Unico Properties has signed Lane Powell to a long-term lease renewal for space in a 24-story high-rise in downtown Portland.

The law firm’s renewal is for 63,000 square feet at Moda Tower, which was completed in 1998. Unico and partner American Realty Advisors recently undertook a $5 million renovation project, which included a lobby remodel and new amenities.

The building, at 601 S.W. Second Ave., has 398,412 square feet of commercial space on a full block bounded by Southwest Morrison and Alder streets, and Second and Third avenues. Unico and ARA purchased the property for $176.25 million in 2018. Lane Powell is the building’s second-largest tenant after Moda Health.

“There’s no denying that COVID-19 has created a challenging environment, but it’s exciting to see a major law firm double down on its commitment to downtown Portland, and this move signals the resilience of downtown Portland and a bright future coming out of the pandemic,” Charlie Floberg, Unico Properties’ director and market leader in Portland, stated in a news release.

New amenities at the building include a gym, a tenant lounge with Xbox 360 and beer kegs and shuffleboard, a 65-person conference room with video conferencing technology, and a 1,800-square-foot outdoor terrace.

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The Moda Tower, a major downtown Portland office property, has sold to a pair of investment and asset-management companies.

American Realty Advisors and Unico Properties purchased the 398,412-square-foot asset in a joint-venture agreement for approximately $176 million. The seller was UBS Realty Investors.

The building, which sits at 601 S.W. Second Ave., was completed in 1999. It has five floors of underground parking. Long-term tenants include Moda Health and law firm Lane Powell; the building is 90 percent leased.

The acquisition provides a “stable, well-leased building that will provide some stable, risk-adjusted returns,” said Brian Pearce, senior vice president at Unico Properties.

Pearce said Unico was looking for a low-risk asset to guard against a future economic downturn.

“In this market, we’re at that stage in the cycle where we’re getting toward the end stage at some point,” he said. “I know everybody’s been saying that for the last couple of years, myself included. What we really like about it – it’s a very stable investment.”

Some modest renovations will take place, Pearce said.

“Everybody’s doing lobbies, fitness centers, things like that; we’ll be no exception,” he said. “The good news here is it’s a light touch. It doesn’t need a super-expensive repositioning, which is another thing we like about the building.”

Albert Pura, senior director of American Realty Advisors, stated in a news release, “This was a rare opportunity to acquire a newer asset with strong in-place cash flow, one of the most prestigious business addresses in the city and very limited opportunities for new development of an office property of this scale due to a lack of available sites.”

Jason Flynn of Eastdil Secured represented the seller. The transaction was completed Sept. 28.

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In 2015, after The New Yorker published a and the toll it could exact in the Pacific Northwest, seismic resilience became a hot topic in Portland.

“I was walking down the street, and two people were talking about earthquakes,” said Reid Zimmerman, associate structural engineer at KPFF Consulting Engineers. “In general, it was very positive. I definitely think that it was a plus. It seems as though owners of buildings are thinking about designing for seismic resilience.”

The science behind such efforts has advanced over the past few decades. Now, the most cutting-edge technologies involve high-tech concrete and metal that can remember their shapes.

“The philosophy has been that (structures) should not collapse (in an earthquake), which is wonderful,” said Saiid Saiidi, a professor of civil engineering at the University of Nevada-Reno. “But (structures) can be severely damaged. That is the accepted risk.”

Saiidi has spent 15 years researching ways to minimize quake-related damage, primarily in bridges. One of his discoveries is a smart memory alloy that bends and sways with a quake, and then returns to its original shape once shaking stops. The new alloy is being used in a bridge in Seattle, and will ensure the structure is usable almost immediately after a quake, Saiidi said. The problem is that such modern technology is very expensive.

“The shape-memory alloy systems have been difficult to make economically,” Zimmerman said. “It’s a wonderful material. From performance standpoint, the material is exceptional.”

Such materials are more commonly found in Japan, according to Zimmerman.

“In Japan, people will pay more to live in a building that is built to survive an earthquake,” he said. “You don’t see that in the U.S.”

In Portland, more than 90 percent of new construction uses conventional force-resisting systems that include concrete or plywood shear walls as well as steel brace frames. The idea is to dissipate forces.

Owners looking to better their buildings’ chances of surviving a quake with minimal damage typically use one of three methods.

Seismic base isolation is considered the gold standard. A building is set on a series of isolators, which move during a quake while the building stays in place. The Pioneer Courthouse in downtown Portland was retrofitted using this method.

“You can get 100 percent reduction (in forces),” Zimmerman said. “It has limitations in terms of height. It’s also the most expensive method.”

A more economical option is the use of fluid viscous dampers. During a quake, fluid is pushed through an opening, producing a damping pressure to dissipate forces. The system operates like a car’s shock absorbers. While the blow is softened, the building still feels the jolt. The Multnomah County Central Courthouse was retrofitted using this method.

“When we design using fluid viscous dampers, the target is for how much shock we want to reduce,” Zimmerman said. “We can get a very dramatic reduction of say 40 to 50 percent.”

However, money plays a big role in the amount of shock reduction. Systems that produce the largest reduction are too expensive for many buildings; more affordable ones tend to reduce shaking by approximately 30 percent.

Another system finding a growing audience is the rocking and re-centering system. Instead of resisting an earthquake’s forces, the walls lift up in a controlled manner to dissipate energy. Rocking systems are being employed for Oregon State University’s Peavy Hall and the Framework tower in Portland.

These modern systems will likely be considered for many future projects in Portland, which has nearly 1,500 unreinforced masonry buildings not retrofitted. Those buildings have walls and structural elements made of brick, cinder block, tiles, adobe or other masonry material without reinforcing materials like rebar.

“Right now each of the buildings is unique,” said Carmen Merlo, director of the Portland Bureau of Emergency Management. “Some are vacant, some require more strengthening than others. Each building owner is going to have a different experience.”

The city is developing a mandatory retrofit policy that will be presented to the City Council in late summer or early fall. Under the proposed policy, owners would have up to 30 years to completely retrofit their at-risk buildings, providing that certain intermediary goals are met.

“The fact we are requiring the intermediate steps would mitigate the worst of effects,” Merlo said. “We are working to address worst life/safety risks first.”

Most of these buildings were built long before Northwest seismic risks were identified.

“No one knew about the high earthquake dangers until the 1990s,” said Walter McMonies, a Lane Powell attorney who owns two at-risk buildings in Portland. “Unfortunately it will cost an arm and a leg to fix it. Owners like myself will spend a lot of money on this.”

Costs to retrofit buildings throughout Portland will surpass $1 billion, according to city estimates.

A retrofit of McMonies’ 46,000-square-foot, 36-unit Trinity Place Apartments will cost between $1.3 million and $1.5 million. The cost could have been far higher. The city’s estimate was $2.5 million, he said, but the building’s flooring didn’t need as much work as anticipated.

“Our floor diaphragm is double-reinforced,” he said. “The floor was very strong.”

The biggest portion of the job was strengthening the walls. Center core drilling, the process McMonies settled on, often is used for historic structures. Holes are drilled from the tops of walls into the basement. The holes are then filled with reinforced rebar and concrete to prevent a collapse in an earthquake.

“Maybe not so much for San Francisco, but it’s a cutting-edge process for Portland,” he said.

The team also had to install steel braces to keep the walls in place. Then each unit had to have the walls’ attachment to the ceiling strengthened to keep the walls from peeling away when shaken. Also, flooring was attached to the walls.

“We went in every four feet and bolted floor joists to the walls,” he said. “If the joists pull away from the wall, you have a pancaking effect.”

The total process has taken more than four years and will stretch into at least a fifth.

Despite scientific advances, no quick or cheap seismic solutions exist, Zimmerman said.

“I actually think the future of seismic design is focused on pairing the systems we know about,” he said. “The key is pairing the right system to the individual building.”

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A Japanese hotelier is looking to establish a West Coast foothold in downtown Portland.

The Portland Development Commission‘s board at its latest meeting approved the proposed sale of a vacant parcel at Southwest Oak Street and Third Avenue to Toyoko Inn Economy Hotel. It intends to construct a thrifty, “Japanese style” hotel for business travelers.

The PDC and Toyoko are now negotiating a definitive $1.02 million agreement.

The 0.23-acre parcel and two adjacent lots comprise Portland’s “police block” – the one-time home of Portland’s fire and police departments. The city vacated the block in 1984 and the next year declared its eight tax lots surplus.

The PDC purchased the property at 209 S.W. Oak St. in 2002, and demolished the existing jail annex building three years later. The agency tried for years to add housing there, but was hampered in part by a neighboring parking structure that crosses partially under the property. That structure serves the Westshore Apartments, and the PDC for years made annual payments to the parking operator. Toyoko will now assume those reimbursements.

The PDC’s board voted in February 2015 to sell the property. The agency received three offers by its deadline.

Architect Tamio Fukuyama of Portland firm Mackenzie and attorney Jeff Wolfstone of Lane Powell represented Toyoko at the PDC hearing. Both said they were not authorized to talk about the project.

Toyoko, with most of its 240 hotels in Japan, is that country’s largest hospitality operator, according to information it supplied the PDC. The company wants to build on the Portland property its first West Coast hotel – a “limited service, modern Japanese inn” geared toward business travelers and holding between 300 and 400 rooms.

Plans call for project completion in June 2018.

The PDC in recent years has boosted its commitment to attract foreign dollars, according to spokesman Shawn Uhlman.

“This is the most prominent example of (direct foreign investment) that I can think of,” he said. “This is broader than the actual property itself. The PDC has done a lot of work – particularly with Japan, but other countries as well – making them aware what Portland has to offer as a city, but also opening them up to opportunities to invest in Portland.”

Along with companies in Japan, the PDC has reached out to some in Colombia and China, Uhlman said.

“But I think we’ve seen the most real results with Japan,” he said.

The PDC has also connected Portland firms – including architecture firms ZGF and Place Studio – with opportunities in Japan, Uhlman said.

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Jeff C.D. Brecht has joined the Long Term Care and Seniors Housing Client Service Team at Lane Powell‘s Portland office. He previously was part of the Health Care Practice Group at Sussman Shank LLP.

Brecht, who received his law degree from North Illinois University, joins Lane Powell as Counsel to the Firm. He has more than 18 years of trial experience representing business and individuals in state and federal courts. His trial and litigation expertise includes representing assisted living providers, nursing homes and other long-term care provides in a range of regulatory, licensure, contract and collection lawsuits and administrative hearings. He also has experience in trade secret and trademark protection, trade and estate disputes, and contract disputes.

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Gabriela Sanchez has joined the Long Term Care and Seniors Housing Client Service Team at Lane Powell‘s Portland office. She previously was part of the Health Care Practice Group at Sussman Shank LLP.

Sanchez received her law degree from the University of Oregon  School of Law. She joins Lane Powell as a shareholder representing long-term care, senior housing, home health and hospice provides in business, regulatory and litigation matter. A frequent presenter and author for the Oregon Health Care Association, she counsels providers in HIPAA/HITECH compliance in jurisdictions that include Oregon, Washington, Nevada and Arizona. She also advises facilities in insurance payment disputes and recoupment issues

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Proposed legislation that would create a state historic rehabilitation fund to help offset the cost of restoring and upgrading aging commercial buildings could encourage more renovation projects throughout Oregon.

The Revitalize Main Street Act is in the queue to be introduced in the Oregon Legislature by the Senate Committee on Finance and Revenue for consideration during the 2015 regular session, Restore Oregon Executive Director Peggy Moretti said.

The Portland-based nonprofit advocates for historic preservation and is lobbying for the legislation as a way to help revitalize downtowns in cities throughout the state. The proposed state incentive program would help break down the financial barrier for property owners considering seismic upgrades and other costly measures to rehabilitate older buildings, Moretti said.

“It always boiled down to money,” she said. “Oftentimes, it’s just out of reach. When we realized Oregon lacked a financial incentive we realized this was the single most important thing we could do to encourage preservation and revitalize main streets. We’re responding to the need we saw in the field.”

The bill would create a fund with revenue from the auction of state income tax credits at a capped amount. This money would be used to provide developers or property owners a 25 percent rebate – administered through the Oregon State Historic Preservation Office – on restorations of historic commercial buildings. The fund would operate much like the Oregon Production Investment Fund, which encourages film production in the state.

Presently, 35 other states offer historic restoration incentives similar to what is being proposed in the Revitalize Main Street Act. Such an incentive in Oregon would join federal incentives as a way to spur restorations of historic buildings, Moretti said.

“The goal is to have an impact on small main streets as well as larger urban settings,” she said.

Restore Oregon commissioned consulting firm ECONorthwest to complete an economic analysis of the proposed incentive. The state historic preservation fund would dramatically increase the number of building rehabilitation projects in Oregon and create hundreds of new jobs in construction and other related fields, the analysis said.

The fund would be especially helpful to building owners facing the high cost of retrofitting unreinforced masonry buildings, said Walt McMonies, a Portland property owner and senior real estate attorney with the Portland office of Lane Powell. He serves on the Restore Oregon board and is a member of a steering committee backing the Revitalize Main Street Act.

“It’s going to help the construction industry if we pass this because it’s real money that will be spent on these buildings,” McMonies said. “There will be a lot more people renovating their buildings. It really will start a renovation boom.”

Fellow steering committee member John Russell, founder of Portland-based Russell Development Company Inc., said he supports the proposed incentive for similar reasons. It cost between $400 and $500 a square foot for his company to seismically retrofit a 157-year-old building near the corner of Southwest Naito Parkway and Oak Street in Portland, he said.

“It sat vacant for two years because the costs to restore it were enormous,” Russell said.

The fund wouldn’t just be a boon for development companies that own multiple properties, said George Kramer, principal of Ashland-based historic preservation consulting firm Kramer & Co. and a Revitalize Main Street Act steering committee member. The legislation is geared toward owners of smaller commercial properties in downtowns throughout the state that wouldn’t otherwise be able to afford to fix up their aging buildings, he said. The proposed incentive program could also help these property owners secure financing from private lenders for restoration projects.

“Those kinds of smaller projects don’t really have anywhere to go in Oregon for assistance,” Kramer said. “This program will directly target those types of property owners. I think we will make quantitative improvements on main streets across the state.”

Kramer, who has three decades of experience working on historic preservation projects, said he has long pushed for the state to set up a restoration incentive program. The Revitalize Main Street Act will encourage developers to invest in restoring historic buildings and create jobs, he said.

“If you look at the big picture, there are few things that we can invest in as Oregonians that have so many positive paybacks,” Kramer said.

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Benjamin G. Lenhart, a shareholder with Lane Powell, has been named chairman of the board of directors of .

The non-profit organization works to positively impact the lives of young people by providing educational programs and promoting healthy lifestyle choices through the game of golf. Lenhart has been a member of the group’s board since 2009.

His legal practice focuses on mergers and acquisitions, commercial finance, and corporate finance and securities transactions.

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(Editor’s note: This piece originally ran in the June 9, 2011, issue of the Briefly Legal PDX e-newsletter)

For decades, working at a law firm during the summer nearly always guaranteed law students a job offer upon graduation. That sure-fire foot in the door, as with most employment dynamics, changed drastically with the recession.

Like many firms across the country, several Portland firms either trimmed back their summer programs or shelved them altogether. Other firms retained their summer programs, but deferred job offers for months after graduation.

For many years, Perkins Coie has had summer programs in each of its offices across the country. The firm’s overall summer program actually peaked with the largest number of participants in 2008, according to Michael Gotham, director of attorney recruiting and retention.

While the firm’s overall summer program is smaller now than it was then, many of the individual offices – including the Portland office – have maintained a fairly consistent number of summer job openings, Gotham says.

“Our recruiting outlook remains strong and our summer program will remain consistent in size with the program for the past couple of years,” he says.

Lane Powell has retained its summer program, though it has reduced the number of participants to four. The recession hasn’t driven the change. Instead, the firm is filling openings with lateral hires of attorneys who already have a year or two of experience, according to President Lewis Horowitz.

“… We never like to have more summer associates than we are sure we will need the following year, so perhaps we are more conservative in our summer programs than some other firms,” Horowitz said.

While the summer job outlook for law students is nothing like pre-recession levels, the National Association for Law Placement sees the “modest rebound” taking place as encouraging.

In its annual recruiting report, NALP notes that law firm recruiting programs rose slightly last summer and fall after spiraling in 2008 and 2009. Here are some highlights from the report:

•    About 17 percent of law firms did not offer a summer program in 2010. Less than 5 percent say they will not offer a program this summer.

•    Firms that do employ law students this summer will offer fewer jobs. The average summer program employed six students in the early 2000s; the average has fallen to four.

•    The average summer program size for West Coast firms is two or three students.

•    Some law firms are still deferring associate start dates, but Class of 2010 graduates face deferments to a much lesser extent than 2009 graduates.

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(Editor’s note: This piece originally ran in the May 5, 2011 issue of the BrieflyLegal e-newsletter)

Between the recession and baby boomers choosing to work longer, a growing number of law firms are stepping away from the traditional pyramid structure, which features a small number of senior partners at the top, a larger number of mid-level attorneys and an even bigger base of new associates.

They are shifting instead to a structure that’s more diamond shaped, where senior associates and junior partners make up the bulk of the staff. The change is more a matter of natural evolution than conscious strategy for most firms, says Linda Green Pierce, president of Portland-based Northwest Legal Search Inc.

“I am seeing this kind of arrangement at law firms,” Pierce says, “and I think it’s largely due to the overall maturity of the legal industry and the population of the generations working in firms, including the boomer generation not retiring.”

She also points to other factors as possibly contributing to the switch, including sluggish growth in demand for legal services overall and lower levels of hiring those just out of law school over the last few years. Corporate clients are more willing to pay for the higher end expertise provided by senior associates and junior partners than foot the bill for training a new associate, according to Pierce.

In addition, the bulge in the middle of the diamond is comprised of mid-level attorneys trying to climb up through the ranks. “Partner tracks are longer so those people stay in the stomach of the snake longer instead of moving up the pyramid to become a partner,” she says
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Lewis Horowitz, managing partner at Lane Powell, oversees the firm’s Portland and Seattle offices and says it has never been structured in the traditional pyramid shape.

“Our model has always been based on having more experienced attorneys,” he says. “It has its challenges, but we have found that model to be successful because clients often hate paying for associates with only a few years experience.”

The tough reality is that it’s expensive to hire the best and the brightest, and somebody ultimately has to pay for it. “If the market for first-year lawyers was $50,000 or $60,000 a year, it would be easier to hire more of them,” Horowtiz says.

So, then, how are young attorneys supposed to get experience if no one will hire them?

“This problem is no different from other professions,” Horowitz says, adding there are several entry-level tasks for which young associates are well-suited. “There is absolutely a role for them, but the idea of one partner keeping four associates busy is an outdated model.”

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