An institutional investor advised by Specht Development acquired 220 NW Second Ave., a 238K SF office tower in the north end of Portland’s central business district in Chinatown, for an unspecified price. HFF marketed the property on behalf of the seller, Menlo Equities.
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220 NW Second (One Pacific Square) has been NW Natural’s headquarters since the building was completed in 1983. With NW Natural’s decision last fall to relocate to 250 SW Taylor in 2019, the new ownership said it will have the opportunity to reposition 220 NW Second by modernizing the lobby, adding first-floor shared tenant amenities and activating existing retail spaces.
“We continue to see value-add opportunities priced aggressively across the Pacific Northwest,” HFF Director Logan Greer said.
“Within the closed-end fund space, an immense amount of capital has accumulated and, with few opportunities in the market, we don't expect the pent-up demand for value-add product to decline anytime soon.”
The HFF investment advisory team included Greer, Senior Managing Director and co-head of HFF’s national office investment advisory platform Michael Leggett, Senior Managing Director Gerry Rohm, Senior Director Ben Bullock, Director Dave Otis and analysts Jeff Hodson and Kevin Freels.
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Portland might be out of the running for Amazon HQ2, but high construction volume, institutional investor confidence and robust leasing activity all reaffirmed the strength of its office market at the end of 2017, according to Kidder Mathews' Q4 2017 report on Portland office.
Vacancies marketwide fell to a new cycle low of 7%, following about 324K SF of positive net absorption, nearly all of which occurred in the Downtown area, the report said. Rental rates climbed by 5.2% year over year, to an average of $25.88/SF.
"Institutional investors continue to see value-add opportunities in the Portland market, acquiring properties with the intent to upgrade and reposition at a substantial profit," Kidder Mathews reported.
"The local economy has benefited greatly from the growth of the technology sector, reporting sub-4% unemployment rates throughout the fourth quarter."
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