offering memorandum - loopnet...3130 occidental drive • sacramento, ca 95826 offering memorandum....

WINDWARD VILLAGEWINDWARD VILLAGE3130 Occidental Drive • Sacramento, CA 958263130 Occidental Drive • Sacramento, CA 95826

Offering Memorandum

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe 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 Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. 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. Marcus & Millichap 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, 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, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap 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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â© 2017 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

WINDWARD VILLAGESacramento, CAACT ID Y0030282

TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01 Offering Summary Local Map Aerial Photo

Site Plan

FINANCIAL ANALYSIS 02 Rent Roll Summary

Rent Roll Detail

Operating Statement

Notes

Pricing Detail

Acquisition Financing

MARKET COMPARABLES 03 Sales Comparables

Rent Comparables

MARKET OVERVIEW 04 Market Analysis

Demographic Analysis

WINDWARD VILLAGE

WINDWARD VILLAGE

4

INVESTMENT

OVERVIEW

WINDWARD VILLAGE

#

EXECUTIVE SUMMARY

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

UC Davis Medical Center 10,625

Resource Staffing Group 4,785

Department of ANE 3,575

Medical Centre 3,575

Mercy General Hospital 3,000

Eden Medical Center 2,784

Sutter Medical Center 2,502

Sacramento Bee 2,500

Justice California Department 2,394

Califrnia Govt Operations Agency 2,000

Criminal Justice Info Div 2,000

Region 1 Parole Division 2,000

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2016 Estimate Pop 9,530 115,790 328,488

2016 Census Pop 9,061 109,297 309,122

2016 Estimate HH 4,435 48,255 128,704

2016 Census HH 4,194 45,575 121,949

Median HH Income $53,911 $50,767 $44,812

Per Capita Income $30,892 $31,129 $26,657

Average HH Income $66,334 $73,925 $67,455

UNIT MIX

NUMBEROF UNITS UNIT TYPE APPROX.

SQUARE FEET

40 One-Bedroom/ One-Bath 651

128 Two-Bedroom/ One-Bath 783

168 Total 126,264

VITAL DATA

Price $17,000,000 CURRENT PROFORMA

Down Payment 100% / $17,000,000 CAP Rate 3.86% 7.56%

Loan Type Assumption/All Cash/Proposed New GRM 9.94 7.40

Interest Rate / Amortization 0.00% / 0 Years Net Operating Income $656,358 $1,285,100

Price/Unit $101,190 Net Cash Flow After Debt Service 3.86% / $656,358 7.56% / $1,285,100

Price/SF $134.64 Total Return 3.86% / $656,358 7.56% / $1,285,100

Number of Units 168

Rentable Square Feet 126,264

Year Built / Renovated 1975 / 2016

Lot Size 7.32 acre(s)

5

WINDWARD VILLAGE

#

OFFERING SUMMARY

§ Outstanding Value-Add Opportunity - ProForma CAP Rate of 7.56%

§ Capture Loss-to-Lease and Institute RUBS Increases Income by $700,000

§ Substantial Capital Improvements with New HVAC and Roofs in Past Few Years

§ Superior Unit Mix with 75 Percent Two-Bedroom Units.

§ Infill Investment Opportunity along Highway 50 Corridor - 10 Minutes to Downtown

§ Historical Low Vacancy Rates; High Rental Increases; Minimal Construction Starts

INVESTMENT HIGHLIGHTS

Windward Village Apartments, offered at $17,000,000, provides a unique opportunity for investors to acquire a 168-unit apartment complex in a prime Sacramento

location. Situated along the Highway 50 Corridor, known as one of Sacramento's top employment centers, the location doubles as one of the region’s top recreation

spots along the American River Parkway.

The property features an excellent unit mix of 128 two-bedroom apartments and 40 one-bedroom units situated on over seven acres of land. It was built in 1975 and has

been maintained in excellent condition. The property boasts new roofs and air conditioning units in the past few years.

The Sacramento market is experiencing historical low vacancy rates of only 2.8%. As a result, owners are enjoying some of the highest rental growth rates in the nation.

Year-over-Year rent increase, through the first-quarter of 2017 in the submarket, was an impressive 13.2%. This favorable trend should continue as the metro area out-

performs the nation in employment growth while apartment construction starts remain at low levels.

With an investment snap shot based on a list price of $17 million, the projected capitalization rate exceeds 7 percent. The current rents are substantially below the market

averages. Furthermore, the ownership does not charge residents for water, sewer, and garbage as is common in the marketplace. Instituting a utility bill-back policy, as is

common in the area, would increase annual income by $111,000 per year. With a per unit cost basis of just over $101,000 and a price per square foot of $134, investors

can achieve above market returns through a modest renovation program and repositioning.

INVESTMENT OVERVIEW

6

WINDWARD VILLAGE

#

OFFERING SUMMARY

PROPERTY OVERVIEW

Windward Village Apartments in Sacramento is a 168-unit apartment community centrally located along the

Highway 50 Corridor. The property offers easy access to one of the region’s largest employment centers that

winds along US Highway 50 and the American River Parkway. Built in 1975, Windward Village provides residents

with a park-like setting in a low density atmosphere of just over 20 units per acre.

With a unit mix consisting of 128 two-bedroom apartments and 40 one-bedroom units, residents enjoy a

spacious floor plan to meet their living needs. The units offer individual 30-gallon hot water heaters, central

heating and air conditioning, electric stoves, dishwashers, disposals, spacious closets, and private patio/balcony.

The community common area features a stylish clubhouse and fitness center, swimming pool, playground,

laundry facilities, covered parking and gated access to the property. Grocery shopping, restaurants, retail stores

and banking opportunities are available within walking distance at the nearby Raley's anchored neighborhood

center. Windward Village is the logical choice for those seeking comfortable living along with convenient access

to shopping, recreation, employment and education.

7

§ Convenient to Shopping and Transportation

§ Park-Like Feel in this Low Density Community

Common Area Amenities

§ Stylish Fitness Center and Clubhouse

§ Large Swimming Pool and Patio Area

§ Covered Parking for Each Apartment

§ Central Heating and Air Conditioning

Unit Amenities

§ 30-Gallon Hot Water Heater in Each Unit

§ Spacious Walk-In Closets in Master Bedroom

§ Large Private Balcony/Patio

WINDWARD VILLAGE

#

PROPERTY SUMMARY

OFFERING SUMMARY

PROPOSED FINANCING

First Trust Deed

Loan Type Proposed New

Interest Rate 0.00%

Amortization 0 Years

Loan Term 0 Years

Debt Coverage Ratio

EXISTING FINANCING

Loan Amount $7,650,000

Loan Type 221 (d) (4)

Interest Rate 4.00%

Amortization 30

Original Term 30

Due Date 1/1/2042

Current Monthly Payment ($40,782)

Prepayment Penalty $350,000

Lender Name Pacific Commonwealth Mortgage

THE OFFERING

Property Windward Village

Price $17,000,000

Property Address 3130 Occidental Drive, Sacramento, CA

Assessor’s Parcel Number 079-0153-004

Zoning R3, Sacramento

SITE DESCRIPTION

Number of Units 168

Year Built/Renovated 1975

Rentable Square Feet 126,264

Lot Size 7.32 acre(s)

Type of Ownership Fee Simple

8

Buyer may assume existing loan or, if Buyer desires to acquire the property Free and Clear of existing debt, Buyer shall be responsible for prepayment penalty (5% of outstanding balance).

LOCAL MAP

WINDWARD VILLAGE

9

AERIAL PHOTO

WINDWARD VILLAGE

10

AERIAL PHOTO

WINDWARD VILLAGE

11

Marcus & Millichap closes

more transactions than any

other brokerage firm.

12

WINDWARD VILLAGE

12

PROPERTY PHOTO

Windward Village

#

Exterior Photos

13

Windward Village

#

Imterior Photos

14

Windward Village

#

Clubhouse Photos

15

SITE PLAN

WINDWARD VILLAGE

16

WINDWARD VILLAGE

17

FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS

WINDWARD VILLAGE

RENT ROLL SUMMARY

18

FINANCIAL ANALYSIS

WINDWARD VILLAGE

OPERATING STATEMENT

19

FINANCIAL ANALYSIS

WINDWARD VILLAGE

NOTES

20

FINANCIAL ANALYSIS

WINDWARD VILLAGE

PRICING DETAIL

21

Buyer may assume existing loan or, if Buyer desires to acquire the property Free and Clear of existing debt, Buyer shall be responsible for prepayment penalty (5% of outstanding balance).

MARCUS & MILLICHAP CAPITAL CORPORATION CAPABILITIESMMCC—our fully integrated, dedicated financing arm—is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and terms.

We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of financing options.

Our dedicated, knowledgeable experts understand the challenges of financingand work tirelessly to resolve all potential issues to the benefit of our clients.

National platform operating

within the firm’s brokerage offices

$5.1 billion total national

volume in 2016

Access to more capital sources than any other firm in the industry

Optimum financing solutions to enhance value

Our ability to enhance buyer pool by expanding finance options

Our ability to enhance seller control

• Through buyer qualification support

• Our ability to manage buyers finance expectations

• Ability to monitor and manage buyer/lender progress, insuring timely, predictable closings

• By relying on a world class set of debt/equity sources and presenting a tightly underwritten credit file

WHY MMCC?

Closed 1,651 debt and equity

financings in 2016

ACQUISITION FINANCING

WINDWARD VILLAGE

22

WINDWARD VILLAGE

23

MARKET

COMPARABLES

8

WINDWARD VILLAGE

SALES COMPARABLES MAP

24

WINDWARD VILLAGE(SUBJECT)

Vintage Creek

The Luxe

Sierra Square

The Falls at Arden

Sunflorin Village

Butterfly Garden Apartments

Gold Ridge

Artisan Square

The Vue

The Crossing at Antelope Creek

SALES COMPARABLES

1

2

3

4

5

7

8

6

9

10

25

WindwardVillage

VintageCreek

The Luxe SierraSquare

The Fallsat Arden

SunflorinVillage

ButterflyGarden

Apartments

Gold Ridge ArtisanSquare

The Vue TheCrossing at

AntelopeCreek

0.0

0.7

1.4

2.1

2.8

3.5

4.2

4.9

5.6

6.3

7.0

Avg. 5.76%

PROPERTY NAME

WINDWARD VILLAGE

SALES COMPARABLES

Average Cap Rate

SALES COMPARABLES

SALES COMPS AVG

7.5PROFORMA

26

WindwardVillage

VintageCreek


The Fallsat Arden

SunflorinVillage

ButterflyGarden

Apartments



AntelopeCreek

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

Avg. $107,524

PROPERTY NAME

WINDWARD VILLAGE

SALES COMPARABLES

Average Price Per Unit

SALES COMPARABLES

SALES COMPS AVG

27

WindwardVillage

VintageCreek


The Fallsat Arden

SunflorinVillage

ButterflyGarden

Apartments



AntelopeCreek

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

$180.00

$200.00

Avg. $131.57

PROPERTY NAME

WINDWARD VILLAGE

SALES COMPARABLES

Average Price Per Square Foot

SALES COMPARABLES

SALES COMPS AVG

PROPERTY NAME

MARKETING TEAM

WINDWARD VILLAGE

SALES COMPARABLES

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SALES COMPARABLES

Units Unit Type

Offering Price: $17,000,000 40 1 Bdr 1 Bath

Price/Unit: $101,190 128 2 Bdr 1 Bath

Price/SF: $134.64

CAP Rate: 3.86%

GRM: 9.94

Total No. of Units: 168

Year Built: 1975

WINDWARD VILLAGE3130 Occidental Drive, Sacramento, CA, 95826

1

Units Unit Type

Close Of Escrow: 2/1/2017 20 1 Bdr 1 Bath

Sales Price: $12,000,000 80 2 Bdr 1 Bath

Price/Unit: $120,000

Price/SF: $122.57

CAP Rate: 5.40%


Year Built: 1989

VINTAGE CREEK9231 Elk Grove Florin Road, Elk Grove, CA, 95624

Units Unit Type

Close Of Escrow: 9/13/2016 40 1 Bdr Bath

Sales Price: $25,100,000 98 2 Bdr Bath

Price/Unit: $114,091 80 2 Bdr 1.5 Bath

Price/SF: $156.37 2 3 Bdr Bath

CAP Rate: 6.20%


Year Built: 1974

2

THE LUXE2501 Hurley Way, Sacramento, CA, 95825

PROPERTY NAME

MARKETING TEAM

WINDWARD VILLAGE

SALES COMPARABLES

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SALES COMPARABLES

Units Unit Type




Price/SF: $171.97

CAP Rate: 5.80%


Year Built: 1973

3

SIERRA SQUARE8059 Targa Circle, Citrus Heights, CA, 95610

4

Units Unit Type

Close Of Escrow: 2/5/2016 36 Studio Bath



Price/SF: $148.93

CAP Rate: 6.00%


Year Built: 1986

THE FALLS AT ARDEN2345 Northrop Avenue, Sacramento, CA, 95825

Units Unit Type



Price/Unit: $93,359

Price/SF: $113.78

CAP Rate: 6.00%


Year Built: 1985

5

SUNFLORIN VILLAGE8550 Florin Road, Sacramento, CA, 95828

PROPERTY NAME

MARKETING TEAM

WINDWARD VILLAGE

SALES COMPARABLES

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SALES COMPARABLES

Units Unit Type



Price/Unit: $92,262

Price/SF: $106.05

CAP Rate: 6.20%


Year Built: 1970

6

BUTTERFLY GARDEN APARTMENTS9100 Tuolumne Drive, Sacramento, CA, 95826

7

Units Unit Type


Days On Market: 72 167 2 Bdr 1 Bath



Price/SF: $123.72

CAP Rate: 6.33%

GRM: 7.70


Year Built: 1987

GOLD RIDGE2929 Routier Road, Sacramento, CA, 95827

Units Unit Type




Price/SF: $116.70 26 3 Bdr 1.5 Bath

CAP Rate: 5.50%


Year Built: 1974

8

ARTISAN SQUARE1530 Fulton Avenue, Sacramento, CA, 95825

PROPERTY NAME

MARKETING TEAM

WINDWARD VILLAGE

SALES COMPARABLES

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SALES COMPARABLES

Units Unit Type




Price/SF: $124.38

CAP Rate: 5.75%


Year Built: 1985

9

THE VUE2450 Seamist Drive, Sacramento, CA, 95833

10

Units Unit Type


Sales Price: $9,280,000


Price/SF: $131.22

CAP Rate: 4.40%


Year Built: 1989

THE CROSSING AT ANTELOPE CREEK6050 Placer West Drive, Rocklin, CA, 95677

8

WINDWARD VILLAGE

RENT COMPARABLES MAP

WINDWARD VILLAGE(SUBJECT)

Windward Village - ProForma Rents

Hampton Court Apartments

The Huntington Apartments

Monte Bello

Rosemont Park Apartments

The Marq-University River Village

The Phoenix Apartment Living

La Riviera Commons

California Center

Enclave at Tiber Station

Windsor Ridge

Riverside Villas

4

7

8

9

11

20

12

14

15

16

17

13

18

10

4

7

8

9

11

12

10

1

2

3

5

6

32

PROPERTY NAME

WINDWARD VILLAGE

RENT COMPARABLES

33

AVERAGE RENT - MULTIFAMILY

WindwardVillage

WindwardVillage -

ProFormaRents

HamptonCourt

Apartments

TheHuntingtonApartments

Monte Bello RosemontPark

Apartments

TheMarq-University

River Village

The PhoenixApartment

Living

La RivieraCommons

CaliforniaCenter

Enclaveat TiberStation

WindsorRidge

RiversideVillas

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Avg. $1,113

1 Bedroom

WindwardVillage

WindwardVillage -

ProFormaRents

HamptonCourt

Apartments



Apartments

TheMarq-University

River Village


Living

La RivieraCommons

CaliforniaCenter


WindsorRidge

RiversideVillas

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Avg. $1,304

2 Bedroom

PROPERTY NAME

WINDWARD VILLAGE

RENT COMPARABLES

34

AVERAGE RENT/SF BY UNIT

WindwardVillage

WindwardVillage -

ProFormaRents

HamptonCourt

Apartments



Apartments

TheMarq-University

River Village


Living

La RivieraCommons

CaliforniaCenter


WindsorRidge

RiversideVillas

$0.00

$0.30

$0.60

$0.90

$1.20

$1.50

$1.80

$2.10

$2.40

$2.70

$3.00

Avg. $1.68

1 Bedroom

WindwardVillage

WindwardVillage -

ProFormaRents

HamptonCourt

Apartments



Apartments

TheMarq-University

River Village


Living

La RivieraCommons

CaliforniaCenter


WindsorRidge

RiversideVillas

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

$2.00

Avg. $1.49

2 Bedroom

PROPERTY NAME

MARKETING TEAM

WINDWARD VILLAGE

RENT COMPARABLES

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YEAR BUILT: 1975

rentpropertyname1rentpropertyaddress1

Unit Type Units SF Rent Rent/SF

One Bdr 40 651 $763 $1.17

Two Bdr 128 783 $875 $1.12

Total/Avg. 168 752 $848 $1.13

WINDWARD VILLAGE3130 Occidental Drive, Sacramento, CA, 95826

YEAR BUILT: 1975

1

NOTES- Rent shown includes RUBS: 1BR- $40; 2BR- $60- Amenities: Air Conditioning, Balcony, Ceiling Fans, Clubhouse,

Dishwasher, Disposal, Fireplace, Fitness Center, Grill, Heating, Laundry Facilities, Microwave, Oven, Patio, Pool, Range, Refrigerator, Sauna, Storage Units, Walk-In Closet


1 Bdr 1 Bath 42 651 $990 $1.52

2 Bdr 1 Bath 126 783 $1,260 $1.61

Total/Avg. 168 750 $1,193 $1.59

WINDWARD VILLAGE - PROFORMA RENTS3130 Occidental Drive, Sacramento, CA, 95826

2

YEAR BUILT: 1970

NOTES- Amenities: Balcony, Dishwasher, Disposal, Heating, High Speed

Internet Access, Kitchen, Laundry Facilities, Pool, Walk-In Closets


1 Bdr 14 650 $850 $1.31

1 Bdr 1 Bath 15 770 $950-$975 $1.25

2 Bdr 1 Bath 14 990 $1,095-$1,125 $1.12

2 Bdr 2 Bath 14 1,070 $1,195-$1,225 $1.13

Total/Avg. 57 868 $1,032 $1.19

HAMPTON COURT APARTMENTS3099 Great Falls Way, Sacramento, CA, 95826

NOTES- Amenities: Air Conditioning, Balcony, Ceiling Fans, Clubhouse,

Dishwasher, Disposal, Fireplace, Fitness Center, Grill, Heating, Laundry Facilities, Microwave, Oven, Patio, Pool, Range, Refrigerator, Sauna, Storage Units, Walk-In Closet

PROPERTY NAME

MARKETING TEAM

WINDWARD VILLAGE

RENT COMPARABLES

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YEAR BUILT: 1988

3


1 Bdr 9 770 $1,000 $1.30

2 Bdr 45 980 $1,041 $1.06

Total/Avg. 54 945 $1,034 $1.09

NOTES- Amenities: Air Conditioning, Courtyard, Dishwasher, Fireplace, Pool,

Refrigerator

THE HUNTINGTON APARTMENTS3225 Julliard Drive, Sacramento, CA, 95826

YEAR BUILT: 1988

4

NOTES- Rent shown includes RUBS: 1BR-$60; 2BR-$70; 3BR-$8 - Amenities: Air Conditioning, Balcony, Ceiling Fans, Controlled Access,

Courtesy Patrol, Dishwasher, Fireplace, Fitness Center, Granite Countertops, Grill, Pet Play Area, Pool, Spa, Stainless Steel Appliances, Walk-In Closets, Washer/Dryer


1 Bdr 1 Bath 60 650 $1,398-$1,438 $2.18

2 Bdr 2 Bath 152 890 $1,473-$1,580 $1.72

Total/Avg. 212 822 $1,496 $1.82

MONTE BELLO4001 S Watt Avenue, Sacramento, CA, 95826

5

YEAR BUILT: 1979

NOTES- Amenities: Air Conditioning, Balcony, Ceiling Fans, Clubhouse,

Dishwasher, Disposal, Gated, High Speed Internet Access, Kitchen, Laundry Facilities, Maintenance on site, Patio, Pool, Property Manager on Site, Refrigerator, Spa, Storage Space, Tennis Court


1 Bdr 86 630 $1,023 $1.62

2 Bdr 79 925 $1,374 $1.49

Total/Avg. 165 771 $1,191 $1.54

ROSEMONT PARK APARTMENTS9190 Schmuckly Drive, Sacramento, CA, 95826

PROPERTY NAME

MARKETING TEAM

WINDWARD VILLAGE

RENT COMPARABLES

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YEAR BUILT: 1976

6


1 Bdr 1 Bath 80 620 $1,125-$1,175 $1.85

2 Bdr 1 Bath 120 770 $1,350-$1,495 $1.85

Total/Avg. 200 710 $1,314 $1.85

NOTES- Rents shown include RUBS: 1BR- $30 2BR-$50- Rent-High is for renovated units

THE MARQ-UNIVERSITY RIVER VILLAGE7901 La Riviera Drive, Sacramento, CA, 95826

YEAR BUILT: 1979

7

NOTES- Rents shown include RUBS Per Person 1-$50; 2-$90-$95; 3-$50 each,

Pet Rent -$25/Mo. Parking $10 per car - Concessions: 1.8 - Amenities: Air Conditioning, Alarm, Basketball Court, Business Center,

Cable Ready, Carpet, Ceiling Fans, Clubhouse, Controlled Access, Dining Room, Dishwasher, Disposal, Eat-in Kitchen, Fireplace, Fitness Center, Free Weights, Gated, Heating, Kitchen


1 Bdr 1 Bath 304 680 $1,250 $1.84

2 Bdr 1 Bath 288 816 $1,489-$1,500 $1.83

Total/Avg. 592 746 $1,369 $1.83

THE PHOENIX APARTMENT LIVING200 Bicentennial Circle, Sacramento, CA, 95826

8

YEAR BUILT: 1973

NOTES- Rent shown include RUBS: 1BR-$60; 2BR-$70- Concessions: 0.4 - Amenities: Air Conditioning, Balcony, Cable Ready, Carpet, Ceiling

Fans, Dishwasher, Gameroom, Gated, Heating, High Speed Internet Access, Kitchen, Laundry Facilities, Laundry Service, Pool, Property Manager on Site, Refrigerator, Spa, Tennis Court, Views


1 Bdr 1 Bath 32 640 $1,080-$1,310 $1.87

2 Bdr 1 Bath 112 875 $1,220-$1,415 $1.51

Total/Avg. 144 823 $1,290 $1.57

LA RIVIERA COMMONS8719 Woodman Way, Sacramento, CA, 95826

PROPERTY NAME

MARKETING TEAM

WINDWARD VILLAGE

RENT COMPARABLES

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YEAR BUILT: 1974

9


1 Bdr 1 Bath 48 625 $985-$995 $1.58

2 Bdr 1 Bath 54 975 $1,085-$1,095 $1.12

Total/Avg. 102 810 $1,043 $1.29

NOTES- Amenities: Air Conditioning, Cable Ready, Carpet, Ceiling Fans,

Controlled Access, Dining Room, Dishwasher, Disposal, Eat-in Kitchen, Gated, Heating, Kitchen, Laundry Facilities, Package Service, Pool, Property Manager on Site, Range, Sundeck, Tub/Shower

CALIFORNIA CENTER2801 Manlove Road, Sacramento, CA, 95826

YEAR BUILT: 1978

10

NOTES- Rent shown includes RUBS: 1BR-$50; 2BR-$60 - Amenities: Air Conditioning, Balcony, Ceiling Fans, Clubhouse,

Dishwasher, Disposal, Fitness Center, Laundry Facilities, Laundry Service, Playground, Pool, Sauna, Spa, Storage Units, Walk-In Closets


1 Bdr 1 Bath 40 650 $1,075-$1,175 $1.73

2 Bdr 1 Bath 104 850 $1,210-$1,355 $1.51

Total/Avg. 144 794 $1,239 $1.56

ENCLAVE AT TIBER STATION2825 Tiber Drive, Sacramento, CA, 95826

11

YEAR BUILT: 1986

NOTES- Rent shown includes RUBS: 1BR-$55; 2B/1BA-$60; 2BR/2BA-$65- Amenities: Air Conditioning, Balcony, Business Center, Cable Ready,

Ceiling Fans, Clubhouse, Dishwasher, Disposal, Fitness Center, Gated, Grill, Hardwood Floors, Heating, Oven, Picnic Area, Pool, Property Manager on Site, Range, Refrigerator, Spa


1 Bdr 1 Bath 44 716 $1,080-$1,305 $1.67

2 Bdr 1 Bath 68 882 $1,410 $1.60

2 Bdr 2 Bath 1 966 $1,515 $1.57

Total/Avg. 113 818 $1,326 $1.62

WINDSOR RIDGE9551 Butterfield Way, Sacramento, CA, 95827

PROPERTY NAME

MARKETING TEAM

WINDWARD VILLAGE

RENT COMPARABLES

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YEAR BUILT: 1973

12


2 Bdr 1 Bath 50 825 $1,245 $1.51

2 Bdr 2 Bath 50 833 $1,295 $1.55

Total/Avg. 100 829 $1,270 $1.53

NOTES- Rent shown includes RUBS: 2BR-$50 - Amenities: Air Conditioning, Balcony, Dishwasher, Disposal, Heating,

Laundry Facilities, Pool, Sauna, Spa, Storage Units

RIVERSIDE VILLAS2852 Paseo Rio Way, Sacramento, CA, 95827

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MARKET

OVERVIEW

MARKET OVERVIEW

SACRAMENTOOVERVIEW

The Sacramento-Roseville-Arden-Arcade metro is composed of four counties: Sacramento, El Dorado, Placer and Yolo, located in the middle of the 400-mile-long Central Valley of California. Unlike the nearby San Francisco Bay Area, Sacramento is seismically quiet. The area contains nearly 2.3 million people. Sacramento, the state capital, is the most populous city, with approximately 500,000 residents, followed by Elk Grove and Roseville with 162,000 and 128,400, respectively. During the next five years, a more affordable cost of living and infill redevelopment projects will help draw businesses and residents to the area.

MARKET OVERVIEW

METRO HIGHLIGHTS

SOLID JOB CREATIONLower costs than nearby metros attract businesses and drive job creation above the U.S. level. Many commuters into the Bay Area also reside in the area.

POPULATION GROWTHEmployment opportunities and redevelopment efforts will contribute to pushing Sacramento’s population growth above the national average.

LOW COST OF LIVINGSacramento’s median home price is more affordable than many other California metros.

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MARKET OVERVIEW

ECONOMY§ Sacramento serves as the state capital, making the government sector important to the

region’s economy, though less so than in the past as the economy diversifies. § Sacramento’s seismic stability and low business costs compared with the region attract

major corporations seeking to establish operations. Among these are Intel Corp., Apple Computer and Siemens Transportation Systems.

§ DHL and United Parcel Service use the former Mather Air Force Base to ship freight. The former McClellan Air Force Base is now an industrial park and includes tenants such as Northrop Grumman and J.C. Penney.

SHARE OF 2016 TOTAL EMPLOYMENT

MAJOR AREA EMPLOYERS

California State University Sacramento

Sutter Health

Kaiser Permanente

Raley’s Inc.

Intel Corp.

Catholic Healthcare West

University of California Davis

UC Davis Health System

Hewlett-Packard Co.

Target Corp.* Forecast

MANUFACTURING4%

GOVERNMENT

HEALTH SERVICESEDUCATION AND

+OTHER SERVICES

3%

LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES

16%AND UTILITIES

TRADE, TRANSPORTATION CONSTRUCTION

PROFESSIONAL ANDBUSINESS SERVICES

2%INFORMATION

13%

6%

25% 10% 6%

16%

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MARKET OVERVIEW

DEMOGRAPHICS

SPORTS

EDUCATION

ARTS & ENTERTAINMENT

§ The metro is expected to add nearly 160,000 people through 2021, resulting in the formation of nearly 60,000 households.

§ A median home price well above the national median has produced a homeownership rate of 59 percent, compared with the national rate of 64 percent.

§ Among residents age 25 and older, 30 percent hold bachelor’s degrees and 10 percent also have a graduate or professional degree.

Residents and visitors to Sacramento can enjoy many recreational activities. The region is

home to professional sports teams such as the Kings (NBA), Sirens (IWFL) and the River

Cats. A short drive from the city leads to some of the world’s finest wine-producing

regions: the Napa, Sonoma and Alexander valleys. The area offers various cultural

opportunities including the ballet, opera, museums, a zoo and music festivals. In addition

to four community colleges, there are two universities located in the region: California State

University, Sacramento and University of California, Davis. Housing is relatively affordable

in the Sacramento region compared with the nearby San Francisco Bay Area, drawing

many residents.

36.92016

MEDIAN AGE:

U.S. Median:

37.7

$59,7002016 MEDIAN

HOUSEHOLD INCOME:

U.S. Median:

$54,500

2.3M2016

POPULATION:

Growth2016-2021*:

7.1%

830K2016

HOUSEHOLDS:

7.1%

Growth2016-2021*:

QUALITY OF LIFE

2016 Population by Age

0-4 YEARS

6%5-19 YEARS

20%20-24 YEARS

7%25-44 YEARS

27%45-64 YEARS

26%65+ YEARS

14%

* Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

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MARKET OVERVIEW

44

Continued influx of jobs and new households supports robust demand for rentals. Increased hiring within the public sector will boost the number of government, healthcare, education and university-related positions this year, attracting more in-migration to the state capital. A steady influx of new positions and a lower cost of living compared with the Bay Area will draw more households and millennials to the metro, boosting the metro’s households by nearly 12,000 this year. Household creation and escalating home values should heat demand for suburban rentals and relatively newer apartments in central Sacramento. The relatively limited volume of deliveries this year will compress vacancy to the low-2 percent range, one of the lowest levels among major U.S. markets.

An unprecedented period for apartment sector. The last time the metro vacancy rate decreased to this level, a six-year span of historically strong multifamily development followed. Based on the metro’s current construction pipeline, this phenomenon is unlikely to occur in this cycle. A mere 1,820 market-rate units were underway in the metro during the first quarter, including four properties of more than 200 units each located on the edge of the urban core and in the suburbs.

Investment Trends

Multifamily 2017 OutlookLow Vacancy, Limited DevelopmentDistinguish Sacramento Market

SACRAMENTO METRO AREA

1,100 units

will be completed

8.0% increase in

effective rents

30 basis point

decrease in vacancy

Construction:

Rents:

Vacancy:

Sources: CoStar Group, Inc.; Real Capital Analytics

Completions rise this year following the delivery of a mere 409 rentals during 2016.

A third straight year of stout rent growth will advance the average rent to $1,334 per month after a jump of 10 percent was posted in 2016.

The vacancy rate will compress to a multiyear low of 2.3 percent in 2017. Last year, the vacancy rate declined nominally.

• Offering investors appreciably higher yields than the Bay Area, the growing Sacramento metro will entice more non-local, in-state players, raising competition and applying upward pressure on prices.

• Investor demand for downtown Sacramento and midtown product, specifically near public transportation and new development, will compress returns. Many assets in the metro’s urban core trade with cap rates in high-5 percent range.

• Throughout the metro, property owners that purchased recently and have fully executed their value-add strategies on Class C and older Class B assets could seek trade-up opportunities in the metro’s most desirable submarkets.

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MARKET OVERVIEW

45

• In the 12 months ending in the first quarter, employers created 19,000 positions and the unemployment rate hovered near a cycle low of 5.1 percent.

• Professional and business services expanded by 5,900 positions in the past 12 months, down from more than 7,100 new hires in the preceding year. Restaurants and hotels also hired fewer workers.

EMPLOYMENT

• Supply growth remains subdued. Completions over the past year mark a reduction from 900 units completed in the preceding year.

• In the first quarter, developers placed in service the 148-unit Anton Arcade in Sacramento, a market-rate property, and 77 affordable rentals in the West Gateway complex in West Sacramento.

CONSTRUCTION

• The vacancy rate was 2.8 percent at the end of the first quarter. The increase reflects marginally softer performance of Class B rentals.

• Vacancy in the metro’s Class A units ticked up to 3.7 percent during the past 12 months, while Class C apartments were nominally full. The vacancy rate in the Class B segment rose 40 basis points to 3.0 percent.

VACANCY

• An increase in the average rent to $1,242 per month was recorded over the past year. A gain of 9.7 percent occurred in the 12 months ending in the first quarter 2016.

• The average Class A rent jumped 9.5 percent since the first quarter last year to $1,573 at the end of March 2017. In the Class C tier, an increase of 2.6 percent was recorded over the same stretch.

RENTS


increase in effective rents Y-O-Y

7.7%basis point increase in vacancy Y-O-Y

30units completed Y-O-Y

610increase in totalemployment Y-O-Y

2.0%

* Forecast

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Demographic Highlights

FIVE-YEAR POPULATION GROWTH*

116,800

1Q17 POPULATION AGE 20-34

Metro 21%U.S. Average 21%

1Q17 MEDIAN HOUSEHOLD INCOME

Metro $66,519U.S. Median $58,218

FIVE-YEAR HOUSEHOLD GROWTH*

64,000

POPULATION OF AGE 25+PERCENT WITH BACHELOR DEGREE+**

Metro 30%U.S. Average 29%

44% Rent

56% Own

1Q17 TOTAL HOUSEHOLDS

Increased Investor Competition Reduces Cap Rates in Urban Core

Outlook: Swelling investor interest, fueled by low vacancy and rent growth, will intensify investor competition for core assets and properties in near-in suburbs.

Vacancy Rate

Y-O-YBasis Point

Change

SubmarketEffective

RentY-O-Y %Change

Davis 1.0% 0 $1,718 9.6%

Woodland/W. Sacramento

1.3% -60 $1,090 5.8%

Carmichael 1.9% 20 $1,014 12.3%

North Sacramento/North Highlands

2.4% 30 $1,093 3.6%

South Sacramento 2.6% 50 $1,145 6.2%

Citrus Heights 2.6% -20 $1,126 5.9%

Arden/Arcade 2.7% 110 $1,085 15.5%

Rancho Cordova/East Sacramento

2.7% 70 $1,198 13.2%

Natomas 3.2% 20 $1,262 7.5%

Folsom/Orangevale/Fair Oaks

3.2% -80 $1,509 14.1%

Overall Metro 2.8% -70 $1,242 7.7%

Submarket Trends

Lowest Vacancy Rates 1Q17

Sales Trends


• The average price in deals completed over the past 12 months rose to $102,000 per unit. Growing competition compressed cap rates, with assets in downtown and midtown trading at yields near 5 percent.

• A lack of large-complex construction in suburban employment hubs has enhanced interest in assets with 100 or more units, raising the number of sales in excess of $10 million.

Pricing trend sources: CoStar Group, Inc.; Real Capital Analytics

*2017-2022 **2Q16

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PROPERTY NAME

MARKETING TEAM

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DEMOGRAPHICS

Source: © 2016 Experian

Created on July 2017

POPULATION 1 Miles 3 Miles 5 Miles§ 2021 Projection

Total Population 9,403 116,571 330,798

§ 2016 Estimate


§ 2010 Census


§ 2000 Census


§ Daytime Population

2016 Estimate 18,959 162,160 407,093

HOUSEHOLDS 1 Miles 3 Miles 5 Miles§ 2021 Projection

Total Households 4,364 48,653 129,724

§ 2016 Estimate


Average (Mean) Household Size 2.14 2.33 2.47

§ 2010 Census


§ 2000 Census


Growth 2015-2020 -1.60% 0.82% 0.79%

HOUSING UNITS 1 Miles 3 Miles 5 Miles§ Occupied Units

2021 Projection 4,364 48,653 129,724

2016 Estimate 4,513 49,921 134,444

Owner Occupied 2,431 24,029 59,195

Renter Occupied 2,005 24,226 69,508

Vacant 77 1,666 5,741

§ Persons In Units

2016 Estimate Total Occupied Units 4,435 48,255 128,704

1 Person Units 35.49% 34.33% 33.08%

2 Person Units 36.14% 32.92% 30.77%

3 Person Units 14.36% 14.17% 14.38%

4 Person Units 9.36% 10.25% 10.60%

5 Person Units 3.18% 4.49% 5.62%

6+ Person Units 1.49% 3.82% 5.54%

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles§ 2016 Estimate

$200,000 or More 2.05% 4.50% 3.85%

$150,000 - $199,000 3.54% 4.44% 3.70%

$100,000 - $149,000 14.99% 11.90% 10.19%

$75,000 - $99,999 13.38% 11.38% 10.47%

$50,000 - $74,999 19.21% 18.46% 17.31%

$35,000 - $49,999 10.90% 15.01% 14.57%

$25,000 - $34,999 8.34% 10.22% 11.71%

$15,000 - $24,999 12.42% 10.54% 12.50%

Under $15,000 15.18% 13.56% 15.70%

Average Household Income $66,334 $73,925 $67,455

Median Household Income $53,911 $50,767 $44,812

Per Capita Income $30,892 $31,129 $26,657

POPULATION PROFILE 1 Miles 3 Miles 5 Miles§ Population By Age

2016 Estimate Total Population 9,530 115,790 328,488

Under 20 19.60% 22.90% 24.76%

20 to 34 Years 28.69% 26.51% 25.36%

35 to 39 Years 5.44% 6.17% 6.36%

40 to 49 Years 10.30% 11.68% 11.95%

50 to 64 Years 15.33% 17.78% 17.92%

Age 65+ 20.64% 14.94% 13.65%

Median Age 36.52 35.45 34.92

§ Population 25+ by Education Level

2016 Estimate Population Age 25+ 6,352 78,142 220,099

Elementary (0-8) 1.22% 2.90% 5.20%

Some High School (9-11) 5.83% 6.14% 8.37%

High School Graduate (12) 14.33% 17.09% 20.32%

Some College (13-15) 25.77% 26.05% 24.96%

Associate Degree Only 10.58% 8.60% 7.96%

Bachelors Degree Only 24.71% 21.97% 18.15%

Graduate Degree 14.90% 14.34% 11.10%

§ Population by Gender

2016 Estimate Total Population 9,530 115,790 328,488

Male Population 47.61% 47.88% 48.47%

Female Population 52.39% 52.12% 51.53%

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IncomeIn 2016, the median household income for your selected geography is $53,911, compare this to the US average which is currently $54,505. The median household income for your area has changed by 27.07% since 2000. It is estimated that the median household income in your area will be $64,445 five years from now, which represents a change of 19.54% from the current year. The current year per capita income in your area is $30,892, compare this to the US average, which is $29,962. The current year average household income in your area is $66,334, compare this to the US average which is $78,425.

PopulationIn 2016, the population in your selected geography is 9,530. The population has changed by -0.04% since 2000. It is estimated that the population in your area will be 9,403.00 five years from now, which represents a change of -1.33% from the current year. The current population is 47.61% male and 52.39% female. The median age of the population in your area is 36.52, compare this to the US average which is 37.68. The population density in your area is 3,029.84 people per square mile.

HouseholdsThere are currently 4,435 households in your selected geography. The number of households has changed by -1.42% since 2000. It is estimated that the number of households in your area will be 4,364 five years from now, which represents a change of -1.60% from the current year. The average household size in your area is 2.14 persons.

EmploymentIn 2016, there are 6,174 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 75.76% of employees are employed in white-collar occupations in this geography, and 24.22% are employed in blue-collar occupations. In 2016, unemployment in this area is 5.33%. In 2000, the average time traveled to work was 23.00 minutes.

Race and EthnicityThe current year racial makeup of your selected area is as follows: 69.36% White, 7.02% Black, 0.46% Native American and 9.31% Asian/Pacific Islander. Compare these to US averages which are: 70.77% White, 12.80% Black, 0.19% Native American and 5.36% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 17.98% of the current year population in your selected area. Compare this to the US average of 17.65%.

PROPERTY NAME

MARKETING TEAM

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HousingThe median housing value in your area was $266,683 in 2016, compare this to the US average of $187,181. In 2000, there were 2,557 owner occupied housing units in your area and there were 1,942 renter occupied housing units in your area. The median rent at the time was $621.

Source: © 2016 Experian

DEMOGRAPHICS

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DEMOGRAPHICS

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offering memorandum - loopnet...3130 occidental drive • sacramento, ca 95826 offering memorandum....

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