Asset Ripe for Redevelopment 119 Hig H St SE ABQ, NM 87102

119 High St SE ABQ, NM 87102 NM 87102 St SE ABQ, 119 High Original 16 Units:

Property Tour: 4/27/21, Tuesday @ noon Size: 7,131 sf Offers Due: 4/29/21, Thursday @ noon Land: 0.155 ac Register for Tour: www.nmapartment.com/high Ask Price: $218,000 Asset Ripe for Redevelopment 1

The Offering to own a piece of history The Property Address: 119 High Street SE On behalf of the owners, NM Apartment Advisors and Deacon Property Number of Services are excited to bring to market this rare opportunity to redevelop original units: 16 this building in the historic Huning Highlands neighborhood. Year of 1901 per county construction: assessors records Located walking distance from iconic Albuquerque venues like the Parq Bldg. Size: 7,131 sf +/- hotel, Holy Cow, the Grove, the Artichoke Café, this property offers the trifecta in high walk, bike and transit scores. Site Size: 0.1671 acres Avg. Unit Size: 446 sf The property’s current use was not recognized when the new IDO zoning went into place - if you choose to renovate/rehab into apartments, you will UPC#: 101405750634511803 need to apply for a zone change. Legal: Lot 5, Block 26 Huning Highland Addition Additionally, the property experienced a resident caused Þre in the upper floor east side. Criterium Engineers has reviewed the property and deemed it salvageable. Ask Price: $218,000 Whether you desire to renovate into a large house with a guest quarters, $/ unit: $13,625 apply for zoning approval to continue its previous use of 16 units, or $ /sf: $30.57 scrape the site and start over, the ask price of $218,000 is a once in a Potential if (will require Renovated zoning generational opportunity to improve the area by transforming this asset. into 16 units approval) Potential Market $1,495,000 value Avg. Rent: $746 GRM: 10.43 Cap Rate Before 5.76% reserves: Year 1 NOI: $81,943 Potential Before Tax IRR: 20.20% 16.50% After Tax IRR:

Location - Epicenter of Albuquerque Activity

Location - East Downtown (EDO) development activity

Steps to the Potential

A. As-is condition today– value at $218,000

B. Estimated renovations to turn it into your dream (Large house? Rental? New development?)

C. Potential Future value as an apartment $1,495,000 (if you can secure the zoning)

= Buyer’s potential upside - is considerable!

A. Annual Property Operating Data (APOD) - Potential

Internal Rate of Return - Potential Renovation

1. 2. 2. 3.

As a commercial real estate investor, the federal tax code gives you three advantages compared to other investments including: 1. Deduct your annual mortgage interest before you calculate your taxable amount; 2. Deduct your cost recovery/depreciation before you calculate your taxable amount, in the future when you sell the property, you only pay back 25% of the beneÞt you received; 3. Your long term proÞt, or capital gain, is taxed at 20%

The combination of these beneÞts could help lower an investor’s effective federal tax rate from 35% federal tax rate to only 18%.

Comparable Sales - Potential Renovation

Amazing potential - But what can I do with it?

Hi Todd, Good Morning Todd, The nature of properties within a Historic District is that all contributing properties in the district are considered to be registered properties. The house at 119 High is a con- I think I talked to someone about this property very briefly back when I worked tributing property. I am not sure what plans you have for the property, but whatever is at the City, at least regarding the zoning issue for multiple units. The pre-IDO done will need to go through the Landmarks Commission for review. Demolition is not zoning was from a 1988 Sector Plan that based the zoning on the R-1 district but really an option, although some portions which were added might be able to be re- allowed existing apartments to continue if they existed when the plan was adopt- moved. Returning to 16 units is most unlikely and anything other than single-family will ed. The R-1 reference resulted in the IDO R-1 designation so that clause about require a variance. pre-existing apartments was lost and now the normal nonconformities rules apply. Since it has been vacant so long, I imagine the use cannot be restarted with- Here is the link to the design guidelines for the neighborhood: out a zone change.

https://documents.cabq.gov/planning/historic-zones/HPO-Guidelines- There are several R-ML properties just off Central in this area, so I think a zone HuningHighland-FourthWard-8th&Forrester.pdf change is feasible. Jim and I also did the zone change from R-1 to MX-L for the commercial building at Arno and Tijeras and the neighborhood was supportive Feel free to call me if you want to discuss anything more specifically. of that request for improvement of the property. The historic review aspect by the Landmarks Commission should reduce any fears that someone would tear it Sincerely, down and make boxier like a regular apartment complex considering there is a house between it and the building the Grove is in. I think we could get support if someone is willing to put in the right effort with the renovation.

For what it’s worth, the City cannot completely deny the due process of trying to demolish the structure. You will need to request a Historic Certificate of Appro- priateness for the demolition (likely need plans for what will replace it) and if the Commission denies the request, it only institutes a one-year moratorium where the City shall try to preserve the structure. If the City Council determines there is no reasonable return or way to preserve it, they “shall issue a demolition permit.” There is a lot of information and criteria to determine that return/preservation. The Landmarks Commission would then review any building plans for new construction that would replace it if they didn’t approve that in conjunction with demolition.

We would be happy to provide a proposal that could include both a zoning change and a Historic Certificate of Appropriateness – Major (for demolition or alterations) for any prospective buyers to review. Let me know if you have any questions.

Thanks, Michael Vos, AICP CONSENSUS PLANNING, INC. phone (505) 764-9801 / [email protected]

Property Info - GIS

Dimensional Sketch of property outline

Property Photo

119 High SE past advertisements

Property Photographs

Property Photographs - Exterior

Property Photographs - Interior

Property Photographs - Fourplex Building

Property Info - Location

Huning Highland Historic District

From “huninghighlands.org”

Arno Huning from Albuquerque Journal

Huning Highland Historic District - Wikipedia

Wikipedia The Huning Highlands Historic District is a historic district in Albuquerque, New Mexico which encompasses the entirety of the Huning Highlands neighborhood. The district is bounded by Dr. Martin Luther King Jr. Avenue to the north, Locust Street to the east, Iron Avenue to the south, and the Burlington Northern Santa Fe railroad tracks to the west, covering an area of about 0.3 square miles (0.78 km2). The neighborhood was Albuquerque's first residential subdivision and was mostly developed between the 1880s and 1920s. It is known for its high concentration of Victorian and early 20th-century houses. [3] The district was added to the New Mexico State Register of Cultural Properties in 1976 and the National Register of His- toric Places in 1978.[2]

The Atchison, Topeka, and Santa Fe Railway reached Albuquerque in 1880, fueling land speculation as investors hoped to profit from its arrival. The New Mexico Town Company, formed by local businessmen Franz Huning, Elias S. Stover, and William Hazeldine, succeeded in attracting the railroad facilities to their chosen site about 1.5 miles (2.4 km) from the existing community at Old Town. The 3.1-square-mile (8.0 km2) parcel they assembled quickly developed into the booming community of New Town—today's Downtown.[4] Huning also owned land in the rolling sandhills further to the east, which was known as the Highlands due to its elevation. In 1880, the land was platted as the first subdivision to be added to the original townsite. This new neighborhood was named Huning's Highland Addition, which later shifted to Huning High- lands.[5]

The neighborhood was laid out by civil engineer Walter G. Marmon, who named the main north-south streets Arno, after Franz Huning's son, Walter and Edith after his own son and daughter, and Broadway, because "every town should have a Broadway".[5] The uppermost street of the gently sloping neighborhood was named High Street. The Highlands quickly became one of Albuquerque's most popular residential areas and was home to many of the city's prominent early residents. Unlike the old Hispanic neighborhoods like Old Town, Barelas, and Atrisco, Huning Highlands was primarily built by recently arrived Anglo-Americans and European immigrants. As such, the houses in the neighborhood reflected styles and materials popular in the eastern and Midwestern United States—Queen Anne, Italianate, and other Victorian styles—rather than traditional regional forms. Most of the houses were built using prefabricated trim and architectural elements in a mix-and-match approach not adhering to any particular style, though some are more cohesive.[5]

The neighborhood continued to fill in between the 1880s and 1920s, by which time it was almost completely built up.[5] Residents enjoyed amenities like Highland Park, one of the city's oldest public parks, the Old Main Library, and an electric streetcar line which went into service in 1911.[6] However, as the city continued to grow, many wealthy residents abandoned the older inner-city neighborhoods in favor of the more suburban developments further to the east. By the 1970s, Huning Highlands had become a relatively poor neighborhood consisting largely of absentee-owned rental housing.[3]

The Huning Highlands Historic District was added to the National Register of Historic Places in 1978 and in 1980, the Albuquerque City Coun- cil approved the city's first Historic Overlay Zone for the neighborhood.[7] The city designation requires approval from the Landmarks and Urban Conser- vation Commission for any alterations to contributing properties in the district and provides tax incentives for home restoration projects.[8] These actions had a positive effect on the neighborhood and led to many of the historic houses being restored. According to the Huning Highlands Historic District Association, the percentage of properties that were considered "blighted or substandard" decreased from 52% in 1976 to 17% in 1986 and was estimated at less than 5% by 2005.

Franz Huning

Arno Huning from Albuquerque Journal

Forbes Ranks Albuquerque #8 in Best Cities for Jobs The Market—Albuquerque, NM  Forbes, October 2007 Although the rest of the country might know Albuquerque, New Mexico in the news UNM Schools Ranked Among Best  Albuquerque for its award winning TV Show, 9th best mid-sized city of the Future Hispanic Business- September 2007 Breaking Bad, astute investors are looking at Foreign Direct Investment magazine—03/2015 Albuquerque Named 25th Among America's Hottest Job Markets Albuquerque as the place to invest.  6th best city to travel to for food snobs Washington Business Journal—Bizjournal September 2007 With neither a boom or bust mentality, Albuquerque Travel+Leisure—03/2015 Albuquerque Named Among the 50 Best Adventure Towns has a strong record of rent increases and a lack of  America’s best city for Global Trade for Skilled National Geographic Magazine, September 2007 new product. This results in high barriers to entry Workforce for competing apartments making multifamily in- New Mexico Ranked Fifth Nationally for Manufacturing Momentum  vestment a solid choice. Business Facilities, June 2007 3rd best city for rent growth Thanks to major employers like Sandia National Albuquerque Ranked #9 Among Cities for Most Educated Workforce All Property Management as reported in ABQ Journal—  Laboratories and Intel Albuquerque is home to Business Facilities- June 2007 more PhD’s per capita than in any city in North 6th best city in US for connecting workers to jobs using America. New Mexico Ranked #7 for Pro-Business Climate (#1 in the Public Transportation  Southwest) Albuquerque has an exceptional quality of living, Brookings Institute—July 2012 offering over 147 miles of hiking and biking trails Albuquerque Ranked #2 Arts Destination One of the 10 best park systems in the nation  inside the city as well as mile high Sandia moun- AmericanStyle Magazine, June 2007 Trust for Public Land—2012 tains, and North Americas largest cottonwood for- 3rd most Þttest city est, Albuquerque is known for its 300+ days of sun- Albuquerque Named Among the Top 20 Metros for Nanotech shine, skiing and golf in the same day, stunning Men’s Fitness Magazine– 2012 sunsets, and abundance of outdoor activities, Albu- Albuquerque Named one of the Top 20 Midsize Cities for Doing 3rd best city to make movies Business querque is the amenity for most apartment resi- Moviemaker.com– June 2012 dents. Top 25 best places to Retire Albuquerque Fittest City in the Nation  CNNMoney.com—Sept. 2011 Men's Fitness, March 2007

15th best city in Bloomberg’s Business Week (best cities) Albuquerque One of America's 50 Hottest Cities,  Bloomberg’s Business Week—2011 Expansion Management, February 2007

#17th best bike friendly city Albuquerque Named a Top 10 City for Movie Making, #1 place where home prices are Bicycling Magazine—2010 MovieMaker Magazine, Winter 2007 likely to rise Top Ten for Being a Healthy Community Albuquerque Ranked 3rd Smartest City to Live, Outside Magazine—#6—August 2009

One of the Best Cities in the Nation Albuquerque One of the Top Metros in U.S. Overall for Public Schools  - Expansion Management, May 2006 Kiplinger Magazine—#2—July 2009

Top 10 places to Live Bizjournals Survey Ranks Albuquerque 18th for Jobs,

U.S. News & World Report—June 2009 Albuquerque Best in Nation for Business and Careers

AAA rates Albuquerque 2nd in vacation affordability  Forbes, May 2006 American Automobile Association—June 2008 Forbes Magazine Ranks Albuquerque as 5th Best Metro Overall and  UNM Anderson School Ranked in Global 100 Lowest Cost City for Doing Business- Forbes, May 2005

Aspen Institute, October 2007 30

Multifamily investment sales process and thoughts:

My name is Todd Clarke CCIM and I am a commercial Realtor who has been selling authorizes me to let you know when a (low) offer is likely not to be respond- apartment investments for over 30 years. In that time, I have listed/sold over 13,909 ed to by my Seller, so call Þrst before your client suggests a low ball offer. units totaling $572M. I also teach investment sales analysis for the CCIM institute (23 If your client’s strategy is to count days on market and expect a discount, please let years, over 4,000 students in a dozen countries). I share this with you so you know that them know we specialize in helping our clients establish the leading edge of cur- the balance of this document comes from experience, and my ideals about how the rent market pricing, and our clients are prepared to wait for the right investor who apartment business runs. This also gives you insight into how we counsel and advocate can meet their deal goals. for our clients. The follow-up questions Sellers ask after what is the price is, does the Buyer know the market? Have they been here? Do they have a team (management, lender, etc.) Most of your Buyer’s questions about rents, expenses, and property info can be an- in place? Be prepared to answer these questions an advocate for your buyer, swered by downloading the flyer & APOD (Annual Property Operating Data) from the particularly if there are multiple competing offers. document center. Please READ THEM. If you are new to investment sales, I am glad Most of my Sellers are as focused on certainty of closing as they are the price, so to assist you, but please know: don’t be surprised when we ask you for proof of funds of down payment and a prequal letter from a qualiÞed lender. Showings/Tours The standard in commercial transactions is that the Buyer pays for their own inspec- Residents have rights under the NM Landlord Resident Relations act, and Landlords tions and Þnancing costs, and issues raised by the Buyer’s lender are the Buyers take that law seriously. to deal with. Many Landlords consider their residents to be their customers. They work hard to keep them happy. Any attempt by a 3rd party to visit the property without the BID Process Landlord’s prior written approval jeopardizes the Landlord’s and Resident’s happy If this property is being marketed with the BID process, then the ask (start) price is customer relationship. set low with the intention of garnering a lot of investor interest that will lead to Do not disturb the residents, do not walk the property. It is considered rude to do multiple offers, a best and Þnal round with a Þnal close price that is considera- either, and many Sellers will refuse to work with Buyers who violate this provision. bly higher than the original ask price. This process may be new to you, but we Landlords (Sellers) rarely are willing to show a property prior to having an offer. have been using it for over 16 years. By participating in the BID Process, best Where possible, we have included virtual tours in high deÞnition – please look to the case, your buyer becomes an owner, worst case they receive an education on flyer for those links. current market conditions. Sellers suggest Buyers make an offer subject to inspection and that the buyer work If the property is being marketed using the BID process, the tour date and time is the hard to consolidate their inspections and appraisal review on the same business only time the property is available for a viewing. This is not an inspection. Please day. do not bring your vendors, inspectors, ladders, etc. This is not an open house, but a guided tour that lasts 10 to 20 minutes and allows you a chance to view the inte- Commercial vs. Residential Real Estate sales rior condition. Apartment investments are considered commercial real estate sales. Although the occasional apartment will sell to an owner/occupant, from the Seller’s and Listing Client Control Broker’s perspective, they approach the transaction in a business-like manner, Your client’s actions represent you in this transaction, and your actions represent where it is all about the numbers, and very little about the emotions. them. Commercial brokers work regular business hours during business days, and so do Please let your client know they have only one chance to make a good impression most of their clients. Please do not write an offer with an expiration date on a with my Sellers. weekend, or a response period of anything less than 3 business days. Please do When in doubt, please ask for permission via email, do not take action and expect not text, or expect return phone calls after regular business hours. forgiveness from a Seller. Please let your clients know that their actions will be considered by the Seller when they review offers and rank them in likelihood to Offers close. Commercial transactions often start with a two page letter of intent or LOI – this allows the parties to share the skeleton of a deal. If they can reach a meeting of the Open invitation – on a monthly basis, we host a luncheon for brokers and property minds, they will then flesh out the details in a purchase and sale agreement. If managers who have an interest in apartment investments – just email me for an invita- your client chooses to do a letter of intent, please make sure your letter of intent tion. form includes the basics like price, closing date, contingencies, and who pays what closings costs. Please know that I love this business and I am glad to share my knowledge, expertise The current (2020) activity level from investors interest in our marketplace is 10 times and enthusiasm with you and your Buyer. I want to help you, help them, to be a great higher than it was in 2016, our market is saturated with out of state investors, and landlord and investor. I often tell buyers that they have a 1 in 10 chance of becoming an owner, where as everyone of my Sellers have a 1 in 1 chance of selling. I look forward to working on this transaction with you—Sincerely—Todd Clarke CCIM Please let your client know that I work with my clients on a merit based negotiation CIPs system - we do not play the high/low game, and my listing agreement pre- 31

Further Information

Do not walk property. To register for the tour on 4/27/21, Tuesday @ noon and access to conÞdential documents go to: www.nmapartment.com/high Marketing Advisors

In the event of multiple offers, BID process will be used. Ad- ditional information on the sales process can be found at www.nmapartment.com/bidprocess/bidprocess.pdf The owner and property are represented by Todd Clarke CCIM of NM Apartment Advisors and Kyle Deacon of Deacon Property Services. If there is any information you need on the market, submarket, or the property, please do not hesi- tate to ask.

Todd Clarke Kyle Deacon CEO Qualifying Broker NM Apartment Advisors Inc. Deacon Property Services, LLC NMREC License #13711 NMREC Lic. #15579 505-440-TODD 505-878-0100 [email protected] [email protected] www.nmapartment.com www.deaconpropertyservices.com 32