VERNON COURT
2024 OFFERING MEMORANDUM 1506 North Bend Rd, Cincinnati, Ohio
CONTENTS LEAD AGENTS Austin Sum Senior Associate Cincinnati Office D. 513.878.7747 austin.sum@marcusmillichap.com Nick Andrews First Vice President Investments Cincinnati Office D. 513.878.7741 nicholas.andrews@marcusmillichap.com Jordan Dickman First Vice President Investments Cincinnati Office D. 513.878.7735 jordan.dickman@marcusmillichap.com The Asset Local Competitors Financials 6 12 16 SECTIONS
“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.” 300 WEST 4TH STREET, CINCINNATI, OH
GLOBAL REACH, LOCAL EXPERTISE
$86.3B
VALUE OF RECENTLY CLOSED TRANSACTIONS
12,272
CLOSED SALES IN MOST RECENT YEAR
$12.8B
TOTAL VALUE OF RECENT LISTINGS
2,143
CLOSED FINANCINGS IN MOST RECENT YEARS
CALABASAS, CALIFORNIA | HQ 2,500 | EMPLOYEES 80+ | OFFICES
CINCINNATI
DAYTON
LEXINGTON LOUISVILLE
YOUR TEAM
JORDAN DICKMAN
FIRST VICE PRESIDENTS DIRECTOR, NMHG
NICK ANDREWS
FIRST VICE PRESIDENTS DIRECTOR, NMHG
AUSTIN SUM
SENIOR INVESTMENT ASSOCIATE
AUSTIN Hall
INVESTMENT ASSOCIATE
ALDEN SIMMS
INVESTMENT ASSOCIATE
CORPORATE SUPPORT
LIZ POPP
MIDWEST OPERATIONS MANAGER
JOSH CARUANA
VICE PRESIDENT
REGIONAL MANAGER
INDIANAPOLIS | CINCINNATI | LOUISVILLE | ST LOUIS | KANSAS CITY
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
BROKER SUPPORT
SAM PETROSino
VALUATION & RESEARCH
BRETT MARTIN
INTERNAL ACCOUNTANT
BRITTANY CAMPBELL-KOCH DIRECTOR OF OPERATIONS ALEX PAPAMARKETING
COORDINATOR
VERNON COURT
UNIT MIX SUMMARY
• Average Economic Vacancy 6.18% since September 2022 • Loss-to-lease recovery opportunity, 80% of leases are currently month-to-month. • $20,508 yearly income of loss-to-lease able to recapture
Taxes recently reassessed in 2023
SUMMARY YEAR BUILT 1971 # OF UNITS 45 AVG UNIT SIZE 720 # OF 1 BEDROOMS 39 # OF 2 BEDROOMS 6
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 One Bedroom 39 Units 700 SF 27,300 SF $734.29 $1.05 $28,637 $778.21 $1.11 SF $30,350 $865.00 $1.24 SF $33,735 Two Bedroom 6 Units 850 SF 5,100 SF $935.84 $1.10 $5,615 $1,007.50 $1.19 SF $6,045 $1,080.00 $1.27 SF $6,480 Totals / Wtd. Averages 45 Units 720 SF 32,400 SF $761.16 $1.06 SF $34,252 $808.78 $1.12 SF $36,395 $893.67 $1.24 SF $40,215
•
QUICK FACTS • Management Fee Opportunity | Currently at 9.20%
VERNON COURT
vernon court
Property Address: 1506 North Bend Rd
City, State, Zip: Cincinnati, OH 45224
Submarket: College Hill
County: Hamilton County
Year Built/Reno: 1971
Property Type: Market
Cable/Internet: Property Paid
Foundation: Slab concrete
Framing: Wood frame
Roof Type/Age: Flat - Rubberized
Exterior: Brick
PROPERTY DETAILS
Avg Unit Size: 720 Rentable Sqft: 32,400 Number
Lot Size (Acres): 0.88 acres Occupancy: 98% #
Gas:
Number Of Units: 45
of Parcels: 2
of Buildings: 2 Electric: Property Paid
Property Paid Water/Sewer: Property Paid Trash: Property Paid
VERNON
COURT CINCINNATI, OH 1506 NORTH BEND ROAD | 1506 NORTH BED ROAD
1 PROVIDENCE POINTE 2 FOUR WORLDS APTS 3 THE BRADFORD 4 BELMONT APTS 5 SUNRISE TOWNHOMES 6 COMPTON LAKE 7 NORTHWOODS APTS 8 LAKE OF THE WOODS APTS 2 1 3 4 5 6 7 8
local competitors
VERNON COURT
ONE BEDROOM
TWO BEDROOM
ONE BEDROOM # UNITS AVG RENT Compton Lake 83 $1,100 Lake of the Woods Apts 123 $1,050 Providence Pointe 25 $899 Four World Apartments 46 $945 Subject Pro Forma 114 $875 The Bradford 25 $800 Northwoods Apartments 18 $775 Belmont Apartments 16 $775 Subject Average Effective 114 $745 Sunrise Townhomes 12 $675 Two Bedroom Compton Lake 80 $1,225 Lake of the Woods Apts 112 $1,155 Four World Apartments 155 $1,125 Providence Pointe 30 $1,069 Sunrise Townhomes 11 $1,050 Belmont Apartments 32 $1,000 Subject Pro Forma 33 $1,066 Subject Average Effective 33 $959 Northwoods Apartments 90 $915
UNITS 55 YEAR BUILT 1960 OCCUPANCY N/A UNIT MIX UNITS SQFT RENT RENT/SF One Bedroom 25 592 $899 $1.52 Two Bedroom 30 775 $1,069 $1.38 UNITS 201 YEAR BUILT 1971 OCCUPANCY 98.0% UNIT MIX UNITS SQFT RENT RENT/SF One Bedroom 46 819 $945 $1.15 Two Bedroom 155 996 $1,125 $1.13 5852 RENEE CT 8292 FOUR WORLDS DR providence pointe four worlds apartments
UNITS 137 YEAR BUILT 1969 OCCUPANCY 96.4% UNIT MIX UNITS SQFT RENT RENT/SF Studio 112 450 $657 $1.46 One Bedroom 25 600 $800 $1.33 UNITS 8 YEAR BUILT 1952 OCCUPANCY 87.5% UNIT MIX UNITS SQFT RENT RENT/SF Two Bedroom 8 950 $1,000 $1.05 1500 GROESBECK RD 5928 BELMONT AVENUE the bradford BELMONT APARTMENTS
PRICING SUMMARY
VERNON COURT - FINANCIALS ALL-IN CAP RATE CASH-ON-CASH RETURNS PRICE PER UNIT PER RSF T3 NO TAX ADJ. T3 TAX ADJ. YEAR 1 T3 NO TAX ADJ. T3 TAX ADJ. YEAR 1 YEAR 2 Year 3 (Fully Amortizing)
$73,500 $102.08 6.23% 5.57% 6.49% 5.08% 3.20% 5.82% 6.55% 7.30% $3,255,000 $72,333 $100.46 6.33% 5.66% 6.60% 5.16% 3.25% 5.91% 6.65% 7.42% $3,202,500 $71,167 $98.84 6.44% 5.76% 6.70% 5.24% 3.31% 6.01% 6.76% 7.54% $3,150,000 $70,000 $97.22 6.54% 5.85% 6.82% 5.33% 3.36% 6.11% 6.88% 7.67% $3,097,500 $68,833 $95.60 6.65% 5.95% 6.93% 5.42% 3.42% 6.21% 6.99% 7.80%
$67,667 $93.98 6.77% 6.05% 7.05% 5.52% 3.48% 6.32% 7.11% 7.93% $2,992,500 $66,500 $92.36 6.89% 6.16% 7.17% 5.61% 3.54% 6.43% 7.24% 8.07%
$3,307,500
$3,045,000
UNIT MIX BREAKDOWN
UNIT RENTS
UNIT DISTRIBUTION
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
1BR/1BA - Vernon 14 Units 700 SF 9,800 SF $641.67 $0.92 SF $8,983 $650.00 $0.93 SF $9,100 $865.00 $1.24 SF $12,110 1BR/1BA - Vernon - CMHA (4 at Mkt) 25 Units 700 SF 17,500 SF $786.16 $1.12 SF $19,654 $850.00 $1.21 SF $21,250 $865.00 $1.24 SF $21,625 Totals / Wtd. Averages 39 Units 700 SF 27,300 SF $734.29 $1.05 SF $28,637 $778.21 $1.11 SF $30,350 $865.00 $1.24 SF $33,735 Two Bedroom 2BR/1BA - Vernon 3 Units 850 SF 2,550 SF $850.00 $1.00 SF $2,550 $850.00 $1.00 SF $2,550 $995.00 $1.17 SF $2,985 2BR/1BA - Vernon - CMHA (1 at Mkt) 3 Units 850 SF 2,550 SF $1,021.67 $1.20 SF $3,065 $1,165.00 $1.37 SF $3,495 $1,165.00 $1.37 SF $3,495 Totals / Wtd. Averages 6 Units 850 SF 5,100 SF $935.84 $1.10 SF $5,615 $1,007.50 $1.19 SF $6,045 $1,080.00 $1.27 SF $6,480
One Bedroom
VERNON COURT - FINANCIALS
& EXPENSES
VERNON CTFINANCIALS T12 RENT ROLL: AS OF MAY 1, 2024 INCOME AND EXPENSES: MAY 2023 - APRIL 2024 T6 TRAILING 6 MONTH INCOME ASSUMED CONTROLLABLE EXPENSES GROSS POTENTIAL RENT % of GPR Per Unit % of GPR Per Unit All Units at Market Rent $474,120 RR 10,536 $474,120 RR 10,536 Gain (Loss) to Lease ($61,692) 13.01% (1,371) ($61,692) 13.01% (1,371) GROSS SCHEDULED RENT $412,428 RR 9,165 $412,428 RR 9,165 Other Income Late/NSF Fees $5,014 T12 1.22% 111 $5,014 T12 1.22% 111 Laundry Income $2,252 T12 0.55% 50 $2,252 T12 0.55% 50 Total Other Income $7,266 1.76% 161 $7,266 1.76% 161 GROSS POTENTIAL INCOME $419,694 9,327 $419,694 9,327 Physical Vacancy ($21,301) T12 Economic 5.16% (473) ($5,342) T6 Economic 1.30% (119) Bad Debt $0 0.00% 0 $0 0.00% 0 EFFECTIVE GROSS INCOME $398,393 81.82% 8,853 $414,352 85.69% 9,208 NON-CONTROLLABLE Real Estate Taxes % of EGI Per Unit % of EGI 2023 Taxes Paid $37,088 Auditor 9.44% 824 $37,088 Auditor 8.96% 824 Total Real Estate Taxes $37,088 9.44% 824 $37,088 8.96% 824 Insurance $14,654 T12 3.68% 326 $14,654 T12 3.54% 326 Utilities Gas & Electric $15,831 T12 3.97% 352 $15,831 T12 3.82% 352 Water & Sewage $24,272 T12 6.09% 539 $24,272 T12 5.86% 539 Trash Removal $3,206 T12 0.80% 71 $3,206 T12 0.77% 71 Total Utilities $43,309 10.87% 962 $43,309 10.45% 962 Total Non-Controllable $95,051 23.86% 2,112 $95,051 22.94% 2,112 CONTROLLABLE Contract Services Landscaping/Grounds/Snow $11,747 T12 2.95% 261 $11,250 2.72% 250 Pest Control $6,913 T12 1.74% 154 $3,375 0.81% 75 Total Contract Services $18,660 4.68% 415 $14,625 3.53% 325 Repairs & Maintenance $58,294 T12 14.63% 1,295 $27,000 6.52% 600 Marketing & Promotion $0 0.00% 0 $3,375 0.81% 75 On-Site Payroll $43,325 T12 10.88% 963 $40,500 9.77% 900 Payroll Taxes & Benefits $0 0.00% 0 $4,500 1.09% 100 General & Administrative $2,892 T12 0.73% 64 $3,375 0.81% 75 Management Fee $36,493 T12 9.16% 811 $20,718 5.00% 492 Replacement & Reserves $11,250 T12 2.82% 250 $13,500 3.26% 300 Total Controllable $170,914 42.90% 3,798 $127,593 30.79% 2,867 TOTAL EXPENSES $265,966 66.76% 5,910 $222,644 53.73% 4,948 NET OPERATING INCOME $132,427 33.24% 2,943 $191,708 46.27% 4,260 EXPENSE INCOME INCOME
UNDERWRITING NOTES # NOTE 1 Replacement &
based on market norm of $255 per unit per year T1 TRAILING 3 MONTH INCOME ASSUMED CONTROLLABLE EXPENSES YEAR 1 % of GPR Per Unit % of GPR Per Unit $474,120 RR 10,536 $482,580 10,724 ($61,692) 13.01% (1,371) ($19,303) 4.00% (429) $412,428 RR 9,165 $463,277 10,295 $5,014 T12 1.22% 111 $5,164 1.11% 115 $2,252 T12 0.55% 50 $2,319 0.50% 52 $7,266 1.76% 161 $7,484 1.62% 166 $419,694 9,327 $470,761 10,461 ($13,080) T1 Economic 3.17% (291) ($23,164) 5.00% (515) $0 0.00% 0 ($4,633) 1.00% (103) $406,614 83.82% 9,036 $442,964 90.00% 9,844 % of EGI Per Unit % of EGI Per Unit $37,088 Auditor 9.32% 824 $37,088 9.32% 824 $37,088 9.32% 824 $37,088 9.32% 824 $14,654 T12 3.60% 326 $18,000 4.43% 400 $15,831 T12 3.89% 352 $16,148 3.97% 359 $24,272 T12 5.97% 539 $24,758 6.09% 550 $3,206 T12 0.79% 71 $3,270 0.80% 73 $43,309 10.65% 962 $44,176 10.86% 982 $95,051 23.38% 2,112 $99,263 24.41% 2,206 $11,250 2.77% 250 $11,250 2.54% 250 $3,375 0.83% 75 $3,375 0.76% 75 $14,625 3.60% 325 $14,625 3.60% 325 $27,000 6.64% 600 $27,000 6.10% 600 $3,375 0.83% 75 $3,375 0.76% 75 $40,500 9.96% 900 $40,500 9.14% 900 $4,500 1.11% 100 $4,500 1.02% 100 $3,375 0.83% 75 $3,375 0.76% 75 $20,331 5.00% 492 $22,148 5.00% 492 $13,500 3.32% 300 $13,500 3.05% 300 $127,206 31.28% 2,867 $129,023 29.42% 2,867 $222,257 54.66% 4,939 $228,286 56.14% 5,073 $184,357 45.34% 4,097 $214,678 52.80% 4,771
Reserves: added
T12 T6 T1 YR 1 YR 2 YR 3 YR 4 YR 5 YE MAY-2025 YE MAY-2026 YE MAY-2027 YE APR-2028 YE APR-2029 GROSS POTENTIAL RENT All Units at Market Rent $474,120 $474,120 $474,120 $482,580 $497,057 $511,969 $527,328 $543,148 Gain (Loss) to Lease ($61,692) ($61,692) ($61,692) ($19,303) ($19,882) ($20,479) ($21,093) ($21,726) GROSS SCHEDULED RENT $412,428 $412,428 $412,428 $463,277 $477,175 $491,490 $506,235 $521,422 Total Other Income $7,266 $7,266 $7,266 $7,484 $7,634 $7,786 $7,942 $8,101 GROSS POTENTIAL INCOME $419,694 $419,694 $419,694 $470,761 $484,809 $499,277 $514,177 $529,523 Physical Vacancy ($21,301) ($5,342) ($13,080) ($23,164) ($23,859) ($24,575) ($25,312) ($26,071) Bad Debt $0 $0 $0 ($4,633) ($4,772) ($4,915) ($5,062) ($5,214) EFFECTIVE GROSS INCOME $398,393 $414,352 $406,614 $442,964 $456,178 $469,787 $483,803 $498,238 Real Estate Taxes $37,088 $37,088 $37,088 $37,088 $37,829 $38,586 $39,358 $40,145 Insurance $14,654 $14,654 $14,654 $18,000 $18,360 $18,727 $19,102 $19,484 Utilities $43,309 $43,309 $43,309 $44,176 $45,059 $45,960 $46,879 $47,817 Contract Services $18,660 $14,625 $14,625 $14,625 $14,918 $15,216 $15,520 $15,831 Repairs & Maintenance $58,294 $27,000 $27,000 $27,000 $27,540 $28,091 $28,653 $29,226 Marketing & Promotion $0 $3,375 $3,375 $3,375 $3,443 $3,511 $3,582 $3,653 On-Site Payroll $43,325 $40,500 $40,500 $40,500 $41,310 $42,136 $42,979 $43,839 Payroll Taxes & Benefits $0 $4,500 $4,500 $4,500 $4,590 $4,682 $4,775 $4,871 General & Administrative $2,892 $3,375 $3,375 $3,375 $3,443 $3,511 $3,582 $3,653 Management Fee $36,493 $20,718 $20,331 $22,148 $22,809 $23,489 $24,190 $24,912 Replacement & Reserves $11,250 $13,500 $13,500 $13,500 $13,770 $14,045 $14,326 $14,613 TOTAL EXPENSES $265,966 $222,644 $222,257 $228,286 $233,070 $237,956 $242,946 $248,043 NET OPERATING INCOME $132,427 $191,708 $184,357 $214,678 $223,108 $231,832 $240,857 $250,195 DEBT SERVICE - Proposed New Principal Payments $25,144 $25,144 $25,144 $25,144 $26,694 $28,341 $30,089 $31,945 Interest Payments $122,166 $122,166 $122,166 $122,166 $120,615 $118,969 $117,221 $115,365 TOTAL DS - Proposed New Loan $147,310 $147,310 $147,310 $147,310 $147,310 $147,310 $147,310 $147,310 CONSOLIDATED DEBT SERVICE $147,310 $147,310 $147,310 $147,310 $147,310 $147,310 $147,310 $147,310 NET CASH FLOW AFTER DEBT ($14,882) $44,398 $37,047 $67,368 $75,799 $84,522 $93,548 $102,885 DEBT SERVICE COVERAGE RATIO 0.90 1.30 1.25 1.46 1.51 1.57 1.64 1.70 RETURN ANALYSIS T12 T6 T1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 CAP Rate (Purchase Price) 4.20% 6.09% 5.85% 6.82% 7.08% 7.36% 7.65% 7.94% 'All-In' CAP Rate (Total Cost) 4.20% 6.09% 5.85% 6.82% 7.08% 7.36% 7.65% 7.94% Cash-on-Cash Return -1.35% 4.03% 3.36% 6.11% 6.88% 7.67% 8.49% 9.33% IRR n/a n/a n/a 2.64% 5.62% 7.39% 8.54% 9.35% INCOME EXPENSE VERNON CTFINANCIALS
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 1.78% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% (Loss) / Gain to Lease* 13.01% 13.01% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 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** 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 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 1.30% 3.17% 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 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Concessions Allowance 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Economic Loss 1.30% 3.17% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% Tax Breakdown Property Address Parcel ID Year Built Acres Market Value Assessed Value Tax Rate Taxes Payable Land Use Code 1506 North Bend Rd (Vernon) 247-0002-0014-00 1971 0.48 $686,010 $240,110 82.074213 $19,706.84 403 - Apartment, 40+ Units 1510 North Bend Rd 247-0002-0013-00 1971 0.40 $605,070 $211,770 82.074213 $17,380.86 403 - Apartment, 40+ Units Total 0.88 $1,291,080 $451,880 $37,087.70
VERNON COURT
