offering memorandum · 2019-11-12 · name is not intended to indicate or imply affiliation with,...

607 N. SECOND STREET APARTMENTS607 N. Second Street • Harrisburg, PA 17101

Offering Memorandum

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N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and

should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified

information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due

diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the

future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or

asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any

tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be

reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these

matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to

verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or

name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product,

service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

607 N. SECOND STREET APARTMENTS

Harrisburg, PA

ACT ID ZAA0300575

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TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01Offering Summary

Regional Map

Local Map

Aerial Photo

FINANCIAL ANALYSIS 02Rent Roll Summary

Rent Roll Detail

Operating Statement

Notes

Pricing Detail

Acquisition Financing

MARKET OVERVIEW 03Market Analysis

Demographic Analysis


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4

INVESTMENT

OVERVIEW


#

EXECUTIVE SUMMARY

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

Airgas 12,601

Upmc Pinnacle 4,623

Rite Aid 3,738

Human Services PA Dept 3,013

Administration Office 2,500

Harrisburg Hospital 2,301

American Educational Svcs Corp 2,300

Geisinger Holy Spirit 2,300

Highmark Blue Cross Blue Sheld 2,288

Ddre 2,200

Fedloan Servicing 2,150

House Representatives PA 2,073

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2018 Estimate Pop 13,738 97,950 192,965

2010 Census Pop 13,485 95,726 187,542

2018 Estimate HH 7,542 41,300 81,317

2010 Census HH 7,364 40,166 78,618

Median HH Income $33,748 $45,943 $54,997

Per Capita Income $25,694 $26,583 $30,937

Average HH Income $45,879 $62,238 $72,288

UNIT MIX

NUMBEROF UNITS

UNIT TYPEAPPROX.SQUARE FEET

1 Studio 375

2 1 Bed 1 Bath 450

2 1 Bed 1 Bath - Lux 650

2 Two Story 2 Bed 2 Bath 1,050

7 Total 4,675

VITAL DATA

Price $555,000 CURRENT YEAR 1

Down Payment20% /

$111,000CAP Rate 6.73% 6.83%

Loan Amount$444,000 GRM 8.70 8.18

Loan Type Proposed NewNet Operating Income

$37,355 $37,921

Interest Rate / Amortization

4.5% / 25 Years

Net Cash Flow After Debt Service

6.97% / $7,740 7.48% / $8,306

Price/Unit $79,286 Total Return 15.83% / $17,576 16.75% / $18,594

Price/SF $118.72

Number of Units 7

Rentable Square Feet 4,675

Number of Buildings 1

Number of Stories Three

Year Built 1900 / 2018

Lot Size 0.06 acre(s)

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OFFERING SUMMARY

Turn Key Investment

Recent Renovations

Qualified Opportunity Zone

Prime Location

Located on Restaurant Row

(Downtown HBG)

INVESTMENT HIGHLIGHTS

Marcus and Millichap is pleased to Exclusively Offer for Sale to Qualified Investors: 607 N. Second Street, Harrisburg, PA.

The Subject property consists of 7 Units. There are two(2) two-story loft style units, each with two(2) bedrooms, two(2) full baths, washer dryer & dishwasher. There are

two(2) one(1) bedroom units, each with one(1) full bath, washer/dryer and dishwasher. There are two(2) one(1) bedroom units and one studio unit without washer/dryer or

dishwasher. New owner can upgrade remaining units with washer/dryer and dishwasher to further increase returns.

The South-Central Pennsylvania region is growing at a rate substantially above that experienced by the rest of Pennsylvania. Among the reasons for this growth rate is the

presence of state and federal government facilities in Harrisburg; the relatively low cost of living for the region as compared to Philadelphia and Baltimore; and the

excellent interstate highway system serving the region, which has spurred economic development.

The renaissance in the downtown business district clearly has a positive impact on the subject property; as an upward trend from downtown is expanding into the

Midtown and Uptown market areas with new commercial and apartment projects underway. Just to name a few the conversion of the Glass Factory into a modern

apartment building, the conversion of the vacant Ronald Brown Charter School to a multifamily and office complex, renovated Midtown Cinema, the Evangelical Press

Building was renovated into HACC Midtown, the Susquehanna Art Museum and the renovation of the PAL building into the Harrisburg Midtown Art Center. In addition in

adopting its 2016 fiscal budget, Congress finally set aside $161 million to construct the long-delayed federal courthouse building planned for North Sixth and Reily Streets.

INVESTMENT OVERVIEW

6


#

OFFERING SUMMARY

PROPERTY OVERVIEW

The owner has spent over $40K to bring and keep the building up-to-date by painting portions the facade,

upgrading unit appliances, replacing all the flooring in some units, New HVAC system, New water heaters, and

repairing the fire alert system.

The subject property is ideally located in downtown Harrisburg, PA. Just one block East from the property are

many Pennsylvania State government buildings including the Harrisburg Capital building and the Pennsylvania

State Museum. Just right around the corner on North Street, is Harrisburg's Restaurant Row, which features

some of Central Pennsylvania's premier chefs, including Rubicon and Manga Qui. Only one block West from the

property is the historic Susquehanna River and Park, where many festivals are hosted, including the Harrisburg

Arts Fest and Kipona Festival, both attracting crowds in the tens of thousands. Eastward, by day, you'll find

numerous restaurants, boutique shops that transform into a vibrant and energetic after hours scene by night. All

of these local amenities are within walking distance of the subject property making it a premiere rental location

for the young professional ensuring stable tenancy and low vacancy.

7

Oven/Range

Unit Amenities

Dishwasher

Washer/Dryer

Disposal

7


PROPERTY SUMMARY

OFFERING SUMMARY

PROPOSED FINANCING

First Trust Deed

Loan Amount $444,000

Loan Type Proposed New

Interest Rate 4.5%

Amortization 25 Years

Loan Term 10 Years

Loan to Value 80%

Debt Coverage Ratio 1.26

THE OFFERING

Property 607 N. Second Street Apartments

Price $555,000

Property Address 607 N. Second Street , Harrisburg, PA

Assessors Parcel Number 04-016-011

Zoning CN

SITE DESCRIPTION

Number of Units 7

Number of Buildings 1

Number of Stories Three

Year Built/Renovated 1900 / 2018

Rentable Square Feet 4,675

Lot Size 0.06 acre(s)

Type of Ownership Fee Simple

Parking On Street

UTILITIES

Water Landlord Pays

Electric Tenant Pays

Gas Tenant Pays

CONSTRUCTION

Foundation Concrete

Framing Masonry

Exterior Brick

Roof Composition

MECHANICAL

HVAC Electric Baseboard, Wall unit & FHA W/ Central Air

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REGIONAL MAP


9

LOCAL MAP


10

PARCEL MAP


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PARCEL MAP


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PARCEL MAP


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AERIAL PHOTO


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INTERIOR PHOTO


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16

FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS


RENT ROLL SUMMARY

17

FINANCIAL ANALYSIS


18

RENT ROLL DETAIL

Market Analytics for Downtown Harrisburg

FINANCIAL ANALYSIS


OPERATING STATEMENT

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FINANCIAL ANALYSIS


PRICING DETAIL

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MARCUS & MILLICHAP CAPITAL CORPORATION

CAPABILITIES

MMCC—our fully integrated, dedicated financing arm—is committed to

providing superior capital market expertise, precisely managed execution, and

unparalleled access to capital sources providing the most competitive rates and

terms.

We leverage our prominent capital market relationships with commercial banks,

life insurance companies, CMBS, private and public debt/equity funds, Fannie

Mae, Freddie Mac and HUD to provide our clients with the greatest range of

financing options.

Our dedicated, knowledgeable experts understand the challenges of financing

and work tirelessly to resolve all potential issues to the benefit of our clients.

National platform

operating

within the firm’s

brokerage offices

$6.24 billion

total national

volume in 2018

Access to more

capital sources

than any other

firm in the

industry

Optimum financing solutions to

enhance value

Our ability to enhance buyer

pool by expanding finance

options

Our ability to enhance

seller control

• Through buyer

qualification support

• Our ability to manage buyers

finance expectations

• Ability to monitor and

manage buyer/lender progress,

insuring timely,

predictable closings

• By relying on a world class

set of debt/equity sources

and presenting a tightly

underwritten credit file

WHY MMCC?

Closed 1,678

debt and equity

financings

in 2018

ACQUISITION FINANCING


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MARKET

OVERVIEW

MARKET OVERVIEW

OVERVIEW

HARRISBURG

Located in the Susquehanna Valley, the Harrisburg metro of

Pennsylvania consists of the counties of Perry, Cumberland and

Dauphin. It is anchored by the cities of Harrisburg and Carlisle. The area

is home to the state capitol in Harrisburg and various federal employers

and military bases, making government a major employment sector. The

community is also home to the Hershey Chocolate Co., which makes the

well-known Hershey Bar and Hershey's Kisses.

Harrisburg’s downtown is a vibrant atmosphere of entertainment, retail and museums. The area

houses government operations, SoMa South of Market District redevelopment area with museums

and a retail area in Strawberry Square, and the Shops On Third.

Harrisburg Area Community College and Harrisburg University of Science and Technology are

among the institutions of higher education that provide a skilled employment base.

Employers represent industries such as service, healthcare, technology, biotechnology and

government. Large firms include Giant Food Stores, Penn State Hershey Medical Center, Hershey

Entertainment and Resorts, the Hershey Co., Highmark and TE Connectivity.

DEMOGRAPHICS

1

ECONOMY

* Forecast

Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau


GOVERNMENT PRESENCE

A strong government presence includes the Ronald Reagan Federal Building

and the state capitol in Harrisburg.

DIVERSE EMPLOYMENT BASE

The metro includes nearly 50,000 diverse businesses, with large corporations

based or operating locally such as IBM and Hershey Foods.

MILITARY PRESENCE

Various military bases in the area include the Naval Supply Systems Command,

Harrisburg Air Guard Base, Fort Indiantown Gap and Carlisle Barracks.

METRO HIGHLIGHTS

572K

2018POPULATION:

232K

2018HOUSEHOLDS:

40.2

2018MEDIAN AGE:

$63,000

2018 MEDIAN HOUSEHOLD INCOME:

U.S. Median:

38.0U.S. Median:

$58,8004.5%

Growth2018-2023*:

3.1%

Growth2018-2023*:

8


DEMOGRAPHICS

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offering memorandum · 2019-11-12 · name is not intended to indicate or imply affiliation with,...

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