In another blow to downtown Portland real estate, the owner of Jackson Tower, a landmark building that overlooks Pioneer Square, has defaulted on a loan from JPMorgan Chase, court filings show.
Jackson Tower Partners LLC, the owner of the 12-story beaux arts office building in the 800 block of Southwest Broadway, borrowed $11.5 million from JPMorgan Chase in 2018, and missed its first loan payment on Nov. 1, 2022, according to a complaint filed in Multnomah County Circuit Court on April 5.
JPMorgan Chase asked the court to appoint a receiver—a neutral third party who manages an asset during a legal dispute and is often charged with selling an asset to repay a loan. The court granted JPMorgan Chase’s request for a receiver on April 11, court records show.
Asked why her client defaulted on the Jackson Tower loan, California-based attorney Sherry DuPont blamed “the deterioration of downtown Portland.”
Jackson Tower, with its signature Roman-numeraled clock tower, was built in 1912 to contain the Oregon Journal. The paper occupied the space until 1948, records show. It was renamed the Jackson Tower in 1951 in honor of the newspaper’s founder, Charles Samuel Jackson, and was listed on the National Register of Historic Places in 1996. (The Oregon Journal, a daily paper published in the afternoon, ceased publication in 1982.)
Cayla Wardenburg, executive vice president at Jones Lang LaSalle, says more such defaults are likely.
“This is an unfortunate reality for some buildings in downtown Portland in 2023, especially historic assets with high vacancy and significant loan amounts,” Wardenburg said in an email. “Depending on the building and the lender, it will also cause what we refer to as ‘structural vacancy,’ meaning buildings that have availability but are temporarily or long-term unable to engage with tenants.”
Vacant buildings have caused big trouble for Portland this year. Washington Center, a vacant retail and office complex at Southwest 4th Avenue and Washington Street, turned into an open-air fentanyl market last month before police started round-the-clock patrols and swept the building of squatters. The owner, Menashe Properties, boarded up alcoves and a covered plaza that had sheltered drug sellers and users.
An upper floor of Jackson Tower, located at 806 SW Broadway, is tagged with graffiti that can be seen for blocks. The vandalism occurred last year, according to KATU. In December, KOIN reported that the owner of the building and city officials were working on a plan to remove the graffiti, but that doing so would require a specialized lift, shutdown of the MAX train just below, and special removal products that wouldn’t mar the building’s surface.
Jackson Tower Partners LLC has a mailing address in Torrance, Calif., according to the Oregon Secretary of State’s Office. Listed as owners are three other LLCs: PCH Partners LLC, 871 Figueroa Terrace LLC and Xiao Hui LLC. All have addresses at the same Torrance address as Jackson Tower Partners.
Jackson Tower Partners bought the building for $13.5 million on Sept. 12, 2008, three days before Wall Street investment bank Lehman Brothers declared bankruptcy, an event that helped trigger both the Great Recession and one of the worst declines in real estate prices in U.S. history.
In its complaint for the appointment of a receiver, JPMorgan said it started a nonjudicial foreclosure on the property by filing a notice of default and election to sell on March 1, in Multnomah County.