27,000-SF Lease Deal Closes Amid Sale

PORTLAND, OR-LandAmerica Financial Group Inc., the title insurance company has leased 27,000 sf in the Jantzen Park Building, a 190,000-sf class B office building here that is under contract to be sold to Seattle-based residential developer Holt Homes. Adding to the complexity, LandAmerica’s lease starts out as a sublease with Adidas and then goes direct with the soon-to-be new owner after the shoemaker’s commitment for 70,000 sf in the building runs out in December 2005.As things now stand, however, the building is economically 95% occupied. The sale is expected to close by the end of August. The negotiated sale price was not immediately available, but the list price for the property was $12 million, including a parking lot and two small buildings located across the street. The buyer has long-term intentions of converting the property to residential condominiums at some point, a local broker familiar with the transaction tells GlobeSt.com. Neither the buyer nor the seller, Block 7 & 8 LLC, could be reached for comment. The seller’s broker, Mike Kapnick of Marcus & Millichap, tells GlobeSt.com that the sale, which has been under contract since the beginning of the year, involves the assumption of the existing financing on the property.Adidas’ broker Jeff Falconer of Capacity Commercial in Portland tells GlobeSt.com that LandAmerica’s lease was signed in April but had to be renegotiated after the city required that landscaping be added to the parking lot. It took two months to work through the change, but tenant improvements are now underway and LandAmerica is expected to occupy the space in the next 30 days, says Falconer. LandAmerica is moving its title plant to the building from Dennis Sivers’ Airport Center property. Jennifer Medak, Bill Smith and John Medak of Norris, Beggs & Simpson represented LandAmerica, but could not be reached for comment. “(LandAmerica) felt they were too far removed from their customer base,” says Falconer. The details of the negotiated lease rate aren’t being revealed by the parties involved, but the market rate for the sublease space is $1,250 per sf per year and the direct space is being marketed for lease at $16 per sf per year.