Nike has bought 15 acres and leased a three-story building to expand its Beaverton-area corporate headquarters and accommodate expected hiring, company officials confirmed Tuesday.
The largest Oregon-based company does not have specific plans for the acreage west of the campus and might not develop the land for years, spokesman Scott Reames said. But in the short term, the leased building, at 1345 S.W. Burlington Drive, will help Nike relieve an office space crunch as it maintains steady employment growth, he said.
"That's why the facility so close to the campus is appealing," Reames said.
The growth at Nike bolsters the state's economy, especially the Sunset Corridor west of Portland, a tech-heavy region that has lost thousands of jobs in the past three years. It also adds to a nascent recovery in the corridor's office market, which has suffered the region's highest vacancy rate -- about 30 percent -- since 2001.
"There's really two bellwethers on this side of town: It's Nike and Intel," said Coby Holley, vice president of the Northwest Division of PS Business Parks, which owns office space in the area. "Both appear to be healthy and, in some cases, growing and expanding."
Intel will start construction in December on a building at its Jones Farm Campus in Hillsboro that will house a computer center supporting its operations in Oregon. The company has spent $400 million refurbishing its Aloha campus, which will reopen in January. Neither expansion will add many employees.
Nike's new office lease will enable the company to handle expected employment growth, and existing departments that are spread among different buildings could consolidate there, said Jim Petsche, Nike's director of corporate facilities. The company would not say how many employees it expects to add to its work force of 5,100 based at the campus.
But don't expect bulldozers on the new acreage any time soon, Reames said. Nike bought about 75 acres on the south side of Jenkins Road in 1996 and has yet to develop it.
The Nike World Campus, opened just outside Beaverton in 1990, has 1.8 million square feet of building space on 175 acres. The company opened the Tiger Wood Center, a conference facility, and the Lance Armstrong fitness center in 2001. Nike last built offices on the campus in 1999, when it added four buildings.
At prevailing market rates, the lease and land acquisition could command more than $10 million in spending by Nike over six years, industry experts said. The land alone cost $2.7 million, Nike said.
The company's six-year lease of the 105,272-square-foot Rogue Building, part of Woodside Corporate Park, is the biggest new office lease in the corridor in several years in terms of square footage, brokers said. The company's lease single-handedly booked 10 percent of the office space available in the Sunset Corridor, according to research by the Grubb & Ellis brokerage.
The corridor has about 1 million square feet of vacant office space, including about 500,000 square feet of buildings that have never been occupied, Holley said. The Rogue Building, one of a smattering of buildings named for Oregon rivers in the Woodside park, has been vacant for four years.
Nike would not disclose the rental rate of the building's lease, which is effective Dec. 31.
Holley pegged the rate at about $17.50 a square foot a year. Nike considered leasing space owned by Holley's PS Business Parks in its search.
Bradford Fletcher, managing director of Grubb & Ellis' Portland office, represented Nike in its lease and purchase negotiations and, with Grubb broker Dave Squire, previously represented IBM in its sale of the property to Wells Real Estate Investment Trust. Buzz Ellis and Ben McInnis of Doug Bean & Associates represented Wells in the lease negotiations.
Fletcher said he would not comment on specifics of the Nike deal, citing a confidentiality agreement. He called the deal a "strategic and compelling real estate play" on two attractive properties in an improving market.
"The transaction was perfectly timed and makes ultimate sense as it rounds out (Nike's) corporate campus," Fletcher said.
The lease also was well-timed good news for Fletcher's Grubb & Ellis brokerage. The firm suffered a black eye earlier this month when the AmberGlen Business Center, which Grubb leased on behalf of owner State Farm Insurance, was sold in a deal brokered by the new Portland office of GVA Kidder Matthews.