Tom Moyer to build 35-story downtown office tower
Portland Business Journal - 3:18 PM PST Thursday
by Wendy Culverwell
Business Journal staff writer
The temperature of Portland's downtown office market rose Thursday with the announcement by developer Tom Moyer that he will build a 35-story office tower just west of Nordstrom.
Moyer's firm, TMT Development, said it would break ground this fall on the $150 million project, which it has dubbed Park Avenue West at Park Avenue and Yamhill Street. The building will occupy Park Block Four, currently home to the Zell Brothers Building and kitty-corner from Moyer's most recent skyscraper, the 27-story Fox Tower.
Park Avenue West is being designed by Robert Thompson, founding principal of TVA Architects Inc., which also designed Fox Tower, which opened in 2000.
At 410 feet, the new building will be among Portland's tallest. And with 525,000 square feet, it will easily eclipse its sibling, the Fox Tower, which is Portland's sixth largest office building with 438,000 square feet.
The new building will have approximately 280,000 square feet of Class A office space, three floors of retail, 85 units of housing and 350 underground parking spaces.
The announcement comes as Portland faces its tightest market for downtown office space in recent years. According to the most recent figures from Grubb & Ellis, the vacancy rate for Class A space in the central business district has dropped to 5.9 percent and asking rents have inched up to $23.80 this quarter, from $22.66 a year ago. As a rule of thumb, it takes rents in the mid-$30s to justify new office construction.
"Everybody knows we're heading into a tightening market," said David Squire, managing director at Grubb and Ellis.
At present, major office users have little to choose from in downtown. Offerings include four spaces of 20,000 to 30,000 square feet, one between 30,000 and 50,000 square feet, and nothing above that.
With rents rising and a tight market giving major tenants little room to grow, several developers want to answer demand with new supply. BesidesMoyer, Equity Office Properties is still pressing ahead with plans for a 15-story office building plans at First and Main.
Squire said any one of the developers considering new office towers is capable of pulling it off, but said Moyer has an edge since he is sole proprietor of his firm.
"He certainly did it before with the Fox Tower. He answers to no one," he said.
"This is probably good news for downtown."
In addition to Fox Tower, TMT owns and operates the 1000 Broadway building and the Studio Building. Its headquarters are at Fox Tower.
TMT officials weren't available to comment this afternoon. They gave no indication of any pre-leasing activity in announcing plans to construct the new tower.