Jeff Pickhardt and the others behind one of Portland’s most-prominent new apartment buildings hadn’t been looking to sell the Yard, the 21-story tower that’s risen up at the east end of the Burnside Bridge.
But when one of the largest residential residential developers in Thailand came knocking with what was apparently an offer too good to refuse, Pickhardt couldn’t resist.
“We were looking at it as a long-term hold,” said Pickhardt, president of Hood River’s Key Development, which spearheaded the development of Yard. “It turned out to be the right fit for the folks who wanted to buy it, and it was just a good opportunity to sell.”
Financial details of the sale were not disclosed. The buyer is an entity called Land and Houses, a subsidiary of the Bangkok-based investment firm Land and Houses Public Company Limited of Thailand. According to a release about the deal, Land and Houses is the largest residential developer in Thailand based on market capitalization.
“With the Yard acquisition, Land and Houses is confident in a long-term prospect of the city of Portland and in a strong economic fundamental of the Pacific Northwest driven by persistent growth of its many industries,” said Sith Chaisurote, president of Land and Houses.
This is the firm’s first acquisition in Portland.
Elizabeth Davis, a director at Institutional Property Advisors, and the firm ARA represented Yard’s owners in the deal.
“Obviously the timing couldn’t be better,” said Tom Brenneke, president of Guardian Real Estate Services, one of the other owners of Yard who had been managing the leasing of the building’s units. “If you’re shopping for a tower in Portland, you just don’t have many choices. There’s nothing out there to buy. This is a trophy deal.”
According to Pickhardt, the building was about 50 percent leased when the deal closed, which was yesterday. Lease-up started in August, and he said the pace has been about what the owners expected.
Fifty-seven of the units in Yard are dedicated to workforce housing and leased to people whose incomes are 60 percent or less of median family income. When the application process opened for those units, Pickhardt said more than 350 applications were submitted.
The units were made affordable through the city’s Multiple-Unit Limited Tax Exemption program, a 10-year property tax exemption on the residential improvements to a structure as long as program goals are met.
“I think Land and Houses saw the value in the program at a lot of different levels, particularly at the community level,” Pickhardt said.
Though the price has yet to be disclosed, Yard no doubt went for a pretty penny, as demand from institutional and even foreign investors for Portland’s multifamily assets has been strong during the current cycle. One example: last December, the Mapletree Group, a real estate investment firm based in Singapore, paid $45 million for The Janey, a 112-unit luxury apartment building in the Pearl District.
Asked for a quick estimate of what a building like Yard might go for in this environment, Steve Morris , vice president of Investors Management Group Northwest LLC, said based on the few comparable deals — there aren’t many that are similar to Yard’s size and close-in location — it easily sold for a minimum of $110 million.
Other sources suggest the final price was even higher than that.