42 units • lebanon, oregon€¦ · lebanon has a population of 16,878. this area has experienced...

42 Units • Lebanon, OregonCOUNTRYSIDE MANOR DUPLEXES

OFFERING MEMOR ANDUM

INVESTMENT SUMMARY

The Countryside Manor Duplexes is a 42-unit duplex portfolio. The property features a combination of attached-wall row homes and duplex flats. All the homes have attached, direct-entry garages and washer/dryer hookups. The living spaces are large with generously sized bedrooms, many of which look out onto an open green space. Each unit is a home and residents are responsible for all utilities

The Countryside Manor Duplexes benefit from a strategic location in the town of Lebanon. Cascades Elementary is two blocks away and Main Street is just 0.5 miles away. The city of Lebanon offers small town living with the conveniences of Corvallis and Albany to the west. All of the Countryside Manor Duplexes are two-bedroom, one-bathroom units and rents currently average $941 per unit, or $1.11 per sq ft. Current average rents are 3.2% higher than the February 2019 TTM averages.

2 HFO INVESTMENT REAL ESTATE

PROPERTY HIGHLIGHTS

• Private homes

• Some newer roofs

• Washer/dryer hookups

• Attached, direct-entry garage with every unit

• Large bedrooms and open kitchens

• All utilities paid by residents

EXECUTIVE SUMMARYASSET SUMMARYProperty Countryside Manor Duplexes

Location 2634 S 7th Street

City, State Lebanon, OR 97355

County Linn

Total Units 42

Year Built 1980

Approximate Sq Ft 35,636

Average Unit Sq Ft 848

PRICINGPrice $4,800,000

Per Unit $114,286

Per Sq Ft $135

Cap Rate 6.34%

TOURS AND INQUIRIES Rob Marton • [email protected]

Greg Frick • [email protected]

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

Please do not disturb tenants.

DETAILED UNIT MIX

Unit Type Unit Count Square Feet Apprx. NR Sq Ft % of Total Units Average Scheduled Rent

Average Scheduled Rent per Sq Ft

2 Bedroom / 1 Bathroom Duplex 30 800 24,000 71.4% $890 $1.11

2 Bedroom / 1 Bathroom Row Home 10 960 9,600 23.8% $1,061 $1.11

2 Bedroom / 1 Bathroom Duplex 2 1,018 2,036 4.8% $1,100 $1.08

Totals / Averages 42 848 35,636 4.5% $941 $1.11

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Parties who receive this information from unauthorized parties shall not be recognized. ©2019 HFO Investment Real Estate LLC. Build your legacy is a service mark of HFO Investment Real Estate. Licensed in the states of Oregon and Washington.

3COUNTRYSIDE MANOR DUPLEXES • 42 UNITS • LEBANON, OR

EXECUTIVE SUMMARY

Walker Rd

S 7th St

S 8th St

S 9th St

S 10th St

Acorn StCOUNTRYSIDE


Linn County (population 125,047) is home to the cities of Albany and Lebanon, and is located on the I-5 corridor just east of Corvallis. The population of Albany was 53,303 as of 2017, while the smaller city of Lebanon has a population of 16,878. This area has experienced strong population growth over the last several years. Since 2010, Linn County’s population has grown by 7.2%, while Albany has grown by 6.7% and Lebanon has grown by 8.8%. Over 40% of households in Albany and Lebanon rent their homes.

Between September 2017 and 2018, Linn County saw 3.13% increase in private sector employment. The number of Mining and Logging industry jobs grew by 16.7%, while Construction industry jobs increased by 10.3% and Education and health services jobs increased by 9.8%. As of September 2018, the unemployment rate in the Albany MSA was 4.3%.

Linn County is locally known for its family friendly festivals and celebrations. Events in the area include the Northwest Championship Sheep Dog Trials, the Mud Fest, the Lebanon Strawberry Festival, and the Harrisburg Museum Quilt Show, Craft Fair, and Tractor Show. These events offer residents the chance to show their civic pride and teach newcomers about their local history. The area’s proximity to the Cascade Mountains provides a natural outdoor playground for residents and visitors alike. Outdoor enthusiasts can boat, fish, ski, snow-shoe, or bike in local parks, trails, and scenic areas.

The city of Lebanon is located near the intersection of US Highway 20 and State Highway 34, and is home to both the Samaritan Lebanon Community Hospital and the COMP-Northwest medical school. COMP, or the College of Osteopathic Medicine of the Pacific-Northwest, operates under the umbrella of COMP Pomona, which was founded in 1977 as part of the Western University of Health Sciences. The Lebanon campus opened in 2011. Over 400 students are enrolled at the Lebanon campus, and fewer than 40% of the current first year students are from Oregon.

LINN COUNTY MARKET SNAPSHOTALBANY MAJOR EMPLOYERSCompany Industry # of EmployeesATI Metals Manufacturing 1,600

Linn Benton Community College Education 1,050

Greater Albany Public Schools Education 1,035

Samaritan Health Services Health Care 1,030

Linn County Government 700

Selmet Manufacturing 505

Target Distribution Center Retail Distribution 500

City of Albany Government 402

OFD Foods Food Production 400

Assurant Solutions Call Center 300

Arauco Wood Products 216

National Frozen Foods Food Production 210

Golden West Manufacturing 185

Coastal Farm & Ranch Retail 125Source: https://www.albanychamber.com/employment/

LEBANON MAJOR EMPLOYERSCompany Industry # of EmployeesLowes Retail Distribution Center Retail Distribution 650

Samaritan Lebanon Community Hospital Health Care 604

Lebanon Schools Education 484

Wal-Mart Retail 350

ENTEK Manufacturing Manufacturing 310Source: https://www.ci.lebanon.or.us/sites/default/files/fileattachments/economic_development/page/318/fact_sheetjan2016.pdf


Countryside

Walker Dr

Vaughan Dr

Airport Dr

Berlin Rd

Franklin St

Oak St

Brewster RdCorvallis-Lebanon Hwy 210

Denny School Rd

Stoltz

Hill R

d

Cheadle Park

Lebanon High School

Seven Oak Middle School Lebanon Fire District - Station 34

Lebanon School District

Lebanon State Airport

34

20

LIFESTYLE CONVENIENCES

Regional Distribution Center

South Santiam River

Lebanon Public Library

Boys & Girls Clubs of the Greater Santiam


OPERATIONS ANALYSISIncome February 2019 TTM Current Scheduled Rent Note

Scheduled Gross Rent $459,190 $474,253 $11,292 1Less: Vacancy/Credit Loss $0 0.0% ($23,713) ($565) -5.0% 2

Less: Concessions -$2,395 -0.5% ($2,371) ($56) -0.5% 2

Less: Bad Debt/Recovery -$9,852 -2.1% $0 $0 0.0% 2

Net Rental Income $446,944 $448,169 $10,671 3Other Income $38,130 $38,130 $908

Includes: Lease Termination $4,223 $4,223 $101

Includes: Late/NSF $5,805 $5,805 $138

Gross Operating Income $485,073 $486,299 $11,579

Expenses February 2019 TTM % GOI Projected Operations Per Unit % GOI

Real Estate Taxes $60,706 12.5% $60,426 $1,439 12.4% 4

Insurance $1,287 0.3% $4,596 $109 0.9% 5

Total Utilities $5,315 1.1% $5,315 $127 1.1%

Administrative $8,223 1.7% $8,223 $196 1.7% 6

Fee Management $14,111 2.9% $15,805 $376 3.3% 7

On-site Payroll $31,631 6.5% $31,631 $753 6.5% 8

Landscaping $19,492 4.0% $19,492 $464 4.0%

Maintenance/Repairs $20,619 4.3% $20,619 $491 4.2%

Turnover $0 0.0% $5,250 $125 1.1% 9

Reserves $10,500 2.2% $10,500 $250 2.2% 10

Total Expenses ($171,885) ($181,857)

Expenses per Unit ($4,092) ($4,330)

% of Gross Operating Income 35.4% 37.4%

Net Operating Income (NOI) $313,189 $304,442


OPERATIONS ANALYSIS1. RENTS Countryside Manor Duplexes’ current rents

average $941 per unit, or $1.11 per sq ft which average 3.2% higher than February 2019 TTM average rents of $911 per unit, or $1.07 per sq ft. The increase in rents is due, in part, to 14 new leases signed in 2018 of which rents averaged $932 per unit, or $1.10 per sq ft. The Countryside Manor Duplexes have proven rents can been further increased.

2. VACANCY/CREDIT LOSS, CONCESSIONS, AND BAD DEBT

Operations have been adjusted for a 5.0% vacancy rate based on lender underwriting requirements. Lenders consider the long-term nature of a property and the market in which it is located. Lenders typically underwrite to 5.0% vacancy. The historical operations for the Countryside Manor Duplexes do not include vacancy; however, based on turnover, of which there were 14 new leases signed in 2018, it indicates the asset has experienced some vacancy. In addition to vacancy, the projected operations include 0.5% economic loss for concessions and bad debt.

3. OTHER INCOME The Countryside Manor Duplexes’ Other Income includes charges for damages and cleaning, pet rent, administrative fees, late charges, and lease termination fees. The other income is based on February 2019 TTM operations.

Current Rents 800 sq ft 960 sq ft 1,018 sq ft Total

$875 9 9

$895 17 17

$900 3 3

$920 1 1

$1,050 5 5

$1,075 4 1 5

$1,125 1 1

Total 30 9 2 41

* Occupied units only.


OPERATIONS ANALYSISRENT ROLL ANALYSIS: SCHEDULED RENTS

Unit Type Unit Count Square Feet Lowest Achieved Rent

Highest Achieved Rent % Diff Average Scheduled

RentAverage Scheduled

Rent per Sq Ft

2 Bedroom / 1 Bathroom Duplex 30 800 $875 $920 5.1% $890 $1.11

2 Bedroom / 1 Bathroom Row home 10 960 $1,050 $1,075 2.4% $1,061 $1.11

2 Bedroom / 1 Bathroom Duplex 2 1,018 $1,075 $1,125 4.7% $1,100 $1.08

Totals / Averages 42 848 $1,000 $1,040 4.1% $941 $1.11

RENT TRENDS

Scheduled RentsFebruary 2019 T6-Months Annualized

February 2019 T3-Months Annualized

February 2019 TTM

$905

$900

$895

$915

$910

$945

$940

$935

$930

$925

$920

Aver

age L

ease

Ren

t

$911

$924$926

$941


OPERATIONS ANALYSISEXPENSESExpenses are based on February 2019 Trailing 12-month (TTM) operations. Unless otherwise noted, actual operations used in the analysis.

4. PROPERTY TAXES Oregon’s property taxes are evaluated on a fiscal year starting July 1. Property tax values for the 2018-2019 tax year are published October 15. Projected operations include current taxes for the 2018-2019 property tax year.

Property tax values for the 2018-2019 tax year were published October 15. The Countryside Manor Duplexes’ taxes increased 4.08% over 2017-2018. Oregon property taxes are not reassessed on sale and are limited to a 3.0% annual increase at the state level. Property taxes paid prior to November 1 each year receive a 3.0% discount. Projected operations utilize totals that include this 3% discount. Each duplex is on a separate tax lot, but the row homes are on one tax lot for a total of 19 tax lots.

5. INSURANCE Property insurance has been adjusted to annual market rate values.

6. FEE MANAGEMENT Projected operations have been adjusted for a management fee of 3.25% of GOI, which is reflective of typical management costs for assets in the Mid-Willamette Valley.

7. PAYROLL The Countryside Manor Duplexes are managed with other properties. A roving manager is responsible for leasing and oversight. Payroll assumes the asset will include some professional oversight.

8. TURNOVER Based on the move-in dates, The Countryside Manor Duplexes have had 14 units turned through December 2018 for an average turnover rate of 33%. The operations have been adjusted for market-rate turnover costs.

11. RESERVES Lenders require reserves be set aside to address future capital costs associated with any property as it ages. The projected operations include reserves of $250 per unit.


QUESTIONS & TOUR REQUESTS: All tours and inquiries regarding Countryside Manor Duplexes are to be directed to HFO Investment Real Estate at (503) 241.5541.

Rob Marton • [email protected]

Greg Frick • [email protected]

Jack Stephens • [email protected]

Tyson Cross • [email protected]

Lee Fehrenbacher • [email protected]

Todd Tully • [email protected]

Adam Smith • [email protected]

Khari Gates • [email protected]

Investment Real Estate 2424 SE 11th AvenuePortland, Oregon 97214

www.hfore.com(503) 241.5541Fax: (503) 241.5548

Brokers licensed in the States of Oregon and Washington.

Please do not disturb the residents.

OFFER TERMSASSET SUMMARYProperty Countryside Manor Duplexes

Location 2634 S 7th StreetLebanon, OR 97355

County Linn

Total Units 42

Year Built 1980

Approximate Sq Ft 35,636

Average Unit Sq Ft 848

PRICINGPrice $4,800,000

Per Unit $114,286

Per Sq Ft $135

Cap Rate 6.34%


HFO Investment Real Estate

2424 SE 11th Avenue • Portland, OR 97214www.hfore.com • 503.241.5541

Passion • Collaboration • Specialization

42 units • lebanon, oregon€¦ · lebanon has a population of 16,878. this area has experienced...

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