Portland Office Figures Report Q2 2023

MARKET SUMMARY

Portland’s historically vibrant office market is making strides to regain its footing, as new class A office buildings deliver downtown and available sublease space across the market has decreased quarter-over-quarter (QOQ) for the first time since 2021. The overall vacancy rate across the metro area did increase slightly to 22.2% in Q2 2023. This can partially be attributed to the completion of The Offices at 11W downtown, which did however deliver with a couple of leases completed, including Miller Nash LLP taking the 6th and 7th floors of the new, prime office asset. The delivery date for Block 216 (158,464 sq. ft.) has been revised to September 1st , and construction is progressing at Terminal 1 on the Vancouver Waterfront, where ZoomInfo has the 366,000 square foot (sq. ft.) office building pre-leased with plans to occupy in 2025.

- Sublease availability accounted for 19.7% of overall availability in the market, increasing by over 1M sq. ft. year-over-year (YOY). However, over the recent quarter sublease availability decreased by 2.3% from the all-time high recorded in the first quarter.

- In Q2 2023, the average direct asking lease rate across the metro area was $32.23 per sq. ft. full-service gross (FSG), remaining relatively flat QOQ. Measured from the same period in 2020, overall direct asking rates have increased 4.0%.

- The trend of implementing distributed work models continues to provide firms with an opportunity to reimagine their space needs. In some cases, companies have elected to right-size their workspace. However, there are examples in the market of real estate footprint expansions.