Sherwood Commerce Center Phase 2 and 3 reach completion

SHERWOOD, Ore. — A former logging hillside in Sherwood is now home to nearly 2 million square feet of industrial flex space — recently doubled.

At the end of May, Schnitzer Properties and Perlo Construction completed construction of the Sherwood Commerce Center Phases 2 and 3 in the Tonquin Employment Area (TEA), according to Chris McLaughlin, partner and vice president of Perlo.

In total, all three phases of the Sherwood Commerce Center provide over 1 million square feet of flex industrial space to the TEA, adding to the existing 413,000 square feet of the Rock Creek Corporate Center and 478,000 square feet at the Tualatin-Sherwood Corporate Park.

Jordan Schnitzer, president and CEO of Portland-based Schnitzer Properties, said this project is a testament to when everyone comes together and puts the community first. It is a joint venture between developer Schnitzer and John Niemeyer, president of Mainlander Investments, the property owner.

“Sherwood is a wonderful place to do business, and to live and raise your families,” Schnitzer said. “We found the mayor, city council, economic development people, and the planning staff wonderful to work with. Everyone has been enthusiastic and welcoming, and now we’re building the kind of spaces that Sherwood wants.”

Phases 2 and 3 of the Sherwood Commerce Center are estimated to provide one job per 1,000 square feet, according to Eric Rutledge, community development director with the City of Sherwood. The second and third phases broke ground in spring 2025, adding four buildings.

“It'll be up to the businesses to build out their tenant improvements, and that could take anywhere between two months to a year, depending on the size,” Rutledge said. “Now that Schnitzer has completed the shell buildings, we will help them locate businesses within those buildings and are in our targeted industries.”

The TEA is home to about 15 businesses in advanced manufacturing, logistics, industrial supply, engineering, marine, and technology.

Building businesses

Phases 2 and 3 of the Sherwood Commerce Center were developed speculatively and are currently in the leasing process, indicating a strong market for new employment spaces here in Sherwood. The City hopes to target more companies that will bring jobs in sectors including advanced manufacturing and machining, clean technology and renewables, aerospace, food and beverage manufacturing, and recreation products such as outdoor and active wear.

Tualatin-based Perlo Construction’s McLaughlin said construction went really well on the Sherwood Commerce Center’s Phases 2 and 3.

“The City was very helpful … (was) so accommodating for our field crews. The (city) inspectors are great, they want to work with us, they want to get things done, they want to move things along, so that’s been great,” McLaughlin said. “Everybody is happy about it.”

Rutledge said multiple leases are currently under negotiation for the newly completed warehouses, but those can take anywhere from 30 days to a year to negotiate terms on such a large property — especially when they are likely to be long term leases of between five to 10 years. Each individual suite is between 10,000-50,000 square feet.

“When businesses invest in a site like this, it's a big investment for them,” Rutledge said. “They can be looking at moving manufacturing equipment, moving their headquarters, and so they negotiate for a while to make sure all the terms are correct.”

Gaylord Marine Services marine manufacturer, Olympus Controls robotics, LAM Research semiconductor equipment, Exentec high-tech manufacturing for semiconductors and biotechnology, and Studson safety helmet manufacturer are some of the companies with warehouses already in place in the Tonquin Employment Area.

Once leased, each business begins a custom build-out for their specific needs.

McLaughlin said Perlo likes doing business in Sherwood because the city is committed to the businesses being there, and supporting the community. 

“They’re looking at the big picture for helping our Sherwood, giving people who live here a place to work,” McLaughlin said. “You can tell that’s their focus, and they really pay attention to it.” 

Perlo was also involved in the Rock Creek Corporate Center project developed by Panattoni, which recently completed construction on a roughly 417,000-square-foot industrial/flex building that is currently available for lease.

Supporting jobs

The entire 300-acre TEA currently supports between 600-700 full-time jobs, according to Erik Adair, economic development manager with the City of Sherwood. He said by 2028, the City anticipates another 950 permanent positions added to the area.

“Sherwood has attracted this mix of advanced manufacturing and industrial employers largely without the use of major local financial incentive programs,” Adair said. “Much of this growth has instead been driven by land availability, regional location advantages, and the City’s strong emphasis on customer service and ease of doing business.”

In 2004, about 75% of the TEA was annexed into Sherwood, with the last 25% remaining in Washington County but zoned for future development and slated for annexation by 2030. In 2010, the TEA’s concept plan was adopted, but it took until 2019 to begin development due to the 2008 slowdown. 

Since 2019, the City has issued project permits costing over $158 million in the TEA, which includes equipment, materials, labor, overhead, and profits. Now, the City is constructing the $10.65 million Ice Age Drive, intended to support access to the new industrial development areas and funded by a mix of federal grant and low interest loans from Business Oregon and the Oregon Department of Transportation. Ice Age Drive is slated to open in late 2026.

The plan for the TEA is a part of the City’s economic development goals to prompt strong, diverse economic growth opportunities, support new commercial and industrial development in targeted employment areas, encourage balancing Sherwood’s tax base, and bring in more jobs that provide wages that allow people to live and work in Sherwood.

“We've been pretty successful getting advanced manufacturing businesses in there so far, which is super exciting,” Rutledge said. “It’s not a heavy industry type of area, this is more of a high-tech campus type of setting, and so far we’ve been successful in attracting those businesses.”

One reason for the diversity is that assessed property tax increases are capped at 3% per year, so encouraging a balanced tax base — adding industrial zones to Sherwood’s historic retail and residential — promotes strong, diverse economic growth opportunities by keeping the city’s coffers in the green despite inflation.

“We've already seen the change in terms of the diversification of the tax base,” Rutledge said. “We’re trying to focus on good-paying jobs, a good tax base, and bringing all the good benefits to our community that we would like to have.”