FOR SALE, The Dorchester House Apartments, Lincoln City, Oregon: $4,400,000.
The Dorchester House Apartments is a one of a kind investment opportunity, a turnkey apartment building perfectly located in the heart of Lincoln City, just blocks from North Beach and the Pacific Ocean. The property consists of 69 residential apartment units, plus a large office which potentially could be modified to create an additional unit, while maintaining the small office.
Listed on the National Register of Historic Places, the property was originally completed and opened for business in 1935, with a major addition in 1984. The Dorchester House features large common areas, including a library, commercial kitchen and private courtyard on a 44,716 square foot lot.
Here is a gallery of the common areas:
The Dorchester House is a 58 years of age and older community, and is not an assisted living facility. This listing is a market deal with two rental restrictions: tenants must be 58 or older, and 20% (14) of the units must be rented to tenants that make 50% or below the median income. Currently, the property is being operated as a 58 year old plus community, and attracts and retains senior Oregon residents interested in independent coastal living.
Here is a gallery of an occupied unit:
The Dorchester has a regulatory agreement with Oregon Housing and Community Services mandating 20% of the units (14) to be rented to tenants below 50% of the median household income for the area (as provided annually by the state). The agreement is currently set to expire in November 2029. Due to the majority of current tenants being retired, the majority are already below this income threshold, and the restriction has not hampered leasing the property at market rates.
Here is a typical unit, this one is vacant:
The investment opportunity is currently available for sale by Joseph Bernard Investment Real Estate at $4,400,000, at a cap rate of 6.93% based on actual rents and the trailing twelve month expenses. A buyer may obtain new financing on the property, there is no requirement for a loan assumption.
In addition, there is potential to create a 70th unit, as the current office is plumbed and could be modified to maintain the leasing office while creating the 70th rental unit, buyer to verify all due diligence.
The units feature 21 studios, 46 one bedrooms, and two, two bedroom units. Each unit has one bathroom and a kitchenette. Rents include free laundry and all utilities, plus cable TV.
The quality operations team consists of a full-time Executive Director, a full-time Assistant Administrator, a full-time Maintenance Director, and a part-time Housekeeper (seller provides housekeeping services for additional fees, see pro forma for details). The staff has indicated there is potential to continue to work for the new buyers, which makes this an amazing opportunity for an owner/operator to maximize off-site management costs.
Here is the link for the property flyer:
For more information on the Dorchester House Apartments, call Bernard Gehret or Hunter Berkshirer of Joseph Bernard Investment Real Estate: 503-546-9390.