Pearl District News

[tworivers]

15-story apartment tower proposed in Pearl District
Published: Monday, November 21, 2011, 5:21 PM Updated: Monday, November 21, 2011, 9:21 PM
Elliot Njus, The Oregonian

The developer behind low-rise South Waterfront condo project The Matisse is preparing plans for a 15-story apartment tower in the Pearl District.

Denver-based Simpson Housing LLLP has proposed a 206,000-square-foot building on NW 14th Avenue at NW Irving Street. The site is currently vacant and used for parking.

The plan calls for ground-floor storefronts and office space, as well as an underground parking garage.

The developers will be meeting city officials next month to determine if the project is feasible, an early step in the development process.

But the project would help meet a shortage of apartments. Northwest Portland, including the Pearl, has an average vacancy rate of 2.4 percent, according to the Metro Multifamily Housing Association.

The Portland area has one of the lowest vacancy rates in the country at just over 3 percent. The U.S. Census Bureau puts the national vacancy rate at 9.8 percent.

Still, new construction has been sluggish. The number of permits issued for apartment projects are only slightly higher than last year, which was the slowest period in apartment construction in 15 years.

-- Elliot Njus

[downtownpdx]

Nice! It would be almost shocking to see something over 8 floors built these days. I walk by this lot all the time -- wasn't this the site of a proposed time-share resort or something a few years ago?

[pdx2m2]

This apartment project at NW 14th & NW Irving is now dead.

[tworivers]

This apartment project at NW 14th & NW Irving is now dead.

As of today?

[tworivers]

Oh yeah. Brutal. Here we are:

Developers call off Pearl District apartment tower
Published: Tuesday, November 22, 2011, 4:35 PM
Elliot Njus, The Oregonian
A plan to build a 15-story apartment tower in the Pearl District has been called off, the developers said Tuesday.

Representatives with Simpson Housing LLLP of Denver had planned to meet next month with city employees to discuss whether the project was feasible. But the company decided the return wouldn't justify construction.

"It's kind of a dead deal at this point," said Spencer Welton, the firm's senior vice president of development.

The proposed 206,000-square-foot tower at the corner of NW 14th and NW Irving Street would have been mostly apartments with ground-floor retail and an underground parking garage.

The proposal came as apartment vacancy rates in Portland are approaching record lows. Rents have increased 8 percent across Portland, and rents in Northwest Portland – including the Pearl – average $1.34 per square foot.

That's not quite enough to sell Simpson – or many other developers – on new construction.

"Rents don't quite support it yet," Welton said, adding, "I think they may move in that direction, and there's definitely a need for housing in Portland and in the Pearl District specifically."

The cost of construction, permitting and other fees can tip the scale against big apartment projects, said Greg Frick, a partner at HFO Investment Real Estate in Portland.

"Yeah, rents have gone up and vacancy is great, but from a return standpoint, the numbers just aren't there," he said.

Instead, most of the action in the apartment market is in the buying and selling of existing apartments, Frick said. They come without the costs of new construction, and lenders are more willing to back deals on apartment buildings that are already occupied.

The Metro Multifamily Housing Association expects permits will be granted for 1,500 apartments units by the end of the year, only slightly ahead of a dismal 2010 and much lower than a historic average of 4,000 a year for the past 15 years.

-- Elliot Njus

[2oh1]

Yay! Hope!
Wow. Nope.

[pdx2m2]

If we are going to see new apartment construction I think it will be six story frame construction rather thsnksgiving high rise construction.

[bvpcvm]

Originally Posted by pdx2m2

rather thsnksgiving high rise construction.

^ haha

Still, even in the midst of our greatest recession ever, there's one apt building under construction, the Bob Ball project we just learned of yesterday, and another 4-5 planned in NW (and still another in NW under construction).

Somewhere - I think it was The Atlantic Monthly's Cities journal (theatlanticcities.com) - I read that upcoming demand for urban homes is expected to be so strong that the only way to meet it would be for every single new home built between now and 2020 (?) to be an urban apt/condo. IIRC there were two reasons for this: 1) across the country, very very little is being built, since banks are afraid to lend, and demand is pent up (see: PDX vacancy rate) and 2) Generation Y overwhelmingly favors an urban lifestyle and they're all unemployed and living with mom and dad. But once they get jobs, they'll want something of their own. Probably all of this interest in the Pearl/NW right now feeds off of that (along with our miniscule vacancy rate).

[zilfondel]

I still can't believe the vast difference between Portland and Seattle now. Seattle apartment construction is still in a building boom.

As of July of this past year, there were 3,000 apartment units under construction in Seattle:

http://seattletimes.nwsource.com/htm...rtments10.html

Contrasted to Portland... not nearly as much.

[tworivers]

^^^ Seattle is an economic juggernaut compared to Portland -- I know it sounds stupid, but I'm still trying to wrap my head around direct flights from Sea-Tac to Dubai. That's so far from our level it's not even comparable.

[PDX City-State]

Originally Posted by tworivers

^^^ Seattle is an economic juggernaut compared to Portland -- I know it sounds stupid, but I'm still trying to wrap my head around direct flights from Sea-Tac to Dubai. That's so far from our level it's not even comparable.

This is true. Portland also has big demand for apartments, but it can't yet get the rents to justify new construction. And even though I'm a big Portland fan, it's economically speaking small potatoes compared to Seattle, which of course is home to Microsoft, Amazon, and more.

[msallen]

Originally Posted by tworivers

rents in Northwest Portland – including the Pearl – average $1.34 per square foot.

That's not quite enough to sell Simpson – or many other developers – on new construction.

"Rents don't quite support it yet," Welton said, adding, "I think they may move in that direction, and there's definitely a need for housing in Portland and in the Pearl District specifically."

$1.34 per square foot? This must be including all of the subsidized housing in Old Town/Chinatown and the Pearl. I wonder what the average market rate for NW Portland is. Surely they considered that in their feasibility study....

[2oh1]

Those numbers are way off. Show me a place downtown/Pearl/NW where I can rent 600 square foot space for $800 without it being some sort of subsidized deal. Ten years ago, perhaps. If somebody opened a building with 500 sq/ft lofts renting at $670, they'd rent the entire building out before it was even built.

Nine years ago, I was renting a 480 sq/ft loft for $700. That's $1.45 sq/ft. Today, that same space easily rents for $900. Maybe more. And we're not talking about a particularly nice building.

If they're not going to build this project, that's fine. But they don't have to lie in order to justify that decision.

The average rent in the Pearl/NW is $1.34 sq/ft? Bull.

[zilfondel]

Originally Posted by 2oh1

Those numbers are way off. Show me a place downtown/Pearl/NW where I can rent 600 square foot space for $800 without it being some sort of subsidized deal. Ten years ago, perhaps. If somebody opened a building with 500 sq/ft lofts renting at $670, they'd rent the entire building out before it was even built.

Nine years ago, I was renting a 480 sq/ft loft for $700. That's $1.45 sq/ft. Today, that same space easily rents for $900. Maybe more. And we're not talking about a particularly nice building.

If they're not going to build this project, that's fine. But they don't have to lie in order to justify that decision.

The average rent in the Pearl/NW is $1.34 sq/ft? Bull.

Thats a good point, I didn't think about the actual rental numbers. I used to rent a studio apartment in a crappy "historic" NW apartment for $550 330 sq ft. Thought it was a great deal at the time. I believe rent may have increased since 2006.

Perhaps they believe the market for that price point is saturated? But then we hear news of a new SOWA tower going to be built. Ah, well.

[65MAX]

Originally Posted by zilfondel

But then we hear news of a new SOWA tower going to be built. Ah, well.

Where did "we" hear this? Details? (...but in the SoWa thread please)

[mmeade]

Originally Posted by 2oh1

The average rent in the Pearl/NW is $1.34 sq/ft? Bull.

I'm not familiar with the project, but I would hazard a guess to say that you are quoting net square footage prices, while the proforma is based upon gross square footage price. The difference includes all the lobbies, public spaces, corridors, amenities, etc. The number could even include parking. It's hard to know exactly what that number represents.

Clearly though, they can't make the business case and in the end that is all that matters.

[Leo]

Originally Posted by 2oh1

If they're not going to build this project, that's fine. But they don't have to lie in order to justify that decision.

The average rent in the Pearl/NW is $1.34 sq/ft? Bull.

To be fair, it is the writer of the article, not the developer, who claims the $1.34/sq ft figure. And that figure is for “Northwest Portland – including the Pearl”, not just Pearl District. Sometimes “Northwest Portland” is used to describe a pretty big area, including some of the northwest suburbs.

If I was investing in the rental market, I’d be more worried about shadow inventory. All those rentals that were converted to condos during the housing bubble aren’t occupied. Sooner or later, banks will foreclose on the vacant units, and they’ll re-enter the housing market. Then we’ll see what the real vacancy rates are.

[tworivers]

Developer Robert Ball plans 177-unit Pearl District apartment building
Published: Tuesday, December 06, 2011, 12:20 PM
Elliot Njus, The Oregonian By Elliot Njus, The Oregonian

A familiar Pearl District developer plans to build a six-story, 177-unit apartment building on the Pearl District's northern fringe.

Robert Ball, whose company Astor Pacific LLC was behind The Wyatt apartments in the Pearl in 2008, announced plans Tuesday for a building called The Parker. The project will be privately funded and aims to take advantage of Portland's tightening rental market.

The six-story building will sit on a full block on NW 12th Street between NW Pettygrove and NW Quimby streets.

Northwest Portland, including the Pearl, has one of the lowest vacancy rates in the metro area at 2.4 percent last quarter, according to the Metro Multifamily Housing Association's survey of apartment managers.

New construction for the year has been slow, but the demand has sent rents soaring. That set up a waiting game for new housing projects, as developers watched to see if rents rise enough to make their plans profitable.

Another developer, Simpson Housing LLLP of Denver, planned to meet with Portland city officials early this month about a proposed 15-story tower on the west end of the Pearl District, but pulled the plug on the project after deciding it wouldn't work financially.

The building will feature a large courtyard and will include storage for each unit, car parking and bike parking, and it will be built to LEED Platinum standards.

-- Elliot Njus

[Shilo Rune 96]

Hi, All;

My Pearl District website - PearlHelp.com - was featured yesterday on OregonLive by Molly Hottle. This is some exciting PR for me!


http://www.oregonlive.com/portland/i...y_pub_ove.html


PS. Any feedback is welcome on the site! I am a new designer (by hobby)!

[New Madrid]

Originally Posted by Shilo Rune 96

PS. Any feedback is welcome on the site! I am a new designer (by hobby)!

Hire a copy writer.