Office/Industrial Activity Pushes Onward in Portland
Despite self-quarantine and social distancing, there was activity in the commercial real estate industry during the first quarter, and Cushman & Wakefield reports new office and industrial deliveries, sales and leases.
PORTLAND, OR—While Portland retail establishments, restaurants, passenger transportation, schools and leisure activities have almost all ground to a halt while customers self-quarantine and practice social distancing, there was activity in the commercial real estate industry during the first quarter. A report from Cushman & Wakefield highlights new office and industrial inventory deliveries, sales and leases.
Portland’s office market has recently welcomed 354,000 square feet of new class-A office inventory to the CBD’s central core since year-end 2019. This includes completions such as Exchange Block, a class-A creative full block headquarters opportunity, and 250 Taylor, already fully leased by Northwest Natural Gas.
“Additionally, District Office and the Tree Farm are two other notable office developments delivered in Portland’s Close-in Eastside submarket, totaling a combined 129,000 square feet of new class-A product,” Samuel Hatcher, Cushman & Wakefield research analyst, tells GlobeSt.com. “Another highlight was the recent sale of the condominium interest for the Office Unit in Broadway Tower, likely the most notable office sale of the first quarter. The 175,000-square-foot class-A office space traded for $132.3 million or $756 per square foot, setting a new high-water mark for office investment activity in Portland.”
Broadway Tower is located in the Central Core submarket. It was purchased by Principal Real Estate Investors and sold by BPM Real Estate Group.
One of the two key office lease transactions in the first quarter was located at 1250 NW 9th St. in Close-In Northwest. The tenant in the 40,100-square-foot lease was Ampere. The other notable office lease was located at 7 SE Stark St. in Close-In Eastside. The tenant in the 30,669-square-foot new lease was Apple.
On the industrial front, interest from developers and users alike maintained momentum through the first quarter of 2020. Limited land supply and the restrictions of Portland’s urban growth boundary have recently forced developers to explore strategic options near Salem.
“However, we’re tracking 2.8 million square feet of industrial warehouse and distribution product currently under construction in Portland’s metro, on par for the current demand levels,” Hatcher tells GlobeSt.com. “The largest industrial lease of the first quarter was Core Mark, a cold food and beverage distribution company, taking 243,000 square feet in Southeast Portland.”
Accounting for the quarter’s largest industrial lease, this property is located 17225 SE 120th Ave. in the Clackamas/Milwaukie submarket. The quarter’s other large lease occurred at 5499 S. 11th St. in Vancouver/Clark counties. The tenant, Simonds International, leased 117,145 square feet of warehouse/distribution space.
The most significant industrial sale transaction was a multi-property portfolio consisting of 188,139 square feet in Clackamas/Milwaukie. It went to buyer Prologis for $32 million or $170 per square foot. The seller was Jameson Partners.