Offering Memorandum JUNCTION 8 4001 SW Edmunds St Exclusively offered by Paragon Real Estate Advisors 1
JUNCTION 8 2
Offering Summary The Junction 8 is a low maintenance, easy to manage building located in West Seattle s thriving Alaska Junction neighborhood. Built in 1987 by the current owner, the 3 one-bedroom and 5 two-bedroom units feature open and spacious floor plans, decks, and convenient open and covered parking. The building offers modern systems and varying degrees of updates including granite counter tops, LVT flooring in bathrooms and kitchens, full appliance packages, separate utility rooms, and built in vacuum systems. Seattle s vibrant Alaska Junction (known locally as the Junction ) is home to over 150 businesses including a mix of old and new favorites for shopping, dining, entertainment and services. This apartment building has received a 93 Walk Score, which means the Junction 8 is a Walker s Paradise. It s location in the heart of West Seattle s urban village offers residents easy access to the Metro Rapid Ride Transit Hub which connects West Seattle to employment centers in downtown Seattle and South Lake Union. This area will also be home to West Seattle s light rail station slated to be built just to the north of the Junction 8 apartments along SW Alaska Way. Situated on the Sound, West Seattle is one of the city s most desirable residential neighborhoods. The Alaska Junction is in the heart of West Seattle mid-way between two waterfront parks: Alki Beach Park to the north and Lincoln Park to the South. Neighborhood parks such as Fairmount, and newly developed West Seattle Junction Park are within easy walking distance. This property offers residents an incredible location to call home, and an owner an excellent investment opportunity. Name Junction 8 Address 4001 SW Edmunds St, Seattle WA 98116 Total Units 8 Built 1987 Square Feet 6,249 Total Net Rentable Price $2,350,000 Price Per Unit $293,750 Price Per Foot $376.06 Current GRM/CAP 17.18/4.00% (3% Vacancy) Market GRM/CAP 13.06/5.59% (3% Vacancy) Expense Per Unit $4,827/Year Lot Size and Zoning 5,750 Square Feet zoned LR2 JUNCTION 8 3
Investment Highlights West Seattle s A+ location Rapid Ride C Line, Future Light Rail location and direct access to employment centers 1987 construction with low maintenance features Modern systems including copper plumbingand fire sprinkler system Composition roof and individual breaker system Value add potential with significant rental upside 4
Neighborhood Map BALLARD QUEEN ANNE SEATTLE CBD ALKI BEACH NORTH ADMIRAL W. SEATTLE WATER TAXI PORT OF SEATTLE WEST SEATTLE BRIDGE THE JUNCTION JUNCTION 8 CALIFORNIA AVENUE 5
Location Highlights Located in West Seattle s premier rental neighborhood Alaska Junction Alaska Junction is the business hub for the area offering over 150 businesses 93 Walk Score - Walker s Paradise Rapid Ride C Metro Bus Line Frequent Stops with no need for a schedule One block South of future Light Rail station West Seattle s shopping hub according to Seattle Magazine Well known eating establishments include Jak s Grill, Ma ono, Matador, Taliricos Pizzeria, West Five, Mashiko Sushi, Mod Pizza, Easy Street Records Popular coffee and gathering locations include Starbuck s, Uptown Espresso, Bakery Nouveau (Winner of European Bakery Championship) and Cupcake Royale Grocers include QFC, Safeway, Trader Joes and the New Whole Foods just one block away located in the new Whittaker Apartments. Alaska Junction Urban Village zoned LR2 The new 2/3 acre West Seattle Junction Park is located 1/2 block away Walk to Fairmount Park, Junction Plazza Park and within a short drive to West Seattle s 18 hole Public Golf Course, Alki Beach Park, and one of Seattle Largest Waterfront Parks Lincoln Park with salt water pool and tennis courts. 6
West Seattle Snapshot Population 57,982 Median household income $92,837 Owner Occupied Renters Walk Score Bike Score Transit Score 57% 43% 69 - Somewhat Walkable 68 - Bikable 32 - Some Transit Median 1 Bd/1 Bth Rent $1,993 Median 2Bd/1 Bth Rent $2,267 Seattle Commute Times Bus: 37 minutes via Bus 50 and 120 Car: 28 minutes WSB and I5 Bellevue Commute Times Bus: 66 minutes via Bus 50 and 550 Car: 52 minutes via WSB and I90 TOP JOB SECTORS: * Management: 17.6% Sales 10.6% Business 10.4% Administrative: 9.2% Computers 6.1% Food Service 5.4% Entertainment: 5.2% Education 5.2% Healthcare: 4.1% Legal 1.8% Construction 2.7% Social Services: 2.4% * https://statisticalatlas.com/neighborhood/washington/seattle/west-seattle 7
West Seattle West Seattle is one of Seattle s core residential neighborhoods. It is known as the birthplace of Seattle and provides a relatively quick commute to Seattle s Central Business District. It is known for its natural beauty and waterfront beach community feel. It is home to two of Seattle largest waterfront parks, Lincoln Park, a 135-acre waterfront park with walking and bike trails, a saltwater pool, picnic and play areas, and beach access, and Alki Beach Park, a 2.5 mile beach with sandy beaches, bike and jogging lanes and many restaurants, pubs and many yearly events for everyone to enjoy. West Seattle is one of the only neighborhoods you don t have to drive through to get to another neighborhood. It s located along the peninsula just West of downtown Seattle. It provides a quick 10 minute drive time to downtown Seattle during non-commuter times which makes it an attractive place to live, play, and work with quick access to Seahawks Century Link Stadium and Mariners Safeco Field. West Seattle residents can get to downtown by car, bike, Metro s Rapid Ride C-line, West Seattle s passenger ferry as well as the future light rail service. West Seattle is the number one neighborhood in the United States searched by Silicon Valley residents looking to relocate. 8
Neighborhood Amenities LINCOLN PARK JUNCTION 8 FUTURE LIGHT RAIL STATION 9
Employment Greater Seattle excels at the industries of the future - the region is a center of innovation and features some of the world s top global brands. Our aerospace industry is one of the largest in the world, home to Boeing Commercial Airplanes and over 800 aerospace firms that employ 17% of all aerospace workers in the United States. Greater Seattle is also a leading center for information and communications technology, bolstered by industry pioneers such as Microsoft and Amazon. As a result, our region has emerged as a world leader in cloud computing and data visualization, and ranks 4th as a global startup hub ahead of New York and Boston. > > Adobe > > Alaska Airlines > > Amazon > > Apple > > AT&T Wireless > > Boeing > > Costco > > Expedia, Inc. > > Expeditors International > > F5 Networks > > Facebook > > Fred Hutchinson > > Gates Foundation > > Getty Images > > Google > > Microsoft > > Nintendo > > Nordstrom > > Paccar > > RealNetworks > > REI > > Russell Investments > > SpaceX > > Starbucks > > Symetra Financial > > Tableau Software > > T-Mobile > > Twitter > > Uber > > University of Washington > > Virginia Mason > > Weyerhaeuser > > Zillow > > Zulilly 10
Improvements 1987 construction Modern buildings systems include fire sprinklered, pitched composition roof, copper plumbing, individual breaker panels and low maintenance features Secured access entry with intercom system Open and spacious floor plans with six, two-bedroom units and two, one-bedroom units Most units include a private deck which have been recently resurfaced Full appliance package includes full-size washers and dryers, refrigerators, range/ovens and microwaves Features include built-in vacuum system, wood burning fireplaces and under counter LED lighting Hansgrohe kitchen and bathroom faucets Various remodeled unit updates include granite counter tops, resurfaced cabinets and pulls, LVT flooring in bathroom and kitchens (not all units) Eight on-site parking spaces - four covered and four open spaces 11
Building Photos 12
Unit Photos 13
Unit Photos 14
Floor Plans FIRST FLOOR SECOND FLOOR THIRD FLOOR 15
Rent Roll Units Type Size Rent Rent /Sq.Ft. 101 1Bd/1Bth 669 $1,325 $1.98 102 856 $1,495 $1.75 201 1Bd/1Bth 669 $1,285 $1.92 202 856 $1,610 $1.88 203 837 $1,395 $1.67 301 1Bd/1Bth 669 $1,340 $2.00 302 856 $1,545 $1.80 303 837 $1,280 $1.53 8 Avg/Totals 781 $1,409 $1.82 16
Operating Summary Units 8 Year built 1987 Rentable Area 6,249 Sq.Ft. Down Payment $1,100,000 47% Loan Amount $1,250,000 53% Interest Rate 4.30% Amortization 30 Years Price $2,350,000 Price Per Unit $293,750 Per Square Foot $376.06 Current GRM 17.18 Current CAP 4.00% Market GRM 13.06 Market CAP 5.59% * Loan quotes range from $1.25M to $1.6M depending on buyers qualifications and experience Units Type Size Current Rent Monthly Income Market Rent Monthly Income 3 1Bd/1Bth 669 $1,285 - $1,340 $4,075 $1,500 $4,500 2 837 $1,280 - $1,395 $2,675 $1,800 $3,600 3 856 $1,495 - $1,610 $4,650 $1,950 $5,850 8 Avg S.F. 781 $1.82 $2.23 Total Monthly Income Monthly Scheduled Rent $11,400 $13,950 Utility Income $30/unit $0 $75/unit $600 Parking Income $0 $50/space $400 Storage Income $0 $40 Total Monthly Income $11,400 $14,990 Annualized Operating Data Current Market Scheduled Gross Income $136,800 $179,880 Less Vacancy 3.0% $4,104 3.0% $5,396 Gross Operating Income $132,696 $174,484 Less Expenses $38,614 $43,095 Net Operating Income $94,082 $131,389 Annual Debt Service ($6,186/mo) $74,231 $74,231 Cash Flow Before Tax 1.80% $19,851 5.20% $57,158 Principal Reduction $20,889 $20,889 Total Return Before Tax 3.70% $40,741 7.10% $78,047 Annualized Operating Expenses Current Market Real Estate Taxes 2018 $18,608 $18,608 Insurance Act/Proforma $3,919 $2,400 Utilities 12mth-Actual $10,034 $10,034 On-Site Management Act/Proforma $0 $4,800 Maintenance & Repairs 2017 $3,553 $3,553 Turnover Act/Proforma $0 $1,200 Advertising & Admin Actual $500 $500 Reserves Proforma $2,000 $2,000 Total Expenses $38,614 $43,095 Current Operations Expenses/Unit Expenses/Foot Percent of EGI $4,827 $6.18 28.23% Market Operations Expenses/Unit Expenses/Foot Percent of EGI $5,387 $6.90 23.96% 17
Sale Comparables SUBJECT - JUNCTION 8 4001 SW Edmunds St, Seattle WA Year Built 1987 Units 8 Sales Price $2,350,000 Price/Unit $293,750 Price/Foot $376.06 GRM/CAP 17.2/4.0% Sales Date TBD 2. PHINNEY APARTMENTS 4800 Phinney Ave N, Seattle WA Year Built 1988 Units 8 Sales Price $2,975,000 Price/Unit $371,875 Price/Foot $538.56 GRM/CAP 19.5/3.3% Sales Date 10.25.2017 4. 12 UNIT APARTMENT 1526 44th Ave SW, Seattle WA Year Built 1991 Units 12 Sales Price $3,475,000 Price/Unit $289,583 Price/Foot $372.73 GRM/CAP 17.2/3.8% Sales Date 7.14.2017 1. ALKI CANOE CLUB 3036 60th Ave SW, Seattle WA Year Built 1984 Units 12 Sales Price $4,419,080 Price/Unit $368,257 Price/Foot $420.86 GRM/CAP 16.5/4.2% Sales Date 10.31.2017 3. ORION PLACE 4127 California Ave SW, Seattle WA Year Built 1960 Units 6 Sales Price $1,850,000 Price/Unit $308,333 Price/Foot $336.73 GRM/CAP Sales Date 9.8.2017 Unknown 5. ADMIRAL APARTMENTS 3056 60th Ave SW, Seattle WA Year Built 1993 Units 7 Sales Price $2,425,000 Price/Unit $346,429 Price/Foot $413.61 GRM/CAP 18.9/3.5% Sales Date 7.10.2017 18
Sales Comparables Map Junction 8 4001 SW Edmunds St 1. Alki Canoe Club 3036 60th Ave SW 2 2. Phinney Apartments 4800 Phinney Ave N Seattle, WA 98103 3. Orion Place 4127 California Ave SW 4. 12 Unit Apartment 1526 44th Ave SW 4 5. Admiral Apartments 3056 60th Ave SW 5 1 3 JUNCTION 8 19
Rent Comparables Property Units Age Unit Type Size Rent Rent/Sq.Ft. Junction 8 - CURRENT 4001 SW Edmunds 8 1987 1Bd/1Bth 669 837 856 $1,285 - $1,340 $1,280 - $1,395 $1,495 - $1,610 $1.92 - $2.00 $1.53 - $1.67 $1.75 - $1.88 Junction 8 - MARKET 4001 SW Edmunds 8 1987 1Bd/1Bth 669 837 856 $1,500 $1,800 $1,950 $2.24 $2.15 $2.28 1. The McKay Apartments 4857 Fauntleroy Way SW 22 1957 1Bd/1Bth 550 $1,500 $2.73 2. Sound View Apartments 5034 Fauntleroy Way SW Seattle, WA 98136 6 1989 2Bd/2Bth 1,050 $1,995 $1.90 3. Alaska 45 4546 45th Ave SW 17 1962 1Bd/1Bth 600 950 $1,995 $2,290 $3.33 $2.41 4. Garden Terrace I 4830 Fauntleroy Way SW 32 1986 1Bd/1Bth 2Bd/2Bth 600-700 842 $1,395 - $1,495 $1,795 $2.13 - $2.33 $2.13 20
Rent Comparables Map Junction 8 4001 SW Edmunds 1. The McKay Apartments 4857 Fauntleroy Way SW 3 2. Sound View Apartments 5034 Fauntleroy Way SW Seattle, WA 98136 3. Alaska 45 4546 45th Ave SW 4. Garden Terrace I 4830 Fauntleroy Way SW JUNCTION 8 4 1 2 21
Adjacent Rentals Property Units Age Unit Type Size Rent Rent/Sq.Ft. Junction 8 - CURRENT 4001 SW Edmunds 8 1987 1Bd/1Bth 669 837 856 $1,285 - $1,340 $1,280 - $1,395 $1,495 - $1,610 $1.92 - $2.00 $1.53 - $1.67 $1.75 - $1.88 Junction 8 - MARKET 4001 SW Edmunds 8 1987 1Bd/1Bth 669 837 856 $1,500 $1,800 $1,950 $2.24 $2.15 $2.28 1. Whittaker Apartments 4755 Fauntleroy Way SW 389 2016 1Bd/1Bth 1Bd/1Bth 559-608 674 835 $1,737 - $1,947 $1,967 - $1,972 $2,829 $3.20 - $3.10 $2.92 - $2.93 $3.39 2. Elan 41 4100 SW Edmunds St 78 1987 1Bd/1Bth 760-795 950-1,000 $1,755 - $1,962 $2,258 - $2,747 $2.31 - $2.47 $2.38 - $2.75 3. City Watch Apartments 4744 41st Ave SW 96 1993 1Bd/1Bth 837-844 903-1,060 $1,595 $2,095 - $2,295 $1.89 - $1.91 $2.17 - $2.32 4. Broadstone Sky 4745 40th SW 151 2015 1Bd/1Bth 555-671 968 $1,585 - $1,575 $2,865 $2.35 - $2.86 $2.96 22
Adjacent Rentals Junction 8 4001 SW Edmunds St 1. Whittaker Apartments 4755 Fauntleroy Way SW 2. Elan 41 4100 SW Edmunds St 3. City Watch Apartments 4744 41st Ave SW 2 3 4 1 4. Broadstone Sky 4745 40th SW JUNCTION 8 23
Paragon Real Estate Advisors ABOUT PARAGON Paragon Real Estate Advisors is the leading Seattle real estate investment firm for multifamily property sales in Washington State. We have accrued over $3.4 billion in sales and have closed over 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 23 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. 24