U.S. Bank will not renew its lease in Portland’s Big Pink skyscraper, the latest sign of turbulence in downtown’s commercial real estate market.
The bank communicated the decision to bank employees on Wednesday.
U.S. Bank leases approximately 222,000 square feet inside the tower, formally called U.S. Bancorp Tower, according to the latest available data from real estate analytics firm CoStar.
“It’s important to note that we’re not exiting downtown Portland – we will continue to support our downtown clients through our branch presence as well as our client center at 900 S.W. Fifth Ave.,” the bank said in an email sent to employees and viewed by The Oregonian/OregonLive.
The email does not give a reason for the decision.
In a statement, the bank said it doesn’t expect any job cuts or changes in service at local branches. U.S. Bank will continue to operate its four branches in the downtown area.
“The Portland area is a significant part of our company history and we’re committed to maintaining our presence and involvement there, which is why we chose it as one of our hub markets,” the bank said in a statement.
Portland’s central city had the highest office vacancy rate of the 50 largest downtown office markets in the country at the end of last year, according to a report by real estate firm Colliers. Brokerage CBRE most recently reported that nearly a third of central Portland’s offices were empty.
The loss of a marquee tenant marks the latest setback for Unico Properties, a powerful landlord that has seen its portfolio diminished in the wake of COVID-19’s reshaping of office culture in favor of hybrid schedules.
The area around 111 S.W. Fifth Ave. has experienced open drug use, crime and graffiti, though public-private initiatives have aimed to address the issues in the so-called Ankeny Triangle. As part of its security measures, Unico set a 420-pound robot to patrol its property, feeding information to security personnel indoors. The recently opened Midtown Beer Garden food cart pod nearby is regularly busy on weekdays.
“All of us at Unico are incredibly disheartened to hear this news today,” Brian Pearce, a Unico executive vice president, said in an emailed statement to The Oregonian/OregonLive. “Our teams have been working very closely with U.S. Bank over the past four years to address their concerns and encourage their employees to return to downtown.”
Big Pink is a jewel in Seattle-based Unico’s local holdings. But more than half – nearly 583,000 square feet — of Big Pink’s approximately 1 million square feet was available for lease as of the second quarter, according to data from Colliers.
Two large tenants — pollster SurveyMonkey and law firm Miller Nash — declined to renew their leases at Big Pink last year, together accounting for roughly 100,000 square feet for Unico to fill in Oregon’s second tallest building.
Most of the U.S. Bank employees at Big Pink will move to Columbia Center in Gresham, a 365,000-square-foot building which the bank has owned for decades. The bank’s sales staff will mostly move to locations in downtown Portland and Vancouver. The bank expects most of the moves to happen before the end of the year.
“It is a severe blow to the downtown community and the City of Portland to lose such a significant, urban-oriented business to its suburban neighbors,” Unico’s Pearce noted. “This is a dramatic statement and decision by the Banks’ leadership on their view of the state of Portland.”
U.S. Bank holds more than 22% of bank deposits in the Portland metropolitan area, more than any other bank, according to FDIC data. It has 67 offices here, also the most of any bank.
The bank is based in Minnesota, but it takes its name from the U.S. National Bank of Portland, which opened in 1891, and which later merged with a Minneapolis bank.
It remains a major regional employer, with 3,144 employees here, according to the Portland Business Journal’s most recent Book of Lists.
– Matthew Kish covers business, including the sportswear and banking industries. Reach him at 503-221-4386, mkish@oregonian.com or @matthewkish.
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