Canvas at Press Blocks, a nine-story building, is bringing 132,500 square feet of office space to market in Portland’s Goose Hollow neighborhood amid rapidly changing economic conditions.

The project from Seattle-based developer and property manager Urban Renaissance Group adds inventory to an urban office market weakened by a glut of supply, the COVID-19 pandemic and widely publicized destructive protests.

“It is a very competitive market right now, and tenants are considering all options,” URG CEO Patrick Callahan stated via email. “Our location will appeal to tenants looking at both urban and suburban locations, with plenty of parking and great transit access. For the right tenant, we’re willing to get creative.”

Canvas is the first of two phases for the Press Blocks. The second will be headlined by the Plaza Building, a 23-story residential tower with 342 units. A smaller, 30,000-square-foot commercial building will have office space, ground-floor retail suites and an outdoor public plaza.

The Press Blocks buildings were planned during the longest economic expansion on record that stretched for more than 10 years following the Great Recession. URG invested heavily in Portland. Other developers were investing, too: More than 1 million square feet of office space is expected to be delivered in Portland this year. Through the third quarter, 869,067 square feet had come online, according to JLL.

“There’s a lot of space coming online,” said Tim Harrison, research manager at JLL in Portland. “Any tenant looking for space is going to have the pick of the bunch. They’re going to have all of the options they need.”

Like other new projects, Canvas at Press Blocks faces economic headwinds that were hardly foreseeable when they broke ground. Total vacancies in Portland’s Central Business District rose to 15.9 percent during the third quarter, and rents fell 0.7 percent to $37.41 per square foot on average, according to JLL. .

in a recent report from PWC and the Economic Lands Institute, placing it significantly below average of the markets studied. Downtown rents have not dived yet, Harrison said. Instead, landlords are getting creative with concessions such as free-rent periods or ample tenant improvement budgets.

“Investors are pretty reluctant to decrease that face rate,” Harrison said. Nevertheless, he added, “landlords are getting creative where they need to be.”

Jordan Menashe, CEO of Menashe Properties, said the office market is already showing signs of a turnaround, and more tenants are asking about lease extensions. The family firm owns and manages more than 1.5 million square feet in the Portland area.

“I can say with confidence that we’ve hit the trough,” he said. “This will be the sharpest and quickest recession to date in American history.”

As downtown faces a glut of new office projects, the suburbs are seeing an uptick in leasing activity. “Beaverton is having its time in the limelight for sure,” Harrison said. He said he expects the fortunes of suburban and downtown office space to widen in 2021.

“The suburbs are healthy,” he said. “I wouldn’t say they’re booming, but they’re healthy, whereas the urban core will not be for at least the next 12 months.”

The move to the suburbs upends developers’ strategies during the recent expansion. Conventional wisdom held that young, talented workers preferred to live and work in urban cores close to amenities. That thinking drove projects such as Block 216, Eleven West and 250 Taylor.

Those projects balance office space with other uses. That may benefit Portland’s downtown core during the downturn, as relatively small chunks of office space are more readily absorbed, Harrison said. “150,000 square feet of office is not that big of an office building in the grand scheme of things,” he said.

Meanwhile, the suburbs have seen little to no speculative office development, resulting in tighter inventories, Harrison said.

Canvas at Press Blocks is part of a burst of development in Goose Hollow, which sits just west of downtown. As in the Pearl District, new higher building heights allowed by the Central City 2035 zoning plan contributed to increasing densification in what had been low-slung neighborhoods.

In addition to Press Blocks, the Providence Park expansion, Wood Partners’ 21-story ART Tower and Greystar Real Estate Partner’s eight-story building at 1715 S.W. Salmon St. have remade the neighborhood.

Canvas at Press Blocks is attracting interest, Callahan stated. Migration Brewing has taken a rooftop taproom. For office tenants, the building offers 19,000-square-foot floor plates.

“We’ve had several potential anchor tenants look at the building and would welcome the opportunity to do a deal with any of them,” Callahan stated. “We have one full floor built out in move-in ready condition and we’re ready to do a deal there, even on a short-term basis. We also have great retail space on the ground floor and are excited about activating the streetscape around Providence Park.”

The new project will also have to deal with changing perceptions of Portland’s urban core. Protests that have often resulted in shattered windows and graffiti have been shown on TV news channels around the world.

The months of protests “certainly has” had an impact, Harrison said. “Long term, I don’t think it has an effect. Companies are going to keep coming downtown.”

Callahan is among those who think it’s time for the downtown streetscape to return to a sense of normalcy. He noted that Goose Hollow hasn’t seen the level of protests that the downtown core has had.

“All the boarded-up windows have hurt the perception of downtown Portland,” he stated. “With the protests abating, it’s time for tenants and property owners to take down the plywood.”

The post Office project comes to market amid uncertainty appeared first on Daily Journal of Commerce.

Though the Great Recession ended slightly more than a decade ago, Portland’s Goose Hollow neighborhood hasn’t since experienced much growth … until now.

Two buildings that until 2015 were used for printing The Oregonian newspaper on a daily basis are being replaced by a new mixed-use complex. The Press Blocks development will feature office, residential and retail space in three new buildings on one and a half blocks.

Lease Crutcher Lewis is constructing the first one – Canvas at Press Blocks – on a half-block directly east of Providence Park. The mixed-use building will feature ground-floor retail space, seven stories of Class A office space and ninth-floor amenity space; the designer is GBD Architects.

“This project means a lot to the neighborhood,” said Mike Sager, senior project manager for general contractor Lease Crutcher Lewis. “Goose Hollow is a forgotten part of the downtown area. And there’s a homeless situation here, and that contributed to what was previously undesirable real estate. This is the first big development to gentrify the area, and when they went through design review and pulled permits it was the first (post-recession) project in this area.”

The full-block portion of the development on a block east of Canvas will include a 23-story, 250-foot-tall residential tower and a three-story building with office and retail space. Those buildings are being designed by Seattle-based Mithun. Urban Renaissance Group, which is developing the project in partnership with Security Properties, will manage the entire complex upon completion.

Work on Canvas began in August 2018 with what Sager called the “super technical” demolition of the building at 817 S.W. 17th Ave. It stored rolls of newsprint, ink and other supplies used by The Oregonian.

“There were 60-foot-tall, clear spans inside the building,” Sager said. “60-foot-tall, freestanding concrete panels made up the walls, and they were tied to concrete, double-T roof panels that held each other up.”

To safely demolish the building, a temporary support structure was constructed to hold up the walls while the roof was removed. Then the temporary structure was dismantled and the walls dropped inside.

A below-grade tunnel used for moving materials and supplies between the two old buildings is being used during construction of Canvas. The tunnel will remain and connect parking areas.

“Across the street was the press building originally and on this side it was used for paper roll and ink storage for the printing operation,” Sager said. “They’d deliver stuff and store it in this building and drop it down onto robots on an underground tunnel on 17th (Avenue) and then over to the other building.”

Canvas is being constructed with post-tensioned concrete decks and reinforced concrete support columns. The exterior will predominantly be pre-cast concrete panels made by ARCIS Technology. The panels have deep window boxes that don’t articulate but provide a deep return leg to add texture and depth to the exterior. It’s a look intended to resemble the previous buildings.

“They wanted to honor the original building,” Sager said.

Lease Crutcher Lewis is using 3-D modeling extensively for this project. The contractor is using a robotic tool station to lay out building components as needed.

“In the last five years that’s been cutting-edge, and some people are doing more of that,” Sager said. “We’ve been doing it for a long time, and basically we take the design team’s model and take it over at a certain point. Then we re-detail the concrete and generate our own drawings, extract points from the embeds and export it all to the robotic layout equipment so our crews can efficiently lay out the building.”

Completion of Canvas is expected in late spring 2020. The construction schedule for the 23-story residential tower and the three-story office building will be determined once financing is secured.

The post First Press Blocks building on the rise appeared first on Daily Journal of Commerce.

Demolition of a building formerly used by The Oregonian newspaper is under way in Portland’s Goose Hollow neighborhood. In its place will rise a mixed-use building, Canvas at Press Blocks, with 8,000 square feet of ground-floor retail space, seven stories of office space and a ninth-floor tenant amenity space. The building is one of three being constructed as part of the Press Blocks redevelopment; also planned are a 23-story residential tower and a three-story office-and-retail building one block east.

Staton Companies is demolishing the 175,000-square-foot building, located at 817 S.W. 17th Ave., for general contractor Lease Crutcher Lewis. The structure formerly held large newsprint rolls, which were moved through the building by a large gantry crane and transported by tunnel to the full-block printing space on the adjacent block to the east.

The warehouse was constructed of double-T precast wall and roof panels, some of which are being supported through the demolition sequence by shoring braces installed by Omega Morgan; it’s performing welding work and crane assistance for Staton. The building’s concrete wall panels are being saw-cut at the top, after which the remaining gantry crane rail is cut and the loose panel is laid down on the ground and crushed on site. The removal of roof panels involves demolishing the concrete webs on either side of the double-T panel beams, and then cutting the beams to allow them to drop.

Demolition work is about halfway complete. The building will be taken down to grade by December, at which point shoring pile and deep foundation subcontractors will install temporary shoring so the site can be excavated for a single level of below-grade parking. The contractor estimates coming out of the ground around March 2019, then taking about 10 months to build the eight floors of post-tensioned concrete. A ninth-floor with amenity space, a terrace and mechanical penthouse will be constructed using structural steel. Substantial completion of the project is slated for mid-2020.

The site’s constraints – TriMet MAX lines to the west and the north, a bus line to the east, and occupied buildings on the block’s southern half – will require the project team to carefully orchestrate deliveries of materials.

“It’s about as just-in-time construction as it gets,” said Mike Sager, senior project manager with Lease Crutcher Lewis. “It basically comes off a truck and goes in the building. It’s all about logistics on this one.”

The Press Blocks project is being conducted in partnership between Security Properties and Urban Renaissance Group, which previously acquired and redeveloped The Oregonian’s headquarters building at 1320 S.W. Broadway. Invesco Real Estate is serving as an investment partner. GBD Architects designed the Canvas at Press Blocks building. Mithun is the architect of the two buildings on the full-block site, which does not yet have an anticipated construction start date.

The post Redevelopment starts with demolition appeared first on Daily Journal of Commerce.