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BEAVERTON, OR-PS Business Parks is shedding one of its flex-office developments in the Sunset Corridor. Since adding the 685,000-sf Cornell Oaks development to its portfolio last year for approximately $88 million, the publicly-traded REIT now hopes to unload Woodside Corporate Center, a 415,000-sf flex-office development that should fetch around $50 million.

The property is 97% occupied and lease rates are around $1 per sf per month. Colliers International has been the building’s leasing agent for three years and now has the disposition assignment. “They’re just heavy on (that type of product),” says Colliers executive John Kohnstamm, explaining that Cornell Oaks not only is larger, but also comes with 24 acres of developable land. Kohnstamm tells GlobeSt.com that nobody has yet tied up the property, that an institutional investor will likely be the buyer and that “there are more than a couple of groups vying for it.”

Earlier this month, PS lured Carol Ambrose from Grubb & Ellis to fill a new position overseeing the firm’s property managers in this region, saying the Cornell Oaks acquisition made it necessary. Brett Franklin, the company’s VP of acquisitions, says the new position still will be necessary because the Northwest operation were understaffed to begin with. “We are adding a 685,000-sf development with excess developable land to what was already an extraordinary load (for the company’s Pacific Northwest vice president Eileen Newkirk),” says Franklin. “She oversees Northern California and Oregon and Washington.”

In a recent filing with the Securities and Exchange Commission, PS the slowdown in economic activity and the Sept. 11 terrorist attacks prompted a decline in occupancy rates and a reduction in market rates throughout the company’s portfolio, slower than expected lease-up of the Company’s development properties, lower interest rates on invested cash and a rise in insurance costs upon the expiration of our policies expire in March 2002.

“Many of the Company’s properties have lower vacancy rates than the average rates for the markets in which they are located,” states the filing. “Consequently, the Company may have difficulty in maintaining its occupancy rates as leases expire. An extended economic slowdown will put additional downward pressure on occupancies and market rental rates. The economic slowdown and the abundance of space alternatives available to customers have led to pressure for greater rent concessions, more generous tenant improvement allowances and higher broker commissions.”

On the development side, PS says its two current projects were 46% leased in the aggregate as of March 31, 2002, but they have not been leased as rapidly as the Company had anticipated. The development properties include a 97,000 sf development in the Beaverton submarket of Portland, Oregon that was 26% leased.

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