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OFFERING MEMORANDUM
366 SW M Street, Madras, OR
$5,950,0006.16% Cap Rate
64-UNIT TURNKEY CENTRAL OREGON COMPLEX
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RON ROSS, CCIMPrincipal BrokerDirect 541.322.1230Cell [email protected]
EXCLUSIVELY LISTED BY:
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TERRY O’NEIL, CCIMBrokerDirect 541.848.4060Cell [email protected]
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EXECUTIVE SUMMARY
PROPERTY OVERVIEW
FINANCIAL INFORMATION
MARKET OVERVIEW
CONTENTS
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EXECUTIVE SUMMARY
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Price $5,950,000
Cap Rate 6.16%
Price Per Door $92,969
Address 366 SW M Street, Madras, OR 97741
Website www.cascade-ridge.com
Tax Map/Lot 111311DC/0200
Lot Size 4.57 AC / 222,592 SF
Zoning Madras Multi-Family Residential - R2
Building Area 56,736 SF
Year Built 1996
Number Of Units 64
Number Of Stories 2
Number of Buildings 8
PROP
ERTY
SUM
MARY
THE OFFERINGThis 64-unit apartment complex is truly a gem of Central Oregon. The Cascade Ridge Apartments are in outstanding condition with impressive recent improvements and upgrades. This is a pride of ownership property. As of August 2019, it is 100% occupied with a waiting list.
Built in 1996, this attractive complex features 28 three bedroom/two bath units and 36 two bedroom/one bath units. There are seven two-story apartment buildings, an office/laundry/maintenance shop building and a storage shed. The three-bedroom units all come with washer and dryers. All units contain wall-mounted air conditioning and cadet heat-ing. Amenities include a nice playground with new equip-ment, barbecue grills with patios and tables, and beautiful landscaping. There are 110 paved onsite parking spaces.
The property is situated on a spacious 4.57 acres. This low-density living environment features attractive open and green space. A paved and lighted city walking/bik-ing trail abuts the property. This is part of the 7 mile Willow Creek trail system that surrounds Madras. A short distance from the apartments lies a commu-nity fishing pond in a parklike setting enjoyed by many of the residents.
A unique feature of this complex are its two executive suites. These three-bedroom units have been supremely upgraded and completely furnished. These are very high-end units and are generally occupied by corporate clients, traveling doctors and nurses on 3- to 4-month contracts, and Erickson Air pilots.
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TWO EXECUTIVE HIGH-END SUITES
100% OCCUPIED WITH A WAITING LIST
EXTENSIVE REMODELS AND UPGRADES
TURNKEY OPERATION FOR NEW OWNER
BBQ GRILLS WITH PATIOS AND PLAYGROUND
CONSISTENT MONTHLY CASH FLOW
ALL-TIME LOW MARKET VACANCY
WELL MAINTAINED WITH BEAUTIFUL LANDSCAPING
INVESTMENT HIGHLIGHTS
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IMPROVEMENTS AND UPGRADESThe Portland-area couple that bought this property in 2013 have infused their labor and love, and their dollars, into making this a premier, pride of ownership asset. Upgrades include complete exterior painting of all buildings, new playground equipment, patio and patio furniture, barbecue grills, garbage enclosure, remodel of office and laundry room, replacement of all laundry room plumbing, new beautiful landscaping, and upgrading of 56 of the 64 units including incredible high-end remodels on five units and furnishing of two units. The parking lot is scheduled for crack sealing, slurry coating, and re-striping in August of 2019. There is little or no deferred maintenance. This should be a turnkey operation for a new owner.
OPPORTUNITYCascade Ridge Apartments is the most upscale multi-family property in the area and yet maintains extremely affordable rents. The current 100% occupancy with a waiting list validates the potential for revenue increases. The majority of unit rents increase by $50 on September 1, 2019 and the rest are scheduled for $50 increases during the next few months. Re-rents are getting between $100 and $200 increases.
Operating expenses have been running high primarily due to the many improvements and upgrades and some management transition. There is a large opportunity for new ownership to gain some cost controls and efficiencies for further upside opportunity.
There is a housing shortage in the community with continuing population growth forecast. It is highly unlikely that there will be new product delivered into this market until such time as rents increase considerably. Competition for this complex is minimal and should remain so for the foreseeable future.
WEBSITEThe apartments do have their own professionally designed website at www.cascade-ridge.com.
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PROPERTY OVERVIEW
101010
1111
Address 366 SW M Street, Madras, OR 97741
Tax Map/Lot 111311DC/0200
County Jefferson
Zoning Madras Multi-Family Residential - R2
Land Area 4.57 AC / 222,592 SF
Property Type Multi-Family
Total Building Size 56,736 SF
Year Built 1996
Number of Buildings 8
Building Mix
Five (5) 8-Plex Buildings Two (2) 12-Plex Buildings One (1) Office/Laundry/Maintenance Shop Building One (1) Free-Standing 10x20 Storage Shed
Office/Laundry/ Maintenance
Free-standing structure with manager’s office, laundry and maintenance shop with a roll up door
Parking 110 Paved, Uncovered Spaces
Number of Units 64
Unit Mix 36 — 2 Bed/1 Bath (Approx. 760 SF) 28 — 3 Bed/2 Bath (Approx. 980 SF)
Heating/Cooling Wall-mounted air conditioning and cadet heating
Features and AmenitiesPlayground, two BBQ/picnic areas, garbage enclosure, access to pedestrian and bike path, beautifully landscaped, storage shed and maintenance shop
PROP
ERTY
SUM
MARY
UNIT
S &
AMEN
ITIES
BUILD
INGS
PROPERTY DETAILS
NEAR BIKING/WALKING TRAILS AND A NICELY LANDSCAPED
FISHING POND
7 TWO-STORY APARTMENT BUILDINGS
UPSCALE MULTI-FAMILY PROPERTY WITH MANY
RECENT UPGRADES
LOCATED 45 MILES NORTH OF BEND ON THE SOUTHWEST
SIDE OF MADRAS
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CONDITION OF SALEDetailed due diligence information can be requested from the listing team. In order to view confidential information, all parties will be required to execute a Confidentiality Agreement.
All property tours must be scheduled in advance through the Compass Commercial listing team.
FINANCINGThe Purchaser may place new financing, or there is existing debt of approximately $2,000,000 with Washington Federal that could be assumed.
OFFERING TERMSPlease submit offers via email to the listing team.
Interested parties must submit a written Letter of Intent (“LOI”) or a Purchase & Sales Agreement (“PSA”) outlining the terms and conditions under which they propose to purchase the Property. Such terms must include the following:
• Purchase price• Company background and financial capability• Source of capital (Equity/Debt)• Amount and form of earnest money deposit(s)• Required contingency periods (inspection,
financing, etc.), including any extension(s)• Closing timeline
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GREAT CENTRAL OREGON LOCATIONMadras, Oregon is situated 45 miles from the
dynamic, growing, and renowned community of Bend. It is 30 miles from Redmond and the
Regional Airport, and 120 miles from Portland. It lies at the foot of the Cascade Mountain range with spectacular views and recreational
opportunities abounding. The Daimler Trucks testing facility is currently undergoing a major expansion on over 270 acres at the Madras
Airport. Other major employers include Warm Springs Tribal Government, Bright Wood
Corporation, Deer Ridge Correctional Facility, Keith Manufacturing, St. Charles Hospital, and Erickson Air.
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FINANCIAL INFORMATION
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APOD – BROKER PROFORMAINCOMEPotential Rental Income $689,340
Less: Vacancy & Credit Loss $34,467 5%Effective Rental Income $654,873
Plus: Other Income $4,000Gross Operating Income $658,873
EXPENSESAdvertising $2,000 0.31%Admin/Office Supplies $9,000 1.38%Legal & Accounting $2,100 0.32%Management-Offsite $29,682 4.55%Payroll Management-Onsite $33,279 5.10%Payroll Maintenance-Onsite $35,359 5.42%Payroll Taxes/Work Comp $7,500 1.15%Payroll Admin Fee $2,100 0.32%Misc Tax, License, Permits $1,000 0.15%Utilities-Electric $7,500 1.15%Utilities-Water/Sewer $40,000 6.13%Utilities-Garbage $20,000 3.07%Telephone/Internet $6,000 0.92%Maintenance Man Free Unit $10,800 1.66%Landscape $7,000 1.07%Maintenance & Repairs $18,000 2.76%Exterminator $3,000 0.46%Cleaning $6,000 0.92%Real Estate Taxes $26,413 4.05%Insurance $12,282 1.88%Reserves $13,177 2.00%Total Expenses $292,192 44.79%
NET OPERATING INCOME $366,681Average Rents per UnitAverage Costs per UnitAverage Expense Ratio
INVESTMENT SUMMARYCap Rate
Sales PricePrice/Unit
Gross Rent Multiple 9.0
6.16%$5,950,000
$92,969
Current Rents
Current Rents
$10,295$4,56644.79%
INCOMEPotential Rental Income $689,340
Less: Vacancy & Credit Loss $34,467 5%Effective Rental Income $654,873
Plus: Other Income $4,000Gross Operating Income $658,873
EXPENSESAdvertising $2,000 0.31%Admin/Office Supplies $9,000 1.38%Legal & Accounting $2,100 0.32%Management-Offsite $29,682 4.55%Payroll Management-Onsite $33,279 5.10%Payroll Maintenance-Onsite $35,359 5.42%Payroll Taxes/Work Comp $7,500 1.15%Payroll Admin Fee $2,100 0.32%Misc Tax, License, Permits $1,000 0.15%Utilities-Electric $7,500 1.15%Utilities-Water/Sewer $40,000 6.13%Utilities-Garbage $20,000 3.07%Telephone/Internet $6,000 0.92%Maintenance Man Free Unit $10,800 1.66%Landscape $7,000 1.07%Maintenance & Repairs $18,000 2.76%Exterminator $3,000 0.46%Cleaning $6,000 0.92%Real Estate Taxes $26,413 4.05%Insurance $12,282 1.88%Reserves $13,177 2.00%Total Expenses $292,192 44.79%
NET OPERATING INCOME $366,681Average Rents per UnitAverage Costs per UnitAverage Expense Ratio
INVESTMENT SUMMARYCap Rate
Sales PricePrice/Unit
Gross Rent Multiple 9.0
6.16%$5,950,000
$92,969
Current Rents
Current Rents
$10,295$4,56644.79%
NOTE: Most rents increase by $50 on September 1, 2019. Most of the rest increase by $50 in coming months. Annual income used herein are actual rents and incorporating all increases through year end 2019. Rerents are seeing increases of $100 to $200.
DISCLAIMER: This is a broker proforma. The statements and figures herein are not guaranteed or warranted by the Broker or Seller. They are derived from sources deemed reliable and are an estimate of how the property could perform under certain circumstances. Buyers are advised to review actual property financial history (during a due diligence investigatory period) and make their own judgments and determination as to future and past financial performance of this property.
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CASCADE RIDGE APARTMENTS RENT ROLLBLDG UNIT BED BATH
UNITSF
2019 RENTAL INCREASES
EXPIRATIONACTUAL
RENTEOY 2019
RENTSA A-A01 3 2 1,008 Furnished $1,700 $1,700A A-A02 3 2 1,008 6/30/2020 $1,200 $1,200A A-A03 2 1 792 Sep-19 7/31/2020 $700 $750A A-A04 2 1 792 Sep-19 9/28/2019 $700 $750A A-A05 2 1 792 Sep-19 5/20/2020 $800 $850A A-A06 2 1 792 Sep-19 10/31/2019 $700 $750A A-A07 2 1 792 Nov-19 8/6/2019 $800 $850A A-A08 2 1 792 Sep-19 6/30/2020 $700 $750A A-A09 2 1 792 Sep-19 4/6/2020 $900 $950A A-A10 2 1 792 Sep-19 10/31/2019 $700 $750A A-A11 3 2 1,008 Furnished $1,700 $1,700A A-A12 3 2 1,008 Sep-19 6/1/2020 $800 $850
Totals Bldg A 12 10,368 $11,400 $11,850B B-B01 3 2 1,008 Sep-19 11/2/2019 $750 $800B B-B02 3 2 1,008 Sep-19 6/1/2020 $800 $850B B-B03 2 1 792 6/16/2020 $850 $850B B-B04 2 1 792 Sep-19 8/24/2019 $650 $715B B-B05 2 1 792 Sep-19 $700 $750B B-B06 2 1 792 5/19/2020 $700 $700B B-B07 3 2 1,008 Oct-19 1/31/2020 $800 $850B B-B08 3 2 1,008 Nov-19 8/1/2019 $1,050 $1,100
Totals Bldg B 8 7,200 $6,300 $6,615C C-C01 3 2 1,008 Sep-19 6/9/2020 $800 $850C C-C02 3 2 1,008 Sep-19 10/27/2019 $800 $850C C-C03 2 1 792 Nov-19 10/21/2019 $800 $850C C-C04 2 1 792 6/23/2020 $850 $850C C-C05 2 1 792 5/21/2020 $850 $850C C-C06 2 1 792 5/22/2020 $850 $850C C-C07 3 2 1,008 5/31/2020 $800 $800C C-C08 3 2 1,008 7/8/2020 $800 $800
Totals Bldg C 8 7,200 $6,550 $6,700E E-E01 3 2 1,008 1/31/2020 $1,200 $1,200E E-E02 3 2 1,008 Sep-19 5/1/2020 $800 $850E E-E03 2 1 792 Sep-19 7/22/2020 $700 $750E E-E04 2 1 792 Sep-19 3/1/2020 $700 $750E E-E05 2 1 792 Sep-19 7/17/2020 $700 $750E E-E06 2 1 792 7/7/2020 $700 $700E E-E07 3 2 1,008 Dec-19 5/23/2020 $950 $1,000E E-E08 3 2 1,008 10/25/2019 $1,000 $1,000
Totals Bldg E 8 7,200 $6,750 $7,000
BLDG UNIT BED BATHUNITSF
2019 RENTALINCREASES
EXPIRATIONACTUAL
RENTEOY 2019
RENTSF F-F01 3 2 1,008 3/25/2020 $1,130 $1,130F F-F02 3 2 1,008 $950 $950F F-F03 2 1 792 Sep-19 5/9/2020 $700 $750F F-F04 2 1 792 7/8/2020 $800 $800F F-F05 2 1 792 Jul-19 $850 $900F F-F06 2 1 792 4/16/2020 $900 $900F F-F07 3 2 1,008 5/1/2020 $800 $800F F-F08 3 2 1,008 Dec-19 11/19/2019 $1,050 $1,100
Totals Bldg F 8 7,200 $7,180 $7,330G G-G01 3 2 1,008 4/1/2020 $1,200 $1,200G G-G02 3 2 1,008 Sep-19 5/1/2020 $800 $850G G-G03 2 1 792 Sep-19 3/26/2020 $700 $750G G-G04 2 1 792 Sep-19 7/10/2020 $900 $950G G-G05 2 1 792 Nov-19 10/1/2019 $850 $900G G-G06 2 1 792 Sep-19 5/20/2020 $800 $850G G-G07 3 2 1,008 Sep-19 6/2/2020 $800 $850G G-G08 3 2 1,008 Sep-19 5/1/2020 $800 $850
Totals Bldg G 8 7,200 $6,850 $7,200H H-H01 3 2 1,008 5/1/2020 $1,100 $1,100H H-H02 3 2 1,008 Nov-19 10/31/2019 $800 $850H H-H03 2 1 792 11/20/2019 $850 $850H H-H04 2 1 792 6/27/2020 $900 $900H H-H05 2 1 792 1/4/2020 $800 $800H H-H06 2 1 792 Sep-19 11/30/2019 $800 $850H H-H07 2 1 792 12/4/2019 $800 $800H H-H08 2 1 792 $800 $800H H-H09 2 1 792 Dec-19 11/13/2019 $850 $900H H-H10 2 1 792 12/11/2019 $850 $850H H-H11 3 2 1,008 Sep-19 $800 $1,150H H-H12 3 2 1,008 Sep-19 12/11/2019 $850 $900
Totals Bldg H 12 10,368 $10,200 $10,750
Totals 64 56,736 $55,230 $57,445
2020
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MARKET OVERVIEW
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MADRAS, OREGONWith a population of over 6,800, Madras is a small town in Central Oregon 45 miles north of Bend. The community has a blend of industry, agriculture and recreation. Residents enjoy a variety of employment opportunities, including manufacturing, aviation, agriculture, retail, education, tourism and health care. Major employers include Daimler Trucks testing facility, Warm Springs Tribal Government, Bright Wood Corporation, Deer Ridge Correc-tional Facility, Keith Manufacturing, St. Charles Hospital, and Erickson Air.
LIFESTYLE DESTINATIONLocated in Central Oregon, Madras offers high desert scenery and panoramic views of the magnificent Cascade Mountain Range with many outdoor recreation opportunities including cycling, fishing, golf, hiking, rockhounding, and water sports with winter sports just a short drive away.
The city has an exceptional aquatic center, Performing Arts Center, extensive green spaces, skate park, trail system and a kids’ fishing pond. Nearby attractions include Indian Head Casino, Erickson Aircraft Collection, the Palisades at Lake Billy Chinook, the Metolius Wild & Scenic River, Lake Simtustus, Mt. Jefferson Wilderness area, and so much more. Madras was one of the premier viewing locations for the August 21, 2017 Total Solar Eclipse where approximately 100,000 visitors converged for the experience of a lifetime!
SOURCE: City of Madras
Madras Aquatic Center
Lake Billy Chinook
Erickson Aircraft Collection22
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DAIMLER TRUCKS EXPANSION
MADRAS POPULATION
6,999MADRAS MEDIAN
HOUSEHOLD INCOME
$45,438JEFFERSON COUNTY
UNEMPLOYMENT RATE
4.1%
DAIMLER TRUCKS TEST FACILITY IN MADRAS, OREGONIn 2014, Daimler Trucks North America (DTNA) started a world-wide search for a site to build a state-of-the-art $18.7 million test facility. EDCO worked closely with DTNA throughout the extensive process, navigating site selection, tax incentives and expanding the local Enterprise Zone boundary, among other things. Billed as the High Desert Proving Grounds, DTNA chose Madras, Oregon for the 87-acre site which includes a 3.5-mile Durability Test Track, allowing engineers to simulate a typical vehicle’s million-mile lifespan in just six months. The facility opened in May 2017 – a timeline that would not have been possible without help from EDCO. This project was also awarded the 2016 Business Development Success Story of The Year by the Oregon Economic Development Association (OEDA).
SOURCE: EDCO 2018 Central Oregon Profile
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ECONOMYCentral Oregon has a reputation for welcoming new and relocating businesses without sacrificing workforce, talent, quality healthcare, transportation or infrastructure. A driving force behind the region’s economic
performance is a collaborative and inclusive entrepreneurial community, demonstrated by the high number of new business registrations, which outpaces far larger cities. Bend, Oregon registered one new business for every 28 residents in 2017 – nearly twice the state average.
Given its size, Central Oregon boasts a high number of community resources and assets available to new and growing businesses, including the largest angel conference in the West, the Bend Venture Conference. Additionally, Oregon’s overall business costs rank significantly lower than its neighbors to the north and south. Average electricity rates,
natural gas rates, state and local sales tax rates and business tax climates in particular are significantly lower than other states in the Pacific Northwest.
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CENTRAL OREGONCentral Oregon has led Oregon’s population growth over the last two decades and continues to be one of the fastest growing areas of the country. For ten consecutive years Central Oregon has led the state in job growth, creating a region that is characterized by dynamic small businesses and entrepreneurial activity. The area boasts strong clusters in high technology (software, hardware and energy), advanced manufacturing, biosciences, renewable energy, brewing and distilling, value-added food products and recreation equipment.
For most residents Central Oregon is a lifestyle choice, offering a friendly environment, year-round recreation options and world-class amenities. The region is served by Roberts Field, a commercial airport offering service at Redmond Municipal Airport.
Redmond Municipal Airport
Redmond Municipal Airport provides commercial air service with 25 daily round-trip flights to Denver, Los Angeles, Phoenix, Portland, Salt Lake City, San Francisco and Seattle via four major carriers (Alaska, America, Delta and United). The airport is undergoing a $5.2 million expansion to meet the rising demand for transit in and out of the region.
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LIFESTYLECentral Oregon offers a rare mix of city amenities and restful isolation, including the slower speed of a small town with a medical community and infrastructure not normally seen in a region of its size. Additionally, Central Oregon residents maintain a work/life balance that is difficult to achieve elsewhere.
EDUCATIONCentral Oregon is well-recognized for its high level of education, with some of the best K-12 public schools in the nation. Additionally, the region’s higher education opportunities abound. From Oregon State University-Cascades’ recent expansion to Central Oregon Community College’s four campuses in the region, there are opportunities for all to obtain a quality education. Madras has a branch of Central Oregon Community College a few miles away from Cascade Ridge Apartments.
30 GOLF COURSES
MILES OF TRAILS
THRIVING ARTS & CULTURE
300 DAYS OF SUNSHINE
30 BREWERIES & COUNTING
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1 Mile 3 Miles 5 Miles Madras, OR Jefferson County2019 Population 4,704 10,043 12,172 6,999 24,2462019 Daytime Population 4,825 11,090 12,336 9,028 23,1222024 Population 4,947 10,608 12,841 7,387 25,6152010-2018 Growth Rate 0.99% 1.10% 1.15% 1.10% 1.20%2018-2023 Growth Rate 1.01% 1.10% 1.08% 1.08% 1.10%2019 Median Age 35.0 37.8 38.9 36.9 41.52019 Households 1,702 3,714 4,257 2,525 8,7022024 Households 1,783 3,914 4,488 2,658 9,2152010-2018 Growth Rate 0.90% 1.03% 1.04% 1.01% 1.20%2018-2023 Growth Rate 0.93% 1.05% 1.06% 1.03% 1.15%2019 Avg. Household Size 2.76 2.68 2.72 2.75 2.682019 Avg. Household Income $52,991 $61,932 $63,892 $59,554 $66,7612019 Med. Household Income $40,500 $46,847 $48,688 $45,438 $52,0342019 Per Capita Income $19,213 $23,019 $24,137 $22,169 $24,6332019 Avg. Home Value $166,096 $178,619 $189,153 $173,162 $253,8252019 Housing Units 1,959 4,198 4,792 2,914 10,8312019 Vacant Housing Units 257 484 535 389 2,1292019 Owner Occupied Units 891 2,038 2,373 1,332 5,6862019 Renter Occupied Units 811 1,676 1,884 1,193 3,0162019 Population Age 18+ 3,409 7,464 9,261 5,169 18,775High School Diploma 677 1,615 2,026 1,147 4,034Bachelor’s Degree 395 835 1,007 540 2,150Graduate/Professional Degree 136 376 499 227 9812019 Businesses 254 427 465 379 6892019 Employees 1,951 3,992 4,459 4,298 7,3172019 Unemployment Rate 7.3% 7.1% 6.5% 8.2% 4.1%
POPU
LATIO
NIN
COME
HOUS
EHOL
DSHO
USIN
GED
UCAT
ION
LABO
RDEMOGRAPHICS
Madras Demographic Map
Source: ©2019 Esri
July 24, 2019
©2019 Esri Page 1 of 1
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Madras Demographic Map
Source: ©2019 Esri
July 24, 2019
©2019 Esri Page 1 of 1
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DISCLAIMER & EXCLUSIVITYDISCLAIMER: This marketing package has been prepared by Compass Commercial Real Estate Services (Compass Commercial) in full cooperation with the Seller of the Property solely for the purposes of providing preliminary information to prospective purchasers. It is not intended as the sole source of property and operational data and should not be relied on in place of appropriate due diligence activities. Neither Compass Commercial nor its agents can guarantee accuracy and no liability is assumed for financial, operational, physical, or other information provided herein including, but not limited to, errors and omissions, transmittal of inaccuracies, prior sale, price adjustments, or removal from marketplace without notice. Any indicated value of this investment is based upon assumptions, projections and estimates, which are variable by nature and subject to changing economic conditions. The value of this investment to you will also depend on tax and other factors, which should be evaluated by your tax and legal experts or advisors. It is your responsibility to independently confirm information received about the property to your satisfaction and you are urged to seek advice from your own attorney, CPA, design consultant, franchise representative, and/or other qualified professionals in your investigation of this opportunity.
EXCLUSIVE: The property represented herein is exclusively listed for sale by Compass Commercial Real Estate Services. All negotiations for the purchase shall be conducted through Compass Commercial Real Estate Services.
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RON ROSS, CCIMPrincipal BrokerDirect 541.322.1230Cell [email protected]
TERRY O’NEIL, CCIMBrokerDirect 541.848.4060Cell [email protected]
EXCLUSIVELY LISTED BY:
366 SW M Street, Madras, OR