Local developer acquires troubled historic property with an eye toward making huge improvements.
A local commercial real estate firm has purchased the Montgomery Park building in Northwest Portland with ambitious plans to return the fading office complex to its former glory.
Menashe Properties bought the property on NW Vaughn St. last week for $33 million, far less than the pre-pandemic purchase price of $255 million. The site features four buildings on 18 acres, 2,000 parking spaces and more than 800,000 square feet of office, flex and warehouse space.
Menashe’s immediate plans include adding a gym facility and food and beverage options in the fourth quarter of this year. This as office vacancy is at a historic level in Portland; around one-third of office space is vacant and no large office projects are currently planned for the city.
A spokeswoman for Menashe says the firm completed its due diligence in only five business days with help from artificial intelligence. “This turnaround time is unheard of for this industry,” writes Hannah Overhiser.
Seattle-based global investment firm Unico Property and Partners Group purchased the Montgomery Park property in 2019. It’s the current home of the Adidas Employee Store and other tenants.
The historic property had struggled to find a buyer after going into foreclosure last year. Borrowers at the time owed nearly $150 million.
Menashe is a Portland-run commercial real estate firm with properties around the U.S.
The nine-story building was constructed in 1920, a “hallmark or modern industrial design,” according to the Oregon Encyclopedia. It housed warehouse operations for Montgomery Ward department stores until it closed NW Portland operations in 1982.
Portland developer and Naito Parkway namesake Bill Naito purchased the flagging office building for $6 million and invested a further $25 million to renovate. He went deep into debt to finance the remodel but his efforts proved successful as the sunlit office space filled with tenants.
Naito’s famed frugality is evident in the building’s current name, according to a Willamette Week report following his death in 1996. The developer renamed his Montgomery Ward warehouses “Montgomery Park” because it required only changing two letters on the building’s prominent sign, the “W” and the “D.”
The building was added to the National Register of Historic Places in 1985. It features a showpiece glass atrium at the center of an 84,000-square foot U-shaped interior floor. The building is said to provide unobstructed views of Portland skyline, West Hills and Willamette River.
It’s today the third-largest office property in Portland, behind the U.S. Bancorp Tower, which lost a marquee tenant in September, and Wells Fargo Center.
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