Deal Watch: Powerhouse investor dips into Portland — then flips


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The biggest name on Wall Street bought into the Portland real estate market this year, but the deal didn’t have staying power.

 

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The biggest name on Wall Street bought into the Portland real estate market this year, but the deal didn’t have staying power. The Blackstone Group — whose March blockbuster IPO filing has finance junkies salivating — bought out Equity Office Partners in February for a stunning $39.2 billion. It was the largest private-equity buyout on record (we wonder how long that will hold up) and it suddenly made Blackstone the largest single owner of Portland-area office space with 4.1 million square feet of cubicle acreage.

With alarming speed Blackstone’s real-estate pros in New York slapped a $1 billion price tag on the 40 Portland-area properites — which includes pretty much all of Kruse Way in Lake Oswego, arguably the market’s hottest address — and found a buyer in San Francisco-based Shorenstein Properties. The sale closed in late March.

Gary Griff, a veteran office-space broker  at Cushman & Wakefield in Portland, says the speed of the transation was astounding. “They‘re handling real estate more like stocks and bonds.”

As for Shorenstein, now the area’s largest office landlord, Griff doesn’t expect to see much change.  “For the price they paid, they’ve got to be looking at this as a long-term investment.”

The portfolio includes three developable properties, including a parcel at the foot of Portland’s Hawthorne Bridge where Equity was knee-deep in plans to build a high-rise office tower.

— Christina Williams

MERGERS AND ACQUISITIONS

ANNOUNCEDEXP. CLOSEBUYER (HQ STATE) / PARENTSELLER (HQ) / PARENTPRICE (TERMS)
30-MarQ1 ‘07Motorola (IL)Tut Systems (Lake Oswego)$39m cash
28-MarQ3 ‘07Columbia Banking System (WA)Town Center Bancorp (Portland)*$45.1m (42% cash + 58% stock)
26-MarQ1 ‘07Littler Mendelson, P.C. (CA)Amburgey & Rubin, P.C. (Portland)ND
20-MarNDIntegra Telecom (Portland)Eschelon Telecom (MN)$710m (80% cash + 20% assumed liabilities)
13-MarQ1 ‘07Knorr Foods Co. / Ajinomoto Co. (Japan)New Season Foods (Forest Grove)ND
13-MarQ1 ‘07Ascentium Corporation (WA)Centerlogic (Portland)ND
13-MarQ1 ‘07LTC Global Solutions (Medford)Senior Wealth Care Insurance Services (TX)ND
8-MarQ2 ‘07The Campbell Group (Portland)Menasha Forest Products Corporation (North Bend)ND (cash + assumed liabilities)
20-FebQ1 ‘07Bear Mountain Forest Products (Cascade Locks)Smokehouse, LLC (Hood River) / Luhr JensenND
19-FebQ2 ‘07Eschelon Telecom (MN)United Communications (Bend)$13.9m (cash)
16-FebQ1 ‘07Country Coach Holdings, LLC (Junction City ) / Riley Investment Management, LLC (CA)Country Coach Subsidiary (Junction City) / National R.V. Holdings (CA)$51.75m (75% cash + 25% assumed liabilities)
14-FebQ2 ‘07CheckFree Corporation (GA)Corillian Corporation (Portland)$245m (cash)
*Sell-side advisers: McAdams Wright & Ragen (financial); Foster Pepper LLP (legal). Buy-side advisers: D. A. Davidson & Co. (financial); Graham & Dunn PC (legal).

 

REAL ESTATE TRANSACTIONS

ANNOUNCEDBUYER (HQ)REAL ESTATE (LOCATION)SELLERPRICE
28-MarIllig Investment Co. LLC (CA)Two industrial/flex complexes (Milwaukie, Lake Oswego)The Realty Associates Fund VI LP$9.69m
28-MarShorenstein Properties (CA)46 office properties (Portland)Blackstone Group$1b
28-MarHR Salem Associates LLC (Salem)Industrial building (Salem)Neilsen Manufacturing$6.17m
28-MarSolarWorld AG (Germany)Oregon Technology Center (Hillsboro)The Benaroya Company$40m
28-MarArrington Medical Center LLC & Oleson Medical Center LLC (WA)Columbia Medical Plaza building (Vancouver, WA)Northwest Columbia Medical Plaza$5.13m
28-MarNike (Beaverton)125-acre land parcel (TN)Belz EnterprisesND
28-FebBFP Leveton LLC (Beaverton)Industrial building (Tualatin)Tofle USAND
28-FebTrailblazer Foods (Portland)Dayton Building (Portland)SN Investment Properties LLC$3.83m

 

CAPITAL RAISING

ANNOUNCEDCOMPANY (HQ) / LEADERSHIPINVESTORPRICETERMS
29-MarCalypte Biomedical Corporation (Lake Oswego) / Roger Gale, CEOInternational investors$5.2mPrivate placement (common stock + warrants)
26-MarWellpartner (Portland) / W. Michael Wright, CEO3i and Buerk Dale Victor (co-leads); Integra Ventures; Mediphase Venture Partners; Greenwoods Capital$7.5mSeries C equity
22-MarServeron Corporation (Hillsboro) / Bart Tichelman, CEOEl Dorado Investment Company; Nth Power; Cascadia Pacific Management; Oregon Life Sciences LLC; others$5mEquity
19-MarHemCon Medical Technologies (Portland) / John W. Morgan, president & CEOCamden Partners Holdings LLC; Torch Hill Partners$12mEquity
19-MarVesticon (Portland) / Dr. John Epley & Cathy Epley, co-foundersNational Institutes of Health$1.03mPhase II SBIR grant
14-MarProteoGenix (Portland) / Don Mooney, president & CEONLV Partners (co-lead); TPG Growth (co-lead); Burrill & Company$20mSeries B equity
6-MarPlatial (Portland) / Di-Ann Eisnor, co-founder & CEOKeyNote Ventures, Kleiner Perkins, Caufield & Byers, Omidyar Network, Ram Shriram, Ron Conway$2.4mSeries A equity
2-MarNike (Beaverton) / Nick Athanasakos, VP-supply chainIllinois State Board of Investment$27.6mSale-leaseback

List researched by Mark Druskoff

ND=Not disclosed

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