A quick update on the Portland Office Space Market from our Local Portland Rep.
The overall Portland market once again showed strong fundamentals in the 3rd quarter 2016. Positive office space absorption drove vacancy lower, rising quoted rental rates supported development feasibility in key submarkets, and businesses continued hiring.
The Portland Office Space Market
Although the average Portland office space market-wide annual asking rental rates moderated slightly to $24.01 Fully Serviced Gross (FSG), this is still a year-over-year increase; a trend among landlords to continue to push rents higher.
Class A Central Business District quoted annual rental rates averaged $32.74 (FSG ) and Class A Westside rates averaged a quoted $24.84 FSG. They were both up from the prior quarter and prior year. Unfortunately for tenants, landlords are continuing to offering relatively few concessions.
Out of state and institutional investors remain interested in Portland. Cap rates in the Portland Central Business district are around 5% and suburban office market cap rates are trending around 6.75%. There were $73 million in investment sale transactions recorded during the 3rd quarter.
The Portland office space development pipeline remains very active relative to the past 10 years. Construction starts in the 3rd quarter included Leland James Center, SW 12 & Morrison, Fair-Haired Dumbbell, and Field Office. All together totaling over 523,500 Square Feet.
If you need office space in Portland or the surrounding areas, we can help. Contact us to let us know what your needs are and we will get right to work meeting those needs, all at no cost to you. Our services and the services of our local representatives are free to you. No cost and no obligation to give us a try.