By Meghan Hall
As Portland’s local economy continues to diversify, the time could be right for investors looking to break into the market. The Gerber Building, a fully-leased industrial asset southwest of Portland, has been posted for sale. Guidance pricing on the asset was not immediately available.
Located at 14200 SW72nd Ave., the asset was originally constructed in 1965 and totals 76,640 square feet, according to an offering memorandum obtained by The Registry. The building sits on five acres and also includes 233 parking stalls.
The building is being marketed on behalf of the seller by CBRE. As of this writing, CBRE had not yet returned The Registry’s request for comment.
Currently, the building is completely leased to Fiskars Brands Inc., a subsidiary of a global company based in Helsinki, Finland. Fiskars manufactures a variety of products for nearly a dozen brands and has a market cap of $1.68 billion. Fiskars acquired Gerber Legendary Blades, the original owner of the building in 1987. Gerber had constructed the asset in 1966 and designed the space to manufacture Gerber Knives. After Fiskars’ acquisition of the company, it continued to lease the building in order to manufacture Gerber-related products.
The lease for the property expires in December of 2025. According to the memorandum, the lease provides in-place cash returns that can be further elevated due to competitive debt markets.
The offering memorandum also notes that the asset offers investors downside protection and a discount to replacement cost. Currently, inflation and supply chain shortages are pushing industrial replacement costs up to $236 per square foot, meaning that a potential buyer can acquire the building at an appealing price relative to replacement costs. CBRE also notes that because of Portland’s Urban Growth Boundary and limited industrial land, there is a current shortage of supply. This shortage is coinciding with increased demand to e-commerce, on-shoring and increases in manufacturing.
Fundamentals for industrial properties are expected to continue to improve; Oxford Economics predicts that the local unemployment rate will drop to 3.2 percent by 2025. Local GDP growth is also expected to outperform the national average by 50 basis points. Additionally, industrial vacancy in and around southwest Portland sits at 3.2 percent. Rents are also reflective of the health of the market and have increased 43 percent since 2008. Combined, the fundamentals paint a positive picture of the Gerber Building and its market, and could give investors a good opportunity to break into Portland.