The Fourth Avenue Building has two components, an older, low-rise portion owned by Portland State University and a new seven-story tower that is owned by the City of Portland. PacifiCorp occupies space in the low-rise portion of the building. Its current lease expires in mid-2006, at which time the new seven-year lease will commence.
PacifiCorp was represented in the lease transaction by Ramona Harrington of Oregon Commercial Properties. PacifiCorp was represented by Dave Squire of Grubb & Ellis. The parties involved declined comment on the value of the lease, but local brokers familiar with the transaction tell GlobeSt.com that PacifiCorp will be paying a full-service rate at or just below $20 per sf, on average, over the life of the lease, which would put the value of the lease somewhere between $7 million and $8 million.
Local brokers say the lease deal is a demonstration of Downtown tenants trying to take advantage of current marketplace to renew and extend leases before rates start to rise again with the recovering economy. In trade, PSU has retained a high-credit tenant and guaranteed itself solid income from the building through 2013.
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