12-Unit value-add investment opportunity located in the ... · Real Estate Tax 10,052 20,924...

Hickory Hill TownhomesExclusive Offering Memorandum

12-Unit value-add investment opportunity located in the Nashville MSA

COSGROVE ADVISORY GROUP

6 Cadillac Dr. Suite 100 | Brentwood TN 37027 615.997.2900 | www.marcusmillichap.com

Hickory Hill Townhomes

12Total Units

1980Year Built

1012-1032 Hickory Hill Ln

Hermitage, TN 37076 Davidson County

The 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 the Cosgrove Advisory Group of Marcus & Millichap Real Estate Investment Services of Tennessee, Inc. and should not be made available to any other person or entity without the written consent of the Cosgrove Advisory Group. 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. The Cosgrove Advisory Group and Marcus & Millichap have not made any investigation, and make 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, the Cosgrove Advisory Group and Marcus & Millichap have not verified, and will not verify, any of the information contained herein, nor has the Cosgrove Advisory Group or Marcus & Millichap conducted any investigation regarding these matters and they make 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. Seller

retains all rights and discretion to determine the offer and acceptance process including but not limited to the right to accept or reject any offer in its sole and absolute discretion. Seller shall only be bound by duly executed and enforceable agreements entered into, if any. ALL MATTERS PRIVILEGED AND CONFIDENTIAL.

NON-ENDORSEMENT NOTICEThe Cosgrove Advisory Group and Marcus & Millichap are not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this

marketing package. The presence of any corporation logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of the Advisory Group or Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of the Cosgrove Advisory

Group or 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 COSGROVE ADVISORY GROUP ADVISOR FOR MORE DETAILS.

COSGROVE ADVISORY GROUPINVESTMENT ADVISOR

PAT COSGROVE

D +1 615-997-2853C +1 615-973-5373 [email protected]

TABLE OF CONTENTS

01 - Investment Summary

02 - Property Overview

03 - Location Overview

04 - Financial Overview

05 - Demographics

Reach out to Pat Cosgrove for Price Guidance

Marcus & Millichap has been selected to exclusively market for sale the Hickory Hill Townhomes, Located in Hermitage, TN. This offering will allow a potential investor to purchase a Value-Add Opportunity, located in the path of economic growth in the Nashville MSA.

Offers should be presented in the form of a non-binding Letter of Intent, spelling out the significant terms and conditions of the Purchaser’s offer including, but not limited to: 1) asset pricing, 2) due diligence and closing time frame, 3) earnest money deposit, 4) a description of the debt/equity structure, and 5) qualification to close. The purchase terms shall require all cash to be paid at closing. Offers should be delivered to the attention of Pat Cosgrove.

AT NO POINT SHOULD TENANTS OR STAFF BE CONTACTED REGARDING THE SALE OF THE HICKORY HILL TOWNHOMES.

INVESTMENT ADVISOR

PAT COSGROVE

D +1 615-997-2853C +1 615-973-5373 [email protected]

List Price: Unpriced

Number of Units: 12Approx. Year Built: 1980Lot Size: 1.24 AcresCurrent Occupancy (as of 7-2020): 83%

Income Current Pro-Forma

Gross Scheduled Rent $130,560 $151,200

Less: Vacancy/Deductions 19.5% $25,415 7.0% $10,584

Total Effective Rental Income $105,145 $140,616

Other Income $0 $0

Effective Gross Income $105,145 $140,616

Less: Expenses 37.4% $39,273 38.1% $53,517

Net Operating Income $65,872 $87,099

Operating Data

Expenses Current Pro-Forma

Real Estate Tax 10,052 20,924

Insurance 5,892 6,069

Utilities – Total* 2,304 2,373

Repairs & Maintenance 7,813 8,047

Landscaping 1,800 1,800

Operating Reserves 3,000 3,000

Management Fee 8,412 11,249

Total Expenses $39,273 $53,517

Expenses/Unit $3,273 $4,460

Expenses/SF $3.12 $4.25

As of June, 2020Current* Potential

Unit Type # of Units Avg Sq Feet Rental Range Average Rent Average Rent /SF Monthly Income Average Rent Average Rent / SF Monthly Income

2 Bed 1.5 Bath 12 1,050 $800-$1,050 $859 $0.82 $7,730 $1,050 $1.00 $12,600

Totals/Weighted Averages 12 1,050 $859 $0.82 $7,730 $1,050 $1.00 $12,600

Gross Annualized Rents $92,760 $151,200

Notes: *Includes only occupied units. Unit 1012 is “The Office” where an on-site manager receives free rent. Units 1032 and 1034 are vacant due to repairs from recent insurance claim

PROPERTY OVERVIEW

02

The Village Apartments

Address: 1012-1032 Hickory Hill LnHermitage, TN 37076Number of Units: 12

Units Mix:● Twelve – 2 Bed 1.5 Bath – 1050 SqFt

Unit Amenities:● White or Steel Appliances● Individually Metered for Electric● Individually Metered for Water

Buildings on a Crawlspace

Cable Romex Wiring

Rigid Copper Supply/ PVC-waste Piping

Historically Low Vacancies with rents well below market

Rents Well Below Market

Lebanon Pike33,760-Vehicles Per

Day

LOCATION OVERVIEW

03

Asset Located 12.9 Miles from Vibrant Downtown Nashville

The Hickory Hill Townhomes Located in Nashville MSA

Nashville Takes Advantage ofLocal, Higher Level Education

“Vanderbilt, Belmont, and Lipscomb universitiesoffer top ranked MBA programs”Bloomberg Business, 2018

Middle Tennessee is a magnet for talent, young graduates and the types ofworkers new and growing industries seek. Considered a national hub for thecreative class, the Nashville region’s educated workforce not only provides anabundant talent pool for companies, but also bolsters the region’s vibrancy,artistic and musical essence, and competitive edge in technology and innovation.While our region supports many innovative and aggressive local programs to recruitworkers to the region, many of Nashville's most valuable workers come from the area's ownvast educational system, with its 24 accredited four-year, two-year, tech schools and postgraduate institutions. Nearly 123,000 students are enrolled in higher education in the Nashville area, the largest concentration in a four-state region. We retain 60 percent of these graduates annually in our region. More than 34 percent of residents over age 25 have a bachelor’s degree or higher, and more than150,000 residents have graduate or professional degrees.

Nashville MSA Economy Overview


Projected 6.9% Population Growth From 2018-2023

3% Class C Vacancy in Nashville MSA

FINANCIAL OVERVIEW

04

As of June, 2020

Hickory Hill Townhomes Rent Roll Summary

Unit Distribution Unit Rent

2 Bedroom

%100

Current* Potential

Unit Type # of Units Avg Sq Feet Rental Range Average Rent Average Rent /SF Monthly Income Average Rent Average Rent / SF Monthly Income

2 Bed 1.5 Bath 12 1,050 $800-$1,050 $859 $0.82 $7,730 $1,050 $1.00 $12,600

Totals/Weighted Averages 12 1,050 $859 $0.82 $7,730 $1,050 $1.00 $12,600

Gross Annualized Rents $92,760 $151,200

Notes: *Includes only occupied units. Unit 1012 is “The Office” where an on-site manager receives free rent. Units 1032 and 1034 are vacant due to repairs from recent insurance claim

Unit Unit Type Square Feet Current Rent / Month Current Rent / SF / Month Potential Rent / Month Potential Rent / SF / Month

1012 2 Bed 1.5 Bath 1,050 Vacant $0.00 $1,050 $1.00

1014 2 Bed 1.5 Bath 1,050 $800 $0.76 $1,050 $1.00

1016 2 Bed 1.5 Bath 1,050 $865 $0.82 $1,050 $1.00

1018 2 Bed 1.5 Bath 1,050 $865 $0.82 $1,050 $1.00

1020 2 Bed 1.5 Bath 1,050 $875 $0.83 $1,050 $1.00

1022 2 Bed 1.5 Bath 1,050 $900 $0.86 $1,050 $1.00

1024 2 Bed 1.5 Bath 1,050 $875 $0.83 $1,050 $1.00

1026 2 Bed 1.5 Bath 1,050 $875 $0.83 $1,050 $1.00

1028 2 Bed 1.5 Bath 1,050 $800 $0.76 $1,050 $1.00

1030 2 Bed 1.5 Bath 1,050 $875 $0.83 $1,050 $1.00

1032 2 Bed 1.5 Bath 1,050 Vacant $0.00 $1,050 $1.00

1034 2 Bed 1.5 Bath 1,050 Vacant $0.00 $1,050 $1.00

Total 12,600 $7,730 $0.61 $12,600 $1.00

Hickory Hill Townhomes Rent Roll Detail

Rent Roll Detail

As of November, 2019

Income Current Pro-Forma Notes Per Unit Per SF

Gross Potential Rent 151,200 151,200 12,600 12.00

Loss / Gain to Lease (20,640) 13.7% 0 0 0.00

Gross Scheduled Rent 130,560 151,200 12,600 12.00

Physical Vacancy (25,415) 19.5% (7,560) 5.0% [1] (630) (0.60)

Total Vacancy ($25,415) 19.5% ($10,584) 7.0% ($882) ($1)

Effective Gross Income $105,145 $140,616 $12,296 $13.66

Hickory Hill Townhomes Operating StatementOperating Statement

Expenses Current Pro-Forma Notes Per Unit Per SF

Real Estate Taxes 10,052 20,924 [2] 1,744 1.66

Insurance 5,892 6,069 [3] 506 0.48

Utilities – Total* 2,304 2,373 [3][4] 198 0.19

Repairs & Maintenance 7,813 8,047 [3][5] 671 0.64

Landscaping 1,800 1,854 [3][6] 155 0.15

Operating Reserves 3,000 3,000 [7] 250 0.24

Management Fee 8,412 8% 11,249 8% [8] 937 0.89

Total Expenses $39,273 $53,517 $4,460 $4.25

Expenses as % of EGI 37.4% 38.1%

Net Operating Income $65,872 $87,099 $7,258 $6.91

Notes and assumptions to the above analysis are on the following page

Hickory Hill Townhomes Operating Statement Notes

Notes

[1]

[2]

[3]

[4]

[5]

[6]

[7]

[8]

5% Market Vacancy Factor

Taxes in Pro-Forma reflect increase based on Fair Market Value of $1,600,000 and GSD tax rate increasing from 2.755 to 3.788

3% Increase to reflect inflation

Utilities – Total includes Electric and Trash Removal. Expense taken from T-12 of bills.

Repairs and Maintenance taken from 2019 Schedule E.

$150/unit Assumption in Current

$250/ Unit Operating Reserve – Market Standard

8% Management Fee

Notes to Operating Statement


1

2

4

3

Summit Court Apartments1

The Flats of Donelson2

East Lake Apartments3

Hermitage Garden Apartments4

Rent Comparables

Donelson Hills Apartments5

5

Rent Comparables

Hickory Hill Townhomes1012-1032 Hickory Hill Ln Hermitage, TN 37076

Total Units

12Total Occupancy

83%Year Built

1980

Date Surveyed: 7/22/2020

Unit Type SF Rent Low Rent High Rent Avg. Rent/SF

2 Bed 1.5

Bath1050 $800 $900 $859 $0.82

Summary

Application Fees / Administrative Fees $50

Water and Sewer Responsibility Tenants

Trash Removal Responsibility Landlord

Amenities Tenant pays electric, Laundry Facility

Status of W/D Connections and Appliances W/D Connections

Summit Court Apartments4716 Trenton Dr Hermitage, TN 37076

Total Units

34Total Occupancy

100%Year Built

1979



2 Bed 2 Bath 910 $977 $977 $977 $1.07

Application Fees / Administrative Fees N/A

Water and Sewer Responsibility Tenant


Amenities Tenant pays electric. Laundry Facility


Rent Comparables

The Flats of Donelson110 Hickory Hill Ct Nashville, TN 37214

Total Units

44Total Occupancy

98%Year Built

1964



2 Bed 1 Bath 900 $1,099 $1,099 $1,099 $1.22

Summary




AmenitiesTenant pays electric. Storage Unit, Newly

Renovated Units


East Lake Apartments256 Stewarts Ferry Pike Nashville, TN 37214

Total Units

61Total Occupancy

100%Year Built

1961



2 Bed 1 Bath 750 $925 $995 $960 $1.28


Water and Sewer Responsibility Landlord


Amenities Laundry Facility

Status of W/D Connections and Appliances No Connections in Units

Rent Comparables

Hermitage Garden Apartments4701 Old Hickory Blvd Old Hickory, TN 37138

Total Units

73Total Occupancy

97%Year Built

1962



2 Bed 1 Bath 960 $1,120 $1,120 $1,120 $1.17

Summary



Trash Removal Responsibility Tenant

Amenities Laundry Facility, On-Site Management

Status of W/D Connections and Appliances W/D Connections in Select Units

Donelson Hills Apartments256 Stewarts Ferry Pike Nashville, TN 37214

Total Units

30Total Occupancy

97%Year Built

1965



2 Bed 1 Bath 1,063 $999 $999 $999 $0.94


Water and Sewer ResponsibilityTenant Pays $25 Monthly Water Fee to

Landlord


Amenities Laundry Facility

Status of W/D Connections and Appliances No Connections in Units

Rent Comparables Summary

Property Year Built Unit TypeWasher/Dryer

ConnectionsSF Market Rent Net Rent Net Rent/SF

Hermitage Garden Apartments

1962 2 Bed 1 Bath Mix 960 $1,120 $1,120 $1.17

The Flats of Donelson 1964 2 Bed 1 Bath Yes 900 $1,099 $1,099 $1.22

Donelson Hills Apartments

1965 2 Bed 1 Bath No 1,063 $999 $999 $0.94

Summit Court Apartments

1979 2 Bed 2 Bath Yes 912 $977 $977 $1.07

East Lake Apartments 1961 2 Bed 1 Bath No 750 $960 $960 $1.28


1980 2 Bed 1.5 Bath Yes 1,050 $859 $859 $0.82

Averages 939 $1,002 $1,002 $1.14

Sorted by Net Rent Highest to Lowest

DEMOGRAPHICS

05

1-3-5 Mile Demographics Created on July 2020

Demographics

Population

In 2019, the population in your selected geography is 114,742. The population has changed by 26.70% since 2000. It is estimated that the population in your area will be 122,046.00 five years from now, which represents a change of 6.37% from the current year. The current population is 47.77% male and 52.23% female. The median age of the population in your area is 37.81, compare this to the US average which is 38.08. The population density in your area is 1,460.04 people per square mile.

Population

The current year racial makeup of your selected area is as follows: 75.92% White, 14.76% Black, 0.07% Native American and 2.86% Asian/Pacific Islander. Compare these to US averages which are: 70.07% White, 12.87% Black, 0.19% Native American and 5.66% Asian/Pacific Islander. People of Hispanic origin are counted independently of race.

People of Hispanic origin make up 6.59% of the current year population in your selected area. Compare this to the US average of 18.17%.

Households

There are currently 48,779 households in your selected geography. The number of households has changed by 30.08% since 2000. It is estimated that the number of households in your area will be 52,277 five years from now, which represents a change of 7.17% from the current year. The average household size in your area is 2.33 persons.

Housing

The median housing value in your area was $196,481 in 2019, compare this to the US average of $212,058. In 2000, there were 25,418 owner occupied housing units in your area and there were 12,081 renter occupied housing units in your area.

Income

In 2019, the median household income for your selected geography is $63,821, compare this to the US average which is currently $60,811. The median household income for your area has changed by 37.08% since 2000. It is estimated that the median household income in your area will be $70,099 five years from now, which represents a change of 9.84% from the current year.

The current year per capita income in your area is $33,795, compare this to the US average, which is $33,623. The current year average household income in your area is $79,333, compare this to the US average which is $87,636.

Employment

In 2019, there are 53,864 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 66.49% of employees are employed in white-collar occupations in this geography, and 33.67% are employed in blue-collar occupations. In 2019, unemployment in this area is 2.56%. In 2000, the average time traveled to work was 29.00 minutes.

Summary Based on 5-mile Radius

Hickory Hill TownhomesExclusive Offering Memorandum

12-Unit value-add investment opportunity located in the Nashville MSA


6 Cadillac Dr. Suite 100 | Brentwood TN 37027 615.997.2900 | www.marcusmillichap.com

12-Unit value-add investment opportunity located in the ... · Real Estate Tax 10,052 20,924...

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