Portland Metro Overview
As autumn settles in and leaves blanket the ground, many eyes are turning to the U.S. For Portland, numerous state, county, and city initiatives are top of mind for local businesses. However, the commercial real estate landscape leaves much to be desired. In Q3, occupancy levels remained subdued, with a negative absorption rate totaling over 1.5 million square feet in cumulative losses over the past year. An increasing number of buildings are hitting the auction block, often sold at steep discounts from lenders (such as Montgomery Park and Liberty Centre), while tenants are downsizing their space requirements and hesitating to make decisions.
Sublease space has reached an all-time high, exceeding 2 million square feet, which is expected to flood the direct leasing market once lease terms expire. Downtown continues to face the most significant challenges, whereas suburbs like Tigard, Kruse Way, and Beaverton are experiencing higher occupancy rates and interest.
According to CoStar, an intriguing statistic reveals that leases expiring before 2030 account for about 20% of square footage leased before April 2020. In contrast, the national average hovers around 30%, with some premier gateway markets exceeding 40%.
