PARKER TOWNHOMES 10 Units Portland, Oregon OFFERING MEMORANDUM

PARKER TOWNHOMES 10 Units Portland, Oregon OFFERING MEMORANDUM

INVESTMENT SUMMARY Parker Townhomes is a 10-unit townhome community on the east side of Portland. The property offers spacious three-bedroom, two and 1/2 bath townhome floor plans. These large units total 1,497 square feet and are complete with stainless steel appliances, attached garages, and updated finishes and fixtures. Parker Townhomes is situated on the corner of SE Stark and SE 162nd Ave. Parker Townhomes has an abundance of retail nearby and is conveniently located next to Parklane and Oliver Elementary Schools. Just down the street are Parklane and Lynchview City Parks. The Parker Townhomes are less than two blocks from the Max Blue Line station on E Burnside Street. Parker Townhomes has completed extensive renovations including new flooring and painting. Units also have new dishwashers, ranges, and refrigerators, with new washers and dryers in select units. Parker Townhomes rents currently average $1,592 per unit or $1.06 per square foot. The projected rents are based on the most recent leases and highest achieved rents. Projected rents average $1,750 per unit or $1.17 per square foot. The asset s large units size combined with new finishes and amenities throughout make the property a desirable place to call home for tenants throughout Portland s eastside and nearby Gresham. 2 HFO INVESTMENT REAL ESTATE

INVESTMENT SUMMARY ASSET SUMMARY Property Location County Total Units 10 Year Built 2007 Stories Parker Townhomes 621-639 SE 162nd Avenue Portland, OR 97233 Multnomah 2 stories Approx. NR Sq Ft 14,970 Average Sq Ft 1,497 Acreage 0.49 PROPERTY HIGHLIGHTS Newly remodeled units New stainless appliances Attached garages Large floor plans Nearby transit and an abundance of retail PRICING Price $1,950,000 Price Per Unit $195,000 Per Square Foot $130 Cap Rate 6.18% FOR MORE INFORMATION Rob Marton rob@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. PARKER TOWNHOMES 10 UNITS PORTLAND, OR 3

Every unit at Parker Townhomes includes an attached garage. These spacious two-story units feature new flooring, painting, and appliances. 4 HFO INVESTMENT REAL ESTATE

PARKER TOWNHOMES 10 UNITS PORTLAND, OR 5

LIFESTYLE CONVENIENCES AND EMPLOYERS NE Airport Way NE Sandy Blvd NE 223rd Ave NE Marine Dr Blue Lake Regional Park 30 Rocky Butte Park 84 NE 102nd Ave NE Halsey St Distribution Center NE Halsey St Gateway Shopping Center NE Glisan St NE 122nd Ave Glendoveer Golf & Tennis E Burnside St SE Stark St Parker Townhomes Wood Village Town Center 205 Mall 205 David Douglas High School SE Division St SE 148th Ave SE 162nd Ave SE 174th Ave SE 182nd Ave SE 202nd Ave Gresham Station SE Powell Blvd 26 Centennial High School 6 HFO INVESTMENT REAL ESTATE

GRESHAM MARKET DRIVERS GRESHAM MARKET DRIVERS The vacancy rate in Gresham remains low, but is beginning to increase slowly. As of April 2018, the vacancy rate for the Gresham/Troutdale/ Fairview submarket was 3.8% overall, below the metro area average of 4.37%. The vacancy rate for 3-bedroom 2-bathroom units in Gresham is 0.43%. This submarket has seen below-market average vacancy rates since 2010. Source: Multifamily NW Spring 2018 Report Gresham s population in 2017 was 111,053, according to the Census Bureau. Between 2010 and 2017 the population of the city increased by 5.1%. Approximately 47.5% of Gresham s 38,921 households rent, and the average number of persons per household is 2.78. Median household income in Gresham is $49,866. GRESHAM SCHOOLS In November 2016, Gresham voters approved a $291.2 bond for the Gresham-Barlow school district. The vote occurred after the Reynold s School District, which also serves Gresham, announced that it would replace three elementary schools and work on improvements to Reynolds High School with money raised from the 2015 school bond. PARKER TOWNHOMES 10 UNITS PORTLAND, OR 7

GRESHAM TRADED SECTOR EMPLOYERS The City of Gresham aims to strengthen and grow the manufacturing sector in Gresham by offering incentives to companies who bring jobs to the city. Within their Enterprise Zone, businesses can receive a property tax abatement on new investment for 3-5 years, and within their 500-acre Investment Zone, businesses can receive a 15-year tax abatement. The goal of the city is to attract high paying jobs that will position Gresham as a regional manufacturing and industrial center. Gresham has also streamlined the permitting process for industrial development, guaranteeing a decision within a 66-day period. According to Oregon Business, 28 companies have come to Gresham since 2015, and 35 companies including Boeing and Teeny Foods have committed to expanding in the area. In February 2015, Amazon announced a new fulfillment center planned for 73 acres of land in Troutdale, just Northeast of Gresham. Plans for the property include 49 loading docks and parking stalls for 276 trailers and 2,511 vehicles. The city estimates it could bring hundreds of new jobs to the area. In 2015, Gresham saw approximately $17 million in new industrial development projects. The same year, Subaru unveiled plans to build a 600,000 square foot distribution center at a Gresham industrial park located within the Gresham Enterprise Zone. 2016 industrial permits for Gresham were valued at over $80 million double the value of 2015 permits. Currently, New York Life Real Estate Investors LLC and Specht Development, Inc. are working to build a 732,824 square foot industrial space on a 37.42 acre site at SE 223rd and Stark Street in Gresham. The site, Vista Logistics Park, is the largest single phase speculative development ever constructed within the Portland metropolitan area according to Capacity Commercial Group principal Don Ossey. ON Semiconductor has been expanding its operations as it has acquired new companies in the semiconductor industry. As of 2016, ON employed 750 people, with an additional 30 jobs likely to be created in the near term. In 2006, ON employed 500 people in its Gresham factory. In February 2017, Amazon announced it would be building a new facility just north of Gresham in Troutdale. The company is planning to build an 855,000 square foot fulfillment center with 49 loading docks and 276 trailer parking spaces on 73 acres of brownfield land. The distribution center is expected to be fully operational by 2018. Gresham expects to break ground on the Rockwood Rising redevelopment project in 2018, which is a partnership between the city and a variety of schools and businesses including Mount Hood Community College, Metro East Community Media, Worksystems, and KCR Manufacturing. The 5.5 acre site formerly occupied by Fred Meyer will be home to 100,000 square feet of new commercial, office, and retail space. The project aims to connect Rockwood residents with services and amenities, as well as job training and entrepreneurship programs. Completion is expected in 2019. 8 HFO INVESTMENT REAL ESTATE

GRESHAM TRADED SECTOR EMPLOYERS GRESHAM TRADED SECTOR EMPLOYERS (AS OF JUNE 2017 FROM CITY OF GRESHAM) Employer Product/Services Employee Count Range Boeing of Portland Aerospace Manufacturer 1500-2000 US Bank Processing Services Check Processing 1500-2000 ON Semiconductor Semiconductor Manufacturing 700-1499 Albertson s Distribution Center Food Distribution 700-1499 Microchip Technology Semiconductor Manufacturing 500-699 Affiliated Computer Services/Xerox Business Services Call Center 500-699 Christenson Electric Electrical Contractor 400-499 Celestica Semiconductor Equipment Manufacturer 200-399 Cascade Controls Control Systems Manufacturer 200-399 Cascade Corporation Hydraulics Equipment Manufacturer 200-399 Organically Grown Food Distribution 200-399 Portland Specialty Baking Groceries/Related Products Manufacturer 200-399 Arnprior/QPM Aerospace Aerospace Manufacturer 100-199 Boyd Coffee Company Specialty Foods Manufacturer 100-199 Capsa Health Care Medical Equipment Manufacturer 100-199 Frito-Lay NA Food Distribution 100-199 Imperial Brown Refrigeration Manufacturer 100-199 International Paper Paper Production 100-199 LaneCo Inc. Concrete Cutting 100-199 Pella Vinyl Metal Frames/Windows Manufacturer 100-199 Performance Food Service Pacific NW Food Distribution 100-199 Staples Distribution Center Distribution 100-199 Teeny Foods Specialty Food Manufacturer 100-199 Wright Business Graphics, Inc. Business Forms 100-199 PARKER TOWNHOMES 10 UNITS PORTLAND, OR 9

PORTLAND METRO SNAPSHOT PORTLAND REGION Oregon s largest city, Portland, is near the confluence of the Willamette and Columbia Rivers. The Portland Metro Area consists of four counties: Multnomah, Washington, Clackamas, and Clark County, Washington. APARTMENT MARKET The Portland Metro Area consistently ranks among the nation s lowest for apartment vacancy rates according to the U.S. Census Bureau and other third-party services like REIS, MPF Research, and Axiometrics. The U.S. Census ranked Portland as having the 6th lowest vacancy rate in the nation for the first quarter of 2018 at 3.6%. REIS reports 2017 Portland metro year-over-year rents grew 3.3%. Overall rents have increased every quarter since Q1 2010. SKILLED WORKFORCE & STRONG EMPLOYMENT 54% of Portland workers have an associate s degree or higher, outpacing the national average of 38%. According to the State of Oregon s Employment Department, Portland enjoys one of the fastest job growth rates in the Pacific Northwest, and the entire nation, having added 31,000 jobs in 2016 and 28,000 jobs in 2017. The Portland Metro Area s unemployment rate as of May 2018 is 3.7% the lowest since 1995. DIVERSIFIED ECONOMY Portland is home to the headquarters of Fortune 500 companies Nike, Precision Castparts and Lithia Motors. Fortune 1000 companies headquartered here include Stancorp Financial, Greenbrier Companies, Columbia Sportswear, Schnitzer Steel Industries, and Portland General Electric. Tech and software companies continue to relocate their operations here or open major outposts in Portland. These companies enjoy Portland s educated workforce, affordable high quality of life, and a low cost of doing business compared to the Bay 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 include Viewpoint, Jama Software, Thetus, Urban Airship, Acquia, Elemental Technologies, Act-On, Puppet Labs, and The Clymb. TOP 10 LISTS Portland consistently receives glowing reviews and rankings from the media. 2018 lists include: #4 Best City for Biking (Fast Company) #6 Best Place to Live (U.S. News and World Report) #10 Most Entrepreneurial State (Amazon.com) 2017 lists include: #3 City with Best Opportunities for Job Seekers This Year (Fast Company) 2016 lists include: America s Best City for Summer Travel (Travel + Leisure) Best City for Electric Cars in the U.S. (The Christian Science Monitor) Best Places to Live 2016 (Money Magazine) #8 Greenest City in the Nation (Wallethub) #8, World s Best Cities for Millennials (Matador Network) Food and Drink Capital of America (The Telegraph London) World s #10 Best City to Live In (Metropolis Magazine) 10 HFO INVESTMENT REAL ESTATE

PORTLAND MARKET SNAPSHOT MAJOR EMPLOYERS GOVERNMENT The U.S. Federal Government is Portland metro s overall largest employer, with 20,500 workers. The State of Oregon gives employment to an additional 14,000 residents. HIGH TECH & CHIP MANUFACTURING Attracted by the Portland area s educated workforce and relative low cost of doing business, tech companies continue moving to Portland opening major branches and, in some cases, relocating to the area entirely. With over 19,300 employees, Intel is the area s largest private employer. Intel acquired its first Portland location in 1974. The company is currently expanding its presence with forthcoming D1X microprocessor chip facilities at the Ronler Acres Campus in Hillsboro. This is part of a five-year, $6 billion expansion, and is part of the company s long-term plans for growth. Intel is the largest property taxpayer in Washington County, with payments of approximately $30 million a year. Other notable Portland-area high-tech companies include ON Semiconductor and Tektronix. SPORTSWEAR Nike has its world headquarters in Beaverton and employs 12,000 Portland-area residents. The company designs, develops and manufactures footwear, apparel, equipment and accessories. From here, Nike orchestrates production and design for one of the world s most recognizable brands. In January, 2015, Nike began a $1 billion expansion of its Washington County campus, adding three buildings with a collective 1.3 million square feet and more than 3,300 parking stalls. Nike recently released artists renderings of the completed expansion, which is estimated to open in 2018. Nike s two key competitors have a major local presence as well. Those employers include the North American headquarters of Adidas with 1,200 employees, and a new 70,000 SF outpost of Under Armour. Under Armour has moved 100 employees into an iconic former YMCA. HEALTHCARE AND RESEARCH Health services are another major employment sector for the Portland area. The top healthcare employers in the area are Providence Health Systems, with 17,543 employees, and The Oregon Health Sciences University (OHSU), with 16,200 workers. OSHU is the recent recipient of a total of $1 billion in donations for cancer research from over 10,000 Oregon donors. Grants from the National Institutes of Health totaled $182.7 million in 2016. MANUFACTURING In trucking and transportation, Daimler Trucks with nearly 3,000 area workers has big plans for the Portland area. The company recently spent $150 millions renovating its Portland facility and invests heavily in research and development, including autonomous driving. PARKER TOWNHOMES 10 UNITS PORTLAND, OR 11

OPERATIONS ANALYSIS PARKER TOWNHOMES 10 UNITS PORTLAND, OREGON Income Current Scheduled Rents Projected Operations Notes Scheduled Gross Rent $191,085 $19,109 $210,000 $21,000 1 Less: Vacancy/Credit Loss ($9,554) ($955) -5.0% -$10,500 -$1,050-5.0% 2 Net Rental Income $181,531 $18,153 $199,500 $19,950 Other Income $11,409 $1,141 $11,409 $1,141 3 Includes: Utility Billing (RUBs) $5,461 $546 19.9% $5,461 $546 19.9% Gross Operating Income $192,939 $19,294 $210,909 $21,091 Expenses Projected Operations Per Unit % GOI Projected Operations Per Unit % GOI Real Estate Taxes $11,904 $1,190 6.2% $11,904 $1,190 5.6% 4 Insurance $3,856 $386 2.0% $3,856 $386 1.8% 5 Total Utilities $27,664 $2,766 14.3% $27,664 $2,766 13.1% 6 Fee Management $15,435 $1,544 8.0% $16,873 $1,687 8.0% 7 Landscaping $3,594 $359 1.9% $3,594 $359 1.7% Maintenance/Repairs $6,000 $600 3.1% $6,000 $600 2.8% Turnover $2,000 $200 1.0% $2,000 $200 0.9% Reserves $2,500 $250 1.3% $2,500 $250 1.2% 8 Total Expenses ($72,952) ($74,390) Expenses per Unit ($7,295) ($7,439) % of Gross Operating Income 38% 35% Net Operating Income (NOI) $119,987 $136,519 12 HFO INVESTMENT REAL ESTATE

OPERATIONS ANALYSIS PARKER TOWNHOMES 10 UNITS PORTLAND, OREGON 1. RENTS Rents are based on a November 2018 rent roll. Current scheduled rents average $1,592 per unit or $1.06 per square foot. The projected rents are based on the most recently signed leases at the highest achieved rate. Projected rents average $1,750 or $1.17 per square foot. Unit Type Unit Count RENT ROLL ANALYSIS: MARKET RENTS Square Feet Average Scheduled Rents Average Scheduled Rents per Sq Ft Average Market Rent Average Market Rent per Sq Ft % Change 3 Bedroom / 2.5 Bathroom Townhome 10 1,497 $1,592 $1.06 $1,750 $1.17 9.0% Totals / Averages 10 1,497 $1,592 $1.06 $1,750 $1.17 9.0% 2. VACANCY, CONCESSIONS, AND BAD DEBT/RECOVERY Parker Townhomes currently has no available units. For underwriting purposes, we set the vacancy rate to a market rate of 5%. 3. OTHER INCOME Other Income includes administrative fees, month-to-month income, pet fees, laundry income and utility charges (RUBs). Projected other income totals $11,409. PARKER TOWNHOMES 10 UNITS PORTLAND, OR 13

OPERATIONS ANALYSIS PARKER TOWNHOMES 10 UNITS PORTLAND, OREGON 4. PROPERTY TAXES Oregon s property taxes are evaluated on a fiscal year starting July 1. Property tax values for the 2018-2019 tax year were published October 15. In Oregon, property taxes are not reassessed on sale and are limited to a 3% annual increase at the state level. The gross property taxes for Parker Townhomes total $11,904. Property taxes paid prior to November 15th each year receive a 3% discount. Most investors take advantage of this discount. Projected operations include current taxes for the 2018-2019 tax year with the 3% discount. TAX HISTORY Tax Year Account # 2017/2018 2018/2019 R638908 $11,469 $11,904 Total $11,469 $11,904 % Change 3.58% 3.65% 5. INSURANCE Property insurance reflects the current policy premium of $3,856 annually or $386 per unit. 6. UTILITIES Utilities for Parker Townhomes total $27,664, or $2,766 per unit. 7. 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. The total management cost is projected at 8.0% of GOI (Gross Operating Income). 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 $2,500 annually. 14 HFO INVESTMENT REAL ESTATE

PARKER TOWNHOMES 10 UNITS PORTLAND, OREGON ASSET SUMMARY Property Location County Total Units 10 Year Built 2007 Average Sq Ft 1,497 PRICING Price $1,950,000 Price Per Unit $195,000 Per Square Foot $130 Cap Rate 6.15% Parker Townhomes 621-639 SE 162nd Avenue Portland, OR 97233 Multnomah TOURS AND INQUIRIES Please do not disturb tenants. All tours and inquiries regarding Parker Townhomes are to be directed to HFO Investment Real Estate at (503) 241.5541. Rob Marton rob@hfore.com Greg Frick greg@hfore.com Jack Stephens jack@hfore.com Tyson Cross tyson@hfore.com Lee Fehrenbacher lee@hfore.com Todd Tully todd@hfore.com Adam Smith adam@hfore.com Khari Gates khari@hfore.com Brokers licensed in Oregon and Washington. PARKER TOWNHOMES 10 UNITS PORTLAND, OR 15

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.