Dwell and Renaissance

Page 1

DWELL & RENAISSANCE


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 | FIN ANCI AL BREAKDOWN

03

38 | SU BM ARKE T

04

50 | LOCAL M ARKE T

05

&

16 | LOCAL COMP E TITORS

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

Jordan Dickman

First Vice President Investments Director, NMHG

First Vice President Investments Director, NMHG

Austin Sum

Senior Investment Associate

INVESTMENT ADVISORS

JD Schmerge Investment Associate

Brian Johnston Investment Associate

Tim VanWingerden 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

DWELL & RENAISSANCE Marcus & Millichap is pleased to present Dwell and Renaissance,

LIMITED SUPPLY ASSET:

two properties totaling 100 units and consisting of everything from

The University of Cincinnati has seen an 9.71% increase in student

studios to five-bedroom floorplans, with some renovated and some

enrollment in the last 8 years as enrollment jumped from 42,656 stu-

unrenovated. Built in 1968 and 1925, Dwell and Renaissance total ap-

dents in 2013 to 46,798 students in 2020. This equates to an average

proximately 67,525 square feet on two lots totaling 2.81 acres. These

of increase of 1.21% per year. Enrollment records were set for each

two properties are located north of downtown Cincinnati near the I-74

year between 2013-2020. This constantly growing student population

and I-75 interstate crossing.

has required more housing units. However, since 2015, there have been only 4 new properties and 621 new units added to the market.

A CITY BUILT ON STRONG FUNDAMENTALS: The headquarters for seven Fortune 500 companies are currently

HIGH DEMAND ASSET:

located in Cincinnati. Out of all Fortune 500 companies, 400 of them

As student enrollment at the University of Cincinnati continues to

have a presence in the city as well. Cincinnati has three Fortune Glob-

increase, it will increase demand for student housing and bring more

al 500 companies. With a total of five Fortune Global 500 companies

renters to the area surrounding the university. This increased demand

located in the state of Ohio, three of them call Cincinnati home. Cincin-

for housing will allow assets like Dwell & Renaissance to maintain

nati’s GDP per capita grew at 1.3% higher than the national average of

strong occupancy numbers as well as rent increases.

1.2%. Cincinnati’s future growth over the next 10 years is expected to be 29.8%. UNIT POTENTIAL:

8

ECONOMIC VACANCY RECAPTURE:

Dwell & Renaissance provide an incoming investor with two options

Due to recent renovations and upward trending market rents, Dwell and

to increase value. The first option would be to push rents for both

Renaissance have a high economic vacancy coming from both loss-

renovated and unrenovated units, organically growing the value from

to-lease as well as physical vacancy. This provides and investor with

time of purchase. The second option would be to complete renos on

the opportunity to recapture the economic vacancy, increase rents and

the unrenovated units, allowing for a larger rental increase and great-

greatly increase the overall value of the asset.

er value across both properties as a whole.

ADG MULTIFAMILY


DWELL & RENAISSANCE

D WELL

36,200

REN TABLE S QUARE FEE T

R E NAI S S ANC E

31,220

REN TABLE S QUARE FEE T

*

60

TOTAL UNI T S

40

TOTAL UNI T S

603 AVG S F

783 AVG S F

PROPERTY SUMMARY #1 Bedrooms

28

#2 Bedrooms

32

PROPERTY SUMMARY Studio

6

#1 Bedrooms

8

#2 Bedrooms

11

#3,4,5 Bedrooms

15

* ADG MULTIFAMILY

9


DWELL & RENAISSANCE

RECENT CAPEX

Dwell and Renaissance Rehab Expenses $Completed General Conditions $39,864.22 Site Work and Landscaping $15,172.59 Laundry and Security Installations $25,044.26 Unit Remodels $508,938.99 Windows Entry Doors Rough MEP Through Wall HVAC Units Hardware Finishes Appliances Batghrooms New Kitchens Flooring Fixtures Buildings, Roofs, Interior Hallways, $50,080.57 Exterior Work Project Management Salaries $89,786.82 Property Management Startup, Office $51,786.70 Furniture, Tools, Software Construstion Total

10

ADG MULTIFAMILY

$780,674.15


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11


RENAISSANCE

UNIT FEATURES REMODELED - FLOORING - PAINT - CABINETS - APPLIANCES - LOW FLOW TOILETS - NEW FIXTURES

12

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DWELL

UNIT FEATURES REMODELED - FLOORING - PAINT - CABINETS - APPLIANCES - LOW FLOW TOILETS - NEW FIXTURES - NEW WINDOWS

16

ADG MULTIFAMILY


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18

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S E C T I O N

02

LOCAL C


COMPETITORS


LOCAL COMPETITORS 3 2

RENAISSANCE

* 1 4

REN C OMPAR ABLE S 1

THE CLIFFS

2

AVENTURA APARTMENTS

3

NORTHSIDE FLATS


DWELL 5 6

* DWELL C OMPAR ABLE S 4

THE ADMIRAL

5

CHALFONTE PLAZA

6

GHOLSTON AVENUE APTS


SUBJECT

DWELL APARTMENTS

SUMMARY PROPERTY SUMMARY UNITS YEAR BUILT OCCUPANCY

60 1968 90%

UNIT MIX & RENT SCHEDULE UNIT TYPE 1 Bed/1 Bath 2 Bed/1 Bath

RENT $725 $855

Common Amenities: Pet Friendly Laundry Facilities Available Parking Near Public Transportation

SF 550 650

RENT/SF $1.32 $1.32

Unit Features: LVP Flooring Throughout New Black Appliance Package New Bathrooms (Vanity, Toilet, Tub & Surround) Free Baseboard Heat New Bathrooms


LOCAL COMPE TITORS

GHOLSTON AVE APTS

SUMMARY PROPERTY SUMMARY UNITS YEAR BUILT OCCUPANCY

26 1925 100%

UNIT MIX & RENT SCHEDULE UNIT TYPE 2 Bed/1 Bath

RENT $735

Common Amenities: On-Site Laundry

SF 650

RENT/SF $1.13

Unit Features: Fully equipped Kitchen


LOCAL COMPE TITORS

THE ADMIRAL

SUMMARY PROPERTY SUMMARY UNITS YEAR BUILT OCCUPANCY

38 1900 100%

UNIT MIX & RENT SCHEDULE UNIT TYPE 1 Bed/1 Bath 2 Bed/1 Bath

RENT $775 $1,295

Common Amenities: On-Site Laundry Storage Lockers Available

SF 685 1065

RENT/SF $1.13 $1.22

Unit Features: Spacious Units Hardwood Floors Fully Equipped Kitchens Large Windows


LOCAL COMPE TITORS

CHALFONTE PLAZA

SUMMARY PROPERTY SUMMARY UNITS YEAR BUILT OCCUPANCY

45 N/A 86%

UNIT MIX & RENT SCHEDULE UNIT TYPE 1 Bed/1 Bath 2 Bed/1 Bath

RENT $707 $852

Common Amenities: On-Site Laundry Trash Included

SF 500 950

RENT/SF $1.41 $0.90

Unit Features: Recently Improved Units Laminate Countertops Fully Equipped Kitchens


SUBJECT

RENAISSANCE APARTMENTS

SUMMARY PROPERTY SUMMARY UNITS YEAR BUILT OCCUPANCY

40 1925 83%

UNIT MIX & RENT SCHEDULE UNIT TYPE Studio One Bedroom Two Bedroom Three, Four, and Five Bedroom

RENT $619 $745 $895 $1,063

Common Amenities: Pet Friendly Laundry Facilities Available Parking Near Public Transportation

SF 505 625 795 977

RENT/SF $1.23 $1.19 $1.13 $1.09

Unit Features: 19th Century Apartments Original Hardwood Floors 10 Foot Ceilings Original Claw Foot Tubs Dishwasher Radiant Heat


LOCAL COMPE TITORS

THE CLIFFS

SUMMARY PROPERTY SUMMARY UNITS YEAR BUILT OCCUPANCY

148 1963 90%

UNIT MIX & RENT SCHEDULE UNIT TYPE 1 Bed/1 Bath 2 Bed/1 Bath

RENT $892 $1,015

Common Amenities: Pool, On-Site Laundry Picnic Area Dog Park Fitness Center

SF 580 850

RENT/SF $1.54 $1.19

Unit Features: Fully Equipped Kitchens Large Closets Balcony/Patio


LOCAL COMPE TITORS

AVENTURA APARTMENTS

SUMMARY PROPERTY SUMMARY UNITS YEAR BUILT OCCUPANCY

71 1967 90%

UNIT MIX & RENT SCHEDULE UNIT TYPE 1 Bed/1 Bath 2 Bed/1 Bath

RENT $650 $800

Common Amenities: Basketball Court Laundry Facilities

SF 625 850

RENT/SF $1.04 $0.94

Unit Features: Internet Access


LOCAL COMPE TITORS

NORTHSIDE FLATS

SUMMARY PROPERTY SUMMARY UNITS YEAR BUILT OCCUPANCY

139 1966/2016 99%

UNIT MIX & RENT SCHEDULE UNIT TYPE 1 Bed/1 Bath 2 Bed/1 Bath

RENT $725 $875

Common Amenities: On-Site Laundry On-Site Maintenance Playground Basketball Court Courtyard Picnic area Controlled Access Business Center

SF 600 725

RENT/SF $1.21 $1.21

Unit Features: Recently Renovated Property Walk-In Closets Vinyl Flooring Balcony/Patio


S E C T I O N

03

FINANC


IAL BREAKDOWN


DWELL & RENAISSANCE - 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 Studio One Bedroom Two Bedroom Three, Four, & Five Bedroom

6 Units 36 Units 43 Units 15 Units

505 SF 567 SF 687 SF 963 SF

3,030 SF 20,400 SF 29,545 SF 14,445 SF

$497.92 $650.08 $717.81 $994.45

$0.99 $1.15 $1.04 $1.03

$2,987 $23,403 $30,866 $14,917

$595.00 $695.00 $805.93 $1,024.27

$1.18 SF $1.23 SF $1.17 SF $1.06 SF

$3,570 $25,020 $34,655 $15,364

$619.00 $729.44 $863.14 $1,063.27

$1.23 SF $1.29 SF $1.26 SF $1.10 SF

$3,714 $26,260 $37,115 $15,949

Totals / Wtd. Averages

100 Units

674 SF

67,420 SF

$721.73

$1.07 SF

$72,173

$786.09

$1.17 SF

$78,609

$830.38

$1.23 SF

$83,038

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

6% 15% 43% 36%

Studio

One Bedroom

Two Bedroom

Three, Four, Five Bedroom

Studio Avg. Effective

34

ADG MULTIFAMILY

1 Bed

2 Bed

3,4,5 Bed

Pro Forma Projection


DWELL & RENAISSANCE - 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

STUDIO Studio Non Renovated - Renaissance Studio Renovated - Renaissance

3 Units 3 Units

505 SF 505 SF

1,515 SF 1,515 SF

$473.33 $522.50

$0.94 SF $1.03 SF

$1,420 $1,568

$595.00 $595.00

$1.18 SF $1.18 SF

$1,785 $1,785

$619.00 $619.00

$1.23 SF $1.23 SF

$1,857 $1,857

Totals / Wtd. Averages

6 Units

505 SF

3,030 SF

$497.92

$0.99 SF

$2,987

$595.00

$1.18 SF

$3,570

$619.00

$1.23 SF

$3,714

ONE BEDROOM 1x1 Non Renovated - Renaissance 1x1 Renovated - Renaissance 1x1 Non Renovated - Dwell 1x1 Renovated - Dwell

4 Units 4 Units 10 Units 18 Units

625 SF 625 SF 550 SF 550 SF

2,500 SF 2,500 SF 5,500 SF 9,900 SF

$547.50 $695.00 $591.00 $695.71

$0.88 SF $1.11 SF $1.07 SF $1.26 SF

$2,190 $2,780 $5,910 $12,523

$695.00 $695.00 $695.00 $695.00

$1.11 SF $1.11 SF $1.26 SF $1.26 SF

$2,780 $2,780 $6,950 $12,510

$745.00 $745.00 $725.00 $725.00

$1.19 SF $1.19 SF $1.32 SF $1.32 SF

$2,980 $2,980 $7,250 $13,050

Totals / Wtd. Averages

36 Units

567 SF

20,400 SF

$650.08

$1.15 SF

$23,403

$695.00

$1.23 SF

$25,020

$729.44

$1.29 SF

$26,260

TWO BEDROOM 2x1 Non Renovated - Renaissance 2x1 Renovated - Renaissance 2x2 Non Renovated - Renaissance

6 Units 4 Units 1 Units

795 SF 795 SF 795 SF

4,770 SF 3,180 SF 795 SF

$659.00 $795.00 $845.00

$0.83 SF $1.00 SF $1.06 SF

$3,954 $3,180 $845

$795.00 $795.00 $845.00

$1.00 SF $1.00 SF $1.06 SF

$4,770 $3,180 $845

$885.00 $885.00 $905.00

$1.11 SF $1.11 SF $1.14 SF

$5,310 $3,540 $905

2x1 Non Renovated - Dwell 2x1 Renovated - Dwell

12 Units 20 Units

650 SF 650 SF

7,800 SF 13,000 SF

$617.50 $773.85

$0.95 SF $1.19 SF

$7,410 $15,477

$830.00 $795.00

$1.28 SF $1.22 SF

$9,960 $15,900

$855.00 $855.00

$1.32 SF $1.32 SF

$10,260 $17,100

Totals / Wtd. Averages

43 Units

687 SF

29,545 SF

$717.81

$1.04 SF

$30,866

$805.93

$1.17 SF

$34,655

$863.14

$1.26 SF

$37,115

THREE, FOUR, FIVE BEDROOM 3x1 Non Renovated - Renaissance 3x1 Renovated - Renaissance 4x1 Non Renovated - Renaissance 5x1 Renovated - Renaissance Totals / Wtd. Averages

1 Units 12 Units 1 Units 1 Units 15 Units

950 SF 925 SF 1,195 SF 1,200 SF 963 SF

950 SF 11,100 SF 1,195 SF 1,200 SF 14,445 SF

$825.00 $957.73 $1,200.00 $1,399.00 $994.45

$0.87 SF $1.04 SF $1.00 SF $1.17 SF $1.03 SF

$825 $11,493 $1,200 $1,399 $14,917

$825.00 $995.00 $1,200.00 $1,399.00 $1,024.27

$0.87 SF $1.08 SF $1.00 SF $1.17 SF $1.06 SF

$825 $11,940 $1,200 $1,399 $15,364

$1,025.00 $1,025.00 $1,225.00 $1,399.00 $1,063.27

$1.08 SF $1.11 SF $1.03 SF $1.17 SF $1.10 SF

$1,025 $12,300 $1,225 $1,399 $15,949

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

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35


INCOME EXPENSE

DWELL & RENAISSANCE - FINANCIALS

INCOME & EXPENSES

CURRENT (RENT ROLL/T11 INCOME; ADJUSTED TRAILING EXPENSES) GROSS POTENTIAL RENT All Units at Market Rent Gain (Loss) to Lease GROSS SCHEDULED RENT OTHER INCOME Utility Recovery Late Fees Application Fees Pet Fees Laundry Income Pet Rent Move out charges: NSF Fees Total Other Income GROSS POTENTIAL INCOME Physical Vacancy Bad Debt EFFECTIVE GROSS INCOME NON-CONTROLLABLE Real Estate Taxes 2020 Taxes Paid Adjustment for Sale Total Real Estate Taxes Insurance Utilities Electric Gas Water & Sewage Trash Removal Total Utilities Total Non-Controllable CONTROLLABLE Contract Services Snow Removal Landscaping/Grounds Pest Control Total Contract Services Repairs & Maintenance Marketing & Promotion On-Site Payroll Payroll Taxes & Benefits General & Administrative Management Fee Replacement & Reserves Total Controllable TOTAL EXPENSES NET OPERATING INCOME

$935,400 T3 ($57,479) T3 $877,921

$11,793 $8,396 $3,660 $3,165 $2,829 $1,959 $1,000 $400 $33,202 $911,123 ($226,175) ($21,581) $663,367

% of GPR

6.14%

T3 T3 T3 T3 T3 T3 T3 T3

1.34% 0.96% 0.42% 0.36% 0.32% 0.22% 0.11% 0.05% 3.78%

T3 T3

$25,058 $0 $25,058 $34,200 Note 9

Per Unit 9,354 (575) 8,779

YEAR 1 (RECAPTURE LTL, STABILIZED OCCUPANCY AND OTHER INCOME, NORMALIZED EXPENSES, START RENO) % of GPR Per Unit $996,456 9,965 ($19,929) 2.00% (199) $976,527 9,765

25.76% 2.46% 65.63%

118 84 37 32 28 20 10 4 332 9,111 (2,262) (216) 6,634

$12,147 $8,648 $3,770 $3,260 $2,914 $2,018 $1,030 $412 $34,198 $1,010,725 ($48,826) ($9,765) $952,133

1.24% 0.89% 0.39% 0.33% 0.30% 0.21% 0.11% 0.04% 3.50% 5.00% 1.00% 92.00%

121 86 38 33 29 20 10 4 342 10,107 (488) (98) 9,521

% of EGI 3.78% 0.00% 3.78% 5.16%

Per Unit 251 0 251 342

$25,058 $0 $25,058 $35,000

% of EGI 2.63% 0.00% 2.63% 3.68%

Per Unit 251 0 251 350

$11,667 $61,340 $65,031 $19,683 $169,129 $228,387

T3 T3 T3 T3

1.76% 9.25% 9.80% 2.97% 25.50% 34.43%

117 613 650 197 1,691 2,284

$11,900 $61,340 $65,031 $20,077 $169,984 $230,043

1.25% 6.44% 6.83% 2.11% 17.85% 24.16%

119 613 650 201 1,700 2,300

$3,300 $7,200 $2,760 $13,260 $43,200 $8,700 $78,000 $14,400 $8,700 $29,380 $25,500 $221,140 $449,527 $213,839

Note 9 Note 9 Note 9

0.50% 1.09% 0.42% 2.00% 6.51% 1.31% 11.76% 2.17% 1.31% 4.43% 3.84% 33.34% 67.76% 32.24%

33 72 28 133 432 87 780 144 87 294 255 2,211 4,495 2,138

$3,500 $10,000 $3,500 $17,000 $50,000 $10,000 $90,000 $15,000 $10,000 $38,085 $26,010 $256,095 $486,138 $465,995

0.37% 1.05% 0.37% 1.79% 5.25% 1.05% 9.45% 1.58% 1.05% 4.00% 2.73% 26.90% 51.06% 48.94%

35 100 35 170 500 100 900 150 100 381 260 2,561 4,861 4,660

Note 9 Note 9 Note 9 Note 9 Note 9 Note 9 Note 4


YEAR 2 (...STABILIZED OCCUPANCY, FINISH RENO ON REMAINING UNITS)

$1,026,350 ($20,527) $1,005,823

$12,511 $8,907 $3,883 $3,357 $3,001 $2,079 $1,061 $424 $35,224 $1,041,047 ($50,291) ($10,058) $980,697

% of GPR

2.00%

1.24% 0.89% 0.39% 0.33% 0.30% 0.21% 0.11% 0.04% 3.50%

YEAR 3 (PROJECTED RENT INCREASE AFTER STABILIZATION, RENO)

Per Unit 10,263 (205) 10,058

$1,057,140 ($21,143) $1,035,997

% of GPR

2.00%

1.24% 0.89% 0.39% 0.33% 0.30% 0.21% 0.11% 0.04% 3.50%

Per Unit 10,571 (211) 10,360

5.00% 1.00% 92.00%

125 89 39 34 30 21 11 4 352 10,410 (503) (101) 9,807

$12,886 $9,175 $3,999 $3,458 $3,091 $2,141 $1,093 $437 $36,281 $1,072,278 ($51,800) ($10,360) $1,010,118

5.00% 1.00% 92.00%

129 92 40 35 31 21 11 4 363 10,723 (518) (104) 10,101

$25,058 $0 $25,058 $35,700

% of EGI 2.56% 0.00% 2.56% 3.64%

Per Unit 251 0 251 357

$25,058 $0 $25,058 $36,414

% of EGI 2.56% 0.00% 2.56% 3.71%

Per Unit 251 0 251 364

$12,138 $62,567 $66,332 $20,478 $173,384 $234,142

1.24% 6.38% 6.76% 2.09% 17.68% 23.88%

121 626 663 205 1,734 2,341

$12,381 $63,818 $67,658 $20,888 $176,852 $238,324

1.26% 6.51% 6.90% 2.13% 18.03% 24.30%

124 638 677 209 1,769 2,383

$3,570 $10,200 $3,570 $17,340 $51,000 $10,200 $91,800 $15,300 $10,200 $39,228 $26,530 $261,598 $495,740 $484,957

0.36% 1.04% 0.36% 1.77% 5.20% 1.04% 9.36% 1.56% 1.04% 4.00% 2.71% 26.67% 50.55% 49.45%

36 102 36 173 510 102 918 153 102 392 265 2,616 4,957 4,850

$3,641 $10,404 $3,641 $17,687 $52,020 $10,404 $93,636 $15,606 $10,404 $40,405 $27,061 $267,222 $505,546 $504,572

0.37% 1.06% 0.37% 1.80% 5.30% 1.06% 9.55% 1.59% 1.06% 4.00% 2.76% 27.13% 51.55% 51.45%

36 104 36 177 520 104 936 156 104 392 271 2,660 5,055 5,046

UNDERWRITING NOTES

#

NOTE

1

Rent Roll Date: Feburary 18, 2022

2

T3 Date Range: Novemeber 2021 - January 2022

3

Taxes: information from Hamilton County Auditor

& Reserves: added based 4 Replacement on market norm of $255 per unit per year Potential Rent: assumes a normal 5 Gross growth of 3% starting in year 2 to Lease: assumes a normal growth 6 Loss of 2% starting in year 2 7

Physical Vacancy: set at 5% which is the norm for this market

Debt: set at 2% which is the norm for 8 Bad this property type and market normalized due to only 3 9 Expenses months of financials

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S E C T I O N

38

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04

SUBM


MARKET ADG MULTIFAMILY

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40

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CLIFTON/CUF

CONTINUOUSLY OUT PERFORMING THE MARKET POSITIVE RENTAL MARKET TRENDS Clifton is one of Cincinnati’s top rental markets within the I-275 Interstate. A stable submarket occupancy at 97.2% (Yardi Inc.). A strong sub-market supported with UC student population of nearly 50,000 students, 77% of which live off campus. Also within miles of the portfolio sits 3 of cinicnnati’s largest hospitals also creating a very aggressive rental market. Clifton sits with some of the highest rental rates across Cincinnati due to the aggressive amount of renters in such a small distance that continues to allow Clifton to stay at the top of the ranks in both occupancy and rental rates. An accolade that it has owned for a very long time and will not be giving up any time soon.

OCCUPANCY RATE VS. MARKET

4th Overall 7.5% Growth

42

ADG MULTIFAMILY


ONE BED RENT VS. MARKET

ONE BED RENT VS. MARKET 13TH RANK OUT OF 47 SUBMARKETS 4.75% Y-O-Y CHANGE

TWO BED RENT VS. MARKET

TWO BED RENT VS. MARKET 2ND RANK OUT OF 47 SUBMARKETS 8.8% Y-O-Y CHANGE ADG MULTIFAMILY

43


CLIFTON/CUF

UC ENROLLMENT 24,210 first-year students have applied to UC’s Uptown campus. That’s an increase of more than 1,850 applicants or 8% more than last year (the previous record). This news comes on the heels of UC announcing record enrollment for the eighth straight year in the fall when Bearcats numbered 46,798. Based on current numbers, UC officials expect to eclipse 48,000 in fall 2021. Jack Miner, UC’s vice provost for enrollment management, says UC’s popularity is even more remarkable given the COVID-19 pandemic and state and national trends where the majority of colleges and universities are experiencing significant enrollment declines. “Where others are struggling to maintain enrollment, it looks like we are going to be able to grow pretty significantly,” says

8% INCREASE FROM PREVIOUS YEAR 8TH STRAIGHT YEAR OF RECORD ENROLLMENT 44

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Miner. “We think we’re getting such a great application pool because of our strong academic profile, our phenomenal student life experiences and because people really love the idea of being on UC’s urban campus. We are doing all we can to ensure a healthier, safer and good experience in the fall.”

LOCAL SCHOOL COMPARISON

UNIVERSITY OF CINCINNATI - 39,263

MIAMI UNIVERSITY - 19,716 NORTHERN KENTUCKY UNIVERISTY - 15,664 XAVIER UNIVERSITY - 6,973 MOUNT ST. JOSEPH UNIVERSITY - 2,100


POISED FOR EXPONENTIAL GROWTH DEVELOPMENT PIPELINE 5 UC BUILDINGS 5 MEDICAL BUILDING UPGRADES 7 MIXED USE APARTMENT / STUDENT HOUSING

INVESTMENTS TOWARDS THESE DEVELOPMENTS... $422.5M UNIVERSITY OF CINCINNATI

$422.5M UNIVERSITY OF CINCINNATI $1.04B MEDICAL $1.078B MIXED USE 2.9 BILLION+ TOTAL INVESTMENTS ADG MULTIFAMILY

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CLIFTON/CUF

UC DEVELOPMENT

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NEW COLLEGE OF LAW

NEW UC ALUMNI CENTER

UC plans to convert the current College of Business building into the new home of the College of Law. The revitalization of the building would include larger classrooms and more open meeting spaces. Cost: $45.6M T: Q3, 2022

The University of Cincinnati is looking to find a new home for its alumni center. UC wants to use all or a portion of the existing former YMCA building on Calhoun Street to house a 30,000-square-foot space to house different alumni functions. Cost: $30M T: Proposed

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CLIFTON COURT HALL

CALHOUN HALL

A 180,000-square-foot classroom building is planned where two modular structures currently stand at Clifton Avenue and Clifton Court Drive. It would include 24 classrooms and 230 faculty and staff offices. Cost: $93M T: Q3, 2022

The university plans a two-year, complete renovation of the residence hall. The 14-story high-rise residence hall, built in 1967, would remain a dorm-style housing facility. Cost: $80.4M T: Q4, 2022

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CLIFTON/CUF

INNOVATION CORRIDOR DEVELOPMENTS

THE NODE

A roughly 20-acre, urban, mixed-use development that would include office, research, hotel, retail, apartments and parking. The first phase will start with 130,000 square feet of research/office space, a 160-room class A hotel, 180 multifamily residential units and up to 10,000 square feet of retail and restaurant space. Cost: $500M T: Proposed 48 48

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DREAM CAMPUS A mixed-use development that would combine faith, education, health innovation and technology in the spirit of Dr. Martin Luther King Jr. Cost: $40M T: Proposed


THE LOOP U Square is a LEED certified multi-use mid-rise covering two city blocks between McMillan and Calhoun streets across from the University of Cincinnati’s main campus. Our 161 upscale market rate apartments provide easy access to UC’s campus as well as the unique and lively Clifton area. U Square also features 40,000 square feet of University of Cincinnati office space and over 700 parking spaces in two parking garages on either side of our building. A lawn divides the two blocks of U Square providing some much needed green space in the busy Clifton Heights area. The green will be available for social, musical, cultural, and neighborhood events throughout the year.

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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.

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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.


visit adgmultifamily.com to learn more.