The following reflects Portland industrial market conditions as of 2Q 2026.
MARKET DRIVERS
Portland’s industrial market continued to soften in the second quarter, with total availability climbing to a record 11.1% as sublease space kept expanding. Sublease availability has grown from less than 1M SF in 2022 to nearly 5M SF this quarter, giving tenants more leasing options and intensifying competition among landlords. Asking rents held relatively steady in the mid-$0.80s to low-$0.90s PSF NNN range, though concessions continued to pressure effective rents even as newer Class A product maintained premium pricing.
Leasing activity totaled 1.5M SF for the quarter, the lowest quarterly volume since 2008, as occupiers remained cautious about expansion plans. Demand stayed concentrated in newer, well-located facilities, with Vancouver’s south and west submarkets drawing steady tenant interest due to cross-border access, transportation connectivity, and a favorable business environment.
ECONOMIC OVERVIEW
As of May 2026, the unemployment rate for the Portland-Vancouver-Hillsboro MSA was 4.7%, up from 4.6% a year earlier. This compares to 5.2% statewide in Oregon and 4.3% nationally.
The manufacturing labor sector within the Portland-Vancouver-Hillsboro MSA declined 4.8% year-over-year to 111.4K jobs, a loss of 5,600 jobs over the past year, while the Trade, Transportation, and Utilities sector fell 2.4% year-over-year to 212.8K jobs.
NEAR-TERM OUTLOOK
With new construction slowing considerably, Portland’s industrial market is expected to gradually work through existing available space over the coming quarters. However, elevated sublease inventory is likely to remain a competitive factor, giving occupiers a broad range of leasing options while slowing the pace of vacancy improvement.
Recovery is expected to vary by submarket, with newer facilities and well-located distribution corridors better positioned to attract tenant demand. As business confidence improves and occupiers resume expansion activity, market fundamentals should strengthen over the longer term.
Frequently Asked Questions
What is the industrial vacancy rate in Portland in 2Q 2026?
Portland’s direct industrial vacancy rate was 7.0% in 2Q 2026, up 160 basis points from 5.4% in 2Q 2025, according to Kidder Mathews research. Total vacancy, which includes sublease space, was 8.0% for the market as a whole. Vacancy varied widely by submarket, ranging from as low as 0.4% in Lake Oswego/West Linn/Kruse Way to as high as 50.1% in Cascade Park.
What is the total availability rate for Portland industrial space?
Total availability reached a record 11.1% in 2Q 2026, up 228 basis points year-over-year from 8.8% in 2Q 2025 (Data source: CoStar). The increase was driven largely by continued growth in sublease space, which has risen from less than 1M SF in 2022 to nearly 5M SF this quarter.
What are average asking rents for Portland industrial space?
The average asking lease rate across the Portland industrial market was $0.88 PSF/month NNN in 2Q 2026, up 3.5% year-over-year from $0.85. Rates vary significantly by submarket, ranging from roughly $0.62 PSF/month NNN in Rivergate to $1.94 PSF/month NNN in Clark County Outlying, according to Kidder Mathews research.
How much industrial space was leased in Portland in 2Q 2026?
Total leasing activity was 1,487,030 SF in 2Q 2026, the lowest quarterly volume since 2008. Year-to-date leasing activity of 3,964,210 SF is down 9.9% from 4,401,932 SF over the same period in 2025, as occupiers remained cautious with expansion plans.
What was net absorption in the Portland industrial market in 2Q 2026?
Net absorption was negative 867,770 SF in 2Q 2026, meaning tenants vacated more space than they occupied during the quarter. Negative net absorption brought year-to-date net absorption to -1,748,405 SF, compared with positive absorption of 820,458 SF over the same period in 2025 (Data source: CoStar).
How much new industrial construction is underway in Portland?
Approximately 100K SF of new industrial space was delivered in Portland during 2Q 2026, according to Kidder Mathews research. Among significant projects still under construction, Sequoia Logistics Center (778,720 SF, SE Outlying) is slated to deliver in 1Q 2027, and DSV Hillsboro (750,000 SF, Sunset Corridor/Hillsboro) is expected in 3Q 2027.
What was the largest industrial sale in Portland in 2Q 2026?
The largest industrial sale of 2Q 2026 was 4915 & 4975 NE Starr Blvd in Hillsboro’s Sunset Corridor/Hillsboro submarket, a 496,000-SF property that sold for $223,000,000 ($449.60/SF). Flexential purchased the asset from T5 Data Centers, according to Kidder Mathews research.
What was the largest industrial lease in Portland in 2Q 2026?
The largest lease transaction of the quarter was at 5504 S 11th St in Ridgefield, WA, within the Clark County Outlying submarket, where Ferguson leased 117,415 SF from EQT Real Estate in May 2026.
What is the leasing activity outlook for industrial space in Vancouver, WA submarkets?
Vancouver’s south and west submarkets, part of Clark County, have continued to attract steady tenant interest due to cross-border access, transportation connectivity, and a favorable business environment. Clark County posted positive 2Q 2026 net absorption of 345,587 SF and year-to-date net absorption of 527,725 SF, outperforming the broader Portland market, which posted negative net absorption for the same periods.
What is the outlook for the Portland industrial market?
With new construction slowing considerably, Kidder Mathews research expects Portland’s industrial market to gradually work through existing available space over the coming quarters, though elevated sublease inventory should remain a competitive factor. Recovery is expected to vary by submarket, with newer, well-located distribution facilities best positioned to capture tenant demand as business confidence and occupier expansion activity improve.
Last updated: 2Q 2026. Data source: Kidder Mathews Research, CoStar, U.S. Bureau of Labor Statistics. Compiled by the Kidder Mathews Research Group.
2Q 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.
- Availability Reaches Record High: Total availability increased to 11.1%, up 228 basis points year-over-year, driven largely by growth in sublease inventory.
- Vacancy Rate Continues to Rise: Direct vacancy reached 7.0% in 2Q 2026, increasing 160 basis points from 5.4% one year ago.
- Leasing Activity Slows Significantly: Quarterly leasing volume totaled 1.5M SF, marking the lowest quarterly leasing activity recorded since 2008.
- Negative Net Absorption Persists: The market recorded -868K SF of net absorption during the quarter as occupiers remained cautious with expansion plans.
- Asking Rents Remain Stable: Average asking lease rates increased slightly to $0.88 PSF NNN, up 3.5% year-over-year despite growing competitive pressure from available space.
- Construction Deliveries Slow: Only 100K SF of new industrial space was delivered during the quarter, supporting expectations for improved market balance over the longer term.
Submarket Statistics
| Submarket | Total Inventory (SF) |
Direct Vacancy Rate |
Total Vacancy Rate |
Total Availability Rate |
2Q 2026 Total Net Absorption (SF) |
YTD Total Net Absorption (SF) |
2Q 2026 Total Leasing Activity (SF) |
Total Rental Rate |
|---|
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 2Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 2Q 2026 Total Leasing Activity (SF) | Total Rental Rate |
|---|---|---|---|---|---|---|---|---|
| Lloyd District | 2,169,817 | 17.0% | 17.0% | 20.3% | -80,513 | -85,414 | 962 | $0.81 |
| Airport Way | 17,778,350 | 6.8% | 8.1% | 10.7% | -11,150 | -114,381 | 93,969 | $1.08 |
| East Columbia Corridor | 31,177,536 | 7.0% | 9.1% | 13.9% | -275,310 | -87,752 | 180,762 | $0.89 |
| Gateway | 2,956,824 | 5.8% | 6.5% | 12.1% | -78,877 | -102,355 | 3,900 | $0.90 |
| Gresham | 1,295,116 | 5.6% | 5.6% | 5.9% | 12,096 | -2,304 | 0 | $0.94 |
| Hayden Island/Swan Island | 10,473,799 | 4.2% | 5.9% | 8.8% | -5,745 | -12,660 | 35,368 | $1.03 |
| NE Close-In | 3,993,123 | 7.6% | 7.6% | 8.5% | 20,696 | -28,652 | 17,800 | $0.92 |
| NE Outlying | 84,266 | 0.0% | 0.0% | 0.0% | 0 | 0 | 0 | $0.00 |
| Rivergate | 16,677,829 | 10.8% | 12.3% | 16.4% | -115,358 | -384,272 | 22,800 | $0.62 |
| Northeast | 84,436,843 | 7.3% | 8.9% | 12.6% | -453,648 | -732,376 | 354,599 | $0.82 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 2Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 2Q 2026 Total Leasing Activity (SF) | Total Rental Rate |
|---|---|---|---|---|---|---|---|---|
| CBD | 797,919 | 16.0% | 16.0% | 15.1% | -9,700 | 13,547 | 6,900 | $0.00 |
| Guilds Lake | 12,466,075 | 9.0% | 9.0% | 13.2% | 84,349 | -82,940 | 55,000 | $0.96 |
| NW Close-In | 768,281 | 7.5% | 7.5% | 12.7% | -15,600 | -1,600 | 0 | $1.13 |
| NW Outlying | 133,800 | 0.0% | 0.0% | 0.0% | 0 | 0 | 0 | $0.00 |
| CBD/Northwest | 14,166,075 | 9.2% | 9.3% | 13.1% | 59,049 | -70,993 | 61,900 | $0.92 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 2Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 2Q 2026 Total Leasing Activity (SF) | Total Rental Rate |
|---|---|---|---|---|---|---|---|---|
| Clackamas/Milwaukie | 25,490,165 | 4.3% | 5.7% | 8.5% | 46,196 | -29,344 | 119,011 | $0.83 |
| Mall 205 | 399,198 | 0.6% | 0.6% | 0.6% | 0 | 0 | 0 | $0.00 |
| Oregon City | 1,319,055 | 1.0% | 1.0% | 1.0% | 13,180 | 13,250 | 11,000 | $1.38 |
| SE Close-In | 5,648,131 | 6.8% | 6.8% | 9.0% | -41,988 | 44,810 | 57,797 | $1.08 |
| SE Outlying | 5,761,635 | 5.3% | 5.3% | 18.2% | 4,563 | -54,204 | 67,474 | $0.93 |
| Southeast | 38,618,184 | 4.7% | 5.6% | 9.7% | 21,951 | -25,488 | 255,282 | $0.92 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 2Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 2Q 2026 Total Leasing Activity (SF) | Total Rental Rate |
|---|---|---|---|---|---|---|---|---|
| 217 Corridor/Beaverton | 5,873,921 | 3.6% | 3.6% | 6.8% | 46,703 | 33,651 | 116,241 | $1.03 |
| SW Close-In | 757,620 | 7.5% | 9.4% | 10.7% | -22,479 | -23,779 | 0 | $1.57 |
| Southwest | 6,655,515 | 4.0% | 4.3% | 7.2% | 24,224 | 9,872 | 116,241 | $1.08 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 2Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 2Q 2026 Total Leasing Activity (SF) | Total Rental Rate |
|---|---|---|---|---|---|---|---|---|
| Sunset Corridor/Hillsboro | 22,002,649 | 2.5% | 3.5% | 4.8% | -19,010 | 34,619 | 64,991 | $0.98 |
| Westside Outlying | 3,574,762 | 5.3% | 9.3% | 14.5% | -61,284 | -37,286 | 0 | $0.38 |
| Westside | 25,577,411 | 2.9% | 4.3% | 6.2% | -80,294 | -2,667 | 64,991 | $0.77 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 2Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 2Q 2026 Total Leasing Activity (SF) | Total Rental Rate |
|---|---|---|---|---|---|---|---|---|
| I-5 Corridor Outlying | 2,563,326 | 43.6% | 46.1% | 50.0% | -548,550 | -467,737 | 0 | $0.00 |
| Lake Oswego/West Linn/Kruse Way | 1,533,459 | 0.4% | 3.5% | 4.5% | -21,490 | -34,340 | 4,882 | $0.08 |
| Tigard | 6,286,962 | 5.4% | 7.4% | 9.4% | -2,791 | 67,576 | 25,218 | $0.81 |
| Tualatin/Sherwood | 15,141,547 | 7.9% | 10.8% | 12.9% | -125,945 | -463,969 | 110,468 | $0.86 |
| Wilsonville | 7,191,651 | 9.3% | 9.9% | 20.1% | 4,922 | -178,909 | 41,322 | $1.08 |
| I-5 Corridor | 32,716,945 | 10.1% | 12.4% | 16.3% | -693,854 | -1,077,379 | 181,890 | $0.87 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 2Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 2Q 2026 Total Leasing Activity (SF) | Total Rental Rate |
|---|---|---|---|---|---|---|---|---|
| Yamhill County | 5,181,407 | 1.0% | 1.0% | 4.1% | -12,000 | -14,800 | 0 | $0.73 |
| Skamania County | 103,485 | 0.0% | 0.0% | 0.0% | 0 | 0 | 0 | $0.00 |
| Columbia County | 2,826,526 | 11.7% | 11.7% | 10.4% | 1,728 | -276,885 | 0 | $1.25 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 2Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 2Q 2026 Total Leasing Activity (SF) | Total Rental Rate |
|---|---|---|---|---|---|---|---|---|
| Camas/Washougal | 2,721,391 | 1.0% | 1.1% | 1.5% | 25,985 | 79,405 | 27,565 | $1.50 |
| Cascade Park | 885,997 | 50.1% | 50.1% | 50.3% | 0 | 0 | 0 | $0.00 |
| CBD/West Vancouver | 6,119,616 | 5.0% | 5.5% | 7.4% | -192,601 | -174,204 | 1,890 | $0.86 |
| Clark County Outlying | 4,425,601 | 0.7% | 0.7% | 0.7% | 117,728 | 115,976 | 117,415 | $1.94 |
| Hazel Dell/Salmon Creek | 2,212,964 | 2.5% | 2.5% | 2.4% | 269,353 | 256,596 | 10,448 | $1.23 |
| Orchards | 8,003,623 | 12.0% | 12.4% | 20.1% | 115,510 | 44,448 | 72,133 | $1.30 |
| St. Johns/Central Vancouver | 7,250,036 | 6.1% | 6.1% | 7.2% | 5,253 | 201,145 | 39,589 | $0.94 |
| Vancouver Mall | 14,975 | 0.0% | 0.0% | 0.0% | 4,359 | 4,359 | 4,359 | $1.46 |
| Clark County | 31,634,203 | 7.1% | 7.4% | 10.0% | 345,587 | 527,725 | 273,399 | $1.04 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | 2Q 2026 Total Net Absorption (SF) | YTD Total Net Absorption (SF) | 2Q 2026 Total Leasing Activity (SF) | Total Rental Rate |
|---|---|---|---|---|---|---|---|---|
| Portland Total | 244,086,411 | 6.8% | 8.0% | 11.1% | -867,770 | -1,748,405 | 1,487,030 | $0.88 |
Data as of 2Q 2026. Source: Kidder Mathews Research, CoStar. Prepared by the Kidder Mathews Research Group.
Business Park Statistics
| Business Park Size | Total Inventory (SF) |
Direct Vacancy Rate |
Total Vacancy Rate |
Total Availability Rate |
2Q 2026 Total Net Absorption (SF) |
YTD Total Net Absorption (SF) |
2Q 2026 Total Leasing Activity (SF) |
Total Rental Rate |
|---|---|---|---|---|---|---|---|---|
| 10,000-49,999 SF | 9,574,802 | 8.5% | 9.2% | 10.3% | -113,991 | -120,262 | 147,506 | $1.08 |
| 50,000-149,999 SF | 17,349,307 | 11.8% | 15.8% | 19.9% | -305,260 | -142,876 | 107,008 | $0.90 |
| 150,000+ SF | 11,970,291 | 14.4% | 15.5% | 23.0% | -91,822 | -220,788 | 9,318 | $0.83 |
| Business Park Total | 38,894,400 | 11.8% | 14.1% | 18.5% | -511,073 | -483,926 | 263,832 | $0.96 |
Data as of 2Q 2026. Source: Kidder Mathews Research, CoStar. Prepared by the Kidder Mathews Research Group.
Significant Sale Transactions 2Q 2026
| Property | Submarket | SF | Sale Price | $/SF | Buyer | Seller |
|---|---|---|---|---|---|---|
| 4915 & 4975 NE Starr Blvd | Sunset Corridor/Hillsboro | 496,000 | $223,000,000 | $449.60 | Flexential | T5 Data Centers |
| 26440 SW Parkway Ave | Wilsonville | 204,158 | $31,000,000 | $151.84 | DCI International | Bill Naito Company |
| 404 N Holladay St | Westside Outlying | 154,646 | $29,750,000 | $192.37 | Meadowlark Industrial Prop., LLC | AltaBird Inv./The Carlyle Grp. |
| 1401 W Fourth Plain Blvd | CBD/West Vancouver | 261,540 | $17,800,000 | $68.06 | Watumull Properties Corp. | Hood Packaging Corp. |
| 5209-5926 & 5938 N Basin Ave | Hayden Island/Swan Island | 118,280 | $16,900,000 | $142.88 | Newmark Properties | Greg Burpee |
Significant Lease Transactions 2Q 2026
| Property | Submarket | SF | Transaction Date | Landlord | Tenant |
|---|---|---|---|---|---|
| 5504 S 11th St | Clark County Outlying | 117,415 | May 2026 | EQT Real Estate | Ferguson |
| 19018 NE Portal Way | East Columbia Corridor | 90,894 | May 2026 | Summit Properties, Inc. | Piping Rock Health Products |
| 4740 NE 166th St | East Columbia Corridor | 65,800 | April 2026 | Clarion Partners | Bluelinx Corporation |
| 5051 SW Western Ave | 217 Corridor/Beaverton | 60,000 | April 2026 | Todd & Polli Collins | Rivian |
| 11950 SW Leveton Dr | Tualatin | 57,757 | May 2026 | IDM Companies | Blue Ocean Globe |
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 Corr./Hillsboro | 750,000 | DSV | 3Q 2027 |
| Mt Vista Logistics | 17009-16713 NE 50th Ave | Orchards | 583,318 | Panattoni | 4Q 2026 |
| Sherwood Commerce Ctr – Phase 2 | SW Industry Ln & SW Commerce Ct | I-5 Corridor Outlying | 554,500 | Schnitzer Properties | 3Q 2026 |
| Baker Center | SE 1st Ave & S Walnut St | SE Outlying | 347,645 | Trammel Crow Co./Capital Comm. Grp. | 3Q 2026 |
Data as of 2Q 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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