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New high watermark for office contract rents in Portland

• A new high watermark office contract rent was recorded in Portland with the signing of a $38.00 per square foot NNN lease in the first quarter. Operating expenses for Class A buildings in the CBD average $10.75, which makes the contract rent equivalent to $48.75 per square foot, full service gross.

• The jump of $4.00 per square foot from the previous year is the largest increase on record and comes at a time when the high cost of office construction is pushing average asking rents up significantly in the urban markets.

• Newly constructed buildings are providing tenants with plenty of amenity rich options and putting pressure on landlords of dated Class A buildings to renovate and upgrade amenities in order to remain competitive.

• Average asking rents for new construction continue to increase faster than overall market rents and now stand at $34.66 per square foot NNN for all urban developments.

• As the current wave of new development peaks in 2018 and 2019, we will see a slowing of rental rate increases.  ​

Source: JLL Research

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