EVANSVILLE 4-PACK A FOUR-PROPERTY MANUFACTURED HOME COMMUNITY PORTFOLIO 38 TOTAL MH SITES Pecan Heritage Hills Pueblo Pinecrest For a video tour, please visit: https://vimeo.com/275282217 PLEASE DO NOT SPEAK WITH TENANTS OR EMPLOYEES
PORTFOLIO OVERVIEW Name Heritage Hills MHC Pecan MHC Pinecrest MHC Pueblo MHC Totals/Avg Address 4833 Salem Dr Newburgh, IN 4763 4855 State Road 66 Newburgh, IN 4763 9 Birkshire Ave Chandler, IN 4761 15 Wyandotte Dr Chandler, IN 4761 - County Warrick Warrick Warrick Warrick - Tax Parcel IDs 87-12-25-3-59.-19 87-12-26-4-233.-19 87-9-31-1-1.-5/ 87-8-36-2-1.-2 87-12-1-2-9.-2 - Sites 71 56 157 96 38 Community Type All Ages All Ages All Ages All Ages - Year Built 1965 1985 1973 1975 - Land Size (acres) Density (sites/acre) MH Physical Occupancy MH Economic Occupancy Inventory Homes (as of Jun '18) Home Loans (cur bal as of May 18) Average Lot Rent (base rent only) 1.71 7.91 26.5 17.55 62.22 6.63 7.8 6.3 5.47 6.3 63.38% 85.71% 68.79% 38.54% 6.56% 78.57% 62.42% 36.46% 62.11% (236 sites as of Jun '18) 57.63% (219 sites as of Jun '18) 21 (19 occupied) 21 (17 occupied) 43 (36 occupied) 21 (2 occupied) 16 (92 occupied) 5 (cur bal of $27,956) 5 (cur bal of $114,) 27 (cur bal of $976,87) 1 (cur bal of $49,45) 38 (cur bal of $1,347,493) $296 $294 $293 $343 $37 Rent Increase $5 (Feb '18); $TBD (Feb '19) $5 (Feb '18); $TBD (Feb '19) $5 (Feb '18); $TBD (Feb '19) $5 (Feb '18); $TBD (Feb '19) - Roads Asphalt Asphalt Asphalt Asphalt - Floodplain Zone X Zone X Zone X Zone X - Zoning R-MH R-MH R-MH R-MH - UTILITIES Name Heritage Hills MHC Pecan MHC Pinecrest MHC Pueblo MHC Water/Sewer Electricity Gas Trash Cable Telephone American Water (metered + tenant reimburses) Vectren Energy Booneville Natural Gas Allied Waste Spectrum Vonage Business American Water (metered + tenant reimburses) Vectren Energy Booneville Natural Gas Allied Waste Spectrum Vonage Business Chandler Utilities (metered + tenant reimburses) Vectren Energy Booneville Natural Gas Allied Waste Spectrum Vonage Business Chandler Utilities Vectren Energy Booneville Natural Gas Allied Waste Spectrum Vonage Business FOUR PROPERTY MHC PORTFOLIO 38 TOTAL SITES
PORTFOLIO HIGHLIGHTS INVESTMENT HIGHLIGHTS Value-add opportunity to continue filling sites to increase occupancy as the portfolio is only 58% occupied. There are two ways to add homes: New homes Less than two years ago the previous owner added 2 new homes and all but one is now sold. Used homes Previous owner would not allow manager to acquire used homes. However, there is reportedly a strong secondary market for quality used homes that a new owner could start tapping into. The price point for potential tenants for used homes is in very high demand in these markets and would be a great approach to increase occupancy quickly. All of the communities are on municipal water and sewer with an attractive overall density at 6.3 sites/acre. Extremely rare opportunity to acquire a sizable presence in an MSA of over 119, people with a favorable long-term economic growth outlook. The four assets are all within 15 minutes of each other, allowing one manager to easily run the portfolio. The current manager has been with the communities for over 11 years and is a true asset. Even old homes are well-maintained and clean, which is typically a sign of a strong manager. Portfolio offered significantly below replacement cost. There is a tremendous demand for affordable housing in this housing market. Within a five-mile radius of the properties, the average household income across the portfolio is approximately $93,5 and the average household values are approximately $22,. TOP 1 EVANSVILLE EMPLOYERS INDUSTRY EMPLOYEES Deaconess Hospital Healthcare 6,1 Toyota Motor Manufacturing, Indiana Manufacturing 5,4 St Vincent Hospital Healthcare 3,529 Berry Plastics Manufacturing 2,699 University of Southern Indiana Education 2,521 SKANSKA Construction 1,65 T.J. Maxx Retail 1,52 Alcoa Manufacturing 1,51 Koch-Enterprises Inc Manufacturing 1,2 Vectren Energy 1,2 Source: Economic Development Coalition of Southwest Indiana, Oct 17 Pecan Pinecrest AREA HIGHLIGHTS The communities are ideally situated 15 minutes from Evansville in Warrick County, one of the fastest-growing counties in the state of Indiana. The communities sit near major thoroughfares such as Highway 62, Highway 66, I-69, and I-64, providing easy access to other larger markets such as Nashville (16 miles), St. Louis (18 miles), Louisville (11 miles), Indianapolis (165 miles) and Cincinnati (2 miles). Warrick County boasts a diverse economy and has a strong presence in the healthcare, manufacturing, construction, and retail trade industries. According to Moody s Analytics, job growth in the county will exceed the state and national averages in 218. Payroll employment is rising strongly; year over year growth accelerated to its fastest pace since 214. Toyota has two facilities just north of Evansville that employ thousands of local residents and the company plans to continue expansion in the area. The company recently invested $6 million for additional manufacturing equipment and plant expansions, which will allow the factory to produce 4, more vehicles a year. The project is expected to add 4 jobs when completed in Fall 219. The majority of employees choose to live in and around Evansville. The county has an unbelievable secondary school system and highly-rated medical centers. The area has some of the best schools in the state for their student achievements, teacher ratings and overall quality of education. There are two nationally recognized healthcare systems, Deaconess Gateway Hospital and St. Vincent Epworth Crossing, as well as several others within the Warrick Wellness Trail Medical and Lifestyle Park. The Indiana University School of Medicine plans to open a new campus in downtown Evansville providing enhanced medical training and educational opportunities in the metro area. Once complete, the campus project will house approximately 5 residents from three area universities. Berry Plastics, one of the largest manufacturer employers in the area with over 2,7 employees, is beginning a $7 million plant expansion project, which is expected to add 15 new jobs by 22. Warrick County also has a robust public transportation system with buses running between Boonville, Chandler, and Newburgh every day. Universities within close proximity to the communities include The University of Evansville (2, enrollment), Huntington University (871 students enrolled), and The University of Southern Indiana (11, students enrolled). Outdoor activities are plentiful in the area with several recreational parks and lakes for fishing, hiking, waterskiing and bird watching. FOUR PROPERTY MHC PORTFOLIO 38 TOTAL SITES
PORTFOLIO FINANCIAL ANALYSIS Financial Analysis 216 Actuals 1 217 Actuals 1 Feb '18 T12 Actuals 1 Proforma INCOME 2 Gross Scheduled Rent $716,838 $747,362 $754,485 $1,377,12 3 3 3 4 5 Less: Vacancy 42.37% Less: Employee/Model 3,78 3,84 3,89.22% Less: Bad Debt 897 477.5% Less: Concessions 19,647 28,499 28,556 2.% Total Rental Income $694,113 $714,882 $722,363 55.36% Plus: Trash Income $1 $278 $1 $214 $1 $228 $1 Plus: Water/Sewer Income 486 184,555 57 192,692 518 196,662 522 Plus: Other Income 21 7,8 24 9,58 19 7,262 25 Plus: Late Fee Income 62 23,415 58 22,15 57 21,65 6 Plus: Barns Rental Income 5 2,89 4 1,62 4 1,5 4 Total Other Income 574 218,137 594 225,734 598 227,32 612 Effective Gross Income EXPENSES Repairs & Maintenance $1 $37,93 $85 $32,421 $78 $29,65 $9 Payroll 349 132,675 334 126,915 357 135,672 34 Administrative 116 44,111 147 55,966 152 57,597 145 Marketing 35 1 459 1 459 1 Professional Fees 14 5,22 18 6,915 14 5,288 15 6 Utilities 7 8 per site $912,25 Actuals $949,665 Electricity 22 8,544 2 7,751 2 7,756 21 Water/Sewer 664 252,37 655 249,59 686 26,537 675 Gas 1 521 1 415 2 591 1 Trash 93 35,19 14 39,684 1 37,831 18 Total Variable Expenses $1,359 $516,578 $1,367 $519,585 $1,49 $535,381 $1,396 Taxes 121 46,37 121 46,58 121 46,58 135 Mobile Home Tax 77 Insurance 39 14,86 29 11,147 28 1,724 3 Management Fee 2.86% 26,95 2.89% 27,221 2.91% 27,68 4.% Total Operating Expenses $1,589 $63,647 $1,59 $64,11 $1,631 $619,843 $1,665 Plus: Capital Reserves 5 Total Expenses $1,589 $63,647 $1,59 $64,11 $1,631 $619,843 $1,715 per site $94,616 Actuals per site Actuals per site 583,464 3,84 689 27,542 $762,341 $22 198,473 9,33 22,783 1,669 232,474 $994,815 Proforma $34,2 129,2 55,1 38 5,7 7,984 256,531 427 4,875 $53,396 51,282 11,4 39,793 $632,871 19, $651,871 NET OPERATING INCOME $38,63 $336,65 $329,822 $342,944 Expense Ratio 66.17% 64.21% 65.27% 65.53% UNDERWRITING ASSUMPTIONS 1. Actual numbers based on financials provided by the client (excludes income and expenses related to the park-owned homes). 2. Proforma GSR = $32 avg rent x 38 MH sites x 12 months. 3. Trash, Water/Sewer, and Other Income grown 3% from 217 Actuals. 4. Late Fee income calculated using the avg of 216 and 217 Actuals. 5. Barns Rental Income grown 3% from 217 Actuals. 6. Adjusted Utilities grown 3% from 217 Actuals. 7. Proforma Taxes = 217 mill rates x 218 assessed values grown 1%. 8. Numbers do not reflect actual expense. FOUR PROPERTY MHC PORTFOLIO 38 TOTAL SITES
HERITAGE HILLS MHC SITE PLAN 71 SITES HERITAGE HILLS MHC
PECAN MHC SITE PLAN 56 SITES PECAN MHC
PINECREST MHC SITE PLAN 157 SITES PINECREST MHC
PUEBLO MHC SITE PLAN 96 SITES PUEBLO MHC
PORTFOLIO DEMOGRAPHICS NEWBURGH, IN (HERITAGE HILLS MHC & PECAN MHC) DEMOGRAPHIC INFORMATION 3 MILES 5 MILES 1 MILES 217 Population Estimate 5,612 24,462 97,911 Population Growth 21 217 6.8% 8.% 5.1% 217 Renter Occupied Housing Percentage 13.2% 22.1% 32.1% 217 Owner Occupied Housing Percentage 82.1% 71.5% 6.1% 217 Estimated Average Household Income $91,632 $95,42 $75,33 217 Estimated Average Owner-Occupied Housing Value $232,874 $23,733 $191,521 Source: U.S. Census Bureau Heritage Hills Pecan Pinecrest Pueblo CHANDLER, IN (PINECREST MHC & PUEBLO MHC) DEMOGRAPHIC INFORMATION 3 MILES 5 MILES 1 MILES 217 Population Estimate 8,144 24,591 19,786 Population Growth 21 217 7.9% 7.9% 5.8% 217 Renter Occupied Housing Percentage 16.1% 15.8% 27.2% 217 Owner Occupied Housing Percentage 73.6% 75.8% 66.6% 217 Estimated Average Household Income $86,497 $92,255 $8,675 217 Estimated Average Owner-Occupied Housing Value $214,284 $28,369 $2,959 Source: U.S. Census Bureau FOUR PROPERTY MHC PORTFOLIO 38 TOTAL SITES
PORTFOLIO AREA ATTRACTIONS Evansville Regional Airport 24 MILES PINECREST MHC PUEBLO MHC EVANSVILLE H PECAN H MHC HERITAGE HILLS MHC Evansville Regional Airport Located just 2 minutes from all the communities, Evansville Regional Airport has daily flights to five major cities including Atlanta, Dallas, Detroit, Charlotte and Chicago. Rated as one of the best connected regional airports in the nation. Served by American Airlines, United, Delta and Allegiant. Deaconess Hospital The largest employer in Evansville with over 6, full-time employees. The health system consists of seven hospitals in southern Indiana including Deaconess Midtown Hospital, Deaconess Gateway Hospital, The Women s Hospital, The Heart Hospital, Deaconess Cross Pointe, and HealthSouth Deaconess Rehabilitation Hospital. University of Southern Indiana (USI) Located on a beautiful 1,4-acre campus in Evansville, the university enrolls 11, students in more than 1 areas of study and employs over 2, faculty and staff. USI offers degree programs through the College of Liberal Arts, Romain College of Business, College of Nursing and Health Professionals, and the Pott College of Science, Engineering, and Education. Toyota Motor Manufacturing The second largest employer in Evansville with over 5,4 full-time employees. Located just 3 minutes from the communities. The company recently invested $6 million for additional manufacturing equipment and plant expansions, which will allow the factory to produce 4, more vehicles per year. The project is expected to add 4 jobs when completed in Fall 219. FOUR PROPERTY MHC PORTFOLIO 38 TOTAL SITES
HERITAGE HILLS MHC 66 PECAN MHC 66 STATE ST PINECREST MHC PUEBLO MHC E LN AV LINCO For a video tour, please visit: https://vimeo.com/275282217 PRIMARY CONTACTS Todd Fletcher tfletcher@aranewmark.com 33.26.447 Additional information is available on our website at: http://arausa.listinglab.com/evansvillemhcportfolio! Andrew Shih ashih@aranewmark.com 512.637.1219 PLEASE DO NOT SPEAK WITH TENANTS OR EMPLOYEES Manufactured Housing and RV Park Group 91 S. MoPac Expressway, Barton Oaks Plaza II, Suite 275, Austin, TX 78746 T 512.342.81 www.aranewmark.com This information has been derived from sources deemed reliable. However, it is subject to errors, omissions, price change and/or withdrawal, and no warranty is made as to the accuracy. Further, no warranties or representation shall be made by ARA, A Newmark Company (ARA Newmark) and/or its agents, representatives or affiliates regarding oral statements which have been made in the discussion of the above property. This presentation, prepared by ARA Newmark was sent to the recipient under the assumption that s/ he is a buying principal. Any potential purchaser is advised that s/ he should either have the abstract covering the real estate which is the subject of the contract examined by an attorney of his/her selection, or be furnished a policy of title insurance. Do not contact the Properties.