The Gregory’s new owners can execute a ‘lease-up to stabilization strategy’ with the building sitting at 45% vacancy.
The Gregory, a 12-story, 340,000-square-foot mixed-use residential/retail/office in Portland’s Pearl District, was sold by its original owner to opportunistic commercial real estate investing firm Jewell Capital, for $5.7 million this week, according to commercial real estate firm Kidder Mathews.
The Gregory was constructed with a $27 million budget in 2001. The building’s 133 high-end residential condominiums were not included in the sale to Jewell Capital. At the time of sale, the building was 55% occupied with a mix of local retailers and professional officers.
“The attractive acquisition cost basis will allow this highly experienced new ownership group to execute a thoughtful lease-up to stabilization strategy, building upon the existing core tenancy,” Kidder Mathews broker Darren Tappen, who represented Genworth in selling The Gregory, said in a press release.
The news comes as commercial real estate in downtown Portland faces a “sea change” as market reports of the area show companies are requiring less and less commercial real space to operate.
According to commercial real estate firm Kidder Mathews’ quarterly commercial real estate report released last week, office vacancies in the Portland market reached a historic high of 13.2% in the third quarter of this year, while asking prices held stagnant at $28.68 per square foot. (The Gregory sold at $121 per square foot.)
Shortly after Kidder Mathews released its report, the Portland Business Journal reported that a lender is foreclosing on a loan tied to the Montgomery Park office building in Northwest Portland. In April, the limited liability company that owns Jackson Tower, a 12-story office building overlooking Portland’s Pioneer Square, defaulted on a loan from JPMorgan Chase after missing payments.