apartments - Comre.Com

Investment Offering
Apartments
Phase I
626 - 674 East Sky Park Lane &
695 East Landing Drive
(1500 South)
Vernal, Utah
Exclusively Marketed by:
Mike Carroll
801-303-5556
[email protected]
Diane Taylor
801-303-5564
[email protected]
November 2008
Confidentiality Agreement
Sky Park
Apartments
Sky Park
Apartments
Investment Offering
CONFIDENTIALITY AGREEMENT
Buyer has requested information from Commerce CRG for the purpose of evaluating a possible acquisition
regarding the property located at 626 - 674 Sky Park Lane and 695 East Landing Drive, Vernal, Utah,
property known as Sky Park Apartments, 32 Units (the “Property”). Much of the information to be
provided is non-public, highly confidential and/or proprietary in nature (“Information”) and is being
delivered only pursuant to the terms of this Agreement.
THE PARTIES AGREE AS FOLLOWS:
1.
Property Information. Commerce will provide Prospective Buyer confidential Information
relating to the Property.
2. Confidentiality. Prospective Buyer agrees that the Information shall be held in confidence,
and that Prospective Buyer shall not disclose, permit the disclosure of, release or transfer the
Information to any third party, except for the purpose of evaluating a possible purchase of the
Property, and that any part of the Information so transmitted shall remain confidential with that
third party. Prospective Buyer agrees not to contact the owner of the Property or to circumvent
Commerce in any way. Any transaction shall be negotiated and closed through Commerce as a
licensed real estate brokerage in the State of Utah.
3.
Communications. It is further understood that all (a) communications regarding a possible
transaction, (b) requests for additional information, (c) requests for tours of the Property or
management meetings, and (d) discussion or questions regarding the Property will submitted
or directed to Commerce c/o Mike Carroll at Commerce CRG, 175 East 400 South, Suite 700,
Salt Lake City, UT 84111, (801-303-5555). The Information shall be used for the sole purpose of
evaluating the potential purchase of the Property and for no other purpose. Prospective Buyer
shall not contact directly any persons concerning the Property, including, without limitation,
Owner’s employees, suppliers, tenants, or lenders.
4.
Information accuracy. Although Owner and Commerce is providing the Information to
the Prospective Buyer for the purpose of its evaluation of the Property, Prospective Buyer
understands that Owner and Commerce do not make any representation or warranty as to the
accuracy or completeness of the Information. This Agreement applies to all Information about
the Property received from Owner or Commerce, now or in the future, which is not readily
available to the general public.
5.
Binding Effect. The persons signing on behalf of the Prospective Buyer represent that they
have the authority to bind the party for whom they sign. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their successors, assigns and other legal
representatives, and shall further binding upon the contractors and employees of Prospective
Buyer.
Sky Park Apartments
3
Sky Park
Apartments
Investment Offering
6.
Return of Documents. Upon review of the Information provided, if Buyer no longer has an
interest in the potential acquisition of the Property, Buyer agrees to return in a timely manner all
Information provided to Commerce CRG.
7.
Other. This Agreement represents the entire agreement between and among the parties
concerning the confidentiality and non-disclosure of the Information. This Agreement shall
not be modified except by written agreement signed by all the parties. This Agreement shall
in all respects be construed in accordance with the laws of the State of Utah. In the Prospective
Buyer breaches its obligations, the prevailing party in any lawsuit shall be entitled to reasonable
attorney’s fees and costs in addition to all remedies available to it.
IN WITNESS WHEREOF, the parties hereto intending to be legally bound have executed this Agreement as of
the day and year first above written.
PROSPECTIVE BUYER:
Signature
Dated:
Phone:
Please print clearly the following:
Name:
Company:
Title:
Fax:
E-mail:
Address:
City:
State
ZIP
PLEASE SIGN THIS DOCUMENT AND RETURN TO COMMERCE CRG.
FAX NUMBER (801) 322-2040
ATTN: Mike Carroll [email protected]
Diane Taylor [email protected]
801.303.5556
801.303.5564
Sky Park Apartments
4
Sky Park
Apartments
Investment Offering
Table of Contents
1
2
• Confidentiality Agreement
• Executive Summary
3 • Income & Expense Statement
4 • Rent Roll
5 • Expense Breakdown
6 • Expense Comparables
7 • Property Summary
8 • Floor Plans
9 • Additional Data Upon Request
Title Report
Loan Documents
©2008, Commerce CRG. This statement, with the information it contains, is given with the understanding that all negotiations relating to the purchase, renting, or leasing of the property described above shall
be conducted through this office. No warranty or representation, express or implied, is made as to the accuracy of the information contained herein, and same is submitted subject to errors, omissions, change of
price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
Some aerial photography by DigitalGlobe or Aerials Express. (project path: M:\1 - Projects\Carroll, M\3 - Packages\Sky Park Apts)
Sky Park Apartments
5
Executive Summary
Sky Park
Apartments
Sky Park
Apartments
Investment Offering
Executive Summary
Investment Overview:
Commerce CRG is pleased to present for sale the Sky Park Apartments, Phase I and II located
in Vernal, Utah. Sky Park Phase I and II is a newly built 64 unit multifamily investment
consisting of 32 units in each phase, and is 100% occupied with a waiting list. The units in
Phase I are 1,071 square feet 2 bedroom 2 bath townhouse style units, with attached single car
garage (281 SF). Each unit has a laundry room, large dining area and tiled kitchen and baths.
Phase II units are identical to the Phase I units with additional square footage added to the
upstairs bedrooms and living area for a total of 1,275 square feet.
The Offering:
Phase I is offered for sale at an attractive 8.72% cap rate for an asking price of $5,500,000
based upon an MAI appraisal by Free & Associates (after calculating expenses at $2,600 per
unit per year, and including reserves at 2%). The current average lease rate for Phase I is $1,575
per unit/per month. Demand for housing in this area is very strong with rents increasing
whenever the lease will permit.
The Market:
Vernal is the county seat of Uintah County and home of the world’s largest Jurassic Dinosaur
Quarry in the world, with world class fishing, river running, hiking and biking and companion
to the alpine meadows and red-rock canyons. The development of oil and gas resources
continues to shape Uintah County’s economy. First and foremost is natural gas. The attractive
economics of natural gas have only been held back by the ability to transport the product.
There are currently three major pipelines under construction by Williams Energy, Integra and
Questar, which will transport natural gas to the east coast thereby making it available and
affordable to significant numbers of people. Natural gas will be a sustained long term play for
the Uintah Basin and Vernal in particular.
Anadarko, in recognizing its operational agreement with Ute Energy LLC, to process and
deliver natural gas liquids, extracted from the Greater Natural Buttes Field in the Uintah Basin,
has constructed the Chipeta plant south of Vernal. As found in the Uintah Basin Standard:
“We have a 15 to 20 year commitment her,” said Karl Kurz, Anadarko’s chief operation officer.
“Greater Natural Buttes, Uintah Basin provides a high quality resource with more than 9
trillion cubic feet of gas in reserve.”
As the need for the Uintah basin’s resources increases so does the demand for workers in the
area especially in Vernal, the Basin’s largest city, and in turn, influences the housing demand
in the region. Also influencing the housing demand is the Uintah Basin Applied Technology
College/Utah State University campus requiring housing for its some 15,000 students.
Other industries such as government, trade, recreation services along with Ute Indian Tribal
enterprises are also adding to the county’s economic diversity.
Sky Park Apartments
7
Sky Park
Apartments
Investment Offering
The unprecedented job and population growth has produced a severe housing shortage. The
demand for rental units and entry level housing dramatically exceeds the supply with limited
construction on the horizon. Energy companies with significant operations in Vernal include,
Halliburton, Schlumberger, Anadarko, Pacific Corp and Questar.
Major employers include: Uintah School District, Halliburton Energy Services (Oil & Gas
Well Drilling Services), Uinta County, Ute Indian Tribe, Anadarko Petroleum (Petroleum &
Natural Gas Mining), Ashley Valley Medical Center (Health Care), BJ Services Company
(Oil & Gas Support Services) and Deseret Generation (Electric Utility).
Sky Park Apartments
8
Income & Expense Statement
Sky Park
Apartments
Sky Park
Apartments
Investment Offering
Sky Park Apartments, Phase I
626, 635, 640, 667, 672, 669, 674 East Sky Park Lane (1500 South)
and 695 East Landing Drive (1500 South)
Vernal, Utah
Income: See rent roll
Annual
32 Units $604,800
Vacancy @ 5% $30,240
Gross Operating Income $574,560
Expenses @ $2,600 per unit / year Reserves @ 2% Net Operating Income List Price CAP Rate 8.72%
Cost per Unit $83,200
$11,491
$479,869
$5,500,000
$171,875
Note: Brand new construction. Each apartment is 2 bedrooms, 2 bath,
1,071 square feet with attached garage (281 Sq. Ft.)
Sky Park Apartments
10
Rent Roll
Sky Park
Apartments
Apart.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Bldg.
1
1
1
1
2
2
2
2
3
3
3
3
4
4
4
4
5
5
5
5
6
6
6
6
7
7
7
7
8
8
8
8
Tenant Name
Rex Olsen
Kam Lawson
Jason Laws
Glen Murray
Ben Thompson
Daniel Meinders
Josh Nichols
BJ Services - Master Tenant (furnished)
BJ Services - Master Tenant (furnished)
Deans
Kyle & Krystal Jamison
Cassidy Lee
Mecham
Aaron Poplawski
Adam Kearl
Perkins & Ramirezz
Monges / Jones
Randy Carter
Shewell / Orr
Beau Burgin
Andrew Johnson & Dye
Justin & Tracey Gockley
Michael Kidd
Rohrer
Robert Lamph
John Hodge
Miller / Holtsclaw
Blanchard
BJ Services - Master Tenant (furnished)
BJ Services - Master Tenant (furnished)
BJ Services - Master Tenant (furnished)
BJ Services - Master Tenant (furnished)
Square Footage: 1,071/unit
Address of
Property
626 Sky Park Lane
626 Sky Park Lane
626 Sky Park Lane
626 Sky Park Lane
635 Sky Park Lane
635 Sky Park Lane
635 Sky Park Lane
635 Sky Park Lane
640 Sky Park Lane
640 Sky Park Lane
640 Sky Park Lane
640 Sky Park Lane
667 Sky Park Lane
667 Sky Park Lane
667 Sky Park Lane
667 Sky Park Lane
672 Sky Park Lane
672 Sky Park Lane
672 Sky Park Lane
672 Sky Park Lane
669 Sky Park Lane
669 Sky Park Lane
669 Sky Park Lane
669 Sky Park Lane
674 Sky Park Lane
674 Sky Park Lane
674 Sky Park Lane
674 Sky Park Lane
695 E. Landing Dr.
695 E. Landing Dr.
695 E. Landing Dr.
695 E. Landing Dr.
A
B
C
D
A
B
C
D
A
B
C
D
A
B
C
D
A
B
C
D
A
B
C
D
A
B
C
D
A
B
C
D
Unit
Occupancy
Date
10/10/2008
10/10/2008
10/10/2008
10/10/2008
9/19/2008
9/19/2008
9/19/2008
9/19/2008
9/8/2008
9/8/2008
9/8/2008
9/8/2008
9/11/2008
9/11/2008
9/11/2008
9/11/2008
9/8/2008
9/8/2008
9/22/2008
9/22/2008
10/5/2008
10/5/2008
10/5/2008
10/5/2008
9/12/2008
9/12/2008
9/12/2008
9/12/2008
10/20/2008
10/20/2008
10/20/2008
10/20/2008
9/9/2008
9/10/2008
9/10/2008
9/10/2008
9/13/2008
9/13/2008
9/13/2008
9/13/2008
9/22/2008
9/22/2008
9/22/2008
9/22/2008
10/5/2008
10/5/2008
10/5/2008
10/5/2008
9/12/2008
9/14/2008
9/14/2008
9/15/2008
10/20/2008
10/20/2008
10/20/2008
10/20/2008
Move In
Date
10/10/2008
10/10/2008
10/10/2008
10/10/2008
9/20/2008
9/20/2008
9/20/2008
Sky Park Apartments
1,071 Square Feet per Unit
Annual
Monthly
Rent
Rent
$1,400.00 $16,800.00
$1,300.00 $15,600.00
$1,300.00 $15,600.00
$1,400.00 $16,800.00
$1,400.00 $16,800.00
$1,400.00 $16,800.00
$1,350.00 $16,200.00
$2,550.00 $30,000.00
$2,550.00 $30,000.00
$1,400.00 $16,800.00
$1,300.00 $15,600.00
$1,300.00 $15,600.00
$1,400.00 $16,800.00
$1,325.00 $15,900.00
$1,350.00 $16,200.00
$1,400.00 $16,800.00
$1,350.00 $16,200.00
$1,300.00 $15,600.00
$1,300.00 $15,600.00
$1,500.00 $18,000.00
$1,400.00 $16,800.00
$1,300.00 $15,600.00
$1,300.00 $15,600.00
$1,400.00 $16,800.00
$1,325.00 $15,900.00
$1,300.00 $15,600.00
$1,300.00 $15,600.00
$1,300.00 $15,600.00
$2,550.00 $30,600.00
$2,550.00 $30,600.00
$2,550.00 $30,600.00
$2,550.00 $30,600.00
$50,400.00 $603,600.00
SKY PARK APARTMENT, PHASE I
PROJECTED RENT ROLL (as of 9/30/08)
Investment Offering
Sky Park
Apartments
12
Expense Breakdown
Sky Park
Apartments
Sky Park
Apartments
Investment Offering
Expense Breakdown
The information categorizes each of the expenses by percentage of the total expense and also breaks
down each expense by cost per unit. The chart and survey results are found below:
Expense
2007 Expense Survey – 10 - 49 Units
Repairs and Maintenance
Utilities
Payroll Costs
Property Taxes
Management Fee
Turnover Costs
Property Insurance
Administrative Costs
Advertising
Total
Source: Equimark Properties
% of Total
2006
2007
23%
10%
13%
15%
12%
5%
8%
7%
6%
26%
11%
14%
14%
12%
6%
8%
6%
3%
Per Unit
2006
2007
$537
$240
$307
$346
$278
$122
$181
$159
$146
$2,316
$671
$273
$362
$369
$308
$165
$194
$159
$75
$2,576
Variance
2006-2007
$134
$33
$55
$23
$30
$43
$13
$0
$-71
$260
It is noted that replacement reserves are not included in the survey, but are taken into account in our
offering. Most property owners have a replacement reserve which ranges from $100 to $200 per unit.
It should be noted that the tenant pays for the electricity and gas; the landlord will pay for the sewer
and water.
For additional support of the projected expenses for the subject property, the following expense
comparables are listed, which include replacement reserves. None of the comparables in the sales
comparison approach indicated expenses. We have used supplemental sales of similar properties
indicating expenses per unit.
Sky Park Apartments
14
Expense Comparables
Sky Park
Apartments
Sky Park
Apartments
Investment Offering
Expense Comparables
Sale
#
Location
S-1
125 Skyline Drive
Rock Springs, WY
S-2
257 South 50 West
Kaysville, UT
S-3
498 East Twin Trees Lane
Layton, UT
S-4
1880 South Columbia Lane
Orem, UT
S-5
324 West 620 North
Orem, UT
Eff. Age /
Potential
Sale Size
Gross Inc /
Date (SF) / Units Vacancy
12/04
30 yrs
54,864
64
7/07
20 yrs
41,039
48
9/06
7 yrs
53,440
43
10/06
25 yrs
26,175
28
3/05
10 yrs
42,453
49
Average
$351,600
4%
$14,064
$346,107
0%
$0
$330,280
0%
$0
$185,250
0%
$0
$337,397
0%
$0
Eff. Income
Expenses
Expense Ratio Per Unit
Expenses
$337,536
39%
$131,639
$346,107
28%
$96,910
$330,280
35%
$115,598
$185,250
32%
$59,280
$337,397
31%
$104,593
$2,057
$2,019
$2,688
$2,117
$2,135
$2,203
It is noted that the comparables above have been adjusted to include an estimate for replacement reserves.
The subject owner projects an operating expense of $2,000 per unit for the first 12 months in operation.
This is below the range of the survey with $2,576 and the comparables with $2,203 per unit. The subject
will be new with limited expenses for repairs and maintenance and replacement costs. The subject may
have higher expenses because it is in a relatively remote area. We conclude an annual expense per unit of
$2,600 or $83,200 ($2,600 /unit x 32 units).
Sky Park Apartments
16
Property Summary
Property Description
Building Sketch
Aerials
Plat Map
Photos
Sky Park
Apartments
Sky Park
Apartments
Investment Offering
P R O P E RTY D E S CRI P TI O N
Apartment Complex Name: Sky Park Apartments, Phase I
Location:
626 - 674 East Sky Park Lane (1500 South),
and 695 East Landing Drive (1500 South), Vernal, Utah
County:
Uintah
Building Size: 32 Units - 2 bed / 2 bath
Unit Size:
1,071 Sq. Ft. plus 281 Sq. Ft. garage
Parking: Attached 1 car garage for each unit
Guest Parking: Adequate
Zoning:
R-2 Residential
Site Size:
3.31 acres
Metering:
Age: Individually Metered Gas & Electricity
Possible Debt: 75% LTV, 30 year term, 6.25% fixed for 5 years
Current Occupancy:
100%
2008
Sales Price: $ 5,500,000
Cap Rate: 8.72 % Phase I
Cash on Cash Return:
12.73 % Cash on Cash (Proforma Debt)
Sky Park Apartments
18
Sky Park
Apartments
Investment Offering
G ene r a l D es c r i p t i on o f Ap a r t m en t Co m p l e x
Sky Park Apartments – Phase I consists of 32 two bedroom/two bath apartment units in 8 apartment buildings.
The apartment units are two-level townhouse style and are similar in design and construction. There are 8
4-Plex buildings. Laundry facilities are provided in each unit [laundry rooms with washer and dryer hook-ups].
Each unit has a disposal, dishwasher, refrigerator, range/oven and hood. Heat is provided by individually metered
forced air gas furnaces in each unit. Hot water is provided by individual water heaters in each unit. Gross rentable
area is 34,272 square feet. The floors are carpet in the living areas and tile in the kitchens and bathrooms. Each
unit has one car attached garage.
The buildings are frame constructed on concrete footings and foundation with wood siding, stucco, and fascia with
some brick trim. The roofs were originally pitched with asphalt shingle rood coverings, although two or three of
the buildings have had a standing seam metal roof covering installed.
The units are individually metered for electricity and gas, although hot water is master metered. Water, sewer and
garbage charges are paid by the property owner. A description of the building and individual units is as follows.
Footings & Foundation Floor:
Reinforced concrete foundation on footings for perimeter
Exterior:
Wood frame with stucco and some brick trim
Roof:
Pitched asphalt shingle
Number of Units:
Phase I = 32 units, all 2 bedroom/2 bath
Phase II = 32 units, all 2 bedroom/2 bath
Number of stories:
Two
Year built:
2008
Interior Walls:
Painted gypsum board
Ceilings:
Painted gypsum board
Flooring:
Ceramic tile in kitchen and bathrooms.
Carpet throughout the rest of the interior.
Sky Park Apartments
19
Sky Park
Apartments
Investment Offering
Doors:
Wood frame interior doors are accessed by secured exterior glass
doors in metal frames. Metal clad entry doors with
deadbolts. Interior doors are hollow wood.
Plumbing:
Basic plumbing for bathroom and kitchen. 2 bathooms per unit.
Heating and Cooling:
Units are individually heated by central gas forced air furnaces.
Individual central air conditioners in each unit. Individual water
heaters in each unit.
Other Improvements:
One-car attached garage, rear patio.
Electrical:
Lighting includes incandescent and fluorescent lighting
throughout.
Fire Protection: Complete sprinkling system for fire protection.
Insulation:
R-value unknown, but assumed to be adequate and typical.
Bathroom:
Tub/shower with tile surround.
Kitchen:
Oven/range, fan/hood, dishwasher, disposal and refrigerator.
Sky Park Apartments
20
Sky Park
Apartments
Investment Offering
Vernal Area
Sky Park Apartments
21
Sky Park
Apartments
ST
570 E A
500 EAST
Investment Offering
1500 SOUTH
Sky Park Apartments
22
Sky Park
Apartments
Investment Offering
Sky Park Apartments
23
Sky Park
Apartments
Investment Offering
Plat Map
Sky Park Apartments
24
Sky Park
Apartments
Investment Offering
Sky Park Apartments
25
Floor Plans
Sky Park
Apartments
Sky Park
Apartments
Investment Offering
Rentable Square Feet
Sky Park Apartments
27
Sky Park
Apartments
Investment Offering
Rentable Square Feet
Sky Park Apartments
28
Additional Data Upon Request
Title Report
Loan Documents
Sky Park
Apartments
Salt Lake City Office
175 East 400 South, Suite 700
Salt Lake City, Utah 84111
Tel (801) 322-2000 Fax (801) 322-2040
www.commercecrg.com