PORTLAND MSA MARKET REPORT - Summerfield Management...PORTLAND MARKET REPORT Page 5 SUMMERFIELD COMMERCIAL State GDP State Ranking 2017 Population Bachelor’s Degree 2017 GDP* 15

PORTLAND MSA

MARKET REPORT

PORTLAND MARKET REPORT

Page 2 www.summerf ie ldcommercial .com

SUMMERFIELD C OMMERCIAL

This report has been prepared by Summerfield Commercial for use by a limited number of parties and has been obtained from sources believed reliable. While

we do not doubt its accuracy, we have not verified it, and make no guarantee, warranty or representation about it. It is your responsibility to confirm,

independently, its accuracy and completeness. All projections have been developed by Summerfield Commercial and are based upon assumptions relating to the

general economy, demographic trends, and historical statistics and are subject to variation. Further, Summerfield Commercial disclaim any and all liability for

representations and warranties, expressed and implied, contained in, or for omissions from, this information or any other written or oral communication

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These reports are intended to provide a general overview for the selected area. Additional information or custom reports will be made available upon further

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DISCLAIMER

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PORTLAND MSA SUMMARY

The Portland metro area is the largest population center in Oregon and a major regional, national, and global commercial hub. The Portland MSA can be broadly

defined as the cities and communities in Clark county in Washington and Multnomah, Washington, and Clackamas counties in Oregon. This overall region can

be divided by submarkets, outlined on the map on the following page, which are determined by a combination of official city boundaries plus socioeconomic

and/or demographic variances. Each identified submarket will be referenced throughout this report.

As of 2017, this market had an approximate population of 2.4 million people, representing a 5.6% growth since the 2010 Census. The primary explanation for

this growth is jobs, lifestyle, and a general trend of reurbanization by populations nationwide; the area is fueled by well paying jobs in both the public and private

employment sectors. Major industries in the area include software, semiconductor fabrication, light and heavy manufacturing, transport, timber production, and

business/financial services. Notable companies with a headquarters or major presence in the Portland MSA include: Nike, Intel, Daimler North America, Vestas,

and Precision Castparts, plus satellite engineering offices for many major technology companies (Google, Facebook, Yahoo, etc.). Portland also houses a major

river port on the Columbia, making it a global point of export for goods produced domestically.

A major draw for individuals migrating to the Portland area is its lifestyle, such as easy access to outdoor activities in national and state parks, skiing, and

relatively close proximity to the Oregon coast. The city of Portland itself is renowned for its music, nightlife, and food scenes. Developers in the city have taken

advantage of this with much of the new construction located near light rail stations and incorporating ground-floor retail and live-work spaces.

Portland benefits from a well built out public transit network that connects via the MAX light rail which connects the city with its suburbs as well as providing

easy in-city transit. This is complemented by the TriMet bus and streetcar system which provides local and express routes and integrates with the light and

commuter rail lines.

Understandably, the factors mentioned above have led to a robust multifamily market in the Portland area. This has primarily manifested as somewhat of a

development boom over the past 8 years: 182 properties have been built since 2010, with another 63 currently under construction and 132 in the permitting

process. Rents are strong across the region with an average of $1,303 across all unit types in the market overall. Rents are predicted to grow at 2-3% for the next

10 years. Sales in 2018 were down slightly in volume from 2017 (27 vs 31) with buildings trading at an average of $32,687,700 or $212,258 per unit.

While growth has not been as dramatic as other west coast markets such as Seattle, Portland still presents great opportunities, particularly in large, garden style

properties with value-add possibility. Development is also still a strong proposition, particularly in core in-city locations in Portland and in suburban sites close to

light rail stations and park and rides. Overall Portland can be considered a very sound market for the multifamily investor with expectations to continue in that

vein for many years to come.





PORTLAND MSA SUBMARKETS

Portland MSA Submarkets

Downtown/Pearl

Northwest

North Portland

Northeast

East

Southeast

Southwest

Vancouver East

Vancouver West

Central Northeast





State GDP State Ranking 2017 Population Bachelor’s Degree 2017 GDP* 15 Year GDP %

Growth

2017 Real GDP Per

Capita

Connecticut 23 3,588,184 38.0% $260.8 46.5% $62,633

Louisiana 24 4,684,333 23.0% $246.3 75.3% $44,372

Oregon 25 4,142,776 31.4% $236.2 94.9% $51,312

South Carolina 26 5,024,369 26.5% $219.1 75.4% $37,333

Overall Growth*: Connecticut ($82.8 B); Louisiana ($105.8 B); Oregon ($115.0 B); South Carolina ($94.2 B)

Overall Growth: Connecticut ($1,400); Louisiana ($2,616); Oregon ($13,643); South Carolina ($1,296)

GDP COMPARISON BY STATE

*GDP numbers in Bi l l ions of dol lars*





OREGON GDP GROWTH BY MSA

MSA 2002 2009 2016 13 Year % Growth

Portland, OR $81,169 $131,012 $164,466 102.6%

Salem, OR 9,459 12,485 16,076 70.0%

Eugene, OR 9,402 12,036 15,393 63.7%

Bend, OR 4,656 5,770 9,364 101.1%

Medford, OR 5,077 6,143 8,014 57.8%

Corvallis, OR 3,120 5,281 4,559 46.1%

Albany, OR 2,664 3,220 4,027 51.2%

Grant Pass, OR 1,413 1,883 2,362 67.2%

OREGON $121,204 $181,022 $236,219 94.9%

*GDP numbers in Bi l l ions of dol lars*





MSA Total

Employment

Percent MF

Housing Units

Current Average

Rent (2014)

10 Year % Rent Growth

Median Home

Value

Portland, OR 1,118,300 38.1% $1,001 43.8% $284,900

Salem, OR 154,500 29.0% $764 23.7% $187,200

Eugene, OR 148,700 34.1% $915 29.2% $238,700

Medford, OR 81,100 27.7% $851 20.5% $211,800

Bend, OR 74,200 21.7% $1,051 28.6% $255,800

Corvallis, OR 38,100 43.3% $846 10.7% $262,300

Albany, OR 32,700 26.0% $802 N/A $175,100

Grants Pass, OR 20,100 26.3% $846 N/A $182,400

OREGON 1,783,300 23.2% $924 34.1% $238,000

OREGON DEMOGRAPHICS BY MSA





PORTLAND MSA DEMOGRAPHICS

Portland Beaverton Hillsboro Tigard Gresham Vancouver

Population (2010) 583,799 89,786 92,251 48,189 105,641 162,492

Population (2000) 529,897 78,263 70,999 42,860 90,516 144,959

Total Difference 53,902 11,523 21,252 5,329 15,125 17,533

Population % Growth 10.2% 14.7% 30.0% 12.4% 16.7% 12.1%

Population (2017 Estimate) 647,805 97,514 106,894 53,148 111,053 175,673

Six Year Difference 64,006 7,728 14,643 4,959 5,412 13,183

Population % Growth (2010-2016) 11.0% 8.6% 15.9% 10.3% 5.1% 9.1%

Persons Per Square Mile (2010) 4,375 4,795 3,833 4,066 4,551 3,482

Unemployment Rate (April 2017) 3.7% 3.6% 3.5% 3.5% 4.1% 5.6%

Living in same house 1+ years 79.7% 80.0% 79.7% 83.0% 84.3% 78.9%

Bachelor’s Degree or Higher 47.0% 44.8% 36.5% 42.8% 19.8% 26.7%

Households (2011-2015) 256.432 38,201 36,267 20,021 38,921 67,342

Median Household Income $58,423 $59,620 $70,180 $65,505 $49,866 $52,004

Workforce Percentage 69.5% 69.4% 70.0% 69.7% 65.3% 64.6%

Renter Occupied Housing Units 46.9% 52.4% 47.9 41.5% 47.5% 50.8

Median Gross Rent (2011-2015) $1,025 $1,094 $1,176 $1,058 $958 $986

Median Housing Unit Value (2011-2015) $319,400 $303,500 $255,700 $32,100 $224,000 $217,200

Monthly Mortgage Expense (2011-2015) $1,787 $1,806 $1,682 $1,861 $1,616 $1,456





RENTAL DATA BY AREA

Rental Data by Location Total Properties Rent - Low $/SF - Low Rent - High $/SF - High Average Rent Average $/SF

North Portland 12 $795 $1.02 $3,611 $3.22 $1,550 $1.84

Studio 5 $963 $1.98 $1,405 $3.22 $1,238 $2.62

1x1 12 $795 $1.02 $2,883 $3.03 $1,439 $2.03

2x1 6 $923 $1.04 $1,739 $2.10 $1,140 $1.34

2x2 6 $1,483 $1.37 $2,310 $2.95 $1,812 $1.74

3x2 1 $1,426 $1.43 $1,444 $1.44 $1,433 $1.43

Vancouver West 77 $449 $0.70 $2,906 $2.84 $1,224 $1.32

Studio 10 $449 $1.12 $1,315 $2.84 $953 $1.95

1x1 65 $527 $0.70 $1,900 $2.81 $1,062 $1.51

2x1 39 $658 $0.73 $1,559 $1.81 $1,126 $1.27

2x2 41 $978 $0.93 $2,462 $2.34 $1,331 $1.28

3x2 22 $1,266 $1.02 $1,856 $1.53 $1,543 $1.25

Vancouver East 60 $677 $0.84 $2,255 $2.72 $1,276 $1.35

Studio 5 $781 $1.52 $1,179 $2.47 $963 $2.03

1x1 48 $677 $0.98 $1,550 $2.72 $1,111 $1.59

2x1 39 $777 $0.91 $1,579 $2.09 $1,243 $1.38

2x2 35 $972 $1.06 $1,963 $1.94 $1,309 $1.28

3x2 30 $1,220 $0.95 $2,255 $1.73 $1,539 $1.31

East Portland 59 $500 $0.84 $2,005 $2.31 $1,161 $1.37

Studio 13 $800 $0.93 $992 $2.08 $783 $1.50

1x1 47 $550 $0.93 $1,283 $2.08 $1,004 $1.50

2x1 40 $808 $0.92 $1,498 $1.83 $1,167 $1.35

2x2 26 $1,128 $1.07 $1,665 $1.69 $1,278 $1.30

3x2 22 $902 $0.84 $1,659 $1.69 $1,407 $1.28





RENTAL DATA BY AREA


Central Northeast 26 $600 $1.24 $3,580 $5.83 $1,279 $1.93

Studio 13 $600 $1.25 $1,526 $5.12 $1,100 $2.49

1x1 21 $724 $1.34 $1,902 $4.71 $1,216 $2.03

2x1 12 $1,155 $1.39 $2,529 $3.47 $1,336 $1.83

2x2 8 $1,318 $1.24 $3,170 $2.92 $1,515 $1.51

3x2 0 N/A N/A N/A N/A N/A N/A

Downtown/Pearl 67 $484 $1.19 $7,273 $5.82 $1,763 $2.44

Studio 55 $669 $1.38 $2,760 $5.82 $1,270 $2.64

1x1 58 $954 $1.51 $1,144 $4.72 $1,669 $2.38

2x1 23 $1,354 $1.53 $2,892 $3.57 $1,798 $2.04

2x2 37 $1,368 $1.35 $7,273 $4.64 $,2471 $2.31

3x2 8 $1,618 $1.52 $4,405 $2.85 $2,832 $2.33

Southeast 73 $649 $0.82 $7,123 $3.65 $1,294 $1.48

Studio 15 $649 $1.73 $1,208 $3.66 $985 $2.22

1x1 61 $778 $1.19 $3,960 $3.75 $1,129 $1.67

2x1 49 $894 $0.82 $1,916 $2.41 $1,179 $1.38

2x2 36 $990 $1.04 $6,706 $3.88 $1,425 $1.35

3x2 22 $1,180 $0.98 $2,508 $1.73 $1,667 $1.36

Southwest 63 $674 $0.77 $2,630 $2.73 $1,326 $1.47

Studio 9 $886 $1.47 $1,695 $2.56 $1,112 $2.14

1x1 52 $674 $0.96 $1,766 $2.50 $1,172 $1.67

2x1 45 $774 $0.77 $1,718 $2.06 $1,231 $1.42

2x2 45 $989 $0.95 $2,154 $1.94 $1,418 $1.41

3x2 36 $1,127 $1.00 $2,313 $1.76 $1,605 $1.37





RENTAL DATA BY AREA


Northwest/Washington County 170 $1,114 $0.92 $2,320 $1.78 $1,627 $1.36

Studio 19 $706 $1.64 $1,474 $2.93 $1,095 $2.22

1x1 152 $679 $0.94 $1,725 $2.55 $1,159 $1.68

2x1 103 $753 $0.80 $1,852 $2.09 $1,230 $1.38

2x2 107 $1,005 $0.85 $2,219 $1.98 $1,407 $1.40

3x2 78 $1,114 $0.92 $2,320 $1.78 $1,627 $1.37

Northeast 39 $695 $1.40 $5,168 $5.12 $1,565 $2.32

Studio 28 $825 $1.63 $1,737 $4.73 $1,214 $2.55

1x1 37 $1,063 $1,48 $2,554 $4,21 $1,511 $2.32

2x1 18 $1,489 $1.52 $2,491 $2.90 $1,671 $1.98

2x2 18 $1,636 $1.51 $3,404 $2.83 $2,149 $2.08

3x2 4 $1,618 $1.52 $4,651 $2.93 $2,491 $2.05





HISTORICAL RENTAL DATA

Area 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Downtown/Pearl

Average Rent $1,311 $1,331 $1,367 $1,439 $1,471 $1,574 $1,726 $1,804 $1,770 $1,712

Average $/SF $1.77 $1.80 $1.86 $1.96 $2.03 $2.16 $2.36 $2.46 $2.42 $2.42

North Portland

Average Rent $1,003 $1,014 $1,088 $1,133 $1,159 $1,238 $1,493 $1,590 $1,584 $1,585

Average $/SF $1.22 $1.26 $1.33 $1.37 $1.48 $1.59 $1.94 $2.11 $2.10 $2.12

Vancouver East

Average Rent $795 $805 $835 $863 $906 $976 $1,100 $1,199 $1,267 $1,286

Average $/SF $0.84 $0.85 $0.86 $0.91 $0.96 $1.03 $1.17 $1.27 $1.34 $1.36

Vancouver West

Average Rent $770 $755 $782 $803 $837 $915 $1,019 $1,126 $1,188 $1,241

Average $/SF $0.82 $0.81 $0.83 $0.87 $0.91 $0.98 $1.10 $1.21 $1.27 $1.33

Northeast

Average Rent $1,133 $1,066 $1,100 $1,146 $1,154 $1,282 $1,482 $1,574 $1,568 $1,565

Average $/SF $1.42 $1.38 $1.47 $1.54 $1.64 $1.90 $2.19 $2.34 $2.30 $2.32





HISTORICAL RENTAL DATA

Area 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

East Portland

Average Rent $729 $735 $750 $779 $810 $867 $969 $1,099 $1,157 $1,186

Average $/SF $0.85 $0.85 $0.87 $0.90 $0.93 $1.00 $1.15 $1.28 $1.35 $1.38

Southeast

Average Rent $870 $860 $898 $948 $1,008 $1,073 $1,179 $1,320 $1,364 $1,386

Average $/SF $3.15 $3.12 $2.94 $3.18 $3.28 $3.27 $3.87 $4.60 $4.54 $4.44

Southwest

Average Rent $825 $817 $847 $890 $941 $1,054 $1,171 $1,294 $1,332 $1,342

Average $/SF $0.91 $0.91 $0.94 $0.99 $1.05 $1.17 $1.30 $1.43 $1.47 $1.48

Northwest

Average Rent $885 $842 $879 $910 $968 $1,036 $1,160 $1,300 $1,407 $1,436

Average $/SF $1.09 $1.05 $1.10 $1.15 $1.22 $1.31 $1.46 $1.62 $1.78 $1.83

Central Northeast

Average Rent $861 $844 $855 $932 $974 $1,072 $1,210 $1,292 $1,281 $1,294

Average $/SF $1.10 $1.09 $1.13 $1.21 $1.27 $1.50 $1.73 $1.92 $1.94 $1.96





PROJECTED RENTAL DATA

Rent Projection Year 1 Year 2 Year 3 Year 4 Year 5 Year 10

Vancouver West

Average Rent $1,247 $1,275 $1,311 $1,351 $1,389 $1,600

Year over Year Rent Change 2.0% 2.0% 3.0% 3.0% 3.0% 3.0%

Vancouver East

Average Rent $1,304 $1,333 $1,369 $1,410 $1,448 $1,662


East Portland

Average Rent $1,242 $1,274 $1,313 $1,357 $1,399 $1,630


Southeast

Average Rent $1,806 $1,838 $1,877 $1,920 $1,962 $2,191


Downtown/Pearl

Average Rent $1,747 $1,771 $1,802 $1,836 $1,868 $2,047






PROJECTED RENTAL DATA

Rent Projection Year 1 Year 2 Year 3 Year 4 Year 5 Year 10

Northeast

Average Rent $1,586 $1,610 $1,641 $1,659 $1,709 $1,890


Central Northeast

Average Rent $1,244 $1,266 $1,293 $1,330 $1,352 $1,511


Southeast

Average Rent $1,367 $1,394 $1,431 $1,471 $1,511 $1,727


Southwest

Average Rent $1,306 $1,336 $13,73 $1,413 $1,452 $1,666


Northwest

Average Rent $1,424 $1,453 $1,490 $1,530 $1,569 $1,784






PORTLAND MSA - EMPLOYERS AND ECONOMY

The Portland area, long a major timber hub and river port, is also now known as “Silicon Forest” for its large concentration of software, technology, and engi-

neering jobs. The largest employer in the metro area is Intel with 20,000 workers primarily located in the northwestern suburbs of Washington county. Intel’s

presence also makes the area a major hub for other computer hardware and semiconductor companies. These include Qorvo in Hillsboro with 1,000 employees

and WaferTech in Camas, WA with 1,100. Many other software and technology companies have also opened satellite design and engineering offices in Portland

including Amazon, Facebook, Google, and Airbnb. Renewable energy technology has also proven to be a center of growth in Portland with global wind tur-

bine company Vestas having its US headquarters in Portland with 600 employees and solar panel manufacturer SolarWorld located in Hillsboro with 750 work-

ers.

Healthcare and life sciences represent another large sector of Portland’s economy. Providence Health and Services—the region’s second-largest employer with

17,543 employees—is a major hospital and healthcare compa-

ny operating throughout the western United States. Oregon

Health and Science University (16,200 workers) is a major

hospital and research institution located in downtown Port-

land. Legacy Health (12,955 employees) is a local non-profit

hospital network headquartered in northwest Portland. The

Oregon division of Kaiser Permanente, a hospital network

and managed care provider, is located in downtown Portland

and employs 12,400.

Manufacturing and industry continue to have a large presence

in the Portland area with the North American headquarters of

Daimler Trucks (2,800 workers), Precision Castparts

(3,300), and Schnitzer Steel (3,200) all located in Portland.

The global headquarters of Nike is in Beaverton with 12,000

workers, primarily in business operations and R&D. Adidas

also maintains a presence with 1,000 employees in Portland.

As demonstrated by the map on the next page, many of the

major employers and commercial centers in the Portland met-

ro area are easily accessible by the robust TriMet public trans-

portation system.

Nike Headquarters Located in Beaverton





PORTLAND MSA - PRIMARY EMPLOYERS AND LIGHT RAIL LINES





PORTLAND MSA - PUBLIC TRANSPORT AND LIFESTYLE

PUBLIC TRANSIT

One of Portland’s most desirable features as a place to live is its well built out network of public transportation.

The backbone of this system is the MAX light rail network, which operates five light rail lines (Blue, Green, Or-

ange, Red, and Yellow) that link suburbs throughout the area to the city core; a heavy commuter rail line connect-

ing the far southwestern suburbs with the MAX lines; three streetcar lines within Portland; and a robust bus system

with regular and express services. While currently on hold, discussions are underway to expand the MAX yellow

line into Vancouver, WA upon replacement of the Columbia River Interstate 5 crossing.

Another major expansion is planned for the red line, giving the communities around Hillsboro and Beaverton di-

rect access to Portland International Airport. As demonstrated by the map on the previous page, this system allows

workers to live almost anywhere within the Portland area and reach most of the major area employers without

needing to commute by car.

The region also has a very well developed network of dedicated bike lane infrastructure. Pictured here is a section

of the network connecting core Portland neighborhoods with downtown, but the system extends throughout the

metro area and integrates with the TriMet system via rentable bike lockers at stations and park and rides.

LIFESTYLE

A major draw for new residents moving to Portland is the eclectic lifestyle available and easy proximity to many outdoor activities. The city of Portland has a

bustling food and nightlife scene, particularly in the neighborhoods surrounding Hawthorne Blvd and the Southeast neighborhood and Downtown/Pearl Dis-

trict. Portland city has an extensive network of bike trails and urban parks, most notably Forest Park directly northwest of downtown which is the largest urban

forest in the nation. Mount Hood and its surrounding national forest land, located roughly 2 hours by car from downtown Portland, offers skiing, hiking, and

camping opportunities. The Columbia river offers rafting, boating, and fishing. Also within a 2 hour drive of the area is the Oregon coast, also offering many re-

sorts and outdoor recreation options.





MEDIAN HOUSEHOLD INCOME





50+ UNIT MULTIFAMILY PROPERTIES - PROPERTY SIZE

Properties By Total Units

50-99 488 Properties (46.5%)

100-199 332 Properties (31.7%)

200-399 201 Properties (19.2%)

400+ 27 Properties (2.6%)





50+ UNIT MULTIFAMILY PROPERTIES - YEAR BUILT

Properties By Year Built

1900 - 1959 55 Properties (5.2%)

1960 - 1969 75 Properties (7.2%)

1970 - 1979 190 Properties (18.1%)

1980 - 1989 153 Properties (14.6%)

1990 - 1999 247 Properties (23.6%)

2000 - 2009 146 Properties (13.9%)

2010 + 182 Properties (17.4%)





50+ UNIT MULTIFAMILY PROPERTIES - DEVELOPMENT PIPELINE

New Development Pipeline

Planned 63 Properties

Prospective 71 Properties

Under Construction 63 Properties





2017 MULTIFAMILY SALES BY AREA - 50+ UNITS

Area Total Transactions Average Unit Count Average Year Built Average Transaction

Price Average Price/Unit

Downtown/Pearl 9 117 2002 $31,881,000 $286,758

North Portland 2 81 2015 $14,000,000 $245,614

Vancouver East 1 166 1987 $27,100,000 $163,253

Vancouver West 3 168 1992 $23,612,000 $140,547

Northeast 4 135 1991 $21,549,900 $159,628

East/Gresham 5 127 1997 $24,720,000 $187,429

Southeast 6 126 1993 $23,454,000 $186,142

Northwest 5 285 2001 $66,056,300 $231,776

Southwest 7 173 1989 $36,085,800 $288,588

Portland Metro 42 153 1997 $32,437,000 $212,006





• Demographics

• Bureau of Economic Analysis: http://www.bea.gov/

• US Census: http://quickfacts.census.gov/

• Area Vibes: http://www.areavibes.com/

• Rental Data

• Yardi Matrix: https://matrix.pi-ei.com/home

• Dupre and Scott: http://www.duprescott.com/

• Sales/CAP Rates

• Commercial Brokers Association: http://www.commercialmls.com/

• Yardi Matrix: https://matrix.pi-ei.com/home

• Largest Employers

• US Bureau of Labor Statistics: http://www.bls.gov/

• CareerOneStop.org: http://bit.ly/1vs8UUB

Seattle

7525 SE 24th Street, Suite 665

Mercer Island, WA 98040

Portland

111 SW 5th Avenue, Suite 3150

Portland, OR 97204

SOURCES & CONTACT INFORMATION

For further information, please contact

one of our Senior Team Members of our

Multifamily Group:

Robert Parmar

Principal Broker of Oregon

541-292-9977

[email protected]

Ryan Kidwell

Managing Broker of Washington

425-260-6286

[email protected]


mailto:[email protected]

mailto:[email protected]

Documents

PORTLAND MSA MARKET REPORT - Summerfield Management...PORTLAND MARKET REPORT Page 5 SUMMERFIELD COMMERCIAL State GDP State Ranking 2017 Population Bachelor’s Degree 2017 GDP* 15