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Developer Walt Bowen had hot dice going for him when he swept away a square block of popular food carts on Southwest Alder Street and broke ground on his 35-floor tower.
It was July 2019. Tech companies were flocking to Portland from inflated, overcrowded San Francisco. Hotels were full of tourists looking to swill pinot noir, lap up Salt & Straw, and wander the stacks at Powell’s City of Books.
Bowen cashed in on the boom. He built a nine-story tower in the Pearl District and sold it for $87.5 million, setting a city record at $563 per square foot. Across town, he leased up a 19-story building with a Radisson hotel and offices for Amazon.
After two huge wins, he was ready to gamble again. A new project, called Block 216, would be his most ambitious ever. It would have five floors of prime office space, a Ritz-Carlton hotel, and 132 Ritz-Carlton condominiums.
At a groundbreaking ceremony, Bowen thanked investors who had put up some of the $600 million he needed to build his trophy tower. He thanked a California company called Mosaic Real Estate Investors that had made his $460 million construction loan in less than 30 days—light speed for something that large.
“You won’t be disappointed,” Bowen, now 82, told them.
That may be the most ill-timed guarantee in the history of Portland real estate. A year later, the world locked down because of COVID-19. Hotels emptied. People fled urban condos for ranch houses in the suburbs.
Bowen pressed on, selling assets to keep Block 216 climbing skyward. An entity controlled by his old friend Joe Weston bought an office building beside the Marquam Bridge from him for the fire-sale price of $13.7 million in July 2023. Bowen had purchased it for $35.4 million just eight years before. Last year, he sold his estate in the West Hills. In February, he sold all the furnishings. (Weston didn’t return an email seeking comment on the deal. Bowen’s company, BPM Real Estate Group, didn’t return emails or telephone calls.)
The sales haven’t been enough. It appears Bowen’s dream tower will instead be a 460-foot tombstone for his career (there’s a metal plaque with his picture on it already). As first reported by WW on March 5, the construction lender for Block 216 said in an earnings report that “ownership and serial asset disposition on the components” would be “the best net present value outcome” for the loan.
Translation: take the keys and sell the building in pieces.
How did this happen? As Block 216 wobbles toward likely foreclosure, we answer that question and others.
Who is Walt Bowen?
At the groundbreaking for Block 216 in 2019, Bowen called himself a “poor kid” from Southeast Portland who liked to go downtown to see double features. He attended the University of Oregon and graduated from Portland State University. He made his fortune by starting a network of assisted living facilities in the Western U.S. In 1993, he bought 40 acres on Northwest Saltzman Road and built a 16,828-square-foot Tudor-style mansion with seven bedrooms. His wife died of breast cancer in 2006. He has two children, according to her obituary. One is a filmmaker who expresses doubt about vaccines on his Facebook page.
Why did he build this tower?
As a wealthy man, Bowen often stayed in five-star hotels, and he always thought Portland should have one, he said at the groundbreaking. The dream nagged at him for more than two decades, but he figured the city couldn’t support such luxury. He changed his mind in 2018, amid that boom, and submitted plans for a mixed-use tower that would have a high-end hotel. In June 2019, one month before groundbreaking, he sold off what remained of his assisted living properties and went all in on Block 216. “He sold almost everything and put it all on red,” says one local financier who declined to be named.
Was this considered a good idea at the time?
It was considered risky. In a 2018 interview with the Portland Business Journal, Bowen said the building boom might be “in the eighth inning,” but he remained “bullish on high-quality, well-designed, newly constructed office space in Portland’s urban core.” In 2019, Jeff Manning and Elliot Njus of The Oregonian obtained Bowen’s pitch to investors, which showed that Bowen planned to charge between $1,350 and $1,900 per square foot for the 138 Ritz-Carlton residences. Those were “prices never before seen in Portland,” Manning and Njus wrote. Bowen forecast that the hotel would get $450 a night by its fourth year in business, “nearly double the current rates charged by the city’s most expensive luxury hotels.”
So what went wrong?
Everything short of a full-rip earthquake along the Cascadia subduction zone (coming soon!). COVID-19 arrived in March 2020, just nine months after Bowen broke ground on Block 216. George Floyd was murdered that May, prompting protests, then riots, that turned downtown Portland into a rough scene. “It would have been tough in a good market, but then COVID hit,” said Jim Mark, chief executive of real estate firm Melvin Mark.
The result? Bowen has sold just 8% of the Ritz residences, according to his primary lender, at an average of $1,105 per square foot, far below what Bowen had hoped. That suggests as many as 120 of the tower’s condos are currently sitting empty.
Who is owed money?
New York-based lender Ready Capital is on the hook for $565 million. Ready holds a $503 million note from Bowen’s company and also owns $62 million in preferred equity in the project. Ready Capital inherited the loan when it bought Mosaic, Bowen’s original lender (see above). Concern about Block 216 has weighed on Ready Capital’s shares, which are down 27% so far this year. Ready Capital didn’t return messages seeking comment.
There are lots of aggrieved investors around town, too, according to a person familiar with the matter. When he kicked off the project in 2019, Bowen sought to raise $113 million, The Oregonian reported at the time. And Bowen still owes the city $7.8 million that he promised to pay in lieu of putting affordable units in the building. “The Portland Housing Bureau is aware of the recent news and is working with the city’s legal team to determine our options,” city spokesman Elliott Kozuch said in an email to WW. “As of now, it is too early to outline next steps.”
Did Bowen get any public dollars for Block 216?
Asked the same question by the Portland Business Journal in 2018, Bowen said: “We have assumed no tax credits or other government incentives for this project.” But he built Block 216 in an Opportunity Zone.
President Donald Trump created the zones in his 2017 tax plan, saying they would drive investment into impoverished parts of the country (all of downtown Portland is an opportunity zone). Wealthy taxpayers often reap capital gains on other assets and invest them in “OZ” projects to defer and reduce taxes they would pay otherwise. If they hold the OZ investment for 10 years, they pay no tax on the original gains. The break reduces income tax revenue that the federal government, the state, Metro and Multnomah County would collect on windfalls.
Flock, the food hall that opened in January (more than a year late) at the bottom of Block 216, got a $3 million loan from Prosper Portland, the city’s economic development agency. The hall is run by a third party, Leeroy & Kimble LLC. A Prosper spokesman says a foreclosure on the building wouldn’t affect the loan.
What’s the worst that could happen?
Given the carnage in the economy right now, just about anything. Trump’s tariff talk has bruised the stock market, the source of funds for many wealthy people. If Ready Capital forecloses but can’t sell the building, it could end up empty, like so many other downtown buildings. But it’s likely that someone else will roll the dice if the price is right, says a hospitality expert who declined to be named. That person may get blown out, too. “The third guy will make money,” the expert says. “Unfortunately, there has to be bloodshed.”
Is there any way out of this mess?
For Walt Bowen, probably not. At the moment, it looks like Portland might lose, too. In June 2023, Bowen said the $7.8 million he promised to the city by Dec. 31, 2025—in order to dodge the inclusion of affordable units—would be the “single largest investment supporting affordable housing in Portland’s history.” The clock is ticking on that commitment.