A Sullivan’s Gulch apartment building has become Leadership in Energy and Environmental Design platinum.

TwentyTwenty, with 162 units, was designed by Hacker for PHK Development. General contractor Andersen Construction completed its work in 2019.

The building received 85.5 LEED points; 80 is needed for platinum. Building systems that helped earn the rating include high-performance glazing and insulation, energy-efficient appliances and a highly efficient heating and cooling system that uses ductless mini-split units and heat pumps.

“We designed the units to optimize fresh air indoors and minimize exposure to airborne toxins and pollutants,” said Patrick Kessi, president and founder of PHK Development.

PHK’s most recent major project, The Windward in Lake Oswego, received a LEED gold rating.

Kessi said TwentyTwenty has hit its leasing goals to date. Coast Property Management is handling leasing for the building.

Advertised rents start at $1,599 a month for a one-bedroom, one-bathroom unit with 481 square feet. A 1,489-square-foot penthouse with two bedrooms and two bathrooms rents for $4,775. The building also has two levels of underground parking.

The units were originally built as condominiums, but PHK Development switched them to apartments.

TwentyTwenty is a 2020 91��Ƶ TopProjects finalist in the multifamily category.

Kessi said his next development project is a retail building in Scappoose.

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Developer Patrick Kessi made a bold bet by constructing a 162-unit condominium building when other developers wouldn’t touch condos. It didn’t pay off, and now Kessi is changing plans.

Kessi, president of PHK Development, said all of the units in the TwentyTwenty building now under construction will be converted into apartments.

“Pre-sales (of the condos) were slower than expected, but they were pretty good,” he said.

Interest rates increased in 2018, when pre-sales for the Lloyd-area building were under way.

“Now there are more products and more options, and there is a lack of urgency to immediately buy,” Kessi said. “The market isn’t really ready for condo sales now as it was two years ago.”

The units are now being advertised for rent – from $1,800 per month for a 481-square-foot studio to $4,125 per month for a 1,299-square-foot two-bedroom apartment. The building will be ready for residents in about two weeks, Kessi said. Coast Property Management is handling the rentals.

TwentyTwenty came on the heels of Hoyt Street Properties‘ Vista Condominiums, a 153-unit building that opened last year in the Pearl District. Also, BPM Real Estate Group‘s Block 216 tower, with 148 Ritz-Carlton condo units, is slated to open in downtown Portland in 2022.

Now TwentyTwenty will join a market that many consider overbuilt with luxury apartments. Kessi expressed optimism Lloyd will prove ripe for new apartments, particularly in a building with quality concrete and steel construction and contemporary architecture.

TwentyTwenty, designed by Hacker, will be “one of the most architecturally significant properties in more than a decade” in the area, according to Kessi. Andersen Construction is the project’s general contractor.

“There hasn’t been a building built recently that has been this type of construction,” Kessi said. “For the inner Eastside, we are competitively priced.”

TwentyTwenty could prove popular in the Central Eastside. Companies such as Autodesk have grown in the area, which now hosts about 17,000 jobs, according to the city of Portland. Meanwhile, office buildings such as 5 MLK and 7 SE Stark are due to be completed in coming months.

TwentyTwenty also has about 170 parking spaces for its 162 units. Parking has been at a premium in inner East Portland, where infrastructure hasn’t kept up with a boom in technology jobs.

Kessi previously developed The Windward in downtown Lake Oswego. The mixed-use project with 200 apartment units was completed in May 2018. The building is near full occupancy, he said.

Only a few condo buildings have been built in Portland during the past decade of economic expansion. Buyers began moving into Vista in October 2018. So far, 101 of the 153 units have sold, at prices ranging from the mid-$400,000s to more than $3 million, said Marilyn Andersen, principal broker at Hoyt Realty Group.

More people are looking at one-bedroom units, she said.

“We’re getting a lot of people who live in apartments – first-time homebuyers,” Andersen said.

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A 162-unit condominium project under construction in Portland’s Sullivan’s Gulch neighborhood is slated to be topped out with a final post-tensioned deck pour on Friday. Andersen Construction is building TwentyTwenty, designed by Hacker, at the corner of Northeast Multnomah Street and 21st Avenue for PHK Development.

Andersen is self-performing structural concrete work on the building, which rises seven stories above grade and has a two-and-a-half-story parking garage below grade, via subsidiary ASI Structures. Friday’s deck pour will be the 19th conducted on the project, which has presented a unique construction challenge due to the building’s shape. The seven residential floors are Z-shaped and atop a box-shaped parking garage, meaning none of the upper floors’ columns stack into the garage. As a result, the transfer deck was unusually large, with a thickness ranging from 19 to 42 inches and over 800 post-tension cables on the first-floor deck.

Along with completion of the building’s structural core, crews are finishing interior MEP work and prepping for cover on the first floor. Interior wall framing is finishing up to level three, glaziers are installing windows on the second floor, and plumbers are roughing in wet systems on the fifth floor.

According to Glenn Whitefield, Andersen Construction’s project superintendent, the biggest project challenge to date is being able to access the building from only one side. All material deliveries and concrete pours have to happen from Northeast 21st Avenue, which necessitates cautious sequencing and scheduling for deliveries.

Andersen began work on the project in September 2017, and completion is slated for July 2019. The stucco-clad building will contain studios and one- and two-bedroom units, and feature amenities including a fitness room, bike storage and workspace, a pet wash area and a ground-floor outdoor courtyard.

The project team includes Lango Hansen Landscape Architects, civil engineers Humber Design Group Inc., and civil engineers Kramer Gehlen & Associates Inc. The MEP design-build team includes Hunter-Davisson, IES Commercial & Industrial and Jackola Engineering & Architecture.

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Luxury condos, once regarded by developers as a dead end, are making a comeback. The latest example: the ambitious proposal from Portland developer Walt Bowen for a 35-story tower on a full block in downtown.

The Block 216 project would have approximately 148 high-end residential condominiums. The skyscraper would also include a 250-room luxury hotel and 175,000 square feet of office space.

A few other major projects now under construction in Portland include condos, including Vista Condominiums, a 153-unit building in the north Pearl District from Hoyt Street Properties, and TwentyTwenty, a 162-unit project in the Sullivan’s Gulch area, from PHK Development. Also, The Waterfront Vancouver will have 40 condos adjacent to a luxury hotel. That project, from Gramor Development, is expected to be completed in 2020.

The move to build luxury condos represents a modest comeback for the product type. After the economy tanked in 2009, condo development all but halted in the Portland area.

At the same time, a flood of apartment construction in recent years has resulted in a softer market for luxury apartments. Rents in Portland were down 2.2 percent in May compared to a year earlier, according to Apartment List.

Many luxury apartment managers are offering concessions to sign up new residents. In that environment, some developers are looking anew at condos as a more competitive product.

Bowen, in a response to questions via email, stated the Block 216 condos will be unique in the city.

“Portland does not have any high-end, co-branded hotel condominiums like other cities,” stated Bowen, who is president of BPM Real Estate Group. “We believe there is demand for this type of product.”

The condos will begin on the 21st floor, giving buyers commanding downtown views. Bowen also pointed to timing: Vista will deliver more than three years before Block 216 is ready, allowing plenty of time for market absorption.

An alternative multifamily option was explored for Block 216 and rejected, according to Bowen.

“Market-rate apartments are not economically viable for this project,” he stated.

Cost is one of the challenges for condos because they tend to be more expensive to build than apartments. Condos are typically built with concrete and steel stud frames, while apartments often have wood frames. Condo developers also face greater legal liabilities from homeowners.

Patrick Kessi, president of PHK Development, said he does not believe the Portland area will see a rush of condo building.

“I think it’ll be a measured amount of building with condos,” he said.

At TwentyTwenty, condos will start around $300,000 for one-bedroom units and $500,000 for two-bedroom units.

Hoyt Street Properties’ Vista Condominiums in the Pearl District is expected to be completed in October.

So far, 90 of the 153 condos have sold. Tiffany Sweitzer, Hoyt Street Properties’ president, said she expects sales to accelerate once potential buyers are able to tour the units. Prices range from $441,000 to $3.2 million.

“People are not wanting to buy a year or two ahead of time,” she said. “They’re wanting to look at product.”

Sweitzer doesn’t believe condos alone would work at Block 216.

“They have hotel and office that can help their bottom line,” she said. “Could a luxury tower be built without those other components to it? I don’t think so.”

The city’s inclusionary zoning rules pose another significant obstacle for condo developments. The policy requires developers build affordable units or pay a hefty fee. The Block 216 project team has indicated it will take the latter route, with plans to pay $7.5 million into the city’s affordable housing fund.

City officials are looking at possible changes to the policy to address complaints from developers.

The rules are unworkable, Sweitzer said.

“We will not be building for-sale product with the rules that are currently in place, but the rules are in flux,” she said.

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