Could a 20-story apartment tower be coming to the Lloyd District?

PORTLAND, Ore. -- A 20-story tower with 238 apartments and ground-floor retail space could be the start of something big in the Lloyd District for a San Diego real estate investment firm.

American Assets Trust is seeking permission to construct the apartment project at Northeast Holladay Street and Ninth Avenue from the city of Portland.

The real estate trust submitted a permit request to the city's major projects group on March 18. The project is under review.

GBD Architects is designing the tower. Turner Construction Co. is on board as general contractor for the project, which has an estimated construction value of $7.6 million.

The move comes just two years after the San Diego firm made a big splash in Portland with a one-two series of acquisitions. It purchased First & Main, 100 S.W. Main St., in March. A few months later, it paid $92 million to Ashforth Pacific for a portfolio of Lloyd District holdings. The Lloyd portfolio included a development project that could add as many as 750 apartments and other amenities. At the time, it said it would press ahead with the development.

American Assets is the latest to wager that Portland's tight apartment market will continue to absorb new high-end projects.

Prominent examples include tower projects in the Pearl District from Hoyt Street Properties and Robert Ball, as well as a 375-unit complex atop a former condo project on Hayden Island.

Last month, Vancouver developer Michael DeFrees submitted plans for the first two buildings of Salpare Bay, at 499 N.E. Tomahawk Island Drive on the east end of Hayden Island.

The rush to develop has triggered concern that Portland may end up with an oversupply of apartments. Notably, Joe Weston, one of the city's most prominent developers, has said the market is ripe for a bubble.

Norris & Stevens Inc. offered a different take in its most recent apartment journal. It predicts the market is at least several years away from reaching the over-saturation point, but notes the recession left it severely under supplied.

"While there are many new projects in the planning stages or being construction, it will take time to catch up with demand. In addition, the Oregon economy appears to be emerging from many years of stagnation. Job growth could inspire more in-migration and population growth which will keep apartment demand high," it said in an article authored by Chase Brand, multifamily investment broker.

The Portland Business Journal is a KATU News partner.