Portland Metro Q3 2025
Portland Office Market Woes Continue
Amid Growing Vacancy, Negative Absorption, Flight of Tenants
LOCAL TIDBITS
Vacancy Hits New High, Surpasses Previous Quarter
Portland’s market-wide vacancy rate rose for the fifth consecutive quarter, setting a new record high of 26.6%. The Central Business District saw the highest vacancy levels in the entire metro area at 36.3%.
Negative net absorption continued its trend, with an additional 306,000 SF of office space becoming vacant in Q3. For 2025, the Portland market has shed over 800,000 SF of previously occupied space, continuing the years-long trend of tenants relocating outside the central city.
Opportunity Remains in Tenant-Friendly Market
Inventory
± 29.9M SF
Average Class A
Asking Rate
$39.10/SF
Full Service
Portland’s construction pipeline for new office product remains stagnant. With no signs of healthy market improvement for the remainder of 2025, Landlords are expected to continue offering aggressive concessions to attract and retain tenants.
Apex notes some groups negotiating leases more than two years in advance of lease expiration, highlighting an unprecedented era of opportunity for tenants who desire to remain committed to the city.
Total Vacancy 36.3%
Net Absorption (YTD)
-306K SF
Leasing Volume
± 655K SF Under Construction
± 0 SF
Q3 2025 SUMMARY
Leasing activity in Portland’s office market declined in Q3 2025, with total volume and average deal size both decreasing, while Class B buildings continued to lead leasing despite a notable drop from the previous quarter. The average asking rent across all asset classes edged up to $32.35/SF on a Full Service basis, but top-tier CBD Class A rents fell as landlords offered aggressive concessions and discounts to attract tenants, reflecting a pronounced “flight to quality.” New supply was minimal, with no projects under construction heading into Q4, and office sales activity remained muted, reaching just 36% of the ten-year average. As landlords compete fiercely for occupancy and reposition trophy assets, the market is expected to remain tenant-favorable through year-end, with further Federal Reserve rate cuts likely to stimulate sales volume and broaden buyer pools for high-value assets in early 2026.
PORTLAND METRO AREA OFFICE STATS Q3 2025
Data is based on Costar statistics for Q3 2025 for Class A, B & C existing, under construction, and under major renovation office space and is exclusive of coworking.
MORE HIGHLIGHTS
Sales Activity Sluggish as Investors Remain Cautious
Portland’s office sales remained subdued in Q3 2025, with transaction volume at just 36% of the tenyear average transaction volume. Notable deals included the high profile sale of US Bancorp Tower for $45,000,000 to local investor Jeff Swickard, but overall investor caution and financing challenges limited deal flow regionally. Recent and anticipated Federal Reserve rate cuts may broaden buyer pools and stimulate sales, especially for trophy assets in the CBD, heading into 2026.
Leasing Activity Rebounds in Size
Sublease availability in Portland’s office market remains elevated, but sublease space is transitioning to direct vacancy, particularly in the CBD where sublease availability fell 30 basis points quarter-over-quarter; tenants seeking flexible or discounted space still have ample choices, and subleasing continues to offer strategic opportunities for cost savings and short-term commitments in a tenant-favorable environment.
Q3 2025 NOTABLE MARKET TRANSACTIONS
SALES LEASES
US Bancorp Tower
Central Business District
± 1,154,175 SF
$45,000,000 ($39/SF)
Capitol Park
Barbur Blvd/Capitol Hwy
± 28,520 SF
$5,707,500 ($200/SF)
8307 SE Monterey Ave
Happy Valley / Clackamas
± 8,783 SF
$3,375,000 ($384/SF)
APEX REAL ESTATE PARTNERS
Elevating the Standard of Commercial Real Estate
Apex Transaction!
New Seasons Market
APEXREAL PARTNERSESTATE
Close-in Eastside
Skylight
± 32,000 SF
Apex Transaction!
Ferguson Wellman
REAL PARTNERSESTATE
Central Business District
Fox Tower
± 23,485 SF
Bridgette Middle School
Slabtown
The Canopy
± 30,380 SF
Apex Real Estate Partners was established in 2004 and is the largest Portland-based, minority-owned, full-service real estate brokerage firm with brokers licensed in Oregon and Washington. We are not your traditional commercial real estate brokerage firm, we go far beyond a typical relationship – we serve as your real estate partner with our analytic-driven approach. It is our belief that the partnership makes the difference.
We are a locally founded and owned company whose reputation has been built on the integrity of its people, and our services, at Apex we pride ourselves on our unparalleled commitment to our clients and the local economy. Our comprehensive market knowledge delivers reliable guidance, helping you make informed real estate decisions with a positive impact on your bottom line.
At Apex, you get all the capabilities and expertise of a large national firm, reinforced with the support and attention that only a local firm can offer. In the Portland market, we are a leader in sustainable business practices in leasing, development, and redevelopment projects and have been involved in buying and selling some of the most distinguished properties for our clients in the Greater Portland Metro Area.