MARKET DRIVERS
Average asking lease rates gained 17.31% year-over-year (YOY) from $0.71/SF NNN in 3Q 2021 to $0.83/SF NNN in 3Q 2022.
Direct vacancy rates dropped 25% YOY from 4.0% in 3Q 2021 to 3% in 3Q 2022. Total availability rates decreased 2.17% YOY from 4.6% in 3Q 2021 to 4.5% in 3Q 2022.
Leasing activity decreased 21.06% YOY from 3.52 million SF in 3Q 2021 to 2.77 million SF in 3Q 2022. The most active submarkets were the Northeast and Clark County submarkets with 759,885 SF and 744,055 SF of total leasing activity respectively.
Sales volume grew by 62.2% YOY from 1.41 million SF in 3Q 2021 to 2.28 million SF in 3Q 2022.
1,137,126 SF of industrial space was delivered this quarter. There is currently 3.18 million SF of industrial space under construction.
ECONOMIC OVERVIEW
Manufacturing industries within the Portland-Vancouver-Hillsboro MSA gained 7.1% YOY to 131,900 jobs. Companies in the trade, transportation, and utilities fields grew 1.9% YOY to 225,900 jobs.
For August 2022, the Oregon unemployment rate increased slightly by 10 basis points (bps) to 3.7%. Comparatively, the Portland-Vancouver-Hillsboro MSA reported a 3.6% unemployment rate during this period.
NEAR-TERM OUTLOOK
The industrial market remains strong with extremely limited supply. Increased interest rates may decrease new speculative development further restricting supply.
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