In a $25.5 million deal, San Diego-based SENTRE commercial real estate investment firm acquired The Thornton on Jan. 2.
The two six-story buildings include 123 units in the Northwest District, and the acquisition marks SENTRE's expansion into the Pacific Northwest.
Valuing each apartment at $207,000 based on the deal, plans include an estimated $1 million comprehensive rebrand and renovation of common areas and unit interiors.
"We are excited to make our first investment in the dynamic Portland market," said Doug Arthur, CEO and president of SENTRE. "We believe our highly differentiated 15,000 square foot indoor and outdoor amenity package, efficient and reasonably priced studio units, and the highly amenitized Slabtown location will position The Thornton for long-term success."
The SENTRE living brand has acquired or developed several multi-family properties over the past six years, primarily focusing on highly amenitized properties in desirable urban locations in the Western U.S. SENTRE was founded in 1989 as a full service real estate investment and development firm specializing in office, multi-family, retail and industrial properties and has acquired more than 10 million square feet of space in the Western U.S. and Mexico and a $4 billion transactional volume.
Property improvement plans include the fitness center, clubhouse, outdoor seating, signage and landscaping. The project will also feature a 15,000-square-foot indoor-outdoor amenity package including an upscale fitness center, bicycle parking, a coffee shop-themed social space, event space and 7,500 square feet of communal outdoor space with BBQs, outdoor game areas and a fire pit.
Portland-based FFA Architecture & Interiors and Seabold Construction will carry out design and construction.
The Thornton was originally completed in December 2016 as the Tess O'Brien Apartments at 1953 N.W. Overton St., and leased to stabilization in 10 months — one of 2017's fastest lease-up among local properties with more than 50 units.
A studio-only luxury building, units average 350 square feet with hardwood flooring and upscale fixtures. Renovations are slated to begin in January 2018 with completion by fall 2018.
CBRE Capital Markets arranged the sale for the former owner of the building, Kehoe Northwest Properties.
Graham Taylor, First Vice President with CBRE's Portland office, represented the seller and exclusively negotiated the transaction.
CBRE said while the lease-up was brisk, the attractive rental price point for the smaller unit types resulted in market-leading effective rents exceeding $3.50 per square foot, substantiating the $631 per square foot price.
"The buyer and their associates were great to work with, and I know they will be great owners of the Tess O'Brien," said Kehoe Northwest Properties President Marty Kehoe. He initially added that he named the apartment project after his youngest daughter.
Kehoe Northwest Properties will continue to own and manage their existing portfolio of properties in Portland and Seattle, while pursuing additional acquisition opportunities in both cities. Kehoe recently entered into an agreement with Multnomah County to purchase the Wapato correctional facility in the Rivergate Industrial area of North Portland.
By Jules Rogers
Reporter, The Business Tribune
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