STARK STREET COURT 10 STUDIOS + SFR HOUSE PORTLAND, OR OFFERING MEMORANDUM. Investment Real Estate www. hfore.com (503)

Transcription

1 STARK STREET COURT 10 STUDIOS + SFR HOUSE PORTLAND, OR OFFERING MEMORANDUM Investment Real Estate www. hfore.com (503)

2 INVESTMENT OVERVIEW Stark 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. Property Highlights Duplex-style one-story units Well-maintained studios Convenient to Mall 205 Off-street parking 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. 2 HFO INVESTMENT REAL ESTATE

3 EXECUTIVE SUMMARY PRICE SUMMARY Price $930,000 Price Per Unit $84,545 NE Weidler St NE Halsey St Per Square Foot $174 Projected Cap Rate 6.04% * * Based on current scheduled rents and projected operations. ASSET DETAILS Address SE Stark Street Portland, OR Total Units 11 Year Built 1932 Stories One-story, duplex flats Two-story SFR home Approx. NR Sq Ft 5,355 Average Sq Ft 487 City Portland County Multnomah Acres 0.48 Parking Off-street SE 92nd Ave 205 Mall 205 NE 102rd Ave NE Glisan St NE Burnside St SE Stark St SE Cherry Blossom Dr SE Market St NE 122rd Ave SE 122rd Ave Stark Street Court David Douglas High School Glendoveer Golf Course SE 135th Ave TAX INFORMATION Tax ID R For More Information Jack Stephens jack@hfore.com SE 112th Ave SE Division St 2424 SE 11th Ave., Portland, OR (503) Fax: (503) STARK STREET COURT 11 UNITS PORTLAND, OR 3

4 OPERATIONS ANALYSIS INCOME RENTS VACANCY/CREDIT LOSS AND BAD DEBT OTHER INCOME EXPENSES 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. 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. 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. 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 1 Total 10 1 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 INSURANCE MANAGEMENT TURNOVER CAPITAL RESERVES 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. The insurance premium is estimated based on operations and average costs for insurance for similar properties. Insurance is estimated at $2,035 annually. 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%. The operations have been adjusted for turnover costs. Assuming professional, third-party management, the turnover cost is estimated at $1,980 annually. Operations for Stark Street Court include a lender-anticipated reserve requirement of $250 per unit, or $2,750 annually. 4 HFO INVESTMENT REAL ESTATE

5 OPERATIONS ANALYSIS Stark Street Court Income Unit Type Unit Count Square Feet Current Scheduled Rents Per Unit Average Scheduled Rent Average Scheduled Rent PSF Projected Operations Average Market Rent Scheduled Gross Rent $96,120 $8,738 $104,340 $9,485 Less: Vacancy/Credit Loss -$2,884 -$ % -$3,130 -$ % Net Rental Income $93,236 $8,476 $101,210 $9,201 Includes: Utility Charges $5,529 $ % $5,529 $ % Includes: Miscellaneous $1,526 $139 $1,526 $139 Total Other Income $7,055 $ % $7,055 $ % 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 $ % $6,387 $ % Insurance $2,035 $ % $2,035 $ % Total Utilities $14,097 $1, % $14,097 $1, % Fee Management $10,029 $ % $10,826 $ % Landscaping $2,175 $ % $2,175 $ % Maintenance/Repairs $4,668 $ % $4,668 $ % Turnover $1,980 $ % $1,980 $ % Reserves $2,750 $ % $2,750 $ % 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% Per Unit Average Market Rent PSF 1 Bedroom / 1 Bathroom $657 $1.60 $725 $1.77 SFR House 1 1,255 $1,445 $1.15 $1,445 $1.15 Totals / Averages $728 $1.50 $790 $1.62 % GOI STARK STREET COURT 11 UNITS PORTLAND, OR 5

6 RENT COMPARABLES MAP 84 Properties S 1 Stark Street Court SE Stark Street Portland, OR Concord Plaza 3121 SE 148th Avenue Portland, OR Glendoveer Golf Course NE Burnside St NE Halsey St NE Glisan St 2 Powell Court Villa SE Powell Court Portland, OR S SE Stark St Eaton Village Apartments 2500 SE 157th Avenue Portland, OR Hideaway Apartments 3224 SE 134th Avenue Portland, OR Swan Court SE Division Street Portland, OR SE 122rd Ave SE Division St 4 2 SE Holgate Blvd 5 SE 136th Ave SE 148th Ave 1 3 SE Powell Blvd SE 162nd Ave 26 SE 174th Ave SE 182nd Ave SE 202nd Ave 205 SE 112th Ave Powell Butte Nature Park SE Foster Rd 6 HFO INVESTMENT REAL ESTATE

7 RENT COMPARABLES S 1 STARK STREET COURT SE Stark Street, Portland, OR Year Built: 1942 Total Units: 11 Unit type Units Sq Ft Rent Rent/Sq Ft 1 BED / 1 BATH $657 $1.60 SFR HOUSE 1 1,255 $1,445 $1.15 Average $728 $1.50 CONCORD PLAZA 3121 SE 148th Avenue, Portland, OR Year Built: 1977 Total Units: 29 Unit type Units Sq Ft Rent Rent/Sq Ft 1 BED / 1 BATH $1,110 $ BED / 1 BATH $1,303 $1.37 Average $1,290 $1.39 KILLINGSWORTH 12 UNITS PORTLAND, OR 7

8 RENT COMPARABLES 2 3 POWELL COURT VILLA SE Powell Court, Portland, OR Year Built: 1970 Total Units: 40 Unit type Units Sq Ft Rent Rent/Sq Ft 1 BED / 1 BATH $907 $ BED / 1 BATH $947 $1.32 Average $911 $1.49 EATON VILLAGE APARTMENTS 2500 SE 157th Avenue, Portland, OR Year Built: 1973 Total Units: 48 Unit type Units Sq Ft Rent Rent/Sq Ft 1 BED / 1 BATH $778 $ BED / 1 BATH $950 $1.10 Average $893 $ HFO INVESTMENT REAL ESTATE

9 RENT COMPARABLES 4 5 HIDEAWAY APARTMENTS 3224 SE 134th Avenue, Portland, OR Year Built: 1973 Total Units: 13 Unit type Units Sq Ft Rent Rent/Sq Ft 1 BED / 1 BATH $617 $ BED / 1 BATH $883 $ BED / 1 BATH 4 1,200 $1,080 $0.90 Average $821 $0.96 SWAN COURT SE Division Street, Portland, OR Year Built: 1968 Total Units: 19 Unit type Units Sq Ft Rent Rent/Sq Ft 0 BED / 1 BATH $685 $ BED / 1 BATH $827 $ BED / 1 BATH $1,128 $2.00 Average $791 $1.71 KILLINGSWORTH 12 UNITS PORTLAND, OR 9

10 THE CITY OF ROSES 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 ( ) 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 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 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. 10 HFO INVESTMENT REAL ESTATE

11 EMPLOYMENT EMPLOYMENT 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, UNEMPLOYMENT RATE ANNUAL: PORTLAND/VANCOUVER METRO AND U.S. (August August 2017) Percentage % 9.0% 9.5% 8.1% 8.7% 7.3% 6.7% 6.2% 5.6% 5.1% Portland US 5.0% 4.9% 4.1% 4.2% Source: Multifamily NW Apartment Report STARK STREET COURT 11 UNITS PORTLAND, OR 11

12 12 HFO INVESTMENT REAL ESTATE

13 STARK STREET COURT PRICING Price $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 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) Jack Stephens Greg Frick Lee Fehrenbacher Tyson Cross Todd Tully Adam Stanton-Smith 2424 SE 11th Ave Portland, OR Phone: (503) Fax: (503) 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 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. STARK STREET COURT 11 UNITS PORTLAND, OR 13

14 Investment Real Estate Passion Collaboration Specialization 2424 SE 11th Ave Portland, OR (503)