Description

601 Pine Avenue presents a rare value-add opportunity to acquire a substantial historic commercial property in the heart of Downtown Long Beach at an exceptionally low basis of $3,995,000, or approximately $95 per SF. The property consists of an approximately 42,321 SF freestanding commercial building situated on approximately 17,502 SF of land and was formerly occupied by Rite Aid. The building offers a flexible multi-level layout suitable for retail, storage, showroom, fitness, office, creative, or other commercial uses, subject to applicable approvals, and presents multiple potential strategies for an owner-user, investor, or developer. Based on current preliminary assumptions, the existing building could potentially be stabilized as retail/storage at an estimated ~12.5% cap rate, creating a rare value-add opportunity at the current basis. As an alternative strategy, preliminary adaptive-reuse plans have been prepared for a 63-unit residential and retail mixed-use project. The concept includes converting approximately half of the ground floor, completing the mezzanine to create an additional residential level, and converting the second and third floors to accommodate approximately 63 residential units, consisting of 55 market-rate units and 8 affordable units, while retaining ground-floor retail. Based on current projections, the adaptive-reuse concept is estimated to achieve an approximately ~13.5% pro forma cap rate on total project cost, with approximately $6.0 million in estimated construction costs, approximately $8.5 million in projected developer profit, and an estimated ~87% return on total project cost. The property may also be purchased with the neighboring 127 W 6th Street development site for an additional $995,000, providing additional parking and significant future development potential. The approximately 7,500 SF PD-30 site benefits from unlimited residential density and supports approximately 100 residential units under the base zoning framework, while a separate, more construction-efficient concept has been prepared for a seven-story, 45-unit mixed-use development consisting of 36 primary apartments plus 9 proposed ADUs.