OFFERING MEMORANDUM GEORGETOWN APARTMENTS 3211 Tallywood Drive, Fayetteville, NC
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 Non-Endorsements 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. Disclaimer THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express 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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2016 Marcus & Millichap. All rights reserved. GEORGETOWN APARTMENTS Fayetteville, NC ACT ID X0520163
TABLE OF CONTENTS SECTION INVESTMENT OVERVIEW 01 Property Overview Regional Map Local Map Aerial Photo FINANCIAL ANALYSIS 02 Rent Roll Summary Operating Statement Notes Pricing Detail MARKET COMPARABLES 03 Sales Comparables Rent Comparables MARKET OVERVIEW 04 Demographic Analysis
INVESTMENT OVERVIEW 4
EXECUTIVE SUMMARY NUMBER OF UNITS UNIT TYPE VITAL DATA Price $1,768,000 DAY 1 BUYER NOI YEAR 1 Down Payment 30% / $530,400 CAP Rate 7.46% 10.36% Loan Amount $1,237,600 GRM 4.97 4.72 Loan Type Proposed New Net Operating Income $131,869 $183,206 Interest Rate / Amortization 5.00% / 25 Years Net Cash Flow After Debt Service 8.49% / $45,051 18.17% / $96,387 Price/Unit $34,000 Total Return 13.30% / $70,569 23.23% / $123,211 Price/SF $34.13 Number of Units 52 Rentable Square Feet 51,800 Year Built 1966 Lot Size 3.8 acre(s) UNIT MIX 28 2 Bedroom 957 24 3 Bedroom 1,042 APPROX. SQUARE FEET OFFERING SUMMARY MAJOR EMPLOYERS EMPLOYER # OF EMPLOYEES Cape Fear Valley Health System 2,711 Cape Fear Valley Medical Ctr 2,711 County of Cumberland 1,323 Cracker Barrel 1,291 US Post Office 1,156 United Services Auto Assn 1,082 Fayetteville State University 1,007 Facet Purolator 800 Walmart 775 Fayetteville V A Medical Ctr 750 Easter Seals Ucp NC & VA 727 Cumberlnd Cnty Dept Social Svc 640 DEMOGRAPHICS 52 Total 51,800 1-Miles 3-Miles 5-Miles 2015 Estimate Pop 6,932 58,905 154,273 2010 Census Pop 7,119 60,366 153,740 2015 Estimate HH 2,998 25,503 63,834 2010 Census HH 3,076 26,098 63,451 Median HH Income $50,685 $41,083 $40,575 Per Capita Income $38,006 $26,673 $23,118 Average HH Income $87,276 $61,291 $55,390 # 5
INVESTMENT OVERVIEW OFFERING SUMMARY The Georgetown Apartment complex is a unique investment in unit type and character. The 52-unit complex built in 1966 has 28 2 BR and 24 3 BR units, which have a current occupancy of 90%. New management was installed and contributed to the increases in revenue and occupancy. Electricity is individually metered per unit and is paid by the tenants, while water and sewer costs are paid by the owner. The current expenses for the property are at 54% of EGI, but by decreasing vacancies this percent is expected to decrease to about 48. This property s parcel is contiguous to the Tallywood Shopping Center strip mall, which will be anchored by a Publix that is currently under construction. The location of the complex will contribute to Georgetown being a desirable place to live with its accessibility to basic needs. A cash on cash return in excess of 11% is expected for a buyer of this property. Fayetteville, NC is best-known as being the home of Fort Bragg, the major United States Army base just northwest of the city. The population of over 210,000 people in the Fayetteville MSA is the fifth largest in the state of North Carolina, and it should be noted that this figure includes the population of Fort Bragg. The Department of Defense (Fort Bragg) is the by far the largest employer in the city, followed by the school and health systems. Also located in the city are eight of the top ten defense contractors, such as Lockheed Martin, Boeing, Northrup Grumman, General Dynamics, and L-3 Communications. # 6
REGIONAL MAP 7
LOCAL MAP 8
AERIAL PHOTO 9
PUBLIX AT THE SHOPS AT TALLYWOOD GEORGETOWN APARTMENTS (SUBJECT) Publix Location (Under Construction) 10
FINANCIAL ANALYSIS 11
RENT ROLL SUMMARY FINANCIAL ANALYSIS 12
OPERATING STATEMENT FINANCIAL ANALYSIS 13
PRICING DETAIL FINANCIAL ANALYSIS 14
MARKET COMPARABLES 15
8 SALES COMPARABLES MAP GEORGETOWN APARTMENTS (SUBJECT) 1 2 3 Angel's Court Woodstream Kensington Court SALES COMPARABLES 16
PROPERTY GEORGETOWN NAME APARTMENTS SALES COMPARABLES SALES COMPS AVG COMPARABLES Average Cap Rate 11 10 9 Avg. 8.67% 8 7 6 4 3 2 1 0 Georgetown Angel's Court Woodstream Kensington Court 17
PROPERTY GEORGETOWN NAME APARTMENTS SALES COMPARABLES SALES COMPS AVG COMPARABLES Average Price Per Square Foot $36 $32 $29 $25 $22 $18 $14 $11 $7 $4 Avg. $32 $0 Georgetown Angel's Court Woodstream Kensington Court Average Price Per Unit $40,000 $36,000 Avg. $31,550 $32,000 $28,000 $24,000 $20,000 $16,000 $12,000 $8,000 $4,000 $0 Georgetown Angel's Court Woodstream Kensington Court 18
PROPERTY GEORGETOWN NAME APARTMENTS MARKETING COMPARABLES TEAM SALES COMPARABLES GEORGETOWN 673 VISTA ISLE APARTMENTS DRIVE 3211 673 TALLYWOOD VISTA ISLE DRIVE, DR, FAYETTEVILLE, SUNRISE, FL, NC, 33325 28303 ANGEL'S COURT 817 RIDGE RD, FAYETTEVILLE, NC, 28311 1 WOODSTREAM 425 WOODSTREAM TRAIL, FAYETTEVILLE, NC, 28314 2 rentpropertyname1 rentpropertyname1 rentpropertyname1 Units Unit Type Offering Price: $1,768,000 28 2 Bdr Price/Unit: $34,000 24 3 Bdr Price/SF: $34.13 CAP Rate: 7.46% GRM: 4.97 Total No. of Units: 52 Year Built: 1966 Units Unit Type Close Of Escrow: 3/1/2016 32 2 Bdr 2 Bath Sales Price: $1,150,000 Price/Unit: $35,938 Price/SF: $31.00 CAP Rate: 10.0% Total No. of Units: 32 Year Built: 1974 Units Unit Type Close Of Escrow: 4/1/2016 64 1 Bdr 1 Bath Sales Price: $5,800,000 138 2 Bdr 2 Bath Price/Unit: $28,713 Price/SF: $33.00 CAP Rate: 8.00% Total No. of Units: 202 Year Built: 1974 rentpropertyaddress1 Underwriting Criteria Income $310,538 Expenses $178,669 NOI $131,869 Vacancy ($60,682) rentpropertyaddress1 Underwriting Criteria NOI $115,000 rentpropertyaddress1 Underwriting Criteria NOI $464,000 Expenses $1,020,000 19
PROPERTY GEORGETOWN NAME APARTMENTS MARKETING COMPARABLES TEAM SALES COMPARABLES KENSINGTON COURT APARTMENTS 6467 YADKIN RD, FAYETTEVILLE, NC, 28303 3 rentpropertyname1 rentpropertyname1 rentpropertyname1 Units Unit Type Close Of Escrow: 7/14/2016 30 2 Bdr 2 Bath Sales Price: $900,000 Price/Unit: $30,000 Price/SF: $32.00 CAP Rate: 8.00% Total No. of Units: 30 Year Built: 1968 rentpropertyaddress1 Underwriting Criteria NOI $70,800 rentpropertyaddress1 rentpropertyaddress1 20
8 RENT COMPARABLES MAP GEORGETOWN APARTMENTS (SUBJECT) 1 2 3 4 5 Glendale Townhomes Buckhead Tallywood Arms Tower West Ashton Fayetteville 7 8 9 10 11 12 13 14 15 16 17 18 20 21
PROPERTY GEORGETOWN NAME APARTMENTS AVERAGE OCCUPANCY COMPARABLES 100 Avg. 93.98% 90 80 70 60 50 40 30 20 10 0 Georgetown Glendale Townhomes Buckhead Tallywood Arms Tower West Ashton Fayetteville 22
PROPERTY GEORGETOWN NAME APARTMENTS AVERAGE RENT - MULTIFAMILY COMPARABLES 2 Bedroom $800 $720 Avg. $705 $640 $560 $480 $400 $320 $240 $160 $80 $0 Georgetown Glendale Townhomes Buckhead Tallywood Arms Tower West Ashton Fayetteville 3 Bedroom $900 Avg. $899 $810 $720 $630 $540 $450 $360 $270 $180 $90 $0 Georgetown Glendale Townhomes Buckhead Tallywood Arms Tower West Ashton Fayetteville 23
PROPERTY GEORGETOWN NAME APARTMENTS RENT MARKETING COMPARABLES TEAM GEORGETOWN APARTMENTS 3211 TALLYWOOD DR, FAYETTEVILLE, NC, 28303 GLENDALE TOWNHOMES 1100 MARLBOROUGH RD, FAYETTEVILLE, NC, 28304 1 BUCKHEAD APARTMENTS 4428 KINKEAD CT, FAYETTEVILLE, NC, 28314 2 GEORGETOWN APARTMENTS GEORGETOWN APARTMENTS GEORGETOWN APARTMENTS Unit Type Units SF Rent Rent/SF 2 Bdr 28 957 $513.10 $0.54 3 Bdr 24 1,042 $596.19 $0.57 Total/Avg. 52 996 Unit Type Units SF Rent Rent/SF 2 Bdr 2 Bath 115 1,025-1,025 $672-$726 $0.69 Total/Avg. 115 1,025 $699 $0.68 Unit Type Units SF Rent Rent/SF 1 Bdr 1 Bath 40 761-761 $600-$600 $0.79 2 Bdr 2 Bath 28 1,081-1,081 $750-$750 $0.70 Total/Avg. 68 893 $662 $0.75 YEAR BUILT: 1966 OCCUPANCY: 100% YEAR BUILT: 1971 OCCUPANCY: 90% YEAR BUILT: 2002 3211 TALLYWOOD DR, FAYETTEVILLE, NC, 28303 3211 TALLYWOOD DR, FAYETTEVILLE, NC, 28303 3211 TALLYWOOD DR, FAYETTEVILLE, NC, 28303 24
PROPERTY GEORGETOWN NAME APARTMENTS RENT MARKETING COMPARABLES TEAM TALLYWOOD ARMS APARTMENTS 1001 ANCESTRY DR, FAYETTEVILLE, NC, 28304 3 TOWER WEST APARTMENTS 610 EXECUTIVE PL, FAYETTEVILLE, NC, 28305 4 ASHTON FAYETTEVILLE 2927 GORDON WAY, FAYETTEVILLE, NC, 28303 5 TALLYWOOD ARMS APARTMENTS TALLYWOOD ARMS APARTMENTS TALLYWOOD ARMS APARTMENTS Unit Type Units SF Rent Rent/SF 2 Bdr 2 Bath 25 1,000-1,000 $618-$618 $0.62 2 Bdr 2.5 Bath 50 1,100-1,200 $654-$654 $0.57 Total/Avg. 75 1,100 $642 $0.59 Unit Type Units SF Rent Rent/SF 1 Bdr 1 Bath 110 427-427 $570-$570 $1.34 Total/Avg. 110 427 $570 $1.33 Unit Type Units SF Rent Rent/SF 1 Bdr 1 Bath 23 577-577 $679-$679 $1.18 2 Bdr 1 Bath 32 814-814 $722-$722 $0.89 2 Bdr 1.5 Bath 21 874-874 $737-$737 $0.85 3 Bdr 1.5 Bath 24 1,068-1,068 $899-$899 $0.85 Total/Avg. 100 833 $758 $0.93 OCCUPANCY: 90% YEAR BUILT: 1993 OCCUPANCY: 100% YEAR BUILT: 1980 OCCUPANCY: 90% YEAR BUILT: 1984 1001 ANCESTRY DR, FAYETTEVILLE, NC, 28304 1001 ANCESTRY DR, FAYETTEVILLE, NC, 28304 1001 ANCESTRY DR, FAYETTEVILLE, NC, 28304 25
MARKET OVERVIEW 26
PROPERTY GEORGETOWN NAME APARTMENTS Created on March 2017 POPULATION 1 Miles 3 Miles 5 Miles 2020 Projection Total Population 6,978 59,148 157,847 2015 Estimate Total Population 6,932 58,905 154,273 2010 Census Total Population 7,119 60,366 153,740 2000 Census Total Population 6,865 60,793 147,337 Daytime Population 2015 Estimate 14,311 87,994 180,056 HOUSEHOLDS 1 Miles 3 Miles 5 Miles 2020 Projection Total Households 3,070 25,981 66,090 2015 Estimate Total Households 2,998 25,503 63,834 Average (Mean) Household Size 2.25 2.27 2.37 2010 Census Total Households 3,076 26,098 63,451 2000 Census Total Households 2,839 25,148 57,756 Growth 2015-2020 2.40% 1.87% 3.53% HOUSING UNITS 1 Miles 3 Miles 5 Miles Occupied Units 2020 Projection 3,070 25,981 66,090 2015 Estimate 3,341 29,021 73,016 Owner Occupied 1,758 12,915 31,516 Renter Occupied 1,240 12,588 32,318 Vacant 344 3,518 9,182 Persons In Units 2015 Estimate Total Occupied Units 2,998 25,503 63,834 1 Person Units 35.42% 34.31% 31.17% 2 Person Units 32.96% 33.25% 32.80% 3 Person Units 14.38% 15.49% 17.27% 4 Person Units 10.34% 9.64% 10.86% 5 Person Units 4.34% 4.51% 4.86% 6+ Person Units 2.50% 2.80% 3.04% MARKETING DEMOGRAPHICS TEAM HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles 2015 Estimate $200,000 or More 7.94% 3.18% 1.90% $150,000 - $199,000 5.15% 2.79% 2.13% $100,000 - $149,000 11.12% 7.69% 7.64% $75,000 - $99,999 8.52% 8.71% 9.42% $50,000 - $74,999 17.94% 18.52% 19.17% $35,000 - $49,999 13.14% 15.91% 15.93% $25,000 - $34,999 13.49% 13.76% 13.54% $15,000 - $24,999 8.75% 13.57% 13.43% Under $15,000 13.96% 15.88% 16.84% Average Household Income $87,276 $61,291 $55,390 Median Household Income $50,685 $41,083 $40,575 Per Capita Income $38,006 $26,673 $23,118 POPULATION PROFILE 1 Miles 3 Miles 5 Miles Population By Age 2015 Estimate Total Population 6,932 58,905 154,273 Under 20 24.04% 25.25% 27.48% 20 to 34 Years 17.92% 24.84% 26.97% 35 to 39 Years 5.02% 5.38% 5.71% 40 to 49 Years 11.94% 11.33% 11.33% 50 to 64 Years 19.87% 18.14% 16.45% Age 65+ 21.22% 15.06% 12.02% Median Age 42.64 34.94 31.89 Population 25+ by Education Level 2015 Estimate Population Age 25+ 4,871 38,843 97,194 Elementary (0-8) 2.42% 3.45% 3.25% Some High School (9-11) 4.18% 7.15% 7.90% High School Graduate (12) 19.11% 25.87% 26.45% Some College (13-15) 21.68% 24.65% 26.35% Associate Degree Only 8.87% 8.68% 10.34% Bachelors Degree Only 23.75% 17.70% 15.89% Graduate Degree 19.29% 11.61% 8.78% Population by Gender 2015 Estimate Total Population 6,932 58,905 154,273 Male Population 46.00% 47.33% 47.70% Female Population 54.00% 52.67% 52.30% Source: 2016 Experian 27
PROPERTY GEORGETOWN NAME APARTMENTS MARKETING DEMOGRAPHICS TEAM Population In 2016, the population in your selected geography is 6,932. The population has changed by 0.98% since 2000. It is estimated that the population in your area will be 6,978.00 five years from now, which represents a change of 0.66% from the current year. The current population is 46.00% male and 54.00% female. The median age of the population in your area is 42.64, compare this to the US average which is 37.55. The population density in your area is 2,205.66 people per square mile. Race and Ethnicity The current year racial makeup of your selected area is as follows: 66.72% White, 19.07% Black, 0.18% Native American and 7.47% Asian/Pacific Islander. Compare these to US averages which are: 70.98% White, 12.77% Black, 0.19% Native American and 5.25% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 6.99% of the current year population in your selected area. Compare this to the US average of 17.53%. Households There are currently 2,998 households in your selected geography. The number of households has changed by 5.60% since 2000. It is estimated that the number of households in your area will be 3,070 five years from now, which represents a change of 2.40% from the current year. The average household size in your area is 2.25 persons. Housing The median housing value in your area was $235,212 in 2016, compare this to the US average of $185,104. In 2000, there were 1,725 owner occupied housing units in your area and there were 1,114 renter occupied housing units in your area. The median rent at the time was $504. Income In 2016, the median household income for your selected geography is $50,685, compare this to the US average which is currently $54,148. The median household income for your area has changed by 14.48% since 2000. It is estimated that the median household income in your area will be $57,784 five years from now, which represents a change of 14.01% from the current year. Employment In 2016, there are 10,203 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 76.91% of employees are employed in white-collar occupations in this geography, and 23.52% are employed in blue-collar occupations. In 2016, unemployment in this area is 7.31%. In 2000, the average time traveled to work was 17.00 minutes. The current year per capita income in your area is $38,006, compare this to the US average, which is $29,638. The current year average household income in your area is $87,276, compare this to the US average which is $77,468. Source: 2016 Experian 28