Overview

– In contrast to the conventional office market in Portland, which has witnessed growth in companies adopting distributed work models, medical office practices are unable to adopt a hybrid work schedule.

– Consequently, the overall vacancy rate in the Portland medical office market stands at 4.9%, which is approximately 30 basis points (bps) below the 10-year average. As of the first half of 2023, the Portland medical office market continues to experience robust demand, with healthcare tenants showing strong commitment to long-term leases.

– Relocating a medical practice poses significant challenges due to various factors. Particularly noteworthy are the prevailing disruptions in the supply chain, escalating construction costs, and prolonged timeframes for obtaining permits.

– Medical office tenants are faced with the decision of either renewing their current lease or relocating, although the latter option is often less preferred. Medical practices tend to be closely tied to a specific location and are hesitant to move more than two miles away due to the potential risk of losing their patient base.

– Sales momentum has slowed in the first half of 2023, totaling $16 million in sales volume, down from the $91 million in sales volume recorded in the first half of 2022.