3 property …...in july of 2013, rutgers university acquired 7 of the 8 colleges run by the...

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Questions? Call Swali – 732-549-1998 xt 166

3 Property Portfolio – College Ave New Brunswick Campus

Umang Swali of KWC - Power Moves Team is proud to present an opportunity to purchase a portfolio of

3 cash cow properties housing a total of 31 students on the Rutgers New Brunswick College Ave

Campus. Since the early 2000s, the portfolio has held a 0% vacancy rate. Rents have increased 2.5%

or greater year over year, leasing up a record pace. The Rutgers New Brunswick campus has 42,000

students enrolled. Rutgers University Housing only has 16,000 beds; there is a shortfall in supply of off

campus housing. The situation is undersupplied such that RU Housing hosts a lottery for student housing.

Since 2011, 300-600 students were housed in hotels 15 minutes from campus due to the lack of housing

supply. These three properties continue to benefit from rent increases, and no vacancy. 5 Out of the 6

Units in this portfolio have already been rented at higher rents for the upcoming 2016-2017 term.

Moreover, 2 of 3 of these lots are adjacent, creating potential for a future development opportunity. The

strength of this deal lies in the location, strong cash flow, reliably tenancy, and upside in future land

value. A lender is ready to finance this purchase with 25% down for a creditworthy sponsor.

$2,471,000 Purchase Price

NOI $176,831

Cap Rate 7.16%

Cash on Cash Returns: 10.74%

Lender Ready to Finance With

25% down

Long Term Tenancy

Leased Through June 2017

Fully Leased 6 months prior to

expiration

Discounted from $2,704,938 If

purchased as a package

http://www.powermovesproperties.com/




167 Hamilton Street (CLICK) 171 Hamilton Street (CLICK)

3 Family Unit – 11 Total Students 1 Family Unit – 6 Total Students

Rent Unit 1: $1,306

Rent Unit 2: $2,163 Total Rent: $4,066 (2015-2016)

Rent Unit 3: $3,520

Total Rent : $6989 (2015-2016)

173 Hamilton Street (CLICK)

2 Family Unit – 14 Student Occupants

Rent Unit 1: $2,524

Rent Unit 2: $6,022

Total Rent: $8,546


https://youtu.be/fgvVTAvp3Y8

https://youtu.be/KQb-pZ7yxQs

https://youtu.be/FPvNi23HBUc




INVESTMENT SUMMARY – STUDENT HOUSING

Price: $2,471,000

Net Operating Income: $176,831

Acquisition Cap Rate: 7.16%

CASH ON CASH RETURNS: 10.74%

COMMERCIAL LENDER READY TO FINANCE

Housing 31 Students

3 Properties

One Three (3) Unit property

One Two (2) Unit Property

One One (1) Unit Unit Property

All Legal, Registered Rents with the City

of New Brunswick

Well-Maintained Assets

Private Garbage Removal

Updated Kitchens & Bathrooms, recessed

lighting

New roofs and Windows installed in early

2000s

In House Washer / Dryer in most units

Dishwasher in most units

No Oil Tanks

Steam & Gas Heat

Private Backyards

Private Basement

None of the properties are in a flood zone

Separately Metered

Tenants Pay All Utilities including Sewer,

Gas, Electric, Etc.

Fully Leased through June 2016

Every Year, Portfolio Leases up 6 months

before Expiration

In 2014, 2015 – Portfolio Leased up 6

Months Before Expiration (Fastest on

Record)

4.1% Rent Increase June 2015-2016 Year

<10 Minute walk to Lecture Halls,

Student Center, College Ave Gym,

Restaurants and Amenities





Executive Summary

We are proud to present this opportunity to purchase a portfolio of 3 cash flowing properties

located on Rutgers University’s College Avenue Campus in New Brunswick, New Jersey. The

portfolio is comprised of one, two and three family units, housing a total of 31 students. The

properties are located less than 10 minutes walking distance to College Ave, Robert Wood Johnson

Hospital, Rutgers University Facilities, Lecture Halls, Bookstores, Student Center, Buses, Gyms,

NJ Transit, Restaurants, and the arts district of New Brunswick. The majority of the units feature

in-house washer/dryer, dishwasher, steam/gas heat, and private garbage removal. All of the

properties have been fully occupied with a 0% vacancy rate for over 15 years. Going forward,

the landlord has signed leases for the June 2016-2017 school year. This turn-key stable investment

opportunity is a cash cow with upside potential as the Rutgers Campus expands with the growing

Student Enrollment at Rutgers New Brunswick.

The properties are primarily located within the 6th ward of New Brunswick. While all of the

properties are income producing, it is important to note two of the three properties are adjacent to

one another, and the third offered property is separated by just one other owner. As Rutgers

University expands its campus to accommodate its rapid growth, the land these properties are on

may increase in desirability.





Fastest Lease Up Since 2009

All of the five properties within this portfolio

have signed leases in place for the June 2015-

May 2016 year. The entire portfolio was

leased up, at higher rents by November 15,

2014, seven months before lease

expiration. The Landlord states that

normally they all lease up by March, three

months before expiration. This year set a

record for fastest lease up period. Moreover,

the rent roll is to increase by 2% starting June,

2015.

Lender Ready To Finance

Given the portfolio’s stability and

irreplaceable location, there is a lender ready

to finance this portfolio purchase. The lender

is offering fixed rate financing with recourse

and non-recourse options. Please review the

“Buy Side Analysis” and “Key Facts”

(pages 8-10 for details).

Growth & Demand Drivers

Landlords in the New Brunswick College

Avenue Campus benefit from robust demand

generated by a fast growing student

population. Enrollment in Rutgers University

has increased 14% since 2006.

The university had an increase in enrollment

of 7% from the 2012-2013 school year.

Rutgers received 33,315 applications from

new students and transfer students in 2013

across its three campuses. That is more than

1,700 more than 2012 year and a 5 percent

increase.

The Association for International Educators

awarded Rutgers University with the Simon

Award in the year of 2014. The university has

welcomed international students and scholars

on a record basis each year. Rutgers had a

61% increase in undergraduate

international student enrollment and 13%

increase in graduate international student

enrollment between the 2010-2011 and 2012-

2013 academic years. In 2013-2014, Rutgers

New Brunswick Campus had a 17.6%

increase. This translates to 3,900

international students housed on the New

Brunswick campus as of 2014.





UMDNJ MERGER

In July of 2013, Rutgers University acquired

7 of the 8 colleges run by the University of

Medicine and Dentistry of NJ (UMDNJ).

Accordingly, the number of students at

Rutgers University has grown from 40,000 to

65,000 students from 2010 to 2014, making

it the largest increase in students in the

University’s history.

BIG TEN CONFERENCE

In November 2012, Rutgers was accepted

into the Big 10 Conference. This 14 member

conference is made up of prominent

academic institutions. The conference, which

includes Penn State, Ohio State, University

of Michigan, collectively awards 15% of the

nation’s doctoral degrees. The most popular

conference in the nation has driven a national

spotlight on the University.

EMPLOYMENT CENTER

The City of New Brunswick is buoyed by

many other demand factors including major

employers like Robert Wood Johnson, St

Peters Hospital, Johnson & Johnson,

Research Centers, and the thousands of

employees of the city. New Brunswick

houses employers in the Information

Technology, Banking & Insurance Services,

Real Estate, Legal, and Accounting

Industries.

New Housing Supply

Before 2010, the last time Rutgers built

new housing was in the 1980s. By April

2009, the University was holding lotteries for

students in need of Rutgers Housing. In 2010

and 2011, the university was short 600 dorms

on the College Avenue campus. The students

who did not win the lottery were put in hotel

rooms in Somerset, NJ. The Gateway Center

at Easton Ave & Somerset Street, built by

DevCo, added 192 rental units, 42 condos,

and 60,000 square feet of retail space to the

supply of housing. The entire project sold out

in 2012, including the retail, rentals and the

condominiums. Today, the same

condominiums are selling for 13% higher

than 2012, yielding an average equity

appreciation of 6.5% year-over-year. The

rentals sold out at $1900 per month for

1BR/1BA units. Tenants have to meet

salary requirements of 35X monthly Rent.





Infrastructure - Transit

The city of New Brunswick is served rail by NJ Transit and Amtrak. With NJTransit, Patrons can

reach New York City within 1 hour, and Philadelphia within 1 hour. The major highway arteries

serving New Brunswick include Route 18, Route 1, Route 27, Interstate 287 and NJ Turnpike. The

Newark International Airport is 40 minutes north by Train or Car. New Brunswick is served by

two major hospitals, including Robert Wood Johnson (on College Ave Campus) and St. Peters

Hospital. The University is served by an extensive bus transportation system, connecting all campus

facilities for students across the campuses with very short commute times for students and faculty.

In September 2013, DevCo broke ground on a new $330,000,000 project, known as the College

Avenue Redevelopment Initiative. This project will add a new Exclusive Honors College, Academic

Building, Honors-Student Dorms, and a Campus Green with a 600-foot Outdoor Screen to broadcast

football games and movies. DevCo will also build new facilities for Rutgers Hillel and the New

Brunswick Theological Seminary. The College Avenue Campus Redevelopment Initiative will

provide long overdue infrastructure improvements along College Avenue and connections between the

new facilities by upgrading utility installments, pedestrian walkways, bike paths, ADA accessibility as

well as other essential and aesthetic streetscape elements.





Key Facts – Hamilton Street - Rutgers Campus Portfolio

Address 167 Hamilton 171 Hamilton 173 Hamilton

Total Monthly Rent $6,989 $4,066 $8,546

Lease Commencement June 1, 2015 June 1, 2015 June 1, 2015

Lease Expiration May 18, 2016 May 18, 2016 May 18, 2016

Number of Students 11 6 14

Legal Occupancy 15 7 17

BR/BA Unit 1 1BR/1BA 3BR/2BA 2BR/1BA

BR/BA Unit 2 4BR/1BA 5BR/2BA

BR/BA Unit 3 5BR/2BA

Number of doubles 4 3 6

Number of Singles 6 0 2

Lot 44 46 47

Block 57 57 57

Lot Size 33’ x 102’ 25’ x 100’ 25’ x 146’

Lot Size (Acreage) 0.0773 acres 0.0574 acres 0.0838 acres

Year Built 1867 1872 1892

Dishwasher N Y Apt 1 NO / Apt 2

Yes

Washer/Dryer in unit N Y Y

Oil Tank N N N

Radiant Heat Y Y Y

AC – Wall Units N Central AC Apt 2 Central AC

Garage N N N

Driveway Y N N

Private Garbage Removal N N N

Water Heater install date (if

available)

Recent Recent Recent

Boilers installation date (if

available)

Recent Recent Recent

Property Survey Available Yes Yes Yes

Video Tour Yes Yes Yes





Income & Expenses

% of

Gross

167

Hamilton

171

Hamilton

173

Hamilton 2015

Total Monthly Rent

$

6,989

$

4,066

$

8,546 $

19,601

Total Yearly Rent 100%

$

83,868

$

48,792

$

102,552

$

235,212

If Sold As Individual Sales –

Price Per Property

$

964,482

$

561,108

$

1,179,348 $2,704,938

Lease Commencement Jun-15 Jun-15 Jun-15

Lease Expiration May-16 May-16 May-16

Number of Students 11 6 14 Total

Students 31

Legal Occupants Permitted 15 7 17

Operating Expenses

% of

Gross

Property Taxes 15.41% $12,924

$

6,120

$

17,280 $36,324

Snow Removal 0.39% $325 $325 $325 $975

Landscaping 0.48% $400 $400 $400 $1,200

Repairs & maintenance 1.11% $1,150 $800 $750 $2,700

Three Year Fire Safety

Inspection 0.04% $35 $35 $35 $105

Property Management (3%)

(see notes) 3% $2,516 $1,464 $3,077 $7,056

Vacancy Allowance (2%) (see

notes) 2% $1,677 $976 $2,051 $4,704

Gas & Electric (Tenant) 0 $0 $0 $0 $0

Sewer (City Bills LL, Tenant

Pays) 0 $0 $0 $0 $0

Garbage Removal (Private) 0.60% $500 $500 $500 $1,500

Insurance (through June 2015) 1.70% $1,428

$

1,140

$

1,248 $3,816

Total Expenses 24.72% $20,955 $11,760 $25,666 $58,381

Net Operating Income $62,913 $37,032 $76,886 $

176,831





Buy Side Analysis

Down Payment 25%

Purchase Price (As a Package of three) $ 2,471,000

Down Payment (Equity) - Includes Closing Costs* $657,750

Est Closing Costs (Mortgage Broker, Legal, Inspection, Appr. Env. Etc) $40,000

Mortgage Amount (Debt) $ 1,853,250

Monthly Net Operating Income $14,735.92

Monthly Mortgage (4%, 5/30, Reset) $8,847

Monthly Profit (Cash Flow) $5,889

Yearly Profit (Cash Flow) $70,662

Debt Coverage Ratio 1.67

Cash on Cash Returns 10.74%

The portfolio houses total 31 students (all legal).

Landlord makes 355 day leases, commencing June 1, and ending on May 18.

This Gives Landlord 13 days time to accommodate the space for new tenants.

171 & 173B forced hot air & central air conditioning. 167A, 167B & 173A hot water baseboard.

167C Steam.

None of the properties have oil tanks, as per Landlord.

Community Bank is offering purchase financing with 25% down payment. They also have a

NON-RECOURSE option with a larger down payment

A lender is interested in providing one commercial mortgage for the entire portfolio.

Verbal Terms Quoted

5 years fixed

30 years amortization - reset after 5 years

4% - 4.25% Interest Rate

With 25% down payment, bank requires personal guarantees

Standard environmental, appraisal, commitment fees and prepayment fees involved.





Underwriting Facts

One 3-family, one 2-family and one 1-family properties.

All units pre-leased for the 2015-2016 as well as 2016-2017 school year, 6 months before expiration.

Leases (12 months) Begin June 1, 2014 and expire May 18, 2015

Leases have been signed for June 1, 2015 to May 18, 2016 term

Rent increases every year through its holding period

Property Management (3%) is not an actual expense to Landlord.

Vacancy (2%) is not an actual expense to LL.

The Landlord's ACTUAL Vacancy has been 0% per year since taking ownership (15+ years).

Broker has deducted for conservative underwriting.

All Leases have 1.5 months security deposit

All rents are registered rents with the city of New Brunswick

Landlord Pays extra for private garbage removal on all of the properties.

Tenants Pay All Utilities

LL Collects Water and Sewer Bill and Tenant Reimburses





OFFERING OVERVIEW

We are proud to present you with this stable, cash-flowing investment portfolio in the burgeoning

New Brunswick College Ave Market. The portfolio has held a 0% vacancy rate since ownership,

and is fully leased for the coming school year at increased rents. Moreover, these houses are

adjacent and therefore have future development potential. This investment offers long term upside

while providing reliable cash flows for years to come. A lender has stepped up to the plate to offer

competitive terms on financing the purchase.

Please note* Investors are free to use any source of funding they choose.

PLEASE EMAIL [email protected]

OR CALL 732-549-1998 XT 166 TO CONFIRM AN

APPOINTMENT

Feel free to CALL SWALI with any

questions

732-549-1998 XT 166 Thank you for your time in considering this investment opportunity!


mailto:[email protected]

3 property …...in july of 2013, rutgers university acquired 7 of the 8 colleges run by the...

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