Q4 2024 - Portland Office Market Report

Portland’s office market is a little like a slow-motion plot twist with a “Salt Bae” of chaos. Big companies are rethinking their office needs, attendance policies are shifting faster than plans on a rainy Portland weekend, and demand per worker might be heading for a hard reset.

Meanwhile, occupancy rates? They’re sliding downhill like a newbie on Mt. Hood.

There’s some hope, though. Job growth in office-using sectors has been crawling at 0.2% annually since 2020 (basically turtle speed), but experts think it might pick up to 0.7% by 2029. It’s not lightning fast, but hey, we’ll take what we can get. Unfortunately, right now, office absorption is still in full retreat, with 1 million square feet lost this year—like a bad date, companies are shrinking their space and ghosting older buildings.

New construction? It’s all champagne taste and high-end spaces, leaving the older stock to fend for itself.
The upside? Portland isn’t dealing with a flood of new office buildings. In 2023, construction starts were among the lowest in 20 years, which helps prevent a vacancy tsunami. Vacancy rates are headed for 13.68% by early 2025, close to the national average, but sublease space—at a whopping 2.3 million square feet—is a flashing neon “WHOA.”

And rents? They’ve grown 2.2% annually, which is like getting a “C” on a test you didn’t study for, better than failing, but you’re not bragging about it. Suburban areas, especially on the Washington side of the river, are doing better thanks to limited construction and friendlier taxes.

So, what’s the vibe? Portland’s office market is a mixed bag, a little progress here, a lot of challenges there. Think of it like trying to assemble IKEA furniture: the pieces are there, but it’s going to take some work (and probably some swearing) to make it all fit.