For more information contact: Founder & Principal andy@vreg.co Multi-tenant ocean view mixed use building Located in the World Class Marina District Building in excellent condition (newer torch down roof & furnace) Within walking distance of ocean, marina, and numerous local shops and restaurants CBA# 585187 MLS# 1115138 Phone: 425.531.7966 Fax: 425.732.3200 40 Lake Bellevue Dr. Suite 230 Bellevue, WA 98005 www.vreg.co
Real Estate Investment Details Analysis Analysis Date July 2017 Property Property Property Address Year Built 1962 Ocean View Mixed Use Building Purchase Information Property Type Office Purchase Price $955,000 Tenants 10 Total Rentable Sq. Ft. 3,438 Resale Valuation 6.1% (capitalization of noi) Financial Information Down Payment $295,500 Closing Costs $11,000 LT Capital Gain 15.00% Federal Tax Rate 28.0% Loans Type Debt Term Amortization Rate Payment LO Costs Fixed $689,500 30 years 30 years 4.75% $3,597 $6,895 Income & Expenses Gross Operating Income $83,595 Monthly GOI $6,966 Total Annual Expenses ($25,373) Monthly Expenses ($2,114) Contact Information andy@vreg.co The calculations and data presented are deemed to be accurate, but not guaranteed. They are intended for the purpose of illustrative projections and analysis. The information provided is not intended to replace or serve as substitute for any legal, accounting, investment, real estate, tax or other professional advice, consultation or service. The user of this software should consult with a professional in the respective legal, accounting, tax or other professional area before making any decisions. page 2 of 14
Property Description 22525 Marine View Drive Rarely available, Multi-tenant ocean view mixed use building in the World Class Marina District location in the South end, with upside and room for growth. Downtown Des Moines is an up and coming waterfront community that is going through revitalization, buy while cap rates are affordable in this market. The building is in excellent condition. Within walking distance of the Des Moines Marina & shoreline, local shops and restaurants, easy access and ample parking. Excellent visibility & retail location. CB Commercial Zoning. Please do not disturb the current tenants. Des Moines is strategically located in extremely popular and consistently growing King County, WA. According to the City of Des Moines website, With its sweeping view of the snowcapped Olympic Mountains to the west and majestic Mount Rainier to the southeast, Des Moines, Washington, truly offers the best of the Pacific Northwest and is an amazing place to call home. Nestled conveniently between the cities of Seattle and Tacoma, on the eastern shore of Puget Sound, The Waterland City has a population of 30,100, covers over six square miles, and is just a short drive from Sea-Tac International Airport and Interstate 5. Located in King County, Des Moines is part of a greater metro area with a population of 3.5 million. Rich in history, diversity, and natural beauty, this charming coastal community is proud of the local character that has been shaped by its varied and unique businesses and abundant natural resources. Des Moines is a city of pioneers, starting with John Moore, who was granted the first Des Moines homestead claim in 1872. By 1890, the Des Moines News would describe the community as The best and most prosperous city on Puget Sound. Called Des Moines after the Des Moines City Improvement Company, which was named after Des Moines, Iowa, where many of the city s early settlers were from, the city was incorporated in 1959. Des Moines provides a business-friendly environment and continually seeks new economic development and revitalization opportunities, with a strong focus on business attraction and retention. Bold economic development plans are diversifying the city s employment base and strategically positioning Des Moines for the future. page 3 of 14
Location Map page 4 of 14
Property Photos Marine View Drive S Office Building Property Photos View from Marine View Drive S Inside Entry Second Floor Kitchenette View From Second Floor Suite Office Suite Office Suite page 5 of 14
Speiden LLC 22525 Marine View Dr S Des Moines Property Analysis Location Des Moines Down Payment $ 286,500.00 Selling Price $955,000 Units 9 Amount Finance $ 668,500.00 Actual Cap rate 5.56% Building sqft 4040 Approx. Interest 4.75% Market Cap rate 7.41% Zoning DC Monthly paymen $ 3,487.21 Land sqft 6000 Yearly payment $41,846.52 Building Price Per Foot $236.39 Land Price Per Foot $159.17 Monthly Rent Roll Unit Tenant Size Actual Monthly Rent Est. Market Monthly Rent Lease End Date Option #100 Meridian Healthcare L 915 $ 1,150.00 $ 1,575.35 3/31/18 1 two year #101 Trendsetters (11% NNN) L 466 $ 810.00 $ 825.00 12/31/18 1 five year #102 Debi O'Brien 434 $ 950.00 $ 950.00 Month to month #200 Sound Partners(16%NNN) 727 $ 1,250.00 $ 1,250.00 5/31/20 #201 Dave Sivret (10% NNN) L 376 $ 425.00 $ 625.00 9/30/17 #203 Joe Gillis 86 $ 330.00 $ 450.00 Month to month #204 Vacant 85 $ - $ 450.00 Vacant #205 Representatives Tina Orwall/Mia Gregerson 175 $600 $ 625.00 12/31/16 #206 Molly Schutte 174 $450 $ 620.00 Month to month Monthly Scheduled Income $ 5,965.00 $ 7,370.35 Other Income Total Yearly Income $ 71,580.00 $ 88,444.20 Annualized Operating Data Actual Market Scheduled Gross Income $ 71,580.00 $ 88,444.20 Less Vacancy $ 3,579.00 $ 4,422.21 Effective Rental Income $ 68,001.00 $ 84,021.99 Other Income: NNN Reimbursement $ 10,465.00 $ 12,120.00 Gross Operating Income $ 78,466.00 $ 96,141.99 Less Expenses $ 25,373.00 $ 25,373.00 Net Operating Income (NOI) $ 53,093.00 $ 70,768.99 Annual Debt Service $41,846.52 $41,846.52 Debt Service Ratio $ 1.27 $ 1.69 Annualized Operating Expenses Real Estate Taxes $ 10,373.00 Insurance $ 1,500.00 Utilities $ 10,100.00 Current Operations Management Fees Expenses/Unit Maintenance $ 3,400.00 Expenses/Foot Expenses as % of Gross Income 35% Total Expenses $ 25,373.00 *Information is believed to be correct, but is not gauranteed, buyer to verify to their own satisfaction. Projections are not gauranteed either page 6 of 14
Gross Income Vs. Operating Expenses $130,000 $117,000 $104,000 $91,000 $78,000 $65,000 $52,000 $39,000 $26,000 $13,000 Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Legend GROSS SCHEDULED INCOME Total Operating Expenses page 7 of 14
Operating Income Analysis $120,000 $108,000 $96,000 $84,000 $72,000 $60,000 $48,000 $36,000 $24,000 $12,000 Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Legend GROSS OPERATING INCOME NET OPERATING INCOME NET CASH FLOW (b/t) page 8 of 14
Cash Flow Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 GROSS SCHEDULED INCOME $87,444 $88,984 $90,554 $92,156 $93,790 $95,456 $97,156 $98,890 $100,658 $102,462 Turnover Vacancy ($3,849) ($3,926) ($4,004) ($4,085) ($4,166) ($4,250) ($4,335) ($4,421) ($4,510) ($4,600) Total Operating Expenses ($25,373) ($25,880) ($26,398) ($26,926) ($27,465) ($28,014) ($28,574) ($29,146) ($29,729) ($30,323) NET OPERATING INCOME $58,222 $59,177 $60,151 $61,145 $62,159 $63,193 $64,247 $65,323 $66,420 $67,539 Loan Payment ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) NET CASH FLOW (b/t) $15,061 $16,016 $16,990 $17,984 $18,998 $20,032 $21,086 $22,162 $23,259 $24,378 Cash On Cash Return b/t 4.81% 5.11% 5.42% 5.74% 6.06% 6.39% 6.73% 7.07% 7.42% 7.78% NET OPERATING INCOME $58,222 $59,177 $60,151 $61,145 $62,159 $63,193 $64,247 $65,323 $66,420 $67,539 Depreciation ($23,735) ($24,768) ($24,768) ($24,768) ($24,768) ($24,768) ($24,768) ($24,768) ($24,768) ($24,768) Amortization ($230) ($230) ($230) ($230) ($230) ($230) ($230) ($230) ($230) ($230) Loan Interest ($32,522) ($32,005) ($31,463) ($30,896) ($30,300) ($29,676) ($29,021) ($28,335) ($27,615) ($26,860) TAXABLE INCOME (LOSS) $1,736 $2,174 $3,690 $5,252 $6,861 $8,519 $10,228 $11,990 $13,807 $15,681 Income Taxes ($486) ($609) ($1,033) ($1,470) ($1,921) ($2,385) ($2,864) ($3,357) ($3,866) ($4,391) CASH FLOW (a/t) $14,575 $15,407 $15,957 $16,514 $17,077 $17,646 $18,222 $18,805 $19,393 $19,987 Cash On Cash Return a/t 4.65% 4.92% 5.09% 5.27% 5.45% 5.63% 5.81% 6.00% 6.19% 6.38% Footnotes: b/t = before taxes;a/t = after taxes page 9 of 14
Cash Flow Analysis Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 GROSS SCHEDULED INCOME $104,302 $106,179 $108,093 $110,046 $112,037 $114,069 $116,141 $118,255 $120,410 $122,609 Turnover Vacancy ($4,692) ($4,786) ($4,881) ($4,979) ($5,079) ($5,180) ($5,284) ($5,390) ($5,497) ($5,607) Total Operating Expenses ($30,930) ($31,548) ($32,179) ($32,823) ($33,479) ($34,149) ($34,832) ($35,528) ($36,239) ($36,964) NET OPERATING INCOME $68,681 $69,845 $71,033 $72,244 $73,480 $74,740 $76,025 $77,337 $78,674 $80,038 Loan Payment ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) ($43,161) NET CASH FLOW (b/t) $25,520 $26,684 $27,872 $29,083 $30,319 $31,579 $32,864 $34,176 $35,513 $36,877 Cash On Cash Return b/t 8.14% 8.51% 8.89% 9.28% 9.67% 10.08% 10.49% 10.90% 11.33% 11.77% NET OPERATING INCOME $68,681 $69,845 $71,033 $72,244 $73,480 $74,740 $76,025 $77,337 $78,674 $80,038 Depreciation ($24,768) ($24,768) ($24,768) ($24,768) ($24,768) ($24,768) ($24,768) ($24,768) ($24,768) ($23,746) Amortization ($230) ($230) ($230) ($230) ($230) ($230) ($230) ($230) ($230) ($230) Loan Interest ($26,069) ($25,239) ($24,369) ($23,456) ($22,500) ($21,497) ($20,445) ($19,342) ($18,186) ($16,973) TAXABLE INCOME (LOSS) $17,614 $19,608 $21,666 $23,790 $25,982 $28,245 $30,582 $32,996 $35,490 $39,089 Income Taxes ($4,932) ($5,490) ($6,066) ($6,661) ($7,275) ($7,909) ($8,563) ($9,239) ($9,937) ($10,945) CASH FLOW (a/t) $20,588 $21,194 $21,805 $22,422 $23,044 $23,670 $24,301 $24,937 $25,576 $25,932 Cash On Cash Return a/t 6.57% 6.76% 6.96% 7.15% 7.35% 7.55% 7.75% 7.96% 8.16% 8.27% Footnotes: b/t = before taxes;a/t = after taxes page 10 of 14
Investment Return Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Cash Flow - To Date $14,575 $29,982 $45,939 $62,453 $79,530 $97,176 $115,398 $134,203 $153,596 $173,583 Net Resale Proceeds $274,416 $291,471 $310,488 $330,345 $351,074 $372,709 $395,288 $418,847 $443,425 $469,064 Invested Capital ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) Net Return on Investment ($24,404) $8,059 $43,033 $79,403 $117,208 $156,490 $197,291 $239,655 $283,626 $329,252 Internal Rate of Return N/A 1.31% 4.58% 6.20% 7.13% 7.72% 8.12% 8.39% 8.59% 8.72% Modified IRR -7.79% 1.28% 4.38% 5.81% 6.56% 6.98% 7.22% 7.36% 7.42% 7.45% NPV (cash flow + reversion) ($22,736) $20,095 $64,754 $111,295 $159,770 $210,236 $262,751 $317,373 $374,165 $433,190 PV (NOI + reversion) $1,012,681 $1,087,517 $1,163,639 $1,241,076 $1,319,851 $1,399,993 $1,481,528 $1,564,485 $1,648,892 $1,734,777 Footnotes: a/t = after taxes; Modified IRR = Modified Internal Rate of Return; PV = Present Value; NPV = Net Present Value; NOI = Net Operating Income Reversion = Amount received from the resale; Net Return on Investment = Cash Flow (a/t To Date) + Net Proceeds from Resale - Invested Capital. page 11 of 14
Investment Return Analysis Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Cash Flow - To Date $194,171 $215,365 $237,170 $259,592 $282,635 $306,306 $330,607 $355,544 $381,119 $407,052 Net Resale Proceeds $495,806 $523,697 $552,781 $583,109 $614,732 $647,701 $682,074 $717,908 $755,263 $793,816 Invested Capital ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) ($313,395) Net Return on Investment $376,582 $425,666 $476,556 $529,306 $583,972 $640,612 $699,286 $760,056 $822,988 $887,473 Internal Rate of Return 8.82% 8.89% 8.94% 8.97% 8.99% 9.00% 9.01% 9.00% 8.99% 8.98% Modified IRR 7.44% 7.41% 7.37% 7.32% 7.27% 7.21% 7.14% 7.08% 7.01% 6.95% NPV (cash flow + reversion) $494,515 $558,209 $624,342 $692,988 $764,224 $838,128 $914,783 $994,273 $1,076,687 $1,162,116 PV (NOI + reversion) $1,822,171 $1,911,104 $2,001,606 $2,093,708 $2,187,444 $2,282,845 $2,379,944 $2,478,776 $2,579,376 $2,681,779 Footnotes: a/t = after taxes; Modified IRR = Modified Internal Rate of Return; PV = Present Value; NPV = Net Present Value; NOI = Net Operating Income Reversion = Amount received from the resale; Net Return on Investment = Cash Flow (a/t To Date) + Net Proceeds from Resale - Invested Capital. page 12 of 14
Financial Indicators Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Gross Rent Multiplier 10.92 10.90 10.89 10.88 10.86 10.85 10.84 10.83 10.82 10.81 Capitalization Rate 6.10% 6.20% 6.30% 6.40% 6.51% 6.62% 6.73% 6.84% 6.95% 7.07% Cash On Cash Return b/t 4.81% 5.11% 5.42% 5.74% 6.06% 6.39% 6.73% 7.07% 7.42% 7.78% Cash On Cash Return a/t 4.65% 4.92% 5.09% 5.27% 5.45% 5.63% 5.81% 6.00% 6.19% 6.38% Debt Coverage Ratio 1.35 1.37 1.39 1.42 1.44 1.46 1.49 1.51 1.54 1.56 Gross Income per Sq. Ft. $25.43 $25.88 $26.34 $26.81 $27.28 $27.77 $28.26 $28.76 $29.28 $29.80 Expenses per Sq. Ft. ($7.38) ($7.53) ($7.68) ($7.83) ($7.99) ($8.15) ($8.31) ($8.48) ($8.65) ($8.82) Net Income Multiplier 16.39 16.39 16.39 16.39 16.39 16.39 16.39 16.39 16.39 16.39 Operating Expense Ratio 30.35% 30.43% 30.50% 30.57% 30.64% 30.71% 30.78% 30.85% 30.92% 30.99% Loan To Value Ratio 71.13% 68.83% 66.53% 64.22% 61.91% 59.60% 57.28% 54.95% 52.61% 50.27% Footnotes: b/t = before taxes; a/t = after taxes page 13 of 14
Financial Indicators Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Gross Rent Multiplier 10.79 10.78 10.77 10.76 10.75 10.74 10.73 10.72 10.71 10.70 Capitalization Rate 7.19% 7.31% 7.44% 7.56% 7.69% 7.83% 7.96% 8.10% 8.24% 8.38% Cash On Cash Return b/t 8.14% 8.51% 8.89% 9.28% 9.67% 10.08% 10.49% 10.90% 11.33% 11.77% Cash On Cash Return a/t 6.57% 6.76% 6.96% 7.15% 7.35% 7.55% 7.75% 7.96% 8.16% 8.27% Debt Coverage Ratio 1.59 1.62 1.65 1.67 1.70 1.73 1.76 1.79 1.82 1.85 Gross Income per Sq. Ft. $30.34 $30.88 $31.44 $32.01 $32.59 $33.18 $33.78 $34.40 $35.02 $35.66 Expenses per Sq. Ft. ($9.00) ($9.18) ($9.36) ($9.55) ($9.74) ($9.93) ($10.13) ($10.33) ($10.54) ($10.75) Net Income Multiplier 16.39 16.39 16.39 16.39 16.39 16.39 16.39 16.39 16.39 16.39 Operating Expense Ratio 31.05% 31.11% 31.18% 31.24% 31.30% 31.36% 31.42% 31.48% 31.54% 31.59% Loan To Value Ratio 47.92% 45.55% 43.18% 40.79% 38.39% 35.97% 33.54% 31.09% 28.63% 26.14% Footnotes: b/t = before taxes; a/t = after taxes page 14 of 14