422 CEDAR AVENUE NORTH, OWATONNA, MN 55060...422 CEDAR AVENUE NORTH, OWATONNA, MN 55060 LOCATION INFORMATION | Regional Map Michel Commercial Real Estate International, Inc. | michelcommercialre.com

Presented By:

PHIL REESNESVice [email protected]

Michel Commercial Real Estate International, Inc. | michelcommercialre.com

422 CEDAR AVENUE NORTH, OWATONNA, MN 55060FOR SALE | MULTIFAMILY INVESTMENT

COURTYARD APARTMENTS

CONFIDENTIALITY & DISCLAIMER

PROPERTY INFORMATION3

LOCATION INFORMATION8

FINANCIAL ANALYSIS12

RENT COMPARABLES16

ADVISOR BIOS21

A l l m a t e r i a l s a n d i n f o r m a t i o n r e c e i v e d o r d e r i v e d f r o m M i c h e l C o m m e r c i a l R e a l E s t a t e I n t e r n a t i o n a l , I n c . i t s d i r e c t o r s , o f fi c e r s , a g e n t s , a d v i s o r s ,a f fi l i a t e s a n d / o r a ny t h i r d p a r t y s o u r c e s a r e p r o v i d e d w i t h o u t r e p r e s e n t a t i o n o r w a r ra n t y a s t o c o m p l e t e n e s s , v e ra c i t y, o r a c c u ra c y, c o n d i t i o n o f t h ep r o p e r t y, c o m p l i a n c e o r l a c k o f c o m p l i a n c e w i t h a p p l i c a b l e g o v e r n m e n t a l r e q u i r e m e n t s , d e v e l o p a b i l i t y o r s u i t a b i l i t y, fi n a n c i a l p e r f o r m a n c e o f t h ep r o p e r t y, p r o j e c t e d fi n a n c i a l p e r f o r m a n c e o f t h e p r o p e r t y f o r a ny p a r t y ’ s i n t e n d e d u s e o r a ny a n d a l l o t h e r m a t t e r s .

N e i t h e r M i c h e l C o m m e r c i a l R e a l E s t a t e I n t e r n a t i o n a l , I n c . i t s d i r e c t o r s , o f fi c e r s , a g e n t s , a d v i s o r s , o r a f fi l i a t e s m a ke s a ny r e p r e s e n t a t i o n o r w a r ra n t y,ex p r e s s o r i m p l i e d , a s t o a c c u ra c y o r c o m p l e t e n e s s o f t h e a ny m a t e r i a l s o r i n f o r m a t i o n p r o v i d e d , d e r i v e d , o r r e c e i v e d . M a t e r i a l s a n d i n f o r m a t i o n f r o ma ny s o u r c e , w h e t h e r w r i t t e n o r v e r b a l , t h a t m ay b e f u r n i s h e d f o r r e v i e w a r e n o t a s u b s t i t u t e f o r a p a r t y ’ s a c t i v e c o n d u c t o f i t s o w n d u e d i l i g e n c e t od e t e r m i n e t h e s e a n d o t h e r m a t t e r s o f s i g n i fi c a n c e t o s u c h p a r t y. M i c h e l C o m m e r c i a l R e a l E s t a t e I n t e r n a t i o n a l , I n c . w i l l n o t i nv e s t i g a t e o r v e r i f y a nys u c h m a t t e r s o r c o n d u c t d u e d i l i g e n c e f o r a p a r t y u n l e s s o t h e r w i s e a g r e e d i n w r i t i n g .

E AC H PA RT Y S H A L L C O N D U C T I T S O W N I N D E P E N D E N T I N V E S T I G AT I O N A N D D U E D I L I G E N C E .

A ny p a r t y c o n t e m p l a t i n g o r u n d e r c o n t ra c t o r i n e s c r o w f o r a t ra n s a c t i o n i s u r g e d t o v e r i f y a l l i n f o r m a t i o n a n d t o c o n d u c t t h e i r o w n i n s p e c t i o n s a n di nv e s t i g a t i o n s i n c l u d i n g t h r o u g h a p p r o p r i a t e t h i r d p a r t y i n d e p e n d e n t p r o f e s s i o n a l s s e l e c t e d b y s u c h p a r t y. A l l fi n a n c i a l d a t a s h o u l d b e v e r i fi e d b y t h ep a r t y i n c l u d i n g b y o b t a i n i n g a n d r e a d i n g a p p l i c a b l e d o c u m e n t s a n d r e p o r t s a n d c o n s u l t i n g a p p r o p r i a t e i n d e p e n d e n t p r o f e s s i o n a l s . M i c h e l C o m m e r c i a lR e a l E s t a t e I n t e r n a t i o n a l , I n c . m a ke s n o w a r ra n t i e s a n d / o r r e p r e s e n t a t i o n s r e g a r d i n g t h e v e ra c i t y, c o m p l e t e n e s s , o r r e l e v a n c e o f a ny fi n a n c i a l d a t a o ra s s u m p t i o n s . M i c h e l C o m m e r c i a l R e a l E s t a t e I n t e r n a t i o n a l , I n c . d o e s n o t s e r v e a s a fi n a n c i a l a d v i s o r t o a ny p a r t y r e g a r d i n g a ny p r o p o s e d t ra n s a c t i o n .A l l d a t a a n d a s s u m p t i o n s r e g a r d i n g fi n a n c i a l p e r f o r m a n c e , i n c l u d i n g t h a t u s e d f o r fi n a n c i a l m o d e l i n g p u r p o s e s , m ay d i f f e r f r o m a c t u a l d a t a o rp e r f o r m a n c e . A ny e s t i m a t e s o f m a r ke t r e n t s a n d / o r p r o j e c t e d r e n t s t h a t m ay b e p r o v i d e d t o a p a r t y d o n o t n e c e s s a r i l y m e a n t h a t r e n t s c a n b ee s t a b l i s h e d a t o r i n c r e a s e d t o t h a t l e v e l . Pa r t i e s m u s t e v a l u a t e a ny a p p l i c a b l e c o n t ra c t u a l a n d g o v e r n m e n t a l l i m i t a t i o n s a s w e l l a s m a r ke tc o n d i t i o n s ,v a c a n c y f a c t o r s a n d o t h e r i s s u e s i n o r d e r t o d e t e r m i n e r e n t s f r o m o r f o r t h e p r o p e r t y.

Le g a l q u e s t i o n s s h o u l d b e d i s c u s s e d b y t h e p a r t y w i t h a n a t t o r n e y. Ta x q u e s t i o n s s h o u l d b e d i s c u s s e d b y t h e p a r t y w i t h a c e r t i fi e d p u b l i c a c c o u n t a n t o rt a x a t t o r n e y. T i t l e q u e s t i o n s s h o u l d b e d i s c u s s e d b y t h e p a r t y w i t h a t i t l e o f fi c e r o r a t t o r n e y. Q u e s t i o n s r e g a r d i n g t h e c o n d i t i o n o f t h e p r o p e r t y a n dw h e t h e r t h e p r o p e r t y c o m p l i e s w i t h a p p l i c a b l e g o v e r n m e n t a l r e q u i r e m e n t s s h o u l d b e d i s c u s s e d b y t h e p a r t y w i t h a p p r o p r i a t e e n g i n e e r s , a r c h i t e c t s ,c o n t ra c t o r s , o t h e r c o n s u l t a n t s a n d g o v e r n m e n t a l a g e n c i e s . A l l p r o p e r t i e s a n d s e r v i c e s a r e m a r ke t e d b y M i c h e l C o m m e r c i a l R e a l E s t a t e I n t e r n a t i o n a l ,I n c . i n c o m p l i a n c e w i t h a l l a p p l i c a b l e f a i r h o u s i n g a n d e q u a l o p p o r t u n i t y l a w s .

Michel Commercial Real Estate International, Inc. | michelcommercialre.com Page 2

PROPERTY INFORMATION


Presented By:


SECTION 1


OFFERING SUMMARYSale Price: $1,425,000

Number Of Units: 23

Price Per Unit: $61,957

Cap Rate: 7.12%

NOI: $101,448

Lot Size: 0.25 Acres

Year Built: 1976

Building Size: 11,336 SF

Zoning: Central Business

PROPERTY OVERVIEWThe Courtyard Apartments was built in 1976. The property consists of 16 one bedroom unitsand 7 studio units. There are two buildings with a courtyard between the two buildings. Thereis on-site laundry and vending for the convenience of the tenants. Each unit is also equippedwith a sleeve-type air conditioner, as well as it's own forced air furnace and electric baseboardheat, and it's own hot water heater.

LOCATION OVERVIEWOwatonna is a community of approximately 25,000 in population located near Interstate 35and Highways 218 and 14. There are many businesses and industries in Owatonna. Thecommunity has experienced moderate growth rate in population over the past 10 years.Owatonna is the county seat for Steele County. It is known as one of the wealthiest cities in thestate of Minnesota on a per capita basis. There are more than 500 retail, wholesale andprofessional firms and more than 40 diversified industrial firms in Owatonna.

The Courtyard Apartments are conveniently located in downtown Owatonna, close toshopping, restaurants, post office, library, and much more! Schedule your showing today!


422 CEDAR AVENUE NORTH, OWATONNA, MN 55060

PROPERTY INFORMATION | Executive Summary


SALE HIGHLIGHTS

• New flat roofs on both buildings in last 3 years

• New electric boxes and circuit breakers in last 4 years

• New video camera security system in last 2 years

• Secure buildings

• Most units have new appliances, flooring, air conditioners (thru wall)

in last 4 years

• Newer on-site laundry equipment (owned)

• Newer doors and windows in each unit

• Each unit has it's own forced air furnace as well as electric baseboard

heat

• Each unit has it's own hot water heater

• On-site office

• Solid concrete structures

• Attractive courtyard separates 2 buildings

• Great downtown location:

• * Dining

• * Shopping

• * Library

• * Post office (and much more!)

• Excellent unit mix!

• 16 One-bedroom units

• 7 Studio units



PROPERTY INFORMATION | Complete Highlights




PROPERTY INFORMATION | Additional Photos




PROPERTY INFORMATION | Additional Photos

LOCATION INFORMATION


Presented By:


SECTION 2


Courtyard Apartments



LOCATION INFORMATION | Regional Map




LOCATION INFORMATION | Location Maps


Courtyard Apartments



LOCATION INFORMATION | Aerial Map

FINANCIAL ANALYSIS


Presented By:


SECTION 3


INVESTMENT OVERVIEW PROFORMA

Price $1,425,000

Price per Unit $61,957

CAP Rate 7.12%

Cash-on-Cash Return (yr 1) 9.47 %

Total Return (yr 1) $59,160

Debt Coverage Ratio 1.5

OPERATING DATA PROFORMA

Gross Scheduled Income $168,600

Other Income $2,604

Total Scheduled Income $171,204

Gross Income $162,774

Operating Expenses $61,326

Net Operating Income $101,448

Pre-Tax Cash Flow $33,753

FINANCING DATA PROFORMA

Down Payment $356,250

Loan Amount $1,068,750

Debt Service $67,695

Debt Service Monthly $5,641

Principal Reduction (yr 1) $25,407



FINANCIAL ANALYSIS | Financial Summary


INCOME SUMMARY PROFORMA

Apartment Rental Income $168,600LESS: 5% Estimated Vacancy -$8,430Laundry / Vending Revenue (2019) $2,604Gross Income $162,774

EXPENSE SUMMARY PROFORMA

Cleaning Payroll $1,997Cleaning Supplies $167Rubbish $1,225Maintenance Supplies $3,049Maintenance Contracts $14,349Electric $2,136Water $1,127Gas $2,776Sewer $3,116Internet Services $280Management Fees $8,064Legal Expenses $2,890Facilities Improvements $2,820Apartment Refurbishing Expense $1,261Real Estate Taxes (payable 2020) $11,990Insurance $4,079Gross Expenses $61,326

Net Operating Income $101,448



FINANCIAL ANALYSIS | Income & Expenses


UNITNUMBER

UNITBED

UNITBATH

LEASESTART

LEASEEND

CURRENTRENT

PROJECTEDRENT

SECURITYDEPOSIT

1 0 1 3/18/19 3/31/20 $545 $545 $495

2 1 1 8/1/16 12/31/20 $645 $645 $537

3 1 1 7/1/18 8/31/20 $645 $645 $595

4 1 1 5/10/19 4/30/20 $645 $645 $595

5 1 1 1/16/19 12/31/20 $645 $645 $595

6 0 1 11/25/19 11/30/20 $545 $545 $495

7 1 1 4/17/20 4/30/21 $645 $645 $595

8 1 1 8/1/16 12/31/20 $645 $645 $425

9 0 1 3/18/19 3/31/20 $600 $545 $495

10 1 1 8/1/16 10/31/20 $645 $645 $425

11 1 1 1/15/20 1/31/21 $645 $645 $595

12 0 1 11/2/17 10/31/19 $545 $545 $495

13 1 1 8/1/16 12/31/20 $645 $645 $587

14 1 1 7/1/19 8/30/20 $595 $645 $595

15 0 1 8/24/16 7/31/20 $495 $545 $545

16 1 1 5/1/07 1/31/20 $645 $645 $425

17 1 1 6/1/20 5/31/21 $645 $645 $595

18 0 1 12/11/19 11/30/20 $545 $545 $545

19 1 1 4/16/20 3/31/21 $645 $645 $595

20 1 1 3/6/20 3/31/21 $645 $645 $595

21 0 1 8/1/16 1/31/20 $545 $545 $425

22 1 1 6/5/18 M/M $655 $645 $595

23 1 1 7/1/19 6/30/20 $595 $645 $595

Totals/Averages $14,050 $14,135 $12,439



FINANCIAL ANALYSIS | Rent Roll

RENT COMPARABLES


Presented By:


SECTION 4


Subject Property

422 Cedar Avenue NorthOwatonna, MN 55060

1976Year Built: 0.25 AcresLot Size:

23No. Units: Avg. Rent/SF:

$610Avg. Rent: 0 SFAvg. Size:

UNIT TYPE # UNITS % OF SIZE SF RENT RENT/SF

0 br / 1 ba 7 30.4 0 $546

1 br / 1 ba 16 69.6 0 $639Liquid error: no implicit conversion from nil to integer

TOTAL/AVG 23 100% 0 $610

The Courtyard Apartments was built in 1976. The property consists of 16 onebedroom units and 7 studio units. There are two buildings with a courtyardbetween the two buildings. There is on-site laundry and vending for theconvenience of the tenants. Each unit is also equipped with a sleeve-type airconditioner, as well as it's own forced air furnace and electric baseboard heat, andit's own hot water heater.

435 16th St NEOwatonnaMN 55060

1

1

53,481 SFBldg Size: $789Avg. Rent:


1 Bedroom 26 47.3 $705

2 Bedroom 25 45.5 $840

3 Bedroom 4 7.3 $1,020Liquid error: no implicit conversion from nil to integer

TOTAL/AVG 55 100% 0 $789



RENT COMPARABLES | Rent Comps


Academy Apartments706 E Academy StOwatonna, MN 55060

2

2

10,614 SFBldg Size: 11No. Units:

$794Avg. Rent:


1 Bedroom 8 72.7 $775

2 Bedroom 3 27.3 $848Liquid error: no implicit conversion from nil to integer

TOTAL/AVG 11 100% 0 $794

Westgate Apartments585 Adams Ave NWOwatonna, MN 55060

3

3


$708Avg. Rent:


1 Bedroom 13 43.3 $615

2 Bedroom 14 46.7 $759

3 Bedroom 3 10 $873Liquid error: no implicit conversion from nil to integer

TOTAL/AVG 30 100% 0 $708





811 E School StOwatonnaMN 55060

4

4


$796Avg. Rent:


Studio 6 37.5 $548

1 Bedroom 7 43.8 $822

3 Bedroom 3 18.8 $1,234Liquid error: no implicit conversion from nil to integer

TOTAL/AVG 16 100% 0 $796

Maple View Apartments421 and 431 State AveOwatonna, MN 55060

5

5


$661Avg. Rent:


Studio 8 36.4 $518

1 Bedroom 10 45.5 $704

2 Bedroom 4 18.2 $840Liquid error: no implicit conversion from nil to integer

TOTAL/AVG 22 100% 0 $661





422 Cedar Avenue North | Owatonna, MN 55060SUBJECT PROPERTY

1 Owatonna, MN55060

2706 E Academy StOwatonna, MN 55060

ACADEMY APARTMENTS

3585 Adams Ave NWOwatonna, MN 55060

WESTGATE APARTMENTS 4 Owatonna, MN55060

5421 and 431 State AveOwatonna, MN 55060

MAPLE VIEW APARTMENTS



RENT COMPARABLES | Rent Comps Map

ADVISOR BIOS


Presented By:


SECTION 5


12930 32nd Avenue NorthMinneapolis, MN 55441T [email protected]

PROFESSIONAL BACKGROUND

Phil joined Michel Commercial Real Estate Intl. Inc. in 2002. Specializing in multifamilyhousing, Phil is a valued partner to both buyers and sellers in the acquisition anddisposition of their investment properties, citing his knowledge of the market, accurateproperty valuations, quality contacts, and trusted leadership from initial contact tosuccessful closing. Phil and his wife Lisa have three children and live in the northwesternsuburbs of Minneapolis. Phil enjoys spending time with his family, traveling, and playinggolf.

Founded in 1987, Michel Commercial Real Estate Intl. Inc. focuses solely on sellingmultifamily housing. The brokerage company represents both private and institutionalgroups, including local owners and national investors. Michel Commercial Real Estatesuccessfully trades 1,500+ units of multifamily housing a year in the Midwest andspecializes in all types of apartments, including market rate, affordable, and studenthousing. The list of apartment projects sold ranges from 10 to 500 units.

PHIL REESNES

Vice President



ADVISOR BIOS | Advisor Bio & Contact 1

Documents

422 CEDAR AVENUE NORTH, OWATONNA, MN 55060...422 CEDAR AVENUE NORTH, OWATONNA, MN 55060 LOCATION INFORMATION | Regional Map Michel Commercial Real Estate International, Inc. | michelcommercialre.com