Here's the whole article. The tl;dr is that PAW might actually get restarted, and two other towers are under consideration for lots that are currently *parking lots*.
http://www.oregonlive.com/business/i..._office_t.html
New downtown Portland office towers pitched to meet rising demand
Published: Wednesday, November 03, 2010, 8:22 PM
Updated: Wednesday, November 03, 2010, 8:22 PM
Jeff Manning, The Oregonian
View full size
Portland's downtown real estate scene is about to get a lot more interesting, as multiple developers are suddenly pushing new projects to deal with a shortage -- yes, a shortage -- of large blocks of downtown office space.
Harsch Investment Corp. and
Gerding Edlen are both considering new buildings in the suddenly red-hot West End of Portland. They would like to step into the breach left by TMT Development, whose Park Avenue West office tower has laid dormant since spring 2009.
But Park Avenue West may soon be more than an expensive hole in the ground. Portland real estate circles have been abuzz in recent weeks that TMT may have resuscitated the project thanks to a sudden abundance of large downtown tenants looking to relocate.
Executives at TMT -- the development arm of the Tom Moyer family -- declined to comment.
In an era of a historic housing crash and recession it seems strange to be talking about a real estate boom in any sector. Yet, downtown Portland has maintained a tight vacancy rate of less than 10 percent.
Even Shorenstein Properties LLC's completion in June of the 341,000-square-foot First & Main building did not appreciably bump vacancy rates. That was due largely to the arrival of several government agencies displaced by the renovation of their former home.
"Because we've been in such a difficult economic environment for a couple years, people haven't wanted to play a lot of offense," said David Squire, managing director of the Grubb & Ellis commercial real estate office in Portland. "But if you look at the numbers, it's tight out there. If you're a large user needing 50,000 square feet or more, you're out of options."
Indeed, several large users are in the market, having either grown out of their space or have expiring leases.
The Miller Nash law firm and KPFF Consulting Engineers are both looking at possibly moving. Both need 50,000 square feet or more.
Miller Nash, one of Portland's largest law firms, currently occupies 60,000 square feet at the U.S. Bancorp Tower.
View full size
The firm issued a request for proposals to prospective landlords. It talked with TMT, Gerding Edlen and Harsch, said Jon Goodling, a Miller Nash partner involved in the office planning process.
Remaining in the U.S. Bancorp tower is a possibility, Goodling said. But some Miller Nash lawyers are ready for a change in scenery away from the gritty Burnside strip and neighboring Old Town.
"I think it's fair to say that there are number of partners interested in a new location closer to the central city core," Goodling said. "It's a symbolic thing -- that we're a forward looking firm."
KPFF is also in U.S. Bancorp Tower. The 140-employee-firm's lease will soon expire, said Art Johnson, KPFF vice president.
The jewel in the crown of prospective tenants is Iberdrola Renewables, a fast-growing green energy company that needs 100,000 square feet or more, according to industry sources. Iberdrola came into the Portland market when its parent company bought Scottish Power, which had purchased PacifiCorp several years earlier.
Iberdrola made Portland it's North American headquarters and currently is located in Block 4 of the Brewery Blocks office cluster in the Pearl District.
"We need more space," said company spokeswoman Jan Johnson. "We started with the seventh floor and half of the sixth. Now, we have the 7th, the 6th, part of the 4th and we've had to move people to a building across the street."
The U.S. Army Corps of Engineers is also hunting for as much as 125,000 square feet for its more than 400 employees. But the security requirements for federal tenants -- such as the 25-meter minimum setback from front door to the street -- is making the Corps a difficult fit in the downtown core.
The flurry of demand has developers scurrying to revive projects sidelined by the economic crash.
Harsch Development is looking at building a new 15-story office tower at the intersection of Southwest 10th Avenue and Stark Street. The company, headed by Jordan Schnitzer, wants to build adjacent to the former Federal Reserve building, which Harsch also owns, on the site of a surface parking lot.
Harsch is not going to rush into anything, Schnitzer said. Like nearly all real estate firms, Harsch is dealing with some significant problems in its portfolio of assets.
"We continue to drink from a fire hose in terms of humility," Schnitzer said.
But financial markets have loosened up. And there is significant pent-up demand from institutional investors to finance projects, Schnitzer said.
Gerding Edlen would like to build its 11 West building at the corner of Southwest 12th Avenue and Washington Street.
The site, kitty-corner to the firm's highly successful 12 West apartment/office building, currently holds a City Center Parking surface parking lot.
Gerding Edlen is working with Goodman family, owner of City Center Parking and a longtime financial ally.
Gerding Edlen principal Kelly Saito declined to give much detail about 11 West, saying it's early in the planning process.
Also in the mix are Portland developers Jim Winkler and Bob Naito, who continue to search for tenants for their One Waterfront Place.
Winkler and Naito wanted to build the 12-story, 250,000 square-foot building on a site at Northwest Naito Parkway just north of the Broadway Bridge.
--
Jeff Manning
© 2010 OregonLive.com. All rights reserved.
Prev
Linear Mode
