Yard, the darkly clad mixed-use tower completed earlier this year in Portland’s Central Eastside, has sold to a Thailand company for $126.68 million.
Approximately 50 percent of the building’s 284 residential units are occupied, according to the buyer, Land and Houses U.S.A. The company is a wholly owned American subsidiary of Land and Houses Public Company Limited of Bangkok, Thailand.
The sale equates to $446,056 per unit. The seller was Block 67, a limited liability company whose majority owner is Hood River-based Key Development, which developed the property. Marcus & Millichap’s Elizabeth Davis represented the seller.
“It’s a significant transaction for the Eastside,” she said.
The transaction occurred off-market.
“We are seeing that there’s an opportunity now for international and private capital to win some deals where before they were edged out by institutional buyers,” Davis said.
Skylab Architecture designed the 21-story building. Yard has drawn criticism for its dark appearance, which was changed after gaining approval from the Portland Design Commission.
Yard’s retail spaces were 64 percent leased at the time of sale. Tenants include Knot Springs, a social club and spa; and Tilt, a burger-centric restaurant and bar.
Key Development’s Jeff Pickhardt was not available for an interview, but in an email he stated that the project was leasing as expected – and even slightly ahead of schedule.
“We hadn’t planned to sell this soon after completion when we had started the project, but having received a compelling, unsolicited offer from Land and Houses, we reconsidered,” Pickhardt stated.
Yard, at 22 N.E. Second Ave., is part of a development renaissance at the east end of the Burnside Bridge. Other projects include Slate from Beam Development and Urban Development Partners, the Fair-Haired Dumbbell from Guerrilla Development and 5 MLK from Gerding Edlen.
Yard has studio, one-bedroom and two-bedroom apartments. Advertised monthly rents range from $1,524 for a studio to more than $4,000 for some of the luxury units. The apartments average 682 square feet.
Yard also has 57 affordable units available to renters at 60 percent of median family income through the city’s Multiple-Unit Limited Tax Exemption (MULTE) program.
Portland’s apartment market has shown signs of cooling, particularly at luxury price points. The overall multifamily vacancy rate was 3.71 percent, up from 2.9 percent a year earlier, according to Multifamily NW’s fall apartment report. Managers of some properties have begun to offer leasing incentives.
Portland-area rents grew at an average annual rate of 4.1 percent during the third quarter, according to Axiometrics. That was higher than the national average of 3 percent.
Portland had a 95.6 percent occupancy rate – above the 95.1 percent national average.
Key Development is also at work on a commercial project at Northwest Third Avenue and Couch Street, two industrial buildings at the Port of Hood River and a multifamily project in downtown Hood River. The firm is looking at another possible opportunity in Portland as well, Pickhardt stated.Read Full Article