The Chateau Apartments
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THE CHATEAU APARTMENTS / 32UNITS 1971CONSTRUCTION 2016 OFFERING MEMORANDUM 4636 ALVIN DARK AVENUE, BATON ROUGE, LOUISIANA EXCLUSIVE MARKETING ADVISORS INVESTMENT ADVISORS CAPITAL MARKETS TEAM CHAD RIGBY JUSTIN LANDRY Managing Director / Multifamily Sales VP of Finance THE CHATEAU APARTMENTS 225-329-0265 985-246-3729 [email protected] [email protected] SABAN SELLERS STEPHEN FARNSWORTH Investment Advisor / Multifamily Walker & Dunlop 504-620-8122 Managing Director / Multifamily [email protected] Finance 504-585-0581 BEEZIE LANDRY [email protected] VP of Investment Advisors 985-246-3781 DOUG HART [email protected] Walker & Dunlop VP of Multifamily Finance JONATHAN WALKER 504-585-1363 Maestri-Murrell Commercial Real Estate [email protected] Senior Commercial Sales and Leasing Executive 225-810-3294 [email protected] PROPERTY TOURS Property tours must be scheduled in advance by contacting Chad Rigby or Jonathan Walker with a minimum of 24 hours notice. Property tours will include a representative sampling of unit floor plans, community amenities, and maintenance areas as appropriate. OFFER SUBMISSION PROCEDURE Offers should be submitted in the form of a non-binding Letter of Intent detailing terms of the purchase including: 1. Asset pricing, 2. Inspection, due diligence and closing time frame, 3. Deposit(s), and 4. Qualifications to close. Offers should be delivered to the attention of Chad Rigby or Jonathan Walker. The information provided in this Offering Memorandum has been derived from sources deemed reliable. However, it is subject to errors, omissions, price change and/or withdrawal, and no warranty is made as to the accuracy. Further, no warranties or representation shall be made by Stirling Properties, LLC, or its agents, representatives or affiliates regarding oral statements which have been made in the discussion of the property. This presentation, prepared by Stirling Properties, LLC, was sent to the recipient under the assumption that s/he is a buying principal. Any potential purchaser is advised that s/he should either have the abstract covering the real estate which is the subject of the contract examined by an attorney of his/her selection, or be furnished a policy of title insurance. THE CHATEAU APARTMENTS STIRLING INVESTMENT ADVISORS 2 TABLE OF CONTENTS EXECUTIVE SUMMARY Market Overview Major Employers Local Retail Demographics PROPERTY DESCRIPTION Amenities Property Details FINANCIAL ANALYSIS Pro Forma Pro Forma Assumptions RENT COMPS APPENDIX LREC Disclaimer Stirling Properties, LLC Maestri-Murrell, Inc. 109 Northpark Blvd., Ste. 300 9018 Jefferson Highway Covington, La 70403 Baton Rouge, LA 70809 [office] 985-898-2022 [office] 225-298-1250 [fax] 985-898-2077 [fax] 225-298-1251 StirlingProperties.com mmcre.com THE CHATEAU APARTMENTS STIRLING INVESTMENT ADVISORS 3 INVESTMENT SUMMARY THE CHATEAU APARTMENTS ADDRESS: 4636 Alvin Dark Avenue, Baton Rouge, LA 70820 SALE PRICE: $1,760,000 TERMS: All-Cash Sale SITE INFORMATION Product Type Class “C+” Apartment Community Number of Units 32 Year of Construction 1971 Year of Renovation 2016 Net Rentable Square Feet 21,304 SF Average Unit Size 666 SF Average Market Rent $730 | $1.09 PSF THE CHATEAU APARTMENTS STIRLING INVESTMENT ADVISORS 4 EXECUTIVE SUMMARY THE CHATEAU APARTMENTS STIRLING INVESTMENT ADVISORS 5 EXECUTIVE SUMMARY - MARKET OVERVIEW BATON ROUGE The Baton Rouge MSA is the largest larger than Southern. Baton Rouge MSA in the state in terms of numbers is also the location of the State of parishes-- nine total, Ascension, East Capitol, which means government Baton Rouge, East Feliciana, Iberville, employment plays a major role. The Livingston, Pointe Coupee, St. Helena, region’s growing high tech sector West Baton Rouge, West Feliciana. is anchored by the IBM complex in Never has this MSA experienced an downtown Baton Rouge to the EA industrial expansion like the one Sports Studio on Louisiana State presently underway. $18.9 billion University’s campus. in announced industrial expansions in this MSA since 2012- either built, The Baton Rouge MSA is positioned under construction or in planning for a strong economic showing in phase. What differentiates this MSA 2019 and 2020, due to a variety of from New Orleans and Lake Charles- factors. This includes the industrial --sites of other major industrial boom, recent healthcare expansion announcements---is that in the Baton in the area, the continued success Rouge MSA almost all the announced of the Port of Baton Rouge, recent projects ($15.8 billion) are either positive employment trend and of MSA FAST FACTS completed or under construction. course the stable benefit of being the Baton Rouge provides jobs for over home to both the state capital and $18.9 Billion 400,000 workers and is second in size Louisiana State University. Pairing the 9 Total in Industrial in terms of population. The petro- aforementioned with Baton Rouge’s 9 Parishes chemical industry looms large in this recovery from “The Great Flood of Expansion MSA with the largest concentration 2016”, there is much to look forward of chemical employment in the state, to for this MSA in both the present 2nd Most 400,000+ the country’s fourth largest refinery, and years to come. Populated MSA Workers 2 and an unusually high concentration In Louisiana of industrial construction workers to support the industry. Both LSU and Southern University are located in Petro-Chemical State Capital this MSA along with Baton Rouge Industry Looms & Several Community College, which is now Large Universities THE CHATEAU APARTMENTS STIRLING INVESTMENT ADVISORS 6 EXECUTIVE SUMMARY - MARKET OVERVIEW THE INDUSTRIAL BOOM In recent years, there has been an unprecedented amount of industrial projects announced and completed in the Baton Rouge MSA. With $18.9 billion in total industrial announcements since 2012, $15.8 billion of that has been completed or is underway, with the remaining $3.1 billion waiting for a FID (Front End Engineering & Design) and to begin construction. There are multiple industrial projects slated for completion in the near future or in pre-FID phase, which we list below: Shintech $1.4 billion ethane cracker and connections to OVC and VCM production lines. Will create 100 new permanent jobs at an average of $68,500 annual salary annually. Shell Chemical $717 million alpha olefins plant located in Geismar. 12 new jobs at $80,000 salary annually. BASF $150 million construction expansion to double MDI output at the facility. 15 new jobs at $86,600 annual salary. Thermaldyne Construction completed on $50 million industrial project. Adding 75 new jobs with an $80,000 annual salary. Methanex $1.3 billion to build a third plant in Ascention Parish, slated for mid-2019 construction. Will create 25 permanent jobs at $80,000 annual salaries. ExxonMobil $400 million expansion to its Baton Rouge polyethylene plant, which would create 65 new jobs at $80,000 annual salaries. While these expansions will create permanent high paying jobs, they also provide a strong demand for skilled construction workers. This will provide a positive boost in employment, as demand for skilled construction workers will increase from 8,000 to over 12,000 between 2018-2021, according to the Greater Baton Rouge Industrial Alliance. Baton Rouge already boasts some of the largest employers in the state, many of whom are in the Industrial Sector, specifically in the chemical industries. THE CHATEAU APARTMENTS STIRLING INVESTMENT ADVISORS 7 EXECUTIVE SUMMARY - MARKET OVERVIEW HEALTHCARE EXPANSION In recent years, Baton Rouge has seen an expansion in its already large healthcare industry, with both recently completed projects as well as ones in line for completion in the near future. Ochsner Health has just completed its $116 million expansion of its Baton Rouge medical facilities that includes a multi-specialty clinic and surgical hospital. The new complex will serve roughly 2,000 patients a day. Upon opening, Oschner Health will create 450 permanent jobs. Our Lady of the Lake Children’s Hospital is slated to complete its $230 million, 350,000 square-foot, 13 bed facility in 2019. Provident ProtonCare is under construction on an $85 million proton therapy center that will provide 95 permanent jobs. Baton Rouge General is expanding both its cancer treatment center at the Pennington Cancer Center as well as an expansion of its Bluebonnet critical care tower, combined totaling over $50 million in project cots. PORT OF GREATER BATON ROUGE: THE UNSUNG SUCCESS STORY The continued success of the Port of Greater Baton Rouge is one that has not been acknowledged enough but is none-the-less one to be of note. The port is now the 9th largest port in the nation in terms of tonnage moved. This is due to the jump in tonnage handled from 2.7 to now 14.1, a 5.2x multiple. The Port of Baton Rouge was able to handle this increased tonnage due to the construction of the Louis Dreyfus grain elevator complex at the port, as well as the Drax Biomass dome storage facilities. There is also continued expansion dollars being spent to further improve the port, with a $20 million expansion by Union Pacific which will almost double its train sizes from 45-car trains to now 88-car trains. STATE CAPITAL AND EDUCATION Baton Rouge benefits from being the state capital, which has a direct impact on the local employment. As of September 2018, roughly 18% of total employment distribution in Baton Rouge was attributed to government related jobs. Aside from being the state capital, Baton Rouge is also home to Louisiana State University (LSU), which ranked 65th on the nations Top 100 Public Colleges. LSU is the highest rated public university in the state, with an enrollment of 31,527 on the main campus. Of the 31,527 enrollment, 22,344 students live off campus according to LSU’s 2018 Fall report. A study done by the Economics & Policy Research Group at the E.J Ourso College of Business has determined that LSU has an economic impact of $5.1 billion, which equates to $1,097 per Louisiana citizen and a return of $13.25 for every dollar of state investment.