NWEA Expands at Kruse Woods V

LAKE OSWEGO, OR-The national nonprofit Northwest Evaluation Association has expanded at Kruse Woods V, a 184,000-sf building off Kruse Way here that is owned by publicly traded Equity Office Properties. NWEA inked a long-term lease for 15,729 sf, soaking up the remaining available space in the building and taking its total leasehold there to 108,448 sf, or about 59% of the building.NWEA was the first tenant to occupy Kruse Woods V after it was completed in September 2003. It now occupies five of its eight floors. Greg Hume of Hume Myers Tenant Counsel represented Northwest Evaluation Association in the transaction. EOP was represented in-house by Matt Cole, managing director leasing for its Portland portfolio.Kruse Way is located immediately east of Interstate 5 about eight miles south of Downtown Portland. EOP owns 1.5 million sf in 18 buildings in the submarket. The entire Kruse Way submarket totals about two million sf, which means EOP has a 70% market share. Vacancy in EOP’s Kruse Way portfolio is about 5% and the submarket as a whole is under 8% vacant, according to recent statistics. Given the tightness of the submarket, Equity Office plans to break ground soon for Kruse Oaks II, a 107,490-sf office building that will sit on 4.5 acres at 5400 SW Meadows Road, which runs parallel to Kruse Way. Completion of the building is slated for the third quarter of 2006. The annualized asking rate for Kruse Oaks II is expected to be at least $30 per sf, full service, which is $0.50 beyond its most recently built product on Kruse Way, according to research by Grubb & Ellis. EOP’s Portland area managing director Matt Cole told GlobeSt.com this spring that he expects demand for Kruse Oaks II to come from existing Kruse Way tenants–and those in neighboring submarkets such as Washington Square–that want to grow while remaining in the area. The general contractor for the project is C. Schiewe & Assoc. of Portland. The architect is Group Mackenzie. EOP has two remaining development sites in the Kruse Way submarket. They are located immediately west of the Kruse Oaks II site and can hold similar size buildings.