YOUR GUIDE TO

INVESTING IN

2020 EDITION INCLUDES MARK BARRY REPORT

Nick Krautter City & State Real Estate SellPDX Team Principal Broker in Oregon 35 NE Weidler Portland, 503-901-8100 Oregon 97232 [email protected] INVESTING IN REAL ESTATE P a g e | 1

Unique Benefits of Real Estate ...... Page 2

Positive Leverage ...... Page 3

Your Real Estate Team ...... Page 4 Distressed ...... Page 6 Investment Case Study and APOD ...... Page 7 Appendices ...... Page 13 Mark Barry Apartment Report ...... 13

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] INVESTING IN REAL ESTATE P a g e | 2

1. Leverage: You can use debt to acquire larger properties and increase your cash-on-cash return in properties with positive leverage. [I’ll explain these terms in detail later in the report]. Residential: Up to 97%-100% if owner occupied, 80% if investment Commercial: Up to 90% LTV owner occupied 75%-80% if investment : Up to 80% LTV

2. Insurance: If it burns down you can rebuild it, often with income replacement for investment while re-building.

3. Depreciation: You can depreciate the value of the building over the course of 27.5 years for residential and 39 years for commercial. This helps shield income from taxes. Using cost segregation, you can sometimes accelerate the depreciation.

4. Income: You can rent the property and collect income and this happens regardless of shifts in the market and property values.

5. Tax Deferral: Using a 1031 exchange you can defer taxes when trading like-kind properties. “Like-kind” simply means real estate in the USA held for business or investment purposes.

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] INVESTING IN REAL ESTATE P a g e | 3

One of the main reasons to use debt is to create positive leverage. Positive leverage exists when the cost of money [your interest rate on your loan] is lower than the return on your investment. This is also known as a “cash-on-cash” return. Your cash-on-cash return is calculated by dividing the net income after debt service by the actual cash investment [ex. Down payment].

Example: You buy a $500,000 apartment with a 6% return.

Scenario #1: Pay Cash: Your cash-on-cash return is the same as the return on investment, 6%. $500,000 invested, $30,000 annual income = 6%

In scenarios #2 and #3, the interest rate on a loan is 4% with a 30 year term.

Scenario #2: 50% Down: Cash-on-cash return goes to 8% $250,000 invested, $20,000 annual income = 8%

Scenario #3: 25% Down: Cash-on-cash return goes to 12% $125,000 invested, $15,000 annual income = 12% As you can see, using positive leverage in this current real world scenario can take a 6% return and double it a 12% return.

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] INVESTING IN REAL ESTATE P a g e | 4

Real Estate Broker: A good broker should be the main point of contact in your team. They need to know market trends and have a solid understanding of the continual changes in contracts, lending, disclosures, and types of inspections. When selling, your agent should have a good and current track record of success and use the latest tools and technology. To market my listings, I use HD video tours, a professional photographer and a listing syndicator which ensures that my listings are on nearly every website that deals in real estate. A good broker will help you sell quicker and identify good deals when buying. Real estate brokers charge a commission when selling but typically there is no fee when you buy a property.

Lender: If you want to use leverage you need a lender or banker that can give you access to all the different lending programs. The speed at which these loan programs change is unbelievable so it is imperative that your lender be up to date on a weekly basis. Lenders charge “points” which is a percentage of the loan amount.

Real Estate Attorney: A good attorney can help with contracts but also with the more difficult issues like easements, partnerships, LLC agreements, , tenants in common and more. The more complicated and larger the deals get the more you’ll need a great attorney. Attorneys are paid hourly, typically $300-$500 an hour, unless they are on a retainer.

CPA: Since there are huge tax benefits to owning real estate having a CPA (Certified Public Accountant) that can help you take advantage of all of them will increase your return on investment. CPA’s typically charge a flat fee or hourly rate.

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] INVESTING IN REAL ESTATE P a g e | 5

Title and Escrow Company: These companies insure title to real estate and offer escrow services. In some states title and escrow/ are separate or done by attorney’s. Escrow services typically charge a flat fee and insurance is based on the value of the property that is being insured.

Property Management: Many investors love the idea of real estate but don’t want to deal with calls from tenants and leasing up properties. This is where a can take a lot of the headaches out of owning real estate. Managers typically get paid a percentage, 5%-10% for long term and 20%-30% for vacation rentals, of the gross rents to screen tenants and manage the property.

Contractor: If you plan to buy a value add property you will need a good contractor to give you a realistic expectation on how much money and time it will take to get the property rentable. This knowledge is essential if you want to compare a fixer to a well maintained investment.

Inspector: You’re going to need a couple different inspectors when you buy a property. The main inspector is the home inspector who looks are the structure and systems and the fire/life safety of a home. You will also likely need environmental inspectors for things like lead based paint, radon gas, and underground oil tanks. If there are some more specific issues with a property you might be talking with a HVAC (heating and cooling) company, electricians, plumbers, or roofers.

Architect: If you want to build a new home or do a sizable renovation or addition you’ll need an architect. Architects draw up plans of what you have (as-builts) and then create the plans of what you’re going to build. The builder and city will need the plans for permits and to know what to build.

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] INVESTING IN REAL ESTATE P a g e | 6

While the distressed property market is smaller as a percentage of available property it can still be a great way to invest. Right now in Portland the distressed market is around 5% of all property sold. But what do distressed properties really mean to you as an investor?

REO (aka) Bank Owned: 1. Condition: Many REO ( by a bank) properties are in pretty rough shape. They almost always have the water and heat turned off so do not expect a warm fuzzy feeling when looking at an REO. These might also have fixtures and appliances missing so factor that into what you are willing to spend. 2. Disclosure: Banks are exempt from giving the buyer a property disclosure. Make sure you get a thorough inspection of the property. 3. Shorter inspections and higher costs: To inspect a home you need the utilities on and that cost is passed on to the buyer with most REOs. 4. Financing: Some banks offer financing deals on REOs but many don’t treat these any differently. If you are using a loan make sure there are not broken windows or holes in walls – this will cause problems with an appraisal unless you are getting a rehab loan or paying cash. 5. Look at all properties: Just because it says REO does not mean it is the best deal – look at all available properties before making a decision.

Short Sales: A short sale is where a lender agrees to let a seller sell their home for less than what is owed on the property. That is the basic idea but the reality is much more complicated and the process often takes quite a bit longer than a traditional 30 day close. Expect 30-120 days for a response from the lender and accept that many short sales end up in even if they receive offers. Patience is the name of the game. Many banks also try to put restrictions on what you can do with the property once you own it, so make sure to carefully review all contracts.

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] INVESTING IN REAL ESTATE P a g e | 7

To illustrate the value of investing in real estate I’m going to share a story of a triplex I own in North Portland. I’m also including the actual APOD. Please note that the APOD is from 2012 and I have since increased rents and repairs and taxes are now lower. I will also include the 2019 APOD to show the difference in value and income. I bought this property from a bank at the bottom of the market for $235,000 with broken windows, graffiti, and more! I expected it to cost $25,000 to repair, but the costs added up closer to $60,000. Work was completed right before Thanksgiving, and the up took three months with rents being lower than expected due to the slowness of the season. Even though it cost more to repair, took longer to get ready, and rented for less than expected it still made money. Currently after all expenses are paid it makes about $1,400 a month net. I have a $198,000 loan at 4.25% so I have an actual investment of roughly $90,000 in the property, which appraised for $286,000 in 2012, and is worth around $625,000 as of 2019. I am projecting this property will yield 9.1% per year which is hard to beat when considering the tax advantages of real estate. In 30 years if property keeps appreciating at 3% a year this triplex will be worth $728,000. The tenants will also have paid off the loan completely by that point. $17,000 a year in net rents will be a total of $510,000 in 30 years assuming expenses go up at the same rate as rents but in reality rents will likely outpace expenses. My water bill and insurance have gone up, but rent increases have offset the cost which is maintaining the same net income. In 30 years my $90,000 investment will yield $1,238,000 which is 9.1% compounding. This also assumes I don’t reinvest any of the $510,000 in rental income which will be enough to buy another property in 8 years, and again 10 years after that.

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] INVESTING IN REAL ESTATE P a g e | 8

Example APOD (Annual Property Operating Data)

2013 APOD

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] INVESTING IN REAL ESTATE P a g e | 9

2016 APOD

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] INVESTING IN REAL ESTATE P a g e | 10

How to use an APOD: Now all these numbers are great right? But what the heck does it all mean? Often Realtors and investors will banter around these numbers without really knowing what they truly mean and how they affect the value of an investment property. The simplest metric to use is a gross rent multiplier, which is simply how many times the annual gross rent goes into the purchase price of a property. The lower the GRM the better it is for the buyer, and the higher it is the better it is for the seller. The problem with gross rent multipliers is that they don’t take into account the expenses of a property. The most commonly used metric for comparing investment properties is a CAP rate, or . A cap rate is more accurate because it accounts for all of the expenses excluding debt service, or your loan payment. Cap rates are expressed as percentages, and are calculated by dividing the net operating income of a property into the purchase price. An even more accurate measurement of an investment on a property is the cash-on-cash return. To calculate the cash-on-cash return you take the after debt service net income divided into the amount of cash that you invested which is your down payment and any other closing costs or rehab costs that were not financed.

Soft vs. hard costs: Hard costs are absolute and you will incur them whether the property is vacant or fully occupied. Soft costs are things like vacancy or management costs, which go up and down based on your market and the local cost of doing business. The debate between buyers and sellers over soft costs explains a lot of why people often disagree over accuracy on APODs.

Purchase price: The purchase price is actually your purchase price plus all of the costs to close that which might include loan fees or any rehab costs to get the property up and running.

Potential rental income: Potential rental income is the theoretical annual amount you would get in rent if there were no vacancies.

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] INVESTING IN REAL ESTATE P a g e | 11

Vacancy: Vacancy is a soft number which means that it is the market average for that property type. You can calculate effective rental income by taking the potential rental income and subtracting the vacancy cost.

Gross operating income: If you have other income such as laundry, parking, or storage units you would add it in here, and the sum of your effective rental income plus other income equals your gross operating income.

Operating expenses: There are two types of operating expenses. One is soft costs which are variable, and the other is hard costs which are fixed, such as your property taxes. Your major expenses are typically going to be taxes, , repairs, maintenance, and utilities. Keep in mind that all of these expenses and everything else on an APOD is annualized which means that if your water bill is $200 a month and you want to include it as an expense, you would put it down as $2,400 per year.

NOI (net operating income): To get your net operating income take your gross operating income and subtract all of your operating expenses.

CFBT (cashflow before taxes): To calculate your cash flow before taxes, take your net operating income and take out your annual debt service. Make sure you're not double-counting your insurance and property taxes as those are considered operating expenses and your debt service is your interest payment and your principal reduction payment.

CAP Rate (capitalization rate): To calculate your cap rate divide your net operating income into your purchase price. Make sure that if you buy a value-add property also known as a fixer that you include your repair costs into your purchase price to get an accurate number.

Cash-on-cash: To figure your cash-on-cash return take your cash flow before taxes and divide that into your down payment. You should also

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] INVESTING IN REAL ESTATE P a g e | 12

include in your down payment figure any repairs or maintenance you performed before putting the property in service.

GRM (gross rent multiplier): To calculate your gross rent multiplier divide the purchase price by the potential rental income. The lower this number the better return for the buyer and the higher this number of the better a sales price for a seller.

Down payment: The down payment includes your actual down payment, any loan costs, and any other costs to close. I also suggest that you add any initial rehab costs to this figure to get an accurate cash-on-cash return.

Loan amount: The loan amount is the total amount of money financed into the purchase the property or refinanced out.

Interest rate: The interest rate is the rate of interest charged on the loan on the property.

Term: The term is figured in years and is needed to figure out how much the payments will be per month. The longer the term typically the lower the monthly payment. With commercial loans you might have a 20 to 30 year term, but have a call with the loan balance due in five, seven, or ten years. If that's the case it would mean you would need to refinance or pay off the loan balance at that time.

Monthly rents: If the property is already rented you want to use the actual monthly rents from the building. If the property is vacant or the rents are well below market, you want to use a projection of what the monthly rent will be in order to arrive at what a market return will be on the property.

Nick Krautter 35 NE Weidler, Portland OR 97232 Principal Broker in Oregon (503) 901-8100 Sellpdx Team at City & State Real Estate [email protected] Summer 2019 The Barry Apartment Report

The Barry Apartment Report is a publication covering economic, financial, and valuation trends impacting apartments in the Portland, Oregon metropolitan area.

2019 Mid Year Update: Stable Fundamentals, but …...Some Slowdown The location of apartment construction Current Portland This issue of the Barry Apartment during this current cycle represents a Report is based on a recent speech major shift from past cycles. From Metro Trends 1990 to 2006, 39 percent of all given by Mark D. Barry, MAI  Unemployment: 3.8% construction occurred in Multnomah and Patrick O. Barry, Certified County. However since 2007, this  Job Growth: 2.6% General Appraiser. figure is closer to 60 percent.

 Population Growth: 0.9%, or YTD 2019 has seen some There has been an obvious decline in 42nd out of 100 US metro shift and transition in the permit applications since the areas Portland area apartment 3/2019 Sale—$240,000 Unit implementation of IZ, and the number  Portland-Salem CPI: 3.3% market. Vacancies have 30 Unit 30th & K Apartments of affordable units produced under IZ crept up, rents are flattening 3011 NE Killingsworth St, Portland has lagged behind expectations. The  Apartment Construction: out, and permits are down. City of Portland is reportedly Permits for around 7,500 Despite declining interest Apartment Construction: considering changes to this policy. units issued in 2018, or down rates and solid job growth, After a surge in permits prior to the 27% from 2017. apartment sales volume is implementation of Inclusionary Apartment Vacancies and Rental way off, and the political (IZ), permits dropped Rates: The Spring 2019 Multifamily  Apartment Sales: Just 90 climate in the city of significantly in 2018. Permits were Northwest Apartment Report (MFNW) sales through June 2019 vs. Portland appears to be issued for approximately 7,500 shows a 5.0% vacancy factor vs. 4.4% 230 sales in 2018 impacting investor interest. units. This is down 26 percent from in Fall of 2018. Just four of the 20  Apartment Sales Volume: 2018, but it was one of the top 10 submarkets covered showed $750 million through June Portland Economy: Most busiest years ever for Portland vacancies below 4%, and vacancies 2019 vs. $2.3 billion in 2018. economists agree that Metro apartment construction. The are above 5% in six submarkets. The Portland is at full employment. current cycle of apartment highest vacancies are in the areas of  Apartment Values: Stable as the economy reaches a construction rivals previous peaks highest construction. Inner/Central SE and firm, except for new units, record expansion of ten years seen in the early 1970’s and late Portland, Downtown, and NW Portland, since the Great Recession The 1990’s.  Apartment Income: Up 1% to show vacancies of 5.4%, 6.4%, and Portland Metro added 20,600 3% in YTD 2019 7.9%, respectively. jobs in 2018. This was the Around 70% of the permits for new  Apartment Vacancies: 5.0% slowest year of growth since units were issued in Multnomah Apartment Expenses: Most 2013. However, year over year County alone. Clark County saw expenses remained in check. Property job growth as of May 2019 is 16% of total units, while Washing- taxes were up a manageable 3% to 30,000. Unemployment is ton and Clackamas County account 4%. In addition, maintenance and 3.8%. for 8% and 7% of construction, repair costs have increased due to a respectively. shortage of labor and strong growth in the construction industry. Some managers/owners with a large geographic footprint are playing with the idea of “self-showing” units, which is done with a combination of lockboxes and pre-registering online. 11/18 Sale– $163,889 Unit However, as vacancies rise, some 18 Unit Apartment advertising and tenant retention 1684 8th Ave, West Linn expenses are making a comeback. And administrative costs are expected to increase based on increased regulations. Inside this issue: Apartment Values: Apartment YTD 2019 Update & 1—3 investors in Portland have been the Forecast biggest winners in the economic expansion, with values doubling in the Turn Back the Clock 4 last eight years. However, if one takes all of the metro area apartment sales Page 2 The Barry Apartment Report

The threshold to enter the market has ratio has increased since 2016 and will seen substantial increases in recent likely continue. A 1.0% increase in the years. There have been just two YTD 2019 home ownership ratio means 9,000 fewer sales at less than $100,000 per unit. households are potential renters.

Apartment Construction: Coming off 2017 and 2018, which were two of the five busiest years ever for apartment construc- tion, a drop in construction in 2019 wouldn’t be a big surprise. Pre-IZ projects still remain, though they are few and far between. Based on the YTD 2019 permits , for the last 18 months, the median price we are on track for around 8,700 units in per Sq. Ft. has declined by around 4.5% 2019. Portland may experience a boost for YTD 2019 vs. 2018. This is felt to be from the tax advantaged Opportunity Zones, due to fewer sales of newer apartments, Apartment Sales Volume: Sales volume which exist in prime Portland locations. We and some softening of values for newer is down significantly for YTD 2019. There expect there will be permits for 14,000 to units. While apartment values appear to were around 230 sales transactions for 18,000 new units in 2019 and 2020. be flattening out, values vary widely $2.3 billion 2018 vs. just 90 sales for among different market segments. The $750 million through June 2019. While The City of Portland recently reported that sales market for new apartments has apartment sales volume has held steady the IZ program is under-producing softened in 2019 despite substantial in the suburban counties, the city of affordable units and some changes to the increases in construction costs. The Portland has seen apartment sales IZ program may be under consideration. sales price per unit for newer apart- volume fall by around 35% to 40%. Given the rising construction costs, flattening rents, softening of values for new Portland has been on the radar of apartments, some relief to the IZ program institutional buyers. In 2018 there were requirements would be a change welcomed 45 sales exceeding $10M+. However, by developers. there were just 16 such sales for YTD 2019. While the region as a whole may be underbuilding housing, there is concern 2019 UPDATE & FORECAST about overbuilding of apartments in the Our thoughts are as follows: short term. The rate of population growth is slowing. Our population growth in Economy: Economists are forecasting conjunction with employment growth has slower job growth in the years ahead. The been the major driver filling these new most recent State of Oregon employment units. ments built since 2010 is down around report forecasts job growth to be 2.1 8.5% in 2019 vs. 2018. While value percent for 2019 and 1.7 percent in Additional suburban construction is trends may vary from submarket to 2020. If you assumes that employment in expected as regulation and fees in Portland submarket, there are virtually no other the Portland area will grow consistent with have increased. In the coming years, we market segments that have shown a the State, the baseline forecast is for see a larger share of apartment construc- decline in values. The CoStar figures around 25,000 new wage and salary jobs tion shifting to the suburbs. show a 5.37% median cap rate for here in the Portland metropolitan area in 2018, vs. 5.55% for YTD 2019. NFN and 2019, and 21,000 new jobs in 2020. Apartment Vacancies and Rental Trion Properties have been the biggest However, with a tightening labor market Income: Despite all the new construction sellers for YTD 2019. and low unemployment, personal income across the metro, vacancies have remained growth is expected to increase around 5% within normal ranges. Vacancies have annually in the coming increased moderately in 2018 and YTD years.

Single Family: The single family housing market picked up steam in 2018. Forecasts call for increased housing starts through at least 2022. As the prime cohort of renters age, a transition to homeownership is likely. The Portland 11/2018 Sale—$132,500 Unit metro homeownership 24 Unit Franklin Apartments 5575 SW Franklin Ave, Beaverton Page 3 The Barry Apartment Report

of 2019, we expect a Risks: more balanced market Risks—Currently Occurring with tenants having a better negotiating  Apartment completions will peak in 2019 and permits remain high position, especially in new buildings. By the  Increasing home ownership and home end of 2019, we expect construction some submarkets will  Rent control. For now, the stigma see a shift in power to hurts more than the actual policy the renters, especially at  A shift in the political climate with a the high end. strong us vs. them mentality with tenants and property owners Apartment Values:  Aging cohort of prime renters that will Apartment values have slowly move toward home ownership flattened out YTD 2019.  Rapidly rising construction costs and There appears to be lower returns due to IZ some forces that are 2019. We expect a further increase in chipping away at values, that if considered by  Shortage of affordable housing vacancy rates, as 2019 will likely represent themselves, wouldn’t be a major concern. But  Slowing job and population growth peak completions of new units. Most when considered as a whole, values for new surveys show that vacancies rates are units have slipped. This is felt to be due to Risks—Potential currently between 4.5% and 5.5%, modest increases in vacancies, slower rent  If rent growth does not slow, rent depending on how new units are accounted growth, increasing labor costs, and increases control could be tightened (lower rent for. Permits were issued for over 7,300 in taxes, However, the recent decline in caps, lower exemption period for new units in 2018, and historical Portland interest rates have been an offsetting factor. construction, harsher penalty for metro area demand is around 4,500 to The sales for YTD 2019, are showing stable , etc.) 6,500 units. The current new supply is to moderately increasing values for pre 2000  Macroeconomic events (oil, trade built units in the suburban counties and the outpacing demand. We expect vacancies to wars, China, Middle East) city of Portland, Values are showing slight  Portland losing its “cool” factor approach 5.25% to 5.50% by the end of declines in new units There appears to be a 2019 and in early 2020. Localized gap between buyer and seller expectations.  Overall capitalization rate increases vacancies will continue in areas with high  Continued increase in expenses? rates of construction. Apartment Sales Volume: Institutional  Inverted yield curve, and after ten buyers have played a big part in our market. years of expansion…...a recession in A continued period of increased vacancies There were 45 sales surpassing $10M in 2020? will eventually lead to more reasonably 2018, but just 16 for YTD 2019. While priced units. The lower priced units at the Portland may have superior yields compared upper end will create downward pressure CONCLUSION: 2018 was a strong year for to other west coast cities, increased throughout the market. This is particularly the Portland apartment market, and we are regulation is giving some buyers second true for studio units, which have the seeing decent fundamentals in YTD 2019. thoughts. Through June 2019 Portland has highest vacancies. Concessions will Apartment values hit record highs in 2018, seen 85 sales transactions for around continue to be the norm on recently levels were stable, and rents $750M. We anticipate these figures completed units, upgraded vintage units, showed modest increases. However, there increasing the second half of 2019, with and units that become vacant over the are some clear signs that the market is sales volume in 2019 reaching $1.75 to winter. We expect modest rent increases flattening out, with some decline in values $2.0B and 175 to 225 apartment sale and most increases focused on B & C at newer units. transactions. grade apartments. We expect apartment In the balance of 2019 and in early 2020, income will be up by 1% to 3%. By the end Politics: Rent control across the state of we expect some increases in apartment Oregon and other regulatory rules (primarily vacancies up to 5.5%, a slowdown in rental Portland) have made some investors look to increases, flattening income, and the suburban counties, and other markets. uncertainty on how to deal with all of the Rent control has had a minimal impact on new regulations. Up to this point, these well-operated apartments. However, long indicators have had no apparent adverse term owners with rents well below market will impact on values except for newer units. In likely see a discount when they go to sell. The the balance of 2019 and into early 2020, major concerns are whether the State of the Portland apartment market is expected to remain stable, as we return to a more Oregon will start adjusting the dials of rent normal market. control if the rental market remains tight and how the stigma of rent control will impact investment/development. 3/19 Sale– $141,933/Unit 15 Unit Anchor Apartments 15340-15368 SE Stark Street, Portland The Barry Apartment Report

Patrick O. Barry & Mark D. Barry, MAI Barry & Associates Apartment Appraisal Specialists 1535 SW Clifton Street, Second Floor Portland, Oregon 97201 503-243-2925 (Mark) 971-275-5345 (Patrick) [email protected] [email protected] www.barryapartmentreport.com

Mark D. Barry & Patrick O. Barry Turn Back the Clock . . .

Portland Conversions

The first wave of condominium conversions begins in the mid- 1970’s. Between 1977 and 1982, nearly 3,900 apartment units were converted to condomini- 6/19 Sale—$175,574 Unit ums. By 1982-1983, the market 61 Unit Icon Apartments had dried up, and was dead. 14620 SW Farmington Rd, Beaverton

Some of these condominium conversions remain today, though many ended up returning We have transitioned most of our to rentals or as broken condo- market updates to electronic only. miniums with fractured owner- We send 2-3 emails a year with up- ship that remains. dates on the Portland apartment The conversion market would not market. You can subscribe or unsub- return again in the mid 2000’s. scribe on our website. While some conversions were successful, many were not and www.BarryApartmentReport.com the final results were similar to the 1980’s.