An affiliate of Seattle-based Meriwether Partners acquired a 329K SF industrial campus in Tualatin for $26.5M recently, but it was no typical industrial deal.

Instead of pursuing a conventional big-box property, Meriwether found a manufacturing facility leased long term to a single tenant, Nortek Air Solutions.

Big-box industrial is the darling of our time — apartments are so 2015 — gaining ground in valuation and absorption. That puts investors in something of a bind, as hordes of competitors armed with loads of capital chase big-box industrial deals.

“In today’s market climate, it's more challenging to find quality assets at decent prices," Cushman & Wakefield Senior Director Jim Lewis said.

"Buyers are beginning to look at other opportunities that have potential to provide higher returns. In this case, it was a manufacturing campus instead of a more traditional big-box distribution warehouse.”

Industrial fundamentals are certainly strong in greater Portland. Overall vacancy in Portland’s industrial market is a tight 3.5%, according to Cushman & Wakefield Q3 data.

There was 870K SF of positive net absorption during the quarter, bringing total occupancy growth to 2.35M SF year-to-date. Occupancy growth was 36% higher through September 2017 than the same nine-month period in 2016.

At 19855-19866 SW 124th Ave., the three-building campus serves as Nortek's HQ and manufacturing facility. The rail-served property is on about 25 acres and features 32K SF of office space, 39 grade-level doors, 14 dock doors, heavy power, LED lighting and 291 surface parking spaces.

Nortek makes custom HVAC systems. The company uses the facility for R&D, project management, engineering, fabrication, powder coating, assembly and shipping.

The Portland industrial market is also tight because owners are holding onto their properties.

“Only a few significant acquisition opportunities become available in Portland each year, and when they do it's usually extremely competitive as well as dominated by out-of-state buyers,” Cushman & Wakefield Senior Director Gary Griff said.

Lewis and Griff, along with Aaron Watt, a director who is also in the company’s Portland office, represented the buyer. Stu Peterson and Rhys Conrad of Macadam Forbes represented the seller, Huntair Properties.