watauga manor - constant...

WATAUGA MANOR5052-A Watauga Road, Fayetteville, NC

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. © 2016

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.

WATAUGA MANOR

Fayetteville, NC

ACT ID Y0520010

TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01Offering Summary

Regional Map

Local Map

Aerial Photo

FINANCIAL ANALYSIS 02Rent Roll Summary

Rent Roll Detail

Operating Statement

Notes

Pricing Detail

Acquisition Financing

MARKET COMPARABLES 03Comparables

Rent Comparables

MARKET OVERVIEW 04

Demographic Analysis

WATAUGA MANOR

WATAUGA MANOR

4

INVESTMENT

OVERVIEW

WATAUGA MANOR

#

EXECUTIVE SUMMARY

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

Cape Fear Valley Health System 2,711

Cape Fear Valley Medical Ctr 2,711

County of Cumberland 1,320

Cracker Barrel 1,291

Saic 1,165

US Post Office 1,133

United Services Auto Assn 1,082

Fayetteville State University 1,007

Facet Purolator 800

Walmart 775

Easter Seals Ucp NC & VA 727

McDonalds 643

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2015 Estimate Pop 8,856 74,024 161,179

2010 Census Pop 9,157 74,429 160,162

2015 Estimate HH 3,730 31,122 65,479

2010 Census HH 3,845 31,280 64,932

Median HH Income $35,883 $43,362 $43,528

Per Capita Income $19,593 $25,245 $23,878

Average HH Income $46,439 $59,894 $58,387

UNIT MIX

NUMBEROF UNITS

UNIT TYPEAPPROX.SQUARE FEET

24 1 Bedroom 604

56 2 Bedroom 836

80 Total 61,312

5

VITAL DATA

Price $2,720,000 CURRENT YEAR 1

Down Payment 30% / $816,000 CAP Rate 7.81% 9.70%

Loan Amount $1,904,000 GRM 5.62 5.30

Loan Type Proposed NewNet Operating Income

$212,334 $263,934

Interest Rate / Amortization 5.00% / 25 YearsNet Cash Flow After Debt Service

9.65% / $78,766 15.98% / $130,367

Price/Unit $34,000 Total Return 14.46% / $118,025 21.03% / $171,634

Price/SF $44.36

Number of Units 80

Rentable Square Feet 61,312

Year Built 1983

Lot Size 5.65 acre(s)

WATAUGA MANOR

#

OFFERING SUMMARY

Desirable unit mix

Stabilized tenant pool

Value add opportunity

INVESTMENT HIGHLIGHTS

The Watauga Manor Apartments complex (80 units) and the contiguous Oakdale Apartments complex (118 units) offer a promising opportunity for an investor. The

Watauga Manor Apartment complex contains 24 1 BR and 56 2 BR units, which were built in 1983. The current occupancy for this complex is 90. New management has

significantly improved revenues and occupancies. The units in this complex are individually metered for both water and electricity, which are paid for by the tenants. The

current expenses for the property are at approximately 52% of EGI, but with an increasing occupancy, an investor can expect to bring expenses down to 45% of EGI. The

property is expected to generate approximately a 9.5% cash on cash return for an investor.

Fayetteville, NC is best-known as being the home of Fort Bragg, the major United States Army base just northwest of the city. The population of over 210,000 people in the

Fayetteville MSA is the fifth largest in the state of North Carolina, and it should be noted that this figure includes the population of Fort Bragg. The Department of Defense (Fort

Bragg) is the by far the largest employer in the city, followed by the school and health systems. Also located in the city are eight of the top ten defense contractors, such as

Lockheed Martin, Boeing, Northrup Grumman, General Dynamics, and L-3 Communications.

INVESTMENT OVERVIEW

6

REGIONAL MAP

WATAUGA MANOR

7

LOCAL MAP

WATAUGA MANOR

8

AERIAL PHOTO

WATAUGA MANOR

9

WATAUGA MANOR

10

FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS

WATAUGA MANOR

RENT ROLL SUMMARY

11

FINANCIAL ANALYSIS

WATAUGA MANOR

OPERATING STATEMENT

12

FINANCIAL ANALYSIS

WATAUGA MANOR

PRICING DETAIL

13

MARCUS & MILLICHAP CAPITAL CORPORATION

CAPABILITIES

MMCC—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 financing

and work tirelessly to resolve all potential issues to the benefit of our clients.

National platform

operating

within the firm’s

brokerage

offices

$4.9 billion

total national

volume in 2015

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 1,601

debt and equity

financings

in 2015

ACQUISITION FINANCING

WATAUGA MANOR

14

WATAUGA MANOR

15

MARKET

COMPARABLES

8

WATAUGA MANOR

SALES COMPARABLES MAP

16

1

2

3

WATAUGA MANOR

(SUBJECT)

Woodstream

Angel's Court

Kensington Court

Apartments

SALES COMPARABLES

17

PROPERTY NAMEWATAUGA MANOR

COMPARABLESSALES COMPARABLES SALES COMPS AVG

Avg. 8.67%

0

1

2

3

4

6

7

8

9

10

11

Watauga

Manor

Woodstream Angel's

Court

Kensington

Court

Apartments

Average Cap Rate

18


COMPARABLESSALES COMPARABLES SALES COMPS AVG

Avg. $32

$0

$5

$9

$14

$18

$23

$28

$32

$37

$41

$46

Watauga

Manor

Woodstream Angel's

Court

Kensington

Court

Apartments

Average Price Per Square Foot

Avg. $31,550

$0

$4,000

$8,000

$12,000

$16,000

$20,000

$24,000

$28,000

$32,000

$36,000

$40,000

Watauga

Manor

Woodstream Angel's

Court

Kensington

Court

Apartments

Average Price Per Unit

PROPERTY NAME

MARKETING TEAM

WATAUGA MANOR

COMPARABLES

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


19

SALES COMPARABLES


673 VISTA ISLE DRIVE

673 VISTA ISLE DRIVE, SUNRISE, FL, 33325

WATAUGA MANOR

5000 WATAUGA RD, FAYETTEVILLE, NC, 28304

Units Unit Type

Offering Price: $2,720,000 24 1 Bdr

Price/Unit: $34,000 56 2 Bdr

Price/SF: $44.36

CAP Rate: 7.81%

GRM: 5.62

Total No. of Units: 80

Year Built: 1983

Underwriting Criteria

Income $451,755 Expenses $239,421

NOI $212,334 Vacancy ($54,786)

425 WOODSTREAM TRAIL, FAYETTEVILLE, NC, 28314

WOODSTREAM

1

Units Unit Type

Close Of Escrow: 4/1/2016 64 1 Bdr 1 Bath

Sales Price: $5,800,000 138 2 Bdr 2 Bath

Price/Unit: $28,713

Price/SF: $33.00

CAP Rate: 8.00%


Year Built: 1974


NOI $464,000 Expenses $1,020,000

817 RIDGE RD, FAYETTEVILLE, NC, 28311

ANGEL'S COURT

Units Unit Type


Sales Price: $1,150,000

Price/Unit: $35,938

Price/SF: $31.00

CAP Rate: 10.0%


Year Built: 1974


NOI $115,000

2

PROPERTY NAME

MARKETING TEAM

WATAUGA MANOR

COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


20

SALES COMPARABLES

Units Unit Type


Sales Price: $900,000

Price/Unit: $30,000

Price/SF: $32.00

CAP Rate: 8.00%


Year Built: 1968


NOI $70,800

KENSINGTON COURT APARTMENTS

3

6467 YADKIN RD, FAYETTEVILLE, NC, 28303

8

WATAUGA MANOR

RENT COMPARABLES MAP

WATAUGA MANOR

(SUBJECT)

Cross Creek Cove

Falcon Village Lodge

Treetop Apartments

Miller Avenue Apartments4

7

8

9

11

20

12

14

15

16

17

13

18

10

4

1

2

3

21


COMPARABLES

22

AVERAGE OCCUPANCY

Avg. 95.20%

0

10

20

30

40

50

60

70

80

90

100

Watauga

Manor

Cross

Creek Cove

Falcon

Village

Lodge

Treetop

Apartments

Miller

Avenue

Apartments


COMPARABLES

23

AVERAGE RENT - MULTIFAMILY

Avg. $507

$0

$60

$120

$180

$240

$300

$360

$420

$480

$540

$600

Watauga

Manor

Cross

Creek Cove

Falcon

Village

Lodge

Treetop

Apartments

Miller

Avenue

Apartments

1 Bedroom

Avg. $643

$0

$70

$140

$210

$280

$350

$420

$490

$560

$630

$700

Watauga

Manor

Cross

Creek Cove

Falcon

Village

Lodge

Treetop

Apartments

Miller

Avenue

Apartments

2 Bedroom

PROPERTY NAME

MARKETING TEAM

WATAUGA MANOR

RENT COMPARABLES

WATAUGA MANOR


WATAUGA MANOR


WATAUGA MANOR


24

YEAR BUILT: 1983

WATAUGA MANOR


Unit Type Units SF Rent Rent/SF

1 Bdr 24 604 $436.19 $0.72

2 Bdr 56 836 $508.42 $0.61

Total/Avg. 80 766

CROSS CREEK COVE855 KING ARTHUR DR, FAYETTEVILLE, NC, 28314

OCCUPANCY: 95% | YEAR BUILT: 1984

1


1 Bdr 1 Bath 15 660-660 $499-$499 $0.76

2 Bdr 1 Bath 12 880-880 $645-$645 $0.74

2 Bdr 1.5 Bath 96 980-980 $660-$660 $0.68

2 Bdr 2 Bath 142 1,000-1,000 $725-$725 $0.73

Total/Avg. 265 968 $685 $0.71

FALCON VILLAGE LODGE6319 RAEFORD RD, FAYETTEVILLE, NC, 28304

2


1 Bdr 1 Bath 108 700-700 $499-$499 $0.72

Total/Avg. 108 700 $499 $0.71


PROPERTY NAME

MARKETING TEAM

WATAUGA MANOR

RENT COMPARABLES

TREETOP APARTMENTS

910 GREENLEAF DR, FAYETTEVILLE, NC, 28314

TREETOP APARTMENTS


TREETOP APARTMENTS


25

TREETOP APARTMENTS910 GREENLEAF DR, FAYETTEVILLE, NC, 28314


3


1 Bdr 1 Bath 145 650-650 $574-$583 $0.89

Total/Avg. 145 650 $579 $0.89

MILLER AVENUE APARTMENTS712 MILLER AVE, FAYETTEVILLE, NC, 28304


4


1 Bdr 1 Bath 23 650-650 $453-$453 $0.70

2 Bdr 1 Bath 1 1,000-1,000 $590-$590 $0.59

Total/Avg. 24 665 $459 $0.69

WATAUGA MANOR

26

MARKET

OVERVIEW

PROPERTY NAME

MARKETING TEAM

WATAUGA MANOR

DEMOGRAPHICS

Source: © 2016 Experian

Created on March 2017

POPULATION 1 Miles 3 Miles 5 Miles

2020 Projection

Total Population 8,755 76,242 166,785

2015 Estimate


2010 Census


2000 Census


Daytime Population

2015 Estimate 14,658 80,965 178,428

HOUSEHOLDS 1 Miles 3 Miles 5 Miles

2020 Projection

Total Households 3,751 32,548 68,485

2015 Estimate


Average (Mean) Household Size 2.41 2.37 2.42

2010 Census


2000 Census


Growth 2015-2020 0.56% 4.58% 4.59%

HOUSING UNITS 1 Miles 3 Miles 5 Miles

Occupied Units

2020 Projection 3,751 32,548 68,485

2015 Estimate 4,303 35,045 74,362

Owner Occupied 1,827 15,725 34,109

Renter Occupied 1,903 15,397 31,370

Vacant 573 3,923 8,883

Persons In Units

2015 Estimate Total Occupied Units 3,730 31,122 65,479

1 Person Units 31.98% 30.74% 29.60%

2 Person Units 31.88% 33.41% 32.81%

3 Person Units 16.17% 16.80% 17.64%

4 Person Units 10.80% 11.05% 11.64%

5 Person Units 5.20% 4.92% 5.19%

6+ Person Units 3.97% 3.08% 3.13%

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles

2015 Estimate

$200,000 or More 0.71% 2.41% 1.98%

$150,000 - $199,000 1.37% 2.51% 2.40%

$100,000 - $149,000 4.51% 7.80% 8.43%

$75,000 - $99,999 6.77% 9.68% 10.73%

$50,000 - $74,999 20.70% 20.32% 19.99%

$35,000 - $49,999 16.98% 17.49% 16.12%

$25,000 - $34,999 17.30% 14.04% 13.08%

$15,000 - $24,999 16.56% 12.47% 12.65%

Under $15,000 15.11% 13.28% 14.64%

Average Household Income $46,439 $59,894 $58,387

Median Household Income $35,883 $43,362 $43,528

Per Capita Income $19,593 $25,245 $23,878

POPULATION PROFILE 1 Miles 3 Miles 5 Miles

Population By Age

2015 Estimate Total Population 8,856 74,024 161,179

Under 20 26.97% 27.03% 27.86%

20 to 34 Years 25.97% 28.27% 26.66%

35 to 39 Years 5.62% 5.69% 5.91%

40 to 49 Years 11.24% 11.02% 11.79%

50 to 64 Years 17.24% 16.05% 16.36%

Age 65+ 12.97% 11.97% 11.40%

Median Age 32.96 31.52 31.90

Population 25+ by Education Level

2015 Estimate Population Age 25+ 5,689 46,930 101,430

Elementary (0-8) 3.52% 2.73% 2.98%

Some High School (9-11) 8.70% 6.63% 7.37%

High School Graduate (12) 35.33% 25.86% 25.75%

Some College (13-15) 27.78% 26.93% 26.88%

Associate Degree Only 9.80% 10.69% 10.68%

Bachelors Degree Only 9.69% 16.52% 16.29%

Graduate Degree 4.37% 9.79% 9.09%

Population by Gender

2015 Estimate Total Population 8,856 74,024 161,179

Male Population 47.83% 48.19% 47.89%

Female Population 52.17% 51.81% 52.11%

27

Income

In 2016, the median household income for your selected geography is

$35,883, compare this to the US average which is currently $54,148.

The median household income for your area has changed by -0.50%

since 2000. It is estimated that the median household income in your

area will be $41,495 five years from now, which represents a change

of 15.64% from the current year.

The current year per capita income in your area is $19,593, compare

this to the US average, which is $29,638. The current year average

household income in your area is $46,439, compare this to the US

average which is $77,468.

Population

In 2016, the population in your selected geography is 8,856. The

population has changed by -4.50% since 2000. It is estimated that

the population in your area will be 8,755.00 five years from now,

which represents a change of -1.14% from the current year. The

current population is 47.83% male and 52.17% female. The median

age of the population in your area is 32.96, compare this to the US

average which is 37.55. The population density in your area is

2,818.04 people per square mile.

Households

There are currently 3,730 households in your selected geography. The

number of households has changed by 2.30% since 2000. It is

estimated that the number of households in your area will be 3,751

five years from now, which represents a change of 0.56% from the

current year. The average household size in your area is 2.41 persons.

Employment

In 2016, there are 3,432 employees in your selected area, this is also

known as the daytime population. The 2000 Census revealed that

50.72% of employees are employed in white-collar occupations in

this geography, and 48.84% are employed in blue-collar occupations.

In 2016, unemployment in this area is 5.85%. In 2000, the average

time traveled to work was 21.00 minutes.

Race and Ethnicity

The current year racial makeup of your selected area is as follows:

47.33% White, 36.36% Black, 0.40% Native American and 2.09%

Asian/Pacific Islander. Compare these to US averages which are:

70.98% White, 12.77% Black, 0.19% Native American and 5.25%

Asian/Pacific Islander. People of Hispanic origin are counted

independently of race.

People of Hispanic origin make up 14.38% of the current year

population in your selected area. Compare this to the US average of

17.53%.

PROPERTY NAME

MARKETING TEAM

WATAUGA MANOR

Housing

The median housing value in your area was $94,804 in 2016, compare

this to the US average of $185,104. In 2000, there were 2,181 owner

occupied housing units in your area and there were 1,465 renter

occupied housing units in your area. The median rent at the time was

$475.

Source: © 2016 Experian

DEMOGRAPHICS

28

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