Who’s funding the Pearl District’s newest office building?
July 17, 2014
A top union pension fund investment firm has emerged as the key financier for a much-talked about Portland office building projects.
Pearl West, the first speculative office building in Portland’s city center since 2009, received $41.74 million in permanent construction financing from Washington Capital Advisors.
The proposal for Pearl West was announced in January. Construction is set to start on Friday on the building, which is 230,000 square feet and includes 154,000 square feet of rentable space. The Class A office building, which features 10,000 square feet of ground floor retail space, is slated to complete by early 2016.
Parties involved in the deal told Real Estate Inc. they were prohibited from disclosing the purchase price. The terms of the loan required it to be less than 75 percent of costs.
NBS Financial Services President Ken Griggs and Finance Officer Paddy Ryanrepresented the lender, Washington Capital Advisors, a pension fund advisor for labor unions. Walter Bowen of BPM Real Estate Group is the developer, and BDC/NW Irving is the borrower.
Griggs said Washington Capital Advisors recognized Pearl West as “a secure investment that will protect and grow union pensions.” The project also promises to create plenty of union jobs, he noted.
Over the past 12 months, Portland’s healthy economy has attracted many industries, especially creative businesses which are projected to bulk up the majority of the local job market over the next decade. Accommodating this surge in growth was limited by little to no new construction in the Central Business District.
Thus traditional office buildings have been forced to incentivize their space to remain competitive and deter tenants’ flight to the suburbs. Central city office vacancy has only tightened with NAI Norris, Beggs & Simpson reporting a robust 8.15 percent for the Pearl District during the second quarter.
The Class A office building, featuring ground floor retail and cutting-edge amenities, is slated to complete by early 2016. The half-block building corners Northwest Irving Street and 14th Avenue, which is reserved for pedestrian-only traffic and serves as an arterial vein into the heart of the Pearl District.
Pearl West has already secured two lead tenants. Its groundbreaking takes place tomorrow.