Latah Apartments and Mini Storage Sale information: Spring ... · • Average 35% +/- turn-over per...

KIP Development, Pullman’s choice for Quality

P.O. Box 642, Pullman, Washington 99163 Telephone: 509.334.7444, Fax: 509.334.4197, Email: [email protected]

Latah Apartments and Mini Storage Sale information: Spring 2017

Contact Information

Kevin Kirkman Phone: 509-595-3533 Email: [email protected]

Offering Price: $2,950,000.

CAP Rate: 6.5 based on 2016 actual income and expense Terms: Cash at Closing Preferred closing Date: 2017 Seller 1031 Exchange: Yes

Cooperating Selling RE Brokers = 2.5% Attachments

1. ALTA property Survey 2. Certificate of Occupancy 3. Access easement to WSU across neighboring property

General Information

• Two – 3- story buildings – Mini storage 1st floor, Apartments 2nd and 3rd floor

• Address: 1016 & 1024 SE Latah Street Pullman WA 99163

• 24 units, all 2-bedroom, 1-bath: all units 732 Square feet

• All 12-month leases in place, select 10 and 11 month’s leases offered at higher rents (see below: 2017 Rental rates)

• Zero vacancy last 30-years

• 60 mini storage units vary in size from 5x5 to 5x10 units – all Storage units, rent separate from apartments.

• Lot size – Approximately 1 acre

• Zoning C-3 – requires commercial use first floor – i.e. mini-storage

• 36 parking parks – complaint with zoning as existing use -certificate occupancy

• Apartment Complex is non-smoking – reduces turn over costs

• No Pets allowed - reduces turn over costs

• All Rental units and laundry rooms complete remodel summer 2012 and 2013

• New vinyl plank floors in living / dining and bath rooms reduces turn over costs

• Carpet tiles in bedrooms reduces turn over costs and carpet replacement (replacement tiles included)

• New 40-year fiberglass shingle roof 2012 +/-

mailto:[email protected]

• Recorded existing Easement for staircase and access across neighboring property to provide direct access to WSU campus – attached

• Certificate of occupancy issued September 1985 – attached

• Complete maintenance and repair records for all units & building – Available with signed PSA

• Same owner since new in 1985, Current owner built and developed property

• When apartment complex built Project part of the pilot energy program “Super Good Sense” and was constructed to very high energy standards as a test bed for future energy code development – results in very low energy bills for tenants

• Landlord Pays Water, Sewer and Garbage bills

• Tenants pay Avista – electric bill, phone, TV and high speed private internet

• Currently the landlord supplies free Wi-Fi throughout the building for tenants use which is good for basic web browsing and email. We provide no guarantee of service to tenants just a free amenity. Currently there is no charge to Landlord for this service as provided by FSR as the Landlord is trading services with FSR. After closing there may be a marginal ongoing charge if new owner retains this free service

Apartments

• 24 units – all 2-bedroom, 1-bath

• All units: 732 Square feet in size

• All units pay $40 per month flat rate for utlities (water, sewer and garabage) in addition to rent

• Rents are below market rate

• Annual rent increase every year = $10 -$15 per unit per month

• Several long term tenants

• Average 35% +/- turn-over per rental season months of May through August 2017/2018 Rental Rates

• Currently renewing & signing new lease terms starting June 1, July 1, & August 1, 2017

o Leases Starting June 1, July 1 or August 1, 2017, new 12-month lease term

Lower units -$730. + $40.WSG = $770 per month

upper units -$770. +$40. WSG = $810 per month

o Option: Leases Starting July 1, 2017, new 11-month term

Lower units -$780. + $40. WSG = $820. per month

upper units -$830. +$40. WSG = $870. per month

o Option: Leases Starting August 1, 2017, new 10-month term

Lower units -$810. +$40. WSG = $850. Per month

upper units -$850. + $40. WSG =$890. Per month Mini-storage

• 60 units mini storage

• 5’x5’ to 5’x10’ in size

• 100% occupancy: April through September

• 75%+/- occupancy October through March

• Average monthly income for all storage units is $2,500 per month= $30,000 annualy

Coin Operated Laundrys & Vending machines

• Two Coin operated laundry rooms (one in each building) Laundry equipment owned and included in sale.

• 2012 complete remodel and all new front load laundry equipment

• Average $300. – 400. month in cash removed from laundry machines

• One onsite pop machine receive nominal income several times a year about $225. Total per year- vending is serviced and third party

• Afforable rates on laundry machines – well below market rates Adjacent commercial building located at 1020 Latah street – Out parcel on survey

• Also, available for purchase $300,000

• Two suites- fully leased commercial NNN leases in place o Retail - Nail saloon o Warehouse -Hub -Charter communications -communication hub

• Request additional sale information - Kevin Kirkman, [email protected] or 509-595-3533 Alta property Survey

• Attached: ALTA survey completed in 2014 Preliminary Title Report

• Pending title company –

• Available upon accepted PSA Property inspection report Dated October 2014

• Available upon Accepted PSA

• Note all deficient items in property report corrected in 2014 Environmental Issues

• Phase I report completed November 2014

• Phase II report and investigation completed 2016 and monitoring of below grade wells continues in accordance with Department of Ecology expectations

• Copies of Phase I and Phase II reports available by request

• Chevron Indemnity Agreement pending finalization and approval, of Chevron, Seller and Buyer and Buyer lender – Indemnification agreement will provide that Chevron Corp. is responsible for any Ecology mandated cleanup and monitoring of the premises and will be assigned to Purchaser (see below: Resolution of Ecology Issues)

Summary Status Environmental Issues

• Extensive below grade and above grade (indoor air quality) testing and monitoring has been completed and monitoring wells are in place on property.

• Below grade contamination of soil and groundwater is above state DOH cleanup standards in select locations during Phase II investigation.

• Prior to construction and development of the existing apartments on the property there was a bulk oil distribution yard for Union Oil. The successor to Union Oil is Chevron/related entities.

• Environmental reports show no impacts above any applicable Ecology screening standard to tenants from above or below ground contamination. Domestic water is obtained from the City of Pullman municipal system. All reports have been provided to State Department of Ecology.

• Property is enrolled in Ecology’s “Voluntary Cleanup Program” (VCP) with Ecology concurrence.

mailto:[email protected]

Resolution of Ecology & Environmental Issues

In an effort to reach a resolution between Seller & Chevron, Chevron Environmental Services Company (CEMC) has agreed to the following

• Provide Indemnity Agreement to Seller, Purchasers and Purchasers lenders the Indemnity Agreement contains the following terms (this Indemnity agreement is pending finalization and approval of buyer and buyer lender)

o CEMC shall become the responsible party related to the Department of Ecology approved voluntary cleanup. Owner and successor shall have no responsibility

o CEMC shall be responsible for all work and costs related to Department of Ecology mandated cleanup and ongoing monitoring of onsite conditions

o Indemnity agreement shall extend to Owner / successors / future buyers and buyer’s lenders

o Owner and successors shall have no responsibility other than grant access to CEMC to the site

o CEMC shall be responsible for returning site to original condition after any mandated cleanup or issuance of a “No Further Action” (NFA) letter by the Department of Ecology

o Agreement shall terminate with Issuance of No Further Action by Ecology o CEMC has agreed to work with potential lenders to ensure they are comfortable with

Indemnity Agreement Scope of Work Remodel of the Latah Apartments: completed summer 2012 and 2013 all units - General work all Rental units:

1. Sand and re-varnish all cabinets in unit, including frames, side panels and all sides and front of cabinet doors

2. Refinish all countertops with epoxy finish as needed throughout 3. Paint interior of apartment including walls and ceiling 4. Paint all interior doors and closet shelves 5. Set door stop moldings, caulk door frames and trim, paint door frames and trim 6. Prep & Repaint interior and exterior of front door 7. Replace all interior door hardware with privacy lever hardware 8. Remove wood cove base: bathroom, kitchen, & living room 9. Remove living room carpet 10. Move living room baseboard heater out from behind front door as needed 11. Replace all interior hardware and door stops 12. Install new contoured rubber cove base in living room, kitchen and bathroom & Bedrooms 13. Replaced all windows with broken seals (condensation) 14. Replaced all window screens as needed 15. Install smoke and carbon monoxide detectors to replace smoke only 16. Install GFI and AFCI outlets as recommended

Lower floor units only:

1. Install electrical box under upper cabinets over sink, install under counter light over sink in kitchen.

2. Install (4) portholes above upper cabinets in wall between kitchen and living room, trim out with wood- reuse removed cove base wood, maintain sheetrock wrap at ceiling in porthole to maintain fire rating

3. Install new textured vinyl plank flooring in living room only (transition strip need between living room and kitchen) prep floor with fix all as needed prior to installation

4. Existing vinyl floors in kitchen and bath to remain or replaced as needed Upper floor units only:

1. Install new textured vinyl plank flooring in Living room, Kitchen and Bathroom; prep floor with as needed prior to installation

Kitchen: 1. Install new range stove (free standing lower floors- slide in upper floors) 2. Install new hood over range oven 3. Remove existing ceiling florescent light and replace with new 3-bulb light fixture 4. Replace Refrigerators 5. Replace D/W 6. Install new butcher block countertops over D/W 7. Replace garbage disposals as needed 8. Replace sink hardware as needed 9. Replace all water supply valves and install back flow preventers on DW drain lines 10. Install new contoured rubber cove base

Living Room:

1. Install new light fixture with 3-bulb fixture 2. Remove existing living room window; Install new 6040-slider window in living room 3. Install new contoured rubber cove base

Bathroom:

1. Install permanent contoured shower rod 2. Install new 4-bulb light bar in bathroom over vanity 3. Repair all chips &Refinish all fiber glass tub showers with epoxy finish 4. Replace all damaged sinks with granite countertops and new sinks 5. Replace sink plumbing hardware as needed 6. Replace all water supply valves 7. Replace all towel bars 8. Replace vanity mirrors 9. Install new 14”x 36” single hung vinyl window exterior wall, 10. Paint ceiling light/exhaust vent cover white, 11. check to make sure bath fan exhaust hoses connected to roof vent 12. Install new contoured rubber cove base

Bedrooms:

1. Replace Bedroom carpets with new Carpet tiles 2. Install new contoured rubber cove base 3. Replace ceiling light fixtures with new 2-bulb fixtures 4. Paint electrical panels

Exterior & General Remodel - Latah Apartment Complex

1. Complete remodel laundry rooms, installed all new high efficiency coin operated laundry equipment

2. Repainted all exterior doors & installed new coded door hardware 3. Repaired all vinyl siding

4. Installed new 40-year roofing both building 5. Repaired or replaced all wood decking 6. Replaced all exterior mini storage doors with new roll up doors 7. Repaired all concrete sidewalks 8. Repainted all metal exterior stairs 9. Replaced all stair treads on exterior metal stairs 10. Installed new gutters and down spouts on front of building and repaired gutters on back of

building Current Rent Roll Apartments dated 3-25-2017

Unit Tenants Lease Start Lease End Bed/Bath Sq.Ft. Market Rent Recurring Charges Recurring Credits Deposits & LMR Held Balance Due

01 John Barkley, Drew Jepsen 6/1/2015 5/29/2017 2 Bed/1 Bath 732 $760.00 $790.00 $0.00 $1546.67 -$5.00

02 Spencer Ponczoch 4/7/2016 5/29/2017 2 Bed/1 Bath 732 $760.00 $790.00 $0.00 $1540.00 $0.00

03 Ibraheem Alsayegh 1/25/2017 6/28/2018 2 Bed/1 Bath 732 $760.00 $1000.00 $0.00 $2000.00 $0.00

04 Katrina Harmon, Megan Lester 8/1/2016 7/29/2017 2 Bed/1 Bath 732 $760.00 $790.00 $0.00 $1540.00 $0.00

05 Kevin Toombs, Jaymie Vandagriff 12/24/2016 6/28/2018 2 Bed/1 Bath 732 $760.00 $800.00 $0.00 $1560.00 $0.00

06 Dayton Wooldridge, Levi Werner 6/1/2016 5/29/2018 2 Bed/1 Bath 732 $760.00 $1560.00 $0.00 $1935.00 $0.00

07 Trevor Solt, David Unruh 7/1/2016 6/28/2017 2 Bed/1 Bath 732 $720.00 $750.00 $0.00 $1500.00 -$410.00

08 Christopher Keller, David Lindeman 8/1/2014 5/29/2018 2 Bed/1 Bath 732 $720.00 $1550.00 $0.00 $1505.00 $0.00

09 Barrie Salmonson, Cody O'Connell 6/13/2016 5/29/2017 2 Bed/1 Bath 732 $720.00 $750.00 $0.00 $1480.00 -$710.00

10 Keegan Caruso, Justin Parker 6/1/2016 5/29/2017 2 Bed/1 Bath 732 $720.00 $750.00 $0.00 $1460.00 $0.00

11 James Nelson, Gregory Sealey 8/1/2016 7/29/2017 2 Bed/1 Bath 732 $720.00 $750.00 $0.00 $1460.00 -$375.00

12 Alexander Brown, Amber Hughes 6/30/2014 5/29/2018 2 Bed/1 Bath 732 $720.00 $1500.00 $0.00 $1540.00 $0.00

13 Nicholas Treich, Madison Soth 7/1/2015 6/28/2017 2 Bed/1 Bath 732 $760.00 $790.00 $0.00 $1885.00 $0.00

14 Shen En (David) Lin, Yuchen Hou 6/1/2016 5/29/2018 2 Bed/1 Bath 732 $760.00 $790.00 $0.00 $1580.00 $0.00

15 Megan Canonica, Kendall Johnson 1/6/2017 6/28/2017 2 Bed/1 Bath 732 $760.00 $800.00 $0.00 $1560.00 $0.00

16 Samantha Beck, Andrew Conselman 6/1/2015 5/29/2017 2 Bed/1 Bath 732 $760.00 $790.00 $0.00 $1540.00 -$1580.00

17 David McLaughlin, Devi Hoglund 6/1/2016 5/29/2017 2 Bed/1 Bath 732 $760.00 $790.00 $0.00 $1580.00 $0.00

18 Daniel Flores, Rianna Davis 7/1/2016 6/28/2017 2 Bed/1 Bath 732 $760.00 $790.00 $0.00 $1540.00 $0.00

19 Owen Neill 9/19/2013 7/29/2017 2 Bed/1 Bath 732 $720.00 $750.00 $0.00 $1460.00 $0.00

20 Joe Benson 8/1/2011 7/29/2017 2 Bed/1 Bath 732 $720.00 $750.00 $0.00 $1640.00 $0.00

21 Tyler Hammond 6/1/2012 5/29/2018 2 Bed/1 Bath 732 $720.00 $1480.00 $0.00 $1500.00 -$0.75

22 Justin Frow, Stephan Dierken 8/1/2016 7/29/2017 2 Bed/1 Bath 732 $720.00 $750.00 $0.00 $1460.00 $0.00

23 Erika Escamilla, Mikaela Fabian 8/1/2015 7/29/2017 2 Bed/1 Bath 732 $720.00 $750.00 $0.00 $1460.00 $0.00

24 Sara Nogueiro 7/1/2016 6/28/2017 2 Bed/1 Bath 732 $720.00 $750.00 $0.00 $1460.00 $0.00

-$3080.75

Amount

Market rent $17760.00

Recurring charges $21760.00

Recurring credits $0.00

Deposits held $37731.67

Balance due -$3080.75

Bed/Bath No. of Units Vacant Occupied % Occupied Total Average Total Average Avg. Per Size

2 Bed/1 Bath 24 0 24 100.00% 17568 732 $17760.00 $740.00 $1.01

Totals and averages 24 0 24 100.00% 17568 732 $17760.00 $740.00 $1.01

Property No. of Units Vacant Occupied % Occupied Total Average Total Average Avg. Per Size

Latah Apartments 24 0 24 100.00% 17568 732 $17760.00 $740.00 $1.01

Totals and averages 24 0 24 100.00% 17568 732 $17760.00 $740.00 $1.01

Market Rent

Summary by propertySummary by property Occupancy Unit Size Market Rent

Grand totals

Summary by bed/bathSummary by bed/bath Occupancy Unit Size

Rent RollAs of 3/25/2017, Latah Apartments, Current leases, All units

Latah Apartments

Latah Apartments

Total for Latah Apartments

Does not reflect laundry income, only vending machine income

Latah Apartment Income / Expense Statement 2016

Latah Apartments

2016 Total

Income

Additional Income & Fees - Heading Only

Admin. Fee $105.00 $105.00

Laundry & Vending Income $223.21 $223.21

Lease Termination Fee $250.00 $250.00

Total for Additional Income & Fees - Heading Only $578.21 $578.21

Application Fee Income

Co-Signer Fee (Credit Reports) $270.00 $270.00

Move-in Fee / Lease Renewal Fees $375.00 $375.00

Total for Application Fee Income $645.00 $645.00

Late Fee Income $535.00 $535.00

Lease Violation Fees $100.00 $100.00

Maintenance, Repairs & Utility

Cleaning and Maintenance Reimbursements $6833.52 $6833.52

Utility Reimbursement Income $11582.03 $11582.03

Total for Maintenance, Repairs & Utility $18415.55 $18415.55

NSF Fee Income $100.00 $100.00

Rent Income $210881.67 $210881.67

Total Income $231255.43 $231255.43

Expense

Advertising -Heading Only

Online Web Advertising $17.46 $17.46

Referral Fee $731.60 $731.60

Total for Advertising -Heading Only $749.06 $749.06

Bank Fees -Heading Only

Credit Card Processing Fees $337.72 $337.72

Misc. Bank Fees $54.77 $54.77

Total for Bank Fees -Heading Only $392.49 $392.49

Insurance $5024.00 $5024.00

Maintenance -Heading Only

Carpet Shampoo Expense $800.00 $800.00

Cleaning & Janitorial & Turn Over Labor $8988.71 $8988.71

Fuel for Maintenance landscape & Repairs $494.46 $494.46

Maintenance, Landscaping & Repairs KIP employees $22369.89 $22369.89

Snow Removal $88.12 $88.12

Subcontracted Repairs & Maintenance $2028.14 $2028.14

Total for Maintenance -Heading Only $34769.32 $34769.32

Management Fees

Management Fees - Other $120.00 $120.00

Total for Management Fees $120.00 $120.00

Office Expenses -Heading Only

Legal Fees $74.00 $74.00

Postage and Delivery $141.00 $141.00

Total for Office Expenses -Heading Only $215.00 $215.00

Property Taxes $11594.84 $11594.84

Rental Tax / Licensing Fee $15.00 $15.00

Utilities -Heading only

Electricity House Meters $3249.63 $3249.63

Trash Removal Expense $3893.78 $3893.78

Water / Sewer / Storm Expense $8803.38 $8803.38

Total for Utilities -Heading only $15946.79 $15946.79

Total Expense $68826.50 $68826.50

Net Operating Income $162428.93 $162428.93

Latah Mini Storage Income / Expense Statement 2016

Latah Mini Storage

2016 Total

Income

Rent Income $31672.96 $31672.96

Total Income $31672.96 $31672.96

Expense


News Paper Advertising $21.72 $21.72








Management Fees






Refunded Rent $280.49 $280.49




Total Expense $2688.88 $2688.88


Non-operating Expense

Non-Operating Expenses - Heading Only

Internet and Web Site Expenses $17.00 $17.00

Total for Non-Operating Expenses - Heading Only $17.00 $17.00

Total Non-Operating Expense $17.00 $17.00

Net Non-Operating Income -$17.00 -$17.00

Net Income $28967.08 $28967.08


Latah Apartments Income / Expense Statement 2015

Latah Apartments

1/1/2015 - 12/31/2015 Total

Income


Admin. Fee $15.00 $15.00



Small Claims Proceeds $72.23 $72.23






Late Fee Income $770.00 $770.00






Rent Income $204873.53 $204873.53

U - CAM: Income - Heading Only

Maintenance & Repairs: CAM Reimbursement -$156.88 -$156.88

Total for U - CAM: Income - Heading Only -$156.88 -$156.88

Total Income $227361.83 $227361.83

Expense





Bank Fees -Heading Only - Other $52.17 $52.17



Insurance $5169.00 $5169.00






Snow Removal $174.00 $174.00



Management Fees




Credit Reports, $72.49 $72.49

Licenses and Permits $30.00 $30.00

Office Expenses -Heading Only - Other $50.00 $50.00



Property Taxes $11706.60 $11706.60


Electricity and Gas, Vacant Units $57.38 $57.38





X - Palouse Business Center -Heading

Permits & Fees $175.81 $175.81

Total for X - Palouse Business Center -Heading $175.81 $175.81

Total Expense $72226.99 $72226.99


Mini Storage Income / Expense Statement 2015

Latah Mini Storage

1/1/2015 - 12/31/2015 Total

Income


Reimbursement for Advertising Lein Sale $41.00 $41.00


Rent Income $29247.71 $29247.71

Total Income $29288.71 $29288.71

Expense


News Paper Advertising $21.44 $21.44







Snow Removal $12.00 $12.00



Management Fees







Refunded Tenant Deposit $100.00 $100.00

Tenant Refunds $67.00 $67.00





Total Expense $2386.91 $2386.91


Net Income $26901.80 $26901.80


Latah Apartments Income / Expense Statement 2014

Latah Apartments

1/1/2014 - 12/31/2014 Total

Income


Admin. Fee $30.00 $30.00








Late Fee Income $1110.01 $1110.01






NSF Fee Income $50.00 $50.00

Rent Income $212759.83 $212759.83

Total Income $230121.71 $230121.71

Expense







Insurance $5354.08 $5354.08


Appliance Purchase $21.26 $21.26





Snow Removal $222.00 $222.00



Management Fees




Credit Reports, $58.16 $58.16

Legal Fees $48.00 $48.00

Office Expenses -Heading Only - Other $60.00 $60.00



Property Taxes $11622.70 $11622.70







Total Expense $75813.22 $75813.22


Mini Storage Income / Expense Statement 2014

Latah Mini Storage

1/1/2014 - 12/31/2014 Total

Income

Rent Income $29187.85 $29187.85

Total Income $29187.85 $29187.85

Expense





Management Fees








Total Expense $797.93 $797.93


Net Income $28389.92 $28389.92 Exterior Photos

Coin-op Laundry Rooms -Typical

Upper Apartment Units

Lower Apartment Units

All apartment Units

Bedrooms -Typical

Bathrooms -Typical

Apartment Floor Plan -Typical

Mini Storage Layout:

Vicinity Location

Latah Apartments and Mini Storage Sale information: Spring ... · • Average 35% +/- turn-over per...

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