By Meghan Hall
Portland’s commercial office market has not been immune to the impacts of the COVID-19 pandemic. However, momentum continues to build, including in the recent sale of Hillsboro’s Tanasbourne Commerce Center. According to public records and sources familiar with the deal, the sale closed yesterday. Manulife U.S. REIT purchased the property for about $33.85 million.
The seller of the asset was an institutional real estate fund. The Fund had purchased the property in March of 2016 for $31.1 million from Meriwether Partners.
The three-building complex is located at 3300 NE 83rd Ave., 3175 NE Aloclek Dr., and 3188 NE Aloclek Dr. The buildings were constructed between 1986 and 1995 and range in size from 28,889 square feet to 54,500 square feet. The buildings also sit on about 12.5 acres of land.
The Tanasbourne Commerce Center is fully leased. Building A, the largest, is leased to Tokyo Electron; Building C, which is about 49,462 square feet, is leased to Kaiser. The smallest building is leased to Nike. All tenants have AA credit ratings, and leases are expected to expire in 2027, 2025 and 2026, respectively.
Over $7 million in building system upgrades and tenant improvements have occurred since 2017, including a $3.2 million renovation by Tokyo Electron. Nike also completed a $1 million improvement to their building after recently renewing their lease. With minimal capital improvements needed and current office replacement costs reaching $350 per square foot, the offering memorandum states that the property provides investors the opportunity to acquire the asset with solid pricing when compared to replacement costs.
The property’s new buyer, Manulife U.S. REIT, is based in Singapore. According to a previous statement by the company, its entrance into Portland is part of the organization’s strategy to increase its presence in high-tech, high growth markets. The REIT also announced that it was acquiring two properties in Phoenix, Ariz. for a combined $167.75 million. As of June 2021, the company’s portfolio spanned nine office properties in the United States with an aggregate net lettable area of 4.7 million square feet. Prior to its most recent acquisitions, Manulife owned assets in California, Washington D.C. and New Jersey.