When developers Wylie Gibbins and Taylor Kaplan were searching for an underserved multifamily market, they looked to Gresham.

The east Portland suburb had several factors in its favor. Rents were rising to the point that new development could be supported, and job growth was surging – in part because of the arrival of an Amazon warehouse in Troutdale and Vista Logistics Park in Gresham.

Gibbins and Kaplan, who met while working at Williams & Dame Development, formed Gibbins Kaplan Development in 2017. The business partners found they had complementary skill sets, with Gibbins focusing on finance and investor relations, and Kaplan working with architects, contractors and city officials to launch multifamily projects.

Having found a suitable market, the developers next needed access to capital, so they turned to some bigger fish in the business.

Like many industries, real estate development faces a generational gap. Older, established developers enjoy many advantages – typically a long record of successful projects, deep relationships with investors, architects and contractors, and more resources to marshal bigger and more profitable projects.

Younger developers like Gibbins, 42, and Kaplan, 34, sometimes must become a bit scrappy to find opportunities. Enter the older, more established developers.

Gibbins Kaplan Development partnered with Urban Asset Advisors on two multifamily projects in Gresham: The Archibald and Douglas Grove.

“We basically rode shotgun with them on the project,” said Tim O’Brien, president of Urban Asset Advisors. “We helped them where we could, and otherwise stayed out of the way.”

O’Brien introduced Gibbins and Kaplan to one of UAA’s longtime lenders, helping the newer developers access debt.

“We helped raise the equity for the project from local, private investors. Then we went and signed on the bank loan with them,” O’Brien said.

Gibbins Kaplan Development this past summer completed Twelve Mile Crossing, an 82-unit complex in Gresham, in partnership with McKenzie River Company. The complex has 10 three-bedroom units in addition to one- and two-bedroom units. All are occupied.

“There’s a big demand for that (unit size) and a lack of that in Gresham,” Gibbins said.

Now, Gibbins Kaplan Development has forged a partnership with another Portland developer, Capstone Partners. They plan to break ground in June on Arts Plaza Apartments, a 97-unit project in the heart of downtown Gresham expected to be completed in summer 2023. Then construction of West Powell Apartments, a 48-unit complex, is slated to begin in late summer, with completion scheduled for fall 2023.

“Part of my interest is to help promote a good project, but also to help smaller developers,” said Chris Nelson, president of Capstone Partners.

For Gibbins and Kaplan, the partnerships have enabled them to get rolling on projects and establish their firm as a player in the workforce multifamily market.

“We’ve been very fortunate with both Tim and Chris that they’ve provided a lot of mentorship in addition to partnership,” Kaplan said.

Gibbins Kaplan Development does not plan to rely on other developers for long, however. The firm recently closed on another property at 405 N. Third St., that they envision holding their first solo development. The Gresham Arts Plaza property will have approximately 20 units.

The firm has also kept projects moving by using a small roster of industry firms. MWA Architects has designed every Gibbins Kaplan Development project to date, which helps the design process run smoothly, Kaplan said.

“We know we’re not going to have a big surprise,” she said. “Everybody’s done this a few times.”

Douglas Grove and The Archibald were built by LMC Construction. Team Construction, based in Vancouver, Washington, built Twelve Mile Crossing and is performing preconstruction for the projects with Capstone Partners.

Rents in Gresham do not yet support podium construction, Kaplan said, unlike in Beaverton and Hillsboro. To make the Gresham projects financially feasible, the buildings are designed with a minimal amount of steel on the first floor.

“Not only are steel costs going up, but the lead times are going up as well,” Kaplan said. “Designing projects that are responsive to materials’ (cost) increases is increasingly important for controlling your (total) costs.”

Douglas Grove and The Archibald were envisioned as short-term holds. They were put on the market on Jan. 27 by JLL.

All of Gibbins Kaplan Development’s subsequent projects are in an Opportunity Zone and are part of Opportunity Zone funds. As such, they are expected to be 10-year holds to reach the threshold that allows investors to forego paying tax on the capital gains.

Gresham has five contiguous Opportunity Zones. The tax break has helped get Gibbins Kaplan Development’s multifamily projects off the ground, Gibbins said.

“Out here, I think it’s spurring development as the program is intended to do and producing workforce housing,” he said.

Opportunity Zones have attracted criticism for encouraging investment in areas that already had attracted developers’ interest, including Portland’s West End, where a 35-story Ritz-Carlton tower is under construction, and fast-gentrifying areas of West Oakland, California, and San Francisco.

Other developers, including Palindrome Communities and Wood Partners, have targeted Gresham for multifamily development.

“There continues to be a lot of interest in Gresham as a whole, but certainly multifamily,” said Eric Schmidt, assistant city manager for the city of Gresham.

Gibbins and Kaplan have learned how to smoothly navigate the city’s approval processes, Schmidt said.

“They’ve been a great partner with the city,” he said.

The multifamily projects align with the city’s need for more housing, Schmidt said.

“They do great work,” he said. “Each project is just getting continually more dialed in.”

Gibbins and Kaplan said Gresham had been supportive.

“She’s able to key decision makers in Gresham on the phone on the weekend,” Gibbins said of Kaplan, “which doesn’t happen in every jurisdiction.”

The post Teamwork making the dream work in Gresham appeared first on Daily Journal of Commerce.

Nearly three years after the Portland Historic Landmarks Commission approved plans for a mixed-use project in the Central Eastside, crews are nearly done constructing it.

Grand + Belmont, at 514 S.E. Belmont St., in the Buckman neighborhood, will have five wood-framed stories above a two-story post-tensioned concrete podium. The 131 apartments will be a mix of studios, one-bedroom units and two-bedroom units. The ground floor will hold commercial space.

General contractor Lease Crutcher Lewis is leading the team building Grand + Belmont, which is part of an ongoing boom in east Portland. Numerous projects – including the Hyatt Regency Portland at the Oregon Convention Center, 5 MLK, District Office and others – are under way.

Ankrom Moisan Architects designed Grand + Belmont for owner and developer Urban Asset Advisors. The building’s exterior is dominated by brick and dark stucco. Also, there are fiberglass storefronts, black fiberglass windows, metal trim and metal canopies with wood soffits.

“The thing I’ve heard a lot about is that it fits in really well,” Lease Crutcher Lewis senior project manager Matt Baker said. “I think they did a really good job of meeting Landmarks’ expectations on that one.”

Ground was broken on the project in spring 2018, and now the expected completion date is mid-October, Baker said. Earlier this month, tradespeople responsible for drywall, painting, carpentry, cabinetry, elevator mechanics, and mechanical, electrical and plumbing were on site wrapping up their respective scopes of work.

“We’ve got a couple of floors that are in the punch-list phase right now,” Baker said. “Exteriors are pretty much done, and you can see on the penthouse units there still is stucco being done. We’re finishing up the metal, but we’re pouring sidewalks and starting to do all our public improvements so we can get the rest of the storefront up. And that will enclose it all.”

After that, he added, the last critical piece will be the building lobby and finishes, along with the commercial spaces – including at least one restaurant.

Grand + Belmont will also feature a car-stacking machine able to hold up to 44 motor vehicles. The parking is technically at-grade, but the car stacker extends below grade to allow for three levels of vehicles. This allows the machine to circulate the vehicles between levels and return them for driving upon command.

“The stacker pit was interesting,” Baker said. “It’s not in working order yet, but it’s out there and a lot of it’s put up now. That’s probably the most unique part. A lot of these developments go below grade, but these guys saw this, priced it both ways, and found it paid off to go with a huge car stacker matrix with a full-time valet.”

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A new mixed-use building is under construction on Southeast Division Street. LMC Construction is building the Division 33 Flats – three floors of wood-framed apartments over a ground-floor concrete podium with two retail spaces – for developer Urban Asset Advisors. Hacker is the designer of the project, which is adjacent to and across the street from two other mixed-use buildings designed by the firm.

The 30 apartment units of Division 33 Flats will feature 9-foot-tall triple-pocket doors with operable wood shutters and Juliet balconies. Other features will include smooth wall finishes and stainless steel appliances. The building’s Division Street frontage will be clad in brick veneer, with lap siding on the other sides.

Crews began work on the project in June 2017 with demolition of a former two-story commercial building on the 8,800-square-foot site. The building’s upper floors are nearly completely framed, and an insulated flat roof and building wrap are slated to be installed beginning next week. Project completion is expected this June. A second, larger phase of the project, also designed by Hacker and to be built by LMC, is expected to begin this spring on parcels west of the site.

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Bremik Construction is putting the finishing touches on a four-story mixed-use building on Southwest Capitol Highway for developer Urban Asset Advisors. Turnover of the SERA Architects-designed project is slated for later this month; until then, crews will be landscaping, installing finishes in the garage and sheet metal on the exterior, and performing interior touch-ups.

The building consists of four ground-floor retail spaces and an at-grade parking garage, and a total of 70 apartments on the upper floors. The building has a slab-on-grade foundation and a concrete podium, while the upper floors are wood-framed. Floor plans are for studios, one-bedroom or two-bedroom units. The garage will be able to hold 40 vehicles, and the building also features bike storage and amenity space, and a fourth-floor outdoor deck lounge with a grill.

The building’s retail spaces have been leased by Little Big Burger, Spielman Bagels, Unitus Community Credit Union and Blue Star Donuts.

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Urban Asset Advisors is studying the feasibility of two mixed-use projects that could test Portland’s inclusionary zoning rules.

The development firm is proposing a four-story apartment building with ground-floor retail space and parking at 7661 Southwest Capitol Highway in Multnomah Village. The structure of a retired gas station sits on the property.

The building could include 40 to 50 apartments. It would meet community design standards.

Urban Asset Advisors is also considering a second project at Southeast 33rd Avenue and Division Street, where the company is building the 30-unit Division 33 Flats. The developer has not yet closed on the property for the second project.

Whether the proposed projects get built depends on the city’s interpretation of inclusionary zoning rules, said Tim O’Brien, president of Urban Asset Advisors.

“We’re going to see how the city’s interpreting that,” he said.

Both proposed projects are in early development stages, O’Brien said.

“We’re doing much earlier than normal assistance meetings,” he said. “We’re really right now in the feasibility stage on the Division one and the Multnomah one depending on how the city responds in the early assistance meetings.”

City rules require developers of buildings with 20 or more units in mixed-use zones to include affordable units. Developers may designate 15 percent of the units affordable at 80 percent of median family income, or 8 percent of units affordable at 60 percent of median family income. They may also pay a fee in lieu of providing affordable units.

If Urban Asset Advisors’ projects go forward, they would be among the first under the city’s inclusionary zoning mandate, which took effect for new applications beginning Feb. 1.

New development applications for multifamily projects have all but halted in Portland since inclusionary zoning took effect. Some developers have complained the affordability requirements make it difficult to finance or profit from multifamily construction.

The Multnomah Village project is likely to elicit opposition from the neighborhood association. The group raised objections to Urban Asset Advisors’ current project in the neighborhood, the 70-unit Multnomah Village Apartments.

“We don’t want to stop development,” said Martie Sucec, chairwoman of the Multnomah Neighborhood Association. “We certainly don’t want to stop housing. But they’re allowed – in fact, encouraged – not to have enough parking.”

Sucec said she doesn’t want Multnomah Village to go the route of Portland’s Division Street and Alberta Street corridors.

“They kind of destroyed the neighborhoods,” she said.

O’Brien grew up in Multnomah Village.

“I’m very connected to the neighborhood there,” he said. “It’s a great location. It’s got a great vibe and there’s just not a lot of apartments over there.”

Multnomah Village Apartments is on track to be complete by Thanksgiving, O’Brien said. Urban Asset Advisors has signed deals for tenants Little Big Burger, Spielman Bagels and a credit union to occupy the ground-floor space.

The project was designed by SERA Architects. Bremik Construction is serving as general contractor.

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Despite objections from several citizens, the Portland Design Commission on Thursday unanimously (6-0) approved plans for Ladd’s Addition Flats, as designed by Hacker. Commission Chairman David Wark abstained.

The four-story, 45-foot-tall building at 2014 and 2026 S.E. 11th Ave. will include 34 residential units and 1,800 square feet of ground-floor retail space. The design also calls for a courtyard extending into the complex from the street. Four apartments will be on the ground floor and 30 spread among the upper three floors.

Residents raised before commissioners concerns including parking, suitability for the neighborhood and plans to demolish an existing house on the site.

“We have what is called a sun room, which will become a shade room,” said Tasha Danner, who lives northeast of the development. “We are not opposed to development. We do request that certain considerations be put into place – namely our solar rights and reflecting the character of the neighborhood.”

While commissioners were sympathetic to neighbors’ concerns, they said they believe the design presented by Hacker and Urban Asset Advisors met the guidelines to warrant approval. The commissioners’ biggest concern was with the complex’s dark color and how the wood siding would last over time.

“We are only in the front end of the redevelopment that is happening in this neighborhood,” Commissioner Julie Livingston said. “There are 135 households expected to move to Portland in the next 20 years. Neighborhoods in the central city are going to continue to change at an ever-increasing rate. This is one of the stronger proposals that we have seen in the central east side.”

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Portland architecture firms are facing a sharp downturn in multifamily housing work as the city phases in new inclusionary housing rules.

The lack of design work for new apartment projects is just one unintended consequence of the city’s inclusionary housing program that is already being felt.

The drought stems from developers and architects rushing to beat the Feb. 1 effective date for inclusionary housing rules.

Sizable projects submitted beginning Feb. 1 must include affordable apartment units, or a hefty fee must be paid in lieu.

The deadline resulted in a rush of permit application submissions for multifamily projects. City officials say at least 14,000 units are in the pipeline – enough to keep developers busy for at least a couple of years.

The city’s Bureau of Development Services saw dozens of applications for apartment projects land in the weeks leading up to Feb. 1.

The upshot is that architects, developers and others expect few apartment projects of 20 units or more to be submitted in coming months. Already, Portland architecture firms are facing an immediate dry spell.

“The pipeline is empty,” said Alan Jones, principal at Jones Architecture. “We don’t have anything.”

The firm typically designs multifamily projects totaling 300 to 500 units a year, Jones said. The firm has 10 employees.

“We do a lot of housing for a firm of our size,” Jones said.

Now Jones is among the architecture firms looking for work in Portland’s suburbs and other markets that are not affected by the city’s inclusionary housing rules. Architecture firms are also expecting to place more emphasis on office and commercial design work.

“We’re trying to diversify and shift into other sectors,” Jones said. “There’s quite a bit of office work going on, and we’re talking to developers about multifamily projects outside of Portland.

“We’ve been busy with multifamily, but it’s certainly changing.”

Jones said he believed there would be enough design work to avoid laying off staff.

“It’s certainly a concern, but I don’t suspect that’s going to be a problem,” he said.

Other firms are facing similar shortages of multifamily design work.

Five major architecture firms – LRS Architects, Ankrom Moisan Architects, GBD Architects, Bora Architects and SERA Architects – that were contacted by the Daily Journal of Commerce agreed to share information on their multifamily development pipelines on the condition that projects would be reported in aggregate. Only two had any multifamily work in the city of Portland that was not submitted before Feb. 1. One firm is in the early stages of designing a 225-unit apartment project. Another began designing two projects in January with a combined 127 units.

The other two firms had no apartment projects on their drawing boards that had not already been submitted to the city before the Feb. 1 deadline.

“Clearly, the (inclusionary housing) changes are having an impact on the viability of the local market,” said Christopher Linn, principal at Bora Architects.

The architecture firms are doubling down on projects in Portland’s suburbs and other markets, and non-multifamily design work. Bora, for example, is designing a 61,000-square-foot academic building at the University of New Mexico in Albuquerque. Ground was broken Jan. 30.

The city’s design approval decisions extend for three years, so a developer who submitted a project before Feb. 1 has until 2020 to begin construction. That means years could pass before developers get around to building affordable units as envisioned by the inclusionary housing policy.

As developers rushed to meet the Feb. 1 deadline, some projects appeared to be less than fully formed. An application submitted Jan. 27 for a proposed six-story multifamily project in Northwest Portland said the “intention at this time is to be vested under the current code; information to complete the application will be provided at a later date within the allowed 180 days.”

A slew of multifamily projects landed just ahead of the deadline. Cairn Pacific submitted an application Jan. 30 for 350 to 400 residential units at 2135 N.W. 29th Ave. in an industrial area between Slabtown and Forest Park. The project also calls for 150 to 200 parking spaces.

In St. Johns, a limited liability company connected to Maryam E. Bolouri applied for a four-story mixed-use project at 8608 N. Lombard St. The Jan. 30 application calls for ground-floor retail space and parking.

At 2620 S.W. First Ave., near the South Waterfront, a six-story project with 160 units and 80 tuck-under parking stalls was proposed in a Jan. 31 application.

At 829 N. Russell St., a project proposed in a Jan. 31 application would bring 78 micro-studio apartments in five stories.

If the early returns are any indication, Portland may see few new multifamily projects proposed in coming months. No multifamily residential projects were submitted to the Bureau of Development Services Feb. 1-5.

The bureau saw an uptick in applications in the weeks leading up to Feb. 1, said Ross Caron, spokesman for the BDS.

“It’s been busy in general for us for two years now, but I think we did see an increase,” he said.

Caron said it’s unclear if permit applications will slow substantially. It’s a matter of keen interest to the bureau, which receives 97 percent of its revenue from fees for service.

“What we don’t know, obviously, is if this change is going to impact the market to the extent that there won’t be any additional permits to come in,” he said. “We don’t have an answer to that.”

The city’s inclusionary housing rules require developers of projects with 20 units or more to include affordable units. Apartment buildings in mixed-use zones must include 15 percent of apartments affordable at 80 percent of median family income, or 8 percent of units affordable at 60 percent of median family income. Beginning in 2019, the requirements rise to 20 percent and 10 percent of total units, respectively.

In the central city, apartment projects must include 20 percent of units affordable at 80 percent of median family income or 10 percent of units at 60 percent of median family income.

Developers and architects warned of potentially dire economic consequences in the run up to the City Council’s unanimous December vote enacting the affordable housing rules.

Tim O’Brien, president of Urban Asset Advisors, said that some projects are no longer feasible under the new rules.

“Right now, we can’t make projects work in an (inclusionary housing) zone with the cost and the reduction in income,” he said.

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Developers often complain that the city of Portland takes too long and charges too much to process permits. This time, city officials agree.

Mayor Ted Wheeler and Commissioner Chloe Eudaly are co-sponsoring a resolution that would direct city bureaus to accelerate the permitting process and evaluate ways to cut fee amounts for projects that include affordable units.

The proposed resolution is due to be considered at the City Council’s meeting on Thursday. It would direct bureaus involved with permitting – Development Services, Transportation, Fire, Water, Environmental Services and Parks – to examine existing permitting fees and formulate a plan to reduce or waive some in order to promote affordable housing construction.

Wheeler wants to reduce the cost, time and burden placed on affordable housing developers in Portland, spokesman Michael Cox said.

When asked if the fees and charges would be reduced, Cox answered, “Absolutely.”

The changes would apply only to developments that include affordable or workplace units, according to the city’s definitions.

Tim O’Brien, president of Urban Asset Advisors, said high development fees can pose an obstacle to development. His firm typically budgets about $19,000 per apartment unit in city fees and system development charges. Actual costs are coming in slightly lower, he said.

Charges were about $15,000 per unit when Urban Asset Advisors built the Lower Burnside Lofts, O’Brien said. The 63-unit Southeast Portland building was completed in June 2015.

“We’d love to find a way to reduce permit and SDC costs,” he said.

Meanwhile, inclusionary zoning rules will take effect Wednesday, requiring developers to dedicate 15 percent of apartments as affordable units. Many projects will no longer make financial sense, O’Brien said.

“Right now, we can’t make projects work in an (inclusionary zoning) zone with the cost and the reduction in income,” he said. “We just passed on a deal yesterday that we couldn’t make work – a prime location.”

Cox said the resolution is an attempt to improve coordination among the city bureaus – which he said can be “siloed” in their work.

Each city bureau charges its own fees, and the bureaus typically do not harmonize when they raise fees or impose new costs.

“We need those bureaus to work together,” Cox said.

The measure is a companion to an ordinance that is also co-sponsored by Wheeler and Eudaly; it would require landlords who issue no-cause evictions to pay moving costs. The emergency ordinance would take effect immediately, but it requires a unanimous vote with at least four commissioners present.

The post Portland officials aiming to improve permitting process appeared first on Daily Journal of Commerce.

The proposed Grand Belmont building at 514 S.E. Belmont St., got approval from the Historic Landmarks Commission, but at a cost. Originally planned in 2015 as a 23-story tower, it now is due to be a seven-story mixed-use structure.

The original design called for 214 residential units, a rooftop common room with an exterior terrace, three ground-floor retail spaces totaling 6,500 square feet and 102 parking spaces in the podium portion. A smaller 14-story version was also presented as an option.

What finally gained the commission’s approval is a seven-story building with 121 residential units and 6,000 square feet of ground-floor retail space. Parking for 14 cars and 184 bicycles will also be included.

The 81-foot-tall building, however, will stand much shorter than the 240-foot-tall one proposed first. The development will replace a parking lot and Dutch Bros. coffee stand.

The project has been through multiple design iterations and two architects since it was first proposed. Vallaster Corl, the original architect, submitted several proposals for soaring buildings all taller than 10 stories; however, none could get past the landmarks commission.

Design advice requests for the project were submitted to the commission three times, first in August 2015 for a 15-story structure. The building went before the commission again in September 2015 and once more in March 2016.

“It became clear that the commission was most likely not going to support a tower,” said Scott Passman, an architect with Ankrom Moisan Architects.

Facing potential denial for the project, developer Urban Asset Advisors had to choose whether to appeal that likely denial to the Portland City Council or go in an entirely new direction.

“There are a number of factors when determining whether to appeal a project,” said Seth Henderson, Urban Asset Advisors’ vice president of project management. “What is the legal basis for the appeal and the recent history of successful appeals? What are the chances of the appeal being successful based on the individuals sitting on the appellant body? What is the duration of said appeals as well as cost? Who will be paying the cost and will market conditions have improved or declined during the delay? The decision to modify our development approach for this specific property was a culmination of these factors.”

Once the decision was made to change course, the next was to turn the project over to Ankrom Moisan Architects to work on a lower-density design that could pass muster with the Historic Landmarks Commission.

“Ankrom Mosian was originally contracted as the project architect to support Vallaster Corl as the design architect,” Henderson said.

A number of factors led Urban Asset Advisors to turn the project entirely over to Ankrom Moisan, Henderson said. These included the firm’s previous success with the Historic Landmarks Commission as well as experience with a historic overlay of its new headquarters.

“Ankrom Moisan has taken over completely, and we began our design work on the current design beginning in September,” Passman said.

The new design and its 5.73:1 floor area ratio finally got the go-ahead from the commission on Dec. 12.

“It was unanimous, 6-0 (in favor), and the commission could not have been more complimentary,” Passman said. “This is the best we could have gotten.”

The project team will now need to navigate the permitting process before construction can begin. It anticipates a four-month review period and a 16-month construction schedule, with completion targeted for late 2018.

“We will be submitting for a building permit in March and the team hopes to begin construction this summer,” Passman said.

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As a new round of 21st-century towers and smaller multifamily buildings take shape throughout Portland, motor vehicle parking is changing. In many cases, developers are finding they can make do with less parking now than before the recession.

At the same time, city planners are pushing residents away from private vehicle trips. Portland’s newest bridge, Tilikum Crossing, has no room for cars. Neither will Flanders Crossing, a small bridge expected to attract heavy usage when it opens over Interstate 405 in 2018. TriMet has pushed its MAX light-rail system out to Milwaukie and could soon extend it southwest to Bridgeport Village.

Where does that leave parking? Single-occupancy vehicles, though increasingly derided as passé, still are used for the majority of commuting trips.

Most multifamily investors expect to see a healthy amount of parking included in projects.

“We don’t have enough confidence to build a significantly expensive project with no parking at all,” said Greg Goodman, co-president of Downtown Development Group, a major Portland developer. “That said, we’re building it to half a stall per apartment, so we’re not building it in abundance.”

Downtown Development Group is at work at Southwest Third Avenue and Ash Street on a multifamily building that will include one floor of underground parking. The company also is working with Gerding Edlen at Southwest 11th Avenue and Washington Street on a proposed 30-story tower that, as initially envisioned, would include four floors of underground parking. A pre-application conference for that project is scheduled for Sept. 6.

Parking remains essential for large projects, Goodman said.

“Building parking is expensive,” he said. “If we could, we’d build no parking, but the reality is we’d be afraid we wouldn’t lease out our buildings downtown.”

Park Avenue West, one of Portland’s tallest buildings, was completed earlier this year and has ample parking. The building at 760 S.W. Ninth Ave. has 249 parking spaces for its 202 residential units and 13 floors of office space. Park Avenue West tenants also have access to 1,179 additional parking spaces at Fox Tower and Director Park.

“Parking is a critical component to negotiating a (commercial) lease,” said Vanessa Sturgeon, president and CEO of TMT Development, which developed Park Avenue West.

Office tenants expect one parking stall per 1,250 square feet of office space, Sturgeon said.

“As much as we like to think people are finding different modalities to get into and out of town, the demand for parking has not changed,” she said.

At Park Avenue West, creating space for so much parking wasn’t easy. Crews dug 95 feet below ground to accommodate six floors of parking.

“Park Avenue West is the deepest hole ever dug in the city of Portland,” Sturgeon said.

The hole couldn’t be any deeper.

“We were really constrained because of the water table,” she said. “We went down as deep as we could go, and we went below sea level, actually.”

Demand for downtown parking could have supported far more spaces, Sturgeon said.

“If we had been able to do double the amount of parking, we would have been able to utilize all of it,” she said.

TMT plans to include parking in its future developments, Sturgeon added.

At present, the city of Portland requires parking for sites with more than 30 apartment units, and more spaces are required for larger projects. For a site with 31 to 40 apartments, 0.20 parking spaces per apartment are required. For a site with 41 to 50 units, 0.25 parking spaces per unit are required. For a site with 51 units or more, 0.33 parking spaces per unit are required.

Urban Asset Advisors is at work on four projects. Of those, three include parking. The one that doesn’t is an eastside project for which the developer has land under contract but has not closed. The lot’s frontage is too small to accommodate underground parking, said Tim O’Brien, president of Urban Asset Advisors.

“In general, we believe every project should have parking to the extent you can get it in,” he said.

Urban Asset Advisors is constructing Couch 9 in the Pearl District. The development will have 69 parking spaces for 136 apartment units, or 0.51 spaces per unit. After Couch 9 is completed, Urban Asset Advisors will rent the spaces.

Portland parking spaces are renting for about $165 a month to more than $200 a month, O’Brien said.

The amount of parking in a given development is determined largely by location.

“The closer the project is to transit and bicycle corridors and walkability to employment centers, the less parking you need,” O’Brien said.

Investors are not demanding as much parking as they did a few years ago, when a 1-to-1 ratio was expected – a parking space for each apartment unit. A couple of years ago, the typical threshold had fallen to 0.6 parking spaces per multifamily unit.

The Cordelia Apartments, a 135-unit building developed by Mill Creek Residential Trust in 2014, raised eyebrows when it came in below 0.5 parking spaces per unit. Other projects have since been built with even fewer spaces per unit.

“Our overall thinking about it is that parking ratios do continue to decline,” O’Brien said.

Parking is still regarded as a worthwhile amenity, and investors tend to frown on projects with too little parking.

“Investors definitely are the tail that wags the dog,” O’Brien said.

Parking also helps ensure the long-term viability of a project, he added.

“You have to have a good exit strategy,” he said. “Not only is it the right thing to do and socially responsible, but it makes the project more viable and more marketable.”

When a lot is too small for underground parking, technology can play a role. For Quimby19, a 90-unit development in Northwest Portland, Urban Asset Advisors ended up using a mechanical stacking parking system. The development features 13 surface spaces and 34 in the mechanical system.

That ended up saving money, O’Brien said. Typical parking spaces cost about $50,000 each, while mechanized spaces cost about $30,000 each.

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