Evaluating Semis and a 6Plex

Note: Addresses have been left out. This communication is strictly for educational purposes

Here are the answers:

1. Value of Semi’s: $1,050,000

2. Value of Sixplex: $3,100,000

Note: I’m trying to be SHARP with values to set expectations. It’s possible to get a little more depending on the quality of finishes, exact state of the market when these projects would hit the market, and the active comparables or update values on sold comparables at that time. 

Here is the work (if you want to see it)(all supporting material attached)

Semi Detached

1. Sold Comparables

Comparable 1 is 2100sf. 2021 Build in Glabar Park Sold July 14th 2023. 442/sf so comparable @ $1,139M, however that’s in Glabar Park ( less 100k), and without in-law suite (add 50k) , Comparable @ $1,089M

Comparable 2. 3 Bed Semi, 2019 Build, unknown SF and in Queensway Terrace North(QTR) (South of Lincoln Fields) Sold June 2023 for 950K. Fisher is newer w/ in law suite ( Add 100K), Comparable @ $1,050M

Comparable 3. 3 bed semi w/in law suite, 2022 Build in Queensway Terrace North (QTR), Sold Sept 2022 for $1,050M. Less approx 25K for time difference (stats show 2.5% decrease). However add back 25K for newer build, comparable @ approx $1,050M. Best Comparable

2. Active Listings

Comparables 4 and 5. New Semis w/in law suites, in QTR. No SF disclosed, likely haven’t sold because of style. Listed at 1M. Worth??

Comparable 6. Exact same as the sale at Comparable 3which sold for $1,050M. Listed at $1,074M. 

Note: Subject assumed to have rooftop balcony as pre original plans, however the value there is offset by the main street (others were on quieter streets). Also, the ‘Buyer’ I spoke to had the opinion that a semi here wouldn’t sell for over 1M (for whatever that’s worth – not much).

SIXPLEX

1. CBRE 2023 Q2 Reports for Multifamily Low Rise, Class A from 4.1 to 4.25 Cap. Assuming 20% TOE, 180K GOI becomes 144K NOI. 4.25 Cap is 3.51M, 4.1 Cap is 3.388M. Personally I always find these reports a little too aggressive for the market compared to the comparables – as seen below.

2. Sold Comparable @27 Monk St. Honestly? A steal of a deal. 7 units in a GREAT location (Glebe – 100m from TD Place!) for 3.4M, TOE 13.4% ADD 5% for Management = 18.4%. Adjusted NOI @ 162,057K.  W/ SP@ 3.4M, Cap = 4.76. This is the Glebe, so if Cap was 5% on Fisher w/projected income of 144K = 2.88M. At list price of 3.75M Monk would have been a 4.3 cap, which would comp us at 3.348M, but it didn’t… but again – this place sold for a steal. 

3. By the reports, and by what Monk SHOULD have sold for, a 6 unit on Fisher should be worth approximately 3.34M, however the actual Sale Price of Monk being 3.4M for 7 units in the Glebe puts a BIG damper on those plans. 3M seems more appropriate. This property sold in Nov 2022, so I’m hoping the rising interest rates/ cost of borrowing have caused upward pressure on rents – meaning you can get the 2500/month or maybe a little more on the 2 bed units and carry the value over 3M. Perhaps I can add 100K for presumed parking @ Fisher and bump the value to 3.1M. 

P.S. This is what a CBRE Cap Rate Report looks like. We use them to apply Cap Rates to different types of investments.