Strand Lofts - Houston Income Properties

Transcription

HOUSTON INCOME PROPERTIES, INC.
713‐783‐6262 ‐ Houston
512‐610‐8000 ‐ Austin
Strand Lofts
TABLE OF CONTENTS
 EXECUTIVE SUMMARY 3  Offering Summary  Location Map  Property Photos  PROPERTY INFORMATION 
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7 Property Detail Sheets (2 pages) Investment Highlights Property Photos (2 pages) Aerials Flood Map Galveston County Plat  FINANCIAL INFORMATION 16  Actual and Pro forma Analysis  Internal Rate of Return Analysis  5 Year Estimated Cash Flow Summary  MARKET OVERVIEW 20  Loft Rental Comparables (2 pages)  SALE INFORMATION  Brokerage Information Services 23 Strand Lofts
EXECUTIVE SUMMARY  EXCUTIVE SUMMARY  Offering Summary  Location Map  Property Photos www.houstonincomeproperties.com
Multi‐Family Brokerage
License No. 0393404
Listing Agent: Jim Young - (512) 610-8010
HOUSTON INCOME PROPERTIES, INC. - Broker License# 0393404
Email: [email protected]
Strand Lofts
PROPERTY DESCRIPTION
Name: Strand Lofts
Address: 2402 Mechanic St.
City / State: Galveston, TX 77550
Property Type: Lofts
Style: Mid-Rise Loft Conversion
Yr. of Construction: 1890
Yr. of Loft Conversion: 1996
Number or Units: 37
Total Rentable SF: 42,864 SF
Avg. Unit Size: 1,158 SF
Offering Summary
INVESTMENT PROFILE
Type of Sale: Conventional
Asking Price: $3,800,000
Current NOI: $268,358
Projected Year 1 NOI: $325,945
Projected Year 5 NOI: $368,246
Current Occupancy: 95%
RUBS: None
For Projected NOI see
analysis page __ and
__ in the financial
section
As of August 2012
Market Area: Galveston
Gross Potential Rent: $47,160 / Month as of July 2012
Avg. Rent / Unit: $1,275
Avg Rent / SF: $1.10 SF Unit
Strand Lofts is a unique Loft conversion by the Randal
Davis Company. While keeping the elegance and charm
of its period architecture Davis has transformed the
historic 1890's built, Clarke and Courts Printing Co.
building into elegant contemporary lofts and what a
better location could there be than the beautiful historic
"Strand" District of Galveston, Texas. The rental lofts
boost many amenities including: Private parking garage,
Water views, Wood floors, Ceiling heights of 14', Glass
block and brick walls, Kitchen with granite tops, Free
laundry and fitness center, Whirlpool tubs and Huge
bathrooms. Galveston is approximately 30 miles from the
city limits of Houston, Texas the 4th largest city in the U.S..
It is home to 32 miles of beaches, top restaurants, hotels
& resorts, and attractions like Moody Gardens and the
National Historic Strand District. This property has a
superior location on Mechanic St., in the historic "Strand"
District. This diverse community is full of rich history and
flavors as well as a vital part of the economic health of its
Area.
Executive Summary l STRAND LOFTS l HIP l Page 4 of 25
www.houstonincomeproperties.com
License No. 0393404
Real Estate Broker: Jim Hurd - (713) 783-6262
Strand Lofts
Location Map
Strand Lofts
2402 Mechanic St.
Galveston, TX 77550
License No. 0393404
Strand Lofts
2402 Mechanic, Galveston, TX 77550
Strand Lofts
PROPERTY INFORMATION  PROPERTY INFORMATION 
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Property Detail Sheets (2 pages) Investment Highlights Property Photos (2pages) Aerials Flood Map Galveston County Plat www.houstonincomeproperties.com
License No. 0393404
Strand Lofts
2402 Mechanic St.
Galveston, TX 77550
Key Map:
775J
1890 Construction ~ Randal Davis Loft Conversion
PRICING INFORMATION
Asking Price:
Price / Unit:
Price / SF:
Seller's Equity
$3,800,000
$102,703
$88.65
$3,800,000
Possible Upside in the Rents and Other Revenues
Mth.
Coll.
PROPERTY INFORMATION
37
Units:
1158
Avg Size:
Date of Construction:
1890
Indiv./Master
"E" Mtr/"W" Mtr:
Flat
Roof:
Land (Acres) Per HCAD:
Rentable Sq Ft:
0.47
42,864 The Strand Lofts is a unique opportunity to purchase the 1890's historic
TOTAL COLLECTIONS ( 95% Occupancy as of 8‐15‐2012 RR)
Jan‐Jun 2012 Avg Apr‐Jun 12 Avg Jan‐Mar 12 Avg 2011 Year Avg
$42,173
$40,973
$43,372
$41,381
Good Location in historic downtown Galveston in the Strand District. Seems to be good
upside in the rents. There also seems to be some revenue that could be obtained by
charging for utilities and other miscellaneous items.
Property Highlights
1) Strand Lofts is located approx. 30 miles south of the Houston, Tx.
metroplex in Galveston, Tx. The property is surrounded by historic
residences in the East End Historic District (covers 50 square blocks)
and the Historic Strand District (the go to place for visitors to the
area).
2) The outstanding location of this asset on Mechanic Row/Avenue
"C" near IH‐45, places it within easy access of an abundance of
employment,
entertainment,
shopping,
and
convenient
transportation opportunities in the area.
3) The owner has recently completed renovating the building into
residential Lofts while preserving the historic architecture of its
period. The property is renting at its current market rents on all
units.
4) There seems to be upside in the rents as well as an additonal
amount of income that could be generated by charging for laundry
and a possible RUBS implementation for some or all utilities.
Strand Lofts
2402 Mechanic
Galveston, TX 77550
Directions from Houston Hobby Airport: Take I-45 S. Travel 33.8 miles and take EXIT 1C toward TX275 / Harborside Dr / FM-188 / Teichman Rd. Travel 0.3 miles stay straight to go onto Broadway St.
Travel 0.5 miles and take the 2st left onto Harborside Dr. Travel 4.6 miles and turn right onto 25th
st/Rosenburg St. Travel 0.1 miles and turn left onto Mechanic St. Travel 0.08. Property is on the left.
former Clarke & Courts Printing building in downtown Galveston, Texas.
The building has been transformed into beautiful Lofts by the Randal
Davis Company. Randall Davis known as a "Pioneer" and "Visionary" for
enhancing the Texas skyline and coastline with creative, adaptive reuse of
historic buildings, as well as with his construction of new Neoclassical hi‐
rise structures. This unique Grade "A" Apartment‐Loft property sits in the
historic Strand/Downtown District of Galveston, Texas just 50 miles south
of the Houston metroplex. The property shares the corner of Mechanic
and 24th street with the historic Treemont Hotel. One side of the
building faces the Strand (area of shopping and dining) and the cruise ship
dock. The tenants can people watch and enjoy watching the cruise ships
come in and out of dock. The neighborhood is in the epicenter of
everything happening in downtown Galveston. Please do not visit the
property without an appointment made through the broker.
UNIT MIX
#Units
Type
4
1
1
3
4
1
3
1
3
1
3
1
4
3
1
1
1
1
OPEN
OPEN
1 BD
OPEN
1 BD
1BD
1BD
1BD
1 BD
1 BD
1BD
1 BD
2BD
2BD
2BD
1BD
1BD
2 BD
Notes
Avg.
SF/Unit
Total SF
Rent
Total Rent
864
917
990
1,024
1,039
1,050
1,098
1,105
1,112
1,124
1,192
1,158
1,219
1,385
1,532
1,573
1,594
1,900
3,456
917
990
3,072
4,156
1,050
3,294
1,105
3,336
1,124
3,576
1,158
4,876
4,155
1,532
1,573
1,594
1,900
$995
$950
$1,250
$1,100
$1,275
$1,300
$1,300
$1,150
$1,250
$1,200
$1,275
$1,155
$1,300
$1,385
$2,000
$1,695
$1,750
$1,500
$3,980
$950
$1,250
$3,300
$5,100
$1,300
$3,900
$1,150
$3,750
$1,200
$3,825
$1,155
$5,200
$4,155
$2,000
$1,695
$1,750
$1,500
Rent
Per SF
$1.15
$1.04
$1.26
$1.07
$1.23
$1.24
$1.18
$1.04
$1.12
$1.07
$1.07
$1.00
$1.07
$1.00
$1.31
$1.08
$1.10
$0.79
37
95%
1,158
42,864
$1,275
$47,160 $1.100
total units
Est Occ
avg sf
total/sf
avg rent
total rent
avg$/sf
The Strand Lofts boost many amenities including; private parking garage with ample parking space, water views, wood floors, ceiling heights of 14', glass block and brick walls, kitchen with granite tops, whirlpool tubs and extra large bathrooms,free laundry and fitness center. Property Information l STRAND LOFTS l HIP l Page 8 of 25
License No. 0393404
Strand Lofts
2402 Mechanic St.
Galveston, TX 77550
Key Map:
775J
PROPERTY AMENITIES
Upside Potential with interior
Upgrades
Property Amenities ~ 24 Hour Fitness Room(s), 1 Laundry Room(s), Views: , Harbor/city, High‐Speed Internet, Controlled access to Parking Garage, Additional
Storage Available PROPERTY TAX INFOR.
GCAD#
AREA INFORMATION
R104437
Taxing Authority
Galveston County
Galveston College
GC Navigation District No.
GC Road and Flood
Galveston ISD
City of Galveston
2011 Rate / $100 of Value:
2012 Assessment
Estimated Property Tax
Rate/$100
0.61295
0.18945
0.04662
0.00886
1.16500
0.55400
2.5769
$1,643,690
$42,356
CONSTRUCTION FEATURES
Date Built:
Elec Meter:
HVAC:
Water:
Access Gates:
Roof:
1890
Individual
Individual
Master
Y
Flat
Concrete Paved
Paving:
Brick and Wood Siding
Materials:
4
# of Stories:
Parking:
Parking Garage
# Apt. Buildings:
1
Units/Acre:
37.00
Strand Lofts
Strand Lofts is an "A" grade, 37‐unit, 4 story, Loft Conversion located in in the
city of Galveston, Texas. Galveston is a tertiary market of Houston, Texas. The
building was built in the 1890's as the Court and Clarke Printing Company building
and has been designated an historical building of the area. This distinctive
Historic Class "A" property is within walking distance of Galveston Bay and just a
short drive to the beaches on the Gulf of Mexico side of the island. The property
is conveniently positioned on the edge of two Historic districts in Galveston, the
Historic Strand District and the Historic East End Residential District. Besides its
lovely homes, the area offers other advantages for it's residents...a cultural and
ethnic mix that enriches the quality of life, several fine schools to serve the young
residents as well as close proximity to Galveston's business district, University of
Texas Medical Branch, and the Historic Strand District.
"The Strand," or Avenue B, is a street parallel to the bay, in the heart of
downtown Galveston with then‐modern and incredible feats of Victorian
architecture. While the avenue extends throughout Galveston, the Strand has
usually referred to the five‐block business district situated between Twentieth
and Twenty‐fifth streets. The Strand was known then as the "Wall Street of the
Southwest. Today, Galveston has become a top attraction for shoppers, Houston
day‐trippers, and vacationers from around the globe. Galveston has 32 miles of
beaches, top restaurants, hotels & resorts, and attractions like Moody Gardens
and the National Historic Strand District. In addition, the island has deep cultural
and historical roots shown in its museums, opera house, historic homes, old
Victorian architecture, and more.
The "East End" Historical District is comprised of over 50 city blocks bounded on
the south by Broadway, the east by 10th Street, the north by Mechanic Avenue
and the west by 19th Street. The District has been placed on the National Register
of Historic Places in 1976 and has been designated a National Historic Landmark.
The architecture of the East End Historical District reflects a variety of styles and
periods, the earliest being examples of Greek Revival style built during the 1850's.
Early residents represented an economic and social cross‐section of the
community, also expressed in the dwellings which range from small, simple
cottages to large, elaborate houses. East End District ‐
1892 Bishop's Palace
Historical Strand District
Historical Clarke and Courts Building
Property Information l STRAND LOFTS l HIP l Page 9 of 25
License No. 0393404
Strand Lofts
Unique Investment Opportunity
Strand Lofts presents a new owner with a unique investment
opportunity not seen in many investments in today's market. as the
property is a loft conversion built in the historic former 1890 Clarkes
and Courts printing building in the historic Strand area of Galveston
Texas. Galveston is one of the largest tourist attractions in Texas. The
area plays a crucial role in the economic health of the Houston
Metropolitan Area. Besides the major employment area the property is
surrounded by it is also under 2 miles from two major employers of
the area, the University of Texas Medical Branch at Galveston (1.7
miles) and the Shriners Hospital for Children (1.5 miles).
It is the broker's opinion that a new owner could possibly increase
the rents on the 37 units by approximately 10% as well as implement
a utility RUBS for water. Currently there is no additional charge to
the tenants for Laundry room usage, parking garage usage, water or
gas. Some or all of these could be another source of added revenue
for a new owner. The possible addition of a roof top outdoor
common area with decking, an outdoor kitchen and sitting areas to
take in the views of the Harbor area and the Strand District could be
a great addition to this property and adding to its appeal.
Another Investment opportunity could be the sale of the lofts to
individuals. This is evidenced by the Sealy Lofts located at 2214
Mechanic. These lofts were developed in the old 1876 Sealy
warehouse building. The asking prices range from $321,000 for a
$1,015 Sq ft Loft to near $800,00 0 for a 2,013 sq ft Loft.
HISTORY OF CLARKE AND COURTS PRINTING CO. Clarke and Courts Printing, with original headquarters in Galveston, was in
business in Texas for over 100 years. Until the 1930s the company was the
largest printing and lithography company in the region. Clarke and Courts
developed from M. Strickland and Company, Printers, Lithographers and
Blank Book Manufacturers, organized at Galveston by Miles Strickland in
1857. Strickland moved his printing press to Houston during the Civil War
but subsequently returned to Galveston. After the war Samuel Burke, an
expert printer, became a partner in the business, and a bindery was added
to the plant. After Robert Clarke purchased Burke's interest in the firm in
1870, the business came to be known as Strickland and Clarke. George M.
Courts, who had previously handled stationery for the Thompson Drug
Company, purchased Strickland's interest, and in 1877 the two printers
brought the first lithograph press in the state to Galveston, along with a
crew to operate it. Clarke and Courts dates its origins to the partnership
formed by the two men in 1879, in which Clarke managed the printing
aspects of the business while Courts supervised the rest. Traveling
salesmen for Clarke and Courts marketed its products throughout Texas,
western Louisiana, New Mexico, and Mexico. In the 1880s the firm's
employees numbered between seventy‐five and 100. In 1887, when the
company won a blue ribbon at the State Fair of Texas, it incorporated as
Clarke and Courts. By 1890 the firm had completed its office on the Strand
in Galveston, designed by Nicholas J. Clayton, as well as a plant and
warehouse. The office came to be known as the "Texas House." In 1907 the
firm installed the first offset press west of the Mississippi; thus began the
company policy of acquiring every innovation in printing machinery as soon
as it appeared and limiting the competition by refusing to sell old
equipment. Eventually, Clarke and Courts offered customers an array of
services ranging from printing, electrotyping, stereotyping, and book‐
binding to box‐manufacturing, lithographing, and zinc‐engraving. Among its
numerous printing projects was the printing of San Antonio city directories.
In 1936, when the company renewed its charter and moved its
headquarters to Houston, its service extended to customers in Texas,
Louisiana, Oklahoma, New Mexico, Arkansas, Mexico, and Cuba. By 1976
Clarke and Courts operated plants in Galveston, Harlingen, and Houston, but
faced growing computerization in the industry. The business closed in 1989.
License No. 0393404
Strand Lofts
License No. 0393404
Strand Lofts
License No. 0393404
Strand Lofts
Aerials
University of Texas
Medical Branch
Hospital
Historic East End Residential District
Downtown
Moody Mansion
Museum
Kemper
Park
License No. 0393404
Strand Lofts
Flood Map
Strand Lofts
DISCLAIMER:
While the floodplain data that is shown on the map is the same, this map is not an official effective FEMA Flood Insurance Rate Map (FIRM).
This map is for information purposes only. For an official flood zone determination please contact your insurance agent or floodplain administrator.
License No. 0393404
Strand Lofts
Galveston County Appraisal District Map
GCAD Map
Strand Lofts
Strand Lofts
 FINANCIAL INFORMATION  Actual and Pro forma Analysis  Internal Rate of Return Analysis  5 Year Estimated Cash Flow Summary FINANCIAL INFORMATION www.houstonincomeproperties.com
License No. 0393404
Strand Lofts
Good Value Add Potential
2402 Mechanic
Galveston, TX 77550
Physical Information
Number of Units
37
Avg Unit Size (SF)
1158
Net Rentable Area 42,864
Land Area {Acres}
0.47
Units per Acre
37.0
Date Built
1890
e‐Meter
Individual
w‐Meter
Master
Roof Style
Flat
HVAC System
Individual
Estimated New Loan Parameters
Lender
To Be Determined
4.75%
Est. Interest Rate:
$2,660,000
Est. New Loan Amount:
$13,876
Est. Mthly. Pmt. :
$166,510
Yearly Debt Service:
Amortizing (months):
360
10 Years
Term:
$300
Est. Reserve/Unit:
6.26%
Est. Loan Constant:
Financial Information
Asking Price
Est. Per Unit Price
Est. Per SF Price
Est. Upgrades / Unit
Total Est. Upgrades
Asking Price + Upgrades
$3,800,000
$102,703
$88.65
$2,000
$74,000
$3,874,000
EST. BUYER'S EQUITY REQUIREMENTS
Est. Down Pmt. On Ask Price
30%
Est. Down Pmt. With Upgrades 31%
$1,140,000
$1,214,000
Operating Information
Curr Mkt Rent {Aug‐12}
Rents Used on Pro Forma
Collec. Used ‐ Jan‐Jun 2012 Avg
$47,160
$50,461
$42,173
$506,074
95%
$647
Collections Annualized Phy. Occ. {8‐15‐2012}
Est. Ins per Unit per Yr
Property Tax Information
2011 Rate / $100 of Value:
2.57687
2012 Assessment
$1,643,690
$3,040,000
Estimated Post sale Tax Assmt. is
Estimated Post Sale Tax Assmt. Is the 2012 Assmt.
increased by {85%}
REVENUE AND COLLECTIONS
MODIFIED ACTUALS
STABILIZED PRO FORMA
Jan-Jun 2012 Avg Revenue Annualized
Expenses are Actual Jun 2012 T-6 Annualized
except where noted
Income is estimated,
Expenses are pro forma,
except where noted.
Current Market Rent with a {7%} Rent Increase which equates to an avg rent of {$1364}/U or {1.177}/SF
Loss to Lease {1% } of Total Street Rent‐Estimated
Estimated Gross Potential Income Vacancy Estimated at {5.0%}
Credit/Concess/Admin/Other Rental Losses Estimated at {1.0%}
502,184 {89%} of Current Rents Rents
Total Rental Income {Estimated}
3,890 $105 / Unit / Yr
Other Income ( Pro Forma Inc. Trash, Gas and Water Reimb.)
506,074 $42,173 / Mo
Total Income
EXPENSES AND RESERVES
Modified Actuals
Fixed Expenses
Fixed Expenses
Taxes
Insurance
Total Fixed Expense
$42,356
$23,949
Utilities
All Utilities
Total Utilities
$31,087
Other Expenses
General & Admin Advertising/Marketing
Repairs & Maintenance
Labor Costs
Contract Services
All Management Fees
Total Other Expense
$5,598
$11,788
$15,307
$61,557
$9,670
$25,304
Total Operating Expense
Reserve for Replacement Estimated
Total Expense
Net Operating Income
Asking Price / Asking Price + Rehab
Cap Rate Debt
Equity Debt Service (P & I)
Cash Flow Cash on Cash
$1,145 per Unit
$647 per Unit
$50,461 / Mo
1.0%
99.0%
5.0%
1.0%
{93%} of Pro Forma Rents
$610 / Unit / Yr
$48,810 / Mo
Estimated
Fixed Expenses
2012 Assmt and 2011 Rate
Jan‐Jun 12 annualized
66,305 $1,792 / Unit
Utilities
$840 per Unit
605,534
(6,055)
599,479
(30,277)
(6,055)
563,147
22,570
585,717
$78,337
$23,949
$2,117 per Unit
$647 per Unit
Pro Forma Assmt. and 2011 Rate
Estimated
102,286 $2,764 / Unit
Estimated Utilities
Jan-Dec 2011
$32,000
$865 per Unit
31,087 $840 / Unit
Other Expenses
32,000 $865 / Unit
Estimated Other Expenses
$151 per Unit
$319 per Unit
$414 per Unit
$1,664 per Unit
$261 per Unit
5.0% $684 per Unit Based on Total Income above
129,224 $3,493 / Unit
226,617 $6,125 / Unit
$5,550
$5,550
$18,500
$46,250
$9,250
$29,286
$150 per Unit
$150 per Unit
$500 per Unit
$1,250 per Unit
$250 per Unit
5.00% $792 per U
114,386 $3,092 / Unit
248,672 $6,721 / Unit
11,100 $300 / Unit
11,100 $300 / Unit
237,717 $6,425 / Unit
268,358 $7,253 / Unit
3,800,000
7.06%
$2,660,000
1,140,000 30% (no upgrades)
(166,510)
$101,848
8.93%
259,772 $7,021 / Unit
325,945 $8,809 / Unit
3,874,000
8.41%
$2,660,000
1,214,000 31% (with upgrades)
(166,510)
$159,435
13.13%
Notes on Actuals: Retirement benefits to an ex employee in the amount of $2500/mth has been deducted from the Payroll expense line item
above. Legal fees were removed from the operating data for an old legal matter that has been settled. Utilitiies are 2011 Year.
Notes on Pro Forma: Rents have been increased by 7% post upgrades. A RUBS for Trash, Water and Pest Control has been added to the Other
Income on the Pro Forma side. The Tax assessment has been increased by 95% of the 2012 assessment. All other expenses are based on the
actuals or are market expenses.
Financial Information l STRAND LOFTS l HIP l Page 17 of 25
License No. 0393404
Strand Lofts
Internal Rate of Return Analysis
UNITS
SQ FT
Avg Unit Size
Year 1 is post
Upgrades
Original Sales Price (At Asking Price) $
Upgrades @ {$} a Unit $
"All In" Cost
$
Yr 1 includes
a {7%} Rent
Increase
MONTHLY Year 1
INCOME
Annual Market Rent Growth Rates Used
Potential Income
Other Income
$50,461
$1,881
GROSS INCOME
$52,342
VAC./OTHER LOSSES
Rate Used for Vacancy/Other Losses
EFFECTIVE GROSS INCOME
EXPENSES
Annual Operating Expense Growth Rates Used
Operating Expenses
Expenses/Unit
Management Fee is calculated at {5.00% } of the (EGI)
Reserve for Replacement @ {$300} per unit
TOTAL EXPENSES
Total Expenses/Unit
NET OPERATING INCOME
NOI Growth Rate
DEBT SERVICE
ANNUAL CASH FLOW
Year 1
$605,534
$22,570
37
42,864
1158
3,800,000
74,000
3,874,000
Year 2
Year 3
Year 4
Year 5
3.00%
$623,700
$23,247
3.00%
$642,411
$23,945
3.00%
$661,684
$24,663
3.00%
$681,534
$25,403
$628,104
$646,948
$666,356
$686,347
$706,937
($42,387)
7%
$585,717
($43,659)
7%
$603,289
($44,969)
7%
$621,387
($46,318)
7%
$640,029
($47,707)
7%
$659,230
15.74%
($219,386)
$5,929
($29,286)
($11,100)
3.00%
($225,969)
$6,107
($30,164)
($11,100)
3.00%
($232,748)
$6,290
($31,069)
($11,100)
3.00%
($239,730)
$6,479
($32,001)
($11,100)
3.00%
($246,922)
$6,674
($32,961)
($11,100)
($259,772)
$7,021
($267,233)
$7,223
($274,917)
$7,430
($282,831)
$7,644
($290,983)
$7,864
$325,945
$336,056
$346,470
$357,197
$368,246
21.46%
(166,510)
3.10%
(166,510)
3.10%
(166,510)
3.10%
(166,510)
3.09%
(166,510)
$159,435
$169,546
$179,960
$190,687
$201,736
Debt Service Assumptions Used
$3,874,000
"All In" Cost
31%
% Down of "All In" Cost
$2,660,000
Est. New Loan Amt
$1,214,000
CASH EQUITY
4.75%
Est. Interest Rate
$166,510
Annual Debt Service
CASH ON CASH RETURN
13.13%
13.97%
14.82%
15.71%
16.62%
The assumptions taken for this analysis for income and expense projections are shown above. Debt service was calculated using the information shown in the debt service
assumptions used box above.
Future Sales Price
$5,260,660
LEVERAGED
Exit Cap
7.00%
5th Year NOI
$368,246
INVESTMENT AND INTERNAL RATE OF RETURN SUMMARY
Loan Balance 5th Yr
$2,530,788
YEAR 1
YEAR 2
YEAR 3
Cash Equity
Annual Cash Flow (Includes Amortization)
Net Proceeds from Sale (96% of the Sales Proceed
Total Cash Flow
Total Discounted Cash In-flow {Rate Used is 9%}
($1,214,000)
$0
$0
($1,214,000)
$0
$159,435
0
$159,435
$146,271
$0
$169,546
0
$169,546
$142,703
YEAR 4
YEAR 5
$0
$179,960
0
$179,960
$138,962
$0
$190,687
0
$190,687
$135,088
$0
$201,736
$2,519,446
$2,721,183
$1,768,582
$0
$346,470
0
$346,470
$267,539
$0
$357,197
0
$357,197
$253,048
$0
$368,246
$5,050,234
$5,418,480
$3,521,640
5TH YEAR SALE ~ LEVERAGED INTERNAL RATE OF RETURN IS {27.04%}
UNLEVERAGED
Cash Equity
Annual Cash Flow (Without Debt Service)
Net Proceeds from Sale (96% of the Sales Proceed
Total Cash Flow
Total Discounted Cash In-flow {Rate Used is 9%}
($3,874,000)
$0
$0
($3,874,000)
$0
$325,945
0
$325,945
$299,032
$0
$336,056
0
$336,056
$282,851
5TH YEAR SALE ~ UNLEVERAGED INTERNAL RATE OF RETURN IS {13.52%}
Discount Rate Used is {9%}
Total Discounted Cash Flow (LEVERAGED)
Original Investment
Total Discounted Cash Flow (UNLEVERAGED)
Original Investment
$2,331,606
$1,214,000
$4,624,110
$3,874,000
Leveraged
Unleveraged
Yr. 5 Sales Summary
Cash Equity Sales Proceeds 5th Yr Cash Flow
$1,214,000
$2,519,446
$201,736
$3,874,000
$5,050,234
$368,246
IRR
27.04%
13.52%
License No. 0393404
Strand Lofts
5 Year Cash Flow Summary
UNITS
SQ FT
Avg Unit Size
Yr 1 includes
a {7%} Rent
Increase
Year 1
REVENUE AND COLLECTIONS
Annual Market Rent Growth Rate
Gross Potential Income (GPI)
Economic Loss
$605,534
($42,387)
Rate Used for Economic Loss as a percentage of GPI
Year 2
Year 3
Year 4
Year 5
3.0%
$623,700
($43,659)
3.0%
$642,411
($44,969)
3.0%
$661,684
($46,318)
3.0%
$681,534
($47,707)
7%
7%
Net Rental Income
Other Income
Miscellaneous Income
Total Other Income
$563,147
$580,041
$22,570
$22,570
$23,247
$23,247
EFFECTIVE GROSS INCOME (EGI)
$585,717
EGI Annual Growth Rate
37
42,864
1158
$603,289
7%
7%
7%
$597,443
$615,366
$633,827
$23,945
$23,945
$24,663
$24,663
$25,403
$25,403
$621,387
$640,029
$659,230
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
EXPENSES AND RESERVES
Annual Operating Expense Growth Rate
Operating Expenses
Property Taxes
Insurance
Management Fee is calculated at {5.00% } of the (EGI)
Payroll plus Burden
Utilities (Includes the offset of the Water Rebill)
Contract Services
Repairs, Maintenance and Make Ready
Marketing
General and Administrative Costs
Total Operating Expenses
Expenses / Unit
Reserve for Replacement @ {$300} per unit
$78,337
$23,949
$29,286
$46,250
$32,000
$9,250
$18,500
$5,550
$5,550
(248,672)
$6,721
($11,100)
$80,687
$24,668
$30,164
$47,638
$32,960
$9,528
$19,055
$5,717
$5,717
(256,133)
$6,923
($11,100)
$83,108
$25,408
$31,069
$49,067
$33,949
$9,813
$19,627
$5,888
$5,888
(263,817)
$7,130
($11,100)
$85,601
$26,170
$32,001
$50,539
$34,967
$10,108
$20,215
$6,065
$6,065
(271,731)
$7,344
($11,100)
$88,169
$26,955
$32,961
$52,055
$36,016
$10,411
$20,822
$6,247
$6,247
(279,883)
$7,564
($11,100)
TOTAL EXPENSES AND RESERVE
Total Expenses and Reserve / Unit
($259,772)
$7,021
($267,233)
$7,223
($274,917)
$7,430
($282,831)
$7,644
($290,983)
$7,864
$325,945
$336,056
$346,470
$357,197
$368,246
NET OPERATING INCOME
NOI Growth Rate
21.46%
3.10%
3.10%
3.10%
3.09%
Year 1
$4,656,360
Year 2
$4,800,793
Year 3
$4,949,575
Year 4
$5,102,820
Year 5
$5,260,662
$125,848 per Unit
$129,751 per Unit
$133,772 per Unit
$137,914 per Unit
$142,180 per Unit
$109 per SF
$112 per SF
$115 per SF
$119 per SF
$123 per SF
Future Value Estimates
Estimated Future Values based on Yrs. 1-5 NOI's
Exit Cap Rate
7.00%
Strand Lofts
 MARKET OVERVIEW  Loft Rent Comparables (2 pages) MARKET OVERVIEW www.houstonincomeproperties.com
License No. 0393404
Loft Rental Properties
Occupancy and Rent Survey - {Rent Comps}
Project
Address
Tribeca Lofts Dakota Lofts Hogg Palace Lofts Lofts at Ballpark Marquis Lofts Sabine Street Lofts 1210 W. Clay St, Houston, TX
711 William, Houston, TX
401 Louisiana, Houston, TX
610 Saint Emanuel St, Houston, TX
2115 Runnels St, Houston, TX
150 Sabine St, Houston, TX
Rent Comp Ttls / Averages
Strand Lofts Yr. Built
Units
SF/Unit
1936
1911
1921
2002
2003
2002
25
53
79
375
244
198
2335
1197
1771
992
1006
1014
$3,385
$1,712
$2,347
$1,329
$1,352
$1,728
$1.45
$1.43
$1.33
$1.34
$1.34
$1.70
85.00%
94.00%
90.00%
96.00%
93.00%
97.00%
1969
974
37
1386
1158
$1,985
$1,275
$1.43
$1.10
92.50%
95.00%
1890
Rent Comp Averages
Rent/Unit Rent/SF
Occ..
$1,985 SUBJECT
Strand Lofts
Rent Comparison Chart {Rent / Unit}
$1,275 Lofts at Ballpark
$1,329 Marquis Lofts
$1,352 Broadstone Lofts
$1,450 Dakota Lofts
$1,712 Sabine Street Lofts
$1,728 Hogg Palace Lofts
$2,181 $0
$500
$1,000
$1,500
$2,000
$1.43 Rent Comp Averages
Strand Lofts
$1.10 SUBJECT
$1.23 Hogg Palace Lofts
Lofts at Ballpark
$1.34 Marquis Lofts
$1.34 Broadstone Lofts
Rent Comparison Chart {Rent / SF}
$1.46 Dakota Lofts
$1.54 Sabine Street Lofts
$0.50
$2,500
$1.70 $0.70
$0.90
$1.10
$1.30
$1.50
$1.70
$1.90
Market Overview l STRAND LOFTS l HIP l Page 21 of 25
License No. 0393404
Strand Lofts
Loft Comparables
2402 Mechanic St.
Galveston, TX 77550
775J
Key Map:
Tribeca Lofts 1210 W. Clay St, Houston, TX
● Year Built
1936
● # Units
25
● Avg/SF
2,335
● Rent / Unit
● Rent / SF
Dakota Lofts 711 William, Houston, TX
● Year Built
$3,385.11
$1.45
1911
● # Units
53
● Avg/SF
1,197
● Rent / Unit
● Rent / SF
Hogg Palace Lofts 401 Louisiana, Houston, TX
● Year Built
$1,712.00
$1.43
1921
● # Units
79
● Avg/SF
1,771
● Rent / Unit
● Rent / SF
Lofts at Ballpark 610 Saint Emanuel St, Houston, TX
● Year Built
$2,346.58
$1.33
2002
● # Units
375
● Avg/SF
992
● Rent / Unit
● Rent / SF
$1,329.00
$1.34
Apartment Rent Comparables
Marquis Lofts 2115 Runnels St, Houston, TX
● Year Built
2003
Property Name
Year
Built
# Units
Nominal
Avg /SF Market Rent /
Unit
Rent /
SF
Occupancy
● # Units
244
Tribeca Lofts 1936
25
2,335
$3,385
$1.45
85%
● Avg/SF
1,006
Dakota Lofts 1911
53
1,197
$1,712
$1.43
94%
$1,352.00
Hogg Palace Lofts 1921
79
1,771
$2,347
$1.33
90%
$1.34
Lofts at Ballpark 2002
375
992
$1,329
$1.34
96%
Marquis Lofts 2003
244
1,006
$1,352
$1.34
93%
155
1,460
$2,025
$1.38
92%
37
1,158
$1,275
$1.10
95%
● Rent / Unit
● Rent / SF
Strand Lofts (Subject)
● Year Built
1890
● # Units
37
● Avg/SF
1,158
● Rent / Unit
● Rent / SF
$1,274.59
Ttl/Average Comps
Strand Lofts 1890
$1.10
Market Overview l STRAND LOFTS l HIP l Page 22 of 25
Strand Lofts
 SALE INFORMATION  BROKER’S DISCLOSURE SALE INFORMATION www.houstonincomeproperties.com
License No. 0393404
Strand Lofts
Information about Brokerage Services
Disclaimer: The information contained in this offering memorandum has either been given to us by the owner of the property or obtained from
sources that we deem reliable. We have no reason to doubt its accuracy but we do not guarantee it. Vacancy factors used herein are an arbitrary
percentage used only as an example. It does not necessarily relate to actual vacancy, if any. The value of the investment is dependent upon these
estimates and assumptions made herein, as well as the investment income, the tax bracket and other factors which your tax advisor and/or legal
counsel should evaluate. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME, EXPENSE, AND ALL OTHER
INFORMATION CONTAINED HEREIN, and should also perform a detailed inspection of the property. We have not determined whether the
property complies with city ordinances and recommend that you determine whether or not the property complies with deed restrictions and the
City of Houston life safety ordinance, whether or not a certificate has been issued, and whether or not the property contains asbestos, lead paint
and/or mold and whether or not the property lies within a flood plain .
Sale Information l STRAND LOFTS l HIP l Page 24 of 25
Strand Lofts
Presented By: Houston Income Properties, Inc. Brokering Since 1988 Houston Income Properties, Inc. License# ‐ 0393404 


Jim Hurd – President 713‐783‐6262 [email protected] HOUSTON OFFICE 6363 Woodway #370 Houston, Texas 77057 713‐783‐6262 AUSTIN OFFICE 912 S. Capital of Texas Hwy # 230 Austin, Texas 78746 512‐610‐8000 Jim Hurd – Broker – Listing Broker Austin and Houston Locations [email protected] Houston Office Brokers / Agents: 





Bishale Patel – Broker [email protected] Gwyn VonHeeder ‐ Agent [email protected] Shayan Hasnain ‐ Agent [email protected] Zach Khan ‐ Agent [email protected] Abraham Garza III ‐ Agent [email protected] Austin Office Brokers / Agents: 
Jim Young ‐ Agent [email protected]

Strand Lofts - Houston Income Properties

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