2323 S STREET

MULTI-FAMILY PROPERTY FOR SALE IN SACRAMENTO’S URBAN CORE

Section One: The Opportunity

0 1

THE OPPORTUNITY

The Subject Property is an incredibly charming and

architecturally distinct garden style multi-family

complex. The well maintained complex features five

unique and desirable buildings situated on a lushly

landscaped 12,634SF parcel. The front triplex with

brick façade and wood shake roof features a two bed-

room one bath unit, a one bedroom one bath unit and

a studio unit in the back. Two stand alone one bed-

room cottage units are situated in the middle of the

courtyard and flanked by a duplex on the back and a

duplex on the western side of the property. A majority

of the units have been renovated and well maintained

throughout the ownerships 30+ year history of owner-

ship. Each unit has charming architectural details and

features that make them timeless and very desirable.

These features are complimented by lush landscaping,

community washer/dryer and 7 onsite parking spaces.

As tenants vacate, a new owner has the opportunity to

add light renovations and appointments to maximize

rental income potential.

In addition to an efficient design 2323 S Street en-

joys an incredible location in a central location with

proximity to the R Street Corridor, Poverty Ridge and

Midtown. Prominently positioned on a 12,800 sf parcel

on S Street between 23rd and 24th Streets, the Sub-

ject Property is located within easy walking distance

to an array of Sacramento’s finest midtown eateries

and café’s and a wide variety of coffee shops and wa-

tering holes.

One block from light rail station, walking distance to

Sacramento Natural Food Co-Op and walking distance

to the Ice Blocks development & Safeway Center.

2323 S Street is being offered at a price of $2,495,000

based on an in-place$125,820 of gross income and

a proforma income of $247,080 with proforma net

operating income of $168,960 inclusive of pro-forma

property taxes and $68,235 in operating expenses.

Operating expenses include a 4% vacancy, 5% prop-

erty management and 3% reserve for maintenance.

Proforma includes approximately $300,000 in renova-

tion/stabilization costs.

This is a one of a kind multifamily opportunity with sig-

nificant long term upside and a manageable strategy

to increase cash flow with proactive property manage-

ment and light renovations.

97,295 $2,495,000PRICERSF UNITS

811 7SF AVERAGE UNIT SIZE PARKING SPACES

2323S STREET

Turton Commercial Real Estate is pleased to present the opportunity to purchase 2323 S Street, one of Sacramento’s finest Urban Core multi-family residential properties.

2323 S ST IS AN INCREDIBLY CHARMING AND ARCHITECTURALLY DISTINCT GARDEN STYLE MULTI-FAMILY COMPLEX WITH LUSH LANDSCAPING.

PROPERTY OVERVIEW

0 3

Section One: The Opportunity 2323S STREET

2323 S Street is an extremely well-designed garden

style apartment complex comprised of 9 units. One

2bd/1ba unit, seven 1ba/1ba units and one studio.

Each unit is efficiently designed to provide residents

with ample kitchen and cabinet space, including full

gas stoves, generous living room and a spacious

separate bedroom area with bathroom. The Proper-

ty exteriors have been renovated periodically with

new exterior siding on several buildings, new paint,

renovated kitchens, mini-split units and upgraded

architectural details throughout. The Property also

demonstrates a high degree of attention to detail,

craftsmanship and pride of ownership. In addition,

the Property consists of seven onsite parking spac-

es available to all tenants on a first come, first serve

basis, but also representing a significant source of

additional income as average rent rate for such

parking spaces are $100 per month in this sub-

market. There is also an abundant amount of free

street parking directly in front, and surrounding, the

Subject Property.

1 2Bed/1Ba Unit

7 1Bed/1Bath Units

1 Studio Unit

Single level Triplex with 2bd/1ba unit, 1 bd/1ba unit and Studio

Two Story Duplex with 1bd/1ba units

Single Story Duplex with 1bd/1ba units

Two stand alone 1bd/1ba units

UNIT MIX

Electricity SMUD

Water City of Sacramento

Sewer/Stormwater City of Sacramento

Gas PG&E

Garbage Republic Services

Fiber Comcast/Direct TV/U-Verse

UTIL IT IES

THE UNITS HAVE BEEN RENOVATED AND WELL MAINTAINED, MAKING THEM TIMELESS AND DESIRABLE.

Address: 2323 S Street, Sacramento, CA 95814

Price: $2,495,000Cap Rate on Actual Income: 3.25%Pro-Forma Cap Rate: APN:

6.00%010-0035-004-0000

Year Built: 1955Number of Units: 9Rentable Square Feet: 7,295 SFParking Spaces: 7 unreserved surface spacesAverage Unit Size: 811 SF Average In-place Rent:Zoning:

$1,156R3A

Occupancy: 100%

PROPERTY DETAILS

Section One: The OpportunitySection One: The Opportunity

0 6

2323S STREET

Section Two: Building Location

5

1

BLOCKS FROM THE ICE BLOCKS DEVELOPMENT

BLOCK FROM THESAC BEE & LIGHT RAIL

13BLOCKS FROM THEEAST END PROJECT

13BLOCKS FROM THE

STATE CAPITOL PARK

11BLOCKS FROM INTERSTATE

50 EGRESS & INGRESS

15BLOCKS FROM THE

PERIMETER OF THE CBD

6

3

BLOCKS FROM BROADWAY CORRIDOR & HWY 99 SOUTH

BLOCKS FROM THE PRESS MIXED USE DEVELOPMENT

18BLOCKS FROM THE

SAC CONVENTION CENTER

10

4

BLOCKS FROM SAC’SURBAN MEDICAL CORRIDOR

BLOCKS FROM THESAFEWAY SHOPPING CENTER

8

4

BLOCKS FROM THE MIDTOWN GRID & K STREET CORRIDOR

BLOCKS FROM TEMPLE COFEE & SAC NATURAL FOOD CO -OP

9

4

BLOCKS FROM INTERSTATE 80 NORTH EGRESS & INGRESS

BLOCKS FROMWINN PARK

0 7

BUILDING LOCATIONIN THE MIDDLE OF A HIGHLY-DESIREABLE NEIGHBORHOOD

2323 S Street enjoys one of the most desirable locations in Sacramento’s dynamic midtown/downtown core. One block south of the robust R Street corridor, residents

are located within easy walking distance of virtually every significant landmark in Sacramento’s urban core:

Nearby Mural by Nate Frizzel

2323S STREET

EASY ACCESS TO THE AMERICAN RIVER BIKE PATH: 32 MILES OF PAVED TRAIL FOLLOWING THE LENGTH OF THE AMERICAN RIVER.

Nearby Mural by Shaun Burner & Miguel Bounce Perez

0 9

Section Two: Building Location

Hacker LabState Capitol

Fremont Park

Tuli BistroSacramento Bee

Press Development

The Sandwich Spot

Cafe BernardoR15

Burgers & BrewNaked Lounge

Iron Horse TavernMas Taco Bar

BawkTemple Coffee

Hot Italian

Tea Cup CafePress Club

SubwayCafe Aulait

TownHouse LoungeOld Tavern BarThe Zebra Club

Pour House

MikuniP.F. Chang’s Bistro

Sapporo GrillPetra Greek

Ma Jong’sCafetaria 15LThe Park Ultra

Lucca Mulvaney’sDevine Gelateria

ChipotleThe Press Bistro

Paesanos58 Degrees

ZocaloJack’s Urban Eats

SubwayHook & Ladder

Ernesto’s Mexican

Thai CanteenNishiki Sushi

Starbucks

SafewayPanda ExpressPeet’s Coffee

StarbucksPhil’z Coffee

Mendocino FarmsRyuJin Ramen

Beast & BountyMilk Money Donuts

S

24th

23rd

2323 S Street

Golden 1 Center

Temple CoffeeRevolution WinesPushkin’s BakerySac Food Co-Op

(a few blocks away)

MARRS2323S STREET

Kupros Bistro

CLARA Auditorium

LowBrauNektar Juice Bar

Luigi’s SliceBlock Butcher Bar

Ginger Elizabeth’sCrepeville

Buckhorn GrillAioli

Old Soul Co.Trey B Cakes

The RindBroderick’s

Bombay Bar & GrillPieces Pizza

Skybox Bar & Grill

Badlands DanceHeadhunters

Faces

2 0

The Property also benefits from proximity to several popular restaurants and bars, with easy access to every corner of the growing city.

POPULAR RESTAURANTS NEAR 2323 S STREET (NOT ALL ARE MENTIONED HERE):

58 Degrees & Holding Co.

Ace of Spades

Aioli Bodega Espanola

Amaro Italian Bistro & Bar

Art of Toys

Azul Mexican

Badlands

Bar West

Bento Box

BevMo

Block Butcher Bar

Bottle & Barlow

Broderick Midtown

Buckhorn Grill

Burger Patch

Burgers and Brew

Cafe Bernardo

Café Bernardo’s

Cantina Alley

Centro Cocina Mexicana

Chipotle

Cornerstone

Crepeville

Der Biergarten

Dos Coyotes

Eatuscany Cafe

Elixir Bar & Grill

Faces

Federalist Public House

Fieldwork Brewing Co.

FishFace Poke Bar

Fit Eats

Fox & Goose Public House

Ginger Elizabeth Chocolates

Grange

Highwater

Hot Italian

I Love Teriyaki

Identity Coffee

Iron Horse Tavern

Jack’s Urban Eats

Karma Brew

Kru Japanese

Bombay Bar & Grill

Kupros Craft House

Lowbrau

Lucca

Luna’s Cafe & Juice Bar

Mango’s/Burgertown

Make Fish

Mercantile Saloon

Metro Kitchen & Drinkery

Mikuni Sushi

Monkey Bar

Mulvaney’s B&L

N Street Cafe

Nekter

Nido

Nishiki Sushi

Old Soul Coffee

Pachamama Coffee Coop

Paesano’s

Paragary’s

Pizzeria Urbano

Portofino’s

Press Bistro

Pronto Pizza

Pushkin’s Bakery

Q Street Bar & Grill

R15

Red Rabbit

Rick’s Dessert Diner

Roxie Deli and Barbecue

Sakamoto

See’s Candies

Shady Lady

Shoki Ramen House

Skool

Squeeze Inn

Sun & Soil Juice

Tank House BBQ

Tapa the World

Tea Cup Cafe

Temple Coffee

Thai Basil

Thai Canteen

The Bread Store

The Golden Bear

The Mill Coffee House

The Porch

The Press

The Rind

The Waterboy

Tres Hermanas

Uncle Vito’s Pizza

University of Beer

Waffle Square Country Kitchen

Yogurt a GoGo

Zelda’s Pizza

Zocalo

1 1

NEARBY AMENITIES

SOUTHSIDE PARK

STATE CAPITOL

ROOSEVELT PARK

SUTTER’S FORT

WINN PARK

TRUITT BARK PARKFREMONT PARK

16TH

P

R

20TH

L

GOLDEN 1 CENTER

Section Two: Building Location 2323S STREET

2323 S STREET

Sacramento is the Capitol of California, the sixth

largest economy in the world. While perhaps not con-

sidered as sexy as many of the tourism based cities

in California such as San Francisco, Los Angeles and

San Diego, being the hub of California’s governmen-

tal structure provides an incredible amount of eco-

nomic stability throughout the region. In addition,

Sacramento is being increasingly recognized as an

outdoor enthusiast’s dream city with its remarkably

central location to Lake Tahoe, the Sierra’s, Yosemite

and the Coast.

In a recent study completed by WalletHub for Na-

tional Nutrition Month, Sacramento was ranked the

5th healthiest city in the United States among 100

large cities (ranking higher than the likes of Denver,

Colorado Springs, San Francisco, Portland, Austin,

San Antonio and Seattle). Forbes magazine ranked

Sacramento as the 10th healthiest city in the United

States versus all cities. A big part of this recogni-

tion stems from the cities’ proximity to the American

River. Hiking trails and white water rafting abound

along the American River as well as one of Sacra-

mento’s crown jewels... the 32 mile American River

Bike Trail which runs entirely along the river from

Beal’s State Park to Discovery Park where it conjoins

with the Sacramento River to Old Sacramento on the

riverfront (only 13 blocks from the Subject Property).

Located only 85 miles east of San Francisco, Sac-

ramento enjoys easy, unfettered access to all of the

entertainment amenities provided by the robust Bay

Area as well as the entire Northern California region,

for about 60% of the cost.

Blessed with a consistent climate featuring over

300 days of sun on average throughout the year, the

region is located at the Northern portion of the Cen-

tral Valley which produces more agriculture than any

other valley in the United States. If you are eating a

tomato in the United States there is a 9 in 10 chance

it came from the Central Valley. Lettuce, almonds,

rice and mandarin oranges are close behind. This

unique combination of soil, water and temperature

in coordination with Sacramento’s solid, highly re-

liable economic base to create the perfect combi-

nation of variables to truly make Sacramento the

“farm-to-fork” capitol of the world. No one on earth,

as a whole, eats fresher food than Sacramentans.

And if you want to select the perfect wine to com-

pliment your meal you are a mere 60 minutes from

arguably the finest wine region in the world. On any

given day it is actually faster (not closer) to get to

downtown Napa from downtown Sacramento than

downtown San Francisco.

Ten minutes from downtown Sacramento is the

University of California at Davis, acknowledged as

one of, if not, the finest agricultural institutions in

America and home to the Mondavi Center, a $10M

performance art center donated by the Mondavi

Family who also maintain a close relationship with

Davis’ renown Viticulture department.

In addition to the State Government, Sacramento

features a number of larger locally based employers

including Vision Service Plan, Blue Diamond Almond

Growers (located on 16th Street), Raley’s, Sutter

Health, Dignity Health, Kaiser Permanente, UC Da-

vis Medical Center, McClatchy as well as California

Public Employees Retirement System and California

SACRAMENTOState Teachers Employee Retirement System... two

of the largest pension funds in the world. Region-

al employers with large presence in Sacramento

include AT & T, Wells Fargo, Intel, Apple, AAA and

Tesla.

Employment growth in Sacramento has largely

outpaced the national average since 2012. Profes-

sional and business services, as well as leisure and

hospitality, have been among the strongest growth

sectors in this cycle, but education and health ser-

vices, sector has been the largest contributor to job

growth since the bottom of the economic downturn.

Total employment in this sector is nearly 25% above

its prerecession peak. Local hospitals have noted

that, as of May 2017, thousands of medical positions

remain unfilled due to the lack of skilled talent in

the metro. Within the professional and business ser-

vices sector, administrative and support jobs have

benefitted, because the metro’s low business costs

attract firms with back-office operations. Continued

growth is expected in the state and local govern-

ment sectors. Sacramento has the highest share of

public sector employment in the country (approxi-

mately 25%) ahead of even that of Washington D.C.

Sacramento’s relative affordability versus ameni-

ties remains one of its biggest draws. Population

growth is expected to average about 1% (20,000

annually for the region) over the next five years and

is expected to outpace the national average. House-

hold growth continues to far outpace the rate of sin-

gle-family and apartment deliveries. In recent years,

Bay Area residents have flocked to Sacramento to

escape exorbitant housing costs.

1 3

Section Three: Sacramento 2323S STREET

THERE’S A REASON EVERYONE IS COMING HERE.

Section Three: Sacramento

The word “renaissance” is often overused and

inappropriate to describe economic improvement

in the urban core of cities throughout the United

States. That is not the case in Sacramento. No-

where is the word “renaissance” more applicable

and demonstrable than the City of Sacramento.

In 2012 the economic outlook for Downtown

Sacramento, and the region as a whole, looked

somewhat bleak. The urban core was anchored

by a blighted and inactivated retail mall located

dead center in its retail grid. The mall, former-

ly owned by Westfield, had undergone several

facelifts none of which achieved the economic

results envisioned. The Sacramento Kings, then

owned by the Maloof Family, were threatening to

leave for Seattle and the 30-year-old Sleep Train

Arena located in a nearby suburb was tired and

functionally obsolete.

All of this changed in 2013 when Mayor Kevin

Johnson used his considerable influence with the

NBA and Northern California to complete the sin-

gle most meaningful and transformative econom-

ic transaction in Sacramento since it was named

the Capitol. He brought in a Bay Area ownership

team to purchase the Kings then worked with City

Management to construct a masterful plan to

build a new state-of-the-art 19,000 seat arena

in place of the blighted center at the heart of the

downtown grid.

The impact to Sacramento’s urban core of this

miraculous achievement cannot be overstated

and it has truly formed the foundation for Sacra-

mento’s urban renaissance. Since the formal ap-

proval by City Council of the Cities’ contribution

to construct the Arena (and retain the Sacramento

Kings) the floodgates have figuratively opened to

the urban migration of retailers, businesses and

residents. Vacancy rates in commercial properties

have dropped steadily and rapidly in every urban

district. Property values escalated exponentially.

Blighted buildings on the J, K and L Street corri-

dors were (or are in the process of being) activat-

ed. Over 2,000 new residential units have been

constructed over the last three years.

R Street, an avenue of old industrial warehous-

es, has been transformed into a community of

high-end office workers, artisans, restaurants

and residents. Between 2016 and 2019 over 1,000

new residential units will be added to the Down-

town Grid and/or immediately surrounding blocks.

Midtown, already recognized nationally as one of

the most walkable business/residential neighbor-

hoods in America, unofficial home of the farm-to-

fork movement and home to over 100 restaurants

and eateries, became even more popular with

rents soaring into the upper $30 per sf annual

range and vacancies diminishing to under 4%.

Residential rents which had historically hovered

below $2 per square foot escalated to $3+ per sf

for best-in-class properties.

The significantly increased demand for resi-

dences is not just a function of increased ame-

nities (although that appears to be the piece that

was missing to expedite the process). It is also

a function of the evolution taking place at a na-

tional level to manage resources more efficiently.

urban renaissance

1 5

Dominated by single and two-person family struc-

tures, urban renters recognize they have virtually

no maintenance requirements (yard, pool, larger

scale housing, etc...) and much more efficient

transportation options. Today, urban residents

may not even need a car. This is particularly true

if one is a resident of Lofts at The Chestnut lo-

cated just three blocks from the busiest public

transportation hub in the City, and 2 to 3 blocks

from the primary urban grocery store (Safeway).

Over 120,000 people work in the Downtown/Mid-

town area and there is no workplace that isn’t in

walking distance from the Subject Property. In

addition, the amount of utility resources (electric-

ity, gas, water and trash) are greatly minimized in

apartment environments and this is certainly true

in the Subject Property.

Sacramento ‘s multi-family residential occupan-

cy has been well below national averages for Tier

1 and 2 population centers for many years and

current rents and waiting lists indicate it may be

many more years for supply to meet the pending

demand.

According to a recent study completed by Bay

Area Economics (BAE) Urban Economics in coor-

dination with the Capitol Area Development Au-

thority (CADA) and the City of Sacramento, only

6% of the population lives in the urban core.

Estimated demand over the next decade is more

than 11,700 units with a possible demand of up

to 20,000 units. Current total pipeline supply is

approximately 4,500 units, and that is being very

generous with submarkets like the Railyards, ac-

counting for up to 2,000 of those units, still in

need of significant infrastructure. In addition,

several high-rise residential projects accounting

for at least another 500 units seem, at this time,

economically infeasible requiring rents of over

$4.00 per sf to warrant concrete, steel and glass

construction inclusive of multi-story concrete

parking structures.

Moreover, according to that same study, demand

for apartment units targeting residents with

median family incomes in excess of 120% over

the mean is almost 2,000 units above projected

supply. This does not account for the economic

construction challenges mentioned above. It goes

without saying the number of professional workers

in the urban core of the State’s Capitol is exten-

sive. 60% of the workforce has some college ed-

ucation and over 1/3 of the workforce have bach-

elor’s degrees or graduate degrees. Over 38% of

the workforce is millennial or Gen Y and over 39%

of the workforce earns over $50,000 annually and

25% earn $75,000 - $150,000+ per year.

These figures also do not account for regional

migration from the Bay Area which appears in-

creasingly imminent as housing prices in the

Sacramento Region are approximately 60% of

Bay Area prices in every category. Suffice to say,

the future of luxury apartments looks very, very

bright in Sacramento’s urban core and Lofts at

The Chestnut is Sacramento’s finest luxury apart-

ment project.

demand for luxury living

2323S STREET

1 7

Section Three: Sacramento 2323S STREET

SFR Cottage : 2321 S St

620 SFSTE C - $1,000/month

1bd/1ba

Triplex & Coin-Op Laundry

2321 S St: 1bd/1ba - $1,350/month2323 S St: 2bd/1ba - $1,850/month

2321 S St: STE A - Studio

Duplex: 2321 S St

940 SF EachSTE D - upstairs unit

SFR Cottage : 2321 S St

675 SFSTE B - $1,350/month

1bd/1ba

Duplex : 2321 S St

720 SF EachSTE F - $1,275/month

SACRAMENTO’S CITY RANKINGS

FASTER GROWTH THAN AVG IN PRO-FESSIONALS WITH BACHELORS

2013 2015 2017 2019100%

102%

104%

106%

108%

110%

SACRAMENTO DATA BITESSacramento’s relative affordability versus amenities remains one of its biggest draws. Population growth is expected

to average about 1% (20,000 annually for the region) over the next five years and is expected to outpace the national

average. Household growth continues to far outpace the rate of single-family and apartment deliveries. In recent years,

Bay Area residents have flocked to Sacramento to escape exorbitant housing costs.

1 9

Section Three: Sacramento

#1 Happiest workers in midsized cities

#2 Top 10 most fun, affordable U.S. cities

#4 U.S metro clean tech index

#4 Best cities for nerds

#5 Hot startup cities

#5 U.C. cities with fastest tech job growth

#5 Healthiest large city in America

#6 Nation’s greatest cities for food lovers

#10 Best cities for women in the workforce

#10 Best cities for coffee snobs

#10 Lease Stressed-out cities

#14 America’s coolest cities

#16 Best cities for millennials

#25 America’s top 50 biking cities

SACRAMENTO REGION ANNUAL SALARY BREAKDOWN:

Over $100,000 - 17%$75,000 - $100,000 - 11%

$60,000 - $75,000 - 10%$40,000 - $60,000 - 18%

$30,000 - $40,000 - 12%Under $30,000 - 32%

LARGEST EMPLOYMENT INDUSTRIES WITHIN 1 MILE RADIUS OF THE PROPERTY:

ANNUAL CONSUMER SPENDING WITHIN A ONE MILE RADIUS OF THE PROPERTY:

Entertainment

Eateries/alc.

Transport

Health & ed.

Household

20 40 60 80*Numbers in millions0

*Based on data from 2019

NUMBER OF EMPLOYEESWITHIN VARYING RADIUS OF THE PROPERTY:

1 MILE 2 3

85,223

147,025

189,518

48% Public Admin. & Sales

17% Science & Tech.

4% Information

5% Healthcare & Social

7% Hospitality & Food

19% Other

WALKSCORE:

94BIKE

SCORE:

98TRANSITSCORE:

52

2323S STREET

THERE’S NEVER BEEN A BETTER TIME TO COME TO SAC

L O S A N G E L E S

S A N J O S E

DEMANDSacramento’s strong economic momentum has con-

tinued through 2019. Apartment demand began in 2012

driven by distress in the housing market, forcing many

former homeowners to become renters, in addition to

a steady rebound in employment beginning that same

year. The metro’s vacancy recovery has not yet been

burdened by large-scale supply additions, which has al-

lowed vacancies to remain near historical lows. Greater

net in-migration, particularly from the Bay Area, and

solid demographics have helped boost demand. Accord-

ing to Apartments.com, more than 30% of year-to-date

searches for Sacramento apartments came from Bay

Area residents (as of March 2019). Midtown Sacramen-

to was listed as one of their most popular search areas.

Improving economic conditions have supported steady

demand. Construction, Education and Health services

led the way in job growth year-to-date and this trend is

expected to continue in Sacramento’s urban core with

Kaiser expected to occupy their new 200,000 sf loca-

tion at 6th and J Street as well as their new medical

campus spread out over 17 acres in the Railyards over

the next decade. Above-average employment growth is

also expected to continue in the leisure and hospitality

sector, thanks in large part to the new retail and hotels

opening in relation to the Golden 1 Center development.

Sacramento’s apartment market remains one of the

top-performing markets in the country with strong rent-

er demand across the region.

SUPPLYThe majority of projects underway are in the affluent

suburban submarkets of Roseville/Rocklin and Elk Grove.

A few developers have focused on market rate urban core

properties such as Eviva, a 118-unit modular develop-

ment 2 blocks north of the Subject Property, Ice House, a

LOCAL APARTMENT MARKET

2 1

Section Three: Sacramento

S A N F R A N C I S CO

146-unit development 2 blocks south of the Subject Prop-

erty (occupancy October, 2017), 19Q (44 units occupancy

Q1/2018), the 700 Block of K Street (136 units on K Street

occupancy Q2/2018), 19J (160 studio units delivery Q1

2019) and the 800 Block of K Street (170 units scheduled

for Q3/2019). This does not even come close to supply-

ing the apparent demand for urban core apartments as

most of these projects have waiting lists at rents above

pro forma (and pro forma is over $3 per sf). As stated

earlier and pointed out in the recent study completed by

Bay Area Economics, the pending demand for higher end

fair market apartments is at least 2,000. Given the scar-

city of available land, the emphasis at the City level for

providing “low income” housing options, the increasing

cost of permit fees and the ever-extending construction

timelines for project completions, it appears the supply

of market rate urban housing will be constrained for

the foreseeable future.

RENT CONTROLWith both the State of California and the City of

Sacramento both passing rent control ordinances, we

anticipate that the impacts from these bills will largely

benefit Landlords in that it will impact tenant mobility,

has the potential to constrain new supply and will firmly

establish continued rent growth in the 4-6% range for

years to come. With limited new supply and continued

strong demographic growth as well as strong prefer-

ences for urban living, we anticipate continued vacancy

compression for high quality urban core rentals. Ten-

ants will have less options and be less mobile. Land-

lord’s will have the ability to increase rents at or above

historical rent growth averages. Vacancy decontrol on

units that do come available will be used by Landlord’s

to bring rents up to market.

Rent control in Sacramento has all but ensured con-

tinued and consistent rent growth.

2323S STREET

ECONOMICS

2 3

Section Four: Economics 2323S STREET

The Property is being offered for sale for

$2,495,000 representing a 3.50% Capitalization

Rate on actual Net Operating Income.

New owner ship has a path towards increasing

rents with a few add-value projects. These are

charging for parking, incorporating Rubs into the

income and bringing units up to fair market rent

as they come available. The refurbished units at

proforma rents are still well below new construc-

tion rental rates and the complex offers privacy

and a unique Midtown experience.

There is still room for upward mobility on the

rents as nicely refreshed/remodeled units may

well achieve $1400 per month. There are also

7 unreserved parking spaces included with the

Property that are currently made available to

all tenants, free of charge, on a first come, first

serve basis. The two parking stalls in the back

have the potential to be expanded to accommo-

date two additional parking stalls. In many other

typical apartment scenarios in the urban core,

owners make these spaces available to residents

on a reserve basis for $100-150 per month de-

pending on the stall being single or tandem. The

result would be an increase in Net Operating In-

come (NOI) of $7,800 annually by charging $100

for the two single stalls up front and $150 for the

three tandem stalls in the back.. The generous

abundance of free street parking surrounding

the Property makes this a realistic revenue ob-

jective.

Lastly, ownership is not yet collecting utility re-

imbursements from any of the tenants. RUBs are

commonplace at virtually all comparable apart-

ment projects and therefore also seem achiev-

able over the course a 12 – 24 month period. A

$50 per month utility reimbursement would also

increase NOI by $5,400 annually.

The Property is being sold “as-is, where-is”.

30$1,247,500 $2,495,000PURCHASE PRICELOAN TO VALUE YEARS TERM

10 4.55%YEARS FIXED RATE TERM INTEREST RATE

730 I S T R E E T

2 5

2409 L STREET, STE 200 SACRAMENTO, CA 95816

916.573.3300 TURTONCOM.COM

© 2019 The information contained in the Offering memorandum is confidential and is not to be used for any other purpose or made available to other persons without the express written consent of Turton Commercial Real Estate (“TCRE”), Ken Turton or the owner. The material contained herein is based upon information supplied by owner in coordination with information provided by TCRE from sources it deems reasonably reliable. Summaries of documents are not intended to be comprehensive or all-inclusive but rather a general outline of the provisions contained herein and subject to more diligent investigation on the part of the prospective purchaser. No warranty, expressed or implied, is made by owner, TCRE or any other respec-tive affiliates, as to the accuracy or completeness of the information contained herein or any other written or aral communication provided to a prospective purchaser in the course of its evaluation of the Property. No legal liability is assumed or to be applied in connection with the information or such other communication. Without limiting the general nature of the foregoing, the information shall not be deemed a representation of the state of affairs of the Property or constitute an indication that there has been no change in the business affairs, specific finances or specific condition of the Property since the date of preparation of the information. Prospective purchaser shall make their own projections and conclusions without reliance upon the materials contained herein and conduct their own independent due diligence, inspection and review of the Property, including but not limited to engineering and environmental inspec-tions, to determine the condition of the Property and the existence of any potential hazardous material located at the site.

KEN TURTONPRESIDENT - LIC. 01219637916.573.3300KENTURTON@TURTONCOM.COM

JOHN MUDGETTVICE PRESIDENT - LIC. 01765754916.573.3306JOHNMUDGET T@TURTONCOM.COM

2323S STREET