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Concessions are increasing – eating into landlord net effective rents

  • ​Between 2015 and 2016 Portland landlord net effective rents (landlord net effective rents include TI’s and free rent as part of calculation) climbed 18.9 percent while average asking rents climbed 7.9 percent, highlighting a landlord favorable market. However, significant new construction now offers tenants more options and landlords have increased concessions. These concessions have impacted landlord net effective rents, which are down 1.5 percent in 2017.
  • Between 2016 and 2017 average asking rents rose 5.9 percent, while net effective rents remained stable.
  • As considerable square footage delivers through 2018, net absorption is anticipated to fall behind deliveries leading to a modest rise in vacancy. Tenants will have more options and landlord’s are likely to offer more concessions to capture demand; shifting a landlord favorable market to a more balanced one. 

Source: JLL Research

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