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OFFERING MEMORANDUM

Victorian 12 Units

Downtown Portland, OR

www.hfore.com (503) 241.5541


2 HFO INVESTMENT REAL ESTATE


OFFERING MEMORANDUM

Victorian

Downtown Portland, Oregon 97201

TABLE OF CONTENTS Investment Summary

4

Location

14

Operations Analysis

24

Offer Terms

27

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


INVESTMENT HIGHLIGHTS Unique vintage asset with large units. The Victorian is ownermanaged and offers a rare opportunity to acquire a historic property in Portland’s urban core. Much of the Victorian’s historic character has been maintained with original hardwood floors, period lighting fixtures, high ceilings with picture rails and claw foot bathtubs. Victorian’s average unit size is 739 sq ft with a unit mix featuring one- and two-bedroom floor plans. Location, location, location. The Victorian has an outstanding central location in downtown Portland, Oregon. The property is less than a block from Portland State University and is around the corner from the Portland Streetcar line, an extension of the metro’s nationally recognized MAX light rail line. The Portland Museum, South Park Blocks, Safeway Grocery and Portland’s financial district are a few short blocks from the Victorian. Stable operating history, increasing rents. Victorian Apartments’ self-management provides an opportunity to increase cash flow. The property only charges for garbage; rent includes water, sewer and hot water. Current rents average $1,254 per unit, or $1.70 per sq ft and are trending nearly $125 per unit higher than trailing 12-month average rents.

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INVESTMENT HIGHLIGHTS •

Exceptional location along the Portland Streetcar near Portland State University

Potential for income upside and management efficiencies

Under-utilized basement space and storage

Large units with original built-ins, claw foot tubs and picture rails


INVESTMENT SUMMARY

ASSET SUMMARY Property

Victorian

Location

1124 SW Columbia Street

City, State

Portland, Oregon 97201

County

Multnomah

Year Built

1893

Total Units

12

Approx NR Sq Ft

+/- 8,870 Sq Ft

Avg Unit Size

+/- 739 Sq Ft

Stories

4

Acreage

0.09 Acres

PRICING

UNIT MIX Unit Type

Unit Count

Average Sq Ft

Total Sq Ft

$2,250,000

Price per Unit

$187,500

Price per Sq Ft

$254

Cap Rate

5.58% (Projected)

% of Total Units

1 Bedrooms

7

719

5,035

58.3%

2 Bedrooms

5

767

3,835

41.7%

12

739

8,870

100.0%

Total / Averages

Price

TOURS AND INQUIRIES

All tours and inquiries regarding the Victorian 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, OR 97214 www.hfore.com • (503) 241.5541 Please do not disturb tenants.

VICTORIAN • 13 UNITS • PORTLAND, OR

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Lloyd District

South Waterfront Downtown Portland

Victorian

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Oregon Convention Center

405

Victorian 26

Pearl District

5 Downtown Portland

Goose Hollow

405

Tri-met MAX Lines Portland Street Car Portland State University

VICTORIAN • 13 UNITS • PORTLAND, OR

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VICTORIAN • 13 UNITS • PORTLAND, OR

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VICTORIAN • 13 UNITS • PORTLAND, OR

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

Portland Multnomah County Portland R246650 / 1S1E04AD -01900

CONSTRUCTION SUMMARY Year Built No. Of Buildings Stories Windows Laundry Service Heating Hot Water

1893 1 Residential Building 4 stories Vinyl 1 common laundry area Steam heat registers Central hot water

VICTORIAN • 13 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 99W

ta Av e

SW SW M Clay St arket St

adiso

n St

VER TE RI AMET

SW M

EAST PORTLAND

SW V is

Washington Park

DOWNTOWN PORTLAND

12th Ave

26

PORTLAND

PIONEER PLACE

5

Martin Luther King Jr Blvd

VICTORIAN

St

WILL

SW W ashin

gton

GOOSE HOLLOW

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

VICTORIAN

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)

VICTORIAN • 13 UNITS • PORTLAND, OR

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East Portland

South Waterfront

Mt. Hood Keller Auditorium

e River Willamett

SOUTH PARK BLOCKS

t. SW Market S

SW C l

VICTORIAN

ay St.

Portland State University

SW 12th Ave.

405 SW 13th Ave.

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Portland State University

PORTLAND DOWNTOWN

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. VICTORIAN • 13 UNITS • PORTLAND, OR

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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.

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Pearl District

Lloyd District

SW WATER + MEADE STREET APARTMENT SITE Downtown Portland

Mt. St. Helens

0.06 ACRE PARCEL • DOWNTOWN PORTLAND

Central Eastside

South Water Front

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. VICTORIAN • 13 UNITS • PORTLAND, OR

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PORTLAND REGION APARTMENT MARKET

The Portland Metro Area’s fourth quarter 2020 vacancy rate was 4.6% compared to the U.S. vacancy rate of 6.5%.

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.

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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. VICTORIAN • 13 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

VICTORIAN • 13 UNITS • PORTLAND, OR

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OPERATIONS ANALYSIS

VICTORIAN • 12 UNITS • PORTLAND, OR Income Scheduled Gross Rent Less: Vacancy/Credit Loss

Current Scheduled Rents $180,612 -$9,031

$15,051 -$753

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

$171,581 $2,639 $2,039

$14,298 $220 $170

$0

$0

$600

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

$174,220

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Projected Operations

Projected Operations $184,500 -$9,225

$15,375 -$769

$175,275 $14,346 $2,039

$14,606 $1,195 $170

$9,307

$776

$50

$3,000

$250

$14,518

$189,621

$15,802

Per Unit

-5.0%

0.0%

% GOI

Projected Operations

Per Unit

-5.0%

60.0%

% GOI

$17,013

$1,418

9.8%

$17,013

$1,418

9.0%

$2,115

$176

1.2%

$2,115

$176

1.1%

$16,522

$1,377

9.5%

$16,522

$1,377

8.7%

$13,938

$1,161

8.0%

$15,170

$1,264

8.0%

$7,800

$650

4.5%

$7,800

$650

4.1%

$2,400

$200

1.4%

$2,400

$200

1.3%

$3,000

$250

1.7%

$3,000

$250

1.6%

-$62,789

-$64,021

-$5,232

-$5,335

36.0%

33.8%

$111,432

$125,600


OPERATIONS ANALYSIS

VICTORIAN • 12 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

1 Bedroom / 1 Bathroom

7

719

$1,195

$1,250

4.6%

$1,218

$1.69

2 Bedroom / 1 Bathroom

5

767

$1,225

$1,325

8.2%

$1,305

$1.70

12

739

$1,210

$1,288

6.4%

$1,254

$1.70

Square Feet

Average Scheduled Rents

Average Scheduled Rents per Sq Ft

Average Market Rent

Average Market Rent per Sq Ft

% Change

Totals / Averages

RENT ROLL ANALYSIS: MARKET RENTS Unit Type

Unit Count

1 Bedroom / 1 Bathroom

7

719

$1,218

$1.69

$1,250

$1.74

2.6%

2 Bedroom / 1 Bathroom

5

767

$1,305

$1.70

$1,325

$1.73

1.5%

12

739

$1,254

$1.70

$1,281

$1.73

2.1%

Totals / Averages

VICTORIAN • 13 UNITS • PORTLAND, OR

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OPERATIONS ANALYSIS

VICTORIAN • 12 UNITS • PORTLAND, OR

RENT VARIATION BY UNIT TYPE $1,350

Victorian is self-managed and the asset would benefit from management efficiencies and capturing market-rate income.

INCOME

$1,330 $1,310 $1,290

Scheduled Rent

$1,270

At the Victorian, residents are charged for garbage, and apartments are individually metered electric and gas for cooking. Victorian does not currently charge residents for water/sewer, hot water (common area boiler), or steam heat. Projected other income estimates, both utility income and additional administrative charges typically found at properties managed by third-party management companies.

$1,250 $1,230 $1,210 $1,190 $1,170

EXPENSES

$1,150 1 Bedroom

Minimum Rent

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Victorian’s average unit size is 739 sq ft. Rents currently average $1,254 per unit, or $1.70 per sq ft. Two-bedroom floor plans are a rarity in vintage assets like Victorian; most of Victorian’s competition have studio or onebedroom floor plans. Those properties that offer twobedroom units have average rents of $1,514 per unit or $1.91 per sq ft.

2 Bedroom

Average Rent

Maximum Rent

Expenses have been adjusted to represent independent, third-party management and are estimated at $5,335 per unit, or 34% of GOI. Adjustments are primarily found in management fee, repair/maintenance and turnover.


OFFER TERMS

VICTORIAN • 12 UNITS • PORTLAND, OR ASSET SUMMARY Property

Victorian

Location

1124 SW Columbia Street

City, State

Portland, Oregon 97201

Year Built

1893

Total Units

12

Avg Unit Size

+/- 739 Sq Ft

QUESTIONS & TOUR REQUESTS: All tours and inquiries regarding Victorian 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

PRICING

Lee Fehrenbacher • lee@hfore.com

Price

$2,250,000

Todd Tully • todd@hfore.com

Price per Unit

$187,500

Adam Smith • adam@hfore.com

Price per Sq Ft

$254

Cap Rate

5.58% (projected)

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.

VICTORIAN • 13 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.

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