Modera Davis, a new 204-unit building in Portland’s Pearl District still awaiting an occupancy permit, has sold to an institutional investor.

Virtu Investments of Carlsbad, California, snapped up the 12-story, 225,000-square-foot building at 255 N.W. 10th Ave. It was developed by Mill Creek Residential Trust, a national firm based in Boca Raton, Florida, that has invested heavily in Portland’s multifamily market.

The purchase price was not immediately available, and a Portland-based Mill Creek Residential Trust executive could not be reached for comment Tuesday.

Modera Davis’ apartments average 658 square feet. The building also has 8,307 square feet of retail space and 136 parking stalls in two underground levels.

The building sits on half of a block that also holds Deschutes Brewery‘s Portland pub and Bearing Service Co. Powell’s City of Books and major employers including Vacasa and Wieden + Kennedy are nearby.

Modera Davis is the sole Portland property in Virtu Investments’ portfolio. The firm in 2015 purchased the 145-unit Courtyard at Cedar Hills in Beaverton. Then in 2017, Virtu added the 146-unit Barclay Village in Oregon City.

SERA Architects designed Modera Davis, and Mill Creek Residential Trust’s construction arm, MCRT PNW Construction, built it.

JLL Capital Markets marketed Modera Davis on behalf of the seller. The JLL team was led by Senior Managing Director Ira Virden, Senior Director Carrie Kahn and Associate Frank Solorzano.

Mill Creek Residential Trust has developed and built six Modera-branded properties in Portland. A seventh, Modera Woodstock, is in development in Southeast Portland.

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Across the street from the outdoor store selling $50 alpaca wool beanies and near a juice bar selling $5 wheatgrass shots, Brian Schutzler and three employees assemble car engines at Bearing Service Co.

Calendars of vintage cars and souped-up pickup trucks greet customers at the front counter. The back of the space is filled with industrial machines and row after row of small parts.

Bearing Service Co. occupies a quarter-block in one of Portland’s most expensive areas. The Pearl District business, in the same location at 1040 N.W. Everett St. since 1944, is surrounded by development and businesses catering to the neighborhood’s wealthy residents and visitors.

On the east side of the block, Mill Creek Residential Trust is building Modera Davis, a 12-story mixed-use building with 204 apartments, 7,000 square feet of retail space and underground parking.

The Northwest corner of the block is occupied by Deschutes Brewing Co.‘s Portland pub, a bustling spot offering high-end dining and craft beers.

Bearing Service Co.’s low-slung building stuffed with greased engine parts looks out of place.

Developers and commercial brokers submit offers for the property at least once or twice a year, Schutzler said.

“I have a file full of offers,” he said.

So far, Schutzler and his father, Eugene, who owns the building, have yet to agree to sell the property. Developers have made every effort to coax the Schutzler family to sell, or to move the business out of the building.

“Anything they can do to get you out, that’s what they do,” Brian Schutzler said.

Bearing Service Co. illustrates the long and, at times, sensitive dance between legacy property owners and developers who are searching for the next location for a hotel, high-rise apartment or office building, spurred by Portland’s booming population and free-flowing capital markets.

Bearing Service Co. is among the last businesses of its kind in the Pearl District. What is now a Deschutes Brewery pub was once an auto-body shop. The half-block construction site where work is under way on Modera Davis was until recently the jazz club Jimmy Mak’s, and before that, a body shop, and next door was Eurocar, a mechanic for imported vehicles. Now, they’re all gone, and Bearing Service Co. is the last automotive business on the block.

“This used to be all industrial, and we’re pretty much the only ones left,” Schutzler said.

The business was founded in 1929 by Brian Schutzler’s grandfather William Schutzler and a business partner, Tracy Cole. Fifteen years later, the business moved from Burnside Street to its current location in a build-to-suit project. Eventually, Schutzler bought Cole’s interest in the business.

In recent years, Bearing Service Co. has experienced difficulty attracting employees, Schutzler said. The shop uses specialized equipment that students can’t learn at local community colleges.

“Everybody I bring in, we have to train them, and the training takes years,” he said.

Schutzler is 52 years old. His father, Eugene, is 81. Brian Schutzler said he doesn’t know what will happen to the property when his father dies, in part because he has six siblings.

“It’s hard to say what would happen,” Brian Schutzler said. “It’s not my decision.”

The property is undoubtedly valuable. The quarter-block Deschutes Brewery property sold for $2.2 million in 2007. More recently, Mill Creek Residential Trust spent $12 million assembling the half-block property on the east side of the block that enabled construction on Modera Davis.

“It’s a beautiful building, and it’s a great use in the neighborhood,” said Sam Rodriguez, senior managing director of Mill Creek’s Portland office and a Portland Design Commission member.

The building’s interesting architecture and age might make demolition difficult, Rodriguez said.

“It’s got some good potential in the future for development, but it’s going to require keeping a lot of that architecture in place because it’s appreciated by the neighbors,” he said.

The building was designed by Richard Sundeleaf, a prominent 20th-century Portland architect. Bill Tripp, an architect, is the only tenant in the Bearing Service Co. building, where he has had an office for 22 years. Tripp said the building is architecturally notable, with massive load-bearing wooden columns, thoughtful window placement and a unique central courtyard. He said Portland must preserve historic buildings like Bearing Service Co.’s.

“I look out my window every day and see people pointing, and looking in there, and they’re fascinated,” he said.

Quarter-block buildings can be challenging to redevelop, developers said. Those properties typically become hotels or apartments. The limited footprint makes office use difficult because of the need for substantial parking.

Greg Goodman, co-president of Downtown Development Group, said it’s no surprise a property such as the Schutzlers’ would attract offers.

“I would imagine they get approached all the time,” he said.

Goodman said he has not made an offer on the property, or seriously pursued it. He is a member of the partnership that owns the neighboring Deschutes Brewery building.

For developers, earning the ear of a reluctant seller can take time. Goodman, who owns many properties in Portland’s Central City, said he recently agreed to purchase a property after 25 years of conversations with the seller.

“To me, I try to cultivate a relationship, so when they do decide to sell, I’m in a relationship with them,” Goodman said. “We’re old-school. We’re relationship-oriented. A lot of the properties I buy, I’ve been talking to the people for 10 years.”

Whether the Schutzlers eventually sell their property, they also have relationships with customers that date back decades.

One customer, Denny Pillar, said he’s had engine work done at Bearing Service Co. since the 1950s. This month, he was waiting for the shop to finish work on an engine for a 1956 Alfa Romeo Spider.

“They do good work,” he said. “And if they don’t, I yell at them.”

Pillar said he’s tried using other engine shops that promised faster turnarounds, only to come away dissatisfied.

“There’s a lot of machine shops that don’t know about older cars,” he said. “I’m just more patient now.”

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The Portland Design Commission last week approved three projects, provided advice for another appearing before the commission for the first time in more than two years, and weighed in on plans for a project at the east end of the Burnside Bridge.

The Framework tower, in the works for 430 N.W. 10th Ave., in the Pearl District, is designed by Lever Architecture. This iteration of the 11-story apartment building received unanimous approval in fewer than five minutes, with no preliminary discussion.

More than an hour, however, was devoted to Holst Architecture’s design for a large mixed-use project in the Lloyd District. Plans call for two six-story apartment buildings with 12 live-work units on the ground floor, close to 40,000 square feet of retail space and structure parking for 536 vehicles.

The superblock, now a parking lot, will be intersected by a diagonal pedestrian driveway, with plazas sprinkled on the site. Eventually, the commission granted approval.

Commissioner Tad Savinar said his only concern about the project is a future decision about a 14-foot-by-30-foot interactive art piece in the main plaza. Its budget is $500,000, and Savinar said he didn’t want to see “rubber balls and a string.”

Consultations with an international artist are in the works, Holst principal Dave Otte said, and assurance has been granted that only top-quality materials will be used.

“We talked about the lifeline of the art,” he said.

Savinar responded that he was concerned with the word “interactive,” and suggested that the request for proposals for the art should stress longevity.

“Interactive doesn’t mean anything,” he said. “Insert the word ‘timeless artwork’ so it’s not just a wall.”

The Design Commission also approved Modera Davis, a market-rate apartment building designed by SERA Architects. The 12-story tower planned at 205 N.W. 10th Ave. will have 204 units and 5,500 square feet of retail space.

City planner Jeff Mitchem said the design team had addressed issues previously raised by the Design Commission. Terraces and glazing were added, elements were infused to better reference the adjoining Deschutes Brewery building, balconies were added on the west elevation and oriel windows were simplified by reducing the number of mullions and adding glass.

“The issues have been resolved to staff’s satisfaction and we are recommending full approval,” he said.

But approval wasn’t unanimous. Savinar voting no, even though he congratulated design team lead Kurt Schultz, a principal at SERA Architects.

“It’s just too much building for this half-block for me and the (verticality) is expressed just too much,” Savinar said. “It’s just squeezing too much into this site and I would have preferred to see something stepped back.”

Also on Thursday, the Jantzen Apartments – designed by SERA Architects – appeared before the Design Commission for the first time since a design advice hearing in 2014. Plans call for a six-story building at 518 N.E. 20th Avenue with 230 market-rate units (21 with stoops), 4,200 square feet of retail space along Northeast Glisan Street, 92 underground motor vehicle parking spaces and 272 long-term bike parking spaces.

Mitchem said the delay was because of a change in ownership. Although the previous design advice meeting had been “directional,” he noted, it hadn’t gone far enough to resolve several issues concerning design exceptions and approvability issues by the Portland Bureau of Transportation and the Bureau of Environmental Services.

“The PBOT and BES issues are mostly resolved,” he said.

The plan for approximately 20 ground-floor units is an issue, Mitchem said. City staff suggested making those creative office or live-work units instead. Other recommendations were to add ground-floor canopies and centering the main residential entry more.

In addition, the Design Commission provided design advice a second time for a Gerding Edlen project at 5 S.E. Martin Luther King Boulevard, at the southeast end of the Burnside Bridge.

City planner Benjamin Nielsen said a continuing staff concern is whether the building is characteristic of Central Eastside development and whether it is “a counterpoint to nearby development at the bridgehead.”

Nielsen said staff questioned whether the L-shaped, 12-story tower atop a five-story plinth building should be given more balconies and if the sloping landscaping should be brought to ground level.

The building is being designed by GREC Architects of Chicago. It will sit across the bridge from the 21-story Yard and the Fair-Haired Dumbbell. Both are under construction.

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