Northwest commercial real estate projects and professionals were honored recently, during the annual Night of Excellence Awards event. It took place at the Sentinel Hotel in downtown Portland on March 5, prior to size restrictions on gatherings to combat the spread of the COVID-19 virus.

Local chapters of the National Association of Industrial and Office Properties (NAIOP), the Oregon-Washington Commercial Association of Brokers (ORWACAB), the Society of Industrial and Office Realtors (SIOR) and the Building Owners and Managers Association of Oregon (BOMA) hosted the event. Achievements from 2019 were recognized.

Awards included:

Office Development of the Year: 7 SE Stark, Portland, Harsch Investment Properties
Multifamily Development of the Year: Club at The Park, Vancouver, Washington, PacTrust
Hospitality Development of the Year: Hyatt Regency Portland, Mortenson
Industrial Development of the Year: Denney Road Commerce Center, Beaverton, Harsch Investment Properties
Office Redevelopment of the Year: Harrison Square, Portland, Mackenzie

Investment Broker of the Year: Nicholas Kucha, NKF
Office Broker of the Year: Trevor Kafoury, CBRE
Retail Broker of the Year: George Macoubray, Commercial Realty Advisors
Industrial Broker of the Year: Stuart Skaug, CBRE
Rookie Broker of the Year: Zac Nelsen, Niehaus Properties
Industrial Team of the Year: Steven Klein, Peter Stalick, Brendan Murphy, Kidder Mathews
Investment Team of the Year: Charles Safley, Paige Morgan, CBRE
Multifamily Team of the Year: Josh McDonald, Phil Oester, Joe Nydahl, CBRE
Office Team of the Year: Kristin Hammond, Ajay Malhotra, CBRE
Retail Team of the Year: George Diamond, Nicholas Diamond, Michelle Rozakis, Real Estate Investment Group
Property Manager of the Year: Emily Mandic, American Assets Trust
Bill Naito Award: Portland Meadows Racetrack, Jerry Matson, Colliers International; Sean Colletta, Prologis

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The Portland City Council is preparing to consider a policy that would require owners of unreinforced brick buildings to retrofit them, and building owners are urging the city to provide financing.

Portland has 1,644 unreinforced masonry buildings, according to a city inventory. They are 88 years old on average.

Portland officials have anticipated the need to retrofit the city’s unreinforced masonry (URM) buildings for years. The city’s first retrofit requirements were adopted in the mid-1990s. But increasing awareness of Portland’s risk for a potentially devastating Cascadia subduction zone earthquake has added urgency to the efforts.

Even landlords now recognize that seismic retrofit requirements are coming.

“At the end of the day, it’s how can it be done, not should it be done,” said Gwenn Baldwin, a lobbyist who represents the Masonry Building Owners of Oregon.

The URM Policy Committee will meet for the final time on Oct. 4. The City Council will then perform its first review of the policy Oct. 19. The council is not expected to vote on the policy at that meeting.

The policy’s creation is overseen by the city’s Bureau of Emergency Management, which is overseen by Mayor Ted Wheeler. His office is monitoring the URM Policy Committee’s work, spokesman Michael Cox said.

“We’ve been working closely with them on refining their proposal,” he said.

The policy has been years in the making, in part because building upgrade mandates often face resistance from property owners. Seismic retrofits are a particularly costly upgrade, often requiring landlords to evict or temporarily relocate tenants for months while work proceeds.

Adding to the difficulties is the city’s new relocation assistance ordinance that requires landlords to compensate tenants upon issuing a no-cause eviction. The relocation assistance varies by the size of unit, ranging from $2,900 to vacate a studio apartment to $4,500 for a unit with at least three bedrooms.

Those costs add up. Last spring, Urban Development + Partners evicted tenants from 65 units at the Fairmount Hotel to make way for a major renovation. The fees cost the Portland developer $199,800.

In concept, seismic retrofits could hardly be simpler: add steel. Typically, steel bars are added to reinforce masonry walls. Parapets and other features are tied down into more durable structures.

The construction is straightforward, but the costs can be high, particularly for the owners of small buildings that generate modest leasing income.

And not all unreinforced masonry buildings are for-profit operations. The city’s inventory lists approximately 45 schools and 35 churches. Central City Concern, one of the city’s largest nonprofit owners of affordable housing, owns several unreinforced masonry buildings.

URM buildings were built in Portland between about 1870 and 1960, according to the city’s draft summary. Many of the buildings are located downtown, in Old Town Chinatown and in the Central Eastside Industrial District.

Government officials have known of Portland’s seismic risks for years, but a story in the Portland Mercury in 2012 shed light on the scale of the problem. Former Commissioner Steve Novick drew attention to the issue, and then a 2015 article in The New Yorker added alarm with scenarios of widespread death, displacement and structural failures from the inevitable earthquake.

A draft of the city’s policy was released in April, and changes may still be made. The draft policy takes a tiered approach to regulating URM retrofits.

The URM committee process has helped make the draft policy workable for building owners, Baldwin said.

“The process has actually accomplished what you hope from the Portland process,” she said. “It has become more practical, more grounded.”

In the tiered approach, the vast majority of unreinforced masonry buildings is in class 3, designated for buildings with more than 10 occupants but no critical infrastructure. Draft retrofit standards for those buildings call for bracing unreinforced masonry parapets, cornices and chimneys, anchoring walls to floors and roofs, attaching a diaphragm to vertical elements to transfer in plane shear and out-of-plane wall bracing for taller walls.

Owners of class 3 buildings would have five years to assess needed seismic upgrades, 10 years to brace parapets and attach walls to the roof, 20 years to complete wall-to-floor attachments and wall strengthening and 25 years to complete all work. A five-year extension could be provided for hardship.

Class 1 buildings – critical ones such as hospitals and fire stations that must be occupied after an earthquake – have much tighter timelines. Owners of these buildings are given three years to assess and 10 years to complete a retrofit.

Class 2 buildings include schools and churches. Owners of those buildings are given three years for assessment, 10 years for bracing and 20 years to complete a retrofit.

Class 4 buildings are one- to two-story buildings with up to 10 occupants. Owners of those are given 10 years to complete a seismic retrofit.

Affordable housing providers are working to make sure the policy doesn’t result in the closure of any buildings. Central City Concern has been in contact with the Portland Housing Bureau to devise an exception for affordable housing.

The amendment, if adopted by the URM Policy Committee and City Council, would allow an extended timeline for owners of affordable housing to evaluate and conduct retrofits of their buildings, said Sean Hubert, chief housing and employment officer for Central City Concern.

“We feel in terms of the affordable housing piece that that is a good compromise,” he said.

If the amendment is not adopted, Central City Concern would oppose the URM policy, Hubert said.

City codes beginning in the 1970s resulted in the closure of thousands of single-room occupancy units, which share kitchens and bathrooms and serve as housing of last resort for many impoverished individuals, Hubert said. The closure of those units coincided with a rise in homelessness, he said.

“A lot of that loss was due to the city getting more tough on code enforcement and new codes,” he said.

Seismic retrofits for multistory apartment buildings are costlier than similar upgrades for buildings with open floor plans, Hubert said.

“What we have found – in order to do a full seismic retrofit – you have to shore up the diaphragm at each level, which means you have to tear up everything,” he said. “It’s a very costly prospect.”

For many owners of small URM buildings, the property serves as their retirement income, said Susan Steward, executive director of the Building Owners and Managers Association of Oregon. It’s critical the city provide financing for the seismic retrofits, she said.

“I’m still concerned at the end of the day they’re going to pass this with nothing in place (for financial assistance),” she said.

Few buildings have sufficient equity to finance costly retrofits, she said.

A program called PropertyFit aims to close the financial gap. It’s operated by Prosper Portland, Multnomah County and the Energy Trust of Oregon, with outside capital partners. The program offers financing beginning at $200,000 with terms of up to 30 years. The loans are secured by a property lien.

The program has yet to be tested, however.

City officials appear to be sympathetic to building owners’ concerns, Steward said.

“They seem to get it,” she said.

City officials are aware of the financing challenges, but also hesitant to hand out dollars to private property owners. A property-tax abatement may be part of the answer.

The policy is on the right track – as long as financing comes together, Baldwin said.

“We’re close,” she said. “But don’t get things out of order. Don’t pass (the policy) and then figure out financing.”

The post Preparing for a big one appeared first on Daily Journal of Commerce.

The critiques may have been difficult to hear, but the six Portland State University students who presented their to a panel of local developers on Wednesday say the experience was worth any slight verbal bruising they encountered.

The students, all enrolled in real estate certificate and master’s degree programs at PSU,  had been assigned to come up with a development plan for the Benson Blocks, a 14-acre site in Portland. The idea was to make the planning experience as real as possible for the students, from giving them an actual parcel of land to work with to exposing them to responses they might encounter when proposing a project to a group of city or county officials.

The approach struck a chord for at least one student. Jennifer Hanna, who works in the financing industry, said simulating the planning of a development provided her with insight looking at a project from the ground up.

“It’s a whole new experience. I can take it to the lending world, and be able to think like a developer,” Hanna said.

The students’ development proposal for the swath of property between Sandy Boulevard and the Banfield Expressway included some ideas unusual for Portland: an urban Costco store with apartments above it; a YMCA; and an urban Portland Community College campus with potential for student apartments.

“We saw it as an underutilized site,” student Christopher Longfield said. “We feel like we’ve laid some groundwork for development.”

Longfield, Hanna and their four peers brought a variety of experiences to the development project. Longfield was in the residential mortgage business before the financial crash. Karen Reeves spent 15 years in New York City in the financial sector, mostly working for Goldman Sachs. Kyle Brown has a construction management background in both California and Oregon. He said his biggest lesson was “how much parking can influence a development’s financial pro forma.”

Both proposals called for underground parking and stand-alone parking structures.

“It’s the biggest influence, which is kind of a bummer,” Brown said. “That’s the way things have to be built.”

The team assembled the scenarios over the course of a 12-week program by working with the owner of the site, prominent developer Joe Weston, as well as professionals from the architecture and development industries and businesses like YMCA and Costco.

Brown said that the project presented an opportunity to meet folks in the industry, particularly because the “student” label opens doors that might otherwise be closed. He said that the folks he talked to recognized that students today will be developing the big projects of the future.

“The industry is all about networking.” Brown said.

The group’s “modest” scenario suggested retail, apartments and senior housing, as well as a Market of Choice grocery store, a Costco and a beer garden. That project was a multiphase development with $284.5 million in construction costs.

A “robust” scenario called for construction totaling $639.8 million. That ambitious plan included many of the same aspects, as well as condos, class A office space and a hotel.

“The first time I drove on Sandy (through the site), I was way more concerned with what lane I needed to be in,” Reeves said.

The team worked to create a sense of place, with phasing that started along Sandy Boulevard and progressed to larger buildings visible from busy roads nearby.

A panel at the Building Owners and Managers Association meeting said the proposals were impressive, but reminded the students of current realities.

“I’d love to see condos come back, but that may be a while yet,” said Debbie Thomas of Debbie Thomas Real Estate.

“My first reaction is to the apartments right along the freeway,” Unico Properties General Manager Brian Pearce said. “You have to think about that.”

The students recognized that a big development is probably unrealistic in the coming years, but they stood by their plans.

“I think it’d be very interesting to see (the site) when it’s developed,” Reeves said.

The post Students dream big in proposal for ‘Benson Blocks’ appeared first on Daily Journal of Commerce.

Local businesses are being asked to check their watts, wheels, waste and water use as part of a citywide sustainability challenge from the .

BOMA Portland is asking Portland real estate owners to sign up for , a citywide challenge to building owners to determine their carbon footprint and make a plan to reduce it. The name comes from the four areas that produce a building’s carbon footprint: electricity use, transportation to and from the building, waste and water.

Participants will be hooked up with a 4Square coach to assist owners with their sustainability initiatives. Their buildings will also be studied to find out where energy is being consumed using ‘s benchmarking method. There is no cost associated with participating, which makes this opportunity to address your building’s energy use even more appealing.

To sign up, visit before Jan. 31, 2011.

The post Take the BOMA Carbon4Square challenge appeared first on Daily Journal of Commerce.

Local businesses are being asked to check their watts, wheels, waste and water use as part of a citywide sustainability challenge from the .

BOMA Portland is asking Portland real estate owners to sign up for , a citywide challenge to building owners to determine their carbon footprint and make a plan to reduce it. The name comes from the four areas that produce a building’s carbon footprint: electricity use, transportation to and from the building, waste and water.

Participants will be hooked up with a 4Square coach to assist owners with their sustainability initiatives. Their buildings will also be studied to find out where energy is being consumed using ‘s benchmarking method. There is no cost associated with participating, which makes this opportunity to address your building’s energy use even more appealing.

To sign up, visit before Jan. 31, 2011.

The post Take the BOMA Carbon4Square challenge appeared first on Daily Journal of Commerce.

When Scott Conway, president of First Cascade Corp., saw the bid results for the renovation of the Chehalem Cultural Center in Newberg four months ago, he noticed something odd that he hadn’t seen in 25 years: The two lowest bids came in at the exact same dollar amount.
More importantly, that amount was well below what he would consider the market cost of the project.

Conway wasn’t surprised. He and other building professionals consider it a sign of the times, as firms balance their desire to stay in business with their desire to stay competitive.

“There’s more competition now everywhere,” Conway said. “When you have more companies, 15 or 16 companies, bidding on a project, stuff like (identical bids) can happen. It’s the law of averages.”

The beneficiaries of lower bids are building owners, who are seeking more renovation work for less money. The recession may be slowing the sale of new and old buildings, but construction costs have dropped by nearly 11 percent since the beginning of the year, according to the . So some building owners are investing in small projects while waiting to sell when the economy rebounds.

Building owners with money on hand are looking to renovation work with a newfound sense of enthusiasm, said Susan Steward, director of Portland’s chapter of the Building Owners and Managers Association.

Art DeMuro, president of Venerable Properties, said he can sense a growing hunger in contractors as they scramble for even the smallest scraps of a renovation project. The company owns several historic properties throughout the city and has been heralded for its historic renovations of buildings such as the White Stag Block.

Venerable Properties is planning to renovate two of its buildings: the Belmont Building and the Oregon Casket Building. Both are for sale, but there are no potential buyers right now.

“I see existing-building owners investing further in the buildings they currently own, with more minor renovations,” DeMuro said. “It’s certainly more feasible than selling in a market that doesn’t have many buyers.”

Kimberly Fuller, general manager for the Urban Renaissance Group, said the firm will soon start renovations on the 99-year-old Spalding Building. The work will include elevator modernization, a lobby renovation, upgrades of the building’s restrooms and improvements to tenant common areas.

“It can be a lot more cost effective to renovate a building into a sustainable building than to build one,” Fuller said. “In a down market like this, you wait until the time is right to invest.”

Contractors, though, say the extra renovation work isn’t generating much extra revenue, at least for now.

Ken Triplett, co-owner of Triplett Wellman Contractors, said there’s only a marginal difference between working and idling. However, he added that companies would rather get jobs to pay for overhead expenses, such as owner salaries, than lose out on work.

“We’re still seeing so many (renovation) projects where contractors have underbid,” he said. “We’d have to lose money to do those projects.”

For example, a month ago, Triplett Wellman bid to remodel a public health building in Salem. The estimated cost of the project was $1.5 million, but the low bid came in at $1 million.

It was the largest percentage differential – 33 percent – he’d ever seen between a project’s estimated cost and the winning bid.

DeMuro said he knows that contractors are bidding so low, but added that Venerable Properties may act as its own general contractor for the Belmont Building. He said that’s because he believes construction costs are leveling off and may increase by the beginning of next year.

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A ventilation systems trade group warns that its industry may be a bigger contributor to the spread of infectious diseases, a revelation that takes on greater importance as the threat looms of another outbreak of the H1N1 flu virus.

The American Society of Heating, Refrigerating and Air-Conditioning Engineers issued a report this summer that suggested ventilation systems could spread droplets infected with the flu when someone sneezes or coughs. While those systems already use filters and other methods to scrub the air clean, the study suggested building owners, managers and construction groups could improve air quality through ventilation protections, room pressurization and ultraviolet germicidal irradiation.

Schools, hospitals and clinics are preparing for the upcoming flu season and the unknown impact of the new H1N1 swine flu virus. But those plans stop short of equipping ventilation systems with specialized equipment because at this point the potential benefits don’t outweigh the costs.

“There are studies showing that building airflow can be an important mechanism, but in terms of quantifying a change in ventilation systems reducing the transmission rate is tougher,” said Andrew Persily, an indoor air quality expert and a former vice president of ASHRAE.

Instead, building operators are turning to simpler preventive measures.

Susan Steward represents owners of 29 million square feet of office space from Vancouver, Wash., to Salem as executive director for the Portland office of the Building Owners and Managers Association. She said the flu season is on the minds of BOMA‘s members, but instead of a revamped air system, hand sanitizer is being liberally distributed throughout buildings.

“Most of us feel (the H1N1 threat) is overblown,” Steward said.

Matt Shelby, spokesman for Portland Public Schools, said the district is mindful of air quality and ensuring enough fresh air is pumped into schools. The district’s preparedness efforts for flu are more focused on keeping students home that show flu-like symptoms.

Beaverton School District has adopted a similar stance, according to district spokeswoman Maureen Wheeler. She said officials are concerned with keeping buildings clean, but flu prevention is more focused on the personal level. Hand sanitizer is being liberally dispensed in classrooms.

The pending flu season is an especially hot topic in the medical field.

Hospitals and clinics in the Legacy Health system already are designed to guard the spread of disease.

Brian Terrett, director of public relations for Legacy, said the organization’s biggest challenge is managing its waiting rooms. He said patients shouldn’t be surprised to see staff wearing face masks and eye protection, especially in emergency room and clinic waiting areas.

Even though the upcoming flu season might not trigger major building upgrades, Persily said building owners and managers are reexamining ventilation systems. Those maintenance checks often result in air filters being changed, which may reduce the spread of viruses.

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