Steve Dodds

Net absorption of Industrial space across the Portland market equaled 1.5 million square feet in the final quarter of 2022. Over the last 12 months, net absorption totaled 4 million square feet, a 25% increase over the prior 12 month period. As a result of the continued trend of positive net absorption, the total vacancy rate fell from 3.7% to 3.4% in Q4 2022.

Demand for industrial space in the Portland market remains elevated through Q3 2022 with 766,000 square feet of net absorption occurring during the quarter.

Portland’s industrial market continues to grow as developers look to meet demand and larger projects begin to deliver. Through Q2, more than 1.6 million square feet of new construction has been delivered. These deliveries are primarily driven by Warehouse-Distribution product, which accounts for 95% of the square footage delivered year-to-date. The remaining development pipeline remains robust with 9.8 million square feet currently under construction, 3.2 million square feet of which is specualtive. It should be noted that 3.9 million square feet of the 6.7 million built-to-suit pipeline can be attributed to Amazon and Trammell Crow’s Project Basie in the Salem area. A first for both submarkets, the average direct asking rate on a triple net basis (NNN) for all product types in the Westside and Clark County submarkets has surpassed $1.00 per square foot. Both submarkets are also development hotspots with 3.4 million square feet under construction. Market-wide vacancy rates for all product types remain relatively unchanged from the prior quarter, but compared to the halfway point of 2021, vacancy has fallen by 100 basis points to 3.9%. Headlining the notable sales for the quarter was Melvin Mark Companies and junior venture partner Becker Capital Management’s sale of a six-property portfolio in Tualatin, which serves as the Pacific Food headquarters. This portfolio, which totaled 158,000 square feet, traded for $275 per square foot and was purchased by California-based The Brookhollow Group.