Development of Property in Portland Oregon

[Preston Roth]

Hello All

I'm very new to BP but have been reviewing a lot of the posts that have come through to better acquaint myself with the site and its benefits. I'm very impressed with this sort of comradery and desire to help one another. It seems like a family with everyone having an interest in your success.

Im curious if anyone in the Portland Oregon area has any advice or thoughts on my below situation.

I owe two congruent properties(2 early 1900 homes with a lot of character and in very good condition) both in CS zoned areas and located in the hot Hollywood district right on sandy blvd. Im interested in possibly developing that land, which would entail moving the houses or destroying them. It would break my heart to destroy them as the craftsmanship is unmatched today I believe in detail and materials. Ive never developed nor do I have the slightest idea where to start, other than here on BP and just educating  myself through other avenues. My thought on development is some sort of commercial main floor/personal condo type development on the 2nd. Maybe rentals or maybe sell the condos and rent out the commercial. Very early thought process for me, but I believe the land is very valuable and will continue to become sought after. So is this something that makes sense to do? 

1. Keep them as they are, rent them out and let the equity grow?

2. Buy land and move the houses to a new location and develop the land? 

3. Mow the houses down and develop the land?

Any thoughts would be greatly appreciated.

[Tyson Cross]

Like Adolfo said, it depends on your goals. Also, what is your level of expertise. Developing apartment buildings or condos requires some serious knowledge. In this market it is ultra competitive and also very expensive. We're seeing costs right around $200 a square foot including all costs. Obviously you have the land already, but I will tell you that Sandy is a highly coveted area. A lot of development is happening in that corridor and dirt for multifamily with ground floor retail is priced very high. 

Keep in mind there are several changes happening in Portland, however. The city just passed an inclusionary zoning change requiring all projects over 20 units to have 15-20% of the units be affordable housing units. This will affect the value and we've already seen that in a few deals we've been working on. 

No doubt, the highest and best use is likely to redevelop the land. Sandy is a heavily commercial street and it will continue to be redeveloped. But, I do love the classic homes as well. Unfortunately, when a city grows it has growing pains, in this case some very classic homes don't fit in the cities blue print. 

Feel free to reach out if you would like to discuss more. Hope that helps