Portland represents a growing and thriving market where commercial real estate investors and tenants alike can participate and find success. The Portland scene features a sprawling MSA with a growing labor force and highly competitive acquisition and rent costs compared to other West Coast metros.
Crexi connects individuals interested in Portland commercial real estate to hundreds of investment-ready assets in the area and the tools they need to research, identify, and acquire the ideal property.
Brokers who represent Portland commercial property for sale harness Crexi’s robust listing and management tools to navigate their deals from list to close more quickly. At this time, Crexi’s commercial real estate technology has aided brokers in the closing of over $440 billion in property value and marketing more than $5 trillion in assets.
Crexi proudly supports Portland, Beaverton, Tigard, Gresham, Lake Oswego, and the surrounding communities as the nation’s fastest-growing commercial real estate platform.
The State of Portland Commercial Real Estate
Greater Portland is a metropolitan area located in the Pacific Northwest region of the United States, encompassing parts of Oregon and Washington. It includes the major cities of Portland, Vancouver, Beaverton, Hillsboro, Gresham, and Oregon City.
The area has a diverse cultural scene featuring numerous arts and cultural institutions, historic landmarks, and festivals throughout the year. The region’s diverse economy has various business activities, including technology, healthcare, retail, and banking. The city’s transportation infrastructure is well-developed, featuring numerous highways and public transit options, which makes the area more accessible for both residents and visitors.
Tenants looking to lease space in Portland will find various options across office, industrial, and retail properties. The area is known for having competitive lease rates and lease types to suit different business needs. Commercial real estate investors may find the region an attractive investment opportunity due to its strong economic performance and job market, diverse tenant base, and many property types.
Portland Regional Breakdown
The Portland metropolitan area has seen significant population growth over the past decade. According to the World Population Review, Portland’s population grew more than 10% from 2000 to 2010, and population growth in the Portland metro area has outpaced the national average for the last decade. Approximately 2.5 million people live in the Portland metropolitan statistical area, making it the 26th most populous in the United States.
- Portland is the county seat of Multnomah County.
- The population of the city of Portland is over 641,000, while Multnomah County is home to nearly 806,000.
- Metropolitan Portland comprises five counties in Oregon and two counties in Washington, including 24 cities.
- The most populous cities are Portland, Oregon City, Hillsboro, Gresham, Beaverton, Tigard, Tualatin, Lake Oswego, and West Linn.
- The median age is 39.1, on par with Oregon’s and the US’ median.
- Per capita income is $44,343, and median household income is $83,943, both figures higher than the amount in Oregon and the US.
Portland Job Market
Portland, Oregon’s economy and job market is vigorous, with steady annual growth projected over the next few years. The region’s job market has historically been growing more than other similarly sized metro areas, offering above-average incomes to a varied workforce. Large employers, including healthcare providers, technology companies, retailers, and banks, play key roles in driving the region’s economic growth.
- According to the St. Louis Fed, GDP for Portland-Vancouver-Hillsboro is nearly $187 billion, consistently increasing over the past 20 years.
- Employment sectors reporting the most robust growth include mining and logging, construction, leisure and hospitality, and information services (BLS March 2023).
- The unemployment rate is 3.6% and is nearing historic lows.
- The top 5 major employers in Greater Portland are Intel, Providence Health & Services, Oregon Health & Science University, Nike, and Legacy Health, with nearly 90,000 regional employees combined.
- Portland targets eight key industry sectors: Apparel and outdoor, bioscience, climate tech, computers and electronics, design and media, food and beverage, metals and machinery, and software.
- WalletHub ranks Portland as one of the best metro areas for STEM professionals based on key criteria such as job openings, the share of the workforce in STEM, and employment growth.
- Over 42% of residents hold a bachelor’s degree or higher, a rate about 20% higher than in Oregon and the US.
- Portland State University, University of Portland, Reed College, and Lewis & Clark College are among Portland’s top institutions of higher education.
- Niche.com ranks Portland as one of the best cities in America for young professionals, with high grades for diversity, public schools, families, and nightlife.
- Portland International Airport (PDX) is served by 18 airlines with over 70 non-stop national destinations and 11 international destinations.
- Greater Portland is home to three Interstate highways, two freight rail lines, the Port of Portland and the Port of Vancouver.
Portland Industrial Market
The Portland industrial market experienced a slowdown in leasing activity in Q1 2023. Although vacancy numbers decreased slightly, absorption rates were lower due to the lack of new inventory. While more industrial deliveries are expected in the coming quarters, new constructions may be limited in an uncertain economic climate. The industrial market in Portland continues to see a high demand for inventory, although difficult leasing conditions are expected to persist without the addition of new projects, according to Newmark:
- Total industrial inventory: 205,663,799 SF
- Overall asking rent: $0.94/SF per month
- Total vacancy: 2.7%
- Net Absorption: 228,246 SF in Q1 2023
- Key lease transactions by tenant: SureWerx 154,648 SF, Flowserve 123,372 SF, Portland Bottling 104,500 SF, Mega Home 68,610 SF
- Under construction: 6.1 million SF in Q1 2022, down from 7.3 million in the same period last year
- Key sales transactions by property: 19150 SW 125th Court $7.8 million ($240/SF), 2700 SE Tacoma Street $5.8 million ($74/SF), 19140 NE Portal Way $5.3 million ($204/SF)
- Largest industrial submarkets: NE/Columbia Corridor, Sunset Corridor, I-5 South Corridor, Clark County
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Portland Office Market
The Portland office market experienced modest growth in supply in Q1 2023, resulting in a slight 40-basis-point increase in market-wide vacancy. Negative absorption rates were recorded for the fifth consecutive quarter, with submarkets such as the Lloyd District and Kruse Way losing occupied office space.
Despite this, there are still opportunities for businesses looking for office spaces in Portland’s Central Business District and other submarkets. Here are the most recent trends in the Portland office market from Newmark:
- Total office inventory: 61,872,542 SF
- Average asking rent (all classes): $31.30/SF per year, full-service gross
- Vacancy rate: 18.8% overall
- Absorption: -298,000 SF (Q1 2023)
- Key leases by tenant: LAM Research 21,945 SF, Oregon Bureau of Labor & Industries 18,723 SF, DR Horton 16,075
- New construction: 389,000 SF (Q1 2023) vs. 663,000 SF same period last year
- Deliveries: None in the current quarter
- Investment sales by building: 4713 N. Albina Ave $5.9 million, 5115 NE 82nd Ave $3.8 million, 3747 NE Sandy Blvd $2.8 million
- Largest office submarkets: Central Business District, 217 Corridor/Beaverton, Sunset Corridor/Hillsboro, Close-In Southeast
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Portland Retail Market
The Greater Portland retail market experienced negative net absorption in Q1 2023, leading to a slight increase in vacancy rates. Although the Central City submarket has the highest vacancy rate in the city, direct asking rates on a triple net basis decreased quarter-on-quarter but still showed annual growth. Despite challenging market conditions, property sales rebounded, with investors interested in well-positioned retail assets. These are the Q1 2023 as reported by Colliers:
- Total retail inventory: 56,719,414 SF
- Overall asking rent: $20.84/SF per year, NNN vs. $20.11/SF the same period last year
- Direct vacancy rate: 5.1%
- Absorption: -115,400 SF
- Key leases by tenant: Dick’s Sporting Good 65,881 SF, JoAnn Fabrics 20,000, Boot Barn 10,000 SF
- New construction: 191,600 SF, nearly double the amount in Q1 2022
- Key sales by property: The Streets of Tanasbourne $53.5 million, Beaverton Town Square $42.2 million, Oregon Trail Shopping Center $30.8 million
- Largest retail submarkets: Westside, Eastside, Clark County
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Portland Multifamily Market
Portland’s multifamily market slowed down in Q1 2023 after a period of impressive growth in market fundamentals and sales activity. Although effective rent growth slowed down and occupancy rates fell, the apartment market continues to develop with a growing construction pipeline.
While Q1 2023 saw the lowest occupancy rate since 2017, this is still a sustainable development as Portland’s population continues growing in the face of housing shortages. CBRE reports the following trends in the Portland apartment market for Q1 2023:
- Total multifamily inventory: 228,495 units
- Occupancy rate: 94.7%
- Average asking rent: $1,751
- Rent growth: 5.5% year over year
- Top submarkets with +7% rent growth: Southwest Portland/Tigard, Lake Oswego/Tualatin/Wilsonville, Vancouver
- Renter-occupied households: 47% (Zumper)
- Completions: 716 units in Q1 2023
- Key sales by property: Westridge Lofts $31.1 million ($310,000/unit), Heatherbrae Commons $49 million ($281,609/unit), Mist Wood Apartments $13.6 million ($276,531/unit)
- Largest multifamily submarkets: East Portland, Vancouver, Central Portland, Beaverton
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