Downtown Portland office leasing surpasses
suburbs,
a first in nearly two years
By Jonathan Bach – Staff Reporter, Portland Business Journal Jul 11, 2024 Updated Jul 11, 2024 3:46pm PDT
Downtown Portland office leasing surpassed the suburbs for the first time since the end of 2022, according to real estate brokerage CBRE, as employers signed large leases in the core.
Still, downtown vacancy remained stubbornly high at 31.5% in the second quarter, compared to 16.1% in the suburbs, CBRE reported. The Portland metro's overall vacancy rate stood at 24.1%.
Lawyers and shoe companies have been doubling down on the city, a trend that drove the relatively strong quarter downtown. Footwear company Hoka went from one floor to three inside Goose Hollow's Canvas building for a total of 59,100 square feet. Legal firm Tonkon Torp leased 61,243 square feet at the Wells Fargo Center.
"The legal sector and the sportswear industry have been central to Portland's growth, even with rising vacancy rates," said CBRE analyst Samuel Hatcher. "More tenants are expected to announce long-term commitments to lease space in top downtown buildings during the second half of the year."
Downtown had about 363,300 square feet of leases signed last quarter, while the suburban figure was 172,300 square feet.
"By deal count, however, the suburbs saw nearly twice the number of leases over 5,000 square feet compared to downtown," CBRE reported.
Another brokerage, Colliers, confirmed in its quarterly research note on Portland that "for the first time in six quarters, leasing activity downtown outpaced the leasing activity in the suburban submarkets."
Colliers also put the downtown vacancy rate at 31% and, in the more geographically constrained central business district, "the vacancy rate has passed the 33% threshold for the first time."
The real estate scene downtown has been characterized by many empty offices and building foreclosures. A recent foreclosure was the nearly 300,000-square-foot Park Square office complex at 100 S.W. Market St. near the waterfront.