I went out on a lil urban hike yesterday morning and was confronted by the reality of a frequently occurring conversational topic of late: commercial real estate in Portland.
The rug shop on the corner across from my place is closing. Well, is closed.
Just as a reminder, I live in a neighborhood called The Pearl which is nestled in the Alphabet District of Portland’s Northwest neighborhood. Essentially, this neighborhood runs from Burnside to Lovejoy streets from North to South and from Broadway to 8th to Park and then 9th-13th on the East to West streets.
It’s an 8×11 street grid.
There is/was three rug shops within that grid, so “How many rug shops do you need in that small area?” is a valid question.
Here’s one of the survivors, which was forced to move from its original location a few years ago to make way for a 14 story, half a city block apartment building that is finally nearing completion.
I’m not complaining. Once this is done early next year, my immediate area will wrap up its fourth major building project over the last four years. That’s two new hotels and two new apartment buildings that added about 500-700 new neighbors and countless tourists to my corner of the world.
Until the Post Office project begins in god knows when, I’m in the clear, construction-wise.
Interestingly, the opposite corner of my block (shown above) rented nearly a year ago and just recently opened. It’s a rowing studio, which upset the Filipina Fox greatly, since she and her husband were planning – still are – to open a row studio. But if you got clients that are too lazy to walk into class, you’re probably better off not even bothering to open.
At least they are friendly. Homegirl gave me a nice friendly smile and wave.Still, it goes back to my earlier question, how many <insert business here> does one small part of town need?
When it comes to gyms, I can think of too many:
The grand daddy of the OGs, 24 Hour. It’s been here since well before the turn of the century. Another OG – LA Fitness – came in a decade and a couple blocks later.
There’s now City Row, Yo Yo Yogi, Pearl Yoga, Firebrand, Barre 3, Bar Method, RevoCycle, BurnCycle and countless CrossFit studios within my tiny grid. Including one that moved into this site for about an hour.
But fitness and rugs aside, this whole conversation started with a few notable business closures.
Namely, Pearl Bakery and Henry’s Tavern with an honorable mention to Byways Cafe.
Pearl Bakery had been in its current location for 23 years, serving up fresh baked breads and pastries as well as top notch coffee the entire time. It was a Pearl landmark.
Henry’s, on the other hand, could arguably be said to have been here in the Pearl since before there was a Pearl to be in.
Henry Weinhard’s started brewing beer here in 1906 and I know people just a few years younger than me whose parents worked there. It was bought by AB a few decades ago and brewing operations were consolidated elsewhere sometime after that. In the 90s, the brewery was redeveloped into a founding corner of the a Pearl called the Brewery Blocks, which enveloped the block that Powell’s sits on and also included a couple of condo and apartment buildings The Henry and The Louisa, named for Weinhard and his wife. One of the old brick buildings was remodeled and became home to Henry’s Tavern, run by the recently relegated to the annals of bad business Restaurants Unlimited. Still, RI was snatched up by Landry’s and there was hope that the namesake restaurant in the Pearl’s Brewery Blocks would be spared the axe.
Still, you gotta wonder, if coffee and beer can’t make a go of it in one of Portland’s affluent destination living and shopping districts…hadn’t there got to be a bigger problem?
Henry’s is hardly the only brewery or taproom to face this fate.
Last year, Bridgeport shut down brewing operations in the Pearl and later closed its onsite restaurant.
Avid started its life as Atlas before being sued over copyright infringement and forced to rebrand. It opened last year in one of the two nearby apartment building projects i mentioned.
On Deck will close permanently at the end of the year, putting the Pearl down a sports bar.
It was quite the summertime destination – for some, not me) with a rooftop that probably doubled its square footage. I think this business in particular struggled with a too common threat in the neighborhood these days:
Rumors circulated for the better part of a year that this block was due to go under the wrecking ball to create a new mid-rise building. Office Depot occupied the other corner of the block and pulled out last year.
And while I am a supporter of housing density, the panic future development rumors create is detrimental to our present.
Indeed, my backup – and preferred – coffee house is on that block, you can just make out the red reflection of its “Open” sign in the picture above. As a matter of fact, Nossa is new to this block within the last couple of years, having moved from literally two blocks down when its former location came under the same redevelopment axe.
Yet, here its former location is. Empty as the rumors that helped facilitate its relocation. Also, some randomly occurring Jingle Bell runners.
But as in favor as I am of redevelopment, I think the overall benefit is mitigated by the negative impact of commercial real estate’s larger problem: greed.
Real estate – both commercial and residential is at a premium in Portland overall and more so in the Pearl specifically since it’s such a hub. So, for every new building that goes up, there’s at least one – if not two – large restaurant or retail spaces included in the new building as anchor spaces.
Case in point, The Rodney.
This apartment building was finished early this year and included a large restaurant space on the ground level. This corner is on Glisan, one of the two busiest one-way through-fares in the neighborhood. Including construction, there’s been over two years to lure a business into this spot. It’s next door to 10 Barrel Brewing and Rogue Brewing’s taproom restaurants and a block from Andina, another Pearl District restaurant mainstay.
That they can’t rent this space out is problematic. Then again, it took two years post-construction for City Row to open in the large space next to my building, so…
A bigger problem?
The building right across Glisan that should be complete and open early next year. Including what I assume will be at least one large restaurant space in its three corner spaces – it’s a big building.
Between these two buildings, we’re adding around another 750+ residents to the neighborhood…it shouldn’t be that hard to draw a business that can make a go of it here. As long as it’s not named something complementary-awkward to its neighbor. All we need is an apartment building named The Slice sitting across the street from The Rodney.
But large restaurant space is tricky. Even chain based restaurants can’t make a go of it. Back before RI went out, they snatched up Pacific Restaurants. This was back in 2007 and I believe – forgive me if I’m wrong – PR was an affiliated evolution of Farrel’s Ice Cream Parlors.
Between the two, they put successive restaurants into this Glisan corner space for decades.
It was home to Palomino and Trader Vic’s with at least one other incarnation from the brand’s portfolio in the mix. Then it sat empty for a couple of years before signage for a Pink Taco went up in the windows screaming about a new future.
Then silently came down.
More recently, the space has quietly announced a new tenant.
And apparently the low key nature of its announcement saved enough money for remodeling to actually begin this time around.
Meanwhile, on the opposite corner of that block, facing Hoyt, another of the Pearl’s pioneer eateries sits vacant after closing in the middle of the night a few years back. Oba! was an exciting happy hour destination and a swanky date night or celebration restaurant destination.
Ironically, another Pearl nightlife mainstay is rumored to have leased the space, but those rumors are growing stale after almost 18 months.
Jimmy Mak’s was a jazz venue in the Pearl since the days where there was only one or two industrial co-ops and maybe one condo building in the hood. Then they moved catty corner to a new location next to one of our three neighborhood rug shops.
Then, the rumors came.
Kush decided to move ahead of the demolition of its half-block. Jimmy Mak’s decided to close down once its owner’s cancer resurfaced. The farewell party was planned – a New Years Eve to Mark the end of the Jimmy Mak’s era.
On New Years Day Jimmy died. It was tragically sad and a simultaneously beautiful ending to the story.
Until…a couple of former employees decided to reopen Jimmy Mak’s in the Oba! space six months later. Another beautiful tribute to a legendary entertainment venue.
The “Leased” sign is up…but 18 months in, we’re still waiting.
Celebrity chef based restaurants aren’t faring any better than chain-backed ventures.
Isabel Pearl was a restaurant opened by cookbook author Isabel Cruz back in 2008. After a decade, plans for the San Diego based cookbook author cum restauranteur to expand into the old Gilt space a few blocks away on Broadway were announced.
Gilt was the space’s former tenant and is the restaurant made famous by the Colin the Chicken episode of Portlandia…
If you can’t stay in business with that pedigree…alas, instead of expanding to a second location, Isabel decided to “reimagine” their original Portland location.
A hand-drawn magic marker sign. I can see that no expense was incurred – at least they learned something from Pink Taco.
Speaking of which, maybe that’s the restaurant that should anchor the building across from The Rodney!
Here’s a few more spaces that recently transitioned:
The Star brings deep dish pizza to the space formerly home for tow decades to The Paragon. Hopefully, they enjoy a similar tenure.
Two Wrongs is a collaboration between a Portland bar/restauranteur and the marketing/brand master behind Portland Gear. They took over a former Black Rock coffee house to open a bar.
Here’s Byways, which I mentioned earlier. Fifteen years ago, this was Shakers Cafe. Both incarnations were kitsch themed diners and have occupied this space for…gosh, 25 years collectively? They announced their closure after failing to negotiate new lease terms with the building’s owner.
There’s that greed again.
That the Sheepskin shop that shares the building with Byways has outlasted them is truly mind boggling. And it’s not like the building is going anywhere. There’s a co-op on one side and a similar small building housing a taco joint and a kitsch decor store called Cult on the corner.
Taprooms aren’t the only alcohol based destinations to struggle. This space is in the building that the Silver Fox lives in. It sits on Everett – the other main through-fare in the Pearl used to House a wine bar called Remedy. They limped along for a couple of years before closing and one of the owners – who owned the commercial space – had it rezoned and remodeled into his private residence.￼
An old school shared office building (pictured top) closed up last year. It had been here forever. It featured a now whitewashed wall that formerly depicted a mural of home state hero Steve Prefontaine and a fun neon sign helpfully suggesting the proper use of ones time.
I’d like this mural restored, if they’re just gonna cover it over and then leave.
Come to think of it, I want the neon back, too! Maybe keeping the “Working” side lit would keep homeless people from camping in the doorway.
Given its billion dollar a year losing competitor across the park, I can see where it would be hard to compete successfully. But this is Portland. We’re supposedly hard wired to support the underdog. WeWork should not have won in this scenario.
Affluence doesn’t always guarantee success over commercial real estate greed, either. Opposite the corner housing Pearl Bakery – which started this whole ball rolling – was a Charter School. It had been there for quite some time, bringing kids into the Pearl’s North Park Block neighborhood. That was an add that even this grumpy old man appreciated.
The City even collaborated to renovate the old Park Block playground into this
Bit then the school decided to move – for whatever reason. Hmm…what could it be?!?
Maybe they just outgrew the building.Ok, ok…I know this is running long. I think I’m wrapping up. I mean wearing myself out.
Let’s compromise and call it both.
The corner pictured above used to be a favorite pre-turn of the century coffee haunt of mine called Torrefazione. I actually made it a hangout for my main character in No One Of Consequence.
Anyway, Starbucks bought the small chain out and then closed them all up! Talk about cutthroat.
The Torrefazione family responded by leasing the restaurant space in the new high rise condo that was built on the opposite corner and opened Caffe Umbria.
Take that Charbucks. The family’s roastery May be Seattle based, but at least one of the family members lives locally and drops in to watch soccer with his toddlers on the weekends.
It was a very Portland thing to do, protest opening a business like that…even if selling out wasn’t so Portland.
The three pics below all represent businesses being priced out or rumored out of their homes. The Beneficial Bank looks nice, right?
After being forced out of its home for a couple of years once it’s space was slated for a high rise residential project, it was welcomed back with a paint job. Seems funding may have hit a snag. Who knows? Anyway, score one for the little guys.
Snow Peak, on the other hand, is just beginning it’s rumor based adventure. There’s a new “Coming Soon” window sign up a few blocks away. It coordinates well with the rumor of a new mid rise building in its current spot.
What I can’t figure out, though, is the how of that mid rise rumor. The Snow Peak space sits between the aforementioned and newly remodeled Rogue Brewery space on one side and an architecture firm on the other side.
I’m kind of worried that the architect space will come down to make way – along with Snow Peak – for another high rise apartment building.
It’s right across from The Rodney – so maybe that intersection isn’t out of the redevelopment woods just yet.
Even more surprising is the answer Snow Peak represents to my “How many” question from earlier.
Snow Peak is in the Pearl’s crowd of outdoor and cold weather clothiers.
REI, Nau, Fjallraven (with TWO locations in the Pearl!), North Face, Patagonia and Icebreaker…and I know that I missed some!
Ironically, for as persistent as outdoor clothing stores are in the Pearl, home stores don’t fare so well. The Tactics skateboard shop above is a new notion for a space that was a gallery and then a home store and then a home store and then nothing. Likewise, the brick warehouse across the street was a furniture store and the space across the alley was also a home store that became a CrossFit gym for an hour or so before settling into its current sweatpants and ponytail version of an empty space.
In a further fit of irony, the CrossFit space was subdivided when it was a home store to reduce the size of the shop and thereby the overhead. It was slated to become Jimmy Mak’s new home before the cancer resurfaced. Then it became an “event space”.
Let’s hope the Oba! space fares better. Eventually.
Design Within Reach expanded last year to the above space, leaving its old two-story space vacant.
It looks way more inviting now, so I’m glad. But it got me wondering.
Maybe the evolution/solution to our commercial real estate vacancies is going to be something that Design Within Reach, Snow Peak and Nossa Familia have all already learned – along with countless college students.
The way to control real estate expense is to move.
It may cost more in the short term, but overall you leverage the expense downward.
It forces the market price correction that is necessary to offset the empty space and make those spaces affordable. I mean, commercial real estate brokers could just do the right thing and re-write current leases.
But how likely is that?
The banks didn’t do it with mortgages during the real estate crisis until Obama forced them to. Somehow, I don’t see the commercial real estate industry doing the right thing here.
Then again, investment brokers are doing something similar right now, by cutting transaction fees all the way to $0. I’m prepared to be pleasantly surprised.
I wouldn’t mind seeing out city planners get a little more involved in approving all of this ground floor commercial space.
Or not approving it.
I think there’s a case to be made for more ground floor live/work space.
With the Pearl spanning 11 blocks on the North to South expanse, surely we could limit the commercial space on the ground floors to maybe 4-6 of those blocks? I mean, residence density is our goal here, not excess vacant commercial space.
We don’t need a brewery, yoga studio, flower shop or restaurant on every block.
I think the current situation has proven that.