class a office investment

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

[email protected]

MARYKAY WEST

503 542 5885

[email protected]

BRAD CHRISTIANSEN

503 499 0054

[email protected]

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



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.


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.



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.


FIRST FLOOR



SECOND FLOOR


THIRD FLOOR



FOURTH FLOOR


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



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


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%


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


#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


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%


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


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



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

[email protected]

MARYKAY WEST

503 542 5885

PORTLAND, OREGON

[email protected]

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

[email protected]


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.


CHRIS JOHNSON

503 542 5884

PORTLAND, OREGON

[email protected]

MARYKAY WEST

503 542 5885

PORTLAND, OREGON

[email protected]

851 S.W. Sixth Ave., Suite 1200Portland, Oregon 97204503.223.3123

BRAD CHRISTIANSEN

503 499 0054

PORTLAND, OREGON

[email protected]

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