waterside apartments · 2019. 1. 16. · waterside apartments is a prime value-add opportunity that...

1 | Waterside Apartments - Brownsville, Texas

Waterside Apartments4200 Boca Chica Boulevard | Brownsville, Texas

Confidential Offering Memorandum


Exclusive representation

Offering structure

Communication

All offers should include

JLL is exclusively representing the seller in the disposition of Waterside Apartments.

Waterside Apartments “The Property” is being offered on an All-Cash basis. Seller reserves the right to accept an offer at any time during the marketing period. To schedule a property inspection or receive answers to questions, please contact the representatives listed. Please do not contact on-site property management.

All communications, inquiries and requests should be addressed to the JLL Team, as representatives of the Seller. Management at the property should not be directly contacted. The seller reserves the right to remove the property from the market. Seller expressly reserves the right, in its sole and absolute discretion, to reject any and all proposals or expressions of interest in the property, to terminate discussions with any party at any time or to extend the deadlines set forth in the time schedule.

• Proposed Purchase Price (All Cash)

• Amount of earnest money, amount non-refundable

• Summary of closed transactions with references

• Timing for inspection period and closing

• Source of funds for the acquisition

For More Information, Contact: For Financing Information, Contact:

Zar HaroSenior Vice [email protected]

CW SheehanVice President512 593 [email protected]

Moses SillerSenior Vice [email protected]

Robert ArzolaVice [email protected]


ContentsExecutive Summary 04

Property Overview 09

Location Overview 15

Financial Overview 22

Market Rent Comparisons 26


SummaryExecutive summaryWaterside Apartments


The OfferingProperty Summary

JLL is pleased to offer the opportunity to acquire Waterside Apartments, a premier “value-add” asset consisting of 120 units located in Brownsville, Texas. Given the Property’s ideal location near the busiest intersection in Brownsville the “Four Corners”, coupled with its strong historic performance and “value-add” potential, Waterside Apartments is strategically positioned as a value-enhancement opportunity that allows a new owner to increase effective rental rates and realize greater potential returns on their investment.

Address 4200 Boca Chica BlvdBrownsville, Texas

Year Built 1983

Number of Units 120

Number of Floors 2

Net Rentable Area (SF) 77,760

Avg. SF per Unit 648

Occupancy (as of 11.30.18) 93.3%%

Renovation PMR 11.30.18) $1,049,616

Renovation Rent/SF 11.30.18) 1.13

Land Area 5.47

Density 21.94

Parking Spaces 222

Parking Ratio (Per Unit) 1.85

Price To Be Determined

Waterside Apartments | Executive Summary

Waterside Apartments is ideally located less than a mile away from the busiest intersection in Brownsville, the “Four Corners”; this highly utilized intersection sees over 111,785 cars per day. As well as its ideal location near the Four Corners, Waterside Apartments is located adjacent to one of Brownsville’s famous resacas that flow throughout the city. This ideal location offers tenants a great water’s edge view while being located near the masses and all of what Brownsville has to offer.

Waterside Apartments is poised to take advantage of major income increases. The Property is primed for a full, interior “value-add” renovation package to be implemented with light exterior maintenance needed. With the Property’s continuously strong historic performance, a new owner could undoubtedly see a great increase in rental rates and return on investment with fully upgraded property interiors and light exterior play.


The Value Add Interior Renovation Play

JLL suggests a full interior renovation program with a light exterior upgrade. There is little exterior work needed at Waterside Apartments and most of the upgrade budget can be spent on true revenue increasing upgrades to the unit interiors. As there are currently no value-add opportunities completed in Brownsville, JLL believes a new owner could seize the opportunity and implement a ‘full-premium’ renovation program at Waterside Apartments and be the first to bridge the gap between Class A and B/C apartments in the market.

There is potential for Waterside Apartments to increase rental rates to the true average that the market justifies. JLL believes that with Waterside Apartments being the first “renovated” property in Brownsville the market will be eager for gap between Class A and B/C to be filled, but tentative at first with the large $/unit increase. JLL suggests starting with a $125/unit increase, which we believe the market will be more receptive in accepting starting out.

The $125 Suggested Renovation Premium increase will result in a $180,000 increase in potential annual revenue which results an increase in value by nearly $2.9MM at a 6.25% Cap rate. JLL believes the main starting point for Waterside Apartments is to start filling in the gap between the asset and the Class A properties surrounding the market. Upon adding the interior renovation package and exterior maintenance, we believe a new owner could position themselves within the current gap between the Property’s average competitors and where Waterside Apartments currently stands. JLL is suggesting a $125 increase per unit at the start of the renovation package; we believe the market could be very receptive to this change and willing to accept it. A new owner could then naturally progress the per-unit increase to the 151 average over the hold period, which the market proves out. Also, given the large gap between current in-place rents and market leader premium, there is still plenty of push room for rental increases that can be easily justifiable within the submarket.

Investment Thesis


Floorplan Units Waterside In- Place Rents Avg. Comp. Rent Per unit

Average Increase potential Market Leader Rent Market Leader

Premium

1 Bedroom Units 47 $538 $691 153 $890 $352

2 Bedroom Units 73 $631 $780 $149 $980 349

Average/Summary 120 $591 $745 $151 $944 353

Units Suggested Increase Per Unit Annual Income increase Potential

Suggested Renovation Premium 120 $125 $180,000

Investment HighlightsHigh-Quality Location

Waterside Apartments is strategically located near what most consider the pulse of Brownsville, Texas. The “Four Corners” is a booming intersection located less than a mile from the Property and offers access to every major employer and retailer in the market area. Adding to the allure of the Property is the organic nature views of one of the local resacas that flow throughout Brownsville, located adjacent to Waterside Apartments. The Property offers what every opportune renter wants, that is quality location near major commercial activity and home style views with the adjacent area.

Value-Add Opportunity

Waterside Apartments is primed to take full advantage of a full-interior and light-exterior renovation kit. With Brownsville currently offering zero value-add properties in the market, a new owner could be the first to renovate an asset that falls in the major gap that as been created between lower class properties and new construction in the market. By filling in this gap the newly renovated asset will be able to offer a higher level of finish outs, while maintaining competitive rental rates for renters seeking a more affordable option in the market. JLL believes a new owner could increase rents by $125 per unit providing an extra $180,000 in annual income. With the full renovation package, a new buyer could see a drastic increase in rental rates and overall increase in the value of the asset itself.

Property Performance

Due to the properties exquisite location in the market near major connectors and retailers, the Property has continued to show consistent improvements on property performance over the course of ownership. The Brownsville submarket has an average occupancy of 93%, proving the high demand for multifamily in the area. Waterside Apartments has reflected this trend by consistently staying above 90% in occupancy, and currently showcasing an occupancy of 93.3%. It is easy to attest that this trend could continue with the Property after the suggested renovations are made.

Tight Rental Market

Brownsville has consistently been a tight rental market and held an average submarket occupancy of 93%. Given the growth of the Rio Grande Valley, with the involvement of a multitude of corporate investors and the creation of several new jobs in Cameron County alone, there has been a rise in the number of renters by necessity in the market. With the continuous growth in the area, we can see a great deal of rental demand which has kept occupancy high in the area, keeping a tight rental market. Economists forecast this trend to continue and are projecting occupancy trends to rise up to a market average of 95% by 2023. .

Recent Renovations

A number of renovations were made to the Property within the year 2017. Exterior renovations to the pool, staircases and balconies have been completed and the retaining wall to the resaca has been rebuilt. Interior renovations, such as updating appliances, A/C units, carpet and tile have been completed within the units.



Waterside Apartments



Waterside Apartments is poised to take advantage of an interior unit “value-add” upgrade program. By implementing the following kit, a new owner could capitalize on revenue growth while increasing returns through higher rental rates that will “fill in” the current gap between Class A and Class B/C properties within the immediate market. Along with the interior renovations, a light exterior program could be implemented to include upgrading the signage to a more modern look, replacing the wood trim and gables, light work updating the carpentry, resurfacing the parking lot and restriping, and adding new pool furniture. The current top-of-market competitors are adding in fitness centers, business centers, pet parks, BBQ areas, and on the interior side, adding in black or stainless-steel appliances with granite or quartz countertops and washer/dryer connections.

Waterside Apartments is a prime value-add opportunity that is currently performing at 92% occupancy and averages an in-place rental rate of $590 per unit per month. With a property-wide unit enhancement kit, Waterside Apartments is primed to take advantage of the high demand for higher-end finish outs at an affordable price. Over the course of new ownership, we believe the Property could garner a rent increase of $125 per unit, while spending $2,500 per unit to upgrade. JLL believes the in-place rents are $176 below the competitive current market rent, and a new owner could easily achieve $125 in rental premium while keeping the loss-to-lease to its same minimum each month. As such, JLL believes a new owner could increase income by over $180,000, which would result in a drastic increase in value, nearly $2.9 Million at a 6.25% cap rate.

A new owner has the opportunity to complete the renovation process with an even higher level of finish-out, which would generate greater rent. The suggested value-add program could consist of upgrading the unrenovated units as follows:

Update Pulls & Hardware

Update Pulls & Hardware

Black or Stainless Appliances

Two-Tone PaintTwo-Tone Paint

Resurface Counter Tops



Brushed Nickel Faucets

Brushed Nickel Faucets

Interior RenovationsUpdate Lighting

Update Lighting

Resurface Cabinets


PropertyProperty OverviewWaterside Apartments


Waterside Apartments | Property Overview

The PropertyYear Built 1983

Average Unit Size 648

Number of Units 120

Number of Buildings 9

Occupancy 93.3

School District Brownsville ISD

Elementary School Egly Elementary School

Middle School Faulk Middle School

High School Rivera High School

University University of Texas Rio Grande Valley

Texas Southmost College

Water/Sewer Who Pays

Water/Sewer Property pays

Electricity Individually metered

Gas/Fuel Property pays

Trash Property pays

Personnel Manager, Maintenance, Porter, Housekeeper

Framing/Exterior Walls Brick & Wood

Foundation/Floor Structure Concrete

Roofs Pitched Shingle

Fenestration Single Pane Windows

Doors Interior & Exterior - Wood

Parking 222 Spaces

Land Area 5.47

Managed By Tarantino Properties

Elevator/ Stairs Exterior Stairwells

HVAC Central, 1.5 and 2 Ton Condensing Units 14 Seer

Security/Fire System Battery Operated Smoke Detectors

Tenant-Paid Utilities Electric

Landlord Charges Rent

Density (units/acre) 21.94

Property Quick Facts

Education

Utilities

Property Details


• Breathtaking Sunrise Patio Views of Adjacent Resaca• Beautifully Manicured Grounds• Sparkling Swimming Pool• Convenient Clothes Care Facility• On Bus Route• Short Drive to a multitutde of shopping, dining and the airport• 24-Hour Answering Service• Pet Friendly• Professional Management Team

CommunityAmenitiesWaterside Apartments | Property Overview


• Energy-Efficient Air Conditioning/Heating• Window Mini-Blinds & Patio Blinds• Serving Bar• Spacious Kitchen Countertops & Cabinets•Frost Free Refrigerator/Freezer• Dishwasher & Disposal• Electric Range with Oven• Large Pantry Closet• Expansive Wardrobe Closets• Linen Closet (In Two Bedroom Plan)• Patio or Balcony• Pre-Wired for Telecommunications and Cable/Internet


Interior Amenities


Common floor plans

One BedroomOne bedroom • One bath504 Square feet

Two BedroomTwo bedroom • One bath740 Square feet



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A&V LopezSupermarket

Port ofBrownsville

Future Site ofSpaceX Launch

Facility

South PadreIsland

Boca ChicaCafe

Frida’s CafeFresh King Seafood

OlveriaMiddle School

EglyElementary

School

Aerial



LocationLocation overviewWaterside Apartments


Waterside Apartments | Location Overview

Brownsville ranks #7 on Top Ten Cities with the

Fastest-Growing Incomes

Source: NerdWallet.com

Brownsville ranks #10 on list of “Best Cities for

Future Growth”

Source: Forbes

Brownsville’s Foreign Trade Zone ranked #1 in

the nation for “Exports to Foreign Countries”

Source: 2013 FTZ Annual Report to Congress

PORT OF BROWNSVILLE• Approximately 40,000 acres of land• Over 1 Million SF of Covered Storage

• Employs over 44,000 residents• Has a $3 billion annual state economic impact

• Top 2 in the U.S. in foreign trade zone



INDUSTRY POWERHOUSE

HIGHER EDUCATION

TRAVEL & TOURISM

Brownsville’s economy is led by education, mining, quarrying, oil, gas, oil and gas storage, retail trade, automotive manufacturing, and ship building.

Brownsville has invested heavily in its school district and public universities program. The energy of the youth combined with the higher education are expected to have a significant social and economic impact in Brownsville. Institutions of higher education include: The University of Texas Rio Grande Valley, Texas Southmost College

Tourists spend over $14 million annually visiting the Brownsville area



CORPORATE INVESTMENTRio Grande LNG (RGLNG) | The RGLNG is a natural gas liquefaction and Liquefied Natural Gas export project. The facility, which will sit over 600 acres in the Port of Brownsville, will be supplied with natural gas from a new natural gas pipeline, Rio Bravo Pipeline. The permitting process with the Federal Energy Regulatory Commission (FERC) began in 2015 and in early March 2018 received another wave of good news by the Texas Commission of Environment Quality (TCEQ) stating that the RGLNG facility meets and exceeds state and federal air quality standards. The permitting process is very lengthy and requires over 10 federal and state agencies to be on the same page. Insiders believe that there will be an announcement in late 2018.

Rio Bravo Pipeline | The Rio Bravo Pipeline is a pipeline system that will include two, parallel, 42-inch-outside-diameter, 137.5-mile feed gas pipelines. The system will commence in Kleberg and Jim Wells Counties and will terminate at the delivery point, which will be located adjacent to the proposed Rio Grande Terminal near the Port of Brownsville. The Rio Bravo Pipeline will be phased to meet the required operational needs of the Rio Grande LNG facility.

Big River Steel | Arkansas based Big River Steel is considering a $1.5 Billion steel mill in the Port of Brownsville. There are currently two sites that have made the final selection process, Brownsville is one of them. Big River Steel has a completely self-contained LEED-certified mill in Arkansas, this one of a kind project would be replicated in South Texas. This would land hundreds of blue collar jobs that will likely pay $75,000 in an area where the average wages are below $35,000. The selection committee has made over 21 trips to South Texas this year and look forward to find a new home for their Flex Mill, a steel mini mill focused on the production of wide product spectrum, including advanced automotive and electrical steels.

SpaceX | Space Exploration Technologies Corp is an aerospace company founded by Elon Musk with the goal of commercializing space exploration. In 2014, Elon Musk announced that SpaceX would be developing a launch site in South Texas with the goal of launching one rocket a month. Construction of the highly antisipateed site is still underway, but is projected to be completed in early 2019. Now, with SpaceX coming up on 70 completed launches and 35 more planned in the near future the Boca Chica site is presumed to take over as soon as construction is completed.



BROWNSVILLE’S BUSIEST INTERSECTIONWaterside Apartments is located less than a mile away from Brownsville’s busiest intersection, known as the “Four Corners”. With easy access to Highway 69 and South Padre Island Highway, residents can quickly get on the highway to the major employers and retail destinations located throughout the city. Waterside Apartments is near an array of dining and retail options, as well as an elementary, middle, and high school, all of which are within a short driving distance. With over 111,785 cars per day crossing the “Four Corners” intersection, this is one of the busiest and highest traffic areas in Brownsville.

The Property also offers access to a multitude of other locational amenities. Waterside Apartments is located just minutes from several major retailers and dining options. The site has access to shopping essentials like H.E.B and Walmart, both less than 2 miles from the Property, and is located less than 2 miles away from the Brownsville South Padre Island International Airport. That all only compares to the unprecedented naturistic views offered by Waterside Apartments being conveniently located near one of Brownsville’s Resaca’s that flow through the city. The Adjacent Resaca offers a waterside view that is unmatched by other properties in the submarket, that gives the tenant a feel of rural living while offering the locational benefits of urban locations. With all the convenience around the location, it is easy to see why occupancy has stayed trending north of 90%.

Top Employers in Brownsville

Employer Sector # of Employees Employer Sector # of Employees

Brownsville Independent School District Education 7708 Valley Baptist Medical Center Medical/Healthcare 738

Caring for you Home Health Medical/Healthcare 2632 Teleperformance Business Processing 564

Cameron County Government 2040 Stripes Oil/Gas 550

University of Texas at Brownsville Education 1625 Brownsville Public Utilities Board Utility Service 498

Keppel Amfels Manufacturing 1400 ESCO Marine Industrial 470

City of Brownsville Government 1200 Trico Technologies Manufacturing 420

Abundant Life Home Health Medical/Healthcare 1200 Texas Southmost College Education 401

Wal-Mart Retail 1055 National Electric Coil Manufacturing 311

H-E-B Grocery Retail 975 All Star Metals Manufacturing 293

Valley Regional Medical Center Medical/Healthcare 786 Rich SeaPak Manufacturing 262

Retail, Entertainment & Dining Drivability

Shop Name Description Distance Shop Name Description Distance

Family Dollar Retail 0.19 Advanced Auto Parts Retail 1.01

A&V Lopez Supermarket Grocery 0.33 H-E-B Grocery 1.03

Subway Dining 0.42 Domino's Dining 1.04

Stripes Gas Station 0.55 Pizza Hut Dining 1.06

Walgreens Convenience Store 0.92 Raising Cane's Dining 1.09

CVS Convenience Store 0.92 Wells Fargo Bank Bank 1.11

McDonald's Dining 0.93 Storage Depot Retail 1.19

Exxon Gas Station 0.98 La Michoacana Meat Market Grocery 1.30

The Home Depot Retail 1.01 Jack in the Box Dining 1.37

Chick-fil-A Dining 1.01 T-Mobile Retail 1.63



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BOCA CHICA BLVD

BOCA CHICA BLVDWaterside Apartments

just down the road

The OysterBar

Porter EarlyCollege High

School

University ofTexas Rio

Grande ValleyVeterans InternationalBridge Los Tomates


DemographicsDescription 1 Mile Radius Totals 3 Mile Radius Totals 5 Mile Radius Totals

Population 2000 Census 13,502 90,668 144,163

2010 Census 13,910 94,876 163,425

2018 Estimate 14,395 96,900 168,156

2022 Projection 14,953 100,167 174,372

2018 Est. Median Age 30.12 30.26 30.61

2018 Est. Average Age 33.47 33.99 34.15

Households 2000 Census 3,717 23,680 38,858

2010 Census 4,033 26,569 46,344

2018 Estimate 4,274 27,683 48,159

2022 Projection 4,472 28,803 50,094

2018 Est. HHs by HH Income Income Less than $15,000 24.6% 26.8% 24.6%

Income $15,000 - $24,999 18.0% 17.8% 16.4%

Income $25,000 - $34,999 12.5% 12.2% 11.6%

Income $35,000 - $49,999 14.7% 13.7% 13.2%

Income $50,000 - $74,999 15.9% 15.1% 16.3%

Income $75,000 - $99,999 7.4% 6.8% 7.8%

Income $100,000 - $124,999 3.0% 3.6% 4.5%

Income $125,000 - $149,999 1.1% 1.7% 2.3%

Income $150,000 - $199,999 1.7% 1.4% 1.8%

Income $200,000 - $249,999 0.7% 0.5% 0.7%

Income $250,000 - $499,999 0.4% 0.4% 0.7%

Income $500,000 and more 0.1% 0.1% 0.2%

2018 Est. Average Household Income $42,901 $41,756 $47,2912018 Est. Median Household Income $30,567 $28,978 $32,527

2018 Est. Tenure of Occupied Housing Units Owner Occupied 55.76% 56.78% 59.60%

Renter Occupied 44.24% 43.22% 40.40%

2018 Est. Median All Owner-Occupied Housing Value $75,059 $71,008 $79,776



FinancialFinancial overviewWaterside Apartments


Waterside Apartments | Financial Overview

Value-add Pro Forma Income AssumptionsThe following financial analysis and corresponding income and expense nomenclature are presented in a format that is similar to the actual income and expense statements prepared by the owner.

Potential market rent (PMR):JLL assumes the PMR to be set to $610 per unit per month which is in line with the current property’s market rent.

Vacancy:JLL assumes a 5% vacancy factor

Concessions:Concessions are set to 0.17% of potential market rent, which is in line with Historical Levels of the property..

Non Revenue Units:Non-Revenue units are based on a Historical 0.74% from the 1 unit on site used as an Office.

Collection Loss/Bad Debt:Has been set to 0.30% of the potential market rent based on Brownsville tends in Collection loss in this asset class.

Renovation Premium:Given the current demand in the submarket and “value-add” opportunity, JLL assumes a new owner could implement a full interior upgrade kit to achieve a renovation premium of $125 per unit increasing the overall PMR on a whole dollar amount to $735 per unit per month.

Loss-to-Lease:Loss to lease is set to 1.00% in year one in line with current rent roll.

Other Residential Income:Other income includesLaundry income, admin and app fees, pest fee, pet fees and pet rent, late fees and NSF fees, cleaning/housekeeping, lease cancellations, and other miscellaneous other income.

Other Income



Proforma Expense AssumptionsThe specific line-item expense categories for the Controllable Expenses employed in the Pro Forma were based on a combination of the property’s Stabilized Proforma and comparing them to what is commonly seen in the local marketplace.

Repairs & maintenance:Value Add Proforma assumes $521/unit for general maintenance. This falls in line with historical numbers and comparable properties.

Landscaping/Grounds:Landscaping and ground maintenance is set to $103/unit. This is in line with the property’s historical average.

Personnel:Value Add Proforma assumes $1,100/unit which is which is in line with the surrounding submarket.

Marketing & advertising:Value Add Proforma sets marketing and advertising to $62/unit matching historical levels.

Administrative:Set to $150/unit which is in line with comparable properties.

Electricity:Set to Historical levels of $95 per unit per year for Common area electric and vacant units. This matches the current output and comparable properties in the submarket.

Fuel (Oil & Gas):Set to Historical levels of $13 per unit per year. This matches current output and comparable properties in the submarket.

Water & sewer:Set to Historical levels of $316 per unit per year. This matches current output and comparable properties in the submarket.

Other Utilities:Set to Historical levels of $4per unit per year which is in line with current output and comparable properties averages in the submarket.

Insurance:Value Add Proforma sets Insurance to $350/Unit. Insurance quote was provided by Commercial Insurance Solutions, full documentation of quote can be found in the Waterside Document Center.

Real estate taxes:Real estate taxes are set to the Cameron County 2018 assessment.

Property management fee:Value Add Proforma estimates a 3% of Effective Gross Income management fee.

Replacement reserves:Replacement reserves are set to $250/unit.

Cameron County Appraisal District Summary

County Taxing Jurisdiction 2018 Rates Property Information

City of Brownsville 0.700613 Property ID: 41011

Cameron County 0.416893 Land Size (Acres): 5.467

Brownsville I.S.D 1.265000 Units Per Acre: 21.95

Brownsvile Navigation District 0.035920 Land Assessment: $346,950

Drainage District #1 0.033000 Improvements: $2,043,226

South Texas I.S.D 0.049200

Texas Southmost College District 0.162407

SBN - Tax Increment Zone 1 0.000000

Central Appraisial District 0.000000

Central Appraisial District 2.663033 2018 Assessed Value $2,390,176

2018 Assessed Taxes $63,651

Position Salary/Bonus 10% Overhead TotalManager $35,000 $3,500 $38,500Leasing $30,000 $3,000 $33,000 Maint. Supervisor $28,000 $2,800 $30,800 Maint. Tech $27,000 $2,700 $29,700

Total $120,000 $12,000 $132,000



Stabilized Operating Projections

Trailing (T6) Original Historicals JLL Adjusted Historicals Value Add Pro Forma

Total Per Unit Per SF % Total Per Unit Per SF % Total Per Unit Per SF %

OPERATING REVENUE

Potential Market Rent $878,400 $7,320 $11.30 100.00% $878,400 $7,320 $11.30 100.00% $878,400 $7,320 $11.30 100.00%

Renovation Premium - - - - - - - $180,000 $1,500 $2.32 20.49%

(Loss to Lease) / Gain to Lease ($21,984) ($183.20) ($0.28) -2.50% ($8,784) ($73) ($0.11) -1.00% ($8,784) ($73) ($0.11) -0.83%

Gross Potential Revenue $856,416 $7,137 $11.02 97.50% $869,616 $7,320 $11.19 99.00% $1,049,616 $8,747 $13.51 119.66%

Vacancy ($61,728) ($514) ($0.79) -7.03% ($43,920) ($366) ($0.57) -5.00% ($52,920) ($441) ($0.68) -5.00%

Concessions ($1,200) ($10) ($0.02) -0.14% ($1,200) ($10) ($0.02) -0.14% ($1,799) ($15) ($0.02) -0.17%

Non-Revenue Units ($7,800) ($65) ($0.10) -0.89% ($7,800) ($65) ($0.10) -0.89% ($7,800) ($65) ($0.10) -0.74%

Collection Loss / Bad Debt ($3,288) ($27) ($0.04) -0.37% ($3,288) ($27) ($0.04) -0.37% ($3,175) ($26) ($0.04) -0.30%

Base Rental Revenue $782,400 $6,520 $10.07 89.07% $813,408 $6,778 $10.47 92.60% $983,921 $8,199 $12.66 113.45%

Expense Reimbursements - $0 $0.00 0.00% - $0 $0.00 0.00% - $0 $0.00 0.00%

Other Residential Income $ 14,280 $119 $0.18 1.63% $ 16,236 $135 $0.21 1.85% $ 16,236 $135 $0.21 1.39%

Other Income $14,280 $119 $0.18 1.63% $16,236 $135 $0.21 1.85% $16,236 $135 $0.21 1.39%

EFFECTIVE GROSS REVENUE $796,680 $6,639 $10.25 90.70% $829,644 $6,914 $10.68 94.45% $1,000,157 $8,335 $12.87 113.86%

Trailing 12 Market Adjusted Value Add Pro Forma

OPERATING REVENUE % of EGR % of EGR % of EGR

Repair & Maintenance $62,562 $521 $0.81 7.85% $62,562 $521 $0.81 7.54% $62,562 $521 $0.81 6.26%

Landscaping / Grounds $12,394 $103 $0.16 1.56% $12,394 $103 $0.16 1.49% $12,394 $103 $0.16 1.24%

Personnel $163,665 $1,364 $2.11 20.54% $132,000 $1,100 $1.70 15.91% $132,000 $1,100 $1.70 13.20%

Marketing / Advertising $7,447 $62 $0.10 0.93% $7,447 $62 $0.10 0.90% $7,447 $62 $0.10 0.74%

Administrative Expenses $21,067 $176 $0.27 2.64% $18,000 $150 $0.23 2.17% $18,000 $150 $0.23 1.80%

Electricity $11,409 $95 $0.15 1.43% $11,409 $95 $0.15 1.38% $11,409 $95 $0.15 1.14%

Fuel (Gas & Oil) $1,532 $13 $0.02 0.19% $1,532 $13 $0.02 0.18% $1,532 $13 $0.02 0.15%

Water & Sewer $37,958 $316 $0.49 4.76% $37,958 $316 $0.49 4.58% $37,958 $316 $0.49 3.80%

Other Utilities $431 $4 $0.01 0.05% $431 $4 $0.01 0.05% $431 $4 $0.01 0.04%

Insurance $63,618 $530 $0.82 7.99% $42,000 $350 $0.54 5.06% $42,000 $350 $0.54 4.20%

Real Estate Taxes $65,901 $549 $0.85 8.27% $63,651 $530 $0.82 7.67% $63,651 $530 $0.82 6.36%

Property Management Fee $29,708 $248 $0.38 3.73% $24,889 $207 $0.32 3.00% $30,005 $250 $0.39 3.00%

TOTAL OPERATING EXPENSES $477,692 $3,981 $6.15 59.96% $414,273 $3,452 $5.33 49.93% $419,389 $3,495 $5.40 41.93%

NET OPERATING INCOME

Net Operating Income (bef. Reserves) $318,988 $2,658 $4.10 40.04% $415,371 $3,461 $5.35 50.07% $580,769 $4,840 $7.47 58.07%

Replacement Reserves $30,000 $250 $0.39 3.77% $30,000 $250 $0.39 3.62% $30,000 $250 $0.39 3.00%

NET OPERATING INCOME (AFT. RESERVES) $288,988 $2,408 $3.72 36.27% $385,371 $3,211 $4.96 46.45% $550,769 $4,590 $7.09 55.07%


MarketMarket Rent Comparisons Waterside Apartments


The Market

Market rent per unit Market rent per sf

Waterside Apartments | Rent Comparison

Waterside Apartments : Current rent comparison

Map # Property Year Built # Units Avg. SF % Occ. Mkt per Unit Mkt per SF Concessions

1 Los Cedros Apartments 1980 136 689 92% $641 $0.93 Free water, sewer, and air conditioning

2 Las Palmas 2002 144 837 94% $792 $0.95 No Concessions

3 The Borders Apartments 1973 216 841 96% $702 $0.84 Free water and cable

4 Villa Madrid 1974 172 819 98% $685 $0.84 Free water, sewer, cable

5 Rancho Del Cielo Apartments 1998 250 836 98% $672 $0.80 Free Gas, water, trash removal

6 Bella Vista 2014 254 723 94% $849 $1.17 No Concessions

7 Posada De Las Palmas 1974 192 936 92% $669 $0.71 Free Water and Cable

Property Averages 1988 195 812 95% $716 $0.89

Waterside Apartments 1983 120 648 93% $595 $0.92 Free water and sewer

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Market overview Waterside Apartments | Rent Comparison

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Map Legend

Map # Property

1 Los Cedros Apartments

2 Las Palmas

3 The Borders Apartments

4 Villa Madrid

5 Rancho Del Cielo Apartments

6 Bella Vista

7 Posada De Las Palmas



Waterside Apartments | Rent Comparison

Waterside Apartments : Competitive Unit Rent Analysis : One-Bedroom

Property Unit Type Year Size (SF) Rent Rent/SF

Bella Vista 1 BR - 1 BA 2014 761 $890 $1.17

Bella Vista 1 BR - 1 BA 2014 768 $890 $1.16

Bella Vista 1 BR - 1 BA 2014 683 $839 $1.23

Bella Vista 1 BR - 1 BA 2014 582 $815 $1.40

Las Palmas 1 BR - 1 BA 2002 739 $791 $1.07

Bella Vista 1 BR - 1 BA 2014 675 $775 $1.15

Bella Vista 1 BR - 1 BA 2014 575 $770 $1.34

Las Palmas 1 BR - 1 BA 2002 618 $680 $1.10

Rancho Del Cielo Apartments 1 BR - 1 BA 1998 650 $626 $0.96


Villa Madrid 1 BR - 1 BA 1974 667 $610 $0.91

The Borders Apartments 1 BR - 1 BA 1973 768 $609 $0.79

Los Cedros Apartments 1 BR - 1 BA 1980 600 $595 $0.99


Posada De Las Palmas 1 BR - 1 BA 1974 670 $570 $0.85


Waterside Apartments 1 BR - 1 BA 1983 504 $538 $1.07

Comparable Range 504 $538 $0.79

768 $890 $1.40

Comparable Average 659 $691 $1.05

Waterside Apartments : Competitive Unit Rent Analysis : Two-Bedroom

Property Unit Type Year Size (SF) Rent Rent/SF

Bella Vista 2 BR - 2 BA 2014 950 $980 $1.03

Bella Vista 2 BR - 2 BA 2014 959 $980 $1.02


Las Palmas 2 BR - 2 BA 2002 1075 $914 $0.85

Las Palmas 2 BR - 2 BA 2002 1037 $899 $0.87

Las Palmas 2 BR - 1 BA 2002 969 $883 $0.91

Las Palmas 2 BR - 1 BA 2002 1005 $805 $0.80




Posada De Las Palmas 2 BR - 1.5 BA 1974 1104 $730 $0.66









Waterside Apartments 2 BR - 1 BA 1983 740 $631 $0.85

Comparable Range 740 $631 $0.65

1,168 $980 $1.04

Comparable Average 939 $780 $0.84


Waterside Apartments | Disclaimer

This Brochure is provided for the sole purpose of allowing a potential investor to evaluate whether there is interest in proceeding with further discussions regarding a possible purchase of or investment in Waterside Apartments (the “Property”).

The potential investor is urged to perform its own examination and inspection of the Property and information relating to same, and shall rely solely on such examination and investigation and not on this Brochure or any materials, statements or information contained herein or otherwise provided.

Neither Jones Lang LaSalle Americas, Inc. nor the Owner, nor any of their respective partners, directors, officers, employees, shareholders, manager and agents (collectively, “Agents”), make any representations or warranties, whether express or implied, by operation of law or otherwise, with respect to this Brochure or the Property or any materials, statements (including financial statements and projections) or information contained herein or relating thereto, or as to the accuracy or completeness of such materials, statements or information, or as to the condition, quality or fitness of the Property, or assumes any responsibility with respect thereto. Such materials, statements and information have in many circumstances been obtained from outside sources, and have not been tested or verified. Projections, in particular, are based on various assumptions and subjective determinations as to which no guaranty or assurance can be given.

Without limiting the foregoing, in the event this Brochure contains information relating to asbestos or any other hazardous, toxic or dangerous chemical, item, waste or substance (“Hazardous Materials”) in relation to the Property, such information shall in no way be construed as creating any warranties or representations, expressed or implied, by operation of law or otherwise, by Agents or the Owner, as to the existence or non-existence or nature of Hazardous Materials in, under, on or around the Property.

This Brochure is provided subject to errors, omissions, change of price or terms and other changes to the materials, statements and information contained herein or relating to the Property, and is subject to withdrawal, all without notice. The contents hereof are confidential and are not to be reproduced or distributed to any person or entity without the prior written consent of Agents or used for any purpose other than initial evaluation as indicated above.

Disclaimer


For More Information, Please Contact: For Financing Information, Please Contact:

Zar HaroSenior Vice [email protected]

Moses SillerSenior Vice [email protected]

Robert ArzolaVice [email protected]


CW SheehanVice President512 593 [email protected]

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