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29 ANNUAL ®

IREM FORECAST BREAKFAST

Thursday December 1, 2016

Brought to you by:

Portland Ballroom Oregon Convention Center 777 NE MLK Jr. Blvd. Portland, Oregon

IREM Oregon-Columbia River Chapter No. 29 ®

29th Annual IREM® Forecast Breakfast

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®

Highlights of the 2016 IREM Forecast Breakfast Forecast Breakfast Committee 2016 Friends of IREM® – Breakfast Sponsors Oregon-Columbia River Chapter No. 29—Volunteers   

Chapter Officers Executive Council & Members at Large Committee Chairs

® Becoming an ®Accredited Management Organization ® 

Featured AMO Sponsors & AMO Firm Members

Oregon-Columbia River Chapter No. 29—Membership Academic Members Associate Members

Becoming an Accredited Residential Manager® Accredited Residential Managers®

Becoming a CPM® Candidate

Certified Property Manager® Candidates

Becoming a Certified Property Manager® Certified Property Managers®

2016 SPEAKER PANEL Master of Ceremonies

Brad Miller

Brix Law, LLC Finance Industrial Multifamily Office Retail Development

29th Annual IREM® Forecast Breakfast

Thomas Marcus Patrick Stalick Karlin Conklin David Hill Jack Gallagher Gerard Mildner

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Wells Fargo Bank Kidder Mathews IMG Northwest Newmark Grubb Knight Frank Colliers International Portland State University


2016 FORECAST BREAKFAST COMMITTEE Laura Barry CPM® • Perlo Construction • Chair Tiffany Boysun-Van Dyke • Allstate Insurance • Vice Chair Cini Apostol, CPM® , RPA® , CCIM® • Kidder Mathews Katrin Arp • J.R. Johnson, Inc. Ronda Butler • Raindrop Supply Valorie Cochran, CPM® • Unico Properties LLC David Genrich, CPM® • Jones Lang LaSalle Sarah Haws • Fast Signs Caroline Karl, CPMC® • C & R Real Estate Services Traci McCauley, CPM® • Colliers International Julie L. Muir, CPM ® • Newmark Grubb Knight Frank Corey Petersen • Pacific Landscape Management Steve Platt • ABM Tara Platt • Specht Properties LLC Transcript Design: Julie L. Muir, CPM® • Newmark Grubb Knight Frank 29th Annual IREM® Forecast Breakfast

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2016 FRIENDS of IREM® 2016 Friends of IREM® – Breakfast Sponsors AAA Heating & Cooling, Inc.

ABM

Alliance Flooring Services

Apartment Guide

Benge Industries

Cantel Sweeping

Centimark Roofing

Clear Water Construction

First Response Security

FSG Companies

Indigo Paint & Contracting

Interstate Roofing

Columbia Crystal Greens Roofing & Sheet Landscaping Metal Harbo Emergency Howard S. Services & Wright Restoration

J.R. Johnson, Inc.

LandCare

Millennium Building Services

National Maintenance Contractors

Northwest Tree Specialists

Northwest Landscape Services

Oregon-Aire

Pacific Landscape Management

Pavement Maintenance

Perlo Construction

Portland Business Alliance

Portland General Electric

Reitmeier

Rose City Moving & Storage

ServPro of the Northwest

The Oregonian

Township United

Water Solutions Northwest

THANK YOU!! 29th Annual IREM® Forecast Breakfast

Lovett Services Multi-Family NW

Whirlwind Clean & Green Page — 4 —

THANK YOU!!


2016 Forecast Breakfast Premium Sponsor

Knowledge and skills, earned in the real world. NAI Elliott has four decades of experience in commercial real estate, thriving and growing in our roles as advisors, brokers and managers. We combine hands-on experience with a fundamentally collaborative approach, applying the collective knowledge and skills of everyone on our team. And NAI Elliott is a partner in the largest, most powerful network of independent commercial real estate firms in the world. Our NAI Global affiliation provides access to expert partners in markets across the country and around the globe. 901 NE Glisan Street Portland, OR 97232 503-224-6791 www.naielliott.com

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FRIENDS of IREM

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2016 FRIENDS OF IREM® PROGRAM

Throughout the country, Friends of IREM® programs are a Chapter’s life-line. Without the support of our Friends, both financially and through participation, our Chapter would be hard-pressed to provide quality member services and programs, such as our famous Forecast Breakfast. We consider our Friends as our partners—an enthusiastic and dedicated group of professionals who are always willing to lend a helping hand—from committee work and event planning—to donations of goods and services, thereby allowing us to raise money for charity and make a difference in the community and our local real estate industry. THANK YOU FRIENDS...FOR ALL THAT YOU DO!

If you’re interested in our 2016 Friends of IREM® Program, a relationship with IREM® brings:

COMMUNICATION

…with industry leaders who manage nearly $2 trillion in real estate assets. With nearly

19,000+ members worldwide, IREM® is the largest organization dedicated to advancing the professional interests of commercial and multi-family real estate managers. In addition, IREM Members: • Have responsibility for over 10.4 billion square feet of commercial properties. • Manage more than 11.4 million residential units. • Manage, on average, commercial properties totaling 828,000 square feet. • Manage, on average, 1,293 residential units.

COLLABORATION

…with the most respected organization in the real estate management industry. IREM ® has been the source for education, resources, information, and membership for real estate management professionals since 1933. An affiliate of the National Association of Realtors, IREM® is the only professional real estate management association serving both the multi-family and commercial real estate sectors. Membership includes more than 19,000 individual members and 535 corporate members. With 80 U.S. chapters, 14 international chapters, and several other partnerships around the globe, IREM ® is an international organization that also serves as an advocate on issues affecting the real estate management industry.

CONNECTION

…with an audience of $9.3 billion in buying power. Through networking, education and digital exposure, IREM® helps connect you to target the top firms in the country.

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FRIENDS of IREM

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FRIENDS of IREM® Program Benefits ®

Your annual FRIEND OF IREM sponsorship fee provides you with the following benefits in 2016:  Two complimentary tickets (plus advertising) at the annual FORECAST BREAKFAST held in December of each year. Your sponsorship fee also includes prominent recognition at the event itself, including highlights of your firm in the event transcript. This is an opportunity to showcase your business to hundreds of attendees in the Portland/Metro area real estate industry!  Annual access to approximately 300 participants and members of the Oregon-Columbia River Chapter No. 29, including Certified Property ® ® Managers (CPM®), ACoM Members, AMO Firms and Accredited ® Residential Managers (ARM ) in the Portland area.  One set of mailing labels to the Chapter membership at no charge, sent when you request them—providing the most up-to-date information available.  The ability to attend the monthly membership meetings and events at the member rate for up to two of your company’s representatives (excludes the Annual “Inaugural” Awards Dinner). ®

FRIENDS of IREM name tags for use at monthly membership meetings identifying you as a FRIEND along with the ability to place brochures and business cards at tables (with advance notice). ®  Your company name listed as a FRIEND of IREM on our website: www.iremoregon.org ®  Company website linked from IREM Oregon’s website at www.iremoregon.org 

New Benefit: Introduce and recommend a new FRIEND to the IREM® office. Once that referral has been approved as a FRIEND of IREM ®, your company will be credited $300 off of your next years' program sponsorship PER NEW FRIEND! The program allows any FRIEND of IREM® in good standing to bring up to THREE (3) new FRIENDS per company in the calendar year. That's up to $900 off of your 2016 program sponsorship! For questions or more information, please call 503.228.0002, or send us an email at:

29th Annual IREM® Forecast Breakfast

www.info@iremoregon.org.

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FRIENDS of IREM

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2016 FRIENDS of IREM® AAA Heating & Cooling

5017 Northeast Grand Ave. • Portland, OR 97211 • (503) 549-4183

For over half a century, AAA Heating and Cooling has been a leader in residential and commercial furnace, heating and air conditioning solutions for thousands of clients throughout Portland, Beaverton, Hillsboro, Lake Oswego and the surrounding areas. As a family-owned Portland business, we offer a variety of services, including the installation of home heating and air conditioning systems, AC and furnace repair, duct cleaning as well as a variety of commercial heating and cooling solutions.

Alliance Flooring Solutions

2646 North Marine Drive • Portland, OR 97217 • (503) 253-5656

Alliance Flooring Services was established to provide the highest level of services, quality, and communication. When we established our business, we felt no one in the industry was providing the quality and superior services clients needed. We base our operation on responding immediately to our customers' needs, and providing the utmost quality in services and products. We are continually striving to educate on-site staff and seek feedback to streamline our operations to make it more efficient and allow us to serve you better. We are one of the only companies specializing in multifamily carpet and vinyl installations. This expertise allows us to adapt to the ever changing needs in the multi-family industry

ABM On-Site Services

1320 NE 63rd Ave • Portland, OR 97213 • (503) 253-5656

The decision to outsource a function is an important one. No matter what services you outsource, the competency of the provider you choose will affect the outcome – and your level of satisfaction. With more than 100 years of experience serving diverse client industries and multiple facility types, ABM stands ready to deliver facility solutions to meet your requirements – whatever those needs may be and wherever your properties are located. Our nearly 100,000 employees, enabled with award-winning technology, are experienced and expert at what we do. We focus on our core businesses so that you can focus on yours. ABM builds value for our clients by reducing operating costs while keeping their properties safe, clean, comfortable and energy efficient, through individual or integrated solutions.

Apartment Guide

9570 SW Barbur Blvd, Suite 215 • Portland, OR 97219 • (503) 525-0636

Apartment Guide Printernet, the industry media leader for over 32 years, is focused on TARGETED MARKETING and making the REAL INVESTMENTS that deliver the BEST RESULTS for both our advertisers and apartment shoppers. Apartment Guide Printernet provides the most and highest quality traffic and leads for the lowest cost per lease of any lead source in the industry. We’ve got the LEAD…We’ve got the LEASE. Call your marketing partner today at (503)706-0866 for advertising details. Visit our website at www.apartmentguide.com

Benge Industries

1709 NW Eleven Mile Avenue • Gresham, OR 97030 • (503) 682-9123

Benge Industries is a full service asphalt maintenance company serving the commercial and industrial sector of the Portland metro area since 1993. We provide optimal service and quality workmanship offering a one year guarantee on all work performed by Benge Industries covering both materials and workmanship. We believe in quality workmanship and believe you should not accept anything less.

29th Annual IREM® Forecast Breakfast

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2016 FRIENDS of IREM® Cantel Sweeping

PO Box 83265 • Portland, OR 97283 • (503) 661-4337

Cantel Sweeping specializes in parking lot sweeping and striping. We operate every night, 7 days a week, 365 days a year. No other sweeping company covers the Willamette Valley like Cantel Sweeping. We cover the Northwest from Vancouver Washington to Salem Oregon. A clean and well maintained parking lot makes a positive impression upon your customers. We constantly review your needs and recommend the optimal, but not excessive, sweeping and striping frequency to provide that clean, well maintained look. Cantel Sweeping is committed to helping to clean up the environment. Parking lot sweeping minimizes the amount of pollutants that go directly from your parking lot to the storm water runoff system. We capture these pollutants and process them through a state-of-the-art facility where all debris and waste water is recycled or properly disposed. Call us for a free bid or check out our website at www.cantelsweeping.com

Centimark Roofing

3033 Northeast 172nd Place • Portland, OR 97230 • (503) 535-2555

We offer all major commercial roof systems. We recommend and install the right roof for your building. The CentiMark Difference includes safety procedures and plans that are in place for every roofing job, and the safety plans are always reviewed with the customer. Single source customized, extended and transferable warranty options are available. References are available by roof size, type or industry. Dedicated crews specializing in service provide warranty work and emergency repairs. Preventative Maintenance Programs and online roof management tools are available

Clear Water Construction

34551 SE Colorado Road • Sandy, Oregon 97055 • (503) 539-6676

With years of experience we know that only quality people and components can result in a successful project. Clearwater Construction uses the highest grade materials, coupled with the best craftsmanship and project management to deliver the highest level of service and quality. Customer satisfaction is paramount at Clearwater Construction. This is made possible by open lines of communication throughout the project lifecycle. Exceptional quality at a fair price, on every project, whether it be complete re-clad or small repair.

Columbia Roofing & Sheet Metal

18525 SW 126th Place • Tualatin, OR 97062 • (503) 682-9123

Columbia Roofing and Sheet Metal started by doing small repairs that built into a successful business model of helping owners make financial sense out of roofing repairs and replacement. While the average roofing company stays in business just five years or less, Columbia Roofing and Sheet Metal has spent more than a decade in the rain-soaked Pacific Northwest putting roofs over the things that people care about most. So whether it’s a question you need answered, or maintenance and repair issues that need addressing, you can rely on the fact that Columbia Roofing and Sheet Metal will be around to take care of you, your home and your business. Columbia Roofing & Sheet Metal now does work in Oregon, Washington, Idaho and California with a year around staff of over 50 people. Columbia provides 24/7 leak repair service, full commercial replacement and recovers, sheet metal work and roofs, plus residential roof repairs, recovers and replacements. The company’s statement tells you how they do business, “Expert Solutions, Guaranteed Results”, it’s just how we do business.

29th Annual IREM® Forecast Breakfast

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2016 FRIENDS of IREM® Crystal Greens Landscape

9005 SE Saint Helens St. • Clackamas, OR 97015 • (503) 650.0590

Crystal Greens Landscape is a full service landscape contractor. We provide landscape services to property owners and managers from Southwest Washington through the mid-Willamette Valley. We are fully licensed in all phases of landscape installation and maintenance and have been in business in the Portland Metropolitan area since 1982. Our management staff all have acquired their Bachelor’s degrees in Ornamental Horticulture and we focus on training and employee longevity. From a service standpoint, we strive to provide an aesthetically pleasing exterior environment balancing horticultural needs and realistic budgetary constraints.

First Response, Inc.

4970 SW Griffith Drive, Suite 100 • Beaverton, OR 97005 • (503) 207-5300

“A Higher Standard in Safety & Security” First Response, Inc. is the largest locally

owned private Security Company in the Portland, Vancouver & Seattle areas. Our services include professional Patrol and On-site Officers, 24-hour Alarm Response, Criminal Back ground Checks, Installation of Burglary and Fire Systems, CCTV, Phone & Data and a Local Monitoring Station. First Response, Inc. is a local security company able to provide all your security needs. We specialize in Security Patrols, Alarm Response, On-Site Guard Services and state-of-the-art Security Systems with Cameras. We save our clients hundreds of dollars a year with our ability to serve all their security needs. We have patrol vehicles on the road 24 hours a day and we continue to be the leader in alarm response in our industry. No other security company is more experienced or provides services to more Property Management Companies than FIRST RESPONSE. We are involved in the community and believe in establishing partnerships with companies who wish to protect their investments with professional services. Check our website at www.fr-inc.com.

FSG Companies

2701 NW Vaughn Street • Portland, OR 97210 • (503) 680-2865

FSG Northwest is very proud of the reputation it has acquired since its formation in 1991. The measure of confidence expressed by our clients has kept us motivated and able to compete with national companies. While not a large company, we are known as a firm that consistently delivers its services competently and competitively. Many service companies accept turnover of both its employees and its accounts as the norm. We do not. It is very rare that we lose either. Many are surprised that we do not have a sales department or a marketing team. Our growth has occurred simply by referrals. Our commitment to serve our clients to the very best of our ability remains unwavering throughout the entire period of time that we are privileged to serve you – long after the contract is signed and the promises spoken.

HARBRO Emergency Services & Restoration

10898 SW Tualatin Sherwood Road • Tualatin, OR 97062 • (503) 482-6720

Har-Bro specializes in property damage restoration, by providing 24/7/365 emergency services and reconstruction for residential and commercial properties. Our Mission is to provide victims of disaster with immediate restoration service with the utmost Integrity, Dedication to Quality, and Outstanding Customer Service.

29th Annual IREM® Forecast Breakfast

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2016 FRIENDS of IREM® Howard S. Wright

10898 SW Tualatin Sherwood Road • Tualatin, OR 97062 • (503) 482-6720

At Howard S. Wright, a Balfour Beatty company, we remain relentless in our desire to leave lasting legacies in the communities where we build. Our people are dedicated to providing the best service and the smartest solutions that deliver maximum value to our clients and partners. Proud to be a part of the world-class construction services firm, Balfour Beatty, we are excited to share in the launch of our new online platform. To dig deeper into our Pacific Northwest markets, visit our Seattle and Portland local team sites. We hope that you'll follow our journey online and find us on social media via #HowardSWright.

Indigo Paint & Contracting

5331 SW Macadam Ave • Portland, OR 97239 • (503) 224-9171.

Beautiful landscaping inspires. It welcomes. It brings you back to the wonder of nature. And it makes a lasting impression on every person who visits your property. After two decades in business and now with more than 4,000 employees coast to coast, LandCare is one of the most comprehensive providers of commercial landscape services in the United States. We’re proud to be consistently ranked as one of the top landscape service companies in North America.

Interstate Roofing Company

15065 SW 74th Ave • Portland, OR 97223 • (503) 684-5611

Mike Satran, founder of Interstate Roofing, has grown the business over the last 20 years from a “one man show” to a multimillion dollar corporation. In 1999, ten years after establishment, Interstate crossed the benchmark of installing 200 roofs in a year. We now install over well over 2000 roofs each year!!! Committed to servicing today with the dependability our customers have grown to rely on from our past reputation. Interstate Roofing, Siding, Windows, Gutters and MORE! Contact us today! Since 1988, Interstate has grown, not only financial strength, but also in quality, safety, workmanship and employee benefits.

JR Johnson, Inc.

PO Box 17196 • Portland, OR 97217 • (503) 240-3388

At J.R. Johnson, Inc., we offer a full suite of general contracting, construction defect repair, and emergency restoration services. Serving Oregon and Washington for over 40 years, J.R. Johnson is an established and trusted partner in the improvement and restoration of our clients’ valued real estate assets. Our restoration specialists are certified experts in the repair and renovation of occupied multi-family residential properties, commercial buildings, and homes damaged by catastrophe. J.R. Johnson, Inc., the experts you can trust with the experience, knowledge and capacity to meet your improvement and restoration needs.

LandCare

7920 SW Hunziker Rd., • Tigard, OR 97223 • (503) 597-2350

Beautiful landscaping inspires. It welcomes. It brings you back to the wonder of nature. And it makes a lasting impression on every person who visits your property. After two decades in business and now with more than 4,000 employees coast to coast, LandCare is one of the most comprehensive providers of commercial landscape services in the United States. We’re proud to be consistently ranked as one of the top landscape service companies in North America.

29th Annual IREM® Forecast Breakfast

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FRIENDS of IREM

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2016 FRIENDS of IREM® Lovett Inc.

6920 NE 42nd Avenue • Portland, OR 97218 • (503) SERVICE

Lovett has been servicing the NW for 15 years now with a unique range of complimen-

tary contractor services ranging from Plumbing, Drain, Excavation, Directional Drilling, Electrical and Restoration and Waterproofing. Our team of specialists are all licensed and bonded. We pride ourselves on our expertise and attention to detail. There is no project too big or small for us to help you or your team with. Showing up on time, working quickly and efficiently for a fair price, and doing the job right the first time, this is how we’ve built our business over the years. For more information about LOVETT visit our website at www.lovettservices.com

Millennium Building Services

5909 N. Cutter Circle • Portland, OR 97217 • (503) 281-1949

Millennium Building Services, Inc. is a Portland-based company that provides a full range of services including Contract Janitorial, Carpet & Furniture Cleaning, Hard Surface Floor Care, Day Porter Services, Water Damage Restoration, Hazardous Waste Clean-Up, High-Rise Window Cleaning, Construction Clean- Up, Routine Maintenance & Handyman Services, Pressure Washing, Parking Lot & Interior Lighting Maintenance and 24 Hour Emergency Response Services.

Multi-Family Northwest

16083 SW Upper Boones Ferry Rd. #105 • Tigard, OR 97224 • (503) 213.1281

Founded in 1992, the Metro Multifamily Housing Association (MMHA) proudly represents residential property managers and vendors throughout Portland, Southern Washington, and down through the Willamette Valley to Medford. Our members manage over 150,000 units in these areas and represent every service related to the industry. MMHA is committed to promoting a high degree of professionalism for rental housing providers. We sponsor educational courses, deliver the most comprehensively reviewed set of forms in the state, and advocate to local and state governments on behalf of the industry to ensure our members the best operating environment possible. As a member-driven association with nearly a dozen committees composed of members and staff, MMHA develops and executes programs and activities that serve members and non-members alike.

National Maintenance Contractors

7405 SW Tech Center Dr., Suite 120 • Tigard, OR 97223 • (503) 601-3131

“We’ll Make Your Life Easier” National Maintenance Contractors is a full-service commercial janitorial building maintenance company. We have been in business for over 30 years and have office locations in Portland, Seattle, and Spokane. National has the experience, size, and structure to properly service accounts of any size and scope. As an industry leader with low janitor turnover, you will feel comfortable and secure knowing that your facilities are cleaned consistently each and every time with the same highly trained and experienced cleaners. Our quality control and follow-up communication system is second to none. All of our management and operations staff use a web-based work order communication system that utilizes e-mail, Blackberry cell phones, telephone as well as direct personal contact to insure quality. We have the resources to provide excellent 24 hour / 7 day per week emergency response for those situations that occur after scheduled hours. In addition to nightly janitorial service we also provide carpet cleaning, hard floor cleaning, window washing, day porter service, and construction cleaning services.

29th Annual IREM® Forecast Breakfast

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2016 FRIENDS of IREM® Northwest Landscape Management & Design

1800 NW Cornelius Pass Rd, • Hillsboro, OR 97124 • (503)486-5154

We’re on a mission to create an environment where the people we hire feel valued and respected – not just for the job they do, but for the great people they are. All of us have families, personal passions and other interests outside of work, and we appreciate how that enriches our culture. The effective management of exterior assets is just as critical to your bottom line as the buildings themselves. Because we know you have short and long term strategic goals for each property, we take a multi-pronged, holistic approach to managing your landscape assets in support of those goals. It’s a unique philosophy that we’ve evolved over the course of more than 20 years. And our clients have found that it streamlines programming, ensures a more efficient allocation of resources and results in a more profitable property.

Northwest Tree Specialists

21300 NW Mauzey Rd • Hillsboro OR 97124 • (503) 645-2242

Northwest Tree Specialists is locally owned & operated and we consider ourselves a family business. At the forefront of our operation (and the secret to our success) are our family values. It all begins with care. We care about trees and the value they bring to our lives and environment. We care about the job we do, the property we are invited to work at and our reputation. We care about our customers and our staff, and being a leader in our local market. Honesty, ethics and pride in our work. Integrity is the core of who we are. We don't take short-cuts and we strive to under-promise and over-deliver. We make sure our customers are happy with our work and if we ever fall short, we make it right. Tree work can be a dangerous profession and safety on the job is an important practice on every job site by every employee, every day. We don't take shortcuts and we carry workers compensation insurance to ensure that all of our workers in the field are covered in the event of an accident.

Oregon-Aire, Inc.

7715 NE 33rd Drive, Suite A • Portland, OR 97211 • (503) 335-2222

Oregon-Aire, Inc. was established in 1986 and is a leading provider of HVAC systems and LonWorks-based Building Automation Systems to commercial and industrial customers in Oregon and Washington. As an authorized LonWorks Systems Integrator, Oregon-Aire, Inc. is proud to represent LonWorks-based Building Automation Systems in the Northwest. Oregon-Aire specializes in the design, installation, repair and maintenance of all major types and brands of HVAC systems. Our goal at Oregon-Aire is to increase the value of our clients’ assets through proper maintenance and management of their HVAC assets. We are especially proud to be actively involved and associated with our good friends at IREM®.

Pacific Landscape Management

21555 NW Amberwood Dr • Hillsboro, OR 97124 • (503) 648-3900

Locally owned and operated, Pacific Landscape Management is one of the leading landscape management companies in the nation. We serve over 300 commercial and HOA properties in Portland metro area with a passion for service and technical expertise. Our experienced and motivated team is the most experienced and stable in the local area. This ensures you the most thoughtful and cost effective solutions to your landscape needs. Through our efforts to become a more sustainable company and provide more sustainable services to our clients, we were also selected as one of Portland’s greenest companies by Oregon Business. As an industry leader, our sustainable programs are used as a model throughout the country. We have received the Sustainable Company Award from our national trade association PLANET.

29th Annual IREM® Forecast Breakfast

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2016 FRIENDS of IREM® Pavement Maintenance Inc.

10100 NE Marx Street • Portland, OR 97220 • (503) 257-9257

Portland, Oregon’s premier, full-service parking lot Maintenance Company. Pavement Maintenance, Inc., along with our Metro Sweeping division, is the premier, full service parking lot maintenance company in the Portland/Vancouver metro area. Our company has the capacity to handle any size job with modern, specialized trucks & equipment and experienced, well-trained staff. We regularly maintain: Shopping Centers, Office Buildings, Industrial Parks, Parking Garages, Mobile Home Parks, Grocery Stores, Medical Buildings, Apartment Communities, Subdivisions and Private Driveways. We at Pavement Maintenance, Inc., are proud of the quality and reliability of service that we provide. Through effective management techniques and innovative maintenance solutions, Pavement Maintenance, Inc., can help you maximize your valuable asphalt maintenance dollars. Our professional management team can give you written recommendations along with cost estimates for short, medium and long term time frames which will both enhance the appearance of your property and extend the life of the asphalt. As a full service "Pavement Maintenance" company, we can reduce the need to deal with multiple vendors with varying degrees of dependability.

Perlo Construction

16101 SW 72nd Ave #200 • Portland, OR 97224 • (503) 624-2090

From the company’s inception in the 1950s in Portland, Oregon, Perlo Construction has been built on the hard work and integrity of a premier group of construction professionals who are known for their efficient and fair business practices. Our long-standing prominence as a local commercial general contractor has helped us develop a strong network of relationships, resulting in substantial repeat business and success in a very competitive industry. While continuing the legacy that stems from the uncompromising principles of our strong founders in Sivers Construction, Perlo has grown substantially over the years. The company adopted the name McCormack Pacific in 1986 under the leadership of Bill McCormack and Terry Edgar. When current owners Jeff Perala and Gayland Looney became partners in 2000, the name changed to Perlo McCormack Pacific. Finally, in 2010, the company evolved to Perlo Construction. While the company’s headquarters remain in Portland, we are licensed across the Western United States and in Kentucky and Minnesota. In 2014, Perlo Construction opened its first satellite office in Phoenix, Arizona, to serve markets in the Southwest.

Portland Business Alliance

1200 SW Market St #150 • Portland, OR 97201 • (503) 224-8684

The Portland Business Alliance is Greater Portland’s Chamber of Commerce and is the voice of business in the region. As the voice of business, the Alliance advocates for issues that support commerce, community health and the region’s overall prosperity. With more than 1,700 member companies, representing 325,000 business people, the Alliance is the region’s leading business organization. The Alliance’s mission to promote and foster an environment in the Portland region that attracts, supports and retains private-sector jobs, spurs economic vitality and enables quality educational opportunities for the region’s residents. In pursuit of that mission, the Alliance advocates for business at all levels of government and also offer a variety of networking events and professional development opportunities to connect and foster growth in our region’s business community. The Alliance is governed by a 58-member board of directors, representing a diversity of companies, industries and business interests.

29th Annual IREM® Forecast Breakfast

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2016 FRIENDS of IREM® Portland General Electric

335 NE Roberts Ave, • Gresham, OR 97030 • (503) 228.6322

PGE is a recognized leader in the utility industry and has safely and dependably powered northwest Oregon since 1889. Today, we’re focused on providing reliable electricity supplies at reasonable prices while continuing to be good stewards of Oregon’s environment. In part, that means we’re leading the charge on clean energy in Oregon and we consistently run the most popular renewable power program in the nation PGE is a recognized leader in the utility industry and has safely and dependably powered northwest Oregon since 1889. Today, we’re focused on providing reliable electricity supplies at reasonable prices while continuing to be good stewards of Oregon’s environment. In part, that means we’re leading the charge on clean energy in Oregon and we consistently run the most popular renewable power program in the nation.

Reitmeier

19570 SW 90th Court • Tualatin, OR 97062 • (503) 603.0205

For over 30 years, Reitmeier has provided superior commercial HVAC repair, installation, and maintenance services to our customers in the Portland Oregon and SW Washington markets. Our goal is to save you money and maximize your HVAC equipment’s life. We provide our customers with experience, reliability, honesty, and excellence every day. At Reitmeier, we know that great service is powered by great people. We’ve built a smart, determined team and empowered them with the tools and opportunities for success. We come from all walks of life, but are unified by a common mission, and are living values that inform our work each and every day.

Rose City Moving & Storage

5130 N Basin Avenue • Portland, OR 97217 • (503) 285-8100

When you take good care of today’s customers, you won’t need to worry about tomorrow’s! This philosophy at Rose City Moving & Storage has helped make us one of the area’s largest local movers. Attaining that position and keeping that philosophy alive has not come easily. Hard work, a dedication to service, and a belief in efficient use of time and materials has driven Rose City Moving & Storage to be the best since 1979. Rose City Moving & Storage specialists have become expert advisers on: Modular furniture systems, Residential moves, Warehouse control, Commercial moving procedures and much more.

ServPro of Northwest Portland

1001 SE Division Street Suite 1 • Portland, OR 97202 • (503) 252.1609

We are the full service electrical contractor for all your residential and commercial needs. At Squires Electric we take pride in our professional and efficient service. We bring the innovative ideas and expertise you need to make your project successful.

The Oregonian

1320 SW Broadway • Portland, OR 97201-3411• (503) 221-8273

The Oregonian, founded in 1950, is the largest daily newspaper in the Northwest. The Oregonian provides classified and display advertising geared for results! Our experienced team of advertising specialists assist with advertising design and content. The Oregonian offers the lowest retail cost per thousand rates among the top 30 metropolitan newspapers in the nation. The Oregonian now provides rental classifieds online from both the daily and Sunday newspaper at Oregon’s leading local content website, Oregonlive.com.

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FRIENDS of IREM

®

2016 FRIENDS of IREM® Township United

1750 SW Skyline Blvd • Portland, OR 97221 • (415) 382-8858

Township-United Building Services is located in Portland, Oregon. This organization primarily operates in the Business Activities At Non-commercial Site business / industry within the Business Services sector. This organization has been operating for approximately 8 years.

Water Solutions Northwest

6450 NE 116th Ave. #107 • Vancouver, WA. 98662 • (360) 524-2568

Water Solutions Northwest will keep your equipment running at peak performance with our high quality products and custom water treatment programs. Our superior customer service, safety first attitude and mindful attention to our environmental impact, helps us cultivate new partnerships, while treating our existing customers with appreciation and respect.

Whirlwind Clean & Green

4314 NE 148th Ave. • Portland, OR 97230 • (800) 800-2935

Whirlwind Clean & Green is a privately owned and operated company, with our headquarters located just north of Seattle, WA. Whirlwind's diverse field of operations demonstrates our dedication to quality and excellence. Rather than lowering your site expectations to meet a price point, we raise expectations while working within your budget to achieve compliance, excellence and value. Whirlwind is a service centered operation where we offer our clients 24/7 dispatch for maintenance and emergency services. Our employees are trained to respond to emergencies or safety critical issues day or night. With over 100 vehicles in the fleet, 24/7 emergency dispatch service, and outstanding customer service, Whirlwind is the leader in the industry to take care of all your site's needs. Whirlwind Clean & Green's Mission is to provide industry leading service and environmental compliance that exceeds our clients' highest expectations.

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Oregon-Columbia River Chapter NO. 29 of the Institute of Real Estate Management (IREM®)

2016

Volunteers

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Oregon-Columbia River Chapter NO. 29 of the Institute of Real Estate Management (IREM®) 2016 Chapter President—Traci McCauley, CPM®

Colliers International—Traci McCauley has more than 16 years’ experience in real estate management. Traci has managed more than 3.6 million square feet of office, retail and industrial properties and has developed experience managing buildings slated for future development. Clients have included small local and regional ownerships as well as large institutions, and Traci prides herself on developing strong relationships with all clients regardless of size, type or location. Traci oversees the fiscal and physical health of each property in her portfolio and develops relationships with each tenant. One way that Traci maintains tenant/client communication is by providing thorough budget and financial reporting to each client. Traci has managed many property transitions, and excels at establishing operational procedures for all different product types. Traci is a Certified Property Manager (CPM®) and a Certified Green Broker. She also received her Oregon principal broker license in 2014, and is a licensed real estate broker in Washington.

President—Elect—Valorie Cochran, CPM®

Unico Properties, LLC.— With a 20+ year career in commercial, residential property and asset management, her strengths include property operations, tenant relations, capital projects, lease administration, and sustainability initiatives. Her background includes managing commercial office high rise, office parks, retail shopping centers, and multifamily properties including LIHTC housing developments. Valorie earned a bachelor’s degree in real estate studies from Marylhurst University. She is a Certified Property Manager (CPM®) through the Institute of Real Estate Management, and held leadership positions in the IREM® Las Vegas, and Oregon-Columbia River chapters, including serving as the 2012 Las Vegas Chapter President. Valorie is currently on the board of the IREM® Oregon-Columbia River Chapter as 2017 President-Elect.

Vice President—Member Services—Tara Platt, CPM®

Tara Platt has been a commercial property management professional since 1998. The portfolios she has managed include regional shopping centers, neighborhood shopping centers, office buildings, and industrial/flex buildings for private and institutional clients. Tara has a proven history of success in overseeing a variety of multi-million dollar investment properties. She has directed property enhancement projects, managed major re-development projects, developed leasing and tenant retention strategies, and established processes to enhance and improve property operations. Tara also has an extensive background in accounting including budgeting, reconciliations, lease administration and auditing. Tara has an aptitude for developing strong tenant and client relationships, implementing sustainable cost savings initiatives, and influencing rent growth, all of which increase the value of the properties she manages. In 2016, Tara joined Specht Properties, Inc. and administers all property management functions for both third-party clients and in-house properties. She leads a team involved with the property management, leasing and construction management of third-party client properties as well as those developed by Specht Development. Tara is responsible for the management and leasing of over 1.8 million square feet of commercial property located in the Portland, Oregon metropolitan area. Tara has a real estate broker’s license for Oregon & Washington and received her IREM® Certified Property Manager (CPM®) designation in 2015. She has a Bachelor’s degree in Business Administration and a Master of Arts, MFT degree.

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Oregon-Columbia River Chapter NO. 29 of the Institute of Real Estate Management (IREM®) Vice President Communications—Julie L. Muir, CPM®

Newmark Grubb Knight Frank—Julie Muir is the Associate Director of Property Management for the Portland, Oregon market. She’s in charge of business development and leadership of the property management division. Julie has 33 years of real estate experience, managing mixed use, conventional and low-income/tax credit residential communities including, retail shopping centers, medical office, and industrial assets in 7 states. Julie earned her Certified Property Manager (“CPM®”) designation from IREM® in 1999. She was Chapter President in 2003 and has served as Chairperson of many other committees since that time. Nationally, she served as IREM®’s Regional Vice President, a member of the National Executive Committee, a Senior Vice President of the Institute for 4 years and currently serves as a member of the Board of Directors of the IREM Foundation® (IREM®’s charitable body). Additionally, she’s an IREM® Instructor, teaching Ethics, Human Resources and Marketing. She’s been awarded several honors, such as “CPM®” of the Year and IREM® Past President of the Year on numerous occasions and the “President’s Award”. Julie has authored many real estate and motivational articles published in the Journal of Property Management (“JPM®”) and in 2011 was inducted into IREM®’s “Academy of Authors”. In 2011, Ms. Muir served as part of the re-write team and was a contributing author for the 16th edition of The Principles of Real Estate Management in 2011. Julie was a finalist in the 2015 and 2016 REME Awards, highlighting individuals who contribute greatly to the real estate community. Ms. Muir was a featured presenter at the 2011 IREM® Forecast Breakfast and is a trainer and motivational speaker in both local and national arenas.

Vice President Finance—Cynthia Sparks, CPM®

Enterprise Community Asset Management—As director for Enterprise Community Asset Management, Inc., Cynthia Sparks serves as a liaison and resource to the company’s regional asset management teams for quarterly investor reporting. She manages several key investor relationships regarding asset management of their portfolios with Enterprise. She also lends her expertise and leadership by serving as the primary representative for the company’s asset management oversight of the Enterprise Multifamily Opportunity Fund and its investments. Cynthia joined Enterprise as a senior asset manager in 2009 in the Portland, Oregon, office where she worked with some of the largest, most active partners in the Pacific Northwest and directly managed a large and diverse portfolio of properties. Cynthia has over 20 years of experience in real estate management. Cynthia is a Certified Credit Compliance Professional (C3P), a Housing Credit Compliance Professional (HCCP) and a Certified Property Manager (CPM®) through the Institute of Real Estate Management. She graduated with honors from Portland State University with a dual bachelor’s degree in finance and human resource management.

Vice President—Education—Jaima Coleman, CPM®

Jaima Coleman is the 2017 Vice President of Education for the Oregon-Columbia River Chapter No. 29 of IREM®. Jaima is also a Property Manager with Shorenstein Realty Services, L.P., managing the Johns Landing portfolio. Jaima began her career in the real estate industry after moving back to Portland from New York in 2001. She joined Spieker Properties which soon became Equity Office Properties, in June 2001. In 2003 she joined the construction department of Equity Office and gained knowledge in the management of tenant improvements and capital projects. In 2007, Jaima joined Shorenstein Realty Services property management team, managing buildings at Lincoln Center and Nimbus Corporate Center, before transferring to the Johns Landing location. Jaima earned her Bachelor of Science in Business Management from the University of Phoenix in 2004. She received her CPM® designation from IREM® in 2013. After living in New York City for 9 years, Jaima decided to move back to the Portland area to be near family. Jaima has a 16-year-old son, Jordan, who keeps her busy. During her free time, Jaima enjoys being outdoors, camping, riding quads and dirt bikes, going to the beach and quiet time just reading. 29th Annual IREM® Forecast Breakfast

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Oregon-Columbia River Chapter NO. 29 of the Institute of Real Estate Management (IREM®) 1st Member at Large—David Genrich, CPM®

Jones Lang LaSalle—David has thirty years experience in commercial real estate including an extensive background in office/industrial management and leasing. Professional training and years of involvement in IREM® (CPM® Designation), SIOR and CCIM. In addition, completion of LEED GREEN Associate designation. David specializes in Office, Industrial management and leasing, construction management and auditing.

2nd Member at Large—Chris Pasteur, CPMC® ARM®

Sequoia Equities—Chris is a Community Manager at Sequoia Equities, Inc. and has served on the IREM® Oregon-Columbia River Chapter No. 29 board since 2013. Chris is a Certified Property Manager Candidate (CPMC®), and in 2016 was an ACE award winner through Multi-Family NW as Property Manager of the Year, and earned the CPM® candidate of the Year award from IREM® in 2016.

3rd Member at Large—Clifford Hockley CPM®

Cliff Hockley is a Certified Property Manager® (CPM®) and a Certified Commercial Investment Member (CCIM). Cliff joined the company in 1986 and has extensive experience representing owners of commercial, investment and residential properties. He has managed warehouse, office, and retail properties, as well as mobile home parks, condominium associations, and residential properties of all sizes. Cliff’s client base includes financial institutions, government agencies, private investors and nonprofit organizations. In addition to property management, he has served as an advisor, developed budgets, made value improvements to buildings, and trained on- and off-site staff. Cliff’s strong knowledge of maintenance enables him to counsel on the best approach for major value-add projects. Among his many civic activities, Cliff serves on the executive committee for the Portland Chapter of the Institute of Real Estate Management (IREM ®), where, in 2000 and 2003 he was recognized as Certified Property Manager of the Year. In 2014 he was recognized by IREM® as board member of the year, and in 2015 he earned an achievement award in brokerage from SVN International. Cliff holds an MBA from Willamette University and a BS in Political Science from Claremont McKenna College. He is a frequent contributor to industry newsletters and serves as adjunct professor at Portland State University, where he teaches real estate finance. Cliff is the author of 21 Fables, a book about real estate investing that helps investors navigate the rough shoals of real estate ownership.

ARM ®Chair—Tammy Mills, CPMC®, ARM®

Fortress Property Management—Tammy has over 12 years of experience in property management and joined Fortress Property Management in 2010 during its inception. Tammy is tax credit certified and has worked with the Section 42 program for nine years. She’s a licensed property manager in the state of Oregon and earned her ARM ® (Accredited Residential Manager) designation from (IREM® ), the Institute of Real Estate Management. In addition, Tammy is a Certified Property Manager Candidate (CPMC® ). Tammy manages all on- and off-site personnel and accounts, takes care of owners requests and oversees the monthly property reports. Additionally, she organizes company events and oversees the leasing and maintenance programs at Fortress. Tammy is also LIHTC certified, ensuring that Fortress’ properties comply with Section 42 tax credits. Tammy loves interacting with residents and the people she works with. Finally, she enjoys experiencing the continually changing and evolving field of residential management, which presents something new everyday!

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Oregon-Columbia River Chapter NO. 29 of the Institute of Real Estate Management (IREM®)

2016 COMMITTEE CHAIRS AMO® Liaison Chair ARM® Chair Community Service Chair Forecast Breakfast Chair Friends of IREM Co-Chair Friends of IREM Co-Chair Income/Expense Chair Inaugural Event Chair Newsletter Chair Programs Co-Chair Programs Co-Chair

          

Clifford Hockley, CPM Tammy Mills, CPMC ARM Caroline Karl, CPMC Laura Barry, CPM ARM Mark St. Pierre Jim McDonald Chris Pasteur, CPMC, ARM Valorie Cochran, CPM Tammy Mills, CPMC ARM Cristin Bansen, Associate Carmella Byers, CPMC

IREM® 15/16 RVP IREM® 17/18 RVP

 

Cammie Allie, CPM ARM Barry Blanton, CPM

IREM® Association Executive 

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Julie L. Muir, CPM


The Accredited Management Organization (AMO®) The ACCREDITED MANAGEMENT ORGANIZATION® accreditation is the only recognition of excellence given to real estate management firms, and the requirements are now more relevant than ever to real estate managers, their clients, and the assets they manage. To earn the AMO® accreditation, real estate management firms must now meet even more standards and abide by a new AMO® Code of Professional Ethics - all based on Best Practices: Real Estate Management Service. These best practices provide a reasonable framework for the professional delivery of real estate management services meaning AMO® Firms can demonstrate to investors and clients that they don’t just meet the industry standards... they set them. Join the 550 AMO® firms, with more than 1,100 offices worldwide, that hold this distinguished accreditation. Being an AMO® now means more than ever. Checklist for Becoming a AMO® Firm

Business Stability and Fiscal Responsibility:

Demonstrate business and financial stability by having been in business for at least three years, all of which is verified by an independent credit check.

Executive CPM®:

Have a CPM® in an executive position who directs and supervises the firm’s real estate management activities..

Education - (must be completed by the Executive CPM ®) Select one of two options: Option 1.  "Growth Strategies for Real Estate Management Companies “ (BDM601)  "Today’s Leadership Challenges" (HRS603)  "Ethics for the Real Estate Manager" (ETH800) or Real Estate Management Ethics Online (ETH001)

Option 2.  Successfully completed 701 (offered through 1997)  "Ethics for the Real Estate Manager" (ETH800) or Real Estate Management Ethics Online (ETH001), if not previously completed.

Ethics:  Pledge to uphold the Accredited Management Organization Code of Professional Ethics.

Insurance coverage:  Hold a required amount of depositor’s forgery and alterations coverage and a fidelity bond.

Other Requirements:

     

Submit an AMO® application with the application fee Submit three Confidential Letters of Recommendation (included in AMO® application). Meet specific standards for operations of the firm. Meet specific standards for servicing the client. Perform 18 of 28 functions relative to operations of the firm, servicing the client, and managing properties. Be interviewed and recommended for approval by the local IREM® Chapter.

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The Accredited Management Organization (AMO®) Featured Sponsors

PREMIUM AMO® SPONSOR

:

FEATURED AMO® SPONSORS: Bluestone & Hockley Real Estate Services, AMO® CBRE, Inc., AMO® Colliers International, AMO® Criteria Properties, AMO® Cushman & Wakefield of Oregon, Inc., AMO® Guardian Real Estate Services, AMO® Income Property Management Co., AMO® Kidder Mathews, AMO® Norris & Stevens, Inc., AMO® Quantum Residential, Inc., AMO® The Management Group, Inc., AMO®

Wyse Real Estate Advisors, AMO® 29th Annual IREM® Forecast Breakfast

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The Accredited Management Organization (AMO®) Oregon-Columbia River Chapter No. 29

Bennett Management Co., LLC, AMO®

Income Property Management Co., AMO®

Bluestone & Hockley Real Estate Services, AMO®

Invest West Management LLC, AMO®

Bowen Property Management Co., AMO®

Kidder Mathews, AMO®

CBRE, Inc., AMO®

Marathon Management, Inc., AMO®

Colliers International, AMO®

Norris & Stevens, Inc., AMO®

Compass Commercial, AMO®

Pinnacle Group, AMO®

CPM Real Estate Services, AMO®

Prometheus Northwest Region Oregon, AMO®

Criteria Properties, AMO®

Quantum Residential, Inc., AMO®

Cushman & Wakefield of Oregon, AMO®

Simpson Property Group L.P., AMO®

Deering Management Group, Inc., AMO®

The Management Group Inc., AMO®

NAI Elliott, AMO®

US Bank Corporate Real Estate Portland, AMO®

ESP Property Factors, Inc., AMO®

Wyse Real Estate Advisors, AMO®

GRES, AMO®

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Associate Membership Oregon-Columbia River Chapter No. 29 IREM® membership gives you instant access to the robust slate of IREM ® member benefits and community of experts. In 2015, every IREM® Member pays the lowest registration rates on IREM® courses. IREM® membership is perfect for:     

Those who are engaged in site, property, asset, or facilities management of all property types; Those who work for real estate companies, corporate real estate departments, or government agencies; Professionals considering pursuing an IREM® credential in the future; Professionals who want the wealth of resources, discounts and career advancement opportunities that come with joining IREM®; Those considering pursuing a career in real estate.

Becoming an IREM® Member will have an immediate and long-term impact on your career. You’ll have access to member benefits, including discounts on education, publications and much more, as well as access to free members-only resources, knowledge and networking opportunities. Most importantly, you’ll join a community of: Professionals who excel and want to excel; The best in the world at the financial and asset management aspects of property management;  Forward thinkers who want to leave their mark on the world through ethical property management, making the lives of residents and tenants better every day;  Experts at every challenge you face in your job and your business -- experts who can help you through our online communities and local in-person events;  People who care about the profession of real estate management.  

Associate membership is available to U.S. applicants only. Vendors, suppliers and service providers to the real estate management industry are not eligible for Associate membership.

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2016 Academic Members Oregon-Columbia River Chapter No. 29 Sunny Liston

Marylhurst University

2016 Associate Members Oregon-Columbia River Chapter No. 29 Melodie

Atkinson

Heidi

Knapp

Cristin

Bansen

Rachel

Larson

William

Bowman

Sze Shu

Lee

Wilma

Bryant

Emily

Mandic

Jennifer

Caruso

Grace

McNeilly

Alycia

Costa

Jennifer

Miesner

Anthony (tony) D'Alto

Tanja

Miljevic

Brandy

Davidson

Meagan

Morrow

Mariann

Deering

Shannon

Motter

Darlene

Detienne

James

Paul

Elizabeth

DiStefano

Robert

Pile

Michelle

Estep

Daniel

Potter

Lindy

Goodling

Marino

Rossi

Lawnae

Hunter

Colby

Saxe

Jeffrey

Irish

Matt

Schweitzer

Tom

Jessup

Stephanie

Shaffer

Kevin

Jones

Ethan

Smith

David

Kiersey

Jed

Spera

Trent

Toler

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Accredited Residential Manager (ARM®) Oregon-Columbia River Chapter No. 29 Regarded as the most recognized credential for residential real estate managers, the ARM ® certification is your ticket to new opportunities. Those who hold the ARM ® certification continue to believe that the investment they made in earning the certification pays off.    

Employers value those who choose to develop their skills. You can keep in touch with new solutions and technologies in the industry. The experience and knowledge you demonstrate to earn the ARM ® certification assures employers that you possess the specialized skills they seek in residential managers. Earning the ARM® certification will help you advance in your real estate management career regardless of your current level.

Vendors, suppliers and service providers to the real estate management industry are not eligible for ARM ® membership.

Apply to become an ARM® after you have completed the requirements listed below: Checklist for Becoming an ARM

Education – choose one of five options: Option 1 Option 2 Complete: Complete four courses:

Option 3

RES201 Course schedules

MNT402 HRS402 If you plan to take RES201 in FIN402 the classroom, consider the MKL405

Hold a CPM, CAM, CRM, or RAM designation

ARM Track to meet the ARM If you took IREM courses education, ethics, and exam- prior to 2005, find out which of these courses earn credit ination requirements. by reviewing the ARM Course Equivalency Chart

Option 4

Have an undergraduate or graduate degree with a major, minor, or concentration in real estate or property management, or an associate's degree in a noncommercial property or real estate management program.

Option 5

Complete: CID201 Course schedules

Examination

Pass the ARM certification exam

Ethics

    

Complete IREM ethics education in 1 of 4 ways: Complete ETH800 Complete ETH001 Complete RES201 prior to May 1, 2015 Complete CID201 prior to May 1, 2015 Pledge to uphold the IREM Code of Professional Ethics

Experience

Have 1 year (12 months) of qualifying residential real estate management experience as defined by IREM (meeting portfolio and functions minimums)

Other Requirements

  

Submit an ARM application with the non-refundable application fee. Submit three Confidential Letters of Recommendation (included in ARM application). Be interviewed and recommended for approval by your IREM Chapter.

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2016 Accredited Residential Managers Oregon-Columbia River Chapter No. 29

Cammie Ruth Oluwakemi Christopher Francesca Laura Laura Alison Bobby Jo Benjamin Rhonda Amanda Carrie Herlinda Grant Sharon Shelly Erik Duane Laura John Damon Claire Gail Melody

29th Annual IREM® Forecast Breakfast

Allie Anderson Arigbon Barber Barrett Barry Blades Brizendine Carrillo Crane Crawford Edwards Glovka Gonzales Hamblin High Hillman Jarvey Jordan Juteau Keba Kenyon Kolkoski Lafoy LaRue

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Carrie Kalib Catherine Tammy Christopher Jann Rachel Destiny Janet Betsy Ingrid Amy Jeromy Margo Cheryl Martin Jhauna Laura Tara LaTonya Christopher Heather Violeta Sandra Jasmyne

Lewis Locke Miles Mills Pasteur Pate Payton Penticoff Petersen Pott Powell Price Puckett Rams Randall Rebhahn Rud Schaefer Sinclair Smith Sonsteng Tsugawa Vitkova Webb Zebdeh


Certified Property Managers (CPM®) Oregon-Columbia River Chapter No. 29 The challenges in today’s job market—from industry consolidation and increased competition to being expected to do more with less—make it harder for you to prove your experience and your credibility. The CPM® designation can demonstrate your expertise and integrity to those who matter most—employers, owners and investors. CPM® Members are recognized as experts in real estate management, and they are at the top of the profession.  70% of those who hold the CPM® designation hold the highest management positions (owner/partner or officer/director) than those without the designation. 

Total median compensation packages for CPM® Members can exceed the packages of CPM® Candidates of the same age, the same amount of experience and education, and with similar portfolio sizes by at least 13% and, in some brackets, by as much as 45%. Step 1. Become a CPM® Candidate The first step in becoming a CPM® is to become a CPM® Candidate. As a Candidate, you’ll be a member of IREM, including a local IREM® Chapter, and you’ll stay informed about your progress toward fulfilling the requirements for the CPM® designation. Here’s all you need to do to become a CPM® Candidate: Complete the CPM® Candidate application online or print a PDF of the application and send it to IREM® Headquarters with the non-refundable application fee  Either hold a real estate license or validate that you are not required to have one. 

Pledge to uphold the IREM® Code of Professional Ethics Vendors, suppliers and service providers to the real estate management industry are not eligible for CPM® candidacy. Apply Today!

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Certified Property Managers (CPM®) Oregon-Columbia River Chapter No. 29 Continued...

Checklist for Becoming a CPM Experience

3 years (36 months) of qualifying real estate management experience as defined by IREM (portfolio and functions minimums)

Education – choose one of four options: Option 1: Complete seven required courses Recommended order: MKL404 or MKL405 or MKL406 HRS402 MNT402 FIN402 ASM603 ASM604 ASM605 Course schedules

Option 2: Other Designations Fast Track Hold a CCIM, CSM, PCAM, or RPA designation and submit the fast track approval fee Details about the CPM Fast Track Program.

Option 3: Real Estate Degree Fast Track

Have an undergraduate or graduate degree with a major, minor or concentration in real estate or property management and submit the fast track approval fee

Option 4: Professional Experience Fast Track

Have 20 years of qualifying professional experience (as verified via experience reports and approved by chapter) and submit the fast track approval fee Details about the CPM Fast Track Program.

Details about the CPM Fast Track Program.

If you took IREM courses prior to 2005, find out which of these courses earn credit by reviewing the CPM Course Equivalency Chart

Management Plan - Select one of two options. Option 1

Pass management plan on an actual property (MPIND)

Option 2

Pass management plan skills assessment (MPSA).

Examination

Pass the CPM Certification exam

Ethics

Attend ETH800 and pass exam Pledge to uphold the IREM Code of Professional Ethics

References

Submit 3 Confidential Letters of Recommendation (provided at the time of candidacy approval)

Candidacy

Fulfill the one year Candidacy period by being a CPM Candidate Member, ARM Member, or ACoM Member in good standing for the 12 months prior to CPM approval

Other Requirements

     

Submit a CPM application with the application fee Be current with annual national and chapter dues. Hold a real estate license or verify that you are not required to have one for your current position. Be affiliated with the NATIONAL ASSOCIATION OF REALTORS®. Attend two IREM Chapter meetings or events during the 12 months immediately prior to CPM approval. Be interviewed and approved by your IREM Chapter.

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2016 Certified Property Manager Candidates Oregon-Columbia River Chapter No. 29

Constance Sarah Victoria Christian Bobby Jo Kristi Amanda Nicholas Rebecca Audrey Amanda Stephen Megan Joseph Stacey Gary Scott Carmella Michael Nicole Andrew

29th Annual IREM® Forecast Breakfast

Auringer Bennett Boyle Bryant Jr Carrillo Torres Carver Clark Cook Cook Dell Edwards Ford Fraction Gillock Glenewinkel Hamman Hess Jaskiewicz-Byers Johnson Koen Kroger

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Lea Melody Sydney Alice Kalib Tammy Jody Elizabeth Jayme Kagney Christopher John-Curtis Lisa Melissa Stacey Cindy Rhonda Chris Monique Sarah Michael Jennifer

Landwehr LaRue Levin Lindley Locke Mills Nolander Owens Palodichuk Parsley Pasteur Paz Perry Rinehimer Rogers Schaffer Schlosser Shepard Still Sumrall Templeton Tyler


2016 Certified Property Manager (CPM®’s) Oregon-Columbia River Chapter No. 29 Carolina Karen Cammie John Craig Joseph Cini Herbert Michael John Christopher Stephen William Ty Laura Douglas Thomas Robert Dyann Ansel Wendie Lynn Thomas Kelley Jeffrey Jocelyn Gary Rachel Monique Valorie 29th Annual IREM® Forecast Breakfast

Abdalah Alexander Allie Amos Anderson Anderson Apostol Arathoon Arena Ballas Barber Barber Barendrick Barker Barry Bean Bechtell Bennett Bernatz Berri Billings Blankenship Brenneke Brewster Brown Burmester Calvert Chauvin Clouser Cochran Page — 32 —

Jaima Coleman John Cox Benjamin Crane Karen Czopek E. Thomas Davies Jeffrey Denson Dolf deVos Stanley Elliott Robert Fabian Beverly Foster Kimberly Fuhrer Kim Gach Rebecca Gardner Tracey Gedlich David Genrich Laura Gentry Scott Gibbs Jessica Gies Mendell Gosnell Janet Graaff Kelly Gray Michael Greeninger Richard Gress Tina Gustafson Phillip Hackworth Michael Havlik Douglas Henderson Shelly Hillman Clifford Hockley Noah Holz


2016 Certified Property Manager (CPM®’s) Oregon-Columbia River Chapter No. 29 Susan Jacob Robert Karen Charles James John Donna Dennis David Ralph (Kirby) Wade Cindy Lisette Nathan Kelly Carol (Carolyn) Michelle Traci Craig Debra Darren Malcolm Michele Catherine Roderick Julie Michael Randall Fred Gary Erik 29th Annual IREM® Forecast Breakfast

Iggulden Johnson Johnson Joss Karl Kautz Keba Kelley Kerr Keys Kirch Lange Laurila Levich Levin Levine Maffei Martin McCauley McConachie McCracken McDonald McIver Micciche Miles Mosman Muir Myers Norgart Normandin O'Connell Olson Page — 33 —

Janice Ostlund Dennis Parfitt Kathi Pearce Terry Phillips Tara Platt Krista Polvi Troy Rappold Jeffrey Reingold Chad Rheingold Vicki Rising Robinn Rudd Joseph Sandahl James Schaff Michele Schiffer Brett Shockey Shelly Skirvin Claudia Slyter LaTonya Smith Cynthia Sparks Marsha Steffen Jami Sterling-Counard Dan Tapella Maynard Tye Dwight Unti Carmen Villarma Lisa Walker Diedre Wells Benjamin Wickham Jonathan Wickizer John Winquist David Wright


2016 Certified Property Manager (CPM®’s) Emeritus Oregon-Columbia River Chapter No. 29 Alixandra

Brevig

Scott

Henselman

Lauri

Hines

O. Gene

Powell

Jan

Sams-Probstfield

Laurence

Senn

2016 Certified Property Manager (CPM®’s) Emeritus—Retired Oregon-Columbia River Chapter No. 29 Joseph

Labadie

Stephen John

Mikulic Van Buskirk

Jack

Young

2016 Student Members Oregon-Columbia River Chapter No. 29 Darrin Bo Kerestin

29th Annual IREM® Forecast Breakfast

Brightman Petrie Walker

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TH

29 ANNUAL ®

IREM FORECAST BREAKFAST 2016 SPEAKER PANEL Master of Ceremonies

Brad Miller

Brix Law, LLC Finance Industrial Multifamily Office Retail Development

29th Annual IREM® Forecast Breakfast

Thomas Marcus Patrick Stalick Karlin Conklin David Hill Jack Gallagher Gerard Mildner Page — 35 —

Wells Fargo Bank Kidder Mathews IMG Northwest Newmark Grubb Knight Frank Colliers International Portland State University


29th Annual IREM® Forecast Breakfast MASTER OF CEREMONIES

Brad Miller Brix Law LLP 5 SW Colorado Ave., Suite 3 Bend, Oregon 97702 (541) 693-0075

Bradley S. Miller Brad Miller is one of Oregon’s leading real estate attorneys with over 28 years of experience. His primary areas of practice include real estate leasing, acquisitions, development, financing, and general business law. Brad has extensive experience representing clients in industrial, office, retail and multi-family purchases and sales transactions, development projects, leasing and financing transactions. Clients include national developers and many of the Northwest’s leading developers and property owners. He also represents the Northwest’s fastest growing grocer. Recognized by Chambers USA since 2008 as an industry leader in real estate, Brad has been described as being a lawyer who is “incredibly productive and turns thing around quickly.” Brad has also been perennially listed in the Best Lawyers in America, 2011-2015, in real estate law. He has been named by his peers as an Oregon Super Lawyer since 2007, and has earned the AV® Preeminent™ Rating from Martindale-Hubbell®, American Registry. Brad is a board member of Commercial Association of Brokers® and of the National Association of Industrial and Office Properties, and received the Distinguished Service Award in 2015. He has published numerous articles and frequently lectures at continuing education programs on leasing, purchase agreements, loan documentation, and other real estate topics. He is a long-time bike commuter who loves the outdoors – biking, hiking, running and exploring Oregon and the mountains in the Scottish Highlands. He is also an avid fan of the Portland Timbers and soccer games everywhere.

29th Annual IREM® Forecast Breakfast

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FINANCE

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29th Annual IREM® Forecast Breakfast FINANCE Thomas Marcus Business Development Officer 1300 SW 5th Ave. Ste. 1100 Portland, OR 97201 503—886–3877 thomas.marcus@wellsfargo.com

As a Development Officer in the Business Banking Group, Thomas Marcus brings a unique enthusiasm when he partners with businesses and individuals in the community. A Portland native, Thomas offers a full range of real estate and business expertise from his experience which includes commercial appraisal, commercial sales and business lending. His core competencies and focus include Small Business banking and lending, Commercial Real Estate, Healthcare, and Optimization Analysis. Prior to becoming a Business Development Officer, Thomas was a Commercial Loan Officer specializing in investment real estate in the northwest. Before Thomas entered Banking, he was a Commercial Real Estate Broker for five years focused on multi-family and mixeduse buildings as well as a Commercial Real Appraisal Assistant with a specialty of industrial and flex buildings. Given his unique skill set, Thomas can structure complex credit with perspectives from lending, appraising and brokerage to meet and exceed the expectations of his clients. Thomas holds a bachelors degree from Oregon State University and is a CCIM (Certified Commercial Investment Member) candidate. Thomas is an active member in the Rotary Club of Portland and was selected as a member of the U40. Additionally, Thomas is a sponsor partner of Entrepreneur Organization of Portland and has been involved with several commercial real estate groups including NAIOP, CREW, CCIM, IREM® and Multifamily NW.

29th Annual IREM® Forecast Breakfast

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NATIONAL PERSPECTIVE: Every party comes to an end; however, I have

the feeling this one will be much less dramatic then past cycles. Nationally we’ve been on a stable growth pattern for the past 7 to 8 years. The biggest issue on the lending side is what is happening or what is going to happen in the markets; most notably the interest rate market. To touch on this, after the most recent election, the original expectation was we’d see a downturn, which was originally reflected with DOW futures dropping 750 points after Trump became the president elect. However, the stock market has rebounded now and is now at record highs. To give everyone a bit of insight on

10 Year Treasury Rate

how lending institutions price their cost of

8 7

funds – this rate is pegged to the Fed 10-year

6

Treasury bond rate. Looking at historical in-

5

formation pulled from 2000, we’ve seen the

4 3

10 year Treasury bond go from roughly 6.5%,

50 bps

2

200 bps

1

down to its low of near 1.4%. If you look at the slide, you can see the big swings coincide

125 bps ?? bps

0

with the stock market swings – Tech Bubble Crash; Bear Sterns Crash; The Stock Market Crash of 2008. Additionally, there have been

volatile changes with election cycles as well, along with the announcement of the Fed’s Quantitative Easing in 2013.

Recent 10 Year Treasury Rate

Most recently we’ve seen two events which

2.6

have affected the Treasury bond rate – Brexit in June

2.4

of this year and the recent election in early November. increase (11%) in the 10 year Treasury bond rate in just one day! Although this increase has tapered quite a bit, the trend has continued. We’re in for some volatil-

2 %

Just after the announcement, we saw a 20 basis point

2.2

1.8 1.6 1.4 1.2 1 8/1/2016

9/1/2016

10/1/2016

11/1/2016

ity for the short term – possibly long term. The next question is why does an increase in interest rates matter? If rates continue to rise nationally, the spread between capitalization rates and interest rates will compress. Over time, investors will want to see an increase in capitalization rates reflecting lower values (since these two work inversely). 29th Annual IREM® Forecast Breakfast

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On the flip side, it’s a very competitive environment in lending right now. As many investors can attest - lenders are much more aggressive chasing opportunities, which allow investors to shop around and structure some very favorable terms. However, there are some caveats to being approved. Many institutions hurt by the prior recession are more conservative and/or diligent with underwriting requirements. With their internal underwriting process, lenders are looking at multitude of factors including loan-to-value (LTV), loan-to-cost, debt coverage ratios as well as debt yield spreads. Additionally, conventional lenders are more likely to look at full or partial recourse loans with multiple guarantors and global cash flow analysis to make certain borrowers can cover all debt burdens. It’s been a great several years for all product types, but a slowdown will happen – It’s not a question of if, but when. However, it will be less severe for Portland as opposed to nationally because we’re a bit insulated. Portland is no longer a blip on the radar, but a city where people are moving and want to live/work, eat, drink. As anyone knows, traffic is awful. The preliminary figures came out from

Growing Demand • Tri-County: 33,860 new residents or 95 people per day 1.94% growth* • Portland Metro: 40,621 new residents from 2014 to 2015 1.72% growth 111 people per day!! • Deschutes County:

5,895 new residents in one year 3.5% growth

• Salem: • Eugene:

1.6% growth 1.2% growth

*Preliminary population estimate for 2015 to 2016 per PSU’s Population Research Center

PSU’s Population Research Center, and the Portland Tri County area saw just under 34,000 new residents from 2015 to 2016, roughly 95 a day (1.94% growth). This is not including the figures from Clark County or SW Washington. If Clark County has the same growth rate, were looking at an estimated 120 people per day in the Portland Metro area. Based on last year’s figures, the Portland Metro region added 40,621 new residents from 2014 to 2015, a growth rate of 1.72 percent, according to updated estimate released by the US Census Bureau, or 111 people per day. Deschutes County saw an increase of 3.5%. Over 80% of counties in Oregon saw a net increase in population growth. These people affect demand for home prices as well as rental rates. This is good for value, job growth but bad for commuting. :-) LOCAL PERSPECTIVE: Along with all the increasing parameters everyone has shown, I believe outside investors will push the market values. 29th Annual IREM® Forecast Breakfast

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Just from my experience in the market, local investors generally look for maximum leverage (about 75%) to purchase investment real estate. They hold the asset for a couple of years and either sell (and 1031 exchange) into a larger project or refinance to pull money out to buy and expand their portfolio. Wash, rinse repeat and this trend continues. However, along with the influx in residents, we’ve seen an influx in investment capital from out of state, specifically California. To touch on this briefly, I’m going to use an example given recently at the Multifamily NW Forecast Breakfast in October. Jordan Carter with Kidder Matthews was

Demand Trends

explaining the recent surge in multi-family

Multifamily purchases over $1M Past 2 years Oregon/SW Washington California

12% 33%

prices in the Portland area, and where the buy-

55%

Other

er’s capital was coming from. They pulled statistics of the last two years of recent multifamily sales over a $1 million in the Portland Market and roughly 33% came from Californian Buyers. Jordan even mentioned that 45% of sales came from Californian’s looking for better

Source: Costar

returns on their investments and needed to

place funds with 1031 exchanges. Since a majority of these buyers were coming out of exchanges and looking for better returns (6% cap opposed to 4% in California) they weren’t maximizing the leverage. It was more important to place the proceeds and replace the debt to meet the demands of their 1031 exchange rather than leverage up. They’ll even pay more because of the potential tax burden if they don’t complete their 1031 down leg. Over the past several years, we’ve seen more investment loans done at 50% to 60% loan-to-value. DEVELOPMENT TRENDS:

To briefly touch on development cost, we’re seeing an increase all

around, but most significantly with soft costs. While hard costs have increased anywhere from 6% to 12% on average per year, we’ve seen an increase of soft costs (permitting, SDC’s, etc.) close to 50%. To touch on this with a personal experience, we were working with a developer on a sizeable multi-family development south of Portland. The loan was for over $20 million, so the approval process was a bit timelier than a normal purchase or refinance.

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The initial budget projected soft costs to near $1,600,000. Now

after construction loan and the permits were approved, the developer went to pay and pull permits, the city increased the cost to $2,500,000. Now some of this was covered by the contingency in the budget; however, the developer had to come out of pocket to cover additional expense which was not projected. Additionally, with my experience and general conversations with market participants, lenders are growing wearier financing development, especially multi-family. There are over 25,000 multifamily units proposed in Portland Metro. It seems it’s slowly coming to a consensus that we may be in a bubble with multi-family and conditions are softening. Spec development is growing more difficult although it is happening given the demand in the market with increasing rents. The city core is seeing the majority of development with urban office and multi-family development. As far as industrial development goes – it is occurring with convention financing; however, there is big pressure on pre-leased or build-to-suit buildings. Owner user development is much easier to finance with smaller projects (under $10 million) financed thru SBA loan programs. MARIJUANA:

Change is coming and it’s growing like a weed. California, Nevada and Massa-

chusetts all voted to make recreational marijuana legal at the state level. It bodes the question, when will all the states adopt this change? And with the change, what will happen at the federal level? Anyhow, although recreational (as well as medical) use of marijuana is legal in Oregon, it is still a controlled substance per federal regulation and seen as a Schedule 1 drug. What this means is that most conventional lending institutions that are federally chartered will not fund these types of business organization or organizations affiliated with them. To expand with the affiliation, if a landlord leases a space to a marijuana tenant, this could potentially lead to default of the note and the lending institution may call the note and go forward with foreclosure proceedings. Additionally, many institutions cannot collect deposits affiliated with these types of businesses.

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2017 FORECAST: I think everyone can agree that it’s going to be an

interesting year. Most likely, we’re going to see a continuation in volatility for the next several months until the new administration and the US get comfortable with one another. The new administration is pushing for major tax cuts, increased defense spending, and reduced regulation – similar to the old Reaganomics. Until then, short term interest rates are most likely to increase putting pressure on capitalization rates to increase. On a national level, the markets to most likely be affected are those with little rental growth and vacancy issues, along with asset types mirroring the same factors. Again, locally, Portland is somewhat insulated. Portland will continue to see in migration and increase in demand. Given those factors, business and investment will continue to move here with

Finance Forecast • Short term increase in interest rates • High demand for commercial product both from our local market as well as outside investors • Prices and rents continue to increase with increase in demand • Lending climate stays competitive; however, if prices continue to increase, will there be support for maximum leverage?

values and rents will continue to rise. The lending environment will continue to be competitive

FINANCE

with borrowers being able to leverage their relationships and shop multiple options to get preferable terms. Additionally, investors from other markets coming into the area via 1031 exchange

funds

will

continue to pay top dollar

for

properties

with sellers knowing they are under time constraints. Easiest forecast to make though and we can all agree on, traffic is bad and will continue to get worse. :-) 29th Annual IREM® Forecast Breakfast

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INDUSTRIAL

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29th Annual IREM® Forecast Breakfast INDUSTRIAL Peter Stalick Senior Vice President, Partner Kidder Mathews One SW Columbia St, Suite 950 Portland, OR 97258 503— 221—2272

pstalick@kiddermathews.com

Peter is a Senior Vice President with Kidder Mathews and has over 15 years of commercial real estate experience in the Portland area specializing in industrial properties. Peter provides owner representation and marketing services for several institutional and local Industrial property owners on their industrial property portfolios.. Peter also provides tenant and buyer representation services for occupiers of industrial space in Portland. Peter along with his business partner Steven Klein has been involved in over 6.2 million square feet of closed sale and lease transactions over the past four years. Some of Peter’s owner clients include Global Logistics Properties, New York Life, Bentall-Kennedy, IDM, Specht Properties, Trammell Crow Company, Weston Investment Company and Watumull Properties Corp. Peter has also represented many owner or tenant occupiers in their search and acquisition of industrial properties including Rite Aid Corp, The Home Depot, City of Hillsboro, Precision Countertops, Allied Fitting, PODS, and West Coast Metals. Peter is a born and raised Oregonian and a graduate of the University of Oregon. PROFESSIONAL MEMBERSHIPS/SERVICE  Former Board Member for the Commercial Association of Brokers, Portland  National Association of Industrial and Office Properties (NAIOP) member  NAIOP Bus Tour planning committee member 2011  NAIOP Developing Leaders committee member 2008-2011.  CoStar Portland Industrial Advisory Board member 2009-2015 PROFESSIONAL RECOGNITION  Kidder Mathews top 25% producer 2008, 2009, 2010 and 2011.  Kidder Mathews top 10% producer in 2012 and 2015.  Oregon Commercial Association of Brokers Industrial Broker of the Year Runner Up 2009 and 2010, and finalist for award in 2012 and 2015.  CoStar “Power Broker” top ten industrial broker in Portland, 2004 through 2015  CoStar “Power Broker” top ten industrial broker in Portland, 2004 through 2011 29th Annual IREM® Forecast Breakfast

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NATIONAL PERSPECTIVE: Nationally,

the

Industrial

Market is continuing to recover as vacancy has de-

National Industrial Market Overview

clined down to just under 8%. This recovery has been driven by the improving economy, growing population, and rising

IN MILLIONS

consumer demand for products. Consumer Driven Growth:

The US

Consumer is becoming more and more impatient in terms of E-Commerce delivery times. This has caused some major expansion from E-Commerce and “Last Mile Delivery” distributors who can deliver prod-

ucts in 24 hours or less. This has driven these companies to add more warehouse locations so they can have inventory ready for rapid delivery to the consumer. Also, these online retailers are offering an increased number of different products which requires larger warehouse footprints to accommodate inventory near consumers. The chart above shows the National Industrial market deliveries, net

Historical US National Industrial Deliveries

absorption and vacancy rate. If you look at this chart, the vertical bars track the new buildings delivered to the market and the square footage of net absorption in the US. As you can see, the bars were much taller in the previous economic expansion cycle leading up to 2008. This next slide shows the historical

Average

new industrial construction for the US since 1982. This chart further illustrates the reduced industrial market expansion in the current market cycle when considered to the past growth spurts. This can be attributed to a few key factors including rising development costs, slow growth in the economy, more restrictive regulations and more cautious restraint shown on

behalf of developers and capital partners. 29th Annual IREM® Forecast Breakfast

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In the past, it wasn't abnormal for developers with capital partners to close on large parcels of land in advance of the site being shovel ready thus taking the development risk and building permit risk.

With the increased risk and uncertainty of approval

processes and extended timelines, developers are now essentially having to secure approvals and have building permits in hand before securing financing to Portland Industrial Market Overview

close on land sites. This has also been driven by skinnier project yield spreads over the market cap rates. There has been a movement nationally to build larger box industrial buildings (300,000 to 1,000,000 SF) to meet high demand from E-Commerce, Logistics, and Distribution companies and cost must less to construct (per square foot) than smaller format multi-

tenant buildings. Also, institutional capital have a high level of interest in these larger buildings because they prefer to own 500,000 SF with one tenant rather than a 500,000 SF business park with 50 tenant which requires more management. The capital market demand for this product has helped drive this new “big box” industrial construction. LOCAL PERSPECTIVE: The chart at left, shows the Deliv-

eries, Net Absorption and Vacancy Rate in the Portland Metro Area. The vacancy rate at 3.7% is a historic low vacancy for the Portland Metro area at least in the last 20 years and is well below the 2007 low of 5.5%. It is difficult for the vacancy rate to get much lower because new construction is constantly being added to the base and normal turnover of buildings create vacancy. The net absorption and deliveries in the past 3 years has been robust however is not near the levels seen in 2006-2008. This reduced new construction in Portland has caused lower net absorption levels since there is less new product to absorb. The shortage of new product has helped increase demand for existing older properties bringing the vacancy rate lower than in 2008. Portland is now “On the Map” nationally in terms of capital market interest as Portland is seen as a market which is attractive to the largest demographic in

American history (the Millennials). 29th Annual IREM® Forecast Breakfast

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Additionally, the barriers to entry into the industrial development market are high due to many factors including the Urban Growth Boundary, topography, wetlands, trees and other factors which serve to limit future supply. This restriction on supply coupled with significant upside in population growth makes Portland an attractive city in which to invest. It also doesn’t hurt that cap rates for Class A industrial properties are 50 bps to 100 bps higher than some larger West Coast markets like San Francisco, Seattle, and Los Angeles/Inland Empire. Rents are definitely going to continue to increase because we aren't delivering enough product to meet demand. This is especially true for properties offering smaller spaces. We have also been experiencing an urban “renaissance” period in the Close-In formerly industrial submarkets. The redevelopment of industrial properties into “creative” office, “maker” space, retail and multi-family removes these properties from the “industrial” category. This reduces the base which itself decreases vacancy, but the industrial companies displaced are moving to the suburbs and leasing space, thus increasing net absorption. With traffic increasing significantly in Portland, and with less industrial inventory near the City Center, the rental rates for those remaining industrial pockets located near the City Center will continue to spike at faster rates than that of the outer suburbs. Portland Industrial Development Overview

DEVELOPMENT TRENDS:

Similar to the national market,

Portland industrial deliveries are down significantly 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

when compared with the past. In the 6 years leading up to 2008, we delivered 14.5 Million SF. of new industrial product. During this past 6 year cycle we have delivered only 8 Million SF and have only 1.8 million

under construction. With all time high rental rates and a Deliveries

historic low vacancy, there really needs to be more product delivered.

Another interesting thing to note is of the 14.5M SF delivered in the previous cycle, a large amount of that product was still vacant at the time the market turned and thus created over-supply. The difference now is that the 8M SF recently delivered is already 89% leased and the 1.8M SF under construction is already 50% pre-leased/committed.

29th Annual IREM® Forecast Breakfast

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Portland is also experiencing the trend of building larger format buildings (300k to 500k SF). Of the 8M sq. ft. of new construction, only around 1M SF of this new product offered industrial spaces under 50,000 sq. ft. in size.

Of the 1.8M sq. ft. under con-

struction currently, only 26% of buildings are designed to divide under 50,000 sq. ft. and only 8% of these buildings are designed to divide under 35,000 sq. ft. The bread and butter tenant size in Portland is 5,000 to 20,000 SF, so this segment of the market has been basically neglected which will drive more rapid rental rate growth for existing properties offering smaller spaces. Where is the land? There is currently a severe shortage of readily developable industrial land which is free of encumbrances and served by infrastructure. Additionally, increased restrictions for wetlands, buffer zones, trees, endangered species, significant natural resource areas, storm water, archaeological overlays and other restrictions are making those remaining sites more and more expensive to develop each year. Many sites have seen their “net buildable acreage” decrease significantly over time thus actually reducing land values in many cases.

Many of the few remaining large shovel ready sites have been developed in the past

three years, leaving a very limited supply of land remaining. The slide below shows the UGB Expansion History from 1979 through the

Industrial Land Shortage

present. As you can see, in the last 37 years, there have been relatively very few expansions. Also, many of the recently added land sites are located in areas with topography, wetlands, and infrastructure challenges. Also, most industrial companies whether manufacturing or distribution, want to be located as close to an inter-

“November 2015, Metro Council voted unanimously to not expand the UGB for the first time since 1979.”

state freeway interchange as possible and many of the added industrial acreage is located a long distance from these interstates. Where is the next frontier? Troutdale is essentially the easternmost boundary in the Airport Way submarket due to the Columbia River meeting with I-84 and severe topography to the south of I-84.

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Rivergate has only one significant land site remaining. Hillsboro is not served by an Interstate freeway, but has some of the best flat land available inside the UGB. These sites are very attractive to manufacturing companies, high tech companies, data centers and other users who don’t require a large number of trips northbound or southbound on I-5. The Happy Valley/Damascus industrial area has topography issues, trees, rivers, and is located several miles from the I-205 freeway with infrastructure improvements required to provide adequate access. The next frontier appears to be pushing North or South along the I-5 Freeway spine. The State of Washington is seeing significant industrial activity in between Seattle and Portland along I-5. The southern I-5 Corridor submarket seems to be the most logical next step (for Oregon) with the vast amounts of flat land located on the I-5 spine. Tualatin and Wilsonville are working on constructing SW 124th Avenue which will bring some more land sites into play which will help significantly, However there are very few large flat sites in this area that can accommodate larger users (50-100 acres). Specht Development and the City of Woodburn also finally were able to finalize the UGB expansion which was held up by appeals for close to 20 years. This UGB inclusion allows for the development of one of the largest available land sites in the entire Portland Metro Area. This 108 acre site is flat and mostly rectangular and is located near a major I-5 Interchange which recently had an $89M expansion completed. Specht Development has plans for a development of just under 2 million square feet on this site and is one of the only sites (if not the only site) near the metro area which can accommodate a single building of over 1M square feet. LEASE RATES/SPACE:

Rental rates are rising across the board but are rising more rapidly in

certain building size segments and locations. Generally we have seen rental rates that are 15% to 20% higher than the previous peak rents in 2008 (which is around 35% to 45% higher than the bottom of the cycle in 2010-2011.) The two size ranges that seem to be out pacing rental rate growth averages are the really large (100k to 200k spaces) and the smaller traditional spaces (5,000 SF to 15,000 SF). The rents for the mid range sizes of 20,000 SF to 70,000 SF are increasing although not at the pace as these other size segments. 29th Annual IREM® Forecast Breakfast

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EFFECTS OF MARIJUANA ON INDUSTRIAL:

Since It is clear

nationally that the tide of political support for legalizing marijuana has reached critical mass status, so it appears to only be a matter of time before it is legalized federally. Philosophically, the federal government (and especially the most currently elected leaders) are philosophically against Legal Marijuana Revenues Current & Projected

$25,000,000,000 $25,000,000 $20,000,000,000 $20,000,000 $15,000,000,000

$15,000,000

$10,000,000,000

$10,000,000

$5,000,000,000

$5,000,000

$0

legalization, but once California, Oregon, Colorado and these other states start showing the avalanche of additional tax revenues from Marijuana, it is only a matter of time before the federal government wants their fair share. Colorado is a good case study since they were one of the first to legalize. They voted to legalize in

Revenue

2012, but the widespread local jurisdiction acceptance occurred in 2014.

Since that time, approximately 4.5M sq. ft. of industrial space has been absorbed by marijuana related companies (and vendors related to the industry). To put this in perspective, the Portland Metro Area currently has around 7M sq. ft. of vacant space remaining. In the month of September of 2016 alone, Colorado collected $18.24 Million in tax revenue in addition to $1M in license fees. This revenue represents a 75% increase over September of 2015. If September is any guide, this means Colorado could generate around $231M in tax revenue for a 12 month period. Oregon collected $25.5M in tax revenue the first 6 months of 2016. Each month the revenue increased, but if you simply use the 6 month average to project the annual revenues, this means an additional $50M in incoming tax revenue to the State of Oregon. This doesn’t include the optional 3% tax on revenue that several city and county jurisdictions passed in the recent election and also doesn’t include license fees/permits. The state expects it will cost $28.7M to regulate the industry of which $12M will be covered by the taxes and the balance will be covered by fees for licensing marijuana businesses. The balance will be divvied up as follows: 40% to the Common School Fund 20% to Mental Health 15% to Oregon State Police 10% for County Law Enforcement 5% for Oregon Heal Authority for Alcohol and drug abuse prevention. TIME Magazine estimates that the legalization of marijuana in California could create a $6.46 billion market for legal use of marijuana by 2020. 29th Annual IREM® Forecast Breakfast

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IIPR – Innovative Industrial Properties is launching the very first public REIT with a focus on investing in commercial real estate geared for the marijuana industry. The IPO date is set for 12/1/16 and they will sell $8,800,000 shares and are targeting a price of $20 per share which sets the investment at $176 million. This company is being founded and run by veterans of the institutional real estate market. Alan Gold is the Executive Chairman. He is a 30 year veteran and co-founded two NYSE REIT’s including BioMed Realty Trust which was a REIT specializing in the life science industry. That REIT sold to Blackstone in 2016 for $8 billion. Oregon Industrial space will continue to be absorbed by users in this industry but is still limited to buildings purchased with cash or leased from owners who have no debt. This is because the banks aren't able to lend on these properties yet. We have seen a handful of existing operators out of Colorado coming to Portland with their rolled up wads of cash and are purchasing buildings with cash.. The good news is these users are able to use older manufacturing facilities which have been historically hard to lease due to functional obsolescence, so they are having a positive effect on the market. Portland Industrial Market Forecast 6,000,000

2017 FORECAST:

5,280,630

14.00%

5,000,000 3,129,342

4,000,000

12.00% 3,268,152

3,000,000

2,429,213

2,000,000

10.00% 8.00%

1,000,000 0

6.00%

(1,000,000)

4.00%

(2,000,000) (3,000,000) (4,000,000)

2.00% (3,139,638)

0.00%

The chart to the left shows the

net absorption, deliveries and vacancy rate currently and projected for the next two years. The economic recovery cycle is already at close to 8 years, so history proves that we are due for a correction, but we haven’t yet seen any significant signs of a slow-down. There was a slight slow-down in advance

Net Absorption

Deliveries

Vacancy

of the election and that led into the usual

annual slowdown in tour activity during the holiday season. However, we don't have reason to believe this is a trend but is rather a typical seasonal “blip”. The interest from larger users didn't decrease during this period, in fact it increased. It was the smaller users and national smaller “branch” location decisions which have been placed in the slow lane. We have seen some renewed optimism in the market and especially from larger users since the election.

29th Annual IREM® Forecast Breakfast

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No one expected the election to go the way it did, and it seemed everyone believed that if Trump was elected, the market would crash, but it appears there has been the exact opposite reaction. It appears almost certain that corporate taxes will go down and changes in trade policies may positively impacting local manufacturing companies. None of these changes may actually occur, but the perception is that it will become easier and less expensive to do business in America and this perception may serve to extend the time before the inevitable market correction comes our way. Construction costs will continue to rise although not at as fast a pace as the previous two years. This will allow rents to catch up along more traditional business park properties to be developed. Net absorption will continue to be strong, but with less volume as previous cycles due to the lower amount of new construction. Look for an increased resurgence in manufacturing growth provided we have the land and infrastructure to accommodate. With projected new construction and net absorption totals based on 80% of the previous 3 year average, the vacancy rate should remain steadily low as we add space to the market and absorb that space over the next 2 years. Given the restraint in new development and the solid pre-leasing of new industrial product by good credit tenants, I believe the market “correction” which is coming will not be as significant as the 2009 recession which led to 30% to 40% drops in values and rents. Portland has above average population growth to help weather the storm for the next market downturn. The struggle for Portland over the next 10 years will be on the supply side as we need to provide adequate land for industrial development near existing freeway systems. As the urban core gets more and more dense, it will become increasingly difficult for industrial companies to consider moving to locations further away from the I-5, I-205 and I-84 freeways. Topography, rivers, and other geographic features limit the adding of additional new interstate freeways, so we will need to focus on those properties that have flat topography and are closest to the existing interstates and infrastructure in order to accommodate growth. 2017 and 2018 should be great years for the Portland industrial market as Portland continues to grow.

29th Annual IREM® Forecast Breakfast

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MULTIFAMILY

29th Annual IREM® Forecast Breakfast

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29th Annual IREM® Forecast Breakfast MULTIFAMILY Karlin Conklin Principal & Managing Director Investors Management Group NW

1234 SW 18th Ave., Suite 102 Portland, OR 97205 (971) 888—4010 x104 karlin@imgnorthwest.com Karlin Conklin has more than 15 years of experience in multifamily real estate and has been involved in more than $1.0 billion in transactions. She is a licensed broker in Oregon and Washington and a full-service business advisor. She is highly respected for protecting her clients’ best interests while providing unprecedented service, taking the time to genuinely counsel her clients through the multifamily sales process. Karlin founded Investors Management Group Northwest LLC in 2015. IMG Northwest operates exclusively in the multifamily space, specializing in brokerage sales and acquisition syndications. She is an integral part of IMG Capital Group and oversees acquisitions and investor relations. Prior to IMG Northwest, Karlin served as SVP and Managing Director of Portland, Oregon based Sperry Van Ness/Bluestone & Hockley. There, she brought the office’s growth to a Top-10 national ranking out of 180 offices. She was a high-producing broker ranked in the Top-25 nationally out of 850 brokers. As Senior VP for Guardian Real Estate Services (2002-2010), Karlin sourced, capitalized and repositioned 5,800 value-add multifamily units and raised $234 million in equity from institutional

partners including GE Capital, Morgan Stanley and Broadreach Capital, along with Tenancy-InCommon and syndications with high-net-worth investors. On the brokerage side, Karlin led the company’s multi-state brokerage efforts, including real estate, REO and note sales. Before 2002 Karlin was an Associate Director at Marcus & Millichap Real Estate Investment Services specializing in multifamily. Karlin also served as the Director of the Lindquist Center for Entrepreneurship at the University of Oregon where she taught marketing and entrepreneurship courses. Karlin Conklin is a noted trainer and public speaker. She presents at numerous real estate events around the region including IREM and ULI. She holds a Bachelor of Science in Journalism with an emphasis in Public Relations and an MBA from the University of Oregon. 29th Annual IREM® Forecast Breakfast

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NATIONAL PERSPECTIVE:

The current cycle is now three years Into the Great Recovery. Escalation is due to investors chasing yield, cap rate compression, and sustained low interest rates. The housing sector was the hardest hit during the Great Recession and really hasn’t made up for the years where there was basically no construction. Nationally, total housing construction since 2010 has tracked at around half of the long-term average. Housing investment has fallen for the past two quarters as multifamily construction has slowed and single family development has yet to accelerate. Steady job creation, low interest rates, and limited construction have combined to produce a near-perfect environment for the multifamily sector. Multifamily values and rents are above the previous peak. Home prices in Portland exceed their 2007 housing-bubble peak by nearly 12 percent. In the top 20 markets, job growth and population growth have outpaced construction of housing. Portland is in that set. In Seattle, there is only one unit being constructed for every four jobs created. There is a significant supply issue. Those communities that thrive because of population and job growth are the same communities struggling with tight housing and the affordability of rents. The national slowdown is already in process. Apartment deal volume rose 7% in the 3rd quarter, but that was the slowest gain since 2014, according to Real Capital Analytics. While there have been double-digit rent increases for the last several years, rent increases are anticipated to average below 2 percent nationally in 2017. Of 123 markets surveyed by Yardi Matrix in October, the average rent YOY declined the most since 2013. Not huge, but an indication that in a majority of markets, rents have already peaked.

Zillow Research YOY Sept, 2015 – Sept, 2016

National Stats vs Portland MSA SINGLE FAMILY Avg Home Value Increase Current Average MULTIFAMILY Rent Increases Average Rent

5.50% $189,400 6% Drop 1.50% $1,403

14.60% $342,100 9.5% Drop 7.00% $1,784

• Nearly half of people buying homes are first-time home buyers. • Millennials are now entering the housing market in large numbers. • Nationally, nearly 20% of SFR is in the rental pool.

29th Annual IREM® Forecast Breakfast

Six million new households have formed since January 2011. That is putting a strain on housing stock. According to Zillow Research, there is a sharp drop nationally in single family inventory, due to a large uptick in first-time home buyers and millennials entering the housing market. The lack of supply is driving up pricing, particularly in markets such as Portland. Last recession was driven by the collapse of financial markets in large part due to residential and predatory lending.

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Checks and balances have been put in place to prevent a similar scenario in this cycle. Values and rents are reaching a plateau. Provided jobs follow the current pattern, we will have stagnation, but will not likely go into such a deep loss of value and wealth as with the Great Recession. LOCAL PERSPECTIVE: Over the past 12 months, Cap Rates stabilized across the metro in multifamily. However, since the election, treasuries have increased more than 50 basis points, and we’re seeing newfound caution and an immediate pullback in pricing. This year, institutionalgrade properties are trading in the 4-4.5% cap range; Portland Metro-Median Price Per Unit Multifamily 2006 – YTD 2016 otherwise, average across the metro is in the low-tomid 5% range, depending on location. Outer East County and Vancouver are typically 50-75 basis points higher. Given the desirability of the market, Portland cap rates mirror those of Seattle, which has a far more robust job engine. The median Price/Unit is coming in just below $115,000/unit, which is a very sizable escalation over the past 3 years. Asking Rent Levels & Annual Growth Multifamily 2010 - 2018

As for rental rates, the average rent/SF across the metro has increased to $1.47, which means an 850sf apartment would rent, on average, for $1,250/ month. Adding in utility, parking and pet fees brings that average up to $1,400/month. Downtown is seeing the highest rents at $2.30/SF, while outer east and west Vancouver have the lowest rates averaging $1.17/SF.

Rent Growth Y/Y

The current slide is extremely important from data compiled from CoStar. The bars indicate the percentage increase YOY. The orange line shows the average rent. The biggest escalation in leasing rates occurred last year, in 2015. Note this year and estimates for 2017 and beyond. We are moving into a period of average rental growth. Source: CoStar Q3 2016

Most of the new construction has occurred in the closer-in submarkets. With deliveries and lease-up, those submarkets are offering concessions for the first time in 3-4 years in order to get their buildings leased up. The abundant supply is now slowing rental growth. This is good for renters, but not so much for developers. 29th Annual IREM® Forecast Breakfast

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The big elephant in the room is affordable housing. This isn’t just a Portland problem. A majority of the metros with robust economies across the nation are facAffordability Efforts ing a housing supply problem, which Recent requirements: has rapidly escalated rental rates and • 90 day notice for rent increases > 5% • 90 day notice for no-cause evictions the call for more affordable housing. Inclusionary zoning: Housing is a highly charged, • Certain % of affordable units required to be built in any new project. Developers can “buy out” by paying a fee political issue. Portland has enacted a number of into the fund. Passage of $248.4 million bond measure: laws and regulations to address the problem. For • Only affects Portland homeowners • Bond calls for building or preserving 1,300 affordable most of the past year, owners are required to give apartments a 90-day notice for rent increases above 5% and Construction excise tax: • 1.0% tax on all new construction valued > $100,000 for no-cause evictions. Inclusionary zoning, the Rent Control passage of a nearly $250M bond measure and the construction excise tax are all intended to impact housing affordability. And then there’s rent control. In Oregon, a ban has been in place since 1985 that bars cities and counties from setting limits on how much and on how fast landlords can increase monthly rents. The Oregon legislature is going to tackle this issue in the coming session. Rent control is universally unsupported by economists. The root of the issue is supply.

Multifamily development is focused on five key areas with high demand: North Portland, Close-In East Portland, Close-In West/NW Portland, Suburban West and Clark County. Suburban construction has remained slow throughout this cycle, despite low vacancies and increasing rents. There are 25,600 units in the proposal stage; and currently 10,300 under construction. As those units become available, vacancy is likely to go up with downward pressure on rental rates and growth. And for the first time in years, free rent and concessions are being Multifamily Development DEVELOPMENT PERSPECTIVE:

offered in the core and with new deliveries. A healthy market has 5-6% vacancy. The submarkets with high construction deliveries are now softening and vacancy is above 5%. For the third year in a row, the United Van Lines Movers Study has found that Oregon is the #1 top moving destination in America, with 69% of moves to and from the state being inbound. Approximately 70% of those settle in Portland. 29th Annual IREM® Forecast Breakfast

PROPOSED CONSTRUCTION

UNDER CONSTRUCTION

6,979 6,194 3,694 3,595 2,010 3,133

2,474 3,905 842 1,398 659 1,036

CLOSE-IN EAST PORTLAND CLOSE-IN NW/WEST PORTLAND

CLARK COUNTY SUBURBAN WEST NORTH PORTLAND OTHER

25,605 units 10,314 units

35,919 TOTAL UNITS

Source: Barry Apartment Construction Report, Fall 2016

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According to US Census Bureau, Portland is growing at a clip of 111 people/day. That's two full TriMet buses every day for a year -- enough to rank the region Portland Metro-Median Price Per Unit Multifamily1989 – YTD 2016 number 19 on the list of US metro areas with the greatest number of new residents. While U.S. private-sector salaries grew an average of 2.6 percent in 2015, Portland salaries increased 6.5 percent, ranking us third nationally among large metro areas, or spots with 1 million or more residents. Our population growth and rising incomes call for more housing. The demand is there. Unfortunately, given the layers of new fees and restrictions, developers are starting to take a “wait and see” stance. The most daunting challenge is regarding rent control. Bottom line, we need the 25,000 proposed units to be built. MULTIFAMILY FORECAST:

Portland is a highly sought-after multifamily market. Population growth. Job growth. Income growth. Far more buyers than sellers. As you can see from the slide, the Portland market has seen steady, consistent growth in median pricing over the last three decades. We’ll have to wait and see if the escalation in median prices over the last two years is the new paradigm or more of an anomaly. The top 5 sales thru early November show impressive numbers. The slide Does not include the Eddyline at Bridgeport, which sold a couple weeks ago for $118million, which includes 367 units plus 22k SF of retail. These sales are at the top end of pricing and WAT E R L I N E are far above the area median. As we move into TOP 5 SALES Multifamily - YTD 2016 2017, we are likely to see a flattening of values at the top end, while those submarkets at the CITY UNITS PRICE $/UNIT $/SQFT MONTH bottom end will continue to gain value as rents LaSALLE NOV BEAVERTON 566 $140M $247,500 $136 increase due to the very low vacancy. 2080 NW FRONT AVE.

Most of the gains in rents and values will be in outer Portland/Clackamas/Gresham. Rising interest rates for the first time in years are now part of the value mix. Underwriting and growth projections are far more under the microscope. 29th Annual IREM® Forecast Breakfast

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WATERLINE

MAR

PTLD-CENTRAL 243

$94.0M $386,831

$269

BRECKENRIDGE

MAY

PTLD-WEST

357

$81.5M

$228,291

$298

LAKE OSWEGO 348

$78.0M

$224,138

$207

PTLD-CENTRAL 308

$63.95M $207,630

$243

ONE JEFFERSON SEPT THE VUE

JUL

Source: CoStar, Waterlineapts.com


It is likely as we move into 2017 and 2018:  Price increase will go back to the historical 5% YOY rate  Rent increase will moderate, especially on the high-end (>$2500/month for a 2 bed) units  Main way to make more NOI will be watching expenses Sales volume is down YOY thru Portland Metro Multifamily Sales YOY – YTD October 2016 vs October 2015 October. We should end 2016 at $2.1 PRICE $/UNIT SqFt/UNIT $/SqFt billion. Many owners have been on the SALES UNITS (AVG.) sidelines, enjoying strong cash flow and 2016 50 $7.7M $138,133 908.4 $160.30 escalating values with little effort on their (212) part. Well, that party is coming to a quick 2015 55 $8.2M $126,668 897.6 $149.43 (245) end. I predict we will have a more robust sales environment in 2017 as more owners -13.5% -9.5% -4.8% 9.1% 1.2% 7.3% realize we’re at or near peak pricing, and 2016: $2.1B (est) holding on to their building may not bring 2015: $2.4B (est) additional future value. More owners will become sellers in 2017. Source: CoStar, Steve Morris

29th Annual IREM® Forecast Breakfast

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TOTAL $1.65 B $2.00 B -17.6%


OFFICE CAPITAL MARKETS 29th Annual IREM® Forecast Breakfast

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29th Annual IREM® Forecast Breakfast OFFICE / CAPITAL MARKETS David Hill Senior Managing Director New mark Grubb Knight Frank 1120 NW Couch St., Suite 350

Portland, OR 97209 503—972—5510 dhill@ngkf.com David has over 30 years of commercial real estate experience, with a focus on investment sales, and background in property valuations and consultation. He has been involved in the sale of over $500 million in investment properties, representing over 6 million square feet. Prior to joining Newmark Grubb Knight Frank (formerly Grubb & Ellis), he held the MAI designation with the Appraisal Institute, and was a Principal in the Portland Office of PGP Valuation, then the largest commercial real estate appraisal firm on the West Coast. David served on the Board of Directors of the Oregon Chapter of the National Association of Industrial and Office Properties (NAIOP) and was Chapter President in 2000. 2013 CAB Investment Broker of the Year 2013 and 2014 Newmark Grubb Knight Frank – Top Producers 2009 CAR Investment Broker of the Year – First Runner Up 2008 SIOR Office Deal of the Year Grubb & Ellis Company – Circle of Excellence (2007) NAIOP Oregon Chapter President (2000)

Experience 2000-Present: Senior Managing Director, NGKF Capital Markets, Newmark Grubb Knight Frank (formerly Grubb & Ellis) 1986-2000 Principal, PGP Valuation, Portland

Education

Willamette University, Salem, OR – B.S. with honors, economics, minor in Mathematics Earned the MAI designation from the Appraisal Institute

Areas of Specialization

Office and Industrial Property Sales Mixed-Use Property Sales Commercial and Residential Land Sales 29th Annual IREM® Forecast Breakfast

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NATIONAL PERSPECTIVE HOW FAR HAVE WE COME?: Commercial real estate markets generally peaked in Q4 2007 prior to the great recession, and subsequently bottomed out around two years later in Q4 2009. It has been a slow climb at times, but over the past seven years effectively all major property types (i.e. apartment, office, industrial and retail) have fully recovered, albeit at very different levels. One measure of this recovery is RCA/Moody’s Commercial Property Price Index (CPPI), which is based upon repeat sales. The chart below illustrates price changes in the U.S. since 2000 for all four property types combined, and each individually. It also highlights peak 2007 pricing levels. All property types show a 21% increase RCA CPPI Values – All Property Types over peak 2007. Apartments are dramatically Moody’s – Q4, 2000 Q3 higher than all others at 50%; Office at 15% 2016 and Industrial and Retail at 9% and 1%, respectively. I am not surprised that apartments lead, but a bit startled by how much. It seems as though industrial and retail are understated compared to what we have seen in the Portland market, but their position relative to other product types is consistent. It is also worth noting that there is a much more dramatic spread in pricing between the various product types in this cycle than has been seen historically. This is in large part driven by fundamentals; but I would also argue is a reflection of “herd mentality” and an overreaction to the impacts of the “great recession”. One other observation with regard to Office; the 15% price increase does not begin to tell the story of this product type. The chart below separated CBD and Suburban office trends. CBD office values show a dramatic gain of 40% since 2007 peak levels, while suburban office pricing is actually still down 8% from the peak. This is consistent with all the talk and momentum that has been surrounding urban versus suburban in recent years. The national slowdown is already in process. Apartment deal volume rose 7% in the 3rd quarter, but that was the slowest gain since 2014, according to Real Capital Analytics. While there have been double-digit rent increases for the last several years, rent increases are anticipated to average below 2 percent nationally in 2017. Of 123 markets surveyed by Yardi Matrix in October, the average rent YOY declined the most since 2013. 29th Annual IREM® Forecast Breakfast

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Not huge, but an indication that in a majority of markets, rents have already peaked. RCA CPPI Values: Suburban vs. CBD Office Moody’s – Q4, 2000

Q3 2016

LOCAL MARKET TRENDS/OUTSIDE INFLUENCE: As typically happens in a heated real estate market cycle, strong demand in the major west coast markets of Los Angeles, Seattle and particularly San Francisco has driven investors from these markets to expand their target markets to include PDX and put upward pricing pressure on this market. What is not typical of this cycle, is that the Portland market profile has been raised to a level where institutional money is looking to invest here regardless of what is going on in other markets.

One example of this new Portland focus is represented in the Urban Land Institutes (ULI) Emerging Trends Real Estate 2016 publication that identified Portland as #9 market nationally for real estate prospects, and #3 for US Office Property Buy recommendations. With 24-hour cities such as New York and San Francisco becoming overheated, 18-hour cities like Portland and Austin have risen toward the top of the list for real estate investment due to: growing economies, strong tech base, lower cost of living, and more favorable yields. Regarding office rental rates, as illustrated on the graph below, the suburbs have seen a slow but steady improvement over the past few years but has not been substantially influenced by the larger west coast markets. Suburban office lease rates are up about 12% the past three years, or 4% annually. Contrary to the suburbs, the Portland CBD office is experiencing a new paradigm driven in large part by investors and tenants from other major markets creating and occupying more high-end office environments. This has triggered dramatic rent increases/spikes, driven cap rates down and prices up. Average CBD office rents are up just under 24% the past three years, almost twice that rate of growth in the suburbs. Also note the growing gap between average CBD and Suburban rent levels: 2011 less than $3.00/SF; today almost $8.00/SF. 29th Annual IREM® Forecast Breakfast

Gross Asking Rent Per Sq.Ft. - Office $31

$28.93

$29 $27 $25 $23

$21.65

$21 $19 $17

$21.04

$18.79

$15 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 Q3 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q3 Source: CoStar, NGKF Research

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Suburban

CBD


The strong CBD rent growth combined with growing investor demand and a historically favorable interest rate environment have driven cap rates down and prices up far beyond prior market peaks. Whereas cap rates reached the low-to-mid 6% range at the peak of the last cycle, cap rates in the 5%’s are now common with some even entering the 4%’s. I would expect these to rise slightly in 2017 and more so in 2018 due to a combination of rising interest rates and lower rent growth expectations. The combination of rising rents and lower cap rates have resulted in dramatic price increases. At the prior market peak in 2007, only a couple of CBD office sales had breached the $300/SF price barrier. During this current cycle, over 10 transactions have exceeded $300/SF, several over $400/SF (most recently Pioneer Tower at $410/SF) and one sale has approached $500/SF. I anticipate the $500/SF price barrier to be broken by early 2017 with the sale of Pearl West. That said, I anticipate overall pricing in CBD office to flatten in 2017.

Portland CBD Office: Class A vs Historic

CREATIVE OFFICE MAKING ITS MARK: Traditional Class A office space is no longer the measuring stick for the Portland CBD; its creative office space and driven in large part by historic building renovations. Presented below is a comparison of Class A versus Historic office space in the Portland CBD.

As summarized, the Q3 2016 Class A CBD vacancy was reported at 10.2%, versus historical space at 8.7%; average asking rents for Class A office space the past 3 years have grown 5.9% annually, versus historic office space at 9.7%. Also, average asking rent for Class A office of $31.53/SF is only 15.5% higher than historic office at $27.29/SF; 3 years ago the premium was almost double that near 27%. Source: CoStar, NGKF Research

It seems like creative CBD/urban office is all that is talked about anymore; and it’s not just historic buildings. Newer existing buildings are included in this conversion trend as well, led by the landmark US Bancorp Tower and Block 300. These projects have been able to dramatically increase their marketability and associated occupancy and lease rates through this process. Most recent and significant is that effectively all new office construction/renovation is focused on delivering highly desirable creative space at almost any cost; resulting in a need to achieve lease rates in excess of $30.00/SF NNN or near $40.00/SF FS as compared to the previous rent numbers presented. A summary of several of the new projects is presented below.

29th Annual IREM® Forecast Breakfast

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The question is not whether or not there is demand for this type of creative office space. The question is what is the depth of the creative office space demand? And more specifically, what is the depth of the market for this type New Spec Office Construction & Renovations: of space delivered at record high 1,141,859 sf | 2% Preleased | Asking Rents: $30 psf NNN + rent levels. With over 1.1 million SF of this space currently under construction/ renovation and more planned, we should have some answers by late 2017 and certainly 2018. FORECAST 2017: When I think ahead to 2017 and beyond, I can’t help but think about the traditional real estate cycle: Recovery, Expansion, Oversupply, & Recession. These cycles really come down to market demand and inventory, and are measured by rents, vacan-

Source: CoStar, NGKF Research

cies, absorption, and new construction. Where are we at in this cycle with regard to office in the Portland metro area? In answering this question, we need to look at the two very different office markets that have already been referenced: CBD and Suburban.

Traditional Real Estate Cycle

Rents: As previously mentioned, CBD rents have been rising steadily over the past 5 years, and have been particularly strong the past three years (8% annualized growth). Suburban rents did not start moving up until three years ago, and have increased at only half the rate of the CBD (4.2% annualized). Net Absorption/Demand: I would expect the graph below to be the most surprising to most people. It illustrates net absorption (or increase in occupied space) with the total market shown in green, suburban in blue, and CBD in yellow.

29th Annual IREM® Forecast Breakfast

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Over the past 5 years, the suburbs have absorbed over 6.2 million SF of space, representing 93% of the total net absorption in the market. The suburbs have experienced positive net absorption in 23 of the past 24 quarters; negative only once Portland Metro Office Market in the past 6 years. Alternatively, Net Absorption CBD net absorption has been 2,500,000 positive in recent years but has 2,000,000 experienced a lot of up and down quarter-to-quarter. YTD 2016 has actually been 1,500,000 its best performance, including over 270,000 SF 1,000,000 of net absorption; this is still not keeping pace 500,000 with the suburban market, representing only 18% of the total SF absorbed versus its inventory 2011 2012 2013 2014 2015 2016 of 26% of the region. (500,000)

Source: CoStar & NGKF Research

Portland Metro

CBD

YTD Suburban

Portland Metro Office Market Vacancy Rate

Vacancy: A third component to measure 11.20% a real estate cycle is vacancy. The graph 11.00% 10.50% below illustrates total market vacancy in 10.00% 9.20% green, CBD above in yellow, and suburban 9.00% 8.40% in blue. Once again, with all the talk and hype around Portland CBD office, you may 8.00% 7.10% be surprised to see that the suburban 7.00% 6.40% market has experienced a much more 6.00% positive trend over the past 5 year; this is consistent with the absorption numbers presented. Portland Metro CBD Suburban Early in the recovery cycle and as illustrated at the beginning of the graph, the CBD market was much stronger, with vacancy just above 8% versus the suburbs at over 11%. I believe Portland had the lowest CBD vacancy in the country during that time period. However, over the past four years the vacancy rate has bounded around between 9 and 10% and currently sits at just over 9%. Alternatively, with the steady absorption previously discussed and minimal new construction, the vacancy rate in the suburbs has steadily declined over 480 basis points from 11.2% to its current rate of 6.4%. 12.00%

Source: CoStar & NGKF Research

The Future: Now that we have perspective on the market, let’s look at the future. The next two graphs illustrate net absorption, new construction, and their impact on vacancy. Each graphs provides actual information since Q1 2015 to date, then project through Q2 2018. The first graph is CBD. New construction completed or scheduled for completion is represented by the blue bars, net absorption is represented in yellow bars, and vacancy is illustrated by the green line. 29th Annual IREM® Forecast Breakfast

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Future net absorption is based upon the average rate of net absorption the past two years. Future new construction reflects projects currently underway. Not surprising that with a moderate rate of absorption and substantial new projects to be delivered, the CBD vacancy rate is anticipated to bump up beginning in late 2017 and into 2018, 150 basis points to 10.7%. When looking at the same CBD Office Market projections for the suburbs as preDeliveries, Absorption & Vacancy Projected Historic 400,000 12.0% sented below, the outlook is dramatically better 350,000 and very favorable overall. With steady absorp10.0% 300,000 tion and minimal new construction, suburban 250,000 8.0% office vacancy is projected to fall 250 basis 200,000 points to 3.9% by mid-2018, versus the CBD at 150,000 6.0% 100,000 10.7%. 4.0% 50,000

0

2018 Q2

2018 Q1

2017 Q4

2017 Q3

2017 Q2

2017 Q1

2016 Q4

2016 Q3

2016 Q2

2016 Q1

2015 Q4

2015 Q3

2015 Q2

2015 Q1

Place in the Cycle: Let’s go back to the traditional -100,000 0.0% real estate cycle and see where we are headed. After a long and dramatic run of increasing rent Available SF Delivered Avg. Net Absorption Vacancy levels, Office Market the CBD is nearing the top of the cycle, say 11:15 Suburban Deliveries, Absorption & Vacancy pm, with increasing construction and potential 650,000 Projected Historic 10.0% economic headwinds likely to turn the market 550,000 9.0% 8.0% toward a correction in late 2017/early 2018. 450,000 7.0% However, barring a major economic crisis, I see 350,000 6.0% this as only a moderate correction; probably more 250,000 5.0% 4.0% of a flattening. 150,000 -50,000

2.0%

Source: CoStar & NGKF Research

3.0%

50,000

2018 Q2

2018 Q1

2017 Q4

2017 Q3

2017 Q2

2017 Q1

2016 Q4

2016 Q3

2016 Q2

2016 Q1

2015 Q4

2015 Q3

2015 Q2

2015 Q1

2.0% The Suburbs continue to move slowly but -50,000 1.0% steadily out of the recovery stage and into the -150,000 0.0% Available SF Delivered Avg. Net Absorption Vacancy expansion period; feels like 9:00 pm. And, with no significant new construction in site, even moderate continued economic growth should drive the suburbs fully into the expansion mode; albeit on a slow steady pace. Portland Metro Office Real Estate Cycle Where would you rather buy in a cycle: near the peak or on the way up? While the herd continues to talk all urban all of the time, I would encourage investors to break from the pack and start to graze in the less sexy but bountiful pastures of suburban office. Source: CoStar & NGKF Research

Happy Holidays and best wishes for a prosperous 2017 and beyond. 29th Annual IREM® Forecast Breakfast

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RETAIL

29th Annual IREM® Forecast Breakfast

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29th Annual IREM® Forecast Breakfast RETAIL Jack Gallagher H. III, MCNE Associate Vice President Colliers International 851 SW Six th Ave., Suite 1200 Portland, OR 97204 (503) 542— 5887 jack.gallagher@colliers.com With more than 30 years of commercial real estate experience throughout the state of Oregon, Jack is a reputable expert in shopping center leasing, sales and site selection for tenants, landlords and developers. He has worked with many local, regional, and national users, including but not limited to: Wells Fargo Bank, Office Depot, Baja Fresh, KFC, Barnes & Noble, PetSmart, U-Haul Corporation, Albertson’s, Party Fair, Jim & Patty’s Coffee, Coldwell Banker Seal, and Harbor Freight Tools. Jack’s enduring career has earned him past recognition as the Portland Commercial Association of Realtors Retail Broker of the Year, as well a Top 5 Producer at NAI Norris, Beggs & Simpson. He was honored as a CoStar Power Broker in 2015. In addition, he has achieved NAI Global’s National Leadership Award twice. He has successfully leased and sold major shopping centers throughout the Portland and Northwest USA region, totaling over 2.2 million square feet. Jack has also assisted numerous large and specialty retailers in locating sites nationally, plus providing expertise in acquiring commercial land. As a licensed real estate broker in Oregon, Jack has earned the Master Commercial Negotiation Expert (MCNE) designation. He remains actively involved within the industry as an International Council of Shopping Centers (ICSC) member, CAB member, and Colliers Northwest Region Development team member. Prior to joining the Colliers International team in Portland, Jack was a licensed broker at NAI Norris, Beggs & Simpson. He served as a former Chairman of NAI Global Shopping Center Division. Before his distinguished career in commercial real estate, Jack was an Officer in the United States Army Corp of Engineers. He also held senior management positions with Westin Hotels, Hotel St. Francis and The Plaza Hotel. He holds a bachelor’s degree in business and industrial engineering from Oregon State University. 29th Annual IREM® Forecast Breakfast

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NATIONAL PERSPECTIVE: As you can see from the national chart, vacancy rates across the US have declined for most of the cities below the 5% national vacancy rate; but some of the cities are surprisingly up with the high vacancy rates U.S. Retail Vacancy Rates in areas such as Phoenix, Arizona and Las Vegas, Nevada to name a few. Portland, as you can see, is enjoying terrific success just above a 4 point percent rate. Also, in the national construction scene, you can see the trend of the annual shopping center growth declining starting in 2009, which was driven downward due to economic pressures. U.S. Shopping Center Growth Annual Change in Total U.S. Shopping Center GLA

Total Retail in Billions

Concerning another major factor in this -- that could create a little bump in the vacancy rates -- could be the impact of what I call Amazon Store at Washington Square the “elephant in the room”, E-Commerce. As of the end of 20142015, E-commerce was 5.5 percent of the total retail consumer sales volumes and is projected to rise approximately 7.6% in 2016. For comparison, E-commerce was 1.1% in 2002. Amazon alone makes up approximately 20% of that sales E-commerce percentage; and as you know, Amazon has just committed to a large industrial space out in the Tanasbourne corridor. It is interesting to note a few of the pure E-commerce sites do have brick and mortar stores, Total Consumer Retail Sales vs. E-Commerce Sales like Amazon, which just opened a book store in Washington Square. But everyone knows, even with the E-commerce sales increase to 7.6%, the consumer sales in shopping centers is still at a strong 93%. It certainly appears that E-commerce sales are just displacing the sales generated in the past by catalogue sales, i.e. the Sears, Roebuck catalogue. These new technologies are impacting retailer’s priorities and consumer behavior. Stay tuned for this online story. 29th Annual IREM® Forecast Breakfast

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LOCAL PERSPECTIVE: Like Seattle and San Francisco, Portland is witnessing a solid upward trend in retail activity with the total retail market vacancy that is progressing to a low of approximately 4%, as you can see on the 10-year chart. The retail centers Portland Retail Vacancy Rates 2006-2016 with the lowest vacancy rates are enclosed malls and power centers, at approximately ½% for malls; and 2% for power centers. This vacancy rate could be affected by the ongoing changes within the supermarket industry, and competition challenges for some of the mid to large box retailers potentially closing some of their existing stores. Pertaining to shopping center cap rates, vs. U.S. Cap Rate Comparison they have been declining from approximately Portland Based on Retail Building Sales of 15,000 sf & Larger 8% in 2013, to an amazing low of about 6-1/2% across the board, but that excludes free-standing buildings and fast food restaurants. Currently, Portland is on pace with a shopping center selling range of approximately $217 to $283 per square foot depending on location of the project and quality of respective tenants. Interestingly, a high watermark was achieved

Portland Retail vs National SOLD $19,400/SF

SOLD approx. $1,350/SF

29th Annual IREM® Forecast Breakfast

recently in the sale of the New Seasons grocery store, at $627 per square foot. But Portland, don’t get too excited with these increases in sales rates. In Las Vegas, a major enclosed mall recently sold for $1,350.00 per square foot; and in Beverly Hills, California, the Louis Vuitton Company bought a retail building for $19,400 per square foot for a 6,200 SF property on Rodeo Drive. Page — 72 —


Rental Rate ($/SF)

Retail Leasing: Within the overall metro region, we are witnessing upward momentum on the retail leasing rates over the past ten years, going from an average of approximately $16.00/SF to our current total market average of a Portland Retail Market: Quoted Rates little over $18.00/SF, NNN. As you can see from the above chart, the markets that are enjoying the highest rental growth on average are in the Northwest area of Portland, i.e. the Pearl District, and the south I-5 Corridor. The concept of supply and demand are certainly providing landlords the opportunity to increase rental rates and also reduce tenant improvement allowances and other

Rent ($/SF)

incentives. One area to notice is increase in the Portland Retail Market: Quoted Rates by Submarket overall rental rates around Washington Square, Average $18.05 where rates have jumped almost 20%-25%, an astounding figure over the last 16 months. So far year-to-date, the stores that have committed to the larger square footage footprints are primarily in the athletic and fitness group. Nonetheless, we see the market leasing activity generally remaining at the current pace. Furthermore, one of the interesting retail changes in the industry is the potential strategy of Amazon to be a possible player in the grocery section. This could have an effect on the overall leasing rates. DEVELOPMENT: The retail development activity in the greater Portland area has been good in 2016 with approximately 588,300 SF delivered or under construction year-to-date, which is below the norm, as one can notice on the historical delivery chart which started in 1982. Naturally, the effect of the downturn starting in 2008 has caused the space deliveries to dramatically decrease, except in 2014; which historically was an average year of approximately 1,300,000 SF of new construction delivered. In consideration of the current urban growth boundary, new construction most likely will be below or similar to recent years. 29th Annual IREMÂŽ Forecast Breakfast

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One retailing sector that could add to development activity with new construction potentially created by the success of discount retailers, such as TJ Maxx, Nordstrom Rack, Ross Dress for Less, etc.

Portland Retail Construction

Sub Market

Space Delivery Activity by Submarket

TOTAL: 588,300 SQ.FT.

Nonetheless, such redevelopment or development projects like the Lloyd Center, The Waterfront in Vancouver, a new Fred Meyer in Clackamas, and the expansion and renovation of Cedar Hills Crossing in Beaverton will all bring exciting retail space to the marketplace.

Portland Retail Historical Deliveries 1982-2016 Square Feet

New & Noteworthy Retail Developments

MARIJUANA: Marijuana in the shopping center or retail environment is certainly a Happy Valley challenged use for most shopping center Crossroads owners. In a general way, most shopping centers that have anchored tenants or national store brands will not pursue such a use, simply because there are issues with the covenants, conditions, and restrictions, commonly called CC&Rs, that are in place and normally restrict this kind of use. Additionally, anchor tenants typically have a prohibition against this use within their leases plus the projects permanent financing for the most part does not approve of the marijuana use. In general, marijuana outlets are often located in older seasoned commercial properties, or the operator purchases a free-standing building which eliminates those road bumps. In any regard, as one can see, the marijuana sales are on the upswing, and are projected to increase through 2020. 29th Annual IREM® Forecast Breakfast

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2017 FORECAST: During 2016, we have enjoyed a strong frothy market and we have been fortunate. Many of us can easily remember the effects of the downturn in 2008 through 2012 as well as the real challenges during the Retail & Marijuana 1980’s with very high double• Recreational cannabis sales in Oregon hit $160.8 million through the first nine months of the year, according to the Eugene digit interest rates. Nonetheless, Register-Guard. we see optimism, but are a little • Officials are expecting cautious going into 2017. to license many new recreational retailers by 2017, with a total of 550 expected by 2019, according to a report from the Revenue Department.

Pertaining to the retail rental rates, we will continue to see increased triple net rates in 2017 primarily due to the demand for quality space outpacing the supply, and it is anticipated that the retail vacancy rates will remain approximately the same as they were in 2016.

Additionally it is anticipated that new development will be less than in 2016 but with new projects starting in the Cedar Mill area, Beaverton proper region, Sherwood, and the continual project advancement at The Waterfront in Vancouver and Lloyd Center. Besides these, we most likely will see some in-fill projects that will encompass a smaller leasing opportunity. Furthermore, some projects we anticipate will be renovations of seasoned retail centers that need to be upgraded to remain relevant. Another factor to consider will be the continuance of mixed-use projects primarily on the east side of Portland. In the retail world, consolidation is usually an Total Portland Retail Market Rates on-going activity – for example, Sports Authority 2017 Retail Forecast of Rates (NNN) closed their stores, Golfsmith closing approximately 2/3 of their US flagstores, and uncertainty hangs over the future of Macy’s and Sears brick and mortar stores. In the supermarkets store arena changes are possible in 2017. As they are generally the anchor store within community and neighborhood centers, a trickle-down effect could be felt by other retailers depending on the strength of that particular grocery retailer, which normally locates at gold and platinum intersections.

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Retail stores are becoming smaller in size due to the better store merchandising of occupied space plus the merchants are being pushed by the consumers to provide a more fun environment within the store itself. Portland Area Retail 2006-2016 – 2017 Forecast

As far as shopping center sales, quality properties available to the buying public are difficult to find, but again due to lack of supply, the sales price per square foot is likely to increase.

The world of E-commerce will continue to escalate in 2017. One factor to keep a close eye on is the result of the highly mobile up-and-coming purchasing powerhouse, called Millennials, using their smart phones to make purchases, U.S. Retail Ecommerce Sales 2012-2018 (in billions of $) otherwise referred to as M-Commerce. Hence we might see in some cases the result of a slight decrease in demand for retail space. In summary, 2017 is going to be a reasonable year, but a peak year, in the retail and shopping center industry within the Portland and Vancouver market, but expectations are slightly below the frothy activity we have all witnessed in 2016. All of the participants up here on the stage are anticipating that you all run out and start hitting the stores hard this holiday season to make the greater Portland area merchants happy. Enjoy the holidays.

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DEV ELOPMENT

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29th Annual IREM® Forecast Breakfast DEV ELOPMENT Gerard C.S. Mildner PhD Director, Center for Real Estate Portland State University 631 SW Harrison, Room 270 Portland, Oregon 97207-0751 (503) 725—-5175 http://www.pdx.edu/realestate Dr. Gerard Mildner is an Associate Professor of Real Estate Finance and Academic Director at the PSU Center for Real Estate. He teaches in the areas of urban economics, housing economics, corporate finance and public finance. His research is focused on the economics of local government, including growth management, rent control, municipal sports stadiums, housing

markets, land use regulation, and urban transportation. Dr. Mildner obtained his Ph.D. in Economics from New York University and holds a B.A. in Public Affairs from University of Chicago."

29th Annual IREM® Forecast Breakfast

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NATIONAL PERSPECTIVE: We’re in the middle of one of the longest economic recoveries in the post-war years.

The Seven Year Recovery US Bureau of Economic Analysis GDP Growth Rate, 2005-16

At 84 months, that’s twice as long as the average recovery. Unemployment has fallen to essentially frictional levels, or the unemployment needed for people to switch

The Seven Year Recovery US Bureau of Labor Statistics, 2005 – 2016 Q2

jobs. That could mean that workers will finally get some traction on wage increases, which would boost consumer spending. Or it could mean that our economy is overheating and the Fed will start to apply the brakes and raise interest rates. Metropolitan Rents in 2009

LOCAL OVERVIEW: We experience economic growth when firms in California move their branch locations to Portland. We are a modest priced market on the west coast. That’s our comparative advantage. We don’t have the same amenities as the Bay Area Metropolitan Rents in 2035 – culture, Source: US Census Bureau, Metro, PSU Center for Real Estate entertainment, weather, etc. – but at least we can offer lower rents and lower housing prices. Source: US Census Bureau

DEVELOPMENT TRENDS. It’s hard to keep track of all the new taxes, regulations, and crazy policies that have hit the industry in the last year. Unfortunately, current Metro plans call for our apartment rents to double in 20 years, in order to meet Metro’s densification plans. 29th Annual IREM® Forecast Breakfast

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If rents in other places rise by the inflation rate and our rents double, we will become as expensive as Los Angeles and San Francisco. Doubling our rents will shut down our engine of economic growth. We have a regional government, Metro, that is putting all of us on a starvation land diet, which is jacking up apartment rents and creating a lot of turmoil. Our metropolitan population has grown by 78% since 1980, yet our land supply has only grown by 10%. It’s as if we are still Metro Population Growth vs. Land Supply 1980-2016 Metro Population Growth vs Land Supply wearing the size 90% 1980-2016 eight shirt that 80% 70% our mother gave 60% 50% us to wear in jun40% ior high school. 30% 20% 10% 0%

Population

The legislature has allowed Portland to Anti-Real Estate Policies: implement inclusionary zoning, which threatens to Inclusionary Construction Zoning Excise Tax Tax end our apartment boom. We have a new construction excise tax. The Mayor decided to Comprehensive Infill Housing encourage homeless to camp out on our streets. Plan Downzone Downzone The City of Portland has engaged in two major downzoning efforts this year, removing a lot of Urban Renewal Affordable No UGB Housing Set Expansion the development bonuses in the code. The City’s Aside Design Review has created architect’s veto power over all development projects in the city, adding six months delay and thousands of dollars to each project. Rent Control Discourages Investment Tiny Oregon

Tina Kotek

RENT CONTROL

29th Annual IREM® Forecast Breakfast

Land Supply

Demolition Tax Proposal

Design Review Delays

Rent Control Proposal

And the Speaker of the House, Tina Kotek, has continued her three-year campaign to bring Californiastyle rent control to Oregon, which is a sure strategy for economic stagnation. The speaker’s “Tiny Oregon” plan is already causing developers to put apartment projects on hold, further exacerbating our housing supply shortage. The central problem of housing affordability is that we’re not producing enough housing. Page — 80 —


Lack of Suburban Construction Source: US Census Bureau

We are producing 20% fewer housing units today than we did in 1990 to 2007. The decline has been most severe in our suburbs where there is no land to build large subdivisions. The good news is that three of the seven Metro Councilors will be vacant in 2018. The industry needs to organize now to protect our interests. Portland

Housing Production Still Anemic Source: Four counties, 1990-2014, US Census Bureau

Marijuana: Last year, we sent a couple of my graduate students to Denver to learn about the impact of a legal marijuana industry.

Collapse of Homebuilding

That’s Carly and Synkai Harrison smiling for the camera. You can find their article on the Center’s website about how marijuana is impactApartment Boom ing our retail and industrial market. With the recent legalization of recreational marijuana in California, Massachusetts, and elsewhere, there will be great pressure on the Trump Administration to PSU Graduate Assistants Visiting Denver… institutionalize the US Department of Justice’s policy of non-interference, the so-called “Cole Memo”. We need policies to allow marijuana businesses to get banking services. I think we’re a long way from inter- State Marijuana Legislation state mariADULT USE juana sales. LEGALIZED The marijuana tourism market, which is a 50% of the market in Denver, won’t apply here. Overall, legalization of recreational marijuana has become a benefit for owners of class B retail and industrial space, and I ADULT USE think it’s good policy from a criminal justice and LEGALIZED public health perspective. 29th Annual IREM® Forecast Breakfast

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Lease Rates/Space: My specialty is housing, and apartment rents and housing prices are at Housing Production Still Anemic an all-time high. We’ve fully recovered Source: Four counties, 1990-2014, US Census Bureau from the great recession. However, even Collapse of Homebuilding if we’re homeowners, the high prices do us no good unless we leave the state and move to High-Density Means High Cost Rent Per Square Foot for New Projects Affordable Source: PSU Center for Real Estate Arizona or Apartment Apartments Apartment Found Here Florida. Boom $3.00 Rents on a $2.50 s q u a r e - $2.00 foot basis tend to be highest in the center of our $1.50 $1.00 metropolitan area, which is why we are seeing such $0.50 $much high-rise and mid-rise apartment construcHigh Rise Mid Rise Garden Apartments Apartments Apartments tion. The problem is that high-rise and mid-rise construction is the most expensive construction option, and its presence is a symptom of our lack of land and our lack of suburban construction. 2017 Forecast: 2017 will be a watershed year for the real

We’ve Recovered from the Housing Bust Case-Shiller Index, 2003-15

Case-Shiller Price Index Portland and 20-City Average 70% 60%

Portland

50% 40% 30% 20%

20-City Avg.

10%

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2003

2004

0% -10%

estate development industry in Oregon. We may have dodged a bullet with the defeat of Measure 97 last month, but as Mark Twain said, “No man's life, liberty, or property are safe while the legislature is in session.” We have legislators who want to treat real estate as a public utility. We have city councilors who think that new housing supply increases rents. We have environmental lawyers who haven’t found a subdivision they didn’t

want to file a lawsuit against. My forecast for 2017 is that the industry will organize and fight back. We have a lot of talent in our industry, and we need to recruit our industry leaders to take a sabbatical year of public service. Imagine if that was our representation at the City or Metro or the legislature…! All it takes is a little encouragement. You already have a head shot, which is the first step in a political campaign. 29th Annual IREM® Forecast Breakfast

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Community Leaders


29th Annual IREM® Forecast Breakfast

SPECIAL THANKS TO: Premium Sponsor: Vocalist: Sarah Haws Commercial Signage Consultant Fast Signs, Tigard, OR

Stage Furniture: NorthwestFurnitureOutlet.com

Stage Décor & Greenery:

Program Signage/Banners:

Advertising:

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29th Annual IREM® Forecast Breakfast RETAIL

Visit www.iremoregon.org for 2017 program, education and event information 29th Annual IREM® Forecast Breakfast

THANK YOU for joining us and best wishes for a prosperous 2017! Page — 84 —

29th Annual IREM Forecast Breakfast Transcript