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STROHECKER – REDEVELOPMENT OPPORTUNITY2855 SW Patton Road - Portland, Oregon 97201
Offering Memorandum
N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E
Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to
be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other
person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to
provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of
interest in the subject property. The information contained herein is not a substitute for a thorough due diligence
investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with
respect to the income or expenses for the subject property, the future projected financial performance of the
property, the size and square footage of the property and improvements, the presence or absence of contaminating
substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the
improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or
intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure
has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not
verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding
these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the
information provided. All potential buyers must take appropriate measures to verify all of the information set forth
herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2016
Marcus & Millichap. All rights reserved.
Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in
this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply
affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or
subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for
the purpose of providing tenant lessee information about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
STROHECKER'S - LAND
Portland, OR
ACT ID Y0210008
TABLE OF CONTENTS
SECTION
INVESTMENT OVERVIEW 01Offering Summary
History
Zoning Charts
Aerial
Regional Map
Local Map
MARKET OVERVIEW 02Market Analysis
Demographic Analysis
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INVESTMENT
OVERVIEW
STROHECKER - REDEVELOPMENT OPPORTUNITY
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OFFERING SUMMARY
Rare opportunity to acquire a site in Portland's exclusive West Hills neighborhood
Suburb location in high income demographic area – average household income
$155,557 in 1-mile radius
SW Patton serves as alternative connector route between Downtown and the
suburbs to the west.
INVESTMENT HIGHLIGHTS
Marcus & Millichap has been selected to exclusively market for sale the Strohecker's site in the Southwest Hills of Portland. The 1.14 acre site is located within the
Portland Heights neighborhood, one of the two neighborhoods that make up Southwest Hills. Southwest Hills sits above Downtown Portland and is known for its stately
homes and is one of the oldest and most exclusive neighborhoods in Portland thanks to its views and closeness to downtown.
The site is well known as the former location of Strohecker's Grocery, which occupied the site from 1902 until it closed in early 2016. As a full-service retailer, offering a
grocer, pharmacy, post office and extensive selection of wine in a wine cellar, the site had a reputation as a convenient all purpose destination. With the Average
Household Income in the 1 mile radius being over $155,000, and the upscale neighborhood being accustomed to a higher end retailer in that location, a Buyer can
monopolize on the tradition of a the neighborhood having its own convenient, dedicated shopping district.
The zoning parameters for the site are CN2, Neighborhood Commercial, with an added stipulation from a 1984 Ordinance to the Comprehensive Plan Map for the City of
Portland, that changed the zoning from single family to commercial and also required the use of the site to be restricted to a grocery store. A new Type III Comp Plan and
Zoning Map Amendment would need to be approved to establish a different zone or one free of the original conditions. Based on our conversations with the interested
parties in the neighborhood, a development that incorporates a grocer as a component among several uses would likely be acceptable opening up the possibility of
alternative development concepts.
INVESTMENT OVERVIEW
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HISTORY
STROHECKER’S LAND
Strohecker’s: A West Hills Staple for 114 Years
Opened in 1902
Included a Liquor Store, Post Office, Bakery, Café and Pharmacy
Served the West Hills as the Only Walkable Commercial Destination
Neighbors Portland Heights Park
Sold to Lamb’s Thriftway in 1996 and Bales Thriftway in 2012
Closed on January 30th 2016
“ After Gottlieb Strohecker, the store was run by Armand and Martha Strohecker. Longtime neighbors recall Armand handing out candy to neighborhood kids and sweeping the back parking lot. The family business passed next to Wes, Wayne and John Strohecker. Customers could enter a back room near the butcher to make phone calls on rotary phones; they charged their groceries by signing their name to a charge account. Kids roamed free until they were grounded for unauthorized charges on the family account.
Wayne Strohecker, who died in 2012, built a reputation for stocking fine wines and fancy cheeses long before this was common practice among Portland’s grocery stores. “
–Michael Bancud Portland Tribune
Family History
STROHECKER - REDEVELOPMENT OPPORTUNITY
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EXECUTIVE SUMMARYOFFERING SUMMARY
DEMOGRAPHICS
1-Mile
2015 Estimate Pop 9,504
2010 Census Pop 8,941
2015 Estimate HH 4,388
2010 Census HH 4,109
Median HH Income $92,375
Per Capita Income $71,779
Average HH Income $155,234
OFFERING
Location 2855 SW Patton Road, Portland ,Oregon 97201
Price Unpriced
Lot Size SF 49,658
Existing Building SF 30,532
APN 1S1E08AA 13200
Year Built / Renovated 1986Zoning CN2 – Neighborhood Commercial **
Max Allowable F.A.R. 1.5:1 – 2.5:1
Max Allowable Height 30 feet
** Ordinance No. 155609Ordinance passed by City Council February 16, 1984 amended the Comprehensive Plan Map for the site to Local Commercial and changing the zoning to C3 under the primary condition that use of the site be restricted to a grocery store. (See next pages for zoning charts)
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STROHECKER - REDEVELOPMENT OPPORTUNITY
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DEMOGRAPHICS
1-Mile
2015 Estimate Pop 9,504
2010 Census Pop 8,941
2015 Estimate HH 4,388
2010 Census HH 4,109
Median HH Income $92,375
Per Capita Income $71,779
Average HH Income $155,234
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ZONING CHARTS
STROHECKER - REDEVELOPMENT OPPORTUNITY
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DEMOGRAPHICS
1-Mile
2015 Estimate Pop 9,504
2010 Census Pop 8,941
2015 Estimate HH 4,388
2010 Census HH 4,109
Median HH Income $92,375
Per Capita Income $71,779
Average HH Income $155,234
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ZONING CHARTS
AERIAL
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REGIONAL MAP
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LOCAL MAP
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MARKET
OVERVIEW
MARKET OVERVIEW
STROHECKER - REDEVELOPMENT OPPORTUNITY
Portland-Vancouver-Hillsboro Metro
Market Highlights
High population growth
The Portland-Vancouver metro has recorded more than 20 years of positive net migration.
Expanding alternative energy industry
Alternative-energy companies are locating within the region.
Low business costs
The cost of doing business is among the lowest on the West Coast, supported by no state
income tax in Washington and no sales tax in Oregon.
PORTLAND-VANCOUVER
The Portland-Vancouver metro is located near the confluence of the Columbia and
Willamette rivers, and stretches across the Oregon border into Washington state. Mount
Hood and the Cascade Range stand to the east, and the Oregon Coast Mountain Range lies
to the west. The metro is situated at the northern end of the Willamette Valley. A long
growing season and mild temperatures foster a diverse field of agricultural products.
Geography
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MARKET OVERVIEW
The metro’s economy has shifted from timber to industries that include athletic
and outdoor activities, clean tech, advanced manufacturing and software. Lower
land costs, a skilled labor pool and affordable, abundant power attract
companies to the region. The favorable tax structure, with no state income taxes
in Washington and no sales tax in Oregon, lure businesses to the metro.
Near-term growth in clean technology and alternative energy companies such as
Vestas Wind, SolarWorld and Iberdrola Renewables will continue to draw
employees from outside the region, as well as help retain workers. Nike is a
leader in the growing athletic and outdoor industry. The company continues to
expand its footprint and hiring in the metro. The metro supports more than 700
athletic and outdoor industry firms. Advanced manufacturing firms employ tens of
thousands of workers in the region at companies such as Oregon Iron Works,
Daimler and PCC Structurals. Intel and IBM are significant employers in the
software industry, which comprises nearly 1,400 companies.
Medical research is also expanding in the metro, headed by Oregon Health and
Sciences University (OHSU). OHSU is a world-renowned leader in biomedical
research, studying a number of disorders, including neurodegenerative diseases,
stress, genetic disorders and clinical nutrition.
Economy
* Forecast
Sources: Marcus & Millichap Research Services; BEA; Moody's
Analytics; U.S. Census Bureau; Experian
PORTLAND-VANCOUVER
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MARKET OVERVIEW
Top employers in the Portland-Vancouver metro fall within a wide range of industries, from universities and healthcare to financial institutions. The high-tech and alternative
energy sectors continue to expand with the help of many smaller and startup firms.
Intel employs more workers in the region than in any other market in the world. The company has six campuses in the area and more than 17,000 employees in Oregon. Its
recent capital investment includes a new multibillion-dollar fabrication plant for research and development. Intel’s largest site is in Hillsboro, home to its most advanced
research and production fabrication facilities, which it is expanding.
Boeing continues to grow its massive Gresham manufacturing site, which now employs more than 1,800 residents. Further expansions are planned and underway to
enlarge the facility, which will bring new jobs to the metro. Elsewhere, expansions at the Oregon Health and Sciences University have increased research funds and
employment at that institution.
Area hospitals also are growing in anticipation of greater demand from an increasing population base and aging baby boomers. PeaceHealth Southwest Washington
Medical Center, Providence Health & Services, Legacy Health System and Adventist Health all have built, or are in process of constructing, new buildings. Additionally,
Vancouver Clinic, one of the leading healthcare providers in Clark County, has enlarged its facilities.
Employers
Major Employers
Intel Corp.
Providence Health & Services
Oregon Health and Sciences University
Portland State University
Kaiser Foundation Health Plan of the NW
Legacy Health System
Nike, Inc.
Wells Fargo
Fred Meyer Stores
U.S. Bank
* Forecast
Sources: Marcus & Millichap Research Services; BLS; Moody's
Analytics; Experian
PORTLAND-VANCOUVER
STROHECKER - REDEVELOPMENT OPPORTUNITY
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MARKET OVERVIEW
The pace of population growth in the Portland-Vancouver metro will slow to 1.1 percent annually through the next five years, slightly lower than the average pace since
2000. Net migration accounted for most of the gain in recent years. The region’s population is forecast to surpass 2.4 million inhabitants in five years.
Among the working-age population, 20- to 24-year-olds account for about 146,300 of metro residents. Growth in this cohort will provide companies with a young and
diverse labor pool. Portland-Vancouver workers are more educated than the U.S. average, with 33.6 percent possessing a bachelor’s degree, compared with just 28.6
percent nationally.
Higher education levels correlate with increased incomes. The median household income in the metro has risen drastically since 2000 to $62,200 per year. This high
income level reflects the growing high-tech industry and improving education level.
Higher incomes have allowed more than 60 percent of residents to own homes. The median home price in Portland, at $286,400, is more affordable than many other
Western U.S. cities. Over the next five years, household income is expected to outpace rising home prices, making homeownership attainable for more residents.
Demographics
PORTLAND-VANCOUVER
* Forecast
Sources: Marcus & Millichap Research Services; AGS; Experian;
Moody's Analytics; U.S. Census Bureau
STROHECKER - REDEVELOPMENT OPPORTUNITY
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MARKET OVERVIEW
2016 Retail Forecast
Construction: Developers will remain
active in Portland, delivering 500,000
square feet of retail space this year. The
Southeast submarket is forecast to
receive more than 45 percent of new
deliveries. In the previous year, 742,000
square feet was completed.
Vacancy: After rising 10 basis points theprevious year, vacancy will fall 60 basispoints in 2016 to 4.1 percent as netabsorption reaches more than 1.0 millionsquare feet of retail space. Submarketsnear the core will continue to maintainlower-than-average vacancy rates.
Rents: Tightening operations and strongmarket fundamentals will push theaverage asking rent up 3.4 percent thisyear to $18.09 per square foot. In 2015,the average asking rent lifted 2.3percent.
Employment: Following a 37,000
increase in jobs last year, employers will
boost the employment base by 2.7
percent in 2016, creating 30,000
positions.
STROHECKER - REDEVELOPMENT OPPORTUNITY
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PORTLAND METRO AREA
Strong Demographics Lure Buyers North to Portland
Rising household incomes benefit retail sales as vacancy tightens. A steady increase in
population growth, attributed to a number of California residents moving to the metro seeking a
lower cost of living, and advancing median incomes have boosted retail sales in Portland. The
metro’s population has risen nearly 1.2 percent over the last four quarters while the median
household income climbed approximately 2.5 percent. These drivers have contributed to a steady
increase in retail sales, edging up demand for retail space. However, deliveries will moderate this
year, keeping the vacancy rate below the replacement threshold. These tight conditions could
ease in the quarters ahead as more than 1.2 million square feet of retail space is working through
the planning pipeline. Builders will primarily focus on the Southeast submarket in 2016 but plan to
deliver additional space in Clark and Yamhill counties within the next two years. This includes a
411,000-square-foot project proposed within Yamhill County. This development, named
McMinnville Plaza, is expected to be completed in 2018 and will house a variety of retailers. As
space remains limited in the metro, asking rents will further rise, reaching the fastest year-end
growth rate this cycle.
Healthy demographics and strong operations pique investor interest in Portland. Many retail
buyers are flocking to the metro primarily focusing on assets in the urban core or, if listings are
limited, well-located suburban properties. This includes out-of-state investors seeking relatively
higher returns than are available in their local markets. The majority of these buyers are from other
West Coast metros, where retail assets can trade with cap rates 150 basis points less than in
Portland. Single-tenant properties are highly sought after, changing hands with average cap rates
in the low-6 percent range. Assets with nationally known tenants, such as Wendy’s and IHOP, will
trade in the low- to high-5 percent span. Additionally, interest in multi-tenant properties grew as
transaction velocity increased. Cap rates for these assets remained in the low-7 percent range,
with properties in the Southeast submarket and within Clark County trading in the mid- to high-6
percent area.
increase
in total
employment
500,000
2.7%
sq. ft.
will be
completed
basis point
decrease in
vacancy
60
3.4%
increase
in asking
rents
MARKET OVERVIEW
Economy
Construction
* Forecast
Sources: Marcus & Millichap Research Services; CoStar Group, Inc.
* Forecast
Sources: Marcus & Millichap Research Services; Bureau of Labor
Statistics; Economy.com
STROHECKER - REDEVELOPMENT OPPORTUNITY
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PORTLAND METRO AREA
In the last 12 months, employers hired 29,700 new workers, expanding payrolls 2.7 percent. This pushed the
metrowide unemployment rate down 100 basis points during this time to 4.3 percent. In the prior year, more
than 34,000 jobs were added.
Nearly all sectors across Portland registered job growth over the last four quarters. The largest percentage
employment gain was posted in the information sector at 6.6 percent with 1,600 jobs. The education and
health services sector created the greatest number of positions, hiring nearly 6,400 workers after rising 4.0
percent during the same time period.
During the year ending in the second quarter, average retail sales climbed 3.2 percent. In the previous annual
period, retail sales jumped 5.4 percent.
Outlook: In 2016, Portland employers are forecast to hire 30,000 workers, expanding the employment base by
2.7 percent. During the prior year, nearly 37,000 jobs were created.
In the last four quarters ending at midyear, builders completed 600,000 square feet of retail space.
Approximately 44 percent of these deliveries were located within Clark County. In the prior annual period,
more than 958,000 square feet of retail space was added to inventory.
As vacancy for retail space remains relatively low across Portland, developers have around 1.2 million square
feet under proposal with potential completion dates through 2018. More than half of this space is expected to
be delivered in the Yamhill County and Clark County submarkets.
One of the largest projects under construction is a 143,000-square-foot Fred Meyer supermarket. The
development, forecast for completion this year, will be located in the city of Happy Valley within the Southeast
submarket.
Outlook: After completing 742,000 square feet of space in 2015, builders are forecast to deliver 500,000
square feet of retail space this year. More than 45 percent of this new space will be located in the Southeast
submarket.
PROPERTY NAME
MARKETING TEAM
STROHECKER - REDEVELOPMENT OPPORTUNITY
DEMOGRAPHICS
Source: © 2016 Experian
Created on February 2017
POPULATION 1 Miles 3 Miles 5 Miles
2020 Projection
Total Population 9,603 131,036 383,686
2015 Estimate
Total Population 9,504 124,329 371,046
2010 Census
Total Population 8,941 115,253 344,436
2000 Census
Total Population 8,345 98,640 314,016
Current Daytime Population
2015 Estimate 20,973 306,100 586,775
HOUSEHOLDS 1 Miles 3 Miles 5 Miles
2020 Projection
Total Households 4,428 70,702 181,286
2015 Estimate
Total Households 4,388 66,362 173,940
Average (Mean) Household Size 2.11 1.78 2.06
2010 Census
Total Households 4,109 60,969 160,327
2000 Census
Total Households 3,836 51,741 144,572
Occupied Units
2020 Projection 4,428 70,702 181,286
2015 Estimate 4,536 70,418 179,729
HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles
2015 Estimate
$150,000 or More 22.61% 11.19% 10.21%
$100,000 - $149,000 16.77% 13.24% 15.18%
$75,000 - $99,999 11.24% 11.81% 12.91%
$50,000 - $74,999 12.90% 14.07% 16.43%
$35,000 - $49,999 6.40% 10.49% 11.43%
Under $35,000 22.79% 35.74% 30.74%
Average Household Income $155,234 $92,739 $90,861
Median Household Income $92,375 $56,235 $61,907
Per Capita Income $71,779 $50,263 $43,071
HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 Miles
Total Average Household Retail Expenditure
$78,738 $66,540 $69,305
Consumer Expenditure Top 10 Categories
Housing $21,246 $18,375 $18,958
Transportation $12,830 $11,188 $11,887
Shelter $12,597 $11,393 $11,619
Food $8,532 $7,208 $7,511
Personal Insurance and Pensions $8,037 $6,142 $6,561
Health Care $5,146 $4,012 $4,249
Entertainment $4,213 $3,346 $3,468
Utilities $3,811 $3,235 $3,387
Cash Contributions $2,619 $1,751 $1,813
Apparel $2,346 $1,885 $1,943
POPULATION PROFILE 1 Miles 3 Miles 5 Miles
Population By Age
2015 Estimate Total Population 9,504 124,329 371,046
Under 20 18.16% 13.43% 17.68%
20 to 34 Years 19.60% 31.92% 27.78%
35 to 39 Years 5.40% 7.79% 8.60%
40 to 49 Years 13.98% 13.36% 14.61%
50 to 64 Years 23.78% 19.88% 19.34%
Age 65+ 19.07% 13.62% 11.99%
Median Age 44.98 37.86 37.57
Population 25+ by Education Level
2015 Estimate Population Age 25+ 7,284 97,286 280,137
Elementary (0-8) 0.20% 1.06% 1.59%
Some High School (9-11) 0.91% 2.67% 3.05%
High School Graduate (12) 5.48% 9.46% 11.59%
Some College (13-15) 13.77% 18.74% 20.12%
Associate Degree Only 2.87% 5.38% 6.05%
Bachelors Degree Only 35.78% 35.27% 33.91%
Graduate Degree 40.91% 27.25% 23.28%
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