WEST ALKALINE OFFERING MEMORANDUM
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
“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 - RENT 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
AUSTIN SUM
SENIOR INVESTMENT ASSOCIATE
JD SCHMERGE INVESTMENT ASSOCIATE
BRIAN JOHNSTON INVESTMENT ASSOCIATE
TIM VANWINGERDEN INVESTMENT ASSOCIATE
AUSTIN Hall INVESTMENT ASSOCIATE
ALDEN SIMMIS INVESTMENT ASSOCIATE
BROKER SUPPORT
SAM PETROSNIO
VALUATION & RESEARCH
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
SKLYER WILSON
CLIENT RELATIONS MANAGER
BRITTANY CAMPBELL-KOCH
DIRECTOR OF OPERATIONS
ALEX PAPA
MARKETING COORDINATOR
THE INVESTMENT
01
photos
WEST ALKALINE
PROPERTY DETAILS
Property Address: 840-880 West Alkaline Springs Rd.
City, State, Zip: Vandalia, OH 45377
Submarket: Vandalia County: Montgmomery
Year Built/Reno: 1972
Number Of Units: 40
Avg Unit Size: 755
Rentable Sqft: 30,200
Number of Parcels: 5
Lot Size (Acres): 1.57
Density: 25.5
# of Buildings: 5
# of Stories: 2
Current Occupancy: 93 %
Parking Type: 98 Free Off-Street Surface Spots
Parking Surface: Ashphalt - Resurfaced in 2021
Wiring: Copper Foundation: Poured Slab
Framing: Stick
Roof Type/Age: Pitched Shingle
Exterior of Building: Brick
OFFERS UNIT AMENITIES MOST VALUED IN SUBMARKET
IN-UNIT WASHER/DRYER HOOKUPS INDIVIDUAL HVAC
WEST ALKALINE
inestment highlights
PROVEN VALUE-ADD:
- Over the last 24 months, current ownership has been ren ovating units and securing new leases at a $150 premium compared to the classic units. Roughly 15 units have re ceived the below upgrades. Upgrading the units has aver age roughly $7,500/unit generating a roughly 24% ROI.
- LVP flooring: kitchen, bathroom, entrance way
o Roughly 7 units received LVP flooring throughout
- Faux-granite kitchen countertops
- New or painted white kitchen cabinets with SS hardware
- Bathroom vanities
- Accent lighting fixture
RECENT COMMUNITY UPGRADES:
- Landscaping project
- Parking lot resurfaced since 2021
- Exterior siding, shutters, and entrance pillars painted
- Security cameras covering entrances and parking area
17 MINS (12.5 MI)
WEST ALKALINE
*
DAYTON AIRPORT
DOWNTOWN DAYTON
RENT COMPETITORS
02
1 BROWN SCHOOL STATION APTS 2 BROOKFIELD NORTH APTS 3 860 SOUTH DIXIE DRIVE 4 516 KARNS DRIVE RENT COMPARABLES 1 * WEST ALKALINE 2 3 4
RENT COMPETITORS LOCATION
SUBJECT WEST ALKALINE APARTMENTS
Units 40 Year Built 1972 Occupancy 98% UNIT MIX UNITS SQFT RENT RENT/SF One Bedroom 20 710 $775 $1.09 Two Bedroom 20 800 $925 $1.16 Apartment Interior Amenities In-unit washer/dryer hookups Individual HVAC
UNITS 112 YEAR BUILT 1971 OCCUPANCY N/A UNIT MIX UNITS SQFT RENT RENT/SF One Bedroom 21 618 $750 $1.21 Two Bedroom 91 848 $868 $1.02 Apartment Interior Amenities A/C Dishwasher Disposal Cable Ready Ceiling Fans Balcony Window Coverings Common Area Amenities Laundry Facilities
RENT COMPETITORS BROWN SCHOOL STATION APTS
Units 107 Year Built 1969 Occupancy N/A UNIT MIX UNITS SQFT RENT RENT/SF One Bedroom 7 650 $730 $1.12 Apartment Interior Amenities High Speed Internet Access In Unit Washer Dryer Air Conditioning Ceiling Fans Smoke Free Cable Ready Oven Disposal Dishwasher
RENT COMPETITORS BROOKFIELD NORTH APARTMENTS
860 SOUTH DIXIE DRIVE
RENT
COMPETITORS
UNITS 76 YEAR BUILT 1979 OCCUPANCY N/A UNIT MIX UNITS SQFT RENT RENT/SF One Bedroom 76 512 $698 $1.36 Apartment Interior Amenities Air Condiitoning Cable Ready Internet Access Hardwood Floors 24 Hour Maintenance Patio/Balcony Electronic Thermostat Common Area Amenities Laundry Facilities Off Street Parking Playground Public Transportation 24 Hour Maintenance Bus Line Landscaping
Units 8 Year Built 1969 Occupancy N/A UNIT MIX UNITS SQFT RENT RENT/SF Two Bedroom 8 945 $1,050 $1.11 Apartment Interior Amenities Central Air Separate Front and Back Entrances Patio Privacy Fences Common Area Amenities Laundry Facilities Off Street Parking
RENT COMPETITORS 525 BRIGHT AVENUE
FINANCIALS
03
WEST ALKALINE FINANCIALS
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 One Bedroom 20 Units 710 SF 14,200 SF $583.08 $0.82 $11,662 $587.25 $0.83 SF $11,745 $775.00 $1.09 SF $15,500 Two Bedroom 20 Units 800 SF 16,000 SF $704.53 $0.88 $14,091 $724.50 $0.91 SF $14,490 $925.00 $1.16 SF $18,500 Totals / Wtd. Averages 40 Units 755 SF 30,200 SF $643.81 $0.85 SF $25,752 $655.88 $0.87 SF $26,235 $850.00 $1.13 SF $34,000
UNIT DISTRIBUTION UNIT RENTS
WEST ALKALINE 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 One Bedroom 1BR/1BA 15 Units 710 SF 10,650 SF $550.00 $0.77 SF $8,250 $550.00 $0.77 SF $8,250 $775.00 $1.09 SF $11,625 1BR/1BA - Reno 5 Units 710 SF 3,550 SF $682.33 $0.96 SF $3,412 $699.00 $0.98 SF $3,495 $775.00 $1.09 SF $3,875 Totals / Wtd. Averages 20 Units 710 SF 14,200 SF $583.08 $0.82 SF $11,662 $587.25 $0.83 SF $11,745 $775.00 $1.09 SF $15,500 Two Bedroom 2BR/1BA 10 Units 800 SF 8,000 SF $615.06 $0.77 SF $6,151 $650.00 $0.81 SF $6,500 $925.00 $1.16 SF $9,250 2BR/1BA - Reno 10 Units 800 SF 8,000 SF $794.00 $0.99 SF $7,940 $799.00 $1.00 SF $7,990 $925.00 $1.16 SF $9,250 Totals / Wtd. Averages 20 Units 800 SF 16,000 SF $704.53 $0.88 SF $14,091 $724.50 $0.91 SF $14,490 $925.00 $1.16 SF $18,500
INCOME & EXPENSES
CURRENT YEAR 1 GROSS POTENTIAL RENT % of GPR Per Unit % of GPR Per Unit All Units at Market Rent $358,320 RR 8,958 $408,000 10,200 Gain (Loss) to Lease ($48,426) 13.51% (1,211) ($20,400) 5.00% (510) GROSS SCHEDULED RENT $309,894 RR 7,747 $387,600 9,690 Other Income Pet Fee-Non Refundable $3,100 T3 1.00% 78 $3,193 0.82% 80 Application Fee Income $2,360 T3 0.76% 59 $2,124 0.55% 53 Pet Income $807 T3 0.26% 20 $831 0.21% 21 Late Fee $400 T3 0.13% 10 $412 0.11% 10 Coin Laundry $344 T3 0.11% 9 $354 0.09% 9 Total Other Income $7,011 2.26% 175 $6,914 1.78% 173 GROSS POTENTIAL INCOME $316,905 7,923 $394,514 9,863 Physical Vacancy ($25,339) T3 Economic 8.18% (633) ($19,380) 5.00% (485) Bad Debt $0 0.00% 0 ($3,876) 1.00% (97) Concessions Allowance ($1,938) T3 0.63% (48) $0 0.00% 0 EFFECTIVE GROSS INCOME $289,627 77.68% 7,241 $371,258 89.00% 9,281 NON-CONTROLLABLE Real Estate Taxes % of EGI Per Unit % of EGI 2021 Taxes Paid $29,567 Auditor 10.21% 739 $29,567 7.96% 739 Total Real Estate Taxes $29,567 10.21% 739 $29,567 7.96% 739 Insurance $8,975 T12 3.10% 224 $12,000 3.23% 300 Utilities Electric $4,247 T12 1.47% 106 $4,332 1.17% 108 Water & Sewage $14,434 T12 4.98% 361 $14,722 3.97% 368 Trash Removal $135 T12 0.05% 3 $138 0.04% 3 Total Utilities $18,816 6.50% 470 $19,192 5.17% 480 Total Non-Controllable $57,358 19.80% 1,434 $60,759 16.37% 1,519 CONTROLLABLE Contract Services Security Expense $120 T12 0.04% 3 $0 0.00% 0 Snow Removal $2,564 T12 0.89% 64 $1,400 0.38% 35 Landscaping/Grounds $8,542 T12 2.95% 214 $5,000 1.35% 125 Pest Control $466 T12 0.16% 12 $1,000 0.27% 25 Total Contract Services $11,692 4.04% 292 $7,400 1.99% 185 Repairs & Maintenance $26,099 T12 9.01% 652 $24,000 6.46% 600 Marketing & Promotion $590 T12 0.20% 15 $2,000 0.54% 50 On-Site Payroll $7,831 T12 2.70% 196 $25,000 6.73% 625 Payroll Taxes & Benefits $0 0.00% 0 $4,000 1.08% 100 General & Administrative $2,724 T12 0.94% 68 $3,000 0.81% 75 Management Fee $14,481 Added 5.00% 362 $18,563 5.00% 464 Replacement & Reserves $10,200 Note 1 3.52% 255 $10,404 2.80% 260 Total Controllable $73,617 25.42% 1,840 $94,367 25.42% 2,359 TOTAL EXPENSES $130,975 45.22% 3,274 $155,126 41.78% 3,878 NET OPERATING INCOME $158,652 54.78% 3,966 $216,132 58.22% 5,403 EXPENSE INCOME
WEST ALKALINEFINANCIALS
UNDERWRITING NOTES # NOTE
1 Replacement & Reserves: added based on market norm of $255 per unit per year
YEAR 2 YEAR 3 % of GPR Per Unit % of GPR Per Unit $420,240 10,506 $432,847 10,821 ($8,405) 2.00% (210) ($8,657) 2.00% (216) $411,835 10,296 $424,190 10,605 $3,289 0.80% 82 $3,387 0.80% 85 $2,188 0.53% 55 $2,253 0.53% 56 $856 0.21% 21 $881 0.21% 22 $424 0.10% 11 $437 0.10% 11 $365 0.09% 9 $376 0.09% 9 $7,122 1.73% 178 $7,335 1.73% 183 $418,957 10,474 $431,526 10,788 ($20,592) 5.00% (515) ($21,210) 5.00% (530) ($8,237) 2.00% (206) ($8,484) 2.00% (212) $0 0.00% 0 $0 0.00% 0 $390,128 91.00% 9,753 $401,832 91.00% 10,046 % of EGI Per Unit % of EGI Per Unit $29,567 7.58% 739 $29,567 7.58% 739 $29,567 7.58% 739 $29,567 7.58% 739 $12,240 3.14% 306 $12,485 3.20% 312 $4,419 1.13% 110 $4,507 1.16% 113 $15,017 3.85% 375 $15,317 3.93% 383 $140 0.04% 4 $143 0.04% 4 $19,576 5.02% 489 $19,968 5.12% 499 $61,383 15.73% 1,535 $62,020 15.90% 1,550 $0 0.00% 0 $0 0.00% 0 $1,428 0.37% 36 $1,457 0.37% 36 $5,100 1.31% 128 $5,202 1.33% 130 $1,020 0.26% 26 $1,040 0.27% 26 $7,548 1.93% 189 $7,699 1.97% 192 $24,480 6.27% 612 $24,970 6.40% 624 $2,040 0.52% 51 $2,081 0.53% 52 $25,500 6.54% 638 $26,010 6.67% 650 $4,080 1.05% 102 $4,162 1.07% 104 $3,060 0.78% 77 $3,121 0.80% 78 $19,506 5.00% 488 $20,092 5.00% 488 $10,612 2.72% 265 $10,824 2.77% 271 $96,826 24.82% 2,421 $98,958 25.22% 2,459 $158,210 40.55% 3,955 $160,978 41.26% 4,024 $231,919 59.45% 5,798 $240,854 61.74% 6,021
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 1.5% from 2015 to 2019. During that same five-year period, job growth av eraged 1.0% annually, with roughly 3,900 jobs added on average each year. In 2020, COVID-19 mitigation mea sures and limited business activity caused the local econ omy to contract as much as 10.5% year-over-year in 2nd quarter. In the year-ending 3rd quarter 2022, the metro’s inflation-adjusted economic output expanded 0.8%. At the same time, the metro recorded a net gain of 6,200 jobs, expanding the employment base 1.7%. Dayton’s unemploy ment rate in August 2022 declined 0.5 points year-overyear to 4.3%, above the national average of 3.8%. During the past year, job gains in Dayton were most pronounced in the Leisure/Hospitality Services sector followed by Gov ernment. Due to job losses stemming from the pandemic, Dayton’s current employment base now sits roughly 7,100 jobs or about 2% below the pre-pandemic level in Febru ary 2020.
Population: 743,000
Median age: 33.5
the rent
In 3rd quarter 2022, effective asking rents for new leases were up 10.3% year-over-year. That annual rent performance was more than twice the market’s five-year average of 4.5% and a new high for the market. In 3rd quarter 2022, annual effective rent change registered at 13.4% in Class A units, 8.2% in Class B units and 8.6% in Class C units. Among submarkets, the strongest annual rent change performances over the past year were in North Dayton/ Miami County and Northwest Dayton. 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 3rd quarter 2022, effective asking rental rates in Dayton averaged $1,071 per month, or $1.177 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: 96.5%
Rent growth: 10.3%
• New apartment completions in Dayton were modest recently, as 373 units delivered in the year-ending 3rd quarter 2022. Completions over the past year expanded the local inventory base just 0.7%. In the past year, supply was greatest in Greene County and Central Dayton/Kettering.
• At the end of 3rd quarter 2022, there were 907 units under-construction with 668 of those units scheduled to complete in the next four quarters. Scheduled deliveries in the coming year are expected to be concentrated in Central Dayton/Kettering.
SUPPLY OCCUPANCY
• Over the past year, occupancy lost 1.0 point with the 3rd quarter 2022 rate landing at 96.5%.
• Product classes in Dayton, 3rd quarter 2022 occupancy registered at 96.2% in Class A units, 96.8% in Class B units and 96.4% in Class C units.
• Among submarkets, 3rd quarter 2022 occupancy was strongest in Greene County and North Dayton/Miami County.
•The weakest reading was seen 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.”
Eric Henry, Greene County’s Economic Development Coordinatorcarillon 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.
