Portland’s Towne Storage building has earned a record price on a per-square-foot basis.

The building traded for $62.75 million, according to Multnomah County records. The sale was recorded April 23.

The sale equated to $630 per square foot for the approximately 100,000-square-foot building, beating the previous record for Portland office space of $565 per square foot for Pearl West, according to Jones Lang LaSalle research.

CBRE Global Investors purchased the building from an entity of Westport Capital Partners. NKF Capital Markets represented Westport, while CBRE represented itself.

The high price reflects the strength of the tenant, said Patricia Raicht, senior vice president for research at JLL. The building is fully leased by Autodesk, a software maker for architecture and engineering, construction and entertainment applications. The company moved into the building, near the Burnside Bridge’s east end, from Lake Oswego.

“They have a credit tenant with an 11-year lease in there,” Raicht said.

Investors have been willing to pay a premium for buildings with long-term tenants. The Wieden + Kennedy building sold for $103.25 million, or $556 per square foot, last year to an institutional buyer.

The sale also shows bustling office demand in the Central Eastside industrial District. Developers are rushing in with projects such as Platform by Project^. That proposal calls for new construction of 140,000 square feet of office space.

The Towne Storage building originally opened in 1916 and was once home to a wholesale paper distributor. LRS Architects designed an adaptive reuse project to update the unreinforced masonry building, and Bremik Construction served as the general contractor. Sentinel Development was the developer.

Fortis Construction performed the tenant improvements for Autodesk, with design by Mackenzie.

Editor’s Note: This article has been corrected from an earlier version that misstated the price per square foot.

The post Towne Storage building fetches record price appeared first on Daily Journal of Commerce.

A celebration was held Aug. 24 to mark the completion of core and shell renovations to the Towne Storage building in the Central Eastside. Bremik Construction served as the general contractor on the project, which was designed by LRS Architects for developer Sentinel Development and owner Westport Capital Partners.

The 16-month project was built in phases. The first phase included interior demolition of the building, a 102-year-old warehouse that had been divided into multiple art studio spaces, and seismic upgrades, which included installation of concrete shear walls, two new steel brace frames, and supporting the building on a series of new micropiles reaching as far as 130 feet deep.

The second phase of construction saw envelope improvements, including window rehabilitation and replacements, a new roof, masonry and concrete restoration, and new entries. It also included the addition of the building’s sixth floor and a 4,000-square-foot roof deck, restoration of a the building’s water tower, new MEP/fire safety systems, and a new elevator core.

The entire building has been leased by software maker Autodesk, which will relocate from Lake Oswego. Fortis Construction will be the contractor on the tenant improvement, which was designed by Mackenzie.

The post Photos: Towne Storage building renovation wraps appeared first on Daily Journal of Commerce.

Political uncertainty was foremost on the minds of developers and real estate investors at NAIOP Oregon‘s development forum on Wednesday.

Locally, Mayor-elect Ted Wheeler’s incoming administration was the source of hope among developers. But the election of Chloe Eudaly as city commissioner was cited as an uncertainty. And a raft of city policies, including inclusionary zoning and rent control, loomed over the discussion held at the Sentinel Hotel.

“We left the meeting feeling very hopeful about his administration moving forward,” Barragar said.

Portland’s city leaders need to provide a more business-friendly environment, said Jordan Schnitzer, president of Harsch Investment Properties.

“From my perspective, we haven’t had business-friendly leadership statewide or citywide in many years,” he said.

Schnitzer’s comments came despite a development boom that has reached a fever pitch this fall.

He also waded into the City Council race that bounced incumbent Steve Novick. Schnitzer referred to Eudaly as “that gal that beat Steve Novick.”

“We have someone on City Council not a lot of folks in this room have a relationship with or know,” he said. “Is that good or bad? Time will tell.”

Eric Clapp, managing director of Westport Capital Partners LLC, said Portland is friendlier to development than some markets in California. He said he’s worked in places such as Laguna Beach, California, and Napa Valley that “make Portland look business-friendly.”

Rob Hinnen, founding partner of developer Cairn Pacific, said President-elect Donald Trump’s pledges of new infrastructure spending “could certainly be good for our business.”

The pace of multifamily development in Portland is unsustainable, Hinnen said.

“I’ve felt like it’s been overheated for a while,” he said. “I might be wrong about that – eventually I’ll be right.”

Wood-frame apartment construction in particular has seen sharp increases in construction costs, Hinnen said.

“I do think the cycle is mature,” he said. “It’s time to be careful in how deals are structured. Understand your debt, understand your equity, understand your covenants.”

Developers have less exposure than before previous recessions, Hinnen said, minimizing the downside risks if the market turns south.

Cairn Pacific is busy transforming the Slabtown area of Northwest Portland with a mix of multifamily, office, retail and parking development.

Westport Capital Partners is at work along with Sentinel Development on a renovation of the Towne Storage building at the east end of the Burnside Bridge. The seismic retrofit of the 101-year-old building is complete, and construction is under way, Clapp said.

Westport Capital Partners was persistent in looking for a Portland property to develop, Clapp said.

“It’s an emerging city with a lot of good fundamentals,” he said.

Harsch will start construction this month on a nine-story creative office and retail building at 151 S.E. Alder St. in the Central Eastside, Schnitzer said. The 90,000-square-foot building is being designed by Works Partnership Architecture.

Looking outside the Portland market, Harsch has in recent months bought up industrial properties in Nevada and California.

Schnitzer said Harsch is holding off on building a multifamily tower at 18th Avenue and Alder Street, near Providence Park, to wait on Portland’s market to absorb recent multifamily construction.

“If we get started on this, it’ll probably be (2019),” he said.

Hinnen said that timing makes sense. Cairn Pacific also has plans for projects to begin then, he said.

“That sounds like the right timeframe when the construction industry will be hungry again,” he said.

The developer is pursuing city approval for a multifamily project at the George Morlan Plumbing building, at 2222 N.W. Raleigh St. Construction could begin around 2019.

Rents may be flat or falling at the moment, and more buildings are offering concessions, Hinnen said.

“Long-term I’m very bullish about apartments in Portland,” he said. “I might be cautious in the short term, but bullish in the long term.”

The post In wake of elections, developers ponder future appeared first on Daily Journal of Commerce.