OFFERING MEMOR ANDUM9 Units • Oregon City, Oregon

MONROE MANOR

www.hfore.com(503) 241.5541

2 HFO INVESTMENT REAL ESTATE

EXECUTIVE SUMMARY

PRICE SUMMARYPrice $1,600,000

Price Per Unit $177,778

Per Square Foot $222

Projected Cap Rate 5.00%

TOURS AND INQUIRIES Jack Stephens • jack@hfore.com

Greg Frick • greg@hfore.com

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

Please do not disturb tenants.

Monroe Manor is an apartment building located in the picturesque McLoughlin neighborhood of Oregon City. Constructed in 1966, the building features three one-bedroom units, and six two-bedroom units.

Property Highlights:• Six fully renovated units including new flooring and tile shower surrounds• Stackable washer & dryer in each unit• Significant rent upside• Large storage area & office space• Off street parking

Monroe Manor is convenient to numerous restaurants, breweries, parks, and the city library. Local favorites include Mike’s Drive-In and Tony’s Fish Market. Whether it’s taking a ride down the bluff on the charming Oregon City Municipal Elevator to enjoy all that the town has to offer, or relaxing at home, tenants appreciate the quaint atmosphere of life in Oregon City.

Rents at Monroe Manor currently average $1,061 per unit or $1.33 per square foot. With the upside in rents and management style, Monroe Manor is an attractive investment to a variety of investors in the Pacific Northwest.

ASSET SUMMARY

Property Monroe Manor

Location 423 Monroe Street

City, State Oregon City, OR 97045

County Clackamas

Year Built 1966

Total Units 9

Approx NR Sq Ft 7,200

Avg Unit Size 800

UNIT MIX SUMMARY - MONROE MANORUnit Type Unit Count Avg Square Feet Total Square Feet % of Total Units1 Bedroom / 1 Bathroom 3 750 2,250 33.3%

2 Bedroom / 1 Bathroom 6 825 4,950 66.7%

Total / Averages 9 800 7,200 100%

3MONROE MANOR • OREGON CITY, OREGON

4 HFO INVESTMENT REAL ESTATE

5MONROE MANOR • OREGON CITY, OREGON

OREGON CITYOREGON CITY RENTAL MARKET

According to the Multifamily NW Fall 2019 report, the average rent per square foot in the Oregon City/Gladstone submarket was $1.42, and the average vacancy rate was 3.55%. Oregon City’s vacancy rate was much lower than in other Clackamas County submarkets, including Lake Oswego, Wilsonville, and Clackamas. Despite the city’s strong population growth, only 48 units are currently under construction there – all of these units are subsidized. Since 2010, just two apartment developments with a total of 546 apartment units have been completed.

OREGON CITYThe county seat of Clackamas County, Oregon City is located on the Willamette River, 13 miles south of Portland, and just below the horseshoe-shaped Willamette Falls. The population grew by 13.8% between 2010 and 2018, reaching 37,129 residents. During the same period, Clackamas County’s population grew by 10.7%. Oregon City is the 14th biggest city in Oregon by population.

The first incorporated city west of the Rockies, Oregon City, was established in 1829 and was the state capital before incorporation. Oregon City was also home to the first newspaper published west of the Rockies. At one time, it rivaled Portland for control of the general area.

Some of its historical past remains in Oregon City, via its architecture. Its recently revitalized Main Street combines past and present, with its rambling streets full of shops, boutiques, restaurants and beer and wine venues.

Clackamas County has steadily added jobs over the past decade. The most significant job sectors in the county are Professional Business Services, Health Care, Wholesale Trade, High Tech, and Advanced Manufacturing. Local employers include Benchmade, Emmert International, Oregon Iron Works, Pacific Seafood, Reddaway, United Streetcar, and Vanport Manufacturing. Oregon City’s median income is $71,856.

Oregon City’s history is remembered in two outstanding local museums, The Museum of the Oregon Territory overlooking the Willamette River and its falls, and The End of the Oregon Trail Interpretive Center, which serves as a reminder of the area’s pioneer past.

Students in Oregon City attend Oregon City High School, along with two middle schools and ten elementary schools. Clackamas Community College is located in Lake Oswego. Residents enjoy access to 20+ parks, and to the Willamette and Clackamas Rivers, which are boundaries to the neighboring cities of Gladstone and West Linn.

Recently, the Confederated Tribes of Grand Ronde purchased the Willamette Falls site in Lake Oswego, which was most recently the home of the Blue Heron Paper Company. The Tribes consider the place to be sacred ground and plans to make the site more accessible to the public. Renovation of the existing buildings on site is expected to begin in 2020, with construction of a public walkway underway in 2021. The Confederated Tribes are considering building a hotel and retail stores at the site. The Willamette Falls Legacy Project, a collaboration between Oregon City, Clackamas County, Metro, and the State of Oregon, is working with the Tribes to ensure that Oregon City and Metro area residents can enjoy this beautiful heritage site.

6 HFO INVESTMENT REAL ESTATE

PORTLAND RANKINGS

Restaurant City of the Year– Bon Appetit –

Best City for an Active Lifestyle– Wallethub –

Most Entrepreneurial State – Amazon.com –

Greenest City in America– Newsweek –

Best Foodie City in America– Wallethub & Travelpulse –

No.6 rank by Jetsetter

Healthiest Cities to Live– Thrillist.com –

No.3

No.7

No.5

No.9

No.15No.10

No.1

No.7

No.1

No.4

No.4

No.8

No.5

No.8

No.9 No.10Top City for Entrepreneurs &

Start-Ups– Business.org –

No.23 rank by CNBC

Healthiest City in the U.S.– Active.com –

Best Cheap Destinations in the U.S.– U.S. News and World Report –

Fittest Cities in America– American College of

Sports Medicine –

Best Foodie Cities in the USA– U.S. News and World Report –

Most Educated City in America

– Wallethub –

Best City for Biking– Fast Company –

Best Place to Live in the U.S.– U.S. News and World Report –

Best Bike City in America– Bicycling Magazine –

Fittest Cities in America– CBS News –

Portland consistently receives glowing reviews and rankings from the media.

2019 lists include:

2018 lists include:

7MONROE MANOR • OREGON CITY, OREGON

MONROE MANOR

Income Current Scheduled Rents Projected Operations Note

Scheduled Gross Rent $114,600 $12,733 $121,170 $13,463 1Less: Vacancy/Credit Loss -$5,730 -$637 -5.0% -$6,059 -$673 -5.0% 2

Net Rental Income $108,870 $12,097 $115,112 $12,790 Other Income $7,696 $855 $7,696 $855 3

Includes: Utility Billing (RUBs) $6,796 $755 $6,796 $755 Includes: Miscellaneous $900 $100 $900 $100

Gross Operating Income $116,566 $12,952 $122,808 $13,645

Expenses Projected Operations

Per Unit % GOI Projected Operations

Per Unit % GOI

Real Estate Taxes $8,648 $961 7.4% $8,648 $961 7.0% 4Insurance $3,200 $356 2.7% $3,200 $356 2.6%Total Utilities $15,033 $1,670 12.9% $15,033 $1,670 12.2% Fee Management $6,994 $777 6.0% $7,368 $819 6.0% 5Landscaping $1,800 $200 1.5% $1,800 $200 1.5%Maintenance/Repairs $3,150 $350 2.7% $3,150 $350 2.6%Turnover $1,350 $150 1.2% $1,350 $150 1.1%Reserves $2,250 $250 1.9% $2,250 $250 1.8% 6

Total Expenses -$42,425 -$4,714 -36.4% -$42,799 -$4,755 -35% Net Operating Income (NOI) $74,142 $8,238 63.6% $80,009 $8,890 65%

8 HFO INVESTMENT REAL ESTATE

OPERATIONS ANALYSIS

1. RENTS Rents are based on a January 2020 rent roll and average $1,061 per unit or $1.33 per sq ft. Projected rents are based on a market-rate increase.

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

3. OTHER INCOME Other Income includes miscellaneous charges. The property is not charging for RUBs currently. Projections show the property recapturing 50% of the total utility expense.

4. 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. Monroe Manor’s gross taxes total $8,648.

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

6. RESERVES Lenders require reserves to 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 $2,250 annually.

Type Units Count Avg Sq FtAverage Scheduled

RentsScheduled Rents

per Sqft Projected Rents Projected Rents per Sq Ft

1 Bedroom / 1 Bathroom 3 750 $888 $1.18 $977 $1.30

2 Bedroom / 1 Bathroom 6 825 $1,148 $1.39 $1,194 $1.45

Total / Average 9 800 $1,061 $1.33 $1,122 $1.40

9MONROE MANOR • OREGON CITY, OREGON

OFFER TERMS

QUESTIONS & TOUR REQUESTS:

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

Jack Stephens • jack@hfore.com

Greg Frick • greg@hfore.com

Tyler Johnson • tyler@hfore.com

Rob Marton • rob@hfore.com

Lee Fehrenbacher • lee@hfore.com

Todd Tully • todd@hfore.com

Adam Smith • adam@hfore.com

Rand Hoffman • rand@hfore.com

Khari Gates • khari@hfore.com

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

www.hfore.com(503) 241.5541Fax: (503) 241.5548Brokers licensed in the States of Oregon and Washington.

ASSET SUMMARYLocation 423 Monroe Street

City, State Oregon City, OR 97045

Total Units 9

PRICE SUMMARYPrice $1,600,000

Price Per Unit $177,778

Per Square Foot $222

Projected Cap Rate 5.00%

10 HFO INVESTMENT REAL ESTATE

11MONROE MANOR • OREGON CITY, OREGON

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.