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676,000-SF Montgomery Park Building Stabilizes

PORTLAND, OR-When the Naito family feud was settled out of court last January with a division of assets, vacancy in the family's Northwest Portland landmark was over 30%. One year later, its two anchors have re-upped, several new tenants have signed on and vacancy is headed for single digits.

By Brian K. Miller | Updated on January 10, 2006

PORTLAND, OR-The nine-story, 676,000-sf Montgomery Park office building here is recovering nicely. When the Naito family feud was settled out of court last January with a division of assets, vacancy in the family’s Northwest Portland landmark was over 30% and some big leases were nearing expiration. One year later, thanks in part to an active fourth quarter, two anchors totaling 240,000 sf have renewed their leases, 90,000-sf of new leases have been signed and vacancy is headed for single digits.

In the last few weeks, Zones Inc., an Auburn, WA-based catalog reseller of computers and accessories, inked a 22,550-sf, 10-year lease for the sixth floor of the massive nine-story building and World Travel Inc., expanded from 10,000 sf to 17,000 sf. Earlier in the fourth quarter, Freightliner renewed its lease for 111,000 sf, Wells Fargo renewed its 128,000-sf lease, UPS signed on for 38,000 sf and Schnitzer Steel signed on for 10,000 sf. The rapid recovery allowed the property owners to close on a $65-million refinancing at the end of November.

“I have no doubt that it will be well north of 90% occupied within the next 60 days,” says Ed Gambee, the GMAC Commercial Mortgage broker who arranged the 10-year, 75% (loan-to-value) financing, which has a 30-year amortization schedule and an interest rate in the mid-5% range. “They’ve got some significant momentum going over there.”

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