MENLO PARC 41 Units • Beaverton, Oregon OFFERING MEMORANDUM

www.hfore.com (503) 241.5541 INVESTMENT SUMMARY Menlo Parc is a 41-unit townhome community in Beaverton, Oregon that has been renovating units on turnover. Renovations are achieving average rents of $1,437, or $1.17 per sq ft. Menlo Parc features generously-sized townhomes with vaulted ceilings and gas fireplaces. Every unit features a full-size washer/ dryer, front patio, backyard, and forced air furnace with air conditioning—a rarity in the Portland metro area. The renovations resulted in an exceptional asset that benefits from an outstanding location in Beaverton.

All of the apartments are spacious townhomes averaging 1,216 sq ft, and of the metro area’s largest employers are found in Beaverton including the majority of the townhomes are two-bedrooms. Approximately 85% of Nike, Intel, and Columbia Sportwear. Major business centers and lifestyle the apartments have been renovated. Renovations include new cabinet services are easily accessible along SW Hall Boulevard and Highway 217. fronts, paint, flooring, appliances, lighting, and doors. Common area Menlo Parc residents attend strong schools found in Washington County. updates include a newly positioned leasing office, refreshed landscaping, and updated fencing and life safety features in the pool area. Menlo Parc’s extensive renovations and unique townhome floor plans make it an exceptional asset. The property is expected to benefit Menlo Parc is an attractive, low-density community conveniently located from continued rent growth due to its in-demand Beaverton location. between Beaverton Town Square and Washington Square Mall. Some Investors will find Menlo Parc a remarkable investment opportunity.

2 HFO INVESTMENT REAL ESTATE EXECUTIVE SUMMARY ASSET SUMMARY Property Menlo Parc COMMUNITY CONVENIENCES APARTMENT HIGHLIGHTS Location 5960 SW Menlo Drive • Outdoor seasonal pool • Generously sized townhomes and apartments City, State Beaverton, OR 97005 • Landscaped grounds with mature trees • Gas fireplace and vaulted ceilings * County Washington • Central location in Beaverton and in a highly- • Quartz countertops and modern color schemes * Year Built 1977 / Renovated 2018 ranked school district Total Units 41 • Plentiful storage including kitchen pantry Approx NR Sq Ft 49,846 sq ft • Convenient location between Beaverton • Full-size, in-unit washer/dryer Town Center and Washington Square Mall Avg Unit Size 1,216 sq ft • Large front patio and enclosed backyard Acreage 3.75 acres * Amenities found in select apartments. Density 10.93 units per acre

PRICING UNIT MIX SUMMARY Price $8,450,000 Unit Type Unit Count Avg Sq Ft Total Sq Ft % of Total Units Per Unit $206,098 2 Bedrooms 37 1,196 44,246 90.2% Per Sq Ft $170 3 Bedrooms 4 1,400 5,600 9.8% Cap Rate 5.50% Total / Averages 41 1,216 49,846 100%

TOURS AND INQUIRIES Greg Frick • [email protected] Rob Marton • [email protected] Tyler Johnson • [email protected] 90.2% 9.8% www.hfore.com 2 Bedrooms 3 Bedrooms (503) 241.5541 Fax: (503) 241.5548 Please do not disturb tenants. Brokers licensed in Oregon.

MENLO PARC • 41 UNITS • BEAVERTON, OR 3 Menlo Parc’s private drive and landscaped grounds make it an attractive asset. Its large townhome floor plans with vaulted ceilings and plentiful storage are unique in the neighborhood.

4 HFO INVESTMENT REAL ESTATE MENLO PARC • 41 UNITS • BEAVERTON, OR 5 The majority of the apartments at Menlo Parc are spacious 2-bedroom floor plans. Each unit has a storage unit, front patios and backyard spaces. Large garages and carports are adjacent to the units.

6 HFO INVESTMENT REAL ESTATE Menlo Parc has a central leasing office adjacent to a seasonal, outdoor pool. The leasing office was recently renovated with new flooring, furnishings and a resident concierge station. The leasing office has a large attached space that could be converted to a fitness center or another unit.

MENLO PARC • 41 UNITS • BEAVERTON, OR 7 8 HFO INVESTMENT REAL ESTATE MENLO PARC • 41 UNITS • BEAVERTON, OR 9 FLOOR PLANS

1ST FLOOR 2ND FLOOR

TOWNHOMES 2 Bedroom • 2 Bathroom 1,380 Sq Ft Renderings are intended only as a general reference. Features, materials, finishes and layout of subject unit may be different than shown.

10 HFO INVESTMENT REAL ESTATE FLOOR PLANS

1ST FLOOR 2ND FLOOR

TOWNHOMES 2 Bedroom • 1.5 Bathroom 1,270 Sq Ft Renderings are intended only as a general reference. Features, materials, finishes and layout of subject unit may be different than shown.

MENLO PARC • 41 UNITS • BEAVERTON, OR 11 FLOOR PLANS

APARTMENT 3 Bedroom • 2 Bathroom 1,400 Sq Ft Renderings are intended only as a general reference. Features, materials, finishes and layout of subject unit may be different than shown.

12 HFO INVESTMENT REAL ESTATE MENLO PARC • 41 UNITS • BEAVERTON, OR 13 BEAVERTON SUBMARKET OVERVIEW The City of Beaverton (pop. 97,514) is a major economic hub in the Like the Portland metro area, Beaverton has experienced historically Portland metro area, along with being Portland’s second-largest suburb low vacancies, with a October 2018 vacancy rate of 3.5% reported by and the fifth-largest city in Oregon. Over the past two decades, Beaverton Multifamily NW. Housing options in Beaverton include many apartment has attracted numerous high-tech businesses, and is one of Oregon’s complexes and urban-core condominiums near shops and MAX light- fastest-developing areas. Between 2010 and 2018, the city’s population rail stations. Whether they are drawn to Beaverton for the schools, increased by 8.6%. shopping or the outdoors, individuals and families will find a wide range of opportunities to fit their needs. With its stable, sustainable economy, For those looking for job prospects, few cities are likely to offer more Beaverton remains attractive and poised for future growth. opportunities than Beaverton, which is a 15-20 minute drive from downtown Portland. In 2015 and 2016, employment in Beaverton increased by 8.3%, faster than in all but a few dozen other U.S. cities. The national job growth rate over the same period was 3.5%. 24/7 Wall Street ranked Beaverton #1 on its list of Best Places to Live for 2018 for the above average health of its residents and for the city’s many employment opportunities.

Beaverton is a large, robust community that is home to major companies such as Nike Inc. and Columbia Sportswear. Several high-tech employers including Intel and Genentech are located along the Highway 26/Sunset Corridor, which includes nearby Hillsboro. The growing tech hub west of Portland includes more than 300 high-tech businesses who have made their home in what is called the “Silicon Forest.” As an increasing number of high skilled workers are drawn to the area, Beaverton rents have been increasing, and are forecast to continue this trend at a healthy pace. As of November 2018, Beaverton’s unemployment rate was 3.4%, below Oregon’s statewide average of 3.9%. • 2018 All-America City Finalist Nike is currently undergoing a major expansion rumored to cost • 2018 Best Place to Live for 2018 (24/7 Wall Street) approximately $1 billion. It plans to open the last—and largest—of four • Best Places to Live (Money Magazine) 2016, 2017 new buildings in 2019. Nearby Intel recently completed their R4 Building, a seven-story structure on its Ronler Acres complex in Hillsboro.

14 HFO INVESTMENT REAL ESTATE STRONG BEAVERTON SCHOOL DISTRICT

HIGHLAND PARK MIDDLE SCHOOL Students at Menlo Parc attend Fir less than 1 mile driving – 0.7 miles walking 96% Grove Elementary School, Highland Well above the state average of 84% Park Middle School, and Southridge High School. Students at Fir Grove Stellar Elementary School outperform their SOUTHRIDGE HIGH SCHOOL statewide peers in English and Science, 9/10 and Highland Park Middle School less than 3 mile driving Rating students outperform their peers in both 89% graduation rate, with 79% of students passing one or English and Math. more AP exams. from GreatSchools English and Math scores are well above state averages, as are test scores for low income students.

MENLO PARC • 41 UNITS • BEAVERTON, OR 15 LIFESTYLE CONVENIENCES

Somerset West TANASBOURNE CEDAR MILL Tanasbourne Town Center ORENCO STATION 84 405

West DOWNTOWN Haven-Sylvan PORTLAND Cedar Hills 26

217 8 Aloha SOUTHWEST PORTLAND Beaverton Town Square Menlo Parc Raleigh Hills

10

Hazeldale 5

Washington Square Metzger

210

99W

Tigard Lake Oswego

16 HFO INVESTMENT REAL ESTATE LIFESTYLE CONVENIENCES AND EMPLOYERS

Hillsboro Airport Cornelius Pass Rd Tanasbourne Town Center Orenco Station Employee Store Cornell Rd Brookwood Pkwy Walker Rd Sunset HILLSBORO High School

Baseline Rd 26 185th Ave Sunset High School

Providence St Vincent Johnson St Medical Center BEAVERTON Tualatin Hills Nature Park Cedar Hills Crossing Hillsboro High School 8

River Rd BEAVERTON Beaverton Town Square Beaverton

2295th Ave Aloha High School Menlo Parc High School 170th Ave

Farmington St Murray Blvd 217 SW Hall Blvd 10 Red Tail Golf Center

Washington Square Southridge High School

MENLO PARC • 41 UNITS • BEAVERTON, OR 17 LIFESTYLE CONVENIENCES AND EMPLOYERS

Peterkort CEDAR HILLS Towne Square

Providence St Vincent Medical Center 26

SW Walker Rd Cedar Hills Crossing Walker Elementary School Tualatin Hills Nature Park SW Millikan Way 8 Company Store SW Tualatin Valley Hwy SW Canyon Rd

8 Beaverton TC WES Station SW Beaverton Hillsdale Hwy 10 Beaverton 10 Beaverton Town Square High School Jesuit High School

217 Menlo Parc SW Allen Blvd

18 HFO INVESTMENT REAL ESTATE 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 2019 vacancy rate 500 companies based outside Oregon with • #9 Best Foodie Cities in the USA (U.S. News and at 4.7% and the U.S. average at 6.89%. major operations here are Precision Castparts World Report) and Intel. The Multifamily NW Apartment Report 2018 lists include: survey proved average October 2018-19 year- Tech and software companies continue to • #1 Restaurant City of the Year (Bon Appetit) over-year rent growth at 7.4% not including relocate their operations here or open major • #1 Best Foodie City in America (Wallethub & concessions. outposts in Portland. These companies enjoy Travelpulse) #6 (Jetsetter) Portland’s educated workforce, affordable SKILLED WORKFORCE & STRONG EMPLOYMENT high quality of life, and a low cost of doing • #3 Healthiest City in the U.S. (Active.com) In a 2018 WalletHub report comparing 150 of business compared to the Bay Area. • #3 Best Place for Business and Careers (Forbes) the largest U.S. metros, Portland is listed as the • #4 Best City for Biking (Fast Company) 15th most educated city in America. More than Companies which have opened major branches in Portland include Airbnb, Google, • #9 Top City for Entrepreneurs and Start-Ups half of Portland workers have a college degree, (Business.org) #23 (CNBC) well ahead of the national average of 35%. Squarespace, Mozilla, Simple, Survey Monkey, SalesForce and New Relic, Inc. Portland’s tech • #10 Greenest City in America (Newsweek) According to the State of Oregon’s Employment startup companies include Viewpoint, Jama • #10 Most Entrepreneurial State (Amazon.com) Department, Portland enjoys one of the fastest Software, Urban Airship, Acquia, Elemental • #15 Most Educated City in America (Wallethub) job growth rates in the Pacific Northwest, Technologies, Act-On, Puppet Labs, and The and the entire nation. Data indicates the area Clymb. added 31,000 jobs in 2016, 28,000 jobs in 2017, and 29,000 in 2018.

MENLO PARC • 41 UNITS • BEAVERTON, OR 19 PORTLAND MAJOR EMPLOYERS GOVERNMENT HEALTHCARE AND RESEARCH The U.S. Federal Government is among Portland largest employers, with Health services are another major employment sector for the Portland 18,300 workers. The State of Oregon gives employment to an additional area. The top healthcare employers in the area are Providence Health 15,100 residents in government and education. Systems, with 18,885 employees, and The Oregon Health Sciences University (OHSU), with 17,556 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 cost Oregon donors. Grants from the National Institutes of Health totaled of doing business, tech companies continue opening branches and—in $245.62 million in 2018. some cases—relocating to the area entirely. MANUFACTURING With over 20,000 employees, Intel is the area’s largest private employer. In trucking and transportation, Daimler Trucks—with nearly 2,800 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 1.1 million square research and development, including autonomous driving. foot factory 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. 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 2020 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 1,898 employees, and a new 70,000 SF outpost of Under Armour. Under Armour has moved 100 employees into an iconic former YMCA.

20 HFO INVESTMENT REAL ESTATE PORTLAND MARKET SNAPSHOT

4.4% 38.3% 3.9% PORTLAND METRO AREA Metro-area vacancy Metro area renter- Unemployment rate occupied housing rate (November 2019) The Portland Metro Area is one of the strongest apartment markets in the nation, as reflected in strong year-over-year rent growth and consistently tight vacancy. The 7.4% 54% $68,125 Year-over-year Millennials 25-34 in Portland area’s strong job market and high Median household rent growth** with a bachelor’s degree or higher income quality of life continues to attract new residents; between 2018 and 2019 approximately 72 people moved to the Portland metro area each day.* New apartment 8,360 4,474 #2 construction has not caught up to New Portland residents Portland residents for Oregon in Migration (2018-2019) per square mile in US the housing demand created by in-migration.

*Multifamily NW Apartment Report (Oct. 2018-2019) *Portland Center for Population Research and State of Washington Office of Financial Management

MENLO PARC • 41 UNITS • BEAVERTON, OR 21 TOP AREA EMPLOYERS

20,000 area employees 13,500 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 17,556 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 2020. 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 $245 million in 2018. This infuses the economy with jobs and income 7,600 area employees from outside the Portland MSA. With nearly 50,000 students, Portland Public Schools is Oregon’s largest district. Portland is 18,885 area employees currently in the midst of a massive 11,404 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 9,777 area 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.

22 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 1.7% in 2019. 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 companies 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 1.6% between October 2018 – October 2019, an increase of 20,200 positions. Below is an overview of net job creation by industry from October 2018 through October 2019:

Financial 6,600 Professional 3,300 and Business Activities Government Administrative Education & Services 2,500 2,500 3,300 Health Services Transportation, and Waste 3,500 Warehousing & Utilities Services Healthcare & Social 3,300 Assistance

MENLO PARC • 41 UNITS • BEAVERTON, OR 23 RENT COMPARABLES MENLO PARC • 41 UNITS • BEAVERTON, OR

Properties Menlo Parc Tanasbourne Town Center 5960 SW Menlo Drive Beaverton, OR NW Cornell Rd PORTLAND Bel-Aire Court Apartments Lineage at Willow Creek 121145 SW Why Worry Lane Walker Rd Beaverton, OR Willow Creek 26 Hallwood SW Jenkins Rd 7535 SW Hall Boulevard SW 185th Ave Cedar Hills Washington Park Beaverton, OR Icon at Beaverton 14620-14630 SW Farmington Road The Huntley 8 Tualatin Hills Beaverton, OR Nature Park 217 Lineage at Willow Creek SW Beaverton Hillsdale Hwy 18380 NW Heritage Parkway Icon at Beaverton Beaverton, OR Beaverton Town Square The Habitat The Habitat Menlo Parc Bel-Aire Court Apartments 5745 SW Oleson Road 10 Portland, OR SW Denney Rd The Huntley Hallwood 12310 SW Center Street SW Hall Blvd

Beaverton, OR SW Murray Blvd 5 Willow Creek SW 175th Ave 901-999 SW 185th Avenue Hillsboro, OR Washington Square

210 99W Tigard Lake Oswego

24 HFO INVESTMENT REAL ESTATE RENT COMPARABLES MENLO PARC • 41 UNITS • BEAVERTON, OR

S 1

MENLO PARC LINEAGE AT WILLOW CREEK 5960 SW Menlo Drive, Beaverton, OR 18380 NW Heritage Parkway, Beaverton, OR Total Units: 41 Avg SF: 1,216 Total Units: 121 Avg SF: 881 Year Built: 1977 Avg Rent: $1,470 Year Built: 1978 Avg Rent: $1,559 Avg Rent/SF: $1.21 Avg Rent/SF: $1.77 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft 2 BED / 2 BATH 9 1,382 $1,495 $1.08 1 BED / 1 BATH 8 696 $1,211 $1.74 2 BED / 1.5 BATH 28 1,136 $1,425 $1.25 2 BED / 1 BATH 99 880 $1,537 $1.75 3 BED / 2 BATH 4 1,400 $1,725 $1.23 3 BED / 1 BATH 14 992 $1,916 $1.93 Average 41 1216 $1,470 $1.21 Average 121 881 $1,559 $1.77

MENLO PARC • 41 UNITS • BEAVERTON, OR 25 RENT COMPARABLES MENLO PARC • 41 UNITS • BEAVERTON, OR

2 3

WILLOW CREEK THE HUNTLEY 901-999 SW 185th Avenue, Hillsboro, OR 12310 SW Center Street, Beaverton, OR Total Units: 77 Avg SF: 985 Total Units: 61 Avg SF: 907 Year Built: 1990 Avg Rent: $1,450 Year Built: 1972 Avg Rent: $1,515 Avg Rent/SF: $1.47 Avg Rent/SF: $1.67 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft 2 BED / 2 BATH 77 985 $1,450 $1.47 1 BED / 1 BATH 26 745 $1,395 $1.87 Average 77 985 $1,450 $1.47 2 BED / 1 BATH 20 973 $1,495 $1.54 3 BED / 2 BATH 15 1,100 $1,750 $1.59 Average 61 907 $1,515 $1.67

26 HFO INVESTMENT REAL ESTATE RENT COMPARABLES MENLO PARC • 41 UNITS • BEAVERTON, OR

4 5

ICON AT BEAVERTON BEL-AIRE COURT APARTMENTS 14620-14630 SW Farmington Road, Beaverton, OR 121145 SW Why Worry Lane, Beaverton, OR Total Units: 56 Avg SF: 773 Total Units: 68 Avg SF: 900 Year Built: 1968 Avg Rent: $1,204 Year Built: 1959 Avg Rent: $1,400 Avg Rent/SF: $1.56 Avg Rent/SF: $1.56 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft 1 BED / 1 BATH 22 612 $1,150 $1.88 2 BED / 1 BATH 42 838 $1,338 $1.60 2 BED / 1 BATH 34 877 $1,239 $1.41 3 BED / 1 BATH 26 1,000 $1,500 $1.50 Average 56 773 $1,204 $1.56 Average 68 900 $1,400 $1.56

MENLO PARC • 41 UNITS • BEAVERTON, OR 27 RENT COMPARABLES MENLO PARC • 41 UNITS • BEAVERTON, OR

6 7

THE HABITAT HALLWOOD 5745 SW Oleson Road , Portland , OR 7535 SW Hall Boulevard, Beaverton, OR Total Units: 85 Avg SF: 781 Total Units: 126 Avg SF: 867 Year Built: 1978 Avg Rent: $1,345 Year Built: 1985 Avg Rent: $1,408 Avg Rent/SF: $1.72 Avg Rent/SF: $1.62 Unit type Units Sq Ft Rent Rent/Sq Ft Unit type Units Sq Ft Rent Rent/Sq Ft STUDIO 3 412 $1,150 $2.79 1 BED / 1 BATH 32 791 $1,274 $1.61 1 BED / 1 BATH 32 669 $1,199 $1.79 2 BED / 1 BATH 44 914 $1,459 $1.60 2 BED / 1 BATH 50 876 $1,450 $1.66 2 BED / 1 BATH 50 876 $1,450 $1.66 Average 85 781 $1,345 $1.72 Average 126 867 $1,408 $1.62

28 HFO INVESTMENT REAL ESTATE MENLO PARC • 41 UNITS • BEAVERTON, OR 29 PROJECTED OPERATIONS MENLO PARC • 41 UNITS • BEAVERTON, OR Income Current Scheduled Rents Projected Operations Note Potential Gross Market Rent $721,860 $17,606 $723,060 $17,636 1 Less: Loss to Lease -$25,603 -$624 -3.5% $0 $0 0.0% Scheduled Gross Rent $696,257 $16,982 $723,060 $17,636 Less: Vacancy/Credit Loss -$34,813 -$849 -5.0% -$36,153 -$882 -5.0% 2 Net Rental Income $661,444 $16,133 $686,907 $16,754 Other Income $70,244 $1,713 $70,244 $1,713 3 Includes: Parking (Garage) $15,068 $368 $15,068 $368 Includes: Utility Billing (RUBs) $35,055 $855 55.8% $35,055 $855 55.8% Includes: Miscellaneous $20,121 $491 $20,121 $491 Gross Operating Income $731,688 $17,846 $757,151 $18,467 Expenses Projected Operations Per Unit % GOI Projected Operations Per Unit % GOI Real Estate Taxes $57,682 $1,407 7.9% $57,682 $1,407 7.6% 4 Insurance $11,275 $275 1.5% $11,275 $275 1.5% 5 Total Utilities $71,001 $1,732 9.7% $71,001 $1,732 9.4% Administrative $11,505 $281 1.6% $11,505 $281 1.5% Advertising $7,317 $178 1.0% $7,317 $178 1.0% Fee Management $21,951 $535 3.0% $22,715 $554 3.0% 6 On-site Payroll $35,455 $865 4.8% $35,455 $865 4.7% Contracted Services $10,200 $249 1.4% $10,200 $249 1.3% Maintenance/Repairs $24,789 $605 3.4% $24,789 $605 3.3% Turnover $5,125 $125 0.7% $5,125 $125 0.7% 7 Reserves $10,250 $250 1.4% $10,250 $250 1.4% 8 Total Expenses -$266,550 -$267,313 Expenses per Unit -$6,501 -$6,520 % of Gross Operating Income 36.4% 35.3% Net Operating Income (NOI) $465,138 $489,837

30 HFO INVESTMENT REAL ESTATE OPERATIONS ANALYSIS MENLO PARC • 41 UNITS • BEAVERTON, OR The following projections are based on September 2019 TTM operations and current scheduled rents.

1. RENTS Approximately 85% of the apartments at Menlo Renovation Summary Classic Renovated Total Parc have been renovated. Renovated rents average $1,437 per unit, or $1.17 per sq ft. The Total 6 35 41 rent comparables indicate Menlo Parc, and its % Of Total 14.6% 85.4% 100.0% large townhome units could increase rents. Avg Unit Size 1,136 1,229 1,216 Completing renovations on the remaining six (6) units and bringing rents to levels in line with the Avg Rent $1,282 $1,437 $1,413 rent comparables further increases rents by 3.7%. Avg Rent per Sq Ft $1.13 $1.17 $1.16 Difference $0.04 Sq Ft % Diff 3.40%

2. VACANCY/CREDIT LOSS, Operations have been adjusted for a 5.0% vacancy rate based on lender underwriting requirements. Lenders CONCESSIONS, AND 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 historical vacancy was above market due to interior renovations and BAD DEBT updates to the property.

3. OTHER INCOME Menlo Parc Apartments generated $62,315 in Other Income based on September 2019 TTM operations. The Other Income includes administrative fees, garage income, and utility income. The projected operations have been adjusted for new RUBs charges and fully realized garage income as discussed below. The projected operations other income totals $70,244.

• RUBs. Menlo Parc increased water, sewer, and garbage collections to a rate of $75 per unit per month. This increase, once fully implemented, will increase collections to 55.8% of total water/sewer and garbage utility costs or $35,055 annually which includes a 5.0% vacancy factor.

• Garages and Carports. Parking generated $11,177 for September 2019 TTM operations. The projected operations assume income based on September 2019 T3 annualized collections which total $15,068.

MENLO PARC • 41 UNITS • BEAVERTON, OR 31 OPERATIONS ANALYSIS MENLO PARC • 41 UNITS • BEAVERTON, OR

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 2 Bedroom / 1.5 Bathroom Classic 6 1,136 $1,195 $1,325 10.9% $1,282 $1.13 2 Bedroom / 1.5 Bathroom Renovated 22 1,136 $1,300 $1,579 21.4% $1,375 $1.21 2 Bedroom / 2 Bathroom Renovated 9 1,382 $1,450 $1,600 10.3% $1,482 $1.07 3 Bedroom / 2 Bathroom Renovated 4 1,400 $1,575 $1,772 12.5% $1,684 $1.20 Totals / Averages 41 1,216 $1,380 $1,569 13.8% $1,415 $1.16

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 2 Bedroom / 1.5 Bathroom Classic 6 1,136 $1,282 $1.13 $1,425 $1.25 10.0% 2 Bedroom / 1.5 Bathroom Renovated 22 1,136 $1,375 $1.21 $1,425 $1.25 3.5% 2 Bedroom / 2 Bathroom Renovated 9 1,382 $1,482 $1.07 $1,495 $1.08 0.9% 3 Bedroom / 2 Bathroom Renovated 4 1,400 $1,684 $1.20 $1,725 $1.23 2.4% Totals / Averages 41 1,216 $1,415 $1.16 $1,470 $1.21 3.7%

32 HFO INVESTMENT REAL ESTATE OPERATIONS ANALYSIS MENLO PARC • 41 UNITS • BEAVERTON, OR RENT VARIATION BY UNIT PLAN $1,850 Current Rents * 1,136 sq ft 1,382 sq ft 1,400 sq ft $1,195 1 $1,750 $1,262 1 $1,300 3 $1,650 $1,312 1 $1,325 8 $1,550 $1,350 1 $1,375 2 $1,450 $1,395 8 $1,416 1 $1,425 1 Scheduled Rent $1,350 $1,450 4 $1,475 1 $1,250 $1,485 1 $1,494 1 $1,150 $1,575 1 $1,579 1 $1,050 $1,600 1 1,136 Sq Ft 1,382 Sq Ft 1,400 Sq Ft $1,695 2 $1,772 1 Minimum Rent Average Rent Maximum Rent Total * 28 8 4 * Occupied units and pending move-ins.

MENLO PARC • 41 UNITS • BEAVERTON, OR 33 OPERATIONS ANALYSIS MENLO PARC • 41 UNITS • BEAVERTON, OR

HISTORICAL INCOME TRENDS $59,000 120.0%

$58,000 100.0% $57,000

$56,000 80.0%

$55,000 60.0% $54,000 Occupancy Scheduled Rent

$53,000 40.0%

$52,000 20.0% $51,000

$50,000 0.0% Oct 2018 Nov 2018 Dec 2018 Jan 2019 Feb 2019 Mar 2019 Apr 2019 May 2019 Jun 2019 Aug 2019 Sep 2019 Scheduled Rent Occupancy

34 HFO INVESTMENT REAL ESTATE OPERATIONS ANALYSIS MENLO PARC • 41 UNITS • BEAVERTON, OR

RENT TRENDS $1,420 -12.00%

$1,410 $1,415 -10.00% $1,400 $1,403

$1,390 -8.00% $1,390 $1,380 Vacancy -6.00%

Average Lease Rent Lease Average $1,370

$1,360 -4.00% $1,359 $1,350 -2.00% $1,340

$1,330 0.00% September 2019 September 2019 September 2019 Scheduled Rents T6-Months Annualized T3-Months Annualized Scheduled Rent Vacancy

MENLO PARC • 41 UNITS • BEAVERTON, OR 35 OPERATIONS ANALYSIS MENLO PARC • 41 UNITS • BEAVERTON, OR

4. PROPERTY TAXES Oregon’s property taxes are evaluated on a fiscal TAX HISTORY year starting July 1. Property tax values for the Tax Year 2019-2020 tax year were published October 15. 2017/2018 2018/2019 2019/2020 Menlo Parc Apartments’ taxes increased 3.79% Account # over 2018-2019. In Oregon, property taxes are not reassessed on sale and are limited to a 3.0% R136613 $55,418 $57,569 $59,466 annual increase at the state level. Property taxes Total $55,418 $57,569 $59,466 paid by November 1 each year receive a 3.0% % Change 3.74% 3.19% discount. The projected operations include the current gross property taxes with the discount.

5. INSURANCE The historical operations include earthquake insurance and policy coverage applicable to the current ownership. The property insurance has been adjusted to a market-rate of $11,275, or $275 per unit.

6. MANAGEMENT FEE The historical management fee for Menlo Parc Apartments averaged 4.6% of GOI for the September 2019 TTM operations and includes costs applicable to the current ownership. The projected operations were adjusted to reflect a market rate fee of 3.0% of GOI to manage a property similar in size to Menlo Parc Apartments.

36 HFO INVESTMENT REAL ESTATE OPERATIONS ANALYSIS MENLO PARC • 41 UNITS • BEAVERTON, OR

7. TURNOVER Turnover has been adjusted upward to reflect costs for make-ready Turnover Costs Projected process. The historical turnover costs are below market average, Total Units 41 and it is assumed many expenses typical to turnover have been capitalized as the property is renovated. % of units 30% Expected Turnovers 12 Annual Turnover Cost $5,125 Cost per Turnover $417 Per Unit Turnover Cost $125

8. 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 $10,250 annually.

MENLO PARC • 41 UNITS • BEAVERTON, OR 37 OFFER TERMS MENLO PARC • 41 UNITS • BEAVERTON, OR

PRICE SUMMARY QUESTIONS & TOUR REQUESTS: Price $8,450,000 Please do not disturb tenants. Per Unit $206,098 All tours and inquiries regarding Menlo Parc are Per Sq Ft $170 to be directed to HFO Investment Real Estate at Cap Rate 5.50% (503) 241.5541. Avg Square Foot 1,216 sq ft Greg Frick • [email protected] Avg Current Rent $1,398 Rob Marton • [email protected] Avg Current Rent per Sq Ft $1.15 Tyler Johnson • [email protected]

Jack Stephens • [email protected] ASSET SUMMARY Lee Fehrenbacher • [email protected] Property Menlo Parc Todd Tully • [email protected] Location 5960 SW Menlo Drive Adam Smith • [email protected] City, State Beaverton OR 97005 Khari Gates • [email protected] County Washington Rand Hoffman • [email protected] Year Built 1977 / Renovated 2018 Total Units 41 Investment Real Estate 2424 SE 11th Avenue Approx NR Sq Ft 49,846 sq ft Portland, Oregon 97214 Avg Unit Size 1,216 sq ft www.hfore.com Acreage 3.75 acres (503) 241.5541 Fax: (503) 241.5548

Brokers licensed in the States of Oregon and Washington.

38 HFO INVESTMENT REAL ESTATE MENLO PARC • 41 UNITS • BEAVERTON, OR 39 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.