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April 07, 2014

Report: Three areas in which Portland's commercial real estate market is getting tighter

Portland Business Journal

Wendy Culverwell

The year already is one-fourth over.

That means it's time for Kidder Mathews to weigh in with its quarterly report on the state of the office, industrial and retail markets in the six-county area that makes up the Portland metro area. Here are the highlights, courtesy of Rebecca Liddell of Kidder Mathews' appraisal division


  • Size of market: 116.5 million square feet.
  • New construction delivered in Q1: 970,000 square feet.
  • Notable additions: Walmart at Mill Creek Town Center in Battle Ground.
  • Broke ground: Nyberg Rivers at Tualatin, which will boast Cabela's and New Seasons Market.
  • Total under construction: 537,227 square feet.
  • Demand drivers: Casual and quick service restaurants, urgent care facilities, hardware, organic and natural grocery stores.
  • Vacancy rate: 5.3 percent, down 10 basis points.
  • Net change in overall leasing: 36,897 square feet.
  • Biggest surprise: Nordstrom's decision to close its store at Lloyd Center and Vancouver Mall.


  • Vacancy rate: The first quarter closed with a 5.4 percent vacancy rate, following a general trend of decline since the 2010 peak of about 8.5 percent.
  • Net change in overall leasing: 104,306 square feet.
  • Major renewal s: Terminal Transfer renewed and extended for 250,000 square feet at Kelley Point Distribution Center and Colgate-Palmolive signed a short-term renewal for 210,330 square feet at Rivergate Corporate Center.
  • Total under construction: More than 1 million square feet, with one third at Capstone Partners speculative PDX Logistics Center near Portland International Airport.


  • Size of market: 97.4 million square feet.
  • Vacancy rate: The first quarter closed with an overall 9.1 percent vacancy, down 30 basis points from the end of the year.
  • Net change in overall leasing: 447,7343 square feet.
  • Major renewal: U.S. Bank's renewal for about 277,000 square feet at U.S. Bancorp Tower.
  • Major trend: Class B rents are up nearly 3 percent over the year due to ongoing repositioning of older buildings into creative office space.
  • Outlook: Ongoing demand for creative space is spurring new development in the Pearl District as San Francisco and Seattle companies open outposts in Portland. Falling vacancy rates translate to fewer concessions and a long-term increase in rents.

For the full story, go to Portland Business Journal.

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