Tenant's Guide

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Portland Office & Industrial - Q3 2017

Tenant's Perspective

  • Increase Asking Rates—across all product types in the Portland Metro Area
  • Vacancy rates have dropped to record lows—don't expect this trend to last as new construction hits the market
  • Increase in subleases—indicating a slowing economy
Cranes Dominate The Skyline. According to the RLB Index, Portland has 32 cranes in the sky—10 more than San Francisco. In central Portland there are 15 office projects under construction totaling 1.3M SF. This new construction may attract tenants looking to relocate from higher priced markets such as Seattle and San Francisco. The demand for creative office space in Central Eastside and Northwest is rapidly changing these areas from historically industrial-oriented centers. Some areas expect zoning laws to change in early 2018, which will permit traditional office users to move into these areas. Vacancy rates are at all-time lows, limiting many tenants ability to move/expand. However, we expect to see this trend to change as +1M SF of construction delivers over the next 12 mos.

Rental and Vacancy Rates

Avg. Rental Rate     Vacancy Rate   Margin
Office: $31.37/SF | Suburban: $23.44/SF | Industrial: $7.32/SF  
32.49  
  Class A: CBD
9.3% 
  2.7%
$30.02  
  Class B: CBD
9.7% 
  0.8%
$31.37  
  Total CBD
9.6% 
  1.8%
 
 
$27.19  
  Class A: Suburban
7.6% 
  0.3%
$21.14  
  Class B: Suburban
7.4% 
  1.0%
$23.44  
  Overall: Suburban
7.5% 
  0.7%
 
 
$13.37  
  Industrial: Flex
8.4% 
  0.6%
$5.87  
  Industrial: Warehouse
5.2% 
  0.1%
$7.32  
  Total Industrial
4.9% 
  0.1%

Market Trends

Recent Transactions

Tenant Size Submarket Type Sector
Amazon 857,379 SF E. Columbia September 2018 Industrial
LAM Research Center 201,300 SF Tualatin October 2017 Industrial
US Army Corps 127,895 SF CBD November 2017 Office
Autodesk, Inc. 108,750 SF Ctrl Eastside January 2018 Office
Anixter 94,852 SF E. Columbia November 2017 Industrial
Rosendin Electric, Inc. 91,650 SF Sunset Corr. January 2018 Industrial
Union Wine Company 42,500 SF Tualatin November 2017 Industrial
Farmers Insurance 40,250 SF Tigard December, 2017 Office