the granada - loopnet€¦ · the granada is a four-story apartment building centrally located in...

THE GRANADA32-Unit Apartment Building Located in an Opportunity Zone in Tacoma, WA

OFFERING MEMORANDUM

Table of Contents

Exclusively offered by

The information contained in the following Marketing Brochure 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 Marketing Brochure 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, current or past tax payments, 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 Marketing Brochure 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.

Brian RichardsonVice President [email protected]

kiddermathews.com

Offering SummaryExecutive Highlights Investment Overview

Location OverviewRegional OverviewTacoma OverviewOpportunity Zone Property Aerials Amenities Map Regional Employers Map

Property Map

Community DescriptionCommunity SummaryProperty Photos

Financials Unit MixCurrent Rents & ExpensesProforma Rents & Expenses

ComparablesSale Comparables Rent Comparables

01

02

03

04

05

06

THE GRANADA

Offering Summary

01

Executive Highlights

Investment Overview

THE GRANADA 3

THE GRANADA | OFFERING MEMORANDUM | KIDDER MATHEWS 4

EXECUTIVE HIGHLIGHTS

32 apartment homes

Convert Office back to 33rd unit for additional income

Potential to create additional storage lockers or bike storage

All units newly renovated with old world charm

Located in Downtown Tacoma

Has a Walkscore of 90

Walking distance to many of downtown Tacoma’s restaurants, boutiques, and nightlife

Walking distance to Bates Technical College and University of Washington Tacoma Campus

Located within Opportunity Zone

Three blocks from future Link Light Rail extension to open in 2022

Offering Summary

32 901926NUMBER OF UNITS WALK SCOREYEAR BUILT

INVESTMENT SUMMARY

$4,450,000PRICE

1# OF BUILDINGS

4# OF FLOORS

1926YEAR BUILT

LAND

6,500 SFAVG. UNIT SIZE

459 SF


INVESTMENT OVERVIEW

PROPERTY The Granada Apartments

ADDRESS 1224 S Yakima Ave, Tacoma, WA

PARCEL NUMBER 2012160080

PRICE $4,450,000

NUMBER OF UNITS 32 Apartments

YEAR CONSTRUCTED 1926

NUMBER OF FLOORS 4

NUMBER OF BUILDINGS 1

LAND AREA 6,500 SF

BUILDING SIZE 20,544 SF

ZONING R5


WW

RENT SUMMARY

UNIT TYPE # OF UNITS SIZEMONTHLY RENTS

RENTS/SF

1 Bedroom / 1 Bath 7 624 $1,137 $1.82

Urban 1 Bedroom / 1 Bath 7 484 $986 $2.04

Medium Studio 8 428 $974 $2.28

Small Studio 10 352 $929 $2.64

TOTAL / AVERAGE 32 459 SF $998 $2.31

COMMUNITY AMENITIES

Secure entry building

Onsite office

Security cameras

Recently replaced roof

New windows

New exterior and common area paint

Located on two major bus line routes

Common area seating lounge

APARTMENT HOME AMENITIES

Mix of studios and one bedroom apartment homes

Vinyl plank flooring in kitchens and bathrooms

New carpeting in living areas and bedrooms

New white and oak cabinets in units

New counter tops

New stainless steel appliances

New doors, hardware, trim, and 4” base

Upgraded lighting and fixtures

Select units with walk-in closets

The Granada is a four-story apartment building centrally located in downtown Tacoma that is also a designated Opportunity Zone. Its brick exterior and old world charm accentuates the early 20th century architecture displayed in similar buildings throughout the Tacoma area. The building offers a mix of one-bedroom and studio units that have all been recently renovated. The renovations for the exterior and common area include new windows, new exterior and common area paint, new secure entry doors, new common area flooring, and new roof. The unit renovations include new counter tops, new cabinetry, stainless steel appliances, upgraded lighting and fixtures, new paint, new flooring, new doors, new 4” base trim, and new hardware.

The Granada offers investors a turn-key asset in one of the top rent growth markets in the country. An investor can capitalize on increasing value through converting office back to a 33rd unit, and creating additional amenities such as storage lockers or bike storage and capturing the continued aggressive rent growth in the market.


Location Overview

02

Regional Overview

Tacoma Overview

Opportunity Zone

THE GRANADA 8


In addition to being the home of the third

largest city in Washington, Tacoma is located

approximately equidistant between Portland and

Seattle. This proximity to the two largest metro

areas in the Northwest has in part, lead to recent

development. First Industrial Trust completed

construction in nearby DuPont, building a 1 million

square foot fulfillment facility for Amazon.

Pierce County has been one of the fastest

growing counties in the state of Washington

since the 1960’s, and has consistently exceeded

the state’s overall rate of growth. Pierce County

supports manufacturers such as Boeing, Milgard

Manufacturing, James Hardie Building Products,

Toray Composites (America), Inc., and Medallion

Foods. Recreational Equipment, Inc. (REI),

Whirlpool, and Costco also have major distribution

centers here.

The majority of population increase has been

due to the migration of people into the County.

This continued migration is the result of Pierce

County’s relatively stable economy and exceptional

quality of life. The low-cost living, award-winning

education, and lifestyle opportunities, combined

with the area’s competitive cost of doing business,

create an outstanding environment for businesses

and residents to work, play, and live.

ECONOMY

Two words best describe the business climate

found in Pierce County’s economy: emerging

opportunity. In part, this is because of the county’s

strategic location at the mid-point between the

major metropolitan areas of the central Puget

Sound to the north, and Portland, Oregon to

the south.

The presence of the military exerts a stabilizing

influence on the Pierce County economy and

employs nearly 45,000 residents of Pierce County.

In the last several years, the county has noticed

quite a dramatic shift in the regional diversification

of its workforce. Professional services rank as

one of the leading components of industry. These

include a solid anchor of Intel, multiple web design

firms, and legal and consulting companies.

State jobs and public education employ roughly

20,000 residents. Medical services that provide

emergency and maintenance health care for

the surrounding five-county region. Traditional

manufacturing by many local producers that

captures a significant piece of their specific global

market. An emerging life sciences community has

grown in the region within the last five years.

Fort Lewis and Lewis-McChord Air Force Base

Joint Base Lewis-McChord (JBLM) is the largest

military installation in the western United States,

and the second largest employer in the entire

state of Washington. Its presence is recognized

throughout Pierce and Thurston Counties and

Washington State as a significant economic benefit

to the South Puget Sound. In turn, communities

surrounding JBLM enhance the quality of life

for military personnel and families by providing

high quality neighborhoods, schools, recreation

opportunities, and retail services. JBLM has

experienced significant population growth to

support its mission. Since 2003, nearly 40,000

people have arrived at JBLM and more continue to

arrive. The total military-connected population is

estimated at 210,000.

Location OverviewREGIONAL OVERVIEW


Port of Tacoma

The Port of Tacoma is an independent seaport

located on more than 2,400 acres of land that are

used for shipping terminal activity, warehousing,

distribution and manufacturing. The Port plays

the largest international trade role in the Pacific

Northwest, handling between nine and thirteen

million tons of cargo and more than $52 billion in

commerce. Major imports include automobiles,

electronics, and toys, while major exports include

grain, forest products, and agricultural products.

Based on tonnage, the Port’s largest export is grain

(corn and soybeans) that come into the port by rail

from the Midwest.

China/Hong Kong was also the top partner ranked

by volume imported and value imported. Japan

was the top partner ranked by volume exported

and value exported. The top commodities

exported, by value, were cereals and grains. The

top commodities imported, by value, were vehicles

and parts, followed by industrial machinery and

electronics. The port is among the top ten largest

container ports in North America. Containers hold

everything from computers and lawn furniture,

to apples and frozen meat. Based on container

volumes, China is the port’s largest trading partner.

More than 70 percent of the containers imported

through the port move by rail to markets in the

Midwest and East Coast. The port is served by

the BNSF Railway and Union Pacific railroads.

Shoreline rail service is provided by Tacoma Rail,

which is owned by the City of Tacoma. U.S. Oil

and Refining operates an oil refinery in the Port of

Tacoma. Oil tankers bring crude oil, which is refined

into a variety of products, including JP-8 jet fuel for

Lewis-McChord Field Air Force base. Port activities

are related to more than 50,000 jobs in Pierce

County, and 125,000 jobs in Washington.

HEALTH CARE HUB

Pierce County is home to six top-notch full-service

hospitals, Good Samaritan Hospital and Rehab

Center, Madigan Army Medical Center, St. Joseph

Medical Center, Saint Clare Hospital, St. Anthony

Hospital and Tacoma General Allenmore Hospital.

The area’s health care hub has hundreds of

clinical trials underway and a medical community

committed to research and collaboration with

local universities and other research institutions.

Numerous specialized medical clinics are located

throughout the region.

RECREATION OPPORTUNITIES

Puget Sound bays and outlets offer an abundance

of year-round outdoor recreational activities

such as sailing, fishing, canoeing, diving, and

kayaking. Numerous trails for biking and hiking

are conveniently located 120 miles away at Mt. St.

Helens, at Mt. Rainier which is 81 miles away, and

74 miles away at Ocean Shores. PGA level golf

courses and many other fine public and private

courses are also around the area. Entertainment

includes several of the Northwest’s largest

gaming casinos.

ART AND CULTURE

Pierce County is home to some of the most active

communities in Washington. Puyallup is home to

numerous fairs, festivals, museums, galleries, and

antique districts. Artists and performers showcase

their talents through live theater at Broadway

Center for the Performing Arts, Northwest

Sinfonietta, Tacoma Art Museum, Tacoma Opera,

and The Tacoma Symphony Orchestra.

EDUCATION

The quality of education in Pierce County is a

major draw to the South Puget Sound area. Pierce

County students consistently show educational

attainment levels exceeding both state and national

averages. 35% of Pierce County residents typically

hold bachelor or graduate degrees, and more than

ninety percent attain a high school or GED diploma.

Pierce County students also consistently achieve

SAT scores above state and national averages.


Pacific Lutheran University

Pacific Lutheran University is a private institution

that was founded in 1890. It has a total

undergraduate enrollment of 3,100 students.

Pacific Lutheran University’s ranking in the edition

of Best Colleges in Regional Universities (West),

was #14.

University of Puget Sound

University of Puget Sound is a private institution

that was founded in 1888. It has a total

undergraduate enrollment of 2,600. University

of Puget Sound’s ranking in the edition of Best

Colleges in National Liberal Arts Colleges, was

seventy-two.

Pierce College

Pierce College is designated an institutional

member of Servicemembers Opportunity Colleges

(SOC), a group of more than 1,800 colleges and

universities providing voluntary post-secondary

education to members of the military throughout

the world. Pierce College provides education

programs at Joint Base Lewis-McChord. These

programs are specifically designed to serve

the needs of active-duty military personnel,

their family members, VA benefit recipients,

and civilians in the community. Located on two

campuses in Pierce County, current student

enrollment is approximately 24,052.

EMPLOYMENT

The number of jobs in Pierce County totaled

approximately 302,800. The Auburn Boeing

Plant, opened in 1966, is the largest airplane

parts plant in the world with 2,100,000 square

feet and 1,265,000 parts manufactured each

year. With 5,179 employees, the Boeing plant

is the largest employer in the area. Many

businesses are small shops or small to medium

service businesses, including The World Vision

Headquarters, St. Francis Hospital, and United

States Postal Service. Numerous companies with

over 1,000 employees, including City of Tacoma,

Xerox Commercial Services, Muckleshoot Tribal

Enterprises, and Costco, are located in Pierce

County.

TOP EMPLOYERS

Rank Companies Employees

1 Joint Base Lewis-McChord 53,000

2 Multicare Health System 7,705

3 State of Washington 7,621

4 CHI Franciscan Health 6,786

5 City of Tacoma & TPU 3,591

6 Tacoma Public School 3,333

7 Pierce County Government 3,089

8 Puyallup School District 2,190

9 Emerald Queen Casino 2,165

10 Bethel School District 2,028

11 Safeway & Albertsons 1,680

12 State Farm Insurance 1,637

13 Boeing 1,550

14 Clover Park School District 1,446

15 Fred Meyer 1,364

16 US Postal Service 1,336

17 Good Will 1,243

18 Amazon Distribution Center 1,200

19 Walmart 1,192

20 Davita 1,184


GREATER SEATTLE AREA

Seattle is the largest city in the four-county

metropolitan area known as the Puget Sound

region. The area’s other major metropolitan cities

include Bellevue, Tacoma, Everett, and Bremerton.

Surrounding these are growing cities that include

Kirkland, Redmond, Kent, Renton, Bothell,

and Issaquah.

CLIMATE

The temperate climate lets residents and visitors

enjoy the outdoors year-round. High temperatures

in July average just 75 degrees, while low

temperatures drop below freezing an average

of only 15 days per year. The rainfall keeps the

region’s vegetation a lush green, however, it rarely

rains heavily and the total average rainfall is 35

inches, less than New York City or Miami.

OUTDOOR ACTIVITIES, CULTURE, SPORTS

The Seattle area’s natural beauty and mild climate

encourage year-round activities such as hiking in

the Olympic or Cascade Mountains, kayaking on

Lake Union, or cycling on any of the many rails-to-

trails paths.

Art and culture are also driving forces in the region.

There are 34 museums, 30 performing arts centers,

and—at last count—at least 29 professional

theatre companies.

Professional sports teams include major league

football and baseball as well as soccer and

hockey. The region’s professional football team,

the Seahawks, won the Super Bowl in 2013. In

addition, there is thoroughbred racing, minor

league baseball, and the University of Washington

Huskies to cheer on.

DEMOGRAPHICS

The region consists of approximately 4,285,020

(U.S. Census Bureau Estimate) residents in King,

Snohomish, Pierce, and Kitsap counties. The

current figure represents a 1.6% increase over

as the region added new people. This marks

the fourth consecutive year of increased annual

growth. Positive population growth in the region

is expected to continue through the end of the

forecast period.

The Seattle-Tacoma-Bellevue metropolitan

area (MSA) is clearly the economic engine of

Washington State. The MSA ranks 13th among 362

markets nationwide in terms of effective buying

income (EBI or after-tax, discretionary spending

power). The median household EBI in the Greater

Seattle Area is 20% higher than the

national median.

Approximately 56% of the population is in the

prime workforce age of 25-64. Residents are

among the most highly educated in the nation,

with more than 35% having at least a bachelor’s

degree and one-third of those holding a graduate

or professional degree.

Long-term forecasts call for the Greater Seattle

area to resume its historic strong growth patterns.

The Puget Sound Regional Council expects the

area to add approximately 855,000 new jobs

by 2040.

EDUCATION

Washington State is home to six public four-year

colleges and universities, 34 public community

and technical colleges, and more than 300 private

colleges, universities, career, and vocational

schools.


The University of Washington continues to gain

increased national recognition. According to

America’s Best Colleges, U.S. News & World

Report, the UW was ranked 52 among all national

universities, tied with University of Texas-Austin

and Pepperdine University. The U.S. News

graduate school rankings show many of the UW’s

graduate programs among the best in the nation.

The medical school ranked first among all schools

in the country for primary care and the School of

Nursing also retained its top ranking for the 27th

year. Overall the UW School of Medicine ranked

tenth among research medical schools and first

among public medical schools. The graduate

program in computer science ranked sixth and the

college of education graduate program

was seventh.

Seattle University is a Jesuit university situated

on 48 acres in Seattle’s First Hill and Capitol

Hill neighborhoods. The school was founded in

1891 and is the largest independent university in

the Pacific Northwest. The university has a total

enrollment of 54,000 students. Seattle University

employs 1,400 faculty and staff. The U.S. News

rankings place Seattle University 6th among the

top universities in the West that offer a full range of

masters and undergraduate programs.

TRANSPORTATION

King County has a well-developed transportation

system which provides links to all parts of the

country and world. Seattle’s port is closer to the

main trading partners in Asia than any other major

U.S. port and the region’s distribution networks

move goods efficiently inland.

The Puget Sound region’s multi-modal

transportation system includes two transcontinental

railroads, nationwide trucking capacity, three

interstate highways, a ferry system, a world-class

port and an international airport.

The Burlington Northern Santa Fe (BNSF) and

Union Pacific Southern Pacific (UPSP) railroad

serve the greater Seattle area. Both railroads have

spur lines that span the area, making it possible to

deliver almost any type of load. Outside of Puget

Sound and across the state, there are over 4,000

miles of operable track.

Truck transportation in Washington State is

made possible by over 3,700 interstate trucking

companies, including common carrier and contract

companies. The State ranks among the top 10

states in general freight tonnage carried by trucks

intrastate. The competition results in favorable

negotiated freight rates.

All regional communities are accessible from

Seattle over an efficient, well-planned freeway

system. The average commute between Seattle

and outlying cities and suburbs is 23 minutes (non-

peak) and 45 minutes (peak). The region’s highway

network is anchored by three main highways:

U.S. Interstate 5 which runs north-to-south from Vancouver, British Columbia to San Diego, California

Interstate 90 which runs west-to-east connecting Seattle with New York

Interstate 405 (Washington) is a 30-mile stretch of freeway that bypasses Seattle east of Lake Washington. I-405 runs from Lynnwood in the north to Tukwila in the south


Over 23 million passengers annually ride the

Washington State Department of Transportation’s

Ferry System, the largest in the country and the

third largest in the world. This system transports

over 10 million vehicles a year, more than any

ferry system in the world. The fleet has 20 auto-

passenger ferries and two passenger-only ferries.

The DOT operates 20 terminals and operates on

nine routes.

The Port of Seattle has world-class facilities and

relative proximity to Asia; the port is the fastest

route for cargo to and from America’s heartland.

The transit time from port cities in Asia to Seattle

is eight days, which is 30 hours less than through

Southern California ports. The Seattle-Tacoma-

Everett port region is the third largest container

complex in the country, smaller only than New

York/New Jersey and Los Angeles/Long Beach.

It is the 8th largest US port in terms of TEU’s and

cargo activity supports more than 21,000 jobs. The

region’s ports serve not only the Pacific Northwest

but also the Midwest, East Coast, and Canada.

The Northwest Seaport Alliance saw container

volumes surpass the 3 million mark in October,

a 5 percent increase year to date. Containerized

exports fueled the growth, posting a 9 percent

gain. Import volumes declined slightly, signaling

the end of the peak shipping season when retailers

increase inventories ahead of the holiday shopping

season. Through the first 10 months of the year,

imports rose 4 percent to 1,208,091 TEUs, and

exports grew 9 percent to 1,102,194 TEUs.

Domestic volumes to Alaska and Hawaii remained

flat, up 1 percent to 748,769 TEUs. Auto imports

also continued to post gains in October—up more

than 6 percent year to date to 154,291 units—as

the 2016 models began arriving. Meanwhile,

year-to-date break-bulk cargo volumes and grain,

log, petroleum and molasses exports continue

to be impacted by a weaker export market. The

Northwest Seaport Alliance is a marine cargo

operating partnership of the ports of Seattle and

Tacoma.

Over 37.4 million passengers and 327,240 metric

tons of air cargo passed though Sea-Tac airport.

Passenger levels increased 7.7% from 2013

and the volume ranked the airport as the 22nd

busiest in the U.S. Because of the state’s strategic

geographic location, Sea-Tac is one to two hours

of flying time closer to Pacific Asia than Southern

California airports. In addition, trans-polar routing

enables Sea-Tac to rival East Coast cities like New

York in flight times to European capitals.

ECONOMY

While the greater Seattle economy includes a

broad range of companies, local business and civic

leaders have identified key innovative, knowledge-

based industries that drive our economy and are

critical to the region’s current and future prosperity.

Aerospace

Clean Technology

Information Technology

Interactive Media

Life Sciences

Aerospace

The Puget Sound region has a proud history and a

strong future as a leader in the aerospace industry.

Aerospace supported more than 102,000 jobs (over

7,000 engineers) in the region and includes over

650 companies,


making the area the largest commercial aviation

center in the country. The largest employer

is Boeing Commercial Airplanes which is

headquartered in Renton about 15 minutes south

of downtown Seattle. The region is home to final

assembly operations for the 737, 747, 767, 777,

and 787 aircraft. Boeing has 79,334 employees in

the Puget Sound region.

Clean Technology

Analysts predict a boom in clean technologies amid

an oncoming energy crunch. The alternative-energy

industry’s revenues are projected to quadruple to

$226 billion, according to a report by Clean Edge, a

Portland-based market-research firm.

There are more than 400 clean technology

companies located in the region employing more

than 21,000 people. There is a 64% greater

concentration of clean technology, or “green,” jobs

in the Seattle area than the U.S. average.

Statewide, the clean technology industry

accounted for more than 62,000 jobs in the sectors

of energy efficiency, renewable energy, reducing

pollution and pollution cleanup. The sectors of

wind, solar, biomass, wave/ tidal and geothermal

energy currently employ more than 17,000.

Washington State has long supported clean

technology and has the largest coordinated hydro-

electric system in the world, providing 73% of the

state’s electrical power.

The Washington Clean Technology Alliance (WCTA)

was established in 2007 to take full advantage of

the opportunities presented by this emerging sector

and to ensure Washington’s continued leadership.

Information Technology

Many of the most well-known names in the

software and information technology industry are

located in the Greater Seattle area. The established

companies include Intel, Microsoft, Amazon,

Nintendo, T-Mobile, RealNetworks, Expedia, and

several others.

The strong base of businesses has created

the largest employment cluster in the region,

supporting nearly 110,000 jobs. The Greater Seattle

area has several world-leading strengths in the

IT sector. The State of Washington is the largest

employer of software publishing workers in the US.

Washington ranks first in the country in the creation

of new software companies.

Microsoft is the second largest employer in the

State of Washington. In addition to the nearly

42,940 employees in the region, the company

historically has had an estimated 3.4 implied

employment multiplier. As a result, the company

currently also supports nearly 98,000 indirect jobs

in the area. Microsoft has also greatly impacted the

region through next generation companies. Since

Microsoft’s founding, over 250 companies have

been spun off through investment and development

or from former Microsoft employees.

Amazon continued its strong employment growth

through 2016. The online retailer added 11,000

employees worldwide last year. The company

doesn’t release detailed employment information

for the region; however, recent local leasing activity

indicates many of the new and planned hires will be

based in the Seattle area.


Amazon leased approximately 460,000 square

feet at the 1918 Eighth office tower in downtown

Seattle. This lease is in addition to the 1.7

million square foot headquarters in South Lake

Union which is apparently already near capacity.

They are under construction on 4 city blocks

totaling approximately 3 million square feet. Tech

companies require approximately 250 square feet

per employee. Therefore they plan to house an

additional 10,000 employees upon completion of

this Amazon campus.

The rich and deep pool of talent has led other

industry leading IT companies such as Google

to establish the area as an important location for

growth. In the Greater Seattle area, Google has a

complex of new buildings in Kirkland and offices

in the Fremont neighborhood of Seattle. A local

manager has indicated that at least 100 positions

will be added to the 700 employees already

working in the two locations. The local engineers

are working on the high priority projects such as

the Chrome browser and operation systems and

Google Talk.

TOP PUGET SOUND AREA COMPANIES

Amazon.com

AT&T Wireless

Alaska Airlines

Berlex Laboratories

Boeing

Children’s Hospital

Costco

Expedia, Inc.

Group Health Cooperative

Macy’s

Microsoft

MultiCare Health System

Nintendo

Nordstrom

Paccar, Inc.

Providence Health Care

REI

Safeco

Safeway

Starbucks

Swedish Health Services

Symetra Financial

T-Mobile

The Kroger Company

University of Washington

Virginia Mason Medical Center

Weyerhaeuser - Forest Products


TACOMA OVERVIEW

Tacoma is located 33 miles south of Seattle with a current population estimate of 207,948, making it the 3rd largest city in Washington State. Tacoma is in the midst of a significant expansion and redevelopment of its CBD, just two miles away. The City has supported a number of public and private projects in the past three decades in an attempt to revitalize all elements of the CBD market, which is now starting to pay off. Among these are the establishment and expansion of a University of Washington satellite campus, the Tacoma Museum of Glass, the Greater Tacoma Convention Center, and just outside of the CBD, the LeMay Auto Museum.

A 1.6-mile light rail line was constructed along Pacific Ave., connecting the north end of the CBD to the Amtrak rail station and Sounder heavy rail commuter trains north to Seattle. Light rail trains run every 12 minutes during the day with ridership of 900,000 in 2018. Work on expanding the Tacoma Link system started in November 2018, which will result in six new stops along 2.4 miles of new track. When completed in mid-2022, the line will extend north from the Theater District to the north end of the CBD, near Division St. and then head southwest to MLK Jr. Way, where it

will turn south, with the last of the six new stops at MLK Jr. Way and S. 19th St. Long-term plans call for connecting the Tacoma Link to the larger Link system to the north. However, construction on that is not expected to begin until 2034, with complete light rail lines from Tacoma to Everett in 2038.

The University of Washington – Tacoma (UW-T) branch campus anchors the southerly end of the Tacoma CBD. The University owns about 46 acres, including much of the land extending west to Tacoma Ave. S. UW-T became a four-year degree in 2007 and now has an annual enrollment over 5,100 students. The resulting urban campus has become a focal point in the Downtown CBD and the driving force behind present day revitalization efforts.

Adjacent to UW-T is Tacoma Town Center, a roughly $135 million investment that will include a new 23 story Marriott Hotel, about 600 housing units and retail space when complete. The hotel is underway and expected to be delivered in 2020. East of that is a multi-phased project called Brewery Blocks that will have 200 units of market-rate residential housing, 75,000 sf of Class A office, and 50,000 sf of retail.


The Granada is centrally located in downtown Tacoma putting it within walking distance to many of the cities restaurants, boutiques, museums, and nightlife. It is also within walking distance to the University of Washington Tacoma campus. The centralized location, easy access to major freeways and highways, and Tacoma’s strong public transportation system give resident’s easy access to the area’s main employment hubs such Joint Base Lewis-McChord, Port of Tacoma, Kent Valley, Sea-tac International Airport. The Granada will specifically benefit from the strong public transportation system with the addition of a new Link Lite Rail station opening three blocks away in 2022.

The Tacoma Link Lite rail expansion more than doubles the length of the current lite rail system. Starting with relocation the Theater District station and then adding six new stations. The expansion will connect popular destinations such as the Stadium District, Wright Park, and major medical facilities before reaching the new Hilltop neighborhood terminus.

CENTRALIZED LOCATION & STRONG DRIVERS

GRANADA


SUPPLY

RENTAL TRENDS

DEMAND

Employment Sector Current Share YOY Change

Leisure and Hospitality 10.3% 4,100 8.0%

Professional and Business Services 9.6% 2,300 4.6%

Government 24.7% 1,800 1.4%

Mining, Logging and Construction 6.7% 1,400 4.0%

Trade, Transportation, and Utilities 19.3% 1,200 1.2%

Financial Activities 3.6% 800 4.2%

Manufacturing 4.4% 500 2.2%

Other Services 3.6% 500 2.7%

Information 0.8% 200 5.0%

Education and Health Services 13.2% 200 0.3%

National RankingOut of 98 Markets 6Rent

Growth [-1] 22EmploymentGrowth 36Completions

[-5]

Inventory by Property Status# of Properties

480Completed

65,969 Units

16Under Construction

2,196 Units

22Planned

3,844 Units

30Prospective

4,268 Units

TACOMA MULTIFAMILY FEBRUARY 2019

1

SUBMARKET FUNDAMENTALS FEBRUARY 2019

RENTAL RATES YEAR-OVER-YEAR ROLLING CHANGE VS MARKET

Rank out of18 Submarkets

96.4%Occupancy Rate

February 2019

6th

OCCUPANCY RATE VS MARKET

INVENTORY GROWTH COMPLETIONS AS % PRIOR INVENTORY

Rank out of 17 Submarkets

7.3%Y-o-Y Change

$1,505Average Rental Rate

February 2019

5th

Rank out of 18 Submarkets

11.0%Growth in 2019 -Projected Year End

391Units built in 2019 -Projected Year End

4th

Downtown Tacoma | Tacoma Multifamily | 2

TACOMA VS NATIONAL RENT GROWTH

RENTAL RATES YEAR-OVER-YEAR ROLLING CHANGE VS MARKET

As residents continue to be priced out of core markets like Seattle and Bellevue, they are choosing to live in outlying communities. Combined with net in-migration from other states and the lack of development, this is creating organic rent growth in these surrounding markets. According to Yardi Matrix, the greater Tacoma market saw a Year-over-Year rent growth of 6%, almost double the national average. The downtown Tacoma submarket saw 7.3% Year-over-Year rent growth.


*Assumes long term capital gains tax rate of 23.8%, no state income tax, and annual appreciation of 7% for both the OZ and standard investment

WHY? THE MAGIC OF OZ AFTER TAX VALUE OF INVESTMENT

Temporary DefferalDefer taxes on gains until 12.31.26

Does NOT have to be like kind

$100,000 Invested in 2018

After tax value of investment in 2028

Step-Up BasisHold for more than 7 years and get a 15% increase in the tax basis of the original gain

Permanent ExclusionHold for more than 10 years and all additional gains beyond that which were previously deferred are excluded through 12.31.47

$200,000

$132,000

$176,000

Excess return offered by OZ Investment $44,000

Standard Investment OZ Investment

$100,000

$50,000

$150,000

$0

Opportunity Zone The Granada Apartments are located in a Department of Commerce designated Opportunity Zone. A census tract nominated by the Washington State governor and certified by the U.S. Department of the Treasury. Through private investment, these zones are designed to provide tax incentives to investors who help revitalize or who fund businesses in select communities. Investors are allowed

to defer taxes on capital gains from real estate or other asset classes that are invested in Opportunity Zones. Investors are further rewarded with additional tax incentives when investing long-term. See the following page for information on the tax saving benefits provided by Opportunity Zones.

Property Aerials

03

THE GRANADA 21

Amenities

Regional Employers

Property


Subway Papa John’s EconoLodge Goodyear Thriftway Bartel’s US Bank Wright Park U of Puget Sound

Jack in the Box Jazz Bones Travelodge Napa 7-11 Home Depot Union Bank Garfield Park Jefferson Elementary

Starbucks E9 Roadway Inn Purcell Goodwill Met Market Umpqua Bank Ursich City Park Stadium High School

Jimmy Johns RLHC Costco Jiffy Lube Columbia Bank Snake Lake Park Hilltop Artists

Tully’s LaQuinta Savers Walgreens Wells Fargo McKinley Park Mason Middle School

Dominos Best Western Shell Gas Target Key Bank Lincoln Park

KFC Holiday Inn Express Chevron Hobby Lobby Bank of the West Swell Park

A&W Courtyard Marriott Arco Petsmart Bank of America Franklin Park

Baskin Robins Murano Ace Walmart Chase Jefferson Park

McDonalds Safeway Fred Meyer Bellarmine

1

2

3

1

2

3

1

5

2

6

3

7

4

8

RESTAURANTS/FOOD HOTELS SHOPPING

4

5

4

5

1

2

12

3

4

5

11

2

34

5

6

9

8

7

10

6

6

7

16

6

7

8

99

1

1

1

1

2

2

67

10

4

3

3

3

35

5

6

6

67

8

9

7

8

99

8

10

10

11

12

13

14

11

12

12

13

15

14

15

1

5

23

4

1

4

4

6

8

9

4

16

17

18

19

20

16

1718

19

20

15

BANKS PARKS/SCHOOL

1

5

2

3

4

6

10

7

8

9

11

15

12

13

14

16

15

10

21

22

23

21

22

23

11

11

12

13

1213

312

1

5

2

3

4

6

7

8

9

1

5

2

3

4

6

10

7

8

9

11

15

12

13

14

GRANADA

AMENITIES


SEATAC AIRPORT

GRANADA

REGIONAL EMPLOYERS

KENT VALLEYINDUSTRIAL/FLEX SPACE

SOUNDER TRAIN STATIONS

DESMOINES CREEK


DOWNTOWN TACOMA

S 13th

St

Tacoma Ave

S Yakima Ave

S 15

th S

t

S 11th St

PROPERTY

GRANADA

Community Description

04

Community Summary

Property Photos

THE GRANADA 25

ASSESSOR’S PARCEL NO. 2012160080

SITE AREA 6,500

BUILDING SF 20,544

NUMBER OF UNITS 32

YEAR BUILT 1926

ZONING R5

PARKING Street

NO. OF BUILDINGS One (1)

NO. OF FLOORS Four (4)

STRUCTURE Wood & Brick

ROOF Flat

HEATING Boiler

SIDING Brick

ELECTRICAL Single panel, 600 amp

COMMUNITY SUMMARY

Financials

05Unit Mix

Current Rents & Expenses

Proforma Rents & Expenses

THE GRANADA 29


FinancialsUNIT MIX | CURRENT RENTS & EXPENSES

1 BED / 1 BATH URBAN 1 BED / 1 BATH

# OF UNITS

SF AVG. CURRENT RENT AVG. $/NRSF

7 624 $1,137 $1.82

TOTAL 4,368 $7,960 $1.82

# OF UNITS


7 484 $986 $2.04

TOTAL 3,388 $6,899 $2.04


MEDIUM STUDIO SMALL STUDIO

# OF UNITS


8 428 $974 $2.28

TOTAL 3,424 $7,795 $2.28

# OF UNITS


10 352 $929 $2.64

TOTAL 3,520 $9,290 $2.64


OPERATIONS CURRENT

Rent Income $383,328

Utility Bill back $42,454

Laundry Income $3,840

TOTAL GROSS POTENTIAL REVENUE $429,622

Vacancy @ 5% ($21,659)

Other Income $6,840

EFFECTIVE GROSS INCOME $414,981

OPERATING EXPENSES

Property Management at 5% $20,749

Property Taxes $40,383

Insurance $6,035

Utilities $44,688

Repairs & Maintenance $19,200

Common Area Cleaning $2,640

General Administrative $3,200

Turnover $4,800

Marketing $1,760

Payroll $24,000

Reserves $7,200

TOTAL OPERATING EXPENSES $174,656

NET OPERATING INCOME $240,325

Cap Rate 5.40%

Price per SF $216.60

Price per Unit $139,063

CURRENT RENTS & EXPENSES

Comparables

06Sale Comparables Rent Comparables

THE GRANADA 33

SALE COMPARABLES

1 4

2 5

3 6

MILLER APARTMENTS

TWIN GABLES APARTMENTS

MCCARTHY APARTMENTS

SHASTA APARTMENTS

LOWELL APARTMENTS

3114 N 20TH ST

202-210 Tacoma Ave S | Tacoma, WA 98402

505 S J St | Tacoma, WA 98405

315 N G St | Tacoma, WA 98403

1545 Fawcett Ave | Tacoma, WA 98402

1205 N Yakima Ave | Tacoma, WA 98403

3114 N 20th St | Tacoma, WA 98406

No. of Units 31

Year Built 1907

Sale Date 08.08.2017

Sale Price $6,400,000

Price Per Unit $206,452

Cap Rate 5.50%

Sale Price PSF $199.50

No. of Units 7

Year Built 1918




Cap Rate 5.50%


No. of Units 17

Year Built 1919




Cap Rate 5.45%


No. of Units 10

Year Built 1919




Cap Rate 5.36%


No. of Units 8

Year Built 1925




Cap Rate 4.70%


No. of Units 6

Year Built 1910


Sale Price $897,700


Cap Rate 5.69%


SALE COMPARABLES

1

2

3

4

5

6

THE GRANADA

N

PORT OF TACOMA

COMMENCEMENT BAY

Schuster Pkwy

S 6th Ave

S Fawcett Ave

S 13th St

N 21st St

N S

teele St

6th

Ave

RENT COMPARABLES

THE WINDSOR

TRAVIS 1207 ALTHEIMER ST

MIDTOWN15 SCHULTZ

WILMONT

17 Saint Helens Ave | Tacoma

701 S Yakima Ave | Tacoma 1207 Altheimer St | Tacoma

1801 S 15th St | Tacoma 1002-1004 S 12th St | Tacoma

1402 Earnest S Brazil St | Tacoma

1

2

3

4

5

6

No. of Units 24

Year Built 1923

Avg. Studio Rent $925

Avg. Studio SF 335

Avg. 1-Bed Rent $1,195

Avg. 1-Bed SF 600

No. of Units 37

Year Built 1929

Avg. Studio Rent $895

Avg. Studio SF 500

Avg. 1-Bed Rent $995

Avg. 1-Bed SF 650

No. of Units 68

Year Built 1964


Avg. 1-Bed SF 434


Avg. 1-Bed SF 570

No. of Units 13

Year Built 1912


Avg. 1-Bed SF 577

No. of Units 10

Year Built 1918

Avg. Studio Rent $1,050

Avg. Studio SF 450


Avg. 1-Bed SF 1,150

No. of Units 11

Year Built 1924


Avg. 1-Bed SF 599

RENT COMPARABLES

1

2

3

4

56

THE GRANADA

N

PORT OF TACOMASchuster P

kwy

S Stadium W

ayDivision Ave

S 11th St

S S

prag

ue

S 15th St

6th Ave

S 6th Ave

Exclusively offered by

Brian RichardsonVice President [email protected]

Kidder Mathews 1550 Irving St SW | Suite 200 Olympia, WA 98512

kiddermathews.com

the granada - loopnet€¦ · the granada is a four-story apartment building centrally located in...

Documents