Key Takeaways
- • Multnomah County's Board of Commissioners unanimously approved (5-0 vote) a $28 million sale and leaseback of its historic Central Courthouse to Portland-based NBP Capital on September 20, 2018.
- • The deal includes a 24-month rent-free lease provision, allowing county courthouse operations to continue in the century-old building until the new Central Courthouse opens in 2020.
- • NBP Capital's offer was selected from nine total bids after CBRE, Inc. marketed the property to over 6,000 prospects, with 177 parties signing agreements of interest; NBP's bid generated the highest net proceeds for the county.
- • The sale price reflects a strong per-square-foot valuation for a historic Portland building, according to Bob Leek, interim director of the Department of County Assets, demonstrating healthy local commercial real estate market conditions.
- • NBP Capital, a privately-held commercial real estate fund with a track record renovating historic downtown Portland buildings, plans to preserve and convert the courthouse for commercial use.
Summary
Multnomah County finalized a $28 million transaction to sell its landmark Central Courthouse to NBP Capital, a Portland-based commercial real estate investment firm. The county board's unanimous 5-0 approval on September 20, 2018, marks a significant capital transaction and sets the stage for a managed transition as the county completes construction on a new justice facility.
The sale structure includes a strategic leaseback arrangement whereby the county will occupy the building rent-free for 24 months following close, ensuring continuity of courthouse operations until the newly constructed Central Courthouse at SW 1st Avenue and SW Madison Street becomes operational in 2020. This arrangement addresses operational continuity while providing NBP Capital immediate ownership and development control of the 100-year-old neo-classical structure.
The competitive bidding process demonstrates robust market demand for well-located historic assets in Portland's downtown core. CBRE, Inc. marketed the property extensively, generating interest from more than 6,000 prospects. The process yielded 177 signed agreements of interest and nine formal offers, with NBP Capital's bid ultimately selected for delivering the highest financial benefit to the county. Bob Leek, interim director of the Department of County Assets, characterized the per-square-foot sale price as "strong for a historic building in Portland," reflecting favorable conditions in the local commercial real estate market.
NBP Capital, which has previously renovated other historic downtown Portland properties, intends to preserve and repurpose the century-old courthouse for commercial use. The purchase and sale agreement includes a 30-day due diligence period permitting the buyer to conduct property investigation prior to closing. The county had formally declared the building surplus property in April 2018 and conducted a 60-day public comment period before proceeding with the disposition process.
The sale structure includes a strategic leaseback arrangement whereby the county will occupy the building rent-free for 24 months following close, ensuring continuity of courthouse operations until the newly constructed Central Courthouse at SW 1st Avenue and SW Madison Street becomes operational in 2020. This arrangement addresses operational continuity while providing NBP Capital immediate ownership and development control of the 100-year-old neo-classical structure.
The competitive bidding process demonstrates robust market demand for well-located historic assets in Portland's downtown core. CBRE, Inc. marketed the property extensively, generating interest from more than 6,000 prospects. The process yielded 177 signed agreements of interest and nine formal offers, with NBP Capital's bid ultimately selected for delivering the highest financial benefit to the county. Bob Leek, interim director of the Department of County Assets, characterized the per-square-foot sale price as "strong for a historic building in Portland," reflecting favorable conditions in the local commercial real estate market.
NBP Capital, which has previously renovated other historic downtown Portland properties, intends to preserve and repurpose the century-old courthouse for commercial use. The purchase and sale agreement includes a 30-day due diligence period permitting the buyer to conduct property investigation prior to closing. The county had formally declared the building surplus property in April 2018 and conducted a 60-day public comment period before proceeding with the disposition process.
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