FOR SALE SFR PORTFOLIO ALABAMA 66 SFR PORTFOLIO Birmingham, Huntsville & Montgomery Metro Areas

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1 FOR SALE SFR PORTFOLIO ALABAMA 66 SFR PORTFOLIO Birmingham, Huntsville & Montgomery Metro Areas Mark Allen Advisor Dennis Fernandez Advisor Paul Yazbeck Executive Director Todd Franks, CCIM Managing Director

2 Executive Summary DISCLAIMER ALABAMA 66 SFR PORTFOLIO BIRMINGHAM, HUNTSVILLE & MONTGOMERY AL The material contained in this 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 circumstance, be photocopied or disclosed to any third party without the written consent of the SVN Advisor or Property Owner, or used for any purpose whatsoever other than to evaluate the possible purchase of the Property. The only party authorized to represent the Owner in connection with the sale of the Property is the SVN Advisor listed in this brochure, and no other person is authorized by the Owner to provide any information or to make any representations other than contained in this 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 the SVN Advisor. 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 representation 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 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 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 those materials shall not look to Owner or the SVN Advisor nor any of their officers, employees, representatives, independent contractors or affiliates, for the accuracy or completeness thereof. Recipients of this Offering Brochure are advised and encouraged to conduct their own comprehensive review and analysis of the Property. This 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 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 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. 2

3 TABLE OF CONTENTS Property Overview 5-12 Financial Overview Location Overview Demographics About SVN

4 FOR SALE SFR PORTFOLIO ALABAMA 66 SFR PORTFOLIO Birmingham, Huntsville & Montgomery Metro Areas 1 PROPERTY OVERVIEW 4

5 SECTION 1 PROPERTY OVERVIEW Executive Summary PROPERTY OVERVIEW SVN Investment Sales Group is pleased to announce the exclusive listing for this 66 home portfolio located in three of the largest MSAs in Alabama; Birmingham, Montgomery, and Huntsville. Alabama boasts one of the top five highest potential single family returns in the nation according to Realtytrac.com at 78.4%. Alabama is projected to grow at a moderate 3 to 4 percent per year with the majority of growth in Huntsville. According to the Department of Numbers, Alabama rents are up 2.1% over the last year, while vacancy has decreased 0.65%. As a secondary real estate market, Alabama is known as a stable, high yield opportunity, which has attracted foreign and domestic investors in the current market cycle. PROPERTY SUMMARY SALE PRICE: $6,300,000 AVERAGE YOC: 1968 NUMBER OF UNITS: 66 PRICE/UNIT: $95,455 EFFECTIVE AVG. RENT/UNIT/SF: $935 / $0.60 MARKET AVG. RENT/UNIT/SF: $985 / $0.63 TOTAL SIZE (AVG. PROPERTY): 1567 SF PRICE/SF: $60.92 STABILIZED GROSS YIELD: 12.4% STABILIZED NOI: $542,549 STABILIZED CAP RATE: 8.6% CASH-ON-CASH/8-YEAR IRR: 11.86% / 20.75% The portfolio represents a strong bedroom and bathroom mix consisting of 66 total homes with an average year of construction of All homes were recently acquired and renovated to 2017 standards. At a list price of $6,300,000 for the portfolio or $95,455 per home, this portfolio provides an opportunity to purchase a stable opportunity below replacement costs. PROPERTY HIGHLIGHTS Opportunity to diversity portfolio in high performing secondary markets Recent on-going renovations focused heavily on capital expenditures to ensure low maintenance and rental longevity Upon stabilization highly financeable portfolio with DSC estimated between ; Cash flowing assets with 11%+ cash-on-cash returns in Year 1 SFR portfolios generally outperform local multifamily of similar size on a cap rate basis (average class B & C multifamily cap rates in Alabama MSAs at 6-7.5%, SFR s at 8%+) 5

6 SECTION 1 PROPERTY OVERVIEW Additional Exterior Photos 6

7 SECTION 1 PROPERTY OVERVIEW Living Room Photos 7

8 SECTION 1 PROPERTY OVERVIEW Kitchen Photos 8

9 SECTION 1 PROPERTY OVERVIEW Dining Photos 9

10 SECTION 1 PROPERTY OVERVIEW Bedroom Photos 10

11 SECTION 1 PROPERTY OVERVIEW Bathroom Photos 11

12 SECTION 1 PROPERTY OVERVIEW Benefits of SFR Portfolios As a secondary real estate market, Alabama boasts three major MSAs (Birmingham, Montgomery, and Huntsville) that enable opportunity for strong cash flowing real estate assets, while providing a stable economy during various market cycle positions. Single Family Rental portfolios provide several advantages over apartment investments: Multiple exit strategies: provides a hedge on the market When residential values are higher, the owner can exit on an individual sales basis If home values decrease, rental homes maintain their value with rental income Owners can sell the property to the tenant offering Seller Financing at above market interest rates and sell the loans on the open market Rentals receive higher security deposits which protects the landlord against damage by the tenant Tenants are responsible for their own utilities which gives the landlord protection against spikes to expenses due to plumbing leaks and/or increases in utility costs Homes are spread over a larger area which spreads the risk of value swings in any one submarket Tenants tend to be more stable with less turnover 12

13 FOR SALE SFR PORTFOLIO ALABAMA 66 SFR PORTFOLIO Birmingham, Huntsville & Montgomery Metro Areas 2 FINANCIAL OVERVIEW 13

14 SECTION 2 FINANCIAL OVERVIEW Unit Mix 14

15 SECTION 2 FINANCIAL OVERVIEW Rent Roll 15

16 SECTION 2 FINANCIAL OVERVIEW Rent Roll 16

17 SECTION 2 FINANCIAL OVERVIEW Rent Roll 17

18 SECTION 2 FINANCIAL OVERVIEW Rent Roll 18

19 SECTION 2 FINANCIAL OVERVIEW Financial Analysis 19

20 SECTION 2 FINANCIAL OVERVIEW IRR Deferred 20

21 FOR SALE SFR PORTFOLIO ALABAMA 66 SFR PORTFOLIO Birmingham, Huntsville & Montgomery Metro Areas 3 LOCATION OVERVIEW 21

22 SECTION 3 LOCATION OVERVIEW Area Highlights 57 of the Fortune 500 Companies maintain operations in Huntsville including: General Electric, AT&T, Verizon, IBM, Boeing, Wells Fargo, Target, Comcast, UPS, Cisco Systems, and Lockheed Martin As the state s capital, Birmingham is the largest city in Alabama. Montgomery Public Schools (MPS) is a highly acclaimed district with 3 high schools ranked among the best schools in the nation by Newsweek and U.S. News and World Report and the #1 magnet school in the nation Huntsville is ranked the #1 best affordable city in the U.S. according to Livability.com (2016) Alabama ranks in the Top 5 States in the U.S. for the production of cars and light trucks, with the automotive sector employing 57,000 people statewide and accounting for $9B in exports in 2016 The State of Alabama boasts several nationally recognized universities including Samford University, University of Mobile, Auburn University, the University of Alabama, and Troy University Headquartered in Birmingham, Buffalo Rock is the largest independent single shareholder owned Pepsi Bottler in the U.S.; 3 rd largest Sunkist; 6 th largest Dr. Pepper, and 10 th largest Canada Dry While the state is not home to any professional sports teams, the University of Alabama s home football games have a total statewide economic input of $24.8MM per game or $173.3MM per season Huntsville is home to NASA s largest center, the Marshall Space Flight Center, which developed the Saturn launch vehicles for the Apollo moon program and launched the 1 st successful satellite (Explorer One) into space According to Niche.com, Birmingham, Huntsville, and Montgomery rank in the Top 40 Cities with the Lowest Cost of Living in America for 2017, providing affordable living for residents Montgomery Regional Airport is the home base of the Alabama Air National Guard 187 th Fighter Wing and provides daily commercial flights to Atlanta, Charlotte, and Dallas-Fort Worth Located in Huntsville, the Redstone Arsenal serves as the headquarters for the United States Army Aviation and Missile Command (AMCOM) which is responsible for maintaining Army missiles, helicopters, and ground vehicles 22

23 SECTION 3 LOCATION OVERVIEW Portfolio Map Birmingham Homes 23

24 SECTION 3 LOCATION OVERVIEW Economic Drivers - Birmingham ENTERTAINMENT - Alabama Theater - Barber Vintage Motorsports Museum - Birmingham Botanical Gardens - Birmingham Museum of Art - Birmingham Zoo - McWane Science Center - Railroad Park - Regions Field - Ruffner Mountain Park - Sloss Furnaces National Historic Landmark - Vulcan Park and Museum EMPLOYMENT (Select Employers) - University of Alabama at Birmingham 23,000 employees - Regions Financial Corporation 6,000 employees - AT&T 5,750 employees - St. Vincent s Health System 4,703 employees - Honda Manufacturing of Alabama 4,500 employees - Baptist Health System 4,000 employees - Alabama Power Company 3,982 employees - Children s Health System 3,652 employees - Mercedes-Benz U.S. International 3,500 employees - Blue Cross-Blue Shield of Alabama 3,000 employees - BBVA Compass 2,804 employees - Brookwood Medical Center 2,600 employees - American Cast Iron Pipe Company 2,400 employees - U.S. Steel-Fairfield Works 2,400 employees - Trinity Medical Center 1,879 employees - U.S. Social Security Administration 1,800 employees - Birmingham Veterans Affairs Medical Center 1,525 employees 24

25 SECTION 3 LOCATION OVERVIEW Portfolio Map Huntsville Homes 25

26 SECTION 3 LOCATION OVERVIEW Economic Drivers - Huntsville ENTERTAINMENT - Big Spring Park - Bridge Street Town Center - Green Mountain Nature Trail - Harmony Park Safari - Huntsville Botanical Garden - Lowe Mill Arts & Entertainment - Monte Sano State Park - U.S. Space and Rocket Center - U.S. Veterans Memorial Museum - Von Braun Center Concert & Event Hall EMPLOYMENT (Select Employers) - U.S. Army/Redstone Arsenal 35,000 employees - NASA/Marshall Space Flight Center 6,500 employees - Huntsville Hospital 6,341 employees - The Boeing Company 2,600 employees - Madison County Schools 2,389 employees - Science Applications International Corporation 2,277 employees - City of Huntsville 2,206 employees - Camber Corporation 2,125 employees - University of Alabama Huntsville 1,660 employees - ADTRAN, Inc. 1,549 employees - Technicolor 1,450 employees - PAR 1,350 employees - Madison County Commission 1,242 employees - Alabama A&M University 1,207 employees - Northrop Grumman Corporation 1,200 employees - Verizon Wireless 1,200 employees - Toyota Motor Manufacturing Alabama 1,150 employees - Lockheed Martin Corporation 1,084 employees 26

27 SECTION 3 LOCATION OVERVIEW Portfolio Map Montgomery Homes 27

28 SECTION 3 LOCATION OVERVIEW Economic Drivers - Montgomery ENTERTAINMENT - Alabama State Capitol Building - Civil Rights Memorial Center - Dexter Avenue King Memorial Baptist Church - Dexter Parsonage Museum - First White House of the Confederacy - Montgomery City Planetarium - Montgomery Museum of Fine Arts - Montgomery Zoo - Riverfront Park - Rosa Parks Library EMPLOYMENT - Maxwell Gunter Air Force Base 12,280 employees - State of Alabama 11,639 employees - Montgomery Public Schools 4,524 employees - Baptist Health 4,300 employees - Hyundai Motor Manufacturing 3,100 employees - ALFA Insurance Companies 2,568 employees - City of Montgomery 2,500 employees - MOBIS Alabama 2,500 employees - Jackson Hospital & Clinic 1,300 employees - Koch Foods 1,250 employees - Wind Creek Casino & Hotel Wetumpka 1,200 employees - Rheem Water Heaters 1,147 employees - GKN Aerospace 1,000 employees - Baptist Medical Center South 980 employees - Regions Bank 977 employees - U.S. Postal Service 900 employees - Montgomery County Commission 877 employees - Creek Casino Montgomery 850 employees 28

29 FOR SALE SFR PORTFOLIO ALABAMA 66 SFR PORTFOLIO Birmingham, Huntsville & Montgomery Metro Areas 4 DEMOGRAPHICS 29

30 SECTION 4 DEMOGRAPHICS Demographic Profile - Birmingham 30

31 SECTION 4 DEMOGRAPHICS 31

32 SECTION 4 DEMOGRAPHICS Demographic Profile - Huntsville 32

33 SECTION 4 DEMOGRAPHICS 33

34 SECTION 4 DEMOGRAPHICS Demographic Profile - Montgomery 34

35 SECTION 4 DEMOGRAPHICS 35

36 FOR SALE SFR PORTFOLIO ALABAMA 66 SFR PORTFOLIO Birmingham, Huntsville & Montgomery Metro Areas 5 ABOUT SVN 36

37 SECTION 5 ABOUT SVN Mark Allen Advisor SVN Investment Sales Group Mark began his career in real estate in 2009 as a cadet at the United States Military Academy at West Point. Since then, he has been involved in the acquisition, renovation, management and disposition of a variety of asset types and classes across multiple markets. Today, Mark focuses on Multifamily and Single Family Rental portfolio owner representation. He is committed to the values of competency and integrity - He strives to provide clients with superior consultative and transaction services, including: formulating short and long term business strategies, production and delivery of the most in-depth market research, providing industry contacts, and transaction execution through specialized asset marketing strategies. License #: Phone: Fax: mark.allen@svn.com Address: 6320 LBJ Frwy. Suite 228 Dallas, TX Prior to his career in Commercial Real Estate, Mark was a business development lead and consultant at MSC Software, working to understand his clients challenges and business, while integrating MSC software and services to add value directly to his client's bottom line. In addition, Mark served in the US Army as a Field Artillery Officer where he lead troops in Operation Enduring Freedom - Afghanistan. 37

38 SECTION 5 ABOUT SVN Todd Franks, CCIM Managing Director SVN Investment Sales Group License #: Phone: Fax: todd.franks@svn.com Address: 6320 LBJ Frwy. Suite 228 Dallas, TX Todd s career in commercial real estate brokerage began in 2000 by specializing in the representation of multi-family Sellers. Over the past 16 years, Todd has facilitated the development, redevelopment, disposition, acquisition and repositioning of hundreds of A, B, and C Class multifamily and commercial assets (totaling more than $750,000,000), in the Dallas/Fort Worth market as well as secondary and tertiary markets across North Texas and Oklahoma. When Todd left his previous brokerage firm in March 2014, he was acknowledged as the all-time top producer. Shortly after, Todd opened his own SVN office in Dallas, TX and is now recognized as one of the top five advisors in the world (SVN 2015). His list of clients includes: Trammel Crow Residential Development, Highland Capital, CW Capital, LNR Partners, C-III, Midland Loan Services, Orix Capital Markets, Imperial Bank, City National Bank, La Jolla Bank as well as numerous lenders, servicers, institutions, family offices, partnerships and individual owners. Todd is regularly interviewed and featured in local and national commercial real estate publications such as The New York Times, The Dallas Morning News, Dallas Business Journal, Globe Street and Bisnow. He has also served as an expert witness in trials that require multi-family and financing expertise. In 2011, Todd became the youngest founder in the acquisition of Texas Republic Bank which has matured from $22,000,000 to now over $160,000,000 in assets. Related volunteer work included: Former Chairman of the Board for the Vickery Meadows Economic Development Division, former Board of Directors for the Vickery Meadows Public Improvement District and former Board of the Multi-family Property Standards Committee. 38

39 SECTION 5 ABOUT SVN Recent SFR Portfolio Sales Experience (Select Transactions) PROPERTY LOCATION TYPE CLOSE DATE Wisconsin 44 Portfolio Appleton, WI Value Add 475 SFR Portfolio Chicago, IL Value Add 190 SFR Portfolio Tampa, FL Stable On Market: Multiple LOI s On Market: Multiple LOI s On Market: Multiple LOI s 32 SFR Portfolio Charlotte, NC Value Add March SFR Portfolio Charlotte, NC Value Add December SFR/MF Portfolio Charlotte, NC Value Add November SFR/MF Portfolio Charlotte, NC Value Add October SFR Portfolio Fort Worth, TX Stable June 2016 Lakewood Townhomes Dallas, TX Stable April 2016 East Dallas Townhomes Dallas, TX New Construction April 2016 Mesquite SFR Portfolio Mesquite, TX Stable (SFR) March SFR Portfolio DFW, TX Value Add (SFR) March 2016 Keene Place Keene, TX Stable (4-Plexes) December 2015 Pleasant Grove SFRs Dallas, TX Value Add (SFR) October 2015 Fort Worth SFRs Fort Worth, TX Stable (SFR) October 2015 Village Park Fort Worth, TX New Construction (SFR) January

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