A San Diego-based real estate investor has purchased a 566-unit multifamily property in Beaverton for $186 million.

The off-market transaction netted MG Properties Group the Pallas Townhomes and Apartments. The seller was a joint venture partnership of Holland Partner Group and Invesco Real Estate.

Built in 1997, Pallas Townhomes & Apartments is located at 15021 S.W. Millikan Way in Beaverton. The property is near the Millikan Way MAX light-rail stop, and about a mile from Nike World Headquarters.

MG Properties Group plans to renovate the units’ interiors, the company stated in a news release.

Neither the buyer nor the seller was represented by a broker. Financing was provided by Fannie Mae and arranged by Brian Eisendrath and Cameron Chalfant of CBRE.

MG Properties Group also recently purchased Tivalli Apartments, a 383-unit apartment property located in Lynnwood, Washington, for $119.2 million.

“These acquisitions reflect our continued belief in the economic potential of the Pacific Northwest and allow MG Properties Group to further create economies of scale to enhance the performance of our existing regional portfolio,” company CEO Mark Gleiberman stated.

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Holland Partner Group of Vancouver, Washington, has broken ground on 324 apartments at Reed’s Crossing, the massive mixed-use development getting under way in south Hillsboro.

The multifamily portion consists of 14 garden-style buildings. The units will have from one to four bedrooms each. Also planned is a clubhouse with amenities including a pool, a lounge, and indoor and outdoor kitchens.

The development will provide “diverse housing options” to address the city’s housing shortage, Brenner Daniels, Holland’s managing director in Oregon and Southwest Washington, stated in a news release.

Newland Communities is the master developer of the 463-acre area in Hillsboro. In December, Lennar Corp., based in Miami, and Stone Bridge Homes NW of Lake Oswego were announced as the first homebuilders for Reed’s Crossing. Plans for the first phase call for 300 single-family homes.

Reed’s Crossing is expected to eventually include 3,000 housing units ranging from small apartments and condominiums to large single-family homes.

The development will also have a town center with a mix of commercial and residential uses, at least three schools and a 23-acre greenway corridor with wetlands and trails.

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Politicians, economists, housing advocates and developers have come to a broad agreement that more housing is needed in Oregon. A new report from ECONorthwest attempts to measure the scope of the problem.

The state underbuilt by 155,000 housing units from 2000 to 2015, according to the report. If that number of homes were built in Oregon during the next 20 years, home prices would be 5.5 percent lower than if the homes were not built, the report found.

“Oregon is seriously behind … providing housing at all levels of affordability,” Mayor Ted Wheeler said at an event Tuesday to mark the report’s release. “This report shows we have a lot of work to do.”

Wheeler called the report “very depressing” in its depiction of the housing deficit.

The report recommends employing some of the strategies the city of Portland already is, including promotion of so-called “middle” housing such as duplexes and accessory dwelling units (ADUs).

Other recommendations include:

• changing impact fees to be based on a per-acre or per-square-foot basis, instead of per unit (this would improve the feasibility of high-density projects, the report stated);
• holding cities accountable to meeting existing permitting timelines and clear and objective development approval standards; and
• allowing high-density zoning near high-capacity transit station areas.

“We need a Marshall Plan for housing,” said Mike Kingsella, an author of the report and executive director of Oregon LOCUS, a trade group for developers.

Local governments would garner a $13 billion net benefit if the 155,000 units were built, based on projections of property taxes, system development charges and other revenue sources, said Michael Wilkerson, an economist and partner at ECONorthwest.

Joe Cortright, director of CityLab, questioned the underlying assumption that more housing of any type is needed. Too many large, suburban homes are sitting with empty bedrooms, he said.

“I don’t think we face a shortage of housing so much as a shortage of cities and great urban neighborhoods,” he said. “Big, single-family houses in the suburbs are not meeting the housing needs of people who are more interested in living in urban neighborhoods.”

The report’s release came three weeks before the Nov. 6 election, when Portland-area voters will decide the fate of Metro’s $653 million housing bond measure. Also, Measure 102, a statewide bid, would allow affordable housing projects to mix private and public funding.

Both measures would help address the dire need for affordable housing, advocates said.

“I really, truly, deeply believe that we can solve this problem together,” said Alison McIntosh, deputy director at Neighborhood Partnerships, a Portland-based nonprofit.

The report is part of Up for Growth Oregon, a pro-housing group that includes developers such as BRIDGE Housing, Cairn Pacific, Holland Partner Group and nonprofits such as 1,000 Friends of Oregon and Oregon Smart Growth.

The group demonstrates developers and housing advocates such as McIntosh can find common ground, said Noel Johnson, principal at Cairn Pacific.

“At the end of the day, her goals are my goals,” he said. “The question is how to achieve it.”

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Axcess 15, a mixed-use property with 202 apartments in Portland’s Lloyd area, has sold for $66 million.

The buyer was MG Properties Group, a San Diego-based real estate company that develops, acquires and manages multifamily properties.

Holliday Fenoglio Fowler (HFF) represented the seller, Waterton, a Chicago-based real estate investment firm, and attracted the buyer. HFF also helped secure a loan through Freddie Mac’s Capital Markets Execution program.

Axcess 15, at 1500 N.E. 15th Ave., is near the Lloyd Center mall and other amenities. The four- and five-story property includes a mix of one- and two-bedroom apartments averaging 851 square feet. The property also has 18,000 square feet of ground-floor retail space, which is fully leased.

Axcess 15 last traded in 2012, when Holland Partners sold the property to Waterton for $48.63 million. The mid-rise development was built in 1990.

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The 16^th and final concrete deck has been poured at the top of the Holland Partner Group’s new 174-foot mixed-use tower at Northwest 14^th Avenue and Glisan Street in Portland’s Pearl District.

Crews from LaRusso Concrete smoothed the surface of the wet concrete, marking the topping out of yet another mixed-use high-rise building in Portland. The building will feature 230 apartments, 20 percent of which will be marketed as affordable housing, as well as at-grade retail space and four levels of underground parking.

Developed and built by Holland Partner Group of Vancouver, the $80-million tower will be the latest addition to the Pearl at a time when similar projects are coming online at a dizzying pace.

The project team also includes Ankrom Moisan Architects of Portland and Cary Kopcynski and Co. Structural Engineers of Bellevue, Washington.

Early on, Holland Partner Group decided it would utilize Portland’s Multiple-Unit Limited Tax Exemption (MULTE) program to make a percentage of the building’s apartments available to people making up to 80 percent of the area median family income. In return, the developer gets a 10-year property-tax exemption for those affordable units.

Doug Burges is a senior development manager with Holland Partner Group. He said the ground-floor commercial space will be used for restaurant or retail tenants that are consistent with the surrounding neighborhood, which already includes a number of similar high-rise residential towers as well as several other buildings in various stages of development.

The residential units in the Holland Partner Group building will be split among 44 studio units, and 146 one-bedroom and 40 two-bedroom apartments.  Burges said the building also will feature a roof-top sky lounge for residents to enjoy.

The new tower was built with cast in place post-tensioned concrete. Exterior cladding features Equitone panels, brick veneer, composite metal panels, aluminum storefront glazing, and opaque canopies made from steel plates.

Issac Johnson, principal-in-charge for Ankrom Moisan Architects, said the materials used help reflect the heritage of Portland’s earlier buildings.

“Our goal is to recollect the heritage of concrete buildings that are prevalent at the west edge of the Pearl District, while adding a fresh and modern voice,” Johnson said.

Construction is expected to be complete later this fall and the building should be open to new residents sometime in the first quarter of 2019.

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Work is under way to erect a mixed-use high-rise that will be one of the tallest buildings in the Pearl District. Holland Partner Group earlier this month held a ceremonial ground-breaking event at the construction site at Northwest 14th Avenue and Glisan Street. Currently, crews are excavating to create space for a three-story underground parking garage with space for 206 motor vehicles.

“We are kind of lucky with weather,” said Doug Burges, development manager for Holland Partner Group. “It’s kind of perfect. We will be in concrete right before the rainy season. (Rain) could cause all kinds of issues.”

The development team is still trying to come up with a name for the building. What is certain is that it will include ground-floor retail space, residential units and a roof-top community room and terrace.

Holland Partner Group will take advantage of Portland’s Multiple-Unit Limited Tax Exemption (MULTE) program. It provides developers a 10-year property tax exemption for projects’ housing units that are affordable for people at 80 percent of median family income.

“We are excited to deliver these units to the Pearl,” Burges said.

According to project plans, 46 of the building’s 244 residential units will qualify for participation in the MULTE program. The tower will provide some of the few affordable units in one of Portland’s trendiest and most expensive areas.

“We wanted to try to do our part (to address the affordable housing issue in Portland),” Burges said. “We talked to our investors and wanted to do it if it made sense.”

The project has changed significantly during navigation of Portland’s permitting and design processes.

Originally, developers had hoped to retain a food cart pod near the site; however, the plan was scrapped in favor of a small park. That elicited concern from design commissioners, including Julie Livingston; she said the park could become “a great place to sleep, camp and shoot up,” the 91��Ƶ reported in August 2016.

Planners took steps to attenuate sound emanating from the park. The green space won’t be a problem for the neighborhood, Burges said.

“It’s more of like a pocket park,” he said. “There will be more plantings and benches. It will be a nice amenity.”

Another change was the elimination of a bike share station that had been considered. The Portland Bureau of Transportation “didn’t want to do the bike share there,” Burges said.

So far, the project is on schedule. The development team expects to open the $80 million building in the first quarter of 2019, after 21 months of construction.

“So far, we haven’t run into any surprises,” Burges said. “With our timing, it’s kind of perfect.”

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A plan to construct a seven-story, 82-foot-tall mixed-use building at the corner of Northwest 17th Avenue and Pettygrove Street is on the verge of moving forward.

Three of the five Portland Design Commission members present at a hearing on Thursday appeared to be willing to approve the design submitted for the project at 1331 N.W. 17th Ave. The other two commissioners indicated that they could approve it with some changes.

“We hoped we addressed the commission’s comments,” said Agustin Enriquez, an architect with GBD Architects. “We feel this version made the building more interesting.”

The problem was that the version presented to the Design Commission wasn’t the version that city staff recommended be denied. The design team submitted the final version too late for city staff to revise its report, so a new one will have to be created. That will require the team to make another trip before the commission.

“We are highly motivated to resolve the project and move forward and get into construction,” Enriquez said.

The project will have 196 residential units and take up three-quarters of a block. It will have a floor area ratio of 6:1. The developer, Holland Partner Group, will take advantage of the Multiple-Unit Limited Tax Exemption (MULTE) program, meaning 20 percent of units will be affordable for people making 80 percent of the median family income. MULTE projects receive a 10-year property tax exemption on structural improvements as long as program requirements are met.

Plans call for 97 underground parking spaces, 22 surface parking spaces and 180 bicycle parking spaces.

Commissioners complimented the color scheme intended to brighten a building that was deemed too dark during a Feb. 2 hearing. Designers also accentuated ground-floor amenities and changed the kind of brick to one with a shimmering quality when hit by sunlight.

“I really like the front porch element,” Commissioner Andrew Clarke said. “I like the contrast between the white and dark brick, especially if the dark brick has some more personality with the way the light hits it. I think it meets the guidelines better.”

Two commissioners, however, took issue with the center part of the building’s bay window design, the projections at the periphery of the building, and garage areas and art panels proposed for the building. However, one of them, Vice Chairman Tad Savinar, praised the design moves that the designers made.

“The building is moving toward a much more contemporary building,” he said.

Meanwhile, Commissioner Don Vallaster said he believes the ground level is improved, but upper floors need more work.

“They changed materials, but they haven’t changed the composition,” he said. “The composition was a little clumsy in some places with and it is still a little clumsy. There is activity without a real sense of meaning to it.”

The designers are hoping to make some quick modifications and return before the council on March 16.

“We are going to look at some things they mentioned,” Enriquez said. “If they are better, we will use them and if not we will tell them we tried it and it didn’t work.”

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Portland developers are working feverishly to get ahead of inclusionary zoning regulations the City Council is expected to adopt this fall.

The state law that lifts a ban on municipal requirements for affordable housing creates an incentive for developers to move quickly: Any project for which a permit application has been granted will be grandfathered in.

For developers, that means entering the planning process this summer or early fall will save them from the headaches of wrestling with regulations whose shape remains uncertain. It also means the early birds won’t have to include units that produce lower revenue amid pressure to provide housing for lower-income Portlanders.

The Bureau of Development Services is working to avoid a logjam later this year, spokesman Ross Caron said. The agency plans to hire 23 more staffers to deal with the expected rush of applications on top of an already busy development pipeline.

“Over the next several months, as we hire and train new staff, we should be able to manage any increase in workload created by the inclusionary zoning changes,” Caron said in an email.

As city officials move toward enacting inclusionary zoning by the end of the year, developers are working to get ahead of it.

Cairn Pacific plans to apply this summer for permits to redevelop the George Morlan Plumbing building, at 2222 N.W. Raleigh St., as part of a dramatic makeover of the Slabtown neighborhood. But the developer doesn’t expect to begin construction this fall.

“We’re going to go through entitlements this summer while we have certainty on what the code is,” Cairn Pacific principal Tom DiChiara said.

In effect, Cairn Pacific stands to rack up predevelopment costs for a project that won’t go vertical anytime soon.

DiChiara and other developers fear that if the inclusionary zoning regulations are heavy-handed, profitability will suffer. If that happens, fewer projects will get built, and housing supply will remain restricted, according to developers.

“It’s a margin business,” DiChiara said. “Despite the economy, margins are thinner than they have been. If some of the worst predictions come through, it will have a pretty chilling effect on development.”

The key to addressing Portland’s housing emergency is to keep building to meet demand, DiChiara said.

“Supply is the answer to affordability in Portland,” he said.

The impending regulations add an unknown variable to projects at a time of increasing costs for land and properties. That has some developers pushing projects up and others waiting.

“Nobody knows what’s going to happen,” said Sam Rodriguez, senior managing director at Mill Creek Residential Trust. ”Everybody’s either accelerating their projects to get them in before, or not going into projects before they know what it is. There probably will be a slowdown in the pipeline until there’s more information.”

City officials said they’re working with industry experts and analysts to ensure the regulations don’t halt housing development.

“We need to make sure that however inclusionary zoning works, the market works,” said Shannon Callahan, housing policy director for Portland Commissioner Dan Saltzman. “We want these units to actually get built.”

The city has hired David Rosen and Associates of New Haven, Connecticut, and local firm ECONorthwest, to analyze the economic effects of various affordable housing regulations. The goal is to make sure the regulations don’t put the brakes on development, Callahan said.

The Portland Housing Bureau and Saltzman are considering how to shape the regulations, in consultation with the economic firms and a panel of 13 local developers, architects and public officials convened by Saltzman.

The inclusionary zoning panel includes prominent developers such as Dike Dame of Williams & Dame and Gregory Goodman of Downtown Development Group. It also includes representatives of the Portland Housing Bureau and various nonprofits. Architects are on the panel too, including Nolan Lienhart, director of planning and urban design at ZGF Architects.

“We’re essentially using them as a sounding board,” Callahan said.

The committee is hearing from developers to keep it simple.

“Overarchingly, folks would say the simpler it is for the development community to understand, the better,” Callahan said.

The inclusionary zoning regulations are likely to be placed in the city’s zoning code, Callahan said. The Planning and Sustainability Commission is slated to consider the zoning changes in early September. The City Council would then ultimately decide whether to approve them.

Meanwhile, the City Council on Thursday was set to consider enacting a construction excise tax that would fund future affordable housing projects.

Saltzman lobbied the state Legislature to pass the bill allowing for municipalities to regulate inclusionary zoning and create an excise tax; Gov. Kate Brown signed it into law in March. Saltzman is championing the regulations on the City Council.

“He definitely wants to take advantage of the opportunity to bring inclusionary zoning to Portland as soon as we can, and we expect to have that done by the end of the year,” Callahan said.

The state law lays out the boundaries for inclusionary zoning in Portland. Any new rules would apply only to projects of at least 20 units. No more than 20 percent of units can be required to be rented or sold as affordable housing, tied to 80 percent of the area median income.

Developers are also keenly interested in what incentives Portland will offer. The state law requires cities to offer developers at least one from a menu of incentives to compensate for including affordable units.

These incentives can include full or partial property tax exemptions, fee waivers, density allowances, expedited permitting and additional height. Also, developers may pay a fee in lieu of building affordable units.

Dennis Allen, managing director of Holland Partner Group, said he would like to see the city of Portland offer property tax waivers. Holland was able to greatly increase the density of its Orenco Station project in Hillsboro after earning a “vertical housing” tax exemption, he said.

The tax break enabled Holland to build more expensive structured parking instead of surface parking. That freed up space for additional housing units.

“What really happened is we were able to do a more dense product,” Allen said. “We tripled the units that we were doing there.”

Local governments recoup the property tax revenue later, Allen said.

“After that tax break expires, the city of Hillsboro will have triple the amount of property tax revenue,” he said. “It’s kind of like found money. They could take that incremental revenue and use that to fund affordable housing.”

Saltzman’s committee is looking at the experiences of other cities that have enacted inclusionary zoning regulations. Allen said inclusionary zoning has proved to be only modestly successful elsewhere.

“If you study the cities that have mandatory inclusionary zoning, there really aren’t any of them that have built more than a couple of hundred units a year,” he said. “We need to do better. A couple of hundred units a year isn’t sufficient. We need a couple of thousand units.”

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At the second design advice hearing for a proposed 15-story apartment building in the Pearl District, it became apparent that the project is likely to be approved when it comes back before the Portland Design Commission.

The project, designed by Ankrom Moisan Architects and owned by the Holland Partner Group, has gone through an intense design process since its previous hearing before the commission in January. Ankrom Moisan managing principal Isaac Johnson on Thursday showed commissioners many different designs that were considered to reflect their recommendations.

“We came in really early (with the first advice hearing) and I’m glad we did because it’s a much better product,” he said.

Commissioners spent about two hours discussing different aspects of the changes, but in the end indicated that the building was close to meeting their standards.

But problems still must be resolved. At the previous meeting, commissioners had urged the designers to “step down” the building on the east side in deference to the Northwest 13th Avenue Historic District nearby. The new design showed the building’s east side set back by 7 feet starting at the seventh floor.

Commission Chairman David Wark expressed concern about the setback and other aspects.

“I’m not sure that seven-foot setback is enough toward the historic district,” he said. “The composition is clearer on the tower, but on the lower section the percentage of glass needs to be bumped up. Something about it isn’t working yet, not that it couldn’t work.”

Later in the meeting Wark said other setbacks could possibly be reduced and the seventh-floor setback could be as much as 14 feet.

During the design process, Johnson said attempts were made to consider the traditional warehouse buildings on the edge of the Pearl District, but noted that other buildings in the neighborhood range from traditional to very modern.

“We don’t want a post-modern interpretation but to have a building that fits into the neighborhood,” he said. “The taller (portion of the) building to the west is by the freeway and steps down to the historic district to the east.”

Johnson said the new design presents a lighter skin material – one not finalized yet. While exploring possible skin types, fiber-reinforced concrete panels and brick were considered, he said.

Another change was the addition of bright yellow as a spot color on the rooftop and possibly other points on the building; however, it drew criticism. Wark read a letter from Commissioner Tad Savinar, who could not attend the meeting. The letter stated, in part, “Adding cutesy colors does not work in architecture.”

Also, a request was made for 30 additional feet of height to bring the building to 175 feet, city planner Staci Monroe said, but to allow it, commissioners would need to see “a great piece of architecture.”

But commissioners seemed pleased with one proposed change: transforming a 4,350-square-foot parking lot next to the building at Northwest Glisan Street and 15th Avenue into a small parklet with an artistic divider wall, benches, a bike-share station and possibly food carts.

Kurt Lango of Lango Hansen Landscape Architects, told commissioners that the Portland Bureau of Transportation showed interest in locating a bike share station at the park, and the Pearl District Neighborhood Association likes the idea.

“This seems like an important give-back to the neighborhood,” Commissioner Julie Livingston said.

The neighborhood doesn’t have many pocket parks, Lango said, and the addition of bike sharing could lead to other uses.

“It should be a site that evolves over time,” Commissioner Don Vallaster said. “I think the way you’ve done it with the wall and these different possibilities is great.”

The project, on the northern half of Block 98 at 1402-1430 N.W. Glisan St., will have approximately 240 residential units and 6,400 square feet of retail space. Three below-grade levels will provide 200 parking spots. The project has a floor area ratio (FAR) of 6:1 with the potential for 9:1, some of which could be transferred from the buildable part of the parking lot.

A rooftop balcony is also planned with a glassed-in common room and outdoor seating.

“I think it’s really close,” Commissioner Jeff Simpson said.

“I agree and think you’re almost there,” Livingston said. “And I won’t have any trouble approving the additional height.”

At the end of the meeting, Johnson asked whether he should schedule another advice hearing or come back for design review.

Livingston said he should go straight to review.

“I’ve heard enough discussion today and I would say you’re going to get there with no problem,” she said.

After the meeting, Johnson said the design review will probably be set for June.

In other action, the commission approved the design of a five-story, 16-unit apartment building proposed for a triangular lot at Southwest 20th Avenue and Market Street, with several conditions. The design review, continued from November, had been rescheduled three times because of the high volume of applications before the commission.

The designer for that Southwest Portland project is Urban Foundry Architects of Austin, Texas, and the owner is Scotia Market Street & Gaines of Salem. The building will vary in height because of the steeply sloped 16,000-square-foot site and have one level of partial below-grade parking for 19 spaces. Vehicle and pedestrian access will be from Southwest 20th Avenue. Also, 24 long-term bike spaces will be provided on site.

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Plans for a 244-unit residential tower in the Pearl District, at Northwest 14th Avenue and Glisan Street, are scheduled to receive a design advice hearing on March 17.

The half-block development would also offer 8,000 square feet of retail space. Three and a half floors of below-grade parking for approximately 210 vehicles would be accessed from Northwest 15th Avenue. The 15-story tower would rise, with city approval, to 174.5 feet.

The applicant is Scott Passman of Ankrom Moisan Architects. Developer Holland Partner Group did not return a call seeking comment.

Food carts and a bike-share program are under consideration for the adjacent parking lot, according to city documents.

The March hearing would be the second for the project.

Meanwhile, in the Hollywood District, two restaurants may soon be replaced. A small mixed-use building has been proposed for 5035 N.E. Sandy Blvd., the longtime home of the Rheinlander and Gustav’s.

The building would be two to four stories, with retail or office space on the ground floor.

Steven Ehlbeck of SERA Architects has requested early design assistance from the city of Portland. Horst Mager is the property owner.

Ehlbeck did not respond to a message seeking comment, and Mager could not be reached.

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