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Originally Posted by 2oh1
I agree. It's disappointing to see it get chopped down, but it's still a decent design and I'll be glad to see it built.
What caused it to get reduced so much?
Can any of you offer some perspective on the market as a whole, here in Portland? Obviously, we have a massive need for more housing, but we're also in a period of high inflation (along with other factors) pushing rents sky high. Are newly completed buildings being rented out as quickly as developers expected?
I can't help thinking about how we had an explosion of new hotels over the past decade, meanwhile we've seen a drastic decline in occupancy due to the pandemic... and not helped by other factors.
I worry that the next few years are going to be rougher than most folks seem to be expecting.
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I work in development locally and there are plenty of reasons why the market is not performing the way many of us think it should.
We have a housing crisis, but not really in the high-end market. All new market-rate projects in Portland's core are offering some kind of rent concessions. In some locations, it's 4 weeks free rent (Slabtown), and others, it's 12 weeks free rent (Downtown). It's not unlikely that 11 West will offer 8 weeks free rent to get residents into units for cash flow.
It's obvious that livability concerns have hurt the city's reputation, but much of this is short-sighted as Portland remains far more affordable than any other major market on the West Coast. However, that doesn't stop major lenders and private equity groups from shying away from Portland. Why throw capital into Downtown Portland when you can invest in Beaverton, Vancouver, or Bend?
Between inflation, high interest rates, jurisdictional reviews, and inclusionary housing, most projects just aren't financially viable. That's why so many developers need to push rents just to get shovels into the ground. It's no coincidence that the Press Blocks full block is actually happening; any pre-IH entitled project will always be more attractive to capitalize than any post-IH entitled project.
In the case of The Philip, I actually think it's quite aesthetically pleasing for being only 11 stories. It's very possible that this developer, in trying to put all of the complex pieces together behind the scenes (raising equity, closing debt, city approvals, etc.), realized that 11 stories significantly reduces the risk compared to the 23-story tower. Sure I wished for the taller version, but the economics just might not be there to support it with the Post Office's long redevelopment timeline and
major livability issues in neighboring Old Town.