MIDMONT STATION...Portland’s Q4 2019 vacancy rate at 3.2% and the U.S. average at 6.4%. Portland...

OFFERING MEMOR ANDUM10 Units • 1 Ground Floor Retail Space • Portland, Oregon

MIDMONT STATION

2 HFO INVESTMENT REAL ESTATE

EXECUTIVE SUMMARY

PRICE SUMMARYPrice $3,100,000

Price Per Apt Unit $234,967

Per Square Foot $558

Blended Cap Rate 4.82%

TOURS AND INQUIRIES Lee Fehrenbacher • [email protected]

Greg Frick • [email protected]

2424 SE 11th Avenue, Portland, Oregon 97214www.hfore.com • (503) 241.5541 • Fax: (503) 241.5548

Please do not disturb tenants.

Newly built in 2018, Midmont Station is a high-end mixed-use apartment building located on the popular Southeast Belmont Street corridor. Belmont Street is a highly walkable and desirable destination in close-in Southeast Portland that’s home to numerous restaurants, bars, coffee shops, and retail establishments.

Midmont Station consists of 10 efficiently designed one-bedroom units that utilize circular floor plans in select units to maximize space and the flow of traffic. Rents average $1,232/month ($2.85 PSF) – a popular price point for tenants seeking quality construction in Portland’s inner core.

The building’s ground-floor retail space is occupied by local restaurant Char’ Latin Grill, a popular eatery specializing in Latin street foods and cuisine. The 1,234-square-foot retail space is fully equipped with landlord-owned amenities, including a commercial hood vent system, walk-in cooler, 25-beer tap system, and four commercial sinks. Midmont Station’s desirable location, quality construction, and in-demand units make it a rare opportunity for investors seeking stable, long-term assets in Portland’s growing multifamily market.

ASSET SUMMARYProperty Midmont Station

Location 3334 SE Belmont Street

City, State Portland, OR 97214

County Multnomah

Year Built 2018

Total Units 10

Multifamily Sq Ft 4,322

Retail Sq Ft 1,234

Avg Apt Unit Size 432

Total Sq Ft 5,556

UNIT MIX SUMMARY - MIDMONT STATIONUnit Type Unit Count Avg Square Feet Total Square Feet % of Total Units

1 Bed / 1 Bath 4 388 1,552 40.0%

1 Bed / 1 Bath 2 454 908 20.0%

1 Bed / 1 Bath 2 464 928 20.0%

1 Bed / 1 Bath 2 467 934 20.0%

Total / Averages 10 432 4,322 100%

RETAIL SUMMARY - MIDMONT STATIONRetail Space Monthly Rent Rent Per Sq. Ft. CAM Square Feet

Char Latin Grill $3,500 $42,000 $208 1,234

3MIDMONT STATION • PORTLAND, OREGON

Bike Score

100Transit Score

5296Walk Score


Property Highlights:• High-end, new construction• Stainless steel appliances• In-unit washers and dryers• Mini-split heating and air

conditioning• Quartz countertops• LVT Flooring• Efficient circular floor plans


Property Highlights:The building’s ground-floor retail space is home to local restaurant Char’ Latin Grill, a popular eatery specializing in Latin street foods and cuisine. The 1,234-square-foot retail space is fully equipped with landlord-owned amenities, including a commercial hood vent system, walk-in cooler, 25-beer tap system, and four commercial sinks.


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

– Sperling’s 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

– Sperling’s (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

– Sperling’s (2019) –

Portland consistently receives glowing reviews and rankings from the media.

2019 lists include:

2018 lists include:


The Portland/Vancouver metro area including Clackamas county and the City of Happy Valley, is well served by an outstanding public transit system. In 2015, TriMet, the area’s public transit agency, made a number of upgrades to the area’s transit options. These upgrades addressed the concerns of residents and workers who depend on bus and light-rail train service to get to and from jobs, schools and other daily events.

The MAX Blue Line was the first of the light rail’s five separate projects to be built, and was the first federally funded light rail project that used money initially earmarked to build freeways. The initial 15 miles of the Blue Line opened in 1986, with 30 rail stops that connect downtown Portland with the City of Gresham.

The Green Line was completed 2009 connecting Clackamas, along Interstate 205, to the Gateway Transit Center. The 8.3 miles of track provides transportation between 8 additional stations before connecting to the previously built I-84 track.

• The Blue Line continues through downtown Portland to the cities of Beaverton and Hillsboro

• The Red Line terminates at the Portland International Airport

• The Green Line connects to Clackamas Town Center

• The Orange Line is the MAX’s newest extension and connects to the City of Milwaukie

CLACKAMAS

WILLAM

ETTE RIVER

GRESHAM

BEAVERTONHILLSBORO

MAX Blue Line

MAX Green Line

MAX Orange Line

MAX Red line

MAX Yellow Line

Portland Streetcar A Loop

Portland Streetcar B Loop

Portland Streetcar North South Line

TRANSPORTATION SYSTEMS

DOWNTOWN PORTLAND

MIDMONT STATION


Among the influx of companies to the Portland metropolitan area—including many who have transplanted their world, North American or U.S. headquarters here—are Adidas, Daimler Trucks, KinderCare and Keen.

Other significant companies in the close-in Portland metro area include Umpqua Holdings, Weiden+Kennedy, NW Natural, PacifiCorp, PGE, New Seasons, Storables, McMenamins, McCormick & Schmick’s, Franz Bakery, Portland Brewing, Powell’s Books, ZGF Architects, and two major West Coast law firms: Stoel Rives and Schwabe, Williamson & Wyatt.

Full time employment increased 1.3% between November 2018 – November 2019, an increase of 15,900 positions. Below is an overview of net job creation by industry from November 2018 through November 2019:

According to the State of Oregon Employment Department, the Portland Metro region created jobs at the rate of 1.3% in 2019. Portland ranks 16th among the 50 largest metropolitan areas in the United States.

JOB GROWTH BY INDUSTRYMSA PORTLAND

2,400 Construction

1,800Information

Financial Activities

5,600 Professional and BusinessServices

3,500

2,300

Healthcare & Social Assistance

1,600Leisure & Hospitality


NE Sandy Blvd

84

5

LIFESTYLE CONVENIENCES AND EMPLOYERS

E Burnside St

SE Stark St

SE Morrison St

SE Belmont St

SE Hawthorne Blvd

NE Glisan St

NE Multnomah St

SE Madison St

NE Grand Ave

SE 12th AveSE 11th Ave

SE 24th Ave

SE Ankeny St

NE 33rd Ave

Laurelhurst Park

Buckman Field Park

Lone Fir Cemetery

Midmont Station

The following establishments are within walking distance to Midmont Station

• Laurelhurst Market• Music Millennium• 50 Licks Ice Cream• Whole Foods Market• Laurelhurst Theatre• Bamboo Sushi• Ken’s Artisan Pizza• Central Catholic High School• Screen Door Restaurant• Boxer Ramen• Tusk• The Matador• Coalition Brewing• Cheese and Crack Snack Shop• Langbaan• Pambiche• Migration Brewing• Han Oak• Nostrana• Revolution Hall• Stammtisch


LIFESTYLE CONVENIENCES

SE 52th Ave

SE 50th Ave

SE 26th Ave

SE 28th Ave

SE 82nd Ave

SE 60th Ave

SE 92nd Ave

SE Woodstock Blvd

SE Holgate Blvd

SE Steele St

SE Foster Rd

César E. Chávez Blvd

Hawthorne

SE Powell Blvd

SE Division St

SE Belmont St

Mt Tabor Park

Woodstock Park

Creston Park

Lent Park

Mt Scott Park

26

Mall 205

Fubonn Shopping Center

McMenamins Baghdad Theater & Pub

Crystal Spring Rhododendron Garden

205

Century 16 Eastport Plaza

Powell Street Station

Pok Pok

Blue Star Donuts

Stumptown Coffee RoastersPetite Provence

Portland Campus

Mt Scott Community Center & Indoor Pool

HK Cafe

213

Midmont Station


MIDMONT STATIONIncome Current Scheduled Rents Per Unit % GOI Notes

Scheduled Gross Rent $147,890 $14,789 1

Less: Vacancy/Credit Loss -$7,395 -$739 -5.0% 2

Net Income $140,496 $14,050

Includes: Utility Billing (RUBs) $11,510 $1,151

Includes: Miscellaneous $3,133 $313

Total Other Income $14,643 $1,464 9.5% 3

Effective Annual Income - Residential $155,139 $15,514

Expenses Projected Operations Per Unit % GOI Notes

Real Estate Taxes $18,315 $1,831 9.3% 5Insurance $2,300 $230 1.2%

Total Utilities $9,969 $997 5.0%

Fee Management $9,308 $931 6.0% 6Fire Monitoring $1,720 $172 0.9%

Maintenance/Repairs $2,500 $250 1.3%

Turnover $1,500 $150 0.8%

Reserves $2,500 $250 1.3% 7Total Estimated Expenses -$48,112 -$4,811 -24.4%Total Estimated NOI $149,427 $14,943 75.6%

Commercial Income Projected Operations Per SF % GOI Notes

Base Rent $42,000 $34

Less: Vacancy/Credit Loss -$2,100 -$2 -5%

Estimated CAM Charges $2,500 $2

Effective Annual Income $42,400 $34 21% 4

Gross Operating Income $197,539 $19,754


OPERATIONS ANALYSIS1. RENTS Rents are based on a April 2020 rent roll and average $1,232 per unit or $2.85 per sq ft.

2. VACANCY The projected operations include a market-rate vacancy of 5.0%.

3. OTHER INCOME Other Income includes miscellaneous charges consisting of late fees, damages, and other administrative charges. The property is currently recapturing 99% of its total utility expenses.

4. COMMERCIAL INCOME Midmont Station’s 1,234-square-foot ground-floor commercial space is occupied by local restaurant Char’ Latin Grill, a popular eatery specializing in Latin street foods and cuisine. Char pays $3,500 monthly (approximately $34 psf ) plus NNN expenses of approximately $200/month. Char’s lease began on Jan. 1, 2019 and extends to Dec. 31, 2023. Starting in December 2020, base rent will increase annually by 2 percent, and NNN charges will increase 10 percent annually.

5. PROPERTY TAXES Oregon’s property taxes are evaluated on a fiscal year starting July 1. In Oregon, property taxes are not reassessed on sale and are limited to a 3.0% annual increase at the state level. Property taxes paid prior to November 15 each year receive a 3.0% discount. Midmont Station’s gross taxes total $18,881. For underwriting purposes, projected operations include the property taxes for the 2019-2020 tax year with the 3.0% discount totaling $18,315.

6. FEE MANAGEMENT The management fee has been projected at 6.0% of GOI, which represents standard independent, third-party management costs for properties similar to Midmont Station in the Portland metro area.

7. RESERVES Lenders require reserves be set aside to address future capital costs associated with any property as it ages. The projected operations include reserves of $250 per unit or $2,500 annually.

Type Units Count Average Sq Ft Average Scheduled Rents Scheduled Rents per Sqft1 Bedroom / 1 Bathroom 4 388 $1,253 $3.23

1 Bedroom / 1 Bathroom 2 454 $1,170 $2.58



Total / Average 10 432 $1,232 $2.85

Retail Space Square Foot Monthly Commercial Rent Annual Commercial Rent Annual Commercial Rent PSF CAM Total Annual CAMChar Latin Grill 1,234 $3,500 $42,000 $34.04 $208 $2,500


OFFER TERMS

QUESTIONS & TOUR REQUESTS:

All tours and inquiries regarding Midmont Station are to be directed to HFO Investment Real Estate at (503) 241.5541. Please do not disturb tenants.

Lee Fehrenbacher • [email protected] Frick • [email protected] Marton • [email protected] Tyler Johnson • [email protected] Stephens • [email protected] Tully • [email protected] Smith • [email protected] Rand Hoffman • [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.

ASSET SUMMARYLocation 3334 SE Belmont Street

City, State Portland, OR 97214

PRICE SUMMARYPrice $3,100,000

Price Per Apt Unit $234,967

Per Square Foot $558

Blended Cap Rate 4.82%


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.

MIDMONT STATION...Portland’s Q4 2019 vacancy rate at 3.2% and the U.S. average at 6.4%. Portland...

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