menlo parc · 2019. 10. 8. · of november 2018, beaverton’s unemployment rate was 3.4%, below...

OFFERING MEMOR ANDUM41 Units • Beaverton, OregonMENLO PARC

www.hfore.com(503) 241.5541

INVESTMENT SUMMARY

All of the apartments are spacious townhomes averaging 1,216 sq ft, and the majority of the townhomes are two-bedrooms. Approximately 85% of the apartments have been renovated. Renovations include new cabinet fronts, paint, flooring, appliances, lighting, and doors. Common area updates include a newly positioned leasing office, refreshed landscaping, and updated fencing and life safety features in the pool area.

Menlo Parc is an attractive, low-density community conveniently located between Beaverton Town Square and Washington Square Mall. Some

Menlo Parc is a 41-unit townhome community in Beaverton, Oregon that has been renovating units on turnover. Renovations are achieving average rents of $1,423, or $1.16 per sq ft. Menlo Parc features generously sized townhomes with vaulted ceilings and gas fireplaces. Every unit features a full-size washer/dryer, front patios, backyards, and forced air furnaces with air conditioning—a rarity in the Portland metro area. The renovations resulted in an exceptional asset that benefits from an outstanding location in Beaverton.

of the metro area’s largest employers are found in Beaverton including Nike, Intel, and Columbia Sportwear. Major business centers and lifestyle services are easily accessible along SW Hall Boulevard and Highway 217. Menlo Parc residents attend strong schools found in Washington County.

Menlo Parc’s extensive renovations and unique townhome floor plans make it an exceptional asset. The property is expected to benefit from continued rent growth due to its strong, in-demand Beaverton location. Investors will find Menlo Parc a remarkable investment opportunity.

2 HFO INVESTMENT REAL ESTATE

EXECUTIVE SUMMARYCOMMUNITY CONVENIENCES

• Outdoor seasonal pool

• Landscaped grounds with mature trees

• Central location in Beaverton and in a strong school district

• Convenient location between Beaverton Town Center and Washington Square Mall

TOURS AND INQUIRIES Greg Frick • [email protected]

Rob Marton • [email protected]

Tyler Johnson • [email protected]

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

Please do not disturb tenants.

Brokers licensed in Oregon.

* Amenities found in select apartments.

90.2%2 Bedrooms

9.8%3 Bedrooms

ASSET SUMMARYProperty Menlo Parc

Location 5960 SW Menlo Drive

City, State Beaverton, OR 97005

County Washington

Year Built 1977 / Renovated 2018

Total Units 41

Approx NR Sq Ft 49,846 sq ft

Avg Unit Size 1,216 sq ft

Acreage 3.75 acres

Density 10.93 units per acre

PRICINGPrice $8,450,000

Per Unit $206,098

Per Sq Ft $170

Cap Rate 5.48%

UNIT MIX SUMMARYUnit Type Unit Count Avg Sq Ft Total Sq Ft % of Total Units2 Bedrooms 37 1,196 44,246 90.2%

3 Bedrooms 4 1,400 5,600 9.8%

Total / Averages 41 1,216 49,846 100%

APARTMENT HIGHLIGHTS

• Generously sized townhomes and apartments

• Gas fireplaces and vaulted ceilings *

• Quartz countertops and modern color schemes *

• Plentiful storage including kitchen pantries

• Full-size, in-unit washer/dryer

• Large front patios and backyards

3MENLO PARC • 41 UNITS • BEAVERTON, OR

Menlo Parc’s private drive and landscaped grounds make it an attractive asset. Its large townhome floor plans with vaulted ceilings and plentiful storage are unique in the neighborhood.


The majority of the apartments at Menlo Parc are spacious 2-bedroom floor plans. Each unit has a storage unit, front patios and backyard spaces. Large garages and carports are adjacent to the units.


Menlo Parc has a central leasing office adjacent to a seasonal, outdoor pool. The leasing office was recently renovated with new flooring, furnishings and a resident concierge station. The leasing office has a large attached space that could be converted to a fitness center or another unit.


1ST FLOOR 2ND FLOOR

FLOOR PLANS

2 Bedroom • 2 BathroomTOWNHOMES

1,380 Sq FtRenderings are intended only as a general

reference. Features, materials, finishes and layout of subject unit may be different than shown.


1ST FLOOR 2ND FLOOR

FLOOR PLANS

2 Bedroom • 1.5 BathroomTOWNHOMES




FLOOR PLANS

3 Bedroom • 2 BathroomAPARTMENT




The City of Beaverton (pop. 97,514) is a major economic hub in the Portland metro area, along with being Portland’s second-largest suburb and the fifth-largest city in Oregon. Over the past two decades, Beaverton has attracted numerous high-tech businesses, and is one of Oregon’s fastest-developing areas. Between 2010 and 2018, the city’s population increased by 8.6%.

For those looking for job prospects, few cities are likely to offer more opportunities than Beaverton, which is a 15-20 minute drive from downtown Portland. In 2015 and 2016, employment in Beaverton increased by 8.3%, faster than in all but a few dozen other U.S. cities. The national job growth rate over the same period was 3.5%. 24/7 Wall Street ranked Beaverton #1 on its list of Best Places to Live for 2018 for the above average health of its residents and for the city’s many employment opportunities.

Beaverton is a large, robust community that is home to major companies such as Nike Inc. and Columbia Sportswear. Several high-tech employers including Intel and Genentech are located along the Highway 26/Sunset Corridor, which includes nearby Hillsboro. The growing tech hub west of Portland includes more than 300 high-tech businesses who have made their home in what is called the “Silicon Forest.” As an increasing number of high skilled workers are drawn to the area, Beaverton rents have been increasing, and are forecast to continue this trend at a healthy pace. As of November 2018, Beaverton’s unemployment rate was 3.4%, below Oregon’s statewide average of 3.9%.

Nike is currently undergoing a major expansion rumored to cost approximately $1 billion. It plans to open the last—and largest—of four new buildings in 2019. Nearby Intel recently completed their R4 Building, a seven-story structure on its Ronler Acres complex in Hillsboro.

BEAVERTON SUBMARKET OVERVIEWLike the Portland metro area, Beaverton has experienced historically low vacancies, with a October 2018 vacancy rate of 3.5% reported by Multifamily NW. Housing options in Beaverton include many apartment complexes and urban-core condominiums near shops and MAX light-rail stations. Whether they are drawn to Beaverton for the schools, shopping or the outdoors, individuals and families will find a wide range of opportunities to fit their needs. With its stable, sustainable economy, Beaverton remains attractive and poised for future growth.

• 2018 All-America City Finalist

• 2018 Best Place to Live for 2018 (24/7 Wall Street)

• Best Places to Live (Money Magazine) 2016, 2017


Students at Menlo Parc attend Fir Grove Elementary School, Highland Park Middle School, and Southridge High School. Students at Fir Grove Elementary School outperform their statewide peers in English and Science, and Highland Park Middle School students outperform their peers in both English and Math.

STRONG BEAVERTON SCHOOL DISTRICT

HIGHLAND PARK MIDDLE SCHOOL

SOUTHRIDGE HIGH SCHOOL

less than 1 mile driving – 0.7 miles walkingWell above the state average of 84%

less than 3 mile driving 89% graduation rate, with 79% of students passing one or more AP exams.

English and Math scores are well above state averages, as are test scores for low income students.

96%

9/10Stellar

Rating

from GreatSchools


LIFESTYLE CONVENIENCES

Tanasbourne Town Center

Beaverton Town Square

Washington Square

5

40584

2178

10

210

99W

Menlo Parc

26Cedar Hills

Aloha

Raleigh Hills

Tigard Lake Oswego

Metzger

Hazeldale

West Haven-Sylvan

Somerset West

SOUTHWEST PORTLAND

ORENCO STATION

TANASBOURNE

DOWNTOWN PORTLAND

CEDAR MILL


Menlo Parc

26

217

10

8Tualatin Hills Nature Park

Providence St Vincent

Medical Center

Beaverton High School


Hillsboro High School

Aloha High School

Sunset High School

Sunset High School

Southridge High School

Washington Square

Red Tail Golf Center


Orenco Station

Hillsboro Airport

BEAVERTON

HILLSBORO

BEAVERTON

Walker Rd

Baseline Rd

Cornell Rd

SW Hall Blvd

Murray Blvd

River Rd

Johnson St

Brookwood Pkwy

Cornelius Pass Rd

Farmington

St

185th Ave

170th Ave

2295th Ave

Cedar Hills Crossing

Employee Store

LIFESTYLE CONVENIENCES AND EMPLOYERS


217

8

8

1010

SW Allen Blvd

SW Beaverton Hillsdale Hwy

Tualatin Hills Nature Park

Providence St Vincent Medical Center

Peterkort Towne Square

Jesuit High SchoolBeaverton

High School

CEDAR HILLS

Walker Elementary

School


Beaverton TC WES Station

SW Canyon RdSW Tualatin Valley Hwy

SW Millikan Way

SW Walker Rd

Company Store

Cedar Hills Crossing

LIFESTYLE CONVENIENCES AND EMPLOYERS

Menlo Parc

26


APARTMENT MARKETThe Portland Metro Area consistently ranks among the nation’s lowest for apartment vacancy rates according to the U.S. Census Bureau and other third-party services like REIS, MPF Research, and Axiometrics. The U.S. Census Bureau pegged Portland’s Q3 2018 vacancy rate at 4.5% and the U.S. average at 7.1%.

REIS forecast 2018 Portland metro year-over-year rents growth at 3.0% and the Multifamily NW Apartment Report survey proved average October 2017-18 year-over-year rent growth at 3.3%.

SKILLED WORKFORCE & STRONG EMPLOYMENTIn a 2018 WalletHub report comparing 150 of the largest U.S. metros, Portland is listed as the 15th most educated city in America. More than half of Multnomah County workers have a college degree, well ahead of the national average of 38.5%.

According to the State of Oregon’s Employment Department, Portland enjoys one of the fastest job growth rates in the Pacific Northwest, and the entire nation. Data indicates the area added 31,000 jobs in 2016, 28,000 jobs in 2017, and 29,000 in 2018.

TOP 10 LISTS

Portland consistently receives glowing reviews and rankings from the media.

2019 lists include: • #4 Best City for an Active Lifestyle (Wallethub)• #7 Healthiest Cities to Live (Thrillist.com)• #7 Best Cheap Destinations in the U.S. (U.S.

News and World Report)

• # 8 Best Place to Live in the U.S. (U.S. News and World Report)

• #8 Fittest Cities in America (CBS News)• #9 Best Foodie Cities in the USA (U.S. News and

World Report)

2018 lists include: • #1 Restaurant City of the Year (Bon Appetit)• #1 Best Foodie City in America (Wallethub &

Travelpulse) #6 (Jetsetter)• #3 Healthiest City in the U.S. (Active.com) • #3 Best Place for Business and Careers (Forbes)• #4 Best City for Biking (Fast Company)• #9 Top City for Entrepreneurs and Start-Ups

(Business.org) #23 (CNBC)

• #10 Greenest City in America (Newsweek)• #10 Most Entrepreneurial State (Amazon.com)• #15 Most Educated City in America (Wallethub)

DIVERSIFIED ECONOMYPortland is home to the headquarters of Fortune 500 companies Nike and Lithia Motors. Fortune 1000 companies headquartered here include Columbia Sportswear, Greenbrier Cos. and Portland General Electric. Fortune 500 companies based outside Oregon with major operations here are Precision Castparts and Intel.

Tech and software companies continue to relocate their operations here or open major outposts in Portland. These companies enjoy Portland’s educated workforce, affordable high quality of life, and a low cost of doing business compared to the Bay Area.

Companies which have opened major branches in Portland include Airbnb, Google, Squarespace, Mozilla, Simple, Survey Monkey, SalesForce and New Relic, Inc. Portland’s tech startup companies include Viewpoint, Jama Software, Thetus, Urban Airship, Acquia, Elemental Technologies, Act-On, Puppet Labs, and The Clymb.

PORTLAND REGIONOregon’s largest city, Portland, is near the confluence of the Willamette and Columbia Rivers. The Portland Metro Area consists of four counties: Multnomah, Washington, Clackamas, and Clark County, Washington.

PORTLAND METRO SNAPSHOT


GOVERNMENTThe U.S. Federal Government is Portland metro’s overall largest employer, with 20,500 workers. The State of Oregon gives employment to an additional 14,000 residents.

HIGH TECH & CHIP MANUFACTURINGAttracted by the Portland area’s educated workforce and relative low cost of doing business, tech companies continue moving to Portland—opening major branches and, in some cases, relocating to the area entirely.

With over 19,300 employees, Intel is the area’s largest private employer. Intel acquired its first Portland location in 1974. The company is currently expanding its presence with forthcoming D1X microprocessor chip facilities at the Ronler Acres Campus in Hillsboro. This is part of a five-year, $6 billion expansion, and is part of the company’s long-term plans for growth. Intel is the largest property taxpayer in Washington County, with payments of approximately $30 million a year.

Other notable Portland-area high-tech companies include ON Semiconductor and Tektronix.

SPORTSWEARNike has its world headquarters in Beaverton and employs 12,000 Portland-area residents. The company designs, develops and manufactures footwear, apparel, equipment and accessories. From here, Nike orchestrates production and design for one of the world’s most recognizable brands. In 2019 Nike will complete a $1 billion expansion of its Washington County campus.

Nike’s two key competitors have a major local presence as well. Those employers include the North American headquarters of Adidas with 1,200 employees, and a new 70,000 SF outpost of Under Armour. Under Armour has moved 100 employees into an iconic former YMCA.

HEALTHCARE AND RESEARCHHealth services are another major employment sector for the Portland area. The top healthcare employers in the area are Providence Health Systems, with 17,543 employees, and The Oregon Health Sciences University (OHSU), with 16,200 workers. OHSU is the recent recipient of a total of $1 billion in donations for cancer research from over 10,000 Oregon donors. Grants from the National Institutes of Health totaled $182.7 million in 2016.

MANUFACTURINGIn trucking and transportation, Daimler Trucks—with nearly 3,000 area workers—has big plans for the Portland area. The company recently spent $150 million renovating its Portland facility and invests heavily in research and development, including autonomous driving.

PORTLAND MARKET SNAPSHOTMAJOR EMPLOYERS


PORTLAND MARKET SNAPSHOTPORTLAND METRO AREA The Portland Metro Area is one of the strongest apartment markets in the nation, as reflected in strong year-over-year rent growth and consistently tight vacancy. The area’s strong job market and high quality of life continues to attract new residents; approximately 65 people move here per day. New apartment construction has not caught up to the housing demand created by in-migration.

4.95% Metro-area vacancy

#2 for Oregon in Migration

in US

7.7% Year-over-year rent growth**

$68,125 Median household

income

3.7% Unemployment rate

(November 2018)

48.2% Portland residents age 25+ years (with a bachelor’s degree or higher)

21,345 New Portland residents

(2016-2018)

38.3% Metro area renter-

occupied housing rate

4,474 Portland residents

per square mile


TOP AREA EMPLOYERS

20,000 area employees 10,269 area employees 12,000 area employees

12,955 area employees


5,200 Oregon employees

Intel is the area’s largest private employer. Recently, following a five year, $6 billion expansion, the company unveiled vast, long-term plans for future growth.

Kaiser has 35 medical facilities, 18 dental offices and 1,400 doctors in the Pacific Northwest. It employs more than 10,000 in the Portland metro region and serves 11.8 million members nationally. Kaiser is headquartered in Oakland, California.

In April of 2016, Nike announced a $1 billion expansion of its Beaverton world headquarters. The company is adding 1.3 million square feet of office space and parking for 3,300 vehicles. Construction on the final parts of this expansion will wrap up in 2019.

Legacy is a locally-owned nonprofit based in Portland, Oregon. It is the only health system covering the Portland/Vancouver area south to Salem with multiple hospitals and a hospital dedicated to exclusively serving children.

With nearly 50,000 students, Portland Public Schools is Oregon’s largest district. Portland is currently in the midst of a massive voter-approved high school and middle school reconstruction and modernization program.

In 2017 voters approved $790 million in taxes to rebuild one middle school and three high schools. The bond was in addition to a $480 million bond in 2012 for a similar program.

Fred Meyer offers one-stop shopping at 133 multi-department stores in four western states.

17,543 area employeesProvidence is a non-profit network of hospitals, health plans, physicians, clinics and related services. It operates in Alaska, Washington, Oregon, Montana and California. It was originally founded by the Sisters of Providence in Montreal Quebec in 1843.


Oregon Health Sciences University (OHSU) leads the way in government-funded healthcare — and secures numerous grants for the advancement of health sciences. OHSU recently acquired a $1 billion gift for cancer research.

Grants from the National Institutes of Health have held steady from around $184 million in 2011 to $219 million in 2017. This infuses the economy with jobs and income from outside the Portland MSA.


Among the influx of companies to the Portland metropolitan area—including many who have transplanted their world, North American or U.S. headquarters here—are Adidas, Daimler Trucks, KinderCare and Keen.

Other significant companied in the close-in Portland metro area include Umpqua Holdings, Weiden+Kennedy, NW Natural, PacifiCorp, PGE, New Seasons, Storables, McMenamins, McCormick & Schmick’s, Franz Bakery, Portland Brewing, Powell’s Books, ZGF Architects, and two major West Coast law firms: Stoel Rives and Schwabe, Williamson & Wyatt.

Full time employment increased 1.8% between March 2018 – March2019, an increase of 21,800 positions. Following is a list of net job growth by industry March 2018–2019:

According to the State of Oregon Employment Department, the Portland Metro region created jobs at the rate of 1.6% in 2018. Portland ranks 16th among the 50 largest metropolitan areas in the United States.

JOB GROWTH BY INDUSTRYMSA PORTLAND

2,800 Construction, Mining, Logging

3,200Trade, Transportation & Utilities

Leisure & Hospitality

4,500 Manufacturing

2,000

2,500

Healthcare & Social Assistance

6,100Education & Health Services


RENT COMPARABLESMENLO PARC • 41 UNITS • BEAVERTON, OR

Tualatin Hills Nature Park

Washington Park

SW Hall Blvd

NW Cornell Rd

SW Jenkins Rd

Walker Rd

SW Murray Blvd

SW 175th Ave

SW 185th Ave

SW Denney Rd

SW Beaverton Hillsdale Hwy

26Willow Creek

The Huntley

Bel-Aire Court ApartmentsThe Habitat

Icon at Beaverton

Willow Creek

Lineage at Willow Creek

Properties

Menlo Parc5960 SW Menlo DriveBeaverton, ORBel-Aire Court Apartments121145 SW Why Worry LaneBeaverton, ORHallwood7535 SW Hall BoulevardBeaverton, ORIcon at Beaverton14620-14630 SW Farmington RoadBeaverton, ORLineage at Willow Creek18380 NW Heritage ParkwayBeaverton, ORThe Habitat5745 SW Oleson RoadPortland, ORThe Huntley12310 SW Center StreetBeaverton, ORWillow Creek901-999 SW 185th AvenueHillsboro, OR



Washington Square

5

217

8

10

210 99W

Menlo Parc

Cedar Hills

Tigard Lake Oswego

PORTLAND


RENT COMPARABLESMENLO PARC • 41 UNITS • BEAVERTON, OR

1

MENLO PARC5960 SW Menlo Drive, Beaverton, ORTotal Units: 41 Avg SF: 1,216Year Built: 1977 Avg Rent: $1,470

Avg Rent/SF: $1.21

LINEAGE AT WILLOW CREEK18380 NW Heritage Parkway, Beaverton, ORTotal Units: 121 Avg SF: 881Year Built: 1978 Avg Rent: $1,559

Avg Rent/SF: $1.77

S

Unit type Units Sq Ft Rent Rent/Sq Ft2 BED / 2 BATH 9 1,382 $1,495 $1.08

2 BED / 1.5 BATH 28 1,136 $1,425 $1.25

3 BED / 2 BATH 4 1,400 $1,725 $1.23

Average 41 1216 $1,470 $1.21

Unit type Units Sq Ft Rent Rent/Sq Ft1 BED / 1 BATH 8 696 $1,211 $1.74

2 BED / 1 BATH 99 880 $1,537 $1.75

3 BED / 1 BATH 14 992 $1,916 $1.93

Average 121 881 $1,559 $1.77


RENT COMPARABLES

2

WILLOW CREEK901-999 SW 185th Avenue, Hillsboro, ORTotal Units: 77 Avg SF: 985Year Built: 1990 Avg Rent: $1,450

Avg Rent/SF: $1.47

3

THE HUNTLEY12310 SW Center Street, Beaverton, ORTotal Units: 61 Avg SF: 907Year Built: 1972 Avg Rent: $1,515

Avg Rent/SF: $1.67


Average 77 985 $1,450 $1.47

MENLO PARC • 41 UNITS • BEAVERTON, OR


2 BED / 1 BATH 20 973 $1,495 $1.54

3 BED / 2 BATH 15 1,100 $1,750 $1.59

Average 61 907 $1,515 $1.67


RENT COMPARABLES

5

BEL-AIRE COURT APARTMENTS121145 SW Why Worry Lane, Beaverton, ORTotal Units: 68 Avg SF: 900Year Built: 1959 Avg Rent: $1,400

Avg Rent/SF: $1.56


2 BED / 1 BATH 34 877 $1,239 $1.41

Average 56 773 $1,204 $1.56


3 BED / 1 BATH 26 1,000 $1,500 $1.50

Average 68 900 $1,400 $1.56

ICON AT BEAVERTON14620-14630 SW Farmington Road, Beaverton, ORTotal Units: 56 Avg SF: 773Year Built: 1968 Avg Rent: $1,204

Avg Rent/SF: $1.56

4



RENT COMPARABLES

6

THE HABITAT5745 SW Oleson Road , Portland , ORTotal Units: 85 Avg SF: 781Year Built: 1978 Avg Rent: $1,345

Avg Rent/SF: $1.72

7

HALLWOOD7535 SW Hall Boulevard, Beaverton, ORTotal Units: 126 Avg SF: 867Year Built: 1985 Avg Rent: $1,408

Avg Rent/SF: $1.62

Unit type Units Sq Ft Rent Rent/Sq FtSTUDIO 3 412 $1,150 $2.79

1 BED / 1 BATH 32 669 $1,199 $1.79

2 BED / 1 BATH 50 876 $1,450 $1.66

Average 85 781 $1,345 $1.72


2 BED / 1 BATH 44 914 $1,459 $1.60

2 BED / 1 BATH 50 876 $1,450 $1.66

Average 126 867 $1,408 $1.62



PROJECTED OPERATIONSIncome Current Scheduled Rents Projected Operations NotePotential Gross Market Rent $697,140 $17,003 $723,060 $17,636 1

Less: Loss to Lease -$8,100 -$198 -1.2% $0 $0 0.0%

Scheduled Gross Rent $689,040 $16,806 $723,060 $17,636 Less: Vacancy/Credit Loss -$34,452 -$840 -5.0% -$36,153 -$882 -5.0% 2

Net Rental Income $654,588 $15,966 $686,907 $16,754 Other Income $63,287 $1,544 $82,328 $2,008 3

Includes: Parking (Garage) $9,880 $241 $18,810 $459 Includes: Utility Billing (RUBs) $34,206 $834 69.5% $44,316 $1,081 90.0% Includes: Miscellaneous $19,202 $468 $19,202 $468

Gross Operating Income $717,875 $17,509 $769,235 $18,762 Expenses Projected Operations Per Unit % GOI Projected Operations Per Unit % GOI

Real Estate Taxes $57,569 $1,404 8.0% $57,569 $1,404 7.5% 4Insurance $11,275 $275 1.6% $11,275 $275 1.5% 5Total Utilities $59,957 $1,462 8.4% $59,957 $1,462 7.8% 6Administrative $9,673 $236 1.3% $9,673 $236 1.3% Advertising $7,179 $175 1.0% $7,179 $175 0.9% Fee Management $25,126 $613 3.5% $26,923 $657 3.5% 7On-site Payroll $34,358 $838 4.8% $34,358 $838 4.5% Contracted Services $10,200 $249 1.4% $10,200 $249 1.3% Maintenance/Repairs $23,739 $579 3.3% $23,739 $579 3.1% 8Turnover $5,125 $125 0.7% $5,125 $125 0.7% 9Reserves $10,250 $250 1.4% $10,250 $250 1.3% 10

Total Expenses -$254,451 -$256,248 Expenses per Unit -$6,206 -$6,250% of Gross Operating Income 35.4% 33.3%

Net Operating Income (NOI) $463,425 $512,986

PROJECTED OPERATIONSMENLO PARC • 41 UNITS • BEAVERTON, OR


OPERATIONS ANALYSISThe following projections are based on June 2019 T9 operations and current scheduled rents.

1. RENTS Approximately 85% of the apartments at Menlo Parc have been renovated. Renovated rents average $1,423 per unit, or $1.16 per sq ft. The rent comparables indicate Menlo Parc, and its large townhome units could increase rents. Completing renovations on the remaining six (6) units and bringing rents to levels in line with the rent comparables further increases rents by 4.7%.

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 in the Portland metro area. The historical vacancy was above market due to interior renovations and updates to the property.

3. OTHER INCOME Menlo Parc Apartments generated $60,051 in Other Income based on the previous 9 months annualized operations. The Other Income includes administrative fees, garage income, and utility income. The projected operations have been adjusted as follows.

• RUBs. Menlo Parc increased water, sewer, and garbage collections to a rate of $75 per unit per month. The current trailing 3-month collections (July), total $34,206, or $70 per unit per month and projected operations include this amount. Increasing collections to 90% of total utility costs increases collections to $44,316, or $90 per month.

• Garages and Carports. Parking generated $9,880 for trailing 9-month annualized operations. The projected operations assume this income.


Renovation Summary Classic Renovated TotalTotal 6 35 41

% Of Total 14.6% 85.4% 100.0%

Avg Unit Size 1,136 1,229 1,216

Avg Rent $1,270 $1,423 $1,400

Avg Rent per Sq Ft $1.12 $1.16 $1.15

Difference $0.04

Sq Ft % Diff 3.42%


OPERATIONS ANALYSISHISTORICAL INCOME TRENDS

$58,000

$57,000

$54,000

90.0%

86.0%

82.0%

78.0%

74.0%

92.0%

88.0%

84.0%

80.0%

76.0%

$55,000

$56,000

$53,000

$52,000

72.0%$51,000

94.0%

Sche

dule

d Re

nt

Occu

panc

y

Dec 2018 Jan 2019Nov 2018Oct 2018 Apr 2019Feb 2019 May 2019Mar 2019 Jun 2019

Scheduled Rent Occupancy



-12.00%

-8.00%

-6.00%

-10.00%

-4.00%

-2.00%

0.00%

-14.00%

Vaca

ncy

RENT TRENDS

Scheduled RentsJune 2019 T6-Months Annualized

June 2019 T3-Months Annualized

June 2019 T9-Months Annualized

$1,310

$1,410

$1,400

$1,390

$1,380

$1,370

$1,360

$1,340

$1,350

$1,330

$1,320

Aver

age L

ease

Ren

t

$1,343

$1,353

$1,377

$1,398

OPERATIONS ANALYSIS

Scheduled Rent Vacancy



1,136 Sq Ft 1,382 Sq Ft 1,400 Sq Ft

Sche

dule

d Re

nt

Average Rent Maximum RentMinimum Rent

$1,050

$1,150

$1,250

$1,350

$1,750

$1,650

$1,450

$1,550

RENT VARIATION BY UNIT PLAN

OPERATIONS ANALYSIS

Current Rents * 1,136 sq ft 1,382 sq ft 1,400 sq ft$1,195 1

$1,250 1

$1,262 1

$1,300 3

$1,312 1

$1,325 7

$1,350 1

$1,375 2

$1,395 8

$1,416 1

$1,425 1

$1,430 1

$1,450 6

$1,465 1

$1,475 1

$1,485 1

$1,575 1

$1,605 1

$1,695 2

Total * 28 9 4

* Occupied units and pending move-ins.



OPERATIONS ANALYSIS

RENT ROLL ANALYSIS: MARKET RENTS

Unit Type Unit Count Square Feet Average Scheduled RentAverage Scheduled

Rent per Sq FtAverage Market

RentAverage Market

Rent per Sq Ft % Change

2 Bedroom / 1.5 Bathroom Classic 6 1,136 $1,270 $1.12 $1,425 $1.25 10.9%

2 Bedroom / 1.5 Bathroom Renovated 22 1,136 $1,368 $1.20 $1,425 $1.25 4.0%

2 Bedroom / 2 Bathroom Renovated 9 1,382 $1,458 $1.06 $1,495 $1.08 2.5%

3 Bedroom / 2 Bathroom Renovated 4 1,400 $1,643 $1.17 $1,725 $1.23 4.8%

Totals / Averages 41 1,216 $1,400 $1.15 $1,470 $1.21 4.7%

RENT ROLL ANALYSIS: SCHEDULED RENTS

Unit Type Unit Count Square Feet Lowest Achieved RentHighest Achieved

Rent % DiffAverage Scheduled

RentAverage Scheduled

Rent per Sq Ft

2 Bedroom / 1.5 Bathroom Classic 6 1,136 $1,195 $1,312 9.8% $1,270 $1.12

2 Bedroom / 1.5 Bathroom Renovated 22 1,136 $1,300 $1,430 10.0% $1,368 $1.20

2 Bedroom / 2 Bathroom Renovated 9 1,382 $1,450 $1,485 2.4% $1,458 $1.06

3 Bedroom / 2 Bathroom Renovated 4 1,400 $1,575 $1,695 7.6% $1,643 $1.17

Totals / Averages 41 1,216 $1,344 $1,451 7.5% $1,400 $1.15



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 were published October 15. Projected operations include current taxes for the 2018-2019 property tax year.

Menlo Parc Apartments’ taxes increased 3.74% over 2017-2018. In Oregon, property taxes are not reassessed on sale and are limited to a 3.0% annual increase at the state level. Property taxes paid by November 1 each year receive a 3.0% discount. Oregon’s tax years starts July 1 and anticipation of the pending tax year; net property taxes are used in the projected operations.

5. INSURANCE The historical operations include earthquake insurance and policy coverage applicable to the current ownership. The property insurance has been adjusted to a market-rate of $11,275, or $275 per unit.

6. UTILITIES The utility expenses were adjusted for additional garbage costs that may be associated with the renovations and additional work taking place at the property.

7. MANAGEMENT FEE The historical management fee for Menlo Parc Apartments averaged 4.8% of GOI for the April 2019 T9 operations annualized and includes costs applicable to the current ownership. The projected operations were adjusted to reflect a market rate fee of 3.5% of GOI to manage a property similar in size to Menlo Parc Apartments.

8. REPAIR & MAINTENANCE (R&M)

R&M has been adjusted for assumed additional costs as a result of the renovation and stabilization of Menlo Parc Apartments over the previous year.

OPERATIONS ANALYSISTAX HISTORYTax Year

2017/2018 2018/2019Account #

R136613 $55,418 $57,569

Total $55,418 $57,569

% Change 3.74%



9. TURNOVER Turnover has been adjusted upward to reflect costs for make-ready process. The historical turnover costs are below market average, and it is assumed many expenses typical to turnover have been capitalized as the property is renovated.

10. 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, a total of $10,250 annually.

OPERATIONS ANALYSISTurnover Costs ProjectedTotal Units 41

% of units 30%

Expected Turnovers 12

Annual Turnover Cost $5,125

Cost per Turnover $417

Per Unit Turnover Cost $125



OFFER TERMS

QUESTIONS & TOUR REQUESTS:

Please do not disturb tenants.

All tours and inquiries regarding Menlo Parc are to be directed to HFO Investment Real Estate at (503) 241.5541.

Greg Frick • [email protected]

Rob Marton • [email protected]

Tyler Johnson • [email protected]

Jack Stephens • [email protected]

Lee Fehrenbacher • [email protected]

Todd Tully • [email protected]

Adam Smith • [email protected]

Khari Gates • [email protected]

Rand Hoffman • [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.

PRICE SUMMARYPrice $8,450,000

Per Unit $206,098

Per Sq Ft $170

Cap Rate 5.48%

Avg Square Foot 1,216 sq ft

Avg Current Rent $1,398

Avg Current Rent per Sq Ft $1.15

ASSET SUMMARYProperty Menlo Parc

Location 5960 SW Menlo Drive

City, State Beaverton OR 97005

County Washington

Year Built 1977 / Renovated 2018

Total Units 41

Approx NR Sq Ft 49,846 sq ft

Avg Unit Size 1,216 sq ft

Acreage 3.75 acres



HFO Investment Real Estate

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

Passion • Collaboration • Specialization

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.

menlo parc · 2019. 10. 8. · of november 2018, beaverton’s unemployment rate was 3.4%, below...

Documents