500 SOUTH 900 EAST APARTMENTS 13 UNITS IN SALT LAKE CITY 500 SOUTH 900 EAST | SALT LAKE CITY, UT 84102 JASON WADSWORTH ANDREW WADSWORTH 801-230-3794 801-922-0662 [email protected] [email protected] TABLE OF CONTENTS 500 SOUTH 900 EAST ANALYSIS FINANCIAL FINANCIAL ANALYSIS VIEW Financial Analysis 2 Notes to Proforma 3 PROPERTY INFO PROPERTY INFO Summary / Ratings 4 Neighborhood / Nearby Jobs 5 MAPS Transportation Map 6RKET OVERVIEW Job Density Map 7 Area Map 8 Parcel Map 9 MAPS PHOTOS Aerial View 10-11 Unit Interior 12-15 COMPARABLE RENTS PHOTOS Comparable Rents Map 16-17 One Bedroom: Monthly Rents 18 One Bedroom: Rent Per Square Foot 19 Two Bedroom: Monthly Rents 20 Two Bedroom: Rent Per Square Foot 21 COMPARABLE RENTS COMPARABLE Three Bedroom: Monthly Rents 22 Three Bedroom: Rent Pet Square Foot 23 Vacancy 24 Concessions 25 MARKET INFO MARKET 1 500 South 900 East, Salt Lake City Annualized Annualized Avg Market Monthly Pro Forma Type % of Mix Unit SF Total SF Market Rent Rent / SF Proforma Avg Rent / SF Unit Mix Rent Market Rent Rent Roll Rent 13 One-Bed / One-Bath 100% 550 7,150 $950 $12,350 $148,200 $1.73 $1,133 $13,596 $2.06 Income In-Place Variance Pro Forma % of MKT Financing New Loan Scheduled Market Rent $140,400 $36,348 $176,748 Interest Rate 5.00% FINANCIAL ANALYSIS ANALYSIS FINANCIAL Less: Loss to Lease ($2,400) $633 ($1,767) (1.0%) Amortization Years 30 Gross Potential Rent (GPR) $138,000 ($62,733) $174,981 % of GPR LTV 65% Less: Vacancy ($6,900) ($1,849) ($8,749) (5.0%) Loan Origination Fee 1% Less: Concessions $0 $0 $0 0.0% Loan Amount $1,300,000 Less: Bad Debt / Delinquency ($690) ($185) ($875) (0.5%) Down Payment $713,000 Less: Non-Productive Units $0 $0 $0 Monthly Payment $6,979 Annual Payments $83,744 Net Rental Income $130,410 ($72,357) $165,357 Interest Only Monthly $5,417 PROPERTY INFO In-Place Variance Pro Forma $/Unit Per Yr Plus: Fee Income $2,600 $9,100 $11,700 $900 Pricing Plus: RUBS Income $13,000 $260 $13,260 $1,020 Price $2,000,000 Plus: Media/Internet Income $0 $0 $0 $0 Price Per Unit $153,846 Plus: Other Income $0 $0 $0 $0 Price Per Square Foot Total Other Income $15,600 $9,360 $24,960 $1,920 $279.72 Total Operating Income $146,010 ($62,997) $190,317 MAPS Expenses In-Place Variance Pro Forma Administrative $1,950 $39 $1,989 $153 Advertising & Promotion $1,105 $22 $1,127 $87 Payroll $15,600 $312 $15,912 $1,224 Repairs & Maintenance $4,550 ($1,560) $2,990 $230 Turnover $2,600 ($325) $2,275 $175 Management Fee $5,840 $1,772 $7,613 $586 Utilities $13,000 $260 $13,260 $1,020 Media/Internet Expenses $0 $0 $0 $0 PHOTOS Contracted Services $1,300 $26 $1,326 $102 Real Estate Taxes $8,148 $815 $8,963 $689 Insurance $3,250 $65 $3,315 $255 Replacement Reserve $4,550 $0 $4,550 $350 Total Expenses $61,893 $1,426 $63,320 $4,871 Management Fee % 4.0% 4.0% Net Operating Income $84,117 $42,880 $126,997 $9,769 Less Debt Service ($83,744) ($83,744) Cash Flow $372 $42,880 $43,253 Total Out of Pocket $713,000 $804,000 Immediate CapEx for Higher Income $91,000 COMPARABLE RENTS COMPARABLE Cash on Cash Return 0.1% 5.4% Cash on Cash Return (Interest Only) 2.7% 7.7% Cap Rate 4.2% 6.1% DCR 1.00 1.52 MARKET INFO MARKET 2 THE OPPORTUNITY FINANCIAL ANALYSIS FINANCIAL The 500 South apartments (13 units) are part of Salt Lake City’s East Central district. The property sit just west of the University of Utah and provides residents excellent access to both the University and Downtown Salt Lake via TRAX (lightrail) red line. The TRAX red line runs from the U of U all the way to Daybreak, Utah on the southwest end of the Salt Lake Valley. The red line’s 900 East Station is just a block from the property. Two renown shopping centers are within walking distance: Trolley Square and Trader Joe’s as well as the coveted 9th and 9th neighborhood with its eclectic mix of shops and entertainment. There are Three Opportunities for potential investors looking to purchase the property: 1. The property features an outstanding location and provides investors with a rare Salt Lake opportu- nity. Utah is a high growth state and Salt Lake City shines as one of the most economically dynamic and PROPERTY INFO fastest growing markets in the nation. Investors can purchase the property and run it as is, allowing the property to appreciate as Salt Lake and the state of Utah continue to flourish. 2. By investing additional capital into the 13 units in renovations, potential investors can achieve higher rents to better compete with neighboring product. 3. The property also presents investors with a potential development opportunity. The existing units can be torn down and a new student housing or market rate building can be constructed. NOTES TO PROFORMA MAPS InPlace column is an annualized snapshot of how the property will likely run under new ownership at cur- rent market conditions. We used the following methods and assumptions: • Scheduled Market Rent & Gross Potential Rent is based on a recent rent roll. • Vacancy, Concession, & Bad Debt are based on current market conditions • Expenses are based on current market conditions PHOTOS • Real Estate Taxes are based on the current tax bill. Utah is a non-disclosure tax state, and taxes do not increase at the time of sale. Variance is the difference between Pro Forma and In-Place numbers Pro Forma column represents an estimate for first year income and expenses for a new buyer after addi- tional renovation in approximately 12-24 months. Pro Forma is based on the following assumptions. RENTS COMPARABLE • 3.0% Rent Growth • Rent premium between approximately $100-$200 per unit after renovations at an estimated cost of approximately $7,000 per unit. • Real Estate Taxes will be increased 10% over the current tax bill. Although Utah is a non-disclosure state and taxes are not increased at time of sale, all multifamily properties are assessed regularly using an estimate income approach to value. Taxes will go up as this occurs. Replacement Reserves have been normalized across all columns for easy comparison at $350 per unit. INFO MARKET Loan is a new agency loan at the current interest rate. We used a more conservative loan based on a fixed rate 10-year term. Currently two or three years of interest only financing is available to qualified buyers. 3 500 SOUTH 900 EAST FINANCIAL ANALYSIS ANALYSIS FINANCIAL UNIT UNIT RENT TYPE RENT PROPERTY INFO PROPERTY SUMMARY MIX SF PER SF UNITS 13 13 1/1 550 950 $1.73 BUILT 1978, 1963 BUILDINGS 3 MAPS CONSTRUCTION Wood Frame, Brick Exterior RATINGS ROOF Pitched, Aluminum/Asphalt LOCATION A METERING Gas: Sub-Metered BUILDING CONDITION B Electricity: Individually MARKETING WINDOW A- Water, Sewer, Trash: Master CURB APPEAL B- PHOTOS RENTABLE SF N/A ACCESS TO SERVICES A- ACREAGE 0.62 AMENITIES C+ DENSITY 20 Units Per Acre PARCEL NO. 16053780010000; 01; 02 16053780051001; 03; 04 AMENITIES •Walkable to TRAX •Near Downtown and the COMPARABLE RENTS COMPARABLE University of Utah •Easy access to Jobs, Shopping, and Dining •Select Upgraded Units •Washer/Dryer Hookups MARKET INFO MARKET 4 500 SOUTH 900 EAST FINANCIAL ANALYSIS FINANCIAL NEARBY JOBS DOWNTOWN Over 260,000 jobs are in the SALT LAKE CITY immediate downtown Salt Lake City area and are easily accessed by bus ot TRAX. CITY CREEK Approximately 2,000 jobs CENTER are located in world-class PROPERTY INFO fashion and dining destina- tion with over 100 stores and restaurants in a casual, pedes- trian-friendly environment. NEIGHBORHOOD UNIVERSITY OF NORTH 500 South , Multifamily UTAH EAST Multifamily STATE STREET 10,000 commercial, retail CORRIDOR and service jobs along MAPS SOUTH Multifamily State Street, a major north south thoroughfare. WEST 900 East, Multifamily I-15 CORRIDOR 25,000 light industrial jobs SHOPPING •Whole Foods along the east and west side •Smith’s (Kroger) frontage roads •Trader Joe’s SALT LAKE The airport supports approx- SCHOOLS •Bennion Elementary School INTERNATIONAL imately 35,300 full-time PHOTOS •Bryant Middle School AIRPORT jobs, generating $3.3 billion •East High School in total economic output to the state’s economy and is COLLEGE •University of Utah currently in the midst of a •Westminster College $3.6 billion redevelopment •Salt Lake Community College project creating over 23,900 COMPARABLE RENTS COMPARABLE full-time jobs. HOSPITALS •Salt Lake Instacare •Salt Lake Regional GATEWAY MALL The Gateway Mall, a con- •Univeristy Hospital temporary and prestigious downtown open-air mall RECREATION •Eccless Stadium & Arena with over 100 national, re- •Hoogle Zoo gional, and local tenants. •Vivint Arena PRIMARY Part of the Intermountain TRANSPORTATION •TRAX Red Line CHILDREN’S Health Care (IHC) system, MARKET INFO MARKET •UTA Bus Route 209 HOSPITAL the hospital is adjacent to the University of Utah Hospital on the campus. It is Utah’s only children’s hospital and employs 2,900 people. 5 6 MARKET INFO COMPARABLE RENTS PHOTOS MAPS PROPERTY INFO FINANCIAL ANALYSIS AREA MAP AREA S Subject Property S PARCEL MAP FINANCIAL ANALYSIS FINANCIAL PROPERTY INFO S MAPS PHOTOS COMPARABLE RENTS COMPARABLE PARCEL NO: 16053780010000 16053780021001 16053780021002 16053780051001 16053780051003 INFO MARKET 16053780051004 ACREAGE: 0.62 Acres S Subject Property 7 TRANSPORTATION MAP FINANCIAL ANALYSIS ANALYSIS FINANCIAL S PROPERTY INFO MAPS PHOTOS Legend COMPARABLE RENTS COMPARABLE 701 TRAX Blue Line 703 TRAX Red Line 704 TRAX Green Line 750 FrontRunner S-Line Route 209 MARKET INFO MARKET S Subject Property 8 JOB DENSITY MAP FINANCIAL ANALYSIS FINANCIAL PROPERTY INFO MAPS S PHOTOS COMPARABLE RENTS COMPARABLE Legend 5 - 2,299