has announced the winners of its 2021 Wood Design Awards, which include two projects in Oregon. The awards celebrate excellence in wood building design and spotlight its continued rise in popularity across the U.S. Awards, are an opportunity to recognize building designers for their skill and ingenuity, and to showcase projects that demonstrate the attributes of wood.

Nominations from across the country were evaluated by an independent jury that included:

• Clare Archer,����ice president/senior director, Gilbane Building Co., Washington, D.C.;
• Kate Diamond, FAIA, LEED AP, civic design director, HDR, Los Angeles;
• Julie Hiromoto, AIA, LEED AP BD+C, WELL AP, director of integration, principal, HKS Inc., Dallas; and
• John Mitchell, associate partner, Hartshorne Plunkard Architecture, Chicago.

National award categories include:

Wood in Schools:�� | Corvallis, OR

DEVELOPER/OWNER: Oregon State University
ARCHITECT: MGA | Michael Green Architecture
STRUCTURAL ENGINEER: Equilibrium, a Katerra Co.
CONTRACTOR: Andersen Construction

Commercial Wood Design – Mid-Rise:�� | Hood River, OR

DEVELOPER/OWNER: Key Development
ARCHITECT: Skylab Architecture
STRUCTURAL ENGINEER: Valar Consulting Engineering
CONTRACTOR: Key Development

The post 2 Oregon projects win Wood Design Awards appeared first on Daily Journal of Commerce.

Key Development‘s Sideyard fits snugly into place as one of the final pieces in the rapid redevelopment near the Burnside Bridge‘s east end.

In many Portland neighborhoods, Sideyard would stand out as a five-story building constructed with cross-laminated timber and a modern, geometric envelope. But that isn’t so at the bridgehead, where Sideyard’s older sibling, Yard, looms 21 stories and the brightly colored, swirling façade of Guerrilla Development‘s Fair-Haired Dumbbell competes for attention.

Skylab Architecture designed Sideyard, and Andersen Construction built it. Catena Consulting Engineers provided structural engineering.

Cross-laminated timber manufactured by D.R. Johnson Inc. in southern Oregon supports the structure. The compressed wood panel products were processed by Cut My Timber, a Northwest Portland company.

“It’s not only a beautiful building; it’s a special location at the Burnside bridgehead,” said Claudia Munk-von Flotow, chief operating officer of Key Development.

The location at 365 N.E. Couch St. offers two retail frontages – one on Third Avenue and the other facing the Burnside-Couch Couplet. Drivers traveling toward the bridge slow as they flow around Sideyard.

Key Development is well on its way to filling the approximately 25,000-square-foot building with commercial tenants. Ferment Brewing, which like Key Development is based in Hood River, will occupy one of the retail areas. Ferment focuses on traditional beer styles such as extra-special bitter, porter and saison; however, it also brews kombucha and makes a variety of pickled vegetables. Ferment will work with a chef-driven hospitality group on a food concept, Munk-von Flotow said.

Floors three, four and five offer approximately 5,000 square feet of office space at each level.

“We’re talking to a couple of creative agencies in town now to take all of it,” Munk-von Flotow said.

Most likely, two tenants will take the three floors, she said.

“Nothing is inked, but we’re having serious conversations,” she said.

Tamer Riad, a commercial broker with Debbie Thomas Real Estate, is representing the property.

Sideyard is part of an emerging generation of cross-laminated timber office buildings, particularly in the Central Eastside. The Portland-metro area is quickly becoming the premier one in the United States for cross-laminated timber construction. CLT is regarded as more environmentally friendly than concrete-and-steel and often is quicker to erect. The material lends itself to open-floor designs with exposed wooden beams that have proved popular with office tenants.

Andersen had limited elbow room to construct Sideyard. The parcel – known as Block 76 West – had served as a construction staging area for earlier projects. There was no such empty parcel for construction of Sideyard.

“It’s a postage stamp,” Catena Consulting Engineers principal Jason Thompson said of the site. “CLT works well for that kind of construction.”

At Sideyard, the use of concrete shear walls keeps lateral forces in check. Also, mass plywood is employed in the staircase.

For Key Development, Sideyard’s opening is a milestone. The developer first became involved at the Burnside bridgehead in 2010 by responding to a request for proposals from the Portland Development Commission (now Prosper Portland).

Key Development in December 2016 made a profitable exit from Yard, for $126.68 million to a Thailand-based investment firm. Munk-von Flotow said there are no plans to sell Sideyard.

“We’re not particularly interested in letting go of this jewel box,” she said. “We love this building. Our partners love this building.”

The post A side project opens at Burnside bridgehead appeared first on Daily Journal of Commerce.

Key Development has entered into exclusive negotiations with Prosper Portland to construct a two-building project on Block 25 in Old Town Chinatown.

Key has engaged Japanese firms to provide the project a culturally specific aesthetic. Shigeru Ban Architects and Earthscape, a landscape design studio, will design the project, along with Portland’s GBD Architects. Key Development reached out to the Japanese firms in response to the cultural goals shaped by Prosper Portland’s advisory committee.

The development team seeks to honor the area’s historic Japantown. Much of the neighborhood north of downtown was once home to residents of Japanese ancestry and businesses serving them. That changed in 1942, when Japanese-Americans were forcibly relocated to isolated camps during World War II.

“There’s very little left of what used to be a largely dominant Japanese neighborhood,” said Claudia Munk-von Flotow, chief operating officer of Key Development.

The Japanese firms will also add cultural diversity that Key lacks internally, Munk-von Flotow said.

“We recognize that, and we’re trying to do a cultural project,” she said.

Munk-von Flotow said she has long admired Ban’s designs, including the Aspen Art Museum in Colorado.

Preliminary plans call for two buildings on Block 25. One would be eight stories of cross-laminated timber with ground-floor retail space topped by commercial space. For the ground floor, Key’s managers are in talks with Connie Wohn, a local arts scene veteran and events manager, to run a social club. The building would step down to the neighboring Lan Su Chinese Garden.

The other, larger building would be multifamily, including market-rate and inclusionary housing units. The residential building could stretch up to 200 feet high if the City Council gives its assent. The state Land Use Board of Appeals has remanded to the council a decision on the allowable height on the block.

“Our proposal was 200 feet because it felt like it made sense,” Munk-von Flotow said. “It made sense architecturally with the context of the neighborhood, and it makes sense financially. It feels like the right height for that space is no more than 200 feet.”

The project is flexible enough to accommodate a range of heights, she said.

“We think a project at this site is scalable; it just depends on what goals Prosper Portland and the community stakeholders want to achieve,” Munk-von Flotow added in an email message.

Block 25 has served as a parking lot for NW Natural employees. With the utility’s move to the 250 Taylor building, the 0.62-acre parcel became available for development. Property owner Prosper Portland issued a request for proposals in May.

The block is bounded by Northwest Third and Fourth avenues, and Flanders and Glisan streets.

Key’s response spoke to Prosper Portland’s goals to honor the community’s history, said Eric Jacobson, a project manager at the agency.

“Their proposal really took to heart those development goals,” he said. “They did a lot of research and had some programmatic elements and design elements that reflected those development goals.”

Key also had a strong working relationship with Prosper Portland from building Yard and SideYard at the Burnside bridgehead.

Separately, Prosper Portland is also negotiating with Colas Development and Colas Construction to build a project at Fourth Avenue and West Burnside Street. The project would have five to seven stories, including a possible multicultural food venue on the first floor, office space for Colas and Bow Leong Bing Kong Tong, a Chinese community association, on the second floor, and three to five stories of housing above that.

Both projects are part of wider plans for growth in Old Town Chinatown. Last week, the City Council endorsed a five-year extension of the Old Town Chinatown action plan.

The projects are within the River District urban renewal area, which has $17.5 million in tax-increment financing available. Prosper Portland officials said the project would be eligible for urban renewal dollars, but no agreements have been made. The action plan has drawn criticism by the media for sitting on unspent money.

Prosper Portland spokesman Shawn Uhlman said private developers have moved ahead with many projects in the neighborhood without requesting public money. These include the Society Hotel and Hoxton Hotel, Downtown Development Group‘s multifamily project at Southwest Third Avenue and Ash Street (while that project is not within Old Town Chinatown, it is part of the River District urban renewal area) and a new Starbucks on Northwest Third Avenue.

“There have been a lot of things that have happened here; it just hasn’t required a lot of dollars from Prosper Portland,” Uhlman said. “I do think we want to correct this narrative that nothing has happened in Old Town Chinatown in the last five years.”

Still, development dollars have flowed into other areas, including downtown and Goose Hollow.

“There are a lot of reasons,” said Bernie Kerosky, a project manager in charge of the action plan. “There has been, perhaps, better investment opportunities in other areas – less risk, higher rents. We think the market’s starting to pick up here, and there’s more interest in the area, but it’s probably going to need some help from Prosper here.”

The post A Key development for Old Town Chinatown appeared first on Daily Journal of Commerce.

Andersen Construction has long been busy at the Burnside Bridge‘s east end. It built Key Development‘s Yard and then Guerrilla Development‘s Fair-Haired Dumbbell. Now the contractor is tackling Block 76 West – formerly known as SideYard – at 365 N.E. Couch St.

The five-story mixed-use building, designed by Skylab Architecture, will have 23,569 square feet. It will feature cross-laminated timber flooring, glulam structural beams and wooden columns. Two concrete cores holding staircases will be built with mass-plywood panels.

“It’s all exposed beams and columns,” said Ådne Tonning, senior project manager with general contractor Andersen Construction.

The project is Key Development’s first to feature CLT, according to the firm’s chief operating officer, Claudia Munk-von Flotow. Riddle-based D.R. Johnson is supplying the CLT.

Ground was broken on Block 76 West in May 2018 after several delays. Use of wood has made a significant difference in construction, Tonning said.

“It was faster,” he said. “We started with the footings and then the retaining wall. And then for the installation was basically they shipped up the wood and we just popped them in.”

Columns and beams are connected with Knapp hardware, while the glulam beams and columns are bolted together.

“It was just like Legos filling it up,” Tonning said.

The time savings amounts to several months, he added.

The roof is in place and almost all the brick cladding has been installed. Glaziers are busy installing a complex curtain wall system designed to flood the interior of the building with natural light. Mechanical, electrical and plumbing contractors are working their way through the building.

“Right now the roof is done and the brickies just finished except for those two little spring walls,” Tonning said. “Culver Glass is installing frames, glazing and punched openings, and we had to wait until the brickies were done until we could do the canopy work; it’s a very tight site.”

The project team is shooting for a temporary certificate of occupancy by May.

Office users are being sought for the top floors, with Key Development in talks with the owners of Hood River’s Ferment Brewing Co. and Camp 1805 Distillery to open tasting rooms on the lower floors.

The post Burnside bridgehead building boom continues appeared first on Daily Journal of Commerce.

For developers keen to use cross-laminated timber, the failure in March of CLT panels at a project on Oregon State University‘s campus has been met with a widespread shrug.

CLT is being used for a number of Portland-area projects, some with material from D.R. Johnson, the Southern Oregon supplier at the heart of the OSU incident.

For its proponents, CLT offers an attractive combination of warm aesthetics, a buy-local economic story and shorter construction schedules. Developers who are using the products say they are satisfied D.R. Johnson has fixed the issues that caused the material to reportedly delaminate at Peavy Hall in Corvallis.

Key Development‘s Block 76 West project, near the Burnside Bridge‘s east end, is using CLT materials from D.R. Johnson.

“We did not have any reluctance to go with D.R. Johnson,” said Claudia Munk-von Flotow, chief operating officer of Key Development. “They’ve been great to work with.”

The Block 76 West project, formerly known as SideYard, will have 23,569 square feet of space over five floors. Office users are being sought for the top floors, Flotow said. Key Development is in talks with the owners of Hood River’s Ferment Brewing Co. and Camp 1805 Distillery to open tasting rooms in the building.

Andersen Construction is building the project based on a design from Skylab Architecture.

District Office, a Central Eastside Industrial District project from Beam Development and Urban Development + Partners, will also use CLT from D.R. Johnson.

“It’s a positive connection between the urban economy and rural economy here in Oregon, and aesthetically, it’s more compelling,” said Jonathan Malsin, a principal at Beam Development.

Hacker, which designed District Office, will itself occupy 20,000 square feet in the six-floor, 110,000-square-foot building. Andersen Construction is building the project.

Beam Development was already interested in CLT, Malsin said, before a suggestion was made that it be used for District Office.

“We’ve been keen on using CLT for a while now,” he said. “When we started planning the project with Hacker (officials), they proposed it.”

The OSU incident did not dissuade the District Office project team from using D.R. Johnson’s CLT.

“We did our due diligence,” Malsin said. “We remain thrilled to be working with them and are confident in their ability to deliver.”

Brandon Brown, a Portland developer, also did not hesitate to use CLT materials on the Flatiron building. Construction of the six-floor, approximately 25,000-square-foot office project is wrapping up, with completion expected by Nov. 1.

CLT was more appropriate for the building, with its envelope reaching the triangular lot’s boundaries, Brown said.

“The wood performs in a much better way than concrete for that specific design,” he said.

Brown also favored the aesthetics of CLT.

“Part of the driver was just the warmth the wood brings to the feel of the buildings,” he said. “That’s something that concrete just doesn’t allow for.”

Works Progress Architecture designed the Flatiron building; Abbott Construction is serving as general contractor.

D.R. Johnson, based in Riddle, offers regional ties and a feel-good story for local projects looking to support Oregon’s timber industry. But the company does have competitors, such as Structurlam of British Columbia, in addition to traditional concrete-and-steel construction. Structurlam provided CLT to First Tech Federal Credit Union‘s newly opened 156,000-square-foot office building in Hillsboro.

D.R. Johnson did not respond to a message seeking comment.

Not every CLT proposal has moved forward. Most notably, Framework from Portland’s Project^ was halted in July after the 12-story proposal attracted a range of grants and months of publicity. Project^ blamed escalating construction costs, fluctuating tax-credit markets and inflation.

In August, Oregon issued new building codes for CLT structures. Known as the Statewide Alternative Method, the codes are drawn from the 2021 International Building Code and allow for tall wood construction.

The post Moving forward with structural innovation appeared first on Daily Journal of Commerce.

Key Development‘s follow-up to Yard will have little in common with the controversial Burnside bridgehead tower.

Instead of an imposing building envelope and black exterior panels, Yard‘s sibling will be much smaller and feature warm, reddish-brown bricks.

“We’re trying to make it more of a classic Central Eastside building than a striking, contemporary project, which we’ve kind of already done with Yard,” said Claudia Munk-von Flotow, chief operating officer of Key Development, the developer of Yard and the new project on Block 76 West. “It’s really not the little sister to Yard as we once concepted it to be.”

The mixed-use project was known in planning as SideYard – a play on it being a smaller neighbor to the 21-story project built first. Now that Yard has sold to an institutional buyer – the largely residential building was snapped up by a Thailand-based investor for $126.68 million in December 2016 – the SideYard name no longer made sense, Flotow said.

The Block 76 West building will rise to five stories and include 23,569 square feet. It’s being designed by Skylab Architecture, which also designed Yard. Andersen Construction, which previously built Yard and Guerrilla Development‘s Fair-Haired Dumbbell nearby, recently broke ground on the new project.

The program for Key’s building at 365 N.E. Couch St. hasn’t been finalized, but it’s likely to be two floors of retail space and three floors of office space, Flotow said. The retail spaces will likely face Northeast Couch Street and Third Avenue.

No vehicle parking will be provided. However, the development will include bicycle-friendly features such as “rolling curbs.”

Key Development, based in Hood River, has a lead on a potential ground-floor tenant: Ferment, a brewery that is opening a production facility and small taproom in Hood River. The company may be interested in a Portland location, Flotow said. Ferment is led by Dan Peterson, a former head brewer at Hood River brewery pFriem.

Block 76 West’s structure will set it apart: Key opted to use cross-laminated timber. The structure will be a CLT diaphragm with brick cladding. The CLT materials will be provided by D.R. Johnson, a timber manufacturer based in Riddle.

“We have done lots of conventionally framed, heavy-timber buildings,” Flotow said. “We’ve never done a CLT project. For us it’s both an aesthetic thing and time efficiency, especially with such a heavy building push and a labor market that’s not super available to do heavy-timber construction projects.”

Using CLT materials with precut holes and connections accelerates the building schedule, Flotow said.

“It makes for a really efficient construction process,” Flotow said. “You can just fly your structure a lot quicker.”

Flotow said she is not concerned by the recent delamination of CLT subflooring during construction of a building at Oregon State University in Corvallis. CLT is a proven technology with an established safety record in Europe and Canada, she said.

“There’s piles of literature of test results from both a structural and a fire-protection point of view that is giving us some confidence,” she said. “I don’t think we’re putting ourselves at a huge risk by going for a CLT diaphragm.”

Andersen Construction even sent a manager to Germany to learn about CLT, Flotow said. Andersen’s experience building in the cramped Burnside bridgehead area factored into its selection as general contractor, she said.

“They have efficient ways of staging and scheduling to stay on schedule and on budget,” she said.

The building is on track to open in spring 2019.

The post Another building being squeezed into hot spot appeared first on Daily Journal of Commerce.

For eight years, the Portland Development Commission patiently cobbled together four blocks at the eastern end of the Burnside Bridge.

City leaders thought the area could serve as a gateway to downtown from East Portland, and so the PDC in 1998 began acquiring properties there.

Revitalization of the area had a long way to go. The Convention Plaza building was a second-rate office property, and the surrounding area had little going on.

Yet the site offered 4 acres of close-in land fronting the Willamette River on one of Portland’s busiest streets.

Development there would be aided by maximum height allowances of 200 feet, a generous floor-to-area ratio of nine-to-one and central employment (EXd) zoning.

Today, the area is bustling with construction and activity. Guerrilla Development‘s colorful Fair-Haired Dumbbell is under construction, while Beam Development and Urban Development + Partners‘ Slate and Key Development and Guardian Real Estate Services‘ Yard are fully built. Additional projects are at various stages of development.

“It’s a really interesting site in Portland, an interesting opportunity,” said Jeff Pickhardt, a Key Development principal. “It’s basically the epicenter of Portland, and it had been a blighted site for a long time.”

Initially, the PDC inked a memorandum of understanding with Opus Northwest, a subsidiary of Minnesota-based Opus Group, for podium-and-tower construction on the entire property. But Opus was hit hard by the Great Recession in 2008 and ’09, and the deal dissolved.

The PDC – led at the time by Executive Director Bruce Warner under then-mayor Sam Adams – restarted. The agency brought in Beam Development, a local firm that had performed several well-regarded rehabilitations of historic buildings, as a strategic adviser to craft a new framework plan.

Crucially, instead of seeking one large developer to take the entire site, the PDC moved to bring in multiple developers.

“It was smart on PDC’s part to have some diversity of development groups,” said Jonathan Malsin, a Beam Development principal. “We understood that that could lead to a better result of having a mix of architectural styles and product types.”

Beam Development was invited to redevelop a parcel in the area. The firm, led by Brad Malsin and his son, Jonathan, chose the Convention Plaza building, which since opening in 1926 had served at various times as a military barracks, a soup kitchen and offices before being targeted for demolition. But instead of knocking it down, Beam renovated the property at 123 N.E. Third Avenue into the Eastside Exchange.

Cascade Energy Inc. was the first tenant to take space in the 80,000-square-foot building, and then the Technology Association of Oregon and the Oregon Film Office followed.

Beam Development opened the door for others to step into the area, Pickhardt said.

“You could credit Beam and really PDC for activating that part of town,” he said. “Beam was heavily involved in the framework plan, and they really took the first step at the bridgehead. Their work early on, and particularly Eastside Exchange, was a catalyst for others to follow suit.”

In the wake of the Great Recession, most developers were not in a position to redevelop 4 acres of urban property. Parceling out the four-plus blocks over time enabled the PDC to spread the financial risk among several developers.

Key Development had investigated developing a large project in the Burnside bridgehead area in 2010. The Hood River company was interested in making its mark in Portland. After Beam developed Eastside Exchange, Key jumped in with bids for Block 67 and a portion of Block 76. Block 67 became Yard, a 21-story tower with 284 residential units and ground-floor retail space.

Yard attracted criticism for its dark appearance and unbroken mass, but Key Development and Guardian Real Estate Services sold the building in December to a Thailand-based company for $126.68 million after an unsolicited offer.

After completion of the Eastside Exchange, Beam and UD+P followed with Slate, a 10-story mixed-use project on Block 75. The Works Progress Architecture-designed building has 75 market-rate apartments and 45,000 square feet of commercial space. The building opened in November.

Guerrilla Development’s Fair-Haired Dumbbell – two six-story buildings totaling 56,000 square feet – is rising on Block 76. A June completion date is targeted for the office and retail project, developer Kevin Cavenaugh has said.

Cavenaugh used a unique crowdfunding mechanism to raise $1.5 million for the $18 million project. The façade will have a colorful design by Los Angeles artist James Jean, setting the project apart from Slate’s light-colored boxes and Yard’s dark appearance.

Meanwhile, Key Development is preparing to break ground on the western portion of Block 76 for a six-story, 22,000-square-foot commercial building, Pickhardt said. That project has received design approval from the city of Portland.

Development continues to radiate outward from the 4 acres comprising the Burnside Bridgehead Framework Plan formed in 2010. To the east, Dallas-based Trinsic Residential Group is building Aura Burnside. The six-story multifamily building at 55 N.E. Grand Ave. will include 167 residential units; it’s scheduled to open in late summer.

To the south, Gerding Edlen plans to build a 17-story mixed-use building at 5 S.E. Martin Luther King Jr. Boulevard. 5 MLK, as the project is known, is set to include approximately 220 apartments, 10,000 square feet of commercial space and 170 underground parking spaces. 5 MLK is being designed by GREC Architects of Chicago.

At 17 S.E. Third Ave., Sentinel Development and Westport Capital are rehabilitating the 108,600-square-foot Towne Storage building into creative office space. LRS Architects is designing the project, and Bremik Construction is serving as general contractor.

At 230 E. Burnside St., Arthur Mutal and NFN Investments completed adaptive reuse of the 16,400-square-foot R.J. Templeton Building into creative office and retail space in 2014.

ESI Group designed and constructed a 28,720-square-foot warehouse rehabilitation for New Seasons Market’s central kitchen at Southeast Second Avenue and Ash Street.

More properties could be developed in coming years. Cairn Pacific owns property at 811 E. Burnside St. that hosts an eclectic collection of local shops. There are no current plans to develop the property, located across Burnside Street from the Doug Fir Lounge and the Jupiter Hotel, but that could change as the neighborhood develops, Cairn Pacific founding principal Tom DiChiara said.

“It was sleepy down there for a long time,” he said.

Not so now. Looking back, backers of Burnside bridgehead redevelopment are proud of their work.

“It’s amazing that it’s all come together like it has in a relatively short period of time,” Pickhardt said. “To get that scale of development done collaboratively with the neighbors and PDC is remarkable.”

Geraldene Moyle, now a senior project manager at the PDC, said the city was able to be nimble in acquiring the parcels and selling them for fair market value. Developers had to work around a Portland Bureau of Transportation couplet project, elevation changes and other issues.

“I think it’s been successful,” she said. “Based on what we owned, based on the constraints of the site, the couplet, the height, we were able to deliver a site that fulfilled the goals of the framework plan.”

The post Burnside bridgehead grows up appeared first on Daily Journal of Commerce.

As residential development begins to show signs of slowing in Portland, industrial development is booming with no end in sight.

Projects totaling more than 3.5 million square feet of industrial space are under construction, according to Jones Lang LaSalle. That will be a major addition, as only 1.1 million square feet were delivered between January and September 2016.

Portland’s vacancy rate for industrial properties fell to only 3.4 percent during the third quarter of 2016, according to JLL.

Users are seeking space in the northeast Columbia corridor, with its proximity to interstate highways and Portland International Airport, as well as the Sunset Highway corridor near Hillsboro and along Interstate 5 south of Portland.

Average rents for Portland-area industrial space grew 16 percent annually at the end of the third quarter, to $0.58 per square foot, according to JLL.

As online shopping has gained popularity, the need for shipping has exploded. To reduce shipping times, fulfillment centers must be located close to consumers. Developers are busy meeting the demand.

Tenants including Amazon, Bunzl, UPS, Logistics Insights Corp., OnTrac and Wymore Transfer signed leases for at least 100,000 square feet in 2016.

PDX Logistics Center III, from Capstone Partners, is under construction near the airport. The third phase consists of two buildings. The first is 134,400 square feet and is scheduled for delivery in early September. The second will be 122,747 square feet, with delivery set for mid-October.

“I wish it was up now, because I think there’s good demand now,” said Chris Nelson, co-founder of Capstone Partners.

The project is in a pre-loading phase on the last building pad.

“The more conspicuous construction will resume again in March,” Nelson said.

Interest has been strong for the space, but leasing remains in discussions for now.

“We’ve had proposals going back to a few users, but we don’t have anything leased,” Nelson said.

A previous phase, PDX Logistics Center II, sold in November to Clarion Partners of New York for $36.2 million. The 355,200-square-foot industrial building was fully leased with tenants UPS and Cummins Inc.

Capstone is in no rush to sell PDX Logistics Center III, Nelson said.

“We aren’t 100 percent committed to holding or to selling it, necessarily,” he said.

A fourth phase, geared toward a large industrial user, is in the design phase, Nelson said. Capstone plans to start on that project in the spring.

The initial phase attracted tenants Gateway Express, a Singapore-based online shipping company; packaging company Ernest Packaging and KeHE Distributors, a food distributor for New Seasons Market and other customers.

Perlo Construction and Mackenzie have been engaged on the PDX Logistics Center projects.

For all of the recent activity, rising labor costs could prove a threat to future industrial projects. Construction employment in the Portland-metro area jumped 10.6 percent for the 12-month period ending in November, according to a report from Christian Kaylor of the Oregon Employment Department. Portland’s construction industry gained 6,100 jobs during the 12-month period.

Competition for construction services is driving costs up too.

“I think there’s going to be more of a challenge making projects work just because costs are up so much,” Nelson said.

The boom in industrial development comes as residential development shows some signs of easing, with rent growth slowing and vacancies rising.

Other industrial developers are busy as well.

Crews are building Vista Logistics Park for Specht Development in Gresham. The business park will have three buildings totaling 732,824 square feet on a 37.42-acre site at Southeast 223rd Avenue and Stark Street.

The largest building will be 494,464 square feet. Two smaller buildings will be 124,420 and 112,940 square feet, respectively.

Perlo Construction is at work on the $61 million project, which was backed financially by New York Life Real Estate Investors, a limited liability company.

Specht purchased the property from the Port of Portland last year for $9.28 million. Capacity Commercial Group is representing the property.

Vista Logistics Park is set to be constructed in one phase and completed in late summer.

In Hood River, Key Development is at work on two industrial projects at the Port of Hood River. Sheppard’s, a tractor and industrial equipment dealer, is building a new dealership on the waterfront that will be completed in spring 2017.

“There’s a lot going on,” said Anne Medenbach, development and property manager at the Port of Hood River.

The port offers easy access to Interstate 84 and shipping on the Columbia River.

Much of the demand is driven by the continued rise of online shopping.

“It’s definitely a driver of demand,” Nelson said. “More and more customers are buying on the Internet. There’s just more demand coming through the system for handling and shipping.”

Amazon raised eyebrows last spring when it signed on for 303,000 square feet at Hillsboro’s Majestic Brookwood Business Park. The online retailer moved into the building on Nov. 1 so that it could operate during the holiday shopping season.

Since then, D.B. Schenker, a German logistics company that works with Intel, has signed on for an approximately 138,000-square-foot lease. Also, an as-yet-unannounced company has taken a 90,000-square-foot space, said Phillip Brown, executive vice president of Majestic Realty.

“The size requirements are increasing,” he said.

Some new tenants are bringing more employees than typical for industrial space.

“Even in some other parts of the Portland-metro market, that’s been a nice bright spot,” Brown said.

Multistory warehouses are a newly emerging trend in the U.S. market that hasn’t yet showed up in Portland.

In November, Prologis Inc. announced that it would build the nation’s first multistory warehouse in Seattle, the Wall Street Journal reported. The three-story, 580,000-square-foot warehouse is scheduled for completion in 2018.

A Prologis spokeswoman did not return messages seeking comment.

Multistory warehouses are common in Asia, and could make sense in dense urban environments as industrial space becomes scarcer. That is the case in Portland, Nelson said.

“There’s not a lot of land,” he said. “There’s a pretty decent limit to the amount of high-quality sites that are available.”

The post Industrial development is big business appeared first on Daily Journal of Commerce.

Yard, the darkly clad mixed-use tower completed earlier this year in Portland’s Central Eastside, has sold to a Thailand company for $126.68 million.

Approximately 50 percent of the building’s 284 residential units are occupied, according to the buyer, Land and Houses U.S.A. The company is a wholly owned American subsidiary of Land and Houses Public Company Limited of Bangkok, Thailand.

The sale equates to $446,056 per unit. The seller was Block 67, a limited liability company whose majority owner is Hood River-based Key Development, which developed the property. Marcus & Millichap’s Elizabeth Davis represented the seller.

“It’s a significant transaction for the Eastside,” she said.

The transaction occurred off-market.

“We are seeing that there’s an opportunity now for international and private capital to win some deals where before they were edged out by institutional buyers,” Davis said.

Skylab Architecture designed the 21-story building. Yard has drawn criticism for its dark appearance, which was changed after gaining approval from the Portland Design Commission.

Yard’s retail spaces were 64 percent leased at the time of sale. Tenants include Knot Springs, a social club and spa; and Tilt, a burger-centric restaurant and bar.

Key Development’s Jeff Pickhardt was not available for an interview, but in an email he stated that the project was leasing as expected – and even slightly ahead of schedule.

“We hadn’t planned to sell this soon after completion when we had started the project, but having received a compelling, unsolicited offer from Land and Houses, we reconsidered,” Pickhardt stated.

Yard, at 22 N.E. Second Ave., is part of a development renaissance at the east end of the Burnside Bridge. Other projects include Slate from Beam Development and Urban Development Partners, the Fair-Haired Dumbbell from Guerrilla Development and 5 MLK from Gerding Edlen.

Yard has studio, one-bedroom and two-bedroom apartments. Advertised monthly rents range from $1,524 for a studio to more than $4,000 for some of the luxury units. The apartments average 682 square feet.

Yard also has 57 affordable units available to renters at 60 percent of median family income through the city’s Multiple-Unit Limited Tax Exemption (MULTE) program.

Portland’s apartment market has shown signs of cooling, particularly at luxury price points. The overall multifamily vacancy rate was 3.71 percent, up from 2.9 percent a year earlier, according to Multifamily NW’s fall apartment report. Managers of some properties have begun to offer leasing incentives.

Portland-area rents grew at an average annual rate of 4.1 percent during the third quarter, according to Axiometrics. That was higher than the national average of 3 percent.

Portland had a 95.6 percent occupancy rate – above the 95.1 percent national average.

Key Development is also at work on a commercial project at Northwest Third Avenue and Couch Street, two industrial buildings at the Port of Hood River and a multifamily project in downtown Hood River. The firm is looking at another possible opportunity in Portland as well, Pickhardt stated.

The post Yard sells for $126.68 million appeared first on Daily Journal of Commerce.

In six weeks, market-rate apartment tenants will move into the Yard tower – the jutting, angular embodiment of a new Central Eastside.

The 21-story mixed-use tower at the Burnside bridgehead has lived its share of controversy getting out of the ground. A large design change missed by plan examiners has led to questions about the city’s permitting process and the use of photo-realism in design renderings. It’s been assailed as cold and foreboding by critics.

The views from inside, though, are unassailably striking. Located near the geographic center of the city, Yard is currently the only high-rise across from downtown along the Willamette River.

“It’s a pretty important site in Portland,” Skylab Architecture principal Jeff Kovel said on a tour this month. “You can see, it’s really the best position in the city.”

Perhaps the biggest issue with the tower has been its glazing. The change missed by the city was involved a reduced number of vision glass panels – resulting in a darker facade. The city and developer Key Development of Hood River have agreed the city will provide the project an additional 67 panels of glass, though it’s not yet known whether they’ll be vision glass or spandrel glass.

Developing the site long known as Block 67 has been a long time coming. For more than a century, the Central Eastside served as the manufacturing and industrial counterpoint to downtown. The recession put an end to a plan to build a shorter project on Block 67, with a Lowe’s store as an anchor tenant.

The building replaces a parking lot that for years served the Burnside Skatepark, a handmade landmark and a worldwide tourist draw.

Kovel said in ways large and small the project is meant to honor the Eastside’s “maker” spirit, which he said today has more creative offerings than the area across the Willamette.

It chafes Kovel that people have overlooked the good things about his project – the inclusion of affordable workforce units, the fact that it isn’t a cookie cutter with a cramped fitness center and a terrace tossed on top. But he acknowledges it is striking to see a structure so big on that site.

“It’s the kind of thing you get used to over time,” he said. “It gets to be part of the fabric.”

The post As Yard project wraps up, designer defends it appeared first on Daily Journal of Commerce.