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MEPT Buys In as New Condo Tower Becomes Rental

PORTLAND-Multi-Employer Property Trust is buying into a new high-rise residential tower here in a $145-million transaction.

By Brian K. Miller | Updated on May 29, 2008

PORTLAND-With condo sales slowing to a trickle and apartment vacancy in the low single digits, the developers of a 323-unit condominium project nearing completion in the South Waterfront district here have converted the project to rentals and are recapitalizing the asset in “a $145-million transaction” set to close in August. The development group includes locally owned Gerding Edlen Development Co. and Williams & Dame Development among others.

Come August that group will include Multi-Employer Property Trust, a union benefit fund (aka Taft Hartley fund) whose investments are managed by Seattle-based Kennedy Associates Real Estate Counsel. The announcement by Gerding Edlen did not say how much of the $145 million MEPT would be putting up or what percentage of the project it would get in return, only that MEPT would be the “primary joint venture partner.”

The transaction value is less than the project’s total development cost, according to the project’s construction lender. How much less was not immediately known, however, and neither Gerding Edlen principal Mark Edlen nor Kennedy executive vice president Preston Sargent could be reached Thursday morning for comment. A source with Gerding Edlen declined to provide the total development cost but alluded that, when “avoided costs” related to selling the project as condos are accounted for — such as marketing expenses and sales commissions — the total development cost may be at or below the transaction value.

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