The Monsarrat

Page 1

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

Senior Vice President National Director National Multi Housing Group

Sidney Bills

Office Administrator

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

Occupancy

310 at Nulu Apartments

2014

1x1

673

$1,275

$0

$1,275

$1.89

51%

800 Tower City Apartments

1963

1x1

780

$1,219

$0

$1,219

$1.56

Lease-up

Vue at 3rd

1962

1x1

612

$1,084

$0

$1,084

$1.77

86%

Crescent Centre

1989

1x1

781

$1,039

$0

$1,039

$1.33

91%

Monsarrat Pro Forma

1854

1x1

765

$989

$0

$989

$1.29

90%

The WG Louisville

1912

1x1

777

$832

$70

$762

$0.98

85%

1x1

765

$703

$55

$648

$0.85

80%

736

$1,020

$63

$1,002

$1.38

81%

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

Occupancy

310 at Nulu Apartments

2014

2x2

978

$1,587

$0

$1,587

$1.62

51%

800 Tower City Apartments

1963

2x1 / 2x2

1115

$1,570

$0

$1,570

$1.41

Lease-up

Monsarrat Pro Forma

1854

2x1 / 2x2

996

$1,215

$0

$1,215

$1.22

90%

The WG Louisville

1912

2x1 / 2x2

966

$1,092

$70

$1,022

$1.06

85%

Crescent Centre

1989

2x2

1026

$1,046

$0

$1,046

$1.02

91%

Monsarrat Average Effective

1824

2x1 / 2x2

996

$620

$65

$555

$0.56

80%

Averages

1926

$1,013

$1,188

$68

$1,166

$1.15

$0.79


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 Occupancy: 65%

UNIT MIX

RENT

SF

RENT/SF

1x1 2x1

$1,219 $1,570

780 1115

$1.56 $1.41

COMPARABLES RENT ANALYSIS $0-$1219

1 Bed LOW

HIGH $0-$1570

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 Occupancy: 86%

UNIT MIX

RENT

SF

RENT/SF

1x1

$1084

612

$1.77

COMPARABLES RENT ANALYSIS $0-$1219

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 Occupancy: 94%

UNIT MIX

RENT

SF

RENT/SF

1x1 2x1 | 2x2

$832 $1092

777 966

$1.07 $1.13

Amenities/Features: Conference Area, Grandiose Lobby, Fitness Center, Laundry

Facility, Eat-In Kitchen, Original Hardwood Floors, High Ceilings, Bright Rooms, Vintage

COMPARABLES RENT ANALYSIS $0-$1219

1 Bed LOW

HIGH $0-$1570

2 Bed 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