Market Matures in 2017
- The marketplace for Portland office properties matured during 2016, when over 1M SF of new and adapted supply came online amid institutional investors initiating or
increasing ownership stakes.
- Although the office development pipeline set records in 2016 and remains very active heading into 2017, preleasing activity became more common and the vacancy rate remained stable in the 8% range.
- Broader downward business and economic cycles could begin to affect companies’ appetite for office space in 2018, but our region’s relative advantages should temper these trends.
- Market strengths include a diversified economy; 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 GDPgrew 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.
Quick Fact: $327 Million
- Nearly $327M of office investment sales closed in the fourth quarter. This brings 2016’s total investment volume to approximately $1B for the Portland metropolitan area.F