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Posts Tagged ‘NNN’

HealthDex (hospital/provider|managed care|equipment)

Central Business District

Wellness Annex – Water Tower | 5331 SW Macadam Ave | 1,052 RSF

Vancouver

Adventist Medical Center – Fishers Landing Med/Dent Bldg | 417 SE 164th | 10,500 RSF

Manual Medicine & Rehab Ctr – Mill Plain Plaza | 5000 E Fourth Plain | 2,785 RSF

Westside

CrossFit Recon – Sunset Highway Biz Ctr | 23650 NW Clara Lane | 2,823 RSF

NW Scrubs Inc – Beaverton Creek | 3003 SW 153rd Dr | 2,053 RSF

Central Business District

The Portland Clinic – Marquam Building | 2501 SW First Ave | 4,649 RSF

GeneralBizDex (consulting|finance|insurance|legal|other)

Eastside

General Steamship – 1500 Plaza | 1500 NE Irving St | 2.030 RSF renewal

STX Pan Ocean – 1500 Plaza | 1500 NE Irving St | 1,429 RSF

Caroline Cantrell – 1500 Plaza | 1500 NE Irving St | 2,145 RSF renewal

Central Business District

Union Bank of Cal Global Custody – Union Bank of Cal Bldg | 707 SW Washington | 28,445 RSF renewal

Westside

Ameriprise – 9665 SW Allen Blvd | 2,200 RSF

Probity Builders – 4800 SW Griffith | 2,604 RSF sublease

Liberty Mutual Insurance – Amberglen | 1925 NW Amberglen Pkwy | 12,295 RSF

TechDex (apps|provider|hardware|var)

Vancouver

NXP Semiconductor – Park Tower Biz Ctr | 201 NE Park Plaza Dr | 1,240 RSF renewal

Central Business District

CrossCurrent – Water Tower | 5331 SW Macadam Ave | 3,605 RSF renewal

SustainDex (environmental|sustainable|clean/bio tech)

Central Business District

First Wind Energy – Public Service Building |920 SW Sixth St | 2,137 RSF

SALE

Property: 6140 SW Macadam Ave, Portland, Oregon 97239

Buyer: G&B Macadam

Seller: Sunset Fuel

Type: Industrial Site

Price: $2.5 Million

Size: 22,406 RSF

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GeneralBizDex (consulting|finance|insurance|legal|other)

Westside

Northwest Bank – Kruse Way | 4900 Meadows Rd | 8,560 RSF renewal

Hayden Properties – Kruse Woods II | 5335 Meadows Rd | 3,564 RSF

Vergepointe LLC – Kruse Woods I | 5285 Meadows Rd | 5,546 RSF renewal

Kforce – 1 Lincoln | 10300 SW Greenburg Rd | 3,244 RSF renewal

Thorsen Pacific – 1 Lincoln | 10300 SW Greenburg Rd | 1,873 RSF

Northwest Mortgage Group – 16100 NW Cornell Rd | 3,643 RSF renewal

Vancouver

Wells Fargo Bank – Vancouver Center N | 700 Washington | 6,886 RSF renewal

Cornerstone Lending – Park Tower Biz Ctr | 201 NE Park Plaza Dr | 2,826 RSF renewal

Central Business District

TicketMaster – Crown Plaza | 1500 SW First Ave | 2,571 RSF

NonProfDex (charitable|education|trade assoc)

Central Business District

Jewish Family and Child Services – Yamhill Plaza | 1221 SW Yamhill St | 4,088 RSF

HealthDex (hospital/provider|managed care|equipment)

Westside

DaCosta Dental – Hall & Nimbus Center | 8400 SW Nimbus | 2,112 RSF

Medius Medical Concepts – Summit Bldg | 1260 NW Water House Ave | 2,133 RSF

Eastside

Hospice Care of NW – 1500 NE Irving St | 5,510 RSF

SustainDex (environmental|sustainable|clean/bio tech)

Westside

LiveLight Energy – Twin Oaks Technology Center | 1815 NW 169th | 6,248 RSF

TechDex (apps|provider|hardware|var)

Westside

nvoice pay – 4 Lincoln | 10250 SW Greenburg Rd | 2,744 RSF

Payer Connections – Kruse Woods II | 5335 Meadows Rd | 1,106 RSF

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DesignDex (A/E|apparel|graphic d)

Central Business District

Glumac – Standard Insurance Center | 900 SW Fifth Ave | 15,500 SF

Vancouver

Maul Foster Alongi – Al Angelo Bldg | 400 E. Mill Plain | 5,500 SF

GeneralBizDex (consulting|finance|insurance|legal|other)

Westside

Caldera International – PacTrust Biz Ctr | 7245 SW Durham Rd | 5,029 SF

Resource Financial Planning – Fairway Center | 9115 SW Oleson Rd | 2,492 SF renewal

Berkeley Law – Tanasbourne Commons | 18933 NW Evergreen Pkwy | 3,768 SF renewal

Central Business District

DYK Inc – Broadway Plaza | 2121 SW Broadway | 1,665 SF

Vancouver

Logistics Services NW – The Fisher Bldg | 16701 SE McGillivray Blvd | 1,734 SF

HealthDex (hospital/provider|managed care|equipment)

Westside

Metis Clinics – Fir Loop Plaza | 7110 SW Fir Loop | 1,098 SF

Eastside

Legacy Health – Broadway Commons | 1620 NE Broadway | 6,977 SF

SALE

Seller: Income Properties NW

Buyer: ISITE Design

Property: Former LA Fitness Building | 2025 NW Overton Stree, Portland, OR 97209

Price: $2,000,000.00

Size: 18,266 SF

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GeneralBizDex (consulting|finance|insurance|legal|other)

Vancouver

Fiji Sales & Marketing – Quad 205 |  10906-11012 NE 39th St | 1,875 SF renewal

Lee & Hayes PLLC – Main Place | 1111 Main Place | 2,439 SF

Vancouver Defenders – 500 W Eighth St | 4,944 SF

Washington Federal Savings Bank – Columbia Square II | 13411 SE Mill Plain Blvd | 1,500 SF

Eastside

NW Property Wholesalers – 16834 NE Mason Court | 4,000 SF

TechDex (apps|provider|hardware|var)

Westside

Applied Technical Services – 7015 SW McEwan Rd | 5,750 SF

Central Business District

Deck Monitoring – Pang Building | 830 SW 10th Ave | 5,696 SF sublease

Vancouver

Intelligent Technologies – Quad 205 | 10906-11012 NE 39th St | 4,425 SF renewal

DirecTV – Pacific Industrial Commons | 14511 NE 13th Ave | 20,130 SF

Renaissance Learning – Greenwood Office Bldg | 7710 NE Greenwood Ave | 688 SF sublease

Eastside

Sprint – Halsey Corners | 1762 N 181st Ave | 1,700 SF

HealthDex (hospital/provider|managed care|equipment)

Westside

Restore Vision Centers – 17400 SW Upper Boones Ferry Rd | 2,363 SF

NonProfDex (charitable|education|trade assoc)

Westside

Oregon Manufacturing Extension Partnership – Pacific Pkwy Ctr | 12909 SW 68th Pkwy | 1,941 SF

SALE

Location: 12360 E Burnside Street, Portland, Oregon

Seller: Fidelity National Title Insurance Co.

Buyer: Watumull Properties

Size: 16,120 RSF

Price: $1.35 Million ($83.75/SF)

Tenant in Place: NARA (Native American Rehabilitation Association) NW

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DEMYSTIFYING OPERATING EXPENSE PASSTHROUGHS

Office tenant clients frequently ask us what are operating expenses? Admittedly, this is one of the more confusing aspects of a commercial lease and if a tenant is not careful, it can be a costly item. The best way to explain operating expense passthroughs is to provide an example. But first, it is important to know a few key terms:

Full Service Rent vs NNN Rent – Full Service includes normal office utilities, janitorial service, building maintenance and management as well as property taxes while NNN invoices tenants separately for utilities, taxes/insurance and operating expenses.

Rentable Square Feet vs. Useable Square Feet – Rentable Square Feet (RSF) is the square footage that a tenant pays rent on while Useable Square Feet (USF) is the actual size a tenant is using. The difference is that RSF includes a portion of the common areas used by all tenants tacked on to the USF. Otherwise, lobbies and corridors would be used and maintained but lose money for the owner. This additional percentage is called a “load factor” and ranges between 10% and 18% typically. (Ex: 10,000 USF x 15% load factor = 11,500 RSF)

Operating Expenses and Passthroughs – Operating expenses are necessary to run a building including electricity, water and sewer, trash, exterior building maintenance, gas, landscaping, window cleaning, janitorial services, security, property taxes and property management. Passthroughs represent increases above the operating expenses incurred during the Base Year of a Full Service Lease.

Base Year – Can either be the first 12 months of a lease term or calculated on a calendar year. The calendar year method is most common. If a lease commences in the 4th quarter, the Base Year is usually set for the next full year. (Ex: Lease commences 11/1/11, Base Year will be 2012. Lease commences 4/1/11, Base Year will be 2011) 

Okay, so now that you are more thoroughly confused, let’s break all of this information down into an example that will make it easier to understand the calculation of passthroughs.

  • The beautiful Jones Tower (because Smith Center is still under construction) is a Class A office highrise with 491,528 RSF.  
  • ImDabomb Company occupies 10,000 RSF in Jones Tower with a lease that commenced March 1, 2009 and is paying $20.00/RSF Full Service.
  • They have a Base Year of 2009.
  • In 2009, operating expenses were $10.04/RSF.  This is the Base for ImDabomb Co.
  • Jones Tower has 2010 Operating Expenses  of $10.34/RSF.
  • Jones Tower has 2011 Estimated Operating Expenses of $10.73/RSF.

During 2010, ImDabomb would have paid its rent plus the difference between the 2010 budget and the 2009 Base ($10.34 – $10.04 = $0.30).  This amount is then multiplied by the total RSF under lease by ImDabomb and divided up over 12 months ($0.30 x 10,000 RSF = $3,000.00/12 = $250.00 per month additional cost).

During 2011, ImDabomb would have paid its rent plus the difference between the 2011 budget and the 2009 Base ($10.73 – $10.04 = $0.69).  This amount is then multiplied by the total RSF under lease by ImDabomb and divided up over 12 months ($0.69 x 10,000 RSF = $6,900.00/12 = $575.00 per month additional cost).

Every year, the new expenses are calculated against that Base Year figure, so the numbers can really add up  particularly for larger tenants.  If, however, the operating expenses come in below the estimates for the newest year, the tenant will be issued a credit. 

It is important to “reset” your Base Year in the event of a lease renewal or extension. Otherwise, a tenant will continue to see increasing passthrough costs as the gap over the Base Year figure grows.  Much of the increase in expenses is due to things such as city tax changes, expiration of tax credits, building improvements not considered capital costs such as paving a parking lot or painting the exterior, and increases in utility charges.

For a more detailed report on Operating Expenses, please email me at kristin.hammond(at)pacific-re(dot)com.

Next topic: Office lease insurance clauses

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A year ago, Plas2Fuel (now officially Agilyx) officially began searching for a headquarters facility. The building needed to accommodate for R&D, administrative offices and a showroom warehouse that investors and buyers of the technology could visit and see first hand the process Agilyx developed to convert plastic to crude oil.  A few priority considerations included  a well ventilated warehouse to deal with the heat involved in the process as well as relatively easy highway access for incoming visitors to travel on to and from the airport.

A comprehensive search began with Agilyx looking at facilities in both Oregon and  southwest Washington. Identifying a facility that could provide modest office space and serious manufacturing floor (including heavy power, non-water based sprinklers and a crane) was particularly challenging.  Budget was another key consideration, as this young company was just starting to gain traction. Fortunately, market timing was in their favor as 2009 saw big drops in rent.

 Ultimately, we found the perfect solution at Wall Street Industrial Park (named after the small road it sits adjacent to) in Tigard, Oregon.  Agilyx leased 22,307 SF of space at 7904 SW Hunziker Street, of which roughly 3,000 SF is custom built office space on two floors.

The facility has front and back roll-up doors for loading and a turnaround for articulated trucks to pick up and transport the crude oil collected into the roughly 12,500 gallon exterior tank. There is also fenced yard area for storage and truck loading.  The office space contains a training room, break room, conference room, kitchen, showers, multiple private offices and an open work space.

conference room overlooking factory flooradministrative offices

overhead crane

overhead crane

 

administrative offices

administrative offices

multi tank system

multi tank system

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The General Automotive Building (411 NW Park) premiered it’s brand new look on August 6th, including two floors added to the top of the building. The developers, ConoverBond Development, focus on urban redevelopment projects including historic building renovations. This is a fairly new venture for them in the Portland market.

Lobby Entrance

Lobby Entrance

The building is located on the North Park Blocks (right across from Park Kitchen) and has some exceedingly nice views from the top. It is a total of 40,000 SF, divisible down to 2,500 SF and is pursuing LEED Platinum certification. Renovations included: adding a passenger elevator and new stairwell, seismic upgrades, and reuse of materials (over 50% of the existing buildings walls, floors and roof have been maintained). The building is designed to use approximately 26% less energy than comparable buildings in size.  Renewable, clean power or “green tags” have been purchased for at least 35% of the core building’s annual electrical load.

The building will offer access to a Zipcar as well as bicycle storage in the building for commuters opting to leave the car at home.  Of course, the location is nice, close to countless shops and restaurants (which seem to change on a regular basis). Mostly I was impressed with the large windows and healthy amounts of natural light available on each floor.

The current asking rates are between $23.00-$25.00 per SF,  NNN. Apparently there is also an opportunity for a larger tenant to secure naming rights to the building.

SW view from top floor

SW view from top floor

Third floor

Third floor

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THE PEARL DISTRICT

The latest round of economic losers (not to be interpreted as groups not worthy but rather unfortunate victims) in the Portland area includes Brookfield Renewable Power. Brookfield subleased a space in the historic DeSoto Building (720 NW Davis) on the edge of the Pearl District back in October of 2008.  Their very slick  6,400 SF space is now on the market for sublease with a 5 or 7 year term option. Furniture and equipment are included in the asking rent of $24.00 per square foot all in. This is a nice space (LRS Architects own the condo) with rooftop deck access, showers, and quick access to the Park Blocks.

CLOSE IN NORTHWEST (23RD & GLISAN)

If you drive up 23rd Avenue much, I’m sure you have noticed the new construction taking place on the corner across from Pizzacato (the former bridal shop spot). Details have finally emerged on this property which has taken on the look of a more mid-century modern design. It has just over 3,000 SF of office space on the 2nd floor, but can be divided down to smaller sizes. It will be ready this month and is asking $22.00/SF NNN.

source:mbm properties

source:mbm properties

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Okay, so when people ask me what I do and I say “commercial real estate”, they typically respond with “ohhh” and then move on to someone else’s professional pursuits.  Admittedly, the daily processes involved with pulling together a good commercial real estate package can be mundane at times. But at its core, the industry is all about sharing information.  This is where the business becomes intriguing and fun; knowing what businesses are coming and going, contracting and growing, and how much it cost. On top of this, you get an unbelievable education on the types of niche’ businesses in the market (see our Piece of the PDX Pie monthly feature at the bottom).

Fascinating like the study of blackholes or earthworm reproduction, well no, but being behind the scenes of what makes Portland’s business environment tick is definitely cool. So, with this said, my partner and I thought we would share a little of the “behind the scenes” activity with readers.

For ease of use, we have created a few test indices (by industry) of various transactions in the Portland market.  We can add industries and welcome suggestions for other information/statistics you would find helpful or interesting.  Our intention is to update this information as it occurs, with this initial post reflecting transactions dating back to the beginning of the Third Quarter 2008 (July 1, 2008).

We have also included some market comps so that you can see where deals are being struck in the various submarkets of Portland/Vancouver.

Comps Around Town

 

Submarket

Size

Term

Rate

Free Rent

New/Renew

Bldg Type

 

Beaverton

6500

5 yrs

$17.00

none

New

Class B

 

CBD

3800

5 yrs

$24.00

2 mths

Renew

Class C-H

 

CBD

3600

3 yrs

$21.00

2 mths

New

Class B

 

Eastside

4100

5 yrs

$19.00

none

New

Class C

 

Vancouver

9500

10 yrs

$24.00

6 mths

New

Class A

 

 

TechDex (apps|hardware|provider|var)

Central Business District

 

TripWire – One Main Place | 101 SW Main St. | 33,062 SF

Iterasi – Pioneer Arts Building | 715 SW Morrison St. | 4,141 SF

CompanionLink – One Main Place | 101 SW Main St. | 3,000 SF

Infinity Internet – Portland Medical Cntr | 511 SW 10th Ave. | 10,000 SF

Westside

 

Pixelworks

– Durham Plaza | 16650 SW Boones Ferry | 4,875 SF

Corrigo – Tualatin Commons | 8215 SW Tualatin Sherwood Rd. | 8,178 SF

Lunarr – 5 Lincoln | 10200 SW Greenburg Rd. | 2,660 SF

Prince Telecom – 14215 NW Science Park | 3,525 SF

Linden Technologies – Cornell West | 1500 NW Bethany Blvd. | 1,569 SF

Trivium Systems – Twin Oaks Exec. Cntr | 1865 NW 173rd Plc. | 1,288 SF

Healthco Information Systems – 7657 SW Mohawk St. | 9,119 SF

SQLSoft Inc. – Cornell West | 1500 NW Bethany Blvd. | 5,235 SF

Veicon Technology – WCI Building | 19720 NW Tanasbourne Dr. | 2,325 SF

Retail Dimensions – 4800 SW Griffith Dr. | 1,680 SF

Cypress Semiconductor – Creekside Corp Park | 9125 SW Gemini Ave. | 4,300 SF

Comsys – 3 Lincoln | 10220 SW Greenburg Rd. | 9,156 SF

 

MediaDex (traditional|digital|research)

Central Business District

 

Harris Interactive – Riviera Plaza | 1618 SW First Ave. | 2,727 SF

RumbleFish – OMCC | 107 SE Washington St. | forthcoming

Downstream Digital – Fremont Place | 1650 NW Front Ave. | 16,521 SF

Pyramid Communications – 526 NW 13th Ave. | 3,630 SF

Audient Consulting – OMCC | 107 SE Washington St. | 2,696 SF

Yellowpages.com – One Main Place | 101 SW Main St. | 6,956 SF

Liquid Agency – Triangle Building | 1800 NW 16th Ave. | 2,971 SF

Lakonic Partners Inc. – Mikado Building | 117 SW Taylor St. | 3,610 SF

Westside

 

Rubicon Interactive – Pacific Corp Center | 15350 SW Sequoia Pkwy. | 2,709 SF

MKTX Inc – Creekside Corporate Center | 8205 SW Creekside Plc. | 2,210 SF

MSN Communications – Kruse Woods II | 5335 Meadows Rd. | 2,515 SF

Database Marketing – Cascade Plaza West | 12665 SW Center St. | 6,833 SF

Angelvision – Hilltop Business Cntr | 7300 SW Hunziker Rd. | 5,264 SF

ReachLocal Inc. – 1 Lincoln | 10300 SW Greenburg Rd. | 4,374 SF

Eastside

 

Seamless Event Solutions – 12838 NE Airport Way | 5,760 SF

 

DesignDex (A/E|graphic d)

Central Business District

 

Hiromi Ogawa Architects

– OMCC | 107 SE Washington St. | 1,200 SF

Dull Olson Weekes – Federal Reserve Building | 915 SW Stark St. | 13,624 SF

Robertson Architecture Inc. – 1512 SW 18th Ave. | 2,300 SF

Walker Macy – Failing Building | 111 SW Oak St. | 11,107 SF

Westside

 

PNG Environmental – Hampton Oaks | 6655 SW Hampton St. | 1,960 SF

Geoengineers – Pacific Corp Center | 15055 SW Sequoia Pkwy. | 8,638 SF

Heery International – Sunset Business Park | 9600 SW Barnes Rd. | 4,143 SF

West Yost Associates – Lakeside Center | 8100 SW Nyberg Rd. | 5,315 SF

Smith Monroe Gray – Cascade Square | 8628 SW Cascade Ave. | 8,052 SF

Eastside

 

Locating Inc. – Airport Business Center | 6601 NE 78th Ct. | 4,121 SF

 

SustainDex (Environmental|Sustainable|Clean/Bio Tech)

Central Business District

 

Ecology and Environment Inc. – Oregon Trail Bldg | 333 SW Fifth Ave. | 7,806 SF

Conservation Services Group – Market Square | 1515 SW Fifth Ave. | 3,782 SF

Brookfield Power – Desoto Building | 720 NW Davis St. | 6,403 SF

Vestas – 2000 SW First | 2000 SW First Ave. | 12,103 SF

rePower USA Corp – One Main Place | 101 SW Main St. | 1,557 SF

Garrad Hassan America Inc – Oregon Trail Bldg | 333 SW Fifth Ave. | 1,855 SF

Westside

 

Particle Measuring Systems Inc.

– 1100 NW Compton Dr. | 1,518 SF

 

PIECE OF THE PDX PIE! – October 2008

Plas2Fuel – A privately-held alternative energy company who converts mixed

waste plastics into synthetic crude oil and other valuable petrochemical

products. Finally you can take all of those old baby toys and use them to fuel

your Escalade!

 Authors/Experts

Kristin Hammond and Mark McFarland have over 30 years of combined experience representing tenants with commercial real estate requirements. At Pacific Real Estate Partners (PREP), we help businesses assess and respond to their real estate priorities in a consistent, efficient, and cost effective manner. For more background, click on the Authors tab at the top of the page.

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