THE MACARTHUR APARTMENTS PORTFOLIO 846 Little Bay Ave • Norfolk, VA 23503 1 NON- ENDORSEMENT and DISCLAIMER NOTICE
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Offering Memorandum THE MACARTHUR APARTMENTS PORTFOLIO 846 Little Bay Ave • Norfolk, VA 23503 1 NON- ENDORSEMENT AND DISCLAIMER NOTICE Non-Endorsements Marcus & 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 or name 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. Disclaimer THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap. All rights reserved. THE MACARTHUR APARTMENTS PORTFOLIO Norfolk, VA ACT ID Z0600001 2 THE MACARTHUR APARTMENTS PORTFOLIO TABLE OF CONTENTS SECTION INVESTMENT OVERVIEW 01 Offering Summary Regional Map Local Map Aerial Photo MARKET COMPARABLES 02 Sales Comparables Rent Comparables FINANCIAL ANALYSIS 03 Rent Roll Summary Rent Roll Detail Operating Statement Notes Pricing Detail Acquisition Financing MARKET OVERVIEW 04 Demographic Analysis 3 THE MACARTHUR APARTMENTS PORTFOLIO INVESTMENT OVERVIEW 4 THE MACARTHUR APARTMENTS PORTFOLIO LOCATION SUMMARY 5th Bay Little Bay Apartments Apartments Lois Lane Apartments & Duplexes 5 THE MACARTHUR APARTMENTS PORTFOLIO LOCATION SUMMARY 5th Bay Little Bay Apartments Naval Apartments Station Norfolk Lois Lane Apartments & Duplexes Norview Shopping Center 6 THE MACARTHUR APARTMENTS PORTFOLIO LOCATION SUMMARY Joint Expeditionary Base Little Creek-Fort Story Norview I-64 Community Center Lois Lane Apartments & Duplexes Tidewater Drive Norview Shopping Center c 7 7 THE MACARTHUR APARTMENTS PORTFOLIO LOCATION SUMMARY Tidewater Drive Naval c Station Norfolk I-64 Thomas Willoughby Elementary Captain’s Little Bay Quarters Recreation Apartments Banger Pier 8 8 THE MACARTHUR APARTMENTS PORTFOLIO LOCATION SUMMARY I-64 Norview Shopping Center Joint Expeditionary Base Little Creek- Fort Story Thomas th Willoughby 5 Bay Tidewater Elementary Apartments Drive c 9 9 THE MACARTHUR APARTMENTS PORTFOLIO OFFERING SUMMARY EXECUTIVE SUMMARY VITAL DATA Price $5,000,000 CURRENT YEAR 1 MAJOR EMPLOYERS Down Payment 25% / $1,250,000 CAP Rate 6.69% 7.42% Loan Amount $3,750,000 GRM 6.91 6.90 Net Operating Loan Type Proposed New Income $334,290 $370,966 EMPLOYER # OF EMPLOYEES Net CasH FLow United States Dept of Navy 4,446 Interest Rate / Amortization 4.50% / 30 Years After Debt Service 13.24% / $165,540 16.18% / $202,216 Price/Unit $64,103 TotaL Return 13.24% / $165,540 16.18% / $202,216 USS Wasp LHd 1 1,500 Price/SF $75.41 NavaL Aviation Engrg Svcs 1,100 Number of Units 78 Veterans Affairs MedicaL Ctr 1,060 RentabLe Square Feet 66,300 Commander AtLantic Division 1,000 Year BuiLt / Renovated 1972 / 1988 SweLLs Point BrancH Med CLinic 924 Lot Size 3 acre(s) US AtLantic FLeet 700 US Army Future Center 628 US Navy FLeet Training Center 609 UNIT MIX HeLicpter Mine Countermeasures 600 NUMBER APPROX. Navy EXcHange 600 OF UNITS UNIT TYPE SQUARE FEET WaLmart 577 28 5th Bay Apt. 1,700 30 LL Apt. 1,700 10 LL Duplexes 850 10 LB Apt. 1,700 DEMOGRAPHICS 78 TotaL 66,300 1-MiLes 3-MiLes 5-MiLes 2017 Estimate Pop 4,323 31,820 98,139 2017 Census Pop 4,312 31,539 96,729 2017 Estimate HH 1,960 12,342 39,732 2017 Census HH 1,965 12,288 39,336 Median HH Income $45,788 $48,860 $48,760 Per Capita Income $33,665 $24,582 $27,423 Average HH Income $60,433 $60,624 $66,140 10# THE MACARTHUR APARTMENTS PORTFOLIO OFFERING SUMMARY INVESTMENT OVERVIEW The MacArthur PortFolio ofFers potential buyers the opportunity to purchase a well-maintained asset witH tremendous upside potential. As is, the property ofFers potential investors a +13 percent cash on cash return and an equally lucrative IRR. By maintaining current operating efFiciency’s, controlling vacancy rates, and building on the rents a purchaser can acquire a long term upside in appreciation. The portFolio is serviced by I-64, known as Hampton Roads Beltway and accessible in just over a mile of the property, provides tenants access to NorFolk's major commercial corridors and top employment drivers including the US Department of Defense, Sentara Healthcare Centers, Old Dominion University, BAE systems, NorFolk State University and more. Tenants witH school-age children have access to public schools a mile away. The NorFolk International Airport, which serves the entire Hampton Roads, is located only 8 miles from the property. The Hampton Roads economy is heavily anchored to the US Department of Defense, a major employer for the area, houses eight military installations and the second- largest concentration of military personnel in the U.S.. Naval Station NorFolk, the worlds largest naval base, employs upwards of 67,000 people and yields 6,200 acres of the Hampton Roads commercial acquisition. WitH the inauguration of republican leadersHip, military funding and employee benefits are expected to grow in salary increases, brancH wide budget expansion, and more. Investors are moving out of major metro areas into secondary and tertiary markets, such as the Hampton Roads/ Tidewater area, in search of higher rates of return. Although a few distressed assets are still available at cap rates above eight percent, more investors are targeting stabilized properties witH higher cash flows. Apartments near large employers, military bases and institutions of higher learning, such as Old Dominion University, provide a steady renter base witH cap rates for Class A/B assets typically in the seven percent area. PORTFOLIO HIGHLIGHTS § Four Turn-Key Properties § Centrally Located Between Downtown NorFolk and the Chesapeake Bay Beaches § Cash-on-Cash Return of 13.24% § Stabilized Cap Rate of 7.42% § 6 Miles From Naval Station NorFolk § 8 Miles From Old Dominion University 11 THE MACARTHUR APARTMENTS PORTFOLIO OFFERING SUMMARY PROPERTY OVERVIEW Marcus & Millichap is pleased to present The MacArthur Apartments Portfolio located in Norfolk, VA. The portfolio consists of 78 units spread across 4 properties. Property mix includes; 1401-1411 Lois Lane Duplexes, 9545-9551 5th Bay Avenue Apartments, Little Bay Apartments, and Lois Lane Apartments. Nested in the heart of the city and along the beachfront, the portfolio offers an array of ample maritime activities, outdoor attractions, and easy accessibility to the various Norfolk communities such as Naval Station Norfolk, Central Business District, Old Dominion University, and the Ocean View strand. The subject property neighbors Chesapeake Boulevard and Interstate 64; primary traffic arteries through the South Hampton Roads region, and dominant routes through The City of Norfolk. The portfolio consists of (11) eleven one-bedroom units and (67) sixty-seven two-bedroom units. Due to the concentrated unit-mix and location in a quaint setting, this property offers a unique living experience at the core of the Hampton Roads area. The portfolio is serviced by I-64, known as Hampton Roads Beltway, is accessible in under a mile of the property and provides tenants access to all of Norfolk's top employment drivers including the US Department of Defense, Sentara Healthcare Centers, Old Dominion University, BAE systems, Norfolk State University and more. Tenants with school-age children have access to public schools less than a mile away. The Norview Center Shopping Center is situated 1 mile away from the property and provides tenants with access to the area's shopping center. Downtown Norfolk recently renovated both the Waterside District ($50 Million) and the Hilton "Main" Hotel ($150 Million) Common Area Amenities which brings jobs, restaurants, and nightlife to the area. One of Norfolk’s largest and most recent completions, The Icon at City Walk ($90 Million), provides downtown with 720 new apartments and a shift towards a luxurious lifestyle the city was lacking. Norfolk’s oceanfront, a huge tenant driver to the area, recently completed, “The Nourishment Plan” which expanded § Ample Off-Street Parking and heightened the beach along Willoughby Spit. The Norfolk Premium Outlets, a 332,000 sq. ft. outlet mall located 3.5 § Easy Access to Interstate 64 miles away, opened June 2017 and has a total of 50 retail and restaurant locations for residents and tourists to experience high-end shopping. The completion of the outlets has added an additional 500 new full-time jobs to the local sub-market. § Close to Public Transportation (HRT Bus) The outlets paired with the location of I-64, give the residents easy access to the interstate, shopping, and restaurants. Unit Amenities § HVAC In All Units § 5th Bay Apartments: (20) Two Bedroom Units and (8) One Bedroom Units § Lois Lane Apartments: (29) Two Bedroom Units and (1) One Bedroom Unit § Lois Lane Duplexes: (10) Two Bedroom Units § Little Bay Apartments: (8) Two Bedroom Units and (2) One Bedroom