for sale lake oswego executive park€¦ · this marketing brochure has been prepared to provide...

KIDDER.COM

FOR SALE

LAKE OSWEGO EXECUTIVE PARK

OFFERING MEMORANDUM | 5755-5795 JEAN ROAD | LAKE OSWEGO, OR

The 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 Kidder Mathews and should not be made available to any other person or entity without the written consent of Kidder Mathews.

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. Kidder Mathews 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, Kidder Mathews has not verified, and will not verify, any of the information contained herein, nor has Kidder Mathews 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.

This information has been secured from sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Recipient of this report must verify the information and bears all risk for any inaccuracies.

01EXECUTIVE SUMMARY

02PROPERTY OVERVIEW

03TENANT INFORMATION

04FINANCIAL ANALYSIS

05MARKET OVERVIEW

KIDDER.COM

ZACH FRANCIS

Executive Vice President [email protected]

EXCLUSIVELY LISTED BY

KARLA HANSEN

Vice [email protected]

TABLE OF CONTENTS

3LAKE OSWEGO EXECUTIVE PARK OFFERING MEMORANDUM KIDDER MATHEWS

01EXECUTIVE

SUMMARY

EXCELLENT LOCATION

Lake Oswego Executive Park is located in the highly desirable city of Lake Oswego, a premier business and residential address in the Portland metro area. The property is located within one-half mile of the I-5 interchange near the Cities of Tualatin, Durham, and Tigard. The Lake Oswego location provides the Portland metro areas largest base of decision-makers living in close proximity, providing a strong prospective tenant pool.

LOW-VACANCY SUBMARKET

The Lake Oswego flex market currently has a vacancy rate of just 2.0% for spaces 10,000 SF and under, which means there is very little competition to the Lake Oswego Executive Park. Lake Oswego is part of the I-5 Corridor flex market which is comprised of Lake Oswego, Tigard, Tualatin, Sherwood and Wilsonville. This combined group of cities has a flex vacancy rate of just 5.0% for spaces 10,000 SF and under. Given that the subject property ranges from 1,000 to 4,000 SF size ranges, the Lake Oswego Executive Park has very little leasing competition which will likely continue for the foreseeable future.

MINIMAL DOWNTIME

Average downtime on vacant spaces at Lake Oswego Executive Park is approximately 1 month, providing investor with virtually no vacancy risk,similar to multi-family investments.

EXECUTIVE SUMMARY

STABILIZED ASSET WITH SUBSTANTIAL INCOME UPSIDE

Virtually 100% leased, the property provides a solid income stream for the investor. Two of the largest tenants have recently signed 10-year leases, further increasing the security of the income stream. While occupancy is stabilized, many existing contract rents are approximately 11% below market overall, providing significant income upside.

PROFESSIONALLY MANAGED

The property is professionally managed by Kidder Mathews Property Services, providing ownership with minimal Landlord responsibilities .

DESIRABLE MULTI-TENANT DESIGN

The property features appealing architectural design that includes a functional mix of smaller office and flex spaces suitable for a broad range of prospective tenants. The park is currently leased to 13 tenants ranging in size from 832 to 4,716 square feet.

LOW TURNOVER COST

On the last 4 lease renewals, the landlord has provided little to no tenant improvement dollars and on average 1-2 months of free rent per renewal.

PROPERTY SUMMARY

Address Lake Oswego Executive Park 5755-5795 Jean Road

Property Size 37,197 SF

No. of Buildings 3

No. of Tenants 13

Office Area Ranging from 40% to 100%

Year Built 1983 to 1986

Site Size 2.26 acres

Parking 3.35 spaces/1,000 SF

Currently Leased

94.3% (1 Small Vacancy as of 10/1/19)

FINANCIAL HIGHLIGHTS

Sale Price $7,495,000

Net Operating Income

$468,203

Capitalization Rate

6.25%

Capitalization Rate- Highest Rent Acheived

7.35%

LAKE OSWEGO EXECUTIVE PARK OFFERING MEMORANDUM KIDDER MATHEWS 4


02PROPERTY OVERVIEW


PROPERTY DESCRIPTION

Lake Oswego Executive Park is a high quality, multi-tenant business center built between 1983 and 1986. The project consists of three buildings totaling approximately 37,197 square feet. Buildings 5775 and 5795 are of tilt-up concrete construction. Building 5755 is a two-story wood frame building. Buildings 5755 & 5775 have partial 2nd floors, totaling 7,747 SF.

The buildings have asphalt built-up roof systems on plywood decking. HVAC for the office space is provided by rooftop-mounted electric package units. Warehouse heat is provided by ceiling mounted gas fired units. All buildings are improved with fire sprinkler systems.

The property is currently configured into 17 tenant spaces, with the typical space sizes ranging from approximately 1,500 to 2,500 square feet, and a few larger and

PROPERTY OVERVIEW

smaller spaces. Six of the 17 spaces are 100% office with the balance being flex space improved with approximately 40% to 80% office and the remainder warehouse with loading doors.

Buildings 5755 and 5775 both have two levels with flex space on the ground floor and office space on the 2nd floor. Building 5775 also has a small common area servicing the offices. Building 5795 is one level and occupied by two larger flex tenants.

The property is improved with attractive landscaping. It has also recently been improved with a state-of-the-art, pervious pavement system that eliminated the need to connect with the public storm water system. There are 124 striped parking spaces, for a favorable parking ratio of 3.35 spaces per 1,000 square feet. The site is comprised of 2.26 acres and is zoned Industrial Park (IP) by the City of Lake Oswego, allowing a broad range of light industrial, office and accessory uses.

5775BUILDING 2

5795BUILDING 3

5755BUILDING 1


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OSWEGO LAKE

LOCATION OVERVIEW

Lake Oswego Executive Park is located in the highly desirable City of Lake Oswego, which is the premier business and residential address in the suburban Portland metro area. It is located within one-half mile of the Interstate 5 interchange at the confluence of the cities of Tigard, Durham, and Lake Oswego. The area is also located approximately 2 miles from Interstate 205 to the south and State Highway 217 to the north. It is strategically located approximately 10 miles south of the Portland Central Business District.

The immediate neighborhood includes a concentrated mix of both premium office, retail, industrial, and residential uses with no significant vacant land available for new development. Lake Oswego Executive Park is less than one mile from the highly-acclaimed Bridgeport Village, offering the area’s finest retailers and restaurants.

PROPERTY OVERVIEW

SUBJECT PROPERTY


PROPERTY OVERVIEW

PROPERTY DETAILS

Address 5755-5795 Jean Road Lake Oswego, OR

Property Size 37,197 SF

No. of Buildings 3

No. of Tenants 13

Office Area Ranging from ±40% to 100%

Year Built 1983-1986

Site Size 2.26 acres

Parking 3.35 spaces/1,000 SF

Currently Leased 94.3%

PROPERTY OVERVIEW

DEMOGRAPHICS

HOUSEHOLDS

ESTIMATED POPULATION

AVERAGE HH INCOME

$107,090 33,742 80,874



03TENANT

INFORMATION

TENANT INFORMATIONTENANCY

The property is currently 94%+ leased to 14 tenants with only 1 small vacancy (vacated 10/1/19). The current mix of tenants includes a few national companies, but pr imari ly smal l businesses operating professional office and light warehouse uses. Tenants include a national tenant screening company, telecom provider, website designer, lighting design, beauty supply wholesaler, physical therapy,

house cleaning service, custom bicycle manufacturing, and plant maintenance company among others. The property’s high quality and appeal, location adjacent to retail uses, and extensive executive housing nearby, draws a high level of quality tenant interest. Located to the right and on the following page is a summary of the tenant businesses.

Suite Tenant

5755 101C & 200

National Tenant Network

Type of Business: Residential tenant screening. Website: www.ntonline.com

5755 103C

A Squared Bikes

Type of Business: Custom bicycle manufacturing company. Website: www.a2bikes.com

5755 104C

Ellumiglow.com

Type of Business: High end lighting and design company. Website: www.ellumiglow.com

5755 202

Verilytics, Inc. dba Mobility Help Desk

Type of Business: Mobile ecosystem solutions.website: www.mobilityhelpdesk.com

5775 102

Marshall Gardens

Type of Business: Marshall Gardens is a full-service interior plant maintenance company.Website: www.marshallgardensonline.com

5775 104

SmartWatt Energy, Inc.

Type of Business: Energy systems optimization company. Website: www.smartwatt.com

5775 105

Mobile Pet Services, LLC.

Type of Business: Local mobile dog veterinary service.

5775 106

RCW Enterprises, Inc. dba Merry Maids

Type of Business: Cleaning service. Website: www.merrymaids-portland.com


Suite Tenant

5775 210

John Galt Wealth Solutions

Type of Business: Wealth management firm.Website: www.johngaltwealthsolutions.com

5755 103C

Left Coast Logistics

Type of Business: Local logistics company providing freight management solutions.Website: www.leftcoastlogisticsllc.com

5775 Suite C

Jake Mahar dba Forge Consulting Group LLC and Ben J. Baarspul dba Baarspul Physical Therapy LLC

Type of Business: Personal and group fitness classes and training; Physical therapy and sports medicine. Website: www.forgeptc.com, www.baaarspulpt.com

5795 Suite A/B

Beauty Systems Group LLC dba CosmoProf

Type of Business: CosmoProf sells salon products and equipments to beauty professionals with over 1,000 stores in the US and Canada. It is part of Sally Beauty Holdings, which is the largest full service professional beauty products distributor in the world. Website: www.cosomoprfbeauty.com

5795 102C

Frazer Development Solutions

TENANT INFORMATION


TENANT INFORMATIONTENANT MAPS

GROUND LEVEL SECOND LEVEL

SUITE 103VACANCY2,125 SF

SUITE 104SMART WATT

1,973 SF

SUITE 215LEFT COAST LOGISTICS

2,195 SF

SUITE 102CFRAZER

DEVELOPMENT PARTNERS1,200 SF

SUITE CFORGE CONSULTING

3,745 SF

SUITE 101MARSHALL GARDENS

2,340 SF

SUITE 102MARSHALL GARDENS

2,308 SF

SUITE 105MOBILE VET

SERVICES2,310 SF

STE 220 MEDIA MECHANIC

832 SF

SUITE 103CA SQUARED

BIKES1,188 SF

SUITE 106WILBATAMNGMT2,305 SF

SUITE 210JOHN GALT

980 SF

SUITE 202VERILYTICS

4,220 SF

SUITE 200NATIONAL TENANT

NETWORK - 1,600 SF

SUITE 104CELLUMI-

GLOW.COM1,859 SF

SUITE A & BWEST COAST

BEAUTY SUPPLY4,716 SF

SUITE 101CNATIONAL TENANT

NETWORK - 1,301 SF



04FINANCIAL

ANALYSIS


FINANCIAL ANALYSIS

RETURN %

Pro Forma (assumes only vacancy leased at closing) Highest Rent Achieved

Net Operating Income $492,845 $580,378

Vacancy Factor (5.0%) ($24,642) ($29,018)

Adjusted NOI Income $468,203 $551,359

Sale Price $7,495,000 $7,495,000

Capitalization Rate 6.25% 7.35%

FINANCIAL OVERVIEW

The Lake Oswego Executive Park (LOEP) currently has a stabilized capitalization rate of 6.25% making it one of the most attractive investment opportunities in the Portland Metropolitan area. With virtually zero vacancy risk as evidenced by numerous recent lease and renewal transactions, the asset functions more like a multi-family property without the management hassles. Additionally, there is significant upside for an investor to increase

rental rates/return. Applying the highest rent achieved in the park yields nearly an 8.0% return over time, and with staggered lease expirations, an investor can steadily increase rental rates on the project. As stated earlier, there is minimal competition in the Lake Oswego area, and those projects nearby are asking significantly higher rental rates, making the LOEP highly attractive for tenants in the area.

FINANCIAL DETAILS

Rent Increases Average 3% annual bumps

Tenant Retention Ratio 70%

Downtime Between Tenants 1 Month on average

Property Taxes Current actual 2018-2019 tax year

Management Fee 3.5% of Gross Rental Revenue

General Vacancy/Credit Loss 5.0% of Scheduled Base Rental Revenue


FINANCIAL ANALYSIS

RENT ROLL

Tenant Suite Start Rent Dates Expire Rent Dates GLA Square Footage Monthly Base Rent Annual Rate PSF Monthly Cost Recovery

Marshall Gardens 101+102 5/1/14 4/30/24 4,648 $5,000 $12.91 $2,347.72

Vacancy (Pro-Forma) 103 9/1/17 8/31/20 2,125 $2,763 $15.60 $1,050

Smart Watt Energy Inc. 104 3/1/18 2/28/21 1,973 $2,032.19 $12.36 $973.36

Mobile Pet Services, LLC 105 2/1/16 1/31/22 2,310 $2,695.00 $14.00 $1,139.59

Merry Maids 106 11/1/15 10/31/20 2,305 $2,317.24 $12.06 $1,137.02

John Galt Wealth Solutions 210 1/1/17 1/31/21 980 $1,176.00 $14.40 $483.25

Left Coast Logistics 215+220 7/1/18 6/30/21 3,027 $3,502.00 $13.88 $1,083.04

A Squared Bikes 103C 9/1/19 9/30/22 1,188 $1,366 $13.80 $574

Ellumiglow.com 104C 10/1/19 11/30/22 1,859 $2,394 $15.45 $820

Frazer Development Partners 102 11/1/18 10/31/19 1,200 $1,380 $13.80 $561.13

National Tenant Network, Inc 200 + 101C 12/1/17 11/30/27 2,901 $3,436.23 $14.21 $1,356.07

Mobility Help Desk 202 + 204 7/1/17 2/28/21 4,220 $4,384.71 $12.47 $1,972.46

CosmoProf AB 2/1/18 1/31/28 4,716 $4,849.62 $12.34 $2,097

Forge-Baarspul C 8/1/16 9/30/21 3,745 $3,774.42 $12.09 $1,665

Totals 37,197 $41,070.41 $17,259.64

GRAND TOTALS

Total SF 37,197 SF

Monthly NOI $41,070.41

Annual NOI $492,844.92


05MARKET

OVERVIEW

SUBMARKET INFORMATION

Lake Oswego Executive Park is located in the City of Lake Oswego, within the I-5 Corridor submarket. Lake Oswego is arguably one of the best suburbs in the entire state of Oregon in terms of quality, growth and median average income. Lake Oswego is also one of the metro area’s largest submarkets, in between I-5 and 99W on the north and west and the Willamette River on the east and south.

Lake Oswego is comprised of a mix of office, flex and industrial buildings,

MARKET OVERVIEW

and is characterized by an extreme lack of developable flex/industrial zoned land. Many residents of Lake Oswego own business in nearby by Tualatin, Tigard and Wilsonville, but only due to a lack of availabilities in the area. The city has excellent freeway access, an abundance of new retail, multi-family, office and commercial developments, and is characterized by a large amount of support services including upscale restaurants, shops, and many others. Larger companies in the area include Rite Aid, Precision Interconnect, Federal Express, Logic General, Milgard, Xerox, Pacific Metal and Lam Research.

SUBJECT PROPERTY

LAKE OSWEGO

TIGARD



MARKET OVERVIEW

FINANCIAL OVERVIEW SECTION

The Lake Oswego flex market currently has a vacancy rate of just 2.0% for spaces 10,000 SF and under, which means there is very little competition to the Lake Oswego Executive Park. Lake Oswego is part of the I-5 Corridor flex market which is comprised of Lake Oswego, Tigard, Tualatin, Sherwood and Wilsonville. This group of cities combined has a flex vacancy rate of just 5.0% for spaces 10,000 SF and under. Given that the subject property ranges from 1,000 to 4,000 SF size ranges, the Lake Oswego Executive Park has very little leasing competition which will likely remain for the foreseeable future.

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© 2019 CoStar Realty Information Inc. 10/08/2019

LAKE OSWEGO FLEX Net Absorption, Net Deliveries & Vacancy

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© 2019 CoStar Realty Information Inc. 10/08/2019

I-5 CORRIDOR FLEX

MARKET OVERVIEW

LAKE OSWEGO EXECUTIVE PARK5755 SW Jean Rd, Lake Oswego, OR

Project Size 37,197 SF

Year Built 1983

Asking Rent ($/SF/Mo NNN)

$1.15/SF to $1.30/SF

Comments Subject Property

01

DURHAM HALL BUSINESS CENTER16285 SW 85th Ave, Tigard, OR

Project Size 65,306 SF; 4 bldgs

Year Built 1987


$1.20/SF Modified Gross; $1.00/SF NNN Equivalent

CommentsConcrete incubator business park

05

PACIFIC CORPORATE CENTERBldg A, 15618-15862 SW 72nd Ave, Tigard, OR


Year Built 1990


$1.18/SF

CommentsFlex space in flex/office park

02

MOHAWK BUSINESS PARK BLDGS J, K7600-7646 SW Mohawk St., Tualatin, OR


Year Built 1990


$2.00/SF FS$1.35/SF NNN Equivalent

CommentsOffice suite in flex/office park

06

20746 SW OLDS PL.20746 SW Olds Place, Sherwood, OR

Project Size 24,000 SF

Year Built 2005


$1.13/SF

CommentsMetal incubator business park

03

MERIDIAN BUSINESS PARK BLDG A6405 SW Rosewood St., Lake Oswego, OR


Year Built ±2000


$1.45/SF

CommentsOffice suite in business park

07

74TH AVE INDUSTRIAL PARK BLDG A15615 SW 74th Ave, Tigard, OR


Year Built 1997


$1.20/SF Modified Gross; $1.00/SF NNN Equivalent

CommentsMetal incubator business park

04

LAKEVIEW BUSINESS CENTERSW Jean Rd, & Lakeview Blvd, Lake Oswego, OR

Project Size 21,619 SF, 2 bldgs

Year Built 2019


±$1.75/SF

CommentsNew flex/office/industrial project across from subject

08

COMPETITIVE LEASE SET


7

4

5

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COMPETITIVE LEASE SET AERIAL MAP

SUBJECT PROPERTY

SHERWOOD

TUALATIN

TIGARD

LAKEOSWEGO


KIDDER.COM

EXCLUSIVELY REPRESENTED BY

ZACH FRANCIS

Executive Vice President [email protected]

KARLA HANSEN

Vice [email protected]

for sale lake oswego executive park€¦ · this marketing brochure has been prepared to provide...

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