UNIVERSITY VILLAS
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UNIVERSITY VILLAS RARE APARTMENT OPPORTUNITY ACROSS FROM BOOMING GRAND CANYON UNIVERSITY OFFERING MEMORANDUM UNIVERSITY VILLAS 5137 N 29TH AVENUE PHOENIX, ARIZONA 85017 Ryan Ash t 602-525-4877 [email protected] Mike Woodrick t 480-540-1504 [email protected]
Transcript of UNIVERSITY VILLAS
UNIVERSITY VILLAS
RARE APARTMENT OPPORTUNITY ACROSS FROM BOOMING GRAND CANYON UNIVERSITY
OFFERING MEMORANDUM
UNIVERSITY VILLAS 5137 N 29TH AVENUE PHOENIX , ARIZONA 85017
Ryan Asht [email protected]
Mike Woodrickt [email protected]
01EXECUTIVE SUMMARY
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02VALUATION SUMMARY
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03PHOENIX MSA OVERVIEW
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EXECUTIVE SUMMARY
DIRECTLY ACROSS FROM GRAND CANYON UNIVERSITYUniversity Villas is located directly across the street from the booming Grand Canyon University (GCU). The University’s 300-acre campus has gone through a $1.2 billion dollar investment in technologies, infrastructure, and expansion over the past 10 years, providing a tremendous benefit to the local submarket through added employment, educational opportunities, and a sharp increase in rents and values. The campus enrollment in 2014 was 8,500 students and the current enrollment has now surpassed 24,000 students. GCU’s 5-year forecast for enrollment is to grow to over 30,000 students and will expand the 300 acres campus to 400 acres. 4
GRAND CANYON UNIVERSITY ECONOMIC IMPACTElliot Pollack & Company recently reported GCU will pump an estimated $660 million, including wages of more than $250 million, into the immediate local economy each year. Tourism from the on-campus hotel and restaurant will add another $9.8 million. Further, GCU has had an $11 billion overall economic impact in the last 10 years which includes tax revenues of $300 million for the state, $85 million for the county and $73 million for the City of Phoenix.
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GCU DEBUTS NEW COLANGO COLLEGE OF BUSINESSIn 2019, The Colangelo College of Business, home to more than 16,000 traditional and online students, officially opened a new 150,000 square-foot facility with 81 offices and 61 classrooms on the GCU campus. The Colangelo College of Business is among the largest business schools in the country with approximately 4,100 students pursuing degrees at the Phoenix campus and more than 12,000 attending classes online providing a strong, well-qualified workforce for Arizona, especially on the west side of Phoenix.
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GCU STATE OF THE ART STUDENT & ATHLETIC FACILITIESGCU was ranked #7 in the nation for best college campus due in large part to the University’s commitment to providing its students with a spirit of community and engagement coupled with the rapid expansion of student state-of-the-art facilities that have been built in the last 5 years. Among the new facilities in recent years are the Colangelo College of Business Building, new Mechanical and Biomedical Engineering Building, Student Life Building, Canyon Activity Center, New 4 Story Office Building, a new GCU Hotel and Restaurant, and several large high rise-parking garages. In addition, GCU has taken a huge leap forward in attracting national athletic talent by adding state-of-the-art Sport Facilities including a new Soccer, Baseball, Softball, Tennis, and Beach Volleyball Stadiums, as well as GCU Arena(a 135K SF 7,000 seat stadium that hosts the men’s and women’s basketball teams along with conventions, concerts, and other sporting events).
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CENTRAL CORRIDOR & DOWNTOWN PHOENIXUniversity Villas is centrally located and just a 10-minute commute to the Central Corridor and 15-minute commute to the Downtown Phoenix. These employment centers hosts a dynamic mix of premier office, high end retail and hospitality development serving as a focal point for business and entertainment activity in Phoenix. Both the Central Corridor and Downtown Phoenix are vibrant infill locations experiencing a residential revival that has led to unprecedented rental demand that is now being pushed west into the neighborhood University Villas is located in.
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VALUE-ADD UPSIDECurrent ownership has upgraded the interior of unit with new flooring, cabinets, countertops, vanities, faucets/fixtures, appliances, and added washer/dryer and is achieving $1,250 rents. New ownership has the opportunity to continue to upgrade the units, add washer/dryer and further increase rental rates. Additional rent lift is attainable through a higher level, premium upgrade resulting in an additional $75-$100 on top of the standard improvement and washer & dryer improvements.
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GCU GROWING BEYOND CAPACITY = STUDENT HOUSING OPPORTUNITYDespite nearly every bit of free space around the GCU campus being purchased by the college to build new student housing, there still is not enough. Given University Villas location, directly across the street from the main campus, new ownership will have the opportunity to shift to a student housing model and draft off the lack of available student housing on the GCU’s Campus.
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UNIVERSITY VILLAS IS THE IDEAL INVESTMENT OPPORTUNITYUniversity Villas represents the ideal mid-size apartment opportunity that checks all the boxes for an investor. Those include the following:• Directly Across from Booming Grand Canyon
University (GCU)• Unit Mix Consists of All 2 Bedroom Units• Single Story – Low Density• Individually Metered w/ Individual HVAC’s and
Water Heaters• Pitched Roofs, Block Construction • Swimming Pool & Sun Deck• 100% Occupied with a Waiting List• Value-Add Upside - $300 Additional Upside • 10-15 Minutes from Central Corridor and
Downtown Phoenix Corridors• Potential Student Housing Opportunity • 2021 GCU on Campus Enrollment is over 24,000,
5 YR Forecast is over 30,000
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VALUATION SUMMARY
Executive SummaryPROPERTY OVERVIEWNUMBER OF UNITS 18
YEAR BUILT 1962
LIST PRICE $4,500,000
PRICE PER UNIT $250,000
PRICE PER SF $294.12
RENTABLE SF 15,300
AVERAGE SF PER UNIT 850
AVERAGE RENT PER UNIT $1,250
AVERAGE RENT PER SF $1.47
FINANCING TERMSDOWN PAYMENT $1,575,000
PROPOSED NEW LOAN $2,925,000
LOAN-TO-VALUE 65%
INTEREST RATE 3.25%
LOAN TERM 5 Year
AMORTIZATION Interest Only
PROFORMA PER UNIT DOLLARS
EFFECTIVE GROSS INCOME $15,150 $272,700
LESS: OPERATING EXPENSES 2,650 47,705
LESS: CAPITAL RESERVES 250 4,500
NET OPERATING INCOME 12,250 220,495
FINANCIAL RETURNCAP RATE 4.89%
CASH ON CASH RETURN 7.96%
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Unit Mix & Proforma Market RentsUNIT
DESCRIPTIONNO.
OF UNITS%
TYPEUNIT SQ. FT.
PROFORMA RENTS
PROFORMA RENT / SF
PROFORMA MONTHLY RENT TOTAL
PROFORMA ANNUAL RENT TOTAL
TOTAL SQ. FT.
2 BDRM / 1 BATH 18 100% 850 $1,250 $1.47 $22,500 $270,000 15,300
TOTAL / AVG. 18 100% 850 $1,250 $1.47 $22,500 $270,000 15,300
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Underwriting
INCOME PROFORMA
GROSS SCHEDULED RENT ASSUMPTIONS $270,000
GROSS POTENTIAL INCOME $270,000
LESS: VACANCY (5.0%) ($13,500)
TOTAL RENTAL INCOME 95.00% $256,500
PLUS: RUBS INCOME $600 $10,800
PLUS: OTHER INCOME $300 $5,400
EFFECTIVE GROSS INCOME $272,700
EXPENSES PER UNIT
REPAIRS & MAINTENANCE $400 $7,200
PAYROLL $200 $3,600
ADMINISTRATIVE/ADVERTISING $100 $1,800
UTILITIES $750 $13,500
TOTAL VARIABLE EXPENSES $1,450 $26,100
TAXES $430 $7,745
INSURANCE $200 $3,600
MANAGEMENT FEE 4.0% $10,260
TOTAL OPERATING EXPENSES $2,650 $47,705
PLUS: CAPITAL RESERVES $250 $4,500
TOTAL EXPENSES $2,900 $52,205
NET OPERATING INCOME $220,495
DEBT SERVICENEW FINANCING - $2,925,000 (65% LTV)
DEBT SERVICE (3.25% I/O) $95,062
CASH FLOW AFTER DEBT SERVICE (7.96%) $125,433
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PHOENIX MSA OVERVIEW
Metro Phoenix at-a-Glance
- MOODY’S ANALYTICS -
POPULATION
- BUREAU LABOR STATISTICS -
EMPLOYMENT
- MOODY’S ANALYTICS -
MEDIAN HH INCOME
2.1% YOY INCREASE5,016,060
2.8% YOY INCREASE60,500+
0.3% YOY INCREASE$65,872
- REIS -
AVG. ASKING RENT
8.7% YOY INCREASE$1,250
Trade, Transportation & Utilities
Professional & Business Services
Education & Health Services
Government
Leisure & Hospitality
Financial Activities
Construction
Manufacturing
Other Services
Information
Mining & Logging
19% Trade, Transportation & Utilities
17% Professional & Business Services
16% Education & Health Services
11% Government
11% Leisure & Hospitality
9% Financial Activities
6% Construction
6% Manufacturing
3% Other Services
2% Information
0% Mining & Logging
DIVERSIFIED & RESILIENT ECONOMY
MAJOR EMPLOYERS
FORTUNE 500'S
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#1 State for Future Job Growth
#1 | Fastest Growing Cities (U.S. Census Bureau)
#1 | For Small Business Hiring Growth (Paychex)
FIFTH | Largest City in America (U.S. Census Bureau)
TOP 20 | For Tech Startups (Inc.Com)
#1 | In Construction Jobs Added (Associated General Contractors of America)
ASU IS #1 | In the Country for Innovation (U.S. News & World Report)
TOP 10 | Most High-Tech City in the U.S. (Business Insider)
TOP 20 | Best Metro for Young Professionals (Forbes)
TOP 15 | State for Health Care Quality (U.S. News & World Report)
THE 2ND BEST | Airport in the Country (Sky Harbor) (The Points Guy)18
OPERATIONSValley Metro Rail operates 365 days a year, 20+ hours a day, with 12-minute peak frequency. The cost of operations is supported by rail member cities, passenger fares and advertising.
Rail service is coordinated with bus to provide a seamless transit network for customers. Transit passes can be purchased at fare vending machines located at each station, online or from retail outlets valleywide. Security officers regularly patrol the system and ask passengers at random for proof of payment. Violators are subject to fines ranging from $50 to $500 and can even lose their transit privileges.
The Valley Metro Rail system connects the region to the cities of Phoenix, Tempe and Mesa. It provides connections to work, education and entertainment. There are many sports, shopping, restaurants and arts and culture destinations along the line. Valley Metro Rail also connects to Phoenix Sky Harbor International Airport with PHX Sky Train® at the 44th St/Washington station.
Rail is a catalyst for jobs and economic development with $12.2 billion in public and private sector investment since 2008.
FUTURE EXPANSIONFive high-capacity extensions are planned or under construction to create a 50-mile system by 2030. The Valley Metro Rail Board of Directors sets the policy direction for the system with the intent of advancing regional public transit in the Valley.
FUNDING SOURCES
TEN BUSIEST STATIONS1. 19th Ave/Dunlap
2. Mesa Dr/Main St
3. Gilbert Rd/Main St
4. 19th Ave/Montebello
5. 44th St/Washington
6. 19th Ave/Camelback
7. McDowell/Central Ave
8. Glendale/19th Ave
9. University Dr/Rural
10. Indian School/Central Ave
Fares Member Cities Federal Advertising
23%
2%3%
72%
valleymetro.org 602.262.7433 | TTY 602.251.2039
101 N. 1st Ave., Suite 1400, Phoenix, AZ 85003
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LEGENDValley Metro Rail
Northwest Phase II Light Rail Extension
Tempe Streetcar
Capitol/I-10 West Phase I Light Rail Extension
Capitol/I-10 West Phase II Light Rail Extension
South Central Light Rail Extension
West Phoenix Transit Corridor Study
Northeast Transit Feasibility Corridor Study
Operations and Maintenance Center Expansion
Metro Light RailMETRO Light Rail connects the cities of Phoenix, Tempe and Mesa and also connects to Phoenix Sky Harbor International Airport with Phoenix Sky Train at the 44th Street & Washington station. The initial 20-mile line opened in 2008. Two extensions began service by 2016 adding six more miles and connecting downtown Mesa to northwest Phoenix. Five high-capacity extensions are planned or under construction to create a 50-mile system by 2030. METRO light rail served over 15 million total passengers in 2019, making it the 14th busiest light rail in the country.
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#2Best Airport in the U.S.The Points Guy 2019
$106MDaily Economic Impact
57,000Employees at the Airport
EASY ACCESS with Phoenix Sky Train & Light Rail
DAILY ACTIVITY 1,200+ Landings & Takeoffs, 126,000 Passengers, 2.1M Pounds of Air Cargo
LARGEST Commercial Airport in American Southwest
Sky Harbor International Airport
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CONTACT INFORMATIONRyan Asht [email protected]
Mike Woodrickt [email protected]
2398 E. Camelback Road, Suite 950 Phoenix, Arizona 85016Licensed as Newmark Knight Frank Knight Frank Multifamily in Arizona
