OFFERING MEMORANDUM PRICE REDUCED: $1,650,000...The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement

OFFERING MEMORANDUMPRICE : $1,850,000

PRICE REDUCED: $1,650,00012-Bedroom Multifamily Community

454 Arapahoe Avenue | Boulder, CO 80302

Market Positioning and Pricing Analysis11300 E 16th Ave • Aurora, CO 80010

11111

1225 17th St., Ste. 1800, Denver, CO 80202 | 303.328.2000 | www.marcusmillichap.com

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the 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 contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

454 ARAPAHOE AVENUEBoulder, COACT ID ZAA0050252

454 ARAPAHOE AVENUE

INVESTMENT

OVERVIEW

OFFERING SUMMARY

§ LOW PRICE PER BEDROOM - Strong Rental Upside Through Renovation and Addition

§ Twelve Bedroom Property in Well-Located, Established Boulder Neighborhood; Three Four-Bedroom Units

§ Additional Rental Upside by Adding Two Additional Bathrooms Per Unit; Process Underway

§ Walking Distance to Pearl Street Mall, Downtown Boulder and UC-Boulder Campus

§ Large Units with Balconies and Fireplaces; Mountain Views

§ Large Lot with Nine Off-Street Parking Spaces

§ Easy Access to Restaurants, Shopping, Employment and Public Transportation

INVESTMENT HIGHLIGHTS

INVESTMENT OVERVIEW

Built in 1972, 454 Arapahoe Avenue is a three-unit apartment building with 12 total bedrooms well-located in Boulder, Colorado. The property sits on a 0.28-acre lot along Arapahoe Avenue with close proximity to the Pearl Street Mall, downtown Boulder and the University of Colorado campus.

The triplex consists of a single three-story concrete and stucco building with three four-bedroom/one-and-one-half bath units (1,131 square feet), for a total of 3,393 rentable square feet. Each unit has a wooden balcony or concrete patio off of the living room and a wood-burning fireplace. There is exterior access to the building and a fenced perimeter around the tree-shaded lot. Nine off-street parking spots are available to the tenants. All units have dishwashers and garbage disposals. Common areas have hard surface flooring and the bedrooms are carpeted. Each unit has its own furnace and hot water heater and is individually metered for gas and electric, paid by the residents. The water and sewer is master metered, paid by the owner, reimbursed by the residents. An on-site laundry to the rear of the property is an added amenity to the tenants and provides additional income to the owner. Tenants enjoy mountain views in a quiet residential area but also benefit from convenient access to restaurants, recreation, shopping, employment, public transportation and the University of Colorado campus. Property is currently Smart Regs compliant.

There is additional upside by increasing rent through renovating the units and adding two additional bathrooms per unit. Seller has initiated renovation approval process with the city. Plans associated with this addition will be conveyed at Closing.

454 ARAPAHOE AVENUENUE

AREA MAP

454 ARAPAHOE AVENUE

AERIAL PHOTO

454 ARAPAHOE AVENUE

454 ARAPAHOE AVENUE

#

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

Waldos Holdings LLC 3,281

Agilent Technologies Inc 3,275

Ball 1,800

Communications Infrastructure 1,513

National Center For Atmospheric 1,330

NOAA - Administration 1,100

The Regents of UC-Boulder 1,008

Alfalfas Market 1,000

Ball Corporation 1,000

University Corporation For Atmosphere 1,000

Facilities Management 980

NOAA - Boulder Lab 900

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2018 Est. Pop. 13,528 81,224 115,104

2010 Census Pop. 12,436 73,323 104,304

2018 Estimate HH 5,984 34,392 48,491

2010 Census HH 5,525 31,221 44,134

Median HH Inc. $51,083 $56,431 $66,028

Per Capita Income $46,566 $43,657 $46,852

Avg. HH Income $103,133 $98,950 $107,975

Coin-Operated Laundry

454 ARAPAHOE AVENUE

#

PROPERTY PHOTOS

454 ARAPAHOE AVENUE

FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS

454 ARAPAHOE AVENUE

OPERATING STATEMENT

INCOME CURRENT POTENTIAL NOTES PER UNIT PER SFGROSS CURRENT RENT $88,800 $141,600 [1] $47,000 $41.73

TOTAL PHYSICAL VACANCY ($1,776) 2.0% ($2,832) 2.0% [2] ($944) ($0.83)

EFFECTIVE RENTAL INCOME $87,024 $138,768 $46,256 $40.90 Other Income Utility Reimbursement 5,558 5,558 [3] 1,853 1.64 Additional Income 4,965 4,965 [4] 1,655 1.46

TOTAL OTHER INCOME $10,523 $10,523 $3,508 $3.10

EFFECTIVE GROSS INCOME $97,547 $149,291 $49,764 $44.00

EXPENSES CURRENT POTENTIAL PER UNIT PER SFReal Estate Taxes 9,221 9,221 [5] 3,074 2.72 Insurance 3,652 3,835 [6] 1,278 1.13 Utilities – Gas & Electric 3,486 3,486 [7] 1,162 1.03 Utilities – Water & Sewer 2,690 2,690 [8] 897 0.79 Repairs & Maintenance 3,000 3,000 [9] 1,000 0.88 Landscaping & Snow Removal 900 900 [10] 300 0.27 Office & Administrative 600 600 [11] 200 0.18 Management Fee 5,853 6.0% 8,957 6.0% [12] 2,986 2.64

TOTAL EXPENSES $29,401 $32,689 $10,896 $9.63 EXPENSES AS % OF EGI 30.1% 21.9% NET OPERATING INCOME $68,146 $116,602 $38,867 $34.37 NOTES [1] Current Gross Income vs. Projected Gross Income [7] Annualized Utility cost based on eight months YTD[2] Average Market Vacancy [8] Annualized Utility cost based on eight months YTD[3] Utility Reimbursement based on 90% total utilities reimbursed by residents [9] Estimated Maintenance & Repair cost[4] Additional income based on 2019 YTD annualized [10] Estimated Landscaping & Snow Removal cost[5] 2019 Property Taxes due in 2020 [11] Estimated Office & Administrative cost[6] Current Insurance costs [12] Estimated Management Fee

RENT ROLL SUMMARYAs of August 2019 CURRENT CURRENT POTENTIAL POTENTIAL SQUARE RENT / RENT / SF/ RENT / RENT/ SF/UNIT UNIT TYPE FEET MONTH MONTH MONTH MONTH1 4 Bedroom / 1.5 Bath 1,131 $2,300 $2.03 $3,800 $3.362 4 Bedroom / 1.5 Bath 1,131 $2,400 $2.12 $3,900 $3.453 4 Bedroom / 1.5 Bath 1,131 $2,700 $2.39 $4,100 $3.63TOTAL 3,393 $7,400 $2.18 $11,800 $3.48

FINANCIAL ANALYSIS

454 ARAPAHOE AVENUE

PRICING DETAIL

# OF UNITS UNIT TYPE SF / UNIT SCHEDULED RENTS MARKET RENTS

3 4 Bedroom / 1.5 Bath 1,131 $2,467 $3,933

SUMMARY

PRICE $1,650,000 Down Payment $825,000 50%Number of Units 3Price Per Unit $550,000Price Per SqFt $486.30Rentable SqFt 3,393Lot Size 0.28 AcresApprox. Year Built 1972

RETURNS CURRENT POTENTIAL

CAP RATE 4.13% 7.07%GRM 18.58 11.65Cash-on-Cash 2.43% 8.30%

Debt Coverage Ratio 1.42 2.42

FINANCING 1ST LOANLoan Amount $825,000Loan Type NewInterest Rate 4.15%Amortization 30 YearsYear Due 2029

OPERATING DATA

INCOME CURRENT POTENTIALGROSS SCHEDULED RENT $88,800 $141,600Less: Vacancy/Deductions 2.0% $1,776 2.0% $2,832Total Effective Rental Income $87,024 $138,768Other Income $10,523 $10,523Effective Gross Income $97,547 $149,291Less: Expenses 30.1% $29,401 21.9% $32,689NET OPERATING INCOME $68,146 $116,602Cash Flow $68,146 $116,602

Debt Service $48,124 $48,124Net Cash Flow After Debt Service 2.43% $20,022 8.30% $68,478Principal Reduction $14,154 $14,753TOTAL RETURN 4.14% $34,176 10.09% $83,230

EXPENSES CURRENT POTENTIALReal Estate Taxes $9,221 $9,221Insurance $3,652 $3,835Utilities - Gas & Electric $3,486 $3,486Utilities - Water & Sewer $2,690 $2,690Repairs & Maintenance $3,000 $3,000Landscaping & Snow Removal $900 $900Office & Administrative $600 $600Management Fee $5,853 $8,957TOTAL EXPENSES $29,401 $32,689

EXPENSES/UNIT $9,800 $10,896EXPENSES/SF $8.67 $9.63

454 ARAPAHOE AVENUE

MARKET

COMPARABLES

454 ARAPAHOE AVENUE

SALES COMPARABLES MAP

454 ARAPAHOE AVENUE(SUBJECT)

1027 Pennsylvania Avenue

1115 Pennsylvania Avenue

1603 Arapahoe Avenue

955 University Avenue

SALES COMPARABLES

ON MARKET COMPARABLES

1

2

3

4

PROPERTY NAME

454 ARAPAHOE AVENUE

SALES COMPARABLESSALES COMPARABLES

SALES COMPARABLES

ON MARKET COMPARABLES

SALES COMPS AVG

ON MARKET COMPS AVG

1027Pennsylvania

Ave

1115Pennsylvania

Ave

1603Arapahoe

Ave

955University

Ave

$0.00

$80.00

$160.00

$240.00

$320.00

$400.00

$480.00

$560.00

$640.00

$720.00

$800.00

Avg. $644.02

Avg. $509.03

AVERAGE PRICE PER SQUARE FOOT

1027Pennsylvania

Ave

1115Pennsylvania

Ave

1603Arapahoe

Ave

955University

Ave

$0

$70,000

$140,000

$210,000

$280,000

$350,000

$420,000

$490,000

$560,000

$630,000

$700,000

Avg. $589,861

Avg. $470,000

AVERAGE PRICE PER UNIT

1027Pennsylvania

Ave

1115Pennsylvania

Ave

1603Arapahoe

Ave

955University

Ave

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0Avg. 4.37%

Avg. 3.70%

AVERAGE CAP RATE

PROPERTY NAME

MARKETING TEAM

454 ARAPAHOE AVENUE

SALES COMPARABLES

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


SALES COMPARABLES ON MARKET COMPARABLES

Units Unit Type

Offering Price: $1,650,000 3 4 Bdr 1.5 Bath

Price/Unit: $550,000

Price/SF: $486.30

CAP Rate: 4.13%

GRM: 18.58

Total No. of Units: 3

Year Built: 1972

454 ARAPAHOE AVENUE454 Arapahoe Avenue, Boulder, CO, 80302

1

Units Unit Type

Close Of Escrow: 2/28/2019 1 2 Bdr 1 Bath

Sales Price: $2,065,000 1 3 Bdr 1 Bath

Price/Unit: $688,333 1 4 Bdr 2 Bath

Price/SF: $663.35

CAP Rate: 4.40%


Year Built: 1909

NOTES- Student Focused Rental on Per Bedroom Basis - Price Per Bedroom ($229,444/bedroom)

1027 PENNSYLVANIA AVENUE1027 Pennsylvania Avenue, Boulder, CO, 80302

Units Unit Type




Price/SF: $757.93

CAP Rate: 4.01%


Year Built: 1919

2


1115 PENNSYLVANIA AVENUE1115 Pennsylvania Avenue, Boulder, CO, 80302


PROPERTY NAME

MARKETING TEAM

454 ARAPAHOE AVENUE

SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


SALES COMPARABLES ON MARKET COMPARABLES

Units Unit Type




Price/SF: $510.78

CAP Rate: 4.70%


Year Built: 1910

3


1603 ARAPAHOE AVENUE1603 Arapahoe Avenue, Boulder, CO, 80302

4

Units Unit Type

On Market 1 1 Bdr 1 Bath

List Price: $1,410,000 1 2 Bdr 1 Bath

Price/Unit: $470,000 1 3 Bdr 1 Bath

Price/SF: $509.03

CAP Rate: 3.70%


Year Built: 1914


955 UNIVERSITY AVENUE955 University Avenue, Boulder, CO, 80302

454 ARAPAHOE AVENUE

MARKET

OVERVIEW

MARKET OVERVIEW

OVERVIEWBOULDER

HIGH-TECH HUBThe Boulder-Longmont area has one of the nation’s highest concentrations of software-related jobs.

VENTURE CAPITALLocal companies receive a significant portion of venture capital invested in the state due to the large number of startups in the area.

HIGHLY EDUCATED WORKFORCEThe metro has one of the most educated labor forces in the nation. Nearly 60 percent of residents age 25 and older have obtained a bachelor’s degree, and of these, 27 percent have also earned a graduate or professional degree.

Offering residents and visitors beautiful scenery and a variety of

recreational activities, the Boulder metro encompasses all of Boulder

County, including a portion of Rocky Mountain National Park. The city of

Boulder itself is situated 35 miles northwest of Denver. The area is known

for research and technology industries. Although median incomes are

high, home prices that are more than twice the national median allow

roughly 62 percent of household to own their home.

§ Boulder County is known for its high-tech and biotech workers and companies, drawing additional businesses to the region and generating startups.

§ Federal research facilities and the University of Colorado attract technology firms in bioscience, software development, aerospace, computer storage and peripherals, and natural and organic products.

§ Government facilities include the National Oceanic and Atmospheric Administration, the National Institute of Standards and Technology, and other federal research facilities.

§ Other segments important to the economy include outdoor products and sporting goods, renewable energy and tourism. The proximity to Rocky Mountain National Park and ski slopes makes it a tourist destination.

DEMOGRAPHICS

ECONOMY

METRO HIGHLIGHTS

* Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

454 ARAPAHOE AVENUE

327K2018

POPULATION:

133K2018

HOUSEHOLDS:

36.32018

MEDIAN AGE:

$77,4002018 MEDIAN

HOUSEHOLD INCOME:

U.S. Median:

38.0U.S. Median:

$58,8005.6%

Growth2018-2023*:

4.7%

Growth2018-2023*:

PROPERTY NAME

MARKETING TEAM

454 ARAPAHOE AVENUE

DEMOGRAPHICS

Source: © 2018 Experian

POPULATION 1 Miles 3 Miles 5 Miles§ 2023 Projection

Total Population 13,566 82,637 117,522

§ 2018 Estimate


§ 2010 Census


§ 2000 Census


§ Daytime Population

2018 Estimate 35,259 148,912 205,892

HOUSEHOLDS 1 Miles 3 Miles 5 Miles§ 2023 Projection

Total Households 6,009 35,240 49,884

§ 2018 Estimate


Average (Mean) Household Size 2.11 2.10 2.15

§ 2010 Census


§ 2000 Census


Growth 2015-2020 0.42% 2.47% 2.87%

HOUSING UNITS 1 Miles 3 Miles 5 Miles§ Occupied Units

2023 Projection 6,009 35,240 49,884

2018 Estimate 6,110 34,913 49,281

Owner Occupied 1,987 14,612 24,370

Renter Occupied 3,997 19,781 24,122

Vacant 126 521 789

§ Persons In Units

2018 Estimate Total Occupied Units 5,984 34,392 48,491

1 Person Units 38.34% 37.74% 35.54%

2 Person Units 33.64% 34.51% 35.24%

3 Person Units 14.54% 13.92% 14.14%

4 Person Units 8.97% 9.85% 10.56%

5 Person Units 2.97% 2.76% 3.15%

6+ Person Units 1.52% 1.21% 1.36%

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles§ 2018 Estimate

$200,000 or More 13.30% 10.75% 12.24%

$150,000 - $199,000 6.44% 7.45% 8.25%

$100,000 - $149,000 10.15% 12.41% 14.05%

$75,000 - $99,999 9.78% 10.35% 11.32%

$50,000 - $74,999 10.97% 12.87% 13.08%

$35,000 - $49,999 10.73% 10.95% 10.62%

$25,000 - $34,999 9.49% 9.14% 8.43%

$15,000 - $24,999 9.22% 9.39% 8.24%

Under $15,000 19.92% 16.70% 13.78%

Average Household Income $103,133 $98,950 $107,975

Median Household Income $51,083 $56,431 $66,028

Per Capita Income $46,566 $43,657 $46,852

POPULATION PROFILE 1 Miles 3 Miles 5 Miles§ Population By Age

2018 Estimate Total Population 13,528 81,224 115,104

Under 20 13.59% 22.80% 21.93%

20 to 34 Years 53.84% 40.86% 35.77%

35 to 39 Years 4.62% 5.20% 5.63%

40 to 49 Years 7.81% 8.57% 9.96%

50 to 64 Years 10.87% 12.26% 14.81%

Age 65+ 9.26% 10.34% 11.89%

Median Age 24.20 26.05 29.35

§ Population 25+ by Education Level

2018 Estimate Population Age 25+ 6,392 42,791 67,295

Elementary (0-8) 0.51% 1.92% 1.66%

Some High School (9-11) 0.96% 1.93% 1.98%

High School Graduate (12) 5.07% 7.28% 7.72%

Some College (13-15) 14.49% 13.25% 13.09%

Associate Degree Only 2.77% 3.50% 3.77%

Bachelors Degree Only 37.04% 34.59% 34.15%

Graduate Degree 39.15% 37.11% 37.08%

§ Population by Gender

2018 Estimate Total Population 13,528 81,224 115,104

Male Population 50.99% 51.29% 51.20%

Female Population 49.01% 48.71% 48.80%

IncomeIn 2018, the median household income for your selected geography is $51,083, compare this to the US average which is currently $58,754. The median household income for your area has changed by 43.51% since 2000. It is estimated that the median household income in your area will be $62,486 five years from now, which represents a change of 22.32% from the current year. The current year per capita income in your area is $46,566, compare this to the US average, which is $32,356. The current year average household income in your area is $103,133, compare this to the US average which is $84,609.

PopulationIn 2018, the population in your selected geography is 13,528. The population has changed by 10.38% since 2000. It is estimated that the population in your area will be 13,566.00 five years from now, which represents a change of 0.28% from the current year. The current population is 50.99% male and 49.01% female. The median age of the population in your area is 24.20, compare this to the US average which is 37.95. The population density in your area is 4,299.70 people per square mile.

HouseholdsThere are currently 5,984 households in your selected geography. The number of households has changed by 6.84% since 2000. It is estimated that the number of households in your area will be 6,009 five years from now, which represents a change of 0.42% from the current year. The average household size in your area is 2.11 persons.

EmploymentIn 2018, there are 24,650 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 71.91% of employees are employed in white-collar occupations in this geography, and 28.65% are employed in blue-collar occupations. In 2018, unemployment in this area is 3.15%. In 2000, the average time traveled to work was 21.00 minutes.

Race and EthnicityThe current year racial makeup of your selected area is as follows: 94.22% White, 0.78% Black, 0.05% Native American and 1.82% Asian/Pacific Islander. Compare these to US averages which are: 70.20% White, 12.89% Black, 0.19% Native American and 5.59% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 4.48% of the current year population in your selected area. Compare this to the US average of 18.01%.

PROPERTY NAME

MARKETING TEAM

454 ARAPAHOE AVENUE

HousingThe median housing value in your area was $936,976 in 2018, compare this to the US average of $201,842. In 2000, there were 1,882 owner occupied housing units in your area and there were 3,719 renter occupied housing units in your area. The median rent at the time was $693.

Source: © 2018 Experian

DEMOGRAPHICS

8

454 ARAPAHOE AVENUE

DEMOGRAPHICS

www.MarcusMillichap.com

Clayton Primm

First Vice President Investments

Director, National Multi Housing GroupDenver OfficeTel: (303) 328-2075

Fax: (303) 328-2010

[email protected]

License: CO FA100024161

P R E S E N T E D B Y

Documents

OFFERING MEMORANDUM PRICE REDUCED: $1,650,000...The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement