Union Hill OM

Page 1

UNION HILL offering memorandum

CONTENTS

LEAD AGENTS

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

Austin Sum

Senior Associate

Cincinnati Office

D. 513.878.7747

austin.sum@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.”

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.

01 - THE INVESTMENT 02 - local competitors 03 - FINANCIALS 04 - LOCAL MARKET SECTIONS
CALABASAS, CALIFORNIA | HQ 2,500 | EMPLOYEES 80+ | OFFICES

UNRIVALED SUCCESS IN THE MIDWEST

YOUR TEAM

JORDAN DICKMAN

FIRST VICE PRESIDENTS DIRECTOR, NMHG

NICK ANDREWS

FIRST VICE PRESIDENTS DIRECTOR, NMHG

CORPORATE SUPPORT

LIZ POPP

MIDWEST OPERATIONS MANAGER

JOSH CARUANA

VICE PRESIDENT

REGIONAL MANAGER

INDIANAPOLIS | CINCINNATI | LOUISVILLE | ST LOUIS | KANSAS CITY

AUSTIN SUM

SENIOR INVESTMENT ASSOCIATE

BRIAN JOHNSTON

INVESTMENT ASSOCIATE

AUSTIN Hall

INVESTMENT ASSOCIATE

ALDEN SIMMS

INVESTMENT ASSOCIATE

BROKER SUPPORT

SAM PETROSino

VALUATION & RESEARCH

SKylER WILSON

CLIENT RELATIONS MANAGER

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

BRITTANY CAMPBELL-KOCH

DIRECTOR OF OPERATIONS

ALEX PAPA

MARKETING COORDINATOR

THE INVESTMENT

01

PROPERTY DETAILS

Property Address: 1735 Mars Hill Drive

City, State, Zip: Dayton, Ohio, 45449

County: Montgomery Year Built: 1992

Number Of Units: 100

Avg Unit Size: 977

Rentable Sqft: 97,680

Number of Parcels: 2

Lot Size (Acres): 8.25

# of Buildings: 6

# of Stories: 3

Parkign: Surface Lot

HVAC: Central

Parking Surface: Blacktop

Wiring: Copper

CONSTRUCTION:

Foundation: Concrete

Framing: Wood

Roofs: Pitched Shingle

Exterior of Building: Brick | Aluminum Siding

utilities

Electric: Tenant Paid

Gas: Tenant Paid

Water: Tenant Paid

Sewer: Tenant Paid

Trash: Owner Paid

8
UNION HILL

PHOTOS union

hill

THE OFFERING UNPRICED

INVESTMENT HIGHLIGHTS

Marcus and Millichap is pleased to present Union Hill, a 100 unit apartment complex located in South Dayton. This early 1990’s constructed property is in the West Carrollton submarket and is just a 10 minute drive from downtown Dayton. The property consists of all 2 bedroom floor plans and is accompanied by a complete amenity package.

THE OPPORTUNITY:

Union Hill rents are on average $200 below the market average of the main competitors in the immediate market. The top 3 main competitors 2-Bed market average rent is $1449 while Union Hill average effective rent is $987. We are projecting that a new operator can come in, renovate the 44 unrenovated units, and push rents to $1,125 at a minimum. There is a strong need for upscale units in the market as the West Carrollton submarket offers proximity to The University of Dayton and employers like Wright-Patterson Air Force Base, Kettering Health, and Premier Health - who collectively employ over 50,000 people in Dayton.

STRATEGIC RENOVATION/RECAPTURE UNDERWAY

Current operator has already been steadily renovating units and raising rents. Improvements include LVP floors, new paint, new carpet, and appliances as needed, painted cabinets with new hardware, backsplashes, and refinished countertops. They’ve been successful in raising effective gross income over $10,000 per month over the course of 2022.

MARKET PROVEN BY COMPETITORS

Indian Lookout Apartments successfully raised 2-bedroom rents to $1,449 following similar renovations. It’s neighborhood and amenities are also on par with Union Hill. Dovetree Apartments is another community that executed a similar investment strategy and successfully raised 2-bedroom rents to $1,599. Stonecreek Apartments is another noteworthy competitor - it’s a 205-unit community that traded for $124,000/unit in 2022. A renovation play including LVP floors, backsplashes, new appliances, and new lights allowed for a rent push to $1,400.

100

1992

98,000 $1,097

PRICE UNITS YEAR BUILT RENTABLE SF AVG MARKET RENT OCCUPANCY

97% UNION HILL

UNION HILL OFFERS:

EARLY 1990’S CONSTRUCTION ALL 2 BEDROOM LAYOUTS UNITS $200 BELOW MARKET

56 UNITS ALREADY RENOVATED MARKET PROVEN COMPETITORS

OFFERING HIGHLIGHTS

RENT COMPETITORS

02

rent sort two bedroom

Two Bedroom Property Year Built # 2 BD Units Avg SF Avg Rent Avg Rent/SF Dovetree Apartment 1995 284 945 $1,599 $1.69 Washington Park Apartments 1998 100 1143 $1,522 $1.33 Indian Lookout Luxury Apartments 1989/2001 224 1052 $1,443 $1.37 Normandy Club 1988 130 964 $1,404 $1.46 Stone Creek 1996 132 850 $1,350 $1.59 Subject Pro Forma 1992 100 980 $1,290 $1.32 Autumn Woods Apartments 1979 132 789 $1,099 $1.39 Eagle Ridge Apartments 1985 164 1016 $997 $0.98 Subject Average Effective 1992 100 980 $987 $1.01 Villas at Arboretum 1976 58 1050 $982 $0.94 Miamisburg by the Mall 1972 205 1000 $923 $0.92

RENT COMPETITORS indian lookout

Apartment Interior Amenities

Washer/Dryer Available In One Beds

Washer/Dryer Hookups Available

Fireplaces Available In Two Beds

High Speed Internet Access

Common Area Amenities

Fitness Center

Clubhouse

Tennis Court

Swimming Pool Laundry Facilities

UNITS 320 YEAR BUILT 1989 OCCUPANCY 58.3% UNIT MIX UNITS SQFT RENT RENT/SF One Bedroom 96 758 $1,279 $1.69 Two Bedroom 224 1050 $1,449 $1.38
1651 S Elm St Utilities
Resident
Resident
Resident Pays
Removal Resident Pays Water
Responsibility
Pays Electricity
Pays Sewer
Trash
Units 284 Year Built 1995 Occupancy 97.5% UNIT MIX UNITS SQFT RENT RENT/SF One Bedroom 88 682 $1,225 $1.80 Two Bedroom 196 942 $1,599 $1.70 Apartment Interior Amenities Internet In Unit Washer Dryer Stainless Steel appliances Balcony/patio Common Area Amenities Pet Play area Clubhouse/pool Fitness Center Tennis Court Grill 5480 Dovetree blvd Utilities Responsibility Resident Pays Electricity Resident Pays Sewer Resident Pays Trash Removal Resident Pays Water
RENT COMPETITORS dovetree apartments

RENT

COMPETITORS

eagle ridge

UNITS 205 YEAR BUILT 1986 OCCUPANCY 92.2% UNIT MIX UNITS SQFT RENT RENT/SF One Bedroom 52 570 $774 $1.36 Two Bedroom 153 840 $1,259 $1.50 Apartment Interior Amenities Washer/Dryer Hookups In All Units Vaulted Ceilings High Speed Internet Access Common Area Amenities Fitness Center Clubhouse Swimming Pool Laundry Facilities 2375 Eagle Ridge Dr Utilities Responsibility Resident Pays Electricity Resident Pays Sewer Resident Pays Trash Removal Resident Pays Water

COMPETITORS

Units 132 Year Built 1996 Occupancy N/A UNIT MIX UNITS SQFT RENT RENT/SF Two Bedroom 112 850 $1,350 $1.59 Apartment Interior Amenities Vaulted Ceilings High Speed Internet Access Common Area Amenities Clubhouse Playground Laundry Facilities 2686 Cobble Cir Utilities Responsibility Resident Pays Electricity Property Pays Sewer Property Pays Trash Removal Property Pays Water
RENT
stone creek

FINANCIALS

03

UNIT MIX SUMMARY

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 SUMMARY Two Bedroom | One Bath 40 Units 908 SF 36,320 SF $963.62 $1.06 $38,545 $1,080.63 $1.19 SF $43,225 $1,210.00 $1.33 SF $48,400 Two Bedroom | Two Bath 60 Units 1,028 SF 61,680 SF $1,003.58 $0.98 $60,215 $1,108.33 $1.08 SF $66,500 $1,343.75 $1.31 SF $80,625 Totals / Wtd. Averages 100 Units 980 SF 98,000 SF $987.59 $1.01 SF $98,759 $1,097.25 $1.12 SF $109,725 $1,290.25 $1.32 SF $129,025
UNION HILL FINANCIALS
NEW LEASES PRICE/SQFT APR 22 - FEB 23 APR 22 - FEB 23
LEASING TRENDS

UNION HILL FINANCIALS

UNIT MIX BREAKDOWN

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 Two Bedroom | One Bath 2x1 Deluxe Top Level 11 Units 908 SF 9,988 SF $1,003.50 $1.11 SF $11,039 $1,200.00 $1.32 SF $13,200 $1,225.00 $1.35 SF $13,475 2x1 Deluxe Level 1 or 2 15 Units 908 SF 13,620 SF $953.33 $1.05 SF $14,300 $1,050.00 $1.16 SF $15,750 $1,200.00 $1.32 SF $18,000 2x1 Standard Top Level 5 Units 908 SF 4,540 SF $981.25 $1.08 SF $4,906 $1,100.00 $1.21 SF $5,500 $1,225.00 $1.35 SF $6,125 2x1 Standard Level 1 or 2 9 Units 908 SF 8,172 SF $922.22 $1.02 SF $8,300 $975.00 $1.07 SF $8,775 $1,200.00 $1.32 SF $10,800 Totals / Wtd. Averages 40 Units 908 SF 36,320 SF $963.62 $1.06 SF $38,545 $1,080.63 $1.19 SF $43,225 $1,210.00 $1.33 SF $48,400 Two Bedroom | Two Bath 2x2 Deluxe Top Level 14 Units 1,028 SF 14,392 SF $1,066.07 $1.04 SF $14,925 $1,200.00 $1.17 SF $16,800 $1,300.00 $1.26 SF $18,200 2x2 Deluxe Level 1 or 2 15 Units 1,028 SF 15,420 SF $1,019.64 $0.99 SF $15,295 $1,100.00 $1.07 SF $16,500 $1,375.00 $1.34 SF $20,625 2x2 Standard Top Level 10 Units 1,028 SF 10,280 SF $1,000.00 $0.97 SF $10,000 $1,100.00 $1.07 SF $11,000 $1,300.00 $1.26 SF $13,000 2x2 Standard Level 1 or 2 20 Units 1,028 SF 20,560 SF $939.75 $0.91 SF $18,795 $1,050.00 $1.02 SF $21,000 $1,375.00 $1.34 SF $27,500
UNIT DISTRIBUTION UNIT RENTS $1,290 980 $1.32 97% $1,244 944 $1.32 94% PRO FORMA COMPETITORS UNION HILL VS COMPETITORS AVG RENT AVG SQFT RENT/SQFT OCCUPANCY UNION HILL

- LVP Flooring

- New Paint

- Appliances AS NEEDED

- New Carpet

- Tub Surround AS NEEDED

renovations underway

Ownership has already implemented a strategic renovation program across the property. Unit upgrades range from $4,000 to $4,500 a unit depending on the condition when turned. Strategic upgrades being implemented are listed to the left.

- New Door Handles

- New Doorway Numbers

- newly renovated clubhouse

UNION
HILL

IN-PLACE RENT BY RENOVATION STATUS

RENOVATION STATUS UNIT BREAKDOWN

renovation premium renovation status
CURRENT RENT
OF MARCH 14, 2023 INCOME & EXPENSES: MARCH 2022 - FEBRUARY 2023 YEAR 1 GROSS POTENTIAL RENT % of GPR Per Unit % of GPR Per Unit All Units at Market Rent $1,316,700 RR 13,167 $1,548,300 15,483 Gain (Loss) to Lease ($126,840) 9.63% (1,268) ($92,898) 6.00% (929) GROSS SCHEDULED RENT $1,189,860 RR 11,899 $1,455,402 14,554 Other Income Spectrum Video & Internet Fee $90,593 T12 7.09% 906 $93,310 6.41% 933 Water/Sewer Fees $39,833 T12 3.12% 398 $41,028 2.82% 410 Washer/Dryer Hookup Fee $19,344 T12 1.51% 193 $19,924 1.37% 199 Tenant Move Out Charges $11,955 T12 0.94% 120 $12,314 0.85% 123 Early Lease Termination Fees $10,070 T12 0.79% 101 $10,372 0.71% 104 Trash and common area utilities $5,326 T12 0.42% 53 $5,486 0.38% 55 AppFolio Insurance Services $5,150 T12 0.40% 51 $5,304 0.36% 53 Late Fee $4,020 T12 0.31% 40 $4,141 0.28% 41 Total Other Income $207,619 17.45% 2,076 $213,847 14.69% 2,138 GROSS POTENTIAL INCOME $1,397,479 13,975 $1,669,249 16,692 Physical Vacancy ($59,493) T3 Economic 5.00% (595) ($72,770) 5.00% (728) Bad Debt $0 0.00% 0 ($7,277) 0.50% (73) Concessions Allowance $0 0.00% 0 ($7,277) 0.50% (73) EFFECTIVE GROSS INCOME $1,337,986 85.37% 13,380 $1,581,925 88.00% 15,819 NON-CONTROLLABLE Real Estate Taxes % of EGI Per Unit % of EGI 2020 Taxes Paid $246,393 Auditor 18.42% 2,464 $246,393 15.58% 2,464 Total Real Estate Taxes $246,393 18.42% 2,464 $246,393 15.58% 2,464 Insurance $21,566 T12 1.61% 216 $40,000 2.53% 400 Utilities Electric $15,352 T12 1.15% 154 $15,659 0.99% 157 Electric Vacant $2,395 T12 0.18% 24 $2,443 0.15% 24 Gas $3,028 T12 0.23% 30 $3,089 0.20% 31 Gas Vacant $4,846 T12 0.36% 48 $4,943 0.31% 49 Water & Sewage $48,862 T12 3.65% 489 $49,839 3.15% 498 Trash Removal $18,870 T12 1.41% 189 $19,247 1.22% 192 Total Utilities $93,353 6.98% 934 $95,220 6.02% 952 Total Non-Controllable $361,312 27.00% 3,613 $381,613 24.12% 3,816 CONTROLLABLE Contract Services Pool Expense $3,284 T12 0.25% 33 $3,500 0.22% 35 Snow Removal $5,463 T12 0.41% 55 $5,000 0.32% 50 Landscaping/Grounds $14,030 T12 1.05% 140 $15,000 0.95% 150 Pest Control $2,709 T12 0.20% 27 $3,000 0.19% 30 Total Contract Services $25,486 1.90% 255 $26,500 1.68% 265 Repairs & Maintenance $26,103 T12 1.95% 261 $60,000 3.79% 600 Marketing & Promotion $19,245 T12 1.44% 192 $10,000 0.63% 100 On-Site Payroll $122,827 Note 2 9.18% 1,228 $100,000 6.32% 1,000 Payroll Taxes & Benefits $0 0.00% 0 $15,000 0.95% 150 General & Administrative $19,245 T12 1.44% 192 $15,000 0.95% 150 Management Fee $5,324 T12 0.40% 53 $63,277 4.00% 633 Cable $74,357 T12 Note 3 5.56% 744 $74,500 4.71% 745 Replacement & Reserves $25,500 Note 4 1.91% 255 $26,010 1.64% 260 Total Controllable $318,087 23.77% 3,181 $390,287 24.67% 3,903 TOTAL EXPENSES $679,399 50.78% 6,794 $771,900 48.79% 7,719 NET OPERATING INCOME $658,586 49.22% 6,586 $810,025 51.21% 8,100 EXPENSE INCOME INCOME
UNION HILLFINANCIALS
ROLL: AS
& EXPENSES

# NOTE

UNDERWRITING NOTES

1 Economic T12 Vacancy - 2022 numbers taken against the old RR

2 Includes Contracted Repairs and Maintenance Labor

3 Long Term Cable Contract in Place

4 Replacement Reserve added based on Market Norm

GROSS POTENTIAL RENT

OPERATING EXPENSES

YEAR 2 YEAR 3 % of GPR Per Unit % of GPR Per Unit $1,594,749 15,947 $1,642,591 16,426 ($31,895) 2.00% (319) ($32,852) 2.00% (329) $1,562,854 15,629 $1,609,740 16,097 $96,110 6.15% 961 $98,993 6.15% 990 $42,259 2.70% 423 $43,527 2.70% 435 $20,522 1.31% 205 $21,138 1.31% 211 $12,683 0.81% 127 $13,064 0.81% 131 $10,683 0.68% 107 $11,004 0.68% 110 $5,650 0.36% 57 $5,820 0.36% 58 $5,463 0.35% 55 $5,627 0.35% 56 $4,265 0.27% 43 $4,393 0.27% 44 $220,219 14.09% 2,202 $226,783 14.09% 2,268 $1,783,073 17,831 $1,836,522 18,365 ($78,143) 5.00% (781) ($80,487) 5.00% (805) ($7,814) 0.50% (78) ($32,195) 2.00% (322) ($7,814) 0.50% (78) $0 0.00% 0 $1,689,302 92.00% 16,893 $1,723,841 91.00% 17,238 % of EGI Per Unit % of EGI Per Unit $246,393 14.59% 2,464 $246,393 14.59% 2,464 $246,393 14.59% 2,464 $246,393 14.59% 2,464 $40,800 2.42% 408 $41,616 2.46% 416 $15,972 0.95% 160 $16,291 0.96% 163 $2,492 0.15% 25 $2,542 0.15% 25 $3,151 0.19% 32 $3,214 0.19% 32 $5,042 0.30% 50 $5,143 0.30% 51 $50,836 3.01% 508 $51,853 3.07% 519 $19,632 1.16% 196 $20,025 1.19% 200 $97,124 5.75% 971 $99,067 5.86% 991 $384,317 22.75% 3,843 $387,076 22.91% 3,871 $3,570 0.21% 36 $3,641 0.22% 36 $5,100 0.30% 51 $5,202 0.31% 52 $15,300 0.91% 153 $15,606 0.92% 156 $3,060 0.18% 31 $3,121 0.18% 31 $27,030 1.60% 270 $27,571 1.63% 276 $61,200 3.62% 612 $62,424 3.70% 624 $10,200 0.60% 102 $10,404 0.62% 104 $102,000 6.04% 1,020 $104,040 6.16% 1,040 $15,300 0.91% 153 $15,606 0.92% 156 $15,300 0.91% 153 $15,606 0.92% 156 $67,572 4.00% 676 $68,954 4.00% 676 $75,990 4.50% 760 $77,510 4.59% 775 $26,530 1.57% 265 $27,061 1.60% 271 $401,122 23.74% 4,011 $409,175 24.14% 4,078 $785,440 46.49% 7,854 $796,251 47.13% 7,963 $903,863 53.51% 9,039 $927,590 54.91% 9,276
CURRENT YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 YE FEB-2024 YE JAN-2025 YE JAN-2026 YE JAN-2027 YE JAN-2028 YE JAN-2029 YE JAN-2030 YE JAN-2031 YE JAN-2032 YE JAN-2033 GROSS POTENTIAL RENT All Units at Market Rent $1,316,700 $1,548,300 $1,594,749 $1,642,591 $1,691,869 $1,742,625 $1,794,904 $1,848,751 $1,904,214 $1,961,340 $2,020,180 Gain (Loss) to Lease ($126,840) ($92,898) ($31,895) ($32,852) ($33,837) ($34,853) ($35,898) ($36,975) ($38,084) ($39,227) ($40,404) GROSS SCHEDULED RENT $1,189,860 $1,455,402 $1,562,854 $1,609,740 $1,658,032 $1,707,773 $1,759,006 $1,811,776 $1,866,129 $1,922,113 $1,979,777 Total Other Income $207,619 $213,847 $209,903 $216,157 $220,481 $224,890 $229,388 $233,976 $238,655 $243,428 $248,297 GROSS POTENTIAL INCOME $1,397,479 $1,669,249 $1,772,758 $1,836,522 $1,878,512 $1,932,663 $1,988,394 $2,045,752 $2,104,785 $2,165,542 $2,228,074 Physical Vacancy ($59,493) ($72,770) ($78,143) ($80,487) ($82,902) ($85,389) ($87,950) ($90,589) ($93,306) ($96,106) ($98,989) Bad Debt $0 ($7,277) ($7,814) ($32,195) ($33,161) ($34,155) ($35,180) ($36,236) ($37,323) ($38,442) ($39,596) Concessions Allowance $0 ($7,277) ($7,814) $0 $0 $0 $0 $0 $0 $0 $0 EFFECTIVE GROSS INCOME $1,337,986 $1,581,925 $1,678,986 $1,723,841 $1,762,450 $1,813,119 $1,865,264 $1,918,928 $1,974,156 $2,030,994 $2,089,489 Real Estate Taxes $246,393 $246,393 $246,393 $246,393 $251,321 $256,347 $261,474 $266,704 $272,038 $277,479 $283,028 Insurance $21,566 $40,000 $40,800 $41,616 $42,448 $43,297 $44,163 $45,046 $45,947 $46,866 $47,804 Utilities $93,353 $95,220 $97,124 $99,067 $101,048 $103,069 $105,130 $107,233 $109,378 $111,565 $113,797 Contract Services $25,486 $26,500 $27,030 $27,571 $28,122 $28,684 $29,258 $29,843 $30,440 $31,049 $31,670 Repairs & Maintenance $26,103 $60,000 $61,200 $62,424 $63,672 $64,946 $66,245 $67,570 $68,921 $70,300 $71,706 Marketing & Promotion $19,245 $10,000 $10,200 $10,404 $10,612 $10,824 $11,041 $11,262 $11,487 $11,717 $11,951 On-Site Payroll $122,827 $100,000 $102,000 $104,040 $106,121 $108,243 $110,408 $112,616 $114,869 $117,166 $119,509 Payroll Taxes & Benefits $0 $15,000 $15,300 $15,606 $15,918 $16,236 $16,561 $16,892 $17,230 $17,575 $17,926 General & Administrative $19,245 $15,000 $15,300 $15,606 $15,918 $16,236 $16,561 $16,892 $17,230 $17,575 $17,926 Management Fee $5,324 $63,277 $67,572 $68,954 $70,498 $72,525 $74,611 $76,757 $78,966 $81,240 $83,580 Cable $74,357 $74,500 $75,990 $77,510 $79,060 $80,641 $82,254 $83,899 $85,577 $87,289 $89,034 Replacement & Reserves $25,500 $26,010 $26,530 $27,061 $27,602 $28,154 $28,717 $29,291 $29,877 $30,475 $31,084 TOTAL EXPENSES $679,399 $771,900 $785,440 $796,251 $812,341 $829,205 $846,424 $864,007 $881,961 $900,294 $919,015 NET OPERATING INCOME $658,586 $810,025 $893,547 $927,590 $950,109 $983,914 $1,018,840 $1,054,921 $1,092,195 $1,130,700 $1,170,474 INCOME EXPENSE
FINANCIALS
UNION HILL -
CASH FLOW
CASH FLOW PROJECTION GROWTH RATE ASSUMPTIONS YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 Income Gross Potential Rent 17.59% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% (Loss) / Gain to Lease* 6.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Other Income 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Expenses Expenses 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Management Fee** 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% CASH FLOW PROJECTION GROWTH RATE ASSUMPTIONS YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 Physical Vacancy 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Non-Revenue Units 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Bad Debt 0.50% 0.50% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Concessions Allowance 0.50% 0.50% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Economic Loss 6.00% 6.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% Tax Breakdown Property Address Parcel ID Year Built Acres Market Value Assessed Value Tax Rate Taxes Payable Land Use Code 1735 Mars Hill Dr K48 01016 001 $579,200 $202,720 $19,952.00 1735 Mars Hill Dr K48 01016 002 $6,570,800 $2,299,780 $226,441.27 Total $7,150,000 $2,502,500 $246,393.27

LOCAL MARKET

04

DAYTON, oHIO

Since the arrival of the first settlers on April 1, 1796, Dayton has always been a place for pioneering vision and change. They have hosted many firsts as the patent capital of the U.S. and provided the world with a staggering number of life-changing innovations and technological advancements. Today they’re still setting trends and promoting growth. In the research labs of Wright-Patterson Air Force Base, the University of Dayton, Wright State University, and many of the top businesses, the innovative spirit of Dayton continues to produce cutting-edge technology and dynamic solutions

to today’s biggest issues.

With the crossroads of Interstate 70 and 75, the railroad capacity, and the international airport, Dayton provides one of the most accessible cities in the nation. In fact, Dayton’s location puts it within one day’s drive of 60% of the U.S. population. The superior transportation makes us among the most competitive mid-sized cities for logistics.

ECONOMIC OVERVIEW

Prior to the pandemic, Dayton’s real gross metropolitan product grew at an average annual rate of 1.6% from 2015 to 2019. During that same five-year period, job growth av eraged 1.0% annually, with roughly 3,900 jobs added on av erage each year. In 2020, COVID-19 mitigation measures and limited business activity caused the local economy to contract as much as 9.6% year-over-year in 2nd quarter. In 2022, the metros inflation-adjusted economic output con tracted 0.8%. At the same time, the metro recorded a net gain of 2,900 jobs, expanding the employment base 0.8%.

As such, Dayton’s unemployment rate in November 2022 declined 0.4 points year-over-year to 3.2%, below the na tional average of 3.4%. During the past year, job gains in Dayton were most pronounced in the Leisure/Hospitality Services sector followed by Government and Profession al/Business Services. Due to job losses stemming from the pandemic, Dayton’s current employment base now sits roughly 5,100 jobs or about 1% below the pre-pandemic level in February 2020.

Population: 743,000

Median age: 33.5

the rent

In 4th quarter 2022, same-store effective asking rents for new leases were up 8.4% year-over-year. That annual rent performance was well above the market’s five-year average of 4.8% and a new high for the market. s. In 4th quarter 2022, annual effective rent change was fairly even across the board, registering at 8.3% in Class A units, 8.2% in Class B units and 8.7% in Class C units. Among submarkets, the strongest annual rent change performances over the past year were in Northwest Dayton, North Dayton/Miami County and Greene County. The weakest performance was in South Montgomery County. In the coming year, same-store effective asking rent change in Dayton is expected to slow from the current level. As of 4th quarter 2022, effective asking rental rates in Dayton averaged $1,077 per month, or $1.182 per square foot.

DEMOGRAPHICS: STATISTICS

Msa median hhi: $54,457

1 - Year growth: 5.89%

Msa median home value: $69,400

1 - Year growth: 3.89%

Average occupancy: 96.2%

Rent growth: 8.4%

New apartment completions in Dayton were modest recently, as 412 units delivered in 2022. Completions over the past year expanded the local inventory base 0.7%. In the past year, supply was greatest in Central Dayton/Kettering and Greene County.

At the end of 2022, there were 886 units under construction with 661 of those units scheduled to complete in the next four quarters. Scheduled deliveries in the coming year are expected to be limited to Central Dayton/Kettering and North Dayton/Miami County.

SUPPLY OCCUPANCY

- Over the past year, occupancy lost 1.8 points, with the 4th quarter 2022 rate landing at 96.2%.

- Looking at product classes in Dayton, 4th quarter 2022 occupancy registered at 95.3%. In Class A units, 96.5% in Class B units and 96.7% in Class C units.

- Among submarkets, 4th quarter 2022 occupancy was strongest in Greene County and Central Dayton/Kettering.

- The weakest reading was in Northwest Dayton.

WRIGHT PATTERSON

Located in Dayton, Wright-Patterson Air Force Base (WPAFB) is one of the most diverse, largest, and organizationally complex bases in the Air Force. Not only is WPAFB the largest single-site employer in the entire state of Ohio, but it is also a center of innovation for the Air Force. It was selected as the “preferred location” for the F-35 Lightning II Hybrid Product Support Intergrator organization, which supports the entire F-35 enterprise. This would bring a minimum of 400 new jobs to the base. The potential impact to the region cannot only be measured in jobs alone, neighboring communities would benefit through the result of more growth for contractors and businesses. Wright-Patterson Air Force Base employs 27,500 military, civilian, and contract employees and has an annual economic impact of $4.3 billion.

“Wright Patterson AFB is the crown jewel of the state of Ohio, and our department will continue to do everything we can to accelerate the growth of the WPAFB and attract more jobs to the region.”

carillon historical park

Carillon Historical Park showcases Dayton’s rich heritage of creativity, invention, and milestones in innovation that changed the nation and the world!

The park houses the John W. Berry, Sr. Wright Brothers National Museum featuring the original 1905 Wright Flyer III, an impressive collection of NCR cash registers, the Carousel of Dayton Innovation, Gem City Letterpress and so much more.

america’s packard museum

The museum is housed in the original Packard dealership building built for Dayton in 1917. Approximately 50 Packard automobiles dating 1903-58 are displayed. Other exhibits include Packard marine and aircraft engines, items from the Detroit Packard factory.

higher education university of dayton

Founded in 1850, the University of dayton (UD) spans a massive 373-acres with state-of-the-art facilities in the downtown area. It boasts 38 academic, athletic, administrative, and research buildings, five resident halls, 18 student apartment complexes, and 473 houses (347 being owned by UD). In 2019, there were a total of 8,483 undergrad students enrolled. 85% of students live on-campus or in student neighborhoods. UD offers more than 80 undergraduate programs and 50 graduate and doctoral programs. UD has 17 Division I sports temas, 37 club sports, and 12 intramural sports. Since 2001, the NCAA tournament has had an impact of more than $70 million on dayton’s economy and UD Arena has hosted more Division I Basketball Championship gams than any other venue in the US.

wright state university

Located in the Dayton area, Wright State University is a national public research university. WSU offers 140 undergraduate programs and 136 graduate programs. Wright State has 20 percent more affordable in-state tuition than the national average. WSU adds $1.5 billion into the region’s economy annually and supports more than 20,000 jobs through its spending on operations and research and throuigh spending of students, alumni, and visitors. With a student body population of more than 13,000, there is only a 3,000 on-campus student housing capacity. WSU’s Nutter Center is southwest Ohio’s premier sports and entertainment facility. With a capacity of 11,200, it has also been recognized nationally as a top venue of its size.

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