Portland Retail Market Report

Downtown nears turning point as suburban strength holds. Expanding western and northern suburbs are expected to sustain tight retail fundamentals in 2025, even as tenant turnover lingers in less affluent parts of the metro. Retail vacancy in Washington and Clark counties declined by nearly 100 basis points last year, approaching record lows of around 3 percent. Within these counties, Hillsboro and Beaverton should continue drawing residents, bolstered by major employment hubs anchored by Intel and Nike. Meanwhile, Vancouver is likely to remain a magnet for remote workers due to the absence of a state income tax, reinforcing tenant demand. Despite ongoing store closures in the urban core, such as Forever 21’s planned departure from the Lloyd Center, foot traffic is set to improve. Last year’s rise in hotel occupancy, along with the first increase in office occupancy since before the pandemic, should help attract retailers. Additionally, the mayor’s plan to create 1,500 new beds at homeless shelters by year-end could enhance public health and safety, further strengthening local retail activity.