By Jon Peterson
Northbrook, Ill.-based Allstate Corp. has placed on the market for sale an office building in Hillsboro, Oregon located at 1100 NE Compton Drive. Should the expected sale finalize, the potential price point could be around $150 per square foot, or approximately $9.5 million, according to sources familiar with the property details and the current market conditions. This pricing scenario would likely work for an owner/occupier, while pricing for an investor would likely be higher, the sources stated.
Allstate has hired CBRE’s Capital Markets team in the Pacific Northwest to lead the marketing efforts on the sale. The lead people on the team are Charles Safely, a senior vice president at the firm, and Paige Morgan, executive vice president. CBRE declined to comment when contacted for this story.
The property, which is also referred to as the 1100 Building, is a vacant asset today. The seller is open to providing an option of a partial sale/leaseback with the potential buyer, however, no specific details on this arrangement have been provided. Should the price point be reached, it would come in at well below replacement cost. Industry sources project that the replacement cost for suburban office assets in this region is around $350 per square foot.
The existing property is a roughly 64,000-square-foot office building that is situated on 3.55 acres of land. The building is a three-story complex that was first developed in 1986. Allstate has been the owner of the property for several years. The property is located in an area that does allow some mixed-use development. The asset also boasts a parking ratio of four spaces per 1,000 square feet. The building has many built-in amenities such as multiple outdoor deck areas, shower facilities, conference rooms and kitchen break areas.
The 1100 Building is located in the Hillsboro Enterprise Zone. This program offers full property tax abatement for a three to five-year period for eligible businesses on new qualified capital investments. The location of the property is transit adjacent; it is roughly a one-mile walk from the Quatama light rail station. Major highways are just minutes away proving quick access to downtown Portland.
Hillsboro remains a much sought-after suburban market in Portland. One of the reasons for this is its close proximity to the headquarters of Intel, Nike and Columbia Sportswear. The office assets in the Sunset Corridor/Hillsboro submarkets have been able to achieve strong rental rate growth of 55 percent since 2012, according to sources that track leasing information in the region. The Sunset Corridor is known as a supply-constrained submarket with no new spec office development outside of the owner/user sector since 2006.