PARKSIDE MANOR17439 SE Stark St • Gresham, OR 97233

Offering Memorandum

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 DisclaimerThe 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. © 2017 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & 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.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

PARKSIDE MANORPortland, ORACT ID X0210387

TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01 Offering Summary Regional Map Local Map

Aerial Photo

FINANCIAL ANALYSIS 02 Rent Roll Summary

Rent Roll Detail

Operating Statement

Notes

Pricing Detail

Acquisition Financing

Growth Rate Projections

Cash Flow

MARKET OVERVIEW 03 Market Analysis

Demographic Analysis

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INVESTMENT

OVERVIEW

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EXECUTIVE SUMMARY

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

Portland Adventist Medical Ctr 6,303

ADVENTIST HEALTH 1,900

Kaiser Permanente 1,764

Solarcity Corporation 1,667

Menlo Worldwide LLC 1,200

Tri-Met 1,000

Walmart 924

Mt Hood Community 900

Banfield Pet Hospital 839

Multnomah Education Svc Dst 617

Home Depot The 600

Semiconductor 600

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2016 Estimate Pop 32,643 156,698 312,102

2010 Census Pop 30,116 145,205 289,415

2016 Estimate HH 10,786 56,711 112,943

2010 Census HH 10,095 53,026 105,583

Median HH Income $36,962 $46,658 $49,163

Per Capita Income $16,382 $21,905 $22,962

Average HH Income $48,852 $59,803 $62,731

UNIT MIXNUMBEROF UNITS UNIT TYPE APPROX.

SQUARE FEET1 Studio 40012 1 Bedroom 69030 2 Bedroom 82543 Total 33,430

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VITAL DATAPrice $5,464,800 CURRENT YEAR 1

Down Payment 25% / $1,366,200 CAP Rate 5.60% 6.60%

Loan Amount $4,098,600 GRM 11.77 10.40

Loan Type Proposed New Net Operating Income $305,792 $360,666

Interest Rate / Amortization 4.08% / 30 Years

Net Cash Flow After Debt Service

5.03% / $68,710 9.05% / $123,583

Price/Unit $127,088 Total Return 10.26% / $140,132 14.49% / $197,975

Price/SF $163.47 Number of Units 43 Rentable Square Feet 33,430 Year Built 1980 Lot Size 1.3 acre(s)

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OFFERING SUMMARY

§ Extremely Low Vacancy

§ Value-Add Possible with Rehab

§ Outside of Portland's Restrictive Laws for Landlords

INVESTMENT HIGHLIGHTS

The investor in Parkside Manor has the opportunity to capitalize on a rapidly expanding submarket with rental rates seeing steady increases. Tenants looking for larger units with more amenities are attracted to this location as it supports an urban lifestyle on a moderate income. The location is near light rail and the freeway also offering many options for efficient transit to work and recreational activities. It is for these reasons that vacancy will remain extremely low and that the investor will see predictable revenue increases year over year.

The City of Portland has declared a state of housing emergency and temporary measures are in place as they finalize new laws which include requiring landlords to pay moving costs for tenants they would like to evict. In the near future, this temporary measure is predicted to become law, alongside a handful of additional restrictions. This has created an environment where it is very difficult to keep costs low for rehab projects and thus has handicapped investors looking for value-add projects within the city limits. An investor in Parkside Manor would be able to capitalize on the central location of this asset and also avoid this impending legislation as it sits just outside of the City of Portland.

The current owner has successfully repaired some of the units and has proven a higher rent for these upgrades. The buyer of Parkside Manor had the opportunity to strategically rehab and increase rents as the units turn over thus creating a value-add scenario.

INVESTMENT OVERVIEW

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PARKSIDE MANOR

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OFFERING SUMMARY

PROPERTY OVERVIEW

PROPERTY HIGHLIGHTS

• 43 Units – 12 One-Bedrooms, 30 Two Bedrooms, and One Studio

• MAX Light Rail 0.2 Miles Away

• Courtyard, On-Site Laundry, Off-Street Parking, Storage, and Private Patios

Built in 1980, Parkside Manor provides an opportunity for buyers attracted to a stable rental market which has shown continued rental revenue growth. This three-story, well maintained property has 43 units. The unit mix includes 12 one-bedroom and 30 two-bedroom apartments as well as one studio. Tenants are attracted to the amenities offered including, multiple parking spaces, private fenced patios, balconies, on-site laundry facility, a shared courtyard, and storage space with every unit. Ten of the units have been recently remodeled with high end finishes proving a higher market rent.

This asset is located in the dynamic and diverse Rockwood neighborhood which is only a 15 minute drive from downtown Portland. The property has easy access to the city via I-84 East or mass transit MAX Blue line which is just 0.2 miles from the front door. A few blocks away you will find a local Italian restaurant, Giussepe's, and at the intersection with 181st plenty of retail stores, coffee shops, bars and dining establishments. Downtown Gresham's up-and-coming city center, with its colorful farmers market, many local eateries, tap houses, and specialty shops is also just a few miles away.

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PARKSIDE MANOR

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PROPERTY SUMMARY

OFFERING SUMMARY

EXISTING FINANCING

Loan Amount $2,420,000

Loan Type Conventional

Due Date 4/1/2016

Lender Name Umpqua Bank

THE OFFERING

Property Parkside Manor

Price $5,464,800

Property Address 17439 SE Stark St, Gresham, OR

SITE DESCRIPTION

Number of Units 43

Year Built/Renovated 1973

Rentable Square Feet 33,430

Lot Size 1.3 acre(s)

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PROPOSED FINANCING

First Trust Deed

Loan Amount $4,098,600

Loan Type Proposed New

Interest Rate 4.08%

Amortization 30 Years

Loan Term 10 Years

Loan to Value 75%

Debt Coverage Ratio 1.29

INTERIORS

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AERIAL PHOTOGRAPH

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AERIAL PHOTO

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AERIAL PHOTO

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FINANCIAL

ANALYSIS

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FINANCIAL ANALYSIS

PARKSIDE MANOR

RENT ROLL SUMMARY

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FINANCIAL ANALYSIS

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RENT ROLL DETAIL

FINANCIAL ANALYSIS

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RENT ROLL DETAIL

FINANCIAL ANALYSIS

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OPERATING STATEMENT

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FINANCIAL ANALYSIS

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NOTES

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FINANCIAL ANALYSIS

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PRICING DETAIL

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ACQUISITION FINANCING

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MARCUS & MILLICHAP CAPITAL CORPORATION CAPABILITIESMMCC—our fully integrated, dedicated financing arm—is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and terms.

We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of financing options.

Our dedicated, knowledgeable experts understand the challenges of financingand work tirelessly to resolve all potential issues to the benefit of our clients.

National platform operating

within the firm’s brokerage offices

$5.1 billion total national

volume in 2016

Access to more capital sources than any other firm in the industry

Optimum financing solutions to enhance value

Our ability to enhance buyer pool by expanding finance options

Our ability to enhance seller control

• Through buyer qualification support

• Our ability to manage buyers finance expectations

• Ability to monitor and manage buyer/lender progress, insuring timely, predictable closings

• By relying on a world class set of debt/equity sources and presenting a tightly underwritten credit file

WHY MMCC?

Closed 1,651 debt and equity

financings in 2016

FINANCIAL ANALYSIS

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GROWTH RATE PROJECTIONS

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FINANCIAL ANALYSIS

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CASH FLOW

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MARKET

OVERVIEW

MARKET OVERVIEW

PORTLAND-VANCOUVEROVERVIEW

1

The Portland-Vancouver metro is located near the confluence of the Columbia and Willamette rivers and stretches across the Oregon border into Washington State. The region is composed of Multnomah, Clackamas, Columbia, Washington and Yamhill counties in Oregon, and Clark and Skamania counties in Washington. Mount Hood and the Cascade Range stand to the east, and the Oregon Coast Mountain Range lies to the west. The metro contains approximately 2.4 million residents, with more than 600,000 people residing in Portland, the area’s most populous city.

MARKET OVERVIEW

METRO HIGHLIGHTS

HIGH POPULATION GROWTHThe Portland-Vancouver metro has recorded more than 20 years of positive net migration thanks to expanding industries.

ALTERNATIVE-ENERGY INDUSTRYAlternative-energy companies are attracted to the local educated workforce and research institutions and are locating within the region.

LOW BUSINESS COSTSThe cost of doing business is among the lowest on the West Coast, supported by no state income tax in Washington and no sales tax in Oregon.

PARKSIDE MANOR

MARKET OVERVIEW

ECONOMY§ Lower land costs than other West Coast metros, a skilled labor pool and affordable,

abundant power attract companies to the region. The favorable tax structure, with no state income taxes in Washington and no sales tax in Oregon, also lures businesses.

§ The metro’s economy has shifted from timber to industries that include athletic and outdoor activities, clean tech, advanced manufacturing and software.

§ A diverse group of companies based in the metro include Nike, Daimler, Oregon Iron Works, Intel and IBM.

SHARE OF 2016 TOTAL EMPLOYMENT

MAJOR AREA EMPLOYERS

Providence Health & Services

Oregon Health and Sciences University

Portland State University

Kaiser Foundation Health Plan of the NW

Legacy Health System

Nike, Inc.

Wells Fargo

Fred Meyer Stores

U.S. Bank

Intel Corp.* Forecast

2

MANUFACTURING11%

GOVERNMENT

HEALTH SERVICESEDUCATION AND

+OTHER SERVICES

4%

LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES

18%AND UTILITIES

TRADE, TRANSPORTATION CONSTRUCTION

PROFESSIONAL ANDBUSINESS SERVICES

2%INFORMATION

16%

5%

14% 10% 6%

15%

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MARKET OVERVIEW

DEMOGRAPHICS

SPORTS

EDUCATION

ARTS & ENTERTAINMENT

§ The metro is expected to add nearly 130,000 people through 2021, resulting in the formation of nearly 50,000 households.

§ A median home price well-above the U.S. level has afforded 60 percent of households to own their home, which is below the national rate of 64 percent,.

§ Of residents age 25 and older, 34 percent hold bachelor’s degrees, and 12 percent have also obtained a graduate or professional degree.

The metro contains more than 37,000 acres of parks and provides numerous opportunities

for outdoor enthusiasts, including activities at Mount Hood and on the Hood River. The

metro lies 60 miles east of the Pacific Ocean, with 330 miles of beaches along the Oregon

coast. Professional sports teams represent basketball, soccer and hockey. Cultural

activities can be found at various local venues, including the Portland Art Museum, World

Forestry Center Discovery Museum and the Portland Children’s Museum, and plays are

staged at the Portland Center for the Performing Arts. Major colleges and universities

including Lewis and Clark, Pacific University, the University of Portland and Portland State

University. The University of Oregon and Oregon State University are nearby.

37.72016

MEDIAN AGE:

U.S. Median:

37.7

$60,9002016 MEDIAN

HOUSEHOLD INCOME:

U.S. Median:

$54,500

2.4M2016

POPULATION:

Growth2016-2021*:

5.2%

933K2016

HOUSEHOLDS:

5.7%

Growth2016-2021*:

QUALITY OF LIFE

3

2016 Population by Age

0-4 YEARS

6%5-19 YEARS

19%20-24 YEARS

6%25-44 YEARS

30%45-64 YEARS

26%65+ YEARS

13%

* Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

PARKSIDE MANOR

MARKET OVERVIEW

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PORTLAND METRO AREA

Substantial Rent Growth Drives Demand In Portland’s Secondary Submarkets

High cost of homeownership fuels rental demand. Portland’s lower cost of doing business compared

with other West Coast metros and its highly skilled workforce will underpin hiring in 2017. Companies

including Nike, DiscoverOrg and Simple Financial are expanding local operations, bringing higher-paying

jobs to the metro and driving household formation. Despite rising incomes, the metro’s skyrocketing home

prices and the cost of a down payment will push many individuals to apartments. Developers have

responded, delivering thousands of new rentals. Several Class A complexes designed to target higher-

income households are slated for completion this year. While completions will moderate from the cycle high

registered last year, vacancy will inch up as new complexes begin to lease. As vacancy remains below 4

percent and demographics strengthen, apartment rents will register another year of strong growth.

Tenant demand for lower rents draws buyers to suburban properties. Tight apartment vacancy and a

healthy economy will maintain investor interest in Portland. As rents rise for an eighth consecutive year,

some tenants will seek units in secondary submarkets for affordability, fueling buyer demand in these areas.

In particular, value-add opportunities within Gresham, Salem and Vancouver, where higher rents can be

captured, will be targeted. On average, a well-located Class B/C asset in these locales will trade with yields

in the low-5 to high-6 percent range while a Class A property in central Portland can start as low as 3

percent. Metrowide, multifamily assets typically trade with cap rates in the mid-5 percent span. Additionally,

Portland’s average yield is nearly 150 basis points higher than the average in California markets, motivating

out-of-state investors to make acquisitions in the area. The competitive bidding environment may place

further downward pressure on cap rates and elevate property values this year.

*Estimate ** ForecastSources: Marcus & Millichap Research Services; BLS; CoStar Group, Inc.

MARKET OVERVIEW

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PORTLAND METRO AREA

2017 Market Forecast

Portland climbs two rungs on its sub-4 percent vacancy and one of the

highest rates of rent growth nationwide.

This year, Portland employers will add 26,000 jobs. In 2016, roughly 28,000

positions were created, primarily in the trade, transportation and utilities

sector.

Developers are on track to complete more than 4,600 apartments in 2017.

Last year, 6,500 units were added to inventory.

The vacancy rate will tick up 20 basis points this year to 3.6 percent as

completions enter a period of lease-up. In 2016, the rate rose 30 basis

points.

The average effective rent will surge 7.1 percent in 2017 to $1,371 per

month, a decline from last year’s 10.1 percent increase.

Corporate expansions will generate new housing needs and elevate the

performance of assets near major employment hubs. Additionally, high

returns will lure California buyers to Portland.

* Estimate ** ForecastSources: Marcus & Millichap Research Services; CoStar Group, Inc.; Real Capital Analytics

NMI Rank

6, up 2 places

Employment

up 2.2%

Construction

4,600 units

Vacancy

up 20 bps

Rent

up 7.1%

Investment

PROPERTY NAME

MARKETING TEAM

PARKSIDE MANOR

DEMOGRAPHICS

Source: © 2016 Experian

Created on June 2017

POPULATION 1 Miles 3 Miles 5 Miles§ 2021 Projection

Total Population 33,749 163,640 327,882

§ 2016 Estimate

Total Population 32,643 156,698 312,102

§ 2010 Census

Total Population 30,116 145,205 289,415

§ 2000 Census

Total Population 26,560 124,152 247,125

§ Daytime Population

2016 Estimate 20,536 123,532 263,075

HOUSEHOLDS 1 Miles 3 Miles 5 Miles§ 2021 Projection

Total Households 11,193 59,638 119,338

§ 2016 Estimate

Total Households 10,786 56,711 112,943

Average (Mean) Household Size 2.91 2.68 2.67

§ 2010 Census

Total Households 10,095 53,026 105,583

§ 2000 Census

Total Households 9,215 46,306 91,373

Growth 2015-2020 3.77% 5.16% 5.66%

HOUSING UNITS 1 Miles 3 Miles 5 Miles§ Occupied Units

2021 Projection 11,193 59,638 119,338

2016 Estimate 11,045 57,766 114,989

Owner Occupied 4,354 29,204 60,413

Renter Occupied 6,432 27,507 52,530

Vacant 259 1,055 2,046

§ Persons In Units

2016 Estimate Total Occupied Units 10,786 56,711 112,943

1 Person Units 24.52% 26.56% 26.13%

2 Person Units 27.99% 30.96% 31.28%

3 Person Units 16.12% 16.16% 16.42%

4 Person Units 13.14% 12.78% 13.11%

5 Person Units 9.09% 7.06% 6.98%

6+ Person Units 9.14% 6.48% 6.07%

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles§ 2016 Estimate

$200,000 or More 0.63% 1.59% 1.87%

$150,000 - $199,000 1.33% 2.42% 2.61%

$100,000 - $149,000 7.99% 10.61% 11.48%

$75,000 - $99,999 9.96% 12.16% 12.75%

$50,000 - $74,999 17.45% 20.34% 20.55%

$35,000 - $49,999 14.72% 14.75% 14.67%

$25,000 - $34,999 13.79% 11.00% 10.68%

$15,000 - $24,999 13.98% 12.51% 11.94%

Under $15,000 20.15% 14.62% 13.44%

Average Household Income $48,852 $59,803 $62,731

Median Household Income $36,962 $46,658 $49,163

Per Capita Income $16,382 $21,905 $22,962

POPULATION PROFILE 1 Miles 3 Miles 5 Miles§ Population By Age

2016 Estimate Total Population 32,643 156,698 312,102

Under 20 31.30% 27.20% 26.86%

20 to 34 Years 24.23% 22.13% 22.15%

35 to 39 Years 7.23% 6.62% 6.92%

40 to 49 Years 12.55% 12.85% 13.27%

50 to 64 Years 15.30% 18.13% 18.22%

Age 65+ 9.41% 13.08% 12.58%

Median Age 31.84 35.48 35.69

§ Population 25+ by Education Level

2016 Estimate Population Age 25+ 20,230 103,888 208,135

Elementary (0-8) 8.31% 4.81% 4.40%

Some High School (9-11) 14.09% 10.20% 9.47%

High School Graduate (12) 32.95% 29.70% 28.82%

Some College (13-15) 23.96% 26.77% 26.47%

Associate Degree Only 6.53% 8.73% 8.87%

Bachelors Degree Only 7.34% 12.57% 13.98%

Graduate Degree 3.01% 4.96% 5.75%

§ Population by Gender

2016 Estimate Total Population 32,643 156,698 312,102

Male Population 50.45% 48.94% 49.23%

Female Population 49.55% 51.06% 50.77%

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IncomeIn 2016, the median household income for your selected geography is $36,962, compare this to the US average which is currently $54,505. The median household income for your area has changed by 5.77% since 2000. It is estimated that the median household income in your area will be $42,838 five years from now, which represents a change of 15.90% from the current year. The current year per capita income in your area is $16,382, compare this to the US average, which is $29,962. The current year average household income in your area is $48,852, compare this to the US average which is $78,425.

PopulationIn 2016, the population in your selected geography is 32,643. The population has changed by 22.90% since 2000. It is estimated that the population in your area will be 33,749.00 five years from now, which represents a change of 3.39% from the current year. The current population is 50.45% male and 49.55% female. The median age of the population in your area is 31.84, compare this to the US average which is 37.68. The population density in your area is 10,361.87 people per square mile.

HouseholdsThere are currently 10,786 households in your selected geography. The number of households has changed by 17.05% since 2000. It is estimated that the number of households in your area will be 11,193 five years from now, which represents a change of 3.77% from the current year. The average household size in your area is 2.91 persons.

EmploymentIn 2016, there are 4,292 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 44.65% of employees are employed in white-collar occupations in this geography, and 55.00% are employed in blue-collar occupations. In 2016, unemployment in this area is 9.50%. In 2000, the average time traveled to work was 32.00 minutes.

Race and EthnicityThe current year racial makeup of your selected area is as follows: 62.19% White, 6.71% Black, 1.68% Native American and 6.44% Asian/Pacific Islander. Compare these to US averages which are: 70.77% White, 12.80% Black, 0.19% Native American and 5.36% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 30.55% of the current year population in your selected area. Compare this to the US average of 17.65%.

PROPERTY NAME

MARKETING TEAM

PARKSIDE MANOR

HousingThe median housing value in your area was $194,513 in 2016, compare this to the US average of $187,181. In 2000, there were 4,284 owner occupied housing units in your area and there were 4,931 renter occupied housing units in your area. The median rent at the time was $560.

Source: © 2016 Experian

DEMOGRAPHICS

34

www.MarcusMillichap.com

Michael Shall

Senior AssociateAssociate Member, National Multi Housing GroupPortland OfficeTel: (503) 200-2067

Fax: (503) 200-2010

michael.shall@marcusmillichap.com

License: OR 201102054

Bouba Traore

AssociateAssociate Member, National Multi Housing GroupPortland OfficeTel: (503) 200-2061

Fax: (503) 200-2010

boubacar.traore@marcusmillichap.com

License: OR 201215654

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