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Berkadia®, a joint venture of Berkshire Hathaway and Jefferies Financial Group, is an industry leading commercial real estate company providing comprehensive capital solutions and investment sales advisory and research services for multifamily and commercial properties. Berkadia® is amongst the largest, highest rated and most respected primary, master and special servicers in the industry. This advertisement is not intended to solicit commercial mortgage company business in Nevada.
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Justin Chambers
Director
512.969.6838 justin.chambers@berkadia.com
Adam Sumrall
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512.960.2674 adam.sumrall@berkadia.com
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Managing Director
512.226.8711 justin.cole@berkadia.com
Kelly Witherspoon
Senior Managing Director
512.226.8706 kelly.witherspoon@berkadia.com
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THE OFFERING
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Berkadia's Multifamily Investment Advisory Team is excited to announce the exclusive listing of Summer House, a 136-unit boutique apartment community located in Corpus Christi's South Side submarket. Built in 1983, Summer House offers condo-quality features including private garages for residents and in-unit washer-dryers, which is rare for its age. The property is nestled among mature oak trees on a quiet residential street near Holly Road and Staples Street, providing a peaceful residential setting with easy access to Corpus Christi's main commercial corridor.
With a history of attracting and retaining high-quality residents, Summer House presents an excellent investment opportunity. The property has consistently been a top performer and has set the benchmark for Class B rents in the Corpus Christi market, often exceeding rents of nearby Class A properties. Its well-maintained history and prime location offer the potential for consistent cash flow, thanks to the strong demand for housing in the area, proximity to major thoroughfares, employment opportunities, and lifestyle amenities.
ALL CASH TRANSACTION
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Prospective investors can take advantage of the attractive financing options that exist in the marketplace today. With the combination of current market rate interest rates and an attractive in-place cap rate, Summer House presents an investor with a healthy cash-on-cash yield for a well-located, well-maintained apartment community.
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PORT OF CORPUS CHRISTI CONTINUES TO SET NEW TONNAGE RECORDS
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The Port of Corpus Christi, in operation since 1926, has become the nation’s leading exporter of crude oil since Congress lifted the ban on oil exports in 2015, and continues to capitalize on the pipeline infrastructure coming from the notable shale basins. Operating as the nation’s largest port in total revenue tonnage, the Port of Corpus Christi ended 2023 with customers moving more than 203 million tons of goods through the Corpus Christi Ship Channel, which was an 8.1% increase from last year. The new record can be attributed to a jump in crude oil exports to over 126 million tons in 2023, a 12.5% increase compared to 2022. The Port of Corpus Christi also saw a nearly 13.5% increase in agriculture commodities to a little over 2.2 million tons, as well as a slight increase in refined products to nearly 43 million tons. A record volume of liquified natural gas (LNG) totaling 16.3 million tons moved through the Port of Corpus Christi in 2023.
The Port of Corpus Christi customers moved 51.8 million tons through the gateway during the 4Q 2023, a 4.4% increase from the same period in 2022. The leading commodities during 4Q 2023 were crude oil, refined products, and LNG. A record volume of crude oil totaling 12.2 million tons moved through the waterway in December 2023, 10.1% higher than the prior record set in September 2023.
$17.0 billion in economic activity statewide
Generates $19.9 billion in gross domestic product
Supports 131,600 direct and indirect jobs across Texas
MAJOR CAPITAL INVESTMENT LEADS TO GROWTH IN CORPUS CHRISTI MSA
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The Corpus Christi MSA’s continues to grow at a rapid pace with the population projected to increase 3% from 2023 to 2028 and median family income increasing 10.8% from 2023 to 2028 to $69,075. Additionally, the population within a three-mile radius of Summer House is forecast to grow 5.1% over the next five years to over 134,652 residents, nearly two times faster than the projected metro wide growth rate of 3.0%. Furthermore, Corpus Christi was rated by Lantern by SoFi as the number one best city to start a business in the U.S. Smart Asset ranks Corpus Christi 25th in the cities with best work-live balance survey. Ten million tourists visited the city in FY2021-2022, spending more than $1.5 billion in the local economy.
Although tourism has always played a major role in the local economy, many other sectors are experiencing growth which is helping to further diversify the metro area and insulate the coastal region against unhealthy exposure to one sector. The energy, education, medical, and shipping sectors have seen $52B in regional investment throughout the Corpus Christi MSA in recent years. Projects such as the $809 million Harbor Bridge replacement and the $681 million Port of Corpus Christi improvement project, both with expected completions in 2025, are paving the way for the Port of Corpus Christi to continue to be the nation’s largest exporter of oil. The momentum at the Port has been staggering thanks in part to Port related investments such as Cheniere Energy’s $13 billion liquefaction plant, CC Polymers’ $1.3 billion plant, TPCO’s $1.3 billion steel pipe mill, and Exxon/SABIC’s $10+ billion facility. More recently, Steel Dynamics $1.9B capital investment in Sinton and Tesla’s in-house, >$1B lithium refinery underway in Robstown are further evidence of confidence in the Corpus Christi economy.
RESILIENT HOUSING MARKET FUNDAMENTALS INCENTIVIZES RENTING WITH FURTHER UPSIDE
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According to Axiometrics, the Corpus Christi apartment market remains strong with an optimistic outlook. Occupancy is estimated to continue to trend positively in 2024 throughout 2027 with an overall average of 93.5%. Additionally, effective rent growth is estimated to average 2.475% from 2024 throughout 2027, which is positive for the overall fundamentals of Summer House Apartments.
The median residential housing price in South Side Corpus Christi in January 2024 was $295,000, which represents a 4.1% increase as compared to January 2023. Active listings remain near 352 total listings and the market has 3.1 months of inventory. Overall, the PITI payments continue to incentivize renting as the estimated PITI payment of the median residential home near the Property would equate to a monthly PITI payment of $2,415/month* which equates to 174% of the overall Summer House market rent of $1,388/month.
PREFERRED SOUTH SIDE LOCATION WITH EXCELLENT ACCESS TO EMPLOYMENT AND RETAIL
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Summer House is situated in the heart of Corpus Christi's south side and offers unmatched accessibility to the entire metro given its proximity to South Padre Island Drive. The Property’s proximity to such a large concentration of employers and retailers is not only attractive to current residents but provides a significant employment base that will continue to drive demand for multifamily housing in the immediate area. Uniquely positioned just off Staples Street, Summer House is within minutes of many of Corpus Christi's well-known employment drivers including CHRISTUS Spohn Hospital - South, Corpus Christi Medical Center - Bay Area, Texas A&M University - Corpus Christi, NAS – Corpus Christi, and Corpus Christi Army Depot, among others. Additionally, the Port of Corpus Christi, the Corpus Christi CBD, and the Corpus Christi International Airport are roughly 12 miles from Summer House via accessible connections off South Padre Island Drive.
Summer House also offers residents extremely quick access to the city's premier retail corridor located along South Padre Island Drive. Notably, La Palmera Mall, Moore Plaza, Sunrise Mall and Gulfway Shopping Center are all located roughly one mile away from the property at Staples Street and SPID. Additionally, several eateries and neighborhood conveniences including Andy's Tavern, Tokyo Hibachi Steak House, The VINE Juice Company, Wienerschnitzel, Authentic New York Pizza, Pooch Pad and CARisma Car Wash are within walking distance of the community.
SUMMER HOUSE RENTAL RATES OUTPERFORMING NEARBY CLASS A COMPS
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Summer House has consistently demonstrated its ability to command premium rents that compete directly with Class A communities, thanks to its unique and timeless appeal. In December 2023, market rents at the property reached $1,388 per unit or $1.69 per square foot (PSF). When compared to Class A properties in the preferred south side area, Summer House market rents ranks just above Reserve at Saratoga ($1,327/unit) and Retreat by Watermark ($1,351/unit) and is just below Townhomes at Twenty01 ($1,734/unit) and Sage Corpus Christi ($1,515/unit). Overall, Summer House achieves impressive rents as compared to the competitive set and has consistently outperformed.
PROVEN VALUE-ADD OPPORTUNITY WITH ELEVATED INTERIOR POTENTIAL
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The unit interior profiles at Summerhouse have been elevated to new heights by current ownership as 81 out of 136 units (59.6%) have been dynamically renovated with expansive granite peninsula-style countertops and the removal the upper cabinets making for a more open, modern look. Additionally, the units include GE stainless steel/black appliances, new cabinet fronts with modern pulls, modern tile backsplashes, gooseneck faucets, brushed nickel hardware, upgraded LED lighting fixtures, vinyl plank flooring throughout, and curved tub curtain rods. They have been able to achieve a $100/unit per month market rent premium.
Furthermore, potential value-add improvements may include implementing private patio dog yards on ground floor units, upgrading the leasing office to a more contemporary design, and modernizing the exterior amenity offering including the pool and surrounding area along with the outdoor picnic/barbeque areas.
CONDO QUALITY, GARDEN HOME DESIGN WITH PRIVATE GARAGES FOR EVERY UNIT
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Summer House is the only one of its kind on the south side, helping differentiate itself from other similar vintage communities, which feature traditional garden-style, surface parked site plans often with detached garages featured on perimeter boundary lines. Originally built in 1983 to condo specs, Summer House features a two-story, garden home design with private garages for every unit. The combination of these inherent characteristics has provided a noticeable competitive advantage and a stabilizing effect on operating performance.
*Assumes a 10% down payment, 7.0% Fixed Interest Rate, 30-year amortization, $1,500/year insurance policy, and a 2.13% Mill Rate
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Cameron Hart
Senior Director512.226.8708
cameron.hart@berkadia.com
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