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Long before the 28,500-square-foot building at 126 S.W. Second Ave. housed the Venue 126 nightclub, the structure served a much more straightforward purpose.

“What it was initially built for was when ships would come to the docks down at the harbor wall,” said John Gibson, principal broker for KW Commercial. “People were here looking for work and they would bring luggage with them. They would tag it and toss it on the back of a horse-drawn carriage and take it up to that building.”

It was built in 1886 as a baggage and carriage warehouse for wayward travelers. The building still has exposed brick and old timber beams, and is an ideal candidate for redevelopment into creative office space, according to Gibson. He’s listing the building – on behalf of the owners of Venue 126 – for sale at $1.95 million.

A seismic upgrade would be required to make the two upper floors usable. Gibson estimated the cost for such a project at $3.05 million and the cost of finishes at $500,000. Combined with the purchase price, a potential buyer’s investment could be $5.5 million. With a 30 percent down payment, Gibson said a developer would need to fetch rents of only $9.72 per square foot triple net, or $16 per square foot full service, for a feasible project.

Gibson said comparable finished creative office properties – with exposed brick, high ceilings, skylights, wood floors and natural light – are trading for about $23 per square foot, full service.

“That provides a pretty good margin for a developer to come in and redevelop it and have it be profitable,” he said. “It’s got so much wood in there it’s unbelievable … It’s a pretty neat building. It could really be something cool in that location, and those kinds of opportunities don’t always present themselves in Portland.”

Block by Block is a weekly look at commercial real estate around Portland. Send suggestions for properties to [email protected].