offering memorandum new 20-unit apartment on portland’s ...€¦ · diy restaurants and startups,...

OFFERING MEMORANDUM

New 20-Unit Apartment on Portland’s Coveted Division Street

2919 SE Division St, Portland, OR 97202

kidder.com

Exclusively Listed By

CLAY NEWTONExecutive Vice President, Shareholder

503.721.2719

[email protected]

JORDAN CARTERExecutive Vice President, Shareholder

503.221.2280

[email protected]

TYLER LINNVice President

503.721.2702

[email protected]

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 Kidder Mathews and Colliers and should not be made available to any other person or entity without the written consent of Kidder Mathews and Colliers.

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. Kidder Mathews and Colliers 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 the owner or 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, Kidder Mathews and Colliers has not verified, and will not verify, any of the information contained herein, nor has Kidder Mathews and Colliers 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.

This information has been secured from sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Recipient of this report must verify the information and bears all risk for any inaccuracies.

website

Offering Summary 01Maps & Aerials 02Community Description 03Property Financials 04Market Overview 05

TABLE OF CONTENTS

MARGOT OFFERING MEMORANDUM | KIDDER MATHEWS 5KIDDER MATHEWS | MARGOT OFFERING MEMORANDUM4

01OFFERING SUMMARY

6 MARGOT OFFERING MEMORANDUM | KIDDER MATHEWSKIDDER MATHEWS | MARGOT OFFERING MEMORANDUM 7

Offering Summary

Address 2919 SE Division St, Portland

Units 20

Year Built 2018

Tax Parcel R207893

Zoning CM2

Land Area 5,000 sf lot (0.11 AC)

Total SF 13,500 sf

Residential Net Rentable SF 8,918 sf

20 modern apartment homes with an unmatched eye for aesthetic detail

Ecclectically inspired building, constructed in 2018

Bright and airy studio and one-bedroom units

Large windows with high ceilings

Convenient to all the perks of Division Street and close-in Southeast living

Portland’s most popular dining and retail operators within blocks

EXECUTIVE HIGHLIGHTS

Completed in 2018 and fully stabilized in 2019, Margot is a one-of-a-kind 20-unit apartment building inspired by Wes Anderson’s film ‘The Royal Tenenbaums.’ Located on SE Division Street, in the heart of one of Portland’s most desirable inner-southeast neighborhoods, Margot’s individually themed floors give way to modern units with fantastic views of Portland’s Southwest Hills, vaulted ceilings, with stainless steel appliances, carrera countertops, and washers and dryers in every unit. Margot was built to Oregon Energy Trust’s “Best” standard, featuring Energy Star appliances, water efficient fixtures, LED lighting, and low VOC paint and finishes. Besides Margot’s unbeatable location and easy access to more than 40 nearby restaurants and shops, tenants enjoy the secured entry, fiber optic cable and wifi internet, a ground floor lounge, and additional bike storage.

Margot’s impeccable location has a Walk Score of 93 and Bike Score of 95, bringing Portland’s many neighborhoods and downtown core within easy reach. Several bus routes stop near the building, and the Clinton Bike Corridor, one of the most important bike routes in city, is one block away. Margot is just a short walk or ride from some of Portland’s best grocers, restaurants, bars, and coffee shops; New Seasons, Safeway, and Fred Meyer are just a few minutes away, while Pok Pok and Bollywood Theater are even closer.


Modern, thoughtfully designed studio and one-bedroom layouts

Elevator served floors

Controlled access entry

Resident lounge

Secure bike parking

Wireless internet throughout

SUPERIOR AMENITIES

Unit Type Units Size (SF) Average Rent Rent/SF

Studio 11 382 $1,204 $3.15

1 Bed / 1 Bath 9 524 $1,426 $2.72

TOTAL / AVG 20 8,918 $1,304 $2.92

MARGOT OFFERING MEMORANDUM | KIDDER MATHEWS 9

Modern, efficient floor plans

Washer/dryers in unit

Full kitchens with dishwashers and microwaves

Carrera countertops and stainless-steel appliances

Air-conditioning in all units

Excellent natural light and views of the Southwest Hills

Oversized windows

Vaulted ceilings (in some units)

Roller shade window coverings

UNIT AMENITIES


EAST PORTLAND LOCATIONDIVISION STREET

Southeast Division Street is one of Portland’s major East/West arterial streets. Located just minutes from downtown Portland, the “Division Street” neighborhood is loosely defined as beginning at SE 10th and extending Eastward to SE 60th Avenue. Development along this street is often at the forefront of Portland’s visionary urban planning and socially conscious development. The “New Urbanism” represented along the corridor appeals to every demographic, creating a demand that provides an economic foundation similar to the building of drivable suburbs in the mid-to-late 20th century. A walkable, vibrant neighborhood lined with bioswales, public transit, bike corridors, eclectic DIY restaurants and startups, Division serves as a doorway to the future of Portland and the nation.

Division Street is host to a wide variety of retailers. People from all over the world come for everything from handmade leather jackets to spicy Thai chicken wings. Known locally as “Restaurant Row,” many establishments are recognized globally - one registering as the #5 best new restaurant in the country, according to Bon Appetit. It is home to the very first, and nationally renowned Stumptown Coffee Roasters; Salt & Straw, an ice cream purveyor of eccentric flavors and an ever-growing cult following; and bars for every type of patron.

Development along Division Street is an eclectic mix of new, old and adaptive reuse buildings. Many of the newer buildings are LEED certified, lending credence to the value placed on

sustainable development. The street’s wide appeal and insatiable demand is driven in part by the neighborhoods mixed-use development where retail and offices adorn the street and residents reside above. The sense of place created by this blend of uses fosters a sense of place for residents who find walking to their grocery store or coffee shop is preferable to driving.

In a city renowned for its Olmsted-planned parks, no discussion of the Division Street corridor would be complete without mention of two of the City’s most treasured: Laurelhurst Park and Mt. Tabor Park. Laurelhurst Park, the first city park to ever be listed on the National Register of Historic Places, is located on SE Cesar E Chavez Blvd (39th Ave). A short walk from Division Street, the 31-acre park is host to summer concerts, a variety of recreational activities, and a beautiful lake full of fish, ducks, and turtles. Mt. Tabor Park, just east of SE 60th Ave, is a 190-acre park on a volcanic cinder cone. The park offers stunning views of downtown Portland and Mt. Hood and is a fitness enthusiast’s playground due to its extensive network of trails.

All this culminates in making Division Street what it is: a place where innovation and experimentation manifest in a pristine setting at various scales. From the artisans and the buildings they inhabit, to the residents and customers that spill out onto the streets rain or shine, the constant bustling is affirmation that Portland champions the places that lead.

WALK SCORE

93

BIKE SCORE

100

SE

50

TH A

VE

SE

10

TH A

VE

KATI PORTLAND


02MAPS & AERIALS


BACK OF TAB

Maps & Aerials

DOWNTOWN PORTLAND

16 KIDDER MATHEWS | MARGOT OFFERING MEMORANDUM

NORTHWEST PORTLAND

PEARL DISTRICT

PORTLAND CENTRAL

BUSINESS DISTRICT

GOOSE HOLLOW

SOUTHWEST HILLS

SOUTHWEST WATERFRONT

LADD ’S ADDITION

BUCKMAN

KERNS

LAURELHURST

ELIOT

IRVINGTON

GRANT PARK

SUNNYSIDE

RICHMOND

BROOKLYN

E BURNSIDE ST

SE STARK ST

SE BELMONT ST

SE 2

0TH

AV

E

CES

AR

E CH

AV

EZ B

LVD

SE HAWTHORNE BLVD

SE DIVISION ST

POWELL BLVD

NE SANDY BLVD

WILLAM

ETTE RIVER


03COMMUNITY DESCRIPTION


Community Description


PROPERTY SUMMARY

Units 20

Land Area 5,000 sf (0.11 AC)

Total SF 13,500 sf

Residential Net Rentable SF 8,918 sf

Year Built 2018

Average Unit Size 446 sf

Average Monthly Rent $1,304

Price $5,250,000

Price/Unit $262,500

Price/SF $389



SAMPLE UNIT MIX & FLOOR PLANS SAMPLE FLOOR PLANS

floor plan units size (sf) average rentStudio A 3 371 $1,200

Studio B 4 379 $1,176

Studio C 4 392 $1,235

TOTAL 16 4,197 $13,243Average 382 $1,204

Average Rent PSF $3.15

Studio A One Bedroom / One Bathroom

One Bedroom / One Bathroom

One Bedroom / One Bathroom One Bedroom / One Bathroom

Studio B

floor plan units size (sf) proforma rent1BR / 1BA A 1 468 $1,495

1BR / 1BA B 3 502 $1,416

1BR / 1BA C 2 528 $1,450

1BR / 1BA D 3 561 $1,398

TOTAL 20 4,713 $12,387Average 524 $1,426

Average Rent PSF $2.72


UPDATE

04PROPERTY

FINANCIALS


Property Financials

UNIT MIX SUMMARY

Unit Type Units Size (SF) Average Rent Rent/SF

Studio 11 382 $1,204 $3.15

1 Bed / 1 Bath 9 524 $1,426 $2.72

TOTAL / AVG 20 8,918 $1,304 $2.92


FINANCIALS

Income

Potential Rent Income $312,960 $15,648

Other Income $5,020 $251

Utility Reimbursement $12,540 $627

GROSS OPERATING INCOME $330,520 $16,526

Vacancy & Concessions (5.00%) ($15,648) ($782)

EFFECTIVE OPERATING INCOME $314,872 $15,744

Annual Per unit

Real estate taxes $33,996 10.80% ($1,700)

Property insurance $3,000 0.95% ($150)

Water/Sewer $9,420 2.99% ($471)

Electricity $2,760 0.88% ($138)

Garbage $3,900 1.24% ($195)

Landscaping $1,500 0.48% ($75)

Maint/Repair $12,612 4.01% ($631)

Turnover $1,920 0.61% ($96)

Professional Management $12,595 4.00% ($630)

Elevator $1,800 0.57% ($90)

Office/Admin $4,158 1.32% ($208)

Advertising $3,749 1.19% ($187)

Onsite Management $12,553 3.99% ($628)

Reserves $3,000 0.95% ($150)

TOTAL OPERATING EXPENSES ($106,963) 33.97% ($5,348)

NET OPERATING INCOME $207,909 $10,395

Annual Debt Service ($165,372) ($8,269)

Cash Flow Before Taxes $42,537 $2,127

AnnualExpenses % Per unit


05MARKET

OVERVIEW


Market Overview

PORTLAND MSA

MARGOT OFFERING MEMORANDUM | KIDDER MATHEWS

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 two 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 bikeable 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 bike 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.

37


PORTLAND RANKINGS

#1 Best Place for Businesses & CareersFORBES 2017

#1 Most Desirable Place to Live US NEWS 2019

#1 Energy InfrastructureUS NEWS 2018

#1 Safest Place to LiveRENTAL HOUSING JOURNAL 2017

#1 Fittest City in AmericaHUFFINGTON POST

#1 Best City in America for CyclistsTHRILLIST 2017

#6 50 Best Places to Live in AmericaBUSINESS INSIDER 2018

#25 Largest US CityUS CENSUS 2019

PORTLAND STATISTICS

3rd Best state economic growth in the country

$171B GDP for Portland-Vancouver-Hillsboro in 2017

$24.3B Added to Portland MSA Economy in 2017 (via Tech Sector)

10th Highest percentage of workforce in tech in the country

3.7% Portland MSA unemployment rate

4% National unemployment rate

KIDDER MATHEWS | MARGOT OFFERING MEMORANDUM38

40 MARGOT OFFERING MEMORANDUM | KIDDER MATHEWSKIDDER MATHEWS | MARGOT OFFERING MEMORANDUM 4140 KIDDER MATHEWS | COLL IERS | AL AIRE OFFERING MEMORANDUM

SOUTHEAST PORTLAND MARKET

Southeast Portland is one of the most dynamic, and transformative areas in the Portland MSA. According to CoStar, the Southeast has more apartments under construction than any other submarket in Portland, with just over 1,000 units delivered in 2018. At $1,294 per unit, average rents are comparable to the metro average, however rent growth at 0.9% in 2018 was about half of the metro growth rate. Vacancy rates in Southeast Portland are currently at 4.6%, below the 5.0% average vacancy across the Portland metro.

Local and individual investors are active in Southeast Portland. The relatively low costs of Southeast Portland’s substantial 1 & 2 Star inventory make investment accessible to local and individual buyers, encouraging a large number of annual transactions. The vast majority of recent transactions have been properties with fewer than 20 units that traded under $5 million.

PORTLAND MARKET

Portland was designated the #2 moving destination by United Van Lines in 2018, and Oregon has consistently ranked as one of the top five states for in-migration numbers over the last several years. Employers such as Intel, Nike, Adidas, and Amazon have attracted a skilled workforce to the metro area. Amazon alone has invested around $2.8 billion into the Oregon economy, with ground broken for three new distribution centers, of one million square feet each, in late 2017.

The Portland-metro area is currently in the middle of extensive apartment construction. While vacancies have gone up due to the increased supply of new units in the past few years, the Portland metro tied for the fourth lowest vacancy rate of the 75th largest metros in the country, according to Portland State University’s Population Research Center. Substantial demand in the multifamily market should alleviate concerns about oversupply. The influx of well-educated young professionals to the area should have a mitigating effect on vacancy rates

as construction increases. According to CoStar, as of January 2019, there are more than 10,600 units under construction, with about 4,175 expected to be delivered in 2019. An overwhelming majority of the new construction has taken place in the city’s Core, close to downtown, while submarkets outside of the Core, have seen relatively limited new construction.

The metro area remains popular with Millennials in search of creative, eco-friendly, and affordable spaces with good access to transit hubs, walkable neighborhoods, and entertainment options. Employment, population, and income growth all exceed national averages, providing solid economic indicators that demand in the Portland apartment market will remain robust, particularly amongst younger generations.

Portland’s population growth is still one of the strongest in the country due to high net migration trends. The metro area gained 30,066 residents between July 2016 and July 2017. The Portland metro population is currecntly estimated

at 2,753,168, making Portland the 25th largest city in the country. With a growth rate of 1.9%, Portland is one of only 28 cities in the US that are growing by at least 1% a year. The State of Oregon Employment Department places Portland’s population growth at 19th in country, with a 10% population increase from 2010 to 2017.

UNITS DELIVERED FROM 2013 – 2017

27K

IN BUILDING SALES 2018

$2.1B+

UNIT TO BE DELIVERED IN 20194.125K

IN BUILDING SALES 2017

$1.6B+

Cons

truc

tions

Sale

s

Cons

truc

tions

Sale

s

UNITS DELIVERED FROM 2013 – 20184.5K

IN BUILDING SALES 2018$154M

UNITS TO BE DELIVERED IN 2019872

IN BUILDING SALES 2017$107M

42 KIDDER MATHEWS | MARGOT OFFERING MEMORANDUM42 KIDDER MATHEWS | MARGOT OFFERING MEMORANDUM

kidder.com

Exclusively Listed By

CLAY NEWTONExecutive Vice President, Shareholder

503.721.2719

[email protected]

JORDAN CARTERExecutive Vice President, Shareholder

503.221.2280

[email protected]

TYLER LINNVice President

503.721.2702

[email protected]

offering memorandum new 20-unit apartment on portland’s ...€¦ · diy restaurants and startups,...

Documents