Trust Unloads Four Buildings in Salem

SALEM, OR-A family trust recently sold four adjacent buildings in Downtown Salem. All except the smallest sold to a tenant. The pick of the litter is the Steusloff Building, an 11,000-sf concrete structure on the corner of Court and Liberty, the Hollywood and Vine of Salem, says Wes Bouche, vice president of Pioneer Trust Bank, which managed the properties for the Steusloff family.

The building is anchored by a Starbucks coffee shop and Jackson Jewelers, a tenant of the building since 1944 and also its new owner. Phil and Ralph Jackson–their father opened the jewelry store there in 1944–had to pay $557,000 in order to out bid another buyer bent on getting his hands on it. Phil tells GlobeSt.com the building realistically should have sold in the $350,000 to $400,000 range, but that it’s better to own the building at that price than to not be in control after nearly 60 years in the facility.

“We’ve paid for numerous improvements to this building over the years–we put on the granite front, remodeled three times, redid all the HVAC–and to relocate could cost $300,000 and we’d never find a better location, so we had to look at the big picture” says Phil, who hopes to find a tenant for the vacant second floor of the building. “This way, if the store isn’t passed onto the next generation, at least we’ll have something marketable.”

As for the price–better than $60 per sf even if you include the basement, which is several feet below grade and probably best left for storage–it is twice what the 30,467-sf Franklin Building sold for just a couple blocks away on the corner of State and High Streets, directly across from the Marion County Courthouse, another prime location.

Still, it’s worth it, says Alex Rhoten, designated broker of the local Coldwell Banker Commercial franchise and partner in EcoWest, the new development company that bought the Franklin Building. “(Court and Liberty) is a high-impact corner and there’s value in location,” says Rhoten. “I think it’s a solid investment for them.”

The Steusloff family built the Steusloff Building in the early 1900s. Phil says the family used to be in Salem, but the second and third generations are spread out now. Bouche says the current generation that owns the building lives in Atlanta and wanted to 10-31 exchange their dollars into that hot market.

The other buildings sold by the trust–all constructed of brick and block–include a 3,400–sf building at 387 Court that sold for $297,000, or $87.35 per sf; a 4,000-sf building that sold for $250,000, or $62.50 per sf, and; a 750-sf building that sold for $80,000, or $106.66 per sf. The names of the buyers were not immediately available.

“The tenants didn’t have first right of refusal and we gave it to them,” says Bouche. “They didn’t want somebody else coming in. But they should make (the premium they paid) back in the first year; most of them (in the form of rent) have already bought the building several times.”