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Portland Office Market Report

2nd Quarter 2021

Posted In — Market Research | Market Report

MARKET DRIVERS

OFFICE DIRECT VACANCY in the Portland metro area rose 40% YOY, reporting a rate of 10.5% for all class types.

ASKING LEASE RATES remained stable, reporting $28.02/SF full service by the end of Q2 2021.

LEASING ACTIVITY rose 12% YOY to 819,135 SF through the end of the second quarter 2021. Total Class A lease activity reached 351,267 SF, with sublease activity standing at 41,492 SF.

NIKE’S NORTH EXPANSION project in Beaverton, totaling 1.90 million SF, delivered in Q2 2021.

UNDER CONSTRUCTION projects in Portland include the Adidas Expansion (425,000 SF) and 503 on Tenth (269,908 SF).

ECONOMIC OVERVIEW

THE PORTLAND ECONOMY is slowly bouncing back in 2021, as the state of Oregon fully reopened on June 30. As local businesses reopen, there is optimism that strong consumer spending will drive the Portland economy forward in 2021.

UNEMPLOYMENT rates reached a high 13.2% in April 2020 due to the COVID-19 pandemic. Since then, unemployment has gradually fallen, standing at 5.9% in Q2 2021.

NEAR-TERM OUTLOOK

WHILE VACANY RATES in the past year due to COVID-19, signs of renewed leasing activity have resurfaced in the market.

VACCINE LEVELS have approached the point where most office buildings in the Portland market have fully reopened. Kidder Mathews expects a more pronounced spike in touring and leasing activity in the following months.

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