The firm is adding a new model to its tradition approach of holding assets long-term
By Jon Bell – Staff Reporter, Portland Business Journal
Aug 8, 2019, 8:04am PDT Updated Aug 8, 2019, 3:34pm EDT
Anyone who’s familiar with the Portland commercial real estate scene knows the Menashe family. For more than 45 years, Menashe Family Properties has been a tried-and-true name in the local CRE market.
And anyone familiar with the Menashes likely knows their traditional approach to real estate: acquire properties, lease them up and hold onto them for the long term.
But with the recent sale of an office campus in Kent, Washington, that Menashe Properties acquired just over three years ago, the firm is broadening its strategy. Rather than seeking assets to hold long-term, Menashe Properties is now also on the hunt for value-add properties that can be run efficiently — and profitably — for a few years, then sold when the right opportunity arises.
“This sale marks a new model for us,” said Jordan Menashe, CEO and principal at Menashe Properties. “Our traditional model has been to buy and hold good, value-add assets long-term. We’re not going away from that, but we now have this other model to use as we see fit.”
Barry Menashe (left) is the founder of Menashe Properties. His son, Jordan, is now CEO.
Menashe Properties paid $26.5 million for the three-building, 225,000-square-foot Creeksides at Centerpoint office complex in Kent, Washington, in 2016. It was the first acquisition for the firm outside of the Portland metro region. At the time, the complex was only about 60 percent occupied.
In the ensuing three years, Menashe Properties leased the complex up to about 98 percent at the time of the recent sale. Menashe said filling up the complex, running it efficiently, being responsive to tenants and bumping rents all helped create cash flow throughout the three-plus years that the firm owned it.
The company, which was represented by Logan Greer and Kevin Freels of JLL in the deal, sold the complex to Lake Washington Partners for $39 million.
“We were excited to be able to execute our business plan successfully,” Menashe said. “Pulling out profits starting from year one and selling the property for 150 percent of the original purchase price in just over three years was a win for our team and will help us push forward with future growth.”
That’s another key component of the Menashes’ strategy moving forward: growth. Menashe said the Creeksides at Centerpoint sale will fuel another significant acquisition, which he referred to only as a “replacement property.” If all goes as planned, that deal could close in about a month.
The company is also monitoring its options for an eight-building office complex it acquired for $35.5 million in Aurora, Colorado, back in 2017. Selling it, the way the Menashes sold Creeksides, could be an option in the future.
“If you buy right and execute your business plan, it can be a humongous catalyst for growth,” Menashe said.