Despite softer year, office leasing in Portland’s urban core still leads the suburbs
In an interesting development, the ratio between urban and suburban office leasing in Portland is the mirror opposite of what the market experienced 10 years ago.
February 25, 2019
- In an interesting development, the ratio between urban and suburban office leasing in Portland is the mirror opposite of what the market experienced 10 years ago. In 2007, the peak of the spread, suburban leasing made up 63 percent of office leasing in the metro, with urban leasing making up 37 percent. This ratio completely reversed in 2017 with urban leasing making up 62 percent and suburban 38 percent of leasing.
- The preference for urban office is not just showcased by the change in leasing volume but also by the spread in rents. In 2008, the urban rent premium stood at 6.4 percent. 10 years later, in 2018, that premium has increased to 30.5 percent.
- Although urban leasing still dominates suburban, urban leasing velocity in 2018 dropped by roughly 25 percent with super-size deals above 100,000 s.f. absent.
- The recovery in office leasing in Portland’s urban core was led by the tech industry in 2012 but with the shift to profitability more important, for the first time since 2011, technology no longer accounts for the most leasing activity. In 2018, the industry with the most office leasing in Portland was Professional Services at 29 percent.
Source: JLL Research