Dear Valued Clients and Friends,marketing.joneslanglasalle.com/PNW/websites/StateOfThe... ·...

JJLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and, on behalf of clients, managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $136 billion. At year-end 2016, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of more than 77,000. As of December 31, 2016, LaSalle Investment Management has $60.1 billion of real estate under asset management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.

JLL.com

Dear Valued Clients and Friends, As we reflect on 2016 we are pleased to have experienced another strong year across the Pacific Northwest. With the sustained strength of the economy we saw many commercial developer’s dreams and plans spring to life. As we witnessed the long anticipated pipeline of new projects begin to break ground we also watched those that were already underway climb further and further into the sky.

Over the year, demand continued to outpace supply on the industrial front and we welcomed many new retailers into our storefronts and suburban malls. Housing demand has hit an all-time high, as we expect to deliver more than 10,000 new apartment units in 2017.

Although our skylines have changed over the last year, our market fundamentals have not. New development, population growth, quality of life, a highly educated workforce, demand, absorption, pre-leasing activity and rising rents are all testaments to the overall attractiveness of the Pacific Northwest region from an investment standpoint.

We were fortunate to complete several successful acquisitions in the past year and add several key members to our team, helping to further strengthen our position as a market leader in Seattle, Bellevue and Portland. In addition, we expanded our local Investor Services Platform with the addition of a highly regarded finance team.

The launch of our new brand, Achieve Ambitions, was another evolutionary step for us and we are enjoying the very positive feedback we are receiving from across the globe.

As we share our views of 2016 and turn the corner into 2017 please join us as we celebrate our 14th Annual State of the Market Event. We are honored to welcome so many familiar faces and look forward to forging strong relationships with those of you who may be joining us for the first time this year.

Thank you for your continued partnerships and we look forward to a dynamic and prosperous 2017.

- Your JLL Pacific Northwest Investment Team

CAPITAL MARKETS TEAM

Bellevue

Ann Chamberlin

Managing Director +1 425 974 4022 [email protected]

Seattle Multifamily

David Young


Stuart Williams


Corey Marx


Lori Hill


Dawn Brandenburg

Vice President +1 206 607 1785 [email protected]

Don Flanigan

Vice President +1 206 607 971 7020 [email protected]

Matt Kemper

Vice President +1 206 607 1752 [email protected]

Mark Thygesen

Retail Associate +1 206 607 1737 [email protected]

JLL Capital Markets team

Seattle & Portland 2016 Investment Overview 7

Portland PNW Finance

Buzz Ellis


Ray Allen


Paige Morgan

Executive Vice President +1 503 972 8098 [email protected]

Adam Taylor

Associate +1 503 972 8607 [email protected]

Zach Goodwin

Senior Associate +1 206 607 1791 [email protected]

Drew Heitstuman

Associate +1 206 971 7021 [email protected]

SEATTLE WAS RANKED THE TOP MARKET IN TERMS OF LOCAL INVESTOR DEMAND AND THE SECOND BEST MARKET FOR INVESTMENT POTENTIAL”

Seth Heikkila

Senior Vice President +1 206 607 1732 [email protected]

Northern California Finance

John Manning


Alex Witt

Executive Vice President +1 415 395 4976 [email protected]

8

JLL Capital Markets group

Leverage the expertise of a global leader

Devised from comprehensive research, pervasive market knowledge, ethical practice and superior professionalism, the JLL Capital Markets team is focused on the unique requirements of our investor clients. Our in-depth local market and global investor knowledge delivers best-in-class solutions for clients—whether a sale, financing, repositioning, advisory or recapitalization execution.

With a diverse, unified platform of shared expertise through a single point-of-entry, we help you achieve your priority capital objectives:

Investment Sales

Benefit from sales advisory services grounded in solid market analysis, sophisticated portfolio structuring support, complex valuation, thorough underwriting capabilities, reliable investor intelligence and practical marketing expertise.

Real Estate Investment Banking

Gain direct, strategic access to global money centers and real estate investment banking professionals who manage debt and equity financing across all asset types and scenarios.

Finance

Access an unmatched combination of expertise in finance, lease accounting, tax and transaction structuring with global access to capital that helps real estate occupiers and net lease investors make the best financial decisions to optimize transaction economics and maximize asset value.

Special Asset Services

Obtain transaction execution, valuation and advisory services for non-performing and sub-performing real estate assets concerning financial institutions and special servicers.


Navigate capital solutions

As a trusted business advisor, our Finance team helps you navigate the capital markets to obtain the best capital solutions for your particular requirements. With billions of dollars in debt and equity transaction experience and deep insights into capital flows and trends around the world, we are well-qualified to advise on creative structures and innovative solutions. Clients seeking direct access to global capital also benefit from our on-the-ground access and contacts in every money center around the world.

We provide access to the lowest cost of capital on the best terms via a competitive auction process and creative structuring. Through our broad array of relationships and a proprietary database that contains hundreds of lending and equity sources—both domestic and foreign— we provide a link between our clients and opportunity, finding appropriate, prequalified groups of capital providers and investors and creating a competitive market to get the best possible pricing and deal structure. Because we don’t align with any specific capital source, we deliver objective advice and focus exclusively on your needs. Your project receives senior-level attention—the top leaders of our group are always involved on a day-to-day basis.

Our Finance professionals devise capitalization strategies and manage debt and equity placements across all asset types.

• Acquisition and permanent financing

• Bridge and mezzanine financing

• Construction financing

• Multifamily lending platform that includes Fannie Mae, Freddie Mac and HUD/GNMA

• Performing note sales

• Recapitalization strategies

• Asset advisory

JLL Finance group

SEATTLE

Seattle

OfficeIndustrialRetailMultifamily


2016 Seattle office sales ($10M+) overview

Sales volume declines slightly in 2016, but market record for pricing is eclipsed once again

More than $4.3 billion in office sales closed in 2016, nearly matching 2015’s total and far exceeding the 10-year historical average. In total, the market saw 55 transactions over $10 million, which makes 2016 the most active year for office investment sales since 2007. A new market record for pricing was achieved in the fourth quarter, when KOMO Plaza was purchased by GI Partners for $276.0 million, or $940 per square foot. This is a 72.5 percent price increase from when Hines purchased the building for $160 million just five years ago. Prior to 2016, the region had not seen an office building trade above $800 per square foot. Urban Union, a 12-story Trophy tower that delivered in Q3, went under contract in Q4 for $268.9 million, or $924 per square foot. The largest transaction of the year occurred in Q2, when GLL and Vestas Investment Management acquired Safeco Plaza for $387.0 million, or $488 per square foot. The 50-story Seattle CBD building, which was recently renovated and 68 percent occupied by the eponymous insurance company at the time of sale, previously traded for $163.5 million in mid-2005, so the current sale represents an increase in value of more than 136 percent. Overall, the most active submarkets for sales in 2016 were Lake Union, Seattle CBD and Bellevue CBD, with total volumes of $1.3 billion, $873.8 million and $595.0 million, respectively.

Global interest in Seattle real estate has perhaps never been stronger. Seattle surpassed San Francisco and Washington D.C. in this year’s AFIRE Foreign Investment Survey. It is now the fourth most favored U.S. market amoung foreign commercial real estate

investors. 2016 saw three out of the five largest office transactions – Safeco Plaza, West 8th and Amazon Phase VIII – include foreign buyers. German company Deutsche Asset Management purchased West 8th for $370.0 million, or $716 per square foot. Mirae Asset Global Investments, a South Korean-based group, along with Metzler, acquired Amazon Phase VIII for $246.8 million, or $777 per square foot. According to ULI and PwC’s Emerging Trends in Real Estate 2017 report, Seattle was ranked the top market in terms of local investor demand and the second best market for investment potential.

The fourth quarter was by far the most active quarter in 2016, with more than $1.7 billion in office assets trading, comprising 39.8 percent of the total sales volume. This was partially due to the largest local portfolio sale of the year. Blackstone acquired the Laguna Office Complex, Daytona Office Campus and the 5th & Bell Buildings for $300.0 million. The properties within that portfolio, along with Civica Office Commons and KOMO Plaza, traded for $766.0 million, positioning Hines as the most active seller in 2016. Though the total volume didn’t quite reach 2015’s total of $4.5 billion, the average price per square foot was up 18.7 percent year-over-year, and 48.5 percent greater than the 10-year average. Market conditions will continue to favor landlords in 2017, as they remain in position to hold properties and collect steadily increasing rents or capitalize on pricing that has hit an all-time high in the market.

2016 THE MOST ACTIVE YEAR FOR OFFICE INVESTMENT SALES SINCE 2007

16

New inventory is disappearing quickly, as flight to quality trend intensifies among tech tenants

Ten office buildings were delivered in the Seattle-Bellevue region in 2016, adding 2.3 million square feet of Class A inventory to the market. 97.8 percent of the space was leased at the time of completion. 5.9 million square feet of product is currently under construction, with 4.6 million square feet scheduled to deliver in 2017, 51.2 percent of which has been accounted for. This would make 2017 the most active year for deliveries since 2000. According to Rider Levett

Bucknall’s North American Crane Index, Seattle’s skyline leads the nation for most construction cranes in the central business district. Nearly 50 percent of all cranes currently in use in North America are in Seattle, Chicago and Toronto. Average asking rents for new construction space in Puget Sound are being marketed at $48.40 per square foot, representing a 17.1 percent premium over existing Class A space. Six of the 10 largest leases signed in 2016 involved new construction buildings, all of which were executed by tech tenants, including Google at Lakefront Blocks, Facebook at Arbor Blocks and Valve at 400 Lincoln Square. The 10 largest leases signed were all executed by tech tenants. All told, the tech industry accounted for more than 60 percent of all office leasing in the year. For the last five years, the sector has been responsible for approximately 45 percent of leasing annually. Office space can be a key differentiator for companies competing fiercely for local talent, and tech tenants are willing to pay the premium for new, creative space.

Average asking rates in the market increased 2.7 percent year-over-year to $34.90 per square foot, full service. While this is slightly above the national average, it is less than half the average cost of space being marketed in San Francisco. Class A asking rents stand at $41.33, a 6.0 percent increase year-over-year. At 5.3 percentage points below the national average, Seattle-Bellevue is the fourth

tightest market in the country, with a single-digit vacancy rate of 9.2 percent. Only Nashville, Salt Lake City and San Francisco currently have lower vacancy percentages. For the fourth consecutive year the market experienced more than 2.0 million square feet of positive net absorption, as nearly 2.5 million square feet of space was taken down in 2016. This impressive run should continue in 2017, as tenants take occupancy in several impending Class A deliveries. While the majority of recent leasing activity has taken place in the Lake Union and Seattle CBD submarkets, Pioneer Square/Waterfront and Bellevue CBD are also experiencing a lot of attention. Weyerhaeuser, an agricultural manufacturer that is the seventh-largest company in the state by revenue, relocated its headquarters to an 180,000 square foot build-to-suit development in Pioneer Square, becoming a new anchor tenant in the neighborhood. 450 Alaskan and Hawk Tower are other significant projects in the submarket set to deliver in the next 12-18 months, with 59.8 percent of their combined space preleased. The Bellevue CBD is gaining two Trophy towers; Centre 425 was completed in the fourth quarter of 2016 and is fully leased by a single-user tech tenant, and 400 Lincoln Square is 71.7 percent leased and expected to deliver in early 2017. The flight to quality trend in the market has intensified and buildings are expected to continue delivering with limited available space.

Tech employment in the region has grown by 77.7 percent since 2001, the fourth highest growth rate in the country. Bloomberg’s 2016 U.S. Innovation Index ranked Washington as having the third most innovative economy for the second consecutive year, behind only Massachusetts and California. This was largely due to the state’s placement as number one in STEM concentration and number two in total science and engineering degree holders. Seattle-Bellevue, offering the second highest concentration of highly-educated millennials in the country and a relatively low cost of living, was also named a top-five city for business and careers. According to American City Business Journals, Seattle-Bellevue will become the 14th largest metro area by 2040 due to a population increase of 38 percent. Seattle remains one of the most desirable markets for millennials to live, and will continue to be a place that tech companies establish and expand their presence.

Seattle office leasing

THE TECH INDUSTRY ACCOUNTED FOR MORE THAN 60 PERCENT OF ALL OFFICE LEASING IN THE YEAR


Seattle office sales & statistics

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Sales 119 19 6 15 25 38 39 40 48 54

Price/SF Highest $531 $425 $397 $548 $557 $642 $745 $755 $792 $940

CAP Rate Average 5.2% 6.2% 9.5% 7.2% 6.8% 5.5% 6.1% 6.2% 6.0% 6.2%

Sales Volume $9.6B $0.4B $0.4B $1.2B $1.7B $4.9B $2.8B $1.8B $4.5B $4.4B

Submarket Size (RSF) Vacancy Avg. Rental Rate Net Absorption RSF

Downtown Seattle 51,796,834 7.6% $38.01 1,858,364

Eastside 26,452,255 9.2% $38.07 600,900

Northend 7,634,787 10.7% $28.70 198,124

Southend 8,645,775 16.9% $25.69 -181,328

2016 Total Market 94,529,651 9.2% $34.90 2,476,060

2015 Total Market 91,830,292 10.2% $33.98 2,461,440

Sales matrix (over $10 million)

Office market statistics

Office market statistics include Class A and B office buildings over 30,000 sf, excluding owner-occupied, medical, and government-owned buildings.

18

Seattle office sales ($10M+)Property Closing

DateTotal SF

Year BuiltSale Price

$ Per SFCap

RateBuyerSeller

Comments

Safeco Plaza

1001 4th Ave Seattle, WA

7/14/16 793,679

1969 / 2014-2015

$387,000,000

$488

5.10% GLL Real Estate Partners / Vestas Investment Management

CalPERS / CommonWealth Partners

• 98% leased at time of sale

• 68% occupied by Safeco

West 8th


2/24/16 516,985

2009

$370,000,000

$716

4.20% Deutsche Asset Management

AEW


• 62% occupied by Amazon

KOMO Plaza

100-140 4th Ave N Seattle, WA

12/20/16 293,727

2000

$276,000,000

$940

5.50% GI Partners

Hines


Amazon Phase VIII

325 9th Ave N Seattle, WA

7/8/16 317,804

2015

$246,800,000

$777

4.35% Metzler / Mirae Asset Global Investments

Vulcan

• 100% leased to Amazon for 16 years

Amazon Phase VII

400 9th Ave N Seattle, WA

11/17/16 317,189

2015

$244,000,000

$769

4.60% Tristar Capital / RFR Realty

Vulcan

• 100% leased to Amazon for 16 years

901 Fifth


6/29/16 540,589

1973 / 2014-2015

$223,300,000

$413

4.92% Schnitzer West / Investcorp

Deutsche Asset Management


• Major tenants: Cray, Milliman, PitchBook

One Twelfth @ Twelfth

1100-1120 112th Ave NE Bellevue, WA

12/13/16 480,389

2001

$217,000,000

$452

5.90% Gemini Rosemont

Principal


• Three property portfolio sale

• Properties were previously acquired for $136.4M in July 2004

Civica Office Commons


11/14/16 305,835

2001

$193,000,000

$631

6.20% AEW / Unico

Hines


• Two building portfolio sale

• Previously acquired for $205.1M in February 2015


Property Closing Date

Total SFYear Built

Sale Price$ Per SF

Cap Rate

BuyerSeller

Comments

1st Hill Medical Pavilion

1124 Columbia St Seattle, WA

1/14/16 227,628

1976 / 2015

$192,341,000

$845

5.28% Heitman / NexCore Group

Trammell Crow / Washington Capital Management

• Medical office building


• Major tenants: Swedish Health Services, CellNetix, Theraclone

Symetra Center

777 108th Ave NE Bellevue, WA

5/6/16 450,359

1986 / 2015

$185,000,000

$411

6.60% Sterling Realty Organization

Walton Street Capital


Hill7

1099 Stewart St Seattle, WA

10/7/16 285,680

2015

$179,822,000

$629

4.50% Hudson Pacific Properties / CPPIB

Touchstone / Principal


• Major tenants: Redfin, HBO

• Complex includes a 222-room Hilton Garden Inn, which was not included in this transaction

Sunset North

3120-3180 139th Ave SE Bellevue, WA

3/31/16 464,062

1999-2000

$155,193,000

$334

6.60% M-M Properties

Beacon Capital Partners


• Three building portfolio sale

Alley 24

223 Yale Ave N Seattle, WA

2/10/16 215,402

2006

$129,400,000

$601

5.00% MetLife

Vulcan


WestPark

8620-8672 154th Ave NE Redmond, WA

5/10/16 778,472

1975-1992

$128,000,000

$164

6.10% KBS Realty Advisors

Bentall Kennedy


• 21 property portfolio sale includes office, industrial and flex product

20


DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

Portfolio Sale

Laguna Office Complex

15011 NE 36th St Redmond, WA

11/11/16 465,000

1998

$109,991,000

$527

Blackstone

Hines


• Property includes 6 buildings

• Part of a 20-property portfolio sale including Daytona Office Campus in Redmond and 5th & Bell Building in Seattle

• Major tenants: Microsoft, Honeywell

Daytona Office Campus

14850 NE 31st Cir Redmond, WA

11/11/16 251,000

2002

$94,000,000

$444

Blackstone

Hines


• Property includes 3 buildings

• Part of a 20-property portfolio sale including Laguna Office Complex in Redmond and 5th & Bell Building in Seattle

• Major tenant: Microsoft

5th & Bell Building


11/11/16 197,136

2002

$92,959,000

$472

Blackstone

HInes


• Part of a 20-property portfolio sale including Daytona Office Campus and Laguna Office Complex in Redmond

• Major tenant: Amazon

110 Atrium


11/16/16 243,381

981

$81,500,000

$335

6.30% Lionstone Investments / Talon



Lincoln Executive Center

3245-3380 146th Pl SE, 14432 SE Eastgate Way Bellevue, WA

10/6/16 292,150

1984-1986

$80,500,000

$276

7.60% Urban Renaissance Group / Miller Global Properties



• Five building portfolio sale

Eastgate Office Park

15325-15395 SE 30th Pl Bellevue, WA

4/13/16 295,413

1985

$74,725,000

$253

6.90% Kennedy Wilson


• Four building portfolio sale

• 92% leased at time of sale - Building 1 was 95% leased - Building 2 was 100% leased - Building 3 was 94% leased - Building 4 was 86% leased



Total SFYear Built

Sale Price$ Per SF

Cap Rate

BuyerSeller

Comments

Time Square

500-800 SW 39th St Renton, WA

12/14/16 324,287

1984-1986 / 2004

$54,500,000

$168

9.60% Greenbridge Investment Partners

LBA Realty



Alderwood Business Center

3400-3500 188th St SW Lynnwood, WA

12/31/16 198,508

1985

$42,050,000

$216

7.93% Alaska Electrical Pension Fund

Embarcadero Capital Partners


• Two property portfolio sale

101 Elliott Building

101 Elliott Ave W Seattle, WA

2/10/16 101,738

1986 / 2008

$40,400,000

$397

5.50% Credit Suisse

SteelWave


Meridian Medical Center

11011 Meridian Ave N Seattle, WA

3/31/16 69,700

2006

$38,300,000

$550

5.50% Healthcare Realty Trust

First Western Development


Redmond Woods


6/21/16 145,221

1982

$36,985,000

$255

7.30% Hayman Properties

Clarion Partners



The Offices at Riverpark

15809 Bear Creek Pky NE Redmond, WA

3/16/16 106,281

2008

$36,900,000

$347

7.80% Colony Realty Partners

JMA Ventures


Bay Vista Office Tower

2801-2815 2nd Ave Seattle, WA

7/21/16 119,701

1982

$33,645,000

$281

5.00% Madison Marquette / Saradar

Carlyle Group


George F. Russell Jr. Hall

1414 NE 42nd St Seattle, WA

9/29/16 62,500

2009

$30,685,000

$491

6.00% Meriwether Partners

Unico


• Property consists of 44,000 sf of office space, street-level retail and two floors of apartment units

Redmond Technology Center

18300 Redmond Way Redmond, WA

5/24/16 100,978

2008

$30,250,000

$300

6.51% Ascentis Real Estate Partners

Menlo Equities


• 34% occupied by Pushpay

• Previously acquired for $15.9M in June 2012

22


DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

1411 Fourth


4/21/16 123,430

1929 / 2008

$29,725,000

$241

4.50% Onni Group

Mack Real Estate Group


One Newport

3605 132nd Ave SE Bellevue, WA

1/22/16 89,850

1985

$29,075,000

$324

N/A AAA Washington

Ivanhoe Cambridge


• Owner-user purchase

Creeksides at Centerpoint

20415-20435 72nd Ave S Kent, WA

1/13/16 218,585

1984

$26,500,000

$121

7.00% Menashe Properties

Unico



Quadrant Willows - Building C and E

1121-11241 Willows Rd NE Redmond, WA

3/3/16 130,961

1998-2000 / 2007

$25,650,000

$197

7.25% Equus Capital Partners

SteelWave


• Building C was 76% leased at time of sale

• Building E was 88% leased at time of sale

Broadacres Building

1601-1611 2nd Ave Seattle, WA

10/14/16 123,108

1907

$25,400,000

$206

3.50% LBA Realty

Principal


Taylor Edwards Building

1518 1st Ave S Seattle, WA

10/19/16 69,248

1918 / 1998

$25,000,000

$361

N/A WSA Properties

Henbart


• Sale included a vacant lot

Springbrook Business Park

7611 -7825 S 180th St Kent, WA

12/16/16 185,022

1982-1985

$23,500,000

$127

6.39% Stockbridge

Metzler


• Four building portfolio sale

Weyerhaeuser Campus

33663 Weyerhaeuser Way S Federal Way, WA

2/9/16 343,535

1971

$22,762,000

$66

N/A Industrial Realty Group

Weyerhaeuser Company

• Part of portfolio sale (Office + R&D Building)

• IRG plans to redevelop and lease or sell parts of the property for office or industrial use

Riverview Plaza

16000-16040 Christensen Rd Tukwila, WA

9/16/16 171,260

1981

$22,150,000

$129

8.86% Talon

Broadreach Capital Partners





Total SFYear Built

Sale Price$ Per SF

Cap Rate

BuyerSeller

Comments

Valley Medical Center

3915 Talbot Rd S Renton, WA

4/29/16 46,600

1983

$21,600,000

$464

5.90% Healthcare Realty Trust

Valley Medical Center



Sammamish Park Place - Building A & B

22011 SE 51st St Issaquah, WA

5/2/16 202,544

1987

$21,100,000

$104

N/A Onward Investors

Midland RE Services / PNC Bank


• Both buildings were 0% leased at time of sale

• REO sale

Delta Dental Building

9706 4th Ave NE Seattle, WA

11/16/16 87,552

1987 / 2002

$20,275,000

$225

5.80% Salal Credit Union

Washington Dental Service

• 97% occupied with Delta Dental vacating its space in mid-2017

• Included a 6-story garage with 308 stalls

Watermark Tower

1109 1st Ave Seattle, WA

9/16/16 71,150

1983

$20,250,000

$295

7.15% Martin Smith

Razore Enterprise


• Sale included the commercial portion only (7 stories), the condominiums (15 stories) were not part of the offering

University District Building

1107 NE 45th St Seattle, WA

7/21/16 72,000

1981 / 1995

$19,900,000

$276

7.00% Nicola Crosby

Cypress Wealth Advisors


• University of Washington occupies approximately 2/3 of the building

Q-13 Building

1813 Westlake Ave N Seattle, WA

7/8/16 65,222

1952

$19,500,000

$299

6.30% CBRE Global Investors (Allstate)

Tribune Media Company

• 100% leased to Tribune Broadcasting Company

Gateway Two

915 118th Ave SE Bellevue, WA

1/11/16 68,776

1988

$18,280,000

$266

4.60% Swift Real Estate Partners



1550 Building

550 4th Ave S Seattle, WA

5/18/16 51,550

1974 / 2005

$18,000,000

$349

6.35% Spire General Partner US

Bruce Raskin


Delphi Building

3633 136th Pl SE Bellevue, WA

7/15/16 69,980

1981

$17,400,000

$249


Sun Life Assurance Company


24


DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

Quadrant I-5 Corporate Park - Building A

728 134th St SW Everett, WA

6/30/16 74,974

1998

$14,200,000

$253

7.50% Shelby Company

Washington Capital Management


• Off-market transaction

10700 Building (Bellevue Community College)

10700 Northup Way Bellevue, WA

9/15/16 62,677

1980

$13,411,000

$214

N/A Robert Rothe



Fairway Center

14220 Interurban Ave S Tukwila, WA

6/16/16 82,537

1990

$12,800,000

$155

7.00% Shelby Company

Schuster Group


15 Lake Bellevue

15 Lake Bellevue Dr Bellevue, WA

3/29/16 35,200

1999

$12,600,000

$358

6.40% Costacos Family LP

Taylor Development


Franciscan Medical Pavilion

205 10th St SE Auburn, WA

5/12/16 37,480

2014

$12,089,000

$323

5.88% Ling Long / Chris Wang

Donovan Brothers Commercial Construction



David Evans & Associates


6/22/16 24,497

1991

$10,800,000

$441

5.80% Aegis Living

Macadam Forbes


• 1031 exchange

Puyallup Executive Park

929-1011 E Main Ave Puyallup, WA

3/9/16 64,382

1989-2001

$10,700,000

$166

6.75% Matthew Eldridge

Steven Brown


Seattle Veterinary Specialists

11814 115th Ave NE Kirkland, WA

3/4/16 19,283

1989

$10,400,000

$539

6.33% Michael Kinney

Puget Sound Center for Veterinary Medicine


• Seller was the anchor tenant and a 14-year sale leaseback was completed

Koll Bellefield


6/24/16 66,376

1983

$10,250,000

$154

N/A Onward Investors

AAA Washington


• 1031 exchange

Seattle



Seattle industrial sales ($10M+) overview

Sales volume increases, surpassing $1.2 billion in 2016

Industrial market fundamentals continue to adapt to rapidly improving economic conditions throughout the region. Reduced vacancy rates combined with high job and population growth are contributing to the current market situation, where developers are initiating projects at record levels. The Ports of Seattle and Tacoma have remained strong economic drivers, strengthening imports and exports in the region and helping to drive the local industrial market primarily in the Aerospace, Food/Beverage and Logistics industries. The Puget Sound area continues to be one of the top markets in the nation and industrial properties are attracting investors as well as retailers, e-commerce and food and beverage companies seeking to expand their real estate footprint. There continues to be a lack of available inventory and limited new product to satiate the demand in the market.

A flurry of industrial sales closed in 2016 as institutional investors took notice of the region’s strengthening market fundamentals. 33 transactions over $10 million closed during the year, totaling nearly 9.0 million square feet and $1.2 billion, representing a 9.0 percent increase in volume compared to 2015. More than half of the transactions were portfolio sales of more than two properties, with cap rates ranging from 4.0 percent to 7.0 percent, and nearly 80 percent of the deals occurred in the Southend. Furthermore, average pricing on a per-square-foot basis increased 30 percent year-over-year to $144, and cap rates declined 20 basis points to an average of 5.5 percent. The cap rate compression in the market has been significant, as it’s currently 370 basis points below the high of 9.2 percent in 2009. There were three deals that exceeded $100 million in 2016. Two of which occurred in the fourth quarter. Prologis purchased Unified Grocers Site in Seattle from Sabey Corporation.

The eight property portfolio totaling 1.0 million square feet, traded for $136.0 million, or $133 per square foot. Clarion Partners purchased Cornerstone’s portfolio of approximately 980,000 square feet in Tukwila and Kent for $143 per square foot at an incredibly low 3.8 percent cap rate. Several other buyers including KBS Realty Advisors, LBA Realty, BKM Capital Partners, and Industrial Property Trust participated in transactions in the market that led to solid investment activity in 2016. Though quality product is becoming increasingly limited, transaction volume and activity in the Seattle-Bellevue region continues to be strong.

Puget Sound remained a top-10 market nationally for institutional grade investments, according to PWC and ULI’s recently released Emerging Trends in Real Estate 2017 report. In the West Coast, Seattle was ranked second in terms of investment prospects for the industrial sector, behind only Portland. Institutional investors have clearly taken notice of the strong market fundamentals over the last three years and have been aggressive in acquiring both existing product, typically through unsolicited offers, as well as land in order to develop new product in the near-mid-term. Given strong demand from users along diminishing available space and increasing rental rates, some owners are looking at taking advantage of current market conditions and are evaluating selling their property at relatively high prices. With the local economy continuing to strengthen, the outlook for the Puget Sound industrial market is positive. Moving into 2017, we expect the industrial market to continue to perform well, both in terms of demand from tenants and interest from institutional investors.

30

Year-end activity signaling continued growth in 2017

2016 marked another strong year for leasing activity in the Puget Sound industrial market. Vacancy in the region dropped 90 basis points year-over-year to its current rate of 2.7 percent, down 550 basis points since 2010. Every cluster in the region has seen vacancy drop in the last 12 months, with rates ranging from 4.3 percent in Pierce County down to 1.5 percent in the Seattle cluster. Though 2.8 million square feet of speculative development is underway,

and more is planned to start, the demand for industrial space is significantly outpacing the increase in inventory, with about 16.0 million square feet of active tenant requirements in the market. The growth in tenant demand and the market’s limited inventory will continue to compress vacancies and availabilities in the region. The pace of absorption and leasing activity in the Puget Sound industrial market remained strong throughout 2016. More than 6.4 million square feet of space was absorbed, the highest total since 2007, and a 3.0 percent increase over 2015. This activity was focused predominantly in the Kent Valley and Pierce County clusters, which recorded 2.4 million square feet and 2.5 million square feet of total absorption, respectively. Tenant demand, from both small and large users, has contributed to robust net absorption totals. There are currently more than 50 companies in the market seeking space options larger than 100,000 square feet and nearly 100 tenants

seeking less than 100,000 square feet. With limited available product and continued strong absorption each quarter, landlords are comfortable posting high asking rates, leaving tenants with limited options such as early renewals, and accepting smaller free rent and tenant improvement allowance packages.

More than 4.4 million square feet of new product was added to the market in 2016. With limited supply of available quality space in the region, newly-delivered product is being leased and absorbed at a strong pace. There were a total of 26 leases signed in 2016 that exceeded 100,000 square feet. All but three of these major leases took place in the Southend, where the demand and shortage of supply is notably high. The largest transaction of 2016 was Serta Simmons’ lease of 272,834 square feet at IAC Port 167 in Puyallup/Sumner submarket. Other notable transactions include Stryder Logistics’s 249,269 square foot lease at Prologis Park Kent, Amerisource’s 229,918 square foot lease at Des Moines Creek Business Park, and Regal Logistics’ 225,972 square foot lease at LogistiCenter at 167 in Fife. Given continued demand for space, coupled with the scarcity of quality available options, it is likely that absorption will remain positive and vacancy rates remain tight in the coming quarters.

Even with limited land available in the region, developers are continuing to capitalize on the Seattle market. The largest current project is Prologis’ 770,195 square foot project in the Port of Tacoma/Fife submarket. Given the escalating land prices, rising construction costs, and shortage of big-box space, the majority of developments have been projects over 100,000 square foot. Construction activity is expected to ramp up as there are additional 7 million square feet of planned and proposed projects that sit in the pipeline slated for 2017-2018.

Seattle industrial leasing

THE DEMAND FOR INDUSTRIAL SPACE IS SIGNIFICANTLY OUTPACING THE INCREASE IN INVENTORY


Seattle industrial sales & statistics


Seattle 47,085,219 1.5% $1.06 60,327

Kent Valley 110,980,828 1.9% $0.69 2,457,690

Pierce County 62,923,038 4.3% $0.58 2,530,579

Eastside 32,199,277 3.6% $1.18 782,926

Northend 28,551,474 3.1% $0.79 575,895

2016 Total Market 281,739,836 2.7% $0.79 6,407,417

2015 Total Market 277,314,316 3.6% $0.71 6,209,388

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Sales 14 35 19 9 11 14 20 25 24 26 33

Price/SF Highest (ind) $140 $164 $151 $100 $115 $187 $125 $288 $198 $194 $312

CAP Rate Average 6.8% 5.9% 6.6% 9.2% 7.4% 7.2% 6.5% 6.3% 6.4% 5.7% 5.5%

Price/SF Highest (flex) $206 $237 $199 $207 $156 $257 $180 $190 $122 $171 $229

Sales Volume $0.6B $0.7B $0.4B $0.2B $0.2B $0.3B $0.7B $0.8B $0.4B $1.1B $1.2B

Industrial market statistics


Industrial market statistics include industrial and flex inventory over 10,000 sf, single-tenant, multi-tenant and owner-occupied.

32

Port of Seattle and Port of Tacoma historical total TEU’s

2016 TEU container volume

4,500,000

2,500,000

4,000,000

2,000,000

3,500,000

1,500,000

2007 2008

Seattle* Tacoma*

Tota

l TEU

’s

* In 2014 Port of Seattle and Port of Tacoma began combining their statistics

2009 2010 2011 2012 2013 2014* 2015

500,000

3,000,000

1,000,000

0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Seattle 1,973,504 1,704,492 1,584,596 2,153,685 2,049,733 1,885,680 1,592,753 * * *

Tacoma 1,924,929 1,861,358 1,545,853 1,412,869 1,443,550 1,678,778 1,863,408 * * *

Total TEU’s - - - - - - - 3,393,522 3,529,441 3,615,752

2016


Seattle industrial sales ($10M+)Property Closing

DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

Boeing Field Site

3301 S Norfolk St Seattle, WA

11/30/16 1,029,011

952

$136,000,000

$132

5.10% Prologis

Sabey Corporation


• Eight property portfolio sale including two office & six industrial buildings

Southcenter S Industrial Park / Green River Corporate Park

18201-18289 Olympic Ave S Kent, WA

12/21/16 930,433

1987-1990

$132,697,000

$143

3.80% Clarion Partners

Cornerstone Real Estate Advisers


• 11 property portfolio sale

WestPark


5/10/16 778,472

1975-1992

$128,000,000

$170


Bentall Kennedy


• 21 property portfolio sale includes Office, Industrial and Flex product

Gateway Corporate Center

12671-12687 Gateway Dr Tukwila, WA

12/21/16 371,163

1986

$78,000,000

$210

4.57% BECU

RREEF America


• Eight property portfolio sale

Des Moines Creek Business Park Phase I

2231 S 208th St Des Moines, WA

12/15/16 547,892

2015

$68,000,000

$124

4.27% LaSalle Investment Management

Panattoni



Apollo / Titan Building

1801 132nd Ave E Sumner, WA

6/14/16 428,109

2014

$48,050,000

$112

4.50% LBA Realty

LaSalle Investment Management


• Two property portfolio sale

Weyerhaeuser Campus

32901 32nd Ave S Federal Way, WA

2/9/16 461,673

1981

$47,738,000

$103

N/A Industrial Realty Group

Weyerhaeuser Company

• Sale represents Industrial/Flex portion of two property portfolio sale

Tukwila Commerce Center

1001-1099 Industry Dr Tukwila, WA

8/8/16 475,517

1976

$45,200,000

$95

5.70% BKM Capital Partners

Global Logistic Properties



Springbrook 188 Distribution Center - Building 1

7811-7915 S 188th St Kent, WA

11/18/16 365,040

1965

$40,302,000

$110

5.20% Blackstone

LBA Realty


• Sales represent allocated sales price

• Part of 49 property bulk sale

34


DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

711 E 11th St

711 E 11th St Tacoma, WA

11/30/16 60,000

1983

$32,376,000

$540

N/A Industrial Property Trust

Interfor

• Industrial building was unused by seller

• Sale includes 10K SF of office - 0% leased at time of sale

• Sale was based on land value

Westview 522

6525 240th St SE Woodinville, WA

4/6/16 184,260

2008

$32,200,000

$175

6.00% Pine Forest Properties

Onward Investors


• Portfolio sale include 4.96 acre pad site available for future development

1900-1938 Occidental Ave S

1900-1938 Occidental Ave S Seattle, WA

9/21/16 145,069

1941

$32,000,000

$221

N/A WSA Properties

Apollonia Kwan


• Two property porfolio sale

• Buyer intends to build a basketball arena

Kent Industrial Portfolio

18405 72nd Ave S Kent, WA

3/30/16 266,000

1975-1987

$31,602,000

$119

4.90% Industrial Property Trust

Prologis



Ranch Associates Buildings

22828 68th Ave S Kent, WA

8/31/16 250,000

1968

$30,000,000

$115

5.00% Puget Sound Energy

Hill Raaum Pietromonaco


Totem Lake Commerce Center

12521 128th Ln NE Kirkland, WA

6/23/16 171,841

1996

$28,012,000

$163

5.85% NWB Totem Lake LLC

Benaroya Company


Sea King Industrial Park

9100 15th Pl S Seattle, WA

9/22/16 195,800

1975

$27,000,000

$138

4.80% RREEF America

Int’l Airport Centers


• Six property portfolio sale

Former Safeway Bakery Building


11/15/16 102,714

1978

$26,500,000

$258

N/A Bellevue School District No. 405

Safeway


• Prior owner/occupant closed plant upon sale

• Purchased for use as future elementary school

The Steele Building

1565 Fryar Ave Sumner, WA

6/30/16 206,463

2015

$24,000,000

$116

4.40% Bixby Land Company

MetLife / Panattoni


• All cash deal



Total SFYear Built

Sale Price$ Per SF

Cap Rate

BuyerSeller

Comments

East Valley Distribution Center

20401-20421 84th Ave S Kent, WA

9/22/16 228,300

1988

$23,900,000

$105

4.95% RREEF America

Int’l Airport Centers


Springbrook Business Park

7611-7691 S 180th St Kent, WA

12/16/16 185,092

1985

$23,200,000

$125

6.88% Stockbridge Capital Group

Metzler


• Four property portfolio sale

Opus Park 167

1604 15th St SW Auburn, WA

4/15/16 170,815

2003-2005

$22,000,000

$129


Beaverbrook Enterprises



Emerald Corporate Park - Building E

3700-3702 C St NE Auburn, WA

2/19/16 152,155

2000

$21,900,000

$144

7.00% CenterPoint Properties

Shelby Company


• Sale included acquisition of a 1.4 AC parcel on Auburn Way N for $2.5M that will be paved and fenced for additional parking for the tenant FedEx

Redmond Heights Tech Center

4603-14833 NE 87th St Redmond, WA

5/26/16 126,545

1985

$20,400,000

$161

6.70% Wakefield Properties

Deutsche Asset Management



Andover Executive Park

698-722 Industry Dr Tukwila, WA

10/25/16 171,723

1972

$19,800,000

$115

6.40% BKM Capital Partners

ScanlanKemperBard Companies

• 83% occupied at time of sale


Everett Commerce Center

6617 Associates Blvd Everett, WA

11/18/16 217,700

2008

$17,981,000

$83

10.00% Blackstone

LBA Realty


• Sales represents allocated sale price

• Part of 102 property bulk sale

Quadrant Parkside Office Park

18939 120th Ave NE Bothell, WA

11/18/16 77,629

1988-1989

$17,800,000

$229

8.25% Hill Family III LLC

Embarcadero Capital Partners



• Buyer simultaneously sold a fourth building in the complex to a church

Span Alaska Transporation

3815 W Valley Hwy N Auburn, WA

3/21/16 51,250

2007

$16,000,000

$312

5.75% Realterm Global

Span-Alaska Transportation


36


DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

Riverfront Business Park

16110-16140 Woodinville Redmond Rd NE Woodinville, WA

2/12/16 137,916

1990

$15,450,000

$94

7.30% Harsch Investment Properties

Western America Equities


• Four property portfolio sale

Kirkland 118

11730 118th Ave NE Kirkland, WA

3/10/16 77,072

1998

$13,916,000

$181

6.05% Par 5 Park 118 LLC

Expert Drywall



Airport Business Center

11323 30th Ave W Everett, WA

10/7/16 150,046

1986

$12,550,000

$84

6.70% Vaupell Industrial Plastics

Puget Sound Properties


• Owner/user sale

Kent 212 Building

21235-21255 76th Ave S Kent, WA

10/19/16 126,656

1974

$12,412,000

$98

N/A Bule Origins

John & Cynthia Baumann


• Owner/user sale; buyer to occupy

• Buyer intends to occupy the building

Red Dot Building

745 Andover Park E Tukwila, WA

5/27/16 113,980

1974

$12,300,000

$108

5.20% LBA Realty

Red Dot Corporation


Sumner West

2719 W Valley Hwy E Sumner, WA

10/18/16 117,870

2016

$12,120,000

$103

N/A John Larsen

Columbia Pacific


• Owner/user sale; buyer to occupy

Kirkland Business Center

11803 NE 116th St Kirkland, WA

5/23/16 109,180

1962

$11,150,000

$102

6.00% Razone Enterprise

TA Realty


Owl Transfer Building

3623 6th Ave S Seattle, WA

6/14/16 73,335

1961

$10,600,000

$145

5.36% John & Diane Ching

American Life


Tri-Land Industrial Park - Dania Building

1251 Andover Park W Tukwila, WA

2/26/16 100,036

1977

$10,000,000

$100

N/A Interline International / Scandinavian Design

Tri-Land Corporation


• Owner/user sale; buyer was the tenant

Seattle


40

2016 Seattle retail sales ($10M+) overview

Sales volume continues to decline, but a new record for pricing is achieved

2016 was another highly active year for retail investment sales throughout the Seattle region with 22 transactions over $10 million. Much like 2015, the flurry of activity didn’t translate to higher sales volume, with only $548.9 million in assets trading hands, a drop of 15.0 percent year-over-year and the lowest level since 2011. Investors are transferring their focus to periphery markets, as approximately 75 percent of all transactions and 64 percent of total sales volume for 2016 came from outside of the Seattle-Bellevue core. We are starting to see the focus shift from the core to lower cost, long-term investments in secondary and tertiary markets. Tacoma was a particularly active segment of the market, with three of the 10 largest transactions of the year and total sales volume of $97.5 million, second only to Seattle. Tacoma also lays claim to the largest transaction of the year south of Seattle, with the purchase of the Tacoma South Shopping Center by Retail Properties of America from Sterling Realty. The 230,657 square foot neighborhood center is anchored by Bass Pro Shop and LA Fitness and was 97 percent leased at the time of the $39.4 million sale.

The largest transaction of the year occurred in the first quarter, when Vulcan Real Estate sold 2200 Westlake to Weingarten Realty Investors for $66.2 million, or $897 per square foot. The 100 percent leased, Whole Foods-anchored retail portion of 2201 Westlake in Seattle traded at a cap rate of 5.8 percent, the second lowest of the year. Seattle also saw a new market record for pricing occur when the Liberty Building, home to Hard Rock Café, sold for $1,297 per square foot. With the highest average price per square foot of $833, and the highest volume of any submarket at $131.6 million, Seattle is still the most desirable location for investment throughout the Puget Sound region. Seattle was ranked as the 3rd most desirable market in the U.S. for investment in the retail sector, up 17 spots from last year, according to PWV and ULI’s Emerging Trends in Real Estate 2017 report. 43 percent of respondents to the Emerging Trends in Real Estate survey placed a “buy” rating on retail property in Seattle. Look for further exploration of peripheral markets in 2017 as a variety of traditional anchor tenants are closing stores in shopping centers throughout the region.

SEATTLE WAS RANKED AS THE 3RD MOST DESIRABLE MARKET IN THE U.S. FOR INVESTMENT IN THE RETAIL SECTOR


Seattle retail leasing

Market tightens further, putting landlords in the driver’s seat

2016 was a banner year for the Puget Sound retail market. Vacancy continued its rapid decline, ending the year at 3.6 percent, a drop of 50 basis points year-over-year and the lowest level in more than a decade. Subsequently, rental rates continued on the upward trajectory, finishing at $18.80 per square foot, an increase of 7.0 percent year-over-year and the highest rate since 2008. As the

market tightens even further and population density continues to increase, we have seen a number of national retailers moving to the market, including la Marzocco, Whole Foods 365, New Seasons, Filson, and Warby Parker. Net absorption for all submarkets – Downtown Seattle, Eastside, Northend, Southend, and Tacoma – was overwhelming positive, with 1.1 million square feet of space taken down in the year. The Downtown Seattle submarket remained the tightest, as vacancy dropped 50 basis points to 1.7 percent. Rental rates increased 8.1 percent year-over-year to an average of $26.93. Tacoma posted another impressive year, accounting for 62 percent of total market absorption, with rental rates increasing to a respectable $15.98, and vacancy down a staggering 36 percent to 4.7 percent overall. Development activity was minimal in 2016, with just 391,629 square feet of inventory added to the market. 588,018 square feet of space remains under construction heading into 2017.

As in 2015, technology advancement was emphasized across the retail spectrum in 2016. With delivery concepts continuing to expand their offerings in Seattle, traditional brick and mortar retailers are

using a number of approaches to drive traffic or take advantage of the emerging delivery market. Amazon Prime Now made a big splash in the Seattle market last year with guaranteed 2-hour delivery on select items sold directly from Amazon. A number of local grocers, including Uwajimaya and PCC Natural Markets, have tapped into the established delivery network this year to offer their in-store offerings in 2 hours or less. Orders are filled by personal shoppers and delivered using the existing Prime Now delivery network. Fresh off of their Amazon Books store opening in 2015, Amazon expanded their brick and mortar offerings to include Amazon Go in South Lake Union. The store incorporates a number of sensors, so unlike traditional retailers, no check stands are present and customers simply grab food from the shelves and walk out. While many traditional grocers and restaurants become congested at checkout during the lunch and after work rush, Amazon Go stores identify your Amazon account information upon entry and track each item you grab from the shelf so your account can be charged when you leave.

With the tourism sector expanding in Seattle, SeaTac International Airport announced a plan for expansion to accommodate the growing number of domestic and international visitors. The $636 million renovation will transform the existing retail and dining hub into a more modern facility that will include eight new gates, improved Wi-Fi connectivity, and 46,000 square feet of retail and dining options; more than double the existing retail space. The project aims to improve the overall traveling experience, enhance the quality of retail offerings, and fix a number of operational inefficiencies. The project is expected to break ground in early 2017, with a targeted completion sometime in 2021.

RENTAL RATES CONTINUED ON THE UPWARD TRAJECTORY

42

Seattle retail sales & statistics

Submarket Size (RSF) Vacancy Avg. Rental Rate (NNN) Net Absorption RSF

Downtown Seattle 26,365,522 1.7% $26.93 50,889

Eastside 28,036,807 2.8% $24.48 78,349

Northend 47,084,524 3.9% $18.25 101,132

Southend 31,230,541 4.0% $16.98 181,396

Tacoma 41,416,800 4.7% $15.98 666,071

2016 Total Market 174,134,194 3.6% $18.80 1,077,837

2015 Total Market 173,174,496 4.1% $17.56 1,445,654

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Sales 28 19 4 8 7 15 16 18 22 27 22

Price/SF Highest $518 $467 $380 $404 $305 $387 $512 $509 $849 $701 $1,297

CAP Rate Average 6.4% 5.9% 7.2% 8.8% N/A 7.0% 6.4% 6.4% 6.0% 6.3% 6.4%


Retail market statistics



Seattle retail sales ($10M+)Property Closing

DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

2200 Westlake - Whole Foods Market

2200-2210 Westlake Ave Seattle, WA

2/29/16 73,800

2006

$66,210,000

$897

5.76% Weingarten Realty Investors / Bouwinvest

Vulcan


• Retail portion of 2201 Westlake

• 412 parking stalls included in the sale

Bellevue Plaza


5/3/16 60,844

1962

$45,350,000

$745

N/A Vulcan

UDR


• Planned redevelopment

Alderwood Plaza

18420-18600 33rd Ave W Lynnwood, WA

5/11/16 178,734

1980 / 2003

$40,747,000

$228

5.95% Merlone Geier Partners

Barclay’s Realty


• Major tenants: Rite Aid, Big 5 Sporting Goods, Ross, HomeGoods, Buffalo Wild Wings

Tacoma South Shopping Center

7601-7941 S Hosmer St Tacoma, WA

5/5/16 230,657

1984-2015

$39,400,000

$171

6.80% Retail Properties of America

Sterling Realty


• Major tenants: Bass Pro Shop, LA Fitness

Klahanie Shopping Center

4506-4598 Klahanie Dr SE Issaquah, WA

7/15/16 66,895

1998 / 2000

$35,988,000

$538

5.18% Regency Centers

Gerrity Group


• The shopping center’s anchor, QFC, was not part of the sale

• Previously acquired for $22.0M in November 2011

Bridle Trails Shopping Center

6501-6625 132nd Ave NE Kirkland, WA

10/17/16 106,000

1981

$32,800,000

$309

4.50% ROIC

Urban Renaissance Group


• Major tenants: Bartell Drugs, Red Apple Market, Ace Hardware

James Center

6901 S 19th St Tacoma, WA

1/13/16 128,264

1978-2000

$31,400,000

$245

6.00% Vestar Development

InvenTrust Properties


• Major tenants: Fred Meyer, Rite Aid, and FedEx Office

Promenade 23

2301 S Jackson St Seattle, WA

2/17/16 96,660

1997

$30,900,000

$320

N/A Vulcan

Weingarten Realty


• Partial redevelopment project that could have approximately 570 apartments, with construction starting in mid-to-late-2017

44

Seattle retail sales ($10M+)Property Closing

DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

Lincoln Plaza Shopping Center

2501-2505 S 38th St Tacoma, WA

4/29/16 80,922

1988 / 2007

$26,718,000

$330

6.90% MK Property Services

PASSCO Companies


• Major tenants: Big 5 Sporting Goods, Mens Wearhouse, Summit Salon Academy

Top Foods Grocery Store

15751 NE 15th St Bellevue, WA

1/15/16 70,575

2001

$21,000,000

$298

N/A Intracorp Real Estate

Merlone Geier Partners

• Vacant at time of sale

• Mixed-use redevelopment project

The Liberty Building (Hard Rock Café)

114 Pike St Seattle, WA

5/17/16 16,000

1924 / 2009

$20,750,000

$1,297

4.80% KLM Equities

Urban Visions

• 100% leased to Hard Rock Café through early-2029

• Previously acquired for $3.3M in September 2006

La Plaza Midway

23201-23325 Pacific Hwy S Kent, WA

5/10/16 75,830

1993

$19,200,000

$253

7.00% Da Li Properties

Tourmaline Capital


• Major tenants: Market at Plaza, Goodwill, and Sprint

Lake Stevens Marketplace

303 91st Ave NE Lake Stevens, WA

6/16/16 96,341

1993

$17,500,000

$182

7.15% Gerrity Group

Cimco Enterprises


• Major tenants: Ace Hardware, Rite Aid, Dollar Tree

Meeker Square

1301-1313 W Meeker St Kent, WA

6/27/16 137,138

1966 / 2004

$17,000,000

$124

7.30% Raskin Family

Prium Companies


• Planned redevelopment

• Transaction resolved a troubled situation

Renton Highlands Safeway Plaza

4110-4260 NE 4th St Renton, WA

4/14/16 54,264

1985-1998

$16,900,000

$311

6.30% Washington Investment

Henry Buys / Bart Kooyman


• Major tenants: Safeway, 24Hour Fitness, Petco

Midway Lowe’s

Shopping Center 24050 Pacific Hwy S Kent, WA

11/8/16 135,041

2006

$14,116,000

$105

5.00% Guardian Capital Management

Robertson Properties Group

• 100% leased at time of sale to Lowe’s Home Improvement

Ivar’s

401 NE Northlake Way Seattle, WA

12/15/16 16,767

1970

$13,725,000

$819

4.90% Fana Northlake LLC

Ivar’s


• 20-year single tenant net leased to Ivar’s



Total SFYear Built

Sale Price$ Per SF

Cap Rate

BuyerSeller

Comments

901 Building

905 Bellevue Way NE Bellevue, WA

4/28/16 21,968

1946 / 1999

$13,400,000

$610

N/A Lakha Investments

Greenbaum Family


• Mixed-use property that includes approximately 12,000 sf of office space

• 1031 exchange

Brien Motors

5200 Evergreen Way Everett, WA

12/6/16 34,672

1965

$13,000,000

$375

N/A Swickard Corp.

P & S Properties


• Buyer intends to occupy the building

Woodinville Athletic Center

18512-18600 Woodinville Snohomish Rd NE Woodinville, WA

2/12/16 59,850

2003

$11,970,000

$200

7.37% Maverick Investments

Goodman Real Estate


• Major tenants: Gold’s Gym, Home Court

White River Junction Center

3734-4018 A St SE Auburn, WA

1/14/16 52,573

1993-1995

$10,600,000

$202

7.71% Da Li Development

Hung Nguyen


• Major tenants: Albertsons, Bartell Drugs

Twin Lakes Shopping Center

2120-2324 SW 336th St Federal Way, WA

6/30/16 33,496

1986 / 2007

$10,200,000

$305

7.40% Frank Au

Gold Investment


• 1031 exchange

Seattle



2016 Seattle multifamily sales ($10M+) overview

More than $5 billion in sales closed in 2016, setting a new market record

Seattle’s strength as a multifamily market derives from unprecedented job growth, overwhelming in-migration and consistent demand in spite of record high supply. In 2016, the Seattle metro area set a new peak for sales volume, with $5.1 billion in transactions closing, significantly more than the average of $3.5 billion between 2012 and 2016, and $1.2 billion between 2007 and 2011. Investors continue to capitalize on the robust Seattle market because of its proven longevity and remarkable growth opportunities. Seattle is home to many Fortune 500 companies that have a long term commitment to Puget Sound. For this reason, it continues to lead the country in year-over-year job growth with 3.8 percent, compared to the national average of 2.1 percent. For the past seven years, an average of 61,000 jobs have been added to the Seattle market annually. In addition to the large companies that call Seattle home, like Amazon, Microsoft and Boeing, many Bay Area tech giants have grown substantially in the area, such as Facebook, Google, and Salesforce.

Rent growth in 2016 outpaced the national average at 7.5 percent year-over-year. The Northend saw an increase of 9.3 percent, and the Southend was even more impressive, at 10.7 percent. In 2016, Seattle was the only city ranked in the top ten for both rent growth and rental price. While rents have grown rapidly in each of the last five years, the Seattle area is still a significant discount to San Francisco.

Only the San Francisco Bay Area has a tighter housing market than Seattle. It is more costly than ever to own a home in Seattle,

as prices have climbed 60 percent in the last five years. In 2016, a record-low number of homes went on the market, with only 1,600 homes for sale in King County compared to 7,400 homes at the same period in 2015. Supply is dwindling at a time when demand has never been higher. Seattle’s inventory dropped 13.4 percent last year, which is the third largest decrease among the top 20 markets.

Washington saw substantial net migration in 2016, as 87,100 people moved to the state, representing 71 percent of the total population growth. This is the third consecutive year that net migration exceeded 45,000, which is the average for the previous decade.

In 2017, there will be significant multifamily unit deliveries, with 13,496 currently under construction. In 2016, a remarkable 10,387 units were delivered. This is a large increase in supply when compared to an average of 8,308 units delivered per year between 2012 and 2016, and an average of 3,436 units delivered per year between 2007 and 2011. This considerable supply is accompanied by substantial demand, as 11,639 units were absorbed in the last 12 months.

The LIV Bel-Red apartments on the Eastside achieved the largest sales price of 2016, selling for $172.0 million. The largest suburban trade was Bridges at Northcreek in Bothell, which sold for $145.0 million. Tivalli was the largest new construction suburban sale, trading for $94.3 million. Cap rates remained relatively flat throughout the year, averaging 4.4 percent for new construction core assets. The overall Puget Sound average for sales larger than $10 million was approximately 5.0 percent.

With underlying fundamentals remaining strong, the outlook for 2017 and beyond remains optimistic. As home to many noteworthy companies’ headquarters and satellite locations, Seattle’s economic drivers continue to fuel a healthy market, with robust employment growth, exponential population gain, and limited supply.

RENT GROWTH IN 2016 OUTPACED THE NATIONAL AVERAGE AT 7.5 PERCENT YEAR-OVER-YEAR

50

Seattle multifamily sales & statistics

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Sales 121 93 57 15 36 45 17 49 84 91 108

Highest Price/Unit $285,965 $407,083 $417,391 $211,957 $321,078 $350,000 $509,800 $690,583 $606,383 $636,192 $554,745

CAP Rate Average 5.4% 5.1% 5.8% 6.4% 6.4% 5.8% 5.5% 5.1% 5.2% 4.9% 5.0%


Sales matrix ($10M+)

INVESTORS CONTINUE TO CAPITALIZE ON THE ROBUST SEATTLE MARKET BECAUSE OF ITS PROVEN LONGEVITY AND REMARKABLE GROWTH OPPORTUNITIES.


Seattle multifamily sales ($10M+)Property Closing Date Sale Price

$ Per Unit$ Per SF

UnitsYear Built

Cap Rate BuyerSeller

LIV Bel-Red

2170 Bel-Red Rd Bellevue, WA

9/13/16 $172,000,000

$381,375

$477

451

2015


Goodman Real Estate

Juxt

810 Dexter Ave N Seattle, WA

9/30/16 $151,400,000

$415,175

$604

361

2016

4.60% Blackstone

Holland Partner Group

Bridges at Northcreek

20225 Bothell Everett Hwy Bothell, WA

10/12/16 $145,000,000

$276,718

$331

524

1999

4.90% Griffis Residential

Grosvenor

Avalon Brandemoor

3333 164th St SW Lynnwood, WA

10/18/16 $132,000,000

$260,870

$241

506

2001

4.80% Greystar

AvalonBay Communities

Overlook at Lakemont

5305 Lakemont Blvd SE Bellevue, WA

5/26/16 $122,000,000

$305,000

$312

400

1992

4.50% Security Properties

Heitman

Campbell Run

13305 NE 171st St Woodinville, WA

9/30/16 $98,000,000

$272,222

$331

360

1989

4.40% Acacia Capital

Grosvenor

Carriages at Fairwood Downs

15030 SE 179th St Renton, WA

12/16/16 $98,000,000

$245,000

$224

400

1988

5.20% Sequoia Equities

TruAmerica Multifamily

77 Central

2630 77th Ave SE Mercer Island, WA

4/22/16 $96,831,000

$519,936

$542

171

2010

4.10% TIAA

Seco Development

Tivalli

15631 Ash Way Lynnwood, WA

3/9/16 $94,250,000

$246,084

$283

383

2014


Goodman Real Estate

52


$ Per Unit$ Per SF

UnitsYear Built


Berkshires on Elliott

2400 Elliott Ave Seattle, WA

1/20/16 $90,750,000

$386,516

$509

233

1990

4.00% Griffis Residential

Berkshire Property Advisors

Equinox

1520 Eastlake Ave E Seattle, WA

10/11/16 $90,250,000

$433,946

$536

204

2009

4.70% Kennedy Wilson / LeFrak

JP Morgan Chase

Glen Park

952 SW Campus Dr Federal Way, WA

10/13/16 $85,000,000

$183,190

$167

464

1990

5.70% Prime Group

Fairfield Residential

Belara at Lakeland

6170 Terrace View Ln Auburn, WA

7/12/16 $80,500,000

$187,209

$196

430

2007


ColRich

The Heights at Bear Creek

17771 NE 90th St Redmond, WA

12/8/16 $78,750,000

$346,916

$306

227

1994


OHSTRS

Walton Lofts

75 Vine St Seattle, WA

8/8/16 $76,000,000

$554,745

$766

137

2015


The Schuster Group

Huntington Park

9009 W Mall Dr Everett, WA

2/22/16 $75,000,000

$197,368

$242

380

1991

4.60% Starwood Capital Group

Equity Residential

Millington at Merrill Creek

1401 Merrill Creek Pkwy Everett, WA

6/22/16 $74,500,000

$216,570

$221

344

2006

5.00% Prime Residential

Security Properties

Woodlake

11400 NE 132nd St Kirkland, WA

1/26/16 $74,211,000

$257,675

$318

288

1984


Equity Residential


Property Closing Date Sale Price$ Per Unit

$ Per SF

UnitsYear Built


The Lodge at Peasley Canyon

32200 Military Rd S Federal Way, WA

9/21/16 $70,172,000

$206,997

$212

339

2004

5.00% Avanath Affordable Housing

UBS Realty Advisors

Bella Terra

12101 Greenhaven Mukilteo, WA

2/22/16 $70,000,000

$297,872

$283

235

2002


Equity Residential

MileHouse

8300 160th Ave NE Redmond, WA

11/9/16 $69,300,000

$385,806

$469

177

2016

4.40% UDR

Legacy Partners

Arcadia Townhomes

1300 SW Campus Drive Federal Way, WA

11/18/16 $68,500,000

$221,683

$181

309

1990

4.95% Priderock Capital Partners

TruAmerica Multifamily

On the Green at Harbour Pointe

12303 Harbour Pointe Blvd Mukilteo, WA

6/9/16 $65,250,000

$221,939

$239

294

1990

5.40% Intercontinental Real Estate

Security Properties

Solara

12716 Lake City Way NE Seattle, WA

12/19/16 $65,200,000

$267,347

$354

238

2002

4.70% Sares Regis Group

Simpson Housing

Olin Fields

10115 Holly Dr Everett, WA

11/1/16 $64,700,000

$183,807

$191

352

1989

5.80% Standard Property

Lowe Enterprises

The Reserve

125 SW Campus Dr Federal Way, WA

9/27/16 $63,800,000

$159,102

$179

401

1989

5.30% ConAm

Kennedy Wilson

Village at Seeley Lake

9501 59th Ave SW Lakewood, WA

10/5/16 $62,600,000

$119,923

$134

522

1989

5.80% Blackstone

Bridge Investment Group Partners

54


$ Per Unit$ Per SF

UnitsYear Built


Grammercy

17425 120th Ln SE Renton, WA

6/30/16 $61,250,000

$160,340

$185

382

1985

5.00% Fairfield Residential

Fowler Property Acquisitions

Reunion at Redmond Ridge

11315 Trilogy Pkwy NE Redmond, WA

1/26/16 $60,496,000

$188,460

$195

321

2008


Equity Residential

Waters Edge

6305 S 238th Pl Kent, WA

11/30/16 $56,600,000

$186,184

$212

304

1987

5.00% Jackson Square Properties

Security Properties

Surprise Lake Village

2800 Queens Way Milton, WA

10/5/16 $55,300,000

$163,609

$177

338

1986

5.70% Blackstone


Rivet

1201 Mercer St Seattle, WA

7/27/16 $55,000,000

$419,847

$640

131

2014

4.20% Capital Valley

Holland Partner Group

Heronfield Apartments

11105 NE 123rd Ln Kirkland, WA

1/26/16 $53,182,000

$263,277

$280

202

1990


Equity Residential

Chandler’s Bay

1020 Central Ave N Kent, WA

10/5/16 $52,550,000

$179,352

$187

293

1989

5.50% Blackstone


Mosaic Hills

10811 SE 239th St Kent, WA

8/9/16 $51,575,000

$140,915

$169

366

1980

5.60% MG Properties

PASSCO Real Estate

Alturas @ Burien

13608 12th Ave SW Burien, WA

1/29/16 $51,450,000

$94,751

$131

543

1948

7.50% Fowler Property Acquisitions

Laramar Group



$ Per SF

UnitsYear Built


Ballard Public Lofts

6450 24th Ave NW Seattle, WA

12/21/16 $47,500,000

$445,773

$519

99

2015

4.80% TA Associates

William Parks

East Howe Steps

1923 Eastlake Ave E Seattle, WA

11/21/16 $47,500,000

$476,455

$793

96

2016

3.30% Bender Development

Daly Partners

Northpoint at Creekside

5601 N 37th St Tacoma, WA

10/19/16 $47,200,000

$117,413

$159

402

1985

6.50% Goodman Real Estate

Hamilton Zanze

Alara at Harbour Pointe

4500 Harbour Pointe Blvd Mukilteo, WA

2/29/16 $46,500,000

$202,174

$271

230

1998


American Realty Advisors

Landing at Dash Point

31004 19th Pl SW Federal Way, WA

1/27/16 $46,000,000

$118,557

$153

388

1976



Soren

5711 24th Ave NW Seattle, WA

8/1/16 $45,553,000

$385,630

$564

111

2015

4.40% PrivatePortfolio Group

Pryde Johnson

Waterford

2020 Lake Heights Dr Everett, WA

10/12/16 $43,200,000

$216,000

$247

200

1989

4.90% Investment Property Group

Carmel Partners

North Creek

11401 3rd Ave SE Everett, WA

7/21/16 $42,000,000

$159,091

$185

264

1986


Lowe Enterprises

Retreat at Maple Hill

1901 SW 320th St Federal Way, WA

10/26/16 $42,000,000

$140,000

$160

300

1981

5.10% Fairfield Residential

Hamilton Zanze

56


$ Per Unit$ Per SF

UnitsYear Built


Venue

4455 NE 12th St Renton, WA

6/7/16 $41,500,000

$146,127

$205

284

1973

5.75% New Standard Equities

Fowler Property Acquisitions

Artesia by the Lake

11225 19th Ave SE Everett, WA

12/15/16 $40,500,000

$210,938

$230

192

1990

4.70% Rise Properties

Fairfield Residential

Capri

324 Central Way Kirkland, WA

8/3/16 $40,200,000

$497,863

$59

73

2016

4.20% Calfox Real Estate Investment

Continental Properties

Cue

1525 Harvard Ave Seattle, WA

8/12/16 $39,633,000

$394,513

$654

90

2015

4.25% TIAA

Denny Onslow

Pacifica

4275 S Pine St Tacoma, WA

1/29/16 $36,250,000

$204,802

$231

177

2013

5.50% Green Leaf Partners

Rush Companies

Canterbury

13118 Meridian Ave E Puyallup, WA

11/17/16 $36,100,000

$200,556

$202

180

1995

4.90% Investment Property Group

Ray & Deanna Dally

Alderra

13507 E 99th Ave Puyallup, WA

9/8/16 $35,300,000

$176,500

$166

200

2003

5.25% Actus Capital Partners

AllianceBernstein

Anthem on 12th


9/6/16 $34,700,000

$274,740

$439

120

2015

5.00% CWS Capital Partners

Spectrum Development Solution

Sunset View

2101 SW Sunset Blvd Renton, WA

11/30/16 $33,600,000

$140,000

$128

240

1970

6.20% Legacy Group Captial

Investors Management Group



$ Per SF

UnitsYear Built


Hamptons

2541 Meridian St Puyallup, WA

10/5/16 $33,300,000

$144,783

$168

230

1990

5.60% Blackstone


Clock Tower Village

1584 McNeil St DuPont, WA

2/19/16 $33,000,000

$175,532

$168

188

2001


Carino and Associates

Creekside Village

1600 Sequalitchew Dr Dupont, WA

2/10/16 $33,000,000

$206,250

$204

160

2013

5.20% Daryl Connell

Walt Miles & Eric Cederstrand

The Park at Northgate

10735 Roosevelt Way NE Seattle, WA

8/5/16 $33,000,000

$226,027

$271

146

1967

4.90% Wallace Properties

MG Properties Group

Green Leaf at Lakewood

5406 82nd SW Tacoma, WA

8/31/16 $32,950,000

$142,641

$157

231

1990

5.30% Green Leaf Partners

Thayer Manca

Bradley Park

2323 7th St SE Puyallup, WA

10/5/16 $31,000,000

$200,000

$176

155

2000

5.60% Blackstone


Altitude

1620 Benson Rd S Renton, WA

12/6/16 $30,300,000

$261,207

$278

116

2015

4.90% FSC Realty

Christopher Koruga

Cornelius

306 Blanchard St Seattle, WA

3/16/16 $29,650,000

$216,423

$476

137

1926

5.00% Pillar Communities

MG Properties Group

Vue 25

2368 Yakima Ave Tacoma, WA

2/5/16 $28,650,000

$175,767

$248

163

2012

4.90% ColRich

CenterSquare Investment Management

58


$ Per Unit$ Per SF

UnitsYear Built


Cambridge


1/22/16 $27,000,000

$160,714

$172

168

1969

5.00% Grosvenor

PASSCO Real Estate

The Q

1321 Queen Anne Ave N Seattle, WA

12/30/16 $26,550,000

$305,172

$433

87

1950

5.10% Acme Realty

Acacia Capital

Packard Building


2/29/16 $25,866,000

$321,344

$365

61

2010

5.00% Equity Residential

Ederer Investment Company

Pacific Pointe

2108 N Pacific St Seattle, WA

6/6/16 $24,050,000

$340,197

$278

49

2000

5.00% Triad Investments Co Inc.

Lani, Robert and Michael Cochran

Sage

1730 112th St SW Everett, WA

2/22/16 $22,000,000

$178,862

$211

123

2002


Equity Residential

Chesnut Hills

209 21st Ave SW Puyallup, WA

10/5/16 $21,800,000

$138,854

$153

157

1991

5.60% Blackstone


Trillium

4902 148th St SW Edmonds, WA

8/1/16 $21,800,000

$242,222

$296

90

2015

4.80% Pacific Development Partners

Goodman Real Estate

Martine


1/26/16 $21,247,000

$317,126

$342

67

1984


Equity Residential

Union 18


9/14/16 $20,800,000

$364,912

$454

57

1969

5.30% Pacific Development Partners

Goodman Real Estate



$ Per SF

UnitsYear Built


Gilman Terrace

2572 Gilman Dr W Seattle, WA

5/31/16 $20,155,000

$280,609

$324

65

1989

5.00% Tim McHugh

Gilman Terrace Holdings LLC

80 Main

80 S Main St Seattle, WA

11/22/16 $20,100,000

$446,667

$696

45

2016

4.10% Borracchini Family

Goodman Real Estate

Court 17

1717 Market St Tacoma, WA

7/29/16 $20,000,000

$156,250

$223

128

2007

5.80% The University of Washington

Lorig Associates

Orchard Ridge


2/22/16 $20,000,000

$192,308

$232

104

1989


Equity Residential

Highland Village


8/31/16 $19,400,000

$255,263

$257

76

1975

3.90% King County Housing Authority

Intracorp

Brightwater

31224 20th Ave S Federal Way, WA

11/7/16 $18,800,000

$138,235

$142

136

1989

5.40% FSC Realty

Daniel Lim

Whitworth

1619 E John St Seattle, WA

7/22/16 $18,230,000

$337,593

$452

54

1927

4.20% Peter Goldman

Cadence Capital LLC

Serene Village

14014 Admiralty Way Lynnwood, WA

7/21/16 $17,925,000

$148,140

$185

121

1987

5.50% Williams Investments

Pacific Coast Capital Partners / Fowler Property Acquisitions

The Summit

733 Summit Ave E Seattle, WA

12/30/16 $17,000,000

$326,923

$538

52

194

4.60% Acme Realty

Acacia Capital

60


$ Per Unit$ Per SF

UnitsYear Built


Rainier Meadows

29225 Military Rd S Federal Way, WA

4/20/16 $16,921,000

$126,276

$159

134

1988

5.70% Thayer Manca

Residential Investco

Crystal Pointe

35434 25th Ave SW Federal Way, WA

10/6/16 $15,900,000

$151,429

$153

105

1991

5.20% CIM Group

Pacific Coast Capital Partners

Shoreside Village

701 75th St SE Everett, WA

12/20/16 $15,400,000

$129,412

$164

119

1968

7.00% Williams Investments

Tae-Kae Kai

Heather Ridge

20407 68th Ave W Lynnwood, WA

9/7/16 $15,350,000

$143,458

$170

107

1969

6.60% Hsiao Lin & Yu Lo Sun

Apex Properties Group

Madison Gate

2501 E Madison St Seattle, WA

11/30/16 $14,475,000

$361,875

$434

40

1990

4.60% Ron Danz / Morris Groberman / Andrew Person

Munehiro Tanaka

Studio 7

4029 7th Ave NE Seattle, WA

6/30/16 $14,450,000

$192,667

$636

75

2015

4.75% Eric Anderson

Triad Development

Wilshire Cove

19800 50th Ave W Lynnwood, WA

2/9/16 $14,300,000

$121,186

$138

118

1968

5.60% DH&G

Williams Investments

Meridian Glen

12115 Meridian Ave S Everett, WA

12/5/16 $14,100,000

$163,953

$192

86

1990


Randolph Street Realty Capital

Yardhouse

1406 E Republican St Seattle, WA

2/1/16 $13,897,500

$397,071

$762

35

2014

4.00% Jerry Costacos

Revolve Development



$ Per SF

UnitsYear Built


Crystal Bay

1605 S 235th Pl Des Moines, WA

1/29/16 $13,730,000

$122,589

$176

112

1976

5.70% Auctus Capital Partner

Pacific Living Properties

Arterra

711 W Casino Rd Everett, WA

1/11/16 $13,350,000

$111,250

$143

120

1981

5.50% Jackson Square Properties

Holland Partners

Parkside Village

9612 SE 252nd St Kent, WA

1/13/16 $13,350,000

$136,224

$180

98

1980

5.60% Weidner Investment Services

RedHill Realty Investments

Aros & Voss

2251 NW 59th St Seattle, WA

1/29/16 $12,975,000

$341,447

$416

38

1977

4.50% Suhrco Residential Properties

Coast Equity Partner

Portofino

3815 Woodland Park Ave N Seattle, WA

4/15/16 $12,450,000

$355,889

$507

32

2009

4.00% Peter Goldman

Gerry Pigotti

Springhaven Village

9210 S Hosmer St Tacoma, WA

4/29/16 $11,592,000

$92,000

$120

126

1986



Springfield

18414 108th Ave SE Renton, WA

4/29/16 $11,312,000

$176,750

$209

64

1986

4.80% Armand Tiberio

Thomas Propst

Chameleon


7/26/16 $11,250,000

$165,441

$213

68

1965

5.30% Bob Cryan

SR Investment Group

Clover Lake Park

4828 123rd St Sw Lakewood, WA

11/10/16 $11,000,000

$76,389

$104

144

1975


Charles Diesing

62


$ Per Unit$ Per SF

UnitsYear Built


Emerald Park

5700 23rd St E Fife, WA

11/10/16 $11,000,000

$88,000

$121

125

1981


Charles Diesing

The Park

1205 Queen Anne Ave N Seattle, WA

12/30/16 $10,700,000

$314,706

$449

34

1948

4.50% Colin Hagstrom / Curran Hagstrom / Giovanni Napoli / Ryan Dinius

Acacia Capital

Waverly Farms

9314 S Ash St Tacoma, WA

4/29/16 $10,672,000

$92,000

$124

116

1982



Lynnview


12/15/16 $10,500,000

$172,131

$217

61

1968

5.10% Madison Residential

Williams Investments

Northgate Manor


9/29/16 $10,500,000

$187,500

$298

56

1978

4.80% Paul & Krista Lin

Jennifer Murphy

Queen Anne Flats

521 2nd Ave W Seattle, WA

7/22/16 $10,500,000

$318,182

$589

33

2015

3.80% Ken Williams

Isola Homes

Forest Park Estates

4632 Fowler Ct Everett, WA

10/27/16 $10,350,000

$96,729

$117

107

1949

5.30% Meter at 4632 Fowler LLC

Johnson Investment Company (Receiver)

Sheridan Beach Terrace

15530 Bothell Way NE Seattle, WA

4/8/16 $10,270,000

$201,373

$211

51

1965

5.40% Steven Lazoff / Jeremy Gustavel / Kurt Fisher

Dr. Anastasia Deliganis

Stonecreek

25124 97th Pl S Kent, WA

1/12/16 $10,000,000

$142,857

$168

70

1988

5.60% RedHill Realty Investment

Weidner Investment Services

PORTLAND


Portland

Title right

66


2016 Portland office sales ($10M+) overview

Strong sales volume in the CBD pushes total to new cycle high

The number of sales in the metro climbed to 27 transactions above $10 million in 2016, totaling over $1.15 billion with an average price per square foot of $255, a 6.8 percent increase over the $1.1 billion recorded in 2015. Of the $1.15 billion, $822 million or 71 percent were assets located in the CBD (Institutional ownership has increased over 50 percent since 2005, with many investors viewing Portland as the leading transitional market that bridges the gap between traditional primary markets and secondary markets.)

The end of year sale of Pacwest center from GEPT/Ashforth to LPC Realty Advisors for $170 million was the largest sale of the year and traded at a price per square foot of $312. The 29-year-old building was only 76 percent leased at the time of sale and new owners have pledged significant investment to upgrade the building’s lobby and common areas. The sale marks one of two Portland trophy assets that traded hands in 2016, the other being the sale of Pioneer Tower from General Growth Properties to LaSalle for $121.75 million. Pioneer Tower set the year’s highwater mark at $411 per square foot and registered the lowest ever cap rate for a core CBD Class A building at 4.8 percent, signaling that investors are placing more value on Portland’s core assets and expecting more rent growth. The nod to Portland as a credible alternative to primary markets has been characterized by sharply declining cap rates in recent years, with 2016 reaching a new low; averaging 5.2 percent for core assets in the CBD.

Much of the new ownership has pledged significant investment in renovations and upgrades in an effort to modernize their newly acquired assets and fetch higher rents. Buildings such as KOIN Tower and Sixth at Yamhill underwent significant renovations in 2016 and recent acquisitions such as Pacwest, CDK Plaza, Power & Light Building and Macy’s will all be undergoing significant renovations to their lobbies and common areas in an effort to attract creative tenants.

The sale of the Evergreen Corporate Center was the most significant suburban sale of the year, trading for $45.5 million in the second quarter. The sale consisted of four buildings totaling 266,000 square feet. Following closely was the sale of South Center and the Tanasbourne Commerce Center for $44.25 million and $31.1 million respectively. These high profile suburban trades show that suburban assets are proving attractive to large institutional investors.

Office sales should remain brisk through 2017, with a number of high profile properties on the market spilling over from 2016 and institutional owners continuing to look for value and quality in less volatile markets such as Portland. Buildings set to undergo renovations in the market are evaluating their options. These investments will continue to drive rent growth in the CBD.

INSTITUTIONAL OWNERSHIP HAS INCREASED...WITH MANY INVESTORS VIEWING PORTLAND AS THE LEADING TRANSITIONAL MARKET...

68

Record development pushes market vacancy and rents up

Demand for office space remains strong, with 634,140 square feet being absorbed in 2016. Class A absorption in the CBD experienced its best yearly performance since 2000, with 321,062 square feet absorbed in 2016. A large part of the positive absorption was due to leases commencing in newly delivered buildings, indicating that tenants are increasingly taking advantage of all the quality space being brought to the market. The rest of the close-in urban submarkets also experienced strong absorption in 2016, with the Lloyd District and Close-In Eastside Class A buildings experiencing 172,652 square feet of positive absorption between the two submarkets.

For the first time in six years, supply has outpaced demand; with 1,176,643 square feet delivered in 2016 and a further 1,434,651 square feet currently under construction. After a five year construction hiatus due to the 2008 recession, the eventual delivery of Park Avenue West was the largest addition to Portland’s skyline in six years at 220,889 square feet. Together with Pearl West and 1320 Broadway, the three largest speculative developments above 100,000 square feet all delivered around 90 percent leased. Other notable deliveries included the new headquarters of Banfield Pet Hospital in Vancouver, Ankrom Moison in Block 8L and Simple in Clay Creative, which added 206,000, 91,000 and 72,000 square feet respectively. The trend of the urban core spreading out of the CBD accelerated in 2016 with new projects such as Field Office, Leland James Center and other mid-sized developments on the East Side breaking ground. Of the 1.4 million square feet currently under construction, 98.8 percent are located within the urban core. Massive developments such as Zidell Yards and further expansion into the North Waterfront and Slabtown micromarkets are also planned in the near future and will further contribute to the densification of close-in urban submarkets.

Portland has had a sub 10 percent office vacancy for the past three years, and continues to be one of the top five tightest markets in the nation, evidenced by over 85.9 percent of new deliveries in 2016 being leased at delivery. New construction rates are shattering previous records, with rents routinely being quoted above $40.00 per square foot and some as high as $46.00. This newer, higher quality product is pushing rents up significantly in the metro area, which are up 13.0 percent year-on-year, to $27.56 full service, predominantly led by CBD Class A buildings, now averaging $33.48.

While the information and technology sector continues to be the largest group of tenants looking for space in the metro area, the dominance in leasing activity is waning and being replaced by more traditional tenants looking for space in creative buildings. Demand for creative space is increasing among these non-creative companies, producing an environment where Class B and C office rents are escalating rapidly. A landscape has been formed where creative Class B office space, in specific buildings, can bring in higher rents than traditional office space in Class A buildings.

Driven by the high price of new construction, expect rental rates to continue their ascent as properties deliver to the market. Vacancy will likely bump up slightly when deliveries hit the market, but is not expected to rise beyond 10 percent for the metro area, with the CBD likely seeing vacancy modestly higher. Institutional investment in the market will continue to drive the trend of re-positioning buildings; particularly for Class A buildings with vacant space, as new owners try to capture creative demand. This will further push rental rate growth in the market.

Portland office leasing


Portland office sales & statistics


Central City 26,050,183 8.6% $31.23 250,951

Eastside 6,495,729 9.8% $24.79 31,929

Westside 20,741,646 10.6% $26.29 26,284

Vancouver Suburbs 6,537,183 8.3% $20.85 324,976

2016 Total Market 59,824,741 9.4% $27.56 634,140

2015 Total Market 58,699,534 8.9% $24.59 783,626

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Sales 28 9 5 5 5 9 14 18 21 27

Price/SF Highest $442 $271 $159 $197 $356 $443 $399 $460 $496 $497

CAP Rate Average 6.7% 7.1% 7.6% 8.4% 7.4% 8.3% 7.3% 7.2% 5.6% 5.8%

Sales Volume $1.8B $518M $180M $200M $282M $247M $437M $638M $1.1B $1.15B

Office market statistics


70

Portland office sales ($10M+)Property Closing

DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

Pacwest Center

1211 SW 5th Ave Portland, OR

12/21/16 545,000

1988

$170,000,000

$312

N/A LPC Realty Advisors

GEPT/Ashforth Company


• 413 parking stalls

• Bought for repositioning. Lobby and common areas to be renovated

• Major tenants: Schwabe, Williamson & Wyatt, Merrill Lynch and Key Bank

Pioneer Tower

Portland, OR 888 SW 5th Ave

6/30/16 296,239

1990

$121,750,000

$411

4.80% LaSalle

GGP


• 188 Parking stalls

• Major tenants: Tonkin Torp, Geffen Mesher, Bullivant Houser Bailey

Park Square Campus

100 SW Market St Portland, OR

11/8/16 295,767

1969 / 2014

$94,350,000

$319

5.30% CBRE Global Investors

CalSTRS

• 2 property portfolio



• Major tenants: Regence, Oregon DoJ, Ecova

Public Service Building


9/15/16 233,607

1927 / 1999

Master Lease

N/A

N/A Beacon Capital Partners

Downtown Development Group

• Off market transaction

• Beacon took ownership of master lease


• Parking ratio: 2/1,000

• Major tenant vacating in 2017

USPS

715 NW Hoyt Street Portland, OR

8/2/16 402,936

1962

$88,000,000

$218

N/A Portland Development Commission

USPS

• Site will be redeveloped as part of Broadway Corridor Master Plan

• Purchased for land value

• USPS (single tenant – will relocate to new development in NE Columbia Corridor)



Total SFYear Built

Sale Price$ Per SF

Cap Rate

BuyerSeller

Comments

Commonwealth Building


6/16/16 218,499

1948 / 2015

$69,000,000

$316


Unico Properties


Macy’s Building


11/22/16 195,470

1908

$54,150,000

$277

N/A KBS Realty Advisors

Macy’s Department Stores

• Redevelopment from retail to creative office

• Macy’s will exit the building in Q1 2017

Evergreen Corporate Center

20500-20540 NW Evergreen Pky Portland, OR

6/16/16 266,000

1997

$45,500,000

$171

6.20% Griffin Capital

Washington Real Estate Holdings


• Rent will increase dramatically in 1.5 years

• Major tenants: Nike

South Center I-IV

7565-7995 SW Mohawk St Portland, OR

4/14/16 342,316

1991

$44,250,000

$129

7.20% Westport Capital

UBS Realty Investors


• 10 buildings

• Proforma cap rate: 7.7%

RiverEast Center

1515 SE Water Ave Portland, OR

3/16/16 99,860

1952/2006

$33,500,000

$335

4.50% ASB Real Estate Investments

RiversEast LLC


• In place rents estimated 50% below market


• Major tenants: Mackenzie, Viewpoint Construction Software

CDK Plaza

2525 SW 1st Ave Portland, OR

12/8/16 185,729

1981 / 1991

$33,400,000

$180

N/A Bixby Land Co.

KBS REIT

• 2 building campus and plaza


• Major lobby and plaza renovations to take place totaling $7.5m

• Major tenant: CDK Global (will vacate 20,000 SF in Q1 2017)

Fremont Place I & II

1750 NW Naito Pkwy Portland, OR

7/29/16 121,506

1987

$31,500,000

$259

5.70% Lincoln

TA Realty



• Major tenants: Harris Group, Legacy Health

72

Portland office sales ($10M+)

72


Total SFYear Built

Sale Price$ Per SF

Cap Rate

BuyerSeller

Comments

Tanasbourne Commerce Center

3188 NW Aloclek Hillsboro, OR

3/1/16 183,907

1986 / 2001

$31,100,000

$169

7.10% Westport Capital Partners

Meriwether Partners

• 4 buildings



• Major tenants: Nike, Kaiser Permanente, Norm Thompson, Grass Valley

Hanna Andersson Building

541 NE 20th Ave Portland, OR

3/16/16 119,948

1930 / 2015

$31,000,000

$259

6.10% Mapleton Investments

ScanlanKemperBard



• Renovated in 2015

• Major tenant: Hanna Andersson

The Round

4145 SW Watson Beaverton, OR

2/25/16 146,028

2003

$29,325,000

$201

7.30% SKB/Independencia

SKB

• 2 buildings and parking garage


• Parking stalls: 665 stalls

• Major tenants: 24 Hour Fitness, Exterro

Rock Creek Corporate Center

3400 NW John Olsen Pl Hillsboro, OR

1/15/16 142,661

1999

$23,000,000

$161

N/A Lone Star Funds

Blackstone

• Part of 17 building portfolio sale – price is allocation


• 4/1000 Parking

• Major tenants: Fiserv, GE Healthcare

Sunset Corporate Park

22867 NW Bennett St Hillsboro, OR

1/15/16 133,221

1998

$22,000,000

$165

N/A Lone Star Funds

Blackstone

• Part of 17 building portfolio sale – price is allocation


• 160 parking stalls (4/1000 Parking)

• Major tenant: Volkswagen

Board of Trade

306-310 SW 4th Ave Portland, OR

9/30/16 88,797

1908

$18,000,000

$203

N/A Kensington Management

New Urban Properties


• No parking

• WALT less than 1 year, most tenants on month-to-month



Total SFYear Built

Sale Price$ Per SF

Cap Rate

BuyerSeller

Comments

NW Center For Orthopedics & Rehabilitation

1515 NW 18th Ave Portland, OR

8/5/16 33,290

2005

$16,530,573

$497

6.10% Olympus Ventures

Acorn NW Real Estate Fund


• Office/medical use building

• Major tenants: Pettygrove Physical Therapy & Sports Rehabilitation, Northwest ASC, The Orthopedic and Sports Medicine Center of Oregon

ODS Plaza

10505 SE 17th Ave Milwaukie, OR

5/16/16 50,800

2001

$15,231,835

$300

7.30% Columbia Investments

Oregon Dental Service


• Possible lease-back

• 150 Parking stalls

• Major tenant: ODS

1500 Plaza

1500 NE Irving St Portland, OR

12/2/16 72,572

1964 / 2013

$14,575,000

$201

7.30% Second City

Swift


• 158 stalls (2.3/1,000)

Ballou & Wright Building

1010 NW Flanders St Portland, OR

1/8/16 55,500

1992 / 1997

$14,000,000

$252

N/A ASB Real Estate Investments/Specht

Evan Denhart


• Will be redeveloped into creative office

811 @ Waterfront

811 SW Naito Pkwy Portland, OR

2/4/16 49,222

1982

$12,600,000

$256

5.00% Roscoe Nelson

Swift Realty Partners




• Major tenants: Ensequence, Marquam Group, CompanionLink Software

Sharp Electronic Building

5750 NW Pacific Rim Camas, WA

6/29/16 55,000

1990

$12,500,000

$227

N/A Camas School District

Sharp Electronics Corp


• Owner-user purchase

• Includes 30 acres of land for future development

74

Portland office sales ($10M+)Property Closing

DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

Swift Portfolio

Merchant Hotel Building Captain Couch’s Square Norton House Bldg

Portland, OR

12/29/15 90,810

1875 / 1994

$12,188,000

$134.21

$6,110,267

$3,290,448

$2,787,284


Fountain Village Development Co

• 3 historic buildings


• Will be redeveloped to creative

• Renovated in 1990, 1998, 1998

Onder Portfolio

915 SW 2nd Ave Portland, OR

3/10/16 56,815

1892

$12,125,000

$213

N/A Onder Development

House Of Gold

• 3 building sale consisting of office and retail buildings

• Property will be redeveloped into Hotel tower and office building - land value

Lovejoy Medical Building

2525 NW Lovejoy St Portland, OR

6/30/16 40,000

1965

$10,000,000

$250

3.00% Killian Pacific

Ifits Equity


• Office/medical use building

• 1031 exchange

• Major tenant: Retina Northwest


Portland

78

2016 Portland industrial sales ($10M+) overview

Sales velocity accelerates as institutional investors take advantage of strong tenant demand

The absence of large multimarket portfolio sales that included multiple Portland properties left 2016 industrial sales down 24 percent from 2015’s all-time high of $615 million, to $467 million. However, this is the second highest total on record and interest in Portland assets remains high with the number of deals above $10 million increasing to 16, double 2015’s velocity. Sales continue to be focused in the NE Columbia Corridor with 40 percent of sales concentrated in that submarket. Deliveries of new product remain strong and delivered 83 percent leased in 2016, 20 percent higher than 2015 and higher than any year on record.

Increased demand and competition for Portland industrial assets continues to compress cap rates with the average cap rate dropping from 2015 to 6.1 percent. With record low vacancy and surging rents, investors who own quality assets are reluctant to sell and the lack of Class A sales was noticeable, with only four Class A buildings sold in 2016 at an average cap rate of 5.3 percent. One of those sales was Rivergate Logistics Center from Principal Real Estate Investors to Dermody Properties at a cap rate of 4.7 percent, the lowest in 2016. The building was also the largest individual building sold at 527,934 square feet. Developers are also taking advantage of Portland’s hot industrial market. The newly built PDX Logistics Center, Buildings 1, 2 and 3, sold to Clarion Partners for a total of $82.8 million or $98 per square foot, with a cap rate of 5.7 percent for Buildings 1 and 2 and 5.4 percent for Building 3. The project was fully leased before delivery and had weighted average lease terms of 8.9 and 6.4 years respectively.

The crowding out of local investors and owner/users by institutional investors continued in 2016 with only one transaction above $10 million going to an owner/user and just two transactions by regional investors. By far the largest sale of the year occurred late in fourth quarter when the Commerce Parks Portfolio sold to Lincoln Property Company for $112.3 million at a cap rate of 6.0 percent. The portfolio consisted of five commerce parks totaling 1.4 million square feet and almost 70 acres of land.

Flex sales activity in 2016 was subdued at $124 million and was largely dominated by sales of Nike-occupied buildings. Of the six flex transactions in 2016, three of them were Nike-occupied totaling 522,680 square feet. The largest sale of the year was the nine property portfolio of Beaverton Creek Business Park that sold to Artemis/Cruzan for $41.55 million at a cap rate of 4.8 percent. In addition to the nine properties that Specht sold to Artemis/Cruzan, two other buildings in the business park were sold by Specht to KM Paige Associates in a separate transaction for $9.5 million, bringing the total sales price of the Beaverton Creek Business Park to $51.05 million

Taking both industrial and flex sales into account, total sales for 2016 amounted to over $591 million. The number of sales above $10 million was the most ever seen and if multimarket portfolio sales are excluded, 2016 was another record year for industrial sales in Portland. A burgeoning population and economy are the catalysts for this growth and the metro is attracting larger and higher profile tenants that are snapping up any and all larger developments in the metro. As these users continue to move to Portland, sustained pressure on vacancy rates and increasing rents will continue and attract further interest from institutional investment.

2016 WAS ANOTHER RECORD YEAR FOR INDUSTRIAL SALES IN PORTLAND


Portland industrial leasing

E-commerce propels strong 2016 and is expected to continue through 2017

As Portland’s population continues to balloon, large e-commerce and distribution companies have expanded into new locations to service their growing customer base. 2016 saw 19 leases above 100,000 square feet, among the most notable were Amazon and DB Schenker signing 303,360 and 137,920-square-foot leases in the Sunset Corridor’s latest development, the Majestic Brookwood Business Park, indicating that the population in Portland’s western suburbs has reached a critical mass as companies move to service their customers in the traditionally underserved west. On the Eastside, UPS and Cummins both signed and moved into 234,960 and 119,993 square feet respectively at PDX Logistic Center’s Building 3, with UPS signing for another 60,000 square feet at Rivergate Logistics Center as 2016 drew to a close.

The delivery of Subaru’s new 600,000-square-foot distribution center and Amazon’s 303,360-square-foot sortation center took the absorption total to 2,971,267 square feet for 2016. While absorption is down 31.5 percent from 2015, large expansions in the fourth quarter by Bunzl, USA Warehousing and Logistics and Aosom meant Portland saw a third year in a row where absorption was above the 10-year average of 2.2 million square feet. This sustained demand in the market drove vacancy down 40 basis points year-over-year to a record low of 3.4 percent and Portland experienced its largest 12-month rent increase on record during 2016, growing 18 percent to $0.59 per square foot. Asking rents for new construction are now firmly being quoted at $0.55 with office surcharges quoted up to $0.90 per square foot, on a triple-net basis.

Deliveries in 2016 were sizeable, with over 2.4 million square feet added to the Portland metro. While completed construction was down 520,000 square feet year-over-year, industrial development remains elevated with 2.5 million square feet under construction, of which 70 percent is speculative, a sign that developers remain bullish on Portland’s industrial future. Leasing at delivery for 2016 was 83 percent, over 20 percent higher than 2015. The metro’s largest developments such as PDX Logistics Center, Vista Logistics Park – Subaru Distribution Center, Majestic Brookwood Business Park and Clackamas Distribution Center were all 100 percent leased before they were completed. In addition to larger developments, Portland is experiencing a boom in small to medium size developments of infill sites closer to the urban core. These developments are targeted as regional distribution centers with high volumes, and these buildings are pushing rents up faster than any other period in Portland’s history.

Vacancy remains at a 25-year low, fueled by strong population and job growth in the metro area. Demand has exceeded supply for the last six years, further strengthening Portland’s industrial market fundamentals. Less desirable product on the market is benefitting from the new construction, pushing rents to new highs. While there is a decent amount of new supply expected to deliver in 2017, demand remains high and vacancy is expected to remain at record lows with rents continuing to push upwards.

PORTLAND IS EXPERIENCING A BOOM IN SMALL TO MEDIUM SIZE DEVELOPMENTS OF INFILL SITES CLOSER TO THE URBAN CORE

80

Portland industrial sales & statistics

Submarket Size (RSF) Vacancy Avg. Rental Rate Net Absorption (RSF)

Eastside 92,306,001 2.9% $0.65 2,117,090

Westside 62,545,056 4.0% $0.55 674,832

Clark County 16,385,710 3.4% $0.48 179,345

2016 Total Market 171,236,767 3.4% $0.59 2,971,267

2015 Total Market 167,491,279 3.8% $0.50 4,339,260

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Sales 17 5 1 1 2 5 5 15 11 22

Price/SF Highest $156 $112 $52 $59 $44 $63 $95 $133 $153 $231

CAP Rate Average 6.9% 7.0% 9.5% 9.2% N/A 7.4% 7.4% 7.1% 6.2% 6.1%

Sales Volume $377M $84M $40M $28M $32M $173M $103M $320M $732M $591M

Industrial market statistics



Portland industrial sales ($10M+)Property Closing

DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

Commerce Park & Park I-84 Portfolio

12475 SE Johnson Rd Portland, OR

12/9/16 1,392,407

1959-1993

$112,315,000

$81

6.00% Lincoln Property Group

Washington Real Estate Holdings

• Five property portfolio

• 69.7 Acres

Wilsonville Business Center

27350-27695 SW 95th Ave 9025 SW Hillman Ct 9720-9750 SW Hillman Ct Wilsonville, OR

7/1/16 530,068

1988-1992

$51,400,000

$97

5.80% LBA Realty

BIT/PNC

• Nine building portfolio


• 21% office

• Major tenants: Owens & Minor, Laminations

PDX Logistics Center (2 buildings)

9255-9555 NE Alderwood Rd Portland, OR

3/18/16 491,200

2014

$46,600,000

$95

5.70% Clarion Partners and LIT-Acquisitions

Capstone Partners/PCCP


• Major Tenant: KeHE

Wilsonville Logistics Center

27255 SW 95th Ave Wilsonville, OR

10/4/16 508,277

1986 / 1989

$43,100,000

$85

5.90% Lexington Realty Trust

CBRE Global Investors


• Major tenant: Pacific Foods (single user)

Beaverton Creek Business Park

2901-3203 SW 153rd Ter 3005 SW 154th Ter

15345-15385 SW Beaverton Creek Ct

15450 SW Milikan Way Beaverton, OR

9/15/16 311,000

1989-1997

$41,550,000

$133

4.80% Artemis / Cruzan

Specht/ASB

• Nine property portfolio


• Major tenant: Nike

• Flex property

• Under market rents

Beaverton Creek Business Park

15550-15560 SW Millikan Way Beaverton, OR

8/29/16 68,713

1997

$9,500,000

$138

4.80% KM Paige Associates

Specht/ASB

• Two property portfolio



• Flex property

• Under-market rents

82


DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

PDX Logistics Center - Phase II – Bldg 3

9601 NE Alderwood Rd Portland, OR

10/31/16 355,200

2016

$36,200,000

$102


Capstone Partners/PCCP

• 100% leased

• Major tenants: UPS, Cummins

Rivergate Logistics Center

8929 N Ramsey Blvd Portland, OR

5/4/16 527,934

1999

$36,000,000

$68

4.70% Dermody Properties

Principal Real Estate Investors


• Property has significant lease roll in near term

• Major tenants: Ford, Terminal Transfer, Aaron Rents

SunTech Corporate Park & Tanasbourne Corporate Park I

3445 NW 211th Ter 20010 NW Tanasbourne Dr Hillsboro, OR

10/7/16 142,967

2001

$23,275,000

$163

7.50% Winkler

LBA Realty

• Two property portfolio


• Year 1 cap rate: 7.45%


• Flex property

Halsey Business Center

18285-18557 NE Halsey St Portland, OR

3/17/16 423,300

1960 / 1983

$22,300,000

$53

7.10% DRA Advisors

STAG Industrial


• Major Tenant: Unisource Worldwide

Crosswhite Industrial Park

6461 SE Crosswhite Way Portland, OR

9/30/16 267,000

1980

$20,000,000

$75

7.50% Watumull Properties

Crosswhite Enterprises

• Off-market transaction


• 1031 exchange for buyer


• Major Tenant: Precision Castparts

Ronler Corporate Center

23235-23255 NW Evergreen Pky Portland, OR

5/4/16 159,701

2000-2001

$17,325,000

$108

N/A SWIFT

Broadreach Capital Partners


• Pro-forma Cap Rate listed at 8.5% (after stabilization)

• Flex property

Navistar Building

22638 NE Townsend Way Fairview, OR

9/22/16 210,000

2007

$17,200,000

$82

N/A RREEF Management

International Airport Centers

• Part of 19 property/35 building multimarket portfolio


• Major tenant: CTDI (single user)



Total SFYear Built

Sale Price$ Per SF

Cap Rate

BuyerSeller

Comments

Twin Oaks Business Park

1800-1815 NW 169th Pl Beaverton, OR

9/29/16 162,543

1984-1988

$17,150,000

$103

7.00% PNW Properties

Graham Salisbury

• 10 Property portfolio

• Approximately 92% leased at time of sale

• Bought for renovation

Dawson Creek Corporate Park

5435-5445 NE Dawson Creek Dr Hillsboro, OR

9/23/16 126,180

1996

$15,350,000

$122

6.90% Thomas Garnier

Leavitt / Wolff Co.

• 2 Property portfolio


• Major tenants: Radisys Corp, Genentech

Southwest Industrial Park Bldg D – Lot 4

12085 SW Myslony St Tualatin, OR

1/31/16 145,136

2015

$14,520,000

$100

5.90% Lincoln Property Co.

Trammell Crow


• Major Tenant: Wineshipping.com

IMP Building

9600 SW Boeckman Rd Wilsonville, OR

9/28/16 157,038

978/1989

$12,000,000

$76

N/A DW Fritz

Inland Pacific Properties

• Owner-user

Sunrise Business Center

16277 SE 130th Ave Clackamas, OR

6/9/16 160,707

1981

$11,660,000

$73


BLT Enterprises & Majestic Asset Management


• 25% mezzanine office build out

• 1031 Exchange

• Development piece in site

• Major tenants: Labrix, Cornell Pump Company

Rockwood Corporate Center

19786 NE San Rafael St Portland, OR

2/12/16 131,037

2008

$11,250,000

$86

N/A Prologis

Allegro Corporation



• 1031 Exchange

• Sale-Leaseback

Hayden Island Business Park

2400-2723 N Hayden Island Dr Portland, OR

10/31/16 98,860

1981

$11,125,000

$113

6.40% Sixteen Segment

BKM Capital Partners



84


DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

Cummins NW Building

4711 N Basin Ave Portland, OR

6/30/16 47,883

1985

$11,067,000

$231

5.90% Alta Home Properties

Swan Island Capital


• Possible 1031

• Major tenant: Cummins NW

E.J. Bartells Building

18977-19039 NE Portal Way Portland, OR

7/28/16 110,000

1999

$10,473,909

$95


Billings Development

• Two Property multimarket portfolio

• Portfolio cap rate 5.5%


• Major tenantt: EJ Bartels (single user)


Portland


88

2016 Portland retail sales ($10M+) overview

Investment sales decline as super-mall sales dry up

After 2015’s stellar retail sales performance, the lack of super regional mall sales weighed down sales in 2016, which fell 58 percent to $438 million. Investors are still finding value in small neighborhood centers as cap rates compressed further in 2016, averaging 5.8 percent. The largest deal of 2016 was the sale of Progress Ridge Town Square by Gramor Development to Donahue Schriber for $95.2 million at a price per square foot of $445. Gramor is focusing its efforts on their Vancouver waterfront development. The new development, which broke ground in 2016 on its first phase, reconnects 35 acres along the Columbia River to the city’s historic core and will include up to 3,300 housing units, 10 park acres, 1.25 million square feet of office space and 250,000 square feet of retail and hospitality space.

While Progress Ridge Town Square’s sale was the largest of the year, the most notable sale came from Macy’s 68 store closures. Macy’s owned the first 5 floors of the old Meier & Frank Building which total 195,470 square feet, the other 9 floors are occupied by The Nines Hotel owned by Pebblebrook Hotel Trust. Macy’s sold their portion of the building to KBS Realty Advisors for $54.15 million at $277 per square foot, and KBS plans to redevelop the building into creative office once Macy’s vacates in the spring of 2017. This shift in retail footprints is a national trend, not specific to Portland. Traditional department stores, mid-price specialty and apparel retailers are undergoing a radical shift in consumer demand. Shoppers are either flocking to discount department stores like Target and Walmart or luxury retailers. This is been especially hard on traditional department stores, which are also perceived as old-fashioned by millennial and generation Z shoppers. Some will be redeveloped with new tenants focused on experiences, like food and entertainment. Others will be redeveloped with more of a focus on discount shopping, attracting retailers that might have traditionally been in a Power Center, like discount department stores and grocers.

INVESTORS ARE STILL FINDING VALUE IN SMALL NEIGHBORHOOD CENTERS AS CAP RATES COMPRESSED FURTHER IN 2016, AVERAGING 5.8 PERCENT.


Portland retail leasing

Portland retail fundamentals are strong

Portland’s economy remains a top performer nationally, spurring confidence in the metro’s retail sector. The metro maintains solid economic drivers; above-average population growth, job gains and household formation. These factors have resulted in strong demand and thus declining vacancy, but rent growth is still average. Moderate net operating income growth should not support outsized returns but Portland’s strong demographics make it one of the better opportunities in the region, and retail cap rates are the highest among the West Coast metros. However, the hardships afflicting large national department chains have not evaded Portland. Macy’s announced that it will close its downtown location in spring 2017 as part of a nationwide 68-store closure following a slowdown in sales. In 2015, Nordstrom vacated both its Lloyd Center and Vancouver Mall locations. Management attributed underperforming sales to the Lloyd Center’s lack of appeal to the typical Nordstrom shopper.

Demand in 2016 was strong with 773,961 square feet being absorbed, pushing Portland’s retail vacancy down to 3.9 percent, 40 basis points lower than in 2015 and significantly below the national average. 2017 won’t provide much relief, with just 431,573 square feet of retail space currently under construction and already 82.9 percent preleased. Over half of the current construction is general freestanding retail buildings with an average building size of 23,946

square feet, meaning minimal new options for larger stores. The largest project currently under construction is the 129,000 square foot expansion of Cedar Hills Crossing II in Beaverton. The addition is expected to deliver in the fourth quarter of 2017 with the bowling alley, Sunset Lanes, already signing a 44,446 square foot lease. Other large leases in the metro area include supermarket chain Fred Meyer moving into 143,000 square feet as the anchor tenant in the newly opened Happy Valley Crossroads shopping center in Clackamas/Milwaukie. Walmart also signed 48,000 square feet at Sequoia Village in the Sunset Corridor.

Big spending from a growing population contributes to strong demand. Population, employment growth and home price appreciation are well above the national average, meaning more residents with stable paychecks are purchasing goods and services in the metro area. Portland offers robust job prospects, and its reputation for high-quality yet relatively affordable living appeals to young families ready to settle down. Retail sales have been strong, but online sales could hurt demand for brick-and-mortar locations, especially in a metro that is increasingly tech-centric.

PORTLAND’S RETAIL VACANCY IS DOWN TO 3.9 PERCENT, 40 BASIS POINTS LOWER THAN IN 2015 AND SIGNIFICANTLY BELOW THE NATIONAL AVERAGE

90

Portland retail sales & statistics


CBD 4,820,506 4.0% $19.14 26,404

Clark County 18,766,299 4.8% $18.42 306,058

I-5 Corridor 10,935,736 5.3% $21.50 (47,628)

Lloyd District 5,564,753 4.3% $21.92 11,903

Northeast 20,401,706 3.3% $17.12 126,192

Northwest 1,826,150 3.2% $22.40 (2,736)

Southeast 22,822,822 3.4% $16.76 263,300

Southwest 13,701,921 3.7% $18.60 (4,687)

Westside 9,637,155 3.2% $18.37 95,155

2016 Total Market 108,477,048 3.9% $18.23 773,961

2015 Total Market 107,318,284 4.60% $17.42 705,712

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Sales 14 6 4 9 4 5 9 13 20 14

Price/SF Highest $633 $636 $173 $328 $209 $533 $405 $564 $643 $1,180

CAP Rate Average 6.5% 6.6% 8.5% 7.9% 9.7% 6.4% 7.4% 7.3% 6.6% 5.1%

Total sales volume ($ in millions) $383M $93M $89M $311M $70M $151M $677M $668M $1.0B $437M

Retail market statistics



Portland retail sales ($10M+)Property Closing

DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

Multi-Property Sale

Progress Ridge TownSquare

12345 SW Horizon Blvd Beaverton, OR

8/19/16 213,849

2011

$95,197,000

$445

5.20% Donahue Schriber Commercial Real Estate

Gramor Development



• Major tenants: New Seasons, Ace Hardware, Cinetopia, Umpqua

Gresham Station Shopping Center

1135 NW Civic Dr Gresham, OR

9/27/16 341,186

2000

$86,300,000

$253

N/A DDR

Westlake Realty Group


• Major tenants: Bed Bath & Beyond, Best Buy, Old Navy

Evergreen & Andresen Marketplace Portfolio

6711-6715 NE 63rd St 3307 NE 32nd St 3307 Evergreen Way Vancouver & Washougal, WA

4/22/16 184,610

1998-2000

$43,000,000

$233

6.70% Giustina Resources

Killian Pacific

• Eight property portfolio


• Cap rate for Andresen Marketplace was 5.6%

• Major tenants: Safeway, Rite-Aid

Multi-Property Sale

Timberland Shopping Center

12043 NW Barnes Rd Portland, OR

10/4/16 91,660

2015

$42,600,000

$465

5.20% LaSalle Investment Management

Gramor Development


• WALT: 14.1 years

• Major tenants: Market of Choice, H&R Block, Pharmaca

Toyota

3142 NE Doran Dr McMinnville, OR

8/22/16 30,924 $36,500,000

$1,180

N/A Nhi-reit of Oregon LLC

Peg LLC


• Single tenant: Toyota

Columbia Gorge Premium Outlets

450 NW 257th Way Troutdale, OR

1/7/16 164,235

1991/1998

$28,425,000

$173

N/A Time Equities

Simon Property Group


• Major tenants: Gap, Adidas, Bass, Carters, Guess

Lovejoy Square Portfolio

930 NW 14th Ave 1325 NW Kearney St Portland, OR

7/8/16 46,412

1978

$19,750,000

$426


Metro Holdings North


• 1031 Exchange

• Major tenants: Office Max, Harley Davidson Outlet, On Deck Sports Bar

92

Portland retail sales ($10M+)Property Closing

DateTotal SF


$ Per SFCap

RateBuyerSeller

Comments

Kitchen Kaboodle

404 NW 23rd St Portland, OR

2/2/16 30,567

1987

$13,000,000

$425

5.00% Urban Development Partners

Alta Home Properties, LLC


• Major tenant: Kitchen Kaboodle

Arney Retail Center

3000-3060 Sprague Ln Woodburn, OR

3/1/16 38,390

2015

$12,870,979

$331

5.90% Giustina Resources

Deacon Development Group

• Major tenants: TJ Maxx, Panera, Red Robin

Rose City Center

6901 NE Sandy Blvd 7037 NE Sandy Blvd Portland, OR

9/14/16 59,685

1993

$12,750,000

$214

N/A Retail Opportunity Investments, Corp.

Estate of Earl M. Chiles


• Major tenants: Safeway, Raymond James Financial Services, Starbucks

Town & Country Chrysler/Mitsubishi

16800 SE Mcloughlin Blvd Milwaukie, OR

4/12/16 38,039

1986

$12,650,000

$332

M/A Bett Investments

Moorenouri li


• Major tenants: Dodge, Hyundai, Chrysler, Jeep

Tigard Towne Square

16200 SW Pacific Hwy Portland, OR

4/1/16 48,330

2000

$11,775,000

$244

N/A Heslin Holdings

Spirit Realty Capital

• Former Alerbertson’s

Sears

1260 Lloyd Ctr Portland, OR

8/17/16 111,645

1959

$11,500,000

$103

N/A Capref Lloyd Center East LLC

Sears Roebuck & Co


• Single tenant: Sears

New Seasons Market

6300 N Lombard St Portland, OR

3/1/16 25,050

2016

$10,620,000

$424

5.10% Ram Property Development

Deacon Development Group


• Single tenant: New Seasons

Title right

94


Portland


2016 Portland multifamily sales ($10M+) overview

Portland’s robust multifamily demand is driven by the recent influx of millennials and new employers

Portland’s multifamily strength stems from the continual increase in population and the notably high levels of employment. Portland currently has an inventory of 173,735 units, with an overall 2016 vacancy rate hovering around 4.9 percent. The average Portland rent sits at $1,297, which is a 10.2 percent rent increase from last year.

Oregon is one of the top moving destinations according to migration studies. The average income in Portland is $81,160 and the total population is 2,372,802. The Portland City Council predicts that around 260,000 more people will be living in Portland by 2035. An impressive 40.9 percent of the total population earns over $75,000. Currently, unemployment levels in Portland are 5.0 percent and the city ranks ninth in the nation for total employment increase at 5.0 percent in the last 12 months. According to apartment search website, Abodo, Portland was voted as the fourtht most desirable city for millennials. Portland is on the cutting edge of the evolution of the local food and drink scene, which includes 895 local food trucks and 69 craft breweries. Portland has the highest concentration of athletic and outdoor companies in the nation. Millennial growth in Portland is anticipated to be 5.2 percent over the next five years, predominately in the downtown area.

Investors continue to capitalize on the robust demand in the Portland market. 2016 multifamily sales dwarfed all previous years with 66 deals exceeding $10 million, totaling 13,757 units for $2.8 billion, $1.0 billion more than last year. The largest sale of the year occurred in the fourth quarter when Invesco Real Estate and Holland Partner Group purchased the 566-unit LaSalle

Apartments in Beaverton for $140 million. By far the most headline-grabbing transaction was the new high-water mark for Portland’s eastside, which was set by the sale of The Yard to a Bangkok-based investment firm Land and Houses Public Company Limited of Thailand. The 284-unit apartment building sold at just over 50 percent occupied for $446,126 per unit and $551 per square foot, totaling just under $127.0 million. The average cap rate in 2016 was 5.1 percent for all transactions over $10 million, and 4.7 percent for new construction. The market wide range for multifamily cap rates was between 3.8 and 6.1 percent.

The City of Portland recently passed new inclusionary zoning which calls for developments with 20 or more units to set aside 20 percent of those units for households making less than 80 percent of the median household income. In response to this new zoning, the city saw a surge in permit applications at the end of 2016

Looking into 2017, economic indicators point toward continued strength within the Portland metro area. The high levels of renting demand are largely due to the substantial job and population growth. Developers are anticipating a strong increase in demand for rental units as the millennial population grows. In 2016, 5,353 units delivered with 3,584 units absorbed. 5,506 units are scheduled to deliver in 2017. Portland is one of the most affordable West Coast cities that is able to draw international employee talent. In 2017, the Portland multifamily market will remain strong and experience moderate growth in rents. The supporting demographics will keep demand high and provide plenty of opportunity for development.

98

Portland multifamily sales & statistics

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total # of Sales 25 27 21 8 16 21 20 20 37 49 67

Highest Price Per Unit $146,610 $294,077 $455,340 $184,659 $285,149 $395,000 $267,241 $343,017 $456,710 425,000 $466,126

Cap Rate Average 6.1% 5.2% 5.4% 7.2% 5.9% 5.7% 5.7% 5.6% 5.6% 5.3% 5.1%

Total Sales Volume ($ in millions) $458M $1.1B $688M $266M $485M $690M $660M $702M $1.2B $1.7B $2.8B

Sales matrix ($10M+)

2016 MULTIFAMILY SALES DWARFED ALL PREVIOUS YEARS WITH 66 DEALS EXCEEDING $10 MILLION, TOTALING 13,757 UNITS FOR $2.8 BILLION, $1.0 BILLION MORE THAN LAST YEAR.


Portland multifamily sales ($10M+)


$ Per SF

UnitsYear Built


LaSalle15021 SW Millikan Way

Beaverton, OR

11/14/16 $141,750,000$255,866

$239

554 1997

4.00% Holland Partners Waterton Residential

Yard22 NE 2nd Avenue

Portland, OR

12/14/16 $126,600,000 $409,536

$600

284 2016

3.80% Land & Houses Guardian Real Estate Services

Eddyline Bridgeport18049 SW Lower Boones Ferry Road

Tigard, OR

11/18/16 $118,100,000 $303,534

$349

367 2015

4.60% Sequoia Equities Mill Creek Residential Trust

Seven West at the Trails14790 SW Scholls Ferry Road

Beaverton, OR

11/30/16 $96,000,000 $226,950

$288

423 1985

4.40% LaSalle Investment ManagementHolland Partners

Waterline2080 NW Front Avenue

Portland, OR

3/31/16 $94,000,000 $385,117

$484

243 2015

4.20% Greystar The Carlyle Group

Alara Hedges Creek8900 SW Sweek Drive

Tualatin, OR

12/1/16 $93,000,000 $227,941

$274

408 1998

4.50% Kennedy Wilson American Realty Advisors

Breckenridge8150 SW Barnes Road

Portland, OR

5/20/16 $81,500,000 $228,291

$299

357 1985

4.50% Resource Real Estate Holland Partners

The Terraces19000 NW Evergreen Pkwy

Hillsboro, OR

12/2/16 $78,340,000 $210,027

$215

373 1986

4.70% Blackstone Alecta Real Estate Investment

100



$ Per SF

UnitsYear Built


One Jefferson Parkway1 Jefferson Pkwy

Lake Oswego, OR

10/14/16 $78,000,000 $224,784

$211

347 1986

4.90% Security Properties Friedkin Realty Group

Riverwalk at Happy Valley8640 SE Causey Avenue

Happy Valley, OR

9/29/16 $76,000,000 $194,872

$217

390 1989

5.00% MG Properties Group Green Leaf Partners

The Club2323 NW 188th Avenue

Hillsboro, OR

12/2/16 $72,980,000 $207,330

$244

352 1991

4.40% Blackstone Alecta Real Estate Investment

Cook Street107 North Cook Street

Portland, OR

5/17/16 $69,000,000 $304,284

$453

206 2016

4.50% Berkshire Property Advisors Lake Union Partners

Vue1717 SW Park Avenue

Portland, OR

7/12/16 $63,950,000 $200,163

$278

307 1951

5.40% JRK Property Holdings ColRich Group

Russellville Commons10320 SE Pine Street

Portland, OR

3/1/16 $57,850,000 $204,417

$233

283 1999

5.20% MG Properties Group The Reliant Group

Sofi at Cedar Mill11785 NW Timberview Lane

Portland, OR

10/11/16 $55,000,000 $231,092

$240

238 2009

4.80% Pacific Urban Residential Security Properties

Evergreen Park4619 NE 112th Avenue

Vancouver, WA

9/29/16 $54,200,000 $146,883

$177

369 1989

5.60% Abacus Capital Group Lone Star Funds



$ Per SF

UnitsYear Built


Rowlock6380 NE Cherry Dr

Hillsboro, OR

10/4/16 $70,000,000 $256,551

$347

255 2015

4.70% Blackstone Holland Partners

Vector967 NE Orenco Station Pkwy

Hillsboro, OR

10/4/16 $62,000,000 $260,175

$365

228 2016


Vista at 233181 NE 23rd Road

Gresham, OR

10/5/16 $53,300,000$191,727

$188

278 1990

5.50% LivCor Bridge Investment Group Partners

Camden Place4701 NE 72nd Avenue

Vancouver, WA

12/9/16 $49,500,000$167,230

$165

296 1988

5.60% Jackson Square Properties Security Properties

Madison Park12901 NE 28th Street

Vancouver, WA

10/5/16 $46,350,000 $137,946

$165

336 1999

5.70% LivCor Bridge Investment Group Partners

Platform 141030 NE Orenco Station Pkwy

Hillsboro, OR

2/10/16 $45,000,000 $226,285

$287

177 2012

5.00% Investco Real Estate Holland Partners

Sunfield Lakes16100 SW Century Drive

Sherwood, OR

10/31/16 $43,100,000 $215,500

$206

200 1998

5.50% Brookline Investment GroupBerkshire Property Advisors

Park 19522 NW 19th Ave

Portland, OR

3/18/16 $42,500,000 $410,891

$514

101 2009

4.00% Greystar TIAA

102



$ Per SF

UnitsYear Built


Powell Valley Farms1500 SW Pleasant View Drive

Gresham, OR

10/28/16 $39,500,000 $173,246

$202

228 2003

5.20% Gelt Jackson Square Properties

The Linden1250 E Burnside St

Portland, OR

12/8/16 $39,000,000$272,860

$428

132 2014

4.70% Grand Peaks Properties The Foursquare Church

Sofi at Forest Heights1940 NW Miller Road

Portland, OR

12/15/16 $37,500,000$234,375

$241

160 2004

5.10% Pacific Urban Residential Security Properties

Parkside2831 SE Palmquist Road

Gresham, OR

8/23/16 $37,250,000$165,556

$184

225 1999

5.20% Sage Apartment CommunitiesKohlberg Kravis Roberts & Company

Rock Creek Commons11800 NE 124th Avenue

Vancouver, WA

9/29/16 $37,000,000$154,167

$167

240 2014

5.40% Hamilton Zanze & CompanyTimberland Framing

The Meadows at Cascade Park13314 SE 19th Street

Vancouver, WA

1/29/16 $35,250,000$178,030

$177

198 1989

5.50% Jackson Square Properties Belkorp Holdings

Hub 9980 NE Orenco Station Loop

Hillsboro, OR

10/4/16 $33,500,000$236,942

$327

124 2015


Townfair1167 NW Wallula Avenue

Gresham, OR

5/9/16 $31,000,000$116,981

$137

265 1990

5.90% Sage Apartment Communities Tokola Properties



$ Per SF

UnitsYear Built


The Gables at Mountain Park2 Jefferson Pkwy

Lake Oswego, OR

12/22/16 $29,080,000$225,426

$233

129 1991

5.00% LaSalle Investment Management Sares-Regis Group

Oak Hill15800 NW West Union Road

Portland, OR

8/30/16 $29,000,000$176,829

$212

164 1991

5.50% Sage Apartment Communities Tokola Properties

Carriage House4714 NE 72nd Avenue

Vancouver, WA

12/9/16 $26,500,000$165,625

$163

160 1997


The Wilmore4357 N Williams Ave

Portland, OR

10/1/16 $24,900,000$296,022

$438

75 2015

4.70% Robert Johnson LT Anctil Enterprises LLC

The Emery3155 SW Moody Ave

Portland, OR

5/24/16 $24,660,000$184,266

$343

118 2015

4.70% Front Avenue Corporation ZRZ Realty Co

Golfside Village7700 NE 72nd Avenue

Vancouver, WA

12/15/16 $24,250,000$171,986

$175

141 1990

5.50% Aukum Management Belkorp Holdings

The Cameron1500 SW 12th Avenue

Portland, OR

10/6/16 $23,450,000$282,530

$439

83 2016

4.70% Grand Peaks Properties Summit Real Estate

Terra at Murray Hill14305 SW Sexton Mountain Drive

Beaverton, OR

3/11/16 $23,350,000$169,203

$197

138 1975

5.20% Pacific Urban Residential Hamilton Zanze & Company

104



$ Per SF

UnitsYear Built


Village at Van Mall5000 NE 72nd Avenue

Vancouver, WA

12/9/16 $22,000,000$171,875

$173

128 1995


The Preserve19839 Hwy 213

Oregon City, OR

6/13/16 $21,500,000$159,259

$182

135 1994

5.60% Priderock Capital Partners OpenPath Investments

Chinook Way21933 NE Chinook Way

Fairview, OR

8/24/16 $19,900,000$160,484

$166

124 2000

5.70% Piedmont Properties Group PTLA

Maybeck at The Bend13830 SW Chinn Ln

Portland, OR

4/1/16 $18,530,000$154,417

$179

120 1998

5.30% Waldman Management GroupHamilton Zanze & Company

Lower Burnside Lofts60 SE 10th Avenue

Portland, OR

2/1/16 $18,500,000$284,637

$506

62 2015

4.30% Berkshire Property Advisors Urban Asset Advisors

Town Center Park29250 SW Parkway Court

Wilsonville, OR

9/1/16 $18,500,000$166,667

$175

111 1990

5.50% Curtis Capital Group Summit Real Estate

Boulder Gardens16751 SE 82nd Drive

Clackamas, OR

5/12/16 $18,000,000$116,129

$170

155 1972

6.00% Kleinbub, Fredrick & AngelinaSchaaf, Steven Ron

The Park at Fox Pointe3009 NE 57th Avenue

Vancouver, WA

1/11/16 $16,250,000$81,250

$110

200 1975

7.00% NFN Investments Diesing, Charles F.



$ Per SF

UnitsYear Built


Waverly Gardens20121 SE Stark Street

Portland, OR

1/15/16 $16,230,000$110,408

$130

147 1982

6.40% Sage Apartment CommunitiesGallegly, John R.

Mississippi Avenue Lofts4216 N Mississippi Ave

Portland, OR

4/13/16 $14,048,550$439,017

$331

32 2008

4.70% Landbank Investments, LLC Winkler Development Corporation

Parkview7806 NE 12th St

Vancouver, WA

10/31/16 $13,875,000$133,413

$160

104 1966

5.80% Transpacific Investments Foam Street Investments

Crown Plaza10117 NE 9th Avenue

Vancouver, WA

2/24/16 $13,600,000$113,333

$145

120 1982

6.40% Realvest Dernbach, Dave

The Crossings16500 SE 82nd Drive

Clackamas, OR

6/7/16 $13,450,000$140,104

$153

96 1997

5.70% Gallegly, John R. Sunnyside Construction & Development

City View3050 SW 10th Avenue

Portland, OR

1/8/16 $13,250,000$152,299

$310

87 1977

5.20% Kleinbub, Fredrick & AngelinaMatteson Companies

Village 18518380 NW Heritage Pkwy

Beaverton, OR

3/14/16 $13,100,000$140,860

$163

93 1981

5.90% Aukum Management Kurilo, Paul

Sterling Park16804 SE Powell Blvd

Portland, OR

12/7/16 $10,950,000$150,000

$139

73 1991

5.70% Michael Kilroy Gordon Irvine

106



$ Per SF

UnitsYear Built


Hogan Woods1645 NE 20th Street

Gresham, OR

5/2/16 $10,820,000$108,200

$149

100 1998

6.30% Sage Apartment CommunitiesMcNutt, Robert

Royal Greens2000 NE 19th Street

Gresham, OR

5/31/16 $10,500,000$116,667

$121

90 1970

6.50% Waldman Management GroupGuardian Real Estate Services

601 Union Street, Suite 2800, Seattle, WA 98101 tel +1 206 607 1700 fax +1 206 607 1701

225 108th Avenue NE, Suite 550, Bellevue, WA 98004 tel +1 425 974 4000 fax+1 425 974 4020

1120 NW Couch Street, Suite 500, Portland, OR 97209 tel +1 503 972 8000 fax +1 503 972 8001

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