STROHECKER – REDEVELOPMENT...

STROHECKER – REDEVELOPMENT OPPORTUNITY2855 SW Patton Road - Portland, Oregon 97201

Offering Memorandum

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to

be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other

person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to

provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of

interest in the subject property. The information contained herein is not a substitute for a thorough due diligence

investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with

respect to the income or expenses for the subject property, the future projected financial performance of the

property, the size and square footage of the property and improvements, the presence or absence of contaminating

substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the

improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or

intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure

has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not

verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding

these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the

information provided. All potential buyers must take appropriate measures to verify all of the information set forth

herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2016

Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in

this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply

affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or

subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for

the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

STROHECKER'S - LAND

Portland, OR

ACT ID Y0210008

TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01Offering Summary

History

Zoning Charts

Aerial

Regional Map

Local Map

MARKET OVERVIEW 02Market Analysis

Demographic Analysis

STROHECKER – REDEVELOPMENT OPPORTUNITY

STROHECKER - REDEVELOPMENT OPPORTUNITY

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INVESTMENT

OVERVIEW


#

OFFERING SUMMARY

Rare opportunity to acquire a site in Portland's exclusive West Hills neighborhood

Suburb location in high income demographic area – average household income

$155,557 in 1-mile radius

SW Patton serves as alternative connector route between Downtown and the

suburbs to the west.

INVESTMENT HIGHLIGHTS

Marcus & Millichap has been selected to exclusively market for sale the Strohecker's site in the Southwest Hills of Portland. The 1.14 acre site is located within the

Portland Heights neighborhood, one of the two neighborhoods that make up Southwest Hills. Southwest Hills sits above Downtown Portland and is known for its stately

homes and is one of the oldest and most exclusive neighborhoods in Portland thanks to its views and closeness to downtown.

The site is well known as the former location of Strohecker's Grocery, which occupied the site from 1902 until it closed in early 2016. As a full-service retailer, offering a

grocer, pharmacy, post office and extensive selection of wine in a wine cellar, the site had a reputation as a convenient all purpose destination. With the Average

Household Income in the 1 mile radius being over $155,000, and the upscale neighborhood being accustomed to a higher end retailer in that location, a Buyer can

monopolize on the tradition of a the neighborhood having its own convenient, dedicated shopping district.

The zoning parameters for the site are CN2, Neighborhood Commercial, with an added stipulation from a 1984 Ordinance to the Comprehensive Plan Map for the City of

Portland, that changed the zoning from single family to commercial and also required the use of the site to be restricted to a grocery store. A new Type III Comp Plan and

Zoning Map Amendment would need to be approved to establish a different zone or one free of the original conditions. Based on our conversations with the interested

parties in the neighborhood, a development that incorporates a grocer as a component among several uses would likely be acceptable opening up the possibility of

alternative development concepts.

INVESTMENT OVERVIEW

5

HISTORY

STROHECKER’S LAND

Strohecker’s: A West Hills Staple for 114 Years

Opened in 1902

Included a Liquor Store, Post Office, Bakery, Café and Pharmacy

Served the West Hills as the Only Walkable Commercial Destination

Neighbors Portland Heights Park

Sold to Lamb’s Thriftway in 1996 and Bales Thriftway in 2012

Closed on January 30th 2016

“ After Gottlieb Strohecker, the store was run by Armand and Martha Strohecker. Longtime neighbors recall Armand handing out candy to neighborhood kids and sweeping the back parking lot. The family business passed next to Wes, Wayne and John Strohecker. Customers could enter a back room near the butcher to make phone calls on rotary phones; they charged their groceries by signing their name to a charge account. Kids roamed free until they were grounded for unauthorized charges on the family account.

Wayne Strohecker, who died in 2012, built a reputation for stocking fine wines and fancy cheeses long before this was common practice among Portland’s grocery stores. “

–Michael Bancud Portland Tribune

Family History


#

EXECUTIVE SUMMARYOFFERING SUMMARY

DEMOGRAPHICS

1-Mile

2015 Estimate Pop 9,504

2010 Census Pop 8,941

2015 Estimate HH 4,388

2010 Census HH 4,109

Median HH Income $92,375

Per Capita Income $71,779

Average HH Income $155,234

OFFERING

Location 2855 SW Patton Road, Portland ,Oregon 97201

Price Unpriced

Lot Size SF 49,658

Existing Building SF 30,532

APN 1S1E08AA 13200

Year Built / Renovated 1986Zoning CN2 – Neighborhood Commercial **

Max Allowable F.A.R. 1.5:1 – 2.5:1

Max Allowable Height 30 feet

** Ordinance No. 155609Ordinance passed by City Council February 16, 1984 amended the Comprehensive Plan Map for the site to Local Commercial and changing the zoning to C3 under the primary condition that use of the site be restricted to a grocery store. (See next pages for zoning charts)

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#

DEMOGRAPHICS

1-Mile








8

ZONING CHARTS


#

DEMOGRAPHICS

1-Mile








9

ZONING CHARTS

AERIAL


10

REGIONAL MAP


11

LOCAL MAP


12


13

MARKET

OVERVIEW

MARKET OVERVIEW


Portland-Vancouver-Hillsboro Metro

Market Highlights

High population growth

The Portland-Vancouver metro has recorded more than 20 years of positive net migration.

Expanding alternative energy industry

Alternative-energy companies are locating within the region.

Low business costs

The cost of doing business is among the lowest on the West Coast, supported by no state

income tax in Washington and no sales tax in Oregon.

PORTLAND-VANCOUVER

The Portland-Vancouver metro is located near the confluence of the Columbia and

Willamette rivers, and stretches across the Oregon border into Washington state. Mount

Hood and the Cascade Range stand to the east, and the Oregon Coast Mountain Range lies

to the west. The metro is situated at the northern end of the Willamette Valley. A long

growing season and mild temperatures foster a diverse field of agricultural products.

Geography

14

MARKET OVERVIEW

The metro’s economy has shifted from timber to industries that include athletic

and outdoor activities, clean tech, advanced manufacturing and software. Lower

land costs, a skilled labor pool and affordable, abundant power attract

companies to the region. The favorable tax structure, with no state income taxes

in Washington and no sales tax in Oregon, lure businesses to the metro.

Near-term growth in clean technology and alternative energy companies such as

Vestas Wind, SolarWorld and Iberdrola Renewables will continue to draw

employees from outside the region, as well as help retain workers. Nike is a

leader in the growing athletic and outdoor industry. The company continues to

expand its footprint and hiring in the metro. The metro supports more than 700

athletic and outdoor industry firms. Advanced manufacturing firms employ tens of

thousands of workers in the region at companies such as Oregon Iron Works,

Daimler and PCC Structurals. Intel and IBM are significant employers in the

software industry, which comprises nearly 1,400 companies.

Medical research is also expanding in the metro, headed by Oregon Health and

Sciences University (OHSU). OHSU is a world-renowned leader in biomedical

research, studying a number of disorders, including neurodegenerative diseases,

stress, genetic disorders and clinical nutrition.

Economy

* Forecast

Sources: Marcus & Millichap Research Services; BEA; Moody's

Analytics; U.S. Census Bureau; Experian

PORTLAND-VANCOUVER


15

MARKET OVERVIEW

Top employers in the Portland-Vancouver metro fall within a wide range of industries, from universities and healthcare to financial institutions. The high-tech and alternative

energy sectors continue to expand with the help of many smaller and startup firms.

Intel employs more workers in the region than in any other market in the world. The company has six campuses in the area and more than 17,000 employees in Oregon. Its

recent capital investment includes a new multibillion-dollar fabrication plant for research and development. Intel’s largest site is in Hillsboro, home to its most advanced

research and production fabrication facilities, which it is expanding.

Boeing continues to grow its massive Gresham manufacturing site, which now employs more than 1,800 residents. Further expansions are planned and underway to

enlarge the facility, which will bring new jobs to the metro. Elsewhere, expansions at the Oregon Health and Sciences University have increased research funds and

employment at that institution.

Area hospitals also are growing in anticipation of greater demand from an increasing population base and aging baby boomers. PeaceHealth Southwest Washington

Medical Center, Providence Health & Services, Legacy Health System and Adventist Health all have built, or are in process of constructing, new buildings. Additionally,

Vancouver Clinic, one of the leading healthcare providers in Clark County, has enlarged its facilities.

Employers

Major Employers

Intel Corp.

Providence Health & Services

Oregon Health and Sciences University

Portland State University

Kaiser Foundation Health Plan of the NW

Legacy Health System

Nike, Inc.

Wells Fargo

Fred Meyer Stores

U.S. Bank

* Forecast

Sources: Marcus & Millichap Research Services; BLS; Moody's

Analytics; Experian

PORTLAND-VANCOUVER


16

MARKET OVERVIEW

The pace of population growth in the Portland-Vancouver metro will slow to 1.1 percent annually through the next five years, slightly lower than the average pace since

2000. Net migration accounted for most of the gain in recent years. The region’s population is forecast to surpass 2.4 million inhabitants in five years.

Among the working-age population, 20- to 24-year-olds account for about 146,300 of metro residents. Growth in this cohort will provide companies with a young and

diverse labor pool. Portland-Vancouver workers are more educated than the U.S. average, with 33.6 percent possessing a bachelor’s degree, compared with just 28.6

percent nationally.

Higher education levels correlate with increased incomes. The median household income in the metro has risen drastically since 2000 to $62,200 per year. This high

income level reflects the growing high-tech industry and improving education level.

Higher incomes have allowed more than 60 percent of residents to own homes. The median home price in Portland, at $286,400, is more affordable than many other

Western U.S. cities. Over the next five years, household income is expected to outpace rising home prices, making homeownership attainable for more residents.

Demographics

PORTLAND-VANCOUVER

* Forecast

Sources: Marcus & Millichap Research Services; AGS; Experian;

Moody's Analytics; U.S. Census Bureau


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MARKET OVERVIEW

2016 Retail Forecast

Construction: Developers will remain

active in Portland, delivering 500,000

square feet of retail space this year. The

Southeast submarket is forecast to

receive more than 45 percent of new

deliveries. In the previous year, 742,000

square feet was completed.

Vacancy: After rising 10 basis points theprevious year, vacancy will fall 60 basispoints in 2016 to 4.1 percent as netabsorption reaches more than 1.0 millionsquare feet of retail space. Submarketsnear the core will continue to maintainlower-than-average vacancy rates.

Rents: Tightening operations and strongmarket fundamentals will push theaverage asking rent up 3.4 percent thisyear to $18.09 per square foot. In 2015,the average asking rent lifted 2.3percent.

Employment: Following a 37,000

increase in jobs last year, employers will

boost the employment base by 2.7

percent in 2016, creating 30,000

positions.


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PORTLAND METRO AREA

Strong Demographics Lure Buyers North to Portland

Rising household incomes benefit retail sales as vacancy tightens. A steady increase in

population growth, attributed to a number of California residents moving to the metro seeking a

lower cost of living, and advancing median incomes have boosted retail sales in Portland. The

metro’s population has risen nearly 1.2 percent over the last four quarters while the median

household income climbed approximately 2.5 percent. These drivers have contributed to a steady

increase in retail sales, edging up demand for retail space. However, deliveries will moderate this

year, keeping the vacancy rate below the replacement threshold. These tight conditions could

ease in the quarters ahead as more than 1.2 million square feet of retail space is working through

the planning pipeline. Builders will primarily focus on the Southeast submarket in 2016 but plan to

deliver additional space in Clark and Yamhill counties within the next two years. This includes a

411,000-square-foot project proposed within Yamhill County. This development, named

McMinnville Plaza, is expected to be completed in 2018 and will house a variety of retailers. As

space remains limited in the metro, asking rents will further rise, reaching the fastest year-end

growth rate this cycle.

Healthy demographics and strong operations pique investor interest in Portland. Many retail

buyers are flocking to the metro primarily focusing on assets in the urban core or, if listings are

limited, well-located suburban properties. This includes out-of-state investors seeking relatively

higher returns than are available in their local markets. The majority of these buyers are from other

West Coast metros, where retail assets can trade with cap rates 150 basis points less than in

Portland. Single-tenant properties are highly sought after, changing hands with average cap rates

in the low-6 percent range. Assets with nationally known tenants, such as Wendy’s and IHOP, will

trade in the low- to high-5 percent span. Additionally, interest in multi-tenant properties grew as

transaction velocity increased. Cap rates for these assets remained in the low-7 percent range,

with properties in the Southeast submarket and within Clark County trading in the mid- to high-6

percent area.

increase

in total

employment

500,000

2.7%

sq. ft.

will be

completed

basis point

decrease in

vacancy

60

3.4%

increase

in asking

rents

MARKET OVERVIEW

Economy

Construction

* Forecast

Sources: Marcus & Millichap Research Services; CoStar Group, Inc.

* Forecast

Sources: Marcus & Millichap Research Services; Bureau of Labor

Statistics; Economy.com


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PORTLAND METRO AREA

In the last 12 months, employers hired 29,700 new workers, expanding payrolls 2.7 percent. This pushed the

metrowide unemployment rate down 100 basis points during this time to 4.3 percent. In the prior year, more

than 34,000 jobs were added.

Nearly all sectors across Portland registered job growth over the last four quarters. The largest percentage

employment gain was posted in the information sector at 6.6 percent with 1,600 jobs. The education and

health services sector created the greatest number of positions, hiring nearly 6,400 workers after rising 4.0

percent during the same time period.

During the year ending in the second quarter, average retail sales climbed 3.2 percent. In the previous annual

period, retail sales jumped 5.4 percent.

Outlook: In 2016, Portland employers are forecast to hire 30,000 workers, expanding the employment base by

2.7 percent. During the prior year, nearly 37,000 jobs were created.

In the last four quarters ending at midyear, builders completed 600,000 square feet of retail space.

Approximately 44 percent of these deliveries were located within Clark County. In the prior annual period,

more than 958,000 square feet of retail space was added to inventory.

As vacancy for retail space remains relatively low across Portland, developers have around 1.2 million square

feet under proposal with potential completion dates through 2018. More than half of this space is expected to

be delivered in the Yamhill County and Clark County submarkets.

One of the largest projects under construction is a 143,000-square-foot Fred Meyer supermarket. The

development, forecast for completion this year, will be located in the city of Happy Valley within the Southeast

submarket.

Outlook: After completing 742,000 square feet of space in 2015, builders are forecast to deliver 500,000

square feet of retail space this year. More than 45 percent of this new space will be located in the Southeast

submarket.

PROPERTY NAME

MARKETING TEAM


DEMOGRAPHICS

Source: © 2016 Experian

Created on February 2017

POPULATION 1 Miles 3 Miles 5 Miles

2020 Projection

Total Population 9,603 131,036 383,686

2015 Estimate


2010 Census


2000 Census


Current Daytime Population

2015 Estimate 20,973 306,100 586,775

HOUSEHOLDS 1 Miles 3 Miles 5 Miles

2020 Projection

Total Households 4,428 70,702 181,286

2015 Estimate


Average (Mean) Household Size 2.11 1.78 2.06

2010 Census


2000 Census


Occupied Units

2020 Projection 4,428 70,702 181,286

2015 Estimate 4,536 70,418 179,729

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles

2015 Estimate

$150,000 or More 22.61% 11.19% 10.21%

$100,000 - $149,000 16.77% 13.24% 15.18%

$75,000 - $99,999 11.24% 11.81% 12.91%

$50,000 - $74,999 12.90% 14.07% 16.43%

$35,000 - $49,999 6.40% 10.49% 11.43%

Under $35,000 22.79% 35.74% 30.74%

Average Household Income $155,234 $92,739 $90,861

Median Household Income $92,375 $56,235 $61,907

Per Capita Income $71,779 $50,263 $43,071

HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 Miles

Total Average Household Retail Expenditure

$78,738 $66,540 $69,305

Consumer Expenditure Top 10 Categories

Housing $21,246 $18,375 $18,958

Transportation $12,830 $11,188 $11,887

Shelter $12,597 $11,393 $11,619

Food $8,532 $7,208 $7,511

Personal Insurance and Pensions $8,037 $6,142 $6,561

Health Care $5,146 $4,012 $4,249

Entertainment $4,213 $3,346 $3,468

Utilities $3,811 $3,235 $3,387

Cash Contributions $2,619 $1,751 $1,813

Apparel $2,346 $1,885 $1,943

POPULATION PROFILE 1 Miles 3 Miles 5 Miles

Population By Age

2015 Estimate Total Population 9,504 124,329 371,046

Under 20 18.16% 13.43% 17.68%

20 to 34 Years 19.60% 31.92% 27.78%

35 to 39 Years 5.40% 7.79% 8.60%

40 to 49 Years 13.98% 13.36% 14.61%

50 to 64 Years 23.78% 19.88% 19.34%

Age 65+ 19.07% 13.62% 11.99%

Median Age 44.98 37.86 37.57

Population 25+ by Education Level

2015 Estimate Population Age 25+ 7,284 97,286 280,137

Elementary (0-8) 0.20% 1.06% 1.59%

Some High School (9-11) 0.91% 2.67% 3.05%

High School Graduate (12) 5.48% 9.46% 11.59%

Some College (13-15) 13.77% 18.74% 20.12%

Associate Degree Only 2.87% 5.38% 6.05%

Bachelors Degree Only 35.78% 35.27% 33.91%

Graduate Degree 40.91% 27.25% 23.28%

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