Flex Ends 2017 with Elevated Activity
- The Portland region’s flex market ended the year with a greater variety of activity than some preceding quarters.
- New supply delivered, absorption returned to positive territory, and three projects remained under construction including one new start at 14920 SE 82nd Drive.
- Also, market-wide rental rates ticked back into positive growth on a year-over year basis, ending the fourth quarter at $1.038 PSF per month NNN.
- While the quarter saw around 15k SF of positive absorption, newly delivered inventory totaled around 63k SF, leading the overall vacancy rate to increase by 30 basis points to 8%.
- Owner/user BarkZone, a dog daycare and associated services business, is responsible for the fourth quarter’s sole flex sale transaction (excluding flex properties bought for redevelopment). Through this acquisition of Twin Oaks Technology Center Buildings 5 and 6 from Pacific NW Properties, the business relocated their former NW Cornell location.
- Leasing activity maintained a consistent pace, with top leases by Perlo Construction, Portland Event Productions, and adidas. The property leased in the latter transaction was represented by Colliers International.
- The final annual results in the region’s flex market indicate a high probability of consistency in 2018. Flex properties supply value to users who do not require central, urban locations but desire amenities such as high ceilings, parking, and cost savings. Looking ahead, ever-increasing pressure from last-mile distribution requirements may put upward pressure on flex property values with suitable design in key locations.
Quick Fact: $2.4 Million
- One owner/user sale totaled $2.4M at $88.17 PSF