307 Se Hawthorne
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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 replace- ment 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 seis- mically 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.