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Deal Watch: Powerhouse investor dips into Portland — then flips

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Tuesday, May 01, 2007

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The biggest name on Wall Street bought into the Portland real estate market this year, but the deal didn’t have staying power. The Blackstone Group — whose March blockbuster IPO filing has finance junkies salivating — bought out Equity Office Partners in February for a stunning $39.2 billion. It was the largest private-equity buyout on record (we wonder how long that will hold up) and it suddenly made Blackstone the largest single owner of Portland-area office space with 4.1 million square feet of cubicle acreage.

With alarming speed Blackstone’s real-estate pros in New York slapped a $1 billion price tag on the 40 Portland-area properites — which includes pretty much all of Kruse Way in Lake Oswego, arguably the market’s hottest address — and found a buyer in San Francisco-based Shorenstein Properties. The sale closed in late March.

Gary Griff, a veteran office-space broker  at Cushman & Wakefield in Portland, says the speed of the transation was astounding. “They‘re handling real estate more like stocks and bonds.”

As for Shorenstein, now the area’s largest office landlord, Griff doesn’t expect to see much change.  “For the price they paid, they’ve got to be looking at this as a long-term investment.”

The portfolio includes three developable properties, including a parcel at the foot of Portland’s Hawthorne Bridge where Equity was knee-deep in plans to build a high-rise office tower.

— Christina Williams

MERGERS AND ACQUISITIONS

ANNOUNCED EXP. CLOSE BUYER (HQ STATE) / PARENT SELLER (HQ) / PARENT PRICE (TERMS)
30-Mar Q1 ‘07 Motorola (IL) Tut Systems (Lake Oswego) $39m cash
28-Mar Q3 ‘07 Columbia Banking System (WA) Town Center Bancorp (Portland) *$45.1m (42% cash + 58% stock)
26-Mar Q1 ‘07 Littler Mendelson, P.C. (CA) Amburgey & Rubin, P.C. (Portland) ND
20-Mar ND Integra Telecom (Portland) Eschelon Telecom (MN) $710m (80% cash + 20% assumed liabilities)
13-Mar Q1 ‘07 Knorr Foods Co. / Ajinomoto Co. (Japan) New Season Foods (Forest Grove) ND
13-Mar Q1 ‘07 Ascentium Corporation (WA) Centerlogic (Portland) ND
13-Mar Q1 ‘07 LTC Global Solutions (Medford) Senior Wealth Care Insurance Services (TX) ND
8-Mar Q2 ‘07 The Campbell Group (Portland) Menasha Forest Products Corporation (North Bend) ND (cash + assumed liabilities)
20-Feb Q1 ‘07 Bear Mountain Forest Products (Cascade Locks) Smokehouse, LLC (Hood River) / Luhr Jensen ND
19-Feb Q2 ‘07 Eschelon Telecom (MN) United Communications (Bend) $13.9m (cash)
16-Feb Q1 ‘07 Country Coach Holdings, LLC (Junction City ) / Riley Investment Management, LLC (CA) Country Coach Subsidiary (Junction City) / National R.V. Holdings (CA) $51.75m (75% cash + 25% assumed liabilities)
14-Feb Q2 ‘07 CheckFree Corporation (GA) Corillian Corporation (Portland) $245m (cash)
*Sell-side advisers: McAdams Wright & Ragen (financial); Foster Pepper LLP (legal). Buy-side advisers: D. A. Davidson & Co. (financial); Graham & Dunn PC (legal).



 

REAL ESTATE TRANSACTIONS

ANNOUNCED BUYER (HQ) REAL ESTATE (LOCATION) SELLER PRICE
28-Mar Illig Investment Co. LLC (CA) Two industrial/flex complexes (Milwaukie, Lake Oswego) The Realty Associates Fund VI LP $9.69m
28-Mar Shorenstein Properties (CA) 46 office properties (Portland) Blackstone Group $1b
28-Mar HR Salem Associates LLC (Salem) Industrial building (Salem) Neilsen Manufacturing $6.17m
28-Mar SolarWorld AG (Germany) Oregon Technology Center (Hillsboro) The Benaroya Company $40m
28-Mar Arrington Medical Center LLC & Oleson Medical Center LLC (WA) Columbia Medical Plaza building (Vancouver, WA) Northwest Columbia Medical Plaza $5.13m
28-Mar Nike (Beaverton) 125-acre land parcel (TN) Belz Enterprises ND
28-Feb BFP Leveton LLC (Beaverton) Industrial building (Tualatin) Tofle USA ND
28-Feb Trailblazer Foods (Portland) Dayton Building (Portland) SN Investment Properties LLC $3.83m

 

CAPITAL RAISING

ANNOUNCED COMPANY (HQ) / LEADERSHIP INVESTOR PRICE TERMS
29-Mar Calypte Biomedical Corporation (Lake Oswego) / Roger Gale, CEO International investors $5.2m Private placement (common stock + warrants)
26-Mar Wellpartner (Portland) / W. Michael Wright, CEO 3i and Buerk Dale Victor (co-leads); Integra Ventures; Mediphase Venture Partners; Greenwoods Capital $7.5m Series C equity
22-Mar Serveron Corporation (Hillsboro) / Bart Tichelman, CEO El Dorado Investment Company; Nth Power; Cascadia Pacific Management; Oregon Life Sciences LLC; others $5m Equity
19-Mar HemCon Medical Technologies (Portland) / John W. Morgan, president & CEO Camden Partners Holdings LLC; Torch Hill Partners $12m Equity
19-Mar Vesticon (Portland) / Dr. John Epley & Cathy Epley, co-founders National Institutes of Health $1.03m Phase II SBIR grant
14-Mar ProteoGenix (Portland) / Don Mooney, president & CEO NLV Partners (co-lead); TPG Growth (co-lead); Burrill & Company $20m Series B equity
6-Mar Platial (Portland) / Di-Ann Eisnor, co-founder & CEO KeyNote Ventures, Kleiner Perkins, Caufield & Byers, Omidyar Network, Ram Shriram, Ron Conway $2.4m Series A equity
2-Mar Nike (Beaverton) / Nick Athanasakos, VP-supply chain Illinois State Board of Investment $27.6m Sale-leaseback


List researched by Mark Druskoff

ND=Not disclosed

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