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Tough opening for Machine Works in Pearl District
Grubb & Ellis looks to lure office tenants to building seeking LEED gold certification
POSTED: 04:00 AM PST Friday, January 23, 2009
BY TYLER GRAF
Al Solheim has been a developer in the Pearl District since the nation’s last major recession, in 1981, but he’s never seen a more challenging time than the present.
This month perhaps wasn’t the best time for Solheim’s biggest and most expensive building, the mixed-use Machine Works in the Pearl District, to open. After all, little leasing activity is expected in the immediate future.
Yet the new building, which is still seeking its first office tenant, has some attractive features.
Tall windows wrap around the offices, giving nearly a 360-degree view of the city. The windows also keep out the noise of traffic on Interstate 405, which runs past the western side of the building. The only sound is the humming ventilation system.
Broker Eric Haskins of Grubb & Ellis said the building’s sustainable features are part of the building’s marketability. Featuring an energy-efficient HVAC system and an eco-roof, the building is seeking Leadership in Energy and Environmental Design gold certification, according to Solheim.
And Solheim, the chairman of the board of governors at the Pacific Northwest College of Art, wants the eight-story building to showcase art. The lobby will feature a painting by Oregon artist James Lavadour, and the south side of the building already boasts the Falling Light art installation, made up of colored, epoxy-glazed blocks that are used to reflect sunlight.
Haskins said the building has two other significant pluses. One is that tenants may combine to place as many as four 100-foot signs on the building’s exterior, directed toward I-405. Another is that the roof has been reinforced to allow for a deck for the top-floor tenant.
Yet there sits 70,000 square feet of vacant office space. But it could be worse for the 120,000-square-foot building. The good news is that LA Fitness has taken up Machine Works’ 43,000 square feet of ground-level retail space.
Two tenants have already backed out of potential lease agreements, preferring instead to stay put, Solheim said.
“They just got turned around in all this mess,” he said.
Perhaps he could have more aggressively pursued potential tenants early on, he mused.
When the building was still under construction, a pro forma outlook indicated that by this point 20 percent of the building would be leased.
“There’s just a lot of property in this (Pearl District),” Solheim said.
He cited Keen Footwear and the Ater Wynne law firm, both already in the Pearl District, as the types of companies he’d like to attract to his building.
“If there is a 40,000-square-foot user, we’re the only opportunity right now,” said broker Eric Haskins of Grubb & Ellis.
The brokerage team at Grubb & Ellis is aggressively pursuing firms to fill the upper floors, Haskins said. They’re working the phones and stepping up efforts to move tenants into the building.
Solheim is willing to wait out the slowdown, but remains hopeful that the marketing efforts are fruitful.
“People are holding out,” Solheim said, “and it’s just a slow time of the year.”
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