Portland Office Figures Report Q1 2024

While rising vacancy continued to affect supply and demand trends in the Portland office market, the market also started to show some green shoots. In the first quarter of 2024, two significant lease transactions are aiding this recovery; Jaguar-Land Rover's 52,309 square foot lease at RedFox Commons and Tesla's 43,216 square foot lease at the Bancroft Building. Despite these positive strides, Portland saw a decrease in overall occupancy in the Q1 with negative 400,926 sq. ft. of absorption.

A notable move in Q1 was Kiewit Engineering's expansion into an additional 17,000 square feet at 5 Lincoln Center in Tigard. Despite a decrease in office demand, the situation is gradually improving. In 2023, there was a 13% decrease in returned space compared to 2022, and a 55% decrease compared to 2021.

While high construction costs and significant tenant leverage have driven landlords to offer meaningful concessions packages to new tenants, leasing professionals noted a rising level of competition between local construction subcontractors in Q1. Landlords are hoping that easing construction costs will make tenant improvement costs less burdensome when looking to sign a new tenant to their building.