mixed-use multifamily community in burien, …...over 100 tech companies have engineering ofﬁces...

OFFERING MEMORANDUM

Mixed-Use Multifamily Community in Burien, Washington

Sid WarsinskeSenior Associate206.296.9617 [email protected]

Ryan DiniusSenior Vice President206.398.2281 [email protected]

The information contained in the following Offering Memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Kidder Mathews and should not be made available to any other person or entity without the written consent of Kidder Mathews.

This Offering Memorandum 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. Kidder Mathews 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 Offering Memorandum has been obtained from sources we believe to be reliable; however, Kidder Mathews has not verified, and will not verify, any of the information contained herein, nor has Kidder Mathews 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.

This information has been secured from sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Recipient of this report must verify the information and bears all risk for any inaccuracies.

Exclusively listed by

kiddermathews.com

Table of Contents1. Offering Summary

• Executive Highlights

• Investment Overview

2. Property Maps & Aerials

3. Community Description

• Exterior Photos• Interior Photos

4. Financials

• Rent Roll• Income & Expenses• Pricing

5. Comparables

• Sale Comparables• Rent Comparables

Offering SummaryExecutive Highlights

Investment Overview

KIDDER MATHEWS | OFFERING MEMORANDUM | 4

YEAR BUILT

1985

Offering Summary

EXECUTIVE HIGHLIGHTS

List Price: $1,100,000

Mixed-use building with 6 residential units, all studios

On-site laundry facility

Long term tenants at below market rents

Excellent value-add opportunity

Close proximity to Burien Transit Center and Link Light Rail

±2,459 square feet of retail / office space with law tenant

Part of commercial space has two-story layout

Ample parking with 11 off-street stalls

Pitched roof

Potential to convert the 3 commercial units into 4 residential units

Walking distance to Burien Town Square,

10 miles to Seattle CBD

Major employers nearby include Amazon, Alaska Airlines, Boeing, FAA, Starbucks, Port of Seattle, Sea-Tac Airport, and others

NUMBER OF UNITS

6

PROFORMA CAP RATE

6.1%


apartment homes

Bellevue

Seattle

RentonTukwila

Kent Valley

WEST SEATTLE

Mercer Island

MAGNOLIA

BALLARD

KING COUNTY INTERNATIONAL

AIRPORT

SOUTHPORT

FAA

SEA-TAC INTERNATIONAL

AIRPORT

KENT VALLEY120M SF INDUSTRIAL /

FLEX SPACE

DES MOINES CREEK BUSINESS PARK 1.6M SF 1M SF FULFILLMENT

CENTER

WORLD HQ

STRONG REGIONAL EMPLOYERS

Offering Summary

Downtown Seattle adding an average of 25 new jobs per day since 2010: nearly 300,000 jobs in the CBD

Amazon’s world headquarters in Seattle expanding to nearly 14 million square feet by 2020: capacity for 72,000 employees

Over 100 tech companies have engineering offices in Seattle

South Lake Union has become a life science employment hub and is one of the fastest growing centers in the nation

Boeing 737 plant located 20 minutes east: best-selling commercial airplane in aviation history; ramping up production to 52 planes per month in 2018

Boeing has over 5,800 airplane orders, enough for eight years of production

Southport in Renton located within 20 minutes: South King County’s largest new development with 700,000 square feet Class-A office space, Hyatt Regency hotel, shopping, and dining

Kent Valley within 10 miles: 4th largest distribution center in the U.S. with over 120 million square feet

Amazon’s 1 million square foot distribution facility in Kent 15 minutes southeast: supports over 2,500 jobs

Des Moines Creek Business Park located 10 minutes south: Phase III currently under construction; a total of 1.6 million square feet of industrial - flex space of which 95% is pre-leased

Sea-Tac International Airport within 5 minutes: third fastest growing airport in the U.S.


PROPERTY SUMMARY

Property Sunnydale Apartments

Address648 S 152nd StreetBurien, WA 98148

Number of Units 6 + Retail

Residential RNSF ±2,760

Retail RNSF ±2,459

Year Built 1985

Assessor’s Parcel No. 176060-0348

Site Area 11,172 SF (0.26 acres)

Parking Ratio 1.5

INVESTMENT OVERVIEW

Built in 1985, The Sunnydale Apartments is a six-unit apartment complex located in Burien, one of the Puget Sound’s most desirable neighborhoods. Sunnydale features an excellent location just blocks from grocers, restaurants, entertainment, and shopping. The Property is also located less than a mile from the new Burien Town Square.

The Sunnydale Apartments consists of six ± 460-square foot studio units with a spacious living and dining room, oven/range, and refrigerator. This offering presents an excellent opportunity to purchase a multifamily building with strong appeal and a good physical plant while being able to take advantage of significant rental upside and historically low interest rates.

Not only has the Burien submarket seen rents increase over 15% in the past two years, but the Property’s rents are sitting significantly lower than nearby competing properties. With Burien’s vacancy rate at 4.5% and King County’s employment growing faster than any other county in the Puget Sound, an incoming investor can add value through management and renovating to the unit interiors.

Offering Summary


UNIT TYPE # OF UNITS SIZE (SF) TOTAL SF PROFORMA RENT PROFORMA RENT/SF

Studio 6 460 2,760 $995 $2.16

Commercial 1 2,459 2,459 $2,318 $0.94

7 5,219 $1.59

Offering Summary

UNIT MIX SUMMARY


ANGLE LAKE LIGHT RAIL STATION

N

1M SF Fulfillment Center

Headquarters

BOEING FIELD

Southport Development 700,000 SF Class A Office

LAKE WASHINGTON

PUGET SOUND


FLEX SPACE

SEAHURST PARK

Renton

WESTFIELD SOUTHCENTERLargest Mall in Washington

SEATAC AIRPORT3rd fastest growing airport

in the U.S.SEATAC LIGHT RAIL STATION

BOEING TENNIS CLUB

Headquarters

Distribution Center

Burien Town Square 5-Acre Master Planned Community

RAINIER BEACH LIGHT RAIL STATION

SOUNDER TRAIN

Offering Summary

Property Maps & Aerials


NEIGHBORHOOD AMENITIES MAP


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5 712

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46

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18

2242

32

52

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20

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40

2131

51

411715

11

SW 146th St

1st Ave S

SW 152nd St

SW 160th St

8th Ave S

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LAKE BURIEN


AMENITIES MAP


SHOPPING

1. Burien Town Plaza

2. Page 2 Books

3. Phoenix Tea Shop

4. Town Square Fabric and Yarn

5. A Place for Pets

6. Iris & Peony

7. The Solution, More Than Books

8. Frenzi

9. J’s Apparel

10. Dollar Tree

11. Big 5 Sporting Goods

12. Ross Dress for Less

13. Five Corners Shopping Center

14. Value Village

15. Rite Aid

16. Staples

17. Bartell Drugs Burien

18. CVS

19. Walgreens

20. Fred Meyer

EAT + DRINK

1. Bison Creek Pizza

2. Taqueria Casa Mixteca

3. King Wha Restaurant

4. Oishi Sushi

5. Subway

6. Black Zia Cantina

7. Australian Pie

8. The Point

9. The Little Chicken - Burgers

10. Pho Liu

11. Osteria da Primo

12. Maven Meals & Maven Mercantile

13. Sweet Breeze Ice Cream

14. Grand Central Bakery

15. Halo

16. Frankie’s B-Town Bistro

17. Snack Gyro

18. Aussie Bakery

19. Elliott Bay Brewhouse & Pub

20. Vince’s Italian Restaurant & Pizzeria

21. Bella Luna Pizza and Pasta

22. The Bite Sandwich Company

23. K’s Teriyaki

24. Pit Stop Taproom & Pub

25. Dukem Restaurant and Market

26. Pho La Vang

27. La Costa

28. Lucky Donuts

29. Antojutos Locos

30. Huckleberry Square Restaurant

HEALTH & WELLNESS

1. Renascent CrossFit

2. Burien Dance Theatre

3. Seattle ATA Martial Arts Academy

4. The Jungle Gym

5. CrossFit Burien

6. LA Fitness

7. Three Tree Wellness Center

8. Straight Blast Gym of Burien

9. Highline Athletic Club

10. Hot Feet Fitness

11. Freedom Fitness Gym

12. Pro Fitness

PARKS

1. Dottie Harper Park

2. Annex Park

3. Town Square Park

4. Moshier Park

5. Mathison Park

6. Linde Hill Park

GROCERY

1. Town Square Burien Market

2. Burien Farmers Market

3. Oilerie Burien

4. Micronesian Market

5. Balkan Market

6. Eat Local

7. Trader Joe’s

8. Safeway

COFFEE

1. Burien Press

2. 909 Coffee & Wine

3. Espresso Minenna

4. Starbucks

EAT + DRINK

31. I Luv Teriyaki

32. Han’s German Sausage & Deli

33. Countryside Cafe

34. Burien Fish House

35. The Greek House

36. Verona Pizza & Pasta

37. Berta’s Salvadoran Kitchen

38. Classic Eats

39. Tin Theater

40. Tin Room Bar

41. Medzo Gelato Bar & Travel Cafe

42. 913 Spirits

43. Burgers & Barley

44. Elmer’s

45. Taqueria La Estacion

46. Salva Mex

47. Tortas Locas

48. Thai’s Corner Cuisine

49. El Habanero Bar & Grill

50. Burger Broiler

51. Ivar’s Seafood Bar

52. Denny’s

53. Pizza Palace Restaurant

54. Pho Lily

55. Sunnydale Tavern

56. Burien Fresh Smoothies

57. Round Table Pizza

58. Emerald City Smoothie

59. Pho Vina


N

SEATTLE CBD

BELLEVUE CBD

1M SF Fulfillment Center

Bellevue

Seattle CBD

PIONEER SQUARE

Renton

Mercer Island

CAPITOL HILL

COLUMBIA CITY

WEST SEATTLE

THE JUNCTION

SEATAC AIRPORT

BOEING FIELD


FLEX SPACE

Southport Development 700,000 SF Class A Office

Burien Town Square 5-Acre Master Planned Community

Largest Mall in Washington

Headquarters

Headquarters

Headquarters

LINCOLN PARK

SALMON CREEK RAVINE PARK

TUKWILA LIGHT RAIL STATION

RAINIER BEACH LIGHT RAIL STATION

SOUNDER TRAIN

Community DescriptionExterior PhotosInterior Photos


EXTERIOR PHOTOS

Community Description


INTERIOR PHOTOS

Community Description

FinancialsRent Roll

Income & ExpensesPricing


Financials

RENT ROLL

UNIT # UNIT TYPE SQUARE FOOTAGE ACTUAL RENT RENT PSF MARKET RENT MARKET RENT PSF

1 Studio 460 $750 $1.63 $995 $2.16

2 Studio 460 $745 $1.62 $995 $2.16

3 Studio 460 $800 $1.74 $995 $2.16

4 Studio 460 $750 $1.63 $995 $2.16

5 Studio 460 $750 $1.63 $995 $2.16

6 Studio 460 $750 $1.63 $995 $2.16

7 Commercial 2,459 $2,250 $0.92 $2,318 $0.94

TOTAL 7 5,219 $6,795 $8,288

AVERAGE 746 $1.30 $1.59


Financials

INCOME & EXPENSES

PRICING

Price $1,100,000

Down Payment $407,000

Price Per Unit $157,143

Price Per SF $210.77

Current GRM 13.37

Current CAP Rate 4.60%

Proforma CAP Rate 6.09%

FINANCING

Loan Amount $693,000

Rate 4.50%

Amortization 30

Payment ($3,511)

Annual Debt Service ($42,136)

INCOME CURRENT PROFORMA

Gross Potential Income $82,260 $106,614

Less Physical Vacancy ($3,290) 4.00% ($5,331) 5.00%

Effective Gross Income $78,970 $101,283

Less Expenses ($28,389) 34.51% ($34,261) 32.14%

NET OPERATING INCOME $50,581 $67,022

Less Loan Payments ($42,136) ($42,136)

Pre-Tax Cash Flow $8,445 2.07% $24,886 6.11%

Plus Principal Reduction $11,180 $11,180

TOTAL RETURN BEFORE TAXES $19,624 4.82% $36,066 8.86%

The above financing terms are based on a 5-year term, 30 years amortization. As loan information is time sensitive and subject to market fluctuations, we recommend that you verify terms by contacting a preferred lender of your choice.


MONTHLY INCOME CURRENT PROFORMA

Total Scheduled Rent $6,795 $8,288

Non-Refundable & Damages $0 $17

Pet Rent $0 $30

Late Fees & MTM $0 $10

Utility Reimbursement $0 $480

Laundry $60 $60

Scheduled Potential Income $82,260 $106,614

Less Physical Vacancy ($3,290) 4.00% ($5,331) 5.00%

Effective Gross Income $78,970 $101,283

ANNUAL EXPENSES

Real Estate Taxes $11,898 $15,074

Insurance $3,116 $3,116

Utilities $6,584 $6,781

Repairs & Maintenance $3,452 $5,950

General & Admin $445 $445

Contract Services $1,145 $1,145

Reserves $1,750 $1,750

Total Expenses (including RR) $28,389 $34,261

Expenses Per Unit $4,056 $4,894

Expenses Per Square Foot $5.44 $6.56

NET OPERATING INCOME $50,581 $67,022

PRICING

Financials

Income

Non-Refundable & DamagesBased on market average.

Pet RentBased on $15 per month for two units

Late FeesBased on market average.

Utility ReimbursementBased on 85% recovery rate of utilities

Laundry IncomeBased on $10 per unit per month

Expenses

Real Estate TaxesBased on current millage rate multiplied by sales price

InsuranceBased on actual insurance expense

UtilitiesBased on 3% growth of existing utilities expense

Repairs & MaintenanceBased on $850 per unit.

General & AdminBased on current operations.

Contract ServicesBased on current operations.

Replacement Reserves$250 per unit is accumulated to pay for large capital expenditures amortized over years of operations

ComparablesSale ComparablesRent Comparables


3

SIX UNIT15409 9th Avenue SW, Burien

1

JON RU 230 S 156th Street, Burien

SALE COMPARABLES

Comparables

2

OLIVE BRANCH427 SW 154th Street, Burien

4

IMPERIAL ARMS22005 7th Avenue S, Des Moines

SUBJECT

SUNNYDALE APARTMENTS648 S 152nd Street, Burien

123

4

SeaTacNormandy Park

White Center

Des MoinesPUGET SOUND

N


SALE COMPARABLES

Comparables

Sunnydale Apts648 S 152nd Street, Burien

Date Sold On Market

Sale Price $1,100,000

Price / Unit $157,143

Price / SF $210.77

Units 7

Year Built 1985

SUBJECT Jon Ru230 S 156th Street, Burien

Date Sold 09/07/2017



Price / SF $191.82

Units 17

Year Built 1963

1

Olive Branch 427 SW 154th Street, Burien




Price / SF $258.69

Units 6

Year Built 1976

2 Six Unit15409 9th Avenue SW, Burien


Sale Price $988,000


Price / SF $196.58

Units 6

Year Built 1979

3


Imperial Arms22005 7th Avenue S, Des Moines




Price / SF $163.44

Units 8

Year Built 1978

4

SALE COMPARABLES

Comparables

123

4

SeaTacNormandy Park

White Center

Des MoinesPUGET SOUND

N


Comparables

SUBJECT

SUNNYDALE APARTMENTS648 S 152nd Street, Burien

RENT COMPARABLES

1

DISCOVERY LANDING15405 Des Moines Memorial Drive, Burien

2

MAPLE POINTE15421 Des Moines Memorial Drive, Burien

3

FENTON PLACE601 S 152nd Street, Burien

2

1

3

5

6

4

S 152nd St

S 156th St

Des

Mo

ines

Mem

ori

al D

r S

4th

Ave

S

N


6

SOLANA15800 4th Avenue S, Burien

Comparables

RENT COMPARABLES

5

CIERRA COMMONS608 S 152nd Street, Burien

4

MONTROSE220 S 152nd Street, Burien

2

1

3

5

6

4

S 152nd St

S 156th St

Des

Mo

ines

Mem

ori

al D

r S

4th

Ave

S

N


Sunnydale Apts648 S 152nd Street, Burien

Number of Units 7

Year Built 1985

Occupancy 100%

Discovery Landing15405 Des Moines Memorial Drive, Burien

Number of Units 146

Year Built 1987

Occupancy 96%

RENT COMPARABLES

Comparables

SUBJECT 1

UNIT MIX # UNITS SF MARKET RENT AVG. RENT $/SF

1 BR / 1 BA 12 577 $1,350 $1,350 $2.34

1 BR / 1 BA 28 736 $1,450 $1,450 $1.97

2 BR / 1 BA 26 920 $1,500 $1,500 $1.63

2 BR / 2 BA 56 1,042 $1,550 - $1,700 $1,625 $1.56

3 BR / 2 BA 24 1,178 $1,928 $1,929 $1.64

AVG 146 946 $1,596 $1.69

Notes: W/S/G - RUBS implements. W/D - in unit.


Studio 6 460 $995 $995 $2.16

Commercial 1 2,459 $2,318 $2,318 $0.94

AVG 7 746 $1,184 $1.59

Notes: This is the subject property.


Maple Pointe15421 Des Moines Memorial Drive, Burien

Number of Units 126

Year Built 1986

Occupancy 96%

Comparables

RENT COMPARABLES

2


1 BR / 1 BA 42 513 - 666 $1,335 $1,335 $2.30

2 BR / 1 BA 26 837 $1,570 $1,570 $1.88

2 BR / 2 BA 42 946 $1,675 $1,675 $1.77

3 BR / 2 BA 16 1,097 $1,940 $1,940 $1.77

AVG 126 824 $1,574 $1.91

Notes: W/S/G - $55/mo. + $15 per person. W/D - in unit. Parking: $40/mo. covered.

Fenton Place601 S 152nd Street, Burien

Number of Units 39

Year Built 1986

Occupancy 100%

3


1 BR / 1 BA 31 600 $1,275 $1,275 $2.13

2 BR / 1.5 BA 8 920 $1,475 $1,475 $1.60

AVG 39 666 $1,316 $1.98

Notes: Owner pays W/S/G.


Comparables

RENT COMPARABLES

Montrose220 S 152nd Street, Burien

Number of Units 97

Year Built 1963

Occupancy 97%

4


1 BR / 1 BA 48 588 - 743 $1,295 - $1,395 $1,345 $2.04

2 BR / 1.5 BA 36 728 - 911 $1,625 $1,625 $2.01

3 BR / 1.5 BA 13 1,130 $1,800 $1,800 $1.59

AVG 97 785 $1,510 $1.92

Notes: Renovated. Tenants pay W/S/G.

Cierra Commons608 S 152nd Street, Burien

Number of Units 66

Year Built 1988

Occupancy 100%


1 BR / 1 BA 33 689 $1,295 - $1,350 $1,323 $1.92

2 BR / 1 BA 21 900 $1,395 - $1,450 $1,423 $1.58

2 BR / 2 BA 12 1,000 $1,495 - $1,550 $1,523 $1.52

AVG 66 813 $1,391 $1.71

Notes: Tenants pay W/S/G.

5


Comparables

RENT COMPARABLES

Solana15800 4th Avenue S, Burien

Number of Units 75

Year Built 1978

Occupancy 95%

6


1 BR / 1 BA 36 646 $1,345 - $1,395 $1,370 $2.12

2 BR / 1.5 BA 39 875 $1,595 $1,595 $1.82

AVG 75 765 $1,487 $1.94

Notes: Tenant pays W/S/G. 2

1

3

5

6

4

S 152nd St

S 156th St

Des

Mo

ines

Mem

ori

al D

r S

4th

Ave

S

N

Ryan DiniusSenior Vice President206.398.2281 [email protected]

Sid WarsinskeSenior Associate206.296.9617 [email protected]

Exclusively listed by

mixed-use multifamily community in burien, …...over 100 tech companies have engineering ofﬁces...

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