By Keith Loria, Contributing Editor
A joint venture between American Realty Advisors and Unico Properties LLC has acquired MODA Tower, a 398,412-square-foot office building in downtown Portland, Ore. UBS Realty Investors was the seller, according to Yardi Matrix.
These companies also teamed on last year’s purchase of the Congress Center, a 23-story Class A office high-rise located in the heart of Portland’s CBD. Their latest acquisition is currently 90 percent leased.
“Portland’s CBD has quickly emerged as one of the nation’s fastest growing tech and innovation hubs,” Albert Pura, ARA’s senior director, said in a prepared statement. “Firms are continuing to migrate to the region in search of strong value alternatives as compared to San Francisco, Los Angeles and Seattle. MODA Tower will benefit from this ongoing economic growth and migration of jobs, driving long-term demand for the property and placing upward pressure on rents.”
Rare asset in the market
MODA Tower is ideally situated in Portland’s bustling central business district, and boasts high-quality finishes, panoramic views, an on-site Nordstrom Rack and a five-level parking garage.
The building’s unique design creates six corner offices on every floor and amenities at the property include an on-site daycare facility, gourmet coffee and food service, bike storage, exterior terraces and unobstructed views of Mt. Hood and Willamette River.
Located at 601 SW 2nd Ave., the 24-story tower was built in 1998 and is one of the few office properties delivered in the area in the past 20 years.
“Most of the office buildings throughout the region are of older vintage and require significant capital investment in order to remain competitive,” Pura said. “This was a rare opportunity to acquire a newer asset with strong in-place cash flow, one of the most prestigious business addresses in the city, and very limited opportunities for new development of an office property of this scale due to a lack of available sites.”
The Class A building offers direct access to the MAX light rail transit system.
MODA Tower is home to original tenants MODA Health and Lane Powell. According to Pura, the joint venture’s approach is to purchase buildings that will deliver long-term value to investors and be sustainable in times of economic volatility. Therefore, the property’s contractual long-term leases, variety of revenue streams, and overall market fundamentals fit those needs perfectly.
“We strategically target properties that have proven track records and strong in-place occupancy,” he said. “At 90 percent occupancy, the asset has immediate stabilized cash flow with opportunities to increase NOI through leasing remaining vacant space, as well as taking advantage of ancillary revenue opportunities within the five levels of parking.”
Jason Flynn at Eastdil Secured represented the seller in the deal.
ARA currently has more than $8.7 billion in assets under management. Unico Properties’ portfolio consists of 17 million square feet of commercial properties. Both companies have been active recently. In September, Unico Properties acquired One Nashville Place, a 24-story, Class A office tower in Nashville, Tenn. In August, ARA acquired Northshore, a mixed-use tower in Austin, Texas.
Image courtesy of American Realty Advisors and Unico Properties