REI Solidifies Pearl as Viable for Soft Goods

Developer John Carroll, who is planning a residential-over-retail development adjacent Interstate 405 between Northwest Kearney and Johnson streets, has signed Recreational Equipment Inc. to a long-term, 35,000-sf lease deal with an estimated value of between $15 million and $20 million, or about half the estimated cost of the entire 7- to 10-story development.

"It's an excellent site; I-405 will have giant view of an enormous REI sign, very similar to REI's flagship in Downtown Seattle (adjacent I-5)," says Craig Sweitzer, head of Trammell Crow CO's local retail brokerage team, which does much of the retail leasing in the Pearl District these days as the leasing agent Hoyt Street Properties, a major developer in the northeast section of the Pearl District. "It will severely impact the neighborhood for the better, as it will solidify the Pearl as a soft goods retail trade area, bringing in more clothing stores to complement all the restaurants you see today."

The project should also spark the redevelopment of other properties surrounding the site, says Sweitzer. "It will create a domino effect on that end," he says. "It will increase the values of surrounding buildings and those spaces will be activated."

REI officials say they have been looking for a Central City site in Portland for two years. The chain was at one time interested in the Brewery Block redevelopment project, which anchors the south end of the Pearl, but developer Gerding/Edlen reportedly wanted more than REI was willing to spend. REI's 15-year lease deal for Carroll's development was reportedly signed for between $30 per sf and $35 per sf.

REI plans to close its longtime Jantzen Beach store and relocate staff and inventory to the new Pearl District store in the spring of 2004. When the Jantzen Beach location opened in 1976, it was REI's third store. REI now has 59 stores in 24 states and two online shops, REI.com and REI-OUTLET.com.