Q2 2021 - Portland Industrial Market Report
Portland Metro Overview
The brief pause of 2Q 2020 due to COVID is a distant memory compared to the market dynamics of 2Q 2021. Occupancy costs are at all-time highs along with construction costs for everything from basic materials, labor, parts and equipment. Exacerbating this situation is a very tight supply of existing spaces and substantial pre-leasing of new construction which leaves very little time for occupiers to evaluate options whether to relocate or renew. Despite the “Vacancy Rate” shown below which captures a variety of industrial buildings, market centric buildings (particularly warehouse and manufacturing) are limited. As an example, there are currently fewer than 10 buildings available for lease on a combined basis in the entire Metro area outside of Airport Way area of the NE Portland submarket if someone wants 30-100K sf of existing space. This includes Sunset Corridor, I-5 Corridor, 217 Corridor, NW Portland and SE Portland. Even with the Delta variant and potential partial shutdowns as a result of a resurgence, it is likely that this trend will continue throughout 2021 and into early 2022. Our advice is to start strategic planning and real estate decisions at least 18-24 months in advance.
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