Offering Memorandum NORMANDY ARMS th Avenue E Seattle, WA. Exclusively offered by Paragon Real Estate Advisors

Transcription

1 Offering Memorandum NORMANDY ARMS th Avenue E Exclusively offered by Paragon Real Estate Advisors 1

2 Offering Summary Paragon Real Estate Advisors is proud to exclusively offer for sale the 16-unit Normandy Arms Apartments. Located in the sought-after neighborhood of North Capitol Hill in Seattle, Normandy Arms is a classic brick veneer building that has been well maintained by the long-term ownership group. This is the first time the property has been on the market in 25+ years, and offers the Buyer an excellent opportunity to purchase a pride-of-ownership property located within one of the strongest rental neighborhoods in Seattle. Name Normandy Arms Address th Ave E, Seattle WA Total Units 16 Built 1930 Square Feet 8,913 Net Rentable Price $5,000,000 Price Per Unit $312,500 Price Per Foot $ Current GRM/CAP 17.71/3.52% (2% Vacancy) Market GRM/CAP 14.42/4.54% (4% Vacancy) Expense Per Unit $6,621/Year (Market) Parcel Number (King County) Lot Size 5,951 Square Feet Zoning LR3 Urban Village NORMANDY ARMS APARTMENTS 2

3 Investment Highlights First time on the market in 25+ years Potential to add up to 5 units in the laundry, storage and garage area Classic Anhalt style design Four-story, brick veneer wood-framed construction Private courtyard setting, intercom entry Secured entry Efficient one bedroom and studio units 7 secured garage parking spaces 3

4 Neighborhood Map PUGET SOUND FIRST HILL SEATTLE CBD SOUTH LAKE UNION QUEEN ANNE NORMANDY ARMS APARTMENTS LAKE UNION CAPITOL HILL 4

5 Location Highlights Positioned between amenity-rich 15th Avenue E and Broadway Avenue arterials 5 minute walk to the flagship Broadway Capitol Hill Light Rail Station Walkscore of 95 Walker s Paradise One mile to Downtown, South Lake Union, and Amazon headquarters 48-acre Volunteer Park to the North Nearby Millionaire s Row on 14th Avenue E Group Health Hospital within 4 Blocks 5

6 Capitol Hill Capitol Hill is situated on a hill just east of the city s downtown central business district. This popular residential neighborhood is funky and fast-paced, with an endless number of cool blocks to explore. During the day, markets, boutiques, and salons are a big draw. Nightlife is hopping with clubs, bars, and music venues, and you ll often find coffee shops that moonlight as cocktail lounges This desirable location contains some of Seattle s wealthiest neighborhoods, including Millionaire s Row along 14th Avenue E, a charming collection of single family residences on tree-lined streets, and the Harvard-Belmont Landmark District. It also has many distinguished apartment houses, including several designed by the distinguished builder Fred Anhalt, of which the subject is modeled after.. The demand for Capitol Hill apartments continues to rise as nearby Amazon.com continues its feverish hiring pace alongside other technology companies that are hiring as well as relocating to the South Lake Union area. This location is also home to longstanding health care providers including Swedish Medical Center, Group Health and Virginia Medical Center. Nearby Seattle University and Seattle Central College provide a consistent base to the apartment demand in the area. The neighborhood figures prominently in nightlife and entertainment, with many bars hosting live music and with numerous avant garde theaters. Most of the Hill s major thoroughfares are dotted with coffeehouses, taverns and bars, and residences cover the gamut from modest motellike studio apartment buildings to some of the city s most historic mansions, with the two types sometimes shoulder-to-shoulder. To the north is Capitol Hill s largest and most popular public park. The 48 acre Volunteer Park is home to Seattle s Asian Art museum, tennis courts, a conservatory, and a variety of city-wide events. 6

7 Transportation Capitol Hill has many transportation options available to make traversing the Seattle Metro area easier. The long planned Capitol Hill link light rail station located on Broaday opened in March of It is situated between the Westlake and University of Washington stations on the 3.15-mile-long University Link Extension, which runs from Downtown Seattle to the University of Washington campus. This station consists of an island platform below a split mezzanine with three surface entrances. King County Metro offers multiple routes in the Capitol Hill area that make connections to other transit methods easy and hassle free. Routes 8, 10, 43, 49 and 60 all operate in the neighborhood and offer services to downtown with frequent trips scheduled daily. Connections at the surface level include the First Hill Streetcar and several King County Metro bus routes, while the former staging area surrounding the station entrances will be redeveloped into transit-oriented, mixed-use buildings with affordable housing. The First Hill Streetcar offers regular service from Capitol Hill to downtown. There are 10 stops on the First Hill Streetcar line, connecting the diverse and vibrant residential neighborhoods and business districts of Capitol Hill, First Hill, Yesler Terrace, Central Area, Chinatown- International District and Pioneer Square, while also serving major medical centers, institutions of higher learning and major sporting event venues. 7

8 Employment Greater Seattle excels at the industries of the future - the region is a center of innovation and features some of the world s top global brands. Our aerospace industry is one of the largest in the world, home to Boeing Commercial Airplanes and over 800 aerospace firms that employ 17% of all aerospace workers in the United States. Greater Seattle is also a leading center for information and communications technology, bolstered by industry pioneers such as Microsoft and Amazon. As a result, our region has emerged as a world leader in cloud computing and data visualization, and ranks 4th as a global startup hub ahead of New York and Boston. > > Adobe > > Alaska Airlines > > Amazon > > Apple > > AT&T Wireless > > Boeing > > Costco > > Expedia, Inc. > > Expeditors International > > F5 Networks > > Facebook > > Fred Hutchinson > > Gates Foundation > > Getty Images > > Google > > Microsoft > > Nintendo > > Nordstrom > > Paccar > > RealNetworks > > REI > > Russell Investments > > SpaceX > > Starbucks > > Symetra Financial > > Tableau Software > > T-Mobile > > Twitter > > Uber > > University of Washington > > Virginia Mason > > Weyerhaeuser > > Zillow > > Zulilly 8

9 Neighborhood Amenities AMENITIES FOOD/DRINK SERVICES 1. Roy Street Coffee and Tea 2. Poppy 3. Lowell Elementary School 4. Starbucks 5. Julia s on Broadway 6. QFC 7. Gold s Gym 8. Capitol Hill Branch Library 9. Orange Theory Fitness 10. Tacos Chukis 11. Light Rail Station 12. Cal Anderson Park 13. Broadway Hill Park 14. Volunteer Park 15. Canterbury Alehouse 16. Liberty 17. Jamjuree 18. Walgreens 19. Rudy s Barbershop 20. UPS 21. Coastal Kitchen 22. Victrola Coffee And Art 23. The Wandering Goose 24. Palermo Pizza and Pasta 25. Smith 26. Starbucks 27. Group Health Eye Care 28. Group Health Campus 29. Safeway 30. Wells Fargo Bank 31. Bakery Nouveau Route #49 Route #10 11 Light Rail NORMANDY ARMS APARTMENTS Route #

10 Improvements 1930 wood-frame, brick veneer construction Efficient floorplans consisting of 7 studios and 9 one-bedroom units Secured entrance Private courtyard, Anhalt style design Hard surface flooring Electric baseboard heat Central gas fired hot water Common laundry room 7 car garage parking Potential to reconfigure laundry, storage and garage area to add up to 5 additional units 10

11 Building Photos 11

12 Building Photos 12

13 Unit Photos 13

14 Unit Photos 14

15 Basement Floor Plan Boiler Room Storage Room Laundry Room Storage Room Small Studio Parking Garage 15

16 Typical Floor Plan 1 Bd/1 Bth Studio Studio 1 Bd/1 Bth 1 Bd/1 Bth 16

17 Basement Floor Plan With Potential Additional Units - Concept A Add 4 Apartment Units which adds Approximately 2,150 Rentable SF Bed Room Living Room Analysis Provided By Christopher Day Bed Room Kitchen Bed Room Bath Bath Kitchen Living Room Living Room Existing Studio Bath Living Room Bed Alcove Bed Alcove Kitchen Bath Closet Laundry Kitchen The information found in this offering memorandum has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. 17

18 Basement Floor Plan With Potential Additional Units - Concept B Bed Room Living Room Add 5 Apartment Units which adds Approximately 2,150 Rentable SF Analysis Provided By Christopher Day Bath Kitchen Studio Bath Bath Kitchen Living Room Living Room Existing Studio Studio Kitchen Bed Alcove Bed Alcove Kitchen Bath Closet Laundry The information found in this offering memorandum has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. 18

19 Rent Roll Unit Type Approx Sq.Ft. Current Rent Rent/Sq.Ft. Market Rent Rent/Sq.Ft A Small Studio 375 $950 $2.53 $1,295 $ Bd/1 Bth 643 $1,625 $2.53 $1,795 $ Bd/1 Bth 647 $1,200 $1.85 $1,795 $ Studio 455 $1,200 $2.64 $1,475 $ Studio 430 $1,125 $2.62 $1,475 $ Bd/1 Bth 660 $1,450 $2.20 $1,795 $ Bd/1 Bth 643 $1,625 $2.53 $1,795 $ Bd/1 Bth 647 $1,450 $2.24 $1,795 $ Studio 455 $1,150 $2.53 $1,475 $ Studio 455 $1,200 $2.64 $1,495 $ Bd/1 Bth 660 $1,450 $2.20 $1,795 $ Bd/1 Bth 643 $1,600 $2.49 $1,795 $ Bd/1 Bth 630 $1,625 $2.58 $1,795 $ Studio 455 $1,295 $2.85 $1,475 $ Studio 455 $1,295 $2.85 $1,475 $ Bd/1 Bth 660 $1,900 $2.88 $1,950 $2.95 TOTALS 8,913 $22,140 $2.48 $26,453 $

20 Operating Summary Units 16 Year built 1930 Rentable Area 8,913 Sq.Ft. Down Payment $2,500,000 50% Loan Amount $2,500,000 50% Interest Rate 4.00% Amortization 30 Years Units Type Size Current Rent Price $5,000,000 Price Per Unit $312,500 Per Square Foot $ Current GRM Current CAP 3.52% Market GRM Market CAP 4.54% Monthly Income Market Rent Monthly Income 1 Small Studio 375 $950 $950 $1,295 $1,295 6 Studio 451 $1,125 - $1,290 $7,265 $1,475 $8, Bd/1Bth 648 $1,200 - $1,900 $13,925 $1,812 $16, Avg S.F. 574 $1,384 $2.48 $1,527 $2.97 Total Monthly Income Monthly Scheduled Rent $22,140 $26,453 Parking - 7 Garages 2016 $445 $150/space $1,050 Utility Income $40/$50 $750 $65/$75 $1,065 Laundry Income 2016 $113 Proforma $160 Misc/Other Income Current $80 Proforma $160 Total Monthly Income $23,528 $28,888 Annualized Operating Data Current Market Scheduled Gross Income $282,336 $346,656 Less Vacancy 2.0% $5, % $13,866 Gross Operating Income $276,689 $332,790 Less Expenses $100,876 $105,931 Net Operating Income $175,814 $226,859 Annual Debt Service ($11,935) $143,225 $143,225 Cash Flow Before Tax 1.30% $32, % $83,635 Principal Reduction $44,026 $44,026 Total Return Before Tax 3.06% $76, % $127,660 Annualized Operating Expenses Current Market Real Estate Taxes 2017/Proforma $37,189 $40,000 Insurance 2016 $5,749 $5,749 Utilities 2016 $16,790 $16,790 Property Management Proforma (4%) $11,068 $13,312 On-Site Management ($40/unit/mo) $7,680 $7,680 Maint/Repairs/TO Proforma $14,400 $14,400 Landscaping Proforma $2,400 $2,400 Misc & Admin Proforma $800 $800 Reserves Proforma $4,800 $4,800 Total Expenses $100,876 $105,931 Current Operations Expenses/Unit Expenses/Foot Percent of EGI $6,305 $ % Market Operations Expenses/Unit Expenses/Foot Percent of EGI $6,621 $ % 20

21 Sale Comparables SUBJECT - NORMANDY ARMS th Ave E, Seattle WA Year Built 1930 Units 16 Sales Price $5,000,000 Price/Unit $312,500 Price/Foot $561 GRM/CAP 17.7/3.5% Sales Date TBD 2. PARK ON HIGHLAND DRIVE 1205 Queen Anne Ave N, Seattle WA Year Built 1948 Units 34 Sales Price $10,700,000 Price/Unit $314,706 Price/Foot $449 GRM/CAP 14.7/4.4% Sales Date DENN MANOR th Ave E, Seattle WA Year Built 1966 Units 11 Sales Price $4,225,000 Price/Unit $384,091 Price/Foot $390 GRM/CAP 18.9/2.9% Sales Date SUMMIT APARTMENTS 733 Summit Ave E, Seattle WA Year Built 1949 Units 52 Sales Price $17,000,000 Price/Unit $326,932 Price/Foot $538 GRM/CAP 14.8/4.3% Sales Date MCKEAN APARTMENTS th Ave W, Seattle WA Year Built 1928 Units 8 Sales Price $2,875,000 Price/Unit $359,375 Price/Foot $532 GRM/CAP 17.4/3.9% Sales Date HEATHER COURT th Ave E, Seattle WA Year Built 1952 Units 10 Sales Price $4,000,000 Price/Unit $400,000 Price/Foot $466 GRM/CAP 16.3/4.2% Sales Date

22 Sale Comparables 6. MALDEN HOUSE 425 Malden Ave E, Seattle WA Year Built 1969 Units 13 Sales Price $4,475,000 Price/Unit $344,231 Price/Foot $407 GRM/CAP 20.5/2.6% Sales Date WHITWORTH 1619 E John St, Seattle WA Year Built 1927 Units 54 Sales Price $18,230,000 Price/Unit $337,593 Price/Foot $425 GRM/CAP 15.3/4.2% Sales Date

23 Sales Comparables Map Normandy Arms th Ave E 1. Summit Apartments 733 Summit Ave E 2. Park on Highland Drive 1205 Queen Anne Ave N 3. McKean Apartments th Ave W Denn Manor th Ave E 5. Heather Court th Ave E 6. Malden House 425 Malden Ave E 7. Whitworth 1619 E John St NORMANDY ARMS APARTMENTS 7 23

24 Rent Comparables Property Units Age Unit Type Size Rent Rent/Sq.Ft. Comments Normandy Arms - Current th Ave E Small Studio Studio 1 Bd/1Bth $950 $1,125 - $1,290 $1,200 - $1,900 $2.53 $ $2.87 $ $3.02 Common laundry, storage lockers, garage parking, central hot water Normandy Arms - Market th Ave E Small Studio Studio 1 Bd/1Bth $1,295 $1,475 $1,812 $3.45 $3.27 $2.80 Market rents after turn-over upgrades 1. Winchester Apartments 605 E Denny Way Studio 1Bd/1Bth 2Bd/1Bth $1,295 $1,500 $1,875 $2.73 $231 $2.21 Common laundry, storage lockers, pet friendly, W/S/G billed back at $75/month 2. Littlefield Apartments th Ave E Studio 1Bd/1Bth $1,195 - $1,295 $1,395 - $1,595 $ $3.98 $ $3.00 Common laundry, some views, W/S/G billed back at $85 - $120/month, 6 garage spaces billed at $100/month 3. Blackstone Apartments 222 Summit Ave E Studio 1Bd/1Bth 3Bd/1Bth ,530 $1,195 - $1,295 $1,495 - $1,595 $2,395 $ $2.70 $ $1.89 $1.57 Common laundry, some views, W/S/G included in rent, 5 garages billed at $200 to $225/month and 2 open at $150/month 4. Austin Apartments th Ave E Studio 1Bd/1Bth $1,295 - $1,325 $1,550 - $1,645 $ $2.88 $ $2.40 Common laundry, fireplaces, pet friendly, W/S/G billed back at $85 - $120/month, 5 garage parking spaces billed at $100/month 5. Cornell Apartments 531 Malden Ave E Studio 1Bd/1Bth $1,095 - $1,295 $1,595 - $1,795 $ $2.56 $ $2.78 Common laundry, W/S/G billed back at $85 - $120/month, 5 garage parking spaces billed at $175/month 24

25 Rent Comparables Map Normandy Arms th Ave E 1. Winchester Apartments 605 E Denny Way 2. Littlefield Apartments th Ave E 3. Blackstone Apartments 222 Summit Ave E 4. Austin Apartments th Ave E 4 5 NORMANDY ARMS APARTMENTS 5. Cornell 531 Malden Ave E

26 Paragon Real Estate Advisors ABOUT PARAGON Paragon Real Estate Advisors is the leading Seattle real estate investment firm for multi-family property sales in Washington State. We have accrued over $3 billion in sales and have closed nearly 1,700 successful real estate transactions. We are locally owned, client-focused and highly experienced. When it comes to apartments and investment real estate in the Puget Sound region, we are the smart choice to partner with. At Paragon, we build long-term partnerships that help our clients reach their long- and short-term real estate investment goals while maintaining maximum profitability for them. Our brokers have an in-depth knowledge of the Washington state real estate market, particularly in the greater Seattle area and the I-5 corridor, that comes from more than 20 years experience in the industry. Paragon s unique focus on sharing knowledge, teamwork and collaboration within the brokerage industry leverages our collective intellect for all our clients. Our brokers provide superior customer representation through our innovative and effective marketing campaigns, co-brokerage, skilled negotiations, and ongoing partnerships. The information found in this offering memorandum has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. 26