307 SE HAWTHORNE USER VALUE ADD CENTRAL EASTSIDE VIEW CREATIVE SPACE $7,000,000 $264/RSF 9,000 SF AVAILABLE NOW

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1 307 SE HAWTHORNE USER VALUE ADD PORTLAND OREGON $7,000,000 $264/RSF CENTRAL EASTSIDE VIEW CREATIVE SPACE 9,000 SF AVAILABLE NOW VIBRANT HAWTHORNE AREA BUILDING FULLY RENOVATED CREATIVE AMENITIES STEVE DODDS DENIS O NEILL denis.oneill@colliers.com

2 CONTENTS CALL FOR PRICING SECTION 1: EXECUTIVE SUMMARY The Offering Property Overview Investment Highlights SECTION 2: PROPERTY DESCRIPTION Photos Building Description Floor Plans Area Amenities SECTION 3: FINANCIAL INFORMATION Rent Roll 2017 Expenses Projected User Return SECTION 4: MARKET OVERVIEW Portland Office Overview Sale Comparables Lease Comparables Competitive Set

3 SECTION 1: EXECUTIVE SUMMARY

4 THE OFFERING The Howard Cooper Building SE 3rd Avenue and SE Hawthorne With 9,000 square feet of built-out creative space and sweeping views of the Portland s skyline, the property offers an immediate opportunity for users to purchase a building in the heart of Central Eastside at significantly below replacement cost. The first two floors are 100% occupied at $11.39 NNN, substantially below market rents. Short term leases provide upside or expansion options. The building was seismically upgraded when fully renovated in Colliers International has been retained by the Owner to exclusively market the property and will conduct tours with any prospective purchaser, with reasonable notice. PROPERTY OVERVIEW Price Rentable SF $7,000,000 ($264/RSF) Location 307 SE Hawthorne Blvd Portland, OR Net rentable area 26,559 SF Gross building area 28,500 SF Floor plates 9,500 Gross SF Site coverage 100% Zoning EXd Year Built 1925 Renovated & Seismic Upgrade 2000 % Leased 58% Stories 3 floors Parking Street parking - SE 3rd, SE Hawthorne

5 INVESTMENT HIGHLIGHTS VALUE ADD OPPORTUNITY At $264/RSF, priced significantly below replacement cost Below market rents - $17.91 mgross, $11.39 net average Short term leases allow immediate value add or expansion 15,383 square feet, 2 floors, of leased multi-tenant creative space Income can be increased by adding load factor and expense reimbursement Demand for second generation creative space driving rising rents UNIQUE PROPERTY 9,000 SF of built-out creative space available 2nd floor expansion possible in 2019 Sweeping views of Portland s skyline Superb transit location at base of the Hawthorne Bridge and a bike score of 100 Building fully renovated and seismically upgraded in 2000 Structure will allow addition of a 4th floor penthouse Exposed wood beams and 14 foot ceiling heights Hardwood floors and quality finishes Bike parking and showers

6 SECTION 2: PROPERTY DESCRIPTION

7 PHOTOS CALL FOR PRICING

8 BUILDING DESCRIPTION Address Assessor s Parcel Number Zoning Year Built 1925 Renovated & Seismic Upgrade 2000 Exposure Lobby Foundation Exterior Walls Flooring Interior Outside Walls Ceilings Interior Build-out 307 SE Hawthorne Blvd Portland, OR R , Multnomah County EXD, Central Employment w/ design overlay High visibility from Hawthorne Bridge Access to the main lobby is provided at SE 3rd Avenue Concrete Painted concrete A combination of polished concrete, hardwood, tile and commercial grade carpet Exposed concrete Exposed The building is a former industrial building converted to multi-tenant creative office. The first and second floors have a lobby while the entire third floor has been occupied by a full floor user. There is a set of common area women s and men s restrooms on the second floor. The building has two stairwells and one elevator. Third Floor Build-out Windows Exterior doors Heating Air Conditioning Fire protection The third floor has hardwood floors, high ceilings with black industrial insulation. There is a set of men s and women s restrooms, a restroom with a shower, and a kitchen. Glass in aluminum frames Glass in metal frames Forced air Central HVAC Sprinkler system

9 FLOORPLANS 1ST FLOOR CALL FOR PRICING Suite 102 Stroempel 2,040 SF Common Area Suite 200 Anderson 5,206 SF Suite 100 Veenker 1,600 SF Non-Rentable SF Common Area Non-Rentable SF Suite 150 Abbott 3,115 SF Suite 250 Zembula 3,422 SF 2ND FLOOR

10 FLOORPLANS 3RD FLOOR Non-Rentable SF CBD Suite 300 VACANT 8,853 SF HAWTHORNE BRIDGE

11 STREETCAR MAX Morrison Bridge STREETCAR CENTRAL EASTSIDE Bike Score: 100 DOWNTOWN Transit Score: 82 STREETCAR MAX Hawthorne Bridge Marquam Bridge Tilikum Crossing STREETCAR MAX AMENITIES Walk Score: 78 Ross Island Bridge

12 SECTION 3: FINANCIAL INFORMATION

13 PROJECTED RENT ROLL (with user) APPROX % OF START EXPIR. MONTHLY ANNUAL ANNUAL LEASE RENT INCREASES TENANT UNIT # RENTABLE SQ. FT DATE DATE BASE RENT BASE RENT RATE/SF TYPE DATE RATE/SF OPTIONS 1 Lana Veenker Casting, LLC 100 1, % 1/26/11 MTM $2, $24,720 $15.45 MGross Janitorial 2 JR Abbott Construction Co , % 6/7/12 12/31/20 $4, $51,228 $16.45 MGross 1/1/19 $4,397 (1-3 Yr) FMV Janitorial 3 George Stroempel 102 2, % 6/12/03 MTM $1, $18,000 $8.82 Gross None Subtotal Floor 1 6,755 4 Anderson Dabrowski Architects 200 5, % 2/6/03 6/30/20 $7, $85,331 $16.39 MGross 7/1/19 $7,324 None Janitorial 2015 Base Year 5 Zembula Inc 250 3, % 4/19/12 7/31/19 $8, $96,250 $28.13 MGross Prepaid None (Program Management sublease) Janitorial Subtotal Floor 2 8,628 6 User 300 8, % 8/4/60 $265,590 $30.00 NNN Total 24, % $45, $541,119 $22.33 Potential Load Factor 2,323 -$265,590 Total Rentable 26,559 In - Place $275,529 The information contained herein has been obtained from sources we deem reliable. We do not, however, guarantee its accuracy. All information should be verified prior to purchase.

14 2017 EXPENSES PROJECTED USER RETURN 2017 Annual EXPENSES/SF 2018 Annual 105% OCCUPIED SF 15,383 24, Operating Expenses Alarm/Security $10, $0.68 Bank Fees $39.16 $0.00 Elevator $4, $0.30 Garbage $5, $0.34 Insurance $6, $0.42 Janitorial $5, $0.39 Maintenance $22, $1.46 RE Tax & Licences $36, $2.36 Utilities $25, $1.65 Subtotal CAMS $116, $7.60 Property Management Fee $6, $0.41 $30,000 TOTAL EXPENSES $123, $8.00 $153,023 Tenants pay for janitorial $6.31 User % 36.53% The information contained herein has been obtained from sources we deem reliable. We do not, however, guaranteee its accuracy. All information should be verified prior to purchase. PRICE $7,000,000 CAPITALIZATION RATE 6.74% PRICE PER RENTABLE SQUARE FOOT 26,559 $264 Income SF Monthly Rent Annual Rent SF Occupied Rent 15,383 $22, $275,529 $17.91 User Rent NNN 8,853 $265,590 $30.00 Op Exp Reimbursement 15,383 $60,985 $3.96 User NNN Op Exp Reimbursement 8,853 $55,897 $6.31 Gross Income $658,001 $27.15 Vacancy 5.0% $(32,900) Effective Gross Income 24,236 $52, $625,101 $25.79 Less 2018 Operating Expenses Property Taxes Operating Expenses Total 24,236 $(153,023) $(6.31) Projected 2018 NOI $39, $472,078 $19.48 Leveraged Return Calculator Loan 70% $4,900,000 1% fee 1% $49,000 Equity $2,100,000 Total Equity $2,149,000 Rate 4.75% Amortization Term 25 Due 10 Net Operating Income $39,340 $472,078 $17.77 Debt Service $(27,936) $(335,229) $(12.62) Pre-Tax Cash Flow $11,404 $136,849 $5.15 Pre-Tax Leveraged Cash on Cash Return 6.37% Principal Reduction $104,740 Total Return $241,588 Total Return on Equity 11.24% The information contained herein has been obtained from sources we deem reliable. We do not, however, guaranteee its accuracy. All information should be verified prior to purchase.

15 SECTION 4: MARKET OVERVIEW

16 THE PORTLAND ADVANTAGE #1 Moving Destination of all US states Highest % of Bike Commuters of Any US City 45.5% with a Bachelor s Degree or Higher 4.3% Unemployment Rate (MSA) 530+ Square Miles Served by Public Transport 95,000 + Tech Employees Economy Nestled at the confluence of the Willamette and Columbia Rivers in northwestern Oregon, lies the city of Portland, nicknamed the Rose City, The City of Roses, and Beervana because it has more micro-breweries inside the city limits than any other city in the world. Once reliant on timber, fishing and agriculture, Portland s diversified economy now includes technology, healthcare and education with a special emphasis on clean technology, advanced manufacturing, software and active wear. Fortune 1,000 companies Nike (#115), Precision Castparts (#322), Stancorp Financial Group (#755) and Schnitzer Steel (#803) call Portland home. Providence, Legacy and Kaiser support a combined 33,863 jobs, underscoring the importance of the healthcare industry to the Portland-Vancouver-Hillsboro MSA. Straddling the healthcare and education sectors is the Oregon Health & Science University (OHSU). With over 13,000 employees and approximately 3,000 students, this nationally renowned public university is one of the nation s top 20 biomedical research facilities. Population The City of Portland accounts for more than one quarter of the PMSA s approximately 2.3 million residents. It is the 29th largest city in the country. The metro area s median age is 37, a year younger than both San Francisco s and Philadelphia s. Population is projected to reach 2.8 million by PORTLAND STATS #1 Best Places for Business and Careers (Forbes) #2 Nationally in High-Tech GDP Concentration #3 on ULI s Overall Real Estate Markets to Watch in 2017 #8 World s best cities for Millennials - Matador Network (2016) TOP 10 U.S. Destinations for Solo Travel - FlipKey (2016) Population growth of 6.14% is projected from

17 Downtown Portland Employment Growth Education > Who is moving to Portland? Number of Employees 98,000 96,000 94,000 92,000 90,000 88,000 86,000 84,000 82,000 5,000 89% 29% DOWNTOWN EMPLOYMENT BY INDUSTRY 26% Tech & Information 19% Education, Health & Public Services 16% Entertainment & Service Total Enterprises Total Employees 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, TECH JOBS ADDED BETWEEN ,000 COMPANIES THAT REPORTED BUSINESS IS HEALTHY 89.9% 0 Number of Enterprises 12,000 10,000 8,000 6,000 4,000 2,000 0 Children (0-17) 3,809 4,108 College Age (18-24) UNEMPLOYMENT RATE 4.3% YOY JOB GROWTH 3.0% 9,720 Root-Setting (25-34) 3,206 Peak Working (35-44) 6,122 Peak Earning (45-54) 41% are Millennials 2,416 Late Career (55-64) 4,516 Retirees (65+) MEDIAN HOUSEHOLD INCOME $60,300 PORTLAND METRO ESTIMATED POPULATION GROWTH BY ,000 14% Finance & Real Estate 11% Management & Support Services 8% Trade & Transportation 5% Other COMPANIES THAT PLAN TO EXPAND IN THE NEXT 2 YEARS 29.9% 45.5% OF WORKERS HAVE A BACHELORS DEGREE OR HIGHER 10% INCREASE # OF RESIDENTS WITH BA OR HIGHER SINCE OUTPACING SAN FRANCISCO, SEATTLE AND SAN JOSE. 12.8% OF WORKERS HAVE A GRADUATE DEGREE

18 Award-Winning Transit Fastest Growing Tech Market in the U.S. Portland s high concentration of tech business has earned it the title of Silicon Forest. 5.7% OF COMMUTERS WALK TO WORK (U.S. average of 2.9%) PORTLAND MIGHT BE THE MOST WALKING, BIKING, AND PUBLIC TRANSIT FRIENDLY CITY ON THE WEST COAST. - WALKSCORE.COM 7.2% OF COMMUTERS BIKE TO WORK (Highest in the Nation) 11.9% OF COMMUTERS TAKE PUBLIC TRANSPORTATION (Ranked Top 10 Transit Friendly City by WalkScore.com) #1 AIRPORT IN THE NATION (Ranked by Travel + Leisure ) NEARLY 60 MILES OF MAX LIGHT RAIL THROUGHOUT THE REGION AVERAGE COMMUTE TIME OF 24.2 MINUTES (Below National Average) 84.3% OF OREGON S TECH WORKERS LIVE IN PORTLAND 49,770 SOFTWARE & TECHNOLOGY JOBS IN PORTLAND MSA 1/3 LARGER SHARE OF TECH JOBS IN PORTLAND THAN NATIONAL AVERAGE $103,000 AVERAGE SOFTWARE DEVELOPER SALARY IN PORTLAND

19 OFFICE MARKET OVERVIEW USER SALE COMPARABLES VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE YOY FORECAST YOY FORECAST YOY FORECAST YOY FORECAST Eastside has incredibly low vacancy at 3.29%, which is down 51 basis points since Q and 611 basis points since Q NOTABLE DEVELOPMENT PROJECTS PROPERTY SUBMARKET DEVELOPER/OWNER SF PRELEASE DELIVERY TYPE 2424 SE 9th Ave Central Eastside SolTerra Systems 35,000 68% Q N *The Silica NE Close In Rujax V, LLC 31,000 0% Q N Flatiron PDX NE Close-In Southern Miss, LLC 24,300 27% Q N Field Office - East NW Close In project^ 165,653 25% Q N 4000 Columbia House Blvd St Johns Central Vancouver 9North CBD Williams & Dame/Miller Global *The Waterfront Block 6 West Vancouver CBD Killian Pacific 45,000 67% Q N 202,168 0% Q N Gramor 77,000 45% Q N Heartline (Pearl Block 136) CBD Security Properties 70,702 90% Q N Broadway Tower (office portion) CBD BPM Real Estate 177,800 66% Q N 7 SE Stark Lloyd District Harsch Investment Properties 70,000 43% Q N Redfox Commons Guilds Lake L&L Investment Partners 60,000 0% Q AR N = NEW CONSTRUCTION AR = ADAPTIVE REUSE R = RENOVATION COLLIERS PORTLAND Q Industrial Market Report 10 % VACANCY THOUSAND SQUARE FEET ABSORPTION Address 307 SE Hawthorne Blvd SE Clay St SE 6th Ave 1435 NW Northrup St Square Feet 26,559 SF 4,026 SF 6,700 SF 6,022 SF Sale Date - Dec 2017 Aug 2017 Mar 2016 Sale Price - $1,651,000 $2,700,000 $8,000,000 Price PSF - $ $ $ Year Built Notes Renovated in 2000 Seismic upgrade 3 Seismic update & renovated to creative office 2 Needs seismic upgrade 1 Million SF UNDER CONSTRUCTION Down 35% since Q Nearly 40% pre-leased 64% CBD / 36% Suburban $30.37 CLASS A RENT 1

20 LEASE COMPARABLES COMPETITIVE SET Moonshine Events, LLC Tullius Healthnotes Hacker Architects Eastside Exchange Lloyd 700 Waterman Building Clay Creative 1,950 SF 1,749 SF 5,754 SF 14,076 SF Start Date: 7/15/16 Start Date: 4/1/16 Start Date: 9/1/17 Start Date: 4/1/18 Term: 60 months Term: 62 months Term: 20 months Term: 18 months Rate: $27.00/SF NNN Rate: $31.00/SF NNN Rate: $23.00/SF FSG Rate: $36.00/SF FSG Olympic Mills Eastbank Commerce Center LeftBank Washington High School TI: $5.00/SF TI: $15.00/SF TI: $0.00/SF TI: $0.00/SF 0 months free rent 2 months free rent 2 months free rent 0 months free rent 13,063 RSF Available Available Now 9,955 RSF Available Available Now 8,197 RSF Available Available Now 3,704 RSF Available Available Now $29.50/SF MG $22.00/SF NNN $23.00/SF NNN $36.00/SF FS 13,533 SF Typical Floor 23,723 SF Typical Floor 19,628 SF Typical Floor 9,587 SF Typical Floor

21 STEVE DODDS Vice President DENIS O NEILL Senior Vice President denis.oneill@colliers.com 851 SW Sixth Avenue, Suite 1200 Portland, Oregon