Offering Memorandum SOUND BREEZE APARTMENTS 5034 Fauntleroy Way SW Exclusively offered by Paragon Real Estate Advisors 600 University Street Suite 2018 98101 1
Offering Summary The Sound Breeze offers an investor the opportunity to acquire a turn-key, modern apartment building in one of the city s most popular and fastest growing neighborhoods. With large, contemporary floor-plans, complete appliance packages, and modern building mechanical systems and technology the Sound Breeze functions perfectly in the present form or could be renovated and repositioned to give it a contemporary feel with potential for even greater income. Additionally, the new owner can implement a utility bill-back system and can charge for parking to further increase revenue. Name Sound Breeze Apartments Address 5034 Fauntleroy Way SW, Total Units 6 Built 1989 Net Rentable Square Feet 5,424 Square Feet Gross Square Feet 7,864 Square Feet Price $1,450,000 Price Per Unit $241,667 Price Per Foot $267.33 Current GRM/CAP 14.1/4.6% (3% Vacancy) Market GRM/CAP 11.5/5.8% (5% Vacancy) Expense Per Unit $5,479/Year Terms Cash Out Lot Size 5,500 Square Feet Zoning LR1 600 University Street Suite 2018 98101 2
Investment Highlights Great opportunity to add value Significant upside in rents Large 2Bd/2Bth units with private balconies or patios Full size washer and dryer in-units 1989 Construction with copper plumbing and modern systems Secure garage parking with 7 stalls Secure access entry with intercom system 600 University Street Suite 2018 98101 3
Neighborhood Aerial QUEEN ANNE SEATTLE CBD ALKI BEACH NORTH ADMIRAL ELLIOTT BAY PORT OF SEATTLE WEST SEATTLE BRIDGE CALIFORNIA AVENUE SW ALASKA JUNCTION SOUND BREEZE APARTMENTS WEST SEATTLE GOLF COURSE MORGAN DISTRICT 600 University Street Suite 2018 98101 4
Location Highlights Excellent West Seattle location 3 blocks to Trader Joe s, LA Fitness and New Whole Foods Waking distance to Alaska Junction commercial district Low market vacancy rate of 3.1% (Dupre + Scott) Average West Seattle 2Bd/2Bth rent is $1,803 in buildings built between 1985-1989 (Dupre + Scott) 2 blocks to Rapid Ride C Line, close to West Seattle Bridge, I-5, 99 5 Miles to Seattle s central business district 600 University Street Suite 2018 98101 5
West Seattle Located in the Fairmount Park neighborhood, the Sound Breeze Apartments are right in the heart of West Seattle and close to everything that makes it so special. This central and convenient location provides residents with immediate access to all that makes West Seattle distinct and exciting while being only a short distance to Downtown Seattle and many other city attractions. Residents enjoy the wonderful walkability and quality of life in the neighborhood with everything that you need right around the corner. Within a few blocks is Trader Joe s, LA Fitness, the new Whole Foods, Chaco Canyon Organic Cafe, West Seattle Bowling, and Bank of America to name a few. Less than a 10-minute walk to the west is the Junction ; the main downtown commercial district of West Seattle with a fantastic selection of boutique shops, restaurants, bars, service businesses and a little of everything. The Junction neighborhood is home to local favorites such as Husky Deli (known for its homemade ice cream), Bakery Nouveau (award winning pastries and breads), Cupcake Royal, Starbucks, West 5 and restaurants including Matador, Jak s Grill, Pagliacci Pizza, Mashiko, and many more. The Alaska Junction has proven to be the strongest rental market in West Seattle, and according to Redfin, West Seattle is the number one neighborhood in the United States searched by Silicon Valley residents looking to relocate. West Seattle has some of the city s best parks and outdoor recreation and the Sound Breeze is close to it all. Within blocks, residents enjoy Fairmount Park, Camp Long and the West Seattle Golf Course. A little further, residents can explore Lincoln Park or spend a day on the beach on Alki. West Seattle residents also benefit from an easy 10-minute drive to Seattle Seahawks Century Link Stadium, Seattle Mariners Safeco Field, and the proposed arena that would be designated for basketball and hockey venues. The subject location offers convenient access to public transportation, including the Rapid Ride C Line Station located only a couple of blocks away, and the Water Taxi, both offering expedited service to Seattle s CBD. Residents commuting by car have quick access to the West Seattle Bridge which leads to Highway 99 and I-5. West Seattle provides many positive features of a small town community while offering close proximity to major employers, amenities and services that one desires in a large city 600 University Street Suite 2018 98101 6
Neighborhood Amenities SHOP: HEALTH + WELLNESS: EAT + DRINK: > > Buddha Ruksa > > Talaricos > > Jak s Grill > > Pico > > Bang Bar Thai > > The Matador > > Chaco Canyon > > Fresh Bistro > > Pecado Bueno > > Bakery Nouveau > > Fiddlehead Fine Foods > > Mashiko > > Capers Home > > NW Art & Frame > > Easy Street Records > > Radio Shack > > Click! > > Bartell Drugs > > Arts West Gallery > > Bin 41 > > True Value > > Curious Kidstuff > > Pegasus Books > > Twilight Gallery > > Thunder Road Guitars > > W.S. Farmer Market GROCERY: > > Trader Joe s > > Whole Foods (coming soon!) > > QFC > > Safeway > > Thriftway > > W.S. Farmers Market > > Huski Deli > > West Seattle Produce Co. > > Pellegrini Italian Market > > Breath Hot Yoga > > Bikram Hot Yoga > > LA Fitness > > GNC > > West Seattle Health Club > > Seattle Integrated Martial Arts > > Limber Yoga > > Whole Foods > > Fitness Together > > West Seattle Family YMCA PARKS + RECREATION: > > Camp Long > > West Seattle Golf Course > > Fairmount Park > > Lincoln Park > > Alki Beach > > Delridge Playfield > > Elliot Bay Brewery > > Starbucks > > Uptown Espresso > > Pagliacci > > Chipotle > > Cupcake Royale 600 University Street Suite 2018 98101 7
Improvements Built in 1989, the Sound Breeze Apartments is a stately and thoughtfully designed three story woodframed building constructed above a concrete parking garage. The building features a pitched composition roof, vinyl siding and double-paned vinyl windows making for efficiency and low maintenance. The building entry is through the garage or through the entry at the North side which features an intercom system for the residents safety and convenience. There are six apartments at the Sound Breeze, with two located on each floor. This design creates privacy and separation with only one shared wall between apartment units. All units are a large two-bedroom/ two-bathroom floor plan with spacious rooms, territorial views, lots of storage and private balconies or patios. Units also feature master bedrooms with on-suite baths, fireplaces, utility rooms with fullsized washer/dryers and kitchens with complete appliance packages. The lower level units have large wrap-a-round patios that offer excellent outdoor living and entertainment space. Apartment finishes and fixtures are typical with late 1980 s and early 1990 s construction. Finishes include carpet and vinyl flooring, laminate counter tops, white European cabinetry, and white appliances. The building mechanical systems include electric baseboard heating, individual electric meters, modern breaker panels, individual hot-water tanks located in the units, and copper plumbing. Residents enjoy the secure parking garage with seven stalls and the security and convenience of the intercom entry system. 600 University Street Suite 2018 98101 8
Building Photos 600 University Street Suite 2018 98101 9
Unit Photos 600 University Street Suite 2018 98101 10
Floorplan BATH KITCHEN BEDROOM BEDROOM BATH LIVING ROOM DECK DINING DINING DECK LIVING ROOM BATH KITCHEN BEDROOM BATH BEDROOM TYPICAL FLOORPLAN 600 University Street Suite 2018 98101 11
Operating Summary Total Monthly Income Monthly Scheduled Rent $8,445 $9,900 Parking Income (7 Stalls) $25/mo $50 $35/mo $245 Utility Income Current $35 $50/unit $300 Units 6 Year built 1989 Rentable Area 5,424 Down Payment $536,500 Loan Amount $913,500 Interest Rate 3.60% Amortization 30 Years Sound Breeze Apts 5034 Fauntleroy Way SW, Seattle WA Price $1,450,000 Price Per Unit $241,667 Per Square Foot $267.33 Current GRM 14.12 Current CAP 4.60% Market GRM 11.54 Market CAP 5.81% Other Income Proforma $30 Proforma $30 Total Monthly Income $8,560 $10,475 Annualized Operating Data Current Market Scheduled Gross Income $102,720 $125,700 Less Vacancy 3.00% $3,082 5.00% $6,285 Gross Operating Income $99,638 $119,415 Less Expenses $32,871 $35,200 Net Operating Income $66,767 $84,215 Annual Debt Service ($4,153.19) $49,838 $49,838 Cash Flow Before Tax 3.16% $16,929 6.41% $34,377 Principal Reduction $17,235 $17,235 Units Type Approx Size Current Rent Market Rent 1 2Bd/2Bth 904 $1,650 $1,650 1 2Bd/2Bth 904 $1,495 $1,650 1 2Bd/2Bth 904 $1,295 $1,650 1 2Bd/2Bth 904 $1,290 $1,650 1 2Bd/2Bth 904 $1,340 $1,650 1 2Bd/2Bth 904 $1,375 $1,650 6 Avg S.F. 904 $1.56 $1.83 Total Return Before Tax 6.37% $34,164 9.62% $51,612 Annualized Operating Expenses Current Market Real Estate Taxes $11,016 $12,500 Current Operations Insurance $2,500 $2,500 Expenses/Unit $5,479 Utilities $8,500 $8,500 Expenses/Foot $6.06 On-site Management $3,600 $3,600 Percent of GSI 32.99% Maintenance & Repairs $3,955 $4,800 Market Operations Turnover $900 $900 Expenses/Unit $5,867 Landscaping $900 $900 Expenses/Foot $6.49 Reserves $1,500 $1,500 Percent of GSI 29.48% Total Expenses $32,871 $35,200 600 University Street Suite 2018 98101 12
Sale Comparables 1. 6 UNIT 4050 California Ave SW, Seattle WA Year Built 1977 Units 6 Sales Price $1,700,000 Price/Unit $283,333 Price/Foot $346 GRM/CAP 17.5/3.4% Sales Date June 2016 2. 6 UNIT 4012 California Ave SW, Seattle WA Year Built 1977 Units 6 Sales Price $1,700,000 Price/Unit $283,333 Price/Foot $352 GRM/CAP 16.0/4.5% Sales Date April 2016 3. 6 UNIT 6708 California Ave SW, Seattle WA Year Built 2006 Units 6 Sales Price $1,450,000 Price/Unit $241,667 Price/Foot $225 GRM/CAP Unknown Sales Date May 2016 4. ADMIRAL FLATS 3431 California Ave SW, Seattle WA Year Built 1977 Units 8 Sales Price $2,450,000 Price/Unit $306,250 Price/Foot $416 GRM/CAP 13.5/5.3% Sales Date February 2016 5.THE HAMILTON 3040 SW Avalon Way, Seattle WA Year Built 1978 Units 6 Sales Price $880,000 Price/Unit $146,667 Price/Foot $307 GRM/CAP 14.0/3.9% Sales Date December 2015 6. EMERALD VIEW 2011 13th Ave S, Seattle WA Year Built 1989 Units 6 Sales Price $1,890,000 Price/Unit $315,000 Price/Foot $325 GRM/CAP 17.5/4.0% Sales Date October 2015 600 University Street Suite 2018 98101 13
Sales Comparables Map Sound Breeze Apartments 5034 Fauntleroy Way SW 1. 6 Unit 4050 California Ave SW 6 2. 6 Unit 4012 California Ave SW 3. 6 Unit 6708 California Ave SW 4 4. Admiral Flats 3431 California Ave SW 5. The Hamilton 3040 SW Avalon Way 6. Emerald View 2011 13th Ave S 1 2 3 5 SOUND BREEZE APARTMENTS 600 University Street Suite 2018 98101 14
Rent Comparables Property Units Age Unit Type Size Rent Rent/Sq.Ft Comments Sound Breeze Apartments 5034 Fauntleroy Way SW 6 1989 2Bd/2BTH 904 $1,290 - $1,650 $1.43 - $1.83 Washers and dryers in units, secured parking, private patios or balconies, intercom entry 1. Garden Terrace 4830 Fauntleroy Way SW 32 1986 2Bd/2BTH 842 $1,795 $2.13 Washers and dryers in units, original unit finishes 2. Ivy Court 6525 California Ave SW 33 1991 2Bd/1BTH 850-895 $1,525 - $1,775 $1.79 - $1.98 Washers and dryers in units, W/S/G included in rent, parking $45/mo or $65/mo with storage, views from upper units 3. Hudson Square 4850 California Ave SW 19 19689 2Bd/1BTH 2Bd/1.75BTH 790-875 875 $1,395 - $2,095 $1,550 - $1,895 $1.25 - $1.77 $1.77 - $2.17 Washers and dryers in units, W/S/G is billed back through RUBS, parking $45/mo, elevator, territorial views 4. Westside Flats 3233 SW Avalon Way 60 1999 2Bd/1BTH 2Bd/1.75BTH 715-850 1,095 $1,875 - $1,900 $2,200 - $2,400 $2.23 - $2.6 $2.01 - $2.19 Washers and dryers in units, W/S/Gindividually metered and billed back, parking from $85 - $135, updated units, elevator, views from upper units 5. City Watch Apartments 4744 41st Ave SW 90 1991 2Bd/2BTH 903 $1,985 $2.20 Washers and dryers in unts, garage parking, W/S/G is billed back to tenants 600 University Street Suite 2018 98101 15
Rent Comparables Map Sound Breeze Apartments 5034 Fauntleroy Way SW 1. Garden Terrace 4830 Fauntleroy Way SW 2. Ivy Court 6525 California Ave SW 3. Hudson Square 4850 California Ave SW 4. Westside Flats 3233 SW Avalon Way 5. City Watch Apartments 4744 41st Ave SW 3 5 1 4 SOUND BREEZE APARTMENTS 2 600 University Street Suite 2018 98101 16
Paragon Real Estate Advisors ABOUT PARAGON Paragon Real Estate Advisors is the leading Seattle real estate investment firm for multi-family property sales in Washington State. We have accrued over $3 billion in sales and have closed nearly 1,700 successful real estate transactions. We are locally owned, client-focused and highly experienced. When it comes to apartments and investment real estate in the Puget Sound region, we are the smart choice to partner with. At Paragon, we build long-term partnerships that help our clients reach their long- and short-term real estate investment goals while maintaining maximum profitability for them. Our brokers have an in-depth knowledge of the Washington state real estate market, particularly in the greater Seattle area and the I-5 corridor, that comes from more than 20 years experience in the industry. Paragon s unique focus on sharing knowledge, teamwork and collaboration within the brokerage industry leverages our collective intellect for all our clients. Our brokers provide superior customer representation through our innovative and effective marketing campaigns, co-brokerage, skilled negotiations, and ongoing partnerships. The information found in this offering memorandum has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. 600 University Street Suite 2018 98101 17