Prudential Pays in Portland
- Aug 06, 2015
By Scott Baltic, Contributing Editor
Prudential Real Estate Investors has acquired Block 300, a 361,800-square-foot Class A office property in downtown Portland, Ore., on behalf of institutional investors, PREI announced Tuesday. Financials on the transaction were not disclosed, but the Portland Business Journal reported online that the property had been marketed by Eastdil Secured and estimated that the sale garnered about $153 million, or about $425 per square foot.
The 10-story Block 300, at 308 S.W. Second Ave., was built in 1991 and won LEED Gold certification in June 2014 as part of substantial renovations it underwent in 2013 and 2014. Other upgrades included a fully redesigned lobby; an updated fitness center with locker rooms and secure bicycle parking; a new conference center on the lobby level, exclusively for tenant use; and elevator cab and common area restroom updates. All renovations were designed by the building’s original architectural firm, Portland-based ZGF.
“The recently renovated Block 300 will continue to benefit from increased demand from technology companies seeking Class A office space with modern amenities, efficient floor plates and easy access to mass transit,” Kevin Smith, head of Americas at PREI, said in a prepared statement. “Our purchase is a continuation of our strategy to pursue urban office properties below replacement cost to capitalize on the expanding job market and deliver strong and stable cash flows to our investors.”
According to the Block 300 website, the building has about 33,600 square feet of available office space, on the second and seventh floors, indicating an office vacancy of about 9.2 percent. Current tenants reportedly include tech companies Aruba Networks, CrowdCompass and Puppet Labs.
Over the past 12 months, office transaction velocity in Portland jumped 40 percent following just a 4 percent rise in the prior period, according to a second-quarter report from Marcus & Millichap. High demand for quality assets in Portland’s CBD reportedly drove the average sale price for Class A properties metrowide up 47 percent, to $261 per square foot in the first quarter.
Interestingly, the report stated: “Renovated office buildings in the Pearl District and near downtown Portland will attract buyers seeking stability.”
In mid-May, PREI acquired the retail and office portions of Mercato, a mixed-use development in Naples, Fla., from an ownership group comprising Barron Collier Cos., the Lutgert Cos. and Madison Marquette, for a reported $240 million. Completed in 2009, Mercato consists of 13 buildings on 53 acres and totaling 321,000 square feet of retail space, 135,000 square feet of Class A office and 92 separately owned residential condominiums