Pacific Northwest development company will proceed with creating an urban village in Portland’s booming Eastside
PORTLAND – (Sept. 7, 2017) – A joint venture between Security Properties Development Company and Beijing Jade Investment Group closed late yesterday on the purchase of the PepsiCo Distribution Center located between NE 25th and NE 27th avenues, and NE Holladay St. and NE Sandy Blvd. The companies plan to redevelop the 5-acre urban property under the City of Portland’s “Large Site Master Plan” designation, offering market-rate and affordable housing, commercial-office, retail and other product types over the next several years.
“We look forward to creating Portland’s next dynamic urban village through the City’s newly adopted 2035 Comprehensive Plan,” said John Marasco, chief development officer at Security Properties (SP), which recently brought to market the Peloton Apartments project in Portland’s North Williams District.
“Soon we’ll begin outreach to the Kern’s Neighborhood Association and various other local stakeholders, part of a valuable community engagement process that will help us to create the best possible mixed-use project for this community,” added Marasco.
Security Properties, which will serve as master developer of the property, is in the process of interviewing architects to begin initial concepts for the multi-phased redevelopment project. Beijing Jade Investment Group will serve as Security Properties’ initial capital partner on the redevelopment. SP and Jade have been in discussions over the past two years on potential collaborations — specifically the creation of mixed-use, pedestrian-friendly and transit-oriented communities in the Portland area.
“We’re excited for this partnership as well as the opportunity to create a thoughtful, amenity-rich community that further contributes to Portland’s urban development,” said Xiaorong Zhai, vice president at Beijing Jade Investment Group.
Since 1962, the PepsiCo facility has stood as an example of “fifties modern” architecture among the car dealerships and auto shops that have historically characterized the Sandy Blvd. commercial corridor. More recently, the area has become an increasingly attractive place to live and work. The street itself extends from inner southeast Portland to up along the Columbia River before ending in the outskirts of northeast Portland near Troutdale – representing an easy drive into the city or out to the Columbia River Gorge. Additionally, the Sandy corridor offers a host of amenities from the nearby New Seasons, Fred Meyer, and hip food cart pods to the historic Irvington Neighborhood and alternative modes of transportation, including a bike boulevard on NE 28th Avenue.
“This site is central to everything that makes Portland such a special place to live, work and recreate,” said Gus Baum, director of development at SP. “We see Sandy becoming Portland’s next great boulevard, and this Large Site Master Plan will play a significant role in its continued transformation.”
Security Properties is working collaboratively with PepsiCo on the company’s future relocation. In the interim, PepsiCo will lease-back its office and industrial space from SP as it identifies a new location for its offices and distribution facilities. Late last month, Security Properties held an early assistance meeting with the Portland Bureau of Development Services to discuss zoning rules at the site. The massive urban property constitutes a “superblock” encompassing over four city blocks that have generally been used for industrial or office space, while the surrounding sites are zoned for mixed-use development.
The acquisition and eventual redevelopment of the PepsiCo building follows in the footsteps of several other smaller new construction and renovation projects along the Sandy corridor. “The area is ripe for more density, particularly workforce and affordable housing, as well as new commercial space for people to work and shop,” added Baum.
Security Properties is not new to Portland. The Sandy Boulevard acquisition will add to the firm’s already significant Portland portfolio that includes more than 1,000 conventional residential units. The PepsiCo property redevelopment comes on the heels of the recently completed Peloton Apartments in the North Williams Corridor and Heartline currently under construction in the central Pearl District. Planned for delivery in early 2018, Heartline includes a 218-unit high rise apartment building together with a five-story brick and steel commercial building with 15,000 square feet of commercial space on the ground floor and 60,000 square feet of office space above. In addition, SP together with Seattle Based Urban Renaissance Group acquired the Oregonian Press Blocks, where they have received design approval for a 250-foot tall residential tower in Goose Hollow that will have approximately 340 apartments and a 140,000-square foot office building with ground-floor retail directly across from Providence Park. The Press Blocks are slated to break ground in Q1 2018.
“We are looking to continue our investment in Portland with dynamic, vibrant mixed-use communities that are sensitive to existing neighborhoods but bring something new and exciting to the community,” added Marasco. “We believe the demand for quality mixed-use space in Portland is enormous, and this development will provide an opportunity to enhance the area through the creation of a true urban village.”
About Security Properties
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For more than 48 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 83,000 residential units at a cost of over $5.7 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com