Executive Summary
This Broker Opinion of Value evaluates 4615 N Kester Avenue — a 6,710-square-foot, R3-1 vacant development parcel in prime Sherman Oaks, north of Ventura Boulevard. The site is unimproved land with no relocation exposure and sits within a stack of housing-production incentives (TOC Tier 3, ED-1 eligible, AB 2334 / AB 2097, High Quality Transit Corridor, TCAC “Highest” opportunity area). We frame value around two distinct, market-tested build pathways a buyer can underwrite on day one.
Subject Property
Marcus & Millichap, in cooperation with LA Apartment Advisors, presents 4615 N Kester Avenue (also addressed 4617 N Kester Ave) — a 6,709.7-square-foot R3-1 vacant parcel in Sherman Oaks, 91403. The lot is flat, unimproved (County Use Code 050V — vacant residential land), and located within the Sherman Oaks–Studio City–Toluca Lake–Cahuenga Pass Community Plan (CD 4).
0.154 acres
Medium Residential GP
Vacant residential land
Blk 6 · Lot FR 28
Density-bonus eligible
100% affordable path
HQTC · reduced parking
OC-2 · TOIA 2
Nithya Raman
Outside flood; not hillside
Location & Aerial
Two Development Pathways
The land underwrites cleanly two ways. Both avoid discretionary entitlement, giving a buyer a shorter, lower-risk path to vertical construction. Unit counts shown are planning-level and subject to an architect's site study.
- Four detached homes @ 1,750 SF, each with a 500 SF ADU — fee-simple, sold individually to retail buyers.
- SB 1123 / SB 684 ministerial small-lot subdivision — vacant urban residential land in a Transit Priority Area; no discretionary review.
- Highest per-door value — retail homebuyers set the price; the ADU adds owner income.
- Two duplexes — four 3BR/3BA units — plus two 1BR/1BA ADUs for rent = 6 units.
- Fastest, lowest-risk path — by-right ministerial, no subdivision map, reduced parking under AB 2097.
- Hold for cash flow or sell stabilized to an income buyer; valued on rents, not retail $/SF.
- Citywide Housing Incentive Program (MIIP) — site sits in TOIA Tier 2 + Opportunity Corridor OC-2, a Higher-Opportunity area (TCAC “Highest”).
- Density bonus from ~90% over base in exchange for a covenanted affordable set-aside; no parking minimum; corridor podium scale.
- Maximizes units & gross value and cleanly satisfies the Housing-Element replacement obligation — a patient-capital / mission-developer play.
Development Pro Forma — Cost & Profit by Pathway
Each pathway is underwritten below from a common $1,600,000 land basis (the preliminary midpoint) so the seller can see what a developer nets under each plan. Figures are planning-level and rest on the stated cost, exit, and rent assumptions — not verified comps.
| Metric | A · 4-Home SB 1123 | B · Double Duplex | C · CHIP Mixed-Income |
|---|---|---|---|
| Units | 8 (4 homes + 4 ADUs) | 6 (4×3/3 + 2 ADU) | ~18 (~14 mkt + 4 aff) |
| Buildable area | 9,000 SF | 6,600 SF | ~16,500 SF |
| Exit | For-sale sellout | Rental hold / sale | Rental hold |
| Land cost | $1,600,000 | $1,600,000 | $1,600,000 |
| Development cost (ex-land) | $3,986,000 | $2,797,000 | ~$7,109,000 |
| Total project cost | $5,586,000 | $4,397,000 | ~$8,709,000 |
| Gross value | $7,000,000 sellout | $4,632,000 stabilized | ~$7,900,000 stabilized |
| Developer profit | $1,064,000 | $235,000 | Hold play — see note |
| Margin on cost / yield | 19.0% | 5.4% · 5.0% YoC | ~4.3% YoC |
Pathway A — 4-Home SB 1123 (For-Sale)
| Line item | Basis | Amount |
|---|---|---|
| Land | Preliminary midpoint | $1,600,000 |
| Hard construction — 4 homes + 4 ADUs | 9,000 SF × $275 | $2,475,000 |
| Garages | 1,760 SF × $150 | $264,000 |
| Site work & utilities | $20/SF × 6,710 SF | $134,000 |
| Soft costs — map, CDs, permits, fees, A&E | flat | $550,000 |
| Financing & carry | ~10% | $345,000 |
| Contingency | 5% hard + site | $144,000 |
| G&A / project mgmt | 3% hard | $74,000 |
| Total project cost (incl. land) | $5,586,000 | |
| Gross sellout — 4 homes @ ~$1,750,000 | 1,750 SF home + 500 SF ADU | $7,000,000 |
| Less sales & marketing | 5% | ($350,000) |
| Net sellout | $6,650,000 | |
| Developer profit | 19.0% on cost | $1,064,000 |
Pathway B — Double Duplex + 2 ADUs (Rental)
| Line item | Basis | Amount |
|---|---|---|
| Land | Preliminary midpoint | $1,600,000 |
| Hard construction — 4 units + 2 ADUs | 6,600 SF × $260 | $1,716,000 |
| Parking / garages | flat | $150,000 |
| Site work & utilities | $20/SF × 6,710 SF | $134,000 |
| Soft costs | flat (no map) | $425,000 |
| Financing & carry | ~10% | $228,000 |
| Contingency | 5% hard + site | $93,000 |
| G&A / project mgmt | 3% hard | $51,000 |
| Total project cost (incl. land) | $4,397,000 | |
| Gross scheduled income | 4 × $5,500 + 2 × $2,500 ×12 | $324,000 |
| Less vacancy | 3% | ($9,720) |
| Less operating expenses | ~30% | ($94,284) |
| Net operating income | $219,996 | |
| Stabilized value @ 4.75% cap | NOI ÷ 0.0475 | $4,632,000 |
| Build-to-sell profit · 5.0% yield-on-cost | value − cost | $235,000 |
Pathway C — CHIP Mixed-Income (Maximum Density)
Key Diligence Items
- Liquefaction zone — the parcel is mapped in a liquefaction area; a geotechnical/soils report will inform foundation design and cost. Not in an Alquist-Priolo fault zone; nearest fault (Hollywood) is 5.6 km.
- Just Cause for Eviction (JCO) applies; RSO does not apply (vacant land).
- Title & survey — confirm easements, the 17-ft building line, and dual-address status (4615 / 4617 Kester).
- Utilities & site work — standard infill connections; budget site work and any required dedications.
Land-Value Basis
This is a land transaction — value is set by what a developer pays for the dirt and the entitlement optionality, not by a finished-product cap rate. Pending the verified closed land-comp set, the following public, verifiable anchors frame the range:
| Anchor | Value | $/Lot SF | Source / Note |
|---|---|---|---|
| County assessed land value (2026) | $1,273,980 | $190 | LA County Assessor (improvement value $0) |
| Last sale (2017) | $1,225,000 | $183 | Recorded 07/07/2017 · 2017 dollars |
| Nearby R3 trade — 5453 Kester Ave (improved 4-unit, 91411) | $1,300,000 | — | Closed 03/07/2025 · context only (improved, not raw land) |
| Sherman Oaks median home value | ~$1,625,000 | ~$714/SF home | Q1 2026 market data · supports retail exit (Pathway A) |
Pricing Recommendation
Anchoring to the county's $190/SF assessed basis and adding a premium for the development optionality (two by-right pathways, TOC Tier 3, ED-1, prime north-of-the-boulevard location), while discounting for the Housing-Element replacement obligation and liquefaction soils, supports the following preliminary land-value range. This is a placeholder to be confirmed against the verified land-comp set.
Preliminary List Range
Strategic note: The recommended marketing approach leads with the optionality — two shovel-ready-adjacent build pathways plus a density-bonus/ED-1 upside — to a buyer pool of small-lot for-sale developers and by-right merchant builders active in the South Valley. The Housing-Element replacement question should be resolved (or pre-packaged with a compliant program) before or early in marketing, as it directly governs which buyers can underwrite the site. The range will be tightened once the verified closed land-comp set is in hand.
LAAA Land & Development Inventory
The LAAA Team actively markets for-sale development land and ground-up projects across Los Angeles County. Current land & development listings (laaa.com/listings):
The LA Apartment Advisors Team
LA Apartment Advisors (LAAA) is a Marcus & Millichap investment sales team specializing in multifamily, land, and for-sale development transactions across Los Angeles County. With 458+ transactions and over $1.46 billion in closed volume, we help property owners make confident investment decisions — whether buying, selling, or exploring the market.
(Trailing 3 Years)
Glen Scher is a Senior Managing Director at Marcus & Millichap and co-founder of the LAAA Team. A UC Santa Barbara graduate in Economics, Glen launched his career in 2014 and earned Rookie of the Year from the SFV Business Journal by 2016. A former Division I golfer, he captured three collegiate titles and was named UCSB Male Athlete of the Year.
Filip Niculete is a Senior Managing Director at Marcus & Millichap and co-founder of the LAAA Team. Born in Romania and raised in the San Fernando Valley, Filip studied Finance at San Diego State University and began his career at Marcus & Millichap in 2011. Known for execution, integrity, and relentless work ethic, Filip and the LAAA Team consistently lead the market in active inventory across Los Angeles.
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