a 3-community, 534-site mhc portfolio · across the portfolio would add over $350,000 in additional...

PLEASE DO NOT SPEAK WITH TENANTS OR EMPLOYEES

Maple Grove Estates MHC | 2070 S Almont Ave, Imlay City, MI 48444Shadylane Estates MHC | 2709 Capitol Ave, Warren, MI 48091

Sylvan Lake Estates MHC | 451 S Telegraph Rd, Pontiac, MI 48341

A 3-COMMUNITY, 534-SITE MHC PORTFOLIONOW PRICED: $20,500,000(HOMES INCLUDED)

MAPLE GROVE ESTATES MHC

SYLVAN LAKE ESTATES MHC

SHADYLANE ESTATES MHC

GRAND RAPIDS

KALAMAZOO ANN ARBORDETROIT

FLINT

LANSING

SAGINAW


For a video tour, please visit: https://vimeo.com/370409464



Name Maple Grove Estates MHC Shadylane Estates MHC Sylvan Lake Estates MHC Totals/Average

Address 2070 S Almont AveImlay City, MI 48444

2709 Capitol Ave Warren, MI 48091

451 S Telegraph RdPontiac, MI 48341 -

County Lapeer Macomb Oakland -

Year Built 1992 1959/1965/1969 (3 phases) 1966 -

Tax Parcel IDs I19-85-220-100-00 12-13-30-376-004/12-13-30-380-003* 14-31-303-006/14-31-303-005/14-31-303-004/14-31-303-009 -

Sites 210 244 80 534

Community Type All Ages All Ages All Ages -

Land Size (acres) 33.46 13.80 7.28 54.54

Density (sites/acre) 6.28 17.68 10.99 11.65

MH Physical Occupancy 93.33% (196 sites as of Jan 2020) 94.26% (230 sites as of Jan 2020) 96.25% (77 sites as of Jan 2020) 94.19% (503 sites as of Jan 2020)

MH Economic Occupancy 92.86% (195 sites as of Jan 2020) 71.31% (174 sites as of Jan 2020) 90.00% (72 sites as of Jan 2020) 82.58% (441 sites as of Jan 2020)

Inventory Homes 27 (26 occ as of Jan 2020) 168 (112 occ as of Jan 2020) 47 (42 occ as of Jan 2020) 242 (180 occ as of Jan 2020)

Average Lot Rent (incl trash) $360 $367 $372 $365

Last Rent Increase** May-19 May-19 May-19

Roads Asphalt Asphalt Asphalt -

Floodplain Zone X Zone X Zone X / Zone A / Zone AE -

Zoning RM-1 (Multiple Family Residential) R-4 (Mobile Home Park) R-5 (Trailer Coach Park) -

Utilities

Water Imlay City (Billed back to tenants)

City of Warren (Billed back to tenants)

City of Pontiac (Billed back to tenants) -

Sewer Imlay City (Billed back to tenants)

City of Warren (Billed back to tenants)

City of Pontiac (Billed back to tenants) -

Electricity DTE (Direct billed to tenants)

DTE (Direct billed to tenants)

DTE (Direct billed to tenants) -

Gas Consumer Energy (Direct billed to tenants)

Consumer Energy (Direct billed to tenants)

Consumer Energy (Direct billed to tenants) -

Trash Local Waste Service (Included in rent)

Waste Management (Included in rent)

Waste Management (Included in rent) -

Cable Charter (Direct billed to tenants)

Comcast and WOW (Direct billed to tenants)

Comcast and WOW (Direct billed to tenants) -

PORTFOLIO INVESTMENT HIGHLIGHTS • Rare opportunity to acquire a sizable portfolio of 3 communities with 534 total sites and strong physical and economic occupancy (averaging roughly 94%

and 83%, respectively). All the communities are serviced by public utilities.

• The communities have been owned for 25+ years by the same family who have historically preferred to keep park owned homes as rentals. Demand is strong in these markets, so a new owner could implement a more aggressive approach to increasing occupancy through a mix of rentals, LTO’s, and sales.

• Lot rents across the portfolio are up to $123 lower than the average across comparable family communities from recent JLT reports. Taking rents to market across the portfolio would add over $350,000 in additional annual revenue for a new owner.

• The offering includes 242 community-owned homes, of which 74% are currently occupied either as pure rentals or lease-to-own with an average home rent of $256. With 62 vacant park owned homes, a new owner can quickly increase occupancy through rehab of existing homes. There is also opportunity for a new owner to begin converting home renters to home owners.

• There are 25 lease option homes at Maple Grove Estates, 3 at Shadylane Estates, and 37 at Sylvan Lake Estates. The lease to own homes are put on four‐year contracts with fixed monthly payments. At the end of the four years, the tenant has the option to buy the home for the specified contract price. If the tenant does not elect to purchase the home at the end of their lease, a new contract is put in place. There is a onetime fee of $500 that is paid if the Tenant decides to renew with a new contract (see example in Online Document Library for more detail).

• All of the communities are located within one hour of each other and within 50 minutes of the Detroit airport, allowing a new owner to immediately benefit from economies of scale and gain a strong stable of employees making it extremely time and cost efficient to oversee the portfolio.

• The communities will be delivered free and clear, allowing a new owner to put attractive non-recourse fixed rate debt on the portfolio.

• Within a 10-mile radius of each community, the average household income across the portfolio is $88,000 with average home values at $246,000.

*Excludes 5 small parcels (see Online Document Library)**No formal process for raising or assessing “market rent” and renewals are max of $25 increase upon maturity

A 3-COMMUNITY, 534-SITE MHC PORTFOLIONOW PRICED: $20,500,000 (HOMES INCLUDED)

2

PORTFOLIO DETAILS

DETROIT MSA OVERVIEWDetroit and its surrounding areas are a major center of commerce and global trade. Most notably, Detroit is home to America’s big three Automakers: GM, Ford and Chrysler and many of their associated suppliers. Michigan is ranked #1 in North American car, truck and motor vehicle production. The Detroit urban area is the 11th largest in the US with a population over 3.7 million while the MSA consists of over 4.3 million people (ranked 13th overall). The Metro Detroit area has made Michigan’s economy a leader in information technology, biotechnology and advanced manufacturing, helping the state rank as 4th in high tech employment. Since the last great recession in 2009, the unemployment rate for the MSA has dropped dramatically to 4.5% as of August 2019.

A growing private services economy is helping Detroit, as logistics and technology continue to see investments. Construction of the Gordie Howe Bridge between Detroit and Windsor, Canada is underway and is expected to spur growth in transportation and warehousing. Meanwhile, venture capital financing is powering new companies in the area to add jobs at a rapid pace. StockX recently received $110 million in funding that values the privately held firm at more than $1 billion, which is the largest venture capital investment in Michigan’s history. Detroit is also doing a better job retaining younger workers, evidenced by the population of 25 to 29 year old’s rising 24% this decade, more than twice the national average.

GREATER DETROIT MSA TOP EMPLOYERSEMPLOYER INDUSTRY EMPLOYEES

Ford Motor Co. Automotive 48,000

General Motors Corp. Automotive 37,713

University of Michigan Education 32,749

Chrysler Group LLc Automotive 32,514

Beaumont Health System Healthcare 28,038

Henry Ford Health System Healthcare 17,492

CHE Trinity Health Healthcare 14,341

Detroit Medical Center Healthcare 13,458

Rock Ventures Conglomerate 11,563

St. John Providence Health System Healthcare 11,337

Source: Crain’s Detroit Book of Lists, July 2017

The Detroit urban area is the 11th largest in the U.S. with a

population over 3.7 million.

A 3-COMMUNITY, 534-SITE MHC PORTFOLIONOW PRICED: $20,500,000

3

PORTFOLIO DETAILS

INCOMEGross Scheduled Rent

Less: VacancyLess: Bad DebtTotal Rental IncomePlus: Utility IncomePlus: Other IncomePlus: POH IncomePlus: LTO IncomeTotal Other IncomeEffective Gross Income

EXPENSESRepairs and MaintenancePayroll AdministrativeMarketingProfessional FeesUtilities

ElectricityWater/SewerGasTrash

Total Variable ExpensesTaxesOther Tax

2 POH ExpenseInsuranceManagement FeeTotal Operating Expenses

3 Plus: Capital ReservesTotal ExpensesNet Operating Income

Expense Ratio

18

58

$1,722,266 $3,225

267,347

58

18

$2,068

$3,118

0

11,675 22

171,022 320171,022

30,890

45.24%

$1,664,874

$1,310

745

$2,387,105 85.30%

256,179 480

141,609 265

0 0

0

38.16%

267,347 501

28,320

320

$2,363

$1,310

26,700 50

11,675 22

501

9,745

20,914 39

$699,718

23,387 1.00%

Proforma (In-Place)4 Proforma (Mkt Rent/Inc Occ)

$1,906,795

Totals % GSR

$2,798,322

383,233

0 0

0 0

$1,903

Totals % GSR

$2,338,773

408,591 17.47%

141,608 265

$2,304,582Proforma Per Site

$100,300 $188

173,550 325

38,600 72

9,630 18

745

$1,015,976

100.00%

39.87%

0 0

$1,261,907

993

Totals % GSR

$1,843,917

0 0.00%

0 0.00%

$1,843,917

1,507

$4,737

Per Site

$218

0

$1,789

$2,948

1,732

$5,185

Per Site

$260

0

158

0

Actuals

$138,6650

84,16970

30,9910

11,335

20,04294,341

0

18

257,252 482

257

45

111,933 4.04%

$1,104,1130 0

54

4.02%

$1,789

0

265,168

925,071$2,768,987

137,484530,335

Totals % GSR

0.00%

0.00%

100.00%

347

228

$1,724,702

00

$1,724,702185,483121,788497,436

0932

0

53

115,953 4.16%

$1,035,927 $1,940

26,700 50

$1,062,627 $1,990

0 0

$2,784,893 $5,215

Proforma Per Site

$100,300 $188

173,550 325

38,600 72

9,630

9,745 18

219

42

466

177

38

49720,914 39

0 0

397,787

$1,102

2018 Actuals

28,875101,599

$817

Actuals

9,733

145

1

55

2019 Actuals

$955,2490

$955,249$1,574,159

166,1655,859

30,925$436,395

117,17922,484

248,71824,005

311

$588,625

$1,104,113

259,560

37.77%

11

58

$2,068

804,707$2,529,408

$116,6150

77,492462

29,1450

58

486

9,461

$699,718

0

21

18

54,375 102

0

109

Financial Analysis1

30,8900

$1,953

28,320 53

96,002

397,788

81.53%

256,179 480

$1,042,676

4.17%

$4,316

0

0

57,982 10957,981

13.70%

27,983 1.00%

Todd Fletcher303‐260‐[email protected]

Andrew Shih512‐637‐1219

[email protected]

1. Actual numbers based on financials provided by the client.

2. In 2018, the seller started a home renovation program for existing vacant park owned homes, mostly at Shadylane Estates. Seller accounts for home-related expenses in a couple of line items so it is not easy to segregate non-recurring capital expenditures to the homes versus recurring maintenance. As a result, the 2018 and 2019 YTD POH expenses contain significant non-recurring capital items. Prior to the home rehab program, expenses averaged just over $300,000. Given that amount and what we see as an industry average, we are using a 50% expense ratio for the POH Expense assumption in 2018 and 2019 YTD.

3. Historical Capital Reserves are unknown and do not represent actual amounts.

4. Proformas’ are the first-year projection put together by Newmark Knight Frank and may not represent actual future performance.

UNDERWRITING ASSUMPTIONS

ROLL-UP FINANCIAL ANALYSIS


4

PORTFOLIO DETAILS

SITE INFORMATION

ADDRESS 2070 S Almont Ave, Imlay City, MI 48444

COUNTY Lapeer

YEAR BUILT 1992

TAX PARCEL ID I19-85-220-100-00

SITES 210

COMMUNITY TYPE All Ages

LAND SIZE 33.46

DENSITY 6.28 sites/acre

MH PHYSICAL OCCUPANCY 93.33% (196 sites as of Jan 2020)

MH ECONOMIC OCCUPANCY 92.86% (195 sites as of Jan 2020)

INVENTORY HOMES 27 (26 occ as of Jan 2020)

AVERAGE LOT RENT $360 (includes trash)

LAST RENT INCREASE* May-19

ROADS Asphalt

FLOODPLAIN Not in a floodplain

ZONING RM-1 (Multiple Family Residential)

UTILITIES

WATER Imlay City (Billed back to tenants)

SEWER Imlay City (Billed back to tenants)

ELECTRICITY DTE (Direct billed to tenants)

GAS Consumer Energy (Direct billed to tenants)

TRASH Local Waste Service (Included in rent)

CABLE Charter (Direct billed to tenants)

DEMOGRAPHIC INFORMATION 1 MILE 5 MILES 10 MILES

2019 Population Estimate 2,090 12,410 38,310

Population Growth 2010 - 2019 5.03% 4.10% 3.45%

2019 Renter Occupied Housing Percentage 24.8% 15.2% 11.4%

2019 Owner Occupied Housing Percentage 58.1% 74.8% 79.7%

2019 Estimated Average Household Income $58,350 $69,351 $78,298

2019 Estimated Average Owner-Occupied Housing Value $107,941 $199,518 $224,652

Source: U.S. Census Bureau

• Maple Grove Estates MHC is a 3-star all-age community serviced by public utilities and located just off Interstate 69 and State Highway 53, providing easy access to other larger markets such as Flint (25 miles to the west), Port Huron (25 miles to the east), and northern Detroit (20 miles to the south).

• Tremendous value-add potential to raise the lot rents to market. The average adjusted monthly lot rent is $361 according to the JLT report, while Maple Grove Estates’ adjusted monthly lot rent is $341. Increasing rents to the market level would add over $46,000 in additional annual revenue for a new owner.

• The offering includes 27 park-owned homes, of which 26 are currently occupied with an average home payment of $343. The high occupancy for the park-owned homes shows the high demand for this type of housing product in the area.

• The community offers a private country feel but in an urban market with city conveniences nearby such as restaurants, malls, local parks, and camping areas.

• Within a 10-mile radius of the community, the 2019 population is 38,300 and expected to rise to 39,025 by 2024. The average home value is $225,000 and household incomes around $78,000 within the same radius.

• Lapeer County is conveniently located just north of Detroit, along I-69, within 1/3 of the US population and less than an hour from Ontario (Canada’s largest province).

• Universities within close proximity to the community include University of Michigan-Flint (8,300 students enrolled), Oakland University (20,000 students enrolled), Saginaw Valley State University (9,800 students enrolled), and Rochester University (11,200 students enrolled).

INVESTMENT HIGHLIGHTS

*No formal process for raising or assessing “market rent” and renewals are max of $25 increase upon maturity


5

MAPLE GROVE ESTATES MHC PROPERTY DETAILS


6


INCOME2 Gross Scheduled Rent

Less: VacancyLess: Bad DebtTotal Rental Income

3 Plus: Utility Income4 Plus: Other Income

Plus: Home IncomeTotal Other IncomeEffective Gross Income

EXPENSESRepairs and Maintenance

5 Payroll AdministrativeMarketingProfessional Fees

6 UtilitiesElectricityWater/SewerGasTrash

Total Variable Expenses7 Taxes8 Other Tax9 POH Expenses

InsuranceManagement FeeTotal Operating Expenses


Expense Ratio

15

$1,774

$3,661

0

2,730 13

42,209 20142,209

9,450 45

$695,745 $3,313$768,730

$920,460 96.62%

146,259 696

39,623 189

0 0

37.11%

146,259 696

$1,396

885

10,500

201

2.38%

9,527 1.00%

39,623 189

$2,919

4

16,279

10,500 50

2,730 13

696

817

10,000 48

$293,135

9,082 1.00%

Proforma (In-Place) Proforma (Mkt Rent/Inc Occ)

$834,277

0 0

$1,889

Totals % GSR

$908,233

64,874 7.14%

146,259

45

$613,009

$1,020,159Proforma

$396,650

100.00%

32.65%

150,533 717

183

112,001 533

Totals % GSR

$840,367

0 0.00%

0 0.00%

$840,367

1,132

$4,900

Per Site

$95

0

$1,268

$3,632

35

51,468 4.51%

$372,6390 0

50

4.43%

$1,268

0

56,000

301,003$1,141,370

Actuals

$29,6830

21,0110

10,0170

2,650

9,12326,696

38,469

Totals % GSR

0.00%

0.00%

100.00%

385

188

$791,422

00

$791,42280,80839,434

117,405 559

50

44,254 4.00%

$400,097 $1,905

10,500 50

$410,597 $1,955

0 0

$1,106,342 $5,268

Proforma Per Site

$31,500 $150

68,250 325

14,700 70

3,150

817 4

16,279 78

120

53

280

127

43

267

10,000 48

0 0

185,8821,433

$5,435

Per Site

$141

0

100

0

$1,057

Per Site

$31,500 $150

68,250 325

14,700 70

3,150 15

0

885

$4,858

2018 Actuals

10,58645,583

$547

Actuals

2,081

85

1

44

0

10

2019 Actuals

$266,2510

$266,251$762,818

50,640606

14,399$114,961

25,28711,13158,703

7,394

241

$221,958

$372,639

141,999

25.87%

3

69

$1,774

237,647$1,029,069

$20,0320

17,805154

9,2430

48

676

793

$293,135 $1,396

0

13

4

15,805 75

0

78

Financial Analysis1

9,4500

39.91%

Totals % GSR

$952,669

22,683

$1,939

10,500 50

40,806

185,882

91.86%

146,259 696

$407,150

4.00%



[email protected]

FINANCIAL ANALYSIS


2. Proforma (In-Place) GSR = 210 sites x $360.41 avg lot rent x 12 months There are 169 tenants just renting a lot paying an average rent of $360.53 and 26 home/lot renters paying an average lot rent of $359.62

3. Proforma Utility Income assumes a 100% recapture rate from the estimated proforma expense. Utility Income includes water recapture only.

4. Other Income grown 3% from 2019 Actuals. Other Income includes admin fees, pet fees, miscellaneous income, interest income, late fees, NSF Fees, maint/repairs income, additional vehicle fees, collection fee income, application fees, and court cost income (from the profit and loss statements).

5. Historical Payroll expenses are buried within the R&M, Admin, and POH Expense line items.

6. Adjusted Utilities grown 3% from 2019 Actuals.

7. Proforma Taxes = 2019 assessed values ($471,889) x 2019 mill rates (.0638904) grown 40%.

8. Other Taxes includes school taxes ($3 per site for park-owned homes) and license fee taxes from the profit and loss statements.

9. In 2018, the seller started a home renovation program for existing park owned homes. Seller accounts for home-related expenses in a couple of line items so it is not easy to segregate non-recurring capital expenditures to the homes versus recurring maintenance. As a result, the 2018 and 2019 expenses contain non-recurring capital items. Given the historical expenses to operate the homes and from what we see as an industry average, we are using a 50% expense ratio for the POH Expense assumption in 2018 and 2019 Actuals.

10. Numbers do not reflect actual expenses.


Proforma Vacancy (Mkt Rent/Inc Occ) assumes 10 sites get filled from the “In-Place” proforma (approximately 5% increased occupancy).

Proforma GSR (Mkt Rent/Inc Occ) = 185 tenant owned or vacant sites x $380.41 avg lot rent x 12 months) + (25 lease option sites x $360.53 avg lot rent x 12 months). The 25 lease option homes are on a contract where the monthly rate is fixed for a certain term which is why the proforma excludes rent increases for these sites. Currently, lot rents at the community are $20 below market according to adjusted rents in the rent comp table on page 8 (base rent only – excludes utilities included in rent). The $380.41 avg lot rent number consists of Maple Grove’s current unadjusted rents plus the under-market amount ($360.41 + $20).


7


SUMMARY

PROPERTY ADDRESS # OF SITES

PHYSOCC

AVG RENT

RENT INCLUDES

AVG ADJUSTED RENT

1 Crestview Manor 1485 Ridgeview Dr, Lapeer, MI 48446 200 96% $320 T-$19 $301

2 Hunters Creek 725 Demille Rd, Lapeer, MI 48446 399 98% $435 None $435

3 Kingsbrook Estates 4600 N Van Dyke Rd, Almont, MI 48003 233 81% $413 None $413

4 Lapeer Meadows 1265 Farnsworth Rd, Lapeer, MI 48446 230 98% $385 T-$19 $366

5 Pine Lakes 110 Pine Lakes Dr, Lapeer, MI 48446 536 94% $430 W-$39,S-$61,T-$19 $311

6 River Ridge 25 Pine Ridge Dr, Lapeer, MI 48446 215 98% $403 None $403

7 Victoria Meadows 3750 Nash Lane, Dryden, MI 48428 130 100% $320 T-$19 $301

TOTALS/AVERAGES 1,943 95% $387 $361

Maple Grove Estates MHC 2070 South Almont Ave, Imlay City, MI 48444 210 93% $360 T-$19 $341

Source: JLT Market Report, Lapeer County, Michigan February 2019W=Water / S=Sewer / T=Trash

RENT COMPARABLES

LAPEER

IMLAY CITY

ALMONT

METAMORA

GOODLAND

DRYDEN

1

2

3

5

4

6

7

MAPLE GROVE ESTATESM A N U FA C T U R E D H O M E C O M M U N I T Y


8


PROPERTY AERIAL

NEWARK RD

S ALMONT AVE

S VAN DYKE RD

S BLACKS CORNERS RD

MAPLE GROVE ESTATESM A N U FA C T U R E D H O M E C O M M U N I T Y

69

53


9


S BLACKS CORNERS RD

REEK RD

S ALMONT AVENEWARK RD

W BORLAND RD

ATTICA RD

69

69

53

53


IMLAY CITY

FLINT, MI30 MILES

DETROIT, MI48 MILES

Imlay City High School

Borland Road Elementary School

Weston Elementary School

Imlay City Middle School

COMMUNITY ATTRACTIONS


GRAND RAPIDS


FLINT

LANSING

SAGINAW


10


SITE INFORMATION

ADDRESS 2709 Capitol Ave, Warren, MI 48091

COUNTY Macomb

YEAR BUILT 1959/1965/1969 (3 phases)

TAX PARCEL IDS 12-13-30-376-004/12-13-30-380-003*

SITES 244


LAND SIZE 13.8






LAST RENT INCREASE** May-19

ROADS Asphalt

FLOODPLAIN Zone X

ZONING R-4 (Mobile Home Park)

UTILITIES

WATER City of Warren (Billed back to tenants)

SEWER City of Warren (Billed back to tenants)



TRASH Waste Management (Included in rent)

CABLE Comcast and WOW (Direct billed to tenants)


2019 Population Estimate 13,952 358,801 1,399,349

Population Growth 2010 - 2019 1.94% -1.26% -1.79%






• Shadylane Estates MHC is a 3-star all-age community positioned on approximately 14 acres of land and serviced by public utilities. The community is conveniently located minutes away from I-75 and I-696, providing easy access to other larger markets such as Detroit (10-miles) and Novi (22-miles).

• Tremendous value-add potential to raise the lot rents to market and fill vacant park owned homes. The average adjusted monthly lot rent is $476 according to the JLT report, while Shadylane’s adjusted monthly lot rent is $353. Increasing rents to the market level would add over $256,000 in additional annual revenue for a new owner.

• The offering includes 168 park-owned homes, of which 112 are currently occupied mostly as pure rentals with a few lease-to-own averaging $243 for the home payment.

• The population within a 10-mile radius of the community is 1,400,000 with a strong average household income of $67,700. Macomb County is Michigan’s third most populated county, home to three of the top ten most populated communities in the state (Warren, Sterling Heights, and Clinton Township).

• Macomb County is home to a robust transportation and warehousing sector that support the County’s bedrock industry of manufacturing. With a large network of manufacturers producing more than $34 billion of goods each year, the county’s economy depends on industries providing cargo transportation, warehousing/storage of goods, and support activities related to modes of transportation. In fact, the transportation and logistics warehousing industry include more than 500 businesses with total employment of 8,500 workers.

• Amazon recently opened a distribution center in Shelby Township and are currently employing 200 people in the area. The company anticipates reaching 1,000 employees at this location within the next couple of years.

• Macomb County had the largest manufacturing job increase in the nation from 2016 to 2018. According the US Bureau of Labor Statistics, Macomb County added approximately 9,118 manufacturing jobs from the fourth quarter of 2016, to the second quarter of 2018. The report indicates total employment went from 65,137 to 74,255 within that time frame.


*Excludes 5 small parcels (see Online Document Library)**No formal process for raising or assessing “market rent” and renewals are max of $25 increase upon maturity


11

SHADYLANE ESTATES MHC PROPERTY DETAILS


12





Plus: POH IncomeTotal Other IncomeEffective Gross Income



6 UtilitiesElectricityWater/SewerGas

7 TrashTotal Variable Expenses

8 Taxes9 Other Tax

10 POH ExpenseInsuranceManagement FeeTotal Operating Expenses


Expense Ratio

23.77%

14,292 1.00%

$1,872

13,420 55

36,104

147,644

70.31%

72,424 297

$456,719

4.00%

$3,699

0

35,393 14535,393

0

Financial Analysis1

14,6400

23

21

32,444 133

0

145

45.38%

13

56

$2,048

400,192$1,033,562

$69,3970

28,573154

12,9860

58

324

5,215

$293,926

2019 Actuals

$469,0190

$469,019$564,543

74,1073,097

13,674$206,759

66,7977,762

135,60712,314

304

$243,329

$499,830

78,985

2018 Actuals

13,97738,117

$847

Actuals

4,770

117

1

53

274

32

556

176

31

621

7,500 31

0 0

147,644

$997

61,155271,213 1,112

55

48,913 4.00%

$457,328 $1,874

12,200 50

$469,528 $1,924

0 0

$1,222,825 $5,012

Proforma Per Site

$48,800 $200

79,300 325

18,300 75

4,880

5,371 22

303,118

Totals % GSR

0.00%

0.00%

100.00%

278

251

$633,370

00

$633,37067,824 70,314 288

299

50

42,144 3.68%

$499,8300 0

57

3.69%

$1,922

0

151,559

446,462$1,145,994

73,029

1,640

$4,236

Per Site

$284

0

$1,922

$2,314

1,830

$4,697

Per Site

$302

0

135

0

Actuals

$73,7470

33,05670

14,0960

5,716

7,50542,979

0

20

$699,532

Totals % GSR

$699,532

0 0.00%

0 0.00%

$444,519

100.00%

43.62%

$445,879

1,242

$902,598Proforma Per Site

$48,800 $200

79,300 325

18,300 75

4,880 20

605

0 0

$1,822

Totals % GSR

$1,073,727

308,036 28.69%

75,220 308

Totals % GSR

$1,429,201

339,728

12,200 50

5,887 24

333

5,371

7,500 31

$293,927

10,737 1.00%


$754,954

13,420

383

$1,827

$1,205

$1,075,181 75.23%

72,424 297

75,220 308

0 0

38.40%

81,355 333

$646,164

$1,205

605

50.60%

20

$2,048

$2,648

0

5,887 24

93,569 38393,569

14,640

22

60

$753,296 $3,087

81,355

60



[email protected]

FINANCIAL ANALYSIS



2. Proforma GSR = 244 sites x $366.71 avg lot rent x 12 months. There are 62 tenants just renting a lot paying an average rent of $367.06 and 112 home/lot renters paying an average lot rent of $366.52.

3. Utility Income grown 3% from 2019 Actuals. Utility Income includes water recapture and minimal elec/gas recapture.



6. Adjusted Utilities grown 3% from 2019 Actuals (except Trash).

7. Adjusted Trash expense annualized from the Dec ’19 T11 total (trash expense excluded in the Jan ’19 expense).


9. Other Taxes includes school ($3 per site for park-owned homes) and license fee taxes from the profit and loss statements.

10. In 2018, the seller started a home renovation program for existing park owned homes, mostly at Shadylane. Seller accounts for home-related expenses in a couple of line items so it is not easy to segregate non-recurring capital expenditures to the homes versus recurring maintenance. As a result, the 2018 and 2019 POH expenses contain non-recurring capital items. Given the historical expenses to operate the homes and from what we see as an industry average, we are using a 50% expense ratio for the POH Expense assumption in 2018 and 2019.


Proforma Vacancy (Mkt Rent/Inc Occ) assumes 12 sites get filled from the “In-Place” proforma (approximately 5% increase in occupancy).

Proforma GSR (Market Rent) =(241 tenant owned or vacant sites x $489.71 avg lot rent x 12 months) + (3 lease options sites x $360 avg lot rent x 12 months). The 3 lease option homes are on a contract where the monthly rate is fixed for a certain term which is why the proforma excludes rent increases for these sites. Currently, lot rents at the community are $123 below market according to adjusted rents in the rent comp table on page 13 (base rent only – excludes utilities included in rent). The $489.71 avg lot rent number consists of Shadylane’s current unadjusted rents plus the under-market amount ($366.71 + $123).


13


RENT COMPARABLES

SUMMARY


PHYSOCC

AVG RENT

RENT INCLUDES

AVG ADJUSTED RENT

1 Continental Community 20785 Schultes Ave, Warren, MI 48091 265 60% $425 T-$14 $411

2 Glennwood Village 2526 Morrissey Rd, Warren, MI 48091 147 100% $549 None $549

3 Lafayette Place 21155 Warner, Warren, MI 48091 254 98% $530 T-$14 $516

4 Park Lane Mobile Home Court 3193 East Ten Mile Rd, Warren, MI 48091 164 65%* $440 T-$14 $426

TOTALS/AVERAGES 830 81% $486 $476

Shadylane Estates MHC 2709 Capitol Ave, Warren, MI 48091 244 94% $367 T-$14 $353

Source: JLT Market Report, Macomb County, Michigan February 2019W=Water / S=Sewer / T=Trash

*Property has expansion lots and is in the process of bringing in new homes thus explaining the low occupancy percentage.

13

4

2SHADYLANE ESTATES

M A N U FA C T U R E D H O M E C O M M U N I T Y


14


PROPERTY AERIAL

WALTZ AVE

BART AVE

BART AVE

STOLZENFELD AVE

WOODROW

WILSON AVE

METHUEN AVE

WARNER AVE

LOS ANGELES AVE

LOS ANGELES AVE

CAPITOL AVE CAPITOL AVE

SHADYLANE ESTATESM A N U FA C T U R E D H O M E C O M M U N I T Y


15



E ELEVEN MILE RD

E 10 MILE RD

E 9 MILE RD

E 8 MILE RD

FRAZHO RD

RYAN RD

RYAN RD

SHERWOOD AVE

DEQUINDRE RD

JOHN R RD

HILTON RD

MOUND RD

VAN DYKE AVE

E LINCOLN AVE

STEPHENS RDE WOODWARD HEIGHTS BLVD

696

696

75

75

102102

53

GENERAL MOTORS WARREN TRANSMISSION OPERATIONS

FCA WARREN TRUCK ASSEMBLY PLANT

Schofield Elementary School

Hazel Park High School

Lincoln High School

Lincoln Middle School

Fitzgeral High School

Westview Elementary School

ANN ARBOR, MI36 MILES

DETROIT, MI9 MILES



GRAND RAPIDS


FLINT

LANSING

SAGINAW


16


SITE INFORMATION

ADDRESS 451 S Telegraph Rd, Pontiac, MI 48341

COUNTY Oakland

YEAR BUILT 14-31-303-006/14-31-303-005/14-31-303-004/14-31-303-009

TAX PARCEL IDS 80

SITES 80


LAND SIZE 7.28






LAST RENT INCREASE* May-19

ROADS Asphalt

FLOODPLAIN Zone X / Zone A / Zone AE

ZONING R-5 (Trailer Coach Park)

UTILITIES

WATER City of Pontiac (Billed back to tenants)

SEWER City of Pontiac (Billed back to tenants)



TRASH Waste Management (Included in rent)

CABLE Comcast and WOW (Direct billed to tenants)


2019 Population Estimate 8,134 161,167 597,098

Population Growth 2010 - 2019 2.28% 2.08% 3.52%






• Sylvan Lake Estates MHC is a 2.5-star all-age community, but in a 5-star location, positioned on over 7 acres of land serviced by public utilities. The community sits right next to State Highway 24 on Sylvan Lake, providing easy access to downtown Pontiac and other large retail stores including Walmart, TJ Maxx, Marshalls, HomeGoods, and more.

• Tremendous value-add potential to raise the lot rents to market and fill vacant park owned homes. The average adjusted monthly lot rent is $469 according to the JLT report, while Sylvan Lake’s adjusted monthly lot rent is $353. Increasing rents to the market level would add over $48,000 in additional annual revenue for a new owner.

• The offering includes 47 park-owned homes, of which 42 are occupied mostly as lease options and a couple of pure rentals with an average home payment of $236.

• Within a 10-mile radius of the community, the 2019 total population was just under 600,000 with an average household income of approximately $120,964. Average home values were $338,825 and expected to rise to $363,408 by 2024.

• The City of Pontiac sits just 30 miles from Detroit and 40 miles from University of Michigan in Ann Arbor and is next to Sylvan Lake, which is six miles long and covers 532 acres. The lake is the keystone year-round recreational pleasure of choice and sits right next to Pontiac’s Downtown retail district which includes a variety of restaurants, shops, and local businesses.

• The Oakland County unemployment rate is at 3.3% as of 2018 compared to the US rate of 3.7%. Local researchers project the unemployment rate to be at 2.6% by 2020/2021.

• Oakland County has now completed nine consecutive years of job growth since the recession’s low point in 2009.

• During 2018, more than 728,000 people were employed in Oakland County, a sum larger than 13 states. Exports for Oakland County in 2017 exceeded $14.4 billion, surpassing the export totals of 25 states. In fact, a quarter of all exports from Michigan come from Oakland County.

• Among a select few counties nationally to have a AAA bond rating, saving taxpayers millions of dollars.


*No formal process for raising or assessing “market rent” and renewals are max of $25 increase upon maturity


17

SYLVAN LAKE ESTATES MHC PROPERTY DETAILS


18





Plus: POH IncomeTotal Other IncomeEffective Gross Income



6 UtilitiesElectricityWater/SewerGasTrash

Total Variable Expenses7 Taxes8 Other Tax9 POH Expense

InsuranceManagement FeeTotal Operating Expenses


Expense Ratio

5.00%

4,165 1.00%

$2,235

4,400 55

19,091

64,262

89.00%

37,496 469

$178,806

5.00%

$4,773

0

6,309 796,309

70

Financial Analysis1

6,80000

37

43

6,126 77

0

79

47.13%

27

0

36

18,320 3.80%

$231,6440 0

54

3.83%

$2,750

2,086

$5,835Per Site

$340

0

2,220

$6,020

Totals % GSR

54,4084,297

518

$123,338

$231,644

38,575

36

$2,896

54

31,114154

6,9160

86

482

3,453

314

45

680

2019 Actuals

166,867$466,777

$27,1850

$219,9790

$219,979$246,798

2018 Actuals

4,31317,898

108,817 1,360

55

22,786 5.00%

$178,501 $2,231

4,000

$455,726 $5,697Proforma Per Site

$20,000 $250

26,000 325

5,600 70

1,600

3,557 44

85

$1,433

Actuals

2,882

389

2

86

41,4172,1562,852

$114,67525,0943,591

0.00%

0.00%

100.00%461

265

$299,910

00

$299,91036,85121,199

0

57,608

$2,750$3,085

308

43

720

$1,542

6,878

100.00%

$381,825Proforma

$304,018

Per SiteActuals

36,404

1,440

5,6001,600

177,606

$440

0

376

0

$35,2360

30,1020

455

32525,986115,216

Totals % GSR

$304,018

0 0.00%

0 0.00%

48.10%

$481,624

$249,980$2,896$3,125

02,969

3,41424,666

0

$2,185

Totals % GSR

3,414 43

0 0

64,261

$112,657

35,681 10.00%

26,765

20,823

35,244

20

803

335

0

$356,813

4,000 50

3,058 38

497

3,557

3,414 43

$112,657

3,568 1.00%


$317,564

4,400

441

$2,538

$1,408 $1,408

803

$391,464 94.00%

37,496 469

26,765 335

0 0

0

3,058 38

35,244 441

6,800

46.83% 40.05%

39,733 497

$203,019

50

$182,501 $2,281

0 0

$273,225 $3,415

39,733

85

Totals % GSR

$416,451

44

20

Per Site

$20,000 $250

26,000 325

$174,806



[email protected]

FINANCIAL ANALYSIS



2. Proforma GSR = 80 sites x $371.68 avg lot rent x 12 months.

3. Utility Income grown 3% from 2019 Actuals. Utility Income includes water recapture only.



6. Adjusted Utilities grown 3% from 2019 Actuals.


8. Other Taxes includes school ($3 per site for park-owned homes) and license fee taxes.

9. In 2018, the seller started a home renovation program for existing park owned homes. Seller accounts for home-related expenses in a couple of line items so it is not easy to segregate non-recurring capital expenditures to the homes versus recurring maintenance. As a result, the 2018 and 2019 POH expenses contain non-recurring capital items. Given the historical expenses to operate the homes and from what we see as an industry average, we are using a 50% expense ratio for the POH Expense assumption in 2018 and 2019.


Proforma Vacancy (Mkt Rent/Inc Occ) assumes 4 sites get filled from the “In-Place” proforma (approximately 5% increase in occupancy).

Proforma GSR (Market Rent) = 43 tenant owned or vacant sites x $487.68 avg lot rent x 12 months) + (37 lease option sites x $371.19 avg lot rent x 12 months). The 37 lease option homes are on a contract where the monthly rate is fixed for a certain term which is why the proforma excludes rent increases for these sites. Currently, lot rents at the community are $116 below market according to adjusted rents in the rent comp table on page 20 (base rent only – excludes utilities included in rent). The $487.68 avg lot rent number consists of Sylvan Lake’s current unadjusted rents plus the under-market amount ($371.68 + $116).


19


RENT COMPARABLES

SUMMARY


PHYSOCC

AVG RENT

RENT INCLUDES

AVG ADJUSTED RENT

1 Ackels MHC 25151 Dequindre Rd, Madison Heights, MI 48071 116 98% $394 T-$19 $375

2 College Heights 3501 Auburn Rd, Auburn Hills, MI 48326 161 97% $530 W-$46, S-$44 T-$19 $421

3 Groveland Manor 13318 South Dixie Hwy, Holly, MI 48442 186 88% $482 T-$19 $463

4 Lake in the Hills 2700 Shimmons Rd, Auburn Hills, MI 48326 238 92% $619 T-$19 $600

5 Red Run Community 1066 Linda Ln, Madison Heights, MI 48071 122 98% $449 W-$46, S-$44 T-$19 $340

6 Sheffield Estates 165 South Opdyke Rd, Auburn Hills, MI 48326 228 100% $631 T-$19 $612

TOTALS/AVERAGES 1,051 96% $518 $469

Sylvan Lake Estates MHC 451 S Telegraph Rd, Pontiac MI 48341 80 96% $372 T-$19 $353

Source: JLT Market Report, Oakland County, Michigan February 2019W=Water / S=Sewer / T=Trash

PONTIAC

WARREN

ROMEOFENTON

DETROIT

BRIGHTON

TROY

NOVI

4

3

6

1

5

2SYLVAN LAKE ESTATESM A N U FA C T U R E D H O M E C O M M U N I T Y


20


PROPERTY AERIAL

S TELEGRAPH RD

JAMES K BLVD

EDNA AVE

GARLAND ST

SYLVAN LAKE ESTATESM A N U FA C T U R E D H O M E C O M M U N I T Y


21




ORCHARD LAKE RD

ORCHARD LAKE RDBAGLEY ST

W SQUARE LAKE RD

FRANKLIN RD

S TELEGRAPH RD

MID

DLEB

ELT

RD

24

24

SYLVANLAKE

Roosevelt Elementary School


Jefferson Jr High School

Michigan School for the Arts

The Links at Crystal Lake

Forest Lake Country ClubPine Lake Country Club

ANN ARBOR, MI32 MILES

FLINT, MI32 MILES

DETROIT, MI25 MILES


GRAND RAPIDS


FLINT

LANSING

SAGINAW


22

PLEASE DO NOT SPEAK WITH TENANTS OR EMPLOYEES

Additional information is available on our website at: http://arausa.listinglab.com/Motown3Portfolio

!




GRAND RAPIDS


FLINT

LANSING

SAGINAW

A 3-COMMUNITY, 534-SITE MHC PORTFOLIO

PRIMARY CONTACTS

This information has been derived from sources deemed reliable. However, it is subject to errors, omissions, price change and/or withdrawal, and no warranty is made as to the accuracy. Further, no warranties or representation shall be made by Newmark Knight Frank (NKF) and/or its agents, representatives or affiliates regarding oral statements which have been made in the discussion of the above property. This presentation, prepared by NKF was sent to the recipient under the assumption that s/ he is a buying principal. Any potential purchaser is advised that s/ he should either have the abstract covering the real estate which is the subject of the contract examined by an attorney of his/her selection, or be furnished a policy of title insurance. Do Do not contact the Properties.not contact the Properties.

www.ngkf.comManufactured Housing 2530 Walsh Tarlton Ln, Suite 200, Austin, TX 78746 | T 512.342.8100

Joe [email protected] 512.637.1228

Todd [email protected] 303.260.4470

Andrew [email protected]

For a video tour, please visit: https://vimeo.com/370409464

a 3-community, 534-site mhc portfolio · across the portfolio would add over $350,000 in additional...

Documents