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Door open for 'second downtown'?
Wednesday, January 11, 2006
By GRETCHEN FEHRENBACHER Columbian staff writer
Prospects of a new owner for -Columbia Business Center on the Vancouver waterfront are stirring discussion about the future of the property, prized as a home to industry but also for its potential for higher density redevelopment that one expert said could be a "second downtown."
The news that Schnitzer Investment Corp. would sell the 220-acre business park is widely viewed as an opportunity to add a new element to Vancouver's revitalization. The center's 2.4 million square feet of building space makes it Clark County's largest business park and second in size in the metropolitan area only to Rivergate Industrial District in Portland.
Eric Fuller, of Eric Fuller & Associates commercial real estate services in Vancouver, said Tuesday it is critical that the jobs at Columbia Business Center on Southeast Columbia Way, east of Columbia House Boulevard, be saved. But, he added, the jobs could be moved -elsewhere, leaving the business center free for redevelopment as high-density residential, offices and retail.
He said one possible formula would have the Port of Vancouver buy the business park and relocate the jobs to an alternative site such as Columbia Gateway in west Vancouver.
"The community retains the jobs and gets a higher and better use of that prime waterfront property -- that is -Vancouver's second downtown," Fuller said.
Schnitzer Investment has retained Holliday Fenoglio Fowler to market the property nationwide. Seller and broker say the market will dictate the price, depending on what the buyer decides to do with it. -Holliday Fenoglio Fowler is based in Texas, but its New York office is handling the -Vancouver property.
Andrew Scandalios, one of the brokers marketing the property, said that because of the property's size and value, the buyer would probably be an institutional investor.
He described it as a "very unique" site, based on its size, location on the waterfront, and proximity to state Highway 14 and interstates 5 and 205.
Schnitzer Investment, a -privately owned real estate -investment company with ties to the Schnitzer steel family, bought the Vancouver property in 1997 for $62.2 million.
Roger Qualman of Norris Beggs & Simpson and Fuller speculates that the business center could be valued at more than $100 million in today's market.
The timing of the possible sale may be partially driven by rising interest rates, which could cause property values to decline as the cost of buying real estate goes up.
Fuller described Columbia Business Center as having five attractive attributes -- -location, uniqueness, size, a solid income stream from lease tenants, and being available for purchase.
City view
Gerald Baugh, development services manager for the city of Vancouver, said that Schnitzer had done a good job of making the center fit into the surrounding area by improving peripheral areas. He said that any thought of transforming it into a mixed-use development is lessened by the prospects of redeveloping the Boise -Cascade property west of Interstate 5 into high-density residential and related uses. That site amounts to 27 city blocks, he said.
While Schnitzer Investment is marketing the entire site, the western half -- roughly 110 acres -- is owned by the Hidden- and Van Buren families of Vancouver. Schnitzer has a ground lease on that portion with 25 years remaining. While any buyer would have control over that site for the remaining life of the lease, the two families would retain ownership.
"We haven't contemplated selling it," Monte Hidden said Tuesday. "It has been in the family over 100 years."
He said that any negotiations over the purchase of Columbia Business Center would be between the buyer and Schnitzer. He said, however, that he would like to see continued use for heavy industry.
Bart Phillips, president of the Columbia River Economic Development Council, concurred.
"It is a very valuable industrial property," he said, adding that in the past two years, his group has put three new tenants into space there. Pam Neal, council staffer, said LeClede Chain Manufacturing Co., Isco Industries and the related firms of Qualawash and Quality Carriers have leased a combined 99,000 square feet there. Much of it is used for distribution, she said.
Overall, the center has about 80 tenants, according to -Holliday Fenoglio Fowler -broker Andrew Scandalios.
Critical location
Phillips said the center's -waterfront location is critical for companies such as world-class luxury yacht builder Christensen Shipyard Ltd. and metals manufacturers Universal Structures and Thompson Metal Fab, which use barges to ship their products.
"There are very few locations in the Portland area where you have water access for metals or any industrial activity using barges," he said.
Phillips said that even some of the World War II-era buildings on the west side of the property are used by manufacturers and distributors.
Qualman sees the potential for some 50 acres of underdeveloped property on the west end of the site to transition into virtually an extension of the -adjacent Columbia Shores waterfront-related development. To do that would require -rezoning the property.
He said newer construction in Columbia Business Center is too good to redevelop. Fuller said the future of the site might dictate that it be redeveloped entirely.
Peter Bechen, president of PacTrust in Portland, said his firm considered buying Columbia Business Center in 1997, but decided not to because of the portion of the property that remains under long-term lease. Still, he said, many investors would pay a premium for such a large piece of industrial land. Bechen's firm is a co-developer of 450-acre mixed-use Columbia Tech Center in east Vancouver, with more than 1 million square feet of building space.
Gretchen Fehrenbacher covers commercial and residential real estate for The Columbian. She can be reached at 360-759-8018 or via e-mail at gretchen.fehrenbacher@columbian.com.
The debate
How should Columbia Business Center be redeveloped?
On one side: Redeveloping the Columbia Business Center property could maximize use of highly valuable waterfront property in a prime location.
On another side: Maintaining an industrial center helps the city hold onto bedrock manufacturing and related jobs.
How to get involved: The public will have an opportunity to comment on any requests for rezoning the property, although none is currently proposed. |
Business center sold to area firm
Saturday, August 5, 2006
By JULIA ANDERSON, Columbian staff writer Advertisement
Earlier this week, local investors said they were buying Boise Cascade's Vancouver waterfront property. On Friday, it was the turn of locally owned Killian Pacific to announce that it has purchased Columbia Business Center, another waterfront gem.
The 219-acre business park located east of the Interstate 5 Bridge is among the largest in the metro area with 2.3 million square feet of office and industrial space in 26 buildings and an array of manufacturing, warehousing and office tenants.
The sale was jointly released by Killian Pacific and Portland's Schnitzer Investment Corp., the seller. Details of the agreement were not available although experts speculate the deal was worth about $130 million.
On Tuesday, Gramor Development of Tualatin, Ore., with local investment backing, said it is buying 29 acres of waterfront property west of the I-5 Bridge from Boise Cascade. Gramor will lead that redevelopment.
At Columbia Business Center, no one expects any big operating changes. In fact, Killian Pacific, owned by the father-son duo of George and Lance Killian, is contracting with Schnitzer Northwest LLC of Bellevue to continue the business park's management.
That's good news, said Bart Phillips, president of the Columbia River Economic Development Council, who sees the business center as a key regional economic engine because of its manufacturing, distribution and warehousing tenants.
"We have and will continue to have a lot of our clients locate there," he said. "This is a strategic bit of infrastructure with some of our highest-paid jobs and nationally important businesses."
Phillips said he welcomed the Killians' local ownership.
"I think they understand the importance to the community of that property," he said. "It's not just an asset in a portfolio."
Nearly 40 tenants lease space in the business center, which is about 93 percent leased. Among those are Sharp Electronics Corp., Vanport Warehousing, West Linn Paper Co., Portco Corp. and Thompson Metal, a steel fabricator.
Steve Burdick, manager of Vancouver's economic development department, said the sale and its impact to the city's downtown core really depends on what the Killians plan. He said the city wouldn't see any significant changes if it remains an industrial park. If the land some day sprouts condominiums, expect those residents to look toward downtown for essential services such a grocery store.
Local ownership bodes well for the region's future, he said.
"To have the Columbia Business Center owned locally is a very good thing." he said. "It's a particular coup for the community to have George and Lance (Killian) pick that up."
In a prepared statement, the elder Killian said, "We look forward to the opportunity to further enhance what Columbia Business Center has to offer and thereby continue to fuel economic growth in our community."
The Killians own another key piece of property, nearby, the former Jantzen swimwear factory site, west of Grand Boulevard, north of state Highway 14. They also are proposing Riverwest, a massive redevelopment project in downtown Vancouver to include a new main Fort Vancouver Regional Library.
They own downtown's West Coast Bank building and an adjacent development site and recently purchased a par-3 golf course for redevelopment in Brush Prairie.
Hidden family plays big role
Technically, in buying Columbia Business Center, the Killians acquired about half the park's total real estate outright as well as the business park buildings. Nine members of the Hidden family, living both in Vancouver and in Portland, collectively own 139 acres on the park's west end leased to Schnitzer, and now the Killians, in a long-term agreement that continues for another 24 years.
At one point, Schnitzer proposed redevelopment of the Hidden property, but was never able to come to an agreement with the family.
Roger Qualman, executive vice president with NAI Norris, Beggs and Simpson commercial real estate firm, speculated that the Killians might have better luck with the Hiddens.
"That goes back to the local aspect of this," Qualman said. "It could be easier to talk to each other, easier to discuss the future of the property."
Qualman said the Killians could propose a joint venture with the Hiddens or even buy the property from the family.
The underdeveloped Hidden property, which sits near Beaches Restaurant & Bar and Meriwether condominiums, offers the most potential for a mix of residential and office projects, Qualman suggested.
Bill Hidden, owner of Hidden Farm in Vancouver, said Friday that, so far, there had been little discussion. "There are no big secret plans," he said, "just another marvelous opportunity for Vancouver. Local control means people won't have to go to out-of-town investors for decisions."
Schnitzer Investment purchased the business center for $62.2 million from the Hillman Corp. in 1997.
Holliday Fenoglio Fowler, a national commercial real estate brokerage firm, handled the sale.
Cami Joner and Jonathan Nelson, Columbian business reporters, contributed to this story.
Columbia Business Center
WHAT: 219-acre Vancouver waterfront business park.
TENANTS: 40.
SIZE: 2.3 million square feet of office and industrial space. plus 1.75 million square feet of outside storage and 3.3 miles of rail.
NEW OWNER: Killian Pacific, Vancouver.
LOOKING AHEAD: Killian Pacific expects to "further enhance" the business center.
TOP PORTLAND-VANCOUVER BUSINESS PARKS
* Rivergate Industrial District, 10.4 million square feet, Portland.
* Columbia Business Center, 2.3 million square feet, Vancouver.
* Southshore Corporate Park, 1.63 million square feet, Portland.
* AmberGlen Business Center, 1.35 million square feet, Portland.
* Oregon Business Park I, 1.27 million square feet, Portland.
* EastRidge Business Park, 1.04 million square feet, Vancouver.
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