Category Archives: Portland Offie Space

Portland Office Space Update – A Tight Market

portland office space skylineOur local reps in Portland just came out with an update on Portland Office Space. All in all, it shows a very healthy market with a low vacancy rate, but one in which tenants will need the assistance in finding and negotiating for office space.

Here are the key points of their recent report:

  • The marketplace for Portland office properties grew during 2016, with over 1 million square feet of new and adapted supply came online amid institutional investors initiating or increasing ownership stakes.
  • Office development set records in 2016 and remains very active heading into 2017. Pre-leasing activity has become more common and the vacancy rate remained stable in the 8% range.
  • Company’s appetite for office space in 2018 could be affected in the event of a broader downward business and economic cycles, but our region’s relative advantages should temper these trends.
  • The Portland Office space market strengths include a diversified economy with lower business, commercial real estate, and living costs relative to neighboring West Coast cities, and a well-educated and well-paid workforce.
  • These lower costs attract technology companies and their employees to Portland, where venture capital funding set a 5-year record in 2015 at $283M. Start-ups are an important part of the tenant mix due to their high growth potential.
  • The Oregon Employment Department recently reported the Portland metro area’s GDP grew 4.6% in 2015, 10th-fastest among the largest 100 U.S. metros. The Professional & Business Services category was the second-largest contributor to this growth, and is a key user of office space.
  • The current vacancy rate stands at 8.6% after absorption of over 121,000 square feet in Q4 2016.
  • The average Class A rent is $29.33

If you would like more information or need office space in Portland, contact our local rep. We will be happy to answer questions or help you find your next office space. All at no cost to you for our services.

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Portland Office Space Market Update

portland office space skylineA quick update on the Portland Office Space Market from our Local Portland Rep.

The overall Portland market once again showed strong fundamentals in the 3rd quarter 2016. Positive office space absorption drove vacancy lower, rising quoted rental rates supported development feasibility in key submarkets, and businesses continued hiring.

The Portland Office Space Market

Although the average Portland office space market-wide annual asking rental rates moderated slightly to $24.01 Fully Serviced Gross (FSG), this is still a year-over-year increase; a trend among landlords to continue to  push rents higher.

Class A Central Business District quoted annual rental rates averaged $32.74 (FSG ) and Class A Westside rates averaged a quoted $24.84 FSG. They were both up from the prior quarter and prior year. Unfortunately for tenants, landlords are continuing to offering relatively few concessions.

Out of state and institutional investors remain interested in Portland. Cap rates in the Portland Central Business district are around 5% and suburban office market cap rates are trending around 6.75%. There were $73 million in investment sale transactions recorded during the 3rd quarter.

The Portland office space development pipeline remains very active relative to the past 10 years. Construction starts in the 3rd quarter included Leland James Center, SW 12 & Morrison, Fair-Haired Dumbbell, and Field Office. All together totaling over 523,500 Square Feet.

If you need office space in Portland or the surrounding areas, we can help. Contact us to let us know what your needs are and we will get right to work meeting those needs, all at no cost to you. Our services and the services of our local representatives are free to you. No cost and no obligation to give us a try.

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