"The county is in economic dire straits," Peter Wilcox of the county's facilities and property management division tells GlobeSt.com. "When you have underutilized resources and hundreds of employees being cut, the first thing you do is get out of buildings with tremendous deferred maintenance coming due."
The county will soon put out a request for offers for the Morrison Building, a 38,000-sf two-story building at Southeast 21st and Morrison Street, adjacent a local cemetery. The county also will be selling the Gresham Neighborhood Center, a 25ksf building in Downtown Gresham. "We're aggressively selling those and looking at others as well," says Wilcox.
With any luck, the sales will go more smoothly than its recent sale of the 95, 582-sf Ford Building at Southeast 11th Avenue and Division Street. When the county put out a request for offers, it got only one and it was well below the appraised market value of $2.4 million. Wilcox says that sale was ultimately nixed because the buyer didn't meet certain deadlines. When the RFO was reissued, again only one offer came back, but this time, at $2.1 million, it was closer to the appraised value, though the county ultimately had to carry the contract to close the deal.
Local brokers tell GlobeSt.com the building should have sold for a much higher price, but Wilcox says there is as much as $2 million worth of deferred maintenance that must be completed, which lowered the price. The buyer's 20-year loan carries an interest rate of 6.25%. Wilcox says the county is carrying the contract so it will make more money on the sale in the long run. Offsetting that somewhat is the fact that the city is now leasing back some 56,000 sf at least through the end of the year until it finds other storage space.
The buyer was Dale Bernard of Cantebury Real Estate Services and Hammond Building Cos., which Wilcox says owns quite a few other major properties in the area and is experienced in large-scale renovations. An independent appraisal found that if someone spent between $2 million and $3 million, they could more than double their money, says Wilcox. Wilcox says the county couldn't take advantage of that potential because "we're not in the business of real estate speculation" and "the county's capital budget is an empty shell."
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