Q&A: What Continental Partners’ Mitch Paskover Likes About PDX

Trion Properties recently acquired multiple multifamily properties in the greater Portland area, which has made it the most active buyer in the market. Securing competitive financing has been a critical component in buying those assets. That’s where Continental Partners fits into the PDX picture, since it secured all of the loans for Trion’s acquisitions. Connect Media asked the mortgage brokerage firm’s Mitch Paskover to share insights on its views of the Northwest market, and strategies to achieve competitive financing in growing markets in our latest 3 CRE Q&A.

Q: What larger trends are shaping commercial real estate financing for Portland, OR properties?

A: Capital markets have remained healthy and consistent in the current pro-growth economic climate. While rising interest rates and lowering leverage have increased the cost of capital overall, activity remains high. Bank and non-bank lenders alike remain hungry for opportunities in Portland, as the metropolitan area continues to demonstrate strong population and employment growth fundamentals.

Looking ahead, given the point we are at in the prolonged real estate cycle, lenders are indeed influenced by the knowledge that the market is softening and there is a correction on the horizon. That said, the impending correction is likely to be far less significant than the downturn of a decade ago and not as widespread. Portland is poised to thrive and continue to attract capital, as lenders are increasingly drawn to markets that have maintained strong fundamentals and have a proven resilient infrastructure.

Q: What property types and submarkets are attracting the most lender interest?
A: Multifamily continues to be the most active real estate market segment, fueled by the consistent demand from residents, and vacancy rates far below the long-term average, currently posting the lowest numbers we have seen since the mid-1980s.

The Portland Metro boasts a strong and diverse employment mix that includes a rapidly-growing tech presence, significant apparel brands, and many major employers in the aerospace and medical industries, which is a strong indicator of the continued success of multifamily as well as office and industrial sectors.

As an emerging gateway market that has been on a strong growth trajectory for some time, investors and lenders alike have been looking outside Portland’s urban core to surrounding submarkets for some of the most lucrative opportunities. Washington County, which includes the cities of Beaverton and Hillsboro, is one great example of strong growth fundamentals. The county boasts the highest median income in the state of Oregon, and has seen an ongoing influx and expansion of several major employers, including Intel and Nike.

Q: How can borrowers secure competitive financing in a growing market like Portland?

A: While there is ample capital available for Portland commercial investments, increased competition and lender caution means that securing favorable financing can require some creativity. Borrowers and their finance partners need to clearly communicate the strength of an asset and business plan, and address any possible concerns of lenders through strategic planning and presentation.

Menlo Square Apartments, Beaverton

For example, drawing from a comprehensive market analysis and deep experience in Portland-area assets, we recently secured competitive financing for Trion Properties’ acquisition of Menlo Square Apartments in Beaverton. We presented Trion’s plans for light value-add renovations to the property that would cater to the area’s growing demographics, including converting nine two-bedroom floorplans into three-bedroom floorplans, as well as the firm’s proven ownership strategy in the submarket to secure a competitive fixed-rate loan.

Don’t miss Connect National Investment & Finance on Oct. 18 to hear what industry leaders and major stakeholders have to say about the state of the market and what’s next in this current cycle. Click here to register.

For comments, questions or concerns, please contact Dennis Kaiser