With 1.9 million square feet of net absorption, the Portland market reflected a continued need for industrial assets, particularly in Warehouse-Distribution product, which accounts for more than 80% of net absorption. With supply chain challenges revealing the need to keep more safety stock closer to consumers, Portland will continue to show strong fundamentals in Warehouse-Distribution product. While Warehouse-Distribution was strong, in the Sunset Corridor/Hillsboro the nearly completed Hitachi Center of Excellence at 3600 NW Huffman fetched $57.5 million (294 per square foot), when developer Trammell Crow sold it to Principal RE Investors. While the valuations look favorable for Portland’s industrial real estate market, a lack of available land near the population centers will continue to limit growth. Increasingly, developers need to look further north, in SW Washington and further south, in Marion/Polk Counties to find suitable land for development.
