33 Units • Portland, Oregon · 2020. 7. 30. · Portland is home to the headquarters of Fortune...

OFFERING MEMOR ANDUM

33 Units • Portland, Oregon

www.hfore.com • (503) 241.5541

MURRAY MANOR

www.hfore.com • (503) 241.5541

OFFERING SUMMARY

Tours and Inquiries: All tours and inquiries regarding the Murray Manor are to be directed to HFO Investment Real Estate at (503) 241.5541.

Greg Frick • [email protected] in the states of Oregon and Washington.

Murray Manor is an exceptionally well maintained 33-unit apartment asset with an outstanding location on Belmont Street’s popular retail corridor. Originally a hotel built in the 1920s with street-level retail, Murray Manor was converted to an 33-unit apartment property that features studios, one-, two- and three-bedroom units. The majority of Murray Manor’s apartments, approximately 49%, are one-bedroom floor plans averaging 584 sq ft. Much of the original character of Murray Manor’s contruction is intact. The apartments feature hardwood floors, high ceilings with picture rails, clawfooted bathtubs and tiled floors and countertops. Wide hallways with period light fixtures and grand staircases are found throughout the building. Major mechincial systems at Murray Manor have been recently updated including the electrical (2017) and roof (2018). The windows are also newer. Murray Manor’s residents have access to a common area laundry room and plentiful basement storage.

Murray Manor is located in the middle of the 40-block Belmont District retail corridor that numerous local and regional retailers and restaurateurs call home. Both a New Seasons Market and a Fred Meyer grocer are found on Hawthorne Boulevard an easy walking distance less than ½ mile away. Murray Manor is located equidistant between Mt. Tabor Park and Laurelhurst Park, both local attractions with numerous walking paths and green spaces.

Rents at Murray Manor currently average $1,094 per unit or $1.82 per sq ft. The asset could benefit from third-party management to standardize rents and implement utility charges. Murray Manor’ appealing location and outstanding condition make it an attractive investment opportunity for an asset type that rarely comes to market.

UNIT MIXUnit Type Unit Count Avg Sq Ft Total Sq Ft % of Total Units

Studios 10 398 3,975 30.3%

1 Bedrooms 16 584 9,350 48.5%

2 Bedrooms 6 833 5,000 18.2%

3 Bedrooms 1 1,500 1,500 3.0%

Total / Averages 33 601 19,825 100.0%

ASSET SUMMARYProperty Murray ManorAddress 910 SE 37th Avenue

City, State Portland, Oregon 97214

County Multnomah

Year Built 1920

Total Units 33

Approx NR Sq Ft 19,825 sq ft

Avg Unit Size 601 sq ft

Acreage 0.15 acres

Tax Lot(s) R281135

PRICINGPrice $5,675,000Per Unit $171,970

Per Sq Ft $286

Cap Rate 4.86%

2 HFO INVESTMENT REAL ESTATE

PROPERTY HIGHLIGHTS• Exceptionally well-maintained asset

• Updated electric and newer windows

• Popular Belmont retail corridor

• Updated fire systems including sprinklers

• Vintage character

• Central laundry center

• Secured bike storage and additional basement storage

3MURRAY MANOR • 33 UNITS • PORTLAND, OR

6 HFO INVESTMENT REAL ESTATE6 HFO INVESTMENT REAL ESTATE

Murray Manor grand hallways and high ceilings are remanents of its original construction as a hotel.


LIFESTYLE CONVENIENCES AND EMPLOYERS

SE Division St

SE Hawthorne Blvd

SE Belmont St

SE Stark St

E Burnside St

NE Glisan St

César E. Chávez Blvd

NE 47th

SE 47th

SE 12th

Grand Ave

Sandy Blvd

Laurelhurst Park

Laurelhurst Park

Mt. Tabor Middle School

Mt. Tabor Middle School

Grover Cleveland High School

Franklin High School

84

5

213

26

Murray Manor


PORTLAND METRO AREA The Portland Metro Area is one of the strongest apartment markets in the nation, as reflected in strong year-over-year rent growth and consistently tight vacancy. New apartment construction has not caught up to the housing demand created by in-migration.

PORTLAND MARKET SNAPSHOT

*Multifamily NW Apartment Report (April 2019 to April 2020) **Latest figures available from the U.S. Census Bureau American Community Survey (2018)*** United Van Lines annual survey (2019 results)

4.4% Metro-area vacancy

#2 for Oregon in Migration in US

(2019***)

4.2% Year-over-year rent growth*

$75,599 Median household income

(2018**)

54% Millennials 25-34 in Portland

with a bachelor’s degree or higher

8,360 New Portland residents

(2018-2019)

38.3% Metro area renter-

occupied housing rate

4,474 Portland residents

per square mile


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.

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. The U.S. Census Bureau pegged Portland’s Q4 2019 vacancy rate at 3.2% and the U.S. average at 6.4%. Portland metro has the nation’s sixth lowest vacancy rate.

The Multifamily NW Apartment Report survey proved average Fall 2018-19 year-over-year rent growth—not accounting for concessions—at 7.4%.

SKILLED WORKFORCE & STRONG EMPLOYMENTThe city of Portland was the 6th best educated major city in the U.S. in 2017, with 21% of adults having an advanced college degree, lagging behind only Washington DC, Seattle, Boston, Atlanta and San Francisco.

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. Data indicates the area added 31,000 jobs in 2016, 28,000 jobs in 2017, 29,000 in 2018 and 18,000 in 2019.

DIVERSIFIED ECONOMYPortland is home to the headquarters of Fortune 500 companies Nike and Lithia Motors. Fortune 1000 companies headquartered here include Columbia Sportswear, Greenbrier Cos. and Portland General Electric. Fortune 500 companies based outside Oregon with major operations here are Precision Castparts and Intel.

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 have 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 RANKINGS

• No.1 Restaurant City of the Year – Bon Appetit• No.3 Healthiest City in the U.S. – Active.com• No.4 Best City for Biking – Fast Company• No.5 Fittest Cities in America – American College of Sports Medicine

Healthiest Cities to Live– Thrillist.com –

No.7

Best City for an Active Lifestyle– Wallethub –

No.4

No.7Best Cheap Destinations in the U.S.

– U.S. News and World Report –

No.9Best Foodie Cities in the USA


No.2Fiscally Fit Cities

– Sperlings 2019 (FISCALLY not physically) –

No.1Best Food City in America

– WalletHub (2019) –

No.8Best Place to Live in the U.S.


No.5Best Cities to Work from Home

– Yahoo Finance (2020) –

No.4Best Cities for a Healthy Retirement

– Sperlings (2019) –

No.7U.S. Cities with Lowest Startup Costs

– Embroker (2019) –

No.8Fittest Cities in America

– CBS News –

No.5Best Places for Business and Careers

– Forbes (2015-2019) –

No.2Best Cities for Foodies

– Sperlings (2019) –

Portland consistently receives glowing reviews and rankings from the media.

2019 lists include:

2018 lists include:


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

With over 20,000 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 1.1 million square foot factory 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 2020 Nike will complete a $1 billion expansion of its Washington County campus.

Nike’s two key competitors have a major local presence as well. Those employers include the North American headquarters of Adidas with 1,898 employees, and a new 70,000 SF outpost of Under Armour. Under Armour has moved 100 employees into an iconic former YMCA.

GOVERNMENTThe U.S. Federal Government is among Portland largest employers, with 18,300 workers. The State of Oregon gives employment to an additional 15,100 residents in government and education.

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 18,885 employees, and The Oregon Health Sciences University (OHSU), with 17,556 workers. OHSU 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 $245.62 million in 2018.

MANUFACTURINGIn trucking and transportation, Daimler Trucks—with nearly 2,800 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.


TOP AREA EMPLOYERS

20,000 area employees 13,500 area employees 12,000 area employees

11,404 area employees



Intel is the area’s largest private employer. Recently, following a five year, $6 billion expansion, the company unveiled vast, long-term plans for future growth.

Kaiser has 35 medical facilities, 18 dental offices and 1,400 doctors in the Pacific Northwest. It employs more than 10,000 in the Portland metro region and serves 11.8 million members nationally. Kaiser is headquartered in Oakland, California.

In April of 2016, Nike announced a $1 billion expansion of its Beaverton world headquarters. The company is adding 1.3 million square feet of office space and parking for 3,300 vehicles. Construction on the final parts of this expansion will wrap up in 2020.

Legacy is a locally-owned nonprofit based in Portland, Oregon. It is the only health system covering the Portland/Vancouver area south to Salem with multiple hospitals and a hospital dedicated to exclusively serving children.

With nearly 50,000 students, Portland Public Schools is Oregon’s largest district. Portland is currently in the midst of a massive voter-approved high school and middle school reconstruction and modernization program.

In 2017 voters approved $790 million in taxes to rebuild one middle school and three high schools. The bond was in addition to a $480 million bond in 2012 for a similar program.

Fred Meyer offers one-stop shopping at 133 multi-department stores in four western states.

18,885 area employeesProvidence is a non-profit network of hospitals, health plans, physicians, clinics and related services. It operates in Alaska, Washington, Oregon, Montana and California. It was originally founded by the Sisters of Providence in Montreal Quebec in 1843.


Oregon Health Sciences University (OHSU) leads the way in government-funded healthcare — and secures numerous grants for the advancement of health sciences. OHSU recently acquired a $1 billion gift for cancer research.

Grants from the National Institutes of Health have held steady from around $184 million in 2011 to $245 million in 2018. This infuses the economy with jobs and income from outside the Portland MSA.


MURRAY MANOR • 33 UNITS • PORTLAND, OR

OPERATIONS ANALYSIS

Income Current Scheduled Rents Projected Operations

Scheduled Gross Rent $433,263 $13,129 $481,500 $14,591 Less: Vacancy/Credit Loss -$21,663 -$656 -5.0% -$24,075 -$730 -5.0%

Net Rental Income $411,600 $12,473 $457,425 $13,861Other Income $10,588 $321 $17,052 $517

Includes: Laundry $3,688 $112 $3,688 $112 Includes: Utility Billing (RUBs) $0 $0 0.0% $6,464 $196 50.0%Includes: Miscellaneous $6,900 $209 $6,900 $209

Gross Operating Income $422,188 $12,794 $474,477 $14,378

Expenses Adjusted Operations Per Unit % GOI Adjusted Operations Per Unit % GOI

Real Estate Taxes $28,275 $857 6.7% $28,275 $857 6.0%

Insurance $24,044 $729 5.7% $24,044 $729 5.1%

Total Utilities $17,608 $534 4.2% $17,608 $534 3.7%

Fee Management $42,219 $1,279 10.0% $47,448 $1,438 10.0%

Maintenance/Repairs $17,877 $542 4.2% $17,877 $542 3.8%

Turnover $8,297 $251 2.0% $8,297 $251 1.7%

Reserves $8,250 $250 2.0% $8,250 $250 1.7%

Total Expenses -$146,570 -$151,799Expenses per Unit -$4,442 -$4,600

% of Gross Operating Income 34.7% 32.0%

Net Operating Income (NOI) $275,618 $322,678



OPERATIONS ANALYSIS

Murray Manor is owner-managed, which creates an opportunity to increase income at the asset. Operations are projected and assume an independent, third-party company will manage Murray Manor.

INCOME Currently, scheduled rents average $1,094 per unit or $1.82 per sq ft. The operations do not include vacancy, but projections assume a market-rate 5.0% vacancy. Projected rents are based on current rents found at competing properties.

Other income includes administrative fees and laundry income. The projected income has been adjusted to include fully realized utility charges (RUBs). Residents are currently responsible for electricity and gas. Heat is provided via in-unit furnances. The property presently pays water, sewer and garbage expenses.

EXPENSES Expenses have been adjusted to reflect management by an independent, third-party management company. The net management fee and insurance are estimated. Murray Manor is a un-reinforced masonry (URM) building. The insurance expenses reflect additional coverage for this type of construction. Costs include $250 per unit in reserves.

RENT ROLL ANALYSIS: MARKET RENTS

Unit Type Unit Count Square Feet Average Scheduled Rent

Average Scheduled Rent per Sq Ft

Projected Renovated Rent

Projected Renovated Rent per Sq Ft % Change

Studio 8 384 $855 $2.22 $1,000 $2.60 14.5%1 Bedroom / 1 Bathroom 18 569 $1,091 $1.92 $1,220 $2.14 10.6%2 Bedroom / 1 Bathroom 6 833 $1,311 $1.57 $1,395 $1.67 6.0%3 Bedroom / 1 Bathroom 1 1,500 $1,760 $1.17 $1,795 $1.20 1.9%Totals / Averages 33 601 $1,094 $1.82 $1,216 $2.02 10.0%

RENT ROLL ANALYSIS: SCHEDULED RENTS

Unit Type Unit Count Square Feet Lowest Achieved Rent

Highest Achieved Rent % Diff Average Scheduled

RentAverage Scheduled

Rent per Sq FtStudio 8 384 $777 $956 23.0% $855 $2.221 Bedroom / 1 Bathroom 18 569 $882 $1,268 43.8% $1,091 $1.922 Bedroom / 1 Bathroom 6 833 $1,165 $1,417 21.6% $1,311 $1.573 Bedroom / 1 Bathroom 1 1,500 $1,760 $1,760 0.0% $1,760 $1.17Totals / Averages 33 601 $1,146 $1,350 22.1% $1,094 $1.82


OPERATIONS ANALYSISActual Rent * Studio 1 bedroom 2 bedroom 3 bedroom

$777 1$780 1$792 1$819 1$882 1$918 1$940 1 1$956 1$971 1$987 1

$1,004 1$1,071 1$1,095 1$1,110 1$1,125 1$1,150 1$1,165 1$1,175 2$1,195 2$1,234 1$1,270 1$1,310 1$1,395 1$1,417 1$1,760 1Total * 7 15 5 1

* Occupied apartments only. Does not include pending leases, vacant units or employee units.


Studio 1 Bed 2 Bed

Sche

dule

d Re

nt

Average Rent Maximum RentMinimum Rent

$700

$800

$900

$1,000

$1,100

$1,200

$1,500

$1,400

$1,300

RENT VARIATION BY UNIT TYPE


QUESTIONS & TOUR REQUESTS:

All inquiries, questions, or tour requests are to be directed to HFO Investment Real Estate at (503) 241.5541.

Please do not disturb the residents.

Greg Frick • [email protected]

Rob Marton • [email protected]

Tyler Johnson • [email protected]

Jack Stephens • [email protected]

Lee Fehrenbacher • [email protected]

Todd Tully • [email protected]

Adam Smith • [email protected]

Peyton King • [email protected]

Stephen Wendt • [email protected]

HFO Investment Real Estate 2424 SE 11th AvenuePortland, Oregon 97214

www.hfore.com(503) 241.5541Fax: (503) 241.5548

Brokers licensed in the States of Oregon and Washington.

OFFER TERMSPRICING

Price $5,675,000Per Unit $171,970

Per Sq Ft $286

Cap Rate 4.86%

ASSET SUMMARYProperty Murray ManorAddress 910 SE 37th Avenue

City, State Portland, Oregon 97214

County Multnomah

Year Built 1920

Total Units 33

Approx NR Sq Ft 19,825 sq ft

Avg Unit Size 601 sq ft

Acreage 0.15 acres

Tax Lot(s) R281135


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. ©2020 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.

33 Units • Portland, Oregon · 2020. 7. 30. · Portland is home to the headquarters of Fortune...

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