Solomon federal courthouse sold for cheap
Downtown Portland buildings keep selling at surprisingly low prices
The Gus J. Solomon U.S. Courthouse at 620 SW Main St. was purchased this month by Vancouver-based investor Richard Terrell for $1.8 million, the latest example of major downtown buildings selling for shockingly low prices.
Before Portland’s real estate “doom loop,” the land alone could have been worth almost 10 times that amount, based on comparable Multnomah County real market valuation. Conventional market value estimates (not including the seven-story building) would have fallen into the $16 million range, though true market value is what someone will pay. Reliable building valuation requires a thorough appraisal, but using the real market value of $203 per square foot for one comparable property, the building would be worth $36.5 million, bringing the total value of the acquisition to $52 million.
The Government Services Administration put the Solomon building on the market in May, setting no price—an action opposite of common practice that invites low-ball offers. And the administration gratuitously advised that it would cost $76 million to modernize the 92-year-old structure—further signaling openness to modest bids. Terrell’s offer met the bar.
The 200,000-square-foot renaissance revival art deco structure is on the National Register of Historic Places, which may or may not add to the property’s value. The listing does not forestall demolition and can allow a tower in its place. And the CX zoning allows for new or remodeled office, retail and residential uses — with city height limits of up to 460 feet.
Consequently Terrell can pretty much do anything with it. But if he pursues restoration, he is eligible for both property tax deferral or moratorium for up to 10 years and a 20% investment tax credit on the cost of rehabilitation for historic preservation.
According to a recent Colliers report, third-quarter 2025 office vacancy rates in greater Portland rose to a record-high 26.6%, while downtown Portland fared worse, with vacancy rates rising to 34.6%. These are record highs and still downtown property owners say vacancy is much higher than reported.
Portland Prosper bought the Centennial Mills properties in 2000 for $7.7 million and sold them last year for $1.25 million, an 84% loss of prior value. Montgomery Park, valued at $255 million in 2019, sold for $33 million last year, an 83% loss of prior value. The US Bank Tower, valued at $372 million in 2015, recently sold for $45 million, an 88% drop.
A recent report by the Urban Land Institute showed Portland at the bottom of the stack for real estate investors in terms of investment prospects among U.S. cities.
In simplest terms, greater vacancy means failing cash flow, unpaid mortgage and tax payments and ultimately less investment value. This vacancy crisis perpetuates foreclosure and non-performing asset sales. Without a government response, there is no sign a reversal has begun or is imminent. Competing with other downtown buildings desperately seeking tenants, Terrell must be prepared to wait—perhaps a decade or longer—before expecting profitable operation.
Kurt Misar is a commercial broker with Capstone Real Estate Services.
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Very informative. It’s virtually impossible for me to look at this in any way but as confirmation that Portlandia has entered into a Doom Loop of declining property tax revenue leading to declining services leading to a decrease in in livability and public safety. All of this with a backdrop of governmental incompetence, recently underscored by JVP and her mismanagement of Preschool for All, the so-called “Deflection Center”, and our supposedly nonpartisan City Council being co-opted by a radical fringe junkeetering to Vienna and hell-bent on underfunding both police and the most rudimentary efforts to clean up the street squatters that we built all of these facilities to supposedly shelter. When you throw in the Mayor’s new City Administrator candidate who recently departed Greeley, Colorado with a non-disclosure agreement, (who hires someone like that?) it all adds up to looking like Detroit 30 years ago.