CRESTON VILLA APARTMENTS 44 Units • Portland, OFFERING MEMORANDUM

www.hfore.com (503) 241.5541 INVESTMENT SUMMARY Creston Villa Apartments is a well-located 44-unit apartment community Creston Villa Apartments has a diverse unit mix that includes one-, in southeast Portland, Oregon. Located near the intersection of Powell two- and three-bedroom apartments. The majority of the floor plans— Boulevard and Cesar Chavez Boulevard (SE 39th Avenue), Creston Villa approximately 66%—are 776 sq ft two-bed one-bath apartments. Each Apartments has immediate access to major thoroughfares as well as of the units offers a private patio or deck, and a central laundry room is convenient retail services. Safeway is less than one block away, as is easily accessible. Portland’s newest multiplex movie theatre. Numerous local and national retailers and restaurants are found on Powell Boulevard, along Division Creston Villa Apartments’ rents currently average $1,123, or $1.54 Street to the north, and Holgate Boulevard to the south. sq ft and have demonstrated a positive trend. Current average rents and Creston Elementary are immediately to the east, and Cleveland High are approximately 6.5% higher than 2018. Creston Villa Apartments’ School is within walking distance. convenient location and strong historical operations make the asset an exceptional investment opportunity.

2 HFO INVESTMENT REAL ESTATE EXECUTIVE SUMMARY

INVESTMENT HIGHLIGHTS • Outstanding SE Portland location 29.6% 65.9% 4.5% • Newer roofs and windows 1 Bedrooms 2 Bedrooms 3 Bedrooms • Private patios or decks • On-site laundry and off-street parking

ASSET SUMMARY UNIT MIX SUMMARY Property Creston Villa Apartments Unit Type Unit Count Avg Sq Ft Total Sq Ft % of Total Units Location 3608 SE 40th Avenue 1 Bedrooms 13 570 7,409 29.6%

City, State Portland, OR 97202 2 Bedrooms 29 776 22,518 65.9%

County Multnomah 3 Bedrooms 2 1,038 2,075 4.5%

Year Built 1969 Total / Averages 44 727 32,002 100.0% Total Units 44

Approx NR Sq Ft 32,002 PRICE SUMMARY TOURS AND INQUIRIES Avg Unit Size 727 Price $7,150,000 Rob Marton • [email protected] Acreage 0.99 Greg Frick • [email protected] Per Unit $162,500 www.hfore.com Per Sq Ft $223 (503) 241.5541 Fax: (503) 241.5548 Cap Rate 5.10% Please do not disturb tenants.

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 3 4 HFO INVESTMENT REAL ESTATE CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 5 6 HFO INVESTMENT REAL ESTATE CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 7 LIFESTYLE CONVENIENCES

SE Belmont St SE 60th Ave SE 82nd Ave Hawthorne Blue Star Donuts Mt Tabor Park SE 50th Ave McMenamins Baghdad Portland Campus Theater & Pub

205 Stumptown Coffee Roasters SE Division St Petite Provence César Chávez E. Blvd 213

Powell Street Station Creston Villa Apartments SE Powell Blvd SE 26th Ave 26 SE 52th Ave Creston Park Century 16 SE 92nd Ave

SE Holgate Blvd SE Foster Rd SE 28th Ave HK Cafe

Lent Park SE Steele St

Woodstock Park Mt Scott Community Center & Indoor Pool

Crystal Spring Rhododendron Garden SE Woodstock Blvd Mt Scott Park

8 HFO INVESTMENT REAL ESTATE IN THE VICINITY Restaurants and Dining Shopping/Entertainment Lifestyle Services

Richmond Elementary School 40 45 41 42 43 39 49 48 46 70 SE Division St 66 63 62 60 59 56 54 52 51 44 38 47 71 69 68 67 65 64 61 58 57 55 53 50 37 72

73 74 César Chávez E. Blvd SE 26th Ave 36 Franklin High School 75 SE 50th Ave

22 76 77 26 23 24 35 78 81 Cleveland High School 9 10 St Ignatius School 83 8 25 26 27 28 32 82 85 13 12 11 2 3 26 SE Powell Blvd 29 31 84 14 5 6 7 1 87 15 4 Creston Annex Head Start 18 30 33 86 16 17 Creston Villa Apartments

34 SE 52nd Ave 79 80 Creston Park SE Foster Rd 88 21 Creston Elementary School 19 20

1. Safeway 16. Oregon Buddist Temple 31. Burger King 45. Tasty n Daughter 60. Ava Gene’s 75. People’s Food Co-op 2. Brown Lumber 17. Portland Taiko 32. Taco Time 46. New Thai Blues 61. Olympia Provisions Public House 76. US Postal Service 3. Tecos Fresh Mexican Food 18. Holy Trinity Barbecue 33. Speedboat Coffee 47. Tea Bar SE 62. Salt & Straw 77. Teutonic Wine Company 4. Dank Snacks and Supplies 19. Gladstone Street Pub 34. Little Caesars Pizza 48. Marino Cafe 63. Blue Star Donuts 78. Bullseye Glass Co 5. T-Moble 20. Plaid Pantry 35. Planned Parenthood - SE 49. Loprinzi’s Gym 64. Artigiano 79. Portland General Electric 6. Petco Grooming 21. Smith PDX 36. K & M Auto Service 50. Tropical Hut 65. Pok Pok 80. Fred Meyer Main Office 7. Wells Fargo Bank 22. Loyola Jesuit Center 37. Bete-Luka | Ethiopian 51. Rite Aid 66. 81. Burgerville 8. Rapid Cash 23. Van Veen Nursery 38. North Bar 52. Tom’s 67. Imperial Bottle Shop & Taproom 82. Catholic Charities 9. O’Reilly Auto Parts 24. Rhododendron Society Portland 39. Smaaken Waffle Sanwiches 53. 7-Eleven 68. 83. McDonald’s 10. Les Schwab Tire Center 25. Fireston Complete Auto Care 40. Fern Kitchen 54. Authentic Thai Cuisine 69. Papa G’s Vegan 84. 11. Path Twyman’s Car Center 26. Pho Hung 41. Good Coffee 55. Yataimura Maru 70. 85. Target / CVS Pharmacy 12. Starbucks 27. Thai BBQ 42. Landmark Saloon 56. 71. New Seasons Market 86. Papa John’s Pizza 13. Rose City Pediatrics 28. La Bama 43. Los Gorditos 57. Division Do it Best Hardware 72. Clinton Community Garden 87. Pacific Fish & Oyster 14. Denicolas’s 29. Taco Bell 44. Tokio Table - Japanese 58. Atlas Pizza 73. Yama Sushi & Izakaya 88. Multnomah County Clinics 15. Naomi’s Organic Farm Supply 30. US Postal Service Steakhouse 59. Townshend’s Teahouse 74. Jacquelin

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 9 205

SE 92nd Ave LifestyleServices JOANN Fabrics and Crafts Fabrics JOANN & Buffet Pizza Izzy’s Less for Ross Dress Services Postal U.S. Jr Carl’s Best Baguette KFC Hut Pizza Food WinCo OM Seafood Company OutletChair 7-Elevent Seafood Powell’s ABC Seafood Company Steakadelphia 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. Lents Century 16 68 Eastport Plaza SE Powell Blvd SE Powell 73 79 76 66 81 72 78 75 65 60 52 51 53 69 67 56 59 82 80 77 74 71 64 61 50 213 Baxter Auto Parts Baxter Auto LibraryMultnomah County Walgreens GameStop HK Cafe Dollar Tree Bank Branch U.S. Jack in the Box Pizza Domino’s Sushi Bar & Grill Fujiyama Wingstop LA Fitness Bell Taco Bank of America 48 70 58 57 55 54 63 84 47 49 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. 83 62 46 Shopping/Entertainment

85 SE Foster Rd Essex Park Essex 44 86 43 45 SE Holgate Blvd SE Holgate SE 72nd Ave 87 WorkSource Portland Metro Portland WorkSource McDonald’s Kitchen Louisiana Popeyes Emmert Saigon Mall Cali BBQ Korean K-Town Bank Fargo Wells Big 5 Sporting Goods TV & Appliance Standard Harbor Tools Freight Super King Buffet Bar & Grill 82nd Street IHOP Bar & Grill Shamrock Double Up Bar Plus Bulds Batteries 42 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 41 40 26 Restaurants and Dining and Restaurants 34 37 39 33 36 88 38 32 35 89 Kern 31 28 29 30 27 26 25 SE Harold St SE Harold N.W.I.P.A Henry Higgins Boiled Bagels Bar Carlo Tavern Starday TheOff Griddle Furniture Euroclassic Dutch Bros School Montessori Home Garden Dollar Tree Mart Food Everyday Envirocars Maple Leaf Mercado Portland Carts Food FoPo Center Mt Scott Community 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 21 19 20 24 90 22 23 16 15 5 14 18 13 8 17 12 10

7 SE 52nd Ave Foster Fitness Center Fitness Foster Po’ Boy Art Buds Foster Taqueria Nayar Tarven FoPo Tambayan YMCA Y Arts / SE Center Assembly Brewing 7-Eleven Market Foster Pizza Round Table Park Laurelwood SEIU K & B Bakery Spout Garden The 4 9 11 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 3 6 2 1 SE Steele St SE Steele Woodstock Park Woodstock

Creston Villa Villa ApartmentsCreston Creston Park Creston

Pho Hung Bell Taco Gorditos Los Taqueria King Burger Siri Thai Service Postal U.S. Speed Coffee Boat Subway Pizza Little Caesars Trap Burger Awesome Bakery Xuyen An the Arts for Center Day New Morlan Plumbing Supply George

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. IN THE VICINITY THE IN HFO INVESTMENT REAL ESTATE HFO 10 PORTLAND METRO SNAPSHOT

PORTLAND REGION TOP 10 LISTS Oregon’s largest city, Portland, is near the confluence of the Willamette Portland consistently receives glowing and Columbia Rivers. The Portland Metro Area consists of four counties: reviews and rankings from the media. Multnomah, Washington, Clackamas, and Clark County, Washington. 2019 lists include: • #4 Best City for an Active Lifestyle (Wallethub) APARTMENT MARKET DIVERSIFIED ECONOMY • #7 Healthiest Cities to Live (Thrillist.com) The Portland Metro Area consistently ranks Portland is home to the headquarters of • #7 Best Cheap Destinations in the U.S. (U.S. among the nation’s lowest for apartment Fortune 500 companies Nike and Lithia Motors. News and World Report) vacancy rates according to the U.S. Census Fortune 1000 companies headquartered here • # 8 Best Place to Live in the U.S. (U.S. News and Bureau and other third-party services like REIS, include Columbia Sportswear, Greenbrier World Report) MPF Research, and Axiometrics. The U.S. Census Cos. and Portland General Electric. Fortune • #8 Fittest Cities in America (CBS News) Bureau pegged Portland’s Q3 2018 vacancy 500 companies based outside Oregon with • #9 Best Foodie Cities in the USA (U.S. News and rate at 4.5% and the U.S. average at 7.1%. major operations here are Precision Castparts World Report) and Intel. REIS forecast 2018 Portland metro year-over- 2018 lists include: year rents growth at 3.0% and the Multifamily Tech and software companies continue to • #1 Restaurant City of the Year (Bon Appetit) NW Apartment Report survey proved average relocate their operations here or open major • #1 Best Foodie City in America (Wallethub & October 2017-18 year-over-year rent growth outposts in Portland. These companies enjoy Travelpulse) #6 (Jetsetter) at 3.3%. Portland’s educated workforce, affordable high quality of life, and a low cost of doing • #3 Healthiest City in the U.S. (Active.com) SKILLED WORKFORCE & STRONG EMPLOYMENT business compared to the Bay Area. • #3 Best Place for Business and Careers (Forbes) In a 2018 WalletHub report comparing 150 of • #4 Best City for Biking (Fast Company) the largest U.S. metros, Portland is listed as Companies which have opened major branches in Portland include Airbnb, Google, • #9 Top City for Entrepreneurs and Start-Ups the 15th most educated city in America. More (Business.org) #23 (CNBC) than half of Multnomah County workers have Squarespace, Mozilla, Simple, Survey Monkey, • #10 Greenest City in America (Newsweek) a college degree, well ahead of the national SalesForce and New Relic, Inc. Portland’s tech average of 38.5%. startup companies include Viewpoint, Jama • #10 Most Entrepreneurial State (Amazon.com) Software, Thetus, Urban Airship, Acquia, • #15 Most Educated City in America (Wallethub) According to the State of Oregon’s Employment Elemental Technologies, Act-On, Puppet Labs, Department, Portland enjoys one of the fastest and The Clymb. job growth rates in the , and the entire nation. Data indicates the area added 31,000 jobs in 2016, 28,000 jobs in 2017, and 29,000 in 2018.

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 11 PORTLAND MARKET SNAPSHOT MAJOR EMPLOYERS GOVERNMENT SPORTSWEAR HEALTHCARE AND RESEARCH The U.S. Federal Government is Portland Nike has its world headquarters in Beaverton Health services are another major employment metro’s overall largest employer, with 20,500 and employs 12,000 Portland-area residents. The sector for the Portland area. The top healthcare workers. The State of Oregon gives employment company designs, develops and manufactures employers in the area are Providence Health to an additional 14,000 residents. footwear, apparel, equipment and accessories. Systems, with 17,543 employees, and The From here, Nike orchestrates production and Oregon Health Sciences University (OHSU), HIGH TECH & CHIP MANUFACTURING design for one of the world’s most recognizable with 16,200 workers. OHSU is the recent Attracted by the Portland area’s educated brands. In 2019 Nike will complete a $1 billion recipient of a total of $1 billion in donations workforce and relative low cost of doing expansion of its Washington County campus. for cancer research from over 10,000 Oregon business, tech companies continue moving donors. Grants from the National Institutes of to Portland—opening major branches and, in Nike’s two key competitors have a major local Health totaled $182.7 million in 2016. some cases, relocating to the area entirely. presence as well. Those employers include the North American headquarters of Adidas with MANUFACTURING With over 19,300 employees, Intel is the area’s 1,200 employees, and a new 70,000 SF outpost In trucking and transportation, Daimler Trucks— largest private employer. Intel acquired its of Under Armour. Under Armour has moved with nearly 3,000 area workers—has big plans for first Portland location in 1974. The company 100 employees into an iconic former YMCA. the Portland area. The company recently spent is currently expanding its presence with $150 million renovating its Portland facility and forthcoming D1X microprocessor chip facilities invests heavily in research and development, at the Ronler Acres Campus in Hillsboro. This including autonomous driving. 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.

12 HFO INVESTMENT REAL ESTATE PORTLAND MARKET SNAPSHOT

PORTLAND METRO AREA The Portland Metro Area is one of the 4.95% 38.3% 3.7% strongest apartment markets in the Metro-area vacancy Metro area renter- Unemployment rate occupied housing rate (November 2018) 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 7.7% 48.2% attract new residents; approximately $68,125 Year-over-year Portland residents age 25+ years Median household rent growth** (with a bachelor’s degree or higher) 65 people move here per day. New income apartment construction has not caught up to the housing demand created by in-migration.

21,345 4,474 #2 New Portland residents Portland residents for Oregon in Migration (2016-2018) per square mile in US

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 13 TOP AREA EMPLOYERS

20,000 area employees 10,269 area employees 12,000 area employees Intel is the area’s largest private Kaiser has 35 medical facilities, 18 In April of 2016, Nike announced a employer. Recently, following a 16,200 area employees dental offices and 1,400 doctors $1 billion expansion of its Beaverton five year, $6 billion expansion, in the Pacific Northwest. It world headquarters. The company the company unveiled vast, long- Oregon Health Sciences employs more than 10,000 in the is adding 1.3 million square feet of term plans for future growth. University (OHSU) leads the way Portland metro region and serves office space and parking for 3,300 in government-funded healthcare 11.8 million members nationally. vehicles. Construction on the final — and secures numerous grants Kaiser is headquartered in parts of this expansion will wrap up for the advancement of health Oakland, California. in 2019. 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 6,780 area employees from outside the Portland MSA. With nearly 50,000 students, Portland Public Schools is Oregon’s largest district. Portland is 17,543 area employees currently in the midst of a massive 12,955 area employees voter-approved high school and Providence is a non-profit middle school reconstruction and network of hospitals, health Legacy is a locally-owned modernization program. plans, physicians, clinics and nonprofit based in Portland, related services. It operates in Oregon. It is the only health In 2017 voters approved $790 Alaska, Washington, Oregon, system covering the Portland/ million in taxes to rebuild one Montana and California. It was 5,200 Oregon employees Vancouver area south to Salem middle school and three high originally founded by the Sisters Fred Meyer offers one-stop with multiple hospitals and a schools. The bond was in addition of Providence in Montreal Quebec shopping at 133 multi-department hospital dedicated to exclusively to a $480 million bond in 2012 for in 1843. stores in four western states. serving children. a similar program.

14 HFO INVESTMENT REAL ESTATE JOB GROWTH BY INDUSTRY MSA PORTLAND According to the State of Oregon Employment Department, the Portland Metro region created jobs at the rate of 1.6% in 2018. Portland ranks 16th among the 50 largest metropolitan areas in the United States.

Among the influx of companies to the Portland metropolitan area—including many who have transplanted their world, North American or U.S. headquarters here—are Adidas, Daimler Trucks, KinderCare and Keen.

Other significant companied in the close-in Portland metro area include Umpqua Holdings, Weiden+Kennedy, NW Natural, PacifiCorp, PGE, New Seasons, Storables, McMenamins, McCormick & Schmick’s, Franz Bakery, Portland Brewing, Powell’s Books, ZGF Architects, and two major West Coast law firms: Stoel Rives and Schwabe, Williamson & Wyatt.

Full time employment increased 1.8% between March 2018 – March2019, an increase of 21,800 positions. Following is a list of net job growth by industry March 2018–2019:

4,500 Manufacturing Construction, 2,800 Mining, Logging Leisure & Education & 2,500 6,100 Health Services Trade, Transportation Hospitality 3,200 & Utilities Healthcare & Social 2,000 Assistance

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 15 RENT COMPARABLES CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

SE Brooklyn St

Properties SE Tibbetts St SE 43rd Ave Creston Villa 3608 SE 40th Avenue SE Kelly St Portland, OR

Cedar Flats SE Franklin St SE 36th Ave SE 38th Ave 3741 SE 40th Avenue Portland, OR

Gladstone Gardens SE 33rd Ave 3937 SE Gladstone Street SE Rhine St SE Powell Blvd Portland, OR Waverly Arms 26 Creston Villa Apartments Hudson Court Apartments 4125 SE Cesar Chavez Boulevard

Portland, OR The Oak Tree SE 42nd Ave Creston Park Maplewood Court Cedar Flats

4030 SE Gladstone Street Shady Glenn Apartments César Chávez E. Blvd Portland, OR Ravenbourne SE Frances St Ravenbourne 3685 SE Francis Street Portland, OR SE Center St Shady Glenn Apartments 3710 SE 36th Place Gladstone Gardens SE Gladston St Portland, OR Maplewood Court The Oak Tree Hudson Court Apartments

SE 37th Ave SE Boise St 3615 SE 40th Avenue Portland, OR SE Cora St Waverly Arms 3725 SE Rhine Street SE Mall St Portland, OR Kenilworth Park SE Holgate Blvd

16 HFO INVESTMENT REAL ESTATE RENT COMPARABLES CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

S 1

CRESTON VILLA WAVERLY ARMS 3608 SE 40th Avenue, Portland, OR 3725 SE Rhine Street, Portland, OR Total Units: 44 Avg SF: 708 Total Units: 26 Avg SF: 746 Year Built: 1969 Avg Rent: $1,122 Year Built: 1964 Avg Rent: $1,083 Avg Rent/SF: $1.59 Avg Rent/SF: $1.45 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft 1 Bedroom / 1 Bathroom 3 384 $955 $2.49 Studio 9 600 $1,003 $1.67 1 Bedroom / 1 Bathroom 10 626 $963 $1.54 1 Bed / 1 Bath 12 750 $1,033 $1.38 2 Bedroom / 1 Bathroom 29 776 $1,177 $1.52 2 Bed / 1 Bath 5 1,000 $1,349 $1.35 3 Bedroom / 1 Bathroom 1 950 $1,525 $1.61 Average 26 746 $1,083 $1.45 3 Bedroom / 1.5 Bathroom 1 1,125 $1,260 $1.12 Average 44 727 $1,123 $1.54

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 17 RENT COMPARABLES CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

2 3

THE OAK TREE CEDAR FLATS 3615 SE 40th Avenue, Portland, OR 3741 SE 40th Avenue, Portland, OR Total Units: 22 Avg SF: 725 Total Units: 47 Avg SF: 888 Year Built: 1961 Avg Rent: $1,112 Year Built: 1972 Avg Rent: $1,253 Avg Rent/SF: $1.53 Avg Rent/SF: $1.41 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft 1 Bed / 1 Bath 10 670 $970 $1.45 Studio 2 550 $798 $1.45 2 Bed / 1 Bath 12 770 $1,230 $1.60 1 Bed / 1 Bath 5 775 $978 $1.26 Average 22 725 $1,112 $1.53 2 Bed / 1 Bath 40 919 $1,311 $1.43 Average 47 888 $1,253 $1.41

18 HFO INVESTMENT REAL ESTATE RENT COMPARABLES CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

4 5

SHADY GLENN APARTMENTS RAVENBOURNE 3710 SE 36th Place, Portland, OR 3685 SE Francis Street, Portland, OR Total Units: 31 Avg SF: 680 Total Units: 37 Avg SF: 1,097 Year Built: 1978 Avg Rent: $696 Year Built: 1973 Avg Rent: $1,085 Avg Rent/SF: $1.02 Avg Rent/SF: $0.99 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft 1 Bed / 1 Bath 16 533 $561 $1.05 2 Bed / 1 Bath 19 1,000 $931 $0.93 2 Bed / 1 Bath 15 837 $841 $1.00 3 Bed / 1 Bath 18 1,200 $1,248 $1.04 Average 31 680 $696 $1.02 Average 37 1097 $1,085 $0.99

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 19 RENT COMPARABLES CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

6 7

GLADSTONE GARDENS HUDSON COURT APARTMENTS 3937 SE Gladstone Street, Portland, OR 4125 SE Cesar Chavez Boulevard, Portland, OR Total Units: 25 Avg SF: 783 Total Units: 35 Avg SF: 719 Year Built: 1960 Avg Rent: $1,301 Year Built: 1969 Avg Rent: $1,001 Avg Rent/SF: $1.66 Avg Rent/SF: $1.39 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft 1 Bed / 1 Bath 2 725 $1,258 $1.74 1 Bed / 1 Bath 11 650 $1,094 $1.68 2 Bed / 1 Bath 23 788 $1,305 $1.66 2 Bed / 1 Bath 24 750 $958 $1.28 Average 25 783 $1,301 $1.66 Average 35 719 $1,001 $1.39

20 HFO INVESTMENT REAL ESTATE RENT COMPARABLES CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

8

MAPLEWOOD COURT 4030 SE Gladstone Street, Portland, OR Total Units: 20 Avg SF: 793 Year Built: 1971 Avg Rent: $1,091 Avg Rent/SF: $1.38 Unit type Units Sq Ft Rent Rent/Sq Ft 1 Bed / 1 Bath 10 750 $988 $1.32 2 Bed / 1 Bath 10 836 $1,195 $1.43 Average 20 793 $1,091 $1.38

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 21 RENT COMPARABLES CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

ONE-BEDROOM FLOOR PLANS

$1,200

$1,000 $1,094 $1,033 $988 $959 $970 $978 $800

$600

Average Rent – Average Sq Ft – Average Rent Average $400

$200

$0 Creston Villa The Oak Tree Cedar Flats Maplewood Waverly Arms Hudson Court Court Apartments

Average Rent Average Unit Size (Sq Ft)

22 HFO INVESTMENT REAL ESTATE RENT COMPARABLES CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

TWO-BEDROOM FLOOR PLANS

$1,600

$1,400

$1,349 $1,200 $1,300 $1,230 $1,177 $1,195 $1,000

$958 $800 $931

$600 Average Rent – Average Sq Ft – Average Rent Average

$400

$200

$0 Ravenbourne Hudson Court Creston Villa Maplewood The Oak Tree Cedar Flats Waverly Arms Apartments Court

Average Rent Average Unit Size (Sq Ft)

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 23 HISTORICAL OPERATIONS CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

Income December 2018 TTM July 2019 TTM Scheduled Gross Rent $554,355 $579,536 Less: Vacancy/Credit Loss -$29,086 -5.2% -$24,657 -4.3% Less: Concessions -$4,080 -0.7% -$120 0.0% Less: Bad Debt/Recovery -$1,653 -0.3% -$65 0.0% Net Rental Income $519,536 $554,694 Other Income $38,566 $42,443 Includes: Laundry $7,823 $7,104 Includes: Utility Billing (RUBs) $21,845 51.6% $23,840 56.3% Includes: Miscellaneous $8,897 $11,498 Gross Operating Income $558,102 $597,137 Expenses December 2018 TTM % GOI December 2018 TTM % GOI Real Estate Taxes $51,967 $51,967 Insurance $6,806 $6,806 Total Utilities $46,888 $46,888 Administrative $10,797 $10,797 Fee Management $25,155 4.5% $25,155 4.2% Asset Management $5,590 1.0% $5,590 0.9% Onsite Payroll $52,796 9.5% $52,796 8.8% Landscaping $8,290 $8,290 Maintenance/Repairs $47,435 $47,435 Turnover $11,429 $11,429 Reserves $11,000 $11,000 Total Expenses -$278,154 -$278,154 Expenses per Unit -$6,322 -$6,322 % of Gross Operating Income 49.8% 46.6% Net Operating Income (NOI) $279,948 $318,983

24 HFO INVESTMENT REAL ESTATE PROJECTED OPERATIONS CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

Income Scheduled Rents of as 07/2019 Projected Operations Note Scheduled Gross Rent $592,990 $13,477 $646,942 $14,703 1 Less: Vacancy/Credit Loss -$29,649 -$674 -5.0% -$32,347 -$735 -5.0% 2 Less: Concessions $0 $0 0.0% $0 $0 0.0% Less: Bad Debt/Recovery $0 $0 0.0% $0 $0 0.0% Net Rental Income $563,340 $12,803 $614,595 $13,968 Other Income $42,443 $965 $42,443 $965 3 Includes: Laundry $7,104 $161 $7,104 $161 Includes: Utility Billing (RUBs) $23,840 $542 56.3% $23,840 $542 56.3% Includes: Miscellaneous $11,498 $261 $11,498 $261 Gross Operating Income $605,783 $13,768 $657,038 $14,933 Expenses Projected Operations Per Unit % GOI Projected Operations Per Unit % GOI Real Estate Taxes $53,449 $1,215 8.8% $53,449 $1,215 8.1% 4 Insurance $6,806 $155 1.1% $6,806 $155 1.0% Total Utilities $46,888 $1,066 7.7% $46,888 $1,066 7.1% Administrative $10,797 $245 1.8% $10,797 $245 1.6% Fee Management $21,202 $482 3.5% $22,996 $523 3.5% 5 Asset Management $0 $0 0.0% $0 $0 0.0% 6 Onsite Payroll $52,796 $1,200 8.7% $52,796 $1,200 8.0% Landscaping $8,290 $188 1.4% $8,290 $188 1.3% Maintenance/Repairs $21,328 $485 3.5% $21,328 $485 3.2% 7 Turnover $8,580 $195 1.4% $8,580 $195 1.3% 8 Reserves $11,000 $250 1.8% $11,000 $250 1.7% 9 Total Expenses -$241,137 -$242,930 Expenses per Unit -$5,480 -$5,521 % of Gross Operating Income 39.8% 37.0% Net Operating Income (NOI) $364,647 $414,107

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 25 OPERATIONS ANALYSIS CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 1. RENTS Creston Villa Apartments’ current rents average $1,123 per unit or $1.54 per sq ft based on a rent roll dated July 2019. Rents have shown a positive trend. The current scheduled rents are nearly $75 per unit higher than 2018 averages.

Projected rents are based on new leases and 3% increases to specific floor plans which have had limited turnover. The market rates are projected at $1,225 per unit or $1.68 per sq ft. 2. VACANCY Operations have been adjusted for a 5.0% vacancy rate based on lender underwriting requirements. Lenders consider the long-term nature of a property and the market in which it is located. Lenders typically underwrite to 5.0% vacancy in the Portland metro area. The vacancy rate includes both concessions and bad debt. 3. OTHER INCOME Creston Villa Apartments generated $42,443 in Other Income based on July 2019 TTM collections, and the projected operations include this income.

RENT ROLL ANALYSIS: SCHEDULED RENTS Lowest Achieved Highest Achieved Average Scheduled Average Scheduled Unit Type Unit Count Square Feet Rent Rent % Diff Rent Rent per Sq Ft 1 Bedroom / 1 Bathroom 3 384 $905 $1,030 13.8% $955 $2.49 1 Bedroom / 1 Bathroom 10 626 $825 $1,080 30.9% $963 $1.54 2 Bedroom / 1 Bathroom 29 776 $1,000 $1,350 35.0% $1,177 $1.52 3 Bedroom / 1 Bathroom 1 950 $1,525 $1,525 0.0% $1,525 $1.61 3 Bedroom / 1.5 Bathroom 1 1,125 $1,260 $1,260 0.0% $1,260 $1.12 Totals / Averages 44 727 $1,103 $1,249 15.9% $1,123 $1.54

RENT ROLL ANALYSIS: MARKET RENTS Average Scheduled Average Scheduled Average Market Unit Type Unit Count Square Feet Average Market % Change Rent Rent per Sq Ft Rent Rent per Sq Ft 1 Bedroom / 1 Bathroom 3 384 $955 $2.49 $1,060 $2.76 9.9% 1 Bedroom / 1 Bathroom 10 626 $963 $1.54 $1,115 $1.78 13.7% 2 Bedroom / 1 Bathroom 29 776 $1,177 $1.52 $1,258 $1.62 6.4% 3 Bedroom / 1 Bathroom 1 950 $1,525 $1.61 $1,525 $1.61 0.0% 3 Bedroom / 1.5 Bathroom 1 1,125 $1,260 $1.12 $1,570 $1.40 19.7% Totals / Averages 44 727 $1,123 $1.54 $1,225 $1.68 8.3%

26 HFO INVESTMENT REAL ESTATE OPERATIONS ANALYSIS CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

RENT RANGES BY UNIT TYPE $1,400

$1,300

$1,200

$1,100

$1,000 Scheduled Rent $900

$800

$700 1 bed – 1 bath 1 bed – 1 bath 2 bed – 1 bath

Minimum Rent Average Rent Maximum Rent

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 27 OPERATIONS ANALYSIS CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

RENT TRENDS $1,125 -4.50% $1,123 $1,120 $1,121 -4.00%

$1,115 -3.50%

$1,110 $1,112 -3.00%

$1,105 -2.50% Vacancy $1,100 -2.00% Average Lease Rent Lease Average $1,095 $1,098 -1.50%

$1,090 -1.00%

$1,085 -0.50%

$1,080 0.00% July 2019 TTM July 2019 July 2019 Scheduled Rents T6-Months Annualized T3-Months Annualized

28 HFO INVESTMENT REAL ESTATE OPERATIONS ANALYSIS CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

HISTORICAL INCOME TRENDS $50,000 102.0%

$49,500 100.0% $49,000 98.0% $48,500 96.0% $48,000

$47,500 94.0% Occupancy Scheduled Rent $47,000 92.0% $46,500 90.0% $46,000 88.0% $45,500

$45,000 86.0% Aug 2018 Sep 2018 Oct 2018 Nov 2018 Dec 2018 Jan 2019 Feb 2019 Mar 2019 Apr 2019 May 2019 Jun 2019 Jul 2019 Scheduled Rent Occupancy

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 29 OPERATIONS ANALYSIS CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR EXPENSES Creston Villa Apartments’ expenses are based on December 2018 YE operations, which represent a full year’s operations. 4. PROPERTY TAXES Oregon’s property taxes are evaluated on a fiscal year starting TAX HISTORY July 1. Property tax values for the 2018-2019 tax year were Tax Year published October 15. Projected operations include current 2017/2018 2018/2019 taxes for the 2018-2019 property tax year. Account # R0624890 $51,227 $53,449 Creston Villa Apartments’ taxes increased 4.16% over 2017- 2018. In Oregon, property taxes are not reassessed on sale Total $51,227 $53,449 and are limited to a 3.0% annual increase at the state level. % Change 8.48% 4.16% Property taxes paid by November 1 each year receive a 3.0% discount. Oregon’s tax years starts July 1 and anticipation of the pending tax year; net property taxes are used in the projected operations. 5. MANAGEMENT FEE The management fee has been adjusted to a market rate of 3.5% of gross operating income (GOI). 6. ASSET MANAGEMENT FEE The operations include an asset management fee that totals $5,590 annually. The asset management fee is applicable to the current owner and, therefore, removed from projected operations. 7. MAINTENANCE/REPAIR The maintenance repair costs totaled $47,435, or $1,078 per unit for December 2018 YE operations. The operations have been adjusted for capital costs and represent market-rate costs for supplies only. 8. TURNOVER Per move-in dates on the July 2019 rent roll, approximately 10 units turned over in 2018, a turnover rate of 23%. The turnover costs for December 2018 YE operations totaled $11,429, or $260 per unit. This expense equates to a cost of $1,143 per turned unit. The turnover cost may include one-time, capital expenditures. The projected operations have been adjusted to reflect costs for make-ready processes only and not to include any capital costs. 9. 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, a total of $11,000 annually.

30 HFO INVESTMENT REAL ESTATE OFFER TERMS CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR

PRICE SUMMARY QUESTIONS & TOUR REQUESTS: Price $7,150,000 Please do not disturb tenants. Per Unit $162,500 All tours and inquiries regarding Creston Villa Per Sq Ft $223 Apartments are to be directed to HFO Investment Cap Rate 5.10% Real Estate at (503) 241.5541. Avg Square Foot 727 Rob Marton • [email protected] Avg Rent $1,123 Greg Frick • [email protected] Avg Rent per Sq Ft $1.54 Jack Stephens • [email protected]

Lee Fehrenbacher • [email protected] ASSET SUMMARY Todd Tully • [email protected] Property Creston Villa Apartments Adam Smith • [email protected] Location 3608 SE 40th Avenue Khari Gates • [email protected] City, State Portland, OR 97202 Rand Hoffman • [email protected] County Multnomah Year Built 1969 Investment Real Estate 2424 SE 11th Avenue • Portland, Oregon 97214 Total Units 44 www.hfore.com • (503) 241.5541 • Fax: (503) 241.5548 Approx NR Sq Ft 32,002 Brokers licensed in the States of Oregon Avg Unit Size 727 and Washington. Acreage 0.99

CRESTON VILLA APARTMENTS • 44 UNITS • PORTLAND, OR 31 HFO Investment Real Estate Passion • Collaboration • Specialization

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

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.