7 unit multifamily investment property · storage b4 mechanical crawl space g1 g2 g3 g4 g5 g6 str....

KW Legacy, Keller Williams Realty

7 UNIT MULTIFAMILY INVESTMENT PROPERTYLangford House Apartments, 701 E. 2nd Avenue, Salt Lake City, UT


INVESTMENT SUMMARYTrophy location in the heart of the Avenues offers investors top rents and low vacancy

Completely new units blend modern amenities with historic details that tenants desire

Seller financing available for investors needing to close before the end of 2018

Property is offered with 100% rent guarantee for 12 months until property is stabilized

Designed by CRSA, a top architecture firm specializing in historic preservation

Completely turn-key with all new plumbing and electrical service to the building

New appliances, cabinets, quartz countertops, tile backsplash, tile flooring

High end designer grade fixtures include LED lighting, low-flow faucets and toilets

Convenient to transit and very pedestrian friendly: Walk Score = 86; Bike Score = 84

PROJECT X 8

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OFFERINGPrice: $1,800,000

In Place Cap Rate: 5.63%

Proforma Cap Rate: 6.07%

ASSETNumber of Units: 7

Year Built / Effective Year Built: 1931 / 2018Total Square Feet: 6,323 SF

Lot Size / Zoning: .12 Acres / SR1

Parcel: 09-32-354-013-0000Electricity: Individually MeteredWater/Sewer: RUBSGas: RUBSLaundry: In Unit & IncludedRoof: New 30 yr Shingle

PROJECT X 8



PROJECT X 8



ADAM [email protected]

MOLLY WILSON801.453.6853 | [email protected]

MENU

6550 S Millrock Dr, Suite 200 Salt Lake City, UT 84111 801.947.8300

This statement with the information it contains is given with the understanding that negotiations relating to the purchase, renting or leasing of this property shall be conducted through this office. The information while not guaranteed has been secured from sources we believe to be reliable however, it is up to the buyer or tenant to verify the information and conduct appropriate due diligence. Coldwell Banker Commercial and its logo are registered service marks owned by Coldwell Banker Real Estate, LLC. Each Office is Independently Owned and Operated. All Rights Reserved. © 2016

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LOCATION AERIALS

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Copyright:© 2014 Esri

Produced By: brandon.daltonGIS/Mapping Services

UT_SaltLake_County9/19/2016 1:07:05 PM

Salt Lake CountyUtah

0 1 2 3 4 50.5Miles

CBC Advisors6550 South Millrock Dr, Suite 200Salt Lake City, Utah 84121

phone 801.947.8300fax 801.947.8301web www.cbcadvisors.com

SITE

701 East 2nd Ave

DISCLOSURE AND CONFIDENTIALITY

EXECUTIVE SUMMARY

FINANCIAL SUMMARY

PROPERTY PHOTOS

LOCATION AERIALS

MARKET INFORMATION

VIEW EAST LOCATION MAPVIEW WEST


5.2% Average Apt. Cap Rate YTD

-Costar

#1 State for Business-Wall Street

Journal

#6 Top Housing Market in the

Country-Realtor.com

#2 America's Next Boom

Towns-Forbes

5.7% 12 Month

Apartment Rent Growth

-CBRE

214% Faster

Population Growth Than Natl. Average

-US Census Bureau

14.8% Job Growth

2010-15 -Forbes

venturemultifamily.com V E N T U R E


New High Effeciency Ductless Mini Split Units (Heating and AC)

New Cabinets, Hardware and Pulls

New Electrical Service (Panels, Meters, Wiring, Conduit, Outlets, Switches)

New Tile Backsplash

New Plumbing (Drain Lines, Water Lines, Fixtures, Sinks)

New Quartz Countertops

New Stainless Steel Appliance Package

New Washer/Dryer Combo Units

New Tile Flooring in Kitchens and Bathrooms


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PROJECT X 8



PHOTOS


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Garage Self Storage Floor Plan Basement Self Storage Floor Plan

First Level Floor Plan

FLOOR PLANS


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Third Level Floor Plan


INCOME & EXPENSES Price $1,800,000

Down Payment 25% $450,000 Loan Amount 75% $1,350,000 Interest Rate / Year1 5.00%Amortization Period (Years)1 30 Annual Debt Service1 $86,965

Operating Income Current Income & Expenses2 Proforma Annual Gross Potential Rent $112,500 $121,440 Physical Vacancy 3.0% ($3,375) 3.0% ($3,643) Other Income - Common Area Maintenance $840 $840 Other Income - Storage Units3 $9,367 $9,367 Other Income - Utilities $5,160 $5,160 Other Income - High Speed Internet (150 mbps) $5,460 $5,460 Effective Gross Income (EGI) $129,952 $138,624

Operating Expenses Per Unit % of EGI Per Year Per Unit % of EGI Per Year Property Taxes4 $638 3.43% $4,463 $638 3.22% $4,463 Property Insurance5 $225 1.21% $1,575 $225 1.14% $1,575 Repairs & Maintenance6 $300 1.62% $2,100 $300 1.51% $2,100 Supplies $50 0.27% $350 $50 0.25% $350 Landscaping / Lawncare / Snow Removal7 $261 1.40% $1,825 $261 1.32% $1,825 High Speed Internet (150 mbps)8 $360 1.94% $2,520 $360 1.82% $2,520 Utilities: Electricity9 $75 0.40% $525 $75 0.38% $525 Utilities: Water & Sewer10 $241 1.30% $1,684 $241 1.21% $1,684 Utilities: Trash & Recycling11 $171 0.32% $1,200 $171 0.87% $1,200 Utilities: Gas12 $60 0.32% $420 $60 7.00% $420 Property Management Fee (7.5% EGI)13 $1,392 7.50% $9,746 $1,485 7.50% $10,397 Legal and Administrative $75 0.40% $525 $75 0.38% $525 Reserves for Replacements14 $250 1.35% $1,750 $250 1.26% $1,750 Total Operating Expenses ($28,683) ($29,334)Cap Rate, Net Operating Income 5.63% $101,268 6.07% $109,290 Less: Debt Service ($86,965) ($86,965) Debt Coverage Ratio 1.16 1.30

Cash on Cash Return, Net Cash Flow - Year 1 3.18% $14,303 4.96% $22,325 Principal Reduction - Year 1 $19,917 $19,917

Total Return With Principal Reduction - Year 1 7.60% $34,221 9.39% $42,242

Footnotes:1. Example loan: based on current

rate/terms for Freddie Mac non-recourse financing.

2. Current Income & Expenses: adjusted lower than Proforma to account for leasing up in the winter months. Income is guaranteed for 12 months after closing.

3. Storage Units: based on the average of similar sized units within a 3 mile radius minus 20%.

4. Property Taxes: based on 2018 actual taxes. Note, Utah is a non-disclosure state and taxes do not increase at the time of sale.

5. Property Insurance: based on post-construction quotes received in November 2018.

6. Repairs & Maintenance: estimated based on new systems and their associated warranties.

7. Landscaping / Lawncare / Snow Removal: based on the estimates provided by the property manager.

8. High Speed Internet: based on bulk rate agreeement with Comcast.

9. Electricity: this is for the common areas and lighting; individual unit electricity is individually metered and billed directly to the tenants.

10. Water & Sewer: based on historical operations of the property.

11. Trash & Recycling: based on current contract with ACE. Trash is collected twice per week and recycling is collected once per week.

12. Gas: based on historical operations for water heaters.

13. Property Management: based on curent contract.

14. Reserves for Replacements: based on industry average for capital expenditures however, given the amount invested in 2018 this expense is projected to be less.


CASH FLOW PROJECTIONS

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Net Operating Income (NOI)1 $0 $109,290 $113,115 $117,074 $121,172 $125,413 Annual Debt Service $0 ($86,965) ($86,965) ($86,965) ($86,965) ($86,965)Sales Price2 $2,508,253 Loan Payoff ($1,239,688)Closing Costs3 ($125,413)Net Sale Proceeds $1,143,152 Annual Cash Flow ($450,000) $22,325 $26,150 $30,109 $34,207 $1,181,600

INVESTMENT PERFORMANCE

5 Year Total Cash Flow $1,294,390

5 Year Return On Investment (ROI) $844,390

5 Year Multiple on Investment 2.88

Average Annual Cash Yield 6.72%

Internal Rate of Return (IRR) 25.07%

Footnotes:

1. Net Operating Income (NOI) is based on 2019 Proforma and projected to increase 3.5% annually.

2. Estimated exit Cap Rate: 5%3. Estimated closing costs and sale expenses: 5%4. The Internal Rate of Return (IRR) method is one of the most popular methods to

compare alternative investments. It is the annualized rate of return that would make the present value of future cash flows plus the final market value of an investment equal the current market price of the investment. The IRR is calculated by time-weighting annual cash flows, including the initial purchase as a negative, followed by the annual cash flows to the owners, and at the re-sale of the Property the return of the original acquisition cost and net owner appreciation.


CAPITAL EXPENDITURESAppliances HVAC Paint Roof Flooring Water Heaters Doors/Trim Irrigation Plumbing Electrical Cabinets

Unit A 2018 2018 2018 2018 2018 2009 2018 2018 2018 2018 2018

Unit B 2018 2018 2018 2018 2018 2009 2018 2018 2018 2018 2018

Unit C 2018 2018 2018 2018 2018 2009 2018 2018 2018 2018 2018 Unit D 2018 2018 2018 2018 2018 2009 2018 2018 2018 2018 2018 Unit E 2018 2018 2018 2018 2018 2009 2018 2018 2018 2018 2018 Unit F 2018 2018 2018 2018 2018 2009 2018 2018 2018 2018 2018 Unit G 2018 2018 2018 2018 2018 2009 2018 2018 2018 2018 2018

UNIT MIX / RENT ROLLApartment

Unit Floorplan Size (SF) Base Rent Common Area Maint. Income

High Speed Internet Income Utility Income Total Monthly Rent

Unit A 1 bed / 1 bath 614 $1,495 $10 $65 $60 $1,630

Unit B 1 bed / 1 bath 506 $1,295 $10 $65 $60 $1,430

Unit C 1 bed / 1 bath 510 $1,295 $10 $65 $60 $1,430 Unit D 1 bed / 1 bath 605 $1,495 $10 $65 $60 $1,630 Unit E 2 bed / 1 bath 836 $1,795 $10 $65 $70 $1,940 Unit F 1 bed / 1 bath 555 $1,395 $10 $65 $60 $1,530 Unit G 1 bed / 1 bath 525 $1,350 $10 $65 $60 $1,485

Total $10,120 $70 $455 $430 $11,075

Storage Unit Floorplan Location Monthly Rent Storage

Unit Floorplan Location Monthly Rent

G-1 7x8 Garage $75 G-6 7x8 Garage $75

G-2 7x8 Garage $75 B-1 5x11.5 Basement $77

G-3 7x8 Garage $75 B-2 5x11.5 Basement $77 G-4 7x8 Garage $75 B-3 8x12.5 Basement $91 G-5 7x8 Garage $75 B-4 7.5x10 Basement $90

Total $781

PROJECT X 8



PROJECT X 12


COMPARABLE SALES

Subject Property - 701 2nd Ave 1) 402 N Center Street 2) 221 E 2nd Avenue 3) 235 West 400 North

4) 54 East 200 North 5) 480 S. Douglas Street 6) 358 S. Douglas Street 7) 84 North R Street

8) 266 South 1100 East 9) 701 N De Soto Street 10) 658 N Columbus Street


Langford House Comps

Locations

402 Center St W

221 E 2nd Ave

84 N R Street

235 W 400 N

54 E 200 N

480 Douglas St

358 Douglas St

266 1100 E

701 De Soto St E

658 Columbus St E

Subject Property

Subject Property

Langford House Comps

Locations

402 Center St W

221 E 2nd Ave

84 N R Street

235 W 400 N

54 E 200 N

480 Douglas St

358 Douglas St

266 1100 E

701 De Soto St E

658 Columbus St E

Subject Property

Subject Property

1.5 Mile Radius

Property Sold Date Units Price Price/Unit Square Feet Price/SF Condition Gross Annual Income Cap Rate

1 10/18/17 7 $1,375,000 $196,429 3900 $352.56 A $94,225 4.8%

2 4/16/18 5 $1,200,000 $240,000 3403 $352.63 A $87,360 5.1%

3 10/31/17 3 $725,000 $241,667 3090 $234.63 C- $27,420 2.6%4 7/19/18 2 $600,000 $300,000 3640 $164.84 C+ NA NA5 5/5/18 2 $625,000 $312,500 3511 $178.01 B NA NA6 9/21/18 2 $630,000 $315,000 2929 $215.09 B $58,200 6.5%7 5/31/18 2 $639,000 $319,500 2844 $224.68 B- $48,600 5.3%8 7/5/18 2 $640,000 $320,000 3072 $208.33 B+ $31,200 3.4%9 7/18/18 2 $680,000 $340,000 2980 $228.19 C+ $44,640 4.6%10 5/22/18 2 $845,000 $422,500 3300 $256.06 B NA NA

Subject Property - 7 $1,800,000 $257,142 6323 $284.67 A $138,624 6.07%

COMPARABLE SALES

Price Per Unit


TRAVEL TIMES

Driving

10 minutes 25 minutes

10 minutes 25 minutes

10 minutes 25 minutes 40 minutes

Cycling Walking


SOUTHWEST VIEW

260,000 JOBS DOWNTOWN


SOUTHEAST VIEW

Enrollment: 31,860

Rice Eccles Stadium


Rent Comparables by Bedroom86-90 K St

Studio Comps

$1,016One Bed Comps

$1,308Two Bed Comps

$1,773Three Bed Comps

$2,705Subject

-Subject

-Subject

-Subject

-

1 Bedroom 2 Bedroom 3 BedroomCurrent Conditions in Rent Comps Studio

Total Number of Units 307 1,124 1,415 60

Vacancy Rate 6.5% 3.8% 3.7% 3.4%

Asking Rent Per Unit $1,016 $1,308 $1,773 $2,705

Asking Rent Per SF $2.20 $1.91 $1.71 $1.82

Effective Rents Per Unit $1,008 $1,288 $1,761 $2,693

Effective Rents Per SF $2.19 $1.88 $1.69 $1.81

Concessions 0.8% 1.5% 0.7% 0.4%Changes Past Year in Rent Comps Studio 1 Bedroom 2 Bedroom 3 Bedroom

Year-Over-Year Effective Rent Growth 12.5% 2.3% 9.6% 18.3%

Year-Over-Year Vacancy Rate Change

12 Month Net Absorption in Units

-3.1%

16

-4.1%

59 73

-3.7% -8.2%

5

EXISTING UNITS VACANT UNITS

ASKING RENT PER UNIT PER MONTH 12 MONTH NET ABSORPTION IN UNITS

12/11/2018Copyrighted report licensed to Venture Multifamily Advisors - 744787.

Page 51

Rent Comparables by Bedroom86-90 K St

Studio Comps

$1,016One Bed Comps

$1,308Two Bed Comps

$1,773Three Bed Comps

$2,705Subject

-Subject

-Subject

-Subject

-

1 Bedroom 2 Bedroom 3 BedroomCurrent Conditions in Rent Comps Studio

Total Number of Units 307 1,124 1,415 60

Vacancy Rate 6.5% 3.8% 3.7% 3.4%

Asking Rent Per Unit $1,016 $1,308 $1,773 $2,705

Asking Rent Per SF $2.20 $1.91 $1.71 $1.82

Effective Rents Per Unit $1,008 $1,288 $1,761 $2,693

Effective Rents Per SF $2.19 $1.88 $1.69 $1.81

Concessions 0.8% 1.5% 0.7% 0.4%Changes Past Year in Rent Comps Studio 1 Bedroom 2 Bedroom 3 Bedroom

Year-Over-Year Effective Rent Growth 12.5% 2.3% 9.6% 18.3%

Year-Over-Year Vacancy Rate Change

12 Month Net Absorption in Units

-3.1%

16

-4.1%

59 73

-3.7% -8.2%

5

EXISTING UNITS VACANT UNITS

ASKING RENT PER UNIT PER MONTH 12 MONTH NET ABSORPTION IN UNITS


Page 51

DOWNTOWN RENTAL MARKET


Demographic Overview86-90 K St

Population (1 mi)

27,415Avg. HH Size (1 mi)

1.8Avg. Age (1 mi)

36Med. HH Inc. (1 mi)

$48,584DEMOGRAPHIC RADIUS RINGS

DEMOGRAPHIC SUMMARY

5 Mile3 Mile1 MilePopulation

221,724107,14727,4152018 Population

232,713112,38028,8412023 Population

5.0%4.9%5.2%Pop Growth 2018-2023

3536362018 Average Age

Households

87,04347,37014,2162018 Households

91,15649,61614,9132023 Households

4.7%4.7%4.9%Household Growth 2018-2023

$55,208$52,386$48,584Median Household Income

2.42.11.8Average Household Size

211Average HH Vehicles

Housing

$283,756$324,369$384,632Median Home Value

195719511949Median Year Built


Page 115

Demographic Overview86-90 K St

Population (1 mi)

27,415Avg. HH Size (1 mi)

1.8Avg. Age (1 mi)

36Med. HH Inc. (1 mi)

$48,584DEMOGRAPHIC RADIUS RINGS

DEMOGRAPHIC SUMMARY

5 Mile3 Mile1 MilePopulation

221,724107,14727,4152018 Population

232,713112,38028,8412023 Population

5.0%4.9%5.2%Pop Growth 2018-2023

3536362018 Average Age

Households

87,04347,37014,2162018 Households

91,15649,61614,9132023 Households

4.7%4.7%4.9%Household Growth 2018-2023

$55,208$52,386$48,584Median Household Income

2.42.11.8Average Household Size

211Average HH Vehicles

Housing

$283,756$324,369$384,632Median Home Value

195719511949Median Year Built


Page 115

DEMOGRAPHICS


Age & Education86-90 K St

POPULATION BY AGE GROUP IN 1 MILE RADIUS

POPULATION BY EDUCATION IN 1 MILE RADIUSPOPULATION BY AGE IN 1 MILE RADIUS


Page 116

Age & Education86-90 K St

POPULATION BY AGE GROUP IN 1 MILE RADIUS

POPULATION BY EDUCATION IN 1 MILE RADIUSPOPULATION BY AGE IN 1 MILE RADIUS


Page 116


EconomySalt Lake City Multi-Family

The Salt Lake City metro has posted some of thestrongest job and population growth in the nation thiscycle, although that has slowed recently as the metroapproaches full employment. Even better news than theaggregate growth numbers is that the composition of SaltLake’s economy is much healthier today than before therecession. After losing roughly 11,000 construction jobsduring the recession, job growth in the sector hasrecently picked up considerably. In addition, a significantportion of the metro’s job growth has come from an arrayof high-paying, white-collar jobs in info-tech, finance,and professional services. Subsectors like softwaredesign, investment banking, and accounting have madegains in this metro and helped drive the unemploymentrate down to around 3%. And despite the tight labormarket, the Economic Development Corporation of Utahcontinues to recruit business and report on successstories.

Regardless of the business cycle, population growthalone should keep this economy humming. Demographicforecasts predict that Salt Lake’s population growth willcontinue to strongly outpace the national benchmark overthe next five years. Over the past year, the metro’spopulation grew 1.3%, versus just 0.7% nationally, drivenby a healthy combination of organic growth and net in-migration. But SLC’s growth is not powered by outsizedmigration (although this has been more of a factor thanin previous cycles), which can dry up during recessions.Instead, growth is spurred by a structurally high birthrate,which along with growing populations in adjacent metrosProvo-Orem and Ogden-Clearfield, is among thehighest in the country. Over the forecast, job sectors thatcater to the growing local population, such as educationand health services, should continue to outperform theU.S. trend. Over the past year, the education and healthservices sector grew at nearly double the national rate.

Employment in Utah continues to grow atone of thefastest rates in the country—and as of September 2018the Salt Lake City metro was growing at around 3%. Thisis even more impressive considering the lowunemployment rates in the metros, conditions thatostensibly could create headwinds to further dramaticemployment gains. But the state’s business friendlyenvironment and increasing status as one of the premierplaces to do business in the U.S., has encouragedcompanies with existing presences to expand, and newcompanies to enter the area.

While the financial sector is under pressure in metros likeNew York, Salt Lake is gaining those jobs at animpressive pace. In fact, no metro in the National Indexeven comes close to matching Salt Lake’s recent growthin the financial services sector, where employment hasincreased by over 20% since 2012—three times thenational average, and a few percentage points abovethan in the next closest metro. The metro’s largestfinancial company is Zions Bancorporation, whichemploys more than 3,500 personnel. Other majoremployers include Wells Fargo, Discover FinancialServices, and American Express. Insurance companiesin particular are expanding, and Esurance will becreating 700 jobs over the coming years as it expands inWeber County. Goldman Sachs also has a significantpresence in the metro and continues to expand. It nowemploys nearly 2,000 people at its downtown office,making that its second-largest Goldman office in NorthAmerica. The banking firm is expanding its technology,finance, and investment management operations in themetro and recently announced plans to increase its Utahpresence by an additional 350 jobs in the coming years,bringing an influx of well-compensated workers to theCrossroads of the West. Initially, Goldman had plannedto create only 600 jobs in Utah.


Page 152

ECONOMY



SALT LAKE CITY EMPLOYMENT BY INDUSTRY IN THOUSANDS

NAICS Industry Jobs LQ MarketUS USMarketUSMarket

Current Jobs Current Growth 10 Yr Historical 5 Yr Forecast

-1.41%-0.69%-0.24%0.71%2.06%3.77%0.960Manufacturing

0.16%0.53%0.75%1.67%1.19%4.57%1.1151Trade, Transportation and Utilities

0.20%0.55%0.59%1.37%0.43%3.49%1.077 Retail Trade

0.60%1.29%0.59%1.79%1.41%1.82%1.459Financial Activities

0.53%0.55%-0.07%1.73%0.31%1.44%1.0111Government

1.28%1.11%0.46%0.99%4.35%4.94%1.145Natural Resources, Mining and Construction

1.02%1.86%2.08%3.09%2.11%3.31%0.786Education and Health Services

1.24%1.44%1.95%2.58%2.56%2.48%1.2126Professional and Business Services

0.07%0.24%-0.59%1.67%-0.43%-2.87%1.521Information

1.04%1.49%2.12%2.86%1.67%5.42%0.866Leisure and Hospitality

0.22%0.84%0.70%1.16%1.24%0.39%0.721Other Services

Total Employment 744 1.0 3.07% 1.69% 1.95% 0.98% 0.93% 0.58%Source: Moody's Analytics

LQ = Location Quotient

Source: Moody’s Analytics

YEAR OVER YEAR JOB GROWTH


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-1.41%-0.69%-0.24%0.71%2.06%3.77%0.960Manufacturing


0.20%0.55%0.59%1.37%0.43%3.49%1.077 Retail Trade


0.53%0.55%-0.07%1.73%0.31%1.44%1.0111Government




0.07%0.24%-0.59%1.67%-0.43%-2.87%1.521Information


0.22%0.84%0.70%1.16%1.24%0.39%0.721Other Services






Page 153





-1.41%-0.69%-0.24%0.71%2.06%3.77%0.960Manufacturing


0.20%0.55%0.59%1.37%0.43%3.49%1.077 Retail Trade


0.53%0.55%-0.07%1.73%0.31%1.44%1.0111Government




0.07%0.24%-0.59%1.67%-0.43%-2.87%1.521Information


0.22%0.84%0.70%1.16%1.24%0.39%0.721Other Services






Page 153


PROJECT X 12

CONTACTJereme Thaxton, AICP, LEED AP Owner/AgentVenture Multifamily AdvisorsKW Legacy, Keller Williams Realtyc: 801.998.8933 [email protected]

7 unit multifamily investment property · storage b4 mechanical crawl space g1 g2 g3 g4 g5 g6 str....

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