NAI NBS Special Asset Team and Johnson Reid Team Up to Release 3Q09 Single-Family Housing Report

NAI Norris, Beggs & Simpson’s Special Asset Team and Johnson Reid, a consultancy specializing in real estate development and land use economics, have collaborated to release a single-family housing report for the Portland metro area for Third Quarter 2009.

The report covers both lots and standing inventory in Portland and Vancouver, and contains some good news for the market.

“Market watchers think that the bottom of the curve is behind us and that we are well on our way into a recovery in this hard-hit market,” said NAI NBS Executive Vice President H. Roger Qualman, who heads up the Special Asset Team.

The inventory of new and used homes and lots is declining, the report says, and houses between $150,000 and $199,000 are a sweet spot for action.

NAI NBS’ Special Asset Team, consisting of five brokers in Portland and Vancouver, was created within the firm to respond to the collapse of property markets through the Pacific Northwest. Tight financing for housing, investors and developers has created a need for its services as stress is placed on banks, bankers and banking relationships. The Special Asset Team works with lenders to provide strategic solutions for distressed assets, improved properties or loans.

The full report can be found here.

NAI NBS Adds Braam to Special in Sales of Special Assets

Sierk Braam has joined NAI Norris, Beggs & Simpson’s Vancouver office as a Real Estate Salesperson specializing in the sales of special assets. Braam joins NAI NBS' Special Asset Team, an existing team of brokerage professionals working with lenders on foreclosed or bank-owned properties, including subdivisions, entitled land, and improved properties in the Portland Metropolitan Area.

Most recently, Braam served as Vice President of Specialty Lending and Emerging Markets for National City Mortgage’s Western Division. He was responsible for managing specialty lending and emerging markets and increasing specialty production by at least 20% every year.

Braam holds a Bachelor of Arts from the University of Oregon, and a Master of City and Regional Planning from Ohio State University.

It's Time to Get Involved in Metro Process

Business community’s input is vital during urban growth boundary periodic review

Mike Tharp, Associate Vice President, NAI NBS

Everyone in the business community who is interested in fostering the Portland-metropolitan region’s economic vitality and long-term stability needs to care about the adequacy of our regional urban growth boundary, which encompasses 25 metropolitan cities and urbanized portions of Clackamas, Multnomah and Washington counties where future urban growth will be allowed to occur under Oregon’s land use system.

Every five years, the state charges Metro, our regional government, with analyzing future demand for housing and jobs to ensure that at any given time there is at least a 20-year supply of residential and employment land within the UGB. A strong economy is a product of the adequate availability of both affordable housing and family-wage jobs, which are needed to achieve the quality of life valued by the region’s citizens.

The process for projecting job growth – in the retail/service, office, institutional and industrial sectors – and then translating it into acreage is very complex. The process includes: balancing past experience and future trends locally, regionally, nationally and internationally; considering site- and location-specific characteristics of various employment sectors; and accounting for market, regulatory and “aspirational” characteristics.

The latter is an expression of the state’s and region’s value on compact urban development and efficient use of resources and infrastructure such as water, sewer and roads. A similar, but somewhat less complicated, process is used to determine residential land need. As the lead agency charged with periodic review for the Portland-metro area, Metro must both quantify residential and employment land demand and identify existing capacity – both vacant land and opportunities for infill and redevelopment – within the current boundary.

If there is a shortfall of land, Metro must decide where and by how much to expand the UGB. The last such expansion occurred in 2002, when most of the additional demand was accommodated by bringing the 12,000-acre Damascus/Boring area into the regional UGB. Due to a lack of adequate infrastructure funding, little growth has occurred in this expansion area over the past seven years.

In this current periodic review, the Metro Council has until the end of 2010 to adopt its solution for accommodating the required combined 20-year land supply for housing and jobs. As an added complication, Metro has been authorized by the state to identify an additional 20- to 30-year land supply, referred to as “urban reserves,” that is most suitable for urban development and, thus, where all future growth beyond this five-year review will be directed.

Urban reserves will be matched by a comparable supply of “rural reserves” – high-value farm, forest and natural resource land – that should be protected from future growth.

Given the complex technical, regulatory and political environment for the periodic review, particularly for the employment land element, it is critical that representatives of the business community (end-users and those who facilitate the sale, leasing, development and management of commercial, industrial and institutional buildings) stay involved in the Metro process at every level.

Only by participating “early and often” can the business community influence and shape the outcome. What is the desired outcome? A sufficient supply of employment land distributed throughout the region that responds to market demand at a reasonable cost and with access to basic infrastructure and a trained workforce. Anything less will strangle the region’s continued growth, particularly in the face of the current downturn.

Many members of the business community are closely monitoring this round of the regional UGB periodic review. Working in an informal alliance, these business groups have:

• Funded a mapping project to identify the acreage immediately adjacent to the existing UGB most suitable for urban development and, therefore, candidate areas for UGB expansion and future urban reserves;

• Encouraged Metro to hire an independent economic team to identify regional economic and employment trends over the next five, 20 and 50 years to inform the technical analysis of future job demand and related land needs;

• Jointly funded with Metro a series of eight focus groups with end-users in several employment sectors to identify future trends in their companies and industries that will determine their location, facility and infrastructure requirements; and

• Supported several public works projects such as the proposed I-5/Columbia River Crossing Replacement Bridge and Sunrise Corridor projects as well as lobbied for improved state and federal transportation infrastructure funding.

There are a myriad of ways in which individuals, companies and trade organizations can participate in this process, such as: staying informed, joining the informal coalition of business groups, funding research projects to support the business community’s technical research, and providing written and oral testimony at key decision points.

This Land Problem Needs a Solution

A lack of ready-to-develop industrial sites is hurting the Portland-area economy

Jack McConnell, Senior Vice President, NAI NBS

When Senate bill 100 went into effect in Oregon in 1974, it required each Oregon town to maintain within its Urban Growth Boundary a 20-year inventory of land for ongoing residential development. Yet the bill was incomplete because it neglected to include a similar requirement for maintenance of an inventory of land for retail, office and industrial development.

Today, in the greater Portland area, there is a significant shortage of ready-to-develop land sites zoned for industrial use, especially along freeway corridors where an increasing number of businesses prefer to locate. Yet demand is still present for local firms to construct their own facilities and other firms to enter the region. In fact, it would be accurate to describe this shortage of land sites as “a clear and present danger” – a situation that will continue to hurt both our economy and our image.

Metro will tell you there is a more-than-adequate supply of industrial property to accommodate expansion and new development. And when considering only the number of acres available, that conclusion may seem accurate. However, such a conclusion is wrong and damaging to our community’s economic health, now and in the future. Numbers alone can be seriously misleading.

A recent study by a Portland engineering firm identified 9,300 buildable acres inside the Portland-metro UGB. But of these 9,300 acres, the great majority represent very small sites; many are just one acre or smaller.

Also, as many as 4,600 of these 9,300 acres (49 percent) are not even available to purchase and use (that is, the owners simply do not want to sell their land). This fact makes it unreasonable to include those acres in the inventory, because doing so implies availability.

Finally, most of those acres identified as buildable have serious development constraints (i.e. wetlands, lack of adequate utilities, sloping topography, poor configuration, environmental contamination, undesirable location, etc.), making them impractical to use and/or too expensive to correct for new construction.

There is only one sector of Portland that has significant industrial lands available for sale and new development. The largest inventory of such lands (approximately 300 acres) is located along Highway 26 in the Beaverton-to-Hillsboro corridor. However, the great majority of firms prefer to locate on or near the major north-south spine of Portland (Interstate 5), or on the east-west I-84 corridor. These routes allow quicker and less costly travel within the Portland area and beyond. Also, they provide the easiest routes to the Port of Portland’s marine terminals on the Willamette and Columbia rivers and the Portland International Airport.

Here’s another way to address the real issue here: If a local or new company wants to purchase, say, a 5- to 10-acre industrial-zoned site along the I-5, I-205 or I-84 freeways in the Portland area (from Wilsonville north to the Columbia River, or east from state Route 217 along I-84 to Troutdale), the list would include no more than six available ready-to-develop land sites. If the need was for a site 10 to 20 acres, the list would include no more than two parcels. And for sites of 20 acres and larger, there would be no list, because no ready-to-develop sites of that size exist today in these corridors.

Why should the citizens of Portland and the state of Oregon be concerned about this? Because a lack of land sites available for local firms looking to expand and others eager to enter our marketplace conveys a lack of commitment to business development and the creation of jobs. Such a realization by companies will drive them out of the area, to seek land sites (and more business-friendly environments). This is true at any time, in good and not-so-good economic times.

Here is what our civic leaders (both in Portland and throughout all Oregon communities) need to do now, to address this very real problem:

Remember that “quality of life” starts with a job, for every Oregonian.

Recognize that current land-use laws within Oregon are broken, slowing the creation of new lands for expansion and new development, which hinders job creation, which hinders quality of life for us all.

Stop talking about the problem. Identify the real problem and take steps to fix it … sooner rather than later.

Create an accurate inventory of “truly usable, truly available, ready to develop” industrial-zoned land sites.

Recognize the need for a sufficient inventory of these sites at all times within each community’s UGB, to meet the always-present demand for land parcels that will surely grow as the economy turns upward.

Commit financial resources to providing urban services (utilities, streets, etc.) to make these land sites “ready to go” for each expanding or new company.