Paragon. at Kierland. A 276-unit luxury apartment complex on the Westin Kierland Golf Course

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1 Paragon at Kierland NORTH 71ST STREET, SCOTTSDALE, AZ A 276-unit luxury apartment complex on the Westin Kierland Golf Course

2 The Paragon at Kierland Prospective purchasers will have the opportunity to visit the property via pre-scheduled property tours. These tours will include access to a sampling of units, maintenance, club house, workout facilities and management offices. In order to facilitate the property s ongoing operations, property visitation will require advance notice and scheduling. OFFER SUBMISSION Offers should be presented in the form of a non-binding Letter of Intent that includes price, earnest money deposits, due diligence, closing time frame, buyer qualifications and capabilities to close. PARAGON WEBSITE AND VIDEO LOCATIONS Click here to view The Paragon at Kierland video CONTACT TEAM LEADER Jerry J. Tenge Senior Vice President - Investments jerry.tenge@colliers.com PARAGON AT KIERLAND OFFERING MEMORANDUM COLLIERS INTERNATIONAL

3 EXECUTIVE SUMMARY Introduction Colliers International is pleased to announce the availability of The Paragon at Kierland ( Property ) in Scottsdale, Arizona. This investment opportunity consists of a 276-unit property totaling approximately 289,233 square feet. The community is immaculately maintained in a resort-like setting located on the Westin Kierland Golf Club. The property offers luxury one-, two- and three-bedroom floor plans with spacious layouts and modern day features, including ceramic countertops and full-size washer/dryer in every unit. The Paragon at Kierland is an excellent opportunity for an investor to acquire a luxurious, unique community in Scottsdale, Arizona. INVESTMENT HIGHLIGHTS Located on the Westin Kierland Golf Club at the Westin Kierland Resort & Spa Condo quality trophy asset Built 2000, renovated 2008 Density 26.6 units per acre Spacious floor plans that average 1,048 square feet Extensive resort-style amenity package Valued-add opportunity or condo sales opportunity or both Even though the property was partially upgraded in 2008, there is opportunity for the new owner to finish interior upgrades and continue to increase rents or to upgrade and sell as condominiums. The Paragon at Kierland is located in the elegant Scottsdale neighborhood of Kierland. This 640-acre master-planned community is anchored by the 736-room Westin Kierland Resort & Spa and the Westin Kierland Golf Club. The championship golf course has 27 holes and offers airconditioned golf carts, Segways or walking its manicured perfection. Afterward, the Agave Spa rejuvenates the mind, body and spirit, showcasing treatment s and healing from the Far East. More information is found at Adjacent to the Paragon is Kierland Commons, which reveals Valley shopping at its finest with over 70 retailers including Banana Republic, Coach, Barnes & Noble and Crate & Barrel to name a few. There are a variety of cuisines and restaurants available. Please visit for more information. THE PARAGON AT KIERLAND OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 2

4 EXECUTIVE SUMMARY AREA ATTRACTIONS You can walk to more than 30 fabulous restaurants and 100 specialty shops from the Paragon at Kierland. In addition, Scottsdale Airport is two minutes away for local or private flights to the Grand Canyon, Sedona, local ski resorts and is only 15 miles from Phoenix Sky Harbor Airport for international flights. Nearby is WestWorld of Scottsdale, home to The Scottsdale Arabian Horse Show, which has been raising funds for worthy charities since The annual event is sponsored by the Arabian Horse Association of Arizona and attracts thousands of visitors who watch over 2,000 Arabian vie for prize money in various classes of competition. Please visit for additional information. The Greatest Show on Grass, also known as the WM Phoenix Open, had its 78 th playing of this event in early February 2013 at the TPC Scottsdale. Please visit for additional information. The annual Barrett Jackson Auction was held in January 2013 at WestWorld of Scottsdale. Please visit for more information. SCOTTSDALE, ARIZONA Scottsdale is one of the most livable cities in the country a place to live, learn, work, play and raise a family. Translation: Scottsdale is prime for business. With its relatively affluent population and large employment base, Scottsdale maintains a competitive edge in attracting new retailers, company headquarters, technology and biomedical industry leaders. A destination famous for casual Southwestern style, Scottsdale boasts of first-rate resorts, world-class events, sophisticated arts, lively night life, diverse shopping and epicurean feasts, while the city s surrounding natural beauty is sustained for future generations through Scottsdale s McDowell Sonoran Preserve. Scottsdale is truly a community where economic prosperity, entrepreneurial spirit and lifestyle converge. Business friendly Premier community to live, learn, work and play High tourism economic impact supports low property tax structure World class research and development opportunities Highly educated, sophisticated workforce that is well-trained Large concentration of Class A office space and wide variety of housing Sophisticated and established infrastructure Right-to-work state Natural beauty sustained for future generations through Scottsdale s McDowell Sonoran Preserve Fourth largest employment center at airpark SCOTTSDALE AIRPARK Strategically located along the Loop 101 corridor, and home to hundreds of companies of all shapes and occupations, the Scottsdale Airpark is one of the largest employment centers in the Phoenix metro area. It is served by two express commuter bus routes; increasing access to employees from both the far west and the south eastern sectors of the metro area. The Scottsdale Airpark is located approximately 25 minutes from Sky Harbor International Airport. Within a 20- minute commute, employers in the Scottsdale Airpark have access to nearly 200,000 workers, and within a 30-minute commute the number of workers doubles to more than 400,000. Scottsdale Airpark consists of 1,000 acres but has 3,300 acres of ancillary businesses doing $30 million annually. It employs 52,000 people working at 2,800 companies in a marketplace occupying 33 million square feet. Scottsdale and Paradise Valley are the only Grade A markets in the Metropolitan Phoenix MSA. For more information, please visit THE PARAGON AT KIERLAND OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 3

5 EXECUTIVE SUMMARY Terms of the Offering PARAGON AT KIERLAND Total Units 276 Year Built 2000 Price Price per Unit Price per SF Unpriced Unpriced Unpriced Average SF per Unit 1,048 Average Market Rent per Unit $1,284 Average Market Rent per SF $1.23 Occupancy 98% Terms All cash THE PARAGON AT KIERLAND OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 4

6 PROPERTY INFORMATION Property Overview NORTH 71ST STREET SCOTTSDALE, AZ The property is located off Scottsdale Road just west of the Loop 101. PROPERTY SUMMARY County Maricopa Year of Construction 2000 Number of Units 276 Average Unit Size 1,048 Number of Buildings 23 Number of Stories 3 Rentable Area (SF) 289,233 Land Area Density 10.4 acres 26.6 units per acre UNIT MIX Unit Type No. of Units Square Feet Current Market Rent/Mo Current Market Rent/SF 1 Bedroom/1 Bath $1,200 $ Bedroom/2 Bath 147 1,059 $1,275 $ Bedroom/2 Bath 36 1,323 $1,540 $1.16 Totals/Averages 276 1,048 $1,284 $1.23 *Owner and Broker make no representation as to the actual square footage on any units. Prospective purchasers are encouraged to independently confirm the measurement of all units. THE PARAGON AT KIERLAND OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 6

7 PROPERTY INFORMATION CONSTRUCTION DETAIL Style Floors Framing Exterior finish Roof Garden style Ceramic tile and carpeting Wood frame Stucco Pitched slate tile PARKING SPACES Open 171 Covered Parking 276 Parking per Unit 1.62 Parking per Bedrooms 0.90 UTILITIES/METERING Electrical Water/Sewer HVAC Gas Trash Individually metered; resident pays Individually metered; resident pays Individually metered; resident pays Individually metered; resident pays Resident pays PERSONNEL OVERVIEW Property manager, two assistant property managers and one Office Staff part-time leasing agent Maintenance/Grounds Four full-time maintenance/grounds keepers Total Eight FEES AND DEPOSITS Application Fee Security Deposit Non-Refundable Pet Fee Other Non- Refundable Fees $41.00 per person $200 1-bedroom, $300 2-bedroom, $400 3-bedroom $153 per pet (two pet maximum), $150 refundable pet deposit, $26 monthly pet rent per pet $204 administrative fee, $11 utility fee THE PARAGON AT KIERLAND OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 7

8 PROPERTY INFORMATION Community Amenities Resort style heated swimming pool Relaxing spa/hot tub Elegant club house 24 hour state-of-the-art fitness center Steam rooms Pool cabanas Westin Resort & Spa, 736-room resort Lush, mature landscaping in a resort-like setting Kierland Commons retail shopping Approximately one mile from the Loop 101 Spectacular views available THE PARAGON AT KIERLAND OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 8

9 PROPERTY INFORMATION Unit Features Gourmet chef s kitchen with beautiful ceramic countertops, custom cabinetry and nickel hardware Sleek black kitchen appliances Built-in microwave oven Kitchen island and breakfast bar Full size washer and dryer Soaring ceilings in spacious, airy rooms Oversized walk-in closets with mirrored doors Ceramic tile and plush carpeting throughout Large private patio or balcony in select units i n s e * l e c t u THE PARAGON AT KIERLAND OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 9

10 PROPERTY INFORMATION Property Operating Statement (trailing 12 months March Feb 2013) THE PARAGON AT KIERLAND OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 32

11 PROPERTY INFORMATION Property Operating Statement 2013 (estimated) # of Unit Square Total Current Rent Monthly Annual Units Description Feet Sq. Ft. Rent/Mo. Per Sq. Ft. Rents Rents 93 1 Bed/1 Bath ,932 $1,250 $1.35 $116,250 $1,395, Bed/2 Bath 1, ,673 $1,350 $1.27 $198,450 $2,381, Bed/2 Bath 1,323 47,628 $1,590 $1.20 $57,240 $686, ,233 $371,940 $4,463,280 1,048 $1,348 $ Estimated Property Operations Monthly Annual Per Unit Per Sq.Ft. Gross Scheduled Income $371,940 $4,463,280 $16,171 $15.43 Less: Vacancy 2.5% ($9,299) ($111,582) ($404) ($0.39) Less: Concessions 1.0% ($3,719) ($44,633) ($162) ($0.15) Less: Models/Employee 1.0% ($3,719) ($44,633) ($162) ($0.15) Less: Loss to Lease 1.0% ($3,719) ($44,633) ($162) ($0.15) 5.5% Adjusted Gross Income $351,483 $4,217,800 $15,282 $14.58 Plus: Other Income $48 $13,248 $158,976 $576 $0.55 Plus: RUBS Income $9 $2,484 $29,808 $108 $0.10 Effective Income $367,215 $4,406,584 $15,966 $15.24 Expenses Leasing/Advertising $2,000 $24,000 $87 $0.08 Administration $9,667 $116,000 $420 $0.40 Utilities $16,417 $197,000 $714 $0.68 Repairs & Maintenance $5,333 $64,000 $232 $0.22 Payroll $39,167 $470,000 $1,703 $1.62 Management Fee 3.0% $11,016 $132,198 $479 $0.46 Property Taxes $23,167 $278,000 $1,007 $0.96 Insurance $3,690 $44,280 $160 $0.15 Reserve for Replacement $5,833 $70,000 $254 $0.24 Total Expenses $116,290 $1,395,478 $5,056 $4.82 Net Operating Income $250,926 $3,011,106 $10,910 $10.41 Value Matrix Return Analysis Cap Rate Price $/Unit $/SF Mo Pmt Cash Flow Cash on Cash 4.25% $70,849,555 $256,701 $ $255,784 -$58, % 4.50% $66,913,469 $242,440 $ $241,574 $112, % 4.75% $63,391,707 $229,680 $ $228,860 $264, % 5.00% $60,222,122 $218,196 $ $217,417 $402, % New Debt: 3.54% Interest 30 Year Amortization 80% LTV THE PARAGON AT KIERLAND OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 33

12 CONFIDENTIALITY AND DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of the Property at The Paragon at Kierland. It has been prepared by Colliers International. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Colliers International. The material is based in part upon information supplied by the Seller and in part upon financial information obtained by Paragon at Kierland from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness or this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence. By acknowledging your receipt of this Offering Memorandum from The Paragon at Kierland, you agree: 1) The Offering Memorandum and its contents are confidential; 2) You will hold it and treat it in the strictest of confidence; and 3) You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller. Owner and Colliers International expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered. If you wish not to pursue negotiations leading to the acquisition of The Paragon at Kierland or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum. A prospective purchaser s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Colliers International or any of their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property. This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.