Range of Value — Cap Rate Sensitivity
Prepared for The Baker Family | 5638 N Colfax Ave, North Hollywood, CA 91601
8 Studios | Built 1985 | Non-RSO | In-Place GSR: $135,540 | Pro Forma GSR: $162,720
Shown in $25,000 increments from $1,375,000 to $1,625,000 | ★ Indicates BOV of $1,500,000
Cash-on-Cash assumes 50% down (varies with price), 6.00% interest rate, 30-year amortization
| Sale Price |
$/Unit |
$/SF |
Current Cap |
Pro Forma Cap |
Cash-on-Cash |
PF GRM |
| $1,375,000 | $171,875 | $303.93 | 5.96% | 7.78% | 4.72% | 8.45× |
| $1,400,000 | $175,000 | $309.46 | 5.83% | 7.62% | 4.46% | 8.60× |
| $1,425,000 | $178,125 | $314.99 | 5.70% | 7.46% | 4.21% | 8.76× |
| $1,450,000 | $181,250 | $320.51 | 5.58% | 7.31% | 3.97% | 8.91× |
| $1,475,000 | $184,375 | $326.04 | 5.47% | 7.17% | 3.74% | 9.06× |
| $1,500,000 | $187,500 | $331.56 | 5.36% | 7.03% | 3.52% | 9.22× |
| $1,525,000 | $190,625 | $337.09 | 5.25% | 6.89% | 3.30% | 9.37× |
| $1,550,000 | $193,750 | $342.61 | 5.14% | 6.76% | 3.09% | 9.53× |
| $1,575,000 | $196,875 | $348.14 | 5.04% | 6.63% | 2.89% | 9.68× |
| $1,600,000 | $200,000 | $353.66 | 4.94% | 6.51% | 2.69% | 9.83× |
| $1,625,000 | $203,125 | $359.20 | 4.85% | 6.39% | 2.50% | 9.99× |
At $1,500,000, the property offers a 5.36% in-place cap rate and a 7.03% pro forma cap rate — a 167-basis-point spread representing the rent upside embedded in below-market leases. The two closed sale comparables (11218 Oxnard St and 5621 Klump Ave) traded at 5.31–5.80% cap rates on stabilized rents. Buyers underwriting Colfax to a 7% stabilized yield will find $1,500,000 priced to reflect the lease-up period, not the stabilized asset it becomes.
Current Cap Rate = In-Place NOI ($80,337) ÷ Price. Pro Forma Cap Rate = Pro Forma NOI ($105,383) ÷ Price. GRM = Price ÷ Pro Forma GSR ($162,720). Cash-on-Cash = Net Cash Flow After Debt Service ÷ Down Payment (50% of price at each tier). All expense items per Marcus & Millichap underwriting model. Property tax scaled with purchase price at 1.25% effective rate at each tier.
Morgan Wetmore | Associate, Investments | (818) 212-2724 | Morgan.Wetmore@marcusmillichap.com | CA 02209935
Glen Scher | Senior Managing Director | (818) 212-2808 | Glen.Scher@marcusmillichap.com | CA 01962976
Filip Niculete | Senior Managing Director | (818) 212-2748 | Filip.Niculete@marcusmillichap.com | CA 01905352