The following reflects Portland industrial market conditions as of Q3 2026.
MARKET DRIVERS
Portland’s industrial market continued to soften during the third quarter, with availability reaching a record 11.9% after nearly three years of subdued tenant demand. Unlike earlier increases driven by rising sublease inventory, the latest expansion came primarily from direct space, while sublease availability has largely stabilized. Asking rents edged lower as elevated availability, concessions and competing options continued to pressure effective rents, although newer Class A properties remain better positioned to maintain premium pricing.
Leasing activity remained near historically low levels as occupiers continued to approach expansion plans cautiously, particularly smaller tenants. This has contributed to continued occupancy losses and negative absorption across the broader market. Performance remains uneven, however, with Clark County capturing roughly 24% of leasing activity relative to its inventory and leading the region in YTD positive net absorption at 648K SF. Larger occupiers seeking tax relief are increasingly favoring the Washington side of the Columbia River, which, alongside cross-border access and transportation connectivity, should help limit occupancy erosion by keeping these users in the Portland region.
ECONOMIC OVERVIEW
As of July 2026, the unemployment rate for the Portland-Vancouver-Hillsboro MSA was 4.9%, down from 5.2% at the same time last year. The manufacturing labor sector decreased by 4.0% YOY and the Trade, Transportation, and Utilities sector decreased by 1.4% YOY.
NEAR-TERM OUTLOOK
Elevated availability and subdued leasing are expected to keep Portland’s industrial market in an adjustment period through the remainder of 2026. New construction remains manageable as starts have slowed, limiting the risk of significant oversupply; however, ongoing deliveries could prolong the recovery while demand remains soft.
Improvement will likely vary by submarket and building type, with newer facilities and well-located distribution corridors better positioned to capture demand. A broader recovery will depend on stronger small-business activity, improving labor conditions and renewed expansion activity, while broader economic and trade policy uncertainty could continue to temper occupier decision-making.
Frequently Asked Questions
What is the industrial vacancy rate in Portland in Q3 2026?
The direct vacancy rate in the Portland industrial market was 6.9% in Q3 2026, up from 6.7% in Q2 2026 and 5.6% in Q3 2025, an increase of 127 basis points year over year, according to Kidder Mathews research. The total vacancy rate, which includes sublease space, was 8.0%. (Data source: CoStar)
What is the industrial availability rate in Portland in Q3 2026?
Total industrial availability in Portland reached a record 11.9% in Q3 2026, up from 10.6% in Q2 2026 and 9.4% in Q3 2025, a 245 basis point increase year over year, according to Kidder Mathews research. The latest increase came primarily from direct space, while sublease availability has largely stabilized. (Data source: CoStar)
What are industrial asking rents in Portland in Q3 2026?
The average asking lease rate for Portland industrial space was $0.85 per square foot per month NNN in Q3 2026, down from $0.89 in Q2 2026 and $0.90 in Q3 2025, a 5.6% decline year over year, according to Kidder Mathews research. Among submarkets reporting a rate, averages ranged from $0.62 in Rivergate to $1.94 in Clark County Outlying, and Clark County averaged $1.01. Newer Class A properties remain better positioned to maintain premium pricing. (Data source: CoStar)
How much industrial leasing activity occurred in Portland in Q3 2026?
Portland industrial leasing activity totaled 1,553,522 SF in Q3 2026 and 6,807,342 SF year to date, up 5.4% from 6,461,274 SF in the same period of 2025, according to Kidder Mathews research. Quarterly activity remained near historically low levels as occupiers, particularly smaller tenants, approached expansion plans cautiously. (Data source: CoStar)
What was industrial net absorption in Portland in Q3 2026?
Portland industrial net absorption was -617,434 SF in Q3 2026 and -1,492,314 SF year to date, compared with 756,462 SF in the first three quarters of 2025, according to Kidder Mathews research. Negative net absorption means more space was vacated than newly occupied. Airport Way recorded the largest quarterly decline among submarkets at -573,971 SF. (Data source: CoStar)
How much industrial space is under construction in Portland in Q3 2026?
Portland industrial new deliveries totaled 162K SF in Q3 2026, according to Kidder Mathews research, and new construction remains manageable as starts have slowed. The largest projects under construction are Sequoia Logistics Center (778,720 SF, SE Outlying, delivering 1Q 2027), DSV Hillsboro (750,000 SF, Sunset Corridor/Hillsboro, delivering 3Q 2027), and Mt. Vista Logistics (583,318 SF, Orchards, delivering 4Q 2026). (Data source: CoStar)
What was the largest industrial sale in Portland in Q3 2026?
The largest Portland industrial sale in Q3 2026 was 6317 NE 131st Ave in Vancouver, WA (Orchards submarket), where Columbia Nutritional purchased the 74,500 SF property from EQT Real Estate for $11,616,429, or $155.93 per SF, according to Kidder Mathews research. Sale transactions totaled 1,032,323 SF for the quarter and 4,424,852 SF year to date, up 22.1% from the same period of 2025. (Data source: CoStar)
What was the largest industrial lease in Portland in Q3 2026?
The largest Portland industrial lease in Q3 2026 was 98,280 SF at 4600 NE 138th Ave in the East Columbia Corridor, signed in August 2026 by tenant Javelin Logistics with landlord Phelan Development Co., according to Kidder Mathews research. The second-largest was 91,481 SF at 2600-2700 SE Mailwell Dr in Clackamas/Milwaukie, leased by PCC Structurals in July 2026. (Data source: CoStar)
Which Portland industrial submarkets have the lowest vacancy in Q3 2026?
Westside had the lowest direct vacancy rate among Portland industrial submarket groups at 2.9% in Q3 2026, followed by Southwest at 3.2% and Southeast at 4.5%, according to Kidder Mathews research. CBD/Northwest (10.0%), I-5 Corridor (9.0%), and Northeast (8.1%) were above the 6.9% market average. (Data source: CoStar)
How is the Clark County, WA industrial market performing in Q3 2026?
Clark County, WA had a direct vacancy rate of 6.9%, a total vacancy rate of 7.1%, and an availability rate of 9.3% in Q3 2026, according to Kidder Mathews research. It led the Portland region in year-to-date positive net absorption at 648,400 SF, recorded 338,690 SF of leasing activity in the quarter, and averaged a rental rate of $1.01 per SF. (Data source: CoStar)
What is the unemployment rate in the Portland metro area in 2026?
The unemployment rate for the Portland-Vancouver-Hillsboro MSA was 4.9% as of July 2026, down from 5.2% a year earlier, according to the U.S. Bureau of Labor Statistics. Over the same period, the manufacturing labor sector decreased by 4.0% and the Trade, Transportation, and Utilities sector decreased by 1.4%.
What is the outlook for the Portland industrial market through the end of 2026?
Kidder Mathews research expects elevated availability and subdued leasing to keep the Portland industrial market in an adjustment period through the remainder of 2026. Slower construction starts limit the risk of significant oversupply, though ongoing deliveries could prolong the recovery, and newer facilities in well-located distribution corridors are better positioned to capture demand.
Last updated: Q3 2026. Data source: Kidder Mathews Research, CoStar, U.S. Bureau of Labor Statistics. Compiled by the Kidder Mathews Research Group.
Q3 2026 Portland Industrial Market: Key Data Points
Explore our full Portland industrial market review for deeper insights into leasing trends, sale activity, and submarket performance.
- Vacancy: Direct vacancy rose to 6.9%, up 127 bps year over year, while total vacancy stood at 8.0%.
- Availability: Total availability reached a record 11.9%, up 245 bps year over year, driven primarily by direct space.
- Asking rents: The average asking lease rate was $0.85 per SF per month NNN, down 5.6% year over year from $0.90.
- Net absorption: Net absorption was -617,434 SF in the quarter and -1,492,314 SF year to date, compared with 756,462 SF in the first three quarters of 2025.
- Leasing activity: Leasing totaled 1,553,522 SF in the quarter and 6,807,342 SF year to date, up 5.4% from the same period of 2025.
- Sales activity: Sale transactions totaled 1,032,323 SF in the quarter and 4,424,852 SF year to date, up 22.1% year over year.
- New deliveries: New deliveries totaled 162K SF, and the largest project under construction is the 778,720 SF Sequoia Logistics Center in SE Outlying.
Submarket Statistics
| Submarket | Total Inventory (SF) |
Direct Vacancy Rate |
Total Vacancy Rate |
Total Availability Rate |
3Q 2026 Total Net Absorption (SF) |
YTD Total Net Absorption (SF) |
3Q 2026 Total Leasing Activity (SF) |
Total Rental Rate (NNN) |
|---|
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 3Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 3Q 2026 Total Leasing Activity (SF) | Total Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| Lloyd District | 2,116,817 | 13.0% | 13.0% | 16.2% | 66,859 | -18,645 | 0 | $0.81 |
| Airport Way | 18,102,776 | 10.4% | 11.1% | 13.9% | -573,971 | -683,798 | 160,743 | $0.71 |
| East Columbia Corridor | 30,804,926 | 6.8% | 9.3% | 13.0% | -76,717 | -121,970 | 395,160 | $0.85 |
| Gateway | 3,002,353 | 5.8% | 6.4% | 11.6% | -1,200 | -103,555 | 2,000 | $0.82 |
| Gresham | 1,296,634 | 6.3% | 6.3% | 7.3% | -9,150 | -11,454 | 0 | $0.88 |
| Hayden Island/Swan Island | 10,434,703 | 4.8% | 6.3% | 8.5% | -40,739 | -53,399 | 67,851 | $0.99 |
| NE Close-In | 4,015,595 | 5.7% | 5.7% | 7.4% | 9,546 | 47,807 | 2,933 | $0.91 |
| NE Outlying | 84,266 | 0.0% | 0.0% | 0.0% | 0 | 0 | 0 | $0.00 |
| Rivergate | 16,678,416 | 11.3% | 12.0% | 17.2% | 141,671 | -320,518 | 0 | $0.62 |
| Northeast | 84,419,669 | 8.1% | 9.5% | 13.1% | -550,560 | -1,246,887 | 628,687 | $0.74 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 3Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 3Q 2026 Total Leasing Activity (SF) | Total Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| CBD | 797,919 | 15.1% | 15.1% | 14.5% | 6,900 | 20,447 | 5,000 | $0.00 |
| Guilds Lake | 12,491,057 | 9.8% | 10.4% | 13.9% | -151,426 | -260,256 | 69,918 | $0.95 |
| NW Close-In | 759,880 | 8.8% | 8.8% | 13.2% | 5,200 | -10,714 | 16,620 | $1.14 |
| NW Outlying | 133,800 | 0.0% | 0.0% | 0.0% | 0 | 0 | 0 | $0.00 |
| CBD/Northwest | 14,182,656 | 10.0% | 10.5% | 13.8% | -139,326 | -250,523 | 91,538 | $0.91 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 3Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 3Q 2026 Total Leasing Activity (SF) | Total Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| Clackamas/Milwaukie | 25,438,695 | 4.2% | 5.8% | 9.2% | -66,729 | -62,799 | 167,396 | $0.82 |
| Mall 205 | 399,198 | 0.6% | 0.6% | 1.3% | 0 | 0 | 0 | $0.00 |
| Oregon City | 1,314,555 | 1.1% | 1.1% | 1.1% | -750 | 12,500 | 1,250 | $0.85 |
| SE Close-In | 5,644,657 | 5.3% | 5.3% | 7.4% | 79,418 | 130,228 | 18,500 | $1.08 |
| SE Outlying | 5,811,929 | 6.0% | 6.0% | 20.5% | -44,871 | -96,675 | 25,000 | $0.85 |
| Southeast | 38,609,034 | 4.5% | 5.6% | 10.3% | -32,932 | -16,746 | 212,146 | $0.90 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 3Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 3Q 2026 Total Leasing Activity (SF) | Total Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| 217 Corridor/Beaverton | 5,783,900 | 2.6% | 2.7% | 7.1% | 55,438 | 93,089 | 32,756 | $1.05 |
| SW Close-In | 752,704 | 8.0% | 8.0% | 8.0% | 11,113 | -12,666 | 6,300 | $1.36 |
| Southwest | 6,560,578 | 3.2% | 3.3% | 7.2% | 66,551 | 80,423 | 39,056 | $1.04 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 3Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 3Q 2026 Total Leasing Activity (SF) | Total Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| Sunset Corridor/Hillsboro | 22,176,101 | 2.5% | 3.3% | 6.9% | 54,624 | 88,499 | 48,286 | $1.06 |
| Westside Outlying | 3,610,975 | 5.4% | 9.3% | 15.2% | 1,088 | -42,198 | 0 | $0.92 |
| Westside | 25,787,076 | 2.9% | 4.1% | 8.1% | 55,712 | 46,301 | 48,286 | $1.06 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 3Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 3Q 2026 Total Leasing Activity (SF) | Total Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| I-5 Corridor Outlying | 2,251,626 | 36.6% | 39.5% | 57.2% | -69,200 | 167,613 | 0 | $0.00 |
| Lake Oswego/West Linn/Kruse Way | 1,533,459 | 0.5% | 3.5% | 3.7% | -1,142 | -35,482 | 0 | $0.95 |
| Tigard | 6,311,089 | 3.8% | 6.7% | 9.0% | 26,899 | 94,475 | 55,579 | $0.83 |
| Tualatin/Sherwood | 15,129,846 | 8.8% | 11.7% | 14.8% | -143,162 | -597,903 | 127,566 | $0.86 |
| Wilsonville | 7,193,066 | 7.2% | 7.8% | 19.6% | 166,169 | -25,936 | 11,884 | $1.05 |
| I-5 Corridor | 32,419,086 | 9.0% | 11.4% | 17.2% | -20,436 | -397,233 | 195,029 | $0.89 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 3Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 3Q 2026 Total Leasing Activity (SF) | Total Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| Yamhill County | 5,190,194 | 2.6% | 2.6% | 4.4% | -82,405 | -97,205 | 0 | $0.77 |
| Skamania County | 103,485 | 0.0% | 0.0% | 0.0% | 0 | 0 | 0 | $0.00 |
| Columbia County | 2,829,014 | 10.4% | 10.4% | 10.4% | -2,100 | -240,199 | 0 | $0.00 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 3Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 3Q 2026 Total Leasing Activity (SF) | Total Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| Camas/Washougal | 2,757,663 | 1.0% | 1.0% | 1.5% | -15 | 79,390 | 1,580 | $1.50 |
| Cascade Park | 606,300 | 73.2% | 73.2% | 73.5% | 0 | 0 | 0 | $0.00 |
| CBD/West Vancouver | 6,105,247 | 3.9% | 4.1% | 6.0% | 21,268 | -88,146 | 1,890 | $1.04 |
| Clark County Outlying | 4,395,523 | 0.7% | 0.7% | 0.7% | 0 | 115,976 | 0 | $1.94 |
| Hazel Dell/Salmon Creek | 2,226,075 | 2.4% | 2.6% | 2.8% | -31,523 | 253,329 | 12,943 | $1.27 |
| Orchards | 8,031,583 | 11.8% | 12.2% | 19.5% | 20,594 | 69,668 | 96,118 | $1.18 |
| St. Johns/Central Vancouver | 7,261,860 | 5.9% | 6.0% | 5.8% | 10,879 | 213,824 | 226,159 | $0.89 |
| Vancouver Mall | 14,975 | 0.0% | 0.0% | 0.0% | 0 | 4,359 | 0 | $1.46 |
| Clark County | 31,399,226 | 6.9% | 7.1% | 9.3% | 21,203 | 648,400 | 338,690 | $1.01 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 3Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 3Q 2026 Total Leasing Activity (SF) | Total Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| Total | 243,616,835 | 6.9% | 8.0% | 11.9% | -617,434 | -1,492,314 | 1,553,522 | $0.85 |
| Business Park Size | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 3Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 3Q 2026 Total Leasing Activity (SF) | Total Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| 10,000-49,999 SF | 9,575,795 | 8.2% | 8.7% | 9.7% | 37,335 | -120,262 | 155,052 | $1.08 |
| 50,000-149,999 SF | 17,310,211 | 11.7% | 15.6% | 18.3% | 134,540 | -142,876 | 301,476 | $0.90 |
| 150,000+ SF | 11,970,291 | 13.9% | 13.9% | 22.1% | 193,571 | -220,788 | 85,807 | $0.84 |
| Business Park Total | 38,856,297 | 11.5% | 13.4% | 17.4% | 365,446 | -483,926 | 542,335 | $0.96 |
Significant Sale Transactions 3Q 2026
| Property | Submarket | SF | Sale Price | $/SF | Buyer | Seller |
|---|---|---|---|---|---|---|
| 6317 NE 131st Ave | Orchards | 74,500 | $11,616,429 | $155.93 | Columbia Nutritional | EQT Real Estate |
| 5408 NE 88th St | St. Johns/Cntrl. Vancouver | 69,750 | $11,470,000 | $164.44 | Sunrise Manufacturing Inc. | Craig Stein Beverage |
| 4201 NE 161st Ave | East Columbia Corridor | 26,270 | $4,300,000 | $163.68 | Mikhalil Rabinovich | Ivy Deborah |
| 1313 NE Lombard Pl | NE Close-In | 25,375 | $4,250,000 | $167.49 | Allen Properties, LLC | Laughing Planet |
| 18200 SW Pacific Hwy | Tualatin | 12,828 | $4,225,000 | $329.36 | Grant McCulloch | Neil Barker |
Significant Lease Transactions 3Q 2026
| Property | Submarket | SF | Transaction Date | Landlord | Tenant |
|---|---|---|---|---|---|
| 4600 NE 138th Ave | East Columbia Corridor | 98,280 | August 2026 | Phelan Development Co. | Javelin Logistics |
| 2600-2700 SE Mailwell Dr | Clackamas/Milwaukie | 91,481 | July 2026 | Lincoln Property Co. | PCC Structurals |
| 12220-12370 SW Cimino St | Tualatin | 86,481 | July 2026 | Ares Mgmt Corp. | Undisclosed |
| 17363 NE Sacramento St | East Columbia Corridor | 82,555 | August 2026 | Summit Properties | Arnprior Aerospace Portland, Inc. |
| 13539-13551 SE Johnson Rd | Clackamas/Milwaukie | 64,322 | July 2026 | Lincoln Property Co. | PCC Structurals |
Significant Under Construction
| Property | Address | Submarket | SF | Owner | Delivery |
|---|---|---|---|---|---|
| Sequoia Logistics Center | S Township Rd | SE Outlying | 778,720 | Trammell Crow / Affinius | 1Q 2027 |
| DSV Hillsboro | 5740 NW Jackson School Rd | Sunset Corridor/Hillsboro | 750,000 | DSV | 3Q 2027 |
| Mt. Vista Logistics | 17009-16713 NE 50th Ave | Orchards | 583,318 | Panattoni | 4Q 2026 |
| Baker Center | SE 1st Ave & S Walnut St | SE Outlying | 347,645 | Trammell Crow / Capital Comm. Group | 4Q 2026 |
| Vanrose Technology Center | 2625 NE Huffman Rd | Sunset Corridor/Hillsboro | 303,969 | MDI Capital | 4Q 2026 |
Data as of 3Q 2026. Source: Kidder Mathews Research, CoStar, U.S. Bureau of Labor Statistics. Prepared by the Kidder Mathews Research Group.
ContactGARY BARAGONA |
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