Downtown Portland office complex faces loan default

DowntownPortlandofficecomplexfacesloandefault

By Jonathan Bach – Staff Reporter, Portland Business Journal Jun 14, 2024 UpdatedJun 14, 2024 3:23pm PDT

PCCP in 2019 acquired the two-building Park Square in downtown Portland for $96.5 million.

ParkSquare,anofficecomplexthatsprawlsacrosstwobuildingsandsome296,000 squarefeetnearthedowntownPortlandwaterfront,appearstobeheadedfora foreclosuresale.

Thepropertyat100S.W.MarketSt.isthelatestcasualtyofthepost-pandemiccrashof Portland'sdowntownofficemarket,wherethevacancyrateis31%andrising,according tobrokerageCBRE.

NationalinvestorPCCPLLC,whichadvertises$23.6billioninassetsundermanagement, boughtParkSquarein2019for$96.5millionthroughalimitedliabilitycompanycalled ParkSquareOwnerLLC.Atthetime,ParkSquarewasnearlyfullyleasedwithtenants includingRegenceBlueCrossBlueShieldofOregonandHealthSparq.

ParkSquareOwnerLCCisnamedinadefaultnoticefiledJune11withMultnomah Countyandowesabout$37.5millionondebttiedtothebuildings.

Aforeclosuresaleisscheduledfor10a.m.onOct.30attheMultnomahCounty Courthouse,accordingtothenoticeofdefault.PCCPdidnotimmediatelyrespondtoan emailedrequestforcomment.

PCCPdoesn'tmakemuchmentionofParkSquareonitswebsitebesidesina2021-22 report,whereitboastedofParkSquare'stwo-starratingwithFitwel."Basedonour expectationthattheonsitegymwillbecompletedneartheendof2022,"thereportsaid, "PCCPisconfidenttheParkSquarepropertywillbeeligibleforanevenhigherFitwel ratinginthefuture"

ParkSquarerankedNo.25ontheBusinessJournal'slistoflargestofficebuildingsinthe Portlandmetro.ThetwobuildingsthatmakeupParkSquarearethesix-storyR.L. WoolworthBuilding,whichtoppedalistofemptiestofficebuildingstheBusiness JournalpublishedlastOctober,andasecond,seven-storybuilding.

Severaldowntowncommercialbuildingshavegonethroughforeclosuresincethe pandemicreshapedofficeculturetofavorhybridwork.

MostnotablewasMontgomeryPark,whoseownersdefaultedon$149millionindebt associatedwiththe18-acrepropertyinNorthwestPortland.Itscourthouseauctiontook placeinFebruary.Becausenooneshoweduptobid,itwentbacktoitslender.Brokerage NewmarkwasseekingtodrumupfreshinterestinMontgomeryPark,thecity'sthirdlargestofficebuilding,asofthisspring.