For more information contact: Broker chad@chadandersongroup.com John T Lewis Director of Development 253.678.1031 John@REISinvest.com Denny Anderson Co-Broker 253-720-8269 Denny@REISinvest.com Downtown Des Moines in the Marina District, on-site/secured parking & building, tons of amentities, close to Sounder. Walking distance to all major services, restaurants, Waterfront Beach Park & Des Moines beautiful marina. Several studios, 1 bdrms & 1 bdrms w/ den, 2 bdrms. Most with views, outdoor courtyard w/ hot tub. Sky Lounge on Penthouse floor, big screen TV, computer center, roof deck with spectacular marine views & BBQ area! On same street as Des Moines Business Park, close to 99 for easy access North or South! Phone: (253) 228-0444 Fax: (253) 759-8033 1100 Dexter Ave N #100 Seattle, WA 98109 www.ammgen Development Group LLC
Property Description Property description Marina 89 Mixed-use Project! The Marina 89 Proforma/Investment Analysis has been computed using a 25 year fixed rate from construction loan. We also have a proforma using HUD 221 format calculated on a 40 year non-recourse loan from construction directly to take out at 3.95% interest. Marina 89 LLC owns a site in downtown Des Moines a block and a half up from the Des Moines Marina, Beach Park & Beach Park Events Center. AmmGen has reviewed the site for development of an 89 unit apartment building with around 4,500 square feet in retail. The current plan is to build a high-end five floor wood-frame apartment building, over a concrete parking garage. The units themselves will have higher-end counters, fixtures and the top two floors facing west have sweeping marine views. Floor 2 contains an open courtyard west containing hot tub, trellis covered garden area and bar for special occasions. The fifth floor has a Sky Lounge with large screen T.V., lounge area, wi-fi and a large deck looking out over the water (314 square feet). From the Sky Lounge, one may take a spiral staircase up to the rooftop terrace. Which some consider the highlight of the Marina 89. With amentities such as; Roof Deck area dedicated to enjoying the great outdoors with wonderful marine views and barbecue area. The Marina 89 is the tallest building in the area so all tenants will have territorial views. The lot itself is 23,520 square feet. (ALTA survey available). The zoning (DC) allows building up to a height of 55 feet on sites over 20,000 square feet in a narrow four block area within the Marina District. All utilities are to the site. The site is relatively level, sloping slightly towards the marina to the West from 7th Ave. to the alley behind (3 foot drop). The parking spaces total 89. Full floor parking in basement and two thirds of the floor at 7th Ave. level behind the retail and office. Set up a tour to view your own private club! page 2 of 18
Location Map page 3 of 18
Regional Map page 4 of 18
Aerial Map page 5 of 18
Executive Summary ACQUISITION COSTS Purchase Price, Points and Closing Costs $22,475,000 Investment - Cash $3,037,000 First Loan $19,488,000 INVESTMENT INFORMATION Purchase Price $22,400,000 Price per Tenant $11,200,000 Price per Sq. Ft. $306.20 INCOME, EXPENSES & CASH FLOW Gross Scheduled Income $2,891,484 Total Vacancy and Credits ($130,579) Operating Expenses ($1,020,436) Net Operating Income $1,740,469 Debt Service ($905,937) Cash Flow Before Taxes $834,532 FINANCIAL INDICATORS Cash on Cash Return Before Taxes 27.48% Optimal Internal Rate of Return (yr 3) 92.42% Debt Coverage Ratio 1.92 Capitalization Rate 7.77% Gross Income / Square Feet $39.53 Gross Expenses / Square Feet ($13.95) Operating Expense Ratio 36.96% page 6 of 18
Pro Forma Summary INCOME Actual Per SF Market Per SF Gross Potential Rent $2,331,684 $31.87 $2,331,684 $31.87 Less: Vacancy ($130,579) ($1.78) $0 $0.00 Misc. Income $279,900 $3.83 $2,269,440 $31.02 Effective Gross Income $2,481,005 $33.91 $4,601,124 $62.90 OPERATING EXPENSES Actual Per SF Market Per SF Property Management Fee $110,436 $1.51 $0 $0.00 Replacement Reserves $50,000 $0.68 $0 $0.00 Total Expenses ($160,436) ($2.19) $0 $0.00 Net Operating Income $2,320,569 $31.72 $4,601,124 $62.90 page 7 of 18
Pro Forma Summary TENANT ANNUAL SCHEDULED INCOME Tenant Actual Market 21 diff units $ 2.68 SF $2,204,724 $2,204,724 comm. retail $2.30 SF $126,960 $126,960 TOTALS $2,331,684 $2,331,684 INVESTMENT SUMMARY Price: $22,400,000 Year Built: 2018 Tenants: 2 RSF: 73,155 Price/RSF: $306.20 Lot Size: 23,520 sf Floors: 5 ANNUALIZED INCOME Actual Market Gross Potential Rent $2,331,684 $2,331,684 Less: Vacancy ($130,579) $0 Misc. Income $279,900 $2,269,440 Effective Gross Income $2,481,005 $4,601,124 Less: Expenses ($160,436) $0 Net Operating Income $2,320,569 $4,601,124 Debt Service ($905,937) ($905,937) Net Cash Flow after Debt Service $1,414,632 $3,695,187 Principal Reduction $227,483 $227,483 Total Return $1,642,115 $3,922,670 Parking Spaces: 1:1 Cap Rate: 10.36% Market Cap Rate: 20.54% FINANCING SUMMARY Loan Amount: $19,488,000 Down Payment: $2,912,000 Loan Type: Fixed ANNUALIZED EXPENSES Actual Market Property Management Fee $110,436 $0 Replacement Reserves $50,000 $0 Total Expenses $160,436 $0 Expenses Per RSF $2.19 $0.00 Interest Rate: 3.5% Term: 40 years Monthly Payment: $75,495 DCR: 2.56 page 8 of 18
Real Estate Investment Details Analysis Analysis Date December 2016 Property Property Marina 89 Proforma (HUD loan) Property Address Year Built 2018 Purchase Information Property Type Mixed-Use Purchase Price $22,400,000 Tenants 2 Total Rentable Sq. Ft. 73,155 Resale Valuation 5.0% (capitalization of noi) Resale Expenses 1.0% Financial Information Down Payment $2,912,000 Closing Costs $75,000 LT Capital Gain 15.00% Passive Loss Rules Yes Discount Rate 5.00% Loans Type Debt Term Amortization Rate Payment LO Costs Fixed $19,488,000 40 years 40 years 3.5% $75,495 Income & Expenses Gross Operating Income $2,760,905 Monthly GOI $230,075 Total Annual Expenses ($1,020,436) Monthly Expenses ($85,036) Contact Information chad@chadandersongroup.com John T Lewis 253.678.1031 John@REISinvest.com Denny Anderson 253-720-8269 Denny@REISinvest.com 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 9 of 18
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 $2,891,484 $2,969,832 $3,050,529 $3,133,648 $3,219,261 $3,307,442 $3,398,268 $3,491,819 $3,588,176 $3,687,425 Turnover Vacancy ($130,579) ($134,497) ($138,531) ($142,687) ($146,968) ($151,377) ($155,918) ($160,596) ($165,414) ($170,376) Total Operating Expenses ($1,020,436) ($1,032,013) ($1,043,766) ($1,055,697) ($1,067,811) ($1,080,111) ($1,092,601) ($1,105,285) ($1,118,167) ($1,131,251) NET OPERATING INCOME $1,740,469 $1,803,322 $1,868,232 $1,935,264 $2,004,482 $2,075,953 $2,149,748 $2,225,938 $2,304,595 $2,385,797 Loan Payment ($905,937) ($905,937) ($905,937) ($905,937) ($905,937) ($905,937) ($905,937) ($905,937) ($905,937) ($905,937) NET CASH FLOW (b/t) $834,532 $897,385 $962,295 $1,029,327 $1,098,545 $1,170,016 $1,243,811 $1,320,001 $1,398,658 $1,479,860 Cash On Cash Return b/t 27.48% 29.55% 31.69% 33.89% 36.17% 38.53% 40.96% 43.46% 46.05% 48.73% Footnotes: b/t = before taxes;a/t = after taxes page 10 of 18
Internal Rate of Return Analysis BEFORE TAX IRR Time Future Cash Flows Initial Investment ($3,037,000) End of Year 1 $834,532 End of Year 2 $897,385 End of Year 3 $962,295 End of Year 4 $1,029,327 End of Year 5 $1,098,545 End of Year 6 $1,170,016 End of Year 7 $1,243,811 End of Year 8 $1,320,001 End of Year 9 $1,398,658 End of Year 10* $32,461,575 IRR = 43.2% * ($1,479,860 + $30,981,714) AFTER TAX IRR Time Future Cash Flows Initial Investment ($3,037,000) End of Year 1 $834,532 End of Year 2 $897,385 End of Year 3 $962,295 End of Year 4 $1,029,327 End of Year 5 $1,098,545 End of Year 6 $1,170,016 End of Year 7 $1,243,811 End of Year 8 $1,320,001 End of Year 9 $1,398,658 End of Year 10* $27,490,566 IRR = 41.9% * ($1,479,860 + $26,010,706) page 11 of 18
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 12.04 12.14 12.25 12.35 12.45 12.55 12.65 12.75 12.85 12.94 Capitalization Rate 7.77% 8.05% 8.34% 8.64% 8.95% 9.27% 9.60% 9.94% 10.29% 10.65% Cash On Cash Return b/t 27.48% 29.55% 31.69% 33.89% 36.17% 38.53% 40.96% 43.46% 46.05% 48.73% Cash On Cash Return a/t 27.48% 29.55% 31.69% 33.89% 36.17% 38.53% 40.96% 43.46% 46.05% 48.73% Debt Coverage Ratio 1.92 1.99 2.06 2.14 2.21 2.29 2.37 2.46 2.54 2.63 Gross Income per Sq. Ft. $39.53 $40.60 $41.70 $42.84 $44.01 $45.21 $46.45 $47.73 $49.05 $50.41 Expenses per Sq. Ft. ($13.95) ($14.11) ($14.27) ($14.43) ($14.60) ($14.76) ($14.94) ($15.11) ($15.28) ($15.46) Net Income Multiplier 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 Operating Expense Ratio 36.96% 36.40% 35.84% 35.30% 34.76% 34.22% 33.70% 33.18% 32.67% 32.16% Loan To Value Ratio 55.33% 52.75% 50.26% 47.87% 45.56% 43.34% 41.20% 39.14% 37.15% 35.23% Footnotes: b/t = before taxes; a/t = after taxes page 12 of 18
Cumulative Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Equity (appreciation) $12,409,372 $13,666,431 $14,964,641 $16,305,273 $17,689,632 $19,119,066 $20,594,963 $22,118,753 $23,691,908 $25,315,945 Equity (loan reduction) $227,483 $463,057 $707,010 $959,639 $1,221,254 $1,492,173 $1,772,729 $2,063,262 $2,364,130 $2,675,698 CASH FLOW (a/t) $834,532 $1,731,916 $2,694,211 $3,723,538 $4,822,082 $5,992,099 $7,235,910 $8,555,911 $9,954,569 $11,434,429 Totals - To Date $13,471,387 $15,861,404 $18,365,863 $20,988,450 $23,732,968 $26,603,339 $29,603,602 $32,737,926 $36,010,606 $39,426,072 Invested Capital ($3,037,000) ($3,037,000) ($3,037,000) ($3,037,000) ($3,037,000) ($3,037,000) ($3,037,000) ($3,037,000) ($3,037,000) ($3,037,000) ROIC - To Date 443.58% 522.27% 604.74% 691.09% 781.46% 875.97% 974.76% 1077.97% 1185.73% 1298.19% Footnotes: a/t = after taxes; ROIC = Return On Invested Capital page 13 of 18
Tenant Mix Report TENANT MIXES Suite Tenants Approx. SqFt Avg. Rents Monthly Mkt Rents Monthly 1 21 diff units $ 2.68 68555 $183,727 $183,727 $183,727 $183,727 2 comm. retail $2.30 4600 $10,580 $10,580 $10,580 $10,580 2 73,155 $194,307 $194,307 TENANT MIX TENANT MIX SQUARE FEET 21 diff units $ 2.68 SF comm. retail $2.30 SF 21 diff units $ 2.68 SF comm. retail $2.30 SF TENANT MIX INCOME TENANT MIX MARKET INCOME 21 diff units $ 2.68 SF comm. retail $2.30 SF 21 diff units $ 2.68 SF comm. retail $2.30 SF page 14 of 18
Property Equity Analysis $31,000,000 $27,900,000 $24,800,000 $21,700,000 $18,600,000 $15,500,000 $12,400,000 $9,300,000 $6,200,000 $3,100,000 Year 1 2 3 4 5 6 7 8 9 10 Legend Initial Equity Equity (loan reduction) Equity (appreciation) page 15 of 18
Equity vs. Debt $31,000,000 $27,900,000 $24,800,000 $21,700,000 $18,600,000 $15,500,000 $12,400,000 $9,300,000 $6,200,000 $3,100,000 Year 1 2 3 4 5 6 7 8 9 10 Legend Equity Loan Principal Balance page 16 of 18
Operating Income Analysis $3,600,000 $3,240,000 $2,880,000 $2,520,000 $2,160,000 $1,800,000 $1,440,000 $1,080,000 $720,000 $360,000 Year 1 2 3 4 5 6 7 8 9 10 Legend GROSS OPERATING INCOME NET OPERATING INCOME NET CASH FLOW (b/t) page 17 of 18
Gross Income Vs. Operating Expenses $3,700,000 $3,330,000 $2,960,000 $2,590,000 $2,220,000 $1,850,000 $1,480,000 $1,110,000 $740,000 $370,000 Year 1 2 3 4 5 6 7 8 9 10 Legend GROSS SCHEDULED INCOME Total Operating Expenses page 18 of 18