By Keith Loria
A joint venture between SteelWave and Barings Real Estate Advisers, acting on behalf of an institutional investor, has acquired 400 Sixth Avenue, a 208,477-square-foot Class A office tower in Portland, Ore., from Felton Properties. The asset traded for $68 million.
“We have been evaluating the Portland market for two years and are excited to make our entry into Portland, in this cycle, by acquiring an asset with such great potential,” Peter Llorente, SteelWave’s managing director of acquisitions and development, said in a prepared release. “With our partner, Barings, we have significant improvement plans for this asset.”
NKF Capital Markets’ Nick Kucha, vice chairman, and James Childress, director, represented the seller in the transaction.
“This property sale is testimony to a market that is continuing to show strength and growth,” Childress said. “Institutional real estate capital views the fundamentals of Portland with optimism and wants to be here. We expect to see continued upward pricing momentum as outside groups look to plant a flag in Portland’s office market, as tenants and as buyers.”
The 11-story, multi-tenant property is situated in the Portland CBD and boasts up to 17-foot slab-to-slab heights, 10-foot window lines, and provides unobstructed views of Mt. Hood to a potential new anchor tenant. It also offers bike storage, a fitness center, tenant lounge, subterranean parking and is strategically positioned on the transit mall, allowing for direct access to bus and light rail transportation options.
The new buyers have plans to reposition the asset to creative office and will add to and modernize the existing amenities in order to create a best-in-class tenant experience. “The acquisition of this building provides an opportunity to continue an investment strategy that has proven successful in other markets with creative, forward-thinking tenants,” Chris Black, Barings Real Estate Advisers’ managing director, said. “Highly amenitized common areas will be constructed and office spaces will be built out to accommodate tenants desiring a collaborative work environment.”
According to JLL’s Third Quarter Office Market Report, after a tepid first quarter, Q2 absorption pushed the city’s year-to-date absorption into positive territory and the increasing Q3 demand brought Portland back on track for a normal, positive year. In fact, Q3 experienced more than 300,000 square feet of positive net absorption, with over 2/3rds coming from CBD Class A.
Last week, SteelWave teamed with Invesco Real Estate to acquire the 24-acre former L.A. Times printing facility in Orange County, Calif., from Tribune Media and Kearny Real Estate Co. in an approximately $65 million transaction.
Photo courtesy of NKF