Deer Park Apartments OM

Page 1

DEER PARK APARTMENTS

2024 OFFERING MEMORANDUM 4323 OAKWOOD AVE, CINCINNATI, OHIO OM
CONTENTS LEAD AGENTS Austin Sum Senior Associate Cincinnati Office D. 513.878.7747 austin.sum@marcusmillichap.com Nick Andrews First Vice President Investments Cincinnati Office D. 513.878.7741 nicholas.andrews@marcusmillichap.com Jordan Dickman First Vice President Investments Cincinnati Office D. 513.878.7735
The Investment Local Competitors Financials 06 08 10 SECTIONS
jordan.dickman@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.”

300 WEST 4TH STREET, CINCINNATI, OH

GLOBAL REACH, LOCAL EXPERTISE

$86.3B

VALUE OF RECENTLY CLOSED TRANSACTIONS

12,272

CLOSED SALES IN MOST RECENT YEAR

$12.8B

TOTAL VALUE OF RECENT LISTINGS

2,143

CLOSED FINANCINGS IN MOST RECENT YEARS

CALABASAS, CALIFORNIA | HQ 2,500 | EMPLOYEES 80+ | OFFICES
CINCINNATI DAYTON LEXINGTON LOUISVILLE

YOUR TEAM

JORDAN DICKMAN

FIRST VICE PRESIDENTS DIRECTOR, NMHG

NICK ANDREWS

FIRST VICE PRESIDENTS DIRECTOR, NMHG

AUSTIN SUM

SENIOR INVESTMENT ASSOCIATE

AUSTIN Hall

INVESTMENT ASSOCIATE

ALDEN SIMMS

INVESTMENT ASSOCIATE

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

BROKER SUPPORT

SAM PETROSino

VALUATION & RESEARCH

BRETT MARTIN

INTERNAL ACCOUNTANT

MARKETING

DATA SUMMARY

Property Address: 4323-4334 Oakwood Ave

City, State, Zip: Cincinnati, Ohio 45236

Submarket: Deer Park

County: Hamilton County

Year Built/Reno: 1949

Number Of Units: 30

Avg Unit Size: 650

Rentable Sqft: 19500

Number of Parcels: 2

Lot Size (Acres): 0.7

Density: 42.86

# of Buildings: 5

# of Stories: 3

Current Occupancy: 100%

Parking Type: Surface Lot

Parking Surface: Blacktop

SECTION - THE INVESTMENT

01

RENT MATRIX | ONE BED

Twin Pines $1,059 Deer Park Apartments $748 The Oaks of Kenwood $1,095
$900 6438 Kennedy Ave $900
Ravine Apts
02 SECTIONLOCAL COMPETITORS One Bedroom Property Year Built # Units Avg SF Avg Rent Avg Rent/SF The Oaks of Kenwood 1979 68 575 $1,095 $1.90 Twin Pines 1973 73 600 $1,059 $1.77 Subject Pro Forma 1949 30 650 $925 $1.42 Ravine Apartments 1961/2023 24 653 $900 $1.38 6438 Kennedy Ave 1949 4 650 $900 $1.38 Subject Average Effective 1949 30 650 $748 $1.15 Market Average 1960 38 630 $938 $1.50

UNIT MIX BREAKDOWN

DEER PARK APARTMENTS - financials 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 One Bedroom 1BR/1BA - Renovated 20 Units 650 SF 13,000 SF $787.50 $1.21 SF $15,750 $825.00 $1.27 SF $16,500 $950.00 $1.46 SF $19,000 1BR/1BA - Renovated - Basement 10 Units 650 SF 6,500 SF $668.00 $1.03 SF $6,680 $700.00 $1.08 SF $7,000 $875.00 $1.35 SF $8,750 Totals / Wtd. Averages 30 Units 650 SF 19,500 SF $747.67 $1.15 SF $22,430 $783.33 $1.21 SF $23,500 $925.00 $1.42 SF $27,750 Summary One Bedroom 30 Units 650 SF 19,500 SF $747.67 $1.15 $22,430 $783.33 $1.21 SF $23,500 $925.00 $1.42 SF $27,750 Totals / Wtd. Averages 30 Units 650 SF 19,500 SF $747.67 $1.15 SF $22,430 $783.33 $1.21 SF $23,500 $925.00 $1.42 SF $27,750 03 SECTION - THE FINANCIALS

UNIT RENTS

UNIT DISTRIBUTION

DEER PARK APARTMENTSfinancials

T12 RENT ROLL: AS OF MARCH 31, 2024 INCOME AND EXPENSES: APRIL 2023 - MARCH 2024 All Units at Market Rent $274,225 T12 9,141 Gain (Loss) to Lease ($15,310) T12 5.58% (510) GROSS SCHEDULED $258,915 8,630 TOTAL OTHER INCOME $31,325 12.10% 1,044 GROSS POTENTIAL INCOME $290,240 9,675 Physical Vacancy ($3,069) T12 1.19% (102) Bad Debt ($2,488) T12 0.96% (83) EFFECTIVE GROSS INCOME $284,683 92.27% 9,489 NON-CONTROLLABLE Real Estate Taxes % of EGI Per Unit 2024 Taxes $35,097 Auditor 12.33% 1,170 Total Real Estate Taxes $35,097 12.33% 1,170 Insurance $4,577 T12 1.61% 153 Utilities Gas & Electric $5,625 T12 1.98% 187 Gas & Electric Vacant $310 T12 0.11% 10 Water & Sewage $11,324 T12 3.98% 377 Trash Removal $1,852 T12 0.65% 62 Utility Reeding Fee Income $1,509 T12 0.53% 50 Utilities $20,619 7.24% 687 Total Non-Controllable $60,293 21.18% 2,010 CONTROLLABLE Contract Services Snow Removal $0 0.00% 0 Landscaping/Grounds $2,097 T12 0.74% 70 Pest Control $243 T12 0.09% 8 Contract Services $2,339 0.82% 78 Repairs & Maintenance $10,221 T12 3.59% 341 Marketing & Promotion $2,220 T12 0.78% 74 On-Site Payroll $26,894 T12 9.45% 896 Payroll Taxes & Benefits $2,945 T12 1.03% 98 General & Administrative $6,094 T12 2.14% 203 Management Fee $11,414 T12 4.01% 380 Replacement & Reserves $9,000 Note 1 3.16% 300 Total Controllable $71,128 24.98% 2,371 TOTAL EXPENSES $131,421 46.16% 4,381 NET OPERATING INCOME $150,923 53.01% 5,031 EXPENSE INCOME UNDERWRITING NOTES # NOTE 1 Replacement & Reserves: added based on market norm of $255 per unit per year
T6 T3 YEAR 1 $277,300 T6 9,243 $276,000 T3 9,200 $333,000 11,100 ($9,763) T6 3.52% (325) ($8,412) T3 3.05% (280) ($6,660) 2.00% (222) $267,537 8,918 $267,588 8,920 $326,340 10,878 $31,599 11.81% 1,053 $32,316 12.08% 1,077 $33,284 10.20% 1,109 $299,136 9,971 $299,904 9,997 $359,624 11,987 ($4,464) T6 1.67% (149) ($2,065) T3 0.77% (69) ($16,317) 5.00% (544) ($3,707) T6 1.39% (124) $0 T3 0.00% 0 ($1,632) 0.50% (54) $290,965 93.43% 9,699 $297,840 96.18% 9,928 $341,675 92.50% 11,389 % of EGI % of EGI Per Unit % of EGI $35,097 Auditor 12.06% 1,170 $35,097 Auditor 11.78% 1,170 $35,097 11.78% 1,170 $35,097 12.06% 1,170 $35,097 11.78% 1,170 $35,097 11.78% 1,170 $4,577 T12 1.61% 153 $4,577 T12 1.61% 153 $13,500 4.53% 450 $5,625 T12 1.98% 187 $5,625 T12 1.98% 187 $5,737 1.93% 191 $310 T12 0.11% 10 $310 T12 0.11% 10 $316 0.11% 11 $11,324 T12 3.98% 377 $11,324 T12 3.98% 377 $11,550 3.88% 385 $1,852 T12 0.65% 62 $1,852 T12 0.65% 62 $1,889 0.63% 63 $1,509 T12 0.53% 50 $1,509 T12 0.53% 50 $1,540 0.52% 51 $20,619 7.09% 687 $20,619 6.92% 687 $21,032 7.06% 701 $60,293 20.76% 2,010 $60,293 20.31% 2,010 $69,628 23.38% 2,321 $0 0.00% 0 $0 0.00% 0 $1,050 0.31% 35 $2,097 T12 0.74% 70 $2,097 T12 0.74% 70 $2,250 0.66% 75 $243 T12 0.09% 8 $243 T12 0.09% 8 $1,050 0.31% 35 $2,339 0.80% 78 $2,339 0.79% 78 $4,350 1.46% 145 $10,221 T12 3.59% 341 $10,221 T12 3.59% 341 $18,000 5.27% 600 $2,220 T12 0.78% 74 $2,220 T12 0.78% 74 $1,500 0.44% 50 $26,894 T12 9.45% 896 $26,894 T12 9.45% 896 $27,000 7.90% 900 $2,945 T12 1.03% 98 $2,945 T12 1.03% 98 $3,000 0.88% 100 $6,094 T12 2.14% 203 $6,094 T12 2.14% 203 $3,750 1.10% 125 $11,414 T12 4.01% 380 $11,414 T12 4.01% 380 $13,667 4.00% 456 $9,000 Note 1 3.09% 300 $9,000 Note 1 3.02% 300 $9,000 2.63% 300 $71,128 24.90% 2,371 $71,128 24.81% 2,371 $80,267 23.68% 2,676 $131,421 45.17% 4,381 $131,421 44.12% 4,381 $149,895 50.33% 4,997 $157,206 54.03% 5,240 $164,080 55.09% 5,469 $191,780 64.39% 6,393
T12 T6 T3 YR 1 YR 2 YR 3 YR 4 YR 5 YE APR-2025 YE APR-2026 YE APR-2027 YE MAR-2028 YE MAR-2029 GROSS POTENTIAL RENT All Units at Market Rent $274,225 $277,300 $276,000 $333,000 $342,990 $353,280 $363,878 $374,794 Gain (Loss) to Lease ($15,310) ($9,763) ($8,412) ($6,660) ($6,860) ($7,066) ($7,278) ($7,496) GROSS SCHEDULED RENT $258,915 $267,537 $267,588 $326,340 $336,130 $346,214 $356,601 $367,299 TOTAL OTHER INCOME $31,325 $31,599 $32,316 $33,284 $33,950 $34,629 $35,321 $36,028 GROSS POTENTIAL INCOME $290,240 $299,136 $299,904 $359,624 $370,080 $380,843 $391,922 $403,326 Physical Vacancy ($3,069) ($4,464) ($2,065) ($16,317) ($16,807) ($17,311) ($17,830) ($18,365) Bad Debt ($2,488) ($3,707) $0 ($1,632) ($1,681) ($1,731) ($1,783) ($1,836) EFFECTIVE GROSS INCOME $284,683 $290,965 $297,840 $341,675 $351,593 $361,801 $372,309 $383,125 Real Estate Taxes $35,097 $35,097 $35,097 $35,097 $35,798 $36,514 $37,245 $37,990 Insurance $4,577 $4,577 $4,577 $13,500 $13,770 $14,045 $14,326 $14,613 Utilities $20,619 $20,619 $20,619 $21,032 $21,452 $21,882 $22,319 $22,766 Contract Services $2,339 $2,339 $2,339 $4,350 $4,437 $4,526 $4,616 $4,709 Repairs & Maintenance $10,221 $10,221 $10,221 $18,000 $18,360 $18,727 $19,102 $19,484 Marketing & Promotion $2,220 $2,220 $2,220 $1,500 $1,530 $1,561 $1,592 $1,624 On-Site Payroll $26,894 $26,894 $26,894 $27,000 $27,540 $28,091 $28,653 $29,226 Payroll Taxes & Benefits $2,945 $2,945 $2,945 $3,000 $3,060 $3,121 $3,184 $3,247 General & Administrative $6,094 $6,094 $6,094 $3,750 $3,825 $3,902 $3,980 $4,059 Management Fee $11,414 $11,414 $11,414 $13,667 $14,064 $14,472 $14,892 $15,325 Replacement & Reserves $9,000 $9,000 $9,000 $9,000 $9,180 $9,364 $9,551 $9,742 TOTAL EXPENSES $131,421 $131,421 $131,421 $149,895 $153,017 $156,204 $159,459 $162,783 NET OPERATING INCOME $174,371 $180,654 $187,528 $212,889 $219,685 $226,706 $233,959 $241,451 INCOME EXPENSE DEER PARK APARTMENTSfinancials
Tax Breakdown Property Address Parcel ID Year Built Acres Market Value Assessed Value Tax Rate Taxes Payable Land Use Code 4332 Oakwood Ave 609-0002-0201-00 1949 0.28 $436,920 $152,920 88.967894 $13,643.97 401 - Apartment, 4-19 Units 4325 Oakwood Ave 609-0004-0073-00 1949 0.41 $687,060 $240,470 88.967894 $21,452.59 401 - Apartment, 4-19 Units Total 0.70 $1,123,980 $393,390 $35,096.56
CASH FLOW
CASH FLOW PROJECTION GROWTH RATE ASSUMPTIONS T12 T6 T3 YR 1 YR 2
Gross Potential Rent 21.43% 3.00% 3.00% 3.00% 3.00% (Loss) / Gain to Lease* 3.52% 3.05% 2.00% 2.00% 2.00% Other Income 3.00% 3.00% 3.00% 3.00% 3.00% EXPENSES Expenses 2.00% 2.00% 2.00% 2.00% Management Fee** 4.00% 4.00% 4.00% 4.00% 4.00% CASH FLOW PROJECTION GROWTH RATE ASSUMPTIONS T12 T6 T3 YR 1 YR 2 Physical Vacancy 1.67% 0.77% 5.00% 5.00% 5.00% Non-Revenue Units 0.00% 0.00% 0.00% 0.00% 0.00% Bad Debt 1.39% 0.00% 0.50% 0.50% 0.50% Concessions Allowance 0.00% 0.00% 0.00% 0.00% 0.00% Total Economic Loss 3.05% 0.77% 5.50% 5.50% 5.50%
INCOME

CINCINNATI

THE ECONOMY

1| Prior to the pandemic, Cincinnati’s real gross metropolitan product grew at an average annual rate of 2.1% from 2015 to 2019. During that same five-year period, job growth averaged 1.4% annually, with roughly 15,500 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 8.4% year-over-year in 2nd quarter. 2| In 2023, the metro’s inflation-adjusted economic output expanded 2.3%. 3| The metro recorded a net gain of 21,100 jobs, expanding the employment base 1.8%. 4| Cincinnati’s unemployment rate in November 2023 was unchanged year-over-year at 3.0%, below the national average of 3.5%. 5| Despite job losses stemming from the pandemic, Cincinnati’s current employment base now sits roughly 63,700 jobs or about 6% above the pre-pandemic level in February 2020.

3,263 units completed in past 12 months 5,184 units currently in progress

HIGHEST OVERALL PERFORMING SUBMARKET

RENT

1| Over the past five years, annual change in effective asking rents in Cincinnati ranged from 2.0% to 11.9%. 2| In 4th quarter 2023, effective asking rents for new leases were up 3.6% year-over- year. That annual rent performance was below the market’s five-year average of 5.7%. 3| Cincinnati’s recent annual rent change performance ranked #10 in the Midwest region and #27 nationally. 4| Looking at product classes in Cincinnati, Class B led for rent performance over the past five years. In 4th quarter 2023, annual effective rent change registered at 2.5% in Class A units, 3.4% in Class B units and 5.8% in Class C units. 5| Among submarkets, the strongest annual rent change performances over the past year were in West Cincinnati and Southeast Cincinnati. 6| The weakest performances were in Central Cincinnati, Butler County and North Central Cincinnati. Over the past five years, rent growth was strongest in Southeast Cincinnati.

LOCAL MARKET
Q4 2023 MARKET SNAPSHOT Pre-1970s 1970s 1980s 1990s 2000+ Occupancy 93.8% 95.4% 96.2% 94.8% 94.7% Y-O-Y Rent Growth 5.2% 3.5% 3.4% 3.0% 3.5% Average Rent Per Unit $1,094 $1,148 $1,283 $1,367 $1,732
SUBMARKETS RENT OCCUPANCY YOY Dent/Harrison $1,147 97.6% 11.0% Roselawn $1,022 92.5% 8.5% Mt Washington $1,155 94.7% 8.3% Mt Healthy $1,123 96.7% 8.1% Middletown/Franklin $969 94.1% 7.3%

SCAN FOR MORE

1| New apartment completions in Cincinnati were moderate recently, as 3,263 units delivered in 2023. That annual completion volume was a 24-year high. 2| With 150 units removed from existing stock over the past year, the local inventory base grew 1.9%. In the past year, supply was greatest in North Central Cincinnati. 3| Annual new supply averaged 1,754 units, and annual inventory growth averaged 1.0% over the past five years. During that period, new supply was concentrated in Central Cincinnati and Campbell/Kenton Counties, which received 42% of the market’s total completions. 4| At the end of 2023, there were 5,184 units under construction with 3,531 of those units scheduled to complete in the next four quarters. Scheduled deliveries in the coming year are expected to be concentrated in Central Cincinnati.

OCCUPANCY

1| Occupancy in the Cincinnati apartment market has ranged from 94.9% to 98.2% over the past five years, averaging 96.4% during that period. 2| Over the past year, occupancy lost 1.2 points, with the 4th quarter 2023 rate landing at 94.9%. 3| Looking at product classes in Cincinnati, 4th quarter 2023 occupancy registered at 94.1% in Class A units, 94.9% in Class B units and 95.6% in Class C units. 4| Occupancy in Class C product was generally tightest over the past five years. 5| Among submarkets, 4th quarter 2023 occupancy was strongest in Southeast Cincinnati and Campbell/Kenton Counties. 6| The weakest readings were seen in Central Cincinnati and North Central Cincinnati. During the coming year, occupancy in Cincinnati is expected to register around 95%.

HIGHEST OVERALL PERFORMING SUBMARKET

LOWEST OVERALL PERFORMING SUBMARKETS

UNITS UNDER CONSTRUCTION

SECTOR UNITS Central Cincinnati 1,747 Northeast Cincinnati/Warren County 811 Boone County/Erlanger 769 Campbell/Kenton Counties 497 Butler County 482 TOTAL FUTURE INVENTORY GROWTH SUBMARKET CHANGE Central Cincinnati 11.9% Boon County/Erlanger 7.0% Northeast Cincinnati/Warren County 4.8% Campbell/Kenton Counties 2.9% Butler County 2.4%
SUBMARKETS RENT OCCUPANCY YOY Dent/Harrison $1,147 97.6% 11.0% Roselawn $1,022 92.5% 8.5% Mt Washington $1,155 94.7% 8.3% Mt Healthy $1,123 96.7% 8.1% Middletown/Franklin $969 94.1% 7.3%
SUBMARKETS RENT OCCUPANCY YOY Fort Mitchell/Crescent Springs $1,162 96.1% 1.0% Fairfield $1,291 94.2% 1.0% Covington/Newport $1,608 93.9% 0.8% Clifton $1,038 90.6% -0.5% Downtown $1,786 94.6% -0.8
SUPPLY

DEER PARK APARTMENTS

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