First Quarter 2010: Portland's Central City Office Vacancy Stable, Suburban Still Rising

Central City office vacancy remained stable this quarter at 11.99% (see vacancy comparison chart at right), with 54,312 sf absorbed. Some significant sales and leases occurred, especially in the Central Business District. The General Services Administration (GSA) signed four leases totaling more than 250,000 sf at First & Main, which delivered this quarter, and Alpha Broadcasting leased more than 25,000 sf at Pacwest Center. In one of the largest sales in recent months, KBS REIT II purchased One Main Place for $57 million, or about $180 per sf. American Pacific International Capital Inc. also purchased the office portion of the KOIN Center, reportedly for between $53 million and $60 million. Vacancy in Northwest fell more than a percentage point to 15.69%, as two tenants leased space at Machine Works, including the GSA in 19,431 sf.

Suburban office vacancy rose about a percentage point to 21.93%, with negative 142,240 sf absorbed. The Barbur Boulevard, Beaverton-Hillsdale/Sylvan and North/Northeast submarkets all saw vacancy rise at least two percentage points. Though vacancy in the Kruse Way submarket stayed relatively stable, this area saw some movement, including M & T Bank relocating from Kruse Woods I to about 20,000 sf in 4949 Meadows. A few submarkets had positive absorption, such as I-5 South, where vacancy decreased slightly and Pinnacle Mortgage Bankers leased 16,000 sf at Durham Office Center. Though a number of suburban buildings are totally empty, one will soon be fully occupied. The Oregon Institute of Technology is planning to purchase the 131,000 sf former headquarters of InFocus in Wilsonville, and consolidate its four Portland-area locations there. InFocus moved out of the building last fall to a smaller office in Tigard.

Vancouver vacancy fell nearly half a percentage point to 18.10%, with 42,644 sf absorbed. Vacancy in Class C space fell five percentage points to 14.57%, as 29,000 sf was leased up at the Former Red Lion Headquarters. Class A and B space also saw some significant absorption; Doug Williams and Associates and Richard James and Associates both signed leases at the Thurston 500 Building, totaling 12,583 sf.

Featured Deal: General Services Administration Leases

The General Services Administration (GSA) leased nearly 260,000 sf at First & Main at the west end of the Hawthorne Bridge. The GSA leases were the first for the building and took the office areas to 76% leased. The tenants were displaced by the redevelopment of the Edith Green-Wendell Wyatt Building and plan on taking occupancy in May. NAI NBS Vice President Jeff Borlaug, Executive Vice President Chris Johnson and Vice President MaryKay West represented First & Main’s owner, Shorenstein Realty Services.

John's Incredible Pizza Coming to Portland

John’s Incredible Pizza, a family entertainment restaurant with ten locations in California, has leased space in the Portland metro area to open its first restaurant in the Pacific Northwest.

John’s leased 46,212 sf at the former Circuit City at Washington Green Shopping Center, 9180 SW Hall Boulevard, Tigard, Oregon. NAI Norris, Beggs & Simpson Real Estate Broker J.J. Unger and NAI Capital Senior Vice President Irwin Hyman represented the tenant. Hyman, out of NAI Capital’s Encino office, represents John’s in California, and through the NAI Global network teamed up with Unger when the company wanted to expand into the Pacfic Northwest.

A multitude of big box spaces have become available in the last two years with the closures of chains like Circuit City, Linens ‘n Things and Joe’s Sports, Outdoors & More.

“Landlords can find interested tenants, but in this market it’s been a challenge putting together a deal that works for both parties, and most importantly, finding a tenant that’s a fit for the merchandising plan of the shopping center,” Unger said. “It is a great win for Portland to gain such a unique new tenant from out of the area.”

The restaurant is expected to open in the First Quarter of 2011 and will create about 110 full- and part-time jobs.

John’s chose Portland to expand because it saw the opportunity to fill a niche that’s traditionally been underserved for entertainment, Unger said. The restaurant also believes it will be a good fit because of the weather – rain or shine, it will give families an indoor entertainment option and be a venue with the capacity to cater to large corporate functions. Though the Portland location is John’s Incredible Pizza’s first foray out of California, it has plans for more.

“We are pleased to bring our family-focused restaurant and entertainment facility to Portland,” said John’s Incredible Pizza Owner and Founder John Parlet. “We have been eager to expand our concept outside of California and found the perfect site in Portland and are excited to become an integral part of the community.”

John’s Incredible Pizza offers an affordably-priced all-you-can-eat buffet. It serves pizza, including classic varieties and signature ones like spicy peanut butter, macaroni and cheese, and cheeseburger pizzas. It also has a full salad bar, soup, pasta, and dessert buffet. It has a number of themed dining rooms, and an array of rides and games, including carnival-style rides and video and ticket-dispensing games. John’s hosts birthday parties, business events, lock-ins and more.

NBS Celebrates 78th Anniversary Today

Today marks Norris, Beggs & Simpson's 78th anniversary. Here's a brief look at NBS' history.

NBS was founded in 1932 in Portland, Oregon, by A.D. Norris and George Beggs, and later joined by David B. Simpson. The company had a small office in the Wilcox Building, which still stands today at the corner of SW 6th Avenue and Washington Street in downtown Portland.

With the country mired in depression, few areas of the economy were left unscathed. Though the real estate industry suffered, Norris, Beggs & Simpson quickly became profitable by specializing in property management and acquiring many prominent families of the Pacific Northwest as clients.

New England Mutual Life Insurance Company of Boston played a key role in the early growth of Norris, Beggs & Simpson, by enlisting the company to manage a series of foreclosed properties in Portland and appointing the company as its mortgage loan correspondent in the area. Commercial and industrial brokerage services were also added to expand the company’s reach, and an emphasis was placed on involvement with major financial institutions.

NBS expanded into a full-service operation, and opened its Vancouver office in 1985 and Bellevue (now Seattle) office in 1988.

Today, NBS is the parent company of four different branches, including NAI NBS, which joined the NAI Global network in 1982. NBS has continued to grow and adapt to the changing times. Early this year, for instance, it joined with Susan Stratton, a local apartment executive, to found NBS Multifamily Management, a new apartment management company.

NAI Global Named Global Broker of the Year by PERE Magazine

NAI Global, one of the largest commercial real estate service providers worldwide, has been named Global Broker of the Year by Private Equity Real Estate (PERE) magazine in the PERE Awards 2009.

"Each year, the readers of PERE magazine and PERENews.com nominate and choose the firms, individuals and deals they believe stood out from the crowd the previous year," said Zoe Hughes, Senior Editor, Real Estate. "2009 was a year in which the private real estate investing world experienced a tremendous amount of turmoil, so to be selected in this year’s awards is a tremendous accolade from our readers and a vote of confidence in what lies ahead for NAI Global."

"This award is a testament to the quality and commitment of NAI Global and its professionals around the world in serving the private equity and financial sectors," said Jeffrey M. Finn, NAI Global President & CEO. "Looking ahead, we will continue to innovate and add value with focused service offerings like our Special Asset Solutions group or the Commercial Property PowerSale™ program, to deliver exceptional results for clients around the globe."

NAI NBS Takes Home Three CAR Awards

NAI Norris, Beggs & Simpson had a strong showing at the 2010 Commercial Association of Realtors (CAR) Awards Dinner last night at the Governor Hotel. The theme of the evening was “Building a Healthier Future,” and NAI NBS' Jeff Borlaug, the 2010 CAR President, emceed. NAI NBS' winners were:

-President Clayton Hering was named Co-Humanitarian of the Year. He is active in a number of charitable organizations, including the Oregon Symphony and Business for Culture and the Arts.
-Executive Vice President Chris Johnson was named Investment Broker of the Year.
-Associate Vice President Garret Harper (also NAI NBS' Top Producer of 2009) was named Industrial Broker of the Year.

We also had several runners up: Pam Lindloff for Retail Broker of the Year, Gina Barendrick for Rookie of the Year, and Jennifer Medak and John Medak for Office Broker of the Year. An insert in today's Portland Business Journal featured all of the winners and runners up.

CAR offers education, provides government advocacy and creates opportunities for commercial real estate professionals to connect and grow their business.

NBS Companies and Stratton Launch NBS Multifamily Management

Norris, Beggs & Simpson Companies and Susan Bowlsby Stratton, a successful apartment management executive, have joined forces to found NBS Multifamily Management, a company dedicated to managing apartment communities of 100 units or more around the West Coast.

Why start a new venture in this economic climate? NBS Companies President J. Clayton Hering said he expects that as the job market grows, the demand for housing will increase, with a short supply of single-family and multifamily housing due to the significant reduction in construction over the last several years. With single-family lenders requiring greater equity and better credit, fewer people will be able to buy houses and will thus reenter the apartment market.

“With increased market activity the necessity for professional, value-added multifamily management will rise, and NBS Multifamily Management will provide a quality of service to enable multifamily owners to be competitive,” Hering said.

NBS Multifamily Management expects to hire more than 100 people in the area to run and maintain the apartment communities it will manage.

Stratton, who has more than 20 years of multifamily management experience up and down the West Coast, will serve as President of the new company. Stratton spent 13 years at Harsch Investment Properties, most recently as Senior Vice President of Operations, where she was responsible for the company’s multifamily division and managed up to 5,500 units. A native Oregonian, she will receive her Executive MBA from Pepperdine University in March.

“I am so pleased to be joining NBS,” Stratton said. “My years of experience combined with NBS’ very successful property management track record will allow us to shine in the multifamily management industry.”

Cassandra Haavisto will serve as NBS Multifamily Management’s Regional Manager for the Puget Sound area. Haavisto’s industry experience spans 20 years; she has managed more than 13,000 units during her career and worked for major companies like Harsch Investment Properties and Trammell Crow.