Apartment boom

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Articles - February 2014
Tuesday, January 21, 2014

In 2006 Eric Cress and his business partners, Steven Pontes and Avi Ben-Zaken, decided the Bay Area was no longer where they wanted to focus their business or personal lives. Working essentially as investment managers, the three liked the Portland lifestyle, as well as the potential for infill development in the city’s neighborhoods. So they moved north and founded Urban Development Partners to take advantage of both — and Southeast Division Street was transformed because of it.

The downturn made it tough to invest too widely, and Pontes passed away in 2008 after battling cancer. “It was kind of a nightmare,” Cress says. But when 2009 came around, UDP was ready to move forward. They’d been eyeballing Southeast Division for a couple years, even picking up properties. The street was home to plenty of vacant property in part, Cress says, because it was once slated to be condemned or otherwise folded into the failed Mount Hood Highway project from the 1970s. After that project met its demise, Division was left to linger.

“The street just needed some time,” Cress says.

For UDP, the time came in 2009 with the redevelopment of the Reliable Parts building at 31st and Division into a mixed-use building of apartments over ground-floor retail, including the very popular Sunshine Tavern. UDP and others have since developed more apartment projects along Division that have quickly transformed the street from a sleepy, gritty thoroughfare into one of the liveliest retail districts on the inner Eastside.

Where once a local band jammed in the upstairs of a rental house on Southeast 38th and Division, now a modern four-story building houses residents in 24 units over a Little Big Burger restaurant. City favorites Salt & Straw and Saint Honoré both opened new locations in a mixed-use building on Division last summer. Additional UDP projects are springing up at 3330 and 3360 Southeast Division, and other developers are building at 33rd, 44th and 48th streets, activity that’s snarling traffic and further overhauling the area. 

0214 APT2
A 30-unit complex on Southeast Division street
// Photo by Adam Bacher

Apartments are helping to completely change other established areas of the city as well. The Prescott, a $29 million, 155-unit apartment building with ground-floor retail, opened in December at North Interstate and Prescott, and the same company — Washington’s Sierra Construction — will build the Cook Street Apartments, a 206-unit development with 15,000 square feet of retail space in the historically African-American North Williams/Vancouver corridor.

That site is the old Hostess bakery property, which for years sat abandoned. New Seasons’ newest store opened in the area recently, and other retail and housing projects are helping the area morph from one of near urban blight to a sought-after, gentrified neighborhood. 

The Prescott and its monthly rents of between $850 and $1,900 target hip, urban 25- to 35-year-olds and tech-savvy young professionals who’ve been priced out of the Pearl District, says Brendan Lawrence, development manager for Sierra. “I agree this will sway the direction of the neighborhood going forward.”

E. John, a third-generation, family-owned development company in Vancouver, Wash., is another developer reshaping another Portland neighborhood in the coming years. Long focused on homebuilding and then commercial real estate, the company broadened into the multifamily market three years ago. Since then, the company has built three new projects in Northwest Portland alone, adding 156 units total. The most recent one is an $8 million, 40-unit building called Sawyer’s Row, which sits on Northwest Raleigh at the edge of a sleepy industrial district full of asphalt parking lots and the constant rumble of Interstate 405.

That character will change soon. C.E. John is the master developer for much of the 20 or so acres known as the Con-way property, which is set to become another entirely new neighborhood with a mix of residential, retail and commercial space over the next decade. Though smaller in scale than the Pearl District, the buildout of the entire Con-way property in the coming years will reshape an entire area of the city much the way the revitalization of the Pearl did — by creating a residential community in an area historically fit for industry, warehouses and parking.

C.E. John planned to kick off the $40 million development in January with construction of a New Seasons grocery store out of an old warehouse in what’s to be called the Slabtown Marketplace, and a six-story, 113-unit apartment building called the L.L. Hawkins at Northwest 21st and Raleigh. 

“It will be an interesting mix of old and new there,” says Thomas DiChiara, senior vice president of development for C.E. John, “but it’ll really set the stage for the entire district there.”



 

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