How a Developer Turned a Scrap of Land Into a Showpiece

Key Development's guiding ethos is what the company describes as "a workable paradox": to develop buildings that "fit into the surroundings while also standing out."

The challenging site logistics of a recent project made Key's philosophy a literal truth.

Its Sideyard, a small, cross-laminated timber and brick structure at 365 NE Couch St., in Key's hometown of Portland, Oregon, began simply as a plan to fill an awkward piece of land next to a larger apartment complex. The commercial building has drawn national attention since construction wrapped up last year.

"It's a gorgeous little building," Key's Chief Operating Officer Claudia Munk-von Flotow said in an interview, explaining all the interest.

The building, which can be used for retail, industrial or office space, is a part of a wave of redevelopment in Portland's Kerns neighborhood, which sits on the east shore of the Willamette River at the foot of the city's iconic Burnside Bridge.

Sideyard's clean lines, warm ambiance and flexibility have given it an edge in an area with lots of eye-catching competitors, said Brian Hanson, vice president at Ethos Commercial Advisors, a Portland firm responsible for leasing at Sideyard.

"It's been very well received," Hanson said. "No expense was spared, and no item was unaccounted for. Everyone noticed the attention to detail."

Sideyard has also attracted attention from outside Portland. The five-story, 22,400-square-foot property was written up in Forbes and was recognized for "regional excellence" in the 2020 U.S. WoodWorks Wood Design Awards.

Ironically, Sideyard began as little more than an afterthought, with a puzzle piece for a site that was considered to be of no value at the time.

The land was just a 9,000-square-foot berm, a wedge-shaped remnant that was created when the city of Portland eliminated a "troubling six-way 'spaghetti' intersection," according to a 2010 article in The Oregonian. It built the new one-way Couch Street couplet reconnecting the roadway to the Burnside Bridge.

The spot was immediately adjacent to a much larger Key development, the YARD, a 21-story, 284-unit luxury apartment building at 22 NE Second Ave. that was constructed in 2016.

Sideyard was envisioned as a sort of sequel to the apartment tower, Munk-von Flotow said, and was to be connected to it by a skybridge. But as the design evolved, the project increasingly took on a distinctive character of its own, in part because of the odd and difficult nature of the site itself.

The small size of the parcel and its location, hemmed in by existing buildings and roads, made it impossible to stage on site, and Key had to lease space nearby just to store its construction materials, Munk-von Flotow said.

Sideyard was also the first building in Portland to be built of cross-laminated timber, and as such the city had to create code applicable to it as the project was in motion. Cross-laminated timber is a building material that has been popular in Europe for 20 years, but is just beginning to take hold in the United States, according to the American Wood Council, which defines it as several planks of lumber board, stacked crosswise and glued together.

The perpendicular layers give the finished product a rigidity and strength that makes it viable alternative to structural components like concrete, masonry and steel.

In spite of that, Sideyard went up very quickly, about 10% to 20% faster than comparable projects Key has done in the past.

"If you plan a cross-laminated timber building carefully, it can go up just like a Lego kit," Munk-von Flotow said.

Sideyard is still in the process of leasing up, according to CoStar data, but has one destination retailer on tap already, Ferment Brewing Co.

The building's ability to cross genres is a trait that is especially critical during the coronavirus pandemic, when many categories of commercial real estate are unstable, Munk-von Flotow said.

"It's such a versatile building. You could do so many things with it, and in this environment, it's very important to be able to pivot like that," Munk-von Flotow said.

CoStar photographers capture images every day of distinctive buildings, each with its own story. Snapshots is an occasional feature showcasing their work.