The Montgomery Park office complex, a historic icon in Portland, Oregon, located at 2701 N.W. Vaughn St., has recently found itself in the midst of financial turmoil as a lender initiates foreclosure proceedings. The property, owned by Unico Properties and Partners Group, is facing a foreclosure auction scheduled for February 14, 2024.
The borrowers of the Montgomery Park property owe $149.7 million, according to a “notice of default and election to sell” filed with Multnomah County on September 29, according to a report in the Portland Business Journal. Partners Group, a global investment management firm, and Unico Properties jointly acquired the 18-acre Montgomery Park in 2019 for $255 million. Despite the significant investment, the property’s most recent valuation stands at $187.2 million, indicating a substantial decrease in value.
Montgomery Park is a 756,055-square-foot office complex, making it the third-largest office building in the Portland metropolitan area. Unico Properties also co-owns the city’s largest office building, the U.S. Bancorp Tower, further emphasizing the impact of this foreclosure on the local market.
The foreclosure proceedings are being led by the New York branch of Natixis, with the loan being foreclosed through a successor trustee, Craig Russillo of Schwabe, Williamson and Wyatt in Portland. As of August 31, the outstanding debt includes principal ($118.5 million), interest ($8.4 million), default interest ($4 million), deferred interest ($8.9 million), default interest on deferred interest ($4 million), and a late fee ($5.9 million).
The borrowers have the opportunity to prevent foreclosure by paying off the entire debt, except for the portion of the principal that would not be due had no default occurred. There are also other options available under their right to reinstate the trust deed, but they must act before the scheduled February 2024 auction.
Montgomery Park holds a special place in the history of Portland. Built in 1920, it originally served as a mail-order catalog warehouse for Montgomery Ward. In 1985, the Naito family’s Norcrest China Co. purchased the property for $13 million and, with the assistance of the city, embarked on a $30 million renovation project. Today, the property is listed on the National Register of Historic Places as the “Montgomery Ward & Company Building,” a testament to its historical significance in the city.
