AVAILABLE FOR SALE 4025 NORTH 40TH STREET | PHOENIX ...€¦ · The Tides at Arcadia is situated in the Arcadia lite neighborhood. Single family homes, in general, are selling between

Bryson [email protected] 602.912.3521

Todd [email protected] 602.474.9550

Ryan [email protected] 602.912.3526

3200 East Camelback Road, Suite 100 | Phoenix, Arizona 85018 | 602-956-7777 | www.leearizona.com

FOR MORE INFORMATION, PLEASE CONTACT:

AVAILABLE FOR SALE4025 NORTH 40TH STREET | PHOENIX, ARIZONA

TIDES AT ARCADIA



TIDES AT ARCADIA

TABLE OF CONTENTS

Property Information Offering Summary ................................................................................................................................................................................... 4

Property Overview .................................................................................................................................................................................. 5

Exterior Renovations ............................................................................................................................................................................... 6

Interior Renovations ................................................................................................................................................................................ 7

Location Neighborhood Amenities ...................................................................................................................................................................... 9

Aerial Overview ....................................................................................................................................................................................... 11

Why Phoenix?

Greater Phoenix Overview ..................................................................................................................................................................... 13

Financial Analysis Proforma ................................................................................................................................................................................................... 18

Operational Upsides ............................................................................................................................................................................... 19

Sales Comparables Comparables Map .................................................................................................................................................................................. 21

Sales Comparables ................................................................................................................................................................................. 22



TIDES AT ARCADIA

PROPERTY INFORMATION

Lee & Associates is pleased to present the opportunity to acquire The Tides at Arcadia apartments. The 49 unit complex is comprised of 48 one bedroom one bath units along with 1 three bedroom two bathroom house. The Tides at Arcadia is a mix of one and two two-story buildings built with block and concrete. OFFERING TERMS: All cash PRICE: Market Price PROPERTY TOURS: By appointment only.

OFFERING SUMMARY



TIDES AT ARCADIA

Units: 49 Year Built: 1966 remodeled 2017 Construction Type: Block, Concrete Style: Garden Roofs: Pitched Shingle

PROPERTY OVERVIEW



TIDES AT ARCADIA

• Exterior paint

• Recently replaced chiller

• Recently re-piped hot water and replaced tankless water heaters

• Pool area

• Laundry rooms

• BBQ area

• Fire pit

• Loungers for sunbathing

• Exterior signage

• Xeriscaping

• Faux teakwood accents

EXTERIOR RENOVATIONS



TIDES AT ARCADIA

• Stainless steel appliances • Refrigerator • Gas Range* • Microwave • Dishwasher*

• Stackable washer/dryer*

• Cabinetry

• Quartz countertops

• Faux wood flooring

• Contemporary lighting and plumbing fixtures

• Subway tile backsplashs

• Ceiling Fans

• Tub enclosures

• Arcadia style doors*

INTERIOR RENOVATIONS



TIDES AT ARCADIA



TIDES AT ARCADIA

LOCATION


Historic Arcadia Neighborhood

Scottsdale

NEIGHBORHOOD AMENITIES

NORTHEAST VIEW

The Tides at Arcadia is located in one of the most desirable submarkets in all of Arizona. This beautifully renovated 49 unit garden style community has been a great complement to the newly redeveloped intersection of 40th Street and Indian School Road.


TIDES AT ARCADIA


NORTHWEST VIEW


TIDES AT ARCADIA


The Tides at Arcadia is situated in the Arcadia lite neighborhood. Single family homes, in general, are selling between $550,000 to over $1,500,000. The Arcadia neighborhood is not only sought after for its large lots and lush landscape but is also part of the Scottsdale unified school district. Located just minutes away from the Biltmore financial district, Camelback corridor, Tempe Town Lake, Old Town Scottsdale and Phoenix Midtown CBD. These core locations are home to a large majority of real estate, insurance, start-up and white collar, knowledge based jobs in Metropolitan Phoenix.

AERIAL OVERVIEW


TIDES AT ARCADIA



TIDES AT ARCADIA

WHY PHOENIX?



TIDES AT ARCADIA

2

FAST-TRACK PERMITTING90 DAYS OR LESS THROUGHOUT THE

ONE OF THEIN THE WESTERN U.S.LOWEST LABOR COSTS

ECONOMYOF THE STATE’S

REPRESENTSGREATER PHOENIX

LARGESTLABOR POOL IN THE WEST

GE GRAPHIC REGIONAN EXCEEDINGLY ACCESSIBLE

ACCESS TO CAPITAL AND A

RIGHT-TO-WORK STATE

OPERATING ENVIRONMENT

24-HOUR PERMITS & INSPECTIONS

GREATER PHOENIX REGION

Greater Phoenix is fast-paced, dynamic, and possesses an unapologetic willingness to get things done.

GREATER PHOENIX ECONOMIC COUNCIL1

“ Arizona offers an

exciting opportunity to

address the increasing

needs of our clients as

our business continues

to grow. This step will

provide us with access

to significant talent

pools and a strategic

location that will help

us directly serve

our clients.”

REGIONAL OVERVIEW

Greater Phoenix is comprised of 23 distinct

communities cooperating as one region. In a

state that recently celebrated its centennial,

Greater Phoenix is one of the fastest growing and

dynamic metropolitan regions in the country. The

region has a pioneering spirit and welcoming

attitude – toward people and business. When

you expand or relocate your business here,

you join a community rich with opportunity,

innovation and economic vibrancy. - FREDERICK H. (RICK) WADDELL

CEO, Northern Trust

Information courtesy of the Greater Phoenix Economic Council (GPEC) | gpec.org



TIDES AT ARCADIA

The population of Greater

Phoenix is 4.4 million and

is expected to grow to

nearly 6.4 million in the

next 20 years.

Projected employment

growth over the next

decade is 15.15%

compared to the national

projected growth of 9.42%.

A relatively young region,

Greater Phoenix has a

median age of 35.4 – two

years younger than the

average age nationwide.


HUMAN CAPITAL + EDUCAT IONAL ASSETS

ARIZONA HAS AN EXTREMELY COMPETITIVE WORKFORCE IN REGARDS TO TRAINING, QUALITY AND AVAILABILITY OF WORKERS, WHILE MAINTAINING ONE OF THE LOWEST COSTS FOR LABOR IN THE NATION.

MATURE TALENT WORKFORCE PIPELINE

8

NUMBER OF STUDENTS ENROLLED (GRADUATE AND UNDERGRADUATE)

Arizona State University 83,301

Grand Canyon University 75,200

Maricopa Community Colleges 265,000

Northern Arizona University 25,590

University of Arizona 42,236

EDUCATIONAL ASSETS:A CONTINUOUS STREAM OF TALENTED EMPLOYEES

Arizona State University, Maricopa Community Colleges, Grand Canyon University, Northern Arizona University, University of Arizona and University of Phoenix are among more than 50 universities and other institutions of higher learning that prepare the region’s workforce.

THUNDERBIRD SCHOOL OF GLOBAL MANAGEMENT:

ARIZONA STATE UNIVERSITY:

EDUCATES AND TRAINS 265,000 INDIVIDUALS ANNUALLY

RANKED #1 INTERNATIONAL FULL-TIME MBA

MARICOPA COMMUNITY COLLEGES:

#5 IN THE NATION FOR BEST-QUALIFIED GRADUATES (Wall Street Journal)

#1 MOST INNOVATIVE SCHOOL IN THE U.S. - 2016, 2015 (US News & World Report)

70% OF ASU GRADUATES REMAIN IN THE STATE AFTER GRADUATION

STUDENT POPULATION OF 80,000+ ACROSS FIVE REGIONAL CAMPUSES



TIDES AT ARCADIA

Available sites, robust power, high-speed fiber and the low chance for natural disasters positions Greater Phoenix as a top choice for data centers and advanced business services operations.

# OF STUDENTS ENROLLED IN BUSINESS DEGREE PROGRAMS (Graduate and Undergraduate):

Arizona State University 8,637 (undergrad only)





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MISSION CRITICAL & ADVANCED BUSINESS SERVICES


6TH LARGEST CONCENTRATION OF DATA CENTERS NATIONALLY

TOP 5 NATIONALLY FOR TECH JOB GROWTH

PALO VERDE NUCLEAR POWER PLANT IS THE LARGEST NUCLEAR POWER PLANT IN THE U.S.

EXCELLENT CONNECTIVITY TO MAJOR METROPOLITAN MARKETS

8

NUMBER OF STUDENTS ENROLLED (GRADUATE AND UNDERGRADUATE)

Arizona State University 83,301





EDUCATIONAL ASSETS:A CONTINUOUS STREAM OF TALENTED EMPLOYEES

Arizona State University, Maricopa Community Colleges, Grand Canyon University, Northern Arizona University, University of Arizona and University of Phoenix are among more than 50 universities and other institutions of higher learning that prepare the region’s workforce.

THUNDERBIRD SCHOOL OF GLOBAL MANAGEMENT:

ARIZONA STATE UNIVERSITY:

EDUCATES AND TRAINS 265,000 INDIVIDUALS ANNUALLY

RANKED #1 INTERNATIONAL FULL-TIME MBA

MARICOPA COMMUNITY COLLEGES:

#5 IN THE NATION FOR BEST-QUALIFIED GRADUATES (Wall Street Journal)

#1 MOST INNOVATIVE SCHOOL IN THE U.S. - 2016, 2015 (US News & World Report)

70% OF ASU GRADUATES REMAIN IN THE STATE AFTER GRADUATION

STUDENT POPULATION OF 80,000+ ACROSS FIVE REGIONAL CAMPUSES



TIDES AT ARCADIA

Greater Phoenix encompasses distinct communities, each

with its own identity and assets. Collectively, they offer vast

opportunity. Because you don’t have to be entrenched in the

business or social hierarchy of the region to succeed, Greater

Phoenix offers everyone the chance to thrive and make a

significant impact.

· More than 300 days of sunshine annually

· More than 325 golf courses

· Drive to beaches or the mountain pines within hours

· The cost of living is 77% cheaper on average than leading California markets

· Median household income of $53,310

· Median home sale is $217,900

· Effective property tax rate of 1.25%

· Personal income tax rate of 2.59% to 4.54%

· Average commute time is 24.7 minutes

LIFESTYLE

AFFORDABLE WITH AN

INCLUSIVE culture

Phot

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tok,

Flic

kr.c

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THOUSANDS OF ATTRACTIONS & EVENTSFLOURISHING ARTS & CULTURE SCENE PROFESSIONAL SPORTS

HEARD MUSEUM Photo Credit: Paulina Pineda, Flickr.com

BARRETT-JACKSON CLASSIC CAR AUCTIONPhoto Credit: DeusXFlorida, Flickr.com

NFL ARIZONA CARDINALS Photo Credit: Chris Cameron, Flickr.com

PHOENIX ART MUSEUM Photo Credit: Fuzzy Gerdes, Flickr.com

DESERT BOTANICAL GARDEN Photo Credit: Loren Javier, Flickr.com

NHL ARIZONA COYOTES Photo Credit: Sergei Scurfield, Flickr.com

MUSICAL INSTRUMENT MUSEUM Photo Credit: Thomas Quine, Flickr.com

PHOENIX ZOO Photo Credit: Stefanie Carson, GPEC

NBA PHX SUNS & WNBA PHX MERCURY Photo Credit: Keith Allison, Flickr.com

GAMMAGE AUDITORIUM Photo Credit: Nick Bastian, Flickr.com

ARTLINK FIRST FRIDAYS Photo Credit: Chanel Wheeler, Flickr.com

MLB AZ DIAMONDBACKS & SPRING TRAINING Photo Credit: Ken Lund, Flickr.com

MESA ARTS CENTER Photo Credit: David Crummey, Flickr.com

MORE THAN 30 CRAFT BREWERIES Photo Credit: Kevin Dooley, Flickr.com

NASCAR AT PHX INTERNATIONAL RACEWAY Photo Credit: Hans Enderle, Flickr.com

24



TIDES AT ARCADIA

FINANCIAL ANALYSIS


Unit Type # of Units SizeSeptember

Rent RollToday's

Market RentYear One

RentΔ Septmeber to

Today's Rent

1Bed/1Bath 15 450 ($ 860) ($ 915) ($ 961) 6.4%

1Bed/1Bath 25 500 ($ 870) ($ 915) ($ 961) 5.2%

1Bed/1Bath 6 595 ($ 920) ($ 935) ($ 982) 1.6%

1Bed/1Bath 1 650 ($ 975) ($ 975) ($ 1,024) 0.0%

1Bed/1Bath 1 825 ($ 1,150) ($ 1,150) ($ 1,208) 0.0%

3Bed/2Bath 1 1700 ($ 1,925) ($ 2,000) ($ 2,100) 3.9%

Total/Avg: 49 531 ($ 902) ($ 946) ($ 993) 4.9%

Gross Annual Total ($ 530,640) ($ 556,020) ($ 583,821)

Gross Scheduled Rent Septmeber Rent Roll Todays Market Rent Year One Rent = Today + 5%RUBS $20 Per month on select units $20 Per Month $80 Per MonthMisc. Income T-6 T-6 T-6 + 3%Expenses Estimated Estimated Estimated + 3%

Income Summary September Rent Roll Today's Market Rent Year One RentValue Per Unit Percentage Value Per Unit Percentage Value Per Unit Percentage

GPRI/Economic Rent ($ 530,640) ($ 10,829) ($ 556,020) ($ 11,347) ($ 583,821) ($ 11,915)

Less: Vacancy Loss ($ (26,532) ($ (541) 5.00% ($ (27,801) ($ (567) 5.00% ($ (29,191) ($ (596) 5%

Less: Loss to Lease/ Bad Debt ($ (10,613) ($ (217) 2.00% ($ (11,120) ($ (227) 2.0% ($ (11,676) ($ (238) 2.0%

Net Rental Income ($ 493,495) ($ 10,071) 7.00% ($ 517,099) ($ 10,553) 7.00% ($ 542,954) ($ 11,081) 7.00%

RUBS ($ 4,000) ($ 82) ($ 11,172) ($ 228) ($ 44,688) ($ 912)

Other Income ($ 18,000) ($ 367) ($ 18,000) ($ 367) ($ 18,540) ($ 378)

Total Other Income ($ 22,000) ($ 449) ($ 29,172) ($ 595) ($ 63,228) ($ 1,290)

Effective Gross Income (EGI) ($ 515,495) ($ 10,520) ($ 546,271) ($ 11,148) ($ 606,182) ($ 12,371)

Expense SummaryValue Per Unit Percentage Value Per Unit Percentage Value Per Unit Percentage

Utility Expense ($ 38,732) ($ 790) 8% ($ 38,732) ($ 790) 8% ($ 39,894) ($ 814) 8%

Repairs & Maintenance ($ 24,500) ($ 500) 5% ($ 24,500) ($ 500) 4% ($ 25,235) ($ 515) 4%

Contract Services ($ 7,895) ($ 161) 2% ($ 7,895) ($ 161) 1% ($ 8,132) ($ 166) 1%

Leasing & Marketing ($ 8,000) ($ 163) 2% ($ 8,000) ($ 163) 1% ($ 8,240) ($ 168) 1%

Management ($ 20,620) ($ 421) 4% ($ 20,620) ($ 421) 4% ($ 21,238) ($ 433) 4%

Administrative Expenses ($ 20,000) ($ 408) 4% ($ 20,000) ($ 408) 4% ($ 20,600) ($ 420) 3%

Insurance ($ 10,946) ($ 223) 2% ($ 10,946) ($ 223) 2% ($ 11,274) ($ 230) 2%

Property Taxes ($ 7,609) ($ 155) 1% ($ 7,609) ($ 155) 1% ($ 7,837) ($ 160) 1%

Payroll ($ 24,500) ($ 500) 5% ($ 24,500) ($ 500) 4% ($ 25,235) ($ 515) 4%

Expenses Before Reserves ($ 162,802) ($ 3,322) 27% ($ 162,802) ($ 2,822) 26% ($ 167,686) ($ 2,907) 25%

Replacement Reserves ($ 12,250) ($ 250) 2% ($ 12,250) ($ 250) 2% ($ 12,250) 250 2%

Total Expenses ($ 175,052) ($ 3,572) 29% ($ 175,052) ($ 3,072) 28% ($ 179,936) ($ 3,157) 27%

Value Per Unit Percentage Value Per Unit Percentage Value Per Unit Percentage

Net Operating Income ($ 340,443) ($ 6,948) 71% ($ 371,219) ($ 7,576) 72% ($ 426,246) ($ 8,699) 73%

PROFORMA


TIDES AT ARCADIA


OPERATIONAL UPSIDE

The Tides at Arcadia possess two obvious operational upside opportunities. Being that the community has recently reached stabilization, the rent levels currently being achieved are arguably at a lower level than area rent comps due to lease up. We believe that the release rate will be $35-$65 more than current levels. Additionally, RUBS (electricity, water, sewer, trash) billing was recently implemented. Currently only a handful of tenants pay approximately $20 per month for RUBS (electricity, water, sewer, trash). Our research shows that many similar communities are charging between $80 and $130 per month for similar RUBS billing. The combination of increased rental income and rub income for second generation leases will provide strong operational upside for potential investors. Assuming the lower, more conservative assumptions for release rental rates ($35 increase) and RUB rates ($80 increase), monthly collections will increase by approximately $5500 per month. This operational improvement execution will move the value up by approximately $1.2M assuming a 5.5 CAP rate.

Another potential additional income stream would be via the addition of unit washer and dryers. Market comps reflect additional rent of $50 for apartments that have in unit washers and dryers vs. properties the offer laundry rooms.

LOSS TO LEASE GAIN RUB INCOME EXPECTED RENT GROWTH

Current achieved rental rates average approx $941 a month and the average rent per unit for the September 2017 rent roll was approximately $900 a month. Moving all rates on turnover/lease expiration to the “Today’s Market Rent” will produce and additional ±$22,932 in income.

The charging of RUB (electric, water, sewer and trash) Income has effectively not been implemented due to the property’s recent lease up. Based on similar properties and sub-market comparable’s, a monthly RUB charge of $80 per month is arguably very achievable. Applying this to all units equates to an additional ±$47,040 in annual income.

Forecasts for rent rate growth range from 5% to 7.4% (sources: Freddie Mac, REIS, Moody’s Analytics and Yardi Matrix). Using a conservative growth rate of 5%, the annual income increases by approximately ±$27,666.


TIDES AT ARCADIA



TIDES AT ARCADIA

SALES COMPARABLES


COMPARABLES MAPSEE NEXT PAGE FOR DETAILED SALES COMPS


TIDES AT ARCADIA


1 2 3 4 5

6 7 8 9 10 11

12 13 14 15 16 17

4025 N 40th Street Phoenix AZ, 85018• Units: 49• Year built: 1966• Sale date: TBD• Price: Market Price• Price/unit: Market Price• Comments: Renovated 2017

4020 N 11th StreetPhoenix, AZ 85014• Units: 14• Year built: 1962• Sale date: 5/15/2017• Price: $2,240,000• Price/unit: $160,000• Comments: Renovated 2015


4120 N 22nd StreetPhoenix, AZ 85016• Units: 11• Year built: 1986• Sale date: 7/11/2017• Price: $1,980,000• Price/unit: $180,000• Comments: Renovated 2017


1939 E Missouri AvePhoenix, AZ 85016• Units: 20• Year built: 1958• Sale date: 8/26/2017• Price: $3,000,000• Price/unit: $150,000• Comments: Renovated 2015

1133 West 5th StreetTempe, AZ 85281• Units: 44• Year built: 1973• Sale date: 6/20/2017• Price: $7,500,000• Price/unit: $170,000• Comments: Renovated 2015

320 W PasadenaPhoenix, AZ 85013• Units: 20• Year built: 1966• Sale date: 6/2/2017• Price: $3,400,000• Price/unit: $170,000• Comments: Renovated 2016

7325 E Belleview StreetScottsdale, AZ 85257• Units: 20• Year built: 1969• Sale date: 8/23/2016• Price: $3,035,000• Price/unit: $151,750• Comments: Renovated 2015

4231-4237 N 27th StreetPhoenix, AZ 85016• Units: 20• Year built: 1966• Sale date: 6/2/2017• Price: $3,400,000• Price/unit: $170,000• Comments: Renovated 2016

4128 N 22nd StreetPhoenix, AZ 85016• Units: 11• Year built: 1970• Sale date: 4/3/2017• Price: $1,578,760• Price/unit: $143,523• Comments: Renovated 2016

1402 E Bethany Home RoadPhoenix, AZ 85014• Units: 35• Year built: 1978• Sale date: 5/25/2016• Price: $6,299,000• Price/unit: $175,971• Comments: Renovated 2015



605 W Pierson StPhoenix, AZ 85013• Units: 12• Year built: 1958• Sale date: 4/13/2016• Price: $1,850,000• Price/unit: $154,166• Comments: Renovated 2015

3416 North 37th StreetPhoenix, AZ 85018• Units: 12• Year built: 1960• Sale date: 5/18/2017• Price: $2,337,500• Price/unit: $194,781• Comments: Renovated 2016

6501 N 3rd AvePhoenix, AZ 85013• Units: 16• Year built: 1977• Sale date: 12/19/2016• Price: $2,463,158• Price/unit: $153,947• Comments: Renovated 2015

6825 E 4th StreetScottsdale, AZ 85251• Units: 33• Year built: 1960• Sale date: 12/22/2015• Price: $6,050,000• Price/unit: $183,333• Comments: Renovated 2015


TIDES AT ARCADIA

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74



TIDES AT ARCADIA

FOR MORE INFORMATION, PLEASE CONTACT:

Bryson [email protected] 602.912.3521

Todd [email protected] 602.474.9550

Ryan [email protected] 602.912.3526

Documents

AVAILABLE FOR SALE 4025 NORTH 40TH STREET | PHOENIX ...€¦ · The Tides at Arcadia is situated in the Arcadia lite neighborhood. Single family homes, in general, are selling between