Q2 2019 - Mid-year Portland Office Market Report
The Portland Overall Office market has experienced a 6.9% increase in gross rent per square foot (+$1.78/SF) over a 12-month period (Q2 2018 to Q2 2019). This represents the greatest increase in gross rent in the last 12 years. The last period in which we experienced greater gross rent per SF growth was prior to the recession between 2006 to 2007. This rent growth would suggest the market has continued strong momentum, however an increasing vacancy rate and significant decline in leasing activity cloud indicate that the market is slowing down. At this point last year, there had been +1 Million SF more leasing activity (2.93M SF vs. 1.89M SF), as reflected in the number of transactions completed (770 vs. 568). We experienced 1.82 Million SF in new construction delivered in 2018, yet a similar number of projects started over the same period which has increased total SF under construction in the market. This may be one factor in the rent increases; however, most projects are being built on spec development and may have missed the peak of the market if we continue to see vacancy increases and leasing activity decline.