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COLLIERS INTERNATIONAL P. 1FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM
OFFERING MEMORANDUM
FIRST PACIFIC CORP. BUILDING5121 SKYLINE VILLAGE LOOP S | SALEM, OREGON
C L A S S A O FF I C E I N V EST M E N T
COLLIERS INTERNATIONAL P. 2FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM
FIRST PACIFIC CORP. BUILDING5121 SKYLINE VILLAGE LOOP S | SALEM, OREGONCONTACTS
CHRIS JOHNSON
503 542 5884
MARYKAY WEST
503 542 5885
BRAD CHRISTIANSEN
503 499 0054
First Pacifi c Corp. Building
Kaiser Permanente Skyline The Doctors’ Clinic
Building
EXECUTIVE SUMMARY PAGE 4
PROPERTY PROFILE PAGE 6
TENANT PROFILE PAGE 10
LOCATION OVERVIEW PAGE 12
MARKET OVERVIEW PAGE 14
INVESTMENT ANALYSIS PAGE 22
Table of Contents
Kuebler BlvdKuebler BlvdSk
yline
Rd S
Skyli
ne R
d S
NORTH
2.2 Miles to I-5
COLLIERS INTERNATIONAL P. 4FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 4
EXECUTIVE SUMMARYColliers International is off ering the uniquely attractive opportunity to purchase the First Pacifi c Corporation Building, located in Salem, Oregon with easy access to I-5. Built in 2003, the four-story building is 62,916 square feet on 2.23 acres. The property is located in South Salem, approximately ten minutes south of the Central Business District, the Oregon State Capital building and Willamette University.
Primary access to the Skyline neighborhood is via I-5, which extends north/south just west of the property. Kaiser Permanente Skyline Medical Offi ce is located directly across Skyline Road from the property and The Doctors Clinic Building is located directly North of the property. Major east-west arterials are Kuebler Boulevard and Mission Street Southeast/Highway 22. The property has excellent freeway access and linkages to the rest of the Salem metro area.
NAME: First Pacifi c Corp. BuildingADDRESS: 5121 Skyline Village Loop S
Salem, Oregon 97306PARCEL NUMBER(S): R91047
NET RENTABLE AREA: 45,574 SF (plus 14,218 SF below grade parking garage)NUMBER OF FLOORS: 4 storiesZONING: CO (Commercial Offi ce)YEAR BUILT: 2003PARKING: 3.5/1,000
FIRST PACIFIC CORP. BUILDING5121 SKYLINE VILLAGE LOOP S | SALEM, OREGON
COLLIERS INTERNATIONAL P. 5FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 5
This off ering provides investors with a solid Class A structure, with income in place and the potential for signifi cant upside given replacement cost is nearly 150% of the asset value today.
Located just 2.2 miles from I-5, the First Pacifi c Corp. Building is well-positioned amongst complimentary surrounding properties such as the Kaiser Permanente Skyline Medical Offi ce and The Doctors’ Clinic, schools and signifi cant high-quality residential development.
The neighborhood has superior demographics for the Salem metro region, including over 23,355 households earning a median income of $59,095 within a 3 mile radius.
INVESTMENT HIGHLIGHTS
2016 population within a 3-mile radius
Median owner occupied housing value within a 3-mile radius
2.2 miles to I-5 and 4 miles
south of the Central Business
District
Exceptional visibility on the corner of Skyline Rd S and Kuebler Blvd. Across from Kaiser Permanente adjacent to The Doctors Clinic,and near Sprague High School.
$233,381
Dem
ogra
phic
s
56,507
ExviscoRdBlvfroPead
62,916 SF
offi ce building
on 2.23
acres (97,139
SF) zoned
Commercial
Offi ce with a
parking ratio of
3.5/1,000.
COLLIERS INTERNATIONAL P. 6FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 6
CONSTRUCTION Concrete foundation. Brick veneer exterior walls with a steel frame construction.
EXTERIOR
DOORS
Main entrance has storefront glass double doors encased in metal, with a vestibule and second set of double doors beyond. Two roll-up dock-high doors (approx. 9’ clear height). Additional employee entrances, which are a combination of storefront glass in a metal frame and metal in a metal frame. Access to upper level terraces via storefront glass doors in metal frames. Below-grade parking garage has electronic fence rolling doors.
ROOFOriginal fl at roof with rolled rubber membrane. Estimated 25-year lifespan. Fiberglass skylight panels allow additional light and provide a decorative architectural detail.
HVACTrane-brand heat pump with supplemental boiler system. Two self-contained units with a voltage regulator. Open plenum return system and supplemental water-based cooling system.
FLOOR
COVERINGS
Ceramic tiles with a ceramic base in the main reception area, restrooms, and elevator hallways. Vinyl squares with rubber base in the mail room, employee cafeteria, 4th fl oor break room, and janitorial closets. Commercial carpet with wood/rubber base in remaining areas.
First fl oor tenant suite is in shell condition with concrete fl ooring. Loading room with dock-high doors has concrete fl ooring. Exterior terraces have four-inch poured concrete decks with corrugated panels underneath.
CEILINGSuspended t-drop acoustic panels. Painted and textured drywall soffi t details in the lobby, with fi berglass skylights on the 4th fl oor.
FIRST PACIFIC CORP. BUILDING5121 SKYLINE VILLAGE LOOP S | SALEM, OREGON
COLLIERS INTERNATIONAL P. 7FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 7
INTERIOR
LIGHTING
Fluorescent box fi xtures, with ceiling-mounted suspended fl uorescent tube fi xtures in some areas. Recessed can and hanging pendant fi xtures in the lobby and around the ocular balcony on the 4th fl oor.
PLUMBING
Two restrooms on each fl oor. Gym has two restrooms, each with a shower. Two drinking fountains in the elevator hallways of each fl oor and another set of drinking fountains in the gym. Employee cafeteria is equipped with one sink and one dishwasher; employee breakrooms on the 2nd and 4th fl oors also each have sinks.
ELEVATOR Three, ThyssenKrupp brand, fi ve-stop hydraulic elevators.
LIFE SAFETY Fully equipped with fi re sprinkler protection. Security system with cameras installed at the 1st fl oor entrance points.
LANDSCAPING
Asphalt-paved parking lot, concrete curbing, small monument sign, and parking lot pole lighting. Several evergreen and deciduous trees, native shrubbery, grass, and bark dusting. Fenced enclosure included as part of the cell tower lease on the north side of the site.
PARKINGParking lot is striped to accommodate 136 vehicles, and the parking garage is striped to accommodate 30 vehicles, for a total of 165 vehicles. Parking ratio of 3.35/1,000 SF.
COLLIERS INTERNATIONAL P. 8FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 8
FIRST FLOOR
FIRST PACIFIC CORP. BUILDING5121 SKYLINE VILLAGE LOOP S | SALEM, OREGON
COLLIERS INTERNATIONAL P. 9FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 9
SECOND FLOOR
COLLIERS INTERNATIONAL P. 10FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 10
THIRD FLOOR
FIRST PACIFIC CORP. BUILDING5121 SKYLINE VILLAGE LOOP S | SALEM, OREGON
COLLIERS INTERNATIONAL P. 11FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 11
FOURTH FLOOR
COLLIERS INTERNATIONAL P. 12FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 12
TENANT PROFILE
First Pacifi c Corporation
Founded in 1961, and headquartered in Salem, Oregon, First Pacifi c Corporation (FPC) is a recognized leader in the Dental Services Industry. FPC provides business solutions to help dentists improve cash fl ow, expedite patient and insurance billings and collections, and extend credit to dental patients. FPC also off ers custom software and hardware, practice management software, as well as security backup solutions and services. In addition, FPC manages operations in dental offi ce production, and off ers practice development expertise with over fi fty years of data for key business decisions for a wide variety of dental practices.
Tenant First Pacifi c CorporationPremises 41,100 SFLease Term 7/1/2003 - 6/30/2022In-place rent/year/s.f. $16.56 NNNWebsite www.fi rstpac.com
FIRST PACIFIC CORP. BUILDING5121 SKYLINE VILLAGE LOOP S | SALEM, OREGON
COLLIERS INTERNATIONAL P. 13FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 13
MID-WILLAMETTE VALLEY Salem is the third largest city in Oregon and is the state capital. It is located in the center of the Willamette Valley alongside the Willamette River, which runs north through the city. The river forms the boundary between Marion and Polk counties.
The city is home to Willamette University, Corban University, and Chemeketa Community College. The State of Oregon is the largest public employer in the city, and Salem Health is the largest private employer. Transportation includes public transit from Salem-Keizer Transit, Amtrak service, and non-commercial air travel at McNary Field. Major roads include Interstate 5, Oregon Route 99E, and Oregon Route 22, which connects West Salem across the Willamette River via the Marion Street and Center Street bridges.OREGON STATE CAPITAL BUILDING
FIRST PACIFIC CORP. BUILDING5121 SKYLINE VILLAGE LOOP S | SALEM, OREGON
Private Businesses: 11,137
Private Sector Employment: 123,684
Total Population: 390,738
City of Salem Population: 160,690
Median Home Price: $201,300
Avg. Annual Wage: $40,675
Cost of Living: $0.5% above national average
Unemployment Rate: 5.5%
COLLIERS INTERNATIONAL P. 14FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 14
LABOR COST IS
15%LOWER THAN PORTLAND, BIGGER GAP COMPARED TO OTHER WEST COAST
MARKETS
9TH LOWESTWORKERS COMP RATE
IN THE U.S.
NO LOCAL BUSINESS
LICENSE FEESNO SALES TAX, NO
INVENTORY TAX
STABLE, AFFORDABLE
UNTILITIES
TOP SALEM EMPLOYERS
LOW COST OF DOING BUSINESSFORBES MAGAZINE RANKS THE SALEM, OREGON MSA AS
LOWEST IN COST OF DOING BUSINESS IN THE U.S.#3
COLLIERS INTERNATIONAL P. 15FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 15
#1Named the “food and drink capital of
America” - The Telegraph (2016)
#2Nationally in High-Tech GDP
Concentration
#3on ULI’s Overall Real Estate Markets to Watch in 2017
#8“World’s best cities for Millennials” -
Matador Network (2016)
TOP 10U.S. Destinations for Solo Travel -
FlipKey (2016)
#1 Moving Destination
of all US states
95,000 +
Tech Employees
#1 Airport in the
Nation
Average commute
time of 24.2 minutes
45.5% with a Bachelor’s
Degree or Higher
COLLIERS INTERNATIONAL P. 16FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 16
TECH JOBS ADDED
BETWEEN 2010 - 2014
COMPANIES WHO REPORTED
BUSINESS IS HEALTHY
COMPANIES WHO PLAN TO
EXPAND IN THE NEXT 2 YEARS
5,000 89.9% 29.9%
5% Other
8% Trade & Transportation
11% Management & Support Services
14% Finance & Real Estate
16% Entertainment & Service
19% Education, Health & Public Services
26% Tech & Information
EMPLOYMENT BY INDUSTRY
METROPOLITAN EMPLOYMENT GROWTHThe Brookings Institutes’s January 2017 Metro Monitor composite index ranks the 100 largest MSA’s across job growth, unemployment, gross product range and home prices. Portland ranked 30th for overall growth and also compares favorably to other top metropolitan areas.
6th in net inbound population growth (Allied Van Lines 2016).
7th in employment rate with a 8.1% increase over the past fi ve years.
8th in average wage with a 8.5% increase over the past fi ve years.
14th in jobs at young fi rms with a 15.3% increase over the past fi ve years.
28th in jobs with a 13% increase over the past fi ve years.
UNEMPLOYMENT RATE
4.3%
COLLIERS INTERNATIONAL P. 17FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 17
FIRST PACIFIC CORP. BUILDING 5121 SKYLINE VILLAGE LOOP S | SALEM, OREGON
PROJECT NAME ADDRESS RSF % LEASED SALE PRICE CAP RATE SALE DATE
MISSION STREET BUILDING 885 Mission St. SE 10,473 100% $3,200,000 ($302.55 PSF) - Apr-17
MEDICAL ARTS BUILDING 691 Murphy Rd, Medford 45,066 100% $13,500,000 ($299.56 PSF) - Aug-16
SILVERTON HEALTH MOB 693 Ray J. Glatt Cir., Woodburn 22,550 - $7,750,000 ($343.68 PSF) 7.00% May-16
KINGS CROSSING MEDICAL 2211 NW Kings Blvd, Corvallis 11,746 46% $3,400,000 ($289.46 PSF) - Sep-15
CANDALARIA CROSSING 2725-2755 Commercial St. SE 22,024 $5,740,000 ($260.62 PSF) Jun-15
BEND MEMORIAL CLINIC 1501 NE Medical Center Dr, Bend
105,000 $34,611,520 ($330 PSF) 6.00% May-15
HEMATOLOGY ONCOLOGY ASSOC.
2828 E Barnett Rd, Medford 22,501 100% $9,250,000 ($411 PSF) - Apr-15
STEVEN’S MEDICAL CENTER 12100 SE Stevens Rd, Portland 19,630 91% $6,850,000 ($348.96 PSF) 8.00% Apr-15
UNIVERSITY MEDICAL PLAZA 14508 NE 20th Ave, Vancouver 22,500 - $5,150,000 ($228.89 PSF) - Feb-15
NORTHERN STAR 14201 NE 20th Ave, Vancouver 37,564 91% $7,300,000 ($194.34 PSF) 6.02% Jan-15
OFFICE SALE COMPS
COLLIERS INTERNATIONAL P. 18FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 18
LEASE COMP SUMMARY
TENANT/PROPERTY SF LEASED DATE RENT TERM TIs
Medical Offi ce1007 Harlow Rd, Springfi eld
2,500 12/20/2016 $27.84 FSG - -
St. Charles Outpatient 61250 SE Coombs Place, Bend
19,344 12/1/2016 $25.86 MG 240 months -
Medical Tenant10 Coburg Rd, Eugene
4,944 11/28/2016 $29.40 MG 36 months $0.00
Medical Tenant2771-2779 NW 9th St, Corvallis
2,500 8/1/2016 $23.40 MG 18 months -
Medical Tenant7150 SW Dartmonth St, Tigard
8,300 9/1/2015 $27.50 NNN 120 months $50.00
VA Medical Clinic (GSA)21600 NE Halsey, Portland
27,615 7/1/2015 $34.32 NNN 240 months $0.00
Therapeutic Associates2200 NE Neff Rd, Bend
8,549 2/1/2015 $25.20 NNN 120 months $10.00
Salem Clinic2531 Boone Rd SE, Salem
19,234 2014 $20.56 NNN 120 months $30.00
COLLIERS INTERNATIONAL P. 19FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 19
FIRST PACIFIC CORP. BUILDING5121 SKYLINE VILLAGE LOOP S | SALEM, OREGON
Please address your off ers to the brokers listed below.
851 S.W. Sixth Ave., Suite 1200Portland, Oregon 97204503.223.3123
CHRIS JOHSNON
503 542 5884
PORTLAND, OREGON
MARYKAY WEST
503 542 5885
PORTLAND, OREGON
Off ering Procedure
The off ering of the property is being conducted exclusively by Colliers International. All questions and inquiries should be directed to the Colliers representatives listed in this memorandum.
Colliers will be available to assist prospective investors with their review of the off ering. On-site inspections of the property and tours of the market area can be arranged directly with Colliers.
Off ers should include, at a minimum, the following:• The purchase price and closing date;• The source of capital, both equity and debt, for the transaction;• The amount of earnest money deposit;• A detailed schedule of the due diligence and requisite approval process; and• A description of assumptions utilized for the off er.
BRAD CHRISTIANSEN
503 499 0054
PORTLAND, OREGON
COLLIERS INTERNATIONAL P. 20FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 20
CONFIDENTIALITY & DISCLAIMER STATEMENT
This Off ering Memorandum contains select information pertaining to the business and aff airs of the Property. It has been prepared by Colliers International. This Off ering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Off ering Memorandum is confi -dential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Colliers International. The material is based in part upon information supplied by the Seller and in part upon fi nancial informa-tion obtained by Colliers International from sources it deems reliable. Owner, nor their offi cers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness or this Off ering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.
By acknowledging your receipt of this Off ering Memorandum from Colliers, you agree:
1) The Off ering Memorandum and its contents are confi dential;
2) You will hold it and treat it in the strictest of confi dence; and
3) You will not, directly or indirectly, disclose or permit anyone else to disclose this Off ering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.
Owner and Colliers International expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or off ers to purchase the Property and to terminate discussions with any person or entity reviewing this Off ering Memorandum or making an off er to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.
If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Off ering Memorandum.
A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchas-er have any other claims against Seller or Colliers International or any of their affi liates or any of their respective offi cers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.
This Off ering Memorandum shall not be deemed to represent the state of aff airs of the Property or constitute an indication that there has been no change in the state of aff airs of the Property since the date this Off ering Memorandum.
COLLIERS INTERNATIONAL P. 21FIRST PACIFIC CORP. BUILDING | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 21
CHRIS JOHNSON
503 542 5884
PORTLAND, OREGON
MARYKAY WEST
503 542 5885
PORTLAND, OREGON
851 S.W. Sixth Ave., Suite 1200Portland, Oregon 97204503.223.3123
BRAD CHRISTIANSEN
503 499 0054
PORTLAND, OREGON