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Market Report

Portland Office Market Report

2024 Investment Forecast

Mounting Class B/C Demand Helps Backfill Older
Space Amid an Overall Flight-to-Quality

Class B/C options may benefit from economic growth. Supported by Portland’s strongest two-year household gain in a decade, the Class B/C office sector is poised to turn recent demand trends around. The metro will add almost 30,000 households across 2023 and 2024, elevating local needs for services like transportation, and specialty healthcare. Easterseals Community and Disability Services and Multnomah County’s move-ins to mid-tier spaces at the start of this year reflect this trend. Law firms Miller Nash and Wyse Kadish also took up new leases, however, each at Class A offices in the CBD. While some tenants looking in the Class B/C segment are expanding their overall footprints, companies seeking top-tier options are generally prioritizing quality, leading many of them to downsize to make up for higher per-square-foot rents. Miller Nash, for example, cut its space requirements by 40 percent when it moved into the newly-completed 11W building this year. A limited, less-available pipeline may also be a consideration for some tenants to speed up upgrades. This may continue to push marketwide vacancy up as more legacy Class A space is left untenanted in lieu of newer builds.
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