Raintree Apartments

Page 1

OFFERING MEMORANDUM

RAINTREE 19 Units • Downtown Portland, Oregon

www.hfore.com • (503) 241.5541


2 HFO INVESTMENT REAL ESTATE


OFFERING MEMORANDUM

Raintree

Downtown Portland, Oregon 97201

TABLE OF CONTENTS Investment Summary

4

Location

12

Operations Analysis

24

Offer Terms

27

www.hfore.com • 503.241.5541 Licensed in the States of Oregon and Washington


INVESTMENT HIGHLIGHTS Unique historic bricker with exceptionally large units. The Raintree apartments has been owner-managed for more than 20 years and offers a rare opportunity to acquire a historic bricker in Portland’s urban core. Much of the Raintree Apartments’ historic character has been maintained with original hardwood floors, period lighting fixtures, high ceilings with picture rails and clawfoot bathtubs. Raintree’s average unit size is 906 sq ft, a generously sized floor plan for a historic property. The unit mix includes studios, one- and two-bedrooms, but most of the units (16 out of 19) are 969 sq ft two-bedroom floor plans.

Outstanding Goose Hollow location, high-demand district. The Raintree Apartments is located in the Goose Hollow neighborhood less than two blocks from the Timber’s Major League Soccer stadium and numerous retail services along Burnside Street including Stadium Fred Meyers. Portland’s living room, Pioneer Court House Square, Portland State University urban campus and the Northwest District, which includes the Alphabet District, Nob Hill and Slabtown are short distances to Raintree Apartments via walking, biking or public transportation. Raintree Apartments is a block from the MAX light rail blue line. Both MAX line and bus service are accessible just a block away at the Providence Park MAX Station. Connectors to Interstate 405 and Interstate 5 are between Raintree Apartments and downtown Portland.

Stable operating history, increasing rents. Raintree Apartments’ self-management provides an opportunity to increase cash flow. The property only charges for garbage; rent includes water, hot water (common area boiler) and sewer charges. Current rents average $1,486 per unit, or $1.65 per sq ft and are trending more than $125 per unit higher than trailing 12-month rents.

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INVESTMENT HIGHLIGHTS

ASSET SUMMARY Property

Raintree

Location

924 SW 16th Avenue

INVESTMENT HIGHLIGHTS

City, State

Portland, Oregon 97205

Large, unique floor plans

County

Multnomah

Year Built

1911

Exceptional location near Providence Park, home to the Timbers and the Thorns

Total Units

19

Approx NR Sq Ft

+/- 17,135 Sq Ft

Potential for income upside and management efficiencies

Avg Unit Size

+/- 902 Sq Ft

Elevator served, under-utilized storage areas

Stories

5

Acreage

0.12 Acres

Claw foot tubs, picture rails, leaded-glass interior doors

5.3%

Studios

10.5%

1 Bedrooms

PRICING

84.2%

2 Bedrooms

Price

$4,000,000

Price per Unit

$210,526

Price per Sq Ft

$233

Cap Rate

5.08%

TOURS AND INQUIRIES

All tours and inquiries regarding the Raintree are to be directed to HFO Investment Real Estate at (503) 241.5541. Rob Marton • rob@hfore.com Greg Frick • greg@hfore.com 2424 SE 11th Avenue Portland, Oregon 97214 www.hfore.com • (503) 241.5541 Please do not disturb tenants. RAINTREE • 19 UNITS • PORTLAND, OR

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ASSET OVERVIEW SITE SUMMARY City County Jurisdiction Tax Account No. / Map and Tax Lot

Portland

Unit Type

Multnomah County

Studios

1

511

511

5.3%

Portland

1 Bedrooms

2

560

1,120

10.5%

R246769 / 1N1E33DC -04900

2 Bedrooms

16

969

15,504

84.2%

Total / Averages

19

902

17,135

100.0%

CONSTRUCTION SUMMARY Year Built No. Of Buildings Stories Construction Type Foundation Exterior Walls Windows Laundry Service Heating Hot Water

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UNIT MATRIX

1911 1 Residential Building 5 stories Brick walls with wood-frame floors and roof Concrete Brick façade Vinyl Common area laundry area In-unit, gas furnances Central hot water

Unit Count

Avg Sq Ft

Total Sq Ft

% of Total Units


Raintree

Oregon Convention Center

405 Pearl District

26

5 Downtown Portland

Goose Hollow

405

Tri-met MAX Lines Portland Street Car Portland State University

RAINTREE • 19 UNITS • PORTLAND, OR

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Raintree Apartments has a beautiful brick facade and historical wood detailing. The building is elevator served and has on-site laundry. Its location is outstanding and is less than two blocks from the Timbers’ stadium.

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RAINTREE • 19 UNITS • PORTLAND, OR

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Raintree offers both one- and two-bedroom floor plans with hardwood floors in most units, gas cooking and heat, historical built-ins and clawfoot bathtubs. All the apartments have large windows, and many have private decks.

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RAINTREE • 19 UNITS • PORTLAND, OR

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LOCATION NW DISTRICT

PEARL DISTRICT

NW Lovejoy St

LLOYD DISTRICT

NW 23rd Ave

UNION STATION 84 NW Glisan St

405 Burnside St

DOWNTOWN PORTLAND adiso

n St

VER TE RI EAST PORTLAND

SW V is

ta Av e

SW SW M Clay St arket St

12th Ave

SW M

AMET

PORTLAND

PIONEER PLACE

5

Martin Luther King Jr Blvd

26

St

WILL

gton

GOOSE HOLLOW

Washington Park

99W

SW W ashin

RAINTREE

Grand Ave

SW A lder S t

Marquam Nature Park vd ur Bl

Barb

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LIFESTYLE CONVENIENCES AND EMPLOYERS 1 3

13

4

4 5

NW Everett St

3

14 15

11

31 32

33

10

34 35

11

Broa

dway

9

14 15 16 17 18 19 20

d Ave

SW 5

21

SW 2 n

WILL

99W

VER

SW C olum

bia S t 60 S W Cl SW M ay St arket 61 S62 t 59

23

TE RI

30

22

AMET

26

RAINTREE

12 13

22 23 36 24 SW W SW M 25 ashin orriso 37 gton n St SW A St lder S 42 26 t49 38 47 43 48 45 39 50 51 44 52 46 40 53 27 54 41 SW J effer 55 son S 56 t 28 29 58 57

SW 6 t

12

8

th Av e

14th

10

Ave

9

7

h Ave

6

21

0th A ve SW P ark A ve

8

7

Burnside St

17 18 19 20

SW 1

5

8th A ve

16

6

NW Broadway

405

SW 1

2

2

NW Glisan St

1

24 25 26 27 28 29 30 31 32 33

Trader Joe’s Fred Meyer Walgreens St. Mary’s Cathedral Providence Park Multnomah Athletic Club Migration Brewing Rooftop Tiffany Center Westside Market Lincoln High School KGW Media Group Leaky Roof Gastro Pub Deschutes Brewery Whole Foods Market Powell’s City of5Books McMenamins Crystal Ballroom Jake’s Famous Crawfish Patagonia – Sportswear Store Living Room Theater Stumptown Coffee Roasters Petunia’s Pies & Pastries Starbucks Jake’s Grill Saint Cupcake Target Multnomah County Central Library Portland International Film Festival Portland Art Museum Safeway McMenamins U.S. Bancorp Portland City Grill Voodoo Doughnut

34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62

Stumptown Coffee Roasters Pine Street market T.J Maxx Office Depot Nordstrom Regal Fox Tower Columbia Sportswear Arlene Schnitzer Concert Hall MUJI Portland Pioneer Courthouse Square Chase Bank Pioneer Place Apple Store Nike Portland Buffalo Wild Wings Killer Burger Nordstrom Rack Bank of America Ross Dress for Less Microsoft Store The UPS Store Auditorium Building Multnomah County Courthouse Portland Building Word Trade Center Portland FedEx Office Print & Ship Center Oregon DMV St. Mary’s Academy Keller Auditorium MAX Line(s) Streetcar(s)

RAINTREE • 19 UNITS • PORTLAND, OR

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Washington Park

Multnomah Athletic Club

Raintree

SW

amh SW Y

Tay lor S

t

SW 15th Ave

ill St

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Portland State University’s total enrollment for the 2020-2021 school year was 26,012 students. 20,969 of these students were undergraduates. While 78% of PSU students are from Oregon, the university attracts people from all 50 states ands 98 countries. The top non-US countries represented are China, India, Saudi Arabia, Kuwait, and Vietnam. PSU employs 6,338 full and part-time workers, including 1,796 faculty members. The university partners with various local stakeholders, including Intel, OHSU, Portland Public Schools, City of Portland, Multnomah County, and PGE for student and community programs.

RAINTREE • 19 UNITS • PORTLAND, OR

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PORTLAND DOWNTOWN 16 HFO INVESTMENT REAL ESTATE

Downtown Portland is home to the city’s thriving central business district, as well as Portland State University. It is the central transit hub in the city, featuring MAX light rail, buses, and the Portland Street Car. 53.5% of households do not have a vehicle, and 32.3% of workers commute by public transportation. The area has a walk score of 96, a transit score of 93, and a bike score of 87. Residents have access to a wide variety of amenities within walking distance, including bars and restaurants, grocery stores, shopping areas, parks, schools, and cultural attractions. 42.7% of residents who live in the vicinity of PSU walk to work.


Pearl District

Lloyd District

SW WATER + MEADE STREET APARTMENT SITE Downtown Portland

Mt. St. Helens

0.06 ACRE PARCEL • DOWNTOWN PORTLAND

Central Eastside

South Waterfront

405

5

In the neighborhood directly surrounding Portland State University, 96% of adults have a high school diploma, while 90.4% of adults have completed at least some college, and 25% have at least a master’s degree. A full 80% of residents report feeling safe and secure in their neighborhood. The homeownership rate is extremely low downtown – almost 90% of households rent. Most neighborhood residents are young students and professionals – only 1.8% of households have children, and the average number of occupants per household is 1.79. RAINTREE • 19 UNITS • PORTLAND, OR

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PORTLAND REGION APARTMENT MARKET

The Portland Metro Area consistently ranks among the nation’s lowest for apartment vacancy rates according to the U.S. Census Bureau Portland’s third quarter 2020 vacancy rate was 3.7% compared to the U.S. vacancy rate of 6.4%.

SKILLED WORKFORCE & STRONG EMPLOYMENT

Portland is known for its extremely well educated workforce, and is among the top U.S. cities with advanced college degrees. 18 HFO INVESTMENT REAL ESTATE


PORTLAND EMPLOYERS DIVERSIFIED ECONOMY

Portland 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. Companies which have opened major branches in Portland include:

Portland’s tech startup companies include: Viewpoint, Jama Software, Thetus, Urban Airship, Acquia, Elemental Technologies, Act-On, Puppet Labs, and The Clymb. RAINTREE • 19 UNITS • PORTLAND, OR

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PORTLAND, OREGON Oregon’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.

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1

No.

No.

Best U.S. Destination for Fall Foliage Outside of New England – Forbes Magazine –

No.3

Best Cities for Outdoor Activities in America – Niche.com –

2

No.

America’s Best Cities for Foodies – Sperlings Best Places –

No.4

America’s Best Cities for a Healthy, Affordable Retirement – Sperlings Best Places –

No.5

Metro Areas with Fastest Rising Income 2020 – Sperlings Best Places –

2

Fiscally Fit Cities Report – Sperlings Best Places –

No.6

Best U.S. Cities for Parks – The Washington Post –

RAINTREE • 19 UNITS • PORTLAND, OR

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PORTLAND MARKET SNAPSHOT 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. The area’s strong job market and high quality of life continues to attract new residents; between 2019 and 2020 approximately 76 people moved to the Portland metro area each day.* New apartment construction has not caught up to the housing demand created by in-migration. *Portland Center for Population Research and State of Washington Office of Financial Management

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4.6%*

37.6%*

$76,231*

Metro-area vacancy

Metro area renteroccupied housing rate

Median household income

15,935**

4,581*

54%

New Portland residents (2018-2020)

Portland residents per square mile

#2***

for Oregon in Migration in US (2019-2020)

Millennials 25-34 in Portland with a bachelor’s degree or higher

*U.S. Census Bureau, Q4 2020 **Portland State University Center for Population Research and Census ***U.S. Van Lines Annual Survey

RAINTREE • 19 UNITS • PORTLAND, OR

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OPERATIONS ANALYSIS

RAINTREE • 19 UNITS • PORTLAND, OR Income Scheduled Gross Rent Less: Vacancy/Credit Loss

Scheduled Rents $338,880 -$16,944

$17,836 -$892

Net Rental Income Other Income Includes: Laundry Includes: Utility Billing (RUBs) Includes: Miscellaneous

$321,936 $3,278 $2,818

$16,944 $173 $148

$0

$0

$460

Gross Operating Income Expenses Real Estate Taxes Insurance Total Utilities Fee Management Elevator Housekeeping Maintenance/Repairs Turnover Reserves Total Expenses Expenses per Unit % of Gross Operating Income Net Operating Income (NOI)

$325,214

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Projected Operations

Projected Operations $349,260 -$17,463

$18,382 -$919

$331,797 $11,577 $2,818

$17,463 $609 $148

$8,298

$437

$24

$460

$24

$17,117

$343,374

$18,072

Per Unit

-5.0%

0.0%

% GOI

Projected Operations

Per Unit

-5.0%

50.0%

% GOI

$30,113

$1,585

9.3%

$30,113

$1,585

8.8%

$13,775

$725

4.2%

$13,775

$725

4.0%

$21,751

$1,145

6.7%

$21,751

$1,145

6.3%

$26,017

$1,369

8.0%

$27,470

$1,446

8.0%

$3,855

$203

1.2%

$3,855

$203

1.1%

$5,324

$280

1.6%

$5,324

$280

1.6%

$12,840

$676

3.9%

$12,840

$676

3.7%

$3,515

$185

1.1%

$3,515

$185

1.0%

$4,750

$250

1.5%

$4,750

$250

1.4%

-$121,939

-$123,392

-$6,418

-$6,494

37.5%

35.9%

$203,275

$219,982


OPERATIONS ANALYSIS

RAINTREE • 19 UNITS • PORTLAND, OR RENT ROLL ANALYSIS: SCHEDULED RENTS Unit Type

Unit Count

Square Feet

Lowest Achieved Rent

Highest Achieved Rent

% Diff

Average Scheduled Rent

Average Scheduled Rent per Sq Ft

Studio

1

511

$995

$995

0.0%

$995

$1.95

1 Bedroom / 1 Bathroom

2

560

$900

$1,295

43.9%

$1,098

$1.96

2 Bedroom / 1 Bathroom

16

969

$1,320

$1,595

20.8%

$1,566

$1.62

Totals / Averages

19

902

$1,072

$1,295

21.6%

$1,486

$1.65

Square Feet

Average Scheduled Rents

Average Scheduled Rents per Sq Ft

Average Market Rent

Average Market Rent per Sq Ft

% Change

RENT ROLL ANALYSIS: MARKET RENTS Unit Type

Unit Count

Studio

1

511

$995

$1.95

$995

$1.95

0.0%

1 Bedroom / 1 Bathroom

2

560

$1,098

$1.96

$1,295

$2.31

15.3%

2 Bedroom / 1 Bathroom

16

969

$1,566

$1.62

$1,595

$1.65

1.8%

Totals / Averages

19

902

$1,486

$1.65

$1,532

$1.70

3.0%

RAINTREE • 19 UNITS • PORTLAND, OR

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OPERATIONS ANALYSIS

RAINTREE • 19 UNITS • PORTLAND, OR

RENT VARIATION BY UNIT TYPE $1,550 $1,450

Raintree has been self-managed by its long-term owner. The asset would benefit from management efficiencies and capturing marketrate income.

INCOME

Raintree’s average unit size is 902 sq ft, due to its large number of two-bedroom units. Rents currently average $1,486 per unit, or $1.65 per sq ft. Two-bedroom floor plans are a rarity in vintage assets like Raintree; most of Raintree’s competition have studio or onebedroom floor plans. Those properties that offer twobedroom units have smaller units averaging 792 sq ft, but their rents average $1,514 per unit, or $1.91 per sq ft. Residents are charged for garbage and they are responsible for electric and gas heat. Raintree does not currently charge residents for water/sewer or hot water (common area boiler). Projected other income estimates both utility income and other administrative charges typically found at properties managed by third-party management companies.

EXPENSES

Expenses have been adjusted to represent independent, third-party management and are estimated at $6,418 per unit, or 37.5% of GOI. Adjustments are primarily found in management fee, repair/maintenance and turnover. A new garbage contract with a rate of $171 per month is expected to reduce utility expenses. Raintree is an un-reinforced masonry (URM) building and insurance has been adjusted to include lender-required coverage for such construction.

$1,350

Scheduled Rent

$1,250 $1,150 $1,050 $950 $850 Studio

Minimum Rent

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1 Bedroom

Average Rent

2 Bedroom

Maximum Rent


OFFER TERMS

RAINTREE • 19 UNITS • PORTLAND, OR ASSET SUMMARY Property

Raintree

Location

924 SW 16th Avenue

City, State

Portland, Oregon 97205

County

Multnomah

Year Built

1911

Total Units

19

Acreage

0.12 Acres

Density

158 Units per Acre

QUESTIONS & TOUR REQUESTS: All tours and inquiries regarding Raintree are to be directed to HFO Investment Real Estate at (503) 241.5541. Please do not disturb the residents. Rob Marton • rob@hfore.com Greg Frick • greg@hfore.com Tyler Johnson • tyler@hfore.com Jack Stephens • jack@hfore.com Lee Fehrenbacher • lee@hfore.com Todd Tully • todd@hfore.com

PRICING

Adam Smith • adam@hfore.com

Price

$4,000,000

Price per Unit

$210,526

Price per Sq Ft

$233

Cap Rate

5.08%

Peyton King • peyton@hfore.com Steve Wendt • stephen@hfore.com

HFO Investment Real Estate 2424 SE 11th Avenue Portland, Oregon 97214 www.hfore.com (503) 241.5541 Fax: (503) 241.5548 Brokers licensed in the States of Oregon and Washington.

RAINTREE • 19 UNITS • PORTLAND, OR

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HFO Investment Real Estate Passion • Collaboration • Specialization 2424 SE 11th Avenue • Portland, OR 97214 www.hfore.com • 503.241.5541

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. ©2021 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.