Hillsboro Has Development Recipe That Works

PORTLAND, OR—With a flurry of activity in the form of industrial and retail development projects last year, privately held industrial developer Majestic Realty Co. continues to expand its footprint in the Portland region. These include speculative developments, build-to-suit opportunities, lease ups and new land acquisitions.

“We’re incredibly proud of the success and growth we’ve been able to achieve throughout the Portland metro area since 2014 when we acquired what is now the Majestic Brookwood Business Park,” said Phillip Brown, executive vice president of acquisitions and development for Majestic Realty Co. “As we continue our growth in this region, we’re even more focused on the responsible and visionary development of each of our projects and we’re working to ensure that we serve both the short- and long-term needs of our tenants and the entire community.”

Last year, Majestic Realty completed a 207,053-square-foot build-to-suit sortation facility for UPS. Originally planned as a two-building spec project, UPS approached Majestic Realty during the design phase to request that Majestic build the entire site. Some 18 months later, Majestic Realty entitled and built the UPS sorting facility scheduled to open in second quarter 2019. This build-to-suit was the largest delivery of the fourth quarter at 266,160 square feet.

“Portland is a locals market with numerous barriers to entry, so knowing the key players is essential,” Brown tells GlobeSt.com. “Also, the urban growth ring around the city means there is limited land and the entitlement/permitting procedure requires a knowledge of the process.”

With walls fully tilted in December 2018, the company’s latest project, Majestic Tualatin Business Center, a 226,960-square-foot logistics facility, is on target for early second quarter completion. Located at 21409 SW 115th Ave. in the high-demand Interstate 5 Corridor South submarket, the building will offer 32-foot clear height, 39 dock-high loading doors, a large truck courtyard with 38 trailer parking stalls, 128 car parking stalls with room for expansion, ESFR sprinkler system and ample office space. The property is divisible to approximately 55,000 square feet.

“Majestic Tualatin Business Center is the largest speculative industrial building to be built in the submarket in many years and is being met with a tremendous amount of interest and activity. With a lack of inventory of available space over 100,000 square feet and strong demand in the submarket, we’re expecting a short lease-up period,” said Steven Klein, senior vice president and managing partner of Kidder Mathews who, along with his partner, Peter Stalick, Kidder Mathews senior vice president, is marketing the project with Majestic Realty.

In addition, Majestic Realty Co. has acquired a 45.6-acre parcel directly adjacent to its now fully developed Majestic Brookwood Business Park. Located at the southwest corner of Brookwood Parkway and Huffman Street, Majestic Brookwood Business Park II is a planned three-building site that offers build-to-suit or ground lease opportunities for users starting at 162,000 square feet, up to 795,000 square feet. The high-identity corridor location offers access to the Sunset Highway (26) via Brookwood Parkway, 32-foot to 36-foot ceiling clearance, cross-dock loading and an extensive on-site fiber optics network.

Rounding out the development of its Majestic Brookwood Business Park, the company began construction on Lot 2, a 6.28-acre retail center featuring a Hyatt House, Starbucks and 7/11. With some small additional opportunities available, Lot 2 represents the last component of the Majestic Brookwood Business Park which was acquired in 2014 and is home to TopGolf, DB Schenker, Rosendin Electric, Amazon and Flexential (formerly ViaWest) with Hyatt House, 7-11 and restaurants under development. Finally, Majestic completed construction this year on its Majestic Alberta Commons, a 25,000-square-foot retail center in Portland featuring anchor Natural Grocers.

“Basically, everyone was developing on the east side of the airport so we took development to the west side near the high-tech industrial users. This product type wasn’t previously there but was needed. We go where the recipe works,” Marc Burns, Majestic senior vice president, tells GlobeSt.com. “We understand development and rent costs, and quickly realized Hillsboro had a recipe that works and we carved a niche in the marketplace. We took a risk there but all properties are preleased.”

Majestic Realty Co. has developed approximately 100 million square feet of industrial properties and master-planned business parks. In 2017, Majestic Realty Co. expanded its longstanding commitment to the Pacific Northwest region with the opening of an office in Hillsboro, OR.

During the course of 2018, 3.9 million square feet of new inventory was delivered to the Portland industrial market with 500,000 square feet in the fourth quarter alone, according to a quarterly report from Cushman & Wakefield. This compares to the 2017 total delivery figure of 2.7 million square feet. Total leasing activity for all of 2018 was just under 6 million square feet, equivalent to the 2017 figure.

“The educated population and tech are huge catalysts,” Michael Perkins, Majestic real estate analyst, tells GlobeSt.com. “Portland has a tech focus with its data centers, and proximity to Intel and Genentech. Intel, specifically, continues to grow with a 1 million-square-foot expansion.”