JV Leases Port Land for 450,000-SF Logistics Center

PORTLAND-Port of Portland commissioners this week approved a long-term ground lease of 21.3 acres in the Rivergate Industrial District to a joint venture that wants to develop Bybee Lake Logistics Center, a 450,000-sf multi-tenant warehouse and distribution facility. This $4.59-million lease is contingent on City of Portland approval of the project’s size and site layout. The property is located at the intersection of North Bybee Lake Court and North Leadbetter Road. The pre-paid lease has an initial term of 55 years plus six, 5-year extension options. The $4.59-million price for the initial term is based on a land value of $4.95 per sf. The prepaid rent is due by June 30, 2005. The lease also includes assignment rights to Bybee Lake Logistics Center, LLC, if certain conditions are satisfied.The developer is a joint venture Capstone Partners LLC, a local development company, and REEF Rivergate LLC, whose sole member is The Bank of New York Trust Company N.A., in its capacity as trustee for Washington Capital Management Real Estate Equity Fund. The fund is putting up the vast majority of the equity. Capstone has a small equity stake plus an earn-out provision and is the fee developer for the project.Capstone principal Chris Nelson tells GlobeSt.com the reason for the project is the lack of other available product and the improving local economy. With the unemployment rate at a three-year low, industrial vacancy now under 10% and only one modern industrial building with more than 200,000 sf of contiguous availability in the Rivergate area, Washington Capital Management and Capstone feel it is a good time to be developing new product. “We think it will be well positioned,” says Nelson.Project construction is scheduled to begin in July and be completed in March 2006. According to Port officials, the developer wants to provide an additional large distribution facility to support the Port’s Terminal 6 container facility customers and other regional businesses. Capstone has handed the leasing assignment for the property to Colliers brokers Paul Breuer and Steve Barragar.