$750000

North End Hotel
  • Units: 27
  • Cap Rate: 10.57 Percent
  • Price Paying: $98.88 sqft
  • Price Per Unit: $27,778
  • Property Type: Multi Family
  • Gross Rent Multiplier: 6.18
  • Year Built: 1913
  • Monthly Income Per Unit: $374.76
  • Expense to Income Ratio: 34.73 Percent
  • Average Square Feet: 281
  • Debt Service Coverage: 2.05
  • Cash Flow: $40,615
  • ROI Year One: 21.66%
  • Listing Agent: Al Beachum, J.D.
  • Property Features: -
  • Interior Features: -
  • Exterior Features: -

LOCATION:
Lansing is the core city of the Lansing Metropolitan Statistical Area, which includes over 464,000 residents total. Home to approximately 115,000 residents, Lansing is the State Capitol of Michigan, as well as the business, cultural, and educational center of Mid-Michigan. Strategically located along I-96, Lansing is positioned halfway between Michigan’s two largest cities-Detroit and Grand Rapids. Several interstates and highways converge on this region, including I-96, I-496, I-69, M-43 and US-127. This excellent location facilitates commutes and enables convenient access to all of Mid-Michigan for residents and businesses alike.
Lansing, Michigan’s 5th largest city, is a diverse community that offers residents a dynamic living environment with mix of urban conveniences and suburban comforts and tranquility. The local economy is equally well-diversified, with economic anchors such as the State Government (15,500 employees); Higher Education- Michigan State University (12,000 employees), Thomas M. Cooley Law School and Lansing Community College; Industry- General Motors (11,000 employees) and Healthcare- Sparrow Health System (6,000 employees) and Ingham Regional Medical Center (3,000 employees). Several national Insurance Companies are headquartered in Lansing- names such as Accident Fund, Auto-Owners, and Jackson National were all founded here. The current unemployment rate in Lansing is an impressive 4.2%, slightly better than the current state unemployment rate of 4.7%. This represents a significant decline from Lansing’s previous high of 10.9% in 2009, demonstrating the resurgence of the local economy.
Lansing is presently experiencing exciting revitalizations of the downtown districts, REO Town and Old Town. The city has transformed in recent years with its vision for the future being a revitalized downtown, with a $30M new State Police Headquarters, $20M Accident Fund headquarters, and $25M redevelopment slated for the historic Knapp’s Building, Lansing is an exciting place to be these days. A casino development is also currently pending. Additional positive development includes the completion of the GM Delta Township Assembly Plant in 2006, which runs three shifts and provides more than 4,150 jobs.
Thomas M. Cooley Law School is located in downtown Lansing, and is the largest Law School in the country. In neighboring East Lansing is Michigan State University, a Big Ten school with the largest enrollment in the state at approximately 46,000 students, with two Medical Schools,
North End Hotel is located on E. Grand River Ave at the intersection of E. Grand River Ave and Center Street in Old Town, which is in the northern end of Lansing, MI. Old Town is Lansing’s original downtown and boutique district overlooking the Grand River. The neighborhood’s beautiful Victorian buildings are filled with unique galleries, tasty eateries, quaint boutiques, creative businesses, specialty shops, nightclubs and more. Voted one of the top places to bring visitors and the winner of IKEA’s Main Street Makeover, Old Town is a vibrant urban neighborhood with a small town feel. This arts district hosts festivals, gallery walks and farmers markets throughout the year. This is the place for exceptional customer service and that little something extra. Listed on the National Register of Historic Places as the North Lansing Historic Commercial District, the district was established in the mid-19th century. Old Town hosts a number of annual cultural events, including: Old Town BluesFest: a two-day free blues music festival and Lansing JazzFest: a two-day free jazz music festival. Because of this appeal Old Town has become a redevelopment hotspot and present unique possibilities for the North End Hotel.
As a result of the North End Hotel exceptional location residents have an abundance of employment, higher education, dining, shopping and entertainment options surrounding the community. Most notably is the property’s proximity to Lansing Community College (1 mile) and Michigan State University (3½ miles), and countless unique restaurants, one of kind boutiques, and specialty shops of Old Town.
PROPERTY:
North End Hotel is a 3-story building located at 401-407 E Grand River Ave. The building was constructed in 1913 with a brick exterior and full basement is approximately 8,555 ft.2. The property contains a 3,049 ft.2 first floor retail space and twenty-seven single rooms located on the second and third floors, with each of the residential floors have common bathrooms and showers. The property has a live-in manager providing 24-hour on-site management.

The first floor retail suite is leased to Thailand Restaurant which is responsible for their utilities as well as their pro rata share of property taxes, building insurance and common area maintenance expenses (NNN). The utilities for the residential units are the landlord’s responsibility.
FINANCIAL:
From an underwriting standpoint, our Pro Forma is based on actual 2016 Operating Expenses, and we have also included a professional management fee, a Replacement for Reserve and adjusted taxes to the SEV. Income was projected with the use of average rent. We have also included a vacancy and bad debt factor that is consistent with current property trends. North End Hotel is being offered to the market as new debt opportunity, allowing for an operator to lock in a 10-year deal before the all-time low interest rates begin to rise. Based on the asking price of $750,000 the North End Hotel offering represents a compelling 10.15% cap rate on Pro Forma NOI of $76,094 and an 8.8% cap rate based on actual 2016 NOI of $66,579.30.
North End Hotel represents an asset with considerable upside potential that can be acquired at attractive pricing and provides handsome & steady returns to a multifamily investor for many years to come. Please contact IPO to arrange a confidential tour before this opportunity is gone.

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    Income Property Organization offers customized brokerage services that are designed to meet the specific needs of a wide range of clients -- private owners as well as institutional investors -- who want to buy or sell income property.
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    Income Property Organization
    6421 Inkster Rd., Suite 200
    Bloomfield Hills, MI 48301
    Telephone (248) 932-0300
    Fax (248) 932-0301