OFFERING MEMORANDUM KEMAH SUMMER BREEZE RV RESORT 99 SITES | ±6.5 ACRES IN GALVESTON COUNTY, TX Kemah, Texas ©2017 Colliers International. Information herein has been obtained from sources deemed reliable, however its accuracy cannot be guaranteed. The user is required to conduct their own due diligence and verification. SALE PRICE: $4,300,000 ($43,434/lot) CONFIDENTIALITY OFFERING CONTACT US & DISCLAIMER PROCEDURE Colliers International South Florida, LLC 200 E Broward Blvd, Suite 120 STATEMENT Offers should be submitted in the form of a standard non- Fort Lauderdale, FL 33301 binding Letter of Intent, which can be found on the Colliers International Document Center, and must specify +1 561 353 3635 Intended solely for your own limited use to determine whether the following: you wish to express any further interest in the Property. This confidential memorandum contains brief, selected information • Price (Call for pricing guidance) colliers.com/ManufacturedHousing pertaining to the business and affairs of the Property and has • Length of Inspection Period been prepared by Colliers International South Florida, LLC, • Length of Closing Period primarily from information supplied by the Owner. Although this • Amount of earnest money deposit at execution of a confidential memorandum has been reviewed by representatives Purchase and Sale Contract of the Owner, it does not propose to be all-inclusive, nor does it • Amount of additional deposit upon expiration of contain all the information which a prospective purchaser may Inspection Period require or desire. Neither the Owner, nor any of its officers, directors, employees or agents, nor Colliers International South Florida, LLC, makes any representation or warranty, expressed or MICHAEL J. NISSLEY implied, as to the accuracy or completeness of this confidential National Director memorandum or any of its contents, and no legal liability is Manufactured Housing & RV Group assumed or is to be implied by any of the aforementioned with +1 561 479 1588 respect thereto. Prospective offers are advised to verify the [email protected] information independently. The Owner reserves the right to change the price or any information in this Memorandum, or to withdraw the Property from the market at any time, without HEATHER BLANKENSHIP notice. This confidential memorandum shall not be deemed an Director, RV Business Development indication of the state of affairs of the Property or the Owner, nor Manufactured Housing & RV Group shall it constitute an indication that there has been no change in +1 865 456 4047 the business or affairs of the Property or the Owner since the date [email protected] of preparation of this memorandum. By your receipt of this confidential memorandum, you agree that the information contained herein is of a confidential nature and you will not disclose this memorandum or any part of the contents to any other person, firm or entity without prior authorization from Colliers International South Florida, LLC. KEMAH BOARDWALK TABLE OF CONTENTS EXECUTIVE SUMMARY INVESTMENT SUMMARY PORTFOLIO FINANCIAL ANALYIS PAGE PAGE PAGE 04 06 07 LEASE UP ANALYSIS MARKET OVERVIEWS DEMOGRAPHICS PAGE PAGE PAGE 10 11 14 RENT COMPARABLES DIGITAL ANALYSIS MANUFACTURED HOUSING & RV GROUP PAGE PAGE PAGE 15 16 18 3 | COLLIERS INTERNATIONAL EXECUTIVE SUMMARY GROWING The Colliers Manufactured Housing & RV Group is pleased to offer the SUBMARKETS opportunity to acquire a 100% interest in the the Kemah Summer Breeze RV Resort with a total of 99 lots located in Galveston County in the Houston, TX MSA. The Asking Price for the property is $4,300,000 ($43,434/lot). At this price, the stabilized Cap Rate is 10.0%. FAMILY-ORIENTED RV Stablized NEIGHBORHOODS Sept 2019 Stablized T-12 Expense Community Sites Monthly NOI / Occupancy Occupancy NOI/Site Ratio Rate Site KEMAH 99 0% 90% $558 $0 $4,339 44% HIGH QUALITY The property, which was built by an experienced RV Resort developer and operator, has EMPLOYMENT recently opened, giving investors a brand-new asset at a discount to a stabilized price. RETAIL AMENITIES The people are friendly, the SPORTS & RECREATION atmosphere is quiet, and kids are welcome. 4 | COLLIERS INTERNATIONAL PROPERTY LOCATION HOUSTON 37 MILES NORTH KEMAH RV RESORT GALVESTION 24 MILES SOUTH GULF OF MEXICO 5 | COLLIERS INTERNATIONAL 5 | COLLIERS INTERNATIONAL INVESTMENT SUMMARY The The Kemah Summer Breeze RV Resort Portfolio gives investors an opportunity to purchase a brand-new property at a discount to a stabilized price. Due to the resurgence of oil production activity, Houston has seen significant investments in refining and export related businesses. This, in addition to the growing retirement population, have created additional need for high-quality affordable housing in the region. • 99 lot brand-new RV Resort property in strong Gulf Coast/Houston market • High Quality Amenities including having a pool, hot tub, clubhouse and laundry facilities • Supply/Demand imbalance in the region’s RV market leading to increased occupancy and rent growth UPSIDE OPPORTUNITIES: • Offered at 10.0% Cap rate on stablized operations • Upside in completing lease up of property • Projected to be able to push rates higher as the market continues to see supply and demand imbalances • Increased occupancy and higher average rents across the portfolio through implementation of an online reservation system and dynamic pricing GALVESTON 6 | COLLIERS INTERNATIONAL PROPERTY OVERVIEW SUMMER BREEZE USA | KEMAH 99 2019 6.5 0% N/A Total Sites Year Built Acres Occupancy Good Sam Rating Summer Breeze-Kemah RV Resort provides an investment opportunity for those seeking to purchase: > PROPERTY LOCATION > A brand new, high-quality asset Summer Breeze USA in Kemah enjoys an excellent location less than half an hour from Houston and 15 minutes south of the famous > Near the Kemah boardwalk, a major tourist attraction in the Kemah Boardwalk area which draws over 3 million visitors annually. fast-growing Houston metro area > SITE TYPES > AMENITIES 20/30/50 AMP | Full-Hookups Swimming Pool & Hot Tub > Increased need for temporary housing in the area from Clubhouse & Business Center long-term energy-related construction projects 99 - RV Pads Covered Patio with Deck Tables Commercial Laundry Facility, > A property with upside from implementation of an online Bathroom & Shower Facilities reservation system as well as dynamic pricing software Paved Roads Area Demographics (3 miles) Current Population (2018) Total Households (2018) 15,546 3,785 Average Household 5-Year Population Income (2018) Growth (2018) $74,587 2.14% 7 | COLLIERS INTERNATIONAL PROPERTY PHOTOS SUMMER BREEZE USA | KEMAH 8 | COLLIERS INTERNATIONAL KEMAH SUMMER BREEZE RV RESORT YEAR-1 ADJUSTMENTS & NOTES INCOME AND EXPENSE ANALYSIS > RENTAL REVENUES Proforma Rents based on estimated market rates for Kemah STABILIZED INCOME KEMAH YR 1 occupancy is assumed to be 90% based $ PER SITE on market averages for RV Parks POTENTIAL GROSS RENTS (RV SITES) $755,714 $1,559,306 < 99 Sites Less Vacancy ($75,571) > OTHER INCOME Electric reimbursement and laundry/store/ TOTAL RENTAL INCOME $680,142 $6,870 vending income based on other Summer Adjustments ($11,385) ($115) Breeze locations EFFECTIVE RENTAL INCOME $668,757 $6,755 < 99 Sites > PAYROLL & RELATED Economic Occupancy 90% Manager: Estimated at $30,000 OTHER INCOME Office Personnel: Estimated at $11,520 for one Utility Reimbursment $89,434 $855 PT employee Maintenance Lead: Estimated at $25,000 Other Income $11,385 $113 Balance: Benefits, Taxes and Contingency TOTAL OTHER INCOME $100,819 $1,018 estimated at 12% of compensation EFFECTIVE GROSS INCOME $769,576 $7,773 < 99 Sites > ADMINISTRATIVE STABILIZED EXPENSES KEMAH % OF EGI Based on historicals of other Summer Breeze $ PER SITE locations, adjusted for occupancy Payroll & Related $74,502 $753 9.7% > MARKETING, REPAIRS & MAINTENANCE General & Administrative $25,740 $260 3.3% Based on 2018/annualized 2019 average Marketing $12,000 $121 1.6% Maintenance & Grounds $24,750 $250 3.2% > MANAGEMENT FEES Management Fees $15,392 $155 2.0% Estimated at 2% of Total Income (EGI) TOTAL VARIABLE EXPENSES $152,384 $1,539 19.8% > UTILITIES FIXED EXPENSES Based on historicals of other Summer Breeze Utilities $147,364 $1,489 19.1% locations, adjusted for occupancy Insurance $10,300 $104 1.3% > INSURANCE Real Estate Taxes $30,000 $303 3.9% Based on Owner’s proforma estimate TOTAL FIXED EXPENSES $187,664 $1,896 24.4% > REAL ESTATE TAXES TOTAL OPERATING EXPENSES $340,048 $3,435 44.2% Estimated based on assessments of other Expense Ratio (% of EGI) 44.2% Summer Breeze locations. Interested parties NET OPERATING INCOME $429,528 $4,339 55.8% are encouraged to seek their own tax guidance 9 | COLLIERS INTERNATIONAL LEASE UP ANALYSIS NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV INCOME 2019 2019 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 Potential Gross Rents $62,976 $62,976 $62,976 $62,976 $62,976 $62,976 $62,976 $62,976 $62,976 $62,976 $62,976 $62,976 $64,865 Vacancy Loss $58,523 $54,070 $49,618 $45,165 $40,712 $36,259 $31,806 $27,353 $22,900 $18,448 $13,995 $9,542 $6,487 Vacancy % 93% 86% 79% 72% 65% 58% 51% 43% 36% 29% 22% 15% 10% Total Rental Income $4,453 $8,906 $13,359 $17,811 $22,264 $26,717 $31,170 $35,623 $40,076 $44,529 $48,981 $53,434 $58,379 Adjustments ($949) ($949) ($949) ($949) ($949) ($949) ($949) ($949) ($949) ($949) ($949) ($949) ($977) Effective Rental Income $3,504 $7,957 $12,410 $16,863 $21,316 $25,768 $30,221 $34,674 $39,127 $43,580