6240 Martin Luther King Jr Blvd · 6240 Martin Luther King Jr Blvd RENT SURVEY COMPARABLES 2304...

A 18-Unit Value-Add Multifamily Investment Opportunity in Sacramento, California

6240 Martin Luther King Jr Blvd

CONFIDENTIALITY AGREEMENT

The information contained herein is strictly confidential, furnished solely for the purpose of considering the acquisition of the property described herein, and is not to be used for any other purpose or made available to any other person without the expressed written consent of ARA Newmark.

It has been obtained from the Seller and may include other sources believed to be reliable, but no representation is being made with regard to its accuracy or completeness.

Prospective investors should undertake their own investigations and reach their own conclusions without reliance upon the material contained herein. Neither the Seller nor the Agent nor any of their respective officers, agents or principals has made or will make any representations or warranties, expressed or implied, as to the accuracy or completeness of the Offering Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of the Offering Memorandum or its contents.

Analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the prospective purchaser.

The Seller and Agent expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the Property and/or terminate discussions with any entity at any time with or without notice.

The Seller shall have no legal commitment or obligations to any entity reviewing the Offering Memorandum or making an offer to purchase the Property unless and until such offer for the Property is approved by the Seller, and any conditions to the Buyer’s obligations there under have been satisfied or waived.

SACRAMENTO OFFICE980 9th Street

Suite 2500Sacramento, CA 95814

916.920.4400

SAN FRANCISCO OFFICE655 Montgomery Street

Suite 1705San Francisco, CA 94111

415.354.0777

LOS ANGELES OFFICE1875 Century Park East

Suite 1380Los Angeles, CA 90067

310.201.2060

MARC [email protected]

916.835.8844License CA: 01956176

NATE [email protected]

916.599.6523License CA: 01467941

CAMERON [email protected]

415.430.1037License CA: 02049950

6240 Martin Luther King Jr Blvd6240 Martin Luther King Jr Blvd

94

1113

TABLE OF CONTENTS

EXECUTIVE SUMMARY

PROPERTY OVERVIEW

COMPARABLE ANALYSIS

FINANCIAL ANALYSIS

REGIONAL OVERVIEW


17

4


MLK Jr BLVD

MLK Jr BLVD

MLK Jr BLVD

MLK Jr BLVD

45th AVE45th AVE45th AVE45th AVE

EXECUTIVE SUMMARY 6240 Martin Luther King Jr Blvd

5


THE OFFERINGARA Newmark, as the exclusive advisor, is pleased to present the opportunity to acquire 6240 Martin Luther King Jr Blvd, a 18-unit multifamily community located in Sacramento, CA.

PRICE$1,600,000

PRICE PER UNIT$88,889

PRICE PER SF$138

CAP RATE (MARKET) 7.5%

GRM (MARKET) 8.5

TERMS OF SALEDelivered free and clear

OFFER DATETBD

INVESTMENT SUMMARY

Address6240 Martin Luther King Jr Blvd

Sacramento, CA, 95824

County Sacramento

Year Built 1959

Total # of Units 18

Net Rentable SF* 11,560

# of Acres 0.49

Density 36.7

Total # of Buildings 2

Parking Spaces 18

Occupancy 100%

EXECUTIVE SUMMARY

UNIT MIX

UNIT TYPE # OF UNITS AVG SFIN-PLACE

RENTMARKET

RENT

1X1 14 620 $654 $850

2X1 4 720 $756 $950

TOTAL 18 11,560 $12,080 $15,700

*per tax records

6


Elverta Rd

Pfe Rd

Baseline Rd

Cirby Way

Oak Ave

Broadway14th Ave

Fruitridge Rd

47th Ave

Florin Rd

Elder Creek Rd

Gerber Rd

County Road 22

County Road 27

County Road 29

Tremont Rd

W Elverta Rd

King Rd

San Juan Rd

Riego Rd

Howsley Rd

Grant Line Rd

Bradshaw Rd

Excelsior Rd

Mace Blvd

F St

West St

Main AvedR

notr

aBLaird Rd

evA lairtsudnI

dR tnemyddiF

Watt Ave

Fulton AveHowe Ave

24th St

Power Line Rd

Folsom Blvd

Roseville

Rd

Antelope Rd

Taylor Rd

Old River Rd

Scott Rd

White Rock Rd

80

80

80

5

65

16

99113

113

70

50

80

Latrobe Rd

Jackson Rd

16

50

49

Green Valley Rd

S Shin

gle Rd

Dillard Rd

Grant Li

ne Rd

Elk Grove Blvd

Jeffer

son B

lvd

84

5

West SacramentoWest Sacramento

WOODLANDWOODLAND

DAVISDAVIS

NatomasNatomas

Florin/FruitridgeFlorin/Fruitridge

Elk GroveElk Grove

Rancho CordovaRancho Cordova

ArdenArden

Fair OaksFair Oaks

FolsomFolsom

RosevilleRoseville

DowntownDowntown

Greenhaven/Pocket

Greenhaven/Pocket

El Dorado Hills/Cameron Park


RocklinRocklin

Del PasoHeightsDel PasoHeights

CitrusHeightsCitrus

Heights

SacramentoSacramento

CarmichaelCarmichael

6240 MLK Jr BLVD

EXECUTIVE SUMMARY

7

6240 Martin Luther King Jr Blvd EXECUTIVE SUMMARY

NN

FRANKLIN BLVD

MLK Jr

BLVD

6240 MLK JrBlvd

Bowling GreenElementary School

Fern BaconMiddle School

Luther BurbankHigh School

SF SupermarketSacramento

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Massive Value-Add OpportunityThe current average in-place rent at 6240 MLK Jr Blvd is $661 while the rent comparables are achieving $850 and $950 for 1- and 2-bedroom units respectively. By renovating the interior units, a new investor can greatly increase the income and achieve favorable returns making 6240 MLK Jr Blvd a superb investment opportunity with incredible cash-flow.

Proximity to EmployersThe Executive Airport is located 3.6 miles from 6240 MLK Jr Blvd which supports numerous jobs in the area. In addition, as of January 2015, Macy’s houses its newest goods fulfillment center at the Capital Commerce Center, the former location of a Campbell’s Soup Factory. Macy’s plans to invest $10.5M in capital improvements in the center, which will provide 175 full-time equivalent jobs.

Proximity to Retail2.8 miles to Florin Rd which is a massive retail center anchored by a Walmart Supercenter, Home Depot, and Sears; and 7 miles to Arden Fair Mall, a 1.1M SF mall anchored by Sears, Macy’s, Apple, Nordstrom, and Best Buy.

Proximity to Education3.7 miles to Sacramento City College with over 26,000 students. Mendocino Palms is also just 7 miles to Cal State Sacramento with 29,000 students.

State of the Sacramento Multifamily Market“Sacramento’s rent went up 11 percent compared to the same time last year. This is significantly more than California’s rent growth of 6.5 percent over the past 12 months” - Apartment List

“This confirms what we all know and are feeling in this city – that Sacramento is hot, and there is a lot interest in growing jobs, and building a robust economy. It is a signpost and a signal that Sacramento is seen in a different light.” - Mayor Darrell Steinberg on the city hiring 24 workers to handle Sacramento’s record-setting building boom

INVESTMENT HIGHLIGHTS

EXECUTIVE SUMMARY


SPRING MEADOWSA P A R T M E N T H O M E S


9

PROPERTY OVERVIEW

MLK Jr BLVDMLK Jr BLVDMLK Jr BLVDMLK Jr BLVD

45th

AVE

45th

AVE

45th

AVE

45th

AVE


10


UTILITIESPAID BY METHOD SUPPLIED BY

ELECTRIC Tenant Direct SMUD

GAS Tenant Direct PG&E

WATER/SEWER

Owner N/A Sacramento County

TRASH Owner N/A Sacramento County

PROPERTY OVERVIEW

PROPERTY SUMMARY



County Sacramento

Year Built 1959

Total # of Units 18

Net Rentable SF 11,560

Parcel # 252-0141-043

# of Acres 0.49

Density 36.7


Open Parking 18

Parking Ratio 1:1

Framing Wood

Roof Pitched Composite Shingle

Paving Asphalt

Plumbing Galvanized

Electrical Aluminum

Heating/Cooling Gas heat wall unit, electric wall A/C

UNIT MIX


RENTMARKET

RENT

1X1 14 620 $654 $850

2X1 4 720 $756 $950

TOTAL 18 11,560 $12,080 $15,700

11

6240 Martin Luther King Jr Blvd RENT SURVEY COMPARABLES

2304 Grant St2304 Grant St, Berkeley , CA11 Units

RENT COMPARABLES

Comp # Location Unit Type Rent Notes1 2303 24th Ave 1 BR x 1 BA $850 Closer to Land Park, unrenovated unit.2 5207 Thurman Way 1 BR x 1 BA $825 Tiled flooring, granite counters, new cabinets, 600 sq ft.3 3908 43rd Ave 1 BR x 1 BA $870 Granite counters, vinyl flooring, new cabinets. 675 sq ft.4 5107 Thurman Way 1 BR x 1 BA $895 Halfplex wtith detached garage and own yard. 600 sq ft.

Comp Totals/Avgs. 1 BR x 1 BA $860Subject 6240 MLK 1 BR x 1 BA $850Comp Totals/Avgs.Subject 6240 MLK 2 BR x 1 BA $950

RENT COMPARABLES

4

7

S 1 2 3

65

8

4

1 2 3 4

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6240 Martin Luther King Jr Blvd RENT COMPARABLES MAP

6240 MLK BLVD

2303 24TH AVE

N HUNTER5207 THURMAN WAY

5107 THURMAN WAY

708 SUTTER3908 43RD AVE


NN

SacramentoCity College

William LandGolf Course

Downtown Sacramento

UC DavisMedical Center

47th AVE

FRAN

KLIN

BLV

D

MLK

Jr B

LVD

6240 MLK JrBlvd

Christian BrothersHigh School

Sacramento Executive Airport


SPRING MEADOWSA P A R T M E N T H O M E SFINANCIAL ANALYSIS 6240 Martin Luther King Jr Blvd

14


The following section provides detailed information on the operations of the subject property, including rent roll, historic operations and our pro forma underwriting.

OVERVIEW INVESTMENT SUMMARY

Price $1,600,000



County Sacramento

Year Built 1959

Total # of Units 18

Net Rentable SF 11,560

# of Acres 0.49

Density 36.7


Parking Spaces 18

Parking Ratio 1:1

Occupancy 100%

FINANCIAL ANALYSIS

UNIT MIX


RENTMARKET

RENT

1X1 14 620 $654 $850

2X1 4 720 $756 $950

TOTAL 18 11,560 $12,080 $15,700

15


RENT ROLL

FINANCIAL ANALYSIS6240 Martin Luther King Jr Blvd6240 Martin Luther King Jr Blvd, Sacramento, CA18 Units

Unit Unit Type Sq Ft* Market Rent Actual Rent Status

1 2x1 720 $950 $700 OCCUPIED2 2x1 720 $950 MANAGER3 1x1 620 $850 $695 OCCUPIED4 1x1 620 $850 $675 OCCUPIED5 1x1 620 $850 $675 OCCUPIED6 1x1 620 $850 $625 OCCUPIED7 1x1 620 $850 $645 OCCUPIED8 1x1 620 $850 $695 OCCUPIED9 1x1 620 $850 $625 OCCUPIED10 2x1 720 $950 $650 OCCUPIED11 2x1 720 $950 $725 OCCUPIED12 1x1 620 $850 $625 OCCUPIED13 1x1 620 $850 $645 OCCUPIED14 1x1 620 $850 $675 OCCUPIED15 1x1 620 $850 $625 OCCUPIED16 1x1 620 $850 $675 OCCUPIED17 1x1 620 $850 $675 OCCUPIED18 1x1 620 $850 $600 OCCUPIED

AVERAGE 642 $872 $661TOTAL 11,560 $15,700 $11,230

*In-Place Rents is based on the actual rents plus vacant units at market rents.

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UNDERWRITING

FINANCIAL ANALYSIS

6240 Martin Luther King Jr Blvd6240 Martin Luther King Jr Blvd, Sacramento, CA18 Units

ACTUAL PER UNIT PER MONTH ACTUAL PER UNIT PER MONTH

INCOME GROSS POTENTIAL RENT $146,160 % GPR $8,120 $12,180 $188,400 % GPR $10,467 $15,700Less: VACANCY LOSS ($7,308) -5.0% ($406) ($609) ($9,420) -5.0% ($523) ($785) NET RENTAL INCOME $138,852 $7,714 $11,571 $178,980 $9,943 $14,915Plus: OTHER INCOME $2,640 $147 $220 $2,640 $147 $220 TOTAL INCOME $141,492 $7,861 $11,791 $181,620 $10,090 $15,135

EXPENSESPAYROLL $3,600 $200 $300 $3,600 $200 $300

$1,800 $100 $150 $1,800 $100 $150TURNOVER $4,500 $250 $375 $4,500 $250 $375REPAIRS $4,500 $250 $375 $4,500 $250 $375UTILITIES $15,000 $833 $1,250 $15,000 $833 $1,250LANDSCAPING / GROUNDS $1,800 $100 $150 $1,800 $100 $150CONTRACT SERVICES / OTHER $2,700 $150 $225 $2,700 $150 $225TOTAL CONTROLLABLE EXPENSES $33,900 $1,883 $2,825 $33,900 $1,883 $2,825INSURANCE $4,500 $250 $375 $4,500 $250 $375REAL ESTATE TAXES $18,184 $1,010 $1,515 $18,184 $1,010 $1,515SPECIAL ASSESSMENTS $1,549 $86 $129 $1,549 $86 $129TOTAL OPERATING EXPENSES $58,133 $3,230 $4,844 $58,133 $3,230 $4,844CAPEX / RESERVES $3,600 $200 $300 $3,600 $200 $300TOTAL EXPENSES $61,733 $3,430 $5,144 $61,733 $3,430 $5,144

NOI AFTER RESERVES $79,759 $4,431 $6,647 $119,887 $6,660 $9,991

LIST PRICEPRICE PER UNITPRICE PER S.F.CAP. RATEGROSS RENT MULTIPLIER

$936,000 59% 4.75% ($59,164.05) $936,000 59% 4.75% ($59,164.05)$664,000 3.10% $20,594.95 $664,000 9.15% $60,722.95

1.35 2.03

UNDERWRITINGVALUATION

PRO FORMA - MARKET RENTS

PRO FORMA - CURRENT RENTS PRO FORMA - MARKET RENTS

ADMINISTRATIVE

VALUATION SUMMARY PRO FORMA - CURRENT RENTS

$1,600,000 $1,600,000

5.0% 7.5%10.9 8.5

$88,889 $88,889$138 $138

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6240 Martin Luther King Jr BlvdREGIONAL OVERVIEW 6240 Martin Luther King Jr Blvd

18


SACRAMENTO REGIONAL OVERVIEWLocated approximately 80 miles northeast of the San Francisco Bay Area at the foothills of the Sierra Nevada Mountains, Sacramento is the premier secondary market in the state of California. As the Capital City, Sacramento is the 25th largest metropolitan area in the United States with a total population in excess of 2.5M. The region has recently emerged as one of the strongest economies in the State of California, offering businesses lower operating costs than the Bay Area, a positive business climate, world class research and educational institutions, and a highly qualified technical workforce. In fact, Sacramento has been one of the fastest growing regions in the state, and posted strong employment numbers in 2017 (gaining nearly 12,700 jobs from a year earlier – a gain of 1.32%). Over the same period, California gained 265,000 jobs, a 1.5% increase. The Sacramento MSA has reached its lowest unemployment rate since the Great Recession after dropping 1.5% since last quarter. The Sacramento unemployment rate now stands at 3.7%, .9% below the California Preliminary U-3 Unemployment number reported by the Bureau of Labor Statistics for November 2017.

The presence of many state and federal agencies, the nation’s largest pension fund (CalPERS), and the State Capital have provided economic stability, while prominent companies like Intel, Apple and HP all have a major presence in the region and are helping revitalize the private sector. Now that regional economic strength is evident, optimism surrounding the Sacramento rental market has been strong.

REGIONAL OVERVIEW

Few cities in the US are experiencing negative rent growth these days, but the Sacramento MSA stands above them all with the highest year-over-year rent growth of 7.70%.

Sacramento features an abundance of recreational opportunities and lifestyle amenities. The region is home to the Sacramento Kings, the Sacramento Rivercats AAA Baseball Team, Folsom Lake, the American River, and numerous regional parks. Additionally, Sacramento residents are within a few hours’ drive of world-renowned ski resorts in Lake Tahoe, famous wineries in the Napa Valley, and all the lifestyle attractions the San Francisco Bay Area has to offer.

19


Elverta Rd

Pfe Rd

Baseline Rd

Cirby Way

Oak Ave

Broadway14th Ave

Fruitridge Rd

47th Ave

Florin Rd

Elder Creek Rd

Gerber Rd

County Road 22

County Road 27

County Road 29

Tremont Rd

W Elverta Rd

King Rd

San Juan Rd

Riego Rd

Howsley Rd

Grant Line Rd

Bradshaw Rd

Excelsior Rd

Mace Blvd

F St

West St

Main AvedR

notr

aBLaird Rd

evA lairtsudnI

dR tnemyddiF

Watt Ave

Fulton AveHowe Ave

24th St

Power Line Rd

Folsom Blvd

Roseville

Rd

Antelope Rd

Taylor Rd

Old River Rd

Scott Rd

White Rock Rd

80

80

80

5

65

16

99113

113

70

50

80

Latrobe Rd

Jackson Rd

16

50

49

Green Valley Rd

S Shin

gle Rd

Dillard Rd

Grant Li

ne Rd

Elk Grove Blvd

Jeffer

son B

lvd

84

5


WOODLANDWOODLAND

DAVISDAVIS

NatomasNatomas


Elk GroveElk Grove


ArdenArden

Fair OaksFair Oaks

FolsomFolsom

RosevilleRoseville

DowntownDowntown

Greenhaven/Pocket

Greenhaven/Pocket



RocklinRocklin


CitrusHeightsCitrus

Heights



INTELCORPORATION

State of California73,243 Employees

Multiple Locations

Kaiser Permanente5,421 Employees

Wells Fargo2,190 Employees

Raley’s3,289 Employees

EDS1,643 Employees

UC Davis Health System9,905 Employees

Sutter Health7,352 Employees

Health Net Inc.2,512 Employees

Intel Corp.6,000 Employees

Dignity Health6,292 Employees

PG&E2,169 Employees

Vision Service Plan Inc.2,382 Employees Franklin Templeton Investments

1,000 Employees

PRIDE Industries Inc.2,841 Employees

Hewlett-Packard Co.3,000 Employees

Aerojet1,710 Employees

DST Output1,300 Employees

Marshall Medical Center1,040 Employees

Cache Creek Casino Resort2,460 Employees

Eskaton1,054 Employees

Teichert2,500 Employees

Blue Shield of California1,705 Employees

Apple2,500 Employees

Westfield Galleria at Roseville4,000 Employees

EMPLOYER MAP

REGIONAL OVERVIEW

20


Elverta Rd

Pfe Rd

Baseline Rd

Cirby Way

Oak Ave

Broadway14th Ave

Fruitridge Rd

47th Ave

Florin Rd

Elder Creek Rd

Gerber Rd

County Road 22

County Road 27

County Road 29

Tremont Rd

W Elverta Rd

King Rd

San Juan Rd

Riego Rd

Howsley Rd

Grant Line Rd

Bradshaw Rd

Excelsior Rd

Mace Blvd

F St

West St

Main AvedR

notr

aBLaird Rd

evA lairtsudnI

dR tnemyddiF

Watt Ave

Fulton AveHowe Ave

24th St

Power Line Rd

Folsom Blvd

Roseville

Rd

Antelope Rd

Taylor Rd

Old River Rd

Scott Rd

White Rock Rd

80

80

80

5

65

16

99113

113

70

50

80

Latrobe Rd

Jackson Rd

16

50

49

Green Valley Rd

S Shin

gle Rd

Dillard Rd

Grant Li

ne Rd

Elk Grove Blvd

Jeffer

son B

lvd

84

5


WOODLANDWOODLAND

DAVISDAVIS

NatomasNatomas


Elk GroveElk Grove


ArdenArden

Fair OaksFair Oaks

FolsomFolsom

RosevilleRoseville

DowntownDowntown

Greenhaven/Pocket

Greenhaven/Pocket



RocklinRocklin


CitrusHeightsCitrus

Heights



6240 MLK Jr BLVD

TRANSPORTATION

Interstate 80 – This is the major east-west route in the area, leading west to Sacramento (and I-5) and then to San Francisco. Heading east, I-80 leads to the Sierra Nevada Mountain Range and the Reno Tahoe area.

Highway 50 – Another major east-west route, Highway 50 runs through Folsom and connects Downtown Sacramento to the El Dorado National Forest and South Lake Tahoe.

Interstate 5 – This is the major north-south route running throughout California and intersecting with Sacramento. I-5 provides easy access to downtown Sacramento.

Light Rail – 6240 MLK Jr Blvd is located just 5 minutes to the nearest Sacramento Regional Transit stop, which offers bus and light rail service to and from Sacramento seven days a week.

Sacramento International Airport – This airport serves the Northern California region with access to major cities across the U.S. and the world.

Amtrak (Capitol Corridor) – Amtrak Capitol Corridor provides daily service between the Sacramento region and the Bay Area.

REGIONAL OVERVIEW

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EXCEPTIONAL SCHOOLSSacramento has an abundance of higher education options throughout the region that meet different needs of the students. American River College and Sacramento City College are two-year institutions that offer associate degrees and serve as feeder institutions to the University of California, Davis. Both the University of California Davis and California State University Sacramento offers bachelors, masters and PhD degrees and programs in a variety of subjects. The distance from 6240 MLK Jr. Blvd and the number of students at these establishments can be seen below:

• University of California Davis (32,000 students and 19 miles)• California State University, Sacramento (23,000 students and 5 miles)• Sacramento City College (26,000 students and 4 miles)• American River College (34,502 students and 14 miles)

REGIONAL OVERVIEW

ARA NEWMARK | CONTACT INFORMATION

SACRAMENTO OFFICE980 9th Street

Suite 2500Sacramento, CA 95814

916.920.4400

SAN FRANCISCO OFFICE655 Montgomery Street

Suite 1705San Francisco, CA 94111

415.354.0777

LOS ANGELES OFFICE1875 Century Park East

Suite 1380Los Angeles, CA 90067

310.201.2060

MARC [email protected]

916.835.8844License CA: 01956176

NATE [email protected]

916.599.6523License CA: 01467941

CAMERON [email protected]

415.430.1037License CA: 02049950

6240 Martin Luther King Jr Blvd · 6240 Martin Luther King Jr Blvd RENT SURVEY COMPARABLES 2304...

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Transcript of 6240 Martin Luther King Jr Blvd · 6240 Martin Luther King Jr Blvd RENT SURVEY COMPARABLES 2304...