Q4 2025 Portland Industrial Figures Report

The Portland area industrial market closed 2025 with strong leasing, but some signs of ongoing softening. Year-end overall gross leasing activity reached 8.6 million square feet (sq. ft.), up 10.7% compared to the same period 2024, with the fourth quarter being the strongest. Renewals accounted for nearly a quarter of leasing, while some tenants pursued flight-to-quality relocations. Rising vacancy, now at 7.2%, and increased sublease availability present challenges. However, year-to-date (YTD) net absorption closed 2025 on a positive note at 318,416 sq. ft., reversing two consecutive years of negative net absorption.

Construction costs are stabilizing, supporting a pipeline that delivered nearly 3.0 million sq. ft. and left roughly 3.5 million sq. ft. under construction, with limited pre-leasing in build-to-suit (BTS) projects. Annual investment volume declined to $630 million in 2025, yet pricing held near $170 per sq. ft., and fourth-quarter sales accelerated. Federal tax incentives under the One Big Beautiful Bill Act may boost investor confidence, improve cash flow, and support continued industrial and commercial development, setting the market up for a better 2026.