Portland-based Vacasa has agreed to lease 61,000 square feet of office space at Heartline, a new mixed-use development in the Pearl District.

The 11-year lease is for the entire office complement of the shorter of two buildings developed by Security Properties and designed by Mithun, both based in Seattle. Vacasa will occupy floors two through five of the building at 1241 N.W. Johnson St. that shares a public courtyard with a complementary residential tower.

Vacasa is expanding from its offices at the RiverTec Building a block north of the Heartline office building. The online rental services company is keeping the 36,000 square feet it has at RiverTec.

“We know the Pearl; we love it here,” Vacasa CEO Eric Breon said. “It would be hard to make a move outside of the Pearl.”

The company has 320 employees in Portland, and 1,800 in total.

Large office tenants are enjoying more choice in the current market, said Patricia Raicht, senior vice president for research at Jones Lang LaSalle.

“For the first time in a while, tenants that are larger – say, 30,000 square feet and greater – have options,” Raicht said. “But if they’re looking at new construction, they’re going to be paying quite a bit for that space.”

New office construction in close-in Portland is leasing for $47.50 per square foot on average on a full-service gross basis, Raicht said.

Portland’s office market saw about 700,000 square feet delivered in 2017, with about 56 percent preleased. JLL is forecasting 500,000 square feet will be delivered during the first quarter of 2018, with about 35 percent preleased, Raicht said.

“We are at an inflection point in the market in terms of the cycle,” she said. “We are likely at the peak of under development, under construction (office space).”

Breon said Heartline’s operable windows, ample balconies and half-block floorplate were appealing. Large office tenants have plenty of options, he said.

“Space is a little plentiful on the larger side right now,” he said. “There seems to be a fair amount on the market. The best spaces in those buildings are going quick, but the little less desirable spaces within those, I could see it taking a little while to book out.”

Eric Turner of JLL represented Vacasa.

The Bureau of Development Services is reviewing a nearly $6.8 million tenant-improvement permit for Vacasa in the lobby and floors two through five of the Heartline office building. The applicant is Kate Stuart of GBD Architects and the contractor is Swinerton Builders.

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