Portland Industrial Market Report

1st Quarter 2023

Posted In — Market Research | Market Report


AVERAGE ASKING LEASE RATES gained 14.3% year-over-year (YOY) from $0.74/SF NNN in 1Q
2022 to $0.85/SF NNN in 1Q 2023.

DIRECT VACANCY RATES dropped 50 basis points (bps) YOY from 3.1% in 1Q 2022 to 2.6%
in 1Q 2023. Total availability rates increased by 60 bps YOY from 4.8% in 1Q 2022 to 5.4%
in 1Q 2023.

LEASING ACTIVITY DECREASED 56.3% YOY from 3.23 million SF in 1Q 2022 to 1.41 million SF
in 1Q 2023. The most active submarkets were Northeast and Southeast with 486,105 SF and
319,315 SF, respectively.

SALES VOLUME DROPPED 21.5% YOY from 1.4 million SF in 1Q 2022 to 1.1 million SF in 1Q 2023.

ONLY 40,088 SF of industrial space was delivered this quarter. There is currently 3.4 million SF of industrial space under construction.


IN JANUARY the Manufacturing sector within the Portland-Vancouver-Hillsboro MSA gained
2.6% YOY to 126,700 jobs. The Trade, Transportation, and Utilities sector fell slightly by 1.7%
YOY to 227,600 jobs.

IN JANUARY 2023 the statewide unemployment rate in Oregon was 4.8% while the Portland-
Vancouver-Hillsboro MSA reported a 4.5% unemployment rate.


THERE HAS BEEN A SLIGHT INCREASE in sublease space coming to the market resulting in total
availability increasing by 60-bps QOQ to 5.4%– further widening the spread between vacancy
and availability. This is the highest availability rate the region has seen since 2Q 2021 (5.4%).

DESPITE THE DECLINE in both sales and leasing activity, the Portland industrial market remains
strong with a low direct vacancy rate of 2.6%.

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