OFFERING MEMORANDUM Presented by: Bobby Loeffler President The Loeffler Self-Storage Group Tyler Skelly Associate Director The Loeffler Self-Storage Group P.O. Box 4950 P.O. Box 4950 El Dorado Hills, CA 95762 El Dorado Hills, CA 95762 License: CA 01264390, NV 1000942 License: CA 01765509 Tel.: 916.467.7330 Tel.: 916.801.7734 Fax: 888.289.0703 Fax: 888.289.0703 Cell: 916.337.4856 Cell: 916.801.7734 Email: Bobby@LS-SG.com Email: Tyler@LS-SG.com Web: www.ls-sg.com Web: www.ls-sg.com
TABLE OF CONTENTS Section One Executive Summary Page 2 Section Two Investment Highlights Page 3-4 Section Three Aerial Photography Page 5 Section Four Property Photographs Page 6-8 Section Five Physical Description Page 9 Section Six Location Maps Page 10 Section Seven Site Description & Parcel Map Page 11 Section Eight Demographics Page 12 Section Nine Rent Comparables Page 13 Section Ten Sale Comparables Page 14-15 Section Eleven Financial Analysis Page 16-19 - 1 -
EXECUTIVE SUMMARY Property Name: North Tahoe Self Storage Property Address: 590 National Avenue, Tahoe Vista, CA 96148 Property Type: Project Size: Self-storage facility 17,785 net rentable square feet of storage 205 storage units Year Built: 2000 / 2006 Average Rent/SF: $1.40 Current Occupancy: (As of 06/19/14) 98% by square footage 99% by units 91% by dollars collected (economic occupancy) Average Market Occupancy: 99% Purchase Price: $3,100,000 Current NOI / Capitalization Rate: $191,851 / 6.19% Pro Forma NOI / Capitalization Rate: $303,754 / 9.00% Proposed Financing: 70% LTV, 30 year amortization, 5.25% fixed rate, due in seven years Price/NRSF: $174.30 Traffic Counts: CA Highway 28 @ Kings Beach, Junction 267 North: 25,000 vehicles per day (California DOT, 2012) Investment Highlights: All-metal construction Storage spaces stay virtually full year round demand outpaces supply Average household income exceeds $101K Expansion will allow for additional units Local government ensures that competition will be restricted Nearest facility is over 8 miles away Average competing storage occupancy is 99% - 2 -
INVESTMENT HIGHLIGHTS North Tahoe Self Storage is a well-located, functionally-sound self-storage facility located in Tahoe Vista, California approximately 115 miles northeast of Sacramento. For the potential investor, North Tahoe Self Storage serves as an ideal project with the following features: Opportunity: Financing: Signage: Occupancies in the greater North Lake Tahoe submarket currently trend very close to 100% physical occupancy. Operationally, the property is a great opportunity for an investor who will maintain the current occupancy while having the unique opportunity to expand the facility to suit their individual needs, or to add additional units to service the immediate market. Furthermore, the opportunity exists for an operator to create ancillary services at the site. Presently, there are no boxes, locks, or moving supply sales at the property. A new owner could expand their services to sell retail items in the existing office area. The local planning agency severely restricts the industrial floor area in the region and therefore keeps any proposed competition at bay. Also, with 82 5x10 units, the opportunity exists to raise rates from the current $75 to $80, increasing monthly income $410. Rental rates on the 10x10s may also be increased around $5/ unit. Prevailing market rates indicate that the property should qualify for the following loan: 70% LTV, 30 year amortization, 5.25% fixed rate, due in seven years. North Tahoe Self Storage offers excellent signage and visibility to National Avenue. Competition: The closest competitor is located in Incline Village, approximately a 15 minute drive east on Tahoe Boulevard. The other competitors are located in Truckee - more than a 20 minute drive away. Three of the four competitors are currently at 100% occupancy and the fourth is 96% occupied. Location: North Tahoe Self Storage is a rare opportunity to acquire a 17,785 NRSF self-storage facility located in Tahoe Vista, California on the northern shore of Lake Tahoe. Tahoe City is approximately 10 miles to the southwest and Reno is approximately 40 miles to the northeast. Currently, economic occupancy is 91 percent. The facility consistently operates at a high occupancy due to the very limited competition in the immediate area. It is the only self-storage facility that serves the North Lake Tahoe market on the California side. Given the development restrictions imposed by Lake Tahoe governing agencies, this is a uniquely special and rare opportunity to own a storage facility in the North Lake Tahoe area. North Tahoe Self Storage was built in 2000 of - 3 -
INVESTMENT HIGHLIGHTS (cont d.) all-metal construction. All buildings are in great condition with no signs of deferred maintenance. The asphalted driveways are in good condition and have adequate turning radii. The property has one central access point. The access gate allows entry from 7 a.m. to 7 p.m., seven days a week. Office hours at the facility have been scaled back due to high occupancy and are currently Monday, Wednesday, and Friday from 9 am to 1 pm. - 4 -
AERIAL PHOTOGRAPHY - 5 -
PROPERTY PHOTOGRAPS - 6 -
PROPERTY PHOTOGRAPS - 7 -
PROPERTY PHOTOGRAPS - 8 -
PHYSICAL DESCRIPTION Property Location: 590 National Avenue, Tahoe Vista, CA 96148 Assessor s Parcel Number: Gross Site Area: Zoning: Project Type: 112-110-032, 1.94 acres 112-110-004, 0.22 acres 2.16 acres (Placer County) 2.16+ acres, 94,090 square feet of land Use Code: Mini-Warehouse, Storage; Industrial Vacant Land Commercial Year Built: 2000 / 2006 Project Description: Two (2) one-story self-storage buildings with drive up access, two (2) two-story storage buildings, and an office totaling approximately 20,000 gross square feet of building area. Building Description: Total Gross Building Area 20,000 Rentable Square Feet: 17,785 Total Units: Construction Type: Roof Material: Interior Partitions/Doors: Paving/Parking: Security: Climate Control: Management Software: Website: 205 storage units averaging 87 NRSF; 25 open parking spaces (seasonal); 230 total units Metal with sprinklered interiors Metal with insulation Metal Asphalt Video surveillance, fenced grounds, coded electronic entry None Centershift (Yardi Systems) None - 9 -
LOCATION MAPS - 10 -
SITE DESCRIPTION & PARCEL MAP Property Location: 590 National Avenue, Tahoe Vista, CA 96148 Distance to Freeway: Gross Site Area: Shape: Topography: Located 0.3 miles north of shore of Lake Tahoe (CA- 28) and 1.3 miles west of CA-89 / CA-267 2.16+ acres, 94,090 square feet of land Rectangular Gently sloping from north to south Street Frontage: Approximately 225 feet along Tiger Avenue and 250 feet along National Avenue Parcel Map - 11 -
DEMOGRAPHICS Demographics for 590 National Avenue, Tahoe Vista, CA 96148 Population 1-mi. 3-mi. 5-mi. 1990 Population 1,162 4,844 9,235 2000 Population 1,691 6,710 12,448 2008 Population 1,767 7,147 13,066 2013 Population 1,864 7,615 13,754 Housing 1-mi. 3-mi. 5-mi. 1990 Households 495 1,987 3,789 2000 Households 689 2,543 4,913 2008 Households 731 2,743 5,258 2013 Households 774 2,926 5,560 2008 Average Household Size 2.4 2.6 2.5 1990 Median Housing Value $139,882 $143,269 $188,277 2000 Median Housing Value $265,280 $269,706 $354,666 2000 Owner Occupied Housing Units 31.9% 28.1% 31.4% 2000 Renter Occupied Housing Units 17.5% 25.1% 19.9% 2000 Vacant 50.6% 46.8% 48.7% 2008 Owner Occupied Housing Units 29.3% 26.0% 29.3% 2008 Renter Occupied Housing Units 19.0% 26.5% 21.1% 2008 Vacant 51.7% 47.4% 49.6% 2013 Owner Occupied Housing Units 28.7% 25.5% 28.8% 2013 Renter Occupied Housing Units 19.4% 27.1% 21.4% 2013 Vacant 52.0% 47.5% 49.8% Income 1-mi. 3-mi. 5-mi. $ 0 - $ 14,999 6.1% 9.1% 7.5% $ 15,000 - $24,999 8.0% 11.1% 8.4% $ 25,000 - $34,999 5.9% 11.1% 9.4% $ 35,000 - $49,999 14.6% 16.2% 13.2% $ 50,000 - $74,999 21.0% 17.4% 17.9% $ 75,000 - $99,999 16.4% 13.0% 13.5% $100,000 - $124,999 13.8% 9.7% 10.4% $125,000 - $149,999 2.9% 3.4% 4.3% $150,000 - $200,000 6.8% 4.6% 5.7% $200,000 to $249,999 2.5% 1.4% 2.3% $250,000 + 2.0% 3.0% 7.4% Median Household Income $65,243 $52,042 $65,463 Per Capita Income $32,158 $27,958 $40,862 Average Household Income $78,101 $74,312 $101,719-12 -
RENT COMPARABLES Property Name # Units Yr. Blt. Occ. Unit Type SF/U Rent/U Rent/SF North Tahoe Self Stg. 205 2006 98% 5x5 25 $50 $2.00 590 National Avenue 5x10 50 $75 $1.50 Tahoe Vista, CA 96148 5x15 75 $110 $1.47 10x10 100 $140 $1.40 10x15 150 $185 $1.23 11x23 253 $340 $1.48 Open RV -- $75- -- $120 Alpine Self-Storage 350 1979 100% 5x10 50 $81 $1.62 1060 Tahoe Boulevard 1% 10x10 100 $139 $1.39 Incline Village 10x17 170 $176 $1.04 10x20 200 $223 $1.12 8.6 Miles from Subject 10x25 250 $258 $1.03 Airport Self Storage 745 1992 96% 5x10 50 $80 $1.60 11999 California 267 7% 10x10 100 $130 $1.30 Truckee, CA 96161 10x15 150 $175 $1.17 10x20 200 $200 $1.00 11.4 Miles from Subject 10x25 250 $245 $0.98 10x30 300 $275 $0.92 Town & Country Stg. 530 2000 100% 5x10 50 $75 $1.50 40155 Truckee Airport 11% 10x10 100 $125 $1.25 Truckee, CA 96161 10x15 150 $165 $1.10 10x20 200 $195 $0.98 11.5 Miles from Subject 10x30 300 $275 $0.92 Truckee Self Storage 82 1995 100% 10x20 200 $180 $0.90 10642 Pioneer Trail 10x30 300 $230 $0.77 Truckee, CA 96161 13.9 Miles from Subject - 13 -
SALE COMPARABLES 590 National Avenue Tahoe Vista, CA 96148 SUBJECT Total Units: 205 Asking Price: $3,100,000 Rentable SF: 17,785 Price/SF: $174.30 Year Built/Reno: 2000 / 2006 CAP rate: 6.19%/9.00% HERUTAGE STORAGE OAKDALE 795 Greger Street Oakdale, CA 95361 COMP #1 Close of Escrow Pending Price: $3,700,000 Total Units: 401 Price/SF: $73.56 Rentable SF: 50,300 CAP rate: 6.62%/7.69% Year Built/Reno: 2006 HERITAGE STORAGE REEDLEY 1885 East Dinuba Avenue Reedley, CA 93654 COMP #2 Close of Escrow: Pending Price: $3,100,000 Total Units: 423 Price/SF: $55.43 Rentable SF: 55,930 CAP rate: 6.05%/8.71% Year Built/Reno: 2005-14 -
SALE COMPARABLES (cont d.) COUNTRY CLUB SELF STORAGE COMP #3 7340 Hopi Trail Yucca Valley, CA 92284 Close of Escrow: 05/30/14 Price: $1,875,000 Total Units: 428 Price/SF: $44.89 Rentable SF: 41,765 CAP rate: 6.24% Year Built/Reno: 06 / 10 EAST ELK GROVE MINI STORAGE COMP #4 9800 Dino Drive Elk Grove, CA 95765 Close of Escrow: 05/01/14 Price: $6,800,000 Total Units: 315 Price/SF: $51.55 Rentable SF: 131,900 CAP rate: 7.35% Year Built/Reno: 2000 SOUTH WATT SELF STORAGE COMP #5 9800 Dino Drive Elk Grove, CA 95765 Close of Escrow: 04/15/14 Price: $7,000,000 Total Units: 768 Price/SF: $63.45 Rentable SF: 110,315 CAP rate: 6.42% Year Built/Reno: 2007-15 -
FINANCIAL ANALYSIS Unit Mix No. of Units Storage Unit Type SF/Unit Current Rent/Unit Current/Pro Forma Monthly Income Current/Pro Forma Annual Income 18 5x5 25 $50 $900 $10,800 83 5x10 50 $75 $6,225 $74,700 2 5x10 G 50 $80 $160 $1,920 10 5x15 Up 75 $110 $1,100 $13,200 50 10x10 100 $140 $7,000 $84,000 4 10x10 O 100 $145 $580 $6,960 26 10x14 140 $185 $4,810 $57,720 1 10x23 230 $340 $340 $4,080 5 11x23 253 $340 $1,700 $20,400 5 12x25 300 $380 $1,900 $22,800 1 12x25 C 300 $250 $250 $3,000 TOTAL 205 17,785 24,965 299,580 COMMENTS There are an additional 25 open, seasonal parking stalls which are available for roughly 9 months out of the year. Please see Total Other Income category on page 17 for additional details. - 16 -
FINANCIAL ANALYSIS Expenses CURRENT % EGI INDUSTRY AVERAGE PRO FORMA % EGI Marketing & Promotion*** $1,140 0.39% 3.18% $2,000 0.49% Insurance $2,227 0.77% 2.27% $3,800 0.92% Repairs & Maintenance $5,132 1.76% 1.88% $6,000 1.46% Real Estate Taxes* $37,200 12.78% 6.82% $37,200 9.03% Utilities $5,163 1.77% 2.23% $5,700 1.38% General & Administration $4,739 1.63% 3.00% $5,000 1.21% On-Site Payroll** $27,500 9.45% 8.64% $27,500 6.68% Management Fee**** 11,644 4.00% 4.92% $16,475 4.00% Miscellaneous $4,500 1.55% 2.54% $4,500 1.08% TOTAL EXPENSES $99,245 34.09% 35.48% $108,177 26.26% COMMENTS * New Real Estate Taxes will be assessed upon sale price (1.2% est.). ** Due to extraordinarily high occupancy, North Tahoe Self Storage currently is only open three days a week for office hours (Monday, Wednesday and Friday) from 9am to 1pm, keeping on-site payroll low. *** Because there is only one other self-storage facility within a ten-mile radius, North Tahoe Self Storage does minimal advertising. **** A management fee has been inserted for standard underwriting procedures. - 17 -
FINANCIAL ANALYSIS Income & Expenses INCOME CURRENT PER SF PRO FORMA W/ EXPANSION PER SF GROSS POTENTIAL RENT $299,580 $16.84 $427,260 $24.02 Late and Administrative Fees (3.4% est.) 11,079 0.62 11,079 0.62 25 seasonal open parking spaces 6,500 0.37 3,500 0.20 TOTAL OTHER INCOME $17,579 $0.99 $14,579 $0.82 GROSS POTENTIAL INCOME $317,159 $17.83 $441,839 $24.84 Vacancy/Collection Allowance (% GPR) (8.7%) 26,063 1.47 (7.0%) 29,908 1.68 EFFECTIVE GROSS INCOME $291,096 $16.37 $411,931 $23.16 Total Expenses $99,245 $5.58 $108,177 $6.08 % of EGI 34.1% 26.3% NET OPERATING INCOME (NOI) $191,851 $10.79 $303,754 $17.08 COMMENTS Expansion Assumptions Add 7,600 NRSF @ 1.40/SF $127,680 Less 10% Vacancy & OpEx ($12,768) Less loss of parking income (3,000) Additional NOI $111,912 New NOI $303,766 Basis $3,100,000 Plus cost to build (@$36/SF) $273,600 New Basis $3,373,600 CAP 9.00% - 18 -
FINANCIAL ANALYSIS Financial Overview LOCATION ANNUALIZED OPERATING DATA 590 National Avenue INCOME CURRENT PRO FORMA Tahoe Vista, CA 96148 Price $3,100,000 Gross Potential Rent $299,580 $427,260 Down Payment 30% $930,000 Other Income 17,579 14,579 Number of Units 205 Gross Potential Income 317,159 441,839 Gross Square Feet 20,000 Less: Vacancy/Deductions 8.7% 26,063 7.0% 29,908 Rentable Square Feet 17,785 Effective Gross Income 291,096 411,931 Price per Rentable SF $174.30 Less: Expenses 34.1% (99,245) 26.3% (108,177) Net Operating Income $191,851 $303,754 CAP Rate Current 6.19% Debt Service (143,167) (143,167) CAP Rate Pro Forma 9.00% Net Cash Flow After Debt 5.34% 48,684 17.3% 160,587 Principal Reduction 39,917 39,917 Total Return 9.53% 88,601 21.6% 200,504 EXPENSES Marketing & Promotion $1,140 $2,000 Insurance $2,227 $3,800 FINANCING Repairs & Maintenance $5,132 $6,000 FIRST TRUST DEED Real Estate Taxes $37,200 $37,200 Loan Amount 70% $2,170,000 Utilities $5,163 $5,700 Loan Type Proposed New General & Administration $4,739 $5,000 Interest Rate 5.25% On-Site Payroll $27,500 $27,500 Amortization 30 Years Management Fee $11,644 $16,477 Program 70%, LTV, 30/7 Miscellaneous $4,500 $4,500 Loan to Value 70% Total Expenses $99,245 $108,177 Loan information is time sensitive and subject to change. 34.1% 26.3% - 19 -
P.O. BOX 4950 EL DORADO HILLS, CA 95762 WWW.LS-SG.COM BOBBY LOEFFLER TYLER SKELLY PRESIDENT ASSOCIATE DIRECTOR TEL: 916.467.7730 TEL: 916.801.7734 FAX: 888.289.0703 FAX: 888.289.0703 CELL: 916.337.4856 CELL: 916.801.7734 BOBBY@LS-SG.COM TYLER@LS-SG.COM LICENSE: CA 01264390, NV LICENSE: CA 01765509 1000942-20 -