VILLAGE CREEK APARTMENTS

Transcription

1 VILLAGE CREEK APARTMENTS Offering Memorandum August 2017 Commerce, Texas 1

2 Table of Contents For additional information please contact: Erik Carlson (408) x 126 erik.carlson@svn.com Amit Urban (408) aurban@svn.com Todd Franks (972) todd.franks@svn.com Angel Flores (972) Angel.flores@svn.com Disclosure.3 Investment Summary. 4 Offering Terms 5 Executive Summary.6 Investment Opportunity.7 Loan Assumption Info.. 8 Property Information 9 Property Overview 10 Property Floor Plans 12 Property Aerial/Maps.14 Property Site Plan.16 Property Photos.17 Clubhouse..18 Exterior..19 Interior..21 Rental Competition.22 Competition Aerial..23 Competition Summary 24 Rent Comparables.27 Property Demographics.30 Commerce Snapshot.31 Financials.33 Financial Summary Year Forecast year Assumption Matrix.36 2

3 Disclosure The material contained in this Investment Offering Brochure is furnished solely for the purpose of considering the purchase of the property within and is not to be used for any other purpose. This information should not, under any circumstances, be photocopied or disclosed to any third party without the written consent of SVN or Owner, or used for any purpose whatsoever other than to evaluate the possible purchase of the Property. The only party authorized to represent the Property Owner ( Owner ) in connection with the sale of the Property is the SVN Advisor listed in this document, and no other person is authorized by the Owner to provide any information or to make any representations other than contained in this Investment Offering Brochure. If the person receiving these materials does not choose to pursue a purchase of the Property, this Offering Brochure must be returned to SVN. Neither the SVN Advisor nor the Owner make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein, and nothing contained herein is or shall be relied upon as a promise or representation as to the future performance of the Property. This Offering Brochure may include certain statements and estimates by SVN Advisor with respect to the projected future performance of the Property. These Assumptions may or may not be proven to be correct, and there can be no assurance that such estimates will be achieved. Further, the SVN Advisor and the Owner disclaim any and all liability for representations or warranties, expressed or implied, contained in or omitted from this Investment Offering Brochure, or any other written or oral communication transmitted or made available to the recipient. The recipient shall be entitled to rely solely on those representations All SVN Offices are Independently Owned & Operated. The information listed above has been obtained from sources we believe to be reliable, however, we accept no responsibility for its correctness and warranties that may be made to it in any final, fully executed and delivered Real Estate Purchase Agreement between it and Owner. The information contained herein is subject to change without notice and the recipient of these materials shall not look to Owner or the SVN Advisor, or any of their officers, employees, representatives, independent contractors or affiliates, for the accuracy or completeness thereof. Recipients of this Investment Offering Brochure are advised and encouraged to conduct their own comprehensive review and analysis of the Property. This Investment Offering Brochure is a solicitation of interest only and is not an offer to sell the Property. The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest to purchase the Property and expressly reserves the right, at its sole discretion, to terminate negotiations with any entity, for any reason, at any time with or without notice. The Owner shall have no legal commitment or obligation to any entity reviewing the Investment Offering Brochure or making an offer to purchase the Property unless and until the Owner executes and delivers a signed Real Estate Purchase Agreement on terms acceptable to Owner, in Owner s sole discretion. By submitting an offer, a prospective purchaser will be deemed to have acknowledged the foregoing and agreed to release the Owner and the SVN Advisor from any liability with respect thereto. To the extent Owner or any agent of Owner corresponds with any prospective purchaser, any prospective purchaser should not rely on any such correspondence or statements as binding Owner. Only a fully executed Real Estate Purchase Agreement shall bind the property and each prospective purchaser proceeds at its own risk. 3

4 Investment Summary 4

5 Offering Terms OFFERING TERMS Village Creek Apartments, located at 2231 Live Oak Street, Commerce, Texas 75428, is being offered to qualified investors on an as-is basis. This asset is being marketed with prospective buyers assuming the current in-place CMBS loan. PROPERTY WEBSITE PROPERTY TOURS Tours are welcome however prospective buyers shall notify and receive approval from listing agents prior to any tour of the Property. OFFER PROCESS Offers shall be due September 17, 2017 by 5pm CT. Offers shall be submitted to the listing agent listed below. Contact Information: Erik Carlson x 126 erik.carlson@svn.com SVN First Guardian Group 777 North First Street, #720 San Jose, CA Todd Franks todd.franks@svn.com SVN Investment Sales Group 6320 LBJ Frwy, Suite 228 Dallas, TX

6 Executive Summary Asking Price Market # of Units 100 Building Square Feet 83,200 Lot Size 7.06 AC Proforma NOI $547,476 Year Built 1973/2014 SVN First Guardian Group and SVN Investment Sales Group, as exclusive advisor, are pleased to offer for sale Village Creek Apartments which is a Class B+ garden-style apartment located in Commerce, Texas. Village Creek is a 100-unit apartment community built in It is comprised of 83,200 square feet and situated on approximately 7.06 acres and consists of 12 buildings (10 residential, 1 leasing office, and 1 maintenance). All units are unfurnished and offer amenities such as full appliance packages. Village Creek offers its residents amenities that include a swimming pool (with lounge deck), new fitness center, BBQ grills, pet park, sand volleyball court, and resident clubhouse. In 2014 Village Creek received $3.75 million in capital improvements. Interior improvements consisted of flooring, electrical fixtures, plumbing fixtures, water heaters, appliance packages, paint, cabinets, hardware, and window coverings. On the exterior improvements, the property received new roofs, HVACs, electric metering, paint, and exterior repairs. In addition, community amenities were added to the property, including a new pool, basketball court, dog park, parking lot, signage, and landscaping. Zoning Market Multifamily Dallas All units are individually metered for electricity with water, sewer, and trash paid by Landlord. Each unit contains an individual electric water heater, and an individual electric HVAC unit. Unit flooring was renovated with faux wood flooring throughout the common areas and carpet in the bedrooms. Submarket Cross-Streets Commerce Live Oak St & FM 24 Village Creek is located in the city of Commerce in Hunt County which is in the northeast portion of Texas just north of Dallas by around 65 miles. Commerce has a population of approximately 9,000 people of which Village Creek is ideally situated near the main economic driver, Texas A&M Commerce. 6

7 Investment Opportunity Strong Sub-Market The Commerce market, comprising of 6 comparable assets totaling around 500 units, still boasts an average occupancy around 95% and an average rental rate of $694. Village Creek has been able to achieve annual rent increases on its units due to the quality and location of the property. New owners will be able to continue to push rental rates as occupancy remains near 100%. Though the property is nearly all students, current management still leases by the unit which may provide a new operator potential upside by leasing by the bed. Significant Renovations Village Creek recently received extensive renovations of more than $3.75 million which has placed Village Creek at the top of the competition. No other apartment complexes can match the amenities offered at Village Creek. Exterior improvements of $1.65 million included all new roofs, HVACs, electric metering, paint, and misc. exterior repairs. Interior improvements of $1.73 million included flooring, electrical fixtures, plumbing fixtures, water heaters, appliance packages, paint, cabinets, hardware, and window coverings. Also, $370,000 was spent on community amenities and included adding a new pool, basketball court, dog park, parking lot, signage, and landscaping. Ideal Location Village Creek is ideally located within walking distance to Texas A&M Commerce and Commerce s largest employer Ben E. Keith Distribution Facility. By the Bed Conversion Opportunity Given Village Creek is located so close to the Texas A&M Commerce campus, investors could improve value by converting leases from per the unit to per bed. Currently, the property is leased to approximately 85% of students. Per US News, at Texas A&M - Commerce, 30 percent of the students live in college-owned, - operated or - affiliated housing and 70 percent of students live off campus. 7

8 Loan Assumption Details LOAN OVERVIEW Lender: Bank of America Servicer: Wells Fargo (checks are made payable to Wells Fargo) Original Loan Amount: $4,350,000 Original Date of Loan: 11/1/2015 Maturity Date: 11/1/2025 Loan Term: 10 Years Amortization: 30-Year Amortization Interest Rate: 4.750% Monthly Debt Service: $22, (principal and interest) Monthly Reserves: $6, Taxes, $2, Insurance, and $2, Replacement (as of 7/7/2017) Current Reserve Balances: $66, Taxes, $13, Insurance, and $66, Replacement (as of 7/7/2017) Current Loan Balance: $4,241, (as of 7/7/2017) Prepayment Penalty: Defeasance Assumption Fee:.5% Mezzanine Loan: Current loan allows for mezzanine debt subject to a max 75% LTV and a DCR of 1.53 : 1.0 (further details in the loan documents) 8

9 Property Information 9

10 Property Overview PROPERTY DESCRIPTION Property Address: City/County/State: Number of Units: Building Class: Year Built: Total Parking Spaces: Net Rentable Square Feet: Total Acres: Property ID Number: Number of Buildings: Number of Stories: BUILDING CHARACTERISTICS Roof Type: Foundation Type: Construction Type: HVAC: Ceiling Height: Water Heaters: UTILITIES Internet/Cable: Electric: Gas: Water: Trash: 2231 Live Oak Street Commerce/Hunt/Texas 100 B+ 1973/ (all surface) Approximately 83,200 Approximately 7.06 acres and One and Two Story Pitched Roof Concrete Slab Wood Frame with Brick Veneer Individual Electric HVAC Units 8 Individual Electric Paid by Landlord Paid by Tenant N/A Paid by Landlord Paid by Landlord PERSONNEL 3 Employees: Property Manager, 1 Leasing Agent, and 1 Maintenance Supervisor 10

11 Property Information UNIT MIX # OF UNITS AVG UNIT SIZE % OF MIX UNIT CURRENT AVG MONTHLY RENT CURRENT ASKING MONTHLY RENT ASKING PER SQUARE FOOT 1 BR / 1 BA % Standard $725 $725 $ BR / 1.5 BA % Townhome $925 $925 $ BR / 1.5 BA % Townhome $995 $995 $0.95 UNIT HIGHLIGHTS (All units received interior renovations of flooring, paint, fixtures, hardware, cabinets, countertops, and appliances.) Metal Door with Viewer Dead-bolt Lock Digital Thermostat Faux Wood Flooring in Entry, Kitchen, and Bathroom(s) Miniblinds Ceiling Fan in Living Area New Black Appliance Package (100% of units) New Laminate Counter and Bar Top (100% of units) Eat in Kitchen Area * Microwave Dishwasher Frost-free Refrigerator Stainless Steel Double Sink with Disposal Kitchen Pantry * Stove / Oven with Vent Hood Carpeted Bedroom(s) * Select units 11

12 Select Floor Plans 12

13 Select Floor Plans 13

14 Property Aerial 14

15 Property Maps 15

16 Property Site Plan 16

17 Property Photos 17

18 Leasing and Club House Property Photos 18

19 Exterior Property Photos 19

20 Exterior Property Photos 20

21 Interior Property Photos 21

22 Rental Competition 22

23 Competition Aerial Village Creek A. Creekside Manor B. Estates at Commerce C. Corners at Commerce D. Bradford Place C B A D 23

24 Comparable Property Summary Unit Type Village Creek Apartments 2231 Live Oak Street # of Units SF Rent Rent/SF 1/ $725 $1.12 2/ $925 $1.03 3/ ,050 $995 $0.95 Unit Type Creekside Manor Apartments 801 Culver Street # of Units SF Rent Rent/SF 0/ $489 $1.22 1/ $500 $1.00 2/ $625 $0.74 2/ $625 $0.74 3/1 2 1,100 $725 $0.66 Resident pays electricity Tot./Avg $883 $1.06 Year Built: 1973/2014 Current Occupancy: 100% Concessions: None Amenities: volleyball court, swimming pool, laundry facilities, private entry, individual HVAC, leasing office, pet park Utilities Included Tot./Avg $545 $0.89 Year Built: 1997 Current Occupancy: 98% Concessions: None Amenities: laundry facilities, leasing office, w/d connections in select units, microwave ovens 24

25 Comparable Property Summary Unit Type Estates at Commerce Apartments # of Units SF Rent Rent/SF 0/ $475 $1.06 1/ $490 $0.70 2/ $575 $0.72 Unit Type Corners at Commerce Apartments 1912 Caddo Street # of Units SF Rent Rent/SF 1/ $550 $1.10 2/ $725 $1.04 2/1.5 TH $590 $0.72 Resident pays elect/water Tot./Avg $ 0.73 Year Built: 1976 Current Occupancy: n/a Concessions: n/a Amenities: laundry facilities, leasing office, microwave ovens Resident pays electricity Tot./Avg $657 $1.06 Year Built: 1965 Current Occupancy: n/a Concessions: n/a Amenities: on-site laundry facilities, leasing office, microwave ovens 25

26 Comparable Property Summary Unit Type Bradford Place Apartments 3301 FM 3218 # of Units SF Rent Rent/SF Property Name Unit Count Current Occupancy Avg Unit Size Avg Actual Rent Avg Rent Per SF Village Creek % 832 $883 $1.06 Bradford Place % 917 $922 $1.01 Creekside Manor 88 98% 615 $545 $0.89 Corners at Commerce 54 n/a 622 $657 $1.06 Estates at Commerce 120 n/a 697 $512 $0.73 Totals/Averages $694 $0.94 1/ $801 $1.16 2/ $923 $1.01 2/ $933 $0.95 3/2 16 1,195 $1,135 $0.95 Resident pays all utilities Tot./Avg $922 $1.01 Year Built: 2005 Current Occupancy: 98% Concessions: n/a Amenities: Fitness center, business center, club house, basketball court, playground, swimming pool, covered parking, private entry, individual HVAC, full size washer/dryer in units, microwave ovens 26

27 1 BR Rent Comparables Property Name Unit Total Unit Size Actual Rent Per SF Village Creek $725 $1.12 Bradford Place $801 $1.16 Corners at Commerce $555 $1.11 Estates at Commerce $490 $0.70 Creekside Manor $503 $1.01 Totals/Averages $615 $ Village Creek Bradford Place Corners at Commerce Estates at Commerce Creekside Manor 27

28 2 BR Rent Comparables Property Name Unit Type Count Unit Size Actual Rent Actual Rent Per SF Corners at Commerce (2/1) $731 $1.04 Creekside Manor (2/1) $630 $0.74 Estates at Commerce (2/1) $575 $0.72 Estates at Commerce (2/1.5 TH) $590 $0.72 Village Creek (2/1.5 TH) 51 1,008 $925 $0.92 Bradford Place (2/2) $933 $0.95 Bradford Place (2/2) $923 $1.01 Creekside Manor (2/2) $630 $0.74 Totals/Averages $742 $ Corners at Commerce (2/1) Creekside Manor (2/1) Estates at Commerce Estates at Commerce (2/1) (2/1.5 TH) Village Creek (2/1.5 TH) Bradford Place (2/2) Bradford Place (2/2) Creekside Manor (2/2) 28

29 3 BR Rent Comparables Property Name Unit Type Count Unit Size Actual Rent Actual Rent Per SF Creekside Manor (3/1) 2 1,100 $731 $0.66 Village Creek (3/1.5 TH) 21 1,050 $995 $0.95 Bradford Place (3/2) 16 1,195 $1,135 $0.95 Totals/Averages 39 1,115 $954 $ Creekside Manor (3/1) Village Creek (3/1.5 TH) Bradford Place (3/2) 29

30 Property Demographics 30

31 Commerce Snapshot Commerce, Texas is located just northeast of Dallas, Texas by approximately 65 miles and is home to Texas A&M Commerce as well as over 400 business establishments and industries including a recent expansion by California based Polara Enterprises. Commerce is conveniently located adjacent to Cooper Lake which spans 3,000 acres and is a major draw to the area. The Bois D Arc Bash draws approximately 10,000 visitors annually to downtown Commerce. Population: Per the 2016 figures, Commerce s total population was approximately 9,091 which was an increase from the prior census from 2010 of about 12%. Housing: Per the latest census, there were approximately 3,613 housing units. The median value of a home in Commerce is $67,000 with the median gross rent of $760. Households: There were 2,712 households with an average of 2.53 persons per household. The average American household in 2015 consisted of 2.54 people. Income: The median household income (in 2015 dollars) was $21,836. Ethnicity: Per latest census, Caucasians represent approximately 59% of the population followed by Black or African American of 21%, Asian of 5%, Latino of 11%, and multiple other groups representing 4%. Major Employers (City of Commerce) Ben E. Keith Foods Distribution Commerce ISD.... Education Hunt Regional Medical Center... Healthcare Mohawk Industries... Manufacturing Texas A&M- Commerce. Education Paris Jr College.... Education USEFUL LINKS - City of Commerce - Hunt County 31

32 Area Highlights Located off of the Live Oak Exit on State Highway 24 which sees an average daily traffic count of 10,600 cars per day, making the property highly visible. Within 1-mile of retailers and restaurants including Anytime Fitness, Braum s Ice Cream and Burger Restaurant, Brookshire s Food & Pharmacy, Chicken Express, CVS Pharmacy, Dickey s Barbecue Pit, SONIC, Subway, Walmart Supercenter, and more Conveniently located across State Highway 11 from the Texas A&M University-Commerce Campus which has a current enrollment that exceeds 12,000 students, and it is also the city s largest employer with 850 employees. Commerce s cost of living is 12% lower than the state average and 21% lower than the national average, providing affordable living to its residents. Close proximity to schools Located less than 1-mile from Commerce High School and less than 2-miles from A.C. Williams Elementary School, Commerce Elementary School and Commerce Middle School. Strategically located just west of State Highway 11 and less than 8-miles north of I-30, providing quick commuter access to the Dallas CBD, Rockwall, Garland, Plano, Richardson, Mesquite, and more. Less than 15-miles from Cooper Lake State Park which offers a variety of amenities including boat docks, fishing piers, canoe rentals, camping, cabin rentals, and a 10.5 mile equestrian trail. Numerous cultural focal points including the American Cotton Museum, Northeast Texas Children s Museum, the Texas A&M University-Commerce Planetarium, and the Southwest Dairy Museum. The property is situated less than 1-mile from downtown Commerce which is the hub of the town s festivities with dining, bars, boutiques, and loft-style living. Known as the Bois d Arc Capital of Texas, the city holds an annual bash to pay homage to bois d arc trees which played a vital part in the frontier days with arts & crafts vendors, food, a parade, pageant, musical entertainment, 5K run, and a car & truck show. Abundant outdoor recreation options including 3 city parks with sports fields, walking paths, and play areas; 5 area lakes; a country club; recreation center; public swimming pool, and more. Hunt Regional Emergency Medical Center at Commerce is a fullservice Level IV ER with a multidisciplinary trauma team, helicopter landing pad, ambulance and EMS housing, and it offers rapid admission to the main hospital in Greenville. 32

33 Financials 33

34 Financial Summary INCOME June 2017 T-12 Proforma Proforma per Unit Financial Notes Gross Scheduled Rent 1,059,600 1,091,388 10,914 Per T % rent growth Gain/(Loss) to Lease (2,112) 0 0 Gross Potential Income 1,057,488 1,091,388 10,914 Less: Economic Vacancy (49,776) (54,569) (546) 5% Plus: Other Income 23,346 23, Per T-12 EFFECTIVE GROSS INCOME 1,031,058 1,060,165 10,602 OPERATING EXPENSES General Administrative 33,939 26, T-12 Payroll 159, ,000 1,020 T-12 Repairs & Maintenance 45,678 44, T-12 Contract Services 94,344 22, T-12 less cable/internet contract Marketing 8,036 5, T-12 Utilities 87,814 87, T-12 TOTAL CONTROLLABLE EXPENSES 429, ,378 2,874 Management Fees 31,956 31, % Mgt Fee Property Taxes 85, ,506 1,405 Insurance 27,495 28, T-12 TOTAL OPERATING EXPENSES 574, ,689 4,877 CAPITAL RESERVE 25,000 25, $250/unit TOTAL EXPENSES 599, ,689 5,127 NET OPERATING INCOME 431, ,476 5,475 34

35 10 Year Forecast INCOME Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Gross Scheduled Rent 1,091,388 1,124,130 1,157,854 1,192,589 1,228,367 1,265,218 1,303,174 1,342,270 1,382,538 1,424,014 Gain/(Loss) to Lease Gross Potential Income 1,091,388 1,124,130 1,157,854 1,192,589 1,228,367 1,265,218 1,303,174 1,342,270 1,382,538 1,424,014 Less: Economic Vacancy (54,569) (56,206) (57,893) (59,629) (61,418) (63,261) (65,159) (67,113) (69,127) (71,201) Plus: Other Income 23,346 24,046 24,768 25,511 26,276 27,064 27,876 28,713 29,574 30,461 EFFECTIVE GROSS INCOME 1,060,165 1,091,970 1,124,729 1,158,470 1,193,225 1,229,021 1,265,892 1,303,869 1,342,985 1,383,274 OPERATING EXPENSES General Administrative 26,500 27,295 28,114 28,957 29,826 30,721 31,642 32,592 33,569 34,576 Payroll 102, , , , , , , , , ,087 Repairs & Maintenance 44,000 45,320 46,680 48,080 49,522 51,008 52,538 54,114 55,738 57,410 Marketing 5,000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 Utilities 87,814 90,448 93,162 95,957 98, , , , , ,577 TOTAL CONTROLLABLE EXPENSES 287, , , , , , , , , ,963 Management Fees 31,805 32,759 33,742 34,754 35,797 36,871 37,977 39,116 40,290 41,498 Property Taxes 140, , , , , , , , , ,328 Insurance 28,000 28,560 29,131 29,714 30,308 30,914 31,533 32,163 32,806 33,463 TOTAL OPERATING EXPENSES 487, , , , , , , , , ,252 CAPITAL RESERVE 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 TOTAL EXPENSES 512, , , , , , , , , ,252 NET OPERATING INCOME 547, , , , , , , , , ,022 35

36 Financial Notes PROFORMA FINANCIAL ASSUMPTIONS Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Base Rent Growth 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Economic Vacancy Factor 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Expense Growth 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Property Taxes 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Management Fee 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 36

37 V I L L A G E C R E E K A PA R T M E N T S L i v e O a k S t r e e t, C o m m e r c e, T e x a s F o r M o r e I n f o r m a t i o n a n d t o S c h e d u l e a T o u r C o n t a c t : E r i k C a r l s o n ( ) x e r i k. c a r l s o s v n. c o m T o d d F r a n k s ( ) t o d d. f r a n k s v n. c o m