Pacific NW Properties, a Beaverton-based commercial real estate development company, this week began work on a multi-tenant, multi-building business park in the Salem area that’ll add more industrial space that’s highly sought after. While there are no tenants lined up for the building, the developer is optimistic they’ll come.
By Jake Thomas – Salem Reporter
On Wednesday morning, a crowd of people gathered in a vacant lot in south Salem for a rare event.
Pacific NW Properties, a Beaverton-based commercial real estate development company, broke ground on its first project in the Salem area that’ll add more industrial space that’s in high demand. The new building, South Salem Business Park, will be roughly 70,000 square feet and will be able to accommodate up to 15 tenants after it’s completed in 2021.
Standing before the crowd, Evan Bernstein, a partner and director of leasing and acquisitions at the company, said that Pacific NW Properties doesn’t have any tenants lined up for the new building yet.
“So it’s really a speculative leap of faith, Bernstein said. “Almost like in the ‘Field of Dreams,’ if you build it, they will come.
“And they better,” Bernstein added to laughs.
Launching any business has been complicated by the pandemic and its accompanying economic uncertainty. But Bernstein and others involved with the building say that demand for this type of project remains strong and it has the potential to help other companies grow as the economy rebounds.
“This really is a tremendous addition to Salem’s position in the marketplace,” said Salem Mayor Chuck Bennett, speaking to the crowd at the groundbreaking event. “It makes us unique in the mid-Willamette Valley; there’s just nothing like it.”
The new building will cost approximately $10 million to construct, Bernstein said. He expects about 10 or 12 tenants to occupy the building that could range from manufacturers, a brewery, tech companies or businesses that just need office space.
He said that the area each tenant rents can be designed specifically for their needs, including office space, receptions areas, bathrooms, kitchenettes and other considerations. The new building will have both a dock and grade loading areas, which Bernstein said are difficult to find.
“We think this is going to be Salem through and through with Salem-based companies,” he said.
Pacific NW Properties has about 500 tenants and 100 buildings in the Portland area. With low vacancy rates for industrial properties and a desire to expand its reach, Bernstein said his company had been eyeing Salem for years but hadn’t found the right location.
But last September the company closed a deal for the land on the corner of Fairview Industrial Drive and Cascadia Industrial Street S.E.
Curt Arthur, managing director with SVN Commercial Advisors who brokered the deal, said he got a call from the company a few months ago. He recalled how the company was unsure about what to do after having a problem with permits and the pandemic.
“And I said, ‘go full speed ahead,’” said Arthur.
He said there is a strong demand for industrial property with the vacancy rates just under 3%. He said that anytime a vacancy rate falls below 5%, it’s time to build.
“This is going to be a special, special development,” he said. “This is something this market has needed for an awfully long time.”
Erik Andersson, president of the local economic development agency Strategic Economic Development Corporation, said during the pandemic there has been an uptick in startups and those businesses will soon be looking for spaces to continue growing.
“Given experience (Pacific NW Properties’), 30 years in the market, to come to Salem is a real boost for us, a real vote of confidence in Salem and our economy,” he said.