Not a “Tertiary Market” Anymore
Millennial talent and a lower cost of doing business—those are key reasons Portland’s on the map now with institutional and foreign capital. And why the Portland boom has many innings left. (As long as a gross receipts tax doesn’t rain it out.) So said panelists at Bisnow’s 2nd Annual State of the Market summit on Tuesday.
250 joined us at the Benson Hotel. We opened with the Decemberists’ tune “Down by the Water,” since it was Dec. 1. Even more stirring might have been the Timbers’ fight song, but we couldn’t find it quick enough on Spotify.
Cairn Pacific founding principal Tom DiChiara says his firm’s just completed its first couple of projects in the Conway district and is ready to start on the next three blocks, effectively creating a new neighborhood from 17 acres of surface parking. New Seasons grocery, he said, has been a huge catalyst to other retail, and painstaking master planning and infrastructure work have paved the way for this implementation phase, including a big underground parking garage. Among the next milestones: the new location of Besaw’s.
Bremik Construction founder Brent Parry, who’s been busy with the likes of the Cameron and Burnside lofts, thinks the apartment market will slow down but definitely not go away, and office and industrial will keep getting stronger.
Capstone co-founder Chris Nelson, whose firm has been working on Conway, Grant Park Village, Burnside 26 and Bollywood theatre, is also zeroing in on Slabtown, where he says the ground-level retail experience will be critical. He says Portland now ranks in the top 10 US cities for institutional capital, meaning the city’s “best days are ahead of it.”
Portland Development Commission director of real estate and lending Jina Bjelland said plans are afoot both to develop the US Postal Service’s 20-acre site and find an 800k SF replacement. She says capital is cold calling her from all parts of the world these days, though often saying their minimum investment is $100M. She said she’d love to get them interested in places like Lents, not just the urban core.
Herding the cats beautifully: Interior Office Solutions marketing guru Melody Bridges.
Gerding Edlen partner Molly Bordonaro, whose firm has invested over $2B in Chicago, Boston, Seattle, LA and S.F., as well as Portland, cited urban vibrancy and amenities as attracting Millennials and companies like Google and Airbnb away from Silicon Valley. She said authenticity is the new era’s byword, and that young people don’t just want to check boxes for causes like LEED but feel like they’re engaged in the effort. So her firm tries to bring art, events and nonprofits to its buildings. And it’s found great response in using USGBC’s LEED Living Dynamic Plaque that shows real time performance in energy, water savings and waste management.
Killian Pacific’s Noel Johnson talked about how online bank Simple is moving from the Pearl to his firm’s heavy timber offering on the Central East side, where big wood columns and beams re-create a 100-year-old style, where young workers are happy to spend 10- and 11-hour days. Since tech company value largely derives from intellectual capital, Noel argues, buildings must do everything possible to attract and retain employees.
Holland Partner Group’s Brenner Daniels, whose firm has developed 2,000 apartment homes in Portland during this cycle, is working on three podium multifamily developments at Orenco Station. With the main existing alternative being garden-style apartments, they saw a big opportunity with proximity to Intel, Nike and Kaiser Hospital, and have added a public plaza, concerts in the park, ice skating rink, drinking fountains and outdoor kitchens—in other words, features typically associated with the city. They’re also closely curating retail and F&B, bringing in perky stores like Alotto Gelato, and working with the city of Hillsboro in a public-private partnership to enhance the quality of life.
TMT Development CEO Vanessa Sturgeon, who operates Tom Moyer’s portfolio of real estate, has wrapped up Park Avenue West tower downtown—with 13-foot ceilings, incredible views and move-ins starting January. Although her firm’s known for its high-rise office, they also do suburban retail and industrial. Vanessa says folks around the country are starting to look at Portland in a different way—as more than traditionally family-oriented businesses; banks in China are calling now.
As usual, the Benson hotel cut a striking figure, but this time of the year not just outside.
Inside was also pretty special. Happy holidays!