WASHINGTON STREET STATION€¦ · high-tech companies, including Intel, and their thousands of employees. Once a tiny settlement extending three blocks in each direction from its

OFFERING MEMOR ANDUM20 Units • Hillsboro, Oregon

WASHINGTON STREET STATION

www.hfore.com(503) 241.5541

2 HFO INVESTMENT REAL ESTATE

EXECUTIVE SUMMARYASSET SUMMARYLocation 433 SE Washington StreetCity, State Hillsboro, OR 97123County WashingtonTotal Units 20Year Built 2012Approx. NR Sq Ft 18,674Average Unit Size 934

PRICE SUMMARYPrice $4,400,000

Price Per Unit $220,000

Per Square Foot $236

Projected Cap Rate 5.38%

DETAILED UNIT MIXUnit Type Unit Count Average Sq Ft Total Sq Ft % of Total Units1 Bed / 1 Bath 2 548 1,096 10.0%1 Bed / 1 Bath 8 600 4,800 40.0%2 Bed/ 2 Bath Townhome 6 1,243 7,458 30.0%

2 Bed / 2 Bath 4 1,330 5,320 20.0%Total / Averages 20 934 18,674 100.0%

TOURS AND INQUIRIES Greg Frick • [email protected]

2424 SE 11th Avenue, Portland, Oregon 97214www.hfore.com • (503) 241.5541 • Fax: (503) 241.5548

Please do not disturb tenants.

Washington Street Station is a 20-unit community in the heart of downtown Hillsboro. The property offers tenants spacious one-bed, one-bath and large two-bed, two-bath layouts. Apartments average 934 square feet and have modern fixtures and amenities throughout.

Washington Street Station is situated on SE Washington Street between SE 4th and 5th Streets just one block from the Hillsboro Central MAX station. Its accessible location offers numerous amenities within walking distance including Walgreens, Starbucks, Insomnia Coffee, Shute Park, Tuality Community Hospital, and an abundance of restaurants and retailers. Washington Street Station’s rents currently average $1,409 per unit or $1.51 per square foot; projected rents average $1,480 per unit or $1.58 per sq ft.

The property’s transit-oriented design, favorable unit size and mix, and westside Portland Metro location make this a great opportunity for either a first-time investor looking to get into the multifamily market, or an experienced investor seeking to grow their portfolio.

3WASHINGTON STREET STATION • 20 UNITS • HILLSBORO, OREGON

Hillsboro, just west of Portland, is the county seat of Washington County and home to many high-tech companies, including Intel, and their thousands of employees. Once a tiny settlement extending three blocks in each direction from its county courthouse, Hillsboro grown to become the fifth-largest city in Oregon. Its population increased 17.5% from 2010 to 2018, when it reached 108,389.

Hillsboro has retained its small-town charm and tradition, while at the same time offering convenient access to large employers and transportation options. Intel has three campuses located here, and Hillsboro’s airport is the second largest in Oregon.

For decades, the west side of the Portland Metro Area has been referred to as part of the “Silicon Forest”—a cluster of prominent high-tech companies that have had a positive impact on Oregon’s economy and population. A major economic center of Washington County, Hillsboro has attracted many high-tech businesses in the last two decades. It’s been referred to as “the tallest tree in the Silicon Forest.”

Most of its high-tech development is located along the Highway 26/Sunset Corridor, which connects Hillsboro with its neighboring city, Beaverton. Hillsboro residents are prosperous, with an estimated median household income of $75,599.

According to the Spring 2019 Multifamily NW report, Hillsboro saw an average rent per square foot of $1.60 and an average vacancy rate of 4.46%, below the 4.95% average for the metro area.

Other leading employers in the Hillsboro area include Salesforce, Nike, the Hillsboro and Beaverton School Districts, Providence Hospital, and Comcast Cable. TriMet’s MAX Blue Line train makes stops at nine locations in the Hillsboro area, enabling an easy commute to and from

INTEL FACILITY

the downtown Portland area. Hillsboro is an ideal place to live for the employees of its myriad businesses, as well as their families.

Residents and visitors enjoy Hillsboro’s farmers’ markets, dog parks, arts venues, community gardens and its locally owned restaurant and shopping options. It is the host of the second-largest Fourth of July parade in Oregon State. Other annual events include its Latino Cultural Festival, Celebrate Hillsboro and the Oregon International Air Show. Hillsboro is also home to the Metro area’s only pro baseball team, the Hillsboro Hops.

Photo credit to Sam Beebe

HILLSBORO


LIFESTYLE CONVENIENCES

Century High School

Rosedale Elementary School

Hillsboro High School

Hillsboro Airport

HILLSBORO

ALOHA

TANASBOURNE

ORENCO STATION

Washington Street Station

219

8

10

SW Jenkins Rd

SW Kinnaman Rd

SW Farm

ington R

d

Walker Road

NE Cornell Rd

E Main St

SW Johnson St

NE Airport Rd

SW Rosedale Rd

SW M

inter Bridge Rd

SW M

urray Blvd

SW 229th Ave

SW 209th Ave

SW 229th Ave

SW River Rd

SW 170th Ave

NW 158th Ave

NW Cornelius Pass Rd

NW 185th Ave

NW Sunset Hwy

26

Aloha Campus


GOVERNMENTThe 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 MANUFACTURINGAttracted 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.

SPORTSWEARNike 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 2019 Nike will complete a $1 billion expansion of its Washington County campus.

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 RESEARCHHealth 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. OHSU 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.

MANUFACTURINGIn trucking and transportation, Daimler Trucks—with nearly 3,000 area workers—has big plans for the Portland area. The company recently spent $150 million renovating its Portland facility and invests heavily in research and development, including autonomous driving.

PORTLAND MARKET SNAPSHOTMAJOR EMPLOYERS


APARTMENT MARKETThe 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 Bureau pegged Portland’s Q3 2018 vacancy rate at 4.5% and the U.S. average at 7.1%.

REIS forecast 2018 Portland metro year-over-year rents growth at 3.0% and the Multifamily NW Apartment Report survey proved average October 2017-18 year-over-year rent growth at 3.3%.

SKILLED WORKFORCE & STRONG EMPLOYMENTIn a 2018 WalletHub report comparing 150 of the largest U.S. metros, Portland is listed as the 15th most educated city in America. More than half of Multnomah County workers have a college degree, well ahead of the national average of 38.5%.

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. Data indicates the area added 31,000 jobs in 2016, 28,000 jobs in 2017, and 29,000 in 2018.

TOP 10 LISTS

Portland consistently receives glowing reviews and rankings from the media.

2019 lists include: • #4 Best City for an Active Lifestyle (Wallethub)• #7 Healthiest Cities to Live (Thrillist.com)• #7 Best Cheap Destinations in the U.S. (U.S.

News and World Report)

• # 8 Best Place to Live in the U.S. (U.S. News and World Report)

• #8 Fittest Cities in America (CBS News)• #9 Best Foodie Cities in the USA (U.S. News and

World Report)

2018 lists include: • #1 Restaurant City of the Year (Bon Appetit)• #1 Best Foodie City in America (Wallethub &

Travelpulse) #6 (Jetsetter)• #3 Healthiest City in the U.S. (Active.com) • #3 Best Place for Business and Careers (Forbes)• #4 Best City for Biking (Fast Company)• #9 Top City for Entrepreneurs and Start-Ups

(Business.org) #23 (CNBC)

• #10 Greenest City in America (Newsweek)• #10 Most Entrepreneurial State (Amazon.com)• #15 Most Educated City in America (Wallethub)

DIVERSIFIED ECONOMYPortland is home to the headquarters of Fortune 500 companies Nike and Lithia Motors. Fortune 1000 companies headquartered here include Columbia Sportswear, Greenbrier Cos. and Portland General Electric. Fortune 500 companies based outside Oregon with major operations here are Precision Castparts and Intel.

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 have 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.

PORTLAND REGIONOregon’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.

PORTLAND METRO SNAPSHOT


OPERATIONS ANALYSIS

Income Current Scheduled Rents Projected Operations NoteScheduled Gross Rent $338,232 $16,912 $355,144 $17,757 1

Less: Vacancy/Credit Loss -$16,912 -$846 -5.0% -$17,757 -$888 -5.0% 2

Net Rental Income $321,320 $16,066 $337,386 $16,869 Other Income $27,709 $1,385 $27,709 $1,385 3

Includes: Utility Billing (RUBs) $13,032 $652 $13,032 $652 Includes: Miscellaneous $14,677 $734 $14,677 $734

Gross Operating Income $349,029 $17,451 $365,095 $18,255 Expenses Projected Operations Per Unit % GOI Projected Operations Per Unit % GOI

Real Estate Taxes $41,262 $2,063 11.8% $41,262 $2,063 11.0% 4Insurance $5,903 $295 1.7% $5,903 $295 1.6% Total Utilities $22,618 $1,131 6.5% $22,618 $1,131 6.0% Fee Management $34,903 $1,745 10.0% $36,510 $1,825 10.0% 5Landscaping $2,203 $110 0.6% $2,203 $110 0.6% Maintenance/Repairs $11,000 $550 3.2% $11,000 $550 2.9% Turnover $4,000 $200 1.1% $4,000 $200 1.1%Reserves $5,000 $250 1.4% $5,000 $250 1.3% 6

Total Expenses -$126,889 -$6,344 -36.4% -$128,496 -$6,425 -35% Net Operating Income (NOI) $222,140 $236,599

RENT ROLL ANALYSIS

Unit Type Unit Count Square Feet Average Scheduled RentsAverage Scheduled

Rents per Sq Ft Average Projected RentsAverage Projected Rents

per Sq Ft

1 Bedroom / 1 Bathroom 2 548 $1,160 $2.12 $1,218 $2.22

1 Bedroom / 1 Bathroom 8 600 $1,355 $2.26 $1,423 $2.37

2 Bedroom / 2 Bathroom Townhome with Deck 6 1,243 $1,370 $1.10 $1,439 $1.16

2 Bedroom / 2 Bathroom Townhome 4 1,330 $1,702 $1.28 $1,787 $1.34

Totals / Averages 20 934 $1,409 $1.51 $1,480 $1.58


1. RENTS Washington Street Station’s current scheduled rents average $1,409 per unit, or $1.51 per sq ft. Projected rents are based on a 5% increase in rents and average $1,480 per unit, or $1.58 per sq ft.

OPERATIONS ANALYSISINCOME

2. VACANCY Operations have been adjusted for a 5.0% vacancy rate based on lender underwriting requirements. Lenders consider the long-term nature of a property and the market in which it is located. Lenders typically underwrite to 5.0% vacancy.

3. OTHER INCOME Washington Street Station is projected to generate $27,709 in other income in a full fiscal year. The other income includes administrative fees and utility charges (RUBs). • RUBs. Utility charges (RUBs) account for more than 45% of other income, projected to generate $13,032. The projections

show, on average, a monthly charge to residents of $54, which covers approximately 69% of the water, sewer, and garbage expense.

EXPENSESWashington Street Station’s professional management reflects market-rate operations with minimally adjusted expenses. The following expenses impact overall operations.

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. Projected operations include current taxes for the 2018-2019 property tax year. Washington Street Station’s taxes increased 3.53% over 2017-2018. In Oregon, property taxes are not reassessed on sale and are limited to a 3.0% annual increase at the state level. Property taxes paid by November 1 each year receive a 3.0% discount. The gross property taxes for Washington Street Station for the 2018-2019 tax year total $42,538. The price reflected in operations takes into account the 3.0% discount, totaling $41,262.

5. MANAGEMENT FEE The management fee has been projected to 10.0% of GOI, which represents standard independent, third-party management costs for properties in the metro area similar to Washington Street Station.

6. 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 total.

TAX HISTORY

Tax Year2017/2018 2018/2019

Account #

R2185669 $41,038 $42,538

Total $41,038 $42,538

% Change 3.53%


OFFER TERMS

QUESTIONS & TOUR REQUESTS:

All tours and inquiries regarding Washington Street Station are to be directed to HFO Investment Real Estate at (503) 241.5541. Please do not disturb tenants.

Greg Frick • [email protected]

Rob Marton • [email protected]

Tyler Johnson • [email protected]

Jack Stephens • [email protected]

Lee Fehrenbacher • [email protected]

Todd Tully • [email protected]

Adam Smith • [email protected]

HFO Investment Real Estate 2424 SE 11th AvenuePortland, Oregon 97214

www.hfore.com(503) 241.5541Fax: (503) 241.5548Brokers licensed in the States of Oregon and Washington.

ASSET SUMMARYLocation 423 SE Washington St

City, State Hillsboro, OR

Total Units 20

PRICE SUMMARYPrice $4,400,000

Price Per Unit $220,000

Per Square Foot $236

Projected Cap Rate 5.38%


HFO Investment Real Estate

2424 SE 11th Avenue • Portland, OR 97214www.hfore.com • 503.241.5541

Passion • Collaboration • Specialization

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. ©2019 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.

Documents

WASHINGTON STREET STATION€¦ · high-tech companies, including Intel, and their thousands of employees. Once a tiny settlement extending three blocks in each direction from its