offering memorandum - loopnet...paragon real estate advisors is pleased to exclusively offer for...

1600 University Street | Suite 2018 | Seattle, WA 98101P 206.623.8880 | E [email protected] | ParagonREA.com

Offering Memorandum

TOWNSIDE FLATS

7910 170th Pl NE Redmond, WA

Exclusively offered by Paragon Real Estate Advisors

TRAVIS ANDREWS D 206.812.9121 [email protected]

DAVE MEISSNER D 206.623.8587 [email protected]


Offering Summary

Name Townside Flats

Address 7910 170th Pl NE, Redmond WA 98052

Total Units 39

Built 1988

Square Feet 31,360 Total Net Rentable

Price $12,900,000

Price Per Unit $330,769

Price Per Foot $411

Current GRM/CAP 15.10/4.55% (4% Vacancy)

Market GRM/CAP 14.17/4.84% (4% Vacancy)

Market Expense Per Unit $6,486/Year

Terms Cash Out

Lot Size 63,695 Square Feet

Zoning R30

Paragon Real Estate Advisors is pleased to exclusively offer for sale the Townside Flats, a 39-unit apartment building located in the highly sought-after and walkable Redmond neighborhood. The apartments have undergone many upgrades and renovations in the last three years including vinyl plank flooring and stainless steel appliances. With a Walkscore of 84 and modern looking units, Townside Flats caters well to tenants who work in the strong tech employment markets on the Eastside.

Please contact listing brokers to arrange a tour of the property or for additional due diligence materials.

Financing: It is proposed the Buyer pay all cash or obtain new financing. Luther Burbank Savings has quoted a loan amount of $7,700,000 with an interest rate of approximately 3.70%.


Investment Highlights

Rare opportunity to purchase Eastside location apartments

39 well-appointed homes

Renovated interiors including SS appliances and vinyl plank flooring

All units have washer and dryers

Well-suited mix of 1 Bd/1 Bth and 2 Bd/2 Bth units (804 Avg Sq.Ft.)

Private decks or patios

Controlled access building opening to renovated lobbies

Ample on-site parking (67 spaces)

Community areas including dog run, BBQ area, and bike storage

Located in the heart of Redmond

Close to tech employers of Microsoft, Amazon, and Google

Walkscore of 84 - Very Walkable


Neighborhood Map

BELLEVUE

SEATTLE CBD

BRIDLE TRAILS STATE PARK

REDMOND TOWN CENTER

MARYMOOR PARK

UNIVERSITY OF WASHINGTON

KIRKLAND


Redmond

Redmond is the seventh most populous city in King County and the 15th most populous city in the State of Washington. The City is located 11 miles north east of downtown Seattle, at the east end of State Route 520 along the north end of Lake Sammamish.

Redmond is well known as a center of technology and the location for a number of nationally known high-tech, gaming, aerospace and biomedical companies, as well as innovative start-ups. The daytime employment population is approximately 84,547.

Redmond has acted to maintain a strong economy and a diverse job base. The city is the home to many small, medium-size and locally owned businesses and services, as well as nationally and internationally recognized corporations. Redmond has a comprehensive Plan, known as the Redmond 2030. The plan is set in place to help the city grow, develop, and enhance the livability of the neighborhoods, and to deliver high-quality services in partnership with the community by the year 2030.

Redmond’s 2030 transportation system offers people a variety of real choices for how we get between where we live, work, shop and play. Each year, more people walk, bicycle, carpool or use transit to travel within the city to access the regional bus and light rail system because land uses that reflect our vibrant community character have created a strong market demand for these options. The City has invested strategically and leveraged regional funds to ensure a safe, well-maintained system, improve transportation choices and mobility, and support our two Urban Centers, Downtown and Overlake. Neighborhoods have increased access to the hubs of Downtown and Overlake, neighboring cities and the region.

Median Household Income: $103,409

Redmond Population: 60,560 approx.

Kirkland Population: 84,680 approx.

Bellevue Population: 139,400 approx.

**All populations obtained from the 2016 OFM King County Estimate


Location Highlights

Walkscore of 84 - Very Walkable

Ten minutes from downtown Bellevue

Twenty minutes from downtown Seattle

Convenient access to Safeway, Trader Joe’s, PCC Natural Markets and Whole Foods

Blocks to Redmond Town Center

Minutes away from Marymoor Park and Redmond Watershed Nature Preserve

Close urban heart of the city, featuring local favorite restaurants, bars and delis like the Tipsy Cow, Molly’ Moon’s Homemade Ice Cream, Mahoney’s, Palmer’s East and Woodblock

Within ten minutes of some of the largest employers in the entire region including Microsoft and Amazon

Redmond Named ‘Best Place To Live’ In Washington - (Niche.com, 2017)


Redmond Housing and Affordability

Data provided by: Zillow, O’Connor Consulting Group, LLC

Median Home Price $805,600

Avg Monthly Mortgage Payment (20% Down) $3,723

Proforma 2BD/2BTH unit at Townside $1,795

Difference $1,928

Housing Affordability and Credit Constraints: Stringent credit requirements prevent many households from entering the home ownership market, increasing demand for rental property. The median price for a home in Redmond is now $805,600, having appreciated over 18% in the last year (Zillow, Aug 2017). With a 20% down payment, a home buyer can expect to pay approximately $3,723 in monthly costs.

When the Redmond single family market median pricing is compared to the 2bd/2ba units at Townside Flats with market rents of $1,795, there is a monthly premium differential of over $1,900/month. The proforma market rents at Townside Flats are 52% more affordable than the cost of owning a home. These homeownership barriers to entry will continue to benefit Townside Flats as many would-be homeowners will continue to gravitate towards rental housing.


Top 20 Redmond Employers

1. Microsoft 34,341

2. Terex Washington & USA 2,656

3. Eurest Dining Services 1,041

4. Aerotek Inc. 978

5. Lake Washington School District 877

6. Nintendo of America 876

7. AT&T Mobility & Retail Stores 802

8. United Parcel Service 757

9. Physio-Control Inc. 706

10. Honeywell International Inc. 677

11. Aerojet 530

12. CBRE Inc. 491

13. Alstom Grid LLC 411

14. Wipro Limited 371

15. MV Public Transportation Inc. 354

16. Wyndham Vacation Ownership Inc. 318

17. Mindtree Limited 305

18. Univar USA Inc. 296

19. Pacific Bioscience Labs Inc. 290

20. Crane Electronics Inc. 266

Total 47,352

Rank Company FTE Jobs *

* Full-time equivalent number of jobs - 2016

Microsoft Main Campus, Redmond WA


Employment Map


Improvements

Townside Flats was built in 1988 and consists of a single three story wood frame building with 39 units. It has a relatively new pitched composition roof, low maintenance vinyl siding, and insulated glass thermo pane windows. The property features an abundance of parking including 26 covered and 41 uncovered parking stalls, a highly desirable amenity in the neighborhood.

The subject property has undergone many upgrades/renovations in the last three years such an improved fire alarm system, an upgraded intercom system, added lampposts at the front entrance and carports for increased visibility at night. Each carport underwent a complete re-roof. The lobby has been fully updated with new furniture, paint, and ceramic tile, wood cladding around the mailboxes, and corridor upgrades including new carpet, paint, lighting and signage. The elevator lobbies (including the 2nd and 3rd floor), received new tile flooring, paint, lighting and furniture.

The grounds of the property have also undergone a large update with the addition of new grass & flowers, removal of old trees and replacement trees planted, and a new stone tile walkway added to create another walking path between the parking

lot and side entrance. The build-out of the outdoor bike storage/work area and the dog park added great value for the tenants of Townside.

The unit mix is extremely well-tailored to the local market and consists of 8 one bedroom/one bathroom units of approximately 620 square feet and 31 two bedroom/two bathroom units of approximately 820 square feet. All units feature attractive entryways, a private deck or patio, and washers/dryers. Units have been renovated with new vinyl plank flooring, stainless steel appliance packages, tile in the kitchen and bathrooms, compact wall heaters, tri-view medicine cabinets and vanity lights, all around baseboards, quartz countertops in the kitchen and bathrooms with a 4” backsplash and new paint. Ceiling fans and energy saving light fixtures have been added as well. An abundant amount of storage is available in walk-in closets, deck storage closets, or separate storage units inside the hallways of the building. This property is well maintained, attractive, and very well located.


Renovation Highlights

Unit Renovations

Stainless steel appliance package

Washer and dryer updates

Complete refinish of cabinets

Quartz countertops in kitchens and baths

New vinyl plank flooring in living spaces

New carpet in bedrooms

Fresh paint throughout

Plumbing including sinks and fixtures

Lighting fixtures

Bathroom mirrors

Window blinds

Common Area Renovations

New exterior paint

Build out of metal entry awning

New tile and wood cladding in lobby

2nd and 3rd floor lobbies updated

New carpet and lighting in corridors

Build out of bike storage and work area

Build out of new dog park

Build out of BBQ area and deck

Updated monument signage and banners

Landscaping improvements

Elevator upgrades including lighting

Other Renovations

Complete re-roof of all carports

Repaired carport gutters

Irrigation repairs

Asphalt repair and re-striping


Proximity to Redmond Town Center

ANDERSON PARK

BEAR CREEK SHOPPING CENTER

REDMOND TOWN CENTER

MARYMOOR PARK

N

S

W

E

TOWNSIDE FLATS


Building Photos


Unit Photos


Site Map

170TH PLACE NE

OPEN PARKING

CARPORT PARKING


Floor Plans

FIRST FLOOR

101113

112

111

Storage

Stor

age

102 103

104

110 109108 107

106

105

Lobby


Floor Plans

SECOND FLOOR

201213

212

211

Storage

Stor

age

202 203

204

210 209208 207

206

205

Lobby


Floor Plans

THIRD FLOOR

301313

312

311

Storage

Stor

age

302 303

304

310 309308 307

306

305

Lobby


Typical Floor Plans

1 BD UNIT - 626 SQ.FT. AVG 2 BD UNIT - 850 SQ.FT. AVG

Bedroom Bedroom

Closet

Bath Bath

W D

Kitchen

Living Room

Deck

Bedroom Living Room

Deck

Bat

h

KitchenW/D


Potential Storage Area Renovations

General Use Lounge

Business Center

Game Lounge


Operating Summary

Units 39

Year built 1988

Rentable Area 31,360 Sq.Ft.

Down Payment $5,200,000 40%

Loan Amount $7,700,000 60%

Interest Rate 3.70% Fixed

Amortization 30 Years

Price $12,900,000

Price Per Unit $330,769

Per Square Foot $411

Current GRM 15.10

Current CAP 4.55%

Market GRM 14.17

Market CAP 4.84%

Units

Type

Size

Current Rent

Current Income

Market Rent

Market Income

8 1Bd/1Bth 626 $1,429 - $1,677 $11,889 $1,575 $12,600

31 2Bd/2Bth 850 $1,597 - $1,880 $52,160 $1,795 $55,645

39 Avg S.F. 804 $2.04 $64,049 $2.18 $68,245

Monthly Scheduled Rent $64,049 $68,245

Scheduled Gross Rents $768,588 $818,940

Less Vacancy/Concessions 4.0% ($30,744) 4.0% ($32,758)

Utility Bill Back 07/17 T12 $38,695 $38,695

Non-Refundable Fees 07/17 T12 $7,250 $7,250

Forfeits/Late/NSF Fees 07/17 T12 $6,873 $6,873

Parking/Carport 08/17 T12 $22,080 $22,080

Storage (30 Lg/39 Sm) 07/17 T12 $127 $20/$10 $5,430

Pet Fee 07/17 T12 $6,534 $6,534

Miscellaneous 07/17 T12 $4,253 $4,253

Total Collected Income $823,657 $877,298

Less Expenses ($236,896) ($252,965)

Net Operating Income $586,760 $624,333

Annual Debt Service ($35,442) ($425,301) ($425,301)

Cash Flow Before Tax 3.10% $161,459 3.83% $199,031

Principal Reduction $142,807 $142,807

Total Return Before Tax 5.85% $304,266 6.57% $341,838

Annualized Operating Expenses Current Market

Real Estate Taxes 2017 Actual $78,266 $92,457

Insurance Quote $6,996 $6,996

Utilities 07/17 T12 $46,172 $46,172

Property Management 3.5% $28,828 $30,705

On-Site Management Proforma $21,060 $21,060

Maintenance/Repairs Proforma $35,100 $35,100

Landscaping Proforma $5,850 $5,850

Advertising & Admin Proforma $5,850 $5,850

Reserves Proforma $8,775 $8,775

Total Expenses $236,896 $252,965

Annualized Operating Data Current Market

Current Operations

Expenses/Unit Expenses/Foot Percent of EGI

$6,074 $7.55 30.82%

Market Operations

Expenses/Unit Expenses/Foot Percent of EGI

$6,486 $8.07 30.89%


Sale Comparables

SUBJECT -TOWNSIDE FLATS 7910 170th Pl NE, Redmond WA

Year Built 1988 Units 39 Sales Price $12,900,000 Price/Unit $330,769 Price/Foot $411 GRM/CAP 15.1/4.6% Sales Date TBD

3. ISHERWOOD 3628 Linden Ave N, Seattle WA

Year Built 1989 Units 32 Sales Price $11,550,000 Price/Unit $360,938 Price/Foot $417 GRM/CAP 18.0/3.4% Sales Date 7.31.2017

1. SUMMIT 14820 NE Redmond Way, Redmond WA


5. STANDARD AT BELLEVUE 2801 130th Ave SE, Bellevue WA


4. PARC3 AT WOODRIDGE 3005 125th Ave SE, Bellevue WA


2. MARINWOOD 3628 24th Pl W, Seattle WA



Sale Comparables

7. MADISON GATE 2501 E Madison St, Seattle WA


8. WALLINGFORD APTS 3426 Wallingford Ave N, Seattle WA


6. RESIDENCES AT 518 518 2nd St, Kirkland WA



Sales Comparables Map

Townside Flats 7910 170th Pl NE Redmond, WA

1. Summit 14820 NE Remdond Way Redmond, WA

2. Marinwood 3628 24th Pl W Seattle, WA

3. Isherwood 3628 Linden Ave N Seattle, WA

4. Parc3 at Woodridge 3005 125th Ave SE Bellevue, WA

5. Standard at Bellevue 2801 130th Ave SE Bellevue, WA

6. Residences at 518 518 2nd St Kirkland, WA

7. Madison Gate 2501 E Madison St Seattle, WA

8. Wallingford Apts 3426 Wallingford Ave N Seattle, WA

4

5

3

1

7

8

6

2


Property Units Age Unit Type Size Rent Rent/Sq.Ft.

Townside Flats - Current7910 170th Pl NE Redmond, WA

39 19881Bd/1Bth2Bd/2Bth

626850

$1,429 - $1,677$1,597 - $1,880

$2.28 - $2.68$1.88 - $2.21

Townside Flats - Market7910 170th Pl NE Redmond, WA


626850

$1,575$1,795

$2.52$2.11

1. Heights at Bear Creek 17771 NE 90th StRedmond, WA


694 - 8891,019 - 1,195

$1,649 - $1,804$1,984 - $2,304

$2.03 - $2.39$1.93 - $1.95

2. Delano Apartments 7805 170th Pl NERedmond, WA


654 - 727962 - 1,240

$1,609 - $1,741$2,198 - $2,428

$2.39 - $2.46$1.96 - $2.28

3. Peloton Apartments 7435 159th Pl NERedmond, WA


708981

$1,837$1,887 - $1,941

$2.59$1.92 - $1.97

4. Red160 16015 Cleveland StRedmond, WA


696 - 8431,130 - 1,193

$1,712 - $1,913$2,327 - $2,562

$2.27 - $2.46$2.06 - $2.15

Rent Comparables


Property Units Age Unit Type Size Rent Rent/Sq.Ft.

Townside Flats - Current7910 170th Pl NE Redmond, WA


626850

$1,429 - $1,677$1,597 - $1,880

$2.28 - $2.68$1.88 - $2.21

Townside Flats - Market7910 170th Pl NE Redmond, WA


626850

$1,575$1,795

$2.52$2.11

5. The Luke8280 164th Ave NERedmond, WA


602 - 664961 - 1,119

$1,772 - $1,782$2,470 - $2,628

$2.68 - $2.94$2.35 - $2.57

6. Core8316590 NE 83rd StRedmond, WA


576 - 791916 - 1,114

$1,785 - $1,995$2,525 - $2,745

$2.52 - $3.10$2.46 - $2.76

7. Chelsea Square16340 NE 83rd StRedmond, WA


7511,517

$1,856$2,519

$2.47$1.66

Rent Comparables


Rent Comparables Map

Townside Flats 7910 170th Pl NE Redmond, WA

1. Heights at Bear Creek 17771 NE 90th St Redmond, WA

2. Delano Apartments 7805 170th Pl Ne Redmond, WA

3. Peloton Apartments 7435 159th Pl NE Redmond, WA

4. Red160 16015 Cleveland St Redmond, WA

5. The Luke 8280 164th Ave NE Redmond, WA

6. Core83 16590 NE 83rd St Redmond, WA

7. Chelsea Square 16340 NE 83rd St Redmond, WA

3

1

2

67

4

5


Paragon Real Estate Advisors

ABOUT PARAGON Paragon Real Estate Advisors is the leading Seattle real estate investment firm for multi-family property sales in Washington State. We have accrued over $3 billion in sales and have closed nearly 1,700 successful real estate transactions. We are locally owned, client-focused and highly experienced. When it comes to apartments and investment real estate in the Puget Sound region, we are the smart choice to partner with. At Paragon, we build long-term partnerships that help our clients reach their long- and short-term real estate investment goals while maintaining maximum profitability for them. Our brokers have an in-depth knowledge of the Washington state real estate market, particularly in the greater Seattle area and the I-5 corridor, that comes from more than 20 years’ experience in the industry. Paragon’s unique focus on sharing knowledge, teamwork and collaboration within the brokerage industry leverages our collective intellect for all our clients. Our brokers provide superior customer representation through our innovative and effective marketing campaigns, co-brokerage, skilled negotiations, and ongoing partnerships.

The information found in this offering memorandum has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies.

offering memorandum - loopnet...paragon real estate advisors is pleased to exclusively offer for...

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