Tessera at Orenco Station, a 304-unit multifamily property, was purchased for $85 million.
HILLSBORO, OR—Since 2013, improving economic conditions in the housing market area have led to increased net in-migration, averaging 24,800 people annually, with the Portland, Beaverton-Hillsboro and Vancouver submarkets comprising 47, 28 and 25% of the housing market area total, respectively. Population growth in the Beaverton-Hillsboro submarket is anticipated to continue at the same rate, gaining 9,975 people or 1.4%, a year, reaching 713,300 people by the end of the three-year forecast period or approximately next year, according to the US Department of Housing and Urban Development.
In line with that population growth, a 304-unit multifamily property was recently purchased by Security Properties and Pacific Life Insurance Company for $85 million. Tessera at Orenco Station was built in 2014.
Tessera is located within the outlying suburbs of the Portland metropolitan area. Currently the state's fifth largest city, Hillsboro has an affordable cost of living, a strong economic base and one of the state's most diverse populations.
Often referred to as the Silicon Forest, Hillsboro is most widely recognized for the cluster of high-tech companies located within its boundaries. Case in point, Intel's Ronler Acres campus is now the company's largest operating hub, and the site of its research and development group as well as its most advanced technical operations and top executives. That campus is located less than 1 mile north of the property.
From a retail perspective, Tessera sits in a desirable pocket of Hillsboro. Residents benefit from access to an array of walkable amenities highlighted by the Orenco Station Town Center. The Town Center is located less than ½ mile north of the property and is anchored by a New Seasons Market, Starbucks and a variety of boutique restaurants. The Town Center also hosts a local farmers' market on Sundays. The property offers regional connectivity as the Orenco MAX Station is located just a block south and access to a total of 97 stations covering 60 miles. Major stops along the light rail track include Beaverton (home to Nike's world headquarters), downtown Portland and the Portland International Airport.
“Hillsboro has excellent fundamentals with convenient access to high-paying employers,” says Davis Vaughn, senior director-acquisitions at Security Properties. “With the combination of walkable retail and a location adjacent to the light rail station, we feel Tessera is well positioned to be the top asset in the market once our value-add upgrades are complete.”
The business plan is to upgrade all eight of the property's designated common area spaces to offer top- of-the-market amenities. The interiors will also be updated with vinyl plank flooring throughout all living areas, under-cabinet access lighting and a comprehensive technology package.
“Our exterior upgrades are as follows: front entry renovation, leasing office renovation, gym equipment upgrades, outdoor barbecue area and pool area enhancements,” Vaughn tells GlobeSt.com.
The property will be managed by Security Properties affiliate Security Properties Residential. Security Properties now owns a total of eight assets in the Portland metro.
The Portland submarket is the most populous of the three submarkets in the housing market area, with an estimated population of 1.24 million, followed by the Beaverton-Hillsboro submarket with an estimated population of 683,400 and the Vancouver submarket with approximately 472,200, increasing at average annual rates of 1.1, 1.4, and 1.3% respectively since 2010. Net in-migration in the housing market area has averaged 15,800 people annually since 2010, with nearly 50% being in the Portland submarket, 28% in the Beaverton-Hillsboro submarket and 22% in the Vancouver submarket, according to the department of Housing and Urban Development.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
