Home Archives August 2009 Troubled commercial markets bring lower rents

Troubled commercial markets bring lower rents

| Print |  Email
Thursday, July 23, 2009

If you’re considering negotiating your lease for a more affordable rent, the time is now.

Two recent reports from Portland commercial real estate specialists Norris Beggs & Simpson and Marcus & Millichap offer a window into a market in serious decline, with vacancy rates rising, construction slowing and rents falling. Even the until-recently soaring market for rental housing has turned sour as job losses spread and the conversion of failed condo projects to apartments creates a bulging oversupply problem.

An excess of inventory is already devastating metro Portland’s industrial market. The vacancy rate for industrial properties has soared to 13.87% and rents are projected to drop 5% by the end of 2009. Building has all but halted, with 633,000 square feet expected to be completed this year compared to 2.7 million last year.

The office market may be even worse off. Rents are projected to drop by 6.4% by the end of 2009, the suburban vacancy rate has soared to 19%, Tom Moyer’s Park Avenue West tower is on hold due to lack of financing and new mortgage originations for office properties are down 66% year over year. With 3 million square feet in the planning pipeline, expect more projects to be delayed or abandoned.

Rents have held up slightly better in the retail market, but they are still expected to fall by 3.8% this year. The recent liquidation of Joe’s sporting goods stores and other key tenants leaves gaping holes that will be difficult to fill with anything remotely upscale. Two of the largest lease deals closed in recent months have been with the Salvation Army and the Dollar Store.

But there are bright spots, particularly for those rare cash-rich investors who have not gone the way of the passenger pigeon and the dodo bird. Among the areas of opportunity are the coming extension of MAX light rail from downtown Portland to Clackamas Town Center, the expansion of the Portland Streetcar to the Central East Side, SolarWorld’s growing presence in Hillsboro and a new FedEx facility due to be completed in Troutdale by July 2010, creating hundreds of increasingly precious new jobs. 

BEN JACKLET
 

More Articles

How to handle the unexpected

Contributed Blogs
Friday, March 28, 2014
03.28.14 thumb disasterBY TOM COX | OB BLOGGER

The next mysterious (or disastrous) event could be one that you or your team might suddenly need to respond to, probably under intense scrutiny.


Read more...

Workplace benefits

March 2014
Tuesday, February 25, 2014

Health care and vacations rule. That’s the consensus from our reader poll on workplace benefits that help retain and recruit employees.


Read more...

The future of money

March 2014
Tuesday, February 25, 2014
BY JAKE THOMAS

An ancient institution moves slowly into the digital age. 


Read more...

The 2014 List: The Top 33 Small Companies to Work, For in Oregon

March 2014
Thursday, February 27, 2014

100best14logoWebOur 100 Best Companies project turned 21 this year, so pop open the Champagne. Our latest survey gives us plenty to cheer.

 


Read more...

Green your workplace

News
Thursday, April 03, 2014
100Green14logo200oxBY OB STAFF

Learn how to green your workplace and lower your environmental footprint at the office. Oregon Business presents a two-hour "Greening Your Workplace" seminar on May 28th, 2014 at the Nines Hotel in Portland.


Read more...

The solution to youth unemployment

News
Thursday, February 27, 2014
02.27.14 Thumbnail TeenworkBY ERIC FRUITS

Because they have little chance of working for someone else, today’s teens need to be entrepreneurs. But, first, we must teach our teens that entrepreneurship starts small.


Read more...

Tech makes the world go round

Contributed Blogs
Thursday, March 20, 2014
03.20.14 thumb internetBY JASON NORRIS | GUEST BLOGGER

I don’t think anyone can (or should) remember what it was like to get things done without the internet. This milestone in technology has certainly benefited brick-and-mortar companies and subsequently launched a new era of businesses.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS