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OFFERING MEMORANDUMa 10-unit apartment community located in Kenmore, Washington
Exclusively Listed by
Dan SwansonVice President 206.296.9610 dswanson@kiddermathews.com
Donna MarshallVice President, Investment Sales 425.422.0954 donna@capstonecommercialnw.com
kiddermathews.com
NORTHSHORE APARTMENTS
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 2
1. Investment Summary
• The Offering• Investment Highlights
2. Property Overview
• Property Summary• Photos• Floor Plans• The Location• Planned Transportation Improvements• Property Aerial• Amenities Aerial
3. Financial Summary
• Rent Roll• Income & Expenses• Pricing
4. Comparables
• Sales Comparables
The 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 Kidder Mathews and should not be made available to any other person or entity without the written consent of Kidder Mathews.
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. Kidder Mathews 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, Kidder Mathews has not verified, and will not verify, any of the information contained herein, nor has Kidder Mathews 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.
This information has been secured from sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Recipient of this report must verify the information and bears all risk for any inaccuracies.
Disclaimer
Table of Contents
Table of Contents
OFFERING MEMORANDUM | 3
The Offering
Investment Highlights
Investment Summary
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 4
Capstone Commercial and Kidder Mathews are proud to present for sale the 10-unit Northshore Apartments located in King County just steps from Lake Washington. The view property is centrally located near Seattle, Bellevue, and Snohomish County. The 1966 property underwent an extensive, $600,000 renovation in 2015, and the spacious units now feature designer high-gloss cabinetry, quartz countertops, new flooring, stainless steel kitchen appliances, and stacking washer / dryers. With professional management already in place, turnkey condo-quality finishes, 100% occupancy, and the likelihood of future appreciation, the Northshore Apartments offers a new purchaser ease of management and above typical market returns in a rare lake-view property.
The Offering
Investment Summary
PROPERTY OVERVIEW
Address6321 NE 181st StreetKenmore, WA 98028
Price $3,100,000
Down Payment 40%
Price per Unit $310,000
Price per SF $355.14
Number of Units 10
Average Unit Size 873
Net Rentable SF 8,729
Lot Size 0.51 Acres
Year Built 1966
Type of Ownership Fee Simple
APN 618170-0100
Zoning CB
BALLARD
WEST SEATTLE
MERCER ISLAND
BELLEVUE
BOTHELL
SEATTLE
QUEEN ANNE
PUGET SOUND LAKE
WASHINGTON
SHORELINE
BURIEN
NORTHSHORE APARTMENTS
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 5
Expansive Lake Washington views
Good unit mix of one-, two-, and three-bedroom units,
all with stacking washer / dryers
Current ownership invested in an extensive, $600,000
renovation in 2015
Gourmet kitchens: designer high-gloss cabinets, Pental
Quartz countertops, stainless steel appliances
Fully renovated bathrooms: new toilets and sinks,
custom floating cabinets
Decks and dining areas in each unit
New paint, fencing, landscaping, lighting and signage
Parking lot, roof, siding, and decks have all been
inspected and repaired as needed
17 parking spaces
1 storage locker per apartment
Low maintenance landscaping
Centrally located between I-5 and I-405, and along SR 522
Exceptional location near major employment centers
including aerospace, technology, and universities
Less than 1/4 mile to Burke Gilman Trail, connecting to
the University of Washington, Seattle, Woodinville and
Downtown Redmond
Less than a half mile from Kenmore Village, a 9.6-acre
property that is being developed into a downtown-type
area with a Town Green, fitness center, and retail or office
space
10 restaurants, 3 coffee shops, and 5 grocery stores
within 1/2 mile
4 miles to UW Bothell
Under 10 minute drive to Bastyr University, the nation’s
premier natural health sciences university
Less than a mile to the newly renovated public water
recreational boat launch – North Lake Washington’s
only launch
Building Highlights Location Highlights
Investment Summary
OFFERING MEMORANDUM | 6
Property OverviewProperty Summary
Photos
Floor Plans
The Location
Planned Transportation Improvements
Property Aerial
Amenities Aerial
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 7
THE LOCATION
Located in the heart of Kenmore just steps from Lake Washington, the Northshore Apartments are centrally positioned near Seattle, Bellevue, and Snohomish County. The City of Kenmore, also called Kenmore by the Lake, boasts many prominent features including the nation’s largest seaplane-only commercial air facility at Kenmore Air Harbor, Bastyr University, and several waterside parks and marinas. Designated as a “Playful City USA” since 2010, Kenmore boasts 7.8 miles of shoreline along Sammamish River, Swamp Creek, and Lake Washington. The Northshore Apartments’ central location in Kenmore is within one mile of seven grocery stores, 25 restaurants, coffee shops, and bars, and three parks. Access to the 27-mile recreational Burke-Gilman Trail is under 10 minutes away by foot, as is Log Boom Park which features a modern playground, picnic tables, docks, and sweeping views of Lake Washington. Eight bus lines, all with stops within a half mile of the Northshore Apartments, take residents to the entertainment and employment centers of Shoreline, Renton, Woodinville, Kirkland, Bellevue, Redmond, and Seattle’s First Hill, Downtown, and University Districts.
The Northshore Apartments are comprised of two one-bedroom units, seven two-bedroom units – three of which are built in the townhouse style – and one three-bedroom unit. Each unit also features a deck, taking advantage of sweeping views of Lake Washington, and dining areas. The property was extensively renovated in 2015 to state-of-the art standards.
The kitchens were fully upgraded with designer high-gloss flat-panel cabinets, Pental Quartz countertops and backsplashes, and stainless steel appliances. Likewise, the bathrooms were completely upgraded with new toilets, custom floating cabinets, new sinks, and re-glazed bathtubs. The units were outfitted with fresh paint throughout, and all interior ground surfaces were redone with wood vinyl plank flooring, modern Eleganza tiling, or new carpeting. Each condo-quality, lake-view apartment features a new Electrolux stacking washer / dryer, new electric heaters, six-inch white floor trimming, new Levolor one-inch blinds, state-of-the-art light fixtures, brushed nickel modern finishes, a deck that has been recently sealed, and access to its own assigned storage locker on the basement level.
Recent exterior upgrades include new paint, fencing, landscaping, lighting, and signage. The property’s large parking lot has been recently repaired and power washed, the roof has been repaired and sealed, and the siding has been inspected and repaired as needed. The property has been further upgraded with a new common area electric panel and hot water tank. Total renovations totaled over $600,000 since August.
With professional management already in place, turnkey condo-quality finishes, 100% occupancy, and the likelihood of future appreciation, the Northshore Apartments offers a new purchaser ease of management and above typical market returns in a rare lake-view property.
Property Summary
Property Overview
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 8
Interior Photos
Property Overview
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 9
Interior Photos
Property Overview
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 10
Floor Plans
Property Overview
UNIT 4 UNIT 5
UNIT 1 UNIT 2 UNIT 3
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 11
Floor Plans
Property Overview
UNIT 9 UNIT 10
UNIT 6 UNIT 7 UNIT 8
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 12
The City of Bothell has already put in place their Downtown Revitalization plan by
strategically investing $150 million in public infrastructure improvements, including
two major roadway improvements on SR 522. These roadway changes created new
city-owned parcels which the city has begun to sell. Several of the parcels already
sold have been redeveloped with a focus on mixed-use retail. The outcome of the
city’s investment and work with private developers is a pedestrian-focused, mixed-
use downtown environment with new retail, housing, office, and entertainment
destinations. An excellent example of this revitalization is the McMenamin family’s
transformation of 85-year-old Anderson School into a five-acre campus for food,
drink, music, and movies. The change that has been happening in the City of Bothell
brings with it a tremendous opportunity for a property owner to benefit from these
infrastructure improvements.
Bothell/Kenmore Employment
Bothell and Kenmore are major employment centers for South Snohomish County
and Northeast King County. Bothell/Kenmore supports over 20,000 jobs comprised
of biotech, computers, engineering and telecommunications, with most businesses
located in the Canyon Park and North Creek business districts.
Biotechnology is the biggest industry in Bothell/Kenmore, with companies such as
Amgen; Alder Biopharmaceuticals, which develops antibody therapeutics; Blue Heron
Biotechnology, which has the patented GeneMaker® Technology for synthesizing any
DNA sequences; CMC Icos, which developed the erectile-dysfunction drug Cialis;
Elitech; Iverson Genetic Diagnostics; Marina Biotech; OncoGenex Pharmaceuticals,
which is focused on cancer treatment; and Seattle Genetics. In all, 20% of
Washington’s life sciences companies are located in Bothell/Kenmore.
Medical device manufacturers are also located in Bothell/Kenmore, including
Diagnostic Ultrasound; Lockheed Martin Aculight, which develops lasers, Philips
Medical Systems; and SonoSite.
Computer technology, data, and telecommunications are well represented, and
include companies such as AT&T, AVST, Kinesis, Leviton Voice & Data, Systems
Interface, T-Mobile, Panasonic Avionics Corporation, Parity Corporation, Teltone,
Vertafore, and most recently, Google.
Property Overview
Downtown Bothell Revitalization
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 13
Engineering firms, including electrical engineering, environmental engineering, and civil
engineering, are also located in Bothell/Kenmore. Examples include ECS Engineering,
Emulex, North Creek Analytical, Path Engineers, RH2 Engineering and SNC-Lavalin.
Bothell/Kenmore also has companies working on new or improved energy
technologies, including Neah Power Systems. The Seattle Times moved its main
production facility to the North Creek business district in Bothell/Kenmore in 2001, and
national magazine publisher Scotsman Guide Media also is headquartered in the city.
University of Washington - Bothell Campus
UW Bothell is one of three campuses that make up the University of Washington: the
150-year-old Seattle campus, and the Tacoma and Bothell campuses, both founded in
1990. UW Bothell offers many of the same educational qualities as its sister universities
— an urban campus setting; top-drawer faculty known for their teaching ability; a
rigorous, interdisciplinary curriculum; and high standards of social responsibility.
Located less than 5 miles from the Northshore Apartments, UW Bothell is the largest
branch campus in Washington State.
Undergraduates make up 89 percent of the 5,279 students with 93 percent of the
total enrollment attending full-time. There are over 650 faculty and staff members. UW
Bothell offers over 45 degrees for undergraduates and graduates, and in a little over
two decades, the school has awarded over 10,500 degrees.
Property Overview
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 14
LAKE
WASHINGTON
PUGET
SOUND
SHORELINE
NORTHSHORE APARTMENTS
Property Overview
MOUNTLAKE TERRACE
BOTHELL
KIRKLAND
WOODINVILLE
LAKE FOREST PARK
EDMONDS
NORTHGATE
GREENLAKE
BALLARD
KENMORE
FREMONT
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 15
Property Overview
Property Aerial
Bothell Way NE
68th Avenue N
E
NORTHSHORE APARTMENTS
62th Avenue N
E
Bothell Way NE
LAKE WASHINGTON
Burke Gilman Trail
Burke Gilman Trail
SAMMAMISH RIVER
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 16
Northshore Amenities Map
Property Overview
14
13
12
9
1011
8
7
6
5
4
10
11
1
3
2
16
10
17
27
26
25
22
2019
18
91
15
14
11
13
12
8
7
6
5
43
4
1
2
3
6
5
1
6
9
8
7
4
3
2
1
4
3
29
23
31
30
36
3432
33
28
24
21
5
235
NORTHSHORE APARTMENTS
2
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 17
EAT + DRINK
1. Pagliacci Pizza
2. Jack in the Box
3. Tai Ho Restaurant
4. Kidd Valley
5. Ichiban Teriyaki
6. Jet City Pizza
7. Acapulco Fresh Mexican Grill
8. Jay's Cafe
9. Uma Thai Cuisine
10. Fortune Inn
11. Lake Forest Bar & Grill
12. The Everest Kitchen
13. Kitto
14. Preservation Kitchen
15. Alexa's Cafe & Catering
16. Mazatlan Mexican Restaurant
17. Russell's
18. Grazie Ristorante Italiano
19. Crystal Creek Cafe
20. Gretchen's Place
21. Brier Pizza Kitchen
22. Ivar's Seafood Bar
23. Wendy's
24. Arby's
25. Outback Steakhouse
SHOPPING
1. Dollar Tree
2. Country Village Shops
3. Alderwood Mall
4. Northstrom Rack
5. Belly Scarf
6. Embroidery Northwest
7. Hawkins Embroidery
8. Fred Meyer Jewelers
9. Target
10. St. Vincent de Paul Society
11. Snapdoodle Toys
GROCERY
1. Safeway
2. Grocery Outlet
3. Costco
4. Fred Meyer
5. Yakima Fruit Market & Nursery
HEALTH & WELLNESS
1. LA Fitness
2. CrossFit Kenmore
3. Kenmore Fitness
4. Planet Fitness
5. 24 Hour Fitness
6. Nev Fitness
7. Orangetheory Fitness
PARKS
1. Northshore Summit Park
2. Rhododendron Park
3. Wallace Swamp Creek Park
4. Doug Allen Sportsfields
5. Horizon View Park
6. Blue Heron Park
7. Lyon Creek Waterfront
8. Grace Cole Nature Park
9. Brier Park
10. Hamlin Park
11. Terrace Creek Park
12. Brierwood Park
13. Southwest County Park
14. Log Boom Park
BUS ROUTES
Bus Route #234
Bus Route #372
Bus Route #244
Bus Route #342
Bus Route #312
EAT + DRINK
26. Viva Jalisco
27. Canyons Restaurant
28. Applebee's
29. Savage Moose Sports Pub
30. Cozy Inn Tavern
31. Taco Time
32. North Shore Pub
33. Tab's Bar & Grill
34. McDonald's
35. 192 Brewing Company
36. Starbucks
Northshore Amenities Map Key
OFFERING MEMORANDUM | 18
Rent Roll
Income & Expenses
Pricing
Financial Summary
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 19
Rent Roll
SCHEDULED INCOME
UNIT # UNIT TYPE SQUARE FOOTAGE ACTUAL RENT RENT PER SQ. FT.
1 2 Bedroom / 1 Bath 876 $1,725 $1.97
2 3 Bedroom / 2 Bath Townhome 1287 $1,995 $1.55
3 1 Bedroom / 1 Bath Loft 663 $1,475 $2.22
4 2 Bedroom / 1 Bath 880 $1,700 $1.93
5 2 Bedroom / 1 Bath 874 $1,725 $1.97
6 2 Bedroom / 1 Bath Townhome 855 $1,825 $2.13
7 2 Bedroom / 1 Bath Townhome 855 $1,825 $2.13
8 2 Bedroom / 1 Bath Townhome 844 $1,825 $2.16
9 2 Bedroom / 1 Bath 882 $1,725 $1.96
10 1 Bedroom / 1 Bath 713 $1,395 $1.96
TOTAL 8,729 $17,215
AVERAGE 873 $1.97
Financial Summary
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 20
Financial Summary
Utility-Bill-Back Current based on 95% of the utilities being billed back to the residents based on a RUBS system.
Non-Refundable/Late Fees. Based on owners’s 2016 budget.
Real Estate Taxes Based on 75% of the purchase price multiplied by the current millage rate.
Insurance Based on owner’s 2016 budget.
Utilities Based on owner’s 2016 budget.
Repairs and Maintenance Based on owner’s 2016 budget.
Professional Management Based on 5% of collected income.
Landscaping Based on $1,000 annually.
Capital Reserves $200 per unit is accumulated to pay for large capital expenditures amortized over years of operations.
Administrative Based on owner’s 2016 budget.
CURRENT INCOME
Total Scheduled Rent $206,580
Utility-Bill-Back $11,175
Non-Refundable/Misc. $3,456
Scheduled Potential Income $221,211
Vacancy (3.6%) $7,964
Real Estate Taxes $28,526
Insurance $4,013
Utilities $11,763
Repairs and Maintenance $4,050
Professional Management $10,662
Turnover $1,350
Landscaping $1,000
Administrative $1,470
Capital Reserves $2,000
Total Expenses $64,834
Expenses Per Unit $6,483
Expenses Per Square Foot 7.43
Net Operating Income $148,413
OTHER INCOME
Forfeited Deposits $300
Damage & Cleaning Fees $300
Non-Refundable Fees $1,500
Application Fees $456
Pet Fees $900
Total $3,456
Current Income & Expense Notes
FINANCING
Loan Amount* $1,860,000
Rate 3.500%
Amortization 30
Annual Debt Service ($100,227)
*The above financing terms were obtained in April 2016 and are based on a 5-year term, 30 years amortization. As loan information is time sensitive and subject to market fluctuations, we recommend that you verify quoted terms by contacting a preferred lender of your choice.
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 21
Financial Summary
ANNUALIZED OPERATING DATA
CURRENT RENTS
Gross Potential Income $221,211
Less Physical Vacancy 3.6% $7,964
Effective Gross Income $213,247
Less Expenses 30.40% ($64,834)
Net Operating Income $148,413
PRICING
Price $3,100,000
Down Payment* $1,240,000
Price Per Unit $310,000
Cost Per NRSF $355.14
Current GRM 14.0
Current Cap Rate 4.8%
OFFERING MEMORANDUM | 22
Sales Comparables
Sales Comparables Map
Comparables
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 23
NORTHSHORE APARTMENTS6321 NE 181st Street, Kenmore
List Price $3,100,000
Price/Unit $310,000
Price/SF $355.14
Cap Rate 4.8%
GRM 14.0
Units 10
Year Built 1966
SUBJECT
Sales Comparables
WOODCREEK APARTMENTS18105 142nd Avenue NE, Woodinville
Date Sold 09/30/2015
Sale Price $4,750,000
Price/Unit $237,500
Price/SF $251.96
Cap Rate 4.6%
GRM 12.5
Units 20
Year Built 1986
2
SALISH21110 80th Place W, Edmonds
Date Sold 03/08/2016
Sale Price $1,400,000
Price/Unit $233,333
Price/SF $345.68
Cap Rate 4.0%
GRM 15.4
Units 6
Year Built 1952
1
3
1
2
4
NORTHSHORE APARTMENTS
5
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 24
ANNA9447 166th Avenue NE, Redmond
Date Sold 01/27/2016Sale Price $4,430,000Price/Unit $246,111Price/SF $306.87Cap Rate 4.6%GRM 13.6Units 18Year Built 1963
3
Sales Comparables
CREEKSIDE PLACE11241 NE 68th Street, Kirkland
Date Sold 12/16/2015
Sale Price $5,310,000
Price/Unit $252,857
Price/SF $345.03
Cap Rate 4.2%
GRM 14.6
Units 21
Year Built 1977
4
3
1
2
4
NORTHSHORE APARTMENTS
KIRKLAND SHORES205 5th Avenue S, Kirkland
Date Sold 02/26/2016Sale Price $2,250,000Price/Unit $375,000Price/SF $354.72Cap Rate 3.9%GRM 17.0Units 6Year Built 1976
55
NORTHSHORE APARTMENTS
OFFERING MEMORANDUM | 25
Dan SwansonVice President 206.296.9610 dswanson@kiddermathews.com
Kidder Mathews601 Union Street, Suite 4720 Seattle, WA 98101
kiddermathews.com
Donna Marshall Vice President, Investment Sales 425.422.0954 donna@capstonecommercialnw.com
Capstone Commercial22722 29th Drive SE, Suite 100 Bothell, WA 98021
capstonecommercialnw.com
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