The Menashe real estate family was in advanced talks as recently as this month to buy Montgomery Park, the landmark office complex whose neon sign beams across Northwest Portland, according to two sources who spoke to The Oregonian/OregonLive.
The two sources, each of whom had direct knowledge of the Menashe family’s interest in the property, spoke on the condition of anonymity to discuss a sensitive business matter.
The state of sale talks is unclear, but lender Natixis is seeking to offload the mammoth office complex at 2701 N.W. Vaughn St. after reclaiming it in a foreclosure auction in February.
Menashe Properties includes founder Barry, his daughter and company principal Lauren, and son Jordan, the chief executive. In an interview on Tuesday, Barry Menashe acknowledged that he looked at Montgomery Park but denied a deal was in place.
“We’re not buying the building,” Menashe said on Wednesday while leaving the door open to buying it in the future. “We really don’t have a clue at this point.”
New York-based Natixis deployed real estate brokerage Newmark to find a buyer. A few possible bidders emerged since February, including locally based Menashe Properties and Melvin Mark Cos.
Melvin Mark dropped out a month or so ago, CEO Jim Mark said.
“I’m bullish on Portland,” Mark said. “You can’t do everything.”
Menashe Properties’ interest is far more recent. Jennie Turner, site director for building tenant Summit Research, said a group with two Menashe Properties representatives, including Barry Menashe, interviewed her at her office on July 2. Turner said her understanding was Menashe was a potential buyer.
Last September, the previous owners — a company with ties to Seattle-based Unico Properties — defaulted on about $150 million in debt backed by the property, leading to a foreclosure that was viewed as emblematic of Portland’s real estate woes.
Montgomery Park is the third-largest office property in Portland, according to a list compiled by the Portland Business Journal.
Amid rising office vacancies, Menashe Properties has acquired two downtown buildings at remarkable discounts within the past year. Last September, it paid $13.6 million to buy the American Bank Building, 70% less than its 2014 sale price. Earlier this month, the family bought the J.K. Gill Building for $3.25 million, after prior owners sank tens of millions into renovations before defaulting on a bank loan, the Business Journal reported.
J.K. Gill sits on the same block as Menashe Properties’ Washington Center, where an open-air fentanyl market was active last year. An analysis by The Oregonian/OregonLive found that drug dealing close to the beleaguered property led to nearly 20 arrests of alleged sellers between February and April of last year. The drug market cleared out after the family and city officials secured the vacant building.
A third source, who declined to name the potential buyer but had direct knowledge of discussions, said Montgomery Park had entered a due diligence phase, during which a potential buyer can call off a deal if financial or other concerns arise.
Summit Research site director Turner said that during the Menashe Properties meeting at her office early this month, she was asked about her experience in the building, whether Summit Research planned on staying and what improvements she’d like to see.
“We have no plans on leaving. We just renewed our lease. Our experience there has been nothing but great,” Turner said. She said she would like a gym, more community events and updated bathrooms.
“As a tenant there,” Turner said, “I want to see (Montgomery Park) successful.”
-- Jonathan Bach covers housing and real estate. Reach him by email at jbach@oregonian.com or by phone at 503-221-4303.
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