One of Portland’s landmark office properties traded hands last week when a Unico Properties L.L.C.-controlled investment fund paid $41 million for the downtown asset. The joint venture between Unico and Cigna Realty Investors purchased the Commonwealth Building from seller Commonwealth Acquisition L.L.C. Unico has been the property’s manager, a position it will maintain after the transaction.
The Commonwealth Building is located at 421 S.W. Sixth Ave. in Portland’s downtown area, and has been there for the past 65 years. The office asset is one of the area’s landmarks, its value having already gone up when compared to the fee that current seller Commonwealth Acquisition L.L.C. paid for it back in 2007. According to rentv.com, after paying $27 million for the property, the entity invested a further $7 million to bring the 14-story structure up to date and fit it with modern, environmentally friendly features. The building has since received LEED EB Gold certification from the U.S. Green Building Council and an Energy Star designation for operating efficiently.
The Pietro Belluschi-designed office tower currently has a vacancy rate of 6.9 percent, well below the city’s average office vacancy values. According to data from Marcus & Millichap Real Estate Investment Services, Portland will end the year with an average vacancy rate of 12.1 percent due to positive absorption and a strong demand for space in the area. That’s well below the national average, which the data provider forecasts will be around 16 percent at the end of the fourth quarter.
Chart courtesy of Marcus & Milichap Real Estate Investment Services.