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Friday, September 29, 2023
Sept. 29, 2023

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Owner of part of EastRidge gives it up

Scanlan Kemper Bard Companies, which had 27 buildings in business park, defaults on $44 million debt


Four years after buying part of Vancouver’s EastRidge Business Park, a Portland-based investment firm will now walk away from the upside-down real estate venture.

Lease revenue wasn’t covering the property’s monthly mortgage payments, said James Paul, a senior vice president with Scanlan Kemper Bard Companies, a private real estate investment firm that purchased a 27-building portion of EastRidge for $62 million in 2006. Now the company has defaulted on its $44 million mortgage debt to Aegon, loan operator for the park’s lender, Iowa-based Investors Warranty of America Inc.

Investors Warranty could not be reached for comment.

“The lender has decided to foreclose,” Paul said.

He said the ownership change will be imperceptible to tenants of the sprawling EastRidge Business Park, which fronts state Highway 503 (Northeast 117th Avenue) north of the Padden Parkway.

Scanlan Kemper Bard, also known as SKB, owned about 36 acres of the 90-acre park, controlling 466,634 square feet of retail, office and light industrial space. It did not own most of the sites on the eastern half of the mixed-use park, east of Northeast 122nd Avenue.

Forfeiting EastRidge came down to a choice between giving up the troubled property or putting more money into it, a dilemma for commercial real estate investments across the nation, especially those purchased at the height of the market from 2005 through 2007, according to local real estate experts.

“If the market changes and won’t support the rent, then the investor has to either keep taking from their pocket or wait until the rents come back,” said Byron Roselli, a vice president and commercial real estate expert with Eric Fuller & Associates Inc. in Vancouver.

With a vacancy rate of 26 percent, EastRidge hasn’t lost a lot of tenants since SKB purchased the site. But the company had anticipated lease rates would increase.

“Initially, it was very successful,” Paul said.

That changed after the third quarter of 2008, a period marked by the nationwide credit crunch, which brought mortgage investment growth to a screeching halt.

“After the crash, the rents started dropping precipitously, like 25 percent,” Paul said.

According to SKB’s website, the company manages a $2.6 billion portfolio that includes about 19.3 million square feet of commercial property.

Paul said the company continues to see market potential for EastRidge, which is home to a wide variety of start-ups, retailers, distribution businesses and contractors.

“We believe the property has great potential and it will come back strong in the near future,” Paul said.