Bourbon Hills OM

Page 1

BOURBON HILLS


CONFIDENTIALITY & DISCLAIMER The information contained in the following proposal is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property, please promptly return this offering memorandum to Marcus & Millichap. This offering memorandum has been prepared to provide summary, unverified financial and physical 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 of absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvements thereon, or 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 proposal has been obtained from sources we believe 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. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.

PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT ANDREWS | DICKMAN FOR MORE DETAILS.

2

ADG MULTIFAMILY


PRESENTED BY

TIM VANWINGERDEN

Associate 513-878-7750 tim.vanwingerden@marcusmillichap.com

JORDAN DICKMAN

First Vice President of Investments 513-878-7735 jordan.dickman@marcusmillichap.com

NICK ANDREWS

First Vice President of Investments 513-878-7735 nick.andrews@marcusmillichap.com

ADG MULTIFAMILY

3


4

ADG MULTIFAMILY


THE INVESTMENT

the table of

CONTENTS

01 page

8

LO C A L C O M P S

02 page

14

FINANCIALS

03

page

22

LO C A L M A R K E T

04 page

30

ADG MULTIFAMILY

5


6

ADG MULTIFAMILY

CALABASAS, CALIFORNIA | HQ

80+ | OFFICES

2,500 | EMPLOYEES


UNRIVALED SUCCESS IN THE MIDWEST Nick Andrews

First Vice President Investments Director, NMHG

Jordan Dickman

First Vice President Investments Director, NMHG

INVESTMENT ADVISORS

Austin Sum

Senior Investment Associate

Garry Schloemer Investment Associate

JD Schmerge Investment Associate

Brian Johnston Investment Associate

Tim VanWingerden Investment Associate

DEBT & STRUCTURED FINANCE

Chris Litzler

Jim Leonard

Senior Director MMCC

VALUATION & RESEARCH

Sam Petrosino

Financial & Research Analyst

Senior Managing Director of Capital Markets MMCC

CLIENT RELATIONS

Skyler Wilson

Client Relationship Coordinator

MARKETING

Alex Papa

Marketing Coordinator

Kristin Smith Marketing

OPERATIONS

Sidney Bills

Office Administrator

Josh Caruana

Vice President Regional Manager Indianapolis | Cincinnati | Louisville St Louis | Kansas City

Brittany Campbell-Koch Director of Operations

John Sebree

Senior Vice President National Director National Multi Housing Group

Liz Popp

Midwest Operations Manager

Michael Glass

Senior Vice President Midwest Division Manager National Director, Manufactured Home Communities Group

ADG MULTIFAMILY

7


8

ADG MULTIFAMILY


BOURBON HILLS THE INVESTMENT

01 section

10 - property snapshot 12 - asset photos

ADG MULTIFAMILY

9


BOURBON HILLS

PROPERTY SNAPSHOT 200 Houston Creek Drive, Paris, Kentucky

2001/21 41

798 100,000 5.22 LOT

YEAR BUILT/RENO

NUMBER OF UNITS

AVERAGE UNIT SIZE

RENTABLE SQUARE FEET

SLAB WOOD BRICK

REPLACED

FOUNDATION

FRAMING

EXTERIOR OF BUILDING

ROOF

IN 2020

LOT SIZE (ACRES)

PARKING

COPPER INDIVIDUAL HVAC

WIRING

HEATING & COOLING

OWNER PAYS: TRASH | TENANT PAYS: ELECTRIC, WATER, SEWER 10

ADG MULTIFAMILY



BOURBON HILLS

PHOTOS Fully renovated luxury home: New Kitchen New Flooring Gas Fireplace Stainless Appliances Granite Countertops In Unit Washer / Dryer

12

ADG MULTIFAMILY


ADG MULTIFAMILY

13


BOURBON HILLS

HAVERFORD PLACE

THE ROBNEEL WOOLRIDGE

14

ADG MULTIFAMILY


BOURBON HILLS LOCAL COMPS

02 section

16 - rent sort 18 - rent comps

ADG MULTIFAMILY

15


COMPETITIVE SET

RENT SORT

One Bedroom Apartment Rents Sorted by Net Rent Property

Year Built

Units

SF

Market Rent

Utility Adjustment/Month

Net Rent

Net Rent/SF

Haverford Place - Georgetown, KY

2001/2018

160

900

$1,180.00

$0

$1,180

$1.31

The Marq - Georgetown, KY

2018

295

723

$986.00

$15

$971

$1.34

Amerson Orchard - Georgetown,

2017

325

538

$870.00

$15

$855

$1.59

Wooldridge - Versailles, KY

2013

156

767

$850.00

$15

$835

$1.09

Bourbon Hills Pro Forma

2001 / 2021

41

700

$830.00

$15

$815

$1.19

Bourbon Hills Average Effective

2001 / 2021

41

700

$685.00

$15

$670

$0.96

704

$978

$1.39

Averages

16

ADG MULTIFAMILY

1995


Two Bedroom Apartment Rents Sorted by Net Rent

Property

Year Built

Units

SF

Market Rent

Utility Adjustment/Month

Net Rent

Net Rent/SF

2001/2018

160

1207

$1,234.00

$0

$1,234

$1.02

The Townhomes at Glasford Square - Lexington, KY

2009

54

1317

$1,212.00

$15

$1,197

$0.91

Wooldridge - Versailles, KY

2013

156

1272

$1,206.00

$15

$1,191

$0.94

The Marq - Georgetown, KY

2018

295

1160

$1,194.00

$15

$1,179

$1.02

Sandersville Townhomes - Lexington. KY

2012

35

$1,121.00

$0

$1,121

Waveland Townhomes Apartments - Lexington, KY

2009

50

1307

$1,132.00

$15

$1,117

$0.85

Greendale Townhomes - Lexington, KY

2011

42

1300

$1,100.00

$0

$1,100

$0.85

Amerson Orchard -Georgetown,KY

2017

325

932

$1,068.00

$15

$1,053

$1.13

Bourbon Hills Pro Forma

2001 / 2021

41

900

$1,030.00

$15

$1,015

$1.13

Wood Cutters - Paris, KY

1900/2018

1

1000

$1,000.00

$0

$1,000

$1.00

The Robneel

1900/2020

12

1100

$995.00

$0

$995

$0.90

Bourbon Hills Effective

2001 / 2021

41

900

$873.00

$15

$858

$0.95

1,127

$1,097

$15

$1,088

#DIV/0!

Haverford Place - Georgetown, KY

Averages

1995

ADG MULTIFAMILY

17


COMPETITIVE SET

THE ROBNEEL

800 Main Street, Paris, KY PROPERTY SUMMARY

12

UNITS

1900/2020

YEAR BUILT UNIT MIX & RENT SCHEDULE UNIT TYPE

RENT

SF

RENT PER SF

2x1

$955

1,100

$0.90

Common Amenities:

off-street parking historic downtown paris etc

18

ADG MULTIFAMILY

Unit Features:

washer dryer resotred flooring etc


COMPETITIVE SET

HAVERFORD PLACE

101 Haverford Path, Georgetown, KY PROPERTY SUMMARY

160

UNITS

2018

YEAR BUILT UNIT MIX & RENT SCHEDULE UNIT TYPE

RENT

SF

RENT PER SF

1x1

$1,180

900

$1.31

2x2

$1,234

1207

$1.02

Common Amenities:

clubhouse pool fitness center etc

Unit Features:

washer dryer ceiling fans etc

ADG MULTIFAMILY

19


COMPETITIVE SET

WOOLRIDGE

224 Cheney Road, Versailles, KY PROPERTY SUMMARY

156

UNITS

2013

YEAR BUILT UNIT MIX & RENT SCHEDULE UNIT TYPE

RENT

SF

RENT PER SF

1x1

$850

767

$1.09

2x2

$1,206

1,272

$0.94

Common Amenities:

property manager on site 24 hour access walking biking trails lawn care

20

ADG MULTIFAMILY

Unit Features:

hardwood floors washer dryer cable internet


ADG MULTIFAMILY

21


22

ADG MULTIFAMILY


BOURBON HILLS THE FINANCIALS

03 section

24 - investment highlights 26 - unit mix 28 - income & expenses

ADG MULTIFAMILY

23


INVESTMENT HIGHLIGHTS

BOURBON HILLS

200 Houston Creek Drive, Paris, KY Marcus & Millichap is pleased to present Bourbon Hills. A Luxury 41-unit Single Family Home Style Living community located in Paris, KY. Bourbon Hills has undergone extensive renovation in 2020, providing an opportunity for an investor to purchase a hard-to-find asset with minimal deferred maintenance. Drive through historic Paris Pike and experience the rural landscape in horse country for a community tucked away from the hustle and bustle with A Class amenities: Stunning landscaping, Stainless Appliances, Granite Countertops, and New Bathrooms.

2 BEDROOM

1 BEDROOM

29 Units 940 Avg SF $888 Rent

12 Units 695 Avg SF $697 Rent

41 TOTAL UNITS

2001/2020 YEAR BUILT $186,297 CURRENT NOI

24

ADG MULTIFAMILY

868 SF AVERAGE UNIT SIZE

$832 AVERAGE RENT $253,684 PROFORMA NOI

80% OCCUPANCY


RARE OPPORTUNITY

Rare opportunity to acquire a Single Family Home Style Living Community.

WELL-MAINTAINED ASSET | TURN KEY OPPORTUNITY Over $800k of capital expenditures have been invested by current ownership on interior and exterior renovations, providing an excellent turn key opportunity for an incoming investor looking for a high-quality asset with minimal deferred maintenance.

HISTORIC PARIS Paris, KY historically experiences a shortage of rental units, with high occupancy rates. Tenants enjoy the historic downtown horse country just 15 minutes from Georgetown and Lexington.

ACCESS TO TOP-NOTCH EMPLOYMENT Major employers in Lexington include the University of Kentucky, Fayette County Public Schools, Kentucky One Health, Xerox which have over 23,857 employees combined. The largest employer, University of Kentucky, posted a total operating revenue of 1.76 billion in 2019, an increase of over 7.3% from its previous fiscal year.

ADG MULTIFAMILY

25


BOURBON HILLS- UNIT MIX SUMMARY Summary

PROJECTED

MARKET

AVERAGE EFFECTIVE

Rentable

Total

Units

SF

SF

One Bedroom

12 Units

695 SF

8,340 SF

$697.00

$1.00

$8,364

$750.00

$1.08 SF

$9,000

$830.00

$1.19 SF

$9,960

Two Bedroom

29 Units

940 SF

27,260 SF

$888.41

$0.95

$25,764

$1,000.00

$1.06 SF

$29,000

$1,030.00

$1.10 SF

$29,870

Totals / Wtd. Averages

41 Units

868 SF

35,600 SF

$832.39

$0.96 SF

$34,128

$926.83

$1.07 SF

$38,000

$971.46

$1.12 SF

$39,830

Unit Type

Total Rent Rent/Unit Rent/SF

Potential

Total Rent Rent/Unit Rent/SF

Potential

Total Rent Rent/Unit Rent/SF

Potential

Summary

26

ADG MULTIFAMILY


UNIT MIX BREAKDOWN MARKET

AVERAGE EFFECTIVE

One Bedroom

No. of

Rentable

Total

Unit Type

Units

SF

SF

Rent/Unit

Rent/SF

Potential

1BR/1BA

12 Units

695 SF

8,340 SF

$697.00

$1.00 SF

$8,364

$750.00

Totals / Wtd. Avgs

12 Units

695 SF

8,340 SF

$697.00

$1.00 SF

$8,364

$750.00

Two Bedroom

No. of

Rentable

Total

Unit Type

Units

SF

SF

Rent/Unit

Rent/SF

Potential

Rent/Unit Rent/SF

Potential

Rent/Unit

Rent/SF

Potential

29 Units 29 Units

940 SF 940 SF

27,260 SF 27,260 SF

$888.41 $888.41

$0.95 SF $0.95 SF

$25,764 $25,764

$1,000.00 $1.06 SF $1,000.00 $1.06 SF

$29,000 $29,000

$1,030.00 $1,030.00

$1.10 SF $1.10 SF

$29,870 $29,870

2BR/1BA Totals / Wtd. Avgs

Total Rent

PROJECTED

Total Rent Rent/Unit Rent/SF

Total Rent

Potential

Rent/Unit

Rent/SF

Potential

$1.08 SF

$9,000

$830.00

$1.19 SF

$9,960

$1.08 SF

$9,000

$830.00

$1.19 SF

$9,960

Total Rent

Total Rent

Total Rent

ADG MULTIFAMILY

27


GROSS POTENTIAL RENT All Units at Market Rent Gain (Loss) to Lease GROSS SCHEDULED RENT Other Income Pet Rent Month to Month Income Pet Fee

INCOME

FINANCIAL BREAKDOWN

Current (Rent Roll; Adjusted Trailing Expenses)

RR

Per Unit 11,122 (871) 10,251

$456,000 ($9,120) $446,880

1.17% 0.57% 0.36%

120 59 37

$4,920 $2,400 $1,500

1.10% 0.54% 0.34%

120 59 37

30 12 257 10,508 (1,990) (527) 0 7,991

$1,230 $492 $10,542 $457,422 ($22,344) $0 ($8,938) $426,140

0.28% 0.11% 2.36% 5.00% 0.00% 2.00% 91.00%

30 12 257 11,157 (545) 0 (218) 10,394

% of GPR

7.83% RR

% of GPR

2.00%

Per Unit 11,122 (222) 10,900

$4,920 $2,400 $1,500

Note 2

Late Fees Application Fee Total Other Income GROSS POTENTIAL INCOME Physical Vacancy Non-Revenue Units Bad Debt EFFECTIVE GROSS INCOME

$1,230 $492 $10,542 $430,842 ($81,600) ($21,600) $0 $327,642

Note 5 Note 6

0.29% 0.12% 2.51%

T12 T12

19.41% 5.14% 0.00% 67.62%

Non-Controllable Real Estate Taxes 2020 Taxes Paid Adjustment for Sale Total Real Estate Taxes Insurance

$17,336 $0 $17,336 $10,250

Auditor

5.29% 0.00% 5.29% 3.13%

% of EGI

Per Unit 423 0 423 250

$17,336 $24,833 $42,169 $10,250

4.07% 5.83% 9.90% 2.41%

% of EGI

Per Unit 423 606 1,029 250

$3,000 $1,500 $3,500 $8,000 $35,586

Note 7 Note 7 Note 7

0.92% 0.46% 1.07% 2.44% 10.86%

73 37 85 195 868

$3,060 $1,530 $3,570 $8,160 $60,579

0.72% 0.36% 0.84% 1.91% 14.22%

75 37 87 199 1,478

$1,025 $1,435 $4,100 $1,435 $7,995

Note 7

0.31% 0.44% 1.25% 0.44% 2.44%

25 35 100 35 195

$1,025 $1,435 $4,100 $1,435 $7,995

0.24% 0.34% 0.96% 0.34% 1.88%

25 35 100 35 195

Repairs & Maintenance Marketing & Promotion Payroll Payroll Taxes & Benefits General & Administrative Management Fee Replacement & Reserves Total Controllable

$22,550 $3,075 $32,800 $4,100 $5,125 $19,659 $10,455 $105,759

Note 7 Note 7 Note 7 Note 7 Note 7 Note 7 Note 1

6.88% 0.94% 10.01% 1.25% 1.56% 6.00% 3.19% 32.28%

550 75 800 100 125 479 255 2,579

$22,550 $3,075 $32,800 $4,100 $5,125 $25,568 $10,664 $111,878

5.29% 0.72% 7.70% 0.96% 1.20% 6.00% 2.50% 26.25%

550 75 800 100 125 624 260 2,729

TOTAL EXPENSES

$141,345

43.14%

3,447

$172,456

40.47%

4,206

NET OPERATING INCOME

$186,297

56.86%

4,544

$253,684

59.53%

6,187

EXPENSES

28

$456,000 ($35,700) $420,300

Year 1 (Recapture LTL, Stabilized Occupancy and Other Income, Normalized Expenses, Start

Utilities Electric - Vacant Water & Sewage Trash Removal Total Utilities Total Non-Controllable Controllable Contract Services Security Expense Snow Removal Landscaping/Grounds Pest Control Total Contract Services

ADG MULTIFAMILY

Note 3 Note 4

Note 7

Note 7 Note 7 Note 7


Year 2 (...Stabilized Occupancy, Finish Reno on Remaining Units)

$477,960 ($9,559) $468,401

% of GPR

2.00%

Year 3 (Projected Rent Increase after Stabilization, Reno)

Per Unit 11,658 (233) 11,424

$492,299 ($9,846) $482,453

% of GPR

2.00%

Per Unit 12,007 (240) 11,767

$5,068 $2,472 $1,545

1.08% 0.53% 0.33%

124 60 38

$5,220 $2,546 $1,591

1.08% 0.53% 0.33%

127 62 39

$1,267 $507 $10,858 $479,259 ($23,420) $0 ($9,368) $446,471

0.27% 0.11% 2.32%

$1,305 $522 $11,184 $493,637 ($24,123) $0 ($9,649) $459,865

0.27% 0.11% 2.32%

5.00% 0.00% 2.00% 91.00%

31 12 265 11,689 (571) 0 (228) 10,890

5.00% 0.00% 2.00% 91.00%

32 13 273 12,040 (588) 0 (235) 11,216

$17,336 $24,833 $42,169 $10,455

3.88% 5.56% 9.44% 2.34%

% of EGI

Per Unit 423 606 1,029 255

$17,336 $24,833 $42,169 $10,664

3.88% 5.56% 9.44% 2.39%

% of EGI

Per Unit 423 606 1,029 260

$3,121 $1,561 $3,641 $8,323 $60,947

0.70% 0.35% 0.82% 1.86% 13.65%

76 38 89 203 1,487

$3,184 $1,592 $3,714 $8,490 $61,322

0.71% 0.36% 0.83% 1.90% 13.73%

78 39 91 207 1,496

$1,046 $1,464 $4,182 $1,464 $8,155

0.23% 0.33% 0.94% 0.33% 1.83%

26 36 102 36 199

$1,066 $1,493 $4,266 $1,493 $8,318

0.24% 0.33% 0.96% 0.33% 1.86%

26 36 104 36 203

$23,001 $3,137 $33,456 $4,182 $5,228 $26,788 $10,877 $114,824

5.15% 0.70% 7.49% 0.94% 1.17% 6.00% 2.44% 25.72%

561 77 816 102 128 653 265 2,801

$23,461 $3,199 $34,125 $4,266 $5,332 $27,592 $11,095 $117,388

5.25% 0.72% 7.64% 0.96% 1.19% 6.00% 2.49% 26.11%

572 78 832 104 130 653 271 2,844

$175,770

39.37%

4,287

$178,710

40.03%

4,359

$270,701

60.63%

6,602

$281,155

62.97%

6,857

ADG MULTIFAMILY

29


30

ADG MULTIFAMILY


BOURBON HILLS THE MARKET

04 section

32 - local market highlights 34 - higher education

ADG MULTIFAMILY

31


LOCAL MARKET HIGHLIGHTS

LEXINGTON, KY Lexington, known as the Horse Capital of the World, is centrally population. Anchored by the University of Kentucky, Lexington boasts a young, diverse, and educated worforce.

EMERGING TECH HUB

Metronet has invested over $100 million in fiberoptic infrastructure making Lexington the largest Gigabit city in the nation. The city’s highspeed infrastructure along with its low cost of living provides 1.54 times the purchasing power compared to Silicon Valley attracting talented tech professionals and startups alike.

A CITY WITH HIGH DEMAND

Protected farmland accounts for 30,000 acres of Lexington, which limits the amount of new development driving a strong and consistent demand for housing. Year-over-year development can’t keep up with housing needs, which has boosted growth in surrounding counties and increased home and rent prices.

DEMOGRAPHICS

32

ADG MULTIFAMILY

Population Median Age Median Household Income

323,152 35 $54,896

# of Households # of retail buildings

131,000 1,703


LOCAL HIGHLIGHTS • Home to America’s world famous Kentucky Horse Park. • The famous Keeneland racecourse is located within Lexington. • Home to Aviation Museum • University of Kentucky was founded in lexington in 1916.

ADVANCED MANUFACTURING

HORSE COUNTRY

The Bluegrass Region boasts a strong manufacturing sector specifically in the automotive, biotechnology and renewable energy machinery. The region’s transportation network allows easy import and export of materials and finished product. Research and development activities in Lexington support this sector to enhance product lines.

The horsing industry is at the heart of Lexington’s culture and a core segment of its economy. The University of Kentucky is a leader in animal science research. UK’s Ag Equine program serve as a valuable research partner for many of Lexington’s equine companies.

AGRICULTURAL FOCUS Agriculture plays a strategic role in the development of the American economy and in Lexington, the agriculture industry is nearly 50% larger than the national average. Bolstered by UK’s robust Agriculture, Food and Environment research center, Agriculture in Lexington will continue to thrive for years to come. ADG MULTIFAMILY

33


LEXINGTON

HIGHER EDUCATION Founded in 1865, the University of Kentucky is a single campus at the heart of the Blue-grass. More than 100 countries are represented in the student body at UK. UK has over 200 academic programs and last spring, there were 29,182 students enrolled. With more than 12,000 staff and 2,000 faculty, UK is one of the largest employers in the state.

34

ADG MULTIFAMILY


UNIVERSITY OF KENTUCKY SPORTS In an extensive study conducted by the Associated Press and then revealed in 2017, the University of Kentucky men’s basketball program was rated as the greatest of its kind ever. Certainly, more current NBA players have emerged from the Wildcats’ ranks than from any other college team, with DeMarcus Cousins, John Wall, and Anthony Davis just some of the University of Kentucky’s former stars. The Wildcats also clinched the NCAA Division I Men’s Basketball Tournament in 2012 and have progressed to the men’s Final Four on four occasions since 2011

ADG MULTIFAMILY

35



Our commitment is to help our clients create and preserve wealth by providing them with the best real estate investment sales, financing, research and advisory services available

www.adgmultifamily.com 513-878-7795