EOP Talks Portland Market with GlobeSt.com

PORTLAND-Equity Office Properties Trust likes Portland’s fundamentals and wants to grow here, but having just bought itself a dominant position in the market, EOP regional director Pat Callahan tells GlobeSt.com it will likely be several months before there’s much but management going on.

“Portland is a very stable market with very good fundamentals, and we certainly would like to grow there,” says Callahan. “But investment is a national question and Portland is competing for investment dollars with markets all over the country, which doesn’t necessarily translate to we’ll buy there in the next 12 months.”

Equity Office Properties Trust all of a sudden owns 42 office buildings in the region thanks to last week’s $7.3-billion merger with Spieker Properties. On a square footage basis, it equates to about 3.8 million sf, making EOP by far the largest owner of class A office space in the region. Callahan tells GlobeSt.com the combined portfolio is over 94% leased on a direct basis. Another 3% is available on a sublease basis.

In the Central Business District, the company now owns three office buildings totaling about 875,000 sf. In addition to the 376,159-sf 1001 Fifth Avenue building it owned prior to the merger, EOP now owns the 269,091-sf Benjamin Franklin Plaza at 1 SW Columbia and the 229,510-sf One Pacific Square at 220 NW Second Ave.

In the Kruse Way submarket, EOP now owns around 14 buildings totaling more than 1.3 million sf, plus a couple of extra building lots. And that’s if you don’t include the six-building Lincoln Center development across Interstate 5 and a few miles down Highway 217 in the Washington Square area. At 726,000-sf, it is the Portland region’s largest suburban office complex.

The last of EOP’s inherited office product are the 14-building, 700,000-sf Nimbus Corporate Center in Beaverton, which is a flex product, and four office buildings totaling 335,000-sf in the John’s Landing submarket just south of Downtown Portland. The John’s Landing buildings include 5550 Macadam (41,398 sf), River Forum I & II (194,396 sf) and RiversideCentre (99,898 sf).

The only building that won’t immediately be leased using in-house brokers is 1001 Fifth, which is being handled by CB Richard Ellis’ Clint Benson. Callahan tells GlobeSt.com that eventually that, too, will be handled in-house. EOP’s local staff is comprised almost entirely of former Spieker properties employees. All but s few of Spieker’s 65 employees made the switch, including Lynda Clarke, who will oversee local operations for Callahan.

Also included in the Spieker deal were 12.2 million sf of industrial properties in California, Oregon and Washington. A comprehensive list of EOP’s local industrial holdings was not immediately available, but Callahan says it will likely outsource their leasing and management to a local firm while a buyer or two is sought for the entire 12.2 million sf industrial portfolio it acquired.