BARBUR PLACE · ASSET SUMMARY Property Barbur Place Location 8924 SW 30th Ave Portland, OR 97219 County Multnomah Total Units 24 Year Built 1969 Stories 3 stories Approx. NR Sq Ft

OFFERING MEMOR ANDUM

BARBUR PLACE24 Units • Portland, Oregon

Barbur Place is a 24-unit community in Southwest Portland that offers an investor an exceptionally well maintained asset with the potential to increase rents. Completed in 1969, Barbur Place consists of two adjacent buildings offering nicely designed one- and two-bedroom units with private decks or patios.

Barbur Place’s rents currently average $1,018 per unit or $1.53 per square foot. Rents have grown significantly over the past several months—an average increase of $66 over 2017 year-end leases. Barbur Place’s nicely planned units—with updated finishes and amenities throughout—make this an attractive home for tenants.

INVESTMENT SUMMARY

Barbur Place has been well cared for over the years. Dishwashers have been added to one-bedroom units on turnover (each two-bedroom already included a dishwasher) and kitchens have recently been upgraded with granite countertops. The owners have spent a significant amount of time and money on capital improvements in the past year, including:

• New roof

• New siding

• Parking lot re-striping

• New cabinets, appliances, carpets, and fixtures

• Landscaping upgrades

2 HFO INVESTMENT REAL ESTATE

ASSET SUMMARYProperty Barbur PlaceLocation 8924 SW 30th Ave

Portland, OR 97219

County MultnomahTotal Units 24Year Built 1969Stories 3 storiesApprox. NR Sq Ft 16,000Average Sq Ft 667Acreage 0.63

PRICINGPrice $3,500,000

Price Per Unit $145,833

Per Square Foot $219

Projected Cap Rate 5.48%

INVESTMENT SUMMARY

FOR MORE INFORMATION Greg Frick • [email protected]

HFO Investment Real Estate2424 SE 11th Avenue, Portland, Oregon 97214www.hfore.com • (503) 241.5541 • Fax: (503) 241.5548

Brokers licensed in Oregon and Washington.

33.33%66.67%2 Bedroom1 Bedroom

3BARBUR PLACE • 24 UNITS • PORTLAND, OR


Barbur Place features 24 spacious one-and two-bedroom units. Nestled in the heart of Southwest Portland, each resident at Barbur Place enjoys the luxury of their own parking spot and a private balcony or patio.


LOCATION

SW Vermont St

SW Hamilton St

SW Stephenson St

SW Bonita Rd

SW McDonald Rd

SE Tacoma St

SW M

acad

am Av

e

SE Holgate Blvd

SE Powell Blvd

SE Division St

SE King Rd

SW Kruse Way

SW Allen Blvd

SW 33th Ave

SW 30th Ave

SE 45th Ave

SE 17th Ave

SW Hall Blvd

SW 121st Ave

Tryon Creek State Natural Area

Mt Tabor ParkPORTLAND

Oaks Amusement Park

Washington Square

Beaverton Town Square Jesuit High

School

Lake Oswego High School

Oregon ZooSt Vincent Hospital

Peterkort Towne Square

BEAVERTON

5

Lake Oswego

TIGARD

Willamette River

26

26

217

210

99W

99E

43

224

10

8

Sylvania

Barbur Place


SW CORRIDOR MAX - PLANNED 2027 OPENING

The Metro council, which represent cities and counties in the Portland Metro Area, is planning a light rail line that would connect Southwest Portland to Tigard, Tualatin, and Sherwood. The so-called Southwest Corridor project would also include roadway, bicycle, and pedestrian projects that would help local residents access the new transit opportunities. Metro initially planned to include a bond measure for the new MAX line on the 2018 ballot but has chosen instead to wait until 2020. The council hopes to acquire federal funding for the project around the same time and complete the new MAX line by 2027.

In August 2018, the Metro Steering Committee recommended a route for the proposed MAX line. Per the committee’s recommendation, the line would go down the middle of Barbur Boulevard from Downtown Portland to SW 70th Avenue, then follow 70th to Elmhurst Street, crossing over Highway 217 and running east of Hall Boulevard, then traveling next to existing tracks until splitting off toward Bridgeport Village. The plan would also build continuous bike lanes and sidewalks on Barbur until 60th Avenue. This route is now included as part of the Southwest Corridor Plan, which requires approval from the Metro Council.


APARTMENT MARKETThe Portland Metro Area consistently ranks among the nation’s lowest for apartment vacancy rates according to the U.S. Census Bureau and other third-party services like REIS, MPF Research, and Axiometrics. The U.S. Census ranked Portland as having the 6th lowest vacancy rate in the nation for the first quarter of 2018 at 3.6%.

REIS reports 2017 Portland metro year-over-year rents grew 3.3%. Overall rents have increased every quarter since Q1 2010.

SKILLED WORKFORCE & STRONG EMPLOYMENT54% of Portland workers have an associate’s degree or higher, outpacing the national average of 38%.

According to the State of Oregon’s Employment Department, Portland enjoys one of the fastest job growth rates in the Pacific Northwest, and the entire nation, having added 31,000 jobs in 2016 and 28,000 jobs in 2017.

The Portland Metro Area’s unemployment rate as of May 2018 is 3.7%—the lowest since 1995.

TOP 10 LISTSPortland consistently receives glowing reviews and rankings from the media.

2018 lists include: • #4 Best City for Biking (Fast Company)• #6 Best Place to Live (U.S. News and World Report)• #10 Most Entrepreneurial State (Amazon.com)

2017 lists include: • #3 City with Best Opportunities for Job Seekers

This Year (Fast Company)

2016 lists include: • America’s Best City for Summer Travel (Travel +

Leisure)• Best City for Electric Cars in the U.S.

(The Christian Science Monitor)• Best Places to Live 2016 (Money Magazine)• #8 Greenest City in the Nation (Wallethub)• #8, World’s Best Cities for Millennials (Matador

Network)• Food and Drink Capital of America (The Telegraph

– London)• World’s #10 Best City to Live In (Metropolis Magazine)

DIVERSIFIED ECONOMYPortland is home to the headquarters of Fortune 500 companies Nike, Precision Castparts and Lithia Motors. Fortune 1000 companies headquartered here include Stancorp Financial, Greenbrier Companies, Columbia Sportswear, Schnitzer Steel Industries, and Portland General Electric.

Tech and software companies continue to relocate their operations here or open major outposts in Portland. These companies enjoy Portland’s educated workforce, affordable high quality of life, and a low cost of doing business compared to the Bay Area.

Companies which recently opened major branches in Portland include Airbnb, Google, Squarespace, Mozilla, Simple, Survey Monkey, SalesForce and New Relic, Inc. Portland’s tech startup companies include Viewpoint, Jama Software, Thetus, Urban Airship, Acquia, Elemental Technologies, Act-On, Puppet Labs, and The Clymb.

PORTLAND REGIONOregon’s largest city, Portland, is near the confluence of the Willamette and Columbia Rivers. The Portland Metro Area consists of four counties: Multnomah, Washington, Clackamas, and Clark County, Washington.

PORTLAND METRO SNAPSHOT


GOVERNMENTThe U.S. Federal Government is Portland metro’s overall largest employer, with 20,500 workers. The State of Oregon gives employment to an additional 14,000 residents.

HIGH TECH & CHIP MANUFACTURINGAttracted by the Portland area’s educated workforce and relative low cost of doing business, tech companies continue moving to Portland—opening major branches and, in some cases, relocating to the area entirely.

With over 19,300 employees, Intel is the area’s largest private employer. Intel acquired its first Portland location in 1974. The company is currently expanding its presence with forthcoming D1X microprocessor chip facilities at the Ronler Acres Campus in Hillsboro. This is part of a five-year, $6 billion expansion, and is part of the company’s long-term plans for growth. Intel is the largest property taxpayer in Washington County, with payments of approximately $30 million a year.

Other notable Portland-area high-tech companies include ON Semiconductor and Tektronix.

SPORTSWEARNike has its world headquarters in Beaverton and employs 12,000 Portland-area residents. The company designs, develops and manufactures footwear, apparel, equipment and accessories. From here, Nike orchestrates production and design for one of the world’s most recognizable brands. In January, 2015, Nike began a $1 billion expansion of its Washington County campus, adding three buildings with a collective 1.3 million square feet and more than 3,300 parking stalls. Nike recently released artists’ renderings of the completed expansion, which is estimated to open in 2018.

Nike’s two key competitors have a major local presence as well. Those employers include the North American headquarters of Adidas’ with 1,200 employees, and a new 70,000 SF outpost of Under Armour. Under Armour has moved 100 employees into an iconic former YMCA.

HEALTHCARE AND RESEARCHHealth services are another major employment sector for the Portland area. The top healthcare employers in the area are Providence Health Systems, with 17,543 employees, and The Oregon Health Sciences University (OHSU), with 16,200 workers. OSHU is the recent recipient of a total of $1 billion in donations for cancer research from over 10,000 Oregon donors. Grants from the National Institutes of Health totaled $182.7 million in 2016.

MANUFACTURINGIn trucking and transportation, Daimler Trucks—with nearly 3,000 area workers—has big plans for the Portland area. The company recently spent $150 million renovating its Portland facility and invests heavily in research and development, including autonomous driving.

PORTLAND MARKET SNAPSHOTMAJOR EMPLOYERS


OPERATIONS ANALYSISBARBUR PLACE • 24 UNITS • PORTLAND, OREGON

Income Current Scheduled Rents Projected Operations Notes

Scheduled Gross Rent $293,289 $12,220 $307,200 $12,800 1 Less: Vacancy/Credit Loss -$14,664 -$611 -5.0% -$15,360 -$640 -5.0% 2

Net Rental Income $278,624 $11,609 $291,840 $12,160Other Income $4,155 $173 $15,114 $630 3

Includes: Utility Billing (RUBs) $0 $0 $10,959 $457Includes: Miscellaneous $4,155 $173 $4,155 $173

Gross Operating Income $282,779 $11,782 $306,954 $12,790

Expenses Projected Operations Per Unit % GOI Projected Operations Per Unit % GOI

Real Estate Taxes $30,166 $1,257 10.7% $30,166 $1,257 9.8% 4Insurance $5,933 $247 2.1% $5,938 $247 1.9%

Total Utilities $26,622 $1,109 9.4% $26,622 $1,109 8.7%

Fee Management $28,278 $1,178 10.0% $30,695 $1,279 10.0% 5Landscaping $3,000 $125 1.1% $3,000 $125 1.0%

Maintenance/Repairs $7,800 $325 2.8% $7,800 $325 2.5%

Turnover $4,800 $200 1.7% $4,800 $200 1.6% 6Reserves $6,000 $250 2.1% $6,000 $250 2.0% 7

Total Expenses -$112,599 -$115,017Expenses per Unit -$4,692 -$4,792

% of Gross Operating Income -40% -37%

Net Operating Income (NOI) $170,180 $191,938


1. RENTS Rents are based on an January 2019 rent roll. Current scheduled rents average $1,018 per unit or $1.53 per square foot. The projected rents are based on the most recently signed leases at the highest achieved rate. Projected rents average $1,067 or $1.60 per square foot.

2. VACANCY, CONCESSIONS, AND BAD DEBT

Barbur Place currently has one vacant unit with several applicants applying for the unit. For the purpose of underwriting, vacancy was set to a market rate of 5%.

3. OTHER INCOME Other income includes charges stemming from laundry and administrative charges. The property has 24 storage units available for rent at $30 per month. The property currently does not collect for resident utility billbacks (RUBs). In our projected operations we estimated a new owner could implement RUBs and collect $457 per unit. Projected other income totals $15,114 or $630 per unit.


RENT ROLL ANALYSIS: MARKET RENTS

Unit TypeUnit

CountSquare

FeetAverage

Scheduled Rent

Average Scheduled Rent PSF

Projected Rent Projected Rent PSF % Change

1 Bedroom / 1 Bathroom 16 600 $975 $1.62 $1,000 $1.67 2.5%2 Bedroom / 1 Bathroom 8 800 $1,106 $1.38 $1,200 $1.50 7.9%Totals / Averages 24 667 $1,018 $1.53 $1,067 $1.60 4.5%


4. PROPERTY TAXES Oregon’s property taxes are evaluated on a fiscal year starting July 1. Property tax values for the 2018-2019 tax year were published in October. In Oregon, property taxes are not reassessed on sale and are limited to a 3.0% annual increase at the state level. Property taxes paid before November 15th each year receive a 3.0% discount. Most investors take advantage of this discount.

The 2018-2019 gross property taxes for Barbur Place total $31,099. The net property taxes for the 2018-2019 tax year, after the 3% discount, total $30,166 and are included in the projected operations.

5. MANAGEMENT FEE The fee management includes administration, advertising, and on-site payroll costs. The management fee has been adjusted to reflect costs for a property that is managed by an independent, third-party management company. The total management cost totals 10% of GOI (Gross Operating Income).

6. TURNOVER When units turn at Barbur Place, the owners perform extensive capital improvements depending on the unit’s condition. Update include cabinets, new countertops, new appliances, fixtures, and painting. In 2017 the property received all new siding and a new roof. In 2018 the owners spent more than $31,000 on those capital improvements.

7. RESERVES Lenders require reserves be set aside to address future capital costs associated with any property as it ages. The projected operations include reserves of $250 per unit or $6,000 annually.


TAX HISTORYTax Year 2017/2018 2018/2019Account #

R211303 $29,806 $31,099

Total $29,806 $31,099

% Change 8.49% 4.16%


BARBUR PLACETOURS AND INQUIRIES Please do not disturb tenants.

All tours and inquiries regarding Barbur Place are to be directed to HFO Investment Real Estate at (503) 241.5541.

Greg Frick • [email protected]

Jack Stephens • [email protected]

Tyson Cross • [email protected]

Lee Fehrenbacher • [email protected]

Todd Tully • [email protected]

Adam Smith • [email protected]

Khari Gates • [email protected]

Brokers licensed in Oregon and Washington.

BARBUR PLACE • 24 UNITS • PORTLAND, OREGONASSET SUMMARY

Property Barbur PlaceLocation 8924 SW 30th Ave

Portland, OR 97219

County MultnomahTotal Units 24Year Built 1969

PRICINGPrice $3,500,000

Price Per Unit $145,833

Per Square Foot $219

Projected Cap Rate 5.48%


HFO Investment Real Estate

2424 SE 11th Avenue • Portland, OR 97214www.hfore.com • 503.241.5541

Passion • Collaboration • Specialization

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Parties who receive this information from unauthorized parties shall not be recognized. ©2018 HFO Investment Real Estate LLC. Build your legacy is a service mark of HFO

Investment Real Estate. Licensed in the states of Oregon and Washington.

Documents

BARBUR PLACE · ASSET SUMMARY Property Barbur Place Location 8924 SW 30th Ave Portland, OR 97219 County Multnomah Total Units 24 Year Built 1969 Stories 3 stories Approx. NR Sq Ft