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Portland - OR
PREPARED BY
Office Market Report
OFFICE MARKET REPORT
Market Key Statistics 2
Leasing 3
Rent 8
Construction 11
Under Construction Properties 13
Sales 15
Sales Past 12 Months 17
Economy 19
Market Submarkets 22
Supply & Demand Trends 29
Rent & Vacancy 31
Sale Trends 33
Portland Office
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OverviewPortland Office
486 K 71.4 K 7.8% 2.8%12 Mo Deliveries in SF 12 Mo Net Absorption in SF Vacancy Rate 12 Mo Rent Growth
Portland's strong economy is spurring demand for theoffice market. Though deliveries slowed in 2019, 2020will see substantial new supply: More than 2 million SFhas been actively under construction since the end of2016. Much of the ongoing development is build-to-suit,primarily campus expansions for Nike, Adidas, and NWNatural.
So far, vacancies have largely held up, remaining farbelow the long-term average. Though rent gains havemoderated over the past few years, rent growth outpaces
both national performance and the metro's historicalaverage.
Portland office investment reached a cycle high in 2019,and annual sales volume has rounded to $1.25 billion orhigher each of the past five years. Office properties heresell at lower prices than comparable assets situated inalternative West Coast metros, including San Jose, SanFrancisco, and nearby Seattle, making Portland anappealing choice for investors.
KEY INDICATORS
Market RentVacancy RateRBACurrent Quarter Availability RateNet Absorption
SFDeliveries SF
UnderConstruction
$33.739.6%32,861,8984 & 5 Star 11.9% 162,714 441,469 1,861,999
$26.668.6%44,761,5853 Star 11.1% (240,238) 0 519,887
$22.094.6%30,889,8831 & 2 Star 6.0% (95,795) 0 4,200
$27.607.8%108,513,366Market 9.9% (173,319) 441,469 2,386,086
ForecastAverage
HistoricalAverage
12 MonthAnnual Trends Peak When Trough When
7.7%9.6%0.4%Vacancy Change (YOY) 13.8% 2004 Q1 7.0% 2017 Q4
813,9431,067,95671.4 KNet Absorption SF 3,489,581 2005 Q2 (1,007,061) 2009 Q4
1,120,413921,462486 KDeliveries SF 1,950,122 2016 Q4 77,961 2019 Q4
1.7%2.5%2.8%Rent Growth 7.3% 2007 Q1 -4.7% 2009 Q4
N/A$876.6M$1.6 BSales Volume $2.1B 2007 Q2 $197.2M 2010 Q2
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LeasingPortland Office
Flat Portland office vacancies have held fairly steady forthe past few years, benefiting from strong tenant demandand limited speculative supply. However, some high-profile, recent speculative deliveries are lingering on themarket: Of space delivered over the past two years, one-quarter remains available for lease. A similar proportionof space now under construction is available for lease.Additionally, 20Q1 has witnessed a spate of tenantmove-outs, including DWFritz Automation's formerheadquarters in Wilsonville.
Most of Portland's recent net demand stems from build-to-suit projects, as several large office tenants areexpanding their existing campuses. Nike is midwaythrough a 1.4-million-SF expansion in the SunsetCorridor/Hillsboro Submarket. Adidas broke ground in18Q3 on a 425,000-SF campus expansion, creatingroom for an additional 1,000 employees. Finally, NWNatural is relocating its headquarters to the 191,000-SF250 Taylor in the CBD, delivered in March 2020.
Tech tenants account for several large recent leases,concentrated in the CBD. Formerly operating out of aWeWork space, Square leased 64,000 SF at Aspect onSixth. In August, Google secured 84,000 SF at the Meier& Frank Building, newly renovated creative office spacepreviously occupied by a Macy's department store.Amazon has also expanded its footprint in the metro. Inearly 2018, the e-commerce giant leased 84,000 SF atBroadway Tower, which delivered in 18Q4. Just across
the street, Amazon's AWS Elemental division (formerlyElemental Technologies) opened a 101,000-SF office atthe former Oregonian headquarters in 17Q3.
Two education tenants account for larger leases of 2019.University of Western States leased 152,000 SF at 8000NE Tillamook St., the former HQ of Banfield Pet Hospital,in 19Q1 with plans to finalize the university's relocationby early 2020. Also in 19Q1, East West College ofHealing Arts leased 30,000 SF at 1515 Market Square.
Several co-working companies have secured space innewly constructed or renovated buildings. At the mixed-use Beacon Lake Oswego, CENTRL Office will occupy30,000 SF. At District Office in SE Close-In, Spacesleased 32,000 SF. And WeWork secured all 55,000square feet at 830 Oregon Square, just months after itsrenovation completed. This marked WeWork's fourthPortland location, the first on the east side.
Creative office space continues to be in high demandamong tenants, developers, and investors. Many newerprojects are speculative. Some creative officedevelopments are built from the ground up, such as theField Office development in Guilds Lake and Tree Farmin SE Close-In, but repositioning existing buildings hasproven to be the more popular approach. TowneStorage, Leland James, and U.S. Custom House are allprominent examples of this trend.
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LeasingPortland Office
NET ABSORPTION, NET DELIVERIES & VACANCY
VACANCY RATE
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LeasingPortland Office
AVAILABILITY RATE
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LeasingPortland Office
12 MONTH NET ABSORPTION SF IN SELECTED BUILDINGS
3rd QtrBuilding Name/Address Submarket Bldg SF Vacant SF
1st Qtr 2nd Qtr 4th Qtr 12 Month
Net Absorption SF
CBD 190,825 1,456 189,369 0 0 0 189,369250 Taylor
Cascade Park 171,823 0 0 0 0 0 171,823Vancouver Tech Center
Gateway 152,642 0 0 0 0 0 83,0308000 NE Tillamook St
SE Close-In 90,778 28,274 62,504 0 0 0 62,504District Office
Lloyd District 55,395 0 0 0 0 0 52,713Oregon Square
Sunset Corridor/Hills… 51,328 0 0 0 0 0 51,328Mike Osborne Bldg
Cascade Park 45,000 0 0 0 0 0 44,812Chkalov Bldg
CBD 133,000 0 0 0 0 0 34,845Meier & Frank Delivery Depot
Sunset Corridor/Hills… 97,000 0 33,314 0 0 0 34,771AmberGlen Business Center
CBD 87,976 0 54,822 0 0 0 33,045Falcon Building
CBD 215,983 8,702 2,464 0 0 0 31,5631515 Market Square
Guilds Lake 30,774 0 0 0 0 0 30,7743200 Yeon Bldg
CBD/West Vancouver 41,795 12,934 28,861 0 0 0 28,861Hurley Office Tower
Sunset Corridor/Hills… 89,893 25,645 38,254 0 0 0 26,748AmberGlen Corporate Center
Kruse Way 90,849 2,953 6,540 0 0 0 25,409Kruse Woods
217 Corridor/Beaverton 51,924 0 0 0 0 0 22,936Park Plaza West
CBD 45,324 8,383 12,741 0 0 0 22,634Broadway Commons Building
1,642,309 88,347 428,869 0 0 0 947,165Subtotal Primary Competitors
106,871,057 8,331,666 (602,188) 0 0 0 (875,804)Remaining Portland Market
108,513,366 8,420,013 (173,319) 0 0 0 71,361Total Portland Market
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LeasingPortland Office
TOP OFFICE LEASES PAST 12 MONTHS
Building Name/Address Submarket Leased SF Tenant Name Tenant Rep Company Leasing Rep CompanyQtr
Vancouver Tech Center Cascade Park 83,519 Sigma Design, Inc - Fuller Group CREQ2 19
Meier & Frank Building CBD 80,000 Google CBRE CBREQ3 19
13900 NW Science Park Dr Sunset Corridor/Hillsboro 61,820 Electro Scientific Industrie… - -Q3 19
2600 NW Lake Rd Camas/Washougal 54,024 Kagwerks - -Q1 20
2600 NW Lake Rd Camas/Washougal 54,024 Fisher Investments - -Q1 20
Kruse Woods Kruse Way 53,589 Logical Position Newmark Knight Frank CBRE;JLLQ4 19
Pioneer Tower * CBD 53,069 Tonkon Torp LLP Newmark Knight Frank JLLQ3 19
Oregon Square Lloyd District 52,575 WeWork - Capacity Commercial…Q2 19
AmberGlen Corporate Center Sunset Corridor/Hillsboro 38,254 Skyworks Newmark Knight Frank JLLQ3 19
Bank of America Financial Center * CBD 37,355 - JLL JLLQ3 19
Columbia Square * CBD 35,000 AECOM Cushman & Wakefie… -Q3 19
Nimbus Oaks 217 Corridor/Beaverton 34,845 Vestas Technologies JLL -Q2 19
Meier & Frank Delivery Depot CBD 34,845 Education NW JLL JLLQ2 19
Nimbus Corporate Center 217 Corridor/Beaverton 33,904 - - Newmark Knight FrankQ3 19
Columbia Gorge Corporate Center * East Columbia Corridor 33,628 VetSource JLL -Q4 19
The Leland James NW Close-In 32,109 Zapproved Savills CresaQ4 19
Tigard Triangle Commons Tigard 29,519 Kronos - Colliers InternationalQ2 19
Mohawk Bldg CBD 27,198 - - Kidder MathewsQ4 19
Nimbus Corporate Center 217 Corridor/Beaverton 26,667 - - Colliers InternationalQ3 19
8909 SW Barbur Blvd Barbur Blvd/Capitol Hwy 26,354 - - JLLQ4 19
Capitol Plaza Barbur Blvd/Capitol Hwy 24,030 - - -Q4 19
Kimberly Center Hazel Dell/Salmon Creek 24,000 Area Agency on Aging of… - -Q2 19
US Bancorp Tower & Plaza CBD 23,680 Clinicient JLL JLLQ2 19
Chkalov Bldg Cascade Park 22,406 - - Fuller Group CREQ4 19
Chkalov Bldg Cascade Park 22,406 - - Fuller Group CREQ4 19
334 NW 11th Ave * CBD 22,003 Cloudability JLL -Q4 19
Moda Tower CBD 21,825 Holland & Knight - CBREQ3 19
7 Southeast Stark Lloyd District 21,766 - - JLLQ1 20
The 1201 Lloyd Building Lloyd District 21,643 - - CBREQ1 20
Kruse Woods Kruse Way 21,538 Pence Construction Apex Real Estate Pa… CBRE;JLLQ2 19
Aspect on Sixth CBD 21,374 Square JLL Colliers InternationalQ4 19
Aspect on Sixth CBD 21,368 Square JLL Colliers InternationalQ4 19
Moda Tower CBD 21,321 - - -Q1 20
Historic Ballou & Wright Building CBD 21,086 Skanska Colliers International CBREQ2 19
Historic Ballou & Wright Building CBD 20,993 Verizon - CBREQ4 19
PACWEST CBD 20,940 Key Bank JLL Cushman & Wakefield…Q3 19
One Town Center * Clackamas/Milwaukie 20,733 Automatic Data Processin… JLL PacTrustQ3 19
Cornell Medical Plaza * Sunset Corridor/Hillsboro 20,632 Legacy Health Cresa -Q3 19
Tanner Point CBD 20,500 - - CBREQ1 20
Triangle Corporate Park Tigard 20,038 - - Macadam Forbes, Inc.Q1 20
*Renewal
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RentPortland Office
Portland rent growth outpaces both national performanceand the metro's historical average, though year-over-year gains have markedly decelerated since 2016. Still,annual rent growth has been positive for 31 consecutivequarters. Relatively low vacancies have contributed tosizable cumulative rent growth in Stumptown over thecycle, with total rent gains at around 36% since the startof 2010. Performance for higher-end office space hasexceeded the average. In the next few years, Portlandoffice rent growth is forecast to further compress, aseconomic growth softens and vacancies drift a littlehigher but remain comparable to national performance.
The CBD features Portland's highest office rents, butsince mid-2018, year-over-year rent growth hastrended below Portland's overall performance. The CBD'srent gains have significantly slowed in the past fewyears. This is driven by rising submarket vacancy,
influenced by some sizable tenant move-outs, along withsome slow-to-lease speculative deliveries andrenovations. Still, the CBD saw a cumulative rentincrease of 46% this cycle, 1000 basis points more thanPortland's overall performance.
Some growth can be attributed to top-dollar leases increative office and restored historic buildings. Forexample, in June 2019, the renovated 1010 Flandersbuilding signed construction firm Skanska for a 21,000-SF lease. The asking rate was $42/SF FSG. In May2019, law firm Bullivant Houser Bailey PC leased 18,000SF at Umpqua Bank Plaza at a $38/SF FSG asking rate.The prior year, the Power + Light building signed twolarge leases for spaces each asking $38.50/SF FSG:Geosyntec Consultants leased 16,000 SF, and Coinbasetook 32,000 SF. All these leases were signed in theCBD, which features Portland's highest asking rents.
MARKET RENT GROWTH (YOY)
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RentPortland Office
MARKET RENT PER SQUARE FOOT
4 & 5 STAR EXPENSES PER SF (ANNUAL)
Utilities Cleaning InsuranceMarket / Cluster Taxes Other Total
Portland $1.37 $0.48$0.68 $2.92 $4.03 $9.48
CBD $1.66 $1.01$0.98 $3.07 $5.92 $12.64
Clark County $1.66 $0.20$0.47 $2.09 $3.20 $7.62
I-5 Corridor $1.16 $0.25$0.64 $2.99 $3.14 $8.18
Lloyd District $1.21 $0.32$0.60 $3.06 $3.80 $8.99
Northeast $1.18 $0.25$0.46 $2.62 $3.52 $8.03
Northwest $1.41 $1.00$0.97 $2.18 $5.12 $10.68
Southeast $1.20 $0.28$0.97 $3.11 $2.84 $8.40
Southwest $1.15 $0.39$0.57 $2.24 $3.52 $7.87
Westside $1.18 $0.30$0.41 $3.75 $3.40 $9.04
Expenses are estimated using NCREIF, Trepp, IREM, and CoStar data using the narrowest possible geographical definition from Zip Code to region.
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RentPortland Office
3 STAR EXPENSES PER SF (ANNUAL)
Utilities Cleaning InsuranceMarket / Cluster Taxes Other Total
Portland $1.19 $0.26$0.45 $2.47 $3.17 $7.54
CBD $1.61 $0.46$0.51 $2.03 $4.84 $9.45
Clark County $1.50 $0.17$0.43 $2.35 $2.88 $7.33
Columbia County $0.99 $0.22$0.38 $2.38 $2.51 $6.48
I-5 Corridor $1.13 $0.21$0.50 $3.02 $3.19 $8.05
Lloyd District $1.11 $0.23$0.45 $2.15 $3.44 $7.38
Northeast $1.10 $0.23$0.43 $2.54 $3.22 $7.52
Northwest $1.16 $0.38$0.43 $3.15 $3.14 $8.26
Southeast $1.15 $0.23$0.52 $2.32 $3.12 $7.34
Southwest $1.04 $0.25$0.41 $2.63 $2.76 $7.09
Westside $0.73 $0.27$0.38 $2.42 $2.21 $6.01
Yamhill County $0.97 $0.22$0.37 $2.07 $2.49 $6.12
Expenses are estimated using NCREIF, Trepp, IREM, and CoStar data using the narrowest possible geographical definition from Zip Code to region.
1 & 2 STAR EXPENSES PER SF (ANNUAL)
Utilities Cleaning InsuranceMarket / Cluster Taxes Other Total
Portland $1.13 $0.20$0.43 $2.39 $1.91 $6.06
CBD $1.60 $0.37$0.48 $2.40 $3.65 $8.50
Clark County $1.50 $0.17$0.38 $1.89 $1.74 $5.68
Columbia County $0.93 $0.19$0.35 $1.63 $1.09 $4.19
I-5 Corridor $1.06 $0.17$0.48 $2.72 $2.03 $6.46
Lloyd District $1.07 $0.18$0.44 $2.32 $2.44 $6.45
Northeast $1.05 $0.19$0.41 $2.56 $2.13 $6.34
Northwest $1.09 $0.26$0.39 $3.37 $1.76 $6.87
Skamania County $1.07 $0.20$0.41 $1.67 $2.20 $5.55
Southeast $1.12 $0.17$0.50 $2.22 $1.95 $5.96
Southwest $1.01 $0.22$0.39 $2.66 $1.76 $6.04
Westside $0.74 $0.19$0.37 $2.20 $1.36 $4.86
Yamhill County $0.95 $0.20$0.36 $1.97 $0 $3.48
Expenses are estimated using NCREIF, Trepp, IREM, and CoStar data using the narrowest possible geographical definition from Zip Code to region.
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ConstructionPortland Office
Though Portland saw little new office supply deliver in2019, 2.4 million SF is currently under construction,much of which will deliver in the upcoming year. Many ofthe largest projects are build-to-suit, limiting upwardpressure on vacancies in the near term. But whilePortland's supply growth is formidable, it trails far behindthat of West Coast metros like San Jose, Seattle, andSan Francisco.
In March 2020, the new headquarters of NW Naturaldelivered in the CBD. The utility company signed a184,000-SF lease, committing to the relocation of itscompany headquarters from One Pacific Square. Third &Taylor Development broke ground on the 10-story,191,000-SF 250 Taylor in 18Q2; it sold in 19Q4 for $141million, still months from delivery.
Build-to-suits make up a majority of the metro's ongoingprojects. A massive 1-million-SF expansion at Nike'sBeaverton campus is underway, in addition to the412,000 SF delivered in 2018. Following in Nike'sfootsteps, in 18Q3, Adidas broke ground on a 425,000-SF campus expansion, estimated at several hundredmillion dollars in construction costs. Adidas currentlyemploys about 1,700 people in Portland, and theexpansion will create room for another 1,000 workers.The 175,000-SF PSU Fourth & Montgomery is alsounderway, anticipated to deliver in 20Q4. Tenants willinclude Portland's Bureau of Planning and Sustainability,along with Portland State University, Oregon Health &Science University, and Portland Community College.
In the pipeline's largest speculative project, Block 216broke ground in July 2019. Owned by BPM Real EstateGroup, its office portion will comprise 156,000 SF ofspeculative space. Asking rates are $38/SF to $42/SFNNN. In addition to five floors of office space, the tower
also contains the first Ritz-Carlton in the PacificNorthwest, along with 15 floors of luxury residentialcondos and 4.5 floors of parking.
The two-building, 287,000-SF Field Office wasPortland's largest speculative office project of 2018, withboth the East and West buildings delivering in the spring.Located a block away from the NW riverfront, thedevelopment's office portion remains about 25%occupied. In May 2019, the two buildings sold for $118million. Other large speculative projects have beenconcentrated in the CBD. Broadway Tower delivered inOctober 2018, including 178,000 SF of 5 Star officespace, a 180-room hotel, and parking for 237 vehicles.Amazon is Broadway Tower's largest tenant, with 84,000SF, and the building was almost fully preleased upondelivery. Additionally, Williams & Dame delivered the203,000-SF Tanner Point in October 2018 after its 17Q1groundbreaking. The eight-story building's office spacewas entirely available for lease upon delivery, thoughthat did not impede its sale for $76.6 million shortlyafterwards.
Given Portland's strong fundamentals and startup-oriented workforce, there is robust demand for creativeoffice space, most often located in and around the CBD,Lloyd District, and SE Close-In submarkets. Thoughsome creative office projects are built from the groundup, like Field Office, more are renovations of existingproperties. The 69,000-SF Premier Gear & MachineWorks Building is an example of the latter. Formerlyowned and occupied by a manufacturer, the Guilds Lakeproperty was acquired by Sturgeon DevelopmentPartners as a redevelopment project in 2017. Midwaythrough conversion to a creative office property, withanticipated delivery in 20Q2, the Premier Gear &Machine Works Building remains fully available for lease.
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ConstructionPortland Office
DELIVERIES & DEMOLITIONS
SUBMARKET CONSTRUCTION
Average Building Size
RankUnder Constr
Under Construction Inventory
All ExistingSF (000) Pre-Leased SF (000)SubmarketNo. RankBldgs Pre-Leased %
1 Sunset Corridor/Hillsboro 1 1,004 1,003,585100% 1 34,5571,004 1
2 Hayden Island/Swan Island 3 425 141,667100% 1 19,884425 3
3 CBD 3 362 120,79348.3% 6 73,647175 4
4 SW Close-In 1 150 150,0005.7% 8 10,3788 2
5 Lloyd District 1 120 120,4000% 9 24,4870 5
6 SE Close-In 2 69 34,64213.2% 7 16,3289 9
7 Guilds Lake 1 69 68,6460% 9 20,8430 6
8 Lake Oswego/West Linn 2 54 27,10085.6% 4 7,70446 10
9 East Columbia Corridor 1 54 53,55188.9% 3 8,73048 7
10 CBD/West Vancouver 1 53 52,80074.9% 5 11,89740 8
All Other 2 26 13,12145.0% 12,02312
Totals 18 2,386 132,56074.0% 18,1191,767
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Under Construction PropertiesPortland Office
18 2,386,086 2.2% 74.0%Properties Square Feet Percent of Inventory Preleased
UNDER CONSTRUCTION PROPERTIES
UNDER CONSTRUCTION
Property Name/Address Rating Bldg SF Stories Start Complete Developer/Owner
Dec-20161 SW Bowerman Dr
Nike North Expansion B…1,003,585 9 Apr-2020
-
NIKE, Inc.1
Aug-20185055 N Greeley Ave
Adidas Expansion180,000 5 Apr-2020
-
Adidas America2
Dec-2018401 SW Harrison St
PSU Fourth & Montgomery174,500 7 Oct-2020
-
Portland State University3
Jul-2019900 SW Washington St
Block 216 Office168,000 35 Feb-2023
-
BPM Real Estate Group4
Dec-2018817 SW 17th Ave
Canvas at Press Blocks150,000 8 May-2020
Urban Renaissance Group
Urban Renaissance Group5
Aug-20185055 N Greeley Ave
Adidas Expansion122,500 3 Apr-2020
-
Adidas America6
Aug-20185055 N Greeley Ave
Adidas Expansion122,500 3 Apr-2020
-
Adidas America7
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Under Construction PropertiesPortland Office
UNDER CONSTRUCTION
Property Name/Address Rating Bldg SF Stories Start Complete Developer/Owner
Aug-20185 SE Martin Luther King Jr…
5 MLK Office120,400 6 Apr-2020
Gerding Edlen
Gerding Edlen8
Jun-20191715 NW 17th Ave
Premier Gear & Machine…68,646 2 Jun-2020
-
Sturgeon Development Partners,…9
May-201918613 SE Stark St
Rockwood Rising53,551 4 Jun-2020
RKM Development, Inc.
Central Bethany10
Dec-2019330 E Mill Plain Blvd
Angelo Tower52,800 7 Jan-2021
-
Al Angelo Company11
Jan-2019B Ave
Beacon Lake Oswego50,000 4 Apr-2020
10 Branch
Rivers East LLC12
Feb-2020808 SE Alder St
Eastside Innovation Hub39,583 4 Aug-2020
-
Roberti Investment Company, LLC13
Aug-20191709 SE 3rd Ave
Volta29,700 1 Nov-2020
-
Killian Pacific14
Aug-20171818 SW 4th Ave
The Collective on Fourth…19,880 2 Apr-2020
-
Downtown Development Group15
Feb-20196406 NE 116th Ave
16,301 1 Apr-2020-
-16
Sep-2019735 E Clarendon St
9,940 2 May-2020-
Dr Bradley Clunes Chiropractor17
Feb-20202180 8th Ct
4,200 1 Jul-2020-
-18
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SalesPortland Office
As sales volume reached a cycle peak in 2019,Portland's structurally low vacancy rates, dynamiceconomy, and strong cumulative rent growth continued toheighten the metro's profile as an investment market.Portland office properties sell at lower prices than similarassets elsewhere on the West Coast, like Seattle, SanDiego, and Los Angeles, making Portland an appealingchoice for investors looking for exposure to expandingtech firms at a relative discount. Across Portland, officeinvestment has exceeded $1.25 billion for each of thepast five years. Market cap rates have held steady ataround 6%, with no significant changes anticipated.Sales volume is consistently concentrated in the CBD,which saw 33% of Portland's total office investment in2019. Of the top 10 buyers in 2019, Gerding Edlen wasthe only local firm to make the list, due to its $132 millionacquisition of the Power + Light Building. In 2019, overhalf of all capital came from REITS, private equity, orother institutional buyers.
Two large sales closed in January, kicking off 2020investment. In the CBD, the 187,000-SF HarrisonSquare sold for $52.8 million ($282/SF). Harrison Squarecomprises two six-story buildings connected at eachlevel via a sky bridge, along with a 265-space parkinggarage. Oregon Pacific Investment & Development Co.sold the asset to GEM Realty Capital, Inc. and LibertasCompanies, LLC. In Beaverton, the AmberGlen BusinessCenter sold for $87.3 million. Five of the nine buildingswere office assets, with an estimated value of $66.5million ($180/SF) in the transaction. Principal FinancialGroup Inc. sold the assets to PCCP LLC and TalonPrivate Capital.
The $255 million sale of the 657,000-SF MontgomeryPark in April 2019 marked one of Portland's largest-everoffice transactions. The sale also included a parkingstructure and a 36,000-SF warehouse. Buyers Unicoand Partners Group acquired the assets from the BillNaito Company. The new owners plan to repositionMontgomery Park and redevelop the other two sites, alllocated in the rapidly transforming NW Close-InSubmarket. Montgomery Park houses a long list of high-profile tenants. Just months earlier, the same buyers andseller traded the 182,000-SF The Galleria, located in theCBD, for $64.1 million ($352/SF) in December 2018. TheGalleria is also slated for redevelopment.
In October, the 191,000-SF 250 Taylor sold for $141.3million ($740/SF). Still under construction at the time ofsale, the build-to-suit is the new headquarters of NWNatural, occupying the building's full office portion.Prospect Ridge Advisors acquired the asset from sellersOnder Development Co, Rockwood Capital LLC, andArthur Mutal Investments LLC.
Two high-profile, mostly vacant speculativedevelopments delivered in 2018, each selling within theyear. In May 2019, the two-building, 287,000-SF FieldOffice development sold for $118 million ($411/SF), withits office portion only about 25% leased. In October2018, the 203,000-SF Tanner Point sold for $76.6million ($378/SF) within a month of delivery, its officeportion fully vacant and available for lease. Despite theirhigh-vacancy status, both properties were priced at least35% above the overall market rate.
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SalesPortland Office
SALES VOLUME & MARKET SALE PRICE PER SF
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Sales Past 12 MonthsPortland Office
366 6.1% $304 12.3%Sale Comparables Avg. Cap Rate Avg. Price/SF Avg. Vacancy At Sale
SALE COMPARABLE LOCATIONS
SALE COMPARABLES SUMMARY STATISTICS
Sales Attributes Low Average Median High
Sale Price $100,000 $6,993,846 $1,332,943 $255,000,000
Price Per SF $26 $304 $233 $752
Cap Rate 1.3% 6.1% 6.1% 8.6%
Time Since Sale in Months 0.2 6.1 5.9 11.9
Property Attributes Low Average Median High
Building SF 600 17,067 3,971 656,898
Stories 1 2 2 16
Typical Floor SF 483 6,812 2,975 72,989
Vacancy Rate At Sale 0% 12.3% 0% 100%
Year Built 1872 1958 1963 2020
Star Rating 2.2
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Sales Past 12 MonthsPortland Office
Property Name - Address Rating Yr Built Bldg SF Vacancy Price Price/SF
Property
Sale Date
Sale
Cap Rate
RECENT SIGNIFICANT SALES
-1 Montgomery Park1921 656,898 0% $255,000,000 $388
2701 NW Vaughn St4/1/2019 -
-2 250 Taylor2020 190,825 0% $141,250,000 $740
915 SW 2nd Ave10/3/2019 -
-3 Power + Light Building1927 272,079 4.3% $131,500,000 $483
920 SW Sixth Ave11/6/2019 -
-4 The Leland James1973 117,591 19.9% $67,500,000 $574
2175 NW Raleigh St5/8/2019 -
-5 Field Office - West2018 156,651 56.2% $67,424,181 $430
2035 NW Front Ave5/1/2019 -
-6 R.L. Woolworth Building1969 198,135 0% $64,029,935 $323
1621-SW 1st Ave5/23/2019 -
-7 Harrison Square1973 187,199 9.1% $52,800,000 $282
1800 SW 1st Ave1/24/2020 -
-8 Field Office - East2018 130,565 95.5% $50,575,819 $387
1895 NW Front Ave5/1/2019 -
-9 6Y1955 116,244 19.2% $47,500,000 $409
811 SW 6th Ave8/2/2019 -
-10 River Forum I1985 170,408 10.9% $45,733,457 $268
4380 SW MacAdam Ave11/25/2019 -
-11 The 100 at Park Square1969 97,632 0% $32,470,065 $333
100 SW Market St5/23/2019 -
-12 Bldg 71982 46,550 100% $20,417,663 $439
11950 SW Garden Pl9/26/2019 -
-13 13900 NW Science Park Dr- 103,558 0% $17,798,032 $1728/21/2019 -
-14 AmberGlen Business Ce…1999 97,000 0% $17,410,294 $179
1925 NE Stucki Ave1/15/2020 -
-15 1915 AmberGlen Office2001 96,674 5.4% $17,351,782 $179
1915 NE Stucki Ave1/15/2020 -
-16 Leftbank1922 60,209 14.5% $16,250,000 $270
240 N Broadway6/19/2019 -
-17 6402-6410 NE Halsey St1969 63,303 0% $16,000,000 $25312/31/2019 6.0%
-18 The Troy Laundry Bldg1913 51,010 0% $15,800,000 $310
1015 SE Pine St6/27/2019 3.3%
-19 Bldg 11981 44,962 0% $14,685,571 $327
12232-12244 SW Garden Pl9/26/2019 -
-20 7300 SW Childs Rd2005 20,994 0% $14,500,000 $6914/25/2019 5.6%
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EconomyPortland Office
Healthy economic indicators drive the robust demand forcommercial real estate in Portland. Incomes andemployment growth outpace the national average, andpopulation growth is similarly strong. The metro'spopularity persists among millennials looking for creative,affordable spaces close to transit hubs that allow them totake advantage of Portland's high quality of life. Manynew residents come in search of a lower cost of living; ofthe 11 West Coast metros with at least 1 millionresidents, only Fresno, California, has cheaper averageapartment rents than Portland. The lack of a sales tax inOregon and the lack of an income tax in Washingtonalso appeal.
Developers have identified the strong migration as ademand driver for new projects, many of which arehigher density. The Metro Council approved a 2,200-acre Urban Growth Boundary expansion in December2018, after declining a boundary expansion three yearsprior. Established in 1979, Portland's Urban GrowthBoundary has since been expanded 36 times.
Intel and Nike, the metro's largest non-government, non-healthcare employers, have both committed tosubstantial expansions of their corporate campuses,though each administered sizable job cuts in 2017. InJuly 2019, Intel broke ground on a 1.5-million-SFexpansion to D1X at its Ronler Acres campus inHillsboro. Previously, the multibillion-dollar D1Xdevelopment delivered 2.2 million SF in 2015, markingthe largest capital project in Oregon's history. Intelanticipates its workforce increasing by 12%, or 1,750workers, by 2021.
Nike's history with the state has been somewhat
tenuous, but this changed after the legislature agreed tolock in Nike's state tax rate at current levels. Thecompany's commitment to the region has culminated inthe ongoing construction of 1.4 million SF of office spaceat its Beaverton campus. Once completed, Nike willoccupy 350 acres of contiguous real estate, one of thelargest corporate campuses in America.
Nike has attracted a skilled workforce—as well as anumber of competitors—to the metro. Dr. Martens,Columbia Sportswear, and Lacrosse Footwear all haveheadquarters in the region, Under Armour occupies asizable footprint, and Adidas North America is midwaythrough a 425,000-SF office expansion of itsheadquarters.
Amazon is another major contributor to Portland'seconomy and has invested around $2.8 billion intoOregon. After acquiring Portland-based ElementalTechnologies for $296 million in October 2015, thecompany has leased about 200,000 SF of office space inthe CBD, along with about 2.5 million SF of industrialspace in the greater Portland metro. In 2020, Amazonwill move into an additional 300,000 SF of industrialspace. Amazon's industrial footprint already includes asortation center in Hillsboro employing 1,000 workersand fulfillment centers in North Portland (918,000 SF)and Troutdale (860,000 SF), both delivered in 18Q3, thatcollectively employ about 3,000 workers. The Seattle-based e-commerce giant chose to locate in Troutdalepartially because it is an Enterprise Zone, a designatedarea for businesses to get five-year tax abatements. Thecompany received around $9.6 million in abatements forthis facility, contributing to the $213 million in total taxbreaks for the company in Oregon.
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EconomyPortland Office
PORTLAND EMPLOYMENT BY INDUSTRY IN THOUSANDS
NAICS Industry Jobs LQ MarketUS USMarketUSMarket
Current Jobs Current Growth 10 Yr Historical 5 Yr Forecast
-0.32%0.01%1.15%2.26%0.19%1.22%1.3133Manufacturing
0.24%0.26%1.32%1.72%0.46%-0.39%1.0218Trade, Transportation and Utilities
0.20%0.47%0.93%1.50%-0.02%-1.14%0.9118 Retail Trade
0.31%0.43%1.26%1.60%1.45%0.99%1.175Financial Activities
0.64%0.93%0.07%0.32%0.67%0.94%0.8151Government
0.20%1.15%2.95%5.14%1.57%1.69%1.278Natural Resources, Mining and Construction
0.56%0.92%2.17%3.07%2.50%3.34%1.0191Education and Health Services
0.84%1.18%2.75%3.66%2.06%3.18%1.1192Professional and Business Services
0.46%0.95%0.41%0.88%1.23%1.43%1.125Information
0.53%0.63%2.73%3.38%1.78%2.32%1.0131Leisure and Hospitality
0.27%0.74%1.16%2.09%1.34%-1.99%0.943Other Services
Total Employment 1,236 1.0 1.54% 1.33% 2.41% 1.63% 0.70% 0.43%
Source: Oxford Economics
LQ = Location Quotient
Source: Oxford Economics
YEAR OVER YEAR JOB GROWTH
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EconomyPortland Office
DEMOGRAPHIC TRENDS
Current ChangeCurrent Level
Metro U.S.Metro U.S.Demographic Category
10-Year Change
Metro U.S. Metro U.S.
Forecast Change (5 Yrs)
Population 330,561,9692,515,414 1.0% 0.7% 1.3% 0.7% 1.1% 0.7%
Households 122,581,063967,648 0.9% 0.5% 1.3% 0.7% 1.0% 0.6%
Median Household Income $64,536$79,240 3.8% 3.4% 3.8% 2.6% 3.7% 3.7%
Labor Force 164,481,9061,340,403 0.9% 0.8% 1.1% 0.7% 0.7% 0.5%
Unemployment 3.5%3.6% -0.4% -0.3% -0.7% -0.7% - -
Source: Oxford Economics
POPULATION GROWTH
Source: Oxford Economics
LABOR FORCE GROWTH INCOME GROWTH
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SubmarketsPortland Office
PORTLAND SUBMARKETS
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SubmarketsPortland Office
SUBMARKET INVENTORY
12 Month Deliveries Under Construction
Bldgs SF (000) Percent Rank
Inventory
Bldgs SF (000) Percent RankBldgs SF (000) % Market RankSubmarketNo.
1 217 Corridor/Beaverton 4,234 3.9% 4 0 - - -234 0 0 0% -
2 Airport Way 1,193 1.1% 24 0 - - -69 0 0 0% -
3 Barbur Blvd/Capitol Hwy 1,596 1.5% 18 0 - - -184 0 0 0% -
4 Camas/Washougal 811 0.7% 31 0 - - -62 0 0 0% -
5 Cascade Park 3,118 2.9% 9 0 - - -129 0 0 0% -
6 CBD 28,207 26.0% 1 3 362 1.3% 3383 1 191 0.7% 1
7 CBD/West Vancouver 3,093 2.9% 10 1 53 1.7% 10260 1 42 1.4% 4
8 Clackamas/Milwaukie 3,430 3.2% 7 1 10 0.3% 12396 0 0 0% -
9 Clark County Outlying 153 0.1% 39 0 - - -34 0 0 0% -
10 Columbia County 339 0.3% 37 0 - - -66 0 0 0% -
11 East Columbia Corridor 1,083 1.0% 26 1 54 4.9% 9124 0 0 0% -
12 Gateway 2,924 2.7% 11 0 - - -346 0 0 0% -
13 Gresham 1,258 1.2% 23 0 - - -146 0 0 0% -
14 Guilds Lake 980 0.9% 29 1 69 7.0% 747 0 0 0% -
15 Hayden Island/Swan Island 1,968 1.8% 15 3 425 21.6% 299 0 0 0% -
16 Hazel Dell/Salmon Creek 980 0.9% 28 0 - - -92 1 0 0% 10
17 I-5 Corridor Outlying 58 0.1% 41 0 - - -7 0 0 0% -
18 Johns Landing 1,854 1.7% 16 0 - - -68 0 0 0% -
19 Kruse Way 2,886 2.7% 12 0 - - -76 0 0 0% -
20 Lake Oswego/West Linn 1,086 1.0% 25 2 54 5.0% 8141 0 0 0% -
21 Lloyd District 5,559 5.1% 3 1 120 2.2% 5227 2 110 2.0% 3
22 Mall 205 1,381 1.3% 19 0 - - -249 1 3 0.2% 6
23 NE Close-In 1,804 1.7% 17 0 - - -201 0 0 0% -
24 NE Outlying 5 0% 44 0 - - -1 0 0 0% -
25 North Beaverton 3,270 3.0% 8 0 - - -157 0 0 0% -
26 NW Close-In 2,851 2.6% 13 0 - - -168 0 0 0% -
27 NW Outlying 13 0% 43 0 - - -3 0 0 0% -
28 Orchards 756 0.7% 33 1 16 2.2% 1184 0 0 0% -
29 Oregon City 1,062 1.0% 27 0 - - -143 1 2 0.2% 7
30 Rivergate 119 0.1% 40 0 - - -23 0 0 0% -
31 SE Close-In 3,478 3.2% 6 2 69 2.0% 6213 2 129 3.7% 2
32 SE Outlying 552 0.5% 35 0 - - -105 0 0 0% -
33 Sherwood 214 0.2% 38 0 - - -31 0 0 0% -
34 Skamania County 24 0% 42 0 - - -4 0 0 0% -
35 St Johns/Cntrl Vancouver 2,014 1.9% 14 0 - - -202 0 0 0% -
36 Sunset Corridor/Hillsboro 13,961 12.9% 2 1 1,004 7.2% 1404 0 0 0% -
37 SW Close-In 664 0.6% 34 1 150 22.6% 464 0 0 0% -
38 Sylvan/Hillsdale 761 0.7% 32 0 - - -64 0 0 0% -
39 Tigard 3,479 3.2% 5 0 - - -236 0 0 0% -
40 Tualatin 1,295 1.2% 20 0 - - -62 0 0 0% -
41 Vancouver Mall 863 0.8% 30 0 - - -34 1 1 0.2% 8
42 Westside Outlying 533 0.5% 36 0 - - -94 1 1 0.2% 9
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SubmarketsPortland Office
SUBMARKET INVENTORY
12 Month Deliveries Under Construction
Bldgs SF (000) Percent Rank
Inventory
Bldgs SF (000) Percent RankBldgs SF (000) % Market RankSubmarketNo.
43 Wilsonville 1,288 1.2% 21 0 - - -60 0 0 0% -
44 Yamhill County 1,263 1.2% 22 0 - - -194 2 6 0.5% 5
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SubmarketsPortland Office
SUBMARKET RENT
Growth
Market Rent
Per SFSubmarketNo.
12 Month Market Rent QTD Annualized Market Rent
RankRank GrowthRank
1 217 Corridor/Beaverton 2.3%27 3.4% 14$23.02 43
2 Airport Way 4.4%7 3.9% 10$28.48 28
3 Barbur Blvd/Capitol Hwy 5.2%38 4.2% 8$20.87 11
4 Camas/Washougal 4.4%17 3.8% 11$25.58 30
5 Cascade Park 4.5%9 3.2% 16$27.95 20
6 CBD 2.8%1 1.8% 31$33.15 41
7 CBD/West Vancouver 4.4%26 2.8% 20$23.35 22
8 Clackamas/Milwaukie 5.1%22 1.4% 40$24.57 12
9 Clark County Outlying 4.4%42 2.1% 27$20.45 25
10 Columbia County 4.6%40 1.7% 36$20.69 18
11 East Columbia Corridor 4.6%31 1.8% 33$22.79 17
12 Gateway 4.3%28 2.1% 26$23.01 31
13 Gresham 6.0%33 2.2% 25$22.44 9
14 Guilds Lake 4.2%5 2.8% 18$29.56 34
15 Hayden Island/Swan Island 4.7%10 4.0% 9$27.43 16
16 Hazel Dell/Salmon Creek 4.3%30 0.4% 43$22.82 33
17 I-5 Corridor Outlying 12.3%19 7.0% 1$25.23 3
18 Johns Landing 1.0%6 3.8% 12$28.55 44
19 Kruse Way 14.1%2 6.0% 5$31.76 1
20 Lake Oswego/West Linn 7.5%11 5.2% 7$27.05 8
21 Lloyd District 4.4%4 2.8% 19$30.21 23
22 Mall 205 3.9%39 -0.3% 44$20.87 35
23 NE Close-In 4.4%15 2.1% 28$25.92 26
24 NE Outlying 3.3%43 1.7% 38$20.16 39
25 North Beaverton 3.6%16 3.1% 17$25.71 36
26 NW Close-In 4.8%3 2.3% 24$31.66 14
27 NW Outlying 3.5%8 1.5% 39$28.22 37
28 Orchards 5.1%41 2.4% 23$20.56 13
29 Oregon City 4.4%20 1.8% 34$25.02 29
30 Rivergate 4.3%34 1.7% 37$21.99 32
31 SE Close-In 5.3%14 1.8% 32$26.78 10
32 SE Outlying 4.5%29 0.6% 42$22.88 19
33 Sherwood 9.7%25 6.3% 3$23.56 5
34 Skamania County 3.3%44 1.2% 41$18.21 40
35 St Johns/Cntrl Vancouver 4.4%32 2.5% 21$22.47 27
36 Sunset Corridor/Hillsboro 4.7%18 3.4% 13$25.24 15
37 SW Close-In 3.5%23 3.3% 15$24.45 38
38 Sylvan/Hillsdale 2.4%36 1.9% 30$21.47 42
39 Tigard 8.8%21 5.9% 6$24.70 7
40 Tualatin 11.1%13 6.9% 2$26.82 4
41 Vancouver Mall 13.2%24 2.4% 22$24.40 2
42 Westside Outlying 4.4%35 2.0% 29$21.81 24
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SubmarketsPortland Office
SUBMARKET RENT
Growth
Market Rent
Per SFSubmarketNo.
12 Month Market Rent QTD Annualized Market Rent
RankRank GrowthRank
43 Wilsonville 9.6%12 6.1% 4$26.88 6
44 Yamhill County 4.4%37 1.8% 35$21.31 21
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SubmarketsPortland Office
SUBMARKET VACANCY & NET ABSORPTION
12 Month Net Absorption
Rank Construct. Ratio
Vacancy
SF % of InvSF PercentSubmarketNo. Rank
1 217 Corridor/Beaverton 513,554 12.1% -(2,117) -0.1% 2636
2 Airport Way 74,159 6.2% -8,993 0.8% 1026
3 Barbur Blvd/Capitol Hwy 63,717 4.0% -5,956 0.4% 1116
4 Camas/Washougal 42,648 5.3% -(769) -0.1% 2523
5 Cascade Park 157,052 5.0% -191,711 6.1% 122
6 CBD 3,594,804 12.7% -(131,094) -0.5% 4438
7 CBD/West Vancouver 148,882 4.8% 0.4108,438 3.5% 221
8 Clackamas/Milwaukie 100,058 2.9% -(28,419) -0.8% 3512
9 Clark County Outlying 1,925 1.3% -9,911 6.5% 94
10 Columbia County 844 0.2% -4,559 1.3% 141
11 East Columbia Corridor 28,963 2.7% -(13,977) -1.3% 3111
12 Gateway 45,505 1.6% -91,789 3.1% 47
13 Gresham 82,580 6.6% -2,696 0.2% 1629
14 Guilds Lake 337,077 34.4% -(12,335) -1.3% 3042
15 Hayden Island/Swan Island 19,366 1.0% -5,292 0.3% 122
16 Hazel Dell/Salmon Creek 65,774 6.7% -(23,192) -2.4% 3331
17 I-5 Corridor Outlying 10,000 17.3% -3,803 6.6% 1541
18 Johns Landing 154,582 8.3% -1,646 0.1% 1933
19 Kruse Way 388,203 13.4% -(33,038) -1.1% 3839
20 Lake Oswego/West Linn 72,330 6.7% -(19,043) -1.8% 3230
21 Lloyd District 259,283 4.7% 1.292,601 1.7% 319
22 Mall 205 64,511 4.7% -(36,881) -2.7% 4020
23 NE Close-In 34,128 1.9% -14,077 0.8% 78
24 NE Outlying - - -0 0% --
25 North Beaverton 101,584 3.1% -(23,840) -0.7% 3413
26 NW Close-In 240,626 8.4% -(40,160) -1.4% 4134
27 NW Outlying - - -0 0% --
28 Orchards 47,831 6.3% -(6,003) -0.8% 2828
29 Oregon City 14,349 1.4% 1.12,146 0.2% 175
30 Rivergate 1,218 1.0% -1,782 1.5% 183
31 SE Close-In 250,728 7.2% 1.491,030 2.6% 532
32 SE Outlying 12,921 2.3% -4,595 0.8% 139
33 Sherwood 13,400 6.2% -(684) -0.3% 2427
34 Skamania County 876 3.7% -1,300 5.5% 2015
35 St Johns/Cntrl Vancouver 28,419 1.4% -(2,551) -0.1% 276
36 Sunset Corridor/Hillsboro 590,924 4.2% -(30,065) -0.2% 3617
37 SW Close-In 29,713 4.5% -16,289 2.5% 618
38 Sylvan/Hillsdale 43,372 5.7% -429 0.1% 2124
39 Tigard 318,661 9.2% -(53,453) -1.5% 4235
40 Tualatin 182,522 14.1% -(31,058) -2.4% 3740
41 Vancouver Mall 107,818 12.5% -(33,844) -3.9% 3937
42 Westside Outlying 12,825 2.4% -12,072 2.3% 810
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SubmarketsPortland Office
SUBMARKET VACANCY & NET ABSORPTION
12 Month Net Absorption
Rank Construct. Ratio
Vacancy
SF % of InvSF PercentSubmarketNo. Rank
43 Wilsonville 78,547 6.1% -(69,143) -5.4% 4325
44 Yamhill County 39,980 3.2% -(10,696) -0.8% 2914
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Supply & Demand TrendsPortland Office
OVERALL SUPPLY & DEMAND
Net AbsorptionInventory
% of Inv Construction RatioSF SF Growth % Growth SFYear
2024 876,243 0.8% 0.7%829,049 1.1113,313,832
2023 1,010,688 0.9% 0.7%778,437 1.3112,437,589
2022 644,486 0.6% 0.7%762,314 0.8111,426,901
2021 213,075 0.2% 0.2%257,493 0.8110,782,415
2020 2,497,443 2.3% 1.4%1,581,052 1.6110,569,340
YTD 441,469 0.4% -0.2%(173,319) -108,513,366
2019 73,805 0.1% 0.2%219,564 0.3108,071,897
2018 1,664,187 1.6% 1.1%1,150,393 1.4107,998,092
2017 488,675 0.5% 0.8%868,685 0.6106,333,905
2016 1,737,664 1.7% 1.9%2,017,963 0.9105,845,230
2015 73,816 0.1% 0.3%300,691 0.2104,107,566
2014 801,482 0.8% 1.7%1,776,645 0.5104,033,750
2013 (93,033) -0.1% 0.8%788,866 -103,232,268
2012 529,972 0.5% 0.9%903,025 0.6103,325,301
2011 172,827 0.2% 0.9%930,661 0.2102,795,329
2010 782,276 0.8% 0.6%643,078 1.2102,622,502
2009 591,978 0.6% -1.0%(1,007,061) -101,840,226
2008 1,304,572 1.3% 0.6%587,928 2.2101,248,248
4 & 5 STAR SUPPLY & DEMAND
Net AbsorptionInventory
% of Inv Construction RatioSF SF Growth % Growth SFYear
2024 966,162 2.6% 2.4%894,697 1.137,551,644
2023 1,100,595 3.1% 2.5%903,000 1.236,585,482
2022 746,976 2.2% 1.9%666,464 1.135,484,887
2021 234,814 0.7% 1.5%513,341 0.534,737,911
2020 2,082,668 6.4% 5.1%1,773,434 1.234,503,097
YTD 441,469 1.4% 0.5%162,714 2.732,861,898
2019 30,000 0.1% -0.5%(170,138) -32,420,429
2018 1,592,149 5.2% 3.5%1,135,769 1.432,390,429
2017 425,736 1.4% 1.3%400,685 1.130,798,280
2016 1,619,929 5.6% 5.1%1,555,346 1.030,372,544
2015 137,656 0.5% 1.0%280,270 0.528,752,615
2014 1,025,701 3.7% 3.6%1,029,494 1.028,614,959
2013 0 0% 1.5%400,723 027,589,258
2012 297,417 1.1% 1.5%403,400 0.727,589,258
2011 176,300 0.7% 1.5%422,326 0.427,291,841
2010 636,464 2.4% 1.7%465,899 1.427,115,541
2009 367,020 1.4% -0.2%(57,966) -26,479,077
2008 723,803 2.9% 1.2%322,590 2.226,112,057
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Supply & Demand TrendsPortland Office
3 STAR SUPPLY & DEMAND
Net AbsorptionInventory
% of Inv Construction RatioSF SF Growth % Growth SFYear
2024 63,520 0.1% 0.2%92,159 0.745,585,043
2023 61,857 0.1% 0.1%56,343 1.145,521,523
2022 48,671 0.1% 0.4%196,704 0.245,459,666
2021 129,523 0.3% 0%11,865 10.945,410,995
2020 519,887 1.2% 0.3%155,859 3.345,281,472
YTD 0 0% -0.5%(240,238) -44,761,585
2019 47,961 0.1% 0.8%357,371 0.144,761,585
2018 126,128 0.3% -0.3%(120,768) -44,713,624
2017 172,361 0.4% 0.4%194,611 0.944,587,496
2016 281,793 0.6% 0.4%181,499 1.644,415,135
2015 29,257 0.1% 0.3%112,995 0.344,133,342
2014 12,661 0% 1.6%704,439 044,104,085
2013 68,249 0.2% 0.7%305,553 0.244,091,424
2012 228,420 0.5% 0.6%252,479 0.944,023,175
2011 41,329 0.1% 1.1%461,376 0.143,794,755
2010 249,581 0.6% 0.4%185,253 1.343,753,426
2009 252,391 0.6% -0.6%(240,744) -43,503,845
2008 568,307 1.3% 0.3%111,540 5.143,251,454
1 & 2 STAR SUPPLY & DEMAND
Net AbsorptionInventory
% of Inv Construction RatioSF SF Growth % Growth SFYear
2024 (153,439) -0.5% -0.5%(157,807) -30,177,145
2023 (151,764) -0.5% -0.6%(180,906) -30,330,584
2022 (151,161) -0.5% -0.3%(100,854) -30,482,348
2021 (151,262) -0.5% -0.9%(267,713) -30,633,509
2020 (105,112) -0.3% -1.1%(348,241) -30,784,771
YTD 0 0% -0.3%(95,795) -30,889,883
2019 (4,156) 0% 0.1%32,331 -30,889,883
2018 (54,090) -0.2% 0.4%135,392 -30,894,039
2017 (109,422) -0.4% 0.9%273,389 -30,948,129
2016 (164,058) -0.5% 0.9%281,118 -31,057,551
2015 (93,097) -0.3% -0.3%(92,574) -31,221,609
2014 (236,880) -0.8% 0.1%42,712 -31,314,706
2013 (161,282) -0.5% 0.3%82,590 -31,551,586
2012 4,135 0% 0.8%247,146 031,712,868
2011 (44,802) -0.1% 0.1%46,959 -31,708,733
2010 (103,769) -0.3% 0%(8,074) -31,753,535
2009 (27,433) -0.1% -2.2%(708,351) -31,857,304
2008 12,462 0% 0.5%153,798 0.131,884,737
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Rent & VacancyPortland Office
OVERALL RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2024 139 0.8% 8.1%$29.53 8,781,370 7.7% 0%
2023 138 1.0% 7.2%$29.30 8,729,657 7.8% 0.1%
2022 136 1.3% 6.2%$29.02 8,494,504 7.6% -0.1%
2021 135 1.8% 4.8%$28.64 8,606,395 7.8% -0.1%
2020 132 3.0% 3.0%$28.15 8,646,946 7.8% 0.6%
YTD 130 1.0% 1.0%$27.60 8,420,013 7.8% 0.5%
2019 128 3.1% 0%$27.32 7,805,225 7.2% -0.1%
2018 125 3.6% -3.0%$26.50 7,944,552 7.4% 0.4%
2017 120 4.4% -6.4%$25.57 7,423,013 7.0% -0.4%
2016 115 6.6% -10.3%$24.49 7,828,647 7.4% -0.4%
2015 108 5.7% -15.9%$22.98 8,115,546 7.8% -0.2%
2014 102 5.8% -20.4%$21.75 8,342,421 8.0% -1.0%
2013 97 2.7% -24.8%$20.55 9,317,584 9.0% -0.8%
2012 94 1.8% -26.8%$20.00 10,199,483 9.9% -0.4%
2011 92 -0.2% -28.1%$19.64 10,553,253 10.3% -0.8%
2010 93 -2.9% -28.0%$19.68 11,311,087 11.0% 0.1%
2009 95 -4.7% -25.8%$20.27 11,170,369 11.0% 1.5%
2008 100 0.3% -22.2%$21.26 9,571,330 9.5% 0.6%
4 & 5 STAR RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2024 147 0.8% 10.3%$36.84 3,176,346 8.5% 0%
2023 145 1.0% 9.5%$36.56 3,105,286 8.5% 0.3%
2022 144 1.5% 8.4%$36.19 2,908,988 8.2% 0.1%
2021 142 2.4% 6.8%$35.65 2,828,070 8.1% -0.9%
2020 139 4.2% 4.2%$34.82 3,106,876 9.0% 0.1%
YTD 134 1.0% 1.0%$33.73 3,151,324 9.6% 0.7%
2019 133 6.3% 0%$33.40 2,872,569 8.9% 0.6%
2018 125 3.0% -5.9%$31.42 2,672,431 8.3% 1.0%
2017 121 6.5% -8.7%$30.50 2,233,828 7.3% 0%
2016 114 6.2% -14.3%$28.63 2,208,777 7.3% -0.2%
2015 107 3.5% -19.3%$26.96 2,144,194 7.5% -0.5%
2014 104 7.6% -22.0%$26.06 2,286,808 8.0% -0.3%
2013 96 1.1% -27.5%$24.21 2,290,601 8.3% -1.5%
2012 95 2.3% -28.3%$23.95 2,691,324 9.8% -0.4%
2011 93 -1.1% -29.9%$23.42 2,776,857 10.2% -1.0%
2010 94 -1.8% -29.1%$23.67 3,022,883 11.1% 0.4%
2009 96 -4.1% -27.9%$24.09 2,852,318 10.8% 1.5%
2008 100 0.7% -24.8%$25.13 2,427,332 9.3% 1.3%
3/23/2020Copyrighted report licensed to Capacity Commercial Group - 500835.
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Rent & VacancyPortland Office
3 STAR RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2024 134 0.7% 6.5%$28.07 3,900,629 8.6% -0.1%
2023 133 0.9% 5.7%$27.86 3,929,818 8.6% 0%
2022 132 1.1% 4.8%$27.62 3,925,594 8.6% -0.3%
2021 131 1.3% 3.6%$27.32 4,073,576 9.0% 0.2%
2020 129 2.3% 2.3%$26.97 3,957,360 8.7% 0.7%
YTD 128 1.1% 1.1%$26.66 3,836,451 8.6% 0.5%
2019 126 1.1% 0%$26.36 3,596,213 8.0% -0.7%
2018 125 3.9% -1.1%$26.07 3,899,191 8.7% 0.6%
2017 120 3.3% -4.8%$25.08 3,626,671 8.1% -0.1%
2016 116 7.0% -7.9%$24.29 3,674,545 8.3% 0.2%
2015 109 6.8% -13.9%$22.69 3,580,851 8.1% -0.2%
2014 102 4.9% -19.4%$21.24 3,664,589 8.3% -1.6%
2013 97 4.3% -23.2%$20.25 4,356,367 9.9% -0.6%
2012 93 1.9% -26.3%$19.42 4,593,671 10.4% -0.1%
2011 91 0.8% -27.7%$19.06 4,618,897 10.5% -1.0%
2010 91 -3.7% -28.3%$18.91 5,038,944 11.5% 0.1%
2009 94 -6.0% -25.5%$19.63 4,974,616 11.4% 1.1%
2008 100 0.5% -20.8%$20.89 4,481,481 10.4% 0.9%
1 & 2 STAR RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2024 134 0.9% 7.0%$23.44 1,704,395 5.6% 0.1%
2023 133 1.0% 6.1%$23.23 1,694,553 5.6% 0.1%
2022 132 1.3% 5.0%$22.99 1,659,922 5.4% -0.1%
2021 130 1.5% 3.7%$22.71 1,704,749 5.6% 0.4%
2020 128 2.2% 2.2%$22.38 1,582,710 5.1% 0.8%
YTD 127 0.9% 0.9%$22.09 1,432,238 4.6% 0.3%
2019 125 1.4% 0%$21.90 1,336,443 4.3% -0.1%
2018 124 4.1% -1.4%$21.60 1,372,930 4.4% -0.6%
2017 119 2.9% -5.3%$20.74 1,562,514 5.0% -1.2%
2016 115 6.4% -8.0%$20.15 1,945,325 6.3% -1.4%
2015 108 7.2% -13.5%$18.94 2,390,501 7.7% 0%
2014 101 4.7% -19.3%$17.67 2,391,024 7.6% -0.8%
2013 97 2.7% -22.9%$16.88 2,670,616 8.5% -0.7%
2012 94 1.1% -25.0%$16.43 2,914,488 9.2% -0.8%
2011 93 -0.4% -25.8%$16.25 3,157,499 10.0% -0.3%
2010 93 -3.4% -25.5%$16.31 3,249,260 10.2% -0.3%
2009 97 -3.2% -22.8%$16.90 3,343,435 10.5% 2.1%
2008 100 -0.5% -20.3%$17.46 2,662,517 8.4% -0.4%
3/23/2020Copyrighted report licensed to Capacity Commercial Group - 500835.
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Sale TrendsPortland Office
OVERALL SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2024 -- - -- 218- $341.15 6.2%
2023 -- - -- 215- $337.10 6.2%
2022 -- - -- 212- $332.08 6.2%
2021 -- - -- 209- $327.60 6.1%
2020 -- - -- 202- $316.07 6.0%
YTD $213.1 M67 1.2% $210.27$4,842,956 1936.0% $302.90 6.1%
2019 $1,661 M365 5.3% $324.18$7,400,912 1936.1% $301.71 6.1%
2018 $1,363 M372 5.5% $258.55$5,667,979 1796.7% $280.27 6.2%
2017 $1,541 M338 6.1% $262.01$6,575,061 1736.2% $271.47 6.1%
2016 $1,267 M397 6.1% $215.82$4,325,999 1646.3% $256.77 6.2%
2015 $1,299 M323 5.9% $231.51$5,189,608 1536.6% $239.27 6.3%
2014 $800.6 M294 5.5% $150.06$3,625,271 1397.2% $217.47 6.5%
2013 $586.3 M240 3.8% $152.49$2,928,892 1277.2% $199.32 6.8%
2012 $355.7 M187 2.9% $143.13$2,562,029 1208.2% $187.60 7.1%
2011 $311.9 M170 2.5% $176.90$2,614,500 1147.9% $178.12 7.3%
2010 $290.9 M112 1.9% $159.10$3,110,416 1027.2% $159.59 7.9%
2009 $223.6 M116 2.0% $134.58$2,078,184 888.0% $138.03 8.8%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
4 & 5 STAR SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2024 -- - -- 224- $448.45 5.9%
2023 -- - -- 221- $443.59 5.8%
2022 -- - -- 218- $437.00 5.8%
2021 -- - -- 215- $429.99 5.7%
2020 -- - -- 206- $412.00 5.6%
YTD $56.3 M4 0.8% $205.18$14,069,518 1955.2% $389.80 5.7%
2019 $488.4 M10 4.0% $402.04$54,264,829 1957.2% $390.93 5.7%
2018 $414.3 M8 3.7% $344.63$59,182,992 1816.1% $361.59 5.8%
2017 $810.6 M14 8.3% $318.17$57,898,240 1775.6% $355.47 5.7%
2016 $433.8 M11 5.5% $301.93$72,098,332 1674.9% $334.53 5.8%
2015 $874.8 M15 10.8% $295.69$71,822,250 1555.6% $310.91 5.9%
2014 $165.4 M10 2.8% $212.71$23,505,986 1407.2% $280.42 6.2%
2013 $235.9 M7 4.0% $214.53$33,701,885 1286.9% $256.61 6.4%
2012 $143.3 M8 3.5% $202.50$28,656,971 1218.8% $242.36 6.6%
2011 $170.1 M4 3.4% $355.08$85,067,112 1157.6% $231.06 6.9%
2010 $164.0 M5 3.1% $198.03$32,801,630 1039.0% $206.72 7.4%
2009 $15.4 M5 2.4% $57.93$3,844,191 89- $177.63 8.3%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
3/23/2020Copyrighted report licensed to Capacity Commercial Group - 500835.
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Sale TrendsPortland Office
3 STAR SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2024 -- - -- 217- $306.98 6.3%
2023 -- - -- 214- $303.34 6.3%
2022 -- - -- 211- $299.03 6.3%
2021 -- - -- 209- $295.74 6.1%
2020 -- - -- 203- $286.94 6.1%
YTD $107.8 M18 1.5% $200.31$8,290,052 1966.0% $277.97 6.2%
2019 $904.4 M82 6.2% $338.84$14,804,295 1956.3% $275.84 6.2%
2018 $622.1 M80 5.9% $258.56$9,383,876 1806.8% $254.26 6.3%
2017 $530.3 M74 5.2% $237.25$8,381,960 1726.3% $244.05 6.3%
2016 $512.2 M91 6.1% $193.99$6,493,138 1636.4% $230.97 6.3%
2015 $195.6 M66 3.2% $161.55$3,702,759 1536.4% $216.08 6.5%
2014 $454.3 M79 7.6% $142.21$7,181,038 1397.3% $197.17 6.7%
2013 $199.4 M50 3.5% $131.62$4,744,691 1287.0% $180.84 6.9%
2012 $130.5 M44 2.4% $133.87$4,194,396 1208.2% $169.96 7.2%
2011 $80.8 M64 2.0% $114.77$2,435,875 1137.9% $160.14 7.5%
2010 $60.6 M20 1.1% $137.06$4,216,155 1017.8% $143.68 8.1%
2009 $152.8 M33 2.1% $169.04$4,968,109 888.0% $124.57 9.0%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
1 & 2 STAR SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2024 -- - -- 209- $270.61 6.6%
2023 -- - -- 206- $266.88 6.5%
2022 -- - -- 202- $262.58 6.5%
2021 -- - -- 200- $259.22 6.4%
2020 -- - -- 193- $250.93 6.3%
YTD $49.0 M45 1.1% $243.85$1,816,344 1866.1% $241.78 6.4%
2019 $268.2 M273 5.2% $216.34$1,729,603 1845.8% $239.36 6.4%
2018 $326.9 M284 6.8% $196.38$1,956,276 1756.6% $227.01 6.4%
2017 $200.5 M250 5.3% $182.27$1,273,410 1676.3% $217.22 6.4%
2016 $320.6 M295 6.7% $178.93$1,544,981 1606.2% $207.17 6.5%
2015 $228.3 M242 5.4% $158.48$1,234,622 1496.8% $192.74 6.6%
2014 $180.9 M205 4.9% $132.73$1,204,082 1367.1% $176.46 6.8%
2013 $151.0 M183 4.2% $122.74$997,273 1257.4% $162.01 7.1%
2012 $81.9 M135 3.1% $102.03$802,757 1178.2% $151.89 7.3%
2011 $61.0 M102 2.3% $105.10$719,391 1128.1% $144.95 7.6%
2010 $66.2 M87 1.9% $118.76$895,059 1006.4% $129.94 8.2%
2009 $55.4 M78 1.6% $112.63$757,596 878.0% $113.24 9.1%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
3/23/2020Copyrighted report licensed to Capacity Commercial Group - 500835.
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