valley terrace - Transwestern.com

V
OFFERING BROCHURE
ALLEY
T
ERRACE
1001 N. VALLEY MILLS DRIVE, WACO, TEXAS
a 108-unit, multi-housing investment opportunity with great upside through property rehabilitation and reposition.
INTRODUCTION
Transwestern is pleased to present for purchase the VALLEY
TERRACE APARTMENTS, a 108-unit multifamily asset located
at 1001 N. Valley Mills Drive in Waco, Texas. Valley Terrace offers
investors an opportunity to purchase an asset prime for rehabilitation
at a significantly low market entry level price. With the asset’s core
Waco location and the implementation of a capital improvement
program, this attractively priced property offers measurable potential
to not only stabilize, but substantially improve operations and
recapture market share.
THE PROPERTY
The Valley Terrace Apartments were developed in 1965. The property
contains a mix of one-, two- and three-bedroom floor plans with
an average unit size of 778± square feet. The units are situated
throughout 13 two-story buildings spread over a 5-acre site. The
complex contains a clubhouse, an onsite laundry facility and spacious
courtyards. The units at Valley Terrace provide its residents with
full kitchens, ceiling fans, window coverings and private patios &
balconies (in select units). The property was developed as an all
bills paid project and is still operated under that utility structure.
Electricity, water, gas and trash are all paid by the property. Residents
are responsible for their own phone, cable and internet. Air condition
and heat are provided through a two-pipe chiller system with hot
water supplied through central boilers.
IN-FILL LOCATION
Ask anyone for directions in Waco and the answer ultimately
involves Valley Mills Drive. This in-town Waco thoroughfare
is perhaps the most heavily traveled throughout the day. With
frontage along Valley Mills Drive, Valley Terrace sits at the gateway
to numerous demand generators in Waco. Nearby shopping
includes such main stay retailers as HEB, Target, Hobby Lobby,
Barnes & Noble, Home Depot, Walmart SuperCenter, Academy
and several regional shopping centers such as Richland Mall and
WestView. Valley Terrace is also a short distance from several
recreational spots including Crestview Park, the Waco Civic
Theatre, the Heart O’ Texas Coliseum & Fairgrounds and Lions
Park. Numerous employers are in close proximity to Valley Terrace
including the Providence Health Center. Last, but definitely, not
least, dining and entertainment options are plentiful for residents
of Valley Terrace with such national options as On The Border,
Starbucks, Chilli’s, Pei Wei, Outback Steakhouse and Cheddar’s.
Local favorites including Uncle Dan’s Barbeque, Poppa Rollo’s
Pizza, Cafe Cappuccino and La Fiesta are all also very close by.
INVESTMENT STRATEGY
Moving forward, Valley Terrace offers several investment strategies with underlying rationales. The two
most prominent are highlighted below:
STATUS QUO AT ALL BILLS PAID … Cure deferred maintenance and continue to operate Valley
Terrace on an all bills paid basis. Our market study of nearby All Bills Paid projects support the higher
Market Rates established for Valley Terrace. With the property stabilized, the Market Rates of $607 per
unit and $0.78 per square foot are definitely obtainable and sustainable in the Waco multifamily market.
Reaching a stabilized operating level for both income and expenses, the property, with its distinctive
floor plans and in-fill location, will regain market share in the all bills paid rental sector and see future
value appreciation in the stable Waco multifamily market.
REHABILITATION & REPOSITION … Valley Terrace offers investors a true value-add opportunity
to take a well located, vintage asset and completely reposition it to compete at a higher rent level. The
Waco multifamily market has not seen a complete reposition of this kind whereby an older asset is
rehabbed and repositioned from an all bills paid basis to compete with newer assets at the Class B+,
A- level. Currently, Class B assets in the area have rents averaging between the $0.80 to $0.85 psf mark
with residents responsible for all utilities. Class A assets in the market have rents averaging above the
$0.90 psf level. The immediate neighborhood of Valley Terrace is a well established section of town, yet
lacks any inventory of Class A assets. Valley Terrace, with its core attributes offers such an opportunity
for reposition.
STRONG MULTIFAMILY RENTAL MARKET
As of the 3Q 2009, the Waco multifamily market reported a market wide occupancy rate of 95.6%
with an average rental rate of $0.72 psf. Projects developed during the 2000’s reported a 96.3%
occupancy level, 1990’s projects were 97.8% occupied, 1980’s projects were 97.1% occupied, 1970’s
projects were 84.7% occupied and all projects developed prior to 1970 were 92.5% occupied.
Despite the economic slowdown experienced in numerous other markets, Waco’s multifamily
market has remained stable during this time frame.
PROPERTY OVERVIEW
Units
s
108
Net Rentable SF
s
84,004 ±
Average Unit Size
s
778 ±
Gross Building SF
s
82,924 ± (per McLennan CAD)
Developed
s
1965
Buildings & Stories
s
Parking
s
Gross Land Area
(Acres)
s
5.0021 ± :: as per
McLennan CAD
Gross Land Area
(Square Feet)
s
217,890 ± :: as per
McLennan CAD
Zoning
s
R-3E (High Density
Residential)
13 Buildings :: 2 Story
Density
s
21.59 ± Units / Acre
147 Open Surface Parking
Spaces
Street Frontage
s
N. Valley Mills Drive &
Lake Air Drive
Ingress & Egress
s
N. Valley Mills Drive &
Lake Air Drive
UTILITY OVERVIEW
Electricity
s
SITE OVERVIEW
Master Metered
Paid by Property
CONSTRUCTION OVERVIEW
Foundations
s
Pier & Beam
Water / Wastewater
s
Master Metered
Paid by Property
Building Exterior
s
Brick Veneer &
Wood Siding
Gas
s
Master Metered
Paid by Property
Roof
s
Flat
Interior Parking &
Drives
s
Poured Asphalt
Curbs & Sidewalks
s
Poured Concrete
Trash
s
Master Metered
Paid by Property
Telephone
s
Individually Metered
Paid by Resident
Cable
s
Individually Metered
Paid by Resident
PROJECT AMENITIES
High-Speed
Internet
s
Individually Metered
Paid by Resident
s¬Ceiling Fans
HVAC
s
Two-Pipe Chiller System
s¬Private Patios / Balconies (in select units)
Hot Water
s
Boiler System
s¬Onsite Management Office
Cooking
s
Gas
s¬Laundry Facility
s¬Full Kitchen Appliance Packages
s Spacious Courtyards
s Ample Resident Parking
UNIT MIX & RENTAL RATES
INVESTMENT SUMMARY
Unit
Type
No.
Units
Unit
SF
Total
SF
Market
Rents
Rent /
SF
Monthly
Rent
Current
Rents
Rent /
SF
Monthly
Rent
1x1
36
614 ±
22,104 ±
$510
$0.83
$18,360
$490
$0.80
$17,640
Price / Unit
2x1
30
760 ±
22,800 ±
$610
$0.80
$18,300
$590
$0.78
$17,700
Price / SF
2x2
24
820 ±
19,680 ±
$660
$0.80
$15,840
$625
$0.76
$15,000
2 x 1.5
10
950 ±
9,500 ±
$685
$0.72
$6,850
$650
$0.68
$6,500
Occupancy Rate
(Dec-09)
3 x 2.5
8
1,240 ±
9,920 ±
$775
$0.63
$6,200
$695
$0.56
$5,560
Terms
Totals
108
778 ±
84,004 ±
$607
$0.78
$65,550
$578
$0.74
$62,400
Offering Price
NOTES: [1] Individual unit square footage is an approximation. Neither Owner nor Broker warrant actual square footage size listed
above and strongly encourage any potential investor to conduct their own measurement during property tour and/or feasibility
studies. McLennan County Appraisal District lists gross building square footage as 82,924.
$1,500,000
$13,889
$17.86
60%
All Cash Sale No Existing Debt
To Assume
Downtown Waco
Valley Terrace
Baylor
University
Richland Mall
Central Texas
Marketplace
#/.4!#43
CHRIS STUTZMAN
Managing Director
¬\¬DIRECT
CHRISSTUTZMAN TRANSWESTERNNET
JEFF ROGERS
Managing Director
¬\¬DIRECT
JEFFROGERS TRANSWESTERNNET
LAURA KEINER
Marketing Associate
¬\¬DIRECT
LAURAKEINER TRANSWESTERNNET
All interested parties are encouraged to review the full Supplemental Offering Package
which is available upon request. To receive the Supplemental Offering Package,
complete the attached Registration Agreement and return to Transwestern.
TRANSWESTERN
Central Texas
Multifamily Group
¬3OUTH¬-O0AC¬%XPRESSWAY
"UILDING¬¬3UITE¬
!USTIN¬48¬
¬\¬TELEPHONE
¬\¬FACSIMILE
TRANSWESTERNNET
© TRANSWESTERN U DECEMBER 2009
TRANSWESTERN PROPERTY COMPANY SW GP, L.L.C., D/B/A TRANSWESTERN COMMERCIAL SERVICES, A DELAWARE LIMITED LIABILITY COMPANY REPRESENTS THE SELLER ON ANY TRANSACTION TO
PURCHASE THE VALLEY TERRACE APARTMENTS.
The information contained herein was obtained from sources believed to be reliable; however, Transwestern (“Broker”) makes no guarantees, warranties or representations as to the accuracy thereof. The presentation
of this property is submitted subject to errors, omissions, change in price, prior sales or lease, or withdrawal without prior notice. Broker further has not made and shall not make any warranty or representation as to
the condition of this property nor the presence of any hazardous substances or any environmental or other conditions that may affect the value or suitability of this property including any proforma income or expenses
to be derived from this property. Interested parties are encouraged to retain legal and technical consultants to advise them of any and all aspects of this property.
REGISTRATION AGREEMENT
VALLEY TERRACE APARTMENTS
1001 N. Valley Mills Drive
Waco, Texas
Return this form via facsimile to Transwestern at (512) 328-9309
If Accepting Party executes this Agreement, then TRANSWESTERN (“TW”), on behalf of ONE THOUSAND ONE VALLEY MILLS LTD (“Owner”), shall
deliver to Accepting Party certain information concerning the Property and/or its operations and financial/physical condition, which information is
confidential and/or proprietary in nature (collectively, “Evaluation Material”) in connection with a proposed sale and purchase (the “Proposed
Transaction”) 1001 N. VALLEY MILLS DRIVE, WACO, TEXAS (the “Property”).
By entering into this Registration Agreement (“Agreement”) and accepting the Evaluation Material, and in consideration of its being given access to
same, Accepting Party agrees as follows:
1.
Accepting Party shall keep all Evaluation Material strictly confidential. Except for the sole purpose of Accepting Party’s evaluation of the
Proposed Transaction by Accepting Party (or Accepting Party’s client in the event that Accepting Party is a broker), Accepting Party shall not use,
duplicate or disclose any of the Evaluation Material. The use or transmission of Evaluation Material for any other purpose is hereby strictly
prohibited. However, Accepting Party may deliver Evaluation Material to persons or entities who, because of their involvement with, or interest in,
the Proposed Transaction, need to know such information for the purpose of giving advice to Accepting Party with respect to, or consummating, the
Proposed Transaction (all of whom are collectively referred to as “Related Parties”).
2.
Accepting Party shall not divulge any such confidential information or release such Evaluation Material to a Related Party, except: (i) after
such person has been identified in writing; (ii) after [Owner or] TW has approved in writing the furnishing of such Evaluation Material to such person;
and (iii) after such person has entered into, and delivered to TW, a Confidentiality Agreement which contains provisions substantially the same as the
provisions of this Agreement. The term “person” as used throughout this Agreement shall be construed broadly to include, without limitation, any
corporation, company, partnership, business entity, or individual.
3.
Accepting Party shall not: (i) disclose the fact that discussions or negotiations are taking place concerning the Proposed Transaction, or any
of the terms thereof; or (ii) conduct any discussions or negotiations, or make any inquiries, concerning the proposed Transaction with any person or
entity other than [Owner and] TW, except as may be permitted by the preceding paragraphs or as may be required by law.
4.
Accepting Party acknowledges and agrees that Owner and TW make no representations or warranties as to the accuracy or completeness
of the Evaluation Material or that actual results will conform to any projections; Owner and TW expressly disclaim any and all liability for
representations or warranties, express or implied, contained in the Evaluation Material, or in any other written or oral communication transmitted or
made available to Accepting Party by Owner and/or TW.
5.
The parties hereto agree that Owner is an intended third party beneficiary of this Agreement with full standing to enforce its provisions
and to maintain any legal action necessary for same. Owner is under no legal obligation of any kind whatsoever with respect to the Proposed Sale by
virtue of this Agreement, except for the matters specifically agreed to herein. This Agreement shall be governed by and construed in accordance
with the laws of the jurisdiction in which the Property is situated.
6.
Accepting Party acknowledges that TW is Owner’s Exclusive Agent and is the sole broker in this transaction. Should Accepting Party want
broker representation, Accepting Party shall be responsible for compensation to any broker other than TW.
THIS AGREEMENT is made as of _____ day of __________________, 2009 and shall remain in full force and effect for a period of one year from this
date. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first entered above.
Signature
Company
Name (printed)
Address
Title
Address (continued)
Email
Telephone
Facsimile