Boulevard Terrace is comprised of one 12-unit townhome-style building with ample street parking and off-street parking located behind the building. The property is located at the corner of 2nd Avenue and Merton. As a result of this excellent location residents enjoy easy access to Woodward Avenue and are in close proximity to both downtown Detroit, Ferndale and Royal Oak, all major entertainment and employment destinations in the area.
With respect to financial performance, the property has historically performed exceptionally well and is continuing to trend in a positive direction with respect to occupancy and rental rates. Currently Boulevard Terrace is operating at 100% occupancy and has maintained this level (outside of brief periods of turnover) for many years. Ownership has taken considerable steps to ensure the long-term viability of this asset and in recent years has completed numerous capital improvements including: new roofs (2016), new siding, gutters & trim, updated kitchens, 7 new gas-forced air furnaces and the refinishing of all hardwood floors throughout.
Per a detailed review of the surrounding rental market it has come to our attention that the rents at Boulevard Terrace, which average $640, or 47¢ per square foot for a two-bedroom unit and $675, or 41¢ per square foot for a three-bedroom unit, are considerably below market. Current Ownership has maintained these below market rental rates to ensure limited turnover; however, this provides a new owner an opportunity to greatly improve the assets financial position by increasing rents to market levels and possibly even instituting a water surcharge. This conclusion is fortified by the practical observation that anytime an apartment community is near or at 100% occupancy it is a market signal that the rental rates can be increased. Please see our Rent Comparable analysis found on page 18 for more information.
As for the property itself, Boulevard Terrace was built in 1945 and is comprised of 10, large two-bedroom townhomes (approximately 1,350ft.2) and 2, massive 1,650ft.2 three-bedroom townhomes. Tenants are responsible for their own utilities, which includes gas for both heat and hot-water, and in-unit electric.