Block 216 Tower - Ritz Hotel and Condos | 459'-11 1/2" | 35 floors | Complete

[2oh1]

I doubt the issue is taxes.

The units are priced way too high, and the location doesn't say "If I'm dropping a million, plus, THIS is exactly where I want to be!" It's downtown, but not in a neighborhood or a fun shopping district or a fun foodie district or by a magnificent park or, or, or. It's just... there. Near, but not. The building is top notch, but... is it a home for people dropping that kind of cash? Excluding the building itself, is there anything about that specific location that would make friends and family think "Man oh man, that's the good life."

Back in the late 90s, I lived at The Essex House apartments, on SW 3rd, between KOIN Tower and the financial buildings. It wasn't a neighborhood, but you'd step out the front door and it felt like success.

This location though? It's not far from The Pearl, but if you're spending that kind of money, wouldn't you rather BE in The Pearl? Nothing about this location says "Home!"

Even if they'd built another Eliot Tower with typical but nice market rate condos, wouldn't you rather buy in Eliot Tower? Or The Pearl? Or somewhere else entirely?

It takes more than four walls and an awesome lobby to create a home. I'm a hardcore urbanite. I live downtown. But this location? It's not bad, but not bad does not mean good, and at those prices, even good isn't much of a benchmark.

I wonder how the hotel is doing.

[subterranean]

They came on the market at the absolute worst time.

I volunteer with and advise several nonprofit low-income housing developers who had major issues with converting construction lending into perm loans because interest rates rose so substantially and destroyed their operating proformas. These projects necessarily have thinner margins given the people they serve, so they required bailouts from the state in the form of additional grants to reduce the lender risk in order to convert.

From the article, it sounds like this project was in a similar situation with rates that increased while under construction that made conversion impossible. This project is in even worse shape because its proforma included for-sale units whose potential purchasers also faced the prospect of historically terrible rates on large mortgages. It's just a bad time to finance real estate, and who wants to buy into a project that's future is unknown? Add to this the bottom falling out of the office market and it's just been the perfect storm.

I have to wonder if this one comes out of foreclosure with the for-sale properties converted to for-lease. One thing to note is that I think this is in an Enterprise Zone, and if the project qualified, it's exempt for 5 years from paying property taxes. Might help its bottom line for a bit to get people into the units with reduced rent incentives or to reduce debt if leased at market rates. Rental market still seems strong.

[colossalorder]

Multco taxes are absolutely part of the issue. I know someone involved in selling the units and they said explicitly that. Ask any realtor of high end homes in Multco. Ask anyone who makes $500k or more. Look at the stats of high earners leaving the county.

Not looking to restart the tax debate. I know thats another well-worn thread. Its just startling to me how many people here deny the reality ... and makes me realize that Portland's doom loop might just be inescapable.

[babs]

Originally Posted by 2oh1

I doubt the issue is taxes.

The units are priced way too high, and the location doesn't say "If I'm dropping a million, plus, THIS is exactly where I want to be!" It's downtown, but not in a neighborhood or a fun shopping district or a fun foodie district or by a magnificent park or, or, or. It's just... there. Near, but not. The building is top notch, but... is it a home for people dropping that kind of cash? Excluding the building itself, is there anything about that specific location that would make friends and family think "Man oh man, that's the good life."

Back in the late 90s, I lived at The Essex House apartments, on SW 3rd, between KOIN Tower and the financial buildings. It wasn't a neighborhood, but you'd step out the front door and it felt like success.

This location though? It's not far from The Pearl, but if you're spending that kind of money, wouldn't you rather BE in The Pearl? Nothing about this location says "Home!"

Even if they'd built another Eliot Tower with typical but nice market rate condos, wouldn't you rather buy in Eliot Tower? Or The Pearl? Or somewhere else entirely?

It takes more than four walls and an awesome lobby to create a home. I'm a hardcore urbanite. I live downtown. But this location? It's not bad, but not bad does not mean good, and at those prices, even good isn't much of a benchmark.

I wonder how the hotel is doing.

How is the hotel doing?

The hotel is underperforming, too, Ready Capital said. Its average revenue per available room was $188 in 2024, compared with $343.28, the average for all Ritz-Carlton hotels during the same period.

At $188 a night, it's going to be tough to maintain staffing and amenities required for a 5-star hotel. I hope they figure out a winning formula. Remember the Nines initially as soing $99/night until the economy improved and they built a reputation. Hope the same happens here.

[maccoinnich]

The Ritz Carlton having a Revenue Per Available Room (RevPAR) of $188 isn't directly comparable to The Nines offering stays for $99 when they opened though. Rates at the Ritz consistently start at over $500/night for a basic room, and RevPAR is always going to be lower than the Average Daily Rate (because even in the best performing hotel, you don't fill every room, every night). I'm sure they want the RevPAR to be higher, but from the earnings call we don't know what their target is.

[PhillyPDX]

Originally Posted by babs

How is the hotel doing?

The hotel is underperforming, too, Ready Capital said. Its average revenue per available room was $188 in 2024, compared with $343.28, the average for all Ritz-Carlton hotels during the same period.

At $188 a night, it's going to be tough to maintain staffing and amenities required for a 5-star hotel. I hope they figure out a winning formula. Remember the Nines initially as soing $99/night until the economy improved and they built a reputation. Hope the same happens here.

As someone not in this industry, is it something Marriott could eventually downgrade, say changing to a JW Mariott or W Hotel? Neither of which is in Portland yet either. So the room rates get closer to expectations for the brand.

But with the Ritz brand condos also in the building, that could get complicated.

[maccoinnich]

It's unlikely that Marriott operates the hotel; most likely the owners just have a franchise agreement, and if they were to reflag, it wouldn't necessarily have to be within the Marriott family of brands. (A local example would be the Radisson Red in the Broadway Tower renaming to the Hotel Vance, and reflagging as Marriott Tribute Portfolio hotel.) But, again, we don't really know enough from the earnings call alone to know whether that's something that would even be considered.

[babs]

Originally Posted by PhillyPDX

As someone not in this industry, is it something Marriott could eventually downgrade, say changing to a JW Mariott or W Hotel? Neither of which is in Portland yet either. So the room rates get closer to expectations for the brand.

But with the Ritz brand condos also in the building, that could get complicated.

I wonder if the condo units go into foreclosure and the condos get repriced or auctioned, what happens with the Ritz-Carlton Residences branding. I imagine a lot of legal issues could be upcoming.

I would hate to lose Portland's only 5-star hotel. That would be a black eye to downgrade.

[PhillyPDX]

Originally Posted by maccoinnich

It's unlikely that Marriott operates the hotel; most likely the owners just have a franchise agreement, and if they were to reflag, it wouldn't necessarily have to be within the Marriott family of brands. (A local example would be the Radisson Red in the Broadway Tower renaming to the Hotel Vance, and reflagging as Marriott Tribute Portfolio hotel.) But, again, we don't really know enough from the earnings call alone to know whether that's something that would even be considered.

Oh ok. News to me, didn’t even realize some chains are corporate operated vs franchised.

[babs]

Originally Posted by PhillyPDX

Oh ok. News to me, didn’t even realize some chains are corporate operated vs franchised.

I think 99.9% of major hotel chains are franchised. Hilton and Marriott used to be a major owners and operators of Hotels. Sometime in the 80s and 90s, they discovered they could grow faster and make more money if REIT owned the hotels and they sat back and collected franchising fees. Their money isn't tied up in real estate so they can grow much faster by using someone else's money. Interesting business model.

[DMH]

Originally Posted by babs

I think 99.9% of major hotel chains are franchised. Hilton and Marriott used to be a major owners and operators of Hotels. Sometime in the 80s and 90s, they discovered they could grow faster and make more money if REIT owned the hotels and they sat back and collected franchising fees. Their money isn't tied up in real estate so they can grow much faster by using someone else's money. Interesting business model.

Isn't that what the Trump brand has been doing?

[subterranean]

Portland's newest skyscraper is $85M underwater after catastrophic setbacks, lender says
The Seattle Times, April 9, 2025

"The 35-story tower, intended to revitalize Portland's skyline, has faced numerous delays and budget overruns, leading to its current financial predicament."

Source: The Seattle Times

[colossalorder]

I heard that the new owner of the Ritz (Ready Capital foreclosed on it this summer) is preparing to bring the condo's back on the market at reduced prices. You may have noticed that they are no longer listed for sale on rmls, zillow, etc. (There is one secondary sale available right now).

I don't know anything about the timing or the size of the discount. They certainly priced them way too high relative to comps at first. You'd imagine there would have to be some attractive discount to get people to buy into a building in foreclosure.

[PhillyPDX]

Originally Posted by colossalorder

I heard that the new owner of the Ritz (Ready Capital foreclosed on it this summer) is preparing to bring the condo's back on the market at reduced prices. You may have noticed that they are no longer listed for sale on rmls, zillow, etc. (There is one secondary sale available right now).

I don't know anything about the timing or the size of the discount. They certainly priced them way too high relative to comps at first. You'd imagine there would have to be some attractive discount to get people to buy into a building in foreclosure.

This will be interesting to see. Hopefully good news.

I assume the price was what luxury requires, right? Price itself justifies the luxury?

It's not in foreclosure, right? The lender took ownership I think. It does make me wonder, who controls the building? A condo board, someone other entity? How does that work for say, common building repairs?

[mhays]

Typically a condo board doesn't gain control (and liability) until they hit 75% sold or whatever the local requirement is. The developer is in control until then, and can't charge condo dues.

I bought my condo in 2008 just before the mortgage world ended, and didn't have to pay dues until 2010 for this reason (and was underwater for a while).

But what happens when the development entity runs out of money....?

[PhillyPDX]

Originally Posted by mhays

Typically a condo board doesn't gain control (and liability) until they hit 75% sold or whatever the local requirement is. The developer is in control until then, and can't charge condo dues.

I bought my condo in 2008 just before the mortgage world ended, and didn't have to pay dues until 2010 for this reason (and was underwater for a while).

But what happens when the development entity runs out of money....?

Ok. Didn't realize that. And once this happens here, the hotel would be part of the condo association like any other building, basing fees based on square footage for common usages?

[mhays]

That's how it works with the couple retailers in my building. They pay dues for their own space and common aspects just like the residents.

I wonder if the hotel might have a more complicated deal. It wouldn't do for either side to dominate the board and make life potentially hell for the other. At minimum the rules must be written to protect each group from the tyranny of the majority.

[PhillyPDX]

Originally Posted by mhays

That's how it works with the couple retailers in my building. They pay dues for their own space and common aspects just like the residents.

I wonder if the hotel might have a more complicated deal. It wouldn't do for either side to dominate the board and make life potentially hell for the other. At minimum the rules must be written to protect each group from the tyranny of the majority.

Things I don't think about it terms of condos having never lived in one. Thanks for the insight.

[colossalorder]

Ritz condo's now re-listed at discounted prices. Lets see if they found a market clearing price.

[PhillyPDX]

Originally Posted by colossalorder

Ritz condo's now re-listed at discounted prices. Lets see if they found a market clearing price.

Ha! Just did a quick search to see prices. First link from "Realty Portland", not something you see everyday in same ad ("Ritz-Carlton" and "fire sale"):


Ritz-Carlton Residences

Ritz-Carlton Condos of Portland

50%+ OFF Starting in 2026

This doesn’t happen often.


Pricing at the Ritz-Carlton Residences, Portland will be strategically reset in Early 2026 by roughly 50% or more, creating a rare buying opportunity in one of the city’s most iconic luxury towers.