Total Equity Real Estate Accounting Worksheet

DescriptionRE521
Real Estate Finance I
Project 2
Individual Project 2:
Residential Investment
PLEASE SUBMIT YOUR FILES TO riettec@pdx.edu ON OR BEFORE THE BELOW
DATES.
PLEASE MAKE SURE THE RESPECTIVE FILES HAVE YOUR NAME ON IT!
POINTS WILL BE DEDUCTED IF YOUR NAME IS MISSING.
DO NOT USE GOOGLE SHEETS FOR THIS ASSIGNMENT.
Due date: March 16, 2023 at 11.59pm
CARRY OUT ALL YOUR CALCULATIONS IN EXCEL USING EXCEL FUNCTIONS
AND SHOW YOUR WORK!
BACKGROUND
You are interested in purchasing a rental residential property as an investment for your
personal portfolio. To be able to buy more properties faster and diversify, you decide to
contribute 20% of the equity required for the purchase and have a capital investor, who
will contribute the remaining 80%.
YOUR TASKS:
1) Identify
Property:
Go
to
Zillow
(https://www.zillow.com),
Redfin
(https://www.redfin.com), Realtor (https://www.realtor.com), or another website and
identify a condo, single-family home or townhome that you would like to analyze as
potential investment opportunity.
Explain why you picked this property and location/neighborhood.
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Real Estate Finance I
Project 2
2) Market Analysis (Rental Rates): Using information from the Costar multifamily
report and/or websites with rental information such as Realtor or Apartments.com,
collect information to answer the following questions:
a. What is an appropriate rental rate per month for this property right now and
why?
b. At which annual percentage do you expect the rental rate to increase and why?
In your discussion, you can use arguments such as inflation as well as demand
and supply characteristics.
3) Market Analysis (Vacancy & Collection Losses): Make assumptions about vacancy
& collection losses for your rental unit. You can express V&C as a percentage of PGI.
4) Market Analysis (Operating and Capital Expenses): Using the Costar multifamily
report
and/or
information
from
the
National
Apartments
Association
(https://www.naahq.org/national-apartment-association-2021-survey-operatingincome-expenses-rental-apartment-communities), collect information to answer the
following questions:
a. Assuming you do the property management yourself, which annual operating
expenses, either in $/SF or %, would you assume for the property and why?
Please note: Apartment buildings with a Costar rating of 4 and 5 are newer, higher quality
properties with lots of amenities (e.g., gym, outdoor areas) that might not be comparable
to your property. Select a Costar rating that approximates the quality of your property.
For more information on the Costar ratings, please see:
https://www.costar.com/docs/default-source/brs-lib/costar_buildingratingsystemdefinition.pdf (Multi-Family Section)
b. At which rate do you expect the operating expenses to increase each year and
why?
c. Which capital expenses each year would you assume and why?
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RE521
Real Estate Finance I
Project 2
5) Market Analysis (Cap Rate): Using the Costar multifamily report, which current cap
rate would be appropriate as a going in cap rate for your proposed property and why?
Please note, the Costar multifamily report provides cap rates for apartment buildings,
however, you can use this cap rate information as a basis for a cap rate for your property.
The cap rate will be between 6 and 9%. Explain your answer.
6) Mortgage: Assume that lenders require a down-payment of at least 25%, i.e., offer you
a mortgage with an LTV of at most 75%. Go to Google (Mortgage Rates) to get the
average rates as of the day you are conducting this analysis. Use your credit score and
preferred down-payment amount & loan amount to obtain interest rates on different
types of mortgages (fixed and adjustable/floating rate mortgages are sufficient).
Select a mortgage you’d like to use for this purchase and answer the below questions:
a. Which down-payment percentage did you select and why?
b. Which mortgage did you select and why?
7) Pro-Formas and DCF: Prepare the pro-formas for operating and equity reversion cash
flows to the Before-Tax level (i.e., BTCFs and BTER) for the 10-year holding period.
Assume 1% of the mortgage amount as financing costs. Additionally, assume 2% of
the purchase (year 0) and sales price (year 10) as purchasing and selling costs
respectively. Financing and purchasing costs are out-of-pocket expenses that increase
the equity required to purchase this property (assume you contribute 20% and your
investor 80% of these additional costs).
Answer the following questions:
a. Using the NOI in year 1 and the going in cap rate you identified based on the
Costar multifamily report, what is the price you would pay at most for this
property? How does it compare to the listing price, i.e., is the property over- or
under-valued based on your assessment of its rental income potential?
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RE521
Real Estate Finance I
Project 2
If you identify the property to be over-valued, use the maximum purchase price you are
willing to pay for it as the basis of your mortgage payments and further analysis.
b. Which going-out cap rate do you assume and why?
c. Your capital investor requires a return of 9% for this property. What is your
required return for this investment and why? You can use, for example, stock
market information or data from single-family crowdfunding sites such as
Arrived homes (https://arrivedhomes.com/properties) to determine your
required return.
d. Calculate the before-tax IRR (BIRR) for your investment project. Does this IRR
meet your required return? If not, which strategies could you develop to
improve your IRR? Explain.
e. What is the cash on cash yield each year? What is the average cash on cash
yield over the entire holding period? (Do not include the equity reversion cash
flows in year 10 in the year 10 cash on cash yield.) Is this yield attractive to
you? Why/why not?
f. While you do not need to include them in your financial analysis, are there any
capital improvements to the property you would like to do to improve its ability
to achieve a higher rent? If yes, what are they, and why?
8) Waterfall structure: Your capital investor requires a minimum return of 9% on this
investment (target IRR) in return for their 80% contribution to the down-payment
(equity) required for this investment. All operating cash flows from the property go to
the investor until the target IRR has been achieved. Once the target IRR has been met,
all remaining cash flows from operations and sale get split 80/20 between capital
investor and you. If there are negative BTCFs, assume that they are split 50/50 between
investor and sponsor. Developed the waterfall structure and answer the following
question:
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Real Estate Finance I
Project 2
a. What is the BIRR for you and your capital investor respectively? Is this
investment worth undertaking for you and your investor? Why/why not?
9) Sensitivity analysis: Conduct the following sensitivity analyses to get the BIRR for
investor and yourself.
a. Untrended rental income: Assume that you cannot increase rental rates after
year 1. Is the investment still worth undertaking for you and the investor?
b. Going out cap rate: Assume that your going-out cap rate is 1) 100bp and 2)
50bp higher. Is the investment still worth undertaking for all partners?
DELIVERABLES:
Submit your 1) Excel file with all the calculations (use different sheets) and 2) Word file
with your assumptions and answers to my questions. For the Word file, you can use the
assignment outline and just answer the questions below the respective bullet points. Make
sure you answer all questions and provide all the information required. Please add a
reference list with all the resources that you have consulted for this project. There is no
minimum or maximum word requirement.
5
1
2
BTCFs
BTER
Comment: Link to BTCFs and BTER from your proformas
Waterfall Inputs
Total Equity
Equity Invested (Investor)
Equity Invested (Sponsor)
Promote (Carried interest) percentage
Target IRR (investor)
Required return (sponsor)
Waterfall structure
0
1
1
2
Before-Tax Cash Flows (BTCFs and BTER)
Cash Flows to Investor
Remaining cash flow
Cash flows to sponsor (promote)
Cash flows to investors (promote)
Target IRR Amount Calculation
Cash flows received by investor
Sum of PVs received
Amount outstanding
IRR Calculations
Investor
Total cash flows to investor
Comment: It may not take 10 years un
Once the investor has received their Ta
0
1
IRR
Sponsor
Total cash flows to sponsor
IRR
3
4
5
6
7
2
3
4
5
6
3
4
5
6
7
om your proformas
ent: It may not take 10 years until the investor has reached their Target IRR. When the cash flows returned to the investor a
he investor has received their Target IRR, all remaining and future cash flows get split according to the promote (carried int
2
3
4
5
6
8
9
10
7
8
9
8
9
10
10
ws returned to the investor appproximate (based on the sum) the investor’s investment, do the Target IRR calculation to see
to the promote (carried interest) of investor and sponsor.
7
8
9
10
Target IRR calculation to see how much the investor still needs to meet the Target IRR.
Investors contributed
Investment cash flows
CFs to investors
CFs to sponsor
90% of equity
0
1
2
$ (1,000,000.00) $ 80,000.00 $ 80,000.00
$ (900,000.00) $ 72,000.00 $ 72,000.00
$ (100,000.00) $ 8,000.00 $ 8,000.00
3
$ 1,580,000.00
$ 1,422,000.00
$ 158,000.00
IRR Investor
IRR Sponsor
22%
22%
Multi-Family Market Report
Portland – OR
PREPARED BY
Julia Freybote
Associate Professor of Finance & Real Estate
Portland Multi-Family
MULTI-FAMILY MARKET REPORT
Market Key Statistics
1
Vacancy
2
Rent
5
Construction
11
Under Construction Properties
13
Sales
15
Sales Past 12 Months
17
Economy
19
Market Submarkets
24
Supply & Demand Trends
28
Vacancy & Rent
30
Sale Trends
32
Deliveries & Under Construction
34
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Overview
Portland Multi-Family
12 Mo. Delivered Units
12 Mo. Absorption Units
Vacancy Rate
12 Mo. Asking Rent Growth
3,692
3,115
5.4%
4.0%
Leasing activity in the Portland metro area has cooled,
as the historically slower winter months take hold. As a
result, net absorption in the region has drastically
recalibrated from the record performance that spanned
from mid-2021 to mid-2022. In addition, deliveries of
new product will heat up in the coming quarters,
following a resurgence in construction starts in the urban
submarkets. As such, vacancies—which had previously
experienced a drop of more than 200 basis points—have
crept back up to 5.4%.
Nonetheless, the metro’s occupancy reading of 94.6%
remains above the long-term average. A recovery in the
urban core areas that saw an exodus during the
pandemic has acted as somewhat of a stabilizing force.
In downtown, for example, occupancy has risen to above
90%, a more than 900-basis-point upswing from the low
point reached in late 2020.
On balance, these factors will combine to keep a
relatively low ceiling on rent growth in the near term. The
market asking rate now sits near $1,600/unit, reflecting
year-over-year growth of 4.0%, a slight retreat from the
three-year average of 4.8%. However, certain supplystarved suburban submarkets will continue to outperform
the metro average. In popular and affluent communities
such as Hillsboro and Lake Oswego, asking rates
currently range from $1,800 to $1,900/unit and will
continue to climb, given light competition from new
product.
Not all residents, however, can afford idyllic suburban
settings, and most are tightening budgets to battle
stubborn inflation. This has eroded household formations
at the same time that construction starts in the region
have picked up. Units underway total over 10,000, which
is a substantial boost from the seven-year low reached
at the end of 2021. Permitting activity has also gained
steam in certain areas of the region, particularly across
the Columbia River in Vancouver.
CoStar’s base case forecast projects annual deliveries in
2023 and 2024 will outpace 2022 figures. Prospective
tenants could soon have more competing options coming
on line to choose from when selecting a unit, meaning
pricing and negotiation power could swing back in their
favor over the mid-term.
Prior rent growth and a lack of competing supply over the
past 18 months had boosted Portland multifamily asset
attractiveness, prompting buyers to converge on the area
to place capital. Suburban assets with good linkages to
employment nodes are pushing pricing to the largest
degree, but value-add plays have also been popular for
investors targeting an upside in rents. In addition, when
examining deals over $25 million in value occurring since
the start of 2021, the distribution across the metro area
has been fairly uniform. This points to the desirability of
the larger region, as buyers appear willing to secure
assets wherever they can find them.
KEY INDICATORS
Current Quarter
Units
Vacancy Rate
Asking Rent
Effective Rent
Absorption
Units
Delivered Units
Under Constr
Units
4 & 5 Star
75,673
6.5%
$1,853
$1,836
28
58
7,775
3 Star
79,156
5.5%
$1,594
$1,582
11
413
3,229
1 & 2 Star
63,916
3.9%
$1,215
$1,209
(8)
0
112
Market
218,745
5.4%
$1,605
$1,593
31
471
11,116
Annual Trends
12 Month
Historical
Average
Forecast
Average
Peak
When
Trough
When
Vacancy Change (YOY)
0.2%
5.5%
6.2%
7.4%
2004 Q1
3.5%
2000 Q3
Absorption Units
3,115
3,051
4,041
10,963
2021 Q2
(2,836)
2002 Q1
Delivered Units
3,692
3,328
4,905
8,282
2021 Q2
440
2011 Q2
Demolished Units
62
27
24
152
2009 Q3
0
2020 Q4
Asking Rent Growth (YOY)
4.0%
2.6%
2.7%
9.2%
2021 Q4
-4.2%
2009 Q4
Effective Rent Growth (YOY)
4.3%
2.6%
2.7%
9.8%
2021 Q4
-4.4%
2009 Q4
Sales Volume
$2.5B
$1.3B
N/A
$4.4B
2022 Q2
$209.4M
2009 Q3
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 2
Vacancy
Portland Multi-Family
Steady apartment demand over the past 18 months
came by way of relocations amidst strong regional
migration figures. Nonetheless, leasing has cooled from
its record-setting mid-2021 performance. Trailing fourquarter net absorption now equates to 3,100 units,
versus the average annual figure of 6,400 units over the
past five years.
Vacancies still remain near the widely-accepted 5%
equilibrium mark, at 5.4%, reflecting a 0.2% change over
the previous 12 months. But this is primarily because
construction to-date has not kept pace with demand.
Developers have recently picked up some of the slack,
however, and more units are expected in coming
quarters. This may be poorly timed, as residents
reassess spending to battle inflation, delaying some
household formations.
An onslaught of supply on the horizon may not be a
death sentence for Portland’s multifamily market.
Homeownership is still out of reach for many residents
and will likely continue to be in the near term, given
rising interest rates as a result of the FED’s battle
against inflation. As such, renters as a whole comprise
over 45% of Portland households. Relief in the form of
new single-family residential units isn’t around the
corner, either. Despite an expansion of the Urban Growth
Boundary – which is an artifical restrictor to urban sprawl
– other restrictions such as wetlands and farmland
protection, open space and density requirements make
Portland a very land-constrained market. There are
relatively few large tracts of land suitable for singlefamily subdivisions.
These factors could keep forcing a healthy percentage of
residents to turn to apartment living options, and should
provide a measured stream of renters for landlords in
quarters to come.
Given Portland’s land constraints, the few large tracts
that are available have been identified and almost all are
being developed. In the Southwest Portland submarket,
vacancies have compressed to sit below the 5% mark.
The recent movement is attributable to tenants – a large
portion of whom are employed at Oregon Health and
Science University – who are drawn to the nearby South
Waterfront neighborhood’s proximity to downtown
amenities in addition to its upscale and exclusive feel.
OHSU also broke ground on a major hospital expansion
in mid-2022 that will create an additional 3,000 jobs
when complete. This should keep demand here outsized
over the long term. As inventory needs rise in Southwest
Portland, developers appear committed to keeping
tenants from bleeding into other neighborhoods. The
South Waterfront 45 will bring close to 300 4 Star units
out of the ground by late 2023, with additional phases in
the works.
Another area that could serve to shift demand with
existing product is Portland’s Downtown core. Here,
vacancies remain elevated relative to the rest of the
metro, at above 7%, but have compressed approximately
300 basis points over the last year. Contributing to the
decline are renters that left the pricey business district
during the height of the pandemic, some of which are
now being drawn back to Portland’s busiest hub as
restaurants and other entertainment offerings open back
up and the necessity to be proximate to these services
grows.
Further outside of the urban cores, western suburbs like
Hillsboro and Beaverton benefit from the presence of
Intel and Nike, among the metro’s largest employers who
have recently completed major expansions. These
submarkets consistently receive the most institutional
interest relative to other suburbs, and for good reason.
Heavy demand here is generated by tenants’ desire to
live close to these major employers and supply has not
kept pace of late. Resulting rent growth is forecast to
continue to post near double-digit figures on a yearover-year basis.
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 3
Vacancy
Portland Multi-Family
ABSORPTION, NET DELIVERIES & VACANCY
OVERALL & STABILIZED VACANCY
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 4
Vacancy
Portland Multi-Family
VACANCY RATE
VACANCY BY BEDROOM
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 5
Rent
Portland Multi-Family
As of the first quarter of 2023, market rent in Portland
has reached $1,610 per month, reflecting year-overyear growth of 4.0%. By comparison, the national index
posted average growth of 3.5% over the same period.
Over the past ten years, Portland has averaged rent
growth of 4.2% per year.
High in-migration figures put added pressure on housing
needs in recent quarters, as new residents scrambled to
find well-located units. New supply in the pipeline,
however, will serve to loosen the market in future
quarters. This, coupled with tempered leasing, will place
some downard pressure on rent growth.
In the meantime, Portland’s outlying suburban
communities continue to post the strongest rent growth.
As renter preferences shifted and the importance of a
central location diminished during the worst of the
pandemic, tenants found suburban apartments more
appealing. Some who relocated will likely stay there
permanently, allowing landlords to keep some slight
pressure on rental rates in the absence of competing
options. The Hillsboro, Beaverton, Sherwood and Aloha
submarkets have all seen trailing four quarter rent growth
comfortably outpace metro averages.
Downtown, rents had bounced back by mid-2022, but
companies will need to continue to commit workers to
the urban areas for this trend to continue. Tech and
apparel sector office leases have been the bright spot of
downtown activity over the past year, but the central
business core remains a shell of its pre-pandemic form.
The upcoming departures of the Umpqua Bank and
Unitus Community Credit Union headquarters will deal
another significant blow to central Portland in the coming
months.
The State of Oregon capped annual rent increases at 7%
plus inflation for assets 15 years old or older in 2019.
This, coupled with ongoing legislative efforts by the
Portland City Council, temporarily helped bring down rent
growth from the highs seen in 2015. However, given the
majority of new units to come online since this time have
been rated 3 Star and above, utilitarian units now make
up the minority of market share. Rents in the luxury
assets will naturally be higher, noting finishes, and given
new projects aren’t required to adhere to these policies
for 15 years, rent growth naturally ballooned and
eclipsed its prior 2015 peak by the end of 2021.
In turn, a rent increase cap of 7% plus inflation is actually
a large premium to the metropolitan area’s historical
average rent growth of 2.7%. Investors, for their part,
seem unfazed by the cap. Sales volume in the region
posted an outsized record in 2021 and elevated activity
has contiuned into 2022.
In the last decade, the typical rent for a market-rate
Portland apartment has increased by 49.0%. By
comparison, national rent growth was 42.0% over this
period.
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 6
Rent
Portland Multi-Family
DAILY ASKING RENT PER SF
MARKET RENT PER UNIT & RENT GROWTH
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 7
Rent
Portland Multi-Family
MARKET RENT PER UNIT BY BEDROOM
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 8
Rent
Portland Multi-Family
4 & 5 STAR EXPENSES PER SF (ANNUAL)
Operating Expenses
Market / Cluster
Capital Expenditures
Mgmt.
Admin.
Payroll
Water
Utilities
Maint.
Insurance
Taxes
Appliance Structural
Other
Total
Portland
$0.53
$0.73
$0.82
$0.67
$0.86
$0.97
$0.26
$1.40
$0.29
Aloha
$0.38
$0.79
$0.53
$0.64
$0.79
$0.51
$0.26
$1.29
$0.32
$1.80
$3.05
$11.38
$1.84
$3.09
$10.44
Beaverton
$0.48
$0.74
$0.62
$0.70
$0.86
$0.90
$0.25
$1.32
Central Northeast
$0.57
$0.77
$1.40
$0.85
$0.98
$1.15
$0.30
$1.53
$0.28
$1.69
$2.85
$10.69
$0.30
$1.94
$3.25
$13.04
Clackamas County
$0.52
$0.77
$1.13
$1.14
$1.17
$2.74
$0.25
$1.74
$0.30
$1.94
$3.25
$14.95
Clark County
$0.52
$0.65
$0.36
$0.44
$0.69
$0.58
Damascus
$0.52
$0.77
$0.53
$0.57
$0.76
$0.93
$0.24
$1.10
$0.30
$1.94
$3.25
$10.07
$0.25
$1.53
$0.30
$1.94
$3.25
$11.35
Downtown Portland
$0.60
$0.74
$0.64
$0.53
$0.99
East Portland
$0.52
$0.77
$1.22
$1.10
$1.13
$0.62
$0.25
$1.51
$0.28
$1.76
$2.98
$10.90
$2.53
$0.25
$1.71
$0.30
$1.94
$3.25
$14.72
Hillsboro
$0.38
$0.79
$0.53
$0.64
$0.79
$0.54
$0.26
$1.30
$0.32
$1.84
$3.09
$10.48
Lake Oswego
$0.51
$0.70
$0.45
North Portland
$0.56
$0.77
$1.31
$0.56
$0.70
$0.91
$0.22
$1.25
$0.23
$1.19
$2.15
$8.87
$0.95
$1.04
$1.68
$0.28
$1.60
$0.30
$1.94
$3.25
$13.68
Northeast Portland
$0.58
$0.77
Northwest Portland
$0.53
$0.77
$1.40
$0.85
$0.98
$1.15
$0.30
$1.53
$0.30
$1.94
$3.25
$13.05
$0.53
$0.55
$0.93
$0.55
$0.25
$1.44
$0.30
$1.89
$3.18
$10.92
Outlying Washingto…
$0.52
$0.77
$1.13
$1.14
$1.17
$2.74
$0.25
$1.74
$0.30
$1.94
$3.25
$14.95
Sherwood/Tualatin
Southeast Portland
$0.53
$0.73
$1.12
$0.70
$0.91
$1.14
$0.24
$1.51
$0.28
$1.69
$2.89
$11.74
$0.59
$0.75
$1.37
$0.81
$0.94
$1.14
$0.29
$1.52
$0.29
$1.82
$3.07
$12.59
Southwest Portland
$0.60
$0.77
$0.53
$0.50
$1
$0.59
$0.25
$1.53
$0.30
$1.94
$3.25
$11.26
Tigard
$0.53
$0.72
$1.12
$0.70
$0.92
$1.14
$0.24
$1.50
$0.27
$1.64
$2.81
$11.59
Troutdale/Gresham
$0.53
$0.73
$1.17
$0.71
$0.81
$1.14
$0.24
$1.51
$0.28
$1.73
$2.94
$11.79
Vancouver
$0.52
$0.64
$0.36
$0.44
$0.69
$0.57
$0.24
$1.09
$0.29
$1.82
$3.10
$9.76
Wilsonville
$0.49
$0.64
$0.46
$0.55
$0.70
$0.90
$0.22
$1.28
$0.21
$1.31
$2.27
$9.03
Expenses are estimated using NCREIF, IREM, and CoStar data using the narrowest possible geographical definition from Zip Code to region.
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 9
Rent
Portland Multi-Family
3 STAR EXPENSES PER SF (ANNUAL)
Operating Expenses
Market / Cluster
Capital Expenditures
Mgmt.
Admin.
Payroll
Water
Utilities
Maint.
Insurance
Taxes
Appliance Structural
Other
Total
Portland
$0.50
$0.57
$0.67
$0.62
$0.78
$0.98
$0.20
$1.26
$0.18
Aloha
$0.36
$0.54
$0.51
$0.61
$0.78
$0.49
$0.20
$1.23
$0.17
$0.49
$1.20
$7.45
$0.44
$1.06
$6.39
Beaverton
$0.49
$0.54
$0.52
$0.67
$0.78
$1.01
$0.20
$1.37
Central Northeast
$0.51
$0.55
$1.08
$0.68
$0.79
$1.10
$0.20
$1.41
$0.17
$0.46
$1.08
$7.29
$0.18
$0.49
$1.13
$8.12
Clackamas County
$0.49
$0.63
$1.07
$1.09
$1.11
$2.61
$0.19
$1.66
$0.24
$0.44
$1.06
$10.59
Clark County
$0.51
$0.54
$0.35
$0.42
$0.65
$0.55
Columbia County
$0.49
$0.63
$1.07
$1.09
$1.11
$2.61
$0.20
$1.04
$0.17
$0.39
$1.38
$6.20
$0.19
$1.66
$0.24
$0.44
$1.06
$10.59
Damascus
$0.49
$0.61
$0.36
$0.54
$0.65
Downtown Portland
$0.56
$0.60
$0.67
$0.53
$0.92
$0.88
$0.19
$0.96
$0.16
$0.44
$1.04
$6.32
$0.59
$0.21
$1.44
$0.20
$0.80
$1.58
$8.10
East Portland
$0.49
$0.62
$1.07
$1.08
$1.10
$2.54
$0.20
$1.64
$0.23
$0.49
$1.12
$10.58
Hillsboro
$0.36
$0.55
$0.51
Lake Oswego
$0.50
$0.61
$0.38
$0.61
$0.78
$0.51
$0.20
$1.24
$0.18
$0.54
$1.20
$6.68
$0.53
$0.67
$0.83
$0.19
$0.99
$0.16
$0.44
$1.04
$6.34
North Portland
$0.50
$0.57
Northeast Portland
$0.52
$0.57
$1.07
$0.88
$0.94
$1.84
$0.20
$1.51
$0.20
$0.44
$1.04
$9.19
$1.12
$0.70
$0.81
$1.10
$0.21
$1.42
$0.19
$0.68
$1.41
$8.73
Northwest Portland
$0.52
$0.56
$0.51
$0.50
$0.91
$0.35
$0.20
$1.36
$0.17
$0.46
$1.08
$6.62
Oregon City
Outlying Washingto…
$0.50
$0.63
$0.36
$0.54
$0.65
$0.88
$0.20
$0.97
$0.17
$0.44
$1.06
$6.40
$0.50
$0.65
$1.08
$1.10
$1.12
$2.63
$0.20
$1.67
$0.25
$0.63
$1.33
$11.16
Sherwood/Tualatin
$0.51
$0.55
$1.01
$0.67
$0.77
$1.08
$0.20
$1.37
$0.17
$0.44
$1.06
$7.83
Southeast Portland
$0.51
$0.54
$1.08
$0.71
$0.80
$1.18
$0.20
$1.42
$0.18
$0.49
$1.12
$8.23
Southwest Portland
$0.56
$0.55
$0.50
$0.46
$0.94
$0.30
$0.20
$1.37
$0.16
$0.44
$1.03
$6.51
Tigard
$0.50
$0.54
$1.04
$0.68
$0.78
$1.09
$0.20
$1.40
$0.17
$0.44
$1.05
$7.89
Troutdale/Gresham
$0.51
$0.56
$1.08
$0.71
$0.81
$1.22
$0.20
$1.43
$0.18
$0.51
$1.16
$8.37
Vancouver
$0.51
$0.53
$0.34
$0.42
$0.65
$0.55
$0.20
$1.04
$0.17
$0.43
$1.42
$6.26
Wilsonville
$0.50
$0.62
$0.51
$0.57
$0.68
$0.93
$0.20
$1.07
$0.18
$0.49
$1.13
$6.88
Yamhill County
$0.49
$0.62
$1.07
$1.08
$1.09
$2.53
$0.20
$1.63
$0.23
$0.51
$1.14
$10.59
Expenses are estimated using NCREIF, IREM, and CoStar data using the narrowest possible geographical definition from Zip Code to region.
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 10
Rent
Portland Multi-Family
1 & 2 STAR EXPENSES PER SF (ANNUAL)
Operating Expenses
Market / Cluster
Capital Expenditures
Mgmt.
Admin.
Payroll
Water
Utilities
Maint.
Insurance
Taxes
Appliance Structural
Other
Total
Portland
$0.43
$0.39
$0.60
$0.54
$0.68
$0.71
$0.18
$1.04
$0.07
Aloha
$0.34
$0.47
$0.48
$0.58
$0.74
$0.46
$0.19
$1.06
$0.07
$0.41
$0.96
$6.01
$0.42
$0.86
$5.67
Beaverton
$0.47
$0.47
$0.47
$0.64
$0.74
$1
$0.19
$1.08
Central Northeast
$0.46
$0.31
$1.02
$0.61
$0.71
$0.87
$0.19
$1.10
$0.08
$0.42
$0.87
$6.43
$0.07
$0.42
$0.86
$6.62
Clackamas County
$0.38
$0.23
$1.01
$0.78
$0.58
$0.61
$0.19
$1.05
$0.06
$0.42
$0.86
$6.17
Clark County
$0.45
$0.41
$0.21
$0.40
$0.63
$0.52
Columbia County
$0.42
$0.34
$1.03
$0.87
$0.73
$1.18
$0.14
$0.99
$0.06
$0.37
$1.31
$5.49
$0.19
$1.22
$0.11
$0.43
$0.91
$7.43
Damascus
$0.44
$0.43
$0.35
$0.52
$0.62
Downtown Portland
$0.47
$0.42
$0.70
$0.52
$0.78
$0.84
$0.19
$0.92
$0.06
$0.42
$0.86
$5.65
$0.54
$0.19
$1.13
$0.09
$0.42
$0.89
$6.15
East Portland
$0.37
$0.28
$0.94
$0.66
$0.66
$0.76
$0.18
$1.06
$0.06
$0.42
$0.86
$6.25
Hillsboro
$0.34
$0.47
$0.48
Lake Oswego
$0.44
$0.44
$0.39
$0.58
$0.74
$0.48
$0.19
$1.06
$0.07
$0.42
$0.86
$5.69
$0.49
$0.67
$0.66
$0.19
$0.96
$0.06
$0.42
$0.86
$5.58
North Portland
$0.43
$0.27
Northeast Portland
$0.48
$0.31
$1.01
$0.71
$0.66
$0.73
$0.19
$1.08
$0.07
$0.42
$0.86

$6.43
$1.02
$0.64
$0.74
$0.86
$0.19
$1.10
$0.08
$0.42
$0.86
$6.70
Northwest Portland
$0.46
$0.45
$0.48
$0.44
$0.81
$0.29
$0.19
$1.11
$0.08
$0.42
$0.89
$5.62
Oregon City
Outlying Washingto…
$0.44
$0.43
$0.35
$0.52
$0.62
$0.84
$0.19
$0.92
$0.06
$0.42
$0.86
$5.65
$0.39
$0.24
$1
$0.78
$0.59
$0.64
$0.19
$1.06
$0.06
$0.42
$0.86
$6.23
Sherwood/Tualatin
$0.38
$0.50
$0.22
$0.61
$0.73
$0.98
$0.17
$1.19
$0.09
$0.42
$0.87
$6.16
Southeast Portland
$0.48
$0.34
$1.02
$0.64
$0.74
$0.95
$0.19
$1.10
$0.07
$0.42
$0.86
$6.81
Southwest Portland
$0.44
$0.43
$0.48
$0.44
$0.77
$0.29
$0.19
$1.05
$0.06
$0.42
$0.86
$5.43
Tigard
$0.35
$0.51
$0.16
$0.64
$0.74
$0.99
$0.19
$1.11
$0.07
$0.42
$0.86
$6.04
Troutdale/Gresham
$0.31
$0.37
$1
$0.51
$0.64
$0.81
$0.17
$1.06
$0.05
$0.42
$0.86
$6.20
Vancouver
$0.45
$0.41
$0.21
$0.40
$0.63
$0.52
$0.14
$0.99
$0.06
$0.37
$1.31
$5.49
Wilsonville
$0.44
$0.43
$0.35
$0.52
$0.62
$0.84
$0.19
$0.92
$0.06
$0.42
$0.86
$5.65
Yamhill County
$0.39
$0.24
$1.01
$0.79
$0.59
$0.66
$0.19
$1.06
$0.06
$0.42
$0.86
$6.27
Expenses are estimated using NCREIF, IREM, and CoStar data using the narrowest possible geographical definition from Zip Code to region.
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 11
Construction
Portland Multi-Family
The metro area apartment pipeline peaked at nearly
13,000 units under development in mid-2018, part of a
decade-long expansion that boosted Portland’s
apartment inventory by 33.1%. This was the largest
construction cycle in metro history that brought a wave of
mostly high-end supply, substantially altering the
dynamics of Portland’s housing market. Rent per unit has
grown by 49.0% over the last ten years.
Since this time, a slowdown in construction may indicate
historical legislative changes to address affordability have
impacted the region’s development appeal slightly. Other
factors, however, were also at play over the last two
years. Elevated materials costs as a result of the global
supply chain crunch, as well as labor shortages inhibited
the ground-breaking of new projects. Permitting activity
has thus lagged slightly, with the most recent data
suggesting total permits issued in 2021 were well below
the 2017 peak.
Regardless, there are now 11,000 units under
construction, which will expand existing inventory by
5.1%. And this represents an uptick since the start of the
year, meaning developers may be starting to react in
earnest to the historically heavy leasing of the past 18
months, or projects previously approved before the
pandemic have now begun. Not all of these units will be
hitting the market immediately, however. Net deliveries
over the last 12 months totaled 3,600 units, indicating a
small shortage has formed recently, based on trailingyear net absorption of 3,100 units.
Locationally, Downtown Portland underwent the region’s
most dramatic shift last decade as apartment inventory
grew by almost 85%. All of these new developments are
luxury 4 & 5 Star projects. In particular, the Pearl District,
flush with restaurants and other urban amenities, was a
popular target.
Dense hubs such as downtown, though, often require a
more complex development path. With virtually no vacant
land available, developers often have to purchase
previously underdeveloped sites and raze existing
structures. The process is time-consuming and adds
additional expenses. Therefore, much of the
development in and around the urban cores has shifted
to Southwest Portland, where some of the last remaining
vacant tracts of readily buildable land remain. The South
Waterfront area alone has seen nearly 2,000 units added
since 2016, over 300 of which came online in the past
year. The Dylan is the largest project to recently deliver
here. It is a 232 unit, 4 Star mid-rise complex developed
by Texas-based Alamo Manhattan in late 2021.
Occupancy has risen to well over 40%. The South
Waterfront 45 will bring another 291 4 Star units out of
the ground by late 2023, with additional phases in the
works.
In the west suburbs, the Tigard submarket remains an
affordable commuter suburb and alternative to expensive
areas such as Hillsboro. The neighborhood’s access to
major employment nodes has drawn more renters in
recent quarters and it remains undersupplied at around
7,500 units. Thus, the 219-unit Overland was developed
in light of these trends. The complex includes ground
floor retail and office space, with a parking structure and
surface parking lot.
Vancouver, Washington, is a popular destination for
builders too, with over 1,500 units delivered in 2021,
ranking near the top of all Portland submarkets. Projects
located here offer manageable commutes to Portland but
are not subject to Oregon’s rent control laws and
Portland’s zoning requirements. As a result, permitting in
Vancouver continues to trend upward. Since 2017,
permits issued in greater Clark County on a yearly basis
have risen by over 30%. Demand for these units may
already be heating up. Washington’s favorable tax laws –
such as a lack of a personal income tax – have drawn
more residents to consider a move across the river in
recent years to work remotely and avoid Oregon’s
income tax.
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 12
Construction
Portland Multi-Family
DELIVERIES & DEMOLITIONS
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 13
Under Construction Properties
Portland Multi-Family
Properties
Units
Percent of Inventory
Avg. No. Units
73
11,116
5.1%
152
UNDER CONSTRUCTION PROPERTIES
UNDER CONSTRUCTION
Property Name/Address
Rating
Units
Stories
Start
Complete
1
River Terrace Town Center
13794 SW Roy Roger Way
501
3
Nov 2022
Nov 2023
2
Brynhill Development
32055 NW North Ave
500
2
Oct 2021
Apr 2023
3
Aegis I & II
1119 C St
342
6
Nov 2022
Nov 2023
4
The Press Blocks – Resi…
1621 SW Taylor St
341
24
Oct 2022
Dec 2023
5
The Willamette Tower – B…
4100 SE River Pky
340
23
Nov 2021
Nov 2023
6
Alta Amberglen
19602-19698 Northwest V…
326
5
Sep 2022
Jan 2024
7
Meritum Evergreen
1441 NE 136th Ave
300
3
Mar 2022
Mar 2023
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
Developer/Owner
Taylor Morrison BTR, Inc. a Dela…
The New Home Company
Pacific Community Design
Marathon Real Estate Services, L…
Marathon Real Estate Services, L…
Urban Renaissance Group
Security Properties, Inc.
Alamo Manhattan LLC
Alamo Manhattan LLC
Wood Partners
Investment Development Manage…
–
1/17/2023
Page 14
Under Construction Properties
Portland Multi-Family
UNDER CONSTRUCTION
Property Name/Address
8
110 N Tomahawk Island Dr
Rating
Units
Stories
Start
Complete
284
1
Jun 2022
Sep 2023
9
Modera Raleigh Hills
4822 SW Western Ave
270
5
Oct 2022
Sep 2024
10
Commons on the Tualatin
6645 SW Nyberg Ln
264
3
Jan 2021
Mar 2023
11
The Oliveen
19814 SE 1st St
264
4
Mar 2021
Mar 2023
12
Pleasant Valley Villages…
11404 SE Mt Talbert Ave
259
3
Nov 2022
Nov 2023
13
Modera Morrison
1120 SE Morrison St
247
7
Sep 2021
Jul 2023
14
Ninebark
198 S 6th St
242
3
Apr 2022
May 2023
15
Broadleaf Arbor
2298 Gable Rd
239
4
Jan 2021
Aug 2023
16
The Sutton
1550 NW Naito Pky
236
17
Mar 2021
Feb 2023
17
Seven Acres
10999 SE 37th Ave
234
3
Jan 2021
Mar 2023
18
The Olivia – Block 42
3850 S Bond Ave
231
5
Jan 2020
Mar 2023
19
Timber House
500 W Columbia Way
226
8
Jan 2022
Apr 2023
20
The Residences at Eleve…
1102 SW Washington St
222
24
Feb 2020
Feb 2023
21
Zeal Lofts
3185 N Williams Ave
215
6
Mar 2022
Sep 2023
22
Residences at 11W
1140 SW Washington St
213
3
Oct 2021
Feb 2023
23
Slabtown Square/Block…
1417 NW 20th Ave
200
6
Apr 2022
Mar 2024
24
Timberview
19896 S Beavercreek Rd
180
3
Apr 2021
Feb 2023
25
Sonder Fields
14798 SE Parklane Dr
180
2
Nov 2021
Feb 2023
26
Cobalt Apartments
14721 SE 172nd Ave
180
2
May 2022
Jul 2023
27
Waterleaf
2065 SW River Pky
178
6
Jan 2021
Feb 2023
28
Broadstone Claro
1000 W Columbia Way
178
7
Mar 2021
Feb 2023
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
Developer/Owner
Mill Creek Residential Trust LLC
Mill Creek Residential Trust LLC
Tandem Property Management
Cascadia Development Partners
Romano Capital
Holt Homes
Mill Creek Residential Trust LLC
Mill Creek Residential Trust LLC
Killian Pacific
Killian Pacific
LMC Construction
Atlas Investments
Lincoln Property Company
Lincoln Property Company
tyee Management Company LLC
Alamo Manhattan LLC
Alamo Manhattan LLC
CEDARst Companies
CEDARst Companies
Downtown Development Group
Downtown Development Group
Vibrant Cities
Segrin Living Trust
Downtown Development Group
Guardian Real Estate Services
Guardian Real Estate Services
Gregg A Mecham
HV PARKLANE LLC
BRIDGE Housing Corporation
BRIDGE Housing Corporation
Alliance Residential Company
Alliance Residential Company
1/17/2023
Page 15
Sales
Portland Multi-Family
Portland has become a major market for institutional
investors chasing both population growth and a diverse
economic base. Multifamily cap rates have tightened
over the past five years as a result, trending to 4.4%,
versus the national rate of 5.0%. And this compression
has done little to deter more capital from entering the
market. Given added institutional interest, many Portland
communities are transacting as part of much larger
portfolio deals, as investors increasingly seek to add
Portland assets to their balance sheets.
A massive portfolio deal in May 2022 saw the national
holdings of Resource REIT acquired by Blackstone Real
Estate Investment Trust (BREIT) for $3.7 billion, or
$292,000/unit. Blackstone completed the deal by
purchasing all shares of common stock. The assets in
the portfolio span 13 states, including Oregon, Arizona,
Colorado, Florida, Georgia and Texas. The two Oregon
communities include the 81 Fifty at West Hills Apartment
Homes and Montclair Terrace. 81 Fifty is located in the
Hillsboro submarket and is made up of 357 units. It was
built in 1986 and renovated in 2013. The allocated price
of $154.8 million equates to $434,000/unit. Montclair
Terrace is located in Beaverton and the 188-unit
community was built in 1968 and remodeled in 2015. It
was operating at stabilization. The allocated price was
$71 million (378,000/unit).
Another portfolio deal in January 2022 saw three
properties change hands in Vancouver. ColRich, based
in San Diego, CA, acquired the Silver Oak Apartments,
Sedona at Bridgecreek, and Larkspur Place for a
combined sale price of $137 million ($271,000/unit). The
seller was Starwood Capital Group, who had previously
acquired the assets in 2017. The three facilities totaled
over 500 units.
Outside of portfolio deals, the largest standalone trades
have been taking place in the suburbs. In July 2022, Oak
Street Lofts, located in Tigard, sold for $81.5 million
($436,000/unit) to JLL Income Property Trust. New Yorkbased Abacus Capital Group offloaded the stabilized
asset. The 4 Star community features 187 studio, one-,
and two-bedroom units. It was built in 2019. Suburban
Portland communities like Tigard with strong population
growth and access to employment nodes have enticed
investors to push pricing on deals like these. Home
ownership has also become increasingly out of reach for
most buyers, lending support to continued strong leasing,
at least mid-term.
In October 2022, the 347-unit One Jefferson in Lake
Oswego sold for $124 million ($357,000/unit). The 4 Star
garden complex was built in 1987, with a fully
modernized renovation in 2019. Abacus Capital Group
LLC acquired the property from Security Properties, Inc.
and Pacific Life Insurance Company. Security had
originally purchased the asset in 2016 for $78 million and
the sale met their return and time horizon goals.
Value-add plays in the region have been popular as
well, as investors aim for attractive pricing in a growing
market. Given Portland’s recent run in rent growth,
buyers appear confident that underserved properties with
an added facelift offer attractive upside potential.
For example, in October 2021, Greystar purchased the
423-unit Seven West at the Trails in Beaverton. Closing
price was equal to $145.2 million ($343,000/unit). Many
of the units had received recent upgrades and Greystar
had planned to complete more renovations. The complex
was stabilized at the time of sale.
Trailing four quarter volume as a result of these deals
equates to $2.6 billion, compared with the ten-year
average of $2.2 billion per year. The market sale price
has swelled to $290,000 per unit, in comparison to the
national index of $260,000 per unit.
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 16
Sales
Portland Multi-Family
SALES VOLUME & MARKET SALE PRICE PER UNIT
MARKET CAP RATE
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 17
Sales Past 12 Months
Portland Multi-Family
Sale Comparables
Avg. Price/Unit (thous.)
Average Price (mil.)
Average Vacancy at Sale
275
$270
$12.1
5.0%
SALE COMPARABLE LOCATIONS
SALE COMPARABLES SUMMARY STATISTICS
Sales Attributes
Low
Average
Median
High
Sale Price
$593,358
$12,122,244
$3,312,500
$156,456,591
Price/Unit
$56,147
$270,228
$205,469
$458,333
Cap Rate
1.0%
5.0%
5.1%
7.6%
Vacancy Rate At Sale
0%
5.0%
0%
100%
Time Since Sale in Months
0.6
6.6
6.9
11.9
Property Attributes
Low
Average
Median
High
Property Size in Units
3
40
14
357
Number of Floors
1
2
2
6
Average Unit SF
100
865
813
5,443
Year Built
1888
1973
1973
2022
Star Rating
2.5
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 18
Sales Past 12 Months
Portland Multi-Family
RECENT SIGNIFICANT SALES
Property Information
Property Name/Address
1
81 Fifty at West Hills Apartme…
8150 SW Barnes Rd
2
One Jefferson
1 Jefferson Pky
3
Timbers at Tualatin
6765 SW Nyberg St
4
Avery at Orenco Station
6199 NE Alder St
5
Skyline at Murrayhill
11601 SW Teal Blvd
6
Haven at Golf Creek
1807 SW Golf Creek Dr
7
Oak Street Lofts
8920 SW Oak St
8
Portola Bridge Creek
9211 NE 15th Ave
9
Montclair Terrace
4835 SW Oleson Rd
10
River Ridge Apartments
17865 SW Pacific Hwy
11
The Jones
1099 NW Ordonez Pl
12
Hudson South Apartments
10635-10695 SW Murdock Ln
13
Aspenridge Apartments
13719 SE 18th St
14
Burnside 26
2625 E Burnside St
15
Lineage at Willow Creek
18380 NW Heritage Pky
16
Aster Parc Apartments and T…
6300 SW 188th Ct
17
Terra at Hazel Dell
2600 NE Minnehaha St
18
134th Street Lofts
13414 NE 23rd Ave
19
Meadow Brook Place
2231 NE Bridgecreek Ave
20
Willow Grove
11981 SW Center St
Sale Information
Rating
Yr Built
Units
Vacancy
Sale Date
Price
Price/Unit
Price/SF
–
1986
357
6.7%
5/19/2022
$156,456,591
$438,253
$579
–
1987
347
6.6%
10/6/2022
$124,000,000
$357,348
$341
–
1994
300
1.3%
10/4/2022
$96,500,000
$321,666
$382
–
2004
264
2.7%
10/4/2022
$96,200,000
$364,393
$348
–
1990
312
7.4%
10/4/2022
$90,000,000
$288,461
$187
–
1990
282
6.4%
10/4/2022
$82,300,000
$291,843
$328
–
2019
187
6.4%
7/15/2022
$81,500,000
$435,828
$408
–
1989
270
4.8%
1/20/2022
$75,000,000
$277,777
$299
–
1968
188
4.8%
5/19/2022
$74,015,780
$393,700
$429
–
2017
180
2.8%
6/9/2022
$70,000,000
$388,888
$389
–
2012
193
1.6%
10/4/2022
$69,500,000
$360,103
$290
–
1974
227
2.6%
7/29/2022
$59,200,000
$260,792
$317
–
1985
240
2.5%
5/24/2022
$57,150,000
$238,125
$196
–
2014
135
3.7%
5/18/2022
$44,250,000
$327,777
$466
–
1981
121
2.5%
4/7/2022
$42,000,000
$347,107
$395
–
1974
146
0.7%
6/22/2022
$40,000,000
$273,972
$585
–
1991
206
1.0%
10/4/2022
$39,500,000
$191,747
$232
–
2021
124
21.8%
7/15/2022
$38,750,000
$312,500
$357
–
1996
154
0%
12/13/2022
$38,500,000
$250,000
$129
–
1986
119
5.0%
9/1/2022
$36,100,000
$303,361
$325
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 19
Economy
Portland Multi-Family
Over the past year, 55,000 jobs have been added to
nonfarm payrolls in Portland, for a change of 4.6%. Total
job growth in the U.S. over the past year was 3.1%.
While the Federal Reserve should maintain a hawkish
stance on its battle with inflation, consumers appear
much more prepared to deal with a slight downturn in the
economy, showing resilience in spending despite
decades-high CPI growth. Rate hikes by the Central
Bank to tame surging prices are likely to continue in the
near term, given recent labor market tightness.
Unemployment, despite currently sitting below long-run
averages, will likely trend upward as a result.
Incomes in Portland exceed the national average, and
population growth remains steady. The advent of remote
work during the pandemic drove many residents to the
city from other more expensive metro areas; of the 11
West Coast metros with at least 1 million residents, only
Fresno, California, has cheaper average apartment rents
than Portland. Portland is popular with millennials looking
for creative, affordable, eco-friendly spaces close to
transit hubs that allow them to take advantage of the
region’s high quality of life. The lack of a sales tax in
Oregon and the lack of an income tax in Washington
also appeal. In addition, the area is home to several
employers with a global reach.
Intel and Nike, the metro’s largest non-government, nonhealthcare employers, are both midway through
substantial expansions of their corporate campuses. In
July 2019, Intel broke ground on a 1.5-million-SF
expansion to D1X at its Ronler Acres campus in
Hillsboro that has now been completed. Previously, the
multibillion-dollar D1X development delivered 2.2 million
SF in 2015, marking the largest capital project in
Oregon’s history.
Nike’s relationship with the state government has been
somewhat volatile, but this changed after the legislature
agreed to lock in Nike’s state tax rate at current levels.
The company’s commitment to the region has culminated
in the construction of 1.4 million SF of office space at its
Beaverton campus. Nike now occupies 350 acres of
contiguous real estate, one of the largest corporate
campuses in America.
Nike has attracted a skilled workforce—as well as a
number of competitors—to the metro. Dr. Martens,
Columbia Sportswear, and Lacrosse Footwear all have
headquarters in the region, and Adidas North America is
nearing completion of a 425,000-SF office expansion of
its headquarters. Under Armour moved into a former
YMCA building in Southwest Portland in 2017.
Along with Intel, job sector growth by way of
biotechnology firms is beginning to pick up speed and
could drive population and wage gains. Drawn to the
area’s affordability and dynamic work force, San
Francisco-based Genentech and Twist Biosciences have
each made significant investments in the metro area of
late. Genentech recently completed a $175 million
expansion in Hillsboro, adding nearly 130,000 SF to its
facility, while Twist doubled its footprint at the ParkWorks
Industry Center in Wilsonville to 190,000 SF. The
company is expected to contribute an additional $70
million in capital for the project that can accommodate
around 400 additional bioscience employees. Moves
such as these are likely to draw more companies to the
area in search of talent.
Aiding in this talent pipeline will be Oregon Health &
Science University, whose board of directors approved a
$650-million hospital expansion last fall, expected to
break ground in the near term. The project will
accommodate an additional 4,000 staff members to
serve the facilities when complete.
Amazon is another major contributor to Portland’s
economy and has invested around $2.8 billion into
Oregon. After acquiring Portland-based Elemental
Technologies for $296 million in October 2015, the
company has leased about 200,000 SF of office space in
the CBD, along with about 2.5 million SF of industrial
space in the greater Portland metro. Amazon’s industrial
footprint includes a sortation center in Hillsboro
employing 1,000 workers and fulfillment centers in North
Portland (918,000 SF) and Troutdale (860,000 SF), both
delivered in 18Q3, that collectively employ about 3,000
workers. Other major facilities underway for the ecommerce titan include a fulfillment facility in Woodburn,
along Interstate 5.
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 20
Economy
Portland Multi-Family
PORTLAND EMPLOYMENT BY INDUSTRY IN THOUSANDS
CURRENT JOBS
CURRENT GROWTH
10 YR HISTORICAL
5 YR FORECAST
Industry
Jobs
LQ
Market
US
Market
US
Market
US
Manufacturing
132
1.3
5.38%
2.81%
1.43%
0.75%
0.79%
0.11%
Trade, Transportation and Utilities
228
1.0
1.49%
2.64%
1.68%
1.25%
0.13%
0.07%
Retail Trade
118
0.9
0.66%
1.83%
1.10%
0.63%
0.31%
0.03%
Financial Activities
78
1.1
3.55%
1.79%
2.13%
1.42%
0.31%
0.20%
Government
149
0.8
1.22%
0.64%
0.50%
0.17%
0.93%
0.55%
Natural Resources, Mining and Construction
82
1.2
4.43%
3.40%
5.03%
2.49%
1.04%
0.34%
Education and Health Services
191
1.0
5.86%
3.07%
2.36%
1.65%
1.05%
0.64%
Professional and Business Services
196
1.1
2.99%
3.46%
2.68%
2.15%
0.58%
0.44%
Information
28
1.1
4.97%
4.81%
1.67%
1.31%
1.30%
0.35%
Leisure and Hospitality
123
0.9
12.21%
6.07%
1.90%
1.32%
1.28%
1.18%
Other Services
43
0.9
7.59%
2.66%
1.36%
0.51%
0.89%
0.42%
Total Employment
1,251
1.0
4.34%
2.93%
1.98%
1.28%
0.74%
0.45%
Source: Oxford Economics
LQ = Location Quotient
JOB GROWTH (YOY)
Source: Oxford Economics
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 21
Economy
Portland Multi-Family
UNEMPLOYMENT RATE (%)
NET EMPLOYMENT CHANGE (YOY)
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 22
Economy
Portland Multi-Family
MEDIAN HOUSEHOLD INCOME
POPULATION GROWTH (YOY %)
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 23
Economy
Portland Multi-Family
NET POPULATION CHANGE (YOY)
DEMOGRAPHIC TRENDS
Current Level
Demographic Category
12 Month Change
10 Year Change
5 Year Forecast
Metro
US
Metro
US
Metro
US
Metro
US
Population
2,535,378
333,021,219
0.8%
0.3%
1.0%
0.6%
1.0%
0.5%
Households
979,270
124,292,250
0.8%
0.2%
1.1%
0.7%
1.0%
0.5%
Median Household Income
$92,539
$76,033
8.3%
7.7%
5.0%
4.0%
3.2%
3.1%
Labor Force
1,391,064
165,243,844
2.2%
1.8%
1.6%
0.6%
0.7%
0.5%
Unemployment
3.6%
3.6%
-0.2%
-0.5%
-0.4%
-0.4%
–
–
Source: Oxford Economics
POPULATION GROWTH
LABOR FORCE GROWTH
INCOME GROWTH
Source: Oxford Economics
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 24
Submarkets
Portland Multi-Family
PORTLAND SUBMARKETS
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 25
Submarkets
Portland Multi-Family
SUBMARKET INVENTORY
Inventory
12 Month Deliveries
Under Construction
No.
Submarket
Bldgs
Units
% Market
Rank
Bldgs
Units
Percent
Rank
Bldgs
Units
Percent
Rank
1
Aloha
153
7,235
3.3%
12
0
0
0%
–
0
0
0%
–
2
Beaverton
303
15,894
7.3%
4
0
0
0%
–
1
270
1.7%
15
3
Central Northeast
183
4,287
2.0%
16
0
0
0%
–
2
22
0.5%
20
4
Clackamas County
67
2,302
1.1%
20
2
91
4.0%
12
3
343
14.9%
11
5
Clark County
32
1,670
0.8%
23
1
144
8.6%
10
2
247
14.8%
18
6
Columbia County
28
820
0.4%
24
0
0
0%
–
2
319
38.9%
13
7
Damascus
219
12,756
5.8%
8
0
0
0%
–
7
1,188
9.3%
2
8
Downtown Portland
110
12,757
5.8%
7
1
172
1.3%
9
4
849
6.7%
3
9
East Portland
412
10,253
4.7%
9
1
31
0.3%
15
2
250
2.4%
17
10
Hillsboro
118
20,007
9.1%
3
2
359
1.8%
3
3
592
3.0%
7
11
Lake Oswego
66
4,088
1.9%
17
0
0
0%
–
0
0
0%
–
12
North Portland
208
4,602
2.1%
15
14
228
5.0%
5
5
365
7.9%
10
13
Northeast Portland
335
7,609
3.5%
11
5
91
1.2%
12
2
319
4.2%
13
14
Northwest Portland
380
12,810
5.9%
6
2
286
2.2%
4
3
648
5.1%
6
15
Oregon City
44
2,076
0.9%
21
0
0
0%
–
0
0
0%
–
16
Outlying Washington Cou…
69
1,791
0.8%
22
1
196
10.9%
8
1
500
27.9%
9
17
Sherwood/Tualatin
43
3,888
1.8%
18
0
0
0%
–
1
264
6.8%
16
18
Skamania County
4
38
0%
25
0
0
0%
–
0
0
0%
–
19
Southeast Portland
1,037
21,933
10.0%
2
15
516
2.4%
2
6
815
3.7%
4
20
Southwest Portland
215
6,971
3.2%
13
2
92
1.3%
11
3
692
9.9%
5
21
Tigard
122
7,707
3.5%
10
1
219
2.8%
6
3
550
7.1%
8
22
Troutdale/Gresham
322
15,675
7.2%
5
3
214
1.4%
7
4
335
2.1%
12
23
Vancouver
583
33,803
15.5%
1
12
1,010
3.0%
1
18
2,473
7.3%
1
24
Wilsonville
57
4,809
2.2%
14
0
0
0%
–
0
0
0%
–
25
Yamhill County
92
2,958
1.4%
19
1
49
1.7%
14
1
75
2.5%
19
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 26
Submarkets
Portland Multi-Family
SUBMARKET RENT
Asking Rents
Effective Rents
No.
Market
Per Unit
Per SF
Rank
Yr. Growth
Per Unit
Per SF
Rank
Yr. Growth
Concession
Rank
1
Aloha
$1,699
$1.87
11
4.4%
$1,691
$1.86
11
4.7%
0.5%
19
2
Beaverton
$1,560
$1.82
13
5.8%
$1,552
$1.81
13
5.8%
0.5%
18
3
Central Northeast
$1,352
$1.81
14
2.5%
$1,344
$1.80
14
2.7%
0.6%
14
4
Clackamas County
$1,589
$1.73
18
6.1%
$1,583
$1.72
18
5.9%
0.4%
23
5
Clark County
$1,522
$1.77
16
6.6%
$1,502
$1.75
17
5.5%
1.3%
2
6
Columbia County
$1,368
$1.73
19
6.7%
$1,362
$1.72
19
6.4%
0.4%
21
7
Damascus
$1,580
$1.81
15
5.3%
$1,572
$1.80
15
5.2%
0.5%
16
8
Downtown Portland
$1,904
$2.58
1
2.8%
$1,889
$2.56
1
5.5%
0.8%
9
9
East Portland
$1,223
$1.48
23
3.8%
$1,217
$1.47
23
3.8%
0.5%
20
10
Hillsboro
$1,821
$1.98
8
3.7%
$1,808
$1.97
8
3.7%
0.7%
12
11
Lake Oswego
$1,919
$2.06
6
7.4%
$1,908
$2.05
5
7.1%
0.6%
13
12
North Portland
$1,461
$2
7
2.7%
$1,449
$1.98
7
2.5%
0.8%
8
13
Northeast Portland
$1,589
$2.38
3
2.6%
$1,575
$2.36
3
4.1%
0.9%
7
14
Northwest Portland
$1,617
$2.50
2
2.5%
$1,599
$2.47
2
3.9%
1.1%
4
15
Oregon City
$1,555
$1.65
22
5.9%
$1,540
$1.64
22
5.6%
1.0%
5
16
Outlying Washington Cou…
$1,323
$1.66
21
4.9%
$1,319
$1.66
20
4.8%
0.3%
24
17
Sherwood/Tualatin
$1,739
$1.89
9
5.5%
$1,731
$1.88
9
5.5%
0.5%
17
18
Skamania County
$1,203
–
–
–
$1,200
–
–
–
0.3%
25
19
Southeast Portland
$1,429
$2.18
4
1.2%
$1,418
$2.17
4
1.2%
0.7%
10
20
Southwest Portland
$1,611
$2.07
5
3.4%
$1,592
$2.04
6
6.5%
1.2%
3
21
Tigard
$1,569
$1.83
12
3.6%
$1,554
$1.81
12
2.9%
1.0%
6
22
Troutdale/Gresham
$1,489
$1.67
20
4.7%
$1,462
$1.64
21
3.5%
1.8%
1
23
Vancouver
$1,632
$1.76
17
5.0%
$1,620
$1.75
16
5.0%
0.7%
11
24
Wilsonville
$1,758
$1.87
10
3.3%
$1,748
$1.86
10
4.2%
0.6%
15
25
Yamhill County
$1,232
$1.43
24
4.1%
$1,227
$1.43
24
4.0%
0.4%
22
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 27
Submarkets
Portland Multi-Family
SUBMARKET VACANCY & ABSORPTION
Vacancy
12 Month Absorption
No.
Submarket
Units
Percent
Rank
Units
% of Inv
Rank
Construc. Ratio
1
Aloha
333
4.6%
10
120
1.7%
10
–
2
Beaverton
686
4.3%
7
(106)
-0.7%
25
–
3
Central Northeast
243
5.7%
19
(11)
-0.3%
23
–
4
Clackamas County
109
4.7%
11
38
1.7%
14
2.4
5
Clark County
181
10.9%
25
28
1.7%
17
5.1
6
Columbia County
21
2.6%
3
(8)
-1.0%
22
–
7
Damascus
576
4.5%
9
61
0.5%
13
–
8
Downtown Portland
1,102
8.6%
24
228
1.8%
6
–
9
East Portland
386
3.8%
5
0
0%
20
–
10
Hillsboro
996
5.0%
15
95
0.5%
12
–
11
Lake Oswego
204
5.0%
14
38
0.9%
15
–
12
North Portland
315
6.8%
22
326
7.1%
4
0.4
13
Northeast Portland
543
7.1%
23
209
2.7%
7
0.4
14
Northwest Portland
841
6.6%
21
582
4.5%
1
0
15
Oregon City
111
5.4%
16
(5)
-0.2%
21
–
16
Outlying Washington Cou…
70
3.9%
6
148
8.2%
8
1.3
17
Sherwood/Tualatin
130
3.3%
4
8
0.2%
18
–
18
Skamania County
1
2.4%
2
0
0%
–
–
19
Southeast Portland
1,272
5.8%
20
374
1.7%
3
1.2
20
Southwest Portland
341
4.9%
12
248
3.6%
5
0.1
21
Tigard
336
4.4%
8
115
1.5%
11
1.9
22
Troutdale/Gresham
860
5.5%
17
138
0.9%
9
1.1
23
Vancouver
1,890
5.6%
18
469
1.4%
2
1.8
24
Wilsonville
237
4.9%
13
(18)
-0.4%
24
–
25
Yamhill County
47
1.6%
1
36
1.2%
16
1.4
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 28
Appendix
Portland Multi-Family
OVERALL SUPPLY & DEMAND
Inventory
Absorption
Year
Units
Growth
% Growth
Units
% of Inv
Construction Ratio
2027
243,681
5,376
2.3%
4,634
1.9%
1.2
2026
238,305
5,073
2.2%
4,808
2.0%
1.1
2025
233,232
3,819
1.7%
4,715
2.0%
0.8
2024
229,413
5,573
2.5%
3,506
1.5%
1.6
2023
223,840
5,566
2.6%
3,687
1.6%
1.5
YTD
218,745
471
0.2%
31
0%
15.2
2022
218,274
3,420
1.6%
3,324
1.5%
1.0
2021
214,854
6,956
3.3%
9,818
4.6%
0.7
2020
207,898
7,491
3.7%
6,368
3.1%
1.2
2019
200,407
7,017
3.6%
5,601
2.8%
1.3
2018
193,390
6,718
3.6%
7,003
3.6%
1.0
2017
186,672
5,568
3.1%
4,876
2.6%
1.1
2016
181,104
5,101
2.9%
2,729
1.5%
1.9
2015
176,003
4,286
2.5%
3,802
2.2%
1.1
2014
171,717
4,676
2.8%
4,753
2.8%
1.0
2013
167,041
2,654
1.6%
3,024
1.8%
0.9
2012
164,387
2,294
1.4%
1,922
1.2%
1.2
2011
162,093
417
0.3%
163
0.1%
2.6
4 & 5 STAR SUPPLY & DEMAND
Inventory
Absorption
Year
Units
Growth
% Growth
Units
% of Inv
Construction Ratio
2027
96,947
5,233
5.7%
4,709
4.9%
1.1
2026
91,714
4,941
5.7%
4,415
4.8%
1.1
2025
86,773
3,750
4.5%
3,773
4.3%
1.0
2024
83,023
3,362
4.2%
2,515
3.0%
1.3
2023
79,661
4,046
5.4%
2,573
3.2%
1.6
YTD
75,673
58
0.1%
28
0%
2.1
2022
75,615
1,749
2.4%
3,017
4.0%
0.6
2021
73,866
5,799
8.5%
7,486
10.1%
0.8
2020
68,067
6,265
10.1%
4,583
6.7%
1.4
2019
61,802
5,682
10.1%
4,571
7.4%
1.2
2018
56,120
5,394
10.6%
5,148
9.2%
1.0
2017
50,726
4,935
10.8%
4,695
9.3%
1.1
2016
45,791
4,533
11.0%
3,084
6.7%
1.5
2015
41,258
3,769
10.1%
3,340
8.1%
1.1
2014
37,489
4,117
12.3%
4,045
10.8%
1.0
2013
33,372
2,202
7.1%
2,019
6.0%
1.1
2012
31,170
1,599
5.4%
1,086
3.5%
1.5
2011
29,571
31
0.1%
(54)
-0.2%
–
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 29
Appendix
Portland Multi-Family
3 STAR SUPPLY & DEMAND
Inventory
Absorption
Year
Units
Growth
% Growth
Units
% of Inv
Construction Ratio
2027
82,813
166
0.2%
45
0.1%
3.7
2026
82,647
157
0.2%
377
0.5%
0.4
2025
82,490
101
0.1%
1,020
1.2%
0.1
2024
82,389
2,126
2.6%
1,133
1.4%
1.9
2023
80,263
1,520
1.9%
1,193
1.5%
1.3
YTD
79,156
413
0.5%
11
0%
37.5
2022
78,743
1,625
2.1%
636
0.8%
2.6
2021
77,118
1,158
1.5%
1,936
2.5%
0.6
2020
75,960
1,062
1.4%
1,471
1.9%
0.7
2019
74,898
1,280
1.7%
861
1.1%
1.5
2018
73,618
1,274
1.8%
1,567
2.1%
0.8
2017
72,344
643
0.9%
337
0.5%
1.9
2016
71,701
516
0.7%
12
0%
43.0
2015
71,185
483
0.7%
377
0.5%
1.3
2014
70,702
609
0.9%
590
0.8%
1.0
2013
70,093
408
0.6%
701
1.0%
0.6
2012
69,685
661
1.0%
807
1.2%
0.8
2011
69,024
396
0.6%
270
0.4%
1.5
1 & 2 STAR SUPPLY & DEMAND
Inventory
Absorption
Year
Units
Growth
% Growth
Units
% of Inv
Construction Ratio
2027
63,921
(23)
0%
(120)
-0.2%
0.2
2026
63,944
(25)
0%
16
0%
–
2025
63,969
(32)
0%
(78)
-0.1%
0.4
2024
64,001
85
0.1%
(142)
-0.2%
–
2023
63,916
0
0%
(79)
-0.1%
0
YTD
63,916
0
0%
(8)
0%
0
2022
63,916
46
0.1%
(329)
-0.5%
–
2021
63,870
(1)
0%
396
0.6%
0
2020
63,871
164
0.3%
314
0.5%
0.5
2019
63,707
55
0.1%
169
0.3%
0.3
2018
63,652
50
0.1%
288
0.5%
0.2
2017
63,602
(10)
0%
(156)
-0.2%
0.1
2016
63,612
52
0.1%
(367)
-0.6%
–
2015
63,560
34
0.1%
85
0.1%
0.4
2014
63,526
(50)
-0.1%
118
0.2%
–
2013
63,576
44
0.1%
304
0.5%
0.1
2012
63,532
34
0.1%
29
0%
1.2
2011
63,498
(10)
0%
(53)
-0.1%
0.2
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 30
Appendix
Portland Multi-Family
OVERALL VACANCY & RENT
Vacancy
Market Rent
Effective Rents
Year
Units
Percent
Ppts Chg
Per Unit
Per SF
% Growth
Ppts Chg
Units
Per SF
2027
15,451
6.3%
0.2
$1,823
$2.19
2.1%
(0.5)
$1,807
$2.17
2026
14,708
6.2%
0
$1,785
$2.14
2.6%
0.1
$1,770
$2.13
2025
14,441
6.2%
(0.5)
$1,740
$2.09
2.5%
0.1
$1,725
$2.07
2024
15,315
6.7%
0.7
$1,697
$2.04
2.4%
(1.1)
$1,682
$2.02
2023
13,269
5.9%
0.7
$1,657
$1.99
3.5%
(0.6)
$1,643
$1.97
YTD
11,830
5.4%
0.2
$1,605
$1.92
4.0%
(0.1)
$1,593
$1.90
2022
11,390
5.2%
0
$1,601
$1.91
4.1%
(5.1)
$1,589
$1.90
2021
11,263
5.2%
(1.5)
$1,537
$1.84
9.2%
8.2
$1,522
$1.82
2020
14,109
6.8%
0.3
$1,408
$1.68
1.0%
(1.4)
$1,386
$1.65
2019
12,940
6.5%
0.5
$1,394
$1.66
2.4%
0
$1,375
$1.64
2018
11,510
6.0%
(0.4)
$1,361
$1.62
2.4%
0.5
$1,333
$1.59
2017
11,767
6.3%
0.2
$1,329
$1.59
1.9%
(1.5)
$1,297
$1.55
2016
11,059
6.1%
1.2
$1,303
$1.56
3.5%
(4.8)
$1,276
$1.52
2015
8,678
4.9%
0.2
$1,259
$1.50
8.3%
4.1
$1,244
$1.48
2014
8,183
4.8%
(0.2)
$1,163
$1.39
4.2%
0.5
$1,150
$1.37
2013
8,251
4.9%
(0.3)
$1,116
$1.33
3.7%
0.9
$1,107
$1.32
2012
8,618
5.2%
0.2
$1,076
$1.28
2.9%
1.1
$1,067
$1.27
2011
8,238
5.1%
0.1
$1,046
$1.25
1.7%
–
$1,039
$1.24
4 & 5 STAR VACANCY & RENT
Vacancy
Market Rent
Effective Rents
Year
Units
Percent
Ppts Chg
Per Unit
Per SF
% Growth
Ppts Chg
Units
Per SF
2027
8,263
8.5%
0.1
$2,089
$2.51
1.9%
(0.5)
$2,067
$2.48
2026
7,737
8.4%
0.1
$2,050
$2.46
2.4%
0
$2,028
$2.44
2025
7,208
8.3%
(0.4)
$2,003
$2.40
2.4%
0.1
$1,981
$2.38
2024
7,210
8.7%
0.7
$1,957
$2.35
2.3%
(1.4)
$1,936
$2.32
2023
6,386
8.0%
1.5
$1,913
$2.30
3.7%
(0.4)
$1,892
$2.27
YTD
4,943
6.5%
0
$1,853
$2.21
4.1%
0.1
$1,836
$2.19
2022
4,913
6.5%
(1.8)
$1,845
$2.20
4.0%
(6.5)
$1,828
$2.18
2021
6,148
8.3%
(3.2)
$1,774
$2.12
10.5%
11.0
$1,746
$2.09
2020
7,826
11.5%
1.6
$1,606
$1.92
-0.5%
(2.0)
$1,564
$1.87
2019
6,108
9.9%
1.0
$1,614
$1.93
1.5%
(0.3)
$1,580
$1.89
2018
4,992
8.9%
(0.4)
$1,590
$1.90
1.8%
0.8
$1,547
$1.85
2017
4,736
9.3%
(0.5)
$1,562
$1.86
1.0%
(0.5)
$1,512
$1.81
2016
4,486
9.8%
2.5
$1,546
$1.85
1.5%
(5.0)
$1,496
$1.79
2015
3,024
7.3%
0.4
$1,524
$1.82
6.5%
3.4
$1,500
$1.79
2014
2,588
6.9%
(0.6)
$1,431
$1.71
3.1%
(0.2)
$1,410
$1.68
2013
2,510
7.5%
0.1
$1,388
$1.66
3.3%
0.7
$1,373
$1.64
2012
2,327
7.5%
1.3
$1,343
$1.60
2.6%
1.2
$1,331
$1.59
2011
1,811
6.1%
0.3
$1,308
$1.56
1.5%
–
$1,300
$1.55
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 31
Appendix
Portland Multi-Family
3 STAR VACANCY & RENT
Vacancy
Market Rent
Effective Rents
Year
Units
Percent
Ppts Chg
Per Unit
Per SF
% Growth
Ppts Chg
Units
Per SF
2027
4,280
5.2%
0.1
$1,817
$2.12
2.3%
(0.5)
$1,802
$2.10
2026
4,159
5.0%
(0.3)
$1,776
$2.07
2.8%
0.1
$1,762
$2.05
2025
4,380
5.3%
(1.1)
$1,729
$2.01
2.6%
0.2
$1,715
$2
2024
5,299
6.4%
1.1
$1,684
$1.96
2.4%
(0.9)
$1,671
$1.95
2023
4,305
5.4%
0.3
$1,644
$1.92
3.4%
(1.3)
$1,631
$1.90
YTD
4,380
5.5%
0.5
$1,594
$1.84
4.5%
(0.2)
$1,582
$1.83
2022
3,978
5.1%
1.2
$1,590
$1.84
4.7%
(5.5)
$1,580
$1.83
2021
2,989
3.9%
(1.1)
$1,519
$1.76
10.2%
8.0
$1,510
$1.75
2020
3,761
5.0%
(0.6)
$1,378
$1.59
2.2%
(1.2)
$1,366
$1.58
2019
4,161
5.6%
0.5
$1,348
$1.56
3.4%
0.4
$1,336
$1.54
2018
3,734
5.1%
(0.5)
$1,303
$1.51
3.0%
0.6
$1,277
$1.48
2017
4,008
5.5%
0.4
$1,265
$1.46
2.4%
(2.6)
$1,239
$1.43
2016
3,696
5.2%
0.7
$1,235
$1.43
5.0%
(5.6)
$1,219
$1.41
2015
3,192
4.5%
0.1
$1,176
$1.36
10.6%
5.3
$1,164
$1.34
2014
3,081
4.4%
0
$1,063
$1.23
5.3%
1.0
$1,054
$1.22
2013
3,061
4.4%
(0.4)
$1,009
$1.16
4.3%
1.0
$1,003
$1.16
2012
3,351
4.8%
(0.3)
$968
$1.12
3.3%
0.9
$960
$1.11
2011
3,493
5.1%
0.2
$937
$1.08
2.3%
–
$931
$1.07
1 & 2 STAR VACANCY & RENT
Vacancy
Market Rent
Effective Rents
Year
Units
Percent
Ppts Chg
Per Unit
Per SF
% Growth
Ppts Chg
Units
Per SF
2027
2,909
4.6%
0.2
$1,394
$1.76
2.4%
(0.5)
$1,387
$1.75
2026
2,812
4.4%
(0.1)
$1,362
$1.72
2.8%
0.1
$1,355
$1.71
2025
2,853
4.5%
0.1
$1,324
$1.67
2.8%
0.2
$1,318
$1.66
2024
2,807
4.4%
0.4
$1,289
$1.63
2.6%
(0.9)
$1,283
$1.62
2023
2,578
4.0%
0.1
$1,256
$1.59
3.5%
0.3
$1,250
$1.58
YTD
2,507
3.9%
0
$1,215
$1.53
3.0%
(0.2)
$1,209
$1.52
2022
2,500
3.9%
0.6
$1,214
$1.53
3.2%
(1.0)
$1,209
$1.52
2021
2,126
3.3%
(0.6)
$1,177
$1.48
4.2%
1.8
$1,172
$1.47
2020
2,522
3.9%
(0.2)
$1,130
$1.42
2.3%
(0.2)
$1,124
$1.41
2019
2,670
4.2%
(0.2)
$1,104
$1.39
2.5%
(0.4)
$1,098
$1.38
2018
2,784
4.4%
(0.4)
$1,077
$1.35
2.9%
(0.5)
$1,068
$1.34
2017
3,022
4.8%
0.2
$1,046
$1.32
3.4%
(2.4)
$1,037
$1.30
2016
2,877
4.5%
0.6
$1,012
$1.27
5.8%
(2.6)
$1,004
$1.26
2015
2,462
3.9%
(0.1)
$956
$1.20
8.4%
3.4
$949
$1.19
2014
2,513
4.0%
(0.3)
$882
$1.11
5.1%
1.3
$877
$1.10
2013
2,680
4.2%
(0.4)
$839
$1.05
3.7%
1.0
$835
$1.05
2012
2,940
4.6%
0
$809
$1.01
2.8%
1.4
$804
$1.01
2011
2,934
4.6%
0.1
$787
$0.99
1.4%
–
$783
$0.98
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 32
Appendix
Portland Multi-Family
OVERALL SALES
Completed Transactions (1)
Market Pricing Trends (2)
Year
Deals
Volume
Turnover
Avg Price
Avg Price/Unit
Avg Cap Rate
Price/Unit
Price Index
Cap Rate
2027
–
–
–
–
–
–
$326,492
342
4.4%
2026
–
–
–
–
–
–
$320,636
336
4.4%
2025
–
–
–
–
–
–
$312,902
328
4.4%
2024
–
–
–
–
–
–
$304,836
319
4.4%
2023
–
–
–
–
–
–
$295,826
310
4.5%
YTD
–
–
–
–
–
–
$291,652
305
4.4%
2022
285
$2.7B
5.2%
$12,670,873
$272,273
5.0%
$290,498
304
4.4%
2021
397
$4.3B
8.2%
$13,897,585
$262,555
5.1%
$274,707
288
4.4%
2020
235
$1.8B
4.1%
$9,946,046
$230,499
5.5%
$246,167
258
4.6%
2019
306
$2.2B
5.8%
$9,485,550
$221,828
5.5%
$233,096
244
4.8%
2018
353
$2.2B
6.4%
$9,221,014
$211,547
5.4%
$215,150
225
4.9%
2017
301
$1.6B
5.3%
$8,340,533
$201,854
5.5%
$199,901
209
5.1%
2016
309
$3B
9.0%
$11,570,117
$188,305
5.5%
$188,832
198
5.2%
2015
318
$2.2B
8.6%
$7,981,992
$151,022
5.8%
$176,302
185
5.3%
2014
233
$1.5B
6.3%
$7,438,555
$144,410
6.3%
$158,178
166
5.6%
2013
196
$928.1M
5.4%
$5,185,035
$106,619
6.5%
$143,688
150
5.9%
2012
190
$868.4M
5.1%
$5,231,559
$107,733
6.6%
$137,393
144
5.9%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
4 & 5 STAR SALES
Completed Transactions (1)
Market Pricing Trends (2)
Year
Deals
Volume
Turnover
Avg Price
Avg Price/Unit
Avg Cap Rate
Price/Unit
Price Index
Cap Rate
2027
–
–
–
–
–
–
$425,172
312
4.2%
2026
–
–
–
–
–
–
$418,149
307
4.2%
2025
–
–
–
–
–
–
$408,439
300
4.2%
2024
–
–
–
–
–
–
$398,514
292
4.2%
2023
–
–
–
–
–
–
$387,463
284
4.2%
YTD
–
–
–
–
–
–
$383,810
282
4.1%
2022
26
$703.2M
3.1%
$29,300,229
$341,860
4.7%
$382,517
281
4.1%
2021
61
$2.3B
10.0%
$44,417,118
$322,046
4.5%
$363,867
267
4.2%
2020
32
$871.9M
4.4%
$29,064,257
$324,861
5.1%
$331,347
243
4.3%
2019
38
$1.3B
8.4%
$37,618,579
$297,104
4.7%
$316,938
233
4.4%
2018
33
$949M
6.4%
$33,894,122
$311,363
4.8%
$293,335
215
4.6%
2017
28
$655.5M
6.5%
$29,793,591
$265,691
4.9%
$275,764
202
4.7%
2016
37
$1.8B
15.7%
$49,306,783
$247,255
4.6%
$261,618
192
4.8%
2015
29
$971.6M
12.7%
$33,502,868
$185,913
5.3%
$247,706
182
4.9%
2014
24
$641.5M
7.8%
$26,728,317
$220,062
5.5%
$224,482
165
5.1%
2013
15
$418.9M
7.7%
$27,927,827
$162,813
5.7%
$205,606
151
5.4%
2012
15
$296.4M
7.4%
$19,759,848
$128,533
5.8%
$196,116
144
5.4%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 33
Appendix
Portland Multi-Family
3 STAR SALES
Completed Transactions (1)
Market Pricing Trends (2)
Year
Deals
Volume
Turnover
Avg Price
Avg Price/Unit
Avg Cap Rate
Price/Unit
Price Index
Cap Rate
2027
–
–
–
–
–
–
$305,198
382
4.4%
2026
–
–
–
–
–
–
$299,313
374
4.4%
2025
–
–
–
–
–
–
$291,705
365
4.4%
2024
–
–
–
–
–
–
$283,863
355
4.4%
2023
–
–
–
–
–
–
$275,282
344
4.4%
YTD
–
–
–
–
–
–
$271,561
340
4.3%
2022
78
$1.4B
6.7%
$21,094,242
$285,114
4.9%
$270,271
338
4.3%
2021
106
$1.5B
8.2%
$16,417,727
$246,843
4.9%
$253,751
317
4.4%
2020
64
$591.1M
3.9%
$10,369,492
$202,835
5.3%
$222,571
278
4.5%
2019
64
$497.9M
3.7%
$9,762,354
$192,009
5.7%
$208,198
260
4.7%
2018
90
$925.5M
6.6%
$12,019,857
$199,081
5.3%
$191,802
240
4.9%
2017
75
$717.6M
5.4%
$11,764,256
$195,218
5.3%
$175,628
220
5.1%
2016
84
$936.9M
8.5%
$12,010,906
$156,350
5.5%
$165,606
207
5.2%
2015
86
$891.2M
8.6%
$12,730,914
$148,478
5.4%
$151,558
190
5.4%
2014
66
$729.9M
8.0%
$11,405,447
$129,584
6.0%
$134,762
169
5.7%
2013
53
$357.2M
5.6%
$7,441,669
$94,547
6.3%
$121,072
151
6.0%
2012
47
$430.1M
5.6%
$10,001,459
$114,929
6.4%
$115,763
145
6.0%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
1 & 2 STAR SALES
Completed Transactions (1)
Market Pricing Trends (2)
Year
Deals
Volume
Turnover
Avg Price
Avg Price/Unit
Avg Cap Rate
Price/Unit
Price Index
2027
–
–
–
–
–
–
$225,214
362
Cap Rate
4.9%
2026
–
–
–
–
–
–
$220,916
355
4.9%
2025
–
–
–
–
–
–
$215,595
346
4.9%
2024
–
–
–
–
–
–
$209,663
337
4.9%
2023
–
–
–
–
–
–
$202,764
326
4.9%
YTD
–
–
–
–
–
–
$197,385
317
4.8%
2022
181
$574M
5.8%
$4,704,531
$199,914
5.0%
$196,541
316
4.8%
2021
230
$518.6M
6.1%
$3,124,397
$161,926
5.3%
$185,413
298
4.9%
2020
139
$327.3M
3.9%
$3,519,349
$150,899
5.7%
$165,449
266
5.0%
2019
204
$404.8M
5.8%
$2,791,480
$137,816
5.6%
$155,796
250
5.2%
2018
230
$366.1M
6.0%
$2,653,202
$126,474
5.6%
$143,232
230
5.4%
2017
198
$245M
4.3%
$2,207,070
$130,798
5.8%
$132,196
212
5.6%
2016
188
$261.6M
4.8%
$1,829,546
$99,857
5.7%
$123,796
199
5.7%
2015
203
$364.2M
5.9%
$2,023,492
$103,533
6.0%
$115,013
185
5.9%
2014
143
$146M
3.6%
$1,258,939
$74,509
6.8%
$101,833
164
6.2%
2013
128
$152M
3.9%
$1,310,377
$64,573
6.8%
$92,032
148
6.5%
2012
128
$142M
3.4%
$1,314,614
$70,531
6.9%
$88,636
142
6.5%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 34
Appendix
Portland Multi-Family
DELIVERIES & UNDER CONSTRUCTION
Inventory
Deliveries
Net Deliveries
Under Construction
Year
Bldgs
Units
Vacancy
Bldgs
Units
Bldgs
Units
Bldgs
Units
2027
–
243,683
6.3%
–
5,394
–
5,376
–
–
2026
–
238,307
6.2%
–
5,143
–
5,072
–
–
2025
–
233,235
6.2%
–
3,935
–
3,819
–
–
2024
–
229,416
6.7%
–
5,471
–
5,576
–
–
2023
–
223,840
5.9%
–
5,566
–
5,566
–
–
YTD
5,203
218,745
5.4%
2
471
2
471
73
11,116
2022
5,201
218,274
5.2%
63
3,482
62
3,420
74
11,455
2021
5,139
214,854
5.2%
76
6,969
74
6,956
88
8,021
2020
5,065
207,898
6.8%
82
7,491
82
7,491
106
9,446
2019
4,983
200,407
6.5%
109
7,026
108
7,017
128
12,368
2018
4,875
193,390
6.0%
94
6,746
93
6,717
150
12,451
2017
4,782
186,672
6.3%
67
5,601
64
5,566
136
12,430
2016
4,718
181,104
6.1%
63
5,112
62
5,101
106
9,601
2015
4,656
176,003
4.9%
59
4,286
59
4,286
87
8,778
2014
4,597
171,717
4.8%
57
4,760
54
4,676
75
7,039
2013
4,543
167,041
4.9%
35
2,654
35
2,654
69
6,811
2012
4,508
164,387
5.2%
25
2,300
24
2,294
49
4,438
2011
4,484
162,093
5.1%
6
445
3
417
34
3,290
© 2023 CoStar Group – Licensed to PSU – School of Business – 565077
1/17/2023
Page 35
Grading Guidelines for Individual Projects
For each of the below you will get a score between 1 and 3 with 1 being “poor” and 3 being “excellent”.
Weight
Are the calculations correct and in line with requirements? Do the assumptions
make sense based on the market research, if applicable? How well is the
argumentation/discussion structured? Does it make sense and reflect concepts
Analysis and
discussed in class? Are quantitative results and data visualization appropriately
Argumentation
used to support the discussion?
45%
Are recommendations given in line with the assignment? Do recommendations
make sense based on the previous analysis and argumentation? How relevant are
Recommendations
the recommendations? Do recommendations reflect critical thinking?
35%
How is the writing style? Does the student communicate in an efficient and effective
manner? Are there many grammatical and spelling errors? Is the correct
Writing
terminology used? Are sources consistently cited?
10%
Is the write up presented in a reader-friendly way, for example, with regards to
Presentation
headings and layout? Are tables and other exhibits referred to in the text?
10%

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