Eleven West | 291' | 24 floors | Complete

[subterranean]

My old hood is poppin'. I like it.

[maccoinnich]

Returning for a second hearing October 19th.

[maccoinnich]

Revised Staff Report, which recommends approval.

[maccoinnich]

11 West was approved yesterday.

[QAtheSky]

This building got through with remarkably little fuss. A surprise, to be sure, but a welcome one. I'm not hugely excited by the design, but I don't mind it either. It feels like a slightly more interesting take on a glass tower than the Indigo next door.

With two hotels planned a block away this part of the neighborhood is going be absolutely bustling.

[ORNative]

It is amazing how some projects can take months to get through the process while others take years. Broadway Tower sailed through as well. Hopefully permitting will be a quick process and we will see a ground breaking in six months or so

[maccoinnich]

This is about a whole bunch of projects, but has the most new information about Eleven West so I'm posting it here:

Goodmans have projects aplenty in progress



In the past few years, a growing influx of new tech workers and residents has helped transform the city of Portland.

This population growth and demographic change has, in part, allowed the Goodman family and its Downtown Development Group to begin to put into action a series of development moves, including its ambitious Ankeny Blocks plan. It calls for 11 new buildings, including five high-rises, on downtown properties near the Willamette River between Washington and Burnside streets. One of the first projects is 230 Ash – a modest, six-story mixed-use building, but much more is planned by Downtown Development Group – one of the oldest development firms in Portland.

For instance, preliminary plans have been formed for Downtown Development Group to work with a local, unidentified engineering firm on a net-zero building at the intersection of Southwest First Avenue and Pine Street.

“It will be like the Bullitt Center in Seattle,” Downtown Development Group co-President Gregory Goodman said, referring to the commercial building that opened in 2013 and was certified as a “living building” by the International Living Future Institute. The six-story, 52,000-square-foot structure uses solar panels and other green features to produce more electricity than it uses over the course of a calendar year.

...continues at the DJC (temporarily unlocked).

[johnliu]

Really interesting quote from Mark Goodman.

"Market conditions may soon change, he noted. But with interest rates still at historic lows, this may not be quite so important to investors and developers. This is, in part, what gives continuing impetus to projects like Eleven West.
“You have to acknowledge we’re toward the end of a development cycle,” he said. “But also key is that the cost of money is still historically cheap. Where you look at it from our perspective, where you look at holding it for many cycles, it’s more important to have low cost of funds than to directly develop into the right cycle.”

They have the ability to take a very long view, as shown by having held all those surface parking lots for decades.

Other developers and investors don't won't or can't.

This also makes me wonder anew why AAT, an institutional investor with the ability to take a long but not quite as long view, hasn't so far been able to make Oregon Square work. Class A rents downtown are higher than in Lloyd but the gap is closing with vacancy rates are actually lower in Lloyd. I suppose the demand for luxury apartments may be higher downtown. Thoughts?

[babs]

Originally Posted by johnliu

Really interesting quote from Mark Goodman.

"Market conditions may soon change, he noted. But with interest rates still at historic lows, this may not be quite so important to investors and developers. This is, in part, what gives continuing impetus to projects like Eleven West.
“You have to acknowledge we’re toward the end of a development cycle,” he said. “But also key is that the cost of money is still historically cheap. Where you look at it from our perspective, where you look at holding it for many cycles, it’s more important to have low cost of funds than to directly develop into the right cycle.”

They have the ability to take a very long view, as shown by having held all those surface parking lots for decades.

Other developers and investors don't won't or can't.

This also makes me wonder anew why AAT, an institutional investor with the ability to take a long but not quite as long view, hasn't so far been able to make Oregon Square work. Class A rents downtown are higher than in Lloyd but the gap is closing with vacancy rates are actually lower in Lloyd. I suppose the demand for luxury apartments may be higher downtown. Thoughts?

Wonder if it would work better as condos rather than apartments?

[urbanlife]

Originally Posted by babs

Wonder if it would work better as condos rather than apartments?

The issue with condos is the market crash in 2008, banks made the regulations for new condo projects much harder. Before, all they had to do is show there was a market for condo buyers, but now they have to have most of the building presold before bank loans are approved. It is much easier to build an apartment building with plans to one day convert it to condos.

Also I didn't realize the Goodman family had a website up for the Ankeny Blocks plan.
http://www.theankenyblocks.com/

[Rhome]

Not suggesting any ill intent, but none of the illustrations for the Ankeny Blocks project seem to show Park Avenue West. How can you miss a 500-ft building? Perhaps it is a reflection of just how old the illustrations are.

[ORNative]

Park Avenue West was developed by a different developer, TMT Development, and was completed (or nearly so) before Ankeny Blocks was announced by the Goodmans.

[soleri]

Originally Posted by johnliu

This also makes me wonder anew why AAT, an institutional investor with the ability to take a long but not quite as long view, hasn't so far been able to make Oregon Square work. Class A rents downtown are higher than in Lloyd but the gap is closing with vacancy rates are actually lower in Lloyd. I suppose the demand for luxury apartments may be higher downtown. Thoughts?

AAT's website offers a few hints about their investment philosophy: https://www.americanassetstrust.com/company
If I could distill it in a sentence or two, it would be asset performance must be reevaluated according to current market conditions. They're cautious because they're not offloading their developments/acquistions. As their stock price shows, this year and the last quarter have not been stellar.

They have their quarterly conference call tomorrow morning at 8am. Their webcast can be accessed at https://edge.media-server.com/m6/p/kuyrq23g

[pdxtraveler]

With all the talk of other projects in the neighborhood, any word on this?

[maccoinnich]

From a DJC article last week:

The Goodman family is also considering forming an opportunity zone fund with other investors to develop the Eleven West tower, said Greg Goodman, co-president of Downtown Development Group.

An opportunity zone fund will be used to develop Eleven West, and another one will be used at Downtown Development Group’s property at Southwest Second Avenue and Pine Street, Goodman said. Eleven West received design review approval in December 2017 but ground has not been broken yet.

Downtown Development Group will own half the opportunity fund at Eleven West, Goodman said. The Goodmans have hired Newmark Knight Frank to find and evaluate potential joint-venture partners.

“11-W will get capitalized,” Goodman said. “It will get done.”

The article is behind a paywall, but that's the part relevant to 11W.

[pdxtraveler]

Originally Posted by maccoinnich

From a DJC article last week:



The article is behind a paywall, but that's the part relevant to 11W.

Thanks for the update!

[Derek]

I'm assuming this thing is dead?

[pdxsg34]

Originally Posted by Derek

I'm assuming this thing is dead?

From DJC's recent article about Opportunity Zones...

The Goodman family’s Downtown Development Group is working to form single-asset funds for both the Eleven West mixed-use tower at Southwest 11th Avenue and Washington Street, and the PAE Living Building at Southwest Second Avenue and Pine Street, co-President Greg Goodman said.

The Eleven West project will involve an opportunity zone fund in a 50-50 arrangement with a partner, said Goodman, who declined to identify the other investor. Construction of the project, which won Design Commission approval in December 2017, has not begun yet.

Eleven West vested before inclusionary housing rules required developers to provide below-market-rate multifamily units. The project wouldn’t be financially possible today, Goodman said.

“There hasn’t been a new high-rise in downtown Portland in 28 months with inclusionary housing,” he said. “While the opportunity zoning is good, it doesn’t offset the inclusionary zoning on the high-rise. The inclusionary zoning has shut that market down.”

[urbanlife]

Originally Posted by pdxsg34

From DJC's recent article about Opportunity Zones...

I still think it is too early to tell the effects of the inclusionary zoning, with the amount of buildings approved before it went in, that flux of supply needs to be absorbed before developers begin to decide if the demand for more housing is work it. I highly doubt this new law for developers will put an end to new buildings.

[AdamUrbanist]

Originally Posted by urbanlife

I still think it is too early to tell the effects of the inclusionary zoning, with the amount of buildings approved before it went in, that flux of supply needs to be absorbed before developers begin to decide if the demand for more housing is work it. I highly doubt this new law for developers will put an end to new buildings.

I don't think the argument against inclusionary zoning is that it will stop all new construction. Just that it will mean less new housing than otherwise would have been built. If that is in fact the result, then the increased upward pressure on prices is likely to counteract any benefit the policy is providing.

The other possibility is that rather than suppressing new construction inclusionary zoning simply displaces it into surrounding suburban municipalities.