Portland's Walter Bowen, CEO of the BPM Real Estate Group, recently submitted plans for a 35-story tower in the heart of downtown Portland.
The site, at 936 S.W. Washington St., known for now as Block 2016, is near Target and is currently occupied by a surface parking lot. It's also fringed by the Alder Street Food Cart Pod.
The tower will become Portland's fifth-tallest building,
What's a little more daring about the project is Bowen says time is ripe for Portland to have a five-star hotel, which will occupy nine floors of the tower. The rest will be 128 condos and 184,000 square feet of office space on six floors, with a food court on the ground floor. (Thousands of office workers rely on the food carts for a cheap or interesting meal.) There will be underground parking for 357 cars.
BPM is the developer behind Northwest 14th Avenue's Pearl West office tower, which is anchored by digital tablet company Wacom, and the soon-to-open Broadway Tower, which will house Amazon Web Services and a Radisson Red hotel.
Downtown Development Group, run by the Goodman family, owns the land where the hotel is proposed.
Bowen has not named a hotel brand yet, but his lead architect will be GBD Architects of Portland, and Howard S. Wright Construction will again be the builder. Howard S. Wright is headquartered in the Pearl West.
Walter Bowen answered the Business Tribune's 10 questions by email.
1. This was in the Business Tribune in 2016 at the groundbreaking of the Broadway Tower, the one with the upcoming Radisson RED Hotel. What changed?
Looking to the future, the developer, Walter Bowen, is content with the Broadway Tower. He's not planning another spec office building any time soon.
"My next project is in Bend, independent living apartments," he says.
Pearl West and the Broadway Tower were just opportunities in a market that was starved for good office space.
"Once this is done we're looking to go back to what we've always done on daily basis, senior housing. We will be delivering 136 independent living beds in a senior housing project in Bend this fall. Pre-leasing will begin soon."
The Block 2016 office component is roughly 22 percent of the entire tower and is approximately 175,000 rentable square feet on floors three through eight. As mentioned, we feel demand for office space will continue and block 2016 will be one of the few newly constructed office options in 2022. We are in conversations with several tenants that may lease a significant portion of the building prior to our May 2019 ground breaking.
2. Isn't the Portland office market tapped out?
The demand for newly constructed office space downtown will continue for the foreseeable future as Millennials prefer a central business district over the suburbs.
There are five newly constructed office buildings being delivered this year. Our Broadway Tower office component is already 80 percent leased and I expect it to be north of 90 percent when it opens this October. The other properties include Southwest Second and Taylor Street, which is 100 percent leased to NW Natural; 9 North by WDD, which currently has no leasing; and The Fields, which is a two building, 300,000 square-foot project that is approximately 20 percent leased. The market will easily absorb the remaining available space over the next 24-36 months.
Market demand, great location and the right project at the right time are keys to a successful real estate development. While the office sector might be in the eighth inning (with potential for extra innings) of the current cycle, we continue to be bullish on high quality, well-designed, newly constructed office space in Portland's urban core. Our block 216 project will be delivered the summer of 2022.
3. How long have you known the Goodmans?
I have known the Goodman family for more than 25 years.
4. Does this plot of land have special feng shui?
The invisible forces that harmonize Block 2016 include excellent multi-modal location in the heart of the West End (site is on the Portland Streetcar), million dollar views of the Cascade Mountain range, west hills and downtown Portland; adjacent buildings that were constructed in the early 1900s that are the "grand dames" of downtown; and views of the Willamette (and unfortunately ground water levels starting at about 50' which will make the underground parking construction costs more expensive). We believe this is the best-undeveloped site in downtown Portland.
5. How did you decide on the tower being 35 floors high?
The height limit for the site is 460' and thirty-five stories above grade maxes out the allowable height.
6. Have steel and aluminum tariffs affected your calculations?
Minimally. The building will be post-tension concrete. Construction costs are clearly increasing, but we have assumed price increases for both labor and material in our economic assumptions for the project.
7. Do you see much opportunity in smaller cities around the Pacific Northwest?
We continue to be active in Bend, having delivered 228 market rate apartments in 2017, 65 single family homes and senior housing which will be substantially completed this fall. Bend continues to be one of the fastest growing cities in America.
8. You told the Business Tribune that Pearl West was a hold, then you sold it. Why?
We did a short-term hold of a little over a year. The quality of Pearl West, its strong tenant roster and the fact that it was one of the few newly constructed office buildings in the Pearl, made it very attractive to institutional buyers. Pearl West sold for a record per square foot cost at the time. It was an offer we couldn't refuse. (LPF Pearl West LLC paid $87.5 million at $562.83 per square foot, a city office space record.)
9. Can the hotel/office configuration of Block 2016 still be changed?
It can be changed but does not need to be as it economically viable as planned with 175,000 RSF of office, 250 key Five Star hotel and approximately 138 co-branded residential condominium units. Each component is sized right for the Portland market.
10. What's next?
Reporter, The Business Tribune
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