Investor Snaps Up Wood-Construction Radiator Building
One of Portland's more unusual office properties, the Radiator Building, is trading hands. Manchester Capital Management recently obtained an $8M fixed-rate acquisition loan through a life company to facilitate the deal.
Completed in 2014, the 34K SF Radiator Building is an all-timber building, the first of its scale built in a century in Portland.
A priority of the project was to resuscitate the state’s timber industry; in the building's central courtyard are displays to educate the public about timber framing and building with wood.
An even larger wooden building is in the works in Portland. Last summer, the proposed 12-story Framework Building in the Pearl District obtained a building permit.
The fully leased Radiator Building, which is at 3530 North Vancouver Ave., is anchored by the Kartini Clinic, a pediatric eating-disorder treatment facility. The property also includes ground-floor retail space, bike parking, showers on every floor and on-site parking.
The HFF debt placement team representing the borrower consisted of senior director Jordan Angel and associate Zachary Kersten. HFF will also service the loan.
Overall, Portland's office market enjoyed a strong 2017, with occupancy and rent growth, and investors have noticed.
“2017 was a stable year for Portland’s office sector, with overall market vacancy closing in on single digits at 10.3%, tying the fourth quarter of 2015 as the lowest rate since the start of 2001,” said Mark Carnese, Cushman & Wakefield executive director in Portland. Cushman & Wakefield was not involved in the Radiator Building deal.
“We observed solid annual occupancy growth of nearly 750K SF, guided by both Portland's [central business district] and suburban markets, which posted healthy year-end vacancies of 9.5% and 11.1%, respectively. The CBD saw an especially strong fourth quarter.
“Looking to 2018, however, with an abundance of new high-quality construction set to enter the market, tenants will have more options available and therefore the amount of concessions offered may begin to increase.
"Vacancy is also likely to tick up as a result, although an anticipated higher level of office job growth in the Portland region should maintain stability in this market.”