Portland Office Market Report

4th Quarter 2022

Posted In — Market Research | Market Report


Office direct vacancies continue to trend upwards across the Portland metro, increasing 20 basis points YOY to 11.1% at the end of the fourth quarter.

Average asking lease rates increased slightly YOY to $28.32/SF on a full-service basis, however, fell QOQ when compared to $28.44/SF in 3Q. Tenants may continue to control lease negotiations given a decline in space needs driven by hybrid work options.

Leasing activity dropped to an all-time record low of only 574K SF leased, down 35% YOY. Companies continue to shrink their office footprints, which in turn has pushed sublease availability to a record high of 2.36M SF.

Office sales volume in the fourth quarter dropped to 474K SF, a decrease of over 50% YOY and a 10-year record low, averaging $224/SF.


Portland’s economy continues its slow-paced recovery from the severe stress caused by the pandemic. The local unemployment rate peaked at nearly 15% in April 2020 but has since trended downward to 3.7% as of October 2022.

Although the battle with inflation and hiked interest rates continues, incomes in Portland exceed the national average, and population growth remains steady. Portland is popular among millennials looking for high quality of life and the lack of sales tax in Oregon is also an appeal.


The Portland office market will continue to shake out the negative impacts of the pandemic in the coming year. As Oregon was one of the last states to lift indoor mask mandates only recently this year, business decisions to get back to the office were impacted, thus extending remote work longer than expected.

The combination of a market flooded with sublet offerings, mixed with high profile deliveries will force properties to compete for tenants which may result in further rent decreases in the coming quarters.

New development will continue to slow in anticipation of increased interest rates, historically high construction costs and supply chain constraints.

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