1300 PENN STATION, MERIDIAN, ID

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1 1300, MERIDIAN, ID This information contained herein is from sources deemed reliable. We have no reason to doubt its accuracy but do not guarantee it. It is the responsibility of the person reviewing this information to independently verify it. This package is subject to change, prior to sale or complete withdrawal. Maps are provided for location purposes only. The pictures cannot be reproduced 1

2 1300, MERIDIAN, ID 2

3 1300, MERIDIAN, ID Mark Bottles Real Estate Services proudly presents The Penn Station Apartments; a unique investment opportunity for an established apartment complex in the heart of Meridian, the fastest growing market in the country. The beautifully maintained 40 unit complex truly is truly in the heart of the Treasure Valley for shopping, dining, and entertainment. The ease of access to Eagle Road puts residents minutes from the best restaurants, retail stores, medical facilities, and many other amenities which amply surround the subject property. The Penn Station Apartments have a strong track record of tenancy, have been meticulously cared for by the previous owner of 16 years, and provide a rare value-add opportunity in the ultra-competitive stabilized multi-family space. We are proud to bring this asset to market at an asking price of $5,200,000, through a Call for Offers with offers due by 11/1/2018. This asset won t last long, so please find the Due Diligence suite of information at the links below, and call to schedule your tour today! October 17 th : October 26 th : Open House Showing Times 11 am 2 pm 11 am 2 pm For Full Due Diligence Package: 3

4 AREA MSA MAP 1300, MERIDIAN, ID 4

5 1300, MERIDIAN, ID Address: Building Size: SUMMARY 1300 Penn Station Lane Meridian, Idaho ± 36,000 SF HIGHLIGHTS Beautiful, 40 unit apartment complex situated just off Fairview Avenue & Stonehenge Way, right in the heart of Meridian, ID Land Size: ± acres 10 four-plex buildings Parcel: Zoning: R-15 Units: Parking: 4 Year Built: 2001 S four-plex bldgs (40 units) 40 carport spaces, 38 additional parking spaces, 5 garage spaces rented separately Asking Price: $5,200,000 All units are 2 bedroom, 1 bath 900 SF floor plan Incredible investment opportunity with value-add potential Call for offers Offers due by November 1, Seller reserves right to accept, reject, or negotiate any offer at any time. Can sell prior to deadline All terms/offers will be presented 5

6 1300, MERIDIAN, ID ASSUMABLE LOAN SUMMARY Original loan amount: $1,600,000 Loan payoff as of 10/31/18: $1,413,470 Loan expiration: July 31, 2021 Interest rate: 4.57% Monthly payment: $12, Current prepayment penalty: $62, The Seller currently has a loan in place on the property through Fannie Mae with the above terms. This loan is assumable, which may be a favorable option for the purchaser given the rate. The loan assumption would cost 1% of the outstanding balance, plus about $6,000 in fees, and we have included in the Due Diligence package a copy of the letter from HomeStreet Bank which discusses the particulars of the loan assumption. This cost would be borne by the Buyer. We have also included in the Due Diligence package a full assumption application to be submitted to Fannie Mae for the Buyer. This is the application any Buyer would need to submit in order to be approved to assume the current loan in place. Should the buyer choose not to assume the loan in place and pursue other financing or a cash offer, the current pre-payment penalty as documented above would apply to remove the Fannie Mae loan. This fee would be borne by the Buyer should the Buyer choose not to assume the loan. 6

7 Lease Original Unit # Expires Move In Unit # 1300, MERIDIAN, ID Rent Roll for Penn Station as of 9/28/18 Lease Expires Original Move In $ /31/2018 6/15/ $ /31/2019 8/8/ $ /31/2019 2/10/ $ /28/2019 9/23/ $ /30/ /4/ $ /31/2018 6/30/ $ /31/2018 4/28/ $ /31/2018 8/1/ $ /31/2019 9/15/ $ /31/2018 1/15/ $ /31/ /10/ $ /31/2019 2/11/ $ /31/2018 7/1/ $ /30/ /6/ $ /28/ /1/ $ /31/2019 4/16/ $ /31/2018 4/8/ $ /31/2019 4/22/ $ /31/2018 6/15/ $ /31/2019 4/28/ $ /28/2019 2/22/ $ /30/2018 4/3/ $ /31/2019 4/1/ $ /31/2019 7/13/ $ /28/2019 2/25/ $ /31/2019 7/22/ $ /30/2018 8/19/ $ /31/2019 8/24/ $ /15/2019 4/15/ $ /31/2019 7/20/ $ /31/2019 1/12/ $ /30/2018 6/1/ $ /31/2018 6/15/ $ /30/2018 9/12/ $ /31/2018 4/16/ $ /31/ /15/ $ /30/2018 5/26/ $ /30/2018 4/27/ $ /31/ /17/2017 Total monthy Rent: AVG monthly Rent: AVG annual Rent: $ 31, $ $ 9,

8 1300, MERIDIAN, ID 2017 Financials and 2018 YTD 8

9 1300, MERIDIAN, ID Actual Financials Pro-Forma PURCHASE INFORMATION INCOME MONTHLY ANNUAL Initial Market Value $ 5,200,000 Gross Rental Revenues $ 31,200 $ 374,400 Vacancy Loss (5%) $ (1,560) $ (18,720) Purchase Price $ 5,200,000 $ - $ - - First Mortgage 27% $ (1,404,000) Operating Income = $ 29,640 $ 355,680 - Second Mortgage $ - $ = Downpayment $ 3,796,000 + Buying Costs 1% $ 52,000 EXPENSES [% of Income] MONTHLY ANNUAL + Initial Improvements $ - Cleaning & Maintenance 6.7% $ 1,986 $ 23,831 = Initial Cash Invested $ 3,848,000 Insurance 2.0% $ 593 $ 7,114 Utility Expense 5.0% $ 1,482 $ 17,784 Management Fee 6.0% $ 1,778 $ 21,341 Square Feet Taxes 11.6% $ 3,432 $ 41,184 Price per Square Foot $ 144 Association Fees 0.0% $ - $ - Monthly Rent per Square Foot $ 0.87 Operating Expenses = 31.3% $ 9,271 $ 111,253 Average Monthly Rent Per Unit $ 780 Total Rental Units 40 MORTGAGES First Second NET PERFORMANCE MONTHLY ANNUAL Loan -To-Cost Ratio 27% 0.00% Net Operating Income $ 20,369 $ 244,427 Loan -To-Value Ratio 27% 0.00% Mortgage Payments $ (12,197) $ (146,360) Loan Amount $ 1,400, % Year 1 Improvements $ - $ - Loan Type Amortizing Cash Flow = $ 8,172 $ 98,067 Term Years 12.6 Debt Service Ratio 1.67 Interest Rate 4.57% Payment = $ 12,197 FINANCIAL METRIC [YEAR 1] PROPERTY TAX CALCULATION [a] Annual Gross Rent Multiplier Levy = Operating Expense Ratio 29.72% Total Purchase Price (Market Value)= $ 5,200,000 Debt Coverage Ratio 1.67 Assessed Value 90% of Market Price $ 4,680,000 Cap Rate (Cash Investment) 4.70% Est Annual Property Taxes = $ 41,184 Est Monthly Property Taxes = $ 3,432 Property Tax - % of Monthly Gross Rent = 11.00% 9

10 1300, MERIDIAN, ID Value Add Opportunity The Penn Station Apartments have been trailing market rents for some time and provide an excellent value-add opportunity for a buyer to unlock additional cash flow from the project. Currently, rents are sitting at $0.87/ft, which is significantly below market with existing projects asking $1.00-$1.05/ft in Meridian and many new construction projects targeting rents of $1.10-$1.15/ft. Due to the quality of the location, as well as the meticulous maintenance of the subject, rent increases would be more than justified. In addition, because the sewer and water is not separately metered, the Landlord has historically been paying the sewer, water, and trash bills without obtaining reimbursement from the Tenants. For the purposes of our Value-Add Pro-forma, we ve simulated a RUB s (Reimbursement of Utility Billing) program as well, where the Tenants reimburse the Landlord for their pro-rata share of the utility expense. This is standard for apartments, and would likely be about $40-$45/mo for each tenant to pay their pro-rata share of utilities, which is expected. By increasing rents to $1.00/ft, and instituting a RUB s program, the following Value-Add Pro-Forma illustrates the immediate additional value that is available to the purchaser of this asset. The following Long Term Hold Analysis page illustrates how that could be done over a stabilization period of years 1-3 with expedited rent increases of 10% annually, and then a stabilized hold period years 4-10 where rents settle into standard 3% annual increases. 10

11 1300, MERIDIAN, ID Value Add Pro-Forma PURCHASE INFORMATION INCOME MONTHLY ANNUAL Initial Market Value $ 5,200,000 Gross Rental Revenues $ 36,000 $ 432,000 Vacancy Loss (5%) $ (1,800) $ (21,600) Purchase Price $ 5,200,000 $ - $ - - First Mortgage 27% $ (1,404,000) Operating Income = $ 34,200 $ 410,400 - Second Mortgage $ - $ = Downpayment $ 3,796,000 + Buying Costs 1% $ 52,000 EXPENSES [% of Income] MONTHLY ANNUAL + Initial Improvements $ - Cleaning & Maintenance 6.7% $ 2,291 $ 27,497 = Initial Cash Invested $ 3,848,000 Insurance 2.0% $ 684 $ 8,208 Utility Expense 1.0% $ 342 $ 4,104 Management Fee 6.0% $ 2,052 $ 24,624 Square Feet Taxes 10.0% $ 3,432 $ 41,184 Price per Square Foot $ 144 Association Fees 0.0% $ - $ - Monthly Rent per Square Foot $ 1.00 Operating Expenses = 25.7% $ 8,801 $ 105,617 Average Monthly Rent Per Unit $ 900 Total Rental Units 40 MORTGAGES First Second NET PERFORMANCE MONTHLY ANNUAL Loan -To-Cost Ratio 27% 0.00% Net Operating Income $ 25,399 $ 304,783 Loan -To-Value Ratio 27% 0.00% Mortgage Payments $ (12,197) $ (146,360) Loan Amount $ 1,400, % Year 1 Improvements $ - $ - Loan Type Amortizing Cash Flow = $ 13,202 $ 158,423 Term Years 12.6 Debt Service Ratio 2.08 Interest Rate 4.57% Payment = $ 12,197 FINANCIAL METRIC [YEAR 1] PROPERTY TAX CALCULATION [a] Annual Gross Rent Multiplier Levy = Operating Expense Ratio 24.45% Total Purchase Price (Market Value)= $ 5,200,000 Debt Coverage Ratio 2.08 Assessed Value 90% of Market Price $ 4,680,000 Cap Rate (Cash Investment) 5.86% Est Annual Property Taxes = $ 41,184 Est Monthly Property Taxes = $ 3,432 Property Tax - % of Monthly Gross Rent = 9.53% 11

12 1300, MERIDIAN, ID Long Term Analysis (RUB Implemented year 2) PROJECTED INCOME Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Gross Rent Revenues 3.0% $ 376,800 $ 414,480 $ 455,928 $ 469,606 $ 483,694 $ 560,734 Vacancy Loss 5.0% $ (18,840) $ (20,724) $ (22,796) $ (23,480) $ (24,185) $ (28,037) Other $ - $ - $ - $ - $ - $ - Operating Income = $ 357,960 $ 393,756 $ 433,132 $ 446,126 $ 459,509 $ 532,697 Rent per Unit = $ 785 $ 864 $ 950 $ 978 $ 1,008 $ 1,168 Total Rent Per Unit = $ 9,420 $ 10,362 $ 11,398 $ 11,740 $ 12,092 $ 14,018 PROJECTED EXPENSES Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Cleaning & Maintenance 6.7% $ 23,983 $ 24,703 $ 25,444 $ 26,207 $ 26,993 $ 31,293 Insurance 2.0% $ 7,159 $ 7,374 $ 7,595 $ 7,823 $ 8,058 $ 9,341 Management Fee 6.0% $ 21,478 $ 22,122 $ 22,786 $ 23,469 $ 24,173 $ 28,023 Taxes [a] $ 41,184 $ 42,420 $ 43,692 $ 45,003 $ 46,353 $ 53,736 Utility Fees 6.0% $ 17,898 $ 4,000 $ 4,120 $ 4,244 $ 4,371 $ 5,067 Association Fees 0.0% $ - $ - $ - $ - $ - $ - Operating Expenses = 31.2% $ 111,702 $ 100,618 $ 103,637 $ 106,746 $ 109,948 $ 127,460 INCOME ANALYSIS Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Net Operating Income $ 246,258 $ 293,138 $ 329,495 $ 339,380 $ 349,561 $ 405,237 Mortgage Payment $ 146,360 $ 146,360 $ 146,360 $ 146,360 $ 146,360 $ 146,360 Improvements $ - $ - $ - $ - $ - $ - Cash Flow = $ 99,898 $ 146,778 $ 183,135 $ 193,020 $ 203,201 $ 258,877 Cap Rate (Purchase Price) 4.74% 5.64% 6.34% 6.53% 6.72% 7.79% Cap Rate (Market Value) 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Cash on Cash Return 2.60% 3.81% 4.76% 5.02% 5.28% 6.73% Return on Equity 2.77% 3.17% 3.36% 3.36% 3.36% 3.34% Value Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Market Value 5% CAP $ 4,925,158 $ 5,862,755 $ 6,589,896 $ 6,787,593 $ 6,991,221 $ 8,104,741 12

13 1300, MERIDIAN, ID Boise MSA Area Overview Quality of Life The Boise Metro area is home to 710,000 people (U.S. Census Bureau, Population Estimates Program) and a workforce of 346,000 within a 45-minute draw of Boise. The average commute time is 22 minutes. Commuting in the Valley The major interstate serving the Treasure Valley is I-84, running through the metro area s major cities Boise, Meridian, Kuna, Nampa and Caldwell. Daily commutes are easy for the Valley s population Hwy 20/26, and SH 21, 44 and 55 providing access. ValleyRide and ACHD Commuteride offer public transportation throughout the Treasure Valley. Cost of Living Based on averages for housing, utilities, health care, transportation, groceries, and other services, Idaho s cost of living is one of the lowest in the western states, according to the C2ER Cost of Living Index: Cost of living is 92.5 percent of the national average Consistently ranked by Forbes, The Wall Street Journal and Inc. Magazine as one of the best places in the U.S. to live and work Recreational Access With world-class golf courses, hiking, fishing, and mountain biking, the recreation opportunities are virtually unlimited within a 30-minute drive. Idaho has the most whitewater in the lower 48 states. Boise Foothills have more than 200 miles of acclaimed hiking and mountain biking trails. Bogus Basin Mountain Resort is 16 miles north of Downtown Boise with 2,600 acres of skiable terrain. Nearly 2,000 acres of parks 25-miles of greenbelt paths along the Boise River through 850 acres of parks A new Boise River Park with two state-of-the-art waveshapers. Kayaking, whitewater rafting, fly fishing and other water activities can be found throughout the Boise Valley and across the state on the Boise, Payette, Snake, and Salmon River systems. World-famous Sun Valley ski resort is only a three-hour ride to the northeast 13

14 1300, MERIDIAN, ID Boise MSA National Accolades 14

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18 CALL FOR OFFERS 1300, MERIDIAN, ID Call For Offers Terms All offers are due on or before Thursday, November 1, If an acceptable offer is received in advance of the date, Seller has the right to accept the offer. Seller will review all offers received, and reserves the right to accept, reject, or negotiate any offer. Seller will consider all terms. Submit all offers! 18

19 CALL FOR OFFERS 1300, MERIDIAN, ID Call For Offers BEST AND FINAL: Seller reserves the right to issue a best and final round of offers to the top bidders should there be tight competition between offers. This notification, if needed, will be done in writing to all bidders with clear terms of submittal. For any questions or concerns, please contact Mark Bottles or Brian Rallens. For more information please contact: Mark Bottles Cell: Direct: Fax: mbottles@markbottles.com Brian Rallens Cell: Direct: Fax: brallens@markbottles.com Mark Bottles Real Estate Services Phone: S. Bridgeway Place Eagle, Idaho