OFFERING MEMORANDUM QUATAMA WOODS€¦ · Oregon athlete Phil Knight and his track-and-field coach,...

OFFERING MEMOR ANDUM

30 Units • Hillsboro, Oregon

QUATAMA WOODS

www.hfore.com • (503) 241.5541

2 HFO INVESTMENT REAL ESTATE

TABLE OF CONTENTS

20935 NW Quatama Road • Hillsboro, OR 97006

QUATAMA WOODSOFFERING MEMORANDUM

HFO INVESTMENT REAL ESTATE

www.hfore.com • 503.241.5541

Licensed in the States of Oregon and Washington

Greg [email protected](971) 717.6332

Lee [email protected](971) 717.6346

I. Investment Summary 5

II. Location 15

III. Operations Analysis 25

IV. Offer Terms 31

INVESTMENT SUMMARY


QUATAMA WOODS

Property Highlights

• Near Portland Metro’s “Silicon Forest”

• Brand New Construction

• High Quality Finishes in Units

• On-Site Parking

• Spaciously Sized Units

• Adjacent to Max Light Rail

INVESTMENT HIGHLIGHTS

4147 SE 37th Avenue • Portland, OR 97202QUATAMA WOODS

2019 +/- 25,860

0.94

30

+/- 862 31.91TOTAL UNITS YEAR BUILT

AVG UNIT SIZE (SQ FT)DENSITY (UNITS PER ACRE)

APPROX. NR SQ FT

LOT SIZE (ACRES)


Quatama Woods is a 30-unit apartment building in the heart of the Portland metro area’s “Silicon Forest” tech hub. This brand new asset offers 29 two-bedroom floor plans and one spacious ADA (Americans with Disabilities Act) compliant one-bedroom apartment. Units feature high-end stainless steel Whirlpool appliances, insulated windows, tankless water heaters, air conditioning units, luxury vinyl tile flooring, quartz countertops and new cabinetry.

Located near Hillsboro’s Orenco Station neighborhood, Quatama Woods is just minutes away from numerous high tech employers including Intel’s Ronler Acres Campus – Intel’s large concentration of facilities in the world. The property is also within walking and biking distance to dozens of local restaurants and retailers, and is a block away from TriMet’s Quatama Park & Ride Station – which offers light rail service throughout the greater metro area.

Quatama Woods’ desirable location and high-end construction make the asset a rare opportunity for investors to acquire a stable, quality asset in a growing submarket of Portland.

INVESTMENT SUMMARY

Greg [email protected](971) 717.6332

Lee [email protected](971) 717.6346

OFFERING SUMMARY

Tours and Inquiries: All tours and inquiries regarding the Quatama Woods are to be directed to HFO Investment Real Estate at (503) 241.5541.

UNIT MIXUnit Type Unit Count Avg Sq Ft Total Sq Ft % of Total Units

2 Bedroom / 2 Bathroom 29 862 24,998 96.7%

1 Bedroom / 1 Bathroom 1 862 862 3.3%

Total / Averages 30 862 25,860 100.0%

PRICING

ASSET SUMMARYProperty Quatama Woods

Location 20935 NW Quatama Road

City, State Hillsboro, Oregon 97006

County Washington

Year Built 2019

Total Units 30

Approximate Sq Ft 25,860

Average Unit Sq Ft 862

Price $7,800,000

Per Unit $260,000

Per Sq Ft $302

Projected Cap Rate 5.55%

7QUATAMA WOODS • 30 UNITS • HILLSBORO, OR

COLUMBIA RIVER

2626

Forest Park

WASHINGTON

OREGON

LOCATION

VANCOUVER

HILLSBORO

BEAVERTON

CLACKAMAS

LAKE OSWEGO

TIGARD

PORTLAND

GRESHAM

Portland International Airport

217210

219

213

224212

99E

8

10

2 min8 min

11 min

QUATAMA WOODS

84

205

405

5

5


PORTLAND METRO AREA The Portland Metro Area is one of the strongest apartment markets in the nation, as reflected in strong year-over-year rent growth and consistently tight vacancy. The area’s strong job market and high quality of life continues to attract new residents; approximately 65 people move here per day. New apartment construction has not caught up to the housing demand created by in-migration.

PORTLAND MARKET SNAPSHOT

4.95% Metro-area vacancy

#2 for Oregon in Migration

in US

3.84% Year-over-year rent growth*

$68,125 Median household

income

3.8% Unemployment rate

(June 2019)

48.2% Portland residents age 25+ years (with a bachelor’s degree or higher)

21,345 New Portland residents

(2016-2018)

38.3% Metro area renter-

occupied housing rate

4,474 Portland residents

per square mile

*Multifamily NW Apartment Report (April 2018-2019)


NEED UPDATE


LOCATION


QUATAMA WOODS

LIFESTYLE CONVENIENCES AND EMPLOYERS

BEAVERTON

ORENCO STATION

TANASBOURNE

OAK HILLS

BETHANY

CEDAR MILLS

CEDAR HILLS

26

Tualatin Hills Nature Park

Hillsboro Airport

Liberty High School

Springville Elementary School

St Mary’s School

Hillsboro High School

Aloha High School

Westview High School

Bethany Elem. School

Hillsboro Brookwood Library

Sunset High School

Cedar Hills Crossing

Beaverton Town Square

Hillsboro Town Center

Tanasbourne Town Center

Rock Creek

Employee Store

213

8

Aloha CampusCompany Store

URBAN GROWTH BOUNDARY

NW Springville Rd

NW West Union Rd

Walker Rd

SW Jenkins Rd

SW Tualatin Valley Hwy

SW Johnson St

E Main St

NE Cornell Rd

NE Evergreen Rd

NW Brookwood Pkwy

NE Brookwood Pkwy

Cornelius Pass

NE 25th Ave

NW Laidlaw Rd

NW 185th Ave

NW 158th Ave

NW 143rd Ave

NW Saltzm

an Rd

Quatama Woods


Intel’s operations in Oregon stretch across six campuses west of downtown Portland and comprises the computer chip manufacturer’s largest, most comprehensive site in the world. It is a global epicenter of semiconductor research and manufacturing—and an anchor of Oregon’s economy.

Founded in 1974, Intel is the greatest presence in what the tech industry has dubbed the “Silicon Forest”—a heavy cluster of tech-related businesses that includes Portland area newcomers eBay, Amazon.com, and Google.

The Portland Business Journal awarded top status to Intel, in its 2018 Book of Lists, for largest

MANUFACTURING: INTELmetro-area employer, largest manufacturing firm, largest hardware technology company and largest area exporter. Intel reported revenue of $62.8 billion for 2017 and a full time staff of 19,300. Revenue in the 4th quarter of 2017 was a record $17.1 billion, and the company is forecasting a 14% tax rate for FY 2018.

More than 90% of Intel employees live in the Portland metro area. The company accounts for approximately 33% of Washington County’s manufacturing employment and 14% of manufacturing work in the Portland area.

Intel recently completed their R4 Building, a seven-story structure on its Ronler Acres

complex in nearby Hillsboro. This addition—Intel’s first in more than a decade—has brought additional new jobs and residents to Beaverton. These new facilities promise to support up to 1,000 permanent high-tech positions, with an average annual salary of $120,000.

The company’s capital investments in Oregon have surpassed $25 billion. In 2019, the company announced it plans to add 1,748 jobs at its Ronler Acres campus in Hillsboro by 2021.

Intel is the largest property taxpayer in Washington County, with payments of approximately $30 million a year.


Nike, the world’s leading supplier of athletic shoes and apparel, has had its world headquarters in Beaverton since 1990. The company employs over 48,000 people globally. More than 12,000 of those employees work in Oregon, including about 8,500 on campus.

Nike’s rise to prominence in the athletic shoe and apparel field began in 1964, as Blue Ribbon Sports (BRS). Co-created by University of Oregon athlete Phil Knight and his track-and-field coach, Bill Bowerman, BRS was initially a sales outlet for Onisuka Tiger Shoes, a brand of Japanese athletic shoes (now Asics). The company became Nike Inc. in 1971.

The company’s iconic “swoosh” logo was created by a freelance artist for $35 and a stock portfolio. Its globally-known slogan “Just Do It” has a macabre origin—from a statement by serial killer Gary Gilmore made in 1977.

Bowerman’s innovation in shoe technology happened one morning at breakfast. The grid pattern of a waffle iron inspired him to create a groove pattern on the soles of training shoes. The shoes helped athletes grip the track. Bowerman’s rubber/latex shoe outsole became his first patent, in 1974.

Since then, Nike has registered a phenomenal number of patents. Nike has been constantly striving to improve its products. Bill Bowerman was inducted into the National Inventors Hall of Fame in 2014.

Originally composed of eight buildings, Nike’s world headquarters has continued to grow along with the brand. In January 2015, the company began a $380 million expansion of its Beaverton facility. These plans will expand its campus to 3.2 million square feet and adds more than 5,700 parking spaces. Completion of the construction is expected in 2018.

Nike is a leader in Portland business and industry. The Portland Business Journal’s 2018

Book of Lists ranked it just behind Intel as the area’s most successful manufacturing firm.

Phil Knight and his wife, Peggy, have given over $1 billion to various charities, hospitals, universities, medical centers and other causes. The list of his donations includes a $100 million gift, in 2008, to the Oregon Health and Science University to help its ongoing cancer research.

NIKE WORLD HEADQUARTERSBEAVERTON EMPLOYER

WORLD HEADQUARTERS


After moving to Oregon in 1993, Adidas remodeled an old hospital in Portland for its North American headquarters. In August, 2018 it began an expansion that will double the size of its headquarters. Adidas will be adding 1,000 new headquarter employees and expects construction to be complete in 2020.

Under Armour, founded in 1996 in Baltimore opened a Portland outpost in 2015. In 2017 it opened its gleaming new global innovation hub in Portland in a remodeled YMCA adjacent to a brand new eight-lane track and synthetic turf field.. It is home to about 100 employees.

Columbia started in 1938 as the Columbia Hat Co., a distribution business started by two German emigrants. Soon vexed by poor material from suppliers, the company began to design and manufacture fishing and other outdoor-related apparel. They have since become, according to the Apparel Research website, the country’s leading manufacturer of ski wear and a global leader in outerwear. According to the U.S. Small Business Association, Columbia employs over 3,000 workers and generated over $1 billion in revenue in 2008. The Portland Business Journal’s 2015 Book of Lists rates Columbia as the #2 metro-area footwear and apparel company. It also rated 7th in area public companies and 8th in area manufacturing firms.

APPAREL SPORTSWEARADIDAS, UNDER ARMOUR, COLUMBIA SPORTSWEAR


WASHINGTON COUNTYThe second-most populated Oregon county, with an estimated 588,957 residents in 2017, according to the U.S. Census Bureau, Washington County is situated in the Tualatin Valley, part of Oregon’s Wine Country. Its county seat is Hillsboro. A part of the Portland-Vancouver MSA, Washington County includes Beaverton, Tigard, Forest Grove, Sherwood, Tualatin, Hillsboro, Cornelius, and Aloha, among others. The county also has a large number of unincorporated communities in its 727-mile region.

Originally an agricultural area, in recent years Washington County has become a hub of Pacific Northwest high-tech companies. Home to the “Silicon Forest,” a cluster of high-tech companies in the Beaverton-Hillsboro area, the county has attracted cutting-edge hardware and software firms since the 1950s. With a focus on semi-conductors, the Silicon Forest includes some of the Portland-Vancouver MSA’s biggest tech companies, including Intel, Hewlett-Packard, McAfee, Rockwell Collins, Tektronix and Lattice Semiconductor.

Washington County is also home to the world headquarters of Nike and Columbia Sportswear. A major biotech company, Genentech, is located in Hillsboro. In 2015, Genentech made a major expansion of its Hillsboro facility.

Among Oregon’s most culturally eclectic areas, Washington County includes residents and

communities from Europe, Central and South America, Africa, Asia, the Pacific nations and Indo-China.

Washington County has retained 80% of its agricultural and forested lands due to the planning strategies of their Urban Growth Boundary—designed to prevent urban sprawl from engulfing farming and forest lands. The county is rich in vineyards, plant nurseries, and wineries as a result of this planning.

Washington County’s proximity to Oregon beaches (in the west) and the Cascade Mountains (to its east) makes it a haven for outdoor recreational activities. The Tualatin Valley is a strong tourist attraction, due to its

many wineries and its outstanding natural beauty. The county encompasses a number of school districts, including the Hillsboro, Beaverton, Gaston, Banks, and Forest Grove School Districts.

Linked to downtown Portland by MAX light rail and TriMet’s public transit system, Washington County combines the small-town pleasures of a rural environment with the amenities of urban life. Though best known as a hub of high-tech, it is also an outstanding area to raise a family, and for those who prefer a quieter, more laid-back lifestyle.

BEAVERTON CENTRAL MAX STATION


MAJOR RETAILERS

STREETS OF TANASBOURNE

Streets of Tanasbourne, at 19350 NW Emma Way in Hillsboro, evokes the feeling of a classic American downtown, with 55 stores, restaurants and services in a friendly, open-air environment. Retailers include REI, Bath & Body Works, Zumiez, Macy’s and Banana Republic.

TANASBOURNE TOWN CENTER

Tanasbourne Town Center, at Sunset Highway (US 26) and NW 185th Avenue, is a regional shopping hub with nearly 570,000 square feet of retail. Its location at the intersection of Highway 26 and NW 185th make Tanasbourne Town Center one of the busiest retail centers in the Portland metro area. National retailers can be found throughout the center including Target, Nordstrom Rack, ULTA and Trader Joe’s.

CEDAR HILLS CROSSING

Cedar Hills Crossing, at 3205 SW Cedar Hills Blvd, is a sprawling retail complex that features Powell’s Books, McMenamins Pub, New Seasons Market, Sports Authority and Crafts Warehouse.

Shopping in Portland is a great way to burn off those inevitable calories racked up while enjoying the city’s outstanding food and drink. The City of Roses offers a diverse range of retail options—from high-end, nationally-known chains to humble local merchants of hand-made goods. Here is a quick tour of some of Washington County’s prime shopping destinations a short distance from Quatama Woods:


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.

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%.

The Multifamily NW Apartment Report survey proved average Spring 2018-19 year-over-year rent growth at 7.7%.

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.

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 RANKINGS

Restaurant City of the Year– Bon Appetit –

Best City for an Active Lifestyle– Wallethub –

Most Entrepreneurial State – Amazon.com –

Greenest City in America– Newsweek –

Best Foodie City in America– Wallethub & Travelpulse –

No.6 rank by Jetsetter

Healthiest Cities to Live– Thrillist.com –

No.3

No.7

No.5

No.9

No.15No.10

No.1

No.7

No.1

No.4

No.4

No.8

No.5

No.8

No.9 No.10Top City for Entrepreneurs &

Start-Ups– Business.org –

No.23 rank by CNBC

Healthiest City in the U.S.– Active.com –

Best Cheap Destinations in the U.S.– U.S. News and World Report –

Fittest Cities in America– American College of

Sports Medicine –

Best Foodie Cities in the USA– U.S. News and World Report –

Most Educated City in America

– Wallethub –

Best City for Biking– Fast Company –

Best Place to Live in the U.S.– U.S. News and World Report –

Best Bike City in America– Bicycling Magazine –

Fittest Cities in America– CBS News –

Portland consistently receives glowing reviews and rankings from the media.

2019 lists include:

2018 lists include:


OPERATIONS ANALYSIS


QUATAMA WOODS

OPERATIONS ANALYSISQUATAMA WOODS • 30 UNITS • HILLSBORO, OR

Income Projected Operations Note

Projected Gross Rent $594,000 $19,800 1 Less: Vacancy/Credit Loss -$29,700 -$990 -5.0% 2

Net Rental Income $564,300 $18,810 Other Income $35,040 $1,168 3

Includes: Utility Billing (RUBs) $29,640 $988 95.0% Includes: Miscellaneous $5,400 $180

Gross Operating Income $599,340 $19,978

Expenses Projected Operations Per Unit % GOI

Real Estate Taxes $44,620 $1,487 7.4% 4Insurance $7,352 $245 1.2% 5Total Utilities $35,400 $1,180 5.9%

Advertising $4,340 $145 0.7%

Fee Management $49,960 $1,665 8.3% 6Landscaping $3,000 $100 0.5% 7Maintenance/Repairs $9,000 $300 1.5% 8 Turnover $5,600 $187 0.9%

Reserves $7,500 $250 1.3% 9Total Expenses -$166,772 -$5,559 -27.8% Net Operating Income (NOI) $432,568 $14,419 72.2%


OPERATIONS ANALYSISQUATAMA WOODS • 30 UNITS • HILLSBORO, OR

1. RENTS Quatama Woods’s is currently in lease up. Projected rents are expected to average $1,650 per unit, or $1.91 per sq ft.

INCOME

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 Quatama Woods is projected to generate $35,040 in other income in a full fiscal year. The other income includes utility charges (RUBs). • RUBs. The property is going to charge for RUBs. Our projections show utility charges generating $29,640 based on a

$82 monthly charge to residents, which would cover approximately 95% of the water, sewer, and garbage expense.

RENT ROLL ANALYSISUnit Type Unit Count Square Feet Current Scheduled Rents Current Scheduled Rents per Sq Ft

2 Bedroom / 2 Bathroom Flat 29 862 $1,650 $1.91

1 Bedroom / 1 Bathroom Flat 1 862 $1,650 $1.91

Totals / Averages 30 862 $1,650 $1.91


OPERATIONS ANALYSISQUATAMA WOODS • 30 UNITS • HILLSBORO, OREXPENSESQuatama Woods’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 2019-2020 tax year were published October 15. Projected operations include projected taxes for the 2019-2020 property tax year. Those projections are based off the owner’s budget. They total $44,620 or $1,487 per unit.

5. INSURANCE The insurance fee is projected to be $245 per unit or $7,352 total which represents standard insurance costs for properties in the metro area similar to Quatama Woods.

6. MANAGEMENT FEE The management fee is projected at 8.3% of GOI, which represents standard independent, third-party management costs for properties in the metro area similar to Quatama Woods.

7. LANDSCAPING Landscaping expenses are projected at $3,000 annually. This rate is in line with properties in the metro area similar to Quatama Woods.

8. MAINTENANCE AND REPAIRS

Maintenance and repair costs are estimated to total $9,000 or $300 per unit, per year. Quatama Woods is a brand new building with high quality finishes and ongoing maintenance requirments are expected to be minimal.

9. 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 $7,500 total.


OFFER TERMS


QUATAMA WOODS

2424 SE 11th Avenue • Portland, OR 97214www.hfore.com • Phone: (503) 241.5541

QUESTIONS & TOUR REQUESTS:

All inquiries, questions, or tour requests are to be directed to HFO Investment Real Estate at (503) 241.5541.

Please do not disturb the residents.

Lee Fehrenbacher • [email protected] Frick • [email protected] Stephens • [email protected] Smith • [email protected] Tully • [email protected] Gates • [email protected] Rand Hoffman • [email protected]

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

www.hfore.com(503) 241.5541Fax: (503) 241.5548

Brokers licensed in the States of Oregon and Washington.

OFFER TERMS

PRICING

ASSET SUMMARYProperty Quatama Woods

Location 20935 NW Quatama Road

City, State Hillsboro, Oregon 97006

County Washington

Year Built 2019

Total Units 30

Approximate Sq Ft 25,860

Average Unit Sq Ft 862

Price $7,800,000

Per Unit $260,000

Per Sq Ft $302

Projected Cap Rate 5.55%


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.

OFFERING MEMORANDUM QUATAMA WOODS€¦ · Oregon athlete Phil Knight and his track-and-field coach,...

Documents

Transcript of OFFERING MEMORANDUM QUATAMA WOODS€¦ · Oregon athlete Phil Knight and his track-and-field coach,...