Goldman Sachs Defaults on Portland Building

[Terrel L. Shields]

5 year old building and $73.8 million building is going in default to be sold

 

[Charles West]

5 year old building and $73.8 million building is going in default to be sold

The cascade begins, the West Coast sinks in the ocean.

 

[Elliott]

"In a surprising twist of events, “trophy complex” Field Office in Portland, Oregon finds itself swimming against the current, on the brink of surrender. One of its co-owners, the renowned Goldman Sachs, recently defaulted on a hefty $73.8 million loan due to the building’s occupancy drought. The five-year-old architectural wonder now stares at a bleak future, thanks to the increasing shift towards remote work and the fallout of the tumultuous summer of 2020.


The co-owners, Goldman Sachs and Lincoln Property, threw in the towel on this once-thriving hub, deciding to stop the bleeding by ending payments. Despite the Field Office’s architectural grandeur and its prime location along the Willamette River, the lack of tenants has overpowered any physical attractions the building might possess. This scenario is a somber testament to the city’s struggle with a dormant office market.

In a bid to salvage the situation, Real Estate Services Company, CBRE, has been commissioned to sell the loan and find a buyer, who hopefully can breathe life back into the desolate building. While this doesn’t seem like a sunny prospect, it’s a stark reminder of the changes sweeping through commercial real estate, not just in Portland but across the nation. Indeed, the Field Office is just a tip of the iceberg, with around 59 similar instances reportedly lurking in the city."
....................

Scary.

On Fox Business this morning, they had a advisor-scholar-type who said the commercial vacancy rate was 35% and was trying to make the case that interest rates were high enough and "inflation rate" was more like 1-1/2% rather than 3% because of the 'shelter' component of CPI.

 

[Charles West]

"In a surprising twist of events, “trophy complex” Field Office in Portland, Oregon finds itself swimming against the current, on the brink of surrender. One of its co-owners, the renowned Goldman Sachs, recently defaulted on a hefty $73.8 million loan due to the building’s occupancy drought. The five-year-old architectural wonder now stares at a bleak future, thanks to the increasing shift towards remote work and the fallout of the tumultuous summer of 2020.


The co-owners, Goldman Sachs and Lincoln Property, threw in the towel on this once-thriving hub, deciding to stop the bleeding by ending payments. Despite the Field Office’s architectural grandeur and its prime location along the Willamette River, the lack of tenants has overpowered any physical attractions the building might possess. This scenario is a somber testament to the city’s struggle with a dormant office market.

In a bid to salvage the situation, Real Estate Services Company, CBRE, has been commissioned to sell the loan and find a buyer, who hopefully can breathe life back into the desolate building. While this doesn’t seem like a sunny prospect, it’s a stark reminder of the changes sweeping through commercial real estate, not just in Portland but across the nation. Indeed, the Field Office is just a tip of the iceberg, with around 59 similar instances reportedly lurking in the city."
....................

Scary.

On Fox Business this morning, they had a advisor-scholar-type who said the commercial vacancy rate was 35% and was trying to make the case that interest rates were high enough and "inflation rate" was more like 1-1/2% rather than 3% because of the 'shelter' component of CPI.

I watched the same piece, he was a Debbie downer but probably closer to the truth than not.

 

[Terrel L. Shields]

Seems the turmoil downtown only made a bad situation much much worse. Meanwhile in Wally World, vendor spaces continue to be occupied. And we hit a record at year's end (Bentonville-Rogers-Springdale-Fayetteville aka Northwest Arkansas MSA)

Apr 5, 2023 — The big picture: The area's overall commercial vacancy rate dropped to 5.6% as of Jan. 1, down from 5.8% in June 2022 and 8.3% a year earlier.​

 

[George Hatch]

Just think, some appraiser told the construction lender that project was feasible. That building and others like it probably never reached stabilized occupancy.

 

[Terrel L. Shields]