G&E Lands 33-Acre Assignment From City

PORTLAND, OR-The local office of Grubb & Ellis is taking over the marketing and sales assignment for the city-owned Riverside Parkway Corporate Center. The 33-acre industrial property in the heart of the northeast Portland industrial corridor is owned by the Portland Development Commission, the city’s urban renewal and economic development agency. Grubb & Ellis executive Brad Fletcher and brokers Linda Craig and Irfan Tahir are leading the disposition effort.The PDC acquired the land in order to ensure property in the Columbia Corridor remained available for companies that want to participate in the PDC’s Quality Jobs Program. The Quality Jobs Program rewards those companies who employ a higher-than-average number of people per sf for an industrial-zoned property and also pay higher-than-average wages and invest more in the city. The two main requirements of that program are that the user establishes a job density of one employee per 800 sf or less of building area and pay an average of at least 200% of Oregon’s minimum wage, which is now $7.25 per hour. In addition, companies may also participate in the Economic Opportunity Fund. That program provides incentives to companies investing in PDC’s Urban Renewal Areas, and RPCC falls within the Airport Way Urban Renewal Area.G&E’s Fletcher tells GlobeSt.com that all the obvious local brokerage firms competed for the work, which is a standard one-year extendable brokerage assignment. “This assignment is of special interest to me because it’s the right thing to do,” says Fletcher, who in 1988 interrupted his brokerage career to do a three-year stint as the first official business development executive for the State of Oregon, during which he recruited Intel’s multibillion-dollar D1A fabrication plant. “In the end, we only have so much land so it makes sense that we promote industrial expansion that creates family-wage jobs.”As for the amount of interest he expects for the property, Fletcher says the time is right for Riverside Parkway Corporate Center. “With over $1.7 million of infrastructure in place and development-ready sites for buildings from 40,000 sf to 250,000 sf, I believe it will find strong market acceptance with the region’s corporate users as well as companies seeking Oregon as a site location,” he tells GlobeSt.com. “We intend to generate significant interest in the project. These are quality sites in an established corporate environment. The economy is gaining momentum and we intend to see every deal.”Panattoni Development originally held the $7.2-million purchase option for the land (which originally included 38.85 acres) from the Spada family, but instead transferred the option to the PDC in exchange for the exclusive right to acquire and develop the property for businesses. As part of the deal, Panattoni was required to take down five acres every 18 months and 20 acres over the first five years of the agreement once infrastructure improvements were complete. The timer began sometime in the first half of 2003. Panattoni hired local broker Don Ossey, now with Capacity Commercial, to market the land, but aside from one quick deal early in the game, interested parties were few and far between. “The job-density requirement eliminates distribution as a use, leaving manufacturing as the only option, and manufacturing companies haven’t been as active as distributors,” Ossey tells GlobeSt.com “As manufacturing needs increase, so too will sales of that property.” Panattoni ultimately only took down one five-acre parcel–for about $1.30 per sf more than the PDC paid for the land–for a 68,000-sf $5-million build-to-suit for Portland Hospital Service Corp. Owned by Legacy Health System, Kaiser Permanente and Providence Health System, the company employs approximately 150 and processes 20 million pounds of healthcare textiles and linens each year for 12 hospitals and 53 medical/dental clinics in the region.Across the way from the PDC’s land, Panattoni is now speculatively developing a 250,000-sf building on a 15.5-acre parcel it acquired from the Spadas in a separate transaction. That project is known as Riverside Parkway Corporate Center North. Ossey has the marketing assignment.