stark street court -...

STARK STREET COURT

Investment Real Estate • www. hfore.com • (503) 241.5541

OFFERING MEMOR ANDUM

10 STUDIOS + SFR HOUSE • PORTLAND, OR

INVESTMENT OVERVIEWStark Street Court is an 11-unit garden-court apartment in southeast Portland, Oregon. The property offers both duplex studios and a single family home. The asset has been well maintained and presents the opportunity to acquire a great cash flowing investment with operational and income upside.

Stark Street Court is located on Stark Street, providing easy access to I-205, I-84 and Portland’s Metropolitan Area Express (MAX) light rail. Mall 205, a regional mall anchored by a Target and Home Depot, is less than two miles west.

This low density property offers the possibility for a new or experienced investor to procure a safe, cash flowing property with very strong demand and a history of high occupancy.

Property Highlights• Duplex-style one-story units

• Well-maintained studios

• Convenient to Mall 205

• Off-street parking

2 HFO INVESTMENT REAL ESTATE

EXECUTIVE SUMMARY

Stark Street Court

PRICE SUMMARYPrice $930,000

Price Per Unit $84,545

Per Square Foot $174

Projected Cap Rate 6.04% ** Based on current scheduled rents and projected operations.

ASSET DETAILSAddress 13327 SE Stark Street

Portland, OR 97233

Total Units 11

Year Built 1932

Stories One-story, duplex flatsTwo-story SFR home

Approx. NR Sq Ft 5,355

Average Sq Ft 487

City Portland

County Multnomah

Acres 0.48

Parking Off-street

TAX INFORMATIONTax ID R109372

For More Information Jack Stephens • [email protected]

2424 SE 11th Ave., Portland, OR 97214www.hfore.com (503) 241.5541 Fax: (503) 241.5548

205

NE Burnside St

NE Glisan St

NE Halsey StNE Weidler St

NE 102rd Ave

NE 122rd AveSE 122rd Ave

SE 135th Ave

SE 112th Ave

SE 92nd Ave

SE Stark St

SE Market St

SE Division St

SE Cherry Blossom Dr

Glendoveer Golf Course

David Douglas High School

Mall 205

3STARK STREET COURT • 11 UNITS • PORTLAND, OR

OPERATIONS ANALYSIS

RENTS Stark Street Court’s current rents average $728 per unit, or $1.50 per sq ft. Increasing rents to $725 per month - the highest achieved rent for the studio units - increases potential rents to an average $791 per unit, or $1.62 per sq ft.

VACANCY/CREDIT LOSS AND BAD DEBT

Stark Street Court’s operations include a 3.0% vacancy rate. Given the strength of the housing market and low vacancy rates throughout the entire Portland metro area, vacancy factors for underwriting purposes include concessions and bad debt.

OTHER INCOME Stark Street Court generates approximately $7,649 in other income based on August 2017 YTD annualized operations. The other income is generated by administrative charges and utility collections of $46 per unit per month.

INCOME

EXPENSES

Stark Street Court is currently managed by a third-party management company. The projected operations assume the asset will continue to be managed by a professional third-party management company.

PROPERTY TAXES The property taxes reflect 2017/2018 gross property taxes, per the Multnomah County assessors’ office. Taxes were published October 15. Property taxes are not reassessed on the sale of a property in Oregon.

INSURANCE The insurance premium is estimated based on operations and average costs for insurance for similar properties. Insurance is estimated at $2,035 annually.

MANAGEMENT The current management costs, which include leasing and administrative oversight, total 12.7% of GOI. The projected operations assume Stark Street Court will continued to be managed by a third-party management company at a market rate of 10%.

TURNOVER The operations have been adjusted for turnover costs. Assuming professional, third-party management, the turnover cost is estimated at $1,980 annually.

CAPITAL RESERVES Operations for Stark Street Court include a lender-anticipated reserve requirement of $250 per unit, or $2,750 annually.

CURRENT RENTS

Rents 410 sq ft 1,255 sq ft

$600 1$615 1$625 1$640 1$650 2$675 1$685 1$700 1$725 1

$1,445 1Total 10 1


OPERATIONS ANALYSIS

Income Current Scheduled Rents

Per Unit Projected Operations

Per Unit % GOI

Scheduled Gross Rent $96,120 $8,738 $104,340 $9,485Less: Vacancy/Credit Loss -$2,884 -$262 -3.0% -$3,130 -$285 -3.0%

Net Rental Income $93,236 $8,476 $101,210 $9,201Includes: Utility Charges $5,529 $503 39.2% $5,529 $503 39.2%Includes: Miscellaneous $1,526 $139 $1,526 $139

Total Other Income $7,055 $641 7.0% $7,055 $641 6.5%

Gross Operating Income - Residential $100,291 $9,117 $108,264 $9,842

Expenses Projected Operations

Per Unit % GOI Projected Operations

Per Unit % GOI

Real Estate Taxes $6,387 $581 6.4% $6,387 $581 5.9%

Insurance $2,035 $185 2.0% $2,035 $185 1.9%

Total Utilities $14,097 $1,282 14.1% $14,097 $1,282 13.0%

Fee Management $10,029 $912 10.0% $10,826 $984 10.0%

Landscaping $2,175 $198 2.2% $2,175 $198 2.0%

Maintenance/Repairs $4,668 $424 4.7% $4,668 $424 4.3%

Turnover $1,980 $180 2.0% $1,980 $180 1.8%

Reserves $2,750 $250 2.7% $2,750 $250 2.5%

Expenses -$44,121 -$4,011 -44% -$44,918 -$4,083 -41%

Net Operating Income (NOI) $56,170 $5,106 56% $63,346 $5,759 59%

Stark Street CourtUnit Type Unit Count Square Feet Average

Scheduled RentAverage Scheduled

Rent PSFAverage Market

RentAverage Market

Rent PSF

1 Bedroom / 1 Bathroom 10 410 $657 $1.60 $725 $1.77

SFR House 1 1,255 $1,445 $1.15 $1,445 $1.15

Totals / Averages 11 487 $728 $1.50 $790 $1.62


S

RENT COMPARABLES MAP

PropertiesStark Street Court13327 SE Stark Street Portland, OR

Concord Plaza3121 SE 148th AvenuePortland, OR

Powell Court Villa12540 SE Powell Court Portland, OR

Eaton Village Apartments2500 SE 157th Avenue Portland, OR

Hideaway Apartments3224 SE 134th Avenue Portland, OR

Swan Court13718 SE Division Street Portland, OR

S

31

54

2

1

2

3

4

5

205

84

NE Burnside St

NE Halsey St

NE Glisan St

SE 122rd Ave

SE 136th Ave

SE 148th Ave

SE 174th Ave

SE 182nd Ave

SE 202nd Ave

SE 162nd Ave

SE 112th Ave

SE Stark St

SE Division St

SE Holgate Blvd

SE Foster Rd

SE Powell Blvd

26

Glendoveer Golf Course

Powell Butte Nature Park


RENT COMPARABLES

STARK STREET COURT13327 SE Stark Street, Portland, ORYear Built: 1942Total Units: 11

S

Unit type Units Sq Ft Rent Rent/Sq Ft1 BED / 1 BATH 10 410 $657 $1.60

SFR HOUSE 1 1,255 $1,445 $1.15

Average 11 487 $728 $1.50

CONCORD PLAZA3121 SE 148th Avenue, Portland, ORYear Built: 1977Total Units: 29

1

Unit type Units Sq Ft Rent Rent/Sq Ft1 BED / 1 BATH 2 684 $1,110 $1.62

2 BED / 1 BATH 27 949 $1,303 $1.37

Average 29 931 $1,290 $1.39

7KILLINGSWORTH • 12 UNITS • PORTLAND, OR

RENT COMPARABLES


2 BED / 1 BATH 4 720 $947 $1.32

Average 40 612 $911 $1.49


2 BED / 1 BATH 32 860 $950 $1.10

Average 48 790 $893 $1.13

POWELL COURT VILLA12540 SE Powell Court, Portland, ORYear Built: 1970Total Units: 40

2

EATON VILLAGE APARTMENTS2500 SE 157th Avenue, Portland, ORYear Built: 1973Total Units: 48

3


RENT COMPARABLES

HIDEAWAY APARTMENTS3224 SE 134th Avenue, Portland, ORYear Built: 1973Total Units: 13

4


2 BED / 1 BATH 3 900 $883 $0.98

3 BED / 1 BATH 4 1,200 $1,080 $0.90

Average 13 854 $821 $0.96


1 BED / 1 BATH 11 475 $827 $1.74

2 BED / 1 BATH 1 565 $1,128 $2.00

Average 19 461 $791 $1.71

SWAN COURT13718 SE Division Street , Portland, ORYear Built: 1968Total Units: 19

5

9KILLINGSWORTH • 12 UNITS • PORTLAND, OR

Word of Portland’s impressive livability is spreading across the country. Its mild temperatures, stunning natural surroundings and its growing craft food and beverage scene, among other attractions, are calling many. Portland, for these people, is the Oregon city of choice.

The Portland apartment market is viewed, regionally and nationally, as a strong market for the placement of investment capital. The city’s reputation as one of the nation’s top moving destination four years running (2013-2016) in United Van Lines’ annual National Movers Study—assures a continued renter demand.

Portland attracts an educated, active, environmentally conscious and creative community of people who stand behind the city’s

THE CITY OF ROSES

impressive variety and sustainability practices. You can have a decadent burger here—just don’t forget to compost the leftovers!

People who live in Greater Portland embrace its natural beauty—and the opportunity to try new things in a city that’s open to all walks of life. And, speaking of walking, Portland was made for foot traffic. With more than 150 miles of regional trails, and mixed-use neighborhoods with amenities close-by, it’s a great city to explore without a car. The area offers a strong, far-reaching public transit system—including the MAX light-rail lines—making an automobile seem not so necessary.

Portlanders are cyclists, too. Most residents live within a quarter mile of a bike lane,

neighborhood greenway, or multi-use path. Whether commuting to work or running everyday errands, many Portland residents make biking part of their daily routine.

Artists and artisans make their homes here and help maintain Portland’s quirky vibe while offering unique, hand-crafted goods and services. Large and small employers across a wide range of industries provide jobs—and economic stability—making Portland one of the most appealing cities in the nation.

From 2013-2015 Oregon was the #1 destination for people moving from other states. In 2016 Oregon was #2 and the greater Portland area remains at the heart of this mass migration.


EMPLOYMENTEMPLOYMENT Attracted by Portland’s educated workforce and favorable low cost of doing business, high-tech companies continue to open major branches — and relocate — to the area. Companies which recently opened major branches in Portland include: Airbnb, Google, Squarespace, Mozilla, Simple, Survey Monkey, SalesForce and New Relic, Inc.

Portland’s tech startup companies includes: Viewpoint, Jama Software, Thetus, Urban Airship, Acquia, Elemental Technologies, Act-On, Puppet Labs, The Clymb and Jive Software.

MAJOR EMPLOYERS - # of Employees

Intel - 18,500

Providence Health Systems - 16,139

Oregon Health Sciences University - 14,963

Nike - 8,500

Daimler Trucks - 2,800

Adidas - 1,200

12

10

65

2

8

4

0

Portland

US

Source: Multifamily NW Apartment Report

2011 20142012 20152013 20172016

Perc

enta

ge 9.0% 8.1%

7.3%

6.2% 5.1%

4.9% 4.2%

10.5% 9.5%

8.7%

6.7% 5.6%5.0% 4.1%

UNEMPLOYMENT RATEANNUAL: PORTLAND/VANCOUVER METRO AND U.S. (August 2011 - August 2017)


STARK STREET COURTPRICINGPrice $930,000

Per Unit $84,545

Per Square Foot $174

Projected Cap 6.04%

Avg Square Foot 487

Avg Lease Up Rent $728

Avg Rent per Sq Ft $1.50

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. ©2017 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.

2424 SE 11th Ave • Portland, OR 97214 • www.hfore.com • Phone: (503) 241.5541 • Fax: (503) 241.5581

TOURS AND INQUIRIES

Please do not disturb residents.

All tours and inquiries regarding Stark Street Court are to be directed to HFO Investment Real Estate at (503) 241.5541.

Jack Stephens • [email protected]

Greg Frick • [email protected]

Lee Fehrenbacher • [email protected]

Tyson Cross • [email protected]

Todd Tully • [email protected]

Adam Stanton-Smith • [email protected]


Investment Real Estate

Passion • Collaboration • Specialization2424 SE 11th Ave • Portland, OR 97214

www.hfore.com • (503) 241.5541

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