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PORTLAND-M Financial is the 52,000-sf user Gerding Edlen wouldn’t name last week in an article on GlobeSt.com about the expansion of the Art Institute of Portland in the same building of its five-block redevelopment project known as the Brewery Blocks. An M Financial principal is also said to be a Brewery Blocks Investor, but Gerding Edlen wouldn’t comment on that, either.

With the Art Institute having recently expanded in the 10-story, 260,000 sf office building to be built on Block 4, that particular building is now about half preleased. The M Financial lease, for the top floors of the building, was probably signed near the top of the asking range, which was $23 per sf NNN. Add in several dollars per sf for full service, and the 10-year lease deal is valued at more than $15 million, which is why the building will be known as M Financial Plaza.

Meanwhile, Block 1 is already full. With fiber optic networking provider Tycom leasing 80,000 sf of office space and grocer Whole Foods Market leasing all 43,000 sf of the available retail space, just a few thousand square feet remains. Tycom is paying about $24.50 per sf (triple net) for its space. The company received a $20 per sf tenant improvement allowance. Whole Foods lease rate was not available.

Indeed, the only Brewery Blocks office project currently rising without tenants is Block 2 — the only one Gerding Edlen no longer owns and one of the first that will be completed. Gerding Edlen pre-sold the 218,000-sf poster-building for the development — the one fronting Burnside that incorporates part of the old brick brewery building — to Multi Employer Properties Trust for an unknown price.

Gerding Edlen leasing director Scott Eaton described the sale of Block 2 as “a financing instrument, in a way.” The second largest building in the project, it includes 135,000-sf of class A office space, 28, 540 sf of “historic character” office space, and 50,000-sf of retail space. To date, however, none of the office space has been leased and only 13,000 sf of the retail has been spoken for, with completion slated for this May.

Block 3 is the former Armory Building, which is being marketed to retail users. Seattle-based REI has declined past advances by the company. Vacant land next to the armory is slated for either 125 condos or 150,000-sf of office space, which isn’t planned to arrive until mid 2004. Block 5 is the residential portion of the project. It tentatively planned as 40,000 sf of grade-level retail topped by 230 units of rental housing. It is scheduled for completion in Nov. 2003 at the earliest.

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