For a Portland office building of a certain age, 2019 seems to be the time to get that face-lift.

The Wells Fargo Center, Portland’s tallest building, completed in 1972 and purchased by Starwood Capital Group in 2017 for $188 million, will receive new canopies and landscaping. The neighboring data center structure will get a new lobby and rooftop deck, and a drive-through bay will be removed.

In Northwest Portland, One Pacific Square will get an extensive renovation to the lobby and plaza areas with an eye toward attracting a tenant to replace NW Natural, which will vacate approximately 180,000 square feet some time in 2020 for new space in the 250 Taylor building. The older 13-story building, completed in 1984, was purchased by New York Life and local partner Specht Development in January 2018.

“We believe we can bring this building to life after the gas company leaves at a price that is very competitive,” said Greg Specht, chief executive of Specht Development.

Office repositioning projects are not new, but a long period of economic expansion, growing in-migration to Portland, existence of institutional investors flush with capital, and competition from newly constructed office buildings has resulted in a rush of renovations.

“You’re seeing this final push,” said Jake Lancaster, a managing director for Jones Lang LaSalle in Portland. “The majority of the buildings that have been built over the last 20 to 30 years have been getting upgrades or improvements. Most of the buildings have been traded or sold. The market has proven that by making the investment, the tenants will come and they will pay the rates to be in upgraded real estate.”

The raft of projects is characteristic of a mature real-estate cycle, analysts said. With newer office properties in desirable locations earning lease rates of $36 per square foot or more, owners of older properties are racing to catch up and hike rates to match or come close.

At the same time, tech companies want different office environments than the old-guard law and accounting firm spaces in many of Portland’s office towers. Cubicles are out, and Silicon Valley-inspired open-plan offices with foosball tables and baristas are in.

Portland’s office market saw 9 percent rent growth in 2018, according to JLL. Vacancy rose to 13.1 percent. Absorption was negative, with 306,780 square feet added to the market as office users including Wells Fargo, Jive and the Art Institute of Portland vacated office space.

First-quarter 2019 data was not yet final, but absorption for the period is expected to be slightly positive, according to JLL.

Not only older buildings are being targeted for renovations. Tanner Point, formerly known as 9North, is set to undergo a retail makeover and other interior renovations. The eight-story North Pearl District property was completed in October.

CBRE Global Investors purchased the 182,851-square-foot building from Williams & Dame Development and Global Miller Properties for $76.6 million shortly after it was delivered to market.

Kevin Kaufman, a CBRE vice president, said the investment arm underwent a “data-driven process” based on national and local trends in deciding to reposition the newly constructed building to attract tenants.

“We think that type of approach here will help Tanner Point,” he said.

For new construction, several major projects are on the way, including the office portion of the Press Blocks that will bring more than 193,000 square feet of office space to market. Also, District Office in the Central Eastside from Beam Development and Urban Development + Partners will add approximately 72,000 square feet and 7 S.E. Stark from Harsch Investment Properties will have about 70,000 square feet of leasable office space.

“There has been a tremendous push in the new construction pipeline and deliveries,” Lancaster said.

Further out, construction of the 35-story Block 216 project from Walter Bowen’s BPM Real Estate Group is expected to begin this spring or summer. The tower-and-podium project would bring approximately 167,000 square feet of office space to market.

Construction of Eleven West, another mixed-use project from Gerding Edlen Development and Downtown Development Group at Southwest 11th Avenue and Washington Street, has not begun despite design approval being given in December 2017. Eleven West would add 110,000 square feet of office space.

The ample development pipeline is causing some observers to question whether Portland’s office market can absorb all of the new space.

“There is way too much office available,” said Jordan Menashe, principal at Menashe Properties, a Portland-based property management and development company. “It is insanity.”

Menashe said there’s a mismatch between the mostly smaller prospective tenants in the marketplace and the large spaces being offered.

“It’s all the same amenities, and the same floor plate sizes, and it’s all not catering to the Portland tenant,” he said.

Yet for now, rent growth remains strong and investors keep coming. On March 15, Intercontinental Real Estate Corp of Boston announced it had acquired Heartline’s five-story office and retail building in the Pearl District totaling 72,130 square feet. The sale price was not disclosed and was not yet available in Multnomah County records.

Another major office trade is anticipated with the Bill Naito Co. expected to sell the Montgomery Park building in Northwest Portland, with 850,540 square feet, to an institutional buyer. A repositioning project could follow.

“There’s tons of institutional money out there, and it has to go somewhere,” Menashe explained. “And Portland still is affordable compared to Seattle, San Francisco, Los Angeles, downtown Denver.”

Kaufman also said he expects the office market to remain healthy.

“I don’t think we’re headed to a point – in the Portland market anyway – where you will see massive spikes in vacancy,” he said.

Lancaster said the development pipeline is poised to slow after the current round, aiding absorption of the new space.

“Our market is about slower and incremental absorption,” he said. “That will be the case as well with this round of absorption through 2020. The majority of the capital that’s invested in new construction, it’s very patient capital.”

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Beam Development is looking to build a trio of industrial office buildings to further cement the Central Eastside Industrial District‘s future as a home for creative jobs.

Beam was selected in May by Prosper Portland as preferred developer for the ODOT blocks – three parcels along Southeast Water Avenue. The Oregon Department of Transportation retains the western portion of each block.

Beam Development founder Brad Malsin and his son, fellow principal Jonathan Malsin, said they envision each block holding one building. Two would be mid-rise buildings, likely topping out at six stories. The ground floors may become hubs for light manufacturing or “maker” space, and be topped by five floors of creative office space.

Each building would include up to 5,000 square feet of ground-floor retail space, likely for food and beverage. Each building is allowed to have up to 5,000 square feet of traditional office space, according to zoning under the proposed Central City 2035 plan; the City Council is slated to adopt the plan this week.

The middle building may include structured parking that could be owned by Prosper Portland, although plans for the ODOT blocks are in an early stage.

“We feel there’s that opportunity to work to the benefit of the city, to the benefit of the district, to the benefit of the businesses and the community at large,” Brad Malsin said.

Developers are flooding the Portland market with office space in response to strong employment growth. Construction crews were building more than 1 million square feet of offices during the first quarter of 2018, according to Jones Lang LaSalle. And new proposals keep coming, such as Platform – planned as a half-block building with seven stories of offices. That project from local developer Project^ recently received rave reviews in its debut before the Portland Design Commission. Meanwhile, Intrinsic Ventures of California envisions two potential creative-office buildings for the Lower Division neighborhood.

Rents for new construction have risen and pre-leasing has been strong. The Towne Storage building, converted into offices via an adaptive reuse project, fetched a local record $630 per square foot when it sold in April to CBRE Global Investors.

Beam Development will look to lease space in the ODOT blocks to a mix of large and small companies, the executives said. The firm hopes to lease the space to employers, and perhaps avoid adding to the surge of co-working space from fast-growing chains such as WeWork and CENTRL.

Beam seeks to differentiate from other office projects being delivered, Jonathan Malsin said. Industrial or manufacturing space could give users access to lab equipment or machinery.

Parking will play a major role in ODOT blocks development. Prosper Portland, in its request for proposals, asked for twice as much parking as office space. Beam’s proposal falls short of that, but the developer is looking to contribute a significant number of spaces.

“We are motivated to try to solve some of the parking constraints in the district at large,” Brad Malsin said. “I can’t tell you how many spots we’re going to be able to offer and what’s going to make sense, but we certainly want to address the fact that there’s a major parking shortage for the foreseeable future.”

Hacker and Mackenzie are on board to design the project. Colas Construction will serve as general contractor. It’s possible the three buildings will be built in phases, Jonathan Malsin said.

The buildings may be designed with mass-timber frames and concrete diaphragms and cores, he said.

The blocks are along Water Avenue between Taylor and Madison streets. The developable parcels are 34,809 square feet, 34,862 square feet and 25,601 square feet, respectively.

Prosper Portland paid $2.485 million for the ODOT blocks. ODOT acquired the properties decades ago as part of the right of way for Interstate 5. The state agency will retain those portions of the property for the foreseeable future, a spokesman said.

ODOT considers the site useful for managing water runoff from I-5. And it could come in handy if the agency at some later date decides to widen I-5.

“That’s always a possibility,” ODOT spokesman Don Hamilton said. “There’s nothing in the works on that right now.”

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