Flex Market Holds Steady in Q2
- In the second quarter, the Portland region’s market of flex properties maintained a similar course following the first quarter.
- Over the most recent four quarters, the overall vacancy rate among the region’s flex properties has remained steadily around 8% - 8.5%.
- Landlords are responding to steady demand with moderately increasing quoted rental rates. Q2’s $1.053/SF per month is a record high for the regional market. This rental rate is 3.6% higher than the prior quarter and 1.5% greater than it was a year ago.
- The renovation of the maker- and light industrial-geared Iron Fireman Collective Building 1 is now complete. The project by ScanlanKemperBard boasts high-quality transit orientation and restored interiors popular with creative tenants.
- Two additional development projects are now under way. A specialty Research & Development building is under construction in Tualatin, and PacTrust continues the buildout of Columbia Tech Center in Vancouver with a 35k SF flex/office building.
- The flex market remains popular with a key demographic of tenants, and Colliers International Portland provided representation in 5 of the top 6 flex lease transactions in Q2.
- Increasing last-mile distribution requirements from traditional, large industrial users could be an emerging trend to impact the flex market in the future. As retailers and logistics companies continue seeking to solve the urban last-mile challenge, smaller warehouses and similar product types could gain new relevance over time. In the future, this could spell good news for flex investors and landlords.
Quick Fact: $3.025 Million
- One investment sale totaled $1.4M at $33.82/SF
- One owner/user sale totaled $1.625M at $160.54/SF