the-highlands

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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. © 2024 Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Berkadia® and Berkadia Commercial Mortgage® are trademarks of Berkadia Commercial Mortgage LLC. Investment sales and real estate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. Tax credit syndication business is conducted exclusively by Berkadia Affordable Tax Credit Solutions. For state licensing details for the above entities, visit www.berkadia.com/licensing.

Investment Advisors

Debt Advisors

Jason Parr

Senior Managing Director 415 407 2106 jason.parr@berkadia.com CA DRE #01323188

SCOTT MACDONALD

Managing Director 415 310 0487 scott.macdonald@berkadia.comCA DRE # 01422005

John Hansen

Director 415 342 5772 john.hansen@berkadia.comCA DRE #02078357

Brayden Joel

Financial Analyst 503 933 9284 brayden.joel@berkadia.com CA DRE #02204506

Sydney Ladrech

Senior Financial Analyst 916 677 6633 sydney.ladrech@berkadia.comCA DRE #02126658

Clay Akiwenzie

Managing Director 775 447 0595 clay.akiwenzie@berkadia.com CA DRE #01908942

Hank Workman

Associate Director 415 646 7713 hank.workman@berkadia.com CA DRE #02099264

NIKO VRENTAS

Associate Director 816 759 0368 niko.vrentas@berkadia.comBREA #248813

MICHAEL SPERO

Senior Director 913 980 8698 michael.spero@berkadia.comBREA #237575

Substantial Value-Add Upside with Strong Operations

Robust Apartment Fundamentals Fuel Growth

Overland Park’s Most Compelling Offering

Top Place to Live & Raise a Family

Priced Below Replacement Cost

INVESTMENT HIGHLIGHTS

Recent leases on fully renovated units provide a ±20% premium to comparable floorplans in partially renovated and classic condition, providing the opportunity to realize a ±35% return-on-cost by completing interior upgrades on the Property’s remaining 440 units, or 98% of the total unit count. With ±$2M in capital improvements since 2019, 96% average historical occupancy, and multiple pathways to revenue growth, The Highlands delivers an exceptionally secure investment with immediate market share at a ±40% discount to replacement cost.

Overland Park is projected to add 12,000 new residents over the next five years while only two apartment projects are under construction, further stimulating demand for the city’s existing multifamily inventory and translating into 95% projected average occupancy during this time. Local home prices have climbed nearly 25% over the past three years to $445K, presenting exceptionally high barriers to homeownership and average monthly costs that command an ±80% premium to The Highlands renovated market rents. Over the next five years Yardi projects rents will grow 5% annually on average as Overland Park welcomes an increasingly affluent tenant base with the average household earning $150K per year.

Perennially ranked among the top U.S. cities to raise a family, Overland Park offers the ideal mix of nationally ranked public schools, access to multiple employment hubs, safe neighborhoods, scenic recreation, and a vibrant, walkable Downtown District. Strategically positioned adjacent to Interstate 35 at the city’s northern border, within a five-minute drive to Advent Health Shawnee and 15-minute drive to KU Medical Center, residents of The Highlands benefit from commutability to over 122,000 high-paying jobs in Kansas City’s financial district in addition to ±8,000 durable healthcare positions. The Property’s residents also have direct access to the thriving job market in South Johnson County, highly regarded as one of the MSA’s engines for economic growth and home to several noteworthy employers including Panasonic, T-Mobile, Honeywell, Sprint, Garmin, Farmers Insurance, John Deere, AMC Theaters, and Quest Diagnostics.

The Highlands stands alone as Overland Park’s most differentiated multifamily community, by combining the operational benefits as one of the region’s largest properties, with a low-density campus, comprehensive modern amenities, uniquely large floorplans, and unmatched connectivity to the urban core. The Property delivers an ideal renter experience complete with spacious residences, a newly renovated clubhouse with kitchen, brand new outdoor kitchen and grills, two pools, a fully-equipped fitness center with yoga and spin room, a tennis court, half basketball court, pickleball court, and detached garage parking. As the most expansive property within this highly sought-after inner-ring submarket, The Highlands stands alone by combining upscale, amenitized suburban living with easy access to Downtown Kansas City while also providing a ±$170, or 10%, post-renovation rent discount to surrounding new construction.

The Opportunity

Berkadia is pleased to exclusively present the opportunity to acquire The Highlands (or the “Property”), a modern 448-unit multifamily community with growing cash flow and additional value-add upside of ±$250 per unit. Situated in one of the nation’s top places to live and raise a family, the Property is one of the most distinctive assets within Overland Park’s inner-ring with unmatched access to the region’s growing base of world-class employers, vibrant social amenities, and nationally ranked public schools. The Highland provides the opportunity to capture ±45% income upside by completing renovations on 98% of unit interiors and realizing the submarket’s 5% annual rent growth projected over the next five years – making the Property a low-risk investment with multiple paths to upside while offered at a ±40% discount to replacement cost.

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THE HIGHLANDS

The Kansas City, MO–KS, Metropolitan Statistical Area (MSA) is centrally locatedto all U.S. markets and has a good business climate composed of diverse industry segments. The region was Initially developed as an agricultural and industrial center, but Greater Kansas City has since transformed into a top destination for start-ups, entrepreneurs, and large businesses, including two Fortune 500 company headquarters. Often referred to as the "City of Fountains" and "Paris of the Plains," Kansas City is a true destination town with a rich history. Also known for its contributions to blues, jazz, and barbecue, the city is at the epicenter of entertainment and the metro's cultural activity. For the past 20 years, Greater Kansas City's southwest side has experienced expansive growth, like in Overland Park, Lenexa, and Shawnee. Beyond the metro's urban core, residents have access to an affordable cost of living and extensive highway systems that foster convenient commutes. The region's second-largest city, Overland Park, is among the hottest job markets and boasts a friendly atmosphere.

Kansas City Area Overview

LOCATION

To be determined by market

To be announced

Free & clear of existing financing

10020 W 80th Street, Overland Park, KS

Johnson

2004/2006

±43.89

448

±1,911,849

Price

Bid Deadline

Terms of Sale

Address

County

Year Completed

Site Size Acres

Site Size Square Feet

Total Residential Units

±956

Average Unit SF

±428,200

Net Rentable Square Feet

$1,430

Average In-Place Rent

$1.50

Average In-Place Rent/SF

96.4%

Occupancy

INVESTMENT SUMMARY

THE HIGHLANDS

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