MIDMONT STATION...Portland’s Q4 2019 vacancy rate at 3.2% and the U.S. average at 6.4%. Portland metro has the nation’s sixth lowest vacancy rate. The Multifamily NW Apartment
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OFFERING MEMOR ANDUM10 Units • 1 Ground Floor Retail Space • Portland, Oregon
MIDMONT STATION
2 HFO INVESTMENT REAL ESTATE
EXECUTIVE SUMMARY
PRICE SUMMARYPrice $3,100,000
Price Per Apt Unit $234,967
Per Square Foot $558
Blended Cap Rate 4.82%
TOURS AND INQUIRIES Lee Fehrenbacher • lee@hfore.com
Greg Frick • greg@hfore.com
2424 SE 11th Avenue, Portland, Oregon 97214www.hfore.com • (503) 241.5541 • Fax: (503) 241.5548
Please do not disturb tenants.
Newly built in 2018, Midmont Station is a high-end mixed-use apartment building located on the popular Southeast Belmont Street corridor. Belmont Street is a highly walkable and desirable destination in close-in Southeast Portland that’s home to numerous restaurants, bars, coffee shops, and retail establishments.
Midmont Station consists of 10 efficiently designed one-bedroom units that utilize circular floor plans in select units to maximize space and the flow of traffic. Rents average $1,232/month ($2.85 PSF) – a popular price point for tenants seeking quality construction in Portland’s inner core.
The building’s ground-floor retail space is occupied by local restaurant Char’ Latin Grill, a popular eatery specializing in Latin street foods and cuisine. The 1,234-square-foot retail space is fully equipped with landlord-owned amenities, including a commercial hood vent system, walk-in cooler, 25-beer tap system, and four commercial sinks. Midmont Station’s desirable location, quality construction, and in-demand units make it a rare opportunity for investors seeking stable, long-term assets in Portland’s growing multifamily market.
ASSET SUMMARYProperty Midmont Station
Location 3334 SE Belmont Street
City, State Portland, OR 97214
County Multnomah
Year Built 2018
Total Units 10
Multifamily Sq Ft 4,322
Retail Sq Ft 1,234
Avg Apt Unit Size 432
Total Sq Ft 5,556
UNIT MIX SUMMARY - MIDMONT STATIONUnit Type Unit Count Avg Square Feet Total Square Feet % of Total Units
1 Bed / 1 Bath 4 388 1,552 40.0%
1 Bed / 1 Bath 2 454 908 20.0%
1 Bed / 1 Bath 2 464 928 20.0%
1 Bed / 1 Bath 2 467 934 20.0%
Total / Averages 10 432 4,322 100%
RETAIL SUMMARY - MIDMONT STATIONRetail Space Monthly Rent Rent Per Sq. Ft. CAM Square Feet
Char Latin Grill $3,500 $42,000 $208 1,234
3MIDMONT STATION • PORTLAND, OREGON
Bike Score
100Transit Score
5296Walk Score
4 HFO INVESTMENT REAL ESTATE
5MIDMONT STATION • PORTLAND, OREGON
Property Highlights:• High-end, new construction• Stainless steel appliances• In-unit washers and dryers• Mini-split heating and air
conditioning• Quartz countertops• LVT Flooring• Efficient circular floor plans
6 HFO INVESTMENT REAL ESTATE
7MIDMONT STATION • PORTLAND, OREGON
Property Highlights:The building’s ground-floor retail space is home to local restaurant Char’ Latin Grill, a popular eatery specializing in Latin street foods and cuisine. The 1,234-square-foot retail space is fully equipped with landlord-owned amenities, including a commercial hood vent system, walk-in cooler, 25-beer tap system, and four commercial sinks.
8 HFO INVESTMENT REAL ESTATE
9MIDMONT STATION • PORTLAND, OREGON
10 HFO INVESTMENT REAL ESTATE
11MIDMONT STATION • PORTLAND, OREGON
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.
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. The U.S. Census Bureau pegged Portland’s Q4 2019 vacancy rate at 3.2% and the U.S. average at 6.4%. Portland metro has the nation’s sixth lowest vacancy rate.
The Multifamily NW Apartment Report survey proved average Fall 2018-19 year-over-year rent growth—not accounting for concessions—at 7.4%.
SKILLED WORKFORCE & STRONG EMPLOYMENTThe city of Portland was the 6th best educated major city in the U.S. in 2017, with 21% of adults having an advanced college degree, lagging behind only Washington DC, Seattle, Boston, Atlanta and San Francisco.
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, 29,000 in 2018 and 18,000 in 2019.
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.
12 HFO INVESTMENT REAL ESTATE
PORTLAND RANKINGS
• No.1 Restaurant City of the Year – Bon Appetit• No.3 Healthiest City in the U.S. – Active.com• No.4 Best City for Biking – Fast Company• No.5 Fittest Cities in America – American College of Sports Medicine
Healthiest Cities to Live– Thrillist.com –
No.7
Best City for an Active Lifestyle– Wallethub –
No.4
No.7Best Cheap Destinations in the U.S.
– U.S. News and World Report –
No.9Best Foodie Cities in the USA
– U.S. News and World Report –
No.2Fiscally Fit Cities
– Sperling’s 2019 (FISCALLY not physically) –
No.1Best Food City in America
– WalletHub (2019) –
No.8Best Place to Live in the U.S.
– U.S. News and World Report –
No.5Best Cities to Work from Home
– Yahoo Finance (2020) –
No.4Best Cities for a Healthy Retirement
– Sperling’s (2019) –
No.7U.S. Cities with Lowest Startup Costs
– Embroker (2019) –
No.8Fittest Cities in America
– CBS News –
No.5Best Places for Business and Careers
– Forbes (2015-2019) –
No.2Best Cities for Foodies
– Sperling’s (2019) –
Portland consistently receives glowing reviews and rankings from the media.
2019 lists include:
2018 lists include:
13MIDMONT STATION • PORTLAND, OREGON
The Portland/Vancouver metro area including Clackamas county and the City of Happy Valley, is well served by an outstanding public transit system. In 2015, TriMet, the area’s public transit agency, made a number of upgrades to the area’s transit options. These upgrades addressed the concerns of residents and workers who depend on bus and light-rail train service to get to and from jobs, schools and other daily events.
The MAX Blue Line was the first of the light rail’s five separate projects to be built, and was the first federally funded light rail project that used money initially earmarked to build freeways. The initial 15 miles of the Blue Line opened in 1986, with 30 rail stops that connect downtown Portland with the City of Gresham.
The Green Line was completed 2009 connecting Clackamas, along Interstate 205, to the Gateway Transit Center. The 8.3 miles of track provides transportation between 8 additional stations before connecting to the previously built I-84 track.
• The Blue Line continues through downtown Portland to the cities of Beaverton and Hillsboro
• The Red Line terminates at the Portland International Airport
• The Green Line connects to Clackamas Town Center
• The Orange Line is the MAX’s newest extension and connects to the City of Milwaukie
CLACKAMAS
WILLAM
ETTE RIVER
GRESHAM
BEAVERTONHILLSBORO
MAX Blue Line
MAX Green Line
MAX Orange Line
MAX Red line
MAX Yellow Line
Portland Streetcar A Loop
Portland Streetcar B Loop
Portland Streetcar North South Line
TRANSPORTATION SYSTEMS
DOWNTOWN PORTLAND
MIDMONT STATION
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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 companies 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 1.3% between November 2018 – November 2019, an increase of 15,900 positions. Below is an overview of net job creation by industry from November 2018 through November 2019:
According to the State of Oregon Employment Department, the Portland Metro region created jobs at the rate of 1.3% in 2019. Portland ranks 16th among the 50 largest metropolitan areas in the United States.
JOB GROWTH BY INDUSTRYMSA PORTLAND
2,400 Construction
1,800Information
Financial Activities
5,600 Professional and BusinessServices
3,500
2,300
Healthcare & Social Assistance
1,600Leisure & Hospitality
15MIDMONT STATION • PORTLAND, OREGON
NE Sandy Blvd
84
5
LIFESTYLE CONVENIENCES AND EMPLOYERS
E Burnside St
SE Stark St
SE Morrison St
SE Belmont St
SE Hawthorne Blvd
NE Glisan St
NE Multnomah St
SE Madison St
NE Grand Ave
SE 12th AveSE 11th Ave
SE 24th Ave
SE Ankeny St
NE 33rd Ave
Laurelhurst Park
Buckman Field Park
Lone Fir Cemetery
Midmont Station
The following establishments are within walking distance to Midmont Station
• Laurelhurst Market• Music Millennium• 50 Licks Ice Cream• Whole Foods Market• Laurelhurst Theatre• Bamboo Sushi• Ken’s Artisan Pizza• Central Catholic High School• Screen Door Restaurant• Boxer Ramen• Tusk• The Matador• Coalition Brewing• Cheese and Crack Snack Shop• Langbaan• Pambiche• Migration Brewing• Han Oak• Nostrana• Revolution Hall• Stammtisch
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LIFESTYLE CONVENIENCES
SE 52th Ave
SE 50th Ave
SE 26th Ave
SE 28th Ave
SE 82nd Ave
SE 60th Ave
SE 92nd Ave
SE Woodstock Blvd
SE Holgate Blvd
SE Steele St
SE Foster Rd
César E. Chávez Blvd
Hawthorne
SE Powell Blvd
SE Division St
SE Belmont St
Mt Tabor Park
Woodstock Park
Creston Park
Lent Park
Mt Scott Park
26
Mall 205
Fubonn Shopping Center
McMenamins Baghdad Theater & Pub
Crystal Spring Rhododendron Garden
205
Century 16 Eastport Plaza
Powell Street Station
Pok Pok
Blue Star Donuts
Stumptown Coffee RoastersPetite Provence
Portland Campus
Mt Scott Community Center & Indoor Pool
HK Cafe
213
Midmont Station
17MIDMONT STATION • PORTLAND, OREGON
MIDMONT STATIONIncome Current Scheduled Rents Per Unit % GOI Notes
Scheduled Gross Rent $147,890 $14,789 1
Less: Vacancy/Credit Loss -$7,395 -$739 -5.0% 2
Net Income $140,496 $14,050
Includes: Utility Billing (RUBs) $11,510 $1,151
Includes: Miscellaneous $3,133 $313
Total Other Income $14,643 $1,464 9.5% 3
Effective Annual Income - Residential $155,139 $15,514
Expenses Projected Operations Per Unit % GOI Notes
Real Estate Taxes $18,315 $1,831 9.3% 5Insurance $2,300 $230 1.2%
Total Utilities $9,969 $997 5.0%
Fee Management $9,308 $931 6.0% 6Fire Monitoring $1,720 $172 0.9%
Maintenance/Repairs $2,500 $250 1.3%
Turnover $1,500 $150 0.8%
Reserves $2,500 $250 1.3% 7Total Estimated Expenses -$48,112 -$4,811 -24.4%Total Estimated NOI $149,427 $14,943 75.6%
Commercial Income Projected Operations Per SF % GOI Notes
Base Rent $42,000 $34
Less: Vacancy/Credit Loss -$2,100 -$2 -5%
Estimated CAM Charges $2,500 $2
Effective Annual Income $42,400 $34 21% 4
Gross Operating Income $197,539 $19,754
18 HFO INVESTMENT REAL ESTATE
OPERATIONS ANALYSIS1. RENTS Rents are based on a April 2020 rent roll and average $1,232 per unit or $2.85 per sq ft.
2. VACANCY The projected operations include a market-rate vacancy of 5.0%.
3. OTHER INCOME Other Income includes miscellaneous charges consisting of late fees, damages, and other administrative charges. The property is currently recapturing 99% of its total utility expenses.
4. COMMERCIAL INCOME Midmont Station’s 1,234-square-foot ground-floor commercial space is occupied by local restaurant Char’ Latin Grill, a popular eatery specializing in Latin street foods and cuisine. Char pays $3,500 monthly (approximately $34 psf ) plus NNN expenses of approximately $200/month. Char’s lease began on Jan. 1, 2019 and extends to Dec. 31, 2023. Starting in December 2020, base rent will increase annually by 2 percent, and NNN charges will increase 10 percent annually.
5. PROPERTY TAXES Oregon’s property taxes are evaluated on a fiscal year starting July 1. 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 prior to November 15 each year receive a 3.0% discount. Midmont Station’s gross taxes total $18,881. For underwriting purposes, projected operations include the property taxes for the 2019-2020 tax year with the 3.0% discount totaling $18,315.
6. FEE MANAGEMENT The management fee has been projected at 6.0% of GOI, which represents standard independent, third-party management costs for properties similar to Midmont Station in the Portland metro area.
7. 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 or $2,500 annually.
Type Units Count Average Sq Ft Average Scheduled Rents Scheduled Rents per Sqft1 Bedroom / 1 Bathroom 4 388 $1,253 $3.23
1 Bedroom / 1 Bathroom 2 454 $1,170 $2.58
1 Bedroom / 1 Bathroom 2 464 $1,310 $2.82
1 Bedroom / 1 Bathroom 2 467 $1,176 $2.52
Total / Average 10 432 $1,232 $2.85
Retail Space Square Foot Monthly Commercial Rent Annual Commercial Rent Annual Commercial Rent PSF CAM Total Annual CAMChar Latin Grill 1,234 $3,500 $42,000 $34.04 $208 $2,500
19MIDMONT STATION • PORTLAND, OREGON
OFFER TERMS
QUESTIONS & TOUR REQUESTS:
All tours and inquiries regarding Midmont Station are to be directed to HFO Investment Real Estate at (503) 241.5541. Please do not disturb tenants.
Lee Fehrenbacher • lee@hfore.comGreg Frick • greg@hfore.comRob Marton • rob@hfore.com Tyler Johnson • tyler@hfore.comJack Stephens • jack@hfore.comTodd Tully • todd@hfore.comAdam Smith • adam@hfore.com Rand Hoffman • rand@hfore.com
HFO 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.
ASSET SUMMARYLocation 3334 SE Belmont Street
City, State Portland, OR 97214
PRICE SUMMARYPrice $3,100,000
Price Per Apt Unit $234,967
Per Square Foot $558
Blended Cap Rate 4.82%
20 HFO INVESTMENT REAL ESTATE
21MIDMONT STATION • PORTLAND, OREGON
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. ©2020 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.
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