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Ocot il l o West Apar t ment sOffering Memorandum
28 Units | Odessa , TX
(Part of a Portfolio Offering)
DISCLAIMER
The information contained in this publication is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from ACR Multifamily and should not be made available to any other person or entity without the written consent of ACR Multifamily.
This publication has been prepared to provide a summary of unverified information to prospective purchasers and to establish only a preliminary level of investigation. ACR Multifamily has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property and improvements, the presence or absence of contaminating substances, PCB?s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant?s plans or intentions to continue its occupancy of the subject property. The information in this publication has been obtained from sources we believe to be reliable; however, ACR Multifamily has not verified, and will not verify, any of the information contained herein, nor has ACR Multifamily conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy of completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.
Please consult an ACR Multifamily Agent for details.
Reynold ToepferVice President
Cell: (512) [email protected]
Sam ParsleySenior Associate
Cell: (432) [email protected]
PROPERTY INFORMATION
Property Address 600 Dotsy Avenue
Property City Odessa
Property State Texas
Property Zip Code 79693
Submarket N/A
Units 28
Rentable SF 11,330
Average SF / Unit 405
Current Occupancy 100%
Acres 0.82
Density 34.15
Year of Construction 1971
Parking Open / Reserved Upon Request
Number of Buildings 1
Number of Floors 1
ACR Multifamily has been exclusively retained to offer an opportunity for qualified investors to purchase the fee simple interest in Ocotillo West Apartments (The "Property"), a 28-unit apartment community located in Odessa, Texas. Built in 1971, the Property features 1 well-maintained building allowing for operational and managerial efficiencies. Ideally located in the heart of Odessa, the property is in extremely close proximity to the Medical Center Hospital and Texas Tech University Health Sciences Center. This allows for these funrished "corporate" apartments to benefit from tenants not only in the heavily present oil and gas economy, but to attracte tenants from the medical sector as well. Per the U.S. Census Bureau, Odessa has an estimated population of just over 120,000 (2018), which is a 20% increase since 2010.
Electricity Owner Paid
HVAC Mini Splits
Hot Water Individual Water Heaters
Water/Sewer Owner Paid
W/D Laundry Facility
Gas Owner Paid (Used only for Dryers)
Property Information
Utilities Information
RENT ROLL & UNIT MIX
Unit Type Unit Count Square Feet Total SF Market Rent Market/SF Current/SF GPR
1 Bed / 1 Bath 26 374 9,724 $1,150 $3.07 $3.07 $358,800
2 Bed / 1 Bath 2 803 1,606 $1,550 $1.93 $1.93 $37,200
TOTAL/AVG 28 405 11,330 $1,178 $2.98 $2.98 $396,000
NOTE: All of the units are currently fully furnished and are leased as corporate apartments.
INVESTMENT HIGHLIGHTS
Market Rent Premium for Furnished Corporate Rentals
Ocotillo West is 100% furnished units ideally suited for corporate leases. Oil and gas industry rentals are the prime driver of corporate demand in Odessa, however, Ocotillo West also boasts adjacent location to the city's largest medical campus and takes advantage of traveling nurses and short term medical staff.
Current Rates for Corporate Furnished Leases
The current range of monthly rates in Odessa, TX for fully furnished corporate rentals on a 6 month lease are as follows:
- One Bedroom: $2,500 - $3,685 per month ($83 - $122 per day)- Two Bedroom: $3,210 - $3,840 per month ($107 - $128 per day)
This presents investors with immediate rental upside of almost 2x at Ocotillo West, and conservatively should garner rent bumps exceeding $500 per unit as-is strictly given the current market rates and demand in Odessa.
Operational Upside
Financial underwriting on provided operating statement pro forma is conservative for the potential NOI growth at Ocotillo West. By implementing experienced local management, Ocotillo West not only boasts significant immediate rent growth potential but also streamlined expenses could dramatically improve bottom line.
Medical Campus
While all Odessa properties benefit from the strongest Texas economic driver, the multi billion dollar Permian Basin oil and gas play, Ocotillo West also capitalizes on the thriving medical sector and adjacent campus (Medical Center Hospital, Texas Tech University Health Sciences Center, Odessa Regional Medical Center and West Texas Neurology combined > 5,000 employees with demand for short term nurses and staff)
Attractive Financing
Ocotillo West is available free and clear to unrestricted financing options. Soft quotes from preferred lenders indicate interest rates close to 4% and availability for non-recourse debt with options for interest only period.
LOCATION OVERVIEW
- Medical Center Hospital- Texas Tech University Health Sciences Center- Odessa Regional Medical Center- West Texas Neurology
Ocot il l o West
- Halliburton- Saulsbury Corporation- Keane Group- Walmart- Odessa Regional Medical Center- Bobby Cox Companies, Inc.- HEB- Weatherford- Albertsons / Market Street- Sewell Family of Dealerships- Select Energy Oil Field Services- FTS International- Power Line Energy Services- Investment Corporation of America- Ector County I.S.D.- Medical Center Hospital- City of Odessa- Ector County- University of Texas Permian Basin- TTU University Health Science Center- Odessa College
AREA LARGEST EMPLOYERS
LOCATION OVERVIEW
Ocot il l o West
Medical Center Hospital
Texas Tech Health Center
West Texas Neurology
PROPERTY PHOTOS
PROPERTY PHOTOS
OPERATING STATEMENT (PRO-FORMA)
Income Pro-Forma Per Unit Pro-Forma
GROSS POTENTIAL RENT $396,000 $14,143
Loss/Gain to Lease (20,000) (714)
GROSS SCHEDULED RENT $376,000 $13,429
General Vacancy (18,800) (671)
Concessions / Bad Debt (3,760) (134)
TOTAL RENTAL INCOME $353,440 $12,623
Parking / Storage Income 3,000 107
Laundry Income 1,320 47
EFFECTIVE GROSS INCOME $357,760 $12,777
EXPENSES Pro-Forma Per Unit Pro-Forma
General & Administrative 4,200 150
Maintenance & Repairs 22,400 800
Contract Services 1,400 50
Payroll 25,200 900
Advertising & Marketing 3,500 125
Supplies 7,700 275
Management Fee 17,888 639
TOTAL CONTROLLABLE $82,288 $2,939
Real Estate Taxes 50,675 1,810
Insurance 10,500 375
Utilities 39,200 1,400
TOTAL NON-CONTROLLABLE $100,375 $3,585
Capital Reserves 7,000 250
TOTAL EXPENSES $189,663 $6,774
NET OPERATING INCOME $168,097 $6,003
OFFER PROCESS
PROPERTY VISITATION Prospective purchasers will have the opportunity to visit the Properties via pre-scheduled Property tours. These tours will include access to a representative sampling of units and access to maintenance and other similar facilities. In order to accommodate the Properties ongoing operations, Property visitation will require advance notice and scheduling.
OFFER SUBMISSION Offers should be presented in the form of a non-binding Letter of Intent, spelling out of the significant terms and conditions of Purchasers' offers including, but not limited to:
1. asset pricing,2. due diligence and closing time frame,3. earnest money deposit, and4. a description of the debt/equity structure.
The purchase terms shall require all cash to be paid at closing. Offers should be delivered via email to the attention of Reynold Toepfer or Sam Parsley at:
[email protected] [email protected]
Broker Pricing Guidance: $2,200,000
Per Unit Trade Price: $78,571
Per Square Foot Trade Price: $194.17
T-12 Cap Rate: 8.66%
Pro Forma Cap Rate: 7.64%
*Pro Forma Cash On Cash Return: 12.20%
Pro-Forma Cash on Cash Return is based off loan terms with a 4.0% interest rate, 10 year term, 30 year am, and 75% LTV
TREC Information About Brokerage Services
Texas law requires all real estate license holders to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords.
TYPES OF REAL ESTATE LICENSE HOLDERS:- A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker.- A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.
A BROKER?S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents):- Put the interests of the client above all others, including the broker?s own interests;- Inform the client of any material information about the property or transaction received by the broker;- Answer the client?s questions and present any offer to or counter-offer from the client; and- Treat all parties to a real estate transaction honestly and fairly
A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION:AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner's agent through an agreement with the owner, usually in a written listing to sell or property management agreement. An owner's agent must perform the broker?s minimum duties above and must inform the owner of any material information about the property or transaction known by the agent, including information disclosed to the agent or subagent by the buyer or buyer?s agent.AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant's agent by agreeing to represent the buyer, usually through a written representation agreement. A buyer's agent must perform the broker?s minimum duties above and must inform the buyer of any material information about the property or transaction known by the agent, including information disclosed to the agent by the seller or seller?s agent.AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the written agreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker's obligations as an intermediary. A broker who acts as an intermediary:
- Must treat all parties to the transaction impartially and fairly;- May, with the parties' written consent, appoint a different license holder associated with the broker to each party (owner and buyer) to communicate with, provide
opinions and advice to, and carry out the instructions of each party to the transaction.- Must not, unless specifically authorized in writing to do so by the party, disclose:
- that the owner will accept a price less than the written asking price;- that the buyer/tenant will pay a price greater than the price submitted in a written offer; and- any confidential information or any other information that a party specifically instructs the broker in writing not to disclose, unless required to do so by law.
AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first.TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH:
- The broker?s duties and responsibilities to you, and your obligations under the representation agreement.- Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.
Regulated by the Texas Real Estate Commission Information available at www.trec.texas.gov
Broker Firm: ACR Multifamily
License Number: 577132
Email: [email protected]
Licensed Supervisor: Reynold Toepfer
License Number: 623595
Email: [email protected]
Sales Agent: Sam Parsley
License Number: 619807
Email: [email protected]
