Extra Space Storage (An Extra Space Storage 3Rd Party Managed Project) Confidential Offering Memorandum 5878 Silver Creek Valley Rd, San Jose, California
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SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno Edenvale Self-Storage Development Opportunity Extra Space Storage (an Extra Space Storage 3rd Party Managed project) Confidential Offering Memorandum 5878 Silver Creek Valley Rd, San Jose, California For property related questions please contact Tom de Jong: Tom de Jong Jack Suski Senior Vice President Associate +1 408 282 3829 +1 510 433 5837 Colliers International [email protected] [email protected] 5520 Kietzke Lane, Suite 300 CA License #0188901 CA License #02032811 Reno, NV 89511 P: +1 775 823 9666 ©2020 Colliers International. Information herein has been obtained from sources deemed reliable, however its accuracy cannot be guaranteed. The user is required to conduct their own due diligence and verification. SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno CONTENTS Investment Overview Offering Procedures Site Description Gross Potential Rent 10-Year Projections Unit Mix Project Rendering Completed Grading Photos Demographics Competition Map & Details 5878 Silver Creek Valley Rd SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno INVESTMENT OVERVIEW EDENVALE SELF STORAGE is an opportunity to build a PERMIT READY self-storage project within an underserved area within the San Jose, California MSA. With under two square feet of supply per capita within a 3-mile radius and very limited supply (with an estimated net shortage of approximately 330,000 rentable SF) to the south or east, this is an excellent opportunity to build a new, class A, multi-story, climate controlled facility within San Jose, “The Capital of Silicon Valley”. The fully permitted project allows for a minimum of 149,270 SF gross building size with a proposed rentable area of 99,998 SF. The site located at 5878 Silver Creek Valley Rd in South San Jose is 2.863 acres, at the intersection of Hellyer Ave and Silver Creek Valley Rd. Based on the permitted design with 99,998 NRSF year 4 stabilized NOI is estimated at $2,319,564 , offering an implied value of $46,000,000 (5.0% CAP rate). PROJECT STATUS: As of October 2019, the Building permit is ready for pick-up. As of October 2019, the City Development Agreement has been executed. Bonds purchased and provided to the City. Grading is complete on Building 2 and ready to dig footings. Building 1 is a few days from the pad being ready for footing excavation. Of the total 18” of select import ma- terial, about 15” has been placed. Final topping to occur when job starts. (Grading risk has past). SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno OFFERING PROCEDURES This property is being offered for sale as a permit-ready project, with permits ready for pick- up at the City of San Jose planning department. Detailed financial projections, building plans, environmental reports and other due diligence materials will be made available upon receipt of signed NDA Agreement. Offers Considered as Submitted Offers should be addressed to: AG Key, LLC c/o Tom de Jong Colliers International Via email to: [email protected] (408) 282-3829 Offers to be presented in Letter of Intent (LOI) form and include: · Offered price · Earnest Money Deposit · Due Diligence Time Period · Closing Period · Buyer Source of Funds and/or Qualifications SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno SITE DESCRIPTION INVESTMENT HIGHLIGHTS • Professionaly managed by Extra Space Storage • LEED Silver Permit Ready projects, with permits at City of San Jose planning department • Class A investment opportunity with 99,998 NRSF in 1,114 units including 99 wine storage lockers • Projected stabilized NOI of $2,319,564 • 50% climate controlled units • 99 wine storage lockers • 1.60 SF/capita total supply in 3-mile submarket trade area (Yardi Matrix 2/10/2020) • At intersection of Silver Creek Valley Blvd and Hellyer Ave in South San Jose 5878 Silver Creek Valley Rd, San Jose, California General (Previous address: 5880 Hellyer Avenue) Year1 Year2 Year3 Year4 Status Permits ready for pick-up at City of San Jose as of October 2019 Average Rental Rate/SF $2.52 $2.64 $2.77 $2.91 County Santa Clara County, CA Rental Rate projections - 5.00% 5.00% 5.00% Tax Lot APN 678-93-041 (portion of) Economic Occupancy % 24.6% 48.5% 73.3% 83.7% Parcel Size 2.863 Acres Effective Gross Income $757,266 $1,569,750 $2,488,141 $2,982,629 Owner AG KEY, LLC Total Operating Expenses $490,636 $551,991 $620,060 $663,064 Net Operating Income $266,630 $1,017,759 $1,868,081 $2,319,564 PROJECT DETAILS 93.5% Climate Controlled Conversion 1,114 units 99,998 NRSF DEMOGRAPHICS Wine Storage 99 units 1,687 NRSF 3 mile population 131,902 Trade Area Rents per Yardi Matrix $2.30 (Feb. 2020) Population Growth (2016-2021) 4.70% Weighted Average Rental Rates $2.52 (CC) Est. SF/Capita (3-mile) - TOTAL <1.60 Est. SF/Capita (3-mile) - CLIMATE CONTROLLED <1.00 Traffic Count (AADT) 12,600 Household Income (3-mile) $116,926 SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno GROSS POTENTIAL RENT - STORAGE Year 1 Projected Year 2 Projected Year 3 Projected Year 4 Projected Gross Potential Rent - STORAGE $3,019,349 $3,170,316 $3,328,832 $3,495,274 PROJECTED RENTAL RATE GROWTH 5.0% 5.0% 5.0% Vacancy (PROJECTED VACANCY OF 11% YEAR 4) $(2,173,931) $(1,458,345) $(632,478) $(384,480) Discounts / Concessions / Write-Offs (6% at stabilization) $(103,000) $(173,000) $(257,000) $(186,648) Net Storage Income $742,418 $1,538,971 $2,439,354 $2,924,146 Credit Loss $(22,273) $(46,169) $(73,181) $(87,724) Income Miscellaneous Income / Fees / Retail $37,121 $76,949 $121,968 $146,207 Total Miscellaneous Income $14,848 $30,779 $48,787 $58,483 Total Effective Gross Revenue $757,266 $1,569,750 $2,488,141 $2,982,629 Payroll $130,000 $133,900 $137,917 $142,055 Management Fee $45,436 $94,185 $149,288 $178,958 Advertising $42,000 $43,260 $44,558 $45,895 Utilities $48,000 $49,440 $50,923 $52,451 Office and Employee $8,400 $8,652 $8,912 $9,179 Admin Expenses $8,400 $8,652 $8,912 $9,179 Repairs & Maintenance $26,000 $26,780 $27,583 $28,411 Other $2,400 $2,472 $2,546 $2,623 Taxes $150,000 $153,750 $157,594 $161,534 Property Insurance $30,000 $30,900 $31,827 $32,782 Operating Expenses Operating Total Operating Expenses $490,636 $551,991 $620,060 $663,064 Net Operating Income $266,630 $1,017,759 $1,868,081 $2,319,564 SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno 10-YEAR PROJECTIONS - STORAGE Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Gross Potential Rent - STORAGE $3,019,349 $3,170,316 $3,328,832 $3,495,274 $3,582,655 $3,672,222 $3,764,027 $3,858,128 $3,954,581 $4,053,446 REIS PROJECTED RENTAL RATE GROWTH 5.0% 5.0% 5.0% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% Vacancy (PROJECTED VACANCY OF 11% YEAR 4) $(2,173,931) $(1,458,345) $(632,478) $(384,480) $(358,266) $(367,222) $(376,403) $(385,813) $(395,458) $(405,345) Discount / Concession / Write-Off (6% at stabilization) $(103,000) $(173,000) $(257,000) $(186,648) $(193,463) $(198,300) $(203,257) $(208,339) $(213,547) $(218,886) Net Storage Income $742,418 $1,538,971 $2,439,354 $2,924,146 $3,030,926 $3,106,700 $3,184,367 $3,263,976 $3,345,576 $3,429,215 Credit Loss $(22,273) $(46,169) $(73,181) $(87,724) $(90,928) $(93,201) $(95,531) $(97,919) $(100,367) $(102,876) Income Other Miscellaneous $37,121 $76,949 $121,968 $146,207 $151,546 $155,335 $159,218 $163,199 $167,279 $171,461 Total Miscellaneous Income $14,848 $30,779 $48,787 $58,483 $60,619 $62,134 $63,687 $65,280 $66,912 $68,584 Total Effective Gross Revenue $757,266 $1,569,750 $2,488,141 $2,982,629 $3,091,545 $3,168,834 $3,248,054 $3,329,256 $3,412,487 $3,497,799 Payroll $130,000 $133,900 $137,917 $142,055 $146,316 $150,706 $155,227 $159,884 $164,680 $169,621 Management Fee $45,436 $94,185 $149,288 $178,958 $185,493 $190,130 $194,883 $199,755 $204,749 $209,868 Advertising $42,000 $43,260 $44,558 $45,895 $47,271 $48,690 $50,150 $51,655 $53,204 $54,800 Utilities $48,000 $49,440 $50,923 $52,451 $54,024 $55,645 $57,315 $59,034 $60,805 $62,629 Office and Employee $8,400 $8,652 $8,912 $9,179 $9,454 $9,738 $10,030 $10,331 $10,641 $10,960 Admin Expenses $8,400 $8,652 $8,912 $9,179 $9,454 $9,738 $10,030 $10,331 $10,641 $10,960 Repairs & Maintenance $26,000 $26,780 $27,583 $28,411 $29,263 $30,141 $31,045 $31,977 $32,936 $33,924 Other $2,400 $2,472 $2,546 $2,623 $2,701 $2,782 $2,866 $2,952 $3,040 $3,131 Taxes $150,000 $153,750 $157,594 $161,534 $165,572 $169,711 $173,954 $178,303 $182,760 $187,329 Property Insurance $30,000 $30,900 $31,827 $32,782 $33,765 $34,778 $35,822 $36,896 $38,003 $39,143 Operating Expenses Operating Total Operating Expenses $490,636 $551,991 $620,060 $663,064 $683,315 $702,059 $721,322 $741,117 $761,460 $782,366 Net Operating Income $266,630 $1,017,759 $1,868,081 $2,319,564 $2,408,230 $2,466,775 $2,526,733 $2,588,139 $2,651,027 $2,715,433 SELF-STORAGE OPPORTUNITY 5878 Silver Creek Valley Road // San Jose // California colliers.com/reno UNIT MIX Unit Mix # Units Total SF Unit Price $/SF Total 5 x 5 13 325 $99 $3.95 $1,284 5 x 10 13 650 $188 $3.75 $2,438 MAIN LEVEL / CC 10 x 10 21 2,100 $275 $2.75 $5,775 10 x 15 2 300 $368 $2.45 $735 5 x 5 41 1,025 $91 $3.65 $3,741 5 x 10 173 8,650 $173 $3.45 $29,843 ELEVATOR