OFFERING MEMORANDUM 1553 STEELE ST. DENVER, CO 80206 AUSTIN SMITH JASON KOCH Investment Advisor Co-Founder/Principal [email protected] [email protected] 303.868.9096 303.918.8909 CONFIDENTIALITY DISCLAIMER This confidential Offering Memorandum, has been prepared by Nexus Commercial Realty for use by a limited number of qualified parties. This Offering Memorandum has been provided to you at your request based upon your assurances that you are a knowledgeable and sophisticated investor in commercial real estate projects and developments. Nexus Commercial Realty recommends you, as a potential buyer/investor, should perform your own independent examination and inspection of the property (the “Property”) and of all of the information provided herein related to the Property. By accepting this Offering Memorandum, you acknowledge and agree that you shall rely solely upon your own examination and investigation of the Property and you shall not rely on any statements made in this Offering Memorandum or upon any other materials, statements or information provided Nexus Commercial Realty or its brokers. Nexus Commercial Realty makes no guarantee, warranty or representation about the completeness or accuracy of the information set forth in this Offering Memorandum. You are responsible to independently verify its accuracy and completeness. Nexus Commercial Realty has prepared the information concerning the Property based upon assumptions relating to the general economy, its knowledge of other similar properties in the market, and on other market assumptions including factors beyond the control of the Nexus Commercial Realty and the Owner of the Property. Nexus Commercial Realty make no representation or warranty as to either the accuracy or completeness of the information contained herein, and the information set forth in this Offering Memorandum in not intended to be a promise or representation as to the future performance of the Property. Although the information contained herein is believed to be accurate, Nexus Commercial Realty and the Property Owner disclaim any responsibility or liability for any inaccuracies. Further Nexus Commercial Realty and the Property Owner disclaim any and all liability for any express or implied representations and warranties contained in, or for any omissions from, the Offering Memorandum and for any other written or oral communication transmitted or made available to you. Nexus Commercial Realty shall make available to you, as a qualified prospective investor, additional information concerning the Property and an opportunity to inspect the Property upon written request. This Offering Memorandum and the contents are intended to remain confidential except for such information which is in the public domain or is otherwise available to the public. By accepting this Offering Memorandum, you agree that you will hold and treat Offering Memorandum in the strictest confidence, that you will not photocopy or duplicate it, or distribute it. You agree you will not disclose this Offering Memorandum or its contents to any other person or entity, except to outside advisors retained by you and from whom you have obtained an agreement of confidentiality, without the prior written authorization Nexus Commercial Realty. You agree that you will use the information in this Offering Memorandum for the sole purpose of evaluating your interest in the Property. If you determine you have no interest in the property, kindly return the Offering Memorandum to Nexus Commercial Realty at your earliest convenience. TABLE OF CONTENTS PROPERTY OVERVIEW FINANCIALS LOCATION OVERVIEW 01 PROPERTY OVERVIEW PROPERTY HIGHLIGHTS Newly renovated turnkey asset in Capitol Hill. Located less than two blocks from City Park. Great unit mix with studios, 1 bed and 3 bed units. Value Add opportunity to renovate basement. Washer and dryer in every unit. 4 income producing garages in alley. PROPERTY OVERVIEW Units: 7 Building SF: 6,712 Parking: Street Parking Land: 7,501 Zoning: U-TU-B Year Built: 1905 PROPERTY Year Renovated: 2018 OVERVIEW SYSTEMS Gas / Elec Meters: Master / Individual Water: Master Trash: Waste Management Roof: Pitched Heating: Boiler Cooling: None E 16th AVE. 1553 STEELE ST AREA STREET MAP STEELE ST. E COLFAX AV.E. LOCATION MAP DOWNTOWN DENVER CITY PARK E COLFAX AVE. 1553 STEELE ST E 17th AVE. Congress Park Area Map AREA MAP 1553 STEELE ST PROPERTY OVERVIEW LOCAL FAVORITES DOWNTOWN DENVER FILLMORE WATERCOURSE AUDITORIUM FOODS OGDEN THEATER VOODOO DOUGHNUT DENVER ZOO MILE HIGH ILLEGAL PETE’S COLFAX TATTERED COVER BOOK STORE COLFAX TACOS TEQUILA CHEESMAN WHISKEY PARK 1553 STEELE ST CITY PARK THE UBER SAUSAGE BLUEBIRD THEATER DENVER BISCUIT CO. DENVER BOTANIC GARDENS SPROUTS FARMERS MARKET NATIONAL CEREBRAL BREWING JEWISH HEALTH TAG BURGER BAR PHOTOS1553 STEELE ST PHOTOS 1553 STEELE ST FLOOR PLANS 5701 W 25th Street Denver,Colorado Warehouse 51'5 x 19'10 Warehouse Manager 8'6 x 9'0 Lunch 10'9 x 7'10 Reception/Waiting/Open Office 26'1 x 19'1 N 1/2 Bath Office 10'9 x 11'6 Floor Plans by Overhead Views, (303)886-9578, [email protected] 02 FINANCIALS Investment Summary Purchase Price: $2,080,000 Units: 7 Price Per Unit: $297,143 Total SF: 6,712 Price Per SF: $310 T12 Cap Rate: 5.01% INVESTMENT SUMMARY Year 1 Cap Rate: 5.67% & DEBT SUMMARY Year 1 Cash Flows: $49,377 5 Year IRR: 26.67% Debt Summary Loan to Value: 75.00% Loan Amount: $1,560,000 Loan Term: 60 Months Interest Rate: 4.40% Interest Only Period: 12 Months Amortization: 30 Years UNIT MIX & CURRENT RENTS Unit Type Unit Amount Unit SF Current Ave. Rent Current Rent / SF Market Rent Market Rent / SF Studio 2 400 $1,135 $2.84 $1,175 $2.94 1 Bed / 1 Bath 2 600 $1,273 $2.12 $1,295 $2.16 3 Bed / 2 Bath 3 983 $2,231 $2.39 $2,300 $2.47 Total / Average 7 686 $1,644 $2.44 $1,691 $2.49 RR Annualized Year 1 Year 2 Year 3 Year 4 Year 5 REVENUE Gross Potential Revenue $131,700 $143,400 $147,702 $152,133 $156,697 $161,398 Vacancy ($6,585) ($7,101) ($7,385) ($7,607) ($7,835) ($8,070) Rental Revenue $125,115 $136,230 $140,317 $144,526 $148,862 $153,328 Expense Reimbursements $7,680 $7,680 $7,910 $8,148 $8,392 $8,644 Other Residential Income $1,800 $4,500 $4,635 $4,774 $4,917 $5,065 Effective Gross Revneue $134,595 $148,410 $152,862 $157,448 $162,172 $167,037 EXPENSES Repairs and Maintenance ($5,950) ($5,950) ($6,129) ($6,312) ($6,502) ($6,697) Utilities ($6,300) ($6,300) ($6,489) ($6,684) ($6,884) ($7,091) CASH FLOW Insurance ($3,360) ($3,360) ($3,461) ($3,565) ($3,672) ($3,782) Real Estate Taxes ($6,181) ($6,181) ($6,366) ($6,557) ($6,754) ($6,957) PROJECTIONS Property Management ($7,902) ($7,902) ($8,139) ($8,383) ($8,635) ($8,894) Admin and Other ($700) ($700) ($721) ($743) ($765) ($788) Total Expenses ($30,393) ($30,393) ($31,305) ($32,244) ($33,211) ($34,208) Expenses Per Unit ($4,342) ($4,342) ($4,472) ($4,606) ($4,744) ($4,887) Net Operating Income $104,202 $118,018 $121,558 $125,204 $128,960 $132,829 Cap Rate 5.01% 5.67% 5.84% 6.02% 6.20% 6.39% Debt Service - Yr 1 ($68,640) ($68,640) ($93,742) ($93,742) ($93,742) ($93,742) Total Cash Flow $35,562 $49,377 $27,816 $31,462 $35,218 $39,087 Cash on Cash Return 6.84% 9.50% 5.35% 6.05% 6.77% 7.52% RR Annualized REVENUE Gross Potential Revenue $131,700 Vacancy ($6,585) Rental Revenue $125,115 Expense ReimbursementS $7,680 Other Residential Income $1,800 Effective Gross Revneue $134,595 EXPENSES HISTORICAL Repairs and Maintenance ($5,950) Utilities ($6,300) ANALYSIS Insurance ($3,360) Real Estate Taxes ($6,181) Property Management ($7,902) Admin and Other ($700) Total Expenses ($30,393) Expenses Per Unit ($4,342) Net Operating Income $104,202 SOLD COMPARABLES Price Per Price Per Property Address Units SF Price $ Cap Rate Unit Foot (subject) 1553 Steele St 7 6,712 $2,080,000 $297,143 $310 5.67% 1 1432 Pennsylvania St 8 8,664 $2,375,000 $296,875 $274 5.40% 2 1571 High St 4 4,847 $1,705,000 $426,250 $352 5.04% 3 1200 N Clarkson St 6 2,787 $1,295,000 $215,833 $465 5.67% 4 1401 Detroit St 6 3,085 $1,235,000 $205,833 $400 N/A Averages $1,652,500 $286,198 $373 5.37% 2 E COLFAX AVE. S 1 4 3 03 LOCATION OVERVIEW Capitol Hill is Denver’s most densely populated neighborhood, located just half of a mile away from the Colorado State Capitol building with the famed “Mile High” marker on the 13th step, and two miles southeast of Downtown Denver’s Union Station. It is approximately one square mile in size and is home to more than 37,660 residents. This historic neighborhood is more than 150 years old and is ranked as one of the top 10 most beautiful neighborhoods in the United States. Capitol Hill was once home to some of Denver’s wealthiest residents and is now an exuberant residential, governmental, and commercial center. The neighborhood continues to be highly desirable due its location and amenities. • 50+ galleries • Night Clubs • Fine-art studios • Coffee Houses • Museums • Bistros • Specialty stores • Concert Venues • Restaurants It is near Civic Center Park, which features live music and food trucks, Nearby museums include the Kirkland Museum of Fine and Decorative Art and the Molly Brown House. Popular music venues include The Fillmore Auditorium, Ogden Theatre, and the Bluebird Theater. East Colfax Avenue is the heart of Capitol Hill and serves as the neighborhood’s main commercial area.