kings gate & king james · kings gate & king james • 80 units • vancouver, wa 3. ......

OFFERING MEMOR ANDUM80 Units • Vancouver, WA

KINGS GATE & KING JAMES

www.hfore.com(503) 241.5541

INVESTMENT SUMMARY

The asset includes a combination of one-story duplexes and apartment flats. All of the apartments are two-bedroom units. The apartments at the King James portion of the property are all one-story plex buildings with either attached garages or carport parking. Every unit has a private entrance separate from its neighbors and many apartments have private side yard patios. The Kings Gate portion of the property totals 54 apartments and features a seasonal outdoor pool. Some of the one-story bungalows and two-story garden-style buildings include garages. All units include a washer/dryer.

Kings Gate and King James are two adjacent apartment communities with combined management. Both properties are low-density garden-court apartments in Vancouver, Washington which total 80 units when combined.

Kings Gate and King James are located between state routes SR 500 and SR 14. The property is also convenient to East 4th Plain and East Mill Plain Boulevards, providing connections to I-5 and downtown Vancouver.

Approximately $445,000 in improvements including paint, siding work and interior updates have been completed since 2016. Current rents for the assets average $1,218 per unit or $1.33 per sq ft. New leases signed since January 2019 have averaged $1,332 per unit, an increase of 8.6% over currently scheduled rents.

2 HFO INVESTMENT REAL ESTATE

PROPERTY HIGHLIGHTS • Two separate, well-maintained, attractive properties

• Mostly low-density, one-story plex buildings

• Many apartments with attached garages

• Private patios and yard spaces

• In-unit washer/dryer

• Convenient location central to major thoroughfares

• Proven rent increases

EXECUTIVE SUMMARYASSET SUMMARYProperty Kings Gate & King James

Location 3707-3808 E 18th Street

City, State Vancouver, WA 98661

County Clark

Year Built 1970

Total Units 80

Stories 1 and 2 stories

Approx. NR Sq Ft 73,119 sq ft

Average Sq Ft 914 sq ft

Acreage 4.93 acres

Density 16.23 units per acre

PRICE SUMMARYPrice $14,000,000

Price Per Unit $175,000

Per Square Foot $191

Cap Rate (Scheduled Rents) 5.70%

TOURS AND INQUIRIES Rob Marton • [email protected]

Greg Frick • [email protected]

2424 SE 11th Avenue, Portland, Oregon 97214www.hfore.com • (503) 241.5541 • Fax: (503) 241.5548Please do not disturb tenants.

UNIT MIX SUMMARYUnit Type Unit Count Avg Sq Ft Approx. NR Sq Ft % of Total Units2 Bedroom / 1 Bathroom w garage (KJ) 8 700 5,600 10.0%

2 Bedroom / 1 Bathroom flat (KJ) 18 875 15,750 22.5%

2 Bedroom / 1 Bathroom duplex (KG 10 839 8,385 12.5%

2 Bedroom / 1 Bathroom flat (KG) 36 986 35,496 45.0%

2 Bedroom / 1 Bathroom w garage (KG) 8 986 7,888 10.0%

Totals / Averages 80 914 73,119 100.0%

3KINGS GATE & KING JAMES • 80 UNITS • VANCOUVER, WA

Kings Gate features 54 apartments including one-story plexes with patios and two-story garden-style flats with large decks. There are garages available to rent. Kings Gate has a central leasing office with an adjacent outdoor, seasonal pool.


Kings Gate’s two-bedroom apartments have large decks that extend the dining room. Large kitchens, in-unit washer/dryers and spacious living areas are attractive amenities.


King James totals 26 units and is all one-story plex buildings. Some units have attached garages or carports. Many apartments have private patio spaces or overlook landscaped courtyards.


VANCOUVER, WASHINGTONDEMOGRAPHIC FACTORSClark County composes approximately 19.3% of the Portland/Vancouver’s estimated 2,453,168 residents, according to the U.S. Census Bureau’s recent calculations. During the past decade, Clark County has undergone significant population growth. Two factors have spurred this continued growth: an increase in regional employment and affordable housing prices, relative to the balance of the Portland MSA.

Clark County’s population was 481,857 in 2018—an increase of 100% since 1990, when its population was 240,883. Since 2010, Clark County’s population has increased 13.3%, while Portland’s Multnomah County has grown by 10.4%. Approximately 37% of Clark County’s population lives within the Vancouver city limits. Median household income in Clark County was $67,832 as of 2017.

DEMAND GENERATORSIn recent years, Clark County’s economy has expanded from its traditional manufacturing sectors to semiconductors, high-tech products and healthcare. PeaceHealth SW Medical Center, Vancouver’s largest employer, anticipates that it will add another 1,000 area jobs by 2020. In June 2019, Vancouver-based startup RealWare announced that it has raised $100 million in investor capital and plans to hire 100 new workers by the end of the year.

The Vancouver Waterfront is currently being developed into a 32-acre mixed-use neighborhood with apartments, hotel accommodations, 1.25 million square feet of creative office space, 250,000 square feet of restaurant and retail space, and a waterfront park. Future retail and office tenants include Maryhill Winery, Ghost Runners Brewery, Sotheby’s Real Estate, Chicago Title & Fidelity National Title Company, and the MJ Murdock Charitable Trust.

INCOME IN VANCOUVERAs will be explained elsewhere in this section, Washington’s tax structure differs significantly from the rest of the Portland MSA.

VANCOUVER, WASHINGTON—MAJOR EMPLOYERS These are Clark County’s top employers, according to the Vancouver Business Journal’s 2018 Book of Lists:

Employer Employees DescriptionPeaceHealth 4,488* HospitalVancouver Public Schools 2,987 Public School DistrictEvergreen Public Schools 2,577 Public school districtLegacy Salmon Creek Medical Center 1,946 Medical centerFred Meyer Stores 1,222 Grocery, general merchandiseClark Co., Washington 1,566 Local governmentBattle Ground Public Schools 1,519 Public educationThe Vancouver Clinic 1,374 Multi-specialty healthcareBonneville Power Administration 1,124 UtilityCity of Vancouver 1,044 Local governmentWaferTech, LLC* 1,015 Silicon wafer manufacturing*2017 data. 2018 data not available.

Demand for rental housing in Vancouver and Clark County as a whole is strong, while the supply is limited. In its Spring 2019 Apartment Report, MultiFamily NW noted that the vacancy rate is 5.38% for West Vancouver and 4.01% for East Vancouver.

While the Greater Portland experienced annual effective rent growth of 1.9% as of February 2019, the website RentCafe puts Vancouver’s rent growth at 2% for the year ending July 2019. As the city of Portland has increased development fees, implemented inclusionary zoning, and required landlords to assist with tenant relocation costs, Vancouver has become a more attractive location for investors interested in benefiting from the Portland Metro Area’s sustained growth.

Vancouver is home to the Columbia River Economic Development Council (CREDC). Since its 1982 inception, CREDC has helped create more than 28,000 jobs, with a cumulative annual payroll of $1.2 billion for the Southwest Washington area. The organization is funded by more than 135 investor companies, spread across 19 industries.


NE 63rd st

NE Fourth Plain BlvdRoyal Oaks

Country Club

Pearson Field

LIFESTYLE CONVENIENCES AND EMPLOYERS

WASHINGTON

OREGON

Fort Vancouver National Historical Site

Portland International Airport

Hayden Island

Hazel Dell South

OrchardsHazel Dell North

Vancouver MallOrchard Market

Center

VANCOUVER

Vancouver Lake

Regional Park

Columbia River

500

14

205

5

Kings Gate & King James


Vancouver, Washington is home to several forms of public education. Its Evergreen Public Schools district is among the fastest-growing districts in Washington State, and is currently the fifth largest in the state.

VANCOUVER AREA SCHOOLS EVERGREEN SCHOOL DISTRICT + HIGHER ED

Evergreen Public Schools educates close to 25,712 students across 21 elementary schools, six middle schools, six high schools and five alternative schools. The district employs 2,577 area residents, according to the Vancouver Business Journal’s 2019 Book of Lists—making it Vancouver’s third-largest employer.

Evergreen Public Schools has partnered with the Southwest Washington Child Care Consortium, an organization that operates 29 Clark County centers and is considered the largest community-run child care system in the nation.

Vancouver Public Schools is Portland metro’s 11th largest employer with 3,300 employees, according to the district’s website. The district is comprised of 24,000 students across 21 elementary schools, six middle schools, five high schools, an arts school, a STEM (Science, Technology, Engineering and Math) school and three additional programs. The entire teaching pool averages approximately 11 years of experience and 72% have a Master’s Degree or higher.

Established in 1852, Vancouver’s public school district is among 57 school districts and education agencies across the county chosen by the U.S. Department of Education to join The League of Innovative Schools, a prestigious program designed to incorporate digital technology in the classroom.

Higher education in the Vancouver area is represented by two schools:

Washington State University (WSU)’s Clark County campus employs 450 and is one of 39 county-based extensions of Washington State University’s education programs. WSU, with a student body of over 25,277, is based in Pullman, Washington. Its extension services offer three-way partnerships between the USDA, WSU and local country governments—including Clark County. The WSU Vancouver extension campus serves 3,577 students with 255 educators.

Clark College is the largest single-campus provider of for-credit classes in Washington’s community and technical college system. The two-year junior college serves over 10,429 students across four campuses. Clark’s main campus occupies 101 acres in Vancouver’s Central Park, with satellite campuses throughout the city. In 2016 the school opened a $41 million science and technology building. The 70,000 square-foot structure offers Clark’s STEM program modern technology including an engineering collaboratorium, a cadaver lab and a drop tower.


CASCADE STATION SHOPPING CENTER

Cascade Station, located at 9721 NE Cascades Parkway, is connected to Portland International Airport (PDX) Announced in 2001, the shopping center had a troubled start, due to the recession, and finally opened in May, 2005, with an IKEA store—the only branch of this chain in the Portland-Vancouver metropolitan area—as its anchor.

Cascade Station is a conglomeration of shops, hotels and business offices. Developed by CenterCal Properties LLC, which also designed Bridgeport Village Shopping Center, Cascade Station has grown to include 46 different shops, restaurants and services.

Other prominent stores in Cascade Station include Best Buy, Banana Republic Factory Store, Verizon, Zoom+Care, Carhartt, Starbucks, Staples, Lane Bryant, Kay Jewelers, Homegoods, Marshalls, and Columbia River Surgery Center.

Several major hotels are located close to Cascade Station, increasing the convenience factor for visitors to the area. Hyatt Place Portland/Airport Cascade Station, Aloft Portland Airport at Cascade Station and Residence Inn Portland Airport at Cascade Station are among the bigger hotels close-in to Cascade Station.

The shopping center has appeal to tourists and travelers due to its lack of sales tax—which can mean a substantial savings on more expensive, high-ends items and services.

Cascade Station is serviced by TriMet’s MAX light-rail system’s Red line. The shopping center is the Red line’s third stop north of PDX.


APARTMENT MARKETThe Portland Metro Area consistently ranks among the nation’s lowest for apartment vacancy rates according to the U.S. Census Bureau and other third-party services like REIS, MPF Research, and Axiometrics. The U.S. Census Bureau pegged Portland’s Q3 2018 vacancy rate at 4.5% and the U.S. average at 7.1%.

REIS forecast 2018 Portland metro year-over-year rents growth at 3.0% and the Multifamily NW Apartment Report survey proved average October 2017-18 year-over-year rent growth at 3.3%.

SKILLED WORKFORCE & STRONG EMPLOYMENTIn a 2018 WalletHub report comparing 150 of the largest U.S. metros, Portland is listed as the 15th most educated city in America. More than half of Multnomah County workers have a college degree, well ahead of the national average of 38.5%.

According to the State of Oregon’s Employment Department, Portland enjoys one of the fastest job growth rates in the Pacific Northwest, and the entire nation. Data indicates the area added 31,000 jobs in 2016, 28,000 jobs in 2017, and 29,000 in 2018.

TOP 10 LISTS

Portland consistently receives glowing reviews and rankings from the media.

2019 lists include: • #4 Best City for an Active Lifestyle (Wallethub)

• #7 Healthiest Cities to Live (Thrillist.com)

• #7 Best Cheap Destinations in the U.S. (U.S. News and World Report)

• # 8 Best Place to Live in the U.S. (U.S. News and World Report)

• #8 Fittest Cities in America (CBS News)

• #9 Best Foodie Cities in the USA (U.S. News and World Report)

2018 lists include: • #1 Restaurant City of the Year (Bon Appetit)

• #1 Best Foodie City in America (Wallethub & Travelpulse) #6 (Jetsetter)

• #3 Healthiest City in the U.S. (Active.com)

• #3 Best Place for Business and Careers (Forbes)

• #4 Best City for Biking (Fast Company)

• #9 Top City for Entrepreneurs and Start-Ups (Business.org) #23 (CNBC)

• #10 Greenest City in America (Newsweek)

• #10 Most Entrepreneurial State (Amazon.com)

• #15 Most Educated City in America (Wallethub)

DIVERSIFIED ECONOMYPortland is home to the headquarters of Fortune 500 companies Nike and Lithia Motors. Fortune 1000 companies headquartered here include Columbia Sportswear, Greenbrier Cos. and Portland General Electric. Fortune 500 companies based outside Oregon with major operations here are Precision Castparts and Intel.

Tech and software companies continue to relocate their operations here or open major outposts in Portland. These companies enjoy Portland’s educated workforce, affordable high quality of life, and a low cost of doing business compared to the Bay Area.

Companies which have opened major branches in Portland include Airbnb, Google, Squarespace, Mozilla, Simple, Survey Monkey, SalesForce and New Relic, Inc. Portland’s tech startup companies include Viewpoint, Jama Software, Thetus, Urban Airship, Acquia, Elemental Technologies, Act-On, Puppet Labs, and The Clymb.

PORTLAND REGIONOregon’s largest city, Portland, is near the confluence of the Willamette and Columbia Rivers. The Portland Metro Area consists of four counties: Multnomah, Washington, Clackamas, and Clark County, Washington.

PORTLAND METRO SNAPSHOT


GOVERNMENTThe U.S. Federal Government is Portland metro’s overall largest employer, with 20,500 workers. The State of Oregon gives employment to an additional 14,000 residents.

HIGH TECH & CHIP MANUFACTURINGAttracted by the Portland area’s educated workforce and relative low cost of doing business, tech companies continue moving to Portland—opening major branches and, in some cases, relocating to the area entirely.

With over 19,300 employees, Intel is the area’s largest private employer. Intel acquired its first Portland location in 1974. The company is currently expanding its presence with forthcoming D1X microprocessor chip facilities at the Ronler Acres Campus in Hillsboro. This is part of a five-year, $6 billion expansion, and is part of the company’s long-term plans for growth. Intel is the largest property taxpayer in Washington County, with payments of approximately $30 million a year.

Other notable Portland-area high-tech companies include ON Semiconductor and Tektronix.

SPORTSWEARNike has its world headquarters in Beaverton and employs 12,000 Portland-area residents. The company designs, develops and manufactures footwear, apparel, equipment and accessories. From here, Nike orchestrates production and design for one of the world’s most recognizable brands. In 2019 Nike will complete a $1 billion expansion of its Washington County campus.

Nike’s two key competitors have a major local presence as well. Those employers include the North American headquarters of Adidas with 1,200 employees, and a new 70,000 SF outpost of Under Armour. Under Armour has moved 100 employees into an iconic former YMCA.

HEALTHCARE AND RESEARCHHealth services are another major employment sector for the Portland area. The top healthcare employers in the area are Providence Health Systems, with 17,543 employees, and The Oregon Health Sciences University (OHSU), with 16,200 workers. OHSU is the recent recipient of a total of $1 billion in donations for cancer research from over 10,000 Oregon donors. Grants from the National Institutes of Health totaled $182.7 million in 2016.

MANUFACTURINGIn trucking and transportation, Daimler Trucks—with nearly 3,000 area workers—has big plans for the Portland area. The company recently spent $150 million renovating its Portland facility and invests heavily in research and development, including autonomous driving.

PORTLAND MARKET SNAPSHOTMAJOR EMPLOYERS


PORTLAND MARKET SNAPSHOTPORTLAND METRO AREA The Portland Metro Area is one of the strongest apartment markets in the nation, as reflected in strong year-over-year rent growth and consistently tight vacancy. The area’s strong job market and high quality of life continues to attract new residents; approximately 65 people move here per day. New apartment construction has not caught up to the housing demand created by in-migration.

4.95% Metro-area vacancy

#2 for Oregon in Migration

in US

7.7% Year-over-year rent growth**

$68,125 Median household

income

3.7% Unemployment rate

(November 2018)

48.2% Portland residents age 25+ years (with a bachelor’s degree or higher)

21,345 New Portland residents

(2016-2018)

38.3% Metro area renter-

occupied housing rate

4,474 Portland residents

per square mile


TOP AREA EMPLOYERS

20,000 area employees 10,269 area employees 12,000 area employees

12,955 area employees


5,200 Oregon employees

Intel is the area’s largest private employer. Recently, following a five year, $6 billion expansion, the company unveiled vast, long-term plans for future growth.

Kaiser has 35 medical facilities, 18 dental offices and 1,400 doctors in the Pacific Northwest. It employs more than 10,000 in the Portland metro region and serves 11.8 million members nationally. Kaiser is headquartered in Oakland, California.

In April of 2016, Nike announced a $1 billion expansion of its Beaverton world headquarters. The company is adding 1.3 million square feet of office space and parking for 3,300 vehicles. Construction on the final parts of this expansion will wrap up in 2019.

Legacy is a locally-owned nonprofit based in Portland, Oregon. It is the only health system covering the Portland/Vancouver area south to Salem with multiple hospitals and a hospital dedicated to exclusively serving children.

With nearly 50,000 students, Portland Public Schools is Oregon’s largest district. Portland is currently in the midst of a massive voter-approved high school and middle school reconstruction and modernization program.

In 2017 voters approved $790 million in taxes to rebuild one middle school and three high schools. The bond was in addition to a $480 million bond in 2012 for a similar program.

Fred Meyer offers one-stop shopping at 133 multi-department stores in four western states.

17,543 area employeesProvidence is a non-profit network of hospitals, health plans, physicians, clinics and related services. It operates in Alaska, Washington, Oregon, Montana and California. It was originally founded by the Sisters of Providence in Montreal Quebec in 1843.


Oregon Health Sciences University (OHSU) leads the way in government-funded healthcare — and secures numerous grants for the advancement of health sciences. OHSU recently acquired a $1 billion gift for cancer research.

Grants from the National Institutes of Health have held steady from around $184 million in 2011 to $219 million in 2017. This infuses the economy with jobs and income from outside the Portland MSA.


1

ST JOHN’S PARK2610 R Street, Vancouver, WATotal Units: 45 Avg SF: 800Year Built: 1983 Avg Rent: $1,140

Avg Rent/SF: $1.43

Unit type Units Sq Ft Rent Rent/Sq Ft2 BED / 1 BATH 80 914 $1,218 $1.33

Average 80 914 $1,218 $1.33


Average 45 800 $1,140 $1.43

KING JAMES/KINGS GATE3707-3808 E 18th Street, Vancouver, WATotal Units: 80 Avg SF: 914Year Built: 1970 Avg Rent: $1,218

Avg Rent/SF: $1.33

S

RENT COMPARABLESKING JAMES AND KINGS GATE • 80 UNITS • VANCOUVER, WA


2

OAK PARK3331 NE 57th Ave, Vancouver, WATotal Units: 14 Avg SF: 1,080Year Built: 1978 Avg Rent: $1,370

Avg Rent/SF: $1.27

Unit type Units Sq Ft Rent Rent/Sq Ft1 BED / 1 BATH 27 520 $838 $1.61

2 BED / 1 BATH 19 709 $964 $1.36

Average 46 598 $890 $1.49

3

OAK KNOLL APARTMENTS1817 Saint Johns Boulevard, Vancouver, WATotal Units: 46 Avg SF: 598Year Built: 1972 Avg Rent: $890

Avg Rent/SF: $1.49

Unit type Units Sq Ft Rent Rent/Sq Ft2 BED / 2 BATH 14 1,080 $1,370 $1.27

Average 14 1,080 $1,370 $1.27



5

WATER WORKS PARK APARTMENTS2008 E 4th Plain Boulevard, Vancouver, WATotal Units: 22 Avg SF: 900Year Built: 1977 Avg Rent: $1,254

Avg Rent/SF: $1.39


2 BED / 1 BATH 6 768 $939 $1.22

Average 40 564 $933 $1.65


Average 22 900 $1,254 $1.39

CONCORD ARMS1712 E 4th Plain Boulevard, Vancouver, WATotal Units: 40 Avg SF: 564Year Built: 1976 Avg Rent: $933

Avg Rent/SF: $1.65

4



6

BRYANT VILLAGE1608 Bryant Street, Vancouver, WATotal Units: 182 Avg SF: 972Year Built: 1974 Avg Rent: $1,235

Avg Rent/SF: $1.27


3 BED / 1 BATH 1 992 $1,558 $1.57

Average 26 821 $1,111 $1.35

7

THUNDERBIRD VILLAGE4601 E 18th Street, Vancouver, WATotal Units: 26 Avg SF: 821Year Built: 1978 Avg Rent: $1,111

Avg Rent/SF: $1.35


2 BED / 1 BATH 80 959 $1,219 $1.27

3 BED / 2 BATH 26 1,260 $1,464 $1.16

3 BED / 1.5 BATH 24 1,160 $1,384 $1.19

Average 182 972 $1,235 $1.27



9

PACIFIC CREST3700 E 4th Plain Boulevard, Vancouver, WATotal Units: 80 Avg SF: 877Year Built: 1970 Avg Rent: $1,207

Avg Rent/SF: $1.38


Average 80 877 $1,207 $1.38

RIDGEWOOD COURT & EVERGREEN TERRACE2815 E 19th Street, Vancouver, WATotal Units: 32 Avg SF: 606Year Built: 1968 Avg Rent: $1,001

Avg Rent/SF: $1.65

8



2 BED / 1 BATH 12 700 $1,124 $1.61

3 BED / 1 BATH 4 850 $1,128 $1.33

Average 32 606 $1,001 $1.65


OPERATIONS ANALYSISKING JAMES AND KINGS GATE • 80 UNITS • VANCOUVER, WA

Income May 2019 TTM Current Scheduled Rents Projected Operations Note

Scheduled Gross Rent $1,119,586 $1,169,072 $14,613 $1,278,504 $15,981 1Less: Vacancy/Credit Loss -$73,230 -6.5% -$58,454 -$731 -5.0% -$63,925 -$799 -5.0% 2Less: Concessions -$406 0.0% $0 $0 0.0% $0 $0 0.0% Less: Bad Debt/Recovery -$8,802 -0.8% $0 $0 0.0% $0 $0 0.0%

Net Rental Income $1,037,148 $1,110,619 $13,883 $1,214,579 $15,182 Other Income $96,131 $96,131 $1,202 $96,131 $1,202 3

Includes: Utility Billing (RUBs) $56,981 104.3% $56,981 $712 104.3% $56,981 $712 104.3% Includes: Miscellaneous $39,150 $39,150 $489 $39,150 $489

Gross Operating Income $1,133,278 $1,206,750 $15,084 $1,310,710 $16,384 Expenses May 2019 TTM % GOI Projected Operations Per Unit % GOI Projected Operations Per Unit % GOI

Real Estate Taxes $80,467 $73,039 $913 6.1% $73,039 $913 5.6% 4Insurance $21,319 $21,319 $266 1.8% $21,319 $266 1.6%Total Utilities $61,569 $61,569 $770 5.1% $61,569 $770 4.7% Administrative $16,802 $16,802 $210 1.4% $16,802 $210 1.3% Advertising $5,377 $5,377 $67 0.4% $5,377 $67 0.4% Fee Management $68,046 6.0% $36,202 $453 3.0% $39,321 $492 3.0% 5On-site Payroll $105,296 9.3% $105,296 $1,316 8.7% $105,296 $1,316 8.0% Landscaping $30,182 $30,182 $377 2.5% $30,182 $377 2.3%Maintenance/Repairs $21,261 $21,261 $266 1.8% $21,261 $266 1.6% Turnover $18,373 $18,373 $230 1.5% $18,373 $230 1.4% Reserves $20,000 $20,000 $250 1.7% $20,000 $250 1.5% 6

Total Expenses -$448,691 -$409,420 -$412,539 Expenses per Unit -$5,609 -$5,118 -$5,157% of Gross Operating Income 39.6% 33.9% 31.5%

Net Operating Income (NOI) $684,587 $797,330 $898,171



RENT ROLL ANALYSIS: SCHEDULED RENTS

Unit Type Unit Count

Square Feet

Lowest Achieved Rent

Highest Achieved Rent % Diff Average Scheduled

RentAverage Scheduled

Rent per Sq Ft

2 Bedroom / 1 Bathroom w garage (KJ) 8 700 $1,025 $1,445 41.0% $1,226 $1.75

2 Bedroom / 1 Bathroom flat (KJ) 18 875 $1,065 $1,290 21.1% $1,167 $1.33

2 Bedroom / 1 Bathroom duplex (KG 10 839 $1,120 $1,470 31.3% $1,272 $1.52

2 Bedroom / 1 Bathroom flat (KG) 36 986 $1,065 $1,350 26.8% $1,203 $1.22

2 Bedroom / 1 Bathroom w garage (KG) 8 986 $1,175 $1,425 21.3% $1,321 $1.34

Totals / Averages 80 914 $1,090 $1,396 28.3% $1,218 $1.33

RENT ROLL ANALYSIS: MARKET RENTS

Unit Type Unit Count

Square Feet

Average Scheduled Rents

Average Scheduled Rents per Sq Ft

Average Market Rent

Average Market Rent per Sq Ft % Change

2 Bedroom / 1 Bathroom w garage (KJ) 8 700 $1,226 $1.75 $1,375 $1.96 10.8%

2 Bedroom / 1 Bathroom flat (KJ) 18 875 $1,167 $1.33 $1,285 $1.47 9.2%

2 Bedroom / 1 Bathroom duplex (KG 10 839 $1,272 $1.52 $1,450 $1.73 12.3%

2 Bedroom / 1 Bathroom flat (KG) 36 986 $1,203 $1.22 $1,292 $1.31 6.9%

2 Bedroom / 1 Bathroom w garage (KG) 8 986 $1,321 $1.34 $1,425 $1.45 7.3%

Totals / Averages 80 914 $1,218 $1.33 $1,332 $1.46 8.6%


KING JAMES AND KINGS GATE • 80 UNITS • VANCOUVER, WA

OPERATIONS ANALYSIS

-4.00%

-3.00%

-6.00%

-5.00%

-2.00%

-1.00%

0.00%

-7.00%

Vaca

ncy

RENT TRENDS

Scheduled RentsMay 2019 T6-Month Annualized

May 2019 T3-Month Annualized

May 2019 TTM$1,140

$1,150

$1,230

$1,220

$1,210

$1,200

$1,180

$1,190

$1,170

$1,160

Aver

age L

ease

Ren

t

$1,166

$1,180

$1,194

$1,218

Scheduled Rent Vacancy



Flats Duplex

986 Sq Ft700 Sq FtKings Gate

GarageKing James

Sche

dule

d Re

nt

Average Rent Maximum RentMinimum Rent

$1,000

$1,450

$1,050

$1,100

$1,150

$1,200

$1,250

$1,300

$1,500

$1,350

$1,400

RENT VARIATION BY UNIT TYPE



OPERATIONS ANALYSIS

1. RENTS Rents are based on a July 2019 rent roll. Current scheduled rents average $1,218 per unit or $1.33 per sq ft. The projected rents are based on new move-in rates since the beginning of 2019 and average $1,332 per unit or $1.46 per sq ft. The increase to the market rents is 8.6% over current scheduled rents.

2. VACANCY, CONCESSIONS, AND BAD DEBT/RECOVERY

The projected operations stabilized the vacancy at 5.0%. The vacancy at King James and Kings Gate averaged 6.5% for May 2019 TTM operations. The July 2019 rent roll has only two vacant units.

3. OTHER INCOME Other Income includes administrative fees, month-to-month income, pet fees, and utility charges (RUBs). For the previous 12 months, other income totaled $96,131, the majority of which is from utility collections (RUBs). Residents are charged approximately $59 per month for water, sewer, and garage. The RUBs collections cover more than 104% of those total expenses.

4. PROPERTY TAXES Clark County property taxes decreased over previous years due to a reduction in the millage rates. Kings Gate and King James taxes decreased 11.2% in the 2019 tax year, preceded by two years of increases totaling 28.8%. The projected operations include the current tax assessment of $73,039.

5. MANAGEMENT FEE King James and Kings Gate are currently self-managed and the management fee includes costs associated with the current ownership. The management fee has been adjusted to reflect costs for a property like King James and Kings Gate in the Portland/Vancouver metro area that is managed by an independent, third-party management company. The management fee is projected at 3.0% of GOI (Gross Operating Income).

6. RESERVES Lenders require reserves be set aside to address future capital costs associated with any property as it ages. The projected operations include reserves of $250 per unit or $20,000 annually.

TAX HISTORYTax Year

2017 2018 2019Account #

29299000 9,000 10,897 10,428

29300000 10,784 13,055 12,797

29373081 3,578 4,543 3,875

29323000 43,575 52,757 45,939

Total $66,937 $81,252 $73,039

% Change 11.21% 17.62% -11.24%



OFFER TERMSQUESTIONS & TOUR REQUESTS:

Please do not disturb tenants.

All tours and inquiries regarding Kings Gate & King James are to be directed to HFO Investment Real Estate at (503) 241.5541.

Rob Marton • [email protected] Frick • [email protected] Stephens • [email protected] Cross • [email protected] Lee Fehrenbacher • [email protected] Tully • [email protected] Smith • [email protected] Gates • [email protected] Rand Hoffman • [email protected]

Investment Real Estate 2424 SE 11th Avenue • Portland, Oregon 97214www.hfore.com • (503) 241.5541 • Fax: (503) 241.5548

Brokers licensed in the States of Oregon and Washington.

ASSET SUMMARYProperty King James & Kings Gate

Location 3707-3808 E 18th Street

City, State Vancouver, WA 98661

County Clark

Year Built 1970

Total Units 80

Avg Rent $1,218

Avg Rent per Sq Ft $1.33

PRICE SUMMARYPrice $14,000,000

Price Per Unit $175,000

Per Square Foot $191

Cap Rate (Scheduled Rents) 5.70%


HFO Investment Real Estate

2424 SE 11th Avenue • Portland, OR 97214www.hfore.com • 503.241.5541

Passion • Collaboration • Specialization

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. Parties who receive this information from unauthorized parties shall not be recognized. ©2019 HFO Investment Real Estate LLC. Build your legacy is a service mark of HFO Investment Real Estate. Licensed in the states of Oregon and Washington.

kings gate & king james · kings gate & king james • 80 units • vancouver, wa 3. ......

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