West Los Angeles, CA 90025
Sawtelle / Japantown
Prepared for Category Company
Glen Scher | Filip Niculete Senior Managing Directors of Investments
May 2026
NYSE: MMI
Section I
1775 Beloit Avenue is a newly constructed, premium-specification co-living asset in the Sawtelle / Japantown submarket of West Los Angeles, being acquired by Category Company for $7.90M — a 64% discount to the prior developer's all-in cost basis of approximately $22.00M. The acquisition is executed via lender foreclosure out of receivership, delivering clean title and eliminating any successor liability.
The 16-unit / 48-bed building was completed in 2023 by NMS Properties (the developer behind the Wilshire Margot conversion) but never reached stabilization. Adverse capital market conditions, the construction lender's insolvency, the developer's passing, and an abandoned direct sale to UCLA combined to leave the asset partially vacated (~58% occupied) and burdened with bloated receiver operating costs. At a stabilized return of cost of 7.20%, the in-place basis offers an exceptional risk-adjusted entry into a high-demand West LA submarket.
Category Company is the largest self-managed co-living operator in Los Angeles, with several properties in the immediate vicinity of 1775 Beloit. The business plan combines (i) immediate operational turnaround under Category's in-house property management platform, (ii) two ground-floor ADUs adding ~$62,400 in incremental annual rent, and (iii) a stabilization refinance into ~5.25% IO debt projected to return approximately 50% of invested equity within 12 to 18 months.
Specialist sponsor, distressed entry, and verified submarket demand support a wide LP appeal across yield and value buckets.
Section II
Section III
1775 Beloit Avenue was developed by NMS Properties as a ground-up co-living project. Construction began in 2019 and the building was completed in 2023 at a total development cost of approximately $22.00M. The improvements consist of Type II Steel-Frame construction across 7 stories above grade + 1 subterranean, an expensive high-rise typology that would be cost-prohibitive to replicate at today's construction pricing.
All co-living units are configured as two-story residences — a complex and high-cost design execution in a multistory building — with each of the five bedrooms within a co-living unit featuring its own private bathroom, built-in refrigerator, microwave, flat-screen television, and dedicated air conditioning system. The amenity package sits meaningfully above the standard co-living offering in the LA market.
The current footprint comprises 16 units and 48 bedrooms (8 studios at ~400 SF and 8 five-bedroom / five-bathroom co-living units at ~1,800 SF), with planned conversion of underutilized ground-floor space into two 1-bedroom ADUs, taking the property to 18 units / 50 beds.
| Address | 1775 Beloit Avenue |
| City, State, Zip | West Los Angeles, CA 90025 |
| Submarket | Sawtelle / Japantown |
| Year Built | 2023 (completed; construction begun 2019) |
| Developer | NMS Properties |
| Construction | Type II Steel-Frame |
| Stories | 7 stories above grade + 1 subterranean |
| Units (Existing) | 16 |
| Units (with ADUs) | 18 |
| Bedrooms (Existing) | 48 |
| Bedrooms (with ADUs) | 50 |
| Bathrooms | 48 (private bath per bedroom) |
| Rentable Floor Area | 23,670 SF |
| Gross Building Area | 35,198 SF (incl. parking basement) |
| Parking Spaces | 19 (6 dedicated to ADU units) |
| Developer Cost Basis | ~$22.00M |
| Acquisition Basis | $7.90M |
| Discount to Replacement | 64% |
| Unit Type | Units | Avg SF | Rent / Bed | Rent / Unit | Annual Gross Rent |
|---|---|---|---|---|---|
| Studio | 8 | 400 | — | $2,450 | $235,200 |
| 5BR / 5BA Co-Living | 8 | 1,800 | $1,570 | $7,850 | $753,600 |
| 1BR (ADU - Planned) | 2 | 550 | — | $2,600 | $62,400 |
| Total (with ADUs) | 18 | $1,051,200 |
Section IV
1775 Beloit Avenue sits one block off Sawtelle Boulevard, the spine of the Sawtelle Japantown district — one of West LA's densest and most-tenanted retail and dining corridors. The location benefits from immediate access to UCLA, the major employment centers of West LA (Century City, Westwood, Santa Monica), and a dense concentration of dining, retail, and neighborhood amenities. Together these support durable rental demand from young professionals, students, and workforce renters — the core tenant profile for co-living product.
Interactive map available in the web version of this presentation.
UCLA has been an active acquirer of co-living assets, most recently at $250,000 per bed in 2026. Category's per-bed basis at 1775 Beloit ($164,583) sits 34% below that institutional benchmark, providing both an exit reference and a margin-of-safety floor.
A newly constructed apartment building by California Landmark, two blocks south of 1775 Beloit, achieves in-place rents exceeding $2,300 per month on 375 SF micro-units. Co-living rooms at 1775 Beloit at ~$1,648 in place represent a ~28% discount to that new-construction studio benchmark.
The same developer (NMS Properties) successfully converted the Wilshire Margot in Westwood to co-living in 2018, achieving rents in excess of $2,000 per bed. This validates the West LA co-living rent ceiling well above the conservative $1,570 / bed underwriting at 1775 Beloit.
Section V
Three concurrent levers drive the path from in-place ~58% occupancy and bloated receiver opex to a stabilized 7.20% yield on cost within 12 to 18 months.
Category Management assumes immediately upon close. Receiver payroll and vendor contracts — currently running at approximately 3x Category's portfolio benchmark on properties twice the size — are replaced by Category's in-house platform. Leasing converts to by-the-bed; typical velocity of 1-3 leases per week on adjacent properties supports stabilized occupancy in ~12 weeks.
Two 1-bedroom ADUs are constructed on the ground floor using underutilized space, executed by Category's in-house construction capability for minimal additional basis. Each ADU generates ~$2,600 per month, contributing ~$62,400 annually in incremental gross rent. Total unit count rises from 16 to 18, bed count from 48 to 50.
Acquisition financing of $5.61M @ 6.25% IO is locked from RBB Bank (Prime - 50 bps, no prepay penalty, Sponsor PG). Upon stabilization, refinance into ~5.25% IO permanent debt — the same execution Category secured on a comparable co-living refinance in March 2026. The refi is projected to return ~50% of invested equity and lift stabilized cash-on-cash to ~17.52%.
Section VI
The acquisition basis at 1775 Beloit is the direct product of a stacked sequence of distress drivers, none of which are reflective of the asset's underlying quality or submarket fundamentals. Understanding the path the asset traveled to today's pricing is central to the underwriting case.
| Period | Event |
|---|---|
| 2019 - 2023 | NMS Properties develops the asset ground-up at a total cost basis of approximately $22.00M, encouraged by the 2018 success of the Wilshire Margot co-living conversion in Westwood (achieving $2,000+/bed). |
| 2023 | Building delivers into a materially changed capital market. Lease-up cannot support the cost basis or associated debt service at then-prevailing rates. |
| 2024 | Original construction lender (First Choice Bank) becomes insolvent. Debt assets — including the $16M note on 1775 Beloit — are sold to Enterprise Bank & Trust, an out-of-state acquirer with limited LA exposure. |
| 2024 - 2025 | The developer of the asset passes away. Enterprise Bank places the property into receivership. |
| 2025 | Prior to broad marketing, Enterprise pursues a direct sale to UCLA (active co-living acquirer at $250K / bed). The receiver begins vacating the building to enable a vacant-sale transaction. |
| 2025 - 2026 | Vacate strategy abandoned due to LA tenant buy-out regulations. Asset left at ~58% occupancy with bloated receiver opex. Direct UCLA path collapses; broad marketing initiated. |
| 2026 Q1 | Asset has no stabilized operating history; can't be priced on a cap-rate basis. Concurrently, Enterprise is navigating larger distressed positions from the First Choice acquisition — 1775 Beloit becomes a non-core resolution priority. |
| 2026 Q2 | Category submits an aggressive 5-day diligence offer leveraging in-house product expertise. Initial contract via deed-in-lieu. During diligence, Category identifies a previously undisclosed $45M second-position note the lender itself was unaware of. Category re-trades the price and requires foreclosure prior to closing — delivering clean title and eliminating successor liability. |
Section VII
| Item | Acquisition Loan | Permanent Loan |
|---|---|---|
| Purchase Price | $7,900,000 | $7,900,000 |
| Acquisition Fee (1.25%) | $98,750 | — |
| Working Capital (Closing, Lease-Up) | $140,725 | — |
| FFE & Misc Improvements | $50,000 | — |
| ADU Hard & Soft Costs | $396,000 | — |
| Financing & Closing Fees | $112,125 | $65,000 |
| Total Project Budget | $8,697,600 | $8,762,600 |
| Loan Amount | $5,606,250 | $7,407,396 |
| Rate (Interest-Only) | 6.25% | 5.25% |
| Annual Debt Service (IO) | $350,391 | $388,888 |
| Cash Flow After Debt Service (IO) | $275,966 | $237,469 |
| Peak Equity Required | $3,091,350 | $1,355,204 |
| Stabilized Cash-on-Cash (IO) | 8.93% | 17.52% |
| Stabilized Cash-on-Cash (P&I) | 6.86% | 10.00% |
| DSCR (P&I) | 1.51x | 1.28x |
| Income | Annual |
|---|---|
| Studio Rent (8 units) | $235,200 |
| Co-Living Rent (8 units / 40 beds @ $1,570/bed) | $753,600 |
| 1BR ADU Rent (2 units @ $2,600/mo) | $62,400 |
| Less Concessions | ($3,602) |
| Parking (19 spaces @ $150) | $34,200 |
| Trash & Internet (50 beds @ $30) | $18,000 |
| RUBS (50 beds @ $55) | $33,000 |
| Misc Fees (50 beds @ $41) | $24,556 |
| Gross Potential Rent | $1,157,355 |
| Less Vacancy / Collection Loss (6.2%) | ($71,756) |
| Effective Gross Income | $1,085,599 |
| Operating Expense | Basis | Annual |
|---|---|---|
| Bad Debt | 1.75% of revenue | $19,192 |
| Advertising & Marketing | $143.75 / unit / mo | $27,600 |
| Contract Services | Landscape, elevator, etc. | $18,188 |
| Cleaning | $0.96 / SF | $22,641 |
| Turnover | $107.14 / turned unit | $5,143 |
| Community & Shared Goods | $13.00 / co-living bed / mo | $6,240 |
| General & Administrative | $33.33 / unit / mo | $19,998 |
| Insurance | $0.90 / SF | $21,277 |
| Payroll | Lump sum | $83,338 |
| Professional Fees | $42.67 / unit / mo | $25,600 |
| Repairs & Maintenance | $1,761.90 / mo | $21,143 |
| Utilities + Internet | $130.76 / unit / mo | $78,457 |
| Property Taxes | 1.11% of assessed value | $95,325 |
| Management Fee | 2.50% of revenue (self-manage) | $27,417 |
| Total Operating Expenses | 38.37% of EGI · $786 / bed / mo | $471,559 |
| NET OPERATING INCOME (Stabilized) | $626,357 |
