73 Units | Value-Add Opportunity | Lynnwood, WA Confidential offering memorandum Contact information ADVISORS DEBT AND FINANCE Jordan Louie Scott Gilson Vice President Director +1 206 971 7007 +1 206 576 0037 [email protected] [email protected] Corey Marx Managing Director +1 206 607 1726 [email protected] TABLE OF CONTENTS 04 Executive Summary 10 Submarket Overview 18 Regional Overview 28 Financial Overview 34 Rent Comparables 38 Sales Comparables 42 Transaction Guidelines Executive Summary THE OFFERING JLL has been retained as the exclusive advisor for the sale of Evergreen Grove Apartment Property Summary Homes, a 73-unit apartment community located in Lynnwood, Washington. Built in 1983 and 1984, Evergreen Grove represents a value-add opportunity for multifamily investors. Current management has updated select finishes offering investors an opportunity to complete NAME Evergreen Grove Apartment Homes renovations and realize further rent premiums. With units averaging approximately 1,060 ADDRESS 2709 Lincoln Way square feet, the property offers more space for less money when compared to Seattle’s Core. CITY, STATE, ZIP Lynnwood, WA 98087 Located in the desirable Seattle suburb of Lynnwood, Evergreen Grove benefits from a prime location relative to employers and the more than 805,000 residents in Snohomish County. YEAR BUILT 1983 and 1984 Accessibility is unmatched as the property sits adjacent to the intersection of Highway 525/ Interstate 405 and Highway 99. The property is approximately two miles from the current CONSTRUCTION Wood frame Ash Way Park & Ride and future Ash Way Link Light Rail Station. Currently the transit hub offers express bus service to Downtown Seattle and beyond. Once the light rail station is UNIT COUNT 73 apartment homes complete, it will offer a direct and traffic-free route to Downtown Seattle and Seattle-Tacoma AVERAGE UNIT SIZE 1,060 square feet International Airport. RESIDENTIAL SPACE 77,370 net rentable square feet Surrounded by quality amenities, the property sits just 3.6 miles from the Alderwood Mall, 2.2 miles from Harbour Pointe Shopping Center and within walking distance of Lake Stickney. FLOORPLANS One bedroom, two bedroom / two bath The property is also within the boundaries of the coveted Mukilteo School District, an added benefit for families. PARKING 159 surface stalls JLL | 5 Everett INVESTMENT HIGHLIGHTS 5 2 Snohomish Significant Value-Add Upside 99 Current ownership has completed selected capital improvements at Evergreen Mill Grove. Most units have been renovated to various spec levels which has Creek contributed to a noticeable increase in net rental income. Select upgrades were EVERGREEN Puget 522 applied to kitchens, baths and flooring. Upgraded in-unit features vary but Sound GROVE include appliances, sinks, countertops, cabinets and flooring. Other possible Lynnwood capital improvements include adding washers and dryers to all units (units are pre-plumbed), adding carports to the premises and upgrading the property’s 405 sport court. 522 Bothell Diversified Employment Base Shoreline Within the City of Lynnwood and the surrounding northern suburbs is an expansive local employment market. Snohomish County ranks first in the state 5 for manufacturing jobs and second in the number of tech jobs. It also hosts the Kirkland highest concentration of engineers within Washington State. Its diverse and Redmond thriving job base of 292,600 includes aerospace, bio-technology, bio-medical 99 n o devices and advanced technology/manufacturing, in addition to healthcare t g n 520 and hospitals. Over 200 aerospace companies, including Boeing, are located in i h h s is a Snohomish County. Boeing acts as a local catalyst with a job multiplier of 3.5 to Elliott m W a Bellevue Sammamish Bay e m 4.0. Other notable local employers include Providence Regional Medical Center, k m a a L S Premera Blue Cross, Philips and the Fluke Corporation. SEATTLE e k a Mercer 90 L Island 405 Newcastle Issaquah 99 Renton Seattle-Tacoma International 167 18 Airport 6 | Evergreen Grove 5 Kent Prime Access Evergreen Grove’s suburban address is nearly equidistant to the cities of Seattle and Bellevue and slightly south of Everett. It is an attractive desti- nation for newly hired employees coming to the Pacific Northwest for work and a high quality of life. Evergreen Grove is near desired public schools, as well as shopping and entertainment at the Harbour Pointe Shopping Cen- ter, the Alderwood Mall, Mill Creek Town Center and the Everett Mall. The property is conveniently located with immediately ingress/egress to High- way 525, which is connected to the northern terminus of Interstate 405 and Highway 99. The Ash Way Park & Ride is a short drive away and is also the planned site of the future Link Light Rail Station. Paine Field Airport, the region’s newest commercial airport is just two miles from Evergreen Grove and offers 24 daily departures to 11 destinations in the West and Mountain West regions. The airport provides greater convenience and shorter wait times for passenger travel. Surging Population Between April 2017 and 2018, Snohomish County experienced a net in-migration of 15,720 people. The population has grown by more than 100,000 in the past ten years and now exceeds 805,000. This makes the resident count in Snohomish County larger than four states and the District of Columbia. Further growth is aided by increased job recruitment, ongoing office deliveries and the expansion of Bay Area tech giants into the Puget Sound Region. Millennials are also moving here at one of the fastest rates in the county, with the Seattle MSA listed as the nation’s top relocation destination. Regional Strength Employment throughout the Seattle MSA has outpaced the national average with 46,400 new jobs added in 2018 and unemployment at 3.5 percent. Firms such as Amazon, Microsoft, Facebook and Google offer high-paying positions and attract well-educated young processionals. Even with healthy wages, many are opting away from high-priced apartments in the urban cores of Seattle and Bellevue where rents average $2,140 and $2,313 per month, respectively. The result has been a ripple effect in the suburban market, with north-end communities becoming a destination of choice on the flight to affordability. JLL | 7 PROPERTY DESCRIPTION Property Details The units at Evergreen Grove have several different finish levels with varying elements such as appliances, sinks, countertops and cabinets. Flooring consists of vinyl plank and carpeting. Currently, washers and dryers are not standard in any units even though units are pre-plumbed. It is recommended that the new ownership renovate all units to a premium spec level consistent with the current premium renovation scope at the property. This includes stainless appliances, undermount sinks, hard surface countertops, soft-close cabinets and vinyl plank flooring. We would also recommend adding washers and dryers in all units. Combined, this can generate an estimated renovation premium of $250. Furthermore, adding carports and updating the sport court would yield even more rental income for investors. CLASSIC UNIT PREMIUM UNIT LIGHT RENOVATION CLASSIC UNIT PREMIUM UNIT PREMIUM UNIT 8 | Evergreen Grove PROPERTY DESCRIPTION Construction Specifications PLUMBING Copper with water shut-offs in each unit ROOFS Pitched asphalt single roofs Building D WINDOWS Double-pane aluminum-frame WASHERS AND DRYERS Pre-plumbed FIREPLACES Blocked, flues capped DECKS / PATIOS All units Building C Building F Building B Building A Building E LINCOLN WAY JLL | 9 Submarket Overview CITY OF LYNNWOOD Downtown Everett The City of Lynnwood is home to over 38,000 residents. Puget Sound Located in Snohomish County at the convergence of Interstate 5 and Interstate 405, Lynnwood is approximately Paine Field Airport 20 miles north of Seattle and Bellevue and four miles south of Everett’s Boeing locations. Residents and businesses are drawn to the area due not only to its central location, but also the prime working and living environments the city has created. 99 EVERGREEN The residential areas of Lynnwood, which make up the GROVE majority of the city, are close to transportation options. 525 Views are plentiful and range from Martha Lake and the Puget Sound to neighboring Whidbey Island and the Ash Way Park-and-Ride mountains beyond. With a favorable tax structure and an abundance of Class A office space, Lynnwood boasts a thriving and welcoming business climate. The daytime population easily reaches 5 up to 150,000 as workers flood the marketplace. The local landscape is dotted with aerospace and healthcare firms as well as a core of bio-science, information technology and professional service corporations. Often deemed the “crossroads community” due to its location at the intersection of major freeways, Lynnwood Alderwood Mall has an additional prominence within the regional landscape, serving as a bedroom community to nearby urban employment centers with world-renowned corporations. It is also considered the financial and 405 retail hub of south Snohomish County and the northern gateway into the Seattle MSA. 5 JLL | 11 LOCAL AMENITIES Retail and lifestyle amenities are key elements within Lynnwood. The Alderwood Recreation Mall, Snohomish County’s foremost shopping destination, is located within Lynnwood city limits. It regularly draws shoppers from near and far. This unique Lynnwood adventures and activities are diverse and plentiful. Available year round, shopping venue encompasses 1.3 million square feet, includes a traditional indoor the newly renovated Recreation and Aquatic Center is equipped with a recreational mall and features two open-air sections known as The Village and The Terraces. pool including water slides, lazy river and water playground. There is a sauna, hot The Alderwood Mall is anchored by Macy’s, Nordstrom, REI, H&M and Zara, as well tub and warm water therapy pool, as well as a cardio/weight room and fitness as a 16-screen high-tech theater.