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Deal Watch: Industrial real estate is climbing, barely

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Friday, August 01, 2008

DURING THE MONTH of June, some of the largest commercial real estate deals in the Portland Metro and Vancouver area involved industrial buildings and land.

The biggest of which was the JLPS purchase of a 67,500-square-foot facility and 12.67 acres of land on Marine Drive along the Portland side of the Columbia River for $5.16 million. Frontier Missions was the seller.

Norm Eder, executive director of the regional industry group Manufacturing 21 Coalition and a partner at Portland’s Conkling Fiskum & McCormick, ventures one reason for the number of sales could be that the region’s manufacturing sector has remained relatively strong despite the current economy.

Jim Edwards, senior VP at Portland-based Birtcher Development and Investments, says that industrial real estate sales have indeed been improving since the first of the year. He lays out the recent historical industry trend: 2000 to 2004 was slow; 2005 to 2006 was good; 2007 was down dramatically. This year has seen some resident companies expand and some new companies move to the state, he says.

But lest anyone consider breaking out champagne at that news, Edwards puts it into perspective. “It’s a good sign, but I wouldn’t call it an indicator of a trend,” he says.

His pragmatism is based on a very familiar factor: the bottoming-out residential housing market. Based on what they manufacture, many companies in the industrial sector are directly or indirectly affected by what happens in the residential market. That, in turn, directly affects industrial real estate.

It’s the inverse of the apartment real estate market — two complexes were sold in the Portland metro area in June — which is seeing an upswing in demand as condo sales go down the toilet. But despite the differences between the two real estate markets, the ups and downs of each are driven by a very basic tenet, Edwards says.

“It’s supply and demand, again and again and again,” he says.

ABRAHAM HYATT

MERGERS AND ACQUISITIONS
PRICE EXP. CLOSE BUYER / PARENT (HQ) SELLER / PARENT (HQ) ANNOUNCED
$1.6B ND Cadence Design Systems (Wilsonville) Mentor Graphics (Wilsonville) 6/30
$47.1M (cash) ND Mentor Graphics Corporation (Wilsonville) Flomerics Group (England) 6/30
$31.15M (cash) Q2’08 Cascade Pacific Pulp / Wayzata Investment Partners (MN) pulp mill (Halsey) / Pope & Talbot (Portland) 6/20
$5.5M Q2’08 Oregon Health & Science University Pacific Oncology (Beaverton) 6/27
ND Q2’08 Western Division/ Universal Forest Products (MI) D-Stake Mill (McMinnville ) 6/10
ND Q2’08 Evraz NA (Portland )/ EVRAZ Group S.A. assets (Canada)/ IPSCO 6/13
ND Q2’08 Western Division/ Universal Forest Products (MI) Manufacturing Country (Independence) 6/10
ND (stock) Q3’08 Mt. Hood Beverage Co. (Portland) Columbia Distributing Co. (Portland); Gold River Distributing (Medford) 6/3


REAL ESTATE TRANSACTIONS
PRICE BUYER / PARENT (HQ) REAL ESTATE (LOCATION) / SELLER (HQ) ANNOUNCED
$12.1M Parkland Development office bldg (Portland) / Opus Northwest 5/30
$10.8M CHG CXA Troutdale retirement facility (Troutdale) / Cherry Park Plaza 6/11
$5.16M JLPS facility & 12.67 acres (Portland) / Frontier Missions Inc 6/30
$3M Wholesale Stone manufacturing facility (Tualatin) / Specht Properties 6/24
$3.5M multiple buyers* (Portland) Corporate Woods Apartments ( WA) / 745 Special Assets 6/17
$3.05M Willamette Capital Investments (West Linn) 2.67 acres (West Linn) / Willamette Christian Church of West Linn 6/30
$2.1M Olbricht Living Trust industrial flex bldg (WA) / Eastridge Associates 1 6/30
$1.8M 506 College Altamont Apartments (Portland) / Sing and Debbie Chan 6/30
$1.4M Expo industrial bldg (Portland) / Waddoups/Wagner Investments 6/17
$1.21M Housing Authorities Risk Retention Pool 2 office bldgs (Vancouver) / Jason and Martha Olin 6/24
$1.19M Bedrock Development office bldg (Beaverton ) / office space 6/4
ND Fisher Investments (CA) 120 acres (Camas) 6/4
ND Metro (Portland) 25 acres (Lake Oswego) 6/24


CAPITAL RAISING
PRICE (TYPE) COMPANY (HQ) / LEADERSHIP INVESTOR (HQ) ANNOUNCED
$344.67M (debt) PeaceHealth (Eugene)/ Alan Yordy, CEO public offering 6/25
$106.4M (debt) Lewis & Clark College (Portland)/ Thomas John Hochstettler, president public offering 6/17
$50M (equity) SpectraWatt (Hillsboro)/ Andrew B. Wilson, CEO Intel Capital/Intel (CA) 6/16
$40M (order) Digimarc Corp (Beaverton)/ Bruce Davis, chairman & CEO Georgia Department of Driver Services (GA) 6/2
$25.4M (contract) FLIR Systems (Portland)/ Earl R. Lewis, president and CEO Naval Surface Warfare Center (IN) 6/19
$23.1M (order) FLIR Systems (Portland)/ Earl R. Lewis, president and CEO U.S. Coast Guard 6/24
$10.6M (order) Northwest Pipe (Vancouver, WA)/ Brian W. Dunham, president & CEO undisclosed distributor (TX) 6/27
$6.7M (order) FLIR Systems, (Portland)/ Earl R. Lewis, president and CEO Colombian Ministry of Defense (Colombia) 6/26
$3M (order ) Danner subsidiary (Portland)/ Joseph P. Schneider, president & CEO U.S. Marine Corps 6/24
$1M (grant) Oregon Health Care Quality Corp (Portland)/ Dr. David Shute, director Robert Wood Johnson Foundation (NJ) 6/5

List researched by Mark Druskoff

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