The MARK

1115 E. Lemon St. • Tempe, AZ 85281

Total Offering Price $22,128,000

Anticipated Investor Equity $7,378,000

  • Improvement Reserves $1,750,000
  • Anticipated Loan Amount $14,750,000
  • Anticipated Loan-to-Value 66.66%
  • Minimum Investment $50,000

The Mark is a 161-unit student housing property located less than two blocks from Arizona State University. Originally built in 1970, the Mark recently underwent a dramatic $5 million renovation in 2014.

1115 E. Lemon St. • Tempe, AZ

New upgrades include modern style cabinetry, polished concrete floors, open and modern kitchen spacing with quartz countertops, stainless steel appliances, accent backsplash, recessed lighting and modern trimming, among other design features. 

Targeted Benefits

  • 7% 1st Year Cash-on-Cash Return (Paid Monthly)
  • True Walking Distance to Camp us: Less than 2 Blocks from ASU
  • 92% Current Occupancy
  • Value-add: Ov er $1.6M Planned for Up grades
  • ASU Current Enrollment: Ov er 70,000 Students

property Profile

  • Location: 2 blocks from ASU campus
  • Year Built: 1970, Over $5M spent in 2014 renovations
  • Number of Units: 161 Units
  •  Number of Beds: 229
  • Total Rentable SF : 109,000
  • Average SF Per Unit: 678
  • Average Rent Per Unit: $675 per month
  • Parking: 265 Spaces

Target Strategy

Given the strength of the ASU market, ASU’s historical enrollment and economic stability, the property’s stellar location, value pricing and unique brand, this investment opportunity can potentially offer a balance of stable occupancy, monthly cash flow and tax shelter efficiency with tremendous upside potential which Nelson Brothers intends to execute and implement on the value-added renovations.

Loca tion

Nelson Brothers believes the Mark boasts a unique “A” location within 1.5 blocks to Arizona State University. Not only is the property within true walking distance to campus, it is also located near the heart of Tempe, with close and convenient proximity to restaurants, convenience stores, the Metro Light Rail, a 10 to 15 minute drive from the Sky Harbor airport, downtown Phoenix and upscale Scottsdale.

Value-Add Strategy

While the sellers have placed over $5 million in renovations and have created a premium student housing property, Nelson Brothers understands that many critical value-added opportunities remain. The goal is to leverage the property’s close proximity to campus, the innovative design, high-end amenity set and value pricing to maintain high occupancy and healthy cash flow. From there, Nelson Brothers plans to set aside over $1.64 million in renovation reserves to further enhance the re-branding strategy and complement the property’s appeal and differentiation. Central to this strategy is making further improvements to the amenities, common areas, unit interiors and floor plans in an attempt to optimize The Mark’s market positioning and its appeal as an innovative, modern and luxury student housing destination.

Specifically, Nelson Brothers plans on upgrading the sun deck, the pool area and other common areas that are extremely important to the Tempe market, which in their current position is outdated and inferior to the more competitive offerings. The strategy is to offer a cutting edge, higher end and more appealing lifestyle to today’s more demanding students. Further, Nelson Brothers plans to add accent colors, additional furnishings, washer and dryer sets, and other key modest and inexpensive improvements that help complement the recent work that has been done, to help fill in the gaps in the seller’s strategic design and ultimately finalize the Mark’s transition to an avant-garde property.

Student Housing

Nelson Brothers believes that students will pursue degrees from major universities regardless of the economic climate. The company’s strategy is based upon that belief and contends that well-positioned properties can stay well-occupied and profitable even during an economic downturn. For investors, the target of this strategy is to help provide stable cash flow and diversification to assets that may be less correlated to the economy.

Loan Details

Acquisition and refurbishment loan. Non-recourse. 2 years with 2 one-year extensions. 615 plus libor. Interest only. 1 point origination fee. TIC structure.

 

Arizona State University

  •  Arizona Residents: 49,940 60%
  • Non-Residents : 33,361 40%
  • Fall 2014-15 Enrollment Stats:
    Undergraduate: 67,507
    Graduate: 15,794
  • Average High School GPA 2014-15 Freshmen: 3.41

ABOUT Nelson Brothers

16B Journey | Aliso Viejo, CA 92656 (800) 580-1031

Current Management Portfolio At-A-Glance:

Founded in 2007, Nelson Brothers specializes in what the firm considers to be well-positioned student housing properties. Headquartered in Orange County, CA, Nelson Brothers manages over $500 million in real estate with more than 100 employees.