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HARVARD 6Offering Memorandum
1815
Ha
rvard
Ave |
SEATTLE
Investment Overview
Location
Financials
Comparables
Offer Guidelines
TABLE of CONTENTS
The information included in this document has been obtained from sources we believe to be reliable. While we do not doubt its accuracy, we have not verified it and cannot make any guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions, or estimates used are for example only and may not accurately represent the current or future performance of the property. The value of any proposed transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. © Pilot Ventures LLC.
INVESTMENT OVERVIEW
HARVARD 6 | 5
A 6-unit investment opportunity in the heart of Seattle’s Capitol Hill neighborhood.
HARVARD 6 | 6
Price $ 1,850,000
Units 6
Price Per Unit $ 308,333
Rentable SF 3,705
Price Per SF $ 499
Current Cap Rate 3.24 %
Market Cap Rate 5.21 %
Current GRM 19.2
Market GRM 14.8
Year Built 1900 / 1995
Parcel Number 600300-1235
Land SF 2,000
Zoning MR (M)
Construction Type Wood Frame
Plumbing Mixed (PEX and Unknown)
Parking None
Hot Water Individual
Heating Electric Wall
Roof Type Composition
$96,396PROFORMA NOI
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Interior Photos
LOCATION OVERVIEW
LAKEWASHINGTON
FREMONT
BALLARD
WALLINGFORDLAURELHURST
QUEEN ANNE
MAGNOLIA
PUGETSOUND
LAKEUNION
GREENLAKE
GREEN LAKE
CAPITOL HILL
LESCHI
DOWNTOWN
HARVARD 6 | 10
HARVARD 6 | 11
HARVARD 61815 Harvard Ave, Seattle, WA 98122
Harvard 6 provides residents with the coveted opportunity to live in the heart of Capitol Hill and
steps from Downtown Seattle. Located one block west of Broadway and two blocks north of the Pike/Pine
corridor, residents are tucked behind two of Capitol Hill’s most vibrant and popular destinations. Additionally,
the beautiful Cal Anderson Park is only two blocks away. The property is walking distance from Downtown
and South Lake Union with direct access to prominent Seattle employers including Amazon, Facebook,
Google, and many others.
Harvard 6 maintains its vintage appeal in combination with modern updates. Units have interior washer/
dryer, dual pane vinyl windows, updated electrical panels, electric wall heaters, and hardwood laminate
flooring. A new investor will be able to capitalize on cosmetically updating the interiors of the units and by
implementing a utility bill-back program. The MR zoning presents opportunity for future development.
The newly constructed Capitol Hill Station Light Rail is 2.5 blocks from Harvard 6, which provides direct
access to Downtown, the University of Washington, and other destinations. Light Rail already connects most
of Seattle, with a number of additions under construction, namely the Bellevue expansion scheduled for
2023, with Redmond, Lynnwood, and Federal Way coming the following year.
Subm
arke
t In
form
atio
n
seattle
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WALKSCORE.COM
99
EA
T +
DR
INK
1 Cal Anderson Park
2 Cascade Playground
3 Volunteer Park
4 Lake Union Park
5 Museum of History & Industry
6 Asian Art Museum
1 REI
2 Broadway Market
3 Capitol Hill Farmer’s Market
4 Safeway
5 Trader Joe’s
6 QFC
7 Walgreens
8 Urban Outfitters
1 Flow Fitness
2 PRO Sports Club
3 Evolv Fitness
4 24 Hour Fitness
5 The SweatBox Yoga
6 Orangetheory
7 Pacific Northwest Fitness
8 Morgan Zion Yoga
8894
RE
CR
EA
TIO
NS
HO
PP
ING
WE
LNE
SS
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3
CAPITOL HILL
1 Duke’s Seafood & Chowder
2 Daniel’s Broiler
3 Henry’s Tavern
4 Row House Cafe
5 Cactus
6 Feierabend
7 Single Shot
8 Itto’s Tapas
9 Deluxe Bar & Grill
10 Nacho Borracho
11 Highline Bar
12 Dick’s Drive-In
13 Rione XIII
14 Smith
15 Annapurna Cafe
16 Panera Bread
17 The Lookout
18 Poppy
19 Bait Shop
20 Hot Cakes
21 Tacos Chukis
22 Canterbury Ale House
23 Liberty
24 Coastal Kitchen
LAKE UNION
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CAPITOL HILL | Seattle | 98122
HARVARD 6 | 13
SUBMARKET TRENDS
Annual rent growth in Central Seattle has ticked up recently, resulting in levels higher than the historical average. Central’s monthly asking rents are well above the metro average but significantly below those of neighboring Downtown Seattle and Lake Union, providing relative affordability for those priced out of those neighborhoods. Central’s vacancy rate is tighter than the historical average and the metro average, and well below the rates in nearby submarkets like Lake Union and Downtown Seattle. Numerous tech companies have a presence nearby, and many are expanding rapidly. Amazon, Facebook and Google continue to expand their workforces within striking distance of the submarket, adding thousands of high-paying jobs.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3
Average Sale Price Continues to Increase Annually (averaging 4.9% YoY increase since Q1 2018)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3
Vacancy Continues Downward Trend (Currently 3.4%)
-
200
400
600
800
1,000
1,200
1,400
2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3
Consistent Trend of Strong Positive Absorption Despite Continued Supply
335,000
340,000
345,000
350,000
355,000
360,000
365,000
370,000
375,000
380,000
385,000
2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3
Sale Price/Unit in Capitol Hill Continues to Climb
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Seattle is a bustling metropolis, ranked by
the U.S. Census in the “Top 4 for Growth” for
five consecutive years. Since 2010, Seattle’s
population has increased 18.7%, bringing
an additional 114,412 residents to America’s
beloved Emerald City. Seattle has one of the
tightest office markets in the country and is
far less expensive than markets like New York,
San Francisco and Washington, DC. As a result
of a dynamic workforce driven by the tech
sector, many tech tenants have set up shop in
the region which is having an impact on the
multifamily sector boom.
It’s no stretch to appreciate how the lush,
green foliage and shimmering waters led a few
to Seattle. Unparalleled beauty and access to
the outdoors have helped attract some of the
best companies in the country. To the east and
west, the city is bordered by Lake Washington
and the Puget Sound. Out further, snowcapped
mountain ranges can be seen in every direction.
Home to a diverse and robust community, Seattle
is the cultural and business center of the Pacific
Northwest. The thriving tech sector has pushed
up the wages, software engineers averaging
$132,000/year, as well as the cost of rent.
Employment and population growth rates are
strong and stable, supported by the variety of
commerce and an ongoing demand for skilled
workers. Companies expanding in the metro
include Indeed, Lyft, Uber, Tableau (acquired by
Salesforce), Oracle, Apple and Best Buy. Apple
announced in June 2019 that it will expand its
Seattle workforce by 2,000 employees by 2022, up
from roughly 450 employees currently. Apple has
occupied space at Two Union Square in Seattle
CBD since 2015 and took all of the space at 333
Dexter in Lake Union, enough room for
seattle
Regi
onal
Info
rmat
ion
HARVARD 6 | 15
more than 4,000 employees. In addition, with the
highly anticipated relocation of Expedia in 2019
and the recent acquisition of Tableau by Salesforce
(Salesforce HQ2), Seattle continues to bring strong
talent into the core which fuels the absorption of
multifamily units.
Seattle was ranked the second-best city for
STEM workers by NerdWallet. The University of
Washington, a highly ranked school with a variety
of nationally recognized programs, prepares top-
tier students for roles at companies, such as the
Fred Hutchinson Cancer Research Center, the Allen
Institute and various cutting-edge tech companies.
Buzzing with new infrastructure, jobs and residents,
Seattle’s ever-growing metropolis is considered
home to many major employers who drive growth
and fuel the area’s economic climate including:
45,000 employees 4,500 employees
500 employees 235 employees320 employees
800 employees 525 employees700 employees
1,000 employees 800 employees1,000 employees
1,365 employees 1,186 employees1,250 employees
2,000 employees 2,000 employees2,000 employees
2,500 employees
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3.8 MILLION PEOPLE IN SEATTLE’S URBAN CORE
THAT’S OVER HALF THETOTAL POPULATION OF
WASHINGTON STATE
HARVARD 6 | 17
Expedia’s new $900 million HQ on Seattle’s waterfront will open in October 2019. The site will house 4,500 Seattle metropolitan area employees as the company shifts operations from their Eastside Bellevue location to Downtown Seattle. Approvals are in place to continue future expansion to 8,000 employees at the campus. Expedia, which spun out of Microsoft in 1999, is one of the world’s largest online travel companies. The brand umbrella includes Expedia, Hotels.com, Egencia, and Expedia Partner Solutions. The company’s annual growth increased 12% year-over-year to $11.2 billion in fiscal year 2018.
Google’s future third block brings it’s total office space in South Lake Union to nearly 930,000 square feet. The site will accomodate between 4,600 and 6,200 employees, using and industry standard ratio of 150 to 200 square feet per person. The company currently has 3,400 employees in the region. Seattle is Google’s third largest market behind its Mountain View, California HQ, and its operation in New York City. Google is a multinational technology company specializing in internet related services and products. The company had a healthy revenue growth of 23% to $136.7 billion in fiscal year 2018.
Facebook, with 2,000 employees in the Seattle core, recently expanded its footprint. In the Seattle region, Facebook’s future capacity could be somewhere between 13,500 to 18,000 employees. However, much of it’s lab and research space requires more employees per space, so the capacity is in the range of 10,000. Facebook allows people to stay connected with friends and family, and share and express what matters to them. The company’s 2019 Q1 revenue grew 26% to $14.9 billion during the quarter. Other products and services owned by Facebook include Instagram, WhatsApp, Oculus, and GrokStyle.
Apple’s expansion at 333 Dexter includes two 12-story office towers totaling 630,000 square feet, with room to house 4,200 employees. Seattle has become Apple’s hub for developing artificial intelligence and machine learning technologies. The company designs, manufactures, and markets mobile communication and media devices as well as personal computers, and sells a variety of related software, services, accessories, and third-party digital content and applications. Apple is the world’s largest technology company by revenue and became the first public U.S. company to be valued at over $1 trillion.
EXPANDING TECH COMPANIES IN SEATTLE
HARVARD 6 | 18
AMAZON’S SEATTLE GROWTH IMPACT
Jobs: Amazon has created more than 40,000 jobs in Seattle since 2010.
Postings: Amazon has created 10,819 new job postings as of July 2019,
with over 30% of the jobs in AWS, Amazon’s flagship cloud business.
Multifamily Demand: Amazon’s job growth has impacted
neighborhoods surrounding South Lake Union and the greater Puget
Sound region.
Evolving Skyline: The company’s growth, with 12 million square
feet leased or owned, has shaped the skyline of Seattle and driven
consistent demand in the multifamily sector.
AMAZON’S EMPLOYMENT TRENDS IN SEATTLE
5,000 8,500
11,000
16,000
21,000
27,500
38,000 40,000
45,000
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2010 2011 2012 2013 2014 2015 2016 2017 2018
HARVARD 6 | 19
WASHINGTON STATE IS HOME TO 11 COMPANIES ON THE
2019 FORTUNE 500 LIST
In total, Fortune 500 companies represent two-thirds of the U.S. GDP with $13.7 trillion in revenues, $1.1 trillion in profits, $22.6 trillion in market value, and employ 28.7 million people worldwide.
Washington state and the Puget Sound region are home to a diverse array of Fortune 500 companies covering a variety of industries, including:
Internet Services and Retailing
Technology
General Merchandisers
Food Services
Construction and Farm Machinery
Airlines
Transportation and Logistics
Forest and Paper Products
Industrial Machinery
647,500 employees
131,000 employees 194,000 employees
291,000 employees 28,000 employees
74,000 employees 24,500 employees
23,376 employees 17,400 employees
9,300 employees 24,000 employees
HARVARD 6 | 20
PUGETSOUND
SEATTLE 5
MINUTES
BELLEVUE 13
MINUTES
NORTHGATE 8
MINUTES
MERCERISLAND
13 MINUTES
WESTSEATTLE
12 MINUTES
KIRKLAND 16
MINUTES
BALLARD 12
MINUTES
FREMONT 6
MINUTES
INDUSTRIALDISTRICT
10 MINUTES
QUEENANNE
6 MINUTES
LAKEWASHINGTON
LOCAL ACCESS MAP
UNIVERSITYDISTRICT
7 MINUTES
FINANCIALS
HARVARD 6 | 22
UNIT Type Approx SF Current Rent Current /SF Market Rent Market /SF
A 1 Bd / 1 Bth 618 $ 1,150 $ 1.86 $ 1,800 $ 2.91
B 1 Bd / 1 Bth 618 $ 1,200 $ 1.94 $ 1,800 $ 2.91
C 1 Bd / 1 Bth 618 $ 1,570 $ 2.54 $ 1,850 $ 3.00
D 1 Bd / 1 Bth 618 $ 1,395 $ 2.26 $ 1,850 $ 3.00
E 1 Bd / 1 Bth 618 $ 1,450 $ 2.35 $ 1,850 $ 3.00
F 1 Bd / 1 Bth 618 $ 1,260 $ 2.04 $ 1,850 $ 3.00
3,705 $ 8,025 $ 2.17 $ 11,000 $ 2.97
* Unit square footages are estimated
Rent Roll
• Opportunity to lift average rents 37% to market
• Property combines modern updates with vintage appeal
• Located in the heart of Capitol Hill
HARVARD 6 | 23
Financial Analysis
CURRENT PRO FORMA
Gross Potential Rent $ 96,300 $ 132,000
Vacancy $ (3,852) 4.00 % $ (5,280) 4.00 %
NET RENTAL INCOME $ 92,448 $ 126,720
OTHER INCOME
Utility Billback $ 0 $ 5,400
Total Other Income $ 0 $ 5,400
EFFECTIVE GROSS INCOME $ 92,448 $ 132,120
EXPENSES
Property Taxes $ 12,517 $ 13,795
Insurance $ 2,406 $ 2,100
Utilities $ 6,518 $ 6,714
Maintenance / Repairs $ 4,500 $ 4,500
Property Management @ 5.00% $ 4,622 $ 6,606
Reserves $ 1,500 $ 1,500
Admin / Misc $ 509 $ 509
Total Expenses $ 32,572 $ 35,724
NET OPERATING INCOME $ 59,876 $ 96,396
• All units have Washer/Dryer
• Additional Property Updates: Hardi Plank siding, updated electrical panels, dual pane vinyl windows, electric wall heating, plumbing, laminate hardwood flooring
COMPARABLES
HARVARD 6 | 25
PROPERTY ADDRESS Building Name Units Price Sale Date Price/Unit Price/NRSF Cap Rate GIM Built / Reno
1 825-829 13th Ave Delaire Apartments 9 $3,100,000 6/12/19 $ 344,444 $ 568 3.5 % 18.8 1908 / 1984
2 1410 E Howell St Howell Apartments 11 $3,600,000 7/19/18 $ 327,273 $ 518 3.4 % 17.8 1957
3 2528 Queen Anne Ave N Sherene Apartments 5 $1,725,000 4/26/19 $ 345,000 $ 479 3.9 % - 1920 / 2017
4 2232 Franklin Ave E Vista View 8 $3,028,800 11/13/18 $ 378,600 $ 539 4.5 % - 1963
5 1210 E John St Price Manor Apartments 11 $3,050,000 1/16/19 $ 277,273 $ 452 3.7 % 17.4 1956
AVERAGES $ 334,518 $ 511 3.8 % 18.0
Sales Comparables
VISTA VIEW
2232 Franklin Ave E
PRICE MANOR APARTMENTS
1210 E John St
DELAIRE APARTMENTS
825-829 13th Ave
HOWELL APARTMENTS
1410 E Howell St
SHERENE APARTMENTS
2528 Queen Anne Ave N
1 2 3
4 5
HARVARD 6 | 26
LAKEUNION
CAPITOL HILL
DELAIRE APARTMENTS
825-829 13th Ave
HOWELL APARTMENTS
1410 E Howell St
SHERENE APARTMENTS
2528 Queen Anne Ave N
VISTA VIEW
2232 Franklin Ave E
PRICE MANOR APARTMENTS
1210 E John St
1
2
3
4
5
1
2
3
4
5
QUEEN ANNE
ELLIOTTBAY
HARVARD 6 | 27
PROPERTY ADDRESS Building Name Unit Type Unit SF Rent Rent /SF
1 411 Bellevue Ave E Capitol Place Apartments 1 Bd / 1 Bth 680 $ 2,250 $ 3.31
2 304 E Olive Pl The Celeste 1 Bd / 1 Bth 718 $ 1,995 $ 2.78
3 420 13th Ave E Normandy Arms 1 Bd / 1 Bth 640 $ 1,875 $ 2.93
4 1633 Bellevue Ave Capitol Steps 1 Bd / 1 Bth 658 $ 1,835 $ 2.79
5 1618 Bellevue Ave Hawthorne Apartments 1 Bd / 1 Bth 607 $ 1,995 $ 3.29
6 201 17th Ave E Buckley Apartments 1 Bd / 1 Bth 700 $ 1,845 $ 2.64
AVERAGES 667 $ 1,966 $ 2.95
Rent Comparables
CAPITOL STEPS
1633 Bellevue Ave
Classic
HAWTHORNE APARTMENTS
1618 Bellevue Ave
Classic
CAPITOL PLACE APARTMENTS
411 Bellevue Ave E
Renovated
THE CELESTE
304 E Olive Pl
Renovated
NORMANDY ARMS
420 13th Ave E
Renovated
1 2 3
4 5BUCKLEY APARTMENTS
201 17th Ave E
Original
6
HARVARD 6 | 28
CAPITOL PLACE APARTMENTS
411 Bellevue Ave E
THE CELESTE
304 E Olive Pl
NORMANDY ARMS
420 13th Ave E
CAPITOL STEPS
1633 Bellevue Ave
HAWTHORNE APARTMENTS
1618 Bellevue Ave
BUCKLEY APARTMENTS
201 17th Ave E
1
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3
45
6
CAPITOL HILL
OFFER GUIDELINES
Pilot Ventures is pleased to announce
All questions and inquiries regarding tours and this opportunity should be addressed to the Pilot Ventures representatives listed herein. Pilot Ventures’ team will be available to assist prospective investors with questions upon their review of the offering. Investors will receive advanced notification of the bid deadline via email. Offers should include, at a minimum, the following:
• The purchase price, contingencies and closing date;
• The amount of earnest money deposit;
• The source of capital for down payment;
• A detailed timeline for the transaction;
• A brief overview of the Buyer’s qualifications.
HARVARD 6 | 30
HARVARD 6 | 31
Built upon trust and experience, Pilot Ventures was founded by principals Casey Zejdlik and Jason Kono.
Specializing in multifamily investments and property management services, our focus on long-term client success is at the core of everything we do.
At Pilot Ventures, our experienced team of industry professionals offer more than 50 years of creative investment expertise. We engage with every client in a goal-oriented manner to enhance their portfolio and maximize results.
Together, we don’t just build equity— we build relationships.
BrokerageWhether you’re buying or selling, our experienced team of brokers will ensure you receive the best possible representation.
SyndicationOur firm’s financial expertise and professional management allows individuals, families, partnerships and trusts to invest in income producing properties without worrying about the day-to-day operations. We provide a full-service approach to every stage of your multifamily real estate investment.
ManagementManaging properties can be an overwhelming experience— in working with Pilot Ventures, we help streamline processes and systems to maximize your cash flow and ROI.
pilotNW.com
Brokerage / Syndication / Management
