O F F E R I N G
M E M O R A N D U M
R E G E NC Y T E R R AC E
A P AR T ME NT S
A 14-u nit P r o p e r ty i n Ne wb e r g , OR
O F F E R I N G
M E M O R A N D U M
ALL APARTMENTS
ALL THE TIMESM
503.241.5541
www.hfore.com
CONFIDENTIAL MEMORANDUM
AND DISCLAIMER
CONFIDENTIAL MEMORANDUM AND DISCLAIMER
HFO Investment Real Estate (”Agent”) has been engaged as the exclusive agent for the sale of
The Regency & Center Street Apartments in Newberg, OR 97132 (the “Property”).
The Property is being offered for sale in its “as-is, where-is” condition, and Seller and Agent
make no representations or warranties as to the accuracy of the information contained in this
Offering Memorandum. The enclosed materials include highly confidential information and
are being furnished solely for the purpose of review by prospective purchasers of the interest
described herein. Neither the enclosed materials nor any information contained herein is to be
used for any other purpose or made available to any other person without the express written
consent of Seller.
The enclosed materials are being provided solely to facilitate the Prospective Purchaser‘s own due
diligence for which it shall be fully and solely responsible. The material contained herein is based
on information and sources deemed to be reliable, but no representation or warranty, express
or implied, is being made by Agent or Seller or any of their respective representatives, affiliates,
officers, employees, shareholders, partners and directors, as to the accuracy or completeness of
the information contained herein. Summaries contained herein of any legal or other documents
are not intended to be comprehensive statements of the terms of such documents, but rather
only outlines of some of the principal provisions contained therein. Neither Agent nor Seller shall
have any liability whatsoever for the accuracy or completeness of the information contained
herein or any other written or oral communication or information transmitted or made available
or any action taken or decision made by the recipient with respect to the Property. Interested
parties are to make their own investigations, projections, and conclusions without reliance upon
the material contained herein.
Seller reserves the right, at its sole and absolute discretion, to withdraw the Property from being
marketed for sale at any time and for any reason. Seller and Agent each expressly reserves the
right, at its sole and absolute discretion, to reject any and all expressions of interest or offers
regarding the Property and/or to terminate discussions with any entity at any time, with or
without notice. This Offering Memorandum is made subject to omissions, correction of errors,
change of price or other terms, prior sale or withdrawal from the market without notice. Agent
is not authorized to make any representations or agreements on behalf of Seller.
Seller shall have no legal commitment or obligation to any interested party reviewing the
enclosed materials, performing additional investigation and/or making an offer to purchase the
Property unless and until a binding written agreement for the purchase of the Property has
been fully executed, delivered and approved by Seller, and any conditions to Seller‘s obligations
thereunder have been satisfied or waived.
By taking possession of and reviewing the information contained herein, the recipient agrees
that (a) the enclosed materials and their contents are of a highly confidential nature and will be
held and treated in the strictest confidence and shall be returned to Agent or Seller promptly
upon request; (b) the recipient shall not contact employees or tenants of the Property directly
or indirectly regarding any aspect of the enclosed materials or the Property without the prior
written approval of Seller or Agent and (c) no portion of the enclosed materials may be copied
or otherwise reproduced without the prior written authorization of Seller or Agent.
If you have no interest in the Property at this time, please destroy or return this Offering
Memorandum immediately to:
HFO Investment Real Estate
Attention: Tyler Johnson
1028 SE Water Avenue, Suite 270, Portland, OR 97214
971.717.6336
R E G E NC Y T E R R ACE
AP AR T ME NT S
Ne wb e r g , OR 9 7132
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TABLE OF CONTENTS
I.
EXECUTIVE SUMMARY
4
II.
REGENCY TERRACE
8
III. COMPARABLE SALES
10
IV. COMPARABLE RENTS
12
V.
15
AREA OVERVIEW
BROKER TEAM
HFO INVESTMENT REAL ESTATE
CODY HAGERMAN
971.717.6333
[email protected]
GREG FRICK
971.717.6332
[email protected]
ROB MARTON
971.717.6335
[email protected]
TYLER JOHNSON
971.717.6336
[email protected]
TREVOR CALTON
971.717.6342
[email protected]
EX ECUTIV E
S UMMARY
A NEWBERG PROPERTY
Regency Terrace is a well-located apartment
community with significant value-add
opportunity.
Rents are trailing the market and could benefit
from oversight by professional property
management.
Regency Terrace is located in family-oriented
neighborhood surrounded by a number of parks
and green spaces.
Newberg, Oregon is a bedroom community
southwest of the Portland Metro area. It is
considered one of the gateways to Oregon’s
internationally recognized wine country and
home to George Fox University.
REGENCY TERRACE
4
Property Summary
Price
Price Per Unit
Price Per Sq.Ft.
Cap Rate
Total Units
Estimated Sq.Ft. (NR)
Regency
Terrace
$750,000
$53,571
$67
7.40%
14
11,150
Estimated Avg. Unit Size
796
Lot Size (acres) ~
0.67
REGENCY TERRACE
5
EX ECUTIV E
S UMMARY
RE G E N C Y
T E RRA C E
REGENCY TERRACE
414 E 9th Street
Newberg, OR 97132
Property Summary
Units
14
Regency Terrace is a 14-unit apartment property
built in the 1970s. The unit mix includes one- and
two-bedroom apartments. The majority of the
units are two-bedrooms.
Year Built
1970's
Square Feet (NR)
11,150
Average Unit Size
796
• Land on the southern portion of the property
could potentially accommodate an additional
five apartments.* The land is accessible via E
10th Street and is currently a hedged green
space for resident use.
Lot Size (acres) ~
0.67
• The rents at Regency Terrace - at $0.72 per
square foot - are some of the lowest in the
market. Even at a pro forma of $623 per unit,
rents would still trail the market.
Parking
• The property has on-site laundry and an
abundance of parking for the residents.
• Regency Terrace is across the street from
Newberg’s Renne Park and sports complex.
The park has numerous sports fields, open
space and play areas.
REGENCY TERRACE
6
Density
20.90
No. of Stories
2
No. of Buildings
1
Surface
• The apartments are less than two blocks
from Edwards Elementary School and a short
distance to Ewing Young Park.
* Ability to add additional units to be confirmed by
buyer.
Regency Apartments
414 E 9th
Newberg, OR 97132
Price
$750,000
7.56
Price Per Unit
$53,571
20.90
Price Per Sqft
$67
No. Units
14
Cap Rate
7.40%
Year Built
1970's
GIM
Sq. Ft
11,150
Density
Lot Size (Acres)
0.67
SCHEDULE OF PRO FORMA MONTHLY RENTS
Unit Type
Appr.
Sq. Ft.
1
11
2
14
1 Bd / 1 Ba
2 Bd / 1 Ba
2 Bd / 1.5 Ba
650
800
850
796
Rent
Range
# - $0
# - $0
# - $0
Avg.
Rent
$550
$625
$650
$623
Rent Per
Sq. Ft.
Avg. Rent
Per Sq Ft
$0.00 - $0.00
$0.00 - $0.00
$0.00 - $0.00
$0.85
$0.78
$0.76
$0.78
Monthly Total
$550
$6,875
$1,300
$8,725
INCOME
Scheduled Gross Rental Income
Less: Vacancy/Credit Loss
Net Rental Income
Plus: Miscellaneous
Effective Annual Income
ESTIMATED EXPENSES
Real Estate Taxes
Insurance
Utilities
Fee Management
R&M/Turnovers
Reserves
$104,700
-$5,235
$99,465
$5,000
-5.00%
2012/2013 Net Taxes
Current policy
Estimate
Estimate
Estimate
Estimate
TOTAL ESTIMATED ANNUAL EXPENSES
$104,465
% Effective
Annual
Income
$/Unit/
Year
Proforma
9.96%
2.76%
18.26%
6.50%
6.70%
2.68%
$743
$206
$1,363
$485
$500
$200
$10,408
$2,884
$19,075
$6,790
$7,000
$2,800
46.86%
($3,497)
($48,957)
TOTAL ESTIMATED NET OPERATING INCOME
$55,508
REGENCY TERRACE
7
RE G E N C Y
T E RRA C E
Units
COMPARABLE SALES
The majority of apartment properties sold in 2012 and
2013 are similar in vintage and construction to Regency
Terrace. The table below summarizes the sales in areas
in suburban areas of the Portland metro area and in
Newberg.
•
Of the sales comparables, the average year built is
1971 and the average size is 19 units; both of which
are similar to Regency Terrace.
•
The average price per unit for sales was $55,528 and
$55 per square foot.
C OMPA RA B LE
SA LE S
There have been no sales similar to Center Street’s historical vintage. Given the location and size of both assets,
the sales comparables are applicable to Center Street.
City
Year
Built
Total
Units
Sale date
1013 Elliot Rd
Newberg
1975
6
06/10/13
$385,000
$64,167
Cedar Terrace
Newberg
1975
27
06/07/13
$1,600,000
$59,259
Adams Apartments
McMinnville
1974
19
04/24/13
$910,000
$47,895
The Oaks
Newberg
1960
24
06/12/12
$1,219,000
1971
19
$1,028,500
Property
Average
REGENCY TERRACE
8
Sale Price
$ / Unit
$ / Foot Cap Rate
$60
Avg Unit
size
7.80
1,067
7.01
783
$59
7.90
806
$50,792
$46
7.50
1,097
$55,528
$55
7.55
938
Comparable Apartment Sales
2
3
1
4
1
1013 Elliot Road - 6 Units
Address: 1013 Elliot Rd
Newberg
Year Built: 1975
Total Units: 6
Avg Unit Size 1,067
Date Closed:
Sales price:
$ / Unit:
$ / SQFT:
Cap Rate:
6/10/13
$385,000
$64,167
$60
Date Closed:
Sales price:
$ / Unit:
$ / SQFT:
Cap Rate:
6/7/13
$1,600,000
$59,259
$76
Date Closed:
Sales price:
$ / Unit:
$ / SQFT:
Cap Rate:
4/24/13
$910,000
$47,895
$59
7.90%
Date Closed:
Sales price:
$ / Unit:
$ / SQFT:
Cap Rate:
6/12/12
$1,219,000
$50,792
$46
7.50%
Cedar Terrace - 27 Units
Address: 704 Elliott Rd
Newberg
Year Built: 1975
Total Units: 27
Avg Unit Size 783
Adams Apartments - 19 Units
Address: 120-135 NE 19th St
McMinnville
Year Built: 1974
Total Units: 19
Avg Unit Size 806
The Oaks - 24 Units
Address: 1200 N Meridian St
Newberg
Year Built: 1960
Total Units: 24
Avg Unit Size 1,097
REGENCY TERRACE
9
C OMPA RA B LE
SA LE S
1
COMPARABLE RENTS
•
The overall average rent for the properties surveyed is $619 and $0.91 per square foot. This is based
on an average unit square footage of 639. The unit mix includes units not found at Regency Terrace or
Center Street including some studio apartments.
•
A comparison of the one and two-bedroom unit types indicates that it is possible to increase rents
at both Regency Terrace and Center Street. The assets have some of the lowest rents amongst
the comparables. Only Rivercrest Apartments offers some one-bedroom units that are slightly less
expensive.
Bedroom/
Bathroom
Square
Foot
Average
Rent
Rent Per
Square Foot
Woodview Village
0/1
530
$560
$1.06
Center Street
1/1
525
$530
$1.01
Rivercrest
1/1
600
$550
$0.92
Woodview Village
1/1
620
$650
$1.05
Regency Terrace
1/1
650
$550
$0.85
Rivercrest Apartments
1/1
650
$525
$0.81
Chehalem Creek
1/1
800
$650
$0.81
East Ninth
1/1
Woodview Village
2/1
740
$750
$1.01
Center Street
2/1
800
$593
$0.74
Regency Terrace
2/1
800
$579
$0.72
Rivercrest Apartments
2/1
800
$650
$0.81
Rivercrest
2/1
800
$650
$0.81
East Ninth
2/1
C OMPA RA B LE
RE N TS
Property
$550
$650
Regency Terrace
2 / 1.5
850
$588
$0.69
Center Street
2 / 1.5
1000
$720
$0.72
REGENCY TERRACE 1 0
C OMPA RA B LE
RE N TS
RENT COMPARABLES
REGENCY TERRACE 1 1
AR EA
DES CR IP TION
REGENCY / CENTER 1 2
Regency Terrace and Center Street Apartments are
located in the City of Newberg in Yamhill County,
25 miles southwest of Portland via Highway 99W.
Yamhill County is primarily agricultural in character
and is buffered by a greenbelt of rural forest and
farmland.
Access and Linkages
Primary access to the area is via Highway 99W
which connects Newberg to Portland to the
northeast. The highway extends westward through
the City of Newberg, southwest to the City of
McMinnville.
Bus transit is offered through four public bus lines
and Greyhound. Nearby Sportsman Airpark is a
privately owned airport; the nearest full service
airport is Portland International.
Demographic Factors
A demographic profile of the surrounding area,
including population, households, and income data,
is summarized as follows:
George Fox University is located less than one mile
north of the Regency and Center Street Apartments
and the Newberg campus of Portland Community
College is located less than two miles east.
Conclusion
Newberg is expected to provide a stable residential
environment that will continue to grow as the
density of the greater Portland area increases. Its
small town atmosphere in proximity to population
centers such as the City of Portland makes it an
inviting and attractive place to call home.
NEWBERG AREA
TOP EMPLOYERS 2012*
Employer
# of Employees
A-dec (dental equip. mfg)
970
Newberg Public Schools
573
Providence Newberg Hospital
545
Population in the area has grown since the 2010
census, and this trend is projected to continue
over the next five years.
George Fox University
500
SP Newsprint
265
Fred Meyer
240
Median household income is $51,742, which is
higher than the household income for the State
of Oregon.
The Allison Inn
200
Climax Portable Machine Tools
165
Friendsview Retirement Comm.
160
City of Newberg
150
Hazelden Springbrook
110
Chehalem Youth & Family Svcs.
85
Harris Thermal Transfer Products
75
Ushio Oregon Inc.
75
Dental Components, Inc.
70
PPM Technologies
64
Safeway
56
A.R.E. Mfg.
35
•
The current population within a 3-mile radius of
the subject is 29,158.
•
The average household size is 2.7.
•
•
The Providence Newberg Hospital opened a
400,000 square foot regional medical center in 2005
to accommodate the area’s growing population.
The $58 million facility includes expanded surgical,
emergency and outpatient services; two medical
office buildings; several support buildings, including
a community conference center and educational
facility; as well as parking for 1,220.
Land Use
The Highway 99W corridor is the primary
commercial arterial in and through the City of
Newberg. This area experienced significant
commercial and retail growth through the late1990s. Notable commercial entities include a
Fred Meyer shopping center and a Bi-Mart store.
Other land uses along Highway 99W include bank
branches, gas stations, full- and limited-service
restaurants, used car dealerships, small offices, and
freestanding storefront retail buildings. Closer to
Regency and Center Street are retail areas located
in downtown Newberg.
*Chehalem Valley Chamber of Commerce
REGENCY TERRACE 1 3
A RE A
D ESCRIP T ION
NEWBERG SUB MARKET
O F F E R I N G
M E M O R A N D U M
R E G E NC Y T E R R AC E
A P AR T ME NT S
A 14-u nit P r o p e r ty i n Ne wb e r g , OR
O F F E R I N G
M E M O R A N D U M
ALL APARTMENTS
ALL THE TIMESM
503.241.5541
www.hfore.com