5440 Cass Ave

Detroit MI, 48202

THE BELCREST APARTMENTS

5440 CASS AVE DETROIT MI 48202

5440 Cass Ave Detroit MI, 48202

■ Midtown Detroit

■ 143 Residential Units

■ 2 Commercials Space

■ Tenants Pay For HEATING and Electricity

■ Only outdoor pool in Midtown

■ Qualifies for both NEZ and Historic Tax Credits

■ OFFERED AT 21,000,000.00

■ Presented By : Belcrest Management

■ 313-831-5700 – Office

■ belcrestapts@hotmail.com

Listing Metrics

13 145TOTAL STORIES TOTAL UNITS85 1926PARKING SPACES YEAR BUILT

■ THE OFFERING

Belcrest Management is pleased to offer 5440 Cass Ave, a 145 unit building located in the heart of Midtown. The building consist of studios, one bedrooms, two bedrooms and more. The building is situated between Kirby and Ferry, across the street from the Music Annex of Wayne State University. The building features a mix of hardwood floors and carpeting throughout. Tenants are responsible for paying HEAT and electric. There are 85 parking spaces, and 2 commercial units. The building has been managed by the owners for 20 years. A future owner can come in with fresh capital and upgrade individual apartments & make building wide renovations to add value.Nez and Historic tax credits apply.

Investment Details

■ $21,000,000.00 Asking Price

■ $1,000,000.00 Capital Improvement addition

– Current Belcrest rental rate is $1.09 per square foot (see page 5)

– After Capital improvement rate increases to $1.90 per square foot. (see page 6)

– Midtown Detroit area average is $2.14 per square foot.(see page 16)

– After Capital improvement cap rate 11.5% (see page 6)

Tax Abatement Qualifications – Historic buildings

qualify up to 17 years of NEZ tax abatement.

NEZ tax credit -

https://www.michigan.gov/taxes/0,4676,7-

238-43535_53197-213184--,00.html

Historic tax credit -

https://midtowndetroitinc.org/incentive-

programs/historic-preservation

https://www.michigan.gov/leo/0,5863,7-336-

78421_54317_19320_62001-54165--,00.html

■ 2019 Rentroll and Financials

Unit Size Sq. Feet $/SF Current Rate

Studio (12) 420 $1.54 $650.00

Small 1 Bed (32) 525 $1.38 $725.00

Medium 1 Bed (39) 850 $1.00 $850.00

Large 1 Bed (32) 950 $1.00 $950.00

Small 2 Bed (10) 1200 $0.91 $1100.00

Large 2 Bed (12) 1300 $0.92 $1200.00

3 & 4 Beds (4) 2000 – 2600 $.55 -$.96 $1100.00 - $2500.00

122,190 T/SF $1.09 $127,150.00

Commercial Spaces:

Commercial Unit #1 3800 $.66 $2500.00

Commercial Unit #2 2000 $.45 $900.00

Laundry and Misc. Income: $3,733.16

Parking Income: $5,422.29

Totals: 127,990 T/SF $1.09 $12,555.45

*Monthly Total $139,705.45

■ EXPENSES YEARLY

Insurance $53,812.00

Supplies $62,561.00

Payroll $87,000.00

Taxes $43,002.00

Utilities $95,238.00

Maintenance $17,559.00

Repairs $14,341.00

Professional Fees $19,145.00

Gross Income $1,676,465.40

Total Expenses $392,964.00

Current NOI $1,283,501.40

Purchase Price $21,000,000.00

CAP Rate: 6.1%

■ Projected Financials

Unit Size Sq. Feet $/SF Current Rate

Studio (12) 420 $1.90 $798.00

Small 1 Bed (32) 525 $1.90 $997.50

Medium 1 Bed (39) 850 $1.90 $1,615.00

Large 1 Bed (32) 950 $1.90 $1,805.00

Small 2 Bed (10) 1200 $1.90 $2,280.00

Large 2 Bed (12) 1300 $1.90 $2,470.00

3 & 4 Beds (4) 2000 – 2600 $1.90 $3,800.00 - $4,940.00

122,190 T/SF $232,161.00

Commercial Spaces: Sq. Feet $/SF Monthly Rate Annual Rate

Commercial Unit #1 3800 $15.00 $4,750.00 $57,000.00

Commercial Unit #2 2000 $12.00 $2,000.00 $24,000.0

127,990 T/SF $6,750.00

Laundry and Misc. Income: $3,733.16

Parking Income: $5,422.29

$9,155.45

$248,066.45

■ EXPENSES YEARLY

Insurance $53,812.00

Supplies $59,561.00

Payroll $86,000.00

Taxes $43,002.00

Utilities $87,238.00

Maintenance $17,559.00

Repairs $14,341.00

Professional Fees $19,145.00

Purchase Price $21,000,000.00

Yearly Gross $2,976,797.40

Total Expenses with 5% increase $431,653.00

NOI $2,545,144.40

CAP rate 12.1%

Important information and disclaimer: The information contained herein is assumed to be correct and market-supported. Output produced from this model should not be considered an appraisal. Projections are forecasts and are not to be considered fact. The information contained in this file is privileged and confidential; it is intended on for us by Belcrest Management and their clients. This file may not be reproduced physically or in electronic format without the expressed written consent of Belcrest Management. CAUTION: Security codes have been included into this file and unauthorized use may render this file useless. Belcrest Management employees, affiliates, and contractors are instructed to hard-code this model for reproduction and distribution. Not responsibility for errors and omissions.

Common Area Photos

Hallways, Laundry Room, Salon/Barber Shop, Common Pub.

Studio and Small 1 Bedroom Floor Plans

Studio – ’10

400 Sq. Ft

Small 1 Bedroom – ’05

500 Sq. Ft

Small 1 Bedroom – ’08

500 Sq. Ft

Small 1 Bedroom – ’11

500 Sq. Ft

Medium 1 Bedroom Floors Plans

Medium 1 Bedroom – ’01

800 Sq. Ft

Medium 1 Bedroom – ’03

800 Sq. Ft

Medium 1 Bedroom – ’12

800 Sq. Ft

Medium 1 Bedroom – ’13

800 Sq. Ft

Large 1 Bedroom 2 Bathroom Floor Plans

Large 1 Bedroom 2 Bathroom – ’04

900 Sq. Ft

*Large 1 Bedroom 2 Bathroom – ’06

900 Sq. Ft

*Large 1 Bedroom 2 Bathroom – ’07

900 Sq. Ft

Note: ‘06 and ‘07 floor plans are identical just on opposite corners of the building!

Standard 2 Bedroom and Large 2 Bedroom Floor Plans

Standard 2 Bedroom 1 Bathroom – ’02

1100 Sq. Ft

Large 2 Bedroom

2 Bathroom – ’09

1200 Sq. Ft

Unit Photos

Unit Photos

On-Site Amenities

■ Outdoor Pool On-Site

■ Exterior Courtyard with Grills

■ Laundry Facility On-Site

■ Controlled Access

■ Fence Parking Lot (85 Spaces)

■ Security System

■ On-Site Maintenance

■ Multi-Use Room

■ On-Site ATM

■ Lounge

■ Salon/Barber Shop On-Site

■ Package Service

■ Tenant pays for HEAT and Electric

Midtown

Area Retailers Include: Carhartt, Common Pub, Detroit Historical

Museum, DIA, Peacock Room, Chartreuse Kitchen and Cocktails, Wasabi,

Frida, Macabees, Comerica Park, Ford Field, Little Caesars Arena, Wayne

State University, College for Creative Studies, Whole Foods, City Bird, Tony

V’s Tavern and Many More.

Comparable Rental Properties Summary:

Property Units Built Occupancy Avg. SF Asking Rent Rent/ SF

Belcrest Apartments 145 1926 94% 882 $900.00 $1.09

Heather Hall 70 1924 85% 507 $1,057.00 $2.09

Finn Apartments 30 1922 95% 450 $973.00 $2.16

Villa Lante 29 1916 100% 427 $992.00 $2.32

Forest Arms 71 1905 85% 781 $1,311.00 $2.21

Strathmore 129 1929 100% 868 $1,395.00 $1.79

Studio One 124 2008 90% 612 $1,508.00 $1.74

The Isabelle 30 1913 98% 423 $1,033.00 $2.44

The Plaza 72 - - 988 $2,345.00 $2.37

Union at Midtown 81 2011 95% 1,135 $2,196 $1.97

Important information and disclaimer: The information contained herein is assumed to be correct and market-supported. Output produced from

this model should not be considered an appraisal. Projections are forecasts and are not to be considered fact. The information contained in this

file is privileged and confidential; it is intended on for us by Belcrest Management and their clients. This file may not be reproduced physically or

in electronic format without the expressed written consent of Belcrest Management. CAUTION: Security codes have been included into this file

and unauthorized use may render this file useless. Belcrest Management employees, affiliates, and contractors are instructed to hard-code this

model for reproduction and distribution. Not responsibility for errors and omissions.

Rent and Occupancy Demographic

91%

92%

93%

94%

95%

96%

97%

98%

2012 2013 2014 2015 2016 2017 2018*

Projected Detroit Metro Apartment Market

Rent Occupancy

EFFECTIVE RENT

$951

In June, 2018 up 2.6% from on year prior.

OCCUPANCY RATE

96.5%

Through 2Q18 down, 10 basis

points annually

2016 was a strong year for new deliveries in Greater Detroit, causing occupancy to fall slightly.

Billion of dollars of new investment are being poured into the Central Business District (CBD),

creating additional supply as well as jobs. Despite an increase in recent supply, demand for new

units is causing strong rent growth with increases above the metro's historical and national

averages.

As of June 2018, average effective rent in the Detroit metro apartment market was $951 per

month, up 2.6% from one year prior. By the end of 2018, average effective rent is projected to

reach $963, equating to an annual increase of 3.4%. Since 2012, effective rent in Metro Detroit

has increased by 16.6%

Through the first half of 2018, the metro's occupancy rate decreased 10 basis points annually to

96.5%. By the end of 2018, the market's occupancy rate is projected to decrease 50 basis points

year over year, to a still healthy 95.9%.

Midtown Detroit New Development

■ The Boulevard

Heralded as the first new-construction residential development in New Center in 30 years, the $54.6 million The Boulevard draws together residential and commercial components on 1.5 acres. It’s 231 apartment units are an 80-20 split between market and affordable pricing. The Boulevard, developed by Detroit-based The Platform, also offers 17,5000 square feet of retail space and 330 parking spaces.

■ Baltimore Station Phase I

Development will consist of 23 loft apartments on Woodward Avenue with 10,000 square feet of first-floor retail, and 24 parking spaces. The cost of the first phase is projected to be $7.6 million. The project features great connectivity, with a Qline stop, bus lines, MOGO bike stations, and train station in the immediate vicinity. Baltimore Station Phase I is scheduled to be complete winter 2018.

Midtown Detroit New Development

■ The Woodward @ Midtown

A $31 million, mixed-use development dubbed The Woodward @ Midtown generating excitement as it will fill the last large vacant area that has remained and eyesore in Midtown Detroit. Due to break ground October 2018, The Woodward @ Midtown will include 104 residential units, 11 of which will be designated affordable, and 15,000 square feet of retails space and 160 parking spaced on two floors. The development will be on vacant land bounded by Woodward Avenue to the east, Stimson Street to the north and an alley to the south.

Baltimore Station Phase II The second phase of the Baltimore Station development project started

construction October 2018. The development is slated for 138 apartments

with an additional 9,000 square feet of retail, and a total size of 115,000

square feet. There will also be 110 valet parking spaces. The building will

offer both furnished and unfurnished co-living and private apartments. The

scheduled completion is Summer 2018.

Midtown Detroit New Development

■ The Corner

The residential development call “The Corner”, led by Eric Larson and

Larson Realty Group, will now take shape at the site of old Tiger Stadium.

The #30 million mixed-use development will have 111 modular residential

units – studios, one – and two – bedrooms – plus 26,000 square feet of

retail. The palate of colors in the buildings façade will reference the areas

baseball history. Construction should be complete February 2019.

■ Alamo Drafthouse Cinema 90

The Alamo Drafthouse s set to open a nine-screen, first-run movie theatre on the vacant land owned by

Detroit Water and Sewerage Department west of Woodward and south of Martin Luther King Boulevard.

The three parcels we purchased for $1.5 million. Proceeds from the land sale are expected to assist with

programs for water and sewer improvements. The construction is expected to start in late 2018 with an

expected opening in 2020. The opening of the Alamo Drafthouse will bring increased tax revenue and job

opportunities to the Midtown district. The estimated cost of construction for the project will be greater than

$13,000,000.

Important information and disclaimer: The information contained herein is assumed to be correct and market-supported. Output produced from

this model should not be considered an appraisal. Projections are forecasts and are not to be considered fact. The information contained in this

file is privileged and confidential; it is intended on for us by Belcrest Management and their clients. This file may not be reproduced physically or in

electronic format without the expressed written consent of Belcrest Management. CAUTION: Security codes have been included into this file and

unauthorized use may render this file useless. Belcrest Management employees, affiliates, and contractors are instructed to hard-code this model

for reproduction and distribution. Not responsibility for errors and omissions.