CLAYTON VILLA SUTTER VILLAGE 80 UNITS (99% HAP) CONCORD, CA

Transcription

1 CLAYTON VILLA 80 UNITS (99% HAP) CONCORD, CA 154 Total Units Two Project-Based Section 8 (HAP) Senior Communities Offered Individually or as a Portfolio SUTTER VILLAGE 74 UNITS (100% HAP) YUBA CITY, CA

2 2 EXECUTIVE SUMMARY PROPERTY OVERVIEW Property Name: CLAYTON VILLA SUTTER VILLAGE Property Type: Senior (62+) Senior (62+) Address: 4450 Melody Drive 1200 Gray Avenue City/State: Concord, CA Yuba City, CA Year Built: Units: Net Rentable SF: 43,120 SF 46,250 SF Residential Buildings: 2 1 Acres: 2.63 Acres 1.73 Acres Density: Units/Acre Units/Acre Avg. Contract Rent: $1,418 $843 Proforma Contract Rent: $1,700 $900 Proforma Annual Contract Rent: $1,632,000 $799,200 HAP Contract Expiration: December 31, 2019 July 31, 2018 Income Restrictions: 99% HAP 100% HAP QCT / DDA: No / Yes No / No THE OFFERING Holliday Fenoglio Fowler, L.P. (HFF) is pleased to exclusively offer the tremendous opportunity to acquire and preserve, either individually or as a portfolio, Clayton Villa and Sutter Village, two multi-housing assets located in Northern California that benefit from project-based Section 8 (HAP) contracts. Both Clayton Villa and Sutter Village are eligible for contract rent increases post-closing, including a projected increase of $282 (20%) at Clayton Villa. The submarkets surrounding both Properties are anchored by multiple economic drivers and exemplify excellent rental fundamentals including minimal vacancy and strong year-over-year rent growth exceeding 4%. CLAYTON VILLA SUTTER VILLAGE

3 OFFERING CONDITIONS EXECUTIVE SUMMARY Tour Schedule: Please contact Doug Childers to schedule a tour. Under no circumstances are Investors allowed to visit the Properties without approval from HFF. Failure to adhere to this request will be taken into consideration by the Seller when offers are selected. Offer Date: Best & Final: Terms and Conditions: All offers are due on or before Tuesday, November 14th, 2017 at 5:00 PM (EST) and should be ed to Doug Childers (dchilders@hfflp.com). While the Offering is being marketed individually or as a portfolio, any bid for more than one Property must value each Property individually to be considered. Upon review of the initial offers submitted, if appropriate, a select group of Investors will be notified of their participation within the Best and Final Round. The Properties are offered on an as is basis, subject to the existing rent, income, and occupancy restrictions required by the existing HAP Contracts. EXECUTIVE SUMMARY 3 Approvals: Approval from HUD, including approval of the assignment and assumption of the HAP contracts will be required of a prospective Purchaser. Selection Criteria: and The prospective Investor(s) will be selected by the Owner, in its sole and absolute discretion, on the basis of a complement of factors, including, but not limited to purchase price; the Investor s financial strength/balance sheet capacity; level of discretion to invest funds; ability to close in a timely fashion; experience in closing similar transactions; reputation within the industry and the extent to which due diligence is completed.

4 MARK-TO-MARKET OPPORTUNITY Both Clayton Villa and Sutter Village present a tremendous opportunity for an Investor to benefit from mark-to-market contract rent increases. Based on a comprehensive survey of the surrounding rental markets, average effective rents at Clayton Villa lag nearby comparable properties by an average of $310, while Sutter Village is an average of $72 below surrounding comparable properties, as indicated below. HFF projects that a new owner will benefit from contract rent increases of $282 (20%) and $57 (7%) at Clayton Villa and Sutter Village, respectively. RENT COMPARABLE ANALYSIS EXECUTIVE SUMMARY 4 AVERAGE EFFECTIVE RENT* $1,900 $1,800 $1,700 $1,600 $1,500 $1,400 $1,700 CLAYTON VILLA $282 (19.9%) Projected Contract Rent Increase $1,418 $1,716 $1,622 $1,700 Comp Average = $1,728 $1,100 $57 (6.8%) $1,819 $1,785 $1,050 $1,000 $950 $900 $850 $800 $750 Projected Contract Rent Increase $900 $843 $902 SUTTER VILLAGE $969 $1,004 Comp Average = $915 $824 $877 $700 $1,300 $650 $1,200 Clayton Villa Arcadian Bel Air Clayton Creek Diablo View Palm Terrace $600 Sutter Village Bridge St. Commons Garden West I Heatherwoods Northgate Terrace Victoria Apartments Average Effective Rent* HFF Proforma Contract Rent Average Effective Rent* HFF Proforma Contract Rent *Rent adjustments based on 2014 RCS provided in the HFF Document Center. *Rent adjustments based on 2012 RCS provided in the HFF Document Center.

5 AFFORDABLE HOUSING PRESERVATION OPPORTUNITY The guaranteed rental revenue provided by the HAP contract on each Property, coupled with an income qualified senior resident base, make Clayton Villa and Sutter Village strong candidates for immediate preservation using Low Income Housing Tax Credits (LIHTCs) and/or Tax Exempt Bond financing. STABLE, CONSISTENT CASH FLOW Both Clayton Villa and Sutter Village benefit from project-based Section 8 (HAP) contracts that ensure consistently strong occupancies and limited turnover. Each Property stands as an ideal investment opportunity for an affordable housing owner looking to deploy significant capital into an inflation protected vehicle that is sheltered from typical market volatility. BENEFITS OF LIHTC PRESERVATION LIHTC Equity to Off-Set Acquisition and Renovation Costs A 30% Basis Boost To The Rehab Eligible Basis (DDA, Clayton Villa Only) IMPLICIT GOVERNMENT GUARANTY 99% of the units at both Properties benefit from HAP contracts, which virtually guarantee future rental revenue. MINIMAL VACANCY Occupancy across both Assets has averaged 99% since July EXECUTIVE SUMMARY 5 20-Year Section 8 HAP Contract Renewal Increased LIHTC Pricing Due To Existing HAP Contracts, CA Locations, And CRA Demand Ability To Break Chain Of Title But Still Receive Acquisition Credits LIMITED TURNOVER 11% turnover across the Properties over the last twelve months. INFLATION PROTECTED VEHICLE Both Properties are eligible for mark-up-tomarket contract rent increases every 5 years, as well as interim annual OCAF adjustments.

6 IDEAL LOCATIONS PROXIMATE TO MAJOR ECONOMIC DRIVERS The immediate submarkets surrounding Clayton Villa and Sutter Village are anchored by multiple economic drivers and afford residents direct access to a variety of local retailers. Clayton Villa s transit-oriented location, which is proximate to the Concord BART commuter rail station, provides residents convenient and affordable access the San Francisco s Bay Area. Firms such as Wells Fargo and AmTrust Financial have recently relocated to Concord, due to its superior connectivity and relative affordability, and serve as economic anchors for the submarket. Sutter Village s location offers its residents convenient access to a variety of local community amenities and regional economic drivers, including Sunsweet Growers, the Yuba City Senior Center, and the 400,000 square foot Yuba City Mall, all of which are within a short walking distance of the Property s grounds. EXECUTIVE SUMMARY 6 NOTABLE COMPANIES LOCATED NEAR CLAYTON VILLA SUNSWEET GROWERS HEADQUARTERS - YUBA CITY SUNSWEET GROWERS 1.2M SF Headquarters World s Largest Dried Tree Fruit Processing Plant Provides More Than 700 Local Jobs

7 WELL-MAINTAINED SENIOR COMMUNITIES Developed in 1978 and 1977, respectively, both Clayton Villa and Sutter Village offer superbly maintained affordable housing for residents aged 62 and older. Over the past three years, current ownership has invested an average of $2,100 in annual capital improvements across both Properties. Tenants of both Properties enjoy access to an amenity lineup tailored for seniors, which includes a community library, recreation room with a full kitchen, controlled access, three laundry facilities, and outdoor patios and picnic areas that create a peaceful, park-like setting for residents. Units at both Properties include a fully-equipped kitchen with a refrigerator, gas powered stove and oven, and garbage disposal. CLAYTON VILLA STRONG UNDERLYING APARTMENT FUNDAMENTALS Bolstered by Northern California s continued economic and population growth, effective rents in the submarkets surrounding Clayton Villa and Sutter Village experienced 5.5% and 3.8% year-over-year growth, respectively. Supported by its high barriers to entry and limited additions to supply, occupancy as of 1H2017 in Clayton Villa s Pittsburg/Antioch submarket stood strong at 96.2%, marking the 12th consecutive year above 94%. With only a total of 2 units having been delivered across both submarkets since 2009, the rampant demand for affordable housing across both submarkets will continue to benefit existing owners. PITTSBURG/ANTIOCH APARTMENT MARKET 5.5% 96.2% EXECUTIVE SUMMARY 7 Year-Over-Year Effective Rent Increase Current Submarket Occupancy SUTTER COUNTY APARTMENT MARKET 3.8% 94.4% Year-Over-Year Effective Rent Increase Current Submarket Occupancy

8 CLAYTON VILLA - LOCATION AERIAL CROSSROADS AT PLEASANT HILL 217,000 SF of Retail Space DIABLO VALLEY COLLEGE Recently Completed $52M Expansion and Improvement Project 100-Acre Main Campus Enrolls Over 22,000 Students THE VERANDA $100M, 375,000 SF Shopping and Entertainment Development WELLS FARGO 285K SF Relocation From East Bay Over 2,220 Local Employees DOWNTOWN CONCORD EXECUTIVE SUMMARY 8 PACIFIC GAS & ELECTRIC 38,000 SF, $40M State-of-the-Art Control Center NEWHALL COMMUNITY PARK 126-Acre Park Featuring Two Miles of Multi-Use Trails, Dog Park, Bocce Courts, and Synthetic Turf Fields TREAT BLVD 27,153 AADT BEL AIR Market-Rate Apartments Built: BR Rent: $1,572 - $1,672 CONCORD COMMUNITY PARK 30-Acre Park Featuring a Swimming Pool, Seven Tennis Courts, Playground, and Sports Fields SINGLE FAMILY HOME VALUES $500K + CONCORD BART STATION $6M Modernization and Renovation Project Underway Expected To Be Completed In Summer 2018 CLAYTON VILLA CLAYTON RD 40,988 AADT DIABLO VIEW Market-Rate Apartments Built: BR Rent: $1,669 - $1,969 SINGLE FAMILY HOME VALUES $450K +

9 SUTTER VILLAGE - LOCATION AERIAL YUBA CROSSINGS Proposed 8.7-Acre Mixed- Use Development Includes 15,000 SF of Retail and Commercial Space SUNSWEET GROWERS 1.2M SF Headquarters World s Largest Dried Tree Fruit Processing Plant Provides More Than 700 Local Jobs GRAY AVENUE MIDDLE SCHOOL COLUSA AVE 37,500 AADT YUBA SUTTER MALL 407,000 SF of Retail Space Over 60 Stores Renovation and Remodeling Project Underway EXECUTIVE SUMMARY 9 YUBA CITY SENIOR CENTER SUTTER VILLAGE BUTTE HOUSE RD 31,500 AADT GRAY AVE KINGWOOD PARK

10 LOCATION MAP EXECUTIVE SUMMARY SUTTER VILLAGE Eldorado N Fores CLAYTON VILLA

11 TRANSACTION GUIDELINES Each Asset is being offered all-cash on an As-Is, Where-Is basis, subject to any existing rent and income restrictions required by the HAP Contracts. While the Offering is being marketed individually or as a portfolio, any bid for more than one Property must value each Property individually to be considered. HFF has been engaged by the owner of the Properties to market them for sale. Information concerning the Properties described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. Atlanta Austin Boston Carolinas Chicago Dallas Denver Houston Indianapolis Los Angeles Miami New Jersey New York Orange County Orlando Philadelphia Phoenix Pittsburgh Portland San Diego San Francisco Tampa Washington London Transaction Leader Doug Childers Managing Director CA Lic.# dchilders@hfflp.com Local Market Advisors Scott Bales Managing Director CA Lic.# sbales@hfflp.com Peter Yorck Associate CA Lic.# pyorck@hfflp.com Capital Markets Advisor Paul Brindley Senior Managing Director CA Lic.# pbrindley@hfflp.com HFF, L.P Peachtree Road NE Suite 1750 Atlanta, Georgia tel (404) fax (404) Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, HFF ), HFF Securities L.P. and HFF Securities Limited (collectively, HFFS ) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 24 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment sales, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a California licensed real estate broker, California License # ( HFF ).