1822 N. 32ND STREET | PHOENIX, AZ | 85008 24-UNIT COMMUNITY 2 BLOCKS FROM CAMELBACK CORRIDOR OFFER SOLICITATION PROCESS PROPERTY VISITATION Prospective purchasers will have the opportunity to visit the property via pre-scheduled property tours. These tours will include access to a representative sampling of units and access to maintenance and other similar facilities. In order to accommodate the property’s ongoing operations, property visitation will require advance notice and scheduling. OFFER SUBMISSION Offers should be presented in the form of a non-binding Letter of Intent, spelling out the significant terms and conditions of Purchasers’ offers including, but not limited to (1) asset pricing, (2) due diligence and closing time frame, (3) earnest money deposit, and (4) qualifications to close. The purchase terms shall require all cash to be paid at closing. Offers should be delivered to the attention of Ryan Ash and Mike Woodrick using the email or fax number information listed below. CONTACT INFORMATION Ryan Ash Senior Managing Director Tel: 602-852-3784 [email protected] Mike Woodrick Director Tel: 602-852-3789 [email protected] ARA - Phoenix 2398 E. Camelback Road Suite 950 Phoenix, Arizona 85016 Tel: 602-252-4232 Fax: 602-252-4236 www.ARAnewmark.com 2 TABLE OF CONTENTS 04 EXECUTIVE SUMMARY 09 VALUATION SUMMARY 13 COMPARABLE SALES 21 PROPERTY OVERVIEW 29 CONTACT EXECUTIVE SUMMARY CENTRAL CORRIDOR CAMELBACK CORRIDOR NORTHWEST AERIAL 4 CAMELBACK MOUNTAIN NORTHEAST AERIAL 5 TERMS OF THE OFFERING TOTAL UNITS 24 YEAR BUILT 1981 PRICE $2,350,000 PRICE PER UNIT $97,917 RENTABLE SF 15,200 AVERAGE SF PER UNIT 633 PROFORMA CAP RATE 6.03% AVERAGE RENT PER UNIT $727 AVERAGE RENT PER SF $1.15 THE OPPORTUNITY INVESTMENT HIGHLIGHTS ARA is pleased to announce the availability of Oberon Place, a 24 unit community located in the East Phoenix submarket. The property has great frontage on 32nd Street and is located just south of Thomas Road. Residents • Located in High Demand East Phoenix enjoy being within close proximity to the Camelback Corridor which provide a large employment center along with Submarket many vibrant restaurant and entertainment options. Furthermore the neighborhoods surrounding Oberon Place have been rejuvenated and seen a transformation with many older homes and apartment communities being renovated • Great Frontage on 32nd Street, Just South of and updated or have been razed and redeveloped into high end townhomes with values over $300,000 and high Thomas end homes with values over $500,000. The demand for housing in this area is stemmed from its close proximity to • 1981 Built, Individually Metered, Stucco the Camelback Corridor and the Live, Work, Play environment that it offers residents. This employment center hosts a Exterior dynamic mix of premier office, high-end retail and hospitality development that serves as a focal point for business and entertainment activity in Phoenix. The Camelback Corridor is one of the most desirable locations for “A” quality • Mix of One and Two Bedroom Units office space in the entire Metropolitan area. High-end shopping and dining can be enjoyed at the Biltmore Fashion • New Signage and Exterior Paint Park at the corner of 24th Street and Camelback Road, containing 535,430 square feet of open-air shop space and • Attractive Low Maintenance Landscaping many of renowned Fox Restaurants including True Food Kitchen, Zinburger, and Blanco Tacos + Tequila. Retailers within the Fashion Park include Saks Fifth Avenue, Macy’s, Ralph Lauren, Apple, and Pottery Barn. Furthermore, • Value Add Through Enhanced Interior The Camelback Colonnade Shopping Center and the Town & Country Shopping Centers have been redeveloped in Upgrades recent years and are just minutes from this community offering residents popular eateries such as Pizzeria Bianco, • Potential to Add In Unit Washer & Dryers Grassroots Kitchen & Tap, Hopdaddy Burger Bar, Snooze and popular shops such as Nordstrom Rack, Whole Foods, • Potential to Add Patios on Downstairs Units and Trader Joe' s. Other popular eateries in the neighborhood are The Gladly, The Parlor, Bink' s Midtown and Mejico Cocina Mejicana. Surrounding attractions in the immediate area include the historical Arizona Biltmore Resort and • 100% Occupied, Upside in Rents of $100- Golf Club and the Wrigley Mansion. $150 • 2 Blocks South of the Camelback Corridor Oberon Place is a two-story community constructed in 1981 of wood frame with a modern stucco exterior and is individually metered electricity. The community consists of 20 one bedroom/one bath floor plans and 4 two bedroom/ • $200 Rent Upside with Modern Unit one bath floor plans. The property has been upgraded in previous years with new paint, signage and the landscaping Upgrades was improved with desert rock, attractive low water plants on new drip systems, and artificial grass providing low maintenance for ownership. Unit interiors have been partially upgraded with ceramic tile flooring, hardware on the cabinets, resurfaced countertops, appliances, and faucets and fixtures as needed. These improvements have resulted in an increase in rents over $150 on average. Further upside in rents of $100-$150 could be achieved by implementing a second generation modern upgrades to the interiors. Investors in the neighborhood have benefited from the gentrifying neighborhood with renovating unit interiors with new modern finishes and providing stackable washer and dryers in the units and are achieving rents on 1 bedrooms units in the $800-$850 range and $900-$950 depending on unit upgrades and patio units. The units have space for the washer and dryers and the downstairs units have space from the building to the block wall on the north side to add patios which has been a popular value-add for investors and typically results in up to $100 in rental upside. Oberon Place offers an investor the opportunity to purchase a 100% occupied 24 unit community that has great frontage on a major north south street and is located in the high demand East Phoenix submarket within 2 blocks of the Camelback Corridor. 7 PROPERTY DETAILS SQUARE PROFORMA MARKET PROFORMA MARKET UNIT TYPE NO. OF UNITS Oberon Place Apartments FEET RENT/MONTH RENT/SQUARE FOOT 1822 N. 32nd Street STUDIO 1 500 $625 $1.30 ADDRESS: Phoenix, AZ 85008 1 BED / 1 BATH 10 600 $725 $1.21 COUNTY: Maricopa 1 BED / 1 BATH 9 600 $750 $1.25 2 BED / 1 BATH 2 825 $850 $1.03 YEAR BUILT: 1981 2 BED / 1 BATH 2 825 $875 $1.06 NUMBER OF UNITS: 24 TOTAL / AVG. 24 633 $727 $1.15 NUMBER OF 2 MECHANICAL SYSTEMS / METERING AMENITIES BUILDINGS: ELECTRICITY: Individually metered, resident paid COURTYARD STORIES: 2 WATER/SEWER: Owner paid COVERED PARKING RENTABLE AREA: 15,200 TRASH DISPOSAL: Owner paid CONSTRUCTION FEATURES AVERAGE UNIT SIZE: 633 • Wood Frame and Stucco LAND AREA: 0.70 acres • Flat & Pitched Roof 8 VALUATION SUMMARY 9 Financial Analysis Executive Summary Oberon Place EXECUTIVE SUMMARY Phoenix, Arizona PROPERTY OVERVIEW Proforma Number of Units 24 Per Unit Dollars Year Built 1981 Effective Gross Income $8,589 $206,130 List Price $2,350,000 Less: Operating Expenses 2,433 58,381 Price per Unit $97,917 Less: Capital Reserves 250 6,000 Price per Square Foot $154.61 Net Operating Income 5,906 141,750 Rentable Square Feet 15,200 Debt Service 102,971 Average Square Feet per Unit 633 Net Cash Flow (5.50%) $38,779 Average Rent per Unit $727 Average Rent per SF $1.15 Financial Return Financing Terms Down Payment $705,000 Proforma Cap Rate 6.03% Proposed New Loan $1,645,000 Proforma Cash on Cash Return 5.50% Loan-to-Value 70% Interest Rate 4.75% Loan Term 5 Years Amortization 30 Years Disclaimer This information has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. 10 UNIT MIX AND CURRENT MARKET RENTS Unit Mix and Current Market Rents Oberon Place Phoenix, Arizona Proforma Proforma Proforma Monthly Annual Unit No. of % Unit Proforma Rent Rent Rent Total Description Units Type Sq. Ft. Rents /Sq. Ft. Total Total Sq. Ft. Studio 1 4.2% 500 $625 $1.30 $625 $7,500 500 1 Bdrm / 1 Bath 10 41.7% 600 $725 $1.21 $7,250 $87,000 6,000 1 Bdrm / 1 Bath 9 37.5% 600 $750 $1.25 $6,750 $81,000 5,400 2 Bdrm / 1 Bath 2 8.3% 825 $850 $1.03 $1,700 $20,400 1,650 2 Bdrm / 1 Bath 2 8.3% 825 $875 $1.06 $1,750 $21,000 1,650 Total / Avg. 24 100.0% 633 $727 $1.15 $17,450 $209,400 15,200 Unit Mix By Bedroom Type By Square Feet 1 Bed Eff 3% 2% 200 300 2% 3% 2 Bed 11 95% 800 95% Market Underwriting Analysis Oberon Place MARKETPhoenix, Arizona UNDERWRITING ANALYSIS Proforma INCOME Assumptions Gross Scheduled Rent $209,400 Gross Potential Income $209,400 Less: Vacancy (5.0%) (10,470) Total Rental Income 95.00% $198,930 Plus: Other Income 300 7,200 Effective Gross Income $206,130 EXPENSES per unit Repairs & Maintenance $500 $12,000 Payroll 200 4,800 Administrative/Advertising 100 2,400 Utilities 716 17,190 Total Variable Expenses $1,516 $36,390 Taxes 348 8,363 Insurance 153 3,681 Management Fee 5.00% 9,947 Total Operating Expenses $2,433 $58,381 Plus: Capital Reserves 250 6,000 Total Expenses $2,683 $64,381 NET OPERATING INCOME $141,750 Debt Service New Financing - $1,645,000 (70% LTV) Debt Service (4.75% P & I) $102,971 Cash Flow After Debt Service (5.50%) $38,779 12 COMPARABLE SALES DOWNTOWN PHOENIX CENTRAL CORRIDOR WEST AERIAL 13 COMPARABLE SALES APARTMENT NAME CITY UNITS PRICE $/UNIT $/SQ.