WHITMAN 8 Units Vancouver, Washington OFFERING MEMORANDUM

WHITMAN 8 Units Vancouver, Washington OFFERING MEMORANDUM

INVESTMENT SUMMARY ASSET SUMMARY Property Location County Total Units 8 Whitman 2901-2915 NE Whitman Ave Vancouver, WA 98662 Clark Year Built 1977 Approx. NR Sq Ft 8,200 Average Sq Ft 1,025 PRICING Price $1,100,000 Price Per Unit $137,500 Per Square Foot $134 Scheduled Cap Rate 5.10% Projected Cap Rate 6.09% FOR MORE INFORMATION Todd Tully todd@hfore.com Jack Stephens jack@hfore.com Greg Frick greg@hfore.com HFO Investment Real Estate 2424 SE 11th Avenue, Portland, Oregon 97214 www.hfore.com (503) 241.5541 Fax: (503) 241.5548 Brokers licensed in Oregon and Washington. 2 HFO INVESTMENT REAL ESTATE

INVESTMENT SUMMARY The Whitman Apartments are well situated along NE Fourth Plain Boulevard just walking distance south of the Van Plaza Shopping Mall, which gives access to retailers such as Target, Walmart, Bank of America, and 24 Hour Fitness. This strategic location also benefits tenants with excellent egress onto both the SR-500 and I-205 freeways, which places Portland only minutes away. The apartments are comprised of spacious 2 bedroom 1 bathroom, 3 bedroom 1 bathroom, and 3 bedroom 2 bathroom units; with several units having attached garages. All units benefit from spacious backyards and off-street parking. PROPERTY HIGHLIGHTS Large townhome units and single level flats Each unit has an attached garage In-unit washer and dryer Conveniently located near major employers This 8-unit asset offers the rare opportunity for a buyer to acquire a property with significant rental upside (average rents are $1,019 with market rents exceeding $1,125), in one of the fastest growing markets in the Portland MSA. WHITMAN 8 UNITS VANCOUVER, WA 3

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LOCATION Vancouver Lake Regional Park Hazel Dell South Hazel Dell North Orchards NE 63rd st 5 WASHINGTON 500 NE Fourth Plain Blvd Vancouver Mall Royal Oaks Country Club 205 Orchard Market Center VANCOUVER Hayden Island Fort Vancouver National Historical Site Pearson Field Whitman 14 Columbia River OREGON Portland International Airport 6 HFO INVESTMENT REAL ESTATE

VANCOUVER, WASHINGTON Demand for rental housing in Vancouver and Clark County as a whole is strong, while the supply is limited. In its Fall 2018 Apartment Report, Multifamily NW noted that the vacancy rate is 3.72% for West Vancouver and 4.26% for East Vancouver. REIS reported Greater Portland s annual effective rent growth at 3.3% for 2017 while the website RentCafe estimated it at 4%. Since 2015, the Portland area has been one of the top rent growth markets in the U.S. As the city of Portland has increased development fees, implemented inclusionary zoning, and required landlords to assist with tenant relocation costs, Vancouver has become a more attractive location for investors interested in benefiting from the Portland Metro Area s sustained growth. Vancouver is home to the Columbia River Economic Development Council (CREDC). Since its 1982 inception, CREDC has helped create more than 28,000 jobs, with a cumulative annual payroll of $1.2 billion for the Southwest Washington area. The organization is funded by more than 135 investor companies, spread across 19 industries. DEMOGRAPHIC FACTORS Clark County composes approximately 19.3% of the Portland/Vancouver s estimated 2,424,955 residents, according to the U.S. Census Bureau s recent calculations. During the past decade, Clark County has undergone significant population growth. Two factors have spurred this continued growth: an increase in regional employment and affordable housing prices, relative to the balance of the Portland MSA. Clark County s population was 474,643 in 2017 an increase of 97% since 1990, when its population was 240,883. Since 2010, Clark County s population has increased 11.6%, while Portland s Multnomah County has grown by 9.8%. Approximately 37% of Clark County s population lives within the Vancouver city limits. DEMAND GENERATORS In recent years, Clark County s economy has expanded from its traditional manufacturing sectors to semiconductors, high-tech products and healthcare. PeaceHealth SW Medical Center, Vancouver s largest employer, anticipates that it will add 1,000 more jobs by 2020. INCOME IN VANCOUVER As will be explained elsewhere in this section, Washington s tax structure differs significantly from the rest of the Portland MSA. Personal income is another major factor in determining the real estimate of demand in any given market. The U.S. Census Bureau estimates the median household income for Clark County in 2016 was $62,879. VANCOUVER, WASHINGTON MAJOR EMPLOYERS These are Clark County s top employers, according to the Vancouver Business Journal s 2018 Book of Lists: Employer Full Time Description Employees PeaceHealth 4,488 Hospital Vancouver Public Schools 3030 Public school district Evergreen Public Schools 2882 Public school district Legacy Salmon Creek 1946 Medical center Medical Center Clark County Washington 1566 Local government Battle Ground Public 1417 Public school district Schools The Vancouver Clinic 1374 Multi-specialty healthcare Bonneville Power 1095 Utility Administration City of Vancouver 1045 Local government WaferTech, LLC 1015 Silicon wafer manufacturing SEH America 774 Silicon wafer manufacturing Banfield Pet Hospital 745 Nation s largest vet practice Dick Hannah Dealerships 686 Auto dealers WHITMAN 8 UNITS VANCOUVER, WA 7

COMPARABLE SALES 1 2 3 CREEKSIDE MANOR 2601 Rossiter Lane Vancouver, WA Total Units: 20 Year Built: 1967 Avg Unit Size: 1,300 Sale Date: 7/23/2018 List Price: $3,390,000 $ / Unit: $169,500 $ / Sq Ft: $130 Cap Rate: 5.83% PRIMROSE PARK I AND II 3512 Kauffman Avenue Vancouver, WA Total Units: 11 Year Built: 1970 Avg Unit Size: 909 Sale Date: 6/30/2017 Sales Price: $1,420,000 $ / Unit: $129,091 $ / Sq Ft: $142 Cap Rate: 5.38% 2ND STREET TOWNHOMES 15912 SE 2nd Street Vancouver, WA Total Units: 8 Year Built: 1976 Avg Unit Size: 1,016 Sale Date: 5/11/2017 Sales Price: $975,000 $ / Unit: $121,875 $ / Sq Ft: $120 Cap Rate: 4.62% 8 HFO INVESTMENT REAL ESTATE

COMPARABLE SALES 4 ROYAL CREST 2710 NE 86th Avenue Vancouver, WA Total Units: 40 Year Built: 1972 Avg Unit Size: 1,299 Sale Date: 2/10/2017 Sales Price: $5,482,500 $ / Unit: $137,063 $ / Sq Ft: $105 WHITMAN 8 UNITS VANCOUVER, WA 9

OPERATIONS ANALYSIS WHITMAN 8 UNITS VANCOUVER, WASHINGTON RENT ROLL ANALYSIS: MARKET RENTS Unit Type Unit Square Average Scheduled Rents Average Market Rent per Average Scheduled Rents Average Market Rent Count Feet per Sq Ft Sq Ft 2 Bedroom / 1 Bathroom 4 950 $950 $1.00 $1,075 $1.13 3 Bedroom / 1 Bathroom 2 1100 $1,000 $0.91 $1,150 $1.05 3 Bedroom / 2 Bathroom 2 1100 $1,175 $1.07 $1,200 $1.09 Totals / Averages 8 1,025 $1,019 $0.99 $1,125 $1.10 Income Current Scheduled Rents Projected Operations Note Scheduled Gross Rent $97,800 $12,225 $108,000 $13,500 1 Less: Vacancy/Credit Loss -$4,890 -$611-5.0% -$5,400 -$675-5.0% 2 Net Rental Income $92,910 $11,614 $102,600 $12,825 Other Income $500 $63 $2,740 $343 3 Includes: Utility Billing (RUBs) $0 $0 $2,240 $280 Includes: Miscellaneous $500 $63 $500 $63 Gross Operating Income $93,410 $11,676 $105,340 $13,168 Expenses Projected Operations Per Unit % GOI Projected Operations Per Unit % GOI Real Estate Taxes $10,705 $1,338 11.5% $10,705 $1,338 10.2% 4 Insurance $2,500 $313 2.7% $2,500 $313 2.4% 5 Total Utilities $7,889 $986 8.4% $7,889 $986 7.5% Fee Management $7,473 $934 8.0% $8,427 $1,053 8.0% 6 Landscaping $1,200 $150 1.3% $1,200 $150 1.1% Maintenance/Repairs $3,200 $400 3.4% $3,200 $400 3.0% 7 Turnover $1,600 $200 1.7% $1,600 $200 1.5% Reserves $2,000 $250 2.1% $2,000 $250 1.9% 8 Total Expenses -$37,362 -$4,670-40% -$38,316 -$4,790-36% Net Operating Income (NOI) $56,048 $7,006 60% $67,024 $8,378 64% 10 HFO INVESTMENT REAL ESTATE

OPERATIONS ANALYSIS WHITMAN 8 UNITS VANCOUVER, WASHINGTON 1. RENTS Rents are based on an October 2018 rent roll. Currently scheduled rents average $1,019 per unit or $0.99 per square foot. The projected rents are based on highest-achieved leases at Whitman. 2. VACANCY The projected operations stabilize vacancy at 5.0%. The property currently has no vacant units. 3. OTHER INCOME The property currently does not charge for Resident Utility Billbacks (RUBs). A new owner could implement RUBs to take advantage of that opportunity. Projected operations show other income totaling $2,740. 4. PROPERTY TAXES Clark County has published uncertified assessed property values for the 2019 tax year. Final values and millage rates will be published December 2018. For this reason taxes have been kept at the 2018 threshold of $10,705. 5. INSURANCE Property insurance reflects the current policy premium of $2,500 annually. 6. MANAGEMENT FEE The fee management includes administration, advertising, and payroll costs. The management fee has been adjusted to reflect costs for a property that is managed by an independent, third-party management company. 7. REPAIR & MAINTENANCE (R&M) AND TURNOVER Repairs and maintenance for Whitman are projected at $400 per unit, or $3,200 annually. In addition to R&M, we project turnover costs to be $1,600, or $200 per unit. 8. RESERVES Lenders require reserves be set aside to address future capital costs associated with any property as it ages. The projected operations include reserves of $250 per unit, or $2,000 total. WHITMAN 8 UNITS VANCOUVER, WA 11

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WHITMAN WHITMAN 8 UNITS VANCOUVER, WASHINGTON ASSET SUMMARY Property Location County Total Units 8 Whitman PRICING Price $1,100,000 Price Per Unit $137,500 Per Square Foot $134 Scheduled Cap Rate 5.10% Projected Cap Rate 6.09% 2901-2915 NE Whitman Ave Vancouver, WA 98662 Clark Year Built 1977 TOURS AND INQUIRIES Please do not disturb tenants. All tours and inquiries regarding Whitman are to be directed to HFO Investment Real Estate at (503) 241.5541. Todd Tully todd@hfore.com Jack Stephens jack@hfore.com Greg Frick greg@hfore.com Tyson Cross tyson@hfore.com Lee Fehrenbacher lee@hfore.com Adam Smith adam@hfore.com Brokers licensed in Oregon and Washington. WHITMAN 8 UNITS VANCOUVER, WA 13

HFO Investment Real Estate Passion Collaboration Specialization 2424 SE 11th Avenue Portland, OR 97214 www.hfore.com 503.241.5541 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. 2018 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.