A major real estate investor is cashing out of Portland’s Pearl District. On paper, the explanation is high interest rates and stock performance. In reality, it is about a city that changed so dramatically over the last five years that what was once marketed as a crown jewel has become a liability.

SITE Centers Corp., based in Ohio, bought “The Blocks” in 2019, a collection of 44 storefronts across 10 buildings totaling nearly 100,000 square feet. At the time, SITE called the Pearl “one of the most desirable places to live on the West Coast.” Just six years later, the same portfolio is being quietly shopped on the market.

As Willamette Week bluntly put it in their coverage of the sale: “The neighborhood has changed since SITE’s purchase.” That single line may be the most understated truth in the whole story.

The Pearl District hasn’t always been Portland’s upscale hotspot. Until the mid-1980s it was known as the Northwest Industrial Triangle, a gritty warehouse zone that gradually drew in artists and creatives. As the city pushed new development, the area transformed rapidly into one of Portland’s most desirable neighborhoods, packed with luxury condos, world-class restaurants, and art galleries that anchor the monthly First Thursday Art Walk.

Long before its transformation into an arts and residential hub, the Pearl District was part of Portland’s working waterfront and industrial backbone. In the 1920s the area was filled with railyards, warehouses, and shipping facilities that served the city’s booming timber and manufacturing economy. Freight trains crisscrossed the neighborhood, and streets were lined with brick buildings that stored everything from lumber to grain. It was a gritty, utilitarian landscape where industry and commerce defined daily life. The photograph from 1925 captures this era perfectly, showing a part of Portland that was built for work rather than leisure, decades before anyone imagined it would one day be filled with galleries, cafes, and luxury condos.

The name “Pearl” itself carries a layered history. Local art gallery owner Thomas Augustine was quoted in the 1980s describing the district as old buildings with crusty exteriors, like oyster shells, hiding vibrant activity inside—painters, poets, musicians, and entrepreneurs. He later revealed it was also a tribute to a friend, Ethiopian missionary Pearl Marie Amhara, who inspired him during their decades-long friendship.

From its roots as a rough industrial zone to its rise as Portland’s cultural and residential hub, the Pearl’s history is a reminder of just how much the neighborhood has changed.

The pandemic years brought new challenges. In March 2020, Governor Kate Brown issued Executive Order 20-07, which closed restaurants, bars, gyms, theaters, and other non-essential businesses in an effort to slow COVID-19. Small restaurants, boutiques, and family-run shops in the Pearl had no choice but to shut their doors. Dining was limited to takeout and delivery only, and there was no clear timeline for reopening. Larger companies deemed essential, such as grocery stores and national retailers, not only continued operating, but were thriving throughout the restrictions. Many small businesses in the Pearl did not reopen. By the time restrictions were finally lifted months later, countless local businesses were gone for good, leaving empty storefronts and a neighborhood already struggling to recover.

In November 2020, Oregon voters approved Measure 110, decriminalizing the possession of small amounts of hard drugs—including heroin, meth, and fentanyl—and framing addiction as a public health issue. The measure allocated more than $100 million a year in cannabis tax revenues to fund rehabilitation and recovery services (Oregon Secretary of State Audit Report). However, the rollout saw substantial delays in funding and implementation. For example, while access-to-care grants totaling $22 million went out in 2021, many programs struggled due to staffing issues and logistical challenges (Oregon Health Authority). Some grants were even terminated after misuse or failure to deliver services was discovered (Oregon Capital Chronicle).

Critics also noted that key operational details—like training for law enforcement and a treatment-ready citation system—were never implemented (OPB). In 2024, the state passed House Bill 4002, effectively reversing parts of Measure 110: as of September 1, possession of small hard-drug amounts returned to being a misdemeanor, with treatment and deflection programs included but still underfunded and unevenly implemented (OPB).

Local residents and business owners have been warning about this decline for years, and their frustrations were recently documented in the NW Examiner. The Pearl District Neighborhood Association issued a call to action urging members to contact city leaders about new shelters being pushed into the neighborhood. Letters poured in.

One resident, Craig Boretz, wrote: “I have lived in the Pearl District for over 20 years, and for most of that time it has been a wonderful vibrant community. However, in the last several years the neighborhood has suffered… The spillover impact has created an environment that feels unsafe, and is littered with trash, garbage and tents. This is the principal reason there are over 100 empty retail storefronts.”

Bill Tannen added: “It will destroy what is left of property values in the Pearl, it will bring crime, drugs and garbage all over our neighborhood. Businesses have already fled. Your tax base is dwindling when homeowners are fleeing (if they can).”

Another longtime voice, Dick Schneider, warned: “The Pearl District will be completely overwhelmed by these shelters, which will continue to undermine any sense of security for residents and discourage what few businesses remain. The chances of revitalizing the once nationally admired city neighborhood will fall into the slim-to-none category.”

Others told of direct experiences with crime and danger. Linda Witt described how her building concierge was attacked by a man with a pipe. Al Solheim recounted turning down a lease offer from an international EV charging company due to “ongoing and serious concerns about safety and security in the area.”

The fallout from these conditions is plain to see. Starbucks closed in 2022 due to safety concerns. REI shut down its 20-year Pearl location in 2024 citing break-ins and theft. More recently, Erath Winery closed its tasting room in the Pearl District in late August 2025—the same week the city announced plans for a new homeless shelter a block away

SITE Centers’ offering document doesn’t mention any of this. Instead, it markets the portfolio as a “value-add opportunity” in a “prime infill location.” Meanwhile, SITE’s stock has plunged 40 percent this year, and the official explanation points to interest rates and borrowing costs. But if the Pearl District were still what SITE bought into in 2019, they would not be racing to get out.

This sale is about more than balance sheets. It is about Portland’s leadership decisions: Governor Kate Brown’s executive orders that crushed small businesses while mega-corporations thrived, drug decriminalization that turned sidewalks into open-air drug markets, and homelessness policies that left entire neighborhoods—including the Pearl—overwhelmed. Locals see it. Businesses see it. Investors see it. SITE’s exit is one more signal of a truth Portlanders already know. What was once the city’s crown jewel has become a cautionary tale of what happens when leadership prioritizes ideology over livability.

While the challenges in the Pearl District are undeniable, it is worth remembering that Portland has reinvented itself before. The same city that turned a forgotten warehouse district into the Pearl, a nationally admired cultural hub filled with art, food, and community, still has that creative spirit at its core. Many Portlanders continue to fight for their neighborhoods, supporting small businesses, cleaning up streets, and demanding accountability from leadership.

The story of the Pearl’s rise from gritty industrial blocks to one of the city’s most vibrant neighborhoods shows that revitalization is possible. Portland has always been a place where resilience and creativity run deep, and many locals believe the city can emerge from this difficult chapter stronger than before.

Investors like SITE Centers may be walking away, but Portlanders are not ready to give up on their city.