HOUSE IN THE TREES - LoopNet · 2018-09-13 · OPERATIONS ANALYSIS HOUSE IN THE TREES • 10 UNITS • GLENEDEN BEACH, OREGON Income Current Scheduled Rents Projected Operations Notes

OFFERING MEMOR ANDUM

HOUSE IN THE TREES10 Units • Gleneden Beach, Oregon

House in the Trees is a 10-unit apartment complex built in 1966 that sits directly on the fairway of the 18th hole of the Salishan Golf Course. The two story property is tucked within the mature trees on a quiet street just minutes from downtown Lincoln City which has seen steady population growth over the past decade. Additionally, the 1.04 acres that House in the Trees sits on could potentially be redeveloped. The property is the largest lot with frontage on the golf course, and one of the only lots next to the course that can accommodate higher density.

House in the Trees is west of Highway 101 in Gleneden Beach. It has convenient access to nearby restaurants and retail via the highway. It also is a short five minute drive to the beach. Just around the corner is beautiful Siletz Bay—famous for it’s clamming. Whether it’s the championship golf or surrounding nature that captures your attention, Gleneden Beach has plenty to offer.

The owners of House in the Trees have had a positive long-term relationship with many current tenants, resulting in some below market rents. A new owner could increase cash flow by bringing rents to market.

House in the Trees’ rents currently average $702 per unit or $1.08 per square foot. House in the Trees’ unique units make the property an attractive site for tenants living in the Coastal area.

INVESTMENT SUMMARYPROPERTY HIGHLIGHTS• Unique property layout

• Located on the 18th fairway of the Salishan Golf Course & Resort

• Beautiful landscaping

2 HFO INVESTMENT REAL ESTATE

ASSET SUMMARYProperty House in the TreesLocation 7205 Gleneden Beach Loop

Gleneden Beach, OR 97391

County LincolnTotal Units 10Year Built 1966Stories 2 storiesTotal Rentable Sq Ft 6,500Average Sq Ft 650

PRICINGPrice $1,150,000

Price Per Unit $115,000

Per Square Foot $177

Projected Cap Rate 5.21%

INVESTMENT SUMMARY

FOR MORE INFORMATION Adam Smith • [email protected]

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.

70%1 Bedroom

30%2Bedroom

3HOUSE IN THE TREES • 10 UNITS • GLENEDEN BEACH, OR

Conveniently located on the 18th fairway of Salishan Golf Course & Resort, House in the Trees features seven one-bedroom units and three two-bedroom units.

House in the Trees sits directly to the right of this beautiful 18th hole fairway.


Laundry Room


LINCOLN COUNTYLocated on the northern Oregon coast, Lincoln City is a scenic, family-friendly town boasting 5 miles of beaches. The city itself had 8,665 residents in 2017, while the surrounding county is home to 47,960 residents. Lincoln City’s population grew by 9.3% between 2010 and 2017, higher than the national average. 53.7% of Lincoln City’s households are renter-occupied, and the average household is made up of 2.23 residents. According to Sperling’s Best Places, the apartment vacancy rate in Lincoln City is 1.6%.

The largest employers in Lincoln County include the Confederated Tribes of Siletz Indians, Samaritan Health Services, the Lincoln County School District, Georgia Pacific, the OSU Hatfield Marine Science Center, and Pacific Seafood. The median household income of Lincoln County is $41,303 per year. The job sectors most highly represented in the county include administrative, food & serving, sales, cleaning & maintenance, and management.

In March of 2018, Oregon State University broke ground on its new Marine Studies Building at OSU’s Hatfield Marine Science Center in Newport, just south of Lincoln City. The planned 73,000 square foot facility is part of OSU’s Marine Studies Initiative, and the university has raised $56 million for the project so far. It will also serve as a “vertical evacuation” site for tsunamis – one of the first in the United States. Oregon State University is one of the top 10 universities in the world for forestry, oceanography, and marine and freshwater biology. The new Marine Studies Building should be completed and ready for occupancy by the end of 2019.

Lincoln City’s appeal as a tourism destination for Pacific Northwest residents looking to explore the great outdoors has earned it the acclaim of numerous publications. In 2017, Portland’s alt-weekly publication Willamette Week highlighted some of the city’s underrated “surprises,” including restaurants like Pier 101 and Tiki’s at 51st, and local traditions like the off-season treasure-hunt for hidden glass orbs along the beach. Along with its 5 miles of scenic coastline, Lincoln City is also home to Devils Lake – a state park known for its plethora of wildlife and serene atmosphere for canoe and kayak enthusiasts.

Visitors to Lincoln County spent $578.7 million in 2017, making it the 5th biggest county for tourism dollars in Oregon (after Multnomah, Washington, Deschutes, and Lane counties). Of that, visitors spent $171,200,000 on accommodations (on average, visitors who stayed in a hotel or motel spent $142 per night). 6,130 residents are employed in the tourism industry, which also pulled in $13,605,000 for the local government. Approximately 2,115,000 tourists visited Lincoln County in 2017 alone.

DEVILS LAKE • LINCOLN CITYCredit to Paul Robertson


GLENEDEN BEACH

House in the Trees

Salishan Resort


OPERATIONS ANALYSISHOUSE IN THE TREES • 10 UNITS • GLENEDEN BEACH, OREGON

Income Current Scheduled Rents Projected Operations Notes

Scheduled Gross Rent $84,240 $8,424 $93,600 $9,360 1Less: Vacancy/Credit Loss -$4,212 -$421 -5.0% -$4,680 -$468 -5.0% 2

Net Rental Income $80,028 $8,003 $88,920 $8,892

Other Income $1,200 $120 $5,700 $570 3Includes: Laundry $1,200 $120 $1,200 $120Includes: Utility Billings (RUBs) $0 $0 $4,500 $450

Gross Operating Income $81,228 $8,123 $94,620 $9,462

Expenses Projected Operations

Per Unit % GOI Projected Operations

Per Unit % GOI

Real Estate Taxes $5,609 $561 6.9% $5,609 $561 5.9% 4Insurance $3,040 $304 3.7% $3,040 $304 3.2% 5Total Utilities $10,994 $1,099 13.5% $10,994 $1,099 11.6%

Fee Management $4,061 $406 5.0% $4,731 $473 5.0% 6Landscaping $1,800 $180 2.2% $1,800 $180 1.9%

Maintenance/Repairs $4,500 $450 5.5% $4,500 $450 4.8%

Turnover $1,500 $150 1.8% $1,500 $150 1.6% Reserves $2,500 $250 3.1% $2,500 $250 2.6% 7

Total Expenses -$34,004 -$34,674 Expenses per Unit -$3,400 -$3,467

% of Gross Operating Income -42% -37%

Net Operating Income (NOI) $47,224 $59,946


1. RENTS Rents are based on an August 2018 rent roll. Current scheduled rents average $702 per unit or $1.08 per sq ft. Projected rents average $780 or $1.20 per square foot.

2. VACANCY, CONCESSIONS, AND BAD DEBT/RECOVERY

House in the Trees currently does not have any vacant units. The projected operations take into account a market-rate vacancy of 5.0%.

3. OTHER INCOME House in the Trees currently charges for laundry. Other income totals $1,200 or $120 per unit.

4. PROPERTY TAXES Oregon’s property taxes are evaluated on a fiscal year starting July 1. Property tax values for the 2017-2018 tax year are published October 15. Projected operations include current taxes for the 2017-2018 property tax year.

In Oregon, property taxes are not reassessed on sale and are limited to a 3% annual increase at the state level. The gross property taxes for House in the Trees total $5,609. Property taxes paid prior to November 15th each year receive a 3% discount. Most investors take advantage of this discount. The 2018-2019 tax year starts July 1. Therefore gross taxes are used in the projected operations in anticipation of pending assessments for the next tax cycle.

5. INSURANCE Property insurance reflects the current policy premium of $3,040 annually or $304 per unit.

6. MANAGEMENT FEE The management fee includes administration, advertising, and payroll costs. The fee has been adjusted to reflect costs for a property managed by an independent, third-party management company. The total management cost are $4,061 or 5% of GOI (Gross Operating Income).

7. RESERVES Lenders require reserves to 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 $2,500 annually.

OPERATIONS ANALYSISHOUSE IN THE TREES • 10 UNITS • GLENEDEN BEACH, OREGON


HOUSE IN THE TREES

PRICINGPrice $1,150,000

Price Per Unit $115,000

Per Square Foot $177

Projected Cap Rate 5.21%

TOURS AND INQUIRIES Please do not disturb tenants.

All tours and inquiries regarding House in the Trees are to be directed to HFO Investment Real Estate at (503) 241.5541.

Adam Smith • [email protected]

Greg Frick • [email protected]

Jack Stephens • [email protected]

Tyson Cross • [email protected]

Lee Fehrenbacher • [email protected]

Todd Tully • [email protected]

Brokers licensed in Oregon and Washington.

ASSET SUMMARYProperty House in the TreesLocation 7205 Gleneden Beach Loop

Gleneden Beach, OR 97391County LincolnTotal Units 10Year Built 1966Stories 2 storiesTotal Rentable Sq Ft 6,500Average Sq Ft 650

HOUSE IN THE TREES 10 UNITS • GLENEDEN BEACH, OREGON


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.

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HOUSE IN THE TREES - LoopNet · 2018-09-13 · OPERATIONS ANALYSIS HOUSE IN THE TREES • 10 UNITS • GLENEDEN BEACH, OREGON Income Current Scheduled Rents Projected Operations Notes