The Central Eastside Industrial Council has commissioned a parking study as an increase of jobs in the urban district has not come with additions of spaces for motor vehicles.

The study is “to determine exactly how much parking we have and how much parking we need, and whether we’re using the parking that we have efficiently,” said Brad Malsin, the council’s president and a Beam Development principal.

Portland’s zoning, in particular the Central City 2035 plan, limits residential and office uses in the Central Eastside in an attempt to protect the district as an industrial sanctuary. As multifamily and office development creates pressure on industrial space across the city, the Central Eastside is meant to remain a place where industrial businesses can continue to flourish.

That has become a challenge.

“I think it needs to be done,” Jim Kennison, director of bakery operations at Franz Bakery, said of the parking study. “It is the industrial district, and the industry is getting kind of crowded and pushed out.”

Pressures have grown. In June 2018, Autodesk moved from Lake Oswego to the Towne Storage building, a renovated 100,000-square-foot warehouse south of the Burnside Bridge that was originally built in 1916 and has no parking. Media reports at the time said Autodesk had 200 employees at the location, with room to scale up to 500.

The construction software firm declined a recent interview request, and did not respond to an email asking how many employees work at the Towne Storage building.

Whereas the parking situation is a problem for many employers, it’s an opportunity for some developers. Harsch Investment Properties‘ 7 SE Stark building, nearly completed, has six floors of parking with 265 stalls.

“It’s a critical need,” said Jordan Schnitzer, president of Harsch Investment Properties. “Many tenants realize that while lots of people walk and bike and use Uber, there’s a lot of people that still drive their cars and a lot of people that want to visit businesses.”

Some of 7 SE Stark’s parking will be available to other users, Schnitzer said.

“We’re first going to take care of our tenants, and then any excess parking, we’ll take care of Olympic Mills and the public,” he said.

The Olympic Mills Commerce Center, a commercial building near 7 SE Stark, has tenants including Olympia Provisions and Fish Marketing.

Gerding Edlen’s 5 MLK, another building under construction in the area and expected to be delivered early next year, has three floors of underground parking. A spokesperson for the developer did not respond to a message seeking comment. An executive with Apex Real Estate Partners, the leasing agent for the project, also did not respond to requests for comment.

District Office, a six-story building from Beam Development and Urban Development + Partners at 525 S.E. Martin Luther King Jr. Blvd., will have one floor of underground parking.

The growth affects many longtime industrial businesses, which rely on parking and easy access for trucks to transport their products. Franz Bakery has operated in the neighborhood since 1906, and is in a relatively good position with three parking lots for its approximately 500 employees in the district. Few employees use public transit, Kennison said, because of schedule challenges.

“Our problem here is we work pretty much 24/7,” he said. “Bus service and light rail is not great on holidays or weekends.”

TriMet spokeswoman Tia York stated via email that the Central Eastside “enjoys some of the best supply of transit in the region.” Next spring, bus line 20 will be upgraded to frequent service – every 15 minutes – joining six frequent service lines currently operating in the area. TriMet is also working with the Portland Bureau of Transportation to accelerate bus service to make riding transit more attractive, York stated.

The Central Eastside Industrial Council also operates the Water Avenue Shuttle, which runs two shuttle buses during peak commuting hours from the Dairy Building on Southeast Eighth Avenue to the Oregon Convention Center.

Kennison said some small businesses have moved out of the district. That’s hardly an option for a company the size of Franz, he said.

“We’re a big company,” he said. “It’s going to be really hard for someone like us to move – I’m not saying that’s happening.

“Smaller businesses that can be more mobile, they don’t want to hassle with the parking,” he added.

The Lloyd area, just north of the Central Eastside, has its own parking challenges. Go Lloyd, a business group, conducts an annual parking survey of more than 13,000 on-street and off-street parking spaces. In 2018, the survey found usage rates were 10 percent higher than during the previous year.

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Harsch Investment Properties‘ 7 SE Stark building is either a major new office project with ample parking, or a major new parking project with an office component.

Hoffman Construction has erected the core and shell of the 10-story building in the Central Eastside Industrial District. Exterior and interior work is ongoing, with completion expected in late July.

Works Progress Architecture designed the 200,000-square-foot building to feature a modern concrete-and-steel structure and extensive exterior glass.

Parking is the differentiator at 7 SE Stark. The first six floors are dedicated to structured parking – 275 stalls. The building offers at least two stalls per 1,000 square feet, dwarfing most modern office developments in Portland’s Central City. Some of the parking will be rented out to other users in the fast-growing Central Eastside office market.

The building is a response to a pronounced lack of parking for the Central Eastside’s growing employment base, said Jake Lancaster, managing director at Jones Lang LaSalle in Portland.

“There’s a tremendous need for parking in the neighborhood as it evolves from its industrial roots,” he said.

The area has several adaptive reuse spaces, including Autodesk‘s office at the Towne Storage building, with limited parking.

Parking may be a key selling point for 7 SE Stark, said Macadam Forbes President Kevin VandenBrink, who is not involved in the project.

“While no one wants to admit that parking is an issue, the tenants have told us you still need to find ways to get people into and out of those spaces,” he said.

The Central Eastside is becoming more of a “24/7 neighborhood” where people live and work, Lancaster said. The building is pinched on a half-acre parcel between Interstate 5 and Union Pacific tracks. Eateries such as Olympia Provisions, Steven Smith Teamaker and Wayfinder Beer operate nearby.

On Wednesday, Lancaster led a tour of 7 SE Stark as construction winds down. He pointed to a small, modern lobby that will be decorated with murals commissioned by Jordan Schnitzer, Harsch’s owner and a noted art collector.

The top floor has a floor plate of approximately 17,000 square feet, while the three lower office floors offer about 20,000 square feet apiece. Lancaster said the brokerage would be willing to split the top floor with potentially more than one user, but is looking for tenants willing to take an entire floor for the three others.

The office floors have 12 decks in total, and offer sweeping views, including the Willamette River and downtown to the west.

Lease rates are expected to be $33 to $35 per square foot on a triple-net basis, Lancaster said. Other expenses will add $10 to $12 per square foot.

The entry of 7 SE Stark to the office market comes as construction continues nearby on other office projects, including District Office from Beam Development and Urban Development + Partners, and Tree Farm from Guerrilla Development. Gerding Edlen‘s 5 MLK mixed-use project will bring 120,000 square feet of office space to market in early 2020. Oregon Square from American Assets Trust also has office space on the market.

Central Eastside office tenants are no longer limited to the “funky spaces” in adaptive reuse projects that typified the area a few years ago, VandenBrink said.

“It has kind of grown up on the Eastside now, where you have tenants paying rents even with the Pearl (District) or the (Central Business District),” he said.

With rents even across the area, leasing decisions often come down to noneconomic factors, VandenBrink said.

“It comes down to what feels right, who has the best amenities (and) what spaces are most efficient for the layout and the employees,” he said.

Harsch acquired the property via a limited liability company for $375,000 in 2012, according to Multnomah County records. The seller was Francis Development LLC.

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These days in Portland, buildings are popping up everywhere.

For example, in the Central Eastside, at the junction of Southeast Stark Street and Water Avenue, a 10-story mixed-use building is being squeezed into an industrial space mere feet away from Interstate 5 to the west and Union Pacific railroad tracks to the east.

“You can see the close proximity of the building to the freeway,” Hoffman Construction Superintendent Mark Rado said during a walk around the site last week, pointing out how close workers were to passing vehicles. “The building itself is a little further away, but because we need a work deck, we’re even closer; you can see that Aluma deck there. That one is probably about 10 feet away, and that one up there is probably 15.”

The started as an innovative parking solution, but evolved into one of the few Central Eastside work-space buildings to be constructed from the ground up. The building, known as “,” will hold approximately 70,000 square feet of office space and 265 parking spaces for motor vehicles. Secured bike parking and a fitness center with locker rooms also will be included.

Works Progress Architecture to stand out among the vintage industrial shells that dominate the immediate vicinity. Floor-to-ceiling glass windows will provide occupants views of the city. As the structure rises, portions of the façade will “erode” back toward the core, and the top will feature several shared terraces. The bottom six stories will be devoted to public parking.

“We think there’s tremendous demand in the neighborhood for parking,” Harsch Investment Properties Senior Vice President and Regional Manager Steve Roselli said. “It has the added bonus of getting you above the freeway and the railroad noise. It gets you up there to where you’re in a world of your own.”

The building will feature six stories of post-tensioned concrete topped with four stories of structural steel with slab-on-metal decks. Crews are about six weeks away from finishing structural concrete work, Rado said.

“We start structural steel after Thanksgiving,” he said. “Today we’re loading our PT deck number six, and we have three more decks to pour, but right now we’re loading rebar and PT on the deck and getting ready to pour next week.”

The development is not necessarily a new direction for Harsch Investment Properties, Roselli said, but rather a reflection of earlier property investments made in Portland’s inner east side.

“We’re a pretty active developer in markets where we can find land for our light industrial products, but there are no industrial sites left up here,” he said. “So, we’re a very active developer in Las Vegas and Sacramento and now starting in Tucson. It just happens that in Portland, where we’re based, we have a lot of downtown blocks that are or will be redevelopments as the market dictates.”

Harsch Investment Properties purchased the 7 Southeast Stark site five years ago when it was a surface parking lot. Then it six months ago purchased the site to the east with the intention of either redeveloping the existing warehouse or replacing it with something new.

“We have quite a few sites around town in Portland that are redevelopment sites that could certainly sustain much higher and better uses,” Roselli said. “Several of these blocks that we bought on the east side qualify.”

Nearby, Harsch Investment Properties has its eyes on 151 S.E. Alder St. The firm was working with Works Progress Architecture on a potential 10-story mixed-use building there; however, plans were put on hold, Roselli said.

“This one went first; it made more sense because we could do more parking,” he said in reference to 7 Southeast Stark. “That one, being a corner block, it’s more limited and we’ll hold for now.”

Substantial completion of the project, Roselli said, is expected by June 2019. , with JLL agent Jake Lancaster handling inquiries.

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