Offering Memorandum MILLBURY STREET APARTMENTS & SPORTS BAR 8 Apartments & 1 Commercial 148-152 Millbury Street Worcester, MA 01610 1
N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E Confidentiality and Disclaimer The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2018 Marcus & Millichap. All rights reserved. Non-Endorsement Notice Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. MILLBURY STREET APARTMENTS & SPORTS BAR Worcester, MA ACT ID Z0560041 2
TABLE OF CONTENTS SECTION INVESTMENT OVERVIEW 01 Offering Summary Regional Map Local Map Aerial Photo FINANCIAL ANALYSIS 02 Rent Roll Summary Rent Roll Detail Operating Statement Notes Pricing Detail Acquisition Financing MARKET COMPARABLES 03 Sales Comparables MARKET OVERVIEW 04 Market Analysis Demographic Analysis 3
INVESTMENT OVERVIEW 4
EXECUTIVE SUMMARY NUMBER OF UNITS UNIT TYPE VITAL DATA Price $720,000 CURRENT YEAR 1 Down Payment 25% / $180,000 CAP Rate 7.95% 10.13% Loan Amount $540,000 GRM 8.33 6.93 Loan Type Proposed New Net Operating Income $57,240 $72,965 Interest Rate / Amortization 4.50% / 25 Years Net Cash Flow After Debt Service 11.79% / $21,222 20.53% / $36,947 Price/Unit $80,000 Total Return 18.44% / $33,185 27.48% / $49,459 Price/SF $62.58 Number of Units 9 Rentable Square Feet 8,147 Number of Buildings 1 Number of Stories 3 Year Built 1920 Lot Size 0.18 acre(s) UNIT MIX 2 Studio / One Bath 550 6 One Bedroom / One Bath 625 1 Commercial / Bar 2,359 APPROX. SQUARE FEET OFFERING SUMMARY MAJOR EMPLOYERS EMPLOYER # OF EMPLOYEES Umass Mem Cmnty Hospitals Inc 9,625 University Massachusetts Inc 8,572 Umass Memorial Health Care Inc 5,400 Canterbury Towers 3,900 Saint-Gobain Corporation 3,748 Umass Memorial Health Care 3,381 Adult Endocrinology Dept 3,020 Walk To Cure Cancer 3,020 Bonded Abrasives 2,500 City of Worcester 1,961 Vna Care Netwrk Foundation Inc 1,300 US Post Office 1,224 DEMOGRAPHICS 9 Total 8,147 1-Miles 3-Miles 5-Miles 2017 Estimate Pop 34,471 149,651 230,932 2017 Census Pop 33,105 145,047 224,639 2017 Estimate HH 12,752 56,164 88,290 2017 Census HH 12,304 54,724 86,118 Median HH Income $32,095 $44,275 $53,055 Per Capita Income $18,237 $24,557 $28,665 Average HH Income $47,634 $62,934 $73,070 # 5
INVESTMENT OVERVIEW OFFERING SUMMARY Marcus & Millichap is excited to present the Millbury Street Apartments and Sports Bar. The large mixed-use building is comprised of eight apartments, including six onebedrooms and two studios, and a popular restaurant/sports bar on the first floor that is on a triple-net lease which includes snow plowing, building maintenance, and splitting the trash costs with the apartments. The building is approximately 12,000 square feet and includes a nearly 5,000 square foot parking lot off the back of the building for tenants. Laundry is located in the basement and provides great additional income. The building is located near Kelly Square in the heart of the Canal District. Local area amenities, including new restaurants and shopping, are within walking distance. College of Holy Cross, Clark University, Becker College and Downtown Worcester are less than two-miles away. In addition, the building has great access to Interstate 290, Massachusetts Turnpike I-90 and MBTA Union Station providing express commuter rail train to Boston, along with local and regional bus transit. Buyers have the ability to acquire a minimal management, cash-flowing building, with a strong rental history with a commercial tenant on a new 7-year NNN lease. Known as the heart of Massachusetts, Worcester is known for its nine colleges and thriving healthcare industry. Over the past years Worcester has seen tremendous development growth, including 1,000 new apartments and 55 new restaurants in 2016 alone. The City of Worcester has committed to a $100M effort to revitalize downtown to support and capitalize on the demand and attract more population downtown to reshape the area for decades to come. INVESTMENT HIGHLIGHTS Great Mixed-Use Property with Eight Apartments & One Commercial Located in the Heart of Canal District near Kelly Square in Worcester, MA Close to Major Routes I-290 and Massachusetts Turnpike I-90 Easy to Manage, Cash-Flowing Building with Significant Upside for Buyers Off Street Parking and On-Site Laundry for Tenants Within Walking Distance to Area Amenities, Union Station and Colleges/Universities 6
PROPERTY SUMMARY THE OFFERING Property Millbury Street Apartments & Sports Bar Price $720,000 Property Address 148-152 Millbury Street, Worcester, MA Zoning BG-3 SITE DESCRIPTION Number of Units 9 Number of Buildings 1 Number of Stories 3 Year Built/Renovated 1920 Rentable Square Feet 8147 Lot Size 0.18 acre(s) Type of Ownership Fee Simple Parking 8 Parking Ratio 1:1 UTILITIES Water Worcester Water Company Phone Comcast Electric Eversource Gas National Grid CONSTRUCTION Foundation Concrete / Field Stone Framing Wood Exterior Vinyl Parking Surface Asphalt Roof Asphalt MECHANICAL HVAC Forced Hot Water OFFERING SUMMARY PROPOSED FINANCING First Trust Deed Loan Amount $540,000 Loan Type Proposed New Interest Rate 4.50% Amortization 25 Years Loan Term 10 Years Loan to Value 75% Debt Coverage Ratio 1.59 7
REGIONAL MAP 8
LOCAL MAP 9
PROPERTY PHOTO Marcus & Millichap closes more transactions than any other brokerage firm. 12 10
FINANCIAL ANALYSIS 11
RENT ROLL SUMMARY FINANCIAL ANALYSIS 12
OPERATING STATEMENT FINANCIAL ANALYSIS 13
PRICING DETAIL FINANCIAL ANALYSIS 14
ACQUISITION FINANCING MARCUS & MILLICHAP CAPITAL CORPORATION CAPABILITIES MMCC our fully integrated, dedicated financing arm is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and terms. We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of financing options. Our dedicated, knowledgeable experts understand the challenges of financing and work tirelessly to resolve all potential issues to the benefit of our clients. Closed 1,651 debt and equity financings in 2016 National platform operating within the firm s brokerage offices $5.1 billion total national volume in 2016 Access to more capital sources than any other firm in the industry WHY MMCC? Optimum financing solutions to enhance value Our ability to enhance buyer pool by expanding finance options Our ability to enhance seller control Through buyer qualification support Our ability to manage buyers finance expectations Ability to monitor and manage buyer/lender progress, insuring timely, predictable closings By relying on a world class set of debt/equity sources and presenting a tightly underwritten credit file 15
MARKET COMPARABLES 16
SALES COMPARABLES MAP MILLBURY STREET APARTMENTS & SPORTS BAR (SUBJECT) 1 165 Shrewsbury St 2 108 Catebury St 3 61-63 Hamilton Street 4 908 Main Street 5 127-131 Highland St SALES COMPARABLES 17
PROPERTY MILLBURY STREET NAME APARTMENTS & SPORTS BAR SALES COMPARABLES SALES COMPS AVG SALES COMPARABLES Average Price Per Unit $300,000 $270,000 $240,000 $210,000 $180,000 $150,000 $120,000 $90,000 $60,000 $30,000 Avg. $150,583 $0 148-152 Millbury Street 165 Shrewsbury St 108 Catebury St 61-63 Hamilton Street 908 Main Street 127-131 Highland St Average Price Per Square Foot $200.00 $180.00 $160.00 $140.00 $120.00 $100.00 Avg. $89.20 $80.00 $60.00 $40.00 $20.00 $0.00 148-152 Millbury Street 165 Shrewsbury St 108 Catebury St 61-63 Hamilton Street 908 Main Street 127-131 Highland St 18
PROPERTY MILLBURY STREET NAME APARTMENTS & SPORTS BAR SALES MARKETING COMPARABLES TEAM SALES COMPARABLES 148-152 MILLBURY STREET 148-152 Millbury Street, Worcester, MA, 01610 165 SHREWSBURY ST 165 Shrewsbury St, Worcester, MA, 01604 1 108 CATEBURY ST 108 Canterbury St, Worcester, MA, 01603 2 rentpropertyname1 rentpropertyname1 rentpropertyname1 Units Unit Type Offering Price: $720,000 2 Studio One Bath Price/Unit: $80,000 6 One Bdr One Bath Price/SF: $99.88 1 Commercial Bar CAP Rate: 7.95% GRM: 8.33 Total No. of Units: 9 Year Built: 1920 rentpropertyaddress1 Underwriting Criteria Income $83,480 Expenses $26,240 NOI $57,240 Vacancy ($4,320) Units Unit Type Close Of Escrow: 1/11/2018 6 Bdr Bath Select One... Sales Price: $950,000 2 Bdr Bath Price/Unit: $118,750 Price/SF: $65.92 Total No. of Units: 8 Year Built: 1920 NOTES 6 Apartments & 2 Retails Units rentpropertyaddress1 Close Of Escrow: 9/1/2016 Sales Price: $800,000 Price/Unit: $266,667 Price/SF: $153.20 Total No. of Units: 3 Year Built: 1920 NOTES Liquor Store Business sold as part of deal. Building comprised of 2 apartments and 1 retail unit. rentpropertyaddress1 19
PROPERTY MILLBURY STREET NAME APARTMENTS & SPORTS BAR SALES MARKETING COMPARABLES TEAM SALES COMPARABLES 61-63 HAMILTON STREET 61-63 Hamilton Street, Worcester, MA, 01604 3 908 MAIN STREET 908 Main St, Worcester, MA, 01610 4 127-131 HIGHLAND ST 127-131 Highland St, Worcester, MA, 01609 5 rentpropertyname1 rentpropertyname1 rentpropertyname1 Units Unit Type Close Of Escrow: 2/1/2016 3 1 Bdr 1 Bath Sales Price: $500,000 2 Bdr Bath Price/Unit: $100,000 Price/SF: $52.93 Total No. of Units: 5 Year Built: 1890 NOTES Mixed-Use Sale of 3 Apartments and 2 Commercial Tenants Units Unit Type Close Of Escrow: 11/25/2016 6 2 Bdr 1 Bath Sales Price: $580,000 Price/Unit: $96,667 Price/SF: $84.52 Total No. of Units: 6 Year Built: 1900 Tenants Type Close Of Escrow 9/1/2015 3 3 Bdr 1 Bath Sales Price $1,025,000 3 Retail Price/SF $89.44 Year Built 1900 Total Apartment Units Total Commercial Suites 3 3 rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1 20
MARKET OVERVIEW 21
WORCESTER OVERVIEW The Worcester metro is spread out over Worcester and Windham counties in Central Massachusetts and northeastern Connecticut. Known as a manufacturing center starting in the late 19th century, the region has diversified dramatically over the last 20 years. The city of Worcester is the second largest municipality in the state of Massachusetts with 183,000 citizens. Metro population forecasts show growth of nearly 27,000 people over the next five years. METRO HIGHLIGHTS TECHNOLOGY CORNERSTONE With the University of Massachusetts Medical School as an anchor, the region is a major biotech center for the nation. DIVERSE EMPLOYMENT MARKET OVERVIEW It has been known as a manufacturing center for generations, and the economy has diversified to include healthcare, biotech, insurance and financial services. HEALTHCARE SECTOR UMass Memorial HealthCare s 14,000 positions top the largest employers in the region, with the University of Massachusetts Medical School coming in second. ECONOMY The creation of the Massachusetts Biotechnology Research Park set the stage for Worcester s diversification and stands as a strong pillar of the local economy. With over 1 million square feet of space and tenants that include Abbott Labs and Advanced Cell Technologies, the park has spurred major investments and discoveries. With the headquarters of Hanover Insurance Group, plus a major operation for BNY Mellon Wealth Management, the Worcester's highly educated workforce is able to draw financial and professional service employment to the region. Lower costs of business and living than nearby Boston mean the region should continue to attract both investment and new employers taking advantage of the metro s diversified economy and educated workforce. DEMOGRAPHICS 2016 POPULATION: 930K Growth 2016-2021*: 2.9% 2016 HOUSEHOLDS: 352K Growth 2016-2021*: 3.3% 2016 MEDIAN AGE: 40 U.S. Median: 37.7 2016 MEDIAN HOUSEHOLD INCOME: $65,200 U.S. Median: $57,200 * Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody s Analytics; U.S. Census Bureau 22
PROPERTY MILLBURY STREET NAME APARTMENTS & SPORTS BAR Created on February 2018 POPULATION 1 Miles 3 Miles 5 Miles 2022 Projection Total Population 34,384 150,335 233,154 2017 Estimate Total Population 34,471 149,651 230,932 2010 Census Total Population 33,105 145,047 224,639 2000 Census Total Population 32,027 139,183 214,875 Daytime Population 2017 Estimate 40,431 179,537 261,627 HOUSEHOLDS 1 Miles 3 Miles 5 Miles 2022 Projection Total Households 12,974 57,259 90,405 2017 Estimate Total Households 12,752 56,164 88,290 Average (Mean) Household Size 2.54 2.45 2.45 2010 Census Total Households 12,304 54,724 86,118 2000 Census Total Households 12,283 54,033 83,865 Growth 2015-2020 1.74% 1.95% 2.40% HOUSING UNITS 1 Miles 3 Miles 5 Miles Occupied Units 2022 Projection 12,974 57,259 90,405 2017 Estimate 14,314 60,293 93,486 Owner Occupied 2,254 21,156 42,626 Renter Occupied 10,498 35,008 45,664 Vacant 1,563 4,129 5,196 Persons In Units 2017 Estimate Total Occupied Units 12,752 56,164 88,290 1 Person Units 34.19% 33.17% 31.68% 2 Person Units 24.71% 28.39% 29.78% 3 Person Units 16.41% 16.25% 16.24% 4 Person Units 12.25% 12.14% 12.87% 5 Person Units 6.89% 6.02% 5.87% 6+ Person Units 5.54% 4.04% 3.56% MARKETING DEMOGRAPHICS TEAM HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles 2017 Estimate $200,000 or More 1.07% 2.56% 3.71% $150,000 - $199,000 2.61% 3.80% 5.22% $100,000 - $149,000 7.13% 11.85% 13.92% $75,000 - $99,999 7.67% 11.45% 12.72% $50,000 - $74,999 14.95% 15.91% 16.67% $35,000 - $49,999 12.33% 12.27% 11.65% $25,000 - $34,999 13.87% 10.17% 9.30% $15,000 - $24,999 15.58% 12.54% 10.84% Under $15,000 24.79% 19.46% 15.98% Average Household Income $47,634 $62,934 $73,070 Median Household Income $32,095 $44,275 $53,055 Per Capita Income $18,237 $24,557 $28,665 POPULATION PROFILE 1 Miles 3 Miles 5 Miles Population By Age 2017 Estimate Total Population 34,471 149,651 230,932 Under 20 27.63% 25.63% 25.01% 20 to 34 Years 29.10% 27.63% 24.59% 35 to 39 Years 7.37% 6.42% 6.39% 40 to 49 Years 12.38% 11.73% 12.37% 50 to 64 Years 15.69% 16.83% 18.37% Age 65+ 7.82% 11.75% 13.29% Median Age 31.20 32.84 35.30 Population 25+ by Education Level 2017 Estimate Population Age 25+ 21,686 95,051 151,733 Elementary (0-8) 9.28% 5.65% 4.34% Some High School (9-11) 13.40% 9.80% 8.26% High School Graduate (12) 34.32% 31.04% 29.81% Some College (13-15) 16.48% 17.28% 16.82% Associate Degree Only 5.52% 6.76% 7.66% Bachelors Degree Only 13.04% 17.07% 19.08% Graduate Degree 5.32% 10.44% 12.35% Population by Gender 2017 Estimate Total Population 34,471 149,651 230,932 Male Population 50.25% 49.29% 48.60% Female Population 49.75% 50.71% 51.40% Source: 2017 Experian 23
PROPERTY MILLBURY STREET NAME APARTMENTS & SPORTS BAR MARKETING DEMOGRAPHICS TEAM Population In 2017, the population in your selected geography is 34,471. The population has changed by 7.63% since 2000. It is estimated that the population in your area will be 34,384.00 five years from now, which represents a change of -0.25% from the current year. The current population is 50.25% male and 49.75% female. The median age of the population in your area is 31.20, compare this to the US average which is 37.83. The population density in your area is 10,950.29 people per square mile. Race and Ethnicity The current year racial makeup of your selected area is as follows: 50.30% White, 17.61% Black, 0.12% Native American and 6.72% Asian/Pacific Islander. Compare these to US averages which are: 70.42% White, 12.85% Black, 0.19% Native American and 5.53% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 41.14% of the current year population in your selected area. Compare this to the US average of 17.88%. Households There are currently 12,752 households in your selected geography. The number of households has changed by 3.82% since 2000. It is estimated that the number of households in your area will be 12,974 five years from now, which represents a change of 1.74% from the current year. The average household size in your area is 2.54 persons. Housing The median housing value in your area was $206,532 in 2017, compare this to the US average of $193,953. In 2000, there were 2,467 owner occupied housing units in your area and there were 9,816 renter occupied housing units in your area. The median rent at the time was $487. Income In 2017, the median household income for your selected geography is $32,095, compare this to the US average which is currently $56,286. The median household income for your area has changed by 17.87% since 2000. It is estimated that the median household income in your area will be $35,049 five years from now, which represents a change of 9.20% from the current year. Employment In 2017, there are 20,686 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 47.38% of employees are employed in white-collar occupations in this geography, and 52.63% are employed in blue-collar occupations. In 2017, unemployment in this area is 7.43%. In 2000, the average time traveled to work was 25.00 minutes. The current year per capita income in your area is $18,237, compare this to the US average, which is $30,982. The current year average household income in your area is $47,634, compare this to the US average which is $81,217. Source: 2017 Experian 24
8 DEMOGRAPHICS 25
P R E S E N T E D B Y Matthew Pierce Associate National Multi Housing Group Boston Office Tel: (617) 896-7214 Fax: (617) 539-8331 matthew.pierce@marcusmillichap.com Licenses: MA 9506948, NH 071077 www.marcusmillichap.com 26