Portland Office Market to Get a Major Boost from Foreign Investors
The sale of a downtown office building is Portland, Oregon may mark the start of an inflow of investments into the city from foreign investors, a new report on Oregon Live revealed.
The report said that the sale of the 15-story, 20th-century American Bank Building to portfolio manager Independencia S.A. for $45.1 million have sparked interest among foreign investors seeking long-term investments. Independencia S.A. manages Chilean pension funds and has a U.S. office in Miami.
Independencia teamed up with Portland real estate investor ScanlanKemperBard Cos. to close the deal. The two had previously negotiated for the sale of a biomedical building in San Francisco but the deal didn’t push through, the report said.
“This is something of a milestone in South American capital winding up on the West Coast,” Bob Scanlan, SKB chairman and CEO, said of the transaction. “I think that is significant.”
Paige Morgan, Jones Lang LaSalle senior vice president for office capital markets, told the paper that while the sale “doesn’t make a trend,” interest from international investors “has picked up dramatically.”
The report did not disclose the previous owner of the American Bank Building, which was listed under the US National Register of Historic Places, prior to the sale. According to building information source Emporis.com, the building was previously owned by Transwestern Investment Company, LLC, which acquired the asset in 2000 and then sold it two years later.
Portland’s commercial real estate rebound was spurred by a demand for office spaces from technology firms. Citing research from commercial real estate firm Kidder Matthews, the Portland Business Journal noted that the city’s office market is the “tightest” in the country. The metro’s vacancy rate sits at 8.7 percent, according to the Kidder Matthews report.
One leasing company had 95 percent of its 7,000 square foot office space leased by September. While the occupancy rate was a welcome surprise to the said company, Venture Business Centers, it does not expect its business to grow that soon. The company’s owner, Brandon Cannady, said he thought his leasing business would only start to take off in May 2015.
Meanwhile, demand for commercial and industrial spaces were driven by Portland’s rebounding craft beer industry which saw production returning to 300,000 barrels a month, the Journal said in a separate report on Wednesday. As production climbs, many breweries see themselves requiring bigger and better spaces for expansion. Most of those that entered leases this month rented facilities covering 600 to 50,000 square foot.
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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.