Portland Office Market
Net absorption in the fourth quarter of 2023 amounted to negative 275,145 SF. The CBD remained the hardest-hit submarket in both the fourth quarter of 2023 and in the year overall. The total net absorption for the year reached negative 1,207,516 SF market-wide. Portland’s development pipeline has been exhausted with the delivery of Block 216 in the CBD. No upcoming projects are being tracked to commence in the coming months, and difficult economic conditions look to continue delaying construction starts moving into 2024. Vacancy across the Portland market rose to 20.4%, representing a 50-basis-point increase over the third quarter of 2023. Average asking rents rose slightly due to aggressive pricing strategies among Class A assets in select submarkets.
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Year-to-date net absorption amounted to 779,657 SF in 2023, signifying an 86.2% decrease compared to the previous year. The current quarter’s total of 64,495 SF represents a modest uptick from third-quarter figures but constitutes only a fraction of the year’s absorption, particularly when compared with the heavy activity observed in the first half of 2023. Vacancy remained consistent from the previous quarter at 3.0%. The continued increase in available sublease space being brought to the market has helped to alleviate pressure in markets such as the I-5 South Corridor where vacancy rates are historically low. Activity has eased considerably as compared to the levels seen in 2021 and 2022. Despite decreased demand across industrial asset types, vacancy has yet to witness a notable increase.
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