The nine-year loan is tied to the 10-year treasury and has a 30-year amortization. John Petersen of LJ Melody sourced the loan for Harsch. Neither Harsch President Jordan Schnitzer nor Petersen would discuss the rate on the loan, but other sources tell GlobeSt.com it is likely 170-to-200 basis points over the 10-year treasury.
Schnitzer tells GlobeSt.com his firm has looked at offers from Wall Street lenders before but this is the first time it has accepted one. Schnitzer tells GlobeSt.com it was simply the better offer. Schnitzer adds that Harsch is in the midst of refinancing several other properties as well.
Located off Market Street at 1618 Southwest First Ave., Riviera Plaza is at the south end of Downtown, near the Willamette River. Schnitzer acquired the property from Louis Dreyfus Property Group, which purchased the 31-year-old building in August of 1998 for $9.5 million before adding a floor to the structure, replacing the HVAC and the aluminum exterior and generally refurbishing and re-tenanting the building. It was 98% occupied at the time of sale, with lease expirations generally three-to-five years out.
Don Rasmussen, owner of the Mercedes dealership on the ground floor of the building, signed a new 15-year lease this past summer. Other large tenants include Collins Pine Co., Western Medical Consultants, Compensation Systems Northwest, and Massachusetts Mutual. Full service asking rents in the building are $19- to $21 per sf per year.
Based in Portland, Harsch owns various types of real estate in seven Western states. Harsch invested close to $200 million in real estate in 2002 after investing $150 million in 2001. Riviera Plaza marked the firm's 12th acquisition in 2002 and boosted its local portfolio to more than 2.7 million sf of office, industrial and retail space.
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