Carlyle Apartment Homes 436 Unit Value-Add in Shawnee (Kansas City), KS www.AgileRealtyCapital.com www.SummitRoadCapital.com Craig Berger, CFA CPA David Cummings, CFP Dallas Bligh Mark Kuster Scott Rosenthal February 13, 2017 Summit Road Capital LLC: Confidential, Do Not Forward
Summit Road Capital LLC: Disclaimer This presentation has been prepared by Summit Road Capital LLC. The information contained in this presentation is for informational purposes only. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. This presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Past performance is no guarantee of future performance. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. A number of statements in this presentation have been based on internal estimates by Summit Road Capital LLC and have not been independently verified. To the maximum extent permitted by law, none of Summit Road Capital LLC or its directors, employees, managers, members, or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied, is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this presentation. Such forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies. Actual future events may vary from these forecasts and you are cautioned not to place undue reliance on any forward looking statement. The statements in this presentation are made only as at the date of this presentation unless otherwise stated and remain subject to change without notice. None of Summit Road Capital LLC or its directors, employees, managers, members, or agents, nor any other person accepts any obligation to correct or update information in this presentation. Summit Road Capital LLC: Confidential, Do Not Forward
Carlyle Apartment Homes: Property Summary • Address: 7530 Cody St., Shawnee, KS • 436 Units over 31.74 Acres • Year Built: 1971 • Rentable Area: 349,611 SF • Avg. Unit Size: 802 SF • Avg. Market Rent: $698 or $0.87 per Sq Ft • Occupancy: 95% Summit Road Capital LLC: Confidential, Do Not Forward
Carlyle Apartment Homes: Unit Mix and Amenities Property Amenities Unit Square Total Rentable Unit Type Mix % Count Feet Sq. Feet • Pool STUDIO 10 517 5,170 2.29% • Playground 1BR/1BA 133 626 83,258 30.50% • Fitness Center 2BR/1BA 132 835 110,220 30.28% • 2BR/1.5BA 76 879 66,804 17.43% On-Site Laundry Facilities 2BR/2BA 60 934 56,040 13.76% • On-Site Maintenance 2BR/2BA 1 1,143 1,143 0.23% 3BR/2BA 24 1,124 26,976 5.50% TOTAL/AVG 436 802 349,611 100% • Carlyle Apartment homes is a quality property with scale, in an attractive MSA. • In-place rents are far below market. • Amenity rich property • Much opportunity to eliminate loss to lease as well as substantially reduce operating expense. Summit Road Capital LLC: Confidential, Do Not Forward
Carlyle Apartment Homes: Background & Pictures Summit Road Capital LLC: Confidential, Do Not Forward
Carlyle Apartment Homes: Background & Pictures Old Kitchen Renovated Kitchen Summit Road Capital, LLC: Confidential, Do Not Forward
Carlyle Apartment Homes: Background & Pictures Broker Notes: • Owned by Seller since 1991 • Good location in top suburban sub- market; good schools w/ middle school across the street • Roofs have been redone except for four roofs; Paint job is due since painted 5 years ago; Clubhouse could use some modernizing • Rents are too low by about $75-$100 with no Renovations, and by $140 per unit with Renos, maybe more. • Tours starting around 2/1 and bid date is week of 2/20. • Land trades for $10-$12K per door, but this has no frontage so maybe $5K per door. Build some townhomes or 2s/3s given good schools across the Street; Add off leash dog park or frisbee park; land zoned cb2 = 17-19 units per acre. Summit Road Capital, LLC: Confidential, Do Not Forward
Carlyle Apartments: Kansas City, KS Overview • Best Cities for Entrepreneurs - Entrepreneur, 2016 • Top 10 Cities for Creatives – Smart Asset, 2016 • Best Starter Cities for College Grads. – Truila & LinkedIn, 2015 • Top City for Startups – Inc., 2015 • #1 High-Tech City to Call Home – PC Magazine, 2014 • Hot Startup Hubs - SpareFoot, 2014 • Most Attractive Cities for Millennials – The Brookings Institution, 2014 • Top 10 Cities for Young Job Seekers – Business Insider, 2013 Many Good Things are Happening Here! Summit Road Capital LLC: Confidential, Do Not Forward
Carlyle Apartment Homes: Key Demographics Summit Road Capital, LLC: Confidential, Do Not Forward Source: http://www.city-data.com/city/Shawnee-Kansas.html
Carlyle Apartment Homes: Key Demographics Summit Road Capital, LLC: Confidential, Do Not Forward Source: http://www.city-data.com/city/Shawnee-Kansas.html
Carlyle Apartment Homes: Key Demographics Summit Road Capital, LLC: Confidential, Do Not Forward Source: http://www.city-data.com/city/Shawnee-Kansas.html
Carlyle Apartments: Rent Comps Show Upside One Bedroom Rental Comps. Two Bedroom Rental Comps. Year Size Average Market Rent Year Size Average Market Rent Property Property Built Sq. Feet Market Rent per Sq Ft Built Sq. Feet Market Rent per Sq Ft Arbor Square 1971 808 $ 668 $ 0.83 Arbor Square 1971 1,000 $ 785 $ 0.79 Lenexa Pointe 1972 720 $ 640 $ 0.89 Lenexa Pointe 1972 928 $ 705 $ 0.76 Louisburg Square 1965 818 $ 751 $ 0.92 Louisburg Square 1965 1,078 $ 957 $ 0.89 The Meadows 1979 748 $ 687 $ 0.92 The Meadows 1979 911 $ 731 $ 0.80 Fox Run 1972 711 $ 668 $ 0.94 Fox Run 1972 1,029 $ 775 $ 0.75 Carlyle 1971 626 $ 587 $ 0.94 Carlyle 1971 871 $ 670 $ 0.77 TOTAL/AVG 1972 739 $ 683 $ 0.90 TOTAL/AVG 1972 970 $ 791 $ 0.80 Three Bedroom Rental Comps. Year Size Average Market Rent Property Built Sq. Feet Market Rent per Sq Ft Arbor Square 1971 1,200 $ 925 $ 0.77 Louisburg Square 1965 1,528 $ 1,164 $ 0.76 The Meadows 1979 1,273 $ 984 $ 0.77 Carlyle 1971 1,124 $ 803 $ 0.71 TOTAL/AVG 436 1,281 $ 1,024 $ 0.77 Summit Road Capital, LLC: Confidential, Do Not Forward Source: Summit Road Capital
Carlyle Apartment Homes: Transaction Summary Data Transaction Summary ($US) - Carlyle Apartments Project Debt & Equity Details: Acquisition Assumptions Lot Square Footage 31.74 acres Preferred Equity Interest Rate Paid 8.0% Number of Keys / Rooms 436 GP/Sponsor Promote 30.0% • Purchase price: $27.5M Average Square Feet Per Room 802 sq. ft. Equity Investor Economics 70.0% Total Livable Square Footage 349,672 sq. ft. • Rent escalation: $634 per Unit in 2016 Total Project Equity Invested 7,600,000 Deal Sponsor Equity % 2.2% rising to $907per Unit in 2021 Total Project Debt Taken On 23,150,000 Institutional Equity % 22.6% As of 18-Jan-17 Senior Debt % 75.3% Acquisition Details: Carlyle Apartments Disposition Details: Debt Assumptions Net Cash Flow at Purchase (w/ Capex) 1,414,332 Net Cash Flow at Sale (w/ Capex) 2,724,237 Baseline Purchase Cap Rate 5.3% Project Exit Cap Rate 7.5% • LTV: 70% Purchase Price 26,500,000 Sale Price 36,323,166 Fees, Diligence Costs, Loan Origination 1,192,500 Selling Costs (1,271,311) • Coupon: 5.25% All Renovations 2,600,000 Safety Capital & Cushion 457,500 • Term: 25 years Total Uses of Funds 30,750,000 Gross Sale Proceeds 35,051,855 First & Second Lien Debt Taken On (23,150,000) Pay Off Debt Principal (20,865,520) Net Equity Brought to Project 7,600,000 Net Project Sale Proceeds 14,186,335 Purchase Price Per Key $60,780 Sale Price Per Key $83,310 Total Project Cost Per Key $69,478 Net Proceeds Per Key $32,537 This deal meets our 18% total project IRR hurdle with reasonable resale price Investor Return Metrics: Carlyle Apartments and exit cap-rate assumptions. Baseline Scenario Downside #1 Scenario Project Exit Cap Rate 7.5% Project Exit Cap Rate 8.0% Cash on Cash Return: Equity Investors 2.21 x Cash on Cash Return: Equity Investors 1.50 x Cash on Cash Return: Total Project (w/ Spon 2.52 x Cash on Cash Return: Total Project (w/ Sp 1.50 x IRR: Equity Investors 16.2% IRR: Equity Investors 8.2% IRR: Total Project (w/ Sponsor Equity) 18.9% IRR: Total Project (w/ Sponsor Equity) 8.3% Source: Summit Road Capital Summit Road Capital, LLC: Confidential, Do Not Forward
Recommend
More recommend
