120-124 N Palmway, Lake Worth, FL OFFERING MEMORANDUM 120 & 124 N Palmway Lake Worth, FL 33460 Alexis Shapiro Broker Associate 954.573.4449 Ashapiro@onecommercialre.com
TABLE OF CONTENTS 03 EXECUTIVE SUMMARY 06 PROPERTY OVERVIEW 07 FINANCIAL ANALYSIS 10 MARKET & AREA OVERVIEW 14 PROPERTY PICTURES 19 COMPANY OVERVIEW ONE Commercial Contact: Alexis Shapiro Broker Associate Miami, FL 954.573.4449 Ashapiro@onecommercialre.com ONE COMMERCIAL REAL ESTATE 1000 Brickell Ave, Suite 500 Miami, FL, 33131 F: 305.704.9787 www.onecommercialre.com 2
EXECUTIVE SUMMARY THE OFFERING ONE Commercial is pleased to present the turn key investment opportunity in the prime waterfront community of East Lake Worth. The asset consists of 13 units that have gone under extensive renovations and boast some of the best curb appeal in the immediate area along with on site laundry facilities, new mini split A/C units, desirable unit mix and floorplans, and incredible walkability to Downtown Lake Avenue, beaches, Lake Worth municipal golf course, and the picturesque views of the intracoastal and palm beach island from Bryant Park. Lake Worth has experienced a serge of new development including new shopping centers with flagships such as Starbucks, luxury condominiums, along with the city currently in the process of redoing all damaged roads in the immediate surrounding area. With the cost of living rapidly increasing in close by Delray Beach, Boynton and Palm Beach; Lake Worth is the epitome of waterfront and urban living. INVESTMENT HIGHLIGHTS PRICE: # UNITS: PRICE/UNIT: CAP RATE: $2.15MM 13 $165,384 6.00% Excellent location in the prime waterfront community of East Lake Worth Walking distance to beaches Recently Renovated Central a/c Future use is downtown zoning 120-124 N Palmway, Lake Worth, FL N 3
EXECUTIVE SUMMARY REGIONAL MAP N 4
EXECUTIVE SUMMARY LOCAL MAP N 5
PROPERTY OVERVIEW Address: 120&124 N Palmway, Lake Worth, FL 33460 APN: 38-43-44-21-15-032-0050 Property Class: Zoning: MF-20-Low Density Multifamily ( 38-LAKE WORTH ) GBA: Lot Size: Unit Mix: B 7,496 SF 13,068 SF (0.30AC) (13) Multifamily Units Total (11) 1 BR/ 1 BA (2) 2 BA/ 2 BA Year Built: 1950 6
FINANCIAL ANALYSIS FINANCIAL ANALYSIS 120-124 N Palmway 120-124 N Palmway Lake Worth, FL 33460 Current Proforma Unit Type Units SF Rent Rent/SF Rent Rent/SF 1BR/1BA 11 535 $1,047 $1.96 $1,150 $2.15 2BR/2BA 2 1,150 $1,382 $1.20 $1,400 $1.22 Weighted Averages 13 630 $1,099 $1.84 $1,188 $2.00 Gross Annualized Rents $171,372 $185,400 Unit Distribution Unit Rent $1,600 $1.95 2BR/2BA 7% $1,400 $1,200 $1,000 $1.90 $1.85 $1.80 $1.75 1BR/1BA 93% $800 $600 $400 $200 $1.70 $1.65 $1.60 $1.55 $1.50 $0 1BR/1BA 2BR/2BA $1.45 1BR/1BA 2BR/2BA Rent $ Rent $/SF 7
FINANCIAL ANALYSIS OPERATING STATEMENT 120-124 N Palmway 8
FINANCIAL ANALYSIS ANALYSIS SUMMARY Property Pricing Price $2,150,000 # Units 13 Price $/Unit $165,384 Price $/SF $286.81 Sources Equity $1,878,750 Debt $4,736,250 Mortgage LTPP 72% Interest 4.75% Term 30 Payment $296,478 Return Summary Current Proforma NOI $381,655 $419,731 NCF $85,176 $123,253 Cap Rate 5.77% 6.35% GRM 11.66x 10.95x Cash-on-Cash 4.53% 6.56% Debt Coverage Ratio 1.29x 1.42x 120-124 N Palmway, Lake Worth, FL Price $2,015,000 # of Units 13 NRA (SF) 8,190 SF Price/Unit $155,000 Cap Rate 6.40% 9
MARKET & AREA OVERVIEW DEMOGRAPHICS POPULATION 1 MILE 3 MILES 5 MILES Population (Current) 17,665 82,397 220,438 Population (5 Yr. Forecast) 18,383 85,778 229,451 Percent Growth (Current Yr./2010) 10.07% 9.91% 9.83% Percent Forecast (5 Yr. Forecast/Current Yr.) 4.08% 4.11% 4.06% Median Age 36 40 39 Density (Population per Square Mile) 7,778 5,268 5,146 INCOME 1 MILE 3 MILES 5 MILES Median Household Income $50,780 $61,006 $58,333 Average Household Income $65,040 $80,600 $76,388 Per Capita Income $25,729 $31,533 $28,341 10
MARKET & AREA OVERVIEW PALM BEACH COUNTY Q2 2018 MULTIFAMILY MARKET Summary: Palm Beach vacancies have continued to fall throughout 2018 due to strong leasing. Employment and population growth outpaced the U.S. average for most of this cycle. However, a recent slowdown in job growth, coupled with strong levels of supply, has led to a softening in the apartment market. Rent growth has fallen from the highs seen in early 2016, but have made a slight recovery over the past couple of quarters. Investment volume has remained substantial over the past two years, with the Boca Raton Submarket being a leader in terms of both volume and pricing. KEY METRICS Q2 2018 Vacancy 7.94% Net Absorbtion 795 Units Construction 2,869 Units Completions 346 Units Effective Rents PSF $1.52 Cap Rates 5.90% Price per Unit $222,996 $ Sales Volume $747 Million Development: Recent development in Palm Beach County has been heavily weighted toward the condo market. Since 2006, over 17,000 condo units were completed. Unfortunately, condo construction is still slightly elevated, with approximately 2,000 condo units in the pipeline scheduled for delivery through Q2 2019. A modest 12,600 multifamily units have been completed since 2012. Additionally, 2,100 units are currently underway, and nearly 16,000 units are in the planning stages. Absorptions, Completions, Vacancies 1,000 9.50% 800 600 400 9.00% 8.50% 200 - (200) (400) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Completions Absorbtion Vacancy 8.00% 7.50% 7.00% Outlook: Palm Beach is one of the better performing metros in Florida. Positive job growth and strong in-migration trends have contributed to the health of apartment market fundamentals. Limited new supply is expected to keep demand steady as more residents (specifically retirees) migrate to the area. The metro is expected to continue experiencing among the strongest in-migration trends in the region, luring wealthy retirees and a young demographic drawn to job opportunities in the high-paying Professional/Business Services sector. Single-family affordability, along with an oversupply of condos, prevent this metro from receiving a higher rating. 11
MARKET & AREA OVERVIEW SURROUNDING AREA The City of Lake Worth is Palm Beach County s last true Old Florida cities, with homes built in the 50 s and 60 s in the beach cottage style. The businesses and residents are multi-cultural, artistic, and socially progressive. Lake Worth about 6.5 square miles, divided into four districts, snugly situated between West Palm Beach to the north, and Boynton Beach to the south, on the Atlantic Coast Lake Worth Playhouse a popular theatre in the area Lake Worth is best known as the artistic hub of Palm Beach County, as the Cultural Council of Palm Beach County is centered downtown. Also downtown is the Lake Worth Playhouse, a staple in the arts community, and the home of the famous Lake Worth Street Painting Festival. Bryant Park with its scenic water views With plenty of parks, including Bryant Park, a large open-space park on the Intracoastal, public beach access, a public golf course, a boat ramp, and freshwater lakes, this quaint little city by the Ocean offers residents and visitors alike plenty to do in the beautiful South Florida outdoors. William O. Lockhart Municipal Pier 12
MARKET & AREA OVERVIEW NEW DEVELOPMENTS LAKE COVE BY MERITAGE HOMES 19 th Ave N / N A ST Lake Worth, FL 33460 59 single-family homes community 3 BR & 4 BR Up to 2,819 SF Mid $300-400s THE ONE LUXURY CONDOMINIUMS 1 S Palmway Lake Worth, FL 33460 (14) Luxury 1 & 2 Bedroom Condo 1 BR/1 BA starting in the mid $400s 2 BR/2 BA starting in the mid $500s N 13
EXECUTIVE SUMMARY 120-124 N PALMWAY 14
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PROPERTY PICTURES 120-124 N PALMWAY 16
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PROPERTY PICTURES 120-124 N PALMWAY 18
COMPANY OVERVIEW ABOUT ONE COMMERCIAL Alexis Shapiro Broker Associate Miami, FL 954.573.4449 Ashapiro@onecommercialre.com Founded to be a Change Agent ONE Commercial Real Estate was founded by Daniel de la Vega, the President of ONE Sotheby s International Realty. Our commitment is to deliver superior results that accelerate the success of our clients and recognize and reward our team members. The Company facilitates the optimal outcome for owners, occupiers and developers in commercial real estate. ONE Commercial connects intelligence with experience, knowledge and technical skills to deliver better and faster executions for clients. We think differently, innovate and listen better. Finding the Heart Beat Moving the needle means implementing positive change. Defining and interpreting exactly what drives a clients goals and objectives is part of our essence. Every client need has a heart beat. It is that energy piece that reveals the best solution and how to get there. Being a great listener begins that process Our Business Approach Our values not only define us but they remind us every day why and how we serve our clients and our team members. Our professionals build trust and constantly challenge themselves to expand through our entrepreneurial culture. Our value equation is driven by one simple concept: deliver and execute consolidated solutions that come from fully understanding the target and delivering with knowledge and experience. Our core values: For Our Clients Think differently & advance success Listen more Do the right thing Innovate Outperform Serving Our Clients For Our Team Members Build team spirit Share Empower through learning & education Have fun Give back ONE Commercial designs and delivers services based upon a thorough understanding and analysis of market trends and dynamics and how those fit with our clients business objectives and timetables. 19