mendocino palms - loopnet€¦ · 655 montgomery street suite 1705 san francisco, ca 94111...

A 22-Unit Multifamily Investment Opportunity in Carmichael, California

SUTTER PARKA P A R T M E N T H O M E S

MENDOCINO PALMSA P A R T M E N T H O M E S

CONFIDENTIALITY AGREEMENT

The 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 Newmark.

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. Neitherthe 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 there under have been satisfied or waived.

SACRAMENTO OFFICE980 9th Street

Suite 2500Sacramento, CA 95814

916.920.4400

SAN FRANCISCO OFFICE655 Montgomery Street

Suite 1705San Francisco, CA 94111

415.354.0777

LOS ANGELES OFFICE1875 Century Park East

Suite 1380Los Angeles, CA 90067

310.201.2060

NATE [email protected]

916.599.6523License CA: 01467941

MARC [email protected]

916.835.8844License CA: 01956176

CAMERON [email protected]

415.430.1037License CA: 02049950



105

131821

TABLE OF CONTENTS

EXECUTIVE SUMMARY

PROPERTY OVERVIEW

COMPARABLE ANALYSIS

FINANCIAL ANALYSIS

REGIONAL OVERVIEW



4



5



E X E C U T I V E S U M M A R Y SUTTER PARKA P A R T M E N T H O M E S


6



THE OFFERINGARA Newmark, as the exclusive advisor, is pleased to present the opportunity to acquire Sutter Park, a 22-unit multifamily community located in Carmichael, CA.

PRICE$3,675,000

PRICE PER UNIT$167,045

PRICE PER SF$211

CAP RATE (CURRENT/MARKET) 4.8% / 6.2%

GRM (CURRENT/MARKET) 12.1 / 10.4

TERMS OF SALEDelivered free and clear

INVESTMENT SUMMARY

Address 5955 Sutter Ave, Carmichael, CA, 95608

County Sacramento

Year Built 1959

Total # of Units 22

Renovated Units 19

Net Rentable SF 17,600

# of Acres 1.44

Density 15

Total # of Buildings 3

Parking Spaces 37

Parking Ratio 1.68:1

Occupancy 95.4%

E X E C U T I V E S U M M A R Y

UNIT MIX

UNIT TYPE # OF UNITS AVG SF IN-PLACE

RENTMARKET

RENT

2X1 - CLASSIC 2 800 $950 $1,350

2X1 - RENOVATED NO PATIO 5 800 $1,220 $1,300*

2X1 - RENOVATED WITH PATIO 15 800 $1,173 $1,350*

AVERAGE 800 $1,164 $1,339

TOTAL 22 17,600 $25,600 $29,450

*Recently achieved lease, plus $50 RUBS

7



Turn-Key Opportunity with High-End Finishes19 of the 22 units have been renovated with high-end, condo-quality finishes including upgraded kitchens with new granite countertops, new cabinets, new fixtures, and new stainless steel appliances. The bathrooms have undergone full remodels as well, with new vanities, new fixtures, and new tile. There is new flooring through each of the 19 units.: carpet and either pergo or luxury vinyl plank flooring. The three units that have not been fully upgraded have minor upgrades. Additionally, 10 of the units have had new central HVACs installed.

Exterior HighlightsFull exterior paint of all three buildings, new dual pane windows as needed, full landscape improvements, new trash enclosures, upgraded exterior lighting, new property signage and monument, and new pool and perimeter fencing.

Desirable Two Bedroom UnitsSutter Park consists of all 2-bedrooms 1-bath with 12 single-story cottage units. In addition, the 17 downstairs units all have large, private exterior patios.

Proximity to Education and RetailSutter Park is located in the highly rated San Juan Unified School District and less than one block away from Carmichael Elementary. It is only 2.2 miles to American River College with over 34,502 students and 8 miles to Cal State Sacramento with 29,000 students. It is within walking distance to Bel Air, Safeway and the 38-acre Carmichael Park.

Conveniently LocatedLocated right off of Fair Oaks Blvd., Sutter Park has immediate access to retail, grocery stores, banks, and shopping centers.

INVESTMENT HIGHLIGHTS


8



Elverta Rd

Pfe Rd

Baseline Rd

Cirby Way

Oak Ave

Broadway14th Ave

Fruitridge Rd

47th Ave

Florin Rd

Elder Creek Rd

Gerber Rd

County Road 22

County Road 27

County Road 29

Tremont Rd

W Elverta Rd

King Rd

San Juan Rd

Riego Rd

Howsley Rd

Grant Line Rd

Bradshaw Rd

Excelsior Rd

Mace Blvd

F St

West St

Main AvedR

notr

aBLaird Rd

evA lairtsudnI

dR tnemyddiF

Watt Ave

Fulton AveHowe Ave

24th St

Power Line Rd

Folsom Blvd

Roseville

Rd

Antelope Rd

Taylor Rd

Old River Rd

Scott Rd

White Rock Rd

80

80

80

5

65

16

99113

113

70

50

80

Latrobe Rd

Jackson Rd

16

50

49

Green Valley Rd

S Shin

gle Rd

Dillard Rd

Grant Li

ne Rd

Elk Grove Blvd

Jeffer

son B

lvd

84

5

West SacramentoWest Sacramento

WOODLANDWOODLAND

DAVISDAVIS

NatomasNatomas

Florin/FruitridgeFlorin/Fruitridge

Elk GroveElk Grove

Rancho CordovaRancho Cordova

ArdenArden

Fair OaksFair Oaks

FolsomFolsom

RosevilleRoseville

DowntownDowntown

Greenhaven/Pocket

Greenhaven/Pocket

El Dorado Hills/Cameron Park


RocklinRocklin

Del PasoHeightsDel PasoHeights

CitrusHeightsCitrus

Heights

SacramentoSacramento

CarmichaelCarmichael SUTTER PARK


9



SUTTERPARK

Fair Oaks Blvd

Gibbons Dr Cypress Ave

Sacramento McClellan Airport

NN

Downtown Sacramento

Carmichael Elementary School

La Sierra Community Center

Winston Churchill Middle School




SPRING MEADOWSA P A R T M E N T H O M E S


10

P R O P E R T Y O V E R V I E W SUTTER PARKA P A R T M E N T H O M E S


11



UTILITIES

PAID BY METHOD SUPPLIED BY

ELECTRIC Tenant Direct SMUD

GAS Tenant Direct PG&E

WATER/SEWER Tenant/Owner* RUBS

Sacramento Suburban

Water District

TRASH Tenant/Owner* RUBS Sacramento County

CABLE Tenant Direct Comcast

P R O P E R T Y O V E R V I E W

PROPERTY SUMMARY

Address 5955 Sutter Ave Carmichael, CA, 95608

County Sacramento

Year Built 1959

Total # of Units 22


Parcel # 260-0470-009-0000

# of Acres 1.44

Density 15


Open Parking 37

Parking Ratio 1.68

Framing Wood

Roof Pitched Tar & Gravel

Paving Asphalt

Plumbing Galvanized Steel & Copper

Electrical Copper (units) & Aluminum (main line)

Heating/Cooling Gall wall furnaces & electric through-wall A/C OR Central HVAC

Washers and Dryers Laundry Room

*The current owner has begun implementation of RUBS at $50/unit/month.

UNIT MIX


RENTMARKET

RENT

2X1 - CLASSIC 2 800 $950 $1,350



AVERAGE 800 $1,164 $1,339

TOTAL 22 17,600 $25,600 $29,450


12



P R O P E R T Y O V E R V I E W

13



CO M PA R A B L E A N A LY S I S SUTTER PARKA P A R T M E N T H O M E S


14



Subject Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Comp 6

Property Name Sutter Park Abby Creek The Oaks at Hackberry Carmichael Gardens Windgate Carmichael Apartments Lincoln Woods Average

Address 5955 Sutter Ave 5820 Fair Oaks Blvd 4950 Hackberry Ln 4247 Hackberry Ln 8670 Fair Oaks Blvd 5800‐5804 Engle Rd 5944 Lincoln Ave

City Carmichael Carmichael Carmichael Carmichael Carmichael Carmichael Carmichael

Year Built 1959 1974 2014 1976 1973 1965 1985 1981

Units 22 114 56 84 52 52 46 67

Avg Current Rent $1,164 $1,377 $1,362 $1,374 $1,177 $1,057 $1,221 $1,261

Avg SF 800 806 776 898 676 733 769 780

Avg Rent PSF $1.46 $1.71 $1.76 $1.53 $1.74 $1.44 $1.59 $1.62

Renovated Yes Yes Yes Yes Yes Partial Yes

Occupancy 95.4% 97.4% 89.3% 92.9% 94.2% 94.2% 96.0% 94.0%

Property Name Sutter Park Abby Creek The Oaks at Hackberry Carmichael Gardens Windgate Carmichael Apartments Lincoln Woods Average

2 Bedroom 1 Bath 22 Units 50 Units 20 Units 84 Units 16 Units 18 Units 45 Units

Avg Asking Rent $1,339 $1,520 $1,508 $1,374 $1,306 $1,285 $1,230 $1,377

Avg SF 800 1,004 966 898 960 925 778 910

Avg Rent PSF $1.67 $1.51 $1.56 $1.53 $1.36 $1.39 $1.58 $1.51

RENT COMPARABLES

Loss-to-Lease Opportunity with Proven Upside Potential The average in-place rent at Sutter Park is $1,164. Based on recent leasing trends and similar rental comparables, Sutter Park can achieve $1,350 for 2-bedroom 1-baths with a patio and $1,300 without a patio, repressing an annual gain of $49,800 above the current in-place rents. With sub-market occupancy at 94%, and a market full of renovated comparables, there is clear demand for high-end finishes, where Sutter Park rises to the top.

CO M PA R A B L E A N A LY S I S

15



84%

86%

88%

90%

92%

94%

96%

98%

100%

$1.30

$1.35

$1.40

$1.45

$1.50

$1.55

$1.60

$1.65

Windgate Carmichael Apartments Average Abby Creek Carmichael Gardens The Oaks at Hackberry Lincoln Woods Sutter Park

Average Market PSF and Occupancy Rate

$1,200

$1,250

$1,300

$1,350

$1,400

$1,450

$1,500

$1,550

Lincoln Woods Carmichael Apartments Windgate Sutter Park Average Carmichael Gardens The Oaks at Hackberry Abby Creek

Average Market Rent of 2‐Bedroom 1‐Bath

RENT COMPARABLES STUDY


- Occupancy Rate- Market PSF

16




ABBY CREEK

SUTTER PARK

CARMICHAEL GARDENS

WINDGATE

OAKS AT HACKBERRY

LINCOLN WOODS

CARMICHAEL APTS

17




SUTTERPARK

Fair Oaks Blvd

Carmichael Elementary School

Sacramento River

NN

La Sierra Community Center





18

F I N A N C I A L A N A LY S I S SUTTER PARKA P A R T M E N T H O M E S


19



The following section provides detailed information on the operations of the subject property, including rent roll, historic operations and our pro forma underwriting.

OVERVIEW INVESTMENT SUMMARY

Price $3,950,000

Address 5955 Sutter Park Ave.Carmichael, CA 95608

County Sacramento

Year Built 1959

Total # of Units 22


# of Acres 1.44

Density 15


Parking Spaces 37

Parking Ratio 1.68

Occupancy 95.4%

F I N A N C I A L A N A LY S I S

UNIT MIX


RENTMARKET

RENT

2X1 - CLASSIC 2 800 $950 $1,350



AVERAGE 800 $1,164 $1,339

TOTAL 22 17,600 $25,600 $29,450


20



UNDERWRITING

F I N A N C I A L A N A LY S I S

Sutter Park5955 Sutter Ave, Carmichael, CA22 Units

ACTUAL ACTUAL PER UNIT PER MONTH ACTUAL PER UNIT PER MONTH ACTUAL PER UNIT PER MONTH

INCOME GROSS POTENTIAL RENT $251,074 $258,998 $11,773 $21,583 $303,600 % GPR $13,800 $25,300 $353,400 % GPR $16,064 $29,450Less: VACANCY LOSS $0 $0 ($15,180) -5.0% ($690) ($1,265) ($17,670) -5.0% ($803) ($1,473) NET RENTAL INCOME $251,074 $258,998 $11,773 $21,583 $288,420 $13,110 $24,035 $335,730 $15,260 $27,978Plus: OTHER INCOME $1,662 $1,925 $88 $160 $1,925 $88 $160 $1,925 $88 $160Plus: UTILITY REIMBURSEMENTS $7,287 $7,330 $333 $611 $3,600 $164 $300 $13,200 $600 $1,100 TOTAL INCOME $260,023 $268,254 $12,193 $22,354 $293,945 $13,361 $24,495 $350,855 $15,948 $29,238

EXPENSESPAYROLL $2,625 $2,050 $93 $171 $3,600 $164 $300 $3,600 $164 $300

$700 $755 $34 $63 $3,300 $150 $275 $3,300 $150 $275TURNOVER $0 $0 $0 $0 $5,500 $250 $458 $5,500 $250 $458REPAIRS & MAINTENANCE $19,178 $12,669 $576 $1,056 $5,500 $250 $458 $5,500 $250 $458UTILITIES $22,435 $24,993 $1,136 $2,083 $24,993 $1,136 $2,083 $24,993 $1,136 $2,083LANDSCAPING / GROUNDS $3,040 $3,040 $138 $253 $2,750 $125 $229 $2,750 $125 $229CONTRACT SERVICES / OTHER $5,225 $5,562 $253 $464 $5,562 $253 $464 $5,562 $253 $464TOTAL CONTROLLABLE EXPENSES $53,202 $49,069 $2,230 $4,089 $51,205 $2,328 $4,267 $51,205 $2,328 $4,267MANAGEMENT FEE $8,746 3.4% $9,023 3.4% $410 $752 $11,758 4.0% $534 $980 $14,034 4.0% $638 $1,170INSURANCE $4,873 $4,446 $202 $371 $4,730 $215 $394 $4,730 $215 $394REAL ESTATE TAXES $16,053 $16,053 $730 $1,338 $45,000 1.22% $2,045 $3,750 $45,000 1.22% $2,045 $3,750SPECIAL ASSESSMENTS $0 $0 $0 $0 $1,024 $47 $85 $1,024 $47 $85TOTAL OPERATING EXPENSES $82,874 $78,592 $3,572 $6,549 $113,718 $5,169 $9,476 $115,994 $5,272 $9,666CAPEX / RESERVES $0 $0 $0 $0 $5,500 $250 $458 $5,500 $250 $458TOTAL EXPENSES $82,874 $78,592 $3,572 $6,549 $119,218 $5,419 $9,935 $121,494 $5,522 $10,124

NOI AFTER RESERVES $177,149 $189,662 $8,621 $15,805 $174,728 $7,942 $14,561 $229,361 $10,426 $19,113

LIST PRICEPRICE PER UNITPRICE PER S.F.CAP. RATEGROSS RENT MULTIPLIER 14.6 14.2 12.1 10.4

$167,045 $167,045 $167,045 $167,045$211 $211 $211 $2114.8% 5.2%

$3,675,000 $3,675,000

4.8% 6.2%

$3,675,000 $3,675,000

PRO FORMA -MARKET RENTS

UNDERWRITINGVALUATION

2017 T-12 PRO FORMA -CURRENT RENTS PRO FORMA -MARKET RENTS

ADMINISTRATIVE

VALUATION SUMMARY 2017 T-12 PRO FORMA -CURRENT RENTS

21



R E G I O N A L O V E R V I E W SUTTER PARKA P A R T M E N T H O M E S


22



SACRAMENTO REGIONAL OVERVIEW

Located approximately 80 miles northeast of the San Francisco Bay Area at the foothills of the Sierra Nevada Mountains, Sacramento is the premier secondary market in the state of California. As the Capital City, Sacramento is the 25th largest metropolitan area in the United States with a total population in excess of 2.5M. The region has recently emerged as one of the strongest economies in the State of California, offering businesses lower operating costs than the Bay Area, a positive business climate, world class research and educational institutions, and a highly qualified technical workforce. In fact, Sacramento has been one of the fastest growing regions in the state, and posted particularly strong employment numbers in December 2015 (gaining nearly 23,000 jobs from a year earlier – a gain of 2.5%). Over the same period, California gained 265,000 jobs, a 1.5% increase.

The presence of many state and federal agencies, the nation’s largest pension fund (CalPERS), and the State Capital have provided economic stability, while prominent companies like Intel, Apple and HP all have a major presence in the region and are helping revitalize the private sector. Now that regional economic strength is evident, optimism surrounding the Sacramento rental market has been strong.

R E G I O N A L O V E R V I E W

The Sacramento MSA, with a rental growth rate of 10.68%, edged out Portland as the metro area with the highest annual effective rent growth among Axiometrics’ top 50 markets.

Sacramento features an abundance of recreational opportunities and lifestyle amenities. The region is home to the Sacramento Kings, the Sacramento Rivercats AAA Baseball Team, Folsom Lake, the American River, and numerous regional parks. Additionally, Sacramento residents are within a few hours’ drive of world-renowned ski resorts in Lake Tahoe, famous wineries in the Napa Valley, and all the lifestyle attractions the San Francisco Bay Area has to offer.

23



Elverta Rd

Pfe Rd

Baseline Rd

Cirby Way

Oak Ave

Broadway14th Ave

Fruitridge Rd

47th Ave

Florin Rd

Elder Creek Rd

Gerber Rd

County Road 22

County Road 27

County Road 29

Tremont Rd

W Elverta Rd

King Rd

San Juan Rd

Riego Rd

Howsley Rd

Grant Line Rd

Bradshaw Rd

Excelsior Rd

Mace Blvd

F St

West St

Main AvedR

notr

aBLaird Rd

evA lairtsudnI

dR tnemyddiF

Watt Ave

Fulton AveHowe Ave

24th St

Power Line Rd

Folsom Blvd

Roseville

Rd

Antelope Rd

Taylor Rd

Old River Rd

Scott Rd

White Rock Rd

80

80

80

5

65

16

99113

113

70

50

80

Latrobe Rd

Jackson Rd

16

50

49

Green Valley Rd

S Shin

gle Rd

Dillard Rd

Grant Li

ne Rd

Elk Grove Blvd

Jeffer

son B

lvd

84

5


WOODLANDWOODLAND

DAVISDAVIS

NatomasNatomas


Elk GroveElk Grove


ArdenArden

Fair OaksFair Oaks

FolsomFolsom

RosevilleRoseville

DowntownDowntown

Greenhaven/Pocket

Greenhaven/Pocket



RocklinRocklin


CitrusHeightsCitrus

Heights


CarmichaelCarmichael

INTELCORPORATION

State of California73,243 Employees

Multiple Locations

Kaiser Permanente5,421 Employees

Wells Fargo2,190 Employees

Raley’s3,289 Employees

EDS1,643 Employees

UC Davis Health System9,905 Employees

Sutter Health7,352 Employees

Health Net Inc.2,512 Employees

Intel Corp.6,000 Employees

Dignity Health6,292 Employees

PG&E2,169 Employees

Vision Service Plan Inc.2,382 Employees Franklin Templeton Investments

1,000 Employees

PRIDE Industries Inc.2,841 Employees

Hewlett-Packard Co.3,000 Employees

Aerojet1,710 Employees

DST Output1,300 Employees

Marshall Medical Center1,040 Employees

Cache Creek Casino Resort2,460 Employees

Eskaton1,054 Employees

Teichert2,500 Employees

Blue Shield of California1,705 Employees

Apple2,500 Employees

Westfield Galleria at Roseville4,000 Employees

EMPLOYER MAP


24



Elverta Rd

Pfe Rd

Baseline Rd

Cirby Way

Oak Ave

Broadway14th Ave

Fruitridge Rd

47th Ave

Florin Rd

Elder Creek Rd

Gerber Rd

County Road 22

County Road 27

County Road 29

Tremont Rd

W Elverta Rd

King Rd

San Juan Rd

Riego Rd

Howsley Rd

Grant Line Rd

Bradshaw Rd

Excelsior Rd

Mace Blvd

F St

West St

Main AvedR

notr

aBLaird Rd

evA lairtsudnI

dR tnemyddiF

Watt Ave

Fulton AveHowe Ave

24th St

Power Line Rd

Folsom Blvd

Roseville

Rd

Antelope Rd

Taylor Rd

Old River Rd

Scott Rd

White Rock Rd

80

80

80

5

65

16

99113

113

70

50

80

Latrobe Rd

Jackson Rd

16

50

49

Green Valley Rd

S Shin

gle Rd

Dillard Rd

Grant Li

ne Rd

Elk Grove Blvd

Jeffer

son B

lvd

84

5


WOODLANDWOODLAND

DAVISDAVIS

NatomasNatomas


Elk GroveElk Grove


ArdenArden

Fair OaksFair Oaks

FolsomFolsom

RosevilleRoseville

DowntownDowntown

Greenhaven/Pocket

Greenhaven/Pocket



RocklinRocklin


CitrusHeightsCitrus

Heights


CarmichaelCarmichael

SUTTER PARK

TRANSPORTATION

Interstate 80– This is the major east-west route in the area, leading west to Sacramento (and I-5) and then to San Francisco. Heading east, I-80 leads to the Sierra Nevada Mountain Range and the Reno Tahoe area.

Highway 50– Another major east-west route, Highway 50 runs through Folsom and connects Downtown Sacramento to the El Dorado National Forest and South Lake Tahoe.

Interstate 5– This is the major north-south route running throughout California and intersecting with Sacramento. I-5 provides easy access to downtown Sacramento.

Light Rail– Sutter Park is located just 3 minutes to the nearest Sacramento Regional Transit stop, which offers bus and light rail service to and from Sacramento seven days a week.

Sacramento International Airport– This airport serves the Northern California region with access to major cities across the U.S. and the world.

Amtrak (Capitol Corridor)– Amtrak Capitol Corridor provides daily service between the Sacramento region and the Bay Area.


25



EXCEPTIONAL SCHOOLS

Sacramento has an abundance of higher education options throughout the region that meet different needs of the students. American River College and Sacramento City College are two-year institutions that offer associate degrees and serve as feeder institutions to the University of California, Davis. Both the University of California Davis and California State University Sacramento offers bachelors, masters and PhD degrees and programs in a variety of subjects. The distance from Sutter Park and the number of students at these establishments can be seen below:

• American River College (34,502 students and 2.2 miles)• California State University, Sacramento (23,000 students and 8 miles)• Sacramento City College (26,000 students and 14 miles)• University of California Davis (32,000 students and 29 miles)

OFFICE SECTOR GROWTH

As an indicator of economic and employment strength, the office market in Sacramento is currently trending upward in both rents and volume. In 2015 alone, more than one million square feet of office space was net absorbed in Sacramento, and Q1 2016 had an even higher rate of net absorption. Also experiencing growth, office rental rates climbed by 5% in 2015, and an additional 2.6% in Q1 2016.


ARA NEWMARK | CONTACT INFORMATION

SACRAMENTO OFFICE980 9th Street

Suite 2500Sacramento, CA 95814

916.920.4400

SAN FRANCISCO OFFICE655 Montgomery Street

Suite 1705San Francisco, CA 94111

415.354.0777

LOS ANGELES OFFICE1875 Century Park East

Suite 1380Los Angeles, CA 90067

310.201.2060

NATE [email protected]

916.599.6523License CA: 01467941

MARC [email protected]

916.835.8844License CA: 01956176

CAMERON [email protected]

415.430.1037License CA: 02049950

mendocino palms - loopnet€¦ · 655 montgomery street suite 1705 san francisco, ca 94111...

Documents