russell fellows historic office portfolio · 2019-11-25 · square feet. 75%. leased . 5. parcels ....
TRANSCRIPT
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cushmanwakefield.com
Russell Fellows
H I ST O R I C O F F I C E P O RT FO L I OVALUE-ADD OFFERING LOCATED IN AN OPPORTUNITY ZONE
PORTLAND, ORE. CENTRAL BUSINESS DISTRICT
GARY [email protected]
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6 | Cushman & Wakefield
EXECUTIVE SUMMARY
38,131SQUARE FEET
75%LEASED
5PARCELS
5BUILDINGS
Cushman & Wakefield, as exclusive advisor, is pleased to present the opportunity to acquire 100% fee simple interest in the 5-building Russell Fellows portfolio of historic office buildings.
The portfolio totals 38,131 square feet of office properties, which are 75% leased* to a diverse group of tenants including Verizon and the Western Rivers Conservancy. The 5 buildings are contiguous to each other and located in the highly coveted Central Business District adjacent to Portland’s renowned MAX Light Rail line.
Two of the buildings, the Fechheimer at 233 SW Naito Pkwy and the adjoining Hallock McMillan at 237 SW Naito Pkwy are gems of Portland’s Cast-iron era. Both building facades have been painstakingly restored to their original Italianate design and are on the National Registry of Historic Places.
*Includes a new 7,885 SF lease for the entire 240 SW First Avenue Building that is out for signature with a national tenant.
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Cushman & Wakefield | 7
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8 | Cushman & Wakefield
EXECUTIVE SUMMARY
Willamette River
N SKIDMORE ST
N RUSSELL ST
NE BROADWAY ST
NW NORTHRUP ST
NW LOVEJOY ST
NW EVERETT ST
W BURNSIDE ST
NW THURMAN ST
NW FRONT AVE
NW NAITO PKWY
NW GLISAN ST
BROADWAY BRG
N GREELEY AVE
INTE
RSTA
TE A
VE
SW WASHINGTON ST
SW TAYLOR ST
SW JEFFERSON ST
NW 2
3RD
AVE
NW 2
1ST
AVE
NW 1
9TH
AVE
NE FREMONT AVE
SE MORRISON ST
NW 1
1TH
AVE
MAR
TIN
LUTH
ER K
ING
JR B
LVD
GRAN
D AV
E
NW YEON AVE
405
405
5
5
5
30
26
84
SW OAK ST
SW FI
RST S
T
SW N
AITO
PKW
Y
PEARL DISTRICT
SOUTHWEST
NORTHWEST
MAX LIGHT RAIL LINE
MAX LIGHT RAIL LINE
MA
X L
IGH
T R
AIL
LIN
E
CLOSE-IN EASTSIDE
LLOYD DISTRICT
OLD TOWN
PORTLAND CENTRAL BUSINESS DISTRICT
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12 | Cushman & Wakefield
INVESTMENT HIGHLIGHTS
The historic portfolio is located in downtown Portland’s Qualified Opportunity Zone. Significant capital can be invested post-closing to take advantage of the tax benefits associated with the OZ designation. As indicated on page 46 table of comparable Portland urban land sales, the average price paid for similar land over the past 3 years averaged $346.96 per square foot. With a total of 12,500 square feet of land, that equates to a total value of $4,337,000 for the subject land, which could be deducted from the overall sales price to determine the Capex investment requirement outlined in Opportunity Zone regulations.
The Russell Fellows portfolio of properties is currently 75% leased to a diverse roster of tenants. The average annual office rent currently stands at $22.11 per square foot on a modified gross basis. This rate is at least 20% below comparable rents which average above $25.00 per square foot on a NNN basis. With an average remaining lease term of less than 24-months, a new owner can quickly mark leases to market.
Additionally, the 5,000 square foot 237 SW Naito building (13.1% of portfolio) is currently vacant. The exterior has been recently renovated, including the historic Cast-Iron facade; the building interior is a raw shell. Once the interior is totally renovated and built-out, we estimate rent should be at least $30.00 per square foot NNN due to its superior corner location on SW Naito Parkway across from Waterfront Park and the Willamette River.
The historic portfolio is ideally located in Portland’s CBD, within the Tech Triangle, home to a high and growing concentration of technology companies. The portfolio’s location adjacent to the MAX light rail line and across from Waterfront Park and the Willamette River result in near perfect transportation scores, easily reached by car, foot, bike and public transportation. In addition, the highly traveled Morrison Bridge converges in the CBD near the historic portfolio affording easy access to Portland’s dynamic close-in Eastside.
OPPORTUNITY ZONE LOCATION
SIGNIFICANT UPSIDE POTENTIAL: NEAR TERM MARK-TO-MARKET
STRATEGIC LOCATION
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Cushman & Wakefield | 13
Walk Score: 97Walker’s Paradise
Bike Score: 99Biker’s Paradise
Transit Score: 95Rider’s Paradise
PACWEST
PIONEERSQUARE
MEIER &FRANK
FOX TOWER
RITZ CARLTON HOTEL (UNDER CONSTRUCTION)
PARK AVEWEST
PROVIDENCEPARK
BLOCK 300
INDIGO
BREWERY BLOCKS
US BANCORPTOWER
EMBASSYSUITES
PEARLWEST
PORTER HOTEL
SITE
GROVE HOTEL
Morrison Bridge to I-5 and Central Eastside
to I-5 South
Naito Parkway
Tom McCall Waterfront Park
Portland Central Business District
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18 | Cushman & Wakefield
PORTFOLIO OVERVIEWPortfolio Overview The Russell Fellows Properties portfolio consists of five historic adjacent office buildings, ideally located on SW Naito Parkway and directly on Portland’s MAX light rail line. The five properties have recently undergone or are undergoing significant upgrades to cutting edge creative office space. The existence of some vacancy and below market rents creates an excellent value-add investment opportunity for a savvy investor.
38,131TOTAL NRA
12,500TOTAL LAND
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22 | Cushman & Wakefield
240 SW FIRST240 SW First Portland, OR 97204
LAND AREA 2,500 SQUARE FEET
ASSESSOR’SPARCEL NUMBER
R246005
ZONINGCXD, CENTRAL
COMMERCIAL
YEAR BUILT MID 1990’S REPLICATION
NUMBER OF STORIES
1, PLUS A MEZZANINE
AND BASEMENT
NET RENTABLE AREA
7,885 SQUARE FEET
STRUCTURE
STEEL AND REINFORCED
MASONRY WITH
COMPLETE SEISMIC
UPGRADE
EXTERIOR WALLS
BRICK AND GLASS
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24 | Cushman & Wakefield
79 SW OAK79 SW Oak Portland, OR 97204
LAND AREA 2,500 SQUARE FEET
ASSESSOR’S PARCEL NUMBER
R246006
ZONINGCXD CENTRAL
COMMERCIAL
YEAR BUILT MID 1990’S REPLICATION
NUMBER OF STORIES
1, PLUS MEZZANINE
NET RENTABLE AREA
4,872 SQUARE FEET
STRUCTURESTEEL AND MASONRY
WITH COMPLETE SEISMIC
UPGRADE
EXTERIOR WALLS
BRICK AND GLASS
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26 | Cushman & Wakefield
71 SW OAK71 SW Oak Portland, OR 97204
LAND AREA 2,500 SQUARE FEET
ASSESSOR’SPARCEL NUMBER
R246007
ZONINGCXD, CENTRAL
COMMERCIAL
YEAR BUILT 1859
NUMBER OF STORIES
3
NET RENTABLE AREA
9,185 SQUARE FEET
STRUCTURESTEEL AND MASONRY
WITH PARTIAL SEISMIC
UPGRADE
EXTERIOR WALLS
BRICK AND GLASS
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28 | Cushman & Wakefield
233 SW NAITO PKWY233 SW Naito Pkwy. Portland, OR 97204
LAND AREA 2,500 SQUARE FEET
ASSESSOR’SPARCEL NUMBER
R246003
ZONINGCXD, CENTRAL
COMMERCIAL
YEAR BUILT 1885
NUMBER OF STORIES
2, PLUS BASEMENT
NET RENTABLE AREA
11,189 SQUARE FEET
STRUCTURESTEEL AND MASONRY
WITH PARTIAL SEISMIC
UPGRADE
EXTERIOR WALLS
CAST IRON, STONE AND
GLASS
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Cushman & Wakefield | 30
237 SW NAITO PKWY237 Naito Pkwy Portland, OR 97204
LAND AREA 2,500 SQUARE FEET
ASSESSOR’SPARCEL NUMBER
R264004
ZONINGCXD, CENTRAL
COMMERCIAL
YEAR BUILT 1857
NUMBER OF STORIES
2
NET RENTABLE AREA
5,000 SQUARE FEET
STRUCTUREMASONRY REINFORCED
CONCRETE AND BRICK
EXTERIOR WALLS
CAST IRON, STONE
INTERIORWALLS
COMPLETE RENOVATION
AND BUILD-OUT YET TO
BE COMPLETED
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Cushman & Wakefield | 62
CONFIDENTIALITY & CONDITIONSThe information contained in this Offering Memorandum is confidential, furnished solely for the purpose of review by a prospective purchaser of Russell Fellows Historic Portfolio, Portland, Oregon (the “Property”) and is not to be used for any other purpose or made available to any other person without the expressed written consent of Cushman & Wakefield, Inc. (“Cushman & Wakefield”) or Owner. The material is based in part upon information supplied by Owner and in part upon information obtained by Cushman & Wakefield from sources it deems reasonably reliable. Summaries of any documents are not intended to be comprehensive or all inclusive but rather only an outline of some of the provisions contained therein. No warranty or representation, expressed or implied, is made by Owner, Cushman & Wakefield, or any of their respective affiliates, as to the accuracy or completeness of the information contained herein or any other written or oral communication transmitted to a prospective purchaser in the course of its evaluation of the Property. No legal liability is assumed or to be applied in connection with the information or such other communications. Without limiting the generality of the foregoing, the information shall not be deemed a representation of the state of affairs of the Property or constitute an indication that there has been no change in the business or affairs of the Property since the date of preparation of the information. Prospective purchasers should make their own projections and conclusions without reliance upon the materials contained herein and conduct their own independent due diligence, including engineering and environmental inspections, to determine the condition of the Property and the existence of any potentially hazardous material located at the site.
This Offering Memorandum was prepared by Cushman & Wakefield and has been reviewed by Owner. It contains select information pertaining to the Property and does not purport to be all inclusive or to contain all of the information which a prospective purchaser may desire. All financial projections are provided for general reference purposes only and are based on assumptions relating to the general economy, competition and other factors beyond control and, therefore, are subject to material change or variation. An opportunity to inspect the Property will be made available to qualified prospective purchasers.
In this Offering Memorandum, certain documents and other materials are described in summary form. The summaries do not purport to be complete nor, necessarily, accurate descriptions of the full agreements involved, nor do they constitute a legal analysis of such documents. Interested parties are expected to independently review all documents.
This Offering Memorandum is subject to prior placement, errors, omissions, changes or withdrawal without notice and does not constitute a recommendation, endorsement or advice as to the value of the Property by Cushman & Wakefield or the Owner. Each prospective purchaser is to rely upon its own investigation, evaluation and judgment as to the advisability of purchasing the Property described herein.
Owner and Cushman & Wakefield expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the Property and/or to terminate discussions with any party at any time with or without notice. Owner shall have no legal commitment or obligation to any interested party reviewing this Offering Memorandum or making an offer to purchase the Property unless a written agreement for the purchase of the Property has been fully executed and delivered by the Owner and such party and any conditions to Owner’s obligations thereunder have been satisfied or waived and then only to the extent expressly provided for therein. Cushman & Wakefield is not authorized to make any representations or agreements on behalf of Owner.
This Offering Memorandum is the property of Cushman & Wakefield and may be used only by parties approved by Cushman & Wakefield and Owner. The Property is privately offered and, by accepting delivery of this Offering Memorandum, the party in possession hereof agrees (i) to return it to Cushman & Wakefield immediately upon request of Cushman & Wakefield or Owner and (ii) that this Offering Memorandum and its contents are of a confidential nature and will be held and treated in the strictest confidence. No portion of this Offering Memorandum may be copied or otherwise reproduced or disclosed to anyone without the prior written authorization of Cushman & Wakefield and Owner.
CAPITAL MARKETS
For More Information Please Contact:
JIM LEWISLic. #200412086ph | [email protected]
TOM USHERLic. #780301841ph | [email protected]
GARY GRIFFLic. #970200340ph | [email protected]
LEASING