you know, I never want a company to fail, but I can't think of a better developer to leave Portland...well maybe some of those McMansion builders, but the markets have taken care of a few of them.
Opus NW could dissolve
POSTED: Thursday, February 18, 2010 at 03:22 PM PT
BY: Justin Carinci
Daily Journal of Commerce
Design-build commercial real estate firm Opus Northwest announced Thursday that it had hired a Chicago turnaround firm to “explore options for recapitalizing,” including selling off assets.
Company officials say Opus Northwest will probably stay in business, although others in the real estate industry say it’s more likely the firm will break up and sell off its assets.
Opus Northwest issued a statement that it had engaged MorrisAnderson & Associates to look into options including “a capital infusion, a joint venture, or a sale of certain assets.”
Tom Parsons, Opus Northwest senior vice president, said the firm’s Portland and Seattle offices remain open. “In the short term, we don’t have any plans to close any of our offices,” he said.
Parsons said that he doesn’t expect the firm to shut down or be sold outright, but it needs money. “There’s a high probability of a successful recapitalization of the company,” he said. “That means moving forward, but with new money.”
Although Parsons said he couldn’t speculate on what form Opus Northwest would emerge from the recapitalization process, he said he expects the Opus Northwest name to endure.
“I think there’s a high probability we’ll move forward under the name,” he said. “It’s hard to tell right now.”
The company’s properties could be valuable to investors, said Will Macht, president of Macht & Co. and an adjunct professor in real estate at Portland State University. There’s a smaller chance that another company would want to enter into a deal that lets it acquire Opus Northwest’s employees, he said.
“I doubt they’d be able to carry on as Opus Northwest,” Macht said. “I think the intent is to dissolve the company.”
If the company sells off its assets, real estate opportunity funds could swoop in looking for discounted properties that could yield good returns, said Fred Dockweiler, senior vice president of KeyBank Asset Recovery Group.
“There’s a lot of money on the sidelines waiting to jump in,” Dockweiler said. “Opus didn’t do any second-rate stuff.”
Attitudes toward local real estate have already started to improve, said Gary Winkler, a multifamily investment broker with Colliers International. “Investors are cautious, but things are turning around,” he said.
“I think people are willing to do transactions,” Winkler said. “Last year, there were not a lot of transactions for Oregon and Southwest Washington.”
The recession has been hard on Opus Northwest parent company Opus Corp., headquartered in Minnesota. Opus divisions based in Rockville, Md., Atlanta and Phoenix filed for either Chapter 7 or Chapter 11 bankruptcy last year.
Last month, the Portland office cut its staff from six to four and the Seattle staff dropped from 24 to 13. That’s a dramatic fall from a 2006 peak of 110 employees for the two offices combined. At the time, the offices had $250 million worth of projects.
“This is not atypical for a real estate company in these times,” Parsons said. “Like many real estate companies, we’re down to a very small staff because the business is in the tank.”
Opus Northwest has been a major player in the Portland area, completing $500 million worth of metro-area projects in the last seven years. Those include two high-end apartment complexes finished last year: Park 19 in Northwest Portland and Ladd Apartments in downtown.
In spite of those and other prominent projects, the disappearance of Opus Northwest wouldn’t create major ripples in the local real estate community, Macht said. “It was a larger developer in town when it did Bridgeport Village and the Ladd Apartments. But none of the developers are really active now, so in terms of their immediate departure, it’s not going to make a significant difference now.”