Broker Opinion of Value - Terraces at the Lake

Confidential Broker Opinion of Value | Marcus & Millichap, #1 in U.S. Multifamily Sales

Terraces at the Lake

Van Nuys (Lake Balboa), CA 91406

52Units

41,099Square Feet

1988Year Built

39,019SF Lot

Morgan Wetmore

Associate Investments

Glen Scher

Co-Founder, LAAA Team

Filip Niculete

Co-Founder, LAAA Team

Prepared Exclusively for MSCO Corporation

September 2026

Team Track Record

Current Results, Local Market Experience, and Senior-Level Execution

LAAA Team | Marcus & MillichapLocal market knowledge. National reach. Senior-level execution.

494Closed Transactions

342Apartment Sales

41in Van Nuys

$1.56BTotal Sales Volume

Representative Local Closings

Address	Units	Sale Price	$/Unit	Distance	Closed
15716 Saticoy St	42	$14,200,000	$338,095	1.78 mi	2021
14015 Oxnard St	32	$5,136,000	$160,500	2.42 mi	2025
6860 Woodley Ave	7	$1,715,000	$245,000	0.63 mi	2026

96.7%Apartment Pricing Accuracy

34Median Days on Market, Apartments

Published team performance, laaa.com/track-record, as of September 3, 2026.

Terraces at the Lake is the gold marker. Navy markers are the 41 apartment buildings the LAAA Team has closed in Van Nuys; lighter markers are 4 other LAAA closings in the same area. Repeat sales at one building share a marker. Source: laaa.com/track-record, as of September 3, 2026.

A Track Record Built One Assignment at a Time

Of those closings, 342 are apartment sales covering 4,703 units. CoStar ranked LAAA the most active multifamily team in Los Angeles County from 2019 through 2021, and the team has not finished a quarter without a closed sale since it was founded.

Volume matters here for one reason: it is where the buyer list comes from. The buyer for this property is far more likely to be someone this team has already closed with than someone who finds it on a portal, and a team that closes every quarter is calling those people about something regardless.

The Team Behind the Assignment

Morgan Wetmore

Associate Investments

2025: Pace Setter Award, GRIT Award, Emerging Core Hustle Award. 2026: GRIT Award.

(818) 212-2724
Morgan.Wetmore@marcusmillichap.com
CA 02209935

Principal

Glen Scher

Co-Founder, LAAA Team

Senior Managing Director Investments and co-founder of the LAAA Team of Marcus & Millichap, specializing in Los Angeles apartment investment sales.

(818) 212-2808
Glen.Scher@marcusmillichap.com
CA 01962976

Principal

Filip Niculete

Co-Founder, LAAA Team

Senior Managing Director Investments and co-founder of the LAAA Team of Marcus & Millichap, specializing in Los Angeles apartment investment sales.

(818) 212-2748
Filip.Niculete@marcusmillichap.com
CA 01905352

Key Achievements

• Chairman's Club - Marcus & Millichap's top-tier annual honor
• National Achievement Award - multiple years, both partners
• #1 Most Active Multifamily Team in LA County - CoStar 2019-2021
• Sales Recognition Award - every year since 2016
• 494 closed transactions - $1.56B in sales volume

As Featured InBISNOWYAHOO FINANCECONNECT CRESFVBJTHE PINNACLE LIST

How We Market Your Property

Position the Story, Reach the Market, and Work the Buyer List

23,500+Active Email Subscribers

36,000+Owner & Investor Contacts

60,000+Buildings Tracked

100+Targeted Buyer Calls

Our public, continuously maintained reach combines active email subscribers, owner and investor contacts, a building-owner database, and targeted direct buyer calls for each listing.

We are proactive marketers, not reactive.

The Campaign Plan

Targeted Buyer Outreach

Direct outreach and source-stamped digital exposure will focus on buyer groups most likely to pursue the property.

Direct owner and buyer outreach

Named calls into the local buyer pool, the 1031 exchange buyers who have traded in this size class, and the private capital already holding product in the submarket.

#1 in multifamily, nationally

Marcus & Millichap closed 1,415 apartment transactions in the twelve months through Q1 2026, against 778 for CBRE. That is more than the next two firms combined. Over the five years from 2021 through 2025 the firm also ranks first in closed transactions across every property type. What that buys this listing is reach: national distribution, the firm's investor database, and coordination with MMCC on debt terms so a buyer arrives pre-qualified rather than exploring. Ranking source: Marcus & Millichap Research Services, CoStar, Real Capital Analytics and NICMap, 2026.

Dedicated digital presentation

A property-specific offering site, targeted email, and syndication to the platforms buyers in this market actually search.

Most brokers are reactive. They post the listing, run an email blast, and wait for the phone to ring. We do all of that, and we do it well. Then we do the part almost nobody does. We pick up the phone.

Before your building goes to market, our system builds a probable buyer list for it specifically. It pulls the county assessment record for every property in the surrounding area: who owns it, where their mail goes, what they paid, when they bought, who financed it, and how many other buildings they hold. Out of that come the three groups most likely to buy your building: owners of comparable product nearby, buyers who have closed on buildings like yours recently, and exchange buyers with money that has to be placed on a deadline.

That list runs well over 100 names, and we call every one of them.

Buyer Profile & Transaction Strategy

Who Is Most Likely to Buy, and How We Create Competition

Market Context

Five closed Van Nuys sales from 2025 set the frame. Price per unit runs $225,758 to $310,119 and the recommendation sits inside that at $283,654. Price per SF runs $206 to $309 against $359 here, and that gap is unit size, not pricing: this building averages 790 SF per unit where four of the five comps run 1,057 to 1,160 SF. The one comp with a comparable 769 SF average, 6825 Haskell, carries the highest price per SF in the set at $309.

Positioning Thesis

This trades as a value add with the work already identified rather than a stabilized income purchase. The buyer is underwriting the recovery of 15 units and the closing of a $186,664 Loss to Lease, and is paying a 6.17% cap today for a 7.33% cap on the other side of that.

Likely Buyer Profiles

Likely Buyer 01

Value Add Private Capital

A private operator who has turned units in the Valley before and can carry the vacancy and eviction load through to stabilization. This buyer prices off the pro forma, not the trailing.

Likely Buyer 02

1031 Exchange Buyer

An exchange buyer with a deadline who wants scale in one transaction. 52 units in a single 1988 building outside the RSO places a large amount of equity in one close.

Transaction Strategy

Lead with Supported Income

Anchor the campaign in verified current operations and supported market evidence.

Investment Overview

16550 Vanowen St, Los Angeles, CA 91406

52Units

41,099Building SF

1988Year Built

39,019Lot SF

Terraces at the Lake is a 52 unit apartment building at 16550 Vanowen St in the Lake Balboa area of Los Angeles, built in 1988 and held by MSCO Corporation. The building runs 41,099 gross SF across 28 one bedroom and 24 two bedroom units on a 39,019 SF lot.

Value here turns on two numbers moving in the same direction. Gross Scheduled Rent of $1,480,136 sits $186,664 below Gross Potential Rent, and 15 units are either vacant or in eviction. Recover those units at market and the cap moves from 6.17% to 7.33% without a dollar of new capital going into the building.

Investment Highlights

52 units across 41,099 gross SF on a 39,019 SF lot, built 1988.
Built 1988, so the building sits outside the Los Angeles Rent Stabilization Ordinance.
Gross Potential Rent of $1,666,800 against Gross Scheduled Rent of $1,480,136, a Loss to Lease of $186,664.
Pro forma net operating income of $1,080,725 against $910,487 in place, a 7.33% cap at the recommended price.
15 of 52 units were vacant or in active eviction at the August 2026 rent roll, which is where the pro forma comes from.

Location Overview

Lake Balboa, 1988 Construction, Outside the RSO

The property fronts Vanowen St in Lake Balboa, the residential pocket carved out of Van Nuys around the Sepulveda Basin. The five closed sales framing this valuation all sit inside Van Nuys, four of them within a mile and a half of the building.

Property & Location Details
Address	16550 Vanowen St, Los Angeles, CA 91406
City	Van Nuys (Lake Balboa), CA 91406
APN	2231-007-024
Year Built	1988
Building SF	41,099
Lot Size	39,019 SF (0.9 ac)
Units	52
Parking	Subterranean parking structure beneath the building.

Property Details

Terraces at the Lake

Property Overview
Units	52
Year Built	1988
Building SF	41,099
Lot SF	39,019
APN	2231-007-024

Unit Mix
28x 1/1.00	625 (est.) SF
24x 2/2.00	737 (est.) SF

One building, 52 units, 41,099 gross SF on a 39,019 SF lot. Unit mix is 28 one bedroom and 24 two bedroom, averaging 790 SF per unit. The courtyard carries a pool, and units have in unit laundry.

Property Photos

Terraces at the Lake

1 / 9

Exterior

Click any image to enlarge. Images depict the property and representative interiors. Source: listing media and site photography.

Rent Comparables

Achieved and Asking Rents in the Immediate Submarket

Studio Comparables

Address	Unit Type	SF	Asking Rent	Distance
2Vanowen Apartments, 15340 Vanowen St, Van Nuys, CA 91406, USA	Studio to 2BR	430 (est.)	$1,325	1.50 mi
Average (1 comp)		430 (incl. est.)	$1,325	1.50 mi

One Bedroom Comparables

Address	Unit Type	SF	Asking Rent	Distance
1Toscana Apartments, 15736 Vanowen St, Van Nuys, CA 91406, USA	1BR	-	$2,248	1.01 mi
3HFL Vanowen, 14419 Vanowen St, Van Nuys, CA 91405, USA	1BR	-	$1,627	2.68 mi
Average (2 comps)		-	$1,938	1.84 mi

Two Bedroom Comparables

Address	Unit Type	SF	Asking Rent	Distance
1Toscana Apartments, 15736 Vanowen St, Van Nuys, CA 91406, USA	2BR	-	$2,567	1.01 mi
3HFL Vanowen, 14419 Vanowen St, Van Nuys, CA 91405, USA	2BR	-	$2,113	2.68 mi
Average (2 comps)		-	$2,340	1.84 mi

Three competing Vanowen Street properties frame the rents. One bedrooms run $1,627 to $2,248 in the competing set and two bedrooms run $2,113 to $2,885. These are asking rents from listing sources, not signed leases, and they are not represented as achieved subject rents.

Sale Comparables

5 Closed Sales in the Submarket

Address	Yr	Units	Bldg SF	Sale Price	$/Unit	$/SF	GRM	Cap	Date
16825 Haskell Ave, Van Nuys, CA 91406, USA	1985	28	21,540	$6,664,000	$238,000	$309	10.60	4.89%	2025-11-15
27342 Haskell Ave, Van Nuys, CA 91406, USA	1986	21	24,349	$6,512,500	$310,119	$267	12.14	5.01%	2025-12-15
36228 Fulton Ave, Van Nuys, CA 91401, USA	1985	30	34,587	$8,740,000	$291,333	$253	10.76	6.05%	2025-01-15
46643 Haskell Ave, Van Nuys, CA 91406, USA	1987	18	19,033	$5,291,000	$293,944	$278	-	-	2025-12-15
57305 Hazeltine Ave, Van Nuys, CA 91405, USA	1985	33	36,216	$7,450,000	$225,758	$206	-	-	2025-04-15
Median (5 comps)	1985	28	24,349	$6,664,000	$291,333	$267	10.76	5.01%	-

1. 6825 Haskell Ave, Van Nuys, CA 91406, USA - Closest match on average unit size, 769 SF against the subject's 790, and just over one mile away. 28 units against 52, 21,540 SF against 41,099.; Average unit 769 SF, nearly identical to the subject's 790 SF. Closed November 2025.

2. 7342 Haskell Ave, Van Nuys, CA 91406, USA - Same submarket and vintage, closed most recently of the Haskell group. 21 units against 52.; Average unit 1,160 SF against the subject's 790 SF. Closed December 2025.

3. 6228 Fulton Ave, Van Nuys, CA 91401, USA - Closest on unit count of the closed set, but the oldest sale and four miles out. 30 units against 52.; Average unit 1,153 SF against the subject's 790 SF. Closed January 2025, the oldest sale in the set.; 4.2 miles from the subject.

4. 6643 Haskell Ave, Van Nuys, CA 91406, USA - Same street and vintage, but carries no cap rate or GRM, so it informs price per unit and per SF only. 18 units against 52.; Average unit 1,057 SF against the subject's 790 SF. Closed December 2025.; No income detail available in the comp file.

5. 7305 Hazeltine Ave, Van Nuys, CA 91405, USA - Largest closed comp by unit count, but no income detail and three miles out. 33 units against 52.; Average unit 1,097 SF against the subject's 790 SF. Closed April 2025.; No income detail available in the comp file.; 3.1 miles from the subject.

Opinion of Value

Suggested List Price and Expected Sale Range

Basis	Price	$/Unit	$/SF	GRM Current	GRM Pro Forma	Cap Current	Cap Pro Forma
Suggested list price	$14,750,000	$283,654	$358.89	9.97	8.85	6.17%	7.33%
Range top	$14,750,000	$283,654	$358.89	9.97	8.85	6.17%	7.33%
Midpoint	$14,500,000	$278,846	$352.81	9.80	8.70	6.30%	7.47%
Range bottom	$14,250,000	$274,038	$346.72	9.63	8.55	6.43%	7.63%

Property taxes reassess at the sale price, so the net operating income and therefore the capitalization rate are recalculated at every rung above.

Financial Analysis

Terraces at the Lake

Unit Mix & Scheduled Rent

Units	Type	Approx SF	Current Rent	Current Monthly	Market Rent	Market Monthly
28	1/1.00	625 (est.)	$2,217	$62,065	$2,450	$68,600
24	2/2.00	737 (est.)	$2,553	$61,280	$2,929	$70,300
Total Scheduled Rent			$2,372	$123,345	$2,671	$138,900
Additional Income^[1]			-	$4,250	-	$4,250
Monthly Scheduled Gross Income			-	$127,595	-	$143,150

Annualized Operating Data

	Current	Market
Scheduled Gross Income^[2]	$1,531,136	$1,717,800
Vacancy Reserve at 3.9%	($59,205)	($66,672)
Gross Operating Income	$1,471,931	$1,651,128
Operating Expenses	($561,444)	($570,403)
Net Operating Income	$910,487	$1,080,725

Annualized Expenses

	Current	Pro Forma
Contract Services[3]	$20,800	$20,800
General Administrative[4]	$7,800	$7,800
Insurance[5]	$41,600	$41,600
Management Fee[6]	$73,597	$73,597
Manager[7]	$52,000	$52,000
Repairs Maintenance[8]	$52,000	$52,000
Reserves[9]	$10,400	$10,400
Taxes[10]	$179,950	$179,950
Utilities[11]	$123,297	$123,297
Underwriting Expense Adjustment[12]	$0	$8,959
Total Operating Expenses	$561,444	$570,403
Expense Ratio	38.1%	34.5%
Per Unit	$10,797	$10,969
Per Square Foot	$13.66	$13.88

Notes to the Operating Statement

[1] Additional Income: Utility bill-back of $36,000 and other income of $15,000, $51,000 combined, as carried in the model.

[2] Scheduled Gross Income: In-place scheduled rent from the model's Rent Roll Summary, $1,480,135.68. That is the SCHEDULED column: Gross Potential Rent of $1,666,800 less a Loss to Lease of $186,664.

[3] Contract Services: Landscaping, pest control and recurring service contracts, carried from the model.

[4] General Administrative: Accounting, legal, bank fees and licences, carried from the model.

[5] Insurance: Carried from the model at the property's underwritten premium.

[6] Management Fee: Carried at 5.00% of Gross Scheduled Rent. The LAAA standard is 4.00%, so this is the more conservative figure and it is followed as the model was written.

[7] Manager: On-site management. California requires a manager in residence at 16 units or more. The manager here is compensated as a reduced tenant rent embedded in the model rather than as a separate salary line.

[8] Repairs Maintenance: Carried from the model.

[9] Reserves: Replacement reserves, carried from the model. Lenders require a reserve line in underwriting.

[10] Taxes: Reassessed to the recommended price at 1.22%, the rate implied by the model's tax line of $179,950.00. Flat direct assessments are carried at zero because the itemized bill is not in the deal folder, which is the documented treatment when the itemization cannot be read.

[11] Utilities: Owner-paid utilities and trash, carried from the model.

[12] Underwriting Expense Adjustment: Aggregate difference between classified T12 expense lines and the modeled current and pro forma operating expense totals.

Owner-reported figures are unaudited. A buyer should verify all income and expenses in due diligence.

Summary

Operating Data
Price	$14,750,000
Number of Units	52
Price per Unit	$283,654
Price per SF	$358.89
Current GRM	9.97
Market GRM	8.85
Current Cap Rate (LAAA calculation: current NOI / recommended value)	6.17%
Market Cap Rate (LAAA calculation: market NOI / recommended value)	7.33%

Acquisition Structure
Structure	All Cash
Equity Required	$14,750,000

$14,750,000, or $283,654 per unit and $359 per SF. That is a 6.17% cap on current net operating income of $910,487 and a 9.96 gross rent multiplier on Gross Scheduled Rent of $1,480,136. Operating expenses run 38.14% of effective gross income. The recommended range is $14,250,000 to $15,250,000.

Recommended List Price

$14,750,000

Supported value range: $14,250,000 to $14,750,000

Disclosures

Stabilized basis. The pro forma reflects the building at full market rate occupancy. At the August 2026 rent roll 8 units were vacant and 7 were in active eviction, 15 of 52 or about 29%. The pro forma assumes those units are recovered and re leased at market. Owner collections for calendar 2025 were $1,226,612.

Real estate taxes are reassessed to the recommended price. Measure ULA applies a 5.5% transfer tax on a sale above $10M in the City of Los Angeles.