Home Commercial Tennessee Pension Fund Buys Industrial Asset in Portland for $43MM

Tennessee Pension Fund Buys Industrial Asset in Portland for $43MM

Portland, Tennessee Consolidated Retirement System, DWS, Pacific NW Properties, Beaverton, CBRE, Mattress Firm, Pentagon Technologies, Talco Fire Systems, 205 Airport Center

By Jon Peterson

The industrial market across the greater Pacific Northwest region continues to attract a slew of investors from across the country. One of them is the Tennessee Consolidated Retirement System, which paid $43 million to acquire the 292,117 square foot 205 Airport Center industrial business park in Portland, according to information provided by the pension fund. This transaction was completed by the pension fund as a separate account investment with real estate manager DWS based out of New York.

The seller of the property was Pacific NW Properties, a Beaverton, Ore.-based real estate investment and development firm. They were represented in the sale by the Portland office of CBRE. A person involved in the transaction was Paige Morgan, a senior vice president with the company. CBRE declined to comment when contacted for this story.

Tennessee Consolidated was attracted to the market’s strong fundamentals and opportunity for growth.“The Portland market continues to experience strong economic growth and the location of this property is very close to significant population density,” the fund stated in an email. The purchase price paid by the pension fund comes in at $147 per square foot, and the cap rate on the transaction was 4.8 percent, according to industry sources. This return is based on the properties current net operating income.

Pacific NW Properties had been the owner of the property for 13 years, and the price it paid for the asset at that time was $24 million. 205 Airport Center is located at 5800-6132 Northeast 112th Avenue. The asset is now 100 percent leased. The main tenants in the property include Mattress Firm, Pentagon Technologies and Talco Fire Systems.

The overall industrial market in Portland remains very tight. According to data complied by CBRE, the vacancy rate stood at 4.4 percent as of the end of 2020. Industrial rents have remained stable with no indications of any softening, yet.

Pacific NW Properties was formed in 1990. The company owns and operates a portfolio of 3.6 million square feet in a mixture of business parks, industrial and suburban office buildings that are located in the Portland/Vancouver metropolitan area.