OFFERING MEMORANDUM CITY LINK 14 Units • Portland,

www.hfore.com • (503) 241.5541 2 HFO INVESTMENT REAL ESTATE OFFERING MEMORANDUM CITY LINK 4147 SE 37th Avenue • Portland, OR 97202

TABLE OF CONTENTS

I. Executive Summary 5

II. Location 11

III. Comparables 19

IV. Operations Analysis 27

V. Offer Terms 33

HFO INVESTMENT REAL ESTATE

Greg Frick Lee Fehrenbacher [email protected] [email protected] (971) 717.6332 (971) 717.6346

www.hfore.com • 503.241.5541

Licensed in the States of Oregon and Washington 4 HFO INVESTMENT REAL ESTATE INVESTMENT SUMMARY

CITY LINK 14 Units • Portland, Oregon INVESTMENT HIGHLIGHTS

Property Highlights CITY LINK • Close-In East Portland Location 4147 SE 37th Avenue • Portland, OR 97202 • Rent Upside + • Well Maintained Units 14 1972 /- 12,892 TOTAL UNITS YEAR BUILT APPROX. NR SQ FT • On-Site Parking + • Spaciously Sized Units 0.83 16.87 /- 921 LOT SIZE (ACRES) DENSITY (UNITS PER ACRE) AVG UNIT SIZE (SQ FT)

6 HFO INVESTMENT REAL ESTATE INVESTMENT SUMMARY OFFERING SUMMARY

City Link is a 14-unit apartment building on a picturesque tree-lined street in close-in ASSET SUMMARY southeast Portland. This well-maintained asset offers spacious two- and three-bedroom floor plans amongst green landscaping and off-street parking. The property recently Property City Link received new fiber cement siding and exterior paint, and select units feature updated Location 4147 SE 37th Avenue appliances, insulated windows, luxury vinyl tile flooring, newer countertops and cabinetry. Nearby neighborhood rent comparables demonstrate considerable room to City, State Portland, Oregon 97202 increase income at the property. Additionally, City Link sits on nearly an acre of land and County Multnomah the zoning could potentially allow for the construction of approximately four additional Year Built 1972 apartment units (interested parties should verify development options with the city). Total Units 14 Located just a few of blocks from the heart of the Richmond neighborhood, City Link is Zoning R2 within walking and biking distance to dozens of popular local restaurants and retailers. Whether grabbing drinks at the Gladstone Street Pub, or groceries at the nearby Safeway, Property Sq Ft 38,086 the property’s walkable location makes it a desirable destination for tenants. Situated Approximate Sq Ft 12,892 off SE Gladstone Street near Cesar Chavez Boulevard, the property also provides easy commuter access to downtown Portland and public transportation throughout the Average Unit Sq Ft 921 metro area. PRICING City Link’s desirable close-in location, well-maintained condition and below-market rental rates make it a rare opportunity for investors looking to add value to a quality asset Price $2,650,000 in the growing Portland metro area. Per Unit $189,286 Per Sq Ft $206 UNIT MIX Projected Cap Rate 5.30% Unit Type Unit Count Avg Sq Ft Total Sq Ft % of Total Units

2 Bedrooms / 1 Bath 2 710 1,420 14.3% Tours and Inquiries: 2 Bedrooms / 1 Bath 8 916 7,328 57.1% All tours and inquiries regarding the City Link are to be directed to HFO Investment Real 3 Bedrooms / 1 Bath 4 1,036 4,144 28.6% Estate at (503) 241.5541. Total / Averages 14 921 12,892 100.0%

Greg Frick Lee Fehrenbacher [email protected] [email protected] (971) 717.6332 (971) 717.6346

CITY LINK • 14 UNITS • PORTLAND, OR 7 8 HFO INVESTMENT REAL ESTATE CITY LINK • 14 UNITS • PORTLAND, OR 9 LOCATION

WASHINGTON

VANCOUVER

11 min COL UMBIA RIVER 8 min 2 min

Portland 5 International Airport Forest Park 99E OREGON

405 PORTLAND 84 HILLSBORO 26

205 26 GRESHAM 8 213 BEAVERTON 219 10 5

217 210 TIGARD 224 LAKE OSWEGO CITY LINK 212 CLACKAMAS

10 HFO INVESTMENT REAL ESTATE PORTLAND MARKET SNAPSHOT PORTLAND METRO AREA The Portland Metro Area is one of 4.95% 38.3% 3.8% the strongest apartment markets Metro-area vacancy Metro area renter- Unemployment rate occupied housing rate (June 2019) 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 $68,125 7.4% 48.2% Median household Year-over-year Portland residents age 25+ years new residents; approximately 65 income rent growth* (with a bachelor’s degree or higher) people move here per day. New 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

*Multifamily NW Apartment Report (October 2018-2019)

CITY LINK • 14 UNITS • PORTLAND, OR 11 NEED UPDATE

12 HFO INVESTMENT REAL ESTATE LOCATION

CITY LINK 14 Units • Portland, Oregon 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 César Chávez E. Blvd 205 Stumptown Coffee Roasters SE Division St Pok Pok Petite Provence 213 Fubonn Shopping Center

Powell Street Station SE Powell Blvd SE 26th Ave 26 SE 52th Ave Creston Park Century 16 SE 92nd Ave City Link 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

14 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 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 1 29 31 Powell Park 84 15 14 5 6 7 87 4 Creston Annex Head Start 30 33 16 17 18

34 SE 52nd Ave 79 80 SE Gladstone St 19 Creston Park SE Foster Rd 86 88 City Link 21 Creston Elementary School 20 23

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. Hapa PDX Ramen 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. Whiskey Soda Lounge 81. Burgerville 8. Rapid Cash 23. Coffee Beer 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. Bollywood Theater 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. Hopworks Urban Brewery 11. Path Twyman’s Car Center 26. Pho Hung 41. Good Coffee 55. Yataimura Maru 70. Pastini 85. Target / CVS Pharmacy 12. Starbucks 27. Thai BBQ 42. Landmark Saloon 56. Xico 71. New Seasons Market 86. C Bar 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

CITY LINK • 14 UNITS • PORTLAND, OR 15 PORTLAND REGION Oregon’s largest city, Portland, APARTMENT MARKET The Portland Metro Area consistently ranks among the nation’s lowest for apartment vacancy rates is near the confluence of the according to the U.S. Census Bureau and other third-party services like REIS, MPF Research, and Willamette and Columbia Rivers. Axiometrics. The U.S. Census Bureau pegged Portland’s Q3 2018 vacancy rate at 4.5% and the U.S. average at 7.1%. The Portland Metro Area consists The Multifamily NW Apartment Report survey proved average Spring 2018-19 year-over-year of four counties: Multnomah, rent growth at 7.7%. Washington, Clackamas, and SKILLED WORKFORCE & STRONG EMPLOYMENT Clark County, Washington. In 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. DIVERSIFIED ECONOMY Portland 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.

16 HFO INVESTMENT REAL ESTATE PORTLAND RANKINGS

Portland consistently receives glowing reviews and rankings from the media.

2019 lists include: No.4 No.7 No.7 Best City for an Active Lifestyle Healthiest Cities to Live Best Cheap Destinations in the U.S. – Wallethub – – Thrillist.com – – U.S. News and World Report –

No.8 No.8 No.9 Best Place to Live in the U.S. Fittest Cities in America Best Foodie Cities in the USA – U.S. News and World Report – – CBS News – – U.S. News and World Report –

2018 lists include: No.1 No.1 No.3 No.4 No.5 Restaurant City of the Year Best Foodie City in America Healthiest City in the U.S. Best City for Biking Best Bike City in America – Bon Appetit – – Wallethub & Travelpulse – – Active.com – – Fast Company – – Bicycling Magazine – No.6 rank by Jetsetter

No.5 No.9 No.10 No.10 No.15 Fittest Cities in America Top City for Entrepreneurs & Most Entrepreneurial State Greenest City in America Most Educated City in – American College of Start-Ups – Amazon.com – – Newsweek – America Sports Medicine – – Business.org – – Wallethub – No.23 rank by CNBC

CITY LINK • 14 UNITS • PORTLAND, OR 17 PORTLAND MAJOR EMPLOYERS GOVERNMENT HEALTHCARE AND RESEARCH The U.S. Federal Government is Portland metro’s overall largest Health services are another major employment sector for the Portland employer, with 20,500 workers. The State of Oregon gives employment to area. The top healthcare employers in the area are Providence Health an additional 14,000 residents. Systems, with 17,543 employees, and The Oregon Health Sciences University (OHSU), with 16,200 workers. OHSU is the recent recipient HIGH TECH & CHIP MANUFACTURING of a total of $1 billion in donations for cancer research from over 10,000 Attracted by the Portland area’s educated workforce and relative low Oregon donors. Grants from the National Institutes of Health totaled cost of doing business, tech companies continue moving to Portland— $182.7 million in 2016. opening major branches and, in some cases, relocating to the area entirely. MANUFACTURING With over 19,300 employees, Intel is the area’s largest private employer. In trucking and transportation, Daimler Trucks—with nearly 3,000 area Intel acquired its first Portland location in 1974. The company is currently workers—has big plans for the Portland area. The company recently expanding its presence with forthcoming D1X microprocessor chip spent $150 million renovating its Portland facility and invests heavily in facilities at the Ronler Acres Campus in Hillsboro. This is part of a five-year, research and development, including autonomous driving. $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. SPORTSWEAR Nike 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.

18 HFO INVESTMENT REAL ESTATE CITY LINK • 14 UNITS • PORTLAND, OR 19 20 HFO INVESTMENT REAL ESTATE COMPARABLES

CITY LINK 14 Units • Portland, Oregon RENT COMPARABLES CITY LINK • 14 UNITS • PORTLAND, OR S 1

CITY LINK APARTMENTS FRANCIS STREET APARTMENTS 4147 SE 37th Avenue, Portland, OR 3933 SE Francis Street, Portland , OR Total Units: 14 Avg Sq ft: 877 Total Units: 17 Avg Sq ft: 729 Year Built: 1972 Avg Rent: $1,053 Year Built: 1965 Avg Rent: $1,199 Avg Rent/Sq ft: $1.20 Avg Rent/Sq ft: $1.64 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft 2 BED / 1 BATH 10 813 $1,018 $1.25 1 BED / 1 BATH 8 650 $1,113 $1.71 3 BED / 1 BATH 4 1,036 $1,196 $1.15 2 BED / 1 BATH 9 800 $1,275 $1.59 Total / Average 14 921 $1,142 $1.24 Total / Average 17 729 $1,199 $1.64

22 HFO INVESTMENT REAL ESTATE RENT COMPARABLES CITY LINK • 14 UNITS • PORTLAND, OR 2 3

HOLLYHURST 2800 BUILDING APARTMENTS 4020 SE Pardee Street, Portland, OR 2820 SE Gladstone Street, Portland, OR Total Units: 18 Avg Sq ft: 760 Total Units: 16 Avg Sq ft: 750 Year Built: 1960 Avg Rent: $1,382 Year Built: 1972 Avg Rent: $1,695 Avg Rent/Sq ft: $1.82 Avg Rent/Sq ft: $2.26 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft 1 BED / 1 BATH 6 675 $1,295 $1.92 2 BED / 1 BATH 16 750 $1,695 $2.26 2 BED / 1 BATH 12 802 $1,425 $1.78 Total / Average 16 750 $1,695 $2.26 Total / Average 18 760 $1,382 $1.82

CITY LINK • 14 UNITS • PORTLAND, OR 23 RENT COMPARABLES CITY LINK • 14 UNITS • PORTLAND, OR 4 5

ROYAL GARDEN APARTMENTS THE OAK TREE 2831 SE Steele Street, Portland, OR 3615 SE 40th Avenue , Portland , OR Total Units: 29 Avg Sq ft: 857 Total Units: 22 Avg Sq ft: 725 Year Built: 1972 Avg Rent: $1,429 Year Built: 1961 Avg Rent: $1,086 Avg Rent/Sq ft: $1.67 Avg Rent/Sq ft: $1.50 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft 1 BED / 1 BATH 9 650 $1,185 $1.82 1 BED / 1 BATH 10 670 $950 $1.42 2 BED / 1.5 BATH 20 950 $1,539 $1.62 2 BED / 1 BATH 12 770 $1,200 $1.56 Total / Average 29 857 $1,429 $1.67 Total / Average 22 725 $1,086 $1.50

24 HFO INVESTMENT REAL ESTATE RENT COMPARABLES CITY LINK • 14 UNITS • PORTLAND, OR 6 7

GLADSTONE GARDENS THE EASTON APARTMENTS 3937 SE Gladstone Street, Portland, OR 4204 SE 39th Avenue, Portland, OR Total Units: 25 Avg Sq ft: 783 Total Units: 15 Avg Sq ft: 802 Year Built: 1930 Avg Rent: $1,338 Year Built: 1968 Avg Rent: $1,450 Avg Rent/Sq ft: $1.71 Avg Rent/Sq ft: $1.81 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft 1 BED / 1 BATH 2 725 $1,195 $1.65 1 BED / 1 BATH 4 600 $1,250 $2.08 2 BED / 1 BATH 23 788 $1,350 $1.71 2 BED / 1 BATH 11 875 $1,523 $1.74 Total / Average 25 783 $1,338 $1.71 Total / Average 15 802 $1,450 $1.81

CITY LINK • 14 UNITS • PORTLAND, OR 25 COMPARABLE SALES 1 2 3

BRENTWOOD PINECREST 4522-4624 SE 29TH AVENUE HOLGATE LOFTS 565-587 N Rosa Parks Way 4522-4624 SE 29th Avenue 1424-1462 SE Holgate Boulevard Portland, OR Portland, OR Portland, OR Total Units: 22 Total Units: 10 Total Units: 20 Year Built: 1965 Year Built: 1962 Year Built: 1972 Avg Unit Size: 636 Avg Unit Size: 839 Avg Unit Size: 710 Sale Date: 8/16/2019 Sale Date: 6/18/2019 Sale Date: 2/15/2019 Sales Price: $3,890,000 Sales Price: $1,850,000 Sales Price: $3,950,000 $ / Unit: $176,818 $ / Unit: $185,000 $ / Unit: $197,500 $ / Sq Ft: $278 $ / Sq Ft: $221 $ / Sq Ft: $278 Cap Rate: 5.75% Cap Rate: 5.00% Cap Rate: 5.53%

26 HFO INVESTMENT REAL ESTATE COMPARABLE SALES 4 5 6

CLAIRMONT 836 SE 42ND AVENUE AZALEA TERRACE 3929 NE 78th Avenue 836 SE 42nd Avenue 1022 SE 29th Avenue Portland, OR Portland, OR Portland, OR Total Units: 14 Total Units: 10 Total Units: 10 Year Built: 1971 Year Built: 1972 Year Built: 1966 Avg Unit Size: 781 Avg Unit Size: 1,127 Avg Unit Size: 756 Sale Date: 1/25/2019 Sale Date: 10/23/2018 Sale Date: 10/3/2018 Sales Price: $2,280,000 Sales Price: $1,750,000 Sales Price: $1,950,000 $ / Unit: $162,857 $ / Unit: $175,000 $ / Unit: $195,000 $ / Sq Ft: $208 $ / Sq Ft: $155 $ / Sq Ft: $258 Cap Rate: 4.63% Cap Rate: 4.74% Cap Rate: 4.50%

CITY LINK • 14 UNITS • PORTLAND, OR 27 COMPARABLE SALES SALE COMPARABLES Year Total Avg Unit Actual Cap Property Sale Date Sale Price $ / Unit $ / Sq Ft Built Units Size Rate Brentwood Pinecrest 1965 22 Aug-19 $3,890,000 $176,818 $278 636 5.75%

4522-4624 SE 29th Avenue 1962 10 Jun-19 $1,850,000 $185,000 $221 839 5.00%

Holgate Lofts 1972 20 Feb-19 $3,950,000 $197,500 $278 710 4.15%

Clairmont 1971 14 Jan-19 $2,280,000 $162,857 $208 781 4.63%

836 SE 42nd Avenue 1972 10 Oct-18 $1,750,000 $175,000 $155 1,127 4.74%

Azalea Terrace 1966 10 Oct-18 $1,950,000 $195,000 $258 756 4.50% Total/Average 1968 14 $2,611,667 $182,029 $233 808 5.03%

28 HFO INVESTMENT REAL ESTATE OPERATIONS ANALYSIS

CITY LINK 14 Units • Portland, Oregon OPERATIONS ANALYSIS CITY LINK • 14 UNITS • PORTLAND, OR Income Current Scheduled Rents Projected Operations Note Scheduled Gross Rent $198,060 $14,147 $209,040 $14,931 1 Less: Vacancy/Credit Loss -$9,903 -$707 -5.0% -$10,452 -$747 -5.0% 2 Net Rental Income $188,157 $13,440 $198,588 $14,185 Other Income $12,855 $918 $12,855 $918 3 Includes: Utility Billing (RUBs) $11,098 $793 89.6% $11,098 $793 89.6% Includes: Miscellaneous $1,757 $125 $1,757 $125 Gross Operating Income $201,012 $14,358 $211,443 $15,103 Expenses Projected Per Unit % GOI Projected Per Unit % GOI Operations Operations Real Estate Taxes $19,188 $1,371 9.5% $19,188 $1,371 9.1% 4 Insurance $3,500 $250 1.7% $3,500 $250 1.7% 5 Total Utilities $14,207 $1,015 7.1% $14,207 $1,015 6.7% Fee Management $16,081 $1,149 8.0% $16,915 $1,208 8.0% 6 Landscaping $2,400 $171 1.2% $2,400 $171 1.1% 7 Maintenance/Repairs $7,700 $550 3.8% $7,700 $550 3.6% 8 Turnover $3,500 $250 1.7% $3,500 $250 1.7% Reserves $3,500 $250 1.7% $3,500 $250 1.7% 9 Total Expenses -$70,076 -$5,005 -34.9% -$70,911 -$5,065 -34% Net Operating Income (NOI) $130,935 $9,353 $140,532 $10,038

30 HFO INVESTMENT REAL ESTATE OPERATIONS ANALYSIS CITY LINK • 14 UNITS • PORTLAND, OR INCOME

1. RENTS City Link’s currently scheduled rents average $1,179 per unit, or $1.28 per sq ft. Projected rents are estimated to average $1,244 per unit, or $1.35 per sq ft.

RENT ROLL ANALYSIS Current Scheduled Rents Average Projected Rents Unit Type Unit Count Square Feet Current Scheduled Rents Average Projected Rents per Sq Ft per Sq Ft 2 Bedroom / 1 Bathroom 2 710 $1,110 $1.56 $1,210 $1.70 2 Bedroom / 1 Bathroom 8 916 $1,169 $1.28 $1,225 $1.34 3 Bedroom / 1 Bathroom 4 1,036 $1,234 $1.19 $1,300 $1.25 Totals / Averages 14 921 $1,179 $1.28 $1,244 $1.35

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 a 5.0% vacancy rate.

3. OTHER INCOME City Link is projected to generate $12,855 in other income in a full fiscal year. The other income includes utility charges (RUBs). • RUBs. The property currently charges for RUBs. Our projections show utility charges generating $11,098 based on a $66 monthly charge to residents, which would cover approximately 90% of the water, sewer, and garbage expense.

CITY LINK • 14 UNITS • PORTLAND, OR 31 OPERATIONS ANALYSIS CITY LINK • 14 UNITS • PORTLAND, OR EXPENSES City Link’s professional management reflects market-rate operations with minimally adjusted expenses. The following expenses impact overall operations.

4. PROPERTY TAXES Oregon’s property taxes are evaluated on a fiscal year starting July 1. Property tax values for the 2019-2020 tax TAX HISTORY year were published October 15. Projected operations Tax Year include current taxes for the 2018-2019 property tax year. 2018/2019 2019/2020 City Link’s taxes increased 2.94% over 2018-2019. In Oregon, Account # property taxes are not reassessed on sale and are limited to a 3.0% annual increase at the state level. Property taxes paid R308469 $19,188 $19,769 by November 1 each year receive a 3.0% discount. The gross Total $19,188 $19,769 property taxes for the 2018-2019 tax year total $19,769. The % Change 2.94% discounted taxes were used for underwriting purposes.

5. INSURANCE The insurance fee is projected to be $250 per unit or $3,500 total which represents standard insurance costs for properties in the metro area similar to City Link.

6. MANAGEMENT FEE The management fee is projected at 8.0% of GOI, which represents standard independent, third-party management costs for properties in the metro area similar to City Link.

7. LANDSCAPING The property did not report any landscaping costs. Our projections after taking a look at the property project a year’s landscaping cost to total $2,400. This rate is similar to properties in the metro area similar to City Link.

8. MAINTENANCE AND City Link had a total of $18,811 in maintenance and repair costs in 2018. The July 2019 T7-Months Annualized shows REPAIRS they are on track for $20,199 by the end of 2019. We projected the costs going forward to decrease based on the fact that capital expenditures were included in those maintenance and repair 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, or $3,500 total.

32 HFO INVESTMENT REAL ESTATE CITY LINK • 14 UNITS • PORTLAND, OR 33 34 HFO INVESTMENT REAL ESTATE OFFER TERMS

CITY LINK 14 Units • Portland, Oregon QUESTIONS & TOUR REQUESTS: OFFER TERMS All inquiries, questions, or tour requests are to be directed to HFO Investment Real Estate at ASSET SUMMARY (503) 241.5541.

Property City Link Please do not disturb the residents. Location 4147 SE 37th Avenue Lee Fehrenbacher • [email protected] City, State Portland, Oregon 97202 Greg Frick • [email protected] County Multnomah Jack Stephens • [email protected] Adam Smith • [email protected] Year Built 1972 Todd Tully • [email protected] Total Units 14 Khari Gates • [email protected] Approximate Sq Ft 12,892 Rand Hoffman • [email protected] Average Unit Sq Ft 921 HFO Investment Real Estate 2424 SE 11th Avenue Portland, Oregon 97214 PRICING www.hfore.com (503) 241.5541 Price $2,650,000 Fax: (503) 241.5548 Per Unit $189,286 Brokers licensed in the States of Oregon and Washington. Per Sq Ft $206 Projected Cap Rate 5.30%

2424 SE 11th Avenue • Portland, OR 97214 www.hfore.com • Phone: (503) 241.5541

36 HFO INVESTMENT REAL ESTATE CITY LINK • 14 UNITS • PORTLAND, OR 37 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.