Portland Industrial Market Report

Deliveries target highways in the metro’s southwest. About 40 percent of 2025’s construction pipeline will come to the Interstate 5 corridor, while 27 percent is slated for areas around Hillsboro and Route 26. The I-5 corridor’s vacancy rate rose to 6.8 percent in March, increasing 430 basis points year over year amid net relinquishments. The Hillsboro submarket fared better; vacancy rose 160 basis points to 3.6 percent, which is still among the lowest in the metro. Net absorption there will be aided later this year from the move-in by the Oregon Electric Group into a 100,000-square-foot space on a seven-year term. The first quarter’s strongest net absorption, meanwhile, occurred in Clark County and the Portland submarkets north and east of the CBD, which helped push the marketwide total to almost 1 million square feet. Further move-ins by DB Schenker and Omni Logistics in the fall will help support recovering industrial space demand.