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3/27/08
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In a high-profile Portland multifamily investment deal, Redwood City-based JB Matteson Inc acquired the Harrison Tower Apartments, a 24-story, 185-unit property in downtown Portland, for $45 mil ($243.2k/unit). The building, which was improved to be converted to condominiums, was delivered fully-renovated, empty, and with no condo sales contracts pending.
The asset was acquired in partnership with a large institutional investor. JB Matteson sourced the acquisition directly from a local partnership on a principal-to-principal basis. The seller was Portland Center Investors. PCCP provided the acquisition financing.
“Upon lease-up, Harrison Tower Apartments will represent a core institutional asset,” said John Bellack, President, JB Matteson Inc. “The real estate fundamentals here are very strong: Portland is adding jobs, the apartment market appears counter-cyclical to housing , the downtown location is superb, and the investment is well below replacement costs.
“In an uncertain capital market environment, we were especially pleased that the opportunity was well-received by lenders and our institutional partners,” he added. "Fifteen lenders provided 18 quotes for the acquisition financing."
Harrison Tower Apartments is one of three high-rise residential towers built in 1965, with a combined 536 units. The original name of the three-building community was the Portland Center Apartments, designed in the height of mid-century modern architecture by Skidmore, Owings, & Merrill.
In Sept. 2005, local developers acquired the property from Equity Residential with a plan to convert the entire property to condominiums on a per building basis in three phases. They renamed the property Harrison West (195 units), Harrison East (156 units), and Harrison South (185 units). Harrison West began accepting reservations in April 2006 and now has eight units remaining unsold. Harrison East began accepting reservations in Sept. 2006 and has 38 units remaining unsold. Each building was entirely vacated in order to perform extensive exterior and interior renovations.
Harrison South became the Harrison Tower Apartments, a 24-story, 149.5k sf residential tower offering dramatic views of downtown Portland and beyond. The seller performed a high-quality renovation consistent in theme with the original architecture. The units have been completely rebuilt to condominium standard, including new granite countertops, new cabinets, stainless steel appliances, new operable windows, bathroom vanities and flooring. An adjacent underground parking structure provides one parking space per unit.
JB Matteson is acquiring the property fully vacant and is managing the lease-up and final renovation process. Upon acquisition, the sales center will be converted to a leasing center, administrative offices, and a cyber café. The ground floor of the building will be converted to a fitness center overlooking the swimming pool and spa area.
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