MARKET DRIVERS
ASKING LEASE RATES rose 5.7% year-over-year (YOY) from $0.70/SF NNN in 1Q2021 to $0.74/SF NNN for 1Q2022.
LEASING ACTIVITY decreased 22.9% YOY to 2.1 million SF for Q1 2022. The most active submarkets were Northeast and the I-5 Corridor with 751,828 SF and 516,009 SF respectively.
AFTER A STELLAR 4Q 2021 with 5.1 million SF of sales activity, the industrial market started Q1 2022 slowly with 1 million SF of sales volume.
211,579 SF of industrial space was delivered this quarter. Notable buildings under construction include the 1.5 million SF for the Intel Expansion Project in Hillsboro, OR and the 468,810 SF Ridgefield Industrial Center in Ridgefield, WA.
DIRECT VACANCY RATES decreased 26.2% YOY from 4.2% in 1Q 2021 to 3.1% in 1Q 2022. The total availability dropped 17% YOY from 5.9% in 1Q 2021 to 4.9% in 1Q 2022.
THERE IS CURRENTLY 5.9 million SF under construction.
ECONOMIC OVERVIEW
MANUFACTURING INDUSTRIES within the Portland-Vancouver-Hillsboro MSA gained 4.9% YOY to 125,200 jobs. Transportation and warehousing companies within the region also rose 1.2% YOY to 49,000 jobs.
FOR FEBRUARY 2022, Unemployment in Oregon decreased to 4.0%. Comparatively, the Portland-Vancouver-Hillsboro MSA reported a 3.8% unemployment rate during this period.
NEAR-TERM OUTLOOK
SHRINKING DIRECT VACANCY RATES and availability rates showcase the high demand for industrial properties. 5.9 million SF of construction projects are on the horizon to help alleviate the lack of supply.
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