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While available buildable land in Portland is critically reduced by the increasing numbers of developments going up, it’s the industrial commercial market in particular that is especially experiencing huge demands resulting in bigger facilities across the region.


Marketed as the largest project ever built in the Sunset Corridor, industrial real estate developer Majestic Realty broke ground in April on the latest phase of its 73-acre industrial business park development in Hillsboro.

SUBMITTED: COLLIERS INTERNATIONAL/SKYRIS - Aerial images of the complex captured in April show the current state of construction at Majestic Brookwood.

The master plan for nine to 11 buildings — office, industrial and retail — could total 1 million square feet, including at least four large facilities and 6.5 acres for amenities and service providers for the eventual workforce of Majestic Brookwood, which is along Brookwood Parkway near the Hillsboro airport south of Highway 26.

The brokers in charge of leasing the buildings in the Majestic Brookwood complex, Colliers International real estate company, are having no trouble locking in tenants before the buildings are even completed.

“Our activity has been comparable to the Columbia Corridor,” Mark McClung, vice president of Colliers International, told the Business Tribune. “Demand activity has been great.”

SUBMITTED: COLLIERS INTERNATIONAL - Mark McClung, vice president of Colliers International.

So far, construction of a large 200,000 square foot data center building for Via West was completed in September 2015, and another 65,000 square foot entertainment complex for Top Golf is scheduled for completion late this summer.

“Those two deals came together immediately after Majestic closed on the land,” said Mike Thomas, senior vice president of Collier International. “They were active prospects at the time.”

Currently, a 303,360 square foot space spanning 16 acres is under construction by Commerce Construction Co., part of Majestic Realty, after the April groundbreaking. Majestic Realty, based in Los Angeles, has a 77 million square foot portfolio, and is one of the largest privately-owned real estate developers in the U.S.

SUBMITTED: COLLIERS INTERNATIONAL - Mike Thomas, senior vice president of Colliers International.

“We had Top Golf as more of an entertainment deal, not so much of an industrial deal, but the Via West deal was a data center,” Thomas said. “There is a lot of data center interest in Hillsboro specifically because of the cyber transport network, the high quality of redundant power and, of course, Oregon has no sales tax.”

Also, Flexible M-P zoning offers local and state tax abatement opportunities, adding an incentive for data centers to be there.

The incentives, while they are nice perks, may not be a significant factor in demand because tenants don’t have a lot of options for commercial real estate in Portland right now.

Disregarding availability, it’s timing — when a previous tenant will vacate or, in developmental cases, when the facility will be ready to open — that is key, especially because leasing deals are often made on industrial properties before the facility is completely built.

“At this point, there are not a lot of large buildings available or large buildings soon to be available in that 300,000 square foot range,” Thomas said.

“Anybody who’s looking in our market is going to look at Airport Way, they might look down to Tualatin ... they’ll find us on the radar, so we’ll all be considered. Then, it’s a matter of timing: when it’s going to be available, location to some extent, and then maybe some things like building design will come into play, too.”

At Brookwood, there’s space and plans for another large future development around the same size, which can be built to suit the tenant in the same way Top Golf and Via West’s buildings were, according to McClung.

“The cost of bringing to market development-ready land is getting very expensive in Portland,” Thomas said. “All of those costs get rolled up into a rental rate at some point, so that rental rate has got to be competitive with the rest of the market, or for some compelling reason if a company needs to be in Hillsboro.”

Top Golf and Via West jumped on the opportunity to lease their locations as soon as Majestic bought the land from the Nike Foundation in 2014 for $15 million.

“It was a big deal to get that piece of land owned by Nike,” said Vicki Menard, communications manager with Perlo construction, a partner in the site planning and construction. “It seemed to me like it was one of those projects a long time in coming, thinking that whole thing will take off and be a million square feet.”

SUBMITTED: COLLIERS INTERNATIONAL - Leaders celebrate at an April groundbreaking of a 303,360 square foot facility, which has an expected completion date of  (left to right) John S. Perkins, Executive Vice President, Commerce Construction Co. (part of Majestic Realty) Mark McClung, Vice President, Colliers International Mike Thomas, Senior Vice President, Colliers International Mayor Jerry Willey, City of Hillsboro Phillip Brown, Executive Vice President, Majestic Realty Co. Marc Burns, Vice President, Majestic Realty Co.

As for the 303,000 square foot high-distribution facility currently under construction, McClung said, “We anticipate to have that fully leased and occupied in 2016.”

Adjacent to that large one are future plans for another large development and one 130,000 square foot building.

“We’re just currently in discussions with occupiers,” McClung said.

Thomas said there is high interest in the remaining Brookwood locations, including the two other large facilities and a handful of 3,500 to 10,500 square foot spots.

“But, no commitments are being made to them now because you don’t want a 3,500 square foot prospect to get in the way of a 350,000 prospect should they come along,” Thomas said.

COURTESY: MAJESTIC REALTY - A site plan maps out Majestic Realtys intentions to develop a 73-acre lot in Hillsboro that could add up to 1 million square feet of industrial developments.

On the smaller side, a 10,500 square foot shop and three that are 3,500 are proposed for the edge of a 1,700 car parking lot.

“Those tiny ones along Brookwood Parkway will be the last: those are conceptual at this point, there just to illustrate what the vision is, not so much what a hard-and-fast plan is,” Thomas said. “The intention is to have some food service and commercial service on-site so that employees don’t have to get in their car and drive off campus to get anywhere.”

Phillip Brown, executive vice president of acquisitions and development for Majestic Realty, said the development team is excited to move forward into the next phase, focusing on the responsible and visionary development of the park so it will serve both short- and long-term needs of the tenants and community.

“The mixed-use plan we have in place helps ensure that our tenants and their employees will have the infrastructure and amenities needed for decades to come,” said Brown.

“We believe in this location and we know, based on current market supply and demand, as well as strong economic indicators, that we will be able to deliver a building and a business park that is highly sought after by the larger corporate and industrial users.”

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