OFFERING MEMORANDUM PARKROSE PLAZA · 2017-10-27 · offering memorandum parkrose plaza 5055 5083 ne 122nd ave portland oregon 97230

O F F E R I N G M E M O R A N D U M

PARKROSE PL AZ A5 0 5 5 – 5 0 8 3 N E 1 2 2 N D A V E

P O R T L A N D O R E G O N 9 7 2 3 0

The 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 Real Estate Investment Services, Inc. (“M&M”) 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 M&M, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of M&M,

and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

Marcus & 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.

NON-E NDOR SE M E N T NOT ICE

ALL PROPERT Y SHOW INGS AR E BY APPOINTMENT ONLY. PLE ASE CONSULT YOUR M ARCUS & MILLICH AP AGENT FOR MOR E DETAILS.

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

PARKROSE PL AZ AP O R T L A N D , O R E G O N

TABLE OF CONTENTS

INVESTMENT OVERVIEWExecutive Summary 2Investment Overview 3Aerial Map 4Regional Map 5

FINANCIAL ANALYSISPricing Detail 11Operating Data – Income 12Operating Data – Expenses 13Tenant Summary 14

MARKET COMPARABLESRecent Sales Comparables 18Lease Comparables 22

MARKET OVERVIEW & DEMOGRAPHIC SUMMARYDemographic Summary 30

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. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap Y0210501

01INVESTMENT OVERVIEW

EXECUTIVE SUMMARY

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PARKROSE PL AZ A5 0 5 5 - 5 0 8 3 N E 1 2 2 N D A V E

P O R T L A N D O R E G O N 9 7 2 3 0

E X E C U T I V E S U M M A R Y

Price $5,100,000Net Operating Income $330,796Net Cash Flow After Debt Service $109,686 (6.03%)Cap Rate (Current) 6.49%Number of Suites 7Price per Square Foot $217.61

Gross Leasable Area (GLA) 23,436 SF

Occupancy 100.00%

Lot Size 1.76 AcresYear Built 2000

F I N A N C I N G

Loan Type NewDown Payment $1,818,150/35.65%Loan Amount $3,315,000Loan to Value Ratio 65.00%Interest Rate 4.50%Term (Years) 10Amorization Period (Years) 25Year Due 2027Debt Coverage Ratio 1.52

PARKROSE PLAZA

Marcus & Millichap is pleased to present for sale Parkrose Plaza, a 23,436-square foot retail investment property located in northeast Portland, Oregon (“Subject Property”). Within a five minute drive time to both Interstate 205 and Interstate 84, and only nine minutes to Port-land International Airport, the subject property is one of only a few retail properties located in one of Portland’s premier industrial submarkets serving the growing daytime population. Parkrose Plaza benefits from great identity and signage from NE 122nd Avenue, one of the major North/South arterials in the submarket. Given the inherit strengths of the location, one should not be surprised this retail property is 100 percent occupied with several long term tenants. In addition to providing an investor with a stable retail asset in a growing submarket, the subject property also provides some upside with rental rates at the low end of the range.

P R O P E R T Y I N F O R M A T I O N

Property Type RetailAssesor’s Parcel Numbers 1N2E22A 00400Zoning IG2Occupancy 100.00%Type of Ownership Fee SimpleParking 80 Surface SpacesParking Ratio 3.4:1,000 SF

C O N S T R U C T I O N

Year Built 2000Roof Type Flat; Built-up

INVESTMENT OVERVIEW

INVESTMENT HIGHLIGHTS

• 100% Occupied Retail Investment with Rents at the Low End of the Range

• Five Minutes to Both Interstate 84 and Interstate 205• Great Identity and Easy Access to NE 122nd—a Main

North/South Arterial in Submarket• Three Miles from Portland International Airport• Strong Provider of Business Services for Area’s Industrial/

Warehouse Market

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PARKROSE P L A Z A

AERIAL MAP

4

REGIONAL MAP

5

PARKROSE P L A Z A

PARCEL MAP

6

7

PARKROSE P L A Z A


FINANCIAL ANALYSIS02

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I N C O M E Y E A R 1 Y E A R 2

Scheduled Base Rental Income $359,211 $363,036Total Reimbursement Income 31.9% $114,448 31.5% $114,448 Other Income $0 $0 Potential Gross Revenue $473,659 $477,484 General Vacancy ($23,683) ($23,874)Effective Gross Revenue $449,976 $453,610 Less: Operating Expenses ($119,180) 26.5% ($119,180)Net Operating Income $330,796 $334,430 Tenant Improvements $0 $0 Leasing Commissions $0 $0 Capital Expenditures $0 $0 Cash Flow $330,796 $334,430 Debt Service ($221,110) ($221,110)Net Cash Flow After Debt Service 6.03% $109,686 6.23% $113,320 Principal Reduction $73,438 $76,811 Total Return 10.07% $183,123 10.46% $190,131

O P E R A T I N G E X P E N S E S Y E A R 1 Y E A R 2

CAM $50,250 $50,250 Insurance $2,800 $2,800 Real Estate Taxes $43,400 $43,400 Other Expenses - Non Reimbursable $4,687 $4,687 Total Expenses $119,180 $119,180 Expenses/SF $5.09 $5.09

R E T U R N S Y E A R 1 Y E A R 2

Cap Rate 6.49% 6.56%Cash-on-Cash 6.03% 6.23%Debt Coverage Ratio 1.50 1.51

S U M M A R Y

Price $5,100,000Down Payment $1,818,150 36.00%Number of Suites 7 Price Per SqFt $217.61 Gross Leasable Area (GLA) 23,436 SFLot Size 1.76 AcresYear Built/Renovated 2000Occupancy 100.00%

PRICING DETAIL

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PARKROSE P L A Z A

OPERATING DATA–INCOME

I N C O M E Y E A R 1 Y E A R 2 P E R S F

Scheduled Base Rental Income $359,211 $363,036 $15.49Expense Reimbursement Income

CAM $50,251 $50,251 $2.14 Insurance $2,799 $2,799 $0.12 Real Estate Taxes $43,399 $43,399 $1.85 Management Fees $17,999 $17,999 $0.77

Total Reimbursement Income $114,448 (96.0%) $114,448 (96.0%) $4.88Potential Gross Revenue $473,659 $477,484 $20.37

Less: General Vacancy ($23,683) 5.0% ($23,874) 5.0% ($1.02)Effective Gross Income $449,976 $453,610 $19.36

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OPERATING DATA–EXPENSES

E X P E N S E S Y E A R 1 Y E A R 2 P E R S F

Electric $4,300 $4,300 $0.18 Trash Removal $2,900 $2,900 $0.12

Water/Sewer $21,800 $21,800 $0.93

Landscaping $8,500 $8,500 $0.36

Fire Alarm $2,500 $2,500 $0.11 Security $5,600 $5,600 $0.24 General Maintenance $4,650 $4,650 $0.20 Insurance $2,800 $2,800 $0.12 Real Estate Taxes $43,400 $43,400 $1.85 Management Fee (4.0%) $18,043 $18,043 $0.77

Other Expenses - Non Reimbursable $4,687 $4,687 $0.20

Total Expenses $119,180 $119,180 $5.09

Expenses as % of EGR 26.5% 26.3%

Net Operating Income $330,796 $334,430 $14.27

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PARKROSE P L A Z A

TENANT SUMMARY

T E N A N T N A M E S U I T E # S Q U A R E F E E T % B L D G S H A R E L E A S E E X P. A N N U A L

R E N T P E R S F

Good World, Inc. 5055 3,778 16.1% 10/31/20 $15.92

Salon Services & Supplies 5059 1,852 7.9% 12/31/20 $20.84

Sondy Furniture 5063 7,612 32.5% 4/30/20 $8.95

Nathan Dustin 5071 2,227 9.5% 12/31/22 $20.00

The Computer Hause NC 5075 2,300 9.8% 8/31/20 $15.00

TRA Industries, Inc. 5079 2,245 9.6% 9/30/19 $14.24

Columbia State Bank 5083 3,422 14.6% 12/31/18 $23.07

Total/Avg 23,436 100% $15.23

Columbia State Bank - lease expires 5/31/18 - showing continuous occupancy and same rent for purposes of valuation

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T O T A L R E N T P E R M O N T H

T O T A L R E N T P E R Y E A R C H A N G E S O N C H A N G E S T O L E A S E T Y P E

$5,011 $60,132 Oct-2018 $5,161.00 NNN

$3,216 $38,592 N/A N/A NNN

$5,680 $68,160 Apr-2018 $5,850.00 NNN

$3,712 $44,544 N/A N/A NNN

$2,875 $34,500 Aug-2018 $2,976.00 NNN

$2,665 $31,980 Sep-2018 $2,758.00 NNN

$6,580 $78,960 N/A N/A NNN

$29,739 $356,868

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PARKROSE P L A Z A


MARKET COMPARABLES03

1818 1

2

3

RECENT SALES COMPARABLES

Parkrose Plaza

1. Oak Grove Retail Shops

2. Orchards Market Center

3. Song Center

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PA R K R O S E P L A Z A5 0 55 - 5 0 8 3 N O R T H E A S T 1 2 2 N D AV E N U EP O R T L A N D , O R 9 7 2 3 0

Asking Price $5,100,000Price per Square Foot $217.61Cap Rate 6.49%Year Built 2000Tenants Lease TypeGood World, Inc. NNNSalon Services & Supplies NNNSondy Furniture NNNNathan Dustin NNNThe Computer Hause NC NNNTRA Industries, Inc. NNNColumbia State Bank NNN

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PARKROSE P L A Z A

RECENT SALES

O A K G R O V E R E T A I L S H O P S14621 SOU T H E A S T MC L OUGH L I N BOU L E VA R DM I LWAU K I E , OR 97267

Close of Escrow 12/8/2016Sales Price $3,025,000Price per Square Foot $199.75Cap Rate 6.00%Year Built 2013Tenants Lease TypeOnPoint Credit Union NNNDomino’s Pizza NNNSylvan Learning Center NNN

O R C H A R D S M A R K E T C E N T E R11505 NORT H E A S T FOU RT H PL A I N BOU L E VA R DVA NCOU V E R , WA 98662

Close of Escrow 4/28/2017Sales Price $8,153,929Price per Square Foot $179.23Cap Rate 6.36%Year Built 1994Tenants Lease TypeAaron’s NNNPlay It Again Sports NNNTropics Jewelry NNN

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RECENT SALES

S O N G C E N T E R8201 SOU T H E A S T POW E L L BOU L E VA R DPORT L A N D, OR 97266

Close of Escrow On-MarketList Price $4,650,000Price per Square Foot $336.88Cap Rate 7.25%Year Built 1985Tenants Lease Type7-Eleven NNNDoe Donuts NNNMetro PCS NNN

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PARKROSE P L A Z A

2222

2

3

4

5

LEASE COMPARABLES

Parkrose Plaza

1. Windy’s Corner

2. Airport Commerce Center

3. Glisan Street Station

4. San Rafael Shopping Center

5. Menlo Park Plaza

1

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PA R K R O S E P L A Z A5 0 55 - 5 0 8 3 N O R T H E A S T 1 2 2 N D AV E N U EP O R T L A N D , O R 9 7 2 3 0

Gross Leasable Area (Square Feet) 23,436 SF

Occupancy 100.00%

Year Built 2000

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PARKROSE P L A Z A

LEASE COMPARABLES

A I R P O R T C O M M E R C E C E N T E R1 2 518 N O R T H E A S T A I R P O R T WA YP O R T L A N D , O R 9 7 2 3 0


Occupancy 100.00%

Asking Rent/Square Foot $22.00

Year Built 2002

W I N D Y ’ S C O R N E R6 0 3 3 N O R T H E A S T W I N S I V E R S D R I V EP O R T L A N D , O R 9 7 2 2 0


Occupancy 100.00%


Year Built 1995

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LEASE COMPARABLES

G L I S A N S T R E E T S T A T I O N1 2 0 0 2 N O R T H E A S T G L I S A N S T R E E TP O R T L A N D , O R 9 7 2 2 0


Available Square Feet 3,700 SF

Occupancy 85.00%


Year Built 1975

S A N R A F A E L S H O P P I N G C E N T E R1618 N O R T H E A S T 1 2 2 N D AV E N U EP O R T L A N D , O R 9 7 2 3 0




Year Built 1989

Major Tenants: Dollar Tree, H&R Block, Taco Bell, Subway

Comments: Most contract rents in the $18.00-$24.00/PSF range. Asking rent for current vacant space lower due to size of space and other issues specific to that space. 25

PARKROSE P L A Z A

LEASE COMPARABLES

M E N L O PA R K P L A Z A1 2 3 01 N O R T H E A S T G L I S A N S T R E E TP O R T L A N D , O R 9 7 2 3 0




Year Built 1957

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PARKROSE P L A Z A


M A R K E T OV E RV I EW &D E M O G R A PH I C S U M M A RY

04

DEMOGRAPHIC SUMMARY

Source: © 2016 Experian

Created on October 2017

POPULATION 1 Miles 3 Miles 5 Miles

2021 Projection

Total Population 8,794 85,339 346,214

2016 Estimate


2010 Census


2000 Census


Current Daytime Population

2016 Estimate 23,102 86,654 303,706

HOUSEHOLDS 1 Miles 3 Miles 5 Miles

2021 Projection

Total Households 3,027 33,912 135,239

2016 Estimate


Average (Mean) Household Size 2.56 2.44 2.51

2010 Census


2000 Census


Occupied Units

2021 Projection 3,027 33,912 135,239

2016 Estimate 3,075 33,541 132,224

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles

2016 Estimate

$150,000 or More 2.75% 3.97% 5.51%

$100,000 - $149,000 10.29% 11.08% 12.63%

$75,000 - $99,999 11.83% 13.21% 13.09%

$50,000 - $74,999 17.59% 20.37% 19.69%

$35,000 - $49,999 15.49% 14.64% 14.19%

Under $35,000 41.35% 35.68% 33.56%

Average Household Income $58,543 $64,563 $70,056

Median Household Income $41,753 $49,644 $52,558

Per Capita Income $21,136 $25,897 $27,521

HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 MilesTotal Average Household Retail Expenditure $62,443 $66,239 $67,293

Consumer Expenditure Top 10 Categories

Housing $18,256 $19,143 $19,439

Shelter $11,102 $11,505 $11,688

Transportation $8,376 $8,907 $9,216

Food $6,938 $7,118 $7,270

Personal Insurance and Pensions $5,189 $5,473 $5,921

Health Care $4,395 $4,895 $4,679

Entertainment $3,654 $4,067 $4,117

Utilities $3,407 $3,537 $3,557Household Furnishings and Equipment $1,845 $2,011 $2,048

Cash Contributions $1,566 $1,880 $1,775

POPULATION PROFILE 1 Miles 3 Miles 5 Miles

Population By Age

2016 Estimate Total Population 8,731 83,618 334,540

Under 20 25.01% 22.81% 24.64%

20 to 34 Years 24.11% 21.47% 21.57%

35 to 39 Years 7.56% 7.11% 7.64%

40 to 49 Years 14.78% 13.40% 14.12%

50 to 64 Years 17.68% 19.04% 18.69%

Age 65+ 10.87% 16.18% 13.34%

Median Age 35.55 39.00 37.45

Population 25+ by Education Level

2016 Estimate Population Age 25+ 5,949 59,464 232,354

Elementary (0-8) 2.23% 2.93% 3.89%

Some High School (9-11) 11.38% 7.99% 7.52%

High School Graduate (12) 31.01% 25.58% 24.19%

Some College (13-15) 22.96% 27.09% 25.13%

Associate Degree Only 9.76% 8.41% 7.84%

Bachelors Degree Only 15.50% 17.88% 19.22%

Graduate Degree 5.08% 7.83% 10.28%

30

IncomeIn 2016, the median household income for your selected geography is$41,753, compare this to the US average which is currently $54,505.The median household income for your area has changed by 16.50%since 2000. It is estimated that the median household income in yourarea will be $49,509 five years from now, which represents a changeof 18.58% from the current year.

The current year per capita income in your area is $21,136, comparethis to the US average, which is $29,962. The current year averagehousehold income in your area is $58,543, compare this to the USaverage which is $78,425.

PopulationIn 2016, the population in your selected geography is 8,731. Thepopulation has changed by 12.14% since 2000. It is estimated thatthe population in your area will be 8,794.00 five years from now,which represents a change of 0.72% from the current year. Thecurrent population is 53.52% male and 46.48% female. The medianage of the population in your area is 35.55, compare this to the USaverage which is 37.68. The population density in your area is2,771.49 people per squaremile.

HouseholdsThere are currently 3,003 households in your selected geography. Thenumber of households has changed by 5.07% since 2000. It isestimated that the number of households in your area will be 3,027five years from now, which represents a change of 0.80% from thecurrent year. The average household size in your area is 2.56 persons.

EmploymentIn 2016, there are 10,597 employees in your selected area, this is alsoknown as the daytime population. The 2000 Census revealed that54.81% of employees are employed in white-collar occupations inthis geography, and 45.24% are employed in blue-collar occupations.In 2016, unemployment in this area is 6.54%. In 2000, the averagetimetraveled to work was 26.00 minutes.

Race and EthnicityThe current year racial makeup of your selected area is as follows:57.27% White, 11.99% Black, 2.27% Native American and 10.06%Asian/Pacific Islander. Compare these to US averages which are:70.77% White, 12.80% Black, 0.19% Native American and 5.36%Asian/Pacific Islander. People of Hispanic origin are countedindependently of race.

People of Hispanic origin make up 19.00% of the current yearpopulation in your selected area. Compare this to the US average of17.65%.

HousingThe median housing value in your area was $237,652 in 2016,compare this to the US average of $187,181. In 2000, there were1,316 owner occupied housing units in your area and there were1,542 renter occupied housing units in your area. The median rent atthe time was $559.

Source: © 2016 Experian

PARKROSE PL AZ AP O R T L A N D • O R E G O N

Documents

OFFERING MEMORANDUM PARKROSE PLAZA · 2017-10-27 · offering memorandum parkrose plaza 5055 5083 ne 122nd ave portland oregon 97230