student housing at melrose street

Transcription

STUDENT HOUSING AT MELROSE STREET
8 Units | 34 Bedrooms
Off-Campus Student Housing
Across the Street From
Penn State - Hazleton Campus
7 Melrose Street
Hazleton, Pennsylvania
Offering Memorandum
The following disclaimer applies to the attached Offering Memorandum (“Memorandum”) and you are,
therefore, advised to read this Disclaimer carefully before reading, accessing or making any other use of the Offering Memorandum or other information supplied in connection with the Property.
The Memorandum shall not constitute an offer to sell the Property. A sale of the Property shall only take
place upon the execution of an Agreement of Sale that has been signed by Buyer and Seller and all conditions
and contingencies contained in the Agreement of Sale have been satisfied prior to settlement.
Neither Rittenhouse Realty Advisors (“RRA”) nor any other third parties have been authorized to give
any information other than what has been provided in the Memorandum. Notwithstanding the foregoing, RRA
does not make any representation as to the completeness or accuracy of the information contained in the Memorandum or the value or performance of the Property either past, present or future. The information contained in
the Memorandum shall not be relied upon as a promise or representation as to any condition, value or performance of the Property. RRA and its owners, members, shareholders, managers, employees, agents and affiliates
expressly disclaim any and all liability for any and all representations, either express or implied, arising from any
statements, warranties, representations or information provided in the Memorandum or from the omission of any
such representations, statements, warranties or information from the Memorandum. It is the sole responsibility
of any recipient of the Memorandum to verify the information contained therein and to conduct the proper due
diligence concerning the Property.
Qualified prospective purchasers of the Property shall be afforded an opportunity to conduct inspections
of the Property. It is expected that such qualified purchasers shall conduct any and all inspections and evaluations of the Property deemed necessary by them.
RRA and Seller reserve the right, at their sole discretion, to reject any and all expressions of interest
concerning the Property from third parties, including the termination of any ongoing discussions and/or negotiations. The Memorandum is subject to withdraw, cancellation or modification by RRA or Seller at any time. Seller shall have no legal obligation to any party that has received or reviewed the Memorandum unless and until a
written Agreement of Sale has been fully executed, delivered and approved by Seller and Seller’s counsel; and
all contingencies and/or conditions to Seller’s obligation to settle have been satisfied.
1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA
215.454.2852 | info@rittenhouserealty.com
2
Table of Contents
Pricing & Financial Analysis
Executive Summary
5
Financial Analysis
7
Proposed Rent Schedule
8
Property Description
Property Details
10
Site Plan/Aerial
11
Floor Plan
12
Amenities
13
Property Photographs
14
Market Overview
Competitive Rental Market Survey
18
Location Overview
19
1628 John F. Kennedy Boulevard, Second Floor | Philadelphia, PA 19103
3
PRICING & FINANCIAL ANALYSIS
Executive Summary
Financial Analysis
Rent Roll Summary
Executive Summary
Investment Highlights

Located Directly Across the Street from Penn State - Hazleton Campus

Newly Constructed (2009) Student Housing Featuring Fully Equipped Kitchens, Upgraded Flooring,
and Central Air and Heat

High Efficiency Tankless Water Heaters for Each Unit

Pitched Roof with Solar Energy Panels

Coin Operated Laundry Facility On Site

Secure Building Access, Closed Circuit Security Cameras and High Speed Internet
Pricing
Offering Price
$1,200,000
Number of Units
8
Number of Bedrooms
34
Price per Bedroom
$35,294
Pro Forma Cap Rate (Less Reserves)
8.9%
Terms of Sale
Offered free and clear of debt.
All cash at closing.
5
Executive Summary
Investment Overview
Rittenhouse Realty Advisors extends to qualified investors the opportunity to acquire the fee simple interest in
this 8 unit (34 bedroom) new construction, two-story student housing apartment building situated at 7 Melrose
Street in Hazleton, Pennsylvania directly across the street from the Penn State - Hazleton Campus.
The building is a two-story apartment building with 8 student housing units, comprised of 6, four-bedroom units
and 2, five-bedroom units. Each unit is separately metered for water and electricity, and is equipped with high
efficiency tankless water heaters as well as central air conditioning and heat. Amenities in each unit included fully
equipped kitchens, two full bathrooms, upgraded laminate flooring and ample storage. In addition, the property
features off-street parking, secure building access with security cameras, sprinkler system, hardwired smoke detectors, on-site laundry facility and roof-installed solar panels.
The property is being offered for sale via the original lender, post construction. The property was “taken back”
from the borrower and is completely vacant. It is situated directly across the street from Penn State University’s
Commonwealth Campus, PSU Hazleton, with current enrollment of approximately 1,000 students. It presents an
excellent opportunity for the new owner to capitalize on the captive local student housing market, and execute a
full scale re-branding and marketing campaign to return the property to stabilization.
6
Financial Analysis
(8 Units; 34 Bedrooms)
2010 Actual
2011 Actual
2015 Pro Forma
Pro Forma Assumptions
INCOME
Rental Income
Total Proposed Rent
$209,900
Less: Vacancy
Less: Concessions
Net Rental Income
$273,664
Per Proposed Rent Schedule ($20,990 x 10 Months)
(10,495)
5% Estimate
(2,099)
1% Estimate
$257,861
$197,306
Other Income
Laundry Income
Misc. and Other Income
Parking Income
$0
$0
$3,060
26,395
19,824
800
3,825
0
0
$7.50 Per Bed Per Month Estimate
$100 per Unit Estimate
10,612
22,395
0
$40,832
$42,219
$3,860
$314,496
$300,080
$201,166
Real Estate Taxes
$8,403
$19,163
$18,641
Utilities
28,738
30,415
33,457
2011 Actual Plus 10%
7,839
1,784
3,200
Trash
0
0
800
Life, Safety & Licenses
0
0
400
$44,980
$51,362
$56,498
$7,062
$9,000
$10,892
$10,058
5% Management Fee
Reimbursement Income
Total Other Income
TOTAL INCOME
EXPENSES
Fixed Expenses
Insurance
Total Fixed Expenses
Per 2014 RealQuest; 2 Parcels ($18,212 + $429)
Variable Expenses
Management Fee
Payroll
0
0
13,600
$400 per Bedroom Estimate
36,592
36,196
6,800
$200 per Bedroom Estimate
Turnover
0
0
2,400
60% at $500 per Unit Estimate
Landscaping and Snow Removal
0
0
1,200
Repairs and Maintenance
Advertising and Marketing
600
338
1,200
General and Administrative
29,283
39,721
1,200
$75,475
$87,147
$36,458
$120,455
$138,509
$92,956
$194,041
$161,571
$108,210
$0
$0
($2,000)
$194,041
$161,571
$106,210
Total Variable Expenses
TOTAL EXPENSES
NET OPERATING INCOME
Capital Reserves
NOI Less Reserves
$4,557
7
Proposed Rent Schedule
Count
Unit No.
Unit Type
Proposed Rent
Per Bedroom
Bedrooms
Per Unit
Proposed Rent
Per Unit
1
M-1
4 Bedroom / 2 Bath
$625
4
$2,500
2
M-2
4 Bedroom / 2 Bath
$625
4
$2,500
3
M-3
4 Bedroom / 2 Bath
$625
4
$2,500
4
M-4
4 Bedroom / 2 Bath
$625
4
$2,500
5
M-5
4 Bedroom / 2 Bath
$625
4
$2,500
6
M-6
5 Bedroom / 2 Bath
$599
5
$2,995
7
M-7
4 Bedroom / 2 Bath
$625
4
$2,500
8
M-8
5 Bedroom / 2 Bath
8
Total
$599
5
$2,995
$4,948
34
$20,990
Monthly Total Proposed Rent
$55,940
Annual Total Proposed Rent
$671,280
8
PROPERTY DESCRIPTION
Property Details
Site Plan / Aerial
Floor Plan
Amenities
Property Details
STUDENT HOUSING AT MELROSE STREET
Property Address
7 Melrose Street; Hazleton, Pennsylvania 18202
County
Luzerne
Municipality/Township
Butler Township
Zoning
R-1 (Residential)
APN
58-S7S5-002-006-000
Lot Size
0.92 Acres / 39,901 Square Feet
Year Built
2009
No. of Buildings
1
No. of Stories
2
No. of Units
8
No. of Bedrooms
34
Rentable Square Feet
Parking
12,870±
24 Off-Street Spaces
Property Construction
Basic Construction
Concrete block
Floors
Concrete on grade, first floor, composite panels over wood joists upper floors
Exterior Walls
Concrete block and vinyl siding
Framing
Steel framing on a concrete slab
Roof
Gable framed roof with fiberglass shingles
Windows
Vinyl casement with thermal glazing
Pedestrian Doors
Glass, wood and metal
Utilities
Electric
Gas
Phone/Cable
PPL Utilities
UGI Services
Verizon
Water
Hazelton City Authority
Sewer
Greater Hazleton Joint Sewer
Mechanical
HVAC
Mitsubishi split system with two pad mounted condensing units and electric heat pumps
located along the eastern and western sides of the building
Wiring
100 amp service
Fire Protection
Hardwired smoke detectors; central fire alarm system; fully sprinklered with a wet system
Security
Entry card system
10
Site Plan/Aerial
11
Floor Plans
12
Amenities
 Fully Furnished, Four and Five-Bedroom Units
 Modern Kitchens with New, Full Size Appliances
 Custom Closets
 Laundry Facilities On Site
 Energy Efficient Lighting
 Parking Available
 Situated Across the Street of Penn State - Hazleton Campus
13
14
15
16
MARKET OVERVIEW
Location Overview
Subject Property
7 Melrose Street
Hazleton, PA
Units
8
Unit Mix
4 Bedroom / 2 Bath
5 Bedroom / 2 Bath
Rent per Bed
(Proposed
Monthly)
$625
$599
Utilities
Occupancy
N/A
Elec
H/W
Heat
C/W &
Sewer
Owner
Owner
Owner
Owner
COMPARABLE STUDENT HOUSING RENTAL PROPERTIES
Property / Address
Units
1
39 Route 93
Hazleton, PA
4
2
26 Airport Road
Hazleton, PA
5
3
416 E. Samuels Avenue
Hazleton, PA
3
4
9 Park Street
W. Hazleton, PA
4
5
559 Washington Street
Freeland, PA
5
Utilities
Rent per Bed
(Monthly)
Occupancy
(2) 1 Bedroom
$450-$550
$650
(3) 1 Bedroom
$500
Unit Mix
(2) 2 Bdr "Shared" Units
$300 or $450
(3) 1 Bedroom
$400
(2) 1 Bedroom
$400
$300
(5) 1 Bedroom
$400
Elec
H/W
Heat
C/W &
Sewer
N/A
Owner
Owner
Owner
Owner
80%
Owner
Owner
Owner
Owner
100%
Owner
Owner
Owner
Owner
100%
Owner
Owner
Owner
Owner
N/A
Owner
Owner
Owner
Owner
18
Location Overview
The subject property is situated in Sugarloaf Township in the northern suburbs of the City of Hazleton in the south central
portion of the Scranton-Wilkes-Barre MSA. The Scranton MSA is located in northeastern Pennsylvania, and incorporates
the counties of Lackawanna, Luzerne and Wyoming, and the cities of Scranton, Wilkes-Barre and Hazleton. The property
is located approximately 1.6 miles to the north of the City of Hazleton, which is about 30 miles south of Scranton/WilkesBarre. Philadelphia is located 97 miles to the south, and New York City 127 miles to the east.

Location & Access
The area is well served by interstate highways providing access to the eastern seaboard, including Interstates 80, 81, 84
and 476 (the Northeast Extension of the Pennsylvania Turnpike.). I-81 largely follows the Appalachian Mountains from
Fishers Landing, New York at the Canadian border, south to Dandridge Tennessee. The largely rural route has become a
heavily used trucking corridor as an alternative to Interstate 95. It intersects with many major east/west interstates in
Pennsylvania including Interstate-76, the Pennsylvania Turnpike, Interstate-83 in Harrisburg, Interstate-78 above Lebanon, Intersate-80 near Hazleton, and Interstate-84 near Scranton.
The subject property is located off of Airport Beltway, a local collector road connecting PA Route 309 and PA Route 93.
Route 309 is a local highway extending from the boundary of Philadelphia through Allentown and Hazleton to Bowman
Village northwest of Wilkes-Barre. Business Route 309/Church Street is the main north//south commercial street through
Hazleton. PA Route 93 is a short local highway extending east/west through Hazelton and connecting with the local boroughs of Orangeville, Berwick and Nesquehoning. It is the major east/west commercial corridor through Hazelton, connecting with every state route into the city, as well as I-80 and I-81 northwest of the City. The subject is located approximately 1- ½ miles east of the interchange of PA Route 93 and I-81.
19
Location Overview

Economic & Demographic Profile
Hazleton, in Luzerne County, had a population of 25,340 at the 2010 census, an increase of 8.6% from the 2000 census,
making it the 17th largest city in Pennsylvania. The population growth rate is much higher than the state average rate of
3.43%. The median household income in Hazleton was at $31,295 in 2008-2012 and has grown by 11.44% since 2000.
The median house value was at $90,000 in 2008-2012 and has grown by 33.93% since 2000.
The rural communities located north of the city of Hazleton have been under increasing development pressure. While
most of the land use is still undeveloped agricultural or forestland, intensive commercial and industrial development is
located along the Airport Beltway at the southern edge of the township, PA Route 309, through the center of the township, and proximate to the I-81 and I-80 interchanges. Historically, the anthracite coal industry was the economic engine
for the MSA, enabling the creation of many industries including railroads, iron, steel and textiles. Employment in the
industry peaked in 1914 and remained productive until after World War II. In 1959, the collapse of a branch of Knox
Mine allowed the Susquehanna River to flood all of the interconnected mines. This and the concurrent shift to oil effectively ended mining in the region along with many dependent industries.
The economic development agency CANDO was established in 1956. One of their
first accomplishments was to purchase 550 acres west of Hazleton, which is now the
Valmont Industrial Park. The organization was also instr umental in br inging the
construction of I-80 and I-81 to the area, with the local interchanges opening in 1965.
This opened the area to new industrial development, and over the years CANDO has
added over 3,500 acres in three additional parks. Major industrial sectors include:
warehouse and distribution including facilities for Amazon, American Eagle,
Michael’s Handcrafts, Office Max, Auto Zone and a number of 3rd party logistics and
e-commerce operations; food processing including facilities for Hershey’s, Tootsie
Roll, Stroehmann’s, Coca Cola, Cargill Meat and related suppliers; plastics, particularly food packaging products; and an emerging Bio Science and Health Care industry.
The property’s local area is an expanding suburban development of the City of Hazleton. Dominant land uses along Airport Beltway/PA Route 93 include: Hazleton Municipal Airport, a general aviation airport handling primarily privately
owned single-engine aircraft; Laurel Mall, a regional mall, anchored by Boscov’s, Kmart and J.C. Penney. Other major
tenants are a Regal Cinema, Old Navy and Aldi. Adjoining the mall is a Walmart Supercenter; Penn State’s Hazleton
Campus is on 125 acr es located at the inter section of PA Route 93 and I-81. It has an enrollment of about 1,156 students, with approximately 450 students living on campus. The campus offers baccalaureate degrees, associate degrees,
minors, and credit and non-credit certificates in a wide variety of disciplines, but is primarily a two year program; and
Valmont Industrial Park at the inter section of PA Route 93 and I-81 is the first industrial park in the area with over
750 acres.
20
Location Overview
DEMOGRAPHIC SNAPSHOT
1 Mile
3 Miles
5 Miles
2014 Population
2,109
27,308
48,900
2019 Population
2,184
27,186
48,613
Population Growth 2014-2019
3.56%
(0.45%)
(0.59%)
Average Age
43
40
40
2014 Total Households
728
10,620
19,081
Household Growth (2014-2019)
Median Household Income
Average Household Size
4.81%
$41,212
2.2
(0.40%)
$37,442
2.5
(0.60%)
$38,716
2.5
Median Home Value
$183,777
$131,405
$130,788
1979
1951
1950
Median Year Built
21
Location Overview - Penn State Hazleton
Penn State Hazleton is a commonwealth campus of the Pennsylvania
State University. It is located in Sugarloaf Township, Luzerne County, Pennsylvania, near the junction of Interstates 80 and 81. The campus occupies
over 100 acres, and has an enrollment of about 1,156 full and part-time students; both traditional and non-traditional.
One of 23 extension campuses of Penn State University, this campus offers
baccalaureate degrees, associate degrees, minors, and credit and non-credit
certificates in a wide variety of disciplines, but is primarily a two year program. More than 160 Penn State majors can be started there and completed at
University Park or another Penn State campus. Baccalaureate Degree Programs offered include: Business, Corporate Communications, General Engineering, Information Sciences and Technology, Letters, Arts and Sciences,
Psychology and Rehabilitation and Human Services. In addition, the Associate Degree Programs include Business Administration, Information Sciences
and Technology, Letters, Arts and Sciences, Medical Laboratory Technology
and Physical Therapist Assistant.
Enrollment has increased at the rate of approximately 1 percent per year, however, the growth has come primarily in distance learning. Three extension campuses and the main campus exhibited lower rates of growth, and all remaining campuses suffered from significant declines. At the Hazleton Campus, enrollment declined by more than 6% per year.
Hazleton Campus - Enrollment & Housing Trends
2006
2007
2008
2009
2010
2011
2012
2013
Total Enrollment
1143
1232
1228
1,245
1,303
1,172
1,060
951
Undergraduate
1142
1231
1228
1,245
1,303
1,172
1,060
951
Full Time
1086
1183
1174
1191
1233
1108
1000
881
Part Time
57
49
54
54
70
64
60
70
Students On-Campus
480
456
479
473
482
481
477
456
42.0%
37.0%
39.0%
38.0%
37.0%
41.0%
45.0%
48.0%
490
490
490
490
490
490
490
490
98.0%
93.0%
97.7%
96.6%
98.4%
98.1%
97.3%
93.2%
596
693
684
701
743
618
510
391
% On-Campus
Total Beds
% Occupancy
No. of Full-Time
22
Location Overview - Penn State Hazleton

Student Housing Options
The Hazleton Campus is able to accommodate up to 490 students within its three on-campus housing projects. However,
this requires utilizing triple occupancy of some units. Outlined below are details of some of the residence halls on campus living facilities. Two are traditional dormitories, while the third is a townhouse style development. Dining is provided in a separate cafeteria. Student living on-campus must also purchase a meal plan.
South Hall is a tr aditional coed r esidence hall that accommodates two students
per bedroom with a common bathroom on each wing of the building's three floors.
South Hall provides a central lobby area with a big screen TV, a game room, a laundry
facility, vending machines, a study lounge, and 24-hour security access. This residence
has 110 dorm rooms accommodating 226 persons in double and triple occupied rooms.
North Hall offer s suites with two double bedr ooms and semipr ivate bathroom in
each suite. North Hall also offers a central lobby area, study lounges, vending machines, laundry facility, and 24-hour security access. This residence hall has 36, twobedroom units accommodating 164 persons in double and triple occupied rooms.
West Hall is a gr oup of townhouses, each consisting of five bedr ooms, 2.5 bathrooms, and a living room area. A central laundry facility is available in the complex.
This complex has 10 units accommodating 100 persons in double occupied rooms
Hazleton Campus has historically provided 38 to 48 percent of its undergraduate enrollment with on-campus housing. In 2008, the Chancellor of
the Hazleton Campus expressed support for construction of the subject
properties citing a need for additional off-campus housing. In that letter,
he estimated that 400 students commute from home within Luzerne
County, leaving a demand for off-campus housing for approximately 350
students. Significantly, full time students living off campus has declined
from a high of 743 students to 391 students in 2013. This reduction impacts the need for off-campus housing. With the reduction in enrollment,
more than half of the full time students reside on campus, with 391 full
time students living off campus. As a two year campus only, Hazleton
tends to attract from within the County, and students are easily able to commute from home. Other students may choose
to rent one of the many single family homes that are available for rent within a three mile radius. The Hazleton Transit
Authority provides bus service from the city of Hazleton to campus.
23
Kenneth Wellar
Tel: 215.454.2879
ken@rittenhouserealty.com
Corey Lonberger
Tel: 215.454.2878
corey@rittenhouserealty.com
Mark Duszak
Tel: 215.454.2884
mark@rittenhouserealty.com
Luke DeLuca
Tel: 716.510.3715
luke@rittenhouserealty.com
Chris Egan
Tel: 215.454.2913
chris@rittenhouserealty.com
Doug Emrich
Tel: 215.454.2889
doug@rittenhouserealty.com
David Greenhalgh
Tel: 215.454.2887
david@rittenhouserealty.com
Robert Marzullo
Tel: 215.454.2921
robert@rittenhouserealty.com
Steve Miceli
Tel: 215.454.2916
steve@rittenhouserealty.com
Vincent Tagliente
Tel: 215.454.2920
vincent@rittenhouserealty.com
Philadelphia Office
1628 John F. Kennedy Blvd.
Eight Penn Center, Second Floor
Philadelphia, PA 19103
Tel: 215.454.2852
New York Office
200 West 57th Street
Suite 702
New York, NY 10019
Tel: 212.765.7900
Delaware Office
102 Larch Circle
Suite 102
Newport, DE 19804
Tel: 302.994.3907
www.RittenhouseRealty.com | info@rittenhouserealty.com

student housing at melrose street

Transcription

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