PHK Development's TwentyTwenty
Construction that broke ground in the second half of 2017 is now well underway for one of the very few condos being built during a building boom focused on apartments, offices and hotels.
The Business Tribune spoke with Pat Kessi, president and founder of PHK Development, which specializes in condominiums and Class A apartment, and only works in the Portland metro area. He is developing the new TwentyTwenty condo building in Sullivan's Gulch.
"We're really excited about the opportunity to bring a Class A condominium building to that neighborhood," Kessi said.
Plans include 162 units and one guest suite, along with below-ground parking for 172 cars and 179 bikes.
"We think people, if they're a retired couple, their kids can visit and stay in the guest suite," Kessi said. "If they're young professional, their parents and friends can stay in the guest suite."
PHK has already developed more than 1.1 million square feet of mixed-use residential real estate projects in the Portland metropolitan area. Notable projects include The Windward in Lake Oswego, Marvel 29 in St. Johns, the 937 Condominiums in the Pearl District and Thurman Street Lofts uptown along 23rd Avenue.
Condos v. apartments
Developers weighing the options between building for-sale and for-rent properties have much on their minds in Portland right now, especially since the Inclusionary Housing mandates affordable housing percentages in all new developments, changing the costs and returns.
"Now is a good time because there aren't very many condos being built right now, and there are quite a few for-rent apartments being built, quite a few office buildings being built, and hotel buildings, but there aren't as many developers who specialize in condominiums," Kessi said.
Back in 2007, 2008 and 2009 was the last time Portland really saw a significant number of condo buildings go up on the market — mostly in the South Waterfront.
"The difference between building them then and now, you could count them on one hand, the amount of buildings being built," Kessi said. "Back then there were quite a few high-rises being built, but the main difference between then and now is the amount of supply is much lower than it was then."
Condo development, which was booming before the Recession, dropped to zero in 2010. One came online in 2009 delivering 315 units to market; six condo buildings in 2008 offered 740 units; 11 in 2007 offered 1,431 units; and nine in 2006 offered 1,692 units.
"I like this location for condos because other apartments are being built, but no other for-sale condos are being built," Kessi said. "There's a need for people who are renting right now who would prefer to buy, but they need, they really want to see a quality building with concrete and steel, quality design and construction, and we're providing the opportunity for that in this building."
Since 2010, the Portland market has only seen four new condo buildings coming on to the market, beginning in 2016 with one that added 150 units. There were zero new condo buildings completed in 2017, but two slated for this year with a total of 167 units (Vista Pearl, 153 units; and Carbon 12, 14 units) and of course TwentyTwenty, slated for 2019, adding 162 units.
"We're really trying to provide the
opportunity at a really good price," Kessi said. "There are only a couple other (condo) buildings being built right now, and the only one I think is comparable to ours from the standpoint of construction type — Type 1 high-rise with concrete and steel — that's the Vista Pearl," designed by Bora Architecture and also constructed by Andersen
At Vista North Pearl as it is now known, condos are going for around $1 million, depending on the floor plan.
"Our goal is to bring these for-sale condos to market with one-beds starting in the upper $300,000s, and two-beds starting in the $600,000s," Kessi said. "We really believe we're meeting the price point that's very attractive for people renting Class A apartments or people who want to sell their home in Hollywood or Laurelhurst off Hawthorne but stay on the inner east side — this gives them a great opportunity to buy a home with one-level living, secure parking, elevator access and amenities that are Class A. That's really why we think for-sale would be really desirable."
"We are really excited about this particular location for condominiums because it's a five-minute walk to the Lloyd District employment area, which has about 20,000 jobs and we found there's a 17:1 job-to-housing ratio — they really need housing in that area, and for-sale housing at that," Kessi told the Tribune. "The Irvington neighborhood is about five blocks to the north. That's a very affluent neighborhood and for somebody to buy a new place in that neighborhood starts at $1 million."
It's also nearby the restaurant row at Sandy and Burnside.
"To the south, the Central Eastside job district is a five-minute walk with another 10,000 jobs," Kessi said. "We're very excited about this particular location and providing for-sale housing, and someone can essentially live in our building and walk to work, walk to the MAX stop right across from the Lloyd mall, take a pet on a walk through Irvington, or can walk down to dinner at Sandy and Burnside at a really nice place."
There's something walkable in each of the four directions.
"Because of the proximity to everything, we thought it would be a preferred spot and one of the best spots in the inner east side," Kessi said.
Formerly, there was a house on the location. According to the City's assessor, the market value of the property was $3.116 million in 2017.
"We've been working with the seller of the property since 2005, and reasonably because of the dynamic location were originally looking at condominiums there in 2005," Kessi said. "We couldn't come to an agreement with the seller, and started working on it again in 2013. We came to an agreement in 2014 and really began our upfront entitlement period and have been working on the property in that location for over 10 years now."
The style of the building was inspired by geological forces.
Sullivan's Gulch was formed more than 13,000 years ago at the end of the last ice age. The ice dam containing Glacial Lake Missoula thawed an estimated 40 times, causing floodwaters to spill across what's now Idaho and eastern Washington, surging down the Columbia River and through the Gorge, flooding the Willamette Valley. The Missoula Flood covered Portland with approximately 400 feet of water, ultimately carving out Sullivan's Gulch.
"The whole exterior of the building and also the interior of the building is designed with that inspiration in mind — Missoula Floods and how they carved off Sullivan's Gulch and the tremendous history of that whole area."
He chose Hacker Architects because they've worked together before, and because their company values match. Hacker was recently recognized as an Architect 50 firm for the third straight year, a list that ranks the top 50 architectural firms in the U.S. through measures of performance across 14 critical business, sustainability and design categories. Andersen Construction is the general contractor.
"As we looked at the history of Sullivan's Gulch, we saw an opportunity to embrace the geological forces that created the land and explored what a building could look like if the form of the building eroded and we carved back the scale at, and around, street- level," said David Keltner principal of Hacker. "This ultimately inspired TwentyTwenty's design, allowing us to blend the building into the neighborhood and complement the variety of surrounding home styles."
Plans include a museum-inspired interior courtyard dedicated to the history of the neighborhood and how it came to be.
"That's a really unique piece of this building that one doesn't really see in a building," Kessi said.
There will also be a fire pit area, BBQ, guest suite, fitness center and a bike lounge — not just a storage room. Only a handful of other condo buildings in Portland have these Class A-type amenities.
"The bike lounge — imagine an island and lounge furniture, and a TV with Tour de France playing, and being able to congregate with like-minded people who like to go on long bike rides," Kessi said. "One wall will have a map of all the bike rides a person can take from Sullivan's Gulch. In the bike lounge will also be private bike locker, a bike wash with a bike repair area and a bike vending machine with different parts in case someone needs a tube for their tire. It's an area for bicyclists to congregate and either hang out there before going on a long bike ride, or to relax there after a long bike ride and really form a sense of community with each other."
The property is right along the future Sullivan's Gulch trail the City is planning.
"It's supposed to go all the way out east, as is 33rd Avenue, and go into the downtown area with a bike trail," Kessi said. "We have designed our building right on 21st to incorporate that trail in the future, and when they build that trail, tie into
21st an access point to the trail. The bike lounge is right along the access point — someone can go outside our bike lounge and hop right on to that Sullivan's Gulch trail."
The development is aiming for LEED Platinum, and is expected to reach completion in Summer 2019. TwentyTwenty is already taking reservations, and the office and show room will open this
By Jules Rogers
Reporter, The Business Tribune
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