31 RENTAL APARTMENT UNITS 7115-25 S. EAST END AVENUE ... · 7115-25 S. East Ed Avee STABILIZED -...

31 RENTAL APARTMENT UNITS7115-25 S. EAST END AVENUE, CHICAGO, IL

VALUE-ADD OPPORTUNITY

OFFERING MEMORANDUM

ACO Commercial is pleased to offer, for sale, 7115-25 S. East End Avenue, an elegant, 31-unit courtyard apartment building located in Chicago’s South Shore Neighborhood. The property is situated steps from Starbucks Coffee at 71st and Cottage Grove, with excellent access to rail and bus transportation. South Shore has received a great deal of media attention with the announcement of the future Obama Library site, which will be located approximately 1.5 miles north of the property.

7115-25 S. East End Avenue offers investors the opportunity to acquire a well located multifamily asset, and add significant value through interior renovation. The property is professionally managed by a court appointed receiver and will be vacant at the time of closing. The property is offered on an “as-is, where-is” basis. It is currently 13% occupied.

Please contact George Toscas or Edward Bluemel at 312-638-9950 to arrange a private tour.

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EXECUTIVE SUMMARY

PROPERTY DESCRIPTION

AREA DESCRIPTION

STABILIZED - COMPARABLE SALES

REHAB PROJECTS - COMPARABLE SALES

COMPARABLE RENTS

PRO FORMA INCOME STATEMENT

CONFIDENTIALITY AGREEMENT

TA B L E O F C O N T E N T S

AGENCY DISCLOSURE: Prospective purchasers are hereby notified that ACO Commercial, Inc., through George Toscas and Edward N. Bluemel II, is acting as an agent of the seller of the property, and any information given by prospective purchasers to ACO Commercial, Inc. may be disclosed to the seller.©2017 ACO Commercial, Inc. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

THE SUBJECT IS BEING OFFERED AT $995,000 - $32,097/UNIT.

3ACO Commercial, Inc. • 2502 N. Clark Street • Suite 200 • Chicago, IL 60614O: 312-638-9950 • F: 312-546-4776 www.acocommercial.com

7115-25 S. East End Avenue

E X E C U T I V E S U M M A R Y

The offering provides investors the opportunity to acquire a solid building, in a good location with future

upside. South Shore is located approximately ten miles south of downtown Chicago.

The Property is lender-owned and will require significant renovations to achieve stabilization. While the

exterior envelope is in above-average condition, the building requires improvements to the following areas:

• Unit clean-up and trash-out

• Radiator repairs

• New kitchens

• New bathrooms

• Many new floors

• New paint throughout

• New carpet in stairwells

• New roof

UNIT MIX

Unit type # of Units

Studio 13

One Bedroom 1

Two Bedroom 17

Total 31



E X E C U T I V E S U M M A R Y C O N T I N U E D

INVESTMENTPurchase Price: $995,000Projected Net Operating Income: $160,268Projected Value at Stabilization: $1,687,033Proforma Cap Rate: 9.50%Total Number of Units: 31Price/Unit: $32,097Year Built: 1926Parking: NoneLot Size: 15,362 SF

STABILIZED FINANCINGLoan Amount: $1,180,923Down Payment: $506,110Loan Type: Proposed NewInterest Rate: 5.00%Term: 7 YearsAmortization: 25 YearsLoan to Value: 70%DSCR: 1.93x



Address: 7115-25 S. East End Avenue, Chicago, ILNumber of Units: 31

Unit Mix:Studios 131 bed/1bath 1 2bed/1bath 17

Site Size: 15,362 SFOffering Type: MultifamilyPIN Number(s): 20-25-102-007-0000Real Estate Taxes (2016): $12,610.96 Zoning: RT-4Construction: Concrete and MasonryYear Built: 1926GLA: 25,962 SFElectric: 400 AMP - Creigier Electrical

Hot Water: Mighty Therm Heater with AO Smith 200 gallon water tank

Boiler: Kewanee Heater with Gordon-Piatt Energy Group Boiler Control System

Plumbing: Copper and galvanized supply; Cast iron waste line

Windows: Updated aluminum, double-hung

P R O P E R T Y D E S C R I P T I O N

INVESTMENT HIGHLIGHTS• Solid building bones/exterior• Desirable residential location• Rents for recently leased units demonstrate a high ceiling for

renovated units

Take a 3D Property Tour7115 East End, #1 https://my.matterport.com/show/?m=mTyUUMDTYpD

7117 East End, #1 https://my.matterport.com/show/?m=JpNEQof6TzK

7121 East End, #2B https://my.matterport.com/show/?m=TaxuXAuixgj

https://my.matterport.com/show/?m=mTyUUMDTYpD

https://my.matterport.com/show/?m=JpNEQof6TzK

https://my.matterport.com/show/?m=TaxuXAuixgj



A R E A D E S C R I P T I O N

South Shore lies nestled between the South Chicago, Woodlawn, Jackson Park Highlands, Avalon Park and South Chicago communities. The neighborhood’s main attractions to residents are its close community ties and the South Shore Cultural Center. The South Shore Cultural Center features an impressive array of galleries, dance studios and public beaches. A longstanding symbol of community pride, it was the sight of President Barack Obama and First Lady Michelle’s wedding reception and was added to the National Register of Historic Places in 1975. The building also boasts a nine-hole golf course and the Paul Roberson Theatre, a 600-seat space that hosts the South Shore Opera Company. Numerous galleries, a golf course, a theatre and endless opportunities to commune with nature bring the community together and give residents a sense of community pride. The pride shows all along the tree-lined streets that feature wide lots and mature trees. The neighborhood’s most striking area is the Jackson Park Highlands. This residential pocket features a hodgepodge of architectural styles and imposing mansions, which when combined with a pit stop at nearby Rainbow Beach, make for one of the most charming neighborhood strolls in Chicago. A popular place for families that span generations, South Shore also attracts new families, young and old, along with retirees and those who seek proximity to the lake shore. For most locals, the neighborhood’s beautiful shoreline and close-knit feel more than make up for the limited shopping and quiet commercial areas. South Shore doesn’t have a boisterous nightlife and provides a quieter dining scene than many of Chicago’s abundant dining districts. However, it does feature several tasty eating options, from little cafés to a few good date-night locales. While you can drive in South Shore, public transportation makes travelling a lot easier. Since South Shore spreads out over a good-sized area, Chicago’s Transit Authority gives residents the best options for traveling around the neighborhood and beyond.



A R E A D E S C R I P T I O N C O N T I N U E D

Radius 1 Mile 3 Mile 5 MilePopulation:2022 Projection 38,754 254,548 510,445

2017 Estimate 38,901 253,595 509,870

2010 Census 39,621 248,666 506,205

White 816 28,415 57,205

Black 37,134 212,703 433,909

American Indian and Alaska Native 98 845 2,085

Asian 144 6,852 8,469

Native Hawaiian and Pacific Islander 4 45 96

Other 705 4,735 8,107

2017 Population by Hispanic Origin 827 13,383 37,976

Households:2022 Projection 16,786 105,368 194,868

2017 Estimate 16,929 105,264 195,194

2010 Census 17,641 104,673 196,493

Owner Occupied 4,723 36,745 76,360

Renter Occupied 12,206 68,520 118,834

2017 Avg Household Income $46,882 $51,781 $49,882

2017 Med Household Income $29,309 $33,067 $32,542

2017 Households by Household Inc:Income less than $25,000 7,590 43,314 80,980

Income $25,000 - $50,000 3,932 24,580 46,914

Income $50,000 - $75,000 2,432 14,878 27,463

Income $75,000 - $100,000 1,193 8,858 16,372

Income $100,000 - $125,000 672 5,244 9,589

Income $125,000 - $150,000 382 2,785 4,799

Income $150,000 - $200,000 359 2,880 4,918

Income $200,00 + 368 2,724 4,159

Source: CoStar



S TA B I L I Z E D - C O M PA R A B L E S A L E S

STABILIZED

Address 6951 S. Merrill Ave. 7331 S. Coles Ave. 7024 S. Paxton Ave. 7041 S. Merrill Ave.

Property Type Multifamily Multifamily Multifamily Multifamily

Year Built 1922 1928 1920 1921

Sale Date 8/23/17 2/10/17 12/13/16 11/22/16

Sale Price $1,925,000 $1,875,000 $1,850,000 $1,400,000

# of Units 31 37 24 21

# of Stories 4 4 3 3

Building SF 22,200 45,740 15,558 20,484

Lot SF 15,063 18,731 13,752 12,602 AVG

$/Unit $62,097 $50,676 $77,083 $66,667 $64,131

Unit Mix• 6 Studio • 9 1bed/1bath • 16 2bed/1bath

• 37 1bed/1bath N/A • 15 2bed/1bath • 6 3bed/2bath

DescriptionUnits rehabbed and property stabilized at time of sale.

Units rehabbed and property stabilized at time of sale.

Units rehabbed and property stabilized at time of sale.

Property was fully rehabbed and in excellent condition at time of sale.



R E H A B P R O J E C T S - C O M PA R A B L E S A L E S

REHABPROJECTS

Address 7110-7118 S. East End Ave. 7700 S. Jeffery Blvd. 7645-7653 S. East End Ave. 7150 S. Cornell Ave.

Property Type Multifamily Multifamily Multifamily Multifamily

Year Built 1925 1952 1927 1926

Sale Date 7/11/17 5/25/17 2/27/17 12/21/16

Sale Price $732,500 $980,000 $625,000 $430,000

# of Units 24 25 25 15

# of Stories 3 4 3 4

Building SF 17,850 19,500 18,750 6,900

Lot SF 12,502 15,000 12,637 5,449 AVG

$/Unit $30,521 $39,200 $25,000 $28,667 $30,847

Unit Mix

• 1 Studio • 13 1bed/1bath • 9 2bed/1bath • 1 3bed/1bath

• 24 1bed/1bath • 1 2bed/2bath • 25 1bed/1bath • 15 1bed/1bath

Description 40% occupied; units in need of substantial work N/A N/A Property was 88%

occupied at time of sale.



C O M PA R A B L E R E N T S

1 Bedroom / Studio

Address 7746 S. Jeffery Blvd., #1 1907 E. 72nd St., #3 1215 E. 72nd St., #3 7551 S. Kenwood Ave., #2 1830 E. 73rd St., #3 2107 E. 67th St., #105

Unit Type 1bed/1bath 1bed/1bath Studio 1bed/1bath 1bed/1bath Studio

Rented Price $998 $650 $550 $725 $625 $600

Unit SF 1,000 650 500 600 600 500 AVG Rent per SF

$/SF $1.00 $1.00 $1.10 $1.21 $1.04 $1.20 $1.09

Rented Date 8/7/17 7/1/17 6/16/17 6/6/17 12/30/16 12/1/16

2 Bedroom

Address 7047 S. Crandon Ave., #203 7147 S. Woodlawn Ave. #3 7656 S. East End Ave., #3E 7259 S. Cornell Ave., #1

Unit Type 2bed/1bath 2bed/1bath 2bed/1bath 2bed/1bath

Rented Price $900 $950 $850 $950

Unit SF 1,100 850 1,000 1,100 AVG Rent per SF

$/SF $0.82 $1.12 $0.85 $0.86 $0.93

Rented Date 7/15/17 7/1/17 6/24/16 6/7/17



Street

7115-25S.EastEndAvenue,Chicago,IL

PROFORMAINCOMESTATEMENT1Building;31Units

ProjectedUnit Unit Unit Rentper Monthly AnnualAddress Type SF Sq.Ft. TotalStudios 11 650 $1.05 $683 $90,090 1

1Bedroom 3 700 $1.05 $735 $26,460 1

2Bedroom 17 900 $0.93 $837 $170,748 1

Total 31 24,550 $0.98 $23,942 $287,298

GrossPotentialRentalIncome $23,942 $287,298Vacancy 10% $1,197 $28,730 1

EffectiveRentalIncome $22,744 $258,568

EXPENSES: %Gross $/Unit AnnualRealEstateTaxes(2016) 4.88% $407 $12,611 2

Insurance 4.80% $400 $12,400 1

Repairs&Maintenance 4.80% $400 $12,400 1

Janitorial 1.93% $161 $5,000 1

Scavenger 1.16% $97 $3,000 1

Gas 8.99% $750 $23,250 1

Water 4.50% $375 $11,625 1

Electric 0.97% $81 $2,500 1

ManagementFees 6.00% $500 $15,514 1

TotalExpenses 38.02% $3,171 $98,300NetOperatingIncome $160,268

1.ACOCommercialEstimatebasedonmarketaveragesforcomparableproperties.2.Fromcountywebsite.

P R O F O R M A I N C O M E S TAT E M E N T

• Conservative Rents of $0.98/SF have been projected

• A 10.0% vacancy/collections loss factor has been applied to the rent roll

• 38.0% expense ratio

• Resulting NOI of $160,268

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This is a confidential memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of 7115-25 S. East End Avenue, Chicago, Illinois. This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Owner or the Property, to be all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and ACO Commercial, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. Neither the Owner nor ACO Commercial, Inc., nor any of their respective directors, officers, affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents.

The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived.

By your acceptance and review of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or ACO Commercial, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or ACO Commercial, Inc.

In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner.

If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to ACO Commercial, Inc.

F O R M O R E I N F O R M AT I O N

P L E A S E C O N TA C T:

George Toscas Managing Broker312-638-9950 [email protected]

Edward N. Bluemel IIVice President312-638-9950 [email protected]

ACO Commercial, Inc.2502 N. Clark Street Suite 200Chicago, IL 60614O: 312-638-9950www.acocommercial.com

©2017 ACO Commercial, Inc. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

CONFIDENTIALITY AGREEMENT

A C O C O M M E R C I A L , I N C . | 2 5 0 2 N . C L A R K S U I T E 2 0 0 | C H I C A G O , I L 6 0 6 1 4 | 3 1 2 - 6 3 8 - 9 9 5 0

E D W A R D . B L U E M E L @ A C O C O M M E R C I A L . C O M

G E O R G E . T O S C A S @ A C O C O M M E R C I A L . C O M

31 RENTAL APARTMENT UNITS 7115-25 S. EAST END AVENUE ... · 7115-25 S. East Ed Avee STABILIZED -...

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