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PORTLAND-Ashforth-Pacific Inc. picked up its second Downtown office building this week, paying Equity Office Properties Trust $48 million for One Pacific Square, a 14-story, 240,000-sf office building at the north end of the Downtown core. Located at 220 NW Second Ave. in Portland’s Old Town/China Town neighborhood, the 22-year-old building is 70% leased to Northwest Natural Gas, which recently renewed its lease, keeping vacancy in the building under 10%.

Ashforth-Pacific, the longtime locally based affiliate of Stamford, CT-based Ashforth Co., is the 800-pound gorilla across the Willamette River in the Lloyd District, where it owns the vast majority of the office space and much of the developable land. In November, it ventured across the river for the first time, acquiring the 24-story, 400,000-sf ODS Tower for $123 million.

Its second purchase looks a lot like its first in many respects. Although ODS Tower is a larger, newer building, it has a major local employer as a tenant, it’s namesake, a provider of dental and medical coverage and professional liability insurance that leases one-third of the building. Also, both buildings are on the city’s light rail line and within a block or two of Tom McCall Waterfront Park. Finally, both assets were acquired in partnership with GE Asset Management, which is headquartered in Stamford.

Ashforth Pacific president Scott Langley tells GlobeSt.com Ashforth Pacific was simply looking for core, institutional-quality real estate. In One Pacific Square, Ashforth Pacific acquired a building that has been 70% refitted as class A office thanks to the healthy tenant improvement package that EOP gave Northwest Natural Gas as part of the lease agreement. Moreover, he says the 17,000 sf of vacant space is only available because Northwest Natural used it as staging for the phased renovation of their space.

With regard to the Old Town/China Town neighborhood, which has had a reputation as a haven for the homeless, Langley says the neighborhood is well on its way to experiencing the kind of renaissance that has occurred in the neighboring Pearl and River districts. Indeed, the city is in the throes of redoing the streetscape in the neighborhood, the University of Oregon recently signed a long-term lease in the neighborhood for its Portland campus and Mercy Corps is looking for a headquarters location in the neighborhood. There are also several full or multiple block private projects in the works, he says.

“Some people have a concern about that area, but it has changed dramatically in the past five years and will continue to do so,” he says. “The Pearl and River district renewal leapfrogged over this neighborhood but I seriously believe that those districts will officially grow together and include Old Town/China Town.”

Ashforth Pacific acquired its 20-block stake in the Lloyd District 11 years ago from PacifiCorp, but don’t expect Ashforth to begin selling off any of its assets. “A lot of people would call it a seasoned investment and consider a sale; we only have plans to further develop our property,” he says. “We are also out there looking for other major assets here in Portland and in Seattle. While ODS and One Pacific Square are mid-rise buildings we are also looking for major towers.”

One Pacific Square is the second significant office sale in Portland this month. This morning (Thursday, Aug. 24), GlobeSt.com reported that Chicago-based Rreef paid about $70 million to acquire One Main Place, a 20-story, 315,000-sf Downtown office building that was built in 1980 and also is located near the waterfront. The One Main Place sale equates to $220 per sf; the One Pacific Square deal works out to $200 per sf.

Looking ahead, Portland’s largest office building, the 1.1 million-sf US Bancorp Tower, is in the process of changing hands this month as well. Known as Big Pink, the landmark 43-story tower is owned by a partnership of Seattle-based Unico Properties and Broadreach Capital.

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