SAVOY PARK APARTMENTS Savills Studley, Inc. (“Savills”) has been retained by SLM Savoy Park I, LLC (the “Owner”), as exclusive financial advisor for the recapitalization of Savoy Park Apartments, a 1,790 unit apartment community, consisting of seven, 16 story buildings located on a landscaped 10.5 acre gated site bounded by Fifth Avenue and Lenox Avenue between 139th Street and 142nd Street in Manhattan, New York (the “Property”, the “Portfolio or “Savoy Park”). Acquired in June 2012 by affiliates L+M Development Partners (“L+M”) and Savanna (“Savanna”), (jointly, the “Sponsor” or “Sponsors”), the Property has undergone a major capital improvement/repositioning program and been managed to high institutional standards. Savoy Park represents an extremely rare opportunity to invest in a large, irreplaceable, institutional quality Manhattan apartment community with secure cash flow and significant value-add upside. 1,790 Unit Manhattan Apartment Investment Opportunity
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SAVOY PARK APARTMENTSSavills Studley, Inc. (“Savills”) has been retained by SLM Savoy Park I, LLC (the “Owner”), as exclusive financial advisor for therecapitalization of Savoy Park Apartments, a 1,790 unit apartment community, consisting of seven, 16 story buildings locatedon a landscaped 10.5 acre gated site bounded by Fifth Avenue and Lenox Avenue between 139th Street and 142nd Street inManhattan, New York (the “Property”, the “Portfolio or “Savoy Park”).
Acquired in June 2012 by affiliates L+M Development Partners (“L+M”) and Savanna (“Savanna”), (jointly, the “Sponsor” or“Sponsors”), the Property has undergone a major capital improvement/repositioning program and been managed to highinstitutional standards.
Savoy Park represents an extremely rare opportunity to invest in a large, irreplaceable, institutional quality Manhattan apartmentcommunity with secure cash flow and significant value-add upside.
1,790 Unit ManhattanApartment Investment Opportunity
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2 | INVESTMENT SUMMARY
INVESTMENT HIGHLIGHTS
Nation’s Strongest Apartment Market: New York City apartment fundamentals are thestrongest in the nation. With strong demand and verylimited new supply, rental growth has averaged 4% perannum over the past 20 years and current vacancy isapproximately 2.7%. The New York housing shortageremains severe and is expected to become worse overthe next 10 years, with an aggregate projected shortfallof nearly 150,000 units. Given high land and construc-tion costs, the shortage of high quality workforce rentalhousing alternatives is acute with little or no vacancy.
Best-in-Class Institutional Sponsorship: The Sponsor has a long and proven institutional trackrecord for the ownership, management and develop-ment of rent stabilized, mixed income and market-rateapartment properties. Jointly, the Sponsors have cre-ated or owned over 18,000 high-quality residentialunits in the New York region and have individually de-veloped strong reputations for their expertise and in-tegrity. With fully integrated investment, development,construction and management capabilities and aproven track record in the New York City multifamilyhousing sector, the Sponsors are recognized as “Best-in-Class”, institutional owner/operators.
Major Capital Expenditures Completed: Over the past 9 years, more than $50 million of majorcapital expenditures have been completed at SavoyPark including: Unit Renovations ($34.7MM), FaçadeWork ($6.3MM), Boiler Upgrades ($2.5MM), Electri-cal/Sub-metering ($1.3MM), Security Upgrades($1.9MM), Office Improvements ($1.1MM), PlumbingRisers/Valves ($1.0MM), Roof Fans/Intercoms/HVACComputer/Miscellaneous Items ($3.1MM), and SiteWork ($500k). In addition, windows at the Propertywere also replaced in the past 12 years. These ex-tensive capital improvements generate significantoperating and energy expense savings and positionthe Property to compete effectively in the market.The improvements also dramatically reduce capitalrisk and requirements going forward, allowing Prop-erty ownership to focus on income producing apart-ment renovations.
Proven Value Enhancement Plan: Since purchasing the Property in June2012, the Sponsor has executed a suc-cessful value-add plan which includedmajor building improvements and full ren-ovation of units as they become availablethrough normal turnover. To date, theSponsor has renovated 294 units at an av-erage cost of $38,278/unit, generating anaverage 24% return-on-cost and monthlyrental increase of $750/unit. In addition, anew 40-year tax abatement agreement,improved operating efficiencies and en-ergy savings have also significantly in-creased cash flow at the Property. Inaggregate, the Sponsor has increased ef-fective gross income at the Property byapproximately 23.8% since acquisition,generating a compounded annual growthrate of approximately 6.9%. These resultsprove out operating efficiencies and futureupside from renovating remaining units asthey become available.
Dependable CF & Significant Upside: With major capital improvements com-pleted and institutional management inplace, the Property provides highly de-pendable cash flow with exceptional valuecreation potential. With 53.6% of the Prop-erty’s units renovated to-date, and an av-erage $912/month estimated increase forrenovated units, renovating the 800 re-maining units would generate over $9.0million of additional annual Gross PotentialRent.
SAVOY PARK | NEW YORK CITY | 3
Highly Attractive Basis vs. Replacement Cost: Assets of Savoy Park’s size and scale rarely be-come available and the Property offers an oppor-tunity to invest in institutional quality Manhattanworkforce housing at well below 50% of currentreplacement cost. Given extremely high land andconstruction costs, the Property is positioned tobenefit from strong ongoing rental growth as de-mand continues to significantly outpace the lim-ited supply of high quality housing alternativesfor middle-income New Yorkers.
Shelter Rent Tax Abatement: Current ownership entered the Property into anArticle XI Regulatory Agreement to provideworkforce housing which provides a tax abate-ment in the form of a Shelter Rent Tax, savingthe Property approximately $2.4 million of an-nual real estate tax expense.
