Offering Memorandum · 2018. 9. 27. · Marcus & Millichap has not made any investigation, and...

THE WINDSOR214 West St • Reno, NV 89501

Offering Memorandum

1

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap andshould not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverifiedinformation 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 duediligence 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, thefuture projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's orasbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or anytenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to bereliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding thesematters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures toverify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo orname is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product,service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

THE WINDSORReno, NVACT ID Z0420058

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TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01Offering Summary

Regional Map

Aerial Photo

FINANCIAL ANALYSIS 02Rent Roll Summary

Rent Roll Detail

Operating Statement

Pricing Detail

Acquisition Financing

MARKET COMPARABLES 03Sales Comparables

Rent Comparables

MARKET OVERVIEW 04Market Analysis

Demographic Analysis

THE WINDSOR

3

THE WINDSOR

4

INVESTMENT

OVERVIEW

THE WINDSOR

#

EXECUTIVE SUMMARY

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

U-Haul 3,562

VA Sirra Nev Hlth Care Systems 3,000

Peppermill Hotel Casino 2,250

MONARCH 2,100

Circus Circus Reno Ht & Casino 2,000

St Marys Health Network 1,800

County of Washoe 1,615

Grand Sierra Resort and Casino 1,525

US Post Office 1,439

Scolaris Distribution Center 1,400

Saint Marys Regional Med Ctr 1,370

Club Cal-Neva 1,300

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2017 Estimate Pop 21,727 130,026 234,895

2010 Census Pop 20,557 121,820 220,937

2017 Estimate HH 11,049 54,463 93,620

2010 Census HH 10,407 51,480 88,815

Median HH Income $26,375 $36,622 $42,347

Per Capita Income $24,824 $23,992 $25,715

Average HH Income $43,750 $55,966 $63,467

UNIT MIX

NUMBEROF UNITS UNIT TYPE APPROX.

SQUARE FEET

23 Efficiency A 300

12 Efficiency B 300

18 Efficiency C 300

53 Total 15,900

VITAL DATA

Price $3,200,000 CURRENT YEAR 1

Down Payment 25% / $800,000 CAP Rate 6.55% 7.45%

Loan Amount $2,400,000 GRM 7.50 6.95

Loan Type Proposed New Net Operating Income $209,455 $238,466

Interest Rate / Amortization 4.75% / 30 Years Net Cash Flow After Debt Service 7.40% / $59,221 11.03% / $88,231

Price/Unit $60,377 Total Return 12.03% / $96,255 15.88% / $127,063

Price/SF $201.26

Number of Units 53

Rentable Square Feet 15,900

Year Built / Renovated 1922 / 2018

Lot Size 0.16 acre(s)

5

THE WINDSOR

#

OFFERING SUMMARY

PROPERTY OVERVIEW

Located in the heart of Downtown Reno, The Windsor is a resplendent example of old world charm and gracious

hospitality. Built in 1922, this single-building brick structure offers 52 rental units. This quaint building sits on a

0.161 acre site and provides its residents who prefer an urban lifestyle with the many amenities of the city life.

The Windsor is currently one of the few properties to offer "Downtown Living" in Reno, Nevada. The property is

the former and historic Windsor Motel which was recently renovated and brought to its current condition. The

transition came about as a need for downtown housing was realized and the opportunity captured by the current

owner. This same opportunity to claim an asset with such a prime location and living demand is now being

offered to the public. The three-story asset is one of the last remaining historical structures in downtown Reno.

This Windsor is currently performing beyond the owner's expectations, with rents exceeding those speculated

upon purchase, and a rapid stabilization period bringing the property to its current position. The asset is located

in the “Opportunity Zone,” allowing for a long-term tax advantage. Opportunity Zones are designed to spur

economic development by providing tax benefits to investors.

6

Two Laundry Rooms On-Site

Common Area Amenities

Secured Access

Units Offer Cable TV & Internet

Recently Renovated Interior

Unit Amenities

Excellent Downtown Location

Lobby & Lounge Area

6

THE WINDSOR

OFFERING SUMMARY

Downtown Living

Located in the Opportunity Zone

Recently Renovated

Highly Desirable Yield

INVESTMENT HIGHLIGHTS

The Windsor is situated near the most desired attractions in the downtown Reno vicinity. The property is minutes away from the downtown casinos, such as Harrah’s,

Club Cal Neva and Silver Legacy, as well as the Truckee River, the Midtown district and the soon-to-be "Fountain District."

The proximity of The Windsor to these locations provides an owner with stable tenancy as the demand for housing has exponentially grown in these neighborhoods. The

"Fountain District" is the coined term for the development happening along the West Fourth Street corridor. This development is held at the hands of Jeffrey Jacobs of

Jacob's Development. Jacobs is the CEO & Owner of the Gold Dust West casinos and has announced plans of spending between $500 million to $1 billion renovating

Fourth Street into an arts and entertainment district. The developer has already purchased a majority of the land, old motels and buildings along Fourth Street, as well as

the Sand's Regency Hotel & Casino for $26.5 million alone. The Fountain District is expected to bring dining, retail and entertainment experiences to the area, a highly

needed and desired revitalization.

The appeal of this investment is driven by the going in yield, free-and-clear delivery, stable operations with continual rent increases and the capture of the Loss-to-Lease.

The overall downtown market is starved for apartments living and sets the stage for this asset to maintain high demand and continuously hit market rents.

INVESTMENT OVERVIEW

7

THE WINDSOR

PROPERTY SUMMARY

OFFERING SUMMARY

PROPOSED FINANCING

First Trust Deed

Loan Amount $2,400,000

Loan Type Proposed New

Interest Rate 4.75%

Amortization 30 Years

Loan Term 7 Years

Loan to Value 75%

Debt Coverage Ratio 1.39

THE OFFERING

Property The Windsor

Price $3,200,000

Property Address 214 West St, Reno, NV

Assessor’s Parcel Number 011-032-11

SITE DESCRIPTION

Number of Units 53

Year Built/Renovated 1922/2018

Rentable Square Feet 15,900

Lot Size 0.16 acre(s)

Type of Ownership Fee Simple

8

REGIONAL MAP

THE WINDSOR

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AERIAL PHOTO

THE WINDSOR

10

Marcus & Millichap closes

more transactions than any

other brokerage firm.

12

THE WINDSOR

11

PROPERTY PHOTO

THE WINDSOR

12

FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS

THE WINDSOR

RENT ROLL SUMMARY

13

FINANCIAL ANALYSIS

THE WINDSOR

OPERATING STATEMENT

16

JMccutcheon

Rectangle

FINANCIAL ANALYSIS

THE WINDSOR

PRICING DETAIL

17

MARCUS & MILLICHAP CAPITAL CORPORATION CAPABILITIESMMCC—our fully integrated, dedicated financing arm—is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and terms.

We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of financing options.

Our dedicated, knowledgeable experts understand the challenges of financingand work tirelessly to resolve all potential issues to the benefit of our clients.

National platform operating

within the firm’s brokerage

offices

$5.63 billion total national

volume in 2017

Access to more capital sources than any other firm in the industry

Optimum financing solutions to enhance value

Our ability to enhance buyer pool by expanding finance options

Our ability to enhance seller control

• Through buyer qualification support

• Our ability to manage buyers finance expectations

• Ability to monitor and manage buyer/lender progress, insuring timely, predictable closings

• By relying on a world class set of debt/equity sources and presenting a tightly underwritten credit file

WHY MMCC?

Closed 1,707 debt and equity

financings in 2017

ACQUISITION FINANCING

THE WINDSOR

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THE WINDSOR

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MARKET

COMPARABLES

THE WINDSOR

SALES COMPARABLES MAP

20

THE WINDSOR(SUBJECT)

820 North Virginia

Mill Street Manor

Santa Maria Apartments

511 Roberts St

The Ross Manor Apartments

500 N Center Street

SALES COMPARABLES

IN ESCROW COMPARABLES

1

2

3

4

5

6

21

PROPERTY NAMETHE WINDSOR

SALES COMPARABLES

0.0

0.8

1.6

2.4

3.2

4.0

4.8

5.6

6.4

7.2

8.0

The Windsor 820 NorthVirginia

Mill StreetManor

Santa MariaApartments

The RossManor

Apartments

Average Cap Rate

SALES COMPARABLES


SALES COMPS AVG

IN ESCROW COMPS AVG

Avg: 6.61%

22


SALES COMPARABLES

Avg. $139.43

Avg. $244.85

$0.00

$30.00

$60.00

$90.00

$120.00

$150.00

$180.00

$210.00

$240.00

$270.00

$300.00


Mill StreetManor


511Roberts St

The RossManor

Apartments

500 NCenterStreet

Average Price Per Square Foot

Avg. $69,977

Avg. $79,286

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000


Mill StreetManor


511Roberts St

The RossManor

Apartments

500 NCenterStreet

Average Price Per Unit

SALES COMPARABLES


SALES COMPS AVG

IN ESCROW COMPS AVG

PROPERTY NAME

MARKETING TEAM

THE WINDSOR

SALES COMPARABLES

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SALES COMPARABLES IN ESCROW COMPARABLES

Units Unit Type

Offering Price: $3,200,000 23 Efficiency A

Price/Unit: $60,377 12 Efficiency B

Price/SF: $201.26 18 Efficiency C

CAP Rate: 6.55%

GRM: 7.50

Total No. of Units: 53

Year Built: 1922

Underwriting Criteria

Income $392,188 Expenses $182,732

NOI $209,455 Vacancy ($38,562)

THE WINDSOR214 West St, Reno, NV, 89501

1

Units Unit Type

Close Of Escrow: 8/28/2018 5 Studio 1 Bath

Days On Market: 100 5 1 Bdr 1 Bath

Sales Price: $730,000

Price/Unit: $73,000

Price/SF: $153.68

CAP Rate: 5.50%


Year Built: 1938

NOTESMarcus & Millichap represented the buyer in this transaction. Rents ranged from $425 - $695 for a mix of Studios & 1 Beds. Cap Rate based on M&M underwriting.

820 NORTH VIRGINIA820 N Virginia St, Reno, NV, 89501

Units Unit Type


Sales Price: $860,000 12 1 Bdr 1 Bath

Price/Unit: $61,429 1 2 Bdr 1 Bath

Price/SF: $108.92

CAP Rate: 6.15%


Year Built: 1964

2

NOTES810 Mill St sold for $860,000 or for $61,429 per unit. There was a 1031 Exchange on the buyer's side. The property was 86% occupied at the close of escrow. The property consisted of 12 - 1/bd - 1/ba units renting at $500-$550/mo; 1 - studio renting at $550/mo; 1 - 2/bd - 1/ba renting at $875/mo.CAP Rate based on M&M Underwriting.

MILL STREET MANOR810 Mill St, Reno, NV, 89502

NOTES

Offered free and clear.

PROPERTY NAME

MARKETING TEAM

THE WINDSOR

SALES COMPARABLES

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24


Units Unit Type


Days On Market: 32 1 1 Bdr 1 Bath

Sales Price: $1,625,000

Price/Unit: $60,185

Price/SF: $120.37

CAP Rate: 7.00%


Year Built: 1978

3

NOTESThe unit mix was confirmed as 1 - 1 bed - 1 bath and 26 studio units. This transaction is the result of the seller's original strategy when acquiring the property; to improve the site and resell.

SANTA MARIA APARTMENTS543 W 6th St, Reno, NV, 89503

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Units Unit Type

Close Of Escrow: 11/2/2017 12 1 Bdr 1 Bath

Sales Price: $1,300,000

Price/Unit: $108,333

Price/SF: $205.57


Year Built: 1939

NOTESThe buyer confirmed the price, and that this apartment was fully leased and occupied at the time of sale. The buyer plans to renovate and purchased this for value-add purposes, no Cap Rate was considered.No brokers were involved.

511 ROBERTS ST511 Roberts St, Reno, NV, 89502

Units Unit Type


Sales Price: $7,369,622 114 Studio 1 Bath

Price/Unit: $46,940 9 1 Bdr 1 Bath

Price/SF: $108.60

CAP Rate: 7.78%


Year Built: 1907

5

NOTES118 West St traded on December 22nd, 2017 for $7,369,622 or for $46,940 per unit. The 161 unit Ross Manor Apartment community was 98% occupied at the close of escrow. There was a 1031 Exchange on the buyer's side. There was a seller carry/back and deferred maintenance for the interior. The property closed escrow at a 7.78% CAP Rate.

THE ROSS MANOR APARTMENTS118 West St, Reno, NV, 89501

PROPERTY NAME

MARKETING TEAM

THE WINDSOR

SALES COMPARABLES

rentpropertyname1


rentpropertyname1


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25


Units Unit Type

In Escrow 20 Studio 1 Bath

List Price: $1,665,000 1 1 Bdr 1 Bath

Price/Unit: $79,286

Price/SF: $244.85


Year Built: 1956

6

NOTES

Property not taken to market, off-market offer.

500 N CENTER STREET500 N Center St, Reno, NV, 89501

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THE WINDSOR

RENT COMPARABLES MAP

THE WINDSOR(SUBJECT)

Santa Maria Apartments

Stone Creek Apartments

Gibson Apartments

Truckee River Terrace

130 Chism St

550 S Wells Ave

Park Willow Apartments

Mill Street Manor

4

7

8

9

11

20

12

14

15

16

17

13

18

10

4

7

8

1

2

3

5

6

26


RENT COMPARABLES

27

AVERAGE OCCUPANCY

Avg. 99.38%

0

10

20

30

40

50

60

70

80

90

100

The Windsor Santa MariaApartments

Stone CreekApartments

GibsonApartments

TruckeeRiver

Terrace

130Chism St

550 S WellsAve

Park WillowApartments

Mill StreetManor


RENT COMPARABLES

28

AVERAGE RENT - MULTIFAMILY

Avg. $687

$0

$120

$240

$360

$480

$600

$720

$840

$960

$1,080

$1,200

The Windsor Santa MariaApartments

Stone CreekApartments

GibsonApartments

TruckeeRiver

Terrace

130Chism St

550 S WellsAve

Park WillowApartments

Mill StreetManor

Efficiencies

PROPERTY NAME

MARKETING TEAM

THE WINDSOR

RENT COMPARABLES

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OCCUPANCY: 93% | YEAR BUILT: 1922

rentpropertyname1rentpropertyaddress1

Unit Type Units SF Rent Rent/SF

Efficiency A 23 300 $600 $2.00

Efficiency B 12 300 $725 $2.42

Efficiency C 18 300 $725 $2.42

Total/Avg. 53 300 $671 $2.24

THE WINDSOR214 West St, Reno, NV, 89501


1

NOTESSpecials: none offered. RUBS: no. Garage/Storage: no. Pet Policy: no pets. Tenants pay E/G. MGT pays W/S/T. Upgrades include new carpet, new appliances, new countertops, bathroom vanities, interior paint, and vinyl wood flooring in downstairs units. Rent range reflects upstairs vs downstairs units.


Studio 1 Bath 28 280 $675-$775 $2.59

Total/Avg. 28 280 $725 $2.59

SANTA MARIA APARTMENTS543 W 6th St, Reno, NV, 89503

2


NOTESSpecial: none offered. RUBS: no. Garage/Storage: no. Pet Policy: no pets. Tenants pay E/G. MGT pays W/S/T. Property just sold with plans to renovate and raise rents.


Studio 1 Bath 29 270-338 $600-$695 $2.13

1 Bdr 1 Bath 4 500 $650-$725 $1.38

Total/Avg. 33 328 $652 $1.99

STONE CREEK APARTMENTS1250 W 2nd St, Reno, NV, 89503

NOTESSpecials: none offered. RUBS: No. Garage/Storage: no. Pet Policy: no pets. Internet and cable included. Property has been fully upgraded.

PROPERTY NAME

MARKETING TEAM

THE WINDSOR

RENT COMPARABLES

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3


Studio 1 Bath 19 343 $400-$700 $1.60

1 Bdr 1 Bath 5 510 $595-$800 $1.37

Total/Avg. 24 378 $581 $1.54

NOTESSpecials: none offered. RUBS: no. Garage/Storage: no. Pet Policy: no pets. MGT pays E/G/W/S/T. Improvements include paint and carpet.

GIBSON APARTMENTS441 W 2nd St, Reno, NV, 89503


4

NOTESSpecials: none offered. RUBS: no. Garage/Storage: 18-74SF storage units $1.50/SF rent. Pet Policy: no pets. MGT pays all utilities. Range in rent based on the view (interior facing terrace or exterior facing city/mountains). Plans to repaint terrace for spring 2018. All utilities plus DirecTV and internet included in rent.


Studio 1 Bath 149 313-465 $875-$1,155 $2.61

1 Bdr 1 Bath 19 472-600 $1,155-$1,200 $2.20

1 Bdr 2 Bath 12 624 $1,155 $1.85

Total/Avg. 180 420 $1,041 $2.48

TRUCKEE RIVER TERRACE501 W 1st St, Reno, NV, 89503

5


NOTESSpecials: none offered. RUBS: Yes, based on usage. Garage/Storage: no. Pet Policy: no pets. Tenants pay E/G. MGT pays W/S/T. The property has seen significant interior and exterior upgrades.


Studio 8 380 $600 $1.58

1 Bdr 2 570 $675 $1.18

Total/Avg. 10 418 $615 $1.47

130 CHISM ST130 Chism St, Reno, NV, 89503

PROPERTY NAME

MARKETING TEAM

THE WINDSOR

RENT COMPARABLES

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6


Studio 1 Bath 5 300-600 $625-$720 $1.49

1 Bdr 1 Bath 2 600 $725 $1.21

2 Bdr 1 Bath 5 700 $895 $1.28

Total/Avg. 12 579 $774 $1.34

NOTESSpecials: none offered. RUBS: no. Garage/Storage: no. Pet Policy: $200 Deposit. Tenants pay E. MGT Pays W/S/T. Improvements: Marble countertops, hardwood flooring. New roof, plumbing, & electrical. On-site laundry.

550 S WELLS AVE550 S Wells Ave, Reno, NV, 89502


7

NOTESSpecials: none offered. RUBS: no. Garage/Storage: no. Pet Policy: no pets. Tenants pay E. MGT pays W/S/T. Improvements include W/Ds, carpet, paint, and refrigerators; on turns. Rent range for furnished units.


Studio 1 Bath 48 600-650 $725-$750 $1.18

Total/Avg. 48 625 $738 $1.18

PARK WILLOW APARTMENTS160 S Park St, Reno, NV, 89502

8


NOTESSpecials: none offered. RUBS: no. Garage/Storage: no. Pet Policy: no pets Tenants pay E/G. MGT Pays W/S/T. Improvements: None at this time.


Studio 1 Bath 1 400 $550 $1.38

1 Bdr 1 Bath 12 500 $500-$550 $1.05

2 Bdr 1 Bath 1 600 $875 $1.46

Total/Avg. 14 500 $552 $1.10

MILL STREET MANOR810 Mill St, Reno, NV, 89502

THE WINDSOR

32

MARKET

OVERVIEW

MARKET OVERVIEW

RENO-SPARKS-CARSON CITYOVERVIEW

1

Once dominated by government and gambling, the Reno-Sparks-Carson City metro has diversified into a growing high-techmanufacturing and logistics hub in western Nevada, boostingemployment opportunities. A lower cost of living and doing businessthan nearby California lures companies as well as residents. Over thenext five years, more than 40,000 people are expected to join themarket, which encompasses Washoe and Storey counties as well asCarson City. The eastern shore of Lake Tahoe is included in the metro,contributing to an active outdoor recreation segment. A diverse arrayof activities that include gambling and a variety of cultural amenitieskeep the tourism industry growing.

MARKET OVERVIEW

METRO HIGHLIGHTS

LOWER BUSINESS COSTSMore affordable costs and a business-friendly climate attract firms including Switch Data, Apple, Google and Tesla to the region.

STRONG EMPLOYMENT GAINSEmployment growth is expected to rise at a rate nearly double that of the nation over the next five years as companies move to and expand locally.

GAMING, CONVENTIONS AND TOURISMNumerous casinos, hotels, convention sites, lakes, rivers and ski resorts draw visitors and residents to the area.

THE WINDSOR

MARKET OVERVIEW

ECONOMY Revenue from gambling in Washoe County has increased annually since 2015. The economy is rapidly diversifying from a government, tourism and gaming base. A pro-

business environment and its proximity to the California border attract firms. The region is becoming an important center for distribution and industrial expansion as all

West Coast markets can be reached in one day. As an extremely low-cost alternative to industrial expansion in California, the metro draws

companies including Apple, Amazon and Jet.com to open facilities in the metro. Tesla’s battery Gigafactory is also based locally.

SHARE OF 2017 TOTAL EMPLOYMENT

MAJOR AREA EMPLOYERS

University of Nevada, Reno

Renown Regional Medical Center

Peppermill Reno

International Game Technology

Atlantis Casino Resort

Eldorado Resort Casino

Saint Mary's Regional Medical Center

Carson Tahoe Health

State of Nevada

Western Nevada College* Forecast

2

MANUFACTURING7%

OTHER SERVICES 3%21%

AND UTILITIESTRADE, TRANSPORTATION

1%INFORMATION

PROFESSIONAL ANDBUSINESS SERVICES

12%

CONSTRUCTION7%

GOVERNMENT15%

LEISURE AND HOSPITALITY17%

FINANCIAL ACTIVITIES5%

HEALTH SERVICESEDUCATION AND

+ 12%

THE WINDSOR

MARKET OVERVIEW

DEMOGRAPHICS

SPORTS

EDUCATION

ARTS & ENTERTAINMENT

The local population is projected to exceed 555,400 people in 2022 after adding roughly 40,000 residents, a growth rate that is nearly double the national level.

Household growth of 9.7 percent is expected by the end of 2022 as nearly 20,000 households are created, generating the need for additional housing options. Home prices remain well below large California markets.

A skilled workforce includes nearly 63 percent of residents age 25 and older have completed some college.

Outdoor activities abound in the metro with golf courses, parks and trails for biking,

running and hiking. The region’s rivers, lakes and reservoir offer the opportunity for

numerous water sports, while the mountains provide a scenic backdrop and snow in the

winter. Cultural venues include the Carson City Symphony, the state capitol, the Nevada

Museum of Art, the Brewery Arts Center and a host of other museums, galleries and

festivals. More than 50,000 students attend local institutions of higher education including

the University of Nevada, Reno Truckee Meadows Community College, Western Nevada

College and Sierra Nevada College. These institutions also provide cultural and sports

venues. The area also supports minor league teams in baseball, basketball and soccer.

* ForecastSources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Moody’s Analytics; U.S. Census Bureau

QUALITY OF LIFE

3

2017 Population by Age

0-4 YEARS

6%5-19 YEARS

18%20-24 YEARS

7%25-44 YEARS

26%45-64 YEARS

27%65+ YEARS

16%

THE WINDSOR

38.82017

MEDIAN AGE:

U.S. Median:

37.8

$53,800 2017 MEDIAN

HOUSEHOLD INCOME:

U.S. Median:

$56,300

516K2017

POPULATION:

Growth2017-2022*:

7.7%

199K2017

HOUSEHOLDS:

9.7%

Growth2017-2022*:

36

Reno’s economy matures, sparking development across all property sectors. Themarket’s proximity to the Bay Area is supporting an economy beyond the gamingindustry. The area’s lower cost of living is also attractive for Bay Area transplantsattempting to stretch their income further. Tesla is the most notable utilizer of themetro’s favorable location and business-friendly environment. The company pulled112 permits last year to build out internal areas of the factory. The introduction ofTesla’s electric semitruck necessitates a further expansion of production in thecoming years. On the supply side, development is ramping up quickly as buildersfinally move away from primary markets to relieve housing pressure in tertiary metros.Inventory will expand by nearly 3 percent this year, representing the largest increasethis cycle. The South Reno submarket contains most of the completions this year.Approximately 1,400 units are underway in the submarket, including more than 1,000scheduled for delivery in 2019. Builders are also active in the Sparks submarket,where 900 units are underway and scheduled for completion through 2019. Theintroduction of new units has pushed up the number of properties offering leasingincentives to 16 percent. Still-tight conditions are limiting the average incentive to justnine days of free rent.

Out-of-state investors keen on Reno-Sparks area. Investors attempting to balancetheir low-return portfolios in coastal California counties are increasingly turning to themetro. While the prevalence of new projects could entice some larger buyers to thearea, most deals will be in the Class C sector as higher yields remain the primarymotivator. Average cap rates for lower-tier properties were in the mid-6 percent rangelast year, and they should remain relatively consistent during 2018. Properties nearthe University of Nevada, Reno will remain popular for investors due to consistentrenter demand. Since 2010, enrollment at the university has soared by 23 percent to22,700 students. Elsewhere, the gaming industry supports strong apartment demandas many leisure and hospitality positions pay wages that preclude homeownership.Gaming revenue in the county increased by more than 2.3 percent in 2017, anindication that tourism is rising.

Rent Growth Among Nation’s Highest as Vacancy Remains Low

RENO-SPARKS METRO AREA

THE WINDSOR

2018 Multifamily Forecast

4.2% increase

in total employment

50 basis point

increase in vacancy

1,100 units

will be completed

Employment:

Vacancy:

Const ruct ion:

Another healthy year of employment growthis on the deck for Reno as 10,000 jobs arecreated. Last year, 11,100 positions weregenerated.

As inventory rapidly expands, vacancyclimbs 90 basis points by year-end 2018.The rate will climb above the 4 percentthreshold for the first time since early 2015.

The pace of development will increase thisyear when inventory expands by 2.7 percent.Completions in 2018 are nearly as high asthe previous four years combined.

7.3% increase

in effective rents

Rents:A combination of expensive new inventoryand relatively low vacancy will facilitateanother year of healthy rent growth aseffective rents climb to $1,167 per month.During the previous five years, average rentgrowth was 7.8 percent.

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RENO-SPARKS METRO AREA

Outlook: The pace of expansion will slow modestly to 10,000 positions in 2018, representing an increase of 4.2 percent.The professional and business services and education and health services sectors are projected to lead growth.

Employment• Employers added 11,100 jobs during 2017, lifting the number of employed residents by 5.0 percent. Construction

jobs soared 8.6 percent during the period and should continue to climb as several housing projects are plannedaround the metro.

• Manufacturers hired 4,300 workers last year, amounting to a 29.1 percent increase in payrolls. Reno’s proximity to theBay Area is attractive to local firms, including Tesla, which is expanding its Gigafactory.

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Outlook: Builders have slated 1,140 units for completion this year, which will raise inventory by 2.7 percent.

Construction• Apartment inventory expanded by 1.4 percent during 2017 as approximately 600 units came online. One of the

largest projects completed last year is the 236-unit Fountainhouse at Victorian Square.

• Nearly 3,100 units were underway as 2018 commenced, with due dates stretching to the end of 2019. The largestdevelopment under construction is Summit, which will include more than 500 units in a mix of affordable and market-rate apartments when completed next year.

Outlook: An influx of new apartments will put upward pressure on vacancy this year, lifting the rate 50 basis points to 4.0percent. Despite the increase, conditions will remain sufficiently tight to enable sizable rent growth. Effective rents climb7.3 percent this year to a monthly average of $1,167 per month.

Vacancy and Rents• Last year, apartment vacancy climbed 60 basis points to 3.5 percent. Vacancy has remained below the 4 percent

threshold since mid-2015.

• Although vacancy inched up last year, the rate remained sufficiently low to support a 11.2 percent rise in the averageeffective rent to $1,088 per month. The South Reno submarket, the metro’s most expensive, recorded a 13.7 percentrise in rents last year.

Outlook: Out-of-state investors will continue targeting apartments in the Reno market in search of yields higher than thoseavailable in the Bay Area. Overall the average cap rate was close to 6 percent entering the year.

Sales Trends• Attractive yields encouraged a 9 percent climb in sales velocity last year. Investor interest was strong near the

University of Nevada, Reno and core locations throughout the metro.

• Apartments in high demand areas such as North Valley and the University submarkets, command over $100,000 perunit as properties in the South Reno area trade hands between $150,000 to $200,000 per unit. Here cap rates rangein the 5 percent range. Higher Yields in the 8-percent area are found in Carson City and Lyon County.

PROPERTY NAME

MARKETING TEAM

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DEMOGRAPHICS

Source: © 2017 Experian

Created on September 2018

POPULATION 1 Miles 3 Miles 5 Miles 2022 Projection

Total Population 22,699 131,901 241,207

2017 Estimate


2010 Census


2000 Census


Daytime Population

2017 Estimate 53,265 187,597 317,033

HOUSEHOLDS 1 Miles 3 Miles 5 Miles 2022 Projection

Total Households 11,912 56,668 98,345

2017 Estimate


Average (Mean) Household Size 1.73 2.30 2.43

2010 Census


2000 Census


Growth 2015-2020 7.81% 4.05% 5.05%

HOUSING UNITS 1 Miles 3 Miles 5 Miles Occupied Units

2022 Projection 11,912 56,668 98,345

2017 Estimate 13,005 60,391 102,336

Owner Occupied 1,523 18,328 39,889

Renter Occupied 9,527 36,135 53,731

Vacant 1,956 5,928 8,716

Persons In Units

2017 Estimate Total Occupied Units 11,049 54,463 93,620

1 Person Units 56.60% 37.91% 32.84%

2 Person Units 27.94% 30.03% 31.71%

3 Person Units 8.06% 13.27% 14.31%

4 Person Units 4.07% 9.74% 10.94%

5 Person Units 1.82% 4.74% 5.55%

6+ Person Units 1.50% 4.30% 4.66%

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles 2017 Estimate

$200,000 or More 2.05% 2.67% 3.24%

$150,000 - $199,000 1.03% 2.19% 2.87%

$100,000 - $149,000 3.75% 7.63% 9.30%

$75,000 - $99,999 5.31% 8.31% 10.09%

$50,000 - $74,999 11.35% 15.59% 17.34%

$35,000 - $49,999 15.37% 15.53% 15.64%

$25,000 - $34,999 13.37% 12.40% 11.90%

$15,000 - $24,999 22.15% 16.80% 14.46%

Under $15,000 25.61% 18.89% 15.16%

Average Household Income $43,750 $55,966 $63,467

Median Household Income $26,375 $36,622 $42,347

Per Capita Income $24,824 $23,992 $25,715

POPULATION PROFILE 1 Miles 3 Miles 5 Miles Population By Age

2017 Estimate Total Population 21,727 130,026 234,895

Under 20 16.92% 23.42% 24.22%

20 to 34 Years 31.03% 27.11% 24.93%

35 to 39 Years 5.24% 5.74% 5.83%

40 to 49 Years 11.17% 11.07% 11.53%

50 to 64 Years 21.04% 18.13% 18.64%

Age 65+ 14.61% 14.54% 14.84%

Median Age 36.80 34.60 35.66

Population 25+ by Education Level

2017 Estimate Population Age 25+ 15,262 87,196 158,415

Elementary (0-8) 4.45% 7.04% 6.16%

Some High School (9-11) 10.45% 11.13% 9.87%

High School Graduate (12) 25.54% 25.14% 25.48%

Some College (13-15) 25.92% 24.50% 25.28%

Associate Degree Only 7.38% 6.01% 6.49%

Bachelors Degree Only 16.60% 15.70% 16.24%

Graduate Degree 8.63% 9.13% 9.28%

Population by Gender

2017 Estimate Total Population 21,727 130,026 234,895

Male Population 56.43% 51.62% 50.76%

Female Population 43.57% 48.38% 49.24%

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IncomeIn 2017, the median household income for your selected geography is$26,375, compare this to the US average which is currently $56,286.The median household income for your area has changed by 2.68%since 2000. It is estimated that the median household income in yourarea will be $29,470 five years from now, which represents a changeof 11.73% from the current year.

The current year per capita income in your area is $24,824, comparethis to the US average, which is $30,982. The current year averagehousehold income in your area is $43,750, compare this to the USaverage which is $81,217.

PopulationIn 2017, the population in your selected geography is 21,727. Thepopulation has changed by 15.03% since 2000. It is estimated thatthe population in your area will be 22,699.00 five years from now,which represents a change of 4.47% from the current year. Thecurrent population is 56.43% male and 43.57% female. The medianage of the population in your area is 36.80, compare this to the USaverage which is 37.83. The population density in your area is6,906.33 people per square mile.

HouseholdsThere are currently 11,049 households in your selected geography.The number of households has changed by 18.79% since 2000. It isestimated that the number of households in your area will be 11,912five years from now, which represents a change of 7.81% from thecurrent year. The average household size in your area is 1.73 persons.

EmploymentIn 2017, there are 24,909 employees in your selected area, this is alsoknown as the daytime population. The 2000 Census revealed that49.13% of employees are employed in white-collar occupations inthis geography, and 50.69% are employed in blue-collar occupations.In 2017, unemployment in this area is 9.27%. In 2000, the averagetime traveled to work was 19.00 minutes.

Race and EthnicityThe current year racial makeup of your selected area is as follows:74.88% White, 4.46% Black, 0.77% Native American and 6.46%Asian/Pacific Islander. Compare these to US averages which are:70.42% White, 12.85% Black, 0.19% Native American and 5.53%Asian/Pacific Islander. People of Hispanic origin are countedindependently of race.

People of Hispanic origin make up 16.78% of the current yearpopulation in your selected area. Compare this to the US average of17.88%.

PROPERTY NAME

MARKETING TEAM

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HousingThe median housing value in your area was $213,218 in 2017,compare this to the US average of $193,953. In 2000, there were1,710 owner occupied housing units in your area and there were7,591 renter occupied housing units in your area. The median rent atthe time was $491.

Source: © 2017 Experian

DEMOGRAPHICS

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DEMOGRAPHICS

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