CLUB 7 APARTMENTS - pdf.leeazmail.compdf.leeazmail.com/pdfs/apartments/Club...

CLUB 7 APARTMENTS3030 NORTH 7TH STREET, PHOENIX, ARIZONA 85014

Presented by:

TODD [email protected]

BRYSON [email protected] BRAUN APARTMENT GROUP

219 APARTMENT HOMES

PRICE: Offers Above $19.5 Million To Be Considered

TERMS: All Cash (No Debt Assumption)

OFFER DATE: 2/21/17

UNITS: 219 (Significantly Renovated Units in 2015 & 2016)

BUILT: Two Phases, 1949 & 1952

PARCEL SIZE: ±7.3 Acres

UTILITIES: ELECTRICITY: Master Metered

WATER: Recently Replaced (2015) Hot Water System

HVAC: Individual Heating & Cooling Units for each Apartment Unit (No Chiller System) with most replaced since 2014

CLUB 7 APARTMENTS | 3030 NORTH 7TH STREET, PHOENIX, AZ

OFFERING SUMMARY:

7TH ST.3RD ST.

THOMAS RD.

PARKCENTRAL MALL

202

CENTRAL AVE.

MIDTOWN CBDAPPROX. 68,000 JOBS

TEMPEMESA

LIGHT RAIL

NORTHHIGH SCHOOL

DOWNTOWN CBDAPPROX. 95,000 JOBS

51

PROPERTY INFORMATION:

AVAILABLE FOR SALE

“WHY BUY” SUMMARY

TODD BRAUN BRYSON FRICKE Principal Associate 602.474.9550 602.912-3521 [email protected] [email protected]

L:\TVB\Club 7 Operational Opportunities.docx

OPERATIONAL OPPORTUNITIES

Stable In-place OperationsProvide immediate return and financeability

Income Collected Trending UpwardUpward with 25% increase (December 2015 vs. December 2016)

Loss to Lease Income CaptureCurrent average collected rent is $808 per month and recent leasing activity is $844 permonth with a net result of $36 per unit per month of proven Loss to Lease Capture(annual total $94,608)

Loss to RUB Income CaptureCurrent average RUB income is $44 per unit per month and recent leases provide for$101 per unit per month for a net result of $57 per unit per month (annual total $149,796)

RENTAL GROWTH POTENTIAL

Area rent comparables and projected submarket rental rates indicate that Club 7’s current rent levels have room to move up.Yardi, TenX and ASU/Pollack project rents to increase by approx. 6% in 2017.

SALES COMPARABLES

Numerous recent sales of similar communities support pricing in excess of Club 7’sminimum offering price

RECENT RENOVATION

Current ownership’s extensive renovations eliminate “heavy lifting” for new buyer.Recent significant upgrades include:

Exterior Roofs replaced Most individual HVAC units replaced Leasing office/clubhouse (Connect) Landscaping Exterior paint Pool area Clothes care center Fitness center BBQ area Exterior signage Etc., Etc., Etc.

WHY BUY?





Interior Black appliance package Cabinetry Countertops Faux wood flooring Contemporary lighting and plumbing fixtures Blinds Ceiling fans Two-tone paint Tub enclosures Etc., Etc., Etc.

LOCATION, LOCATION, LOCATION

Arguably the most compelling factor of this offering with far too many reasons to list here. The included maps tell the story nicely!




OPERATIONAL OPPORTUNITIES

Stable In-place OperationsProvide immediate return and financeability

Income Collected Trending UpwardUpward with 25% increase (December 2015 vs. December 2016)

Loss to Lease Income CaptureCurrent average collected rent is $808 per month and recent leasing activity is $844 permonth with a net result of $36 per unit per month of proven Loss to Lease Capture(annual total $94,608)

Loss to RUB Income CaptureCurrent average RUB income is $44 per unit per month and recent leases provide for$101 per unit per month for a net result of $57 per unit per month (annual total $149,796)

RENTAL GROWTH POTENTIAL

Area rent comparables and projected submarket rental rates indicate that Club 7’s current rent levels have room to move up.Yardi, TenX and ASU/Pollack project rents to increase by approx. 6% in 2017.

SALES COMPARABLES

Numerous recent sales of similar communities support pricing in excess of Club 7’sminimum offering price

RECENT RENOVATION

Current ownership’s extensive renovations eliminate “heavy lifting” for new buyer.Recent significant upgrades include:

Exterior Roofs replaced Most individual HVAC units replaced Leasing office/clubhouse (Connect) Landscaping Exterior paint Pool area Clothes care center Fitness center BBQ area Exterior signage Etc., Etc., Etc.

WHY BUY? (CONT.)

Club 7 is adjacent to exceptional neighbors. To the east is the front entrance of the exclusive Phoenix Country Club, which is one of the oldest and most prestigious country clubs in the State of Arizona. To the south is the historic La Hacienda neighborhood which boasts high-end, single-family residences and to the west is Cigna Healthcare Medical Group, which employs approx. 200 people.

Club 7 is located on the eastern border of the Midtown Central Business District, which is one of the high-density components of the Central Avenue Business Corridor. This area contains approx. 10 million square feet of office space and employs approx. 68,000 white collar, knowledge based and healthcare personnel. Club 7 is located within the largest concentration of healthcare providers and services. Approx. 1/2 mile to the west is St. Joseph’s Hospital and Medical Center, which is a nationally recognized, Level 1 Trauma and 586-bed facility. St. Joseph’s is also home to the Barrow Neurological Institute, which is the largest neurosurgery residency program in the United States. Additionally, Banner Good Samaritan Medical Center, which is also a Level 1 Trauma Facility, a nationally ranked hospital with 685-beds and is located approx. 1 mile to the south. Phoenix Children’s Hospital is a nationally ranked, Level 1 Trauma, 331-bed children’s general facility located approx. one mile to the east. There are 10 Level 1 Trauma facilities in Arizona and 4 are within blocks of Club 7. Employment growth is accelerating in the Midtown CBD with office space being absorbed by tech companies, law firms and continued healthcare expansion. Arizona State University’s Downtown Phoenix campus is located approx. 2 miles south of Club 7 and contains the Sandra Day O’ Connor College of Law, the Walter Cronkite School of Journalism and the College of Nursing and Health Innovation. Two of Arizona’s top private high schools, Xavier and Brophy College Prep are located a couple miles north of Club 7.

Immediate Neighborhood

Area Employment, Schools & Job Generators

Walkable Amenities & Culinary District

OSBORN RD.

7TH

ST.

PARKCENTRAL MALL

PHOENIXCOUNTRY CLUB

LA HACIENDAHISTORICAL DISTRICT

THOMAS RD.

3RD

AV

E.

3RD

ST.

CE

NT

RA

L A

VE

.M

ET

RO

LIG

HT

RA

IL

AVAILABLE FOR SALE

Club 7 is ideally located to provide tenants with walkable access to a burgeoning restaurant and night life scene. During the last five years this neighborhood has experienced significant restaurant and retail growth, primarily through adaptive reuse of existing buildings. Tenants are also attracted to this urban infill location due to Club 7’s walkable proximity to the Phoenix Metro Light Rail, which provides transportation from North Phoenix through Central Phoenix, to Sky Harbor International Airport, then through Arizona State University Tempe campus and ending in Mesa. Other popular destinations via the Light Rail are Chase Field to watch the Arizona Diamondbacks or Talking Stick Arena to catch a Phoenix Sun’s game or concert.

• Newly Renovated Clubhouse• Resort-Style Swimming Pool• Fitness/Clothes Care Center Currently

Under Construction• Free Wifi in Office & Clubhouse• Barbecue/Picnic Area• Close to downtown night life and

entertainment

• “Backyard” Recreational Area• Beautiful New Landscaping• Fire Pit with Vibrant Colored

Adirondack Chairs• Blocks away from the Light Rail• Covered Parking

COMMUNITY AMENITIES:

• Updated Black Appliances• Updated Cabinetry• Upgraded Light Package • Updated Wood Style Flooring• Updated Counter Tops• Ceiling Fans• High Speed Internet Access• Custom Window Treatments• Air Conditioning and Heat• Updated Tub Enclosures• Some Paid Utilities• Two Tone Paint • Dining Room or Eat-in Kitchen

UNIT AMENITIES:


CLUB 73030 N. 7th Street Phoenix, AZ 85014

Unit Type # of Units Size Oct, Nov, Dec Avg

Today's Market Rent

Year One Rent Δ Oct, Nov, Dev to Today's Rent

Mo. Rent per SF

Vacants/ On Notice

Studio1 20 210 547$ 580$ 609$ 6.0% 2.60$ 1Studio2 8 375 614$ 670$ 704$ 9.1% 1.64$ 0Studio3 8 440 677$ 730$ 767$ 7.8% 1.54$ 01Bed/1Bath A 21 587 812$ 835$ 877$ 2.8% 1.38$ 01Bed/1Bath B 32 618 798$ 845$ 887$ 5.9% 1.29$ 21Bed/1Bath C 33 623 803$ 825$ 866$ 2.7% 1.29$ 31Bed/1Bath D 30 640 809$ 840$ 882$ 3.8% 1.26$ 42Bed/1Bath 56 800 881$ 925$ 971$ 5.0% 1.10$ 13Bed/1.5Bath 8 1000 1,088$ 1,110$ 1,166$ 2.0% 1.09$ 13Bed/2Bath 3 1440 1,400$ 1,420$ 1,491$ 1.4% 0.97$ 0Total/Avg: 219 624 808$ 844$ 886$ 4.6% 1.38$ 12$

2,122,380$ 2,216,880$ 2,327,724$ Occupancy 95%

Gross Scheduled RentRUBSMisc. IncomeExpenses

Income SummaryValue Per Unit Percentage Value Per Unit Percentage Value Per Unit Percentage

GPRI/Economic Rent 2,122,380$ 9,691$ 2,216,880$ 10,123$ 2,327,724$ 10,629$ Less: Vacancy Loss (106,119)$ (485)$ 5.00% (110,844)$ (506)$ 5.00% (116,386)$ (531)$ 5%Less: Model/Employee units (10,612)$ (48)$ 0.50% (18,178)$ (83)$ 0.82% (18,855)$ (86)$ 0.81%Less: Loss to Lease/ Bad Debt (42,448)$ (194)$ 2.00% (33,253)$ (152)$ 1.5% (34,916)$ (159)$ 1.5%Less: Concessions (10,612)$ (48)$ 0.50% (11,084)$ (51)$ 0.50% (11,639)$ (53)$ 0.50% Net Rental Income 1,952,590$ 8,964$ 8.00% 2,043,520$ 9,331$ 7.82% 2,145,929$ 9,799$ 7.81%RUBS 115,740$ 528$ 252,157$ 1,151$ 265,888$ 1,214$ Other Income 93,839$ 428$ 93,839$ 428$ 98,531$ 450$

Total Other Income 209,579$ 957$ 345,996$ 1,580$ 364,419$ 1,664$ Effective Gross Income (EGI) 2,162,169$ 9,921$ 2,389,516$ 10,911$ 2,510,348$ 11,463$

Expense SummaryValue Per Unit Percentage Value Per Unit Percentage Value Per Unit Percentage

Expenses Before Reserves 1,046,970$ 4,781$ 48% 1,046,970$ 4,781$ 44% 1,064,760$ 4,862$ 42%

Replacement Reserves 54,750$ 250$ 3% 54,750$ 250$ 2% 54,750$ 250 2%Total Expenses 1,101,720$ 5,031$ 51% 1,101,720$ 5,031$ 46% 1,119,510$ 5,112$ 45%

Bottom LineValue Per Unit Percentage Value Per Unit Percentage Value Per Unit Percentage

Effective Gross Income 2,162,169$ 9,873$ 100% 2,389,516$ 10,911$ 100% 2,510,348$ 11,463$ 100%Expenses With Reserves 1,101,720$ 5,031$ 51% 1,101,720$ 5,031$ 46% 1,119,510$ 5,112$ 45% Net Operating Income 1,060,449$ 4,842$ 49% 1,287,796$ 5,880.35$ 54% 1,390,838$ 6,351$ 55%

Current Avg + 5% ($106.5/Unit)

Gross Annual Total

Oct, Nov, Dec Avg

Oct, Nov, Dec Avg Rent

Today's Market Rent

T-6;T-12 Utilities

Todays Market RentCurrent Avg ($101/Unit)

T-3T-6; T-12 Utilities

T-3 + 5%(T-6 + 3%;T-12 Utilities + 3%)

Year One Rent

T-3T-3

Year One 5% Rent Growth

Information contained herein has been obtained from the owner of the property or from other sources that we deem reliable. We have no reason to doubt its accuracy, but we do not guarantee it.

C:\Users\bfricke.LEEAZ\LeeEvault\BF\Club 7 (collision 1)\Club 7 Proforma colors 2 DECEMBER NUMBERS.xlsx

PROFORMA:

Loss to Lease Gain Loss to RUB Income Expected Rent Growth Expense ManagementCurrent achieved rental rates average approx. $844/Month. Oct, Nov, Dec 2016 rental collections averaged approx. $808/Month. This gain equates to an approx. $94,500 improvement in rental income. Harvesting this additional revenue is very achievable being that theese rent levels have been obtained and the complete execution is predicated on re-rent/lease renewal at current levels.

Assuming minimum pricing of $19,500,00, capturing the Loss to Lease & RUB Income gain move the entry cap rate from 5.4 to 6.6.

Assuming minimum pricing of $19,500,00, executing on the Expected Rent Growth of 5% and slight improvement via expense management, as outlined above, the cap rate after execution moves to 7.1.

Similar gains are achievable via the continuation of moving RUB monthly collections to the current average of $101/Unit. This equates to an annual gain of approx. $136,417 annually.

Forecasts for rent rate growth range from 5% to 7.4% (sources: Freddie Mac, REIS, Moody’s Analytics and Yardi Matrix). Using a conservative growth rate of 5%, the annual income increases by approx. $100,000.

Due to current ownerships extensive property and tenant base upgrades, two line items that should experience a significant reduction are marketing and administration costs. Projections call for a 10% reduction in the two line item. However overall expenses were increased by 2% to allow for inflation adjustment.

AVAILABLE FOR SALE

TODD BRAUN BRYSON FRICKE Principal Multi-Family Specialist 602.474.9550 602.912.3521 [email protected] [email protected]

PROPERTY ADDRESS Unit SQFT ASKING RENT COMMENTS

Paradise Palms 1517 E. Colter Street Phoenix, AZ 85014

Studio

330

$670

Built 1960 Utilities: Tennant Pays

The Prescott 1645 E. Thomas Road Phoenix, AZ 85016

Studio

350 370 390

$575 $599 $639

Built 1964 Utilities: Included

City 15 4728 N. 15th Street Phoenix, AZ 85014

Studio

450 $695 $850


Inhabit on 7th 5615 N. 7th Street Phoenix, AZ 85014

Studio

360 420

$777 $804


The Phoenix 3633 N 6th Ave Phoenix, AZ 85013

Studio

450 $668 Built 1961 Utilities: Tennant Pays

Fountains in the Green 3019 N. 14th Street Phoenix, AZ 85014

Studio

300 420

$600 $685


Forest Park 3800 N. 6th Avenue Phoenix, AZ 85013

Studio

490 $656 Built 1962 Utilities: Included

Club 7 3030 N 7th Street Phoenix, AZ 85014

Studio 218 283 441

$580 $670 $730

Built 1949/52 Utilities: Included

No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein and same is submitted subject to error,

omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.

STUDIO RENT COMPARABLES:


$550

$600

$650

$700

$750

$800

$850

City 15 Forest Park Fountains inthe Green

Inhabit on7th

ParadisePalms

Revival on7th

The Prescott

Studio Rent Comps

Studio Rent Club 7 Studio Average Rent

$650

$750

$850

$950

$1,050

$1,150

One Bedroom Rent Comps

One Bedroom Rents Club 7 One Bedroom Average Rent

$650

$800

$950

$1,100

$1,250

$1,400

Aura atMidtown

Bloom 24 City 15 Forest Park Fountains inthe Green

Revival onIndian School

Shorewoodat Midtown

TheHawthorne

The Prescott

Two Bedroom Rent Comps

Average of Two Bedroom Club 7 Two Bedroom Average Rent

$850.0

$950.0

$1,050.0

$1,150.0

$1,250.0

$1,350.0

$1,450.0

Aura at Midtown Forest Park Fountains in the Green Melrose on 5th The Hawthorne

Three Bedroom Rent Comps

Three Bedroom Rents Club 7 Three Bedroom Average Rent

Studio 1 - 218 Sq. Ft. Studio 3 - 441 Sq. Ft.

Studio 2 - 283 Sq. Ft.

AVAILABLE FOR SALE

1 BEDROOM RENT COMPARABLES:


PROPERTY ADDRESS UNIT SQFT ASKING RENT COMMENTS

Paradise Palms 1517 E. Colter Street Phoenix, AZ 85014

1 X 1 550 750

1,000

$774-$814 $884-$984

$1,065


The Prescott 1645 E. Thomas Road Phoenix, AZ 85016

1 X 1 400 440 575 613

$659 $699 $789 $769



1 X 1

650 $864-$1,199 Built 1969 Utilities: Included

Inhabit on 7th 5615 N. 7th Street Phoenix, AZ 85014

1 X 1 600 $897 Built 1972 Utilities: Included

The Hawthorne 3848 N. 3rd Avenue Phoenix, AZ 85013

1 X 1

752

$930


Bloom 24 2323 E. Flower Street Phoenix, AZ 85016

1 X 1

700

$860



1 X 1

490 550 567 720

$790 $835 $850 $895


Aura at Midtown 3634 N. 5th Avenue Phoenix, AZ 85013

1 X 1



1 X 1


Shorewood at Midtown 3601 N. 5th Avenue Phoenix, AZ 85013

1 X 1



1 X 1 630 654 619 642

$835 $845 $825 $840





1 Bed 1 Bath A - 630 Sq. Ft.

1 Bed 1 Bath B - 654 Sq. Ft.

1 Bed 1 Bath C - 619 Sq. Ft. 1 Bed 1 Bath D - 642 Sq. Ft.

$550

$600

$650

$700

$750

$800

$850


Inhabit on7th

ParadisePalms

Revival on7th

The Prescott

Studio Rent Comps


$650

$750

$850

$950

$1,050

$1,150



$650

$800

$950

$1,100

$1,250

$1,400

Aura atMidtown



Shorewoodat Midtown

TheHawthorne

The Prescott



$850.0

$950.0

$1,050.0

$1,150.0

$1,250.0

$1,350.0

$1,450.0




AVAILABLE FOR SALE





2 X 1 950 $1,263 Built 1969 Utilities: Included

Revival On Indian School 930 W. Indian School Road Phoenix, AZ 85013

2 X 1 980 1,088

$1,094 $1,145



2 X 2

998 1,042

$1,075 $1,160


Bloom 24 2323 E. Flower Street Phoenix, AZ 85016

2 X 2 1,100 $1,084 Built 1973 Utilities: Included

The Phoenix 3633 E. Thomas Road Phoenix, AZ 85013

2 X 2



2 x 1

2 X 2

715 1,000 950

1,000

$915 $945 $975

$1,105





2 X 1 2 X 2

800 1,040

$936 $1,065


Shorewood at Midtown 3601 N. 5th Avenue Phoenix, AZ 85013



2 X 1 760 $925 Built 1949/52 Utilities: Included




$550

$600

$650

$700

$750

$800

$850


Inhabit on7th

ParadisePalms

Revival on7th

The Prescott

Studio Rent Comps


$650

$750

$850

$950

$1,050

$1,150



$650

$800

$950

$1,100

$1,250

$1,400

Aura atMidtown



Shorewoodat Midtown

TheHawthorne

The Prescott



$850.0

$950.0

$1,050.0

$1,150.0

$1,250.0

$1,350.0

$1,450.0




2 Bedroom

AVAILABLE FOR SALE





3 X 2 1,198 $1,350 Built 1999 Utilities: Tennant Pays


3 X 2 1,245

$1,250 Built 1959 Utilities: Included


3 X 2 1,200 1,400 1,500

$1,195 $1,220 $1,220




Melrose on 5th 3611 N. 5th Avenue Phoenix, AZ 85013



3 X 1 3 X 2

902 1,440

$1,110 $1,115





$550

$600

$650

$700

$750

$800

$850


Inhabit on7th

ParadisePalms

Revival on7th

The Prescott

Studio Rent Comps


$650

$750

$850

$950

$1,050

$1,150



$650

$800

$950

$1,100

$1,250

$1,400

Aura atMidtown



Shorewoodat Midtown

TheHawthorne

The Prescott



$850.0

$950.0

$1,050.0

$1,150.0

$1,250.0

$1,350.0

$1,450.0




3 Bedroom

AVAILABLE FOR SALE

SALES COMPARABLES:

PROPERTY ADDRESS # OF UNITS SALE DATE PRICE PRICE/ UNIT PRICE/ SF COMMENTS

The Colonnade 1930 E Camelback Rd Phoenix, AZ 85016

415 10/12/16 $44,600,000 $107,000 $174.00 Built 1968 Master Metered

Solara at Mill Avenue 3730 S Mill Ave Tempe, AZ 85282


Arcadia 4127 4127 E Indian School Rd Phoenix, AZ 85018


The Nines 999 E Baseline Rd Tempe, AZ 85283

244 5/12/16 $25,130,000 $102,991 $123.45 Built 1974 Individually Metered

The Arbors 805 W Brown St Tempe, AZ 85281


The Hawthorne 3848 N 3rd Ave Phoenix, AZ 85013


Omnia McClintock 1701 E Don Carlos Ave Tempe, AZ 85281


Amber Gardens 6625 1st St Tempe, AZ 85281


Arcadia Walk 2606 N 44th Street Phoenix, AZ 85008


Jamestown 3833 N 30th St Phoenix, AZ 85016


Midtown Flats 825 W Osborn Rd Phoenix, AZ 85013`


$11

8,33

3

$10

3,65

8

$90

,912

$92

,297

$91

,145

$10

5,42

2

$88

,710

$91

,712

$92

,233

$10

8,12

1

$10

7,00

0

$12

0,87

9

$10

3,00

0

$10

2,99

1

$-

$40,000

$80,000

$120,000

$160,000

Club 7 Sale Comps

Total


$11

8,33

3

$10

3,65

8

$90

,912

$92

,297

$91

,145

$10

5,42

2

$88

,710

$91

,712

$92

,233

$10

8,12

1

$10

7,00

0

$12

0,87

9

$10

3,00

0

$10

2,99

1

$-

$40,000

$80,000

$120,000

$160,000

Club 7 Sale Comps

Total

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