A trio of brand-new retail-office buildings in Battle Ground’s largest mixed-use project are up on the auction block for a low starting bid, according to the company marketing the foreclosed structures off Southeast Rasmussen Boulevard and Commerce Avenue.
The minimum bid price is set at $1.75 million for the buildings, situated southwest of the two streets. The properties are appraised at $2.9 million, according to the business handling the auction.
However, prospective buyers of the three buildings in the $200 million Battle Ground Village could be in for quite a wait before the still-sluggish commercial real estate market rebounds enough that the sites can be sold at a profit. Spokane-based Inland Northwest Bank foreclosed on a development loan for the buildings.
Altogether, the space adds up to about 17,000 square feet, approximately the same area of four small boutiques at a shopping center or mall.
Just one space — about 900 square feet — in one of the three buildings has been leased. It is occupied by a home furnishings and décor shop, said John Rosenthal, president of Realty Marketing Northwest, a Portland company accepting bids for the Battle Ground buildings.
Sealed bids are due by May 25.
Marketing Northwest’s promotional materials say the rest of Battle Ground Village is 99 percent leased. However, the development’s website — http://www.bgvillage.com/leasing/properties.php — shows nine out of 31 retail and commercial spaces still vacant, although the largest spaces are occupied in the $200 million project, which was launched in 2006.
Battle Ground Village was envisioned as a European-style township with more than 125,000 square feet of retail space. A planned 375,000 square-foot corporate center has not yet been started.
So far, the mixed-use development includes pedestrian-oriented streets, a public library, several shops and restaurants and a development of 40 townhouse units designed to allow small business owners to combine living and working space.
The complex was conceived by husband-and-wife Vancouver developers Dennis Pavlina and Carmen Villarma.
Pavlina, president of The Gold Medal Group Inc., planned and developed the project, with its public library component and space for shops and offices. Villarma, president of The Management Group Inc., took on leasing and managing buildings related to the project.
At first, retail businesses and restaurants quickly signed on to lease space in the development, located on the east side of town near fairly new residential developments. Battle Ground Village tenants include Clark County’s only brew pub location of Portland-based Laurelwood Brewing Co. and upscale furniture-design store Distinctively Home.
But the three foreclosed buildings came on the market in 2008 and 2009, a time when few retail businesses opened and many downsized or closed.
“It was just a tough economic situation for the developer,” said Rosenthal, whose company markets and auctions off all kinds of properties, from commercial and industrial sites to ski resorts and private timberland.
Meanwhile, demand for retail space is still on the decline, especially in Clark County’s smaller cities, such as Battle Ground, said Pam Lindloff, an associate vice president and retail expert with NAI Norris Beggs & Simpson in Vancouver.
“Absorption right now is not very strong,” Lindloff said, “especially for the outlying areas.”
She estimated it would take buyers of the buildings at least two years to fill the space, which is farthest away from the entrance into the mixed-use development.
“It’s going to be a challenge,” Lindloff said.
