offering memorandum springville apartments...hobble creek golf course 5.7 miles hobble creek canyon...

251 East 300 South | Springville, Utah 84663Offering Memorandum

SPRINGVILLE APARTMENTS

Colliers International111 Main Street | Suite 2200

Salt Lake City, UT 84111P: +1 801 947 8300

+801 441 [email protected]

Rawley Nielsen+1 801 448 [email protected]

Darren Nielsen

HISTORIC 12UNITAPARTMENT BUILDING

Consisting of (11) one-bed

and (1) studio floor plans in one of the hottest economic

and rental real estate markets in the country.

PRICE REDUCED

COLLIERS INTERNATIONAL P. 2Springville Apartments | Offering Memorandum

Table of Contents

> Executive Summary..................................................................3Investment Overview .......................................................................................... 4

Aerial Map ............................................................................................................ 5

Aerial Map ............................................................................................................ 6

Area Highlights .....................................................................................................7

> Market Overview .......................................................................9Multifamily Rental Market Overview ..................................................................10

Demographics ......................................................................................................11

Market Rent Survey ..........................................................................................12

Market Rent Survey ..........................................................................................13

Proforma .............................................................................................................14

Rent Roll .............................................................................................................15

Springville Retail Aerial ......................................................................................16

Region Map | Utah County ................................................................................. 17

SPRINGVILLE APARTMENTSOffering Memorandum

COLLIERS INTERNATIONAL

> Executive Summary


EXECUTIVE SUMMARY

Investment Overview> SPRINGVILLE APARTMENTS

Springville Apartments at 251 East 300 South in Springville, Utah is a historic 12-unit apartment building consisting of 11 one-bed and 1 studio floor plans. Springville is located just south of the Provo-Orem city limits and is only 5-10 miles from both Brigham Young University and Utah Valley University.

This 3-story multifamily apartment building, built in 1914, consists of 11 one-bedroom and 1 studio apartment, composing approximately 8,957 total rentable square feet.

With its location in Utah County, this Springville property enjoys one of the hottest economic and rental real estate markets in the country. Additionally, this property is located just steps away from incredible outdoor recreation, popular restaurants and a wide variety of fun and enjoyable community locations and events.

Total Square Feet:

8957 sq. ft. (3 stories & 1 basement)3138 sq. ft. (Equipment Shop)

Unit Mix: 11 One-Bedroom 1 Studio

Property Exterior:

Masonry Brick - 2 storiesVinyl Siding - 1 story

Property Interior: Drywall

Roof: Pitched Gabel RoofComposition Shingles

Foundation: Concrete

Storage Units: 12 storage units

Parking: 20 parking spacesNew parking lot in 2017

Laundry: On site laundry roomCoin-op laundry machines

Boiler: New in 2018Under warranty

Purchase Price:

$1,150,000.00 $1,050,000.00

2019 Cap Rate: 5.83%

Address: 251 East 300 South,Springville, Utah 84663

Parcel Number: 060150003

Property Type: Multifamily

Unit Count: 12 Units

Property Age:

1914 – Build DateVarious renovationsTop floor built in 1960’s

Lot Size: 0.6 Acres (26,136 sq. ft.)

Stories: 3 Stories - above grade1 Basement


EXECUTIVE SUMMARY

Aerial Map


EXECUTIVE SUMMARY

Aerial Map

SPRINGVILLE

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This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from.

This publication is the copyrighted property of Colliers International and/or its licensor(s). ©2018. All rights reserved.Produced by: brandon.dalton | Springville_POI 9/11/2018

111 S. Main St.Suite 2200Salt Lake City, UT 84111

+1 801 441 5937colliers.com

SITE


EXECUTIVE SUMMARY

Area HighlightsNEARBY DESTINATIONS DISTANCE

A Cherry Creek Elementary 0.2 Miles

B Springville Museum of Art 0.2 Miles

C Memorial Park 0.4 Miles

D Ginger’s Garden Cafe 0.4 Miles

E Brookside Elementary 0.5 Miles

F Springville Public Library 0.5 Miles

G Spring Creek Park 1.2 Miles

H The Meat Pie Bakery 1.3 Miles

I Springville Jr. High 1.5 Miles

J Springville High School 1.6 Miles

K Legends Motorcycles Emporium 2.2 Miles

L Sidecar Cafe 2.2 Miles

Hobble Creek Golf Course 5.7 Miles

Hobble Creek Canyon 5.9 Miles

M Blue Island Resort 6.2 Miles

N Provo City Center Temple 6.3 Miles

O Provo Towne Centre 6.4 Miles

P Brigham Young University 7.2 Miles

Q Provo Municipal Airport 8.9 Miles

R Utah Lake State Park 10.7 Miles

S Utah Valley University 11.1 Miles

Sundance Mountain Resort 21.1 Miles

SLC International Airport 56 Miles

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Photo Gallery

SPRINGVILLE APARTMENTSOffering Memorandum

COLLIERS INTERNATIONAL

> Market Overview


MARKET SUMMARY

Multifamily Rental Market Overview> 2017 UTAH COUNTY MULTIFAMILY RENTAL MARKET HIGHLIGHTS:

• Vacancy rate of 4.2%

• Average rental rate of $1,142 – higher than Salt Lake County

• Rental rates increased by 7.9% to an average of $1.17 per square foot

• Large communities reported an average vacancy rate of 5%; almost double small and midsized apartment vacancy

• Only 11% of communities surveyed offered concessions

• More units have been developed in the past five years than the previous 10 years combined

• Since 2000, Utah County’s average growth rate has been 3.1% (compared to the state’s rate of 2%)

• During the past five years, the average annual growth rate in jobs has been 5%

> RENTAL RATE AND VACANCY SURVEY:

As of 2017, the Utah County rental market had an estimated 55,000 rental units. About one out of every four units falls into the category of BYU-approved student housing. The remaining 42,000 units target the traditional rental market of single-person and family households. However, of these 42,000 units, about half are single-family homes, basement apartments, or duplexes. The other 22,000 units are in apartment communities of between 3 to 350 units.

As a result of exceptionally strong demographic and economic growth, Utah County continues to drive some of the highest rental rates in the state (on average, 13 % higher than Salt Lake County), while also maintaining relatively low vacancy rates.

> RENTAL MARKET OUTLOOK:

The completion of several large apartment projects over the past 18 months has led to a modest increase

in the vacancy rate. Although vacancy remain below 4.5%, it will likely increase by year-end 2018 due to the uptick in construction activity in 2017.

Despite the increase in vacancy rates, rental rates moved up by nearly 8% during 2017 (nearly a 13% premium

compared to Salt Lake County). These tight conditions are expected to persist, putting upward pressure on rental rates. Over the next 12 months, it is anticipated that rental rates will increase 4-6%, and that the vacancy rate will remain stable at 4.5%.


MARKET SUMMARY

Demographics> SPRINGVILLE CITY > UTAH COUNTY


MARKET SUMMARY

Market Rent Survey > RENT COMPARABLES BY BEDROOM

One Bed

$639Two Bed

$686Three Bed

$817


MARKET SUMMARY

Market Rent Survey > ONE BEDROOM RENT COMPARABLES

> ASKING RENT CHANGE | PAST QUARTER & YEAR - ONE BEDROOM

> ONE BEDROOM ASKING RENT PER SQUARE FOOT


MARKET SUMMARY

Proforma

ACTUAL ACTUAL

CURRENT

RENTS

INCOME 2016 2017 2018 2019 2020 2021 2022

Rent Income $78,821 $79,204 $88,587.00 $91,800 $94,554 $97,391 $100,312 Income Growth 3.0%Less: Vacancy 4% ($3,213) ($3,309) ($3,409) ($3,511) Expense Growth 2.0%

EFFECTIVE RENTAL INCOME $78,821 $79,204 $88,587 $88,587 $91,245 $93,982 $96,801Laundry/vending $781 $804 $828 $853 $878

Late Fee $2,061 $2,123 $2,187 $2,252 $2,320 2018 - MONTHLY RENT - ACTUAL 2018 - Actual Rent Roll 2018 - ANNUALIZED RENTGass Pass Thru $4,892 $5,039 $5,190 $5,345 $5,506 Jan to May June to Sept Oct to Dec

Electric Pass Thru $293 $302 $311 $321 $330 $6,712.63 $7,240.00 $7,650.00Storage Income $5,760 $5,933 $6,111 $6,294 $6,483 Total Other Income $3,546 $6,362 $13,787 $14,200 $14,626 $15,065 $15,517 $33,563.15 $28,960.00 $22,950.00EFFECTIVE GROSS INCOME $82,367 $85,566 $102,374 $102,787 $105,871 $109,047 $112,318

EGI Per Unit $6,864 $7,130 $8,531 $8,566 $8,823 $9,087 $9,360 $85,473.15

$3,114EXPENSES

Controllable Utah County Assessor - Annual Property Tax Leasing and Advertising $0 $25 $25 $26 $26 $27 $27 2017 - Property Tax $4,795.00 General & Administrative $740 $795 $934 $952 $971 $991 $1,011 2016 - Propety Tax $4,779.00 Payroll $0 $0 $0 $0 $0 $0 $0 2015 - Property Tax $4,065.00

Make Ready 450$ $7,222 $7,369 $4,903 $5,001 $5,101 $5,203 $5,307 Maintenance and Grounds $8,425 $11,199 $8,572 $8,743 $8,918 $9,097 $9,279 Management Fee 3.5% $6,662 $6,845 $6,845 $6,982 $7,122 $7,264 $7,410 4020 Reserves 250$ $0 $0 $0 $0 Non-Controllable Property Tax $4,779 $4,795 $4,795 $4,891 $4,989 $5,088 $5,190

Property Insurance 225$ $2,949 $2,622 $2,674 $2,728 $2,782 $2,838 $2,895 10.31.18 - Calc Updates: Gross Utility Expense $12,096 $15,889 $12,415 $12,663 $12,916 $13,175 $13,438 Other Income Corrected calc that was doubling Other Income.TOTAL EXPENSES ($42,873) ($49,540) ($41,163) ($41,986) ($42,826) ($43,682) ($44,556) Rent Went from N-18 Actual Rent to Q4 Annualized Rent minus 3.5 vacancy

EXPENSES AS % OF EGI 52.05% 57.90% 40.21% 40.85% 40.45% 40.06% 39.67% VacancyExpenses Per Unit ($3,573) ($4,128) ($3,430) ($3,499) ($3,569) ($3,640) ($3,713) Maintenance and Grounds Annual Actual numbers were lower by 4K/yr.

Questions:NET OPERATING INCOME $39,494 $36,026 $61,211 $60,801 $63,045 $65,365 $67,762

Adjusted from 4% to 3.5%

251 East 300 South, Springville, Utah

PROFORMA - MARKET RENTS

Assumptions

> 251 EAST 300 SOUTH | SPRINGVILLE, UTAH


MARKET SUMMARY

Rent Roll

Unit # Floorplan Current Rent* Market Rent # of Pkg Spaces Move In

1 1/1 $650 $675 1 8/1/20162 1/1 $650 $675 1 8/1/20163 1/1 $650 $675 1 12/5/20184 1/1 $650 $675 1 8/1/20165 Studio $575 $600 1 12/14/20186 1/1 $650 $675 1 7/1/20177 Small 1/1 $600 $650 1 12/1/20188 1/1 $650 $675 1 8/1/20169 1/1 $650 $675 1 7/13/2018

10 1/1 $650 $675 1 8/27/201611 1/1 $625 $675 1 7/5/201812 1/1 $650 $675 1 10/16/2017

Monthly Income $7,650 $8,000Annual Income $91,800 $96,000

*Rents as of December 10, 2018

> 251 EAST 300 SOUTH | SPRINGVILLE, UTAH


MARKET SUMMARY

Springville Retail Aerial

SITE


MARKET SUMMARY

Region Map | Utah County

PAYSON

HEBER CITY

HERRIMAN

VINEYARD

DRAPER

PLEASANT GROVE

LEHI

SARATOGA SPRINGS

SALEM

RIVERTON

LINDON

ALPINE

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MAPLETON

MIDWAY

CEDAR FORT

EAGLE MOUNTAIN

BLUFFDALE

SPANISH FORK

AMERICAN FORK

SPRINGVILLE

PROVO

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