Tom Moyer announced today that he has acquired Park Block 4 (a block at SW Park and Yamhill which now holds the Zell Bros. building and two other old buildings) in downtown Portland and plans to build a mixed use tower on the site. (Here's the Business Journal's story.) The tower will have three floors of retail space, 280,000 square feet of office space, and -- most interestingly -- 85 housing units.
One of the oddities of the office tower business is that developers who announce a project don't start to build until they've signed leases for about half to two-thirds of the project. In November, Equity Office Properties, a large national developer (it owns 118,000,000 square feet of office space), announced plans to build a 340,000 square foot building at SW First and Main, but its vice president admits that EOP can't start construction until it signs a large tenant ("anchor tenant" in the trade) for the building. In most cities this head-to-head competition means that whoever first signs a large tenant will build, and the other building stays on paper until the first building fills up. No bank provides construction financing for an unleased office tower, and no developer builds 20 or 30 floors of office tower without having in hand tenants for at least half of it.
Well, almost no developer breaks ground for an office tower without having tenants. In most cities it's never happened. Portland's real estate crowd remembers it happening only once, seven years ago, when Mr. Moyer started construction on the Fox Tower. This time tomorrow, the people at EOP will be pondering whether he'll do it again.