CARDINAL HILL GARDENS proposal
CONTENTS
LEAD AGENTS
Tim VanWingerden
Associate
Cincinnati Office
D. 513.878.7750
tim.vanwingerden@marcusmillichap.com
Jordan Dickman
First Vice President Investments
Cincinnati Office
D. 513.878.7735
jordan.dickman@marcusmillichap.com
Nick Andrews
First Vice President Investments
Cincinnati Office
D. 513.878.7741
nicholas.andrews@marcusmillichap.com
Austin Sum
Senior Associate
Cincinnati Office
D. 513.878.7747
austin.sum@marcusmillichap.com
“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.”
NON-ENDORSEMENT & DISCLAIMER NOTICE
CONFIDENTIALITY DISCLAIMER
THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express 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.
NON-ENDORSEMENT NOTICE
Marcus & 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.
01 - OUR ADVANTAGE 02 - ADVANCED STRATEGY 03 - THE INVESTMENT 04 - local competitors 05 - FINANCIALS 06 - LOCAL MARKET SECTIONS
Dear Dave Oetken,
Thank you for allowing Marcus & Millichap the opportunity to provide a current Broker Pricing Opinion (Proposal) for Cardinal Hill Gardens located in Louisville, Kentucky.
We are excited for the possibility to work with you on the marketing and sale of this asset. As you read this package, you will find that our team has had great success in executing multifamily transactions in the Midwest markets. We have an excellent track record of selling the “story” behind each asset we market. We will ensure maximum market value by identifying a diverse buyer pool, and leveraging Marcus & Millichap’s national platform to create the most competitive environment for sale.
Nicholas Andrews Tim VanWingerden Austin Sum
INVESTMENT ASSOCIATES
Austin Sum
Senior Associate
JD Schmerge
Associate
Tim VanWingerden
Associate
Brian Johnston
Associate
Austin Hall Associate
Alden Simms
Associate
RESEARCH & EVALUATION
Sam Petrosino
Financial Analyst
CLIENT RELATIONS
Skyler Wilson
Client Relations Manager
MARKETING
Alex Papa
Marketing Coordinator
OPERATIONS
Brittany Campbell-Koch
Director of Operations
OUR ADVANTAGE
01
CALABASAS, CALIFORNIA | HQ 2,500 | EMPLOYEES 80+ | OFFICES
UNRIVALED SUCCESS IN THE MIDWEST
YOUR TEAM
JORDAN DICKMAN
FIRST VICE PRESIDENTS DIRECTOR, NMHG
NICK ANDREWS
FIRST VICE PRESIDENTS DIRECTOR, NMHG
AUSTIN SUM
SENIOR INVESTMENT ASSOCIATE
JD SCHMERGE INVESTMENT ASSOCIATE
BRIAN JOHNSTON INVESTMENT ASSOCIATE
TIM VANWINGERDEN INVESTMENT ASSOCIATE
AUSTIN Hall INVESTMENT ASSOCIATE
ALDEN SIMMIS INVESTMENT ASSOCIATE
BROKER SUPPORT
SAM PETROSNIO
VALUATION & RESEARCH
CORPORATE SUPPORT
LIZ POPP
MIDWEST OPERATIONS MANAGER
JOSH CARUANA
VICE PRESIDENT
REGIONAL MANAGER
INDIANAPOLIS | CINCINNATI | LOUISVILLE | ST LOUIS | KANSAS CITY
JOHN SEBREE
SENIOR VICE PRESIDENT
NATIONAL DIRECTOR
NATIONAL MULTI HOUSING GROUP
MICHAEL GLASS
SENIOR VICE PRESIDENT
MIDWEST DIVISION MANAGER
NATIONAL DIRECTOR, MANUFACTURED HOME COMMUNITIES GROUP
SKLYER WILSON
CLIENT RELATIONS MANAGER
BRITTANY CAMPBELL-KOCH
DIRECTOR OF OPERATIONS
ALEX PAPA
MARKETING COORDINATOR
Value of recently closed
$84.4 billion
transactions in most recent year
PREMIER INVESTMENT SERVICES
Marcus & Millichap is the premier commercial real estate investment services firm in the United States. Founded in 1971 on a unique model that matches each property with the largest pool of pre-qualified investors, we leverage nearly five decades’ worth of experience and relationships to handle all of your commercial real estate needs. Our team of more than 2,000 professionals in the U.S. and Canada focuses exclusively on real estate investment sales, financing, research, and advisory services.
FOUNDED IN 1971 ON A UNIQUE METHODOLOGY
LARGEST POOL OF PRE-QUALIFIED INVESTORS IN THE INDUSTRY
MOVES CAPITAL ACROSS OUR NETWORK OF INVESTMENT PROFESSIONALS
MORE THAN 2,000 INVESTMENT PROFESSIONALS IN THE U.S. & CANADA
ACCESS TO THE INDUSTRY’S
MATCHING BUYERS & SELLERS
RESULTING IN THE MOST EFFICIENT PROCESS OF LOCALLY, REGIONALLY & NATIONALLY.
WITH AN EXCLUSIVE FOCUS ON REAL ESTATE INVESTMENT SALES, FINANCING, RESEARCH, AND ADVISORY SERVICES
LARGEST POOL OF PRIVATE & INSTITUTIONAL INVESTORS
LEADING NATIONAL PLATFORM
#1 U.S. brokerage
In number of transactions
Marcus & Millichap is the premier commercial real estate investment services firm in the United States. Founded in 1971 with a unique model that matches each property with the largest pool of pre-qualified investors, we leverage nearly five decades of experience and relationships to handle all your commercial real estate needs. Our team of more than 2,000 professionals in the United States and Canada focuses exclusively on real estate investment sales, financing, research and advisory services.
1031 EXCHANGE LEADER
13,255 Transactions
In most recent year
6.74 Transactions closed Every Business Hour MOVING CAPITAL. MAXIMIZING VALUE.
We execute more tax-deferred exchanges than any other firm in the United States (32% of total transactions), and our market share is a direct benefit to clients. Over the years, we have developed the skills and expertise to maximize value and meet sensitive timelines required in a 1031 Exchange. With billions of dollars of commercial real estate exclusively listed with us at any time, motivated exchange buyers seek out Marcus & Millichap for quality investment opportunities. Through our industry-leading inventory, we deliver the best of both worlds – we maximize the value of your asset through our unparalleled marketing. We then help identify appropriate upleg options to execute a successful tax deferral acquisition.
80+ OFFICES THROUGHOUT THE UNITED STATES & CANADA
INVESTMENT OPTIONS & OPPORTUNITIES
The success of Marcus & Millichap is based on our collaborative culture of information sharing across our network of more than 2,000 investment professionals, which maximizes value for each of our clients.
Working with a unique platform that is antithetical to the concept of “pocket listings,” our investment professionals share all listings with the entire Marcus & Millichap team. Each professional specializes in a property type and has a database of local properties and owners, which is leveraged in every client assignment. Because each local agent specializes in a single product type in a specific geographic region, our clients have exposure across the U.S. and Canada with every investment..
Our foundation of information sharing maximizes pricing for our clients and gives us the largest inventory of any firm in the industry.
THE SIZE AND ACCESSIBILITY OF OUR INVENTORY ENABLES YOU TO SELL YOUR PROPERTY AND QUICKLY MOVE INTO ANOTHER PROFITABLE INVESTMENT.
2,000+ $84.4B
INVESTMENT PROFESSIONALS
VALUE OF RECENTLY CLOSED TRANSACTIONS IN MOST RECENT YEAR
LARGEST
INVENTORY OF PROPERTIES FOR ALL PRODUCT TYPES
THE NATION’S
3,859 3,378 EXCLUSIVE LISTINGS IN MOST RECENT YEAR RETAIL MULTIHOUSING OFFICE INDUSTRIAL LAND HOSPITALITY MIXED-USED SELF-STORAGE MANU HOUSING SENIOR HOUSING
GAIN ACCESS TO
EXCLUSIVE
4,400
GEOGRAPHIC BOUNDARIES
INBOUND / OUTBOUND
$2.1B - MW. OUTBOUND
$3.8B - MW. INBOUND
$9.2BB - W. OUTBOUND
$1.6B - W. INBOUND
$3.1B - S. OUTBOUND
$7.8B - S. INBOUND
$1.8B - TX/OK OUTBOUND
$6.4B - TX/OK INBOUND
$6.4B - NE. OUTBOUND
$1.4B - NE. INBOUND
$3.3B - MOUNTAIN OUTBOUND
$5.0B - MOUNTAIN INBOUND
AREN’T BOUND BY
GLOBAL CAPITAL GROUP
The Marcus & Millichap GLOBE Capital Group provides the opportunity to expose your property to more foreign buyers with the guided expertise of our senior investment specialists. Our firm is comprised of 80+ offices throughout the US and Canada, and we provide investors with exclusive investment opportunities, financing capabilities, research, and advisory services.
& MILLICHAP
MARCUS
GERMANY CHINA JAPAN SOUTH K SINGAPORE ISRAEL
OREA $2.08 BILLION $5.80 BILLION $22.58 BILLION $10.87 BILLION $49.65 BILLION $808 MILLION $4.84 BILLION $6.82 BILLION $2.14 BILLION
CANADA FRANCE
SWITZERLAND
PREMIER INVESTMENT SERVICES
LARGEST BUYER POOL
With more inventory than any other firm, buyers seek Marcus & Millichap to fulfill their investment acquisition needs.
MORE 1031 BUYERS COMPETITIVE
BID PROCESS
Our structured marketing process, coupled with the industry’s largest sales force, creates a competitive bidding environment for your listing
We maintain active relationships with the industry’s largest pool of 1031 exchange buyers, the most coveted buyers in the market.
This is why clients choose Marcus & Millichap over local, regional, or other national firms
#1 choice in multifamily
Marcus & Millichap’s National Multi Housing Group (NMHG) provides the industry’s most dynamic and effective marketplace for the acquisition and disposition of apartment properties. With multifamily specialists in offices throughout the U.S. and Canada, NMHG is the industry leader in apartment transactions, having successfully executed on our clients’ behalf more than $106 billion of sales volume in the past five years.
CBRE
MARCUS & MILLICHAP
CUSHMAN & WAKEFIELD
JLL NKF NAI
COLLIERS INTERNATIONAL
LEE
COLDWELL BANKER 4,400 3,311 2,169 1,626 1,550 1,414 961 918 600 593
KELLER WILLIAMS
& ASSOCIATES
ADVISORY SERVICES ACROSS THE OWNERSHIP LIFE CYCLE
Whether you’re looking to buy, sell, refinance, or hold, Marcus & Millichap leverages real-time market research to assess local and national trends, with specialized focus on individual property types. Backed by the collaborative culture of industry experts, your local investment professional will walk you through each phase of your investment strategy.
INVESTOR CONCERNS
• Is holding my asset the most profitable choice in this market?
• How can I best take advantage of the capital markets to maximize my returns?
• Based on my investment risk tolerance and objectives, what opportunities should I consider?
INVESTOR CONCERNS
• Is now the right time to sell?
• How can I leverage the capital markets to maximize my results?
• How do I optimize my position via a disposition?
• What alternatives and associated
INVESTOR CONCERNS
• When is the right time to buy?
• What investment opportunities are available for my consideration?
• What are the risks in the current market?
• What are my financing options?
• How will an acquisition impact my portfolio’s returns?
MARCUS & MILLICHAP’S SOLUTIONS
• Strategic “hold” analysis
• Refinance and capitalization options
• Quarterly investment return analysis
• Ongoing market and submarket research
• Ongoing product-specific research
MARCUS & MILLICHAP’S SOLUTIONS
• Value and market positioning analysis
• Disposition buyer financing
• New acquisition financing
• 1031 exchange investment alternatives analysis
MARCUS & MILLICHAP’S SOLUTIONS
• Pre-acquisition analysis
• Financial investment analysis
• Market and submarket research
• Product-specific research
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 for the benefit of our clients.
WHY MMCC?
Optimum financing solutions to enhance value
Enhanced control through MMCC’s ability to qualify investor finance contingencies
Enhanced control through quickly identifying potential debt/equity sources, processing, and closing buyer’s finance alternatives
CLOSED 1,943 DEBT AND EQUITY FINANCINGS IN MOST RECENT YEAR
NATIONAL PLATFORM OPERATING WITHIN THE FIRM’S BROKERAGE OFFICES
$7.67 BILLION TOTAL NATIONAL VOLUME IN MOST RECENT YEAR
Enhanced control through MMCC’s ability to monitor investor/due diligence and underwriting to ensure timely, predictable closings
MARCUS & MILLICHAP
ACCESS TO MORE CAPITAL SOURCES THAN ANY OTHER FIRM IN THE INDUSTRY
SELECT CLIENTS
SELECT CLIENTS
FINISH LINE Location Louisville, KY Units 192 Seller Kenneth Delcore WOODS & GRINSTEAD Location Louisville, KY Units 100 Seller RPM BURLINGTON OAKS Location Burlington, KY Units 240 Seller Burns & Associates THE POPS Location Lexington, KY Units 96 Seller Sundance UNION HILL Location Dayton, OH Units 100 Seller Prime Residence Group CLAYS POINT Location Elizabethtown Units 62 Seller Duplessis LOUISVILLE PORTFOLIO Location Clarksville, IN Units 508 Seller CAPREIT VAN BUREN VILLAGE Location Dayton, OH Units 500 Seller Dutton Investments BRYANT MERCER Location Columbus, OH Units 354 Seller ROCO / National Equity BERKSHIRE SQUARE Location Indianapolis, IN Units 354 Seller Independence Realty Trust ASCENT 430 Location Pittsburgh, PA Units 319 Seller NRP Group / HIG Realty Partners FOX RUN & MATADOR NORTH Location Lexington, KY Units 317 Seller Burns & Associates
TRANSACTIONS
REPRESENTATIVE
TROY FARMS Location Columbus, OH Units 304 Seller The Champion Companies THE VIEWS OF MT. AIRY Location Cincinnati, OH Units 282 Seller Heritage Hill Capital KENTUCKY TOWERS Location Louisville, KY Units 276 Seller Arden Management BRIGHTON CHASE Location Rocky River, OH Units 264 Seller Edwards Communities SCHIRM FARMS Location Columbus, OH Units 264 Seller CW Capital BUTTERNUT RIDGE Location North Olmsted, OH Units 261 Seller JVM Realty HIDDEN LAKE Location Stow, OH Units 258 Seller JVM Realty RESIDENCES AT CARRONADE Location Perrysburg, OH Units 248 Seller Weston / Burton Carol HUNTERS CHASE Location Westlake, OH Units 244 Seller Morgan Communities RESIDENCES AT SUMMIT VIEW Location Cincinnati, OH Units 176 Seller Uptown Rental Properties NORTHSIDE FLATS Location Dayton, OH Units 139 Seller R Communities THE LAKES Location Chillcothe, OH Units 72 Seller Alpha Property Management
REPRESENTATIVE TRANSACTIONS
PLANNING FOR THE FUTURE. EXECUTING TODAY.
Our cutting-edge market research helps us advise our clients of existing asset performance and future opportunities.
ADVANCED STRATEGY
02
ATTRACTING THE TARGET BUYER
To successfully execute a marketing campaign, it is critical to understand the likely buyer profiles that will be attracted to the asset, in addition to their respective approval process, corporate structure and underwriting methodology.
Whether it be a private investor, pension fund advisor, sponsored capital group, family office, or a discretionary fund manager, every investment group has an approval process/corporate structure that dictates their ability to process with a transaction. We pride ourselves on maintaining vast and deep relationships with each of the buyer profiles that are active in the market place today coupled with a thorough under standing of their required investor returns and standards of underwriting.
$731M $1.6B $427M $431M $645M $127M
PREMIER ACCESS TO INVESTOR PROFILES
1ST TIER INVESTORS
Pension funds, advisors, banks, REITs, and life insurance companies
2ND TIER INVESTORS
Syndicates, developers, merchant builders, general partnerships, and professional investors
FOREIGN & INTERNATIONAL BUYERS
Foreign investors seeking domestic opportunities and technology enablers that direct foreign demand
1031
EXCHANGE CAPITAL
Investors seeking acquisition opportunities for capital gains tax deferral
CROSS-PRODUCT CAPITAL
Opportunistic investors seeking diversification in other real estate property types
3RD TIER INVESTORS
Private, individual investors who account for the majority of transactions in the marketplace
days
ACTIVE MARKETING
ProActive In-Person Meetings
Direct Phone Calls & Emails
Strategic Property
E-Campaigns
Distribution of offering Materials
On-site Property Tours
Weekly Seller Updates
Offering Procurement
Field Initial Offers
Best & Final Offering Round
Conduct Buyer Interviews
Select Buyer
Negotiate Contract
OFFER PROCUREMENT
Days
Marketing
CONTINGENCY PERIOD CLOSE OF ESCROW Contingency Period Title Work On-Site Property Inspections Third Party Inspections timeline Days Days
COMMERCIAL REAL ESTATE
POWERFUL TOOLS - MNET
OUR PROPRIETARY TECHNOLOGY PLATFORM, MNET, IS A GAME-CHANGER. NO OTHER FIRM OFFERS ANYTHING LIKE IT OR THE POWERFUL PROPERTY SEARCH TOOLS AND AUTOMATED PROPERTY MATCHING CAPABILITIES IT FEATURES.
ADVANCE SEARCH CAPABILITIES
$18B +
OF CURRENT INVENTORY
1.2M
SEARCHES ANNUALLY
3,500 +
EXCLUSIVE LISTINGS
POPULATION HH INCOME RADIUS FINANCIALS
RCM & CREXI CREXI
Commercial Real Estate Exchange, Inc. (CREXI) is the commercial real estate industry’s fastest-growing marketplace, advanced technology and data platform dedicated to sup porting the CRE industry and its stakeholders. Crexi enables commercial real estate pro fessionals to quickly streamline, manage, grow their businesses, and ultimately close deals faster. Since launching in 2015, Crexi has quickly become the most active market place in the industry. With millions of users, the platform has helped buyers, tenants and brokers transact and lease on over 500,000 commercial listings totaling more than $1 trillion in property value.
Real Capital Markets (RCM) is the GLOBE marketplace for buying and selling CRE. RCM increases the speed, exposure, and security of CRE sales through its streamlined online platform. Solu tions include integrated property marketing, trans action management, and business intelligence tools to unify broker-level and firm-level data and work flows.
RCM
DIGITAL E-MARKETING
The main advantage of digital marketing is that a targeted audience can be reached in a cost-effective and measurable way. Over the course of the past several years, our team has managed to collect over twenty thousand emails of potential investors, in a variety of states across the US. This database allows us to tailor future investment opportunity to each investor, and their desired goal. Not only does this database allow us to personalize emails, but it also allows us to measure the results of our out reach.
EMAILS SENT THIS CURRENT MONTH
OVER 190K
EMAIL OPENS OVER 60K IN OUR MAILING LIST OVER 20K
INDUSTRY AVERAGE
OPEN RATE: 29.97%
CLICK RATE: .75%
ADG OPEN RATE
34%
ADG CLICK RATE
1.5% OVER 1.2K CLICK THROUGH
“Email has an ability many channels don’t: creating valuable personal touches - at scale.”
Social media
Social media helps us engage with our potential clients and find out what is being said about our business. We also use social media for advertising, attracting clients, get client feedback, build better customer loyalty, increase our market reach, develop our brand etc. Social media is a great tool to use in our industry, especially for building new relationships and keeping up with the market.
ADG IS ON
6
PLATFORMS
OVER 1K NEW RELATIONSHIPS MADE
MONTHLY IMPRESSIONS ON ISSUU
OVER 1.2K
OVER 3K IMPRESSIONS ON LINKEDIN
PLATFORMS
THE INVESTMENT
03
CARDINAL LOUISVILLE, KY
2325 CARDINAL HILL GARDENS, LOUISVILLE, KY
Original Ownership of 50+ Years
Meticulously Maintained Asset
Rents Significantly Below Market Average
Proposed Interior Renovations for Significant Upside
Opportunity for Professional Property Management
Ideal Location with Top-Notch Employment
HISTORICAL OPERATING PERFORMANCE
Unit Mix Unit Type Number of Units Average Size In-Place Rents Office 2 Units 500 SF $575.00 Studio 6 Units 350 SF $525.00 One Bedroom 42 Units 650 SF $725.00 Two Bedroom 83 Units 850 SF $825.00 Three Bedroom 1 Units 1,000 SF $1,175.00 All Units 134 Units 761 SF $779.10
T12 T1 T1 Base Rental Revenue $1,140,572 $1,237,576 $1,237,576 Other Income $160,745 $170,492 $170,492 Effective Gross Revenue $1,301,317 $1,408,068 $1,408,068 Real Estate Taxes $145,442 $145,422 $145,422 All Other Expenses $624,715 $624,715 $624,715 Operating Expenses $770,157 $770,137 $770,137 Net Operating Income $531,160 $637,931 $637,931 Operating Expense Ratio 59.2% 54.7% 54.7%
CARDINAL HILL GARDENS
PROPERTY DETAILS
Property Address: 7329 Saint Andrews Church Rd
City, State, Zip: Louisville, KY 40214
Submarket: South Louisville
County: Jeffersonville
Year Built: 1973
Number Of Units: 134
Avg Unit Size: 764
Rentable Sqft: 40,000
Number of Parcels: 1
Lot Size (Acres): 5.47
# of Buildings: 5
# of Stories: 3
Plumbing: Original
HVAC: Central
Water Heater: Boiler System
Wiring: Copper
CONSTRUCTION:
Foundation: Concrete
Framing: Wood
Roofs: Pitched Shingle
Exterior of Building: Brick
Laundry: Onsite Laundry
utilities
Electric: Tenant Paid
Gas: Tenant Paid
Water Owner Paid
Sewer Owner Paid
Trash: Owner Paid
CARDINAL HILL GARDENS
INVESTMENT HIGHLIGHTS
THE OPPORTUNITY
Marcus & Millichap is pleased to present Cardinal Hill Gardens, a 134unit community in Louisville, KY. This property is bursting with potential with rents well-below the market average, and additional rental upside available through interior renovations. This provides an incoming investor with multiple avenues for NOI growth. One, they could focus on improving operational efficiencies through professional property management and bring rents closer to market levels, and two, implement a renovation program to compete with newer construction in the market and further boost their bottom line.
PROPOSED VALUE-ADD:
Interior Renovation: New Cabinets, Granite Countertops, Washer / Dryer Hookups: Install washer / dryer hookups
Utility RUB: Charge a utility billback for water, sewer and trash
Utilities: Install in-unit water heaters
THE MARKET: STRONG RENT & JOB GRO
Louisville has experienced strong rental growth in the past 12 month’s largely driven by strong economic fundamentals and pent-up demand from Covid. The metro recorded a net gain of 22,400 jobs as the market recovers from Covid, expanding the employment base by 3.5%.
TOP-NOTCH EMPLOYMENT
The top industries in Louisville’s employment sector are Trade & Transportation (23.3%), Education & Health (14.6%), Manufacturing (12.4%), and Professional Services (12.1%). Some of the largest employers in the area include Yum! Brands, Kindred Healthcare, Humana, and Ford. It is also home to UPS Worldport, the world’s largest package handling facility.
DEAL SUMMARY
101,950 134 $677
RENTABLE SQUARE FEET TOTAL UNITS AVG EFF RENT
PROPERTY SUMMARY
CARDINAL HILL GARDENS *
• Cardinal Hill Gardens presents the opportunity for incoming investor to purchase a property built in the 60s that is still owned within the family of the original developer.
• There have been no new deliveries in this submarket for the past 12 years.
• The Kenwood submarket experienced a YOY rent increase of 14.5%, outperforming the Louisville market by 550 basis points.
• There is strong market market rents. Multiple have undergone renovations $938 for 1 and 2-bedroom
• Cardinal Hill Gardens ket average of $938, initiative and drive rents
• Cardinal Hill Gardens nity for an investor professional property
market support to renovate units and raise Multiple properties of similar vintage and style renovations and are achieving on average 2-bedroom rents.
Gardens monthly rents are $261 below the marproviding an opportunity for a renovation rents to be in line with market competitors. Gardens is self-managed providing an opportuimprove operational efficiencies through property management.
• Rental market has softened a little as the market reels from unprecedented rent growth. There could be some trepidation regarding an aggressive renovation and rent push.
• The trailing performance of Cardinal Hill has a larger than average expense load, so from a lending standpoint bridge debt would be required to execute the strategy. Bridge debt usually has terms that are less favorable.
• While there have not been any deliveries in the past 12 years in this submarket, there are 450 affordable units in planning, along with 150 units under construction in the immediate submarket. There could be a concern that the market becomes over saturated with rents that are competing for rates in the C+, B- realm.
CARDINAL HILL GARDENS
MARKET PROVEN RENTS
Cardinal Hill Gardens is well-positioned for a value-add interior renovation with the market outperforming Cardinal Hill by 44%. The provides an excellent opportunity for an incoming investor to implement a value-add renovation strategy to bring rents to market.
1 & 2 BEDROOM MARKET AVG RENT
$532
IN-PLACE RENTS TRAILING MARKET LEADER
RECOMMENDED IMPROVMENTS
2 3 6 1 1 4 BATHROOM VANITY 1 GRANITE COUNTERTOPS 2 MODERN LIGHT FIXTURES 3 NEW KITCHEN CABINETS 4 LVP FLOORING 5 NEW PAINT 6 4 5 5 6 6
CARDINAL HILL GARDENS
VALUE ADD OPPORTUNITY
PROPOSED RENOVATIONS
The competitive set in the market have renovated apartments of similar construction and vintage and are acheiving $879 (1 bed) and $1,078 (2 bed) per month. This provides strong market support for a value-add renovation initiative. Using these as a case study, there is significant value add opportunity to remodel Cardinal Hill Apartments with similar style upgrades. Upgrades from the competitive set include exterior paint and landscaping, and interior upgrades of: stainless appliances, modern light fixtures, granite countertops, new cabinets, upgraded bathrooms and flooring.
$9.5K/UNIT AVG RENO COST
$364/MONTH AVG RENT INCREASE
45.9% ROI
APARTMENTS
CARDINAL HILL GARDENS *
LEDGEWOOD
INDIGO AT THE PARK
SUBJECT before INDIGO AT THE PARK after
KITCHEN BATHROOM
LEDGEWOOD KITCHEN
BATHROOM EXAMPLE
RENT COMPETITORS
04
*
INGTON
THEKEN S
CARDINA L HILL GA R D SNE
2 BED - $1,209
location competitors GABLES AT STONE
2 BED - $826
THEEDW I N
2 BED - $975
INDIO AT THEPARK
2 BED - $1,069
THEMAD I SON
2 BED - $1,149
2 BED - $999
one BEDROOM RENT SORT
Property YB/Reno # of 2-Bed SF Market Rent Utility Adjustment/Month Net Rent Net Rent/SF Occupancy Indigo at the Park 1971 / 2021 84 750 $999.00 $40 $959 $1.28 97% Cardinal Hill Gardens Post Renovation 1973 42 650 $995.00 $65 $930 $1.43 95% The Edwin 1960 / 2022 24 584 $928.00 $55 $873 $1.49 100% Gables at Stone Ridge Apartments 1969 / 2022 6 639 $865.00 $15 $850 $1.33 N/A Hunters Run Apartments 2000 51 940 $845.00 $15 $830 $0.88 94% The Star on Southside 1970 / 2022 75 650 $825.00 $15 $810 $1.25 100% Walnut Grove Apartments 2003 16 605 $750.00 $0 $750 $1.24 98% Colonial Oaks 1964 80 700 $705.00 $0 $705 $1.01 100% The Madison 1970 / 2022 27 733 $725.00 $55 $670 $0.91 92% Cardinal Hill Gardens Average Effective 1973 42 650 $575.00 $65 $510 $0.78 98% Property YB/Reno # of 2-Bed SF Market Rent Utility Adjustment/Month Net Rent Net Rent/SF Occupancy The Kensington 1974 / 2022 136 825 $1,199.00 $65 $1,134 $1.37 95% Indigo at the Park 1971 / 2021 72 950 $1,149.00 $50 $1,099 $1.16 97% St. Anthony Gardens 1994 / 2022 184 950 $1,062.00 $0 $1,062 $1.12 100% Cardinal Hill Gardens Post Renovation 1973 84 850 $1,100.00 $65 $1,035 $1.22 95% Colonial Oaks 1964 112 900 $1,006.00 $0 $1,006 $1.12 100% The Edwin 1960 / 2022 120 846 $1,069.00 $95 $974 $1.15 100% Gables at Stone Ridge Apartments 1969 / 2022 39 865 $975.00 $15 $960 $1.11 100% Hunters Run Apartments 2000 118 1194 $950.00 $15 $935 $0.78 94% The Star on Southside 1970 / 2022 75 859 $950.00 $15 $935 $1.09 100% The Madison 1970 / 2022 55 947 $999.00 $65 $934 $0.99 92% Walnut Grove Apartments 2003 96 859 $880.00 $0 $880 $1.02 98% Cardinal Hill Gardens Average Effective 1973 84 850 $721.00 $65 $656 $0.77 98%
two BEDROOM RENT SORT
subject cardinal hill gardens
UNITS 132 YEAR BUILT 1973 UNIT MIX # UNITS SQFT RENT RENT/SF 1 Bed 42 650 $726 $1.02 2 Bed 84 850 $826 $0.90 Common Area Amenities 24 Hour Access, Online Services, Controlled Access, Playground, Property Manager on Site, Laundry Facilities, Maintenance on site Apartment Interior Amenities Air Conditioning, Cable Ready, Ceiling Fans, Dishwasher, Disposal, Walk-In Closets, Washer/Dryer Hookup, Wheelchair Accessible (Rooms), Window Coverings 7329 Saint Andrews Church Rd Louisville, KY 40214
RENT
COMPETITORS
the kensington
formerly iroquois gardens
6100 Ledgewood Pky Louisville, KY 40214
2022 Renovations Include: New Windows, Granite Countertops, Wood Laminate Floors, Updated Cabinetry, New Stainless Appliances, New Carpeting
Common Area Amenities
24 Hour Access, Picnic and Grilling Area (UPDATED), Laundry Facilities, Playground (UPDATED),Maintenance on site, Property Manager on Site
Apartment Interior Amenities
Fully Equipped Kitchen With Built-in Microwave
Walk-In Pantry, Washer/Dryer Connections, Air Conditioning, Cable Ready, Recreation Room, Dishwasher
UNITS 136 YEAR BUILT 1974/2022 UNIT MIX # UNITS SQFT RENT RENT/SF 2 Bed 136 825 $1,209 $1.47
RENT
COMPETITORS
the EDWIN
formerly summit apartments
2814 De Mel Ave Louisville, KY 40214
2022 Renovations Include: New Appliances, New Carpeting, Wood Laminate Floors, Updated Cabinetry, Granite Countertops, Updated Bathrooms
Common Area Amenities
Pet Play Area, Swimming Pool, Property Manager on site, Laundry Facilities (New 2022), Maintenance on site
Apartment Interior Amenities Cable Ready, Ceiling Fan, Window Coverings, High-speed Internet Access, Air Conditioning, , Walk-in Closets, Washer/ Dryer Hookup
UNITS 168 YEAR BUILT 1960/2022 UNIT MIX # UNITS SQFT RENT RENT/SF 1 Bed 24 584 $928 $1.49 2 Bed 120 846 $1,069 $1.15
COMPETITORS indigo at the park
2022 Renovations Include: New Windows, New Appliances, New Carpeting, Wood Laminate
Floors, Updated Cabinetry
Common Area Amenities
Bike Rack/Storage, Picnic and Grilling Area, Courtyard, Swimming Pool
(UPDATED 2022), Access to Hiking and Biking Trails, Basketball Court, Playground, Property Manager on Site, Tennis Court, Laundry Facilities
Apartment Interior Amenities Cable Ready, Ceiling Fan, Electronic Thermostat, High-speed
Internet Access , Air Conditioning, Storage Units, Walkin Closets
Units 156 Year Built 1971 UNIT MIX # UNITS SQFT RENT RENT/SF 1 Bed 84 750 $999 $1.21 2 Bed 72 950 $1,149 $1.10 518 Iroquois Gardens Dr Louisville, KY 40214
RENT
RENT COMPETITORS the MADISON
5515 Hunt Club Ln Louisville, KY 40214
2022 Renovations Include:
Fully renovated apartment units.
Common Area Amenities
Picnic and Grilling Area, Laundry
Facilities, Playground (New 2022), Maintenance on site, Property Manager on Site
Apartment Interior Amenities Air Conditioning, Kitchen, Balcony, Oven, Carpet, Range
Ceiling Fans, Refrigerator, Freezer, Tub/Shower, Heating, Window Coverings
UNITS 106 YEAR BUILT 1970 UNIT MIX # UNITS SQFT RENT RENT/SF 1 Bed 27 733 $725 $0.91 2 Bed 55 947 $999 $0.99 3 Bed 24 1,047 $1,099 $1.05
formerly legacy apartments
GABLES AT STONE RIDGE
2022 Renovations Include: New Appliances, New Carpeting, Updated Cabinetry, Granite Countertops, Updated Bathrooms
Common Area Amenities Courtyard, Laundry Facilities
Apartment Interior Amenities Air Conditioning, Walk-in Closets, Washer/Dryer Hookup
RENT COMPETITORS
Units 49 Year Built 1969/2022 UNIT MIX # UNITS SQFT RENT RENT/SF 1 Bed 6 639 $865 $1.33 2 Bed 39 865 $975 $1.11 2101 Cardinal Woods Dr Louisville, KY 40214
FINANCIALS
05
CARDINAL HILL GARDENS - FINANCIALS
UNIT MIX SUMMARY
unit distribution unit rents
AVERAGE EFFECTIVE MARKET PROJECTED UNIT TYPE NO. OF UNITS RENTABLE SF TOTAL SF RENT/UNIT RENT/SF TOTAL RENT POTENTIAL RENT/UNIT RENT/SF TOTAL RENT POTENTIAL RENT/UNIT RENT/SF TOTAL RENT POTENTIAL SUMMARY Office 2 Units 500 SF 1,000 SF $575.00 $1.15 $1,150 $575.00 $1.15 SF $1,150 $575.00 $1.15 SF $1,150 Studio 6 Units 350 SF 2,100 SF $462.50 $1.32 $2,775 $525.00 $1.50 SF $3,150 $675.00 $1.93 SF $4,050 One Bedroom 42 Units 650 SF 27,300 SF $613.55 $0.94 $25,769 $725.00 $1.12 SF $30,450 $995.00 $1.53 SF $41,790 Two Bedroom 83 Units 850 SF 70,550 SF $721.41 $0.85 $59,877 $825.00 $0.97 SF $68,475 $1,100.00 $1.29 SF $91,300 Three Bedroom 1 Units 1,000 SF 1,000 SF $1,175.00 $1.18 $1,175 $1,175.00 $1.18 SF $1,175 $1,250.00 $1.25 SF $1,250 Totals / Wtd. Averages 134 Units 761 SF 101,950 SF $677.21 $0.89 SF $90,746 $779.10 $1.02 SF $104,400 $1,041.34 $1.37 SF $139,540
CARDINAL HILL GARDENS - FINANCIALS
UNIT MIX BREAKDOWN
AVERAGE EFFECTIVE MARKET PROJECTED UNIT TYPE NO. OF UNITS RENTABLE SF TOTAL SF RENT/UNIT RENT/SF TOTAL RENT POTENTIAL RENT/UNIT RENT/SF TOTAL RENT POTENTIAL RENT/UNIT RENT/SF TOTAL RENT POTENTIAL Office Office 2 Units 500 SF 1,000 SF $575.00 $1.15 SF $1,150 $575.00 $1.15 SF $1,150 $575.00 $1.15 SF $1,150 Totals / Wtd. Averages 2 Units 500 SF 1,000 SF $575.00 $1.15 SF $1,150 $575.00 $1.15 SF $1,150 $575.00 $1.15 SF $1,150 Studio 0BR/1BA 6 Units 350 SF 2,100 SF $462.50 $1.32 SF $2,775 $525.00 $1.50 SF $3,150 $675.00 $1.93 SF $4,050 Totals / Wtd. Averages 6 Units 350 SF 2,100 SF $462.50 $1.32 SF $2,775 $525.00 $1.50 SF $3,150 $675.00 $1.93 SF $4,050 One Bedroom 1BR/1BA 42 Units 650 SF 27,300 SF $613.55 $0.94 SF $25,769 $725.00 $1.12 SF $30,450 $995.00 $1.53 SF $41,790 Totals / Wtd. Averages 42 Units 650 SF 27,300 SF $613.55 $0.94 SF $25,769 $725.00 $1.12 SF $30,450 $995.00 $1.53 SF $41,790 Two Bedroom 2BR/1BA 83 Units 850 SF 70,550 SF $721.41 $0.85 SF $59,877 $825.00 $0.97 SF $68,475 $1,100.00 $1.29 SF $91,300 Totals / Wtd. Averages 83 Units 850 SF 70,550 SF $721.41 $0.85 SF $59,877 $825.00 $0.97 SF $68,475 $1,100.00 $1.29 SF $91,300 Three Bedroom 3BR/2BA 1 Units 1,000 SF 1,000 SF $1,175.00 $1.18 SF $1,175 $1,175.00 $1.18 SF $1,175 $1,250.00 $1.25 SF $1,250 Totals / Wtd. Averages 1 Units 1,000 SF 1,000 SF $1,175.00 $1.18 SF $1,175 $1,175.00 $1.18 SF $1,175 $1,250.00 $1.25 SF $1,250
CARDINAL HILL
-
CURRENT RENT ROLL: AS OF 2/21/23 YEAR 1 GROSS POTENTIAL RENT % of GPR Per Unit % of GPR Per Unit All Units at Market Rent $1,252,800 RR 9,349 $1,674,480 12,496 Gain (Loss) to Lease ($154,764) 12.35% (1,155) ($167,448) 10.00% (1,250) GROSS SCHEDULED RENT $1,098,036 RR 8,194 $1,507,032 11,247 Other Income Late Fees $9,792 T12 0.89% 73 $10,086 0.67% 75 Admin Fees $7,780 T12 0.71% 58 $8,013 0.53% 60 Utility Fee $7,761 T12 0.71% 58 $7,993 0.53% 60 Pet Fee $6,266 T12 0.57% 47 $6,453 0.43% 48 Laundry Income $4,879 T12 0.44% 36 $5,025 0.33% 37 Total Other Income $42,081 3.83% 314 $43,344 2.88% 323 GROSS POTENTIAL INCOME $1,140,117 8,508 $1,550,376 11,570 Physical Vacancy 0.00% 0 ($75,352) 5.00% (562) Bad Debt 0.00% 0 ($15,070) 1.00% (112) EFFECTIVE GROSS INCOME $1,003,396 T3 87.65% 7,488 $1,459,954 84.00% 10,895 NON-CONTROLLABLE Real Estate Taxes % of EGI Per Unit % of EGI 2022 Taxes Paid $49,517 Auditor 4.93% 370 $49,517 3.39% 370 Adjustment for Sale $79,406 7.91% 593 $79,406 5.44% 593 Total Real Estate Taxes $128,923 12.85% 962 $128,923 8.83% 962 Insurance $60,100 T12 5.99% 449 $50,250 3.44% 375 Utilities Electric $48,496 T12 4.83% 362 $49,465 3.39% 369 Water & Sewage $72,428 T12 7.22% 541 $73,876 5.06% 551 Trash Removal $7,750 T12 0.77% 58 $7,905 0.54% 59 Total Utilities $128,673 12.82% 960 $131,246 8.99% 979 Total Non-Controllable $317,695 31.66% 2,371 $310,419 21.26% 2,317 CONTROLLABLE Contract Services Security Expense $2,737 T12 0.27% 20 $2,680 0.18% 20 Snow Removal $0 0.00% 0 $4,690 0.32% 35 Landscaping/Grounds $10,890 T12 1.09% 81 $6,700 0.46% 50 Pest Control $5,350 T12 0.53% 40 $5,360 0.37% 40 Total Contract Services $18,977 1.89% 142 $19,430 1.33% 145 Repairs & Maintenance $90,314 T12 9.00% 674 $80,400 5.51% 600 Marketing & Promotion $1,229 T12 0.12% 9 $6,700 0.46% 50 On-Site Payroll $306,193 T12 30.52% 2,285 $154,100 10.56% 1,150 Payroll Taxes & Benefits $37,344 T12 3.72% 279 $26,800 1.84% 200 General & Administrative $28,760 T12 2.87% 215 $20,100 1.38% 150 Management Fee $0 0.00% 0 $72,998 5.00% 545 Telephone & Cable $5,510 T12 0.55% 41 $5,628 0.39% 42 Replacement & Reserves $34,170 Note 1 3.41% 255 $34,853 2.39% 260 Total Controllable $522,497 52.07% 3,899 $421,009 28.84% 3,142 TOTAL EXPENSES $840,192 83.73% 6,270 $731,428 50.10% 5,458 NET OPERATING INCOME $163,204 16.27% 1,218 $728,526 49.90% 5,437 EXPENSE INCOME INCOME
GARDENS
FINANCIALS
& EXPENSES
UNDERWRITING NOTES # NOTE
1 Replacement & Reserves: added based on market norm of $255 per unit per year
YEAR 2 YEAR 3 % of GPR Per Unit % of GPR Per Unit $1,724,714 12,871 $1,776,456 13,257 ($34,494) 2.00% (257) ($35,529) 2.00% (265) $1,690,220 12,614 $1,740,927 12,992 $10,388 0.61% 78 $10,700 0.61% 80 $8,254 0.49% 62 $8,501 0.49% 63 $8,233 0.49% 61 $8,480 0.49% 63 $6,647 0.39% 50 $6,846 0.39% 51 $5,176 0.31% 39 $5,331 0.31% 40 $44,644 2.64% 333 $45,983 2.64% 343 $1,734,864 12,947 $1,786,910 13,335 ($84,511) 5.00% (631) ($87,046) 5.00% (650) ($16,902) 1.00% (126) ($17,409) 1.00% (130) $1,633,451 92.00% 12,190 $1,682,454 92.00% 12,556 % of EGI Per Unit % of EGI Per Unit $49,517 3.03% 370 $49,517 3.03% 370 $79,406 4.86% 593 $79,406 4.86% 593 $128,923 7.89% 962 $128,923 7.89% 962 $51,255 3.14% 383 $52,280 3.20% 390 $50,455 3.09% 377 $51,464 3.15% 384 $75,354 4.61% 562 $76,861 4.71% 574 $8,063 0.49% 60 $8,224 0.50% 61 $133,871 8.20% 999 $136,548 8.36% 1,019 $314,049 19.23% 2,344 $317,752 19.45% 2,371 $2,734 0.17% 20 $2,788 0.17% 21 $4,784 0.29% 36 $4,879 0.30% 36 $6,834 0.42% 51 $6,971 0.43% 52 $5,467 0.33% 41 $5,577 0.34% 42 $19,819 1.21% 148 $20,215 1.24% 151 $82,008 5.02% 612 $83,648 5.12% 624 $6,834 0.42% 51 $6,971 0.43% 52 $157,182 9.62% 1,173 $160,326 9.82% 1,196 $27,336 1.67% 204 $27,883 1.71% 208 $20,502 1.26% 153 $20,912 1.28% 156 $81,673 5.00% 609 $84,123 5.00% 609 $5,741 0.35% 43 $5,855 0.36% 44 $35,550 2.18% 265 $36,261 2.22% 271 $436,644 26.73% 3,259 $446,194 27.17% 3,312 $750,693 45.96% 5,602 $763,945 46.77% 5,701 $882,758 54.04% 6,588 $918,509 56.23% 6,855
CASH FLOW
CURRENT YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 YE FEB-2024 YE JAN-2025 YE JAN-2026 YE JAN-2027 YE JAN-2028 YE JAN-2029 YE JAN-2030 YE JAN-2031 YE JAN-2032 YE JAN-2033 GROSS POTENTIAL RENT All Units at Market Rent $1,252,800 $1,674,480 $1,724,714 $1,776,456 $1,829,750 $1,884,642 $1,941,181 $1,999,417 $2,059,399 $2,121,181 $2,184,817 Gain (Loss) to Lease ($154,764) ($167,448) ($34,494) ($35,529) ($36,595) ($37,693) ($38,824) ($39,988) ($41,188) ($42,424) ($43,696) GROSS SCHEDULED RENT $1,098,036 $1,507,032 $1,690,220 $1,740,927 $1,793,155 $1,846,949 $1,902,358 $1,959,428 $2,018,211 $2,078,758 $2,141,120 Total Other Income $42,081 $43,344 $44,644 $45,983 $46,903 $47,841 $48,798 $49,774 $50,769 $51,785 $52,820 GROSS POTENTIAL INCOME $1,140,117 $1,550,376 $1,734,864 $1,786,910 $1,840,057 $1,894,790 $1,951,155 $2,009,202 $2,068,980 $2,130,542 $2,193,941 Physical Vacancy $0 ($75,352) ($84,511) ($87,046) ($89,658) ($92,347) ($95,118) ($97,971) ($100,911) ($103,938) ($107,056) Bad Debt $0 ($15,070) ($16,902) ($17,409) ($17,932) ($18,469) ($19,024) ($19,594) ($20,182) ($20,788) ($21,411) EFFECTIVE GROSS INCOME $1,003,396 $1,459,954 $1,633,451 $1,682,454 $1,732,468 $1,783,973 $1,837,014 $1,891,636 $1,947,888 $2,005,817 $2,065,473 Real Estate Taxes $128,923 $128,923 $128,923 $128,923 $131,501 $134,131 $136,814 $139,550 $142,341 $145,188 $148,092 Insurance $60,100 $50,250 $51,255 $52,280 $53,326 $54,392 $55,480 $56,590 $57,721 $58,876 $60,053 Utilities $128,673 $131,246 $133,871 $136,548 $139,279 $142,065 $144,906 $147,804 $150,761 $153,776 $156,851 Contract Services $18,977 $19,430 $19,819 $20,215 $20,619 $21,032 $21,452 $21,881 $22,319 $22,765 $23,221 Repairs & Maintenance $90,314 $80,400 $82,008 $83,648 $85,321 $87,028 $88,768 $90,543 $92,354 $94,201 $96,085 Marketing & Promotion $1,229 $6,700 $6,834 $6,971 $7,110 $7,252 $7,397 $7,545 $7,696 $7,850 $8,007 On-Site Payroll $306,193 $154,100 $157,182 $160,326 $163,532 $166,803 $170,139 $173,542 $177,012 $180,553 $184,164 Payroll Taxes & Benefits $37,344 $26,800 $27,336 $27,883 $28,440 $29,009 $29,589 $30,181 $30,785 $31,400 $32,028 General & Administrative $28,760 $20,100 $20,502 $20,912 $21,330 $21,757 $22,192 $22,636 $23,089 $23,550 $24,021 Management Fee $0 $72,998 $81,673 $84,123 $86,623 $89,199 $91,851 $94,582 $97,394 $100,291 $103,274 Telephone & Cable $5,510 $5,628 $5,741 $5,855 $5,972 $6,092 $6,214 $6,338 $6,465 $6,594 $6,726 Replacement & Reserves $34,170 $34,853 $35,550 $36,261 $36,987 $37,726 $38,481 $39,251 $40,036 $40,836 $41,653 TOTAL EXPENSES $840,192 $731,428 $750,693 $763,945 $780,042 $796,486 $813,284 $830,444 $847,973 $865,881 $884,176 NET OPERATING INCOME $163,204 $728,526 $882,758 $918,509 $952,426 $987,487 $1,023,730 $1,061,193 $1,099,914 $1,139,935 $1,181,297 DEBT SERVICE - Proposed New Principal Payments $0 $0 $0 $81,886 $87,153 $92,759 $98,726 $105,076 $111,835 $119,028 $126,684 Interest Payments $436,756 $436,756 $436,756 $434,437 $429,170 $423,564 $417,598 $411,247 $404,489 $397,295 $389,639 TOTAL DS - Proposed New Loan $436,756 $436,756 $436,756 $516,323 $516,323 $516,323 $516,323 $516,323 $516,323 $516,323 $516,323 DEBT SERVICE - Loan 2 Principal Payments $10,442 $10,442 $11,114 $11,828 $12,589 $13,399 $14,261 $15,178 $16,154 $17,193 $18,299 Interest Payments $55,398 $55,398 $54,726 $54,012 $53,251 $52,441 $51,579 $50,662 $49,686 $48,646 $47,541 TOTAL DS - Loan 2 $65,840 $65,840 $65,840 $65,840 $65,840 $65,840 $65,840 $65,840 $65,840 $65,840 $65,840 NET CASH FLOW AFTER DEBT $502,596 $502,596 $502,596 $582,163 $582,163 $582,163 $582,163 $582,163 $582,163 $582,163 $582,163 NET CASH FLOW AFTER DEBT ($339,392) $225,929 $380,162 $336,346 $370,263 $405,324 $441,567 $479,030 $517,751 $557,772 $599,134 DEBT SERVICE COVERAGE RATIO 0.32 1.45 1.76 1.58 1.64 1.70 1.76 1.82 1.89 1.96 2.03 RETURN ANALYSIS TRAILING YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 CAP Rate (Purchase Price) 1.63% 7.30% 8.84% 9.20% 9.54% 9.89% 10.25% 10.63% 11.02% 11.42% 11.83% 'All-In' CAP Rate (Total Cost) 1.45% 6.47% 7.84% 8.16% 8.46% 8.77% 9.09% 9.43% 9.77% 10.13% 10.49% Cash-on-Cash Return -10.05% 6.69% 11.26% 9.96% 10.96% 12.00% 13.08% 14.19% 15.33% 16.52% 17.74% IRR n/a -4.36% 28.73% 26.10% 23.01% 21.21% 20.04% 19.21% 18.61% 18.15% 17.79% INCOME EXPENSE CARDINAL HILL
FINANCIALS
GARDENS
CASH FLOW PROJECTION GROWTH RATE ASSUMPTIONS YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 Income Gross Potential Rent 33.66% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% (Loss) / Gain to Lease* 10.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Other Income 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Expenses Expenses 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Management Fee** 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% CASH FLOW PROJECTION GROWTH RATE ASSUMPTIONS YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 Physical Vacancy 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Non-Revenue Units 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Bad Debt 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Concessions Allowance 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Economic Loss 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% Tax Breakdown Property Address Parcel ID Year Built Acres Market Value Assessed Value Tax Rate Taxes Payable Land Use Code 7329 Saint Andrews Dr 103-400-470-000 1973 5.47 $3,834,290 $3,834,290 0.012928 $49,516.98 Total 5.47 $3,834,290 $3,834,290 $49,516.98
PRICING CARDINAL HILL GARDENS - FINANCIALS
PURCHASE PRICE Target Purchase Price $9,983,000 Per Unit $74,500 Per RSF $97.92 ACQUISITION / ADDITIONAL COSTS Projected Capital Expenditures $1,273,000 Renovation Cost $0 Closing Costs $0 Transfer Tax $0 Total Loan Fees $0 Total Acquisition Costs $1,273,000 PURCHASE PRICE Total Cost $11,256,000 Per Unit $84,000 Per RSF $110.41 ANALYSIS ASSUMPTIONS Analysis Period 10.00 Years Analysis Start Date Mar-2023 Terminal Cap Rate 6.50% Cost of Sale 3.00% ACQUISITION FINANCING SUMMARY Loan Amount $7,879,200 Loan to Value (LTV) 78.93% Loan to Cost (LTC) 70.00% Existing or Proposed Loan Proposed Origination Date Mar-2023 Interest Rate 6.25% Years Interest Only 2.00 Equity Required $3,376,800 Equity to Value 33.83% Equity to Cost 30.00% RENT SUMMARY (MONTHLY) Avg. Effective Rent $677 Avg. Current Market Rent $779 Avg. Projected Rent $1,041 TOTAL EXPENSES SUMMARY (PER UNIT) Trailing $6,270 Year 1 $5,458 Year 2 $5,602 NOI SUMMARY Trailing $163,204 Year 1 $728,526 Year 2 $882,758 ECONOMIC LOSS SUMMARY Trailing 0.00% Year 1 6.00% 10-Year Projected Avg. 6.00%
CARDINAL HILL GARDENS - FINANCIALS
TARGET VALUE
CASH-ON-CASH RETURNS
Marketing the asset without a specific price allows us to customize our sales approach to each investor’s specific rehab costs, cost of debt and minimum return requirements. Thus facilitating a competitive bidding environment and ultimately maximizing the value of the Property.
ALL-IN CAP RATE
PRICE PER UNIT PER RSF TRAILING YEAR 1 YEAR 2 TRAILING YEAR 1 YEAR 2 YEAR 3 (FULLY AMORTIZING) $10,482,150 $78,225 $102.82 1.56% 6.20% 7.51% -9.62% 6.41% 10.78% 9.54% $10,315,767 $76,983 $101.18 1.58% 6.29% 7.62% -9.76% 6.50% 10.93% 9.67% $10,149,383 $75,742 $99.55 1.61% 6.38% 7.73% -9.90% 6.59% 11.09% 9.82% $9,983,000 $74,500 $97.92 1.63% 6.47% 7.84% -10.05% 6.69% 11.26% 9.96% $9,816,617 $73,258 $96.29 1.66% 6.57% 7.96% -10.20% 6.79% 11.43% 10.11% $9,650,233 $72,017 $94.66 1.69% 6.67% 8.08% -10.36% 6.89% 11.60% 10.26% $9,483,850 $70,775 $93.02 1.72% 6.77% 8.21% -10.52% 7.00% 11.78% 10.42% SUGGESTED LIST PRICE: MARKET BID
TRAILING YR 1 YR2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 Cash on Cash Return -10.05% 6.69% 11.26% 9.96% 10.96% 12.00% 13.08% 14.19% 15.33% 16.52% 17.74% Internal Rate of Return (IRR) n/a -4.36% 28.73% 26.10% 23.01% 21.21% 20.04% 19.21% 18.61% 18.15% 17.79% CAP Rate (Purchase Price) 1.63% 7.30% 8.84% 9.20% 9.54% 9.89% 10.25% 10.63% 11.02% 11.42% 11.83% CAP Rate ("All-In") 1.45% 6.47% 7.84% 8.16% 8.46% 8.77% 9.09% 9.43% 9.77% 10.13% 10.49% Gross Revenue Multiplier (GRM) 9.09 6.62 5.91
LOCAL MARKET
06
LOUISVILLE, Kentucky
Situated on the banks of the Ohio River, Louisville is a progressive community of 1.3 million people. Louisville is one of the most uniquely authentic destinations in the world. It is Kentucky’s largest city and offers hundreds of one-of-a-kind attractions. Whether you are north, south, east, or west – Louisville offers a slew of attractions and historic architecture in every direction. Three of the state’s six Fortune 500 companies call Louisville home – Humana, Kindred Health, and Yum! Brands.
The area provides an attractive business environment for companies due to its location and low cost of doing business, while allowing employees to enjoy a relatively affordable place to live. The economy has transitioned from traditional manufacturing and shipping to health-
care, tourism, and technology. Tourism in the state of Kentucky has a $3.5 billion economic impact from Louisville alone. While the economic impact is very significant, the results are even more so, as they positively affect the quality of life in Louisville. Through maintaining its commitment to the tourism industry, Louisville can enrich and nurture its infrastructure, allowing it to consistently rank as one of the top cities in the nation for quality of life. Foodies and food trucks, brew masters and bourbon, sports, tradition, and transformation - it’s all happening in Louisville. With such a vibrant quality of life, Louisville is a great place to call home.
EMPLOYERS IN THE NEWS
• Amazon building new $5.5MM last-mile delivery station at prime Louisville property adding close to 2,000 new jobs (March 2021).
• GE Appliances completes $60MM expansion adding 245 new jobs (July 2021)
• Ge Appliances set to invest $450MM at its Appliance park in the next 2 years adding over 2,000 new jobs (Oct 2021)
• QSR Automations opens new global headquarters in Louisville, KY (Nov 2021)
• KCC Manufacturing breaks ground on 700-job operation in Shelby County (Nob 2021)
• Republic National Distributing Co. breaks ground on a relocation and expansion project that will create 30 full-time jobs with a $50 million investment (Sep 2021).
• Baptist Health to build $42M rehabilitation hospital in Jeffersontown (Nov 2021)
AMAZON LAST MILE DELIVERY STATION
Population: 1,300,000
Median age: 39.2
the ECONOMY
• Prior to the pandemic, Louisville/Jefferson County’s real gross metropolitan product grew at an average annual rate of 1.8% from 2015 to 2019. During that same fiveyear period, job growth averaged 1.5% annually, with roughly 9,800 jobs added on average each year. In 2020, COVID· 19 mitigation measures and limited business activity caused the local economy to contract as much as 9.0% year-over-year in 2nd quarter.
• In 3rd quarter 2022, the metro’s inflation-adjusted economic output was unchanged year-over-year.
• At the same time, the metro recorded a net gain of 22,600 jobs, expanding the employment base 3.4%.
• During the past year, job gains in Louisville/Jefferson County were most pronounced in the Professional/Business Services sector followed by Education/Health Services.
• Despite job losses stemming from the pandemic, Louisville/Jefferson County’s current employment base now sits roughly 16,600 jobs or about 3% above the pre-pandemic level in February 2020.
DEMOGRAPHICS: STATISTICS
Msa median hhi: $57,405
1 - Year growth: 1.77%
Msa median home value: $173,500
1 - Year growth: 4.83%
Average occupancy: 96.4%
Rent growth:6%
SUPPLY
New apartment completions in Louisville/Jefferson County were moderate recently, as 1.958 units deliv ered in the year-ending 3rd quarter 2022. Completions over the past year expanded the local inventory base 2.1%. In the past year, supply was greatest in Northwest Louisville and Northeast Louisville. At the end of 3rd quarter 2022, there were 1,896 units under construc tion with 1,516 of those units scheduled to complete in the next four quarters. Scheduled deliveries in the com ing year are expected to be concentrated in Northwest Louisville and Southwest Louisville.
OCCUPANCY
Occupancy in the past year, occupancy lost 0.6 points, with the 3rd quarter 2022 rate landing at 95.8%. Look ing at product classes in Louisville/Jefferson County, 3rd quarter 2022 occupancy registered at 94.8% in Class A units, 95.8% in Class B units and 97.0% in Class C units. Among submarkets, 3rd quarter 2022 occupancy was strongest in Northwest Louisville and Southeast Lou isville. The weakest readings were seen in Central Louisville and Southwest Louisville. Over the past five years, Northwest Louisville generally led for occupancy. During the coming year, occupancy in Louisville/Jeffer son County is expected to register around 95.5%.
LOUISVILLE SLUGGER
Batter up! It takes a special place to craft the #1 Bat in Major League Baseball. At Louisville Slugger Museum & Factory, experience history-in-the-making as you stroll through the actual factory where world-famous Louisville Slugger bats are created. The award-winning factory tour is a highlight of the visit here, but there’s plenty more to enjoy along with it.
EVAN WILLAMS BOURON
In 1783, our namesake opened Kentucky’s First Distillery on the banks of the Ohio River. Many years and barrels later, we still produce Bourbon the right way, using the same time-honored methods.
ATTRACTIONS
Located on Louisville’s historic “Whiskey Row”, the Evan Williams Bourbon Experience features an artisanal distillery, tours, educational tastings, and more!
FOURTH STREET LIVE
Fourth Street Live! is Louisville’s premier dining and entertainment destination, located in the heart of downtown Louisville, Kentucky. A short walk from historic downtown hotels, the Kentucky International Convention Center, Waterfront Park, the KFC YUM Center, Slugger Field, and much more, Fourth Street Live!
ATTRACTIONS
the bourbon business
We are a city of hot browns and Ali, riverfront parks and Slugger bats. We throw parties for horse races and pronounce Louisville like we’ve already had a taste of bourbon.
We are a place of unique offerings and world-class attractions –and our Bourbon District is no exception.
Located in Downtown Louisville, the Bourbon District is a walkable urban experience for anyone looking for a taste of Kentucky. In the Bourbon District, you’re never more than 5 minutes away from the next attraction, so planning that group tour or birthday celebration just got a lot easier.
Attractions
that will quench your thirst for a taste of Kentucky.
Enjoy the Bourbon District, Downtown’s unique walkable experience. Whether you’re a Louisville native on an afternoon stroll, in town on business with a couple hours to spare, or a bourbon connoisseur looking to expand your palate, our Bourbon District distilleries will transport you through generations of history, community, and passion.
kentucky derby interesting stats
165,000 FACILITY CAPACITY
Located in South Louisville, Churchill Downs is a Thoroughbred racetrack known for hosting the annual Kentucky Derby. It is the world’s most legendary racetrack. The first Kentucky Derby and Kentucky Oaks were both held in 1875, which was the year that the racetrack opened. The racetrack at Churchill Downs is 147 acres and features a seven-furlong turf racecourse and a one-mile dirt, oval racetrack. The racetrack can accommodate over 165,000 guests on Derby Day.
147 ACRES OCCUPIED BY RACETRACK
$373M DIRECT ECONOMIC IMPACT
146 YEARS RUNNING
