PORTLAND, OR-Two years after luring the historic building’s main tenant to one of its other buildings, Seattle-based Unico Properties has acquired the 219,000-sf Commonwealth Building in Downtown Portland from local investor-developer Joe Weston in an off-market transaction. Unico and partner Cigna Realty Investors paid $27 million for the building, according to local industry sources, and will invest an additional $6 million to substantially renovate the lobbies, replace the HVAC and lighting systems, and improve tenant spaces.

The class B office building at 421 SW 6th Ave. has remained largely vacant (70%) since Multnomah County left in 2005 for Unico’s Lincoln Building. Prior to the sale Weston’s American Property Management has begun a common-area renovation program that Unico will complete. Unico’s local executive Brian Pearce confirmed the renovation budget but declined to confirm the purchase price. Unico’s broker Dave Squire of Grubb & Ellis could not be reached for comment.

Completed in 1948 as the headquarters for Equitable Savings and Loan, the Commonwealth Building was the first skyscraper in the US to use a flush curtain-wall design; the first to use double-paned glass; the first to use heat pumps for heating and cooling; and the first to be completely clad in aluminum. It would be a standard building style for decades to come.

Current tenants include a host of architecture firms who like the vibe of being in a Belluschi-designed building, which has a very unique, attractive lobby even by modern standards but is a little tired when you get beyond the first floor, according to local brokers. “It’s a very, very significant building architecturally and the architecture firms recognize that cool factor,” Unico’s local executive Brian Pearce tells GlobeSt.com. “They recognize what it could be; we will deliver it.”

The additional work on the building will take Unico’s all-in cost to about $153 per sf. Current full-service asking rates in the building range from $16 to $19 per sf per year. Post renovation, asking rents likely will be in the low-to-mid $20s per sf.

Weston, who owns American Property Management, is not known as a seller. He was out of town and unavailable for comment on why he broke from tradition and sold an asset, but it is believed he wanted to stoke his charitable foundation, to which he donated the buidling shortly before the sale. Unico no doubt hopes the investment turns out like its last class B acquisition in Downtown Portland, the aforementioned Lincoln Building.

Located at 421 SW Oak, Unico acquired the eight-story, 255,000-sf, class B office building with Broadreach Capital in early 2005 for $11.25 million, or $44.11 per sf. The Qwest Corp.-owned building was 35% leased when they tied it up thanks almost exclusively to a 10-year leaseback by the seller. While the deal was in escrow, however, Pearce landed a 99,478-sf, 10-year lease with Multnomah County that was worth several million more than Unico paid for the entire building. In taking the space in the building, the county vacated a similar amount of space in the Commonwealth Building. Unico is now marketing the Lincoln Building for sale.

In addition to the Commonwealth Building and the Lincoln Building, Unico owns the city’s signature office building, the US Bancorp Tower, also in partnership with Broadreach, and is under construction for the Lovejoy, a two-block mixed-use development at the north end of the CBD that will include a grocery store, a residential component and office space. As with the Commonwealth Building, Cigna is its partner for Lovejoy.

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