The Regency Apartments

Transcription

1 The Regency Apartments BPO Value Snap Shot Summary 1. Income Approach: $ 45 /SF $3,337, Sales Comparables: $ 56 /SF $4,200, Broker feels that values must be based on the income approach. The market has changed so dramatically in the past twelve months that any comparables from 2008 and the first part on 2009 are irrelevant. Even CAP rates are difficult to use as a barometer because recent sales are so few. It is our opinion that the property will sell for a price between $3,337,000 to 3,670,000 Property Summary Address: Product Type: 3403 Airport Road Carson City, NV Apartment Complex Building SF 874,056 Year Built: 2002 Current Vacancy: 9% Property Description: The Regency Apartments are located on the NEC of Collage Parkway and Airport Road in Carson City, Nevada. The subject development consists of 78 apartment units disbursed through 13 individual two story buildings, on 4.08 acres, constructed in Stucco exteriors, tile roofs and it appears most units have an attached single car garage. Amenities consist of a family park. Adjacent land uses consist of an airport to the north, various types of residential to the east, south and west. Property Rating: Non Competitive Average Very Competitive Class: A B C Property Condition: Property is in good condition. However, a few visible deferred maintenance issues exist. Some clean up required near garbage facilities and around the parameter of the subject property.

2 Curb Appeal: Good curb appeal, one of the nicer apartment complexes in the area. Neighboring properties are in poor condition therefore effecting values in the area. Attached garages and security features of parameter walls and fencing TENANT & SPACE ROSTER

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5 ANNUAL PROPERTY OPERATING DATA Name: The Regency Apartments Date: July 1, 2010 Address: Airport Road Price: Carson City, Nevada Size of Property: 78 Apartment Units Purpose: Equity: Existing Balance Payments Pmts/Yr. Int: Term 1 st. Potential 1 st. 2 nd. Assessed/Appraised Values: Land: $202, Improvements: $1,544, Personal Property: N/A Total: $1,747, Adjusted Bases as of N/A All Figures Annual: Comments:. 1. Potential Rental Income: $670, Less: Vacancy or Cr. Loss (11.5 %) $77, EFFECTIVE RENTAL INCOME: $681, Plus: Other Income (laundry): $ 0 5. Gross Operating Income: $593, Operating Expenses: /2010 Real Estate Taxes: $50, Property Insurance (fire/liability): $10, Off Site Management (10%): $60, Repairs & Maintenance: $59, Utilities: 10. Gas, Electric: $5, Trash $15, Water & Sewer: $26,364, Miscellaneous: $ (Promotion/Bank Chg., Office Exp.) Total Operating Expenses (38%): $226, Net Operating Income: $367,089.00

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7 BROKER OPINION OF VALUE The project like most projects in the area has been impacted by the severe recession. Rental rates are down in the area and vacancy rates are up. In a better market, rates for this complex would be 10% to 15% higher. However, there is no indication the market will see a significant recovery for the next two years. Putting a Value on the Property Most investors will Underwrite the project based on the following numbers. Looking at the comparable sales it would seem the value of this property should be in the $3,000,000 to $4,000,000 range. However, as noted before, the market has deteriorated dramatically in the past year. Based on the NOI reported, the property will not sell for anything more than a 10% to 11% CAP rate. A new management company may be able to take over and reduce expenses and possibly raise rents a little to raise the NOI. This would of course take some time. This BOV is based on the current income and expense of the property as of July Estimated Market Value A CAP rate rang of 10% to 11% has been applied indicating a market value of $3,337,000 to 3,670,000 OPERATING ASSUMPTIONS ACTUAL Vacancy %: 9% NOI/SF: $3,670, *(DATA FOR ACTUAL RENTAL RATE / SF FROM 11/09 RENT ROLLS) INVESTMENT ASSUMPTIONS Sale Comps / SF: $41 SF to $65 SF Direct Capitalization Rate: 10% VALUE CONCLUSION: It is the opinion of the Broker that a sales price between $ $3,337,000 to 3,670,000 can be achieved for this property based on the current NOI of the property.

8 JOHN PINJUV, SIOR President Multi-Family, Office Investment Property Specialties CAREER SUMMARY As the President of Grubb & Ellis NCG, John specializes in investment properties in the Northern Nevada area. EXPERIENCE John obtained his Nevada Real Estate license in He joined the Las Vegas Coldwell Banker Commercial (CB Richard Ellis) office in 1982 as a Multi-Family Investment Specialist. In 1984 he moved to Reno joining Real Properties Limited as a Multi-Family and Office Investment Specialist. He became Vice President of Commercial Division with RPL and then in 1995 formed Nevada Commercial Group which became Grubb & Ellis NCG in As President and Broker of the company, John has continued to specialize in the investment field of Multi-Family and Office product. His client list over the years has included Bank of America, Wells Fargo, Wickland Oil, AT&T, Bank of the West, and California Health Care Foundation, among many others. John has represented REO departments of a number of financial institutions offering leasing, disposition and receivership services. Grubb & Ellis NCG is a full service brokerage office servicing the entire area of Northern Nevada including the communities of Reno, Sparks, Lake Tahoe, Gardnerville, Fernley, Elko, Minden and other smaller towns. Management services are offered through a sister company, Nevada Commercial Services which is independently owned but housed in the same office building as Grubb & Ellis NCG Present Grubb & Ellis NCG President Multi-Family & Office Investment Specialties Real Properties Ltd Vice President of Brokerage Office Specialist, Multi-Family Investment Specialist CB Commercial Las Vegas, NV Multi-Family Specialist EDUCATION John received his BA in International Relations from the University of San Diego in PROFESSIONAL AFFILIATIONS John holds the SIOR (Society of Industrial and Office Realtors) designation and is active in the Economic Development Authority of Western Nevada (EDAWN).

9 RICK LAMAY, CCIM Vice President Investment Division Multi-Family Division CAREER SUMMARY Rick specializes in investment acquisitions/dispositions, landlord representation and concentrates on multi-family, hospitality and retail properties. With over 28 years of Real Estate experience, Rick has been involved and would be considered highly experienced in the acquisition/disposition of numerous apartment properties, major shopping centers and hotel/motel properties throughout the northern Nevada area. In addition Rick is an experienced investor and personally has invested and has an ownership interest in those same/similar property types. A partial client list includes: Wells Fargo Bank, US Bank, Bank of America, Great Western Savings, Protective Life Insurance, Albert B. Glickman & Associates, Franklin Real Estate Investment Fund, Donahue Schriber, Triple Net Properties, Union Pacific Railroad Company and Scolari s Food & Drug Company. EXPERIENCE LaMay Realty, Inc. Broker/Salesman LaMay Realty, Inc. Broker/President Present Grubb & Ellis NCG Senior Investment Advisor EDUCATION Rick attended local schools as well as the University of Nevada, Reno PROFESSIONAL AFFILIATIONS CCIM (Certified Commercial Investment Member) National Association of Realtors. Past President of the Northern Nevada Chapter. ICSC (International Counsel of Shopping Centers) National Association of Realtors Motel Association of Northern Nevada COMMUNITY ACTIVITIES Reno Rodeo Association and Ducks Unlimited Hobbies include: Family, Aircraft (licensed pilot), Motorcycles, Hunting and Fishing (in that order).