Portland Industrial Market Report

4th Quarter 2023

Posted In — Market Research | Market Report


AVERAGE ASKING LEASE RATES remained steady both year-over-year (YOY) and quarter-over-quarter (QOQ) at $0.87/SF NNN in 4Q 2023. While face rental rates are holding firm, net effective rates remain lower due to increased rental abatement and above standard tenant improvements.

DIRECT VACANCY RATES grew 90 basis points (bps) YOY from 2.9% in 4Q 2022 to 3.8% in 4Q 2023. Total availability rates increased by 220 bps YOY from 4.7% in 4Q 2022 to 6.9% in 4Q 2023.

LEASING ACTIVITY decreased 21.5% YOY from 2.1 million SF in 4Q 2022 to 1.7 million SF in 4Q 2023. Throughout 2023, the most active submarkets were Northeast and Clark County with 2.9 million SF and 1.8 million SF, respectively.

TOTAL INDUSTRIAL SALES ACTIVITY fell when comparing year-end totals to 4.1M SF in 2023 from 6.7M SF in 2022 due to the lack of institutional sale activity. Despite the decline in overall sales activity, the firm rental rates continue to put pressure on smaller tenants which is driving demand for owner-user type sales resulting in an uptick in sales activity QOQ of 38.5%.

1.96 MILLION SF of industrial space was delivered in 2023. There is currently 2.9M SF of industrial space under construction.


THE MANUFACTURING SECTOR within the Portland-Vancouver-Hillsboro MSA fell slightly by 4.3% YOY to 123,400 jobs. The Trade, Transportation, and Utilities sector remained steady YOY at 226,700 jobs.

STATEWIDE UNEMPLOYMENT RATE in Oregon in October was 3.6% while the Portland-Vancouver- Hillsboro MSA reported a slightly lower unemployment rate of 3.3%.


DIRECT VACANCY and total availability ticked up QOQ to 3.8% and 6.9% respectively.

AFTER A STRONG 2022, the Portland Industrial Market reported negative net absorption of 660,266 SF in 2023. Most of the region’s negative net absorption is attributed to the Northeast submarket, in particular the Rivergate submarket. Rivergate accounted for negative 1,271,964 SF of the region’s net absorption in 2023.

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