Portland Industrial Market Report

Meager pipeline backstops vacancy. In contrast to the housing crisis dominating discourse in Portland, 2023’s local rate of household formation — at 1.6 percent — is projected to be the strongest among any major, non-Sun Belt market. This residential growth will aid demand for warehouse and distribution spaces during a period where economic headwinds are expected to temper the frequency of new leases. As such, Amazon plans to move into a combined 600,000 square feet of warehouse space in Canby and Vancouver this year. Meanwhile, a number of logistics providers are committing to last-mile facilities along major thoroughfares, such as the I-5 Corridor. At the same time, Portland’s significant land constraints and high construction labor costs have translated to a decade-low industrial pipeline. A meager 0.5 percent expansion in local stock during 2023 will rank as the lowest among any major U.S. metro, helping facilitate a third consecutive year of vacancy compression, even amid a moderation in overall tenant demand.