A 94-Unit Class B- Multifamily Investment Opportunity OFFERED BY: KET Enterprises Incorporated and Houston Income Properties, Inc. Nantucket Square Townhomes 2218 Place Rebecca Lane I Houston I Texas I 77090
APARTMENTS FOR SALE $6,250,000 PRICE PER UNIT $66,489 PRICE PER SQ. FT. $46.55 Units: 94 TERMS ALL CASH Avg Size: 1428 PRO FORMA CAP RATE 7.96% Date Built: 1983 Rentable Sq. Ft.: 134,276 Acreage: 3.48 Occupancy: 88% Class: B- SALIENT FACTS: Available on an All Cash or New Loan Basis Located in the 1960 area of north Houston Built as townhomes, possibly condo conversion Large family size units Under building garages Excellent driveby For More Information Please Contact: Tom Wilkinson twilk4@ketent.com 713-355-4646 ext 102 KET/HIP Jim Hurd jhurd@houstonincomeproperties.com 713-783-6262
Physical Information Financial Information Proposed Loan Parameters Operating Information Number of Units Avg Unit Size 94 1428 Asking Price $6,250,000 Est New Loan @ 70% of Asking $4,375,000 Est Mkt Rent (Aug-13) Price Per Unit $66,489 Amortization 30 Yrs Estimated Collections Net Rentable Area 134,276 Price Per Sq. Ft. $46.55 Land Area (Acres) 3.48 Stabilized NOI $497,311 Units per Acre 27.011 Annual Debt Service Monthly P & I Interest Rate Date Built 1983 Date Due Water Meter / Master Elec Meter Rubs Indiv Est Res for Repl/Unit/Yr Yield Maintenance Roof Style Pitched HVAC System Indiv $236,262 $19,689 5.40% 10 Yrs $300 Yes Physical Occ (Sep-13) Est Ins per Unit per Yr Property Tax Information $84,660 $79,919 88% $600 Tax Rate (2012) 2.55640 2013 Prelim Tax Assessment $3,158,440 Est 2013 Taxes $80,742 Est Future Tax Assessment $4,869,000 Est Future Taxes $124,471 INCOME PRO-FORMA INCOME Current Street Rent with a 5% Increase 1,066,716 Estimated Gross Scheduled Income 1,066,716 Estimated Loss to Lease (2% of Total Street Rent) (21,334) 2% Estimated Vacancy (7% of Total Street Rent) (74,670) 7% Estimated Concessions and Other Rental Losses (5% of Total Street Rent) (53,336) 5% Estimated Utilities Income Estimated Other Income(including Bad Debt Recovery) 72,433 Estimated Total Rental Income ESTIMATED TOTAL PRO-FORMA INCOME MODIFIED ACTUALS PRO-FORMA $88,893 / Mo $88,893 / Mo 31,071 $331 / Unit / Yr $771 / Unit / Yr 1,020,879 1,020,879 $85,073 / Mo May 2013 thru oct 2013 Income Annualized EXPENSE Fixed Expenses Taxes Insurance Total Fixed Expense Utilities Electricity Water & Sewer Gas $959,027 Sep 2012 thru Aug 2013 Expenses Estimated Expenses Fixed Expenses Estimated Fixed Expenses $58,406 $621 per Unit 8/13 OS $124,471 $1,324 per Unit $62,142 $661 per Unit $56,400 $600 per Unit 120,549 2012 Tax Rate & Est Future Assessment Estimated $1,282 per Unit $1,924 per Unit Utilities Estimated Utilities $15,151 $161 per Unit $15,151 $161 per Unit $38,026 $405 per Unit $38,026 $405 per Unit $0 $ per Unit $0 $ per Unit 180,871 Total Utilities 53,177 $566 per Unit 53,177 $566 per Unit Other Expenses Other Expenses Estimated Other Expenses General & Admin & Marketing Repairs & Maintenance Labor Costs Contract Services-Including Trash Removal $60,722 $105,363 $107,614 $9,637 $646 per Unit $1,121 per Unit $1,145 per Unit $103 per Unit $47,000 $56,400 $110,000 $9,637 $500 per Unit $600 per Unit $1,170 per Unit $103 per Unit Management Fees $38,080 3.97% $405 per Unit $38,283 3.75% $407 per Unit Total Other Expense 321,415 $3,419 per Unit 261,320 $2,780 per Unit Total Operating Expense 495,141 $5,267 per Unit 495,368 $5,270 per Unit Reserve for Replacement 28,200 $300 per Unit 28,200 $300 per Unit Total Expense 523,341 $5,567 per Unit 523,568 $5,570 per Unit Net Operating Income (Actual Underwriting) 435,686 497,311 Asking Price Cap Rate Proposed Debt Equity Estimated Debt Service Cash Flow Cash on Cash 6,250,000 6.97% 4,375,000 1,875,000 236,262 199,424 10.64% 6,250,000 7.96% 4,375,000 1,875,000 236,262 261,049 13.92% "All In" Cost NOTES: ACTUALS: Actual Income is based on May thru August 2013 and Expenses are based on owner's Sep 2012 thru Aug 2013 operating statement. PRO FORMA: Insurance is estimated. Taxes are 2012 rate and estimated future assessment. All other expenses are estimated. DISCLAIMER: The information contained herein has been obtained from sources that we deem reliable. We have no reason to doubt the accuracy of the information, but we have not verified it and make no guaranty, warranty or representation about it. It is your resonsibility to independently confirm its accuracy and completeness. We have not determined whether the property complies with deed restrictions or any city licensing or ordinances including life safety compliance or if the property lies within a flood plain. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME OR EXPENSE AND PERFORM OR HAVE PERFORMED ANY INSPECTIONS TO VERIFY POSSIBLE CONTAMINATION BY ASBESTOS, LEAD PAINT, MOLD OR ANY OTHER HAZARDOUS SUBSTANCES. The owner reserves the right to withdraw this listing or change the price at anytime without notice during the marketing period. 11/5/2013 NantucketSquare.xlsx
PROPERTY OVERVIEW Keymap: 331Q Construction Quality: B PROPERTY INFORMATION AMENITIES EXISTING MORTGAGE TAXING AUTHORITY - HARRIS COUNTY Age: 1983 Ceiling Fans W/D Connections Mortgage Balance ACCT NO: Indiv Elec Meter: Indiv Cable Ready Walk-In Closets Amortization Spring ISD $1.570000 A/C Type: HVAC Mini Blinds School Bus Pick-up P & I Harris County $0.400210 Water: Rubs Bookshelves Type Harris County Flood Control $0.028090 Wiring: Copper Mini Blinds Assumable Port of Houston Authority $0.019520 Roof: Pitched Individual H/W Heaters Monthly Escrow Harris County Hospital District $0.182160 Paving: Concrete Origination Date Harris County Education Dept $0.006617 Materials: Brick/Wood Due Date Lonestar College System $0.119800 # of Stories: 2 Interest Rate HC Emerg Srv Dist 28 & 11 $0.130000 Parking: Garages Yield Maintenance Ponderosa Forest UD $0.100000 Buildings: 8 Transfer Fee 2012 Tax Rate/$100 $2.556397 Units/Acre: 27.01 *In Select Units 2013 Prelim Tax Assessment $3,158,440 COLLECTIONS UNIT MIX No. Total 6 Mo Avg $ 79,919 $90,000 Type Units Sq Ft SqFt Rent Total Rent Rent/SF Nov 2012 $ 79,686 2 Bed/1.5 Bath 18 1427 25,686 $890 $16,020 $0.62 Dec 2012 $ 80,490 $85,000 2 Bed/2.5 Bath 25 1427 35,675 $915 $22,875 $0.64 Jan 2013 $ 78,473 2 Bed/2.5 Bath 1 1427 1,427 $915 $915 $0.64 Feb 2013 $ 76,209 $80,000 2 Bed/2.5 Bath 25 1424 35,600 $885 $22,125 $0.62 Mar 2013 $ 80,327 2 Bed/2.5 Bath 1 1424 1,424 $885 $885 $0.62 $75,000 Apr 2013 $ 80,547 2 Bed/2.5 Bath 24 1436 34,464 $910 $21,840 $0.63 May 2013 $ 85,380 Jun 2013 $ 78,954 Jul 2013 $ 78,153 $65,000 Aug 2013 $ 72,524 Source: 9/13 RR Est 'Sep 2013 $ 78,191 Total / Avg 94 1,428 134,276 $901 $84,660 $0.63 Oct 2013 $ 86,311 $70,000 Nov 2012 Dec 2012 Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 Jul 2013 Aug 2013 Est 'Sep Oct 2013 PLEASE DO NOT VISIT THE SITE WITHOUT AN APPOINTMENT MADE THROUGH THE BROKER. Units/Type PROPERTY HIGHLIGHTS 19% 2 Bed/1.5 Bath The Nantucket Square Apartments, is a two story, townhome community located in the 1960 submarket in Houston,Texas. The asset was built in 1983. Residents enjoy ample amenities which include: mini-blinds, kitchen pantries, ceiling fans, W/D connections, garden area with BBQ grill and social seating, two car garages, bay windows in select units, skylights in each unit and walk-in closets. Current leasing concessions include $199 total move-in on all floorplans. 81% 2 Bed/2.5 Bath This property is more likely to finance with a bank loan or with a life insurance company than with FNMA. There is potential to sell off as individual units to retail buyers or to investment teams seeking individual ownership of units. Disclaimer: The information contained in this Memorandum reflects material from sources deemed to be reliable, including data such as operating statements, rent roll, etc. provided by the Owner. Notwithstanding, KET Enterprises Incorporated does not make any warranties about the information contained in this marketing package. Every prospective purchaser should verify the information and rely on his accountants or attorneys for legal and tax advice. This offer is As-Is, Where-Is. Answers to specific inquiries will have to be supplied by the Owner and are available upon request. Rates of return vary daily. No representations are made concerning environmental issues, if any.
PROPERTY LOCATION DIRECTIONS TO PROPERTY: From downtown Houston, travel N on I-45, then N past N Sam Houston Tollway. Exit at Rankin Rd and turn left / west. Turn left / north from Rankin Rd on Kuykendahl. Travel N on Kuykendahl past 1960. Turn right / east from Kuykendahl to Place Rebecca.
RENT COMPARABLES RENT COMPARABLES (Nov 2013 O'Connor & Associates) Sorted by Avg Rent/Unit Property Name Yr Blt Occ #Units Avg SF Avg Rent P/SF 1 Northbrooke 17111 Hafer Rd 2003 95% 240 1003 $853 0.850 2 Chartwell Court 15100 Ella Blvd 1995 94% 243 1043 $907 0.870 3 Elysian at Cypress Forest 16112 North Frwy 2009 95% 372 1108 $897 0.810 4 Oak Falls 4545 Louetta 5 Lakeview I 16755 Ella Blvd 1983 1993 96% 144 1125 $968 0.860 97% 112 1073 $987 0.920 Totals/Averages Comps 1997 95% 242 1,023 $880 0.860 Nantucket Square 2218 Place Rebecca Ln 1983 88% 94 1,428 $901 $0.63 Sub-Market Averages(Champions West) 94% 15,151 904 $892 0.995 Houston Market Avgs 92% 591,145 867 $824 0.953 4 NANTUCKET SQUARE APARTMENTS 5 1 3 2
SALES COMPARABLES SALES COMPARABLES (Sorted by Price/Sq. Ft.) Property Name Date Sold Price Sq. Ft. Price/Unit Price/SF Built Units 1 Pathway 2301 Elmside 1/11 $6,624,000 137,346 $46,000 $48.23 1971 144 2 Green Tree Place 16215 Clay Hill Dr 3 Providence at Champions 5100 FM 1960 4 Champions Village 12811 Greenwood Forest 1/11 $8,860,000 158,564 $41,792 $55.88 1984 212 SALES COMPS AVAILABLE UPON REQUEST 6/13 $14,976,000 264,464 $52,000 $56.63 1976 288 5/13 $13,800,000 243,092 $49,640 $56.77 1979 278 5 Champions Green 14141 Champions Dr 1/13 $9,888,000 146,907 $51,500 $67.31 1983 192 Totals/Averages Comps $10,829,600 190,075 $48,187 $56.96 1979 223 Nantucket Square 2218 Place Rebecca Ln Note: The above comps have larger than normal units. $6,250,000 134,276 $66,489 $46.55 1983 94 5 3 4 NANTUCKET SQUARE APARTMENTS 2 1
Houston Houston Economy. The City of Houston, the largest city in Texas and the fourth largest city in the United States, is located on the coastal prairies of southeast Texas and is home to a diverse array of industries and cultures. Houston is located in Harris County, the nation s third most populous county. The Houston region, officially designated as the Houston Sugar Land Baytown Metropolitan Statistical Area (MSA), comprises Harris County and nine other counties: Austin, Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, San Jacinto and Waller. The Houston MSA has a population of 5.9 million, according to new 2010 census figures, up from 5.5 million reported in the 2000 census. The ten county metropolitan area is the fifth-largest metropolitan area in the nation; combined with its zone of extraterritorial jurisdiction, an area extending five miles beyond the city s boundary, the city controls 1,906 square miles. The most urbanized portions of the Houston area are in Harris County, the southern part of Montgomery County, and the eastern section of Fort Bend County. Houston is home to the sixth largest port in the world and is in close proximity to Mexico, a key trading partner. It has a temperate climate and an affordable cost of living. The cost of living is about 12% lower than the United States average and overall housing costs are 25% lower than the national average. 2013 Market Outlook 2013 NAI Rank: 13, Up 5 Places. Houston s exceptional job growth forecast more than offset its relatively high vacancy rate. Employment Forecast: Payrolls are expected to rise 3.5 percent in 2013 with the addition of 95,600 positions. Last year, employment grew 3.7 percent. Construction Forecast: Developers will complete 8,500 units in 2013, more than twice the 2012 total. Vacancy Forecast: Vacancy in Houston will slip 30 basis points to 6.9 percent. During 2012, metrowide vacancy declined 130 basis points. Rent Forecast: In 2013, asking rents will advance 4.5 percent to $852 per month, while effective rents climb 4.8 percent to $785 per month. Investment Forecast: Class B/C demand is on the rise, but development is imited almost entirely to Class A product. As a result, smaller 1970s and early-1980s properties, which tend to trade at cap rates upwards of 9 percent, should garner stronger investor attention this year.1.. Economic Drivers Effectively, Houston s employment cycle has entered a recovery stage and the city is expected to remain a top performer relative to other MSA s nationwide in the longterm. According to Moodysanalytics.com, not only will Houston rank second in the nation in job growth between 2009 and 2014 (310,600 jobs), but Texas will boast five of the top twenty cities nationally in job creation. As the domestic and international center for virtually every segment of the petroleum and natural gas industries, Houston is known as the Energy Capital of the World. In the Medical/Life/Sciences/Biotechnology arena, Houston's health care industry continues to boom. The Houston Airport System is the fourth-largest airport system in the United States and sixthlargest in the world. The Port of Houston continues to be a dominant force throughout the nation and the world. The port has been ranked first in the United States in foreign tonnage for 10 consecutive years, first in imports for 15 consecutive years and second in total tonnage for 15 consecutive years. The Port of Houston is the sixth largest port in the world and ranks tenth in the world for total tonnage. 1Source: Marcus & Millichap Apartment Research Market Report December 2012
DEMOGRAPHICS 1 Mile Radius 3 Mile Radius 5 Mile Radius Population 2015 Total Population Projection 35,327 236,436 568,588 2010 Total Population 34,142 227,858 556,927 2000 Total Population 33,761 222,376 534,893 1990 Total Population 25,975 172,374 436,813 Spring 2010 Demographics Total Population 34,142 227,858 556,927 Total Households 13,200 92,331 224,117 Ethnicity Female Population 16,490 112,080 278,241 % Female 48.3% 49.2% 50.0% Male Population 17,652 115,778 278,686 % Male 51.7% 50.8% 50.0% Population Density (per Sq. Mi.) 10,867.6 8,058.7 7,090.9 17% 8% White Black Age: Median Age 31.0 31.5 33.3 53% 10% Asian Other Housing Units 12% Hispanic Total Housing Units 14,912 105,839 256,611 Owner Occupied Housing Units 17.9% 22.7% 32.7% Renter Occupied Housing Units 70.7% 64.6% 54.7% Vacant Housing Units 11.5% 12.8% 12.7% Race and Ethnicity American Indian, Eskimo, Aleut 0.3% 0.3% 0.3% Asian 21.5% 12.2% 11.5% Black 16.5% 20.3% 20.4% Hawaiian/Pacific Islander 0.1% 0.2% 0.1% White 36.7% 45.1% 50.2% Other 19.5% 17.1% 13.4% Multi-Race 5.5% 4.8% 4.1% Hispanic Ethnicity 52.8% 47.2% 39.3% Not of Hispanic Ethnicity 47.2% 52.8% 60.7% 47% Hispanic 53% Non-Hispanic Educational Attainment: Total Population Age 25+ 20,957 142,022 354,504 Grade K - 8 19.9% 15.5% 12.0% Grade 9-12 11.2% 10.2% 8.4% High School Graduate 22.9% 21.8% 19.6% Associates Degree 4.6% 5.4% 5.6% Bachelor's Degree 15.9% 19.4% 23.3% Graduate Degree 9.2% 10.3% 13.1% Some College, No Degree 16.3% 17.5% 18.0% Average Income Subject/Houston Household Income: Average Household Income $50,395 $59,866 $76,811 Median Household Income $31,205 $36,155 $44,205 Per Capita Income $19,950 $24,691 $31,437 Average Household Income - Houston $72,073 Business and Employment: Number of Employees 14,412 148,169 325,499 Number of Establishments 1,530 13,058 28,984 Subject Houston
A 268 UNIT CLASS "B-/C+" GARDEN APARTMENT COMMUNITY