Offering Memorandum THE BUGGE APARTMENTS 6402 Phinney Ave N Seattle, WA 98103 Exclusively offered by Paragon Real Estate Advisors 1
Offering Summary Paragon Real Estate Advisors is pleased to exclusively offer for sale The Bugge Apartments, a brick veneer classic designed building located at the crest of Phinney Ridge hill in Seattle. Situated in a very walkable and amenity rich neighborhood, the Bugge offers residents a nice residential feel with quick access to the tech employment centers of Fremont, South Lake Union and Downtown Seattle. This is the first time the Bugge has been on the market in over 25+ years, and allows a buyer a rare opportunity to purchase a well-maintained building with immediate rental upside in a fantastic location. Showings will be scheduled on specific dates and offers will be due on November 10, 2017 at 4pm. Name The Bugge Apartments Address 6402 Phinney Ave N, Seattle WA 98103 Total Units 15 Built 1930 Square Feet 9,420 Total Net Rentable (Per Rent Roll) Price $4,000,000 Price Per Unit $266,667 Price Per Foot $425 Current GRM/CAP 19.4/3.0% (1% Vacancy) Market GRM/CAP 14.4/4.5% (4% Vacancy) Expense Per Unit $5,499/Year Terms Cash Out Lot Size 5,814 Square Feet Zoning LR3 RC THE BUGGE APARTMENTS 2
Investment Highlights First time on the market in 25+ years Excellent Phinney Ridge location Significant rental upside Additional space in the storage and laundry room Brick-veneer classic design (wood-frame) Views of Cascades Walkscore of 84 Partial copper plumbing upgrades Newer Duralast roof Garage parking stall Secured intercom entry 3
Neighborhood Map U OF WA GREENLAKE CAPITOL HILL FREMONT SEATTLE CBD QUEEN ANNE PHINNEY RIDGE THE BUGGE APARTMENTS BALLARD N 80TH STREET 15TH AVENUE NW 4
Neighborhood Amenities Food/Drink Shopping/Services Parks/Schools 6 14 1 Red Mill Burgers 2 The Barking Dog Alehouse 3 Bongos 4 Woodland Park Zoo 5 Green Lake Park 6 Fred Meyer 7 Ballard High School 8 Safeway 9 Gilman Playground 10 The Walrus and The Carpenter 11 Paseo Caribbean 12 Mighty O Donuts 13 Green Lake Public Library 14 Bishop Blanchet High School 15 The Bathhouse Theater 16 Starbucks 17 Beth s Cafe 18 Wallingford Playground 19 Tutta Bella Pizzeria 20 Dick s Drive-In 21 Quality Food Center 22 Hales Ales Brewery and Pub 23 Woodland Park 24 West Woodland Elementary 25 Duke s Seafood and Chowder 26 A La Mode Pies 10 7 8 9 2 THE BUGGE APARTMENTS 22 24 1 26 4 25 15 17 13 5 3 23 12 11 21 20 19 18 16 5
Location The Bugge Apartments are located at 6402 Phinney Avenue N in the Phinney Ridge neighborhood of Seattle. Residents have direct access to downtown Seattle and South Lake Union employment centers via Highway 99, and the University of Washington. Located just blocks from the Woodland Park Zoo, residents enjoy many recreational activities offered at Woodland Park and Green Lake Park including: soccer fields, tennis courts, summer concerts, boating, jogging, and relaxing in the sun. This location is also a short walk or quick drive to some of the best entertainment venues, eateries, and services in the popular Ballard, Fremont, Phinney Ridge and Wallingford neighborhoods. 6
Employment Greater Seattle excels at the industries of the future - the region is a center of innovation and features some of the world s top global brands. Our aerospace industry is one of the largest in the world, home to Boeing Commercial Airplanes and over 800 aerospace firms that employ 17% of all aerospace workers in the United States. Greater Seattle is also a leading center for information and communications technology, bolstered by industry pioneers such as Microsoft and Amazon. As a result, our region has emerged as a world leader in cloud computing and data visualization, and ranks 4th as a global startup hub ahead of New York and Boston. > > Adobe > > Alaska Airlines > > Amazon > > Apple > > AT&T Wireless > > Boeing > > Costco > > Expedia, Inc. > > Expeditors International > > F5 Networks > > Facebook > > Fred Hutchinson > > Gates Foundation > > Getty Images > > Google > > Microsoft > > Nintendo > > Nordstrom > > Paccar > > RealNetworks > > REI > > Russell Investments > > SpaceX > > Starbucks > > Symetra Financial > > Tableau Software > > T-Mobile > > Twitter > > Uber > > University of Washington > > Virginia Mason > > Weyerhaeuser > > Zillow > > Zulilly 7
Map of Key Employers THE BUGGE APARTMENTS ELLIOTT BAY 8
Building Photos 9
Building Photos 10
Unit Photos 11
Unit Photos 12
Floor Plans STORAGE LAUNDRY MANAGERS OFFICE BOILER ROOM GARAGE UNIT A 740 SF UNIT C 425 SF UNIT B 685 SF FIRST FLOOR 13
Floor Plans UNIT 1 750 SF UNIT 3 485 SF UNIT 5 635 SF UNIT 2 750 SF UNIT 4 525 SF UNIT 6 650 SF SECOND FLOOR 14
Floor Plans UNIT 7 750 SF UNIT 9 485 SF UNIT 11 635 SF UNIT 8 750 SF UNIT 10 525 SF UNIT 612 650 SF THIRD FLOOR 15
Rent Roll Unit Number Unit Type Approx Size Current Rent Current Rent/SF Market Rent Market Rent/SF A 1 BD/1 BTH 740 $925 $1.25 $1,445 $1.95 B 1 BD/1 BTH 685 $1,050 $1.53 $1,445 $2.11 C Studio 425 $820 $1.93 $1,145 $2.69 1 1 BD/1 BTH 750 $1,295 $1.73 $1,445 $1.93 2 1 BD/1 BTH 750 $1,080 $1.44 $1,445 $1.93 3 Studio 485 $835 $1.72 $1,145 $2.36 4 Studio 525 $940 $1.79 $1,145 $2.18 5 1 BD/1 BTH 625 $1,395 $2.23 $1,445 $2.31 6 1 BD/1 BTH 650 $985 $1.52 $1,445 $2.22 7 1 BD/1 BTH 750 $1,350 $1.80 $1,445 $1.93 8 1 BD/1 BTH 750 $1,395 $1.86 $1,445 $1.93 9 Studio 485 $925 $1.91 $1,145 $2.36 10 Studio 525 $950 $1.81 $1,145 $2.18 11 1 BD/1 BTH 625 $970 $1.55 $1,445 $2.31 12 1 BD/1 BTH 650 $1,045 $1.61 $1,445 $2.22 Totals 9,420 $15,960 $1.69 Average $20,175 $2.14 Average 16
Operating Summary Units 15 Year built 1930 Rentable Area 9,420 Sq.Ft. Down Payment $2,000,000 50% Loan Amount $2,000,000 50% Interest Rate 4.00% Amortization 30 Years Price $4,000,000 Price Per Unit $266,667 Per Square Foot $424.63 Current GRM 19.42 Current CAP 3.04% Market GRM 14.35 Market CAP 4.54% Type Size Current Rent Monthly Income Market Rent Monthly Income 5 Studio 425-525 $820 - $950 $4,470 $1,145 $5,725 10 1Bd/1Bth 625-750 $925 - $1,395 $11,490 $1,445 $14,450 15 Avg S.F. 628 $1.69 $2.14 Total Monthly Income Monthly Scheduled Rent Current $15,960 Market $20,175 Office Space $550 $550 Garage Income (1 Garage) $0 $100 Parking Income (1 Stall) $0 $75 Utility Surcharge $100 $85/unit $1,275 Storage Income $25/month $200 $25/month $375 Pet Rent $25/mo/pet $25 $50*7 Pets $350 Laundry Income $250 $250 Other Income $80 $80 Total Monthly Income $17,165 $23,230 Annualized Operating Data Current Market Scheduled Gross Income $205,980 $278,760 Less Vacancy 1.0% $2,060 4.0% $11,150 Gross Operating Income $203,920 $267,610 Less Expenses $82,480 $85,840 Net Operating Income $121,440 $181,770 Annual Debt Service ($9,578) $114,580 $114,580 Cash Flow Before Tax 0.34% $6,861 3.36% $67,190 Principal Reduction $35,221 $35,221 Total Return Before Tax 2.10% $42,081 5.12% $102,411 Annualized Operating Expenses Current Market Real Estate Taxes 2017 $33,872 $33,872 Insurance 2016 $5,657 $5,657 W/S/G and Electric 2016 $13,924 $13,924 Gas 2016 $5,875 $5,875 Repairs/Maint/Turnover 2016 $9,960 $12,750 Landscaping 2016 $2,062 $2,062 On-Site Management $40/unit $7,200 $7,200 Miscellaneous Misc $180 $750 Reserves Proforma $3,750 $3,750 Total Expenses $82,480 $85,840 Current Operations Expenses/Unit Expenses/Foot Percent of EGI $5,499 $8.76 40.45% Market Operations Expenses/Unit Expenses/Foot Percent of EGI $5,723 $9.11 32.08% 17
Sale Comparables SUB - THE BUGGE APARTMENTS 6402 Phinney Ave N, Seattle WA Year Built 1930 Units 15 Sales Price $4,000,000 Price/Unit $266,667 Price/Foot $425 GRM/CAP 19.4/3.0% Sales Date TBD 2. NESTUN APARTMENTS 4313 Fremont Ave N, Seattle WA Year Built 1967 Units 7 Sales Price $2,825,000 Price/Unit $403,571 Price/Foot $463 GRM/CAP 15.4/4.7% Sales Date 10.12.2017 4. 8 UNIT APARTMENT 324 NE 65th St, Seattle WA Year Built 1952 Units 8 Sales Price $2,020,000 Price/Unit $252,500 Price/Foot $438 GRM/CAP 22.9/2.3% Sales Date 9.29.2017 1. PHINNEY APARTMENTS 4800 Phinney Ave N, Seattle WA Year Built 1988 Units 8 Sales Price $2,975,000 Price/Unit $371,875 Price/Foot $461 GRM/CAP 19.9/3.5% Sales Date 10.25.2017 3. NORMANDY ARMS 420 13th Ave E, Seattle WA Year Built 1930 Units 16 Sales Price $4,600,000 Price/Unit $287,500 Price/Foot $516 GRM/CAP 16.3/3.8% Sales Date 9.29.2017 5. 7 UNIT APARTMENT 6408 Phinney Ave N, Seattle WA Year Built 2016 Units 7 Sales Price $2,250,000 Price/Unit $321,429 Price/Foot $600 GRM/CAP 16.0/4.4% Sales Date 8.4.2017 18
Sale Comparables 6. SUMMIT CHALET 427 Summit Ave E, Seattle WA Year Built 1960 Units 15 Sales Price $4,075,000 Price/Unit $271,667 Price/Foot $516 GRM/CAP 14.9/4.1% Sales Date 7.10.2017 7. GLEN EDEN 921 1st Ave W, Seattle WA Year Built 1929 Units 36 Sales Price $11,500,000 Price/Unit $319,444 Price/Foot $454 GRM/CAP 16.5/3.5% Sales Date 4.28.2017 19
Sales Comparables Map The Bugge Apts 6402 Phinney Ave N Seattle, WA 1. Phinney Apartments 4800 Phinney Ave N Seattle, WA 2. Nestun Apartment 4313 Fremont Ave N Seattle, WA 3. Normandy Arms 420 13th Ave E Seattle, WA THE BUGGE APARTMENTS 1 2 5 4 4. 8 Unit Apartment 324 NE 65th St Seattle, WA 5. 7 Unit Apartment 6408 Phinney Ave N Seattle, WA 6. Summit Chalet 427 Summit Ave E Seattle, WA 7. Glen Eden 921 1st Ave S Seattle, WA 7 6 3 20
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. 21