Z3

Page 1

Z3 PORTFOLIO


EXCLUSIVITY LISTED BY JORDAN DICKMAN

First Vice President of Investments 513-878-7735 jordan.dickman@marcusmillichap.com

NICK ANDREWS

First Vice President of Investments 513-878-7741 nick.andrews@marcusmillichap.com

AUSTIN SUM

Senior Associate 513-878-7747 austin.sum@marcusmillichap.com

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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.

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the table of

CONTENTS

EXECUTIVE SUMMARY

00

C I N C I N N AT I OVERVIEW

01

WESTSIDE

02

page

8

page

18

page

28

R O S E L AW N

03

page

54

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CALABASAS, CALIFORNIA | HQ

80+ | OFFICES

2,500 | EMPLOYEES


UNRIVALED SUCCESS IN THE MIDWEST Nick Andrews

First Vice President Investments Director, NMHG

Jordan Dickman

First Vice President Investments Director, NMHG

INVESTMENT ADVISORS

Austin Sum

Senior Investment Associate

Garry Schloemer Investment Associate

JD Schmerge Investment Associate

Brian Johnston

Tim VanWingerden

Investment Associate

Investment Associate

DEBT & STRUCTURED FINANCE

Chris Litzler

Jim Leonard

Senior Director MMCC

Senior Managing Director of Capital Markets MMCC

CLIENT RELATIONS

VALUATION & RESEARCH

Sam Petrosino

Jennifer Bauer

Financial & Research Analyst

Client Relationship Coordinator

OPERATIONS & MARKETING

Brittany Campbell-Koch Director of Operations

Josh Caruana

Vice President Regional Manager Indianapolis | Cincinnati | Louisville St Louis | Kansas City

Kristin Smith Marketing

Alex Papa

Marketing Coordinator

John Sebree

Sidney Bills

Office Administrator

Senior Vice President National Director National Multi Housing Group

Liz Popp

Midwest Operations Manager

Michael Glass

Senior Vice President Midwest Division Manager National Director, Manufactured Home Communities Group

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Z3 PORTFOLIO

00 section

EXECUTIVE SUMMARY summary - 10 strength in numbers - 12 unix mix - 14 breakdown - 16 ADG MULTIFAMILY

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LAROSE PLACE

WYOMING CROSSING EAGLE WATCH

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CINCINNATI, OHIO


EXECUTIVE SUMMARY

Z3 PORTFOLIO. 353

UNITS

1,481,603 PORTFOLIO NOI

96%

AVERAGE OCCUPANCY

883

AVERAGE UNITS SQFT

.88

AVERAGE RENT PER SQFT

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Z3 PORTFOLIO

STRENGTH IN NUMBERS Marcus & Millichap is pleased to present The Z3 Portfolio, 353 units of apartment living across 3 assets in the desirable Cincinnati. The portfolio provides the investor a hardto-find opportunity with phenomenal potential due to its solid submarket fundamentals, top-notch employment, high demand, and market proven rental upside in each of the markets. Fundamentals of the portfolio are unmatched as it outperformed the rest of the market through 2020.

*See repected executive summary pages for debt information*

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STRONG STABILIZATION • Z3 portfolio boasts an average of 6% physical vacancy factor on the trailing 12 months across all three assets.

CONSISTENT COLLECTIONS • Z3 shows a 98% collection rate through 2020, one of the most trying years for apartment properties to ever endure.

MARKET PROVEN RENTS • Average rents on the portfolio are anywhere from 5-7% below market competition, a clear path to increasing value through organic rental appreciation.

RUNWAY FOR RENTAL GROWTH

• The average rent across the portfolio comes in at $0.88 per square foot while the average rent per square foot across the metros is $1.07.

STRONG MARKET FUNDAMENTALS

• Z3 Portfolio gives and incoming investor the opportunity to invest in one of the top ten most COVID resilient markets in the nation.

HIGH BARRIER TO ENTRY

• With low inventory velocity through most of the markets the portfolio is in, this gives an incoming investor the ability to build immediate scale to reduce operation costs over 353 units

FAVORABLE UNIT MIX • Z3 Portfolio offers a very attractive unit mix of over 80% two and three bed unit layouts maximizing Gross Potential Rent opportunity for an incoming investor.

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EXECUTIVE SUMMARY

Z3 PORTFOLIO IN DETAIL

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BEDROOM 61 Units 35,857 SF

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BEDROOM 244 Units 221,320 SF

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BEDROOM 48 Units 54,432 SF


EXECUTIVE SUMMARY UNIT MIX SUMMARY

PROJECTED

MARKET

AVERAGE EFFECTIVE

Rentable

Total

Units

SF

SF

One Bedroom

61 Units

588 SF

35,857 SF

$623.67

$1.06

$38,044

$663.88

$1.13 SF

$40,497

$698.00

$1.19 SF

$42,578

Two Bedroom

244 Units

907 SF

221,320 SF

$778.74

$0.86

$190,014

$810.03

$0.89 SF

$197,648

$842.95

$0.93 SF

$205,680

Three Bedroom

48 Units

1,134 SF

54,432 SF

$943.84

$0.83

$45,304

$980.00

$0.86 SF

$47,040

$1,056.25

$0.93 SF

$50,700

Totals / Wtd. Averages

353 Units

883 SF

311,609 SF

$774.40

$0.88 SF

$273,362

$807.89

$0.92 SF

$285,185

$846.91

$0.96 SF

$298,958

Unit Type

Total Rent Rent/Unit Rent/SF

Potential

Total Rent Rent/Unit Rent/SF

Potential

Total Rent Rent/Unit Rent/SF

Potential

Summary

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Year 1

(Rent Roll/T12 Income)

INCOME EXPENSES

FINANCIAL BREAKDOWN

Current GROSS POTENTIAL RENT

(Recapture LTL, Stabilized Occupancy and Other Income, Normalized Expenses)

% of GPR

Per Unit

% of GPR

Per Unit

4.94%

9,695 (479) 9,216

$3,587,494 ($71,750) $3,515,744

2.00%

10,163 (203) 9,960

All Units at Market Rent Gain (Loss) to Lease GROSS SCHEDULED RENT Other Income Other Income Total Other Income

$3,422,220 ($169,030) $3,253,190

T12 T12

$27,613 $64,422

T12

0.85% 1.98%

78 182

$28,947 $67,534

0.82% 1.92%

82 191

GROSS POTENTIAL INCOME Physical Vacancy Employee Units Bad Debt Concessions Allowance EFFECTIVE GROSS INCOME

$3,317,612 ($214,802) ($22,969) ($75,986) ($39,620) $2,964,235

T12 T12 T12 T12

6.60% 0.71% 2.34% 1.22% 84.20%

9,398 (609) (65) (215) (112) 8,397

$3,583,278 ($175,787) $0 ($35,157) ($17,579) $3,354,754

5.00% 0.00% 1.00% 0.50% 91.50%

10,151 (498) 0 (100) (50) 9,504

% of EGI 4.46% 0.00% 4.46% 3.90%

Per Unit 374 0 374 327

$132,118 $0 $132,118 $114,725

% of EGI 3.94% 0.00% 3.94% 3.42%

Per Unit 374 0 374 325

Non-Controllable Real Estate Taxes 2019 Taxes Paid Adjustment for Sale Total Real Estate Taxes Insurance Utilities Electric Electric Vacant Gas Water & Sewage Trash Removal Total Utilities Total Non-Controllable Controllable Contract Services Snow Removal Landscaping/Grounds Pest Control Total Contract Services Repairs & Maintenance Marketing & Promotion On-Site Payroll Payroll Taxes & Benefits General & Administrative Management Fee Telephone & Cable Replacement & Reserves Total Controllable

$132,118 $0 $132,118 $115,476

Auditor

$23,265 $11,021 $65,823 $281,893 $56,570 $438,572 $686,166

T12 T12 T12 T12 T12 T12

0.78% 0.37% 2.22% 9.51% 1.91% 14.80% 23.15%

66 31 186 799 160 1,242 1,944

$23,730 $11,241 $67,139 $287,531 $57,701 $447,343 $694,186

0.71% 0.34% 2.00% 8.57% 1.72% 13.33% 20.69%

67 32 190 815 163 1,267 1,967

$13,309 $21,197 $17,047 $51,553

T12 T12 T12

0.45% 0.72% 0.58% 1.74%

38 60 48 146

$12,355 $35,300 $12,355 $60,010

0.37% 1.05% 0.37% 1.79%

35 100 35 170

$75,567 $280 $352,654 $46,083 $53,602 $118,569 $8,143 $90,015 $796,466

T12 T12 T12 T12 T12

2.55% 0.01% 11.90% 1.55% 1.81% 4.00% 0.27% 3.04% 26.87%

214 1 999 131 152 336 23 255 2,256

$194,150 $26,475 $317,700 $52,950 $52,950 $134,190 $12,355 $91,815 $942,595

5.79% 0.79% 9.47% 1.58% 1.58% 4.00% 0.37% 2.74% 28.10%

550 75 900 150 150 380 35 260 2,670

T12

T12

TOTAL EXPENSES

$1,482,632

50.02%

4,200

$1,636,782

48.79%

4,637

NET OPERATING INCOME

$1,481,603

49.98%

4,197

$1,717,973

51.21%

4,867


Year 2

Year 3

(...Stabilized Occupancy) % of GPR

Per Unit

% of GPR

Per Unit

$3,695,119 ($73,902) $3,621,217

2.00%

10,468 (209) 10,258

$3,805,973 ($76,119) $3,729,853

2.00%

10,782 (216) 10,566

$29,815 $69,560

0.82% 1.92%

84 197

$30,709 $71,646

0.82% 1.92%

87 203

$3,690,776 ($181,061) $0 ($36,212) ($18,106) $3,455,397

5.00% 0.00% 1.00% 0.50% 91.50%

10,455 (513) 0 (103) (51) 9,789

$3,801,499 ($186,493) $0 ($37,299) ($18,649) $3,559,059

5.00% 0.00% 1.00% 0.50% 91.50%

10,769 (528) 0 (106) (53) 10,082

$132,118 $0 $132,118 $117,020

% of EGI 3.82% 0.00% 3.82% 3.39%

Per Unit 374 0 374 332

$132,118 $0 $132,118 $119,360

% of EGI 3.82% 0.00% 3.82% 3.45%

Per Unit 374 0 374 338

$24,205 $11,466 $68,482 $293,281 $58,855 $456,290 $705,428

0.70% 0.33% 1.98% 8.49% 1.70% 13.21% 20.42%

69 32 194 831 167 1,293 1,998

$24,689 $11,696 $69,852 $299,147 $60,033 $465,416 $716,894

0.71% 0.34% 2.02% 8.66% 1.74% 13.47% 20.75%

70 33 198 847 170 1,318 2,031

$12,602 $36,006 $12,602 $61,210

0.36% 1.04% 0.36% 1.77%

36 102 36 173

$12,854 $36,726 $12,854 $62,434

0.37% 1.06% 0.37% 1.81%

36 104 36 177

$198,033 $27,005 $324,054 $54,009 $54,009 $138,216 $12,602 $93,652 $962,789

5.73% 0.78% 9.38% 1.56% 1.56% 4.00% 0.36% 2.71% 27.86%

561 77 918 153 153 392 36 265 2,727

$201,994 $27,545 $330,535 $55,089 $55,089 $142,362 $12,854 $95,525 $983,427

5.85% 0.80% 9.57% 1.59% 1.59% 4.00% 0.37% 2.76% 28.34%

572 78 936 156 156 392 36 271 2,774

$1,668,217

48.28%

4,726

$1,700,321

49.21%

4,817

$1,787,180

51.72%

5,063

$1,858,738

53.79%

5,266

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Z3 PORTFOLIO

01 section

CINCINNATI OVERVIEW cincinnati overview - 20 world class employment - 22

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OVERVIEW

CINCINNATI, OH The steady and stable nature of the Cincinnati apartment market was undoubtfully a benefit through 2020. The MSA saw a 2.7% annual increase in effective asking rents on new leases which matched the market’s norm for the 2010s decade. This growth put Cincinnati at #14 amongst the 50 largest markets for rent growth in 2020. Although occupancy was down 0.3 points from the prior year’s rate, the 4th quarter 2020 occupancy rate (96.4%) ranked #11 among the top 50 markets and #3 regionally. Only Q1 2020 saw net move-outs, although that’s typically the case in the local market due to seasonal demand patterns, the three subsequent quarters saw huge demand and absorption totaled 1,563 units. That is 38% above the 20-year norm for annual absorption. During the peak of the pandemic challenges the job market declined 4.6%, this ranked Cincinnati 3rd best among the Midwest and was significantly better than the national average of 5.8%.

DEMOGRAPHICS Population: 2,190,000 Median age: 38 MSA median HHI: $62,743 1.77% 1 - year growth

MSA median home value: $173,500 4.83% 1 - year growth 20

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Total units in MSA: 162,761 2020 deliveries: 2,231

Average occupany: 96.4%

occuany growth: -.03% Average rent in 2020: $1,022 rent growth: 2.7%


ECONOMIC OVERVIEW Prior to the pandemic, Cincinnati’s economy grew at a moderate rate – averaging an estimated growth pace of 2.1% annually in the five years ending Q1 2020. However, the economy contracted 2.4% in 2020. By November of 2020 the pandemic induced the loss of 51,200 jobs putting the employment rate at 4.8%, below the national average of 6.4%. Cincinnati has experienced less severe economic impacts compared to other cities, this fact is credited to the divers and stable employers that call Cincinnati home. There are eight fortune 500 companies headquartered in Cincinnati: Kroger, Procter & Gamble, Fifth Third Bancorp, American Financial Group, Cincinnati Financial, Western & Southern Financial Group, Cintas & Ak Steel Holding. In addition to the nationally recognized powerhouse corporations, Cincinnati has placed a specific focus on programs to foster and promote entrepreneurs and start-ups. Also the city has made significant investments in facilities and infrastructure to support medical research, and other scientific innovations to attract and retain talent found at the University of Cincinnati. The Innovation Corridor by Uptown Consortium is the largest single development in Cincinnati since the Great American Ball Park and will be a state-of-the-art science and research hub next to UC.

DEMOGRAPHIC OVERVIEW Population growth in Cincinnati remains modest, as the metro’s population expanded just 2.5% from 2014-2019, below the U.S. average of 2.9%. During that period the majority of Cincinnati’s growth came from the 55+ age segment which grew 11.5%. The 20-to 34-year-old segment grew modestly over the five-year period increasing 2.1% which was above the national average of 1.6%. A very strong aspect to Cincinnati’s population is the level of education amongst the working age population with 37% of that segment having a bachelor’s degree or higher compared to the national average of 33.1%. The modest population growth coupled with a modest pipeline has maintained occupancies between 95%-97% over the last six years with the average occupancy in Q4 of 2020 being above the six year average at 96.4%. The average effective asking rents have outperformed the Midwest averages since 2011 and in 2020 the average effective rents grew by 2.7% outpacing the Midwest average of 0.8% and the national average of -1.1%.

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CINCINNATI

WORLD CLASS EMPLOYMENT

(1 of 3)

In 2017, Amazon announced that is was investing $1.49 billion to create the retail titain’s first air cargo hub for packages. The company is clearing about 920 acres at The Cincinnati/Northern Kentucky International Airport (CVG). Judge-executive Gary Moore says that it will not only be the largest building in Boone County, it will also be the largest in this party of the country. Currently, CVG is the largest cargo hub airport in the nation without the new Amazon Hub. The project broke ground in May 2019 and will be completed in 2021.

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OPENING SF INVESTMENT

2021 3M $1.5B

Jobs Created

2,000+

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“We’re going to move Prime from twoday to one-day, and this hub is a big part of that.” Jeff Bezos, Founder & CEO, Amazon


ANDREW J BRADY ICON MUSIC CENTER

Unique in design and capacity, the $27 million sate-of-the-art Andrew J. Brady ICON Music Center is set to open fall 2021 and will be unparalleled to any other music venue in the region. It is being designed to fill Cincinnati’s need for a year-round, flexible music venue. The ICON’s maximum capacity is much larger than any other indoor venue of its kind in the area. MEMI is developing the venue to feature both indoor and outdoor stages and seating. The indoor venue has a capcity of 4,500 and the outdoor area has a capacity of 8,000.

OPENING Maximum Capacity Investment Events Hosted Annually

2021 12,500 $27M 170

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CINCINNATI

WORLD CLASS EMPLOYMENT 1

(2 of 3)

ICON MUSIC CENTER | 25 Race Street Unique in design and capacity, the $27 million state-of-the-art Andrew J. Brady ICON Music Center is set to open in early 2021 and will be unparalleled to any other music venue in the region. Designed to fill the community’s need for a yearround, flexible music venue, the ICON will feature a general admission main floor and two balconies and will be able to host multiple configurations for indoor concerts up to 4,500 capacity, all year long. With an adjustable capacity, the new venue will allow for intimate, connected experiences between fans, their favorite artists and their peers. The ICON’s maximum capacity is significantly larger than any other indoor performance venue of its type in the region.

27M

state of the art 24

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4,500 capacity

2021 open


2

THE FOUNDRY | 505 Vine Street 3CDC plans to move ahead with the conversion of the 3.5-story, 200,000-square-foot building that was home to a Macy’s department store. The property will be transformed into the Foundry, a mixeduse building with about 150,000 square feet of office and 35,000 square feet of retail/restaurant space. The total investment for the project is expected to be about $50.8 million.

51M 150,000 35,000 investment

office space

retail space

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CINCINNATI

WORLD CLASS EMPLOYMENT 3

(3 of 3)

INGALLS BUILDING | 6 East 4th Street SREE Hotels LLC, a Charlotte-based hotel owner and management company, purchased the building back in 2018. While the team from SSRG manage the concrete upgrades, SREE has been working on plans to convert the former office building into a 126-room, Courtyard by Marriot hotel. The firm plans to maintain the historical feeling of the lower levels while transforming them into a lounge, bar and a grab-and-go station as well as meeting rooms, public spaces and a library. The rest of the building will be converted into hotel rooms.

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KIMPTON HOTEL | 432 Walnut Street The boutique hotel, which is expected to include a restaurant, fitness center and rooftop bar, would employ 116 and have the capacity to serve 55,000 room nights per year, generating more than $15 million in annual revenue.

116

NEW JOBS


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Z3 PORTFOLIO WESTSIDE

02 section

westside overview - 30 westside projects - 32 eagle watch overview - 36 wyoming overview - 38 the competitive set - 40 financials - 46

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OVERVIEW

WESTSIDE The steady and stable nature of the Cincinnati apartment market was undoubtfully a benefit through 2020. The MSA saw a 2.7% annual increase in effective asking rents on new leases which matched the market’s norm for the 2010s decade. This growth put Cincinnati at #14 amongst the 50 largest markets for rent growth in 2020. Although occupancy was down 0.3 points from the prior year’s rate, the 4th quarter 2020 occupancy rate (96.4%) ranked #11 among the top 50 markets and #3 regionally. Only Q1 2020 saw net move-outs, although that’s typically the case in the local market due to seasonal demand patterns, the three subsequent quarters saw huge demand and absorption totaled 1,563 units. That is 38% above the 20-year norm for annual absorption. During the peak of the pandemic challenges the job market declined 4.6%, this ranked Cincinnati 3rd best among the Midwest and was significantly better than the national average of 5.8%.

DEMOGRAPHICS Population: 24,893 Median age: 35 MSA median HHI: $48,432 MSA median home value: $117,650

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Total units in MSA: 11,736 Average occupany: 89% Average rent in 2020: $900


ECONOMIC OVERVIEW Prior to the pandemic, Cincinnati’s economy grew at a moderate rate – averaging an estimated growth pace of 2.1% annually in the five years ending Q1 2020. However, the economy contracted 2.4% in 2020. By November of 2020 the pandemic induced the loss of 51,200 jobs putting the employment rate at 4.8%, below the national average of 6.4%. Cincinnati has experienced less severe economic impacts compared to other cities, this fact is credited to the divers and stable employers that call Cincinnati home. There are eight fortune 500 companies headquartered in Cincinnati: Kroger, Procter & Gamble, Fifth Third Bancorp, American Financial Group, Cincinnati Financial, Western & Southern Financial Group, Cintas & Ak Steel Holding.

SNAPSHOT

8 2%

Fortune 500 Companies Cincinnati Growth Pace

DEMOGRAPHIC OVERVIEW Population growth in Cincinnati remains modest, as the metro’s population expanded just 2.5% from 2014-2019, below the U.S. average of 2.9%. During that period the majority of Cincinnati’s growth came from the 55+ age segment which grew 11.5%. The 20-to 34-year-old segment grew modestly over the five-year period increasing 2.1% which was above the national average of 1.6%. A very strong aspect to Cincinnati’s population is the level of education amongst the working age population with 37% of that segment having a bachelor’s degree or higher compared to the national average of 33.1%. The modest population growth coupled with a modest pipeline has maintained occupancies between 95%-97% over the last six years with the average occupancy in Q4 of 2020 being above the six year average at 96.4%. The average effective asking rents have outperformed the Midwest averages since 2011 and in 2020 the average effective rents grew by 2.7% outpacing the Midwest average of 0.8% and the national average of -1.1%.

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LOCAL OVERVIEW

WESTSIDE

LICK RUN PROJECT

$110

Million Project

The Lick Run Water Way is a $110 million project spanning nearly 2 miles between Queen City Ave and Westwood Ave. The project will more efficiently manage storm water runoff and provides the community with recreational parks and green space. The project not only better addresses stormwater run off, but also beautifies the nearly 2 mile strip lined with retail and residential properties attracting more visitors to the area. The development is the single largest public investment into north Fairmont, and has smaller like kind projects in Price Hill and Westwood. All of the projects were put in place to better manage stormwater runoff and replace dated systems with astatically pleasing and efficient solutions.

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DELHI TOWNSHIP MIXED USE PROJECT The 14 acre site commonly called the Remke site located on Delhi Pike was purchased by the Delhi Township in 2019 and has been identified as the location for the new Delhi Mixed Use Project. The multi phase development will revitalize the Delhi Pike Commercial Corridor creating a more walkable and economically diverse hub for the community. Some of the notable project aspects are a community center, co-op business spaces, market rate and affordable rental units, as well as ground floor retail with green space and safer traffic flow. The final bids and details from developers are being reviewed through the summer with the goal to have a finalized plan by the fall of 2021.

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LOCAL OVERVIEW

WESTSIDE

$250 26,000

Million Project

TQL MAJOR LEAGUE SOCCER STADIUM

Seats

FC Cincinnati and their fans finally have a stadium to match their caliber of play and enthusiasm. The stadium was completed in May 2021, can hold 26,000 spectators and cost a total of $250 million. Located in the West End neighborhood, the stadium draws tens of thousands of fans weekly from April to November in addition to the other events hosted there out side of the MLS season. Of the three location options being decided between, the West End was selected due to the numerous economic benefits that would stem from the stadium’s present.

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$16 143,000

Million Project

HISTORIC MERCY HIGH SCHOOL RENOVATION

SQFT

Cincinnati Public Schools recently received the 2021 ASHRAE Technology Award of Engineering Excellence for the renovation that converted the former all-girls Mercy High School in Westwood off Werk Rd. into Gamble Montessori High School. CPS was able to modernize the space and systems for the 100 year old historic land mark at half the cost and half the time an equivalent ground up development would have cost and taken. The renovation cost $16 million and updated roughly 143,000 square feet of space.

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EXECUTIVE SUMMARY

EAGLE WATCH IN DETAIL

1

BED | 1 BATH 16 Units 547 Avg SF $699 RENT

2

BED | 2 BATH 80 Units 888 Avg SF $799 RENT

LENDER: FANNIE MAE | LOAN CLOSE DATE: 10/30/20 LOAN TERM: 12 YEARS | LOAN BALANCE: $3,861,000 INTEREST RATE: 3.40% | REMAINING IO PERIOD: 50 (MONTHS)

79,792 SF 1971 YEAR BUILT 831 AVERAGE UNIT SIZE $782 AVERAGE RENT 95% OCCUPANCY 36

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INVESTMENT HIGHLIGHTS Marcus & Millichap is pleased to present Eagle Watch and Wyoming Crossing, each consisting of 96 units of apartment living located in Western Cincinnati only two minutes from one another and ten minutes from downtown teeming with top notch employment. Located in the submarket of Westwood, these properties provide a very favorable unit mix of two-bedroom layouts and competitive rental rates in a city full of strong market fundamentals.

Strong Demand for Housing: • Current ownership has taken advantage of constrained housing need from the city’s section 8 program, leading to a higher-than-average market rent across the property. This is a government funded program which gives new ownership comfort in not only strong rental rates, but strong collections as well. There is a decreasing supply and increasing demand for section 8 living in Cincinnati and that spread only continues to grow year over year, producing higher than market rents for these types of assets

Favorable Unit Mix: • Both assets provide a favorable unit mix boasting 85% of the units being two-bedroom layouts increasing the GPR opportunity for incoming investors.

City Investments into the submarket: • The City of Cincinnati’s targeted public investment in the area has drastically increased following the Lick run project which has already begun to move a tremendous volume of money and activity into the local submarket. Upon completion we expect to see an increase in tenant move-ins in an already high occupancy market leading to continued rental growth.

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EXECUTIVE SUMMARY

WYOMING CROSSING IN DETAIL

1

BED | 1 BATH 12 Units 716 Avg SF $699 RENT

2

BED | 1 BATH 84 Units 850 Avg SF $802 RENT

LENDER: FANNIE MAE | LOAN CLOSE DATE: 10/31/20 LOAN TERM: 10 YEARS | LOAN BALANCE: $4,446,000 INTEREST RATE: 3.26% | REMAINING IO PERIOD: 50 (MONTHS)

79,992 SF1967YEAR BUILT 833 AVERAGE UNIT SIZE $789 AVERAGE RENT 92% OCCUPANCY 38

ADG MULTIFAMILY


INVESTMENT HIGHLIGHTS Marcus & Millichap is pleased to present Eagle Watch and Wyoming Crossing, each consisting of 96 units of apartment living located in Western Cincinnati only two minutes from one another and ten minutes from downtown teeming with top notch employment. Located in the submarket of Westwood, these properties provide a very favorable unit mix of two-bedroom layouts and competitive rental rates in a city full of strong market fundamentals.

Strong Demand for Housing: • Current ownership has taken advantage of constrained housing need from the city’s section 8 program, leading to a higher-than-average market rent across the property. This is a government funded program which gives new ownership comfort in not only strong rental rates, but strong collections as well. There is a decreasing supply and increasing demand for section 8 living in Cincinnati and that spread only continues to grow year over year, producing higher than market rents for these types of assets.

Favorable Unit Mix: • Both assets provide a favorable unit mix boasting 85% of the units being two-bedroom layouts increasing the GPR opportunity for incoming investors.

City Investments into the submarket: • The City of Cincinnati’s targeted public investment in the area has drastically increased following the Lick run project which has already begun to move a tremendous volume of money and activity into the local submarket. Upon completion we expect to see an increase in tenant move-ins in an already high occupancy market leading to continued rental growth. ADG MULTIFAMILY

39


EAGLE & WYOMING RENT MATRIX

Property Name Lafeuille Wyoming Crossing Villa Hills Eagle Watch Rapid Run 40

ADG MULTIFAMILY

Year Built # Units 1974 207 1967 96 1979 140 1971 96 1967 72

Avg SF 859 805 755 717.5 825

Avg Rent/ Avg Rent SF $827 $0.96 $775 $0.96 $764 $1.01 $749 $1.04 $743 $0.90

Property Name Lisa Ridge Vantage Point Aspen Village Terrace Woods

Avg Rent/ Year Built # Units Avg SF Avg Rent SF 1970 216 692 $730 $1.05 1972 775 860 $725 $0.84 1965 922 658 $703 $1.07 1965 54 718 $648 $0.90


COMPETITIVE SET

EAGLE & WYOMING

1868 Sunset Avenue, Cincinnati, OH EAGLE PROPERTY SUMMARY

96

UNITS

1971

YEAR BUILT

UNIT MIX & RENT SCHEDULE UNIT TYPE

# OF UNITS

Avg. SF

Avg. RENT

RENT PER SQFT

1x1

16

547

$646

$1.18

2x2

80

888

$767

$0.86

1905 Wyoming Avenue, Cincinnati, OH WYOMING PROPERTY SUMMARY

96

UNITS

1976

YEAR BUILT

UNIT MIX & RENT SCHEDULE UNIT TYPE

# OF UNITS

Avg. SF

Avg. RENT

RENT PER SQFT

1x1

12

716

$618

$0.86

2x1

84

850

$772

$0.91

ADG MULTIFAMILY

41


COMPETITIVE SET

VILLA HILLS

3775 Westmont Drive, Cincinnati, OH

PROPERTY SUMMARY

140

UNITS

1970

YEAR BUILT

UNIT MIX & RENT SCHEDULE UNIT TYPE

RENT

SF

RENT PER SQFT

1x1

$725

700

$1.04

2x1

$825

785

$1.05

AMENITIES UNIT FEATURES laundry facilties controlled access playground

hardwood floors

Comparables Rent Analysis

fireplace 1 Bed

balcony/patio

$600-$827

LOW

HIGH HIGH

2 Bed LOW

ADG MULTIFAMILY

COMP

$735-$976 HIGH HIGH

42

SUBJECT

SUBJECT COMP


ADG MULTIFAMILY

43


COMPETITIVE SET

LISA RIDGE

2496 Queen City Ave, Cincinnati, OH

PROPERTY SUMMARY

216

UNITS

1970

YEAR BUILT

UNIT MIX & RENT SCHEDULE UNIT TYPE

RENT

SF

RENT PER SQFT

1x1

$705

545

$1.29

2x1

$800

705

$1.13

AMENITIES UNIT FEATURES pool

heat paid

laundry facility

balconies

parking close to i-75

Comparables Rent Analysis 1 Bed

updated apts available

$600-$827

LOW

HIGH HIGH

2 Bed LOW

ADG MULTIFAMILY

COMP

$735-$976 HIGH HIGH

44

SUBJECT

SUBJECT COMP


ADG MULTIFAMILY

45


EXECUTIVE SUMMARY

EAGLE FINANCIAL BREAKDOWN

1

BEDROOM 16 Units 8,752 SF

46

ADG MULTIFAMILY

2

BEDROOM 80 Units 71,040 SF


EXECUTIVE SUMMARY

UNIT MIX SUMMARY

PROJECTED

MARKET

AVERAGE EFFECTIVE

Rentable

Total

Units

SF

SF

One Bedroom

16 Units

547 SF

8,752 SF

$646.33

$1.18

$10,341

$699.00

$1.28 SF

$11,184

$725.00

$1.33 SF

$11,600

Two Bedroom

80 Units

888 SF

71,040 SF

$767.65

$0.86

$61,412

$799.00

$0.90 SF

$63,920

$825.00

$0.93 SF

$66,000

Totals / Wtd. Averages

96 Units

831 SF

79,792 SF

$747.43

$0.90 SF

$71,753

$782.33

$0.94 SF

$75,104

$808.33

$0.97 SF

$77,600

Unit Type

Total Rent Rent/Unit Rent/SF

Potential

Total Rent Rent/Unit Rent/SF

Potential

Total Rent Rent/Unit Rent/SF

Potential

Summary

ADG MULTIFAMILY

47


Year 1

(Rent Roll/T# Income; Adjusted Trailing Expenses)

INCOME

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

$901,248 ($58,014) $843,234

(Recapture LTL, Stabilized Occupancy and Other Income, Normalized Expenses, Start Reno)

% of GPR

Per Unit

% of GPR

Per Unit

6.44%

9,388 (604) 8,784

$931,200 ($37,248) $893,952

4.00%

9,700 (388) 9,312

T12

1.01% 2.33%

88 205

$8,772 $20,322

0.98% 2.27%

91 212

T12 T12 T12

7.52% 1.91% 0.74% 83.40%

8,989 (660) (168) (65) 8,096

$914,274 ($44,698) ($13,409) $0 $856,167

5.00% 1.50% 0.00% 89.50%

9,524 (466) (140) 0 8,918

% of EGI 3.10% 0.00% 3.10% 4.65%

Per Unit 251 0 251 376

$24,103 $0 $24,103 $28,800

% of EGI 2.82% 0.00% 2.82% 3.36%

Per Unit 251 0 251 300

1.12% 0.23% 2.98% 11.30% 1.15% 16.78% 24.53%

90 19 241 915 93 1,359 1,986

$8,844 $1,827 $23,645 $89,596 $9,134 $133,047 $185,950

1.03% 0.21% 2.76% 10.46% 1.07% 15.54% 21.72%

92 19 246 933 95 1,386 1,937

RR T12

Other Income Laundry Income Total Other Income GROSS POTENTIAL INCOME Physical Vacancy Bad Debt Concessions Allowance EFFECTIVE GROSS INCOME

EXPENSES

FINANCIAL BREAKDOWN 48

Current

$8,490 $19,668 $862,902 ($63,388) ($16,102) ($6,212) $777,201

Non-Controllable Real Estate Taxes

$24,103 $0 $24,103 $36,135

Auditor

$8,671 $1,791 $23,182 $87,840 $8,955 $130,438 $190,676

T12 T12 T12 T12 T12

T12 T12 T12

Total Controllable

$6,326 $6,360 $4,073 $16,760 $10,209 $71 $78,382 $9,982 $11,051 $31,088 $3,280 $24,480 $185,303

0.81% 0.82% 0.52% 2.16% T12 1.31% T12 0.01% T12 10.09% T12 1.28% T12 1.42% Normalized 4.00% T12 0.42% T12 3.15% 23.84%

66 66 42 175 106 1 816 104 115 324 34 255 1,930

$3,360 $9,600 $3,360 $18,720 $52,800 $7,200 $86,400 $14,400 $14,400 $42,808 $3,360 $24,970 $265,058

0.39% 1.12% 0.39% 2.19% 6.17% 0.84% 10.09% 1.68% 1.68% 5.00% 0.39% 2.92% 30.96%

35 100 35 195 550 75 900 150 150 446 35 260 2,761

TOTAL EXPENSES

$375,978

48.38%

3,916

$451,008

52.68%

4,698

NET OPERATING INCOME

$401,223

51.62%

4,179

$405,159

47.32%

4,220

2019 Taxes Paid Adjustment for Sale Total Real Estate Taxes Insurance

T12

Utilities Electric Electric Vacant Gas Water & Sewage Trash Removal Total Utilities Total Non-Controllable Controllable Contract Services Snow Removal Landscaping/Grounds Pest Control Total Contract Services Repairs & Maintenance Marketing & Promotion On-Site Payroll Payroll Taxes & Benefits General & Administrative Management Fee Telephone & Cable Replacement & Reserves

ADG MULTIFAMILY


Year 2

Year 3

(...Stabilized Occupancy, Finish Reno on Remaining Units)

(Projected Rent Increase after Stabilization, Reno)

% of GPR

Per Unit

% of GPR

Per Unit

$959,136 ($19,183) $939,953

2.00%

9,991 (200) 9,791

$987,910 ($19,758) $968,152

2.00%

10,291 (206) 10,085

$9,036 $20,932

0.96% 2.23%

94 218

$9,307 $21,560

0.96% 2.23%

97 225

$960,885 ($46,998) ($9,400) $0 $904,488

5.00% 1.00% 0.00% 92.00%

10,009 (490) (98) 0 9,422

$989,712 ($48,408) ($9,682) $0 $931,622

5.00% 1.00% 0.00% 92.00%

10,309 (504) (101) 0 9,704

$24,103 $0 $24,103 $29,376

% of EGI 2.66% 0.00% 2.66% 3.25%

Per Unit 251 0 251 306

$24,103 $0 $24,103 $29,964

% of EGI 2.66% 0.00% 2.66% 3.31%

Per Unit 251 0 251 312

$9,021 $1,863 $24,118 $91,388 $9,317 $135,708 $189,187

1.00% 0.21% 2.67% 10.10% 1.03% 15.00% 20.92%

94 19 251 952 97 1,414 1,971

$9,201 $1,901 $24,601 $93,216 $9,503 $138,422 $192,489

1.02% 0.21% 2.72% 10.31% 1.05% 15.30% 21.28%

96 20 256 971 99 1,442 2,005

$3,427 $9,792 $3,427 $19,094 $53,856 $7,344 $88,128 $14,688 $14,688 $45,224 $3,427 $25,469 $271,919

0.38% 1.08% 0.38% 2.11% 5.95% 0.81% 9.74% 1.62% 1.62% 5.00% 0.38% 2.82% 30.06%

36 102 36 199 561 77 918 153 153 471 36 265 2,832

$3,496 $9,988 $3,496 $19,476 $54,933 $7,491 $89,891 $14,982 $14,982 $46,581 $3,496 $25,978 $277,810

0.39% 1.10% 0.39% 2.15% 6.07% 0.83% 9.94% 1.66% 1.66% 5.00% 0.39% 2.87% 30.56%

36 104 36 203 572 78 936 156 156 471 36 271 2,880

$461,106

50.98%

4,803

$470,298

52.00%

4,899

$443,382

49.02%

4,619

$461,324

51.00%

4,805

ADG MULTIFAMILY

49


EXECUTIVE SUMMARY

WYOMING FINANCIAL BREAKDOWN

1

BED | 1 BATH 12 Units 8,592 SF

50

ADG MULTIFAMILY

2

BED | 1 BATH 84 Units 71,400 SF


EXECUTIVE SUMMARY UNIT MIX SUMMARY

PROJECTED

MARKET

AVERAGE EFFECTIVE

Rentable

Total

Units

SF

SF

One Bedroom

12 Units

716 SF

8,592 SF

$618.33

$0.86

$7,420

$699.00

$0.98 SF

$8,388

$725.00

$1.01 SF

$8,700

Two Bedroom

84 Units

850 SF

71,400 SF

$772.41

$0.91

$64,883

$802.71

$0.94 SF

$67,428

$828.57

$0.97 SF

$69,600

Totals / Wtd. Averages

96 Units

833 SF

79,992 SF

$753.15

$0.90 SF

$72,303

$789.75

$0.95 SF

$75,816

$815.63

$0.98 SF

$78,300

Unit Type

Total Rent Rent/Unit Rent/SF

Potential

Total Rent Rent/Unit Rent/SF

Potential

Total Rent Rent/Unit Rent/SF

Potential

Summary

ADG MULTIFAMILY

51


INCOME

Year 1

(Rent Roll/T# Income; Adjusted Trailing Expenses)

(Recapture LTL, Stabilized Occupancy and Other Income, Normalized Expenses, Start Reno)

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

% of GPR

Per Unit

% of GPR

Per Unit

5.13%

9,477 (486) 8,991

$939,600 ($37,584) $902,016

4.00%

9,788 (392) 9,396

$11,288 $8,735 $20,539

1.31% 1.01% 2.38%

118 91 214

$11,658 $9,021 $21,211

1.29% 1.00% 2.35%

121 94 221

$883,647 ($74,854) ($25,345) ($16,328) $767,120

8.67% 2.94% 1.89% 81.37%

9,205 (780) (264) (170) 7,991

$923,227 ($45,101) ($13,530) ($4,510) $860,086

5.00% 1.50% 0.50% 89.00%

9,617 (470) (141) (47) 8,959

% of EGI 4.52% 0.00% 4.52% 4.37%

Per Unit 361 0 361 349

$34,699 $0 $34,699 $33,600

% of EGI 4.03% 0.00% 4.03% 3.91%

Per Unit 361 0 361 350

$909,792 ($46,684) $863,108

RR T12 T12

Other Income Laundry Income Collection Recovery Income Total Other Income GROSS POTENTIAL INCOME Physical Vacancy Bad Debt Concessions Allowance EFFECTIVE GROSS INCOME

EXPENSES

FINANCIAL BREAKDOWN 52

Current

Non-Controllable Real Estate Taxes

$34,699 $0 $34,699 $33,544

Auditor

$6,305 $6,780 $14,080 $74,522 $12,988 $114,675 $182,918

T12 T12 T12 T12 T12

0.82% 0.88% 1.84% 9.71% 1.69% 14.95% 23.84%

66 71 147 776 135 1,195 1,905

$6,431 $6,916 $14,362 $76,012 $13,248 $116,969 $185,268

0.75% 0.80% 1.67% 8.84% 1.54% 13.60% 21.54%

67 72 150 792 138 1,218 1,930

$4,146 $6,316 $4,751 $15,213

T12 T12 T12

0.54% 0.82% 0.62% 1.98%

43 66 49 158

$3,360 $9,600 $3,360 $16,320

0.39% 1.12% 0.39% 1.90%

35 100 35 170

T12 T12 T12 T12 T12 Normalized T12 Added

Total Controllable

$32,057 $65 $70,937 $8,561 $8,966 $38,356 $2,315 $24,480 $200,950

4.18% 0.01% 9.25% 1.12% 1.17% 5.00% 0.30% 3.19% 26.20%

334 1 739 89 93 400 24 255 2,093

$52,800 $7,200 $81,600 $14,400 $14,400 $43,004 $3,360 $24,970 $258,054

6.14% 0.84% 9.49% 1.67% 1.67% 5.00% 0.39% 2.90% 30.00%

550 75 850 150 150 448 35 260 2,688

TOTAL EXPENSES

$383,868

50.04%

3,999

$443,321

51.54%

4,618

NET OPERATING INCOME

$383,252

49.96%

3,992

$416,765

48.46%

4,341

2019 Taxes Paid Adjustment for Sale Total Real Estate Taxes Insurance

T12

Utilities Electric Electric Vacant Gas Water & Sewage Trash Removal Total Utilities Total Non-Controllable Controllable Contract Services Snow Removal Landscaping/Grounds Pest Control Total Contract Services Repairs & Maintenance Marketing & Promotion On-Site Payroll Payroll Taxes & Benefits General & Administrative Management Fee Telephone & Cable Replacement & Reserves

ADG MULTIFAMILY


Year 2

Year 3

(...Stabilized Occupancy, Finish Reno on Remaining Units)

(Projected Rent Increase after Stabilization, Reno)

% of GPR

Per Unit

% of GPR

Per Unit

$967,788 ($19,356) $948,432

2.00%

10,081 (202) 9,880

$996,822 ($19,936) $976,885

2.00%

10,384 (208) 10,176

$12,007 $9,292 $21,848

1.27% 0.98% 2.30%

125 97 228

$12,368 $9,571 $22,503

1.27% 0.98% 2.30%

129 100 234

$970,280 ($47,422) ($9,484) ($4,742) $908,632

5.00% 1.00% 0.50% 91.50%

10,107 (494) (99) (49) 9,465

$999,388 ($48,844) ($9,769) ($4,884) $935,891

5.00% 1.00% 0.50% 91.50%

10,410 (509) (102) (51) 9,749

$34,699 $0 $34,699 $34,272

% of EGI 3.82% 0.00% 3.82% 3.77%

Per Unit 361 0 361 357

$34,699 $0 $34,699 $34,957

% of EGI 3.82% 0.00% 3.82% 3.85%

Per Unit 361 0 361 364

$6,560 $7,054 $14,649 $77,533 $13,513 $119,308 $188,279

0.72% 0.78% 1.61% 8.53% 1.49% 13.13% 20.72%

68 73 153 808 141 1,243 1,961

$6,691 $7,195 $14,942 $79,083 $13,783 $121,694 $191,350

0.74% 0.79% 1.64% 8.70% 1.52% 13.39% 21.06%

70 75 156 824 144 1,268 1,993

$3,427 $9,792 $3,427 $16,646

0.38% 1.08% 0.38% 1.83%

36 102 36 173

$3,496 $9,988 $3,496 $16,979

0.38% 1.10% 0.38% 1.87%

36 104 36 177

$53,856 $7,344 $83,232 $14,688 $14,688 $45,432 $3,427 $25,469 $264,782

5.93% 0.81% 9.16% 1.62% 1.62% 5.00% 0.38% 2.80% 29.14%

561 77 867 153 153 473 36 265 2,758

$54,933 $7,491 $84,897 $14,982 $14,982 $46,795 $3,496 $25,978 $270,532

6.05% 0.82% 9.34% 1.65% 1.65% 5.00% 0.38% 2.86% 29.62%

572 78 884 156 156 473 36 271 2,804

$453,061

49.86%

4,719

$461,883

50.83%

4,811

$455,571

50.14%

4,746

$474,008

52.17%

4,938

ADG MULTIFAMILY

53


54

ADG MULTIFAMILY


Z3 PORTFOLIO ROSELAWN

03 section

roselawn overview - 56 roselawn projects - 58 larose overview - 60 competitive set - 62 financials - 68 ADG MULTIFAMILY

55


LOCAL OVERVIEW

ROSELAWN

MIDPOINTE CROSSING The Port of Greater Cincinnati Development Authority has begun the development of the MidPointe Crossing mixed-use development in Cincinnati’s Bond Hill neighborhood. The project is valued at $80 million. MidPointe Crossing will be located within one mile of Interstate 75, and has the potential for up to 500,000 square feet of office and retail. The nearby intersection of Reading Road and Seymour Avenue sees more than 37,000 vehicles each day. “MidPointe Crossing is Cincinnati’s next great office and retail location,” says Laura Brunner, Port Authority president and CEO. Located within Midpointe Crossing will be the TechSolove II Buisness Park. The TechSolve II business park lies just northeast of the fully-leased, 143-acre TechSolve business park, home to Givaudan Flavors and Quest Diagnostics. The companies at TechSolve employ more than 2,000 in business, tech, and manufacturing jobs. The TechSolve II site is targeted for similar high tech manufacturing/advanced industry. With a Port Authority – City partnership leading the site development, park tenants will have access to powerful economic development tools and financing options; including incentives for job creation and energy efficiency.

56

ADG MULTIFAMILY


MERCY HEALTH CORPORATE HEADQUARTERS The first of about 1,050 Mercy Health employees moved into the nonprofit’s new $71 million headquarters in Bond Hill in 2018. Mercy signed a 15-year lease on the building with Verus Partners. Mercy Health is the largest nonprofit healthcare system in Ohio, Mercy Health has a mission to serve the entire community, especially the poor and underserved. With five hospitals, as well as more than 180 doctor’s offices, clinics and care locations throughout Greater Cincinnati, we work to ensure that you have easy access to safe, effective, timely and cost-efficient care. The new HQ, which is off Reading Road and overlooks the Norwood Lateral, will also feature several treadmill desks on each floor, and there’s a walking path on the 25-acre campus that is nearly a mile long.

new facility

at the kickoff

VILLAGES AT DAYBREAK Developed in 2011, this quaint community features nearly 200 homes. Villages of Daybreak offers an exclusive collection of new home floor plans that are perfect for an urban lifestyle. The development was strategically positioned to support an urban, walkable community. With homes ranging from $210,300-$273,000 buyers can enjoy a 10-year tax abatement with the purchase of a new home at Villages of Daybreak.

ADG MULTIFAMILY

57


LOCAL OVERVIEW

ROSELAWN

The BH+R Plan, developed through engagement with the residents of Bond Hill and Roselawn by the Community Building Institute at Xavier University, was approved by the community councils of both neighborhoods and approved by Cincinnati City Council in 2016. The Plan has guided The Port’s commercial and industrial redevelopment initiatives in both communities. The BH+R Plan called for a focus on creating jobs and eliminating blighted properties along commercial corridors in Roselawn. On March 28, 2018, a groundbreaking was held for the Roselawn Senior Apartments on a formerly blighted commercial property and abandoned building at 1811 Losantiville. The new $11,000,000, 50-unit project incorporates community space on the ground level and is expected to open in 2019. The Port led the site development.

58

ADG MULTIFAMILY


A – Roselawn Business District | Reading and Section | Commercial Development The Port acquired a site at the Northeast corner of Reading and Section in 2018. Environmental remediation is underway to position this key site, located at the gateway to Roselawn, for redevelopment. B – TechSolve II | Business Park | Commercial and Light Manufacturing Development Formerly blighted and underutilized shopping center occupied the site. Today, only one small parcel remains available of the 13-acre park. Jet Machine, a supplier of armor components and assemblies for the military/defense, aerospace and oil and gas sectors, completed construction and opened a new $5MM manufacturing facility; creating 41 new jobs in Roselawn in 2018. The company’s expansion builds on its two additional facilities in Bond Hill, where 118 jobs were retained, and aligns with The Port’s goal of bringing new jobs to focus neighborhoods in conjunction with residential and commercial revitalization efforts. A new 26,000 SF spec industrial warehouse facility is complete and occupied, and PACE financing has brought new life to an existing 25,000 SF facility. C – 1682 Seymour TechSolve II | Public Finance Redevelopment of 25,000 SF advanced manufacturing building including energy efficiency upgrades. Energy updates financed through Property Assessed Clean Energy (PACE). D – Roselawn Senior Apartments | 1811 Losantiville | Neighborhood Revitalization Property acquired through donation, and The Port removed vacant, blighted commercial structure on the site to ready for new development – Sold in April 2016 to developer building Roselawn Senior Apartments, a $11MM LEED project with 50 units.

ADG MULTIFAMILY

59


EXECUTIVE SUMMARY

LAROSE

1

BED | 1 BATH 33 Units 561 Avg SF $634 RENT

2

BED | 1 BATH 80 Units 986 Avg SF $828 RENT

3

BED | 1 BATH 48 Units 1,134 Avg SF $980 RENT

LENDER: FANNIE MAE | LOAN CLOSE DATE: 2/27/18 LOAN TERM: 15 YEARS | LOAN BALANCE: $6,900,000 INTEREST RATE: 5.22% | REMAINING IO PERIOD: 0 (MONTHS)

151,818 SF1949YEAR BUILT 943 AVERAGE UNIT SIZE $834 AVERAGE RENT 99% OCCUPANCY 60

ADG MULTIFAMILY


INVESTMENT HIGHLIGHTS Marcus & Millichap is pleased to present Larose, 161 units of apartment living located in Northcentral Cincinnati, 10 minutes outside of Cincinnati’s hottest growing markets, Oakley, Pleasant Ridge, and Hyde Park. Located in the submarket of Roselawn, this property provides an investor the opportunity to acquire a unique asset in the path of redevelopment.

Convenient Location: Larose is located on a corridor of infrastructure that continues to grow both North and East from downtown Cincinnati. Many of the surrounding neighborhoods have already gone through a transitional phase and seen upward of 20-25% rental increases in the past 2 years. Roselawn strategically sits in that corridor prime for continued redevelopment.

Favorable Rent Versus Own Profile: Roselawn submarket offers a larger than average renter population as 70% of the residents rent versus own. There is a tremendous amount of transient renters in the neighborhood due to its access to Walnut Hills School District, one of Ohio’s top ranked public schools.

Consistent Rental Collections: Although the apartment industry faced one of its most trying years relating to collections across all asset types, LaRose boasted collections over 98% throughout all of 2020. Collections are expected to continue to stay strong, unsurprisingly as Cincinnati was ranked third best for limited job loss through the COVID-19 pandemic.

ADG MULTIFAMILY

61


LAROSE RENT MATRIX

Property Name Williamburg Colonial Ridge LaRose The Greenery Glen Meadows 62

ADG MULTIFAMILY

Year Built 1967 1963 1949 1966 1955

# Units 976 142 161 56 264

Avg SF 1262 779 856 750 715

Avg Rent $976 $918 $786 $779 $641

Avg Rent/SF $0.77 $1.18 $0.92 $1.04 $0.90


COMPETITIVE SET

LAROSE PLACE

6252 Joyce Lane, Cincinnati, OH

PROPERTY SUMMARY

161

UNITS

1949

YEAR BUILT

UNIT MIX & RENT SCHEDULE UNIT TYPE

# OF UNITS

Avg. SF

Avg. RENT

RENT PER SQFT

1x1

33

561

$614

$1.10

2x1

80

986

$796

$0.81

3x1

48

1,134

$943

$.83

ADG MULTIFAMILY

63


COMPETITIVE SET

SUMMIT EAST

1581 Summit Road, Cincinnati, OH

PROPERTY SUMMARY

140

UNITS

1972

YEAR BUILT

UNIT MIX & RENT SCHEDULE UNIT TYPE

RENT

SF

RENT PER SQFT

1x1

$575

576

$1.00

2x1.5

$678

800

$0.85

AMENITIES UNIT FEATURES pool clubhouse laundry facilities pet friendly

patio

Comparables Rent Analysis

balcony 1 Bed

extra storage

$600-$827

LOW

HIGH HIGH

2 Bed LOW

ADG MULTIFAMILY

COMP

$735-$976 HIGH HIGH

64

SUBJECT

SUBJECT COMP


ADG MULTIFAMILY

65


COMPETITIVE SET

WILLIAMSBURG OF CINCINNATI

200 W Galbraith Rd

PROPERTY SUMMARY

140

UNITS

1970

YEAR BUILT

UNIT MIX & RENT SCHEDULE UNIT TYPE

RENT

SF

RENT PER SQFT

1x1

$781

788

$0.99

2x1.5 Town

$850

975

$0.87

3x2

$1,460

1700

$0.86

AMENITIES UNIT FEATURES clubhouse pool laundry facilities pet friendly

patio

Comparables Rent Analysis

balcony 1 Bed

extra storage

$600-$827

LOW

HIGH HIGH

2 Bed LOW

ADG MULTIFAMILY

COMP

$735-$976 HIGH HIGH

66

SUBJECT

SUBJECT COMP


ADG MULTIFAMILY

67


EXECUTIVE SUMMARY

LAROSE FINANCIAL BREAKDOWN

1

BED | 1 BATH 33 Units 18,500 SF

68

ADG MULTIFAMILY

2

BED | 1 BATH 80 Units 78,910 SF

3

BED | 1 BATH 48 Units 54,408 SF


EXECUTIVE SUMMARY

UNIT MIX SUMMARY

PROJECTED

MARKET

AVERAGE EFFECTIVE

Rentable

Total

Units

SF

SF

One Bedroom

33 Units

561 SF

18,500 SF

$614.62

$1.10

$20,283

$634.09

$1.13 SF

$20,925

$675.09

$1.20 SF

$22,278

Two Bedroom

80 Units

986 SF

78,910 SF

$796.49

$0.81

$63,719

$828.75

$0.84 SF

$66,300

$876.00

$0.89 SF

$70,080

Three Bedroom

48 Units

1,134 SF

54,408 SF

$943.84

$0.83

$45,304

$980.00

$0.86 SF

$47,040

$1,056.25

$0.93 SF

$50,700

Totals / Wtd. Averages

161 Units

943 SF

151,818 SF

$803.14

$0.85 SF

$129,306

$833.94

$0.88 SF

$134,265

$888.56

$0.94 SF

$143,058

Unit Type

Total Rent Rent/Unit Rent/SF

Potential

Total Rent Rent/Unit Rent/SF

Potential

Total Rent Rent/Unit Rent/SF

Potential

Summary

ADG MULTIFAMILY

69


INCOME

Year 1 (Recapture LTL, Stabilized Occupancy and Other Income, Normalized Expenses)

GROSS POTENTIAL RENT

% of GPR

All Units at Market Rent

$1,611,180

RR

Gain (Loss) to Lease

($64,332) $1,546,848

T12

GROSS SCHEDULED RENT

Per Unit

% of GPR

Per Unit

10,007

$1,716,696

10,663

3.99%

(400) 9,608

($34,334) $1,682,362

2.00%

(213) 10,449

T12 T12 T12

0.51% 0.20% 0.18% 1.37%

49 19 17 132

$8,348 $3,228 $2,983 $22,559

0.50% 0.19% 0.18% 1.34%

52 20 19 140

T12 T12 T12 T12

4.95% 1.48% 2.23% 1.10% 86.24%

9,739 (476) (143) (215) (106) 8,800

$1,704,921 ($84,118) $0 ($33,647) $0 $1,587,156

5.00% 0.00% 2.00% 0.00% 91.00%

10,590 (522) 0 (209) 0 9,858

Per Unit 455 0 455 284

$73,316 $0 $73,316 $48,300

% of EGI 4.62% 0.00% 4.62% 3.04%

Per Unit 455 0 455 300

Other Income Bad Debt Recovery/Collection Income Discounts and Miscellaneous Late & NSF Fees Income Total Other Income GROSS POTENTIAL INCOME Physical Vacancy Employee Unit Allowance Bad Debt Concessions Allowance EFFECTIVE GROSS INCOME

EXPENSES

FINANCIAL BREAKDOWN

Current (Rent Roll/T12 Income)

$7,835 $3,030 $2,800 $21,172 $1,568,020 ($76,560) ($22,969) ($34,540) ($17,080) $1,416,871

Non-Controllable

$73,316 $0 $73,316 $45,797

Auditor

T12

% of EGI 5.17% 0.00% 5.17% 3.23%

$8,290 $2,450

T12 T12

0.59% 0.17%

51 15

$8,455 $2,499

0.53% 0.16%

53 16

$28,562 $119,531 $34,627 $193,459 $312,572

T12 T12 T12

2.02% 8.44% 2.44% 13.65% 22.06%

177 742 215 1,202 1,941

$29,133 $121,922 $35,319 $197,328 $318,944

1.84% 7.68% 2.23% 12.43% 20.10%

181 757 219 1,226 1,981

$0 $2,837 $8,521 $8,223

T12 T12 T12 T12

0.00% 0.20% 0.60% 0.58%

0 18 53 51

$4,025 $5,635 $16,100 $5,635

0.25% 0.36% 1.01% 0.36%

25 35 100 35

Real Estate Taxes 2019 Taxes Paid Adjustment for Sale Total Real Estate Taxes Insurance Utilities Electric Electric Vacant Gas Water & Sewage Trash Removal Total Utilities Total Non-Controllable Controllable Contract Services Security Expense Snow Removal Landscaping/Grounds Pest Control

Total Controllable

$19,581 $33,301 $144 $203,335 $27,540 $33,585 $56,675 $2,549 $41,055 $417,765

1.38% T12 2.35% T12 0.01% T12 14.35% T12 1.94% T12 2.37% Normalized 4.00% T12 0.18% Normalized 2.90% 29.49%

122 207 1 1,263 171 209 352 16 255 2,595

$31,395 $88,550 $12,075 $144,900 $24,150 $24,150 $63,486 $3,220 $41,876 $433,802

1.98% 5.58% 0.76% 9.13% 1.52% 1.52% 4.00% 0.20% 2.64% 27.33%

195 550 75 900 150 150 394 20 260 2,694

TOTAL EXPENSES

$730,337

51.55%

4,536

$752,746

47.43%

4,675

NET OPERATING INCOME

$686,535

48.45%

4,264

$834,410

52.57%

5,183

Total Contract Services Repairs & Maintenance Marketing & Promotion On-Site Payroll Payroll Taxes & Benefits General & Administrative Management Fee Telephone & Cable Replacement & Reserves


Year 2

Year 3

(...Stabilized Occupancy) % of GPR

$1,768,197

Per Unit

% of GPR

10,983

$1,821,243

Per Unit

11,312

($35,364) $1,732,833

2.00%

(220) 10,763

($36,425) $1,784,818

2.00%

(226) 11,086

$8,599 $3,325 $3,073 $23,236

0.50% 0.19% 0.18% 1.34%

53 21 19 144

$8,857 $3,425 $3,165 $23,933

0.50% 0.19% 0.18% 1.34%

55 21 20 149

$1,756,069 ($86,642) $0 ($17,328) $0 $1,652,099

5.00% 0.00% 1.00% 0.00% 92.00%

10,907 (538) 0 (108) 0 10,261

$1,808,751 ($89,241) $0 ($17,848) $0 $1,701,662

5.00% 0.00% 1.00% 0.00% 92.00%

11,234 (554) 0 (111) 0 10,569

$73,316 $0 $73,316 $49,266

% of EGI 4.44% 0.00% 4.44% 2.98%

Per Unit 455 0 455 306

$73,316 $0 $73,316 $50,251

% of EGI 4.44% 0.00% 4.44% 3.04%

Per Unit 455 0 455 312

$8,625 $2,549

0.52% 0.15%

54 16

$8,797 $2,600

0.53% 0.16%

55 16

$29,716 $124,360 $36,026 $201,275 $323,856

1.80% 7.53% 2.18% 12.18% 19.60%

185 772 224 1,250 2,012

$30,310 $126,847 $36,746 $205,300 $328,867

1.83% 7.68% 2.22% 12.43% 19.91%

188 788 228 1,275 2,043

$4,106 $5,748 $16,422 $5,748

0.25% 0.35% 0.99% 0.35%

26 36 102 36

$4,188 $5,863 $16,750 $5,863

0.25% 0.35% 1.01% 0.35%

26 36 104 36

$32,023 $90,321 $12,317 $147,798 $24,633 $24,633 $66,084 $3,284 $42,714 $443,806

1.94% 5.47% 0.75% 8.95% 1.49% 1.49% 4.00% 0.20% 2.59% 26.86%

199 561 77 918 153 153 410 20 265 2,757

$32,663 $92,127 $12,563 $150,754 $25,126 $25,126 $68,066 $3,350 $43,568 $453,343

1.98% 5.58% 0.76% 9.12% 1.52% 1.52% 4.00% 0.20% 2.64% 27.32%

203 572 78 936 156 156 410 21 271 2,803

$767,663

46.47%

4,768

$782,211

47.35%

4,858

$884,436

53.53%

5,493

$919,451

55.65%

5,711



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