student housing at melrose street
Transcription
student housing at melrose street
STUDENT HOUSING AT MELROSE STREET 8 Units | 34 Bedrooms Off-Campus Student Housing Across the Street From Penn State - Hazleton Campus 7 Melrose Street Hazleton, Pennsylvania Offering Memorandum The following disclaimer applies to the attached Offering Memorandum (“Memorandum”) and you are, therefore, advised to read this Disclaimer carefully before reading, accessing or making any other use of the Offering Memorandum or other information supplied in connection with the Property. The Memorandum shall not constitute an offer to sell the Property. A sale of the Property shall only take place upon the execution of an Agreement of Sale that has been signed by Buyer and Seller and all conditions and contingencies contained in the Agreement of Sale have been satisfied prior to settlement. Neither Rittenhouse Realty Advisors (“RRA”) nor any other third parties have been authorized to give any information other than what has been provided in the Memorandum. Notwithstanding the foregoing, RRA does not make any representation as to the completeness or accuracy of the information contained in the Memorandum or the value or performance of the Property either past, present or future. The information contained in the Memorandum shall not be relied upon as a promise or representation as to any condition, value or performance of the Property. RRA and its owners, members, shareholders, managers, employees, agents and affiliates expressly disclaim any and all liability for any and all representations, either express or implied, arising from any statements, warranties, representations or information provided in the Memorandum or from the omission of any such representations, statements, warranties or information from the Memorandum. It is the sole responsibility of any recipient of the Memorandum to verify the information contained therein and to conduct the proper due diligence concerning the Property. Qualified prospective purchasers of the Property shall be afforded an opportunity to conduct inspections of the Property. It is expected that such qualified purchasers shall conduct any and all inspections and evaluations of the Property deemed necessary by them. RRA and Seller reserve the right, at their sole discretion, to reject any and all expressions of interest concerning the Property from third parties, including the termination of any ongoing discussions and/or negotiations. The Memorandum is subject to withdraw, cancellation or modification by RRA or Seller at any time. Seller shall have no legal obligation to any party that has received or reviewed the Memorandum unless and until a written Agreement of Sale has been fully executed, delivered and approved by Seller and Seller’s counsel; and all contingencies and/or conditions to Seller’s obligation to settle have been satisfied. 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 215.454.2852 | [email protected] 2 Table of Contents Pricing & Financial Analysis Executive Summary 5 Financial Analysis 7 Proposed Rent Schedule 8 Property Description Property Details 10 Site Plan/Aerial 11 Floor Plan 12 Amenities 13 Property Photographs 14 Market Overview Competitive Rental Market Survey 18 Location Overview 19 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 3 PRICING & FINANCIAL ANALYSIS Executive Summary Financial Analysis Rent Roll Summary Executive Summary Investment Highlights Located Directly Across the Street from Penn State - Hazleton Campus Newly Constructed (2009) Student Housing Featuring Fully Equipped Kitchens, Upgraded Flooring, and Central Air and Heat High Efficiency Tankless Water Heaters for Each Unit Pitched Roof with Solar Energy Panels Coin Operated Laundry Facility On Site Secure Building Access, Closed Circuit Security Cameras and High Speed Internet Pricing Offering Price $1,200,000 Number of Units 8 Number of Bedrooms 34 Price per Bedroom $35,294 Pro Forma Cap Rate (Less Reserves) 8.9% Terms of Sale Offered free and clear of debt. All cash at closing. 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 5 Executive Summary Investment Overview Rittenhouse Realty Advisors extends to qualified investors the opportunity to acquire the fee simple interest in this 8 unit (34 bedroom) new construction, two-story student housing apartment building situated at 7 Melrose Street in Hazleton, Pennsylvania directly across the street from the Penn State - Hazleton Campus. The building is a two-story apartment building with 8 student housing units, comprised of 6, four-bedroom units and 2, five-bedroom units. Each unit is separately metered for water and electricity, and is equipped with high efficiency tankless water heaters as well as central air conditioning and heat. Amenities in each unit included fully equipped kitchens, two full bathrooms, upgraded laminate flooring and ample storage. In addition, the property features off-street parking, secure building access with security cameras, sprinkler system, hardwired smoke detectors, on-site laundry facility and roof-installed solar panels. The property is being offered for sale via the original lender, post construction. The property was “taken back” from the borrower and is completely vacant. It is situated directly across the street from Penn State University’s Commonwealth Campus, PSU Hazleton, with current enrollment of approximately 1,000 students. It presents an excellent opportunity for the new owner to capitalize on the captive local student housing market, and execute a full scale re-branding and marketing campaign to return the property to stabilization. 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 6 Financial Analysis (8 Units; 34 Bedrooms) 2010 Actual 2011 Actual 2015 Pro Forma Pro Forma Assumptions INCOME Rental Income Total Proposed Rent $209,900 Less: Vacancy Less: Concessions Net Rental Income $273,664 Per Proposed Rent Schedule ($20,990 x 10 Months) (10,495) 5% Estimate (2,099) 1% Estimate $257,861 $197,306 Other Income Laundry Income Misc. and Other Income Parking Income $0 $0 $3,060 26,395 19,824 800 3,825 0 0 $7.50 Per Bed Per Month Estimate $100 per Unit Estimate 10,612 22,395 0 $40,832 $42,219 $3,860 $314,496 $300,080 $201,166 Real Estate Taxes $8,403 $19,163 $18,641 Utilities 28,738 30,415 33,457 2011 Actual Plus 10% 7,839 1,784 3,200 $400 per Unit Estimate Trash 0 0 800 $100 per Unit Estimate Life, Safety & Licenses 0 0 400 $50 per Unit Estimate $44,980 $51,362 $56,498 $7,062 $9,000 $10,892 $10,058 5% Management Fee Reimbursement Income Total Other Income TOTAL INCOME EXPENSES Fixed Expenses Insurance Total Fixed Expenses Per 2014 RealQuest; 2 Parcels ($18,212 + $429) Variable Expenses Management Fee Payroll 0 0 13,600 $400 per Bedroom Estimate 36,592 36,196 6,800 $200 per Bedroom Estimate Turnover 0 0 2,400 60% at $500 per Unit Estimate Landscaping and Snow Removal 0 0 1,200 $150 per Unit Estimate Repairs and Maintenance Advertising and Marketing 600 338 1,200 $150 per Unit Estimate General and Administrative 29,283 39,721 1,200 $150 per Unit Estimate $75,475 $87,147 $36,458 $120,455 $138,509 $92,956 $194,041 $161,571 $108,210 $0 $0 ($2,000) $194,041 $161,571 $106,210 Total Variable Expenses TOTAL EXPENSES NET OPERATING INCOME Capital Reserves NOI Less Reserves 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 $4,557 $250 per Unit Estimate 215.454.2852 | [email protected] 7 Proposed Rent Schedule Count Unit No. Unit Type Proposed Rent Per Bedroom Bedrooms Per Unit Proposed Rent Per Unit 1 M-1 4 Bedroom / 2 Bath $625 4 $2,500 2 M-2 4 Bedroom / 2 Bath $625 4 $2,500 3 M-3 4 Bedroom / 2 Bath $625 4 $2,500 4 M-4 4 Bedroom / 2 Bath $625 4 $2,500 5 M-5 4 Bedroom / 2 Bath $625 4 $2,500 6 M-6 5 Bedroom / 2 Bath $599 5 $2,995 7 M-7 4 Bedroom / 2 Bath $625 4 $2,500 8 M-8 5 Bedroom / 2 Bath 8 Total $599 5 $2,995 $4,948 34 $20,990 Monthly Total Proposed Rent $55,940 Annual Total Proposed Rent $671,280 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 8 PROPERTY DESCRIPTION Property Details Site Plan / Aerial Floor Plan Amenities Property Photographs Property Details STUDENT HOUSING AT MELROSE STREET Property Address 7 Melrose Street; Hazleton, Pennsylvania 18202 County Luzerne Municipality/Township Butler Township Zoning R-1 (Residential) APN 58-S7S5-002-006-000 Lot Size 0.92 Acres / 39,901 Square Feet Year Built 2009 No. of Buildings 1 No. of Stories 2 No. of Units 8 No. of Bedrooms 34 Rentable Square Feet Parking 12,870± 24 Off-Street Spaces Property Construction Basic Construction Concrete block Floors Concrete on grade, first floor, composite panels over wood joists upper floors Exterior Walls Concrete block and vinyl siding Framing Steel framing on a concrete slab Roof Gable framed roof with fiberglass shingles Windows Vinyl casement with thermal glazing Pedestrian Doors Glass, wood and metal Utilities Electric Gas Phone/Cable PPL Utilities UGI Services Verizon Water Hazelton City Authority Sewer Greater Hazleton Joint Sewer Mechanical HVAC Mitsubishi split system with two pad mounted condensing units and electric heat pumps located along the eastern and western sides of the building Wiring 100 amp service Fire Protection Hardwired smoke detectors; central fire alarm system; fully sprinklered with a wet system Security Entry card system 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 10 Site Plan/Aerial 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 11 Floor Plans 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 12 Amenities Fully Furnished, Four and Five-Bedroom Units Modern Kitchens with New, Full Size Appliances Custom Closets Laundry Facilities On Site Energy Efficient Lighting Parking Available Situated Across the Street of Penn State - Hazleton Campus 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 13 Property Photographs 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 14 Property Photographs 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 15 Property Photographs 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 16 MARKET OVERVIEW Competitive Rental Market Survey Location Overview Competitive Rental Market Survey Subject Property 7 Melrose Street Hazleton, PA Units 8 Unit Mix 4 Bedroom / 2 Bath 5 Bedroom / 2 Bath Rent per Bed (Proposed Monthly) $625 $599 Utilities Occupancy N/A Elec H/W Heat C/W & Sewer Owner Owner Owner Owner COMPARABLE STUDENT HOUSING RENTAL PROPERTIES Property / Address Units 1 39 Route 93 Hazleton, PA 4 2 26 Airport Road Hazleton, PA 5 3 416 E. Samuels Avenue Hazleton, PA 3 4 9 Park Street W. Hazleton, PA 4 5 559 Washington Street Freeland, PA 5 Utilities Rent per Bed (Monthly) Occupancy (2) 1 Bedroom $450-$550 $650 (3) 1 Bedroom $500 Unit Mix (2) 2 Bdr "Shared" Units (2) 2 Bdr "Shared" Units $300 or $450 (3) 1 Bedroom $400 (2) 1 Bedroom $400 (2) 2 Bdr "Shared" Units $300 (5) 1 Bedroom $400 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 Elec H/W Heat C/W & Sewer N/A Owner Owner Owner Owner 80% Owner Owner Owner Owner 100% Owner Owner Owner Owner 100% Owner Owner Owner Owner N/A Owner Owner Owner Owner 215.454.2852 | [email protected] 18 Location Overview The subject property is situated in Sugarloaf Township in the northern suburbs of the City of Hazleton in the south central portion of the Scranton-Wilkes-Barre MSA. The Scranton MSA is located in northeastern Pennsylvania, and incorporates the counties of Lackawanna, Luzerne and Wyoming, and the cities of Scranton, Wilkes-Barre and Hazleton. The property is located approximately 1.6 miles to the north of the City of Hazleton, which is about 30 miles south of Scranton/WilkesBarre. Philadelphia is located 97 miles to the south, and New York City 127 miles to the east. Location & Access The area is well served by interstate highways providing access to the eastern seaboard, including Interstates 80, 81, 84 and 476 (the Northeast Extension of the Pennsylvania Turnpike.). I-81 largely follows the Appalachian Mountains from Fishers Landing, New York at the Canadian border, south to Dandridge Tennessee. The largely rural route has become a heavily used trucking corridor as an alternative to Interstate 95. It intersects with many major east/west interstates in Pennsylvania including Interstate-76, the Pennsylvania Turnpike, Interstate-83 in Harrisburg, Interstate-78 above Lebanon, Intersate-80 near Hazleton, and Interstate-84 near Scranton. The subject property is located off of Airport Beltway, a local collector road connecting PA Route 309 and PA Route 93. Route 309 is a local highway extending from the boundary of Philadelphia through Allentown and Hazleton to Bowman Village northwest of Wilkes-Barre. Business Route 309/Church Street is the main north//south commercial street through Hazleton. PA Route 93 is a short local highway extending east/west through Hazelton and connecting with the local boroughs of Orangeville, Berwick and Nesquehoning. It is the major east/west commercial corridor through Hazelton, connecting with every state route into the city, as well as I-80 and I-81 northwest of the City. The subject is located approximately 1- ½ miles east of the interchange of PA Route 93 and I-81. 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 19 Location Overview Economic & Demographic Profile Hazleton, in Luzerne County, had a population of 25,340 at the 2010 census, an increase of 8.6% from the 2000 census, making it the 17th largest city in Pennsylvania. The population growth rate is much higher than the state average rate of 3.43%. The median household income in Hazleton was at $31,295 in 2008-2012 and has grown by 11.44% since 2000. The median house value was at $90,000 in 2008-2012 and has grown by 33.93% since 2000. The rural communities located north of the city of Hazleton have been under increasing development pressure. While most of the land use is still undeveloped agricultural or forestland, intensive commercial and industrial development is located along the Airport Beltway at the southern edge of the township, PA Route 309, through the center of the township, and proximate to the I-81 and I-80 interchanges. Historically, the anthracite coal industry was the economic engine for the MSA, enabling the creation of many industries including railroads, iron, steel and textiles. Employment in the industry peaked in 1914 and remained productive until after World War II. In 1959, the collapse of a branch of Knox Mine allowed the Susquehanna River to flood all of the interconnected mines. This and the concurrent shift to oil effectively ended mining in the region along with many dependent industries. The economic development agency CANDO was established in 1956. One of their first accomplishments was to purchase 550 acres west of Hazleton, which is now the Valmont Industrial Park. The organization was also instr umental in br inging the construction of I-80 and I-81 to the area, with the local interchanges opening in 1965. This opened the area to new industrial development, and over the years CANDO has added over 3,500 acres in three additional parks. Major industrial sectors include: warehouse and distribution including facilities for Amazon, American Eagle, Michael’s Handcrafts, Office Max, Auto Zone and a number of 3rd party logistics and e-commerce operations; food processing including facilities for Hershey’s, Tootsie Roll, Stroehmann’s, Coca Cola, Cargill Meat and related suppliers; plastics, particularly food packaging products; and an emerging Bio Science and Health Care industry. The property’s local area is an expanding suburban development of the City of Hazleton. Dominant land uses along Airport Beltway/PA Route 93 include: Hazleton Municipal Airport, a general aviation airport handling primarily privately owned single-engine aircraft; Laurel Mall, a regional mall, anchored by Boscov’s, Kmart and J.C. Penney. Other major tenants are a Regal Cinema, Old Navy and Aldi. Adjoining the mall is a Walmart Supercenter; Penn State’s Hazleton Campus is on 125 acr es located at the inter section of PA Route 93 and I-81. It has an enrollment of about 1,156 students, with approximately 450 students living on campus. The campus offers baccalaureate degrees, associate degrees, minors, and credit and non-credit certificates in a wide variety of disciplines, but is primarily a two year program; and Valmont Industrial Park at the inter section of PA Route 93 and I-81 is the first industrial park in the area with over 750 acres. 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 20 Location Overview DEMOGRAPHIC SNAPSHOT 1 Mile 3 Miles 5 Miles 2014 Population 2,109 27,308 48,900 2019 Population 2,184 27,186 48,613 Population Growth 2014-2019 3.56% (0.45%) (0.59%) Average Age 43 40 40 2014 Total Households 728 10,620 19,081 Household Growth (2014-2019) Median Household Income Average Household Size 4.81% $41,212 2.2 (0.40%) $37,442 2.5 (0.60%) $38,716 2.5 Median Home Value $183,777 $131,405 $130,788 1979 1951 1950 Median Year Built 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 21 Location Overview - Penn State Hazleton Penn State Hazleton is a commonwealth campus of the Pennsylvania State University. It is located in Sugarloaf Township, Luzerne County, Pennsylvania, near the junction of Interstates 80 and 81. The campus occupies over 100 acres, and has an enrollment of about 1,156 full and part-time students; both traditional and non-traditional. One of 23 extension campuses of Penn State University, this campus offers baccalaureate degrees, associate degrees, minors, and credit and non-credit certificates in a wide variety of disciplines, but is primarily a two year program. More than 160 Penn State majors can be started there and completed at University Park or another Penn State campus. Baccalaureate Degree Programs offered include: Business, Corporate Communications, General Engineering, Information Sciences and Technology, Letters, Arts and Sciences, Psychology and Rehabilitation and Human Services. In addition, the Associate Degree Programs include Business Administration, Information Sciences and Technology, Letters, Arts and Sciences, Medical Laboratory Technology and Physical Therapist Assistant. Enrollment has increased at the rate of approximately 1 percent per year, however, the growth has come primarily in distance learning. Three extension campuses and the main campus exhibited lower rates of growth, and all remaining campuses suffered from significant declines. At the Hazleton Campus, enrollment declined by more than 6% per year. Hazleton Campus - Enrollment & Housing Trends 2006 2007 2008 2009 2010 2011 2012 2013 Total Enrollment 1143 1232 1228 1,245 1,303 1,172 1,060 951 Undergraduate 1142 1231 1228 1,245 1,303 1,172 1,060 951 Full Time 1086 1183 1174 1191 1233 1108 1000 881 Part Time 57 49 54 54 70 64 60 70 Students On-Campus 480 456 479 473 482 481 477 456 42.0% 37.0% 39.0% 38.0% 37.0% 41.0% 45.0% 48.0% 490 490 490 490 490 490 490 490 98.0% 93.0% 97.7% 96.6% 98.4% 98.1% 97.3% 93.2% 596 693 684 701 743 618 510 391 % On-Campus Total Beds % Occupancy No. of Full-Time 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 22 Location Overview - Penn State Hazleton Student Housing Options The Hazleton Campus is able to accommodate up to 490 students within its three on-campus housing projects. However, this requires utilizing triple occupancy of some units. Outlined below are details of some of the residence halls on campus living facilities. Two are traditional dormitories, while the third is a townhouse style development. Dining is provided in a separate cafeteria. Student living on-campus must also purchase a meal plan. South Hall is a tr aditional coed r esidence hall that accommodates two students per bedroom with a common bathroom on each wing of the building's three floors. South Hall provides a central lobby area with a big screen TV, a game room, a laundry facility, vending machines, a study lounge, and 24-hour security access. This residence has 110 dorm rooms accommodating 226 persons in double and triple occupied rooms. North Hall offer s suites with two double bedr ooms and semipr ivate bathroom in each suite. North Hall also offers a central lobby area, study lounges, vending machines, laundry facility, and 24-hour security access. This residence hall has 36, twobedroom units accommodating 164 persons in double and triple occupied rooms. West Hall is a gr oup of townhouses, each consisting of five bedr ooms, 2.5 bathrooms, and a living room area. A central laundry facility is available in the complex. This complex has 10 units accommodating 100 persons in double occupied rooms Hazleton Campus has historically provided 38 to 48 percent of its undergraduate enrollment with on-campus housing. In 2008, the Chancellor of the Hazleton Campus expressed support for construction of the subject properties citing a need for additional off-campus housing. In that letter, he estimated that 400 students commute from home within Luzerne County, leaving a demand for off-campus housing for approximately 350 students. Significantly, full time students living off campus has declined from a high of 743 students to 391 students in 2013. This reduction impacts the need for off-campus housing. With the reduction in enrollment, more than half of the full time students reside on campus, with 391 full time students living off campus. As a two year campus only, Hazleton tends to attract from within the County, and students are easily able to commute from home. Other students may choose to rent one of the many single family homes that are available for rent within a three mile radius. The Hazleton Transit Authority provides bus service from the city of Hazleton to campus. 1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103 215.454.2852 | [email protected] 23 Kenneth Wellar Tel: 215.454.2879 [email protected] Corey Lonberger Tel: 215.454.2878 [email protected] Mark Duszak Tel: 215.454.2884 [email protected] Luke DeLuca Tel: 716.510.3715 [email protected] Chris Egan Tel: 215.454.2913 [email protected] Doug Emrich Tel: 215.454.2889 [email protected] David Greenhalgh Tel: 215.454.2887 [email protected] Robert Marzullo Tel: 215.454.2921 [email protected] Steve Miceli Tel: 215.454.2916 [email protected] Vincent Tagliente Tel: 215.454.2920 [email protected] Philadelphia Office 1628 John F. Kennedy Blvd. Eight Penn Center, Second Floor Philadelphia, PA 19103 Tel: 215.454.2852 New York Office 200 West 57th Street Suite 702 New York, NY 10019 Tel: 212.765.7900 Delaware Office 102 Larch Circle Suite 102 Newport, DE 19804 Tel: 302.994.3907 www.RittenhouseRealty.com | [email protected]
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