BROKER'S OPINION OF VALUE

Transcription

1 BROKER'S OPINION OF VALUE A 80 Unit Class C Multi-Family Asset ashford point dr, Houston, TX San Felipe Suite 355 Houston, TX

2 APARTMENTS FOR SALE $6,850,000 PRICE/UNIT: $41,768 PRICE/SF: $50.03 Units: 164 TERMS: ASSUMPTION Avg Size: 835 PRO-FORMA CAP RATE: 8.27% Date Built: 1983 Rentable Sq. Ft.: 136,911 Stabilized Value 8.25% $7,361,751 Acreage: 5.12 Est $2,000/unit $328,000 Occupancy: 94% Est. Entrepreneurial Profit $164,000 Class: B Est. Carry to Stabilization $0 Stabilized NOI $607,344 Asking Price $6,850,000 SALIENT FACTS: Available on an Assumption Basis Located in the Alief area of SW Houston White/Blue collar tenant profile Good access to the Westpark Tollway and downtown Possible FNMA resizing after future stabilization Very attractive asset! Seller reports a $700K rehab was done Extremely attractive courtyards Well maintained asset near Dairy Ashford and Westheimer For More Information Please Contact: KET Enterprises Tom Wilkinson twilk4@ketent.com (713) ext 102 MARK KALIL & ASSOCIATES, INC Mark Kalil mark@markkalil.com (713)

3 Number of Units Physical Information Asking Price Est Mkt Rent (Jan-14) Avg Unit Size 835 Price Per Unit $41,768 Amortization (Months) 360 Estimated Collections $115,754 Net Rentable Area 136,911 Price Per Sq. Ft. $50.03 Debt Service $259,113 Physical Occ (Jan-14) 94% Land Area (Acres) 5.12 Stabilized NOI $607,344 Monthly P & I $21,593 Est Ins per Unit per Yr $566 Units per Acre Stabilized Value 8.25% $7,361,751 Interest Rate 5.06% Property Tax Information Date Built 1983 Est $2,000/unit $328,000 Date Due 11/31/2021 Tax Rate (2013) Water Meter / Master RUBS Est. Entrepreneurial Profit $164,000 Est Res for Repl/Unit/Yr $ Tax Assessment $5,170,775 Elec Meter Indiv-E Est. Carry to Stabilization $0 Yield Maintenance Yes 2013 Taxes $140,000 Roof Style Pitched Calculation of Value $6,869,751 Est Future Tax Assessment $5,480,000 HVAC System Indiv-E *Current Value is Stabilized Value less Rehab, Profit and Carry Est Future Taxes $148,373 INCOME PRO-FORMA INCOME Current Street Rent with a 3% Increase 1,548,337 Estimated Gross Scheduled Income 1,548,337 Estimated Loss to Lease (2% of Total Street Rent) (30,967) 2% Estimated Vacancy (6% of Total Street Rent) (92,900) 6% Estimated Concessions and Other Rental Losses (6% of Total Street Rent) (92,900) 6% Estimated Utilities Income Estimated Other Income 68,244 Estimated Total Rental Income 1,461,995 ESTIMATED TOTAL PRO-FORMA INCOME 1,461,995 3 Mo Average Income EXPENSE Fixed Expenses Taxes Insurance Total Fixed Expense Utilities Electricity Water & Sewer Gas 164 Financial Information $119,144 $92,834 $43,514 $82,136 Jan '13 thru Dec '13 Expenses Fixed Expenses $726 per Unit $566 per Unit Utilities $265 per Unit $6,850,000 MODIFIED ACTUALS $501 per Unit $1,389,048 Existing Loan Parameters Mortgage Balance Owner's 12/13 OS PRO-FORMA Estimated Expenses Estimated Fixed Expenses Estimated Utilities $12,520 $76 per Unit $12,520 $76 per Unit 2013 Tax Protest $129,028 / Mo $129,028 / Mo 62,181 $379 / Unit / Yr $416 / Unit / Yr $121,833 / Mo $92,834 $566 per Unit Estimated 211,978 $1,293 per Unit 241,207 $1,471 per Unit Total Utilities 138,170 $843 per Unit 138,170 $843 per Unit Other Expenses Other Expenses Estimated Other Expenses General & Admin & Marketing Repairs & Maintenance Labor Costs Contract Services - Including Trash Removal $65,292 $69,215 $208,868 $50,867 $398 per Unit $422 per Unit $1,274 per Unit $310 per Unit $65,292 $82,000 $180,400 $50,867 $398 per Unit $500 per Unit $1,100 per Unit $310 per Unit Management Fees $38, % $235 per Unit $47, % $290 per Unit Total Other Expense 432,744 $2,639 per Unit 426,074 $2,598 per Unit Total Operating Expense 782,892 $4,774 per Unit 805,451 $4,911 per Unit Reserve for Replacement 49,200 $300 per Unit 49,200 $300 per Unit Total Expense 832,092 $5,074 per Unit 854,651 $5,211 per Unit Net Operating Income (Actual Underwriting) 556, ,344 Asking Price 6,850,000 "As-Is" Cost 7,342,000 "All In" Price Cap Rate Existing Debt Equity Existing Debt Service Cash Flow Cash on Cash 8.13% 3,876,000 2,974, , , % 8.27% 5,139,400 2,202, , , % $148,373 $3,876,000 $905 per Unit $43,514 $265 per Unit Operating Information DISCLAIMER: The information contained herein has been obtained from sources that we deem reliable. We have no reason to doubt the accuracy of the information, but we have not verified it and make no guaranty, warranty or representation about it. It is your resonsibility to independently confirm its accuracy and completeness. We have not determined whether the property complies with deed restrictions or any city licensing or ordinances including life safety compliance or if the property lies within a flood plain. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME OR EXPENSE AND PERFORM OR HAVE PERFORMED ANY INSPECTIONS TO VERIFY POSSIBLE CONTAMINATION BY ASBESTOS, LEAD PAINT, MOLD OR ANY OTHER HAZARDOUS SUBSTANCES. The owner reserves the right to withdraw this listing or change the price at anytime without notice during the marketing period. $82,136 $501 per Unit NOTES: ACTUALS: Actuals are based on owner's December 2013 trailing operating statement. PRO FORMA: Insurance is estimated. Taxes are based on owner's 2013 finalized tax protest. All other expenses are estimated. 2/7/2014 VanderbiltCourt.xlsx $125,270

4 Feb 2013 Mar 2013 Apr 2013 May 2013 June 2013 July 2013 Aug 2013 Sept 2013 Oct 2013 Nov 2013 Dec 2013 Jan 2014* PROPERTY OVERVIEW Keymap: 528D Construction Quality: B PROPERTY INFORMATION AMENITIES EXISTING MORTGAGE TAXING AUTHORITY - HARRIS COUNTY Age: 1983 Access Gates Park & Ride Nearby Mortgage Balance $3,876,000 ACCT NO: ;32 Elec Meter: Indiv-E Cable Ready Walk-In Closets Amortization (months) 360 Alief ISD $ A/C Type: HVAC-Indiv Club House School Bus Pick-up P & I $21,593 Harris County $ Water: RUBS Laundry Rooms Shuttle Route Type FNMA Harris County Flood Control $ Wiring: Copper Mini Blinds Patios/Balconies Assumable Yes Port of Houston Authority $ Roof: Pitched Pool Monthly Escrow Yes Harris County Hospital District $ Paving: Concrete Bookshelves Origination Date 10/31/2011 Harris County Education Dept $ Materials: Brick/Wood Outside Storage Due Date 10/31/2021 City of Houston $ # of Stories: 2 Ceiling Fans Interest Rate 5.06% Houston Community College $ Parking: 252 Yield Maintenance Yes Buildings: 7 Transfer Fee 1%+app+legal 2013 Tax Rate/$100 $ Units/Acre: *In Select Units 2013 Tax Assessment $5,263,142 COLLECTIONS UNIT MIX No. Total 3 Mo Avg $ 115,754 Type Units Sq Ft SqFt Rent Total Rent Rent/SF $120,000 Jan 2013 $ 98,094 Efficiency ,500 $535 $10,700 $1.13 Feb 2013 $ 100,962 $115,000 1 Bed/1 Bath ,248 $665 $5,320 $1.01 Mar 2013 $ 104,092 1 Bed/1 Bath ,200 $675 $10,125 $0.99 Apr 2013 $ 100,162 $110,000 2 Bed/1 Bath ,823 $680 $4,760 $0.99 May 2013 $ 107,009 2 Bed/1 Bath ,870 $695 $12,510 $0.97 $105,000 June 2013 $ 107,406 2 Bed/2 Bath ,770 $775 $1,550 $0.88 July 2013 $ 107,177 $100,000 2 Bed/2.5 Bath ,675 $874 $21,840 $0.92 Aug 2013 $ 104,497 2 Bed/2 Bath ,976 $825 $3,300 $0.83 Sept 2013 $ 109,391 $95,000 2 Bed/2 Bath ,986 $825 $11,550 $0.83 Oct 2013 $ 115,720 $90,000 2 Bed/2.5 Bath ,625 $845 $21,125 $0.86 Nov 2013 $ 116,387 2 Bed/2.5 Bath ,198 $865 $19,030 $0.86 Dec 2013 $ 112,492 2 Bed/2.5 Bath ,040 $865 $3,460 $0.86 Jan 2014* $ 118,383 Source: Rent Schedule 1/20/14 PLEASE DO NOT VISIT THE SITE WITHOUT AN APPOINTMENT MADE THROUGH THE BROKER. Total / Avg ,911 $764 $125,270 $0.91 PROPERTY HIGHLIGHTS Vanderbilt Court is a 164 unit garden style apartment complex, located on Ashford Point Dr. in the Alief area of southwest Houston, off Dairy Ashford and Westheimer. The access-gated property provides pools, covered parking, a fitness center, storage areas, playgrounds and laundry rooms. Residents enjoy cable ready units, walk-in closets, mini-blinds, ceiling fans, fireplaces, washer/dryers and patios/balconies. There is a gorgeous resort pool inside the courtyard! The owner purchased the asset a few years ago and did a nice rehab, including HVAC and roofing repairs, leasing office upgrades and repairs and approximately 50% of the interior appliances and flooring were replaced. Reportedly $700,000 was spent. Great value add opportunity!!! Units/Type 47% 12% 12% 14% 15% Efficiency 1 Bed/1 Bath 2 Bed/1 Bath 2 Bed/2 Bath 2 Bed/2.5 Bath The lender may consider resizing the loan to 75% LTV, with a minimum advance of $500,000, after the property stabilizes. The property has a RTC LURA covering 57 of the 164 units, but the rent caps have not been a limitation, per the owner. *January 2014 collections are per owner. Disclaimer: The information contained in this Memorandum reflects material from sources deemed to be reliable, including data such as operating statements, rent roll, etc. provided by the Owner. Notwithstanding, KET Enterprises Incorporated does not make any warranties about the information contained in this marketing package. Every prospective purchaser should verify the information and rely on his accountants or attorneys for legal and tax advice. This offer is As-Is, Where-Is. Answers to specific inquiries will have to be supplied by the Owner and are available upon request. Rates of return vary daily. No representations are made concerning environmental issues, if any. Possible preferred equity candidate.

5 PROPERTY LOCATION DIRECTIONS TO PROPERTY: From Downtown, take 59 south towards Victoria. Exit Hillcroft and make a right. Make a left onto Harwin. Harwin turns into Alief Clodine. Make a right onto Dairy Ashford Rd. Turn left onto Ashford Point. The property is on the left.

6 RENT COMPARABLES RENT COMPARABLES (January 2014 O'Connor & Associates) Property Name Yr Blt Occ #Units Sorted by Avg Rent/Unit Avg SF Avg Rent Rent/SF 1 Parque on Bellaire 7000 Cook Rd % $815 $ Abbey at Eldridge Ph I Briar Forest % $853 $ Hunters Point Piping Rock % $854 $ Park on Eldridge 3995 Eldridge % $918 $ ARIUM Briarforest Ph II Fallsview Ln % $942 $1.04 Totals/Averages Comps % $ Vanderbilt Court Ashford Point Dr % $764 $0.91 Sub-Market Averages(Alief) 90% 22, $ Houston Market Avgs 91% 591, $ VANDERBILT COURT APARTMENTS 4 1

7 SALES COMPARABLES SALES COMPARABLES (Sorted by Price/Sq. Ft.) Property Name Date Sold Price Sq. Ft. Price/Unit Price/SF Built Units 1 Broadmoor Beechnut 2 Park Village Rio Bonito 3 Beacon Hill 8110 Creekbend 4 Park on Eldridge 3995 Eldridge 5 Idlewood Park West Bellfort 2/13 $8,100, ,438 $34,468 $ /12 $15,000, ,214 $48,077 $ /12 $4,598,000 92,726 $38,000 $ /12 $3,580,000 61,624 $62,807 $ /12 $11,256, ,392 $42,000 $ Totals/Averages Comps $8,506, ,679 $45,070 $ Vanderbilt Court Ashford Point Dr $6,850, ,911 $41,768 $ VANDERBILT COURT APARTMENTS 1 3 5

8 AREA INFORMATION STATE OF TEXAS ECONOMY Job growth, sales tax collections both from business and consumer purchases as well as automobile sales, signal that the Texas economy has emerged from the recent recession. Another indicator that the state s economy has been comparatively healthy was the U.S. Bureau of the Census report that Texas added more people (nearly 4.3 million) than any other state between the census counts of 2000 and Entering 2011, more than half the jobs shed by employers during Texas shorter recession have already been recovered as our economy recovers more quickly than the U.S. as a whole. Nationally, only 13.4 percent of recession-hit jobs had been recovered ending Texas and the nation returned to economic growth in 2010, with the nation increasing its GDP by 2.8 percent and Texas increasing its GSP by 3.4 percent. Jobs Texas December 2010 unemployment rate was 8.3 percent, up from 8.2 percent in November. Texas total nonfarm employment increased by 20,000 jobs from November to December. Between December 2009 and December 2010, Texas gained 230,800 jobs. The U.S. gained 36,000 total nonfarm jobs in January The U.S. unemployment rate was 9.0 percent in January 2011, a 0.4 percent decrease from December. The Texas unemployment rate has been at or below the national rate for 47 consecutive months. Houston Economy Though Houston's energy industry has helped the city stave off the effects of the national recession, the city's economy has been enhanced by diversification resulting in 53% independence from the energy industry, which allows for a more robust economy and supports further commercial development. The economic diversification includes growth in high technology industries (computer and aerospace), medical research, health care, social assistance, and professional services. With its favorable incentives and accommodating infrastructure, Houston has quickly become a preferred international hub. The Port of Houston is the world's sixth largest port and ranks first in the United States in terms of international tonnage and second in total tonnage. Houston's infrastructure is also strengthened by three airports, which form the fourth largest airport system in the national and sixth largest in the world, as well as a massive trucking and rail system. Numerous Fortune 500 companies, multi-nationals, and domestic companies maintain operations here. Ranking third in the nation, there are 21 Fortune 500 companies that are headquartered in Houston, and more than half of the world's largest 100 non-us based corporations have operations in Houston. Houston is a major corporate center and its geographic advantage, incentive, stable economy, and growing workforce continue to attract corporations to relocate and expand here. Houston's economic base continues to diversify and decrease it dependence on energy. In fact, non-energy sectors have accounted for 87% of net job growth since 1987, further reducing Houston's vulnerability to downturns in the energy industry. With is rapidly expanding population and solid economic base, the city is primed to benefit from its growing international reputation as a global destination of choice for residents, tourists, and businesses alike. The Texas Workforce Commission estimates more than 2.5 million jobs exist in the Houston MSA. The workforce is characterized as young, educated, and highly skilled, which are attractive to businesses and support future job growth. Houston has the lowest median age, 32.8, of the nation's 10 largest metropolitan areas. Currently, more than 1/4th of all adult Houstonians have completed college, compared to 1/5th of the U.S. adult population. Houston has the lowest cost of living among the nation's 23 largest metropolitan area, a key contributor to Houston's ability to continually rank among the nation's most desirable cities for companies looking to relocate or expand their operations. Housing Thus far, Texas has weathered the national real estate crunch without significant damage to property values. Sales and construction activity dropped to pre-2007 levels but began to shows signs of recovery in A total of 4,170 building permits for single-family homes were issued in December 2010, 887 fewer than a year ago. In the 12 months ending in December 2010, 62,980 permits were issued, 1 percent less than one year ago. The number of multi-family building permits issued rose from 989 in December 2009 to 1,200 in December During the 12 months ending in December 2010, 18,716 permits were issued, 12 percent more than one year ago. In December 2010, sales of existing single-family homes increased by 16 percent from the previous month, to a total of 15,752. December 2010 home sales were 3 percent lower than in December In Texas, the median price for existing single-family homes increased by 4.1 percent from December 2009 to December Texas experienced foreclosure filings in January Consumer Confidence Index U.S. consumer confidence increased by 14 percent from December 2010 to January 2011, rising to Consumer Confidence now stands 7 percent higher than one year ago. The Texas region s consumer confidence index increased from 69.5 in December 2010 to 90.8 in January 2011, and is now up 26 percent from its level one year ago. Oil and Natural Gas Natural gas and oil production tax collections combined are 70 percent higher for the first five months of fiscal year 2011 compared to the same period in By contrast, fiscal 2010 oil and natural gas production tax collections combined were 24 percent lower than collections in After reaching a 2008 summer high closing price of $ to a low of $33.98 during February 2009, crude oil futures reached a settled price of $86.73 on Feb. 10, Similarly, natural gas futures prices have followed a similar path reaching a summer 2008 high of $13.58 and then falling to a Sept. 3, 2009 low of $2.51. Prices recently settled at $3.99 on Feb. 10, Taxes Texas sales tax receipts for January 2011 were 10.4 percent higher than for January For fiscal 2010, state sales tax receipts were down 6.6 percent from fiscal Motor vehicle sales tax collections for January 2011 were 19.6 percent higher than for January Nationally, leases accounted for 28.1 percent of new vehicle sales in November 2010, an increase of 15.6 percent from November Source: Texas Ahead, February 11, Texas Comptroller's Office

9 EDUCATION (AGE 25+) BUSINESS INCOME RACE AND ETHNICITY HOUSEHOLDS POPULATION DEMOGRAPHICS 1 Mile Radius 3 Mile Radius 5 Mile Radius 0% 2011 Estimated Population 17,690 73, , Projected Population 18,745 78, , Census Population 17,464 72, , Census Population 17,672 71, ,791 5% 14% Projected Annual Growth 2011 to % 1.3% 1.2% Historical Annual Growth 2000 to % 0.4% 21% 60% 2011 Median Age White Black Asian Other Hispanic 2011 Estimated Households 6,283 27,081 51, Projected Households 6,590 28,602 54, Census Households 6,195 26,708 50, Census Households 6,215 26,815 50,329 Projected Annual Growth 2011 to % 1.1% 1.1% Historical Annual Growth 2000 to % 0.1% 0.2% 2011 Estimated White 57.8% 45.2% 44.6% 2011 Estimated Black or African American 20.4% 32.3% 32.2% 2011 Estimated Asian or Pacific Islander 5.3% 5.0% 5.5% 2011 Estimated American Indian or Native Alaskan 0.8% 0.6% 0.5% 2011 Estimated Other Races 13.4% 13.9% 13.9% 44.6% Non-Hispanic 55.4% Hispanic 2011 Estimated Hispanic 44.6% 37.3% 37.1% 2011 Estimated Average Household Income $64,552 $64,708 $68, Estimated Median Household Income $60,157 $52,915 $53, Estimated Per Capita Income $23,080 $23,818 $25, Estimated Elementary (Grade Level 0 to 8) 15.4% 12.0% 11.8% 2011 Estimated Some High School (Grade Level 9 to 11) 8.3% 8.1% 8.0% 2011 Estimated High School Graduate 25.7% 24.5% 23.8% 2011 Estimated Some College 17.5% 20.5% 19.8% 2011 Estimated Associates Degree Only 4.7% 5.1% 5.1% 2011 Estimated Bachelors Degree Only 17.1% 18.4% 19.2% 2011 Estimated Graduate Degree 11.4% 11.4% 12.3% Estimated Total Businesses 270 1,491 3, Estimated Total Employees 2,330 11,271 26, Estimated Employee Population per Business Estimated Residential Population per Business Subject Houston

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12 Vanderbilt Court

13 A 268 UNIT CLASS "B-/C+" GARDEN APARTMENT COMMUNITY

14 EXCLUSIVELY PRESENTED BY FOR MORE INFORMATION ON THIS PROPERTY PLEASE CALL: TOM WILKINSON, Broker KET ENTERPRISES INCORPORATED 4295 San Felipe, Suite 355 Houston, TX Tel: (713) Fax: (713) (713) xt 102 or MARK KALIL, Broker (713) and MARK KALIL & ASSOCIATES, INC Kirby, Suite 1000 Houston, TX Houston, TX Tel: (713) Fax: (713) Disclaimer: The information contained in this Memorandum reflects material from sources deemed to be reliable, including data such as operating statements, rent rolls, etc. However, we (KET Enterprises Incorporated, any of the Owners or officers, directors, employees, agents or representatives of any such entities) have not verified its accuracy and make no guarantee or representation about it. It is submitted subject to the possibility of errors, omissions, change of rental or other conditions. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. We make no representations or warranties, expressed or implied, as to the validity, accuracy or completeness of the information provided or to be provided, and nothing herein shall be deemed to constitute a representation, warranty or promise by any such parties as to the future performance of the Property or any other matters set forth herein. You and your tax and legal advisors should verify the information and rely on his accountants or attorneys for legal and tax advice. Rates of return vary daily. No representations are made concerning environmental issues, if any.