executive - hff
TRANSCRIPT
MORNINGSIDE
NORTH1 70 W. OA K ST, C H I C AG O, I L 6 0 6 1 0
E XE CUTIVE SUMMARY
2 5 6 - U N I T S E N I O R P R OJ E C T- B A S E D S E C T I O N 8 ( H A P ) CO M M U N I T Y I N C H I C AG O ’ S D E S I RA B L E O L D TOW N N E I G H B O R H O O D
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2 | EXECUTIVE SUMMARY
EXECUTIVESUMMARY
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4 | EXECUTIVE SUMMARY
P R O P E R T Y O V E R V I E WProperty Type: 100% HAP / Senior (62+)
Address: 170 W. Oak St
City, State: Chicago, IL
Year Built: 1981
Number of Units: 256 Units
Average Unit Size: 576 SF
Net Rentable SF: 147,354 SF
Buildings: 1 Residential
Number of Stories: 18 Stories
Acres: 1.02 Acres
Density: 250.98 Units/Acre
Avg. Contract Rent: $1,534
Proforma Contract Rent: $1,800
Proforma Annual Contract Rent: $5,532,000
HAP Contract Expiration: December 31, 2020
Income Restrictions: 100% HAP
QCT / DDA: No / Yes
T H E O F F E R I N GHolliday Fenoglio Fowler, L.P. (HFF) is pleased to exclusively offer the tremendous opportunity to acquire and preserve Morningside North, a best-in-class affordable senior community located in the heart of Downtown Chicago’s Old Town Neighborhood. The Property offers residents a walk-to-everything location, with immediate access to shopping and dining destinations, abundant community services and amenities, and every mode of public transportation afforded by the city of Chicago. The Property also benefits from a project-based Section 8 (HAP) contract that covers 100% of its units. Current contract rents significantly lag rents achieved at comparable properties and the guaranteed rental revenue provided by the HAP contract, coupled with an income qualified senior resident base, makes Morningside North an ideal candidate for preservation.
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MORNINGSIDE NORTH
O F F E R I N G P R O C E D U R E S
Tour Schedule:
Please contact Michael Fox ([email protected]) or Doug Childers ([email protected]) to schedule a tour. Under no circumstances are Investors allowed to visit the Property without approval from HFF. Failure to adhere to this request will be taken into consideration by the Seller when offers are selected.
Offer Date:
All offers are due on or before Thursday, April 5th, 2018 at 5:00 PM (EST) and should be e-mailed to Michael Fox ([email protected]) or Doug Childers ([email protected]).
Best & Final:
Upon review of the initial offers submitted, if appropriate, a select group of Investors will be notified of their participation within the Best and Final Round.
Terms and Conditions:
The Property is offered on an “as is” basis, subject to the existing rent, income, and occupancy restrictions required by the existing HAP Contract.
Approvals:
Approval from HUD, including approval of the assignment and assumption of the HAP contract will be required of a prospective Purchaser.
Selection and Criteria:
The prospective Investor will be selected by the Owner, in its sole and absolute discretion, on the basis of a complement of factors, including, but not limited to purchase price; the Investor’s financial strength/balance sheet capacity; level of discretion to invest funds; ability to close in a timely fashion; experience in closing similar transactions; reputation within the industry and the extent to which due diligence is completed.
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6 | EXECUTIVE SUMMARY
C O M M U N I T Y• Controlled Access
• Courtesy Patrol
• On-Site Leasing Office
• Central Mail Kiosk
• Laundry Facility
• Community Room with Full Kitchen
• Community Library
• Community Lounge
• Outdoor Patio
• Community Picnic Area
• 2 Elevators
• 34 Tenant Storage Centers
I N T E R I O R S• Fully-Equipped Kitchens Include:
- Refrigerator
- Electric Range and Oven
- Open Breakfast Bar
• Tile Wrapped Shower
• Grab Rails in Bathroom
• Life Safety Pull Cords• Fully-Sprinklered
COMMUNITY KITCHEN
MEETING HALLCOMMUNITY LIBRARY
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I N T E R I O R S• Fully-Equipped Kitchens Include:
- Refrigerator
- Electric Range and Oven
- Open Breakfast Bar
• Tile Wrapped Shower
• Grab Rails in Bathroom
• Life Safety Pull Cords• Fully-Sprinklered
Unit Description Units SF Total SFCurrent
Contract RentHFF Proforma Contract Rent
Proforma Rent Per SF
Proforma Annual Rent
1 Bed, 1 Bath, HAP 255 575 146,625 $1,533 $1,800 $3.13 $5,508,000
2 Bed, 2 Bath, HAP, Manager 1 729 729 $1,674 $2,000 $2.74 $24,000
Totals / Averages 256 576 147,354 $1,534 $1,800 $3.13 $5,532,000
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Morningside North benefits from a project-based Section 8 (HAP) contract that ensures consistently strong occupancy and limited turnover. The Property stands as an ideal investment opportunity for an affordable housing owner looking to deploy significant capital into an inflation protected vehicle that is sheltered from typical market volatility.
STABLE, CONSISTENT CASH FLOW
AFFORDABLE HOUSING PRESERVATION OPPORTUNITY
LIHTC Equity to Off-Set Acquisition and Renovation Costs
BENEFITS OF LIHTC PRESERVATION
A 30% Basis Boost To The Rehab Eligible Basis (DDA)
20-Year Section 8 HAP Contract Renewal
Increased LIHTC Pricing Due To Existing HAP Contract And CRA Demand
Ability To Break Chain Of Title But Still Receive Acquisition Credits
LIMITED TURNOVER
7% turnover at the Property over the last
twelve months.
INFLATION PROTECTED VEHICLE
HAP Contract allows for annual rent adjustments.
IMPLICIT GOVERNMENT GUARANTY
100% of the units at the Property benefit from a HAP contract, which
virtually guarantee future rental revenue.
MINIMAL VACANCY
Property occupancy has averaged 99% since
2015. Current waiting list exceeds 500 names.
The guaranteed rental revenue provided by the HAP contract, coupled with an income qualified senior resident base, makes Morningside North an ideal candidate for preservation using Low Income Housing Tax Credits (LIHTCs) and Tax Exempt Bond financing.
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OPPORTUNITY TO SIGNIFICANTLY INCREASE CONTRACT RENTS
Based on a comprehensive survey of the surrounding rental market, average effective one bedroom rents at Morningside North lag comparable properties by an average of $272. A new investor will benefit from a significant increase in contract rents post-rehabilitation, as HFF’s Proforma assumes one bedroom contract rents will be increased to $1,800 per month, a gain of $267 (17.4%).
RENT COMPARABLE ANALYSIS1
(ONE BEDROOM UNITS)
$1,200
$1,300
$1,400
$1,500
$1,600
$1,700
$1,800
$1,900
$2,000
$2,100
$2,200
$2,300
$2,400
$2,500
MorningsideNorth
TheChicagoan
1000 NorthLaSalle
1133 NorthDearborn
1100 NorthDearborn
1120 NorthLaSalle
NewDeliveries
$1,899
1. Properties shown above are consistent with the comparables used in the 2014 RCS provided.2. Rents displayed take into account adjustments made in the 2014 RCS provided.3. New deliveries based on units delivered in the Gold Coast/River North submarket since 2016.
AV
ER
AG
E EF
FEC
TIV
E R
EN
T2
$1,800
$1,533
Average Effective Rent* HFF Proforma Contract Rent
Avg. = $1,805
$1,853$1,828 $1,803
$1,642
$2,470
Comparable Properties
3
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EXCEPTIONAL ACCESSIBILITY 97 WALK
SCORE
91 TRANSIT SCORE
CTA GREEN LINE
CTA BROWN LINE
CTA BLUE LIN
E
L A K E M I C H I G A N
MILLENNIUM PARK
38 MINUTE WALK
RIVERWALKStroll on the recently renovated/extended Chicago Riverwalk
25 MINUTE WALK
HOUSE OF BLUESCatch a show at the famous
House of Blues
22 MINUTE WALK
MERCHANDISE MART
Walk to Merchandise Mart, Chicago's tech and innovation hub
17 MINUTE WALK
CHICAGO CTA STATION
Access the CTA Brown/Purple Line
via the nearby Chicago and N Franklin Station
7 MINUTE WALK
HUBBARD STREET CORRIDOR
River North's hottest nightlife is a short
walk away
15 MINUTE WALK
MICHIGAN AVE(MAGNIFICENT MILE)Stroll along Chicago's famous world-class
Magnificent Mile
17 MINUTE WALK
APPLE STOREFuture Location
28 MINUTE WALK
20 MINUTE WALK
12 MINUTE WALK
17 MINUTE WALK
MAGNIFICENT MILE
HUBBARDSTREET
CORRIDOR
MORNINGS IDE NORTH
1 MINUTE WALK
MOODY BIBLE INSTITUTE
25-Acre, 2,100 student private
institution
4 MINUTE WALK
WALTER PAYTON COLLEGE PREPRanked #1 Best
Public High School In America for 2018
by Niche
1 MINUTE WALK
Located in the heart of Downtown Chicago’s Old Town Neighborhood, Morningside North offers residents a walk-to-everything location, with immediate access to shopping and dining destinations, abundant community services and amenities, and every mode of public transportation afforded by the city of Chicago.
600 W Chicago1.6M SF Tech Hub
13 MINUTE WALK
EXECUTIVE SUMMARY | 11
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90 94
The Property is a short walk to two separate CTA stations, which provide access to three train lines (Clark/Division station accesses the Red line and the Chicago station accesses the Brown and Purple lines). All three lines provide direct access to the Loop financial district, and residents can access both the north and south side of Chicago via these lines.
Residents are less than one mile from the Ohio Street Feeder, which serves as the on-ramp for both Interstate 90 and 94 and includes access to express lanes.
Immediate proximity to two Divvy Stations (N Wells St. & W Walton St. + N Wells St & W Elm St.) Additionally, Wells St. is a major north/south artery with bike lanes in each direction.
All modes of transportation are within a short walk from Morningside North:
Within two blocks are numerous stops along CTA’s #70 – Division, #156 – LaSalle, and #22 – Clark bus lines, providing affordable access to nearby retailers and community amenities
CTA GREEN LINE
CTA BROWN LINE
CTA BLUE LIN
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L A K E M I C H I G A N
THEATRE DISTRICTWalking distance
to world-renowned Theatre District
27 MINUTE WALK
151 N. FRANKLIN ST.Future home of CNA
25 MINUTE WALK
RIVER NORTH POINT
20 MINUTE WALK
444 W. LAKE ST. 150 N. RIVERSIDE PLAZA
Steps to Chicago's most anticipated new office towers
26 MINUTE WALK
UNION STATION
OGILVIE TRANSPORTATION
CENTERCatch a Metra train to the suburbs
via Union and Ogilvie Station
33 MINUTE WALK
1 NORTH WACKERWalk to work at
Chicago institutions along Wacker Drive
29 MINUTE WALK
FULTON MARKETWalk to the emerging
Fulton Market tech and entertainment
corridor
37 MINUTE WALK
RESTAURANT ROWWalk to the famed
dining on Restaurant Row
35 MINUTE WALK
CHICAGO FRENCH MARKET
Grab-&-go meals and fresh produce at the European-inspired
French Market 30 MINUTE WALK
SOHO HOUSE(HOT GREEN ST)Walk to the trendy new club on hot
Green Street 39 MINUTE WALK
MILWAUKEE AVETake Hipster
Highway to Wicker Park, Bucktown & Logan Square Neighborhoods27 MINUTE WALK
WILLIS TOWERWalking distance to one of the world's tallest buildings
34 MINUTE WALK
EAST BANK CLUBSteps to the city's
premier lifestyle and social club
21 MINUTE WALK
The Chicago Water Taxi stop along the Chicago River is located at Chicago Avenue, and provides access to Downtown Chicago, Michigan Ave. and other Chicago locations during the warmer months of the year.
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Standing in Desirable Old Town, at the nexus of Chicago’s most prominent and affluent neighborhoods, Morningside North epitomizes the pinnacle of urban living. Old Town and surrounding neighborhoods that include River North (south), Michigan Avenue / Streeterville (southeast), Gold Coast (east), and Lincoln Park (north) comprise one of the densest urban environments in the country featuring world class high-end retail, luxurious residences, and renowned entertainment, restaurants and amenities.
Lincoln Park and Old Town are popular young professional and family-friendly neighborhoods that are rich with culture, nature, shopping, and residents who are drawn to its impressive institutions, memorable restaurants, and tree-lined streets.
The area is also home to renowned entertainment venues such as The Second City and the Steppenwolf Theater, and is a prominent location for boutique shopping. Throughout its history it is always been a location for affluent north side residents to shop, dine and reside, particularly along the stretch of Wells Street from North Avenue to Division Street. Dozens of popular restaurants and bars are located along this half-mile stretch.
THE PINNACLE OF URBAN LIVING
12
EXECUTIVE SUMMARY | 13
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PREMIER GLOBAL MSAChicago is recognized as one of the most important financial, cultural, and industrial centers in the United States. More
than 400 major corporations, including 34 Fortune 500 companies, are headquartered in Chicago. Anchored by its central
location, extensive talent pipeline and overall quality of life, Chicago represents one of the world’s largest and most
diversified economies. Chicago’s abundant art & culture, strong economy, and mid-continent location make it a central hub
of the U.S. and an incredibly desirable market.
NEARLY
3 MILLION CITY RESIDENTS
OVER
9 MILLION PEOPLE WITHIN MSA
3RD LARGEST CITY
IN THE U.S.
LARGEST & MOST DIVERSIFIED
ECONOMIES
One of the
MORE THAN 4 MILLION EMPLOYEES
GROSS REGIONAL
PRODUCT OF OVER
$500 BILLION
6 MAJOR LEAGUE SPORTS TEAMS
2ND LARGEST TRANSIT SYSTEM IN THE U.S..
BUSIEST AIRPORTS IN THE COUNTRY
Two of the
CHICAGO’S “LOOP” OFFERS OVER 130 MILLION FT.2 OF OFFICE SPACE AND APPROXIMATELY
600,000 JOBS
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No. 9 WaltoN
• 36-Story Condo Tower• Built: 2017• Listings Range From $1.75M - $6.3M
Querry Biomedical research ceNter
• Northwestern University’s $455M, 600,000 SF Research Center
• Estimated $4B Impact on Chicago’s Economy During Its First Ten Years
• Expected To Create Over 2,000 Full-Time Jobs Once Completed in May 2018
old toWN Park
• Multi-Phase Mixed-Use Development
• 405 New Residential Units And Ground Floor Retail Expected to Deliver Sept. ‘18
• 1BR Rents: $2,360 - $3,000
NeWBerry liBrary
• $30 Million Renovation Project Underway
4 east elm
• 26-Story Mixed-Use Condo Tower• Built: 2016• Median Sales Price: $3.3M
the siNclair
• New Mixed-Used Development Featuring A Multi-Story Jewel-Osco
• 1BR Avg. Rent: $2,199/$3.08 PSF
clark/divisioN cta suBWay statioN
• Recently Completed $50M Renovation and Improvement Project
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Ideally positioned in the heart of Downtown Chicago, Morningside North is surrounded by numerous recently completed and to-be-built developments backed by significant capital investment. Within close proximity of the Property, several high-profile mixed-use developments have recently broken ground and newly constructed one-bedroom apartments in the surrounding neighborhood are achieving market-leading rents that exceed $2,300 ($828 higher than current contract rents at Morningside North) and $3.10 per square foot.
the Gallery oN Wells
• Market-Rate Apartments• Built: 2017• 1BR Avg. Rent: $2,277/$3.01 PSF
marloWe
• Market-Rate Apartments• Delivery Date: September 2018
exhiBit oN suPerior
• Market-Rate Apartments• Built: 2017• 1BR Avg. Rent: $2,416/$3.67 PSF
aurelieN
• Market-Rate Apartments• Built: 2017• 1BR Avg. Rent: $2,500/$3.26 PSF
home2 suites By hiltoN
• $67 Million, 206-Key Hotel• Delivery Date: October 2018
eiGht o Five
• Market-Rate Apartments• Built: 2015• 1BR Avg. Rent: $2,238/$2.95 PSF
moody BiBle iNstitute
• 25-Acre Campus With Over 2,100 Students• New $24M, 50,000 SF Chapman Center Currently Under Construction
Walter PaytoN colleGe
PreParatory hiGh school
• Ranked #1 Best Public High School In America For 2018 By Niche
• Recently Completed $20M Expansion and Improvement Project
MORNINGS IDE NORTH
1BR Current Contract Rent: $1,533/$2.67 PSF
ABUNDANT CAPITAL INVESTMENT
N. LASALLE D
R
W. OAK ST
N. WELLS S
T
N. CLARK ST
N. O
RLE
AN
S S
T
oNe chicaGo sQuare
• $700M Mixed-Use Development• Construction Expected To Start In Fall 2018
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METICULOUSLY MAINTAINED SENIOR COMMUNITY...Morningside North offers exceptional senior-style living in one of the most desirable locations in Downtown Chicago. Constructed in 1981, the
Property features 256 one- and two-bedroom units that average 576 square feet. Each unit features a refrigerator, electric range and oven, open
breakfast bar, life safety pull cords, and a tile-wrapped shower. In addition to controlled access and courtesy patrol, Morningside North offers a
full suite of amenities tailored towards seniors including a community library, community room with full kitchen, outdoor patio with picnic area,
laundry facility, and 34 tenant storage centers.
...REPLETE WITH RENOVATIONS
2015THREE NEW ATLAS GAS
BOILERS
2017COMPLETE
ROOF REPLACEMENT
2016TWO NEW
ROOFTOP AIR CHILLERS
COMMUNITY LIBRARY
SENIOR LOUNGE
Total Cost - $392,000 Total Cost - $220,000 Total Cost - $312,000
EXECUTIVE SUMMARY | 17
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AFFLUENTDEMOGRAPHICS
The average household income is an impressive $126,889, nearly double the average for the city of Chicago population. 42+% of households earn over
$100,000.
$126,889 AFFLUENT RESIDENTS
Median home values of $524,744 makes renting a sensible option for many.
$524,744 PRICEY HOMES
76% of people are college educated and 34% hold a master's degree or higher.
76% HIGHLY-EDUCATED POPULATION
The area surrounding Morningside North includes several of the nation’s most prestigious colleges and is home to world-class
dining, shopping, and entertainment. Within a half-mile radius, median home values are 105% higher compared to the rest of
the City, and average household incomes are nearly 50% higher than the city average.
HALF-MILE RADIUS DEMOGRAPHICS HIGHLIGHTS
2 0 1 8 E S T I M A T E D P O P U L A T I O N
M E D I A N H O M E V A L U E
A V E R A G E H O U S E H O L D I N C O M E
% W I T H B A C H E L O R S D E G R E E O R H I G H E R
34,678 $524,744 $126,889 75.8%0.5-MILE RADIUS 0.5-MILE RADIUS 0.5-MILE RADIUS 0.5-MILE RADIUS
92,054 $487,082 $149,860 79.9%1.0-MILE RADIUS 1.0-MILE RADIUS 1.0-MILE RADIUS 1.0-MILE RADIUS
9,504,650 $242,814 $98,638 35.9%CHICAGO MSA CHICAGO MSA CHICAGO MSA CHICAGO MSA
Source: Claritas Pop-Facts Feb 2018
DOUG CHILDERSManaging [email protected]
WICK KIRBYSenior [email protected]
TRANSACTION GUIDELINESThe Property is being offered all-cash on an “As-Is, Where-Is” basis, subject to any existing rent and income restrictions required by the HAP Contract.
HFF has been engaged by the Owner of the Property to market it for sale. Information concerning the Property described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.
DEREK [email protected]
MICHAEL [email protected]
Please Direct All Inquiries To:
Holliday Fenoglio Fowler, L.P. ("HFF") an Illinois licensed real estate broker.
HFF has been engaged by the owner of the property to market it for sale. Information concerning the properties described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.
© 2018 Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, “HFF”), HFF Securities L.P. and HFF Securities Limited (collectively, “HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 26 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.
hfflp.com
3424 Peachtree Road NESuite 1750Atlanta, Georgia 30326tel (404) 832-8460fax (404) 942-2181www.hfflp.com
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