Trailblazing: Sienna Lofts, Gresham, OR
Reinventing a Community for Residents and their Furry Friends
There is something about a dog’s sense of smell and ability to sniff out the unexpected. Like Rover, we hunted far and wide before uncovering Sienna Lofts in the quaint Portland, Oregon suburb of Gresham.
Sienna Lofts was built in 2004 by a California developer. The developer apparently didn’t get the memo about Portland’s annual rainfall (~39”) since the buildings were not appropriately weather-proofed. The developer sold the property in 2006 and the new owner soon became aware of the building envelope deficiencies by virtue of the resulting water damage. The property’s original developer and contractors settled a construction defect lawsuit with the heirs of the new owner (the buyer passed away prior to the resolution of the lawsuit) and the heirs received a large check intended to remedy the buildings’ design/construction issues.
The heirs, who had little commercial real estate experience, struggled to complete the repairs in a timely manner while the clock was ticking toward the maturity date on their balloon mortgage. Under pressure and with the exterior repairs only 40% complete, the owner listed Sienna Lofts for-sale “as-is” with a brokerage firm with whom Pathfinder had a longstanding relationship. Our ears perked up when the phone rang and we sensed an opportunity to acquire what could be a great property once we resolved some of these challenges.
Sienna Lofts is a 75-unit apartment community situated on 3.15 acres. It is comprised of eight studios, 63 one-bedroom and four two-bedroom apartments averaging about 750 square feet. We believe the property’s submarket contains a shortage of one-bedroom apartment and Sienna Lofts’ weighting of one-bedroom and studio apartments provides the property with a competitive advantage. We also believe the City of Gresham, which has one of the lowest vacancy rate in the Portland Metro Area (just 1.4%!), is well positioned for superior rent growth as Portland’s core markets continue to break rent records and many residents move east in search of value.
After our purchase, we immediately began to implement the building envelope repairs. We are also renovating the decade-old common areas and unit interiors with an aim to modernize the flooring, appliances and finishes.
We also saw an opportunity to create an enhanced living environment for the residents’ furry friends by taking an underutilized area of the property and constructing a doggie “Bark Park”. At Pathfinder, we love our dogs (we make no bones about it) and Portland has been voted the #1 dog-friendly city by DogTown USA multiple times. We’re excited to progress with our business plan at Sienna Lofts and we’re confident the end result will be well received by humans and canines alike!