In February, the Palo Alto, CA-based company paid $25 million for Evergreen Corporate Center, a 266,000 sf flex-office park also in Hillsboro. The park's four buildings were more than half empty at the time of sale.
Ronler Corporate Center was acquired from Bengreen LLC, an entity of Portland-based Rembold Cos., which has owned the property since its development in 1999. The deal was brokered by Tim Parker and Pat Schreck of Portland-based Melvin Mark Brokerage Co. Evergreen Corporate Center was acquired from the brokerage firm's parent company Melvin Mark Cos.
Intel leases about 75% of the park, fully occupying two buildings and sharing a third with Novellus. The fourth building, which was vacated at the end of last year, is being marketed for lease by Melvin Mark Brokerage. Parker tells GlobeSt.com the triple-net asking lease rate is $0.92 per sf based on a five-year lease and a basic tenant improvement allowance.
"The space in such good shape, it really doesn't need a lot of work," he says.
Ronler is the third park to change hands in the past 10 months in the Sunset Corridor, which includes the cities of Hillsboro and Beaverton. Earlier this month, the five-building 171,828-sf Nimbus Oaks office-flex park in Beaverton changed hands for $25 million. A separate account client of Rreef acquired the 94%leased park from a partnership of Schnitzer Investment Corp, Schnitzer Trust Partners and principals of the Melvin Mark Cos.
In October, the 13-building, 580,000-sf Woodside Corporate Park in Beaverton changed hands for $67.48 million. Publicly held PS Business Parks sold the 75% leased park to a group of tenant-in-common investors and a value-add fund, both of which were represented by Santa Ana, CA-based Triple Net Properties LLC. In August, a joint venture of locally based ScanlanKemperBard Cos. and the latest fund of the Praedium Group of New York City acquired 40% (536,500 sf) of Amberglen Business Center for $54.82 million. The deal represents about 40% of the park's square footage. The portfolio's overall occupancy is 66%.
The Sunset Corridor flex market west of Portland is in the early stages of a recovery, sparked by a lack of availability in the Washington Square/Kruse Way submarket south of Portland around the confluence of Interstate 5 and Highway 217. Vacancy in the Sunset Corridor's 4.8 million-sf flex market peaked at 31% in 2003, according to Grubb & Ellis.
The percentage was down to 25% at the end of March and has fallen further in the second quarter, G&E's director of research Patricia Raicht tells GlobeSt.com. Significant deals in the second quarters include a 28,000-sf lease by Netflix at Alocleck Corporate Center and a 62,000-sf lease by Micropower at Milliken Business Center.
G&E listed Woodside for sale and has the leasing assignment for both Woodside and SKB's portion of Amberglen. Eric Haskins of Grubb & Ellis tells GlobeSt.com the prospect of a recovery is attracting the investors, which in turn is allowing developers to sell assets and put the money into other ventures.
"Investors are looking at the market, seeing the tightness around I-5 and 217 and thinking the demand has no where to go but out 217 to the Sunset Corridor," says Haskins. "So when there is something up for grabs out there and it makes sense, companies like Broadreach are being aggressive and staking a strong claim out there."Broadreach recently closed it second discretionary fund with $700 million of equity. Like its first value-add discretionary fund that now fully invested, BRCP-II LP is investing in the acquisition, re-development and development of commercial, mixed-use, and land in the western US.
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