mccauley - 13 - loopnet · 2018-07-31 · year over year rent increases for this sub-market are...
TRANSCRIPT
CONFIDENTIALOffering Memorandum
McCauley - 13 806 McCauley BlvdSan Antonio, TX 78221
Jonathan KrebbsManaging PartnerPhone: 972.379.9843E-mail: [email protected]
Chase DavisVice PresidentPhone: 972.465.9533E-mail: [email protected]
Paul YazbeckManaging PartnerPhone: 972.379.9844E-mail: [email protected]
Will ClarkeVice President Phone: 469.250.9714E-mail: [email protected]
Please do not disturb management or visit the office without an appointment.
The BlueprintLocation Overview ........................................4
Property Overview ........................................6
Rent Comparables ........................................21
Financial Overview .......................................27
2
San Antonio
North
McCauley
Location
97
10
173
Von Ormy
Castorville
Dunlay
Natalia
Losoya
Bandera
Lytle
Castle Hills
Alamo Heights35
410
35
10
Leon Valley
Devine
Moore
HondoSabinal
Concan
Rio Frio
Rio Medina
Lake Hills
Piper Creek
Frio Town
Hollywood Park
Calaveras
Leming
Amphion
Anchorage
New Braunfels
Selma
Universal City
Live Oak Seguin
Sunnyside
Dewees
Sutherland Springs
La vernia
New Berlin
Adkins 123
16
46
16 181
90
281
1604
54
7
Property Overview
The Multifamily Group is pleased to announce the opportunity to acquire the McCauley - 13
Apartment building. The asset is comprised of 13 units and is located at the corner of Commercial
Avenue and McCauley Boulevard in South San Antonio. The units are large for the area and boast
12 covered parking spots, 18 spots total. All units have central heat and air and individual electric
boilers. The complex is currently 100% occupied, historically this property stays at 100% occupied.
The property has a laundry room on-site that is currently not being utilized that could add several
hundred dollars of extra income for the property a month. Based on the comparable properties
McCauley could command significant rent bumps with the right interior upgrades. The area has a
high rate of occupancy due to the lack of product in the Sub-Market and high rate of population
growth in San Antonio, currently the highest in all of the country. Year over year rent increases for
this Sub-Market are some of the highest in the city at 4.9% (Yardi).
Highlights
• Comp supported rent bumps of at least $80/unit
• Located 15 minutes south of Downtown San Antonio
• Easy Access to I-35 (2 minutes) & Loop 410 (9 minutes)
• San Antonio is the fastest growing city in America
• Currently & Historically at 100% Occupancy
Property Summary
Price $850,000
Terms Free and Clear
Units 13
Year Built 1970
Net Rentable SF 10,465
Average Unit Size 805 SF
Average In Place Rent $671
Electricity Resident Pays
HVAC Individual Electric
Hot Water Individual Electric
9
Property Details
Price $850,000
Terms Free and ClearAddress 806 McCauley Blvd
San Antonio Year Built 1970Units 13Net Rentable SF 10,465 Average Unit Size 805 SFSite Size 0.44 AcresDensity 29.7 Units/AcreOccupancy 100.0%
Construction
Foundation SlabExterior Stucco and StoneRoof Pitched CompositionNumber of Buildings 1
Mechanical
HVAC Individual ElectricHot Water Individual ElectricWiring CopperPlumbing Copper
Utilities
Electricity Resident PaysWater/Sewer Property PaysGas Resident PaysCable/Internet Resident Pays
Laundry / Washer and Dryers
Laundry On-Site Laundry (Not in Service)
Tax Information
County BexarCAD Account No. 421865Tax Rate 2.833842%
Tax Detail
Assessed Value $593,580 City 0.558270ISD 1.528800County 0.291229College 0.149150Hospital 0.276235Other 0.017290Other 2 0.012868Total 2.833842%
School Information
School District Harlandale Independent School DistrictElementary Rayburn Elementary SchoolMiddle School Terrell Wells Middle SchoolHigh School Mccollum High School
Parking
Paving GradeOpen Spaces 6Covered Spaces 12Total Spaces 18
Personnel
(1) Property Manager/ Maintenance
1110
Unit Mix
Type # Units % of Total Square Feet Effective Rent Market Rent Comp Supported Rent Effective $/SF Market $/SF Supported $/SF
1/1 7 54% 715 $625 $625 $650 $0.87 $0.87 $0.91
2/2 6 46% 910 $725 $725 $750 $0.80 $0.80 $0.82
Total: 13 100% 10,465 $8,725 $8,725 $9,050
Average: 805 $671 $671 $696
Annual: $125,580 $104,700 $104,700 $108,600
Notes
1312
Rent Comparables
North
McCauley
Deely Place
River Bend North
13
536
Pleasanton Rd
S Flores St
Comm
ercial Ave
S Zarzamora St
SW Military Dr
Century South
Salem Creek
1514
Rent Comparable Summary
Property Name Address City State Zip Year Built # of Units Occupancy Avg. Size Avg. Rent/Unit Avg. Rent PSF
Salem Creek 803 Flame Circle San Antonio TX 78221 1986 78 92% 758 $897 $1.18
Deely Place 8511 South Flores St San Antonio TX 78221 1986 56 98% 646 $722 $1.12
RiverBend 8237 South Flores St San Antonio TX 78221 1984 200 97% 730 $785 $1.12
Century South Apart-ments 703 Logwood Avenue San Antonio TX 78221 1976 24 96% 605 N/A N/A
Averages 1983 90 96% 685 $801 $1.17
McCauley 806 McCauley Blvd San Antonio TX 78221 1970 13 100% 805 $671 $0.83
Variance +120 ($130) ($0.34)
35
Two BedroomOne BedroomPROPERTY SIZE RENT R/SFSalem Creek 560 $716 $1.28
Deely Place 550 $598 $1.09
RiverBend 516 $660 $1.28
Villa de Oro 586 $650 $1.11
Average 553 $656 $1.19 McCauley* 715 $625 $0.87
Variance ($31) ($0.32)
PROPERTY SIZE RENT R/SFSalem Creek (2/1) 844 $911 $1.08
Deely Place 700 $792 $1.13
RiverBend (2/1) 837 $853 $1.02
Villa de Oro 776 $899 $1.16
Century South 750 $850 $1.13
Average 781 $861 $1.10 McCauley* 910 $725 $0.80
Variance ($136) ($0.31)
Rent ComparisonThis study compares market rents from comparable properties to McCauley's effective rents.
17
Notes
Financial Overview
1918
2120
T-12 INCOME Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 T-12 TOTAL
Market Rent 8,725 8,725 8,725 8,725 8,725 8,725 8,725 8,725 8,725 8,725 8,725 8,725 $104,700
Gross Potential Rent 8,725 8,725 8,725 8,725 8,725 8,725 8,725 8,725 8,725 8,725 8,725 8,725 $104,700
Vacancy (555) (955) (500) (180) (120) (1,747) (1,030) (160) (191) (750) 825 (580) ($5,943)
Net Rental Income 8,170 7,770 8,225 8,545 8,605 6,978 7,695 8,565 8,534 7,975 9,550 8,145 $98,757
GROSS REVENUES 8,170 7,770 8,225 8,545 8,605 6,978 7,695 8,565 8,534 7,975 9,550 8,145 $98,757
T-12 EXPENSES
Repairs & Maintenance 733 733 733 733 733 733 733 733 733 733 733 733 $8,794
Utilities 890 890 890 890 890 890 890 890 890 890 890 890 $10,678
Electric 104 104 104 104 104 104 104 104 104 104 104 104 $1,242
Water/Sewer 616 616 616 616 616 616 616 616 616 616 616 616 $7,395
Trash 170 170 170 170 170 170 170 170 170 170 170 170 $2,040
Management Fees 175 175 175 175 175 175 175 175 175 175 175 175 $2,100
Insurance 292 292 292 292 292 292 292 292 292 292 292 292 $3,500
Real Estate Taxes 1,276 1,276 1,276 1,276 1,276 1,276 1,276 1,276 1,276 1,276 1,276 1,276 $15,314
TOTAL EXPENSES 3,366 3,366 3,366 3,366 3,366 3,366 3,366 3,366 3,366 3,366 3,366 3,366 $40,386 Recurring Capital Expenditures 271 271 271 271 271 271 271 271 271 271 271 271 $3,250
NOI (WITH RESERVES) 4,534 4,134 4,589 4,909 4,969 3,342 4,059 4,929 4,898 4,339 5,914 4,509 $55,121
2322
TRENDING INCOME TRAILING 12 MONTHS
6 MONTHS ANNUALIZED INCOME
90 DAY ANNUALIZED IN-COME
60 DAY ANNUALIZED INCOME
30 DAY ANNUALIZED INCOME YEAR 1 UNDERWRITING
Market Rent 104,700 8,054 104,700 8,054 104,700 8,054 104,700 8,054 104,700 8,054 108,888 8,376
Less: Loss to Lease 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% (3,560) 3.3%
Gross Potential Rent 104,700 8,054 104,700 8,054 104,700 8,054 104,700 8,054 104,700 8,054 105,328 8,102
Vacancy (5,943) 5.7% (3,772) 3.6% (2,020) 1.9% 1,470 -1.4% (6,960) 6.6% (3,267) 3.0%
Net Rental Income 98,757 7,597 100,928 7,764 102,680 7,898 106,170 8,167 97,740 7,518 102,062 7,851
RUB Income 0 0 0 0 0 0 0 0 0 0 3,900 300
Water/Sewer 0 0 0 0 0 0 0 0 0 0 3,900 300
Other Income 0 0 0 0 0 0 0 0 0 0 2,400 185
GROSS REVENUES 98,757 7,597 100,928 7,764 102,680 7,898 106,170 8,167 97,740 7,518 108,362 8,336
EXPENSES
Repairs & Maintenance 8,794 676 8,794 676 8,794 676 8,794 676 8,794 676 5,174 398
Utilities 10,678 821 10,678 821 10,678 821 10,678 821 10,678 821 10,678 821
Electric 1,242 96 1,242 96 1,242 96 1,242 96 1,242 96 1,242 96
Water/Sewer 7,395 569 7,395 569 7,395 569 7,395 569 7,395 569 7,395 569
Trash 2,040 157 2,040 157 2,040 157 2,040 157 2,040 157 2,040 157
Management Fee 2,100 162 2,100 162 2,100 162 2,100 162 2,100 162 5,418 417
Insurance 3,500 269 3,500 269 3,500 269 3,500 269 3,500 269 2,756 212
Taxes 15,314 1178 15,314 1,178 15,314 1,178 15,314 1,178 15,314 1,178 19,872 1,529
TOTAL EXPENSES 40,386 3107 40,386 3107 40,386 3107 40,386 3107 40,386 3107 43,898 3377
Recurring Capital Expenditures 3,250 250 3,250 250 3,250 250 3,250 250 3,250 250 3,250 250
NOI (WITH RESERVES) 55,121 4,240 57,292 4,407 59,044 4,542 62,534 4,810 54,104 4,162 61,213 4,709
NOI / In Place Cap Rate 55,121 6.68% 57,292 6.94% 59,044 7.16% 62,534 7.58% 54,104 6.56% 61,213 7.42%
Underwritten NOI & Cap Rate 51,609 6.26% 53,780 6.52% 55,532 6.73% 59,022 7.15% 50,592 6.13% 61,213 7.42%
25
5 Year Cash Flow
INCOME NOTES
Year 1 Rents have been grown at 4% based on comparable propertiesYear 1 Underwriting assumes 6.3% economic loss
EXPENSE NOTES
Repairs and Maintenance have been normalized at $398 per unit based on comparable propertiesAdministrative Costs are projected at $0 per unit based on current operationsMarketing is projected at $0 per unit based on current operationsPayroll is projected at $0 per unit based on current operationsUtilities are projected at $821 per unitManagement Fees are projected at 5.0% of Gross RevenueInsurance is based on an comparable property policy costs of $212 per unitTaxes are $19,872 based on 85% of purchase price of $825,000 and the 2017 rate of 2.834%Recurring capital expenditures have been estimated at $250 per Unit
INCOME FY1/UNIT YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Gross Potential Rent 8,376 108,888 112,155 115,519 118,985 122,554Less: Total Economic Loss (525) (6,826) (6,729) (6,931) (5,949) (6,128)Economic Occupancy 94% 94% 94% 94% 95% 95%Net Rent Per Unit $689 $689 $711 $733 $763 $786Per SF $0.86 $0.86 $0.88 $0.91 $0.95 $0.98Net Rental Income 7,851 102,062 105,425 108,588 113,036 116,427Utility Reimbursement Income 300 3,900 3,978 4,058 4,139 4,221Other Income 185 2,400 2,448 2,497 2,547 2,598Gross Revenues 8,336 108,362 111,851 115,143 119,721 123,246Monthly Revenue 753 9,030 9,321 9,595 9,977 10,271% Increase over previous year 3.22% 2.94% 3.98% 2.94%
EXPENSES
Contract Services 0 0 0 0 0 0Repairs & Maintenance 398 5,174 5,277 5,383 5,491 5,601Administrative 0 0 0 0 0 0Marketing 0 0 0 0 0 0Payroll 0 0 0 0 0 0Utilities 821 10,678 10,891 11,109 11,331 11,558Management Fees 417 5,418 5,526 5,637 5,750 5,865Insurance 212 2,756 2,811 2,867 2,925 2,983Real Estate Taxes 1529 19,872 20,270 20,675 21,089 21,510Recurring Capital Expenditures 250 3,250 3,250 3,250 3,250 3,250Total Expenses with Reserves (3,627) (47,148) (48,091) (49,053) (50,034) (51,035)Net Operating Income 4,709 61,213 63,760 66,090 69,687 72,211
DEBT SERVICE
Total Debt Service Amount (32,484) (41,001) (41,001) (41,001) (41,001)Net Cash Flow 28,729 22,759 25,088 28,686 31,210 Return on Equity 13.52% 10.71% 11.81% 13.50% 14.69%Debt Service Coverage 1.88 1.56 1.61 1.70 1.76
CASH FLOW ASSUMPTIONS Current YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Gross Potential Rent Growth 4.00% 3.0% 3.0% 3.0% 3.0%Total Economic Loss 6% 6.27% 6% 6% 5% 5%Other/Utility Reimbursement Income Growth 2% 2% 2% 2%Operating Expense Growth 2% 2% 2% 2%Real Estate Tax Growth 2% 2% 2% 2%
Internal Rate of Return
2726
Leveraged IRR 28.03%
Unleveraged IRR 13.86%
Likely Sale Price $825,000 Estimated Closing Date Sep-18
Additional/Deferred $0 Loan Amount at Closing $618,750
Total Costs $825,000 LTV 75%
Equity Requirement (includes 1% for origin.) $212,438 Amortization (months) 360
Hold Period (Years) 5 Loan Term (Months) 120
Terminal Cap Rate 6.50% Maturity Date Sep-28
Price in Year 5 $1,110,941 Interest Only 1
Sales Expense 3.00% Interest Rate 5.25%
Sales Expenses @ 3% $33,328 Loan Constant 6.63%
Principal Outstanding $580,934 Monthly Payment (3,417)
Net Proceeds $496,679 Cost of Loan (%) 1.00%
Paul YazbeckManaging PartnerThe Multifamily Group
Prior to forming The Multifamily Group Paul was an Executive Director in Investment Sales with Sperry Van Ness (SVN) and finished as the company’s #7 highest performing broker out of over 1,100 brokers worldwide in 2017, the #1 ranked broker in the Southwest Region, and the top producer in the office in 2017. In 2016, Paul was the 3rd ranked broker in the Southwest Region, was the 25th highest producing Broker worldwide, and top producer in the office in 2016. He qualified for the company’s Partner’s Circle recognition in both 2016 and 2017. throughout the US.
Volunteer Involvement includes Big Brother Big Sisters (BBBS), American Corporate Partners, Gen Next, and Carter Bloodcare.
Paul’s education includes an M.B.A from the University of Texas at Austin and a B.B.A in Finance from The University of Colorado at Boulder where he attended on a ROTC scholarship. He was awarded the Bronze Star Medal for his service in Iraq during his second deployment as a Captain in the Army. Between his two deployments, he spent 27 months in Baghdad from 2003-2008.
Phone: 972.379.9844Cell: 972.310.1032Fax: 972.957.7662E-mail: [email protected]
4228 North Central Expy, Suite #110 Dallas,
Texas 75206
Jon KrebbsManaging PartnerThe Multifamily Group
Jon began his career in real estate in 2005, purchasing and renovating several multifamily properties while attending college. Since then, he has been involved in the brokerage, management, development, and construction of multifamily and single family assets across Texas and Oklahoma. Prior to forming The Multifamily Group, Jon was a top producer at Sperry Van Ness and the Henry S. Miller Company in Dallas. Jon specializes in asset valuation, coordination of the marketing process, property tours, and contract negotiations for sellers of multifamily
properties. With 12 years of real estate experience and an abundance of industry contacts, Jon analyzes each assignment carefully and finds creative ways to add value to his clients. Jon serves as the Community Service Coordinator for the Dallas Chapter of the Texas Tech Alumni Association and on the board of Real Estate Finance Executives Association. His education includes a B.B.A. in Finance and an M.B.A. from Texas Tech University.
Phone: 972.379.9843Cell: 806.786.9515Fax: 972.957.7662E-mail: [email protected]
4228 North Central Expy, Suite #110
Dallas, Texas 75206
2928
3130
Chase DavisVice President The Multifamily Group
Chase began remodeling rental properties in high school and developed an understanding of how to add value and increase cash flow. While earning his Bachelor of Science degree from Texas Tech University he managed a major redevelopment of downtown Round Rock, Texas and started a management company with a significant portfolio of Student Housing.
At The Multifamily Group Chase uses his knowledge of apartment rehabilitation to help principals get the most out of their properties. Chase looks to add value in whatever he does through wise negotiations
and unmatched tenacity, always approaching life from his personal business moto, “Striving for perfection, producing excellence.”
Phone: 379.465.9533Cell: 806.543.5980Fax: 972.957.7662E-mail: [email protected]
4228 North Central Expy, Suite #110
Dallas, Texas 75206
Will ClarkeVice PresidentThe Multifamily Group
Will embarked on his commercial real estate career as an investment associate and underwriter for a nationally recognized brokerage firm in 2016. In his role as Vice President at The Multifamily Group (TMG), Will is responsible for arranging multifamily transactions in the Dallas – Fort Worth metroplex as well as other major markets in the southwest region.
Will grew up in Dallas and received his B.S. in Finance with a concentration in real estate from the Naveen Jindal School of Management at The University of
Texas at Dallas.
Phone: 469.250.9714Cell: 214.364.4058Fax: 972.957.7662E-mail: [email protected]
4228 North Central Expy, Suite #110
Dallas, Texas 75206
DisclaimerThe material contained in this Marketing
Analysis is furnished solely upon the
Property Owner’s request for the purpose
of considering the sale of the property
within and is not to be used for any other
purpose. This information should not,
under any circumstance, be photocopied
or disclosed to any third party without the
written consent of The Multifamily Group or
Property Owner, or used for any purpose
whatsoever other than for the Property
Owner to evaluate the possible purchase of
the Property.
The only party authorized to represent the
Owner in connection with the sale of the
Property are the Multifamily Group Advisors
listed in this proposal, and no other person
is authorized by the Owner to provide any
information or to make any representation
other than contained in this Market Analysis.
If the person receiving these materials
does not choose to pursue a purchase of
the Property, this Market Analysis must be
returned to The Multifamily Group Advisor.
Neither The Multifamily Group Advisor
nor the Owner make any representation
or warranty, express or implied, as to
the accuracy or completeness of the
information contained herein, and nothing
contained herein is or shall be relied upon
as a promise or representation as to the
future condition, operations or financial
performance of the Property. This Market
Analysis may include certain statements
and estimates with respect to the Property
based on certain assumptions. These
assumptions may or may not be proven to
be correct, and there can be no assurance
that such results will be achieved. Further,
The Multifamily Group Advisor and the
Owner disclaim any and all liability for
representations or warranties, expressed
or implied, contained in or omitted from
this Market Analysis, or any other written
or oral communication transmitted or made
available to the recipient. The recipient
shall be entitled to rely solely on those
representations and warranties that may be
made to it in any final, fully executed and
delivered Real Estate Purchase Agreement
between it and Owner.
The information contained herein is subject
to change without notice and the recipient
of these materials shall not look to Owner
or The Multifamily Group Advisor nor any of
their officers, employees, representatives,
independent contractors or affiliates, for
the accuracy or completeness thereof.
Recipients of this Market Analysis are
advised and encouraged to conduct their
own comprehensive review and analysis of
the Property.
This Market Analysis is a solicitation of
interest only and is not an offer to sell the
Property. The Owner expressly reserves the
right, at its sole discretion, to reject any or
all expressions of interest to purchase the
Property and expressly reserves the right, at
its sole discretion, to terminate negotiations
with any entity, for any reason, at any time
with or without notice. The Owner shall
have no legal commitment or obligation to
any entity reviewing the Market Analysis or
making an offer to purchase the Property
unless and until the Owner executes and
delivers a signed Real Estate Purchase
Agreement on terms acceptable to Owner,
in Owner’s sole discretion. By submitting
Disclaimeran offer, a prospective purchaser will be deemed
to have acknowledged the foregoing and agreed
to release the Owner and The Multifamily Group
Advisor from any liability with respect thereto.
To the extent Owner or any agent of Owner
corresponds with any prospective purchaser, any
prospective purchaser should not rely on any
such correspondence or statements as binding
Owner. Only a fully executed Real Estate Purchase
Agreement shall bind the property and each
prospective purchaser proceeds at its own risk.
Information About Brokerage Services
TYPES OF REAL ESTATE LICENSE HOLDERS:A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker.A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents):Put the interests of the client above all others, including the broker’s own interests; Inform the client of any material information about the property or transaction received by the broker;Answer the client’s questions and present any offer to or counter-offer from the client; andTreat all parties to a real estate transaction honestly and fairly.A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION:AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner's agent through an agreement with the owner, usually in a written listing to sell or property management agreement. An owner's agent must perform the broker’s minimumduties above and must inform the owner of any material information about the property or transaction known by the agent, includinginformation disclosed to the agent or subagent by the buyer or buyer’s agent.AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant's agent by agreeing to represent the buyer, usually through a written representation agreement. A buyer's agent must perform the broker’s minimum duties above and must inform the buyer of any
material information about the property or transaction known by the agent, including information disclosed to the agent by th e seller or seller’s agent.AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the written agreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker's obligations as an intermediary. A broker who acts as an intermediary:Must treat all parties to the transaction impartially and fairly;May, with the parties' written consent, appoint a different license holder associated with the broker to each party (owner andbuyer) to communicate with, provide opinions and advice to, and carry out the instructions of each party to the transaction.Must not, unless specifically authorized in writing to do so by the party, disclose:that the owner will accept a price less than the written asking price;that the buyer/tenant will pay a price greater than the price submitted in a written offer; andany confidential information or any other information that a party specifically instructs the broker in writing not todisclose, unless required to do so by law.AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH:The broker’s duties and responsibilities to you, and your obligations under the representation agreement.Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does not create an obligation foryou to use the broker’s services.
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4228 North Central Expy, Suite #110 Dallas, Texas 75206