New Cohousing Community Planned for Northwest Portland

New Cohousing Community Planned for Northwest Portland

This Fall, local developer Urban Development + Partners announced plans to build a new cohousing community in Northwest Portland. The proposed project, Flanders Cohousing, will be located on NW Flanders Street, near the intersection of NW 23rd Avenue. Northwest Portland is recognized as one of Portland's most walkable urban neighborhoods, with a Walk Score of 92, excellent transit and bike accessibility, and a wide range of restaurants, retail shops, grocery stores, breweries and other popular destinations. Flanders Cohousing will feature 21 for sale residential units, underground parking and common amenities chosen by member owners.

As part of the Design Advice Request (D.A.R.) process, UD+P presented the Flanders Cohousing preliminary site plan and renderings designed by architect Works Progress Architecture to the Historic Landmarks Commission in November. The project was well received. We will publish updates on the status of Flanders Cohousing in future issues of our cohousing e-newsletter.

For more information on Flanders Cohousing, contact Tina McNerthney via email at tina@udplp.com. 

 

 

 

 

Construction Progresses on Portland's 55+ Cohousing Community PDX Commons

Construction Progresses on Portland's 55+ Cohousing Community PDX Commons

We are excited to report that construction of PDX Commons, Portland's newest 55+ cohousing community, is progressing. Located at the intersection of SE 43rd and Belmont, in the close-in Sunnyside neighborhood, PDX Commons will feature 27 ownership units and a range of amenities, including a large community space with a commercial kitchen and dining areas, an interior courtyard and rooftop deck, a library and lounge area, a dedicated media and music room, a workshop and other community amenities. 

The building structure was completed in November and roofing is currently being installed. 

Members of the PDX Commons construction team installing the roof in late November.

Members of the PDX Commons construction team installing the roof in late November.

Construction of PDX Commons is on schedule with a target completion date of April 2017. 

To find out more about PDX Commons and membership opportunities, check out the PDX Commons web site and membership opportunities.

During a construction progress tour in October, PDX Commons members organized and participated in a scavenger hunt.

During a construction progress tour in October, PDX Commons members organized and participated in a scavenger hunt.

Coworking firm expanding across the river to the Central Eastside

Coworking firm expanding across the river to the Central Eastside

Portland Business Journal
By Jon Bell
February 19, 2016

The latest coworking space to hit the Central Eastside Industrial District will open its doors in a new 10-story building on Northeast Couch Street this summer.

CENTRL Office, which already has one location in the former General Electric building in the Pearl District, will occupy two floors of Slate, a 10-story building currently under construction near the Burnside Bridge at 321 N.E. Couch St.

Beam Development and Urban Development + Partners are the developers behind the building, which will also have retail and restaurant space on the ground floor, office space on the fourth floor and luxury apartments on the upper five floors.

“CENTRL Eastside will be the next evolution of how office and hospitality are coming together,” said Alex Hughes, co-founder of CENTRL Office, in a release. “Our current members have been clamoring for a place on the east side and we’ve found the perfect location and partnership at the Slate."

CENTRL Office will have 22,000 square feet of flexible workspace to offer to entrepreneurs, startups and creative professionals. Users will be able to opt for day passes, dedicated desks, private workrooms and open desks.

According to the release, shared services will include a coffee bar and café, a kitchen break room, copy room, showers, lockers, bike parking, fiber optic internet and underground parking.

Current CENTRL Office members include Portland Incubator Experiment, Zoom+, Oregon Angel Fund, Knoll Furniture, Tony’s Chocolonely, Urban Land Institute and Silicon Valley Bank.

“We are thrilled to have CENTRL Office as the anchor office tenant at the Slate," said Jonathan Malsin, principal of Beam Development, in the release. "CENTRL Office’s brand of collaborative workspace is the perfect complement to the mix of uses in the Slate and the dynamic entrepreneurial ecosystem evolving throughout the Central Eastside.”

Slate is just one of many projects that Beam and UD+P partners have brewing in the Central Eastside. Last September, Beam announced that it had purchased the Shleifer Furniture building at 509 S.E. Grand Ave. and plans to turn it into a hotel. And Brad Malsin, Beam's owner, said phase two of Block 75, which is where Slate is being built, could be the future site of a cross-laminated timber building that could hit 20 stories.

Framework Building is pretty ordinary. That's why it's so exciting

Framework Building is pretty ordinary. That's why it's so exciting

TreeHugger
By Lloyd Alter

February 11, 2016

The Wood Design Awards for 2016 have just been announced, and there is a lot to love and a lot to learn from them.  Previously we showed the elaborate and lovely Nest We Grow by Kengo Kuma; Portland's Framework building by Works Partnership Architecture is not quite as exciting but in some ways more important as a prototype and precedent.

© Works Partnership Architecture

© Works Partnership Architecture

This is a working office building, constructed much like warehouse buildings have been constructed in the Northwest for 150 years, with a straightforward, wide open plan.  In fact looking at the plan, there is absolutely nothing notable at all.  That's what's so interesting about it; these buildings worked well for all kinds of functions, from warehouses then to trendy startups now.

© Joshua Jay Elliott

The difference was that then they had lots of big timber to make columns and beams out of; now it's made of glue-laminated wood built up out of smaller second growth.  But note in the photo how the floor sheathing is on a 45 degree angle; that's how it was done historically, so that when the final flooring was nailed on perpendicular to the beams below it all became a tight sandwich that acted as a membrane holding it all together.  It's actually quite earthquake resistant, strong but light and flexible.

© Joshua Jay Elliott

© Joshua Jay Elliott

Another difference was that then it was covered in masonry, which was not so terrific in an earthquake.  They didn't have sprinkler systems either, so they needed the more fire-resistant exterior.  Now it is clad in lighter, more flexible cladding.  More transparent too; the architects liken it to "a ship in a bottle."

© Joshua Jay Elliott

© Joshua Jay Elliott

The award description puts it in a similar fashion:

It is this combination of convention and innovation that contributes to its success.  The concrete base is carved, rising up to hold the framework display.  Eighty percent of the wood is left exposed, and connections were custom designed to accentuate the framing system.  In addition to Douglas-fir glulam columns and beams, Framework includes several other mass timber products and dimension lumber framing and decking.  This 24,447-sf project was completed for a construction cost of $2.95 million.

© Joshua Jay Elliott

© Joshua Jay Elliott

I suspect that in a year or two it will be difficult for a building like this to win a wood award; they will be ubiquitous.  But for now, Works Partnership Architecture have set the precedent, and distilled it, the mix of old tech and planning with a new modern skin, to the essence.

Or as Leonard Cohen might say, a new skin for the old ceremony.

How To Invest in an Exuberant Market

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How To Invest in an Exuberant Market

By Eric Cress
March 14, 2016

At our heart, UD+P is a value investor.  With every investment we make, we must produce income, over time, that is worth more than what it cost us to make the investment.  Sticking to this simple notion is how we have been successful at ‘timing’ the market.

I think a great illustration of this is Forest and Garden Apartments, a project we bought near the top of the market during one of the most inflated real estate bubbles in history.  Granted, it was the only investment we made during that period, after looking at thousands of opportunities, but we were able to underwrite it.  How were we able to underwrite this acquisition at this time?  And how did it turn out?

Let’s start by stepping back and looking at the state of the market during that period.  I like to use the Green Street National Properties Index to look at national commercial property values over time.  The Green Street Index is similar to the Case-Schiller Index, except for commercial property.

Source: Green Street Advisors


Source: Green Street Advisors

As the index shows, the commercial property market has completely recovered from its Q1 2009 low, and now exceeds the peak values of 2006.  

I also like to characterize the state of the market based on how far values creep away from longterm nominal averages.  At times when property values are within +/- 15% of the longterm nominal average (blue line), I consider that we are in a nominal market.  Once property values exceed that +/- 15% window, I label the market exuberant.  When prices are below that window, I label the market distressed.  In 2006, we were in an exuberant market.  

We bought Forest and Garden apartments in the second quarter of 2008, while the market was still in an exuberant state.  We sold the property in Q2 2015, earning an annualized return over the holding period of 10.12%, and 156% return on investment.  How did we purchase a building during one of the most inflated real estate bubbles in history and still earn a respectable > 10% compounded return over a 7-year holding period?  Not by timing the market, but through solid underwriting.

Between second quarter 2008 through second quarter 2015, the overall real estate market appreciated in value by 24% whereas Forest and Garden appreciated in value by 39%.  If we place that sales price on the index, and then work backward to the purchase date and identify the point that represents 39% appreciation, we see that the purchase basis was close to the long-term nominal property values.  That is a price that will pass our underwriting and trigger a purchase.  However, at that time in the market, finding such a deal was a rare thing.  After reviewing thousands of investment opportunities, we found only one property during that period that met our investment criteria.  

Investment Principles that Apply in Today's Market

1.    Don't follow the crowd.

herd.jpg

 

Current buying opportunities are outside the purview of the herd of irrational buyers that are driving prices up.  As strategist Michael Porter implied, when you choose your strategy, you choose your competition.  In investing, you do not want to choose irrational buyers as your competition, because they drive up the price of assets.  We do not want to chase after the same assets that they are chasing after, so we look for different product types.  In today’s market, the irrational buyers are 1031 exchange buyers, who pay too much in order to avoid taxes, and institutional buyers who deploy capital in order to earn fees.

 

2.   Good deals tend to be off market.

This is really a derivative of the first principle, to stay away from the herd.  Good deals tend to be off market because widely marketed properties draw more irrational buyers, and in this market, there is always some buyer out there willing to pay too much.

 

3.   Leverage your competitive advantages.

UD+P has the competitive advantages of direct construction expertise and private capital.  Most developers tend to be architects, brokers, or finance people, not general contractors.  We happen to have the advantage that one of our principals, Avi Ben-Zaken, is a general contractor.  We leverage that expertise to purchase complex rehab projects and adaptive reuse projects such as Forest & Garden and American Brush, and we exercise ingenuity and experience to deliver them for low prices.  These are great projects, but they do not suit 1031 exchange buyers or institutional buyers, and thus avoid that competition.

We leverage our local knowledge through our understanding of local zoning codes and emerging market trends, as well as strong local brokerage relationships.  This allows us to build new industrial office property in the right areas. For example, Framework, which is actually built in an industrial zone where land is relatively cheap.

Finally, we leverage our private capital through flexible deal-making and engagements with landowners in joint-venture projects.  This is something that institutional investors do not do well, and that 1031 exchange buyers cannot do.  We can also do interesting things with programming — like building larger apartments that are condo-ready, sacrificing some dividend yield over the short term while earning a higher return over the long term.  This is something that short-term oriented institutional funds, who have to report quarterly, are loath to do.  And 1031 exchange buyers generally do not engage in new construction at all.

Was it brilliant insight or a crystal ball that led us to these strategies?  Not at all.  We simply look at a very large volume of opportunities.  Our Portland roots, and relationships, provide us with a lot of deal exposure.  We then filter those through our underwriting criteria, and we move forward aggressively on deals that work.  Naturally, we find that feasible projects, at any given time in the cycle, have similar characteristics for that time in the cycle.  This time is no different.

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