for sale: 26 apartments in 7 buildings · $2,100,000 $80,769 per unit; 82 per sq. ft. one property...

$2,100,000 $80,769 per unit; 82 per sq. ft. One property has a $38.25 annual ground rent.

This offering is made without regard to race, religion, color, creed, sex, marital & family status, and/or handicap. The information contained herein is believed accurate and from reliable sources; however, neither the owner nor Ben Frederick Realty, Inc. or any of their agents and/or sub-agents make any warranties or representations with regard to this information, the physical condition of the Property or any of its components, nor the financial performance of the Property. All information should be considered as observed by Broker. The Purchaser is hereby advised to verify all information to Purchaser’s own satisfaction. This Property and this offering are subject to prior sale and withdrawal at any time as the owner may deem appropriate.

Call Ben Frederick, III, CCIM

www.BenFrederick.com

410 752 6400 Seller’s Exclusive Agent

FOR SALE: 26 Apartments in 7 Buildings 859, 861 , 863 , 865 , 869 , and 871 Ho l l i n s S t reet and #40 Park in S t reet in Hollins Market Historic District, Baltimore City, Maryland 21201

» Property

BUILT 1880 estimated

ZONING R-8. Zoned for 22 Units. Located in an “Opportunity Zone” qualifying for tax incentives.

LOT 15,726 sq.ft. land = 0.36 acres, 124’ frontage on Hollins St. City Block 237, Lots 37, 38, 40, 41, 42, 43, 55, and 72

SIZE 25,726 Gross Building Area.

PARKING 3 garages, 2-cars each for a total of 6 off-street parking spaces.

» Construction

EXTERIOR Brick construction. Stone foundations. Three-story townhouses. Flat, built-up hot tar roofs.

BASEMENT Full Basements with high ceiling heights.

INTERIOR Some original random width hardwood floors, many new pre-finished hardwood floors. Kitchens and baths typically have vinyl floor tile or linoleum; a few with ceramic tile. Walls are typically plaster or plaster board. High ceilings. Kitchens have wood or laminate cabinets, laminate counters, and equipped with a range (mostly 30” gas; some electric) and refrigerator. Most baths have a shower/tub and modern vanity. A few have vinyl shower stall.

MECHANICAL 4 buildings have central gas-fired hot water radiator heat, 1 has separate gas-fired boiler with radiators and 2 have separate forced air heat (1 with central air conditioning). All other units rely on window air conditioning and/or ceiling fans. Each apartment has its own electric meter, typically 100-Amp circuit breaker. Most units have their own separate gas meter. All water mains are copper. Most interior pipes appear to be copper or CVPVC..

» Environmental MOLD No mold reported on the Property.

LEAD PAINT All units have lead-based paint risk reduction certificate, though some are out of date.

ASBESTOS None observed and to the best of the seller’s knowledge there is no asbestos in or on the property.

TANKS Observed 1 abandoned, empty oil tank in one of the basements.

12/3/2019 Ben F reder ick Real ty Inc . Page 1 3121 Sa in t Pau l S t reet , Su i te 26 Ba l t imore MD 21218 410 -235-9500

Ben@BenFreder ick .com BenF reder ick .com

Exceptional Opportunity to acquire 26 rental apartments in 7 buildings, all on the same City Block, in one of the City’s fastest growing neighborhoods. EXECUTIVE SUMMARY: Retiring landlord is offering properties held and managed for more than 25 years in highly desirable, up-and-coming neighborhood next to a major University. Unit Mix:

9 Studio Apartments 10 One-Bedroom Apartments

6 Two-Bedroom Apartments 1 Three-Bedroom Apartment 3 Brick garages

Current rents total $21,410 per month; however, these rents are significantly below market. Rentometer suggests median rents in the range of $1,050 for studio and one-bedroom apartments and $1,300 for two-bedroom apartments resulting in a potential rent roll of more than $29,000 per month. Offering: $2,100,000 Price Per Door: $80,769 Price Per Sq.Ft.: $82 Gross Rent Multiplier (GRM): 8.4 (assuming full occupancy) Cap Rate: 7.2% NEIGHBORHOOD HIGHLIGHTS: University of Maryland, Downtown Baltimore Campus has 5-graduate-level schools: Medical School, Pharmacy School, Dental School, Nursing School, and a Law School, which attract 5,700 students. The Schools has a budget of $1.1 billion and employs an academic staff of 2,321, many of whom are part-time. The School does not have any on-campus housing. All students live off-campus, resulting in a huge demand for privately owned rental housing. University of Maryland Medical Center is a teaching hospital with 841 beds employing a staff of 8,900 including 1,000 attending physicians and 900 residents and fellows in all medical specialties. The Campus includes the first-in-the-nation Shock Trauma Center, the highest volume trauma center in the United States. The University of Maryland BioTech Park is located 600’ from the subject properties, http://umbiopark.com . Over $450 million has been invested in the development of this Park over the past 15 years. The Park employs over 1,000, many of whom are highly educated professionals, including PhD level scientists, business development and marketing personnel, lab technicians, clinical healthcare workers, and support staff. The Park includes the Maryland Proton Treatment Center, the State of Maryland Forensic Medical Center, and 200 MBA students at the University of Maryland Smith School

OFFERING SUMMARY 26 Apartment Units in 7 Buildings on the same Block in Holl ins Market Historic Distr ict and Federal Opportunity Zone



of Business. The University of Maryland spin-out bio-tech companies include Gliknik, Advanced Metrics, and Breethe. A new innovation space, called “The Grid” opened at 875 Hollins Street in 2017. The Bio-Tech Park master plan calls for a total of 12 buildings totaling 2 million square feet of space over a 14-acre campus with an expected total investment of over $1 billion. When fully built-out, total employment is expected to increase to 3,000. Hollins Market

Hollins Market is an up-and-coming neighborhood in Southwest Baltimore conveniently located near downtown Baltimore, the Stadium district, and the University of Maryland Biopark. The historic area is very diverse with neighbors of all ages, races, and socioeconomic backgrounds including a recent wave of younger people moving into the area. The neighbors are actively involved in their community striving to work together to create a great place for everyone to live. Various community groups and individual neighbors have adopted empty lots, turning them into beautiful community green spaces and parks. An active community association sponsors monthly COP walks, movie and music nights, as well as an annual fall festival. The neighborhood is also home to a blossoming business district centered around the historic market with unique offerings like a puppet theater, an award winning pizzeria, and a barbershop. The area around the market is also the site of the annual SoWeBo Arts and Music festival that occurs on Memorial Day Weekend. With easy access to the highways and downtown, the location of Hollins Market is a huge selling point as well as the historic housing stock. (source: http://livebaltimore.com)

WalkScore.com grades the 800 block of Hollins Street as “91-Walker’s Paradise” meaning most daily errands do not require a car. The Transit Score of 80 means transportation is convenient for most trips. A 64 Bikeable score means the area is very bikeable. WalkScore gives a “B” Crime Grade to this block, indicating “lower crime area”. The MARC Camden Yards train station (with commuter service to BWI, Washington DC, and Aberdeen), the Baltimore Subway line and Light Rail are just over a ½ mile from the properties. “SOWEBO” (Southwest Baltimore) includes Washington Village (colloquially known as “Pig Town”) and Hollins Market. Every Memorial Day Weekend, the neighborhoods jointly host the Sowebo Arts and Music Festival, which draws hundreds of art and music lovers. Nearby Oriole Park at Camden Yards and M&T Bank Stadium, home of the Baltimore Ravens NFL football team, are just a half-mile from the 800 block of Hollins Street, with Baltimore’s Harbor Place 1 mile away. Historic features include the Lithuanian Hall, just across the street from the Properties, Hollins Market (built in the mid 1800’s) just 3 blocks away, and the B&O Railroad museum, which is also 3 blocks away. All of this makes SOWEBO a fun, exciting, interesting, and inviting place in which to live, work, and play. Martin Luther King Jr. Blvd is just 2 blocks away, with the ramp to I-95 about ¾ mile from the property. MLK also provides easy connection to the Maryland State Office Complex, I-83, and downtown Baltimore.



AGENCY DISCLOSURE: Ben Frederick Realty, Inc. is the seller’s exclusive agent. The seller is a Maryland licensed real estate broker. Ben Frederick III, CCIM, one of Baltimore’s leading multi-family apartment brokers, can be reached on his mobile phone at 410-752-6400 or [email protected] INVESTMENT RISKS: ZONING: 4 of the 7 buildings are authorized for one less apartment than is actually present. Rectifying this could involve (a) combining apartments to make fewer, larger apartments, (b) filing an application to increase the allowed number of units to coincide with the actual number of apartment units present in the buildings, or (c) continuing current operations. The new process of licensing multi-family apartments eliminates Baltimore City Housing Inspectors from visiting each property each year; therefore, it is less likely that operating more units than permitted would come to the attention of enforcement officials. Alternatively, the City’s new “Transform Baltimore” Zoning Code has several provisions that favor more multifamily apartments, such as a process that permits units to be approved without providing off-street parking, provisions that no longer limit the amount of a variance the Board of Municipal Zoning Appeals (BMZA) is authorized to grant. According to our calculations:

859 Hollins has enough lot area to support 4 apartments, though this building contains 3 apartments and is currently zoned and licensed for only 2.

863 Hollins has enough lot area to support 4 apartments, though this building contains 3 apartments and is currently zoned and licensed for only 2.

871 Hollins is currently used as 3 apartments, though it is zoned and licensed for 2 and has enough lot area to support only 2.

40 Parkin is currently used as 3 apartments, though it is zoned and licensed for 2 and has enough lot area to support only 2.

Therefore, 859 and 863 can achieve correct zoning by simply filing a use permit. 871 Hollins and 40 Parkin would require a hearing before the Board of Municipal Zoning

Appeals (BMZA) in order to seek a variance for the lot area requirement. LEAD-BASED PAINT: The properties are believed to have been originally constructed in the late 1800’s. All properties built before 1978 are presumed to contain lead-based paint. The rented apartments have lead-inspection certificates which are up-to-date. The apartments have been renovated and updated at various times. There is no known history of persons contracting elevated blood lead levels while residing in these apartments. UNDERGROUND STORAGE TANKS: only one 275-gallon above-grade oil tank was observed in one of the basements. There is no indication, and the seller has no knowledge of any underground tanks. ASBESTOS: No asbestos insulation was observed on the Realtor’s ® tour and inspection of the properties. Buildings of this age may have asbestos containing insulation, floor tile, ceiling tiles, and in other building materials. This list is not all-inclusive of the investment risks. INVESTMENT OPPORTUNITY: CONTIGUOUS BUILDINGS: The 6 buildings on Hollins Street are contiguous with the exception of 867 Hollins Street. If one were to acquire 867 Hollins Street, one could apply to close Collander Street to create a site over 18,000 sq.ft. or 0.42 acres. One could demolish the existing structures and build a high-rise commercial, residential, or mixed-use property on this site, increasing both density and value.



The Bio-Technology Park has PUD zoning, the boundary of which is on the north side of Hollins Street. It may be possible to amend the PUD to include the subject properties. As the Bio-Technology Park continues to grow and develop, the accumulation of contiguous properties may one day be an attractive acquisition for the University of Maryland, the Bio-Technology Park developers, or for a company or a developer that has a strong desire to be next to the Bio-Tcch Park, offering an additional value-add exit strategy for ownership of the subject properties. OPPORTUNITY ZONE The Tax Cut and Jobs Act of 2017 created attractive and appealing tax incentives for investing in real estate and businesses in certain areas designated as Opportunity Zones. The subject properties are all located in an Opportunity Zone providing methods to reduce or eliminate capital gains taxes from the sale of other assets that are invested in an Opportunity Zone as well as lower taxes on profits made from an investment in these buildings. BELOW MARKET RENTS Typical of apartment properties held in the same ownership for 25 years; the rents charged are well below the market for this area. http://Rentometer.com provides apartment property owners with a comparative analysis of subject property rents versus market rents for the immediate neighborhood in which the subject is located. The average rent for a Studio Apartment in this portfolio is $675. Rentometer suggests an average rent of $1,149 for studio apartments in this market, for a potential 70% increase.



$850 is the average current rent for one-bedrooms in this portfolio; whereas Rentometer suggests a median rent of $1,072 for one-bedroom apartments in this market, a potential increase of 26%.

$1,100 is a typical rent for a two-bedroom apartment in this portfolio where Rentometer.com suggests $1,345 as a fair rent in this neighborhood, an increase of 22%

12/3/2019 Ben F reder ick Real ty Inc . Page 6 3121 Sa in t Pau l S t reet , Su i te 26 Ba l t imore MD 21218 410 -235 -9500


BALTIMORE CITY BLOCK PLAT #237

Hollins Street Apartment Porftolio26 Apartment Units in 7 Buildings

address 859 Hollins 861 Hollins 863 Hollins 865 Hollins 869 Hollins 871 Hollins 40 Parkin Total

Total Units 3 4 3 5 5 3 3 26

Studio 0 0 0 4 4 1 0 9

1BR 1 3 1 1 0 1 3 10

2BR 1 1 2 0 1 1 0 6

3BR 1 0 0 0 0 0 0 1

Garage 1 0 1 1 0 0 0 3

Rent 3,250 3,675 3,000 3,300 3,675 2,300 2,210 21,410

Tax Assessme 256,700 257,667 244,300 207,767 230,833 199,800 179,267 1,576,334

Tax Bill 6,058 6,081 5,765 4,903 5,448 4,715 4,231 37,201

Gas & Electric - 762 3,373 3,056 5,746 - 2,225 15,162

Water 2,990 2,952 1,861 1,233 2,386 1,357 1,764 14,543

Landlord Pays PS Electric

Heat, Hot water, electric for 1st floor Heat, PS Elec

Heat, Elec for Studio apts heat, hot water

Zoning 2 4 2 5 5 2 2 22

Lot Size 25'6"x131'4" 25'6"x131'6" 20'x131'6" 20'x131' 18'x80' 15'x80' 18'x63'

Lot Sq Ft 3348.915 3353.25 2630 2620 1440 1200 1134 15,726

R-8 Permits 4.47 4.47 3.51 3.49 1.92 1.60 1.51

Zoning Round 4.00 4.00 4.00 3.00 2.00 2.00 2.00

Bldg Sq Ft 4,446 4,842 4,380 3,120 3,120 3,330 2,528 25,766

Grount Rent fee simple fee simple fee simple fee simple fee simple fee simple 38.25 38

List Price 385,000 385,000 325,000 350,000 350,000 250,000 225,000 2,270,000

Package List Price 2,100,000

Package Discount 7.5%

Price per Unit 80,769

Price per Sq.Ft. 82

Hollins Market Rent Roll

Building Unit Size Lease Exp SecDep SDDate Rent Market

859 1 2 BR 2 Ba monthly 1,100.00 9/23/2014 1,100 1,150

859 2 1 BR vacant 750

859 3 3 BR 2 Ba vacant 1,400

859 Garage 2 car monthly 150 150

861 1F 1 BR monthly 850.00 2/1/2017 850 875

861 1R 2 BR 2.5 Ba vacant 1,000

861 2F 1 BR moving 12/15 850.00 8/13/2010 850 1,000

861 3 1 BR monthly 875.00 6/1/2014 875 900

863 1 1 BR vacant 0.00 3/22/2019 1,000 1,050

863 2.3F 2 BR 2 Ba 1,200

863 2.3R 2 BR 2.5 Ba monthly 550.00 7/7/1996 750 850

863 Garage 2 car monthly 150

865 1F studio monthly 650.00 3/26/2017 650 675

865 1R 1 BR vacant 675

865 2F studio

monthly? Looks

vacant 675.00 10/12/2017 675 695

865 2R studio vacant 675

865 3 studio monthly 400.00 7/29/2003 550 600

865 Garage 2 car monthly 125 150

869 1 2 BR 2 Ba moving 12/31 1,100.00 7/1/2019 1,100 1,150

869 2F Studio monthly 600.00 11/11/2008 600 650

869 2R Studio monthly 650.00 8/28/2016 650 675

869 3F Studio vacant 675 695

869 3R Studio monthly 650.00 7/16/2017 650 675

871 1st Floor 2 BR 2 Ba 6/30/2020 1,250.00 9/30/2018 1,250 1,300

871 2nd Floor Studio monthly 275.00 4/28/1998 400 600

871 3rd Floor 1 BR monthly 650.00 5/9/2014 650 675

40 1st Floor 1 BR monthly 785.00 3/20/2015 785 900

40 2nd Floor 1 BR monthly 400.00 12/13/1996 650 900

40 3rd Floor 1 BR vacant 775 900

15,760 23,065

bed but no clothes, may be vacant, maybe occupied

Prepared by: Ben Frederick III, CCIMBen Frederick Realty Inc., Apartment Specialist410-752-6400; [email protected]

12/3/2019Page 1

I N V E S T M E N T O F F E R I N G: 2,100,000

Loan‐to‐Value 75% S U G G E S T E D L O A N A M O U N T 1,575,000

Loan Amount 1,575,000 E S T I M A T E D C L O S I N G C O S T S 105,000

Interest Rate 4.50% T O T A L I N V E S T M E N T 630,000

Term 25 Price Per Unit 26 80,769

Monthly P & I 8,754.36$ Price Per Sq.Ft. 25,766 82

Building Studio/Office 1BR 2 BR 3 BR/4BR Current Actual Rent Market Rent

859 Hollins St 1 1 1 3,250 3,450

861 Hollins St 3 1 3,675 3,700

863 Hollins St 1 2 3,000 3,250

865 Hollins St 4 1 3,300 3,470

869 Hollins St 4 1 3,675 3,845

871 Hollins St 1 1 1 2,300 2,575

40 Parkin St 3 2,210 2,700

Average Rent 675 850 1100 Garage Rent: 450 450

Total Monthly Rental Income 21,860 23,440

Scheduled Annual Income 262,320 281,280

GRM (actual) = 8.4 Vacancy / Credit Loss 5% 13,116 14,064

GRM (market) = 7.9 Total Gross Annual Income 249,204 267,216

Real Estate Taxes 859 Hollins St actual 7/1/2020 255,400 6,027

861 Hollins St actual 7/1/2020 261,200 6,164





40 Parkin St actual 7/1/2020 181,400 4,281

Ground Rent 40 Parkin 38

Insurance budget 500 per unit 13,000

License ‐ Baltimore City MFD actual 35 per resid unit 910

Baltimore City Rental Inspection budget 75 per unit / 3 years 650

Lead Paint Registration Fee actual 30 per resid unit 780

Property Management budget 5% of collections 13,361

Repairs & Maintenance budget 750 per unit 19,500

Gas & Electric 859 Hollins St actual 44 per month 528


Gas & Electric 863 Hollins St actual 281 per month 3,372




Gas & Electric 40 Parkin St actual 185 per month 2,220

Water actual 48 per unit per mo 15,022

Expense/Unit= $4,500 44% TOTAL EXPENSES 116,845

Cap Rate= 7.16% NET OPERATING INCOME 150,371

DCR= 1.43 Less: Mortgage Payments: 105,052

ROI= 7.2% Monthly Cash Flow: $3,777 Annual Cash Flow: 45,319

H O L L I N S S T R E E T A P A R T M E N T S I N V E S T M E N T P R O P E R T Y I N C O M E A N D E X P E N S E B U D G E T

S U G G E S T E D F I N A N C I N G:

Apartment Sales

address date sold sales price # units Monthly Rent Price per Unit GRM sq ft $/sq ft Quality Location

820‐822 Lombard Mar‐19 490,000 8 6,490 61,250 6.3 6,480 75.62 inferior similar

41 Parkin May‐19 300,000 4 3,900 75,000 6.4 4,272 70.22 similar similar

869 Lombard Feb‐18 235,000 3 2,325 78,333 8.4 2,346 100.17 inferior similar

1433 Lombard Nov‐18 320,000 4 3,831 80,000 7.0 3,510 91.17 superior superior

1400 Lombard 2/29/19 241,500 3 2,900 80,500 6.9 3,642 66.31 similar superior

869 W Lombard Nov‐19 245,000 3 2,375 81,667 8.6 2,346 104.43 similar similar

832 1/2 Lombard Feb‐18 270,000 3 2,655 90,000 8.5 2,496 108.17 inferior similar

1521 Lombard Jun‐19 370,000 4 3,600 92,500 8.6 2,210 167.42 similar superior

832 1/2 Lombard Jul‐19 315,000 3 2,750 105,000 9.5 2,496 126.20 similar similar

835 W Lombard contract 440,000 4 4,325 110,000 8.5 3,972 110.78 superior similar

835 W Lombard active 450,000 4 4,325 112,500 8.7 3,972 113.29 similar similar

816 Lombard Mar‐18 270,000 2 2,400 135,000 9.4 2,868 94.14 inferior similar

859 Hollins Package List Price 2,100,000 26 21,410 80,769 8.2 25,766 81.50 subject subject

Prepared by: Ben Frederick III, CCIM

Ben Frederick Realty, Inc. ‐ Baltimore's Apartment Property Specialist

410‐435‐5040 www.BenFrederick.com 12/3/2019

for sale: 26 apartments in 7 buildings · $2,100,000 $80,769 per unit; 82 per sq. ft. one property...

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