Fernhill Crossing OM

FERNHILL CROSSING

The information contained in this marketing brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Commercial Integrity, NW and TFIRE and should not be made available to any other persons or entities without written consent of Commercial Integrity, NW and TFIRE. The information contained herein has been prepared to provide summary, unverified financial and physical information to prospective purchasers to establish a preliminary level of interest in the Subject Property.

THE INFORMATION CONTAINED HEREIN SHALL NOT BE A SUBSTITUTE FOR A THOROUGH DUE DILIGENCE INVESTIGATION.

Commercial Integrity, NW and TFIRE has not made any investigation, and makes no warranty or representation with respect to the income or expense for the Subject Property, the future projected financial performance of the Subject Property, the size or square footage and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvements thereon, or financial condition or business prospects of any tenant, or any tenant’s plan or intentions to financial condition or business prospects of any tenant, or any tenant’s plan or intentions to from sources we believe to be reliable; however, Commercial Integrity, NW and TFIRE have not verified and will not verify, any of the information contained herein, nor has Commercial Integrity, NW and TFIRE conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential purchasers must take appropriate measures to verify all of the information set forth herein.

$5,170,000

$272,000 PER UNIT

$344 PSF

FERNHILL CROSSING

4225-4256 NE HIGHLAND CT. | PORTLAND, OR

LOWER-DENSITY MIDDLE HOUSING WHICH INTEGRATES WELL INTO THE CITY AND PROVIDES RARE LANDSCAPE FOR URBAN NEIGHBORHOODS.

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DETAILS

4225-4256 NE HIGHLAND CT. | PORTLAND, OR

$5,170,000

$272,000 /UNIT

$344 /SF

5.25% IN-PLACE CAP RATE

5.8% HIGHEST ACHIEVED CAP RATE

PROPERTY HIGHLIGHTS

NEW CONSTRUCTION, 2020-BUILT HIGH-END ASSET

Fernhill Crossing is a well-designed asset with modern amenities and a unique layout. Units feature air conditioning, in-unit washer and dryer, kitchen island, green space and double-height ceilings which stand apart from traditional multifamily housing. The property is a low-density garden concept with zen-garden aesthetics, an outdoor dining area and convenient on-site parking for all residents.

MISSING MIDDLE HOUSING

Middle housing, defined as low-density multifamily such as townhomes and duplexes, is often underbuilt as developers typically target single-family housing or higher-density multifamily. This has left a void in the market for renters looking for lower-density housing with modern construction. Fernhill Crossing allows renters to enjoy larger units, tall ceilings and privacy in their community, which leads to less vacancy and reduced turnover costs.

UNIQUE UNIT MIX

Fernhill features townhomes/lofts, apartments and a single-family house as rental options to help appeal to a variety of renter demographics. Families have the option to choose larger floorplans while working professionals commuting into downtown can choose the smaller floorplans.

IDEAL LOCATION IN THE CULLY NEIGHBORHOOD

The Cully neighborhood is family-friendly Northeast Portland community that boasts its historic architecture and great restaurants. The community offers cultural diversity and both indoor and outdoor recreational options. Accessibility to major employment nodes is a considerable selling point in Northeast Portland.

STRONG MARKET FUNDAMENTALS

The Northeast Portland submarket currently stands at a 7.6% vacancy rate, which is lower than Downtown Portland at 8.9% and Southwest Portland at 10.0%. The Northeast average rent per unit is $1,581, which stands significantly higher than Southeast at $1,430 per unit and close to the Southwest Portland Submarket. The market cap rate of Northeast stands at 5.4% but is projected to fall in 2025 as interest rates fall and property values are expected to expand to previous levels.

Bed / 1 Bath Apartment (586 SF)

2 Bed / 2 Bath Apartment (894 SF)

PROFORMA FERNHILL CROSSING

(NOI)

UNIT MIX COMPARISON

FOOTNOTE SUMMARY

1. Misc: Jan 2024 T12 Actuals. RUBS, Parking Income: 2024 Stabilized Budget

2. Real Estate Taxes: 2023/2024 Net Real Estate Taxes includes 3% paid in full discount

3. Property Insurance: Jan 2024 T12 Actuals

4. Off Site Property Management Fee: 3.5% fee, consistent with historical costs

5. Payroll/On-Site Costs: 4.5% estimate, covers part time manager and maintenance salaries, benefits, etc.

6. Repair/Maint: $1000/unit estimate, covers parts and supplies related to plumbing, electrical, hardware, flooring, exterior work, common area hallway

7. Utilities: Jan 2024 T12 Actuals

8. Turnover: $250/unit estimate, covers "make ready expenses" such as painting, cleaning, window coverings

9. Landscaping: $200/unit estimate

10. General/Admin: Jan 2024 T12 Actuals

1. Advertising: $300/unit estimate

2. Reserves: $250/unit estimate

2020-BUILT TOWNHOME-STYLE BUILDINGS WITH LARGE UNIT SIZES AND HIGH-END AMENITIES LOCATED IN THE POPULAR CULLY NEIGHBORHOOD OF NORTHEAST PORTLAND.

2 BED 2 BATH TOWNHOUSE

1 BED 1 BATH APARTMENT

2 BED 2 BATH APARTMENT

RENT COMPARABLES

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Subject Property

SALES COMPARABLES

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The Standard at Harmony Park

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Tabor Terrace

Bailey Commons

NE PORTLAND EMPLOYMENT

Northeast Portland boasts a dynamic economy characterized by its resilience and diversity. While traditional sectors like manufacturing and healthcare remain robust, the region has also seen growth in technology and creative industries.

Innovative startups and established companies alike thrive in Northeast Portland's supportive ecosystem, fostering entrepreneurship and job creation. The area's small businesses add vibrancy to the local economy, offering unique goods and services while providing employment opportunities to residents.

Anchoring the healthcare sector, Legacy Emanuel Medical Center is a vital contributor to Northeast Portland's employment landscape. As part of Legacy Health, it employs over 13,000 people in the Portland area, providing essential medical services and job opportunities.

With a commitment to healthcare excellence, Kaiser Permanente is a major employer in Northeast Portland. Its workforce of over 17,000 individuals across Oregon and Southwest Washington includes staff at facilities in the region, ensuring access to quality healthcare and employment opportunities.

Playing a significant role in Northeast Portland's manufacturing sector, Precision Castparts Corp. is a key employer in the region. Specializing in complex metal components for aerospace, power, and industrial markets, PCC contributes to local employment and the economy through its operations.

The Adidas store serves as a retail beacon and an employment hub. Offering positions ranging from sales associates to managers, Adidas provides job opportunities for individuals passionate about sports and fashion, contributing to the neighborhood's commercial vitality and community engagement.

NE PORTLAND EDUCATIONAL INVESTMENTS

The Northeast Portland neighborhood is quickly becoming a new hub for education centers for higher ed and job training.

In 2022, the University of Oregon approved a $60 million investment in purchasing the former Concordia University campus to open an additional campus in Northeast Portland. The new Oregon campus is a 4-minute drive and accessible by public transportation. In addition to housing The Ballmer Institute for Children’s Behavioral Health, the university anticipates UO Portland to house many other partnerships with local institutions and the community which will educate and improve the lives of young people in the region.

The Portland Metropolitan Workforce Training Center is located half a mile from Fernhill Crossing and serves as a job training center as part of the Portland Community College system. The newly renovated 50,000 square-foot Opportunity Center is a hub connecting community members, employers and social service partners with the college. The center offers a range of programs that allow people to transform their lives through education and career-track employment, including on-site programs in advanced manufacturing and healthcare. The center hosts the Small Business Development Center, the Native American Youth and Family Center, and the Oregon Department of Human Services.

Both of these large investments serve as massive draws to Northeast Portland as young, educated and higher-income residents relocate into the NE submarket.

Olé Frijole

Santo Domingo Taqueria

Evergreen Market

Aladdin Cafe

Villa Market Burger

Oakshire Beer Hall

McMenamins Kennedy School

NORTHEAST NEIGHBORHOOD PROFILE

Welcome to Northeast Portland, a vibrant neighborhood blending history with modernity, nestled between the Willamette and Columbia Rivers. Here, cultural enclaves like the Alberta Arts District and Mississippi Avenue offer eclectic galleries, trendy boutiques, and live music venues, inviting exploration and creativity.

Steeped in history and culture, Northeast Portland boasts architectural gems like Irvington's Victorian homes. The Alberta Arts District runs through the nearby Concordia neighborhood and features an array of galleries, restaurants, shopping and entertainment. One of Portland’s older and wealthier neighborhoods, the Beaumont neighborhood offers views of downtown, the Willamette River and the Cascades along with the Beaumont Village shopping district.

Nature beckons with serene parks like Alberta Park and Fernhill Park providing an escape from the urban bustle amidst towering trees and tranquil ponds. These green spaces offer a peaceful retreat for leisurely strolls, picnics, and outdoor activities. The Alameda Ridge features a popular hiking trail with scenic views.

Community spirit thrives through neighborhood events and festivals, fostering a sense of belonging among residents and visitors alike. Whether it's a farmers' market, art walk, or cultural celebration, Northeast Portland brings people together to celebrate diversity and support local businesses.

AREA HIGHLIGHTS