MARTIN MANOR APARTMENTS IN MT. AIRY 327 Cherry Street Mt. Airy, NC 27030 18 Units STEVE MAYGAR, CCIM, LEED AP 919 244 5169 Steve@Waterstonemfg.com
DISCLAIMER Waterstone Mul Family Group, LLC has been engaged as the exclusive lis ng Broker representa ve by the Owner for the sale of this property. No contact shall be made by any prospec ve purchaser or agents to the Owner, its execu ves, staff, personnel, tenants, or any other related en es. This Investment Offering Memorandum is a confiden al solicita on of interest, and the informa on provided herein is for the considera on of the purchase of the Property. The Owner expressly reserves the right, at its sole discre on, to reject any or all expressions of interest to purchase the Property and expressly reserves the right, at its sole discre on, to terminate discussions with any en ty at any me with or without no ce. The Owner shall have no legal commitment or obliga on to any en ty reviewing the Investment Offering Memorandum or making an offer to purchase the Property unless and un l the Owner executes and delivers a signed Purchase Agreement on terms acceptable to the Owner, at Owner s sole discre on. By submi ng an offer, a prospec ve purchaser will be deemed to have acknowledged the foregoing and agrees to release the Owner from any liability with respect hereto. Waterstone Mul Family Group, LLC nor the Owner make any representa on or warranty, express or implied, as to the accuracy or completeness of the informa on contained herein, and nothing contained herein shall be relied upon as a promise or representa on as to the future performance of the Property. This Investment Offering Memorandum may include certain statements and es mates by Waterstone Mul Family Group, LLC with respect to the projected future performance of the Property. These assump ons may or may not prove to be correct, and there can be no assurance that such es mates will be achieved. Further, Waterstone Mul Family Group, LLC and the Owner disclaim any and all liability for representa ons or warran es, expressed or implied, contained in or omi ed from this Investment Offering Brochure, or any other wri en or oral communica on transmi ed or made available to the recipient. The recipient shall be en tled to rely solely on those representa ons and warran es that may be made to it in any final, fully executed and delivered Purchase Agreement between it and the Owner. The enclosed materials are being provided solely to facilitate the prospec ve purchaser s own due diligence for which the purchaser shall be fully and solely responsible. All informa on contained herein is confiden al in nature, and recipient agrees not to photocopy or duplicate, forward or distribute, nor solicit third party interest without wri en permission and consent from Owner or Waterstone Mul Family Group, LLC. PROPERTY TOURS ARE BY APPOINTMENT ONLY. PLEASE CONTACT WATERSTONE MULTI FAMILY GROUP DIRECTLY FOR SCHEDULING. Comprehensive Mul Family Investment Sales and Advisory Services 2
TABLE OF CONTENTS EXECUTIVE/OFFERING SUMMARIES 4 FINANCIAL ANALYSIS & PRO FORMA 5 FINANCIAL ASSUMPTIONS 6 PROPERTY OVERVIEW 7 LOCATION MAPS 8 9 AERIAL MAPS 10 PROPERTY PHOTOS EXTERIOR 11 15 FLOORPLANS 16 17 PROPERTY PHOTOS INTERIOR 18 22 PROPERTY PHOTOS AMENITIES 23 PROPERTY/MECHANICAL/PHOTOS 24 25 POPULATION/EMPLOYMENT 26 27 DEMOGRAPHICS 28 31 ABOUT WATERSTONE 32 Comprehensive Mul Family Investment Sales and Advisory Services 3
EXECUTIVE/OFFERING SUMMARY Mar n Manor Apartments has a long and OFFERING SUMMARY storied past that you won t find in any other apartment complex. This impressive quarried granite structure has stood for over 100 years and should easily survive the next one hundred...or two. PROPERTY: NUMBER OF UNITS: CONSTRUCTION YEAR: Mar n Manor 18 1915 Mar n Memorial Hospital was originally built in 1915 as both a hospital and a training school for nurses. A er a fire in 1953 it closed it's doors to the public. Fast forward to the present and the Mar n Memorial Hospital has been renovated into beau ful apartments, that s ll keep the styles of the decades it thrived (with modern ameni es of course!). The exterior of the building is made with beau ful light grey granite from the nearby quarry, which is the largest openfaced granite quarry in the world (one of the many great things Mount Airy has to offer). The original structure had been added onto several years a er construc on and the Nursing School was built at that me as well. The Nursing School s ll stands and is located across the street and also made of OFFERING PRICE: TOTAL LSF: PRICE PER UNIT: PRICE PER SF: OCCUPANCY: ACREAGE: PROPERTY TYPE: CAPITALIZATION RATE: FINANCING: TBD TBD TBD 100% 1.2 Mul Family TBD TBD the same quarried granite. It is not included in this sale but it can be purchased as well. It is gu ed down to the studs currently and can be fi ed up for around 6 units and sits on about 2.6 acres. Due to it s very unique origina on and conversion, this property does not have any typical or standard unit sizes. When the apartments were constructed originally, the layout was completely dependent on the exis ng structure, no moving walls here! Therefore rents are typically based on size of the unit and if it has one or two bedrooms. Curently one of the units is u lized as an office and another is leased, rentfree, by the on site manager. Both of these can be rented at market immediately for addi onal income. The property is located just two blocks from downtown Mt Airy allowing tenants easy access to nearby employers. Comprehensive Mul Family Investment Sales and Advisory Services 4
FINANCIAL ANALYSIS Martin Manor 2017 Pro Forma Year 1 Year 2 Year 3 Year 4 Year 5 Income Growth Assumed 3.5% 3.0% 3.0% 3.0% 3.0% Expense Increase Assumed 2.0% 2.0% 2.0% 2.0% 2.0% Loss to Lease 0.0% 1.0% 1.0% 1.0% 1.0% 1.0% Vacancy 0.0% 6.0% 6.0% 6.0% 6.0% 6.0% Concessions 0.0% 1.0% 1.0% 1.0% 1.0% 1.0% Model/Employee 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Bad Debt 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% Economic Vacancy 0.0% 0.2% 8.1% 8.1% 8.1% 8.1% 8.1% INCOME Per Unit Per Unit Per Unit 1 Market Rent 81,180 4,510 91,380 5,077 94,121 96,945 99,853 102,849 2 Loss to Lease (914) (51) (941) (969) (999) (1,028) GROSS POTENTIAL RENT 81,180 4,510 90,466 5,026 93,180 95,976 98,855 101,821 3 Vacancy Loss (5,428) (302) (5,591) (5,759) (5,931) (6,109) 4 Concessions (905) (50) (932) (960) (989) (1,018) 5 Office/Model Unit 6 Employee Units 7 Bad Debt (162) (9) (90) (5) (93) (96) (99) (102) EFFECTIVE RENTAL INCOME 81,018 4,501 84,043 4,669 86,564 89,161 91,836 94,591 8 Other Income* 1,440 80 1,490 83 1,543 1,597 1,652 1,710 EFFECTIVE GROSS INCOME 82,458 4,581 85,533 4,752 88,107 90,758 93,489 96,302 EXPENSES Per Unit Per Unit Per Unit 9 Repairs & Maintenance* 6,300 350.00 6,426 357 6,555 6,686 6,819 6,956 10 Salaries and Payroll 12,000 666.67 7,000 389 7,140 7,283 7,428 7,577 11 General and Admin 2,700 150.00 2,754 153 2,809 2,865 2,923 2,981 12 Turnover Expense 13 Capital Maintenance 14 Utilities 11,880 660.00 12,118 673 12,360 12,607 12,859 13,116 15 Management Fee 5,883 327 6,001 6,121 6,243 6,368 16 Insurance 4,296 239 4,382 243 4,470 4,559 4,650 4,743 17 Taxes 7,860 437 8,017 445 8,178 8,341 8,508 8,678 TOTAL EXPENSES 45,036 2,502 46,580 2,588 47,511 48,462 49,431 50,419 Expense % of EGI #DIV/0! 54.6% 54.5% 53.9% 53.4% 52.9% 52.4% NOMINAL NOI 37,422 2,079 38,954 2,164 40,596 42,296 44,058 45,882 18 Capital Reserves 2,700 150 2,700 150 2,700 2,700 2,700 2,700 ECONOMIC NOI 34,722 1,929 36,254 2,014 37,896 39,596 41,358 43,182 DEBT SERVICE 387,941 381,834 375,415 368,668 361,576 Interest 19,556 19,258 18,946 18,618 18,272 Principle 5,809 6,106 6,419 6,747 7,092 TOTAL DEBT SERVICE (25,365) (25,365) (25,365) (25,365) (25,365) BEFORE TAX CASH FLOW 10,889 12,531 14,231 15,993 17,817 CAP RATE 6.91% 7.2% 7.5% 7.9% 8.2% Unleveraged IRR* 7.5% Cash on Cash 8.3% 9.5% 10.8% 12.2% 13.6% Leveraged IRR* 14.8% UNLEVERAGED BTCF (525,000) 36,254 37,896 39,596 41,358 566,765 LEVERAGED BTCF (131,250) 10,889 12,531 14,231 15,993 186,917 *IRR ASSUMPTIONS: FINANCING ASSUMPTIONS Purchase Price $525,000 LOAN TO VALUE 75% Hold Period 5 Years INTEREST RATE 5.00% Terminal Cap Rate 8.00% AMORTIZATION 30 Cost of Sale 3.0% Comprehensive Mul Family Investment Sales and Advisory Services 5
FINANCIAL ASSUMPTIONS UNDERWRITING ASSUMPTIONS 1 Market Rent: Market rent set current ownership. Various size units throughout the property. Rent is typical size dependent Unit SF # of Each Rent Per SF Monthly Annual Total Annual Rental Income: 2 Loss to Lease: 3 Vacancy Loss: 4 Concessions: 5 Office/Model Units: 6 Employee Units: 7 Bad Debt: 8 Other Income: 9 Repairs and Maintenance: 10 Salary and Payroll: No Loss to Lease currently Standard vacancy loss Includes nominal, one time concessions One unit is used as the office. Can be easily converted back to online unit There is one employee(manager) unit at this complex. Write offs and prior write off collected is reported here. Includes laudry and late charges This is on going yearly maintenance request items Manager also lives onsite rent free Position # of Each Salary Total Leasing agent (avg) 0 Leasing Manager 1 12,000 12,000 Maintenance Tech 0 Subtotal 1 12,000 12,000 Payroll Expenses TOTAL: 12,000 11 Turnover 12 Marketing & Admin: Standard Marketing and Admin cost with usually yearly increases. 13 MISC: 14 Utilities: 15 Management Fee: 16 Insurance: 17 Real EstateTaxes: Expenses incurred during ftypical turnover Water, cable & internet is included in the rent. Management/Commission expense is included Pro forma assumes an insurance expense of $200 per unit, per year. This is consistent with present cost and with market averages. 18 Capital Reserves: $2700/month for typical appliances, roof as needed, misc. Structure is granite stone. Comprehensive Mul Family Investment Sales and Advisory Services 6
PROPERTY OVERVIEW AMENITIES All rooms recently renovated New Appliances Water and Cable Included Convenient to downtown UTILITY PROVIDER PAID BY Electric Surry Yadkin Electric Membership Tenant Water/Sewer City of Mt. Airy Landlord Trash City of Mt. Airy Landlord Comprehensive Mul Family Investment Sales and Advisory Services 7
LOCATION MAPS STATE VIEW Comprehensive Mul Family Investment Sales and Advisory Services 8
LOCATION MAPS LOCAL VIEW Comprehensive Mul Family Investment Sales and Advisory Services 9
AERIAL MAPS Comprehensive Mul Family Investment Sales and Advisory Services 10
PROPERTY PHOTOS EXTERIOR Comprehensive Mul Family Investment Sales and Advisory Services 11
PROPERTY PHOTOS EXTERIOR Comprehensive Mul Family Investment Sales and Advisory Services 12
PROPERTY PHOTOS EXTERIOR Comprehensive Mul Family Investment Sales and Advisory Services 13
PROPERTY PHOTOS EXTERIOR Comprehensive Mul Family Investment Sales and Advisory Services 14
PROPERTY PHOTOS EXTERIOR Comprehensive Mul Family Investment Sales and Advisory Services 15
BUILDING LAYOUT Comprehensive Mul Family Investment Sales and Advisory Services 16
BUILDING LAYOUT Comprehensive Mul Family Investment Sales and Advisory Services 17
PROPERTY PHOTOS INTERIOR Comprehensive Mul Family Investment Sales and Advisory Services 18
PROPERTY PHOTOS INTERIOR Comprehensive Mul Family Investment Sales and Advisory Services 19
PROPERTY PHOTOS INTERIOR Comprehensive Mul Family Investment Sales and Advisory Services 20
PROPERTY PHOTOS INTERIOR Comprehensive Mul Family Investment Sales and Advisory Services 21
PROPERTY PHOTOS INTERIOR Comprehensive Mul Family Investment Sales and Advisory Services 22
PROPERTY PHOTOS AMENITIES Comprehensive Mul Family Investment Sales and Advisory Services 23
PROPERTY/MECHANICAL EXTERIOR INTERIOR Founda on Stacked Granite, Steel Pipe, I beam Kitchen Floors Vinyl Buildings 1 Bathroom Floors Vinyl Exterior Walls Quarried Granite Living Area Floors Carpet Roof Flat Stairways N/A Windows Double Pane Washer/Dryer Common Laundry MECHANICAL GROUNDS Piping/Electrical PVC/Copper Wiring Site Size/Density N/A HVAC Electric Hea ng & Central Air Zoning Reported as Hot Water Heater 40 Gallon Heater Per Unit Parking Spaces 35 + Street Fire Safety Smoke Alarm Per Unit Trash Centrally Located Receptacles Comprehensive Mul Family Investment Sales and Advisory Services 24
PROPERTY PHOTOS MECHANICAL Comprehensive Mul Family Investment Sales and Advisory Services 25
POPULATION Comprehensive Mul Family Investment Sales and Advisory Services 26
EMPLOYMENT Comprehensive Mul Family Investment Sales and Advisory Services 27
DEMOGRAPHICS Comprehensive Mul Family Investment Sales and Advisory Services 28
DEMOGRAPHICS Comprehensive Mul Family Investment Sales and Advisory Services 29
DEMOGRAPHICS Comprehensive Mul Family Investment Sales and Advisory Services 30
DEMOGRAPHICS Comprehensive Mul Family Investment Sales and Advisory Services 31
Waterstone Mul Family Group, LLC 9101 Southern Pine Blvd Suite 200, Charlo e, NC 28273 704 804 3342 CHARLOTTE RALEIGH GREENVILLE SPARTANBURG BIRMINGHAM ATLANTA ROANOKE 32