Portland CRE firm buys foreclosed downtown office building for $3.25M
Portland-based Menashe Properties bought the distressed J.K. Gill Building downtown, CEO Jordan Menashe told the Business Journal on Wednesday.
BACH / PORTLAND BUSINESS JOURNAL
By Jonathan Bach – Staff Reporter, Portland Business Journal Jul 10, 2024
Menashe Properties bought the distressed J.K. Gill Building in downtown Portland, CEO Jordan Menashe told the Business Journal on Wednesday.
Menashe said his company paid $3.25 million for the building at 408 S.W. Fifth Ave. after former owners had put some $30 million into the 100,000-square-foot office building.
The purchase extends an office building buying streak for Portland-based Menashe Properties, which acquired the American Bank building by Pioneer Courthouse Square last year for $13.6 million, or 70% lower than what it went for in 2014.
The J.K. Gill acquisition gives Menashe Properties control over a city block, a big selling point. The real estate firm already owns neighboring Washington Center, previously the site of a large downtown drug market that Menashe says is no more.
"There's no question Portland turned the corner," said Menashe, who was in town last week and plans to visit again soon. He works at the company's Dallas office, having moved to Texas in 2022. He viewed today's Portland as cleaner, with less drugs and fewer tents.
Another J.K. Gill selling point was how "new, new, new" everything was thanks to the Urban Renaissance Group improvements. Bathrooms have been retiled. Ten unused Peloton bikes sat in the basement.
"It's so clean in there you could lick off the floor," Menashe said.
URG and Gaw Capital USA, a private equity firm, bought J.K. Gill in 2018 for $9.85 million. With renovations planned, URG borrowed $27 million from Montana-based First Interstate Bank. The loan, backed by the 10-story Portland building, matured in late 2022, and in 2023 a court placed J.K. Gill into receivership.
No one bid on the building when it went up for a foreclosure auction last November, so it went back to First Interstate, which subsequently put it on the market.
The Menashes' deal to buy J.K. Gill closed last Friday.