OPPORTUNITY KNOCKS
Portland may be presenting investors with an opportunity we see only once in a generation. Potentially once in a lifetime. Years of negative headlines, higher interest rates, and declining confidence have pushed some property values far below their previous prices and replacement cost. Yet Portland’s fundamental strengths—its location, natural beauty, established industries and quality of life—remain. The opportunity is not without risk, but disciplined investors who buy at the right basis, underwrite conservatively and have the patience to hold through the recovery may be well rewarded.
BACKGROUND
The most dramatic example of this is Portland’s “Big Pink”…the former US Bancorp Tower. It was sold for $372,500,000 in 2015… recently picked up by the Swickard Auto Group for $45,000,000 cash. In 2015, it was leased at 94% of capacity. At the time of sale, occupancy was about 50%. Portland’s Core Business District has made strides towards recovery, but still has a long way to go. There are risks…but buying assets at a fraction of their peak values (in this case 12%) opens a world of possibilities. Investing in Portland in general, and its Core Business
If you want to be a genius in 5 years, make smart investments in Portland Real Estate today-RB
District specifically, is a great play for long-term hold investors. This is significant enough that some commercial real estate investors who previously focused on other niches and areas may consider a new way to create generational wealth in Portland’s downtown office and retail.
RECOMMENDED RESOURCE: EQUITY ADVANTAGE
I have long admired “The Exchange Brothers” (David and Tom Moore). Not just because of their exceptional knowledge and competence, but also because they give back to the investment community. They have established a marvelous 1031 Exchange Knowledge Base at www.1031exchange.com. They have created a great video interview with Jose Cienfuegos, President of the Revitalize Portland Coalition, discussing this opportunity in depth. See it at: https://www.1031exchange.com/why-portland-oregon-could-be-a-once-in-a-lifetime-opportunity-for-long-term-real-estate-investors/?
WHY SHOULD WE BE SO ENTHUSIASTIC ABOUT PORTLAND?
Jose Cienfuegos’ article cites these key attributes of our beautiful city:
- A major river running through the center of the city.
- Access to the coast and mountains from one metropolitan area.
- Green landscapes, long summer days, and a temperate summer climate.
- A highly regarded airport and strong regional connectivity.
- Professional sports, cultural amenities, restaurants, wine country, and outdoor recreation.
- An established design and manufacturing ecosystem in footwear, apparel, outdoor products, knives, optics, and related industries.
ROSE CITY COMMERCIAL REAL ESTATE
After 18 years as a Sales Engineer I gave up technical sales for Real Estate. I entered a 2-year paid internship in a multifamily investment firm with 7,500 units in 5 states. When the Great Recession hit I co-founded Prime Property Tax Negotiation, acting as an expert witness in trials on the full spectrum of commercial real estate investment assets. I also founded Rose City Commercial Real Estate.
I am proud to be a SNOB…Society Native Oregon Born that is, and a strong advocate for Stumptown. We proudly recommend the strongest resources, focusing on local firms. Our recommendations are alway based on providing our clientel with the best resources to match their need. We never solicit nor accept any compensation for doing so.
FREQUENTLY ASKED QUESTIONS
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How many parks does Portland Have?
- Portland has more than 200 parks totaling 11,677 acres
- Forest Park is Portlands largest park of 5,200 acres…with 80 miles of trails
- Mill Ends Park is Stumptown’s smallest park at .000072 acres.
- Note: My grandfather, Ormond Bean Sr. was a City of Portland Commissioner for 24 years. As Parks Commissioner he was a huge supporter of the Portland Zoo, and keeping the river greenway parks for the public wherever possible.
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Who owns Rose City Commercial Real Estate?
- Rick M. Bean, an Oregon Licensed Principal Broker with 20+ years of experience leasing, buying and selling commercial real estate. I have worked on projects in 5 states ranging from a few hundred thousand to many millions of dollars.
- What makes us different?
- When we are awarded a listing we stop looking for other listings until we have made 200 contacts with the people most likely to want that listing: owners, buyers, and sellers of similar assets.
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Why are you so enthusiastic about Equity Advantage?
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- Trust is paramount. Plus 1031 Exchanges require precision and attention to detail.
- A single misstep can cost hundreds of thousands…or millions of dollars of profits to become taxable. Even for experienced investors they are sometimes stressful…but for first timers this is magnified. David, and Tom…the whole organization has been wonderful.
- Two cases with first time exchanger clients of mine really stand out. The “Exchange Brother” team asked the right questions and found an additional million dollars of profits that could be tax sheltered. She told me: “What you and Tom did for me has expanded the possibilities for life.” The other example was a widow who sold at a loss. Equity Advantage suggested we consider a DST…Deleware Statutory Trust. They put us in touch with Robert Smith of Peregrine Private Capital [(503)241-4949, rs@peregrineprivatecapital.com ] who found us a DST that reduced the client’s taxable profit from the sale by over $800,000.
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Why would a Licensed Real Estate Broker Recommend using Peregrine Private Capital instead of selling the client a replacement property?
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- In one case my client had a loss on a sale. Without exchanging they would have had a $1,100,000 taxable as a long-term capital gain. By exchanging into the best replacement property they qualified for the tax exposure was reduced to $800,000…and Rose City Commercial Real Estate would have earned $30,000 in commissions.
- Robert Smith helped us get into a no coupon DST with an 85% LTV Loan that reduced her tax exposure to zero.
- As a fiduciary for my client it was incumbent on us to forgo the $30,000 fee we would have earned on the replacement property, in favor of saving her taxes on $800,000. (It is illegal to be paid a fee for selling DSTs and other securites without a FINRA administered licesne such as a Series 3, Series, 6 or Series 7 licenses. License requirements vary depending on the type of security offered.)
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CONTACT US:
We believe if you want to be a genius in 5 years, make wise investments in commercial real estate today. Contact Rose City Commercial Real Estate:
- Phone: (503)577-1034
- Email: rick@rosecitycre.com