Portland, OR | 2015 Top #CRE Markets to Watch: Industrial

Sperry Van Ness International Corporation’s (SVNIC) 2015 Market Update Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2015. Today we are delving into the 2015 Top Industrial Markets to Watch. Not the largest or the most actively contested markets, the 2015 Industrial Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Industrial Market to Watch: Portland, OR

Portland: 2015 Industrial Markets to WatchPortland’s industrial vacancy rate dipped below 6% in the first quarter of 2015, adding the region to the ranks of the tightest industrial markets in the nation. Rent gains across industrial subtypes have accelerated in kind and, in 2014 and the first quarter of 2015, were on par with higher profile markets including San Jose. The strong local economy and online commerce trends are behind the healthy absorption of warehouse, distribution, and fulfillment spaces. But the concentration of tech activity and the market’s relatively low costs have also made Portland an attractive option for data centers. As compared to markets with comparable occupancy and rent growth rates, investors will find relatively good values in Portland. The average cap rate for sales and refinancing activity was 6.2% in 2014, nearly 100 basis points higher than in the dominant Northern California and Southern California markets and 70 basis points lower than Seattle. Diverging from the positive outlook for the area’s overall industrial market, the Port of Portland faces serious challenges. In spite of the longshoremen’s new contract, the departure of Hanjin and Hapag-Lloyd — which together account for nearly all of the port’s container traffic — will be difficult to overcome.

To read more on Portland and other top industrial markets, download the full version of the 2015 Industrial Market Update report here.


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