PARK PLACE APARTMENTS 20 Units Gresham, Oregon OFFERING MEMORANDUM

PARK PLACE APARTMENTS 20 Units Gresham, Oregon OFFERING MEMORANDUM

INVESTMENT SUMMARY Park Place Apartments is a 20-unit community in Gresham. The asset was completed in 1990 and offers two- and three-bedroom floor plans. Every apartment features in-unit laundry and a private patio or deck overlooking mature landscaping. Park Place Apartments has been well maintained over the years with several recent capital improvements: including new siding, painting, and a new seal coat and striping in the parking lot. New electrical was also installed throughout the property. Park Place Apartments is near Red Sunset Park a 14.2 acre community park in the North Central neighborhood. Red Sunset Park features two picnic shelters and a one-acre pond. The park also offers a basketball court, soccer and softball fields, and a trail around the park perimeter. Park Place Apartments rents currently average $1,237 per unit or $1.26 per square foot. Park Place Apartments newer vintage and balanced unit mix results in an attractive investment in an in-demand location central to Gresham and Portland. PROPERTY HIGHLIGHTS Off-street parking Walk-through kitchen Dedicated dining area Spacious layouts Private patio/balcony Garages available Adjacent to Red Sunset Park 2 HFO INVESTMENT REAL ESTATE

INVESTMENT SUMMARY ASSET SUMMARY Property Location County Total Units 20 Year Built 1990 Stories Park Place Apartments 2628 NE Red Sunset Drive Gresham, OR 97233 Multnomah 2 stories Approx. NR Sq Ft 19,600 Average Sq Ft 980 Acreage 0.98 60% 40% 2 Bedroom 3 Bedroom PRICING Price $3,175,000 Price Per Unit $158,750 Per Square Foot $162 Cap Rate 6.36% 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. PARK PLACE APARTMENTS 20 UNITS GRESHAM, OR 3

All of the units at Park Place Apartments have received new flooring, carpet, and electrical. The lush landscaping blends in nicely with a new seal coat on the parking lot. 4 HFO INVESTMENT REAL ESTATE

PARK PLACE APARTMENTS 20 UNITS GRESHAM, OR 5

LIFESTYLE CONVENIENCES AND EMPLOYERS 30 84 Sandy River NE Halsey St Cherry Park Market NE Glisan St NE Stark St NE Hogan Dr Reynolds High School SW 257th Ave NE Burnside St MAX Blue line SE 223rd Ave SE Division St Gresham High School Park Place Apartments SE Powell St 26 GRESHAM 6 HFO INVESTMENT REAL ESTATE

GRESHAM MARKET DRIVERS GRESHAM MARKET DRIVERS 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. PARK PLACE APARTMENTS 20 UNITS GRESHAM, 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 PARK PLACE APARTMENTS 20 UNITS GRESHAM, OR 9

OPERATIONS ANALYSIS PARK PLACE APARTMENTS 20 UNITS GRESHAM, OREGON Income Current Scheduled Rents Projected Operations Note Scheduled Gross Rent $296,976 $14,849 $322,920 $16,146 1 Less: Vacancy/Credit Loss ($14,849) ($742) -5.0% -$16,146 -$807-5.0% 2 Net Rental Income $282,127 $14,106 $306,774 $15,339 Other Income $24,027 $1,201 $24,027 $1,201 3 Includes: Parking (Garage) $2,181 $109 $2,181 $109 Includes: Utility Billing (RUBs) $13,407 $670 54.1% $13,407 $670 54.1% Gross Operating Income $306,154 $15,308 $330,801 $16,540 Expenses Projected Operations Per Unit % of GOI Projected Operations Per Unit % of GOI Real Estate Taxes $22,778 $1,139 7.4% $22,778 $1,139 6.9% 4 Insurance $5,328 $266 1.7% $5,328 $266 1.6% 5 Total Utilities $26,516 $1,326 8.7% $26,516 $1,326 8.0% 6 Fee Management $24,492 $1,225 8.0% $26,464 $1,323 8.0% 7 Landscaping $5,623 $281 1.8% $5,623 $281 1.7% Maintenance/Repairs $11,000 $550 3.6% $11,000 $550 3.3% Turnover $3,500 $175 1.1% $3,500 $175 1.1% Reserves $5,000 $250 1.6% $5,000 $250 1.5% 8 Total Expenses ($104,237) ($106,209) Expenses per Unit ($5,212) ($5,310) % of Gross Operating Income 34% 32% Net Operating Income (NOI) $201,917 $224,592 10 HFO INVESTMENT REAL ESTATE

OPERATIONS ANALYSIS PARK PLACE APARTMENTS 20 UNITS GRESHAM, OREGON 1. RENTS Rents are based on a November 2018 rent roll. Current scheduled rents average $1,237 per unit or $1.26 per square foot. The projected rents are based on new move-in rates along with those historically achieved at Park Place Apartments. 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 2 Bedroom / 1 Bathroom Classic 10 940 $1,184 $1.26 $1,296 $1.38 8.7% 2 Bedroom / 1 Bathroom Renovated 2 940 $1,205 $1.28 $1,235 $1.31 2.4% 3 Bedroom / 2 Bathroom Classic 8 1,040 $1,313 $1.26 $1,435 $1.38 8.5% Totals / Averages 20 980 $1,237 $1.26 $1,346 $1.37 8.0% 2. VACANCY, CONCESSIONS, AND BAD DEBT/RECOVERY Park Place Apartments experienced above-market vacancy and offered concessions due to renovations at the property. Projected operations stabilizes vacancy at 5.0%. 3. OTHER INCOME Other Income includes administrative fees, month-to-month income, pet fees, laundry income and utility charges (RUBs). Projected other income totals $20,931. Park Place has garages to rent. There are a total of eight garages. The garages generated $2,809 in income over the previous 12 months. PARK PLACE APARTMENTS 20 UNITS GRESHAM, OR 11

OPERATIONS ANALYSIS PARK PLACE APARTMENTS 20 UNITS GRESHAM, 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 Park Place total $23,483. Property taxes paid prior to November 15th each year receive a 3% discount. Most investors take advantage of this discount. The projected operations include net taxes, the total taxes after the 3% discount, totalling $22,778. TAX HISTORY Tax Year Account # 2017/2018 2018/2019 R174912 22,530 23,483 Total $22,530 $23,483 % Change 11.83% 4.06% 5. INSURANCE Property insurance reflects the current policy premium of $5,328 annually. 6. UTILITIES Utilities have been adjusted for garbage costs. The garbage expense is above market rate, in part, due to the on-going renovations and hauling charges. Utilities total $26,516, or $1,326 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 management fee is projected at 8% 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 $5,000 annually. 12 HFO INVESTMENT REAL ESTATE

PARK PLACE APARTMENTS 20 UNITS GRESHAM, OREGON ASSET SUMMARY Property Location County Total Units 20 Year Built 1990 Average Sq Ft 980 PRICING Price $3,175,000 Price Per Unit $158,750 Per Square Foot $162 Cap Rate 6.36% Park Place Apartments 2628 NE Red Sunset Drive Gresham, OR 97233 Multnomah TOURS AND INQUIRIES Please do not disturb tenants. All tours and inquiries regarding Park Place Apartments 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. PARK PLACE APARTMENTS 20 UNITS GRESHAM, OR 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.