Louis Dreyfus purchased the 31-year-old building in August of 1998 for $9.5 million, or $73 per sf. In 2000, the company added a floor to the structure, replaced the HVAC, replaced the aluminum exterior and generally refurbished and re-tenanted the building, which is 98% occupied with lease expirations generally three-to-five years out. Full service asking rents in the building are $19- to $21 per sf.
Don Rasmussen, owner of the Mercedes dealership on the ground floor of the building, signed a new 15-year lease this past summer. "After being his customer for years, now he's a customer of ours," quips Harsch Investment President Jordan Schnitzer, who spoke with GlobeSt.com about the deal. Other large tenants include Collins Pine Co., Western Medical Consultants, Compensation Systems Northwest, and Massachusetts Mutual.
Located off Market Street at 1618 Southwest First Ave., Riviera Plaza is at the south end of Downtown, near the Willamette River. Ron Beltz, Louis Dreyfus' top dog in Portland couldn't immediately be reached for comment Tuesday on exactly how much was spent upgrading the asset, why the company decided to sell the building at this time and what kind of interest it attracted.
Schnitzer says the building's "excellent location and tenant roster" lured multiple would-be buyers. "There was fierce competition to buy this," says Schnitzer, who closed the deal in 20 days after 30 days of due diligence. "There were a number of offers."
Based in Portland, Harsch owns various types of real estate in seven Western states. The company invested $150 million in real estate nationally in 2001, finishing the year with $1.1 billion in assets, 425 employees and more than 7,500 tenants. Schnitzer says the company will invest closer to $200 million in 2002. Riviera Plaza marks the firm's 12th acquisition this year on a national basis and boosts its local portfolio to more than 2.7 million sf of office, industrial and retail space. Chris Johnson and Gene Bentley of Norris Beggs & Simpson brokered the sale.
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