Q1 Maintains Steady Course
- The Portland region’s industrial market delivered another quarter of robust activity as development pre-leasing, space absorption, rental rates, and acquisitions each posted strong results.
- The most market-relevant project to deliver in Q1 was Specht’s Portside Industrial Park Buildings A & B. The combined 353k SF project was 46% committed due to OnTrac’s pre-delivery lease in which Colliers represented the tenant.
- Overall, around 50% of the 430k SF of speculative product that delivered in Q1 was pre-leased. Laika’s owner/user expansion project also completed in Hillsboro.
- 11% of the remaining 2.7M SF currently in speculative development is also pre-leased.
- Sales activity revealed several repositioning and self-storage development projects kicking off during the quarter:
- French firm Oger International acquired the former manufacturing facility with excess land at 1300 NE 25th Ave, Hillsboro with plans to reposition as a data center.
- Redside acquired the former Reser’s food manufacturing and distribution facility, likely eyeing the site’s redevelopment potential for small industrial users.
- Four industrial sites were acquired for redevelopment to self-storage.
- Looking ahead, last-mile distribution requirements will increase over time, adding further demand pressure, particularly in smaller spaces and properties. Expect this growing source of demand to join unabated interest from warehousing, logistics, cannabis, and smaller general industrial users.
- Blended direct asking rental rates posted approximately 13% YOY inflation, finishing the quarter at a weighted average $0.547/SF/M.
Quick Fact: $99 Million
The first quarter’s $99M of sales activity breaks down as follows:
- Investment: $43.5M, averaging $81.12/SF
- Investment for Repositioning: $11.55M, averaging $70.64/SF on existing improvements
- Owner/User: $27.45M, averaging $90.58/SF
- Industrial Site Acquisition for Self-Storage Redevelopment: $16.475M, averaging $46.69/SF-Land