2018 Q1 Portland Metro Office Report

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Active Office Market Promotes Confidence

  • The sale of 38 Davis, a mixed-use office/multifamily project, for $54.25M represents the largest investment sale of the quarter. Ninety-seven percent of the 125k SF of office space was leased before closing. Colliers brokers Chris Johnson and MaryKay West negotiated the deal on behalf of the seller, a group of private investors.

  • Over 335k SF was delivered across the region, marking the largest volume delivered since Q2 2015. 

    • Field Office – West was the only delivery in the CBD, with nearly 165k SF of Class A space, 58k SF of which was pre-leased.

    • Custom Blocks North & South, along with Clay Pavilion, delivered a combined total of nearly 150k SF to the CBD Perimeter, more than half of which (Clay Pavilion) is Class A space, 65k SF of which was pre-leased.

    • Red Rock Medical Center delivered in I-5 South with 21k SF of Class B space.

  • Rents for the region continue to steadily increase, reflecting costs of new construction product versus older inventory. In the CBD, Class A monthly rents have crossed the $35.00 PSF full service threshold. Region-wide, Class A monthly rents rose $0.56 PSF since Q4 2017 to $30.94 PSF full service. Across all building types, rents for the region have reached $26.16 PSF full service.

  • Vacancies increased to 9.95% for the region, owing mostly to new CBD supply that was not occupied as of Q1 2018, even though 41% of the square footage delivered was pre-leased. Eastside has incredibly low vacancy at 3.29%, which is down 51 basis points since Q4 2017 and 611 basis points since Q1 2017. Much of this positive net absorption occurred in Class A and B buildings.

1 Million SF Under Construction

  • Down 35% since Q2 2017
  • Nearly 40% pre-leased
  • 64% CBD / 36% Suburban


2018 Q1 Portland Metro Office Report

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