offering memor andum 101-unit value-add …...current ownership has successfully renovated 40.6% of...
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O F F E R I N G M E M O R A N D U M
1 0 1 - U N I T V A L U E - A D D I N V E S T M E N T O P P O R T U N I T Y
2 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
T he information contained herein is strictly confidential, furnished solely for the purpose of considering the acquisition of the property described herein, and is not to be used for any other purpose or made available to any other person without the expressed written consent of ARA Pacific.
It has been obtained from the Seller and may include other sources believed to be reliable, but no representation is being made with regard to its accuracy or completeness.
Prospective investors should undertake their own investigations and reach their own conclusions without reliance upon the material contained herein. Neither the Seller nor the Agent nor any of their respective officers, agents or principals has made or will make any representations or warranties, expressed or implied, as to the accuracy or completeness of the Offering Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of the Offering Memorandum or its contents.
Analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the prospective purchaser.
The Seller and Agent expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the property and/or terminate discussions with any entity at any time with or without notice.
The Seller shall have no legal commitment or obligations to any entity reviewing the Offering Memorandum or making an offer to purchase the property unless and until such offer for the property is approved by the Seller, and any conditions to the Buyer’s obligations thereunder have been satisfied or waived.
Confidentiality Agreement
Nate Oleson License CA: 01467941
916.599.6523
Mark LearyLicense CA: 01177579
916.764.4191
Marc AndenmattenLicense CA: 01956176
916.835.8844
Rob LeDoux License CA: 01816798
415.430.1047
Contact Information
3 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
22
49
303844
EXECUTIVE SUMMARY
INVESTMENT HIGHLIGHTS
PROPERTY OVERVIEW
COMPARABLE ANALYSIS
FINANCIAL ANALYSIS
LOCATION OVERVIEW
TABLE OF CONTENTS
4 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
Investment SummaryPrice $12,000,000
Current Cap Rate 5.0%
Market Cap Rate 6.5%
Post-Reno Cap Rate 6.8%
Address 2811 Cold Springs Road Placerville, CA 95667
Year Built 1971
Total # of Units 101
Avg Unit Size 776
Net Rentable SF 78,384
# of Acres 11.47
Density 8.8
Parking Spaces 157
Parking Ratio 1.55
Avg In-Place Rent $1,010
Avg In-Place Rent PSF $1.30
Avg Market Rent $1,165
Avg Market Rent PSF $1.50
Avg Post-Reno Rent $1,223
Avg Post-Reno Rent PSF $1.58
Occupancy (May-17) 99.0%
ARA Newmark, as the exclusive advisor, is pleased to present the opportunity to acquire Woodridge East, a 101-unit garden-style apartment community located in Placerville, California.
Key Investment Highlights» Value-Add Upside: Current ownership has completed renovations to 41 units (40.6% of the
unit mix) and has achieved rent premiums of approximately $100 per unit per month.
» Loss-to-Lease Capture: There is an average loss-to-lease of $144 for the 41 renovated units and an average of $265 in total upside (loss-to-lease capture + renovation premiums) for the remaining 60 unrenovated units — more than $258k in revenue growth a new owner can capture.
» RUBS Implementation: An investor has the opportunity to capitalize on approximately $60k in additional RUBS revenue in year 1 upon implementation of a utility reimbursement program at an estimated $50 per unit per month.
» Outstanding Regional Rent Growth: The Sacramento MSA has experienced yet another year of accelerated rent growth, with Y-O-Y rent growth exceeding 9.8% between Q1-2016 and Q2-2017.
» Limited Supply-Side Competition: Woodridge East remains one of the few institutional multifamily assets in all of El Dorado County, and with almost no new product coming to the market in the near future, it is well-positioned to capture a significant share of the demand for rental housing in the immediate area.
» Historic Placerville Location: Placerville is a quaint, California “gold rush” town nestled in the foothills of the Sierra Nevadas, with close proximity to regional employers in Sacramento (30 minutes) and recreational activities in Lake Tahoe (one and a half hours).
» Low Density Community: Situated on +/- 11.5 acres of lushly landscaped grounds, Woodridge East offers residents a low-density (8.8 units/acre), tranquil suburban environment.
The OfferingFree & Clear
Terms of SaleJuly 12, 2017
Bid Deadline
E X EC U T I V E S U M M A RY
5 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
E X EC U T I V E S U M M A RY
ROUTEROUTE
5050
ROUTEROUTE
5050
Edwin MarkhamMiddle School
CountyLibrary
El DoradoHigh School
Placerville Dr
El Dorado CountyGovernment
Complex
PlacervilleSpeedway
El DoradoCounty Fair & Event Center
El DoradoCounty Park
Louisiana SchnellElementary
Historic DowntownPlacerville
SierraElementary
PlacervilleAirport
Lake Tahoe14 ski resorts
65 miles from WoodridgeN
Median SFR: $415k
El Dorado National Forest
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E X EC U T I V E S U M M A RY
7 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
E X EC U T I V E S U M M A RY
8 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
E X EC U T I V E S U M M A RY
9 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
INVESTMENT HIGHLIGHTS
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RENOVATED UNITS
Current ownership has successfully renovated 40.6% of the unit interiors with granite countertops, new cabinetry, vinyl flooring, white appliances and updated light fixtures. With these upgrades, ownership has achieved impressive premiums of approximately $100 per unit per month at an average cost of approximately $7,600, boasting a return on cost of 16%. New ownership will have the opportunity to complete the interior renovation program for the remaining 60 units, and can expect a sizable increase in revenue upon completion.
Value-Add Upside
I N V E ST M E N T H I G H L I G H T S
By billing back tenants for water, sewer, and trash, a new owner has the opportunity to increase revenue by approximately $50 per unit per month in the form of utility reimbursements, which could increase year 1 NOI by more than $60,000. All of the properties in the comparable set for Woodridge East have successfully implemented utility reimbursement programs: The Highlands is achieving an additional $40-$60 per unit per month in the form of RUBS, Sierra Oaks is achieving an additional $50-$55 per unit per month, Quail Ridge is achieving an additional $45-$55 per unit per month, and Cameron Ridge is achieving up to $75 per unit per month. We are confident that the implementation of a utility reimbursement program at Woodridge East would yield comparable revenue gains.
RUBS Implementation
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I N V E ST M E N T H I G H L I G H T S
Unrenovated 1x1 Kitchen
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I N V E ST M E N T H I G H L I G H T S
$100RENOVATION
PREMIUM
Renovated 1x1 Kitchen
13 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
With renovation premiums averaging $100, Woodridge East trails the
competitive set.
I N V E ST M E N T H I G H L I G H T S
Proven Value-Add in the SubmarketThere are numerous properties within the submarket that are successfully renovating units and achieving substantial premiums. The specifics of these upgrades vary by property, however achieved premiums of $100-$200 remain common throughout the submarket. For instance, Quail Ridge is installing butcher block counters, stainless steel appliances, wood-vinyl flooring, white shaker cabinets and tile backsplashes for a premium of $200 per unit per month. Sierra Oaks is undergoing the same renovation: butcher block counters, stainless steel appliances, wood-vinyl flooring, white shaker cabinets and tile backsplashes for a premium of $200 per unit per month. Finally, Cameron Ridge is respraying counters, installing black appliances, new light fixtures, and refinishing cabinets for a premium of $100 per unit per month.
Comp Set $100-200 Premiums
Woodridge East $100 Premiums
Quail RidgeUnits: 46
Year Built: 1988
Renovation: Butcher block counters, stainless steel appliances, wood vinyl flooring, white cabinets, tile backsplash
Premium: $200
Sierra OaksUnits: 72
Year Built: 1987
Renovation: Butcher block counters, stainless steel appliances, wood vinyl flooring, white cabinets, tile backsplash
Premium: $200
Cameron RidgeUnits: 99
Year Built: 1985
Renovation: Black appliances, resprayed counters, light fixtures, refinished cabinets
Premium: $100
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I N V E ST M E N T H I G H L I G H T S
As demonstrated by the one-bedroom sort chart below, Woodridge East has room to grow its one-bedroom rents and remain competitive with the comparable set. Even after renovating the units and growing rents by $100, the post-renovation market rent for a one-bedroom unit is only $1,095. This is the lowest market rent for a renovated one-bedroom unit out of the comparable set.
Renovation Comparison – 1 Bedroom Units
1 Bedroom Units Sorted by Average Rent
Property Appliances Cabinets Countertops Flooring Premium Over Unrenovated Year Built Unit Type Avg SF Avg Market
Rent Avg PSF
Quail Ridge (Renovated) Stainless White Shaker Butcher-block Vinyl $200 1989 1x1 671 $1,350 $2.01
Sierra Oaks (Renovated) Stainless White Shaker Butcher-block Vinyl $200 1988 1x1 671 $1,330 $1.98
The Highland (Unrenovated) White - Sprayed Vinyl - 1990 1x1 685 $1,200 $1.75
Cameron Ridge (Renovated) Black Refinished Re-sprayed Vinyl $100 1985 1x1 800 $1,175 $1.47
Quail Ridge (Unrenovated) - 1989 1x1 671 $1,150 $1.71
Sierra Oaks (Unrenovated) - 1988 1x1 671 $1,130 $1.68
Woodridge East (Renovated) White Refinished Granite Vinyl $100 1971 1x1 628 $1,095 $1.74
Cameron Ridge (Unrenovated) - 1985 1x1 800 $1,075 $1.34
Woodridge East (Unrenovated) - 1971 1x1 628 $995 $1.58
Average $150 1984 692 $1,167 $1.70
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I N V E ST M E N T H I G H L I G H T S
Similar to the one-bedroom sort chart, this set of data serves as evidence that Woodridge East has room to grow its two-bedroom market rents. In terms of square footage, Woodridge East’s 2x1 units are the smallest two-bedroom units in the comparable set, averaging 824 square feet. Similarly, the market rent for Woodridge East’s 2x1 units is lowest in comparison to the other renovated two-bedroom market rents in the submarket.
Renovation Comparison – 2 Bedroom Units
2 Bedroom Units Sorted by Average Rent
Property Appliances Cabinets Countertops Flooring Premium Over Unrenovated Year Built Unit Type Avg SF Avg Market
Rent Avg PSF
Quail Ridge (Renovated) Stainless White Shaker Butcher-block Vinyl $200 1989 2x2 890 $1,525 $1.71
Sierra Oaks (Renovated) Stainless White Shaker Butcher-block Vinyl $200 1988 2x1 890 $1,495 $1.68
The Highland (Unrenovated) White - Sprayed Vinyl - 1990 2x1.25 922 $1,395 $1.51
Cameron Ridge (Renovated) Black Refinished Re-sprayed Vinyl $100 1985 2x2 950 $1,375 $1.45
Quail Ridge (Unrenovated) - 1989 2x2 890 $1,325 $1.49
Sierra Oaks (Unrenovated) - 1988 2x1 890 $1,295 $1.46
Cameron Ridge (Unrenovated) - 1985 2x2 950 $1,275 $1.34
Woodridge East (Renovated) White Refinished Granite Vinyl $100 1971 2x1 824 $1,250 $1.52
Woodridge East (Unrenovated) - 1971 2x1 824 $1,150 $1.40
Average $150 1984 892 $1,343 $1.51
16 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
I N V E ST M E N T H I G H L I G H T S
By completing the renovation of the remaining 60 units, as well as capturing the loss-to-lease on the units that have already been renovated, a new owner has the opportunity to substantially increase near-term NOI. Based on current market rents, which reflect recent leasing activity at the asset level and have been verified through an analysis of comparable properties, there is an average loss-to-lease of $144 for the 41 renovated units, and an average of $265 in potential upside (loss-to-lease capture + renovation premiums) for the 60 unrenovated units. This equates to over $258k in additional annual revenue that a new investor can capture following the completion of all renovations.
Loss-to-Lease Capture
$1,010AVERAGE
IN-PLACE RENT
$1,165AVERAGE
MARKET RENT
$155AVERAGE
LOSS-TO-LEASE
Type Units Unit Size In-Place Rent Market Rent Loss-to-Lease
($) Annual
Loss-to-Lease Renovation
PremiumPost-Reno
Market RentPer Unit Upside
Total Upside
1x1 30 628 $863 $995 $132 $47,640 $100 $1,095 $232 $83,640
1x1 (Renovated) 6 628 $948 $1,095 $147 $10,560 $0 $1,095 $147 $10,560
2x1 23 824 $940 $1,150 $210 $57,840 $100 $1,250 $310 $85,440
2x1 (Renovated) 21 824 $1,107 $1,250 $143 $36,060 $0 $1,250 $143 $36,060
3x1 6 896 $1,120 $1,275 $155 $11,160 $100 $1,375 $255 $18,360
3x1 (Renovated) 14 896 $1,232 $1,375 $143 $24,102 $0 $1,375 $143 $24,102
House 1 1,600 $1,600 $1,600 $0 $0 $0 $1,600 $0 $0
Total/Average 101 776 $1,010 $1,165 $155 $187,362 - $1,223 $213 $258,162
17 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
I N V E ST M E N T H I G H L I G H T S
Type Units Unit Size In-Place Rent 3 Most Recent Leases Most Recent Lease Market Rent
1x1 30 628 $863 $995 $995 $995
1x1 (Renovated) 6 628 $948 $988 $1,095 $1,095
2x1 23 824 $940 $1,030 $1,150 $1,150
2x1 (Renovated) 21 824 $1,107 $1,250 $1,250 $1,250
3x1 6 896 $1,120 $1,138 $1,165 $1,275
3x1 (Renovated) 14 896 $1,232 $1,295 $1,375 $1,375
House 1 1,600 $1,600 $1,600 $1,600 $1,600
Total/Average 101 776 $1,010 $1,112 $1,158 $1,165
Woodridge East has experienced strong leasing activity over the past several months — the average in-place rent of the 3 most recently signed leases for each floor plan is approximately $100 greater than the average in-place rent at the property, and the most recently signed lease for each floor plan is approximately $150 greater than the average in-place rent at the property.
Recent Leasing Trends
$1,010$1,112 $1,158 $1,165
$700
$800
$900
$1,000
$1,100
$1,200
$1,300
$1,400
Average Rent
In‐Place Rent 3 Most Recent Leases Most Recent Lease Market Rent
18 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
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I N V E ST M E N T H I G H L I G H T S
Outstanding Regional Rent GrowthThe Sacramento MSA has experienced yet another year of rapid rent growth, with average rental rates 9.8% higher in Q1-2017 compared to Q1-2016. This upward trajectory is exhibited individually in each of the Sacramento area submarkets. The El Dorado Hills submarket – ARA’s nearest tracked locality to the subject – grew rents by 7.8% on average from the year prior.
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I N V E ST M E N T H I G H L I G H T S
The El Dorado Hills submarket – ARA’s nearest tracked to the subject – grew rents by 7.8% on average from the year prior, a $113 increase on average. Additionally, the average vacancy rate throughout the submarket has remained below 4% for 16 consecutive quarters, and currently sits at a mere 2.6%. This strong rent growth can be attributed to a combination of continued job growth and limited new construction throughout the region. With none of these trends expected to change in the next year, rent growth should remain robust in the near future.
Robust Submarket Fundamentals$1
,312
$1,327
$1,345
$1,388
$1,369
$1,423
$1,328
$1,395
$1,441
$1,539
$1,500
$1,495
$1,554
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
$1,000
$1,100
$1,200
$1,300
$1,400
$1,500
$1,600
1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017
El Dorado Submarket
Average Rent Vacancy Rate
RENT & OCCUPANCY GROWTH TRENDS — EL DORADO HILLS SUBMARKET
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El Dorado County’s Top 10 Employers Rank Employer City Employees Type of Business
1 El Dorado County Placerville 1,860 Government
2 Blue Shield of California El Dorado Hills 1,341 Nonprofit health plan
3 Red Hawk Casino Placerville 1,300 Casino entertainment, restaurants
4 Marshall Medical Center Placerville 1,202 Hospital and health care services
5 DST Output El Dorado Hills 850 Manufacturing and technology
6 Barton Health South Lake Tahoe 840 Hospital and health care services
7 U.S. Government Various locations 788 Government
8 State of California Various locations 743 Government
9 Safeway Inc. Various locations 694 Grocery store chain
10 El Dorado County Office of Education Placerville 669 Education
As of December 2016, El Dorado County had a labor force of 89,400 and an unemployment rate of 5.4%. Government, healthcare services and entertainment drive the county’s economy. The largest employers include the County of El Dorado itself, Red Hawk Casino, and Marshall Medical Center, all located in the city of Placerville. The property is also a close commute to Sacramento, which has seen some of the largest job growth in the country, and has very strong employment fundamentals in industries including technology, healthcare and government.
Local Employment
I N V E ST M E N T H I G H L I G H T S
11,761TOTAL JOBS
IN PLACERVILLE
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Limited Supply-Side CompetitionNew construction of multifamily properties continues to remain nonexistent in El Dorado County. This lack of new supply, combined with steady regional rent growth and a scarcity of competitive existing supply, result favorably for the property’s income fundamentals. With almost no new product coming to the market in the near future, Woodridge East is well positioned to capture a significant share of the demand for rental housing in the immediate area, and should continue to operate at close to 100% occupancy.
I N V E ST M E N T H I G H L I G H T S
El Dorado
Placer
Sacramento
El Dorado County # of Units
Under Construction 0
Planned & Approved 250
TOTAL 250
Sacramento County # of Units
Under Construction 2,081
Planned & Approved 2,152
TOTAL 4,233
Placer County # of Units
Under Construction 318
Planned & Approved 863
TOTAL 1,181
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PROPERTY OVERVIEW
23 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
Property Summary
Address2811 Cold Springs Road Placerville, CA 95667
County El Dorado
Year Built 1971
Total # of Units 101
Net Rentable SF 78,384
Parcel #323-440-22-100, 323-440-11-100,
323-440-10-100
# of Acres 11.47
Density 8.8
Parking Spaces 157
Parking Ratio 1.55
Total Buildings 12
Total # of Stories 1 & 2
Building Style Garden-Style
Framing Wood
Roof Flat & Pitched
Exteriors Stucco with Wood Panels
Electrical Copper
Plumbing Copper
Water Heaters Propane
Windows Aluminum / Single-Pane
HVAC Central Electric Heat / Pump
Ceiling Heights 8’
Washers / Dryers On-Site
Utilities
PAID BY METHOD SUPPLIED BY
Electric Resident Direct PG&E
Gas Owner Direct Suburban Propane
Water/Sewer Owner Direct El Dorado Irrigation
Trash Owner Direct El Dorado Disposal
Cable/Internet Resident Direct Comcast
P R O P E RT Y OV E RV I EW
Unit MixUNIT TYPE
# OF UNITS
AVG SF
% OF TOTAL
IN-PLACE RENT
MARKET RENT
POST-RENO RENT
1x1 30 628 29.7% $863 $995 $1,095
1x1 (Renovated) 6 628 5.9% $948 $1,095 $1,095
2x1 23 824 22.8% $940 $1,150 $1,250
2x1 (Renovated) 21 824 20.8% $1,107 $1,250 $1,250
3x1 6 896 5.9% $1,120 $1,275 $1,375
3x1 (Renovated) 14 896 13.9% $1,232 $1,375 $1,375
House 1 1,600 1.0% $1,600 $1,600 $1,600
Unrenovated 60 746 59.4% $931 $1,093 -
Renovated 41 820 40.6% $1,126 $1,270 -
Total/Avg 101 776 100.0% $1,010 $1,165 $1,223
24 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
P R O P E RT Y OV E RV I EW
SFR RENTAL ON SITE
25 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
P R O P E RT Y OV E RV I EW
The following amenities provide residents with a distinctly unique living environment:
» On-Site Laundry Facilities
» 151 Parking Spaces
» 6 Cottages
» Playground
» Leasing Office
» Direct Proximity to Highway 50
COMMUNITY AMENITIES
26 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
P R O P E RT Y OV E RV I EW
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P R O P E RT Y OV E RV I EW
SINGLE-FAMILY HOUSE
151 PARKING SPACES
ON-SITE LAUNDRY
PLAYGROUND
LEASING OFFICE
SIX COTTAGES
28 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
P R O P E RT Y OV E RV I EW
Woodridge East features spacious one-, two- and three-bedroom apartment homes. The 41 fully renovated units include the following features:
» Granite Countertops
» New Cabinetry
» Vinyl Flooring
» White Appliances
» Updated Light Fixtures
APARTMENT AMENITIES
29 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
P R O P E RT Y OV E RV I EW
30 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
COMPARABLE ANALYSIS
31 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
Market Survey Takeaways
» A majority of the rent comparables are renovating, and have successfully earned $100-$200 renovation premiums
» Typical renovations:
• Counters: Granite, butcher block
• Appliances: Stainless-steel
• Flooring: Wood-vinyl
• Other: Updated cabinetry, tile backsplashes, light fixtures
» Woodridge East has the lowest market rents in the comparable set, approximately $131 less than the comp set average
» Woodridge East’s average unit size is smaller than any of the rent comparables,
and 63 SF smaller than the comp set average
Unit Mix Comparison
» One-bedroom units in the comparable set average 741 square feet at an average market rent of $1,134, or $1.53 PSF. One-bedroom units at Woodridge East average 628 square feet, at an average market rent of $1,012, or $1.61 PSF. The comparable set is priced higher on whole-dollar cost basis, but is lower than Woodridge East on a per-square foot basis.
» Two-bedroom one-bathroom units in the comparable set average 905 square feet at an average market rent of $1,395, or $1.54 PSF. Two-bedroom one bathroom units at Woodridge East average 824 square feet, at an average market rent of $1,198, or $1.45 PSF. These figures demonstrate that two-bedroom units in the comparable set outweigh Woodridge East in both PSF and whole-dollar costs, which serves as incentive to securely grow rents at the subject property.
CO M PA RA B L E A N A LYS I S
WoodridgeEast
$1,165
AVERAGEMARKET
RENT
776AVERAGE
SQ FT
$1.50
AVERAGERENT PSF
CompSet
$1,296
AVERAGEMARKET
RENT
839AVERAGE
SQ FT
$1.55
AVERAGERENT PSF
32 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
UnitsYear BuiltAvg Rent
Avg SFAvg Rent/SF
1011971$1,165776$1.50
Cameron RidgeUnits
Year BuiltAvg Rent
Avg SFAvg Rent/SF
991985$1,195844$1.42
1The Highland
UnitsYear BuiltAvg Rent
Avg SFAvg Rent/SF
641991$1,346863$1.56
4
Sierra OaksUnits
Year BuiltAvg Rent
Avg SFAvg Rent/SF
721987$1,358841$1.61
Quail RidgeUnits
Year BuiltAvg Rent
Avg SFAvg Rent/SF
461988$1,345789$1.70
32
CO M PA RA B L E A N A LYS I S
33 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
CO M PA RA B L E A N A LYS I S
Property Appliances Cabinets Countertops Flooring Premium Over Unrenovated Year Built Unit Type Avg SF Avg Market
Rent Avg PSF
Quail Ridge (Renovated) Stainless White Shaker Butcher-block Vinyl $200 1989 1x1 671 $1,350 $2.01
Sierra Oaks (Renovated) Stainless White Shaker Butcher-block Vinyl $200 1988 1x1 671 $1,330 $1.98
The Highland (Unrenovated) White - Sprayed Vinyl - 1990 1x1 685 $1,200 $1.75
Cameron Ridge (Renovated) Black Refinished Re-sprayed Vinyl $100 1985 1x1 800 $1,175 $1.47
Quail Ridge (Unrenovated) - 1989 1x1 671 $1,150 $1.71
Sierra Oaks (Unrenovated) - 1988 1x1 671 $1,130 $1.68
Woodridge East (Renovated) White Refinished Granite Vinyl $100 1971 1x1 628 $1,095 $1.74
Cameron Ridge (Unrenovated) - 1985 1x1 800 $1,075 $1.34
Woodridge East (Unrenovated) - 1971 1x1 628 $995 $1.58
Average $150 1984 692 $1,167 $1.70
1 Bedroom Sort Charts
34 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
CO M PA RA B L E A N A LYS I S
2 Bedroom Sort Charts
Property Appliances Cabinets Countertops Flooring Premium Over Unrenovated Year Built Unit Type Avg SF Avg Market
Rent Avg PSF
Quail Ridge (Renovated) Stainless White Shaker Butcher-block Vinyl $200 1989 2x2 890 $1,525 $1.71
Sierra Oaks (Renovated) Stainless White Shaker Butcher-block Vinyl $200 1988 2x1 890 $1,495 $1.68
The Highland (Unrenovated) White - Sprayed Vinyl - 1990 2x1.25 922 $1,395 $1.51
Cameron Ridge (Renovated) Black Refinished Re-sprayed Vinyl $100 1985 2x2 950 $1,375 $1.45
Quail Ridge (Unrenovated) - 1989 2x2 890 $1,325 $1.49
Sierra Oaks (Unrenovated) - 1988 2x1 890 $1,295 $1.46
Cameron Ridge (Unrenovated) - 1985 2x2 950 $1,275 $1.34
Woodridge East (Renovated) White Refinished Granite Vinyl $100 1971 2x1 824 $1,250 $1.52
Woodridge East (Unrenovated) - 1971 2x1 824 $1,150 $1.40
Average $150 1984 892 $1,343 $1.51
35 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
CO M PA RA B L E A N A LYS I S
Woodridge East Occupancy: 99% 2811 Cold Springs Rd, Placerville, CA YOC: 1971
Unit Amenities: Renovated units include granite countertops, refinished cabinetry, vinyl flooring, new white appliances and updated light fixtures
Property Amenities: On-site laundry facilities, 151 parking spaces, playground, leasing center, direct proximity to highway 50
Unit Mix
UNIT TYPE
# OF UNITS
AVG SF
% OF TOTAL
AVG IN-PLACE RENT
AVG PSF
AVG MKT RENT
AVG PSF
1x1 30 628 29.7% $863 $1.37 $995 $1.58
1x1 (Renovated) 6 628 5.9% $948 $1.51 $1,095 $1.74
2x1 23 824 22.8% $940 $1.14 $1,150 $1.40
2x1 (Renovated) 21 824 20.8% $1,107 $1.34 $1,250 $1.52
3x1 6 896 5.9% $1,120 $1.25 $1,275 $1.42
3x1 (Renovated) 14 896 13.9% $1,232 $1.37 $1,375 $1.53
House 1 1,600 1.0% $1,600 $1.00 $1,600 $1.00
Unrenovated 60 746 59.4% $931 $1.25 $1,093 $1.46
Renovated 41 820 40.6% $1,126 $1.37 $1,270 $1.55
Total/Avg 101 776 100.0% $1,010 $1.30 $1,165 $1.50
36 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
CO M PA RA B L E A N A LYS I S
Cameron Ridge Occupancy: 97% • YOC: 19853441 Mira Loma Dr, Cameron Park, CA Manager: FPI
Unit Amenities: Renovated units include black appliances, resprayed counters, refinished cabinets, new light fixtures, and vinyl flooring
Property Amenities: Two on-site laundry facilities, two pool & spa areas, covered parking, pet-friendly community, forest-like setting
UNIT TYPE # OF UNITS AVG SF RENT(LOW)
RENT(HIGH) AVG RENT AVG RENT
PSF
0x1 3 450 $975 $1,125 $1,050 $2.33
1x1 60 800 $1,075 $1,175 $1,125 $1.41
2x2 36 950 $1,275 $1,375 $1,325 $1.39
Total/Avg 99 844 $1,145 $1,246 $1,195 $1.42
Sierra Oaks Occupancy: 100% • YOC: 19872701 La Crescenta Dr, Cameron Park, CA Manager: RCMI
Unit Amenities: Renovated units include butcher block counters, stainless steel appliances, wood vinyl flooring, white cabinets, and tile backsplashes
Property Amenities: Covered parking, on-site laundry facilities, high-speed internet, pool & spa area, night-patrol, pet-friendly community
UNIT TYPE # OF UNITS AVG SF RENT(LOW)
RENT(HIGH) AVG RENT AVG RENT
PSF
1x1 16 671 $1,130 $1,330 $1,230 $1.83
2x1 56 890 $1,295 $1,495 $1,395 $1.57
Total/Avg 72 841 $1,258 $1,458 $1,358 $1.61
37 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
CO M PA RA B L E A N A LYS I S
Quail Ridge Occupancy: 96% • YOC: 19882675 La Crescenta Dr, Cameron Park, CA Manager: RCMI
Unit Amenities: Renovated units include butcher block counters, stainless steel appliances, wood vinyl flooring, white cabinets, and tile backsplashes
Property Amenities: Covered parking, fitness center, pool & spa area, on-site laundry facilities, BBQ & picnic area
The Highland Occupancy: 98% • YOC: 19912600 Knollwood Ct, Cameron Park, CA Manager: DJA
Unit Amenities: All units are non-renovated; current spec includes white appliances, sprayed counters, and vinyl flooring
Property Amenities: Covered parking, fitness center, pool & spa area, on-site laundry facilities, BBQ & picnic area
UNIT TYPE # OF UNITS AVG SF RENT(LOW)
RENT(HIGH) AVG RENT AVG RENT
PSF
1x1 21 671 $1,150 $1,350 $1,250 $1.86
2x1 25 890 $1,325 $1,525 $1,425 $1.60
Total/Avg 46 790 $1,245 $1,445 $1,345 $1.70
UNIT TYPE # OF UNITS AVG SF RENT(LOW)
RENT(HIGH) AVG RENT AVG RENT
PSF
1x1 16 685 $1,200 $1,200 $1,200 $1.75
2x1.25 48 922 $1,395 $1,395 $1,395 $1.51
Total/Avg 64 863 $1,346 $1,346 $1,346 $1.57
38 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
FINANCIAL ANALYSIS
39 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
The following section provides detailed information on the operations of the subject property, including a detailed unit mix summary, historical operations, and our pro forma underwriting and assumptions.
Overview
F I N A N C I A L A N A LYS I S
*Please page 42 for more details
Debt QuoteAGENCY FANNIE FREDDIE FANNIE FREDDIE FANNIE FREDDIE
Fixed/Floating Fixed Fixed Fixed Fixed Floating Floating
Description 7yr Tier 2 7yr CME Fixed 10yr Tier 2 10yr CME Fixed 7/6 ARM 7yr CME ARM
Amortization 30 years 30 years 30 years 30 years 30 years 30 years
Interest Only Up to 1yr Up to 2yrs Up to 5yrs Up to 5yrs Up to 1yr Up to 2yrs
Loan Amount $7,044,000 $7,229,000 $6,913,000 $7,077,000 $6,292,000 $7,229,000
Estimated Rate 4.49%-4.59% 4.27%-4.37% 4.65%-4.75% 4.45%-4.55% 3.45%-3.55% 3.46%-3.56%
Investment SummaryPrice $12,000,000
Current Cap Rate 5.0%
Market Cap Rate 6.5%
Post-Reno Cap Rate 6.8%
Address 2811 Cold Springs Road Placerville, CA 95667
Year Built 1971
Total # of Units 101
Avg Unit Size 776
Net Rentable SF 78,384
# of Acres 11.47 (8.8 du/ac)
Parking Spaces 157 (1.55)
Avg In-Place Rent $1,010
Avg In-Place Rent PSF $1.30
Avg Market Rent $1,165
Avg Market Rent PSF $1.50
Avg Post-Reno Rent $1,223
Avg Post-Reno Rent PSF $1.58
Occupancy (May-17) 99.0%
Unit MixUNIT TYPE
# OF UNITS
AVG SF
% OF TOTAL
IN-PLACE RENT
MARKET RENT
POST-RENO RENT
1x1 30 628 29.7% $863 $995 $1,095
1x1 (Renovated) 6 628 5.9% $948 $1,095 $1,095
2x1 23 824 22.8% $940 $1,150 $1,250
2x1 (Renovated) 21 824 20.8% $1,107 $1,250 $1,250
3x1 6 896 5.9% $1,120 $1,275 $1,375
3x1 (Renovated) 14 896 13.9% $1,232 $1,375 $1,375
House 1 1,600 1.0% $1,600 $1,600 $1,600
Unrenovated 60 746 59.4% $931 $1,093 -
Renovated 41 820 40.6% $1,126 $1,270 -
Total/Avg 101 776 100.0% $1,010 $1,165 $1,223
40 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
F I N A N C I A L A N A LYS I SSTRICTLY CONFIDENTIAL
Woodridge
T1 Annualized Income All Units at Market Rent All Units at Post-Renovation Rent Total Per Unit % Total Per Unit % Total Per Unit %
OPERATING REVENUE Mkt Mkt Mkt Potential Market Rent $ 1,411,440 $ 13,975 100.00% $ 1,411,440 $ 13,975 100.00% $ 1,482,240 $ 14,676 100.00% (Loss to Lease) / Gain to Lease ($ 185,640) ($ 1,838) (13.15%) ‐ ‐ ‐ ‐ ‐ ‐ Gross Potential Revenue $ 1,225,800 $ 12,137 86.85% $ 1,411,440 $ 13,975 100.00% $ 1,482,240 $ 14,676 100.00%
Vacancy (incl. Renovation Downtime) ($ 18,540) ($ 184) (1.31%) ($ 70,572) ($ 699) (5.00%) ($ 74,112) ($ 734) (5.00%) Base Rental Revenue $ 1,207,260 $ 11,953 85.53% $ 1,340,868 $ 13,276 95.00% $ 1,408,128 $ 13,942 95.00%
Expense Reimbursements ‐ ‐ ‐ $ 60,600 $ 600 4.29% $ 60,600 $ 600 4.09% Other Residential Income $ 23,594 $ 234 1.67% $ 23,594 $ 234 1.67% $ 23,594 $ 234 1.59% Other Income $ 23,594 $ 234 1.67% $ 84,194 $ 834 5.97% $ 84,194 $ 834 5.68%
EFFECTIVE GROSS REVENUE $ 1,230,854 $ 12,187 87.21% $ 1,425,062 $ 14,110 100.97% $ 1,492,322 $ 14,775 100.68%
T12 Expenses w/ Reassessed Taxes T12 Expenses w/ Reassessed Taxes T12 Expenses w/ Reassessed Taxes OPERATING EXPENSES EGR EGR EGR Repair & Maintenance $ 36,891 $ 365 3.00% $ 36,891 $ 365 2.59% $ 36,891 $ 365 2.47% Contract Services $ 22,617 $ 224 1.84% $ 22,617 $ 224 1.59% $ 22,617 $ 224 1.52% Personnel $ 148,396 $ 1,469 12.06% $ 148,396 $ 1,469 10.41% $ 148,396 $ 1,469 9.94% Marketing / Advertising $ 6,425 $ 64 0.52% $ 6,425 $ 64 0.45% $ 6,425 $ 64 0.43% Administrative Expenses $ 12,650 $ 125 1.03% $ 12,650 $ 125 0.89% $ 12,650 $ 125 0.85% Turnover / Make‐Ready $ 18,387 $ 182 1.49% $ 18,387 $ 182 1.29% $ 18,387 $ 182 1.23% Electricity $ 15,215 $ 151 1.24% $ 15,215 $ 151 1.07% $ 15,215 $ 151 1.02% Fuel (Gas & Oil) $ 56,470 $ 559 4.59% $ 56,470 $ 559 3.96% $ 56,470 $ 559 3.78% Water & Sewer $ 66,474 $ 658 5.40% $ 66,474 $ 658 4.66% $ 66,474 $ 658 4.45% Other Utilities $ 36,786 $ 364 2.99% $ 36,786 $ 364 2.58% $ 36,786 $ 364 2.47% Insurance $ 20,080 $ 199 1.63% $ 20,080 $ 199 1.41% $ 20,080 $ 199 1.35% Real Estate Taxes $ 127,956 $ 1,267 10.40% $ 127,956 $ 1,267 8.98% $ 127,956 $ 1,267 8.57% Other Property Taxes $ 1,218 $ 12 0.10% $ 1,218 $ 12 0.09% $ 1,218 $ 12 0.08% Property Management Fee $36,926 $ 366 3.00% $42,752 $ 423 3.00% $44,770 $ 443 3.00%
TOTAL OPERATING EXPENSES $ 606,491 $ 6,005 49.27% $ 612,317 $ 6,063 42.97% $ 614,335 $ 6,083 41.17%
NET OPERATING INCOME Net Operating Income (bef. Reserves) $ 624,363 $ 6,182 50.73% $ 812,745 $ 8,047 57.03% $ 877,987 $ 8,693 58.83% Replacement Reserves $ 30,300 $ 300 2.46% $ 30,300 $ 300 2.13% $ 30,300 $ 300 2.03%
NET OPERATING INCOME (AFT. RESERVES) $ 594,063 $ 5,882 48.26% $ 782,445 $ 7,747 54.91% $ 847,687 $ 8,393 56.80%
METRICS Purchase Price $12,000,000 $12,000,000 $12,468,317 Cap Rate 5.0% 6.5% 6.8%
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* Includes $468,318 renovation cost
*
41 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
F I N A N C I A L A N A LYS I S
10 Year Cash Flow Projections (Trended)
STRICTLY CONFIDENTIAL
Woodridge Property Cash Flow Projections Placerville, CA
Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 Jul-24 Jul-25 Jul-26 Jul-27Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
ANNUAL OPERATING CASH FLOW
OPERATING REVENUE Potential Market Rent $ 1,411,440 $ 1,453,783 $ 1,497,397 $ 1,542,319 $ 1,588,588 $ 1,636,246 $ 1,685,333 $ 1,735,893 $ 1,787,970 $ 1,841,609 Renovation Premium $ 13,000 $ 38,110 $ 64,025 $ 77,365 $ 79,686 $ 82,077 $ 84,539 $ 87,075 $ 89,687 $ 92,378 (Loss to Lease) / Gain to Lease ($ 102,560) ($ 45,105) ($ 38,430) ($ 37,719) ($ 38,331) ($ 39,355) ($ 40,505) ($ 41,712) ($ 42,962) ($ 44,250) Gross Potential Revenue $ 1,321,880 $ 1,446,789 $ 1,522,992 $ 1,581,964 $ 1,629,943 $ 1,678,968 $ 1,729,367 $ 1,781,256 $ 1,834,695 $ 1,889,737
Vacancy ($ 71,222) ($ 74,595) ($ 78,071) ($ 80,984) ($ 83,414) ($ 85,916) ($ 88,494) ($ 91,148) ($ 93,883) ($ 96,699) Renovation Downtime ($ 10,969) ($ 11,489) ($ 11,423) ‐ ‐ ‐ ‐ ‐ ‐ ‐ Concessions ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Non‐Revenue Units ($ 15,138) ($ 15,855) ($ 16,594) ($ 17,213) ($ 17,729) ($ 18,261) ($ 18,809) ($ 19,373) ($ 19,955) ($ 20,553) Collection Loss / Bad Debt ($ 6,123) ($ 6,724) ($ 7,085) ($ 7,419) ($ 7,644) ($ 7,874) ($ 8,110) ($ 8,354) ($ 8,604) ($ 8,862) Base Rental Revenue $ 1,218,428 $ 1,338,126 $ 1,409,820 $ 1,476,348 $ 1,521,156 $ 1,566,916 $ 1,613,954 $ 1,662,380 $ 1,712,253 $ 1,763,621
Expense Reimbursements $ 60,600 $ 62,115 $ 63,668 $ 65,259 $ 66,891 $ 68,563 $ 70,277 $ 72,034 $ 73,835 $ 75,681 Other Residential Income $ 24,184 $ 24,788 $ 25,408 $ 26,043 $ 26,694 $ 27,362 $ 28,046 $ 28,747 $ 29,466 $ 30,202 Other Income $ 84,784 $ 86,903 $ 89,076 $ 91,303 $ 93,585 $ 95,925 $ 98,323 $ 100,781 $ 103,301 $ 105,883
EFFECTIVE GROSS REVENUE $ 1,303,212 $ 1,425,029 $ 1,498,896 $ 1,567,651 $ 1,614,741 $ 1,662,841 $ 1,712,277 $ 1,763,161 $ 1,815,554 $ 1,869,505
OPERATING EXPENSES Repair & Maintenance ($ 37,813) ($ 38,759) ($ 39,728) ($ 40,721) ($ 41,739) ($ 42,782) ($ 43,852) ($ 44,948) ($ 46,072) ($ 47,224) Contract Services ($ 23,182) ($ 23,762) ($ 24,356) ($ 24,965) ($ 25,589) ($ 26,229) ($ 26,885) ($ 27,557) ($ 28,246) ($ 28,952) Turnover / Make‐Ready ($ 18,847) ($ 19,318) ($ 19,801) ($ 20,296) ($ 20,803) ($ 21,323) ($ 21,856) ($ 22,403) ($ 22,963) ($ 23,537) Personnel ($ 152,106) ($ 155,909) ($ 159,806) ($ 163,801) ($ 167,896) ($ 172,094) ($ 176,396) ($ 180,806) ($ 185,326) ($ 189,959) Marketing / Advertising ($ 6,586) ($ 6,750) ($ 6,919) ($ 7,092) ($ 7,269) ($ 7,451) ($ 7,637) ($ 7,828) ($ 8,024) ($ 8,225) Administrative ($ 12,966) ($ 13,290) ($ 13,623) ($ 13,963) ($ 14,312) ($ 14,670) ($ 15,037) ($ 15,413) ($ 15,798) ($ 16,193) Utilities ($ 179,319) ($ 183,802) ($ 188,397) ($ 193,107) ($ 197,934) ($ 202,883) ($ 207,955) ($ 213,153) ($ 218,482) ($ 223,944) Insurance ($ 20,582) ($ 21,097) ($ 21,624) ($ 22,165) ($ 22,719) ($ 23,287) ($ 23,869) ($ 24,466) ($ 25,077) ($ 25,704) Real Estate Taxes ($ 129,174) ($ 131,764) ($ 134,405) ($ 137,100) ($ 139,849) ($ 142,652) ($ 145,512) ($ 148,429) ($ 151,405) ($ 154,441) Property Management Fee ($ 39,096) ($ 42,751) ($ 44,967) ($ 47,030) ($ 48,442) ($ 49,885) ($ 51,368) ($ 52,895) ($ 54,467) ($ 56,085)
TOTAL OPERATING EXPENSES ($ 619,671) ($ 637,201) ($ 653,625) ($ 670,239) ($ 686,553) ($ 703,256) ($ 720,367) ($ 737,898) ($ 755,860) ($ 774,264)
NET OPERATING INCOME Net Operating Income (bef. Reserves) $ 683,540 $ 787,829 $ 845,270 $ 897,412 $ 928,189 $ 959,585 $ 991,910 $ 1,025,263 $ 1,059,694 $ 1,095,241 Replacement Reserves ($ 30,300) ($ 31,058) ($ 31,834) ($ 32,630) ($ 33,446) ($ 34,282) ($ 35,139) ($ 36,017) ($ 36,918) ($ 37,841)
NET OPERATING INCOME (AFT. RESERVES) $ 653,240 $ 756,771 $ 813,436 $ 864,782 $ 894,743 $ 925,304 $ 956,772 $ 989,246 $ 1,022,777 $ 1,057,400
CAPITAL EXPENDITURES Unit Renovations ($ 155,000) ($ 158,875) ($ 154,442) ‐ ‐ ‐ ‐ ‐ ‐ ‐
TOTAL CAPITAL EXPENDITURES ($ 155,000) ($ 158,875) ($ 154,442) ‐ ‐ ‐ ‐ ‐ ‐ ‐ Paid from Amount Funded Upfront $ 155,000 $ 158,875 $ 154,442 ‐ ‐ ‐ ‐ ‐ ‐ ‐
OPERATING CASH FLOW $ 653,240 $ 756,771 $ 813,436 $ 864,782 $ 894,743 $ 925,304 $ 956,772 $ 989,246 $ 1,022,777 $ 1,057,400
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42 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
F I N A N C I A L A N A LYS I S
Potential Market Rent: Represents all 101 units at the ARA market rents. We assumed 3% market rent growth at the end of year 1 and throughout the hold period.
Renovation Premium: We assumed that the remaining 60 unrenovated units would be renovated over a three year period, and we assumed an average renovation premium of $100 per unit per month.
Loss-to-Lease: We performed a roll-over analysis to analyze the loss-to-lease over the hold period, and concluded a 7.2% loss-to-lease in year 1, declining to 3.02% in year 2, 2.46% in year 3, and 2.30% in all remaining years. These numbers were concluded based upon the roll-over schedule, a maximum renewal increase of 10%, and a 50% renewal rate assumption.
Vacancy: Base vacancy rate of 5%, plus additional vacancy of 0.77% in year 1, 0.77% in year 2, and 0.73% in year 3 to account for renovation downtime (assuming 14 days of renovation downtime for each unit).
Concessions: No concessions are being offered at the property.
Non-Revenue Units: One non-revenue 2x1 unit at market rent.
Collection Loss / Bad Debt: Collection loss of 0.50% of base rental revenue.
Expense Reimbursements: Assumes the implementation of a RUBS program at $50 per unit per month in year 1.
Other Income: Based on T12 performance and grown at 2.5% in year 1 and throughout the hold period.
Repairs & Maintenance: Projected at $37,813 in year 1, or $374 per unit per year. All expenses (unless otherwise notified) are grown at 2.5% throughout the hold period.
Contract Services: Projected at $23,182 in year 1, or $230 per unit per year, which is based on the T12 performance grown at 2.5%.
Personnel: Projected at $152,106 in year 1, or $1,506 per unit per year, which is based on the T12 performance grown at 2.5%.
Marketing / Advertising: Projected at $6,586 in year 1, or $65 per unit per year, which is based on the T12 performance grown at 2.5%.
Administrative Expenses: Projected at $12,966 in year 1, or $128 per unit per year, which is based on the T12 performance grown at 2.5%.
Turnover / Make-Ready: Projected at $18,847 in year 1, or $187 per unit per year, which is based on the T12 performance grown at 2.5%.
Electricity: Projected at $15,595 in year 1, or $154 per unit per year, which is based on the T12 performance grown at 2.5%.
Fuel (Gas): Projected at $57,882 in year 1, or $573 per unit per year, which is based on the T12 performance grown at 2.5%.
Water & Sewer: Projected at $68,136 in year 1, or $675 per unit per year, which is based on the T12 performance grown at 2.5%.
Other Utilities (Trash): Projected at $37,706 in year 1, or $373 per unit per year, which is based on the T12 performance grown at 2.5%. This includes trash charges.
Insurance: Projected at $20,582 in year 1, or $204 per unit per year, which is based on the T12 performance grown at 2.5%. This includes trash charges.
Property Taxes: Real estate taxes will be reassessed upon the sale at a millage rate of 1.0663%. Special assessments totaling $1,218 have been separated.
Management Fee: 3.0% of effective gross revenue.
Capital Reserves: $300 per unit in year 1 and grown at 2.5%.
DETAILED INCOME NOTES
Notes to Pro Forma
DETAILED EXPENSE NOTES
43 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
F I N A N C I A L A N A LYS I S
Debt QuoteAGENCY FANNIE FREDDIE FANNIE FREDDIE FANNIE FREDDIE
Fixed/Floating Fixed Fixed Fixed Fixed Floating Floating
Description 7yr Tier 2 7yr CME Fixed 10yr Tier 2 10yr CME Fixed 7/6 ARM 7yr CME ARM
Loan Term 7 Yrs 7 Yrs 10 Yrs 10 Yrs 7 Yrs 7 Yrs
Amortization 30 years 30 years 30 years 30 years 30 years 30 years
Interest Only Up to 1yrs I/O Up to 2yrs I/O Up to 5yrs I/O Up to 5yrs I/O Up to 1yrs I/O Up to 2yrs I/O
Loan Amount $7,044,000 $7,229,000 $6,913,000 $7,077,000 $6,292,000 $7,229,000
Index 7yr Treasury 7yr Treasury 10yr Treasury 10yr Treasury 30 day LIBOR 30 day LIBOR
Index Value* 2.02% 2.02% 2.20% 2.20% 1.12% 1.12%
Spread* 2.42%-2.52% 2.20%-2.30% 2.40%-2.50% 2.20%-2.30% 2.28%-2.38% 2.29%-2.39%
Estimated Rate 4.49%-4.59% 4.27%-4.37% 4.65%-4.75% 4.45%-4.55% 3.45%-3.55% 3.46%-3.56%
Stressed UW Rate (Fannie)/Max Note Rate (Freddie) NA NA NA NA 7.63% 6.00%
UW Floor Rate 5.50% NA 5.00% NA NA NA
Min UW DSCR 1.25x 1.25x 1.25x 1.25x NA NA
Actual DSCR at UW Floor (1) 1.11x NA 1.20x NA NA NA
Min DSCR at Stressed Rate NA NA NA NA 1.00x 1.00x
Strike Rate NA NA NA NA N/A 3.66%
Initial Cap Term NA NA NA NA Full term cap 3 years
Upfront LIBOR Cap Cost (bps) NA NA NA NA Embedded 25 bps
Estimated LIBOR Cap Escrow (bps/year) NA NA NA NA Embedded 6.7 bps
Prepayment Terms (yrs yield maintenance) (2) 6.5yrs YM CME 9.5yrs YM CME 1yr LO, 1% 1yr LO, 1%
RR, Tax, Ins Escrows Required Required Required Required Required Required
Freddie Mac Application Fee (if applicable) NA 0.10% NA 0.10% NA 0.10%
Mitch Clarfield | Senior Managing Director | Berkeley Point Capital | 310.255.1233 | [email protected]
*Subject to change based on market conditions
(1) DSC below 1.25 requires Fannie Mae waiver approval.
(2) Freddie Mac CME prepayment: yield maintenance until securitization, followed by 2-year lockout; defeasance thereafter. No prepayment premium is due during the final 90 days of the loan term.
44 W O O D R I D G E E A S T O F F E R I N G M E M O R A N D U M
LOCATION OVERVIEW
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The City of Placerville is centrally located in the Sierra Nevada foothills between Sacramento and Lake Tahoe. The city is home to more than 10,000 residents and is the county seat of El Dorado County, California. Placerville is a quaint, California “gold rush” town serving as a hub for many nearby destinations and activities. The city is well known for its premier wineries, apple orchards, the American River and the El Dorado National Forest, which are all located within minutes of downtown Placerville. The city center, known as “Old Hangtown,” is comprised of historical landmarks, boutique shops, and a charming ambiance with a plethora of shopping and dining locations. Placerville enjoys an ideal California climate with four distinct seasons characterized by cool, wet winters and hot, dry summers.
Placerville
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ROUTEROUTE
5050
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5050
Placerville Dr
Prospetor’s Plaza
Median SFR: $415k
N Sacramento • 215,000 jobs • 34 miles
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5 MILES 10 MILES 15 MILES
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The average annual household income within a five-mile radius of Woodridge East is approximately $76,000, and jumps 37% to $104,400 per annum within a 15-mile radius of the property. According to Esri, average household income is expected to grow 1.44% per year for the next five years within five miles of the property.
Demographics
Demographic Comparison
2016 Summary 5 Miles 10 Miles 15 Miles
Population 31,829 75,812 151,081
Households 12,854 29,989 57,172
Families 8,506 21,142 42,534
Avg Household Size 2.42 2.50 2.62
Owner Occupied Housing 67.6% 72.7% 76.9%
Renter Occupied Housing 32.4% 27.3% 23.1%
Median Age 47.4 47.7 45.9
Median Household Income $56,509 $66,417 $78,241
Average Household Income $75,997 $87,926 $104,402
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31,829POPULATION
$75,997AVG. HOUSEHOLD
INCOME
WITHIN A 5-MILE RADIUS
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El Dorado County Demographics
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In 2016, the median home value in Placerville was $328,700, up 14.2% over the past year (with an expectation of 6.5% growth in 2017). Woodridge East is located in an especially affluent neighborhood within Placerville, flanked by homes with values north of $600,000. As a whole, the surrounding neighborhood has a median home value of $415,000. With more and more residents unable to afford the costs associated with home ownership, let alone the equity required to make an initial down payment, rental rates for quality multifamily apartment homes will continue to flourish.
Housing
Woodridge’s close proximity to a number of public and private schools, which are some of the best in the area, is an attractive aspect of the property. These schools include Sierra Elementary (890 API), Indian Creek Elementary (864 API), Herbert C. Green Middle School (823 API), Edwin Markham Middle School (817 API), Union Mine High (802 API), and El Dorado High (780 API). For higher education, Folsom Lake College is a public community college offering associate degrees and certificates in 17 different fields. The school was built in 1993 and, due to tremendous growth in the region, the campus includes over 240,000 square feet of state-of-the-art space and hosts an enrollment of more than 8,700 students.
Schools
SIERRA ELEMENTARY
FOLSOM LAKE
COLLEGE
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5050
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49
49
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Transportation
U.S. Highway 50: This is the major east-west route in the area, and is situated just 0.7 miles from Woodridge East. Highway 50 runs through Placerville and connects Downtown Sacramento to the El Dorado National Forest and South Lake Tahoe. Woodridge East residents can access downtown Sacramento in just 30 minutes and Lake Tahoe in just over an hour.
CA Highway 49: Route 49’s number designation pays homage to the historical 1849 Gold Rush areas through which the road passes. This is the major north-south route, which lies just one mile from Woodridge East, runs through El Dorado County, leading north to Nevada County and south to the Sierra National Forest.
Public Transit: Woodridge East is located just 2.5 miles away from the Placerville Station Transit Center. Residents enjoy immediate and daily access to the Amtrak Thruway Connecting Service, which is a bus line that runs along Highway 50 both west to Sacramento and east to South Lake Tahoe.
DRIVE TIMES
Miles Minutes
Downtown Placerville 1.7 miles 5 min
Downtown Sacramento 43 miles 50 min
South Lake Tahoe 61 miles 90 min
San Francisco 128 miles 2 hrs 15 min
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Residents of Placerville enjoy an abundance of natural beauty and outdoor activities situated on the scenic Route 50, and are just 65 miles away from Lake Tahoe. On top of being one of the largest lakes in the country, Lake Tahoe boasts one of the largest concentrations of ski resorts in the world. Tahoe is home to 14 world-class ski resorts with over 22,000 acres of skiing and snowboarding adventures.
Outside of the ski season, Lake Tahoe is great for outdoor recreational activities including water sports, hiking, biking, camping and fishing. Residents of Woodridge East have easy access to some of the most renowned mountain biking in the country. Lake Tahoe’s world-famous North Star Bike Park in Truckee and Tahoe Rim Trail in Tahoe City are consistently voted among the top biking trails every year.
Woodridge East is conveniently located just off Highways 49 and 50, making it very accessible. The property is situated just 34 miles from Sacramento, the state capital. The vibrant downtown area of Sacramento has hundreds of upscale stores, cafes, restaurants and bars, as well as sporting venues and performing arts centers. The brand new Golden 1 Center is home to the Sacramento Kings, and hosts hundreds of entertainment events each year.
Recreation
ARA Newmark San Francisco 655 Montgomery St., Suite 1705
San Francisco, CA 94111
ARA Newmark Sacramento 980 9th Street, Suite 2500
Sacramento, CA 95814
Nate Oleson License CA: 01467941
916.599.6523
Mark LearyLicense CA: 01177579
916.764.4191
Marc AndenmattenLicense CA: 01956176
916.835.8844
Rob LeDoux License CA: 01816798
415.430.1047