oklahoma 51 sfr portfolio - loopnet...fort worth, texas, providing convenient access to the dfw...

OKLAHOMA 51 SFR PORTFOLIO OKLAHOMA CITY MSA, OK

Dennis Fernandez Advisor 972.432.7436 [email protected] Todd Franks Managing Director 972.916.9397 [email protected] OK License #176210

SVN | Investment Sales Group | 6320 Lyndon B. Johnson Freeway, Suite 228, Dallas, TX 75240 OFFERING MEMORANDUM

1. PORTFOLIO OVERVIEW 3 Executive Summary Property Overview Additional Photos Benefits of SFR Portfolios 2. FINANCIAL OVERVIEW 10 Unit Mix Rent Roll CapEx & Appraisal Info Financial Analysis IRR Deferred 3. LOCATION OVERVIEW 18 Local Maps Area Attractions Map Economic Drivers 4. OKLAHOMA IN THE NEWS 21 Recent News Articles 5. DEMOGRAPHICS 30 Dominant Tapestry Map LifeMode Group: Hometown Demographic & Income Comparison 6. ABOUT SVN® 35 Advisor Bio Recent SFR Sales Experience

1. PORTFOLIO OVERVIEW

Oklahoma City MSA, OK

OKLAHOMA 51 SFR PORTFOLIO | OKLAHOMA CITY MSA, OK

PROPERTY OVERVIEW

SVN | Investment Sales Group is pleased to announce the exclusive listing of this 51 Single Family Rental Portfolio in the Oklahoma City Metro Area. Ranked the “#8 Most Popular U.S. City to Live In” according to Business Insider (June 2017) and the “#1 Best Place to Start a Business” by WalletHub (May 2017) – the OKC MSA offers investors plenty of opportunity for growth. Standard & Poor’s / Moody’s awarded the city a AAA rating, the highest rating possible for the 7th year in a row due to the strong economy. The Oklahoma 51 SFR Portfolio is highly concentrated in a strong rental growth market, with all homes located within a 7 mile radius. On average, the homes were built in 1957 and feature spacious layouts with an average home size of 1,150 Square Feet. Eleven (11) homes feature 2 beds with 1 bath; nineteen (19) 3 bed 1 bath; thirteen (13) 3 bed 1 ½ bath; five (5) 3 bed 2 bath; three (3) 4 bed 2 bath. In the last 3 years the current ownership spent $710,000 or $13,922 per home ($12.40/SF) in capital improvements and renovations. Investors should benefit from lower Repair & Maintenance costs due to these recent improvements. A list price of $3,700,000 for the entire portfolio or $72,549 per home provides the opportunity to purchase a rehabbed and stabilized turn-key SFR portfolio at below replacement cost and below the estimated retail prices for each home.

PROPERTY HIGHLIGHTS

• Opportunity to Purchase a Fully Occupied and Renovated Portfolio

• Seller Spent on Average $13,922 Per Home or a Total of $710,000 in Renovations and Upgrades

• Value-Add Opportunity to Increase Rents from $0.68/SF to Market Averages of $0.74/SF

• Highly Financeable SFR Portfolio with Estimated DSC of 1.5 with Appraisals Available

• Homes Located Closely Together (7 Mile Radius) Provides the Opportunity to Increase Returns Through Hands-On Management

• Offered at an Effective Gross Yield of 12.99% or at a Pro Forma Gross Yield of 14.07%

PROPERTY SUMMARY

SALE PRICE: $3,700,000

NUMBER OF HOMES: 51

PRICE/HOME: $72,549

AVG. SIZE/HOME 1,150 SF

PRICE/SF: $63.09

EFFECTIVE AVG. RENT/UNIT/SF: $785 / $0.68

PROFORMA- AVG. RENT/UNIT/SF: $851 / $0.74

AVG. YEAR BUILT: 1957

STABILIZED GROSS YIELD: 14.07%

STABILIZED NOI: $307,878

STABILIZED CAP RATE: 9.18%

YR 1 CASH-ON-CASH: 10.06%

Executive Summary


Additional Exterior Photos


Living Room Photos


Kitchen Photos


Bathroom Photos


Benefits of SFR Portfolios

As a secondary real estate market, the Oklahoma City MSA provides investors with an opportunity for strong cash flowing real estate assets, while providing a stable economy during various market cycle positions. Single Family Rental portfolios provide several advantages over apartment investments:

• Multiple exit strategies: provides a hedge on the market

When residential values are higher, the owner can exit on an individual sales basis

If home values decrease, rental homes maintain their value with rental income

Owners can sell the property to the tenant offering “Seller Financing” at above market interest rates and sell the loans

on the open market

• Rentals receive higher security deposits which protects the landlord against damage by the tenant

• Tenants are responsible for their own utilities which gives the landlord protection against spikes to expenses due to plumbing

leaks and/or increases in utility costs

• Homes are spread over a larger area which spreads the risk of value swings in any one submarket

• Tenants tend to be more stable with less turnover


2. FINANCIAL OVERVIEW



Unit Mix


Rent Roll


Rent Roll Continued


CAPEX & Appraisals


Summary of Improvements


Financial Analysis


IRR Deferred


3. LOCATION OVERVIEW



Since 2010, the Oklahoma City MSA is the 10th Fastest Growing Large Metro Area

in the country and has grown more than twice as

fast as the nation

According to the housing component of the Cost of

Living Index, housing costs are 28.8% below the

national average which provides affordable living for

residents

Named the #1 Best Place to Start a Business

(WalletHub, May 2017)

Ranked the 2nd Best City for First-Time Homebuyers due

to the low volatility of the housing market and

affordable home prices (SmartAsset, April 2017)

Cost of living is 15.5% below the U.S. average, making it the 10th Cheapest City to Live in 2017 according to

Kiplinger (May 2017)

Home to Tinker Air Force Base which is the world’s

largest aircraft repair facility and the area’s 2nd largest

employer with 24,000 employees

Ranked the #8 Most Popular U.S. City to Live In

according to Business Insider (June 2017)

The city saw the 8th Fastest Median Salary Growth of any U.S. city over the past

decade (Forbes, 2016)

Home to 2 Fortune 500 Companies – Chesapeake Energy (#163) and Devon

Energy (#270) – in addition to Love’s Travel Stops which

is the #13 Largest Private Company, OGE Energy, Sonic

Drive-In Restaurants, and more

More than 100 parks and recreation facilities, golf

courses & 80-miles of hiking and bike trails

Amtrak’s Heartland Flyer offers daily round-trips

between Oklahoma City and Fort Worth, Texas, providing convenient access to the

DFW Metroplex

Standard & Poor’s/Moody’s awarded the city a AAA rating, the highest bond

rating possible, for the 7th year in a row due to its

strong economy

Area Highlights


Portfolio Map


ENTERTAINMENT DRIVERS

- Bricktown

- Capitol Building

- Chesapeake Energy Arena

- Hefner Lake & Park

- Lake Overholser

- Myriad Botanical Gardens

- Oklahoma City Museum of Art

- Oklahoma City National Memorial & Museum

LARGEST EMPLOYERS (SELECT LIST)

- State of Oklahoma – 45,600 employees

- Tinker Air Force Base – 24,000 employees

- University of Oklahoma at Norman – 12,700 employees

- FAA Mike Monroney Aeronautical Center – 7,000 employees

- INTEGRIS Health – 6,000 employees

- Hobby Lobby Headquarters – 5,100 employees

- University of Oklahoma Health Sciences Center – 5,000 employees

- City of Oklahoma City – 4,700 employees

- Mercy Hospital – 4,500 employees

- OGE Energy – 3,400 employees

- OU Medical Center – 3,200 employees

- AT&T – 2,700 employees

- The Boeing Company – 2,600 employees

- Devon Energy – 2,500 employees

- Chesapeake Energy – 2,500 employees

Economic Drivers


4. OKLAHOMA IN THE NEWS



Aerospace reaches new heights in Oklahoma August 15, 2017 By Jack Money

Economic incentives, the continued growth of military-related aviation missions and the hard work of local, state and regional economic development specialists and educators are showing results when it comes to the economic impact of the aerospace and aviation industries to Oklahoma's economy. A study released Monday by the Oklahoma Aeronautics Commission estimates the industries now are the second-largest sector of Oklahoma's economy, generating an annual economic impact of about $43.8 billion. The industry — which consists of 109 airports, hundreds of off-airport aviation/aerospace employers and military aviation — employs more than 200,000 people and creates an annual payroll of about $12 billion. The study estimates military aviation continues to be the largest contributor, bringing an economic impact of $19.3 billion. Off-airport aviation and aerospace employers are next, with $13.9 billion.

Oklahoma in the News


A passenger jet takes off from Will Rogers Airport in Oklahoma City. Commercial and general aviation airports help generate an economic impact of about $43.8 billion in Oklahoma’s economy, a report released Monday said. (Photo by Paul Hellstem, The Oklahoman)

The state's 109 general and commercial aviation airports, which employ 74,002 workers, have an economic impact of $10.6 billion, the study estimates. Charlie H. Dry, a University of Oklahoma physics graduate who went on to become a test astronaut for the National Aeronautics and Space Administration and has spent most of his life in the field, said the current economic impact numbers are sound, adding he believes the state hasn't seen anything, yet. “This is a hardworking aerospace and aviation state,” Dry said Monday afternoon, after Victor Bird, the aeronautics commission's director, presented the study's results at a gathering at the Oklahoma History Center. “We've been after this for a long, long time,” Dry said. “I think there is a great future here for our state.” Bird said Monday the study is the first the commission has conducted to evaluate the impact the aerospace and aviation industries have had on the state's economy since 1994. “This is the most comprehensive study on the economic impact for our civilian and military airports and our aviation and aerospace industry ever done,” Bird said. He said analysts have speculated the past two decades about whether the state's aerospace and aviation industries continued to grow with the help of state-created incentives, educational programs and the hard work of economic development specialists, despite the Great Recession's impact. “The answer to ... those questions is a resounding yes,” Bird said. Oklahoma Gov. Mary Fallin, who also spoke at Monday's event, agreed. “Right here in Oklahoma, we have the world's largest military aircraft repair facility in Tinker Air Force Base, and the largest commercial aircraft repair facility in Tulsa, for American Airlines,” Fallin said. The governor also mentioned various other companies that have brought aviation-related jobs and facilities to Oklahoma, thanked the state's Congressional delegation for its efforts to protect the state's military bases and thanked state legislators for protecting state-created economic incentives. She also noted educators' effort to boost numbers of science and math graduates from Oklahoma colleges and universities also has played a role.



“The footprint of aviation and aerospace is strong and growing in Oklahoma,” Fallin said. “(This report) is dramatic proof that our policies ... have helped us build a stronger, vibrant, diversified economy.” Bird said the study, which started about a year ago, cost about $540,000 and took about 7,000 hours to complete. Data used as part of the study was obtained from airport representatives and tenants, other state businesses, the U.S. Department of Transportation, the Federal Aviation Administration, the Oklahoma Department of Commerce, the Oklahoma Aeronautics Commission and other public and private sources. He said the study was paid for using grants of $245,000 from the FAA and the commission, a $25,000 grant from Oklahoma City Airport Trust and grants of $12,500 from both the Tulsa Airports Improvement Trust and the Tulsa Regional Chamber of Commerce. Drones taking flight Unmanned aerial systems is where Dry sees significant future growth in Oklahoma's aerospace and aviation industry. Dry said he has a couple of companies involved in the development, evaluation and production of unmanned systems. A report issued by the Association for Unmanned Vehicle Systems International in 2013 estimated Oklahoma could see hundreds of new jobs and perhaps as much as nearly another $1 billion annual economic impact from that part of the aerospace industry by 2025. The Oklahoma Aeronautics Commission believes Oklahoma is one of the top states in the country when it comes to related academic programs supporting the unmanned aerial vehicle industry, thanks to ongoing research at the University of Oklahoma and Oklahoma State University. While Dry said drones were not well received initially when they were released as toys, designs being worked on now will be used for everything from inspecting wind turbines, pipelines, tanks, electrical lines and homes to surveillance and rescue tools for emergency responders. “When you are talking about professional drones, they can do anything and everything,” he said.



Oklahoma’s steady jobless rate is good economic news, analyst says July 21, 2017 By Jack Money

While Oklahoma's unemployment rate of 4.3 percent is unchanged from a month ago, a state labor analyst said Friday this month's report shows the state economy continues to mend. "It is a positive report," said Lynn Gray, the director of research and analysis at the Oklahoma Employment Security Commission. "The number of unemployed has been stable for several months, and on the payroll side, we are seeing increases.“ Gray noted payroll jobs data collected through surveys with state employers showed an increase of 3,700 in June. That growth was spread across various sectors of the state's economy, including oil and gas, durable goods manufacturing, and in professional and business services. "We are adding jobs in the categories that really drive our economy," Gray said. Oklahoma's 4.3 percent unemployment rate for June is preliminary, and subject to being revised. However, the estimate, if it stands, will make it a fourth consecutive month the percentage of unemployed Oklahomans has remained at that level.



Other data released in the statewide unemployment report show the number of Oklahomans in the state's civilian labor force is down about 13,000 over the past few months. However, Oklahoma's preliminary labor force number of 1,822,388 in June is not far off from what was reported a year earlier, which was 1,824,453. A year ago, Oklahoma's unemployment percentage was 5 percent. The report's preliminary data also estimates the number of unemployed Oklahomans in June was 78,891. It says an estimated 79,027 were unemployed in May. Gray said that while Oklahoma is still down 19,300 jobs from its all-time high in January 2015, the state has added 8,800 payroll jobs during the past 12 months. As for the gains noted in June, the state's mining sector, which includes oil and gas, grew by 800 jobs. So far this year, the sector has added 5,500 positions. Construction jobs grew by 1,000, retail trade jobs grew by 2,100, and professional and business services jobs were up by 2,600. Meanwhile, job numbers were down in June for the health care and social assistance, leisure and hospitality and other services sectors of the economy, Gray said.



OKC Moving Forward With Innovation District July 14, 2017 By Kelly Ogle

OKLAHOMA CITY -Oklahoma City is home to several thriving districts, and a new one is on the horizon. Located just east of the downtown area, this future hub for innovation is expected to offer more than just a place to work. "It's a new economy in today's world, a new high tech economy," said Terry Taylor, with the Oklahoma Health Center Foundation. Oklahoma wants to capture that economy and Oklahoma City is doing that through its emerging Innovation District. "Here we are, right adjacent to downtown so we're lucky to build upon that geography," Taylor said. The district encompasses 1.3 square miles east of downtown. Within its boundaries - lies an epicenter of health sciences and bio tech research facilities and tech startups, along with Automobile Alley. "We wanted a place where companies, researchers, universities will all be near each other so they will have to bump into each other literally or figuratively and new ideas and jobs and opportunities will come out of that," said Kurt Foreman, Executive Vice President with the OKC Chamber of Commerce. With the addition of the GE global research center in 2016, district leaders are seeing the focus already shifting. "Oklahoma really is becoming the silicon valley of energy innovation," said Mike Ming, Vice President - Executive Liaison, Baker Hughes, a GE Company.



Inside the new research facility, GE is bringing the oilfield into the lab with two test drills on site. "We want to be end to end in the spectrum of how to make operations better, cheaper, faster, cleaner, safer, more efficient," Ming said. Employees also tests drones to detect emissions at oilfields. But it doesn't stop there. Ming says his workforce of highly educated scientists and engineers are constantly innovating. And being within the Innovation District is just an added benefit. "It puts them in an ecosystem where they want to live where they want to work, and where they can collaborate with other industries where we can draw on their expertise to solve this industry's toughest challenges," said Ming. The district won't just be a cluster of different industries but a cluster of people - working and living - in more of a 24/7 type of environment. It's a notion that has sparked interest in other cities across the state. City leaders in Broken Arrow are working to build an innovation district there to attract high tech jobs. "The reality today is people just don't want to drive to an office building and then get back in their car and go home at night, they want to be in a neighborhood," said Foreman. Incorporating Automobile Alley will give the district that community feel but district leaders hope to add even more. "There'll be housing, there'll be more buildings, and there'll be more restaurants and places, things to do," said Foreman. The plans also call for more sidewalks to make it more walkable and bicycle friendly as well as holding more events in the existing green spaces. And the 10th Street bridge that brings the two sections of the district together could one day have a new look. "It could be a park," said Taylor. "Along 10th Street you could potentially build buildings on that bridge.“ It would be similar to Klyde Warren Park in Dallas. The city created an urban green space over a freeway to serve as a central gathering space for downtown workers and visitors. "There's questions to it, engineering questions but that can all be addressed, that's a good question to have for our area and what happens in the next 10 years if that can be accomplished it would be great," Taylor said.



5. DEMOGRAPHICS



Dominant Tapestry Map


Tapestry LifeMode L1: Affluent Estates

L2: Upscale Avenues

L3: Uptown Individuals

L4: Family Landscapes

L5: GenXurban

L6: Cozy Country

L7: Ethnic Enclaves

L8: Middle Ground

L9: Senior Styles

L10: Rustic Outposts

L11: Midtown Singles

**L12: Hometown

L13: Next Wave

L14: Scholars and Patriots

L15: Unclassified

** 67% of the Portfolio is located in an area characterized by LifeMode L12: Hometown in the Segment 12B/Traditional Living. See following pages for the socioeconomic and demographic composition of this segment.

Source: ESRI, 2017

LifeMode Group: Hometown


6. ABOUT SVN®



Advisor Bios

License #: 617125 Phone: 972.432.7436 Fax: 214.206.9616 E-mail: [email protected] Address: 6320 LBJ Frwy. Suite 228 Dallas, TX 75240

Dennis Fernandez Advisor SVN | Investment Sales Group

Dennis Fernandez, a DFW native, brings nearly a decade of investment real estate knowledge and experience to SVN. Early in his career Dennis quickly realized that he gets a great amount of excitement when navigating thru the fast paced environment of investment real estate sales. Dennis discovered that his true passion was mentoring both new and seasoned real estate investors and helping them achieve their investment goals. Dennis has successfully negotiated over 350 real estate transactions, ranging from the acquisition of a single family rental asset to the disposition of large multi-unit rental portfolios. His experience includes representing local and foreign institutional investors, private equity firms, and individual investors that are buying or selling in the State of Texas. Dennis is a firm believer that you can get whatever you want in life if you simply help enough other people get what they want in life. He is constantly preaching that in real estate it is imperative to have a strong team in your corner. His clients usually have to say this about working with Dennis, “Your numbers are very thorough and you always do the necessary due diligence before presenting a deal.” Specialties: Small to Mid-size Rental Portfolio’s, Real Estate Investments and Investor Consulting.


Advisor Bios

Todd Franks, CCIM Managing Director SVN | Investment Sales Group

Todd’s career in commercial real estate brokerage began in 2000 by specializing in the representation of multi-family Sellers. Over the past 16 years, Todd has facilitated the development, redevelopment, disposition, acquisition and repositioning of hundreds of A, B, and C – Class multi-family and commercial assets (totaling more than $750,000,000), in the Dallas/Fort Worth market as well as secondary and tertiary markets across North Texas and Oklahoma. When Todd left his previous brokerage firm in March 2014, he was acknowledged as the all-time top producer. Shortly after, Todd opened his own SVN office in Dallas, TX and is now recognized as one of the top five advisors in the world (SVN 2015). His list of clients includes: Trammel Crow Residential Development, Highland Capital, CW Capital, LNR Partners, C-III, Midland Loan Services, Orix Capital Markets, Imperial Bank, City National Bank, La Jolla Bank as well as numerous lenders, servicers, institutions, family offices, partnerships and individual owners. Todd is regularly interviewed and featured in local and national commercial real estate publications such as “The New York Times,” “The Dallas Morning News,” “Dallas Business Journal,” “Globe Street” and “Bisnow.” He has also served as an expert witness in trials that require multi-family and financing expertise. In 2011, Todd became the youngest founder in the acquisition of “Texas Republic Bank” which has matured from $22,000,000 to now over $160,000,000 in assets. Related volunteer work included: Former Chairman of the Board for the Vickery Meadows Economic Development Division, former Board of Directors for the Vickery Meadows Public Improvement District and former Board of the Multi-family Property Standards Committee.

License #: 479935 Phone: 972.916.9397 Fax: 214.206.9616 E-mail: [email protected] Address: 6320 LBJ Frwy. Suite 228 Dallas, TX 75240


Recent SFR Sales Experience (Select Transactions)

PROPERTY LOCATION TYPE CLOSE DATE

Wisconsin 44 Portfolio Appleton, WI Value Add On Market: Multiple LOI’s

475 SFR Portfolio Chicago, IL Value Add On Market: Multiple LOI’s

39 SFR Portfolio Charlotte, NC Value Add June 2017

32 SFR Portfolio Charlotte, NC Value Add March 2017

28 SFR Portfolio Charlotte, NC Value Add December 2016

10 SFR/MF Portfolio Charlotte, NC Value Add November 2016

38 SFR/MF Portfolio Charlotte, NC Value Add October 2016

67 SFR Portfolio Fort Worth, TX Stable June 2016

Lakewood Townhomes Dallas, TX Stable April 2016

East Dallas Townhomes Dallas, TX New Construction April 2016

Mesquite SFR Portfolio Mesquite, TX Stable March 2016

53 SFR Portfolio DFW, TX Value Add March 2016

Keene Place Keene, TX Stable (4-Plexes) December 2015

Pleasant Grove SFRs Dallas, TX Value Add October 2015

Fort Worth SFRs Fort Worth, TX Stable October 2015

Village Park Fort Worth, TX New Construction January 2015


Disclaimer


The material contained in this Offering Brochure is furnished solely for the purpose of considering the purchase of the property within and is not to be used for any other purpose. This information should not, under any circumstance, be photocopied or disclosed to any third party without the written consent of the SVN® Advisor or Property Owner, or used for any purpose whatsoever other than to evaluate the possible purchase of the Property. The only party authorized to represent the Owner in connection with the sale of the Property is the SVN® Advisor listed in this brochure, and no other person is authorized by the Owner to provide any information or to make any representations other than contained in this Offering Brochure. If the person receiving these materials does not choose to pursue a purchase of the Property, this Offering Brochure must be returned to the SVN® Advisor. Neither the SVN® Advisor nor the Owner make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein, and nothing contained herein is or shall be relied upon as a promise or representation as to the future representation of the Property. These Assumptions may or may not be proven to be correct, and there can be no assurance that such estimates will be achieved. Further, the SVN® Advisor and the Owner disclaim any and all liability for representations or warranties, expressed or implied, contained in or omitted from this Offering Brochure, or any other written or oral communication transmitted or made available to the recipient. The recipient shall be entitled to rely solely on those representations and warranties that may be made to it in any final, fully executed and delivered Real Estate Purchase Agreement between it and Owner. The information contained herein is subject to change without notice and the recipient of those materials shall not look to Owner or the SVN® Advisor nor any of their officers, employees, representatives, independent contractors or affiliates, for the accuracy or completeness thereof. Recipients of this Offering Brochure are advised and encouraged to conduct their own comprehensive review and analysis of the Property. This Offering Brochure is a solicitation of interest only and is not an offer to sell the Property. The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest to purchase the Property and expressly reserves the right, at its sole discretion, to terminate negotiations with any entity, for any reason, at any time with or without notice. The Owner shall have no legal commitment or obligation to any entity reviewing the Offering Brochure or making an offer to purchase the Property unless and until the Owner executes and delivers a signed Real Estate Purchase Agreement on terms acceptable to Owner, in Owner’s sole discretion. By submitting an offer, a prospective purchaser will be deemed to have acknowledged the foregoing and agreed to release the Owner and the SVN Advisor from any liability with respect thereto. To the extent Owner or any agent of Owner or any agent of Owner corresponds with any prospective purchaser, any prospective purchaser should not rely on any such correspondence or statements as binding Owner. Only a fully executed Real Estate Purchase Agreement shall bind the property and each prospective purchaser proceeds at its own risk.

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oklahoma 51 sfr portfolio - loopnet...fort worth, texas, providing convenient access to the dfw...

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