Portland Apartment Market Sales History 2012-2017...some very good returns erase the abysmal years of 2009 and earlier. 2013 – Finding reasonably priced properties in good locations

1234 SW 18th Ave., Suite 102 • Portland, OR 97205 • (971) 888-4010

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Steve Morris Vice President Principal Broker – OR

Managing Broker – WA

[email protected] • 503.970.4593 www.IMGNorthwest.com

OR License 200202054 | WA License 24512 1234 SW 18th Ave. Suite 102, Portland OR 97205

Portland Apartment Market

Sales History 2012-2017

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Steve Morris / VP IMG Northwest / (503) 970-4593 / [email protected]

2012-2017 Portland Apartment Sales

Introduction ................................................................................................................................... 3

2012-2017 Portland Apartment Market Comments ..................................................................... 4

2012-2017 Year by Year Comments / Forecast .......................................................................... 7

2012-2017 Portland Apartment Market Comments ................................................................. 9

4 County Sales Metrics ............................................................................................................ 10

New Construction Overview ...................................................................................................... 14

New Construction Trends ....................................................................................................... 15

2017 Sales by County ................................................................................................................... 16

2017 Sales by Neighborhood ....................................................................................................... 20

Portland Central / West ........................................................................................................... 21

Portland SE/NE/North (West of 82nd Avenue) ..................................................................... 21

Beaverton/Hillsboro/Tigard .................................................................................................... 22

South Portland Suburbs .......................................................................................................... 22

Vancouver ................................................................................................................................ 23

Portland (East of 82nd) and Gresham ..................................................................................... 23

2012 - 2017 Sales by Complex Size ............................................................................................... 25

Complexes with 100+ Units ..................................................................................................... 26

Complexes with Less Than 100 Units ..................................................................................... 26

2012-2017 Sales by Decade Built .................................................................................................. 28

All Inventory by Decade Built ................................................................................................. 29

2012-2017 Sales by Decade Built Detail ................................................................................... 30

2017 Largest Sales by Gross $, $/Unit & $/SqFt .......................................................................... 33

2017 Largest Sales by County ...................................................................................................... 35

Clackamas - 2017 Top 10 Sales by Total $ ................................................................................ 36

Clark (WA) - 2017 Top 10 Sales by Total $ ............................................................................... 36

Multnomah - 2017 Top 10 Sales by Total $ .............................................................................. 36

Washington - 2017 Top 10 Sales by Total $ ............................................................................. 36

2012-2017 Largest Sales by Gross $ ............................................................................................. 37

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Introduction

We hope this report helps you understand the Portland rental market as of Spring 2018 and how you can make money. We are always happy to provide market evaluations of your properties value along with suggestions on how to increase NOI. Increasing NOI should be paramount whether you are holding or selling your units. It never hurts to know the value of what you own in the current market. As a buyer, this information should give guidelines on what to expect to pay, but every property is unique and you need to determine an accurate value using your own financial analysis. If you would like: - Further detail or breakdowns of this information or - A more readable copy of anything here or - Similar information tailored to your neighborhood or ZIP code(s) or - To be included on our monthly eMail of individual apartment sales - FREE copy of our 80-page book – “Buying, Selling and Operating Apartments – Using

Financial Analysis” Please contact me at:

Steve Morris [email protected]

(503) 970-4593 IMG Northwest

1234 SW 18th, Suite 102 Portland, OR 97204

Of course, any in depth analysis of the Portland market is available – Let us know how you’d like to “slice” the market. In addition, if you’d like an objective analysis of your apartments without obligation, let us know.

mailto:[email protected]

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2012-2017 Portland Apartment Market Comments

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The biggest variable driving operations has been income derived from apartments. It’s ranged from low (2009 meant few buyers and few renters) to high (2016) demand. 2017 saw a plateau in rent growth plus new regulations regarding rent control in Oregon may affect all properties as a limiter. Instead of increasing rents, look at bettering the quality of your tenant stock, remembering one bad tenant can cost one half years rent. The emerging focus for owners will be a stable tenant base. The past few years of 10%/year rent increases. To get good tenants so you may want to ask your property manager:

1) Is your advertising effective and are we stating all the positive things about our apartment compared to the competition?

2) Are your on-sites tracking applications and following up? 3) Is my asking rent in line with the competition or can I succinctly justify higher

asking? 4) What’s my online reputation? – You need a plan to respond to any bad online

comments immediately Managing expenses. Be strategic with repairs that may be cheaper now versus waiting. Issues like moisture invasion should be addressed as soon as possible. Ongoing utility usage, merit close examination whether curbing use (desired) or off-loading the cost onto tenants (bill-backs). You own a valuable income-generating asset. If inflation recurs, it should provide asset protection and income growth in worth at the rate of inflation. It is worth devoting some of your income to protecting and preserving that asset.

Demand for larger complexes weakened. In 2017, the exodus of large buyers hit the total gross sales dollars which decreased by 50% from 2016. Buying quality properties in good locations still means you have to reach on pricing (see the neighborhood section). However, paying extra means your asset will hold its value better and grow at a higher rate (cf. neighborhood metrics section) than average.

There are still good buying opportunities in lower-priced outlying areas. To paraphrase Warren Buffet - You make your gain when you buy. Demand for smaller complexes remains strong and the relative stability of investments in multi-unit housing.

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Sellers not being persuaded- The factors encouraging inaction by owners: a) They are making good money after the tumult of 2009. b) Finding few replacement properties for a 1031 exchange. c) Impression that prices will keep increasing from brokers trying to buy listings. d) Still getting a good return especially if long-term owners. 2017 leasing issues - Owners will need to compete for better-quality tenants – Especially on

high-end properties. The question is - How many tenants are there willing and able to pay $2500+/month for a 2-bed unit? Focus on what you can do to improve the attractiveness of your apartments to good tenants including energy efficiency, water-use management and strategic improvements. Make sure you know what your online reputation is and have a plan to counter any bad reviews that get posted.

Topping out in the rental market. The damping factor are incomes (Portland isn’t the strongest at creating well-paying jobs). Rents have gone up 50%+ since 2011, tenants may either go into roommate shares or maybe back to mom’n’dad or just leave town for the next “coolest” place. Available investment alternatives for sellers: 1) Retail properties are getting slammed, especially on higher rent. If you have the skills

managing tenant base in strip malls, these can have good returns, especially if well-located and a stable anchor tenant.

2) Office space – Location is paramount when buying these. B/C properties also need amenities for tenants that entertain clients.

3) Industrial – You need to analyze these by the tenant and lease and stability of the tenant’s business.

4) Single-tenant net leases (STNL) – You’re buying the cash flow from a lease. Make sure you understand the cash-flow and the “outs” for a tenant in the lease you buy. Usually in custom built buildings (burger and drug stores), the tenant writes his own lease which works in their favor. Then you have the ongoing fight of being right-sized – If a tenant loses business he may exit and if he grows wildly he may move to a bigger space.

5) DSTs / private REITs – These qualify for a 1031, yet usually have fixed returns (like 5%), which implies you are giving the manager upside in rents.

6) Syndications / TICs – Like IMG - We look for properties with value-add in growth markets. You share in the profits proportionally and potential losses.

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2012-2017 Year by Year Comments / Forecast

Note: Sample Interest Rates on 5 yr balloon term >$500K borrowed 2012 – Smaller investors re-enter the market and the lure of low interest rates and rising rents proves irresistible. Landlords are starting to make good money and have a rent market in their favor. Finding reasonably priced replacement properties in good locations is an issue for potential 1031s. Now the battle is finding owners willing to sell at all after having some very good returns erase the abysmal years of 2009 and earlier. 2013 – Finding reasonably priced properties in good locations becomes an issue. The 2009 buyers sell and turn a very nice profit as available inventory dries up forcing prices up. The spread between average Cap Rates (6.59%) and average lending rates (4.25%) is > 12%. Last year before take-off in apartment pricing. 2014 – Huge jump in apartment pricing of 20%+. Total transaction $ surpass previous all-time high (2011). The market is heating up with institutional buyers leading the way with a 30% jump in average $/unit from 2013 for larger complexes. 2015 –Peak transactions (286). Total transaction $ surpass sets record easily. Buyer demand swamps inventory resulting in pricing being driven by buyers. Sellers still are seeing good income on properties, however, the threat of rent-control like rules in Portland is a threat. Meanwhile, new construction (see later) hits another high with money still cheap. Interest rates hit low of 3.95% on average. 2016 –An all-time high in gross sales dollars ($2.97B). A large amount of new construction inventory starting to be brought on-line. In Portland, the threat of government interference thru soft rent controls in Portland. On the horizon, permitting changes require part of new construction to be low-income units (Inclusionary Zoning).

5 yr Lending

Rate Avg $/unit Avg $/SqFt Avg CapRate Deals

Total Units

Sold Avg Transaction Total Sales

2012 4.50% $91,389 $108.57 6.51% 174 9314 $5,845,464 $1,017,110,781

2013 4.25% $91,274 $108.67 6.59% 210 11234 $5,613,445 $1,178,823,439

2014 4.13% $119,988 $128.83 6.14% 201 10903 $7,754,311 $1,558,616,542

2015 3.95% $126,451 $151.39 5.75% 286 15652 $8,163,488 $2,334,757,480

2016 4.25% $149,571 $168.88 5.47% 275 16012 $10,803,280 $2,970,902,130

2017 4.25% $177,816 $203.53 5.36% 221 8815 $7,883,877 $1,742,336,833

5 yr Avg 4.17% $133,020 $152.26 5.86% 238.6 12523 $8,043,680 $1,957,087,285

5 Yr Total 1193 62616 $9,785,436,424

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2017 – Looks to be a watershed year. There was a 40% drop from 2016 in gross sales dollars. Even more new construction inventory being brought on-line. Rents are returning to their normal 3%-5% year-over-year increase with a vacancy uptick in the 2nd half of 2017. The rental market for rent gains and price increases seems to be returning to a more normal level as opposed to the hot years of 2013-2017 for sales price and rent growth

Now what for 2018? Questions to be answered:

1) Are rents peaking? 2) Will income keep up with expenses and what can an owner do to control expenses? 3) With inflated sales prices are we hitting a buyer limit? Class A property gross $ sales

have dropped 50% from 2016 to 2017. 4) Will an interest rate increase reverse pricing trends? 5) It’ll be more competitive for tenants which means more lead generation,

advertising, watching your online reputation, monitoring your rent pricing and tenant retention.

We stay current on the Portland rental market. We send out a monthly eMail detailing individual apartment sales >$450K. If you’d like to be included, let us know. Knowing your property and how it compares to neighboring properties helps make well-informed decisions. With unsolicited offers increasing, you need to know where you stand and if an offer is worth considering. We’ve helped owners with weatherization grants, finding new ways to do utility bill-backs that are not intrusive and provide financial analyses that set a value based on your rents and expenses compared to the neighborhood averages.

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2012-2017 Portland Apartment Market Comments

Whether you SELL or HOLD, job number one is to increase your Net Operating Income (NOI). If you can raise top-line income thru rents, fees or bill-backs - Great. However, you’re always prey to the market for what income you can drive. What you have more control over are expenses. Whether this means reducing utility usage and getting/keeping better tenants you should make NOI growth an ongoing action item. Ultimately, attracting and keeping good tenants is the best investment of effort you can make. Keeping maintenance manageable is important. If you are making a maintenance decision, you should prioritize, in order:

- Tenant safety issues – Way too much liability and too many tenant lawyers. - Moisture invasion (the sooner you address, the cheaper it will be to fix) - Energy efficiency – Helps your tenants and adds value to your property - Aesthetics - Your tenants look no better than your apartments. - Landscaping improvements – Beyond tenant attraction, the payback is low - The

more you spend on new landscape, the more it’ll cost to maintain. IMG Northwest specializes in brokerage and TIC syndication. If you’d like an assessment or opinion of value - Call now. You’re under no obligation and you gain useful information. We have 30+ years of property management and brokerage experience that you can exploit. We can provide a very useful financial analysis including:

- Opinion of current value and suggestions on how to increase it - Analysis of expenses compared to area averages - Sales comparables to justify pricing - Rent comparables to see if you’re getting enough.

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4 County Sales Metrics

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New Construction Overview

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New Construction Trends

New construction It’s difficult to build a new apartment building today that can compete with existing construction. Most new construction is happening in higher rent parts of town (downtown, close-in and Beaverton-Hillsboro). With builders looking at SDCs (System Development Charges) and fees pushing $25K per UNIT, this comes out of anticipated return (at 5% debt that’s almost $100/month to service soft costs). Add in Inclusionary Zoning (forcing builders to include income restricted units) and Portland is in a new construction lull.

NEW CONSTRUCTION BY COUNTY

The continuing attraction of Washington County (Beaverton and Hillsboro) as a rental market will be due to the availability of high-income jobs at places like Nike, Intel and their support businesses. Projections have Washington County exceeding Multnomah County in jobs and population by 2030 with development following suit.

Portland Building Permits – Have dropped considerably in 2017. Some of this is due to over-building and some is due to Inclusionary Zoning rules adopted by Portland Bureau of Development Services. Non-traditional housing – New projects include micro-units, group housing like college quads, no allowance for cars and active green designs. It’ll take time to see what sticks, but keeping current can give you ideas for upgrades on your apartments. However, sometimes markets can only support one outlier of a different rental arrangement.

Projects Units Projects Units Projects Units Projects Units Projects Units

2012 3 510 3 422 15 964 4 621 25 2517

2013 4 586 12 2000 59 3698 9 1124 84 7408

2014 4 664 7 656 55 4001 15 3008 81 8329

2015 4 250 8 956 47 2874 17 1881 76 5961

2016 6 470 16 2430 96 10210 20 3091 138 16201

2017 11 1696 10 757 102 7758 15 1900 138 12111

2018 5 285 26 5491 294 21153 22 3687 347 30616

2019 4 713 1 116 89 7639 6 1043 100 9511

Total New Const 41 5174 83 12828 757 58297 108 16355 989 92654

All Const 647 36629 745 49114 4552 164985 1158 80613 7102 331341

New/All Const 6.34% 14.13% 11.14% 26.12% 16.63% 35.33% 9.33% 20.29% 13.93% 27.96%

Clack Clark Mult Wash 4 County

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2017 Sales by County

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2017 Sales by County

Here’s a summary of all sales in the Portland METRO (Clark, Clackamas, Multnomah and Washington counties) markets for 2017.

Following are comments on each county and comparison to averages from 2012-2017 (% difference/total is relative to overall 4 county averages for 2017).

Clackamas – Most growth is in Tualatin and Clackamas (city) / Happy Valley. Clackamas county has some of the highest income towns (Lake Oswego, West Linn and Wilsonville) and highest asset values. Most job growth happens outside the county without too many major employers excepting retail outlets in Happy Valley (Clackamas Town Center) and Tualatin (Bridgeport). A big issue for tenant appeal is access to I-5/I-205 and/or MAX.

Clark (WA) - Clark county operates without an urban boundary unlike the three Oregon counties, so there is plenty of area for development. However, there are few major employers outside of health care and retail. Washington does not have an income tax and Vancouver does have lower average utility prices. With the threat of rent control looming in Oregon, Vancouver (Clark and Cowlitz counties) is becoming more attractive to investors. We expect pricing to reflect this and will be the firmest demand.

Clackamas Clark (WA) Multnomah Washington Average / Total

Avg $/PerUnit $158,693 $176,075 $185,381 $162,902 $170,763

Relative to Average -7.1% 3.1% 8.6% -4.6%

Avg $/SqFt $166.93 $164.96 $220.69 $179.13 $182.93

Relative to Average -8.7% -9.8% 20.6% -2.1%

Avg CapRate 6.04% 5.89% 5.12% 5.42% 5.62%

Relative to Average 7.6% 4.8% -8.9% -3.6%

Avg Transaction $8,335,172 $9,707,009 $5,669,991 $15,826,000 $9,884,543

Relative to Average -15.7% -1.8% -42.6% 60.1%

Transactions 29 14 143 35 221

% of Total 13.1% 6.3% 64.7% 15.8%

Gross $ $241,720,000 $135,898,132 $810,808,709 $553,909,992 $1,742,336,833

% of Total 13.9% 7.8% 46.5% 31.8%

Pop Growth B B B B

Job Growth C+ C+ C+ B

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Multnomah – Is the economic center of the area, however, the inability to attract large non-governmental employers is beginning to show. Multnomah remains the most expensive part of the METRO area. Portland has one of the more activist govts for tenant rights and the highest soft costs in the area for builders. Portland has introduced soft rent caps and inclusionary zoning forcing builders into including LIH units Washington – In 15 years it’s population is projected to pass Multnomah county. A lot of fuel for growth is based on the high-tech business (Intel, Synopsys, Genentech and Salesforce.com) centered on Hillsboro and Nike in the Beaverton area. In addition, there is more land available for construction of residential and plant, so larger complexes exist as a focus for developers. Here’s a VERY rough estimate of the total number of rentable units by county and complexes

Clackamas Clark (WA) Multnomah Washington Total

Complexes 671 727 4443 1145 6986

Indiviual Units 34716 43414 159389 78700 316219

% of Total Units 11.0% 13.7% 50.4% 24.9% 100%

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2012-2017 Sales By County

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2017 Sales by Neighborhood

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2012-2017 Sales by Neighborhood

Total Sales all 4 Portland Metro Counties (Neighborhoods are sorted by ascending 5 year average Cap Rates)

Portland Central / West

Central Portland and close-in West – Prices are higher, but you get asset preservation since it’s still a very in demand neighborhood. Most new construction is either income-qualified or high-end (>$3/sqft/month rent). Operating expenses (especially water/sewer) and property taxes (due to bonds) are among the highest in the metro area. Two other areas are siphoning off high rents – Close-in East Portland and Hillsboro / Beaverton. The gross dollar sales lead is slipping to the Beaverton-Hillsboro and Washington county area due to job growth and availability of amenities. If you’re thinking of buying an older building (pre-1930), be aware of Portland’s seismic retrofit plans – I can send info.

Portland SE/NE/North (West of 82nd Avenue)

Close-in East Portland (West of 82nd to the Willamette) - This is an in-demand neighborhood and continues to appreciate faster than average. Most new construction is infill (<30 units). Access to amenities is paramount and smaller units pre-dominate. Older construction means

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smaller (20-unit range) complexes which reflects the relative age of the district and lack of land for newer and larger. Close-in East Portland (West of 82nd to the Willamette) - (cont’d) There are hot spots for new development along traffic corridors like SE Hawthorne, SE Division, NE Alberta, N Williams, Sellwood (SE Milwaukie) and N Mississippi are maturing into parts of town with high walk-scores. This is probably the center of creative job creation.

Beaverton/Hillsboro/Tigard

Beaverton/Hillsboro – With a lot of rental inventory, most jobs and population growth is happening here. Job growth (especially in high-tech) should continue to push demand and new construction absorption up. A lot of growth will be dependent on Intel and Nike. Areas like Hillsboro along Cornell Road and Beaverton along SW Murray and SW Cedar Hills have amenities plus light-rail (MAX) service to downtown Portland thru the heart of both towns. There are a wide range of properties in vintage, size and grade. Most transactions have been larger (>100 units) complexes since smaller owners are holding.

South Portland Suburbs

Portland South Suburbs (Wilsonville / Lake Oswego / Happy Valley / Clackamas / Oregon City / Milwaukie / West Linn / Tualatin) – The demographics span from the richest cities (Lake Oswego / West Linn) to the city with fastest growing percentage of LIH (Low-income housing) in Oregon - Tualatin. Retail developments in Clackamas Town Center and Bridgeport and amenities are the highest after downtown. Readily available land allows larger (100-unit average) complexes. Job growth and incomes are average for the Portland - Metro area. Property taxes and operating expenses are average.

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Vancouver

Vancouver – Benefits from lower operating costs (especially utilities) and less govt interference than Oregon. Rent demand seems to be steady. Most transactions are in the larger complexes. Vancouver is not limited by the Urban Growth Boundary set by METRO (Portland regional government) and there are a lot of large spaces available with good access to I-5 and I-205. New construction is not anticipated to have a large effect on existing stock.

Portland (East of 82nd) and Gresham

Portland East Suburbs (East of 82nd Avenue) – These are the lowest rent rates in town along with Vancouver. Lower vacancies and higher prices close-in drive tenants out to these markets. There is ongoing demand since this neighborhood will usually have the low rent and higher inventory for tenants to choose from. There is not a lot of new construction planned in this neighborhood besides LIH projects and pricing for existing complexes is lowest in the area.

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2012 - 2017 Sales by Complex Size

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2012 - 2017 Sales by Complex Size Larger complexes sell at lower Cap Rates. Yet large investors face expensive entry prices, questions about the continued growth of the Portland market and competition from new construction. For the very large investor, Portland is a small market with only about 20 existing and proposed complexes >500 units. In terms of gross sales dollars, complexes > 100 units make up almost 75% of all sales. What is interesting is that the ratio has held steady for the past five years until 2017 with a drop-off in large sales.

Complexes with Greater Than or Equal (GTE) to 100 Units

With larger complexes you’ll pay a higher admission fee, but in return, you’ll have the security of higher tenant incomes and asset preservation due to better locations. Compared to smaller complexes, you’ll pay roughly a third more in $/unit and $/sqft. This is due to private REIT buyers anxious to place money that may move on if they can’t find deals.

Complexes with Less Than (LT) 100 Units

In 2012, the smaller investor re-entered the market. 2013 to 2014 saw a large bump in pricing. Smaller complexes average 0.5%-1% higher Cap Rates. The smaller investor realizes that of all commercial property, apartments consistently generate income. If you want to get top dollar out of your apartments – Do your maintenance and keep good books to see where your cash is going.

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2012-2017 Sales by Decade Built

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2012-2017 Sales by Decade Built

Older apartments are in better locations. Most pre-1960 construction was close to downtown. However, construction was not on the scale of today’s builders. 20-unit complexes were the norm and close-in units of almost any vintage will be in smaller complexes. These areas are favorites for young renters who value access to amenities while forsaking private cars to minimize the cost of transportation. The 2010 decade represents a big jump in inventory with about 30% of all inventory to be built in the 2010’s. However, most new construction is either in the core, close-in East side or Beaverton to Hillsboro. 90’s construction has 20% of all inventory in the 4 county area. Most 90’s construction happened in outlying suburbs like Gresham, Happy Valley / Clackamas, Tualatin and Vancouver. This spate in new construction means the market will take time to absorb inventory – Today, owners offering concessions during lease-up on new properties.

All Inventory by Decade Built

Pre-1940 1940-1950 1960 1970 1980 1990 2000 2010

Avg $/PerUnit $156,909 $127,565 $101,370 $93,205 $117,591 $126,849 $157,759 $243,356

Avg $/SqFt $193.83 $177.92 $119.99 $108.89 $131.97 $132.17 $147.14 $275.78

Avg CapRate 5.52% 5.69% 6.19% 6.46% 5.75% 5.70% 5.74% 5.06%

Transactions 161 105 256 325 87 171 105 117

Units 2450 2675 6180 10135 11004 22735 6874 9101

Gross Dollars $334,765,853 $351,421,013 $634,378,757 $878,631,337 $1,529,778,636 $3,365,833,773 $1,291,379,966 $2,334,299,332

% of Total 3.10% 3.25% 5.87% 8.13% 14.16% 31.16% 11.96% 21.61%

Pre-1940 1940-1950 1960 1970 1980 1990 2000 2010 All

Complexes 11 20 112 154 66 100 28 44 647

Units 186 925 2880 5678 6406 10136 2666 5603 36629

Complexes 16 18 80 145 71 106 69 85 745

Units 256 351 2182 5456 6809 10692 7626 12926 49114

Complexes 991 451 642 781 138 318 297 784 4552

Units 18776 8619 14808 19895 5469 18774 17931 59735 164985

Complexes 8 39 181 245 109 144 54 109 1158

Units 93 1064 7159 10887 11978 20910 5367 16593 80613

Complexes 1026 528 1015 1325 384 668 448 1022 7102

% of Total Complexes 5.8% 3.3% 8.2% 12.7% 9.3% 18.3% 10.1% 28.6% 100.0%

Units 19311 10959 27029 41916 30662 60512 33590 94857 331341

% of Total Units 14.4% 7.4% 14.3% 18.7% 5.4% 9.4% 6.3% 14.4% 100.0%

4 County Total

Washington County

Multnomah County

Clark County (WA)

Clackamas County

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2012-2017 Sales by Decade Built Detail Pre-1940 - Almost all construction close-in (downtown) to the Willamette river. Before mid-1920’s construction was mostly unreinforced masonry (check with your insurance agent on coverage). City of Portland has new rules for retrofits on URM (unreinforced masonry) buildings. Most units in a studio configuration or SROs.

194x-195x - After World War II Portland witnessed a burst of population and income growth. In addition, housing for all these new residents included single-family residences. Location was a little farther out (West Hills to 39th avenue and North Portland.) Most construction was wood frame and siding, however units became larger including 1- and 2-bedroom complexes. Again, most of these complexes have great locations since Portland didn’t go much beyond 39th/Cesar Chavez to the east.

196x and 197x - Construction trends continued, however the growth of suburbs like Beaverton and Gresham and Vancouver captured a lot of new construction with the availability and low cost of land along with lower soft costs than Portland proper. Also contributing were services and amenities became more common in the suburbs and outer edges of town. Complex sizes began to inch up into the 100+ unit range, but this was just the start. 70s vintage units see to offer the most bang for the buck with lowest $/unit but seem to suffer the ravages of owner neglect and poorer locations.

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198x and 199x - The biggest change was the rapid growth of a “go large or go home” mentality with 100+ unit complexes proliferating in the suburbs with Beaverton-Hillsboro showing a lot of growth thanks to pioneering employers like Intel and Nike. The early 1990s had a large burst of construction in the Gresham area that it is still recovering from. For the first time, the Urban Growth Boundary began to hamper developers of

apartments. The 1990s were responsible for construction of almost 33% of all available units in the 4-county area up thru 1999 - By far the largest decade of growth (barring 201x futures). 200x and 201x - Trends continued with the exception of renewed urban development, especially in areas like the Pearl district. Another trend was the rapid development and collapse of the condo market with conversion siphoning off some rental stock thru 2008. Neighborhoods with high walk-scores along with the desire for workers to have a short commute to jobs like close-in East Portland (Alberta, Division and Hawthorne avenues) and North Portland (Mississippi and Williams) showing a lot of demand by tenants, albeit in smaller complex sizes. However, new construction is overlooking lower rent neighborhoods like East Multnomah county and Clark county.

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Pre-1940 1940-1950 1960 1970 1980 1990 2000 2010

Units Built by Decade

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2017 Largest Sales by Gross $, $/Unit & $/SqFt

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2017 Largest Sales by Gross $, $/unit & $/SqFt

2017 Top 15 Sales by Total $

2017 Top 15 Sales by $/unit (>100 units)

2017 Top 15 Sales by $/SqFt (>100 units)

5 Yr Rank Sold Name Address City Price Units $/PerUnit $/SqFt Yr Built

3 22-Aug-17 Verandas at Overlook 2994 NW Overlook Hillsboro $120,000,000 480 $250,000 $278.12 1995

9 4-Dec-17 Amberglen West 1109 NE 89th Ave HIllsboro $95,000,000 396 $239,899 $255.21 2016

15 13-Dec-17 Arbor Heights 15199 SW Royalty Pky Tigard $81,000,000 348 $232,759 $200.82 1987

22 20-Jul-17 Jory Trail 8520-8750 SW Ash Meadows Blvd Wilsonville $75,000,000 324 $231,481 $183.15 2012

26 20-Dec-17 Yacht Harbor Club 11505 NE Yacht Harbor Portland - NE $68,000,000 174 $390,805 $343.11 2016

31 13-Dec-17 Savier Flats 2244 NW Savier St Portland - Central $60,000,000 179 $335,196 $554.41 2013

36 21-Sep-17 Latitude (nee Sequoia Village) 8411 SE Causey Cir Happy Valley $58,000,000 210 $276,190 $232.00 2007

44 5-Oct-17 Bethany Ridge (SqFt Estimated) 15921 NW Brugger Rd Beaverton $53,461,592 208 $257,027 $270.45 2016

51 25-Oct-17 Heatherwood 765 SW Mt Hood Gresham $51,000,000 264 $193,182 $218.18 1997

61 23-Mar-17 Modera Goose Hollow 2004 SW Jefferson St Portland - Central $47,500,000 134 $354,478 $315.70 2015

63 6-Feb-17 LIH - The Ellington 1610 NE 66th Ave Portland - NE $47,000,000 263 $178,707 $139.27 1950

65 28-Feb-17 StoneRidge at Cornell (Portfolio) 14800 NW Cornell Rd Beaverton $46,500,000 233 $199,571 $244.72 1985

89 20-Dec-17 Alden (nee The Park at Tualatin) 7800 SW Sagert Tualatin $37,566,000 210 $178,886 $230.72 1978

97 28-Feb-17 Silver Oak (Portfolio) 8701 NE 54th St Vancouver $35,150,552 204 $172,307 $178.07 1989

106 28-Feb-17 Sedona At Bridgecreek (Portfolio) 2220 NE Bridgecreek Vancouver $31,046,220 200 $155,231 $176.84 1989






116 26-Dec-17 Century at North Cook 3270 N Vancouver Portland - N $28,528,000 104 $274,308 $491.77 2016





22 20-Jul-17 Jory Trail 8520-8750 SW Ash Meadows Wilsonville $75,000,000 324 $231,481 $183.15 2012

138 9-May-17 Cannery Row 225500 SW Highland Sherwood $22,635,000 101 $224,109 $266.91 2013

140 1-Mar-17 Pioneer Vista 16501 NE 15th Ave Ridgefield $22,000,000 109 $201,835 $183.33 2016






116 26-Dec-17 Century at North Cook 3270 N Vancouver Portland - N $28,528,000 104 $274,308 $491.77 2016

137 3-May-17 Fremont (nee Freedom Center) 1450 NW Pettygrove Portland - Central $22,750,000 150 $151,667 $386.93 2012





138 9-May-17 Cannery Row 225500 SW Highland Sherwood $22,635,000 101 $224,109 $266.91 2013







136 8-Jun-17 Stark Street Crossings (Portfolio) 20433 SE Stark Gresham $22,825,000 130 $175,577 $193.70 2003

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2017 Largest Sales by County

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Clackamas - 2017 Top 10 Sales by Total $

Clark (WA) - 2017 Top 10 Sales by Total $

Multnomah - 2017 Top 10 Sales by Total $

Washington - 2017 Top 10 Sales by Total $

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2012-2017 Largest Sales by Gross $

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2012-2017 Largest Sales by Gross $

Rank Date Name Address City Price Units $/Unit $/SqFt Built

1 11-Nov-16 LaSalle 15021 SW Millikan Way Beaverton $140,000,000 566 $247,350 $239.22 1997

2 11-Dec-16 The Yard 22 NE 2nd Portland - NE $126,680,000 284 $446,056 $367.97 2015


4 18-Nov-16 Eddyline @ Bridgeport 18049 SW Lower Boones Ferry Tualatin $118,100,000 367 $321,798 $344.40 2014

5 19-Jun-14 The Asa 1200-1220 NW Marshall St Portland - Central $105,500,000 231 $456,710 $319.70 2008

6 15-Sep-15 Riverplace Square 1811 SW River Dr Portland - Central $97,200,000 290 $335,172 $324.13 1998

7 30-Nov-16 Seven West at the Trails 14790 SW Scholls Ferry Rd Beaverton $96,000,000 423 $226,950 $276.47 1996

8 20-May-13 Cyan PDX 1720 SW 4th Ave Portland - Central $95,750,000 352 $272,017 $253.42 2009


10 18-Dec-15 Village at Main Street 30050 SW Town Center Loop Wilsonville $95,000,000 464 $204,741 $182.06 1998

11 31-Mar-16 Waterline 2080 NW Front Ave Portland - Central $94,000,000 243 $386,831 $269.23 2015

12 1-Dec-16 Alara Hedges Creek 8900-8975 SW Sweek Dr Tualatin $93,000,000 408 $227,941 $246.28 1998

13 4-Sep-15 Sterling Pointe 14437 SW Teal Blvd Beaverton $91,080,000 630 $144,571 $158.54 1987

14 17-May-16 Breckenridge (Brookdale Glen) 8150 SW Barnes Portland - W $81,500,000 357 $228,291 $298.07 1986


16 21-Aug-14 Rock Creek Landing 3009 NW Overlook Dr Hillsboro $80,000,000 480 $166,667 $185.41 1995

17 1-Dec-16 Tanasbourne Terrace 19000 NW Evergreen Pky Hillsboro $78,340,000 373 $210,027 $207.63 1989

18 14-Oct-16 One Jefferson 1 Jefferson Pky Lake Oswego $78,000,000 348 $224,138 $214.38 1985

19 31-Oct-12 RiverPlace Square 2001-2083 SW River Dr Portland - Central $77,500,000 290 $267,241 $245.96 1993

20 14-Mar-12 LaSalle 15021 SW Millikan Way Beaverton $77,200,000 566 $136,396 $75.16 1997

21 29-Sep-16 Green Leaf Monterey 8640 SE Causey Ave Happy Valley $76,000,000 390 $194,872 $207.68 1990

22 20-Jul-17 Jory Trail 8520-8750 SW Ash Meadows Wilsonville $75,000,000 324 $231,481 $183.15 2012

23 1-Dec-16 The Club at Tanasbourne 2323 NW 188th Hillsboro $72,980,000 352 $207,330 $221.55 1989

24 4-Oct-16 Rowlock (Portfolio) 6350 NE Cherry Dr Hillsboro $70,000,000 255 $274,510 $217.27 2015

25 12-May-16 Cook Street 107 N Cook Portland - N $69,000,000 206 $334,951 $370.65 2014


27 12-Jul-16 The Vue (nee Ione Plaza) 1717 SW Park Portland - Central $63,950,000 308 $207,630 $243.17 1951

28 27-Oct-16 Domaine at Villebois 28900 SW Villebois Dr Wilsonville $63,250,000 274 $230,839 $237.56 2008

29 3-Jun-14 One Jefferson 1 Jefferson Pky Lake Oswego $63,000,000 348 $181,034 $173.16 1987



32 19-Jun-15 Museum Place 1010-1030 SW Jefferson St Portland - Central $59,500,000 140 $425,000 $389.78 2003

33 31-Aug-15 Terrene at the Grove 8890 SW Ash Meadows Cir Wilsonville $59,500,000 288 $206,597 $205.86 2013

34 27-Jan-15 Jory Trail 8520-8750 SW Ash Meadows Wilsonville $59,000,000 324 $182,099 $144.08 2012

35 23-Jan-14 Thorncroft Farms 2120 NW Thorncroft Dr Hillsboro $58,000,000 340 $170,588 $155.27 1998


37 26-Feb-16 Russellville Commons 10320 SE Pine St Portland - SubE $57,850,000 283 $204,417 $234.21 1999

38 28-Nov-12 Cortland Village 6910 NE Ronler Way Hillsboro $56,050,000 360 $155,694 $167.58 1997

39 15-Jan-16 Courtyard Fountains (SENIOR) 1537-1545 SE 223rd Ave Gresham $55,500,000 252 $220,238 $216.98 1999

40 11-Oct-16 Sofi at Cedar Mill 11785 NW Timberview Ln Beaverton $55,000,000 238 $231,092 $121.43 2010

Average $79,545,750 333.0 $255,728 $253.21 2000.6

Documents

Portland Apartment Market Sales History 2012-2017...some very good returns erase the abysmal years of 2009 and earlier. 2013 – Finding reasonably priced properties in good locations