FOR SALE > Village at Lakeridge 6900 S. McCarran Boulevard Reno, NV 89509
COLLIERS INTERNATIONAL Class A Office and Retail 5520 Kietzke Lane, Suite 300 Reno, Nevada 89511 Complex in Heart of Reno +1 775.823.9666 www.colliers.com/reno
-CONFIDENTIAL OFFERING MEMORANDUM-
COLLIERS INTERNATIONAL | RENO RENO OFFICE SERVICES Colliers International | Reno Melissa Molyneaux, SIOR, CCIM Tim Ruffin Executive Managing Director Executive Vice President Senior Vice President +1 775 823 4670 DIRECT +1 775 823 4674 DIRECT +1 775 745 1594 CELL +1 775 762 7990 CELL [email protected] [email protected]
RENO RETAIL SERVICES Colliers International | Reno Roxanne Stevenson Senior Vice President + 1 775 823 4661 DIRECT +1 775 848-3673 CELL [email protected]
2 VILLAGE AT LAKERIDGE RENO, NEVADA
TABLE OF CONTENTS
04 Executive Summary 08 Property Description 12 Site Floor Plans 20 Major Tenant Profiles 25 Financial Highlights 30 Market Analysis
3 CONFIDENTIAL OFFERING MEMORANDUM INVESTMENT OFFERING Colliers International is pleased to present the opportunity to acquire the prestigious Village at Lakeridge office and retail complex in the heart of Reno, NV. The 71,678 square foot project consisting of four buildings is 100% leased with a mix of strong office and retail tenants spanning from Fortune 500 and publically traded entities such as Merrill Lynch, Bank of America, UBS, Apple/Braeburn Capital, Starbucks and CBRE to some of Reno’s strongest and most recognizable businesses such as Bradley Drendel and Jeanney, Sierra Nevada Properties and Moxie’s M3 Restaurant. The strong location on the corner of S. McCarran Boulevard and Lakeside Drive, diverse tenant mix, recent capital improvements and staggered rent roll makes for a sound investment. The lease expirations run between 9/30/19 and 8/31/23 allowing the next owner to capitalize on Reno’s rebounded economy and quickly growing rental rates. Given the superiority of this asset, there is very little tenant turnover and the asset has many long-term tenants who consistently renew. The property is in remarkable condition and was originally developed with high-end finishes and attention to detail. The Village at Lakeridge has very well maintained and has received recent capital improvements to all major systems.
The Village at Lakeridge is located in Reno’s best performing office and retail submarket. The location is truly in the center of Reno and benefits being in close proximity to US 395 /I580, near S. Virginia Street and located directly on S. McCarran Blvd., all which are main thoroughfares. Further, the property is located in an area with high household income and home values making it a true class A location. This submarket experiences the highest rental rates and lowest vacancy.
The building also receives additional revenue from parking fees in the underground parking garage as well as storage.
PROPERTY SUMMARY 6990, 6890, 6950 and 6900 Addresses: South McCarran Boulevard, Reno, NV 89509 APN: Washoe County Assessor’s Parcel Number 040-880-24 71,678 Square Feet in Four Buildings Building A 6990 S. McCarran (Mixed Use Building): 8,998 Sq Ft Building B 6890 S. McCarran (Starbucks Building): 2,601 Sq Ft Project Square Footages: Building C 6950 S. McCarran (Restaurant Building): 5,896 Sq Ft (note 3,392 Sq Ft main level and 2,584 Sq Ft lower level) Building D 6900 S. McCarran (Office Building): 54,302 Sq Ft Land Acres 4.86 acres or 211,702 square feet Parking: Surface and Underground Parking ($75/space per month)
4 EXECUTIVE SUMMARY
VILLAGE AT LAKERIDGE RENO 5 CONFIDENTIAL OFFERING MEMORANDUM
15 MILES RENO TENANT MIGRATION 19 MINUTES FROM SITE TAHOE RENO INDUSTRIAL CENTER
NORTH VALLEYS BATTERY SUPPLIES
DOWNTOWN RENO 25.5 MILES 30 MINUTES FROM SITE 4.0 MILES 10 MINUTES FROM SITE
RENO TAHOE INTERNATIONAL AIRPORT 4.0 MILES 11 MINUTES FROM SITE
SOUTH RENO
SUBJECT PROPERTY
4.5 MILES 9 MINUTES FROM SITE
Doctors XL
6 EXECUTIVETENANT PROFILES SUMMARY 15 MILES 19 MINUTES FROM SITE TAHOE RENO INDUSTRIAL CENTER
NORTH VALLEYS BATTERY SUPPLIES
DOWNTOWN RENO 25.5 MILES 30 MINUTES FROM SITE 4.0 MILES 10 MINUTES FROM SITE
RENO TAHOE INTERNATIONAL AIRPORT 4.0 MILES 11 MINUTES FROM SITE
SOUTH RENO
SUBJECT PROPERTY
4.5 MILES 9 MINUTES FROM SITE
Doctors XL
VILLAGE AT LAKERIDGE RENO 7 CONFIDENTIAL OFFERING MEMORANDUM
Site Information Site Description The site has been graded to create a flat pad for the building and adjacent parking areas. The natural slope in the area is away from the building on all sides. Storm water is directed by sheet flow across the asphalt paving to curb inlets. Water is then directed underground to the municipal system in the center of the adjacent streets. Site Location The Property is located at the southeast corner of S. McCarran Boulevard and Lakeside Drive. The surrounding properties include commercial and medical to the east, residential to the south, north and apartments to the west. The site is located ¾ mile east of US Highway 395 and approximately three miles south of Reno-Tahoe International Airport. Landscaping Maturing landscaping is provided throughout the project. Screening to the south to block the residential neighbors. Landscaping on the NW corner compliments the signage and visibility allowing the project to be seen and giving it an upscale and well maintained look. Signage Select tenant signage is located at the top of the NW corner of the office building. Monument signage is located at the property entrance along S. McCarran Blvd. Single story buildings have various signage for tenants. Paving Asphalt concrete paving and pavers are utilized at the driveways and parking areas around the perimeter of the building. Poured in place concrete curbs are provided at the perimeter of the parking area and around the landscaped island planters. Concrete aprons are provided at the vehicular access driveways.
8 PROPERTY DESCRIPTION
Building System Description Building Construction Plumbing The construction is steel frame with concrete floors. Domestic water supply is through copper pipes with domestic waste and ventilation though PVC pipes. Building Insulation Exterior Insulation and Finish Systems (EIFS). The product Elevators is also called synthetic stucco and refers to a multi-layered Two Otis Elevators, currently serviced by Otis. exterior finish. Fire/Life Safety Roof Construction The building is sprinklered with fire horns & strobes. Currently The office building has a single ply roof. The retail buildings being service by Overhead Fire. have metal roofs. Foundation HVAC Concrete pads. One Trane Intellipack, One Trane Package Unit & two gas fired Parking Lochinvar boilers. Updated Trace Tracer controls were installed The parking lot is asphalt and pavers. in 2016. Two Lochinvar boilers were installed in April 2017.
Utility Providers Real Estate Taxes Electricity Assessor Parcel Number NV Energy 040-880-24 Sewer Number of Parcels City of Reno Sewer 1 Water County/Reassessment Date Truckee Meadows Water Authority Washoe County Gas NV Energy
VILLAGE AT LAKERIDGE RENO 9 CONFIDENTIAL OFFERING MEMORANDUM
Zoning Flood Zone Zoning Designation Flood Zone General Office (GO) Shaded X
Interior Building Information
Walls Doors Conventional steel stud-framed walls, steel columns Solid core in factory finished metal frames. However all tenant spaces have been customized and may vary. Windows Aluminum-framed units with fixed panes of glazing Flooring Flooring consists of commercial grade carpet squares and vinyl Lobbies tile Carpet and marble Restrooms Finishes Restrooms vary from building to building. Interior walls of the office areas consist of gypsum board walls with a painted finish. However all tenant spaces have been Plumbing customized and may vary. Domestic water supply is through copper pipes with domestic waste and ventilation though PVC pipes. Ceiling Office area ceilings typically consist of a suspended ceiling system with recessed fluorescent lighting. However all tenant spaces have been customized and may vary.
Recent Capital Expenditures The Village at Lakeridge has received numerous recent upgrades in addition to being very well maintained. The Village at Lakeridge has been professionally managed by NAI Alliance and is in very good condition.
DESCRIPTION COST $200,000.00. Consisted of two new boilers, upgraded controls, four HVAC new compressors for the air handlers and entire system balanced. Parking Lot $46,212.00 Updated Security Cameras $7,767.24 Carpet for common areas $25,1350.00 Roof Replacement & Repairs $146,216.00 Landscape & Paver Repair $19,523.00 Outside Led lighting $5,950.00 Awning repairs $3,300.00
10 PROPERTY DESCRIPTION
VILLAGE AT LAKERIDGE RENO 11 CONFIDENTIAL OFFERING MEMORANDUM
Village at Lakeridge – Four Building Portfolio– APN: 040-880-24
6990 S. McCarran Blvd. 6950 S. McCarran Blvd. 9,286 Square Feet 3,392 Square Feet with 2,584 Square Foot Basement
6890 S. McCarran Blvd. 6900 S. McCarran Blvd. 2,601 Square Feet 58,624 Square Feet
12 PROPERTY DESCRIPTION
6900 S. McCarran Blvd. – First Floor
UBS PAINE WEBBER SF: 7,693 LED: 11/30/22 SUITE 1020
ASPEN MANAGEMENT CORP. SF: 4,563 LED: 4/31/22 SUITE 1010
COMMON AREA
MEL RAY HOMEGATE REALTY SF: 2,416 LED: 6/16/21 SUITE 1040
MERRIL LYNCH SF: 6,770 LED: 6/30/19 SUITE 1080
VILLAGE AT LAKERIDGE RENO 13 CONFIDENTIAL OFFERING MEMORANDUM
6900 S. McCarran Blvd. – Second Floor
PINNACLE CAPITAL MORTGAGE SF: 6,291 LED: 7/14/20 SUITE 2020
PHILIP STONE, ATTORNEY SF: 1,839 LED: 11/30/19 SUITE 2040 COMMON AREA
BRADLEY, DRENDEL & JEANNEY SF: 9,866 LED: 5/31/21 SUITE 2060
14
PROPERTY DESCRIPTION
3RD FLOOR PLAN - 6,017 USF 6,017 - PLAN FLOOR 3RD
CBRE
534 Lander Street, Reno, NV 89509 775-329-7624 FX 329-7626 FX 775-329-7624 89509 NV Reno, Street, Lander 534
j architecture arada
RENO, NEVADA 89509 NEVADA RENO,
6900 S. McCarran Blvd., Bldg. D Bldg. Blvd., McCarran S. 6900 Village at Lakeside at Village JOB ID: SHEET: RELEASE DATE: 6900 S. McCarran Blvd. – Third Floor
BRAEBURN/APPLE SF: 4,534 LED: 8/31/23 SUITE 3020
GCG SF: 1,879 LED: 11/30/21 SUITE 3040
WELLS GAMING SF: 1,475 LED: 2/28/20 SUITE 3030 COMMON AREA COMMON
CBRE SF: 6,976 LED: 10/14/21 SUITE 3000
VILLAGE AT LAKERIDGE RENO 15 CONFIDENTIAL OFFERING MEMORANDUM
6990 S. McCarran Blvd.
GOLDILOCKS SF: 1,594 LED: 3/31/23 SUITE A-100
SIERRA NEVADA PROPERTIES SF: 5,090 LED: 12/31/19 SUITE A-200/300
MAZA SALON & SPA SF: 2,314 LED: 8/31/21 SUITE A-700
16 PROPERTY DESCRIPTION
6950 S. McCarran Blvd. – Moxie 3 Restaurant – Street Level
MOXIE 3, INC. TOTAL SF: 5,896 LED: 10/31/24 SUITE C-100
VILLAGE AT LAKERIDGE RENO 17 CONFIDENTIAL OFFERING MEMORANDUM
6950 S. McCarran Blvd. – Moxie 3 Restaurant - Basement
MOXIE 3, INC. TOTAL SF: 5,896 LED: 10/31/24 SUITE C-100
18 PROPERTY DESCRIPTION
6980 S. McCarran Blvd.
STARBUCKS TOTAL SF: 1,600 LED: 7/31/21 SUITE B-100
BOBBY PAGES TOTAL SF: 882 LED: 9/31/19 SUITE B-150
VILLAGE AT LAKERIDGE RENO 19 CONFIDENTIAL OFFERING MEMORANDUM
CBRE Group, Inc. is CBRE Group, Inc. is the world’s largest commercial the world’s largest real estate services and investment firm, with 2017 commercial real estate revenues of $14.2 billion and more than 80,000 services and investment firm, with 2017 revenues employees (excluding affiliate offices). CBRE has been of $14.2 billion and more than 80,000 employees included in the Fortune 500 since 2008, ranking #207 (excluding affiliate offices). CBRE has been included in in 2018. It also has been voted the industry’s top brand the Fortune 500 since 2008, ranking #207 in 2018. It by the Lipsey Company for 17 consecutive years, and also has been voted the industry’s top brand by the has been named one of Fortune’s “Most Admired Lipsey Company for 17 consecutive years, and has been Companies” in the real estate sector for six years in a named one of Fortune’s “Most Admired Companies” in row. Its shares trade on the New York Stock Exchange the real estate sector for six years in a row. Its shares under the symbol “CBRE.” trade on the New York Stock Exchange under the symbol “CBRE.” CBRE offers a broad range of integrated services, including facilities, transaction and project CBRE offers a broad range of integrated services, management; property management; investment including facilities, transaction and project management; appraisal and valuation; property management; property management; investment leasing; strategic consulting; property sales; mortgage management; appraisal and valuation; property services and development services. leasing; strategic consulting; property sales; mortgage services and development services. (Source CBRE.com)
20 TENANT PROFILES
UBS Investment Bank provides services in rates and credit through its two business corporate, institutional, and units, Corporate Client Solutions and Investor Client wealth management clients Services. The Investment Bank is an active participant in with expert advice, innovative financial solutions, capital markets flow activities, including sales, trading outstanding execution and comprehensive access and market-making across a range of securities. to the world’s capital markets. It offers investment banking and capital markets, research, equities, foreign UBS is publically traded on the NYSE under ticker UBS. exchange, precious metals and tailored fixed income (Source UBS.com)
As of October 1, 2013, brokerage, investment advisory, and financial planning Merrill Lynch & Co., Inc. services; and proprietary and third-party wealth was acquired by Bank of management products and services comprising America Corporation. Merrill financial, retirement, and generational planning Lynch & Co. Inc., through its products and services to individuals, small-to mid-size subsidiaries, provides investment, financing, and businesses, and employee benefit plans, as well as other related services to individuals and institutions creates and manages wealth management products, in the United States and internationally. The company such as alternative investment products. Further, it is conducts selling and trading activities, and acts as a involved in origination, brokerage, dealer, and related market maker in securities, derivatives, currencies, and activities in swaps, options, forwards, exchange- other financial instruments; distributes fixed income, traded futures, other derivatives, commodities, and currency, commodity and equity products, and foreign exchange products. Additionally, the company derivatives; and provides financing, securities clearing, offers investment management and advisory, and settlement, and custody services, as well as engages related record-keeping services; securities clearance, in principal investing activities. It also assists clients settlement financing, and prime brokerage services; in raising capital through underwritings and private and research services. It serves corporations, placements of equity, debt and related securities, governments, institutions, and individuals. Merrill and loan syndications; and offers advisory services Lynch & Co., Inc. was founded in 1914 and was based on strategic issues, valuation, mergers, acquisitions, in New York, New York. and restructurings. In addition, the company provides (Source Bloomberg.com)
VILLAGE AT LAKERIDGE RENO 21 CONFIDENTIAL OFFERING MEMORANDUM
Starbucks Corporation is an service, an inviting atmosphere and expertly-roasted international coffee and coffeehouse brewed coffee. The company operates in the following chain based in Seattle Washington. locations across the world: The Americas; Europe, Starbucks was founded in 1971 and Middle East, Africa, and in China/Asia Pacific. Its brand is the largest coffeehouse company portfolio includes Starbucks Coffee Seattle’s Best in the world, with approximately Coffee, Teavana, Tazo, Evolution Fresh, La Boulange, 28,720 stores globally as of July 1, 2018 (Source: Ethos Water and Torrefazione Italia Coffee. emarketer.com). Starbucks sells drop brewed coffee, espresso-based hot drinks, other hot and cold drinks, This particular Starbucks location is one of the best snacks and retail items. Starbucks has become a beacon performing stores in northern Nevada. for coffee lovers on a global scale, providing genuine
M3 is Moxie’s latest both a full lunch and dinner menu, including large and restaurant concept in Reno varied appetizers. They have a full bar selection, a and is the sister to the original complete wine list and a variety of beers, both on tap Moxie’s that opened in 2000. and in the bottle. The interior is warm and inviting with M3 is a local, family owned a lounge, banquet room, casual dining or private dining restaurant that is designed for the area locals offering experience.
22 TENANT PROFILES
Bradley, Drendel and legal community and the unique environment in & Jeanney is one Nevada. Despite their Nevada roots, they do not limit of Nevada’s oldest their legal practice to the State of Nevada. Due to our personal injury law firms. Since 1957, they have been close proximity to the State of California the firm has committed to helping clients obtain justice through many years of experience in jury trials and settlement civil lawsuits and have focused exclusively on personal in serious injury cases in California. The firm has also injury for more than 30 years. The law firm serves clients been involved in cases for families who live in other throughout Nevada and in Northeastern California. states, including Utah, Oregon, Idaho, Wyoming, Currently, all of the firm’s named partners are natives of Arizona and many other jurisdictions. Nevada so they intimately understand the area’s social
Sierra Nevada Properties Braeburn Capital is an was formed in August of asset management company 1979. The company has based in Reno, Nevada and a always been locally owned subsidiary of Apple Inc. Apple and operated and is one of created the company on October 3, 2005 to better the most highly respected real estate companies in the manage its assets. The location in Nevada has some area. With more than 100 full time sales associates, tax advantages for the subsidiary. The name Braeburn they are consistently one of the leading companies in refers to a particular cultivar of apple. This is a play on the area. They stress professionalism in the company the name of the parent company Apple Inc. and are effective in attracting experienced agents as well as many new licensees. Their Referral/Relocation In October 2012, CNET reported that Braeburn had Team consists of specially selected professionals who US$117.2 billion under management, making it “the are experienced in working with relocating companies world’s biggest hedge fund.” Today is it is estimated and individuals. They have successfully worked with they have over 268 billion under management. hundreds of relocating families per year that have decided to move to our dynamic, progressive and beautiful community. Sierra Nevada Properties also has a Commercial Division to assist in all aspects of a company move. VILLAGE AT LAKERIDGE RENO 23 CONFIDENTIAL OFFERING MEMORANDUM
24 EXECUTIVE SUMMARY
FINANCIAL HIGHLIGHTS
• History of long-term tenants • Majority of Tenants renew with little to no TI Allowance • Recent building upgrades and capital expenditures • Strong tenant mix with many credit tenants
CURRENT & PROJECTED NOI 2018 NOI $1,110,059.00 2019 NOI $1,170,959.00 2020 NOI $1,197,559.00
The Village at Lakeridge provides for long term stable income and low capital infusion required in a strong and growing market.
Northern Nevada is experiencing a strong comeback. The area was among the hardest hits states with the recession beginning in 2007. However, it is now experiencing one of the strongest recoveries. In addition to its significant influx of major new businesses, the region prides itself on its life-work balance. Nevada now reports a 3.9% unemployment rate coinciding with an estimated 2.6% annual employment growth and Washoe County’s unemployment rate was 3.5% as of July 2018. Recent tech and construction activity has surged the economy and GDP has shown significant continual growth ($147.5 billion in 2016 – a 13% jump from $128.3 billion in 2006).
Source: Nevada Business Times
Additional Revenue Sources The breakdown of the CAM estimates, parking and storage for 2018 is as follows:
ADDITIONAL REVENUE SOURCES CAM Estimate $67,674.00 Parking $23,120.00 Storage $11,565.00 TOTAL $102,359.00
VILLAGE AT LAKERIDGE RENO 25 CONFIDENTIAL OFFERING MEMORANDUM
2018 – 2020 Pro Forma Net Operating Income (NOI) Projections
2018 2019 2020
REVENUE Rental Income 1,721,700 1,796,400 1,842,300 Operating Expense Recoveries 102,359 102,359 102,359 (CAM's/Storage/Parking) TOTAL REVENUE 1,824,059 1,898,759 1,944,659
2018 2019 2020
PROPERTY RECOVERABLE EXPENSES Electricity/Gas 95,800 98,700 101,700 Water 3,300 3,400 3,600 Water-irrigation 10,400 10,800 11,200 Sewer 6,100 6,300 6,500 Janitorial Contract/Supplies 66,100 68,100 70,200 Trash Removal 15,500 16,000 16,500 HVAC Repairs/Maintenance 48,000 49,500 51,000 Elevator Repairs/Maintenance 6,000 6,200 6,400 Building Repairs/Maintenance 61,000 62,900 64,800 Roof Repairs/Maintenance 12,000 12,400 12,800 Parking Snow Removal Repair/ 34,000 35,100 36,200 Maintenance Landscape 21,500 22,200 22,900 Security Patrols 12,700 13,100 13,500 Fire/Safety Monitoring 13,600 14,100 14,600 Office Lights/Music/Holiday Décor/ 15,600 16,100 16,600 Signs Management Fees 51,600 53,200 54,800 Postage/Copies/Office Supply/ 1,200 1,300 1,400 Telephone Washoe County Taxes 153,600 158,300 163,100 Insurance 20,400 21,100 21,800 TOTAL RECOVERABLE EXPENSES 648,400 668,800 689,600
2018 2019 2020
NON-RECOVERABLE EXPENSES Legal/Accounting 24,800 25,600 26,400 Miscellaneous/License Fees 3,300 3,400 3,600 Leasing Commissions 35,700 28,100 25,500 Tenant Relations 1,800 1,900 2,000 TOTAL NON-RECOVERABLE EXPENSES 65,600 59,000 57,500
NET OPERATING INCOME 1,110,059 1,170,959 1,197,559
26 FINANCIAL ANALYSIS
2018 Rent Roll Detail by Building
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # A A-100 Goldilocks 04/01/13 03/31/23 1,594 2,710 2,710 2,710 3,029 3,029 3,029 3,029 3,029 3,029 3,108 3,108 3,108 35,625 A-200/300 GDPS 02/01/12 12/31/19 5,090 10,180 10,180 10,180 10,180 10,180 10,180 10,180 10,180 10,180 10,180 10,180 10,180 122,160 A-700 MaZa Salon & Spa 07/07/02 08/31/21 2,314 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,281 51,371 Total Base Rent - Bldg # A 8,998 17,171 17,171 17,171 17,490 17,490 17,490 17,490 17,490 17,490 17,569 17,569 17,569 209,156
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # B B-100 Starbucks Coffee 07/20/03 07/31/21 1,600 6,208 6,208 6,208 6,208 6,208 6,208 6,208 7,376 7,376 7,376 7,376 7,376 80,336 B-150 Bobby Pages 06/01/11 09/30/19 882 1,896 1,896 1,896 1,896 1,896 1,896 1,896 1,896 1,896 1,940 1,940 1,940 22,888 Total Base Rent - Bldg # B 2,482 8,104 8,104 8,104 8,104 8,104 8,104 8,104 9,272 9,272 9,316 9,316 9,316 103,224
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # C C-100 Moxie 3, Inc. 11/01/14 10/31/24 5,896 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 36,960 Total Base Rent - Bldg # C 5,896 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 36,960
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # D Aspen D-1010 Management Corp 04/01/09 03/31/19 4,563 8,715 8,715 8,715 8,943 8,943 8,943 8,943 8,943 8,943 8,943 8,943 8,943 106,637 (Paragon) D-1020 UBS 01/01/03 11/30/22 7,693 16,155 16,155 16,155 16,155 16,155 16,155 16,155 16,155 16,155 16,155 16,155 16,640 194,348 D-1040 Melvin Ray 04/17/03 06/16/21 2,416 4,953 4,953 4,953 4,953 4,953 5,009 5,074 5,074 5,074 5,074 5,074 5,074 60,215 D-1080 Merrill Lynch 11/01/02 06/30/19 6,770 14,644 14,644 14,644 14,644 14,644 14,644 15,083 15,083 15,083 15,083 15,083 15,083 178,358 Bradley, Drendel D-2000/2030/2060 06/01/11 05/31/21 9,866 20,103 20,103 20,103 20,103 20,103 10,844 21,688 21,688 21,688 21,688 21,688 21,688 241,484 & Jeanney Pinnacle Capital D-2020 07/15/15 07/14/20 6,291 12,897 12,897 12,897 12,897 12,897 12,897 13,069 13,211 13,211 13,211 13,211 13,211 156,504 Mortgage Philip Stone, D-2040 12/01/09 11/30/19 1,839 3,678 3,678 3,678 3,678 3,678 3,678 3,678 3,678 3,678 3,678 3,678 3,770 44,228 Attorney D-3000 CB Richard Ellis 04/15/11 10/14/21 6,976 15,572 15,572 15,572 15,572 15,572 15,572 15,572 15,829 16,040 16,040 16,040 16,040 188,993 D-3020 Braeburn/Apple 04/01/11 08/31/23 4,534 8,841 9,612 9,612 9,612 9,612 9,612 9,612 9,612 9,748 9,748 9,748 9,748 115,118 D-3030 Wells Gaming 04/01/10 02/28/20 1,475 2,895 2,895 2,982 2,982 2,982 2,982 2,982 2,982 2,982 2,982 2,982 2,982 35,608 Gaming Capital D-3040 12/01/16 11/30/21 1,879 4,228 4,228 4,228 4,228 4,228 4,228 4,228 4,228 4,228 4,228 4,228 4,322 50,827 Group Total Base Rent - Bldg # D 54,302 112,680 113,451 113,538 113,766 113,766 104,564 116,083 116,482 116,830 116,830 116,830 117,500 1,372,320
TOTAL BASE RENT 71,678 141,035 141,806 141,893 142,440 142,440 133,237 144,757 146,324 146,671 146,795 146,795 147,465 1,721,660
Assume leases to renew. Project $.05 increase per sq. ft per year.
VILLAGE AT LAKERIDGE RENO 27 CONFIDENTIAL OFFERING MEMORANDUM
2019 Rent Roll Detail by Building – Projected
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # A A-100 Goldilocks 04/01/13 03/31/23 1,594 3,108 3,108 3,108 3,188 3,188 3,188 3,188 3,188 3,188 3,188 3,188 3,188 38,017 A-200/300 GDPS 02/01/12 12/31/19 5,090 10,435 10,435 10,435 10,435 10,435 10,435 10,435 10,435 10,435 10,435 10,435 10,435 125,214 A-700 MaZa Salon & Spa 07/07/02 08/31/21 2,314 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,281 51,372 Total Base Rent - Bldg # A 8,998 17,824 17,824 17,824 17,904 17,904 17,904 17,904 17,904 17,904 17,904 17,904 17,904 214,603
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # B B-100 Starbucks Coffee 07/20/03 07/31/21 1,600 7,376 7,376 7,376 7,376 7,376 7,376 7,376 7,376 7,376 7,376 7,376 7,376 88,512 B-150 Bobby Pages 06/01/11 09/30/22 882 1,940 1,940 1,940 1,940 1,940 1,940 1,940 1,940 1,940 1,985 1,985 1,985 23,417 Total Base Rent - Bldg # B 2,482 9,316 9,316 9,316 9,316 9,316 9,316 9,316 9,316 9,316 9,361 9,361 9,361 111,929
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # C C-100 Moxie 3, Inc. 11/01/14 10/31/24 5,896 3,160 3,160 3,160 3,160 3,160 3,160 3,160 3,160 3,160 3,160 3,160 3,160 37,920 Total Base Rent - Bldg # C 5,896 3,160 3,160 3,160 3,160 3,160 3,160 3,160 3,160 3,160 3,160 3,160 3,160 37,920
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # D Aspen D-1010 Management Corp 04/01/09 03/31/22 4,563 8,943 8,943 8,943 9,810 9,810 9,810 9,810 9,810 9,810 9,810 9,810 9,810 115,120 (Paragon) D-1020 UBS 01/01/03 11/30/22 7,693 16,640 16,640 16,640 16,640 16,640 16,640 16,640 16,640 16,640 16,640 16,640 17,139 200,179 D-1040 Melvin Ray 04/17/03 06/16/21 2,416 5,074 5,074 5,074 5,074 5,074 5,130 5,194 5,194 5,194 5,194 5,194 5,194 61,665 D-1080 Merrill Lynch 11/01/02 06/30/19 6,770 15,083 15,083 15,083 15,083 15,083 15,083 15,436 15,436 15,436 15,436 15,436 15,436 183,110 Bradley, Drendel D-2000/2030/2060 06/01/11 05/31/21 9,866 21,688 21,688 21,688 21,688 21,688 22,338 22,338 22,338 22,338 22,338 22,338 22,338 264,806 & Jeanney Pinnacle Capital D-2020 07/15/15 07/14/20 6,291 13,211 13,211 13,211 13,211 13,211 13,211 13,384 13,526 13,526 13,526 13,526 13,526 160,278 Mortgage Philip Stone, D-2040 12/01/09 11/30/22 1,718 3,770 3,770 3,770 3,770 3,770 3,770 3,770 3,770 3,770 3,770 3,770 3,848 45,318 Attorney D-3000 CB Richard Ellis 04/15/11 10/14/21 6,976 16,040 16,040 16,040 16,040 16,040 16,040 16,040 16,304 16,521 16,521 16,521 16,521 194,668 D-3020 Braeburn/Apple 04/01/11 08/31/23 4,477 9,748 9,748 9,748 9,748 9,748 9,748 9,748 9,748 10,041 10,041 10,041 10,041 118,147 D-3030 Wells Gaming 04/01/10 02/28/20 1,475 2,982 2,982 3,071 3,071 3,071 3,071 3,071 3,071 3,071 3,071 3,071 3,071 36,676 Gaming Capital D-3040 12/01/16 11/30/21 1,879 4,322 4,322 4,322 4,322 4,322 4,322 4,322 4,322 4,322 4,322 4,322 4,416 51,954 Group Total Base Rent - Bldg # D 54,124 117,500 117,500 117,590 118,456 118,456 119,163 119,753 120,159 120,668 120,668 120,668 121,340 1,431,921
TOTAL BASE RENT 71,500 147,800 147,800 147,890 148,836 148,836 149,543 150,133 150,538 151,048 151,092 151,092 151,764 1,796,373
Assume leases to renew. Project $.05 increase per sq. ft per year. Potential new Tenant.
28 FINANCIAL ANALYSIS
2020 Rent Roll Detail by Building – Projected
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # A A-100 Goldilocks 04/01/13 03/31/23 1,594 3,188 3,188 3,188 3,268 3,268 3,268 3,268 3,268 3,268 3,268 3,268 3,268 38,973 A-200/300 GDPS 02/01/12 12/31/22 5,090 10,689 10,689 10,689 10,689 10,689 10,689 10,689 10,689 10,689 10,689 10,689 10,689 128,268 A-700 MaZa Salon & Spa 07/07/02 08/31/21 2,314 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,281 4,628 4,628 4,628 4,628 52,760 Total Base Rent - Bldg # A 8,998 18,158 18,158 18,158 18,238 18,238 18,238 18,238 18,238 18,585 18,585 18,585 18,585 220,001
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # B B-100 Starbucks Coffee 07/20/03 07/31/21 1,600 7,376 7,376 7,376 7,376 7,376 7,376 7,376 7,376 7,376 7,376 7,376 7,376 88,512 B-150 Bobby Pages 06/01/11 09/30/22 882 1,985 1,985 1,985 1,985 1,985 1,985 1,985 1,985 1,985 2,029 2,029 2,029 23,946 Total Base Rent - Bldg # B 2,482 9,361 9,361 9,361 9,361 9,361 9,361 9,361 9,361 9,361 9,405 9,405 9,405 112,458
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # C C-100 Moxie 3, Inc. 11/01/14 10/31/24 5,896 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240 38,880 Total Base Rent - Bldg # C 5,896 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240 38,880
SUITE TENANT NAME LEASE START LEASE END SQ. FT. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL BASE RENT INCOME Building # D Aspen D-1010 Management Corp 04/01/09 03/31/22 4,563 9,810 9,810 9,810 10,039 10,039 10,039 10,039 10,039 10,039 10,039 10,039 10,039 119,781 (Paragon) D-1020 UBS 01/01/03 11/30/22 7,693 17,139 17,139 17,139 17,139 17,139 17,139 17,139 17,139 17,139 17,139 17,139 17,653 206,184 D-1040 Melvin Ray 04/17/03 06/16/21 2,416 5,194 5,194 5,194 5,194 5,194 5,250 5,074 5,074 5,074 5,074 5,074 5,074 61,666 D-1080 Merrill Lynch 11/01/02 06/30/22 6,770 15,436 15,436 15,436 15,436 15,436 15,436 15,774 15,774 15,774 15,774 15,774 15,774 187,258 Bradley, Drendel D-2000/2030/2060 06/01/11 05/31/21 9,866 22,338 22,338 22,338 22,338 22,338 23,008 23,008 23,008 23,008 23,008 23,008 23,008 272,750 & Jeanney Pinnacle Capital D-2020 07/15/15 07/14/20 6,291 13,526 13,526 13,526 13,526 13,526 13,526 13,840 13,840 13,840 13,840 13,840 13,840 164,196 Mortgage Philip Stone, D-2040 12/01/09 11/30/22 1,718 3,848 3,848 3,848 3,848 3,848 3,848 3,848 3,848 3,848 3,848 3,848 3,951 46,283 Attorney D-3000 CB Richard Ellis 04/15/11 10/14/21 7,032 16,521 16,521 16,521 16,521 16,521 16,521 16,521 16,792 17,016 17,016 17,016 17,016 200,503 D-3020 Braeburn/Apple 04/01/11 08/31/23 4,534 10,041 10,041 10,041 10,041 10,041 10,041 10,041 10,041 10,342 10,342 10,342 10,342 121,691 D-3030 Wells Gaming 04/01/10 02/28/20 1,475 3,071 3,071 3,142 3,142 3,142 3,142 3,142 3,142 3,142 3,142 3,142 3,142 37,560 Gaming Capital D-3040 12/01/16 11/30/21 1,879 4,416 4,416 4,416 4,416 4,416 4,416 4,416 4,416 4,416 4,416 4,416 4,510 53,082 Group Total Base Rent - Bldg # D 54,237 121,340 121,340 121,411 121,640 121,640 122,366 122,842 123,113 123,638 123,638 123,638 124,349 1,470,955
TOTAL BASE RENT 71,613 152,099 152,099 152,169 152,478 152,478 153,204 153,680 153,952 154,823 154,867 154,867 155,579 1,842,295
Assume leases to renew. Project $.05 increase per sq. ft per year. Potential new Tenant.
VILLAGE AT LAKERIDGE RENO 29 CONFIDENTIAL OFFERING MEMORANDUM
Nevada & Reno’s Comeback Story Is Just Beginning Nevada was among the handful of states hit hard by the recession beginning in 2007. Nevada lost 14% of its workforce, 40% of houses foreclosed with the average home price dipping below $140,000, and unemployment reached an astounding 18%. Consequently, Nevada is also one of the states experiencing its strongest recovery.
NEVADA 2017 3 MILLION 4% RESIDENTS UNEMPLOYMENT IN 2017 2.6% ANNUAL EMPLOYMENT GROWTH
The tech activity and major business advantages the state has to offer has been a significant incentive for companies to begin relocating to Reno. Most notably,Tesla’s Gigafactory is currently under construction at the Tahoe Reno Industrial Center. The factory is expected to be complete in 2020 and will house an estimated 10,000 employees.Google just purchased 1,210 acres in the same area as Tesla’s Gigafactory, Apple plans to invest $1 billion in expanding its Reno data center just east of Reno, Switch is in the process of building its $1 billion SUPERNAP data center, Amazon recently built a new 630,000 square foot warehousing center, and eBay is investing more than $400 million in Nevada to expand its data operations.
MAJOR TAX ADVANTAGES NO PERSONAL SALES AND USE TAX INCOME TAX ABATEMENT NO CORPORATE DATA CENTER INCOME TAX ABATEMENT
30 EXECUTIVE SUMMARY
Strong Market Village at Lakeridge is located in the heart of the Meadowood submarket of Reno, well known by its nickname, the “Biggest Little City in the World”. Reno spans 7.2 million square feet of office space; 3.8 million of that being Class A inventory.The city currently has a Class A vacancy rate of 11.0% and a three-year high net absorption totaling 63,786 square feet. The Meadowood submarket consists of 2.3 million square feet of office space and currently reports a vacancy rate of 9.9%. While average Class A rent in Meadowood averages $1.89 per SF, this does not take into account unlisted prices, of which many are transacted over $2.00 per SF.
$1.89PSF $1.70PSF 11.0% AVERAGE MEADOWOOD AVERAGE RENO DIRECT VACANCY CLASS A RENTAL RATE RENTAL RATE RATE
Strong Economic Transformation As it is announced that large and recognizable companies are moving to the area, businesses, investors and developers from across the country are rushing to jump on the bandwagon. Recent tech and construction activity has surged the economy, and GDP for Nevada has shown significant continual growth ($147.5 billion in 2016 – a 13% jump from $128.3 billion in 2006). With a growing number of flourishing startups in the Reno area such as Filament, Resgrid, Flirtey, and No-IP, companies are also beginning to attract venture capital funding. In 2016 alone, Nevada companies attracted over $40 million in venture capital funds. This rapid influx of growth and revenue is expected to continue in the upcoming years.
VILLAGE AT LAKERIDGE RENO 31 CONFIDENTIAL OFFERING MEMORANDUM
MARKET ANALYSIS
Reno-Tahoe The Greater Reno-Tahoe business and economic climate has been Reno’s story is still being written. The city is still in transition rapidly changing over the last decade and is now experiencing from being the gaming capital of Northern Nevada to a vibrant a major boom. As it is announced that large and recognizable entrepreneurial economy. The city has succeeded in attracting companies are moving to the area, businesses, investors and large corporations like Apple, Google, and Tesla, and nurtured developers from across the country are rushing to jump on the a homegrown crop of tech startups like Flirtey and Filament. bandwagon. Nevada benefits from low taxes on businesses, and Much of the job growth in the region can be attributed to Tesla, a satisfying quality of life. which is building a “Gigafactory” in close proximity to Reno. Once the factory has been fully completed, it will employ over 10,000 people.
Emerging Venture Capital Opportunities With a growing number of flourishing startups in the Reno area, companies are starting to attract venture capital funding. In 2016, Reno companies attractedover $41 million in venture capital funds. The growth in startup activity has attracted venture capital firms to the region as well, including Ozmen Ventures, and Battle Born Venture.
Top Funded Startups
ElectraTherm Renewable Energy IQVCloud $35.3 Million Filament Flirtey Software Robotics Cyber Security $22.4 Million $16 Million $11.2 Million
Sonocine Cyrcadia Health Onstream Airwire Technologies Sonocine Biotechnology Software Telecommunications $7.1 Million $2.8 Million $2 Million $7.5 Million
32 MARKET ANALYSIS
Data Centers on the Rise The Reno-Sparks region has become home to a flourishing data center industry over the past five years. This is due to the area’s abundance of land, climate, proximity to a fiber optic network and access to clean energy sources such as solar and geothermal. In 2012, Apple built the first data center in the area, a 412,000-square foot iCloud storage facility. In mid-2017, Apple announced plans to expand and invest an additional $1 billion into the project, including a new warehouse facility in downtown Reno. Switch currently operates the world’s largest single building data center in the region, The Citadel Campus, which consists of over 1 million square feet with eBay as the anchor tenant.
Switch also has expansion plans; once finished, their Reno-Tahoe data center will be the biggest and most advanced in the world, with a campus measuring over 7 million square feet. Google also recently purchased 1,200 acres of land in the Reno-Tahoe region with plans to build a new state of the art data storage facility.
Blossoming Tech Industry With companies making the decision to move their operations into friendlier tax structures becoming more frequent, Northern Nevada has become a hot spot for tech companies looking to expand. The pioneer of bringing tech companies to the Reno- Tahoe region is Microsoft. The tech giant moved its Americas Operations Center to Reno in 1997. The facility is one of only three regional centers Microsoft maintains in the world. The Americas Operations Center has approximately 500 employees and manages operations for the North and Latin American markets. Other established tech companies have started to relocate to Reno in recent years including CAEK, a female owned and operated healthcare company, and Capstak, a commercial real estate tech company.
In recent years, Reno has become a hotspot for emerging tech startups. The Information Technology and Innovation Foundation conducted a study that found the Reno-Tahoe showed significant high-tech activity from both large tech companies and startups, especially when compared to economically similar districts. There is even an area of the city called “Startup Row” located in Reno next to the Truckee River, that features cloud computing companies, fitness applications, a vibrant co-working collective, and a hardware developer that builds microcontrollers. Startups located in the region include Filament, Resgrid, Flirtey, and No-IP.
VILLAGE AT LAKERIDGE RENO 33 CONFIDENTIAL OFFERING MEMORANDUM
DOWNTOWN RENO TECH INFLUX IN RENO 7 MILES 11 MINUTES FROM SITE
RENO TAHOE INTERNATIONAL AIRPORT 4 MILES 11 MINUTES FROM SITE
SUBJECT PROPERTY
MCCARRAN BOULEVARD
NEIL ROAD
Circle 8 Gaming
DOUBLE R BOULEV
ARD
SOUTH VIR Doctors XL
GINIA S
TREE
T MARKET ANALYSIS
DOWNTOWN RENO 7 MILES 11 MINUTES FROM SITE
RENO TAHOE INTERNATIONAL AIRPORT 4 MILES 11 MINUTES FROM SITE
SUBJECT PROPERTY
MCCARRAN BOULEVARD
NEIL ROAD
Circle 8 Gaming
DOUBLE R BOULEV
ARD
SOUTH VIR Doctors XL
GINIA S
TREE
T CONFIDENTIAL OFFERING MEMORANDUM
Manufacturing and Fulfillment In addition to large tech companies moving to Reno, many companies have opened manufacturing and fulfillment centers in the region. Amazon moved one of their distribution warehouses into a 680,000-square foot e-commerce, high clearance building that employs 600 associates. Electric vehicle manufacturer, Cenntro Automotive also opened their new headquarters in an 80,000-square foot building in Sparks. Other companies that maintain fulfillment and manufacturing facilities in the Reno area include Thrive Market and Zulily.
In June of 2014, Tesla broke ground on a new “Gigafactory” which, when finished, will be the world’s largest lithium ion battery factory. It will employ over 10,000 people and will run entirely on renewable energy. Tesla was one of the first notable companies to build a facility in Reno after the great recession, and has a large role in fueling growth throughout the region.
Tesla Gigafactory by the numbers
10 MILLION SQUARE FEET
10,000 ADDED JOBS
BILLION INVESTMENT $5
500,000 FUTURE PRODUCTION CAPABILITY OF CARS PER YEAR
36 MARKET ANALYSIS
Reno Office Market The Reno office market consists of 7.2 million square feet. The Property is part of the Meadowood submarket, which consists of 2.3 million square feet of space. Due to booming economic activity in the region, the office market in Reno-Sparks is flourishing. The market is very busy for both leasing and sales activity and the momentum is expected to continue.
Highlights-Q2 2018
Reno Market Meadowood Submarket
MILLION SQUARE FEET MILLION SQUARE FEET 7.2 TOTAL INVENTORY 2.3 TOTAL INVENTORY
MILLION 3.8 SQUARE FEET 1.9 MILLION SQUARE FEET TOTAL CLASS A INVENTORY TOTAL CLASS A INVENTORY
CLASS A VACANCY CLASS A VACANCY 11.0% 9.5%
$1.91 CLASS A ASKING RATE $1.62 AVERAGE ASKING RATE
63,786 SF NET ABSORPTION 31,569 SF NET ABSORPTION 3 YEAR HIGH
Reno Market Indicators Relative to prior period Q2 2018 Q3 2018* Vacancy ▼ ▼ Net Absorption ▲ ◄► Completions ◄► ◄► Rental Rate ▲ ▲ *Projected
VILLAGE AT LAKERIDGE RENO 37 CONFIDENTIAL OFFERING MEMORANDUM
Net Absorption Over the past five years, net absorption in Reno has remained mostly positive. The market recorded 10 consecutive quarters of positive absorption between the Q3 2014 and Q4 2016. Further to this end, the region has gained over 600,000 square feet in absorption since the first quarter of 2012.In the second quarter of 2018, Reno recorded 63,786 square feet of positive net absorption, the largest amount since 2013. The Meadowood submarket accounted for a large amount of this growth with 31,569 square feet.
Reno-Sparks Net Absorption
Vacancy Rate New Completions
38 MARKET ANALYSIS
Vacancy As of the 2nd quarter of 2018, vacancy in Reno is at an all-time low of 10.9%, and the rate is forecasted to continue declining. Over the past five years vacancy decreased from a high of 20% in 2012 to 10.9% in 2018. This includes six consecutive quarters of decline between Q4 2015 and Q1 2018. Currently, in the Meadowood submarket vacancy is 9.9% down from 10.0% in the first quarter of 2018. Rental Rates Rental rates have remained steady in Reno over the past five years. Between 2012 and 2016 rates hovered between $1.34 and $1.44 FS. Between the 4th quarter of 2016 and the present rental rates have started to show growth, increasing 17% from $1.44 FS to $1.70 FS. It is forecasted that this growth will continue over the course of the year.
Reno-Sparks Vacancy vs Rental Rates
Vacancy Rate Asking Rate
VILLAGE AT LAKERIDGE RENO 39 CONFIDENTIAL OFFERING MEMORANDUM
Development Demand for Class A office space is high in Reno. There is one 40,000 square foot Class A office building currently under construction in the Reno market. It is anticipated that more construction will follow as Reno’s economy continues to expand. In addition to a forecasted increase in office construction - Reno is experiencing a boom in industrial and residential construction. 84 projects will add more than 10,000 homes and apartments to the Reno-Sparks region over the next five years.Over 700,000 square feet of industrial space is currently under construction in the region as well.
Selected Reno Development
1 3 Mountain View Corporate Center & Pine Multifamily - 312 Units
Est. Date of Completion Est. Date of Completion Spring, 2018 Q4, 2017
2 4 Rancharrah Sierra Vista Oce - 20,000 SF Multifamily - 336 Units
Est. Date of Completion Est. Date of Completion Q4 2018 Q4, 2017
5 Summit Club 3 Multifamily - 574 Units
Est. Date of Completion TBD
6 Steamboat Creek Multifamily - 468 Units
2 Completed 1 TBD
4 6 5
Name Address Type Size Stage Completion Date 1 Mountain View Corporate 5470 Krietzke Lane 40,826 SF Under Construction Spring 2018 2 Rancharrah 6001 Talbot Lane 20,000 SF Approved Q4 2018 3 Center & Pine 131 Pine St Multifamily 312 Units Under Construction Q4 2017 4 Sierra Vista 500 ArrowCreek Pkwy Multifamily 336 Units Under Construction Q4 2017 5 Summit Club Mt Rose Pkwy and Interstate 580 Multifamily 574 Units Under Construction TBD 6 Steamboat Creek Geiger Grade and South Viriginia St Multifamily 468 Units Planning stages TBD
40 MARKET ANALYSIS
Reno Housing Market With the massive influx of business to the region, the Reno Real Estate Snapshot Reno housing market is exploding. The August 2018 July 2016 August 2018 Reno-Sparks Association of Realtors report states the median price of an existing home was $372,551 in Houses Sold 601 542 August, up more than 6.0% since August 2017, when Median Sale Price $318,000 $372,551 the median housing price was $350,000. This marks a Median Price/SF $177 $218 252% increase from the bottom of the market average of $145,000 in March of 2012.
Reno Median Sale Price
VILLAGE AT LAKERIDGE RENO 41 CONFIDENTIAL OFFERING MEMORANDUM
Sale Comparables
10
1
7 8
4 9
VILLAGE AT LAKERIDGE 2 13
12 5 6
11 3
S S S A S S S R S 1 E R 2 R OR 3 R 4 R R 5 R N 6 R R 7 R R 8 R N N R 9 N R R R 10 R 11 R R 12 R 13 R E
42 MARKET ANALYSIS
VILLAGE AT LAKERIDGE RENO 43 CONFIDENTIAL OFFERING MEMORANDUM
REGIONAL OVERVIEW
Nevada State Economic Overview & Forecast
Nevada State was among the handful of states hit hard by the recession beginning in 2007. Nevada lost 14% of its workforce, 40% of houses foreclosed, and unemployment reached an astounding 18%. Consequently, Nevada is also one of the states experiencing its strongest recovery. With an estimated population of 3 million as of 2016, Nevada now reportsa 3.9% unemployment rate coinciding with an estimated 2.6% annual employment growth. Recent tech and construction activity has surged the economy and GDP has shown significant continual growth ($147.5 billion in 2016 – a 13% jump from $128.3 billion in 2006). Source: Nevada Business Times
Nevada Tech Boom
Numerous major Silicon Valley tech tenants are beginning to expand their footprint in Nevada. Most notably, electric car company, Tesla, is a building a $5 billion “gigafactory” in the Nevada desert outside of Reno, which will generate an estimated 10,000 jobs. eBay plans to invest more than $400 million in Nevada State to expand its data operations.Switch is in the process of building its $1 billion SUPERNAP data center – expected to be the largest data center in the world once complete – the project will be built in seven phases totaling 7.2 million square feet. Amazon built a new 630,000 square foot warehousing center. Google recently purchased 1,210 acres of land at the Tahoe Reno Industrial Center; plans for the site are not yet known. And in May, 2017, Apple announced their plans to invest $1 billion in expanding its data center in Reno Technology Park – this will add an additional 100 jobs.
44 REGIONALREGIONAL OVERVIEWOVERVIEW
VILLAGE AT LAKERIDGE RENO 45 CONFIDENTIAL OFFERING MEMORANDUM
AMAZON WAREHOUSE SUPERNAP
GIGAFACTORY
ENTREPRENEURSHIP IS ALSO GROWING AS NEVADA CURRENTLY HAS THE HIGHEST RATE OF STARTUPS, ACCORDING TO THE KAUFFMAN FOUNDATION’S INDEX OF STARTUP ACTIVITY WITH 107 STARTUPS PER 1,000 EMPLOYER BUSINESSES (FORBES, 2016).
46 REGIONAL OVERVIEW
This recent supercharge in Reno is expected to infuse the strengthening economy not only incentivizing startups and other businesses to move to the region, but also continuing to diversify the state drawing families, culture, and tremendous quality of life.
RENO SNAPSHOT
30% BEST PLACES FOR 451,900 OF RESIDENTS #47 BUSINESS AND CAREERS RESIDENTS ARE COLLEGE (FORBES) EDUCATED
$ 4% 53,029 105.9 UNEMPLOYMENT COST OF LIVING IS 5.8% MEDIAN HOUSEHOLD SQUARE MILES IN 2017 LOWER THAN NATIONAL INCOME AVERAGE
VILLAGE AT LAKERIDGE RENO 47 CONFIDENTIAL OFFERING MEMORANDUM
The City of Reno Tech Activity & Business Advantage – Nevada and Reno’s Tremendous Opportunity for Growth The City of Reno, nicknamed the “Biggest Little City in the Nevada is currently the 3rd fastest job growth state World”, is centrally located in the Washoe County in the Major Tax Advantage northwestern region of Nevada. Reno is located 38 miles east • No personal income tax of Lake Tahoe, 132 miles east of Sacramento, and 219 miles • No corporate income tax east of San Francisco. Reno is the third highest populated city • No taxes on corporate shares of Nevada behind Las Vegas and Henderson. The economy has • No franchise tax enjoyed steady growth over the past few years as property • No unitary tax values are steadily increasing, the population is growing, and industries are diversifying - including technology, distribution, • No estate tax warehousing, and manufacturing. • Competitive sales and property tax rates Since 2014, $30 million from the City and $1 billion in private investment has been dedicated to ensure that downtown Incentives to Expand, Relocate, or Startup Reno remains modern and beautiful. These funds were • Sales and Use tax abatement primarily invested in infrastructure & facilities, a newly • Modified Business tax abatement established “maintenance district” and a “police district” • Abatement of 50% of 1.457% rate on quarterly wages downtown. exceeding 50k • Real property tax abatement for recycling • Data center abatement • Abatement up to 75% for personal property and reduction of sales tax to 2% • Aviation parts abatement
48 REGIONAL OVERVIEW
Reno is experiencing a comeback like never before. In addition to its significant influx of major Silicon Valley tenants,the region prides itself on its life-work balance. Unlike the Bay Area where family time is being replaced by commute time, and the cost of living is at record highs, Reno offers high-paying jobs, co-working spaces, short commutes, a small-town feel, exciting new business opportunities, and a steadily growing economy.
Startup Row Reno is also now the home of “Startup Row” near the Truckee River. The street features cloud computing companies, fitness applications, a vibrant co-working collective, and a hardware developer that builds microcontrollers. Startups located in the region include Filament, Resgrid, Flirtey, and No-IP.
VILLAGE AT LAKERIDGE RENO 49 CONFIDENTIAL OFFERING MEMORANDUM Exceptional Demographic Profile Nevada Washoe County Reno Population 2,951,738 454,480 242,302 Expected Population Growth by 2021 9.1% 7.4% 7.1% % With College Degree 26.1% 35.7% 36.4% Median Income $53,029 $54,771 $48,516 Average Home Value $221,426 $275,181 $242,421
Washoe County – Reno Major Employers Employer Industry Number of Employees
Elementary and Secondary Schools 8,500 - 8,999
Colleges & Universities 4,500-4,999
General Medical & Surgical Hospitals 3,000-3,499
Executive and Legislative Offices 2,500 - 2,999
Hotel/Casino 2,000 - 2,499
All Other Miscellaneous Manufacturing 1,500 - 1,999
Hotel/Casino 1,500 - 1,999
Hotel/Casino 1,500 - 1,999
Hotel/Casino 1,500 - 1,999
General Medical & Surgical Hospitals 1,000 - 1,499
Hotel/Casino 1,000 - 1,499
Executive & Legislative Offices 1,000 - 1,499
Electric Vehicles Estimated to add 10,000+ jobs
Global Technology Estimated to add 500+ jobs
50 REGIONAL OVERVIEW Companies Headquartered in Nevada Company Industry Location
Pharmaceutical Henderson
Manufacturing Clark County
Software Las Vegas
Software Reno
Employment Growth
Reno is enjoying its 6th consecutive year of declining unemployment rates. This is largely in part due to the manufacturing, trade, and hospitality sectors expanding in the area. This growing economic activity, in addition to the constant influx of tech companies in the region, is driving the positive market activity. Historical Reno Unemployment Rates 14 13.5 13 12.5 12 11.5 11 10.5 10 9.5 9 8.5 8 7.5 7 6.5 6 5.5 5 4.5 4 16 15 14 13 12 11 10 09 16 15 14 13 12 11 10 09 17 16 15 14 13 12 11 10 09 17 16 15 14 13 12 11 10 09 r- r- r- r- r- r- r- r- r- c- c- c- c- c- c- c- c- p- p- p- p- p- p- p- p- un- J Jun- Se De Ma Jun- Se De Ma Jun- Se De Ma Jun- Se De Ma Jun- Se De Ma Jun- Se De Ma Jun- Se De Ma Jun- Se De Ma Ma
Reno Nevada US Nevada Industry Outlook Reno Industry Outlook
Retail Trade 7% Education & Health Professional & 17% Business 21% Finance, Insurance, Manufacturing/Information Real Estate Finance Technology 21% 7% 33% Construction 11% Professional & Business Services Trade 11% Manufacturing 34% Government 10% 11% Arts, Entertainment, Hospitality 17%
VILLAGE AT LAKERIDGE RENO 51 CONFIDENTIAL OFFERING MEMORANDUM Transportation
UNIVERSITY OF NEVADA RENO 12-Minutes Drive
ak Amtr Reno Station Amtrak Sparks Station
RENO-TAHOE INTERNATIONAL AIRPORT 8-Minute Drive
RENO SPARKS CONVENTION CENTER
VILLAGE AT LAKERIDGE
LEGEND
Washoe County Regional Transportation, Bus Line
Highway/Freeway/ State Route
Amtrak Line and Stations
52 REGIONAL OVERVIEW
Air Travel Reno-Tahoe International Airport is less than a 8-minute drive from the Property. It is the state’s second busiest commercial airport after McCarran International Airport in Las Vegas. Reno-Tahoe Airport primarily provides domestic services along the West Coast. In 2014, the airport began servicing non-stop flights to Mexico.
Freeways The major transportation corridor in Reno is I-80 which provides direct service from Reno to San Francisco with several north and south directions along the way. US Route 395 runs from the Mojave Desert to Canada traveling through California, Nevada, Washington, and Oregon.
Public Transportation Washoe County is served by the Regional Transportation Commission (RTC), which provides service throughout Reno, Sparks, Lakeridge, and Lemmon Valley. The nearest RTC Ride station is an 8-minute walk from the Property located at the Meadowood Mall. Amtrak also provides service in Nevada to destinations throughout the US. The nearest Amtrak station (Thruway) is less than 15 minutes from the Property.
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55
54
65 68
74 64 57 63 71 73 60
34 33
75 25 61 66 13 VILLAGE AT 49 69 26 62 LAKERIDGE 7 8 21 39 67 24 6 36 35 51 37 30 23 18 5 2 22 3 16 11 45 44 10 42 53 14 50 31 20 48 9 1 29 38 40 32 28 4 46 52 19 47 27 56 15 70 8 41
72 43 58 59
17 12
54 REGIONAL OVERVIEW
Amenities
Reno offers residents and visitors several restaurant, casino, and entertainment amenities. Famous hotels and casinos include Atlantis, Grand Sierra, Peppermill, Silver Legacy, Harrah’s Reno, and Eldorado. Reno’s casinos produce over $570 million dollars in gaming revenueAmenities per year - the six largest bring in 81% of this income.
1 Pinocchio's Bar & Grill 28 The Blind Onion 55 Truckee Meadows Community College
2 Kei Sushi 29 QDOBA Mexican Eats 56 Carrington College
3 Great Basin Brewing 30 The Human Bean 57 Renown Regional Medical Center
4 Thai Lotus 31 Starbucks 58 Saint Mary's Regional Medical Center
5 Chick-fil-A 32 The Laughing C A T 59 Renown South Meadows Medical Center
6 Olive Garden Italian Restaurant 33 Wood-Fire Roasted Coffee Company 60 VA Sierra Nevada Health Care System
7 Purple Parrot 34 Coffeebar Reno 61 Peppermill Reno
8 Bistro Napa 35 Plato's Closet Reno 62 Atlantis Casino Resort Spa
9 Hinoki Sushi 36 Cost Plus World Market 63 Grand Sierra Resort and Casino
10 Lunch Box 37 Macy's 64 Eldorado Reno
11 The Cheesecake Factory 38 AT&T Authorized Retailer 65 Silver Legacy Resort and Casino
12 Hard Water House 39 Nordstrom Rack 66 Game Lab
13 Bimini Steakhouse 40 24 Hour Fitness 67 Impossibles Magic Shop & Theatre
14 P.F. Chang's 41 Orangetheory Fitness 68 The Generator
15 Bistro 7 42 Anytime Fitness 69 Atlantis Fun Center
16 Romano's Macaroni Grill 43 South Reno Athletic Club 70 Magic Carpet Golf
17 Napa Sonoma Grocery Company 44 US Bank 71 Grand Theatre
18 Five Guys 45 Wells Fargo Bank 72 Paradise Cove Fun Center
19 Wrap It Up 46 Sierra Pacific Federal Credit Union 73 Nevada Museum of Art
20 Santa Cruz Sushi 47 Greater Nevada Credit Union 74 Bruka Theatre of the Sierra
21 Semenza's Pizzeria 48 Frontier Financial Credit Union 75 Art Source
22 Capriotti's Sandwich Shop 49 Umpqua Bank
23 Chipotle Mexican Grill 50 Bank of America
24 Boston Market 51 Bank of the West
25 Lili's Restaurant & Bar 52 Sun West Bank
26 Sky Terrace Sushi Bar 53 First Independent Bank of Nevada
27 The Cup Cafe 54 University of Nevada, Reno LegendLegend Dining Coffee Retail Gyms Arts & Entertainment Banks Schools Healthcare Hotels
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Surrounding Attractions
Reno Riverwalk District Located along the Truckee River and ranked as the #2 “best thing to do” in Reno, the Reno Riverwalk District includes art galleries, restaurants, and scenic walking paths. Popular activities such as the Wine Walk are hosted every third Saturday of every month, the Barbara Bennet Park, Bicentennial Park, Reno City Plaza, and Brick Park also host a variety of events year round – in addition to offering a family friendly environment.
National Automobile Museum This museum showcases over 200 cars from the 19th century through the 20th century. It was named one of America’s Five Greatest Automobile Museums by Auto Week Magazine. It also has a great collection of memorabilia and special exhibits which change during the year. It is located 4.2 miles away from the Property.
Incline Village - Lake Tahoe Incline Village is located on the North Shore of Lake Tahoe. This is approximatley a 42-minute drive to one of the most exclusive areas on the Lake. Incline Village is home to residential neighborhoods, hotels, and restaurants. The Lone Eagle Grill is located at the Hyatt and is famous for their tapas and cocktails as well as one of the best views of the Lake.
56 REGIONAL OVERVIEW
Carson City The capital of Nevada, Carson City, is known for its old western style town. It is located 31 minutes south of the Property. Here you can find old Saloons and Bars as well as coffee bars and restaurants.
Virginia City Located 33 minutes southeast of the Property, Virginia City is know for its rich history as a mining town during the 19th century. It has many historical buildings including the haunted Washoe Club, Pipers Opera House, and The Way it Was Museum, which has artifacts and maps of Virginia City from when it was used for mining.
Pyramid Lake Pyramid Lake is the end point of the Truckee River, which runs through the mid-eastern region of California and the north-western region of Nevada. It is a beautiful destination that sits about 40 miles north of the Property and is popular for fishing, boating, and camping.
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RENO OFFICE SERVICES Colliers International | Reno Melissa Molyneaux, SIOR, CCIM Tim Ruffin Executive Managing Director Executive Vice President Senior Vice President +1 775 823 4670 DIRECT +1 775 823 4674 DIRECT +1 775 745 1594 CELL +1 775 762 7990 CELL [email protected] [email protected]
RENO RETAIL SERVICES Colliers International | Reno Roxanne Stevenson Senior Vice President + 1 775 823 4661 DIRECT +1 775 848-3673 CELL [email protected]
COLLIERS INTERNATIONAL | RENO 58