[MarkDaMan]

Big chunks of office space
Pearl District sites meet demand for lots of square feet
Portland Business Journal - June 29, 2007
by Wendy Culverwell
Business Journal staff writer

With construction of Portland's next skyscraper still years in the offing, a handful of other projects are not-so-quietly in the works, promising to bring nearly 200,000 square feet of new office space to the Pearl District.

Brokers call them small jewels that will serve as relief valves to the pressure for space in Portland's strong office market. With no new buildings expected to open in downtown before 2010 at the earliest, small buildings with blocks of 20,000 to 80,000 square feet of office present the city's largest tenants options that don't currently exist.

The best known of the little gems is Lovejoy Station, a two-block project by Unico Properties Inc., the Seattle-based firm that owns and operates U.S. Bancorp Tower. Other veteran developers are working on a handful of mixed-use projects that will bring chunks of office space to the district and the nearby North Park Blocks.

Lovejoy Station opens in fall 2008 and is already known as the building that will have a Safeway store at ground level. But it will also have 80,000 square feet of office space on three levels.

Construction is in full swing along Northwest Flanders Street between 13th and 15th avenues.

Mark Friel, a broker with Grubb & Ellis, is representing the office space to prospective tenants.

He said interest is high, even among tenants needing tens of thousands of square feet. With few options in the Pearl District or even downtown, firms needing 20,000 square feet or more have fewer than five buildings to choose from. Lovejoy Station can accommodate several big users, or many small ones.

Chief among the building's many selling points is its Lovejoy address, Friel said. Northwest Lovejoy Street provides access to Northwest 23rd Avenue to the west and the Broadway Bridge to the east, putting the property within easy reach for commuters.

That's exactly why Unico incorporated office space into its plans for Lovejoy Station, said Brian Pearce, who manages Unico's Portland properties.

"There is an absolute willingness by tenants to locate their offices in the Pearl," he said.

The precedent for the spate of new mixed-use projects is the Brewery Blocks, the Class A mixture of office, retail and residential space developed by Gerding Edlen Development Co. LLC on the site of the old Blitz Weinhard Brewery.

The Brewery Blocks had its skeptics, but ended up attracting top-drawer tenants such as law firm Perkins Coie, benefits firm M Financial and GBD Architects to the north side of West Burnside.

"We think [Lovejoy Station] is going to fill a great need for people who want their offices in the cool up-and-coming area of town," Pearce said.

Kitty-corner from Lovejoy Station, Al Solheim and partner Rich Ford recently launched Machine Works, a mixed-use structure that is displacing the former Jackson Machine Works building.

Once asbestos is removed, the old machine shop will be demolished and eventually replaced with a muscular nine-story building with 69,000 square feet of office space on four of them.

L.A. Fitness has agreed to site a 46,000-square-foot health club on the first floor.

Solheim bought the property about six years ago, then waited for the Pearl District to develop its way to the north. Today, the northern fringe is abuzz with activity and Solheim likes to think of Northwest Lovejoy as the Pearl District's new 50-yard line.

Solheim said he always imagined that the project would include office space, though plans evolved over five years. He and Ford originally intended simply to renovate the old Jackson Machine Works building. Rising land values and the attendant demand for higher-density development compelled them to rethink the plan. Now, the old building is coming down, though some of the structural steel will be used in the new one.

Group Mackenzie architects refined the original designs and Skanska USA is in charge of construction, which is expected to wrap up in November 2008.

"We'll be able to attract a fairly large tenant," Solheim said.

The old Meier & Frank warehouse at Flanders and 13th is coming in for a modern makeover as well. Developer-cum-real estate broker Jim Gillespie is converting its four floors into a cosmetology school, residential condominiums, retail space and 20,000 square feet of office space.

The office space is on the third floor and has 20-foot ceilings along with three walls of glass.

The project has had its share of challenges. After relisting the building on the historic registry, tax rules changed and the project lost its eligibility for a tax credit, adding about $800,000 to the budget.

The building, which should be finished this fall, is known simply as Block 90.

The last office gem project is to the east, along the North Park Blocks. Conover Development of Spokane, Wash., recently completed its purchase of the old General Automotive building and will renovate the first floor for retail use and create 28,000 square feet of office space on the three floors above. It is scheduled for completion in mid-2008.

The Pearl District's new gems aren't for rent refugees looking for a break from downtown, where the newest and largest buildings command about $30 per square foot.

Unico is asking $25 a square foot for Lovejoy Station. With additional tenant expenses at $6.50, it will be $2 to $3 dollars higher than typical downtown space, said Friel, the leasing broker.

Office space in Block 90 is priced at $24 per square foot, with tenants responsible for utilities, insurance and other expenses.

With no leases signed, it remains unclear what the market will tolerate in rent. By way of comparison, the asking rate for a 15-story office tower proposed at Southwest First Avenue and Main Street in downtown is reportedly $35 a square foot. Shorenstein Realty Services LP, which acquired the former Portland holdings of Equity Office, has indicated it will build the project.

Speaking for brokers as a whole, Friel noted that Portland is a notoriously challenging market for leasing space in buildings yet to break ground.

"People need to see it first," he said.

wculverwell@bizjournals.com | 503-219-3415

http://portland.bizjournals.com/portland/stories/2007/07/02/focus1.html?t=printable

[zilfondel]

The old Meier & Frank warehouse at Flanders and 13th is coming in for a modern makeover as well. Developer-cum-real estate broker Jim Gillespie is converting its four floors into a cosmetology school, residential condominiums, retail space and 20,000 square feet of office space.

The office space is on the third floor and has 20-foot ceilings along with three walls of glass.

The project has had its share of challenges. After relisting the building on the historic registry, tax rules changed and the project lost its eligibility for a tax credit, adding about $800,000 to the budget.

The building, which should be finished this fall, is known simply as Block 90.

This is GREAT news!!

[bvpcvm]

^^^ you might be thinking of a different building... when i read this i was thinking of that old - enormous - warehouse next to 405 on everett, but the block 90 project is about one block further away from the freeway. the project has been planned for ages. see www.block90.com.

[zilfondel]

damn, you're right. and I've seen their website in the past, too. :(

[MarkDaMan]

Designing for the future
Portland's premier shop, Ziba Design, takes stock of direction with new building
Portland Business Journal - July 13, 2007
by Aliza Earnshaw
Business Journal staff writer

For almost a quarter-century, Ziba Design has created what Ziba calls "the experience" for its clients.

Now the Pearl District industrial design firm is creating the experience for itself.

Faced with burgeoning growth that has pushed some of its staff into a building across the street, Ziba is planning and designing a building of its own, seven blocks away from its current headquarters at 334 N.W. 11th Ave.

The new building will give Ziba the opportunity to create not only the kind of creative design space it wants for its own work, but also a retail and services center focusing entirely on design.

Founded 23 years ago, Ziba has built a reputation for creating innovative designs that work well. Whether a new, ultra-thin laptop design for Intel Corp., a retail banking environment and brand for Umpqua Holdings Corp., a personal audio player for Sirius Satellite Radio Inc., or even a humble floor mop for The Clorox Co., Ziba employs a philosophy and process that goes beyond cool-looking products.

"We make the stories of brands come to life," said Sohrab Vossoughi, founder and president of Ziba.

For Vossoughi and his team, that means going way beyond color, form and function of a new product. It means recognizing that every contact someone has with a company is an experience, whether they are looking at advertising, unpacking the product and reading instructions, actually using the product, viewing the company's Web site or walking into a store.

Vossoughi talks about designing that experience as if he's arranging a marriage, rather than helping his client make money.

"We have to tell the story of the brand to the customer so that they can fall in love with each other and connect with each other," Vossoughi said. "This is an experience economy. Forget the product, design the experience."

Though this may sound like new-age vagary, it's making Ziba successful. The company has been growing at least 20 percent per year for the past five years, and is now pulling revenue between $10 million and $15 million per year, said Sia Vossoughi, executive managing director and brother of Sohrab.

Now Ziba is working with up-and-coming Portland firm Holst Architecture to design its own environment, a $12 million, 70,000-square-foot building at Northwest Ninth Avenue and Marshall Street.

Ziba itself is putting almost $7 million into the project, and Sohrab Vossoughi is investing the rest.

Some of the costs will be covered by retail and office tenants. The Vossoughi brothers are planning on Ziba using about 40,000 square feet at first, and renting out the rest of the building to design-related businesses. These could be high-end design retailers or consultants, but might even include a bookstore focusing on design books, said Sia Vossoughi.

Ziba's staff has grown to almost 150 worldwide, with just over 100 people in Portland.

The company is designing the interior of its new building to accommodate Ziba's "tribal" design method and work style, where employees group together to work on a project.

"We're going to have lots of project rooms and less individual spaces for designers," said Sohrab Vossoughi. "We won't have to walk across the street anymore" to meet with others working on the same project.

With all the growth Ziba has had, "we still have a long way to go," said Sia Vossoughi. "Our aim is to grow the company so that it can sustain itself without me and Sohrab around."

That means hiring more people and growing a management team, and getting revenue to $25 million to $35 million "so we can attract and hold good people," said Sia Vossoughi. He and his brother think they can get there in three years.

Growth like that is also likely to attract some serious offers to buy Ziba itself. In fact, the company has already been approached a few times, said Sohrab Vossoughi.

But neither brother is interested in selling. "Right now I don't see any reason," said Sohrab. "They need us; we don't need them."

"At this time, it's too much fun to think about selling it," said Sia.

Though smaller than its most famous competitors, New-York headquartered Ideo and Boston-based Design Continuum Inc., Ziba has garnered plenty of notice, and a slate of prestigious awards.

"We have a great respect for Ziba's work," said Debbe Stern, spokeswoman for Ideo.

Clients admire not just the products Ziba produces, but also the process.

Ziba starts with the consumer, not with the product itself, said Bob Law, senior vice president and general manager of the consumer electronics division of Sirius. Law first got to know Ziba 10 years ago, when he was at audio equipment company Kenwood Electronics.

For Sirius' first portable player, "they [Ziba employees] went and lived with potential users; they sat with potential radio customers in environments where they would be used, in the real world," said Law. "That helped us create products that are a lot more successful than if we just did it on paper."

Ray Davis turned to Ziba for help in designing Umpqua Bank's unusual retail bank branches, which include free Internet access, comfortable seating and Umpqua's own brand of coffee.

Davis wanted to create what he calls "stores," places that would draw customers in and convey the message that Umpqua is there to help them with their financial lives. He was pleased when he asked Sohrab Vossoughi whether Ziba had ever worked with a bank, and was told no, they hadn't.

"I needed someone who wasn't thinking like a banker, with conventional ideas of what a bank looks like. I needed a clean sheet of paper."

That's what Ziba gave Davis and Umpqua, a fresh approach. And they brought more, too, said Davis: a scientific understanding of how retail works.

Ziba applied research on how people behave in retail stores to Umpqua's bank branches, to give customers the feeling they were entering a familiar store environment.

"I'd never have thought of that," Davis said.

aearnshaw@bizjournals.com | 503-219-3433
http://portland.bizjournals.com/portland/stories/2007/07/16/smallb1.html?t=printable

[cab]

In today's DJC a Subcontractor ad is running for First and Main.

First and Main
Portland, Oregon
Bid Package #1 - Shoring and Excavation
Pre-Bid Meeting: July 17, 2007 @ 9:00 AM
Bids Due: July 31, 2007 @ 2:00PM
Bid Documents - Willamette Print & Blueprint (503-223-5011) or www.bxwa.com

HOFFMAN CONSTRUCTION COMPANY OF OREGON
Phone: (503)221-8811 - Bid Fax: (503)221-8888
805 SW Broadway, Suite 2100 - Portland, OR 97205 - CCB License #28417

[Dougall5505]

good news does this mean it will be started before park avenue or is it still a ways off?

[MarkDaMan]

^who knows, since the lot changed ownership three times since the project was proposed, I'm surprised it even is still on the drawing boards. I guess since they have run an ad request bids, it probably will start, I would assume, in a couple months.