eastern Washington are available for sale individually or on a portfolio ... In 2014 CNBC ranked Washington 7th for the
RIVERPOINTE APARTMENTS - 228 UNITS 2550 Duportail Street | Richland, WA CROSSPOINTE APARTMENTS - 200 UNITS 7803 West Deschutes Avenue | Kennewick, WA
CAN BE PURCHASED SEPARATELY OR AS A PORTFOLIO
OFFERING HIGHLIGHTS •
Assumable low fixed rate financing with 35 year amortization
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32 years remaining on loan term
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Actual trailing 6 month cash on cash returns approximately 10.64% prior to principal reduction of the loan
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16.14% to 18.11% Portfolio IRR’s on 10 year hold
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12.27% 2015 over 2014 increase in NOI
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$100 to $135 a month rent increases being achieved over market rents with limited upgrades to the units
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Low market vacancy of 2.6% for Benton and 1.9% for Franklin Counties
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One of the most dynamic economies in the country
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Historically high rate of job/population growth
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Quality apartment communities
TRI-CITIES, WASHINGTON
APARTMENTS AVAILABLE
OPPORTUNITY
OFFERING Gallelli Real Estate (GRE) is pleased to present this offering for the sale of the 100% fee simple interest in the 228 unit Riverpointe Apartments located in Richland, Washington and the 200 unit Crosspointe Apartments located in Kennewick, Washington. Each property is being offered for sale on a cash to the assumption of the existing 35 year HUD financing that is in place on the properties. These two quality apartment properties located in the Tri-Cities area of eastern Washington are available for sale individually or on a portfolio basis.
Riverpointe Loan: HUD 223(f) original loan amount of $17,298,100, existing loan of $16,623,833 as of 12/18/15 at 3.38% interest (MIP an additional 49 basis points) and 35 year amortization. Crosspointe Loan: HUD 223(f) original loan amount of $14,907,600, existing loan of $14,337,786 as of 12/18/15 at 3.48% interest (MIP an additional 49 basis points) and 35 year amortization.
The Tri-Cities rental market is one of the tightest in the state of Washington. The rental market has remained robust with the Benton County apartment vacancy rate reported at 2.6% in fall of 2015. Franklin County was even tighter at 1.9% vacancy. The statewide average was 3.4%. Over the next four years REIS projects annualized rents to increase 3.3%. Riverpointe and Crosspointe have successfully upgraded a number of units achieving monthly rental increases of $100 to $135 per upgraded unit. Upgrade costs have been averaging about $6,000 per unit. This equates to an additional $2,000 to $3,000 more in upgrade costs above a “Heavy Turn” unit. RIVERPOINTE
CROSSPOINTE
PORTFOLIO
$23,000,000
$21,000,000
$44,000,000
228
200
428
$100,877
$105,000
$102,804
CAP RATE
7.04%
6.59%
6.82%
CASH ON CASH (COC)
10.05%
8.09%
9.06%
COC PRIOR TO PRINCIPAL REDUCTION
14.17%
11.48%
12.80%
CAP RATE
6.14%
6.12%
6.13%
CASH ON CASH (COC)
7.07%
6.72%
6.89%
COC PRIOR TO PRINCIPAL REDUCTION
11.19%
10.10%
10.64%
CURRENT OCCUPANCY
92.97%
94.87%
93.56%
SALE PRICE
RENTAL MARKET
UNITS
With the high cost of living in most west coast metropolitan areas, including Portland and Seattle, companies, employees and retirees are attracted to the Tri-Cities area for its low living costs. The Tri-Cities is the most affordable metropolitan area in the Northwest. The skilled workforce, retirees, and empty nesters still enjoy the close proximity to Seattle and Portland. With the stable economy and explosive growth that has occurred, apartment communities have filled up quickly. Some complexes are experiencing near 100% occupancy.
PRICE PER UNIT PRO FORMA RETURNS
ACTUAL RETURNS
EMPLOYMENT HIGHLIGHTS •
The Tri-Cities economy is a bright spot in Washington State and across the nation. In November 2015, the Tri-Cities area registered three years of year-over-year job growth.
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Tri-Cities has had three years of continuous job growth fueled by the private sector.
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In late 2014 Money Magazine ranked Richland as one of the best places to find a new job with 10.3% projected job growth through 2018.
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In 2014 CNBC ranked Washington 7th for the Top States for Business.
CASH FLOW The existing HUD loans provide for one of the safest leveraged investments available anywhere today. GRE’s first year pro forma shows a cap rate of 6.68% with cash-on-cash returns projected near 13.0% prior to principal reduction of the loan. These numbers also include an annual replacement reserve of $500 per unit for Riverpointe and $400 for Crosspointe. This reserve level is well above the amount that is normally applied to underwrite multi-family units. With this additional cash reserve, the properties can be maintained at a level that will allow for the properties to compete for “top of the market rents” for many years to come.
LOCATION
TRI-CITIES, WASHINGTON The Tri-Cities area, Situated at the confluence of the Columbia, Snake, and Yakima Rivers in southeast Washington, the Tri-Cities represent the KennewickPasco-Richland Metropolitan Statistical Area in Benton and Franklin counties.
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ROD BALLINGER Senior Vice President bre lic 01279441
[email protected] (855) 784-2700
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[email protected] (855) 784-2700
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The region’s economy is anchored in bio and hightechnology, manufacturing, service industry, government and agriculture. Major employers include Battelle/Pacific Northwest National Laboratory, URS, CH2M Hill, ConAgra Foods Lamb Weston, Bechtel National, Kadlec Medical Center, Amazon.com, Tyson Fresh Meats, and Lockheed Martin. Farms cover over a little more than a million acres in Benton and Franklin Counties; potatoes, wheat, apples, grapes, alfalfa, strawberries, asparagus, corn and hops are the largest producers here. Much of this produce is shipped from the port facilities in the Tri-Cities to the Pacific Rim and by Railex to major cities on the east coast.
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Department of Energy national laboratory, high-tech firms, environmental and engineering companies to food growers and processors, wineries and manufacturers. Efficient air, water, rail, and ground transportation, a stable business environment, advanced health care technology and an excellent educational system are just a few reasons why the TriCities is a great place to invest.
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The Tri-Cities is the northwest’s most exciting growth region. Home to businesses ranging from a U.S.
George Washington Way
The Tri-Cities community is located three and a half hours from Seattle, WA (225 miles) and Portland, OR (218 miles) and is the fourth largest MSA. Since 2000, the Tri-Cities have been named the fastest growing metro in Washington State. Current population estimates for Benton and Franklin counties is nearly 275,740.
