The seller does have motivation to sell - all offers are encouraged
260 Garden-Style Units.
Newly constructed within the last 5 years.
Located in a major MSA of Arkansas.
Located in a "A" Location.
Located in a high income. low crime area.
The first value-add component lies in the fact that this property is currently mismanaged by an inexperienced manager.
The second value-add component lies in boosting occupancy. The current occupancy is 82%. The short story here is that this past couple years and present year is based off an average low-80s occupancy percentage. Everyone else in the area is 90%+. If someone can get their arms around the management, and gets this to 90%, they are likely up another $250K NOI.
The third value-add component lies in interior improvements. The current NOI is $1,545,601. The potential gross income at 100% occupied would be +/-$3.1M. That is if there are no renovations made. If someone were to put $7K-$8K into each unit, that 100% occupied number would likely be +/-$3.4M.
At market occupancy (to be conservative lets just use 90%), NOI is +/-$1,850,000 (5.7% CAP at ask price).
35 years remaining on an assumable note at 4.25% fixed Interest Rate and no prepay penalty (this may be the best selling point because at that rate, interest rates have spiked approx. 1.25% since making this loan worth about $2.9M today. In short, if a buyer were to get this financed on the same amortization for the same amount of debt to hit the same cash flow, they would have to pay $2.9M more for the property.
There is approx. $20M in debt remaining on the loan.
Great demographics / high incomes
Strong retail and population growth trends
This property is in great shape and looks brand new.
This property is clearly being sold at below replacement cost.
There is a 250,000 SF headquarters under construction about 1/2 a mile from this property that will bring 900 jobs. This will have an immediate and positive effect on occupancy.
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