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La Sombra311 Huachuca Blvd., Huachuca City AZ 85616
Waller Group LLC
O F F E R I N G M E M O R A N D U M
La SombraCONTENTS
Exclusively Marketed by:
Logan Waller
(214) [email protected]
We obtained the following information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or otherconditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent the current or future performance of the property. You and your tax and legal advisors should conduct yourown investigation of the property and transaction.
01 Property Description Property Features 4 Property Images 5 Maps 8 Location Summary 9
02 Financial Analysis Income & Expense Analysis 10 Financial Summary 11 Cash Flow 12 Unit Mix Summary 13
03 Rent Comps Rent Comparables Summary 14 Rent Comparables Map 19
04 Demographics Demographics 20 Demographic Charts 21
05 Additional Information Offering Procedures 23
La Sombra Confidentiality and Disclaimer | 03
Copyright © 2019 CREOP, LLC. All Rights Reserved.
La Sombra Property Features | 04
PROPERTY OVERVIEWUNITS 30BUILDING SF 11,550AVERAGE SF/UNIT 430LOT SF 51,027YEAR BUILT 1970 | 1972CAP RATE 11.00%CURRENT NOI $98,980PER FORMA NOI $120,333PROPERTY TYPE Value AddROOF MATERIAL Elastromeric CoatingROOF CONDITION Recoated Every 3 YearsPARKING LOT Sealed in 2007WASHER/DRYER Community
MechanicalHVAC Evaporative Coolers | Individual UnitsWATER HEATER (1 BEDROOMS) Individual UnitsWATER HEATER (STUDIO) Shared between 3-4 UnitsGAS Individually metered for 1 BedroomsUTILITIES Landlord
EducationDISTRICT Tombstone Unified DistrictPRE-K - 8TH Huachuca City School | 0.31 MiHIGH SCHOOL Tombstone High School | 17.34 Mi
LOCATION
Huachuca City is an 1,800 resident bedroom community of Sierra Vista(43,000 Residents) located in the far southeast corner of Arizona. Tusconis located 68 miles to the North West of Huachuca City. The largestindustries in the city are Health Care and Retail Trade. The medianhousehold income for Cochise county is $45,974 and crime in the city isincredibly low scaling a 1/10 on a national scale. Located across thestreet of La Sombra is a Circle K with a Dollar General neighboring theproperty. For groceries, restaurants, and night life; the residents ofHuachuca City take the 5.5 mile drive down highway 90 to Sierra Vista .Fort Huachuca is an important economic driver for the cities with over12,000 civilian and military employees. Sierra Vista is also the regionalhub for health care and education with a top 10 community college and alevel 3 trauma center.
- Circle K | 276 ft.
- Dollar General | 463 ft.
- Sierra Vista | 5.5 mi.
- Fort Huachuca | 6.6 Mi.
- Tucson | 68 Mi.
AMENITIES
- Community Washers/Dryers
- All Utilities Paid
La Sombra Property Features | 04
La Sombra Property Images | 05
La Sombra Property Images | 06
La Sombra Property Images | 07
La Sombra Maps | 08
La Sombra Location Summary | 09
La Sombra Income & Expense Analysis | 10
INCOME CURRENT PRO FORMA
Gross Potential Rent $180,300 $180,540
Other Income $3,088 $3,088
Gross Potential Income $183,388 $183,628
Less: General Vacancy $14,158 $10,832
Less: Loss to Lease $7,692
Effective Gross Income $161,538 $172,796
Less: Expenses $62,558 $52,463
Net Operating Income $98,980 $120,333
EXPENSES CURRENT PRO FORMA
Administrative $224 $6,710 $224 $6,710
Advertising $47 $1,414 $47 $1,414
Management $346 $10,368
Utilities $798 $23,931 $80 $2,393
Repairs & Maintenance $499 $14,960 $499 $14,960
Real Estate Taxes $239 $7,167 $275 $8,242
Insurance $279 $8,376 $279 $8,376
Total Operating Expense $2,085 $62,558 $1,749 $52,463
Expense / SF $5.41 $4.54
% of EGI 38.73 % 30.36 %
Per Unit Per Unit
REVENUE ALLOCATION
DISTRIBUTION OF EXPENSES
$/Unit $/Ft $/Unit $/FtPotential Gross Income $180,300 6,010 $15.61 $180,540 6,018 $15.63
Economic Vacancy (14,158) 7.9% (10,832) 6%Loss to Lease (7,692) 4.3% 0 0%
Total Rental Income 158,450 5,282 $13.72 169,708 5,657 $14.69Other Income 3,088 103 $0.27 3,088 103 $0.27
Administrative $6,709.61 $223.65 $0.58 $6,709.61 $223.65 $0.58Bad Debt $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Advertising $1,414.02 $47.13 $0.12 $1,414.02 $47.13 $0.12Repairs & Maintenance $14,959.97 $498.67 $1.30 $14,959.97 $498.67 $1.30Contract Services $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Payroll $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Utilities $23,931.43 $797.71 $2.07 $2,393.14 $79.77 $0.21Total Variable Expenses $47,015.03 $1,567.17 $4.07 $25,476.74 $849.22 $2.21Real Estate Taxes $7,166.94 $238.90 $0.62 $8,241.98 $274.73 $0.71Insurance $8,375.74 $279.19 $0.73 $8,375.74 $279.19 $0.73Management Fee - 6% $0.00 $0.00 $0.00 $10,367.71 $345.59 $0.90Total Fixed Expenses $15,542.68 $518.09 $1.35 $26,985.43 $899.51 $2.34
$98,980 11.00% $120,333 13.37%Debt Service ($43,486) ($43,486)
Net Cash Flow $55,494 25.12% $76,847 34.78%Principal Reduction ($9,254) ($9,254)
Return On Equity $75,063 33.97% $86,523 39.16%
1 1
2
1 12
Pro Forma
December 2018T-12 Pro Forma
2,085 $4.54$5.42
$5,760$172,795
Proposed Loan at 75% LTV, 5.25% Interest, 10 Yr Term, 30 Yr AmortExplanation of Financial Analysis
Current
INCOME
$14.96
Economic Vacancy calculated using T-12 Effective Income dated December 2018
Expenses Expenses
Increased Pro Forma Rents based on survey of comparables
Decreased Economic Vacancy to 6% based on Market Survey
Cap Rate1,749
Net Operating Income
EXPENSES
Cap Rate$52,462
Income
All Expenses taken from Trailing 12 month P&L dated December 2018 Increased Management Fee to 6% of EGIIncreased Taxes 15%
Income
Effective Gross Income $161,538 5,385 $13.99
Total Expenses $62,558
La Sombra Financial Summary | 11
Unlevered IRR 21.61%Levered IRR 47.82%
Y1 $/Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Potential Gross Income $6,014 $180,420 $180,540 $185,956 $191,535 $197,281 $203,199 $209,295 $215,574 Vacancy/Loss to Lease/Concessions 6.9% (12,496) (10,832) (11,157) (11,492) (11,837) (12,192) (12,558) (12,934) Other Revenue $103 3,088 3,211 3,339 3,473 3,612 3,756 3,907 4,063Effective Gross Income $5,700 $171,011 $172,919 $178,138 $183,516 $189,056 $194,764 $200,644 $206,703
Total Variable Expenses $849 25,477 26,241 27,028 27,839 28,674 29,535 30,421 31,333 Total Fixed Expenses $900 26,985 27,795 28,629 29,488 30,372 31,284 32,222 33,189Total Operating Expenses $1,749 $52,462 $54,036 $55,657 $57,327 $59,047 $60,818 $62,643 $64,522
Net Operating Income $3,952 $118,549 $118,883 $122,481 $126,189 $130,009 $133,946 $138,002 $142,181
Debt Service ($43,486) ($43,486) ($43,486) ($43,486) ($43,486) ($43,486) ($43,486) ($43,486)Net Cash Flow $75,063 $75,397 $78,995 $82,703 $86,523 $90,460 $94,516 $98,695Return on Equity (Cash-on-Cash) 33.97% 34.13% 35.75% 37.43% 39.16% 40.94% 42.78% 44.67%Debt Service Coverage 2.73 2.73 2.82 2.90 2.99 3.08 3.17 3.27Unleveraged IRR 103.2% 49.7% 36.4% 30.2% 26.7% 24.4% 22.8% 21.6%Leveraged IRR 392.3% 141.0% 93.2% 73.1% 62.3% 55.6% 51.0% 47.8%
Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8Rental Inflation 0.07% 0.07% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%Vacancy Rate 6.93% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%Other Income Inflation 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%Expense Inflation 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
$875,000Purchase Price
La Sombra Cash Flow | 12
Number% of Total
Units Effective Market Pro FormaUnit Type of Units SF Effective Rent Market Rent Pro Forma Rent $/SF $/SF $/SF
Small studio 3 250 10% $410 $425 $425 $1.64 $1.70 $1.70
Med. Studio 10 300 33% $465 $480 $480 $1.55 $1.60 $1.60
Large studio 7 360 23% $479 $490 $490 $1.33 $1.36 $1.36
One bedroom 9 520 30% $509 $550 $550 $0.98 $1.06 $1.06
Totals 30 11,550 $14,384 $15,025 $15,025
Averages 385 $479 $501 $501 $1.25 $1.30 $1.30
Annual Rent $172,608 $180,300 $180,300
La Sombra Unit Mix Summary | 13
La Sombra Rent Comparables Summary | 14
1
Highland Woods555 N 7th St, Sierra Vista, AZ 85635
Property SummaryUNITS 140YEAR BUILT 1984
Notes Studio/1 bed used**
Unit Mix and Rent ScheduleUnit Mix # of Units Square Feet Rent Rent per SF
1 bd + 1 ba 80 498 $625 $1.252 bd + 1 ba 16 675 $677 $1
Studio + 1 ba 32 367 $539 $1.46Total/Avg 128 513 $614 $1.24
Unit Mix Breakdown
Comparables Rent Analysis
1 bd / 1 ba $509 - $690
LOW HIGH
Studio / 1 ba $410 - $550
LOW HIGH
La Sombra Rent Comparables Summary | 15
2
Falcon Court Apartments355 N 7th St., Sierra Vista, AZ 85635
Property SummaryUNITS 112YEAR BUILT 1985
Notes * Studio and 1/1
Unit Mix and Rent ScheduleUnit Mix # of Units Square Feet Rent Rent per SF
1 bd + 1 ba 40 476 $550 $1.152 bd + 1 ba 24 676 $610 $0.902 bd + 2 ba 20 763 $645 $0.84
Studio + 1 ba 28 440 $495 $1.12Total/Avg 112 589 $575 $1
Unit Mix Breakdown
Comparables Rent Analysis
1 bd / 1 ba $509 - $690
LOW HIGH
Studio / 1 ba $410 - $550
LOW HIGH
La Sombra Rent Comparables Summary | 16
3
Desert Sands Apartments306 1st St, Huachuca City, AZ 85616
Property SummaryUNITS 11
Unit Mix and Rent ScheduleUnit Mix # of Units Square Feet Rent Rent per SF
1 bd + 1 ba 11 625 $535 $0.85Total/Avg 11 625 $535 $0.85
Unit Mix Breakdown
Comparables Rent Analysis
1 bd / 1 ba $509 - $690
LOW HIGH
La Sombra Rent Comparables Summary | 17
4
Westwood Villiage Apartments201 N Garden Ave., Sierra Vista, AZ 85635
Property SummaryUNITS 94YEAR BUILT 1963
Notes Studio for comp
Unit Mix and Rent ScheduleUnit Mix # of Units Square Feet Rent Rent per SF
1 bd + 1 ba 36 642 $690 $1.072 bd + 1 ba 35 911 $763 $0.83
Studio + 1 ba 23 400 $550 $1.37Total/Avg 94 651 $668 $1.09
Unit Mix Breakdown
Comparables Rent Analysis
1 bd / 1 ba $509 - $690
LOW HIGH
Studio / 1 ba $410 - $550
LOW HIGH
La Sombra Rent Comparables Summary | 18
S
La Sombra311 Huachuca Blvd., Huachuca City, AZ 85616
Property SummaryUNITS 30OCCUPANCY 92.00 %
Unit Mix and Rent ScheduleUnit Mix # of Units Square Feet Rent Summary Rent per SF
Studio / 1 ba 3 250 $410 $1.64Studio / 1 ba 10 300 $465 $1.55Studio / 1 ba 7 360 $479 $1.331 bd / 1 ba 10 520 $509 $0.981 bd / 1 ba 1 600 $570 $0.95
Totals/Averages 31 389 $480 $1.31
Unit Mix Breakdown
Comparables Rent Analysis
Studio / 1 ba $410 - $550
LOW HIGH
Studio / 1 ba $410 - $550
LOW HIGH
Studio / 1 ba $410 - $550
LOW HIGH
1 bd / 1 ba $509 - $690
LOW HIGH
1 bd / 1 ba $509 - $690
LOW HIGH
La Sombra Rent Comparables Map | 19
# Property Name Address CityS La Sombra 311 Huachuca Blvd. Huachuca City1 Highland Woods 555 N 7th St Sierra Vista2 Falcon Court Apartments 355 N 7th St. Sierra Vista3 Desert Sands Apartments 306 1st St Huachuca City4 Westwood Villiage Apartments 201 N Garden Ave. Sierra Vista
La Sombra Demographics | 20
POPULATION 1 MILE 5 MILE 10 MILE
2000 Population 1,362 9,599 45,961
2010 Population 1,365 8,250 53,346
2018 Population 1,352 8,001 53,615
2023 Population 1,320 7,859 52,711
2018 African American 87 816 4,601
2018 American Indian 19 102 651
2018 Asian 27 223 2,131
2018 Hispanic 336 1,825 12,694
2018 White 1,019 5,842 39,227
2018 Other Race 108 470 3,532
2018 Multiracial 81 494 3,179
2018-2023: Population: Growth Rate -2.40 % -1.80 % -1.70 %
2018 HOUSEHOLD INCOME 1 MILE 5 MILE 10 MILE
less than $15,000 103 259 2,362
$15,000-$24,999 56 222 1,823
$25,000-$34,999 73 332 2,038
$35,000-$49,999 104 469 3,165
$50,000-$74,999 111 513 4,130
$75,000-$99,999 69 210 3,035
$100,000-$149,999 45 176 2,959
$150,000-$199,999 13 76 1,004
$200,000 or greater 9 44 765
Median HH Income $42,262 $44,598 $55,579
Average HH Income $55,165 $58,418 $72,717
HOUSEHOLDS 1 MILE 5 MILE 10 MILE
2000 Total Housing 645 2,963 19,395
2010 Total Households 582 2,263 20,913
2018 Total Households 583 2,302 21,280
2023 Total Households 572 2,247 20,926
2018 Average Household Size 2.32 2.74 2.40
2000 Owner Occupied Housing 348 1,313 9,831
2000 Renter Occupied Housing 211 1,345 7,577
2018 Owner Occupied Housing 340 1,288 12,303
2018 Renter Occupied Housing 243 1,014 8,977
2018 Vacant Housing 112 399 2,779
2018 Total Housing 695 2,701 24,059
2023 Owner Occupied Housing 347 1,282 12,448
2023 Renter Occupied Housing 225 965 8,479
2023 Vacant Housing 141 526 3,651
2023 Total Housing 713 2,773 24,577
2018-2023: Households: Growth Rate -1.90 % -2.40 % -1.65 %
Source: esri
La Sombra Demographic Charts | 21
1 Mile Radius 5 Mile Radius 10 Mile Radius
2018 Household Income
1 Mile Radius 5 Mile Radius 10 Mile Radius
2018 Population by Race
La Sombra Demographic Charts | 22
2018 Household Occupancy - 1 Mile Radius
Average Income Median Income
2018 Household Income Average and Median
La Sombra Offering Procedures | 23
