A 19-story office building in downtown Portland has sold to an investment partnership for nearly $70 million.

The purchase of 200 Market is the largest ever for Melvin Mark Cos., which has been involved in Portland real estate since 1945.

The local firm partnered with Nevada-based auto dealer Jeff Swickard, who extended his downtown real estate buying spree after he recently purchased the U.S. Bancorp Tower (better known as “Big Pink”) and the Five Oak building. Together, they total almost 1.5 million square feet.

“We share the same values of long-term stewardship and a belief in Portland that its brightest days are ahead,” said Nick Ehlen, managing partner at Melvin Mark Investors.

Completed in 1973, 200 Market offers 18 floors of office space and ground-floor retail space. The purchase values the asset with 388,191 rentable square feet at approximately $180 per square foot. The building comprises approximately 400,000 gross square feet.

The total transaction amount was “just shy” of $70 million, Ehlen said. He declined to give an exact figure, and a warranty deed was not immediately available.

“Investments like 200 S.W. Market St. reflect our long-standing commitment to Portland and our belief that downtown will continue to play an important role in the region’s future,” Melvin Mark Cos. CEO Jim Mark stated in a news release.

The seller was John Russell, who purchased 200 Market for $21.5 million in 1988. Ehlen credited Russell for his stewardship of the building for nearly four decades.

Russell had defaulted on a $63 million loan from Metropolitan Life Insurance Co. as office tenants downsized after the pandemic, the lender alleged, according to court records previously reported by The Oregonian/OregonLive.

The buyers purchased the loan for “a little over half” the $63 million owed, Ehlen said. They also bought out Russell’s controlling interest and hammered out lease agreements with tenants, including tenant-improvement allowances.

“It was really three transactions rolled into one,” Ehlen said.

The partnership wooed accounting firm Geffen Mesher to sign a long-term lease for 30,000 square feet. Two existing tenants also opted to re-up: Regence BlueCross BlueShield of Oregon expanded its space from approximately 60,000 square feet to 100,000 square feet, and IMA Financial Group grew its space from 5,197 square feet to 9,000 square feet.

Regence is calling employees back to the office and expanding its presence downtown, Ehlen said.

“We’re hoping it sparks a movement,” he added.

In total, new and extended leases of nearly 140,000 rentable square feet have been secured, and the property is expected to reach 85 percent occupancy in coming months, Melvin Mark stated in a news release.

The 200 Market building also has a sprawling parking garage with nearly 600 spaces close to Portland State University, the Keller Auditorium and government offices in south downtown.

The complex transaction had been gestating since 2024.

“This deal took a lot of teamwork to pull together,” Ehlen said. “We’re so excited. I’ve been working on this deal for 18 months, but we’re thrilled to get it to the finish line.”

Colliers brokers Trevor Kafoury and Autumn Brice represented both Regence BlueCross BlueShield of Oregon and IMA Financial in their lease negotiations, and Nathan Sasaki and Nathan Oakley of Apex Real Estate Partners represented Geffen Mesher. Melvin Mark Capital Group partnered with Melvin Mark Investors to secure financing for investment.

Melvin Mark Brokerage Co. will oversee leasing and property management at 200 Market. The new owners plan to renovate the lobby and make other improvements.

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As the economic impacts of the coronavirus pandemic stretch into their sixth month, an increasing number of Portland’s locally owned restaurants and shops are closing locations permanently. In some instances, new tenants are moving into those spaces in some of the city’s hippest neighborhoods; however, other times those spaces are remaining vacant.

That’s putting pressure on landlords, who are broadly reluctant to evict tenants during a pandemic, when demand for space is low.

Restaurants in particular have been hit hard. Pok Pok Wing, Tasty n Alder, Blue Star Donuts, Abyssinian Kitchen and Stella Taco have closed locations permanently. Some others have survived by offering takeout and delivery. Indoor dining, while allowed under Gov. Kate Brown’s phase II order, has been less popular.

Brewpubs have begun to show signs of stress too: Base Camp Brewing and Grixsen Brewing closed in recent weeks.

Stella Taco opened its second location, on Southeast Division Street, in 2016. After the original location closed last summer, the second location closed last month. Nearby, Whiskey Soda Lounge, a bar that was part of the Pok Pok empire, closed as well.

“The financial challenges facing Stella and the other businesses on Division Street are representative of the challenges faced by retailers,” said Stan Amy, a Portland investor who is part of the ownership group that owns Stella Taco’s former building at 3050 S.E. Division St.

Amy also has ownership interest in the commercial building on the southwest corner of Northeast 24th Avenue and Fremont Street that holds Garden Fever, Lucca and other businesses. At one point, the owners were collecting only 10 percent of the usual rent there because some tenants simply couldn’t pay. Amy said it doesn’t make sense to evict businesses for nonpayment during the COVID-19 crisis.

“It’s a matter of self-interest,” he said. “It is not in a landlord’s interest … and it’s certainly not in the interest of the community, to evict a viable business.”

Amy said he takes a long-term view of doing everything possible to keep tenants in place.

“The tenants are the cash-flow engine that makes all of the real estate work,” he said. “It’s absolutely in our interest as landlords and community members to have healthy neighborhood commerce, and therefore we need to take a long-term point of view, and that’s what we’ve advocated with our tenants.”

There are signs that restaurant spaces in Portland’s neighborhood commercial corridors remain desirable even as some eateries go out of business. Stella Taco’s former location on Division Street was soon leased by another taqueria, Tight Tacos. Across the street, Whiskey Soda Lounge’s former space is gaining a new business: Oma’s Takeaway by Gado Gado.

And Pok Pok Wing’s former location on Milwaukie Avenue is being prepared for a barbecue restaurant, The Oregonian reported.

If there’s a silver lining to the closures, it’s that the vacancies could open up opportunities for new businesses, real estate professionals said.

“I’m optimistic about the entrepreneurship and the opportunities that will exist for folks,” said Peter Andrews, executive vice president of brokerage at Melvin Mark.

Still, the churn seems to be increasing as the pandemic stretches on.

“What we know is our particularly retail tenants that need foot traffic are incredibly impacted,” Andrews said. “Landlords are doing what they can to keep them, and being proactive, but this is going so long.”

Ethos Development‘s food-cart tenants have done fairly well with takeout during the pandemic, according to Paul Del Vecchio, the firm’s founding principal.

“I wouldn’t say it’s awesome, but we’re treading water,” he said.

Brick-and-mortar restaurant space, Del Vecchio said, is “a really bad place to be right now” for landlords.

Some are questioning why the federal government isn’t doing more to help landlords. While unemployed workers were given an extra $600 a month, landlords have received no help with their mortgages.

Amy supports United for Relief, a campaign by local property owners, developers and lenders to encourage government relief for commercial mortgages.

“Federal inaction is going to tank the economic recovery – not just in the state but across the nation,” he said.

Amy said he’s fortunate to be able to work with tenants on rent.

“For every property owner who’s in a position to reduce or waive rent, there are dozens who do not have the ability to do so,” he said. “This is an economic ecosystem problem. … It’s really important that we have system-wide solutions, and the only people who can offer that is the government.”

As local businesses close, Amy said he’s concerned well-capitalized chains backed by Wall Street will move in.

“Yes, I think that the character of our community is at risk,” he said.

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Melvin “Pete” Mark Jr., one of Portland‘s most important 20th-century real-estate executives, died Thursday at age 91.

Mark was the second generation of what has become one of Portland’s largest and most respected real estate and development firms.

Mark moved to Portland in 1951 with his wife, Mary Kridel. His father, Melvin Mark Sr., had purchased the Loyalty Building, and the family firm continued to acquire a number of historic properties, including the Cascade Building, Yeon and Builder’s Exchange.

The firm now has 50 employees and owns or manages 3.1 million square feet of commercial space. The companies are now led by CEO Jim Mark, Pete’s son.

Pete Mark, whose nickname was bestowed by his sister, Lois, became managing partner of the family firm in 1965, when his father, Melvin Mark Sr., died.

Pete Mark developed Columbia Square, which was completed in 1979, and Crown Plaza, a 280,000-square-foot building that provided a boost to downtown revitalization. He also played a key role in keeping Portland’s downtown healthy, Jim Mark said.

“As downtowns were failing all across the county, the public sector and the private sector joined hands to try to attract people to downtown Portland,” he said. “We were sort of the first downtown to figure out you need to have attractors downtown.”

Pete Mark joined other civic leaders to persuade Nordstrom to keep its anchor store in downtown Portland.

Mark served on the boards of Pioneer Courthouse Square and the Oregon Convention Center, among other civic organizations.

“He really believed in collaboration and getting things done with other people,” Jim Mark said.

Today, Melvin Mark Companies is a fourth-generation family business. In addition to CEO Jim Mark, who took over in 2000, Pete’s son-in-law Scott Andrews is president of Melvin Mark Brokerage Co., and grandsons Peter and Paul Andrews are commercial brokers.

“He was a family man first,” Jim Mark said. “He was passionate about this company, and the people at the company were like family to him.”

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Cracking in the facade of the Fifth Avenue Building, in downtown Portland at 1400 S.W. Fifth Ave., caused an evacuation as well as traffic and transit closures on Tuesday.

At about 2 p.m., three hours after the initial emergency call, a Portland Fire & Rescue spokesman, Rich Chatman, confirmed that the problem was not structural in nature and the building was not in imminent danger of collapsing.

A technical team with the fire bureau was first inside. They swept the building and determined it wasn’t in imminent danger of collapse. Structural engineers with the city then began investigating the problem from the inside.

The building is owned by Melvin Mark Cos. The 10-story structure, built in 1951 to house state government services, is a “non-descript state office building,” according to a .

Chatman said the plan was to erect scaffolding to secure loose siding before tenants would be allowed to resume normal operations in the building.

The 130,000-square-foot building houses offices for eBay and Oregon Health & Science University as well as outlets of FedEx, 24 Hour Fitness and KinderCare.

OHSU occupies four floors of the building, and eBay occupies five.

Evacuated OHSU employees said they could hear a crack shortly before being told to leave the building. Several said they assumed the noise came from an ongoing construction project. Some reported hearing a fire; others said it was too quiet to hear.

“It looks like I’ll be working from home for a while,” said Jamie Hinton, an OHSU billing representative who works on the second floor, about one floor below where the buckling appeared.

By 2 p.m., employees were allowed to return to their offices to retrieve possessions, but were told the building would remain closed.

24 Hour Fitness members grumbled outside about missing their lunchtime workouts.

“I guess this means Body Pump is canceled,” one said.

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The Multnomah County Board of Commissioners has backed up an expert panel’s recommendation to transform the county-owned Morrison bridgehead properties into an indoor public market and high-rise office building.

The commission today voted to create a disposition and development agreement (DDA) with Portland-based Melvin Mark Cos., and the nonprofit James Beard Public Market, the team pitching the concept. The DDA will layout the conditions that must be met in order for the team to acquire the 3.1 acres of land being used currently by the county as surface parking.

In the proposal, the project team said it would pay $10.03 million for the four parcels, nearly $2 million more than the $8.2 million Gerding Edlen, the other firm that submitted a proposal, was willing to pay.

Melvin Mark plans to spend $120.6 million to convert one of the parcels into a 17-story, Class-A office building with 327,713 square feet of office space and the three other parcels into a 110,000-square-foot indoor public market.

A DDA is expected to be complete by the end of the year. Once signed, officials at Melvin Mark said the project would likely take about five years to complete.

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For more than a decade, local consultant Ron Paul has hunted for a site where his year-round indoor public market concept could become reality. Now Paul and local development firm Melvin Mark Cos. may be close to moving forward in downtown Portland.

A Melvin Mark proposal to convert four Multnomah County-owned parcels at the foot of the Morrison Bridge into a 17-story office building and an indoor public market was recommended by a five-member expert panel convened by the county. The proposal, which was selected over a mixed-use eco-district concept pitched by Gerding Edlen, will go before the Multnomah County Board of Commissioners on May 26 for final approval.

Under its proposal, Melvin Mark would pay $10.03 million for 3.1 acres of land being used by the county for surface parking. The company would then spend $120.6 million to convert one of the parcels – Block 16 – into a 17-story, class-A office building with 327,713 square feet of leasable space, and the three remaining blocks into a 110,000-square-foot indoor public market.

Four of the evaluation committee’s five members scored the Melvin Mark proposal higher than the Gerding Edlen proposal, which also listed the Goodman family, which owns City Center Parking, as a partner. In scoring for the 11 categories, which weren’t weighted and ranged in value from 0-10, Melvin Mark averaged 8.1, and Gerding Edlen averaged 7.1.

The evaluation committee included: Gale Castillo, president of the Hispanic Metropolitan Chamber of Commerce; John Holmes, principal with Holst Architecture; Ray Leary, principal with ERL Development; George Passadore, retired chairman of Wells Fargo in Oregon and Southwest Washington; and John Russell, principal with Russell Development Co.

Paul for years has pitched the James Beard Public Market and seen it fall through because of various circumstances. Sites discussed previously include the Federal Building at 511 N.W. Broadway and a space in Union Station.

“I’m going to let the proposal speak for itself until the county commission votes on it,” Paul said. “But I will say that we’re very encouraged and excited that the county’s appraisal team agreed with us that the public market concept meshed well with the goals of the county for the site.”

The Melvin Mark proposal received 83 percent of available points, and Gerding Edlen received 74.2 percent. According to score sheets, the biggest differences were in purchase price and design.

Melvin Mark would pay $10.03 million for the property; Gerding Edlen would pay $8.2 million. The property was appraised at $8.83 million in 2005.

Of the 30 available points awarded for design, Melvin Mark received 26.7 and Gerding Edlen received 18.4. Melvin Mark has and would continue to rely on local firm SERA Architects for the project. Other consultants that have contributed to Melvin Mark’s effort include local firms Mayer/Reed for landscape architecture, KPFF Consulting Engineers for structural engineering and ECONorthwest for economic consulting.

But as county spokesman David Austin pointed out, the evaluation committee does not have the final say; ultimately, the county commission will determine whether the Melvin Mark proposal will move forward. Austin said the commission could ask for a retooled proposal from Melvin Mark, choose to discuss the Gerding Edlen proposal or issue an entirely new request for proposals.

“Like I said, we are very encouraged, but this is only one step in the long process of actually getting something built and people in the market,” Paul said.

Melvin Mark has been in discussions with Paul since 2008, according to Dan Petrusich, president of the firm’s development wing.

“We’re just thrilled to be part of this process and have it moving forward,” he said. “Ron’s tenacity and vision for this project are remarkable, and we hope it can come to light.”

Mark Edlen, co-founder and CEO of Gerding Edlen, said the public market is a good concept, which he plans to support if the county ultimately moves in that direction.

“I would expect the committee recommendation will carry a lot of weight with the county,” Edlen said. “If they decide to go forward with it, I will be one of the first in line to contribute to the public market, which I think is a great idea.”

If the county commission were to select the Melvin Mark proposal, a Disposition and Development Agreement process would start. The DDA would outline site acquisition and how construction would proceed.

If a DDA were signed, Melvin Mark officials anticipate development and construction requiring approximately five years. The company would simultaneously look for office tenants and start a public campaign to secure funding for the market, which would be operated as a nonprofit.

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A committee assembled by Multnomah County is recommending a development proposal by Melvin Mark Cos. to build an office tower and an indoor public market on four county-owned parcels at the foot of the Morrison Bridge in downtown Portland.

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Which would be a better fit for parking lots that surround the Morrison bridgehead in downtown Portland: an or a public market?

A five-member panel of Multnomah County officials will soon decide, after reviewing two development proposals – one each from local firms Gerding Edlen and Melvin Mark – for the four bridgehead parcels that total 3.1 acres of buildable land.

Multnomah County has owned the lots for nearly 50 years, but has never used them for anything except parking and staging. In November, the county issued a request for proposals to gauge private interest and learn about development possibilities for the lots – Nos. 1, 2, 16 and 39 – that hug the Morrison bridgehead.

“The county put out the RFP to take a strategic look at its assets and determine if there is a way to use the properties for good while taking a burden off the county’s operations and the people that pay for them,” said Warren Fish, a senior policy adviser in Multnomah County Chairman Jeff Cogen’s office. “And from the county commission’s perspective, these are visible lots and seeing them developed would make an impression on their legacy.”

The RFP drew interest from two of Portland’s most notable development firms. The county had hoped for more proposals, but Fish said officials are excited about the two proposals.

Melvin Mark Cos. teamed up with local consultant Ron Paul and the Historic Portland Public Market Foundation to pitch a development centered on the long proposed James Beard Public Market. Melvin Mark would buy the four parcels from the county for $10 million and construct an indoor, open-air public market with room for 110 vendors on three of the parcels and a 17-story office building on the center parcel, which has a 235-foot height limit.

Dan Petrusich, president of Melvin Mark Development Co., said he couldn’t provide many details because the proposal is being reviewed. However, he called it a “great site” and said the company would be excited to participate in the development process.

Paul, the leading force behind the development, teamed up with Melvin Mark last year to pursue opportunities for the market. Even before the county decided to look at potential developments for the bridgehead parcels, Paul identified the area as a good fit for the market.

Paul said he likes the tract of land because it’s more of a crossroads than a cul-de-sac. Not only would the market be in the same vicinity as the Portland markets of the 19th and 20th centuries, but it also would be within walking distance of Portland Saturday Market, downtown shopping districts and the central eastside district, he said.

Gerding Edlen, meanwhile, is pitching a mix of office, retail and housing on the three surrounding parcels. The center parcel would be an eco-district and provide sustainable and efficient amenities to the surrounding buildings. This would include equipment to provide renewable energy and a water reclamation system.

The project is similar to others that Gerding Edlen has been building across the country throughout the recession.

Gerding Edlen would pay $8.2 million for the parcels, $1.8 million less than Melvin Mark. But as Fish pointed out, the county has not determined whether it would simply sell the lots or become a development partner and provide other resources.

The five-member evaluation committee will hold two meetings in March – one to discuss the proposals and another to score them. The committee will then present its recommendation to the county commission, which will make the final decision at a meeting as early as April.

The post 2 proposals pitched for Morrison bridgehead appeared first on Daily Journal of Commerce.

Competing federal lease requirements have frustrated some local real estate professionals looking for spaces to suit the federal government.

The General Services Administration wants 126,500 square feet of office space for the U.S. Army Corps of Engineers. But in Portland the agency cannot meet both a federal requirement for the building to have 25-meter setbacks and another for the building to be in downtown. As a result, the GSA may need a new building, most likely outside the urban core.

“The most unfortunate part of all of this is that we spent the last 40 years building up our mass transit to downtown areas in order to accommodate requirements like these,” said Jim Mark, CEO of Melvin Mark Cos., which handles leasing for the corps’ present home, Robert Duncan Plaza at 333 S.W. First Ave. “Then a new requirement comes in and reverses everything we worked for.”

The Patriot Act of 2001 requires 25-meter setbacks around any building that houses a federal agency overseen by the Department of Defense if it occupies at least 25 percent of the building. But an executive order from the Carter administration called for federal agencies to be in downtown cores.

The GSA is looking for space because the corps’ lease at Robert Duncan Plaza runs out at the end of this year. Federal agencies are required to issue a request for proposals when their 20-year leases run out so that other property owners can bid for the next one, said Ross Buffington, spokesman for the GSA. But the agency must include the setback requirements in the RFP.

“We went through the negotiations, but there is really no way to accommodate those needs in this building, or any other existing building,” Mark said. “These same requirements pushed the FBI out to Cascade Station, and you are probably going to see the same thing here.”

But U.S. Army Corps of Engineers spokesman Matt Rabe said the downtown location is vital for workforce development.

“Staying in downtown is really important to the employees here because it’s so centrally located to where we all live and the public transit system is set up so nicely to get here,” Rabe said.

“The long and short of this is that we’ve been building the way we build because of this and now they’re changing it,” Mark said. “It’s pretty much impossible to meet both of those.”

The only downtown space that comes close to meeting the agency’s size requirements is the 110,000-square-foot space at KOIN Center, but it’s not even big enough.

The unbuilt Park Avenue West also is not an option. Adding a 25-meter buffer to the partially constructed tower would significantly alter its design because its foundation has already been built.

“We cannot meet those requirements and no one else in downtown can either,” said Vanessa Sturgeon, vice president of TMT Development, the firm developing Park Avenue West.

Buffington said the GSA is seeking proposals from both building owners and development firms able to offer a build-to-suit space. For the FBI, the agency awarded a $3.2 million contract to Las Vegas-based Molasky Group to construct a 135,000-square-foot complex at Cascade Station.

“Considering this was a Bush administration requirement, I thought someone might step in and overturn it by now. But nothing has happened yet,” Mark said. “In the meantime we will extend the lease with the agency until it decides what it wants to do.

“But I bet (the corps) ends up in a built-to-suit.”

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