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1/04/22
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Portland Industrial CRE Market Update 4th Qtr. 2021
This report was provided by real estate services firm Kidder Mathews
Market Drivers
Asking lease rates rose 4.4% year-over-year (YOY) from $0.69/SF NNN in 2020 to $0.72/SF NNN for 2021.
Leasing activity climbed 15.6% YOY from 9.9 msf in 2020 to 11.4 msf in 2021. The most active submarket clusters for the year were Southeast and I-5 Corridor with 35.8 msf and 29.4 msf respectively.
Direct vacancy rates decreased 22.4% from 4.0% in 2020 to 3.2% in 2021.
Total net absorption for 2021 was 3.6 msf, 2.3 msf of which occurred in 4Q 2021.
Sales volume dropped 24.2% YOY from 10.4 msf in 2020 to 7.9 msf in 2021.
There is currently 4.9 msf under construction, while 1.8 msf was completed in 2021. The Bridgepoint I-5 development delivered 677.6k sf to the Airport Way submarket. Portside Industrial Park added 193k sf to the CBD/West Vancouver submarket.
Economic Review
Manufacturing jobs for the Portland-Vancouver-Hillsboro MSA gained 2.9% YOY to 123,100 jobs. Transportation and warehousing jobs also rose 4.1% YOY to 231,200 jobs.
Unemployment in Oregon stood at 4.4% for October 2021. During this period, the Sacramento Roseville Arden Arcade MSA reported a 3.4% unemployment rate.
Near Term Outlook
The Portland industrial market continues to hum along as the economy recovers during 2021. Demand sparked by e-commerce and logistics companies drive vacancies downwards and stoke increases in asking lease rates. There is currently 4.9 msf under construction to help meet these requirements.
Source: CoStar, U.S. Bureau of Labor Statistics
Market Highlights
Asking lease rates rose 4.4% YOY to $0.72/SF NNN.
Direct vacancy rates stood at 3.1%.
Total net absorption for 2021 was 3.6 msf.
This report was prepared by Kidder Mathews Director of Research Gary Baragona
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