Multnomah County Looks to Buy or Rent Hotel Rooms

Multnomah County is in the market to rent more blocks of rooms or buy additional hotels outright to shelter homeless people, according to a solicitation to owners obtained by WW.

Real estate broker CBRE sent the letters on behalf of the county on June 11.

“We are requesting your expression of interest to be considered for a room block agreement and/or purchase of motel properties within Multnomah County in order to provide housing for community members,” the letter says.

Hotels with 40 to 120 rooms are ideal. Others are “less likely to be considered for lease or purchase at this time,” the letter says. Up to now, the county has rented more often than bought, which can be expensive.

“Are you interested in selling the property to Multnomah County?” the letter asks in a series of questions. “If yes, what is your proposed purchase price?”

The county has purchased two hotels so far: a Days Inn on Northeast 82nd Avenue for $4.2 million in December 2020, and a Motel 6 on Southeast Stark Street in Gresham for $4.9 million in July 2021. The Joint Office of Homeless Services, funded by the county and the city, leases 416 rooms for shelter programs. It has another 41 available through a no-rent lease with Metro, the regional government.

In determining whether to rent or buy in the future, the JOHS will “perform a lease-versus-own analysis to determine the best course of action,” county spokeswoman Julie Sullivan-Springhetti said in an email.

Hotels in Portland are selling at bargain prices, according to a report from real estate firms Colliers and CoStar, because demand hasn’t fully recovered from the pandemic and downtown riots. The 455-room Hilton Portland Downtown and the 327-room Duniway went to foreclosure auction in January 2023, but no buyers showed up.

The pain has continued since then. In the 12 months through May, the average occupancy in Portland hotels was 61.6%, below the national average of 62.8%, Colliers and CoStar said in a recent report. Occupancy at Portland properties averaged 71.6% in 2019, the last full year before the pandemic.

“In Portland, all travel segments—leisure, group, and business transient demand—have struggled to regain previous results,” the report said. “Leisure visitors are opting for scenic Oregon experiences outside the city, while some downtown businesses and prominent restaurants have relocated.”