BERRYDALE APARTMENTS 27 UNITS - MEDFORD, OR OFFERING MEMORANDUM. Investment Real Estate www. hfore.com (503)

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1 BERRYDALE APARTMENTS 27 UNITS - MEDFORD, OR Investment Real Estate www. hfore.com (503) OFFERING MEMORANDUM

2 N Vancouver Avenue 4047 N Williams Ave N Williams Avenue N Mason Street INVESTMENT OVERVIEW The Berrydale Apartments is an excellent value-add opportunity located just minutes from Medford s Rogue Valley Mall. Built in 1965, by the current owners, the property consists of spacious one and two bedroom units in garden-style buildings. Current rents are below market averaging $694 per unit, or $1.06 per square foot allowing immediate upside for new investors to increase rents to market. In addition to spacious units in a low-density style layout, the property also includes some covered parking. Berrydale Apartments has excellent egress onto I-5, Crater Lake Highway, and Table Rock Road, and is convenient to numerous area shopping centers, schools, entertainment and dining destinations. The property is just five minutes by car from Medford s Rogue Valley International Airport. Nearby Amenities REI Target Natural Grocers Trader Joes Bed Bath & Beyond In-N-Out Burger 2 HFO INVESTMENT REAL ESTATE

3 EXECUTIVE SUMMARY PRICE SUMMARY PRICING Price $3,200,000 Price Per Square Foot $2,350,000 $320 Per Unit $87,037 Per Sq Ft $133 PHYSICAL Highest Achieved INFORMATION CityCap Rate 6.18% Portland County Multnomah Plan ASSET District SUMMARY NP - Northwest Plan District Current Property Zoning Address - Central 632 Berrydale Employment Avenue Proposed Zoning* CM3 Medford, - Mixed Oregon Use/Urban Center Height County 65 Jackson ft Maximum Total UnitsHeight* 7527 ft bonus provision FAR Year Built 3:11965 Maximum Stories FAR* 5:11 bonus and 2 stories provision Acres Approximate Sq Ft Parcel 17, (5,000 sf) Average Unit Sq Ft Parcel (5,000 sf) 653 *Per 2035 Comprehensive Plan 238 Beall Ln 99 Sage Rd Merriman Rd Berrydale W McAndrews 5 W Jackson St MEDFORD Rouge Valley Mall Biddle Rd Rogue Valley International- Medford 62 5 Poplar Dr Medford Center 62 Delta Waters Rd Crater Lake Ave E McAndrews Spring St E Jackson St E Main St N Keene Way Dr TAX INFORMATION Tax ID For more information: Todd Tully todd@hfore.com Greg Frick greg@hfore.com N Ross Ln W Main St W 8th St S Columbus Ave W 11th St Stewart Ave S Holly St Siskiyou Blvd 99 5 Highland Dr 2424 SE 11th Avenue, Portland, Oregon (503) Fax: (503) BERRYDALE APARTMENTS MEDFORD, OR 3

4 EXCELLENT LOCATION Demand is high for properties like Berrydale with its superior close-in location. The Berrydale s spacious units, covered parking, and low- density feel provides tenants a safe and enjoyable place to call home.

5 PROPERTY AMENITIES Manicured landscaping On-site laundry Covered off-street parking Decks or patios AC units Updated kitchens* Updated bathrooms* *Select units

6 OPERATIONS ANALYSIS INCOME Scheduled rents average $694 per unit, or $1.06 per square foot. Based on current market trends, projected rents are set at $750 per unit, or $1.15 per square foot. VACANCY/CREDIT LOSS, BAD DEBT AND CONCESSIONS For underwriting purposes, Berrydale Apartments is analyzed using a 5.0% vacancy rate based on lender underwriting requirements. Given the strength of the housing market and low vacancy rates throughout the entire Medford area, vacancy factors for underwriting purposes include concessions and bad debt. EXPENSES Berrydale Apartments operating expenses assume the property will continue to be managed by a professional third-party management company. Changes to the assumed costs adjust projected expenses to $3,180 per unit. The projected expenses represent standard operating expenses at similarly sized properties. PROPERTY TAXES Property taxes reflect projected 2016/2017 gross property taxes, per the Jackson County assessors office. INSURANCE Operations reflect the current premium of $6,912 annually, or $256 per unit. MANAGEMENT The management fee assumes professional, third-party management at a rate of 8.0% of GOI. MAINTENANCE/REPAIR Maintenance and repair costs account for $13,397 based on projected operations. TURNOVER Turnover costs for operations are projected at $6,750 per year for make-ready services. 6 HFO INVESTMENT REAL ESTATE

7 OPERATIONS ANALYSIS Bedroom / Bathroom Unit Count Square Foot Scheduled Rent Rent per Sqft Highest Achieved 1 Bedroom / 1 Bathroom 18 $658 $700 2 Bedroom / 1 Bathroom 9 $764 $ $694 $1.06 $750 Rent per Sqft $1.15 INCOME Scheduled Gross Rent 224,700 8, ,000 9,000 Less: Vacancy/Credit Loss * (11,235) (416) -5.0% (12,150) (450) -5.0% Net Rental Income $213,465 $7,906 $230,850 $8,550 Total Other Income $350 $13 0.2% $350 $13 0.2% Gross Operating Income - Residential $213,815 $7,919 $231,200 $8,563 Avg Effective Income Per Unit $660 $714 EXPENSES Scheduled Rents as of 07/2017 Highest Achieved 2017 YTD 5-months Annualized Projected Expenses Real Estate Taxes 2016/17 Net Taxes 20, % 20, % Insurance 6, % 6, % Total Utilities 2016 Year End 13, % 13, % Fee Management 21, % 18, % Maintenance/Repairs 13, % 13, % Turnover 6, % Capital Reserves 6, % 6, % Expenses (82,507) (3,056) -39% (85,853) (3,180) -37% Net Operating Income (NOI) $131,308 $4,863 61% $145,347 $5,383 63% *Historically the property has operated at/below 3% vacancy loss. BERRYDALE APARTMENTS MEDFORD, OR 7

8 MEDFORD/JACKSON COUNTY Medford is the county seat of Jackson County, and is located on I-5 just north of the California border. It is located between Grants Pass and Ashland, two of Southern Oregon s most prominent cities for jobs and tourism. Medford had a 2016 population of 78,500 and 49.7% of housing units are renteroccupied. Median household income in Medford is $41,931 with almost 30% of households making between $50,000-$100,000. Area Employment In May 2017, the unemployment rate in Jackson County was 4.2%, below the national average. Employment in the county has been increasing steadily since February 2011, and is currently 1.8% above where it was a year earlier. The largest industries in Jackson County are trade, transportation and utilities, and health care. Parks The City of Medford boasts 33 public parks, including U.S. Cellular Community Park (USCCP). USCCP is a $32.5 million, 132-acre sports park located between US Highway 99 and I-5. It boasts all-weather artificial turf fields as well as 1.1 million square feet of synthetic grass and state-of-the-art lighting systems. Jackson Park Pool, located adjacent to Jackson Elementary School, is a public facility open in the summer with a pool and playground. Northeast of the incorporated city of Medford is Prescott Park, a 1,740-acre park with nature trails and scenic lookouts. Prescott Park has 6 designated trailheads as well as a public picnic area. Company Headquarters Local Scene Medford is best known as the headquarters of Harry & David premium food gifts and Lithia Motors. It s also a popular brew town with over a dozen craft brewery locations. Schools and Higher Education The Medford School district serves 14,000 students with 14 elementary schools, two middle schools, three high schools, and four charter schools. Residents of the Berrydale Apartments attend Howard Elementary, Hedrick Middle and North Medford High. District transportation is provided to the middle and high schools, and Howard Elementary is located less than a mile from the property. Hedrick Middle School students outperform their statewide peers in Math, English, and Science, with 80% of students performing at grade level or higher in Science. Southern Oregon University is located in Ashland with additional facilities in Medford. The university enrolls 6,100 students, and employs 600 faculty and staff members. The Medford Campus of Southern Oregon University offers majors in business, communication, human services, psychology, and general education. Rogue Community College also has a campus in Medford, in addition to two other campuses in nearby Grants Pass and White City. Greg Frick greg@hfore.com Todd Tully (971) todd@hfore.com (971) Cody Vaz Jack Stephens Tyson Cross cvaz@hfore.com Greg Frickjack@hfore.com Tyson tyson@hfore.com Cross (971) greg@hfore.com (971) tyson@hfore.com (971) (971) (971) Lee Fehrenbacher Lee lee@hfore.com Fehrenbacher lee@hfore.com (971) (971) Todd Tully todd@hfore.com Jack Stephens (971) jack@hfore.com (971) Cody Vaz cvaz@hfore.com (971) SE 11th Avenue 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.