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ADDRESS: 2035 NW Front Ave.
YEAR BUILT: 2018
SQUARE FOOTAGE: 290,000
MARKET VALUE: $62.7 million
OWNERS: Goldman Sachs, Lincoln Property Co.
HOW LONG IT’S BEEN EMPTY: It’s not, but the owners defaulted on the loan.
WHY THEY DEFAULTED: No one wants office space in Portland.
You remember Goldman Sachs, the Wall Street investment bank that former Rolling Stone journalist Matt Taibbi dubbed a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
Well, Goldman jammed its blood funnel into Portland and came up dry.
The New York firm recently defaulted on a loan that it and a partner firm took in 2019 to buy Field Office, a hipster-magnet office complex on Northwest Front Avenue in the shadow of the Fremont Bridge. Instead of foreclosing, the lender is trying to sell the $73.8 million loan, almost certainly at a discount, to the highest bidder, according to a flyer for the sale obtained by WW.
Real estate services firm CBRE Group is handling the sale.
“CBRE’s National Loan & Portfolio Sale Advisors have been retained as the exclusive advisor for the sale of a $73.8 million nonperforming senior loan secured by a Class ‘A,’ recently constructed office campus in Portland, Oregon,” the flyer says. “The lender is in the process of finalizing a deed-in-lieu of foreclosure with the borrower, affording investors the potential for an expedited path to title.”
A person familiar with the loan confirmed that the property in question is Field Office. An executive at Lincoln Properties declined to comment on the sale, as did a spokesperson for Goldman Sachs. An executive at CBRE didn’t respond to an email seeking comment.
Bids for the loan are due Aug. 15, the flyer says.
The big winner in the Field Office debacle is a local developer named Tom Cody, founder of a firm called Project^. He built Field House in 2018. It cost him $108.4 million, and it was a bit of a gamble. For financing, he had to go all the way to Little Rock, Ark., where Bank of the Ozarks, a scrappy, aggressive lender, is based.
But Cody and his team got Field Office off the ground. Its two six-story towers rose, angular and blue, from old industrial land. One of them wrapped around the existing Dockside Saloon—preserving a bit of history and pancakes for the stevedores. It had all the eco things, including electric scooter charging stations and parking for 200 bicycles. The U.S. Green Building Council gave it a platinum rating.
Leasing was “somewhat slow,” according to the Portland Business Journal. Nonetheless, a buyer came knocking. It was a joint venture between Goldman and Lincoln Property Co., a Dallas-based real estate firm. They offered $118 million for Field Office, and Cody took it in April 2019, nine months before the U.S. recorded its first case of COVID-19.
It may have been the luckiest sale in the history of Portland real estate. By April 2020, most U.S. office workers were Zooming in from home, leaving their cubicles empty. A hybrid home-office model has persisted since then, slashing demand for office space. (Cody didn’t return a telephone call or email message seeking comment.)
Goldman and Lincoln stuck it out for a while, distributing brochures for Field Office touting its “striking and innovative” design, “iconic architecture” and views of the Cascades. But, in the end, the vampire squid gave up.
Every week, WW examines one mysteriously vacant property in the city of Portland, explains why it’s empty, and considers what might arrive there next. Send addresses to newstips@wweek.com.