307 Se Hawthorne

307 SE HAWTHORNE

USER 97214 OREGON

VALUE ADD PORTLAND $7,000,000 | $264/RSF CENTRAL EASTSIDE VIEW CREATIVE SPACE 9,000 SF AVAILABLE NOW

VIBRANT HAWTHORNE AREA STEVE DODDS DENIS O’NEILL BUILDING FULLY RENOVATED 503 542 5890 503 542 5880 CREATIVE AMENITIES [email protected] [email protected] CONTENTS CALL FOR PRICING SECTION 1: EXECUTIVE SUMMARY

• The Offering • Property Overview • Investment Highlights

SECTION 2: PROPERTY DESCRIPTION

• Photos • Building Description • Floor Plans • Area Amenities

SECTION 3: FINANCIAL INFORMATION

• Rent Roll • 2017 Expenses • Projected User Return

SECTION 4: MARKET OVERVIEW

• Portland Office Overview • Sale Comparables • Lease Comparables • Competitive Set SECTION 1: EXECUTIVE SUMMARY THE OFFERING

The Howard Cooper Building SE 3rd Avenue and SE Hawthorne

With 9,000 square feet of built-out creative space and sweeping views of the Portland’s skyline, the property offers an immediate opportunity for users to purchase a building in the heart of Central Eastside at significantly below replacement cost. The first two floors are 100% occupied at $11.39 NNN, substantially below market rents. Short term leases provide upside or expansion options. The building was seismically upgraded when fully renovated in 2000.

Colliers International has been retained by the Owner to ex- clusively market the property and will conduct tours with any prospective purchaser, with reasonable notice.

PROPERTY OVERVIEW

Price Rentable SF $7,000,000 ($264/RSF) Location 307 SE Hawthorne Blvd Portland, OR 97214 Net rentable area 26,559 SF Gross building area 28,500 SF Floor plates 9,500 Gross SF Site coverage 100% Zoning EXd Year Built 1925 Renovated & Seismic Upgrade 2000 % Leased 58% Stories 3 floors Parking Street parking - SE 3rd, SE Hawthorne INVESTMENT HIGHLIGHTS

VALUE ADD OPPORTUNITY

• At $264/RSF, priced significantly below replacement cost • Below market rents - $17.91 mgross, $11.39 net average • Short term leases allow immediate value add or expansion • 15,383 square feet, 2 floors, of leased multi-tenant creative space • Income can be increased by adding load factor and expense reimbursement • Demand for second generation creative space driving rising rents

UNIQUE PROPERTY

• 9,000 SF of built-out creative space available • 2nd floor expansion possible in 2019 • Sweeping views of Portland’s skyline • Superb transit location at base of the Hawthorne Bridge and a bike score of 100 • Building fully renovated and seismically upgraded in 2000 • Structure will allow addition of a 4th floor penthouse • Exposed wood beams and 14 foot ceiling heights • Hardwood floors and quality finishes • Bike parking and showers SECTION 2: PROPERTY DESCRIPTION PHOTOS

CALL FOR PRICING BUILDING DESCRIPTION

Address 307 SE Hawthorne Blvd Portland, OR 97214 Assessor’s Parcel Number R1560071, Multnomah County Zoning EXD, Central Employment w/ design overlay Year Built 1925 Renovated & Seismic Upgrade 2000 Exposure High visibility from Hawthorne Bridge Lobby Access to the main lobby is provided at SE 3rd Avenue Foundation Concrete Exterior Walls Painted concrete Flooring A combination of polished concrete, hardwood, tile and commercial grade carpet Interior Outside Walls Exposed concrete Ceilings Exposed Interior Build-out The building is a former industrial building converted to multi-tenant creative office. The first and second floors have a lobby while the entire third floor has been occupied by a full floor user. There is a set of common area women’s and men’s restrooms on the second floor. The building has two stairwells and one elevator.

Third Floor Build-out The third floor has hardwood floors, high ceilings with black industrial insulation. There is a set of men’s and women’s restrooms, a restroom with a shower, and a kitchen. Windows Glass in aluminum frames Exterior doors Glass in metal frames Heating Forced air Air Conditioning Central HVAC Fire protection Sprinkler system FLOORPLANS 1ST FLOOR CALL FOR PRICING Suite 200 Anderson 5,206 SF Suite 102 Stroempel 2,040 SF Common Area

Suite 100 Non-Rentable SF Veenker Common Area 1,600 SF Non-Rentable SF

Suite 250 Zembula Suite 150 3,422 SF Abbott 3,115 SF 2ND FLOOR FLOORPLANS 3RD FLOOR

Non-Rentable SF CBD

Suite 300 VACANT 8,853 SF

HAWTHORNE BRIDGE AMENITIES MAP STREETCAR CENTRAL EASTSIDE Morrison Bridge

STREETCAR

MAX Bike Score: 100 DOWNTOWN

Hawthorne Bridge

STREETCAR STREETCAR

Transit Score: 82 MAX

Marquam Bridge AMENITIES

MAX Tilikum Crossing

Walk Score: 78 Ross Island Bridge SECTION 3: FINANCIAL INFORMATION PROJECTED RENT ROLL (with user)

APPROX % OF START EXPIR. MONTHLY ANNUAL ANNUAL LEASE RENT INCREASES TENANT UNIT # RENTABLE SQ. FT DATE DATE BASE RENT BASE RENT RATE/SF TYPE DATE RATE/SF OPTIONS

1 Lana Veenker Casting, LLC 100 1,600 6.60% 1/26/11 MTM $2,060.00 $24,720 $15.45 MGross Janitorial

2 JR Abbott Construction Co. 150 3,115 12.85% 6/7/12 12/31/20 $4,269.00 $51,228 $16.45 MGross 1/1/19 $4,397 (1-3 Yr) FMV Janitorial

3 George Stroempel 102 2,040 8.42% 6/12/03 MTM $1,500.00 $18,000 $8.82 Gross None

Subtotal Floor 1 6,755

4 Anderson Dabrowski Architects 200 5,206 21.48% 2/6/03 6/30/20 $7,110.92 $85,331 $16.39 MGross 7/1/19 $7,324 None Janitorial 2015 Base Year

5 Zembula Inc 250 3,422 14.12% 4/19/12 7/31/19 $8,020.83 $96,250 $28.13 MGross Prepaid None (Program Management sublease) Janitorial

Subtotal Floor 2 8,628

6 User 300 8,853 36.53% 8/4/60 $265,590 $30.00 NNN

Total 24,236 100% $45,093.25 $541,119 $22.33 Potential Load Factor 2,323 -$265,590 Total Rentable 26,559 In - Place $275,529

The information contained herein has been obtained from sources we deem reliable. We do not, however, guarantee its accuracy. All information should be verified prior to purchase. 2017 EXPENSES PROJECTED USER RETURN

PRICE $7,000,000 CAPITALIZATION RATE 6.74% 2017 Annual EXPENSES/SF 2018 Annual PRICE PER RENTABLE SQUARE FOOT 26,559 $264 105% Income OCCUPIED SF 15,383 24,236 SF Monthly Rent Annual Rent SF Occupied Rent 15,383 $22,960.75 $275,529 $17.91 User Rent NNN 8,853 $265,590 $30.00 2017 Operating Expenses Op Exp Reimbursement 15,383 $60,985 $3.96 Alarm/Security $10,483.54 $0.68 User NNN Op Exp Reimbursement 8,853 $55,897 $6.31 Bank Fees $39.16 $0.00 Gross Income $658,001 $27.15 Elevator $4,674.67 $0.30 Vacancy 5.0% $(32,900) Garbage $5,187.00 $0.34 Effective Gross Income 24,236 $52,091.73 $625,101 $25.79 Less 2018 Operating Expenses Insurance $6,504.86 $0.42 Property Taxes Janitorial $5,995.64 $0.39 Operating Expenses Maintenance $22,404.35 $1.46 Total 24,236 $(153,023) $(6.31) RE Tax & Licences $36,263.30 $2.36 Projected 2018 NOI $39,339.81 $472,078 $19.48 Leveraged Return Calculator Utilities $25,315.02 $1.65 Loan 70% $4,900,000 Subtotal CAMS $116,867.54 $7.60 1% fee 1% $49,000 Property Management Fee $6,240.00 $0.41 $30,000 Equity $2,100,000 TOTAL EXPENSES $123,107.54 $8.00 $153,023 Total Equity $2,149,000 Tenants pay for janitorial $6.31 Rate 4.75% Amortization Term 25 User % 36.53% Due 10 Net Operating Income $39,340 $472,078 $17.77 The information contained herein has been obtained from sources we deem reliable. We do not, however, guaranteee its accuracy. All Debt Service $(27,936) $(335,229) $(12.62) information should be verified prior to purchase. Pre-Tax Cash Flow $11,404 $136,849 $5.15 Pre-Tax Leveraged Cash on Cash Return 6.37%

Principal Reduction $104,740 Total Return $241,588 Total Return on Equity 11.24%

The information contained herein has been obtained from sources we deem reliable. We do not, however, guaranteee its accuracy. All information should be verified prior to purchase. SECTION 4: MARKET OVERVIEW THE PORTLAND ADVANTAGE

Economy Nestled at the confluence of the Willamette and Columbia PORTLAND STATS Rivers in northwestern Oregon, lies the city of Portland, nicknamed the Rose City, The City of Roses, and “Beervana” because it has more micro-breweries inside the city limits than any other city in the world. #1 Moving Destination 4.3% Unemployment #1 of all US states Rate (MSA) Once reliant on timber, fishing and agriculture, Portland’s Best Places for Business and diversified economy now includes technology, healthcare and Careers (Forbes) education with a special emphasis on clean technology, advanced manufacturing, software and active wear. Fortune 1,000 companies Nike (#115), Precision Castparts (#322), Stancorp Financial Group (#755) and Schnitzer Steel (#803) #2 call Portland home. Providence, Legacy and Kaiser support a Nationally in High-Tech GDP combined 33,863 jobs, underscoring the importance of the Concentration healthcare industry to the Portland-Vancouver-Hillsboro MSA. Straddling the healthcare and education sectors is the Oregon Highest % of Bike 530+ Square Miles Health & Science University (OHSU). With over 13,000 #3 Commuters of Any Served by Public employees and approximately 3,000 students, this nationally on ULI’s Overall Real Estate Transport renowned public university is one of the nation’s top 20 Markets to Watch in 2017 US City biomedical research facilities. #8 Population “World’s best cities for Millennials” • The City of Portland accounts for more than one quarter - Matador Network (2016) of the PMSA’s approximately 2.3 million residents. It is the 29th largest city in the country. • The metro area’s median age is 37, a year younger than TOP 10 45.5% with a Bachelor’s 95,000 + both San Francisco’s and Philadelphia’s. U.S. Destinations for Solo Travel - FlipKey (2016) Degree or Higher Tech Employees • Population is projected to reach 2.8 million by 2025. • Population growth of 6.14% is projected from 2015-2020. A HIGHLY DESIRABLE GATEWAY CITY DIVERSE TENANT BASE WELL EDUCATED

“ We looked at a number of WORKFORCE cities across the US and chose Portland for several reasons, including its talent pool and proximity 45.5% of workers have a to our headquarters in BA or higher San Francisco.”

Downtown Portland Employment Growth Education > Who is moving to Portland? 12.8% DOWNTOWN PORTLAND EMPLOYMENT of workers have

DOWNTOWN PORTLAND EMPLOYMENT GROWTH graduate degrees DOWNTOWN WHO IS MOVING TO PORTLAND Unemployment Rate EMPLOYMENT 4.3% BY INDUSTRY 98,000 5,000 12,000 96,000 4,500 9,720 4,000 10,000 41% are Millennials 94,000 Median Household income of 3,500 8,000 92,000 3,000 $60,300/year 6,122 26% Tech & Information 90,000 2,500 6,000 2,000 88,000 4,108 4,516 1,500 3,809 86,000 4,000 3,206 Number of Employees 1,000 Number of Enterprises 2,416 3.0% YOY Job Growth 84,000 500 2,000 10% increase over 2007 82,000 0 in terms of # of residents 19% Education, Health & Public Services 2010 2011 2012 2013 2014 0 with BA or higher – a Total Enterprises Total Employees Portland Metro Estimated Population pace that is faster than San Francisco, Seattle, Growth of 725,000 residents by 2035 and San Jose. 16% Entertainment & Service DOWNTOWN PORTLAND EMPLOYMENT Children (0-17) Retirees (65+) 5,000 89% TECH29% JOBS ADDED College Age (18-24) Late Career (55-64) TECH JOBS ADDED OF COMPANIESDOWNTOWN OFPORTLAND COMPANIES EMPLOYMENT PLAN GROWTH Root-Setting (25-34) Peak Earning (45-54) DOWNTOWN BETWEEN 2010 - 2014 Peak Working (35-44) BETWEEN 2010 - 2014 EMPLOYMENT REPORTED BUSINESS TO EXPAND IN THE 14% Finance & Real Estate IS HEALTHY NEXT 2 YEARS BY INDUSTRY 98,000 5,000 96,000 4,500 4,000 UNEMPLOYMENT RATE MEDIAN HOUSEHOLD INCOME “ The ongoing growth in employment94,000 and businesses downtown has 56 3,500 11% Management & Support Services been great news for the region.92,000 We are especially encouraged to see 3,000 26% Tech & Information 90,000 5,000 2,500 growth concentrated in traded-sector industries like technology and 2,000 8% Trade & Transportation finance, since traded-sector jobs88,000 are known to pay a family wage” 1,500 $60,300 86,000 Number of Employees 1,000 Number of Enterprises 4.3% 5% Other - Mark Schlesinger, Portland Clean & Safe Board Chair 84,000 COMPANIES THAT REPORTED 500 82,000 0 YOY JOB GROWTH PORTLAND METRO ESTIMATED 19% Education, Health & Public Services 2010 BUSINESS2011 2012 IS HEALTHY2013 2014 POPULATION GROWTH BY 2035 Total Enterprises Total Employees

MARKET ANALYSIS 63 16% Entertainment & Service 5,000 89% 29% 3.0% 725,000 TECH JOBS ADDED 89.9%OF COMPANIES OF COMPANIES PLAN BETWEEN 2010 - 2014 REPORTED BUSINESS TO EXPAND IN THE 14% Finance & Real Estate IS HEALTHY NEXT 2 YEARS COMPANIES THAT PLAN TO 10% INCREASE “ The ongoingEXPAND growth in employmentIN THE NEXT and businesses 2 YEARS downtown has 11% Management & Support Services 45.5% been great news for the region. We are especially encouraged to see # OF RESIDENTS WITH 12.8% growth concentrated in traded-sector industries like technology and 8% Trade & Transportation OF WORKERS HAVE A BA OR HIGHER SINCE finance, since traded-sector jobs are known to pay a family wage” OF WORKERS HAVE A BACHELORS DEGREE OR 2007 - OUTPACING SAN 5% Other - Mark Schlesinger, Portland Clean & Safe Board Chair GRADUATE DEGREE HIGHER FRANCISCO, SEATTLE 29.9% AND SAN JOSE.

MARKET ANALYSIS 63 Award-Winning Transit Fastest Growing Tech Market in the U.S. Portland’s high concentration of tech business has earned it the title of “Silicon Forest.”

5.7% OF “PORTLAND MIGHT BE THE MOST WALKING, BIKING, AND COMMUTERS PUBLIC TRANSIT FRIENDLY CITY WALK TO WORK ON THE WEST COAST.” (U.S. average of 2.9%) - WALKSCORE.COM

7.2% OF COMMUTERS 11.9% OF BIKE TO COMMUTERS WORK TAKE PUBLIC (Highest in the Nation) TRANSPORTATION (Ranked Top 10 Transit Friendly City by WalkScore.com)

NEARLY 60 MILES OF MAX LIGHT RAIL 1/3 THROUGHOUT THE 84.3% 49,770 $103,000 LARGER SHARE #1 AIRPORT IN AVERAGE SOFTWARE REGION OF OREGON’S TECH SOFTWARE & OF TECH JOBS IN DEVELOPER SALARY IN THE NATION WORKERS LIVE IN TECHNOLOGY JOBS IN PORTLAND THAN PORTLAND (Ranked by Travel + PORTLAND PORTLAND MSA NATIONAL AVERAGE Leisure - 2013-2015) AVERAGE COMMUTE TIME OF 24.2 MINUTES (Below National Average) OFFICE MARKET OVERVIEW USER SALE COMPARABLES

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VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE

YOY FORECAST YOY FORECAST YOY FORECAST YOY FORECAST

Address 307 SE Hawthorne Blvd 522-532 SE Clay St 603-619 SE 6th Ave 1435 NW Northrup St

Eastside has incredibly low vacancy at Square Feet 26,559 SF 4,026 SF 6,700 SF 6,022 SF 3.29%, which is down 51 basis points since Sale Date - Dec 2017 Aug 2017 Mar 2016

Q4 2017 and 611 basis points since Q1 2017. Sale Price - $1,651,000 $2,700,000 $8,000,000

COLLIERS PORTLAND % Price PSF - $410.08 $402.99 $307.43 Q1 2018 Industrial Market Report Year Built 1925 1925 1927 1929

Renovated in 2000 Seismic update & NOTABLE DEVELOPMENT PROJECTS Notes Needs seismic upgrade 10VACANCY Seismic upgrade renovated to creative office PROPERTY SUBMARKET DEVELOPER/OWNER SF PRELEASE DELIVERY TYPE 2424 SE 9th Ave Central Eastside SolTerra Systems 35,000 68% Q2 2018 N

*The Silica NE Close In Rujax V, LLC 31,000 0% Q2 2018 N

Flatiron PDX NE Close-In Southern Miss, LLC 24,300 27% Q2 2018 N 3 Field Office - East NW Close In project^ 165,653 25% Q2 2018 N

4000 Columbia House Blvd St Johns Central Killian Pacific 45,000 67% Q3 2018 N Vancouver

9North CBD Williams & Dame/Miller 202,168 0% Q3 2018 N Global *The Waterfront Block 6 West Vancouver Gramor 77,000 45% Q3 2018 N -231.1 CBD THOUSAND SQUARE FEET Heartline (Pearl Block 136) CBD Security Properties 70,702 90% Q3 2018 N ABSORPTION Broadway Tower (office CBD BPM Real Estate 177,800 66% Q4 2018 N portion)

7 SE Stark Lloyd District Harsch Investment 70,000 43% Q1 2019 N Properties Redfox Commons Guilds Lake L&L Investment Partners 60,000 0% Q1 2019 AR 2

N = NEW CONSTRUCTION AR = ADAPTIVE REUSE R = RENOVATION

SF UNDER CONSTRUCTION $30.37 1 Million CLASS A RENT 1 • Down 35% since Q2 2017 • Nearly 40% pre-leased • 64% CBD / 36% Suburban LEASE COMPARABLES COMPETITIVE SET

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Moonshine Events, LLC Tullius Healthnotes Hacker Architects

Eastside Exchange Lloyd 700 Waterman Building Clay Creative

1,950 SF 1,749 SF 5,754 SF 14,076 SF

Start Date: 7/15/16 Start Date: 4/1/16 Start Date: 9/1/17 Start Date: 4/1/18

Term: 60 months Term: 62 months Term: 20 months Term: 18 months Eastbank Washington Olympic Mills LeftBank Rate: $27.00/SF NNN Rate: $31.00/SF NNN Rate: $23.00/SF FSG Rate: $36.00/SF FSG Commerce Center High School

TI: $5.00/SF TI: $15.00/SF TI: $0.00/SF TI: $0.00/SF 13,063 RSF Available 9,955 RSF Available 8,197 RSF Available 3,704 RSF Available 0 months free rent 2 months free rent 2 months free rent 0 months free rent Available Now Available Now Available Now Available Now

$29.50/SF $22.00/SF $23.00/SF $36.00/SF MG NNN NNN FS

13,533 SF Typical Floor 23,723 SF Typical Floor 19,628 SF Typical Floor 9,587 SF Typical Floor

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2 STEVE DODDS DENIS O’NEILL Vice President Senior Vice President 503 542 5890 503 542 5880 [email protected] [email protected]

851 SW Sixth Avenue, Suite 1200 Portland, Oregon 97204 503 223 3123