911 Westover Avenue, Norfolk, VA 23507 · repositioning of the city has created a booming business...

O F F E R I N G M E M O R A N D U M

9 1 1 W e s t o v e r A v e n u e , N o r f o l k , V A 2 3 5 0 7

8 Uni t Mul t i fami ly P roper ty in H is tor i c Ghent Ne ighborhood

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

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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,

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Table of Contents

911 WESTOVER

2

36

50

10

SECTION 3: COMPARABLE PROPERTIESSale Comparables • Rent Comparables

S E C T I O N 2 : PROPER T Y SUMMARY Local & Regional Maps • Local Attractions • Ame-nities • Property Images

S E C T I O N 4 : F INANCIAL ANALYSISPricing Detail • Rent Roll Summary • Cash Flow Statement • Growth Rates

60

S E C T I O N 1: EXECUTIVE SUMMARYExecutive Summary • Investment Overview • Of-fering Highlights

S E C T I O N 5 : MARKE T SUMMARYEconomy Overview • Location Overview • Demo-graphic Analysis

Offering Highlights

Property Summary

Investment Summary

EXECUTIVESUMMARY

O F F E R I N G S U M M A R Y

911 Westover Avenue

Address 911 Westover Ave Norfolk VAGross Square Feet 9,600Number of Buildings 1Number of Stories 4Year Built 1910Lot Size 0.21 AcresType of Ownership Fee SimpleAverage Unit Size 1,200 SqFtLoan Type NewInterest Rate 5.00 %Year Due 2026

$725,000 8 TotalUnits

911 Westover Ave | EXECUTIVE SUMMARY 3911 Westover Ave | EXECUTIVE SUMMARY2

911 Westover AvenueOffering

9 1 1 We s t o v e r A v e n u e , N o r f o l k VA 2 3 5 0 7Marcus & Millichap is pleased to present the exclusive offering memorandum for 911 Westover Avenue located in the historic Ghent neighborhood of Norfolk, VA.

SUBJEC T PROPER T Y

The 911 Westover Avenue Offering provides an investor the opportunity to acquire a below market rate asset with upside potential. The offering contains eight (8) units in one four-story building built in 1910 and situated on 0.22 acres. There are eight (8) 1,200 square foot three bedroom one bathroom units. The subject property features refurbished hardwood floors, high ceilings, large balconies, dishwashers, and ceiling fans. Located in Ghent, Norfolk, the property's prime location enjoys the benefits of not only Hampton Roads liveliest metro, but also the most prominent arts and culture district in the entire MSA. 911 Westover Avenue also provides quick access to Downtown Norfolk and Norfolk's Waterside District.

DE VELOPMENT

Harvey Lindsay started construction on The Norfolk Gateway Office Tower located adjacent to the City Hall Light Rail Station and Court Complex in Downtown Norfolk. The 20 story building will contain 260,000 square feet of 5 star office space and a covered parking garage. The sustainable building, with completion expect-ed in 2020, will feature smart technology, efficient layouts, panoramic views, rooftop terraces, landscaped gardens and valet services. St. Paul's Apartments, a $20 million development project on 5 acres of land will contain 126 one, two and three bedroom units across 7 buildings. Amenities include a clubhouse, pool, play-ground, fitness center and dog park. Glass Light Hotel and Gallery, on the corner of Granby Street and City Hall Avenue, a $20 million remodel will feature 117 rooms and is expected to open in 2019. Tidewater Com-munity College is relocating its Visual Arts Center to Norfolk's NEON District. The 47,000 square foot develop-ment will feature a hospitality and restaurant management school and a culinary arts program. The new TCC campus is anticipated to open in 2021.

911 Westover Ave | EXECUTIVE SUMMARY 5911 Westover Ave | EXECUTIVE SUMMARY4

I N V E S T M E N T H I G H L I G H T S8 Unit Apartment Complex in the Historic Ghent Neighbor-

hood

Majority of Units Recently Renovated; However, Additional Rental Premiums may be Achieved by Making Further Interior Upgrades and by Renovating the Remaining Non-Renovated

Units

Walking Distance from Sentara Norfolk General Hospital / Eastern Virginia Medical Center

Walk Score of 77 and a Bike Score of 60, Making the Area Pedestrian Friendly

Extremely High Barrier to Entry Submarket

Central to Lifestyle Amenities

Increased Number of Young Professional Renters in Submar ket; Developers Built 1,500+ Units Since 2015 and Increased

Inventory by 8%

Vacancies in Submarket are 5.7% Below the Market's Average

4 Units Recently Remodeled; Rent Growth

Opportunity by Renovating the Remaining 4 Units

Located in Historic GhentNeighborhood

"Hampton Roads added 11,000 jobs between 2017 and 2018 in the Professional and

Business Services Sector"

- Bu re au of L ab or S t at i s t i c s

911 Westover Ave | EXECUTIVE SUMMARY 7

Local & Regional Maps

Local Attractions

Amenities

Property Images

PROPERT YSUMMARY

8 UNITS

9 1 1W E S T O V E R

AV E N U E


AV E N U E

8 UNITS

911 Westover Ave | PROPERTY ANALYSIS10 911 Westover Ave | PROPERTY ANALYSIS 11

E V E N T S & L E I S U R E

► Waterside District

► MacArthur Center

Mall

► Chrysler Museum of

Art

► The Norva

► Ted Constant Con-

vention Center

PA R K S & R E C R E AT I O N ► Norfolk Zoological

Park

► Norfolk Botanical

Garden

► Harbor Park Stadium

► Scope Arena

► Ocean View Fishing

Pier

► Elizabeth River

J O B M A R K E T

► Norfolk Southern

► ADP

► Dominion Enterpris-

es

► Naval Station Nor-

folk

► Joint Base Little

Creek - Fort Story

► Old Dominion Uni-

versity

► Norfolk State Univer-

sity

► Sentara Norfolk Gen-

eral Hospital

LOCAL AT TRAC TIONS

N O R F O L KV I R G I N I A

Naval Station Norfolk

Norfolk International

Port

Ocean View Beach Park

911 WESTOVERAVENUE

911 Westover Ave | PROPERTY ANALYSIS 13

H I S TO R I C

G H E N T“The Cultural HEART of Norfolk”

Ghent is a thriving and eclectic com-munity, offering a diverse cultural, shopping and dining experience to residents and visitors, alike. Ghent is located in central Norfolk, just minutes from downtown and the Norfolk Naval Station. Recently with the emergence of private and public investment a drastic shift in redevelopment and repositioning of the city has created a booming business district with vast corporate platforms looking for start-

up and relocation opportunities.

911 Westover Ave | PROPERTY ANALYSIS14

and Eastern Virginia Medical School , Chi ldren's Hospital of The King's Daugh-ters, and EVMS Strelitz Diabetes Center.

Immediate Access to

Major Employment CenterS E N T A R A N O R F O L K G E N E R A L H O S P I T A L

911 Westover Ave8 Three Bed Units

Two Blocks fromSentara Norfolk General

Hospital / Eastern Virginia Medical School


2 B LO C K S F R O MS E N TA R A N O R F O L KG E N E R A L H O S P I TA L

S E N T A R A N O R F O L KG E N E R A L H O S P I T A L

( S N G H )E A S T E R N V I R G I N I A M E D I C A L S C H O O L

R a n k e d B e s t N a t i o n a l H o s p i t a l i n 2 0 1 8 -2 0 1 9 f o r C a r d i o l o g y & H e a r t S u r g e r y , D i -a b e t e s & E n d o c r i n o l o g y , a n d N e p h r o l o g y .

♦ "Destination Medical Center in the Mid-Atlantic Region.♦ 1 of 5 Level 1 Trauma Centers in Virginia.♦ Home to Nightingale Regional Air Ambulance, the Re-gion's First Magnet Hospital, and Nationally Ranked Heart Program.♦ SNGH contains 525 Bed Medical Center Serving as the Primary Teaching Institution for EVMS. ♦ EVMS Strelitz Diabetes Center is Ranked 24th in the Na-tion.

WES

T T W E N T Y - F I R S T

DINING: LITTLE DOG DINER, KOTOBUKI JAPENESE, CHANELLO’S PIZZA #5, HANDSOME BISCUIT, LUNA MAYA, STREATS, RAJPUT INDIAN CUISINE, MR. SHAWARMA, PHO 79, TASTE, VOLCANO SUSHI, SUPPER, 80/20 BURGER BAR, ANDREA’S LA BELLA

LEISURE: NOFROLK TAPHOUSE, MERMAID WINERY, PINOT’S PAL-LETE, O’CONNER BREWING CO, RIP RAP BREWING CO, COEL-ACANTH BREWING, SKINNIES RECORDS

SHOPPING: TABLE 7, ANTIQUE DESIGN CENTER, CREME 321, MI-CHAEL MILLARD-LOWE ANTIQUES, LEVINE’S OF NORFOLK

WEST GHENT IS A MECA FOR ONE-OF-A KIND EXPERIENCES WITHIN THE HAMPTON ROADS MSA. WITHIN WALKING DISTANCE (1 MILE), RESIDENTS HAVE ACCESS TO A MELTING POT OF LOCAL RESTAURANTS, UNIQUE STORE-FRONTS, AND POPULAR RECREATIONAL ACTIVITIES. WEST 21ST STREET IS HOME TO TWENTY SIX POPULAR HOTSPOTS, ALONE.

5.2 miles fromNorfolk Naval

Shipyard

3.3 miles fromPortsmouth

Marine Terminals

4.6 miles fromNaval Medical

Center Portsmouth

1.6 miles fromD o w n t o w n

N o r f o l k


911 Westover Ave8 Three Bed Units

911 Westover Ave | PROPERTY ANALYSIS 21

O L D D O M I N I O NU N I V E R S I T Y

ODU adds fundamental strength to Park Place and Ghent Neigh-borhods with 24,000+ Students

and 2,500 Faculty and Staff.

"Ranked #1 in Virginia for 'Best for Vets'"- Military Times

"Among 'America's Top Colleges'"- Forbes

• 24,375 Total Enrolled Students with 763 International Students from 134 Countries• 25% of Enrolled Students are Military Affiliated• 3 Extended Locations: Peninsula Center, ODU Virginia Beach Center & ODU Tri-Cities Center• 22 Doctoral Programs & 274 Academic Programs• 335 Campus Acres• 148 Campus Buildings• 300+ Student Organizations• 18 to 1 Student to Faculty Ratio• $2.6 Billion Contributes in GDP Annually to VA's Economy

1.9 M I L E S F R O M O L D D O M I N I O N

U N I V E R S I T Y

H A M P TO N R OA D S B R I D G E T U N N E L

EASTERN VIRGINIA MEDICAL SCHOOL, CHILDREN’S HOSPITAL OF THE KINGS

DAUGHTERS, SENTARA CANCER CENTER, & SENTARA NORFOLK GENERAL HOSPITAL

► Eastern Virginia Medical School is Building $80 Million 138,000 SqFt Academic Building.

► Children’s Hospital of the King’s Daughters is Constructing $60 Million Pediatric Mental Health Facility to Open in 2022.

► Sentara Cancer Center is Building $93.5 Million 230,000 SqFt Cancer Building.

► Sentara Healthcare is Building $24 Milion 60,000 SqFt Muscu-loskeletal and Sports Medicine Office Building.

► Expansion Will Widen the Tunnel to Include a Fourth Driving Lane.

► $3.6 Billion Investment. ► Completion Expected to Conclude 2024.

► Largest Road Project in Virginia History.

O C E A N V I E W R E D E V E LO P M E N T

► Norfolk Based Marathon Development Group Bought Bay Point Marina and Little Creek Marina. Plans Include 133 Senior Apart-ments, 17 Beach Cottages, Marina Upgrade, a New Surf Rider Restaurant, and a New Clubhouse with Pool.

► Zimmer Development has Construction Plans for 148 Upscale Apartments on Pretty Lake Avenue.

► Early State Project at M Star Hotel on Shore Drive Submitted Plans for 88 Market Rate Apartments and Retail on the First Lev-el.



A Proven Va l u e A d d I n v e s t m e n t

Oppor tunity - U n i t E n h a n c e m e n t s

t o M e e t D e m a n d

U N I TA M E N I T I E S

911 Westover Avenue

presents a strong op-

erational value-add

opportunity to reposi-

tion the asset in a mar-

ket with proven upside

rent potential.

of the U n i t sVa c a n t5 0 %

Hardwood Flooring

Ceil ing Fans

Decorative Fireplace

Dishwasher

Spacious Balcony

Sale Comparables

Map

Rent Comparables

Map

COMPARABLESUMMARY

2

8 UNITS


AV E N U E

1 53

6

4

911 Westover Avenue | SALES COMPARABLES

Average Price per Unit:

$0

$40,000

$80,000

$120,000

$160,000

911WestoverAvenue

747-749 WPrincessAnne Rd

The Grand at WestGhent

742GraydonAvenue

809-813Stockley

Gdns

737 WPrincessAnne Rd

625 WPrincessAnne Rd

Avg$110,762

1 2 3 4 5 6

PROPERTY NAME SALE PRICE CLOSE OFESCROW

# OFUNITS

PRICEPER UNIT

YEARBUILT

911 Westover Avenue $725,000 8 $90,625 1910

747-749 W Princess Anne Rd $1,600,000 9/11/2018 11 $145,455 1917

The Grand at West Ghent $2,000,000 4/27/2017 18 $111,111 1914

742 Graydon Avenue $384,000 10/9/2018 4 $96,000 1913

809-813 Stockley Gdns $382,236 10/9/2018 4 $95,559 1921

737 W Princess Anne Rd $334,346 10/9/2018 3 $111,449 1918

625 W Princess Anne Rd $840,000 11/16/2018 8 $105,000 1916

1

2

3

4

5

6

911 Westover Ave | COMPARABLE PROPERTIES36

OFFERING PRICE $725,000

Price Per SF $75.52

Year Built 1910

Pro Forma Cap Rate 7.35%

8 Three Bed One Bath Units

911 WESTOVER AVE | 911 Westover Ave, Norfolk VA 8 TotalUnits

$90,625Pe r U n i t

SALE PRICE $1,600,000

Close of Escrow 9/11/2018

Price Per SF $112.44

Year Built 1917

4 One Bed One Bath Units 3 Two Bed One Bath Units

2 Three Bed One Bath Units 1 Three Bed Two Bath Unit

1 Four Bed Two Bath Unit

747-749 W PRINCESS ANNE RD | 747-749 W Princess Anne Rd 11 TotalUnits

$145,455Pe r U n i t

1

SALE PRICE $2,000,000



Year Built 1914

6 One Bed One Bath Units 6 Two Bed One Bath Units


THE GRAND AT WEST GHENT | 1000 Westover Ave 18 TotalUnits

$111,111Pe r U n i t

2

SALE PRICE $384,000


Price Per SF $77.19

Year Built 1913

3 Two Bed Two Bath Units 1 Three Bed One Bath Unit

742 GRAYDON AVE | 742 Graydon Ave 4 TotalUnits

$96,000Pe r U n i t

3

911 Westover Ave | COMPARABLE PROPERTIES38 911 Westover Ave | COMPARABLE PROPERTIES 39

SALE PRICE $382,236


Price Per SF $60.09

Year Built 1921

1 One Bed One Bath Unit 1 Two Bed One Bath Unit

1 Two Bed Two Bath Unit 1 Three Bed One Bath Unit

809-813 STOCKLEY GDNS | 809-813 Stockley Gdns 4 TotalUnits

$95,559Pe r U n i t

4

SALE PRICE $334,346


Price Per SF $75.17

Year Built 1918

1 Three Bed One Bath Unit 1 Three Bed Two Bath Unit

1 Four Bed Two Bath Unit

737 W PRINCESS ANNE RD | 737 W Princess Anne Rd 3 TotalUnits

$111,449Pe r U n i t

5

SALE PRICE $840,000



Year Built 1916


625 W PRINCESS ANNE RD | 625 W Princess Anne Rd 8 TotalUnits

$105,000Pe r U n i t

6


2

8 UNITS


AV E N U E

1

5

4

3

911 Westover Avenue | RENT COMPARABLES

Three Bedroom Rent Summary:

$0

$500

$1,000

$1,500

911WestoverAvenue

957WoodrowAvenue

625 WPrincess

Anne Road

635GraydonAvenue

BuckinghamApartments

The Aberdeen

Avg$1 ,403

PROPERTY NAME UNITS AVG SQFT AVG RENT AVG RENT/SF PROXIMITY

911 Westover Avenue 8 1,200 $1,141 $0.95

957 Woodrow Avenue 2 1,500 $1,450 $0.97 0.8 Miles

625 W Princess Anne Road 8 1,650 $1,495 $0.91 0.4 Miles

635 Graydon Avenue 6 1,200 $1,270 $1.06 0.5 Miles

Buckingham Apartments 34 868 $1,016 $1.17 0.4 Miles

The Aberdeen 8 1,100 $1,450 $1.32 0.2 Miles

1

2

3

4

5

911 Westover Ave | COMPARABLE PROPERTIES 43

1

2

3

4

5

UNIT TYPE UNITS SQFT RENT RENT/SF

3 Bed 1 Bath 8 1,200 $1,141 $0.95

TOTAL/WGT AVG 8 1,200 $1,141 $0.95

911 WESTOVER AVE | 911 Westover Ave, Norfolk VA

957 WOODROW AVE | 957 Woodrow Ave, Norfolk VA 2 TotalUnits

1918Ye a r B u i l t

1

8 TotalUnits



3 Bed 1 Bath 2 1,500 $1,450 $0.97

TOTAL/WGT AVG 2 1,500 $1,450 $0.97

AMENITIES: Large Dining Room, Tall Ceilings, Decorative Fireplace, Hard-wood Flooring, Ceiling Fan, and In Unit W&D.


3 Bed 1.5 Bath 8 1,650 $1,495 $0.91

TOTAL/WGT AVG 8 1,650 $1,495 $0.91

625 W PRINCESS ANNE RD | 625 W Princess Anne Rd, Norfolk

635 GRAYDON AVE | 635 Graydon Ave, Norfolk VA 6 TotalUnits


3

8 TotalUnits



3 Bed 1 Bath 6 1,200 $1.270 $1.06

TOTAL/WGT AVG 6 1,200 $1,270 $1.06

AMENITIES: Hardwood Flooring, Shared Porch, Central A/C, and Laundry Facility.

AMENITIES: Tall Ceilings, Balcony, Granite Countertops, Stainless Steel Appliances, Built In Microwave, Dishwasher, Hardwood Flooring, Laundry Facility, Central A/C, and Off Street Parking.

2



1 Bed 1 Bath 13 700 $750 $1.07

2 Bed 1 Bath 7 800 $1,000 $1.25

3 Bed 1.5 Bath 10 1,000 $1,200 $1.20

4 Bed 2 Bath 4 1,200 $1,450 $1.21

TOTAL/WGT AVG 34 868 $1,016 $1.17

BUCKINGHAM APARTMENTS | 1611 Hampton Blvd, Norfolk VA

THE ABERDEEN | 800 Redgate Ave, Norfolk VA 8 TotalUnits


5

34 TotalUnits



2 Bed 2 Bath 4 1,000 $1,300 $1.30

3 Bed 2 Bath 4 1,200 $1,600 $1.33

TOTAL/WGT AVG 8 1,100 $1,450 $1.32

AMENITIES: Central A/C, In Unit W&D, Dining Room, Dishwasher, Hard-wood Flooring, Decorative Fireplace, and a Balcony.

AMENITIES: Hardwood Flooring, Laundry Facility, and Screened in Porch.

4


Rent Roll Summary

Operating Statement

Cash Flow Statement

FINANCIAL

ANALYSIS

PRICE $725,000

Down Payment 25% $181,250

Number of Units 8

Price Per Unit $90,625

Rentable SqFt 9,600 SQFT

Price Per SqFt $75.52

RETURNS CURRENT PRO FORMA

Cap Rate 2.78% 7.35%

GRM Rate 6.62 5.92

Cash-on-Cash -9.91% 8.35%

Debt Coverage Ratio 0.53 1.40

FINANCING 1st LOAN

Loan Amount $543,750

Loan Type New

Interest Type 5.00%

Amortization 25 Years

Year Due 2026

IRR YEAR IRR UNLEVERED IRR LEVERED

5 17.88% 39.54%

7 16.51% 34.03%

10 14.95% 32.59%

PRICING DETAIL | 911 Westover Avenue RENT ROLL SUMMARY | 911 Westover Avenue

CURRENT POTENTIAL

UNIT TYPE # OF UNITS

AVG SQFEET

AVG RENT

AVG RENT/SF

MONTHLYINCOME

AVG RENT

AVG RENT/SF

MONTHLYINCOME

Three Bed One Bath 8 1,200 $1,141 $0.95 $9,130 $1,250 $1.04 $10,000

Totals/Averages 8 1,200 $1,141 $0.95 $9,130 $1,250 $1.04 $10,000

Gross Annualized Rents $109,560 $120,000

911 Westover Ave | FINANCIAL ANALYSIS 51

Income Current Year 1 Notes Per Unit Per SF Gross Potential Rent 120,000 122,400 [1] 15,300 12.75 Loss / Gain to Lease (10,440) 8.7% 0 0 0.00 Gross Scheduled Rent 109,560 122,400 15,300 12.75 Physical Vacancy (52,589) 48.0% (20,808) 17.0% [2] (2,601) (2.17)Bad Debt (1,152) 1.1% (9,792) 8.0% [3] (1,224) (1.02)Total Vacancy ($53,741) 49.1% ($30,600) 25.0% ($3,825) ($3)Economic Occupancy 50.95% 75.00%Effective Gross Income $55,819 $91,800 $11,475 $9.56

Expenses Current Year 1 Notes Per Unit Per SF Real Estate Taxes 9,375 9,375 [4] 1,172 0.98 Insurance 2,000 2,000 [5] 250 0.21 Utilities - Electric 1,500 1,500 [6] 188 0.16 Utilities - Water & Sewer 7,500 7,500 [7] 938 0.78 Repairs & Maintenance 4,400 4,400 [8] 550 0.46 Contract Services 2,800 2,800 [9] 350 0.29 Marketing & Advertising 400 400 [10] 50 0.04 General & Administrative 1,200 1,200 [11] 150 0.13 Operating Reserves 2,000 2,000 [12] 250 0.21 Management Fee 4,466 8.0% 7,344 8.0% [13] 918 0.77 Total Expenses $35,641 $38,519 $4,815 $4.01 Expenses as % of EGI 63.8% 42.0%Net Operating Income $20,179 $53,281 $6,660 $5.55

OPERATING STATEMENT | 911 Westover Avenue NOTES | 911 Westover Avenue

Notes to Operating Statement

[1] Current Gross Potential Rent (GPR) is based on actual rents per the current rent roll, this accounts for all 8 units.

[2] Current Vacancy reflects actuals per rent roll. Pro Forma Vacany reflects an aggressive assumption based on average submarket loss.

[3] Current Bad Debt reflects actuals per T-12. Pro Forma Bad Debt reflects a conservative improvement to operation and property stabiliza-tion.

[4] Current and Pro Forma Real Estate Taxes are based on estimated sale price and Norfolk mill rate.

[5] Current and Pro Forma Insurance expenses are estimated at $250/unit per year.

[6] Current and Pro Forma Electric Utility expenses are based on actuals per T-12.

[7] Current and Pro Forma Water & Sewer Utility expenses are based on actuals per T-12.

[8] Current and Pro Forma Repairs & Maintenance expenses are estimated at $550/unit per year.

[9] Current and Pro Forma Contract Services expenses are estimated at $350/unit per year. Contract Services include janitorial contract, painting turnover, landscaping contract, trash removal, and other contracted services.

[10] Current and Pro Forma Marketing and Advertising expenses are estimated at $50/unit per year.

[11] Current and Pro Forma General & Administrative expenses are estimated at $150/unit per year. General & Administrative expenses include travel, office supplies, computer expenses, telephone/internet, and legal fees.

[12] Current and Pro Forma Operating Reserves are estimated at $250/unit per year.

[13] Current and Pro Forma Management Fee expense is estimated at 8%.

911 Westover Ave | FINANCIAL ANALYSIS52 911 Westover Ave | FINANCIAL ANALYSIS 53

Income Year 1 2021 2022 2023 2024 2025 2026 2027 2028 2029

Gross Potential Rent 2.0% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%Loss/Gain to Lease 0.0% 2.00% 2.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%Physical Vacancy 10.00% 5.00% 5.00% 5.00% 5.00% 4.00% 4.00% 4.00% 4.00%Bad Debt 2.00% 2.00% 2.00% 1.50% 1.50% 1.00% 1.00% 1.00% 1.00%Total Vacancy 12.00% 7.00% 7.00% 6.50% 6.50% 5.00% 5.00% 5.00% 5.00%

Expenses Year 1 2021 2022 2023 2024 2025 2026 2027 2028 2029

Operating Reserves 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Real Estate Taxes 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Insurance 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Utilities 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Management Fee 8.0%

Income Current 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029Gross Potential Rent 120,000 122,400 126,072 129,854 133,750 137,762 141,895 146,152 150,537 155,053 159,704

Loss/Gain to Lease (10,440) 0 (2,521) (2,597) (1,337) (1,378) (1,419) (1,462) (1,505) (1,551) (1,597)

Gross Scheduled Rent 109,560 122,400 123,551 127,257 132,412 136,385 140,476 144,690 149,031 153,502 158,107

Physical Vacancy (52,589) (20,808) (12,355) (6,363) (6,621) (6,819) (7,024) (5,788) (5,961) (6,140) (6,324)

Bad Debt (1,152) (9,792) (2,471) (2,545) (2,648) (2,046) (2,107) (1,447) (1,490) (1,535) (1,581)

Total Vacancy (53,741) (30,600) (14,826) (8,908) (9,269) (8,865) (9,131) (7,235) (7,452) (7,675) (7,905)

Effective Gross Income 55,819 91,800 108,724 118,349 123,143 127,520 131,345 137,456 141,580 145,827 150,202

ExpensesOperating Expenses (8,800) (8,800) (8,976) (9,156) (9,339) (9,525) (9,716) (9,910) (10,108) (10,311) (10,517)

Real Estate Taxes (9,375) (9,375) (9,563) (9,754) (9,949) (10,148) (10,351) (10,558) (10,769) (10,984) (11,204)

Insurance (2,000) (2,000) (2,040) (2,081) (2,122) (2,165) (2,208) (2,252) (2,297) (2,343) (2,390)

Utilities (9,000) (9,000) (9,180) (9,364) (9,551) (9,742) (9,937) (10,135) (10,338) (10,545) (10,756)

Management Fee (4,466) (7,344) (8,698) (9,468) (9,851) (10,202) (10,508) (10,996) (11,326) (11,666) (12,016)

Total Expenses (33,641) (36,519) (38,456) (39,822) (40,812) (41,782) (42,719) (43,852) (44,839) (45,849) (46,883)

Operating Reserves (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000)

Net Operating Income 20,179 53,281 68,268 76,527 80,331 83,738 86,626 91,604 94,740 97,978 101,319

GROWTH RATE PROJECTIONS | 911 Westover Avenue CASH FLOW STATEMENT| 911 Westover Avenue

911 Westover Ave | FINANCIAL ANALYSIS54 911 Westover Ave | FINANCIAL ANALYSIS 55

Income Current Year 1Gross Scheduled Rent $109,560 $122,400Less: Vacancy/Deductions 49.1% $53,741 25.0% $30,600Total Effective Rental Income $55,819 $91,800Other Income $0 $0Effective Gross Income $55,819 $91,800Less: Expenses 63.8% $35,641 42.0% $38,519Net Operating Income $20,179 $53,281Cash Flow $20,179 $53,281Debt Service $38,145 $38,145Net Cash Flow After Debt Service -9.91% -$17,966 8.35% $15,136Principal Reduction $11,212 $11,785Total Return -3.73% -$6,754 14.85% $26,922

Expenses Current Year 1Real Estate Taxes $9,375 $9,375Insurance $2,000 $2,000Utilities - Electric $1,500 $1,500Utilities - Water & Sewer $7,500 $7,500Repairs & Maintenance $4,400 $4,400Contract Services $2,800 $2,800Marketing & Advertising $400 $400General & Administrative $1,200 $1,200Operating Reserves $2,000 $2,000Management Fee $4,466 $7,344Total Expenses $35,641 $38,519Expenses/Unit $4,455 $4,815Expenses/SF $3.71 $4.01

Purchase Price / Net Residual ValuePurchase Price/Net Residual Value (725,000) 1,447,412

Cash Flow Before Debt Financing 53,281 68,268 76,527 80,331 83,738 86,626 91,604 94,740 97,978 1,548,731

Debt FinancingLoan Amount 543,750 0 0 0 0 0 0 0 0 0 0

Loan Origination Fees (5,438) 0 0 0 0 0 0 0 0 0 0

Closing Costs 0 0 0 0 0 0 0 0 0 (101,319)

Debt Service - Interest (26,933) (26,359) (25,756) (25,123) (24,456) (23,756) (23,020) 0 0 0

Debt Service - Principal (11,212) (11,785) (12,388) (13,022) (13,688) (14,389) (15,125) 0 0 0

Cash Flow After Debt Financing (186,688) 15,136 30,124 38,383 42,187 45,594 48,482 53,459 94,740 97,978 1,447,412

Debt Coverage Ratio 1.40 1.79 2.01 2.11 2.20 2.27 2.40

Investor ReturnIRR-Unleveraged 0.00% 19.37% 17.88% 17.24% 16.51% 15.97% 15.97% 14.95%

IRR-Leveraged 8.11% 44.96% 39.54% 36.62% 34.03% 37.30% 37.30% 32.59%

Capitalization Rate 7.35% 9.42% 10.56% 11.08% 11.55% 11.95% 12.63% 12.63% 13.07% 13.98%

CASH FLOW STATEMENT| 911 Westover Avenue OPERATING DATA| 911 Westover Avenue

911 Westover Ave | FINANCIAL ANALYSIS56

Economy Overview

Location Overview

Demographic Analysis

MARKETSUMMARY

NORFOLKV I R G I N I A

P O P U L A T I O N2 4 4 , 7 0 3

C i t y O fN O R F O L K

“Naw-fok”

“Wit h t he C hes ap e a ke B ay, At lant ic o ce an and count less r ivers in our b ackyard, you are ne ver far f rom t he water. Nor fol k’s t hr iv ing ar t s community welcomes you into i t s s tudios , ga l l e r ies and up and down t he s t re e t s of downtown, t he NEON Ar ts Dis t r ic t and b e yond. I f you’re lo ok ing for wor ld-c lass c u is ine , lo ok no f ur t her ! From t radit iona l S out her n fare to a wide range of nouve au and inter nat iona l of fer ings Nor fol k’s e ater ies of fer s omet hing for e ver yone – and e ver y app et i te .”

• Encomp ass es 66 s quare mi les wit h 144 mi les of shore l ine .• S e cond most p opu lous c i ty in Virg in ia .• Name d Favor i te Amer ican City for 2018 .• S e le c te d as one of t he Top 50 Places to Trave l in 2017 in t he wor ld .• Home to t he wor ld’s l arges t nava l b as e and t he Nor t h Amer ican He adquar ters for NATO.• Nor fol k Inter nat iona l Ter mina l i s t he l arges t inter mo da l center in t he U.S .• Home to t he USS Wis cons in b att l e sh ip.• O ce an going cr u is e vess e l s regu lar y do ck at Ha l f Mo one Cr uis e and C elebrat ion center downtown.

H a m p t o n R o a d sO V E R V I E W

Hampton Roads, also known as the Virginia Beach-Nor-folk-Newport News metropolitan area, is recognized for its miles of waterfronts and beaches, military presence, har-bors, shipyards and coal piers. The metro is composed of James, Gloucester, Mathews, York and Isle of Wight coun-ties in Virginia, and Gates and Currituck counties in North Carolina, as well as the cities of Virginia Beach, Williams-burg, Chesapeake, Norfolk, Newport News, Hampton, Po-quoson, Portsmouth and Suffolk. Approximately 1.8 million people reside in the market, roughly 460,000 of whom are in Virginia Beach, the market’s most populous city.

MILITARY CONCENTRATION

It has the second-largest concentration of mil-itary personnel in the U.S. with eight military installations in the market providing a large portion of jobs.

HOSPITALITY AND TOURISM

Visitors are drawn to Williamsburg and the multiple beaches and resorts in the area that have activities for everyone.

SKILLED LABOR POOL

Technical knowledge learned in the military helps to provide a highly educated and skilled labor force.

911 Westover Ave | MARKET OVERVIEW 61

S P O R T S

E D U C AT I O N

E N T E R TA I N M E N T

► The local economy is best known for tourism and defense, but advanced

manufacturing, maritime and logistics, cybersecurity and biomedical tech-

nology are growing sectors.

► Fortune 500 headquarters include Norfolk Southern, Dollar Tree and Hun-

tington Ingalls Industries. Other companies headquartered locally include

Gold Key PHR, Amerigroup, Anthem and Stihl.

► The large military presence

includes Naval Station Norfolk,

Joint Expeditionary Base Little

Creek-Fort Story, Naval Air

Station Oceana Dam Neck An-

nex, Joint Base Langley-Eustis

Naval Shipyard and Coast Guard

Base-Portsmouth.

H A M P TO N R O A D S E CO N O M Y

14%PROFESSIONAL &

BUSINESS SERVICES

7%MANUFAC TURING

21%GOVERNMENT

11%LEISURE &

HOSPITALIT Y

17%TRADE, UTILITIES

& TRANSPORTATION

► The metro is projected to expand by 58,200 people through 2022, resulting in the formation of

28,200 households during this period.

► Median home prices that are above the U.S. level contribute to a homeownership rate of 61 percent,

which is slightly below the national rate of 64 percent.

► Approximately 29 percent of residents age 25 and older hold a bachelor’s degree; of those residents,

11 percent also have earned a graduate or professional degree.

H A M P TO N R OA D S D E M O G R A P H I C S

Q UA L I T Y O F L I F EKnown for its beaches and water recreation, the region has much to offer by way of outdoor activities and entertainment. Busch Gardens

Williamsburg, Colonial Williamsburg, the USS Wisconsin and the Virginia Aquarium are prominent attractions that draw tourist and locals

alike. Cultural activities are available at the Virginia Museum of Contemporary Art, Virginia Aquarium & Marine Science Center and Virgin-

ia Beach Amphitheater. Sports teams play at the Virginia Beach Sportsplex, Harbor Park and Scope Arena, while the Kingsmill Champion-

ship is held here as a part of the LPGA Tour. Universities include the College of William & Mary, Old Dominion University, Virginia Wesleyan

College, Hampton University and Norfolk State University.

2017 Population by Age

0-4 YEARS

6%5-19 YEARS

19%20-24 YEARS

9%25-44 YEARS

28%45-64 YEARS

25%65+ YEARS

13%

35.52017

MEDIAN AGE:

U.S. Median:37.8

$60,500 2017 MEDIAN

HOUSEHOLD INCOME:

U.S. Median:$56,300

1.8M2017

POPULATION:

Growth2017-2022*:

3.3%

658K2017

HOUSEHOLDS:

4.3%Growth

2017-2022*:

911 Westover Ave | MARKET OVERVIEW62 911 Westover Ave | MARKET OVERVIEW 63

NORFOLK // Demographics

244,703T o t a l P o p u l a t i o n

GENDER

70.2%

29.8%

$90,406Average Household Income

within 1 Mi le f rom Subject Proper ty

$308,677Median Housing Value within 1

Mi le f rom Subject Proper ty

7 , 4 8 2To t a l H o u s e h o l d s

13.14%From 2000

1-Mile Radius

3-Mile Radius

5-Mile Radius

8 UNITS


AV E N U E

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles 2017 Estimate

$200,000 or More 7.58% 4.75% 2.88%$150,000 - $199,000 5.62% 4.36% 3.10%$100,000 - $149,000 12.19% 9.75% 8.94%$75,000 - $99,999 12.10% 9.44% 10.18%$50,000 - $74,999 18.80% 16.91% 19.50%$35,000 - $49,999 13.20% 12.92% 14.79%$25,000 - $34,999 7.70% 9.71% 10.88%$15,000 - $24,999 9.22% 11.84% 12.23%Under $15,000 13.59% 20.33% 17.49%

Average Household Income $90,406 $70,759 $62,798Median Household Income $56,968 $44,565 $44,639Per Capita Income $28,560 $26,220 $24,099POPULATION PROFILE 1 Miles 3 Miles 5 Miles Population By Age

2017 Estimate Total Population 34,652 118,510 267,756Under 20 10.43% 22.58% 25.05%20 to 34 Years 63.65% 39.03% 32.25%35 to 39 Years 7.01% 6.02% 6.14%40 to 49 Years 6.34% 9.04% 9.89%50 to 64 Years 7.21% 14.04% 16.07%Age 65+ 5.34% 9.28% 10.59%Median Age 25.86 28.11 30.40

Population 25+ by Education Level2017 Estimate Population Age 25+ 18,758 68,307 163,851Elementary (0-8) 1.42% 2.86% 3.01%Some High School (9-11) 3.70% 10.80% 11.33%High School Graduate (12) 16.16% 22.87% 27.56%Some College (13-15) 23.38% 23.13% 25.14%Associate Degree Only 5.40% 6.29% 7.18%Bachelors Degree Only 26.83% 17.90% 14.76%Graduate Degree 22.83% 14.94% 9.73%

Population by Gender2017 Estimate Total Population 34,652 118,510 267,756Male Population 70.18% 54.91% 51.19%Female Population 29.82% 45.09% 48.81%

POPULATION 1 Miles 3 Miles 5 Miles 2022 Projection

Total Population 35,017 119,110 266,850 2017 Estimate

Total Population 34,652 118,510 267,756 2010 Census

Total Population 33,575 114,846 260,445 2000 Census

Total Population 13,342 91,341 237,722 Daytime Population

2017 Estimate 43,573 175,613 329,991HOUSEHOLDS 1 Miles 3 Miles 5 Miles 2022 Projection

Total Households 7,719 38,347 95,750 2017 Estimate

Total Households 7,482 37,602 94,973Average (Mean) Household Size 1.96 2.35 2.48

2010 CensusTotal Households 7,087 36,175 92,216

2000 CensusTotal Households 6,613 35,191 91,196

Growth 2015-2020 3.17% 1.98% 0.82%HOUSING UNITS 1 Miles 3 Miles 5 Miles Occupied Units

2022 Projection 7,719 38,347 95,7502017 Estimate 8,306 41,973 103,842Owner Occupied 2,575 15,311 43,055Renter Occupied 4,907 22,291 51,918Vacant 824 4,372 8,869

Persons In Units2017 Estimate Total Occupied Units 7,482 37,602 94,9731 Person Units 44.60% 34.21% 30.29%2 Person Units 33.08% 30.81% 30.80%3 Person Units 11.60% 15.73% 17.22%4 Person Units 6.38% 10.64% 11.90%5 Person Units 2.77% 5.14% 5.78%6+ Person Units 1.56% 3.47% 4.01%911 Westover Ave | MARKET OVERVIEW64

Altay UzunSenior Investment Associate

Justin FergusonInvestment Associate

Kyle P. GrossInvestment Associate

Moe IbrahimInvestment Associate

Shelby JacobsMarketing Coordinator

EXCLUSIVELY LISTED BY

Davis DiethrichAgent Candidate

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911 Westover Avenue, Norfolk, VA 23507 · repositioning of the city has created a booming business...

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