PCCP Buys Portland Office Property for $97M

Park Square offers 296,000 square feet across two buildings in the city’s central business district. Urban Renaissance Group will manage the complex, which was substantially renovated in 2016.
Park Square. Image courtesy of PCCP LLC

PCCP LLC has acquired Park Square, a two-building, 296,000-square-foot, Class A office property in Portland’s central business district for $96.5 million. The real estate finance and investment management firm did not disclose the seller of the asset. In recent years, the property was sold at least twice, according to Yardi Matrix data. Cambia Health Solutions, one of the property’s tenants, sold it to CalSTRS in December 2013 for $48.8 million, or $165 per square foot. CalSTRS sold the property to WealthCap in October 2016 for $94.4 million, or $319 per square foot.

In November 2016, Commercial Property Executive reported the property had been marketed by HFF on behalf of Clarion Partners LLC, which was acting as an advisor to a separate account client. The purchaser at that time was identified as a European separate account client advised by CBRE Global Investors.

Park Square, which is nearly fully leased, was substantially repositioned in 2016, when its 8,000-square-foot lobby/great room was renovated. The property has two buildings connected by the lobby/great room, which includes multiple seating areas, a fireplace, lounge area and Garden Bar, as well as a local soup and salad bar.

The first six-story building has 181,049 square feet and a single tenant. Located at 1621 SW 1st Ave., the project was constructed in 1984 as a build-to-suit for the tenant. The second property was built in 1964 at 100 SW Market St. and has 113,719 square feet. The seven-story building has three investment-grade credit tenants. One of the tenants is the Oregon Department of Justice, which leases 51,620 square feet, according to Yardi Matrix.

Park Square is adjacent to the SW Portland Pedestrian trail, a half-mile, tree-lined walking trail that connects SW Market and SW Lincoln streets. It is also three blocks from the Tom McCall Waterfront Park that has views of the Willamette River and running and biking trails. It is located on the south end of the city’s CBD and also near Portland State University, Oregon’s largest university, as well as major freeways.

Urban Renaissance Group will manage the asset for PCCP. URG is one of the top real estate operators in the Pacific Northwest, with more than 8 million square feet owned or managed in Portland, Seattle and Denver.

PCCP deals

In February, PCCP acquired a 137,393-square-foot, Class A office building in San Francisco from Lexington Realty Trust for $120 million. The four-story office property is located at 350 Rhode Island St. in the city’s Potrero Hill neighborhood and within the Showplace Square office submarket. It was fully occupied at the time of sale.

In November, a joint venture of PCCP and SteelWave acquired Canyon Business Center, a 17-building, 632,591-square-foot property in the Seattle suburb of Bothell, Wash.

More recently, in April, the firm provided a $103 million senior loan to Renault & Handley Mid-Peninsula Joint Venture to develop 600 Clyde Ave., a 190,000-square-foot office building in Mountain View, Calif. Google will be the sole tenant in the new Silicon Valley office building.