HFO’S $60.8M Gresham Sale Signals Private Capital’s Return to Suburban Multifamily [6/30/26]

Private capital is returning to the Portland suburbs. This week, San Diego-based MG Properties closed on two Gresham apartment communities for $60.8 million, acquiring the 175-unit Parkside Apartments for $42 million and the 162-unit Mountain High Apartments for $18.8 million. HFO’s $60.8M Gresham transactions totaled 337 units and was financed through Fannie Mae. HFO Investment Real Estate’s Tyler Johnson and Cody Hagerman represented the parties.

The deal is notable for several reasons. It reflects continued institutional appetite for suburban workforce housing with stable operations and agency-financing eligibility. For owners of similar products in the Portland metro, the transaction provides a meaningful data point on pricing and buyer demand in a submarket that has sometimes struggled to attract out-of-state capital.

Closer to the core, Portland is making decisions this week that will shape development for years.

The Portland City Council completed two days of public testimony on the Lloyd Center redevelopment plan and will vote July 8, one month before the mall is scheduled to close. Mall co-owner Urban Renaissance Group’s master plan calls for thousands of new homes at various price points, retail, public plazas, and a 4,000-seat live music venue already under construction. Two preservation groups have appealed the Portland Design Commission’s unanimous approval of the master plan, arguing the commission failed to fully consider preserving the ice rink and did not adequately respond to public testimony. A vote to uphold the approval would clear the path for one of the most significant infill housing opportunities in inner Northeast Portland in a generation.

Meanwhile, the Moda Center renovation is consuming political oxygen that Portland can ill afford to spend on a single building. Trail Blazers owner Tom Dundon appeared at the Portland Metro Chamber annual meeting June 24 and made clear he views his ownership of the team as his financial contribution to the city. Renovation cost estimates stand at approximately $482 million. The state has committed $365 million in bonds, Multnomah County has signaled willingness to contribute $88 million, and Portland has pledged at least $120 million without identifying a funding source. Three city councilors have spoken publicly against using climate fund dollars or Prosper Portland economic development money for the arena. City councilors face an Aug. 12 deadline to vote on a term sheet.

In Eugene, the story is student housing supply.

Three new apartment projects near East 13th Avenue and Alder Street are generating noise complaints and construction disruption near the University of Oregon campus. The Mark at Eugene, Chapter Alder, and The Ellis are either under construction or replacing the former PeaceHealth Hospital site. For owners with properties near the university, the construction phase creates near-term tenant retention challenges, while the longer-term addition of supply in the student market will affect competitive dynamics and pricing.

Oregon’s utility cost outlook shifted this week in ways owners should follow closely.

Pacific Power filed a general rate case seeking an 8.6% overall rate increase, or 10.8% for residential customers, with a proposed effective date of April 2027. The company sought an interim 2.8% increase beginning June 4. Oregon regulators denied the interim request in late May, saying Pacific Power failed to demonstrate sufficient urgency, but the full rate case review is underway. The company’s financial pressures are real: it has paid more than $2.2 billion to settle wildfire lawsuits and faces rising insurance and infrastructure costs. Owners served by Pacific Power across rural and eastern Oregon should model an 8.6% utility cost increase into 2027 pro formas now, not after a decision is issued.

Portland General Electric separately filed a rate proposal under Oregon’s POWER Act that would shift infrastructure costs toward large data center customers. If approved, the proposal would raise data center rates approximately 29%, while reducing rates for residential customers by 1.3% and small business customers by 3.7%. The Oregon Public Utility Commission is reviewing the proposal. A favorable outcome for residential ratepayers would be a modest operating cost benefit for Portland metro multifamily owners.

Oregon’s governor has heard enough from her own advisers about the state’s economic trajectory.

Gov. Tina Kotek’s economic advisory council released a 33-page report this week describing Oregon as second-to-last in the nation for employment growth, with 41% of Oregonians living below the federal poverty level or unable to afford basic needs. The council is calling for tax cuts, elimination of a state climate program, and $250 million per biennium in infrastructure investment. Whether those recommendations move in the legislature is uncertain, but for investors and developers the signal matters: even the governor’s own team is acknowledging that Oregon’s policy environment has been a drag on economic competitiveness.

That message lands in the same week that a Brookings Institution report confirmed 42% of middle-income Vancouver-Portland area residents cannot afford basic necessities. The same study found that 42% of Black, 49% of Asian American, and 61% of Latino or Hispanic middle earners face the same constraint. This is not an abstract affordability metric. It is a direct read on tenant financial fragility in the workforce housing segment, and owners should treat it as a leading indicator for late payments and turnover pressure.

The federal picture this week is the biggest national housing story in two decades, and it still isn’t settled.

Congress passed the 21st Century ROAD to Housing Act with overwhelming margins, 85-5 in the Senate and 358-32 in the House. The bill is the most significant federal housing legislation since the early 2000s. It includes streamlined environmental review for infill projects, a grant program for pre-approved housing designs to reduce local approval timelines, increased FHA multifamily loan limits, manufactured housing reforms that could cut per-unit costs by $5,000 to $10,000, expansion of the HOME program, and financial incentives for jurisdictions that permit housing above the national median rate.

President Trump canceled the signing ceremony on June 25, conditioning his signature on congressional passage of a voter ID bill that has stalled in the Senate. House Speaker Mike Johnson said Sunday he would send the bill to Trump on Monday. Under the Constitution, the president has 10 days to sign or veto a bill after receiving it. If he declines to act, it becomes law without his signature. The bill’s fate is not final, but the provisions are real and worth understanding now.

Finally, a study from another Portland confirms what Oregon has lived for nearly a decade.

Portland, Maine commissioned its own study of its inclusionary zoning ordinance and got an answer it did not want. Under IZ 1.0, 40 projects triggered the policy, producing 2,065 approved units and 1,436 completed. After the city adopted the stricter IZ 2.0 in 2020, only 18 projects triggered the policy. Completed units fell to 167. The project delivery rate dropped from more than 80% to under 10% over the last five years. The regulatory cost per market-rate unit rose from approximately $11,111 to $60,667. Portland, Maine’s Housing and Economic Development Committee effectively deferred action for at least six months after receiving the report.

This matters in Oregon because the pattern is identical to what Portland, Oregon experienced after adopting IZ in 2016. The Oregon Legislature addressed this earlier this year with SB 1521, which requires Portland-area jurisdictions to fully fund any IZ cost burdens imposed on developers. Similar to HFO reports on the issue, the Maine study provides independent academic confirmation that IZ mandates without full offsets suppress housing production. Any Oregon or Washington jurisdiction considering IZ expansion should study these numbers carefully.

HFO Investment Real Estate is Oregon’s and SW Washington’s leading multifamily brokerage by transaction volume. Subscribe to our Washington State edition: linkedin.com/newsletters/multifamily-marketwatch-washington