Cathy Cheney | Portland Business Journal
TMT halted work on the 33-story tower in April, citing an inability to land a construction loan.
Construction was supposed to resume in early 2010 on Park Avenue West, the stalled office tower that has come to symbolize the real estate economy in Portland.
With the new year just a week away, it remains unclear if owner TMT Development can secure the financing it needs to complete the $150 million project at Southwest Park Avenue and Yamhill Street.
Portland-based TMT Development remains close-lipped about the building’s status.
President Vanessa Sturgeon said there have been no new developments and declined further comment. Bart Eberwein, vice president of Hoffman Construction, the contractor building the tower, said he is “in the dark” about the project’s status.
TMT Development halted work on the 33-story tower in April, citing its inability to secure a construction loan. It was a surprising development since the building had signed a major office tenant and a major retailer.
Stoel Rives LP, Portland’s largest law firm, agreed to lease nearly 160,000 square feet or about half the building’s office space. Nike Inc. planned to open a Niketown store at ground level. Together, the two leases signaled that Park Avenue West would be able to attract tenants despite the recession.
When asked if the lease remains in effect despite the construction delay, a Stoel Rives spokeswoman said there is “nothing to report.”
By the time TMT stopped work, Hoffman had excavated nearly five stories into the ground and started to build the elevator shaft and other core building features. The contractor pulled its workers and secured the site, leaving a fenced pit in the block immediately west of the downtown Nordstrom store.
Behind the scenes, TMT and its partners have been busy. The team reinvented Park Avenue West without the condominiums that were to occupy 10 floors. In August, the city approved the new design — a boxy 26-story office tower with underground parking and street-level retail space.
But with the “early 2010” deadline to resume building now just weeks away, there is no indication TMT has lined up financing.
The Portland office of Holliday Fenoglio Fowler LP previously lent TMT Development at least $112 million, including $80 million for Fox Tower and $32 million for 1000 Broadway, two buildings in its downtown portfolio.
Holliday Fenoglio Fowler officials couldn’t be reached to discuss prospects for financing Park Avenue West.
Privately, local commercial lenders predict only a major bank such as Wells Fargo, U.S. Bank or Bank of America will be able to finance Park Avenue West. All are likely to take a skeptical view.
Wells Fargo doesn’t discuss specific deals, but generally speaking, lack of demand from tenants, not lack of funds, keeps it from issuing construction loans.
“There’s not a lot of demand for new office, new condos, new retail,” said Nelda Scott Newton, vice president for the Wells Fargo Real Estate Group in Portland.
U.S. Bank and Bank of America didn’t answer questions about the project.
But any prospective lender will be interested in whether the project can command tenants willing to pay rents in the mid-$30 per square foot range, which is higher than most buildings in the central business district.
According to one local brokerage, the vacancy rate for Class A space in downtown rose to 7 percent in the third quarter, up a full percentage point from a year ago.
It is expected to climb further in 2010 when First & Main, a 16-story office tower at First Avenue and Main Street, opens and adds 346,500 square feet of office space to the market. First & Main has no confirmed tenants after more than a year of active marketing.
Nationally, the commercial real estate picture isn’t much better.
In November, the National Association of Realtors reported the eighth consecutive quarterly decline in an index that measures commercial real estate activity. The index was at its lowest level since the first quarter of 1995.
It adds up to a bleak leasing climate for Park Avenue West in the near term, which may be enough to scare lenders.
“I wouldn’t have it,” said Mike Glanville, president of Q10|National Mortgage, a Lake Oswego firm that brokers and manages commercial mortgages on behalf of life insurance companies.
It services a portfolio worth more than $1 billion.
wculverwell@bizjournals.com | 503-219-3415
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I like the base, TVA does nice pedestrian scale and detail - they should stick to lowrise designs. They got the recessed channel detail down, and the same could be said for the John Ross, but the tower is bland. The proportions and compositions of the different materials are just odd - I don't know how else to say it. The slight play of windows and double mullions gets lost. This is a tower - tower design needs to be bold and be read from different vantage points. The glass is shiny, Titanium and Silver...and ribbons of it. So. And what the hell are those buttresses flying out of the West side of the building - whoops - forgot a transfer beam - they look like a big mess 
. Maybe I am alone on this, but I certainly have better hopes for PAW if it moves forward.
I get they are a structural solution, just not a very graceful one, nor very well integrated one into the overall architecture. They look like an afterthought, a band-aid, and there are other ways to transfer columns (won't labor over that) - the butresse just looks out of place, and I guess I think the entire tower has very little grace. It has moments, but this does not make for a good design. Nor does Portland not having a decent highrise in the past 50 years make an excuse for this one to be held up with such high regard. Again, I have hopes for PAW.
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