The Van Lake Apartments OM

THE VAN LAKE APARTMENTS 2024 OFFERING MEMORANDUM 120 East Van Lake Drive, Vandalia, Ohio

CONTENTS LEAD AGENTS Alden Simms Associate Cincinnati Office D. 513.878.7759 alden.simms@marcusmillichap.com

Austin Sum Senior Associate Cincinnati Office D. 513.878.7747 austin.sum@marcusmillichap.com

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

Nick Andrews First Vice President Investments Cincinnati Office D. 513.878.7741 nicholas.andrews@marcusmillichap.com

SECTIONS

The Investment

06

Local Competitors

08

Financials

12

“OUR COMMITMENT IS TO HELP O U R C L I E N T S C R E AT E A N D P R E S E R V E W E A LT H B Y PROVIDING THEM WITH THE BEST R E A L E S TAT E INVESTMENT SALES, FINANCING, RESEARCH AND ADVISORY S E R V I C E S AVA I L A B L E .”

3 0 0 W ES T 4T H S T RE E T, CIN CIN N AT I, O H

GLOBAL REACH, LOCAL EXPERTISE

$86.3B VA L U E O F R E C E N T LY C L O S E D T R A N S A C T I O N S

12,272 CLOSED SALES IN MOST RECENT YEAR

DAY TO N

$12.8B

C I N C I N N AT I

T O TA L VA L U E O F R E C E N T L I S T I N G S

2,143

LOUISVILLE

LEXINGTON

CLOSED FINANCINGS IN MOST RECENT YEARS

CALABASAS, CALIFORNIA | HQ

80+ | OFFICES

2,500 | EMPLOYEES

YOUR TEAM

C O R P O R AT E S U P P O R T

J O RDAN DICK M A N F I R S T VIC E PR ES I D E N T S D I RE CT O R, N M HG

L I Z P OP P MI DW E S T OP E R A TI ON S MA NAGER

NIC K ANDREWS F I R S T VIC E PR ES I D E N T S D I RE CT O R, N M HG

J OS H C A R U A N A V I C E P R E S I DE N T R E G I ON A L MA N A G E R I N DI A N A P OL I S | C I N C I N N A TI | L O UISVIL L E | S T L O UIS | K ANS AS CITY

AUS T IN SUM S ENIO R INVESTME N T A SSO CI A T E AUS T IN Hall INVESTM ENT ASSO CI A T E AL D E N SIMM S INVESTM ENT ASSO CI A T E

J OH N SE B R E E S E N I OR V I C E P R E S I DE N T N A T I ON A L DI R E C T OR N A T I ON A L MULTI H OUS I N G GR O UP MI C H A E L G L A S S S E N I OR V I C E P R E S I DE N T MI DW E S T DI V I S I ON MA N A GER N A T I ON A L DI R E C T OR , MA N UFACTUR ED HO M E CO M M UNITIES GR O UP

BROKER SUPPORT S AM PET ROSino VA L UATIO N & R E S E A RCH

B R I TTA N Y C A MP B E L L- KOC H DI R E C TOR OF OP E R A T I ON S

B RETT MART IN INT ER NAL AC CO UN TA N T

A L E X PA PA MA R K E TI N G C OOR DI N A TOR

PROPERTY

SUMMARY Property Address:

120 E Van Lake Dr

City, State, Zip:

Vandalia, Ohio

Submarket:

Vandalia

County:

Montgomery

Year Built/Reno:

1973

Number Of Units:

24

Avg Unit Size:

725

Rentable Sqft:

19,500

Number of Parcels:

3

Lot Size (Acres):

0.93

# of Buildings:

3

# of Stories:

2

Parking Type:

Parking Lot

Parking Surface:

Blacktop

Roof Type/Age:

Pitched Shingle

RECENT CAPEX Recent Capital Improvements : •

LVP Flooring

•

Stainless Steel Appliances

•

Faux Granite Counters

•

New Kitchen Cabinets

•

New Bathrooms

•

New Carpet & Paint

r e l at i v e l o c at i o n

SCAN FOR Q U A R T E R LY D ATA

D AY T O N M A R K E T •

Prior to the pandemic, Dayton’s real gross metropolitan product grew at an average annual rate of 1.4% from 2015 to 2019. During that same five-year period, job growth averaged 1.0% annually, with roughly 3,700 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 10.0% year-over-year in 2nd quarter.

•

the van lake a pa rt m e n t s

In the year-ending 2nd quarter 2023, the metro’s inflation- adjusted economic output expanded 2.8%.

•

At the same time, the metro recorded a net gain of 8,900 jobs, expanding the employment base 2.3%.

•

As such, Dayton’s unemployment rate in May 2023 declined 0.1 point year-over-year to 3.4%, matching the national average of 3.4%.

•

14 min drive (10 mi)

downtown d ay t o n

During the past year, job gains in Dayton were most pronounced in the Education/Health Services sector followed by Leisure/Hospitality Services.

NOTEWORTHY MENTIONS -140 UNDERGRAD PROGRAMS

WRIGHT STATE

-20,000 JOBS -13,000 STUDENTS -80 UNDERGRAD PROGRAMS

UNIVERSITY OF DAYTON

-9,000 STUDENTS -$70M ECONOMIC IMPACT - 28,000 JOBS

WRIGHT PAT AIR FORCE BASE

- $4.3B ECONOMIC IMPACT - LARGEST SINGLE SIT EMPLOYER IN OH

INVESTMENT HIGHLIGHTS Marcus & Millichap is pleased to present the East Van Lake Apartments, a 24-unit apartment complex located in the Vandalia submarket of Dayton. The asset consists of 6 one-bedroom, one-bathroom apartments, 18 two-bedroom, one-bathroom apartments. The asset has recently undergone a strategic renovation to one of the buildings (8 units) and is currently 66% occupied and consists of 19,500 rentable square feet.

Active Investment into the Asset: The current operator has recently executed a strategic renovation plan to 8 units in 1/3 of the buildings. The renovation consisted of new LVP flooring, Stainless steel appliances, Faux granite counters, New Kitchens, and new bathrooms. An incoming investor can continue thus renovation value add business plan to increase the NOI of the property.

Strong Submarket Fundamentals: Vandalia is a strong performing submarket located North of Downtown Dayton. The Median Household Income within a 3-mile radius of the asset is $70,267, this suggests the maximum rent for the submarket to remain affordable is $1,951. Vandalia’s occupancy has remained strong, outperforming Dayton’s average and is hovering around 97%. (Yardi) These statistics strengthen the incoming investor’s ability to push to and achieve pro-forma rents.

Favorable Unit Composition and Layout: With 18 of the units being 2 bedroom-one-bathroom layouts, the rental upside compared to renovation dollars is very attractive. The incoming investor can implement a similar strategic renovation plan and increase the overall NOI of the property.

New Local Demand Diver: In 2023 Joby aviation announced its partnership with the Dayton International Airport to build its first air taxi manufacturing plant. The 500-million-dollar investment will bring up to 2,000 jobs to Dayton’s economy. The Van Lake Apartments are located 10 minutes (4.3 miles) from the Dayton airport, making the asset a prime location for those newly employed by the manufacturing plant.

rent sort ONE bedroom Brown School Apts $875 Virginia Arms Apts $800 Bella Apts $

138 S Brown School Rd $855

Continental Court $825 The Van Lake Apartments $850 Robert Hock Apt $949

210 Kenbrook Drive $

Continental Court Virginia Arms Apartments Market Average

Year Built 1966 1971 1973 1971 1973

# Units 35 112 24 24 24

Avg SF 650 588 700 650 700

Avg Rent $949 $875 $875 $855 $850

Avg Rent/SF $1.46 $1.49 $1.25 $1.32 $1.21

1969 1970 1970

48 14 40

700 600 655

$825 $800 $861.29

$1.18 $1.33 $1.32

SECTION 2 - LOCAL COMPETITORS

One Bedroom Property Robert Hock Apartments Brown School Station Apartments Subject Pro Forma 138 S Brown School Rd Subject Average Effective

rent sort TWO bedroom Brown School Apts $1,005 Virginia Arms Apts $895 Bella Apts $975

The Van Lake Apartments $885 Robert Hock Apt $1,099

210 Kenbrook Drive $950

Year Built 1966 1971 1969 1973 1966 1970 1973 1970

# Units 35 112 18 24 18 14 24 37

Avg SF 725 880 780 800 700 800 800 784

Avg Rent $1,099 $1,005 $975 $975 $950 $895 $885 $969.14

Avg Rent/SF $1.52 $1.14 $1.25 $1.22 $1.36 $1.12 $1.11 $1.24

SECTION 2 - LOCAL COMPETITORS

Two Bedroom Property Robert Hock Apartments Brown School Station Apartments Bella Apartments Subject Pro Forma 210 Kenbrook Virginia Arms Apartments Subject Average Effective Market Average

SECTION 2 - LOCAL COMPETITORS 8 3 0 - 8 3 4 C O N T I N E N TA L CT

c o n t i n e n ta l court UNITS YEAR BUILT OCCUPANCY UNIT MIX One Bedroom

UNITS 48

SQFT 700

48 1969 N/A RENT RENT/SF $825 $1.18

133 IMPERIAL CT

BELLA A PA RT M E N T S UNITS YEAR BUILT OCCUPANCY UNIT MIX Two Bedroom

UNITS 18

SQFT 780

18 1969 96.0% RENT RENT/SF $975 $1.25

SECTION 2 - LOCAL COMPETITORS 135 N DIXIE DRIVE

VIRGINIA ARMS UNITS YEAR BUILT OCCUPANCY UNIT MIX Studio One Bedroom

UNITS 7 7

SQFT 600 800

14 1970 N/A RENT RENT/SF $800 $1.33 $895 $1.12

101-111 S DIXIE DR

ROBERT HOCK A PA R T M E N T S UNITS YEAR BUILT OCCUPANCY UNIT MIX Studio

UNITS 17

SQFT 500

35 1966 94.0% RENT RENT/SF $775 $1.55

One Bedroom

17

650

$949

$1.46

Two Bedroom

1

725

$1,099

$1.52

THE VAN LAKE APARTMENTS

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

MARKET

PROJECTED

UNIT TYPE

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 Totals / Wtd. Averages

6 Units 6 Units

700 SF 700 SF

4,200 SF 4,200 SF

$850.00 $850.00

$1.21 SF $1.21 SF

$5,100 $5,100

$850.00 $850.00

$1.21 SF $1.21 SF

$5,100 $5,100

$875.00 $875.00

$1.25 SF $1.25 SF

$5,250 $5,250

Two Bedroom 2BR/1.5BA Totals / Wtd. Averages

18 Units 18 Units

800 SF 800 SF

14,400 SF 14,400 SF

$885.00 $885.00

$1.11 SF $1.11 SF

$15,930 $15,930

$895.00 $895.00

$1.12 SF $1.12 SF

$16,110 $16,110

$975.00 $975.00

$1.22 SF $1.22 SF

$17,550 $17,550

Summary One Bedroom Two Bedroom Totals / Wtd. Averages

6 Units 18 Units 24 Units

700 SF 800 SF 775 SF

4,200 SF 14,400 SF 18,600 SF

$850.00 $885.00 $876.25

$1.21 $1.11 $1.13 SF

$5,100 $15,930 $21,030

$850.00 $895.00 $883.75

$1.21 SF $1.12 SF $1.14 SF

$5,100 $16,110 $21,210

$875.00 $975.00 $950.00

$1.25 SF $1.22 SF $1.23 SF

$5,250 $17,550 $22,800

RENT/UNIT

RENT/SF

T O TA L R E N T POTENTIAL

RENT/UNIT

RENT/SF

T O TA L R E N T POTENTIAL

SECTION 3 - FINANCIALS

UNIT RENTS

UNIT DISTRIBUTION

INCOME

GROSS POTENTIAL RENT

% of GPR

Per Unit

All Units at Market Rent

$254,520

Gain (Loss) to Lease

($2,160)

GROSS SCHEDULED RENT

$252,360

10,515

GROSS POTENTIAL INCOME

$252,360

10,515

Physical Vacancy

($83,279)

33.00%

(3,470)

$0

0.00%

0

$169,081

66.15%

7,045

% of EGI

Per Unit

Bad Debt EFFECTIVE GROSS INCOME

EXPENSE

THE VAN LAKE APARTMENTS

INCOME & EXPENSES

CURRENT 10,605 0.85%

(90)

NON-CONTROLLABLE Real Estate Taxes 2022 Taxes Paid

$21,570 Auditor

12.76%

899

Insurance

$9,600 Note 2

5.68%

400

Electric

$1,300

0.77%

54

Water & Sewage

$12,350

7.30%

515

Trash Removal

$1,450

0.86%

60

Total Utilities

$15,100

8.93%

629

Total Non-Controllable

$46,270

27.37%

1,928

Controllable Contract Services Snow Removal

$840 Note 2

0.50%

35

Landscaping/Grounds

$2,400 Note 2

1.42%

100

Pest Control

$840 Note 2

0.50%

35

Total Contract Services

$4,080

2.41%

170

Repairs & Maintenance

$13,200 Note 2

7.81%

550

Marketing & Promotion

$1,800 Note 2

1.06%

75

Labor

$21,600 Note 2

12.77%

900

General & Administrative

$2,400 Note 2

1.42%

100

Management Fee

$10,145 Note 2

6.00%

423

Replacement & Reserves

$6,120 Note 1

3.62%

255 2,473

Total Controllable

$59,345

35.10%

TOTAL EXPENSES

$105,615

62.46%

4,401

NET OPERATING INCOME

$63,466

37.54%

2,644

YEAR 1 % of GPR $273,600

YEAR 2 Per Unit

% of GPR

11,400

$281,808

(228)

($5,636)

$268,128

11,172

$268,128

($5,472)

2.00%

YEAR 3 Per Unit

% of GPR

#

Per Unit

11,742

$290,262

(235)

($5,805)

$276,172

11,507

$284,457

11,852

11,172

$276,172

11,507

$284,457

11,852

2.00%

12,094 2.00%

(242)

($13,406)

5.00%

(559)

($13,809)

5.00%

(575)

($14,223)

5.00%

(593)

$0

0.00%

0

$0

0.00%

0

$0

0.00%

0

$254,722

93.00%

10,613

$262,363

93.00%

10,932

$270,234

93.00%

11,260

% of EGI

Per Unit

% of EGI

% of EGI

$21,570

8.47%

899

$21,570

8.22%

899

$21,570

8.22%

899

$9,600

3.77%

400

$9,792

3.73%

408

$9,988

3.81%

416

$1,326

0.52%

55

$1,353

0.52%

56

$1,380

0.53%

57

$12,597

4.95%

525

$12,849

4.90%

535

$13,106

5.00%

546

$1,479

0.58%

62

$1,509

0.57%

63

$1,539

0.59%

64

$15,402

6.05%

642

$15,710

5.99%

655

$16,024

6.11%

668

$46,572

18.28%

1,941

$47,072

17.94%

1,961

$47,582

18.14%

1,983

$840

0.33%

35

$857

0.33%

36

$874

0.33%

36

$2,400

0.94%

100

$2,448

0.93%

102

$2,497

0.95%

104

$840

0.33%

35

$857

0.33%

36

$874

0.33%

36

$4,080

1.60%

170

$4,162

1.59%

173

$4,245

1.62%

177

$13,200

5.18%

550

$13,464

5.13%

561

$13,733

5.23%

572

$1,800

0.71%

75

$1,836

0.70%

77

$1,873

0.71%

78

$21,600

8.48%

900

$22,032

8.40%

918

$22,473

8.57%

936

$2,400

0.94%

100

$2,448

0.93%

102

$2,497

0.95%

104

$15,283

6.00%

637

$15,742

6.00%

656

$16,214

6.00%

656

$6,242

2.45%

260

$6,367

2.43%

265

$6,495

2.48%

271

$64,606

25.36%

2,692

$66,051

25.18%

2,752

$67,529

25.56%

2,794

$111,178

43.65%

4,632

$113,123

43.12%

4,713

$115,111

43.87%

4,796

$143,544

56.35%

5,981

$149,240

56.88%

6,218

$155,123

59.13%

6,463

1

UNDERWRITING NOTES

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

2 Added based on market norms

INCOME EXPENSE

THE VAN LAKE APARTMENTS

CASH FLOW

CURRENT

YR 1

YR 2

YR 3

YR 4

YR 5

YR 6

YR 7

YE DEC-2024

YE DEC-2025

YE DEC-2026

YE DEC-2027

YE DEC-2028

YE DEC-2029

YE DEC-2030

GROSS POTENTIAL RENT All Units at Market Rent Gain (Loss) to Lease GROSS SCHEDULED RENT

$254,520 ($2,160) $252,360

$273,600 ($5,472) $268,128

$281,808 ($5,636) $276,172

$290,262 ($5,805) $284,457

$298,970 ($5,979) $292,991

$307,939 ($6,159) $301,780

$317,177 ($6,344) $310,834

$326,693 ($6,534) $320,159

GROSS POTENTIAL INCOME Physical Vacancy EFFECTIVE GROSS INCOME

$252,360 ($83,279) $169,081

$268,128 ($13,406) $254,722

$276,172 ($13,809) $262,363

$284,457 ($14,223) $270,234

$292,991 ($14,650) $278,341

$301,780 ($15,089) $286,691

$310,834 ($15,542) $295,292

$320,159 ($16,008) $304,151

Real Estate Taxes Insurance Utilities Contract Services Repairs & Maintenance Marketing & Promotion Labor General & Administrative Management Fee Replacement & Reserves TOTAL EXPENSES

$21,570 $9,600 $15,100 $4,080 $13,200 $1,800 $21,600 $2,400 $10,145 $6,120 $105,615

$21,570 $9,600 $15,402 $4,080 $13,200 $1,800 $21,600 $2,400 $15,283 $6,242 $111,178

$21,570 $9,792 $15,710 $4,162 $13,464 $1,836 $22,032 $2,448 $15,742 $6,367 $113,123

$21,570 $9,988 $16,024 $4,245 $13,733 $1,873 $22,473 $2,497 $16,214 $6,495 $115,111

$22,002 $10,188 $16,345 $4,330 $14,008 $1,910 $22,922 $2,547 $16,700 $6,624 $117,576

$22,442 $10,391 $16,672 $4,416 $14,288 $1,948 $23,381 $2,598 $17,201 $6,757 $120,094

$22,891 $10,599 $17,005 $4,505 $14,574 $1,987 $23,848 $2,650 $17,718 $6,892 $122,668

$23,348 $10,811 $17,345 $4,595 $14,865 $2,027 $24,325 $2,703 $18,249 $7,030 $125,299

NET OPERATING INCOME

$63,466

$143,544

$149,240

$155,123

$160,765

$166,597

$172,624

$178,852

Tax Breakdown Property Address

Parcel ID

Year Built

Acres

Market Value

Assessed Value

Taxes Payable

Land Use Code

120 Van Lake Dr 128 Van Lake Dr 138 Van Lake Dr Total

B02-00714-0015 B02-00714-0016 B02-00715-0013

1973 1973 1973

0.30 0.30 0.30 0.91

$282,440 $282,440 $284,010 $848,890

$98,850 $98,850 $99,400 $297,100

$7,177.10 $7,177.10 $7,216.11 $21,570.31

C - APARTMENTS 4-19 RENTAL UNITS C - APARTMENTS 4-19 RENTAL UNITS C - APARTMENTS 4-19 RENTAL UNITS

CASH FLOW PROJECTION GROWTH RATE ASSUMPTIONS YR 1

YR 2

YR 3

YR 4

YR 5

7.50% 2.00% 3.00%

3.00% 2.00% 3.00%

3.00% 2.00% 3.00%

3.00% 2.00% 3.00%

3.00% 2.00% 3.00%

6.00%

2.00% 6.00%

2.00% 6.00%

2.00% 6.00%

2.00% 6.00%

INCOME Gross Potential Rent (Loss) / Gain to Lease* Other Income EXPENSES Expenses Management Fee**

CASH FLOW PROJECTION GROWTH RATE ASSUMPTIONS Physical Vacancy Non-Revenue Units Bad Debt Concessions Allowance Total Economic Loss

YR 1

YR 2

YR 3

YR 4

YR 5

5.00% 0.00% 0.00% 0.00% 5.00%

5.00% 0.00% 0.00% 0.00% 5.00%

5.00% 0.00% 0.00% 0.00% 5.00%

5.00% 0.00% 0.00% 0.00% 5.00%

5.00% 0.00% 0.00% 0.00% 5.00%

R E L AT I V E L O C AT I O N

SCAN FOR Q U A R T E R LY D ATA

D AY T O N M A R K E T •

Prior to the pandemic, Dayton’s real gross metropolitan product grew at an average annual rate of 1.4% from 2015 to 2019. During that same five-year period, job growth averaged 1.0% annually, with roughly 3,700 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 10.0% year-over-year in 2nd quarter.

•

the van lake a pa rt m e n t s

In the year-ending 2nd quarter 2023, the metro’s inflation- adjusted economic output expanded 2.8%.

•

At the same time, the metro recorded a net gain of 8,900 jobs, expanding the employment base 2.3%.

•

As such, Dayton’s unemployment rate in May 2023 declined 0.1 point year-over-year to 3.4%, matching the national average of 3.4%.

•

14 min drive (10 mi)

downtown d ay t o n

During the past year, job gains in Dayton were most pronounced in the Education/Health Services sector followed by Leisure/Hospitality Services.

NOTEWORTHY MENTIONS -140 UNDERGRAD PROGRAMS

WRIGHT STATE

-20,000 JOBS -13,000 STUDENTS -80 UNDERGRAD PROGRAMS

UNIVERSITY OF DAYTON

-9,000 STUDENTS -$70M ECONOMIC IMPACT - 28,000 JOBS

WRIGHT PAT AIR FORCE BASE

- $4.3B ECONOMIC IMPACT - LARGEST SINGLE SIT EMPLOYER IN OH

q u a r t e r ly R E P O R T OCCUPANCY 1| Occupancy in the Dayton apartment market has ranged from 95.4% to 98.0% over the past five years, averaging 96.6% during that period. 2| Over the past year, occupancy lost 1.1 points, with the 3rd quarter 2023 rate landing at 95.5%. 3| Looking at product classes in Dayton, 3rd quarter 2023 occupancy registered at 94.4% in Class A units, 96.1% in Class B units and 95.8% in Class C units. 4| Occupancy in the more affordable Class C product was generally tightest over the past five years. Among submarkets, 3rd quarter 2023 occupancy was strongest in Greene County (96.6%) and Central Dayton/Kettering (95.9%).

SUPPLY 1| New apartment completions in Dayton were modest recently, as 737 units delivered in the year-ending 3rd quarter 2023. Completions over the past year expanded the local inventory base 1.3%. 2| In the past year, supply was greatest in Central Dayton/Kettering, with only North Dayton/Miami County and South Montgomery County receiving any additional supply. Annual new supply averaged 534 units, and annual inventory growth averaged 1.0% over the past five years. 3| During that period, new supply was concentrated in Central Dayton/Kettering and South Montgomery County, which received 66% of the market’s total completions. At the end of 3rd quarter 2023, there were 1,235 units under construction with 931 of those units scheduled to complete in the next four quarters. 4| Scheduled deliveries in the coming year are expected to be concentrated in Central Dayton/Kettering.

Q UA R T E R 3 J U LY

AUGUST

SEPTEMBER

O C TO B E R

N OV E M B E R

DECEMBER

THE VAN LAKE APARTMENTS