The new owner of the defunct Concordia University campus plans to resell the property.

The Lutheran Church Extension Fund, which purchased the property June 29, has enlisted an agent, Mike Holzgang, executive vice president at Colliers International in Portland, to work alongside Foundry Commercial to market and sell the real estate.

The fund purchased the property for $3 million at a Multnomah County foreclosure auction, OPB reported. The fund is a nonprofit that supports the Lutheran Church–Missouri Synod’s workers, congregations and organizations.

Concordia closed in spring 2020 amid a raft of financial and legal problems. The campus was founded in 1905.

The property occupies 24 acres in Northeast Portland between Dekum and Holman streets and 27th and 30th avenues.

Potential uses of the property are limited by its campus institution zoning. Education and medical centers are among the allowed uses, with height limits up to 75 feet with no bonuses available, Portland city planner Tom Armstrong stated in an email.

The property is most likely to go to an institutional buyer, Holzgang said.

“It’s campus institutional zoning, so the primary focus is for other universities, colleges and the like that would have an interest,” he said.

The property includes more than 300,000 square feet of buildings and an athletics field. The area has a large footprint within Portland’s urban growth boundary, Holzgang said.

Holzgang would not disclose a price, saying that’s a discussion to be had with prospective buyers.

“It’s a one-of-a-kind property,” he said.

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International construction firm Skanska USA Building has announced it will move its Portland headquarters to the Pearl District.

The company has leased slightly more than 21,000 square feet spread over two floors in a refurbished building at 1010 N.W. Flanders St. It opened in 1922 and now is listed on the National Register of Historic Places.

“Skanska’s long-term commitment to 1010 Northwest Flanders shows the significant interest from best-in-class companies in the loft-style space we have created to meet growing tenant demand in the Pearl District,” Aaron Duncan, senior vice president and head of western investments at ASB Real Estate Investments, stated in a press release.

According to Debbie Hutchins, Skanska USA Building senior director of business development, business operations will physically transition to the new space once tenant improvement work is completed in April 2020.

The 60,000-square-foot building was formerly known as the Ballou & Wright Company Building and originally served as a manufacturing facility for bicycle, motorcycle and automobile parts. It features a distinctive brick façade with timber and concrete construction and flexible 10,000-square-foot floor plates. Floors have ceilings 11 to 14 feet high, hardwood floors and industrial-size windows to let in substantial natural light.

ASB and Specht Properties carried out a $10 million refurbishment of the building. Crews created a 2,500-square-foot rooftop deck with bike storage and locker/storage facilities. Fortis Construction served as general contractor for the project, which was designed by Mackenzie and completed in 2017.

Trevor Kafoury, Al Kennedy and Carlo Castoro of CBRE represented ownership in the transaction. Brad Christiansen and Mike Holzgang of Colliers International represented Skanska.

Editor’s note: This story has been corrected from an earlier version, which indicated Skanska USA Building had already moved into the space.

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Portland industrial developer Specht has gained a major tenant for its Vista Logistics Park in Gresham.

Medline Industries Inc. has agreed to take 297,501 square feet at the newly constructed, 37-acre industrial development. That will leave Vista with 435,731 square feet available, divisible down to approximately 37,000 square feet.

Medline is the nation’s largest privately held medical supplies manufacturer and distributor. The company’s move to Gresham gives Specht’s joint venture with New York Life Real Estate Investors, Madison-Specht Vista Logistics LLC, a key tenant.

The development was built on speculation as distributors have sought to snap up limited warehouse inventory.

Medline was represented in the transaction by Tyler Shiels of Jones Lang LaSalle and Michael Morgan of Colliers International. Madison-Specht Vista Logistics LLC was represented by Dave Ellis, Don Ossey and Tom Knecht of Capacity Commercial Group.

Demand for industrial space in Portland has been strong, with 2.2 million square feet leased during the second quarter, according to JLL. Leases of new construction have gone for 50 cents to 60 cents per square foot per month on a triple-net basis, with office surcharges of 90 cents to 95 cents per square foot, the research group reported.

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Bremik Construction is putting the finishing touches on a new four-story mixed-use building at North Williams Avenue and Mason Street, in Portland’s Boise neighborhood. The Silica contains three stories of leasable open office space over ground-floor retail space and an at-grade parking garage. The project was developed by Ruben J. Menashe Inc., and was designed by William Kaven Architecture.

The concrete and heavy timber structure consists of a concrete podium up to the second level, two concrete cores, and upper floors framed with glulam beams and three-by-six car decking with a concrete topping slab. Bremik self-performed the timber framing and the concrete work on the building, which features multiple board-formed concrete walls. A curtain wall skin allows ample light penetration into the office spaces, which have floor-to-floor heights of about 13 feet.

The top two floors measure approximately 9,000 rentable square feet, while the second level has about 10,500 rentable square feet and a 700-square-foot outdoor terrace. Each of the upper floors contains a 329-square-foot balcony with large sliding doors. The building’s ground floor contains five retail spaces totaling around 4,500 square feet and a parking garage with a 13-car stacker and seven surface spaces. There are multiple racks for bicycle storage, and each of the office floors has a shower room.

KPFF Consulting Engineers handled structural and civil engineering, and Shapiro Didway served as the landscape architect. Colliers International is the broker of the office space, and Urban Works Real Estate is representing the building’s retail component.

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A manufactured-homes development in Eugene has sold for $10.4 million, or $102,000 per pad – a record for that asset class in the Northwest, according to the firm that brokered the deal.

The transaction’s capitalization rate was 4 percent, according to the Colliers International Portland multifamily advisory team of Vice President Skip Rotticci and associates Alexander Cheng and Kenneth Verbeck.

The asset, Summer Oaks, has 102 manufactured homes on 21.8 acres. The 55-and-older community at 3220 Crescent Ave. in Eugene is near Interstate 5 and Beltline Road, several miles north of the University of Oregon campus.

The Colliers team represented the buyer, FollettUSA, and the seller, Zacorn LLC.

FollettUSA, based in Sacramento, California, is a manufactured-homes developer that owns 6,000 units in 10 states. Its only other Oregon property is Santiago Estates, a 250-unit manufactured-homes community in Springfield.

Zacorn LLC, registered in 1996, is a local partnership with three members and a registered agent with addresses listed in Eugene. Zacorn used a “like-kind” exchange under Internal Revenue Code Section 1031 to invest in a market-rate multifamily development.

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Commercial real estate company Norris, Beggs & Simpson announced last week that it is selling its brokerage division and phasing out of property management. The brokerage division is being sold to Colliers International for an undisclosed price.

Jan Robertson, chief operating officer for NBS, said since property management as such cannot be sold, over the next six months owners will be given the option to also go with Colliers or select another company.

The decision to sell the brokerage division will not result in any layoffs, Robertson said, and “99 percent” of NBS’ brokerage employees have opted to work for Colliers.

The move will give the brokers a better deal by giving them access to Colliers’ national platform, Robertson said.

“National platforms are able to get more leverage with other cities,” she said. “We are looking for the best platform for our brokers and individually giving them something where their business can compete with other brokerage houses. We are so proud of giving them that opportunity and Colliers struck us as the best opportunity for them.”

The company is now reorganized into two wholly-owned subsidiaries, Norris, Beggs & Simpson Financial Services, a third-party lender mortgage banker, and Morrison Street Capital, a private investment manager.

Looking to future growth of NBS and ensuring the company’s succession are two reasons for the change, Robertson said.

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The supply-and-demand principle is in full effect for office space in the Portland-metro area and throughout the nation, according to third-quarter market reports from Colliers International‘s Portland office. The constrained supply of space is expected to remain an issue in the future.

“There have been announcements of a number of properties that are mostly infill and small” exchanging hands, Colliers senior vice president Mike Holzgang said, noting that low interest rates are encouraging transactions. “Despite the fact that there’s a lot of money available for well-conceived projects, they’re much smaller. There’s not as big of an appetite for risk after the financial crisis that we experienced.”

Holzgang said that how supply and demand for office space will play out in the future is “the question of the day.” He performed a study for one of his clients and found that from April 2013 to April 2014, rental rates for top-tier office space jumped 16.57 percent. He believes that rental rates will continue to rise, though probably closer to 5 percent annually.

“It will be a smaller growth, but significant growth nonetheless,” he said. “A five percent rental growth is significant because it constrains supply.”

Portland is in the second year of a 10-year period during which experts have predicted 1 million new residents. Holzgang believes that could cause problems.

“The biggest concern I have is infrastructure in the urban areas,” he said. “People are moving to Gresham and Vancouver, (Washington) because that’s where the affordable housing is. But a lot of them are working in the urban environments in the Greater Portland area.”

Meanwhile, according to Colliers International’s midyear U.S. Capital Flows research report, commercial property investment in the U.S. was up 38 percent year-over-year, but down quarter-over-quarter because of dwindling quality supply. Investors are still finding deals in select markets. In Portland, sales volume in the third quarter alone was $680 million, largely because the U.S. Bancorp Tower and Block 300 both sold.

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The Northwest Evaluation Association, a nonprofit founded nearly 40 years ago, began renting the Everett Building in downtown Portland in December 2010. On Wednesday, the organization – like some people as they approach 40 – took the plunge and became an owner.

The NWEA bought the seven-story, 108,448-square-foot Everett Building, at 121 N.W. Everett St., from Washington Holdings for $47.5 million. KeyBank financed the purchase through a tax-exempt government bond.

The purchase will let the NWEA build equity as well as reduce its occupancy costs over time. Ownership also will provide the nonprofit greater stability and control over its expenses.

“As is appropriate for a not-for-profit, we want to be very, very careful and judicious stewards of the resources entrusted to us,” NWEA President and CEO Matt Chapman said.

The Everett Building has a Leadership in Energy & Environmental Design gold rating and Sustainability at Work gold certification. The building features four floors of open workspace, extensive conference rooms, and 1,000 linear feet of whiteboards.

The Everett Building’s open floor plan is critical, Chapman said.

“One of our organizational values is teamwork,” he said. “It’s a lot easier to work as a team if you have personal communications ongoing. The other thing that’s very important to recognize is we have a wide variety of disciplines represented within the organization. Those people need to be able to communicate with each other and we need to cross disciplines. All of that is enhanced and facilitated by an open office environment where people are communicating with each other, in part, because they just see each other walking around.”

One of the Everett Building’s key amenities is its sweeping views of the Willamette River, four bridges and three mountains. The structure has an outdoor balcony, a coffee bar on each floor, a fitness room, a pingpong room, a lunchroom, lockers, bicycle parking and electric vehicle charging stations.

“Educators need to be treated with respect,” Chapman said. “That’s one of the things this building allows us to do.”

The NWEA also relies on the Everett Building’s location.

“The location of the building gives us the ability to recruit,” Chapman said. “By virtue of being downtown and with the strength of the mass transit system, we’re able to draw potential employees from all of the areas around us, whether it’s from Vancouver, Gresham, Hillsboro, Wilsonville or Tigard. All of those employees, together with the people who live in the city of Portland itself, are available to us with very good transportation to be able to get into the city.”

The NWEA was represented in the transaction by Colliers International Senior Vice President Mike Holzgang, who has worked with Chapman on commercial real estate transactions for more than 28 years, and Colliers Vice President Brad Christiansen. Holzgang and Christiansen helped the NWEA relocate from Lake Oswego in 2010.

When the NWEA made the move, it had 300 employees. Now the organization has 650, including 450 in the Portland area. The Everett Building will allow the NWEA to grow even larger, Chapman said.

“Because we use an open environment rather than private offices, it allows us to move things around and make it pretty easy as we add personnel to the building,” he said. “We think this will be sufficient space for quite a long time.”

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Developers of a Northeast Portland industrial project have applied to the city for building permits to begin the second phase of construction.

Capstone Partners LLC is planning to add a 355,200-square-foot warehouse to the existing PDX Logistics Center near Portland International Airport.

The warehouse is being built completely on speculation; however, Paul Breuer, a senior vice president at Colliers International and one of the brokers for the project, said he expects space to fill quickly.

“We have expressions of interest from tenants who say that the timing on delivery would be right for them,” he said.

If construction goes as scheduled, Breuer expects delivery by March 2016.

As planned, the building would add to two others – approximately 490,000 total square feet – that Capstone Partners began developing in 2013. Breuer said the smaller of the two buildings – 108,000 square feet – is fully leased, but not 100 percent occupied. The larger building – about 380,000 square feet of rentable space – has vacancies.

“We don’t have any signed leases yet, but we have a lot of activity,” he said. “If I had to make a projection, I’d say we’ll have half the building leased within the next 90 days.”

Vacancy rates for industrial space in the Portland area have fallen to 5 percent, Breuer said, so tenants looking for space – especially larger chunks – are largely unable to find what they need.

“There is not enough building space to accommodate the activity in Portland that we’re going to see in 2015 and into 2016,” he said. “Vacancy equilibrium is reached when the rate is somewhere north of 6.5 percent, and we still won’t reach that even with the additional space from PDX Logistics Center.”

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Technology companies are continuing to expand in Portland, taking up limited office space and driving up rents, according to a third-quarter market report released last week by Jones Lang LaSalle.

“Office vacancy in Portland is at 10 percent – the lowest it’s been since 2000,” said Patricia Raicht, JLL‘s vice president of research. “Tech demand continues to dominate our office leasing activity with tech occupiers making up more than 30 percent of all office demand, up from just 14 percent in 2011.”

According to data from Greater Portland Inc., Portland has 86,000 high-tech workers. That’s 30 percent more than the national average.

Raicht said limited supply is driving up rents in the Central Business District. Overall, office space rents are up 3.7 percent year over year, and specific submarkets have experienced increases significantly greater.

“Developers and occupiers (are) finding unique and creative ways to meet their space needs,” JLL Senior Vice President Eric Haskins said. “Owners are repositioning their buildings with amenities and features desired by tech tenants – they want a rich amenity set.”

Some of those amenities, Haskins said, are updated lobbies, athletic facilities and showers, bike parking, outdoor spaces and a strong component of sustainability.

Owners are not only remodeling office spaces, but also increasing new construction in the Portland area, Raicht said.

“There is now 780,000 square feet under construction, and we expect 400,000 square feet to deliver to the market in 2014,” she said.

Brad Christiansen, a Colliers International vice president, said he believes that a combination of affordability, an educated workforce and Portland’s culture are drawing companies to open offices in the area.

“On a macro level all the things our leadership program began promoting years ago – smart urban growth, good quality of life, emphasis on education – are all in alignment with what millennials value,” he said. “It’s a unique dynamic that we have an alignment between the culture here combined with a lower cost of living and an educated workforce that we didn’t have 15 years ago.”

Christiansen said larger tech companies are looking to Portland rather than Seattle or San Francisco in part because though rents are on the rise, they’re still far less than in either of those cities. Not only is office space more affordable, but apartments are too, comparatively.

“I’m hearing from companies that when they’re opening an office here they’re internally having a portion of their employee base ask for a transfer (here),” Christiansen said. “I see the trend of tech companies coming to Portland continuing as the cost of doing business continues to go up.”

When companies look to open an office in Portland they’re able to hire well-educated, high-quality people at a fraction of the salary they’d have to pay in a larger market, Christiansen said.

“They come here and they see the proximity to schools like Portland State (University), which has one of the top graphic design programs in the country, or Pacific University,” he said. “There’s Oregon State (University), where they have great mechanical and structural engineering programs. Those skills are transferable to the tech industry.”

Paige Morgan, a senior vice president at JLL, said her firm is seeing institutional and even foreign interest in Portland’s real estate market increase.

“Interest in Portland as an investment market has increased dramatically in the past several years with buyer pools deepening,” she said. “Two things are driving this increased interest; the first is the flood of capital that is being priced out of primary markets, and the second is our solid and improving market fundamentals.”

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