UD+P News: February 2022
2021 TAX REPORTING UPDATE
Our accounting team is progressing with the preparation of 2021 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 March 30. If any delays are anticipated, we will provide advance notice.
If you have relocated in the past year, please login to your investor portal and update your address in the “settings” tab 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. We will be contacting out-of-state investors to obtain required nonresident affidavits via electronic signature.
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). We have obtained the disclosures from members who invested with UD+P in 2020 and years prior. We will be requesting the disclosure from “first-time” investors who subscribed to Urban Opportunity Fund II, Tabor IV and Tabor IV Q Street Acceleration fund in 2021.
If you have questions about 2021 taxes, please contact Investor Communications Manager, Tina McNerthney, by email or by phone at (503) 318-6588.
Hospitality INDUSTRY PANEL
On February 2nd, UD+P hosted a virtual panel on the hospitality industry and our North Anchor Hotel project in Lake Oswego, Oregon. We were excited to have members of our North Anchor Hotel project team—Mosaic Hotel Group CEO Tim Harmon and Curioso Founder Daniel Pierce—join the panel.
Our experts covered topics ranging from service and operations to design and traveler preferences - focusing on what makes a project successful. They also discussed the challenges the hospitality industry has faced during Covid era and adaptations that have enabled certain segments and projects to thrive. Throughout the conversation, the panelists highlighted how the North Anchor Hotel is uniquely positioned to become a destination for visitors from Oregon and beyond.
If you were unable to join us for the live event, you can view the recording of the panel embedded in this post or click here.
PROJECT UPDATES
LUELLA - SACRAMENTO, CA
MIDTOWN
After obtaining building permits in January, we kicked off construction at Luella (1208 Q Street) in early February. We are in the final stages of deciding on a logo and color palette for the project and recently began the process of selecting a local artist to design and install a mural on the building’s south side wall. The mural will be highly visible to anyone using the adjacent light rail station and to residents accessing the building through its main point of entry.
1201 J STREET - SACRAMENTO, CA
DOWNTOWN
We are pleased to share several exciting developments at 1201 J Street. Cora Coffee opened for business on February 9th and was recently featured in trade publication Daily Coffee News. Read the feature and view photos of Cora Coffee here.
Loyal Legion is progressing with the buildout of its beer hall / restaurant space and staffing up, with plans to open this spring. Centrl Office completed buildout of its flex office space in February and will open on March 1.
Check out photographer Ryan Flood’s images of Central’s stunning new space here.
CENTRL Office’s new flex office space in the heart of downtown Sacramento offers exceptional views.
Private office spaces at Centrl Office, Sacramento offer large windows, abundant natural light and design features, such as the wood details and exposed pipes shown in this photo, that complement the building’s historic character.
Cora Coffee bar celebrated its grand opening at 1201 J Street in February.
550 SE MLK - PORTLAND, OR
CENTRAL EASTSIDE
We are vetting potential lenders and anticipate securing financing for 550 SE MLK by early spring. We expect to obtain building permits from the city in April and kick off construction in spring 2022. 550 SE MLK’s projected delivery date is Fall 2023.
CASSI - PORTLAND, OR
CONCORDIA
We are thrilled to announce the opening of two new restaurants at Cassi. In January, Portland-based vegan eatery Rabbits Cafe opened its second location. In February, vegan taqueria Mis Tacones, which started out as a food cart, celebrated the grand opening of its first brick and mortar location at Cassi. On February 22, local news outlet KPTV broadcasted reporter Elise Ayo’s visit to Mis Tacones on morning television.
Check out KPTV’s news coverage here.
And, don't forget to drop in for a delicious meal next time you are in the neighborhood!
In February, we installed a sign at our North Anchor Hotel project site in downtown Lake Oswego to promote awareness of the project among local residents, business owners and visitors.
RESIDENTIAL LEASING UPDATE
Leasing activity is typically subdued in the first quarter. As one of our Operations Team members described it, people—much like bears—tend to hibernate during the winter months. In February, our leasing team received 18 lease applications, executed 14 new leases, and assisted with 10 new resident move-ins. Lease turnover (LTO) continues to support strong rental rate increases across our portfolio. In February, LTO yielded noteworthy average rent growth of 18.99% — an average rent increase of $275.85. This reflects a broader trend - multifamily rents in Portland and the majority of metro areas throughout the U.S. have fully recovered from pre-pandemic lows. According to a new report published by Redfin, between January 2021 and January 2022, average monthly asking rents in Portland increased 39% to $2,459—the largest year-over-year rent increase of all major metro areas in the U.S.
In addition to LTO rent growth, we track rent growth attributed to lease renewals. Lease renewals are subject to state and local regulations that limit how much a landlord can raise rent. In the City of Portland, for example, rent increases are effectively capped at 9.9 percent in a 12-month period. Seven residents renewed their leases in February. These renewals yielded average rent growth of 7.25% — an average rent increase of $87.50.
The table below shows average residential lease rates for individual properties, as well as the portfolio-wide average lease rate across all stabilized properties.
AVERAGE LEASE RATES - STABILIZED RESIDENTIAL PROPERTIES
The portfolio-wide average lease rate was 96% in February (as of 2/27/2022), on par with January and down 1% from Q4 2021 (97%). Average lease rates at individual properties ranged from a low of 68% at The George to as high as 100% at Fairmount Apartments. As detailed in prior newsletters, The George’s lease rate is temporarily depressed due to disruptions caused by waterproofing repairs. In spite of the challenging conditions presented by the repairs, in February we signed a new lease at The George at a rental rate that exceeded the previous rent for that unit by more than 29%. At Slate, the average lease rate declined from 93% in Q4 2021 to 90% in February. The majority of vacancy is attributed to 2-bedroom units, which have proven challenging to lease due to a lack of available on-site parking. Prospects looking at 2-bedroom units typically have at least one vehicle and, for many, the lack of parking availability is a dealbreaker. To improve access to resident parking, we’ve upgraded the adjacent gravel lot to better utilize that space. We have installed new signs to make it easier for residents to navigate the lot and easier for our team to manage it.
The table below shows average residential occupancy rates for individual properties, as well as the portfolio-wide average occupancy rate across all stabilized properties.
AVERAGE OCCUPANCY - STABILIZED RESIDENTIAL PROPERTIES
During the first two months of 2022, the portfolio-wide average occupancy rate was 95%, down 1% from Q4 2021 (96%). As noted in the leasing overview, occupancy at The George is down temporarily due to building repairs. We are actively marketing the remaining vacant units as the end of the repairs—projected for completion in April 2022—draws closer.
At this time, we are not offering rent concessions for new leases. We are requiring a security deposit for all new leases.