A $31.5 million losing bet
As commercial real estate values crater in central Portland, you know there are sharpies out there waiting to buy in when it hits bottom. It looks like one pounced the other day, as the Menashe clan bought the American Bank Building, at Sixth and Morrison downtown, for a reported $13.6 million. The last buyer, said to be a Chilean investment company, had paid $45.1 million for that turkey in 2014. Ay, caramba.
The 109-year-old historic structure has 180,000 square feet or so of rentable space, and so the Menashes got it for about $75 per square foot. By comparison, the median home listing price in Portland these days is about $330 a square foot. Just up the street from American Bank, the new Ritz-Carlton is asking more than $2,760 per square foot for the penthouse.
The average rent on an apartment in Portland is about $2.20 a square foot per month, which means that $75 gets you less than three years.
And so it sounds like the Menashes got quite a bargain, if they're willing to wait for downtown to make a comeback. They'd better be young. And patient.
The real estate wise guys aren’t jumping on that bandwagon ————- yet.
ReplyDeleteNo rush at the moment. There aren't any tenants. The city is just starting the giveaways. And prices may continue to fall.
DeleteFor the last 50+ years I've had business with several professionals in that building including a life-time relationship with my family attorney. Gorgeous building, beautiful offices, great views, outstanding location, it always had been a pleasure to make the trip downtown to attend to complex legal matters, but no more. And, aren't the Menashes the same group who created our own "open-air drug market" down the street when they emptied out the Washington Center? I expect to see Narcan dispensers installed in the lobby here soon.
ReplyDeleteI remember the TV series “Rubicon”
ReplyDeleteI wonder what the vacancy rate is today?
ReplyDeleteThe US Bank Tower has approx 740,000 sf. Estimates suggest that fewer than 700 employees work in it as of now. I can only imagine what occupancy looks like across the rest of the city.
DeleteMaybe a very shrewd investment. Old towers are much more easily converted to residential than post WWII glass curtain boxes with huge floor plates.
ReplyDeleteDare we ask who sold the building to the Chilean investment company???
ReplyDeleteI went to grade school and high school with one of the Menashe clan.
ReplyDeleteas long as the Menashes don't start trying to get people to come back to the office
ReplyDeleteI think this was a very shrewd investment. And just wait until every other building in downtown uses this as a comp to appeal their property tax assessment!
ReplyDeleteThis was a steal …. Total steal
ReplyDelete