In September, Security Properties of Seattle and the Beijing Jade Investment Group of China closed on a deal to purchase the iconic, five-acre Pepsi distribution property in the Kerns neighborhood – located between Northeast 25th and 27th avenues and Holladay Street and Sandy Boulevard. The companies plan to redevelop the property as an “urban village” with four to five mixed-use buildings, parking, retail, housing, offices and possibly senior housing. The sale agreement allows Pepsi to lease the space for up to 30 months and construction is likely to be several years away.
“We look forward to creating Portland’s next dynamic urban village through the city’s 2035 comprehensive plan,” said John Marasco, Security Properties chief development officer. “Soon we’ll begin outreach to the Kern’s Neighborhood Association and other stakeholders as part of a community engagement process that will help us to create the best possible mixed-use project for this community.”
Security Properties will serve as master developer and is in the process of interviewing architects to begin initial concepts for a multi-phased project. The company recently completed the Peloton Apartment project at 4141 N Williams Ave. in the Boise neighborhood and has a 218-unit apartment building, The Heartline, underway in the Pearl district. They have also received design approval for a 250-foot residential tower on the Oregonian Press Blocks property in Goose Hollow, slated to break ground in 2018.
Built in 1962 and designed by Scott & Payne, the Pepsi building was included in a 1984 Historic Resource Inventory as a significant example of mid-century modern architecture. The acquisition and redevelopment of the building follows in the footsteps of several other construction and renovation projects in the neighborhood.
“Going forward, I think this stretch of Sandy will be very significant for the city strategically,” said Eli Haworth, principal managing broker for Urban Nest Realty’s commercial division, which has an office in Kevin Cavenaugh’s Crusher Court development across the street from the Pepsi property. “The flexible zoning here allows for all kinds of possibilities and Sandy certainly has the potential to become a ‘main street’ for the entire east side. I see plenty of pedestrian activity now, and that’s only going to increase. It’s difficult to say where the market will take us five years down the road, but we need more small retail and light industrial space now and this project could stimulate that kind of development.”
In August, Security Properties held an early assistance meeting with the Bureau of Development Services to discuss zoning rules for the site. The massive urban property constitutes a “superblock,” encompassing more than four city blocks that have generally been used for industrial or office space, while the surrounding sites are zoned for mixed-use development.
“This site is central to everything that makes Portland such a special place to live,” said Gus Baum, Security Properties director of development. “We see Sandy becoming Portland’s next great boulevard, and this plan will play a significant role in its continued transformation. The area is ripe for more density, particularly workforce and affordable housing, as well as new commercial space for people to work and shop”
“We are looking to continue our investment in Portland with dynamic, vibrant mixed-use communities that are sensitive to existing neighborhoods but bring something new and exciting to the community,” said Marasco. “We believe the demand for quality mixed-use space in Portland is enormous, and this development will provide an opportunity to enhance the area through the creation of a true urban village.”
For more information, visit www.securityproperties.com.