THE MONSARRAT
CONFIDENTIALITY & DISCLAIMER The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property, please promptly return this offering memorandum to Marcus & Millichap. This offering memorandum has been prepared to provide summary, unverified financial and physical information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence of absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvements thereon, or financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this offering memorandum has been obtained from sources we believe reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.
PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT ANDREWS | DICKMAN FOR MORE DETAILS.
PRESENTED BY
NICK ANDREWS
First Vice President of Investments Director, National Multi Housing Group 513-878-7741 Nick.Andrews@marcusmillichap.com
JORDAN DICKMAN
First Vice President of Investments Director, National Multi Housing Group 513-878-7735 Jordan.Dickman@marcusmillichap.com
TIM VANWINGERDEN
Associate National Multi Housing Group 513-878-7750 Tim.Vanwingerden@marcusmillichap.com
FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE AT: www.adgmultifamily.com
THE DETAILS
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
INVESTMENT ADVISORS
Austin Sum Investment Associate
JD Schmerge Investment Associate
Garry Schloemer Brian Johnston Tim VanWingerden Investment Associate
Investment Associate
Investment Associate
VALUATION & RESEARCH
DEBT & STRUCTURED FINANCE
Jim Leonard
Derek Maddy
Senior Managing Director of Capital Markets MMCC
Financial & Research Analyst
Chris Litzler Senior Director MMCC
Alec Neesham Associate Director MMCC
OPERATIONS & MARKETING
Brittany Campbell-Koch Director of Operations
Josh Caruana
Vice President Regional Manager Indianapolis | Cincinnati | Louisville St Louis | Kansas City
Kristin Smith
Director of Marketing
John Sebree
Sidney Bills
Office Administrator
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
TABLE OF CONTENTS
01 the ASSET 02 the COMPETITIVE SET 03 the PERSPECTIVE
the ASSET
10 property snapshot
12 the units
14 the building
property snapshot ADDRESS: YEAR BUILT: NUMBER OF UNITS: TOTAL RENTABLE AREA: NUMBER OF BUILDINGS: NUMBER OF STORIES: PARKING:
747 s 5th st | louisville, ky 1854/1983 18 units 16,080 sf 1 3 surface lot
FOUNDATION: FRAMING: EXTERIOR: ROOF: WINDOWS: WIRING:
concrete wood brick replaced in 2020 historic windows (original) copper
HVAC: ELECTRIC SERVICE: WATER HEATING:
electric lg&e & ku electric
ELECTRIC: GAS: WATER: SEWER: TRASH:
tenant paid tenant paid owner paid owner paid owner paid
Each unit has its own unique floor plan, many of which include mezzanine storage.
14-ft ceilings
kitchen
closet space
bathroom
The historical building features large windows and beautiful architecture, rising up from amongst the competition.
entry
hallway
building sign
community laundry
the COMPETITIVE SET
18 rent sort
20 market comparables
THE
title here or write up here
RENT SORT One Bedroom Apartment Rents Sorted by Net Rent Property
Year Built
Unit Type
SF
Market Rent
Utility Adjustment/Month
Net Rent
Net Rent/SF
310 at Nulu Apartments
2014
1x1
673
$1,345
$0
$1,345
$2.00
800 Tower City Apartments
1963
1x1
780
$1,165
$0
$1,165
$1.49
Crescent Centre
1989
1x1
781
$1,115
$0
$1,115
$1.43
Vue at 3rd
1962
1x1
612
$1,099
$0
$1,099
$1.80
Monsarrat Pro Forma
1854
1x1
765
$999
$0
$989
$1.29
The WG Louisville
1912
1x1
777
$900
$70
$830
$1.07
1x1
765
$703
$55
$648
$0.85
736
$1,047
$63
$1,027
$1.42
Monsarrat Average Effective Averages
1949
Two Bedroom Apartment Rents Sorted by Net Rent Property
18
Year Built
Unit Type
SF
Market Rent
Utility Adjustment/Month
Net Rent
Net Rent/SF
310 at Nulu Apartments
2014
2x2
978
$1,795
$0
$1,795
$1.84
800 Tower City Apartments
1963
2x1 / 2x2
1115
$1,785
$0
$1,785
$1.60
Monsarrat Pro Forma
1854
2x1 / 2x2
996
$1,299
$0
$1,215
$1.22
Crescent Centre
1989
2x2
1026
$1,105
$0
$1,105
$1.08
The WG Louisville
1912
2x1 / 2x2
966
$1,150
$70
$1,080
$1.12
Monsarrat Average Effective
1824
2x1 / 2x2
996
$620
$65
$555
$0.56
Averages
1926
$1,013
$1,292
$68
$1,256
$1.23
THE MONSARRAT
VUE AT 3RD
800 TOWER CITY APARTMENTS
THE WG
THE
title here or write up here
COMPARABLES
20
1
800 TOWER CITY APARTMENTS
2
VUE AT 3RD
3
THE WG
800 South 4th Street, Louisville, KY Year Built: 1963/2017 Units: 286
UNIT MIX
RENT
SF
RENT/SF
1x1 2x1
$1,165 $1,785
780 1115
$1.49 $1.60
COMPARABLES RENT ANALYSIS $0-$1165
1 Bed LOW
HIGH $0-$1785
2 Bed
Amenities/Features: Rooftop Park w/ Outdoor Pool, Event Space, Fitness Center, Bicycle Storage,
LOW
HIGH
Kitchen/Bar, On-Site Restaurant, W/D Granite Countertops, Black Appliances, LVP Flooring, Balcony, Walk-In Closet
SUBJECT
COMP
537 South 3rd Street, Louisville, KY Year Built: 1962/2016 Units: 218
UNIT MIX
RENT
SF
RENT/SF
1x1
$1,099
612
$1.80
COMPARABLES RENT ANALYSIS $0-$1165
1 Bed LOW
HIGH SUBJECT
Amenities/Features: Patio/Sundeck, Dog Park, Business Center, Bicycle Storage, Dry
COMP
Cleaning, W/D, Quartz Counters, Stainless Steel Appliances, White Cabinets, LVP Flooring
707 South 3rd Street, Louisville, KY Year Built: 1974 Units: 136
UNIT MIX
RENT
SF
RENT/SF
1x1 2x1 | 2x2
$900 $1,150
777 966
$1.16 $1.19
COMPARABLES RENT ANALYSIS $0-$1165
1 Bed LOW
HIGH $0-$1785
2 Bed
Amenities/Features: Conference Area, Grandiose Lobby, Fitness Center, Laundry
Facility, Eat-In Kitchen, Original Hardwood Floors, High Ceilings, Bright Rooms, Vintage
LOW
HIGH SUBJECT
COMP
21
the PERSPECTIVE
24 executive summary
26 unit mix
28 income & expenses
E XE C UT I VE S U M M A RY
MONSARRAT 747 S 5th Street Louisville, KY 18 TOTAL UNITS 1854/1983 YEAR BUILT 893 SF AVERAGE UNIT SIZE $775 AVERAGE MKT RENT 94% OCCUPANCY $28,754 CURRENT NOI $134,832 PROFORMA NOI
1 BED | 1 BATH
2 BED | 1 BATH
8 Unit 765 SF $744 Rent
10 Units 996 SF $800 Rent
INVESTMENT HIGHLIGHTS Marcus and Millichap is pleased to present The Monsarrat, a historic 18-unit apartment building, located in downtown Louisville. This property provides an investor with a great value-add opportunity in an area with access to top-notch employment.
HISTORIC BUILDING WITH RICH HISTORY Registered under the National Register of Historic Places, The Monsarrat is a modified Neo-Renaissance structure. It was originally designed as a school, but in 1983, it was renovated into luxury apartment homes. With almost 40 years between the last renovations, this provides an opportunity for an investor to take advantage of historic tax credits and upgrade units to compete with the luxury apartments in the marketplace. Its Neo-Renaissance design and vintage-style living gives it a distinct advantage over the competition.
ACCESS TO TOP-NOTCH EMPLOYMENT Louisville, Kentucky is home to three Fortune 500 companies. Comapnies are drawn to the region’s low cost of doing business. Some of the largest employers in the area include Yum! Brnads, Kindred Healthcare, Humana, and Ford. It is also home to UPS Worldpor, the world’s largest package handling facility.
THE
title here or write up here
UNIT MIX
Summary
No. of
Rentable
Total
Avg. Effective Avg. Effective Total Effective
Market
Market
Total Market
Projected
Unit Type
Units
SF
SF
Rent/Unit
Rent/SF
One Bedroom
8 Units
765 SF
6,120 SF
$703.25
Two Bedroom
10 Units
996 SF
9,960 SF
Totals / Wtd. Averages 18 Units
893 SF
16,080 SF
Avg. Projected Total Projected
Rent Potential
Rent/Unit
Rent/SF
Rent Potential
Rent/Unit
Rent/SF
Rent Potential
$0.92
$5,626
$743.75
$0.97 SF
$5,950
$989.00
$1.29 SF
$7,912
$620.20
$0.62
$6,202
$800.00
$0.80 SF
$8,000
$1,215.00
$1.22 SF
$12,150
$657.11
$0.74 SF
$11,828
$775.00
$0.87 SF
$13,950
$1,114.56
$1.25 SF
$20,062
UNIT RENTS
UNIT DISTRIBUTION
$1.40
$1,400 $1.29 SF
$1,200 $1,000 56%
$0.80
$800
26
One Bedroom
Two Bedroom
One Bedroom
$0.62 $620.20
$0
$703.25
$200
$989.00
$600 $400
$1.20 $1.00
$0.92 $1,215.00
44%
$1.22 SF
Two Bedroom
Avg. Effective
Pro Forma Projection
Avg. Effective/SF
Pro Forma Projection/SF
$0.60 $0.40 $0.20 $0.00
One Bedroom
No. of
Rentable
Total
Unit Type
Units
SF
SF
Rent/Unit
Rent/SF
1x1 Small
2 Units
710 SF
1,420 SF
$700.00
1x1 Medium
2 Units
760 SF
1,520 SF
1x1 Large w/o W/D
2 Units
795 SF
Avg. Effective Avg. Effective Total Effective
Market
Market
Total Market
Projected
Avg. Projected Total Projected
Rent Potential
Rent/Unit
Rent/SF
Rent Potential
Rent/Unit
Rent/SF
Rent Potential
$0.99 SF
$1,400
$700.00
$0.99 SF
$1,400
$989.00
$1.39 SF
$1,978
$713.00
$0.94 SF
$1,426
$750.00
$0.99 SF
$1,500
$989.00
$1.30 SF
$1,978
1,590 SF
$675.00
$0.85 SF
$1,350
$675.00
$0.85 SF
$1,350
$989.00
$1.24 SF
$1,978
1x1 Large w/ W/D
2 Units
795 SF
1,590 SF
$725.00
$0.91 SF
$1,450
$850.00
$1.07 SF
$1,700
$989.00
$1.24 SF
$1,978
Totals / Wtd. Averages
8 Units
765 SF
6,120 SF
$703.25
$0.92 SF
$5,626
$743.75
$0.97 SF
$5,950
$989.00
$1.29 SF
$7,912
Two Bedroom
No. of
Rentable
Total
Market
Market
Total Market
Projected
Unit Type
Units
SF
SF
Rent/Unit
Rent/SF
Rent Potential
Rent/Unit
Rent/SF
Rent Potential
Rent/Unit
Rent/SF
Rent Potential
2x1 Small
2 Units
870 SF
1,740 SF
$0.00
$0.00 SF
$0
$750.00
$0.86 SF
$1,500
$1,189.00
$1.37 SF
$2,378
2x1 Medium w/ W/D
2 Units
885 SF
1,770 SF
$775.00
$0.88 SF
$1,550
$900.00
$1.02 SF
$1,800
$1,189.00
$1.34 SF
$2,378
2x1 Large
2 Units
990 SF
1,980 SF
$788.00
$0.80 SF
$1,576
$800.00
$0.81 SF
$1,600
$1,219.00
$1.23 SF
$2,438
2x1.5
2 Units
1,075 SF
2,150 SF
$788.00
$0.73 SF
$1,576
$800.00
$0.74 SF
$1,600
$1,229.00
$1.14 SF
$2,458
2x2
2 Units
1,160 SF
2,320 SF
$750.00
$0.65 SF
$1,500
$750.00
$0.65 SF
$1,500
$1,249.00
$1.08 SF
$2,498
Totals / Wtd. Averages
10 Units
996 SF
9,960 SF
$620.20
$0.62 SF
$6,202
$800.00
$0.80 SF
$8,000
$1,215.00
$1.22 SF
$12,150
Avg. Effective Avg. Effective Total Effective
Avg. Projected Total Projected
27
FINANCIAL BREAKDOWN &
title here or write up here
VALUE ANALYSIS
Current (Rent Roll/T3 Income; Added Expenses)
INCOME GROSS POTENTIAL RENT All Units at Market Rent
% of GPR $167,400
Gain (Loss) to Lease
($7,500)
GROSS SCHEDULED RENT
$159,900
Per Unit 9,300
4.48% RR
(417) 8,883
Other Income
Underwriting Notes & Assumptions #
Note
1 Rent Roll Date: September 2020 2 T3 Date Range: June 2020 - August 2020 3 Concessions Allowance: unit 11 is an office occupied by an employee 4 Taxes: information from Jefferson County Auditor 5 Insurance: added at $1,250 per unit due to historical classification
Utility RUBs
$0
0.00%
0
Parking
$0
0.00%
0
Pet Fees/Rent
$0
0.00%
0
MTM/Short-Term Fees
$0
0.00%
0
Admin/Application Fees
$0
0.00%
0
Other
$0
0.00%
0
$0
0.00%
Total Other Income GROSS POTENTIAL INCOME
$159,900
Physical Vacancy
($36,000)
Bad Debt Concessions Allowance EFFECTIVE GROSS INCOME
7 Added expense based on market norm
Total Real Estate Taxes
$11,366
Insurance
$22,500
10 Electric Vacant: reduces due to drop in vacancy 11 Water & Sewage: increases because of increased occupancy 12 Other Income: same assumptions but now applies to all units as all are now renovated
0
5.63%
(500) 6,383
Real Estate Taxes 2019 Taxes Paid
$11,366
Note 4
% of EGI
Per Unit
9.89%
631
9.89%
631
Note 5
19.58%
1,250
$1,702
Note 6
1.48%
95
$10,135
Note 6
8.82%
563
$360
Note 6
0.31%
20
Utilities Electric Vacant Water & Sewage Trash Removal Total Utilities
$12,197
10.62%
678
Total Non-Controllable
$46,063
40.09%
2,559
Controllable Contract Services Landscaping/Grounds
$900
Note 7
0.78%
50
Pest Control
$450
Note 7
0.39%
25
1.17%
75
Total Contract Services Repairs, Maintenance, & Labor
$1,350 $21,600
Note 7
18.80%
1,200
Marketing & Promotion
$2,250
Note 7
1.96%
125
General & Administrative
$2,250
Note 7
1.96%
125
Management Fee
$8,043
Note 7
7.00%
447
$4,590
Note 8
Replacement & Reserves
28
(2,000)
0.00%
$114,900
Non-Controllable
Other Income Assumptions (Only Applied to Renovated Units): Utility RUBs - $40 for 1BR and $50 for 2BR for water & sewage and $15 for trash, Parking - $20 pe rmonth, Pet Fees/ 9 Rent - $30 pe rmonth for 25% of units, MTM/Short-Term Fees - $75 monthly premium for 10% of units, Admin/Application Fees - $75 per unit for 50% of units, Other Income - $75 for 50% of units
RR, Note 3
22.51%
EXPENSES
Utilities: Electric Vacant - added with assumption of $35 per month for vacant units at 6 28.14% vacancy, Water & Sewage - added with assumption of $55 for 1BR and $65 for 2BR at given vacancy, Trash Removal - added at $20 per unit
8 Replacement & Reserves: added based on market norm of $255 per unit per year
T3
$0 ($9,000)
0 8,883
3.99%
255
Total Controllable
$40,083
34.89%
2,227
TOTAL EXPENSES
$86,146
74.98%
4,786
NET OPERATING INCOME
$28,754
25.02%
1,597
Partial Reno
Full Reno
(50% of Units Renovated, Other Income Added for Renovated Units)
(All Units Renovated, Other Income Added for All Units; Stabilized LTL, Occupancy, and Other Income)
% of GPR $204,072
Per Unit 11,337
($4,081)
2.00%
$199,991
% of GPR $240,744
(227)
($4,815)
11,111
$235,929
Per Unit 13,375
2.00%
(267) 13,107
$6,540
Note 9
3.27%
363
$11,772
Note 12
4.99%
654
$2,160
Note 9
1.08%
120
$4,320
Note 12
1.83%
240
$810
Note 9
0.41%
45
$1,620
Note 12
0.69%
90
$810
Note 9
0.41%
45
$1,620
Note 12
0.69%
90
$338
Note 9
0.17%
19
$675
Note 12
0.29%
38
$338
Note 9
0.17%
19
$675
Note 12
0.29%
38
$10,995
5.50%
$210,986
611
$20,682
11,721
$256,611
8.77%
1,149 14,256
($39,998)
20.00%
(2,222)
($23,593)
10.00%
(1,311)
($2,000)
1.00%
(111)
($2,359)
1.00%
(131)
$0
0.00%
0
$0
0.00%
0
$168,988
9,388
% of EGI
Per Unit
$230,659
12,814
% of EGI
Per Unit 631
$11,366
6.73%
631
$11,366
4.93%
$11,366
6.73%
631
$11,366
4.93%
631
$22,500
13.31%
1,250
$22,950
9.95%
1,275
$1,512
Note 10
0.89%
84
$1,542
0.67%
86
$10,464
Note 11
593
6.19%
581
$10,673
4.63%
$367
0.22%
20
$375
0.16%
21
$12,343
7.30%
686
$12,590
5.46%
699
$46,209
27.34%
2,567
$46,906
20.34%
2,606
$900
0.53%
50
$918
0.40%
51
$450
0.27%
25
$459
0.20%
26
$1,350
0.80%
75
$1,377
0.60%
77
$21,600
12.78%
1,200
$22,032
9.55%
1,224
$2,250
1.33%
125
$2,295
0.99%
128
$2,250
1.33%
125
$2,295
0.99%
128
$11,829
7.00%
657
$16,146
7.00%
897
$4,682
2.77%
260
$4,775
2.07%
265
$43,961
26.01%
2,442
$48,921
21.21%
2,718
$90,170
53.36%
5,009
$95,827
41.54%
5,324
$78,817
46.64%
4,379
$134,832
58.46%
7,491
29
THE MONSARRAT