Troubled commercial markets bring lower rents

| Print |  Email
Archives - August 2009
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

Fighting Fire With Fire

May 2015
Friday, April 24, 2015
BY BEN DEJARNETTE | INVESTIGATEWEST

Timber companies and environmental groups take a stab at collaboration to boost logging and restoration in Oregon fires.


Read more...

Much ado about data-driven organizations, for good reason

Contributed Blogs
Monday, April 13, 2015
bigdatathumbBY GRANT KIRBY | OP-ED CONTRIBUTOR

The mega-shift from technology-driven to data-driven organizations raises questions about Oregon’s workforce preparedness.


Read more...

Can small be large?

Linda Baker
Wednesday, April 01, 2015
040115-lindablogthumbBY LINDA BAKER

Leaders in Oregon's ag sector gathered this morning in Portland’s Coopers Hall winery/taproom to discuss the role of the region as an export gateway, impediments to exporting products and solutions to containerized shipping challenges.


Read more...

Footloose

April 2015
Friday, March 27, 2015
BY LINDA BAKER

Founded 12 years ago, Keen Inc. likes to push the envelope, starting with the debut of the “Newport” closed toe sandal in 2003. Since then, the company has opened a factory on Swan Island and a sleek new headquarters in the Pearl District. The brand’s newest offering, UNEEK, is a sandal made from two woven cords and not much more.


Read more...

It's a Man's Man's Man's World

May 2015
Friday, April 24, 2015
BY AMY MILSHTEIN

Male tech workers speak out on the industry's gender troubles.


Read more...

Man for All Seasons

May 2015
Monday, April 27, 2015
BY LINDA BAKER

A longtime technologist and entrepreneur, Dwayne Johnson, 53, is managing partner of PDXO/GlobeThree Ventures, a strategy and business consultancy in Portland.


Read more...

An uncertain future

Guest Blog
Thursday, May 21, 2015
norristhumbBY JASON NORRIS | GUEST BLOGGER

Uncertainty is a part of doing business, whether in through the lens of investment opportunities and risks or the business of running an enterprise.


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