10-11-2013 05:38 PM

Week in Review: The west side is where it's at


Gerson Bakar & Associates paid $39.3 million for The Jones, a 193-unit recently developed apartment complex in Hillsboro. Employment growth on the west side is fueling real estate activity in the apartment, office and retail sectors, according to new reports from Marcus & Millichap.




The Business Journal spilled some virtual ink this week on a couple of noteworthy transactions involving Hillsboro real estate.
Real estate investors clearly love the tech-fueled growth that’s driving the Hillsboro and Beaverton economy.
Intel Corp. is wrapping up its $3 billion D1X fabrication plant. Kaiser Permanente spent more than $350 million on its new Westside Medical Center. Salesforce.com leased a never-opened campus at the Synopsys campus, Oracle is moving 130 jobs from Mexico to its local offices and Nike is preparing to construct two office building totaling 500,000 square feet.
It was no surprise then that investors pay big prices for the kind of real estate that stands to benefit from the rise in employment.
San Francisco-based Gerson Bakar & Associates paid $39.3 million for The Jones, a 193-unit apartment complex in Hillsboro, or $203,000 per unit.
Then came word that RLJ Lodging Trust paid $24 million for the SpringHill Suites by Marriott Portland, or $226,000 per room for the 106-room property in Hillsboro.
Both deals commanded prices well above the market average. Its not surprising that as third quarter reports start coming out from local real estate brokerages, the west side factors high. Marcus & Millichap notes westside activity drove activity in the office, apartment and retail sectors.

  • Office — The headline is downtown, where federal agencies are giving back leased space as they return to the renovated Edith Green-Wendell Wyatt Federal building, freeing up large blocks of space in a constrained market. But on the investment front, competition for properties in California is pushing buyers into Portland, where they’re seeking assets in the major employment districts, including downtown, Hillsboro, Clackamas County and the airport area.
  • Apartment — Job growth in the west side submarkets led to an increase in housing demand, sparking construction of more than 700 market rate units in the area. It predicts that workers moving to be close to their jobs will fill the new units and keep vacancy rates low.
  • Retail — Retailers are following employers and expanding in Beaverton and Hillsboro. Notable new entrants include California-based Orchard Supply Hardware and Colorado-based Natural Grocers, which both introduced themselves to Oregon by way of Beaverton. “Beaverton’s location near the urban core and proximity to employment centers has created strong demand for housing in the area, while also driving retailer demand as potential tenants look to establish roots in the growing community.”

Wendy Culverwell covers real estate, retail and hospitality.


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