For Sale: $1,795,000 Five High-End Rental Homes in Newer NE Bend, Oregon Offering Memorandum Peter May, CCIM pmay@compasscommercial.com Dan Kemp, Broker dkemp@compasscommercial.com 541.383.2444 www.compasscommercial.com
Table of Contents Page 03 Property Overview Property Details Executive Summary 05 08 11 13 14 Financial Information Annual Property Operating Data Rent Roll Location Overview Tax Map Property Aerial Regional Aerial Property Photos Regional Overview Notices 2
Five High-End Rental Homes in Newer NE Bend, Oregon Property Overview Property Details Site Address: 3002, 3003, 3006, 3007 & 3010 NE Red Oak Drive Bend, Oregon 97701 Tax Map: 171226CA Tax Lots: 05300, 05400, 05500, 07600, 07500 Zoning: Residential Standard Density (RS) Features & Amenities: Each house has an attached 2-car garage, a fenced yard, and upgraded finishes including stainless steel appliances. Property Homes are professionally Management: managed by Austin Property Management. Site Area: Bldg. Size: 0.59 Acres 8,983 SF Total Price: $1,795,000 Cap Rate: 3.98% Built: 2013 and 2014 Buildings: 5 Houses Total All are 3 bedroom / 2-2.5 bath *Square footages represented herein are sourced from the Deschutes County Assessor office and are not warranted by Brokers or Sellers. If square footage is a material consideration for any purchaser, they are advised to independently verify the square footages to their own satisfactions. 3
Property Overview Executive Summary Property Description This offering consists of five high-end residential homes built by Monte Vista Homes on five individual tax lots. The homes are located together with three adjoining lots on the north side of Red Oak Drive and two adjoining lots across the street. Each home has upgraded finishes including granite counter tops and stainless-steel appliances. Each home has a very strong rental history with long-term tenants in four of the homes. The remaining home is being left open for property tours during the sale. There is potential for some or all of these homes to be sold as individual units for a gradual exit strategy. They are well managed by a professional local company that would like to continue management for a new owner. The units were built in 2013 and 2014. The five houses have four different floor plans. They are all three-bedroom homes. Four of them have two full and one half bathroom, and the other home has two full bathrooms. Each home has an attached double car garage. Four of the homes are two stories and one is single story. Three of the homes have the master bedroom on the first floor. Two of the homes include a bonus media room upstairs. Each home has nice walk-in closets in the master bedroom. Location This property is centrally located in the northeast quadrant of Bend, Oregon. It is within just a few minutes driving time to downtown, the Old Mill District, Central Oregon Community College, Oregon State University Cascades and very close to Costco and the Forum Shopping Center, St. Charles Hospital and the medical community. The homes are also just two blocks from Mountain View Park which was completed in 2007. The park is 4.2 acres and has a large open lawn play area, walking trails, playground, picnic shelter and half-court basketball. Financing A new buyer can place their own debt without restriction. Financials At the owner s request, rents in recent years have been under market rates. The management company has been directed to raise rents at the end of current lease terms. The owners have also paid for landscaping, water and sewer in the past. A new owner can realize greater returns by having tenants pay these costs. This is reflected in the proforma income statement in this package. There is an acute housing shortage regionwide with vacancy rates for the last several years running under 2% which is supporting strong rent growth in the area. 4
Financial Information Annual Property Operation Data (Actuals) Income INCOME Note 3002 3003 3006 3007 3010 Total Gross Potential Income (1) $20,400 $20,400 $20,400 $21,000 $19,800 $102,000 - Vacancy (2) ($306) ($306) ($306) ($315) ($297) ($1,530) 1.50% Other Income $0 $0 $0 $0 $0 $0 Effective Gross Income $20,094 $20,094 $20,094 $20,685 $19,503 $100,470 EXPENSES Note 3002 3003 3006 3007 3010 Total Management (3) $1,200.00 $1,206.54 $1,022.30 $1,254.00 $1,603.50 $6,286.34 5.97% Insurance (3) $922 $922 $922 $922 $922 $4,609.00 4.59% Maintenance & Repairs (3) $325 $305 $7,316 $1,144 $1,020 $10,109.50 1.62% Landscaping (3) $1,205 $1,205 $1,345 $1,345 $1,345 $6,445.00 6.00% Water (4) $642 $473 $574 $458 $445 $2,592.00 3.20% sewer (3) $859 $754 $754 $833 $813 $4,013.16 4.28% Property Taxes (3) $2,992 $3,619 $3,444 $3,319 $3,365 $16,739.14 14.89% Legal (3) $0 $0 $0 $0 $0 $0.00 0.00% Marketing (3) $0 $0 $0 $0 $0 $0.00 0.00% Supplies (3) $0 $0 $0 $0 $0 $0.00 0.00% Total Expenses $8,144.99 $8,484.51 $15,377.60 $9,274.04 $9,513.00 $50,794.14 40.53% NET OPERATING INCOME $11,949 $11,609 $4,716 $11,411 $9,990 $49,676 VALUATION Listing Price Cap Rate: # Units Price Per Square Foot $1,795,000 2.77% 5 $199.82 Value Per Unit $359,000 Footnotes Current rents except 3006 Red Oak uses most recent rent for 1 Oct. - Dec. 3006 not rented to keep open for the sale. 2 Market vacancy 3 Actual expenses Dec. 2016- Nov. 2017 with one-time repairs to 3006. 4 3002 had leak in irrigation system that is fixed. 5
Financial Information Annual Property Operation Data (Pro Forma) Pro Forma Income INCOME Note 3002 3003 3006 3007 3010 Total Gross Potential Income (1) $21,000 $21,600 $21,000 $21,600 $20,400 $105,600 - Vacancy (2) ($315) ($324) ($315) ($324) ($306) ($1,584) 1.50% Other Income $0 $0 $0 $0 $0 $0 Effective Gross Income $20,685 $21,276 $20,685 $21,276 $20,094 $104,016 EXPENSES Note 3002 3003 3006 3007 3010 Total Management (3) $1,224.00 $1,224.00 $1,224.00 $1,260.00 $1,260.00 $6,192.00 5.92% Insurance (3) $922 $922 $922 $922 $922 $4,609.00 4.46% Maintenance & Repairs (3) $325 $305 $325 $325 $325 $1,605.00 1.57% Landscaping (6) $592 $0 $0 $0 $254 $846.00 2.86% Water (5) $375 $0 $0 $0 $259 $633.99 1.81% Sewer (5) $501 $0 $0 $0 $203 $704.39 2.42% Property Taxes (3) $2,992 $3,619 $3,444 $3,319 $3,365 $16,739.14 14.46% Legal (3) $0 $0 $0 $0 $0 $0.00 0.00% Commission (4) $0 $0 $1,300 $0 $0 $1,300.00 0.00% Supplies (3) $0 $0 $0 $0 $0 $0.00 0.00% Total Expenses $6,930.20 $6,070.21 $7,215.02 $5,825.32 $6,588.77 $32,629.52 33.50% NET OPERATING INCOME $13,755 $15,206 $13,470 $15,451 $13,505 $71,386 VALUATION Listing Price Cap Rate: # Units Price Per Square Foot Value Per Unit $1,795,000 3.98% 5 $199.82 $359,000 Footnotes 1 Proforma rents at $1,850 per month 2 Market vacancy 3 Based on current management fee, normal repairs and normal landscaping 4 Commission to lease 3006 Red Oak 5 Utilities will shift to tenant at end of current leases. 3002 had leak in irrigation for part of the year. 6 Landscaping will shift to tenant at end of current leases. 6
Financial Information Rent Roll # House Bed- Bath Lot Size SF Lease Start Lease End Current Proforma Deposit Rent/Yr. Rent/Mo. Rent/Yr. Rent/Mo. 1 3002 3-2 0.13 1,715 8/1/2017 7/31/2018 $2,850.00 $20,400 $1,700 $21,000 $1,750 2 3003 3-2 0.13 2,009 4/10/2014 4/30/2015 $2,550.00 $20,400 $1,700 $21,600 $1,800 3 3006 3-2 0.12 1,849 Vacant Vacant $1,950.00 $20,400 $1,700 $21,000 $1,750 4 3007 3-2 0.09 1,695 5/1/2015 4/30/2016 $1,950.00 $21,000 $1,750 $21,600 $1,800 5 3010 3-2 0.12 1,715 4/1/2017 3/31/2018 $1,850.00 $19,800 $1,650 $20,400 $1,700 0.59 8,983 $102,000 $8,500 $105,600 $8,800 7
Location Overview Tax Map 8
Location Overview Property Aerial 3002 3006 3010 3003 3007 9
Location Overview Regional Aerial 10
Property Photos 11
Regional Overview Bend, Oregon Profile Situated on the eastern edge of the Cascade Range along the Deschutes River, Bend joins forested mountain highlands and high desert plateaus, offering a diverse range of scenery and outdoor activities. The largest city in Central Oregon, Bend is the commercial, recreation and social center of the tri-county region and also serves as the county seat of Deschutes County. It covers 32 square miles and sits at an elevation of 3,625 feet. Bend is noted for its scenic setting and year-round recreational activities. LIFESTYLE Bend has a deserved reputation for attracting lifestyle migrants urban dwellers who seek amenities typically associated with a larger metropolitan area, but yearn for the recreational pursuits of the great outdoors, a beautiful setting, and an accessible community feeling. As such, the city attracts families and entrepreneurs from all of the West Coast metro areas and some from other major population centers. Many residents remark that despite its population size of 82,000, Bend has retained its small town atmosphere and feels smaller than its size would suggest. The city has been adopted as a gateway for many outdoor sports, including mountain biking, skiing and snowboarding, dog sled racing, fishing, hiking, rock climbing, white-water rafting and golf. There is also a sizable cluster of individuals drawn to Bend for artistic pursuits, ranging from photography to sculpture, from water color to metal working. Bend s beer brewing industry and restaurant scene is also a draw for tourists and locals. DEVELOPMENT Economically, Bend started as a logging town, but began a transition to a more varied, sustainable economy in the 1980 s when it became apparent that the lumber mills would no longer be vital. Economic Development for Central Oregon (EDCO) was born in the dark days of the 1980 s, when many downtown businesses were boarded up. Unlike resort communities such as Aspen or Jackson Hole, Bend s lifestyle and quality workforce is a draw for many successful companies in the aviation, manufacturing, renewable energy, high-tech, healthcare and recreation equipment sectors. Many of Bend s companies are owner-operated and in the small to midsize range, typically with 10 to 50 employees. Companies like Breedlove Guitars, G5 Search Marketing, Deschutes Brewery, Hydro Flask and Bend Research provide solid employment and bring in vital tradedsector dollars to Bend s economy. SOURCE: http://www.edcoinfo.com/communities/bend-profile/ 12
Regional Overview Central Oregon Profile The cities and communities that comprise Central Oregon are Bend, Redmond, Sisters, Sunriver, Prineville, La Pine, Madras, and Warm Springs. Central Oregon has led the state s population growth over the last two decades; in fact, Deschutes County continues to be one of the fastest growing areas of the country. A lesser known fact is that our region has also topped the state in job growth over the past ten years, creating a region that s characterized by dynamic small businesses and entrepreneurial activity. The region boasts strong clusters in high technology (software, hardware and energy), advanced manufacturing, biosciences, renewable energy, brewing & distilling, value-added food products, and recreation equipment. Bend Downtown and Mt. Bachelor For most new residents, Central Oregon is a lifestyle choice, offering a friendly environment, year-round recreation options, and world class amenities all with a hassle-free, small town feel. From a ranch in Prineville to an upscale urban condo in Bend, the region presents a rare diversity of places to live. The region is served by Roberts Field, a commercial airport offering service at Redmond Municipal Airport (RDM, www.flyrdm.com) provided by American Airlines, Alaska Airlines, Delta and United. These carriers offer approximately 21 commercial flights daily to and from San Francisco, Portland, Seattle, Los Angeles, Salt Lake City, Phoenix and Denver. Six major public school districts serve over 32,000 students; there are also 30 private schools in the region. The region is also home to Central Oregon Community College (COCC) and Oregon State University Cascades, a four-year university. OSU Cascades in Bend SOURCE: http://www.edcoinfo.com/communities/ Redmond Airport Sisters Downtown 13
Notices DISCLAIMER: The information contained herein has been given to us by the owners of the property or obtained from sources that we deem reliable or are based on assumptions that are considered reasonable and accurate. Although the broker has used reasonable care in obtaining data and making estimates and the projections based upon this data, this material is submitted without representation or warranty. This brochure has been prepared solely for informational purposes to assist a potential purchaser in determining if there is a desire to proceed with an in-depth investigation of the property. Neither the Sellers nor any of its officers, employees or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of the information set forth in this Offering Package or any aspect of the property of improvements herein. Interested parties are expected to review, independently, all documents and other matters relating to the property and improvements in order to verify the accuracy and completeness of the information contained herein. EXCLUSIVE: The property represented herein is exclusively listed for sale by Compass Commercial Real Estate Services. All negotiations for the purchase shall be conducted through Compass Commercial Real Estate Services. Please do not disturb tenants or management. Questions concerning this offering should be directed to: www.compasscommercial.com 541.383.2444 PETER MAY, CCIM pmay@compasscommercial.com DAN KEMP, BROKER dkemp@compasscommercial.com Brokers are licensed in the state of Oregon 14