Case Studies

Real estate investment case study: Asa Flats + The Lovejoy Blocks

Aggressive marketing, foresight, and stellar property management allowed Unico to deliver unmatched leasing successes at Asa Flat + The Lovejoy Blocks.

Leveraging its local knowledge, Unico was able to source an off-market opportunity to step into a stalled development

Downtown Portland had evolved to the point that, in 2005, its office spaces and residences were approaching cyclically low vacancy rates. Meanwhile, the city’s Pearl District was evolving into an iconic live-work environment. Land in the Pearl District was available only to those who foresaw its northward expansion. Leveraging its local knowledge, Unico was able to source, off-market, an opportunity to step into a stalled development. However, between project initiation and delivery in Q4 of 2008, the economy fell into recession and the real estate market plummeted. Multiple new condominium projects were delivered into a weakened sales market that forced their conversion to rentals, increasing competition.

Aerial view of Asa Flats, highlighting its rooftop garden.

Asa Flats in Portland, with the MAX in the foreground.

The residential portion reached 99% occupancy within a year of opening with the equivalent rents of higher-class product

More Development Stories

Map of Downtown Portland, showing the neighborhoods around the Lovejoy Blocks.

More About the Lovejoy

 

Unico delivered the $125 million, two-block development that featured 231 apartments, 85,000sf of office space, a 45,000sf Safeway grocer, and 20,000sf of street level retail including Bank of America. Foreseeing the changing dynamics in the office real estate market, Unico proactively sought to lock-in occupancy prior to opening, aggressively pursuing tenants who would appreciate the Pearl District’s unique characteristics, while emphasizing the sustainable project elements. For the residential, Unico anticipated that all pending condominium supply would convert to rental competition. As such, in assessing the new market realities, Unico decided to upgrade the finish package to compete with the condominiums-turned-rentals and to target longer term leases.

The office portion was quickly 90% leased, having attracted lead tenant Ater Wynne (law firm) from the CBD. Rents were in-line with projections and hindsight proved that the 2007 leases signed were the top of the market; no other development matched The Lovejoy’s leasing success. The residential portion produced even more impressive results, as Asa reached 99% occupancy within a year of opening with market rents that were equivalent to those of larger, more expensive condominiums that had converted. Leasing success was derived from a combination of physical product and a hands-on approach by the onsite management team to create a sense of social community within the project.