Condos in the Downtown Portland
Is The Pearl District Losing its Luster?

Over the past three years, one of the Northwest’s great real estate successes has been condo development in downtown Portland. Housing development throughout the downtown area is still going at breakneck speed, but developers are still looking over their shoulder for the slow down.

by Lucy Bodilly

Sales for condo projects in downtown Portland sizzled over the past three years, and may be slowing down, with no affect on the amount of new units being built in the area.

In late January, the day before Hoyt Street Properties, Portland, opened sales on The Encore, Tiffany Sweitzer, president of the company was tentative. “When we opened sales for The Metropolitan (also located in the Pearl District) we had about 4,500 inquiries on our website about the project. For The Encore, we only have 1,500.”

“We are priced at the higher end of the market.  I haven’t really noticed too much of a slowdown,” Sweitzer said. “November and December were slower, but maybe that’s because of the holidays.”

Andersen Construction, Portland, is the contractor on the Encore 16-story project.

Prices and the number of condos sold peaked in March 2006, with the median price of $299,900 and 481 units sold. January 2007 statistics, the latest available, show a lower median price of $251,000 and 343 units sold, according to statistics from the BrokerMetrics, an affiliate of the Portland Multiple Listing Service.  In February 2005, the all time low, the median selling price was $212,500 with 149 units sold.

No matter the price or the exact location, Portland condos all have some common elements.  LEED ratings, a push toward livability in the city center, and public amenities such as transportation and open space are the norm. These factors and a growing population are taking some of the risk out of condo development.

Here is a look at some of the projects now under construction.

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The Encore

The 16 story building will include a variety of unit sizes from 600 to 3,000-sq-ft. Six units on the top floors will be penthouses. Next to a three-acre park, the design allows as many residents as possible to have views of the green space below.

Even the marketing for the project is focusing on green space. The slogan Ride, Relax, Repeat, comes with an offer of a free bicycle, pair of running shoes, or bus pass with every sold condo.

“We are selling the whole neighborhood,” Sweitzer says. Located in the northernmost reaches of the Pearl District, Hoyt hopes to build out its entire site, which was formerly a rail yard.

While Hoyt struggles to create a neighborhood feel, statistics for the essential component – families with children - are sketchy. Of the residents in Hoyt buildings, 28% have children living with them full time and 10% children part-time. “The question is not whether there are children in the area, it’s whether the families with children will continue to live in the city,”  Sweitzer says.

The Casey

Work at The Casey, also in the Pearl, shows just how competitive the condo market is becoming. In an effort to complete its project before its competitors, Hoffman Construction, Portland is using “top down” construction.

The process sounds downright scary. To cut the construction schedule by several months, Hoffman bypassed the traditional, excavation-foundation-tower sequence.

Instead the company drilled piers into the ground and built a platform over them. The piers support the vertical load, while construction of the tower takes place.

At the same time, contractors are excavating for the three-level parking garage.

Excavation contractors work in 20-ft. deep sections before that area needs to be stabilized. KPFF, designed the system and Coffman Co., Portland,  is the excavation contractor.

Air quality is a major concern with top down construction. At The Casey, four excavators are running underground all the time, and bringing excavated fill to the same corner of the site, where a large excavator dumps it into trucks. Coffman worked with a mechanical engineering firm to design a system that diffuses carbon monoxide in the small space, making the air almost twice as clean as the OSHA standard.

 “We’ve had some issues, but it’s basically going well,” said Hoffman project manager Stephanie Coyle. “The challenge is that once you start top down, you can’t do much if the soils aren’t as you expected them to be.”

The system works best when the excavation is between three to four floors below grade.  After that it is probably faster to do an open cut, Coyle said.

The Strand

Two towers of The Strand at River Place are now occupied, showing that sales in some projects are going well. The $95 million project, close to the Willamette River, is about 85 percent sold, said Bhavna Kumar, project manager for interiors for Walsh Construction, Portland. 

For Kumar, coordinating the details of the project has been the toughest part, as befitting a person who in charge of 255-separate units or what amounts to 255 tenant improvement projects.

With something for everyone, the building has 20 different floor plans.

“These are very high end condos,” Kumar said. The interiors include Bosch appliances, three different floor and cabinet finishes and some ebony accents. “It is quite a feat to coordinate all the finishes, especially with granite and flooring coming from China, windows from Canada and heat pumps in every unit.

The building has a mix of unit types also.  The ground floor units and top floor penthouses are all multi-story.

The final portion of the project will be turned over to the owner July 2, 2007.