Portland Office Investment Forecast
Headwinds Remain in Downtown Portland;
Investor and Tenant Demand Accelerate Outside Urban Core
Suburbs provide an optimistic outlook. The recovery timeline in Portland remains in limbo as uncertainty stemming from the pandemic still looms over the metro's office sector. Many firms are deciding to reduce their office footprints or relocate to suburban submarkets, which severely impacts office fundamentals in the urban core. Since the onset of the health crisis, over 2.1 million square feet has been returned to the market, lifting the vacancy rate in Downtown Portland above 20 percent entering this year. Although office demand remains muted in the urban core, there has been significant momentum in the metro's suburbs. One of the largest leases in the metro's history was signed last September by ZoomInfo, committing to 366,000 square feet of space in Clark County. Additionally, Apple and Q5id each signed deals totaling at least 44,000 square feet in the Westside submarket. This uptick in leasing indicates that employers are betting on the long-term value of a physical office presence, which may influence a slow and steady increase in demand for space over the next few years.