OFFERING MEMORANDUM 48 Units – Vancouver, WA...Vancouver, Washington. Located on a quiet street in downtown Vancouver, Midtown is just blocks from the heart of the redeveloping Main

OFFERINGMEMORANDUM

48 Units – Vancouver, WA

Table of Contents1. Executive Summary ..............................3

• Introduction

• Property Overview

• Interior Photos

• Floor Plans

2. Location/Submarket Overview ..........14

• Location Aerial

• Districts Aerial

• Map

• Statistics & Rankings

• City of Vancouver

• The Waterfront Development

• Immediate Local Amenities

3. Market Overview .................................22

• City of Portland

• Portland Rankings

4. Financials .............................................26

• Property Economics

• Comparables

5. Why Kidder Mathews ..........................29

• Company Overview

• Team Bios

Jordan CarterSenior Vice President, [email protected]

Tyler LinnVice [email protected]

Clay NewtonSenior Vice President, [email protected]

Exclusively listed by

The information supplied herein is from sources we deem reliable. It is provided without any representation, warranty or guarantee, expressed or implied as to its accuracy. Prospective Buyer or Tenant should conduct an independent investigation and certification of all matters deemed to be material, including, but not limited to, statements of income and expenses. Consult your attorney, accountant, or other professional advisor.

Kidder Mathews101 SW Main Street, Suite 1200Portland, OR 97204

kiddermathews.com

Executive Summary

Kidder Mathews | Offering Memorandum 4

Executive Summary

INTRODUCTION

Midtown is a tremendous opportunity for an investor to acquire a newly built and turn-key multifamily asset in one of Portland’s largest and most attractive suburbs, Vancouver, Washington. Located on a quiet street in downtown Vancouver, Midtown is just blocks from the heart of the redeveloping Main Street “uptown” district. The 48 well-designed apartment homes and core location make it extremely appealing to residents looking

to experience one of the most “livable cities” in America.

INVESTMENT HIGHLIGHTS

Core located in downtown Vancouver, WA

Blocks from CBD, waterfront, restaurants,

and retailers

One of top rent growth markets in U.S. (Axiometrics)

Desirable mix of 1 and 2 bed apartment homes with

modern finishes

Built and fully stabilized in 2017

Extremely tight submarket with ±4.00%

submarket vacancy

Price: $11,300,000


Executive Summary

Midtown is one of downtown Vancouver’s newest and finest multifamily properties, featuring 48 well-designed apartment homes. Completed in 2017, Midtown’s desirable unit mix features 11 one bed/one bath units and 37 two bed/one bath units. Brick-lined sidewalks and vintage lampposts give the street a quaint historic charm.

With high-end finishes, Midtown features hardwood flooring, ceiling fans, picturesque energy efficient windows, and washer/dryers. The full size kitchens have granite counter tops, stainless steel appliances, and modern updated cabinetry. All units have 10 foot ceilings, making the livable area feel spacious. Residents can utilize the on-site parking lot or abundant on-street parking exists nearby.

Despite being centrally located in downtown Vancouver with close proximity to Mill Plain and I-5, Midtown sits on a relatively quiet street. However, it’s just a stones throw from the shops, restaurants, and offices that buzz with activity throughout the day and night, thanks to the 12,000 employees who work in

the downtown core. It’s also less than a half mile to the 101 acre Clark College campus, with an enrollment of over 13,000 students.

With several projects underway in the downtown core, including a massive mixed-use redevelopment of 35 acres along the Columbia River, downtown Vancouver is in in the midst of expanding its already vibrant community. In a short time, Vancouver has gone from not only being Portland’s largest suburb, to one of its most desirable.

PROPERTY OVERVIEW

PROPERTY INFORMATION

Address 513 E 16th St, Vancouver, WA 98663

Tax ID Number 40485000 & 986038526

Number of Units 48

Buildings 4

Land Area 0.67 acres

Year Built 2017

Total Square Feet 30,368 SF

Average Apt. Unit Size 575 SF

Average Mo. Apt Rent $1,280

Parking ±18 off-street

Heat Electric

Siding Cedar & Hardie-Board


MIDTOWN INTERIOR PHOTOS

Modern finishes

Full kitchens

Stainless steel appliances

Granite counters

Washers/dryers

10’ ceilings

Electric zonal heat

Balconies

INTERIOR HIGHLIGHTS


MIDTOWN INTERIOR PHOTOS


Floor Plans BUILDINGS 1 & 2, LEVEL 1


BUILDINGS 1 & 2, LEVEL 2

Floor Plans


Floor Plans BUILDING 3, LEVEL 1


BUILDING 3, LEVEL 2

Floor Plans


Floor Plans BUILDING 4, LEVEL 1


BUILDING 4, LEVEL 2

Floor Plans

Location Overview


LOCATION AERIAL

E Mill Plain Blvd

E 16

th S

t

Location Overview

E M

cLou

ghlin

Blv

d

COLUMBIA RIVER

UPTOWN VILLAGE NEIGHBORHOOD

MARSHALL PARK

WATERFRONT DEVELOPMENT

CENTRAL BUSINESS DISTRICT

PORTLAND

MIDTOWN


VANCOUVER DISTRICTS AERIAL

THE WATERFRONT FUTURE DEVELOPMENT

PORTLAND V.A. MEDICAL CENTER - VANCOUVER

PORTINDUSTRIALDISTRICT

GOVERNMENTDISTRICT ARTS

DISTRICT

UPTOWN VILLAGE

CENTRAL BUSINESS DISTRICT

CLARK COLLEGE

MARSHALL PARK

HUDSON’S BAY HIGH SCHOOL

FORT VANCOUVER NATIONAL SITE

PEARSON FIELD

E 4th Plain Blvd

E McLoughlin Blvd

20th St

17th St

25th St

Mai

n S

tM

ain

St

Bro

adw

ay S

t

W Evergreen Blvd

9th St

6th Street

11th St

W 4th Plain Blvd

E Mill Plain Blvd

Fort Vancouve

r Way

E 5th St

Was

hing

ton

St

Fran

klin

St

Kau

ffm

an A

ve

C S

t

MIDTOWN

Location Overview


MAP

Location Overview

MIDTOWN

Portland

Beaverton

Gresham

Camas

Vancouver

Salmon Creek

SAUVIE ISLAND

MILEAGE & DRIVE TIMES

To Portland 8.8 miles / 15 minutes

To Gresham 20.7 miles / 25 minutes

To Beaverton 15.8 miles / 22 minutes


BEST VALUE TOUR IN THE WEST (2017)

#1

TOP 10 PLACES TO RETIRE (2017)

#8

MOST “HIPSTER CITY” IN AMERICA (2017)

#1

Top 100MOST LIVABLE CITY IN AMERICA

(2013)

RANKINGSSTATISTICS

Submarket Overview

VANCOUVER, WA – MAJOR EMPLOYERS

EMPLOYER EMPLOYEES DESCRIPTION

PeaceHealth 4,445 Hospital

Evergreen Public Schools 2,856 K-12 public education

Vancouver Public Schools 2,800 Public school district

Bonneville Power Administration* 2,723 Utility

Legacy Salmon Creek Medical Center

1,946 Medical center

Fred Meyer Stores, Inc. 1,760 Grocery & general merchandise

Clark County, Washington 1,566 Local government

The Vancouver Clinic 1,319 Multi-specialty healthcare

Fisher Investments 1,095 Investment services

Battle Ground Public Schools 1,089 Public education

WaferTech, LLC* 1,040 Silicon wafer manufacturing

Clark College* 1,031 University

*From 2017 Book of Lists, Vancouver Business Journal

CITY OF VANCOUVER

19.3% of Portland-Metro Population

7% rent growth (2017)

4.06% Apartment vacancy in West Vancouver

$1.3B being invested into Vancouver’s waterfront

16,000+ of nearby college students

0% Washington state income tax

175,000+ Vancouver’s population, Portland’s largest suburb

463,000+ Clark County population

20 minutes to downtown Portland

4.8% job growth (2017)

9.8% median SFR sale price increase (2017)

19,000 new Clark County residents (2016)


CITY OF VANCOUVER

Vancouver is a thriving metropolis located just a nine miles north of downtown Portland, Oregon across the Columbia River. It is the largest suburb in the Portland-metro area with around 175,000 residents (19% of the Portland MSA), and combined with the Portland-Metro area’s 2.4 million residents, ranks among the top 25 metro areas in the country. Already the fourth largest city in Washington, Clark County is also the fastest growing community in the Pacific Northwest.

Vancouver has been increasingly recognized for its livability and desirability. In 2017, Livability.com placed the city sixth on its list of “Top 10 Best Places to Retire.” Sunset named Vancouver its “Northwest Winner” on its 2017 list of “20 Best Value Towns in the West. And Movehub just ranked Vancouver as the number one “most hipster” city in America, recognizing its progressive politics, sustainable food, thrift store bargains, and delicious local beer.

The Esther Short neighborhood, just blocks from Midtown, sits at the heart of downtown Vancouver’s cultural center. This hub is packed with restaurants and shops on every block, and the farmers market at Esther Short Park is one of the main weekend attractions.

Because of its affordability and convenience, a significant percent of Portland’s workforce lives in Clark County and commutes to Portland. Additionally, downtown Vancouver is experiencing several revitalization projects that will increase urban living options, green spaces, offices, and shopping. A 32 acre and $1.3 billion mixed-use waterfront project is underway downtown and a new I-5 bridge connecting Portland and Vancouver has been in discussion for several years.

Helping continue the long term growth of the city, Vancouver maintains a diverse and growing economy known for its educated workforce, good schools, strong health care and high-tech sectors, solid transportation infrastructure, and desirable no state income tax system. Less than a half mile from Midtown, Clark College enrolls approximately 13,000 students on its 101 acre campus.

Vancouver is closer to the Portland International Airport than most of Portland, accessible via Interstate 205 and five - twenty minutes away from most of Vancouver and its eastern suburbs of Camas and Washougal. C-TRAN is Clark County’s public bus system.

The Pacific Ocean is less than 90 miles to the west. The Cascade Mountain Range rises on the east. Mount St. Helens National Volcanic Monument and Mt. Hood are less than two hours away. The spectacular Columbia River Gorge National Scenic Area lies 30 minutes to the east. Vancouver combines the excitement of a major metropolitan area with small-town charm and abundant recreational opportunities.

Overall, Vancouver is a dramatically growing city that has stepped out of the Portland shadow and created its own destination community for both existing residents and those new to the Pacific Northwest.

Submarket Overview


Submarket OverviewTHE WATERFRONT DEVELOPMENT

This development may effectively make the Portland suburb actually cooler than Portland ...

– Sophia June, Willamette Week

“ “The waterfront development included a seven-acre riverside park with 3,300

homes, and 32 acres of retail, high-end restaurants, and Hotel Indigo. All of

this, anchored by a 90-foot cable-stay pier extending out over the Columbia

River with mountain views, makes for a one-of-a-kind development that is

poised to transform the city of Vancouver.

- $1.5 billion development

- 20-block, 32-acre urban development south-facing on the

Columbia River

- 1.25 million feet of Class A creative office space

- 250,000 SF of planned restaurant and retail space

- 3,300 planned residential units

- $35 million waterfront park - spanning 7.3 acres

- $250 million phase 1 is currently under construction

“A world-class urban design at the water’s edge”

The Waterfront Master Plan

Source: thewaterfrontvancouverusa.com


IMMEDIATE LOCAL AMENITIES

Submarket Overview

ESTHER SHORT PARK A 5-acre gem in the heart of downtown Vancouver, Esther Short Park is the oldest public square in the state of Washington. The park has many amenities for the whole family and attracts visitors, local residents and workers out for a stroll daily.

THE WATERFRONT The Waterfront-Vancouver is a new urban development, led by Gramor Development, which is under construction just west of the I-5 interstate bridge in downtown Vancouver. The development will have 3,300 residential units, 1 million SF of commercial office space and 250,000 SF of commercial retail. The plan also will accommodate a 150-room hotel. This development is being heralded as a “game changer” for Vancouver.

FORT VANCOUVER

Vancouver is one of only two cities in the Pacific Northwest to have a U.S. National Park Service Historic Site in its downtown core. Fort Vancouver National Historic Site includes Pearson’s airfield, a reconstructed 19th century trading post and fort with a bastion, seasonal gardens, an outlying village, working trade houses for baking, carpentry, and blacksmithing. Set on 191-acres next to the Columbia River, the Fort is a not-to-miss experience unique to Vancouver at all times of the day.

SHOPPING

With a variety of shops and galleries ranging from names you know and love to locally-owned boutiques, Vancouver has a host of shopping options. Uncover the latest trends at Vancouver Mall, Southwest Washington’s largest shopping destination. Or head uptown for a selection of quaint boutiques and art galleries. For those looking to avoid paying sales tax, Portland’s Hayden Island is just minutes away with a wide assortment of national retailers.

Photo: Jeff Hollett

Market Overview


CITY OF PORTLAND

Portland is considered one of the nation’s most livable cities. Located on the banks of the Willamette River only 90 minutes from snow-capped peaks and the Pacific Ocean, one might not realize Portland’s bustling downtown and waterfront are the heart of a metropolitan region with more than 2 million people. Twelve bridges span a wide elbow of the Willamette River, connecting the east and west sides of town. Throughout the metro area are thriving neighborhoods filled with restaurants, record shops, bars, funky clothing stores, antique malls and art galleries.

Portland is known for its progressive bike-friendly attitude, lively music and restaurant scenes, food carts, farmers’ markets, and endless recreation possibilities. Beyond the metro area residents enjoy the Pacific Northwest’s natural beauty via slopes, sails, surf and trails.

Portland is a walkable and bikable city. Within walking distance of most parts of downtown is the campus of Portland State University, the world-class Portland Art Museum, Waterfront Park, Pioneer Courthouse Square, the Oregon Historical Society, a performing arts complex and a concert hall. For the sports-minded, Portland is home of the MLS Timbers, NBA Trail Blazers, and WHL Winterhawks. Outdoor enthusiasts love Forest Park, the largest city park in the nation, with 5,000 acres of hiking and biking trails, a zoo, public gardens and beautiful old-growth woods. The downtown core is connected by one of the world’s leading public transportation systems, a combination of buses, streetcars, and light-rail trains, putting the entire metro area only a couple stops away.

Portland Market Overview

#2

POPULATION

2,436,583MEDIAN HOME VALUE

$406,200

MOVING DESTINATION IN US (2017)

ANNUAL RENTGROWTH NATIONALLY

#2


PORTLAND RANKINGS

America’s “coolest” city right now – International Traveller, Jan 2016#1 Top 10 cycling cities

– Travel Channel 2016#2

Fittest city in America – Huffington Post#1

America’s greenest cities – Travel & Leisure, May 2015#1 Moving destination of 2017

– United Van Lines 2018#2

Best places for business and careers – Forbes 2017#1


ULI 2017 Emerging Trends ranks Portland 3rd among 78 metro areas for real estate investment

In 2016, Oregon personal income growth was 5th nationally at 1.3%

Portland ranked #20 on Business Insider’s Top 50 Best Cities for 2016

Portland MSA multifamily vacancy is below 4.0%

Portland MSA is the 8th strongest rental market in the nation, per Axiometrics

Oregon was one of the top 2016 destination for people moving from one state to another according to a United Van Lines Study for the 3rd year in a row

Portland has added 42,000 residents over the last three years, an increase of 1.7%; above national average to confirm

Portland ranked 19th in the nation

Portland estimates around 40,000 new migrants a year, of which more than 40& have a college degree

Portland MSA employment is at an all-time high, employing ±1,072,600 workers

In the past two years, Portland MSA has added over 72,800 jobs, an increase of 3.4% in the last year alone

Portland MSA is expected to add nearly 48,000 additional jobs in the next two years

Nike announced a major $275+ million expansion that will create 500 new jobs

Kaiser Hospital in Hillsboro was completed with 1,100 new jobs

Daimler Trucks has announced plans to build a $150 million headquarters on Swan Island with 400 new jobs

INVESTING IN PORTLAND GROWING POPULATION EMPLOYMENT


Financials


Property Economics

PRICE ANALYSIS

Sale Price $11,300,000

Price Per Unit $235,417

Price Per SF $372

Cap Rate 5.12%

INCOME ANNUAL PER UNIT

Potential Rental Income $737,341 $15,361

Other Income (Est) $8,000 $167

Utility Reimbursement $27,360 $570

Pet Rent $5,700 $119

Gross Operating Income $778,401 $16,217

Vacancy (5%) ($36,867) ($768)

Effective Operating Income $741,534 $15,449

QTY TYPE AVG SF AVG RENT $/SF

11 1 bd/ 1 ba 432 $1,245.45 $2.88

37 2 bd/ 1 ba 618 $1,290.41 $2.09

48 (TOTAL) 27,618 $61,445.12 $2.22

ESTIMATED EXPENSES ANNUAL % OF EXP PER UNIT

Real Estate Taxes* 2017 $14,392 1.94% ($300)

Insurance Quote $5,325 0.72% ($111)

Water/Sewer Est $17,500 2.36% ($365)

Electricity T-3 $2,000 0.27% ($42)

Garbage T-3 $7,000 0.94% ($146)

Landscaping T-3 $2,400 0.32% ($50)

Maintenance/Repairs T-9 $19,200 2.59% ($400)

Turnover Est $7,200 0.97% ($150)

Professional Management Est $29,650 4.00% ($618)

Onsite Management Est $37,050 5.00% ($772)

Office/Admin Est $12,000 1.62% ($250)

Reserves Est $9,600 1.29% ($200)

Total Operating Expenses ($163,317) 22.02% ($3,402)

Net Operating Income $578,217 $12,046

CURRENT RENTS

*Midtown is certified through the Multi-family Housing Tax Exemption according to Vancouver Municipal Code

Chapter 3.2. As part of the program, Midtown’s real property improvements are exempt from taxation for a period of

12 years, starting January 1, 2018. As part of this tax exemption, Midtown must maintain 10 units as ”affordable” to

tenants making a maximum of 115% of the area median income. Currently, the rent limits for 115% of AMI are $1,504

for a single person household, $1,719 for a two person household, and $1,935 for a three person household. More

information can be found here.

http://www.cityofvancouver.us/ced/page/multi-family-tax-exemption-program


ComparablesSALE COMPARABLES

EAST BANK QUARTERS686 SE Spokane Street, Portland, OR

Sale Date 1/04/2018

Year Built 2017

# of Units 12

Price/SF $305

Price $3,150,000

$/Unit $262,500

Cap Rate 5.1%

2

THE ELMORE1803 N Lombard Street, Portland, OR

Sale Date 8/04/2017

Year Built 2016

# of Units 12

Price/SF $269

Price $2,675,000

$/Unit $222,917

Cap Rate 5.25%

4

PIONEER VISTA16501 NE 15th Avenue, Ridgefield, WA

Sale Date 3/01/2017

Year Built 2016

# of Units 109

Price/SF $183

Price $22,000,000

$/Unit $201,834

Cap Rate 5.2%

1

SHERM APARTMENTS1101 SE Sherman Street, Portland, OR

Sale Date 9/21/2017

Year Built 2011

# of Units 10

Price/SF $467

Price $2,570,000

$/Unit $257,000

Cap Rate 5.12%

3

HAROLD5490 SE Milkwaukie Avenue, Portland, OR

Sale Date 12/12/2017

Year Built 2015

# of Units 11

Price/SF $371

Price $3,100,000

$/Unit $281,818

Cap Rate 4.73%

BRADLEY COMMONS432 NE Jessup Street, Portland, OR

Sale Date 10/17/2017

Year Built 2016

# of Units 12

Price/SF $324

Price $2,875,100

$/Unit $239,592

Cap Rate 5.37%

5 5

Why Kidder Mathews


Company Overview

Award Winning Services 2001-2017

PSBJ Largest Commercial

Real Estate Firms

18 times

The Oregonian Top Work Places

6 times

SFBT Largest Commercial Real

Estate Firms

5 times

PSBJ Fastest Growing

Companies

5 times

PBJ Largest Commercial Real

Estate Firms

14 times

Kidder Mathews Services

Commercial Brokerage

Property Management

Valuation Advisory

Consulting

Project & Construction Management

Development Management

Debt & Equity Finance

OR Business Magazine 100

Best Companies

9 times

Kidder Mathews is one of the largest, independent commercial real estate firms on the West Coast, with nearly 700 real estate professionals and staff in 20 offices in Washington, Oregon, California, Arizona, and Nevada. We offer a complete range of brokerage, appraisal, property management, consulting, sustainability, and project and construction management services for all property types.

SAN DIEGO

ORANGE COUNTYINLAND EMPIRE

PHOENIX

SEATTLE

SOUTH SEATTLETACOMA

OLYMPIA

PORTLAND

SAN FRANCISCO

SACRAMENTO

SILICON VALLEYREDWOOD SHORES

BELLEVUE

RENOROSEVILLE

CARLSBAD

LOS ANGELES COMMERCE

LONG BEACHEL SEGUNDO

WASHINGTON

# Brokers ................................... 119 # Property Managers .................... 22 # Appraisers ................................. 24

OREGON

# Brokers ..................................... 35 # Property Managers ...................... 6 # Appraisers ................................... 4

CALIFORNIA

# Brokers ................................... 158 # Property Managers .................... 19 # Appraisers ................................. 11

ARIZONA

# Brokers ..................................... 15 # Property Managers ...................... 1 # Appraisers ...................................... 1

NEVADA

# Brokers ..................................... 10 # Property Managers ...................... 1

PROPERTY MANAGEMENT

48M+ sfPortfolio

VALUATION ADVISORY

1,300+Appraisals annually

COMMERCIALBROKERAGE

330+

$5.6B

30.9M sf

18.6M sf

Overall annualtransaction volume

Brokers

Annualleases

Annual sales


Team Bios

Tyler LinnVice President

Jordan CarterSenior Vice President, Partner

CAREER SUMMARYJordan Carter is a senior vice president and partner in the Portland office of Kidder Mathews. Since joining Kidder Mathews in 2006, his practice has focused on the sale and acquisition of multifamily and investment properties primarily in the Portland metropolitan area and along the I-5 corridor. While at Kidder Mathews, Jordan has sold over 100 properties and 3,000 apartment units, totaling over $350 million in value.

Jordan’s experience includes representing buyers and sellers of traditional apartments, new construction apartments and mixed-use buildings, as well as apartment development land.

As a licensed attorney in Oregon, prior to entering the commercial real estate profession, Jordan practiced law in Portland and assisted in his family’s construction business. Jordan’s legal background and knowledge of the construction industry benefit his clients by bringing a unique perspective to help evaluate and facilitate multifamily transactions.

Clay NewtonSenior Vice President, Partner

CAREER SUMMARYClay Newton began his career 25 years ago working in commercial real estate appraisal. He started as a Commercial Real Estate Broker in 1998, founded his own company in 2006 and in 2013 joined Kidder Mathews. Clay is currently a senior vice president and partner at Kidder Mathews where his focus is representing apartment property owners and investors in the sale and acquisition of assets valued between $1 million and $20 million.

Clay has served on the board and development committee of Portland Youth Builders, helping to improve the lives of at-risk students. He serves on the forms committee for the Commercial Association of Brokers and is the past President of the Commercial Real Estate Brokers of Metropolitan Portland (COMP). He is a graduate of the University of Portland, where he played NCAA Division I Tennis and lives with his wife Dianna and their 10-year-old daughter Evangeline, in northeast Portland.

CAREER SUMMARYTyler is a vice president in the Portland office of Kidder Mathews. He focuses on the exclusive representation of owners in the disposition and acquisition of multifamily properties, as well as business development, transaction management, and advisory services. Tyler has been involved in transactions throughout the Pacific Northwest but his primary attention is focused on Oregon and Southwest Washington.

Prior to joining Kidder Mathews, Tyler served as an associate director for a national provider of capital market transaction services specializing in multi-family sales. Tyler has worked in both the information technology and accounting industry and leverages his experience in both fields to provide a comprehensive advisory role for his clients in asset valuations, market analysis, and other advisory services.


Jordan CarterSenior Vice President, [email protected]

Clay NewtonSenior Vice President, [email protected]

Tyler LinnVice [email protected]

Kidder Mathews101 SW Main Street, Suite 1200Portland, OR 97204

kiddermathews.com

Documents

OFFERING MEMORANDUM 48 Units – Vancouver, WA...Vancouver, Washington. Located on a quiet street in downtown Vancouver, Midtown is just blocks from the heart of the redeveloping Main