v INVESTMENT PROPERTY OFFERING POLK TERRACE APARTMENTS 338 NORTH 23RD STREET PHOENIX, ARIZONA 85006 1
PROPERTY OFFERING Polk Terrace is a 30-unit apartment community, located in central Phoenix, Arizona. The property has been remodeled and repositioned. It is ready for a new owner who manages or delegates the management, as the property has no deferred maintenance, no pool, and is 100% occupied, which makes it easy to manage (either by an owner or a property management company). The Metro Light Rail is located just one block south of Polk Terrace, providing tenants easy transportation around the Greater Phoenix Metro Area. The property is approximately two miles east of Downtown Phoenix, which is home to numerous retailers, entertainment venues and major employers. Some of these include: US Airways Center (Phoenix Suns), Chase Field (Arizona Diamondbacks), Dodge Theatre, Civic Plaza and Arizona Science Center. Polk Terrace has a good unit mix, consisting of 18 one bed/one bath units at 500 SF and 12 two bed/ one bath units at 700 SF. The property was built in 1985 and is individually metered for electricity. Community amenities include an on-site laundry facility, gated property and a leasing office. Polk terrace represents an opportunity to purchase a fully rehabilitated property, individually metered for electricity, 1985 construction, pitched roofs, great unit mix of 1 and 2 bedroom units and an excellent cap rate. This is a regular offering and not a short sale. LIST PRICE $1,350,000 PROPERTY HIGHLIGHTS 70% of Units Upgraded with Tile 1985 Construction, Individually Metered for Electricity Approximately 7 Minute Walk to Light Rail 5-10 Minute Drive to Phoenix Sky Harbor International Airport Close Proximity to Downtown Phoenix Regular Sale Great Assumable Financing 2 POLK TERRACE PHOENIX, ARIZONA
TABLE OF CONTENTS Section I: Section II: Section III: Section IV: Appendix: Financial Analysis Unit Mix/Expenses Pricing Analysis Property Overview Property Highlights The Offering Parcel Map Property Photographs Location Map Aerial Market Comparables Rent Comparables Summary Rent Comparables Map Sales Comparables Summary Sales Comparables Map Area Overview Area Information Area Map Demographics Disclaimer Page 4 Page 7 Page 15 Page 22 Page 27 3 POLK TERRACE PHOENIX, ARIZONA
v FINANCIAL ANALYSIS 4 POLK TERRACE PHOENIX, ARIZONA
v UNIT MIX / EXPENSES FLOOR PLAN Number of Units Unit Mix Square Feet Total SF Actual Rents Actual PSF Actual Monthly Market Rents Market PSF Monthly Market One Bedroom/One Bath 18 60% 500 9,000 $459 $0.92 $ 8,262 $499 $1.00 $8,982 Two Bedroom/One Bath 12 40% 700 8,400 $542 $0.77 $ 6,504 $599 $0.86 $7,188 Totals/Average 30 100% 580 17,400 $501 $0.85 $14,766 $549 $0.93 $16,170 Actual Operating Expenses Total $/Unit $/SF Real Estate Taxes $ 7,653 $ 255 $ 0.44 Insurance $ 4,138 $ 138 $ 0.24 Payroll $ 3,414 $ 114 $ 0.20 Water/Sewer $ 14,296 $ 477 $ 0.82 Trash $ 1,632 $ 54 $ 0.09 Electric $ 5,660 $ 189 $ 0.33 Repairs & Maintenance $ 4,532 $ 151 $ 0.26 Landscaping $ 2,400 $ 80 $ 0.14 Management Fee (4%) $ 6,308 $ 210 $ 0.36 General & Administrative/Misc. $ 770 $ 26 $ 0.04 Marketing & Promotion $ 145 $ 5 $ 0.01 Total Operating Expenses $ 50,948 $ 1,698 $ 2.93 5 POLK TERRACE PHOENIX, ARIZONA
v PRICING ANALYSIS Income & Expenses Total $/Unit Financial Analysis Purchase Price Scheduled Gross Income $ 194,040 $ 6,468 Price Per Unit $45,000 Price Per Square Foot Loss to Lease 12.0% $ (23,278) $ (776) Net Operating Income CAP Rate $102,085 7.56% Gross Potential Rent $ 170,762 $ 5,692 Pre-Tax Cash Flow Cash on Cash $45,558 9.64% Vacancy/Concessions 13.1% $ (22,403) $ (747) Net Rental Revenue $ 148,359 $ 4,945 Assumable Financing Available $1,350,000 Purchase Price $1,350,000 Other Income $ 4,674 $ 156 Terms: Downpayment (35%) Loan $720,000 Amount Available Assumable Loan $472,500 $877,500 Effective Gross Income $ 153,033 $ 5,101 Interest 7-Year Fixed Rate @ 3.75% 5.00% Amortization Non-recourse 30 years Total Operating Expenses $ 50,948 $ 1,698 Annual Debt Payments Monthly Expires on Debt 07/2020 Payments $56,527 $4,711 Net Operating Income $ 102,085 $ 3,403 Loan 1.00% to Value Assumption Fee 65.00% Lender DSCR 1.81 $77.59 6 POLK TERRACE PHOENIX, ARIZONA
v PROPERTY OVERVIEW 7 POLK TERRACE PHOENIX, ARIZONA
PROPERTY HIGHLIGHTS GREAT LOCATION Approximately Two Miles East of Downtown Phoenix One Block North of Metro Light Rail Minutes from Phoenix Sky Harbor International Airport CENTRAL PHOENIX SUBMARKET 291,912 Estimated Population within 5 Miles (2012) Van Buren Street Traffic Counts: 20,409 Vehicles Per Day 2012 Average Household Income within 5 Miles: $48,371 CONSTRUCTION, PROPERTY FEATURES Built in 1985 C-1 Zoning Wood Frame Construction Pitched Roofs EASY FREEWAY ACCESS Near Interstate 10 and Loop 202 1, 2 & 3 NUMBER OF STORIES 9 NUMBER OF BUILDINGS 8 POLK TERRACE PHOENIX, ARIZONA
THE OFFERING THE PROPERTY PARCEL NUMBERS OFFERING PRICE PRICE PER UNIT PRICE PER SF TOTAL UNITS YEAR BUILT UNIT MIX LOT SIZE CONSTRUCTION PARKING NUMBER OF STORIES NUMBER OF BUILDINGS POLK TERRACE APARTMENTS 338 North 23rd Street, Phoenix, AZ 85006 MAJOR CROSS STREETS: Van Buren and 24th Street 116-01-003, 116-01-004, 116-01-005 $1,350,000 $45,000 $77.59 30 Units 1985 18 One Bedroom / One Bath 12 Two Bedroom / One Bath 1.01 Acres Wood Frame & Stucco Exterior 40 Free Surface Spaces 2 2 9 POLK TERRACE PHOENIX, ARIZONA
PARCEL MAP PARCEL NUMBERS 116-01-003 116-01-004 116-01-005 TOTAL LAND SIZE 1.01 Acres TOTAL 2013 TAXES $7,728 10 POLK TERRACE PHOENIX, ARIZONA
PROPERTY PHOTOS 11 POLK TERRACE PHOENIX, ARIZONA
PROPERTY PHOTOS 12 POLK TERRACE PHOENIX, ARIZONA
LOCATION MAP SUBJECT 13 POLK TERRACE PHOENIX, ARIZONA
AERIAL MARICOPA MEDICAL CENTER 24TH STREET ROOSEVELT STREET 23RD STREET (30,603 VPD) POLK TERRACE APARTMENTS POLK STREET 20TH STREET VAN BUREN STREET (19,837 VPD) 22ND STREET WASHINGTON STREET JEFFERSON STREET 14 POLK TERRACE PHOENIX, ARIZONA
v MARKET COMPARABLES 15 POLK TERRACE PHOENIX, ARIZONA
v RENT COMPARABLES SUMMARY 1 BEDROOM RENT SURVEY WITHIN 4.5 MILE RADIUS Year Built Number of Units Square Footage Monthly Rent Rent PSF COMP #1 Garden Apartments 1964 26 562 $460 $0.82 2608-2618 E. Roosevelt Street Phoenix, AZ 85008 COMP #2 Avanti Apartments 1969 28 550 $462 $0.84 2939 N. 36th Street Phoenix, AZ 85018 COMP #3 12th Street Villas 1960 16 620 $434 $0.70 4224 N. 12th Street Phoenix, AZ 85014 COMP #4 Paseo Del Verde 1983 22 585 $604 $1.03 4231 N. 13th Place Phoenix, AZ 85014 COMP #5 Desert Villas 1945 8 575 $499 $0.87 4236 N. 12th Street Phoenix, AZ 85014 TOTALS/AVERAGES 1964 20 578 $492 $0.85 Subject 1985 18 500 $499 $1.00 16 POLK TERRACE PHOENIX, ARIZONA
v RENT COMPARABLES SUMMARY 2 BEDROOM RENT SURVEY Year WITHIN 4.5 MILE RADIUS Built Number of Units Square Footage Monthly Rent Rent PSF COMP #1 Garden Apartments 1964 6 800 $580 $0.73 2608-2618 E. Roosevelt Street Phoenix, AZ 85008 COMP #2 Avanti Apartments 1969 2 700 $647 $0.92 2939 N. 36th Street Phoenix, AZ 85018 COMP #3 12th Street Villas 1960 4 715 $616 $0.86 4224 N. 12th Street Phoenix, AZ 85014 COMP #4 Paseo Del Verde 1983 2 938 $643 $0.69 4231 N. 13th Place Phoenix, AZ 85014 TOTALS/AVERAGES 1969 4 788 $622 $0.80 Subject 1985 12 700 $599 $0.86 17 POLK TERRACE PHOENIX, ARIZONA
RENT COMPARABLES MAP N Paseo Del Verde 4 12th Street Villas 3 5 Desert Villas Avanti Apartments 2 POLK TERRACE APARTMENTS 1 G a rd e n Apartments 18 POLK TERRACE PHOENIX, ARIZONA
v SALES COMPARABLES SUMMARY Close of Escrow Year Built Number of Units Square Footage Purchase Price Price per Unit Price per SF Average Unit Size Notes/ Comments COMP #1 The Olive Tree 05/15/13 1972 14 11,256 SF $634,000 $45,286 $56.33 800 SF 3125 N. 37th Street Phoenix, AZ 85018 Buyer Location: CA COMP #2 Montego/Wyndham 09/11/13 1971 29 21,450 SF $1,177,500 $40,603 $54.90 734 SF 3011-3029 N. 38th Street Phoenix, AZ 85018 Buyer Location: CA COMP #3 COMP #4 COMP #5 Hyde Park 02/22/13 1971 28 24,640 SF $1,350,000 $48,214 $54.79 780 SF 3822 N. 28th Street Phoenix, AZ 85016 Southwest Gardens 05/17/13 1975 14 10,800 SF $750,000 $53,571 $69.44 771 SF 2525 N. 52nd Street Phoenix, AZ 85008 Bethany West 05/16/13 1970 30 23,220 SF $1,080,000 $36,000 $46.51 814 SF 3625 W. Bethany Home Road Phoenix, AZ 85019 TOTALS/AVERAGES 1972 23 18,273 SF $998,300 $44,735 $56.39 780 SF Buyer Location: AZ Buyer Location: CA Buyer Location: AZ Subject 1985 30 17,400 SF $1,350,000 $45,000 $77.59 580 SF 19 POLK TERRACE PHOENIX, ARIZONA
SALES COMPARABLES MAP N 5 Bethany West 3 Hyde Park Montego/ Wyndham 2 1 The Olive Tree Southwest Gardens 4 POLK TERRACE APARTMENTS 20 POLK TERRACE PHOENIX, ARIZONA
AREA OVERVIEW PHOENIX Phoenix is the capital and largest city of Arizona. It is home to 1,445,632 people according to the official 2010 U.S. Census and is the anchor of the Phoenix metropolitan area, the 14th largest metro area by population in the United States with more than 4.1 million people. In addition, Phoenix is the county seat of Maricopa County, and is one of the largest cities in the United States by land area. It is the largest capital city in the United States and the only state capital with over 1,000,000 people. Inc. Magazine ranked Phoenix as the best city to start and grow a company and the city ranks as the fastest growing city among cities in the United States with populations greater than one million. In Q1 of 2011 the Brookings Institution ranked Phoenix as the metro with the 7th fastest job growth rate among the 100 metro areas analyzed. 21 POLK TERRACE PHOENIX, ARIZONA
AREA INFORMATION DOWNTOWN PHOENIX Downtown Phoenix is the urban heart of the fifth largest city in the country and serves as Arizona s center of government, commerce and culture. The area is brimming with sports and cultural attractions, distinctive restaurants, fascinating museums and diverse residential options. Downtown Phoenix is also home to a plethora of educational opportunities, thanks to the ASU Downtown Campus and U of A College of Medicine-Phoenix. Within the 90-square-block area of the Downtown Phoenix Business Improvement District (formerly known as Copper Square), the areas boasts the highest concentration of employment in the state and more than $4 billion in new investment is making the area an increasingly desirable place to live, work and play. MIDTOWN PHOENIX Roughly bounded by Camelback Road to its north, and McDowell Road to its south, this is one of Phoenix s most vital and heavily trafficked stretches of roadway. It is also one of the region s largest centers of employment, with nearly 60,000 people being employed within just a three-mile (5 km) radius of this swath off Central Avenue. Major employers here include major banks and financial institutions, hi-tech companies, and several major law firms and government agencies. CAMELBACK CORRIDOR The Camelback Corridor is host to some of Phoenix s finest hotels/resorts, entertainment venues, retail centers, restaurants, office and condos. The corridor has attracted major tenants from finance, real estate, and technology. Some tenants include Morgan Stanley Smith Barney, Merrill Lynch, Charles Schwab, UBS, Cisco System and Cole Capital. Other major tenants include the Ritz Carlton, Arizona Biltmore, Biltmore Fashion Park, and Camelback Colonnade Retail Center. 22 POLK TERRACE PHOENIX, ARIZONA
AREA INFORMATION SKY HARBOR INTERNATIONAL AIRPORT Phoenix Sky Harbor International Airport is one of the ten busiest in the nation for passenger traffic with a $90 million daily economic impact. With three long parallel runways and an estimated 38.5 million passengers a year, PHX is served by a host of airlines offering direct and connecting flights to all points of the globe. On a typical day more than 1,200 aircraft arrive and depart, 100,000 passengers arrive and depart and 600 tons of air cargo is handled. CHASE FIELD US AIRWAYS CENTER Chase Field opened in the Spring of 1998, built as a multipurpose facility to house Arizona s first Major League Baseball team, the Arizona Diamondbacks, and to host large-scale events. The Ballpark covers approximately 1,300,000 square feet, including the playing surface, and is divided into six levels: Field, Main Concourse, Press Level, Suite Club Level, Upper Concourse and Mechanical Level. Chase Field can be configured to accommodate various sports including football, soccer and basketball, in addition to its baseball configuration. Other setups that have enjoyed success in the building are concerts, motor sports, trade shows, exhibits, band pageants, religious gatherings and running/walking events. US Airways Center (formerly America West Arena) is a sports and entertainment arena located in downtown Phoenix, Arizona. It opened in 1992, and is the home of the Phoenix Suns of the National Basketball Association and the Phoenix Mercury of the Women s National Basketball Association. The arena finished renovations in 2003, which added an air-conditioned glassed pavilion to keep people cool while waiting in line for tickets or before events. These renovations were part of the Phoenix Suns plan to keep the arena viable when Jobing.com Arena would open and take event dates from America West Arena. 23 POLK TERRACE PHOENIX, ARIZONA
AREA MAP N Midtown Phoenix Camelback Corridor Downtown Phoenix Polk Terrace Apartments US Airways Center Sky Harbor Int l Airport Chase Field 24 POLK TERRACE PHOENIX, ARIZONA
v DEMOGRAPHICS Radius 1 Mile 3 Mile 5 Mile Population: 2017 Projection 14,619 120,307 306,414 2012 Estimate 14,101 114,291 291,912 2010 Census 13,791 111,191 284,505 Growth 2012-2017 3.70% 5.30% 5.00% Growth 2010-2012 2.20% 2.80% 2.60% 2012 Population By Hispanic Origin 10,718 68,616 147,536 2012 Population by Race: White 6,665 63,386 166,915 Black or African American 1,275 8,911 26,835 American Indian and Alaska Native 464 4,450 10,860 Asian 106 1,718 5,817 Native Hawaiian and Pacific Islander 7 217 595 Other Race 5,067 30,951 69,212 Two or More Races 515 4,658 11,679 Households: 2017 Projection 4,312 43,220 118,694 2012 Estimate 4,086 40,779 112,539 2010 Census 3,937 39,458 109,272 Growth 2012-2017 5.50% 6.00% 5.50% Growth 2010-2012 3.80% 3.30% 3.00% Owner Occupied 868 13,358 43,777 Renter Occupied 3,219 27,421 68,762 2012 Avg Household Income $29,675 $41,331 $48,371 2012 Med Household Income $17,585 $27,862 $32,372 2012 Per Capita Income $11,547 $16,480 $19,584 2012 Households by Household Inc: Income Less than $15,000 1,794 11,412 26,173 Income $15,000 - $24,999 708 6,869 17,739 Income $25,000 - $34,999 526 5,923 15,629 Income $35,000 - $49,999 438 6,063 17,174 Income $50,000 - $74,999 329 5,096 15,568 Income $75,000 - $99,999 95 2,133 7,150 Income $100,000 - $149,999 131 1,848 7,347 Income $150,000 - $199,999 23 794 3,019 Income $200,000+ 42 642 2,735 25 POLK TERRACE PHOENIX, ARIZONA
DISCLAIMER All materials and information received or derived from ORION Investment Real Estate (hereinafter collectively ORION ), its directors, officers, agents, advisors, affiliates and/or any third party sources are provided without representation or warranty by ORION its directors, officers, agents, advisors, or affiliates as to completeness, veracity, or accuracy, condition of the property, compliance or lack of compliance with applicable governmental requirements, developability or suitability, financial performance of the property, projected financial performance of the property for any party s intended use or any and all other matters. Neither ORION its directors, officers, agents, advisors, or affiliates makes any representation or warranty, express or implied, as to accuracy or completeness of the any materials or information provided, derived, or received. Materials and information from any source, whether written or verbal, that may be furnished for review are not a substitute for a party s active conduct of its own due diligence to determine these and other matters of significance to such party. ORION will not investigate or verify any such matters or conduct due diligence for a party unless otherwise agreed in writing. EACH PARTY SHALL CONDUCT ITS OWN INDEPENDENT INVESTIGATION AND DUE DILIGENCE. Any party contemplating or under contract or in escrow for a transaction is urged to verify all information and to conduct their own inspections and investigations including through appropriate third party independent professionals selected by such party. All financial data should be verified by the party including by obtaining and reading applicable documents and reports and consulting appropriate independent professionals. ORION makes no warranties and/or representations regarding the veracity, completeness, or relevance of any financial data or assumptions. ORION does not serve as a financial advisor to any party regarding any proposed transaction. All data and assumptions regarding financial performance, including that used for financial modeling purposes, may differ from actual data or performance. Any estimates of market rents and/or projected rents that may be provided to a party do not necessarily mean that rents can be established at or increased to that level. Parties must evaluate any applicable contractual and governmental limitations as well as market conditions, vacancy factors and other issues in order to determine rents from or for the property. Legal questions should be discussed by the party with an attorney. Tax questions should be discussed by the party with a certified public accountant or tax attorney. Title questions should be discussed by the party with a title officer or attorney. Questions regarding the condition of the property and whether the property complies with applicable governmental requirements should be discussed by the party with appropriate engineers, architects, contractors, other consultants and governmental agencies. All properties and services are marketed by ORION in compliance with all applicable fair housing and equal opportunity laws. 26 POLK TERRACE PHOENIX, ARIZONA
v POLK TERRACE APARTMENTS FOR ADDITIONAL INFORMATION, PLEASE CONTACT: LINDA AYAL A linda.ayala@orionprop.com 480.612.0278 direct 480.292.5294 cell ORION Investment Real Estate 7135 East Camelback Road Suite 202 Scottsdale, Arizona 85251