The Property

• BLVD West is a fully stabilized, 144-unit apartment community located in the desirable city of Lansing, Michigan. This asset features 40 one-bedroom, one-bath units (789 sq. ft.) 68 two-bedroom, two-bath units (1,116 sq. ft.), 32 three-bedroom, two-bath units (1,182 sq. ft.), and 8 four-bedroom, three-bath units (1,405 sq. ft.). The property was built in 2004 and has 320 off street dedicated parking spaces for tenants. The property is 98% occupied, generating a gross monthly income of over $259,373.
• The property has incredible amenities such as stainless steel appliances, in home washer in dryers, spacious walk in closets, wide plant vinyl flooring, and central air conditioning. Outside of the units, the community consists of a swimming pool with an expansive sun deck, picnic and hammock area, co-working space, BBQ grills, clubhouse with great room, and a 24 hour fitness center. Several employers are within a very short drive of the community such as Michigan State University, Sparrow Health, General Motors, McLaren Hospital, and Board of Water and light.

Value

• What makes this property attractive is the in-place assumable debt. There is a $17,767,000 loan on the property that has a fixed rate of 3.59% through 2036. The loan is interest only until 2028, and them amortizes on a 30 year basis. This low rate loan enables the buyer to produce a market rate cash on cash at acquisition, with the ability to grow through organic rental increases.
• The best sales comparable is a property that sold in December of 2023, Hunters Ridge. The sale was almost identical to BLVD, built in 2004 in a B type area, 10 minute drive to Lansing. The deal traded for $202k per door (5.85% CAP rate), with 3.3% assumable debt. The debt was 65% LTV, with an average rent of $1,772. The current average rent at BLVD is $1,571, and at a the price of $32MM that is about 55% LTV. BLVD does have more 3 and 4 bedroom units than Hunters Ridge, so the buyer will have room to grow rents in that aspect. $222,222 per door is higher than what properties have traded for, but the 6.15% CAP rate is in line with what the market can bear, considering the low interest rate assumable debt.
• Given the current NOI and the recent sale comp of Hunters Ridge, GD has determined a sale price between $30MM and $32MM which is inclusive of assuming the existing loan.