Offering Memorandum THE TIKI APARTMENTS 1124 Market Street Exclusively offered by Paragon Real Estate Advisors 1
Offering Summary The Tiki Apartments present a unique investment opportunity with an excellent location on the shores of Lake Washington in Kirkland s Eastside neighborhood. The property is located just blocks away from Kirkland s waterfront parks and in the dining, entertainment and shopping of the downtown area. Consisting of four apartments, the property is a prime candidate for an investor or an owner occupant with the potential for longer term redevelopment. Kirkland home values have gone up 16.1% over the past year and Zillow predicts they will rise 6.1% within the next year. The median price of all active properties in Kirkland is $975,000. The median rent price in Kirkland is $2,195, which is the same as the Seattle Metromedian of $2,195. FIRST TIME ON THE MARKET IN 30 YEARS Name The Tiki Apartments Address 1124 Market St, Total Units 4 Built 1962 / 1986 Square Feet 3,276 Net Rentable Price $1,495,000 Price Per Unit $373,750 Price Per Foot $456 Current GRM/CAP 28.09/2.39% Market GRM/CAP 13.40 / 6.04% Expense Per Unit $3,980 Terms Cash Out Lot Size 7,833 Square Feet Zoning MSC 1 2
Investment Highlights First time on the market in 30 years 3 2BD/1BTH & 1 1BD/1BTH units Average unit is 819 Square Feet Well-located on a corner lot Owner occupant potential Rental upside Common laundry On-site parking - 5 stalls 100% Occupied 6.04% Market cap Easy access to bus lines, light rail, and all major interstates Zoned MSC 1 for future redevelopment Short walk to Kirkland s beaches, Google campus and downtown Kirkland Spacious layouts 3
Aerial View JUANITA BAY PARK THE TIKI APARTMENTS KIRKLAND MIDDLE SCHOOL CRESTWOODS PARK PETER KIRK ELEMENTARY CROSS KIRKLAND CORRIDOR HERITAGE PARK DOWNTOWN KIRKLAND PETER KIRK PARK KIRKLAND URBAN MARINA PARK JUANITA BAY PARK LAKE WASHINGTON 4
Kirkland is an affluent Eastside neighborhood, with an excellent location on the shores of Lake Washington and close access to many top employers in the area. Downtown Kirkland and Marina Park is just to the South. This pedestrian-friendly neighborhood offers outstanding dining, entertainment, hotel, and shopping options. Only a 10 to 15 minute walk to the East, Google s new Kirkland campus hosts over 900 employees. The Bellevue Central Business District continues to expand and is less than a 10 minute drive from the subject property. The Downtown Seattle and South Lake Union employment centers are easily accessible via the new floating 520 bridge. With its dynamic community, to go along with its commanding views and scenic vistas, this area has a lot to offer prospective buyers. 5
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Operating Summary Units 4 Year built 1962 / 1986 Rentable Area 3,276 Down Payment $373,750 Loan Amount $1,121,250 Interest Rate 4.250% Amortization 30 Years Price $1,495,000 Price Per Unit $373,750 Per Square Foot $456 Current GRM 28.09 Current CAP 2.39% Market GRM 13.40 Market CAP 6.04% Current Monthly Market Monthly Units Type Size Rent Income Rent Income 1 1Bd/1Bth 725 $1,225 $1,225 $2,295 $2,295 1 2Bd/1Bth 850 $1,050 $1,050 $2,295 $2,295 1 2Bd/1Bth 850 $1,050 $1,050 $2,295 $2,295 1 2Bd/1Bth 850 $1,050 $1,050 $1,995 $1,995 4 Avg S.F. 819 $1.34 $2.71 Total Monthly Income Monthly Scheduled Rent $4,375 $8,880 Utility Billback $0 $90/unit $350 Common Laundry $60 $60 Miscellaneous $0 $10 Total Monthly Income $4,435 $9,300 Annualized Operating Data Current Market Scheduled Gross Income $53,220 $111,600 Less Vacancy 3.00% $1,597 3.00% $3,348 Gross Operating Income $51,623 $108,252 Less Expenses $15,919 $17,939 Net Operating Income $35,704 $90,313 Annual Debt Service ($5,515.88) $66,191 $66,191 Cash Flow Before Tax -8.16% ($30,486) 6.45% $24,122 Principal Reduction $18,903 $18,903 Total Return Before Tax -3.10% ($11,584) 11.51% $43,025 Annualized Operating Current Market Expenses Real Estate Taxes 2016 Actual $8,079 $10,099 Insurance 2016 Acutal $1,956 $1,956 Utilities 2016 Acutal $3,523 $3,523 Maintenance & Repairs 2016 Actual $1,793 $1,793 Gas & Common Electrical 2016 Actual $568 $568 Total Expenses $15,919 $17,939 Current Operations Expenses/Unit Expenses/Foot Percent of EGI $3,9780 $4.86 29.91% Market Operations Expenses/Unit Expenses/Foot Percent of EGI $4,485 $5.48 16.07% 12
Sale Comparables THE TIKI APARTMENTS 1124 Market Street, Year Built 1962 / 1986 Units 4 Sales Price $1,495,000 Price/Unit $373,750 Price/Foot $456 GRM/CAP 28.09 Sales Date TBD 2. 8722 116TH AVE NE Year Built 1977 Units 4 Sales Price $1,450,000 Price/Unit $362,500 Price/Foot $388 GRM/CAP 22/4% Sales Date 8.02.2016 1. 229 5TH AVE Year Built 1953 Units 5 Sales Price $1,800,000 Price/Unit $360,000 Price/Foot $481 GRM/CAP 27/2.76% Sales Date 2.27.2017 3. 9032 NE JUANITA DR Year Built 1978 Units 4 Sales Price $1,505,000 Price/Unit $376,250 Price/Foot $371 GRM/CAP 13/6% Sales Date 4.22.2016 4. 205 5TH AVE S Year Built 1976 Units 6 Sales Price $2,250,000 Price/Unit $375,000 Price/Foot $355 GRM/CAP 19/3.58 Sales Date 2.29.2016 13
Sales Comparables Map The Tiki Apartments 1124 Market Street, 3 1. 229 5th Ave 2. 8722 116th Ave NE 3. 9032 NE Juanita Dr 4. 205 5th Ave S MARKET STREET FOURPLEX 1 2 4 14
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 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. 15