OFFERING MEMORANDUMleec-sd.reapplications.com/filecabinet/Property/067341/... · 2011-05-06 ·...

No warranty or representation is made to the accuracy of the foregoing information. Terms of sale, lease and availability are subject to change or withdrawal without notice.

LEE & ASSOCIATESCommercial Real Estate Services

OFFERING MEMORANDUMDAKOTA PARK BOAT & RV STORAGE

3515 West Dakota Avenue | Fresno, CA

MAY 2011

LEE & ASSOCIATES SELF STORAGE GROUPCOMMERCIAL REAL ESTATE SERVICES

Subject Property–Dakota Park Boat & RV Storage 3515 West Dakota Avenue Fresno, California

Dakota Park Boat & RV Storage Entry and Office

Dakota Park Boat & RV Storage Entry Gate




Storage Units- Drive Access

Storage Units– Drive Access

Canopy Units



For further information on this investment opportunity please contact:

CLIFFORD CROWE, CCIMPRINCIPAL

(760) [email protected]

STEVE BRUCEPRINCIPAL

(760) [email protected]

LEE & ASSOCIATES SELF STORAGE GROUP

COMMERCIAL REAL ESTATE SERVICES5872 OWENS AVE # 200

CARLSBAD, CA 92008PHONE: (760) 929-9700 FAX: (760) 929-9977

WEBSITE: www.lee-associates.com / www.leeselfstorage.com



CONFIDENTIAL MEMORANDUM AND DISCLAIMER

This is a confidential marketing package intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of this property.

This marketing package has been prepared by Lee and Associates Commercial Real Estate Services. All or a portion of the information provided herein may have been provided to Lee and Associates by the owner, other brokers or third party sources. Nothing herein is intended to represent exclusive information or an exclusive listing of Lee and Associates. It contains selected information pertaining to the subject property and does not purport to be a representation of the state of affairs of the owner, all-inclusive, or to contain all or part of the information which prospective investors may require to evaluate a purchase. 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/or Lee and Associates. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. Interested parties are expected to review, independently, all documents relating to the property as to the accuracy and completeness of the information contained herein. All financial information is provided for general reference purposes only. Additional information and an opportunity to inspect the property will be made available to interested and qualified prospective purchasers following acceptance of an offer. Neither the owner nor Lee and Associates Commercial Real Estate Services, nor any of their respective directors, officers, affiliates or representatives make any representation or warranty, expressed or implied and no obligation shall arise by reason of your receipt of this marketing package 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 subject 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 marketing package. The owner shall have no legal commitment or obligation to any entity reviewing this marketing package or making an offer to purchase the subject property.

By receipt of this marketing package, you agree that this marketing package and its contents are of a confidential nature that you will hold and treat in the strictest confidence and that you will not disclose this marketing package or any of its contents to any other entity without the prior written authorization of the owner or Lee and Associates. You also agree that you will not use this package, or any of its contents, in any manner detrimental to the interest of the owner or Lee and Associates Commercial Real Estate Services. Further you agree not to contact any tenant of the property, owner, or the property manager in connection with your review of this marketing package and that you will direct all questions to Lee and Associates Commercial Real Estate Services.



The property is available for sale only until May 21, 2011. Given financing matters

on the Seller’s end, he is extremely motivated to sell the property quickly. Due to the

short timeframe, this marketing package is limited. Upon request, we can provide

interested buyers the June 2009 appraisal and/or the 2009 and 2010 property-level

tax returns.

Important Message



I. Property Overview & Transaction Terms

II. Location, Site Maps and Photos

III. Financial Overview a. Profit & Loss Statements b. Potential Gross Income/Unit Mix c. Periodic Overview Reports

TABLE OF CONTENTS



TRANSACTION TERMS:

• Closing Date: The purchase transaction must close or have non-refundable earnest money by May 21, 2011

• Price: $5,700,000 ($35.00 PSF)

PROPERTY OVERVIEW:

• Dakota Park Boat & RV Storage | 3515 West Dakota Avenue, Fresno, CA• 158,842 SF of covered or enclosed area on 9.61 acres• 315 units located within 7 buildings: 170 Enclosed | 123 Covered | 4 Uncovered | 18 Traditional• Projected 7% cap rate | 1Q 2011 income is 10.6% above 2010 • Rents on the enclosed units have not increased in four (4) years – approximately 95% of the leases will increase by 4% in July 2011.• Unit Occupancy: 94.1%• Economic Occupancy: +/- 75%• Opened May 2007 – Excellent upward trending since opening• Excellent location next to busy north/south freeway• Wash Bays, Dump Station, Etc. • “TASK MASTER” Property Management Software

AVAILABLE UPON REQUEST: JUNE 2009 APPRAISAL AND 2009 / 2010 TAX RETURNS

FINANCIAL OVERVIEW:

2009 2010 2011Total Income $536,000 $601,371 $665,116 (First quarter annualized)Actual 2010 Expenses (New taxes + Management fee) ($260,329) 39%NOI Forecast $404,787

SEE FOLLOWING PAGES FOR DETAILED ANALYSIS





Dakota Boat & RV

Investment Assumptions

Price of Property $5,700,000.00

Date of Acquisition 1 January 2011

Holding Period 5 Years

Inflation Rate 3% per Year

Sale Price Method 7% Capitalization of NOI on Sale Date

Selling Costs 3.5%

Investor's Assumptions

Present Value Discount Rate 10% per Year

Tax Rate - First Year 39.6%

Tax Rate - Following Years 39.6%

Capital Gain Rate 20%

Cost Recovery Recapture Rate 25% - Losses Carried Forward

Depreciation Assumptions

Depreciable Amount 75% of Property Price

Depreciable Life 39 Years

Depreciation Method Straight Line

Depreciation Start Date at Acquisition

Revenue Assumptions

Annual Revenue $665,000.00

Revenue Start Date at Acquisition

Revenue Period 5 Years

Revenue Growth Method Annual at 5% Over Inflation

Expense Assumptions

Annual Expense $260,000.00

Expense Start Date at Acquisition

Expense Period Until Projected Sale

Expense Growth Method Annual at the Inflation Rate

Analysis Assumptions Report --- Dakota Boat & RV file:///C:/Documents and Settings/adion/Local Settings/Temporary Internet...

1 of 2 5/3/2011 3:26 PM




Purpose ActualName Dakota Boat & RVLocation 3515 West Dakota Avenue, FresnProperty Type StorageDate 3 May 2011Square Feet 158,842

Price $5,700,000 -Loans 0Down Payment 5,700,000 +Acq Costs 0 +Loan Points 0Investment 5,700,000

Dakota Boat & RV

$/SqFt % of GI Annual $Gross Income $4.19 100.0% $665,000 - Vacancy & Credit Loss 0.00 0.0% 0Effective Income $4.19 100.0% $665,000Less: Operating Expenses Expense 1.64 39.1% 260,000Total Operating Expenses $1.64 39.1% $260,000Net Operating Income $2.55 60.9% $405,000 Less: Debt Service Total Debt Service $0.00 0.0% $0Cash Flow Before Taxes $2.55 60.9% $405,000

Capitalization Rate 7.11%Gross Income Multiplier 8.57Cash on Cash 7.11%Price/SqFt $36

Dakota Boat & RV

2011 2012 2013 2014 2015Total Gross Income $665,000 $718,200 $775,656 $837,708 $904,725 Less: Operating Expenses

Annual Property Operating Data --- Dakota Boat & RV file:///C:/Documents and Settings/adion/Local Settings/Temporary Internet...

1 of 3 5/3/2011 3:28 PM




Purpose ActualName Dakota Boat & RVLocation 3515 West Dakota Avenue, FresnProperty Type StorageDate 3 May 2011Square Feet 158,842

Price $5,700,000 -Loans 0Down Payment 5,700,000 +Acq Costs 0 +Loan Points 0Investment 5,700,000

Dakota Boat & RV

$/SqFt % of GI Annual $Gross Income $4.19 100.0% $665,000 - Vacancy & Credit Loss 0.00 0.0% 0Effective Income $4.19 100.0% $665,000Less: Operating Expenses Expense 1.64 39.1% 260,000Total Operating Expenses $1.64 39.1% $260,000Net Operating Income $2.55 60.9% $405,000 Less: Debt Service Total Debt Service $0.00 0.0% $0Cash Flow Before Taxes $2.55 60.9% $405,000

Capitalization Rate 7.11%Gross Income Multiplier 8.57Cash on Cash 7.11%Price/SqFt $36

Dakota Boat & RV

2011 2012 2013 2014 2015Total Gross Income $665,000 $718,200 $775,656 $837,708 $904,725 Less: Operating Expenses


1 of 3 5/3/2011 3:28 PM

Expense 260,000 267,800 275,834 284,109 292,632Total Operating Expenses $260,000 $267,800 $275,834 $284,109 $292,632Net Operating Income $405,000 $450,400 $499,822 $553,599 $612,093Taxable Income and Taxes (Losses Carried Forward) Taxable Revenues $665,000 $718,200 $775,656 $837,708 $904,725 Less: Deducted Expenses 260,000 267,800 275,834 284,109 292,632 Less: Depreciation 105,048 109,615 109,615 109,615 105,048Ordinary Income $299,952 $340,785 $390,207 $443,984 $507,045Taxable Income 299,952 340,785 390,207 443,984 507,045(Cum Suspended Losses) 0 0 0 0 0Taxes Due (- = Savings) 118,781 134,951 154,522 175,818 200,790Cash Flow After Tax $286,219 $315,449 $345,300 $377,782 $411,303Sale Proceeds:Sale Value $5,785,714 $6,434,286 $7,140,314 $7,908,564 $8,744,184 Less: Sale Costs (3.5%) 202,500 225,200 249,911 276,800 306,046Sale Proceeds Before Tax 5,583,214 6,209,086 6,890,403 7,631,764 8,438,138 Less: Taxes due to Sale (23,357) 154,341 318,008 493,685 682,363Sale Proceeds After Tax 5,606,571 6,054,745 6,572,395 7,138,080 7,755,774Ratio Analysis:Profitability Ratios Capitalization Rate 7.11% 7.90% 8.77% 9.71% 10.74% Cash on Cash Before Tax 7.11% 7.90% 8.77% 9.71% 10.74% Cash on Cash After Tax 5.02% 5.53% 6.06% 6.63% 7.22% Accounting RoR Before Tax 8.61% 19.28% 21.16% 23.19% 25.40% Accounting RoR After Tax 6.53% 16.91% 18.44% 20.11% 21.88% Current RoR Before Tax 19.28% 19.02% 18.79% 18.59% Current RoR After Tax 13.62% 14.25% 14.35% 14.42%Risk Ratios Breakeven Occupancy 39.1% 37.3% 35.6% 33.9% 32.3%Assumption Ratios NOI/Property Value 7.00% 7.00% 7.00% 7.00% 7.00% Gross Income Multiple 8.70 8.96 9.21 9.44 9.67 Operating Expense Ratio 39.1% 37.3% 35.6% 33.9% 32.3%Analysis Measures: IRR Before Debt 5.3% 12.1% 14.5% 15.6% 16.2% IRR Before Tax 5.3% 12.1% 14.5% 15.6% 16.2% IRR After Tax 2.7% 8.5% 10.4% 11.4% 12.0% NPV Before Debt @10.00% ($238,199) $208,028 $647,266 $1,079,573 $1,505,007 NPV Before Tax @10.00% ($238,199) $208,028 $647,266 $1,079,573 $1,505,007 NPV After Tax @10.00% ($369,881) ($151,321) $54,929 $263,150 $472,619


2 of 3 5/3/2011 3:28 PM




Dakota Boat & RV

2011 2012 2013 2014 2015Total Gross Income $665,000 $718,200 $775,656 $837,708 $904,725 Less: Operating Expenses Expense 260,000 267,800 275,834 284,109 292,632Total Operating Expenses $260,000 $267,800 $275,834 $284,109 $292,632Net Operating Income $405,000 $450,400 $499,822 $553,599 $612,093Taxable Income and Taxes (Losses Carried Forward) Taxable Revenues $665,000 $718,200 $775,656 $837,708 $904,725 Less: Deducted Expenses 260,000 267,800 275,834 284,109 292,632 Less: Depreciation 105,048 109,615 109,615 109,615 105,048Ordinary Income $299,952 $340,785 $390,207 $443,984 $507,045Taxable Income 299,952 340,785 390,207 443,984 507,045(Cum Suspended Losses) 0 0 0 0 0Taxes Due (- = Savings) 118,781 134,951 154,522 175,818 200,790Cash Flow After Tax $286,219 $315,449 $345,300 $377,782 $411,303Sale Proceeds:Sale Value $5,785,714 $6,434,286 $7,140,314 $7,908,564 $8,744,184 Less: Sale Costs (3.5%) 202,500 225,200 249,911 276,800 306,046Sale Proceeds Before Tax 5,583,214 6,209,086 6,890,403 7,631,764 8,438,138 Less: Taxes due to Sale (23,357) 154,341 318,008 493,685 682,363Sale Proceeds After Tax 5,606,571 6,054,745 6,572,395 7,138,080 7,755,774Ratio Analysis:Profitability Ratios Capitalization Rate 7.11% 7.90% 8.77% 9.71% 10.74% Cash on Cash Before Tax 7.11% 7.90% 8.77% 9.71% 10.74% Cash on Cash After Tax 5.02% 5.53% 6.06% 6.63% 7.22% Accounting RoR Before Tax 8.61% 19.28% 21.16% 23.19% 25.40% Accounting RoR After Tax 6.53% 16.91% 18.44% 20.11% 21.88% Current RoR Before Tax 19.28% 19.02% 18.79% 18.59% Current RoR After Tax 13.62% 14.25% 14.35% 14.42%Risk Ratios Breakeven Occupancy 39.1% 37.3% 35.6% 33.9% 32.3%Assumption Ratios NOI/Property Value 7.00% 7.00% 7.00% 7.00% 7.00% Gross Income Multiple 8.70 8.96 9.21 9.44 9.67 Operating Expense Ratio 39.1% 37.3% 35.6% 33.9% 32.3%Analysis Measures: IRR Before Debt 5.3% 12.1% 14.5% 15.6% 16.2% IRR Before Tax 5.3% 12.1% 14.5% 15.6% 16.2% IRR After Tax 2.7% 8.5% 10.4% 11.4% 12.0%

Proforma Income Statement --- Dakota Boat & RV file:///C:/Documents and Settings/adion/Local Settings/Temporary Internet...

1 of 2 5/3/2011 3:33 PM

NPV Before Debt @10.00% ($238,199) $208,028 $647,266 $1,079,573 $1,505,007 NPV Before Tax @10.00% ($238,199) $208,028 $647,266 $1,079,573 $1,505,007 NPV After Tax @10.00% ($369,881) ($151,321) $54,929 $263,150 $472,619

Proforma Income Statement --- Dakota Boat & RV file:///C:/Documents and Settings/adion/Local Settings/Temporary Internet...

2 of 2 5/3/2011 3:33 PM




Dakota Boat & RV

Price of Propertyversus

Net Capitalization Rate

Assumption NCR$5,200,000.00 7.79%$5,250,000.00 7.71%$5,300,000.00 7.64%$5,350,000.00 7.57%$5,400,000.00 7.50%$5,450,000.00 7.43%$5,500,000.00 7.36%$5,550,000.00 7.30%$5,600,000.00 7.23%$5,650,000.00 7.17%$5,700,000.00 7.11%

Sensitivity Analysis --- Dakota Boat & RV file:///C:/Documents and Settings/adion/Local Settings/Temporary Internet...

1 of 2 5/3/2011 3:55 PM


LEE & ASSOCIATESCommercial Real Estate Servicess

Copyright © 1988-2003 Microsoft Corp. and/or its suppliers. All rights reserved. http://www.microsoft.com/streets© Copyright 2002 by Geographic Data Technology, Inc. All rights reserved. © 2002 Navigation Technologies. All rights reserved. This data includes information taken with permission from Canadian authorities © 1991-2002 Government of Canada (Statistics Canada and/or Geomatics Canada), all rights reserved.

REGIONAL MAP

0 mi 10 20 30 40 50

II. Location, Site Maps & Photos

Subject PropertyDakota Park Boat & RV Storage3515 W Dakota AveFresno, CA

Regional Map



II. Location, Site Maps & PhotosDakota Park RV & Boat Storage SUBJECT PROPERTY DESCRIPTION

AERIAL PHOTO

Subject Property APN 433-060-21

NHighway 99

Dak

ota

Aven

ue

Valentine Avenue

Aerial Map




SITE PLAN 1

N

Site Plan




PARCEL LOCATION MAP

Subject

Parcel Map















Canopy Units



Canopy Units



Canopy Units

Front Signage Entry and Office

Entry Gate Storage Units Drive Access

Entry Gate Canopy Units




Canopy Units

Enclosed Unit

Boat & RV Wash Station

Canopy Units

Enclosed Unit

Boat & RV Wash Station

Office & Apartment Building


Office– Front Desk



Office– Front Desk

Apartment– Kitchen

Apartment– Living Room

Apartment– Garage

Office– Interior

Office– Public Restroom

Office– Employee Breakroom

Enclosed Unit Boat & RV Wash Station

Office & Apartment Building Office - Front Desk

Apartment - Kitchen Office - Employee Break Room



III. Financial Overview - Profit & Loss Statements



III. Financial Overview - Profit & Loss Statements

*

*

NOI: $134,292+ Interest: $305,750- Real Estate Taxes: <$69,000>- Management Fee: <$30,000>

NOI: $341,042

Notes to Financial Underwriting / P&Ls

• Property taxes shown above have been adjusted assuming a purchase price of $5,700,000.

• A 5% management fee has been included in the above numbers. FYI: The Monday through Friday management services currently provided command a $52,000 / year payroll in addition to free housing. (Note - $13,700 of this shows up on the P&Ls as “Dakota Bonus” and ”Penske Rental Commission”.)

Trailing 12 NOI (April-December 2010 & 1st Quarter 2011) $360, 532



III. Financial Overview - Potential Gross Income

Dakota Park Boat & RV Storage VALUATION

POTENTIAL GROSS INCOME:No. of Unit Total Monthly Rent/Units Dimensions SF SF Rent SF Totals

Covered Spaces:2 12 x 12 144 288 $45 $0.31 $90

14 12 x 24 288 4,032 $80 $0.28 $1,120104 12 x 37 444 46,176 $120 $0.27 $12,480

1 12 x 55 660 660 $155 $0.23 $1552 12 x 80 960 1,920 $215 $0.22 $430

Subtotals for Covered Spaces:123 432 53,076 $116 $0.27 $14,275

(Average) (Average) (Average)

Enclosed Units:14 14 x 15 210 2,940 $130 $0.62 $1,82010 14 x 20 280 2,800 $160 $0.57 $1,60010 14 x 25 350 3,500 $215 $0.61 $2,15016 14 x 32 448 7,168 $240 $0.54 $3,840

110 14 x 48 672 73,920 $350 $0.52 $38,5006 14 x 65 910 5,460 $530 $0.58 $3,1801 14 x 85 1,190 1,190 $590 $0.50 $5903 14 x 100 1,400 4,200 $665 $0.48 $1,995

Subtotals for Enclosed Units:170 595 101,178 $316 $0.53 $53,675


Traditional Small Mini-Storage Units:10 10 x 10 100 1,000 $75 $0.75 $7508 10 x 15 150 1,200 $105 $0.70 $840

Subtotals for Traditional Units:18 122 2,200 $88 $0.72 $1,590


Open Spaces:



III. Financial Overview - Income Approach


INCOME APPROACH

Potential Gross Annual Income:Rental Income from Storage Spaces $837,600Miscellaneous Income 2.0% of PGI $16,752Total Potential Gross Income $854,352

Less Vacancy & Collection Loss: 15.0% of PGI ($128,153)Effective Gross Income (EGI) $726,199

Less Expenses:Real Estate Taxes & Assesments 9.5% of EGI $68,981Insurance 1.2% of EGI $8,714Operations and Mainenance 2.2% of EGI $15,976Administration 4.0% of EGI $29,048On-Site Management 8.0% of EGI $58,096Off-Site Management 4.0% of EGI $29,048Utilities 2.5% of EGI $18,155Advertising 3.5% of EGI $25,417Other Expenses 3.5% of EGI $25,417

Total Expenses: 38.4% of EGI ($278,852)$1.76 /SF/Annually

Net Operating Income: 61.6% of EGI $447,347$2.83 /SF/Annually

Capitalization of the Net Income Stream:

Net Operating Income $447,347———————— = ——— = $5,591,838Overall Capitalization Rate 8.00%

SAY $5,590,000



III. Financial Overview - Storage Unit Mix


Storage Unit MixUnit Style Size No. of TotalDimensions (Average) (SF) Units SF

Covered Spaces:12 x 12 = 144 2 28812 x 24 = 288 14 4,03212 x 37 = 444 104 46,17612 x 55 = 660 1 66012 x 80 = 960 2 1,920

Covered Spaces 432 123 53,076(Average)

Enclosed Units:14 x 15 = 210 14 2,94014 x 20 = 280 10 2,80014 x 25 = 350 10 3,50014 x 32 = 448 16 7,16814 x 48 = 672 110 73,92014 x 65 = 910 6 5,46014 x 85 = 1,190 1 1,19014 x 100 = 1,400 3 4,200

Enclosed Units 595 170 101,178(Average)

Traditional Small Mini-Storage Spaces:10 x 10 = 100 10 1,00010 x 15 = 150 8 1,200

Small Spaces 122 18 2,200(Average)------------ ------------ ------------

Total for Enclosed/Covered Units 503 311 156,454(Average)



III. Financial Overview - Periodic Overview Report



PREPARED BY:

CLIFFORD CROWE, CCIMPRINCIPAL(760) [email protected]

STEVE [email protected]

MAY 2011

LEE & ASSOCIATES SELF STORAGE GROUPCOMMERCIAL REAL ESTATE SERVICES5872 OWENS AVE # 200CARLSBAD, CA 92008PHONE: (760) 929-9700 FAX: (760) 929-9977WEBSITE: www.lee-associates.com / www.leeselfstorage.com

OFFERING MEMORANDUMleec-sd.reapplications.com/filecabinet/Property/067341/... · 2011-05-06 ·...

Documents

Transcript of OFFERING MEMORANDUMleec-sd.reapplications.com/filecabinet/Property/067341/... · 2011-05-06 ·...