An entity associated with Menashe Properties has acquired Montgomery Park, a 768,443-square-foot office building in Portland, Ore. Natixis sold the asset for $33 million, Multnomah County records show, in a deal arranged by Newmark.
Unico Properties and Partners Group had purchased the property for $255 million in 2019. Two years later, the owners envisioned a 2 million-square-foot adaptive reuse development including office, retail and multifamily spaces for the 17-acre site where Montgomery Park rises.
However, the owners defaulted on debt totaling $149.7 million in September 2023 and a foreclosure auction was held this February. With no outside bidder participating in the auction, Natixis—the asset’s lender at the time—took over the office campus via its $37.7 million credit bid filled in advance.
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The nine-story Montgomery Park features 79,657-square-foot floorplates, 2,293 grade-level parking spaces, as well as a gym and 16,900 square feet of retail space. Current tenants include Daimler Trucks North America and Konica Minolta Business Solutions, according to CommercialEdge information.
Due to its energy-efficient operations and design—such as a solar array installed in 2017—and water-use reduction, as well as enhanced indoor environmental quality, the building achieved Energy Star and LEED Gold certifications.
Located at 2701 NW Vaughn St., the property is less than 1 mile from U.S. Route 30 and roughly 3 miles northwest of downtown Portland. Several transit stops, restaurants and a 5,200-acre park are within walking distance.
Newmark Vice Chairman Nick Kucha and Senior Managing Director James Childress, together with Directors Kellen Kollmorgen and Jakob Nicholls, represented Natixis.
From a warehouse to Portland’s third-largest office building
The asset initially debuted in 1921 as a warehouse for Montgomery Ward & Co., serving as a distribution center for the retail company. An effort to repurpose the building to office use took place in 1989. The property also includes a historic warehouse and a 3-acre development site.
Following its office reposition, Montgomery Park became metro Portland’s third-largest office building, outshined by the Wells Fargo Center and U.S. Bancorp Tower, according to the Portland Business Journal. Unico Properties and UBS own the latter.
Portland’s office market marches on
Metro Portland’s office vacancy rate stood at 17.1 percent in June, 100 basis points lower than the national average of 18.1 percent, a recent CommercialEdge report reveals. As Rose City’s office-using job count slid by nearly 4 percent year-over-year as of May, its office vacancy rate inched upward by 130 basis points year-over-year as of June, the report goes on to show.
The metro’s asking rental rates also dipped, decreasing by 4 percent year-over-year. Meanwhile, investors traded $40 million in office assets throughout Portland year-to-date through June, averaging $182 per square foot—slightly above the national average of $172 during the same interval—the report shows.