San Francisco firm purchases Kruse Way holdings
In purported $1 billion deal, Shorenstein Properties picks up 46 buildings in Portland area
A San Francisco-based company bought more than 4 million square feet of office space in the Portland area Tuesday, including 17 buildings in the Kruse Way corridor.
In the exchange, Shorenstein Properties acquired 46 buildings in the greater Portland area and three development sites, two on Kruse Way and one at First and Main in Portland.
The buy is Shorenstein's first in Oregon and is believed to be the largest real estate purchase in state history. Though no figure has been offered on the deal, sources inside Shorenstein put the price tag at about $1 billion.
The company purchased the properties from Blackstone Group, which recently bought out Seattle-based Equity Office Properties Trust, which owns the bulk of the real estate in the Kruse Way corridor.
Andrew Neilly, spokesman for Shorenstein, said the real estate investor has been working to build its portfolio in the Pacific Northwest, and recently made several purchases in Seattle.
'Portland is considered to be the next significant market in the Northwest and they like the market from that point of view,' Neilly said.
Property in the corridor has been described as Portland's premier suburban office property, convenient for its location at the convergence of I-5, 217 and I-205 in Lake Oswego.
It is considered top-of-the line office space, known for its mostly brick architecture and wood-paneled interiors. Fourth quarter reports put annual rental rates along the corridor at $24.55 per square foot, surpassing even Portland for the highest rental rates in the area.
According to Equity's Web site, the company's former holdings in the Kruse Way corridor include 4000 and 4004 Kruse Way Place along with 4800, 4900, 4949, 5000, 5800 and 6000 Meadows Road.
The company also owned Kruse Oaks, Kruse Oaks II, Kruse Way Plaza I, Kruse Way Plaza II, Kruse Woods I, Kruse Woods II, Kruse Woods III, Kruse Woods IV and Kruse Woods V.
In addition to the Lake Oswego properties, the company acquired the Umpqua Bank Plaza and Congress Center in downtown Portland, three properties in John's Landing, the Nimbus Center comprising 16 properties in Beaverton, and seven properties in Lincoln Center in Tigard.
Douglas Shorenstein, chairman of Shorenstein Properties, said in a news release that the quality and breadth of the Oregon portfolio would be difficult for an investor to replicate over time.