Shorenstein Properties’ Portland Strategy

River Forum. Image courtesy of CBRE

Shorenstein Properties has sold River Forum, a two-building office campus in Portland to Clarity Real Estate. The purchase price was $57.5 million, according to Multnomah County public records. Combined, the two buildings at 4380 & 4386 SW Macadam Ave. comprise 209,000 square feet of Class A office space, spread across 10,000- to 29,000-square-foot floorplates.

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Shorenstein purchased the River Forum as part of a larger portfolio acquisition in 2007 and then conducted a capital improvement plan to improve the property. The renovations included the addition of secure-entry parking, outdoor patios, river access, a fitness center and a large lobby. The property also has a conference center that can fit up to 25 guests and is equipped with a kitchen.

The major renovations have attracted a healthy tenant roster list, as River Forum is currently 90 percent leased. While most of the tenants are taking up smaller floorplates, two notable tenants include Harris myCFO, the wealth management division of BMO Harris Bank, and home-building company D.R. Horton, according to sources familiar with the deal.

The River Forum campus is located near the Portland Streetcar, MAX Orange Line, OHSU Aerial Tram and Tilikum Crossing Bridge. It was one of the few properties Shorenstein maintained in Oregon, but the company’s portfolio still includes Lincoln Center, a 723,000-square-foot office building in Portland, as well as Nimbus Corporate Center, a 692,000-square-foot asset in Beaverton, Ore. Outside Oregon, Shorenstein is also working on a similar value-add strategy with 1407 Broadway in New York City that has just received a $350 million loan.

While CBRE’s Charles Safley, Paige Morgan and Trevor Kafoury represented Shorenstein, Clarity did not have broker representation, according to sources.

The power of Portland

Dave Seeley, a principal at Clarity, said Portland is one of the top growing markets for Clarity and the River Forum represents an irreplaceable waterfront property, in an area with a strong demand for office space.

According to Cushman & Wakefield’s third quarter report on Portland’s office market, the metro is getting a lot of attention from developers and tech companies. Currently, Portland has approximately 1 million square feet of development under construction—up from last year’s 679,000 square feet during the same quarter—and can expect more by the end of 2020. The metro’s vacancy rate also dropped to 10.2 percent, down from 2018’s third quarter of 11.4 percent, with tech companies like Google leasing 80,000 square feet in Portland’s Meier & Frank Building.