Disciplined industrial development keeps vacancy low in Portland
2018 saw the most industrial construction delivered to the metro since 1997.
February 18, 2019
- 2018 saw the most industrial construction delivered to the metro since 1997 but if you peel out build-to-suit and owner-occupied projects, then industrial development activity starts to look a lot more restrained.
- Over the last 5 years, a healthy and stable volume of speculative industrial construction in the range of 1.2 to 2.5 million square feet has delivered each year. With demand for industrial space strong, this disciplined construction pipeline has resulted in historically low vacancy levels, currently at 3.8 percent.
- The strict urban growth boundary remains an impediment for industrial development and the majority of new construction is occurring on the metro’s fringes. It’s no surprise that in the last 5 years, more than half of the new industrial development occurred further out towards Troutdale in the metro’s largest submarket, the NE Columbia Corridor. Looking at the construction pipeline ahead, that trend will become more pronounced with 69 percent of buildings currently under construction being in the NE Columbia Corridor.
- Big boxes remain popular with developers. 80 percent of the square feet currently under construction is spread across 8 buildings larger than 100,000 square feet. The largest of which is Trammel Crow and Principal’s Blue Lake Corporate Center’s at 463,500 square feet between 2 buildings.
Source: JLL Research