32 home sfr investment portfolio phoenix az . …€¦ · learn more about portfolio 100389 at...

SVN | SFRhub Advisors2400 E. Arizona Biltmore Circle

Building 4, Suite 1400

Phoenix, Arizona 85016

As featured on SVN Live weekly broadcast-view at www.SVN.com

100% Occupied & Cherry-pickable!

32 HOME SFR INVESTMENT PORTFOLIO PHOENIX AZ . PORTFOLIO 100389OFFERING MEMORANDUM

VISIT WWW.SFRHUB.COM FOR MORE INFORMATION!

Jeff ClineSVN | SFRhub Advisors

Executive Director & Designated Broker 602.441.5354

[email protected]

Michael FinchSVN | SFRhub AdvisorsExecutive VP | Principal

[email protected]

All SVN® Offices Independently Owned & Operated © 2018 SFRhub Advisors, LLC All Rights Reserved P #0389V.1

PROPERTY SUMMARY

Offering Summary

PROPERTY DESCRIPTION

Property Overview

HIGHLIGHTS

Property Highlights

LOCATION OVERVIEW

Location Info

Major Employers

MARKET DATA

MSA Housing Market

US Housing Market

INVESTMENT OVERVIEW

Operating Pro Forma

Debt Overview

Financing Assumptions

DEMOGRAPHICS REPORT

ADVISORS BIO

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2 32 Home SFR Investment Portfolio Phoenix AZ

All SVN® Offices Independently Owned & Operated © 2018 SFRhub Advisors, LLC All Rights Reserved SVN | SFRhub Advisors

Five Reasons We KNOW You’ll Benefit with SFRhub Today, We Are Unlike Anyone Else...

Research with clean and verified intelligent decision data. We use proprietary processes gathering data from a variety of sources to generate our exclusive verified Advanced SFR Scrub Report™, powered by top-ranked Automated Valuation Model* (AVM) data, verifying 25-35 data points on each individual home within a portfolio.

Buyers and sellers can optimize their acquisition/disposition profitability by reducing opportunity cost as a result of targeted research and “cherry-picking”capability.

The nation’s largest SFR/Build-For-Rent (BFR) portfolio, single source Live Acquisition Board, operating in all 50 states with access to over a million buyers and sellers.

With 200 offices in 500 sub-markets we are not just another listing site. We are a full service SVN commercial real estate brokerage.

We are buyer/seller direct. Providing seamless due diligence, inspection, escrow, and transaction management support with a fully licensed real estate team.

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Information is deemed reliable, but not guaranteed. Programs and pricing are subject to change.SVN | SFRhub Advisors

PROPERTY SUMMARY

List Price:

Number of Homes:

Pro Forma Cap Rate:

Pro Forma NOI:

Avg. Home Size:

Market:

Price/SF:

$11,661,000

32

5.01%

$583,750

2,858 SF

Phoenix MSA

$128

OFFERING SUMMARY

**Pro Forma rates assume all homes are being operated at projected market rates.**


Home Type

3 Bdrms

4 Bdrms

5+ Bdrms

AverageSize/Type

2,162 SF

2,783 SF

3,207 SF

Numberof Homes

3

19

10

AverageRent/SQ FT

$0.93

$0.78

$0.71

AverageMonthly Rent

$2,008.33

$2,171.05

$2,280.00



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PROPERTY DESCRIPTION

PROPERTY OVERVIEW

Learn more about portfolio 100389 at SFRhub.com

This 32 home portfolio offers immediate cash flow with a 100% occupancy rate and quality tenants. Being offered by one of the largest SFR operators, this portfolio is one of multiple portfolios being sold by the seller. It is fully cherry-pickable, and can be packaged with properties from the additional portfolios to create a customized portfolio unique to your investment criteria and target markets.

The average market rent in the portfolio is a solid $2,190 per unit, offering stable cash flow with long term tenants. Almost 60% of the homes are 4 bedroom, 31% are 5 bedroom homes and the 9% remaining

are 3 bedroom homes, providing a quality mix of floorplans attractive to any type of resident. The average vintage of the homes is 1999, and all homes went through a remodel in 2013. The average dwelling square-footage of this portfolio is a spacious 2,858 SF.

Phoenix is home to the second-fastest growing rent prices in the country, according to RentCafe. Rents per month in Phoenix showed a 7.7% growth in 2018 alone, which is more than any single large metro area besides Las Vegas. With 32 homes in Phoenix, this portfolio is attractive to investors looking to enter one of the top rental & job growth markets in the country.



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PROPERTY HIGHLIGHTS

• Learn more about portfolio 100389 at SFRhub.com

• Opportunity for immediate cash flow with a 100% occupancy

• Projected market rents allow for value add rent increases of 6.67%

• Current average market rent is $2,190 per home

• Desirable rental floor plans with 91% 4 or 5 bedroom homes

• Located within one of the fastest growing rental markets in the US

• The Valley of the Sun had #1 population growth in US between 2017-2018

• Phoenix saw 3.9% job growth in 2018, one of the top in the country

• Low costs of living and over 300 days of sunshine per year make Phoenix home for many

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HIGHLIGHTS


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LOCATION OVERVIEW

LOCATION INFO

Phoenix is the most populous city in the state of Arizona and the fifth most populous in the United States, it is the only state capital with a population of over one million residents, nearing 1.6 million, to be exact, encompassing about 520 square miles.

Phoenix job growth has hit a 10-year high. Phoenix employers added 79,700 new jobs in 2018, a year-over-year increase of 3.9%, according to research done by Colliers International. To give perspective, that is the highest rate of job growth in a decade, and far surpassed researchers expectations. The market is expected to stay strong and continue to grow. This

played a major role in boosting Phoenix up to #4 on a list of the top-36 major employment markets in the US for new job growth.

The high-tech manufacturing, healthcare, construction, and tourism industries dominate the Phoenix-metro economy. The metro headquarters multitude Fortune 500 companies, including Freeport-McMorAN, Republic Services, Insight Enterprises, Avnet. Not only does it home to the headquarters of the aforementioned companies, but other companies such as Intel Corp., Motorola Inc., and Honeywell have large Phoenix operations, all attracting 1.38% of employment growth.


Tourism is another huge industry in Phoenix, impacting the economy and job growth. Phoenix houses the Phoenix Sky Harbor Airport, which serves the greater Phoenix area, serving about 40 million passengers each year and ranking among the top 10 busiest airports in the nation.

The current median household income is about $64,600, compared to the US average of $58,754. It is also estimated that the median household income in the area will increase to $71,300 by 2022, according to John Burns Real Estate Consulting.


MAJOR EMPLOYERS

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MARKET DATA


MSA HOUSING MARKET

The Phoenix market is experiencing a growth in employment of 3.3% and a household increase of 2.3%. There are currently 23,982 single-family permits (12 months) available. Based on data pulled from 133 markets, the home value trends for both new and resale homes collectively are currently experiencing a 3.6% increase in price appreciation.

In Phoenix, the average single-family cost of rent as of August 2019 is $1,439 and is projected to increase by 9.0% by 2022. The median household income is $65,100, making the single-family rent-to-income ratio 26.5%. The single-family home occupancy rate as of December 2018 is at an impressive 93.5%, with only 6.5% vacancies.

Of single-family, entry-level homes that are purchased, $216,600 is the average value per SFR with a median home payment of $1,489 a month (with the assumption of a 5% downpayment, 30-year fixed-rate mortgage including PITI plus mortgage insurance). The single-family gross rental yield is 7.2%.

*Source for MSA Housing Market: John Burns Real Estate Consulting as of August 2019.



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MSA HOUSING MARKET GRAPHSThe information and data used in the graphs on this page have been provided by John Burns Real Estate Consulting as of August 2019. These are based on Phoenix MSA research on the SFR & BFR market.


US HOUSING MARKET

In the U.S., rents in the lower rent tiers are increasing 4% YOY compared to higher rent homes at 3.4%. According to a recent Freddie Mac survey, about 50% of millennials prefer to continue renting while a surprising 72% of baby boomers would like to keep renting as well. Baby boomers tend to rent longer at approximately 8.4 years versus younger renters who rent for about 3.2 years.

The single-family rental demand is forecasted to continue strong through 2022 even with an expected modest recession. Nationally, rents rose 3.7% with Vegas, Phoenix and Orlando leading with the strongest YOY growth and Cincinnati and Houston fell behind. As tenants are sticking with REITs, they maintain 95% occupancy with strong 4% rent growth. Build-for-Rent gains big momentum with SFR investors as there is a strong demand among all generations, including baby boomers.

Nationally, the housing market will remain steady, benefitting from a slightly stronger economy and lower mortgage rates that have declined due to fears of an economic slowdown. A forecasted 2021 recession with a .4% job loss is a likely outcome. Nationally, housing affordability is worse than usual regardless to mortgage rates. For 2019, there will be over a 2% increase in home sales, however resale sales will drop 4% while resale prices increase by over 3%. Overall, entry-level homes continue to outperform as months of resale supply for high-priced homes (10 months) is at the highest it has been since 2013.

Across the country, there has been a 2% increase in new home sales and 3% in resale price appreciation in 2019. Slow price gains and new home construction are predicted as the economic expansion continues into its 11th consecutive year. Homebuilders’ active projects have


declined by 2% year over year as land, laws, labor and lending limit advancement. Housing affordability will continue during the next recession which has had an impact on builder sales.

*Source for U.S. Housing Market: John Burns Real Estate Consulting as of Q1 2019.


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US HOUSING MARKET GRAPHSThe information and data used in the graphs on this page has been provided by John Burns Real Estate Consulting as of April 2019. These are based on nationwide research on the SFR & BFR market.

INVESTMENT OVERVIEW

INVESTMENT OVERVIEW


Cap Rate - Stabilized

Gross Yield

Net Operating Income (NOI)

Leveraged IRR

Unleveraged IRR

Leveraged Cash-On-Cash

Number of Homes

List Price

List Price Per Home

List Price/SQFT

Pro Forma

5.01%

7.21%

$583,750

0.79%

32

$11,661,000

$364,406

$128

Year 1; T-12

5.18%

7.43%

$604,489

19.38%

10.58%

1.38%

Year 3; T-36

5.56%

7.88%

$648,000

20.99%

11.07%

2.63%

Year 5; T-60

5.95%

8.36%

$694,363

22.70%

11.58%

3.95%



OPERATING PRO FORMA

DEBT OVERVIEW


Loan-To-Value Ratio

Interest Rate

Loan Amortization in Years

FINANCING ASSUMPTIONS

70.00%

5.50%

30

Annual Rent

Average Monthly Lease Rate (P.S.F.)

Vacancy

Operating Expenses

Net Operating Income (NOI)

Pro Forma

$840,900

$0.77

5.00%

$215,105

$583,750

Year 1; T-12

$866,127

$0.79

5.00%

$218,331

$604,489

Year 3; T-36

$918,874

$0.84

5.00%

$224,930

$648,000

Year 5; T-60

$974,834

$0.89

5.00%

$231,729

$694,363

Debt Amount

Annual Debt Service Payments

Estimated Annual Market Valuation

Appreciation (National)

Pro Forma

$8,162,700

$556,163

Year 1; T-12

$8,052,741

$556,163

5.40%

Year 3; T-36

$7,813,866

$556,163

5.40%

Year 5; T-60

$7,547,282

$556,163

5.40%


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DEMOGRAPHICS REPORT

Total Population

Median Age

Median Age (Male)

Median Age (Female)

Total Household

Total Person/Household

Avg. Household Income

Avg. House Value

DEMOGRAPHICS REPORT

5 Miles

78,952

36.7

36.3

37.2

28,457

2.8

$110,777

$447,325

10 Miles

366,766

32.4

31.7

32.9

127,521

2.9

$77,035

$329,240

15 Miles

1,145,070

31.9

31.4

32.3

420,713

2.7

$64,908

$297,936



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JEFFREY CLINE

Jeff Cline’s 40+ years of business leadership and commercial real industry expertise includes commercial real estate marketing, brokerage, large-scale finance, development and construction. Mr. Cline has lead as CEO in several commercial property segments including multi-family apartments, condominiums, high-rise, office buildings, industrial / warehouse, retail shopping centers and as a national leader in the SFR Portfolio investment segment. Jeff has been involved as a principal in $2+ billion of commercial real estate, construction and property funding.

As a Principal and Designated Broker of SVN | SFRhub Advisors, Jeff is a co-founder which has developed an industry disrupting CRE digital transaction platform. This new digital platform is changing the way the CRE industry markets, researches, analyzes and acquires commercial investment property. It is this platform that will be a the disruption and opportunity with what will soon become the ‘normal’ location, marketing, research, and transaction portal.

Executive Director & Designated Broker

SVN | SFRhub Advisors2400 E. Arizona Biltmore CircleBuilding 4, Suite 1400Phoenix, AZ 85016

T: 602.441.5354C: [email protected]

AZ #BR6508-89-000

ADVISOR BIOGRAPHIES



MICHAEL FINCH

Michael Finch began his career in commercial real estate brokerage over 15 years ago in Phoenix, Arizona. He has developed broad local and national relationships with the top-ranked high density mid to large scale developers commercial mixed-use & multifamily developments. Michael continued to deliver value-add opportunities as market cycles have evolved. With an extensive national network, Michael has successfully grown his client base with the nation’s largest investment & private equity groups in the country. He enjoys being an integral component to these client teams focused on large-scale income-producing portfolios, specifically single-family rental portfolios and build-for-rent investment portfolios for many years now.

Today, Michael is a Principal, Founder, & Executive Vice President in SVN | SFRhub Advisors, the nation’s leading commercial real estate brokerage firm focused on single-family rental portfolios & build-for-rent (BFR) investment portfolio sales on a national level. Michael is also a founding partner in SFRhub.com, a leading data & valuation service provider, and digital transaction platform for buyers & sellers of SFR & BFR investment portfolios.

Executive VP | Principal

SVN | SFRhub Advisors2400 E. Arizona Biltmore CircleBuilding 4, Suite 1400Phoenix, AZ 85016

T: 602.441.5354C: [email protected]

AZ #SA576104000

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INTELLIGENT DECISION DATA

ABOUT SVN | SFRhub ADVISORS

SFRhub is our exclusive research and data provider with end-to-end Intelligent Decision Data solutions. A complete, effective clean data sourcing, research and analysis is essential to all SFR Portfolio buyers and sellers. The exclusive SFRhub Advanced SFR Scrub Report is essential for all intelligent decisions, whether they’re operational, asset acquisition or disposition and the overall strategic asset plan.

Today’s most effective and intuitive clean and verified data solutions are comprised of

Our proprietary Advanced SFR Scrub Report™ supports the buyer and seller decision process with quality and real time intelligent decision data, enabling an analysis of every aspect of the opportunity.

Also proprietary are our exclusive accelerated contract documentation process, title insurance management, due-diligence period logistics and documentation, with the final close of escrow. Ultimately, these pieces combine for a seamless

reporting, online analytical processing, analytics, data mining, process mining, complex event processing, business performance management, benchmarking, text mining, predictive analytics and prescriptive analytics.

SFRhub has knowledgeable and experienced individuals who work with data sources as true partners to help implement solutions that are forward-thinking, yet still based on industry knowledge and best practices.

decision-managed process – for both the buyer and seller.

SVN | SFRhub Advisor delivers the nation’s only single-family rental (SFR) portfolio Live Acquisition Board™ transaction platform.

In support, the dedicated, experienced, and professional SFR portfolio team has developed both an exclusive and conventional SVN | SFRhub Advisors program. In applying this advanced

technology, SVN | SFRhub Advisors becomes the nation’s sole SFR Portfolio Live Acquisition Board™ Transaction Platform, supporting both sellers and buyers of single-family residential rental investment portfolios. In addition, we feature existing asset as well as new-build home commercial investment portfolios nationally, anywhere from 5 to 5,000 homes.



DISCLAIMER

The material contained in this Offering Brochure is furnished solely for the purpose of considering the purchase of the property within and is not to be used for any other purpose. This information should not, under any circumstances, be photocopied or disclosed to any third party without the written consent of the SVN® Advisor or Property Owner, or used for any purpose whatsoever other than to evaluate the possible purchase of the Property.

The only party authorized to represent the Owner in connection with the sale of the Property is the SVN Advisor listed in this proposal, and no other person authorized by the Owner to provide any information or to make any representations other than contained in this Offering Brochure. If the person receiving these materials does not choose to pursue a purchase of the Property, this Offering Brochure must be returned to the SVN Advisor.

Neither the SVN Advisor nor the Owner make any representation or warranty, express or implied, as to the accuracy of the information contained herein, and nothing contained herein is or shall be relied upon as a promise or representation as to the future representation of the Property. This Offering Brochure may include certain statements and estimates with respect to the Property. These Assumptions may or may not be proven to be correct, or warranties, expressed or implied, contained in or omitted from this Offering Brochure, or any other written or oral communication transmitted or made available to the recipient. The recipient shall be entitled to rely solely on those representations and warranties that may be made to it in any final, fully executed and delivered Real Estate Purchase Agreement between it and Owner.

The information contained herein is subject to change without notice and the recipient of these materials shall not look to the Owner or the SVN Advisor nor any of their officers, employees, representatives, independent contractors or affiliates, for the accuracy or completeness thereof. Recipients of this Offering Brochure are advised and encouraged to conduct their own comprehensive review and analysis of the Property.

This Offering Brochure is a solicitation of interest only and is not an offer to sell the Property. The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest to purchase the Property and expressly reserves the right, at its sole discretion, to terminate negotiations with any entity, for any reason, at any time with or without notice. The Owner shall have no legal commitment or obligation to any entity reviewing the Offering Brochure or making an offer to purchase the Property unless and until the Owner executes and delivers a signed Real Estate Purchase Agreement on terms acceptable to Owner, in Owner’s sole discretion. By submitting an offer, a prospective purchaser will be deemed to have acknowledge the foregoing and agreed to release the Owner and the SVN Advisor from any liability with respect thereto.

To the extend Owner or any agent of Owner corresponds with any prospective purchaser, any prospective purchaser should not rely on any such correspondence or statements as binding Owner. Only a fully executed Real Estate Purchase agreement shall bind the property and each prospective purchaser proceeds at its own risk.

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32 home sfr investment portfolio phoenix az . …€¦ · learn more about portfolio 100389 at...

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