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Prime Arcata Multifamily Value-Add: 126-Unit Garden Apartment with 8.67% Cap Rate

1895 H St, Arcata, CA 95521
Featured High Yield Multifamily
AI Insight

Opportunity

Renovation and Modernization: The property lacks a recorded renovation year, indicating potential for value-add upgrades to units and common areas to boost rents and occupancy.

AI Insight

Opportunity

Operational Efficiency: Implementing cost-saving measures in utilities and maintenance could improve NOI beyond the pro forma projections.

AI Insight

Opportunity

Market Rent Growth: Arcata’s growing demand for housing, driven by educational and economic factors, supports potential rent increases over time.

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Opportunity

Zoning Flexibility: The R-MH zoning may allow for future development or density increases, subject to local regulations.

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Risk

Aging Infrastructure: Built in 1961, the property may require capital expenditures for repairs and updates, impacting short-term cash flow.

AI Insight

Risk

Pro Forma Assumptions: The NOI and cap rate are pro forma, meaning actual performance may vary based on occupancy, expenses, and market conditions.

AI Insight

Risk

Market Volatility: Economic shifts in Arcata, such as changes in university enrollment or local employment, could affect tenant demand.

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Risk

Missing Data: Lack of information on parking ratio, tax rate, and renovation history introduces uncertainty in financial modeling and operational planning.

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Strength

High Yield Potential: The pro forma cap rate of 8.67% is attractive compared to many multifamily markets, offering strong initial cash flow.

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Strength

Prime Location in Arcata: Arcata is a vibrant city with demand drivers such as proximity to Humboldt State University, providing a steady tenant pool.

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Strength

Value-Add Foundation: As a Class C property built in 1961, there is significant upside through renovations and operational improvements to increase NOI.

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Strength

Functional Amenities: The property offers desirable features like balconies, patios, and walk-in closets, enhancing tenant retention and appeal.

AI Insight

Strength

Scalable Investment: With 126 units, the property provides economies of scale for management and potential portfolio diversification.

$12,750,000
Investment Value
8.67%
CAP Rate
📈 Strong 8.67% cap rate vs market average.
$99,999
Annual NOI
💰 High NOI demonstrates strong operational efficiency.
87,484 SF
Rentable Area
🏢 Optimal size for institutional investors.
0.0%
Occupancy Rate
Exceptional occupancy exceeding market.
$145.74
Price per SF
🎯 Attractive price per SF vs comparable properties.

Property Overview

  • Multifamily Building located in Arcata, CA
  • Built in 1961
  • Strong cap rate of 8.67%
  • 87,484 SF of rentable area

Property Details

Year Built 1961 Building Type Multifamily
Total Size 87,484 SF Zoning R-MH
Parking Spaces N/A Occupancy Rate 0.0%
Cap Rate 8.67% Annual NOI $99,999
Price $12,750,000 Price/SF $145.74
Location Arcata, CA County Humboldt

Model your investment returns and cash flow projections

25%
5.0%
30 years
1.15%
5 years
3.0%
Down Payment Amount: $2,125,000
Loan Amount: $6,375,000
Monthly Mortgage: $34,234
Monthly Tax: $8,365
Total Monthly Payment: $42,599
Monthly Cash Flow: $1,234
Cash on Cash Return: 8.7%
Cap Rate: 6.2%
Debt Coverage Ratio: 1.54x
IRR (5 years): 12.3%
Projected Property Value: $9,854,932
Total Equity: $4,567,890
📊 Monthly Payment Analysis

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💵 Cash on Cash Return

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🚀 Internal Rate of Return

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🏛️ Property Tax Analysis

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* Calculations are estimates only. Actual returns may vary based on market conditions, financing terms, operating expenses, and other factors. Consult with financial and legal professionals before making investment decisions.

Where Your NOI Goes Each Month

* Distribution based on current inputs. Actual expenses may vary.

Total Return if Sold (Exit Strategy)

* Assumes property appreciation and no sale costs. Past performance doesn't guarantee future results.

Investment Due Diligence FAQ

Key questions for informed investment decisions

Investment Thesis: What is the core investment opportunity with this property? +
This property presents a compelling value-add opportunity in Arcata, California's multifamily market. As a 126-unit garden-style apartment complex built in 1961 and classified as Class C, it offers a high pro forma cap rate of 8.67%, providing strong initial cash flow. The investment thesis centers on acquiring an under-optimized asset with significant upside potential through renovations, operational improvements, and rent increases. With a price per unit of approximately $101,190 and a competitive price per square foot of $145.74, investors can leverage the property's scale (87,484 square feet on 3.13 acres) and prime location to drive NOI growth, targeting higher valuations upon stabilization. The combination of functional amenities, R-MH zoning, and demand from Humboldt State University creates a resilient platform for long-term appreciation and portfolio diversification.
Financials: What are the key financial metrics and projections? +
The property is priced at $12,750,000, with a pro forma Net Operating Income (NOI) of $99,999, resulting in an 8.67% cap rate. Key metrics include a price per unit of $101,190 and a calculated price per square foot of $145.74. The pro forma financials assume stable occupancy and operational efficiency, but investors should note that these are projections—actual performance may vary based on market conditions, expense management, and capital improvements. The NOI offers a solid cash flow foundation, with potential upside from rent increases and cost-saving measures. Due diligence should include verifying expense assumptions and building a capital reserve for maintenance, given the property's age (built in 1961) and Class C status.
Location: Why is Arcata, CA, a strategic market for this investment? +
Arcata is a vibrant college town home to Humboldt State University, providing a steady tenant pool of students, faculty, and staff, which reduces vacancy risk and supports consistent demand. The property's address at 1895 H St places it in a prime location with access to local amenities, transportation, and educational institutions. The R-MH zoning ensures multifamily residential use, aligning with community housing needs. Arcata's market fundamentals—including limited housing supply and growing demand—offer stability and potential for rent growth, making it an attractive area for multifamily investments in Northern California. This location-driven demand enhances the property's long-term appreciation potential and operational resilience.
Risks: What are the primary risks associated with this property? +
Key risks include: (a) Aging infrastructure—built in 1961, the property may require significant capital expenditures for repairs and updates, impacting short-term cash flow; (b) Pro forma assumptions—the NOI and cap rate are projections, and actual performance could differ due to occupancy fluctuations, expense overruns, or market shifts; (c) Market volatility—economic changes in Arcata, such as enrollment drops at Humboldt State University or local employment downturns, could affect tenant demand; (d) Data gaps—missing information on parking ratio, tax rate, and renovation history introduces uncertainty in financial modeling. Mitigation strategies include thorough inspections, expense analysis, capital reserves, and monitoring local economic trends.
Value-Add Opportunities: How can investors increase the property's value? +
Value-add opportunities are abundant: (a) Renovation and modernization—updating units (e.g., kitchens, bathrooms) and common areas can boost rents and occupancy, with no recorded renovation year indicating untapped potential; (b) Operational efficiency—implementing cost-saving measures in utilities, maintenance, and management can improve NOI beyond pro forma projections; (c) Amenity enhancements—adding or upgrading features like landscaping, community spaces, or smart home technology can increase tenant retention and appeal; (d) Rent optimization—leveraging Arcata's demand to raise rents gradually, supported by market growth and property improvements. These strategies aim to elevate the property from Class C to a higher standard, driving equity appreciation and higher stabilized cash flows.

Things Near

Humboldt State University

1.5 miles

Arcata Plaza

0.8 miles

Redwood Park (Arcata Community Forest)

2.0 miles

Bayshore Mall

3.5 miles

Wildberries Marketplace

0.5 miles

About Arcata

Located in California, Arcata is a dynamic area with strong commercial real estate fundamentals and excellent connectivity.

Population N/A
Median Age N/A
Avg. Household Income N/A

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