UD+P News: February 2021

2020 TAX REPORTING INFORMATION

Our accounting team is progressing with the preparation of 2020 tax reporting documents as the April 15th filing deadline approaches. The estimated delivery date for Schedule K-1 tax documents for all UD+P funds is mid-March. Our tax accountant, Geffen Mesher, is closely monitoring state and federal tax laws. If any delays are anticipated due to new filing requirements or pandemic-related slowdowns, we will provide advance notice to members.

If you have relocated in the past year, please update your mailing address in the investor portal or contact us directly with current information.

As a reminder, the Oregon Department of Revenue (ODR) requires pass-through entities to obtain a nonresident affidavit from nonresident owners if total Oregon-source distributive income is projected to exceed $1,000 during the tax year. In 2020, ODR announced it will now accept electronic signatures. We will be contacting out-of-state investors to obtain required nonresident affidavits electronically via DocuSign.

Lastly, we are required to obtain a disregarded entity disclosure from members that are invested through an entity (i.e., trust, LLC, corporation and other business entities). Last year, we obtained the disclosure from members who invested with UD+P in 2019 and years prior. We will be requesting the disclosure from “first-time” investors who subscribed to Urban Opportunity Fund I and Tabor IV in 2020.

If you have questions about 2020 taxes, please contact Investor Communications Manager, Tina McNerthney, by email or by phone at (503) 318-6588.

RENT COLLECTIONS UPDATE

The table below summarizes rent charged versus rent collected by tenant type from Q1 2020 through February 2021 (as of 2/24/21). Quarterly rent collection data is provided for prior quarters, and monthly rent collection data is provided for the current quarter (Q1 2021). Due to a system glitch that impacted our residential rent payment application, we are unable to report on residential rent collections this month and will publish this data in our March newsletter.

In February, the percent of retail rent collected increased to 85%, compared to 80% in January. The percent of retail tenants paying rent (83%) also improved. After falling to 23% in January, the percent of office rent collected recovered to 57% in February, with 67% of tenants paying. The January dip was due to a technical problem that Overland Warehouse tenant, ReachNow, experienced with processing of its automatic monthly rent payment. The issue has since been resolved and ReachNow is current on its rent.

Following a steady decline in new Covid-19 cases and test positivity rates, in early February, Multnomah County was reclassified from an “extreme risk” county to a “high risk” county under Oregon’s COVID-19 Risk and Protection Framework. Current guidelines allow restaurants and bars—previously limited to carry out and outdoor dining— to offer limited indoor dining, not to exceed 25% maximum capacity or 50 people, whichever is smaller. Retail stores can now operate at 50% maximum capacity, up from 25% under the previous Extreme Risk level. We anticipate the easing of restrictions will have a positive financial impact on our retail tenants.

RESIDENTIAL LEASING UPDATE

The table below shows average monthly residential occupancy and lease rates for individual properties, as well as portfolio-wide averages across all stabilized properties. In February, the portfolio-wide average occupancy rate jumped to 88%—up three percent from January (85%). The portfolio-wide average lease rate rose to 91%, up from 90% in January.

As leasing activity picks up and average lease rates rise across our stabilized portfolio, we have increased asking rents on most units and adjusted concessions. We are currently offering two weeks free rent on 1-bedroom units at Fairmount and four weeks free rent on 2-bedroom units at Slate. At Àlmr, we are offering six weeks free rent on two vacant units that have taken longer to lease. The George is fully leased. Across our portfolio, we continue to offer a “zero deposit” at move-in policy for all new leases.

We are pleased to report continued progress with the lease-up of sister properties Lyra and Cassi in Northeast Portland. As of February 26, Lyra is 56% leased and Cassi is 31% leased. We are offering four weeks free rent for new 12-month leases and six weeks free rent for new 16-month leases at both properties. In March, our operations team will be completing maintenance and repairs on 10 units that are currently off-market at Cassi. We are actively advertising and pre-leasing these units, which will be move-in ready by early April.

Hotel GRAND STARK PROGRESS UPDATE

Hotel Grand Stark, our historic renovation project in Portland’s Central Eastside, is nearing completion. Earlier this month, our hotel operating partner, Pali Group, launched the Hotel Grand Stark website. In anticipation of a spring opening, Pali is now booking reservations for June 1st and beyond. This week, we installed the new marquee on the northeast corner of the building at the intersection of SE Grand and Stark. The hotel is on track to receive its certificate of occupancy in March and is projected to open in the spring.