and continues northeast across Los Angeles County, through the Angeles National Forest, 

crossing the San Gabriel Mountains as the Angeles Crest Highway, ending in Wrightwood. Santa 

Monica is also the western (Pacific) terminus of historic U.S. Route 66. Close to the eastern 

boundary of Santa Monica, Sepulveda Boulevard reaches from Long Beach at the south, to the 

northern end of the San Fernando Valley. Just east of Santa Monica is Interstate 405, the "San 

Diego Freeway", a major north-south route in Los Angeles County and Orange County, 

California. 

The city of Santa Monica runs its own bus service, the Big Blue Bus, which also serves much of 

West Los Angeles and the University of California, Los Angeles (UCLA). A Big Blue Bus was 

featured prominently in the action movie Speed. The city is also served by the Los Angeles 

County Metropolitan Transportation Authority's (Metro) bus lines. Metro also complements Big 

Blue service, as when Big Blue routes are not operational overnight, Metro buses make many 

Big Blue Bus stops, in addition to MTA stops.

As for light rail, design and construction on the 6.6-mile extension (10.6 km) of the Expo Line 

from Culver City to Santa Monica started in September 2011, with service beginning on May 20, 

2016. Santa Monica Metro stations include 26th Street/Bergamot, 17th Street/Santa Monica 

College, and Downtown Santa Monica. Travel time between the downtown Santa Monica and 

the downtown Los Angeles termini is approximately 47 minutes.
TDG 2015 022 29

The city owns and operates a general aviation airport, Santa Monica Airport, which has been the 

site of several important aviation achievements. Commercial flights are available for residents at 

Los Angeles International Airport, a few miles south of Santa Monica.

POPULATION / DEMOGRAPHICS

According to the California Department of Finance, Santa Monica had a population of 93,640 as 

of January 2016, making it the 19th largest city in Los Angeles County. This is an increase of 0.6% 

from the January 2015 population of 93,093 and 4.4% from the 2010 Census population of 

89,736.

According to the latest available U.S. Census data, the city of Santa Monica had 46,917 

households with 1.87 persons per household. The median age was 40.3 years, which is about 5 

years older than the state median. The homeownership rate was 27.1%, compared to 56% in 

California. A total of 11.3% of the population was living below the poverty level, compared to 

15.3% in the state.

SERVICES / RECREATION

The City provides a full range of services, including police protection, water and wastewater 

utilities, street maintenance, public transportation, parking, parks and recreation, planning, and 

building and safety. Gas, electric and telephone services are provided by private utility 

companies. The Santa Monica-Malibu School District operates eight elementary, one middle, 

and one high school, and there are several private schools in the city. Santa Monica Community 

College, a two-year, public community college is also located in the city. Two major hospitals are 

within the Santa Monica city limits, UCLA Santa Monica Hospital and St. John's Hospital. There 

are four fire stations providing medical and fire response within the city staffed with 6 

Paramedic Engines, 1 Truck company, 1 Hazardous Materials team and 1 Urban Search & Rescue 

team. Santa Monica Fire Department has its own Dispatch Center. Ambulance transportation is 

provided by AmeriCare Ambulance Services. The Los Angeles County Department of Health 

Services operates the Simms/Mann Health and Wellness Center in Santa Monica. The 

Department's West Area Health Office is in the Simms/Mann Center.

The Santa Monica Looff Hippodrome (carousel) is a National Historic Landmark. It sits on the 

Santa Monica Pier, which was built in 1909. The La Monica Ballroom on the pier was once the 

largest ballroom in the US and the source for many New Year's Eve national network broadcasts. 

The Santa Monica Civic Auditorium was an important music venue for several decades and

hosted the Academy Awards in the 1960s. McCabe's Guitar Shop is still a leading acoustic 

performance space as well as retail outlet. Bergamot Station is a city-owned art gallery 

compound that includes the Santa Monica Museum of Art. The city is also home to the 

California Heritage Museum and the Angels Attic dollhouse and toy museum.
TDG 2015 022 30

Santa Monica has three main shopping districts, Montana Avenue on the north side of the city, 

the Downtown District in the city's core, and Main Street on the south end of the city. Each of 

these districts has its own unique feel and personality. Montana Avenue is a stretch of luxury 

boutique stores, restaurants, and small offices that generally features more upscale shopping. 

The Main Street district offers an eclectic mix of clothing, restaurants, and other specialty retail.

The Downtown District is the home of the Third Street Promenade, a major outdoor pedestrianonly shopping district that stretches for three blocks between Wilshire Blvd. and Broadway (not 

the same Broadway in downtown and south Los Angeles). Third Street is closed to vehicles for 

those three blocks to allow people to stroll, congregate, shop and enjoy street performers. 

Santa Monica Place, featuring Bloomingdale's and Nordstrom in a three-level outdoor 

environment, is located at the south end of the Promenade. After a period of redevelopment, 

the mall reopened in the fall of 2010 as a modern shopping, entertainment and dining complex 

with more outdoor space.

The oldest movie theater in the city is the Majestic. Also known as the Mayfair Theatre, the 

theater which opened in 1912 has been closed since the 1994 Northridge earthquake. The Aero 

Theater (now operated by the American Cinematheque) and Criterion Theater were built in the 

1930s and still show movies. The Santa Monica Promenade alone supports more than a dozen 

movie screens.

Palisades Park stretches out along the crumbling bluffs overlooking the Pacific and is a favorite 

walking area to view the ocean. It includes a totem pole, camera obscura, artwork, benches, 

picnic areas, pétanque courts, and restrooms. Tongva Park occupies 6 acres between Ocean 

Avenue and Main Street, just south of Colorado Avenue. The park includes an overlook, 

amphitheater, playground, garden, fountains, picnic areas, and restrooms.

LOCAL ECONOMY / INCOME

The national economy continues to 

recover modestly. After annual growth of 

just over 2% for the last four years, many 

economists are projecting growth in the 

3% range annually over the 2014-2016 

time period. Unemployment, which has 

been dropping for more than five years, 

fell to 5.8% in November. The strong 

recovery in the housing market has 

begun to level off, while inflation is expected to remain relatively low through at least 2016. 

Unemployment continues to fall as more private sector jobs have now been added than were 

lost during the recession, housing sales and median prices have been strong, and the 

commercial real estate market continues to show lower vacancy rates and higher asking rents. 

Employer No. of Employees % Of Total

City of Santa Monica 2,559 3.10%

Santa Monica-UCLA Hospital 2,113 2.56%

Santa Monica College 1,851 2.24%

Saint John's Hospital Medical Center 1,790 2.17%

Santa Monica-Malibu Unified School District 1,657 2.01%

Activision Blizzard, Inc. 899 1.09%

RAND Corporation 817 0.99%

Universal Music Group 787 0.95%

Riot Games 712 0.86%

Lion's Gate Entertainment Corporation 608 0.74%

10 LARGEST EMPLOYERS IN SANTA MONICA

Source: 2 0 15 Sant a M onica C omprehensive A nnual Financial R eport
TDG 2015 022 31

Personal income and taxable sales are expected to continue to show consistent moderate 

growth, assisting in the continued stabilization of the State’s budget. Santa Monica tends to 

weather economic downturns better and recover faster than other jurisdictions, due in large 

part to its geographic location and to its diversified tax revenue base, which generally protects 

the City from downturns that impact one or a limited number of sectors of the economy. The 

City’s major tax revenues have recovered significantly and have exceeded pre-recession levels.

EMPLOYMENT | UNEMPLOYMENT

According to the California Employment Development Department, the city of Santa Monica had 

a total labor force of 56,300 as of June 2016, of which 4.4% were unemployed. According to the 

2014 American Community Survey, the city had a median household income of $74,534, up 

from $68,842 in 2010. This is considerably higher than the U.S. ($53,482), California ($61,489) 

and Los Angeles County ($55,870). Approximately 11.3% of all city residents and 5.2% of all 

families live below the poverty level, which compares to the U.S. (15.6% and 11.5%, 

respectively) and is lower than California (16.4% and 12.3%, respectively).

REAL ESTATE DEVELOPMENT

RESIDENTIAL

According to the 2014 American Community 

Survey, the city had a total of 50,454 housing 

units. Of this total, 18.6% were single family 

detached homes, 4.1% were single family 

attached homes, 77% were multi-family units, 

and 0.3% were mobile homes. CoreLogic 

reported a median home price of $1,411,500 in 

June 2016, up 38.8% from $1,017,000 in June 

2015, and a total of 61 sales during the month. 

OFFICE

According to the Costar Office Market Report for Los Angeles County, as of the 2nd Quarter 

2016, there were a total of 569 office buildings totaling 15,430,128 square feet in the Santa 

Monica submarket. Vacancy was 11.2%, slightly higher than the 10.6% average for the entire Los 

Angeles County. Year-to-date net absorption totaled a negative (91,046) square feet. No new 

space was delivered during the quarter, but 22,837 square feet were still under construction. 

The average rental rate was $54.61 per square foot, substantially higher than the county’s 

average office rental rate of $32.23.10 

 

10 The Costar Office Report (Second Quarter 2016) – Los Angeles County, Costar Group. 

City Sales Jun-16 Jun-15 YTY% Chg

BEVERLY HILLS 5 3 $2,896,000 $2,353,000 23.1%

CULVER CITY 5 4 $750,000 $474,500 58.1%

EL SEGUNDO 2 0 $1,135,500 $888,250 27.8%

INGLEWOOD 3 5 $416,500 $350,000 19.0%

LOS ANGELES 1,243 $674,750 $649,500 3.9%

MALIBU 3 0 $2,500,000 $1,800,000 38.9%

MANHATTAN BEACH 4 2 $1,864,500 $2,400,000 -22.3%

MARINA DEL REY 3 2 $900,000 $810,000 11.1%

PACIFIC PALISADES 5 1 $2,035,000 $1,925,000 5.7%

SANTA MONICA 6 1 $1,411,500 $1,017,000 38.8%

WEST HOLLYWOOD 4 7 $749,500 $655,500 14.3%

Los Angeles County 8,056 $530,000 $499,500 6.1%

SANTA MONICA & SURROUNDING CITIES HOME TRENDS

Median Sold Price of Single-Family Homes

So urce: C o reLo gic
TDG 2015 022 32

RETAIL 

According to the Costar Retail Market Report for Los Angeles County, as of the 2nd Quarter 

2016, there were a total of 695 retail buildings totaling 4,813,336 square feet in the Santa 

Monica submarket. Vacancy was 3.0%, lower than the 3.4% average for the entire Los Angeles 

County. Year-to-date net absorption totaled a negative 19,412 square feet. Only 675 square feet 

of new space were delivered during the quarter and there was no space under construction. The 

average rental rate was $62.50 per square foot, substantially higher than the county’s average 

office rental rate of $31.69.11

CONCLUSION

In the short term, the city of Santa Monica is expected to continue to recover from the recent 

recessionary economy along with the rest of the county, state and nation. The established 

reputation of the city resulting in a strong tourism base, the year-round mild climate, and overall 

quality of life, are the primary reasons why the city is expected to continue to thrive over time.

 

11 The Costar Retail Report (Second Quarter 2016) – Los Angeles County, Costar Group.
TDG 2015 022 33

MARKET OVERVIEW

COSTAR’S OFFICE REPORT – LOS ANGELES: 2

ND QUARTER 2016

According to The CoStar Office Report, Los Angeles’ office market showed continued stability 

and strength during the 2nd Quarter 2016. Vacancy decreased slightly to 10.6% and, total net 

absorption was a positive 1,280,416 square feet, vacant sublease space decreased to 1,396,087 

square feet. Rental rates increased, ending the quarter at $32.23 per square foot per year. 

Seven new buildings, totaling 163,212 square feet, were delivered to the market during the 

quarter, and there were 3,337,163 square feet still under construction.

SUPPLY

Key indicators of supply include existing inventory and new construction. Since 2005, Los 

Angeles’ existing office inventory has increased steadily every year, however the sector’s most 

significant growth occurred between 2005 and 2009. Between 2005 and 2009, Los Angeles’ 

existing office inventory increased 416,867,206 (17,433 buildings) to 426,315,310 (17,853 

buildings) square feet. During this time period, new space delivered bottomed out at 2,253,749 

(2005) and peaked at 4,020,321 (2009) square feet. Between 2005 and 2009, a total of 

15,701,067 square feet were delivered which represents nearly two thirds of the total space 

delivered since 2005 to date. As the 2008 economic downturn settled in, the rate of new 

construction significantly decreased, and remain well below pre-recession levels. A total of 

634,287 square feet in 14 buildings have been delivered year-to-date in 2016, 7 in the 1st

Quarter and 7 in the 2nd Quarter. Throughout the remainder of this year, new construction is 

expected to remain conservative as confidence in the economy increases. A detailed discussion 

of regional office supply indicators (overall and by building class) follows. 

Net Quoted

Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates

2016 2q 18,013 431,034,561 44,438,873 45,834,960 10.6% 1,280,416 7 163,212 46 3,337,163 $32.23 

2016 1q 18,008 431,044,806 45,658,478 47,125,621 10.9% 688,452 7 471,075 50 3,321,375 $32.03 

2015 4q 18,002 430,815,773 46,383,621 47,585,040 11.0% 1,776,887 15 857,496 51 3,504,139 $31.61 

2015 3q 17,990 429,993,340 47,289,838 48,539,494 11.3% (355,526) 19 271,406 56 4,216,873 $30.95 

2015 2q 17,976 429,871,840 46,797,672 48,062,468 11.2% 1,815,815 10 638,302 62 3,992,612 $30.74 

2015 1q 17,972 429,483,512 48,386,645 49,489,955 11.5% (333,200) 10 366,357 61 4,071,886 $30.01 

2014 17,965 429,268,859 47,970,699 48,942,102 11.4% 3,261,379 28 875,963 59 3,423,626 $30.28 

2013 17,961 429,458,593 50,975,606 52,393,215 12.2% 1,714,238 44 1,558,657 35 1,774,514 $29.21 

2012 17,928 428,388,089 51,601,292 53,036,949 12.4% 1,742,016 35 1,463,586 40 1,827,477 $28.32 

2011 17,907 427,647,380 52,083,198 54,038,256 12.6% 42,042 33 865,329 39 2,424,625 $27.98 

2010 17,887 427,153,922 50,942,139 53,586,840 12.5% (2,424,409) 47 1,375,322 38 1,724,590 $27.78 

2009 17,853 426,315,310 46,573,131 50,323,819 11.8% (5,893,894) 122 4,020,321 52 2,079,736 $28.63 

2008 17,744 422,906,923 37,187,842 41,021,538 9.7% (6,420,587) 198 3,591,117 128 5,044,054 $31.24 

2007 17,570 420,106,224 29,147,553 31,800,252 7.6% 534,433 109 2,816,854 218 5,577,553 $31.08 

2006 17,493 418,843,167 28,919,341 31,071,628 7.4% 4,539,882 86 3,019,026 135 3,714,051 $27.79 

2005 17,433 416,867,206 31,175,447 33,635,549 8.1% 9,602,257 82 2,253,749 81 3,056,010 $25.52 

Source: CoStar Property®

LOS ANGELES TOTAL OFFICE MARKET STATISTICS - Mid Year 2016

Existing Inventory Vacancy Deliveries UC Inventory
TDG 2015 022 34

INVENTORY

Los Angeles County had a total office inventory of 431,034,561 square feet (18,013 buildings) at 

the end of the 2nd Quarter. Of this space, 69,872,747 square feet (708 buildings) were in the 

central business district and 361,161,814 square feet (17,305 buildings) were in suburban 

submarkets. Class A space accounted for 182,082,939 square feet (990 buildings), Class B space 

accounted for 161,513,787 square feet (5,699 buildings), and Class C space accounted for 

87,437,835 square feet (11,324 buildings). 

NEW CONSTRUCTION

During the 2nd Quarter, seven office buildings totaling 163,212 square feet were delivered to the 

Los Angeles region. Seven new buildings were delivered in the 1st Quarter totaling 471,075 

square feet, 15 buildings totaling 857,496 square feet were delivered in the 4th Quarter 2015, 

and 19 buildings totaling 271,406 square feet were delivered in the 3rd Quarter. 

Notable deliveries in the 2nd Quarter 2016 are as follows: 

 a 64,000 square foot building at 925 N La Brea Ave (Mid-Wilshire submarket) was 75% occupied 

at the end of the quarter;

 the 60,466 square foot Westlake Park Place – Phase II – Bldg D (Ventura South submarket) was 

100% occupied at the end of the quarter;

 a 26,400 square foot building at 3515 Eastham Dr (West Los Angeles submarket) was 100% 

occupied at the end of the quarter. 

There were 46 office buildings (totaling 3,337,163 square feet) still under construction at the 

end of the quarter. This pending space was primarily dispersed among three submarkets –

Downtown Los Angeles (1,106,141 square feet), Mid-Wilshire (649,601 square feet), and the 

West Los Angeles (593,382 square feet). The three largest projects under construction were: 

 Los Angeles Federal Courthouse (Downtown Los Angeles submarket) consisting of 600,000 

square feet, 100% pre-leased, with delivery expected in the 4th Quarter 2016;

 Office Plaza at Wilshire Grand (Downtown Los Angeles submarket) consisting of 356,141 square 

feet, 0% pre-leased, with delivery expected in the 2nd Quarter 2017; and,

 Sunset Bronson Studios - Icon (Mid-Wilshire submarket) consisting of 323,273 square foot, 100% 

pre-leased, with delivery expected in the 1

st Quarter 2017. 

DEMAND

Key indicators of demand include absorption, vacancy, lease rates and sales activity. Between 

2005 and 2007, demand for office space throughout the region was strong with a peak average 

annual positive net absorption of 9,602,257 square feet (2005) and a low of 534,433 square feet 

(2007). During this time period, average annual vacancy rates peaked at 8.1% in 2005, and 

bottomed out at 7.6% in 2007. Average annual rental rates were at their lowest ($25.52 per 

square foot) in 2005, and a high of $31.08 in 2007. In 2008, the downturn in the national 

economy impacted real estate markets everywhere, driving absorption and rental rates down 

and vacancies up. While the average rental rate rose slightly in 2008 to $31.24, net absorption 
TDG 2015 022 35

took a significant downward turn with negative (6,420,587) square feet absorbed in that year 

which resulted in a significant increase in vacancy at 9.7%, an increase of over 2 percent over 

the prior year. Negative net absorption, increasing vacancy and declining rental rates continued 

through 2009 and 2010. Vacancy peaked in 2011 at 12.6% for the region, although net 

absorption turned positive in that year with a positive 42,042 square feet absorbed. Recovery 

ensued in 2012 as vacancy began to decline and has remained on a downward trend ever since, 

net absorption rates have remained positive, and rental rates have steadily increased; these 

trends are expected to continue for the remainder of 2016. A detailed discussion of regional 

office demand indicators (overall and by building class) follows. 

NET ABSORPTION

In 2005 and 2006, Los Angeles’ office market absorption was strong with 9,602,257 square feet 

absorbed in 2005 and 4,539,882 square feet absorbed in 2006. Net absorption remained 

positive in 2007, albeit at a tempered pace with a net positive of 534,433 square feet. The 2008 

economic decline caused a dramatic decrease in demand resulting in total negative net 

absorption of (6,420,587) square feet by year-end. In 2009 and 2010, absorption still struggled, 

with negative net absorption of (5,893,894) square feet in 2009 and (2,424,409) square feet in 

2010. In 2011, there was an uptick in demand, increasing absorption to 42,042 square feet. 

Increasing absorption continued in 2012, 2013 and 2014 ending each year at net positive levels 

of 1,742,016, 1,714,238, and 3,261,379 square feet, respectively. The 1st and 3rd Quarters of 

2015 posted negative absorption of (333,200) and (355,526) respectively, however the year 

ended positive overall with 2,903,976 total square feet absorbed. Net absorption rates have 

continued to be positive in the first two quarters of 2016 with 688,452 square feet in the 1st

Quarter and 1,280,416 in the 2nd Quarter. Absorption is expected to continue conservatively 

increasing as confidence in the economy continues to improve. 

The following tenants moved out of large blocks of space in 2016: 

 Twenty-First Century Fox, Inc. vacated 168,302 square feet at 407 North Maple;

 Warner Brothers vacated 43,014 square feet at 15301 Ventura Blvd;

 SoCal Edison vacated 26,826 square feet at 2440 S Sepulveda Blvd.

The following tenants moved into large blocks of space:

 City of Hope occupied 137,936 square feet at 1218 S 5th Ave;

 DaVita, Inc. occupied 131,144 square feet at 2175 E Park Place;

 WeWork occupied 93,464 square feet at The Gas Company Tower.

Net absorption in Los Angeles’ central business district was a positive 457,027 square feet in the 

2

nd Quarter, preceded by 81,922 in the 1st Quarter, positive 106,933 in the 4th Quarter 2015, and 

positive 1,670,488 in the 3

rd Quarter 2015. Los Angeles’ suburban markets had positive net 

absorption of 823,389 square feet in the 2nd Quarter, preceded by positive 606,530 square feet

in the 1

st Quarter, positive 1,670,488 in the 4th Quarter 2015, and negative (505,994) in the 3rd

Quarter.
TDG 2015 022 36

LA RGES T LEAS E SI GN ING S

The largest lease signings occurring in 2016 were:

 a 155,000 square foot lease signed by the FAA, located at 777 S Aviation Blvd in the South Bay 

market;

 a 128,267 square foot lease signed by Disney, located at Media Studios North Phase 5 in the 

Burbank/Glendale/Pasadena market;

 a 123,221 square foot lease signed by Netflix, located at Sunset Bronson Studios – Icon in the 

Mid-Wilshire market.

VACANCY

At year-end 2005, Los Angeles’ regional office vacancy rate was 8.1%. In 2006, vacancy again 

declined to 7.4% before increasing slightly in 2007 to 7.6%. Between 2008 and 2011, vacancy 

steadily and significantly increased from 9.7%% to 12.6%. In 2012, vacancy began a slow but 

steady decline from 12.4% to the current rate of 10.6% in the 2nd Quarter 2016. It is expected to 

decrease slightly throughout the remainder of 2016, as demand continues to slightly exceed 

existing inventory and new deliveries. 

The amount of vacant sublease space has fluctuated over the past several quarters. At the end 

of the 2nd Quarter, there were 1,396,087 square feet vacant, a decrease from 1,467,143 in the 

1

st Quarter. Prior to that, there were 1,201,419 square feet vacant at the end of the 4th Quarter

2015, a decrease from 1,249,656 square feet in the 3rd Quarter. Los Angeles’ central business 

district had 267,951 square feet vacant at the end of the 2nd Quarter, up from 218,816 in the 1st

Quarter and 178,380 in the 4th Quarter 2015. The region’s suburban markets had 1,128,136 

square feet of vacant sublease space at the end of the 2nd Quarter, down from 1,248,327 in the 

1

st Quarter and 1,023,039 in the 4th Quarter 2015. 

Vacancy in Los Angeles’ central business district decreased from 12.6% in the 1st Quarter to 

11.9% at the end of the 2nd Quarter. Prior to this, vacancy had been 12.7% in the 4th Quarter 

2015 and 12.4% at the end of the 3rd Quarter. Vacancy in the suburban markets decreased 

slightly from 10.6% in the 1st Quarter to 10.4% in the 2nd Quarter. Prior to this, vacancy had been 

at 10.7% in the 4th Quarter 2015 and 11.1% at the end of the 3rd Quarter.

ANNUAL RENTAL RATES

At the end of the 2nd Quarter, the average quoted asking rental rate for all classes of space in the 

Los Angeles office market was $32.23 per square foot per year, a 0.6% increase from $32.06 in 

the 1st Quarter. Los Angeles’ central business district had an average quoted annual asking 

rental rate of $36.04 per square foot in the 2nd Quarter, up slightly from $35.59 in the 1

st

Quarter. The suburban markets had an average quoted annual asking rental rate of $31.60 per 

square foot in the 2nd Quarter, up from $31.46 in the 1st Quarter. 
TDG 2015 022 37

SALES ACTIVITY

The total dollar volume of office sales (buildings 15,000+ square feet in size) in the region 

decreased between the 4th Quarter 2015 and the 1st Quarter 2016. In the 1

st Quarter, 32 

transactions closed with a total volume of $819,425,845 ($329.47 per square foot); in the 4th

Quarter, there were 63 transactions with a total dollar volume of $1,433,476,100 ($294.53 per 

square foot). Total office building sales activity in 2016 was down compared to 2015. In the first 

three months of 2016, there were 32 office transactions with a total volume of $819,425,845 

($329.47 per square foot). During the same time period in 2015, there were 35 transactions 

totaling $1,139,798,636 ($379.49 per square foot). 

One of the largest transactions that occurred within the last four quarters is the sale of 400 S 

Hope Street, a 701,535 square foot office building that sold at a 4.90% cap rate on May 20, 

2016, for $313,636,000 ($447.07 per square foot). Cap rates have been stable to slightly higher 

in 2016, averaging 5.78% as compared to 5.75% in the same time period in 2015. Throughout 

the remainder of 2016, sales activity and cap rates are expected to remain stable as the 

economy shows continued strength and improvement.

SUMMARY

The following table summarizes pertinent statistics for office space in the Los Angeles region 

segregated by market. The subject is in the West Los Angeles submarket cluster, which includes 

the following submarkets: Beverly Hills, Brentwood, Century City, Culver City, Marina Del 

Rey/Venice, Olympic Corridor, Pacific Palisades/Malibu, Santa Monica, Santa Monica Mountains, 

West Los Angeles and Westwood. 

YTD Net YTD Under Quoted

Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates

Antelope Valley 368 4,122,384 553,904 553,904 13.4% (682) 0 0 $21.43 

Burbank/Glendale/Pasadena 3,078 55,892,444 4,586,563 4,693,077 8.4% 251,679 47,452 231,440 $30.61 

Downtown Los Angeles 708 69,872,747 8,057,371 8,325,322 11.9% 538,949 0 1,126,141 $36.04 

Mid-Cities 1,049 10,533,762 657,301 705,647 6.7% 8,366 3,504 0 $24.17 

Mid-Wilshire 1,615 40,452,220 5,032,960 5,084,939 12.6% 399,663 419,011 741,801 $35.84 

San Fernando Valley 1,482 35,802,462 3,508,822 3,605,734 10.1% 445,070 3,302 122,978 $26.90 

San Gabriel Valley 2,019 30,521,893 2,539,300 2,557,871 8.4% 162,986 0 74,487 $24.48 

Santa Clarita Valley 215 4,824,621 484,682 499,410 10.4% 58,660 0 0 $29.49 

South Bay 2,511 64,545,418 8,011,447 8,149,300 12.6% 335,830 74,152 190,842 $27.27 

Southeast Los Angeles 617 8,664,184 570,112 582,548 6.7% (51,781) 0 77,250 $21.98 

Ventura North 820 8,277,782 988,287 988,787 11.9% (27,650) 0 0 $20.98 

Ventura South 1,004 21,830,110 2,641,030 2,718,510 12.5% (168,682) 60,466 73,732 $26.81 

West Los Angeles 2,527 75,694,534 6,807,094 7,369,911 9.7% 16,460 26,400 698,492 $48.88 

Totals 18,013 431,034,561 44,438,873 45,834,960 10.6% 1,968,868 634,287 3,337,163 $32.23 

Source: CoStar Property®

Existing Inventory Vacancy

LOS ANGELES TOTAL OFFICE MARKET STATISTICS - Mid Year 2016
TDG 2015 022 38

OFFICE MARKET SECTORS

CLASS A OFFICE SPACE

According to CoStar, Class A office buildings are deemed “extremely desirable investment-grade 

properties” and lease and sell at the highest levels in a given market. Location, floor plans and 

tenant layouts, quality, architectural standards, mechanical systems, as well as maintenance and 

management, are all top quality. The following tables provide pertinent statistics for Class A 

office space in the Los Angeles region: 

At the end of the 2nd Quarter, the Los Angeles region had 182,082,939 square feet in 990 Class A 

buildings. During the quarter, the Class A sector recorded positive net absorption of 621,031 

square feet, up from a positive 242,237 in the 1

st Quarter, positive 916,873 in the 4th Quarter

2015, and negative (274,710) in the 3

rd Quarter. Overall, vacancy in Class A office projects has 

been declining since 2011, when it peaked at 16.5%. By the end of the 2nd Quarter 2016, vacancy 

was down to 13.7%, a decrease from 11.0% in the 1

st Quarter. There were 1,050,228 square feet 

of vacant Class A sublease space at the end of the 2nd Quarter, as compared to 1,021,702 in the 

1

st Quarter, 855,813 in the 4th Quarter 2015, and 859,952 in the 3rd Quarter. The Class A sector 

Net Quoted

Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates

2016 2q 990 182,082,939 23,948,576 24,998,804 13.7% 621,031 2 124,466 11 1,810,019 $35.43 

2016 1q 988 181,958,473 24,473,667 25,495,369 14.0% 242,237 2 355,011 12 1,834,485 $35.11 

2015 4q 986 181,603,462 24,526,782 25,382,595 14.0% 916,872 5 604,081 12 1,991,792 $34.38 

2015 3q 981 180,999,381 24,835,434 25,695,386 14.2% (274,710) 0 0 17 2,595,873 $34.21 

2015 2q 981 180,999,381 24,544,518 25,420,676 14.0% 1,054,731 3 365,036 17 2,595,873 $34.01 

2015 1q 978 180,634,345 25,322,702 26,110,371 14.5% 349,244 2 163,413 18 2,578,285 $33.13 

2014 977 180,580,932 25,690,195 26,406,202 14.6% 1,833,715 2 130,697 15 1,837,676 $33.34 

2013 977 180,716,795 27,444,052 28,375,780 15.7% 1,016,235 4 1,043,610 5 353,829 $32.20 

2012 974 179,789,573 27,451,314 28,464,793 15.8% 1,464,235 8 496,799 6 1,174,307 $31.28 

2011 967 179,452,774 28,259,898 29,592,229 16.5% (247,399) 5 375,271 10 1,442,464 $31.09 

2010 962 179,077,503 26,948,767 28,969,559 16.2% (1,550,110) 8 796,882 10 942,848 $30.49 

2009 954 178,280,621 23,755,794 26,622,567 14.9% (3,517,393) 16 2,748,246 14 1,490,571 $31.98 

2008 939 175,779,275 18,217,187 20,603,828 11.7% (2,363,819) 15 1,319,200 24 3,702,077 $35.23 

2007 924 174,460,075 15,133,554 16,920,809 9.7% 942,689 13 1,441,183 22 3,272,627 $34.50 

2006 913 173,498,279 15,467,586 16,901,702 9.7% 3,272,323 10 1,715,614 22 2,270,965 $29.88 

2005 904 171,823,452 16,891,687 18,499,198 10.8% 6,392,786 8 1,140,241 10 1,794,964 $27.35 

Source: CoStar Property®

LOS ANGELES CLASS A MARKET STATISTICS - Mid Year 2016

Existing Inventory Vacancy Deliveries UC Inventory YTD Net YTD Under Quoted

Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates

Antelope Valley 2 136,017 36,787 36,787 27.0% 0 0 0 $28.59 

Burbank/Glendale/Pasadena 143 23,483,423 2,917,338 2,987,926 12.7% 14,387 0 0 $34.05 

Downtown Los Angeles 74 37,269,330 4,919,965 5,143,845 13.8% 651,708 0 356,141 $38.54 

Mid-Cities 11 1,296,919 240,501 267,142 20.6% (11,262) 0 0 $28.91 

Mid-Wilshire 104 19,081,538 3,376,077 3,393,414 17.8% 220,815 419,011 649,601 $36.09 

San Fernando Valley 122 16,528,803 2,159,061 2,230,002 13.5% 162,276 0 117,978 $28.53 

San Gabriel Valley 34 4,076,874 364,225 367,538 9.0% (71,608) 0 0 $29.61 

Santa Clarita Valley 27 2,206,387 207,379 218,566 9.9% 20,096 0 0 $29.35 

South Bay 155 26,059,673 4,271,144 4,393,014 16.9% (50,302) 0 0 $27.60 

Southeast Los Angeles 14 1,582,654 151,875 151,875 9.6% (26,946) 0 0 $25.51 

Ventura North 5 563,243 31,105 31,105 5.5% 14,540 0 0 $20.81 

Ventura South 46 4,676,314 653,635 692,195 14.8% (93,589) 60,466 60,467 $30.51 

West Los Angeles 253 45,121,764 4,619,484 5,085,395 11.3% 33,153 0 625,832 $50.73 

Totals 990 182,082,939 23,948,576 24,998,804 13.7% 863,268 479,477 1,810,019 $35.43 

Source: CoStar Property®

Existing Inventory Vacancy

LOS ANGELES CLASS A MARKET STATISTICS - Mid Year 2015
TDG 2015 022 39

had an average annual quoted rental rate of $35.43 per square foot at the end of the 2nd

Quarter, an increase from $35.11 in the 1st Quarter.

CLASS B OFFICE SPACE

According to CoStar, Class B office buildings are deemed “a more speculative investment” and

lease and sell for lower levels as they lack the prestige of Class A properties and must rely on 

lower prices to attract tenants and investors. Architectural design tends to be utilitarian and 

ordinary, and quality, mechanical systems, maintenance, management, and tenants tend to be 

average to very good. The following tables provide pertinent statistics for Class B office space in 

the Los Angeles region: 

There were a total of 161,513,787 square feet in 5,699 Class B buildings in the Los Angeles 

region at the end of the 2nd Quarter. There was positive net absorption of 525,154 square feet 

during the quarter, up from positive 454,997 in the 1

st Quarter, positive 672,588 in the 4th

Quarter 2015, and negative (108,896) in the 3rd Quarter. Vacancy in Class B projects has declined 

steadily over the past four quarters, ending the 2nd Quarter at 10.6%, down from 11.0% in the 1

st

Quarter, 11.3% in the 4th Quarter 2015, and 11.6% in the 3rd Quarter. The amount of vacant 

Net Quoted

Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates

2016 2q 5,699 161,513,787 16,814,853 17,092,188 10.6% 525,154 4 35,242 35 1,527,144 $29.61 

2016 1q 5,697 161,652,002 17,383,622 17,755,557 11.0% 454,997 5 116,064 37 1,483,386 $29.55 

2015 4q 5,693 161,777,980 18,051,092 18,336,532 11.3% 672,588 10 253,415 38 1,508,843 $29.07 

2015 3q 5,684 161,548,228 18,475,060 18,779,368 11.6% (108,896) 19 271,406 38 1,617,496 $28.05 

2015 2q 5,665 161,276,822 18,124,024 18,399,066 11.4% 701,975 7 273,266 45 1,396,739 $27.71 

2015 1q 5,660 161,208,735 18,768,506 19,032,954 11.8% (569,333) 8 202,944 43 1,493,601 $27.30 

2014 5,653 161,045,767 18,078,004 18,300,653 11.4% 1,065,448 26 745,266 44 1,585,950 $27.35 

2013 5,636 160,928,174 18,852,805 19,248,508 12.0% 414,979 40 515,047 30 1,420,685 $26.42 

2012 5,601 160,752,271 19,157,141 19,487,584 12.1% 832,111 27 966,787 34 653,170 $25.32 

2011 5,580 160,172,485 19,180,221 19,739,909 12.3% 163,666 26 480,070 29 982,161 $24.51 

2010 5,560 159,998,397 19,203,132 19,729,487 12.3% (575,970) 34 520,894 26 771,754 $24.50 

2009 5,529 159,839,354 18,162,667 18,994,474 11.9% (1,908,516) 101 1,066,463 34 533,520 $25.18 

2008 5,431 159,039,956 15,105,390 16,286,560 10.2% (3,026,194) 173 2,163,767 99 1,136,365 $27.47 

2007 5,262 157,205,667 10,700,059 11,426,077 7.3% 376,051 89 1,317,571 186 2,196,776 $27.43 

2006 5,181 156,588,356 10,610,273 11,184,817 7.1% 1,647,567 65 1,197,196 107 1,389,661 $25.10 

2005 5,120 155,573,808 10,990,864 11,817,836 7.6% 2,979,429 57 995,002 61 1,157,213 $23.02 

Source: CoStar Property®

LOS ANGELES CLASS B MARKET STATISTICS - Mid Year 2016

Existing Inventory Vacancy Deliveries UC Inventory YT D N et YT D Under Quo ted

M arket # B lds T o tal R B A D irect SF T o tal SF Vac % A bso rptio n D eliveries C o nst SF R ates

Antelope Valley 171 2,394,299 385,210 385,210 16.1% 11,885 0 0 $21.71 

Burbank/Glendale/Pasadena 982 20,314,088 1,312,640 1,341,179 6.6% 254,386 47,452 231,440 $27.43 

Downtown Los Angeles 220 21,257,198 2,657,034 2,684,905 12.6% (12,785) 0 770,000 $32.25 

Mid-Cities 228 4,156,420 234,287 237,653 5.7% 6,218 0 0 $22.82 

Mid-Wilshire 430 12,613,666 1,248,368 1,278,172 10.1% 140,869 0 92,200 $34.46 

San Fernando Valley 485 12,873,419 1,090,960 1,116,931 8.7% 247,083 3,302 5,000 $25.50 

San Gabriel Valley 593 17,107,046 1,787,495 1,802,753 10.5% 143,427 0 74,487 $24.81 

Santa Clarita Valley 115 2,109,053 254,779 258,320 12.2% 28,711 0 0 $29.84 

South Bay 740 26,647,328 3,085,781 3,101,023 11.6% 400,153 74,152 190,842 $27.67 

Southeast Los Angeles 120 3,262,727 228,308 239,044 7.3% (48,182) 0 77,250 $21.49 

Ventura North 257 4,551,026 800,023 800,023 17.6% (22,539) 0 0 $20.87 

Ventura South 509 13,893,169 1,790,517 1,828,669 13.2% (115,713) 0 13,265 $25.64 

West Los Angeles 849 20,334,348 1,939,451 2,018,306 9.9% (53,362) 26,400 72,660 $47.74 

Totals 5,699 161,513,787 16,814,853 17,092,188 10.6% 980,151 151,306 1,527,144 $29.61 

Source: CoStar Property®

Existing Invento ry Vacancy

LOS ANGELES CLASS B MARKET STATISTICS - Mid Year 2016
TDG 2015 022 40

sublease space at the end of the 2nd Quarter totaled 277,335 square feet, down from 371,935 in 

the 1st Quarter. Sublease vacancy totaled 285,440 in the 4th Quarter 2015, and 304,308 in the 3rd

Quarter. At the end of the 2nd Quarter, the average Class B annual rental rate was $29.61 per 

square foot, up slightly from $29.55 in the 1st Quarter. 

CLASS C OFFICE SPACE

According to CoStar, Class C office buildings are deemed as having “no frills” and lease and sell 

for lower levels than other buildings in the same market. There is very little, if any, attention 

paid to architectural design and quality, mechanical systems, maintenance, management, and 

tenants tend to be below average. The following table provides pertinent statistics for Class C 

office space in the Los Angeles region:

The Los Angeles region had 87,437,835 square feet in 11,324 Class C buildings at the end of the 

2

nd Quarter. The Class C office sector posted a positive net absorption of 134,231 square feet 

during the quarter, up from negative (8,782) in the 1

st Quarter. Vacancy in Class C projects was 

4.3% at the end of the 2nd Quarter, down slightly from 4.4% in the 1st Quarter and 4th Quarter 

2015, and down from 4.6% in the 3rd Quarter. Class C projects experienced a decrease in vacant 

sublease space, going from 73,506 to 68,524 square feet between the 1st and 2

nd Quarters. Class

C space had an average annual rate of $26.60 per square foot at the end of the 2nd Quarter, up 

from $25.84 in the 1st Quarter.

SUBJECT SUBMARKET – SANTA MONICA

The subject property is a Class C flex/light industrial building utilized as an educational facility 

within the Santa Monica submarket. According to CoStar, there were 278 Class C office buildings 

in this submarket as of the end of the 2nd Quarter. The following table provides summary 

statistics for in the Los Angeles region separated by submarket:

YT D N et YT D Under Quo ted

M arket # B lds T o tal R B A D irect SF T o tal SF Vac % A bso rptio n D eliveries C o nst SF R ates

Antelope Valley 195 1,592,068 131,907 131,907 8.3% (12,567) 0 0 $17.56 

Burbank/Glendale/Pasadena 1,953 12,094,933 356,585 363,972 3.0% (17,094) 0 0 $25.98 

Downtown Los Angeles 414 11,346,219 480,372 496,572 4.4% (99,974) 0 0 $24.25 

Mid-Cities 810 5,080,423 182,513 200,852 4.0% 13,410 3,504 0 $21.29 

Mid-Wilshire 1,081 8,757,016 408,515 413,353 4.7% 37,979 0 0 $37.22 

San Fernando Valley 875 6,400,240 258,801 258,801 4.0% 35,711 0 0 $22.77 

San Gabriel Valley 1,392 9,337,973 387,580 387,580 4.2% 91,167 0 0 $19.14 

Santa Clarita Valley 73 509,181 22,524 22,524 4.4% 9,853 0 0 $27.42 

South Bay 1,616 11,838,417 654,522 655,263 5.5% (14,021) 0 0 $23.76 

Southeast Los Angeles 483 3,818,803 189,929 191,629 5.0% 23,347 0 0 $19.14 

Ventura North 558 3,163,513 157,159 157,659 5.0% (19,651) 0 0 $21.80 

Ventura South 449 3,260,627 196,878 197,646 6.1% 40,620 0 0 $21.57 

West Los Angeles 1,425 10,238,422 248,159 266,210 2.6% 36,669 0 0 $41.26 

Totals 11,324 87,437,835 3,675,444 3,743,968 4.3% 125,449 3,504 0 $26.60 

Source: CoStar Property®

Existing Invento ry Vacancy

LOS ANGELES CLASS C MARKET STATISTICS - Mid Year 2016
TDG 2015 022 41

YTD Net YTD Under Quoted

Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates

190th Street Corrido. 9 246,961 0 0 0.0% 0 0 0 $0.00 

Antelope Valley 195 1,592,068 131,907 131,907 8.3% (12,567) 0 0 $17.56 

Beach Cities/Palos V. 341 2,336,184 66,265 66,265 2.8% (518) 0 0 $27.63 

Beverly Hills 163 1,329,160 30,822 34,059 2.6% 29,933 0 0 $45.70 

Brentwood 29 331,764 4,614 5,614 1.7% 5,744 0 0 $34.99 

Burbank 322 2,012,693 130,950 130,950 6.5% (43,260) 0 0 $24.80 

Calabasas/Westlake V. 44 305,370 14,212 14,212 4.7% 8,076 0 0 $27.28 

Camarillo/Point Mugu 68 584,613 30,130 30,898 5.3% 21,151 0 0 $16.10 

Century City 6 45,188 0 0 0.0% 0 0 0 $0.00 

Culver City 307 1,920,516 73,927 73,927 3.8% 18,766 0 0 $28.38 

Eastern SFV 441 2,738,557 88,811 88,811 3.2% 23,371 0 0 $21.39 

Eastern SGV 860 5,758,031 218,937 218,937 3.8% 51,276 0 0 $17.98 

El Segundo 67 945,182 45,412 45,412 4.8% 4,601 0 0 $28.89 

Encino 26 223,177 12,690 12,690 5.7% 10,100 0 0 $27.28 

Fillmore/NE County 30 68,984 0 0 0.0% 0 0 0 $0.00 

Glendale 429 2,449,118 26,794 32,066 1.3% (4,821) 0 0 $22.07 

Greater Downtown 414 11,346,219 480,372 496,572 4.4% (99,974) 0 0 $24.25 

Hawthorne/Gardena 241 1,431,781 114,571 114,571 8.0% (1,234) 0 0 $17.77 

Hollywood/Silver Lak. 532 4,236,544 181,358 185,338 4.4% 41,136 0 0 $37.25 

LAX 204 1,159,120 86,160 86,160 7.4% (9,022) 0 0 $24.30 

Long Beach: Downtown 197 1,243,817 19,706 20,447 1.6% 10,325 0 0 $23.21 

Long Beach: Suburban 296 2,330,993 126,631 126,631 5.4% (4,731) 0 0 $21.89 

Marina Del Rey/Venic. 230 1,477,108 52,168 52,168 3.5% (13,689) 0 0 $43.33 

Mid-Cities 810 5,080,423 182,513 200,852 4.0% 13,410 3,504 0 $21.29 

Mid-Wilshire 180 2,087,094 91,406 91,406 4.4% (7,770) 0 0 $22.64 

Miracle Mile 62 289,441 16,220 16,220 5.6% (530) 0 0 $35.63 

Moorpark/Simi Valley 94 833,891 42,238 42,238 5.1% (4,752) 0 0 $22.50 

North Hollywood 238 1,462,913 24,482 26,597 1.8% (11,122) 0 0 $21.85 

Ojai/NW County 85 292,933 13,253 13,253 4.5% 3,262 0 0 $37.29 

Olympic Corridor 56 323,803 4,712 4,712 1.5% 6,120 0 0 $33.84 

Oxnard/Port Hueneme 221 1,106,985 74,078 74,078 6.7% 1,975 0 0 $17.05 

Pacific Palisades/Ma. 23 180,067 2,300 2,300 1.3% 100 0 0 $53.10 

Park Mile 63 360,044 18,754 18,754 5.2% (400) 0 0 $26.67 

Pasadena/Arcadia/Mon. 762 5,273,331 153,257 153,257 2.9% 37,017 0 0 $27.32 

Santa Clarita Valley 73 509,181 22,524 22,524 4.4% 9,853 0 0 $27.42 

Santa Monica 278 2,369,707 31,803 44,745 1.9% (17,948) 0 0 $53.66 

Santa Monica Mountai. 27 223,296 2,888 3,760 1.7% 768 0 0 $38.81 

Santa Paula/Somis 55 173,295 1,200 1,200 0.7% 5,425 0 0 $15.09 

Sherman Oaks 63 409,229 9,551 9,551 2.3% 1,771 0 0 $27.14 

Southeast Los Angele. 483 3,818,803 189,929 191,629 5.0% 23,347 0 0 $19.14 

Studio/Universal Cit. 202 896,878 21,102 21,102 2.4% 5,092 0 0 $27.09 

Tarzana 32 398,334 6,778 6,778 1.7% (2,873) 0 0 $25.28 

Thousand Oaks/SE Cou. 116 1,263,659 78,458 78,458 6.2% 9,418 0 0 $25.29 

Torrance 261 2,144,379 195,777 195,777 9.1% (13,442) 0 0 $24.91 

Ventura 294 1,794,410 100,468 100,968 5.6% (23,586) 0 0 $21.63 

West Hollywood 244 1,783,893 100,777 101,635 5.7% 5,543 0 0 $58.68 

West Los Angeles 213 1,167,188 32,835 32,835 2.8% 5,316 0 0 $29.18 

Western SFV 221 1,520,122 56,867 56,867 3.7% (13,687) 0 0 $19.55 

Western SGV 532 3,579,942 168,643 168,643 4.7% 39,891 0 0 $21.28 

Westwood 93 870,625 12,090 12,090 1.4% 1,559 0 0 $28.89 

Woodland Hills/Warne. 92 1,110,821 84,104 84,104 7.6% 17,029 0 0 $26.75 

Totals 11,324 87,437,835 3,675,444 3,743,968 4.3% 125,449 3,504 0 $26.60 

Source: CoStar Property®

Existing Inventory Vacancy

LOS ANGELES CLASS C SUBMARKET STATISTICS - Mid Year 2016
TDG 2015 022 42

ABSORPTION

CoStar’s survey of the Santa Monica submarket indicated a total of 44,745 square feet available 

for lease as of the 2nd Quarter. Net absorption within the submarket was negative (17,948) 

square feet at the end of the 2nd Quarter, however with an overall vacancy rate of 1.9% it is 

evident demand is very strong, and suggests this space will be reabsorbed in the near term. 

With very limited inventory, it is likely absorption within this submarket will undulate between 

negative and positive totals in the near to mid-term, although these fluctuations will likely be 

relatively nominal with little bearing on overall vacancy.

VACANCY AND RENTAL RATES

According to CoStar, the 278 office buildings in the Santa Monica submarket had a vacancy rate 

of 1.9% at the end of the 2nd Quarter, indicating a high demand and stable market. Annual rental 

rates averaged $53.66 per square foot, the highest Class C office rates in the region. 

A market survey indicated monthly rental rates (both contract and asking) ranging from $2.10 to 

$6.00 per square foot. This wide range in rates reflects a wide range of property condition and 

types with the lower end representing older office and/or flex/industrial buildings with deferred 

maintenance and limited interior improvements. The upper end of the range is indicative of 

higher end creative office space, typically closer to the beach areas. The strong market has put 

pressure on tenants to find affordable space, and thus many are seeking opportunities to 

repurpose older flex/industrial spaces into creative office space. Much of the demand is being 

driven by the high tech and entertainment industries which have demonstrated a strong 

appetite for the creative office spaces prevalent in West Los Angeles and the South Bay. One 

broker active in this market discussed the rising rental rates in the submarket noting that many 

venture capital backed high tech startups in the area have not been the most price conscious 

space consumers. However, the broker also noted that these consumers are recently becoming 

more conscious of lease rates as the rising rates are accelerating their funding burn rates. The 

broker has recently begun to see slightly longer marketing times, but does not anticipate 

significant changes in vacancy or lease rates in the near term. Other notable trends in the 

market include a higher prevalence of triple net (NNN) expense terms in recent years resulting 

in higher NOIs for landlords, reduced concessions, and many tenants funding their own TIs. All 

of these are indications of an owner driven market, and this is expected to remain so at least in 

the near term.

CONCLUSION

The subject property is an existing flex/light industrial building utilized as an educational facility 

with a mixture of office and classroom uses therein, and consists of 25,086 square feet of gross 

building area (GBA) including 8,094 square feet of basement area. As of the date of value, it was 

100% occupied. The nature of the subject’s improvements lends itself to being competitive 

among low end creative office spaces as well as flex/industrial spaces within its relevant market 

area.
TDG 2015 022 43

The CoStar Office Report is based on CoStar Group’s database of existing and under construction office buildings (including office, 

office condominium, office loft, office medical, all classes and all sizes, and both multi- and single-tenant renter and owner occupied 

buildings) in the Los Angeles market. To obtain a copy of their informative report, visit www.costar.com.
TDG 2015 022 44

PROPERTY DESCRIPTION

SITE

LOCATION: The subject is located at 2800 Airport Avenue, Santa Monica, 

California. This site has average exposure along a two-lane road 

between 23rd Street and Bundy Drive.

CURRENT USE: Santa Monica College satellite campus

SITE SIZE: Total: 2.17+ acres; 94,380 square feet

*NOTE: Land area is based on lease documents provided by the 

client which specify portions of the airport parcels allocated to 

support lessees’ use of the subject buildings as an educational 

facility.

The entire site is usable

SHAPE: The site is irregular in shape

FRONTAGE / ACCESS: The subject property has Average access with frontage as follows:

 Airport Avenue: 640+ feet

VISIBILITY: Average

TOPOGRAPHY: The subject site is mostly level and usable.

SOIL CONDITIONS: The soil conditions observed at the subject appear to be typical of 

the region and adequate to support development.

HAZARDOUS 

SUBSTANCES:

We did not observe any evidence of toxic or hazardous substances 

during inspection of the site, however we have no expertise in 

evaluating toxic or hazardous site conditions and cannot make 

substantiated remarks in this field of study. The subject is not listed 

as a hazardous site per the Hazardous Waste and Substances Sites 

List compiled by the California Environmental Protection Agency. 

The Doré Group was not provided with a Phase I Environmental 

Assessment Report or any other reports addressing potentially 

hazardous materials on or near the subject property. No warranty is 

made as to the condition of the property relative to hazardous 

chemicals or toxic wastes. The client is urged to retain an expert in 
TDG 2015 022 45

this field if the existence of such materials is suspected. This analysis 

was based on the assumption that no hazardous chemical 

contamination of any kind exists at the subject land.

Site Improvements:  City Street Lights

 Concrete Sidewalks

 Concrete Curbs

 The landscaping consists of concrete paths, small lawn areas, 

small shrubs and mature trees. 

UTILITIES: Electricity: Southern California Edison

Sewer: City sewer

Water: City water

Natural Gas: SoCal Gas

Adequacy: The subject's utilities are typical and adequate for the 

market area.

Flood Zone: The subject is located in an area mapped by the Federal Emergency 

Management Agency (FEMA). The subject is located in FEMA flood 

zone X, which is not classified as a flood hazard area.

FEMA Map Number: 06037C-1590F

FEMA Map Date: September 26, 2008

The subject is not in a flood zone. Flood zone X is identified with 

areas that have a corresponding one percent chance of an annual 

flood event. Flood insurance is not mandatory, but available for 

purchase. 

ENVIRONMENTAL 

ISSUES:

There are no known adverse environmental conditions on the 

subject site. Please reference Limiting Conditions and Assumptions.

ENCUMBRANCE / 

EASEMENTS:

There no known adverse encumbrances or easements. We have not 

reviewed the preliminary title report. However, we noted upon 

inspection that there were easements for utility access. Please 

reference Limiting Conditions and Assumptions.

SITE COMMENTS: This site has average exposure and access from its primary and 

secondary roads. The parcel is of adequate size and shape to 

support a variety of commercial, residential and mixed uses. 
TDG 2015 022 46

LEASE SUMMARY

The lease between the Santa Monica Community College District (Lessee) and the City of Santa 

Monica (Lessor) originally commenced on July 1, 1988 with a 10-year term. With first right of 

refusal granted to the Lessee by the Lessor, an additional 10-year term was signed by the Lessee 

in 1998, and in 2008 a 7 year extension was signed which expired June 30, 2015. Currently the 

subject lease is assumed to be on a month-to-month basis. According to the Santa Monica City 

Council Airport Leasing and Licensing Policy, Section B: Terms and Conditions, “Lease terms may 

be month-to-month or longer. However, no lease shall have a term that goes beyond June 30, 

2018.” Since no lease documents citing a lease term beyond June 30, 2015 were provided by the 

client, it is assumed the lease agreement defaulted to a month-to-month basis upon expiration 

of the July 1, 2008 to June 30, 2015 term. We have provided an abstract of the lease (terms and 

conditions) as per the Master Lease Agreement which are as follows:

Landlord: City of Santa Monica

Tenant: Santa Monica Community College District and the Board of Trustees

Commencement: July 1, 1988

Expiration: June 30, 2015*

*Note: The subject has remained in use by the Santa Monica Community 

College District since the expiration of the most recent signed lease extension. 

As per the Santa Monica City Council Airport Leasing and Licensing Policy, it is 

assumed the subject is currently leased on a month-to-month basis upon 

expiration of the most recent lease extension term of July 1, 2008 to June 30, 

2015.

Time Remaining: Unknown (month-to-month)

Duration: Initial term was 10 years with first right of refusal granted to the tenant upon 

expiration of any given lease term.

Current Rent: As of the date of value, the base rent reported was $385,395 annually, or 

$32,116.25 monthly. This equates to approximately $1.28 per square foot of 

gross building area per month, or approximately $0.34 per square foot of 

gross site area per month.

Annual 

Escalations:

According to the Master Lease Agreement, “The Base Rent shall be adjusted 

annually by any increases in the Consumer Price Index (All Urban Consumers: 

Los Angeles-Anaheim-Long Beach).”
TDG 2015 022 47

Expenses: Triple Net Lease (NNN) - All expenses are paid by Tenant (Lessee), including 

real estate taxes, insurance, utilities, and maintenance for the leased 

premises during the term of the lease.

Improvements: The tenant has the right to maintain, remodel, or construct improvements on 

the leased land. However, any such improvements must comply with policies 

established in the Master Lease Agreement, as well as FAA Part 77 

notification and review policies.

Comments: The use of the leased premises is subject to both Santa Monica and FAA 

airport operation regulations, and the lease itself is subordinate to “the 

provisions and requirements of any existing or future agreement between 

Lessor and the United States, relative to the development, operation, or 

maintenance of the Airport”, as per Section 20 of the Master Lease 

Agreement.
TDG 2015 022 48

PARCEL MAP (APN 4272-025-901)
TDG 2015 022 49

PARCEL MAP (APN 4272-026-902)
TDG 2015 022 50

2800 AIRPORT AVENUE PLOT PLAN
TDG 2015 022 51

ZONING

LAND USE CONTROLS

ZONING CODE: Santa Monica Airport (Not Zoned)

ZONING DESCRIPTION: N/A

CURRENT USE LEGALLY 

CONFORMING:

Current use conforms to allowable uses stipulated within the 

Master Lease Agreement and those outlined in the Santa Monica 

City Council Airport Leasing and Licensing Policy.

ZONING CHANGE LIKELY: A zoning change is not likely in the foreseeable future.

ZONING COMMENTS: As of the date of this analysis, there is no zoning pertaining to the 

land underlying the subject property. As such, there is no adopted 

municipal regulatory framework which defines allowable uses or 

development standards of the land which comprises the Santa 

Monica Airport including the non-aviation portion of the property 

where the subject buildings are situated. Due to the historical and 

current use of the land as a municipal airport, any new 

development and/or alterations to existing structures on Airport 

land are subject to compliance with Federal Aviation Administration 

(FAA) regulations, more specifically, Federal Regulation Title 14 Part 

77 which establishes Federal standards for “Safe, Efficient Use and 

Preservation of the Navigable Airspace”.12 In sum, Part 77 

establishes what constitute obstacles to navigable airspace on and 

around Airport property, height restrictions for permanent and 

mobile structures thereon, applicable impact areas, and protocols 

for notification and review of any proposed construction or 

alterations to Airport property. A comprehensive analysis of all FAA 

regulations which may affect allowable uses on Airport land, new 

construction or alterations of existing structures on Airport 

property, including Part 77, is beyond the scope of this analysis. For 

purposes of this assignment, we defer to the Santa Monica City 

Council Airport Leasing and Licensing Policy, as well as the subject’s 

master lease, for guidance on applicable FAA regulations as they 

pertain to the non-aviation portions of the Santa Monica Airport,

allowable uses thereon, and height restrictions relevant to the 

subject property.

 

12

Reference, By. "ECFR — Code of Federal Regulations." ECFR — Code of Federal Regulations. N.p., n.d. Web. 06 Sept. 2016.
TDG 2015 022 52

ZONING COMMENTS

(CONTINUED):

According to Section A of the Santa Monica City Council Airport 

Leasing and Licensing Policy, “authorized uses include: (a) low 

intensity uses that are compatible with surrounding uses, serve the 

adjacent community, and are consistent with the City’s 

environmental goals and policies. Examples of uses in category (a) 

include, but are not limited to: parks and open space, arts/cultural, 

creative space, professional theaters, museums, artist studios, art 

galleries, photograph studios, uses customary or incidental to the 

production or distribution of motion pictures, educational facilities, 

professional and general offices, public or private schools existing 

prior to September of 1984, warehouses, self-storage/public miniwarehouses, and restaurants with 500 square feet of floor area or 

less; and b) uses required by law.” Regarding building height and 

alteration guidelines relevant to the subject buildings, the subject’s 

master lease states “Lessee agrees to comply with the notification 

and review requirements covered in Part 77 of the Federal Aviation 

Regulations in the event of any planned modification or alteration 

of any present or future building or structure situated on the leased 

Property. Lessee, by accepting this Lease, expressly agrees for itself, 

its successors and assigns that it will not erect nor permit the 

erection of any structure or object, nor permit the growth of any 

tree on the land leased hereunder above the mean sea level 

elevation 208 feet.” According to Santa Monica Airport’s website, 

the Airport’s field elevation is 177 feet above mean sea level 

(MSL)13; as such, it is evident that any structure on the leased 

premises cannot exceed a height of 31 feet.

Further complicating the discussion regarding use of the Santa 

Monica Airport land is a lengthy legal battle between the City and 

the FAA regarding the City’s legal autonomy in regulating, 

mitigating or eliminating air traffic operations on the property. 

 

13

"SMO: Santa Monica Municipal Airport." SMO: Santa Monica Municipal Airport. N.p., n.d. Web. 06 Sept. 2016.
TDG 2015 022 53

ZONING COMMENTS 

(CONTINUED):

At the core of this debate are questions of whether or not the City 

has the authority to curtail air traffic volume through noise and/or 

emissions ordinances, increase aircraft usage fees, further restrict 

the types of aircraft which utilize the Airport, and ultimately 

whether the City’s fee ownership of the land underlying the Airport 

grants sufficient authority to close Airport operations entirely and 

redevelop the land to uses more amenable to and compatible with 

the surrounding neighborhoods, particularly those residential in 

nature. Three current lawsuits are central to current and future 

uses of Santa Monica Airport land:

1) City of Santa Monica v FAA in the matter of title to the 

airport property. Case Number 2:13:CV:8046-JFW (VBWx)

2) Part 16 Grant Assurance Litigation Case Number 16-14-04

3) National Business Aviation Association Part 16

For further details regarding these court cases, refer to the City of 

Santa Monica website.

It is worth noting that the Santa Monica Airport is discussed in the 

City’s most recent General Plan document, the 2010 Land Use and 

Circulation Element (LUCE) adopted in 2010 and revised/updated in 

2015. However, no land use changes for the Airport and 

neighboring Business Park are proposed in the LUCE due to the 

above noted highly complex and litigious debate between the City 

of Santa Monica and the FAA regarding authority to regulate use of 

Airport land. While the City has undertaken the creation of a 

potential Airport/Business Park Specific Plan to guide future use and 

development of Airport land through a three-phase “Visioning 

Process”14, the City’s authority to enact such standards on Airport 

land remains in question. As such, the existing use of Airport land is 

effectively fixed in its current state, and future uses of Airport 

property are uncertain.

 

14

"Airport Documents and Studies." - SMO: Santa Monica Municipal Airport. N.p., n.d. Web. 06 Sept. 2016.
TDG 2015 022 54

ASSESSMENT AND TAXES

California taxation law requires a 1% of market value tax rate (plus additional assessments)

determined through individual communities’ bond indebtedness (Proposition 13). Actual 

assessments are typically based on the fair market value as determined by the most recent 

acquisition price. Future assessments are based upon the most recent acquisition price until 

additional improvements (land and/or homes) are constructed onsite or a subsequent change of 

ownership of the property or portions thereof. Subsequent annual tax increases are limited to a 

maximum of 2% per year. Disposition of the property, as of the date of appraisal, would place 

the subject under Proposition 13 guidelines. Recent trends in property taxation laws seem to be 

of similar nature with no immediate changes anticipated.

COMMENTS:

The parcels underlying the subject property (APNs 4272-025-901 and 4272-026-902) are part of 

the Santa Monica Airport, owned by the city of Santa Monica, and are tax exempt. Based on 

these parcels’ tax exempt status, no property taxes are levied against them.
TDG 2015 022 55

IMPROVEMENTS DESCRIPTION

SUMMARY

PROJECT: Santa Monica College – Airport Arts Campus

PROPERTY TYPE: Mixed Office and Industrial

OVERVIEW: A free-standing office building with basement and detached 

garage/workshop

GENERAL

BUILDING DESCRIPTION: One free-standing flex/industrial building with a basement that is 

used by a local community college as a satellite campus with 

classrooms and offices; one free-standing garage building that is 

utilized as a workshop and additional classroom space.

BUILDING CLASS: C – Reinforced Concrete, concrete tilt-up

CONSTRUCTION: Concrete

CONSTRUCTION 

QUALITY:

Average

YEAR BUILT: 1955±

RENOVATIONS: Unknown

EFFECTIVE AGE: 40 years

REMAINING USEFUL 

LIFE:

5 to 10 Years

CONDITION: Fair to Average

APPEAL / APPEARANCE: Average

GROSS BUILDING AREA: Number of Stories: 1.00

Gross Building Area: 25,086± square feet

*NOTE: The subject’s GBA was derived from documents supplied by 

the client. However, during the inspection, measurements were 

taken to confirm accuracy.
TDG 2015 022 56

BUILDING DESCRIPTION

FOUNDATION: Basement and Poured concrete slab

EXTERIOR: Stucco

WINDOWS: Metal Frame Fixed Casement and Single Hung

ROOF / COVER: Flat Roof / Tar and Felt, Low Pitch Metal Roof 

INTERIOR LAYOUT: Typical layout for educational facility

INTERIOR CONDITION: Fair to Average receiving periodic maintenance but with some signs 

of deferred maintenance

PROPERTY ANALYSIS

DESIGN & FUNCTIONAL 

UTILITY:

Adequate design and functional utility for an educational facility

DEFERRED 

MAINTENANCE:

No significant deferred maintenance noted, some minor instances 

of deferred maintenance noted.

COMMENTS: Overall, this building adequately serves as an educational facility. 

The basement was not accessible during this appraiser’s 

observation of the subject property, and thus was not viewed by the 

appraiser. Photos of the subject’s basement area were provided by 

the Client. Per Client, the basement is used for storage purposes 

only.
TDG 2015 022 57

SUBJECT PHOTOGRAPHS

Aerial View of Subject

Aerial View of Subject Neighborhood
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Exterior view – Front of Main Building

Exterior view – Front of Main Building
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Exterior View – NE Profile of Main Building

Exterior view – SW Profile of Ceramics Building
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Exterior View – NE Profile of Ceramics Building

Street view – looking NE along Airport Avenue
TDG 2015 022 61

Street view – looking SW along Airport Avenue

Typical Interior View – Main Building
TDG 2015 022 62

Typical Interior View – Shop Building

Typical Interior View – Shop Building
TDG 2015 022 63

Typical Interior View – Main Building Basement

Typical Interior View – Mechanicals in Main Building Basement
TDG 2015 022 64

HIGHEST AND BEST USE

Highest and best use may be defined as:

The reasonably probable use of property that results in the highest value.15 To be reasonably 

probable, a use must be:

1. Legally Permissible: What uses are permitted by zoning and other legal restrictions?

2. Physically Possible: To what use is the site physically adaptable?

3. Financially Feasible: Which possible and permissible use will produce any net return to 

the owner of the site?

4. Maximally Productive. Among the feasible uses which use will produce the highest net 

return, (i.e., the highest present worth)?

HIGHEST AND BEST USE OF THE SITE

LEGALLY PERMISSIBLE

As noted within the Zoning Comments of this analysis, the Santa Monica Airport land underlying 

the subject buildings is not zoned, and thus there is no adopted municipal regulatory framework 

which defines legal uses or development standards of this land beyond its current designation as 

a municipal airport. Furthermore, in light of contentious and prolonged legal proceedings 

between the city of Santa Monica and the FAA regarding the City’s autonomy in regulatory 

matters involving use of the Airport land, it is evident the City does not currently possess the 

legal sovereignty to utilize this land for anything other than a municipal airport. While nonaviation uses are allowed on certain portions of Airport land and within existing structures per 

agreement with the FAA16, these uses and structures must comply with requirements of the 

agreement and applicable FAA regulations. Within this context, legal uses of the Santa Monica 

Airport land as vacant are unknown, including those leased portions allocated in support of the 

subject buildings and their current use as an educational facility.

Given the current lack of zoning on the parcels which comprise the Airport land, possibilities for 

alternative uses to its current municipal airport use are unlimited, albeit entirely hypothetical 

and highly speculative as of the date of this analysis. Should the City prevail in its objective of 

shutting down the Airport, redevelopment of the land would likely compliment or reflect the 

surrounding area. Adjacent uses to the Airport on three sides are residential in nature (east, 

west and south) with the Santa Monica Business Park located immediately to the north; these 

areas are low to moderate density in character with primarily single family residential 

development and low-rise offices. However, any use of this land beyond its current use as a 

 

15 The Appraisal of Real Estate 14

th Edition, Page 332, (Chicago: Appraisal Institute, 2013).

16 https://www.smgov.net/uploadedFiles/Departments/Airport/About/1984_Agreement.pdf
TDG 2015 022 65

municipal airport, and those limited non-aviation uses allowable per agreement with the FAA, is 

only conceptual in nature and highly speculative.

PHYSICALLY POSSIBLE

The subject site is physically able to support various types of development considering available 

utilities and surrounding infrastructure. Based on its adequate size, terrain, shape, frontage, and 

depth, the subject’s site could potentially support a variety of low to moderate density 

alternative uses to its current municipal airport use.

FINANCIALLY FEASIBLE / MAXIMALLY PROFITABLE

The financial feasibility of the legally permissible and physically possible uses is dependent on 

many variables including available construction financing, construction costs and impact fees, 

affordable and available land at price levels appropriate in the market, and overall sufficient 

demand. However, in the unique instance of the subject property, the subject’s lack of zoning 

and the continuing legal debate regarding alternative uses of the land render the question of 

financially feasibility and maximally productive uses among the legally permissible and physically 

possible uses indeterminable.

HIGHEST AND BEST USE AS IMPROVED

In the analysis of the highest and best use as if improved, a determination is made as to the 

optimal use of the site and the improvements. The improvements must be analyzed to 

determine whether they should be expanded, renovated, converted, continued use, or 

demolished. 

LEGALLY PERMISSIBLE / PHYSICALLY POSSIBLE

As noted, the subject site is currently improved with two free-standing single-level buildings 

currently utilized as educational facilities. The subject’s usable site (2.17+ acres; 94,380 square 

feet) is legally and physically able to support the existing improvement. Currently, the 

agreement with the FAA and the Santa Monica City Council Leasing and Licensing Policy allow 

for this type of land use, and it is complimentary to surrounding neighborhood uses. Therefore, 

the existing improvement is considered legally permissible and physically possible. 

FINANCIALLY FEASIBLE / MAXIMALLY PROFITABLE

In addition to legal, physical and location considerations, analysis of the subject property "as 

improved" requires the treatment of alternative uses for the property. The five possible 

alternative treatments of the property are demolition, expansion, renovation, conversion, and

continued use "as is". 

Demolition and conversion were not considered viable alternative options as any new 

construction or modifications or alterations to existing structures are subject to FAA Part 77 

notification and review requirements and height restrictions. Further, given the uncertainty 
TDG 2015 022 66

surrounding future use of the Santa Monica Airport land, allocating substantial City funds 

towards significant capital improvements to non-aviation uses is considered entirely too 

speculative at this time to be considered a reasonable or likely alternative. Expansion and/or 

renovation were considered possible options given the subject’s current condition and low 

intensity of the existing development (0.27+ FAR). However, again due to the uncertainty 

surrounding the Airport’s future, substantial contributions of City funds towards significant 

capital improvements to non-aviation uses is considered too speculative at this time to be 

considered a reasonable or likely alternative. Furthermore, given the subject buildings’ age near 

the end of their economic lives, if the City were to prevail in its desire to cease airport 

operations and redevelop the Airport land, these structures would likely be demolished and 

replaced, and thus any expansions or renovations would likely have little to no contributory 

value under a different regulatory structure. As such, the maximally profitable use of the subject 

site as improved is considered continued use “as is” given the current regulatory structure, the 

highly speculative nature of future regulatory structures, profitable nature of the existing use, 

and minimal contributory value significant alterations to the existing structure would have in a 

different land use environment.

Of note, under the hypothetical condition that the subject’s allocated land of 94,380 square feet 

is a legal parcel separate from the Airport land, we researched recent land sales in similar areas 

surrounding municipal and international airports to evaluate whether the subject’s value was 

greater as vacant or as improved. Holding all else the same (i.e. adjacent to an airport, 

associated low to moderate intensity development standards due primarily to height 

restrictions, and uses typical of airport proximate development) we analyzed the sales 

summarized on the following page. The sales analyzed were located within close proximity to 

Los Angeles International Airport (LAX) or John Wayne Airport in Orange County, and within 

zones which allow for a mixture of uses including but not limited to office, light industrial, select 

retail, and multi-family residential at low to moderate densities, typically 1 to 1.5 FARs or less. 

These sales support a value range of approximately $64 to $83 per square foot of land area. As 

will be shown later in this analysis, our income approach to value relating to the subject’s 

existing use as improved support a slightly higher value of $95 per square foot of land area.

The above analysis was conducted relative to current market conditions. A similar analysis was 

attempted for the 2010 time frame, however due to the economic recession at that time, there 

was an insufficient number of land or redevelopment sales within the relevant market area to 

perform a meaningful analysis.
TDG 2015 022 67

CONCLUSION

We considered multiple alternatives for the subject site as improved. Continued use “as is” with 

the existing use was deemed the best alternative, as an interim use until resolution is reached 

regarding the future use of the Airport land.

MOST PROBABLE BUYER

Taking into account all of the physical and investment characteristics of the subject property, 

the likely buyer is a governmental, or quasi-public agency that requires an owner/user profile or 

ancillary income potential for redeveloping, or repurposing the uses for creative office, artists’ 

studios, light industrial, research and development, educational or institutional, or some 

combination of these and/or similar uses.

Location Sale Date Sales Price/ Sq. Ft. $/Sq. Ft. Zoning Access Shape Topography

APN Document No. Financing Acres Land Use Exposure Site Utility Utilities

1 2030 E Maple Avenue 04/21/15 $15,250,000 197,288 $77.30 CO (Corporate Office) Good Rectangular Level

El Segundo 4.53 Office Good Good All Avail.

Los Angeles County, CA Document No. City of El Segundo

4138-019-001 20150442479 All cash

2 N Nash Street 07/22/14 $8,400,000 113,079 $74.28 CCSP (Corporate Campus) Good Rectangular Level

El Segundo 2.60 Master Planned Corporate Campus Good Good All Avail.

Los Angeles County, CA Document No. City of El Segundo

4138-030-094 20140752801 All cash

3 N Nash Street & Maple Ave 05/29/15 $15,147,000 226,089 $67.00 CCSP (Corporate Campus) Good Irregular Level

El Segundo 5.19 Master Planned Corporate Campus Good Good All Avail.

Los Angeles County, CA Document No. City of El Segundo

4138-030-012,013, 014, 015 20150632108 All cash

4 Maple Avenue 02/26/15 $7,245,000 112,833 $64.21 CCSP (Corporate Campus) Good Rectangular Level

El Segundo 2.59 Master Planned Corporate Campus Good Good All Avail.

Los Angeles County, CA Document No. 52.5% Down Pmt City of El Segundo

4138-030-092 20150207477 $3,441,503-Private Lender

5 101 Continental Blvd 08/06/14 $5,727,000 76,379 $74.98 199NCBSP Good Irregular Level

El Segundo 1.75 Hotel Good Average All Avail.

Los Angeles County, CA Document No. City of El Segundo

4138-007-068, 069 20140816011 All cash

6 Jamboree & Dupont Drive 04/30/15 $27,000,000 326,700 $82.64 5.1 IBC Multi-Use Good Rectangular Level

Irvine 7.50 Office/Mixed Use Good Good All Avail.

Orange County, CA Document No. City of Irvine

445-102-02 2015000225382 All cash

7 17150 Von Kaman Ave 01/15/15 $26,000,000 370,260 $70.22 5.1 IBC Multi-Use Good Rectangular Level

Irvine 8.50 Office/Mixed Use Good Good All Avail.

Orange County, CA Document No. 50% Down Pmt City of Irvine

435-035-06 2015000024512 $13,000,000-Conv

Maximum $27,000,000 370,260 $82.64

Minimum $5,727,000 76,379 $64.21

Average $14,967,000 203,233 $72.95

This site was vacant at the time of sale, and is located within the Corporate Campus Specific Plan near the LAX airport. Development plans for the site area unknown; overall FAR for the campus at buildout is 0.99 per zoning documents. Allowable uses are primarily office in nature, but some ancillary commercial uses are allowed. A prior transfer was noted on 5/8/13; multi-property sale, sale price 

unknown.

LAND COMPARABLES SUMMARY TABLE

2800 Airport Avenue, Santa Monica, California

This was a previously improved site purchased for land value. Per CoStar, this was a redevelopment opportunity as the buyer intends to redevelop the property into creative office space. CoStar 

reports the existing structure was demolished in June of 2015. No prior sales were noted within the preceding 36 months.

This site was vacant at the time of sale, and is located within the Corporate Campus Specific Plan near the LAX airport. Development plans for the site area unknown; overall FAR for the campus at buildout is 0.99 per zoning documents. Allowable uses are primarily office in nature, but some ancillary commercial uses are allowed. A prior transfer was noted on 5/8/13; multi-property sale, sale price 

unknown. CoStar also reports buyer agreed to construct a parking facility and deliver 100 spaces to the seller.

The site was previously a parking lot and part of a larger 10.58 parcel. The site represents its own specific plan within the municipal code "199 North Continental Boulevard Specific Plan". The proposed 

project for the site is a 71,005 square foot/152-room hotel; FAR is 0.92. The site is near LAX airport and adjacent to the Corporate Office Zone. No prior sales within 36 months noted.

This site was purchased by Fairfield Residential, and fully entitled for the development of 434 units, or approximately 51 units per acre. Sources at buyer's offices confirmed details regarding the 

transaction including entitlements.Site is located near John Wayne Airport and subject to FAA Part 77 height restrictions. No prior sales within 36 months noted.

This site was vacant at the time of sale, and is located within the Corporate Campus Specific Plan near the LAX airport.The Property was purchased by the Los Angeles Lakes (LAL Property, LLC) who 

intend to develop a 210,000 square foot complex which will include headquater offices and a team practice facility. No prior sales within 36 months were noted.

This site was previously imprved but the improvements had been demolished at the time of sale; site reported as mostly paved at time of sale. Property was sold fully entitled for a 550,000 square foot 

office building; FAR = 1.68. Site is located near John Wayne Airport and subject to FAA Part 77 height restrictions. No prior sales within 36 months noted.
TDG 2015 022 68

VALUATION METHODOLOGY

Three basic approaches may be used to arrive at an estimate of market value. They are:

1. The Cost Approach

2. The Income Approach

3. The Sales Comparison Approach

COST APPROACH

The Cost Approach is summarized as follows:

Cost New

- Depreciation

+ Land Value

= Value

INCOME APPROACH

The Income Approach converts the anticipated flow of future benefits (income) to a present 

value estimate through a capitalization and or a discounting process.

SALES COMPARISON APPROACH

The Sales Comparison Approach compares sales of similar properties with the subject property. 

Each comparable sale is adjusted for its inferior or superior characteristics. The values derived 

from the adjusted comparable sales form a range of value for the subject. By process of 

correlation and analysis, a final indicated value is derived.

FINAL RECONCILIATION

The appraisal process concludes with the final reconciliation of the values derived from the 

approaches applied for a single estimate of market value. Different properties require different 

means of analysis and lend themselves to one approach over the others. 

METHODOLOGIES APPLIED

The Cost Approach was considered and was not developed because the actual age of the 

subject's improvements makes physical depreciation difficult to accurately measure, and there 

are no legal parcels specifically and separately associated with the subject improvements. The 

Sales Comparison Approach was considered and was not developed because there was not 

sufficient data to develop a value estimate due to the unique nature of the subject's location on 

airport land, close proximity to frequent flight operations, as well as the additional FAA 

regulations which govern use of and any improvements or alterations to the subject buildings.

The Income Approach was considered and was developed because the subject is an income 

producing property and there is adequate data to develop a value estimate with this approach.
TDG 2015 022 69

INCOME APPROACH

The Income Approach to value is based on the present worth of the future rights to income. This 

type of analysis considers the property from an investor's point of view, the basic premise being 

that the amount and quality of the income stream are the basis for value of the property.

DIRECT CAPITALIZATION ANALYSIS

The steps involved in capitalizing the subject’s net operating income are as follows:

 Develop the subject’s Potential Gross Income (PGI) through analysis of the subject’s 

actual historic income and an analysis of competitive current market income rates.

 Estimate and deduct vacancy and collection losses to develop the Effective Gross 

Income (EGI).

 Develop and subtract operating expenses to derive the Net Operating Income (NOI).

 Develop the appropriate capitalization rate (Ro).

 Divide the net operating income by the capitalization rate for an estimate of value 

through the income approach.

MARKET RENT

CURRENT AND RETROSPECTIVE MARKET LEASE COMPARABLES

I have researched seven current leases and eight retrospective leases for stabilized market lease 

rates; these are documented on the following pages by a summary grid, location map, 

photographs, and an analysis grid. All comparables have been researched through numerous 

sources, inspected, and verified by a party to the transaction to the extent possible within the 

scope of this assignment. Where verification by a party to the transaction was not possible, 

asking rental rates were utilized with as much detail provided as available through data sources 

such as CoStar, Loopnet, and public records.

The time frames researched were as follows:

Current Leases - September 2014 through September 2016 (two years from the data of value)

Retrospective Leases – January 2009 through December 2010

Year by Year Trend Analysis – 2010 through 2016
TDG 2015 022 70

CURRENT LEASE COMPARABLE SUMMARY TABLE

Lease Type Term (Months)

Comp Address Year Built Leased Area (SF) Concessions Escalations Parking Ratio Use Lease Date $/SF/Mo

1 12421 W Olympic Blvd 1952 30,944 NNN 5 3 N/Av Flex Feb-2015 $1.80

Los Angeles, CA N/Av Annual Steps (VCA, Inc.)

2 2414 Wellesley Ave 1968 11,300 I G 3 6 1.77 Industrial Jul-2016 $1.95

Los Angeles, CA N/Av N/Av (N/Av)

3 2230 Michigan Ave 1921 9,000 NNN 2 4 6 Office Feb-2015 $2.10

Santa Monica, CA N/Av N/Av (N/Av)

4 1650 19th St 1956 6,000 MG 3 6 1.67 Flex Jan-2015 $2.50

Santa Monica, CA None 3% Annual (N/Av)

5 1545 17th Street 1964 18,000 NNN 120 N/Av Flex Jan-2015 $2.53

Santa Monica, CA $712,500 TIs 3% Annual (Kite Pharma)

6 12322 Exposition Blvd 1958 16,326 MG 3 6 N/Av Flex Oct-2014 $2.95

Los Angeles, CA N/Av N/Av (N/Av)

7 13469 Beach Ave 1964 4,290 NNN 6 0 1.17 Industrial Sep-2016 $3.00

Marina Del Rey, CA None 3% Annual (N/Av)

CURRENT LEASE COMPARABLES SUMMARY TABLE
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CURRENT LEASE COMPARABLE MAP
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CURRENT LEASE COMPARABLE PHOTOGRAPHS

Lease Comparable 1 Lease Comparable 2

Lease Comparable 3 Lease Comparable 4

Lease Comparable 5 Lease Comparable 6
TDG 2015 022 73

Lease Comparable 7

Note: CoStar photos were utilized for purposes of this report. The appraiser has driven past 

these properties and through the neighborhoods in which they are located.
TDG 2015 022 74

CURRENT MARKET RENT RECONCILIATION

The current market rent comparables selected for this analysis reflected higher quality 

flex/industrial spaces or lower quality office spaces, and located within the subject’s competitive 

market area. Overall, these comparables reflect or bracket the subject in terms of age, 

condition, quality, size, access and exposure. The subject’s parking ratio of 9 spaces per 1,000 

square feet of gross building area was not bracketed, however this is considered atypically high 

for the area; comparable 3 is considered reasonably similar to the subject in this respect as it 

too has a relatively high parking ratio of 6.

The subject’s actual current base rent lease rate of $32,116.25 per month, or $1.28 per square 

foot of gross building area (GBA), is considered below market based on the comparables 

analyzed herein. As shown below, comparables 1 through 7 have lease rates ranging from $1.80 

to $3.00 per square foot per month. Qualitative comparisons between the comparables and the 

subject property were made which resulted in ranking the subject just below the mid-point of 

the selected range. Comparables 1 and 2 were considered inferior in quality and/or condition, 

and both were inferior in terms of parking accommodations. Comparables 3 and 4 were 

considered overall similar to the subject reflecting similar quality and/or condition; comparable 

3 was the most similar to the subject in parking. Comparables 5, 6, and 7 were considered 

slightly superior or superior to the subject in overall quality and/or condition, although all were 

inferior in parking. Based on comparisons to the most similar and recent lease comparables 

available, a lease rate of $2.25 per square foot per month is considered reasonable and well 

supported by the comparables analyzed.

It is worth noting that there are currently 7 office spaces on the north side of the Airport 

property at 2772 – 2800 Donald Douglas Loop with asking lease rates of $3.25 to $3.95 per 

square foot per month. However, these spaces are improved as creative office spaces and are 

significantly superior to the subject in terms of quality and condition. As such, these spaces were 

not analyzed as comparables in this analysis.

The reconciled lease rate of $2.25 only applies to the combined above grade GBA of 16,992 

square feet. The subject’s basement area, totaling 8,094 square feet, is allocated a reduced 

monthly rate of $1.125 per square foot, or 50% of the current market lease rate for the above 

grade GBA. No lease rates specific to basement areas were found in our research as basements 

are not typical in California. The applied 50% discount recognizes the area’s utility for storage 

purposes, but reflects its lower quality finishes and limited overall utility.

A comparative analysis of the lease comparables is summarized below:

Rent/SF/Ret.

No. Comparable Status Lease Type Square Feet Gross Comparison

1 12421 W Olympic Blvd Lease NNN 30,944 $1.80 Inferior

2 2414 Wellesley Ave Lease I G 11,300 $1.95 Inferior

3 2230 Michigan Ave Lease NNN 9,000 $2.10 Similar

-- Subject Lease NNN 25,086 $2.25 --

4 1650 19th St Lease MG 6,000 $2.50 Similar

5 1545 17th Street Lease NNN 18,000 $2.53 Sl. Superior

6 12322 Exposition Blvd Lease MG 16,326 $2.95 Superior

7 13469 Beach Ave Lease NNN 4,290 $3.00 Superior

CURRENT LEASE COMPARABLE RANKING
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RETROSPECTIVE LEASE COMPARABLE SUMMARY TABLE

Lease Type Term (Months)

Comp Address Year Built Leased Area (SF) Concessions Escalations Parking Ratio Use Lease Date $/SF/Mo

1 4112 Del Rey Ave 1963 11,037 MG 6 0 1.99 Industrial Oct-2010 $1.25

Marina Del Rey, CA 2 mos Free Rent N/Av (N/Av)

2 4130 Del Rey Ave 1957 10,937 MG 6 4 2 Industrial Jul-2010 $1.25

Marina Del Rey, CA 2 mos Free Rent N/Av (N/Av)

3 1815 Pontius Ave 1956 5,339 N/Av 6 0 1.12 Flex Apr-2009 $1.35

Los Angeles, CA 1 mo Free Rent 5% Annual (SCLA/Golf)

4 2211 Michigan Ave 1970 44,642 NNN 120 2.24 Flex/Medical Mar-2010 $1.45

Santa Monica, CA 2 mos Free Rent N/Av (Santa Monica Hospital, Inc.)

5 1909-1913 Centinela Ave 1952 7,542 NNN 8 9 1.64 Industrial Jul-2010 $1.50

Santa Monica, CA 4 mos Free Rent 3.5% Annual (Tatum Construction)

6 12210 Nebraska Ave 1950 5,042 NNN 6 0 2.23 Industrial Mar-2010 $1.55

Los Angeles, CA 2 mos Free Rent N/Av (N/Av)

7 1740 Stanford Street 1957 18,442 NNN 6 0 1.63 Industrial Oct-2010 $1.69

Santa Monica, CA 2 mos Free Rent N/Av (N/Av)

8 2105 Colorado Ave 1946 17,251 NNN 8 4 2.90 Flex Jan-2010 $2.00

Santa Monica, CA 2 mos Free Rent N/Av (Agensys)

RETROSPECTIVE LEASE COMPARABLES SUMMARY TABLE
TDG 2015 022 76

RETROSPECTIVE LEASE COMPARABLE MAP
TDG 2015 022 77

RETROSPECTIVE LEASE COMPARABLE PHOTOGRAPHS

Lease Comparable 1 Lease Comparable 2

Lease Comparable 3 Lease Comparable 4

Lease Comparable 5 Lease Comparable 6
TDG 2015 022 78

Lease Comparable 7 Lease Comparable 8

Note: CoStar photos were utilized for purposes of this report. The appraiser has driven past 

these properties and through the neighborhoods in which they are located.
TDG 2015 022 79

RETROSPECTIVE MARKET RENT RECONCILIATION

The retrospective market rent comparables selected for this analysis reflected higher quality 

flex/industrial spaces, and located within the subject’s competitive market area. Overall, these 

comparables reflect or bracket the subject in terms of age, condition, quality, size, access and 

exposure. The subject’s parking ratio of 9 spaces per 1,000 square feet of gross building area 

was not bracketed, however this is considered atypically high for the area.

The subject’s actual base rent lease rate in 2010 of $21,410.83 per month, or approximately 

$0.85 per square foot of gross building area (GBA), is considered to have been below market 

based on the comparables analyzed herein. As shown below, comparables 1 through 8 have 

lease rates ranging from $1.25 to $2.00 per square foot per month. Qualitative comparisons 

between the comparables and the subject property were made which resulted in ranking the 

subject near the mid-point of the selected range. Comparables 1, 2 and 3 were considered 

inferior in quality and/or condition. Comparables 4 and 5 were considered overall similar to the 

subject reflecting similar quality and/or condition. Comparables 6, 7, and 8 were considered 

slightly superior or superior to the subject in overall quality and/or condition. Based on 

comparisons to the most similar and recent lease comparables available, a 2010 retrospective 

lease rate of $1.50 per square foot per month is considered reasonable and well supported by 

the comparables analyzed.

The reconciled lease rate of $1.50 only applies to the combined above grade GBA of 16,992 

square feet. The subject’s basement area, totaling 8,094 square feet, is allocated a reduced 

monthly rate of $0.75 per square foot, or 50% of the 2010 market lease rate for the above grade 

GBA. No lease rates specific to basement areas were found in our research as basements are not 

typical in California. The applied 50% discount recognizes the area’s utility for storage purposes, 

but reflects its lower quality finishes and limited overall utility.

A comparative analysis of the lease comparables is summarized below:

Rent/SF/Ret.

No. Comparable Status Lease Type Square Feet Gross Comparison

1 4112 Del Rey Ave Lease MG 11,037 $1.25 Inferior

2 4130 Del Rey Ave Lease MG 10,937 $1.25 Inferior

3 1815 Pontius Ave Lease N/Av 5,339 $1.35 Inferior

4 2211 Michigan Ave Lease NNN 44,642 $1.45 Similar

-- Subject Lease NNN 25,086 $1.50 --

5 1909-1913 Centinela Ave Lease NNN 7,542 $1.50 Similar

6 12210 Nebraska Ave Lease NNN 5,042 $1.55 Sl. Superior

7 1740 Stanford Street Lease NNN 18,442 $1.69 Superior

8 2105 Colorado Ave Lease NNN 17,251 $2.00 Superior

CURRENT LEASE COMPARABLE ADJUSTMENTS
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POTENTIAL GROSS INCOME

For the current potential gross income, we applied the current market rental rate of $2.25 to 

the 16,992 square feet of combined above grade building area, and the reduced rate of $1.125 

to the 8,094 square feet of basement area/storage space. This results in annual rents of 

$458,784 for above grade area, $109,269 for below grade area, and a combined total of 

$568,053 per year; this equates to an overall blended monthly rate of $1.89 for the total GBA of 

25,086 square feet.

For the 2010 retrospective potential gross income, we applied the current market rental rate of 

$1.50 to the 16,992 square feet of combined above grade building area, and the reduced rate of 

$0.75 to the 8,094 square feet of basement area/storage space. This results in annual rents of 

$305,856 for above grade area, $72,846 for below grade area, and a combined total of $378,702 

per year; this equates to an overall blended monthly rate of $1.26 for the total GBA of 25,086 

square feet.

VACANCY AND COLLECTION LOSS

The subject has been leased by the same tenant on a long term basis since 1988, and thus it is 

reasonable to assume the tenant will continue its use of the premises for the foreseeable future 

despite currently leasing the property on a month to month basis and not under a long term 

contract. Also of note, in 2010 the subject was contracted under a 7-year extension which 

commenced in July of 2008. With limited vacancy risk, a nominal 2% vacancy and collection loss

factor was applied to both current PGI and retrospective PGI to derive Effective Gross Income 

(EGI) for purposes of this analysis.

LANDLORD EXPENSES

The estimate of market rent concluded upon in the preceding section was based on a standard 

Triple Net (NNN) lease structure typical of office and flex/industrial lease agreements in this 

market. Under the NNN lease terms, all of the Operating and Building Expenses are recoverable 

from the tenant including real estate taxes, building insurance, building maintenance, utility 

expenses, and common area maintenance (CAM). Expenses borne by the owner are typically 

limited to property management expenses.

In the current and retrospective analyses we have estimated landlord expenses at 3% of EGI for 

property management. All other expenses are considered recoverable from the tenant based on 

the NNN lease agreement.

CAPITALIZATION RATE

The next step in the Income Capitalization Approach is capitalization of net income into an 

expression of value. Direct capitalization is a method used to convert a single year's income 

estimate into a value indication. This conversion is accomplished by dividing the income 
TDG 2015 022 81

estimate by an appropriate income capitalization rate. The capitalization rate is the factor that 

converts the stabilized net operating income (NOI) to a present value. It is the ratio of net 

income to value or sale price.

While the subject is not currently a legally distinct property capable of being transferred 

independent of the Airport land upon which it is situated, it is in many ways analogous to a 

property encumbered under a long term lease with redevelopment potential at some point in 

the future. Prospective buyers in the market for such a property would likely include 

governmental, or quasi-public agencies that requires an owner/user profile or ancillary income 

potential for redeveloping, or repurposing the uses for creative office, artists’ studios, light 

industrial, research and development, educational or institutional, or some combination of 

these and/or similar uses. As such, the overall rate that could be expected for the subject 

property would be dictated by the rates being paid for other similar real estate investments. The 

overall rate utilized to capitalize our estimate of stabilized net operating income for the subject 

into an estimate of stabilized market value is based on our review of typical capitalization rates 

currently found in the market as reflected by recent office and flex/industrial building sales in 

Los Angeles County.

We have reviewed the CoStar data for sales of office and flex/industrial buildings containing 

5,000 to 100,000 square feet or less for the entirety of Los Angeles County that sold during the 

24 months preceding the date of value. We have also reviewed the CoStar data under the same 

parameters, but for sales during the time period of 1/1/2009 to 12/31/2010 in order to establish 

capitalization rates for our 2010 retrospective value of the subject property. The capitalization 

rates reflected by those sales are summarized below.
TDG 2015 022 82

CURRENT CAPITALIZATION RATES SUMMARY

More than 200 sales were discovered through the CoStar data base for office and flex/industrial

building sales in Los Angeles County, between 5,000 and 100,000 square feet, from September

2014 to September 2016, and with reported incomes and cap rates. The 43 sales reflected 

above are those located within the Western Los Angeles and South Bay submarkets. The overall 

range of the cap rates is 3.10% to 7.50%. The overall average cap rate for the entire 24 month 

period is 5.36%. Overall the above sales demonstrate relatively stable trend with regard to 

investors’ price tolerances relative to current net operating income. In the final analysis we have 

formed the opinion that a 6.00% overall capitalization rate would be appropriate in the subject’s 

direct capitalization analysis.

Property Address Property City Property Type Sale Date Bldg SF Sale Price Price Per SF Actual Cap Rate

3840 Woodruff Ave Long Beach Office 11/21/2014 18,450 $3,135,000 $169.92 7.50%

3447 Atlantic Ave Long Beach Office 7/27/2015 37,700 $7,275,000 $192.97 7.48%

3901 Via Oro Ave Long Beach Office 3/13/2015 53,817 $10,500,000 $195.11 7.25%

644 E Regent St Inglewood Office 10/21/2014 10,454 $1,450,000 $138.70 7.10%

18701 S Figueroa St Gardena Office 9/1/2015 29,032 $7,200,000 $248.00 7.00%

1776 E Grand Ave El Segundo Office 7/29/2016 32,980 $31,340,000 $950.27 6.74%

12954 Hawthorne Blvd Hawthorne Office 4/18/2016 6,342 $1,575,000 $248.34 6.72%

3760 Motor Ave Los Angeles Office 2/20/2015 11,671 $3,000,000 $257.05 6.40%

1165 E San Antonio Dr Long Beach Office 7/21/2016 9,809 $1,650,000 $168.21 6.30%

900 Seward St Los Angeles Flex 12/1/2015 40,315 $19,000,000 $471.29 6.30%

8473 S Van Ness Ave Inglewood Office 9/13/2016 8,214 $1,900,000 $231.31 6.20%

500 S Sepulveda Blvd Manhattan Beach Office 6/8/2015 35,911 $15,375,000 $428.14 6.00%

335 E Manchester Blvd Inglewood Office 7/28/2016 13,086 $1,570,000 $119.98 6.00%

550 Continental Blvd El Segundo Office 6/2/2016 97,445 $29,225,000 $299.91 5.92%

2200 Pacific Coast Hwy Hermosa Beach Office 12/31/2015 35,898 $14,300,000 $398.35 5.80%

5500 W Washington Blvd Los Angeles Industrial 8/14/2015 20,224 $4,526,000 $223.79 5.79%

291 Coral Cir El Segundo Industrial 7/8/2016 41,658 $12,650,000 $303.66 5.75%

711 W Knox St Gardena Industrial 6/7/2016 40,364 $5,028,048 $124.57 5.66%

2825 Santa Monica Blvd Santa Monica Office 10/28/2015 54,930 $38,500,000 $700.89 5.50%

24445 Hawthorne Blvd Torrance Office 6/28/2016 12,808 $3,350,000 $261.56 5.32%

9150 Wilshire Blvd Beverly Hills Office 11/15/2015 85,592 $16,250,000 $189.85 5.30%

5250 W 102nd St Los Angeles Industrial 8/1/2016 21,578 $4,800,000 $222.45 5.20%

605 S Pacific Ave San Pedro Office 6/3/2016 8,910 $1,250,000 $140.29 5.00%

2750-2760 E Spring St Long Beach Office 1/27/2015 21,000 $2,950,000 $140.48 5.00%

860 Via De La Paz Pacific Palisades Office 11/10/2014 29,998 $11,350,000 $378.36 5.00%

2121 Wilshire Blvd Santa Monica Office 6/17/2016 32,824 $26,300,000 $801.24 5.00%

1315 Lincoln Blvd Santa Monica Office 4/16/2015 23,557 $23,650,000 $1,003.95 5.00%

955 Carrillo Dr Beverly Hills Office 10/23/2015 22,568 $11,650,000 $516.22 5.00%

2010 S Westgate Ave Los Angeles Flex 8/18/2015 9,000 $4,746,500 $527.39 5.00%

8900 Bellanca Ave Los Angeles Industrial 7/14/2015 52,416 $14,250,000 $271.86 4.90%

755 N Nash St El Segundo Industrial 1/19/2016 74,696 $22,633,000 $303.00 4.85%

5405 Jandy Pl Los Angeles Flex 4/4/2016 70,450 $27,292,000 $387.40 4.50%

1141 W Redondo Beach Blvd Gardena Office 2/2/2016 39,483 $7,560,000 $191.47 4.44%

9033 Wilshire Blvd Beverly Hills Office 12/8/2015 49,663 $75,050,000 $1,511.19 4.40%

9090 Wilshire Blvd Beverly Hills Office 12/3/2015 48,915 $50,250,000 $1,027.29 4.30%

9350 Civic Center Dr Beverly Hills Office 10/28/2015 45,009 $38,000,000 $844.28 4.20%

900 Wilshire Blvd Santa Monica Office 11/9/2015 33,455 $17,000,000 $508.15 4.06%

9378 Wilshire Blvd Beverly Hills Office 10/31/2014 31,755 $29,500,000 $928.99 4.00%

18119 Prairie Ave Torrance Office 1/27/2015 7,834 $1,600,000 $204.24 4.00%

10390 Santa Monica Blvd Los Angeles Office 6/1/2016 80,298 $36,000,000 $448.33 4.00%

3700 Santa Fe Ave Long Beach Office 1/30/2015 31,965 $3,170,000 $99.17 3.82%

12300 Wilshire Blvd Los Angeles Office 9/4/2014 46,579 $17,300,000 $371.41 3.50%

1624-1630 Cotner Ave Los Angeles Flex 10/31/2014 9,000 $4,200,000 $466.67 3.10%

Average 34,597 $409.67 5.36%

Summary of Office, Flex and Industrial Building Capitalization Rate Sales - Western Los Angeles County - September 2014-September 2016
TDG 2015 022 83

RETROSPECTIVE CAPITALIZATION RATES SUMMARY

Forty seven sales were discovered through the CoStar data base for office and flex/industrial 

building sales in Los Angeles County, between 5,000 and 100,000 square feet, from January 

2009 to December 2010, and with reported incomes and cap rates. The overall range of the cap 

rates is 4.08% to 9.88%. The overall average cap rate for the entire 24 month period is 6.79%. 

Overall the above sales demonstrate relatively stable trend with regard to investors’ price 

tolerances relative to net operating income within the retrospective time frame analyzed. In the 

final analysis we have formed the opinion that a 7.25% overall capitalization rate would be 

appropriate in the subject’s direct capitalization analysis.

Property Address Property City Property Type Sale Date Bldg SF Sale Price Price Per SF Actual Cap Rate

8780 Van Nuys Blvd Panorama City Office 12/7/2010 8,186 $865,000 $105.67 9.88%

12669 Encinitas Ave Sylmar Office 9/24/2010 35,785 $7,800,000 $217.97 9.76%

100 E Wardlow Rd Long Beach Office 5/3/2010 10,386 $1,600,000 $154.05 9.33%

125 W Huntington Dr Arcadia Office 12/11/2009 63,095 $10,650,000 $168.79 9.00%

6133 Bristol Pky Culver City Office 10/7/2010 51,288 $8,350,000 $162.81 8.90%

8135 S Painter Ave Whittier Office 4/30/2010 40,659 $9,000,000 $221.35 8.50%

5959 Topanga Canyon Blvd Woodland Hills Office 8/17/2009 64,119 $11,900,000 $185.59 8.50%

675 W Terrace Dr San Dimas Flex 9/23/2010 30,080 $2,657,523 $88.35 8.17%

9300 Wilshire Blvd Beverly Hills Office 8/25/2010 62,661 $15,000,000 $239.38 8.13%

432 W Roosevelt Ave Montebello Industrial 12/22/2009 25,626 $1,600,000 $62.44 8.02%

3500 S San Pedro St Los Angeles Industrial 7/9/2010 13,396 $1,000,000 $74.65 8.00%

5700 San Fernando Rd Glendale Office 6/8/2010 10,000 $2,900,000 $290.00 8.00%

13200-13228 S Western Ave Gardena Industrial 7/10/2009 42,467 $3,775,000 $88.89 7.90%

3620 Long Beach Blvd Long Beach Office 1/27/2010 13,144 $2,700,000 $205.42 7.90%

196 W Holt Ave Pomona Office 10/14/2009 9,780 $1,100,000 $112.47 7.82%

5942 Rugby Ave Huntington Park Office 6/16/2010 7,400 $3,725,000 $503.38 7.53%

1647 Yeager Ave La Verne Industrial 7/29/2010 32,687 $4,200,000 $128.49 7.50%

9535 Reseda Blvd Northridge Office 11/1/2010 34,904 $9,900,000 $283.64 7.50%

1403 W Lomita Blvd Harbor City Office 4/8/2009 35,675 $4,050,000 $113.52 7.30%

12916 S Broadway Los Angeles Industrial 4/29/2010 17,755 $1,025,000 $57.73 7.25%

818 N Spring St Los Angeles Office 7/2/2010 17,214 $1,810,000 $105.15 7.04%

6404 Wilshire Blvd Los Angeles Office 3/2/2009 64,207 $12,700,127 $197.80 7.02%

12981 166th St Cerritos Industrial 12/23/2009 16,885 $2,350,000 $139.18 7.00%

960 W Mission Blvd Pomona Office 4/3/2009 10,338 $5,150,000 $498.16 6.86%

2777 N Long Beach Blvd Long Beach Office 2/24/2009 10,204 $2,968,250 $290.89 6.75%

3330 29th St Long Beach Industrial 6/30/2009 20,860 $2,053,000 $98.42 6.69%

500 W 17th St Long Beach Industrial 2/20/2009 13,500 $970,000 $71.85 6.63%

2200 N Sepulveda Blvd Manhattan Beach Office 5/5/2009 6,700 $5,850,000 $873.13 6.53%

324 S Palm Ave Alhambra Industrial 12/8/2010 9,390 $1,300,000 $138.45 6.50%

316-318 S Palm Ave Alhambra Industrial 12/8/2010 9,010 $1,300,000 $144.28 6.50%

6750 Foster Bridge Blvd Bell Gardens Industrial 6/1/2009 13,008 $1,600,000 $123.00 6.32%

1110 Sonora Ave Glendale Office 3/26/2010 9,240 $1,560,000 $168.83 6.25%

12401 Woodruff Ave Downey Industrial 1/7/2009 36,434 $3,600,000 $98.81 6.00%

2660 W Olive Ave Burbank Office 12/21/2010 38,907 $11,500,000 $295.58 6.00%

1991 W 190th St Torrance Office 2/9/2010 10,966 $1,950,000 $177.82 5.66%

566 El Dorado St Pasadena Office 1/22/2010 6,025 $2,000,000 $331.95 5.40%

2920 Huntington Dr San Marino Office 5/29/2009 14,665 $4,200,000 $286.40 5.12%

9601 Cozycroft Ave Chatsworth Industrial 11/5/2010 17,040 $1,395,000 $81.87 5.00%

3600 S San Pedro St Los Angeles Industrial 12/3/2010 13,500 $850,000 $62.96 4.94%

260 S Glendora Ave West Covina Office 4/16/2010 5,634 $915,000 $162.41 4.93%

13213 Saticoy St North Hollywood Industrial 7/10/2009 15,989 $1,850,000 $115.70 4.83%

20325 E Walnut Dr Diamond Bar Industrial 5/1/2009 25,960 $2,450,000 $94.38 4.63%

8150-8166 Orion St Van Nuys Industrial 8/11/2009 10,689 $1,351,500 $126.44 4.59%

2100 Sawtelle Blvd Los Angeles Office 8/5/2009 18,858 $5,800,000 $307.56 4.50%

324-326 S Pacific Coast Hwy Redondo Beach Office 5/21/2009 5,847 $1,300,000 $222.34 4.23%

8060 Florence Ave Downey Office 2/27/2009 18,865 $1,800,000 $95.41 4.12%

931 N Cole Ave Los Angeles Office 10/22/2009 8,268 $2,650,000 $320.51 4.08%

Average 22,496 $193.49 6.79%

Summary of Office, Flex and Industrial Building Capitalization Rate Sales - Los Angeles County - January 2009-December 2010
TDG 2015 022 84

CAPITALIZATION TO VALUE

The following chart summarizes our opinion of income and expenses for the subject property for 

one year of stabilized operation under current market rate and 2010 retrospective market rate

lease terms. The first chart addresses current market rent capitalized at a 6.00% capitalization 

rate as discussed above. The second chart addresses 2010 retrospective market rent capitalized 

at a 7.25% capitalization rate as discussed above.

Unit/Space; Type Income (Gross) Method Units/SF Annual % of PGI

Above Grade (Flex) $2.25 $/SF/Month 16,992 $458,784 100%

Basement (Storage) $1.13 $/SF/Month 8,094 $109,269 100%

Potential Gross Income: 25,086 $568,053 100%

Vacancy & Collection Loss 2.0% ($11,361)

Other Income (CAM - Pass through): 0

Effective Gross Income (EGI): $556,692 98%

Expense Annual SF

Real Estate Taxes (NNN) $ -

Insurance (NNN) $ - $0.00

Maintenance (NNN) $ - $0.00

Management Of the EGI 3.00% $16,701 $0.67

Total Expenses: 3.00% $ 16,701 $0.67

Net Operating Income (NOI): $539,991 $21.53

Capitalization Rate: 6.00%

Value (NOI/Cap Rate): $8,999,853 $358.76

Rounded: $9,000,000

 Current Income Capitalization Analysis

2800 Airport Avenue

Unit/Space; Type Income (Gross) Method Units/SF Annual % of PGI

Above Grade (Flex) $1.50 $/SF/Month 16,992 $305,856 100%

Basement (Storage) $0.75 $/SF/Month 8,094 $72,846 100%

Potential Gross Income: 25,086 $378,702 100%

Vacancy & Collection Loss 2.0% ($7,574)

Other Income (CAM - Pass through): 0

Effective Gross Income (EGI): $371,128 98%

Expense Annual SF

Real Estate Taxes (NNN) $ -

Insurance (NNN) $ - $0.00

Maintenance (NNN) $ - $0.00

Management Of the EGI 3.00% $11,134 $0.44

Total Expenses: 3.00% $ 11,134 $0.44

Net Operating Income (NOI): $359,994 $14.35

Capitalization Rate: 7.25%

Value (NOI/Cap Rate): $4,965,436 $197.94

Rounded: $4,965,000

Retrospective Income Capitalization Analysis

2800 Airport Avenue
TDG 2015 022 85

DIRECT CAPITALIZATION ANALYSIS CONCLUSION

Based on the above analysis detailed above, as of September 12, 2016, we have reconciled to a 

direct capitalization approach value as stabilized of:

$9,000,000

Nine Million Dollars

Based on the above analysis detailed above, in our 2010 retrospective analysis, we have 

reconciled to a direct capitalization approach value as stabilized of:

$4,965,000

Four Million Nine Hundred Sixty Five Thousand Dollars

PER YEAR VALUATION ANALYSIS

As part of the scope of this analysis, we are to establish market values for the subject property 

in 2010, 2011, 2012, 2013, 2014, 2015 and current market value as of the effective date of this 

report, September 12, 2016. As discussed above, we have researched and analyzed market data 

and lease rates relevant to the current market and the 2010 retrospective market. Based on 

these analyses we concluded market values of $9,000,000 (current) and $4,965,000 (2010 

retrospective). In order to determine values for the subject property in the interim years 

between these two points in time (2011, 2012, 2013, 2014, and 2015) we have surveyed

economic and real estate market trend data for office and flex/industrial property across Los 

Angeles County from 2010 to 2016 year to date, and with 5,000 to 100,000 square feet of gross 

building area (GBA). This time frame spans the tail end of the economic recession through the 

recovery years into the current and relatively stabilized market. Within this context, we analyzed 

a variety of data points and year over year changes to gauge overall market activity and pricing 

trends in Los Angeles County. Price per square foot of GBA was the metric considered most 

applicable to this analysis, and the best indicator of pricing trends in this sector. Beginning in 

2010, the average price per square foot of GBA reflected in our survey was $130.01; this 

declined slightly in 2011 to $128.36, but has increased every year since. The following chart 

reflects year over year changes in price per square foot of GBA reflected in our survey which 

contained a sample of more than 7,200 transactions.
TDG 2015 022 86

Once we established an overall market trend for the relevant time period of 2010 to 2016, we 

applied these metrics to the subject property. Using our 2010 retrospective value of $4,965,000, 

or $197.94 per square foot of GBA as a starting point, we applied the year over year percent 

changes reflected above to determine our interim values. As seen in the chart below, carrying 

these calculations through to 2016, we arrived at a 2016 value of $9,096,000 which represents 

only a 1% variance from our current reconciled market value of $9,000,000.
TDG 2015 022 87

Correlating this price trend data to the subject property as shown above, we have concluded 

values for the interim years of 2011, 2012, 2013, 2014, and 2015 as follows:

2011: $4,903,000

2012: $5,780,000

2013: $6,783,000

2014: $7,243,000

2015: $7,815,000

PER YEAR MARKET RENT ANALYSIS

As part of the scope of this analysis, we are to establish market rental rates for the subject 

property in 2010, 2011, 2012, 2013, 2014, 2015 and current market value as of the effective 

date of this report, September 12, 2016. As discussed above, we have researched and analyzed 

market data and lease rates relevant to the current market and the 2010 retrospective market. 

Based on these analyses we concluded market rental rates of $27.00 per square foot annually, 

or $2.25 per square foot per month (current), and $18.00 per square foot annually, or $1.50 per 

square foot per month (2010 retrospective). As noted in our Market Rent Reconciliations, these 

rates apply to the combined above grade GBA; a 50% reduced rate was applied to the below 

grade basement area. In order to determine market rents for the subject property in the interim 

years between these two points in time (2011, 2012, 2013, 2014, and 2015) we have surveyed

economic and real estate market trend data for office and flex/industrial property across Los 

Angeles County from 2010 to 2016 year to date, and with 5,000 to 100,000 square feet of gross 

building area (GBA). This time frame spans the tail end of the economic recession through the 

recovery years into the current and relatively stabilized market. Within this context, we analyzed 

annual trends in capitalization rates depicting relationships between income and pricing trends. 

Based on our analysis we have concluded annual market rents per square foot for the interim 

years of 2011, 2012, 2013, 2014 and 2015 as follows:

Year Above Grade Rent/SF Basement Rent/SF

2011 $17.00 $8.50

2012 $19.50 $9.75

2013 $22.00 $11.00

2014 $22.75 $11.38

2015 $23.50 $13.50
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FINAL RECONCILIATION

The process of reconciliation involves the analysis of each approach to value. The quality of data 

applied, the significance of each approach as it relates to market behavior and defensibility of 

each approach are considered and weighed. Finally, each is considered separately and 

comparatively with each other. 

VALUE INDICATIONS

Income Approach: Direct Capitalization (Current Market Value) $9,000,000

Income Approach: Direct Capitalization (2010 Retrospective Market Value): $4,965,000

Trend Analysis (Current Market Value) $9,096,000

Trend Analysis (2015 Retrospective Market Value) $7,815,000

Trend Analysis (2014 Retrospective Market Value) $7,243,000

Trend Analysis (2013 Retrospective Market Value) $6,783,000

Trend Analysis (2012 Retrospective Market Value) $5,780,000

Trend Analysis (2011 Retrospective Market Value) $4,903,000

Trend Analysis (2010 Retrospective Market Value) $4,965,000

VALUE CONCLUSIONS

The Income Approach to value was utilized in this analysis to establish current and 2010 

retrospective market values. A trend analysis was utilized to established retrospective market 

values for the interim years of 2011, 2012, 2013, 2014 and 2015. Due to the buyer profile which 

is likely reflective of governmental, or quasi-public agencies requiring an owner/user profile or 

ancillary income potential, and with consideration of the relative strengths of available data, the 

Income Approach is given primary consideration for the current market value and 2010 

retrospective market values in the final reconciliation. Our trend analysis also demonstrated a 

high level of consistency with our Income Approach, and thus is considered a reliable means of 

developing our interim values for this analysis. Both approaches provided very consistent values 

which indicate both approaches provide critical insights into typical behavior within the 

subject’s competitive market throughout the time frame of our analysis. Based on the data and 

analyses developed in this appraisal, we have reconciled to the following value conclusions, as 

of September 12, 2016 as well as years 2010, 2011, 2012, 2013, 2014 and 2015, subject to the 

limiting conditions and assumptions of this appraisal:
TDG 2015 022 89

MARKET RENT CONCLUSIONS

In order to establish market rental rates in this analysis, current and 2010 retrospective lease

comparables were selected an analyzed. Trend analyses were employed in deriving market 

rental rates for the interim years of 2011, 2012, 2013, 2014 and 2015. Based on the data and 

analyses developed in this appraisal, we have reconciled to the following market rent

conclusions, as of September 12, 2016, as well as years 2010, 2011, 2012, 2013, 2014 and 2015

subject to the limiting conditions and assumptions of this appraisal:

Value Scenario Date of Value Interest Value

Current Market Value September 12, 2016 Leased Fee $9,000,000

Retrospective Market Value 2015 Leased Fee $7,815,000

Retrospective Market Value 2014 Leased Fee $7,243,000

Retrospective Market Value 2013 Leased Fee $6,783,000

Retrospective Market Value 2012 Leased Fee $5,780,000

Retrospective Market Value 2011 Leased Fee $4,903,000

Retrospective Market Value 2010 Leased Fee $4,965,000

Five Million Seven Hundred Eighty Thousand Dollars

Four Million Nine Hundred Three Thousand Dollars

Four Million Nine Hundred Sixty Five Thousand Dollars

Value Indications

Nine Million Dollars

Seven Million Eight Hundred Fifteen Thousand Dollars

Seven Million Two Hundred Forty Three Thousand Dollars

Six Million Seven Hundred Eighty Three Thousand Dollars

Year Above Grade Rent/SF Basement Rent/SF Blended Overall Rate

2010 $18.00 $9.00 $15.10

2011 $17.00 $8.50 $14.26

2012 $19.50 $9.75 $16.35

2013 $22.00 $11.00 $18.45

2014 $22.75 $11.38 $19.08

2015 $23.50 $11.75 $19.71

2016 $27.00 $13.50 $22.64

Annual Market Rent Summary - 2010 to 2016
TDG 2015 022 90

CERTIFICATION STATEMENT

We certify that, to the best of our knowledge and belief: 

 The statements of fact contained in this report are true and correct.

 The reported analyses, opinions and conclusions are limited only by the reported 

assumptions and limiting conditions, and are our personal, impartial, and unbiased 

professional analyses, opinions and conclusions.

 We have no present or prospective future interest in the property that is the subject of this 

report, and have no personal interest with respect to the parties involved.

 We have no bias with respect to the property that is the subject of this report, or to the 

parties involved with this assignment. 

 Our engagement in this assignment was not contingent upon developing or reporting 

predetermined results.

 Our compensation for completing this assignment is not contingent upon the development 

or reporting of a predetermined value or direction in value that favors the cause of the 

client, the amount of the value estimate, the attainment of a stipulated result, or the 

occurrence of a subsequent event directly related to the intended use of this appraisal. 

 Our analyses, opinions, and conclusions were developed, and this report has been prepared, 

in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP).

 William Moore (AR032110) provided significant real property appraisal assistance to the 

person(s) signing this certification. William Moore’s contributions to this assignment 

included (but were not limited to) research and verification of subject physical and legal 

characteristics, highest and best use analysis, market research and analysis, consideration of 

applicable approaches to value, comparable sale selection and analysis, income analysis 

including Direct Capitalization, report writing, and final value reconciliation. Market research 

was conducted via sources including but not limited to public records, CoStar data, LoopNet, 

government websites and personnel, and local brokers. My contributions to this report were 

performed in conformity with the Uniform Standards of Professional Appraisal Practice 

(USPAP), and under the supervision and guidance of Lance W. Doré, MAI, FRICS who is the 

signer of this certification.

 We certify sufficient competence to appraise this property through education and 

experience, in addition to the internal resources of the appraisal firm.

 As of the date of this report, Lance W. Doré, MAI, FRICS has completed the continuing 

education program for designated members of the Appraisal Institute.
TDG 2015 022 91

 We have performed no services, as appraisers, regarding the property that is the subject of 

this report within the three year period immediately preceding acceptance of this 

assignment. 

 Lance W. Doré, MAI, FRICS has made an inspection of the subject property.

Lance Doré, MAI, FRICS

President / CEO

The Doré Group

AG 002464

lwdore@thedoregroup.com
TDG 2015 022 92

ADDENDA 
TDG 2015 022 93

DEFINITIONS

Fee Simple Estate: Absolute ownership unencumbered by any other interest or estate, subject 

only to the limitations imposed by the governmental powers of taxation, eminent domain, 

police power, and escheat.

Leased Fee Interest: A freehold (ownership interest) where the possessory interest has been 

granted to another party by the creation of a contractual landlord-tenant relationship (i.e., a 

lease).

Marketing Time: An opinion of the amount of time it might take to sell a real or personal 

property interest at the concluded market value level during the period immediately after the 

effective date of the appraisal. Marketing time differs from exposure time, which is always 

presumed to precede the effective date of the appraisal. 

Advisory Opinion 7 of the Appraisal Standards Board of The Appraisal Foundation and Statement 

on Appraisal Standards No. 6, "Reasonable Exposure Time in Real Property and Personal 

Property Market Value Opinions" address the determination of reasonable exposure and 

marketing time. 

Exposure Time:

1. The time a property remains on the market.

2. The estimated length of time the property interest being appraised would have been 

offered on the market prior to the hypothetical consummation of a sale at market value 

on the effective date of the appraisal; a retrospective estimate based on an analysis of 

past events assuming a competitive and open market. 

See Marketing Time, above.

Gross Building Area (GBA): Total floor area of a building, excluding unenclosed areas, measured 

from the exterior of the walls of the above-grade area. This includes mezzanines and basements 

if and when typically included in the region.

Rentable Area (RA): For office buildings, the tenant’s pro rata portion of the entire office floor, 

excluding elements of the building that penetrate through the floor to the areas below. The 

rentable area of a floor is computed by measuring the inside finished surface of the dominant 

portion of the permanent building walls, excluding any major permanent penetrations of the 

floor. Alternatively, the amount of space on which the rent is based; calculated according to 

local practice.

Gross Leasable Area (GLA): Total floor area designed for the occupancy and exclusive use of 

tenants, including basements and mezzanines; measured from the center of joint partitioning to 

the outside wall surfaces. 
LANCE W. DORÉ, MAI, FRICS

Curriculum Vitae

Lance W. Doré is the President and CEO of The Doré Group. In this role, he directs all valuation assignments involving a wide 

variety of conventional and complex real properties, serves as litigation support to both public and private clients, provides 

expert advisory services (including forensic analyses and market and feasibility studies), and manages the overall operations 

of The Doré Group.

Mr. Doré has been a real estate appraiser since 1983, initially working for Bank of America as a staff appraiser then as a 

senior appraiser with a fee appraisal firm in Del Mar, California. In 1988, he formed L.W. Doré, Real Estate Consultants and 

grew the firm through the addition of two partners forming Doré & Curry, Inc. (1990) and Doré, Curry, & Marschall, Inc.

(1997). In 1999, Doré, Curry, & Marschall, Inc. became the San Diego office for Integra Realty Resources with Mr. Doré 

serving as Managing Director. In the fall of 2005, Mr. Doré joined Cushman & Wakefield as the National Practice Leader of 

the Government Affairs and Energy division. In 2007, he pursued an opportunity to serve as the President of European 

Emerging Markets and Vice President of Client Services for PGP, Inc./Colliers International. Mr. Doré’s unique depth of 

experience, coupled with his high personal standards of service, led him to found The Doré Group in 2010.

Experience

Mr. Doré’s work experience spans a wide variety of property types with special expertise in the valuation of energy

facilities, conservation land, open space corridors and ranches. In addition, he has also appraised planned-unit 

developments, residential income properties, senior housing, shopping centers, office, industrial, mixed-use properties, and 

a multitude of special purpose properties, including, but not limited to hotels, ski resorts, restaurants, hospitals, 

recreational camps, auto service and wrecking centers, equestrian facilities, and golf courses. He regularly serves as an 

expert advisor conducting appraisal reviews, forensic studies, and marketability and feasibility analyses. In addition, Mr. 

Doré is uniquely qualified and experienced in litigation testimony, consultation and advisory services for all real estate 

related issues. His geographical valuation expertise is focused in the western United States and extends to Tokyo (Japan), 

Central America, Mexico, Cyprus, and Moscow (Russia).

Licenses/Certifications/Affiliations

Certified General Real Estate Appraiser – State of California (OREA No. AG002464)

California Licensed Real Estate Broker & Realtor member - San Diego Board of Realtors

Credentialed Mediator – National Conflict Resolution Center, San Diego

Member of the Appraisal Institute (MAI No. 8471)

Fellow of the Royal Institute of Charter Surveyors

Member of the International Right of Way Association (IR/WA), San Diego Chapter

Member of the Family Firm Institute - FFI

Instructor Positions

National Instructor (Real Estate Valuation Principles & Practice) - Appraisal Institute

Adjunct Professor - Russian Federation Finance Academy

National Instructor – (Business Development and Leadership) – Royal Institute of Charter Surveyors

National Instructor - (Red Book Standards) - Royal Institute of Charter Surveyors

Leadership/Committees

Past President – Appraisal Institute, San Diego Chapter

Past member of International Relations Committee – Appraisal Institute

Past member of Ethics & Standards Committee – Appraisal Institute
Speaking Engagements

Appraisal Institute (National Seminar Series, Los Angeles, CA) - Land Valuation & Environmental Issues

The Trust for Public Land (San Diego, CA) - Natural Communities Conservation Plan

Pan Pacific Conference (Auckland, New Zealand) – Valuation of Submerged Lands

Government of Cyprus (Nicosia, Cyprus) – Valuation of Golf Courses and Marinas

The Russian Federation (Moscow, Russia) - Valuation of Land and Appraisal Principles

The Russian Federation (Goa, India) - Valuation of Oil and Gas and Power Plants

Royal Institute of Charter Surveyors (Montego Bay, Jamaica) – Government & Regulatory Risk

Graziadio School of Business & Management, Pepperdine (Los Angeles, CA)–2008 US & California Forecast

Appraisal Institute (San Diego, CA) – Unique Valuations in Real Estate

Appraisal Institute (San Diego, CA) – International Financial Reporting Standards (IFRS)

University of San Diego – MBA program – Guest Lecturer

Publications

Appraisal Journal (October 2001) – “The Valuation of Submerged Land”

Energy Pulse (March 2006) – “The Highest and Best Use of Power Plants”

Union of Pan America Valuers (November 2010) – “Impact of Public to Private Partnerships in BRICS”

Wall Street Journal (August 2001) – “Power Plant Owners Fight to Lower Taxes”

The Secret of Real Estate – Revealed (2011)

Representative Client List

Public Entities

United States Department of the Interior United States Forest Service

United States Department of Navy United States Department of Justice

Government of Cyprus Russian Federation

State of California – Judicial Courts County of San Diego

County of Riverside County of Los Angeles

County of Monterey City of Riverside

City of San Diego City of Monterey

Legal Clients

Morrison & Foerster Sheppard, Mullin, Richter & Hampton

Best, Best and Krieger DLA Piper

Luce, Forward, Hamilton and Scripps Cooley, LLP

Ropes & Gray Faeger & Benson

McKenna, Long & Aldridge Gordon & Rees

Latham & Watkins Thorsnes, Bartolotta & McGuire

Mr. Doré’s representative financial clients include numerou s national, regional and 

local lenders and private corporations.
TAB B
Date

Monthly Rent 

Paid sqft

Monthly 

Rental Rate 

Paid

Blended 

FMV 

Monthly 

Rental Rate Market Rent Variance

1% Interest on 

Variance

Months to 

9/30/16 Year

Above Grade 

Rent/SF

Basement 

Rent/SF

Blended 

Annual 

FMVR 

Blended 

Monthly 

FMVR

Feb-10 $21,410.83 25,086 $0.85 1.26 $31,608.36 -$10,197.53 -$679.84 80 2010 $18.00 $9.00 $15.10 $1.26

Mar-10 $21,410.83 25,086 $0.85 1.26 $31,608.36 -$10,197.53 -$671.34 79 2011 $17.00 $8.50 $14.26 $1.19

Apr-10 $21,410.83 25,086 $0.85 1.26 $31,608.36 -$10,197.53 -$662.84 78 2012 $19.50 $9.75 $16.35 $1.36

May-10 $21,410.83 25,086 $0.85 1.26 $31,608.36 -$10,197.53 -$654.34 77 2013 $22.00 $11.00 $18.45 $1.54

Jun-10 $21,410.83 25,086 $0.85 1.26 $31,608.36 -$10,197.53 -$645.84 76 2014 $22.75 $11.38 $19.08 $1.59

Jul-10 $21,410.83 25,086 $0.85 1.26 $31,608.36 -$10,197.53 -$637.35 75 2015 $23.50 $11.75 $19.71 $1.64

Aug-10 $21,410.83 25,086 $0.85 1.26 $31,608.36 -$10,197.53 -$628.85 74 2016 $27.00 $13.50 $22.64 $1.89

Sep-10 $21,410.83 25,086 $0.85 1.26 $31,608.36 -$10,197.53 -$620.35 73

Oct-10 $21,410.83 25,086 $0.85 1.26 $31,608.36 -$10,197.53 -$611.85 72

Nov-10 $21,410.83 25,086 $0.85 1.26 $31,608.36 -$10,197.53 -$603.35 71

Dec-10 $21,410.83 25,086 $0.85 1.26 $31,608.36 -$10,197.53 -$594.86 70

Jan-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$485.39 69

Feb-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$478.35 68

Mar-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$471.32 67

Apr-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$464.28 66

May-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$457.25 65

Jun-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$450.21 64

Jul-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$443.18 63

Aug-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$436.14 62

Sep-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$429.11 61

Oct-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$422.08 60

Nov-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$415.04 59

Dec-11 $21,410.83 25,086 $0.85 1.19 $29,852.34 -$8,441.51 -$408.01 58

Jan-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$603.54 57

Feb-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$592.95 56

Mar-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$582.36 55

Apr-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$571.78 54

May-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$561.19 53

City of Santa Monica - Calculation of Rent Shortfall and Interest on SMC's Airport Arts Campus
Jun-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$550.60 52

Jul-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$540.01 51

Aug-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$529.42 50

Sep-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$518.83 49

Oct-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$508.25 48

Nov-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$497.66 47

Dec-12 $21,410.83 25,086 $0.85 1.36 $34,116.96 -$12,706.13 -$487.07 46

Jan-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$645.81 45

Feb-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$631.46 44

Mar-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$617.11 43

Apr-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$602.76 42

May-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$588.41 41

Jun-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$574.05 40

Jul-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$559.70 39

Aug-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$545.35 38

Sep-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$531.00 37

Oct-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$516.65 36

Nov-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$502.30 35

Dec-13 $21,410.83 25,086 $0.85 1.54 $38,632.44 -$17,221.61 -$487.95 34

Jan-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$508.09 33

Feb-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$492.69 32

Mar-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$477.29 31

Apr-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$461.90 30

May-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$446.50 29

Jun-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$431.10 28

Jul-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$415.71 27

Aug-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$400.31 26

Sep-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$384.91 25

Oct-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$369.52 24

Nov-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$354.12 23

Dec-14 $21,410.83 25,086 $0.85 1.59 $39,886.74 -$18,475.91 -$338.73 22

Jan-15 $21,410.83 25,086 $0.85 1.64 $41,141.04 -$19,730.21 -$345.28 21

Feb-15 $21,410.83 25,086 $0.85 1.64 $41,141.04 -$19,730.21 -$328.84 20

Mar-15 $21,410.83 25,086 $0.85 1.64 $41,141.04 -$19,730.21 -$312.39 19
Apr-15 $21,410.83 25,086 $0.85 1.64 $41,141.04 -$19,730.21 -$295.95 18

May-15 $21,410.83 25,086 $0.85 1.64 $41,141.04 -$19,730.21 -$279.51 17

Jun-15 $21,410.83 25,086 $0.85 1.64 $41,141.04 -$19,730.21 -$263.07 16

Jul-15 $21,410.83 25,086 $0.85 1.64 $41,141.04 -$19,730.21 -$246.63 15

Aug-15 $32,116.25 25,086 $1.28 1.64 $41,141.04 -$9,024.79 -$105.29 14

Sep-15 $32,116.25 25,086 $1.28 1.64 $41,141.04 -$9,024.79 -$97.77 13

Oct-15 $32,116.25 25,086 $1.28 1.64 $41,141.04 -$9,024.79 -$90.25 12

Nov-15 $32,116.25 25,086 $1.28 1.64 $41,141.04 -$9,024.79 -$82.73 11

Dec-15 $32,116.25 25,086 $1.28 1.64 $41,141.04 -$9,024.79 -$75.21 10

Jan-16 $32,116.25 25,086 $1.28 1.89 $47,412.54 -$15,296.29 -$114.72 9

Feb-16 $32,116.25 25,086 $1.28 1.89 $47,412.54 -$15,296.29 -$101.98 8

Mar-16 $32,116.25 25,086 $1.28 1.89 $47,412.54 -$15,296.29 -$89.23 7

Apr-16 $32,116.25 25,086 $1.28 1.89 $47,412.54 -$15,296.29 -$76.48 6

May-16 $32,116.25 25,086 $1.28 1.89 $47,412.54 -$15,296.29 -$63.73 5

Jun-16 $32,116.25 25,086 $1.28 1.89 $47,412.54 -$15,296.29 -$50.99 4

$1,862,742.28 $2,835,721.44 -$1,069,327.91 -$33,818.27

Total Variances + Interest = -$1,103,146.18