THE BRIAR ROSE...• The return of concessions. New properties are offering concessions as they complete lease-up, and we expect to see rental specials continue, unaffected by season.

OFFERING MEMOR ANDUM17 Units • Portland, Oregon

THE BRIAR ROSE

2 HFO INVESTMENT REAL ESTATE

EXECUTIVE SUMMARYASSET SUMMARYLocation 15851 E Burnside

City, State Portland, OR 97233

County Multnomah

Total Units 17

Year Built 1972

Approx. NR Sq Ft 14,700Average Unit Size 865 Sq. Ft.Acreage 0.91 acres

PRICE SUMMARYPrice $2,450,000

Price Per Unit $144,118

Per Square Foot $167

Cap Rate 5.69%

Projected Cap Rate 6.48%

DETAILED UNIT MIXUnit Type Unit Count Average Sq Ft Total Sq Ft % of Total Units2 Bed / 1 Bath 16 850 13,600 94.1%3 Bed / 2 Bath 1 1,100 1,100 5.9%Total / Averages 17 865 14,700 100.0%

TOURS AND INQUIRIES Jack Stephens • [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.

The Briar Rose is a 17-unit community located on the east side of Portland, on the border with the city of Gresham. The property boasts spacious two- and three-bedroom floorplans with high-quality finishes.

With rents currently averaging $1,111 per unit, or $1.28 per sq. ft., The Briar Rose’s comfortable units, and outstanding location make the property an especially attractive investment opportunity. Projected rents are based on the highest achieved leases at The Briar Rose and are 8.6% higher than in-place rents.

The Briar Rose is located within walking distance of numerous retail amenities – including an Albertson’s, Regal Cinemas and Dutch Bros., among others – and is just a short commute away from major employment centers in Gresham and Portland via Highway 26. This major thoroughfare also acts as home to many retail stores, restaurants and shopping centers throughout the east side of Portland.

The Briar Rose’s strong east-side location, combined with its potential to continue to prove rent increases make the property an ideal opportunity for investors seeking stable, quality assets in the Portland metro area.

3THE BRIAR ROSE • 17 UNITS • PORTLAND, OREGON





LOCATION

SE Division St

NE 162nd Ave

NE 181st Ave

SE 202nd Ave

SE 223rd Ave

SE Burnside St

NE Halsey St

NE Glisan St

NE Sandy Blvd

Gresham Station

DMV

Wood VillageTown Center

Reynolds School District

Reynolds High School

The Briar Rose

84

30B

Gresham Golf Course

Troutdale Airport

GroundBlue Lake

Fairview Lake

Edgefield

E Burnside St


GRESHAM MARKET SNAPSHOT

GRESHAM MARKET DRIVERSThe vacancy rate in Gresham remains low, but is beginning to slowly increase. As of October 2018, the vacancy rate for the Gresham/Troutdale/Fairview submarket was 3.87% and unchanged from 2017. The vacancy rate for 3-bedroom 2-bathroom units in Gresham is 2%. This submarket has seen below-market average vacancy rates since 2010.

Source: Multifamily NW Spring 2018 Report

Gresham’s population in 2017 was 111,053 according to the Census Bureau. Between 2010 and 2017 the city’s population increased by 5.1%. Approximately 47.5% of Gresham’s 38,921 households rent, and the average number of people per household is 2.78. Median household income in Gresham is $49,866.

GRESHAM SCHOOLSIn November 2016, Gresham voters approved a $291.2 million bond for the Gresham-Barlow school district. The vote occurred after the Reynold’s School District, which also serves Gresham, announced that it would replace three elementary schools and is making improvements to Reynolds High School with money from the 2015 bond.


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


The following market conditions have made Portland one of the strongest multifamily markets in the nation for several years:

• The Metro Area’s vacancy rate has consistently ranked among the nation’s lowest. Multifamily NW’s Fall 2018 Report cited average vacancy for the Portland Metro Area as 4.4%.**

• Despite large numbers of new units coming online throughout the metro area in 2016 and 2017, between Spring 2017 and 2018 rents per square foot grew by 3.18%. Since fall 2012 rents have grown by 57.3%.**

• Significant in-migration continues: After three consecutive years in the #1 spot, Oregon has been the #2 most popular destination for people moving within the United States since 2016.

• The inventory of for-sale housing was 2.8 months as of November 2018, after holding at less than two months for the entire period between 2015 and Spring 2018.

The Portland Metro Area is experiencing historically high demand for housing, and it’s no secret that developers have been working to meet demand. In 2018:

• 45 properties, totaling 2,312 units, completed construction in Portland’s core.

New apartment deliveries have affected the rental market, resulting in:

• The return of concessions. New properties are offering concessions as they complete lease-up, and we expect to see rental specials continue, unaffected by season.

• Softening in rent growth. Rent escalations are slowing after years of historically high rent growth.

*Source: US Census and PSU Center for population research for four-county metro area.

**Multifamily NW Apartment Report.

PORTLAND MARKET SNAPSHOT


OPERATIONS ANALYSISType Units Count Avg Sq Ft

Average Scheduled Rents

Scheduled Rents per Sqft Projected Rents Projected Rents

per Sq Ft2 Bedroom / 1 Bathroom 16 850 $1,086 $1.28 $1,195 $1.41

3 Bedroom / 2 Bathroom 1 1,100 $1,500 $1.36 $1,600 $1.45

Total / Average 17 865 $1,111 $1.28 $1,219 $1.41

Income Current Scheduled Rents Projected Operations Note

Scheduled Gross Rent $226,601 $13,329 $248,640 $14,626 1Less: Vacancy/Credit Loss -$11,330 -$666 -5.0% -$12,432 -$731 -5.0% 2

Net Rental Income $215,271 $12,663 $236,208 $13,895 Other Income $12,944 $761 $12,944 $761 3

Includes: Utility Billing (RUBs) $10,762 $633 51.2% $10,762 $633 51.2% Includes: Miscellaneous $2,182 $128 $2,182 $128

Gross Operating Income $228,214 $13,424 $249,152 $14,656

Expenses Projected Operations

Per Unit % GOI Projected Operations

Per Unit % GOI

Real Estate Taxes $17,803 $1,047 7.8% $17,803 $1,047 7.1% 4Insurance $3,920 $231 1.7% $3,920 $231 1.6%Total Utilities $26,215 $1,542 11.5% $26,215 $1,542 10.5% Fee Management $18,257 $1,074 8.0% $19,932 $1,172 8.0% 5Landscaping $4,763 $280 2.1% $4,763 $280 1.9% Maintenance/Repairs $10,200 $600 4.5% $10,200 $600 4.1%Turnover $3,400 $200 1.5% $3,400 $200 1.4%Reserves $4,250 $250 1.9% $4,250 $250 1.7% 6

Total Expenses -$88,808 -$90,483 Expenses per Unit -$5,224 -$5,323% of Gross Operating Income -39% -36%

Net Operating Income (NOI) $139,406 $158,669


OPERATIONS ANALYSIS1. RENTS Rents are based on a March 2019 rent roll. Current scheduled rents average $1,111 per unit, or $1.28 per sq

ft. The projected rents are based on highest achieved lease rates in 2018 & 2019. Projected rents average $1,219, or $1.41 per sq ft - a 8.9% increase in rent.

2. VACANCY The projected operations include a market-rate vacancy of 5.0%.

3. OTHER INCOME Other Income includes resident utility billbacks, administrative, laundry, and pet fees, as well as other miscellaneous charges.

• RUBs. The Briar Rose currently charges for resident utility billbacks, (RUBs). Residents are projected to be charged an average $53 per unit per month for water, sewer, and garbage expenses. The property is individually metered for electric.

4. 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 1 each year receive a 3.0% discount. Property tax values for the 2018-2019 tax year are published October 15, and The Briar Rose’s property taxes increased 3.56% over the 2017-2018 taxes and total $18,354. The Briar Rose’s projected operations include the net property taxes for the 2018-2019 tax year which include the 3.0% discount for early payment and total $17,803.

5. FEE MANAGEMENT The management fee is inclusive of all administrative, payroll, and advertising expenses associated with the property. It is projected to total 8% of GOI.

6. 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 $4,250 annually.


OFFER TERMS

QUESTIONS & TOUR REQUESTS:

All tours and inquiries regarding The Briar Rose are to be directed to HFO Investment Real Estate at (503) 241.5541. Please do not disturb tenants.

Jack Stephens • [email protected]

Greg Frick • [email protected]

Tyson Cross • [email protected]

Lee Fehrenbacher • [email protected]

Todd Tully • [email protected]

Adam Smith • [email protected]

Khari Gates • [email protected]

HFO Investment Real Estate 2424 SE 11th AvenuePortland, Oregon 97214

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

ASSET SUMMARYLocation 15851 E Burnside

City, State Portland, OR 97233

Total Units 17

PRICE SUMMARYPrice $2,450,000

Price Per Unit $144,118

Per Square Foot $167

Cap Rate 5.69%

Projected Cap Rate 6.48%



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.

THE BRIAR ROSE...• The return of concessions. New properties are offering concessions as they complete lease-up, and we expect to see rental specials continue, unaffected by season.

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