MR. FORMAL BUILDING - LoopNet · Space Occupied by User 39,000 SF Lot Size 0.44 Acres Zoning EXD – Central Employment OWNER/USER ANALYSIS Sale Price $6,000,000 $153.85 Down Payment

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M R . F O R M A L B U I L D I N G1 2 0 5 S E G R A N D & 1 2 0 6 S E M L K , P O RT L A N D , O R E G O N

O P P O RT U N I T Y ZO N E

222222OFFICES THROUGHOUT THE U.S. AND CANADA

www.marcusmillichap.com

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and Disclaimer

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the

party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus &

Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only

a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence

investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or

expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and

improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the

physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or intentions

to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we

believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus &

Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or

completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement Notice

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The

presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said

corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is

solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

A L L P R O P E R T Y S H O W I N G S A R E B Y A P P O I N T M E N T O N L Y .P L E A S E C O N S U L T Y O U R M A R C U S & M I L L I C H A P A G E N T F O R M O R E D E T A I L S .

ACTIVITY ID: ZAA0210421

NAT H A N D R A K ESenior Associate

Direct: (503) 200-2046 // Fax: (503) [email protected]

License: OR 201218242

M I C H A E L K A P N I C KSenior Vice President of Investments


License: OR 960500191, WA 6176

E X C L U S I V E L Y L I S T E D :

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C O M P A R A B L EP R O P E R T I E S

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P R I C I N G A N A L Y S I S

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TABLE OF CON T EN T S

02P R O P E R T YO V E R V I E W

M A R K E T D E M O G R A P H I C S

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Pricing Analysiss e c t i o n 1

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MR. FORMAL BUILDING1205 SE Grand Ave / 1206 SE MLK Blvd

Portland, OR 97214

MARKET SUPPLY BUILDING139 SE Taylor St.

Portland, OR 97214

$6,000,000

-

39,000 SF

-

$154 PSF

-

0.44 AC

-

ZONED: EXD

$3,800,000

-

30,000 SF

-

$127 PSF

-

0.23 AC

-

ZONED: IG1

PORTFOLIO SUMMARY // CENTRAL EASTSIDE INDUSTRIAL DISTRICT

P O R T F O L I O S U M M A R Y

PORTFOLIO

$9,800,000

-

69,000 SF

-

$142 PSF

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PRICING SUMMARY // MR. FORMAL BUILDING

P R I C I N G S U M M A R Y

$$6,000,000

-

39,000 SF

-

$154 PSF

-

0.44 AC

-

ZONED: EXD

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“Portland, Oregon is a designated Opportunity Zone, despite being one of the fastest-growth markets in the country.”

- Forbes Real Estate Council

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REDEVELOPMENT ANALYSIS // MR. FORMAL BUILDING

D E V E L O P M E N T A N A L Y S I S20

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MR. FORMAL BUILDING

Address: 1205 SE Grand / 1206 SE MLKPortland, OR 97214 Market Assumptions:

GBA: 39,000 SF Market Rent – Second Level $28.00 NNN

Lot Size: 0.44 Acres Market Rent – Main Level $28.00 NNN

Zoning: EXD – Central Employment Market Rent – Lower Level $10.00 NNN

Income After Redevelopment

Gross Rental Income $912,000

Vacancy Allowance ($45,600)

Est. Gross Income (EGI) $866,400

Operating Expenses (NNN)

Reserves ($0.20 psf) ($7,800)

Total Operating Expenses ($7,800)

Net Operating Income (NOI) $858,600

Terminal Cap Rate 6.0%

Exit Sales Price $14,310,000

Price Per Sq. Ft. $367

Redevelopment Analysis

Building/Tenant Improvements $125 psf ($4,875,000)

Leasing Commissions 5-YR / 5% ($214,650)

Contingency Costs 20% ($1,017,930)

Sum of Redevelopment Costs ($156) psf ($6,107,580)

AS IS Sale Price ($154) psf ($6,000,000)

Total Project Cost ($310) psf ($12,107,580)

Exit Sales Price $367 psf $14,310,000

Exis Sales Commission 2.0% ($286,200)

Net Proceeds from Sale $360 psf $14,023,800

Net Profit from Project 16% $1,916,220

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OWNER/USER ANALYSIS // MR. FORMAL BUILDING

D E V E L O P M E N T A N A L Y S I S20

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SUMMARY

Address 1205 SE Grand / 1206 SE MLKPortland, OR 97214

Year Built 1927 / 1912

Gross Buildable Area 39,000 SF

Space Occupied by User 39,000 SF

Lot Size 0.44 Acres

Zoning EXD – Central Employment

OWNER/USER ANALYSIS

Sale Price $6,000,000 $153.85

Down Payment $900,000 $23.08

Tenant Improvement Cost $4,875,000 $125.00

Total Acquisition Cost $5,775,000 $148.08

ANNUAL EXPENSES

Annual Mortgage Debt Service ($348,912) ($8.95)

Cost of TI’s Amortized / 10 Years ($487,500) ($12.50)

Cost of Down Payment Amortized / 10 Years ($90,000) ($2.31)

Total Owner Annual Expenses / NNN ($926,412) ($23.75) NNN

FINANCING TERMS

Down Payment $900,000 (15%)

Loan Amount $5,100,000

Loan to Value 85%

Interest Rate 4.75%

Amortization 25 Years

Monthly Payment ($29,076)

Term 7 Years

Property Overviews e c t i o n 2

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MR. FORMAL BUILDING1205 SE Grand / 1206 SE MLK, PORTLAND, OR, 97214

Marcus & Millichap has been selected to exclusively market for sale the Mr. Formal Building, an urban-infill,retail and industrial property located in Portland, Oregon. The two buildings were built in 1927 and 1912respectively and consist of approximately a combined total of 39,000 square feet of gross leasable areasituated on a 0.44-acre parcel of land. Both parcels are zoned EXD – Central Employment, which allows for avariety of uses including, but not limited to retail, office and multi-family.

Opportunity Zones were created as a result of the 2017 Tax Cut and Jobs Act, and they are designed toencourage private investment generally in certain areas of the country through deferral of capital gains taxes.To benefit from the program, one has to make capital improvements into an asset equal to the basis of theproperty less the land value and then retain ownership of that asset for up to 10 years. A large majority ofPortland’s Central Business District has been designated an Opportunity Zone including the location of theSubject Property. Moreover, the Oregon tax code automatically mirrors the federal one, so Oregon iseffectively offering the same Opportunity Zone discount to investors a second time on Oregon tax bills.

“Oregon has the best quality Opportunity Zones of any state in the country. OZ designations were based on 2010 census data. Oregon areas ripe for economic development at that time included much of downtown Portland, the Pearl District, close-in Eastside...”

- Portland Business Journal

• Located within an Opportunity Zone

• Flexible Zoning (EXD)

• High Visibility, Urban-Infill Location

• Near Several other Major Developments

I N V E S T M E N T H I G H L I G H T S

P R O P E R T Y O V E R V I E W

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OPPORTUNITY ZONE OVERVIEW // PORTLAND BOUNDARY MAP

O P P O R T U N I T Y Z O N E

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1206 SE MLK BLVD

GGBA: 30,000 SF // Lot: 0.23

AC

2nd Level: 10,000 SF

Main Level: 10,000 SF

Lower Level: 10,000 SF

O P P O RT U N I T Y ZO N E

1205 SE GRAND AVE

GGBA: 9,000 SF // Lot: 0.21 AC

Main Level: 9,000 SF

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16

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INVESTMENT OVERVIEW // 1205 SE GRAND – FLOOR PLAN

1 2 0 5 S E G R A N D – F L O O R P L A N

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21

22

23

24

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INVESTMENT OVERVIEW // 1206 SE MLK – MAIN FLOOR

1 2 0 6 S E M L K – F L O O R P L A N

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INVESTMENT OVERVIEW // 1206 SE MLK – SECOND FLOOR & BASEMENT

1 2 0 6 S E M L K – F L O O R P L A N

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28

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303300

Comparable Propertiess e c t i o n 3

31C O M P A R A B L E P R O P E R T I E S

SALES COMPARABLES MAP // MR. FORMAL BUILDING

(SUBJECT)

Madison Suites

Cline Glass Building

Expert Auto Building

66 SE Madison

Kennedy Restoration

302 SE 7th Ave

Portland Store Fixtures

Clay Creative

1420 SE Water Ave

The Glass Lab

Khanate Furniture

Custom Blocks

1

2

3

4

5

7

8

6

9

10

11

12

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AAvg. $176 PSF

$0.00

$30.00

$60.00

$90.00

$120.00

$150.00

$180.00

$210.00

$240.00

$270.00

$300.00

139 SE

Taylor

Madison

Suites

Cline Glass

Building

Expert Auto

Building

66 SE

Madison

Kennedy

Restoration

302 SE 7th

Ave

Portland

Store

Fixtures

Clay

Creative

1420 SE

Water Ave

The Glass

Lab

Khanate

Furniture

Custom

Blocks

SALES COMPARABLES // MR. FORMAL BUILDING

C O M P A R A B L E P R O P E R T I E S

Average Price Per Square Foot

Subject

Propert

y

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Close Of Escrow: 8/13/2019

Sales Price: $1,840,000

Price/SF: $204

Zoning: EXD - OPZ

CLINE GLASS BUILDING1125-1135 SE Grand Ave, Portland, OR, 97214



Price/SF: $124

Zoning: IG1 - OPZ

MADISON SUITES210-226 SE Madison St, Portland, OR 97214

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Sales Price: $820,800

Price/SF: $200

Zoning: EXD

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EXPERT AUTO BUILDING1525 SE MLK Jr Blvd, Portland, OR 97214

1

5



Price/SF: $181

Zoning: IG1 OPZ

KENNEDY RESTORATION BUILDING323 SE 7th Ave, Portland, OR, 97214



Price/SF: $200

Zoning: IG1 – OPZ

66 SE MADISON ST66 SE Madison, Portland, OR, 97214

4



Price/SF: $200.00

Zoning: IG1 - OPZ

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302 SE 7TH AVE302 SE 7th Ave, Portland, OR, 97214

4

34



8



Price/SF: $193

Zoning: IG1

CLAY CREATIVE BUILDINGS633 SE Clay St, Portland, OR, 97214



Price/SF: $236

Zoning: IG1 - OPZ

PORTLAND STORE FIXTURES110 SE Main St, Portland, OR, 97214

4



Price/SF: $184

Zoning: IG1 - OPZ

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1420 SE WATER AVE1420 SE Water Ave, Portland, OR, 97214

7

11



Price/SF: $114

Zoning: EXD

KHANATE FURNITURE BUILDING716 SE Grand Ave, Portland, OR, 97214



Price/SF: $137

Zoning: IG1

THE GLASS LAB350 SE Mill St, Portland, OR, 97214

4



Price/SF: $130

Zoning: IG1

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THE CUSTOM BLOCKS1306-1340 SE 9th Ave, Portland, OR 97214

10

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LEASE COMPARABLES MAP // RENOVATED PRODUCT


(SUBJECT)

The Glass Lab

The Grand

Red East Center

The Custom Blocks

The Creamery

Matterhorn Building

East Bank Lofts

Plow Works Building

4

7

8

44

77

88

1

2

3

5

6

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LEASE COMPARABLES // RENOVATED PRODUCT


$$28.66 NNN

$0

$5

$10

$15

$20

$25

$30

$35

MLK/Grand The Glass

Lab

The Grand Red East

Center

Custom

Blocks

The

Creamery

Matterhorn

Building

East Bank

Lofts

Plow Works

Building

Subject

Property

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3

THE GLASS LAB350 SE Mill St, Portland, OR 97214

Lease Rates @ $26.50 NNN

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THE GRAND714 SE Grand Ave, Portland, OR 97214


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THE CUSTOM BLOCKS1306-1340 SE 9th Ave, Portland, OR 97214


2

RED EAST CENTER537 SE Ash St, Portland, OR 97214


38

8

EAST BANK LOFTSPortland, OR 97214

For Lease @ $29.00 NNN



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THE CREAMERY240 SE 2nd Ave, Portland, OR 97214


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PLOW WORKS BUILDING105-117 SE Taylor St, Portland, OR 97214


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MATTERHORN BUILDING940 SE Madison St, Portland, OR 97214

For Lease @ $30.00 NNN

393399

Market Demographicss e c t i o n 4

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PORTLANDOREGON

MSA POPULATION2,226,009

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DEMOGRAPHICS // MR. FORMAL BUILDING

444,852To t a l Po p u l a t io n Within

5 Mile R ad i u sGENDER

49.66%

50.34%

Average Household Income

Within 3 Mile RadiusMedian Housing Value

within 5 Mile Radius

206,719To t a l H o u s e h o ld s in 5 Mile R ad i u s

23.00%From 2000

$100,661 $391,089

D E M O G R A P H I C S

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E X C L U S I V E L Y L I S T E D :

NAT H A N D R A K ESenior Associate

Direct: (503) 200-2046 // Cell: (503) [email protected]

License: OR 201218242

M I C H A E L K A P N I C KSenior Vice President of Investments


License: OR 960500191, WA 6176

Documents

MR. FORMAL BUILDING - LoopNet · Space Occupied by User 39,000 SF Lot Size 0.44 Acres Zoning EXD – Central Employment OWNER/USER ANALYSIS Sale Price $6,000,000 $153.85 Down Payment