Cory Carlson, President of Constant Commercial Real Estate, Inc., outlined on Apr. 21 the current situation facing owners, buyers, and financiers of unreinforced masonry (URM) buildings in Portland. Carlson said that while concerns about these historic structures are real due to seismic risk and regulatory changes, some public alarm may be overstated.
URM buildings in Portland—mainly brick commercial blocks built before the 1960s—are considered highly vulnerable to earthquakes. According to Carlson, “FEMA classifies URMs as ‘typically the most vulnerable to earthquake damage,’ including the risk of partial or total collapse.” The city has cataloged between 1,600 and more than 1,700 such buildings across neighborhoods like Old Town and Alberta Street.
Currently, there is no blanket mandatory retrofit deadline for most privately owned URM buildings in Portland. While policy discussions have continued since at least 2014 through the Portland Bureau of Emergency Management’s URM Seismic Retrofit Project, only cost-triggered retrofit requirements exist under City Code Chapter 24.85. These rules were updated in October 2025 with new evaluation standards taking effect Jan. 1, 2029—but only when renovation permits exceed $175,000.
Carlson said that insurance is a key pressure point: “Carriers have become increasingly reluctant to write or renew policies on un-retrofitted URMs… When insurance is expensive or unavailable, lenders freeze — because virtually every commercial loan covenant requires continuous property insurance.” Financing becomes difficult when estimated retrofit costs approach a building’s value; conventional lenders often will not underwrite such acquisitions.
The downtown decline compounds these issues: office vacancy rates reached nearly 35% by late-2024 and high-profile properties like U.S. Bancorp Tower saw major drops in sale price from previous cycles. This broader market distress reduces both tax revenue for local governments and resources available for retrofits.
Carlson advised both sellers and buyers of URMs to understand their specific exposures—including regulatory triggers and insurance status—and emphasized accurate pricing reflecting current market realities: “The market for URM buildings is difficult, not dead… The buildings that will suffer most are those whose owners are caught unprepared — unaware of their regulatory exposure [and] unaware of their insurance gaps.”
