Cove Portfolio

Page 1

COVE PORTFOLIO


SUBMITTED BY: LEAD AGENTS

Jordan Dickman First Vice President Investments Cincinnati Office D. 513.878.7735 jordan.dickman@marcusmillichap.com

Nicholas 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

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.


CONTENTS

B R O K E R C A PA B I L I T I E S

06 | THE INVESTMENT

01 02

28 | LOCAL COMP E TITORS

03

42 | FIN ANCI AL BREAKDOWN

04

50 | CINCINN ATI

05

&

22 | SU BM ARKE T

O P I N I O N O F V A L U E


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

JD Schmerge

Brian Johnston

Tim VanWingerden

Senior Investment Associate Investment Associate

Investment Associate

Investment Associate

DEBT & STRUCTURED FINANCE

Chris Litzler

Senior Director of Organization MMCC

VALUATION & RESEARCH

Sam Petrosino

Financial & Research Analyst

CLIENT RELATIONS

MARKETING

Alex Papa

Marketing Coordinator

Kristin Smith Marketing

Skyler Wilson

Client Relations Manager

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

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5


S E C T I O N

6

ADG MULTIFAMILY

01

THE I


NVESTMENT ADG MULTIFAMILY

7


INVESTMENT HIGHLIGHTS

COVE PORTFOLIO

HARD TO FIND | HIGH DEMAND ASSET VALUE- ADD OPPORTUNITY

With 75% of Cincinnati’s multifamily supply 1980’s construction or

The Cove portfolio is uniquely positioned in the market with its rents

older, the Cove Portfolio offers the opportunity to own a very limited

matching those of product that is 20 years older. Currently, there is

supply asset. Not only is there an opportunity to own an asset in

only one other asset in the Fort Thomas submarket of 1990’s vintage

limited supply, there have also been no sales over 50 units in the Fort

or newer leaving a gaping hole for class A and B product to push the

Thomas area in the last 5 years. Barrier to entry into this market is

envelope on rents. The Cove at Waterworks (28 units) portion of the

one of the highest in the city due to its fundamental strengths and

portfolio has had renovations completed, while Royal Cove (68 Unit)

limited supply.

portion has the opportunity to undergo a strategic renovation plan to catapult it’s rents closer to some of its direct competitors in the

THE MARKET

surrounding submarkets of Fort Thomas, all of which outpace Roy-

As in many Midwest markets, Cincinnati evaded the worst effects

al cove by North of $450. While The Cove at Waterworks has been

of the pandemic relative to other areas of the country. Spurred by

renovated, it still boasts rents that are nearly $250 below market

healthy job gains and moderate population growth, the Cincinnati

competition giving an incoming investor both a management play

apartment market continues to attract new residents, investors, and

and a strategic renovation play in one of Northern Kentucky’s hottest

developers. Apartment demand reached 3,785 units in 2021, one of

markets.

Cincinnati’s better performances in the last 30 years. This strong apartment demand boosted occupancy to its highest recorded level

PROVEN RENT GROWTH

at 98.1% in the 4th quarter of 2021. Such strong demand allowed op-

The Cove Portfolio is situated in the center of the Fort Thomas

erators to push rental rates with an all-time high annual rental growth

submarket which has consistently been one of the top-performing

rate of 8.4% in 2021.

submarkets in Cincinnati/NKY, year over year. Within the last year, rents grew over 10% and occupancy finished out 2021 over 97%. The submarket’s noteworthy rental fundamentals in combination with the lack of new inventory will continue to sustain the strength of the rental market. 8

ADG MULTIFAMILY


COVE PORTFOLIO

66,460

REN TABLE S QUARE FEE T

96

692

TOTAL UNI T S

AVG S F

PORTFOLIO SUMMARY #1 Bedrooms

60

#2 Bedrooms

36

% Leased

95%

*

*

ADG MULTIFAMILY

9


PROPERTY SNAPSHOT

ROYAL COVE COUNTY: CAMPBELL

SUMMARY

200 WATERWORKS ROAD, FORT THOMAS, KY

1991 68 726 49,400 94% PAVED LOT

10

YEAR BUILT/RENO

NUMBER OF UNITS AVERAGE UNIT SIZE RENTABLE SQUARE FEET

OCCUPANCY PARKING

1.5

PARKING RATIO

1

# OF BUILDINGS

ADG MULTIFAMILY

WOOD CONCRETE PITCHED SHINGLE COPPER

FRAME FOUNDATION ROOF

WIRING

UTILITIES OWNER PAID OWNER PAID OWNER PAID OWNER PAID

WATER/SEWER TRASH GAS ELECTRIC


R O YAL C O VE

*

ADG MULTIFAMILY

11


ROYAL COVE

UNIT FEATURES - AC/HEATING - WALK-IN CLOSETS - CEILING FANS - CABLE READY - DISHWASHER - VINYL FLOORING - BALCONY/PATIO

12

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13


ROYAL COVE

COMMON FEATURES - FITNESS CENTER - LAUNDRY FACILITIES - PROPERTY MANAGER ON SITE - PLANNED SOCIAL ACTIVITIES - SURFACE LOT

14

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15


PROPERTY SNAPSHOT

OAKS AT NEWPORT COUNTY: CAMPBELL

SUMMARY

1167-1171, 1161-1163 WATER WORKS ROAD, NEWPORT, KY

1967 28 559 15,660 96% PAVED LOT

16

YEAR BUILT/RENO

WOOD

FRAME

NUMBER OF UNITS

BRICK

CONSTRUCTION

AVERAGE UNIT SIZE RENTABLE SQUARE FEET

OCCUPANCY PARKING

.94

PARKING RATIO

2

# OF BUILDINGS

ADG MULTIFAMILY

PITCHED SHINGLE COPPER

ROOF

WIRING

UTILITIES OWNER PAID OWNER PAID TENANT PAID TENANT PAID

WATER/SEWER TRASH GAS ELECTRIC


OAK S AT NE WP ORT

*

ADG MULTIFAMILY

17


OAKS AT NEWPORT

UNIT FEATURES - AC/HEATING - WALKIN CLOSETS - WASHER/DRYER HOOKUP - HARDWOOD FLOORS - YARD - TUB/SHOWERS - DECK

18

ADG MULTIFAMILY



OAKS AT NEWPORT

COMMON FEATURES - LAUNDRY FACILITIES - PROPERTY MANAGER ON-SITE - MAINTENANCE ON-SITE - PET FRIENDLY - SURFACE PARKING LOT

20

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21


S E C T I O N

02

SUB


MARKET


COVINGTON, KY benefits. Covington exists to nurture a welcoming and inno-

D E M O G R A P H I C S : STAT I ST I C S

vative community where passionate people love to be. The

Population: 40,552

opposite of a cookie-cutter, strip-mall city, Covington is in

Median Age: 36

The City of Covington offers small-city charm and big-city

rich in character with a deep sense of place and an energy you’ll crave.

Median HH Income: $41,254 Median Property Value: $105,900

2,100 NEW JOBS + $85.6 M IN CAPITAL INVESTMENTS

(2019) # of Employees: 19,190 % of Housing Renter Occupied: 52%


E C O N O M I C OV E R V I E W Despite the hardships of the pandemic, overall, 2020 was a phenomenal year of growth and investment for the city. A record number of businesses chose Covington, and several established businesses grew exponentially. The new Neighborhood Development Code makes it significantly easier to invest and do business with the City.

I N V E ST M E N TS C O M I N G TO C OV I N GTO N INCON MARKETING COMMUNICATIONS Relocated to covington in february 2020. $4M Investment | 38 + Jobs GENTIS SOLUTIONS Moving headquarters to Covington in 2021 80 jobs, Year 1 275 jobs, next 10 years DBL LAW Moving headquarters to Covington in 2021 $11.3MM investment 76+ jobs REGADGET Moving operations to Covington $7MM investment | 25+ jobs HILLTOP BASIC RESOURCES Moved headquarters to Covington in 2020 $3.3MM investment | 20+ jobs

ADG MULTIFAMILY


EXPANSIONS H OT E L C OV I N GTO N Hotel Covington is set to expand as part of a $22.5 million redevelopment of the former YMCA and Gateway Bookstore. The project will revitalize a visible corner of downtown Covington, transforming the 72,000- squarefoot building at 19 E. Pike St. into a bourbon experience, 10,000 square feet of office space and an expansion of the FourDiamond boutique hotel. The upper floors of the Covington YMCA will be converted into 60 VIP and presidential suites to complement Hotel Covington’s 114 existing rooms just to the South.

$22.5M INVESTMENT 100+ NEW JOBS C OV I N GTO N YA R D Covington Yard, an up-scale outdoor food court, located at Fourth and Greenup, opened in September. The Yard features open green space, an outdoor bar and innovative shipping containers outfitted for food vendors.


R I V E R F RO N T C O M M O N S The Covington Plaza, featuring a 1,275 -seat amphitheater, will be the centerpiece of the nearly completed Riverfront Commons project. The plaza will serve as the anchor to an 11.5-mile walking/biking path along the Ohio River that connects several trails and parks in Northern Kentucky and Ohio.

D E V E LO P I RS S I T E Covington purchased the vacant IRS building and the 23-acre site and plans are fullsteam ahead for this once-ina-generation opportunity along the Ohio River. The vision of the development includes a restored street grid, a levee park, a community plaza for festivals and a mixture of buildings containing offices, retail shops and places to live.


S E C T I O N

03

LOCAL C


COMPETITORS


LOCAL COMPETITORS

O

REN T C OMPAR ABLE S 1

KENT LOFTS

2

CITY VIEW APARTMENTS

3

SCHOOL HOUSE FLATS

4

SCHOOL HAUS APARTMENTS

5

ASPEN PINES

6

THE OVERLOOK AT FT THOMAS

2

5


3

4 1

R O YAL C O VE

OAK S AT NE WP ORT

*

6

*


KENT LOFTS UNITS YEAR BUILT OCCUPANCY UNIT MIX One Bedroom Two Bedroom

# OF UNITS SQFT 28 970 36

1460

RENT $1,208 $1,549

Apartment Interior Amenities Washer/Dryer Hookups Available In Select Units 65 Above Standard Ceiling Height 1940 Microwave Ovens In All Units 100% High Speed Internet Access RENT/SF Digital Lock in All Units $1.25 $1.06

Common Area Amenities Controlled Access Fitness Center Community Room Two Laundry Facilities Utilities Responsibility Resident Pays Electricity Resident Pays Sewer Property Pays Trash Removal Resident Pays Water


CITY VIEW APARTMENTS Apartment Interior Amenities Washer/Dryer Available In Select Units Microwave Oven In Select Units UNITS High Speed Internet Access YEAR BUILT OCCUPANCY Common Area Amenities UNIT MIX Fitness Center One Bedroom Clubhouse Two Bedroom Swimming Pool Laundry Facilities & Shops Near The Bus Line Utilities Responsibility N/A

# OF UNITS 30

SQFT 800

RENT $990

47

943

$1,181

77 1986 97.4% RENT/SF $1.24 $1.25


SCHOOL HAUS APARTMENTS UNITS YEAR BUILT OCCUPANCY UNIT MIX One Bedroom Two Bedroom

# OF UNITS SQFT 14 550 14

750

RENT $1,000 $1,204

28 1905 73.2% RENT/SF $1.82 $1.71

Apartment Interior Amenities Air Conditioning Heating Ceiling Fans Tub/Shower Granite Countertops Stainless Steel Appliances Hardwood Floors Vinyl Flooring Common Area Amenities Laundry Facilities Maintenance on site 24 Hour Availability Elevator Clubhouse Vintage Building Picnic Area Utilities Responsibility N/A


SCHOOL HOUSE FLATS Apartment Interior Amenities Washer/Dryer Combo Ceiling Fan Carpeting in bedrooms Central Air Conditioning and Heat Huge Windows Renovated apartments Stainless Steel Appliances 12’ Ceilings High Speed Internet Access Common Area Amenities Elevator Historic Building Laundry On-Site Off Street Parking Secured Entry On-Site Maintenance Walking Distance to Local Cafes Utilities Responsibility N/A

UNITS YEAR BUILT OCCUPANCY UNIT MIX One Bedroom

# OF UNITS 21

SQFT 646

RENT $646

Two Bedroom

14

974

$1,215

35 1983 N/A RENT/SF $1.50 $1.25


THE OVERLOOK AT FT THOMAS UNITS YEAR BUILT OCCUPANCY UNIT MIX One Bedroom Two Bedroom

# OF UNITS SQFT 20 943 40

1050

RENT $950 $1,010

60 1985 97.5% RENT/SF $1.01 $0.96

Apartment Interior Amenities Washer/Dryer Hookups In All Units Microwave Ovens In All Units High Speed Internet Access

Common Area Amenities Laundry Facilities Private Balcony/Patio Semi-Private Entry Outside Storage Utilities Responsibility Resident Pays Electricity Resident Pays Sewer Property Pays Trash Removal Resident Pays Water


ASPEN PINES Apartment Interior Amenities Washer/Dryer Hookups In All Units Fireplaces Available In Select Units Vaulted Ceilings Above Standard Ceiling Height Microwave Oven In Select Units Common Area Amenities Fitness Center Business Center Clubhouse Swimming Pool Laundry Facilities Utilities Responsibility Resident Pays Electricity Resident Pays Gas Resident Pays Sewer Property Pays Trash Removal Resident Pays Water

UNITS YEAR BUILT OCCUPANCY UNIT MIX One Bedroom

245 2004 94.7% RENT/SF $1.37

# OF UNITS 28

SQFT 890

RENT $1,228

Two Bedroom

166

1153

$1,364

$1.18

Three Bedroom

51

1578

$1,740

$1.28


LOCAL COMPETITORS - ONE BEDROOM


One Bedroom Property Aspen Pines Kent Lofts Royal Cove Pro Forma Two Rivers Apartments School Haus Apartments City View Apartments Oaks of Newport Pro Forma School House Flats

The Overlook at Ft Thomas Royal Cove Average Effective Oaks of Newport Average Effective

Year Built 2004 1940 1991 1983 1905 1986 1967 1924

# Units 245 65 68 71 28 77 60 35

Avg SF 890 970 675 600 550 800 435 646

Avg Rent $1,223 $1,208 $1,100 $1,052 $1,000 $990 $975 $972

Avg Rent/SF $1.37 $1.25 $1.63 $1.75 $1.82 $1.24 $2.24 $1.50

1985 1991 1967

60 68 60

943 675 435

$950 $779 $644

$1.01 $1.15 $1.48


LOCAL COMPETITORS - TWO BEDROOM


Two Bedroom Property

Kent Lofts 300 Fairview Aspen Pines Royal Cove Pro Forma School House Flats School Haus Apartments City View Apartments Oaks of Newport Pro Forma Fox Chase South The Overlook at Ft Thomas Royal Cove Average Effective Oaks of Newport Average Effective

Year Built

# Units

Avg SF

Avg Rent

Avg Rent/SF

1940 2020 2004 1991 1924 1905 1986 1967 1988 1985 1991 1967

65 9 245 68 35 28 77 60 120 60 68 60

1460 1063 1153 870 974 750 943 800 1000 1050 870 800

$1,549 $1,450 $1,364 $1,300 $1,215 $1,204 $1,181 $1,175 $1,039 $1,010 $934 $931

$1.06 $1.36 $1.18 $1.49 $1.25 $1.61 $1.25 $1.47 $1.04 $0.96 $1.07 $1.16


S E C T I O N

04

FINANC


IAL BREAKDOWN


COVE PORTFOLIO - FINANCIALS

UNIX MIX SUMMARY AV E R A G E E F F E C T I V E

MARKET

P RO J E CT E D

NO. OF UNITS

R E N TA B L E S F

T O TA L S F

RENT/UNIT

RENT/SF

T O TA L R E N T POTENTIAL

SUMMARY One Bedroom Two Bedroom

60 Units 36 Units

595 SF 854 SF

35,700 SF 30,760 SF

$734.22 $931.33

$1.23 $1.09

$44,053 $33,528

$863.33 $1,277.00

$1.45 SF $1.49 SF

$51,800 $45,972

$1,058.33 $1,422.22

$1.78 SF $1.66 SF

$63,500 $51,200

Totals / Wtd. Averages

96 Units

692 SF

66,460 SF

$808.13

$1.17 SF

$77,581

$1,018.46

$1.47 SF

$97,772

$1,194.79

$1.73 SF

$114,700

UNIT TYPE

RENT/UNIT

UNIT DISTRIBUTION

RENT/SF

TOTA L R E N T P OT E N T I A L

RENT/UNIT

RENT/SF

TOTA L R E N T P OT E N T I A L

UNIT RENTS

38% 62% 32%

One Bedroom One Bedroom Two Bedroom

44

ADG MULTIFAMILY

Avg. Effective

Two Bedroom Pro Forma Projection


COVE PORTFOLIO - FINANCIALS

UNIX MIX BREAKDOWN AV E R A G E E F F E C T I V E

MARKET

P RO J E CT E D

NO. OF UNITS

R E N TA B L E S F

T O TA L S F

RENT/UNIT

RENT/SF

T O TA L R E N T POTENTIAL

ONE BEDROOM 1BR/1BA - Oaks of Newport 1BR/1BA - Royal Cove

20 Units 40 Units

435 SF 675 SF

8,700 SF 27,000 SF

$644.45 $779.10

$1.48 SF $1.15 SF

$12,889 $31,164

$710.00 $940.00

$1.63 SF $1.39 SF

$14,200 $37,600

$975.00 $1,100.00

$2.24 SF $1.63 SF

$19,500 $44,000

Totals / Wtd. Averages

60 Units

595 SF

35,700 SF

$734.22

$1.23 SF

$44,053

$863.33

$1.45 SF

$51,800

$1,058.33

$1.78 SF

$63,500

TWO BEDROOM 2BR/1BA - Oaks of Newport 2BR/1BA - Royal Cove

8 Units 28 Units

800 SF 870 SF

6,400 SF 24,360 SF

$921.43 $934.16

$1.15 SF $1.07 SF

$7,371 $26,156

$1,200.00 $1,299.00

$1.50 SF $1.49 SF

$9,600 $36,372

$1,325.00 $1,450.00

$1.66 SF $1.67 SF

$10,600 $40,600

Totals / Wtd. Averages

36 Units

854 SF

30,760 SF

$931.33

$1.09 SF

$33,528

$1,277.00

$1.49 SF

$45,972

$1,422.22

$1.66 SF

$51,200

UNIT TYPE

RENT/UNIT

RENT/SF

TOTA L R E N T P OT E N T I A L

RENT/UNIT

RENT/SF

TOTA L R E N T P OT E N T I A L

ADG MULTIFAMILY

45


INCOME EXPENSE

COVE PORTFOLIO - FINANCIALS

INCOME & EXPENSES

CURRENT GROSS POTENTIAL RENT All Units at Market Rent Gain (Loss) to Lease GROSS SCHEDULED RENT OTHER INCOME Water Reimbursement Pet Fees Collections Application Fees Laundry Income Late Rent Fees Utility Read Income from Tenants Admin Fees Waste Disposal Reimbursement MTM Fee Electric Reimbursement Waiver Fee Total Other Income GROSS POTENTIAL INCOME Physical Vacancy Bad Debt Concessions Allowance EFFECTIVE GROSS INCOME NON-CONTROLLABLE Real Estate Taxes 2020 Taxes Paid Adjustment for Sale Total Real Estate Taxes Insurance Utilities Gas & Electric Gas & Electric Vacant Water & Sewage Trash Removal Meter Reading Fee Total Utilities Total Non-Controllable CONTROLLABLE Contract Services Snow Removal Landscaping/Grounds Pest Control Fire

Total Contract Services Repairs & Maintenance Marketing & Promotion On-Site Payroll Payroll Taxes & Benefits General & Administrative Management Fee Telephone & Cable Replacement & Reserves Total Controllable TOTAL EXPENSES NET OPERATING INCOME

$949,000 T3 ($19,069) T3 $929,931 $31,508 $14,489 $10,911 $5,940 $5,572 $4,400 $3,640 $2,400 $2,016 $1,600 $1,357 $1,273 $87,794 $1,017,725 ($81,091) $0 ($633) $936,001

YEAR 1 2.01%

9,885 (199) 9,687

$1,376,400 ($82,584) $1,293,816 $32,453 $14,924 $11,238 $6,118 $5,739 $4,532 $3,749 $2,472 $2,076 $1,648 $1,397 $1,311 $90,428 $1,384,244 ($64,691) ($6,469) ($6,469) $1,306,615

5.00% 0.50% 0.50% 88.00%

338 155 117 64 60 47 39 26 22 17 15 14 942 14,419 (674) (67) (67) 13,611

6.00%

T3 T3 T3 T3 T3 T3 T3 T3 T3 T3 T3 T3

3.39% 1.56% 1.17% 0.64% 0.60% 0.47% 0.39% 0.26% 0.22% 0.17% 0.15% 0.14% 9.44%

T3 T3 T3

8.72% 0.00% 0.07% 89.20%

328 151 114 62 58 46 38 25 21 17 14 13 915 10,601 (845) 0 (7) 9,750

% of EGI 10.62% 0.00% 10.62% 4.34%

Per Unit 1,036 0 1,036 423

$99,412 $0 $99,412 $28,800

% of EGI 7.61% 0.00% 7.61% 2.20%

Per Unit 1,036 0 1,036 300

$99,412 Auditor $0 $99,412 $40,636 T12

2.51% 1.15% 0.87% 0.47% 0.44% 0.35% 0.29% 0.19% 0.16% 0.13% 0.11% 0.10% 7.33%

14,338 (860) 13,477

$15,831 $4,414 $34,151 $9,888 $2,644 $66,928 $206,976

T12 T12 T12 T12 T12

1.69% 0.47% 3.65% 1.06% 0.28% 7.15% 22.11%

165 46 356 103 28 697 2,156

$16,148 $4,502 $34,834 $10,086 $2,697 $68,267 $196,478

1.24% 0.34% 2.67% 0.77% 0.21% 5.22% 15.04%

168 47 363 105 28 711 2,047

$12,958 $24,506 $3,468 $23,870 $64,802 $52,800 $17,446 $105,600 $9,849 $30,172 $37,944 $2,838 $24,480 $345,931 $552,907 $383,095

T12 T12 T12 T12

1.38% 2.62% 0.37% 2.55% 6.92% 5.64% 1.86% 11.28% 1.05% 3.22% 4.05% 0.30% 2.62% 36.96% 59.07% 40.93%

135 255 36 249 675 550 182 1,100 103 314 395 30 255 3,603 5,759 3,991

$3,360 $9,600 $3,360 $4,800 $21,120 $52,800 $7,200 $105,600 $14,400 $14,400 $65,331 $3,360 $24,970 $309,180 $505,658 $800,957

0.26% 0.73% 0.26% 0.37% 1.62% 4.04% 0.55% 8.08% 1.10% 1.10% 5.00% 0.26% 1.91% 23.66% 38.70% 61.30%

35 100 35 50 220 550 75 1,100 150 150 681 35 260 3,221 5,267 8,343

Note 2 T12 Note 3 T12 T12 T12 T12 Note 1


YEAR 2 $1,417,692 ($28,354) $1,389,338

YEAR 3 2.00% 2.41% 1.11% 0.83% 0.45% 0.43% 0.34% 0.28% 0.18% 0.15% 0.12% 0.10% 0.10% 7.03%

14,768 (295) 14,472

$1,460,223 ($29,204) $1,431,018 $34,429 $15,833 $11,923 $6,491 $6,088 $4,808 $3,978 $2,623 $2,203 $1,748 $1,482 $1,391 $95,866 $1,526,885 ($71,551) ($7,155) ($7,155) $1,441,023

5.00% 0.50% 0.50% 92.00%

359 165 124 68 63 50 41 27 23 18 15 14 999 15,905 (745) (75) (75) 15,011

2.00% 2.41% 1.11% 0.83% 0.45% 0.43% 0.34% 0.28% 0.18% 0.15% 0.12% 0.10% 0.10% 7.03%

15,211 (304) 14,906

$33,426 $15,372 $11,576 $6,302 $5,911 $4,668 $3,862 $2,546 $2,138 $1,697 $1,439 $1,350 $93,107 $1,482,445 ($69,467) ($6,947) ($6,947) $1,399,085

5.00% 0.50% 0.50% 92.00%

348 160 121 66 62 49 40 27 22 18 15 14 970 15,442 (724) (72) (72) 14,574

$99,412 $0 $99,412 $29,376

% of EGI 7.11% 0.00% 7.11% 2.10%

Per Unit 1,036 0 1,036 306

$99,412 $0 $99,412 $29,964

% of EGI 7.11% 0.00% 7.11% 2.14%

Per Unit 1,036 0 1,036 312

$16,471 $4,592 $35,531 $10,287 $2,751 $69,632 $198,419

1.18% 0.33% 2.54% 0.74% 0.20% 4.98% 14.18%

172 48 370 107 29 725 2,067

$16,800 $4,684 $36,241 $10,493 $2,806 $71,025 $200,400

1.20% 0.33% 2.59% 0.75% 0.20% 5.08% 14.32%

175 49 378 109 29 740 2,087

$3,427 $9,792 $3,427 $4,896 $21,542 $53,856 $7,344 $107,712 $14,688 $14,688 $69,954 $3,427 $25,469 $318,681 $517,100 $881,985

0.24% 0.70% 0.24% 0.35% 1.54% 3.85% 0.52% 7.70% 1.05% 1.05% 5.00% 0.24% 1.82% 22.78% 36.96% 63.04%

36 102 36 51 224 561 77 1,122 153 153 729 36 265 3,320 5,386 9,187

$3,496 $9,988 $3,496 $4,994 $21,973 $54,933 $7,491 $109,866 $14,982 $14,982 $72,051 $3,496 $25,978 $325,752 $526,152 $914,872

0.25% 0.71% 0.25% 0.36% 1.57% 3.93% 0.54% 7.85% 1.07% 1.07% 5.00% 0.25% 1.86% 23.13% 37.61% 65.39%

36 104 36 52 229 572 78 1,144 156 156 729 36 271 3,371 5,481 9,530

UNDERWRITING NOTES

#

NOTE

1

Replacement & Reserves: added based on market norm of $255 per unit per year

2

R/M: Royal and Newport normalized down from 64,603 & 29,299

3

Payroll: Royal and Newport normalized down from 162,677 & 76,941

ADG MULTIFAMILY

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S E C T I O N

05

LOC


AL MARKET


CINCINNATI The steady and stable nature of the Cincinnati apartment market due to seasonal demand patterns, the three subsemarket was undoubtfully a benefit through 2020. The MSA quent quarters saw huge demand and absorption totaled saw a 2.7% annual increase in effective asking rents on 1,563 units. That is 38% above the 20-year norm for annual new leases which matched the market’s norm for the 2010s absorption. During the peak of the pandemic challenges the decade. This growth put Cincinnati at #14 amongst the 50 job market declined 4.6%, this ranked Cincinnati 3rd best largest markets for rent growth in 2020. Although occupan- among the Midwest and was significantly better than the cy was down 0.3 points from the prior year’s rate, the 4th national average of 5.8%. quarter 2020 occupancy rate (96.4%) ranked #11 among the top 50 markets and #3 regionally. Only Q1 2020 saw net move-outs, although that’s typically the case in the local


E C O N O M I C OV E R V I E W Prior to the pandemic, Cincinnati’s economy grew at a moderate rate – averaging an estimated growth pace of 2.1% annually in the five years ending Q1 2020. However, the economy contracted 2.4% in 2020. By November of 2020 the pandemic induced the loss of 51,200 jobs putting the employment rate at 4.8%, below the national average of 6.4%. Cincinnati has experienced less severe economic impacts compared to other cities, this fact is credited to the divers and stable employers that call Cincinnati home. There are eight fortune 500 companies headquartered in Cincinnati: Kroger, Procter & Gamble, Fifth Third Bancorp, American Financial Group, Cincinnati Financial, Western & Southern Financial Group, Cintas & Ak Steel Holding. In addition to the nationally recognized powerhouse corporations, Cincinnati has placed a specific focus on programs to foster and promote entrepreneurs and start-ups. Also the city has made significant investments in facilities and infrastructure to support medical research, and other scientific innovations to attract and retain talent found at the University of Cincinnati. The Innovation Corridor by Uptown Consortium is the largest single development in Cincinnati since the Great American Ball Park and will be a state-of-the-art science and research hub next to UC.

ADG MULTIFAMILY


D E M O G R A P H I C OV E R V I E W Population growth in Cincinnati remains ulation growth coupled with a modest modest, as the metro’s population ex- pipeline has maintained occupancies panded just 2.5% from 2014-2019, be- between 95%-97% over the last six years low the U.S. average of 2.9%. During with the average occupancy in Q4 of that period the majority of Cincinnati’s 2020 being above the six year average growth came from the 55+ age segment at 96.4%. The average effective asking which grew 11.5%. The 20-to 34-year-old rents have outperformed the Midwest segment grew modestly over the five- averages since 2011 and in 2020 the year period increasing 2.1% which was average effective rents grew by 2.7% above the national average of 1.6%. A outpacing the Midwest average of 0.8% very strong aspect to Cincinnati’s popu- and the national average of -1.1%. lation is the level of education amongst the working age population with 37% of that segment having a bachelor’s degree or higher compared to the national average of 33.1%. The modest pop-

D E M O G R A P H I C S : STAT I ST I C S Population: 2,190,000

Msa median hhi: $62,743

Msa median home value: $173,500

Average occupancy: 96.4%

Median age: 38 (.39%)

1 - Year growth: 1.77%

1 - Year growth: 4.83%

Rent growth: 2.7%


S U P P LY & D E M A N D DEMAND • Annual absorption in Cincinnati has ranged from 776 units to 3,068 units in the last five years. Average of 1,788 units annually during that time. • In the last 12 months, the Cincinnati market recorded demand for 1,462 units, exceeding concurrent supply volumes for the first time since the pandemic began. • Campbell County, Warren County and Butler County are a few of the strongest areas in Cincinnati, based on absorption, over the last five years.

S U P P LY • Over the past five years Annual new supply averaged 1,555 units, and annual inventory growth averaged 1.0%. In the year-ending 2nd quarter 2021, there were 1,131 units delivered. • Among submarkets, new supply over the past five years has been concentrated in Central Cincinnati, Campbell/Kenton Counties and Northeast Cincinnati/Warren County, totaling 62% of the market’s total completions over that time. Scheduled new deliveries in the coming year are expected to be concentrated in Central Cincinnati.


HEART OF DOWNTOWN The Banks is a gathering place for people all across the region. It provides a lively atmosphere full of attractions that promote public enjoyment and appreciation for city’s riverfront. Spanning the full width of the Central Business District, The Banks brings the waterfront to downtown’s front door. Thriving off of the energy generated by the adjacent professional sports venues, Paul Brown Stadium to the west and Great American Ballpark to the east, The Banks provides life and energy as a premier live, work, and play district.


TQ L STA D I U M The FCC-TQL partnership brings together two Cincinnati-grown, leading businesses that share a “no limits” philosophy as well as a deep connection and commitment to our local community. There are a lot of synergies that make this alliance between TQL and FCC a perfect match and are reflected throughout the stadium from — the fin lighting to the TQL Beer District. The stadium features first-in-the-world lighting technology powered by 2.7 miles of LED lights.

I N T E R E ST I N G STAT I ST I C S 26,000 STADIUM SEATS 14,256 FEET OF LED LIGHTS 360 CANOPY ROOF 3,170 BAILEY SEATS ADG MULTIFAMILY

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ATTRACTIONS DORA From 11am – 1am daily, the 85-acre DORA district at The Banks allows guests to take their beverage purchased from one of the 18 Banks establishments and explore our public plazas and green spaces. It simply needs to be in the Official DORA Cup. At risk of missing the first pitch? Late for the opening act? Take your beverage purchased in a DORA cup from a Banks establishment and go! Waiting for a table, or wish to picnic outside in The Banks plazas or greenspaces? Grab a DORA beverage from a Banks establishment and explore!

C I N C I N N AT I Z O O The Cincinnati Zoo & Botanical Garden is the second oldest zoo in the United States, founded in 1873 and officially opening in 1875, after the Roger Williams Park Zoo. It is located in the Avondale neighborhood of Cincinnati, Ohio. It originally began with 64.5 acres in the middle of the city, but has spread into the neighboring blocks and several reserves in Cincinnati’s outer suburbs. It was appointed as a National Historic Landmark in 1987.


H A R D RO C K CAS I N O The game is always on at Hard Rock Casinos, where stars are made every night. Come try your hand at the tables, with classic games including blackjack, baccarat and poker, or tap into thousands of the hottest slots on the planet. With the world’s greatest rock memorabilia collection to enhance the thrill, plus the accompaniment of live, world-class entertainment, the atmosphere is like no other.


RETAIL & SHOPPING In addition to the restaurant and nightlight scene, the area has no shortage of retail options. Downtown offers both boutiques and department stores. Over-the-Rhine (OTR) is a historic, walkable district of downtown Cincinnati with many independent shops. Cincinnati’s

homage

Over-the-Rhine neighborhood was once a place where residents would not recommend to visitors, but that has changed. The restaurant and nightlife scene is now thriving, and the shopping scene is beginning to catch up. Most of the shops are in the southwest quarter of Over-the-Rhine, on either Vine or Main St. You won’t find chain stores in this walkable shopping district. MiCA 12/v and Urban Eden are a popular gift shops that sell local arts and crafts. Elm & Iron sells vintage and up-cycled items for the home. The Little Mahatma sells exotic jewelry and folk art from around the world. You’ll find several clothing boutiques, including Mannequin, a non-profit

otr

upscale and vintage boutique that benefits local charities. Park + Vine is a popular general store for environmentally-conscious shoppers; they sell a variety of merchandise including green cleaning and personal products, vegan foods, garden products and more.

elm & iron


FINDLAY FARMERS MARKET Findlay Market is Ohio’s oldest continuously operated public market

merchants are new startups, while others have been in business for

and is located in the historic Over-the-Rhine neighborhood. The mar- generations. You’ll find everything from fresh meat and produce to ket is a wonderful place for locals to buy their groceries as well as imported fine teas to Belgian waffles. There are restaurants as well a must-see historic spot for visitors to Cincinnati. Findlay Market is as a beer garden, so plan to stay for lunch. Findlay Market has a fasopen year-round, Tuesday through Sunday, with a seasonal farmers cinating history. Why not take a tour to learn more? There are several market. Nearly 40 full-time businesses operate year-round, plus over 100 more vendors operate on weekends or part-time. Many vendors sell raw food while others specialize in prepared foods. Some of the

different tour options, including a culinary tour with tasty samples.


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