Document Type

Report

Publication Date

Summer 2020

Keywords

Portland State University. School of Business Administration. Center for Real Estate, Sustainability -- Economic aspects, City planning -- Oregon -- Tigard

Abstract

The Trailhead Team (“Sponsor”) is pleased to present qualified individuals (or entities) the opportunity to invest $8,124,231 (“Equity”) in a Qualfied Opportunity Fund, which will purchase membership interests in Urban Flight LLC (“UFL”), a Qualfied Opportunity Zone Business, for the development of two speculative mixed-use buildings located in the industrial core of Tigard, Oregon (“The Trailhead” or “Project”).

Total Project costs will be $35,731,297 with the remainder of the Equity being contributed by the current property owner (“Property Owner”) in the amount of $3,381,723.1 The Sponsor will also invest $1,000,000 of Equity. UFL will secure $23,225,343 in construction debt, at an assumed value of 65% loan to cost, to complete the capitalization of the Project.

The Trailhead consists of 7.93 acres, and lies within close proximity to the Tigard Triangle between Hunziker Road and SW Wall Street. In the fall of 2020, the City of Tigard is expected to commence construction on the extension of SW Wall Street to Tech Center Drive, at the southern portion of the Trailhead.

Target tenants for the Project will include engineering firms, industrial design firms, and other high job count industries who don’t necessarily require those jobs to be on site.

The Sponsor will target these industries as they seek to relocate from the City of Portland, due to rapidly increasing business taxes, high earner’s taxes, rampant homelessness, safety concerns and fallout from the COVID-19 crisis, and a perceived lack of general support from the Portland political community.

The Trailhead will consist of a two-story, 67,810 SF building, a one-story, 21,744 building, and a 500 SF detached walkup coffee shop. The Sponsor anticipates achieving an initial return on cost of 7.00%, with a Project levered IRR of 15.91%. Further, the Project will seek to obtain Opportunity Zone tax benefits for investors who contribute qualified capital gains.

Description

Each winter and summer, a team of students from Portland State University’s Master of Real Estate Development program are tasked with creating a development program for an existing site in the Portland or Seattle region. These teams produce a development concept through ingenuity, research, and consultation with experts in the real estate industry. NAIOP has generously sponsored our team and provided a venue for us to present our plan to the public.

Persistent Identifier

https://archives.pdx.edu/ds/psu/37804

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