91ÊÓƵ

After a long drought, downtown Portland has finally landed a major new lease.

SERA Architects has agreed to occupy 42,000 square feet of office space within the historic Galleria building. That is the largest lease in Portland’s urban core since the pandemic began more than a year ago.

The lease term is for 15 years. Unico Properties, which owns the building with Partners Group, declined to reveal the lease rate.

SERA will occupy the top floor of the five-story building sometime in spring 2022. The Target store in the building is downsizing, vacating the second and third floors to move into the first floor, which had been limited to a storefront and a Starbucks café.

The upper-floor changes from retail to office will require a major renovation, which SERA is designing. Unico declined to comment on whether SERA’s lease was tied to the design deal. Unico Properties and Partners Group are committing $20 million to fully renovate the 194,737-square-foot building.

The Galleria building was completed in 1910, and originally was home to the Olds, Wortman and King department store. Bill Naito Co. repositioned the Galleria in 1976 as a shopping mall. Naito sold the property to the Unico-Partners Group joint venture partnership in 2018 for $64.1 million.

New building amenities will include a new lobby and entrance for office tenants, outdoor spaces, a fitness center and a yoga studio.

The project team will also be tasked with making the building more efficient. The renovations will target Leadership in Energy and Environmental Design gold status via the existing buildings program, and Fitwel certification.

The renovation of the Galleria comes as the future of office space remains hazy. Some companies have announced plans to reduce their office footprint amid widespread adoption of flexible work-from-home policies.

Leasing activity for the Portland-metro area fell 42 percent to 562,626 square feet during the first quarter, compared to a year earlier, according to Kidder Mathews. Full-service asking rates slipped to $28.09 per square foot, down from $28.38 per square foot.

More than 2.3 million square feet of office space is under construction in the metro area, Kidder Mathews reported.