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Portland office market is still the 8th tightest in the U.S. despite record construction

• Increasing vacancy in Portland’s office market has knocked the metro out of the top 5 tightest markets to number 8. The metro still remains the 4th tightest on the West Coast.

• Since Portland office vacancy’s cyclical low of 8.3 percent in Q1 2016, vacancy has increased 240 basis points to 10.7 percent. The reason? Record construction.

• In the past 2 years, 2.2 million square feet of new or renovated office space has delivered in Portland and another 1 million more square feet will deliver through 2019.

• So what does the future hold? While large volumes of construction continue to deliver and push vacancy and rents higher, we’re seeing a slowdown in speculative starts and the market appears to be settling into more balanced, neutral territory. Construction completions in 2019 and 2020 are expected to be more measured than 2018, reducing potential oversupply risks. Expect this to result in more gradual uplifts in vacancy rather than a spike.

Source: JLL Research

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