Portland Industrial Figures Q4 2023

January 11, 2024 5 Minute Read

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At the conclusion of 2023, Portland’s industrial market-wide vacancy rate stands at 3.3%, a figure below the 10-year average of 3.6%, albeit registering a 100 basis-point (bps) year-over-year (YoY) increase. Industry professionals with a national scope note that Portland still boasts one of the tightest markets in the country with vacant space representing less than 4% of the total market inventory. Portland's industrial sector experienced positive net absorption of 188,493 square feet (sq. ft.) in Q4 2023, bringing the year-to-date (YTD) figure to approximately negative 961,000 sq. ft. This negative figure is noteworthy but represents less than one percent of the market’s total product. Two prominent lease transactions in the fourth quarter include JH Kelly’s 259,148 sq. ft. sublease at Sunlight Supply, which they’ve already occupied, and Interstate Batteries’ 161,151 sq. ft. lease at Camas Meadows Business Park, which is currently under construction in Clark County and anticipated to be operational in Q2 2024. The industrial development landscape concluded Q4 2023 with a healthy pipeline of 2.8 million sq. ft., of which 81% is speculative construction. Developers with proposed projects who did not initiate a start in 2023 are likely waiting for the economic outlook to become more defined in 2024. Noteworthy trends in asking rental rates for new leases reveal a slight quarter-over-quarter increase. In the fourth quarter of 2023 Class A buildings experienced metro-wide asking rates between $0.80-0.95/sq. ft. on a triple net (NNN) basis for spaces exceeding 50,000 sq. ft.