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PORTLAND, OR-Urban Renaissance Group LLC of Seattle and Boston-based Great Point Investors LLC have acquired the historic Morgan Building here for $27.5 million. The eight-story, 157,000-sf office building was acquired from the Los Angeles County Employees Retirement System.

Built in 1912 at the corner of Broadway and Washington in downtown Portland, the building has 17,000 sf floor plates and is about 94% occupied with little near-term rollover. Restaurant operator McCormick & Schmick’s leases more than a full floor in the building for its corporate headquarters, as does Boora Architects. Quantec, an analytics consulting firm, also leases a full floor in the building, and insurance broker Durham & Bates leases about 10,000 sf. The advertised lease rate under the new ownership will be $23.50 per sf per year, fully serviced.

“The combination of full-floor and smaller tenants is a good mix,” Urban Renaissance founder Pat Callahan, previously the regional executive for Equity Office, tells GlobeSt.com. “We also like the retail in that location a lot; Broadway is a key retail street.”

Callahan says he is a believer in Downtown Portland and expects that over the next 10 years it will see more than its fair share of absorption. “Portland is behind some other markets in terms of office rental rate growth,” he says. “We believe it will follow those other markets, which include other West Coast markets and other cities with similar Downtowns that offer such a vibrant, pedestrian and evening experience because that type of activity drives office location decisions.”

The acquisition is the second in Downtown Portland by the Urban Renaissance-Great Point JV. In August, it paid approximately $9.8 million for the Sherlock Building, a six-story, 61,000-sf historic property at 320 S.W. Oak St. the building was constructed in 1893 and 1894 and is on the National Register of Historic Places. It is fully leased by Ruth’s Chris Steak House and Zimmer, Gunsul, Frasca Architects LLC. ZGF, which leases most of the building, is scheduled to relocate to a new office building in mid-2009.

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